Annual Report • Nov 17, 2010
Annual Report
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indexed on the Allianz share price in €
Source: Thomson Reuters Datastream
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| Share type | Registered share with restricted transferability |
|---|---|
| Security Codes | WKN 840 400 ISIN DE 000 840 400 5 |
| Bloomberg | ALV GY |
| Reuters | ALVG.DE |
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| Three months ended September 30, | Nine months ended September 30, | ||||||
|---|---|---|---|---|---|---|---|
| 2010 | 2009 | Change from previous year |
2010 | 2009 | Change from previous year |
||
| INCOME STATEMENT1) | |||||||
| Total revenues2) | € mn | 24,522 | 22,005 | 11.4% | 80,478 | 71,895 | 11.9% |
| Operating profit3) | € mn | 2,055 | 2,009 | 2.3% | 6,089 | 5,084 | 19.8% |
| Net income from continuing operations | € mn | 1,268 | 1,390 | (8.8)% | 4,028 | 3,617 | 11.4% |
| Net income (loss) from discontinued operations, | |||||||
| net of income taxes4) | € mn | — | — | — | — | (395) | n.m. |
| Net income | € mn | 1,268 | 1,390 | (8.8)% | 4,028 | 3,222 | 25.0% |
| SEGMENTS5) | |||||||
| Property-Casualty | |||||||
| Gross premiums written | € mn | 10,600 | 10,232 | 3.6% | 34,545 | 33,640 | 2.7% |
| Operating profit3) | € mn | 1,122 | 1,031 | 8.8% | 2,981 | 2,895 | 3.0% |
| Combined ratio | % | 97.1 | 96.9 | 0.2 pts | 97.9 | 98.2 | (0.3) pts |
| Life/Health1) | |||||||
| Statutory premiums | € mn | 12,553 | 10,788 | 16.4% | 42,033 | 35,567 | 18.2% |
| Operating profit3) | € mn | 655 | 939 | (30.2)% | 2,314 | 2,201 | 5.1% |
| Cost-income ratio | % | 96.0 | 93.6 | 2.4 pts | 95.7 | 95.2 | 0.5 pts |
| Asset Management | |||||||
| Operating revenues | € mn | 1,256 | 899 | 39.7% | 3,560 | 2,395 | 48.6% |
| Operating profit3) | € mn | 521 | 368 | 41.6% | 1,503 | 825 | 82.2% |
| Cost-income ratio | % | 58.5 | 59.1 | (0.6) pts | 57.8 | 65.6 | (7.8) pts |
| Corporate and Other | |||||||
| Total revenues | € mn | 146 | 119 | 22.7% | 412 | 360 | 14.4% |
| Operating profit3) | € mn | (270) | (295) | (8.5)% | (676) | (792) | (14.6)% |
| Cost-income ratio (Banking) | % | 104.1 | 120.2 | (16.1) pts | 105.1 | 130.3 | (25.2) pts |
| BALANCE SHEET1) | |||||||
| Total assets as of September 30,6) | € mn | 622,732 | 583,717 | 6.7% | 622,732 | 583,717 | 6.7% |
| Shareholders' equity as of September 30,6) | € mn | 44,900 | 40,108 | 11.9% | 44,900 | 40,108 | 11.9% |
| Non-controlling interests as of September 30,6) | € mn | 2,171 | 2,121 | 2.4% | 2,171 | 2,121 | 2.4% |
| SHARE INFORMATION | |||||||
| Basic earnings per share1) | € | 2.80 | 3.06 | (8.5)% | 8.68 | 7.07 | 22.8% |
| Diluted earnings per share1) | € | 2.78 | 3.05 | (8.9)% | 8.62 | 7.05 | 22.3% |
| Share price as of September 30,6) | € | 82.90 | 87.15 | (4.9)% | 82.90 | 87.15 | (4.9)% |
| Market capitalization as of September 30,6) | € bn | 37.6 | 39.6 | (4.9)% | 37.6 | 39.6 | (4.9)% |
| OTHER DATA | |||||||
| Total assets under management as of September 30,6) | € bn | 1,443 | 1,202 | 20.0% | 1,443 | 1,202 | 20.0% |
| thereof: Third-party assets under management as of September 30,6) |
€ bn | 1,131 | 926 | 22.1% | 1,131 | 926 | 22.1% |
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
3) 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.
4) Following the announcement of the sale on August 31, 2008, Dresdner Bank was classified as held for sale and discontinued operations. Therefore, all revenue and profit figures presented for our continuing business do not include the parts of Dresdner Bank that we sold to Commerzbank on January 12, 2009. The loss from derecognition of discontinued
operations amounted to € 395 mn and represents mainly the recycling of components of other comprehensive income. 5) The Allianz Group operates and manages its activities through four segments: Property-Casualty, Life/Health, Asset Management and Corporate and Other. For further information please refer to note 3 of our condensed consolidated interim financial statements.
6) 2009 figures as of December 31, 2009.
We have had another strong quarter with growth in revenues (up 6.5% on an internal basis1)) and operating profit (up € 46 million to € 2,055 million). Although pre-tax income was up slightly, net income decreased by 8.8% to € 1,268 million following higher income tax expenses in this quarter.
in � bn
The increase in revenues continued to be largely driven by Life/Health, with internal growth of 11.7%. Asset Management growth was again outstanding, at 28.8%. Property-Casualty premiums declined slightly by 1.1%.
in � mn
Property-Casualty gross premiums written declined by 1.1% on an internal basis. Our selective underwriting was reflected in a positive price effect of 1.5% and a negative volume effect of 2.6%.
Strong demand for unit-linked products in particular, but also for traditional life products, supported the 11.7% internal growth in Life/Health statutory premiums.
5) Total revenues include € (33) mn, € (33) mn and € 28 mn from consolidation for 3Q 2010, 2009 and 2008, respectively.
in � mn
Asset Management achieved revenue growth of 28.8% on an internal basis, driven by an increase in management fees primarily from our fixed income business. Total assets under management amounted to € 1,443 billion, an increase of € 241 billion compared to December 31, 2009.
Totalrevenues grew by 9.0% on an internal basis. Total growth of € 8,583 million was largely attributable to a € 6,466 million increase in Life/Health statutory premiums, due to strong demand for investment-oriented products, as well as higher traditional life business revenues. The other segments also contributed positively.
in � mn
Operating profit increased by 2.3% from € 2,009 million to € 2,055 million.
In our Property-Casualty business a higher underwriting and investment result supported operating profit growth of 8.8% to € 1,122 million. Our combined ratio stood at 97.1% (3Q 09: 96.9%).
Life/Health operating profit of € 655 million was in line with our expectations. Operating profit decreased by 30.2%, however, as in the third quarter 2009 we recorded exceptional gains from credit spreads and equity market movements.
Our Asset Management segment recorded outstanding operating growth of 41.6% to € 521 million, due to an increase in net fee and commission income, partially offset by higher operating expenses. We reduced our cost-income ratio by 0.6 percentage points to 58.5%.
The Corporate and Other operating loss decreased by € 25 million to € 270 million, mainly due to an improved foreign currency result.
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Includes € 27 mn, € (34) mn and € (48) mn from consolidation for 3Q 2010, 2009 and 2008, respectively.
Operating profit grew by € 1,005 million to € 6,089 million, largely driven by Asset Management, with a € 678 million increase in operating profit. The other segments also contributed positively: Corporate and Other (+ € 116 million), Life/Health (+ € 113 million), and Property-Casualty (+ € 86 million).
The non-operating loss increased by € 31 million to € 123 million.
Non-operating income from financial assets and liabilities carried at fair value through income decreased by € 139 million, largely due to a negative € 121 million fair value impact from the valuation of The Hartford warrants.
Realized gains increased by € 60 million to € 382 million, including a further € 113 million in gains from the sale of shares in the Industrial and Commercial Bank of China (ICBC) (3Q 2009: € 0 million). As of September 30, 2010, gross ICBC unrealized gains amounted to € 475 million.
Amortization of intangible assets and goodwill includes a € 115 million goodwill impairment.
Our Asset Management segment continued to deliver an outstanding performance resulting in acquisition-related expenses of € 80 million. These expenses decreased however compared to the prior period, as the number of B-units outstanding reduced from 56,224 (September 30, 2009) to 30,129 (September 30, 2010). We have now acquired 79.9% of all outstanding B-units. When PIMCO was acquired, B-units were created entitling senior management to profit participation. Under the B-unit plan, Allianz has the right to call, while PIMCO senior management has the right to put, those B-units over several years. Fair value changes due to changes in operating earnings are reflected in acquisitionrelated expenses. Distributions received by the senior management B-unit holders are also included.
The non-operating loss amounted to € 461 million compared to € 518 million for the same period in 2009. Lower impairments were offset by a decrease in income from financial assets and liabilities carried at fair value through income (mainly driven by a € 269 million lower cumulative change in the fair value of The Hartford warrants), lower realized gains as well as higher amortization of intangible assets and PIMCO B-unit expenses.
Net income fell by 8.8% to € 1,268 million, largely due to a higher income tax expense.
The income tax expense increased by € 137 million to € 664 million in the third quarter of 2010. The effective tax rate amounted to 34.3% (3Q 09: 27.5%).
Net income attributable to shareholders amounted to € 1,264 million.
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
in �
Net income of € 4,028 million was € 806 million (or 25.0%) higher than the prior period result. € 395 million of this difference stemmed from the loss from discontinued operations due to the sale and deconsolidation of Dresdner Bank, recorded in the first quarter of 2009.
Shareholders' equity3)
As of September 30, 2010, shareholders' equity amounted to € 44,900 million, an increase of € 4,792 million compared to € 40,108 million as of December 31, 2009. Net income attributable to shareholders and unrealized gains increased our equity by € 3,918 million and € 1,774 million respectively. Positive foreign currency translation effects contributed a further € 894 million. In the second quarter of 2010, Allianz SE paid dividends of € 1,850 million for the fiscal year 2009, which reduced equity.
As of September 30, 2010, our eligible capital for solvency purposes, required for our insurance segments and our banking and asset management businesses, was € 37.4 billion, including off-balance sheet reserves of € 1.9 billion, surpassing the minimum legally stipulated level by € 15.1 billion. This margin resulted in a cover ratio of 168% at September 30, 2010. Eligible capital at September 30, 2010 also includes a deduction for accrued dividends of € 1.6 billion for the first nine months of 2010, which represents 40% of net income attributable to shareholders. Our solvency position remains strong.
1) For further information please refer to note 37 of our condensed consolidated interim financial statements.
2) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
3) Does not include non-controlling interests.
4) Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; Allianz SE has not submitted an application so far. The solvency ratio excluding off-balance sheet reserves would be 159% (2009: 155%).
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Total revenues2) | 24,522 | 22,005 | 80,478 | 71,895 |
| Premiums earned (net) | 15,742 | 14,861 | 46,515 | 43,984 |
| Operating investment result | ||||
| Interest and similar income | 4,731 | 4,506 | 14,479 | 13,720 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
177 | 388 | 510 | 605 |
| Operating realized gains/losses (net) | 608 | 569 | 1,370 | 1,393 |
| Interest expenses, excluding interest expenses from external debt | (121) | (137) | (389) | (440) |
| Operating impairments of investments (net) | (37) | (236) | (266) | (1,645) |
| Investment expenses | (177) | (195) | (569) | (548) |
| Subtotal | 5,181 | 4,895 | 15,135 | 13,085 |
| Fee and commission income | 1,961 | 1,533 | 5,671 | 4,295 |
| Other income | 22 | 8 | 87 | 27 |
| Claims and insurance benefits incurred (net) | (11,353) | (11,245) | (34,116) | (34,129) |
| Change in reserves for insurance and investment contracts (net) | (3,867) | (2,776) | (10,610) | (6,123) |
| Loan loss provisions | (12) | (18) | (33) | (57) |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | (4,977) | (4,696) | (14,673) | (14,429) |
| Fee and commission expenses | (636) | (562) | (1,864) | (1,605) |
| Operating restructuring charges | — | — | (1) | 3 |
| Other expenses | (10) | — | (42) | (2) |
| Reclassification of tax benefits | 4 | 9 | 20 | 35 |
| Operating profit (loss) | 2,055 | 2,009 | 6,089 | 5,084 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(27) | 112 | (129) | 150 |
| Non-operating realized gains/losses (net) | 382 | 322 | 1,326 | 1,535 |
| Non-operating impairments of investments (net) | (32) | (46) | (271) | (942) |
| Subtotal | 323 | 388 | 926 | 743 |
| Income from fully consolidated private equity investments (net) | (48) | (34) | (100) | (191) |
| Interest expenses from external debt | (225) | (228) | (667) | (680) |
| Acquisition-related expenses | (80) | (112) | (388) | (166) |
| Amortization of intangible assets | (78) | (37) | (112) | (52) |
| Non-operating restructuring charges | (11) | (60) | (100) | (137) |
| Reclassification of tax benefits | (4) | (9) | (20) | (35) |
| Non-operating items | (123) | (92) | (461) | (518) |
| Income (loss) from continuing operations before income taxes | 1,932 | 1,917 | 5,628 | 4,566 |
| Income taxes | (664) | (527) | (1,600) | (949) |
| Net income (loss) from continuing operations | 1,268 | 1,390 | 4,028 | 3,617 |
| Net income (loss) from discontinued operations, net of income taxes | — | — | — | (395) |
| Net income (loss) | 1,268 | 1,390 | 4,028 | 3,222 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 4 | 16 | 110 | 34 |
| Shareholders | 1,264 | 1,374 | 3,918 | 3,188 |
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) 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).
Risk management is an integral part of our business processes and supports our value-based management.
Interest rates in major currencies have fallen since the end of 2009. This has not yet had a material impact on our IFRS financial results and FCD solvency ratio. We continue to monitor this development closely and take action as appropriate. If such market conditions continue, it may eventually impact our financial results, e.g. in the form of lower financial income.
For further information, we refer you to the risk report in our 2009 Annual Report (pages 178 et seqq). The risks described therein essentially remain unchanged.
Allianz Group's management feels comfortable with the Group's overall risk profile and has confidence in the effectiveness of the Group's risk management framework to meet the challenges of a rapidly changing environment as well as day-to-day business needs.
In October 2010, the Allianz Group sold 0.3 billion ICBC shares with a capital gain of approximately € 0.1 billion.
On October 25, 2010, an earthquake and a following tsunami devastated the Pagai Islands in Indonesia. Based on current information, gross claims are expected to be less than € 20 million.
The pension age in France has increased from 60 to 62. Management currently does not believe that this will affect the Allianz Group severely.
On November 1, 2010 the sale of Alba, Phenix and Phenix Vie to Helvetia Group was completed.
The global economy has clocked up some remarkable achievements over the past one-and-a-half years or so: industrial production has managed to shrug off a slump of 12%, while global trade has clambered back from a 21% nosedive, with global trade and industrial production now at roughly the same level as before the financial and economic crisis took hold. Although growth dynamics are very disparate across different regions, the economic recovery is set to continue well into next year. Nevertheless, in a host of countries it will take several years before output is back at pre-crisis levels. The financial markets are likely to remain nervous. In view of the risks stemming from the ongoing need for adjustment and consolidation, the environment for financial service providers will continue to be challenging.
Data on industrial activity and business sentiment have been hinting at ebbing growth momentum worldwide for some time now. For the remainder of this year and in the year to come we expect a more moderate economic development, but no relapse into recession. After a 3.7% rise in global output in 2010, the increase is expected to be slightly weaker next year at 3.3%. Growth rates are set to fall both in the industrialized countries and in the emerging markets, although the slowdown in the industrial economies will be more pronounced than in their emerging counterparts. The developing countries will continue to grow much faster than the developed world, thereby steadily increasing their overall share in global output.
Countries with heavily over-indebted private and public sectors will tend to grow more slowly than economies that are free from such macroeconomic imbalances: in the case of the former group of countries the necessary consolidation efforts will weigh on their economic prospects and therefore on growth. This also explains why the emerging but, in some cases, seriously indebted economies of Eastern Europe are getting back into their stride more slowly than the Asian emerging markets with their surpluses.
The robust performance in key Latin American countries is a positive surprise. Thanks to its economic policy successes and the resulting stabilization, Brazil has weathered the global economic and financial crisis very well. Growth momentum will remain solid well into next year. The U.S. economy shook off the crisis in the second half of 2009, but growth momentum has clearly slowed in the past two quarters. In Europe, the German economy is set to record a considerably above-average performance this year, with the positive interplay between rising employment, increasing incomes and higher demand suggesting that the German recovery has now developed a momentum of its own.
The Euro area sovereign debt crisis sent sizeable shockwaves through the financial markets. Although the credit spreads of the debt-laden member countries such as Greece, Portugal, Ireland, and Spain narrowed during the quarter, risk premiums still remain at a very high level. In the third quarter of 2010, the flight to safety was the main trigger behind a further slide in German government bond yields. We do not expect yields to languish permanently at record low levels. In particular, we expect to see further progress in the consolidation of public finances in the Euro area over the course of next year, along with a minor pickup in inflation and a gradual reining in of expansionary monetary policy. In an overall friendly economic environment, all of this will serve to push up capital market yields, once risk aversion has faded. In the Euro area, we expect to see 10-year government benchmark bond yields nudge above 3% as next year progresses. With capacity utilization in the corporate sector higher, rising profits will give the stock market a fillip. However, the lingering uncertainty about the medium-term economic growth outlook suggests that stock market gains will be limited.
After another strong quarter, and all segments delivering better results than in the first nine months of 2009, we expect the Allianz Group operating profit to trend towards the upper end of our 2010 target range of around € 7.2 billion, plus or minus € 0.5 billion.
Our Property-Casualty business continued to be burdened with a high level of natural catastrophe related losses, which have already exceeded our expected level of approximately € 900 million for the whole of 2010 by € 218 million. We expect market conditions in a number of our core markets to remain challenging. However our accident year loss ratio excluding natural catastrophes has developed favorably and is below 70.0% for the first nine months of 2010. Attaining the lower end of our target range for Property-Casualty is within reach.
Life/Health revenues continue to grow strongly, and with our nine month operating profit of € 2,314 million we are already within our target range for the full year. The full year result is subject to capital market volatility in the fourth quarter of 2010.
Asset Management operating profit to date of € 1,503 million has already surpassed € 1.3 billion, the upper end of our target range.
The operating profit outlook for our Corporate and Other segment together with consolidation effects is expected to remain within our target range.
With a solvency ratio of 168%1), the Allianz Group capital position remains solid.
For full details of the assumptions and sensitivities on which our outlook is based, please refer to the Allianz Group Annual Report 2009.
As always, natural catastrophes and adverse developments in the capital markets, as well as the factors stated in our cautionary note regarding forward-looking statements, may severely impact the results of our operations.
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. The solvency ratio excluding off-balance sheet reserves would be 159% (2009: 155%).
The Allianz Group business operations and structure are described in detail in the 'Business Operations and Steering' chapter of our Annual Report 2009 (pages 57 et seqq). For a description of recent organizational changes please refer to note 3 of our condensed consolidated interim financial statements.
The Allianz Group strategy is described in detail in the 'Strategy' chapter of our Annual Report 2009 (pages 63 et seqq). There have been no material changes to our strategy as described therein.
For an overview of the products and services offered by the Allianz Group, as well as the sales channels, please refer to the 'Business Operations and Steering' chapter (pages 57 et seqq) and 'Local Presence and Global Diversification' chapter (pages 68 et seqq) of our Annual Report 2009.
The statements contained herein may include 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 that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the
frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) 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 forwardlooking statement.
Gross premiums written decreased by 1.1% on an internal basis, made up of a negative volume effect of 2.6% and a positive price effect of 1.5%. The decline in volume stemmed mainly from the United States, Italy and Germany. Strong average premium improvements in Italy, the United Kingdom and Australia almost compensated for the decline in volume. Excluding our U.S. crop insurance business internal growth was almost flat at minus 0.2%.
On a nominal basis revenues increased by 3.6% or € 368 million to € 10,600 million. Of this increase, € 486 million related to foreign currency translation effects, primarily from the appreciation of the U.S. Dollar and the Australian Dollar against the Euro.
In analyzing internal premium growth in terms of "price" and "volume" effects, we use three clusters:
Cluster 1: Both price and volume effects are positive Cluster 2: Either price or volume effects are positive Cluster 3: Both price and volume effects are negative
| Cluster 1 | ||
|---|---|---|
| South America | 11.1 13.8 |
|
| Credit Insurance | 9.7 1.8 |
|
| Australia | 9.3 7.7 |
|
| Asia-Pacific | 1.9 5.3 |
|
| Cluster 2 | ||
| Allianz Sach | (2.4) (2.9) |
|
| Italy | (2.4) (4.5) |
|
| France | (2.5) (2.4) |
|
| Spain | (2.9) | 2.1 |
| United States | (10.9) (9.0) |
|
| United Kingdom | 3.7 4.1 |
|
| Central and Eastern Europe | (5.2) (5.2) |
|
| Cluster 3 | ||
| AGCS | (4.8) (1.9) |
|
| (20) | (10) 0 |
10 20 |
| 3Q 2010 over 3Q 2009 9M 2010 over 9M 2009 |
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) Before elimination of transactions between Allianz Group companies in different geographic regions and different segments.
In South America gross premiums rose by 11.1%. All countries in the region contributed positively to the gross premiums written of € 401million, in particular Brazil, where growth stemmed from all business lines, except for large and industrial segments. Including a positive foreign currency translation effect of € 61 million, the nominal growth was 31.0%.
In the credit insurance business gross premiums increased by 9.7% to € 417 million. Higher insured volume, increased business retention and re-pricing activities were the reasons for the positive development. The positive price effect was around 4.1%.
In Australia gross premiums amounted to € 594 million, including a favorable foreign currency translation effect of € 100 million. The internal growth of 9.3% was a result of higher volume and increased prices stemming in particular from motor business and household insurance. The price increases were applied across most business lines already in 2009. We estimate the positive price effect to be 6.2%.
In Asia-Pacific gross premiums were € 126 million. Internal growth was 1.9%, excluding the transfer of Allianz Fire and Marine Insurance Japan from Asia-Pacific to AGCS and a positive foreign currency translation effect of € 21 million. This increase was mainly volume driven, in particular by our motor business in Malaysia.
At Allianz Sach gross premiums fell by 2.4% to € 1,859 million, despite a slightly positive price development of about 0.3%. The negative growth was mainly due to a declining policy count in the motor business. This resulted from portfolio cleaning in fleets and fewer car pools in commercial lines. Our non-motor business volume also declined, largely driven by general third-party liability insurance.
In Italy gross premiums were down by 2.4% to € 809 million, largely driven by non-motor business, as small- to mediumsized companies continued to suffer the effects of the economic recession. Our motor business recorded positive growth as a result of significant price increases over the last months. We estimate the overall positive price effect to be 10.6%.
In France gross premiums were € 754 million, down 2.5%. Volume declined following price increases in motor fleets and small and large commercial lines. Price increases were applied to the portfolio and were higher in our personal lines, particularly in non-motor business. The positive price effect was approximately 2.7%.
In Spain gross premiums written decreased to € 464 million. Adjusting for the portfolio transfer from Spain to AGCS, premiums declined by 2.9%. We lost volume in the motor business due to the introduction of higher domestic VAT rates and the expiry of car scrapping incentives in July 2010. The economic recession continued to put pressure on prices, especially in the highly competitive commercial lines. However, we started to see benefits from the rate increases in our motor business, resulting in a positive price effect, estimated at 0.2%.
In the United States gross premiums declined by 10.9%. Gross premiums written amounted to € 1,378 million, including a positive foreign currency translation effect of € 132 million and the transfer of marine business to AGCS. The negative impact of our crop insurance business due to increasing commodity prices made up two thirds of the decline. The remaining decline resulted from lower volume in personal and commercial lines, reflecting continuing soft market conditions and selective underwriting. Nonetheless, there was an overall positive price effect of about 0.8% stemming from personal lines.
In the United Kingdom gross premiums stood at € 463 million. Excluding a favorable foreign currency translation effect of € 20 million, internal growth was 3.7%. Lower volume resulting from portfolio cleaning was more than offset by a positive price development due to increased rates, especially in the retail motor business. Despite a challenging market, commercial business prices remained stable. We estimate the positive price effect to be 8.3%.
In Central and Eastern Europe gross premiums amounted to € 628 million. Adjusting for a positive foreign currency translation effect, internal growth was negative at 5.2%. Volume improved slightly, mainly driven by our motor business in Russia, due to the introduction of car scrapping incentives. However, the increase in volume could not compensate for the decline in prices. Significant rate reductions were recorded in particular in Hungary, the Czech Republic and Romania and were a result of the current economic environment. We estimate the overall price effect to be minus 6.8%.
At AGCS gross premiums were € 899 million. Taking into account several portfolio transfers within the propertycasualty insurance segment to AGCS, gross premiums declined by 4.8%. Lower volume led to this development, in particular from our property and engineering businesses in France and in the United Kingdom. We also saw a negative price effect across most of our business lines, estimated at 0.8%.
Gross premiums written were down by 0.4%. This is explained by a 1.1% reduction in volume and a positive price effect of 0.7%. On a nominal basis, revenues increased by 2.7% mainly driven by favorable foreign currency translation effects amounting to € 1,051 million. We recorded no changes in the scope of consolidation. Excluding our U.S. crop insurance business internal growth was almost flat at minus 0.1%.
Operating profit increased by 8.8%, or € 91 million, to € 1,122 million, due to higher underwriting and investment results.
The underwriting result improved by € 43 million to € 264 million, benefiting from higher favorable run-off and the positive development of our credit insurance business. In contrast, we recorded higher losses from natural catastrophes of € 307 million and from extraordinary expense items of approximately € 46 million.
Net investment income increased by 6.3% to € 841 million, primarily driven by higher interest and similar income.
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Premiums earned (net) | 10,269 | 9,752 | 29,371 | 28,449 |
| Accident year claims | (7,401) | (7,032) | (21,603) | (20,681) |
| Run-off result | 355 | 186 | 1,090 | 594 |
| Acquisition and administrative expenses (net) | (2,921) | (2,606) | (8,242) | (7,838) |
| Underwriting residual1) | (38) | (79) | (149) | (150) |
| Underwriting result | 264 | 221 | 467 | 374 |
1) Consists of changes in aggregate policy reserves and other insurance reserves.
The combined ratio stood at 97.1% compared to 96.9% in the prior year. This was driven by the higher favorable runoff result, which almost offset higher expenses. Despite the significantly higher level of natural catastrophes, the accident year loss ratio was unchanged.
The accident year loss ratio was 72.1%. Of this, 3.0 percentage points came from natural catastrophes, while in the third quarter of 2009, natural catastrophes represented 1.6 percentage points of the accident year loss ratio of 72.1%. Excluding natural catastrophes, our accident year loss ratio improved by 1.4 percentage points due to a higher average annual premium and the recovery of our credit insurance business. Moreover, we recorded a lower level of large claims.
The following operations contributed negatively to our accident year loss ratio:
The following operations contributed positively to our accident year loss ratio:
The United States with (0.5) percentage points due to a favorable development of the agribusiness driven by higher than expected yields and commodity prices. The lower level of large claims also had a positive impact.
France with (0.3) percentage points due to active portfolio management including cleaning actions and tariff increases. This was partially offset by a higher level of large claims in the property insurance business.
The expense ratio increased by 1.7 percentage points to 28.4%.
Acquisition and administrative expenses increased on a nominal basis by € 315 million to € 2,921 million. Of these, unfavorable foreign currency translation effects accounted for € 115 million. In addition, we had to write down reinsurance receivables for a large claim that occurred in 2009 and recorded further expenses due to the ad-hoc introduction of a financial crisis tax in Hungary. Moreover, our administrative expenses in the third quarter of 2009 were positively impacted by the settlement of a health benefits plan in the United States.
The underlying development in administration expenses overall was flat.
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Interest and similar income | 917 | 865 | 2,756 | 2,730 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
30 | 33 | 18 | 81 |
| Operating realized gains/losses (net) | 19 | 35 | 31 | 51 |
| Interest expenses | (30) | (20) | (74) | (80) |
| Operating impairments of investments (net) | (2) | (4) | (8) | (70) |
| Investment expenses | (60) | (67) | (169) | (183) |
| Change in reserves for insurance and investment contracts (premium refunds) | (33) | (51) | (95) | (105) |
| Operating net investment income | 841 | 791 | 2,459 | 2,424 |
Net investment income improved by € 50 million to € 841 million mainly due to higher interest and similar income.
Interest and similar income grew by € 52 million to € 917 million. Net of interest expenses, the result increased by € 42 million, of which higher income on equities accounted for € 22 million. Fixed income securities contributed € 26 million to the increase as negative effects from lower yields were compensated by the increasing share of debt securities in our portfolio. The total average asset base increased from € 89.5 billion in the third quarter 2009 to € 94.8 billion this quarter.
Operating profit improved from € 2,895 million to € 2,981 million. Both the underwriting result and the operating net investment income contributed positively to this growth.
Our combined ratio decreased by 0.3 percentage points to 97.9%. Higher losses from natural catastrophes and weather related claims resulted in a negative impact of 1.9 percentage points. This was largely compensated for by a favorable run-off result.
The expense ratio increased slightly by 0.5 percentage points to 28.1%.
1) 'Operating net investment income', as defined above, includes the investment-related part (premium refunds) of 'Change in reserves for insurance and investment contracts (net)' and therefore differs from the 'Operating investment result' as shown in note 3 of our condensed consolidated interim financial statements.
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Gross premiums written1) | 10,600 | 10,232 | 34,545 | 33,640 |
| Ceded premiums written | (1,184) | (1,368) | (3,609) | (3,723) |
| Change in unearned premiums | 853 | 888 | (1,565) | (1,468) |
| Premiums earned (net) | 10,269 | 9,752 | 29,371 | 28,449 |
| Interest and similar income | 917 | 865 | 2,756 | 2,730 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
30 | 33 | 18 | 81 |
| Operating realized gains/losses (net) | 19 | 35 | 31 | 51 |
| Fee and commission income | 263 | 245 | 799 | 787 |
| Other income | 8 | 5 | 16 | 13 |
| Operating revenues | 11,506 | 10,935 | 32,991 | 32,111 |
| Claims and insurance benefits incurred (net) | (7,046) | (6,846) | (20,513) | (20,087) |
| Change in reserves for insurance and investment contracts (net) | (71) | (130) | (244) | (255) |
| Interest expenses | (30) | (20) | (74) | (80) |
| Loan loss provisions | — | (2) | — | (10) |
| Operating impairments of investments (net) | (2) | (4) | (8) | (70) |
| Investment expenses | (60) | (67) | (169) | (183) |
| Acquisition and administrative expenses (net) | (2,921) | (2,606) | (8,242) | (7,838) |
| Fee and commission expenses | (251) | (229) | (752) | (692) |
| Other expenses | (3) | — | (8) | (1) |
| Operating expenses | (10,384) | (9,904) | (30,010) | (29,216) |
| Operating profit | 1,122 | 1,031 | 2,981 | 2,895 |
| Loss ratio2) in % | 68.7 | 70.2 | 69.8 | 70.6 |
| Expense ratio3) in % | 28.4 | 26.7 | 28.1 | 27.6 |
| Combined ratio4) in % | 97.1 | 96.9 | 97.9 | 98.2 |
1) For the Property-Casualty 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 |
Combined ratio | Loss ratio | Expense ratio | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended | internal1) | |||||||||||||
| September 30, | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | % | % | % | % | % | % | |
| Germany | 1,859 | 1,904 | 1,859 | 1,904 | 1,827 | 1,825 | 121 | 141 | 103.42) | 100.0 | 76.12) | 72.3 | 27.3 | 27.7 |
| Switzerland | 281 | 253 | 247 | 253 | 355 | 310 | 31 | 26 | 97.7 | 97.1 | 76.2 | 74.9 | 21.5 | 22.2 |
| Austria | 186 | 186 | 186 | 186 | 173 | 186 | 16 | 18 | 97.7 | 97.9 | 71.9 | 71.3 | 25.8 | 26.6 |
| German Speaking | ||||||||||||||
| Countries | 2,326 | 2,343 | 2,292 | 2,343 | 2,355 | 2,321 | 168 | 185 | 102.1 | 99.4 | 75.8 | 72.6 | 26.3 | 26.8 |
| Italy | 809 | 830 | 809 | 829 | 984 | 1,024 | 99 | 98 | 99.4 | 99.0 | 76.0 | 75.2 | 23.4 | 23.8 |
| France | 754 | 773 | 754 | 773 | 772 | 783 | 80 | 72 | 98.1 | 101.9 | 70.9 | 76.0 | 27.2 | 25.9 |
| Spain3) | 464 | 494 | 464 | 478 | 468 | 457 | 66 | 67 | 91.3 | 91.3 | 70.7 | 70.9 | 20.6 | 20.4 |
| South America | 401 | 306 | 340 | 306 | 282 | 217 | 31 | 18 | 96.8 | 97.2 | 65.6 | 66.3 | 31.2 | 30.9 |
| Netherlands | 201 | 211 | 201 | 211 | 198 | 206 | 10 | 18 | 98.9 | 97.2 | 67.9 | 67.6 | 31.0 | 29.6 |
| Turkey | 102 | 88 | 93 | 88 | 90 | 70 | 11 | 10 | 93.8 | 98.0 | 70.5 | 73.0 | 23.3 | 25.0 |
| Belgium | 85 | 87 | 85 | 76 | 67 | 67 | 6 | 10 | 103.2 | 97.5 | 67.6 | 61.7 | 35.6 | 35.8 |
| Portugal | 72 | 70 | 72 | 70 | 61 | 60 | 10 | 9 | 91.9 | 92.5 | 68.1 | 65.9 | 23.8 | 26.6 |
| Greece | 30 | 24 | 30 | 24 | 23 | 16 | 4 | 3 | 88.0 | 91.2 | 58.0 | 61.8 | 30.0 | 29.4 |
| Africa | 12 | 13 | 12 | 13 | 12 | 11 | 1 | 2 | 106.9 | 98.5 | 53.3 | 41.2 | 53.6 | 57.3 |
| Europe incl. South | ||||||||||||||
| America | 2,930 | 2,896 | 2,860 | 2,868 | 2,957 | 2,911 | 3214) | 3184) | 97.4 | 98.0 | 71.7 | 72.7 | 25.7 | 25.3 |
| United States | 1,378 | 1,404 | 1,246 | 1,399 | 882 | 924 | 110 | 131 | 97.2 | 95.0 | 70.0 | 73.9 | 27.2 | 21.1 |
| Mexico | 60 | 48 | 52 | 48 | 23 | 19 | 3 | 4 | 93.8 | 87.9 | 69.0 | 64.1 | 24.8 | 23.8 |
| NAFTA Markets | 1,438 | 1,452 | 1,298 | 1,447 | 905 | 943 | 113 | 135 | 97.2 | 94.8 | 70.0 | 73.7 | 27.2 | 21.1 |
| Allianz Global | ||||||||||||||
| Corporate & Specialty3) 5) | 899 | 908 | 899 | 944 | 727 | 673 | 83 | 122 | 96.9 | 92.4 | 68.1 | 69.3 | 28.8 | 23.1 |
| Reinsurance PC | 930 | 759 | 930 | 759 | 892 | 756 | 128 | 34 | 89.7 | 95.7 | 59.2 | 70.9 | 30.5 | 24.8 |
| United Kingdom | 463 | 427 | 443 | 427 | 467 | 416 | 49 | 98 | 96.8 | 83.6 | 62.4 | 50.2 | 34.4 | 33.4 |
| Credit Insurance | 417 | 380 | 417 | 380 | 284 | 263 | 158 | 8 | 54.3 | 106.4 | 26.8 | 77.4 | 27.5 | 29.0 |
| Australia | 594 | 452 | 494 | 452 | 425 | 315 | 66 | 49 | 99.3 | 98.3 | 75.3 | 73.8 | 24.0 | 24.5 |
| Ireland | 161 | 152 | 161 | 152 | 159 | 141 | 16 | 5 | 96.5 | 104.0 | 67.9 | 79.5 | 28.6 | 24.5 |
| ART | 163 | 201 | 143 | 201 | 44 | 42 | 20 | 12 | 56.6 | 76.4 | 16.8 | 17.8 | 39.8 | 58.6 |
| Global Insurance Lines | ||||||||||||||
| & Anglo Markets | 3,627 | 3,279 | 3,487 | 3,315 | 2,998 | 2,606 | 520 | 328 | 90.4 | 94.4 | 60.9 | 67.8 | 29.5 | 26.6 |
| Russia | 181 | 153 | 160 | 153 | 154 | 134 | (32) | 2 | 122.8 | 102.0 | 68.2 | 61.6 | 54.6 | 40.4 |
| Hungary | 92 | 118 | 95 | 118 | 87 | 109 | (22) | 1 | 137.7 | 107.5 | 80.0 | 74.5 | 57.7 | 33.0 |
| Poland | 108 | 98 | 103 | 98 | 87 | 76 | (5) | 4 | 108.9 | 97.2 | 74.5 | 66.9 | 34.4 | 30.3 |
| Slovakia | 82 | 85 | 83 | 85 | 76 | 77 | 15 | 16 | 84.8 | 83.5 | 48.3 | 49.5 | 36.5 | 34.0 |
| Romania | 56 | 64 | 56 | 65 | 46 | 35 | 1 | 2 | 103.8 | 100.6 | 73.6 | 81.7 | 30.2 | 18.9 |
| Czech Republic | 65 | 66 | 64 | 66 | 56 | 56 | 4 | 12 | 95.5 | 79.1 | 71.4 | 50.6 | 24.1 | 28.5 |
| Croatia | 19 | 20 | 19 | 20 | 19 | 19 | 3 | 3 | 94.2 | 96.3 | 61.8 | 59.3 | 32.4 | 37.0 |
| Bulgaria | 20 | 25 | 19 | 25 | 15 | 20 | 5 | 7 | 69.2 | 70.1 | 45.1 | 45.4 | 24.1 | 24.7 |
| Kazakhstan | 3 | 4 | 2 | 4 | 1 | 1 | 1 | 1 | 85.2 | 27.8 | 9.1 | 15.1 | 76.1 | 12.7 |
| Ukraine | 2 | 2 | 2 | 2 | 2 | 2 | — | (1) | 122.1 | 188.8 | 30.6 | 80.0 | 91.5 | 108.8 |
| Central and | ||||||||||||||
| Eastern Europe6) | 628 | 635 | 603 | 636 | 543 | 529 | (35) | 41 | 110.8 | 96.2 | 67.9 | 62.7 | 42.9 | 33.5 |
| Asia-Pacific (excl. Australia)5) |
126 | 121 | 105 | 103 | 73 | 63 | 15 | 9 | 87.7 | 92.0 | 58.5 | 60.0 | 29.2 | 32.0 |
| Middle East and | ||||||||||||||
| North Africa Growth Markets |
18 772 |
18 774 |
17 725 |
16 755 |
12 628 |
9 601 |
1 (19) |
— 50 |
106.7 107.8 |
142.8 96.3 |
70.0 66.7 |
78.4 62.6 |
36.7 41.1 |
64.4 33.7 |
| Assistance (Mondial) | 404 | 349 | 404 | 349 | 426 | 365 | 27 | 32 | 96.0 | 92.6 | 59.8 | 55.9 | 36.2 | 36.7 |
| Consolidation7) | (897) | (861) | (951) | (845) | — | 5 | (8) | (17) | — | — | — | — | — | — |
| Total | 10,600 | 10,232 | 10,115 | 10,232 | 10,269 | 9,752 | 1,122 | 1,031 | 97.1 | 96.9 | 68.7 | 70.2 | 28.4 | 26.7 |
1) Reflect gross premiums written on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects).
2) Net change of reserves related to savings component of UBR-business now included in claims (claims reduction of € 26 mn for 9M 2010 and of € 4 mn for 3Q 2010). Prior periods have not been
retrospectively adjusted.
3) Corporate customer business in Spain transferred to AGCS in 2010.
| Gross premiums written | Premiums earned (net) |
Operating profit/ loss |
Combined ratio | Loss ratio | Expense ratio | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine months ended | internal1) | |||||||||||||
| September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 % |
2009 % |
2010 % |
2009 % |
2010 % |
2009 % |
| Germany | 7,401 | 7,620 | 7,401 | 7,620 | 5,423 | 5,423 | 439 | 473 | 101.22) | 100.4 | 73.52) | 72.4 | 27.7 | 28.0 |
| Switzerland | 1,282 | 1,212 | 1,218 | 1,212 | 1,038 | 962 | 113 | 110 | 95.2 | 94.0 | 74.6 | 71.7 | 20.6 | 22.3 |
| Austria | 717 | 723 | 717 | 723 | 522 | 536 | 57 | 56 | 95.4 | 96.2 | 69.4 | 71.3 | 26.0 | 24.9 |
| German Speaking | ||||||||||||||
| Countries | 9,400 | 9,555 | 9,336 | 9,555 | 6,983 | 6,921 | 609 | 639 | 99.9 | 99.2 | 73.4 | 72.2 | 26.5 | 27.0 |
| Italy | 2,777 | 2,918 | 2,777 | 2,909 | 2,953 | 3,141 | 250 | 303 | 100.4 | 99.6 | 76.4 | 75.3 | 24.0 | 24.3 |
| France | 2,614 | 2,677 | 2,614 | 2,677 | 2,319 | 2,341 | 131 | 5 | 102.9 | 107.4 | 75.9 | 79.9 | 27.0 | 27.5 |
| Spain3) | 1,575 | 1,644 | 1,575 | 1,542 | 1,375 | 1,356 | 205 | 217 | 90.4 | 90.1 | 70.0 | 69.8 | 20.4 | 20.3 |
| South America | 1,117 | 829 | 943 | 829 | 795 | 600 | 80 | 49 | 97.7 | 99.0 | 65.8 | 66.3 | 31.9 | 32.7 |
| Netherlands | 730 | 737 | 730 | 737 | 605 | 603 | 35 | 45 | 99.3 | 98.8 | 68.9 | 68.6 | 30.4 | 30.2 |
| Turkey | 370 | 315 | 345 | 315 | 250 | 197 | 19 | 12 | 99.6 | 106.2 | 73.7 | 80.3 | 25.9 | 25.9 |
| Belgium | 280 | 277 | 280 | 266 | 200 | 198 | 27 | 33 | 99.7 | 96.5 | 65.0 | 60.8 | 34.7 | 35.7 |
| Portugal | 224 | 217 | 224 | 217 | 182 | 179 | 26 | 30 | 93.3 | 91.4 | 69.1 | 65.5 | 24.2 | 25.9 |
| Greece | 88 | 71 | 88 | 71 | 63 | 45 | 12 | 9 | 87.1 | 89.4 | 55.5 | 58.9 | 31.6 | 30.5 |
| Africa | 59 | 57 | 59 | 57 | 31 | 29 | 4 | 5 | 100.4 | 96.1 | 56.9 | 52.3 | 43.5 | 43.8 |
| Europe incl. South America |
9,834 | 9,742 | 9,635 | 9,620 | 8,773 | 8,689 | 8004) | 7274) | 99.0 | 100.0 | 73.2 | 74.0 | 25.8 | 26.0 |
| United States | 2,821 | 2,978 | 2,675 | 2,939 | 2,104 | 2,388 | 190 | 321 | 102.9 | 97.5 | 70.5 | 69.0 | 32.4 | 28.5 |
| Mexico | 158 | 148 | 141 | 148 | 65 | 59 | 7 | 9 | 97.5 | 90.1 | 69.1 | 65.6 | 28.4 | 24.5 |
| NAFTA Markets | 2,979 | 3,126 | 2,816 | 3,087 | 2,169 | 2,447 | 197 | 330 | 102.8 | 97.3 | 70.5 | 68.9 | 32.3 | 28.4 |
| Allianz Global | ||||||||||||||
| Corporate & Specialty3) 5) | 3,078 | 2,992 | 3,078 | 3,139 | 2,129 | 1,811 | 317 | 425 | 95.0 | 88.4 | 67.7 | 65.3 | 27.3 | 23.1 |
| Reinsurance PC | 3,308 | 3,053 | 3,308 | 3,053 | 2,471 | 2,308 | 188 | 149 | 95.7 | 97.4 | 70.0 | 71.1 | 25.7 | 26.3 |
| United Kingdom | 1,454 | 1,351 | 1,407 | 1,351 | 1,315 | 1,206 | 140 | 196 | 95.8 | 91.0 | 61.5 | 57.7 | 34.3 | 33.3 |
| Credit Insurance | 1,356 | 1,332 | 1,356 | 1,332 | 836 | 866 | 332 | (16) | 70.7 | 113.5 | 40.2 | 85.1 | 30.5 | 28.4 |
| Australia | 1,589 | 1,190 | 1,282 | 1,190 | 1,181 | 859 | 203 | 149 | 97.7 | 97.4 | 72.8 | 72.6 | 24.9 | 24.8 |
| Ireland | 528 | 496 | 528 | 496 | 440 | 428 | 24 | — | 102.9 | 108.9 | 78.9 | 82.3 | 24.0 | 26.6 |
| ART | 509 | 356 | 473 | 356 | 122 | 136 | 41 | 39 | 67.1 | 89.9 | 24.7 | 42.4 | 42.4 | 47.5 |
| Global Insurance Lines & Anglo Markets |
11,822 | 10,770 | 11,432 | 10,917 | 8,494 | 7,614 | 1,245 | 942 | 93.3 | 96.6 | 65.4 | 69.5 | 27.9 | 27.1 |
| Russia | 543 | 518 | 490 | 518 | 429 | 398 | (35) | 21 | 112.5 | 97.7 | 65.6 | 56.9 | 46.9 | 40.8 |
| Hungary | 338 | 362 | 325 | 362 | 275 | 314 | 4 | 38 | 109.0 | 97.3 | 67.9 | 67.9 | 41.1 | 29.4 |
| Poland | 322 | 278 | 295 | 278 | 252 | 217 | (9) | 11 | 106.9 | 99.3 | 72.3 | 64.8 | 34.6 | 34.5 |
| Slovakia | 276 | 288 | 276 | 288 | 222 | 232 | 35 | 58 | 90.1 | 79.2 | 59.5 | 49.4 | 30.6 | 29.8 |
| Romania | 175 | 213 | 173 | 213 | 124 | 107 | 2 | 3 | 103.8 | 101.8 | 79.4 | 78.8 | 24.4 | 23.0 |
| Czech Republic | 204 | 206 | 195 | 206 | 157 | 162 | 17 | 33 | 93.3 | 80.5 | 69.4 | 56.9 | 23.9 | 23.6 |
| Croatia | 68 | 69 | 67 | 69 | 56 | 58 | 7 | 5 | 94.8 | 99.8 | 61.3 | 62.8 | 33.5 | 37.0 |
| Bulgaria | 63 | 70 | 63 | 70 | 49 | 53 | 13 | 12 | 76.4 | 81.8 | 47.7 | 50.5 | 28.7 | 31.3 |
| Kazakhstan | 23 | 8 | 23 | 8 | 5 | 4 | 2 | (1) | 79.8 | 133.2 | 20.4 | 49.3 | 59.4 | 83.9 |
| Ukraine | 6 | 6 | 6 | 6 | 4 | 6 | — | (2) | 115.5 | 144.9 | 29.4 | 52.1 | 86.1 | 92.8 |
| Central and Eastern Europe6) |
2,018 | 2,018 | 1,913 | 2,018 | 1,573 | 1,551 | 21 | 162 | 103.6 | 93.5 | 66.7 | 60.6 | 36.9 | 32.9 |
| Asia-Pacific | ||||||||||||||
| (excl. Australia)5) Middle East and |
378 | 372 | 335 | 318 | 208 | 189 | 36 | 20 | 90.2 | 96.5 | 60.6 | 62.0 | 29.6 | 34.5 |
| North Africa | 58 | 53 | 56 | 47 | 33 | 26 | 1 | 2 | 109.4 | 138.9 | 73.5 | 72.0 | 35.9 | 66.9 |
| Growth Markets | 2,454 | 2,443 | 2,304 | 2,383 | 1,814 | 1,766 | 58 | 184 | 102.1 | 94.5 | 66.1 | 60.9 | 36.0 | 33.6 |
| Assistance (Mondial) | 1,177 | 1,044 | 1,177 | 1,044 | 1,123 | 987 | 69 | 72 | 96.2 | 96.0 | 60.4 | 59.2 | 35.8 | 36.8 |
| Consolidation7) | (3,121) | (3,040) | (3,206) | (2,966) | 15 | 25 | 3 | 1 | — | — | — | — | — | — |
| Total | 34,545 | 33,640 | 33,494 | 33,640 | 29,371 | 28,449 | 2,981 | 2,895 | 97.9 | 98.2 | 69.8 | 70.6 | 28.1 | 27.6 |
4) Contains € 11 mn and € 11 mn for 9M 2010 and 9M 2009, respectively from a management holding located in Luxembourg (€ 4 mn and € 4 mn for 3Q 2010 and 3Q 2009, respectively) and also € 0 mn
and € 8 mn for 9M 2010 and 9M 2009, respectively from AGF UK (€ – 1 mn and € 7 mn for 3Q 2010 and 3Q 2009, respectively).
5) From 1Q 2010 onwards, Allianz Fire and Marine Insurance Japan Ltd. is shown within AGCS. Prior year figures have not been adjusted.
6) Contains income and expense items from a management holding.
7) Represents elimination of transactions between Allianz Group companies in different geographic regions.
– Revenue growth of 11.7% to € 12,553 million.1)
– Operating profit of € 655 million.
As of July 1, 2010, we changed our accounting policy for fixed-indexed annuities, which impacted the result of our U.S. business.2) Therefore the prior quarter figures were restated.
Statutory premiums grew by 11.7% on an internal basis, mainly driven by positive developments in the United States and Asia-Pacific. A strong demand for unit-linked products and a solid increase in sales of traditional life products in our major markets supported overall growth. Demand for investment contracts with guarantees and profit participation decreased slightly compared to last year's level. On a nominal basis, overall growth amounted to 16.4%.
In the United States, total premiums increased by 62.6% on an internal basis. Premiums amounted to € 2,234 million. Last year's quarter saw depressed premium volumes as suspension of our variable annuity living benefit riders was still in force. One year later, sales of our repriced variable annuity products have increased significantly while demand for our fixed index annuity products remained strong.
Our business in Asia-Pacific achieved premiums of € 1,681 million. Internal growth was 45.3%. Demand for unit-linked and investment-oriented products in this region remained high. In Japan, demand for our variable annuity products sold via our bank partners has increased steadily. Here, we recorded a significant growth in sales from € 22 million to
1) We comment on the development of our statutory premiums written on an internal basis; meaning adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information.
2) For further information please refer to note 2 of our condensed consolidated interim financial statements.
3) Before elimination of transactions between Allianz Group companies in different geographic regions and different segments.
€ 394 million. Premiums in South Korea increased by 11.6% on an internal basis, driven by our investment-oriented business with guarantees, with strong demand for our single premium equity index and other investment products sold via the bancassurance channel. Premiums in Taiwan grew by 21.1% on an internal basis, mainly driven by the increase in our pure unit-linked business without guarantees.
Premiums in France grew by 4.8% to € 1,732 million, mainly driven by higher sales of unit-linked products, while premiums from our traditional business also increased. Growth was partially offset by a decrease in sales of our non-unitlinked investment-oriented products.
In our German life business premiums increased by 4.3% to € 3,471 million. The increase was driven by a continuous growth in single premiums from traditional life products, of which the major part stemmed from private business. This development was partially offset by less commercial single premiums and a decrease in recurring premiums due to maturities and lapses of in-force private business. In the German health business we saw revenue growth of 1.3%.
In Central and Eastern Europe, our premiums amounted to € 223 million, which is a decrease of 0.9% on an internal basis. Premiums declined due to a decrease in sales of payment protection insurance in Poland. This development was partially offset by an increase in sales of single premium products in Czech Republic.
In Switzerland, premiums decreased by 5.7% to € 225 million, due to lower sales of investment-oriented contracts, mostly products with guarantees, and a decrease in traditional business. In addition, single premiums from individual life contracts were significantly lower due to the negative impact of lower interest rates on sales of insurance contracts and reorganization of the sales force.
Premiums in Italy decreased by 17.0% to € 1,367 million. Growth in our unit-linked business was offset by lower sales of investment-oriented products by our bancassurance channels. Last year we experienced a very strong demand for our investment-oriented product with guarantees.
In the first nine months of 2010 we grew our statutory premiums by 15.4% on an internal basis. Premiums stood at € 42,033 million. Growth on a nominal basis amounted to 18.2%. The prior year period was affected by the financial markets crisis, with first signs of recovery in the third quarter of 2009. Premium growth in 2010 reflects the return of consumers' confidence, supported by positive developments in capital markets worldwide. Overall demand for investment and traditional insurance products increased.
in € mn
Operating profit decreased from € 939 million to € 655 million. This quarter's fair value results2) were lower after exceptional gains in 2009 from credit spreads and equity market movements. As part of the annual assumption review process for deferred acquisition costs-computation we recorded a negative impact (of € 42 million) on operating profit from true-ups. Exceptional impacts from the adjustment of deferred acquisition costs for lapsed policies in Slovakia and the introduction of a financial crisis tax in Hungary also lowered operating profit.
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Recorded in net gain from financial assets and liabilities carried at fair value through income.
Interest and similar income increased by € 81 million to € 3,646 million. Lower interest rates led to a decline in debt yields: from 1.2% to 1.1% this quarter. This was compensated by a growth-driven increase in our debt portfolio: the total average asset base increased from € 303.8 billion in the third quarter 2009 to € 346.7 billion this quarter.
Net gains from financial assets and liabilities carried at fair value decreased by € 233 million to € 127 million. The upward trend in equity markets led to a positive result from fair value options, but on a much lower level as equity market development this quarter was not as strong as the third quarter of last year. In addition, last year's exceptional result was driven by favorable credit spread development. The overall decrease in our fair value result was partially offset by a positive development in our trading result.
Net impairments on investments decreased from € 232 million to € 95 million as capital markets stabilized.
Change in reserves for insurance and investment con-
tracts (net) amounted to € 3,673 million, up € 1,011 million compared to the third quarter of 2009. The increase is due to higher reserves following higher sales in our traditional business in Germany and increased variable annuity reserves in the United States where interest rates were lower.
Acquisition and administrative expenses (net) amounted to € 1,000 million, down 18.6%. Administration expenses increased by 0.6%, while acquisition costs fell by 25.7%. Higher commission payments due to increased business were more than offset by true-up effects.
Our cost-income ratio increased by 2.4 percentage points to 96.0% due to higher changes in reserves compared to the investment performance and premiums generated in the period.
Operating profit amounted to € 2,314 million in the first nine months of 2010, 5.1% higher than last year's result for the same period. The increase was mainly driven by profitable growth supported by recovered capital market conditions, together with fewer impairments. This was partly offset by lower fair value option result in France. In addition, this result reflects the sound underlying profitability of our Life/Health business. Line item movements were largely consistent with the developments in the third quarter.
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Statutory premiums2) | 12,553 | 10,788 | 42,033 | 35,567 |
| Ceded premiums written | (136) | (135) | (399) | (405) |
| Change in unearned premiums | (36) | (3) | (144) | (56) |
| Statutory premiums (net) | 12,381 | 10,650 | 41,490 | 35,106 |
| Deposits from insurance and investment contracts | (6,908) | (5,541) | (24,346) | (19,571) |
| Premiums earned (net) | 5,473 | 5,109 | 17,144 | 15,535 |
| Interest and similar income | 3,646 | 3,565 | 11,196 | 10,508 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
127 | 360 | 518 | 575 |
| Operating realized gains/losses (net) | 587 | 544 | 1,337 | 1,354 |
| Fee and commission income | 129 | 115 | 376 | 356 |
| Other income | 10 | 6 | 59 | 15 |
| Operating revenues | 9,972 | 9,699 | 30,630 | 28,343 |
| Claims and insurance benefits incurred (net) | (4,307) | (4,399) | (13,603) | (14,042) |
| Change in reserves for insurance and investment contracts (net) | (3,673) | (2,662) | (10,178) | (5,744) |
| Interest expenses | (10) | (24) | (64) | (95) |
| Loan loss provisions | 6 | (3) | 8 | (17) |
| Operating impairments of investments (net) | (95) | (232) | (318) | (1,575) |
| Investment expenses | (160) | (151) | (489) | (441) |
| Acquisition and administrative expenses (net) | (1,000) | (1,229) | (3,450) | (4,055) |
| Fee and commission expenses | (67) | (60) | (184) | (176) |
| Operating restructuring charges | — | — | (1) | 3 |
| Other expenses | (11) | — | (37) | — |
| Operating expenses | (9,317) | (8,760) | (28,316) | (26,142) |
| Operating profit | 655 | 939 | 2,314 | 2,201 |
| Cost-income ratio3) in % | 96.0 | 93.6 | 95.7 | 95.2 |
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
3) Represents deposits from insurance and investment contracts, claims and insurance benefits incurred (net), change in reserves for insurance and investment contracts (net) and acquisition and administrative expenses (net) divided by statutory premiums (net), interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), operating realized gains/losses (net), fee and commission income, other income, interest expenses, loan loss provisions, operating impairments of investments (net), investment expenses, fee and commission expenses, operating restructuring charges and other expenses.
| Statutory premiums2) | Premiums earned (net) | Operating profit (loss) | Cost-income ratio | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| internal3) | ||||||||||
| Three months ended September 30, |
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | % | % | |
| Germany Life | 3,471 | 3,327 | 3,471 | 3,327 | 2,540 | 2,284 | 254 | 176 | 95.2 | 96.5 |
| Germany Health4) | 808 | 798 | 808 | 798 | 804 | 795 | 30 | 37 | 97.0 | 96.4 |
| Switzerland | 225 | 210 | 198 | 210 | 108 | 101 | 17 | 19 | 94.4 | 92.9 |
| Austria | 87 | 82 | 87 | 82 | 62 | 59 | 6 | 9 | 95.5 | 92.1 |
| German Speaking Countries |
4,591 | 4,417 | 4,564 | 4,417 | 3,514 | 3,239 | 307 | 241 | 95.5 | 96.2 |
| Italy | 1,367 | 1,646 | 1,367 | 1,646 | 121 | 139 | 64 | 71 | 96.2 | 96.3 |
| France | 1,732 | 1,653 | 1,732 | 1,653 | 768 | 679 | 114 | 230 | 95.3 | 90.4 |
| Spain | 151 | 146 | 151 | 146 | 63 | 67 | 28 | 27 | 86.9 | 87.5 |
| South America | 14 | 11 | 12 | 11 | 11 | 10 | 3 | 1 | 86.0 | 90.7 |
| Netherlands | 73 | 79 | 73 | 79 | 33 | 36 | 11 | 13 | 88.4 | 87.5 |
| Turkey | 26 | 20 | 24 | 20 | 9 | 9 | 2 | 4 | 94.5 | 88.8 |
| Belgium/Luxembourg | 237 | 194 | 237 | 193 | 84 | 89 | 13 | 13 | 95.8 | 95.1 |
| Portugal | 47 | 39 | 47 | 39 | 21 | 20 | 6 | 4 | 89.8 | 89.4 |
| Greece | 26 | 24 | 26 | 24 | 14 | 15 | 3 | 2 | 85.6 | 90.9 |
| Africa | 8 | 10 | 8 | 10 | 7 | 4 | 1 | 1 | 90.1 | 93.5 |
| Europe incl. South America |
3,681 | 3,822 | 3,677 | 3,821 | 1,131 | 1,068 | 245 | 366 | 95.0 | 92.7 |
| United States | 2,234 | 1,242 | 2,020 | 1,242 | 149 | 149 | 45 | 281 | 98.3 | 84.4 |
| Mexico | 23 | 12 | 20 | 12 | 13 | 8 | 1 | 1 | 95.0 | 94.0 |
| NAFTA Markets | 2,257 | 1,254 | 2,040 | 1,254 | 162 | 157 | 46 | 282 | 98.3 | 84.6 |
| Reinsurance LH | 86 | 84 | 86 | 84 | 84 | 80 | 11 | 3 | 88.7 | 97.1 |
| Global Insurance Lines | ||||||||||
| & Anglo Markets | 86 | 84 | 86 | 84 | 84 | 80 | 11 | 3 | 88.7 | 97.1 |
| South Korea | 470 | 362 | 404 | 362 | 169 | 162 | 12 | 15 | 97.8 | 96.6 |
| Taiwan | 484 | 351 | 425 | 351 | 37 | 36 | 7 | 4 | 98.6 | 98.8 |
| Malaysia | 61 | 50 | 49 | 50 | 46 | 46 | 4 | 4 | 92.5 | 92.6 |
| Indonesia | 113 | 66 | 93 | 66 | 45 | 24 | 6 | 5 | 93.7 | 90.7 |
| Other | 553 | 157 | 462 | 157 | 143 | 110 | 1 | (11) | 100.1 | 105.5 |
| Asia-Pacific | 1,681 | 986 | 1,433 | 986 | 440 | 378 | 30 | 17 | 98.3 | 98.3 |
| Hungary | 24 | 25 | 25 | 25 | 15 | 16 | (2) | 5 | 105.7 | 83.8 |
| Slovakia | 58 | 60 | 58 | 60 | 36 | 40 | (8) | 8 | 112.1 | 88.8 |
| Czech Republic | 42 | 23 | 41 | 23 | 14 | 13 | 2 | 2 | 94.1 | 95.5 |
| Poland | 71 | 89 | 67 | 89 | 17 | 67 | 5 | 5 | 94.1 | 96.3 |
| Romania | 4 | 6 | 5 | 6 | 3 | 4 | 1 | 1 | 90.3 | 89.8 |
| Croatia | 11 | 10 | 11 | 10 | 10 | 10 | 2 | — | 92.4 | 95.4 |
| Bulgaria | 6 | 5 | 6 | 5 | 5 | 5 | 1 | 2 | 66.0 | 66.8 |
| Russia | 7 | 3 | 6 | 3 | 7 | 4 | (1) | (2) | 116.4 | 158.5 |
| Central and Eastern | ||||||||||
| Europe | 223 | 221 | 219 | 221 | 107 | 159 | — | 21 | 99.9 | 92.8 |
| Middle East and North | ||||||||||
| Africa | 37 | 26 | 32 | 26 | 33 | 26 | 4 | 3 | 90.3 | 87.5 |
| Global Life | 63 | 34 | 63 | 34 | 2 | 2 | (1) | 2 | 101.5 | 96.0 |
| Growth Markets | 2,004 | 1,267 | 1,747 | 1,267 | 582 | 565 | 33 | 43 | 98.5 | 97.0 |
| Consolidation5) | (66) | (56) | (64) | (55) | — | — | 13 | 4 | — | — |
| Total | 12,553 | 10,788 | 12,050 | 10,788 | 5,473 | 5,109 | 655 | 939 | 96.0 | 93.6 |
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
3) Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
4) Loss ratios were 75.8% and 73.9% for the three months ended September 30, 2010 and 2009, respectively, and 74.8% and 74.2% for the nine months ended September 30, 2010 and 2009, respectively.
5) Represents elimination of transactions between Allianz Group companies in different geographic regions.
| internal3) Nine months ended September 30, 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 € mn € mn € mn € mn € mn € mn € mn € mn % % Germany Life 11,375 10,242 11,375 10,242 8,017 6,899 764 526 95.4 96.3 Germany Health4) 2,409 2,381 2,409 2,381 2,406 2,379 124 83 96.1 97.2 Switzerland 1,264 1,163 1,199 1,163 454 457 56 57 96.2 95.7 Austria 298 331 298 331 218 210 24 19 94.0 95.1 German Speaking Countries 15,346 14,117 15,281 14,117 11,095 9,945 968 685 95.6 96.4 Italy 6,698 5,835 6,698 5,835 432 513 209 166 97.2 97.5 France 6,079 5,183 6,079 5,183 2,279 2,136 415 588 94.7 91.4 Spain 598 605 598 605 275 286 83 80 89.3 89.9 South America 38 31 31 31 29 26 7 6 87.5 86.0 Netherlands 235 272 235 272 98 117 37 28 87.6 91.5 Turkey 74 62 69 62 27 27 5 7 95.3 92.9 Belgium/Luxembourg 771 569 771 569 278 265 57 47 94.4 94.0 Portugal 128 109 128 109 61 60 15 13 89.4 89.0 Greece 86 84 86 84 48 48 5 3 93.1 95.6 Africa 26 30 26 30 18 15 1 3 97.6 92.0 Europe incl. South America 14,733 12,780 14,721 12,780 3,545 3,493 834 941 95.3 94.0 United States 5,938 5,002 5,747 5,002 467 455 311 459 95.9 93.0 Mexico 71 35 64 35 42 23 3 2 95.9 94.4 NAFTA Markets 6,009 5,037 5,811 5,037 509 478 314 461 95.9 93.1 Reinsurance LH 236 228 236 228 234 223 19 12 92.7 95.6 Global Insurance Lines & Anglo Markets 236 228 236 228 234 223 19 12 92.7 95.6 South Korea 1,413 1,000 1,208 1,000 534 473 69 50 95.9 95.8 Taiwan 1,550 1,070 1,440 1,070 120 77 42 10 97.4 99.1 Malaysia 171 129 149 129 137 117 10 9 93.9 93.4 Indonesia 298 147 246 147 119 62 30 13 89.8 90.1 Other 1,355 291 1,080 291 367 163 (22) (38) 101.7 112.2 Asia-Pacific 4,787 2,637 4,123 2,637 1,277 892 129 44 97.5 98.5 Hungary 155 70 150 70 47 48 6 13 96.2 84.5 Slovakia 182 189 182 189 126 125 8 25 96.0 88.5 Czech Republic 117 87 111 87 42 37 8 6 93.5 93.9 Poland 289 310 262 310 96 151 15 11 95.2 96.9 Romania 16 18 16 18 8 11 2 2 88.6 91.1 Croatia 34 32 33 32 32 30 4 2 91.3 94.0 17 18 17 17 16 5 4 76.8 79.4 Bulgaria 18 Russia 20 12 18 12 19 12 (3) (5) 115.3 136.2 Central and Eastern Europe 831 735 790 735 387 430 45 58 95.1 93.1 Middle East and North Africa 100 74 88 74 92 71 10 (6) 91.3 107.2 Global Life 180 126 180 126 5 3 (3) 2 101.9 98.8 Growth Markets 5,898 3,572 5,181 3,572 1,761 1,396 181 98 97.1 97.5 Consolidation5) (189) (167) (176) (167) — — (2) 4 — — Total 42,033 35,567 41,054 35,567 17,144 15,535 2,314 2,201 95.7 95.2 |
Statutory premiums2) | Premiums earned (net) | Operating profit (loss) | Cost-income ratio | |||
|---|---|---|---|---|---|---|---|
Total assets under management grew from € 1,202 billion to € 1,443 billion since December 31, 2009. Third-party assets under management accounted for € 1,131 billion of the total assets under management, while the remaining € 312 billion related to Allianz Group assets.
Growth in total assets under management in the first nine months of 2010 amounted to € 241 billion, of which € 100 billion came from third-party net inflows and € 8 billion came from Allianz Group net inflows. Fixed income business contributed net inflows of € 111 billion, while equity business saw net outflows of € 3 billion. Cumulative foreign currency translation effects accounted for € 40 billion, mainly due to the strengthening U.S. Dollar versus the Euro. Market-related appreciation of € 91 billion stemmed from both fixed income (up by € 83 billion) and equity (up by € 8 billion) assets.
In the following section we focus on the development of third-party assets under management.
Third-party assets under management by geographic region as of September 30, 2010 (December 31, 2009)1) in %
We continued to observe a positive shift in the proportion of third-party assets under management in the United States, supported by strong fixed income net inflows. Asia-Pacific also improved its share to 9.4% of the third-party assets under management.
The split between fixed income and equity third-party assets remained largely unchanged: fixed income assets grew to 87% (December 31, 2009: 85%) while equity assets decreased to 13% (December 31, 2009: 15%).
The proportion of third-party assets under management from institutional and retail clients remained largely unchanged compared to December 31, 2009, at 67% and 33%, respectively.
1) Based on the origination of assets.
2) Consists of third-party assets managed by other Allianz Group companies (approximately € 18 bn as of September 30, 2010 and € 24 bn as of December 31, 2009, respectively).
The overall investment performance of Allianz Global Investors' assets under management was outstanding with 87% outperforming their respective benchmarks (September 30, 2009: 77%). Fixed income assets recorded a distinctive outperformance of 91%, while equity assets' performance was stable with 61% outperforming their respective benchmarks.
Operating revenues amounted to € 1,256 million, an increase of € 357 million resulting mainly from a strong growth in assets under management and a shift to higher margin products. Excluding positive foreign currency effects of € 100 million, operating revenues increased by 28.8% on an internal basis.
Net fee and commission income increased by € 369 million to € 1,235 million. The growth was largely driven by a € 404 million increase in management and loading fees, partially offset by higher fee and commission expenses and lower performance fees.
Performance fees remained strong at € 73 million, despite a decrease of € 11 million.
Income from financial assets and liabilities carried at fair value through income (net) amounted to € 7 million. It was however below the prior period result of € 17 million due to lower seed money valuation gains and negative foreign currency translation effects from the U.S. Dollar cash reserves.
Operating revenues increased by € 1,165 million to € 3,560 million, including positive foreign currency translation effects of € 112 million.
1) AGI account-based, asset-weighted 3-year investment performance of third-party assets vs. benchmark including all equity and fixed income accounts managed by equity and fixed income managers of AGI. For some retail funds the net of fee performance is compared to the median performance of an appropriate peer group (Morningstar or Lipper; 1st and 2nd quartile mean out-performance). For all other retail funds and for all institutional accounts, performance is calculated gross of fees using closing prices (revaluated) where appropriate and compared to the benchmark of each individual fund or account. Other than under GIPS (Global Investment Performance Standards), the performance of closed funds/accounts is not included in the analysis. Also not included: in parts WRAP accounts and accounts of Joint-Venture GTJA China.
in € mn
We recorded operating profit of € 521 million due to strong growth in assets under management and superior performance. The overall increase was € 153 million or 41.6%.
In line with the exceptional performance (and high revenue growth), variable compensation and assets under management driven expenses increased. This expense increase was mainly from our fixed income business. Furthermore, our Asset Managers in the United States invested in the improvement of infrastructure and product initiatives. Thus, administrative expenses increased by € 204 million to € 735 million. Of this increase, € 55 million was from foreign currency effects.
Our cost-income ratio was 58.5%, 0.6 percentage points lower than the third quarter of 2009.
Operating profit amounted to € 1,503 million, an increase of € 678 million, supported by the strong growth in assets under management and the high level of performance fees. The developments in all other positions were consistent overall with the 2010 to 2009 third quarter comparison.
| Three months ended September 30, |
Nine months ended September 30, |
||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Management and loading fees | 1,403 | 999 | 3,935 | 2,821 | |
| Performance fees | 73 | 84 | 289 | 118 | |
| Other income | 47 | 11 | 110 | 33 | |
| Fee and commission income | 1,523 | 1,094 | 4,334 | 2,972 | |
| Commissions | (281) | (224) | (798) | (630) | |
| Other expenses | (7) | (4) | (16) | (15) | |
| Fee and commission expenses | (288) | (228) | (814) | (645) | |
| Net fee and commission income | 1,235 | 866 | 3,520 | 2,327 | |
| Net interest income1) | 10 | 12 | 18 | 22 | |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 17 | 8 | 33 | |
| Other income | 4 | 4 | 14 | 13 | |
| Operating revenues | 1,256 | 899 | 3,560 | 2,395 | |
| Administrative expenses (net), excluding acquisition-related expenses | (735) | (531) | (2,057) | (1,570) | |
| Operating expenses | (735) | (531) | (2,057) | (1,570) | |
| Operating profit | 521 | 368 | 1,503 | 825 | |
| Cost-income ratio2) in % | 58.5 | 59.1 | 57.8 | 65.6 |
1) Represents interest and similar income less interest expenses.
2) Represents operating expenses divided by operating revenues.
– Operating loss reduced by € 25 million to € 270 million, mainly driven by an improved foreign currency result.
| Holding & Treasury | Banking1) | Alternative Investments | Corporate and Other2) | |||||
|---|---|---|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Three months ended September 30, | ||||||||
| Interest and similar income | 45 | 54 | 173 | 174 | (5) | 2 | 212 | 229 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(18) | (35) | (1) | (3) | — | — | (20) | (38) |
| Fee and commission income | 45 | 50 | 111 | 103 | 30 | 38 | 186 | 190 |
| Other income | — | — | — | — | — | (2) | — | (2) |
| Operating revenues | 72 | 69 | 283 | 274 | 25 | 38 | 378 | 379 |
| Interest expenses, excluding interest expenses from external debt |
(93) | (103) | (86) | (100) | — | — | (178) | (202) |
| Loan loss provisions | — | — | (18) | (13) | — | — | (18) | (13) |
| Investment expenses | (23) | (23) | — | — | — | — | (23) | (21) |
| Administrative expenses (net), excluding acquisition-related expenses |
(144) | (137) | (151) | (143) | (34) | (47) | (329) | (328) |
| Fee and commission expenses | (49) | (58) | (51) | (55) | — | 3 | (99) | (110) |
| Other expenses | — | — | (1) | — | — | — | (1) | — |
| Operating expenses | (309) | (321) | (307) | (311) | (34) | (44) | (648) | (674) |
| Operating loss | (237) | (252) | (24) | (37) | (9) | (6) | (270) | (295) |
| Cost-income ratio3) in % | 104.1 | 120.2 |
1) Total revenues in the Corporate and Other segment refer to the total revenues of the Banking business only. For further information on the reconciliation of total revenues, please refer to page 41.
2) Including consolidation within the Corporate and Other segment as recorded in the segment information in note 3 of the condensed consolidated interim financial statements.
3) Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses, 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, fee and commission expenses.
| Holding & Treasury | Banking1) Alternative Investments Corporate and Other2) |
|||||||
|---|---|---|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Nine months ended September 30, | ||||||||
| Interest and similar income | 223 | 292 | 515 | 537 | 2 | — | 738 | 826 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(32) | (132) | (10) | 3 | (1) | (1) | (43) | (130) |
| Fee and commission income | 131 | 150 | 320 | 266 | 94 | 95 | 542 | 507 |
| Other income | — | — | — | — | 1 | 1 | — | 1 |
| Operating revenues | 322 | 310 | 825 | 806 | 96 | 95 | 1,237 | 1,204 |
| Interest expenses, excluding interest expenses from external debt |
(284) | (341) | (253) | (306) | — | — | (536) | (645) |
| Loan loss provisions | — | — | (41) | (30) | — | — | (41) | (30) |
| Investment expenses | (66) | (61) | — | — | (1) | — | (67) | (57) |
| Administrative expenses (net), excluding acquisition-related expenses |
(421) | (411) | (430) | (468) | (108) | (112) | (955) | (991) |
| Fee and commission expenses | (152) | (129) | (161) | (140) | — | (3) | (312) | (272) |
| Other expenses | — | — | (2) | (1) | — | — | (2) | (1) |
| Operating expenses | (923) | (942) | (887) | (945) | (109) | (115) | (1,913) | (1,996) |
| Operating loss | (601) | (632) | (62) | (139) | (13) | (20) | (676) | (792) |
| Cost-income ratio3) in % | 105.1 | 130.3 |
The operating loss for Holding & Treasury was € 237 million, down from a loss of € 252 million largely due to an improved foreign currency result.
Operating income from financial assets and liabilities carried at fair value (net) improved by € 17 million to € (18) million, largely due to a higher foreign currency result.
We recorded € 45 million in interest and similar income, a decrease of € 9 million. Still lower interest rates led to a € 10 million decrease in interest expenses, excluding interest expenses from external debt, to € 93 million.
Net fee and commission result was € (4) million compared to € (8) million in the third quarter of 2009, as the fee expenses from our internal IT service provider decreased.
The operating loss improved by € 31 million to € 601 million. The improvement stemmed from an improved foreign currency result, partially offset by lower net interest result and net fee and commission result.
1) Total revenues in the Corporate and Other segment refer to the total revenues of the Banking business only. For further information on the reconciliation of total revenues, please refer to page 41.
2) Including consolidation within the Corporate and Other segment as recorded in the segment information in note 3 of the condensed consolidated interim financial statements.
3) Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses, 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, fee and commission expenses.
We recorded operating revenues of € 283 million, an increase of € 9 million. Our Banking business in Germany contributed most to the increase, supported by the Allianz Bank operations, launched in June 2009. Lower fee and commission income in Italy partially offset this positive development.
The operating loss reduced by € 13 million to a loss of € 24 million. Net interest result accounted for € 13 million of the improvement, driven by lower interest expenses excluding interest expenses from external debt. A further € 12 million stemmed from the net fee and commission result. Higher administrative expenses partially offset these positive effects. The third quarter of 2009 included non-recurring Allianz Bank set-up costs of € 24 million. A difficult economic environment took its toll especially in Central and Eastern Europe and is reflected in our Banking results.
The operating loss more than halved to € 62 million, partly driven by € 118 million of non-recurring Allianz Bank set-up costs. The net fee and commission result and net interest result also developed positively. The overall loss was mainly driven by Central and Eastern Europe, and to some extent by Germany, France and Italy.
The operating loss increased from € 6 million to € 9 million. A reduction in administrative expenses could not compensate for the lower net fee and commission result and net interest result. The earnings of Alternative Investments derive from the alternative investments of Allianz SE and from the activities of the managers of Allianz Capital Partners and Allianz Real Estate.
The operating loss went down by € 7 million to € 13 million. Half of the change came from lower administrative expenses, while the net interest result and net fee and commission result also contributed to this positive development.
in € mn
As of September 30, 2010, shareholders' equity amounted to € 44,900 million, an increase of € 4,792 million compared to December 31, 2009. Net income attributable to shareholders and favorable foreign currency translation effects increased our equity by € 3,918 million and € 894 million respectively. Unrealized gains contributed a further € 1,774 million. In the second quarter of 2010, Allianz SE paid dividends of € 1,850 million for the fiscal year 2009, which reduced equity.
Allianz Group is a financial conglomerate within the scope of the Financial Conglomerates Directive and the related German law in force since January 1, 2005. Under this directive, a financial conglomerate is defined as any financial parent holding company that, together with its subsidiaries has significant cross-border and cross-sector activities. The law requires that a financial conglomerate calculates the capital needed to meet the respective solvency requirements on a consolidated basis.
Conglomerate solvency1)
As of September 30, 2010, our eligible capital for solvency purposes, required for our insurance segments and our banking and asset management business, was € 37.4 billion, including off-balance sheet reserves of € 1.9 billion, surpassing the minimum legally stipulated level by € 15.1 billion. This margin resulted in a cover ratio of 168% at September 30, 2010. Eligible capital at September 30, 2010 also includes a deduction for accrued dividends of € 1.6 billion for the first nine months of 2010, which represents 40% of net income attributable to shareholders. Our solvency position remains strong.
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. The solvency ratio excluding off-balance sheet reserves would be 159% (2009: 155%).
2) Does not include non-controlling interests of € 2,171 mn and € 2,121 mn as of September 30, 2010 and December 31, 2009, respectively. For further information, please refer to note 19 of the condensed consolidated interim financial statements.
3) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
4) Includes foreign currency translation effects.
In the following sections, we show the asset allocation for our insurance portfolio and analyze important developments within the balance sheets of our Property-Casualty, Life/Health, Asset Management and Corporate and Other segments.
As of September 30, 2010, total assets amounted to € 622.7 billion and total liabilities amounted to € 575.7 billion. When compared to the year-end 2009 total assets and total liabilities increased by € 39.0 billion and by € 34.2 billion, respectively.
Equity markets were volatile during the first nine months of 2010. The first quarter started on a positive note, followed by a downturn in the second quarter. After solid financial halfyear results of companies across all sectors, equity markets performed positively during the third quarter. Overall, we saw slightly positive and negative developments across the worldwide equity markets during the first nine months of 2010.
10-year interest rates of all major countries decreased during the first nine months of 2010. Overall interest rates in the third quarter 2010 were below third quarter levels in 2009.
In the third quarter 2009 credit spreads narrowed tremendously. This trend continued, but slowed down during the first half of 2010. During the third quarter of 2010 overall credit spreads narrowed slightly.
Allianz Group's asset portfolio mainly derives from our core business of insurance. The following asset allocation covers the insurance segments together with the Corporate and Other segment.
in %
Allianz Group's asset portfolio as of September 30, 2010: � 443.9 billion (as of December 31, 2009: � 408.7 billion)
The Group's investment portfolio grew by € 35.2 billion compared to the end of 2009 and by € 3.6 billion compared to the end of the second quarter of 2010. These increases were mainly driven by inflows provided by our underlying operating businesses, primarily from the Life/Health entities and supported by market developments.
During the first nine months of 2010, our gross exposure to equities increased from € 30.6 billion to € 31.1 billion driven by positive market developments, which were partially offset by divestments. During the first nine months, our equity gearing after policyholder participation and hedges – which is a ratio of our equity holdings allocated to the shareholder to shareholder's equity plus off-balance sheet reserves less goodwill – decreased slightly from 0.4 to 0.3.
1) Does not include our banking operations.
The vast majority of our investment portfolio comprises debt instruments. Our investments in this asset class rose from € 364.8 billion to € 399.7 billion during the first nine months of 2010, mainly driven by net inflows, especially from our Life business.
From our well-diversified exposure in this asset class, a share of more than 60% relates to governments and covered bonds. In line with our operating business profile 66% of our fixed income portfolio is invested in Eurozone bonds and loans. Similarly, approximately 94% is invested in investment-grade bonds and loans.
Of our government exposure 75% is located in the Eurozone, where some governments experienced the threat of a liquidity shortage in recent quarters. Combined support efforts by other E.U. members and the International Monetary Fund helped to ensure financial stability.
As of September 30, 2010 our sovereign bond exposure (market values) in Portugal, Ireland, Greece and Spain (PIGS) amounted to € 9.3 billion. This exposure varies due to portfolio optimization strategies. The current unrealized losses of the PIGS sovereign bond holding were € 0.6 billion as of September 30, 2010.
Nearly 60% of covered bonds are German Pfandbriefe backed by either public sector loans or mortgage loans. On these as well as on all other covered bond exposures, a cushion against house price deterioration and payment defaults is provided by minimum required security buffers and voluntary over-collateralization.
Our portfolio includes ABS securities of € 21.8 billion. Around 31% or € 6.7 billion of our ABS securities are made up of U.S. agency MBS which were backed by the U.S. government.
Our exposure in subordinated securities in banks amounted to € 11.2 billion. Our tier 1 share remains low at 0.5% of our total exposure to debt instruments.
Our exposure to real estate held for investment increased by 6.7% to € 8.0 billion.
| Three months ended September 30, | 2010 | 2009 |
|---|---|---|
| € mn | € mn | |
| Interest and similar income1) | 4,610 | 4,369 |
| Income from financial assets and liabilities | ||
| carried at fair value through income (net) | 150 | 500 |
| Realized gains/losses (net) | 990 | 891 |
| Impairments of investments (net) | (69) | (282) |
| Investment expenses | (177) | (195) |
| Net investment income | 5,504 | 5,283 |
In the third quarter of 2010, our total investment result (net) amounted to € 5,504 million, an increase of 4.2% compared to last year's third quarter. A higher asset base and lower impairments from equities were the main drivers for this development. In addition, we realized higher gains, especially from the sale of debt and real estate investments. The fair value option results and trading were lower due to a partial sale of the fair value option portfolio in the United States and lower fair value option result in France, but these effects did not outweigh the positive effects reported above.
Interest and similar income1) rose by € 241 million to € 4,610 million, mainly driven by higher income from debt securities. A higher level of debt investments, especially in the Life/Health segment more than compensated lower yields on debt securities in the third quarter of 2010.
Income from investments held on fair value option and trading (net) decreased from € 500 million to € 150 million.
Realized gains and losses (net) amounted to € 990 million and therefore were up by 11.1% compared to the third quarter of 2009. Lower realized gains from our equity investments (decreased by € 145 million to € 557 million) were more than offset by higher realizations from debt and real estate investments (increased by € 244 million to € 433 million). In addition, we sold another tranche of ICBC shares in the third quarter of 2010.
Impairments (net) decreased significantly compared to the respective previous year period and amounted to € 69 million. No major impairments were booked on equities as markets performed well. Whereas, in the third quarter of 2009, we booked total impairments of € 282 million.
1) Net of interest expenses (excluding interest expenses from external debt).
During the first nine months of 2010, our Property-Casualty asset base increased by € 4.1 billion to € 96.3 billion. This was primarily attributable to the development of our debt securities which rose by € 3.5 billion in total due to capital market developments, favorable foreign currency translation effects and net inflows. Equity investments increased by € 0.2 billion to € 5.2 billion. Our cash and cash pool assets were stable and amounted to € 4.3 billion.
fair values1)
| As of September 30, 2010 € bn |
As of December 31, 2009 € bn |
|
|---|---|---|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.2 | 0.2 |
| Debt securities | 1.5 | 1.7 |
| Other2) | 0.1 | 0.1 |
| Subtotal | 1.8 | 2.0 |
| Investments3) | ||
| Equities | 5.2 | 5.0 |
| Debt securities | 61.5 | 58.0 |
| Cash and cash pool assets4) | 4.3 | 4.4 |
| Other | 6.7 | 6.5 |
| Subtotal | 77.7 | 73.9 |
| Loans and advances to banks and | ||
| customers | 16.8 | 16.3 |
| Property-Casualty asset base | 96.3 | 92.2 |
Of our Property-Casualty asset base, asset-backed securities (ABS) made up € 4.9 billion as of September 30, 2010, which is approximately 5.1% of our asset base. CDOs accounted for only € 47 million of this amount.
in € bn
B
Loss and loss adjustment expenses paid in current year relating to prior years A
Loss and loss adjustment expenses incurred in prior years
Foreign currency translation adjustments and other changes, changes in C
the consolidated subsidiaries of the Allianz Group and reclassifications
Reserves for loss and loss adjustment expenses in current year D
As of September 30, 2010, the segment's gross reserves for loss and loss adjustment expenses increased by 3.1% to € 57.4 billion. On a net basis, reserves were up 4.1% to € 50.5 billion. Foreign currency translation effects and other changes accounted for a € 1.0 billion increase.
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 upon, among other factors, our ownership percentage.
2) Comprises assets of € 0.2 bn and € 0.2 bn and liabilities of € (0.1) and € (0.1) bn as of September 30, 2010 and December 31, 2009 respectively.
3) Does not include affiliates of € 10.9 bn and € 10.9 bn as of September 30, 2010 and December 31, 2009, respectively.
4) Including cash and cash equivalents as stated in our segment balance sheet of € 2.3 bn and € 2.3 bn and receivables from cash pooling amounting to € 2.2 bn and € 2.1 bn net of liabilities from securities lending and derivatives of € (0.2) bn and € 0 bn as of September 30, 2010 and December 31, 2009, respectively.
5) After group consolidation. For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty segment, please refer to note 14 of the condensed consolidated interim financial statements.
In the first nine months of 2010, the Life/Health asset base increased by 8.8% to € 414.6 billion. Of this total, € 61.7 billion were financial assets for unit-linked contracts, which contributed € 4.7 billion to the overall increase. Without unit-linked contracts we recorded a significant increase in debt investments from € 182.5 billion to € 214.6 billion. This development was driven by strong net inflows from our Life insurance business, which was supported by credit spread narrowing, resulting in an increase in the value of our corporate bonds. Our equity investments increased by € 1.4 billion to € 22.3 billion. Cash and cash pool assets were down by € 2.3 billion to € 3.7 billion.
In conjunction with the change in accounting policy, the Allianz Group also sold a portfolio of financial assets which were designated at fair value through income which was previously held to mitigate interest rate volatility of the embedded derivatives. As of December 31, 2009 , the portfolio had a fair value of approximately € 3.6 billion. The portfolio was reduced to approximately € 0.5 billion as of September 30, 2010.
| As of September 30, 2010 € bn |
As of December 31, 2009 € bn |
|
|---|---|---|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 2.6 | 2.8 |
| Debt securities | 4.0 | 7.3 |
| Other1) 2) | (2.8) | (3.5) |
| Subtotal | 3.8 | 6.6 |
| Investments3) | ||
| Equities | 22.3 | 20.9 |
| Debt securities | 214.6 | 182.5 |
| Cash and cash pool assets4) | 3.7 | 6.0 |
| Other | 8.5 | 7.9 |
| Subtotal | 249.1 | 217.3 |
| Loans and advances to banks and customers |
100.0 | 100.3 |
| Financial assets for unit-linked contracts5) |
61.7 | 57.0 |
| Life/Health asset base | 414.6 | 381.2 |
Within our Life/Health asset base, ABS amounted to € 16.4 billion as of September 30, 2010, which is less than 4% of total Life/Health assets. Of these, € 1.0 billion are CDOs.
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
2) Comprises assets of € 1.7 bn and € 1.2 bn and liabilities of € (4.5) bn and € (4.7) bn as of September 30, 2010 and December 31, 2009 respectively.
3) Do not include affiliates of € 1.6 bn and € 1.8 bn as of September 30, 2010 and December 31, 2009, respectively.
4) Including cash and cash equivalents as stated in our segment balance sheet of € 3.2 bn and € 2.5 bn and receivables from cash pooling amounting to € 1.6 bn and € 3.5 bn net of liabilities from securities lending and derivatives of € (1.1) bn and € 0 bn as of September 30, 2010 and December 31, 2009, respectively.
5) Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policyholders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet corresponds to the value of financial liabilities for unit-linked contracts.
in € bn
Change in unit-linked investment contracts B
Foreign currency translation adjustments C
Financial assets for unit-linked contracts grew by € 4.7 billion to € 61.7 billion. Unit-linked insurance contracts increased by € 3.8 billion due to fund performance and premium inflows exceeding outflows by € 3.5 billion. Unitlinked investment contracts decreased by € 0.2 billion, mainly driven by bancassurance business in our Italian business operations. Currency effects mainly stemmed from the stronger U.S. Dollar (€ 0.5 billion) and Asian currencies (€ 0.5 billion) versus the Euro.
in € bn
Change in aggregate policy reserves A
Change in reserves for premium refunds B
Foreign currency translation adjustments C
Life/Health reserves for insurance and investment contracts increased by € 24.9 billion or 8% in the first nine months of 2010. € 14.7 billion of the increase was driven by higher aggregate policy reserves; the main contributors were our operations in Germany (€ 6.2 billion), Italy (€ 2.4 billion), the United States (€ 2.7 billion excluding currency effects) and France (€ 1.4 billion). Reserves for premium refund were up by € 5.9 billion due to recovering capital markets. Significant currency effects resulted mainly from the stronger U.S. Dollar (€ 2.2 billion), Asian currencies (€ 1.0 billion) and the Swiss Franc (€ 0.8 billion) versus the Euro.
1) Figures prior to third quarter of 2010 have been restated to reflect a change in Allianz Group's accounting policy. For further information please refer to note 2 of our condensed consolidated interim financial statements.
Our Asset Management segment's results of operations stem primarily from its management of third-party assets.1) In this section we refer only to our own assets.
Our own Asset Management segment's asset base, without third-party assets (as third-party assets are not shown on the Asset Management segment's balance sheet), increased in the first nine months of 2010 by € 0.7 billion to € 3.7 billion.
Liabilities in our Asset Management segment amounted to € 4.5 billion (up by 6.0%), mainly driven by higher liabilities to banks and customers.
Our asset base for Corporate and Other was down by 5.7% in the first nine months of 2010 to € 38.1 billion. The biggest movement was within loans and advances to banks and customers, down by € 4.5 billion to € 16.2 billion due to repayments of loans and a decrease in reverse repos. In addition, our equity investments declined by € 1.2 billion mainly due to disposals of ICBC shares. Investments in debt securities increased by € 3.1 billion due to a shift within our portfolio.
| As of September 30, 2010 € bn |
As of December 31, 2009 € bn |
|
|---|---|---|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.0 | 0.0 |
| Debt securities | 0.4 | 0.1 |
| Other2) | (0.1) | 0.0 |
| Subtotal | 0.3 | 0.1 |
| Investments3) | ||
| Equities | 3.6 | 4.8 |
| Debt securities | 16.4 | 13.3 |
| Cash and cash pool assets4) | 1.4 | 1.3 |
| Other | 0.2 | 0.2 |
| Subtotal | 21.6 | 19.6 |
| Loans and advances to banks and | ||
| customers | 16.2 | 20.7 |
| Corporate and Other asset base | 38.1 | 40.4 |
ABS in our Corporate and Other asset base, amounted to € 0.5 billion as of September 30, 2010, which is around 1.2% of our Corporate and Other asset base.
Our liabilities to banks and customers amounted to € 19.9 billion after € 21.2 billion at year-end 2009. This development was mainly due to a decrease in liabilities from term deposits.
Other liabilities decreased by € 1.9 billion to € 14.2 billion.
The increase within the certificated liabilities from € 14.1 billion to € 14.9 billion was mainly driven by an increase of Allianz SE's outstanding issued debt5) in this investment category of € 0.8 billion.
2) Comprises assets of € 0.4 bn and € 0.5 bn and liabilities of € (0.5) bn and € (0.5) bn as of September 30, 2010 and December 31, 2009 respectively.
3) Do not include affiliates of € 68.3 bn and € 67.5 bn as of September 30, 2010 and December 31, 2009, respectively.
4) Including cash and cash equivalents as stated in our segment balance sheet of € 1.1 bn and € 1.1 bn and receivables from cash pooling amounting to € 0.3 bn and € 0.2 bn net of liabilities from securities lending and derivatives of € 0 bn and € 0 bn as of September 30, 2010 and December 31, 2009, respectively.
1) For further information on the development of these third-party assets, please refer to page 24.
5) For further information on Allianz SE debt as of September 30, 2010, please refer to notes 17 and 18 of our financial statements.
| Interest expense in |
Interest expense in |
||||
|---|---|---|---|---|---|
| 3Q 2010 | 3Q 2010 | ||||
| 1. Senior bonds2) | 7.25% bond | ||||
| 5.625% bond | issued by Allianz Finance II B. V., Amsterdam | ||||
| issued by Allianz Finance II B.V., Amsterdam | Volume | USD 0.5 bn | |||
| Volume | € 0.9 bn | Year of issue | 2002 | ||
| Year of issue | 2002 | Maturity date | Perpetual Bond | ||
| Maturity date | 11/29/2012 | ISIN | XS 015 915 072 0 | ||
| ISIN | XS 015 879 238 1 | Interest expense | € 6.9 mn | ||
| Interest expense | € 12.6 mn | ||||
| 5.5% bond | |||||
| 5.0% bond | issued by Allianz SE | ||||
| issued by Allianz Finance II B.V., Amsterdam | Volume | € 1.5 bn | |||
| Volume | € 1.5 bn | Year of issue | 2004 | ||
| Year of issue | 2008 | Maturity date | Perpetual Bond | ||
| Maturity date | 03/06/2013 | ISIN | XS 018 716 232 5 | ||
| ISIN | DE 000 A0T R7K 7 | Interest expense | € 21.3 mn | ||
| Interest expense | € 19.3 mn | ||||
| 4.375% bond | |||||
| 4.0% bond | issued by Allianz Finance II B. V., Amsterdam | ||||
| issued by Allianz Finance II B.V., Amsterdam | Volume | € 1.4 bn | |||
| Volume | € 1.5 bn | Year of issue | 2005 | ||
| Year of issue | 2006 | Maturity date | Perpetual Bond | ||
| Maturity date | 11/23/2016 | ISIN | XS 021 163 783 9 | ||
| ISIN | XS 027 588 026 7 | Interest expense | € 15.9 mn | ||
| Interest expense | € 15.6 mn | ||||
| 5.375% bond | |||||
| 4.75% bond | issued by Allianz Finance II B. V., Amsterdam | ||||
| issued by Allianz Finance II B.V., Amsterdam | Volume | € 0.8 bn | |||
| Volume | € 1.5 bn | Year of issue | 2006 | ||
| Year of issue | 2009 | Maturity date | Perpetual Bond | ||
| Maturity date | 7/22/2019 | ISIN | DE 000 A0G NPZ 3 | ||
| ISIN | DE 000 A1A KHB 8 | Interest expense | € 11.7 mn | ||
| Interest expense | € 18.1 mn | ||||
| Total interest expense for senior bonds | € 65.6 mn | 8.375% bond | |||
| issued by Allianz SE | |||||
| 2. Subordinated bonds3) | Volume | USD 2.0 bn | |||
| 6.125% bond | Year of issue | 2008 | |||
| issued by Allianz Finance II B. V., Amsterdam | Maturity date | Perpetual Bond | |||
| Volume | € 2.0 bn | ISIN | US 018 805 200 7 | ||
| Year of issue | 2002 | Interest expense | € 34.2 mn | ||
| Maturity date | 5/31/2022 | Total interest expense for subordinated | |||
| ISIN | XS 014 888 756 4 | bonds | € 133.9 mn | ||
| Interest expense | € 27.2 mn | ||||
| Total interest expense | € 199.5 mn | ||||
| 6.5% bond | 1) For further information on Allianz SE debt as of September 30, 2010, please refer to | ||||
| issued by Allianz Finance II B. V., Amsterdam | notes 17 and 18 of our financial statements. | ||||
| Volume | € 1.0 bn | 2) Senior bonds and commercial papers provide for early termination rights in case of | |||
| Year of issue | 2002 | non-payment of amounts due under the bond (interest and principal) as well as in case of insolvency of the relevant issuer or, if applicable, the relevant guarantor (Allianz SE). |
|||
| Maturity date | 1/13/2025 | The same applies to two subordinated bonds issued in 2002. | |||
| ISIN | XS 015 952 750 5 | 3) The terms of the subordinated bonds (except for the two subordinated bonds men | |||
| Interest expense | € 16.7 mn | tioned in footnote 2 above) do not explicitly provide for early termination rights in favor of the bond holder. 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 consolidated financial statements and should be read in conjunction with them. In addition to our stated figures in accordance with the International Financial Reporting Standards (IFRS), Allianz Group uses operating profit and internal growth to enhance understanding of our results. These additional values should be viewed as complementary to, and not a substitute for, our figures determined in accordance with IFRS.
The Allianz Group uses operating profit to evaluate the performance of its business segments and the 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 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, we exclude the following non-operating effects:
restructuring charges, because the timing of these restructuring charges is largely at our discretion, and their exclusion provides additional insight into the operating trends of the underlying business. This differentiation is not made if the profit sources are shared with policyholders;
interest expenses from external debt, as these relate to our capital structure;
1) For further information please refer to note 3 of our condensed consolidated interim financial statements.
The definitions for non-operating income from financial assets and liabilities held for trading (net), realized capital gains and losses (net) and impairments of investments (net) state the general treatment in the segments. However, there are special cases which are different from this general treatment:
In certain cases the policyholders participate in the tax benefits of the Allianz Group. IFRS requires that the consolidated income statements present all tax benefits in the income tax line item, even though these belong to policyholders. In the segment reporting, the tax benefits are reclassified and shown within operating profit in order to properly reflect the policyholder participation in tax benefits.
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Operating profit | 2,055 | 2,009 | 6,089 | 5,084 |
| Non-operating realized gains/losses (net) and impairments of investments (net) | 350 | 276 | 1,055 | 593 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(27) | 112 | (129) | 150 |
| Income from fully consolidated private equity investments (net) | (48) | (34) | (100) | (191) |
| Interest expenses from external debt | (225) | (228) | (667) | (680) |
| Non-operating restructuring charges | (11) | (60) | (100) | (137) |
| Acquisition-related expenses | (80) | (112) | (388) | (166) |
| Amortization of intangible assets | (78) | (37) | (112) | (52) |
| Reclassification of tax benefits | (4) | (9) | (20) | (35) |
| Income from continuing operations before income taxes | 1,932 | 1,917 | 5,628 | 4,566 |
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).
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Property-Casualty | ||||
| Gross premiums written | 10,600 | 10,232 | 34,545 | 33,640 |
| Life/Health | ||||
| Statutory premiums | 12,553 | 10,788 | 42,033 | 35,567 |
| Asset Management | ||||
| Operating revenues | 1,256 | 899 | 3,560 | 2,395 |
| consisting of: | ||||
| Net fee and commission income | 1,235 | 866 | 3,520 | 2,327 |
| Net interest income | 10 | 12 | 18 | 22 |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 17 | 8 | 33 |
| Other income | 4 | 4 | 14 | 13 |
| Corporate and Other | ||||
| Total revenues | 146 | 119 | 412 | 360 |
| consisting of: | ||||
| Interest and similar income | 173 | 174 | 515 | 537 |
| Income from financial assets and liabilities carried at fair value through income (net) | (1) | (3) | (10) | 3 |
| Fee and commission income | 111 | 103 | 320 | 266 |
| Interest expenses, excluding interest expenses from external debt | (86) | (100) | (253) | (306) |
| Fee and commission expenses | (51) | (55) | (161) | (140) |
| Consolidation effects (Banking within Corporate and Other) | — | — | 1 | — |
| Consolidation | (33) | (33) | (72) | (67) |
| Allianz Group | 24,522 | 22,005 | 80,478 | 71,895 |
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 excluded. Accordingly, in addition to presenting "nominal growth", we also present "internal growth", which excludes these effects.
| Three months ended September 30, | Nine months ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | (1.1) | — | 4.7 | 3.6 | (0.4) | — | 3.1 | 2.7 |
| Life/Health | 11.7 | — | 4.7 | 16.4 | 15.4 | 0.5 | 2.3 | 18.2 |
| Asset Management | 28.8 | (0.2) | 11.1 | 39.7 | 44.0 | 0.1 | 4.5 | 48.6 |
| Corporate and Other | 22.7 | — | — | 22.7 | 14.7 | — | (0.3) | 14.4 |
| Allianz Group | 6.5 | — | 4.9 | 11.4 | 9.0 | 0.3 | 2.6 | 11.9 |
| Note | As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | 7,287 | 6,089 | |
| Financial assets carried at fair value through income | 4 | 11,357 | 14,321 |
| Investments | 5 | 334,163 | 294,252 |
| Loans and advances to banks and customers | 6 | 124,605 | 128,996 |
| Financial assets for unit-linked contracts | 61,748 | 56,963 | |
| Reinsurance assets | 7 | 13,631 | 13,559 |
| Deferred acquisition costs | 8 | 19,593 | 20,295 |
| Deferred tax assets | 2,376 | 2,719 | |
| Other assets | 9 | 33,693 | 33,047 |
| Non-current assets and assets of disposal groups classified as held for sale | 10 | 745 | — |
| Intangible assets | 11 | 13,534 | 13,476 |
| Total assets | 622,732 | 583,717 |
| Note | As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|---|
| LIABILITIES AND EQUITY | |||
| Financial liabilities carried at fair value through income | 12 | 4,707 | 4,891 |
| Liabilities to banks and customers | 13 | 21,160 | 21,248 |
| Unearned premiums | 17,917 | 15,676 | |
| Reserves for loss and loss adjustment expenses | 14 | 66,184 | 64,441 |
| Reserves for insurance and investment contracts | 15 | 348,819 | 323,801 |
| Financial liabilities for unit-linked contracts | 61,748 | 56,963 | |
| Deferred tax liabilities | 4,934 | 3,874 | |
| Other liabilities | 16 | 31,871 | 33,285 |
| Liabilities of disposal groups classified as held for sale | 10 | 633 | — |
| Certificated liabilities | 17 | 8,755 | 7,962 |
| Participation certificates and subordinated liabilities | 18 | 8,933 | 9,347 |
| Total liabilities | 575,661 | 541,488 | |
| Shareholders' equity | 44,900 | 40,108 | |
| Non-controlling interests | 2,171 | 2,121 | |
| Total equity | 19 | 47,071 | 42,229 |
| Total liabilities and equity | 622,732 | 583,717 |
| 2010 2009 2010 2009 Note € mn € mn € mn € mn Premiums written 16,244 15,467 52,221 49,593 Ceded premiums written (1,319) (1,491) (3,997) (4,085) Change in unearned premiums 817 885 (1,709) (1,524) Premiums earned (net) 20 15,742 14,861 46,515 43,984 Interest and similar income 21 4,731 4,506 14,479 13,720 Income from financial assets and liabilities carried at fair value through income (net) 22 150 500 381 755 Realized gains/losses (net) 23 990 891 2,696 2,928 Fee and commission income 24 1,961 1,533 5,671 4,295 Other income 25 22 8 87 27 Income from fully consolidated private equity investments 26 447 522 1,213 1,480 Total income 24,043 22,821 71,042 67,189 Claims and insurance benefits incurred (gross) (12,046) (11,937) (35,666) (35,808) Claims and insurance benefits incurred (ceded) 693 692 1,550 1,679 Claims and insurance benefits incurred (net) 27 (11,353) (11,245) (34,116) (34,129) Change in reserves for insurance and investment contracts (net) 28 (3,867) (2,776) (10,610) (6,123) Interest expenses 29 (346) (365) (1,056) (1,120) Loan loss provisions 30 (12) (18) (33) (57) Impairments of investments (net) 31 (69) (282) (537) (2,587) Investment expenses 32 (177) (195) (569) (548) Acquisition and administrative expenses (net) 33 (5,057) (4,808) (15,061) (14,595) Fee and commission expenses 34 (636) (562) (1,864) (1,605) Amortization of intangible assets (78) (37) (112) (52) Restructuring charges (11) (60) (101) (134) Other expenses (10) — (42) (2) Expenses from fully consolidated private equity investments 26 (495) (556) (1,313) (1,671) Total expenses (22,111) (20,904) (65,414) (62,623) Income from continuing operations before income taxes 1,932 1,917 5,628 4,566 Income taxes 35 (664) (527) (1,600) (949) Net income from continuing operations 1,268 1,390 4,028 3,617 Net income (loss) from discontinued operations, net of income taxes 36 — — — (395) Net income 1,268 1,390 4,028 3,222 Net income attributable to: Non-controlling interests 4 16 110 34 Shareholders 1,264 1,374 3,918 3,188 |
Three months ended September 30, | Nine months ended September 30, | ||
|---|---|---|---|---|
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| Note | 2010 € |
2009 € |
2010 € |
2009 € |
|
| Basic earnings per share | 37 | 2.80 | 3.06 | 8.68 | 7.07 |
| from continuing operations | 2.80 | 3.06 | 8.68 | 7.94 | |
| from discontinued operations | — | — | — | (0.87) | |
| Diluted earnings per share | 37 | 2.78 | 3.05 | 8.62 | 7.05 |
| from continuing operations | 2.78 | 3.05 | 8.62 | 7.92 | |
| from discontinued operations | — | — | — | (0.87) |
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Net income | 1,268 | 1,390 | 4,028 | 3,222 | |
| Other comprehensive income | |||||
| Foreign currency translation adjustments | |||||
| Reclassifications to net income | — | (6) | 2 | 516 | |
| Changes arising during the period | (1,473) | (403) | 926 | (471) | |
| Subtotal | (1,473) | (409) | 928 | 45 | |
| Available-for-sale investments | |||||
| Reclassifications to net income | (338) | (339) | (1,156) | (919) | |
| Changes arising during the period | 1,634 | 4,163 | 2,965 | 5,037 | |
| Subtotal | 1,296 | 3,824 | 1,809 | 4,118 | |
| Cash flow hedges | |||||
| Reclassifications to net income | — | — | (1) | (4) | |
| Changes arising during the period | 33 | 6 | 15 | (19) | |
| Subtotal | 33 | 6 | 14 | (23) | |
| Share of other comprehensive income of associates | |||||
| Reclassifications to net income | (2) | 1 | (2) | 6 | |
| Changes arising during the period | (7) | (8) | 25 | 23 | |
| Subtotal | (9) | (7) | 23 | 29 | |
| Miscellaneous | |||||
| Reclassifications to net income | — | — | — | — | |
| Changes arising during the period | (27) | (7) | 7 | (70) | |
| Subtotal | (27) | (7) | 7 | (70) | |
| Total other comprehensive income | (180) | 3,407 | 2,781 | 4,099 | |
| Total comprehensive income | 1,088 | 4,797 | 6,809 | 7,321 | |
| Total comprehensive income attributable to: | |||||
| Non-controlling interests | (19) | 29 | 187 | 65 | |
| Shareholders | 1,107 | 4,768 | 6,622 | 7,256 |
For further details concerning income taxes relating to components of other comprehensive income, please see note 35.
| Paid-in capital |
Revenue reserves |
Foreign currency translation adjustments |
Unrealized gains and losses (net) |
Shareholders' equity |
Non controlling interests |
Total equity | |
|---|---|---|---|---|---|---|---|
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | |
| Balance as of January 1, 2009, as previously reported |
28,569 | 7,110 | (4,006) | 2,011 | 33,684 | 3,564 | 37,248 |
| Adjustments (see note 2) | — | 43 | (7) | — | 36 | — | 36 |
| Balance as of January 1, 2009, as reported | 28,569 | 7,153 | (4,013) | 2,011 | 33,720 | 3,564 | 37,284 |
| Total comprehensive income | — | 3,149 | 53 | 4,054 | 7,256 | 65 | 7,321 |
| Paid-in capital | — | — | — | — | — | — | — |
| Treasury shares | — | (47) | — | — | (47) | — | (47) |
| Transactions between equity holders1) | — | 6 | — | — | 6 | (1,431) | (1,425) |
| Dividends paid | — | (1,580) | — | — | (1,580) | (113) | (1,693) |
| Balance as of September 30, 2009 | 28,569 | 8,681 | (3,960) | 6,065 | 39,355 | 2,085 | 41,440 |
| Balance as of January 1, 2010 as previously reported |
28,635 | 9,689 | (3,615) | 5,457 | 40,166 | 2,121 | 42,287 |
| Adjustments (see note 2) | — | (47) | (11) | — | (58) | — | (58) |
| Balance as of January 1, 2010 as reported | 28,635 | 9,642 | (3,626) | 5,457 | 40,108 | 2,121 | 42,229 |
| Total comprehensive income | — | 3,954 | 894 | 1,774 | 6,622 | 187 | 6,809 |
| Paid-in capital | — | — | — | — | — | — | — |
| Treasury shares | — | 4 | — | — | 4 | — | 4 |
| Transactions between equity holders | — | 26 | (10) | — | 16 | (15) | 1 |
| Dividends paid | — | (1,850) | — | — | (1,850) | (122) | (1,972) |
| Balance as of September 30, 2010 | 28,635 | 11,776 | (2,742) | 7,231 | 44,900 | 2,171 | 47,071 |
1) Includes € (1,738) mn changes in non-controlling interests from the derecognition of Dresdner Bank and € 307 mn related to capital movements of subsidiaries in whom the Allianz Group owns less than 100%.
| Nine months ended September 30, | 2010 | 2009 |
|---|---|---|
| € mn | € mn | |
| Summary | ||
| Net cash flow provided by operating activities | 12,665 | 9,041 |
| Net cash flow used in investing activities | (14,109) | (43,261) |
| Net cash flow provided by financing activities | 2,466 | 1,231 |
| Effect of exchange rate changes on cash and cash equivalents | 176 | (26) |
| Change in cash and cash equivalents | 1,198 | (33,015) |
| Cash and cash equivalents at beginning of period of continuing operations | 6,089 | 8,958 |
| Cash and cash equivalents at beginning of period reclassified to assets of disposal groups classified as held for sale | — | 30,238 |
| Cash and cash equivalents at end of period | 7,287 | 6,181 |
| Cash flow from operating activities | ||
| Net income | 4,028 | 3,222 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (134) | (59) |
| 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 | (2,159) | (341) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | (515) | (1,027) |
| Depreciation and amortization | 803 | 408 |
| Loan loss provisions | 33 | 57 |
| Interest credited to policyholder accounts | 3,212 | 2,596 |
| Net change in: | ||
| Financial assets and liabilities held for trading | (1,612) | (235) |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | (468) | (362) |
| Repurchase agreements and collateral received from securities lending transactions | 1,137 | (316) |
| Reinsurance assets | 439 | 519 |
| Deferred acquisition costs | (899) | (59) |
| Unearned premiums | 1,880 | 1,872 |
| Reserves for loss and loss adjustment expenses | 510 | (75) |
| Reserves for insurance and investment contracts | 7,770 | 2,820 |
| Deferred tax assets/liabilities | 282 | (204) |
| Other (net) | (1,642) | 225 |
| Subtotal | 8,637 | 5,819 |
| Net cash flow provided by operating activities | 12,665 | 9,041 |
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 10,996 | 2,557 |
| Available-for-sale investments | 83,442 | 74,165 |
| Held-to-maturity investments | 160 | 211 |
| Investments in associates and joint ventures | 607 | 1,691 |
| Non-current assets and assets of disposal groups classified as held for sale | — | — |
| Real estate held for investment | 400 | 114 |
| Loans and advances to banks and customers (purchased loans) | 5,964 | 7,440 |
| Property and equipment | 290 | 115 |
| Subtotal | 101,859 | 86,293 |
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
|---|---|---|
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (6,669) | (1,149) |
| Available-for-sale investments | (106,479) | (84,760) |
| Held-to-maturity investments | (397) | (137) |
| Investments in associates and joint ventures | (254) | (1,393) |
| Non-current assets and assets of disposal groups classified as held for sale | — | (36) |
| Real estate held for investment | (705) | (89) |
| Loans and advances to banks and customers (purchased loans) | (4,856) | (17,307) |
| Property and equipment | (1,003) | (426) |
| Subtotal | (120,363) | (105,297) |
| Business combinations | ||
| Proceeds from sale of subsidiaries, net of cash disposed | — | (26,975) |
| Acquisitions of subsidiaries, net of cash acquired | — | 77 |
| Change in other loans and advances to banks and customers (originated loans) | 4,454 | 2,070 |
| Other (net) | (59) | 571 |
| Net cash flow used in investing activities | (14,109) | (43,261) |
| Cash flow from financing activities | ||
| Policyholders' account deposits | 15,223 | 14,860 |
| Policyholders' account withdrawals | (9,465) | (9,089) |
| Net change in liabilities to banks and customers | (1,340) | (1,574) |
| Proceeds from the issuance of certificated liabilities, participation certificates and subordinated liabilities | 5,830 | 11,093 |
| Repayments of certificated liabilities, participation certificates and subordinated liabilities | (5,594) | (12,379) |
| Cash inflow from capital increases | — | — |
| Transactions between equity holders | 1 | 272 |
| Dividends paid to shareholders | (1,972) | (1,693) |
| Net cash from sale or purchase of treasury shares | 6 | (116) |
| Other (net) | (223) | (143) |
| Net cash flow provided by financing activities | 2,466 | 1,231 |
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 section 315a of the German Commercial Code (HGB). IFRS comprise International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and interpretations developed by the International Financial Reporting Interpretations Committee (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 and endorsed by the E.U., that are compulsory as of January 1, 2010, or adopted early. 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 consistent with the accounting policies that have been applied in the preparation of the consolidated financial statements for the year ended December 31, 2009. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Allianz Group Annual Report 2009.
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, the provisions embodied under accounting principles generally accepted in the United States of America (US GAAP) have been applied to those aspects where specific guidance is not provided by IFRS 4, Insurance Contracts.
The condensed consolidated interim financial statements are presented in millions of Euro (€ mn), unless otherwise stated.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on November 9, 2010.
IFRS 3, Business Combinations – revised and IAS 27, Consolidated and Separate Financial Statements – amended In January 2008, the IASB issued a revised version of IFRS 3, Business Combinations, and an amended version of IAS 27, Consolidated and Separate Financial Statements. The revised version of IFRS 3 contains the following major changes:
The amended version of IAS 27 includes the following changes:
The revised IFRS 3 applies prospectively for financial years beginning on or after July 1, 2009. The carrying amounts of any assets and liabilities that arose under business combinations prior to the application of the revised IFRS 3 are not adjusted. The amendments to IAS 27 need to be applied retrospectively with certain exceptions. Both standards have to be applied together. The Allianz Group adopted the revised IFRS 3 and the amended IAS 27 as of January 1, 2010. The adoption did not have a material impact on the condensed consolidated interim financial statements for the three and nine months ended September 30, 2010.
In addition to the above mentioned recently adopted accounting pronouncements, the following amendments and revisions to standards and the following interpretation have been adopted by the Allianz Group as of January 1, 2010:
The Allianz Group adopted the revisions, amendments and interpretation as of January 1, 2010, with no material impact on its financial result or financial position.
Reclassification of foreign currency gains and losses Until the third quarter of 2009, the Allianz Group reported foreign currency gains and losses arising from foreign currency transactions within "Investment expenses". With year-end reporting 2009, the Allianz Group voluntarily changed its accounting policy with regard to the presentation of foreign currency gains and losses. Those are now reported within "Income from financial assets and liabilities carried at fair value through income (net)". The Allianz Group believes that this presentation is more relevant and gives a clearer picture of investment expenses by excluding the distorting effects arising from foreign currency fluctuations. In addition, the Allianz Group is hedged substantially against foreign currency fluctuations with freestanding derivatives. Therefore, the recognition of foreign currency fluctuations within the line item "Income from financial assets and liabilities carried at fair value through income (net)" better reflects the results of the Allianz Group.
The change in accounting policy is applied retrospectively and results in changes in the presentation as described in the tables on pages 54 and 55. There is no impact on recognition, initial or subsequent measurement, net income or operating profit arising from this reclassification of foreign currency gains and losses.
Until the third quarter of 2009, non-controlling interests (minority interests) were not included in "Net income" but were shown separately in the line item "Non-controlling interests (Minority interests in earnings)". Non-controlling interests were significantly larger in prior years. With yearend reporting 2009, the Allianz Group now includes all interests in "Net income". The allocation attributable to shareholders and attributable to non-controlling interests is presented just below "Net income". The change in presentation is applied retrospectively and results in changes in presentation as described in the tables on pages 54 and 55. There is no impact on recognition, initial or subsequent measurement or operating profit arising from this change in presentation.
Future policy benefits of the fixed-indexed annuity business implicitly include a series of annual market value liability options (MVLO) that are accounted for as derivatives at fair value. These embedded derivatives have been separated from the related policy reserves and presented within financial liabilities carried at fair value through income in our consolidated balance sheet. Historically, once the annual index option was credited to the policyholder's account, this benefit continued to be classified as a derivative at fair value. As such, the MVLO would continually grow over time.
Effective July 1, 2010, the Allianz Group voluntarily changed its accounting policy with regard to the valuation of the MVLO. Specifically, the fixed benefit accruing to the policyholder's account balance is reclassified back to policyholder reserves upon crediting. In addition, the fair value of the MVLO has been refined to incorporate a discount rate that is more consistent with the returns on the assets used to fund these derivative liabilities.
The effects of these changes are that the portion of the policyholder's account balance representing a credited amount will no longer be accounted for at fair value and the ongoing valuation of the MVLO will better reflect the indexed returns being offered to policyholders. The Allianz Group believes these changes mitigate artificial accounting volatility and better reflect the economics of the fixed-annuity business; consequently resulting in the presentation of more relevant and reliable financial information.
The voluntary change in accounting policy is applied retrospectively and results in changes in the presentation as described in the tables below.
In conjunction with the change in accounting policy, the Allianz Group also sold a portfolio of financial assets which were designated at fair value through income which was previously held to mitigate interest rate volatility of the embedded derivatives. As of December 31, 2009, the portfolio had a fair value of approximately € 3.6 bn. The portfolio was reduced to approximately € 0.5 bn as of September 30, 2010.
Certain prior period amounts have been reclassified to conform to the current period presentation.
The following table summarizes the impact on the consolidated balance sheet as of December 31, 2009, relating to the change in accounting policy for fixed-indexed annuities.
| As of December 31, 2009 | As previously reported |
Change in accounting policy for fixed-indexed annuities |
As reported |
|---|---|---|---|
| € mn | € mn | € mn | |
| ASSETS | |||
| Cash and cash equivalents | 6,089 | — | 6,089 |
| Financial assets carried at fair value through income | 14,321 | — | 14,321 |
| Investments | 294,252 | — | 294,252 |
| Loans and advances to banks and customers | 128,996 | — | 128,996 |
| Financial assets for unit-linked contracts | 56,963 | — | 56,963 |
| Reinsurance assets | 13,559 | — | 13,559 |
| Deferred acquisition costs | 20,623 | (328) | 20,295 |
| Deferred tax assets | 2,719 | — | 2,719 |
| Other assets | 33,047 | — | 33,047 |
| Non-current assets and assets of disposal groups classified as held for sale | — | — | — |
| Intangible assets | 13,476 | — | 13,476 |
| Total assets | 584,045 | (328) | 583,717 |
| As of December 31, 2009 | As previously reported € mn |
Change in accounting policy for fixed-indexed annuities € mn |
As reported € mn |
|---|---|---|---|
| LIABILITIES AND EQUITY | |||
| Financial liabilities carried at fair value through income | 6,743 | (1,852) | 4,891 |
| Liabilities to banks and customers | 21,248 | — | 21,248 |
| Unearned premiums | 15,676 | — | 15,676 |
| Reserves for loss and loss adjustment expenses | 64,441 | — | 64,441 |
| Reserves for insurance and investment contracts | 322,188 | 1,613 | 323,801 |
| Financial liabilities for unit-linked contracts | 56,963 | — | 56,963 |
| Deferred tax liabilities | 3,905 | (31) | 3,874 |
| Other liabilities | 33,285 | — | 33,285 |
| Liabilities of disposal groups classified as held for sale | — | — | — |
| Certificated liabilities | 7,962 | — | 7,962 |
| Participation certificates and subordinated liabilities | 9,347 | — | 9,347 |
| Total liabilities | 541,758 | (270) | 541,488 |
| Shareholders' equity | 40,166 | (58) | 40,108 |
| Non-controlling interests | 2,121 | — | 2,121 |
| Total equity | 42,287 | (58) | 42,229 |
| Total liabilities and equity | 584,045 | (328) | 583,717 |
The following tables summarize the impacts on the consolidated income statements for the three and nine months ended September 30, 2009, relating to the reclassification of foreign currency gains and losses, the change in accounting policy for fixed-indexed annuitites and the change in presentation of net income:
| Three months ended September 30, | 2009 | |||
|---|---|---|---|---|
| As previously reported |
Reclassification of foreign currency gains and losses |
Change in accounting policy for fixed-indexed annuities |
As reported | |
| € mn | € mn | € mn | € mn | |
| Premiums written | 15,479 | — | (12) | 15,467 |
| Ceded premiums written | (1,491) | — | — | (1,491) |
| Change in unearned premiums | 885 | — | — | 885 |
| Premiums earned (net) | 14,873 | — | (12) | 14,861 |
| Interest and similar income | 4,506 | — | — | 4,506 |
| Income from financial assets and liabilities carried at fair value through income (net) | 354 | (175) | 321 | 500 |
| Realized gains/losses (net) | 891 | — | — | 891 |
| Fee and commission income | 1,533 | — | — | 1,533 |
| Other income | 8 | — | — | 8 |
| Income from fully consolidated private equity investments | 522 | — | — | 522 |
| Total income | 22,687 | (175) | 309 | 22,821 |
| Claims and insurance benefits incurred (gross) | (11,937) | — | — | (11,937) |
| Claims and insurance benefits incurred (ceded) | 692 | — | — | 692 |
| Claims and insurance benefits incurred (net) | (11,245) | — | — | (11,245) |
| Change in reserves for insurance and investment contracts (net) | (2,648) | — | (128) | (2,776) |
| Interest expenses | (365) | — | — | (365) |
| Loan loss provisions | (18) | — | — | (18) |
| Impairments of investments (net) | (282) | — | — | (282) |
| Investment expenses | (370) | 175 | — | (195) |
| Acquisition and administrative expenses (net) | (4,707) | — | (101) | (4,808) |
| Fee and commission expenses | (562) | — | — | (562) |
| Amortization of intangible assets | (37) | — | — | (37) |
| Restructuring charges | (60) | — | — | (60) |
| Other expenses | — | — | — | — |
| Expenses from fully consolidated private equity investments | (556) | — | — | (556) |
| Total expenses | (20,850) | 175 | (229) | (20,904) |
| Income from continuing operations before income taxes | 1,837 | — | 80 | 1,917 |
| Income taxes | (498) | — | (29) | (527) |
| Net income from continuing operations | 1,339 | — | 51 | 1,390 |
| Net income (loss) from discontinued operations, net of income taxes | — | — | — | — |
| Net income | 1,339 | — | 51 | 1,390 |
| Net income attributable to: | ||||
| Non-controlling interests | 16 | |||
| Shareholders | 1,374 |
| Nine months ended September 30, | 2009 | |||
|---|---|---|---|---|
| As previously reported |
Reclassification of foreign currency gains and losses |
Change in accounting policy for fixed-indexed annuities |
As reported | |
| € mn | € mn | € mn | € mn | |
| Premiums written | 49,639 | — | (46) | 49,593 |
| Ceded premiums written | (4,085) | — | — | (4,085) |
| Change in unearned premiums | (1,524) | — | — | (1,524) |
| Premiums earned (net) | 44,030 | — | (46) | 43,984 |
| Interest and similar income | 13,720 | — | — | 13,720 |
| Income from financial assets and liabilities carried at fair value through income (net) | 911 | (189) | 33 | 755 |
| Realized gains/losses (net) | 2,928 | — | — | 2,928 |
| Fee and commission income | 4,295 | — | — | 4,295 |
| Other income | 27 | — | — | 27 |
| Income from fully consolidated private equity investments | 1,480 | — | — | 1,480 |
| Total income | 67,391 | (189) | (13) | 67,189 |
| Claims and insurance benefits incurred (gross) | (35,808) | — | — | (35,808) |
| Claims and insurance benefits incurred (ceded) | 1,679 | — | — | 1,679 |
| Claims and insurance benefits incurred (net) | (34,129) | — | — | (34,129) |
| Change in reserves for insurance and investment contracts (net) | (5,953) | — | (170) | (6,123) |
| Interest expenses | (1,120) | — | — | (1,120) |
| Loan loss provisions | (57) | — | — | (57) |
| Impairments of investments (net) | (2,587) | — | — | (2,587) |
| Investment expenses | (737) | 189 | — | (548) |
| Acquisition and administrative expenses (net) | (14,728) | — | 133 | (14,595) |
| Fee and commission expenses | (1,605) | — | — | (1,605) |
| Amortization of intangible assets | (52) | — | — | (52) |
| Restructuring charges | (134) | — | — | (134) |
| Other expenses | (2) | — | — | (2) |
| Expenses from fully consolidated private equity investments | (1,671) | — | — | (1,671) |
| Total expenses | (62,775) | 189 | (37) | (62,623) |
| Income from continuing operations before income taxes | 4,616 | — | (50) | 4,566 |
| Income taxes | (966) | — | 17 | (949) |
| Net income from continuing operations | 3,650 | — | (33) | 3,617 |
| Net income (loss) from discontinued operations, net of income taxes | (395) | — | — | (395) |
| Net income | 3,255 | — | (33) | 3,222 |
| Net income attributable to: | ||||
| Non-controlling interests | 34 | |||
| Shareholders | 3,188 |
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 between Property-Casualty and Life/Health categories. In accordance with the responsibilities of the Board of Management, the insurance categories are grouped into the following reportable segments:
Property-Casualty
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 sum, the Allianz Group has identified 15 reportable segments in accordance with IFRS 8, Operating Segments.
The types of products and services from which reportable segments derive revenue are listed 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 individual and group basis, including annuity,
endowment and term insurance, unit-linked and investment-oriented products as well as full private health and supplemental health and 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 control, communication, legal, human resources and technology functions.
The reportable segment Banking consists of the banking activities in Germany, France, Italy and Central and Eastern Europe. The banks offer a wide range of products for corporate and retail clients with the main 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 Allianz Group. The Alternative Investments reportable segment also includes certain fully consolidated private equity investments.
Prices for transactions between reportable segments are set on an arm's length basis in a manner similar to transactions with third parties. Transactions between reportable segments are eliminated in the consolidation. For the reportable segment Asset Management interest revenues are reported net of interest expenses.
The Allianz Group uses operating profit to evaluate the performance of its reportable segments and the 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 excludes the following non-operating effects:
The definitions for non-operating income from financial assets and liabilities held for trading (net), realized gains/ losses (net) and impairments of investments (net) state the general treatment in the segments. However, there are special cases which are different from this general treatment:
In certain cases the policyholders participate in the tax benefits of the Allianz Group. IFRS requires that the consolidated income statements present all tax benefits in the income tax line item, even though these belong to policyholders. In the segment reporting, the tax benefits are reclassified and shown within operating profit in order to properly reflect the policyholder participation in tax benefits.
Operating profit should be viewed as complementary to, and not a substitute for, income from continuing operations before income taxes or net income as determined in accordance with IFRS.
At the beginning of 2010, the Allianz Group reorganized the structure of its insurance activities to reflect the changes in the responsibilities of the Board of Management. European insurance operations are shown together while Global Insurance Lines & Anglo Markets are shown separately from NAFTA Markets, respectively for both Property-Casualty and Life/Health insurance activities. Furthermore, Assistance (Mondial) now comprises a separate reportable segment within Property-Casualty insurance activities. Previously reported information has been restated to reflect this change in the composition of the Allianz Group's reportable segments.
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
| ASSETS | ||||
| Cash and cash equivalents | 2,330 | 2,281 | 3,169 | 2,478 |
| Financial assets carried at fair value through income | 1,853 | 2,100 | 8,264 | 11,269 |
| Investments | 84,289 | 80,401 | 247,017 | 213,036 |
| Loans and advances to banks and customers | 16,852 | 16,325 | 99,969 | 100,316 |
| Financial assets for unit-linked contracts | — | — | 61,748 | 56,963 |
| Reinsurance assets | 8,901 | 8,885 | 4,742 | 4,691 |
| Deferred acquisition costs | 4,097 | 3,789 | 15,349 | 16,357 |
| Deferred tax assets | 977 | 1,329 | 192 | 316 |
| Other assets | 20,794 | 19,980 | 14,672 | 16,024 |
| Non-current assets and assets from disposal groups classified as held for sale 1) | 444 | — | 303 | — |
| Intangible assets | 2,437 | 2,361 | 2,340 | 2,306 |
| Total assets | 142,974 | 137,451 | 457,765 | 423,756 |
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
| LIABILITIES AND EQUITY | ||||
| Financial liabilities carried at fair value through income | 81 | 68 | 4,512 | 4,689 |
| Liabilities to banks and customers | 1,037 | 426 | 1,583 | 861 |
| Unearned premiums | 15,636 | 13,471 | 2,281 | 2,210 |
| Reserves for loss and loss adjustment expenses | 57,406 | 55,715 | 8,789 | 8,738 |
| Reserves for insurance and investment contracts | 9,423 | 9,159 | 339,492 | 314,631 |
| Financial liabilities for unit-linked contracts | — | — | 61,748 | 56,963 |
| Deferred tax liabilities | 2,672 | 2,656 | 2,266 | 1,286 |
| Other liabilities | 14,985 | 15,642 | 13,732 | 14,131 |
| Liabilities from disposal groups classified as held for sale 2) | 355 | — | 279 | — |
| Certificated liabilities | 26 | 139 | 2 | 2 |
| Participation certificates and subordinated liabilities | 398 | 846 | 65 | 65 |
| Total liabilities | 102,019 | 98,122 | 434,749 | 403,576 |
1) Comprise the assets from the disposal groups Alba Allgemeine Versicherungs-Gesellschaft AG, Basel, and Phenix Compagnie d'assurances SA, Lausanne, in Property-Casualty and Phenix Compagnie d'assurances sur la vie SA, Lausanne, in Life/Health. See note 10 for further information.
2) Comprise the liabilities from the disposal groups Alba Allgemeine Versicherungs-Gesellschaft AG, Basel, and Phenix Compagnie d'assurances SA, Lausanne, in Property-Casualty and Phenix Compagnie d'assurances sur la vie SA, Lausanne, in Life/Health. See note 10 for further information.
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| As of | As of | As of | As of | As of | As of | As of | As of |
| December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, |
| 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | |
| 6,089 | 7,287 | (460) | (502) | 1,089 | 1,100 | 701 | 1,190 |
| 14,321 | 11,357 | (400) | (393) | 621 | 861 | 731 | 772 |
| 294,252 | 334,163 | (86,020) | (86,955) | 85,732 | 88,540 | 1,103 | 1,272 |
| 128,996 | 124,605 | (8,666) | (8,769) | 20,745 | 16,185 | 276 | 368 |
| 56,963 | 61,748 | — | — | — | — | — | — |
| 13,559 | 13,631 | (17) | (12) | — | — | — | — |
| 20,295 | 19,593 | — | — | — | — | 149 | 147 |
| 2,719 | 2,376 | (367) | (370) | 1,272 | 1,304 | 169 | 273 |
| 33,047 | 33,693 | (12,363) | (10,261) | 5,636 | 4,989 | 3,770 | 3,499 |
| 745 | — | (2) | — | — | — | — | |
| 13,476 | 13,534 | — | — | 1,908 | 1,735 | 6,901 | 7,022 |
| 583,717 | 622,732 | (108,293) | (107,264) | 117,003 | 114,714 | 13,800 | 14,543 |
| Consolidation | Corporate and Other | Group | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of September 30, 2010 |
December 31, | As of 2009 |
As of September 30, 2010 |
As of December 31, 2009 |
September 30, | As of 2010 |
As of December 31, 2009 |
||||||||||||||
| € mn | € mn | € mn | € mn | € mn | € mn | ||||||||||||||||
| 510 | 534 | (396) | (400) | 4,707 | 4,891 | ||||||||||||||||
| 19,920 | 21,236 | (2,331) | (2,014) | 21,160 | 21,248 | ||||||||||||||||
| — | — | — | (5) | 17,917 | 15,676 | ||||||||||||||||
| — | — | (11) | (12) | 66,184 | 64,441 | ||||||||||||||||
| 55 | 161 | (151) | (150) | 348,819 | 323,801 | ||||||||||||||||
| — | — | — | — | 61,748 | 56,963 | ||||||||||||||||
| 279 | 206 | (370) | (367) | 4,934 | 3,874 | ||||||||||||||||
| 14,218 | 16,108 | (14,508) | (15,992) | 31,871 | 33,285 | ||||||||||||||||
| — | — | (1) | — | 633 | |||||||||||||||||
| 14,927 | 14,134 | (6,200) | (6,313) | 8,755 | 7,962 | ||||||||||||||||
| 8,713 | 8,679 | (257) | (257) | 8,933 | 9,347 | ||||||||||||||||
| 58,622 | 61,058 | (24,225) | (25,510) | 575,661 | 541,488 | ||||||||||||||||
| Total equity | 47,071 | 42,229 | |||||||||||||||||||
| Total liabilities and equity | 622,732 | 583,717 |
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| Three months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
| Total revenues1) | 10,600 | 10,232 | 12,553 | 10,788 |
| Premiums earned (net) | 10,269 | 9,752 | 5,473 | 5,109 |
| Operating investment result | ||||
| Interest and similar income | 917 | 865 | 3,646 | 3,565 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
30 | 33 | 127 | 360 |
| Operating realized gains/losses (net) | 19 | 35 | 587 | 544 |
| Interest expenses, excluding interest expenses from external debt | (30) | (20) | (10) | (24) |
| Operating impairments of investments (net) | (2) | (4) | (95) | (232) |
| Investment expenses | (60) | (67) | (160) | (151) |
| Subtotal | 874 | 842 | 4,095 | 4,062 |
| Fee and commission income | 263 | 245 | 129 | 115 |
| Other income | 8 | 5 | 10 | 6 |
| Claims and insurance benefits incurred (net) | (7,046) | (6,846) | (4,307) | (4,399) |
| Change in reserves for insurance and investment contracts (net) | (71) | (130) | (3,673) | (2,662) |
| Loan loss provisions | — | (2) | 6 | (3) |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses |
(2,921) | (2,606) | (1,000) | (1,229) |
| Fee and commission expenses | (251) | (229) | (67) | (60) |
| Operating restructuring charges | — | — | — | — |
| Other expenses | (3) | — | (11) | — |
| Reclassification of tax benefits | — | — | — | — |
| Operating profit (loss) | 1,122 | 1,031 | 655 | 939 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities | ||||
| carried at fair value through income (net) | (19) | 3 | (12) | (14) |
| Non-operating realized gains/losses (net) | 169 | 117 | 12 | 40 |
| Non-operating impairments of investments (net) | (21) | (44) | (2) | (3) |
| Subtotal | 129 | 76 | (2) | 23 |
| Income from fully consolidated private equity investments (net) | — | (1) | — | (9) |
| Interest expenses from external debt | — | — | — | — |
| Acquisition-related expenses | — | — | — | — |
| Amortization of intangible assets | (4) | (8) | (2) | (1) |
| Non-operating restructuring charges | (12) | (24) | — | (1) |
| Reclassification of tax benefits | — | — | — | — |
| Non-operating items | 113 | 43 | (4) | 12 |
| Income (loss) from continuing operations before income taxes | 1,235 | 1,074 | 651 | 951 |
| Income taxes | (363) | (293) | (206) | (290) |
| Net income (loss) from continuing operations | 872 | 781 | 445 | 661 |
| Net income (loss) from discontinued operations, net of income taxes | — | — | — | — |
| Net income (loss) | 872 | 781 | 445 | 661 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 51 | 17 | 9 | 9 |
| Shareholders | 821 | 764 | 436 | 652 |
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).
| Asset Management | |
|---|---|
| 2010 2009 € mn € mn |
|
| 1,256 899 |
|
| — — |
|
| 13 13 |
|
| 7 17 |
|
| — — |
|
| (3) (1) |
|
| — — |
|
| — — |
|
| 17 29 |
|
| 1,523 1,094 |
|
| 4 4 |
|
| — — |
|
| — — |
|
| — — |
|
| (735) (531) |
|
| (288) (228) |
|
| — — |
|
| — — |
|
| — — |
|
| 521 368 |
|
| — — |
|
| 32 — |
|
| (1) — |
|
| 31 — |
|
| — — |
|
| — — |
|
| (80) (108) |
|
| (7) (22) |
|
| (4) (18) |
|
| — — |
|
| (60) (148) |
|
| 461 220 |
|
| (180) (74) |
|
| 281 146 |
|
| — — |
|
| 281 146 |
|
| 2 1 |
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
| Total revenues1) | 34,545 | 33,640 | 42,033 | 35,567 |
| Premiums earned (net) | 29,371 | 28,449 | 17,144 | 15,535 |
| Operating investment result Interest and similar income |
2,756 | 2,730 | 11,196 | 10,508 |
| Operating income from financial assets and liabilities | ||||
| carried at fair value through income (net) | 18 | 81 | 518 | 575 |
| Operating realized gains/losses (net) | 31 | 51 | 1,337 | 1,354 |
| Interest expenses, excluding interest expenses from external debt | (74) | (80) | (64) | (95) |
| Operating impairments of investments (net) | (8) | (70) | (318) | (1,575) |
| Investment expenses | (169) | (183) | (489) | (441) |
| Subtotal | 2,554 | 2,529 | 12,180 | 10,326 |
| Fee and commission income | 799 | 787 | 376 | 356 |
| Other income | 16 | 13 | 59 | 15 |
| Claims and insurance benefits incurred (net) | (20,513) | (20,087) | (13,603) | (14,042) |
| Change in reserves for insurance and investment contracts (net) | (244) | (255) | (10,178) | (5,744) |
| Loan loss provisions | — | (10) | 8 | (17) |
| Acquisition and administrative expenses (net), | ||||
| excluding acquisition-related expenses | (8,242) | (7,838) | (3,450) | (4,055) |
| Fee and commission expenses | (752) | (692) | (184) | (176) |
| Operating restructuring charges | — | — | (1) | 3 |
| Other expenses | (8) | (1) | (37) | — |
| Reclassification of tax benefits | — | — | — | — |
| Operating profit (loss) | 2,981 | 2,895 | 2,314 | 2,201 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(38) | (56) | (24) | (6) |
| Non-operating realized gains/losses (net) | 463 | 663 | 43 | 55 |
| Non-operating impairments of investments (net) | (105) | (494) | (10) | (71) |
| Subtotal | 320 | 113 | 9 | (22) |
| Income from fully consolidated private equity investments (net) | — | — | — | — |
| Interest expenses from external debt | — | — | — | — |
| Acquisition-related expenses | — | — | — | — |
| Amortization of intangible assets | (11) | (15) | (3) | (2) |
| Non-operating restructuring charges | (54) | (52) | (22) | (10) |
| Reclassification of tax benefits | — | — | — | — |
| Non-operating items | 255 | 46 | (16) | (34) |
| Income (loss) from continuing operations before income taxes | 3,236 | 2,941 | 2,298 | 2,167 |
| Income taxes | (936) | (959) | (717) | (585) |
| Net income (loss) from continuing operations | 2,300 | 1,982 | 1,581 | 1,582 |
| Net income (loss) from discontinued operations, net of income taxes | — | — | — | — |
| Net income (loss) | 2,300 | 1,982 | 1,581 | 1,582 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 133 | 38 | 49 | 32 |
| Shareholders | 2,167 | 1,944 | 1,532 | 1,550 |
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).
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn |
| 3,560 | 2,395 | 412 | 360 | (72) | (67) | 80,478 | 71,895 |
| — | — | — | — | — | — | 46,515 | 43,984 |
| 38 | 40 | 738 | 826 | (249) | (384) | 14,479 | 13,720 |
| 8 | 33 | (43) | (130) | 9 | 46 | 510 | |
| — | — | — | — | 2 | (12) | 1,370 | 1,393 |
| (20) | (18) | (536) | (645) | 305 | 398 | (389) | (440) |
| — | — | — | — | 60 | — | (266) | (1,645) |
| — | — | (67) | (57) | 156 | 133 | (569) | (548) |
| 26 | 55 | 92 | (6) | 283 | 181 | 15,135 | 13,085 |
| 4,334 | 2,972 | 542 | 507 | (380) | (327) | 5,671 | |
| 14 | 13 | — | 1 | (2) | (15) | 87 | |
| — | — | — | — | — | — | (34,116) | (34,129) |
| — | — | — | — | (188) | (124) | (10,610) | |
| — | — | (41) | (30) | — | — | (33) | |
| (2,057) | (1,570) | (955) | (991) | 31 | 25 | (14,673) | |
| (814) | (645) | (312) | (272) | 198 | 180 | (1,864) | |
| — | — | — | — | — | — | (1) | |
| — | — | (2) | (1) | 5 | — | (42) | |
| — | — | — | — | 20 | 35 | 20 | |
| 1,503 | 825 | (676) | (792) | (33) | (45) | 6,089 | |
| — | — | (61) | 249 | (6) | (37) | (129) | |
| 33 (1) |
3 (6) |
722 (155) |
840 (371) |
65 — |
(26) — |
1,326 (271) |
|
| 32 | (3) | 506 | 718 | 59 | (63) | 926 | |
| — | — | (209) | (283) | 109 | 92 | (100) | |
| — | — | (667) | (680) | — | — | (667) | |
| (390) | (163) | 2 | (3) | — | — | (388) | |
| (22) | (22) | (136) | (13) | 60 | — | (112) | |
| (15) | (57) | (9) | (18) | — | — | (100) | |
| — | — | — | — | (20) | (35) | (20) | |
| (395) | (245) | (513) | (279) | 208 | (6) | (461) | |
| 1,108 | 580 | (1,189) | (1,071) | 175 | (51) | 5,628 | |
| (454) | (231) | 488 | 791 | 19 | 35 | (1,600) | |
| 654 | 349 | (701) | (280) | 194 | (16) | 4,028 | |
| — | — | — | (395) | — | — | — | |
| 654 | 349 | (701) | (675) | 194 | (16) | 4,028 | |
| (1) | 3 | (71) | (39) | — | — | 110 | |
| 655 | 346 | (630) | (636) | 194 | (16) | 3,918 |
| German Speaking Countries | Europe incl. South America1) | NAFTA Markets | ||||
|---|---|---|---|---|---|---|
| Three months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
| Gross premiums written | 2,326 | 2,343 | 2,930 | 2,896 | 1,438 | 1,452 |
| Ceded premiums written | (428) | (466) | (308) | (323) | (501) | (487) |
| Change in unearned premiums | 457 | 444 | 335 | 338 | (32) | (22) |
| Premiums earned (net) | 2,355 | 2,321 | 2,957 | 2,911 | 905 | 943 |
| Interest and similar income | 291 | 281 | 249 | 239 | 89 | 87 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
29 | 8 | 34 | 54 | 1 | 1 |
| Operating realized gains/losses (net) | 19 | 35 | — | — | — | — |
| Fee and commission income | 25 | 39 | 6 | 12 | — | — |
| Other income | 4 | 2 | — | 3 | — | — |
| Operating revenues | 2,723 | 2,686 | 3,246 | 3,219 | 995 | 1,031 |
| Claims and insurance benefits incurred (net) | (1,785) | (1,684) | (2,120) | (2,115) | (634) | (695) |
| Change in reserves for insurance and investment | ||||||
| contracts (net) | (75) | (111) | (2) | (1) | (1) | — |
| Interest expenses | (26) | (17) | (10) | (17) | — | — |
| Loan loss provisions | — | (2) | — | — | — | — |
| Operating impairments of investments (net) | (2) | (4) | — | — | — | — |
| Investment expenses | (22) | (25) | (26) | (21) | (1) | (2) |
| Acquisition and administrative expenses (net) | (620) | (623) | (759) | (737) | (246) | (199) |
| Fee and commission expenses | (23) | (35) | (8) | (10) | — | — |
| Other expenses | (2) | — | — | — | — | — |
| Operating expenses | (2,555) | (2,501) | (2,925) | (2,901) | (882) | (896) |
| Operating profit (loss) | 168 | 185 | 321 | 318 | 113 | 135 |
| Loss ratio3) in % | 75.8 | 72.6 | 71.7 | 72.7 | 70.0 | 73.7 |
| Expense ratio4) in % | 26.3 | 26.8 | 25.7 | 25.3 | 27.2 | 21.1 |
| Combined ratio5) in % | 102.1 | 99.4 | 97.4 | 98.0 | 97.2 | 94.8 |
1) Corporate customer business in Spain transferred to AGCS in 2010. Prior year balances have not been adjusted.
2) From 2010 on Allianz Fire and Marine Insurance Japan Ltd. is shown within AGCS. Prior year balances have not been adjusted.
3) Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4) Represents acquisition and administrative expenses (net) divided by premiums earned (net).
5) Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
| Global Insurance Lines & Anglo Markets1)2) |
Growth Markets2) | Assistance (Mondial) | Consolidation | Property-Casualty | |||||
|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn |
| 3,627 | 3,279 | 772 | 774 | 404 | 349 | (897) | (861) | 10,600 | 10,232 |
| (690) | (779) | (151) | (176) | (3) | (3) | 897 | 866 | (1,184) | (1,368) |
| 61 | 106 | 7 | 3 | 25 | 19 | — | — | 853 | 888 |
| 2,998 | 2,606 | 628 | 601 | 426 | 365 | — | 5 | 10,269 | 9,752 |
| 261 | 226 | 39 | 43 | 9 | 7 | (21) | (18) | 917 | 865 |
| (33) | (28) | (2) | (1) | — | — | 1 | (1) | 30 | 33 |
| — | — | — | — | — | — | — | — | 19 | 35 |
| 144 | 132 | 16 | 13 | 90 | 80 | (18) | (31) | 263 | 245 |
| 3 | — | 1 | — | — | — | — | — | 8 | 5 |
| 3,373 | 2,936 | 682 | 656 | 525 | 452 | (38) | (45) | 11,506 | 10,935 |
| (1,826) | (1,766) | (419) | (376) | (255) | (204) | (7) | (6) | (7,046) | (6,846) |
| 7 | (16) | — | (3) | — | 1 | — | — | (71) | (130) |
| (13) | (6) | (2) | (1) | (1) | — | 22 | 21 | (30) | (20) |
| — | — | — | — | — | — | — | — | — | (2) |
| — | — | — | — | — | — | — | — | (2) | (4) |
| (8) (884) |
(13) (694) |
(3) (258) |
(4) (203) |
— (154) |
(1) (134) |
— — |
(1) (16) |
(60) (2,921) |
(67) |
| (129) | (113) | (18) | (19) | (88) | (82) | 15 | 30 | (251) | (2,606) (229) |
| — | — | (1) | — | — | — | — | — | (3) | — |
| (2,853) | (2,608) | (701) | (606) | (498) | (420) | 30 | 28 | (10,384) | (9,904) |
| 520 | 328 | (19) | 50 | 27 | 32 | (8) | (17) | 1,122 | 1,031 |
| 60.9 | 67.8 | 66.7 | 62.6 | 59.8 | 55.9 | —6) | —6) | 68.7 | 70.2 |
| 29.5 | 26.6 | 41.1 | 33.7 | 36.2 | 36.7 | —6) | —6) | 28.4 | 26.7 |
| 90.4 | 94.4 | 107.8 | 96.3 | 96.0 | 92.6 | —6) | —6) | 97.1 | 96.9 |
| German Speaking Countries | Europe incl. South America1) | NAFTA Markets2) | ||||
|---|---|---|---|---|---|---|
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
| Gross premiums written | 9,400 | 9,555 | 9,834 | 9,742 | 2,979 | 3,126 |
| Ceded premiums written | (1,608) | (1,755) | (1,016) | (1,085) | (824) | (780) |
| Change in unearned premiums | (809) | (879) | (45) | 32 | 14 | 101 |
| Premiums earned (net) | 6,983 | 6,921 | 8,773 | 8,689 | 2,169 | 2,447 |
| Interest and similar income | 880 | 901 | 785 | 759 | 260 | 269 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
29 | 35 | 38 | 98 | — | (1) |
| Operating realized gains/losses (net) | 31 | 51 | — | — | — | — |
| Fee and commission income | 88 | 113 | 21 | 40 | — | — |
| Other income | 10 | 3 | 1 | 6 | — | — |
| Operating revenues | 8,021 | 8,024 | 9,618 | 9,592 | 2,429 | 2,715 |
| Claims and insurance benefits incurred (net) | (5,124) | (4,996) | (6,419) | (6,429) | (1,528) | (1,686) |
| Change in reserves for insurance and investment contracts (net) |
(209) | (225) | (6) | (2) | — | — |
| Interest expenses | (70) | (61) | (38) | (66) | — | — |
| Loan loss provisions | — | (3) | — | — | — | — |
| Operating impairments of investments (net) | (8) | (70) | — | — | — | — |
| Investment expenses | (59) | (66) | (68) | (71) | (3) | (5) |
| Acquisition and administrative expenses (net) | (1,851) | (1,867) | (2,265) | (2,258) | (701) | (694) |
| Fee and commission expenses | (85) | (97) | (22) | (39) | — | — |
| Other expenses | (6) | — | — | — | — | — |
| Operating expenses | (7,412) | (7,385) | (8,818) | (8,865) | (2,232) | (2,385) |
| Operating profit | 609 | 639 | 800 | 727 | 197 | 330 |
| Loss ratio3) in % | 73.4 | 72.2 | 73.2 | 74.0 | 70.5 | 68.9 |
| Expense ratio4) in % | 26.5 | 27.0 | 25.8 | 26.0 | 32.3 | 28.4 |
| Combined ratio5) in % | 99.9 | 99.2 | 99.0 | 100.0 | 102.8 | 97.3 |
1) Corporate customer business in Spain transferred to AGCS in 2010. Prior year balances have not been adjusted.
2) From 2010 on Allianz Fire and Marine Insurance Japan Ltd. is shown within AGCS. Prior year balances have not been adjusted.
3) Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4) Represents acquisition and administrative expenses (net) divided by premiums earned (net).
5) Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
| Global Insurance Lines & Anglo Markets1)2) |
Growth Markets2) | Assistance (Mondial) | Consolidation | Property-Casualty | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | |
| 11,822 | 10,770 | 2,454 | 2,443 | 1,177 | 1,044 | (3,121) | (3,040) | 34,545 | 33,640 | |
| (2,761) | (2,556) | (528) | (605) | (8) | (7) | 3,136 | 3,065 | (3,609) | (3,723) | |
| (567) | (600) | (112) | (72) | (46) | (50) | — | — | (1,565) | (1,468) | |
| 8,494 | 7,614 | 1,814 | 1,766 | 1,123 | 987 | 15 | 25 | 29,371 | 28,449 | |
| 755 | 721 | 122 | 125 | 21 | 22 | (67) | (67) | 2,756 | 2,730 | |
| (49) | (48) | (1) | (5) | (2) | 2 | 3 | — | 18 | 81 | |
| — | — | — | — | — | — | — | — | 31 | 51 | |
| 427 | 398 | 43 | 41 | 269 | 252 | (49) | (57) | 799 | 787 | |
| 3 | — | 2 | 4 | — | — | — | — | 16 | 13 | |
| 9,630 | 8,685 | 1,980 | 1,931 | 1,411 | 1,263 | (98) | (99) | 32,991 | 32,111 | |
| (5,555) | (5,292) | (1,199) | (1,075) | (678) | (584) | (10) | (25) | (20,513) | (20,087) | |
| (29) | (19) | — | (9) | — | — | — | — | (244) | (255) | |
| (28) | (23) | (4) | (5) | (1) | — | 67 | 75 | (74) | (80) | |
| — | — | — | (7) | — | — | — | — | — | (10) | |
| — | — | — | — | — | — | — | — | (8) | (70) | |
| (29) | (30) | (10) | (7) | — | (1) | — | (3) | (169) | (183) | |
| (2,372) | (2,062) | (653) | (593) | (402) | (364) | 2 | — | (8,242) | (7,838) | |
| (372) | (317) | (54) | (50) | (261) | (242) | 42 | 53 | (752) | (692) | |
| — | — | (2) | (1) | — | — | — | — | (8) | (1) | |
| (8,385) | (7,743) | (1,922) | (1,747) | (1,342) | (1,191) | 101 | 100 | (30,010) | (29,216) | |
| 1,245 | 942 | 58 | 184 | 69 | 72 | 3 | 1 | 2,981 | 2,895 | |
| 65.4 | 69.5 | 66.1 | 60.9 | 60.4 | 59.2 | —6) | —6) | 69.8 | 70.6 | |
| 27.9 | 27.1 | 36.0 | 33.6 | 35.8 | 36.8 | —6) | —6) | 28.1 | 27.6 | |
| 93.3 | 96.6 | 102.1 | 94.5 | 96.2 | 96.0 | —6) | —6) | 97.9 | 98.2 |
Allianz Group Interim Report Third Quarter and First Nine Months of 2010 Notes to the Condensed Consolidated Interim Financial Statements
| German Speaking Countries | Europe incl. South America | |||
|---|---|---|---|---|
| Three months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
| Statutory premiums1) | 4,591 | 4,417 | 3,681 | 3,822 |
| Ceded premiums written | (47) | (47) | (92) | (83) |
| Change in unearned premiums | (25) | (21) | 32 | 6 |
| Statutory premiums (net) | 4,519 | 4,349 | 3,621 | 3,745 |
| Deposits from insurance and investment contracts | (1,005) | (1,110) | (2,490) | (2,677) |
| Premiums earned (net) | 3,514 | 3,239 | 1,131 | 1,068 |
| Interest and similar income | 1,850 | 1,919 | 1,015 | 983 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
378 | (22) | 21 | 250 |
| Operating realized gains/losses (net) | 240 | 444 | 246 | 93 |
| Fee and commission income | 6 | 8 | 97 | 90 |
| Other income | 10 | 5 | — | — |
| Operating revenues | 5,998 | 5,593 | 2,510 | 2,484 |
| Claims and insurance benefits incurred (net) | (2,928) | (3,011) | (983) | (1,026) |
| Change in reserves for insurance and investment contracts (net) | (2,376) | (1,649) | (713) | (557) |
| Interest expenses | (27) | (28) | (7) | (10) |
| Loan loss provisions | — | (3) | — | — |
| Operating impairments of investments (net) | (84) | (214) | (10) | (18) |
| Investment expenses | (102) | (90) | (49) | (46) |
| Acquisition and administrative expenses (net) | (157) | (350) | (452) | (417) |
| Fee and commission expenses | (6) | (7) | (51) | (44) |
| Operating restructuring charges | — | — | — | — |
| Other expenses | (11) | — | — | — |
| Operating expenses | (5,691) | (5,352) | (2,265) | (2,118) |
| Operating profit | 307 | 241 | 245 | 366 |
| Cost-income ratio2) in % | 95.5 | 96.2 | 95.0 | 92.7 |
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 deposits from insurance and investment contracts, claims and insurance benefits incurred (net), change in reserves for insurance and investment contracts (net) and acquisition and administrative expenses (net) divided by statutory premiums (net), interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), operating realized gains/losses (net), fee and commission income, other income, interest expenses, loan loss provisions, operating impairments of investments (net), investment expenses, fee and commission expenses, operating restructuring charges and other expenses.
| NAFTA Markets | Global Insurance Lines & Anglo Markets |
Growth Markets | Consolidation | Life/Health | |||||
|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn |
| 2,257 | 1,254 | 86 | 84 | 2,004 | 1,267 | (66) | (56) | 12,553 | 10,788 |
| (28) | (37) | (3) | (3) | (32) | (21) | 66 | 56 | (136) | (135) |
| 5 | 3 | 1 | (1) | (49) | 10 | — | — | (36) | (3) |
| 2,234 | 1,220 | 84 | 80 | 1,923 | 1,256 | — | — | 12,381 | 10,650 |
| (2,072) | (1,063) | — | — | (1,341) | (691) | — | — | (6,908) | (5,541) |
| 162 | 157 | 84 | 80 | 582 | 565 | — | — | 5,473 | 5,109 |
| 616 | 513 | 19 | 26 | 181 | 140 | (35) | (16) | 3,646 | 3,565 |
| (285) | 114 | (5) | (3) | 7 | 18 | 11 | 3 | 127 | 360 |
| 92 | (4) | — | — | 9 | 11 | — | — | 587 | 544 |
| 14 | 8 | — | — | 15 | 10 | (3) | (1) | 129 | 115 |
| — | 1 | — | (1) | — | 1 | — | — | 10 | 6 |
| 599 | 789 | 98 | 102 | 794 | 745 | (27) | (14) | 9,972 | 9,699 |
| (29) | (21) | (86) | (87) | (281) | (254) | — | — | (4,307) | (4,399) |
| (367) | (262) | 13 | 10 | (230) | (204) | — | — | (3,673) | (2,662) |
| (2) | (1) | — | (1) | (2) | (1) | 28 | 17 | (10) | (24) |
| 1 | (1) | — | 1 | 5 | — | — | — | 6 | (3) |
| — | (2) | — | — | (1) | 2 | — | — | (95) | (232) |
| (10) | (10) | (1) | — | (5) | (5) | 7 | — | (160) | (151) |
| (135) | (201) | (13) | (22) | (246) | (239) | 3 | — | (1,000) | (1,229) |
| (11) | (9) | — | — | (1) | (1) | 2 | 1 | (67) | (60) |
| — | — | — | — | — | — | — | — | — | — |
| — | — | — | — | — | — | — | — | (11) | — |
| (553) | (507) | (87) | (99) | (761) | (702) | 40 | 18 | (9,317) | (8,760) |
| 46 | 282 | 11 | 3 | 33 | 43 | 13 | 4 | 655 | 939 |
| 98.3 | 84.6 | 88.7 | 97.1 | 98.5 | 97.0 | —3) | —3) | 96.0 | 93.6 |
| German Speaking Countries | Europe incl. South America | ||||
|---|---|---|---|---|---|
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Statutory premiums1) | 15,346 | 14,117 | 14,733 | 12,780 | |
| Ceded premiums written | (137) | (148) | (254) | (260) | |
| Change in unearned premiums | (78) | (62) | 18 | 41 | |
| Statutory premiums (net) | 15,131 | 13,907 | 14,497 | 12,561 | |
| Deposits from insurance and investment contracts | (4,036) | (3,962) | (10,952) | (9,068) | |
| Premiums earned (net) | 11,095 | 9,945 | 3,545 | 3,493 | |
| Interest and similar income | 5,838 | 5,674 | 3,075 | 2,889 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
671 | (15) | (30) | 291 | |
| Operating realized gains/losses (net) | 742 | 899 | 446 | 442 | |
| Fee and commission income | 18 | 18 | 288 | 267 | |
| Other income | 45 | 11 | — | 2 | |
| Operating revenues | 18,409 | 16,532 | 7,324 | 7,384 | |
| Claims and insurance benefits incurred (net) | (9,363) | (9,796) | (3,130) | (3,276) | |
| Change in reserves for insurance and investment contracts (net) | (6,687) | (3,448) | (1,626) | (1,014) | |
| Interest expenses | (79) | (89) | (22) | (42) | |
| Loan loss provisions | — | (9) | — | — | |
| Operating impairments of investments (net) | (217) | (1,104) | (95) | (402) | |
| Investment expenses | (285) | (252) | (148) | (141) | |
| Acquisition and administrative expenses (net) | (757) | (1,135) | (1,326) | (1,441) | |
| Fee and commission expenses | (17) | (17) | (143) | (127) | |
| Operating restructuring charges | (1) | 3 | — | — | |
| Other expenses | (35) | — | — | — | |
| Operating expenses | (17,441) | (15,847) | (6,490) | (6,443) | |
| Operating profit | 968 | 685 | 834 | 941 | |
| Cost-income ratio2) in % | 95.6 | 96.4 | 95.3 | 94.0 |
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 deposits from insurance and investment contracts, claims and insurance benefits incurred (net), change in reserves for insurance and investment contracts (net) and acquisition and administrative expenses (net) divided by statutory premiums (net), interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), operating realized gains/losses (net), fee and commission income, other income, interest expenses, loan loss provisions, operating impairments of investments (net), investment expenses, fee and commission expenses, operating restructuring charges and other expenses.
| NAFTA Markets | Global Insurance Lines & Anglo Markets |
Growth Markets | Consolidation | Life/Health | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | |
| 6,009 | 5,037 | 236 | 228 | 5,898 | 3,572 | (189) | (167) | 42,033 | 35,567 | |
| (106) | (112) | (6) | (2) | (85) | (50) | 189 | 167 | (399) | (405) | |
| 8 | 3 | 4 | (3) | (96) | (35) | — | — | (144) | (56) | |
| 5,911 | 4,928 | 234 | 223 | 5,717 | 3,487 | — | — | 41,490 | 35,106 | |
| (5,402) | (4,450) | — | — | (3,956) | (2,091) | — | — | (24,346) | (19,571) | |
| 509 | 478 | 234 | 223 | 1,761 | 1,396 | — | — | 17,144 | 15,535 | |
| 1,749 | 1,546 | 57 | 66 | 517 | 379 | (40) | (46) | 11,196 | 10,508 | |
| (119) | 282 | (28) | (13) | 32 | 26 | (8) | 4 | 518 | 575 | |
| 106 | — | — | — | 43 | 13 | — | — | 1,337 | 1,354 | |
| 36 | 27 | — | — | 43 | 48 | (9) | (4) | 376 | 356 | |
| — | 1 | — | — | 14 | 1 | — | — | 59 | 15 | |
| 2,281 | 2,334 | 263 | 276 | 2,410 | 1,863 | (57) | (46) | 30,630 | 28,343 | |
| (82) | (59) | (232) | (256) | (796) | (655) | — | — | (13,603) | (14,042) | |
| (1,208) | (816) | 35 | 35 | (692) | (501) | — | — | (10,178) | (5,744) | |
| (5) | (4) | (1) | (2) | (5) | (5) | 48 | 47 | (64) | (95) | |
| 2 | (9) | — | — | 6 | 1 | — | — | 8 | (17) | |
| (5) | (70) | — | — | (1) | 1 | — | — | (318) | (1,575) | |
| (34) | (28) | (3) | — | (17) | (19) | (2) | (1) | (489) | (441) | |
| (603) | (852) | (43) | (41) | (721) | (586) | — | — | (3,450) | (4,055) | |
| (32) | (35) | — | — | (1) | (1) | 9 | 4 | (184) | (176) | |
| — | — | — | — | — | — | — | — | (1) | 3 | |
| — | — | — | — | (2) | — | — | — | (37) | — | |
| (1,967) | (1,873) | (244) | (264) | (2,229) | (1,765) | 55 | 50 | (28,316) | (26,142) | |
| 314 | 461 | 19 | 12 | 181 | 98 | (2) | 4 | 2,314 | 2,201 | |
| 95.9 | 93.1 | 92.7 | 95.6 | 97.1 | 97.5 | —3) | —3) | 95.7 | 95.2 |
| Three months ended September 30, | 2010 € mn |
2009 € mn |
|---|---|---|
| Net fee and commission income1) | 1,235 | 866 |
| Net interest income2) | 10 | 12 |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 17 |
| Other income | 4 | 4 |
| Operating revenues | 1,256 | 899 |
| Administrative expenses (net), excluding acquisition-related expenses | (735) | (531) |
| Operating expenses | (735) | (531) |
| Operating profit | 521 | 368 |
| Cost-income ratio3) in % | 58.5 | 59.1 |
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.
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
|---|---|---|
| Net fee and commission income1) | 3,520 | 2,327 |
| Net interest income2) | 18 | 22 |
| Income from financial assets and liabilities carried at fair value through income (net) | 8 | 33 |
| Other income | 14 | 13 |
| Operating revenues | 3,560 | 2,395 |
| Administrative expenses (net), excluding acquisition-related expenses | (2,057) | (1,570) |
| Operating expenses | (2,057) | (1,570) |
| Operating profit | 1,503 | 825 |
| Cost-income ratio3) in % | 57.8 | 65.6 |
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.
| Holding & Treasury | ||
|---|---|---|
| Three months ended September 30, | 2010 | 2009 |
| € mn | € mn | |
| Interest and similar income | 45 | 54 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (18) | (35) |
| Fee and commission income | 45 | 50 |
| Other income | — | — |
| Operating revenues | 72 | 69 |
| Interest expenses, excluding interest expenses from external debt | (93) | (103) |
| Loan loss provisions | — | — |
| Investment expenses | (23) | (23) |
| Administrative expenses (net), excluding acquisition-related expenses | (144) | (137) |
| Fee and commission expenses | (49) | (58) |
| Other expenses | — | — |
| Operating expenses | (309) | (321) |
| Operating loss | (237) | (252) |
| Cost-income ratio 1) for the reportable segment Banking in % |
1) Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses 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.
| Holding & Treasury | ||
|---|---|---|
| Nine months ended September 30, | 2010 € mn |
2009 € mn |
| Interest and similar income | 223 | 292 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (32) | (132) |
| Fee and commission income | 131 | 150 |
| Other income | — | — |
| Operating revenues | 322 | 310 |
| Interest expenses, excluding interest expenses from external debt | (284) | (341) |
| Loan loss provisions | — | — |
| Investment expenses | (66) | (61) |
| Administrative expenses (net), excluding acquisition-related expenses | (421) | (411) |
| Fee and commission expenses | (152) | (129) |
| Other expenses | — | — |
| Operating expenses | (923) | (942) |
| Operating loss | (601) | (632) |
| Cost-income ratio 1) for the reportable segment Banking in % |
1) Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses 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 | |||||
|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn | |
| 173 | 174 | (5) | 2 | (1) | (1) | 212 | 229 | |
| (1) | (3) | — | — | (1) | — | (20) | (38) | |
| 111 | 103 | 30 | 38 | — | (1) | 186 | 190 | |
| — | — | — | (2) | — | — | — | (2) | |
| 283 | 274 | 25 | 38 | (2) | (2) | 378 | 379 | |
| (86) | (100) | — | — | 1 | 1 | (178) | (202) | |
| (18) | (13) | — | — | — | — | (18) | (13) | |
| — | — | — | — | — | 2 | (23) | (21) | |
| (151) | (143) | (34) | (47) | — | (1) | (329) | (328) | |
| (51) | (55) | — | 3 | 1 | — | (99) | (110) | |
| (1) | — | — | — | — | — | (1) | — | |
| (307) | (311) | (34) | (44) | 2 | 2 | (648) | (674) | |
| (24) | (37) | (9) | (6) | — | — | (270) | (295) | |
| 104.1 | 120.2 |
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| € mn | € mn | € mn | € mn | € mn | € mn | € mn | € mn |
| 515 | 537 | 2 | — | (2) | (3) | 738 | 826 |
| (10) | 3 | (1) | (1) | — | — | (43) | (130) |
| 320 | 266 | 94 | 95 | (3) | (4) | 542 | 507 |
| — | — | 1 | 1 | (1) | — | — | |
| 825 | 806 | 96 | 95 | (6) | (7) | 1,237 | 1,204 |
| (253) | (306) | — | — | 1 | 2 | (536) | (645) |
| (41) | (30) | — | — | — | — | (41) | (30) |
| — | — | (1) | — | — | 4 | (67) | (57) |
| (430) | (468) | (108) | (112) | 4 | — | (955) | (991) |
| (161) | (140) | — | (3) | 1 | — | (312) | (272) |
| (2) | (1) | — | — | — | — | (2) | (1) |
| (887) | (945) | (109) | (115) | 6 | 6 | (1,913) | (1,996) |
| (62) | (139) | (13) | (20) | — | (1) | (676) | (792) |
| 105.1 | 130.3 |
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Financial assets held for trading | ||
| Debt securities | 834 | 363 |
| Equity securities | 128 | 105 |
| Derivative financial instruments | 2,030 | 1,663 |
| Subtotal | 2,992 | 2,131 |
| Financial assets designated at fair value through income |
||
| Debt securities | 5,192 | 8,814 |
| Equity securities | 3,173 | 3,376 |
| Subtotal | 8,365 | 12,190 |
| Total | 11,357 | 14,321 |
| 5 | Investments | |
|---|---|---|
| -- | --- | ------------- |
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Available-for-sale investments | 318,373 | 279,045 |
| Held-to-maturity investments | 3,901 | 3,475 |
| Funds held by others under reinsur ance contracts assumed |
1,177 | 1,193 |
| Investments in associates and | ||
| joint ventures | 2,683 | 3,025 |
| Real estate held for investment | 8,029 | 7,514 |
| Total | 334,163 | 294,252 |
| As of September 30, 2010 | As of December 31, 2009 | |||||||
|---|---|---|---|---|---|---|---|---|
| Amortized Cost € mn |
Unrealized Gains € mn |
Unrealized Losses € mn |
Fair Value € mn |
Amortized Cost € mn |
Unrealized Gains € mn |
Unrealized Losses € mn |
Fair Value € mn |
|
| Debt securities | ||||||||
| Government and agency mortgage-backed securities (residential and commercial) |
6,345 | 334 | (1) | 6,678 | 8,202 | 209 | (53) | 8,358 |
| Corporate mortgage-backed securities (residential and commercial) |
9,971 | 738 | (182) | 10,527 | 8,116 | 76 | (444) | 7,748 |
| Other asset-backed securities | 3,545 | 265 | (41) | 3,769 | 3,878 | 119 | (110) | 3,887 |
| Government and government agency bonds |
122,024 | 8,577 | (919) | 129,682 | 110,550 | 4,069 | (667) | 113,952 |
| Corporate bonds | 130,659 | 7,954 | (1,212) | 137,401 | 113,338 | 4,338 | (1,902) | 115,774 |
| Other | 1,601 | 163 | (2) | 1,762 | 1,570 | 66 | (34) | 1,602 |
| Subtotal | 274,145 | 18,031 | (2,357) | 289,819 | 245,654 | 8,877 | (3,210) | 251,321 |
| Equity securities | 19,076 | 9,632 | (154) | 28,554 | 17,647 | 10,227 | (150) | 27,724 |
| Total | 293,221 | 27,663 | (2,511) | 318,373 | 263,301 | 19,104 | (3,360) | 279,045 |
| As of September 30, 2010 | As of December 31, 2009 | ||||||
|---|---|---|---|---|---|---|---|
| Banks € mn |
Customers € mn |
Total € mn |
Banks € mn |
Customers € mn |
Total € mn |
||
| Short-term investments and certificates of deposit | 6,284 | — | 6,284 | 10,530 | — | 10,530 | |
| Reverse repurchase agreements | 1,115 | — | 1,115 | 848 | 19 | 867 | |
| Collateral paid for securities borrowing transactions and derivatives |
220 | — | 220 | — | — | — | |
| Loans | 68,337 | 46,200 | 114,537 | 69,845 | 44,313 | 114,158 | |
| Other | 2,527 | 59 | 2,586 | 3,525 | 60 | 3,585 | |
| Subtotal | 78,483 | 46,259 | 124,742 | 84,748 | 44,392 | 129,140 | |
| Loan loss allowance | — | (137) | (137) | — | (144) | (144) | |
| Total | 78,483 | 46,122 | 124,605 | 84,748 | 44,248 | 128,996 |
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Corporate customers | 15,141 | 13,722 |
| Private customers | 24,228 | 23,743 |
| Public customers | 6,890 | 6,927 |
| Total | 46,259 | 44,392 |
| As of | As of | |
|---|---|---|
| September 30, | December 31, | |
| 2010 | 2009 | |
| € mn | € mn | |
| Unearned premiums | 1,652 | 1,424 |
| Reserves for loss and loss adjustment | ||
| expenses | 7,247 | 7,456 |
| Aggregate policy reserves | 4,634 | 4,613 |
| Other insurance reserves | 98 | 66 |
| Total | 13,631 | 13,559 |
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Deferred acquisition costs | ||
| Property-Casualty | 4,097 | 3,789 |
| Life/Health | 13,500 | 14,452 |
| Asset Management | 147 | 149 |
| Subtotal | 17,744 | 18,390 |
| Present value of future profits | 1,160 | 1,212 |
| Deferred sales inducements | 689 | 693 |
| Total | 19,593 | 20,295 |
| As of | As of | |
|---|---|---|
| September 30, | December 31, | |
| 2010 | 2009 | |
| € mn | € mn | |
| Receivables | ||
| Policyholders | 5,027 | 4,865 |
| Agents | 4,209 | 3,922 |
| Reinsurers | 2,589 | 2,437 |
| Other | 4,470 | 3,480 |
| Less allowance for doubtful | ||
| accounts | (633) | (564) |
| Subtotal | 15,662 | 14,140 |
| Tax receivables | ||
| Income taxes | 1,359 | 2,277 |
| Other taxes | 816 | 950 |
| Subtotal | 2,175 | 3,227 |
| Accrued dividends, interest and rent | 6,740 | 6,865 |
| Prepaid expenses | ||
| Interest and rent | 14 | 20 |
| Other prepaid expenses | 339 | 284 |
| Subtotal | 353 | 304 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
488 | 304 |
| Property and equipment | ||
| Real estate held for own use | 3,076 | 2,916 |
| Software | 1,292 | 1,297 |
| Equipment | 722 | 803 |
| Fixed assets of alternative Invest | ||
| ments | 998 | 822 |
| Subtotal | 6,088 | 5,838 |
| Other assets | 2,187 | 2,369 |
| Total | 33,693 | 33,047 |
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Non-current assets and assets of disposal groups classified as held for sale |
||
| Alba Allgemeine Versicherungs Gesellschaft AG, Basel |
368 | — |
| Phenix Compagnie d'assurances SA, Lausanne |
75 | — |
| Phenix Compagnie d'assurances sur la vie SA, Lausanne |
302 | — |
| Total | 745 | — |
| Liabilities of disposal groups classified as held for sale |
||
| Alba Allgemeine Versicherungs Gesellschaft AG, Basel |
300 | — |
| Phenix Compagnie d'assurances SA, Lausanne |
54 | — |
| Phenix Compagnie d'assurances sur la vie SA, Lausanne |
279 | — |
| Total | 633 | — |
During the third quarter 2010, the Allianz Group contractually agreed to dispose of Alba, Phenix and Phenix Vie to Helvetia Group.
In accordance with IFRS 5 the assets and liabilities relating to the Allianz Group's 100% ownership of Alba and Phenix within the segment Property-Casualty as well as of Phenix Vie within the segment Life/Health were classified and presented as disposal groups held for sale.
The following table presents the major classes of assets and liabilities classified as held for sale:
| As of September 30, 2010 | Alba | Phenix | Phenix Vie | Total |
|---|---|---|---|---|
| € mn | € mn | € mn | € mn | |
| Cash and cash equivalents | 13 | 3 | 8 | 24 |
| Investments | 305 | 57 | 253 | 615 |
| Loans and advances to banks and customers | 10 | 1 | 3 | 14 |
| Financial assets for unit-linked contracts | — | — | 11 | 11 |
| Reinsurance assets | 23 | 3 | 1 | 27 |
| Deferred acquisition costs | 1 | 3 | 11 | 15 |
| Other assets | 16 | 8 | 15 | 39 |
| Total assets of disposal groups classified as held for sale | 368 | 75 | 302 | 745 |
| Liabilitites to banks and customers | — | 1 | 1 | 2 |
| Unearned premiums | 31 | 8 | — | 39 |
| Reserves for loss and loss adjustment expenses | 208 | 34 | — | 242 |
| Reserves for insurance and investment contracts | 27 | 5 | 263 | 295 |
| Financial liabilities for unit-linked contracts | — | — | 11 | 11 |
| Deferred tax liabilities | 14 | 2 | — | 16 |
| Other liabilities | 20 | 4 | 4 | 28 |
| Total liabilities of disposal groups classified as held for sale | 300 | 54 | 279 | 633 |
As of September 30, 2010, cumulative income recognized in other comprehensive income relating to the disposal groups classified as held for sale amounts to € 31 mn.
No gain or loss was recognized on initial or subsequent measurement of the disposal groups in accordance with IFRS 5.
The sale is expected to occur during the fourth quarter 2010 and is subject to approval by the regulatory authorities.
During the second quarter 2010, the Allianz Group reclassified the assets and liabilities related to its 100% ownership of Allianz Bank Zrt., Budapest, within the segment Corporate and Other to disposal groups held for sale in accordance with IFRS 5. The sale of Allianz Bank Zrt., Budapest, was completed during the third quarter 2010 and all assets and liabilities have been deconsolidated.
During the second quarter 2010, the Allianz Group acquired 100% of the Galleria Commerciale Porta di Roma S.p.A. shopping mall in Rome, Italy. At the same time, the Allianz Group agreed to sell a 50% stake. The sale was completed during the third quarter 2010. The remaining 50% stake is accounted for as joint venture measured at equity.
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Intangible assets with indefinite useful lives |
||
| Goodwill | 12,140 | 12,014 |
| Brand names1) | 310 | 309 |
| Subtotal | 12,450 | 12,323 |
| Intangible assets with finite useful lives |
||
| Long-term distribution agreements with Commerzbank AG |
595 | 620 |
| Customer relationships | 302 | 352 |
| Other2) | 187 | 181 |
| Subtotal | 1,084 | 1,153 |
| Total | 13,534 | 13,476 |
1) Includes primarily the brand name of Selecta AG, Muntelier.
2) Includes primarily research and development costs of € 71 mn and bancassurance agreements of € 15 mn.
Changes in goodwill for the nine months ended September 30, 2010, were as follows:
| 2010 € mn |
|
|---|---|
| Cost as of January 1, | 12,291 |
| Accumulated impairments as of January 1, | (277) |
| Carrying amount as of January 1, | 12,014 |
| Additions | 42 |
| Foreign currency translation adjustments | 199 |
| Impairments | (115) |
| Carrying amount as of September 30, | 12,140 |
| Accumulated impairments as of September 30, | 392 |
| Cost as of September 30, | 12,532 |
Additions include goodwill from the acquisition of a 100% participation in Windpark Werder Zinndorf GmbH & Co. KG, Sehestedt, in the first quarter 2010.
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Financial liabilities held for trading | ||
| Derivative financial instruments | 4,660 | 4,808 |
| Other trading liabilities | 47 | 83 |
| Subtotal | 4,707 | 4,891 |
| Financial liabilities designated at fair value through income |
— | — |
| Total | 4,707 | 4,891 |
| As of September 30, 2010 | As of December 31, 2009 | |||||
|---|---|---|---|---|---|---|
| Banks € mn |
Customers € mn |
Total € mn |
Banks € mn |
Customers € mn |
Total € mn |
|
| Payable on demand | 324 | 4,162 | 4,486 | 366 | 4,106 | 4,472 |
| Savings deposits | — | 2,486 | 2,486 | — | 1,980 | 1,980 |
| Term deposits and certificates of deposit | 1,114 | 1,721 | 2,835 | 1,188 | 2,185 | 3,373 |
| Repurchase agreements | 852 | 179 | 1,031 | 1,025 | 172 | 1,197 |
| Collateral received from securities lending transactions and derivatives |
1,347 | — | 1,347 | 44 | — | 44 |
| Other | 6,293 | 2,682 | 8,975 | 6,885 | 3,297 | 10,182 |
| Total | 9,930 | 11,230 | 21,160 | 9,508 | 11,740 | 21,248 |
| As of | As of | |
|---|---|---|
| September 30, | December 31, | |
| 2010 | 2009 | |
| € mn | € mn | |
| Property-Casualty | 57,406 | 55,715 |
| Life/Health | 8,789 | 8,738 |
| Consolidation | (11) | (12) |
| Total | 66,184 | 64,441 |
| 2010 | 2009 | ||||||
|---|---|---|---|---|---|---|---|
| Gross € mn |
Ceded € mn |
Net € mn |
Gross € mn |
Ceded € mn |
Net € mn |
||
| As of January 1, | 55,715 | (7,175) | 48,540 | 55,616 | (7,820) | 47,796 | |
| Loss and loss adjustment expenses incurred | |||||||
| Current year | 23,560 | (1,957) | 21,603 | 22,776 | (2,095) | 20,681 | |
| Prior years | (1,847) | 757 | (1,090) | (1,341) | 747 | (594) | |
| Subtotal | 21,713 | (1,200) | 20,513 | 21,435 | (1,348) | 20,087 | |
| Loss and loss adjustment expenses paid | |||||||
| Current year | (9,940) | 576 | (9,364) | (9,405) | 443 | (8,962) | |
| Prior years | (11,437) | 1,215 | (10,222) | (12,172) | 1,495 | (10,677) | |
| Subtotal | (21,377) | 1,791 | (19,586) | (21,577) | 1,938 | (19,639) | |
| Foreign currency translation adjustments and other changes | 1,597 | (362) | 1,235 | 203 | 19 | 222 | |
| Reclassifications1) | (242) | 26 | (216) | — | — | — | |
| As of September 30, | 57,406 | (6,920) | 50,486 | 55,677 | (7,211) | 48,466 |
1) In the third quarter 2010 the companies Phenix Compagnie d'assurances SA and Alba Allgemeine Versicherungs-Gesellschaft AG were classified as held for sale. See note 10 for further information.
| As of September 30, 2010 |
As of December 31, 2009 |
|
|---|---|---|
| € mn | € mn | |
| Aggregate policy reserves | 317,506 | 298,725 |
| Reserves for premium refunds | 30,503 | 24,430 |
| Other insurance reserves | 810 | 646 |
| Total | 348,819 | 323,801 |
| As of September 30, |
As of December 31, |
|
|---|---|---|
| 2010 | 2009 | |
| € mn | € mn | |
| Payables | ||
| Policyholders | 4,041 | 4,798 |
| Reinsurers | 1,863 | 1,804 |
| Agents | 1,496 | 1,407 |
| Subtotal | 7,400 | 8,009 |
| Payables for social security | 433 | 398 |
| Tax payables | ||
| Income taxes | 1,364 | 1,890 |
| Other taxes | 1,085 | 1,028 |
| Subtotal | 2,449 | 2,918 |
| Accrued interest and rent | 599 | 715 |
| Unearned income | ||
| Interest and rent | 11 | 9 |
| Other | 295 | 316 |
| Subtotal | 306 | 325 |
| Provisions | ||
| Pensions and similar obligations | 3,870 | 3,819 |
| Employee related | 1,991 | 1,887 |
| Share-based compensation plans | 1,014 | 1,296 |
| Restructuring plans | 313 | 346 |
| Loan commitments | 10 | 8 |
| Contingent losses from non insurance business |
126 | 137 |
| Other provisions | 1,313 | 1,395 |
| Subtotal | 8,637 | 8,888 |
| Deposits retained for reinsurance ceded |
2,498 | 2,547 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
342 | 310 |
| Financial liabilities for puttable | ||
| equity instruments | 2,977 | 3,451 |
| Other liabilities | 6,230 | 5,724 |
| Total | 31,871 | 33,285 |
| As of September 30, 2010 |
As of December 31, 2009 |
|
|---|---|---|
| € mn | € mn | |
| Allianz SE1) | ||
| Subordinated bonds | 8,263 | 8,162 |
| Participation certificates | — | 121 |
| Subtotal | 8,263 | 8,283 |
| Banking subsidiaries | ||
| Subordinated bonds | 227 | 173 |
| Subtotal | 227 | 173 |
| All other subsidiaries | ||
| Subordinated liabilities | 3982) | 846 |
| Hybrid equity | 45 | 45 |
| Subtotal | 443 | 891 |
| Total | 8,933 | 9,347 |
1) Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
2) Early redemption of subordinated bonds amounting to € 450 mn issued by Allianz France.
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Shareholders' equity | ||
| Issued capital | 1,162 | 1,162 |
| Capital reserves | 27,473 | 27,473 |
| Revenue reserves | 11,985 | 9,855 |
| Treasury shares | (209) | (213) |
| Foreign currency translation adjustments |
(2,742) | (3,626) |
| Unrealized gains and losses (net)1) | 7,231 | 5,457 |
| Subtotal | 44,900 | 40,108 |
| Non-controlling interests | 2,171 | 2,121 |
| Total | 47,071 | 42,229 |
1) As of September 30, 2010, includes € 201 mn (2009: € 187 mn) related to cash flow hedges.
| As of September 30, 2010 € mn |
As of December 31, 2009 € mn |
|
|---|---|---|
| Allianz SE1) | ||
| Senior bonds | 5,335 | 5,330 |
| Money market securities | 2,269 | 1,504 |
| Subtotal | 7,604 | 6,834 |
| Banking subsidiaries | ||
| Senior bonds | 1,123 | 1,100 |
| Subtotal | 1,123 | 1,100 |
| All other subsidiaries | ||
| Certificated liabilities | 28 | 28 |
| Subtotal | 28 | 28 |
| Total | 8,755 | 7,962 |
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.
| Three months ended September 30, | Property Casualty |
Life/Health | Consolidation | Group |
|---|---|---|---|---|
| € mn | € mn | € mn | € mn | |
| 2010 | ||||
| Premiums written | ||||
| Direct | 9,555 | 5,529 | — | 15,084 |
| Assumed | 1,045 | 115 | — | 1,160 |
| Subtotal | 10,600 | 5,644 | — | 16,244 |
| Ceded | (1,184) | (135) | — | (1,319) |
| Net | 9,416 | 5,509 | — | 14,925 |
| Change in unearned premiums | ||||
| Direct | 1,078 | (36) | — | 1,042 |
| Assumed | 46 | (1) | (2) | 43 |
| Subtotal | 1,124 | (37) | (2) | 1,085 |
| Ceded | (271) | 1 | 2 | (268) |
| Net | 853 | (36) | — | 817 |
| Premiums earned | ||||
| Direct | 10,633 | 5,493 | — | 16,126 |
| Assumed | 1,091 | 114 | (2) | 1,203 |
| Subtotal | 11,724 | 5,607 | (2) | 17,329 |
| Ceded | (1,455) | (134) | 2 | (1,587) |
| Net | 10,269 | 5,473 | — | 15,742 |
| 2009 | ||||
| Premiums written | ||||
| Direct | 9,206 | 5,144 | — | 14,350 |
| Assumed | 1,026 | 97 | (6) | 1,117 |
| Subtotal | 10,232 | 5,241 | (6) | 15,467 |
| Ceded | (1,368) | (129) | 6 | (1,491) |
| Net | 8,864 | 5,112 | — | 13,976 |
| Change in unearned premiums | ||||
| Direct | 973 | (2) | — | 971 |
| Assumed | (62) | 1 | (3) | (64) |
| Subtotal | 911 | (1) | (3) | 907 |
| Ceded | (23) | (2) | 3 | (22) |
| Net | 888 | (3) | — | 885 |
| Premiums earned | ||||
| Direct | 10,179 | 5,142 | — | 15,321 |
| Assumed | 964 | 98 | (9) | 1,053 |
| Subtotal | 11,143 | 5,240 | (9) | 16,374 |
| Ceded | (1,391) | (131) | 9 | (1,513) |
| Net | 9,752 | 5,109 | — | 14,861 |
| Nine months ended September 30, | Property Casualty |
Life/Health | Consolidation | Group |
|---|---|---|---|---|
| € mn | € mn | € mn | € mn | |
| 2010 | ||||
| Premiums written | ||||
| Direct | 31,828 | 17,369 | — | 49,197 |
| Assumed | 2,717 | 317 | (10) | 3,024 |
| Subtotal | 34,545 | 17,686 | (10) | 52,221 |
| Ceded | (3,609) | (398) | 10 | (3,997) |
| Net | 30,936 | 17,288 | — | 48,224 |
| Change in unearned premiums | ||||
| Direct | (1,450) | (146) | — | (1,596) |
| Assumed | (229) | 1 | (4) | (232) |
| Subtotal | (1,679) | (145) | (4) | (1,828) |
| Ceded | 114 | 1 | 4 | 119 |
| Net | (1,565) | (144) | — | (1,709) |
| Premiums earned | ||||
| Direct | 30,378 | 17,223 | — | 47,601 |
| Assumed | 2,488 | 318 | (14) | 2,792 |
| Subtotal | 32,866 | 17,541 | (14) | 50,393 |
| Ceded | (3,495) | (397) | 14 | (3,878) |
| Net | 29,371 | 17,144 | — | 46,515 |
| 2009 | ||||
| Premiums written | ||||
| Direct | 31,178 | 15,707 | — | 46,885 |
| Assumed | 2,462 | 263 | (17) | 2,708 |
| Subtotal | 33,640 | 15,970 | (17) | 49,593 |
| Ceded | (3,723) | (379) | 17 | (4,085) |
| Net | 29,917 | 15,591 | — | 45,508 |
| Change in unearned premiums | ||||
| Direct | (1,597) | (53) | — | (1,650) |
| Assumed | (193) | (1) | (4) | (198) |
| Subtotal | (1,790) | (54) | (4) | (1,848) |
| Ceded | 322 | (2) | 4 | 324 |
| Net | (1,468) | (56) | — | (1,524) |
| Premiums earned | ||||
| Direct | 29,581 | 15,654 | — | 45,235 |
| Assumed | 2,269 | 262 | (21) | 2,510 |
| Subtotal | 31,850 | 15,916 | (21) | 47,745 |
| Ceded | (3,401) | (381) | 21 | (3,761) |
| Net | 28,449 | 15,535 | — | 43,984 |
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Interest from held-to-maturity investments | 45 | 42 | 131 | 128 | |
| Dividends from available-for-sale investments | 161 | 89 | 793 | 758 | |
| Interest from available-for-sale investments | 2,966 | 2,637 | 8,670 | 7,909 | |
| Share of earnings from investments in associates and joint ventures | 18 | 84 | 134 | 59 | |
| Rent from real estate held for investment | 162 | 182 | 513 | 518 | |
| Interest from loans to banks and customers | 1,336 | 1,430 | 4,124 | 4,227 | |
| Other interest | 43 | 42 | 114 | 121 | |
| Total | 4,731 | 4,506 | 14,479 | 13,720 |
| Three months ended September 30, | Property Casualty € mn |
Life/Health € mn |
Asset Management € mn |
Corporate and Other € mn |
Consoli dation € mn |
Group € mn |
|---|---|---|---|---|---|---|
| 2010 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) |
35 | 481 | 2 | 26 | (1) | 543 |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
36 | 257 | 29 | 1 | — | 323 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(7) | (73) | (15) | — | — | (95) |
| Foreign currency gains and losses (net) | (53) | (550) | (9) | (11) | 2 | (621) |
| Total | 11 | 115 | 7 | 16 | 1 | 150 |
| 2009 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) |
33 | (286) | 3 | 105 | 11 | (134) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
59 | 1,004 | 66 | 6 | — | 1,135 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(20) | (252) | (51) | (2) | — | (325) |
| Foreign currency gains and losses (net) | (36) | (120) | (1) | (22) | 3 | (176) |
| Total | 36 | 346 | 17 | 87 | 14 | 500 |
| Nine months ended September 30, | Property Casualty € mn |
Life/Health € mn |
Asset Management € mn |
Corporate and Other € mn |
Consoli dation € mn |
Group € mn |
|---|---|---|---|---|---|---|
| 2010 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) |
(68) | (251) | 1 | (60) | 3 | (375) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
76 | 725 | 20 | 2 | — | 823 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(12) | (209) | (13) | — | — | (234) |
| Foreign currency gains and losses (net) | (16) | 229 | — | (46) | — | 167 |
| Total | (20) | 494 | 8 | (104) | 3 | 381 |
| 2009 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) |
(47) | (445) | 4 | 269 | 7 | (212) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
120 | 1,359 | 104 | 17 | — | 1,600 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(22) | (344) | (75) | (3) | — | (444) |
| Foreign currency gains and losses (net) | (26) | (1) | — | (164) | 2 | (189) |
| Total | 25 | 569 | 33 | 119 | 9 | 755 |
Income from financial assets and liabilities held for trading for the nine months ended September 30, 2010, includes in the Life/Health segment expenses of € 251 mn (2009: € 445 mn) from derivative financial instruments. This includes income of € 387 mn (2009: expenses of € 45 mn) of German entities from financial derivative positions to protect against equity and foreign exchange rate fluctuations as well as for duration management. Also included are expenses from U.S. entities amongst others from embedded derivatives required to be separated related to fixed-indexed annuity products and guaranteed benefits under unit-linked contracts of € 557 mn (2009: € 247 mn).
Income from financial assets and liabilities held for trading for the nine months ended September 30, 2010, includes in the Corporate and Other segment expenses of € 73 mn (2009: income of € 287 mn) from derivative financial instruments. This includes income of € 20 mn (2009: € 104 mn) from financial derivative instruments to protect investments and liabilities against foreign exchange rate fluctuations. In 2010, hedging of strategic equity investments not designated for hedge accounting resulted in expenses of € 19 mn (2009: € 164 mn). Financial derivatives related to investment strategies had expenses of € 42 mn (2009: income of € 227 mn). Additionally, income from financial assets and liabilities held for trading for the nine months ended September 30, 2010, includes income of € 1 mn (2009: expenses of € 30 mn) from hedges of share based compensation plans (restricted stock units).
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, excluding 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 is substantially hedged against foreign currency fluctuations with freestanding derivatives resulting in an offsetting effect of € (113) mn (2009: € 135 mn) for the nine months ended September 30, 2010.
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Realized gains | |||||
| Available-for-sale investments | |||||
| Equity securities | 547 | 930 | 1,832 | 3,893 | |
| Debt securities | 441 | 347 | 1,300 | 1,216 | |
| Subtotal | 988 | 1,277 | 3,132 | 5,109 | |
| Investments in associates and joint ventures1) | 77 | 2 | 101 | 15 | |
| Real estate held for investment | 91 | 32 | 211 | 59 | |
| Loans and advances to banks and customers | 34 | 20 | 97 | 124 | |
| Subtotal | 1,190 | 1,331 | 3,541 | 5,307 | |
| Realized losses | |||||
| Available-for-sale investments | |||||
| Equity securities | (67) | (229) | (152) | (1,539) | |
| Debt securities | (132) | (120) | (657) | (734) | |
| Subtotal | (199) | (349) | (809) | (2,273) | |
| Investments in associates and joint ventures2) | — | — | (4) | (5) | |
| Real estate held for investment | — | (9) | (3) | (12) | |
| Loans and advances to banks and customers | (1) | (82) | (29) | (89) | |
| Subtotal | (200) | (440) | (845) | (2,379) | |
| Total | 990 | 891 | 2,696 | 2,928 |
1) During the three and nine months ended September 30, 2010 and 2009, includes realized gains from the disposal of subsidiaries of € 74 mn (2009: € 1 mn) and € 90 mn (2009: € 3 mn) respectively.
2) During the three and nine months ended September 30, 2010 and 2009, includes realized losses from the disposal of subsidiaries of € — mn (2009: € — mn) and € 4 mn (2009: € — mn) respectively.
| Three months ended September 30, | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | |
| € mn | € mn | € mn | € mn | € mn | € mn | |
| Property-Casualty | ||||||
| Fees from credit and assistance business | 163 | (1) | 162 | 151 | 1 | 152 |
| Service agreements | 100 | (12) | 88 | 100 | (14) | 86 |
| Investment advisory | — | — | — | (6) | — | (6) |
| Subtotal | 263 | (13) | 250 | 245 | (13) | 232 |
| Life/Health | ||||||
| Service agreements | 27 | (8) | 19 | 22 | (7) | 15 |
| Investment advisory | 102 | (8) | 94 | 92 | (6) | 86 |
| Other | — | — | — | 1 | (1) | — |
| Subtotal | 129 | (16) | 113 | 115 | (14) | 101 |
| Asset Management | ||||||
| Management fees | 1,305 | (25) | 1,280 | 926 | (28) | 898 |
| Loading and exit fees | 98 | — | 98 | 73 | — | 73 |
| Performance fees | 73 | (3) | 70 | 84 | — | 84 |
| Other | 47 | (3) | 44 | 11 | — | 11 |
| Subtotal | 1,523 | (31) | 1,492 | 1,094 | (28) | 1,066 |
| Corporate and Other | ||||||
| Service agreements | 45 | (4) | 41 | 51 | (8) | 43 |
| Investment advisory and Banking activities | 141 | (76) | 65 | 139 | (48) | 91 |
| Subtotal | 186 | (80) | 106 | 190 | (56) | 134 |
| Total | 2,101 | (140) | 1,961 | 1,644 | (111) | 1,533 |
| Nine months ended September 30, | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | |
| € mn | € mn | € mn | € mn | € mn | € mn | |
| Property-Casualty | ||||||
| Fees from credit and assistance business | 496 | (3) | 493 | 507 | — | 507 |
| Service agreements | 303 | (35) | 268 | 280 | (43) | 237 |
| Investment advisory | — | — | — | — | — | — |
| Subtotal | 799 | (38) | 761 | 787 | (43) | 744 |
| Life/Health | ||||||
| Service agreements | 69 | (19) | 50 | 66 | (22) | 44 |
| Investment advisory | 307 | (23) | 284 | 286 | (17) | 269 |
| Other | — | — | — | 4 | (4) | — |
| Subtotal | 376 | (42) | 334 | 356 | (43) | 313 |
| Asset Management | ||||||
| Management fees | 3,657 | (77) | 3,580 | 2,623 | (78) | 2,545 |
| Loading and exit fees | 278 | — | 278 | 198 | (1) | 197 |
| Performance fees | 289 | (3) | 286 | 118 | — | 118 |
| Other | 110 | (8) | 102 | 33 | — | 33 |
| Subtotal | 4,334 | (88) | 4,246 | 2,972 | (79) | 2,893 |
| Corporate and Other | ||||||
| Service agreements | 131 | (21) | 110 | 150 | (20) | 130 |
| Investment advisory and Banking activities | 411 | (191) | 220 | 357 | (142) | 215 |
| Subtotal | 542 | (212) | 330 | 507 | (162) | 345 |
| Total | 6,051 | (380) | 5,671 | 4,622 | (327) | 4,295 |
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Income from real estate held for own use | ||||
| Realized gains from disposals of real estate held for own use | 3 | — | 18 | 3 |
| Other income from real estate held for own use | 2 | (1) | 2 | 4 |
| Subtotal | 5 | (1) | 20 | 7 |
| Income from alternative investments | 13 | — | 54 | — |
| Other | 4 | 9 | 13 | 20 |
| Total | 22 | 8 | 87 | 27 |
| Three months ended September 30, |
Nine months ended September 30, |
|||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Income | ||||
| Sales and service revenues | 442 | 444 | 1,202 | 1,395 |
| Other operating revenues | 4 | 77 | 9 | 83 |
| Interest income | 1 | 1 | 2 | 2 |
| Subtotal | 447 | 522 | 1,213 | 1,480 |
| Expenses | ||||
| Cost of goods sold | (274) | (288) | (732) | (915) |
| Commissions | (28) | (30) | (86) | (95) |
| General and administrative expenses | (155) | (173) | (435) | (569) |
| Other operating expenses | (75) | (15) | (104) | (111) |
| Interest expenses | (22) | (24) | (65) | (70) |
| Subtotal | (554)1) | (530)1) | (1,422)1) | (1,760)1) |
| Total | (107)1) | (8)1) | (209)1) | (280)1) |
1) The presented subtotal for expenses and total income and expenses from fully consolidated private equity investments for the three and nine months ended September 30, 2010, 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 € 59 mn (2009: € (26) mn) and € 109 mn (2009: € 89 mn) for the three and nine months ended September 30, 2010, 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.
| Three months ended September 30, | Property Casualty |
Life/Health | Consolidation | Group |
|---|---|---|---|---|
| € mn | € mn | € mn | € mn | |
| 2010 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (7,010) | (4,349) | 5 | (11,354) |
| Change in loss and loss adjustment expenses | (623) | (68) | (1) | (692) |
| Subtotal | (7,633) | (4,417) | 4 | (12,046) |
| Ceded | ||||
| Claims and insurance benefits paid | 619 | 93 | (5) | 707 |
| Change in loss and loss adjustment expenses | (32) | 17 | 1 | (14) |
| Subtotal | 587 | 110 | (4) | 693 |
| Net | ||||
| Claims and insurance benefits paid | (6,391) | (4,256) | — | (10,647) |
| Change in loss and loss adjustment expenses | (655) | (51) | — | (706) |
| Total | (7,046) | (4,307) | — | (11,353) |
| 2009 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (6,880) | (4,480) | 5 | (11,355) |
| Change in loss and loss adjustment expenses | (537) | (43) | (2) | (582) |
| Subtotal | (7,417) | (4,523) | 3 | (11,937) |
| Ceded | ||||
| Claims and insurance benefits paid | 545 | 121 | (5) | 661 |
| Change in loss and loss adjustment expenses | 26 | 3 | 2 | 31 |
| Subtotal | 571 | 124 | (3) | 692 |
| Net | ||||
| Claims and insurance benefits paid | (6,335) | (4,359) | — | (10,694) |
| Change in loss and loss adjustment expenses | (511) | (40) | — | (551) |
| Total | (6,846) | (4,399) | — | (11,245) |
| Nine months ended September 30, | Property Casualty |
Life/Health | Consolidation | Group |
|---|---|---|---|---|
| € mn | € mn | € mn | € mn | |
| 2010 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (21,377) | (13,788) | 9 | (35,156) |
| Change in loss and loss adjustment expenses | (336) | (172) | (2) | (510) |
| Subtotal | (21,713) | (13,960) | 7 | (35,666) |
| Ceded | ||||
| Claims and insurance benefits paid | 1,791 | 327 | (9) | 2,109 |
| Change in loss and loss adjustment expenses | (591) | 30 | 2 | (559) |
| Subtotal | 1,200 | 357 | (7) | 1,550 |
| Net | ||||
| Claims and insurance benefits paid | (19,586) | (13,461) | — | (33,047) |
| Change in loss and loss adjustment expenses | (927) | (142) | — | (1,069) |
| Total | (20,513) | (13,603) | — | (34,116) |
| 2009 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (21,577) | (14,210) | 13 | (35,774) |
| Change in loss and loss adjustment expenses | 142 | (175) | (1) | (34) |
| Subtotal | (21,435) | (14,385) | 12 | (35,808) |
| Ceded | ||||
| Claims and insurance benefits paid | 1,938 | 355 | (13) | 2,280 |
| Change in loss and loss adjustment expenses | (590) | (12) | 1 | (601) |
| Subtotal | 1,348 | 343 | (12) | 1,679 |
| Net | ||||
| Claims and insurance benefits paid | (19,639) | (13,855) | — | (33,494) |
| Change in loss and loss adjustment expenses | (448) | (187) | — | (635) |
| Total | (20,087) | (14,042) | — | (34,129) |
| Three months ended September 30, | Property | Life/Health | Consolidation | Group |
|---|---|---|---|---|
| Casualty € mn |
€ mn | € mn | € mn | |
| 2010 | ||||
| Gross | ||||
| Aggregate policy reserves | (53) | (2,124) | (1) | (2,178) |
| Other insurance reserves | (2) | (70) | — | (72) |
| Expenses for premium refunds | (34) | (1,517) | (123) | (1,674) |
| Subtotal | (89) | (3,711) | (124) | (3,924) |
| Ceded | ||||
| Aggregate policy reserves | 18 | 26 | 1 | 45 |
| Other insurance reserves | (1) | 2 | — | 1 |
| Expenses for premium refunds | 1 | 10 | — | 11 |
| Subtotal | 18 | 38 | 1 | 57 |
| Net | ||||
| Aggregate policy reserves | (35) | (2,098) | — | (2,133) |
| Other insurance reserves | (3) | (68) | — | (71) |
| Expenses for premium refunds | (33) | (1,507) | (123) | (1,663) |
| Total | (71) | (3,673) | (123) | (3,867) |
| 2009 | ||||
| Gross | ||||
| Aggregate policy reserves | (80) | (1,309) | (1) | (1,390) |
| Other insurance reserves | — | (25) | — | (25) |
| Expenses for premium refunds | (53) | (1,362) | 17 | (1,398) |
| Subtotal | (133) | (2,696) | 16 | (2,813) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 32 | — | 33 |
| Other insurance reserves | — | 1 | — | 1 |
| Expenses for premium refunds | 2 | 1 | — | 3 |
| Subtotal | 3 | 34 | — | 37 |
| Net | ||||
| Aggregate policy reserves | (79) | (1,277) | (1) | (1,357) |
| Other insurance reserves | — | (24) | — | (24) |
| Expenses for premium refunds | (51) | (1,361) | 17 | (1,395) |
| Total | (130) | (2,662) | 16 | (2,776) |
| Nine months ended September 30, | Property | Life/Health | Consolidation | Group |
|---|---|---|---|---|
| Casualty € mn |
€ mn | € mn | € mn | |
| 2010 | ||||
| Gross | ||||
| Aggregate policy reserves | (165) | (5,954) | — | (6,119) |
| Other insurance reserves | (6) | (224) | — | (230) |
| Expenses for premium refunds | (95) | (4,035) | (188) | (4,318) |
| Subtotal | (266) | (10,213) | (188) | (10,667) |
| Ceded | ||||
| Aggregate policy reserves | 24 | 11 | — | 35 |
| Other insurance reserves | (2) | 9 | — | 7 |
| Expenses for premium refunds | — | 15 | — | 15 |
| Subtotal | 22 | 35 | — | 57 |
| Net | ||||
| Aggregate policy reserves | (141) | (5,943) | — | (6,084) |
| Other insurance reserves | (8) | (215) | — | (223) |
| Expenses for premium refunds | (95) | (4,020) | (188) | (4,303) |
| Total | (244) | (10,178) | (188) | (10,610) |
| 2009 | ||||
| Gross | ||||
| Aggregate policy reserves | (154) | (3,002) | — | (3,156) |
| Other insurance reserves | (1) | (45) | — | (46) |
| Expenses for premium refunds | (107) | (2,756) | (124) | (2,987) |
| Subtotal | (262) | (5,803) | (124) | (6,189) |
| Ceded | ||||
| Aggregate policy reserves | 5 | 56 | — | 61 |
| Other insurance reserves | — | 4 | — | 4 |
| Expenses for premium refunds | 2 | (1) | — | 1 |
| Subtotal | 7 | 59 | — | 66 |
| Net | ||||
| Aggregate policy reserves | (149) | (2,946) | — | (3,095) |
| Other insurance reserves | (1) | (41) | — | (42) |
| Expenses for premium refunds | (105) | (2,757) | (124) | (2,986) |
| Total | (255) | (5,744) | (124) | (6,123) |
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Liabilities to banks and customers | (90) | (110) | (279) | (368) | |
| Deposits retained on reinsurance ceded | (17) | (19) | (53) | (54) | |
| Certificated liabilities | (78) | (78) | (230) | (218) | |
| Participation certificates and subordinated liabilities | (141) | (136) | (419) | (415) | |
| Other | (20) | (22) | (75) | (65) | |
| Total | (346) | (365) | (1,056) | (1,120) |
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Additions to allowances including direct impairments | (33) | (31) | (89) | (103) |
| Amounts released | 17 | 9 | 42 | 28 |
| Recoveries on loans previously impaired | 4 | 4 | 14 | 18 |
| Total | (12) | (18) | (33) | (57) |
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Impairments | ||||
| Available-for-sale investments | ||||
| Equity securities | (68) | (106) | (379) | (2,213) |
| Debt securities | (6) | (26) | (133) | (209) |
| Subtotal | (74) | (132) | (512) | (2,422) |
| Investments in associates and joint ventures | — | — | — | (4) |
| Real estate held for investment | (11) | (164) | (30) | (177) |
| Loans and advances to banks and customers | (5) | — | (17) | — |
| Non-current assets and assets and liabilities of disposal groups classified as held for sale |
(7) | — | (41) | — |
| Subtotal | (97) | (296) | (600) | (2,603) |
| Reversals of impairments | ||||
| Available-for-sale investments | ||||
| Debt securities | 2 | 2 | 35 | 3 |
| Real estate held for investment | 25 | 12 | 27 | 13 |
| Loans and advances to banks and customers | 1 | — | 1 | — |
| Subtotal | 28 | 14 | 63 | 16 |
| Total | (69) | (282) | (537) | (2,587) |
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Investment management expenses | (105) | (103) | (315) | (294) |
| Depreciation of real estate held for investment | (34) | (44) | (126) | (131) |
| Other expenses for real estate held for investment | (38) | (48) | (128) | (123) |
| Total | (177) | (195) | (569) | (548) |
| Three months ended September 30, | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | |
| € mn | € mn | € mn | € mn | € mn | € mn | |
| Property-Casualty1) | ||||||
| Acquisition costs | ||||||
| Incurred | (2,148) | 1 | (2,147) | (1,862) | — | (1,862) |
| Commissions and profit received on reinsurance business ceded | 109 | (1) | 108 | 141 | (1) | 140 |
| Deferrals of acquisition costs | 940 | — | 940 | 1,142 | — | 1,142 |
| Amortization of deferred acquisition costs | (1,095) | — | (1,095) | (1,248) | — | (1,248) |
| Subtotal | (2,194) | — | (2,194) | (1,827) | (1) | (1,828) |
| Administrative expenses | (727) | (15) | (742) | (779) | (2) | (781) |
| Subtotal | (2,921) | (15) | (2,936) | (2,606) | (3) | (2,609) |
| Life/Health | ||||||
| Acquisition costs | ||||||
| Incurred | (1,027) | — | (1,027) | (901) | 1 | (900) |
| Commissions and profit received on reinsurance business ceded | 26 | (1) | 25 | 18 | — | 18 |
| Deferrals of acquisition costs | 729 | — | 729 | 511 | — | 511 |
| Amortization of deferred acquisition costs | (390) | — | (390) | (521) | — | (521) |
| Subtotal | (662) | (1) | (663) | (893) | 1 | (892) |
| Administrative expenses | (338) | (6) | (344) | (336) | (1) | (337) |
| Subtotal | (1,000) | (7) | (1,007) | (1,229) | — | (1,229) |
| Asset Management | ||||||
| Personnel expenses | (523) | — | (523) | (445) | — | (445) |
| Non-personnel expenses | (292) | 2 | (290) | (194) | 2 | (192) |
| Subtotal | (815) | 2 | (813) | (639) | 2 | (637) |
| Corporate and Other | ||||||
| Administrative expenses | (329) | 28 | (301) | (332) | (1) | (333) |
| Subtotal | (329) | 28 | (301) | (332) | (1) | (333) |
| Total | (5,065) | 8 | (5,057) | (4,806) | (2) | (4,808) |
1) The allocation of overhead expenses between functional areas in the business segment Property-Casualty was prospectively changed in 2010. The change led to a reclassification of € 197 mn from administrative expenses into acquisition costs.
| Nine months ended September 30, | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | |
| € mn | € mn | € mn | € mn | € mn | € mn | |
| Property-Casualty1) | ||||||
| Acquisition costs | ||||||
| Incurred | (6,731) | 1 | (6,730) | (5,957) | — | (5,957) |
| Commissions and profit received on reinsurance business ceded | 359 | (3) | 356 | 387 | (3) | 384 |
| Deferrals of acquisition costs | 3,738 | — | 3,738 | 3,752 | — | 3,752 |
| Amortization of deferred acquisition costs | (3,561) | — | (3,561) | (3,578) | — | (3,578) |
| Subtotal | (6,195) | (2) | (6,197) | (5,396) | (3) | (5,399) |
| Administrative expenses | (2,047) | (4) | (2,051) | (2,442) | 3 | (2,439) |
| Subtotal | (8,242) | (6) | (8,248) | (7,838) | — | (7,838) |
| Life/Health | ||||||
| Acquisition costs | ||||||
| Incurred | (3,128) | 2 | (3,126) | (2,756) | 3 | (2,753) |
| Commissions and profit received on reinsurance business ceded | 73 | (1) | 72 | 56 | (1) | 55 |
| Deferrals of acquisition costs | 2,220 | — | 2,220 | 1,616 | — | 1,616 |
| Amortization of deferred acquisition costs | (1,543) | 1 | (1,542) | (1,888) | — | (1,888) |
| Subtotal | (2,378) | 2 | (2,376) | (2,972) | 2 | (2,970) |
| Administrative expenses | (1,072) | 24 | (1,048) | (1,083) | 6 | (1,077) |
| Subtotal | (3,450) | 26 | (3,424) | (4,055) | 8 | (4,047) |
| Asset Management | ||||||
| Personnel expenses | (1,685) | — | (1,685) | (1,168) | — | (1,168) |
| Non-personnel expenses | (762) | — | (762) | (565) | 6 | (559) |
| Subtotal | (2,447) | — | (2,447) | (1,733) | 6 | (1,727) |
| Corporate and Other | ||||||
| Administrative expenses | (953) | 11 | (942) | (994) | 11 | (983) |
| Subtotal | (953) | 11 | (942) | (994) | 11 | (983) |
| Total | (15,092) | 31 | (15,061) | (14,620) | 25 | (14,595) |
1) The allocation of overhead expenses between functional areas in the business segment Property-Casualty was prospectively changed in 2010. The change led to a reclassification of € 578 mn from administrative expenses into acquisition costs.
| Three months ended September 30, | 2010 | 2009 | |||||
|---|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | ||
| € mn | € mn | € mn | € mn | € mn | € mn | ||
| Property-Casualty | |||||||
| Fees from credit and assistance business | (152) | — | (152) | (116) | — | (116) | |
| Service agreements | (99) | 11 | (88) | (113) | 17 | (96) | |
| Subtotal | (251) | 11 | (240) | (229) | 17 | (212) | |
| Life/Health | |||||||
| Service agreements | (18) | 4 | (14) | (15) | 7 | (8) | |
| Investment advisory | (49) | 2 | (47) | (45) | 5 | (40) | |
| Subtotal | (67) | 6 | (61) | (60) | 12 | (48) | |
| Asset Management | |||||||
| Commissions | (281) | 45 | (236) | (224) | 30 | (194) | |
| Other | (7) | 3 | (4) | (4) | 1 | (3) | |
| Subtotal | (288) | 48 | (240) | (228) | 31 | (197) | |
| Corporate and Other | |||||||
| Service agreements | (48) | 4 | (44) | (58) | 5 | (53) | |
| Investment advisory and Banking activities | (51) | — | (51) | (52) | — | (52) | |
| Subtotal | (99) | 4 | (95) | (110) | 5 | (105) | |
| Total | (705) | 69 | (636) | (627) | 65 | (562) |
| Nine months ended September 30, | 2010 | 2009 | |||||
|---|---|---|---|---|---|---|---|
| Segment | Consoli dation |
Group | Segment | Consoli dation |
Group | ||
| € mn | € mn | € mn | € mn | € mn | € mn | ||
| Property-Casualty | |||||||
| Fees from credit and assistance business | (456) | — | (456) | (382) | — | (382) | |
| Service agreements | (296) | 34 | (262) | (310) | 44 | (266) | |
| Subtotal | (752) | 34 | (718) | (692) | 44 | (648) | |
| Life/Health | |||||||
| Service agreements | (36) | 8 | (28) | (38) | 16 | (22) | |
| Investment advisory | (148) | 4 | (144) | (138) | 7 | (131) | |
| Subtotal | (184) | 12 | (172) | (176) | 23 | (153) | |
| Asset Management | |||||||
| Commissions | (798) | 129 | (669) | (630) | 93 | (537) | |
| Other | (16) | 5 | (11) | (15) | 2 | (13) | |
| Subtotal | (814) | 134 | (680) | (645) | 95 | (550) | |
| Corporate and Other | |||||||
| Service agreements | (151) | 18 | (133) | (129) | 17 | (112) | |
| Investment advisory and Banking activities | (161) | — | (161) | (143) | 1 | (142) | |
| Subtotal | (312) | 18 | (294) | (272) | 18 | (254) | |
| Total | (2,062) | 198 | (1,864) | (1,785) | 180 | (1,605) |
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | ||
| € mn | € mn | € mn | € mn | ||
| Current income taxes | (382) | (479) | (1,432) | (1,146) | |
| Deferred income taxes | (282) | (48) | (168) | 197 | |
| Total | (664) | (527) | (1,600) | (949) |
For the three and nine months ended September 30, 2010 and 2009, the income taxes relating to components of other comprehensive income consist of the following:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Foreign currency translation adjustments | (14) | (21) | 32 | (22) |
| Available-for-sale investments | (579) | (1,193) | (1,228) | (1,481) |
| Cash flow hedges | (12) | (1) | (12) | 8 |
| Share of other comprehensive income of associates | — | (1) | (4) | — |
| Miscellaneous | (24) | — | (34) | 3 |
| Total | (629) | (1,216) | (1,246) | (1,492) |
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Net income (loss) from discontinued operations, net of income taxes | — | — | — | (395) |
On January 12, 2009, the Allianz Group completed the transfer of ownership of Dresdner Bank AG to Commerzbank AG. Accordingly, assets and liabilities of Dresdner Bank AG, that were classified as held for sale as of December 31, 2008, have been deconsolidated in the first quarter 2009. The loss from derecognition of discontinued operations amounts to € 395 mn and represents mainly the reclassification of components of other comprehensive income to net income.
Basic earnings per share are calculated by dividing net income (loss) attributable to shareholders by the weighted average number of common shares outstanding for the period.
| Three months ended September 30, | Nine months ended September 30, | ||||
|---|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
||
| Net income (loss) attributable to shareholders used to calculate basic earnings per share |
1,264 | 1,374 | 3,918 | 3,188 | |
| from continuing operations | 1,264 | 1,374 | 3,918 | 3,583 | |
| from discontinued operations | — | — | — | (395) | |
| Weighted average number of common shares outstanding | 451,248,014 | 449,550,621 | 451,226,109 | 450,749,255 | |
| Basic earnings per share (in €) | 2.80 | 3.06 | 8.68 | 7.07 | |
| from continuing operations | 2.80 | 3.06 | 8.68 | 7.94 | |
| from discontinued operations | — | — | — | (0.87) |
Diluted earnings per share are calculated by dividing net income (loss) 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 the assumed conversion of participation certificates issued by Allianz SE and share-based compensation plans into Allianz shares.
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2010 € mn |
2009 € mn |
2010 € mn |
2009 € mn |
|
| Net income attributable to shareholders | 1,264 | 1,374 | 3,918 | 3,188 |
| Effect of potentially dilutive common shares | (6) | (1) | (18) | 1 |
| Net income (loss) used to calculate diluted earnings per share | 1,258 | 1,373 | 3,900 | 3,189 |
| from continuing operations | 1,258 | 1,373 | 3,900 | 3,584 |
| from discontinued operations | — | — | — | (395) |
| Weighted average number of common shares outstanding | 451,248,014 | 449,550,621 | 451,226,109 | 450,749,255 |
| Potentially dilutive common shares resulting from assumed conversion of: | ||||
| Participation certificates | — | — | — | 974,246 |
| Share-based compensation plans | 1,005,133 | — | 1,115,128 | 857,359 |
| Subtotal | 1,005,133 | — | 1,115,128 | 1,831,605 |
| Weighted average number of common shares outstanding after assumed conversion |
452,253,147 | 449,550,621 | 452,341,237 | 452,580,860 |
| Diluted earnings per share (in €) | 2.78 | 3.05 | 8.62 | 7.05 |
| from continuing operations | 2.78 | 3.05 | 8.62 | 7.92 |
| from discontinued operations | — | — | — | (0.87) |
For the nine months ended September 30, 2010, the weighted average number of common shares excludes 2,673,891 (2009: 2,300,745) treasury shares.
In January 2009, certain USD denominated CDOs with a fair value of € 1.1 bn (notional amount of € 2.2 bn) were retained from Dresdner Bank. On January 31, 2009, subsequent to the derecognition of Dresdner Bank, the CDOs were reclassified from financial assets held for trading to loans and advances to banks and customers in accordance with IAS 39. The fair value of € 1.1 bn became the new carrying amount of the CDOs at the reclassification date. The expected recoverable cash flows as of the date of reclassification were € 1.8 bn, leading to an effective interest rate of approximately 7%.
During mid-2009, the CDOs were transferred to one of the Allianz Group's USD functional currency subsidiaries. As of December 31, 2009, the carrying amount and fair value of the CDOs was € 863 mn and € 856 mn, respectively. As of September 30, 2010, the carrying amount and fair value of the CDOs is € 816 mn and € 844 mn, respectively. In the first nine months of 2010, the changes in carrying amount and fair value were primarily impacted by cash receipts and the appreciation of the USD; foreign currency effects were recognized in other comprehensive income. The net profit related to the CDOs was not significant.
| Nine months ended September 30, | 2010 | 2009 |
|---|---|---|
| € mn | € mn | |
| Income taxes paid | (911) | (466) |
| Dividends received | 807 | 758 |
| Interest received | 13,217 | 12,157 |
| Interest paid | (1,173) | (1,162) |
| Significant non-cash transactions | ||
| Effects from deconsolidation of Dresdner Bank |
||
| Commerzbank shares | ||
| Available-for-sale investments | — | 746 |
| Assets of disposal groups classified as held for sale |
— | (746) |
| Distribution channel | ||
| Intangible assets | — | 480 |
| Assets of disposal groups classified as held for sale |
— | (480) |
| Cominvest | ||
| Available-for-sale investments | — | 179 |
| Loans and advances to banks and customers |
— | 7 |
| Deferred tax assets | — | 14 |
| Intangible assets | — | 691 |
| Property and equipment | — | 3 |
| Other assets | — | 39 |
| Assets of disposal groups classified | ||
| as held for sale | — | (933) |
| Liabilities to banks and customers | — | 1 |
| Deferred tax liabilities | — | (72) |
| Certificated liabilities, participation certificates and subordinated |
||
| liabilities | — | (57) |
| Other liabilities | — | (148) |
| Non-controlling interests | — | (5) |
| Liabilities of disposal groups classified as held for sale |
— | 281 |
| As of September 30, 2010 |
As of December 31, 2009 |
|
|---|---|---|
| Germany | 48,233 | 49,051 |
| Other countries | 103,125 | 104,152 |
| Total | 151,358 | 153,203 |
In October 2010, the Allianz Group sold 0.3 bn ICBC shares with a capital gain of approximately € 0.1 bn.
On October 25, 2010, an earthquake and a following tsunami devastated the Pagai Islands in Indonesia. Based on current information, gross claims are expected to be less than € 20 mn.
The pension age in France has increased from 60 to 62. Management currently does not believe that this will affect the Allianz Group severely.
On November 1, 2010, the sale of Alba, Phenix and Phenix Vie to Helvetia Group was completed.
Munich, November 9, 2010
Allianz SE The Board of Management
We have reviewed the condensed consolidated interim financial statements of the 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 the Allianz SE, Munich, for the period from January 1 to September 30, 2010 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 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 aspects, 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 aspects, 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, November 10, 2010
KPMG AG Wirtschaftsprüfungsgesellschaft
Dr. Frank Ellenbürger Johannes Pastor Wirtschaftsprüfer Wirtschaftsprüfer
(Independent Auditor) (Independent Auditor)
| February 24, 2011 | Financial press conference for the financial year 2010 |
|---|---|
| February 25, 2011 | Analysts' conference for the financial year 2010 |
| March 18, 2011 | Annual Report 2010 |
| May 4, 2011 | Annual General Meeting |
| May 12, 2011 | Interim Report 1st quarter 2011 |
| August 5, 2011 | Interim Report 2nd quarter 2011 |
| November 11, 2011 | Interim Report 3rd quarter 2011 |
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 of quarterly and fiscal year results ahead of the dates mentioned above.
As we can never rule out changes of dates, we recommend checking them on the Internet at: www.allianz.com/financialcalendar
Allianz SE Koeniginstrasse 28 80802 Muenchen Germany
Telephone +49 89 38 00 0 Fax +49 89 38 00 3425
[email protected] www.allianz.com
Interim Report on the Internet www.allianz.com/interim-report
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