Interim / Quarterly Report • Aug 5, 2016
Interim / Quarterly Report
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26 Notes to the Condensed Consolidated Interim Financial Statements
The condensed consolidated interim financial statements are presented in millions of Euros (€ MN) unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
For further information on the definition of our Alternative Performance Measures and their components, as well as the basis of calculation adopted, please refer to www.allianz.com/en/ investor_relations/results-reports/results.
Following the change in the E.U. Transparency Directive, Allianz Group adjusted its reporting. As the First Quarter and Third Quarter Interim Reports have been discontinued as from 2016, this Interim Report for the First Half-Year of 2016 no longer contains quarterly information. Also, we have taken this opportunity to enhance transparency, streamline our disclosures, and remove redundancies wherever possible. In general this Interim Report should be read in conjunction with our Annual Report 2015, which includes a detailed analysis of our operations and activities.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Total revenues2 | 64,759 | 67,939 | (3,179) |
| Operating profit3 | 5,109 | 5,697 | (588) |
| Net income3 | 3,479 | 4,048 | (570) |
| thereof: attributable to shareholders | 3,284 | 3,839 | (555) |
| Solvency II capitalization ratio4, 5 in % |
186 | 200 | (14)%-p |
| Return on equity6 in % | 12.0 | 12.5 | (0.5)%-p |
| Earnings per share in € | 7.22 | 8.45 | (1.23) |
| Diluted earnings per share in € | 7.04 | 8.45 | (1.40) |
Overall, global economic activity continued to trend moderately upwards in the first half of 2016. Most industrialized countries registered fairly solid growth. Following only subdued growth in the first quarter of 2016, the U.S. economy firmed up somewhat in the second quarter. The economic recovery in the Eurozone continued, benefiting from low oil prices and the relatively low valuation of the Euro. By contrast, major emerging markets provided a rather mixed picture. Brazil remained caught in a severe recession, while in Russia the economic situation stabilized somewhat following the sharp contraction in 2015. In China, economic growth continued to decelerate.
Financial markets experienced two major episodes of considerably increased volatility in the first half of 2016. At the beginning of the year, fears that the Chinese economy might slow down faster than expected and that the Yuan could depreciate considerably prompted some turmoil on the equity markets. In late June, the Brexit vote sent shock waves around the global financial markets.
In March, the European Central Bank eased its monetary policy stance further with a bundle of measures, in particular an extension of its bond purchasing program and a further lowering of its key interest rate to 0.0% and of its deposit rate to (0.4)%. Yields on 10-year German government bonds declined significantly and closed the second quarter at (0.1)%, 70 basis points lower than at the beginning of the year. Spreads on government bonds in most of the Eurozone periphery countries tightened. U.S. bond yields declined as investors shifted their portfolios away from low-yielding non-U.S. sovereign debt. The performance of major stock market indices was mixed, with gains in the United States and emerging markets and losses in Europe and Japan. The Euro moved more or less sideways against the U.S. Dollar in the first half of 2016. The U.S. Dollar to Euro exchange rate was 1.11 at the end of the second quarter (end of 2015: 1.09).
From an insurance industry point of view, the macro environment was challenging: Organic growth remained subdued, financial markets volatile and yields suppressed. Furthermore, earnings were depressed by increased catastrophe losses: Insured losses were a third higher than last year, due to earthquakes in Japan and Ecuador, wildfires in Canada, and heavy storms in the United States and Europe. Then came the Brexit vote. Although operational implications are expected to remain limited, the industry was hit by secondorder effects such as plunging yields. As a result, liability matching has become even harder. The industry continues to diversify its investments, for example into infrastructure.
Our total revenues declined by 4.7% compared to the first half-year of 2015. On an internal basis7, revenues dropped by 2.5%. This was largely due to our Life/Health business segment recording a reduction in unit-linked single premiums business in Italy and Taiwan as well as a decrease in our traditional business. Furthermore, our other net fee and commission income in our Asset Management business segment decreased – mainly driven by third-party net outflows. Internal premium growth in particular for Turkey, Germany and AGCS, in our Property-Casualty business segment, had a partly offsetting effect.
Overall, our operating investment result decreased by € 1,895 MN to € 12,174 MN. Operating realized gains/losses (net) decreased from a relatively high level, as the previous half-year figure had benefited from higher realizations in order to manage duration and the overall asset allocation. In addition, we recorded higher impairments on equities which resulted from the downturn of some of the major equity markets in the first half of 2016.
We recorded a decrease in operating profit this reporting period, primarily due to a lower underwriting result and operating investment income in our Property-Casualty business segment. In addition, the first half-year of 2015 included a € 0.2 BN net gain from the sale of the Fireman's Fund personal insurance business. Another contributing factor was the decline in average third-party assets under management in our Asset Management business segment. Our Life/Health business segment also reported a slightly lower operating profit, which is largely attributable to the traditional variable annuity business in the United States and lower unit-linked performance fees in Italy. Our Corporate and Other business segment's operating result remained stable.
1 For further information on Allianz Group figures, please refer to note 4 to the 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 and net income as key financial indicators to assess the performance of its business segments and of the Group as a whole.
4 2015 figures as of 31 December 2015, 2016 figures as of 30 June 2016.
5 Changed regulatory tax treatment of German life sector reduced year-end Solvency II capitalization ratio from 200% to 196% on 1 January 2016.
6 Represents the annualized ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized gains/losses on bonds, net of shadow DAC, at beginning of the period and at end of the period. Annualized figures are not a forecast for full year numbers. For 2015, the return on equity for the full year is shown.
7 Internal total revenue growth excludes the effects of foreign-currency translation as well as acquisitions and disposals. Please refer to page 16 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of our business segments and for the Allianz Group as a whole. Internal revenue growth on business segment level will be explained in the following chapters.
Our non-operating result decreased by € 371 MN to a loss of € 295 MN. This was largely caused by an impairment loss1 on our South Korean Life/Health business upon its classification as held for sale in the second quarter of 2016. Moreover, the negative result of that business for the second quarter of 2016 was considered as non-operating as it is no longer seen as part of the ongoing core operations of the Allianz Group.
Income taxes were down by € 390 MN to € 1,335 MN, mainly driven by higher tax-exempt income compared to the first six months of 2015. The effective tax rate decreased to 27.7% (6M 2015: 29.9%).
Our net income went down, largely due to our lower operating performance and weaker non-operating result. An improved effective tax rate had a partly offsetting effect.
Our shareholders' equity rose by € 4.6 bn to € 67.7 bn, compared to 31 December 2015. Over the same period our Solvency II capitalization ratio weakened from 200%2 to 186%.
A more detailed description of the results generated by our business segments – specifically, Property-Casualty insurance operations, Life/Health insurance operations, Asset Management, and Corporate and Other – can be found in the respective chapters on the following pages.
In our Annual Report 2015, we described our opportunity and risk profile and addressed potential risks that could adversely affect both our business and our risk profile. The statements contained in that report remain materially unchanged. For the reporting period covered in this present report, there are some additional points to be mentioned with respect to potential risks and opportunities from political or financial market developments:
Consequently, we continue to monitor developments in order to be able to react in a timely and appropriate manner. For further information, please refer to the Outlook starting on page 12.
For information on events after the balance sheet date, please refer to note 34 to the condensed consolidated interim financial statements.
The organizational structure described in our Annual Report 2015 remains materially unchanged. Some minor reallocations between the reportable segments have been made.
The Allianz Group's strategy is described in the Strategy and Steering chapter in our Annual Report 2015. There have been no material changes to our Group strategy.
For an overview of the products and services offered by the Allianz Group as well as of sales channels, please refer to the Business Operations and Markets chapter in our Annual Report 2015. Information on our brand can also be found in the Progress in Sustainable Development chapter in our Annual Report 2015.
The Allianz Group operates and manages its activities through four business segments, which have all been mentioned above. For further information, please refer to note 4 to the condensed consolidated interim financial statements or to the Business Operations and Markets chapter in our Annual Report 2015.
1 For further information on the impairment loss of our Life/Health business in South Korea, please refer to note 3 to the condensed consolidated interim financial statements.
2 Changed regulatory tax treatment of German life sector reduced year-end Solvency II capitalization ratio from 200% to 196% on 1 January 2016.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Gross premiums written | 28,856 | 29,182 | (326) |
| Operating profit | 2,539 | 3,030 | (491) |
| Net income | 1,922 | 2,266 | (344) |
| Loss ratio2 in % | 66.4 | 66.1 | 0.4%-p |
| Expense ratio3 in % | 28.4 | 28.0 | 0.5%-p |
| Combined ratio4 in % | 94.9 | 94.1 | 0.8%-p |
On a nominal basis, we recorded a decrease in gross premiums written compared to the first six months of the previous year.
Unfavorable foreign-currency translation effects amounted to € 795 mN, mainly resulting from the depreciation of the Argentine Peso, the British Pound, and the Turkish Lira against the Euro.6
Consolidation/deconsolidation effects were negative at € 433 mN, largely due to the sale of the Fireman's Fund personal insurance business to ACE Limited and the transfer of a health insurance portfolio in Russia to our Life/Health segment.
On an internal basis, our growth was strong at 3.1%, driven by a positive volume effect of 2.2% and a positive price effect of 0.9%.
The following operations contributed positively to internal growth:
Turkey: Gross premiums grew to € 849 mN – an increase of 54.2% on an internal basis. This resulted from positive price and volume effects in our motor third-party liability insurance business.
Germany: Gross premiums amounted to € 6,142 mN. The internal growth of 2.8% was mainly due to positive price effects in our motor insurance business.
AGCS: Gross premiums stood at € 4,247 mN – up 3.9% on an internal basis. This was driven by positive volume effects at Allianz Risk Transfer, which were partly offset by negative price effects in our energy and aviation lines of business.
The following operations contributed negatively to internal growth:
Italy: Gross premiums went down to € 2,268 mN – a decrease of 4.7% on an internal basis. This was mainly due to negative price and volume effects in our motor business.
United Kingdom: Gross premiums decreased to € 1,410 mN. The internal decrease of 3.7 % largely resulted from negative volume effects in our motor retail business. Positive price developments in our pet insurance business had slightly offsetting effects.
Credit Insurance: Gross premiums amounted to € 1,175 mN. The decline of 2.5% on an internal basis resulted from unfavorable price and volume effects.
Operating Profit
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Underwriting result | 1,045 | 1,249 | (204) |
| Operating investment income (net) | 1,473 | 1,649 | (176) |
| Other result1 | 21 | 132 | (111) |
| Operating profit | 2,539 | 3,030 | (491) |
1 Consists of fee and commission income/expenses, other income/expenses, and restructuring charges.
The operating profit decrease was driven by all profit sources. After a benign natural catastrophe environment in the first quarter of the current year, the underwriting result suffered from higher claims from natural catastrophe events and higher large losses in the second quarter. Furthermore, the first half-year 2015 included a € 0.2 BN net gain from the sale of the Fireman's Fund personal insurance business to ACE Limited, which was partially offset by the related restructuring charges of € 0.1 BN. Our operating investment income (net) worsened, compared to the same period of the prior year.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Premiums earned (net) | 22,823 | 23,072 | (249) |
| Accident year claims | (16,302) | (16,004) | (298) |
| Previous year claims (run-off) | 1,141 | 761 | 380 |
| Claims and insurance benefits incurred (net) | (15,162) | (15,243) | 81 |
| Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation |
(6,492) | (6,456) | (35) |
| Change in reserves for insurance and investment contracts (net) (without expenses for premium refunds)1 |
(124) | (123) | (1) |
| Underwriting result | 1,045 | 1,249 | (204) |
1 Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 25 to the condensed consolidated interim financial statements.
1 For further information on Allianz Property-Casualty figures, please refer to note 4 to the condensed consolidated interim financial statements.
Due to higher claims from natural catastrophe events, large losses, and expenses, which were only partially mitigated by a higher contribution from run-off, our underwriting result dropped and our combined ratio deteriorated.
Our accident year loss ratio1 stood at 71.4% – a deterioration of 2.1 percentage points, compared to the first half-year 2015. This was driven by an increase in losses from natural catastrophes from € 345 MN to € 522 MN, resulting in a higher impact on our combined ratio of 2.3 percentage points, compared to 1.5 percentage points in the same period of 2015.
Excluding losses from natural catastrophes, our accident year loss ratio worsened to 69.1%. This was mainly due to a higher impact from both large losses and numerous smaller weather-related events.
The following operations contributed negatively to the development of our accident year loss ratio:
AGCS: 0.6 percentage points. This was heavily driven by higher losses from natural catastrophes in North America and Europe. In addition, large losses were above last year's level.
France: 0.6 percentage points. This deterioration predominantly resulted from a combination of a higher impact from natural catastrophes including the floods in May, and higher large losses compared to the previous year.
Reinsurance: 0.5 percentage points. This was because of a higher impact from natural catastrophes, smaller and mid-sized weatherrelated events, and large losses.
Our run-off ratio increased by 1.7 percentage points compared to the first half-year of 2015, resulting in a higher run-off ratio amounting to 5.0%. This was driven by reserve releases across most of the portfolio, while 2015 included a negative impact of 0.6 percentage points from the strengthening of reserves for the former Fireman's Fund portfolio in the second quarter.
Total expenses amounted to € 6,492 MN in the first half-year of 2016 compared to € 6,456 MN in the same period of the previous year. The increase in our expense ratio was driven by both a worse administrative and a higher acquisition expense ratio.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Interest and similar income (net of interest expenses) |
1,688 | 1,828 | (141) |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(25) | 33 | (58) |
| Operating realized gains (net) | 157 | 138 | 19 |
| Operating impairments of investments (net) | (43) | (7) | (36) |
| Investment expenses | (175) | (176) | – |
| Expenses for premium refunds (net)2 | (129) | (168) | 39 |
| Operating investment income (net) | 1,473 | 1,649 | (176) |
1 The operating investment income (net) of our Property-Casualty business segment consists of the operating investment result – as shown in note 4 to the condensed consolidated interim financial statements – and expenses for premium refunds (net) (policyholder participation).
2 Refers to policyholder participation, mainly from APR (accident insurance with premium refunds) business, and consists of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 25 to the condensed consolidated interim financial statements.
1 Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned (net).
The decline in operating investment income (net) was mainly due to lower interest and similar income and an unfavorable foreign-currency translation result net of hedging.
Interest and similar income (net of interest expenses) decreased largely driven by debt securities due to reduced interest rates.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Fee and commission income | 759 | 715 | 44 |
| Other income | 1 | 227 | (226) |
| Fee and commission expenses | (706) | (680) | (26) |
| Other expenses | – | – | – |
| Restructuring charges | (33) | (130) | 97 |
| Other result | 21 | 132 | (111) |
In the first six months of 2015, we recorded a € 0.2 BN net gain from the sale of the Fireman's Fund personal insurance business, which is reported as other income.
Net income fell largely due to the decline in operating profit, partly offset by lower income taxes.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Statutory premiums | 32,968 | 35,540 | (2,572) |
| Operating profit2 | 1,936 | 1,957 | (20) |
| Net income | 995 | 1,401 | (406) |
| Return on equity3 in % | 8.0 | 10.8 | (2.8)%-p |
On a nominal basis, statutory premiums decreased by 7.2 %. This includes unfavorable foreign-currency translation effects of € 324 MN and positive (de-)consolidation effects of € 78 MN.
On an internal basis5, statutory premiums decreased by € 2,326 MN – or 6.5% – to € 33,286 MN, largely due to lower unit-linked single premiums in Italy and Taiwan, as well as to a decline in our traditional business. The increased fixed-indexed annuity sales in the United States partly compensated for this development. In line with our changed product strategy, premiums continued to shift towards capital-efficient products.
In the German life business, we recorded statutory premiums of € 8,923 MN. This increase of 0.8 % on an internal basis was due to growth in the business with capital-efficient products. It more than offset the decline in sales of traditional life products, which include long-term interest rate guarantees. Statutory premiums in the German health business went up to € 1,644 MN – a rise of 0.9% on an internal basis, largely resulting from the acquisition of new customers in the supplementary health care coverage.
In the United States, statutory premiums climbed to € 6,575 MN, representing a growth of 24.3% on an internal basis. We experienced higher fixed-indexed annuity sales mainly as a result of our marketing activities in the first quarter of 2016.
Statutory premiums in Italy amounted to € 5,141 MN, down 27.3% on an internal basis. This development was largely due to lower unitlinked single premium sales – as a result of higher financial market volatility – and a decrease in traditional life business.
1 For further information on Allianz Life/Health figures, please refer to note 4 to the condensed consolidated interim financial statements.
2 Following the classification of the South Korean business (assets and liabilities) as held for sale, the negative result of € 247 mn for the second quarter of 2016 was considered as non-operating.
3 Represents annualized ratio of net income to the average total equity, excluding unrealized gains/losses on bonds net of shadow DAC at the beginning of the period and at the end of period. Annualized figures are not a forecast for full year numbers. For 2015, the return on equity for the full year is shown.
4 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
5 Our comments in the following section on the development of our statutory gross premiums written refer to figures determined "on an internal basis", i.e. adjusted for foreign-currency translation and (de-) consolidation effects, in order to provide more comparable information.
In France, statutory premiums dropped to € 3,878 MN. This decrease, 5.3% on an internal basis, was mainly due to a decline in our individual life business.
In the Asia Pacific region, statutory premiums declined to € 2,349 MN, down 31.1% on an internal basis. This was largely driven by a decrease in sales of single premium unit-linked products, distributed via bancassurance in Taiwan.
Premiums earned (net) went down by € 706 MN to € 11,757 MN. The main reason was a decline in our business with traditional life products in Germany.
PVNBP fell by € 3,633 MN to € 29,713 MN, largely due to declining sales both in our traditional business with high guarantees and in our business with unit-linked insurance products without guarantees in Italy.
Present value of new business premiums (PVNBP) in % by lines of business1
| % | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Guaranteed savings&annuities | 29.3 | 37.1 | (7.9) |
| Protection&health | 16.0 | 13.4 | 2.6 |
| Unit-linked without guarantee | 19.4 | 25.7 | (6.3) |
| Capital-efficient products | 35.3 | 23.8 | 11.5 |
| Total | 100.0 | 100.0 | – |
1 Current and prior year figures are presented excluding effects from the South Korean business.
At the beginning of the second quarter of 2016, all requirements were fulfilled to present our South Korean business as held for sale. Consequently, the negative result of € 247 mn that the South Korean business generated in the second quarter of 2016 was considered as nonoperating, as the entity is no longer part of our ongoing core operations. In order to better reflect the true underlying drivers of our operating profit, we report it by profit sources and by lines of business for the first six months of both 2015 and 2016, excluding South Korea, and specify the South Korean operating loss as a separate item.
8 Current and prior year figures are presented excluding effects from the South Korean business.
6 PVNBP before non-controlling interests.
7 Prior year figures changed in order to reflect the roll out of profit source reporting to China and the inclusion of the capital-efficient products line of business.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Loadings and fees | 2,718 | 2,758 | (40) |
| Investment margin | 1,963 | 1,948 | 16 |
| Expenses | (3,299) | (3,173) | (126) |
| Technical margin | 449 | 538 | (89) |
| Impact of change in DAC | 187 | (22) | 209 |
| Operating loss - South Korea1 | (82) | (92) | 10 |
| Operating profit | 1,936 | 1,957 | (20) |
1 The 2016 figure represents the operating loss of the first quarter only, as the negative result for the second quarter of 2016 was considered as non-operating.
Our operating profit decreased slightly, mainly due to the traditional variable annuity business in the United States – which was impacted by the unfavorable interest rates movements – and lower unit-linked performance fees in Italy. A higher investment margin in Germany partly compensated for the negative development.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Loadings from premiums | 1,814 | 1,799 | 15 |
| Loadings from reserves | 550 | 562 | (12) |
| Unit-linked management fees | 354 | 397 | (43) |
| Loadings and fees | 2,718 | 2,758 | (40) |
| Loadings from premiums as % of statutory premiums |
5.6 | 5.2 | 0.4 |
| Loadings from reserves as % of average reserves2, 3 |
0.1 | 0.1 | – |
| Unit-linked management fees as % of average unit-linked reserves3, 4 |
0.3 | 0.3 | (0.1) |
1 Current and prior year figures are presented excluding effects from the South Korean business.
2 Aggregate policy reserves and unit-linked reserves.
3 Yields are pro rata. 4 Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Interest and similar income | 8,905 | 9,118 | (213) |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(474) | (687) | 213 |
| Operating realized gains/losses (net) | 3,112 | 4,045 | (932) |
| Interest expenses | (56) | (51) | (6) |
| Operating impairments of investments (net) | (934) | (195) | (739) |
| Investment expenses | (544) | (519) | (25) |
| Other2 | 65 | 172 | (107) |
| Technical interest | (4,358) | (4,363) | 6 |
| Policyholder participation | (3,754) | (5,572) | 1,818 |
| Investment margin | 1,963 | 1,948 | 16 |
| Investment margin3, 4 in basis points |
48 | 50 | (2) |
1 Current and prior year figures are presented excluding effects from the South Korean business.
2 Other comprises the delta of out-of-scope entities, which are added here with their respective operating profit and different line item definitions compared to the financial statements, such as interest paid on deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management fees.
3 Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy reserves.
4 Yields are pro rata.
Our investment margin rose slightly. This increase was largely driven by a lower policyholder participation compared to a high base in the first-half year of 2015. Lower realizations on equity investments, predominantly in Germany, France and Italy, and higher impairments on equities – mainly in the German life business – as a result of volatile equity markets, contributed negatively.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Acquisition expenses and commissions | (2,434) | (2,354) | (80) |
| Administrative and other expenses | (865) | (820) | (46) |
| Expenses | (3,299) | (3,173) | (126) |
| Acquisition expenses and commissions as % of PVNB P2 |
(8.2) | (7.1) | (1.1) |
| Administrative and other expenses as % of average reserves3, 4 |
(0.2) | (0.2) | – |
1 Current and prior year figures are presented excluding effects from the South Korean business.
2 PVNBP before non-controlling interests.
3 Aggregate policy reserves and unit-linked reserves. 4 Yields are pro rata.
Our acquisition expenses and commissions increased, mainly because a sales growth in the fixed-income annuity business in the United States drove up acquisition expenses.
1 Prior year figures changed in order to reflect the roll out of profit source reporting to China and the inclusion of the capital-efficient products line of business.
2 The purpose of the Life/Health operating profit sources analysis is to explain movements in IFRS results by analyzing underlying drivers of performance on a Life/Health business segment consolidated basis.
3 Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participation in expenses.
4 The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly for the German life business).
5 Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the technical margin) as well as administrative and other expenses.
Administrative and other expenses increased predominantly because of the German life and French businesses.
Our technical margin declined, driven by changes in the French individual health portfolio which resulted from amendments in local legislation. Additional reserving and an unfavorable disability result in Switzerland also contributed to this development.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Capitalization of DAC | 995 | 888 | 107 |
| Amortization, unlocking and true-up of DAC | (808) | (910) | 102 |
| Impact of change in DAC | 187 | (22) | 209 |
| 1 Current and prior year figures are presented excluding effects from the South Korean business. |
The impact of change in DAC turned positive. This was largely due to lower DAC amortization associated with our variable annuity business, and higher capitalization of DAC resulting from increased sales of fixed-indexed and non-traditional variable annuities in the United States.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Guaranteed savings&annuities | 1,102 | 1,055 | 47 |
| Protection&health | 304 | 422 | (118) |
| Unit-linked without guarantee | 172 | 219 | (47) |
| Capital-efficient products | 440 | 352 | 87 |
| Operating loss – South Korea1 | (82) | (92) | 10 |
| Operating profit | 1,936 | 1,957 | (20) |
1 The 2016 figure represents the operating loss of the first quarter only, as the negative result for the second quarter of 2016 was considered as non-operating.
The operating profit increase in our guaranteed savings&annuities line of business was largely driven by a higher investment margin in Germany. Operating profit in the protection&health line of business declined, mainly as a result of the French individual and the German health businesses. Operating profit in the unit-linked without guarantee line of business dropped, which was primarily due to a reduction of unit-linked performance fees in Italy. The rise in operating profit in the capital-efficient products line was mainly due to a higher spread margin in the United States.
From 2016 onwards, margin on reserves was replaced by return on equity to better reflect the internal steering of our Life/Health insurance operations.
The return on equity decreased by 2.8 percentage points to 8.0% in the first six months of 2016 consistent with the net income development.
Our net income decreased, largely due to the negative net impact of € 352 mn from our business in South Korea in the second quarter of 2016.
1 Technical margin comprises risk result (risk premiums less benefits in excess of reserves less policyholder participation), lapse result (surrender charges and commission clawbacks) and reinsurance result.
2 Impact of change in DAC includes effects of change in DAC, unearned revenue reserves (URR) and value of business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs and front-end loadings on operating profit and therefore deviates from the IFRS financial statements.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Operating revenues | 2,827 | 3,121 | (293) |
| Operating profit | 961 | 1,060 | (99) |
| Cost-income ratio2 in % | 66.0 | 66.0 | – |
| Net income | 615 | 658 | (43) |
| Total assets under management as of 30 June in € bn3 |
1,830 | 1,763 | 67 |
| thereof: Third-party assets under management as of 30 June in € bn3 |
1,307 | 1,276 | 31 |
| € BN | |||
|---|---|---|---|
| Type of asset class | as of 30 June 2016 |
as of 31 December 2015 |
Delta |
| Other1 | 57 | 51 | 6 |
| Multi-assets2 | 151 | 151 | – |
| Equities | 156 | 176 | (20) |
| Fixed income | 1,466 | 1,385 | 82 |
| Total | 1,830 | 1,763 | 67 |
1 Other is composed of other asset classes than equity, fixed income and multi-assets, e.g. money markets, commodities, real estate investment trusts, infrastructure investments, private equity investments, hedge funds, etc.
2 Multi-assets is a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as an investment. Multi-assets class investments increase the diversification of an overall portfolio by distributing investments throughout several asset classes.
Net outflows4 of total assets under management (AuM) amounted to € 27 bn in the first half of 2016. Third-party AuM net outflows of € 28 bn were largely attributable to PIMCO in the United States and Europe. However, Allianz Global Investors (AllianzGI) also recorded minor third-party AuM net outflows of € 0.1 bn in a difficult market environment.
Favorable effects from Market and Other5 amounting to € 79 bn were the main contributor to the increase in total AuM. This was driven by PIMCO where we recorded a plus of € 80 bn mainly in fixed income assets.
An upswing of total AuM of € 31 bn from consolidation, deconsolidation and other adjustments was driven by the acquisition of Rogge Global Partners (Rogge) by AllianzGI.
Mainly as a result of the slight appreciation of the Euro against the U.S. Dollar since the beginning of the year, we recorded unfavorable foreign-currency translation effects of € 15 bn.
As of 30 June 2016, the share of third-party AuM by business unit was 76.2% (31 December 2015: 77.3%) attributable to PIMCO and 23.8% (31 December 2015: 22.7%) attributable to AllianzGI.
The share of fixed income assets rose from 74.0% to 75.7%, compared to the beginning of the year, mainly due to market effects on fixed income assets and consolidation effects from the Rogge acquisition. The share of equities declined from 11.8% to 10.2%, primarily driven by third-party AuM net outflows and negative effects from equity markets. The shares of multi-assets and other were roughly stable at 10.2% and 3.9%, respectively, as of 30 June 2016.
The share of third-party assets between mutual funds and separate accounts6 changed in favor of separate accounts, compared to the end of 2015, with mutual funds at 57.4% (31 December 2015: 58.3%) and separate accounts at 42.6% (31 December 2015: 41.7%)
As for the regional allocation of third-party AuM7, shares were 55.0 % for America, 33.0 % for Europe and 12.0 % for the Asia-Pacific region (31 December 2015: 56.0%, 32.7% and 11.3%, respectively). They shifted in favor of the Asia-Pacific region, mainly due to positive foreign-currency translation effects at PIMCO in Japan. They also shifted – albeit to a lesser extent – in favor of Europe, especially because of the acquisition of Rogge by AllianzGI and market effects at PIMCO in the United Kingdom. The latter shift was only partially offset by thirdparty AuM net outflows and negative foreign-currency translation effects at PIMCO in the United Kingdom.
7 Based on the location of the asset management company.
5 Market and Other represents current income earned on, and changes in the fair value of, securities held in client accounts. It also includes dividends from net investment income and from net realized capital gains to investors of open ended mutual funds and of closed end funds.
6 Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany, vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several individual investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end funds. Separate accounts are investment vehicles where the money of a single investor is directly managed by the asset manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals, and corporates).
1 For further information on Allianz Asset Management figures, please refer to note 4 to the condensed consolidated interim financial statements.
2 Represents operating expenses divided by operating revenues.
3 2015 figure as of 31 December 2015.
4 Net flows represent the sum of new client assets, additional contributions from existing clients – including dividend reinvestment – withdrawals of assets from, and termination of, client accounts and distributions to investors. Reinvested dividends amounted to € 4 bn.
Underperforming third-party assets under management
1 Three-year rolling investment performance reflects the mandate-based and volume-weighted threeyear investment success of all third-party assets that are managed by Allianz Asset Management's portfolio-management units. For separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is compared with the investment success prior to cost deduction of the respective benchmark, based on various metrics. For some mutual funds, the investment success, reduced by fees, is compared with the investment success of the median of the respective Morningstar peer group (a position in the first and second quartile is equivalent to outperformance).
The overall three-year rolling investment performance of our Asset Management business decreased, with 63% of third-party assets outperforming their respective benchmarks (31 December 2015: 69 %). The decrease was mainly driven by PIMCO's rolling investment performance, which was impacted by strong quarters of 2013 rolling off and more challenging quarters of 2016 rolling in. 62% of PIMCO third-party assets outperformed their respective benchmarks. AllianzGI slightly decreased, with 68% of third-party assets outperforming their respective benchmarks.
The decrease in operating revenues of 9.4% on a nominal basis corresponds to a drop of 9.5% on an internal basis1.
The increase in performance fees can mostly be attributed to carried interest from a large private fund at PIMCO.
Other net fee and commission income decreased, mainly due to lower average third-party AuM that primarily resulted from outflows at PIMCO. A decreased third-party AuM-driven margin also contributed to this development, which occurred at both, PIMCO and AllianzGI. This was largely driven by outflows from higher-margin assets, primarily at PIMCO.
The decline of our operating profit on a nominal basis is in accordance with a decrease on an internal basis1 of 9.4%. This was mainly due to a decrease in other net fee and commission income, which was only partially compensated by lower administrative expenses.
Administrative expenses were considerably reduced, largely due to lower personnel expenses. The main reason was a 17.1 % drop in variable compensation, mainly reflecting reduced expenses associated with the Special Performance Award (SPA). The SPA was introduced in the fourth quarter of 2014 at PIMCO to secure performance and retain talent. Lower non-personnel expenses also contributed to the decrease of administrative expenses.
Our cost-income ratio was flat, as administrative expenses decreased in accordance with operating revenues. The SPA effect contributed 0.9 percentage points2 to our cost-income ratio.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2016 | 2015 | Delta |
| Performance fees | 127 | 111 | 15 |
| Other net fee and commission income1 | 2,702 | 3,015 | (313) |
| Other operating revenues | (1) | (5) | 4 |
| Operating revenues | 2,827 | 3,121 | (293) |
| Administrative expenses (net), excluding acquisition-related expenses |
(1,868) | (2,060) | 193 |
| Other operating expenses | 2 | – | 2 |
| Operating expenses | (1,866) | (2,060) | 195 |
| Operating profit | 961 | 1,060 | (99) |
| 1 Also referred to as AuM-driven revenues. |
Our net income decreased by 6.6%, mainly reflecting the drop in other net fee and commission income.
1 Operating revenues/operating profit adjusted for foreign-currency translation and (de-)consolidation effects.
2 Net of the impact on variable compensation.
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Operating revenues | 1,174 | 967 | 207 |
| Operating expenses | (1,497) | (1,297) | (199) |
| Operating result | (323) | (331) | 8 |
| Net income (loss) | (188) | (254) | 67 |
Key figures Reportable segments
| € mn six months ended 30 June |
2016 | 2015 | Delta |
|---|---|---|---|
| Holding & Treasury | |||
| Operating revenues | 544 | 302 | 242 |
| Operating expenses | (928) | (709) | (219) |
| Operating result | (384) | (407) | 23 |
| Banking | |||
| Operating revenues | 519 | 563 | (44) |
| Operating expenses | (483) | (506) | 22 |
| Operating result | 36 | 58 | (22) |
| Alternative Investments | |||
| Operating revenues | 111 | 101 | 11 |
| Operating expenses | (87) | (82) | (5) |
| Operating result | 24 | 19 | 6 |
Our operating result remained stable, as improvements in Holding&Treasury were offset by the decrease in Banking.
Our net loss improved due to a higher non-operating investment result and lower income taxes resulting from higher tax exempted income. To a large extent, these positive effects were offset by the absence of positive one-off effects from a pensions revaluation with our German subsidiaries.
In Holding&Treasury, the improvement of our operating result was mainly related to our internal IT service provider which had recorded higher strategic IT investment costs in the comparison period.
The operating profit decrease in Banking was predominantly driven by higher expenses for deposit protection funds and bank levies. Lower performance fees in Italy also contributed negatively. Furthermore, the low interest yield environment continued to put pressure on our interest margin in almost all Banking units. Our loan loss provisions remained unchanged.
In Alternative Investments, our operating profit increased as a result of higher fee and commission income and favorable currency effects.
1 Consolidation included. For further information about our Corporate and Other business segment, please refer to note 4 to the condensed consolidated interim financial statements.
As we move into the second half of 2016, the global economy remains on a moderate upward trend. As expected, emerging market economies are on track for somewhat higher growth this year. The reason for this is not a general growth acceleration across all emerging markets but rather a gradual stabilization in major emerging market economies, such as Russia, which had experienced a severe recession last year. In particular in Europe, the general uncertainty about future economic and financial market developments has increased considerably following the Brexit vote in late June. In a first reaction to the Brexit vote, we have slightly reduced this year's economic growth forecasts: for the Eurozone from 1.7% to 1.5% and for Germany from 2.2% to 1.8%. Our forecast for the United Kingdom has been cut significantly from 1.9% to almost 1.5%. In the United States, prospects for this year's growth have deteriorated, following only subdued growth in preceding quarters. Overall, we estimate global output to expand by 2.4% this year (previous forecast: 2.7%).
For the remainder of this year, financial markets will probably stand under the twin spell of monetary policy and further political developments such as the Brexit process. Uncertainties can also be triggered by the developments in Turkey and by the outcome of a referendum on constitutional amendments in Italy. On the monetary policy front, the Federal Reserve is likely to hike interest rates once before the end of this year. By contrast, the European Central Bank is expected to keep key interest rates at the current very low levels for the foreseeable future. We do not see any changes in the European Central Bank's unconventional measures before spring 2017. The Brexit vote has raised additional pressure on the European Central Bank to expand and/or to prolong its bond purchasing program.
In response to the European Central Bank's monetary policy steps in March as well as the Brexit vote in June, we have lowered our year-end forecast for yields on 10-year German government bonds to 0.3%. Expected higher inflation rates towards the year end will exert some upward pressure on European government benchmark bond yields. However, with short-term rates at zero, there are limited prospects of markedly higher yields on longer-term bonds. In the coming months we expect the Euro to move more or less sideways against the U.S. Dollar. We see the U.S. Dollar to Euro exchange rate standing at 1.10 by the end of 2016, only marginally below the second quarter's closing level of 1.11.
We confirm our outlook for premium growth in 2016. Despite the Brexit vote, the big picture has not changed materially, although the risks of ultra-low interest rates and volatile financial markets have been accentuated. Thus, we still expect modest premium growth in the property-casualty and the life sector, as the implications of the United Kingdom leaving the European Union are, at most, marginal for global premium growth.
In the property-casualty sector, growth in advanced markets should remain roughly stable, with the ongoing recovery supporting demand but pricing becoming a growing concern. The outlook for Emerging Markets will remain rather mixed, with Asia growing robustly but other regions – notably Latin America – showing signs of weakness. Overall, we continue to expect global premium revenue to rise between 4.0% and 5.0% in 2016 (in nominal terms, adjusted for foreign currency translation effects).
In the life sector, the overall picture is quite similar. Specifically, we expect sustained strong performance in emerging Asia and a more volatile environment in other emerging regions. As far as advanced markets are concerned, we anticipate only modest growth in Europe and North America but a fairly strong recovery in Oceania. All in all, we continue to expect global premium revenue to rise by 4.0% to 5.0% in 2016 (in nominal terms, adjusted for foreign currency translation effects).
Industry profitability will remain under pressure. The Brexit vote has made a bad situation worse by causing a further plunge in yields. Falling investment returns are the inevitable consequence. On top, a demanding pricing outlook, increased costs due to natural catastrophes, stricter regulation, and last but not least, the digital transformation are all ingredients in the cocktail of strategic and operational challenges weighing on overall profitability.
1 The Information presented in the sections "Economic outlook", "Insurance industry outlook" and "Asset management industry outlook" is based on our own estimates.
Markets were very volatile in the first half of 2016. Stock markets stumbled especially in the second quarter as a reaction to the Brexit vote, further lowering expectations for European and in particular U.K. equity. As a consequence, U.S. and European investors redeemed assets from equity funds in the course of the period. However, the implications of the Brexit may become even more visible in the second half of 2016.
Given the market environment, we expect that global economic and political divergence will continue to create uncertainty and volatility, which involves both risks and opportunities. In June, the U.S. Federal Reserve decided to keep interest rates unchanged, but signaled intentions to increase interest rates in the second half of the year. Bonds should remain attractive, if longer-term trends towards moderately higher interest rates continue, especially in the United States, and the global demographic trends remain unchanged. Bonds are particularly interesting for the growing number of retirees in developed countries who are looking for a stable stream of income, as well as for liability-driven investors.
After a difficult first half of 2016, we also see a challenging environment for the asset management industry for the rest of the year. In addition to market volatility, profitability in the industry remains under pressure from both continuous flows into passive products and rising distribution costs. Moreover, measures aimed at strengthening regulatory oversight and reporting could also affect profitability in the asset management sector. In order to continue growing, it is vital for asset managers to maintain sufficient business volumes, ensure efficient operations, and keep investment results above benchmark levels.
We are confident about staying on course during the rest of 2016, and confirm our published Allianz Group operating profit outlook for 2016 of € 10.5 bn, plus or minus € 0.5 bn.
As always, natural catastrophes and adverse developments in the capital markets, as well as factors stated in our cautionary note regarding forward-looking statements, may severely affect the results of our operations.
The statements contained herein may include prospects, statements of future expectations, and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance, or events may differ materially from those expressed or implied in such forward-looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events, including natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
| as of | ||
|---|---|---|
| 30 June 2016 |
as of 31 December 2015 |
Delta |
| 28,928 | 28,928 | – |
| 23,451 | 24,222 | (771) |
| (1,242) | (926) | (315) |
| 16,606 | 10,920 | 5,686 |
| 67,744 | 63,144 | 4,599 |
The increase in shareholders' equity was largely driven by higher unrealized gains, mainly on debt securities, which resulted from a further decrease in interest rates. To a lesser extent, our net income attributable to shareholders of € 3,284 mn contributed to the increase. The dividend payout in May 2016 and the increase in actuarial losses on defined benefit plans reduced the shareholders' equity by € 3,320 mn and € 592 mn, respectively.
With the approval of our partial internal model and as Solvency II became the binding regulatory regime on 1 January 2016, risk is measured and steered based on the risk profile underlying our capital requirements under this regulation. By this, we ensure a consistent perspective on both risk steering and capitalization in line with the Solvency II framework. Consequently, we focus our external reporting on the capitalization according to Solvency II rather than the data collected for the purposes of financial conglomerates supervision.
| as of | as of | as of | as of | |||
|---|---|---|---|---|---|---|
| 30 June 2016 |
31 December 2015 |
Delta | 30 June 2016 |
31 December 2015 |
Delta | |
| Type of investment | € bn | € bn | € bn | % | % | %-p |
| Debt instruments; thereof: | 598.1 | 568.1 | 29.9 | 89.8 | 88.8 | 1.0 |
| Government bonds | 230.0 | 217.5 | 12.5 | 38.5 | 38.3 | 0.2 |
| Covered bonds | 97.0 | 98.7 | (1.7) | 16.2 | 17.4 | (1.2) |
| Corporate bonds (excl. banks) | 183.3 | 164.9 | 18.5 | 30.7 | 29.0 | 1.6 |
| Banks | 32.9 | 31.3 | 1.6 | 5.5 | 5.5 | – |
| Other | 54.8 | 55.7 | (0.9) | 9.2 | 9.8 | (0.6) |
| Equities | 42.9 | 45.7 | (2.8) | 6.4 | 7.1 | (0.7) |
| Real estate | 11.7 | 12.0 | (0.3) | 1.8 | 1.9 | (0.1) |
| Cash/other | 13.6 | 14.3 | (0.7) | 2.0 | 2.2 | (0.2) |
| Total | 666.2 | 640.1 | 26.2 | 100.0 | 100.0 | – |
1 This does not include non-controlling interests of € 3,044 mn and € 2,955 mn as of 30 June 2016 and 31 December 2015, respectively. For further information, please refer to note 17 to the condensed consolidated interim financial statements.
| as of 30 June 2016 |
as of 31 December 2015 |
Delta | ||
|---|---|---|---|---|
| Eligible own funds | € bn | 70.6 | 72.7 | (2.1) |
| Capital requirement | € bn | 38.0 | 36.4 | 1.6 |
| Capitalization ratio1 | % | 186 | 200 | (14) %-p |
1 Changed regulatory tax treatment of German life sector reduced year-end Solvency II capitalization ratio from 200% to 196% on 1 January 2016.
Over the first six months, our Solvency II capitalization ratio decreased, with the main effect coming from the first quarter, while the ratio for the second quarter of 2016 remained stable. Overall, our eligible own funds decreased due to the net effect of market impacts, the dividend accrual, regulatory changes and operating Solvency II earnings. The increase in the capital requirement was largely triggered by the further decline in interest rates, which could be only partially compensated for by management actions to improve the interest rate sensitivity. To a lesser extent, higher market volatility also contributed to the rise in the capital requirement.
As of 30 June 2016, total assets amounted to € 889.9 bn and total liabilities were € 819.1 bn. Compared to year-end 2015, total assets and total liabilities increased by € 40.9 bn and € 36.2 bn, respectively.
The following section focuses on our financial investments in debt instruments, equities, real estate, and cash, as these reflect the major developments in our asset base.
The following portfolio overview covers the Allianz Group's assets held for investment, which are largely driven by our insurance businesses.
Compared to year-end 2015, our overall asset allocation remained rather stable with a modest increase in the share of debt securities and a slight decrease in equities. These developments largely reflect the general market developments in the first half of this year.
The increase in our well-diversified exposure to debt instruments was largely driven by fair-value increases, triggered by the further slump of interest rates over the first six months from their already low previous levels. About 94% of this portfolio was invested in investment-grade bonds and loans.1 Of the covered bonds portfolio, 41% (31 December 2015: 42%) was German Pfandbriefe, backed by either public-sector loans or mortgage loans. Another 16%, 10% and 8 % – values consistent with year-end figures – were attributable to France, Spain, and Italy. Our government bonds portfolio comprised – amongst others – exposures to Italy, Spain, and Great Britain, equaling 5.0%, 2.1% and 0.2% of our fixed income portfolio with corresponding unrealized gains (gross) of € 6,001 mn, € 1,615 mn and € 58 mn, respectively. Our government bond exposure in Portugal amounted to € 213 mn with unrealized gains (gross) of € 11 mn. We continued to have virtually no exposure to Greek or Ukrainian government bonds. The respective exposure to Russia totaled to € 406 mn (unrealized gains (gross) of € 16 mn) and was relatively small in the context of our overall portfolio. The greatest part of the Russia exposure was denominated in U.S. Dollar.
As of 30 June 2016, the business segment's gross reserves for loss and loss adjustment expenses and discounted loss reserves amounted to € 65.0 bn – almost unchanged compared to year-end 2015. On a net basis, our reserves, including discounted loss reserves, decreased from € 57.5 bn to € 56.4 bn.2
Life/Health reserves for insurance and investment contracts increased by € 15.1 bn to € 487.1 bn in the first six months of 2016. The € 0.7 bn decrease in aggregate policy reserves and other reserves was driven by the classification of the South Korean business as held for sale (€ (10.8) bn), which could not quite be balanced despite strong growth in Germany (€ 4.3 bn), the United States (€ 3.9 bn before currency effects), and Switzerland (€ 0.5 bn before currency effects). Reserves for premium refunds increased by € 17.6 bn, due to higher unrealized gains to be shared with policyholders. Currency impacts mainly resulted from the weaker U.S. Dollar (€ (1.8) bn).
In comparison to year-end 2015, other liabilities increased by € 2.6 bn to € 26.8 bn, resulting from higher liabilities from cash pooling and other provisions mainly related to pension and similar obligations. Certificated liabilities increased by € 0.7 bn to € 12.8 bn, while subordinated bonds remained almost unchanged at € 12.3 bn.
1 Excluding self-originated German private retail mortgage loans. For 2% no ratings were available.
2 For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty business segment, please refer to note 13 to the condensed consolidated interim financial statements.
The previous analysis is based on our condensed consolidated interim financial statements and should be read in conjunction with them. In addition to our figures stated in accordance with the International Financial Reporting Standards (IFRS), the Allianz Group uses operating profit and internal growth to enhance the understanding of our results. These additional measures should be viewed as complementary to, rather than a substitute for, our figures determined according to IFRS.
For further information, please refer to note 4 to the condensed consolidated interim financial statements.
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Property-Casualty | ||
| Gross premiums written | 28,856 | 29,182 |
| Life/Health | ||
| Statutory premiums | 32,968 | 35,540 |
| Asset Management | ||
| Operating revenues | 2,827 | 3,121 |
| consisting of: | ||
| Net fee and commission income | 2,828 | 3,126 |
| Net interest income1 | (3) | (3) |
| Income from financial assets and liabilities carried at fair value through income (net) |
1 | (4) |
| Other income | 1 | 2 |
| Corporate and Other | ||
| thereof: Total revenues (Banking) | 272 | 270 |
| Interest and similar income | 249 | 275 |
| Income from financial assets and liabilities | 9 | |
| 280 | ||
| Interest expenses, excluding interest expenses | (112) | |
| (182) | ||
| Consolidation effects within Corporate | 2 | |
| (175) | ||
| 67,939 | ||
| consisting of: carried at fair value through income (net)2 Fee and commission income from external debt Fee and commission expenses and Other Consolidation Allianz Group total revenues |
6 264 (90) (160) 3 (165) 64,759 |
1 Represents interest and similar income less interest expenses.
2 Includes trading income.
We believe that an understanding of our total revenue performance is enhanced when the effects of foreign-currency translation as well as acquisitions, disposals, and transfers (or "changes in scope of consolidation") are analyzed separately. Accordingly, in addition to presenting nominal total revenue growth, we also present internal growth, which excludes these effects.
| % six months ended 30 June 2016 |
Internal growth |
Changes in scope of consoli dation |
Foreign currency translation |
Nominal growth |
|---|---|---|---|---|
| Property-Casualty | 3.1 | (1.5) | (2.7) | (1.1) |
| Life/Health | (6.5) | 0.2 | (0.9) | (7.2) |
| Asset Management | (9.5) | 0.1 | – | (9.4) |
| Corporate and Other | 0.7 | – | – | 0.7 |
| Allianz Group | (2.5) | (0.5) | (1.6) | (4.7) |
The reconciling item scope comprises the effects from out-of-scope entities in the profit sources reporting compilation. Operating profit from operating entities that are not in-scope entities is included in the investment margin. Currently, 20 entities comprising 97.4 % of Life/Health total statutory premiums are in scope.
Expenses comprise acquisition expenses and commissions as well as administrative and other expenses.
The delta referred to as definitions under "Acquisition expenses and commissions" represents commission clawbacks, which are allocated to the technical margin. The delta referred to as definitions under "Administrative and other expenses" mainly represents restructuring charges, which are stated in a separate line item in the group income statement.
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Acquisition expenses and commissions2 | (2,434) | (2,354) |
| Definitions | 6 | 8 |
| Scope | (192) | (279) |
| Acquisition costs incurred | (2,619) | (2,624) |
| Capitalization of DAC2 | 995 | 888 |
| Definition: URR capitalized |
242 | 274 |
| Definition: policyholder participation4 | 475 | 426 |
| Scope | 84 | 141 |
| Capitalization of DAC | 1,796 | 1,730 |
| Amortization, unlocking and true-up of DAC2 | (808) | (910) |
| Definition: URR amortized |
(22) | (160) |
| Definition: policyholder participation4 | (270) | (520) |
| Scope | (329) | (138) |
| Amortization, unlocking and true-up of DAC | (1,430) | (1,728) |
| Commissions and profit received on reinsurance business ceded |
28 | 54 |
| Acquisition costs3 | (2,225) | (2,568) |
| Administrative and other expenses2 | (865) | (820) |
| Definitions | 89 | 57 |
| Scope | (123) | (92) |
| Administrative expenses on reinsurance business ceded |
1 | 3 |
| Administrative expenses3 | (899) | (851)5 |
1 Prior year figures changed in order to reflect the roll out of profit source reporting to China.
2 As per Interim Group Management Report.
3 As per notes to the condensed consolidated interim financial statements.
4 For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/ amortization.
5 Excluding one-off effects from pension revaluation.
Impact of change in DAC includes effects of change in DAC, unearned revenue reserves (URR) and value of business acquired (VOBA) and is the net impact of the deferral and amortization of acquisition costs and front-end loadings on operating profit.
URR capitalized: Capitalization amount of unearned revenue reserves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
URR amortized: Total amount of URR amortized includes scheduled URR amortization, true-up and unlocking.
Both capitalization and amortization are included in the line item "Premiums earned (net)" in the group income statement.
Policyholder participation is included in "Change in reserves for insurance and investment contracts (net)" in the group income statement.
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Acquisition expenses and commissions2 | (2,434) | (2,354) |
| Administrative and other expenses2 | (865) | (820) |
| Capitalization of DAC2 | 995 | 888 |
| Amortization, unlocking and true-up of DAC2 | (808) | (910) |
| Acquisition and administrative expenses | (3,112) | (3,195) |
| Definitions | 520 | 85 |
| Scope | (560) | (367) |
| Commissions and profit received on reinsurance business ceded |
28 | 54 |
| Administrative expenses on reinsurance business ceded |
1 | 3 |
| Acquisition and administrative expenses (net)3 | (3,123) | (3,420)4 |
1 Prior year figures changed in order to reflect the roll-out of profit source reporting to China.
2 As per Interim Group Management Report.
3 As per notes to the condensed consolidated interim financial statements.
4 Excluding one-off effects from pension revaluation.
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| as of 30 June 31 December note 2016 2015 ASSETS Cash and cash equivalents 14,573 14,842 Financial assets carried at fair value through income 5 8,161 7,268 Investments 6 540,091 511,257 Loans and advances to banks and customers 7 115,522 117,630 Financial assets for unit-linked contracts 104,927 105,873 Reinsurance assets 8 15,931 14,843 Deferred acquisition costs 9 22,635 Deferred tax assets 1,051 Other assets 10 38,553 Non-current assets and assets of disposal groups classified as held for sale 3 15,004 Intangible assets 11 13,420 Total assets 889,868 LIABILITIES AND EQUITY Financial liabilities carried at fair value through income1 11,334 Liabilities to banks and customers 12 24,758 25,531 Unearned premiums 24,250 20,660 Reserves for loss and loss adjustment expenses 13 71,559 72,003 Reserves for insurance and investment contracts 14 501,592 486,222 Financial liabilities for unit-linked contracts 104,927 105,873 Deferred tax liabilities 6,069 4,003 Other liabilities 15 39,323 38,686 Liabilities of disposal groups classified as held for sale 3 13,335 Certificated liabilities 16 9,603 Subordinated liabilities 16 12,331 Total liabilities 819,080 Shareholders' equity 67,744 63,144 Non-controlling interests 3,044 2,955 Total equity 17 70,788 Total liabilities and equity 889,868 848,942 |
€ mn | ||
|---|---|---|---|
| as of | |||
| 25,234 | |||
| 1,394 | |||
| 37,050 | |||
| 109 | |||
| 13,443 | |||
| 848,942 | |||
| 9,207 | |||
| 18 | |||
| 8,383 | |||
| 12,258 | |||
| 782,843 | |||
| 66,099 | |||
1 Include mainly derivative financial instruments.
| € mn | |||
|---|---|---|---|
| six months ended 30 June | note | 2016 | 2015 |
| Gross premiums written | 41,140 | 42,124 | |
| Ceded premiums written | (2,993) | (3,504) | |
| Change in unearned premiums (net) | (3,567) | (3,086) | |
| Premiums earned (net) | 18 | 34,580 | 35,535 |
| Interest and similar income | 19 | 11,115 | 11,489 |
| Income from financial assets and liabilities carried at fair value through income (net) | 20 | (414) | (758) |
| Realized gains/losses (net) | 21 | 4,144 | 4,931 |
| Fee and commission income | 22 | 5,107 | 5,317 |
| Other income | 23 | 11 | 235 |
| Income from fully consolidated private equity investments | – | 355 | |
| Total income | 54,543 | 57,103 | |
| Claims and insurance benefits incurred (gross) | (26,797) | (26,475) | |
| Claims and insurance benefits incurred (ceded) | 1,511 | 1,377 | |
| Claims and insurance benefits incurred (net) | 24 | (25,286) | (25,098) |
| Change in reserves for insurance and investment contracts (net) | 25 | (7,534) | (9,699) |
| Interest expenses | 26 | (606) | (624) |
| Loan loss provisions | (24) | (24) | |
| Impairments of investments (net) | 27 | (1,421) | (265) |
| Investment expenses | 28 | (601) | (560) |
| Acquisition and administrative expenses (net) | 29 | (12,173) | (12,579) |
| Fee and commission expenses | 30 | (1,923) | (1,890) |
| Amortization of intangible assets | (67) | (77) | |
| Restructuring charges | (94) | (151) | |
| Other expenses | (1) | (2) | |
| Expenses from fully consolidated private equity investments | – | (359) | |
| Total expenses | (49,729) | (51,330) | |
| Income before income taxes | 4,814 | 5,773 | |
| Income taxes | 31 | (1,335) | (1,725) |
| Net income | 3,479 | 4,048 | |
| Net income attributable to: | |||
| Non-controlling interests | 194 | 209 | |
| Shareholders | 3,284 | 3,839 | |
| Basic earnings per share (€) | 7.22 | 8.45 | |
| Diluted earnings per share (€) | 7.04 | 8.45 | |
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Net income | 3,479 | 4,048 |
| Other comprehensive income | ||
| Items that may be reclassified to profit or loss in future periods | ||
| Foreign-currency translation adjustments | ||
| Reclassifications to net income | (6) | – |
| Changes arising during the period | (320) | 1,146 |
| Subtotal | (326) | 1,146 |
| Available-for-sale investments | ||
| Reclassifications to net income | (748) | (955) |
| Changes arising during the period | 6,229 | (1,405) |
| Subtotal | 5,481 | (2,360) |
| Cash flow hedges | ||
| Reclassifications to net income | (8) | (3) |
| Changes arising during the period | 285 | (137) |
| Subtotal | 277 | (140) |
| Share of other comprehensive income of associates and joint ventures | ||
| Reclassifications to net income | – | 7 |
| Changes arising during the period | (51) | 89 |
| Subtotal | (51) | 96 |
| Miscellaneous | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | (34) | 5 |
| Subtotal | (34) | 5 |
| Items that may never be reclassified to profit or loss | ||
| Changes in actuarial gains and losses on defined benefit plans | (604) | 277 |
| Total other comprehensive income | 4,743 | (977) |
| Total comprehensive income | 8,221 | 3,071 |
| Total comprehensive income attributable to: |
| Non-controlling interests | 296 | 241 |
|---|---|---|
| Shareholders | 7,925 | 2,830 |
For further details concerning income taxes relating to components of the other comprehensive income, please see note 31.
| € mn | |||||||
|---|---|---|---|---|---|---|---|
| Paid-in capital | Retained earnings |
Foreign currency translation adjustments |
Unrealized gains and losses (net) |
Shareholders' equity |
Non controlling interests |
Total equity | |
| Balance as of 1 January 2015 | 28,928 | 19,878 | (1,977) | 13,917 | 60,747 | 2,955 | 63,702 |
| Total comprehensive income1 | – | 4,205 | 1,095 | (2,470) | 2,830 | 241 | 3,071 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 6 | – | – | 6 | – | 6 |
| Transactions between equity holders | – | 219 | (3) | – | 216 | (190) | 26 |
| Dividends paid | – | (3,112) | – | – | (3,112) | (183) | (3,295) |
| Balance as of 30 June 2015 | 28,928 | 21,196 | (885) | 11,447 | 60,687 | 2,824 | 63,511 |
| Balance as of 1 January 2016 | 28,928 | 24,222 | (926) | 10,920 | 63,144 | 2,955 | 66,099 |
| Total comprehensive income1 | – | 2,555 | (319) | 5,690 | 7,925 | 296 | 8,221 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 7 | – | – | 7 | – | 7 |
| Transactions between equity holders | – | (12)2 | 4 | (4) | (12) | 15 | 3 |
| Dividends paid | – | (3,320) | – | – | (3,320) | (222) | (3,543) |
| Balance as of 30 June 2016 | 28,928 | 23,451 | (1,242) | 16,606 | 67,744 | 3,044 | 70,788 |
1 Total comprehensive income in shareholders' equity for the six months ended 30 June 2016 comprises net
income attributable to shareholders of € 3,284 mn (2015: € 3,839 mn).
2 Includes income taxes.
| six months ended 30 June | 2016 | 2015 |
|---|---|---|
| Summary | ||
| Net cash flow provided by operating activities | 15,527 | 13,908 |
| Net cash flow used in investing activities | (13,891) | (13,006) |
| Net cash flow used in financing activities | (1,787) | (3,045) |
| Effect of exchange rate changes on cash and cash equivalents | (117) | 541 |
| Change in cash and cash equivalents | (269) | (1,604) |
| Cash and cash equivalents at beginning of period | 14,842 | 13,863 |
| Cash and cash equivalents at end of period | 14,573 | 12,259 |
| Cash flow from operating activities | ||
| Net income | 3,479 | 4,048 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (132) | (162) |
| Realized gains/losses (net) and impairments of investments (net) of: | ||
| Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and customers, non-current assets and disposal groups classified as held for sale |
(2,724) | (4,666) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | (442) | 2,471 |
| Depreciation and amortization | 622 | 684 |
| Loan loss provisions | 24 | 24 |
| Interest credited to policyholder accounts | 2,283 | 3,026 |
| Net change in: | ||
| Financial assets and liabilities held for trading | 1,307 | (2,813) |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | (458) | (542) |
| Repurchase agreements and collateral received from securities lending transactions | (905) | 2,016 |
| Reinsurance assets | (1,390) | (1,495) |
| Deferred acquisition costs | (649) | (264) |
| Unearned premiums | 3,859 | 4,015 |
| Reserves for loss and loss adjustment expenses | 529 | 1,563 |
| Reserves for insurance and investment contracts | 10,434 | 10,262 |
| Deferred tax assets/liabilities | (56) | 380 |
| Other (net) | (253) | (4,640) |
| Subtotal | 12,048 | 9,859 |
| Net cash flow provided by operating activities | 15,527 | 13,908 |
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 1,028 | 701 |
| Available-for-sale investments | 77,973 | 85,219 |
| Held-to-maturity investments | 163 | 1,539 |
| Investments in associates and joint ventures | 710 | 868 |
| Non-current assets and disposal groups classified as held for sale | 63 | 128 |
| Real estate held for investment | 141 | 160 |
| Fixed assets of renewable energy investments | – | 1 |
| Loans and advances to banks and customers (purchased loans) | 3,593 | 6,195 |
| Property and equipment | 43 | 58 |
| Subtotal | 83,714 | 94,868 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (1,012) | (1,251) |
| Available-for-sale investments | (92,294) | (99,556) |
| Held-to-maturity investments | (120) | (1,378) |
| Investments in associates and joint ventures | (413) | (839) |
| Non-current assets and disposal groups classified as held for sale | – | (2) |
| Real estate held for investment | (324) | (495) |
| Fixed assets of renewable energy investments | (165) | (300) |
| Loans and advances to banks and customers (purchased loans) | (1,539) | (2,611) |
| Property and equipment | (506) | (750) |
| Subtotal | (96,373) | (107,181) |
| Business combinations (note 3): | ||
| Proceeds from sale of subsidiaries, net of cash disposed | – | – |
| Acquisitions of subsidiaries, net of cash acquired | – | – |
| Change in other loans and advances to banks and customers (originated loans) | (1,329) | (317) |
| Other (net) | 97 | (376) |
| Net cash flow used in investing activities | (13,891) | (13,006) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | 383 | (202) |
| Proceeds from the issuance of certificated liabilities and subordinated liabilities | 3,864 | 3,181 |
| Repayments of certificated liabilities and subordinated liabilities | (2,477) | (2,652) |
| Cash inflow from capital increases | – | – |
| Transactions between equity holders | 3 | 26 |
| Dividends paid to shareholders | (3,543) | (3,295) |
| Net cash from sale or purchase of treasury shares | 8 | 8 |
| Other (net) | (25) | (111) |
| Net cash flow used in financing activities | (1,787) | (3,045) |
| Supplementary information on the consolidated statements of cash flows | ||
| Income taxes paid | (1,465) | (1,345) |
| Dividends received | 1,026 | 1,095 |
| Interest received | 10,853 | 10,392 |
| Interest paid | (485) | (559) |
The condensed consolidated interim financial statements of the Allianz Group are presented in accordance with the requirements of IAS 34, Interim Financial Reporting, and have been prepared in conformity with International Financial Reporting Standards (IFRSs), as adopted under European Union regulations.
For existing and unchanged IFRSs, the condensed consolidated interim financial statements use the same accounting policies for recognition, measurement, consolidation and presentation as applied in the consolidated financial statements for the year ended 31 December 2015. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2015.
In accordance with the provisions of IFRS 4, Insurance Contracts, insurance contracts are recognized and measured on the basis of accounting principles generally accepted in the United States of America (US GAAP) as at first-time adoption of IFRS 4 on 1 January 2005.
Amounts are rounded to 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 4 August 2016.
The following amendments and revisions to existing standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2016:
No material impact arose on the financial results or the financial position of the Allianz Group.
| € mn | ||
|---|---|---|
| as of 30 June 2016 |
as of 31 December 2015 |
|
|---|---|---|
| Assets of disposal groups classified as held for sale | ||
| Bürgel Wirschaftsinformationen, Hamburg | – | 35 |
| AGF Insurance Limited, Guildford |
259 | – |
| Allianz Life Insurance Co. Ltd., Seoul | 14,352 | – |
| Allianz Global Investors Korea Limited, Seoul | 27 | – |
| Allianz Life&Annuity Company, Minneapolis | 13 | 11 |
| Subtotal | 14,651 | 46 |
| Non-current assets classified as held for sale | ||
| Real estate held for investment | 290 | – |
| Real estate held for own use | 64 | 63 |
| Subtotal | 353 | 63 |
| Total | 15,004 | 109 |
| Liabilities of disposal groups classified as held for sale |
||
| Bürgel Wirschaftsinformationen, Hamburg | – | 15 |
| AGF Insurance Limited, Guildford |
234 | – |
| Allianz Life Insurance Co. Ltd., Seoul | 13,096 | – |
| Allianz Global Investors Korea Limited, Seoul | 3 | – |
| Allianz Life&Annuity Company, Minneapolis | 3 | 3 |
| Total | 13,335 | 18 |
At the beginning of the second quarter of 2016, all requirements were fulfilled to present Allianz Life Insurance Co. Ltd., Seoul, as a disposal group. Thus, the assets and liabilities of this consolidated entity, which are allocated to the reportable segment Asia Pacific (Life/ Health), were classified as held for sale.
| € mn | ||
|---|---|---|
| Cash and cash equivalents | 10 |
|---|---|
| Financial assets carried at fair value through income | 4 |
| Investments | 10,010 |
| Loans and advances to banks and customers | 1,950 |
| Financial assets for unit-linked contracts | 1,436 |
| Reinsurance assets | 5 |
| Deferred acquisition costs | 387 |
| Deferred tax assets | 46 |
| Other assets | 504 |
| Total assets | 14,352 |
| Financial liabilities carried at fair value through income | 4 |
| Unearned premiums | 74 |
| Reserves for loss and loss adjustment expenses | 381 |
| Reserves for insurance and investments contracts | 10,832 |
| Financial liabilities for unit-linked contracts | 1,436 |
| Deferred tax liabilities | 200 |
| Other liabilities | 168 |
As of 30 June 2016, cumulative gains of € 1,298 mn were recorded in other comprehensive income relating to the disposal group classified as held for sale. The sale is expected to occur during the second halfyear of 2016. Upon measurement of the disposal group at fair value less costs to sell, an impairment loss of € 209 mn before taxes was recognized for the six months ended 30 June 2016.
The business activities of the Allianz Group, the business segments as well as the reportable segments and the products and services from which they derive revenue are consistent with the ones that have been described in the consolidated financial statements for the year ended 31 December 2015. The therein contained statements regarding general segment reporting information and the reportable segments measure of profit or loss are still applicable and valid.
Some minor reallocations between the reportable segments have been made.
| € mn | |
|---|---|
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| as of 30 June 2016 |
as of 31 December 2015 |
as of 30 June 2016 |
as of 31 December 2015 |
|
| ASSETS | ||||
| Cash and cash equivalents | 3,567 | 3,635 | 8,004 | 8,467 |
| Financial assets carried at fair value through income | 474 | 643 | 7,267 | 6,431 |
| Investments | 102,376 | 100,026 | 415,825 | 392,171 |
| Loans and advances to banks and customers | 12,196 | 13,781 | 92,392 | 95,138 |
| Financial assets for unit-linked contracts | – | – | 104,927 | 105,873 |
| Reinsurance assets | 10,721 | 9,265 | 5,275 | 5,632 |
| Deferred acquisition costs | 4,939 | 4,647 | 17,696 | 20,587 |
| Deferred tax assets | 1,011 | 1,107 | 752 | 310 |
| Other assets | 22,862 | 23,112 | 19,030 | 17,406 |
| Non-current assets and assets of disposal groups classified as held for sale | 367 | 37 | 14,695 | 72 |
| Intangible assets | 2,751 | 2,781 | 3,050 | 2,998 |
| Total assets | 161,264 | 159,034 | 688,913 | 655,086 |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| as of 30 June 2016 |
as of 31 December 2015 |
as of 30 June 2016 |
as of 31 December 2015 |
|
| LIABILITIES AND EQUITY |
||||
| Financial liabilities carried at fair value through income | 178 | 112 | 11,005 | 8,834 |
| Liabilities to banks and customers | 973 | 901 | 5,703 | 5,807 |
| Unearned premiums | 20,528 | 17,071 | 3,748 | 3,605 |
| Reserves for loss and loss adjustment expenses | 61,012 | 61,169 | 10,574 | 10,857 |
| Reserves for insurance and investment contracts | 14,722 | 14,407 | 487,089 | 472,010 |
| Financial liabilities for unit-linked contracts | – | – | 104,927 | 105,873 |
| Deferred tax liabilities | 2,836 | 2,482 | 5,319 | 3,137 |
| Other liabilities | 17,313 | 19,533 | 13,189 | 14,856 |
| Liabilities of disposal groups classified as held for sale | 247 | 15 | 13,102 | 3 |
| Certificated liabilities | 12 | 12 | 12 | 12 |
| Subordinated liabilities | – | – | 95 | 95 |
| Total liabilities | 117,821 | 115,702 | 654,761 | 625,088 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| 31 December | as of 30 June |
as of 31 December |
as of 30 June |
as of 31 December |
as of 30 June |
as of 31 December |
as of 30 June |
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | |
| 14,573 | (541) | (246) | 1,952 | 2,246 | 1,329 | 1,002 | |
| 8,161 | (495) | (328) | 625 | 688 | 64 | 59 | |
| 540,091 | (108,454) | (89,088) | 127,284 | 110,852 | 230 | 126 | |
| 115,522 | (6,980) | (5,714) | 15,591 | 16,621 | 99 | 28 | |
| 104,927 | – | – | – | – | – | – | |
| 15,931 | (54) | (66) | – | – | – | – | |
| 22,635 | – | – | – | – | – | – | |
| 1,051 | (1,712) | (2,230) | 1,395 | 1,285 | 294 | 234 | |
| 38,553 | (15,772) | (12,987) | 9,626 | 6,883 | 2,677 | 2,765 | |
| 15,004 | – | (85) | – | – | – | 27 | |
| 13,420 | – | – | 11 | 10 | 7,653 | 7,609 | |
| 889,868 | (134,008) | (110,746) | 156,483 | 138,586 | 12,348 | 11,851 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| as of | as of | as of | as of | as of | as of | as of | |
| 31 December | 30 June | 31 December | 30 June | 31 December | 30 June | 31 December | 30 June |
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | |
| 9,207 | 11,334 | (489) | (333) | 750 | 485 | – | – |
| 25,531 | 24,758 | (3,127) | (2,144) | 21,777 | 20,053 | 174 | 174 |
| 20,660 | 24,250 | (15) | (27) | – | – | – | – |
| 72,003 | 71,559 | (23) | (26) | – | – | – | – |
| 486,222 | 501,592 | (195) | (190) | – | (30) | – | – |
| 105,873 | 104,927 | – | – | – | – | – | – |
| 6,069 | (1,712) | (2,230) | 80 | 117 | 16 | 27 | |
| 39,323 | (22,710) | (20,588) | 24,256 | 26,814 | 2,750 | 2,594 | |
| 13,335 | – | (16) | – | – | – | 3 | |
| 9,603 | (3,695) | (3,201) | 12,054 | 12,779 | – | – | |
| 12,331 | (50) | (50) | 12,213 | 12,286 | – | – | |
| 782,843 | 819,080 | (32,018) | (28,804) | 71,130 | 72,504 | 2,940 | 2,797 |
| 70,788 | Total equity | ||||||
| 848,942 | 889,868 | Total liabilities and equity |
| € mn | Corporate and Other | |||||
|---|---|---|---|---|---|---|
| Property-Casualty | Life/Health | Asset Management | ||||
| six months ended 30 June | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Total revenues1 | 28,856 | 29,182 | 32,968 | 35,540 | 2,827 | 3,121 |
| Premiums earned (net) | 22,823 | 23,072 | 11,757 | 12,463 | – | – |
| Operating investment result | ||||||
| Interest and similar income | 1,736 | 1,871 | 9,128 | 9,370 | 2 | 3 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(25) | 33 | (473) | (688) | 1 | (4) |
| Operating realized gains/losses (net) | 157 | 138 | 3,114 | 4,044 | – | – |
| Interest expenses, excluding interest expenses from external debt | (48) | (43) | (57) | (52) | (6) | (6) |
| Operating impairments of investments (net) | (43) | (7) | (934) | (195) | – | – |
| Investment expenses | (175) | (176) | (551) | (527) | – | – |
| Subtotal | 1,602 | 1,817 | 10,226 | 11,953 | (2) | (7) |
| Fee and commission income | 759 | 715 | 679 | 679 | 3,496 | 3,914 |
| Other income | 1 | 227 | 9 | 8 | 1 | 2 |
| Claims and insurance benefits incurred (net) | (15,162) | (15,243) | (10,127) | (9,858) | – | – |
| Change in reserves for insurance and investment contracts (net)2 | (254) | (291) | (7,207) | (9,394) | – | – |
| Loan loss provisions | – | – | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation |
(6,492) | (6,456) | (3,123) | (3,420) | (1,868) | (2,060) |
| Fee and commission expenses | (706) | (680) | (305) | (296) | (668) | (788) |
| Operating amortization of intangible assets | – | – | (9) | (9) | – | – |
| Restructuring charges | (33) | (130) | (63) | (20) | 2 | – |
| Other expenses | – | – | (149) | (148) | – | – |
| Reclassifications3 | – | – | 247 | – | – | – |
| Operating profit (loss) | 2,539 | 3,030 | 1,936 | 1,957 | 961 | 1,060 (323) |
| Non-operating investment result | ||||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(21) | (38) | 11 | (11) | – | – 79 |
| Non-operating realized gains/losses (net) | 327 | 434 | 21 | 100 | – | – 354 |
| Non-operating impairments of investments (net) | (168) | (56) | (218) | (5) | – | – (58) |
| Subtotal | 138 | 340 | (186) | 84 | – | – 375 |
| Income from fully consolidated private equity investments (net) | – | – | – | – | – | – |
| Interest expenses from external debt | – | – | – | – | – | – (418) |
| Acquisition-related expenses | – | – | – | – | – | 9 |
| One-off effects from pension revaluation | – | (181) | – | (13) | – | (31) |
| Non-operating amortization of intangible assets | (26) | (30) | (21) | (28) | (6) | (5) (4) |
| Reclassifications3 | – | – | (247) | – | – | – – |
| Non-operating items | 112 | 130 | (455) | 43 | (6) | (27) (47) |
| Income (loss) before income taxes | 2,651 | 3,160 | 1,482 | 2,000 | 956 | 1,034 (371) |
| Income taxes | (729) | (894) | (487) | (599) | (340) | (375) 183 |
| Net income (loss) | 1,922 | 2,266 | 995 | 1,401 | 615 | 658 (188) |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | 84 | 89 | 73 | 78 | 29 | 32 8 |
| Shareholders | 1,838 | 2,177 | 921 | 1,323 | 586 | 626 (196) |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the six months ended 30 June 2016, includes expenses for premium refunds (net) in Property-Casualty
3 The result of the South Korean business for the three months ended 30 June 2016 is considered as nonoperating since it has been classified as held for sale. Furthermore minor tax reclassifications are included in this line.
of € (129) mn (2015: € (168) mn).
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| 2,827 | 3,121 | 272 | 270 | (165) | (175) | 64,759 | 67,939 |
| – | – | – | – | – | – | 34,580 | 35,535 |
| 2 | 3 | 370 | 412 | (121) | (167) | 11,115 | 11,489 |
| 1 | (4) | 12 | – | – | 12 | (485) | (647) 4,189 |
| – | – | – | – | 38 | 7 | 3,310 | |
| (6) | (6) | (194) | (241) | 118 | 143 | (188) | (199) (202) |
| – | – | – | – | – | – | (977) | (560) |
| – (2) |
– (7) |
(40) 148 |
(37) 134 |
166 200 |
179 174 |
(601) 12,174 |
14,070 |
| 3,496 | 3,914 | 643 | 407 | (471) | (398) | 5,107 | |
| 1 | 2 | 148 | 148 | (149) | (150) | 11 | |
| – | – | – | – | 3 | 3 | (25,286) | |
| – | – | – | – | (74) | (13) | (7,534) | |
| – | – | (24) | (24) | – | – | (24) | |
| (1,868) | (2,060) | (699) | (652) | 8 | (1) | (12,173) | |
| (668) | (788) | (540) | (340) | 296 | 214 | (1,923) | |
| – | – | – | – | – | – | (9) | |
| 2 | – | – | (1) | – | – | (94) | |
| – | – | – | (2) | 148 | 148 | (1) | |
| – | – | – | – | 34 | 5 | 281 | |
| 961 | 1,060 | (323) | (331) | (5) | (19) | 5,109 | |
| – | – | 79 | (55) | 4 | (8) | 71 | |
| – | – | 354 | 207 | 132 | 1 | 835 | |
| – | – | (58) | (1) | – | – | (444) | |
| – | – | 375 | 151 | 136 | (7) | 462 | |
| – | – | – | (7) | – | 3 | – | |
| – | – | (418) | (425) | – | – | (418) | |
| – | 9 | – | 1 | – | – | – | |
| – | (31) | – | 224 | – | – | – | |
| (6) | (5) | (4) | (4) | – | – | (58) | |
| – (6) |
– (27) |
– (47) |
– (62) |
(34) 101 |
(5) (9) |
(281) (295) |
|
| 956 | 1,034 | (371) | (393) | 97 | (28) | 4,814 | |
| (340) | (375) | 183 | 138 | 39 | 6 | (1,335) | |
| 615 | 658 | (188) | (254) | 135 | (22) | 3,479 | |
| 32 | 8 | 10 | – | – | 194 | ||
| 29 586 |
626 | (196) | (264) | 135 | (22) | 3,284 |
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total revenues | Operating profit (loss) | Income (loss) before income taxes |
Net income (loss) | |||||
| six months ended 30 June | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| German Speaking Countries and Central&Eastern Europe |
8,925 | 8,711 | 728 | 840 | 825 | 803 | 608 | 603 |
| Western&Southern Europe, Middle East, Africa, India |
6,392 | 6,281 | 726 | 884 | 713 | 945 | 483 | 627 |
| Iberia&Latin America | 2,353 | 2,440 | 92 | 112 | 65 | 122 | 55 | 94 |
| Global Insurance Lines&Anglo Markets | 12,490 | 12,162 | 905 | 1,086 | 964 | 1,186 | 724 | 864 |
| Asia Pacific | 367 | 426 | 33 | 43 | 33 | 42 | 24 | 31 |
| Allianz Worldwide Partners | 2,479 | 2,453 | 55 | 65 | 55 | 62 | 30 | 47 |
| Consolidation | (4,149) | (3,290) | – | – | (4) | – | (2) | – |
| Total Property-Casualty | 28,856 | 29,182 | 2,539 | 3,030 | 2,651 | 3,160 | 1,922 | 2,266 |
| German Speaking Countries and Central&Eastern Europe |
12,305 | 12,486 | 793 | 750 | 791 | 739 | 543 | 478 |
| Western&Southern Europe, Middle East, Africa, India |
10,832 | 13,190 | 606 | 606 | 603 | 641 | 413 | 478 |
| Iberia&Latin America | 1,015 | 1,071 | 113 | 112 | 105 | 104 | 79 | 76 |
| USA | 6,575 | 5,291 | 384 | 461 | 394 | 484 | 274 | 339 |
| Global Insurance Lines&Anglo Markets | 321 | 317 | 15 | 34 | 17 | 34 | 13 | 27 |
| Asia Pacific | 2,350 | 3,635 | 191 | 6 | (435) | 10 | (335) | 14 |
| Consolidation | (431) | (451) | 6 | (12) | 7 | (12) | 7 | (12) |
| Total Life/Health | 32,968 | 35,540 | 1,936 | 1,957 | 1,482 | 2,000 | 995 | 1,401 |
| Asset Management | 2,827 | 3,121 | 961 | 1,060 | 956 | 1,034 | 615 | 658 |
| Holding&Treasury | – | – | (384) | (407) | (448) | (467) | (244) | (306) |
| Banking | 270 | 269 | 36 | 58 | 49 | 69 | 35 | 47 |
| Alternative Investments | – | – | 24 | 19 | 23 | 6 | 16 | 4 |
| Consolidation | 2 | 2 | – | – | 5 | – | 5 | – |
| Total Corporate and Other | 272 | 270 | (323) | (331) | (371) | (393) | (188) | (254) |
| Consolidation | (165) | (175) | (5) | (19) | 97 | (28) | 135 | (22) |
| Group | 64,759 | 67,939 | 5,109 | 5,697 | 4,814 | 5,773 | 3,479 | 4,048 |
1 The result of the South Korean business for the three months ended 30 June 2016 is considered as non-operating since it has been classified as held for sale.
| € mn | as of 30 June |
as of 31 December |
|---|---|---|
| 2016 | 2015 | |
| Financial assets held for trading | ||
| Debt securities | 470 | 489 |
| Equity securities | 179 | 187 |
| Derivative financial instruments | 2,650 | 1,582 |
| Subtotal | 3,299 | 2,258 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,504 | 2,645 |
| Equity securities | 2,358 | 2,365 |
| Subtotal | 4,861 | 5,010 |
| Total | 8,161 | 7,268 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2016 | 2015 | |
| Available-for-sale investments | 517,843 | 488,365 |
| Held-to-maturity investments | 2,664 | 2,745 |
| Funds held by others under reinsurance | ||
| contracts assumed | 1,107 | 1,349 |
| Investments in associates and joint ventures | 4,905 | 5,056 |
| Real estate held for investment | 11,681 | 11,977 |
| Fixed assets of renewable energy investments | 1,891 | 1,763 |
| Total | 540,091 | 511,257 |
| as of 31 December 2015 Unrealized Gains 12,681 8,052 5,521 |
Unrealized Losses (4,149) (70) |
Fair Value 220,367 |
|---|---|---|
| 39,021 | ||
| (54) | 28,926 | |
| 1,919 | (52) | 14,948 |
| 645 | (82) | 14,810 |
| 829 | (152) | 9,795 |
| 1,589 | (59) | 8,942 |
| 1,246 | (10) | 6,678 |
| 698 | (2) | 5,711 |
| 374 | (10) | 3,963 |
| 37 | (23) | 1,365 |
| 98 | – | 918 |
| 1,190 | – | 8,619 |
| 2 | (18) | 365 |
| 29 | – | 187 |
| 2 | – | 3 |
| 2,577 | (64) | 19,412 |
| 1,592 | (865) | 38,359 |
| 26,398 | (1,462) | 202,023 |
| 609 | (236) | 21,414 |
| 588 | (7) | 3,938 |
| 40,276 | (5,854) | 447,742 |
| (402) | ||
| 40,624 | ||
| 12,119 |
| € mn | as of 30 June 2016 |
as of 31 December 2015 |
|---|---|---|
| Short-term investments and certificates of deposit | 2,437 | 3,106 |
| Loans | 111,703 | 113,573 |
| Other | 1,692 | 1,258 |
| Subtotal | 115,833 | 117,936 |
| Loan loss allowance | (311) | (307) |
| Total | 115,522 | 117,630 |
| € mn | as of | as of |
|---|---|---|
| 30 June | 31 December | |
| 2016 | 2015 | |
| Unearned premiums | 2,067 | 1,655 |
| Reserves for loss and loss adjustment expenses | 8,804 | 7,712 |
| Aggregate policy reserves | 4,955 | 5,366 |
| Other insurance reserves | 105 | 110 |
| Total | 15,931 | 14,843 |
| as of 30 June 2016 |
as of 31 December 2015 |
|---|---|
| 4,939 | 4,647 |
| 16,542 | 18,941 |
| 21,480 | 23,588 |
| 593 | 613 |
| 561 | 1,033 |
| 22,635 | 25,234 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June 2016 |
31 December 2015 |
|
| Receivables | ||
| Policyholders | 6,387 | 6,013 |
| Agents | 5,028 | 4,379 |
| Reinsurers | 3,080 | 2,264 |
| Other | 4,972 | 4,340 |
| Less allowance for doubtful accounts | (643) | (647) |
| Subtotal | 18,824 | 16,349 |
| Tax receivables | ||
| Income taxes | 1,473 | 1,698 |
| Other taxes | 1,465 | 1,512 |
| Subtotal | 2,938 | 3,210 |
| Accrued dividends, interest and rent | 6,631 | 7,887 |
| Prepaid expenses | 446 | 328 |
| Derivative financial instruments, used for hedging that meet the criteria for hedge accounting, and firm commitments |
1,033 | 565 |
| Property and equipment | ||
| Real estate held for own use | 3,116 | 3,261 |
| Software | 2,451 | 2,361 |
| Equipment | 1,438 | 1,426 |
| Subtotal | 7,004 | 7,048 |
| Other | 1,678 | 1,664 |
| Total | 38,553 | 37,050 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2016 | 2015 | |
| Goodwill | 12,038 | 12,101 |
| Distribution agreements1 | 946 | 899 |
| Acquired business portfolios2 | 177 | 186 |
| Customer relationships | 123 | 116 |
| Other3 | 136 | 141 |
| Total | 13,420 | 13,443 |
1 Include primarily the long-term distribution agreements with Commerzbank AG of € 279 mn (2015: € 298 mn), Banco Popular S.A. of € 380 mn (2015: € 389 mn), Yapı ve Kredi Bankası A.S. of € 116 mn (2015: € 122 mn), Philippine National Bank of € 86 mn (2015: € – mn) and HSBC Asia, HSBC Turkey and BTPN Indonesia of € 75 mn (2015: € 79 mn).
2 Includes primarily the acquired business portfolio of Allianz Yasam ve Emeklilik A.S. of € 116 mn (2015: € 120 mn).
3 Include primarily heritable building rights, land use rights, lease rights and brand names.
| as of 30 June 2016 |
as of 31 December 2015 |
|---|---|
| 10,606 | 10,305 |
| 5,537 | 6,495 |
| 8,616 | 8,730 |
| 25,531 | |
| 24,758 |
The following table reconciles the beginning and ending reserves for the Property-Casualty business segment for the half-years ended 30 June 2016 and 2015.
| € mn | ||
|---|---|---|
| 2016 | 2015 | |
| As of 1 January | 61,169 | 58,925 |
| Balance carry forward of discounted loss reserves | 3,882 | 3,597 |
| Subtotal | 65,051 | 62,522 |
| Loss and loss adjustment expenses incurred | ||
| Current year | 17,797 | 17,371 |
| Prior years | (1,378) | (945) |
| Subtotal | 16,419 | 16,426 |
| Loss and loss adjustment expenses paid | ||
| Current year | (6,395) | (6,313) |
| Prior years | (9,563) | (9,312) |
| Subtotal | (15,958) | (15,625) |
| Foreign-currency translation adjustments and other changes |
(532) | 2,076 |
| Subtotal | 64,981 | 65,398 |
| Ending balance of discounted loss reserves | (3,969) | (3,814) |
| As of 30 June | 61,012 | 61,584 |
| Total | 501,592 | 486,222 |
|---|---|---|
| Other insurance reserves | 916 | 1,178 |
| Reserves for premium refunds | 77,600 | 59,732 |
| Aggregate policy reserves | 423,076 | 425,312 |
| as of 30 June 2016 |
as of 31 December 2015 |
|
| € mn |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2016 | 2015 | |
| Payables | ||
| Policyholders | 4,242 | 5,006 |
| Reinsurance | 2,249 | 1,413 |
| Agents | 1,560 | 1,625 |
| Subtotal | 8,052 | 8,043 |
| Payables for social security | 420 | 428 |
| Tax payables | ||
| Income taxes | 1,541 | 1,732 |
| Other taxes | 1,442 | 1,450 |
| Subtotal | 2,983 | 3,181 |
| Accrued interest and rent | 687 | 579 |
| Unearned income | 402 | 374 |
| Provisions | ||
| Pensions and similar obligations | 10,007 | 9,149 |
| Employee related | 2,332 | 2,599 |
| Share-based compensation plans | 301 | 527 |
| Restructuring plans | 113 | 112 |
| Other | 1,695 | 1,840 |
| Subtotal | 14,448 | 14,227 |
| Deposits retained for reinsurance ceded | 2,309 | 1,636 |
| Derivative financial instruments, used for hedging that meet the criteria for hedge |
||
| accounting, and firm commitments | 260 | 472 |
| Financial liabilities for puttable equity instruments | 2,489 | 2,585 |
| Other | 7,272 | 7,159 |
| Total | 39,323 | 38,686 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2016 | 2015 | |
| Allianz SE1 | ||
| Senior bonds2 | 8,093 | 6,711 |
| Money market securities | 1,208 | 1,276 |
| Subtotal | 9,301 | 7,987 |
| Banking subsidiaries | ||
| Senior bonds | 302 | 395 |
| Subtotal | 302 | 395 |
| Total | 9,603 | 8,383 |
1 Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE and money market securities issued by Allianz Finance Corporation, a wholly-owned subsidiary of Allianz SE, which are fully and unconditionally guaranteed by Allianz SE.
2 Change due to the issuance of € 1.5 BN bonds in the first half-year of 2016.
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 December | 30 June | |
| 2015 | 2016 | |
| Allianz SE1 | ||
| 11,962 | 12,036 | Subordinated bonds |
| 11,962 | 12,036 | Subtotal |
| Banking subsidiaries | ||
| 251 | 249 | Subordinated bonds |
| 251 | 249 | Subtotal |
| All other subsidiaries | ||
| 45 | 45 | Hybrid equity |
| 45 | 45 | Subtotal |
| 12,258 | 12,331 | Total |
1 Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
€ mn
| ISIN | Year of Issue | Currency | Notional amount |
Coupon in % | Maturity date | |
|---|---|---|---|---|---|---|
| Certificated liabilities | ||||||
| Allianz Finance II B.V., Amsterdam | XS0275880267 | 2006 | EUR | 1,500 | 4.000 | 23 November 2016 |
| DE000A1HG1J8 | 2013 | EUR | 500 | 1.375 | 13 March 2018 | |
| DE000A1AKHB8 | 2009 | EUR | 1,500 | 4.750 | 22 July 2019 | |
| DE000A180B72 | 2016 | EUR | 750 | 0.000 | 21 April 2020 | |
| DE000A1G0RU9 | 2012 | EUR | 1,500 | 3.500 | 14 February 2022 | |
| DE000A1HG1K6 | 2013 | EUR | 750 | 3.000 | 13 March 2028 | |
| DE000A180B80 | 2016 | EUR | 750 | 1.375 | 21 April 2031 | |
| DE000A1HG1L4 | 2013 | GBP | 750 | 4.500 | 13 March 2043 | |
| Subordinated liabilities | ||||||
| Allianz SE, Munich | DE000A1RE1Q3 | 2012 | EUR | 1,500 | 5.625 | 17 October 2042 |
| DE000A14J9N8 | 2015 | EUR | 1,500 | 2.241 | 7 July 2045 | |
| XS0857872500 | 2012 | USD | 1,000 | 5.500 | Perpetual | |
| DE000A1YCQ29 | 2013 | EUR | 1,500 | 4.750 | Perpetual | |
| CH0234833371 | 2014 | CHF | 500 | 3.250 | Perpetual | |
| DE000A13R7Z7 | 2014 | EUR | 1,500 | 3.375 | Perpetual | |
| Allianz Finance II B.V., Amsterdam | DE000A1GNAH1 | 2011 | EUR | 2,000 | 5.750 | 8 July 2041 |
| XS0211637839 | 2005 | EUR | 1,400 | 4.375 | Perpetual | |
| DE000A0GNPZ3 | 2006 | EUR | 800 | 5.375 | Perpetual |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2016 | 2015 | |
| Shareholders' equity | ||
| Issued capital | 1,170 | 1,170 |
| Additional paid-in capital | 27,758 | 27,758 |
| Retained earnings1 | 23,451 | 24,222 |
| Foreign-currency translation adjustments | (1,242) | (926) |
| Unrealized gains and losses (net)2 | 16,606 | 10,920 |
| Subtotal | 67,744 | 63,144 |
| Non-controlling interests | 3,044 | 2,955 |
| Total | 70,788 | 66,099 |
1 As of 30 June 2016, include € (152) mn (2015: € (159) mn) related to treasury shares.
2 As of 30 June 2016, include € 512 mn (2015: € 239 mn) related to cash flow hedges.
In the second quarter of 2016, a total dividend of € 3,320 MN (2015: € 3,112 MN) or € 7.30 (2015: € 6.85) per qualifiying share was paid to the shareholders.
| € mn | ||||
|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2016 | ||||
| Premiums written | ||||
| Gross | 28,856 | 12,357 | (73) | 41,140 |
| Ceded | (2,743) | (323) | 73 | (2,993) |
| Net | 26,113 | 12,034 | – | 38,147 |
| Change in unearned premiums (net) |
(3,290) | (277) | – | (3,567) |
| Premiums earned (net) | 22,823 | 11,757 | – | 34,580 |
| 2015 | ||||
| Premiums written | ||||
| Gross | 29,182 | 12,999 | (57) | 42,124 |
| Ceded | (3,159) | (401) | 57 | (3,504) |
| Net | 26,023 | 12,598 | – | 38,621 |
| Change in unearned premiums (net) |
(2,951) | (135) | – | (3,086) |
| Premiums earned (net) | 23,072 | 12,463 | – | 35,535 |
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Dividends from available-for-sale investments | 1,023 | 1,108 |
| Interest from available-for-sale investments | 6,939 | 7,104 |
| Interest from loans to banks and customers | 2,274 | 2,376 |
| Other | 879 | 901 |
| Total | 11,115 | 11,489 |
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Income (expenses) from financial assets and liabilities held for trading (net) |
(244) | (2,471) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
(109) | 166 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
134 | (106) |
| Foreign-currency gains and losses (net) | (195) | 1,653 |
| Total | (414) | (758) |
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Realized gains | ||
| Available-for-sale investments | ||
| Equity securities | 1,319 | 2,345 |
| Debt securities | 2,972 | 2,503 |
| Subtotal | 4,291 | 4,847 |
| Other | 581 | 526 |
| Subtotal | 4,872 | 5,373 |
| Realized losses | ||
| Available-for-sale investments | ||
| Equity securities | (257) | (113) |
| Debt securities | (469) | (323) |
| Subtotal | (726) | (435) |
| Other | (1) | (7) |
| Subtotal | (728) | (442) |
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Property-Casualty | ||
| Fees from credit and assistance business | 516 | 491 |
| Service agreements | 243 | 225 |
| Subtotal | 759 | 715 |
| Life/Health | ||
| Service agreements | 64 | 46 |
| Investment advisory | 615 | 633 |
| Subtotal | 679 | 679 |
| Asset Management | ||
| Management fees | 3,122 | 3,472 |
| Loading and exit fees | 231 | 314 |
| Performance fees | 127 | 111 |
| Other | 17 | 17 |
| Subtotal | 3,496 | 3,914 |
| Corporate and Other | ||
| Service agreements | 288 | 41 |
| Investment advisory and banking activities | 355 | 365 |
| Subtotal | 643 | 407 |
| Consolidation | (471) | (398) |
| Total | 5,107 | 5,317 |
| € mn | ||||
|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2016 | ||||
| Gross | (16,419) | (10,416) | 39 | (26,797) |
| Ceded | 1,258 | 289 | (36) | 1,511 |
| Net | (15,162) | (10,127) | 3 | (25,286) |
| 2015 | ||||
| Gross | (16,426) | (10,085) | 36 | (26,475) |
| Ceded | 1,183 | 227 | (33) | 1,377 |
| Net | (15,243) | (9,858) | 3 | (25,098) |
| € mn | ||||
|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2016 | ||||
| Gross | (256) | (7,366) | (74) | (7,696) |
| Ceded | 3 | 160 | – | 163 |
| Net | (254) | (7,207) | (74) | (7,534) |
| 2015 | ||||
| Gross | (295) | (9,650) | (13) | (9,958) |
| Ceded | 3 | 256 | – | 259 |
| Net | (291) | (9,394) | (13) | (9,699) |
| Total | (606) | (624) |
|---|---|---|
| Other | (55) | (49) |
| Subordinated liabilities | (286) | (290) |
| Certificated liabilities | (142) | (148) |
| Deposits retained for reinsurance ceded | (34) | (28) |
| Liabilities to banks and customers | (89) | (110) |
| six months ended 30 June | 2016 | 2015 |
| € mn |
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Income from real estate held for own use | 10 | 11 |
| Other | 1 | 2241 |
| Total | 11 | 235 |
1 Includes a net gain of € 0.2 bN on the sale of the personal insurance business of Fireman's Fund Insurance Company to ACE Limited. The sale was an integral part of the reorganization of Allianz Group's Property-Casualty insurance business in the United States.
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Impairments | ||
| Available-for-sale investments | ||
| Equity securities | (1,175) | (151) |
| Debt securities | (42) | (93) |
| Subtotal | (1,217) | (244) |
| Other | (9) | (24) |
| Non-current assets and assets of disposal groups classified as held for sale |
(226) | – |
| Subtotal | (1,451) | (268) |
| Reversals of impairments | 31 | 3 |
| Total | (1,421) | (265) |
| € mn six months ended 30 June |
2016 | 2015 |
|---|---|---|
| Investment management expenses | (344) | (308) |
| Expenses from real estate held for investment | (193) | (195) |
| Expenses from fixed assets of renewable energy investments |
(64) | (58) |
| Total | (601) | (560) |
| € mn | ||
|---|---|---|
| six months ended 30 June | 2016 | 2015 |
| Property-Casualty | ||
| Acquisition costs | (5,023) | (5,039) |
| Administrative expenses | (1,469) | (1,598)1 |
| Subtotal | (6,492) | (6,637) |
| Life/Health | ||
| Acquisition costs | (2,225) | (2,568) |
| Administrative expenses | (899) | (864)1 |
| Subtotal | (3,123) | (3,432) |
| Asset Management | ||
| Personnel expenses | (1,131) | (1,294)1 |
| Non-personnel expenses | (736) | (788) |
| Subtotal | (1,868) | (2,082) |
| Corporate and Other | ||
| Administrative expenses | (698) | (427)1 |
| Subtotal | (698) | (427) |
| Consolidation | 8 | (1) |
| Total | (12,173) | (12,579) |
| 1 Include one-off effects from pension revaluation. |
| 2016 | 2015 |
|---|---|
| (506) | (507) |
| (199) | (173) |
| (706) | (680) |
| (28) | (21) |
| (277) | (275) |
| (305) | (296) |
| (637) | (731) |
| (31) | (58) |
| (668) | (788) |
| (384) | (160) |
| (156) | (180) |
| (540) | (340) |
| 296 | 214 |
| (1,923) | (1,890) |
| Income taxes | ||
|---|---|---|
| € mn six months ended 30 June |
2016 | 2015 |
| Current income taxes | (1,462) | (1,307) |
| Deferred income taxes | 127 | (418) |
| Total | (1,335) | (1,725) |
For the six months ended 30 June 2016 and 2015, the income taxes relating to components of other comprehensive income consist of the following:
income taxes relating to components of other comprehensive income
| six months ended 30 June | 2016 | 2015 |
|---|---|---|
| Items that may be reclassified to profit or loss in future periods |
||
| Foreign-currency translation adjustments | (37) | 113 |
| Available-for-sale investments | (2,835) | 1,450 |
| Cash flow hedges | (109) | 65 |
| Share of other comprehensive income of associates and joint ventures |
7 | (3) |
| Miscellaneous | (12) | (10) |
| Items that may never be reclassified to profit or loss |
||
| Actuarial gains (losses) on defined benefit plans | 293 | (142) |
| Total | (2,694) | 1,473 |
The following table compares the carrying amount with the fair value of the Allianz Group's financial assets and financial liabilities:
Fair values and carrying amounts of financial instruments
| € mn | ||||
|---|---|---|---|---|
| as of 30 June 2016 | as of 31 December 2015 | |||
| Carrying amount | Fair value | Carrying amount | Fair value | |
| Financial assets | ||||
| Cash and cash equivalents | 14,573 | 14,573 | 14,842 | 14,842 |
| Financial assets held for trading | 3,299 | 3,299 | 2,258 | 2,258 |
| Financial assets designated at fair value through income | 4,861 | 4,861 | 5,010 | 5,010 |
| Available-for-sale investments | 517,843 | 517,843 | 488,365 | 488,365 |
| Held-to-maturity investments | 2,664 | 3,150 | 2,745 | 3,165 |
| Investments in associates and joint ventures | 4,905 | 6,497 | 5,056 | 6,207 |
| Real estate held for investment | 11,681 | 17,520 | 11,977 | 17,810 |
| Loans and advances to banks and customers | 115,522 | 139,921 | 117,630 | 136,397 |
| Financial assets for unit-linked contracts | 104,927 | 104,927 | 105,873 | 105,873 |
| Derivative financial instruments and firm commitments included in other assets | 1,033 | 1,033 | 565 | 565 |
| Financial liabilities | ||||
| Financial liabilities held for trading | 11,334 | 11,334 | 9,207 | 9,207 |
| Liabilities to banks and customers | 24,758 | 25,045 | 25,531 | 25,563 |
| Financial liabilities for unit-linked contracts | 104,927 | 104,927 | 105,873 | 105,873 |
| Derivative financial instruments and firm commitments included in other liabilities | 260 | 260 | 472 | 472 |
| Financial liabilities for puttable equity instruments | 2,489 | 2,489 | 2,585 | 2,585 |
| Certificated liabilities | 9,603 | 10,715 | 8,383 | 9,208 |
| Subordinated liabilities | 12,331 | 13,035 | 12,258 | 13,100 |
As of 30 June 2016, fair values could not be reliably measured for equity investments whose carrying amounts totaled € 113 mn (31 December 2015: € 216 mn). These investments are primarily investments in privately held corporations and partnerships.
The following financial assets and liabilities are carried at fair value on a recurring basis:
The following table presents the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 30 June 2016 and 31 December 2015.
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 June 2016 | as of 31 December 2015 | |||||||
| Level 11 | Level 22 | Level 33 | Total | Level 11 | Level 22 | Level 33 | Total | |
| Financial assets | ||||||||
| Financial assets carried at fair value through income | ||||||||
| Financial assets held for trading | 278 | 2,953 | 68 | 3,299 | 192 | 2,018 | 47 | 2,258 |
| Financial assets designated at fair value through income |
3,742 | 986 | 133 | 4,861 | 3,836 | 1,037 | 137 | 5,010 |
| Subtotal | 4,020 | 3,939 | 201 | 8,161 | 4,027 | 3,055 | 184 | 7,268 |
| Available-for-sale investments | ||||||||
| Corporate bonds | 29,410 | 198,020 | 12,638 | 240,069 | 28,428 | 182,185 | 9,754 | 220,367 |
| Government and government agency bonds | 41,085 | 173,741 | 122 | 214,947 | 41,977 | 159,999 | 47 | 202,023 |
| MBS/ABS | 308 | 19,735 | 527 | 20,570 | 210 | 20,673 | 532 | 21,414 |
| Other | 806 | 1,636 | 1,843 | 4,285 | 627 | 1,762 | 1,548 | 3,938 |
| Equity securities | 30,032 | 822 | 7,117 | 37,972 | 32,932 | 776 | 6,915 | 40,624 |
| Subtotal | 101,641 | 393,954 | 22,247 | 517,843 | 104,174 | 365,396 | 18,796 | 488,365 |
| Financial assets for unit-linked contracts | 101,934 | 2,680 | 314 | 104,927 | 102,954 | 2,755 | 164 | 105,873 |
| Derivative financial instruments and firm commitments included in other assets |
– | 1,033 | – | 1,033 | – | 565 | – | 565 |
| Total | 207,595 | 401,606 | 22,762 | 631,964 | 211,155 | 371,770 | 19,145 | 602,071 |
| Financial liabilities | ||||||||
| Financial liabilities held for trading | 24 | 1,666 | 9,644 | 11,334 | 28 | 1,046 | 8,134 | 9,207 |
| Financial liabilities for unit-linked contracts | 101,934 | 2,680 | 314 | 104,927 | 102,954 | 2,755 | 164 | 105,873 |
| Derivative financial instruments and firm commitments included in other liabilities |
– | 260 | – | 260 | – | 472 | – | 472 |
| Financial liabilities for puttable equity instruments | 2,431 | 55 | 3 | 2,489 | 2,496 | 71 | 19 | 2,585 |
| Total | 104,388 | 4,662 | 9,961 | 119,011 | 105,478 | 4,343 | 8,317 | 118,137 |
1 Quoted prices in active markets
2 Market observable inputs
3 Non-market observable inputs
The valuation methodologies used for financial instruments carried at fair value, the policy for determining the levels within the fair value hierarchy, as well as the significant Level-3 portfolios, including the respective narratives and sensitivities, are described in the Allianz Group's Annual Report 2015. No material changes have occurred since this report was published.
In general, financial assets and liabilities are transferred from level 1 to level 2 when liquidity, trade frequency and activity are no longer indicative of an active market. Conversely, the same policy applies for transfers from level 2 to level 1.
The following tables show reconciliations of the financial instruments carried at fair value and classified as level 3.
| € mn | |||||
|---|---|---|---|---|---|
| Financial assets carried at fair value through income |
Available-for-sale investments – Debt securities1 |
Available-for-sale investments – Equity securities |
Financial assets for unit-linked contracts |
Total | |
| Carrying value (fair value) as of 1 January 2016 | 184 | 11,881 | 6,915 | 164 | 19,145 |
| Additions through purchases and issues | 8 | 2,862 | 852 | 32 | 3,755 |
| Net transfers into (out of) Level 3 | (30) | (42) | 99 | (1) | 26 |
| Disposals through sales and settlements | 105 | (482) | (533) | (1) | (911) |
| Net gains (losses) recognized in consolidated income statement | (64) | (65) | 22 | 1 | (106) |
| Net gains (losses) recognized in other comprehensive income | – | 954 | 16 | 1 | 971 |
| Impairments | – | (11) | (96) | – | (106) |
| Foreign-currency translation adjustments | (4) | (127) | (10) | – | (142) |
| Changes in the consolidated subsidiaries of the Allianz Group | 3 | 159 | (148) | 117 | 132 |
| Carrying value (fair value) as of 30 June 2016 | 201 | 15,130 | 7,117 | 314 | 22,762 |
| Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
55 | (43) | 2 | 2 | 16 |
| 1 Primarily include corporate bonds. |
| € mn | ||||
|---|---|---|---|---|
| Financial liabilities held for trading |
Financial liabilities for unit-linked contracts |
Financial liabilities for puttable equity instruments |
Total | |
| Carrying value (fair value) as of 1 January 2016 | 8,134 | 164 | 19 | 8,317 |
| Additions through purchases and issues | 1,576 | 32 | 1 | 1,611 |
| Net transfers into (out of) Level 3 | (26) | (1) | – | (28) |
| Disposals through sales and settlements | (903) | (1) | (18) | (921) |
| Net gains (losses) recognized in consolidated income statement | 1,024 | 1 | – | 1,026 |
| Net gains (losses) recognized in other comprehensive income | 1 | 1 | – | 2 |
| Impairments | – | – | – | – |
| Foreign-currency translation adjustments | (163) | – | – | (163) |
| Changes in the consolidated subsidiaries of the Allianz Group | – | 117 | – | 117 |
| Carrying value (fair value) as of 30 June 2016 | 9,644 | 314 | 3 | 9,961 |
| Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
2,043 | 2 | – | 2,045 |
Certain financial assets are measured at fair value on a non-recurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable.
If financial assets are measured at fair value on a non-recurring basis at the time of impairment or if fair value less cost to sell is used as the measurement basis under IFRS 5, corresponding disclosures can be found in note 27 – Impairments of investments (net).
As of 30 June 2016, the Allianz Group employed 142,697 (31 December 2015: 142,459) people.
As of 30 June 2016, there were no significant changes in contingent liabilities compared to the consolidated financial statements for the year ended 31 December 2015.
As of 30 June 2016, outstanding commitments to invest in private equity funds and similar financial instruments amounted to € 9,856 mn (31 December 2015: € 5,460 mn) and outstanding commitments to invest in real estate and infrastructure amounted to € 2,680 mn (31 December 2015: € 1,958 mn). All other commitments showed no significant changes.
The Insurance Laws (Amendment) Bill has become legally effective in the first quarter of 2015 and provides for raising the foreign investment cap in India from 26% to 49%. As per the 2001 joint venture agreement between the Allianz Group and Bajaj, the Allianz Group has the right to increase the stakes in Bajaj at pre-determined prices, if allowed under applicable laws, and subject to regulatory approvals. The Allianz Group is currently in the process of evaluating the contractual situation against the prevailing regulatory background.
The Allianz Group was not subject to any subsequent events that significantly impacted the Group's financial results after the balance sheet date and before the condensed consolidated interim financial statements were authorized for issue.
Munich, 4 August 2016
Allianz SE The Board of Management
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim group management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the material opportunities and risks associated with the expected development of the group.
Munich, 4 August 2016
Allianz SE The Board of Management
Oliver Bäte
Dr. Helga Jung
Dr. Dieter Wemmer
Sergio Balbinot
Dr. Christof Mascher
Dr. Werner Zedelius
Jacqueline Hunt
Dr.Axel Theis
Maximilian Zimmerer
We have reviewed the condensed interim consolidated financial statements of Allianz SE, Munich – comprising the consolidated balance sheets, consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, consolidated statements of cash flows and selected explanatory notes – together with the interim group management report of Allianz SE, Munich, for the period from January 1 to June 30, 2016 that are part of the semi annual financial report according to § 37w WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed interim consolidated financial statements in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting" as adopted by the EU, 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 interim consolidated financial statements and on the interim group management report based on our review.
We performed our review of the condensed interim consolidated 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 interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU, and that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the EU, 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, 4 August 2016
KPMG AG Wirtschaftsprüfungsgesellschaft
Klaus Becker Dr. Frank Pfaffenzeller Wirtschaftsprüfer Wirtschaftsprüfer
(Independent Auditor) (Independent Auditor)
Important dates for shareholders and analysts1
| Financial Results 3Q ______ 11 | November 2016 |
|---|---|
| Financial Results 2016 ______ 17 | February 2017 |
| Annual Report 2016 _________ | 10 March 2017 |
| Annual General Meeting ________ | 3 May 2017 |
| Financial Results 1Q ___________ 12 | May 2017 |
| Financial Results 2Q/Interim Report 6M _______ 4 | August 2017 |
| Financial Results 3Q ______ 10 | November 2017 |
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
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