Annual Report • May 27, 2013
Annual Report
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| three months ended 31 March | 2013 | 2012 | Change from previous year |
More details on page |
|
|---|---|---|---|---|---|
| Income statement | |||||
| Total revenues1 | €mn | 32,048 | 30,053 | 6.6% | 6 |
| Operating profit2, 3, 4 |
€mn | 2,797 | 2,333 | 19.9% | 7 |
| Net income2 | €mn | 1,801 | 1,451 | 24.1% | 8 |
| thereof: attributable to shareholders2 | €mn | 1,707 | 1,377 | 24.0% | 8 |
| Segments5 | |||||
| Property-Casualty | |||||
| Gross premiums written | €mn | 15,197 | 14,797 | 2.7% | 13 |
| Operating profit4 | €mn | 1,319 | 1,183 | 11.5% | 14 |
| Combined ratio | % | 94.3 | 96.2 | (1.9)%-p | 15 |
| Life/Health | |||||
| Statutory premiums | €mn | 14,837 | 13,699 | 8.3% | 21 |
| Operating profit4 | €mn | 855 | 825 | 3.6% | 22 |
| Margin on reserves | bps | 74 | 77 | (3) | 23 |
| Asset Management | |||||
| Operating revenues | €mn | 1,911 | 1,439 | 32.8% | 28 |
| Operating profit4 | €mn | 900 | 613 | 46.8% | 28 |
| Cost-income ratio | % | 52.9 | 57.4 | (4.5)%-p | 28 |
| Corporate and Other | |||||
| Total revenues | €mn | 148 | 155 | (4.5)% | 7 |
| Operating result4 | €mn | (239) | (274) | 12.8% | 30 |
| Balance sheet as of 31 March2, 6 |
|||||
| Total assets | €mn | 710,581 | 694,447 | 2.3% | 35 |
| Shareholders' equity | €mn | 51,950 | 50,388 | 3.1% | 34 |
| Non-controlling interests | €mn | 2,671 | 2,575 | 3.7% | 34 |
| Share information | |||||
| Basic earnings per share2 | € | 3.77 | 3.04 | 24.0% | 96 |
| Diluted earnings per share2 | € | 3.69 | 3.03 | 21.8% | 96 |
| Share price as of 31 March6 | € | 105.95 | 104.80 | 1.1% | 1 |
| Market capitalization as of 31 March6 | €mn | 48,308 | 47,784 | 1.1% | – |
| Other data | |||||
| Standard & Poor's rating7 | AA Stable outlook | AA Negative outlook | – | – | |
| Conglomerate solvency ratio6, 8 |
% | 183 | 197 | (14)%-p | 34 |
| Total assets under management as of 31 March6 | € Bn | 1,934 | 1,852 | 4.4% | 26 |
| thereof: third-party assets under management as of 31 March6 |
€ Bn | 1,517 | 1,438 | 5.5% | 26 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
5 The Allianz Group operates and manages its activities through four segments: Property-Casualty, Life/Health, Asset Management and Corporate and Other. For further information, please refer to note 3 to the condensed consolidated interim financial statements. 6 2012 figures as of 31 December 2012.
2 All prior period figures herein and throughout the entire Interim Report First Quarter of 2013 have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit. All prior period figures herein and throughout the entire Interim Report First Quarter of 2013 have been adjusted to conform to the current accounting presentation.
8 Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 31 March 2013 would be 174% (31 December 2012: 188%). The conglomerate solvency ratio decreased by approximately 16 percentage points as of 1 January 2013 due to amendments to IAS 19.
| Basic Share Information | 03 |
|---|---|
| Security codes | WKN 840 400 |
| ISIN DE 000 840 400 5 | |
| Bloomberg | ALV GR |
| Reuters | 0#ALVG.DEU |
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Important dates for shareholders and analysts see financial calendar (back cover)
Pages 3–44
Allianz SE and its subsidiaries (the Allianz Group) have operations in over 70 countries. The Group's results are reported by business segment: Property-Casualty insurance, Life/Health insurance, Asset Management and Corporate and Other activities.
Total revenues went up 6.6% to €32.0 bn with all operating segments generating solid revenue growth. On an internal basis2, revenues rose by 6.1%.
Operating profit increased 19.9% to €2,797 mn, with our Asset Management segment contributing more than half of this increase. Our Property-Casualty business generated solid operating profit growth, and Life/Health managed to expand in a challenging environment.
Net income amounted to €1,801 mn, driven by our strong operating performance development and a lower effective tax rate.
Our solvency ratio decreased by 14 percentage points to 183%1 compared to year-end 2012. Excluding the negative impact of a change in accounting for pensions, our solvency ratio would have strengthened 2 percentage points over the year-end figure.
Operating profit +19.9%
| key figures Allianz group | A 02 | ||
|---|---|---|---|
| � mn three months ended 31 March |
2013 | 2012 | 2011 |
| Total revenues | 32,048 | 30,053 | 29,905 |
| Operating profit3, 4 |
2,797 | 2,333 | 1,646 |
| Net income3 | 1,801 | 1,451 | 907 |
| Solvency ratio1, 5 |
183 | 197 | 179 |
3 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
4 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation. 5 2012 and 2011 solvency figures as of 31 December 2012 and 2011, respectively.
1 Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 31 March 2013 would be 174% (31 December 2012: 188%; 31 December 2011: 170%). The conglomerate solvency ratio decreased by approximately 16 percentage points as of 1 January 2013 due to amendments to IAS 19.
2 Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 43 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of our segments and the Allianz Group as a whole.
A low level of natural catastrophes, a prolonged but not extreme winter season in Europe and relatively stable market conditions resulted in a very good start for Allianz in 2013. Net losses from natural catastrophes in the first quarter of 2013 were relatively benign, albeit slightly higher than the low level experienced in the first quarter of 2012.
As we moved through the first months of 2013, the economic picture remained mixed. The economic performance in Eurozone member countries was still adversely affected by the repercussions of the sovereign debt crisis. Due to weather conditions, which weighed above all on construction activity, in particular in Europe, economic performance in the first quarter of 2013 is likely to have actually been somewhat below the weak figure originally expected just a few months ago.
With the apparent lull in the European sovereign debt crisis continuing, there was an upswing in many major equity markets in the first quarter of 2013. Major sovereign interest rates were generally stable, with Italy and Spain as two exceptions. Corporate credit spreads (for A-rated debtors in the USA and the Eurozone) were in general steady.
Clearly, however, the low interest rate environment and Eurozone uncertainties remain and we saw lingering market effects still affecting the demand for certain of our investment-related life products, for example in the United States.
Total revenues increased from €30.1 bn to €32.0 bn. All our operating segments contributed to this positive development, in particular our Life/Health business. On an internal basis, revenues grew by 6.1%.
We earned a strong operating profit of €2,797 mn, up 19.9%. Our Asset Management segment again delivered an excellent performance driven by higher revenues and our operational efficiency. Property-Casualty insurance generated a higher underwriting result supported by a favorable pricing environment and positive claims experience. Our Life/ Health segment also contributed to this growth, although to a lesser extent due to a decrease in the operating investment margin offset by lower acquisition and administrative expenses. The operating loss from the Corporate and Other segment improved largely due to a better net interest result in Holding & Treasury.
Overall, net income grew by 24.1% to €1,801 mn. This reflected the solid performance of all our operating segments and a 2.6 percentage point decrease in the effective tax rate, despite a slight worsening of our non-operating result.
We further strengthened our capitalization. Shareholders' equity increased 3.1% to €51,950 mn compared to 31 December 2012 (as restated) and the conglomerate solvency ratio fell by 14 percentage points to 183%. This decrease was mainly due to the decline in shareholder's equity as of 1 January 2013 as a result of the retrospective application of the amendments to IAS 19.1 Excluding this impact, our solvency ratio would have strengthened 2 percentage points over the year-end figure.
1 Total revenues include €(45) mn, €(37) mn and €(40) mn from consolidation for 1Q 2013, 2012 and 2011, respectively.
1 In contrast to the reported IFRS figures, the conglomerate solvency figures have not been restated for the previous reporting year(s). For further details on the amendments to IAS 19, please refer to note 2 to the condensed consolidated interim financial statements.
2 Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
Property-Casualty gross premiums written went up by 2.7% to €15,197 mn. On an internal basis, gross premiums increased by 1.3% mainly due to a positive price effect. The largest contributors to this growth were our subsidiaries in Germany, Turkey and Latin America.
Life/Health statutory premiums increased to €14,837 mn, up 8.5% on an internal basis. The rise was driven by a significant increase in premiums from investment-oriented products in Italy, Germany and Belgium/Luxembourg, supported by a slight improvement in premiums from traditional products.
In Asset Management our internal revenue growth amounted to 33.9% benefiting from higher performance fees in the quarter, the strong increase of €281 bn in total assets under management versus 31 March 2012 as well as higher margins. As of 31 March 2013, we had total assets under management of €1,934 bn. Third-party net inflows amounted to €43 bn in the first quarter of 2013.
Total revenues from our Banking operations (reported in the Corporate and Other segment) stood at €148 mn, down 4.5% on an internal basis.
Our Property-Casualty operating profit grew by €136 mn to €1,319 mn. Our underwriting result rose by €207 mn to €540 mn benefiting from an improvement in our accident year loss ratio due to a positive claims experience, supported by positive price movements. It was partially offset by less run-off compared to the first quarter of 2012. Overall, the combined ratio improved by 1.9 percentage points to an excellent level of 94.3%.
Life/Health operating profit increased by €30 mn to €855 mn, impacted by a decrease in the operating investment result, due to a lower hedge result and lower realizations on equities, but benefiting from lower acquisition and administrative expenses.
The excellent performance by Asset Management continued and operating profit went up €287 mn to €900 mn. This reflects the strong growth in revenues and our expense discipline. Our cost-income ratio improved to 52.9%.
Despite restructuring charges of €88 mn related to the planned closure of Allianz Bank, the Corporate and Other operating loss improved by €35 mn to €(239) mn due to a higher net interest result in Holding & Treasury, which benefited from the resumption of interest payments on a silent participation in Commerzbank. In addition, we achieved a better Alternative Investment result.
Our non-operating result was down by €31 mn to €(119) mn, mainly due to the decrease of €29 mn in our non-operating investment result. Within our non-operating investment result, higher realized gains and lower impairments of investments were more than offset by a decrease in our income from financial assets and liabilities carried at fair value through income.
Non-operating income from financial assets and liabilities carried at fair value through income (net) fell by €232 mn to a loss of €4 mn, as the previous year's figure benefited from the positive valuation effects of The Hartford warrants, which were sold in April 2012.
Non-operating realized gains and losses (net) more than doubled from €116 mn to €267 mn, mainly due to higher realizations on debt securities in our Property-Casualty business because of portfolio adjustments.
Non-operating impairments of investments (net) were down by €52 mn to €71 mn due to lower impairments on equities. In the first quarter of 2012 we recorded impairments on our equity investments in the financial sector.
Our non-operating interest expenses from external debt decreased by €18 mn to €241 mn. Due to the lower interest rate environment, bonds issued since the first quarter of 2012 have a lower yield than those subsequently matured or redeemed.
Non-operating acquisition-related expenses rose by €13 mn to €25 mn, primarily because of PIMCO B-unit expenses.
Non-operating amortization of intangible assets increased from €25 mn to €41 mn, mainly due to a goodwill impairment.
Income tax expenses increased by €83 mn to €877 mn in the first quarter of 2013, driven by higher income before income taxes partly compensated by the positive effect of a lower effective tax rate (32.8% in the first quarter of 2013 vs. 35.4% in the first quarter of 2012). The decrease in the effective tax rate was mainly due to a lower charge from trade tax and higher tax-exempted income in the first quarter of 2013.
Net income increased by €350 mn to €1,801 mn due to our strong operational performance. Net income attributable to shareholders and non-controlling interests amounted to €1,707 mn (1Q 2012: €1,377 mn) and €94 mn (1Q 2012: €74 mn), respectively. Our largest non-controlling interest in net income relates to Euler Hermes.
| Total revenues and reconciliation of operating profit to net income | A 06 |
|---|---|
| ٠ I |
||
|---|---|---|
| ٠ | . | |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2013 | 2012 |
| Total revenues1 | 32,048 | 30,053 |
| Premiums earned (net) | 16,672 | 16,442 |
| Operating investment result | ||
| Interest and similar income | 5,167 | 5,132 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (221) | (134) |
| Operating realized gains/losses (net) | 879 | 1,072 |
| Interest expenses, excluding interest expenses from external debt | (110) | (123) |
| Operating impairments of investments (net) | (63) | (65) |
| Investment expenses | (208) | (197) |
| Subtotal | 5,444 | 5,685 |
| Fee and commission income | 2,754 | 2,145 |
| Other income | 60 | 51 |
| Claims and insurance benefits incurred (net) | (11,638) | (11,991) |
| Change in reserves for insurance and investment contracts (net)2 | (4,099) | (3,807) |
| Loan loss provisions | (14) | (46) |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | (5,464) | (5,442) |
| Fee and commission expenses | (778) | (684) |
| Restructuring charges | (94) | (8) |
| Other expenses | (46) | (19) |
| Reclassification of tax benefits | – | 7 |
| Operating profit | 2,797 | 2,333 |
| Non-operating investment result | ||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (4) | 228 |
| Non-operating realized gains/losses (net) | 267 | 116 |
| Non-operating impairments of investments (net) | (71) | (123) |
| Subtotal | 192 | 221 |
| Income from fully consolidated private equity investments (net) | (4) | (6) |
| Interest expenses from external debt | (241) | (259) |
| Acquisition-related expenses | (25) | (12) |
| Amortization of intangible assets | (41) | (25) |
| Reclassification of tax benefits | – | (7) |
| Non-operating items | (119) | (88) |
| Income before income taxes | 2,678 | 2,245 |
| Income taxes | (877) | (794) |
| Net income | 1,801 | 1,451 |
| Net income attributable to: | ||
| Non-controlling interests | 94 | 74 |
| Shareholders | 1,707 | 1,377 |
| Basic earnings per share in € | 3.77 | 3.04 |
| Diluted earnings per share in € | 3.69 | 3.03 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the three months ended 31 March 2013, expenses for premium refunds (net) in Property-Casualty of €(63) mn (2012: €(26) mn) are included.
Risk management is an integral part of our business and supports our value-based management. For further information we refer you to the Risk Report in our Annual Report 2012. The Allianz Group's management feels comfortable with the Group's overall risk profile and has confidence in the effectiveness of its risk management framework to meet the challenges of a rapidly changing environment as well as day-to-day business needs. The risk profile described in the latest Risk Report remains unchanged. However, Allianz continues to be exposed to two external forces which adversely affect our risk profile and would not normally be associated with our core operating activities: the European sovereign debt crisis and regulatory developments – especially the European solvency directive, Solvency II.
For Eurozone bond markets, conditions generally improved during the first quarter of 2013, with an overall reduction in yield levels despite temporary uncertainty related to the inconclusive election outcome in Italy and developments in Cyprus. Allianz's exposure to Cyprus is very limited and the Group was not hit by the bank restructuring in the country. However, market volatility and the low interest rates may continue to have adverse implications for Allianz's risk profile through our business development, asset values and the value of our liabilities.
Our management continuously monitors and responded decisively to these external developments. During 2012, we executed a derisking program focused primarily on our peripheral sovereign exposures and our exposure to financial institutions, which has also continued in the first quarter of 2013. Looking forward, our robust action plan to deal with the Euro crisis has bolstered our financial and operational resilience to strong shock scenarios. Continuous monitoring remains a priority to ensure the sustained effectiveness of our contingency measures.
Although details of future regulatory requirements, especially Solvency II and those defining systemically relevant financial institutions, are becoming clearer, the final rules are still evolving. As well as leading to delays in the introduction of the Solvency II framework, the lack of final rules for both Solvency II and systemically relevant financial institutions creates uncertainties for our business and in terms of the ultimate capital requirements for Allianz.
In addition, due to the market value balance sheet approach, the Solvency II regime is expected to lead to higher volatility in regulatory capital requirements compared to Solvency I, specifically with regard to long-term asset accumulation and savings products in the life insurance segment. Therefore, product design, investment strategies and hedging programs will likely need to be adapted throughout the industry to mitigate this volatility.
In May 2013, Allianz SE has called for redemption a subordinated bond with an outstanding amount of U.S. Dollar 2 bn and a coupon of 8.375% p.a. Repayment will be in June 2013.
Allianz and Yapi Kredi have reached an agreement to enter into a 15-year exclusive distribution agreement and for Allianz to acquire Yapi Kredi Sigorta, the Property-Casualty insurer, including its subsidiary Yapi Kredi Emeklilik, the life and pension business. The transaction is expected to be closed during the second half of 2013 and is subject to regulatory and competition board approvals.
A Group Management Report
The Allianz Group's business operations and structure are described in the Business Operations and Markets chapter starting on page 93 of our Annual Report 2012. In 2013, our global entities Allianz Global Automotive, Allianz Global Assistance, Allianz Worldwide Care and the international health insurance business of Allianz France are expected to be bundled to provide a comprehensive product range to our customers.
The Allianz Group's strategy is described in the Our Strategy chapter starting on page 106 of our Annual Report 2012. There have been no material changes to our Group strategy since.
For an overview of the products and services offered by the Allianz Group, as well as sales channels, please refer to the Business Operations and Markets chapter starting on page 93 of our Annual Report 2012. Information on our brand can also be found in the Our Progress in Sustainable Development chapter on page 110 of our Annual Report 2012.
Our Property-Casualty business offers a wide range of products and services for both private and corporate clients. Our offerings cover many insurance classes such as accident/disability, property, general liability and motor. We conduct business worldwide in more than 50 countries. We are also a global leader in travel insurance, assistance services and credit insurance. We distribute our products via a broad network of agents, brokers, banks and other strategic partners, as well as through direct channels.
Gross premiums written increased 2.7% to €15.2 bn benefiting from growth in Germany, Turkey and Latin America. On an internal basis1, gross premiums grew by 1.3% driven by a positive price effect.
Our operating profit went up 11.5% to €1,319 mn. The underwriting result increased by €207 mn to €540 mn driven by an improvement in our accident year loss ratio and our positive price momentum. Our investment income decreased by €76 mn to €763 mn.
The combined ratio was 94.3% compared to 96.2% in the first quarter of 2012.
| key figures property-casualty | A 08 | ||
|---|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 | 2011 |
| Gross premiums written | 15,197 | 14,797 | 14,251 |
| Operating profit2, 3 |
1,319 | 1,183 | 656 |
| Loss ratio in % | 66.1 | 68.3 | 73.3 |
| Expense ratio in % | 28.2 | 27.9 | 28.0 |
| Combined ratio2 in % | 94.3 | 96.2 | 101.3 |
1 Gross premiums written adjusted for foreign currency translation and (de-)consolidation effects.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation.
2 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
A Group Management Report
Gross premiums written grew by 1.3% due to a positive price effect of 1.8% offset by a negative volume effect of 0.5%. Most of the growth stemmed from our subsidiaries in Germany, Turkey and Latin America.
On a nominal basis, gross premiums written rose by 2.7% to €15,197 mn. Unfavorable foreign currency translation effects accounted for €123 mn, mainly due to the depreciation of the Brazilian Real against the Euro.2
Analyzing internal premium growth in terms of price and volume, we use four clusters based on 1Q 2013 internal growth over 1Q 2012:
Cluster 1:
Overall growth – both price and volume effects are positive.
Cluster 2: Overall growth – either price or volume effects are positive.
Cluster 3: Overall decline – either price or volume effects are positive.
Cluster 4:
Overall decline – both price and volume effects are negative.
Gross premiums written by operating entity –
Internal growth rates1 A 09
1Q 2013 over 1Q 2012 1Q 2012 over 1Q 2011 Cluster
1 Before elimination of transactions between Allianz Group companies in different geographic regions and different segments.
(40) 0(20) 20 40 60
In Turkey gross premiums increased 44.5% to €211 mn. The strong growth was mostly driven by our motor business through tied agents.
In Latin America we generated gross premiums of €567 mn, up 10.8% on an internal basis. We benefited from strong growth in all countries. The main driver continues to be our motor business in Brazil with positive impacts from both price and volume.
In the United Kingdom gross premiums amounted to €595mn. The internal growth of 6.9% reflected both higher volumes and tariff increases across most lines of business.
In Australia gross premiums rose to €685 mn. Our internal growth of 3.9% largely benefited from price increases in our motor business.
In Italy gross premiums amounted to €978 mn. The rise of 2.6% was supported by price increases and volume growth in our motor business, particularly in our direct channel.
In Asia-Pacific we recorded gross premiums of €180 mn. On an internal basis, we grew by 20.4% mainly due to strong growth in our Malaysian motor business. The price effect was negative.
In Germany gross premiums went up 2.7% to €4,000 mn. This was driven by tariff increases in our motor and retail property business and was partly offset by volume declines in our non-motor business. The price effect was positive.
In our Credit Insurance business, gross premiums amounted to €599 mn. On an internal basis, we grew by 2.1% benefiting from the acquisition of new customers, especially in growth markets. The price effect was slightly negative.
In France we generated gross premiums of €1,465 mn, up 2.0% on an internal basis. This increase was due to price increases in our personal and commercial lines which more than offset the slight volume declines.
In Spain gross premiums were up 1.2% to €614 mn driven by strong volume growth in our motor and non-motor business. Difficult market conditions put pressure on prices in our motor and commercial business which led to a negative price effect.
In Switzerland gross premiums slightly decreased to €952 mn, down by 0.8% on an internal basis. We experienced a slight volume increase mainly in our motor business. However, this was more than offset by a negative price effect.
At AGCS we recorded gross premiums of €1,566 mn. The decline of 3.1% on an internal basis was mainly attributable to volume effects in our property and marine lines. The price effect was slightly positive.
In the United States we recorded gross premiums of €452 mn. On an internal basis, gross premiums decreased by 30.6% largely due to the expected reduction in our crop business and declines in our commercial lines which were impacted by our strict underwriting rules. The price effect was positive because of strong price increases in our commercial lines.
In Central and Eastern Europe gross premiums amounted to €692 mn, down by 1.8% on an internal basis. The decrease in gross premiums was mainly due to the expiry of a large contract and volume declines in our motor business in Hungary and Slovakia. However, Russia recorded higher volumes. The price effect in the region was slightly negative.
| Operating Profit | A 10 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Underwriting result | 540 | 333 |
| Operating investment income | 763 | 839 |
| Other result1 | 16 | 11 |
| Operating profit | 1,319 | 1,183 |
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
A Group Management Report
We analyze the operating profit in the Property-Casualty segment in terms of underwriting result, operating investment income and other result1.
Operating profit increased by €136 mn to €1,319 mn driven by our improved underwriting result.
Our underwriting result grew by €207 mn to €540 mn benefiting from an improvement in our accident year loss ratio of 3.4 percentage points supported by an overall positive claims experience and favorable price movements. It was partially offset by less run-off and higher expenses compared to the first quarter of 2012.
The combined ratio improved by 1.9 percentage points to 94.3%.
| Underwriting result | A 11 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Premiums earned (net) | 10,312 | 10,081 |
| Accident year claims | (6,964) | (7,146) |
| Previous year claims (run-off) | 151 | 264 |
| Claims and insurance benefits incurred (net) | (6,813) | (6,882) |
| Acquisition and administrative expenses (net) | (2,909) | (2,812) |
| Change in reserves for insurance and investment contracts (net) (without expenses for premium |
||
| refunds)1 | (50) | (54) |
| Underwriting result | 540 | 333 |
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 28 to the condensed consolidated interim financial statements.
Our accident year loss ratio was 67.5%, down 3.4 percentage points compared to the previous year. Net losses from natural catastrophes increased slightly from € 42 mn to €70 mn. The impact of natural catastrophes increased by only 0.3 percentage points to 0.7 %. We experienced rather benign weather conditions in both the current and the first quarter of 2012.
Excluding natural catastrophes, our accident year loss ratio was 66.8%, a 3.7 percentage point improvement compared to the first quarter of 2012. Favorable developments were recorded across the portfolio. This was due to a positive claims experience supported by a continued positive price momentum – especially in our motor business – and favorable weather conditions.
The following operations contributed positively to the development of our accident year loss ratio:
Germany: 0.9 percentage points. The positive impact was due to lower claims from natural catastrophes, weatherrelated and attritional claims. It was further supported by favorable price trends, particularly in our motor business.
Italy: 0.8 percentage points. This was driven by a continued improvement in motor claims frequency and supported by an increase in the average premium. We also benefited from favorable weather conditions compared to the first quarter of 2012.
France: 0.4 percentage points. This resulted from a lower level of severe weather claims, reduced large claims and continued favorable development of frequency in our motor business.
Reinsurance: 0.4 percentage points. This improvement was mainly attributable to a positive claims experience in our non-catastrophe business.
Our run-off result decreased by €113 mn to €151 mn.
In the first quarter of 2013, total expenses stood at €2,909 mn, compared to €2,812 mn in the first quarter of 2012. Our expense ratio increased by 0.3 percentage points to 28.2%. This increase includes the impacts from regulatory changes at our business in Brazil (policy collection fee), structural changes in our portfolio in the United States (reduced crop business) and the acquisition of the Gan Eurocourtage business in France (distribution exclusively via brokers carrying higher acquisition costs).
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
| € mn three months ended 31 March |
2013 | 2012 |
|---|---|---|
| Interest and similar income (net of interest expenses) |
872 | 928 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
8 | 2 |
| Operating realized gains/losses (net) | 15 | 5 |
| Operating impairments of investments (net) | (1) | (3) |
| Investment expenses | (68) | (67) |
| Expenses for premium refunds (net)2 | (63) | (26) |
| Operating investment income | 763 | 839 |
1 The operating investment income for our Property-Casualty segment consists of the operating investment result – as shown in note 3 to the condensed consolidated interim financial statements – and expenses for premium refunds (net) (policyholder participation) as shown in note 28 to the condensed consolidated interim financial statements.
2 Refers to policyholder participation, mainly from UBR (accident insurance with premium refunds) business, and consists of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 28 to the condensed consolidated interim financial statements.
Operating investment income decreased by €76 mn to €763 mn, mainly due to lower interest and similar income (net of interest expenses) and higher expenses for premium refunds.
Interest and similar income (net of interest expenses) fell by €56 mn to €872 mn. The decline was mainly because of lower interest rates as well as the impacts from the derisking measures of our investment portfolio. The total average asset base grew by 7.9%, from €98.8 bn in the first quarter of 2012 to €106.6 bn in the first quarter of 2013. This growth could not offset the negative effect of decreasing yields.
Expenses for premium refunds (net) increased by €37 mn to €63 mn due to a higher policyholder participation, mainly from our UBR (accident insurance with premium refunds) business.
| Other result | A 13 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Fee and commission income | 290 | 290 |
| Other income | 8 | 7 |
| Fee and commission expenses | (275) | (276) |
| Other expenses | (5) | (4) |
| Restructuring charges | (2) | (6) |
| Other result | 16 | 11 |
| € mn three months ended 31 March |
2013 | 2012 |
|---|---|---|
| Gross premiums written1 | 15,197 | 14,797 |
| Ceded premiums written | (1,310) | (1,463) |
| Change in unearned premiums | (3,575) | (3,253) |
| Premiums earned (net) | 10,312 | 10,081 |
| Interest and similar income | 887 | 939 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 8 | 2 |
| Operating realized gains/losses (net) | 15 | 5 |
| Fee and commission income | 290 | 290 |
| Other income | 8 | 7 |
| Operating revenues | 11,520 | 11,324 |
| Claims and insurance benefits incurred (net) | (6,813) | (6,882) |
| Change in reserves for insurance and investment contracts (net) | (113) | (80) |
| Interest expenses | (15) | (11) |
| Operating impairments of investments (net) | (1) | (3) |
| Investment expenses | (68) | (67) |
| Acquisition and administrative expenses (net) | (2,909) | (2,812) |
| Fee and commission expenses | (275) | (276) |
| Restructuring charges Other expenses |
(2) (5) |
(6) (4) |
| Operating expenses | (10,201) | (10,141) |
| Operating profit | 1,319 | 1,183 |
| Loss ratio2 in % | 66.1 | 68.3 |
| Expense ratio3 in % | 28.2 | 27.9 |
| Combined ratio4 in % | 94.3 | 96.2 |
Property-Casualty segment information A 14
1 For the Property-Casualty segment, total revenues are measured based upon gross premiums written.
3 Represents acquisition and administrative expenses (net) divided by premiums earned (net). 4 Represents the total of acquisition and administrative expenses (net) and claims and insur-
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
ance benefits incurred (net) divided by premiums earned (net).
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | Premiums earned (net) | Operating profit (loss) | ||||||
| internal 1 | ||||||||
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany2 | 4,000 | 3,893 | 4,000 | 3,893 | 1,851 | 1,803 | 319 | 195 |
| Switzerland | 952 | 976 | 968 | 976 | 369 | 375 | 59 | 54 |
| Austria | 350 | 338 | 350 | 338 | 199 | 192 | 18 | 16 |
| German Speaking Countries3 | 5,310 | 5,214 | 5,326 | 5,214 | 2,423 | 2,374 | 398 | 266 |
| Italy | 978 | 953 | 978 | 953 | 966 | 958 | 206 | 163 |
| France 4 | 1,465 | 1,138 | 1,161 | 1,138 | 934 | 801 | 103 | 96 |
| Netherlands | 270 | 251 | 270 | 249 | 170 | 174 | 10 | (2) |
| Turkey | 211 | 146 | 211 | 146 | 130 | 91 | 17 | 3 |
| Belgium 5 | 144 | 109 | 110 | 106 | 104 | 73 | 9 | 9 |
| Greece | 30 | 30 | 30 | 30 | 20 | 23 | 4 | 6 |
| Africa | 38 | 36 | 38 | 36 | 14 | 13 | 1 | 2 |
| Western & Southern Europe6 | 3,136 | 2,663 | 2,798 | 2,658 | 2,338 | 2,133 | 354 | 281 |
| Latin America | 567 | 566 | 627 | 566 | 440 | 380 | 39 | 39 |
| Spain | 614 | 607 | 614 | 607 | 447 | 450 | 51 | 75 |
| Portugal | 117 | 120 | 117 | 120 | 65 | 63 | 4 | 9 |
| Iberia & Latin America | 1,298 | 1,293 | 1,358 | 1,293 | 952 | 893 | 94 | 123 |
| United States | 452 | 656 | 455 | 656 | 463 | 528 | 47 | 36 |
| USA | 452 | 656 | 455 | 656 | 463 | 528 | 47 | 36 |
| Allianz Global Corporate & Specialty | 1,566 | 1,624 | 1,574 | 1,624 | 730 | 824 | 92 | 117 |
| Reinsurance PC2 | 1,454 | 1,490 | 1,364 | 1,490 | 734 | 766 | 44 | 64 |
| Australia | 685 | 675 | 701 | 675 | 599 | 544 | 65 | 67 |
| United Kingdom | 595 | 568 | 607 | 568 | 517 | 518 | 55 | 33 |
| Credit Insurance | 599 | 591 | 588 | 576 | 344 | 322 | 88 | 100 |
| Ireland 7 | 112 | 121 | 112 | 121 | 93 | 98 | 7 | 17 |
| Global Insurance Lines & Anglo Markets8 | 5,011 | 5,069 | 4,946 | 5,054 | 3,017 | 3,072 | 351 | 398 |
| Russia | 220 | 205 | 224 | 205 | 146 | 155 | – | (1) |
| Poland | 109 | 109 | 108 | 109 | 85 | 91 | 3 | 4 |
| Hungary | 86 | 114 | 86 | 114 | 56 | 58 | 6 | 12 |
| Slovakia | 105 | 109 | 105 | 109 | 66 | 64 | 13 | 15 |
| Czech Republic | 74 | 78 | 76 | 78 | 57 | 57 | 6 | 7 |
| Romania | 49 | 47 | 49 | 47 | 36 | 36 | 1 | 1 |
| Bulgaria | 15 | 15 | 15 | 15 | 17 | 17 | 5 | 4 |
| Croatia | 28 | 29 | 28 | 29 | 19 | 19 | 3 | 3 |
| Ukraine | 6 | 4 | 6 | 4 | 2 | 2 | 1 | – |
| Central and Eastern Europe9 | 692 | 710 | 697 | 710 | 484 | 499 | 36 | 44 |
| Asia-Pacific | 180 | 152 | 183 | 152 | 89 | 76 | 19 | 15 |
| Middle East and North Africa | 20 | 18 | 20 | 18 | 12 | 12 | 2 | – |
| Growth Markets | 892 | 880 | 900 | 880 | 585 | 587 | 57 | 59 |
| Allianz Global Assistance | 526 | 473 | 527 | 473 | 435 | 409 | 14 | 14 |
| Allianz Worldwide Care7 | 177 | 140 | 177 | 140 | 97 | 85 | 8 | 6 |
| Allianz Worldwide Partners10 | 720 | 613 | 721 | 613 | 534 | 494 | 18 | 20 |
| Consolidation and Other11 | (1,622) | (1,591) | (1,534) | (1,586) | – | – | – | – |
| Total | 15,197 | 14,797 | 14,970 | 14,782 | 10,312 | 10,081 | 1,319 | 1,183 |
1 This reflects gross premiums written on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects).
premiums written of €7 mn, premiums earned (net) of €4 mn and operating profit of €1 mn for 1Q 2012.
2 The combined ratio at Germany and Reinsurance PC was impacted by a one-off effect related to the commutation of internal reinsurance resulting in a 3.5 percentage point improvement in the combined ratio for Germany and an increase of 8.9 percentage points in Reinsurance PC. This had no impact at Group level.
4 Effective as of 1 October 2012, Allianz France acquired the Property-Casualty brokerage portfolio-related activities (excluding transport) of Gan Eurocourtage.
5 Effective as of 1 August 2012, Allianz Belgium acquired the assets and assumed the liabilities related to the insurance activities of Mensura.
3 Includes "Münchener und Magdeburger Agrarversicherung AG" with gross premiums written of €8 mn, premiums earned (net) of €4 mn and operating profit of €2 mn for 1Q 2013 and gross 6 Contains €4 mn and €4 mn operating profit for 1Q 2013 and 1Q 2012, respectively, from a management holding located in Luxembourg.
| % | Combined ratio | Loss ratio | Expense ratio | |||
|---|---|---|---|---|---|---|
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany2 | 91.4 | 98.0 | 68.3 | 70.5 | 23.1 | 27.5 |
| Switzerland | 89.7 | 92.2 | 68.6 | 71.8 | 21.1 | 20.4 |
| Austria | 96.4 | 98.1 | 68.8 | 70.9 | 27.6 | 27.2 |
| German Speaking Countries3 | 91.5 | 97.0 | 68.4 | 70.7 | 23.1 | 26.3 |
| Italy | 85.6 | 91.6 | 61.4 | 67.6 | 24.2 | 24.0 |
| France4 | 96.5 | 98.6 | 70.0 | 73.3 | 26.5 | 25.3 |
| Netherlands | 99.9 | 104.7 | 70.9 | 75.5 | 29.0 | 29.2 |
| Turkey | 92.0 | 103.4 | 66.3 | 75.4 | 25.7 | 28.0 |
| Belgium5 | 95.7 | 99.5 | 68.2 | 65.2 | 27.5 | 34.3 |
| Greece | 84.2 | 78.1 | 49.5 | 47.9 | 34.7 | 30.2 |
| Africa | 95.7 | 89.9 | 65.7 | 63.3 | 30.0 | 26.6 |
| Western & Southern Europe6 | 91.9 | 95.9 | 66.1 | 70.4 | 25.8 | 25.5 |
| Latin America | 97.6 | 97.5 | 65.3 | 67.9 | 32.3 | 29.6 |
| Spain | 92.9 | 89.4 | 72.8 | 69.5 | 20.1 | 19.9 |
| Portugal | 99.4 | 91.8 | 75.8 | 68.7 | 23.6 | 23.1 |
| Iberia & Latin America | 95.5 | 93.1 | 69.6 | 68.8 | 25.9 | 24.3 |
| United States | 101.5 | 105.5 | 65.6 | 70.7 | 35.9 | 34.8 |
| USA | 101.5 | 105.5 | 65.6 | 70.7 | 35.9 | 34.8 |
| Allianz Global Corporate & Specialty | 97.3 | 95.5 | 69.4 | 67.1 | 27.9 | 28.4 |
| Reinsurance PC2 | 96.3 | 95.7 | 54.1 | 67.1 | 42.2 | 28.6 |
| Australia | 99.5 | 99.9 | 73.7 | 75.8 | 25.8 | 24.1 |
| United Kingdom | 95.2 | 99.0 | 63.4 | 64.2 | 31.8 | 34.8 |
| Credit Insurance | 84.9 | 76.6 | 57.7 | 50.2 | 27.2 | 26.4 |
| Ireland 7 | 98.8 | 92.4 | 64.6 | 63.3 | 34.2 | 29.1 |
| Global Insurance Lines & Anglo Markets8 | 95.9 | 95.0 | 64.1 | 66.4 | 31.8 | 28.6 |
| Russia | 105.3 | 102.5 | 64.7 | 60.3 | 40.6 | 42.2 |
| Poland | 101.0 | 99.9 | 66.8 | 67.0 | 34.2 | 32.9 |
| Hungary | 103.9 | 90.8 | 63.4 | 52.2 | 40.5 | 38.6 |
| Slovakia | 87.2 | 83.2 | 57.2 | 53.1 | 30.0 | 30.1 |
| Czech Republic | 90.3 | 92.4 | 63.9 | 63.6 | 26.4 | 28.8 |
| Romania | 101.5 | 102.4 | 71.8 | 79.3 | 29.7 | 23.1 |
| Bulgaria | 71.2 | 81.4 | 40.7 | 50.2 | 30.5 | 31.2 |
| Croatia | 90.9 | 92.5 | 54.6 | 56.1 | 36.3 | 36.4 |
| Ukraine | 105.5 | 95.7 | 54.6 | 45.9 | 50.9 | 49.8 |
| Central and Eastern Europe9 | 98.4 | 96.0 | 63.1 | 60.8 | 35.3 | 35.2 |
| Asia-Pacific | 87.9 | 90.2 | 57.2 | 61.5 | 30.7 | 28.7 |
| Middle East and North Africa | 95.5 | 111.1 | 62.9 | 77.4 | 32.6 | 33.7 |
| Growth Markets | 96.8 | 95.4 | 62.3 | 61.2 | 34.5 | 34.2 |
| Allianz Global Assistance | 98.5 | 98.3 | 63.4 | 62.0 | 35.1 | 36.3 |
| Allianz Worldwide Care7 | 92.2 | 93.3 | 75.4 | 75.9 | 16.8 | 17.4 |
| Allianz Worldwide Partners10 | 98.3 | 97.6 | 65.5 | 64.4 | 32.8 | 33.2 |
| Consolidation and Other11 | – | – | – | – | – | – |
| Total | 94.3 | 96.2 | 66.1 | 68.3 | 28.2 | 27.9 |
7 From the third quarter of 2012 onwards, Allianz Worldwide Care was transferred from Global Insurance Lines & Anglo Markets to Allianz Worldwide Partners. Prior year figures have been adjusted.
10 The business division Allianz Worldwide Partners includes the legal entities of Allianz Global Assistance and Allianz Worldwide Care as well as the reinsurance business of Allianz Global Automotive and income and expenses of a management holding. The set-up of this division will be further enhanced during the following quarters. The reinsurance business of Allianz Global Automotive contributes with gross premiums written of €17 mn, premiums earned (net) of €2 mn and an operating profit of €(3) mn for 1Q 2013.
8 Contains €(0.2) mn and €(0.1) mn operating profit (loss) for 1Q 2013 and 2012, respectively, from AGF UK. 9 Contains income and expense items from a management holding and consolidations between countries in this region.
11 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Allianz offers a broad range of life, health, savings and investment-oriented products, including individual and group life insurance contracts. Via our distribution channels – mainly tied agents, brokers and bank partnerships – we offer life and health products to both private and corporate clients. As one of the worldwide market leaders in life business we serve customers in more than 45 countries.
Statutory premiums increased to €14.8 bn. On an internal basis1, premiums increased by 8.5%. The significant growth in premiums in our investment-oriented products in Italy, Germany and Belgium/Luxembourg more than compensated for the premium decrease in the United States. In our traditional life business we recorded a slight increase in premiums.
Operating profit increased to €855 mn, impacted by a decrease in the operating investment result, due to a lower hedge result and lower realizations on equities, but benefiting from lower acquisition and administrative expenses.
Margin on reserves2 decreased from 77 to 74 basis points, as reserves grew stronger than operating profit.
| Key figures life/health | A 17 | ||
|---|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 | 2011 |
| Statutory premiums | 14,837 | 13,699 | 14,270 |
| Operating profit3, 4 |
855 | 825 | 702 |
| Margin on reserves (bps) | 74 | 77 | 69 |
3 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
4 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation.
In the following section, we comment on the development of our statutory gross premiums written on an internal basis, i.e. adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information.
In Italy, premiums increased 65.4% to €2,095 mn. The significant growth of investment-oriented premiums was largely driven by a successful product launched via our financial advisors channel in late 2012 as well as the recovery of the bancassurance sales channel from the depressed level in 2012. The share of unit-linked premiums grew to 67.7% (2012: 45.6%) of total statutory premiums.
In Belgium/Luxembourg, we recorded premiums of €614 mn, an increase of 64.2%. This increase mainly resulted from a continued fruitful cooperation between the Allianz companies in Luxembourg and France, as well as with various distribution partners. Under this cooperation, business in investment-oriented products is sold in Luxembourg which, benefiting from regulatory protection, offers a high level of security to our clients. Much of this business is then reinsured by Allianz France, and is therefore backed up by their capital strength, further enhancing the value proposition of this business to our clients. As a consequence, the growth of this business – both the initial sales and the subsequent assumed business by France – is reflected in the revenues of both operating entities; on the group level, however, this duplication is eliminated.
In Spain, premiums increased by €63 mn to €313 mn, despite the continuing recessionary market environment. This increase was particularly due to higher sales of short- and long-term investment-oriented products as well as higher premiums in the traditional life business with individuals.
Statutory premiums in Latin America increased 15.4% – on an internal basis – to €76 mn. Higher sales of single premium investment-oriented and saving products in Mexico more than offset the premium decrease from traditional group life products in South America.
In our German life business, premiums increased by €526 mn to €4,466 mn. This growth was primarily driven by two large single premium investment-oriented contracts in our group life business supported by slightly higher regular premiums in the traditional life business. Premiums in our German health business grew 1.6% to €831 mn. This was mainly due to premium rate increases in full health care coverage in January 2013 as well as the higher number of policies in our supplementary coverage insurance, which were written at the end of 2012.
In France, we recorded premium growth of 12.4% to €2,268 mn. The growth of €250 mn was to a large extent driven by the growth in internal reinsurance, up by €186 mn, resulting from the above-mentioned cooperation between Allianz France and Allianz Luxembourg, supported by our distribution partners in those countries.
1 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
In Asia-Pacific, we recorded statutory premiums of €1,300 mn, an increase of 11.4% on an internal basis. The increase in unit-linked product sales in Taiwan, supported by strong sales through the HSBC bancassurance channel, compensated for the decrease of single premium investment-oriented business in South Korea, where we stopped selling one of our major products in the third quarter of 2012, in line with our competitors. In Indonesia, a moderate premium decrease in the traditional business was related to the sales ramp-up phase of one particular bancassurance cooperation.
In Switzerland, statutory premiums amounted to €917 mn, a decrease of 9.4% on an internal basis. The decrease was mainly driven by lower single premium sales in the group life business. In the individual life business, slightly increased regular premiums almost compensated for the decrease in single premiums.
In the United States, statutory premiums were down 22.2% – on an internal basis – to €1,562 mn. In reaction to low interest rates, product and commission changes for fixed-indexed and variable annuity products in the second and third quarter of 2012 resulted in a drop in sales in both business lines.
Statutory premiums in Central and Eastern Europe decreased to €257 mn, representing a decline of 39.4% on an internal basis. This decrease largely relates to Poland, where regulatory restrictions led to a significant decrease in premiums from deposit business. Premium growth in the Czech Republic benefited from a sales campaign and the ongoing positive trend in traditional products. In Hungary, the increase in single premium investment-oriented products as a result of a sales campaign more than compensated for the slight decrease in traditional products.
Operating profit increased by €30 mn to €855 mn. We recorded a lower hedge result and lower realizations on equities in our operating investment result but benefited from lower acquisition and administrative expenses.
Interest and similar income net of interest expenses increased slightly by €16 mn and amounted to €4,058 mn. Higher dividend income, mostly due to a single fund distribution, more than compensated for lower interest income from debt securities.
Operating income from financial assets and liabilities carried at fair value through income (net) decreased by €82 mn to a loss of €244 mn. This decrease was mainly due to a lower hedging result related to annuity and guaranteed benefit features in the United States. Lower favorable impacts of the market performance on our Fair Value Option assets in France were offset by a positive development in Germany from the net of foreign currency translation effects and financial derivatives that are used to protect against equity and foreign currency fluctuations as well as to manage duration and other interest rate-related exposures.
Operating realized gains and losses (net) decreased by €168 mn to €899 mn. Higher realized gains on debt securities partially offset lower realizations on equities. The first quarter of 2012 benefited from higher realized equity gains due to portfolio adjustments.
Operating impairments of investments (net) were flat at €62 mn.
Claims and insurance benefits incurred (net) decreased by €283 mn to €4,826 mn mainly because of higher maturities in the first quarter of 2012.
Investment expenses increased by €28 mn to €190 mn, mainly due to a higher asset base in Germany.
Acquisition and administrative expenses (net) improved by €273 mn to €1,248 mn. This was mainly driven by lower acquisition expenses due to decreased deferred acquisition cost amortization, largely in Germany and the United States.
Margin on reserves decreased from 77 to 74 basis points, as reserves grew stronger than operating profit.
Overall, the reduction in our investment margin (i.e. investment income, net of hedged item movements and policyholder participation) was primarily due to lower results related to annuity and guaranteed benefit features in the United States and only to a lesser extent, due to lower interest income from declining yields and lower realized gains.
| Life/Health segment information | A 19 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Statutory premiums1 | 14,837 | 13,699 |
| Ceded premiums written | (157) | (154) |
| Change in unearned premiums | (114) | (67) |
| Statutory premiums (net) | 14,566 | 13,478 |
| Deposits from insurance and investment contracts | (8,206) | (7,117) |
| Premiums earned (net) | 6,360 | 6,361 |
| Interest and similar income | 4,077 | 4,062 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (244) | (162) |
| Operating realized gains/losses (net) | 899 | 1,067 |
| Fee and commission income | 140 | 127 |
| Other income | 49 | 42 |
| Operating revenues | 11,281 | 11,497 |
| Claims and insurance benefits incurred (net) | (4,826) | (5,109) |
| Changes in reserves for insurance and investment contracts (net) | (4,001) | (3,714) |
| Interest expenses | (19) | (20) |
| Operating impairments of investments (net) | (62) | (62) |
| Investment expenses | (190) | (162) |
| Acquisition and administrative expenses (net) | (1,248) | (1,521) |
| Fee and commission expenses | (56) | (63) |
| Restructuring charges | (1) | (2) |
| Other expenses | (23) | (19) |
| Operating expenses | (10,426) | (10,672) |
| Operating profit | 855 | 825 |
| Margin on reserves2 in basis points | 74 | 77 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
2 Represents operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unitlinked contracts less reinsurance assets.
| € mn | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory premiums1 | Premiums earned (net) |
Operating profit (loss) |
Margin on reserves2 (bps) |
|||||||
| internal 3 | ||||||||||
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany Life | 4,466 | 3,940 | 4,466 | 3,940 | 3,053 | 2,937 | 344 | 242 | 78 | 59 |
| Germany Health | 831 | 818 | 831 | 818 | 832 | 818 | 31 | 43 | 49 | 75 |
| Switzerland | 917 | 1,030 | 933 | 1,030 | 232 | 299 | 20 | 20 | 59 | 65 |
| Austria | 114 | 134 | 114 | 134 | 87 | 100 | 9 | 19 | 86 | 195 |
| German Speaking Countries | 6,328 | 5,922 | 6,344 | 5,922 | 4,204 | 4,154 | 404 | 324 | 74 | 64 |
| Italy | 2,095 | 1,267 | 2,095 | 1,267 | 131 | 148 | 81 | 73 | 71 | 68 |
| France | 2,268 | 2,018 | 2,268 | 2,018 | 824 | 771 | 115 | 85 | 61 | 50 |
| Belgium/Luxembourg | 614 | 374 | 614 | 374 | 95 | 106 | 15 | 16 | 58 | 73 |
| Netherlands | 75 | 74 | 75 | 74 | 37 | 33 | 11 | 12 | 108 | 114 |
| Turkey | 33 | 23 | 33 | 23 | 9 | 8 | – | 1 | – | 91 |
| Greece | 25 | 26 | 25 | 26 | 14 | 16 | (1) | 2 | (91) | 209 |
| Africa | 18 | 18 | 18 | 18 | 8 | 7 | 1 | 1 | 204 | 244 |
| Western & Southern Europe | 5,128 | 3,800 | 5,128 | 3,800 | 1,118 | 1,089 | 222 | 190 | 65 | 61 |
| Latin America | 76 | 65 | 75 | 65 | 26 | 33 | 1 | 3 | 85 | 219 |
| Spain | 313 | 250 | 313 | 250 | 85 | 151 | 33 | 31 | 201 | 209 |
| Portugal | 48 | 39 | 48 | 39 | 20 | 22 | 5 | (11) | 420 | (938) |
| Iberia & Latin America | 437 | 354 | 436 | 354 | 131 | 206 | 39 | 23 | 204 | 130 |
| United States | 1,562 | 2,023 | 1,573 | 2,023 | 208 | 200 | 101 | 166 | 58 | 102 |
| USA | 1,562 | 2,023 | 1,573 | 2,023 | 208 | 200 | 101 | 166 | 58 | 102 |
| Reinsurance LH | 132 | 120 | 132 | 120 | 121 | 108 | 7 | 13 | 135 | 237 |
| Global Insurance Lines & Anglo Markets | 132 | 120 | 132 | 120 | 121 | 108 | 7 | 13 | 135 | 237 |
| South Korea | 361 | 462 | 348 | 462 | 130 | 145 | 5 | 43 | 21 | 196 |
| Taiwan | 486 | 278 | 486 | 278 | 27 | 29 | 3 | 2 | 20 | 17 |
| Indonesia | 157 | 181 | 169 | 181 | 34 | 63 | 22 | 16 | 657 | 562 |
| Malaysia | 85 | 76 | 87 | 76 | 55 | 51 | 4 | 3 | 149 | 153 |
| Japan | – | 1 | – | 1 | 1 | 1 | 4 | 5 | 71 | 88 |
| Other | 211 | 166 | 207 | 166 | 165 | 138 | 25 | 16 | 265 | 184 |
| Asia-Pacific | 1,300 | 1,164 | 1,297 | 1,164 | 412 | 427 | 63 | 85 | 107 | 159 |
| Poland | 27 | 215 | 27 | 215 | 12 | 26 | 4 | 4 | 251 | 252 |
| Slovakia | 61 | 63 | 61 | 63 | 50 | 46 | 8 | 8 | 282 | 270 |
| Hungary | 78 | 69 | 78 | 69 | 13 | 13 | 1 | 1 | 135 | 163 |
| Czech Republic | 44 | 32 | 44 | 32 | 19 | 16 | 5 | 3 | 387 | 247 |
| Russia | 16 | 20 | 16 | 20 | 16 | 19 | (1) | (1) | (222) | (294) |
| Croatia | 17 | 13 | 17 | 13 | 16 | 13 | 1 | 1 | 121 | 193 |
| Bulgaria | 8 | 7 | 8 | 7 | 7 | 6 | 1 | 2 | 253 | 526 |
| Romania | 6 | 5 | 6 | 5 | 3 | 3 | – | 1 | – | 389 |
| Central and Eastern Europe | 257 | 424 | 257 | 424 | 136 | 142 | 19 | 19 | 230 | 238 |
| Middle East and North Africa | 40 | 39 | 44 | 39 | 30 | 35 | 4 | 2 | 279 | 180 |
| Global Life | 1 | 1 | 1 | 1 | – | – | – | – | –4 | –4 |
| Growth Markets | 1,598 | 1,628 | 1,599 | 1,628 | 578 | 604 | 86 | 106 | 126 | 170 |
| Consolidation5 | (348) | (148) | (349) | (148) | – | – | (4) | 3 | –4 | –4 |
| Total | 14,837 | 13,699 | 14,863 | 13,699 | 6,360 | 6,361 | 855 | 825 | 74 | 77 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
3 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects. 4 Presentation not meaningful.
5 Represents elimination of transactions between Allianz Group companies in different geographic regions.
2 Represents operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unitlinked contracts less reinsurance assets.
Allianz offers Asset Management products and services for third-party investors and the Allianz Group's insurance operations. We serve a wide range of retail and institutional clients worldwide with investment and distribution capacities in all major markets. Based on total assets under management, we are one of the largest asset managers in the world that manages third-party assets with active investment strategies. We are particularly strong in the United States, and growing rapidly in Europe and the Asia-Pacific region.
Our operating revenues went up by €472 mn to €1,911 MN. This reflects the increase in performance fees in the quarter, the strong growth of €281 bn in total assets under management compared to 31 March 2012, as well as higher margins. Third-party net inflows amounted to €43 BN.
We achieved an excellent operating profit of €900 mn, an increase of 46.8%. This was due to the strong growth in revenues as well as our operational efficiency.
Our cost-income ratio improved by 4.5 percentage points to 52.9% – compared to 57.4% in the first quarter of 2012. This improvement demonstrates our continued focus on leveraging revenue growth and on cost control.
| key figures asset management | A 22 | ||
|---|---|---|---|
| € MN three months ended 31 March |
2013 | 2012 | 2011 |
| Operating revenues | 1,911 | 1,439 | 1,273 |
| Operating profit1, 2 |
900 | 613 | 529 |
| Cost-income ratio1, 2 in % |
52.9 | 57.4 | 58.4 |
| Total assets under management as of 31 March in € bn |
1,934 | 1,653 | 1,492 |
1 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
2 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been reclassified to conform to the current accounting presentation.
As of 31 March 2013, total assets under management amounted to €1,934 bn. Of this, €1,517 bn related to our third-
party assets under management and €417 bn to Allianz Group assets. We show the development of total assets under management based on asset classes as they are relevant for the segment's business development.
In the first three months of 2013, we achieved net inflows of total assets under management of €43 bn, which primarily related to third-party net inflows. Our fixed income products recorded strong net inflows in all major regions.
Positive market effects contributed an additional €14 bn, with €5 bn driven by fixed income and €9 bn from equities.
We recorded favorable foreign currency translation effects of €28 bn, in particular on our fixed income assets, resulting from the appreciation of the U.S. Dollar against the Euro.1
In the following section, we focus on the development of third-party assets under management.
1 Based on the closing rate on the respective balance sheet date.
2 "Other" consists of third-party assets managed by other Allianz Group companies (approximately €26 bn as of 31 March 2013 and €28 bn as of 31 December 2012, respectively).
The regional split of third-party assets under management shifted slightly. Europe's share of third-party assets under management increased 1.8 percentage points while the United States' share of third-party assets under management decreased by 1.5 percentage points. This was driven by strong organic growth in Europe and supported by a reallocation of some third-party assets under management from the United States to Europe.
The split between fixed income and equity third-party assets under management remained unchanged at 89% and 11%, respectively.
64% of our third-party assets under management are attributable to institutional clients1 and 36% to retail clients1. This split remained unchanged compared to 31 December 2012.
Outperforming third-party assets under management
Underperforming third-party assets under management
1 The investment performance is based on Allianz Asset Management account-based, assetweighted three-year investment performance of third-party assets versus the primary target including all accounts managed by portfolio managers of Allianz Asset Management. For some retail funds, the net of fee performance is compared to the median performance of the corresponding Morningstar peer group (first and second quartile mean outperformance). For all other retail funds and for all institutional accounts, the gross of fee performance (revaluated based on closing prices) is compared to the respective benchmark based on different metrics.
The overall investment performance of our Asset Management business was excellent, with 91% outperforming their respective benchmarks (31 December 2012: 92%). PIMCO recorded a further outstanding performance of 95% versus its respective benchmarks. AllianzGI outperformed 66% of its benchmarks.
Our operating revenues grew by €472 MN, or 32.8% (internal growth1: 33.9%) to €1,911 mn compared to the first quarter of 2012. This was due to increased performance fees, higher assets under management and margins.
Net fee and commission income rose by € 482 mn, or 34.1% to €1,897 mn supported by the growth in assets under management and in margins. Our performance fees grew by €232 mn compared to the first quarter of 2012. This was primarily driven by a maturing private fund.
Our income from financial assets and liabilities carried at fair value through income (net) decreased by €7 mn to €7 mn. This was driven by the mark-to-market valuation of seed money in the United States.
Supported by higher operating revenues our operating profit went up by 46.8% (internal growth: 48.0%) to €900 MN.
Administrative expenses only rose by €182 mn to €1,008 mn. This increase was primarily due to higher personnel expenses, following the positive business development.
The strong increase in our fee and commission income and our continued expense discipline resulted in an improvement in our cost-income ratio by 4.5 percentage points to 52.9%.
| Asset Management segment information | A 27 | |
|---|---|---|
| € MN three months ended 31 March |
2013 | 2012 |
| Management and loading fees | 1,983 | 1,611 |
| Performance fees | 276 | 44 |
| Other | 27 | 37 |
| Fee and commission income | 2,286 | 1,692 |
| Commissions | (376) | (274) |
| Other | (13) | (3) |
| Fee and commission expenses | (389) | (277) |
| Net fee and commission income | 1,897 | 1,415 |
| Net interest income1 | 4 | 6 |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 14 |
| Other income | 3 | 4 |
| Operating revenues | 1,911 | 1,439 |
| Administrative expenses (net), excluding acquisition-related expenses | (1,008) | (826) |
| Restructuring charges | (3) | – |
| Operating expenses | (1,011) | (826) |
| Operating profit | 900 | 613 |
| Cost-income ratio2 in % | 52.9 | 57.4 |
1 Represents interest and similar income less interest expenses.
2 Represents operating expenses divided by operating revenue.
1 Operating revenues adjusted for foreign currency translation and (de-)consolidation effects. Based on the quarterly average exchange rates in 2013 compared to 2012.
29 Corporate and Other
Operating loss decreased by €35 mn to €239 mn despite restructuring charges of €88 mn within our Banking segment.
Operating result2,
Corporate and Other encompasses the operations of Holding&Treasury, Banking and Alternative Investments. Holding&Treasury includes the management of and support for Allianz Group's businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources and technology functions. Our banking products offered in Germany, Italy, France, the Netherlands and Bulgaria complement our insurance product portfolio. We also provide global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group.
Our operating result improved by €35 mn to €(239) mn. The improvements in Holding&Treasury and Alternative Investments of €90 mn and €12 mn, respectively, were largely offset by a €68 mn higher loss in Banking.
| Key figures Corporate and Other1 | A 28 | ||
|---|---|---|---|
| € MN three months ended 31 March |
2013 | 2012 | 2011 |
| Operating revenues | 461 | 422 | 434 |
| Operating expenses2, 3 |
(700) | (696) | (665) |
| Operating result2, 3 |
(239) | (274) | (231) |
| Key figures Corporate and Other – in detail € MN |
A 29 | ||
| three months ended 31 March | 2013 | 2012 | 2011 |
| Holding & Treasury | |||
| Operating revenues | 138 | 70 | 110 |
| Operating expenses2, 3 |
(305) | (327) | (339) |
| Operating result2, 3 |
(167) | (257) | (229) |
| Banking | |||
| Operating revenues | 281 | 310 | 294 |
| Operating expenses2, 3, 4 |
(364) | (325) | (292) |
| Operating result2, 3 |
(83) | (15) | 2 |
| Alternative Investments | |||
| Operating revenues | 44 | 46 | 33 |
| Operating expenses2, 3 |
(33) | (47) | (37) |
1 Consolidation included. For further information about our Corporate and Other segment, please refer to note 3 to the condensed consolidated interim financial statements.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation.
3 11 (1) (4)
2 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
4 Include loan loss provisions.
Our operating result strengthened by €90 mn to a loss of €167 mn. This was almost entirely driven by our net interest result.
Holding&Treasury's net interest result increased by €86 mn to €32 mn. Our interest and similar income, up by €66 mn to €121 mn, benefited from a resumption of interest payments on our silent participation in Commerzbank. Higher income from associates also contributed to the growth. Our interest expenses, excluding interest expenses from external debt, decreased from €109 mn to €89 mn due to lower interest yields.
Our net fee and commission result improved by €7 mn to a loss of €42 mn. This reduction in losses was mainly due to higher revenues of our internal IT service provider.
Administrative expenses (net), excluding acquisition-related expenses increased by €10 mn to €146 mn, driven by higher pension costs as a result of lower discount rates.
Operating income from financial assets and liabilities carried at fair value through income amounted to €7 mn, an increase of €5 mn compared to the previous year's quarter.
The operating loss in our Banking business rose from €15 mn to €83 mn. We incurred restructuring charges of €88 mn related to the planned closure of the Allianz Bank's business operations by the end of June 2013. In this context, it is worth mentioning that our restructuring charges have been presented within the operating profit since the beginning of 2013. Excluding the restructuring charges, the operating result in Banking would have improved from a loss of €15 mn in the first quarter of 2012 to a gain of €5 mn. A lower net interest result was more than compensated by decreased loan loss provisions and higher net fee and commission income.
Our loan loss provisions were down by €32 mn to €14 mn, as the previous year's figure was burdened by increased loan loss provisions due to financial guarantees within certain unit-linked products related to peripheral sovereign bonds (which were matured or sold by the end of 2012).
Our net interest, fee and commission result decreased by €4 mn to €144 mn. Our net interest result was down from €99 mn to €84 mn because of the low interest yield environment and a reduction in our exposure to government bonds. The €11 mn higher net fee and commission income (1Q 2013: €60 mn) benefited from increased sales of insurance and investment-oriented products, but could only partially compensate for the decrease in our net interest result.
Our operating income from financial assets and liabilities carried at fair value dropped by €6 mn to €2 mn.
Administration expenses increased only slightly to €128 mn (1Q 2012: €125 mn).
Our operating result turned from a loss of €1 mn to a gain of €11 mn. This was mainly attributable to a €11 mn reduction in administrative expenses which amounted to €31 mn. Lower interest and investment expenses also contributed positively to this development.
A Group Management Report
29 Corporate and Other
As we move through 2013, the global economic picture remains mixed. Due to prolonged winter weather conditions, which weighed above all on construction activity, in particular in Europe, economic performance in the first quarter of 2013 is likely to have been weaker than originally expected just a few months ago. However, of late there has been an expansion in production and world trade has also picked up. Following a 2.3% rise in global output in 2012 we expect moderate growth of 2.5% in 2013 and 3.2% in 2014. Both in the United States and Europe, public and private sector efforts to rein in high debt levels will continue to dampen economic momentum. Monetary policy, however, is still very accommodative in the United States, Japan and Europe, and generally favorable financing conditions are providing an economic fillip for both private households and the corporate sector. Although GDP growth rates in emerging market economies will not reach pre-crisis levels, these countries remain key drivers of the global economy. We expect emerging markets to grow by 5.1% in 2013 and 5.3% in 2014 (2012: 4.5%). Given modest worldwide growth prospects and taking into account the dire unemployment situation in many industrialized countries – which dampens wage pressure – inflation is likely to remain subdued on a global level both this year and next.
As a consequence of its fiscal consolidation needs, the U.S. economy will probably continue to show only a moderate upward economic trend with growth rates of 1.8% and 2.4% in 2013 and 2014, respectively. In the Eurozone, we expect to see a stabilization in the course of 2013 and modest growth in 2014. The arguments in support of recovery include: political progress in addressing the crisis, which is helping to lift economic sentiment, the substantial support provided by the European Central Bank's monetary policy and the low interest rate environment. Nevertheless, budgetary consolidation will continue to restrain economic activity in
the Eurozone. In addition, economic conditions still vary considerably from country to country. Real GDP in the Eurozone as a whole is expected to shrink slightly by 0.2% in 2013 and to strengthen by 1.5% in 2014. The German economy looks poised to record above-Eurozone average growth rates once again, thanks to robust domestic demand, a fairly stable labor market and relatively low public sector consolidation needs. Following estimated real GDP growth of 1.0% in 2013, we expect an increase to 2.1% in 2014.
Until the Italian elections and the difficult situation in Cyprus, the financial markets were showing clear signs of a letup in the European debt crisis. Although uncertainty appears to have risen again, we expect the crisis conditions to continue to abate. The key players, primarily the European Central Bank, have so far shown a marked determination to preserve the Euro and keep the Eurozone intact. The adjustment progress made by the member states which are at the center of the crisis is striking. With the European sovereign debt crisis gradually subsiding, the flight to the safety of German and U.S. government bonds is likely to ease, pushing up yields in these markets moderately. However, both the Federal Reserve Bank and the European Central Bank can be expected to maintain their loose policy stance, above all continuing with their policy of low interest rates. In May 2013, the European Central Bank lowered its key interest rate by 25 basis points to a new all-time low of 0.5% due to the very weak Eurozone economy. With shortterm rates close to zero, there are limited prospects of a sharp rise in yields on longer-term bonds. We expect yields on 10-year German and U.S. government bonds to reach merely a range of 2.0–2.5% by the end of 2014.
Besides a possible renewed escalation of the sovereign debt crisis, there are other negative factors that could jeopardize the global outlook. This holds true, in particular, for the political situation in North Africa and the Middle East. North Korea is also a worry. Rising geopolitical tensions, such as
1 The information presented in the sections Economic outlook, Insurance industry outlook and Asset management industry outlook is based on our own estimates.
the row over the Iranian nuclear program, could exert a considerable drag on the global economy, not least if these send crude oil prices skywards.
Global insurance premiums are expected to rise modestly in 2013 and 2014. We anticipate positive momentum in the U.S. market, although growth prospects will remain moderate. In Europe, after two consecutive years of falling premiums, we expect to see a gradual stabilization in 2013 followed by a moderate upturn in 2014. While we envisage only limited premium growth acceleration in industrialized countries, emerging markets will resume their role as the growth engine of the global insurance market, returning to a double-digit increase in the next two years. At the same time, financial markets are likely to remain volatile and interest rates to stay at low levels as monetary policy remains very accommodative. Against this backdrop, we forecast that insurance profits will remain under pressure, as the effects of a lower investment yield environment as well as investment derisking take their toll. However, in the longer term there is the potential for growth and improved earnings should interest rates and yields increase.
In the property-casualty sector we would expect moderate premium growth both in 2013 and 2014. Although premium rates, following a modest increase in recent years, may broadly flatten out in 2013, this should be offset by the uptick in economic activity, which bolsters demand for insurance coverage. In particular, there are signs that strong growth trends in emerging markets can be maintained: robust economic advances, rising household incomes and heightened risk awareness will drive stronger premium growth for the foreseeable future. As a result, we expect annual global premium revenue to rise in the 3.0–5.0 % range in 2013 and 2014, taking into account the somewhat lackluster economic start to 2013.
Life sector premium levels, particularly in Europe, have suffered from the unfavorable market conditions in recent years. In 2013, we expect premium growth to recover, although growth rates in Europe will probably continue to trail behind those of other regions. Resumed growth will go hand in hand with a changing business mix which is expected to evolve towards more attractive unit-linked and protection business, if interest rates continue to stay at their depressed levels – as anticipated. On the other hand, growth in emerging markets, mainly driven by higher incomes and the rising demand for social protection, is likely to accelerate considerably, as China and India finally come to grips with regulatory changes passed in 2010 and 2011. All in all, we expect that annual global premium revenue will rise in the 4.0–6.0% range in 2013 and 2014.
The outlook for the asset management industry for 2013 and beyond remains uncertain. Although there are signs of a slow recovery in the global economy and of a gradually receding European sovereign debt crisis, helped by massive liquidity support from major central banks, financial markets in developed countries are still plagued by uncertainty and capital markets are expected to be vulnerable to potential setbacks in the near future. Therefore, net inflows are expected to stay volatile as investors are likely to remain cautious, shifting their funds between high- and low-risk assets as sentiment ebbs and flows.
The upside potential for market-driven growth in the asset management industry will be limited for as long as GDP growth rates in major developed countries continue to lag behind long-term trends. Furthermore, regulatory activities, which are currently unfolding across the globe, might also challenge profitability growth in the coming years.
Under the circumstances described above, money managers' ability to grow is dependent on achieving abovebenchmark investment results, the diversification and comprehensiveness of their investment products and the services they offer, as well as the scale and efficiency of their operations.
Outlook for the Allianz Group
We are confident about staying on course towards profitable growth for the rest of 2013. However, our very good start was also supported by a low level of natural catastrophe claims and a slight increase in the global business climate, both of which may develop unfavorably during the remainder of the year. It would therefore be inappropriate to simply annualize the current quarter's operating profit and net income to arrive at an expected result for the full year. Due to the volatile capital markets and the low interest rate environment we see no need for an adjustment of our published Allianz Group operating profit outlook for 2013 of €9.2 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 from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
| € mn | |||
|---|---|---|---|
| 70,000 | +3.1 % | ||
| 60,000 | 50,388 | 51,950 | |
| 50,000 | 10,122 | 9,672 | |
| 40,000 | 11,451 | 13,463 | |
| 30,000 | |||
| 20,000 | 28,815 | 28,815 | |
| 10,000 | |||
| 12/31/2012 | 3/31/2013 |
As of 31 March 2013, shareholders' equity amounted to €51,950 mn, an increase of €1,562 mn compared to 31 December 2012 (as restated).1 Net income attributable to shareholders contributed €1,707 mn to the increase while unrealized gains – primarily on debt securities – decreased
by €450 mn to €9,672 mn due to higher realizations and a slight rise in Italian and U.S. government bond yields. The improvement in foreign currency translation adjustments of €272 mn was mainly driven by the strengthening of the U.S. Dollar against the Euro.
The Allianz Group is a financial conglomerate within the scope of the E.U. Financial Conglomerates Directive and the related German law in force since 2005. The law requires that financial conglomerates calculate the capital available to meet their solvency requirements on a consolidated basis, which we refer to as "eligible capital".
1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 31 March 2013 would be 174% (31 December 2012 (pro forma restated): 171%, 31 December 2012: 188%).
In the following sections, we show the asset allocation for our insurance portfolio and analyze important developments in the balance sheets of our segments.
As of 31 March 2013, total assets amounted to €710.6 bn and total liabilities were €656.0 bn. Compared to year-end 2012, total assets and total liabilities increased by €16.1 bn and €14.5 bn, respectively.
This section mainly focuses on our financial investments in debt instruments, equities, real estate and cash and other as well as our insurance reserves and external financing, since these reflect the major developments in our balance sheet.
The improved market sentiment seen in the second half of 2012 continued in the first quarter of 2013. Almost all major equity markets developed positively.
German bond yields remained at a very low level. U.S. government bond yields were also low but tended to increase. Italian government bond yields rose whereas Spanish government bond yields declined.
The credit spreads for A-rated debtors were rather stable in the Eurozone and the United States.
Interest rates development in 2012 and the first quarter of 2013 A 32
1 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
credit spreads development in 2012 and the first quarter of 2013 A 33
The Allianz Group's investment portfolio is mainly determined by our core business of insurance. The following portfolio overview covers the insurance segments as well as the non-banking assets of the Corporate and Other segment.
As of 31 March 2013, our investment portfolio grew by €10.5 bn to €518.0 bn, mainly due to reinvested interest inflows. Overall, the asset allocation remained stable compared to year-end 2012.
Our gross exposure to equities still accounted for 6% of our investment portfolio and increased slightly to €30.5 bn (31 December 2012: €29.6 bn). The €0.9 bn increase was driven by market improvements and only partially offset by realization effects. Our equity gearing – a ratio of our equity holdings allocated to the shareholder after policyholder participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill – remained stable and amounted to 23%.
The vast majority of our investment portfolio is comprised of diversified debt instruments, which amounted to €468.7 bn at the end of the first quarter compared to €460.8 bn as of 31 December 2012. These investments comprised 90% of our investment portfolio. Our exposure in this asset class was well diversified, with 60% in government and covered bonds. In line with our operating business profile, 60% of our fixed income portfolio was invested in Eurozone bonds and loans (31 December 2012: 62%). About 95% of our portfolio of debt instruments1 was invested in investment-grade bonds and loans.
Our exposure to real estate held for investment remained almost unchanged at €9.8 bn (31 December 2012: €9.7 bn).
1 Excluding self-originated private retail mortgage loans. For 2%, no ratings were available.
Our portfolio also comprised asset-backed securities (ABS) of €19.4 bn (31 December 2012: €19.5 bn) – or 4% of our fixed income portfolio. Of these, about 77% were related to mortgage backed securities (MBS). Around 19% of our ABS securities were made up of MBS issued by U.S. agencies, which are backed by the U.S. government. Overall, 97% of the total ABS
"AA" or better (31 December 2012: 88%).
| € mn | |||
|---|---|---|---|
| Group | |||
| three months ended 31 March | 2013 | 2012 | Delta |
| Interest and similar income (net)1 | 5,057 | 5,009 | 48 |
| Income from financial assets and liabilities carried at fair value through income (net) |
(225) | 94 | (319) |
| Realized gains/losses (net) | 1,146 | 1,188 | (42) |
| Impairments of investments (net) | (134) | (188) | 54 |
| Investment expenses | (208) | (197) | (11) |
| Net investment income | 5,636 | 5,906 | (270) |
portfolio received an investment grade rating, with 89% rated
Our government bond exposure totaled €174.5 bn, compared to €174.2 bn as of 31 December 2012. This represents 37% of our fixed income portfolio. Our sovereign debt exposure in Italy, Spain, Portugal, Greece and Ireland comprised approximately 6.8% of our fixed income portfolio, of which about 6.2% is in Italy and 0.5% in Spain. The carrying value of our sovereign debt exposure in Italy amounted to €29.3 bn, with corresponding unrealized gains (gross) of €870 mn. In Spain it was €2.5 bn with unrealized losses (gross) of €21 mn. The unrealized gains (gross) on Italian sovereign bonds decreased by €409 mn due to realizations and an increase in Italian government bond yields.
49% of our covered bonds portfolio was German Pfandbriefe, backed by either public sector loans or mortgage loans. Another 15% and 9% of the covered bonds were allocated to France and Spain, respectively. Covered bonds provide a cushion against real estate price deterioration and payment defaults through minimum required security buffers and over-collateralization.
Our exposure to subordinated securities in banks decreased from €6.7 bn as of 31 December 2012 to €6.5 bn due to a €0.2 bn reduction to €4.7 bn in the Tier 2 share.
1 Net of interest expenses (excluding interest expenses from external debt).
Our net investment income declined by 4.6% to €5,636 mn due to lower income from financial assets and liabilities carried at fair value through income. The other components of our net investment income moved slightly, resulting in a net overall increase for these items.
Our income from financial assets and liabilities carried at fair value through income (net) fell by €319 mn to €(225) mn. €180 mn of the decrease relates to income from The Hartford warrants recorded in the first quarter of 2012, which were sold in April 2012. The rest of the contraction was mainly due to a higher trading loss in the United States and a less beneficial impact of the equity market performance on our Fair Value Option assets in France. We recorded a positive development in Germany from the net of foreign currency translation effects and financial derivatives that are used to protect against equity and foreign currency fluctuations as well as to manage duration and other interest rate-related exposures.
Our interest and similar income (net)1 went up by €48 mn to €5,057 mn due to higher dividend income from equities partly offset by a slight decrease in income from debt investments as lower interest yields were not compensated for by our higher asset base.
Realized gains and losses (net) decreased from €1,188 mn to €1,146 mn. This was predominantly due to lower realizations on equities compared to the previous year's quarter and was only partly compensated for by higher realizations on debt securities and real estate held for investment.
Impairments (net) were down by €54 mn to €134 mn as the previous year's quarter was burdened by impairments of our equity investments in the financial sector.
Investment expenses (net) increased by €11 mn to €208 mn driven by new investments.
Our Property-Casualty asset base grew by €3.4 bnto €108.7 bn, mainly due to net inflows and reinvested interest inflows. In addition, our cash and cash pool assets increased by €1.4 bn to €6.5 bn.
| Composition of asset base – fair values1 | A 37 | |
|---|---|---|
| € bn | as of 31 March 2013 |
as of 31 December 2012 |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.3 | 0.3 |
| Debt securities | 0.1 | 0.2 |
| Other2 | (0.1) | – |
| Subtotal | 0.3 | 0.5 |
| Investments3 | ||
| Equities | 4.1 | 3.9 |
| Debt securities | 71.4 | 69.8 |
| Cash and cash pool assets4 | 6.5 | 5.1 |
| Other | 7.6 | 7.7 |
| Subtotal | 89.6 | 86.5 |
| Loans and advances to banks and customers |
18.8 | 18.3 |
| Property-Casualty asset base | 108.7 | 105.3 |
1 Loans and advances to banks and customers, held-to-maturity investments and real estate held for investment are stated at amortized cost. Investments in associates and joint ventures are stated at either amortized cost or equity, depending on – among other factors – our ownership percentage.
2 This comprises assets of €0.1 bn and €0.1 bn and liabilities of €(0.2) bn and €(0.1) bn as of 31 March 2013 and 31 December 2012, respectively.
3 These do not include affiliates of €8.8 bn and €8.8 bn as of 31 March 2013 and 31 December 2012, respectively.
4 Including cash and cash equivalents, as stated in our segment balance sheet of €4.9 bn and €2.7 bn and receivables from cash pooling amounting to €2.6 bn and €2.8 bn, net of liabilities from securities lending and derivatives of €(0.3) bn and €(0.2) bn, as well as liabilities from cash pooling of €(0.7) bn and €(0.2) bn as of 31 March 2013 and 31 December 2012, respectively.
As of 31 March 2013, ABS within our Property-Casualty asset base amounted to €4.0 bn, representing a slight increase of €0.2 bn. This was approximately 3.7% of the segment's asset base.
a Loss and loss adjustment expenses paid in current year relating to previous years
b Loss and loss adjustment expenses incurred in previous years c Foreign currency translation adjustments and other changes, changes in the consolidated
subsidiaries of the Allianz Group and reclassifications
d Reserves for loss and loss adjustment expenses in current year
Reserves net Reserves ceded Changes
1 After group consolidation. For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty segment, please refer to note 14 to the condensed consolidated interim financial statements.
As of 31 March 2013, the segment's gross reserves for loss and loss adjustment expenses decreased by €3.7 bn to €59.0 bn. On a net basis, our reserves were down by €3.3 bn to €52.5 bn. Foreign currency translation effects of €0.3 bn were offset by a reclassification effect of €(2.9) bn due to changes in our presentation. Effective from 1 January 2013, the Allianz Group prospectively changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts".1
Our Life/Health asset base rose by €8.3 bn, or 1.8%, to €480.6 bn as of 31 March 2013. The growth of the segment's asset base was mainly because of a €5.9 bn increase in our debt investments – primarily due to reinvested interest inflows. Increased financial assets for unit-linked contracts, which amounted to €75.2 bn, also contributed €4.0 bn to the growth.
| Composition of asset base – fair values | A 39 | |
|---|---|---|
| € bn | ||
| as of | as of | |
| 31 March 2013 |
31 December 2012 |
|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 2.0 | 2.1 |
| Debt securities | 2.3 | 2.3 |
| Other1 | (5.0) | (3.5) |
| Subtotal | (0.7) | 0.9 |
| Investments2 | ||
| Equities | 24.9 | 24.1 |
| Debt securities | 272.3 | 266.4 |
| Cash and cash pool assets3 | 6.6 | 5.7 |
| Other | 9.3 | 9.9 |
| Subtotal | 313.1 | 306.1 |
| Loans and advances to banks and customers |
93.0 | 94.1 |
| Financial assets for unit-linked contracts4 |
75.2 | 71.2 |
| Life/Health asset base | 480.6 | 472.3 |
1 This comprises assets of €1.1 bn and €1.7 bn and liabilities (including the market value liability option) of €(6.1) bn and €(5.2) bn as of 31 March 2013 and 31 December 2012, respectively.
2 These do not include affiliates of €0.8 bn and €0.7 bn as of 31 March 2013 and 31 December 2012, respectively.
As of 31 March 2013, our Life/Health asset base included ABS of €15.0 bn. This represents 3.1% of the segment's asset base.
1 For further information on the changes in presentation, please refer to note 2 to the condensed consolidated interim financial statements.
a Change in unit-linked insurance contracts
b Change in unit-linked investment contracts
c Foreign currency translation adjustments
Financial assets for unit-linked contracts increased by €4.0 bn, or 5.6%. Unit-linked insurance contracts grew by €2.5 bn due to good fund performance (€2.1 bn) and premium inflows exceeding outflows by €0.7 bn. Unit-linked investment contracts rose by €1.1 bn, with premium inflows significantly exceeding outflows (net €0.6 bn). The main drivers of currency effects were the stronger U.S. Dollar (€0.5 bn) and the weaker Japanese Yen (€(0.1) bn).1
Life/Health reserves for insurance and investment contracts increased by €5.1 bn, or 1.3%, in the first quarter of 2013 to €386.1 bn. The €3.8 bn growth in aggregate policy reserves resulted mainly from our operations in Germany (€2.4 bn), Switzerland (€0.6 bn before currency effects), Belgium (€0.3 bn) and Luxembourg (€0.2 bn). Reserves for premium refunds decreased slightly by €0.1 bn. The currency impact was mainly driven by the stronger U.S. Dollar (€1.4 bn).1
1 Based on the closing rate of the respective balance sheet dates.
Our Asset Management segment's results are derived primarily from third-party asset management. In this section, we refer only to the segment's own assets.1
The main components of the Asset Management segment's asset base were cash and cash pool assets and debt securities. The segment's asset base increased by €0.5 bn to €4.3 bn as of 31 March 2013 compared to 31 December 2012. This increase was completely due to higher cash and cash pool assets.
Liabilities in our Asset Management segment decreased from €4.4 bn to €4.0 bn.
As of 31 March 2013, the segment's asset base decreased by €0.3 bn to €41.7 bn. An increase in loans and advances to banks and customers was more than offset by lower cash and cash equivalents.
| Composition of asset base – fair values | A 42 | |
|---|---|---|
| € bn | ||
| as of | as of | |
| 31 March 2013 |
31 December 2012 |
|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | – | – |
| Debt securities | – | – |
| Other1 | (0.2) | (0.2) |
| Subtotal | (0.2) | (0.2) |
| Investments2 | ||
| Equities | 1.6 | 1.7 |
| Debt securities | 23.7 | 23.8 |
| Cash and cash pool assets3 | (1.2) | (0.4) |
| Other | 0.2 | 0.2 |
| Subtotal | 24.3 | 25.3 |
| Loans and advances to banks and | ||
| customers | 17.6 | 16.9 |
| Corporate and Other asset base | 41.7 | 42.0 |
1 This comprises assets of €0.1 bn and €0.2 bn and liabilities of €(0.3) bn and €(0.4) bn as of 31 March 2013 and 31 December 2012, respectively.
2 These do not include affiliates of €74.6 bn and €74.3 bn as of 31 March 2013 and 31 December 2012, respectively.
3 Including cash and cash equivalents, as stated in our segment balance sheet, of €3.4 bn and €4.2 bn and receivables from cash pooling amounting to €0.1 bn and €0.2 bn, net of liabilities from securities lending and derivatives of €(0.1) bn and €(0.1) bn, as well as liabilities from cash pooling of €(4.6) bn and €(4.7) bn as of 31 March 2013 and 31 December 2012, respectively.
As of 31 March 2013, ABS amounted to €0.4 bn, representing 1.0% of Corporate and Other's asset base.
Other liabilities decreased from €21.8 bn as of 31 December 2012 to €21.6 bn at the end of the reporting period. Certificated liabilities were also down by €0.2 bn to €14.5 bn. The maturity of a €1.5 bn senior bond was more than offset by the issuance of three new bonds in March 2013, of which 1.25 bn was denominated in Euro and 0.75 bn in GBP while Group internal borrowing diminished. As of 31 March 2013, participation certificates and subordinated liabilities were unchanged at €11.6 bn.2
1 For further information on the development of these third-party assets, please refer to the Asset Management chapter.
2 For further information on Allianz SE debt as of 31 March 2013, please refer to notes 17 and 18 to the condensed consolidated interim financial statements.
| 1. Senior bonds2 | ||
|---|---|---|
| 4.0% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2006 | |
| Maturity date | 11/23/2016 | |
| ISIN | XS 027 588 026 7 | |
| Interest expenses | €15.3 MN | |
| 1.375% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €0.5 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2018 | |
| ISIN | DE000A1HG1J8 | |
| Interest expenses | €0.4 MN | |
| 4.75% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €1.5 BN | |
| Year of issue | 2009 | |
| Maturity date | 7/22/2019 | |
| ISIN | DE 000 A1A KHB 8 |
|
| Interest expenses | €18.1 MN | |
| 3.5% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €1.5 BN | |
| Year of issue | 2012 | |
| Maturity date | 2/14/2022 | |
| ISIN | DE 000 A1G 0RU 9 | |
| Interest expenses | €13.3 MN | |
| 3.0% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €0.75 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2028 | |
| ISIN | DE000A1HG1K6 | |
| Interest expenses | €1.2 MN | |
| 4.5% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | GBP 0.75 bn |
|
| Year of issue | 2013 | |
| Maturity date | 3/13/2043 | |
| ISIN | DE000A1HG1L4 | |
| Interest expenses | €2.1 MN | |
| Total interest expenses for senior bonds |
€50.4 MN | |
| 2. Subordinated bonds3 | ||
| 6.5% bond issued by | ||
| Allianz Finance II B. V., Amsterdam | ||
| Volume | €1.0 BN | |
| Year of issue | 2002 | |
| Maturity date | 1/13/2025 | |
| ISIN | XS 015 952 750 5 | |
| Interest expenses | €16.4 MN | |
| 5.75% bond issued by Allianz Finance II B. V., Amsterdam |
||
| Volume | €2.0 BN | |
| Year of issue | 2011 | |
| Maturity date | 7/8/2041 | |
| ISIN | DE 000 A1GNAH 1 |
|
| Interest expenses | €28.7 MN |
| 5.625% bond issued by Allianz SE | ||
|---|---|---|
| Volume | €1.5 bn | |
| Year of issue | 2012 | |
| Maturity date | 10/17/2042 | |
| ISIN | DE 000 A1RE1Q3 | |
| Interest expenses | €21.3 MN | |
| 5.5% bond issued by Allianz SE | ||
| Volume | €1.5 BN | |
| Year of issue | 2004 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 018 716 232 5 | |
| Interest expenses | €20.8 MN | |
| 4.375% bond issued by Allianz Finance II B. V., Amsterdam |
||
| Volume | €1.4 BN | |
| Year of issue | 2005 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 021 163 783 9 | |
| Interest expenses | €15.6 MN | |
| 5.375% bond issued by Allianz Finance II B. V., Amsterdam |
||
| Volume | €0.8 BN | |
| Year of issue | 2006 | |
| Maturity date | Perpetual Bond | |
| ISIN | DE 000 A0G NPZ 3 |
|
| Interest expenses | €10.6 MN | |
| 8.375% bond issued by Allianz SE | ||
| Volume | USD 2.0 BN | |
| Year of issue | 2008 | |
| Maturity date | Perpetual Bond | |
| ISIN | US 018 805 200 7 | |
| Interest expenses | €34.9 MN | |
| 5.5% bond issued by Allianz SE | ||
| Volume | USD 1.0 BN | |
| Year of issue | 2012 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 085 787 2500 | |
| Interest expenses | €11.1 MN | |
| Total interest expenses for subordinated bonds |
€159.4 MN | |
| 3. Issues matured in 2013 | ||
| 5.0% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2008 | |
| Maturity date | 3/6/2013 | |
| ISIN | DE 000 A0T R7K 7 | |
| Interest expenses | €13.5 MN |
1 This does not include, among others, the €0.5 BN 30-year convertible subordinated note issued in July 2011. For further information on Allianz SE debt (issued or guaranteed) as of 31 March 2013, please refer to notes 17 and 18 to the condensed consolidated interim financial statements.
Total interest expenses €223.3 MN
2 Senior bonds provide for early termination rights in case of non-payment of amounts due under the bond (interest and principal) as well as in case of insolvency.
3 The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the bondholder. Interest payments are subject to certain conditions which are linked, inter alia, to our net income, and may have to be deferred. Nevertheless, the terms of the relevant bonds provide for alternative settlement mechanisms which allow us to avoid an interest deferral using cash raised from the issuance of specific newly issued instruments.
The previous analysis is based on our condensed consolidated interim financial statements and should be read in conjunction with them. In addition to our stated figures according to the International Financial Reporting Standards (IFRS), the Allianz Group uses operating profit and internal growth to enhance the understanding of our results. These additional measures should be viewed as complementary to, and not as a substitute for, our figures determined according to IFRS.
For further information, please refer to note 3 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).
| Composition of total revenues | A 44 |
|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
|---|---|---|
| Property-Casualty | ||
| Gross premiums written | 15,197 | 14,797 |
| Life/Health | ||
| Statutory premiums | 14,837 | 13,699 |
| Asset Management | ||
| Operating revenues | 1,911 | 1,439 |
| consisting of: | ||
| Net fee and commission income | 1,897 | 1,415 |
| Net interest income | 4 | 6 |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 14 |
| Other income | 3 | 4 |
| Corporate and Other | ||
| Total revenues (Banking) | 148 | 155 |
| consisting of: | ||
| Interest and similar income | 157 | 190 |
| Income from financial assets and liabilities carried at fair value through income (net) | 2 | 8 |
| Fee and commission income | 120 | 112 |
| Interest expenses, excluding interest expenses from external debt | (73) | (91) |
| Fee and commission expenses | (60) | (63) |
| Consolidation effects (Banking within Corporate and Other) | 2 | (1) |
| Consolidation | (45) | (37) |
| Allianz Group total revenues | 32,048 | 30,053 |
We believe that an understanding of our total revenue performance is enhanced when the effects of foreign currency translation as well as acquisitions and disposals (or "changes in scope of consolidation") are analyzed separately. Accordingly, in addition to presenting nominal growth, we also present internal growth, which excludes these effects.
| % | ||||
|---|---|---|---|---|
| three months ended 31 March | Internal growth | Changes in scope of consolidation |
Foreign currency translation |
Nominal growth |
| Property-Casualty | 1.3 | 2.3 | (0.9) | 2.7 |
| Life/Health | 8.5 | – | (0.2) | 8.3 |
| Asset Management | 33.9 | (0.2) | (0.9) | 32.8 |
| Corporate and Other | (4.5) | – | – | (4.5) |
| Allianz Group | 6.1 | 1.1 | (0.6) | 6.6 |
Pages 45–98
| 78 | 20 Premiums earned (net) |
|---|---|
| 79 | 21 Interest and similar income |
| 79 | 22 Income from financial assets and liabilities carried at fair value through income (net) |
| 80 | 23 Realized gains/losses (net) |
| 81 | 24 Fee and commission income |
| 81 | 25 Other income |
| 81 | 26 Income and expenses from fully consolidated private equity investments |
| 82 | 27 Claims and insurance benefits incurred (net) |
| 83 | 28 Change in reserves for insurance and investment contracts (net) |
| 83 | 29 Interest expenses |
| 83 | 30 Loan loss provisions |
| 84 | 31 Impairments of investments (net) |
| 84 | 32 Investment expenses |
| 84 | 33 Acquisition and administrative expenses (net) |
| 85 | 34 Fee and commission expenses |
| 85 | 35 Other expenses |
| 85 | 36 Income taxes |
| 86 37 Fair value measurement |
|
|---|---|
| ------------------------------------ | -- |
47 Consolidated Balance Sheets
| consolidated balance sheets | B 01 | ||
|---|---|---|---|
| € mn | |||
| Note | as of 31 March 2013 |
as of 31 December 2012 |
|
| ASSETS | |||
| Cash and cash equivalents | 14,309 | 12,437 | |
| Financial assets carried at fair value through income | 4 | 6,239 | 7,283 |
| Investments | 5 | 409,778 | 401,628 |
| Loans and advances to banks and customers | 6 | 120,114 | 119,369 |
| Financial assets for unit-linked contracts | 75,217 | 71,197 | |
| Reinsurance assets | 7 | 13,466 | 13,254 |
| Deferred acquisition costs | 8 | 20,465 | 19,452 |
| Deferred tax assets | 1,859 | 1,526 | |
| Other assets | 9 | 35,952 | 35,196 |
| Non-current assets classified as held for sale | 10 | – | 15 |
| Intangible assets | 11 | 13,182 | 13,090 |
| Total assets | 710,581 | 694,447 | |
| LIABILITIES AND EQUITY Financial liabilities carried at fair value through income |
12 | 6,278 | 5,397 |
| Liabilities to banks and customers | 13 | 22,454 | 22,425 |
| Unearned premiums | 22,167 | 17,939 | |
| Reserves for loss and loss adjustment expenses | 14 | 68,583 | 72,540 |
| Reserves for insurance and investment contracts | 15 | 399,245 | 390,985 |
| Financial liabilities for unit-linked contracts | 75,217 | 71,197 | |
| Deferred tax liabilities | 4,128 | 4,035 | |
| Other liabilities | 16 | 37,883 | 37,392 |
| Certificated liabilities | 17 | 8,335 | 7,960 |
| Participation certificates and subordinated liabilities | 18 | 11,670 | 11,614 |
| Total liabilities | 655,960 | 641,484 | |
| Shareholders' equity | 51,950 | 50,388 | |
| Non-controlling interests | 2,671 | 2,575 | |
| Total equity | 19 | 54,621 | 52,963 |
| Total liabilities and equity | 710,581 | 694,447 | |
| Consolidated income statements | B 02 | ||
|---|---|---|---|
| € mn | |||
| three months ended 31 March | Note | 2013 | 2012 |
| Gross premiums written | 21,805 | 21,359 | |
| Ceded premiums written | (1,445) | (1,597) | |
| Change in unearned premiums | (3,688) | (3,320) | |
| Premiums earned (net) | 20 | 16,672 | 16,442 |
| Interest and similar income | 21 | 5,167 | 5,132 |
| Income from financial assets and liabilities carried at fair value through income (net) | 22 | (225) | 94 |
| Realized gains/losses (net) | 23 | 1,146 | 1,188 |
| Fee and commission income | 24 | 2,754 | 2,145 |
| Other income | 25 | 60 | 51 |
| Income from fully consolidated private equity investments | 26 | 178 | 195 |
| Total income | 25,752 | 25,247 | |
| Claims and insurance benefits incurred (gross) | (12,182) | (12,609) | |
| Claims and insurance benefits incurred (ceded) | 544 | 618 | |
| Claims and insurance benefits incurred (net) | 27 | (11,638) | (11,991) |
| Change in reserves for insurance and investment contracts (net) | 28 | (4,099) | (3,807) |
| Interest expenses | 29 | (351) | (382) |
| Loan loss provisions | 30 | (14) | (46) |
| Impairments of investments (net) | 31 | (134) | (188) |
| Investment expenses | 32 | (208) | (197) |
| Acquisition and administrative expenses (net) | 33 | (5,489) | (5,454) |
| Fee and commission expenses | 34 | (778) | (684) |
| Amortization of intangible assets | (41) | (25) | |
| Restructuring charges | (94) | (8) | |
| Other expenses | 35 | (46) | (19) |
| Expenses from fully consolidated private equity investments | 26 | (182) | (201) |
| Total expenses | (23,074) | (23,002) | |
| Income before income taxes | 2,678 | 2,245 | |
| Income taxes | 36 | (877) | (794) |
| Net income | 1,801 | 1,451 | |
| Net income attributable to: | |||
| Non-controlling interests | 94 | 74 | |
| Shareholders | 1,707 | 1,377 | |
| Basic earnings per share (€) | 38 | 3.77 | 3.04 |
| Diluted earnings per share (€) | 38 | 3.69 | 3.03 |
| Consolidated statements of comprehensive income | B 03 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Net income | 1,801 | 1,451 |
| Other comprehensive income | ||
| Items that may be reclassified to profit and loss in future periods | ||
| Foreign currency translation adjustments | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | 289 | (213) |
| Subtotal | 289 | (213) |
| Available-for-sale investments | ||
| Reclassifications to net income | (177) | (40) |
| Changes arising during the period | (276) | 2,188 |
| Subtotal | (453) | 2,148 |
| Cash flow hedges | ||
| Reclassifications to net income | (1) | – |
| Changes arising during the period | 7 | 11 |
| Subtotal | 6 | 11 |
| Share of other comprehensive income of associates | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | 21 | 6 |
| Subtotal | 21 | 6 |
| Miscellaneous | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | 84 | 71 |
| Subtotal | 84 | 71 |
| Items that may never be reclassified to profit and loss | ||
| Actuarial gains and losses on defined benefit plans (see note 2) | (41) | (252) |
| Total other comprehensive income | (94) | 1,771 |
| Total comprehensive income | 1,707 | 3,222 |
| Total comprehensive income attributable to: | ||
| Non-controlling interests | 136 | 147 |
| Shareholders | 1,571 | 3,075 |
For further details concerning income taxes relating to components of the other comprehensive income, please see note 36.
€ mn Paid-in capital Retained earnings Foreign currency translation adjustments Unrealized gains and losses (net) Shareholders' equity Noncontrolling interests Total equity Balance as of 1 January 2012, as previously reported 28,763 13,522 (1,996) 4,626 44,915 2,338 47,253 Adjustments (see note 2) – (1,457) (1) – (1,458) (48) (1,506) Balance as of 1 January 2012, as reported 28,763 12,065 (1,997) 4,626 43,457 2,290 45,747 Total comprehensive income1 – 1,183 (208) 2,100 3,075 147 3,222 Paid-in capital – – – – – – – Treasury shares – 10 – – 10 – 10 Transactions between equity holders – – – – – – – Dividends paid – – – – – (45) (45) Balance as of 31 March 2012 28,763 13,258 (2,205) 6,726 46,542 2,392 48,934 Balance as of 1 January 2013, as previously reported 28,815 16,689 (2,073) 10,122 53,553 2,665 56,218 Adjustments (see note 2) – (3,165) – – (3,165) (90) (3,255) Balance as of 1 January 2013, as reported 28,815 13,524 (2,073) 10,122 50,388 2,575 52,963 Total comprehensive income1 – 1,750 272 (451) 1,571 136 1,707 Paid-in capital – – – – – – – Treasury shares – 1 – – 1 – 1 Transactions between equity holders – (11) – 1 (10) 13 3 Dividends paid – – – – – (53) (53) Balance as of 31 March 2013 28,815 15,264 (1,801) 9,672 51,950 2,671 54,621
1 Total comprehensive income in shareholders' equity for the three months ended 31 March 2013 comprises net income attributable to shareholders of €1,707 mn (2012: €1,377 mn).
50 Interim Report First Quarter of 2013 Allianz Group
50 Consolidated Statements of Changes in Equity
| condensed consolidated statements of cash flows | B 05 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Summary | ||
| Net cash flow provided by operating activities | 9,823 | 5,230 |
| Net cash flow used in investing activities | (7,735) | (7,833) |
| Net cash flow provided by (used in) financing activities | (289) | 1,746 |
| Effect of exchange rate changes on cash and cash equivalents | 73 | (87) |
| Change in cash and cash equivalents | 1,872 | (944) |
| Cash and cash equivalents at beginning of period | 12,437 | 10,492 |
| Cash and cash equivalents at end of period | 14,309 | 9,548 |
| Cash flow from operating activities | ||
| Net income | 1,801 | 1,451 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (27) | (9) |
| Realized gains/losses (net) and impairments of investments (net) of: | ||
| Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and customers |
(1,012) | (1,000) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 814 | 89 |
| Depreciation and amortization | 268 | 264 |
| Loan loss provisions | 14 | 46 |
| Interest credited to policyholder accounts | 922 | 901 |
| Net change in: | ||
| Financial assets and liabilities held for trading | 683 | (911) |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | (228) | (61) |
| Repurchase agreements and collateral received from securities lending transactions | 525 | (422) |
| Reinsurance assets | (352) | (495) |
| Deferred acquisition costs | (597) | (278) |
| Unearned premiums | 4,155 | 3,766 |
| Reserves for loss and loss adjustment expenses | (802) | 137 |
| Reserves for insurance and investment contracts | 3,584 | 3,067 |
| Deferred tax assets/liabilities | 108 | (207) |
| Other (net) | (33) | (1,108) |
| Subtotal | 8,022 | 3,779 |
| Net cash flow provided by operating activities | 9,823 | 5,230 |
| condensed consolidated statements of cash flows | B 05 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 493 | 556 |
| Available-for-sale investments | 30,358 | 32,327 |
| Held-to-maturity investments | 178 | 67 |
| Investments in associates and joint ventures | 138 | 79 |
| Non-current assets classified as held for sale | 24 | 34 |
| Real estate held for investment | 112 | 33 |
| Loans and advances to banks and customers (purchased loans) | 1,642 | 2,994 |
| Property and equipment | 49 | 95 |
| Subtotal | 32,994 | 36,185 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (287) | (293) |
| Available-for-sale investments | (37,635) | (40,163) |
| Held-to-maturity investments | (121) | (367) |
| Investments in associates and joint ventures | (144) | (189) |
| Non-current assets classified as held for sale | – | (226) |
| Real estate held for investment | (155) | (35) |
| Loans and advances to banks and customers (purchased loans) | (1,411) | (1,857) |
| Property and equipment | (221) | (421) |
| Subtotal | (39,974) | (43,551) |
| Business combinations: | ||
| Proceeds from sale of subsidiaries, net of cash disposed | – | – |
| Acquisitions of subsidiaries, net of cash acquired | – | – |
| Change in other loans and advances to banks and customers (originated loans) | (565) | (738) |
| Other (net) | (190) | 271 |
| Net cash flow used in investing activities | (7,735) | (7,833) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | (558) | 34 |
| Proceeds from the issuance of certificated liabilities, participation certificates and subordinated liabilities | 2,973 | 3,043 |
| Repayments of certificated liabilities, participation certificates and subordinated liabilities | (2,637) | (1,240) |
| Cash inflow from capital increases | – | – |
| Transactions between equity holders | 3 | – |
| Dividends paid to shareholders | (53) | (45) |
| Net cash from sale or purchase of treasury shares | 2 | 9 |
| Other (net) | (19) | (55) |
| Net cash flow provided by (used in) financing activities | (289) | 1,746 |
| Supplementary information to the condensed consolidated statements of cash flows | ||
| Income taxes paid | (534) | (780) |
| Dividends received | 298 | 169 |
| Interest received | 5,086 | 5,289 |
| Interest paid | (572) | (532) |
50 Consolidated Statements of Changes in Equity
The condensed consolidated interim financial statements of the Allianz Group – comprising the consolidated balance sheets, consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, condensed consolidated statements of cash flows and selected explanatory notes – are presented in accordance with the requirements of IAS 34, Interim Financial Reporting, and have been prepared in conformity with International Financial Reporting Standards (IFRS), as adopted under European Union (E.U.) regulations in accordance with §315a of the German Commercial Code (HGB). IFRS comprise the International Financial Reporting Standards (IFRS), the International Accounting Standards (IAS), and the interpretations developed by the IFRS Interpretations Committee (formerly called the IFRIC) or the former Standing Interpretations Committee (SIC).
Within these condensed consolidated interim financial statements, the Allianz Group has applied all IFRS issued by the IASB that are endorsed by the E.U. and are compulsory as of 1 January 2013. See note 2 for further details.
For existing and unchanged IFRS, the accounting policies for recognition, measurement, consolidation and presentation applied in the preparation of the condensed consolidated interim financial statements are generally consistent with the accounting policies that have been applied in the preparation of the consolidated financial statements for the year ended 31 December 2012. See note 2 for further details. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Allianz Group Annual Report 2012.
IFRS do not provide specific guidance concerning all aspects of the recognition and measurement of insurance contracts, reinsurance contracts and investment contracts with discretionary participation features. Therefore, as envisioned in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, to those aspects where specific guidance is not provided by IFRS 4, Insurance Contracts, the provisions embodied under accounting principles generally accepted in the United States of America (US GAAP) as at first-time adoption of IFRS 4 on 1 January 2005, have been applied.
The condensed consolidated interim financial statements are presented in millions of Euros (€), unless otherwise stated.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on 14 May 2013.
2 – Recently adopted accounting pronouncements and changes in the presentation of the condensed consolidated interim financial statements
recently adopted accounting pronouncements effective 1 January 2013
The amendments eliminate the corridor approach and require all actuarial gains and losses to be recognized immediately in other comprehensive income (OCI). While all remeasurements need to be recognized in the OCI, service and interest costs have to be recognized in the profit and loss account. The long-term return on plan assets has to be calculated using the same interest rate as used to discount the defined benefit obligation (DBO).
The amendments to IAS 19 are applied retrospectively.
The following table presents the impacts of the adoption of the amendments to IAS 19 on the consolidated balance sheet.
| TO AMENDMENTS TO IAS 19 – EMPLOYEE |
BENE FITS |
B 06 | |
|---|---|---|---|
| € mn as of 31 December 2012 |
As previously reported |
Amend ments to IAS 19 |
As reported |
| Deferred tax assets | 1,270 | 256 | 1,526 |
| Other assets | 35,626 | (430) | 35,196 |
| Total assets | 694,621 | (174) | 694,447 |
| Reserves for insurance and investment contracts |
390,987 | (2) | 390,985 |
| Deferred tax liabilities | 5,169 | (1,134) | 4,035 |
| Other liabilities | 33,175 | 4,217 | 37,392 |
| Total liabilities | 638,403 | 3,081 | 641,484 |
| Shareholders' equity | 53,553 | (3,165) | 50,388 |
| Non-controlling interests | 2,665 | (90) | 2,575 |
| Total equity | 56,218 | (3,255) | 52,963 |
| Total liabilities and equity | 694,621 | (174) | 694,447 |
The impact of the adoption of the amendments to IAS 19 on the consolidated income statement for the three months ended 31 March 2012 leads to a €10 mn decrease of acquisition and administrative expenses (net) and a €4 mn increase in income taxes, which results in an one cent increase in earnings per share. For the year ended 31 December 2012, the adoption leads to an increase in income before income taxes of €88 mn and an increase in income taxes of €21 mn. This results in an increase of the earnings per share of 14 cents.
The impact on the total other comprehensive income is €(255) mn for the three months ended 31 March 2012 and €(1,816) mn for the year ended 31 December 2012.
The impact on the condensed consolidated statements of cashflows is immaterial.
In addition to the amendments to IAS 19 Employee Benefits, the following amendments and revisions to standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2013:
The Allianz Group adopted the revisions, amendments and interpretations as of 1 January 2013, with no material impact on its financial results or financial position.
Effective 1 January 2013, the Allianz Group prospectively changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts". In the consolidated income statement, the unwinding of the discounted loss reserves is now presented in "Change in reserves for insurance and investment contracts (net)".
The Allianz Group believes this change in presentation results in information that is more relevant to the economic decision-making needs of users of financial statements as it better reflects the nature of the reserves in the financial statements. In addition, the key performance indicator "combined ratio" reflects the net underwriting result.
| € mn | |||
|---|---|---|---|
| Before change in |
Change in | ||
| presen | presen | As | |
| as of 31 March 2013 | tation | tation | reported |
| Reserves for loss and loss adjustment expenses |
71,665 | (3,082) | 68,583 |
| Reserves for insurance and | |||
| investment contracts | 396,163 | 3,082 | 399,245 |
| Total liabilities | 655,960 | – | 655,960 |
| CHANGE OF consolidated income Statement RELATING |
|
|---|---|
| TO CHANGE IN PRESENTATION OF DISCOUNTED LOSS RESER VES |
B 08 |
| € mn | |||
|---|---|---|---|
| three months ended 31 March 2013 |
Before change in presen tation |
Change in presen tation |
As reported |
| Claims and insurance benefits incurred (net) |
(11,659) | 21 | (11,638) |
| Change in reserves for insurance and investment contracts (net) |
(4,078) | (21) | (4,099) |
| Net income | 1,801 | – | 1,801 |
| Loss ratio in % | 66.3 | (0.2) | 66.1 |
| Combined ratio in % | 94.5 | (0.2) | 94.3 |
The Allianz Group changed the presentation of policyholders' account deposits and withdrawals in its condensed consolidated statements of cash flows from cash flow from financing activities to cash flow from operating activities. The change in presentation is applied retrospectively.
The Allianz Group believes this change in presentation results in information that is more relevant to the economic decision-making needs of users of financial statements as those cash flows relate to the insurance activities of Allianz Group. The change in presentation results in a consistent presentation of all cash flows from insurance activities as cash flows from operating activities.
The following table presents the impact of the change in presentation of policyholders' account deposits and withdrawals on the consolidated statements of cash flows.
| CHANGE OF CONSOLIDATED STATEMENTS RELATING TO CHANGE IN PRESENTATION ACCOUNT DEPOSITS AND WITHDRA WALS |
OF CAS OF POLICY |
H FLOWS HOLDERS ' |
B 09 |
|---|---|---|---|
| € mn | |||
| three months ended 31 March 2012 |
As previously reported |
Change in presen tation |
As reported |
| Net cash flow provided by operating activities |
4,826 | 404 | 5,230 |
| Net cash flow provided by financing activities |
2,150 | (404) | 1,746 |
| Cash and cash equivalents at end of period |
9,548 | – | 9,548 |
Certain prior period amounts have been reclassified to conform to the current period presentation.
The business activities of the Allianz Group are first organized by product and type of service: insurance activities, asset management activities and corporate and other activities. Due to differences in the nature of products, risks and capital allocation, insurance activities are further divided into Property-Casualty and Life/Health categories. In accordance with the responsibilities of the Board of Management, each of the insurance categories is grouped into the following reportable segments:
Asset management activities represent a separate reportable segment. Due to differences in the nature of products, risks and capital allocation, corporate and other activities are divided into three reportable segments: Holding & Treasury, Banking and Alternative Investments. In total, the Allianz Group has identified 17 reportable segments in accordance with IFRS 8, Operating Segments.
The types of products and services from which reportable segments derive revenue are described below.
In the Property-Casualty category, reportable segments offer a wide variety of insurance products to both private and corporate customers, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit and travel insurance.
In the Life/Health category, reportable segments offer a comprehensive range of life and health insurance products on both an individual and a group basis, including annuities, endowment and term insurance, unit-linked and investment-oriented products as well as full private health and supplemental health and long-term care insurance.
The reportable segment Asset Management operates as a global provider of institutional and retail asset management products and services to third-party investors and provides investment management services to the Allianz Group's insurance operations. The products for retail and institutional customers include equity and fixed income funds as well as alternative products. The United States and Germany as well as France, Italy and the Asia-Pacific region represent the primary asset management markets.
The reportable segment Holding & Treasury includes the management and support of the Allianz Group's businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources and technology functions. The reportable segment Banking consists of the banking activities in Germany, France, Italy, the Netherlands and Bulgaria. The banks offer a wide range of products for corporate and retail clients with the main focus on the latter. The reportable segment Alternative Investments provides global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group's insurance operations. The Alternative Investments reportable segment also includes a fully consolidated private equity investment. The income and expenses of this investment are included in the nonoperating result.
Prices for transactions between reportable segments are set on an arm's length basis in a manner similar to transactions with third parties. Transactions between reportable segments are eliminated in Consolidation. For the reportable segment Asset Management, interest revenues are reported net of interest expenses.
The Allianz Group uses operating profit to evaluate the performance of its reportable segments and the Allianz Group as a whole. Operating profit highlights the portion of income before income taxes attributable to the ongoing core operations of the Allianz Group. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz Group's underlying operating performance and the comparability of its operating performance over time.
To better understand the ongoing operations of the business, the Allianz Group generally excludes the following non-operating effects:
Against this general rule, the following exceptions apply:
Operating profit should be viewed as complementary to, and not as a substitute for, income before income taxes or net income as determined in accordance with IFRS.
Effective 1 January 2013, all restructuring charges are presented within operating profit. This change does not impact recognition and measurement of the restructuring charges, shareholders' equity and net income.
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| as of 31 March | 2013 | 2012 | 2013 | 2012 |
| ASSETS | ||||
| Cash and cash equivalents | 4,900 | 2,707 | 6,320 | 5,574 |
| Financial assets carried at fair value through income | 439 | 624 | 5,358 | 6,150 |
| Investments | 91,905 | 90,168 | 307,285 | 301,111 |
| Loans and advances to banks and customers | 18,842 | 18,331 | 92,980 | 94,080 |
| Financial assets for unit-linked contracts | – | – | 75,217 | 71,197 |
| Reinsurance assets | 8,626 | 8,432 | 4,875 | 4,858 |
| Deferred acquisition costs | 4,714 | 4,323 | 15,612 | 14,990 |
| Deferred tax assets | 1,035 | 1,096 | 241 | 245 |
| Other assets | 21,487 | 21,633 | 16,429 | 16,753 |
| Non-current assets classified as held for sale | – | – | – | 12 |
| Intangible assets | 2,330 | 2,336 | 2,573 | 2,207 |
| Total assets | 154,278 | 149,650 | 526,890 | 517,177 |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| as of 31 March | 2013 | 2012 | 2013 | 2012 |
| LIABILITIES AND EQUITY |
||||
| Financial liabilities carried at fair value through income | 140 | 100 | 6,084 | 5,255 |
| Liabilities to banks and customers | 1,318 | 1,146 | 2,023 | 1,972 |
| Unearned premiums | 19,427 | 15,328 | 2,755 | 2,618 |
| Reserves for loss and loss adjustment expenses | 59,014 | 62,711 | 9,585 | 9,854 |
| Reserves for insurance and investment contracts | 13,370 | 10,174 | 386,075 | 380,993 |
| Financial liabilities for unit-linked contracts | – | – | 75,217 | 71,197 |
| Deferred tax liabilities | 2,274 | 2,562 | 3,153 | 3,276 |
| Other liabilities | 17,051 | 16,887 | 13,771 | 14,107 |
| Certificated liabilities | 39 | 25 | 14 | – |
| Participation certificates and subordinated liabilities | – | – | 95 | 95 |
| Total liabilities | 112,633 | 108,933 | 498,772 | 489,367 |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 1,467 | 1,514 | 3,399 | 4,209 | (1,777) | (1,567) | 14,309 | 12,437 |
| 625 | 699 | 116 | 170 | (299) | (360) | 6,239 | 7,283 |
| 1,119 | 1,116 | 100,044 | 100,082 | (90,575) | (90,849) | 409,778 | 401,628 |
| 393 | 395 | 17,593 | 16,896 | (9,694) | (10,333) | 120,114 | 119,369 |
| – | – | – | – | – | – | 75,217 | 71,197 |
| – | – | – | – | (35) | (36) | 13,466 | 13,254 |
| 139 | 139 | – | – | – | – | 20,465 | 19,452 |
| 199 | 257 | 1,978 | 2,217 | (1,594) | (2,289) | 1,859 | 1,526 |
| 2,744 | 2,316 | 6,061 | 5,570 | (10,769) | (11,076) | 35,952 | 35,196 |
| – | – | – | 3 | – | – | – | |
| 7,481 | 7,407 | 798 | 1,140 | – | – | 13,182 | 13,090 |
| 14,167 | 13,843 | 129,989 | 130,287 | (114,743) | (116,510) | 710,581 | 694,447 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | |
| 6,278 | (361) | (296) | 403 | 349 | – | 1 | |
| 22,425 | 22,454 | (4,882) | (5,108) | 22,791 | 22,986 | 1,398 | 1,235 |
| 22,167 | (7) | (15) | – | – | – | – | |
| 68,583 | (25) | (16) | – | – | – | – | |
| 399,245 | (182) | (200) | – | – | – | – | |
| 75,217 | – | – | – | – | – | – | |
| 4,128 | (2,289) | (1,596) | 312 | 172 | 174 | 125 | |
| 37,883 | (18,135) | (17,115) | 21,753 | 21,557 | 2,780 | 2,619 | |
| 8,335 | (6,740) | (6,193) | 14,675 | 14,475 | – | – | |
| 11,670 | (64) | (64) | 11,569 | 11,625 | 14 | 14 | |
| 655,960 | (32,685) | (30,603) | 71,503 | 71,164 | 4,366 | 3,994 | |
| 54,621 | Total equity | ||||||
| 710,581 | Total liabilities and equity |
| € mn | Property-Casualty | Life/Health | ||
|---|---|---|---|---|
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 |
| Total revenues1 | 15,197 | 14,797 | 14,837 | 13,699 |
| Premiums earned (net) | 10,312 | 10,081 | 6,360 | 6,361 |
| Operating investment result | ||||
| Interest and similar income | 887 | 939 | 4,077 | 4,062 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
8 | 2 | (244) | (162) |
| Operating realized gains/losses (net) | 15 | 5 | 899 | 1,067 |
| Interest expenses, excluding interest expenses from external debt | (15) | (11) | (19) | (20) |
| Operating impairments of investments (net) | (1) | (3) | (62) | (62) |
| Investment expenses | (68) | (67) | (190) | (162) |
| Subtotal | 826 | 865 | 4,461 | 4,723 |
| Fee and commission income | 290 | 290 | 140 | 127 |
| Other income | 8 | 7 | 49 | 42 |
| Claims and insurance benefits incurred (net) | (6,813) | (6,882) | (4,826) | (5,109) |
| Change in reserves for insurance and investment contracts (net)2 | (113) | (80) | (4,001) | (3,714) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses |
(2,909) | (2,812) | (1,248) | (1,521) |
| Fee and commission expenses | (275) | (276) | (56) | (63) |
| Restructuring charges | (2) | (6) | (1) | (2) |
| Other expenses | (5) | (4) | (23) | (19) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 1,319 | 1,183 | 855 | 825 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(9) | 20 | 13 | 13 |
| Non-operating realized gains/losses (net) | 156 | 12 | 34 | 23 |
| Non-operating impairments of investments (net) | (16) | (46) | (4) | (5) |
| Subtotal | 131 | (14) | 43 | 31 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| Amortization of intangible assets | (3) | (5) | (3) | (1) |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | 128 | (19) | 40 | 30 |
| Income (loss) before income taxes | 1,447 | 1,164 | 895 | 855 |
| Income taxes | (430) | (328) | (267) | (230) |
| Net income (loss) | 1,017 | 836 | 628 | 625 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 43 | 40 | 23 | 22 |
| Shareholders | 974 | 796 | 605 | 603 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the three months ended 31 March 2013, includes expenses for premium refunds (net) in Property-Casualty of €(63) mn (2012: €(26) mn).
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | ||
| 1,439 | 148 | 155 | (45) | (37) | 32,048 | 30,053 | |
| – | – | – | – | – | 16,672 | 16,442 | |
| 12 | 282 | 250 | (90) | (131) | 5,167 | ||
| 14 | 9 | 10 | (1) | 2 | (221) | (134) | |
| – | – | – | (35) | – | 879 | ||
| (6) | (163) | (202) | 94 | 116 | (110) | ||
| – | – | – | – | – | (63) | ||
| – | (19) | (23) | 69 | 55 | (208) | ||
| 20 | 109 | 35 | 37 | 42 | 5,444 | ||
| 1,692 | 168 | 162 | (130) | (126) | 2,754 | ||
| 4 | 2 | – | (2) | (2) | 60 | ||
| – | – | – | 1 | – | (11,638) | ||
| – | – | – | 15 | (13) | (4,099) | ||
| – | (14) | (46) | – | – | (14) | ||
| (826) | (303) | (300) | 4 | 17 | (5,464) | ||
| (277) | (112) | (125) | 54 | 57 | (778) | ||
| – | (88) | – | – | – | (94) | ||
| – | (1) | – | (17) | 4 | (46) | ||
| – | – | – | – | 7 | – | ||
| 613 | (239) | (274) | (38) | (14) | 2,797 | ||
| – | (8) | 200 | – | (5) | (4) | ||
| – | 82 | 81 | (5) | – | 267 | ||
| – | (51) | (72) | – | – | (71) | ||
| – | 23 | 209 | (5) | (5) | 192 | ||
| – | (7) | (12) | 3 | 6 | (4) | ||
| – | (241) | (259) | – | – | (241) | ||
| (11) | – | (1) | – | – | (25) | ||
| (11) | (50) | (8) | 21 | – | (41) | ||
| – | – | – | – | (7) | – | ||
| (22) | (275) | (71) | 19 | (6) | (119) | ||
| 591 | (514) | (345) | (19) | (20) | 2,678 | ||
| (212) | 117 | (31) | 4 | 7 | (877) | ||
| 379 | (397) | (376) | (15) | (13) | 1,801 | ||
| 2 | 1 | – | – | 94 | |||
| 11 368 |
(399) | (377) | (15) | (13) | 1,707 |
B 11
€ mn
| German Speaking Countries Western & Southern Europe | Iberia & Latin America | |||||||
|---|---|---|---|---|---|---|---|---|
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||
| Gross premiums written | 5,310 | 5,214 | 3,136 | 2,663 | 1,298 | 1,293 | ||
| Ceded premiums written | (802) | (805) | (239) | (219) | (178) | (225) | ||
| Change in unearned premiums | (2,085) | (2,035) | (559) | (311) | (168) | (175) | ||
| Premiums earned (net) | 2,423 | 2,374 | 2,338 | 2,133 | 952 | 893 | ||
| Interest and similar income | 290 | 286 | 196 | 216 | 54 | 56 | ||
| Operating income from financial assets and liabilities carried at fair value through income (net) |
4 | 5 | 7 | 4 | 2 | 9 | ||
| Operating realized gains/losses (net) | 15 | 5 | – | – | – | – | ||
| Fee and commission income | 33 | 38 | 6 | 6 | – | – | ||
| Other income | 6 | 6 | 1 | 1 | – | – | ||
| Operating revenues | 2,771 | 2,714 | 2,548 | 2,360 | 1,008 | 958 | ||
| Claims and insurance benefits incurred (net) | (1,657) | (1,679) | (1,544) | (1,502) | (662) | (614) | ||
| Change in reserves for insurance and investment contracts (net) | (90) | (61) | (11) | – | (1) | – | ||
| Interest expenses | (9) | (21) | (3) | (2) | (1) | (1) | ||
| Operating impairments of investments (net) | (1) | (3) | – | – | – | – | ||
| Investment expenses | (19) | (17) | (23) | (19) | (3) | (3) | ||
| Acquisition and administrative expenses (net) | (560) | (624) | (604) | (544) | (247) | (217) | ||
| Fee and commission expenses | (33) | (38) | (8) | (8) | – | – | ||
| Restructuring charges | – | (2) | – | (3) | – | – | ||
| Other expenses | (4) | (3) | (1) | (1) | – | – | ||
| Operating expenses | (2,373) | (2,448) | (2,194) | (2,079) | (914) | (835) | ||
| Operating profit | 398 | 266 | 354 | 281 | 94 | 123 | ||
| Non-operating income from financial assets and liabilities | ||||||||
| carried at fair value through income (net) | (9) | 4 | – | 8 | – | 1 | ||
| Non-operating realized gains/losses (net) | 30 | (9) | 40 | (3) | 10 | 3 | ||
| Non-operating impairments of investments (net) | (5) | (19) | (9) | (19) | (1) | (7) | ||
| Amortization of intangible assets | (1) | (1) | (3) | (1) | – | – | ||
| Non-operating items | 15 | (25) | 28 | (15) | 9 | (3) | ||
| Income before income taxes | 413 | 241 | 382 | 266 | 103 | 120 | ||
| Income taxes | (119) | (66) | (137) | (101) | (34) | (38) | ||
| Net income | 294 | 175 | 245 | 165 | 69 | 82 | ||
| Net income attributable to: | ||||||||
| Non-controlling interests | 1 | – | 4 | 3 | 1 | 1 | ||
| Shareholders | 293 | 175 | 241 | 162 | 68 | 81 | ||
| Loss ratio2 in % | 68.4 | 70.7 | 66.1 | 70.4 | 69.6 | 68.8 | ||
| Expense ratio3 in % | 23.1 | 26.3 | 25.8 | 25.5 | 25.9 | 24.3 | ||
| Combined ratio4 in % | 91.5 | 97.0 | 91.9 | 95.9 | 95.5 | 93.1 |
1 From the third quarter of 2012 on, Allianz Worldwide Care is shown in Allianz Worldwide Partners instead of Global Insurance Lines & Anglo Markets. Prior year figures have been adjusted.
3 Represents acquisition and administrative expenses (net) divided by premiums earned (net). 4 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
5 Presentation not meaningful.
B 12
USA
Anglo Markets1 Growth Markets
Cash Flows
Global Insurance Lines &
53 Notes to the Condensed Consolidated Interim Financial Statements
| Property-Casualty | Consolidation and Other |
|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 452 | 656 | 5,011 | 5,069 | 892 | 880 | 720 | 613 | (1,622) | (1,591) | 15,197 | 14,797 |
| (29) | (124) | (1,460) | (1,451) | (198) | (212) | (26) | (18) | 1,622 | 1,591 | (1,310) | (1,463) |
| 40 | (4) | (534) | (546) | (109) | (81) | (160) | (101) | – | – | (3,575) | (3,253) |
| 463 | 528 | 3,017 | 3,072 | 585 | 587 | 534 | 494 | – | – | 10,312 | 10,081 |
| 58 | 65 | 247 | 285 | 41 | 41 | 7 | 9 | (6) | (19) | 887 | 939 |
| (1) | 1 | (5) | (12) | 1 | (4) | – | (1) | – | – | 8 | 2 |
| – | – | – | – | – | – | – | – | – | – | 15 | 5 |
| – | – | 146 | 140 | 17 | 9 | 111 | 104 | (23) | (7) | 290 | 290 7 |
| – | – | – | – | – | – | 1 | – | – | – | 8 | |
| 520 | 594 | 3,405 | 3,485 | 644 | 633 | 653 | 606 | (29) | (26) | 11,520 | 11,324 |
| (304) | (373) | (1,932) | (2,037) | (364) | (359) | (350) | (318) | – | – | (6,813) | (6,882) |
| (2) | – | (9) | (19) | (1) | – | 1 | – | – | – | (113) | (80) |
| – | – | (7) | (5) | (1) | (1) | – | – | 6 | 19 | (15) | (11) |
| – | – | – | – | – | – | – | – | – | – | (1) | (3) |
| (1) | (1) | (20) | (25) | (2) | (2) | – | – | – | – | (68) | (67) |
| (166) | (184) | (960) | (880) | (202) | (201) | (175) | (164) | 5 | 2 | (2,909) | (2,812) |
| – | – | (124) | (122) | (17) | (9) | (111) | (104) | 18 | 5 | (275) | (276) |
| – | – | (2) | 1 | – | (2) | – | – | – | – | (2) | |
| – | – | – | – | – | – | – | – | – | – | (5) | |
| (473) | (558) | (3,054) | (3,087) | (587) | (574) | (635) | (586) | 29 | 26 | (10,201) | (10,141) |
| 47 | 36 | 351 | 398 | 57 | 59 | 18 | 20 | – | – | 1,319 | 1,183 |
| – | – | – | 5 | – | 1 | – | 1 | – | (9) | ||
| 4 | (1) | 70 | |||||||||
| – | |||||||||||
| 20 | 2 | 2 | – | – | – | – | 156 | ||||
| – | 2 | – | (3) | (1) | – | – | – | – | – | (16) | |
| – 4 |
– 1 |
2 72 |
(4) 18 |
(2) (1) |
(1) 2 |
– – |
– 1 |
1 1 |
2 2 |
(3) 128 |
|
| (46) (5) (19) |
|||||||||||
| 51 | 37 | 423 | 416 | 56 | 61 | 18 | 21 | 1 | 2 | 1,447 | |
| (14) | (10) | (105) | (91) | (17) | (16) | (4) | (6) | – | – | (430) | |
| 37 | 27 | 318 | 325 | 39 | 45 | 14 | 15 | 1 | 2 | 1,017 | |
| – | – | 29 | 28 | 7 | 8 | 1 | – | – | – | 43 | |
| 37 | 27 | 289 | 297 | 32 | 37 | 13 | 15 | 1 | 2 | 974 | |
| 1,164 (328) 836 796 68.3 |
|||||||||||
| 65.6 35.9 |
70.7 34.8 |
64.1 31.8 |
66.4 28.6 |
62.3 34.5 |
61.2 34.2 |
65.5 32.8 |
64.4 33.2 |
–5 –5 |
–5 –5 |
66.1 28.2 |
27.9 |
Allianz Worldwide Partners1
| € mn | ||||
|---|---|---|---|---|
| German Speaking Countries |
Western & Southern Europe |
|||
| three months ended 31 March | 2013 | 2012 | 2013 | 2012 |
| Statutory premiums1 | 6,328 | 5,922 | 5,128 | 3,800 |
| Ceded premiums written | (45) | (42) | (344) | (163) |
| Change in unearned premiums | (30) | (34) | (13) | 2 |
| Statutory premiums (net) | 6,253 | 5,846 | 4,771 | 3,639 |
| Deposits from insurance and investment contracts | (2,049) | (1,692) | (3,653) | (2,550) |
| Premiums earned (net) | 4,204 | 4,154 | 1,118 | 1,089 |
| Interest and similar income | 2,203 | 2,073 | 891 | 982 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (24) | (58) | 42 | 75 |
| Operating realized gains/losses (net) | 714 | 905 | 142 | 111 |
| Fee and commission income | 12 | 9 | 92 | 83 |
| Other income | 33 | 40 | 16 | 2 |
| Operating revenues | 7,142 | 7,123 | 2,301 | 2,342 |
| Claims and insurance benefits incurred (net) | (3,197) | (3,540) | (974) | (949) |
| Changes in reserves for insurance and investment contracts (net) | (2,974) | (2,574) | (567) | (631) |
| Interest expenses | (23) | (24) | (6) | (7) |
| Operating impairments of investments (net) | (39) | (25) | (23) | (44) |
| Investment expenses | (123) | (103) | (50) | (42) |
| Acquisition and administrative expenses (net) | (354) | (506) | (409) | (434) |
| Fee and commission expenses | (7) | (9) | (47) | (42) |
| Restructuring charges | (1) | (1) | – | (1) |
| Other expenses | (20) | (17) | (3) | (2) |
| Operating expenses | (6,738) | (6,799) | (2,079) | (2,152) |
| Operating profit | 404 | 324 | 222 | 190 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | 4 | 1 |
| Non-operating realized gains/losses (net) | – | – | 21 | 18 |
| Non-operating impairments of investments (net) | – | – | (3) | (5) |
| Amortization of intangible assets | – | (1) | – | – |
| Non-operating items | – | (1) | 22 | 14 |
| Income before income taxes | 404 | 323 | 244 | 204 |
| Income taxes | (148) | (112) | (58) | (29) |
| Net income | 256 | 211 | 186 | 175 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 6 | 12 |
| Shareholders | 256 | 211 | 180 | 163 |
| Margin on reserves2 in basis points | 74 | 64 | 65 | 61 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
2 Represents operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unitlinked contracts less reinsurance assets.
3 Presentation not meaningful.
Global Insurance Lines &
| Iberia & Latin America | USA | Anglo Markets | Growth Markets | Consolidation | Life/Health | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 437 | 354 | 1,562 | 2,023 | 132 | 120 | 1,598 | 1,628 | (348) | (148) | 14,837 | 13,699 |
| (10) | (13) | (30) | (30) | (11) | (12) | (65) | (42) | 348 | 148 | (157) | (154) |
| (30) | (1) | (1) | – | – | – | (40) | (34) | – | – | (114) | (67) |
| 397 | 340 | 1,531 | 1,993 | 121 | 108 | 1,493 | 1,552 | – | – | 14,566 | 13,478 |
| (266) | (134) | (1,323) | (1,793) | – | – | (915) | (948) | – | – | (8,206) | (7,117) |
| 131 | 206 | 208 | 200 | 121 | 108 | 578 | 604 | – | – | 6,360 | 6,361 |
| 92 | 96 | 678 | 704 | 19 | 17 | 210 | 205 | (16) | (15) | 4,077 | 4,062 |
| 6 | 5 | (251) | (168) | (18) | (23) | 5 | 4 | (4) | 3 | (244) | (162) |
| 2 | (16) | 19 | 23 | – | – | 22 | 44 | – | – | 899 | 1,067 |
| 1 | 1 | 16 | 15 | – | – | 20 | 19 | (1) | – | 140 | 127 |
| – | – | – | – | – | – | – | – | – | – | 49 | 42 |
| 232 | 292 | 670 | 774 | 122 | 102 | 835 | 876 | (21) | (12) | 11,281 | 11,497 |
| (266) | (134) | (1,323) | (1,793) | – | – | (915) | (948) | – | – | (8,206) | (7,117) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 131 | 206 | 208 | 200 | 121 | 108 | 578 | 604 | – | – | 6,360 | 6,361 |
| 92 | 96 | 678 | 704 | 19 | 17 | 210 | 205 | (16) | (15) | 4,077 | 4,062 |
| 6 | 5 | (251) | (168) | (18) | (23) | 5 | 4 | (4) | 3 | (244) | (162) |
| 2 | (16) | 19 | 23 | – | – | 22 | 44 | – | – | 899 | 1,067 |
| 1 | 1 | 16 | 15 | – | – | 20 | 19 | (1) | – | 140 | 127 |
| – | – | – | – | – | – | – | – | – | – | 49 | 42 |
| 232 | 292 | 670 | 774 | 122 | 102 | 835 | 876 | (21) | (12) | 11,281 | 11,497 |
| (139) | (141) | (22) | (22) | (98) | (77) | (396) | (380) | – | – | (4,826) | (5,109) |
| (4) | (72) | (317) | (288) | 5 | 6 | (144) | (155) | – | – | (4,001) | (3,714) |
| (1) | (1) | (2) | (2) | – | – | (2) | (2) | 15 | 16 | (19) | |
| – | – | – | 7 | – | – | – | – | – | – | (62) | |
| (1) | (2) | (8) | (8) | – | – | (8) | (7) | – | – | (190) | |
| (48) | (53) | (217) | (283) | (22) | (18) | (199) | (226) | 1 | (1) | (1,248) | (1,521) |
| – | – | (3) | (12) | – | – | – | – | 1 | – | (56) | |
| – | – | – | – | – | – | – | – | – | – | (1) | |
| – | – | – | – | – | – | – | – | – | – | (23) | |
| (193) | (269) | (569) | (608) | (115) | (89) | (749) | (770) | 17 | 15 | (10,426) | (10,672) |
| 39 | 23 | 101 | 166 | 7 | 13 | 86 | 106 | (4) | 3 | 855 | |
| – | – | 9 | 12 | – | – | – | – | – | – | 13 | |
| – | – | – | 5 | – | – | 13 | – | – | – | 34 | |
| – | – | – | – | – | – | (1) | – | – | – | (4) | |
| – | – | – | – | – | – | (3) | – | – | – | (3) | |
| – | – | 9 | 17 | – | – | 9 | – | – | – | 40 | |
| 39 | 23 | 110 | 183 | 7 | 13 | 95 | 106 | (4) | 3 | 895 | |
| (11) | (6) | (30) | (60) | (2) | (3) | (18) | (20) | – | – | (267) | |
| 17 | 80 | 123 | 5 | 10 | 77 | 86 | (4) | 3 | 628 | ||
| 28 | |||||||||||
| 6 | 1 | – | – | – | – | 11 | 9 | – | – | 23 | |
| 22 | 16 | 80 | 123 | 5 | 10 | 66 | 77 | (4) | 3 | 605 | |
| 204 | 130 | 58 | 102 | 135 | 237 | 126 | 170 | –3 | –3 | 74 |
| Reportable segments – Asset Management | B 14 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Net fee and commission income1 | 1,897 | 1,415 |
| Net interest income2 | 4 | 6 |
| Income from financial assets and liabilities carried at fair value through income (net) | 7 | 14 |
| Other income | 3 | 4 |
| Operating revenues | 1,911 | 1,439 |
| Administrative expenses (net), excluding acquisition-related expenses | (1,008) | (826) |
| Restructuring charges | (3) | – |
| Operating expenses | (1,011) | (826) |
| Operating profit | 900 | 613 |
| Acquisition-related expenses | (25) | (11) |
| Amortization of intangible assets | (6) | (11) |
| Non-operating items | (31) | (22) |
| Income before income taxes | 869 | 591 |
| Income taxes | (301) | (212) |
| Net income | 568 | 379 |
| Net income attributable to: | ||
| Non-controlling interests | 26 | 11 |
| Shareholders | 542 | 368 |
| Cost-income ratio3 in % | 52.9 | 57.4 |
1 Represents fee and commission income less fee and commission expenses.
2 Represents interest and similar income less interest expenses.
3 Represents operating expenses divided by operating revenues.
Interim Report First Quarter of 2013 Allianz Group
| € mn | |||||
|---|---|---|---|---|---|
| Holding & Treasury | |||||
| three months ended 31 March | 2013 | 2012 | |||
| Interest and similar income | 121 | 55 | |||
| Operating income from financial assets and liabilities carried at fair value through income (net) | 7 | 2 | |||
| Fee and commission income | 10 | 13 | |||
| Other income | – | – | |||
| Operating revenues | 138 | 70 | |||
| Interest expenses, excluding interest expenses from external debt | (89) | (109) | |||
| Loan loss provisions | – | – | |||
| Investment expenses | (18) | (20) | |||
| Administrative expenses (net), excluding acquisition-related expenses | (146) | (136) | |||
| Fee and commission expenses | (52) | (62) | |||
| Restructuring charges | – | – | |||
| Other expenses | – | – | |||
| Operating expenses | (305) | (327) | |||
| Operating profit (loss) | (167) | (257) | |||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (7) | 198 | |||
| Realized gains/losses (net) | 52 | 81 | |||
| Impairments of investments (net) | (51) | (72) | |||
| Income from fully consolidated private equity investments (net) | – | – | |||
| Interest expenses from external debt | (241) | (259) | |||
| Acquisition-related expenses | – | (1) | |||
| Amortization of intangible assets | (4) | (8) | |||
| Non-operating items | (251) | (61) | |||
| Income (loss) before income taxes | (418) | (318) | |||
| Income taxes | 103 | (38) | |||
| Net loss | (315) | (356) | |||
| Net loss attributable to: | |||||
| Non-controlling interests | – | – | |||
| Shareholders | (315) | (356) | |||
| Cost-income ratio1 for the reportable segment Banking in % | |||||
1 Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses, restructuring charges and other expenses divided by interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), fee and commission income, other income, interest expenses, excluding interest expenses from external debt and fee and commission expenses.
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 157 | 190 | 4 | 6 | – | (1) | 282 | 250 |
| 2 | 8 | – | – | – | – | 9 | 10 |
| 120 | 112 | 39 | 39 | (1) | (2) | 168 | 162 |
| 2 | – | 1 | 1 | (1) | (1) | 2 | |
| 281 | 310 | 44 | 46 | (2) | (4) | 461 | 422 |
| (73) | (91) | (1) | (2) | – | – | (163) | (202) (46) |
| (14) | (46) | – | – | – | – | (14) | |
| – | – | (1) | (3) | – | – | (19) | (23) |
| (128) | (125) | (31) | (42) | 2 | 3 | (303) | (300) |
| (60) | (63) | – | – | – | – | (112) | (125) |
| (88) | – | – | – | – | – | (88) | |
| (1) | – | – | – | – | – | (1) | |
| (364) | (325) | (33) | (47) | 2 | 3 | (700) | (696) |
| (83) | (15) | 11 | (1) | – | (1) | (239) | (274) |
| – | – | (1) | 1 | – | 1 | (8) | |
| 3 | – | – | – | 27 | – | 82 | |
| – | – | – | – | – | – | (51) | |
| – | – | (7) | (12) | – | – | (7) | |
| – | – | – | – | – | – | (241) | |
| – – |
– – |
– (46) |
– – |
– – |
– – |
– (50) |
|
| 3 | – | (54) | (11) | 27 | 1 | (275) | |
| (80) | (15) | (43) | (12) | 27 | – | (514) | (345) |
| 24 | 5 | (5) | 2 | (5) | – | 117 | |
| (56) | (10) | (48) | (10) | 22 | – | (397) | (376) |
| 2 | 1 | – | – | – | – | 2 | |
| (58) | (11) | (48) | (10) | 22 | – | (399) | (377) |
| 146.6 | 80.1 |
| Financial assets carried at fair value through income | B 16 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Financial assets held for trading | ||
| Debt securities | 331 | 328 |
| Equity securities | 161 | 153 |
| Derivative financial instruments | 1,141 | 1,865 |
| Subtotal | 1,633 | 2,346 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,197 | 2,349 |
| Equity securities | 2,409 | 2,588 |
| Subtotal | 4,606 | 4,937 |
| Total | 6,239 | 7,283 |
| B 17 | |
|---|---|
| as of 31 March 2013 |
as of 31 December 2012 |
| 391,457 | 383,254 |
| 4,269 | 4,321 |
| 903 | 1,188 |
| 3,325 | 3,219 |
| 9,824 | 9,646 |
| 409,778 | 401,628 |
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 31 March 2013 | as of 31 December 2012 | |||||||
| Amortized cost |
Unrealized gains |
Unrealized losses |
Fair value | Amortized cost |
Unrealized gains |
Unrealized losses |
Fair value | |
| Debt securities | ||||||||
| Government and agency mortgage-backed securities (residential and commercial) |
3,590 | 250 | (1) | 3,839 | 4,026 | 291 | (2) | 4,315 |
| Corporate mortgage-backed securities (residential and commercial) |
11,058 | 1,098 | (89) | 12,067 | 10,778 | 1,202 | (107) | 11,873 |
| Other asset-backed securities | 2,640 | 277 | (18) | 2,899 | 2,532 | 276 | (27) | 2,781 |
| Government and government agency bonds | ||||||||
| Germany | 13,391 | 1,471 | (6) | 14,856 | 13,066 | 1,521 | (5) | 14,582 |
| Italy | 28,360 | 1,149 | (278) | 29,231 | 29,762 | 1,483 | (206) | 31,039 |
| France | 31,807 | 3,676 | (41) | 35,442 | 31,384 | 4,431 | (34) | 35,781 |
| United States | 8,680 | 834 | (11) | 9,503 | 8,489 | 851 | (10) | 9,330 |
| Spain | 2,544 | 64 | (84) | 2,524 | 2,582 | 32 | (136) | 2,478 |
| Belgium | 8,558 | 1,210 | (1) | 9,767 | 8,537 | 1,372 | (1) | 9,908 |
| Greece | 1 | 1 | – | 2 | 7 | 4 | – | 11 |
| Portugal | 251 | 2 | (4) | 249 | 251 | 1 | (11) | 241 |
| Ireland | 25 | 2 | – | 27 | 76 | 3 | – | 79 |
| Hungary | 715 | 44 | (1) | 758 | 662 | 42 | – | 704 |
| All other countries | 53,810 | 5,089 | (103) | 58,796 | 51,213 | 5,329 | (52) | 56,490 |
| Subtotal | 148,142 | 13,542 | (529) | 161,155 | 146,029 | 15,069 | (455) | 160,643 |
| Corporate bonds1 | 168,491 | 13,592 | (718) | 181,365 | 161,150 | 14,142 | (954) | 174,338 |
| Other | 2,588 | 281 | (6) | 2,863 | 2,574 | 266 | (23) | 2,817 |
| Subtotal | 336,509 | 29,040 | (1,361) | 364,188 | 327,089 | 31,246 | (1,568) | 356,767 |
| Equity securities2 | 18,399 | 8,953 | (83) | 27,269 | 17,950 | 8,632 | (95) | 26,487 |
| Total | 354,908 | 37,993 | (1,444) | 391,457 | 345,039 | 39,878 | (1,663) | 383,254 |
1 Includes bonds issued by Spanish banks with a fair value of €474 mn (2012: €508 mn), thereof
subordinated bonds with a fair value of €98 mn (2012: €107 mn). 2 Includes shares invested in Spanish banks with a fair value of €265 mn (2012: €279 mn).
| € mn | |||||||
|---|---|---|---|---|---|---|---|
| as of 31 March 2013 | as of 31 December 2012 | ||||||
| Banks | Customers | Total | Banks | Customers | Total | ||
| Short-term investments and certificates of deposit | 3,672 | – | 3,672 | 4,207 | – | 4,207 | |
| Reverse repurchase agreements | 883 | – | 883 | 789 | – | 789 | |
| Collateral paid for securities borrowing transactions and derivatives | 500 | – | 500 | 365 | – | 365 | |
| Loans | 63,942 | 50,475 | 114,417 | 64,049 | 49,633 | 113,682 | |
| Other | 759 | 34 | 793 | 436 | 42 | 478 | |
| Subtotal | 69,756 | 50,509 | 120,265 | 69,846 | 49,675 | 119,521 | |
| Loan loss allowance | – | (151) | (151) | – | (152) | (152) | |
| Total | 69,756 | 50,358 | 120,114 | 69,846 | 49,523 | 119,369 | |
| Loans and advances to customers by type of customer | B 20 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Corporate customers | 19,134 | 18,126 |
| Private customers | 24,024 | 24,024 |
| Public customers | 7,351 | 7,525 |
| Total | 50,509 | 49,675 |
| Reinsurance assets | B 21 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Unearned premiums | 1,935 | 1,546 |
| Reserves for loss and loss adjustment | ||
| expenses | 6,896 | 7,318 |
| Aggregate policy reserves | 4,533 | 4,295 |
| Other insurance reserves | 102 | 95 |
| Total | 13,466 | 13,254 |
| Deferred acquisition costs | B 22 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Deferred acquisition costs | ||
| Property-Casualty | 4,714 | 4,323 |
| Life/Health | 14,072 | 13,521 |
| Asset Management | 139 | 139 |
| Subtotal | 18,925 | 17,983 |
| Present value of future profits | 952 | 945 |
| Deferred sales inducements | 588 | 524 |
| Total | ||
| 20,465 | 19,452 |
| as of 31 March 2013 6,069 |
31 December 2012 |
|---|---|
| as of | |
| 6,005 | |
| 5,364 | 4,497 |
| 1,565 | 2,421 |
| 4,923 | 4,054 |
| (716) | (730) |
| 17,205 | 16,247 |
| 1,535 | 1,363 |
| 1,230 | 1,278 |
| 2,765 | 2,641 |
| 7,401 | 7,780 |
| 13 | 17 |
| 368 | 300 |
| 381 | 317 |
| 129 | |
| 2,885 | |
| 1,600 | 1,590 |
| 977 | 967 |
| 1,203 | 1,225 |
| 6,487 | 6,667 |
| 1,555 | 1,415 |
| 35,196 | |
| 158 2,707 35,952 |
50 Consolidated Statements of Changes in Equity
| Non-current assets classified as held for sale | B 24 | |
|---|---|---|
| € mn | as of 31 March 2013 |
as of 31 December 2012 |
| Non-current assets classified as held for sale |
||
| Real estate held for investment | – | 15 |
| Total | – | 15 |
For the year ended 31 December 2012, the non-current assets classified as held for sale comprised only real estate held for investment. As expected, the sale of these investments was completed during the first quarter 2013.
| Goodwill | B 26 |
|---|---|
| € mn | |
| 2013 | |
| Cost as of 1 January | 12,573 |
| Accumulated impairments as of 1 January | (894) |
| Carrying amount as of 1 January | 11,679 |
| Additions | – |
| Disposals | – |
| Foreign currency translation adjustments | 90 |
| Impairments | (46) |
| Carrying amount as of 31 March | 11,723 |
| Accumulated impairments as of 31 March | 940 |
| Cost as of 31 March | 12,663 |
In the first quarter of 2013, the Goodwill of a fully consolidated private equity investment was impaired by €46 mn in the segment Corporate and Other.
| Intangible Assets | B 25 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Intangible assets with indefinite useful lives |
||
| Goodwill | 11,723 | 11,679 |
| Brand names1 | 301 | 302 |
| Subtotal | 12,024 | 11,981 |
| Intangible assets with finite useful lives | ||
| Distribution agreements2 | 893 | 826 |
| Customer relationships | 146 | 152 |
| Other3 | 119 | 131 |
| Subtotal | 1,158 | 1,109 |
| Total | 13,182 | 13,090 |
1 Includes primarily the brand name of Selecta AG, Muntelier.
2 Includes primarily the long-term distribution agreements with Commerzbank AG of €400 mn (2012: €410 mn), Banco Popular S.A. of €382 mn (2012: €386 mn) and HSBC of €82 mn (2012: €– mn).
3 Includes primarily acquired business portfolios and renewal rights of €62 mn (2012: €67 mn), heritable building rights of €17 mn (2012: €15 mn), and research and development costs of €11 mn (2012: €11 mn). The other distribution rights of €20 mn (2012: €20 mn) and the bancassurance agreements of €10 mn (2012: €10 mn) were reclassified from line item "Other" into line item "Distribution agreements".
| B 27 | |
|---|---|
| as of | as of 31 December |
| 2013 | 2012 |
| 5,395 | |
| 2 | 2 |
| 5,397 | |
| – | – |
| 5,397 | |
| Financial liabilities carried at fair value through income 31 March 6,276 6,278 6,278 |
| € mn | ||||||
|---|---|---|---|---|---|---|
| as of 31 March 2013 | as of 31 December 2012 | |||||
| Banks | Customers | Total | Banks | Customers | Total | |
| Payable on demand | 322 | 4,508 | 4,830 | 135 | 4,724 | 4,859 |
| Savings deposits | – | 2,875 | 2,875 | – | 2,897 | 2,897 |
| Term deposits and certificates of deposit | 983 | 1,617 | 2,600 | 986 | 1,651 | 2,637 |
| Repurchase agreements | 1,104 | 750 | 1,854 | 743 | 656 | 1,399 |
| Collateral received from securities lending transactions and derivatives | 1,882 | – | 1,882 | 1,793 | – | 1,793 |
| Other | 4,870 | 3,543 | 8,413 | 5,420 | 3,420 | 8,840 |
| Total | 9,161 | 13,293 | 22,454 | 9,077 | 13,348 | 22,425 |
| Reserves for loss and loss adjustment expenses | |
|---|---|
| as of 31 March 2013 |
as of 31 December 2012 |
| 62,711 | |
| 9,585 | 9,854 |
| (16) | (25) |
| 68,583 | 72,540 |
| 59,014 |
| € mn | ||||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | |||||
| Gross | Ceded | Net | Gross | Ceded | Net | |
| As of 1 January | 62,711 | (6,905) | 55,806 | 59,493 | (6,658) | 52,835 |
| Loss and loss adjustment expenses incurred | ||||||
| Current year | 7,428 | (464) | 6,964 | 7,605 | (459) | 7,146 |
| Prior years | (210) | 59 | (151) | (234) | (30) | (264) |
| Subtotal | 7,218 | (405) | 6,813 | 7,371 | (489) | 6,882 |
| Loss and loss adjustment expenses paid | ||||||
| Current year | (1,878) | 36 | (1,842) | (1,876) | 39 | (1,837) |
| Prior years | (6,272) | 625 | (5,647) | (5,405) | 522 | (4,883) |
| Subtotal | (8,150) | 661 | (7,489) | (7,281) | 561 | (6,720) |
| Foreign currency translation adjustments and other changes | 337 | (43) | 294 | (217) | (7) | (224) |
| Changes in the consolidated subsidiaries of the Allianz Group | (20) | – | (20) | – | – | – |
| Reclassifications1 | (3,082) | 206 | (2,876) | – | – | – |
| As of 31 March | 59,014 | (6,486) | 52,528 | 59,366 | (6,593) | 52,773 |
1 Effective 1 January 2013, the Allianz Group changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts". For further information please see note 2.
| Reserves for insurance and investment contracts | B 31 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Aggregate policy reserves | 358,506 | 350,244 |
| Reserves for premium refunds | 39,997 | 40,031 |
| Other insurance reserves | 742 | 710 |
| Total | 399,245 | 390,985 |
| other liabilities | B 32 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March 2013 |
31 December 2012 |
|
| Payables | ||
| Policyholders | 3,991 | 4,710 |
| Reinsurance | 1,169 | 1,845 |
| Agents Subtotal |
1,624 6,784 |
1,529 8,084 |
| Payables for social security | 419 | 458 |
| Tax payables | ||
| Income taxes | 3,140 | 2,680 |
| Other taxes | 1,603 | 1,143 |
| Subtotal | 4,743 | 3,823 |
| Accrued interest and rent | 448 | 671 |
| Unearned income | ||
| Interest and rent | 18 | 5 |
| Other | 291 | 288 |
| Subtotal | 309 | 293 |
| Provisions | ||
| Pensions and similar obligations | 8,135 | 8,069 |
| Employee related | 2,353 | 2,100 |
| Share-based compensation plans | 517 | 558 |
| Restructuring plans | 359 | 304 |
| Loan commitments | 55 | 67 |
| Contingent losses from non-insurance | ||
| business | 149 | 166 |
| Other provisions | 1,467 | 1,632 |
| Subtotal | 13,035 | 12,896 |
| Deposits retained for reinsurance ceded | 1,870 | 1,834 |
| Derivative financial instruments used for | ||
| hedging that meet the criteria for hedge accounting and firm commitments |
274 | 462 |
| Financial liabilities for puttable equity | ||
| instruments | 2,422 | 2,601 |
| Other liabilities | 7,579 | 6,270 |
| Total | 37,883 | 37,392 |
The change in the restructuring provisions is mainly driven by the closure of Allianz Bank by 30 June 2013. In this regard, restructuring charges of €88 mn, thereof restructuring provisions of €85 mn, were recorded in the reportable segment banking in the first quarter of 2013.
The use of the provisions as well as the transfers to other provisions of other restructuring programs partially offset this increase. There were no other significant changes in the estimates for restructuring provisions as described in the Allianz Group Annual Report 2012.
| Certificated liabilities | B 33 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Allianz SE1 | ||
| Senior bonds2 | 6,561 | 5,942 |
| Money market securities | 1,114 | 1,180 |
| Subtotal | 7,675 | 7,122 |
| Banking subsidiaries | ||
| Senior bonds | 635 | 813 |
| Subtotal | 635 | 813 |
| All other subsidiaries | ||
| Certificated liabilities | 25 | 25 |
| Subtotal | 25 | 25 |
| Total | 8,335 | 7,960 |
1 Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE, and money market securities issued by Allianz Finance Corporation, a wholly-owned subsidiary of Allianz SE, which are fully and unconditionally guaranteed by Allianz SE.
2 Change due to the issuance of senior bonds in the amount of €2.1 bn in the first quarter of 2013 and the repayment of a €1.5 bn bond in the first quarter of 2013.
| Participation certificates and subordinated liabilities | B 34 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Allianz SE1 | ||
| Subordinated bonds | 10,962 | 10,896 |
| Subtotal | 10,962 | 10,896 |
| Banking subsidiaries | ||
| Subordinated bonds | 264 | 274 |
| Subtotal | 264 | 274 |
| All other subsidiaries | ||
| Subordinated bonds | 399 | 399 |
| Hybrid equity | 45 | 45 |
| Subtotal | 444 | 444 |
| Total | 11,670 | 11,614 |
1 Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
| equity | B 35 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 31 March | 31 December | |
| 2013 | 2012 | |
| Shareholders' equity | ||
| Issued capital | 1,167 | 1,167 |
| Capital reserves | 27,648 | 27,648 |
| Retained earnings1 | 15,264 | 13,524 |
| Foreign currency translation | ||
| adjustments | (1,801) | (2,073) |
| Unrealized gains and losses (net)2 | 9,672 | 10,122 |
| Subtotal | 51,950 | 50,388 |
| Non-controlling interests | 2,671 | 2,575 |
| Total | 54,621 | 52,963 |
1 As of 31 March 2013, includes €(217) mn (2012: €(218) mn) related to treasury shares. 2 As of 31 March 2013, includes €262 mn (2012: €256 mn) related to cash flow hedges.
| B 36 | Premiums earned (net) | |||
|---|---|---|---|---|
| € mn | ||||
| Group | Consolidation | Life/Health | Property-Casualty | three months ended 31 March |
| 2013 | ||||
| Premiums written | ||||
| 20,976 | – | 6,460 | 14,516 | Direct |
| 829 | (14) | 162 | 681 | Assumed |
| 21,805 | (14) | 6,622 | 15,197 | Subtotal |
| (1,445) | 14 | (149) | (1,310) | Ceded |
| 20,360 | – | 6,473 | 13,887 | Net |
| Change in unearned premiums | ||||
| (3,962) | – | (119) | (3,843) | Direct |
| (107) | (1) | 5 | (111) | Assumed |
| (4,069) | (1) | (114) | (3,954) | Subtotal |
| 381 | 1 | 1 | 379 | Ceded |
| (3,688) | – | (113) | (3,575) | Net |
| Premiums earned | ||||
| 17,014 | – | 6,341 | 10,673 | Direct |
| 722 | (15) | 167 | 570 | Assumed |
| 17,736 | (15) | 6,508 | 11,243 | Subtotal |
| (1,064) | 15 | (148) | (931) | Ceded |
| 16,672 | – | 6,360 | 10,312 | Net |
| 2012 | ||||
| Premiums written | ||||
| 20,448 | – | 6,438 | 14,010 | Direct |
| 911 | (11) | 135 | 787 | Assumed |
| 21,359 | (11) | 6,573 | 14,797 | Subtotal |
| (1,597) | 11 | (145) | (1,463) | Ceded |
| 19,762 | – | 6,428 | 13,334 | Net |
| Change in unearned premiums | ||||
| (3,650) | – | (67) | (3,583) | Direct |
| (147) | 2 | (1) | (148) | Assumed |
| (3,797) | 2 | (68) | (3,731) | Subtotal |
| 477 | (2) | 1 | 478 | Ceded |
| (3,320) | – | (67) | (3,253) | Net |
| Premiums earned | ||||
| 16,798 | – | 6,371 | 10,427 | Direct |
| 764 | (9) | 134 | 639 | Assumed |
| 17,562 | (9) | 6,505 | 11,066 | Subtotal |
| (1,120) | 9 | (144) | (985) | Ceded |
| 16,442 | – | 6,361 | 10,081 | Net |
| Interest and similar income | B 37 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Interest from held-to-maturity investments | 47 | 52 |
| Dividends from available-for-sale investments | 299 | 168 |
| Interest from available-for-sale investments | 3,281 | 3,304 |
| Share of earnings from investments in associates and joint ventures |
27 | 9 |
| Rent from real estate held for investment | 191 | 181 |
| Interest from loans to banks and customers | 1,283 | 1,382 |
| Other interest | 39 | 36 |
| Total | 5,167 | 5,132 |
| € mn | ||||||
|---|---|---|---|---|---|---|
| three months ended 31 March | Property Casualty |
Life/Health | Asset Manage ment |
Corporate and Other |
Consoli dation |
Group |
| 2013 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (45) | (656) | – | 40 | (1) | (662) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
6 | 112 | 19 | 1 | – | 138 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(2) | (63) | (13) | – | – | (78) |
| Foreign currency gains and losses (net) | 40 | 376 | 1 | (40) | – | 377 |
| Total | (1) | (231) | 7 | 1 | (1) | (225) |
| 2012 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | 28 | (239) | 1 | 227 | (2) | 15 |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
17 | 219 | 40 | (1) | (1) | 274 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(3) | (114) | (27) | – | – | (144) |
| Foreign currency gains and losses (net) | (20) | (15) | – | (16) | – | (51) |
| Total | 22 | (149) | 14 | 210 | (3) | 94 |
For the three months ended 31 March 2013, income and expenses from financial assets and liabilities held for trading (net) in the Life/Health segment include expenses of €669 mn (2012: expenses of €258 mn) from derivative financial instruments. This includes expenses of €377 mn (2012: expenses of €59 mn) of German entities from financial derivative positions held for duration management and protection against equity and foreign exchange rate fluctuations. Also included are expenses related to fixed-indexed annuity products and guaranteed benefits under unitlinked contracts of €251 mn (2012: expenses of €185 mn) from U.S. entities.
For the three months ended 31 March 2013, income and expenses from financial assets and liabilities held for trading (net) in the Corporate and Other segment include income of €43 mn (2012: income of €265 mn) from derivative financial instruments. This includes income of €52 mn (2012: income of €22 mn) from financial derivative instruments to protect investments and liabilities against foreign exchange rate fluctuations. In 2013, hedging of strategic equity investments not designated for hedge accounting produced no income (2012: income of €10 mn). Financial derivatives related to investment strategies produced no income (2012: income of €180 mn). The decrease relates to income from The Hartford Warrants, recorded in the first quarter of 2012, which were sold by the Allianz Group in April 2012. Expenses of €4 mn (2012: expenses of €47 mn) from the hedges of share based compensation plans (restricted stock units) are also included.
For the three months ended 31 March 2013, income and expenses from financial assets and liabilities designated at fair value through income (net) in the Life/Health segment includes income from equity investments of €68 mn (2012: income of €138 mn) and income of €44 mn (2012: income of €81 mn) from debt investments.
Foreign currency gains and losses are reported within income from financial assets and liabilities carried at fair value through income (net). These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated in a foreign currency, that are monetary items. This excludes exchange differences arising on financial assets and liabilities measured at fair value through profit or loss, which do not have to be disclosed separately. The Allianz Group uses freestanding derivatives to hedge against foreign currency fluctuations, for which it recognized expenses of €368 mn (2012: income of € 85 mn) for the three months ended 31 March 2013.
| Realized gains/losses (net) | B 39 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Realized gains | ||
| Available-for-sale investments | ||
| Equity securities | 597 | 963 |
| Debt securities | 537 | 455 |
| Subtotal | 1,134 | 1,418 |
| Investments in associates and joint ventures1 | 37 | 1 |
| Real estate held for investment | 49 | 15 |
| Loans and advances to banks and customers | 46 | 132 |
| Non-current assets classified as held for sale | 12 | 8 |
| Subtotal | 1,278 | 1,574 |
| Realized losses | ||
| Available-for-sale investments | ||
| Equity securities | (56) | (54) |
| Debt securities | (68) | (329) |
| Subtotal | (124) | (383) |
| Investments in associates and joint ventures2 | (3) | – |
| Real estate held for investment | (2) | (1) |
| Loans and advances to banks and customers | – | (2) |
| Non-current assets classified as held for sale | (3) | – |
| Subtotal | (132) | (386) |
| Total | 1,146 | 1,188 |
1 For the three months ended 31 March 2013, includes realized gains from the disposal of subsidiaries and businesses of €37 mn (2012: €– mn).
2 For the three months ended 31 March 2013, includes no realized losses from the disposal of subsidiaries (2012: €– mn).
| Fee and commission income | B 40 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Property-Casualty | ||
| Fees from credit and assistance business | 183 | 189 |
| Service agreements | 107 | 101 |
| Subtotal | 290 | 290 |
| Life/Health | ||
| Investment advisory | 122 | 108 |
| Service agreements | 18 | 19 |
| Subtotal | 140 | 127 |
| Asset Management | ||
| Management fees | 1,803 | 1,507 |
| Loading and exit fees | 180 | 104 |
| Performance fees | 276 | 44 |
| Other | 27 | 37 |
| Subtotal | 2,286 | 1,692 |
| Corporate and Other | ||
| Investment advisory and banking activities | 155 | 149 |
| Service agreements | 13 | 13 |
| Subtotal | 168 | 162 |
| Consolidation | (130) | (126) |
| Total | 2,754 | 2,145 |
| Income and Expenses from fully consolidated private equity investments |
B 42 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Income | ||
| Sales and service revenues | 178 | 195 |
| Other operating revenues | – | – |
| Interest income | – | – |
| Subtotal | 178 | 195 |
| Expenses | ||
| Cost of goods sold | (55) | (62) |
| Commissions | – | – |
| General and administrative expenses | (122) | (130) |
| Other operating expenses | – | – |
| Interest expenses | (8) | (15) |
| Subtotal1 | (185) | (207) |
| Total1 | (7) | (12) |
1 The presented subtotal for expenses and total income and expenses from fully consolidated private equity investments for the three months ended 31 March 2013 differs from the amounts presented in the "Consolidated Income Statements" and in "Total revenues and reconciliation of Operating profit (loss) to Net income (loss)". This difference is due to a consolidation effect of € 3 mn (2012: €6 mn) for the three months ended 31 March 2013. This consolidation effect results from the deferred policyholder participation, recognized on the result from fully consolidated private equity investments within operating profit in the Life/ Health segment, that was reclassified into expenses from fully consolidated private equity investments in non-operating profit to ensure a consistent presentation of the Allianz Group's operating profit.
| oTHER INCOME |
B 41 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Realized gains from disposals of real estate held for own use |
15 | 7 |
| Income from alternative investments | 42 | 42 |
| Other | 3 | 2 |
| Total | 60 | 51 |
| Claims and insurance benefits incurred (net) | B 43 | |||
|---|---|---|---|---|
| € mn three months ended 31 March |
Property-Casualty | Life/Health | Consolidation | Group |
| 2013 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (8,150) | (5,050) | 9 | (13,191) |
| Change in reserves for loss and loss adjustment expenses | 932 | 78 | (1) | 1,009 |
| Subtotal | (7,218) | (4,972) | 8 | (12,182) |
| Ceded | ||||
| Claims and insurance benefits paid | 661 | 159 | (8) | 812 |
| Change in reserves for loss and loss adjustment expenses | (256) | (13) | 1 | (268) |
| Subtotal | 405 | 146 | (7) | 544 |
| Net | ||||
| Claims and insurance benefits paid | (7,489) | (4,891) | 1 | (12,379) |
| Change in reserves for loss and loss adjustment expenses | 676 | 65 | – | 741 |
| Total | (6,813) | (4,826) | 1 | (11,638) |
| 2012 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (7,281) | (5,128) | 4 | (12,405) |
| Change in reserves for loss and loss adjustment expenses | (90) | (115) | 1 | (204) |
| Subtotal | (7,371) | (5,243) | 5 | (12,609) |
| Ceded | ||||
| Claims and insurance benefits paid | 561 | 107 | (4) | 664 |
| Change in reserves for loss and loss adjustment expenses | (72) | 27 | (1) | (46) |
| Subtotal | 489 | 134 | (5) | 618 |
| Net | ||||
| Claims and insurance benefits paid | (6,720) | (5,021) | – | (11,741) |
| Change in reserves for loss and loss adjustment expenses | (162) | (88) | – | (250) |
| Total | (6,882) | (5,109) | – | (11,991) |
| Change in reserves for insurance and investment contracts (net) | B 44 | |||
|---|---|---|---|---|
| € mn three months ended 31 March |
Property-Casualty | Life/Health | Consolidation | Group |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (49) | (2,026) | – | (2,075) |
| Other insurance reserves | (1) | (44) | – | (45) |
| Expenses for premium refunds | (63) | (1,918) | 15 | (1,966) |
| Subtotal | (113) | (3,988) | 15 | (4,086) |
| Ceded | ||||
| Aggregate policy reserves | 1 | (18) | – | (17) |
| Other insurance reserves | (1) | 3 | – | 2 |
| Expenses for premium refunds | – | 2 | – | 2 |
| Subtotal | – | (13) | – | (13) |
| Net | ||||
| Aggregate policy reserves | (48) | (2,044) | – | (2,092) |
| Other insurance reserves | (2) | (41) | – | (43) |
| Expenses for premium refunds | (63) | (1,916) | 15 | (1,964) |
| Total | (113) | (4,001) | 15 | (4,099) |
| 2012 | ||||
| Gross | ||||
| Aggregate policy reserves | (54) | (2,041) | – | (2,095) |
| Other insurance reserves | – | (34) | – | (34) |
| Expenses for premium refunds | (26) | (1,664) | (13) | (1,703) |
| Subtotal | (80) | (3,739) | (13) | (3,832) |
| Ceded | ||||
| Aggregate policy reserves | – | 24 | – | 24 |
| Other insurance reserves | – | 1 | – | 1 |
| Expenses for premium refunds | – | – | – | – |
| Subtotal | – | 25 | – | 25 |
| Net | ||||
| Aggregate policy reserves | (54) | (2,017) | – | (2,071) |
| Other insurance reserves | – | (33) | – | (33) |
| Expenses for premium refunds | (26) | (1,664) | (13) | (1,703) |
| Total | (80) | (3,714) | (13) | (3,807) |
| Interest Expenses | B 45 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Liabilities to banks and customers | (68) | (93) |
| Deposits retained on reinsurance ceded | (12) | (13) |
| Certificated liabilities | (68) | (81) |
| Participation certificates and subordinated liabilities |
(175) | (173) |
| Other | (28) | (22) |
| Total | (351) | (382) |
| B 46 | |
|---|---|
| 2013 | 2012 |
| (48) | (63) |
| 28 | 12 |
| 6 | 5 |
| (14) | (46) |
| Impairments of investments (net) | B 47 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Impairments | ||
| Available-for-sale investments | ||
| Equity securities | (114) | (209) |
| Debt securities | (4) | (3) |
| Subtotal | (118) | (212) |
| Real estate held for investment | (12) | – |
| Loans and advances to banks and customers | (4) | (2) |
| Subtotal | (134) | (214) |
| Reversals of impairments | ||
| Available-for-sale investments | ||
| Debt securities | – | 15 |
| Loans and advances to banks and customers | – | 11 |
| Subtotal | – | 26 |
| Total | (134) | (188) |
| Investment expenses | B 48 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Investment management expenses | (128) | (123) |
| Depreciation of real estate held for investment |
(50) | (44) |
| Other expenses from real estate held for investment |
(30) | (30) |
| Total | (208) | (197) |
| Acquisition and administrative expenses (net) | B 49 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Property-Casualty | ||
| Acquisition costs | ||
| Incurred | (2,712) | (2,556) |
| Commissions and profit received on reinsurance business ceded |
108 | 99 |
| Deferrals of acquisition costs | 1,751 | 1,716 |
| Amortization of deferred acquisition costs | (1,336) | (1,345) |
| Subtotal | (2,189) | (2,086) |
| Administrative expenses | (720) | (726) |
| Subtotal | (2,909) | (2,812) |
| Life/Health | ||
| Acquisition costs | ||
| Incurred | (1,121) | (1,148) |
| Commissions and profit received on reinsurance business ceded |
25 | 23 |
| Deferrals of acquisition costs | 736 | 735 |
| Amortization of deferred acquisition costs | (557) | (785) |
| Subtotal | (917) | (1,175) |
| Administrative expenses | (331) | (346) |
| Subtotal | (1,248) | (1,521) |
| Asset Management | ||
| Personnel expenses | (709) | (542) |
| Non-personnel expenses | (324) | (295) |
| Subtotal | (1,033) | (837) |
| Corporate and Other | ||
| Administrative expenses | (303) | (301) |
| Subtotal | (303) | (301) |
| Consolidation | 4 | 17 |
| Total | (5,489) | (5,454) |
| – 36 |
Income taxes | |
|---|---|---|
| --------- | -------------- | -- |
| Fee and commission expenses | B 50 | |
|---|---|---|
| € mn | ||
| three months ended 31 March | 2013 | 2012 |
| Property-Casualty | ||
| Fees from credit and assistance business | (179) | (189) |
| Service agreements | (96) | (87) |
| Subtotal | (275) | (276) |
| Life/Health | ||
| Investment advisory | (44) | (46) |
| Service agreements | (12) | (17) |
| Subtotal | (56) | (63) |
| Asset Management | ||
| Commissions | (376) | (274) |
| Other | (13) | (3) |
| Subtotal | (389) | (277) |
| Corporate and Other | ||
| Investment advisory and banking activities | (60) | (63) |
| Service agreements | (52) | (62) |
| Subtotal | (112) | (125) |
| Consolidation | 54 | 57 |
| Total | (778) | (684) |
| Income taxes | B 52 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Current income taxes | (790) | (1,060) |
| Deferred income taxes | (87) | 266 |
| Total | (877) | (794) |
For the three months ended 31 March 2013 and 2012, the income taxes relating to components of other comprehensive income consist of the following:
| other comprehensive income | B 53 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Items that may be reclassified to profit and loss in future periods |
||
| Foreign currency translation adjustments | 11 | (2) |
| Available-for-sale investments | 245 | (850) |
| Cash flow hedges | (1) | (5) |
| Share of other comprehensive income of associates |
– | 1 |
| Miscellaneous | 103 | 9 |
| Items that may never be reclassified to profit and loss |
||
| Actuarial gains (losses) on defined benefit plans |
14 | 110 |
| Total | 372 | (737) |
| Other expenses | B 51 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Expenses from alternative investments | (21) | (19) |
| Other | (25) | – |
| Total | (46) | (19) |
The Allianz Group carries certain financial instruments at fair value and discloses the fair value of most other assets and liabilities. The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The degree of judgment used in measuring the fair value of financial instruments closely correlates with the level of non-market observable inputs. The Allianz Group maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Observability of input parameters is influenced by various factors such as the type of the financial instrument, whether a market is established for the particular instrument, specific transaction characteristics, liquidity as well as general market conditions.
If the fair value cannot be measured reliably, amortized cost is used as a proxy for determining fair values. As of 31 March 2013, fair values could not be reliably measured for equity investments with carrying amounts totaling €225 mn (31 December 2012: €223 mn). These investments are primarily investments in privately held corporations and partnerships.
Assets and liabilities measured or disclosed at fair value in the consolidated financial statements are measured and classified in accordance with the fair value hierarchy in IFRS 13, which consists of three levels based on the observability of inputs within the corresponding valuation techniques used.
The fair values of financial instruments that are traded in active markets are based on quoted market prices or dealer price quotations on the last exchange trading day prior to or at the balance sheet date, if the latter is a trading day.
If the market for a financial instrument is not active, the fair value is determined by using valuation techniques. The valuation techniques used are mainly based on market observable inputs. Such market inputs include references to formerly quoted prices for identical instruments from an active market, quoted prices for identical instruments from an inactive market, quoted prices for similar instruments from active markets and quoted prices for similar instruments from inactive markets. Market observable inputs also include interest rate yield curves, volatilities and foreign currency exchange rates.
Where observable market inputs are not available, the fair value is based on valuation techniques using non-market observable inputs. Valuation techniques include the discounted cash flow method, comparison to similar instruments for which observable market prices exist and other valuation models. Appropriate adjustments are made for credit risks. In particular, when observable market inputs are not available, the use of estimates and assumptions may have a high impact on the valuation outcome.
The following financial assets and liabilities are carried at fair value on a recurring basis:
In general, the subsidiaries assume responsibility for assessing fair values of assets and liabilities. This is consistent with the decentralized organizational structure and reflects market insights of local managers.
Estimates and assumptions are particularly significant when determining the fair value of financial instruments for which at least one significant input is not based on observable market data (classified within level 3 of the fair
Comprehensive Income 50 Consolidated Statements of Changes in Equity
value hierarchy). The availability of market information is determined by the relative trading levels of identical or similar instruments in the market, with emphasis placed on information that represents actual market activity or binding quotations from brokers or dealers. When appropriate, values are adjusted on the basis of available market information including credit-related factors, volatility levels
and liquidity considerations. If no sufficient market information is available, management's best estimate of a particular input is used to determine the value.
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 31 March 2013 and 31 December 2012.
| € mn | ||||
|---|---|---|---|---|
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | 98 | 233 | – | 331 |
| Equity securities | 70 | 91 | – | 161 |
| Derivative financial instruments | 77 | 908 | 156 | 1,141 |
| Subtotal | 245 | 1,232 | 156 | 1,633 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,770 | 427 | – | 2,197 |
| Equity securities | 2,151 | – | 258 | 2,409 |
| Subtotal | 3,921 | 427 | 258 | 4,606 |
| Subtotal | 4,166 | 1,659 | 414 | 6,239 |
| Available-for-sale investments | ||||
| Equity securities | 20,626 | 1,386 | 5,257 | 27,269 |
| Government and agency mortgage-backed securities (residential and commercial) |
37 | 3,802 | – | 3,839 |
| Corporate mortgage-backed securities (residential and commercial) |
27 | 12,004 | 36 | 12,067 |
| Other asset-backed securities | 51 | 2,604 | 244 | 2,899 |
| Government and government agency bonds | 138,450 | 22,668 | 37 | 161,155 |
| Corporate bonds | 38,975 | 139,202 | 3,188 | 181,365 |
| Other debt securities | 1,429 | 935 | 499 | 2,863 |
| Subtotal | 199,595 | 182,601 | 9,261 | 391,457 |
| Financial assets for unit-linked contracts | 72,523 | 2,509 | 185 | 75,217 |
| Derivative financial instruments and firm commitments included in other assets |
– | 158 | – | 158 |
| Total | 276,284 | 186,927 | 9,860 | 473,071 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 24 | 1,275 | 4,977 | 6,276 |
| Other trading liabilities | – | 2 | – | 2 |
| Subtotal | 24 | 1,277 | 4,977 | 6,278 |
| Financial liabilities for unit-linked contracts | 72,523 | 2,509 | 185 | 75,217 |
| Derivative financial instruments and firm commitments included in other liabilities |
– | 274 | – | 274 |
| Financial liabilities for puttable equity instruments | 2,306 | 27 | 89 | 2,422 |
| Total | 74,853 | 4,087 | 5,251 | 84,191 |
| € mn | ||||
|---|---|---|---|---|
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | 102 | 226 | – | 328 |
| Equity securities | 69 | 84 | – | 153 |
| Derivative financial instruments | 36 | 1,670 | 159 | 1,865 |
| Subtotal | 207 | 1,980 | 159 | 2,346 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,945 | 404 | – | 2,349 |
| Equity securities | 2,355 | – | 233 | 2,588 |
| Subtotal | 4,300 | 404 | 233 | 4,937 |
| Subtotal | 4,507 | 2,384 | 392 | 7,283 |
| Available-for-sale investments | ||||
| Equity securities | 19,933 | 1,291 | 5,263 | 26,487 |
| Government and agency mortgage-backed securities (residential and commercial) |
37 | 4,278 | – | 4,315 |
| Corporate mortgage-backed securities (residential and commercial) |
26 | 11,817 | 30 | 11,873 |
| Other asset-backed securities | 80 | 2,465 | 236 | 2,781 |
| Government and government agency bonds | 138,690 | 21,915 | 38 | 160,643 |
| Corporate bonds | 33,512 | 137,705 | 3,121 | 174,338 |
| Other debt securities | 1,390 | 960 | 467 | 2,817 |
| Subtotal | 193,668 | 180,431 | 9,155 | 383,254 |
| Financial assets for unit-linked contracts | 68,508 | 2,504 | 185 | 71,197 |
| Derivative financial instruments and firm commitments included in other assets |
– | 129 | – | 129 |
| Total | 266,683 | 185,448 | 9,732 | 461,863 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 58 | 756 | 4,581 | 5,395 |
| Other trading liabilities | – | 2 | – | 2 |
| Subtotal | 58 | 758 | 4,581 | 5,397 |
| Financial liabilities for unit-linked contracts | 68,508 | 2,504 | 185 | 71,197 |
| Derivative financial instruments and firm commitments included in other liabilities |
– | 462 | – | 462 |
| Financial liabilities for puttable equity instruments | 2,495 | 26 | 80 | 2,601 |
| Total | 71,061 | 3,750 | 4,846 | 79,657 |
The Allianz Group uses valuation techniques consistent with one or more of the three widely used classes of valuation techniques listed in IFRS 13 to measure fair value:
There is no one-to-one connection between valuation technique and hierarchy level. The hierarchy level is defined via the significance of non-market observable inputs for these valuation techniques.
The fair value is mainly determined using the market approach. In some cases, the fair value is determined based on the income approach using interest rates and yield curves observable at commonly quoted intervals.
For level 2, the fair value is mainly determined based on the income approach using deterministic or stochastic discounted cash flow models. Primary inputs to the valuation include volatilities, interest rates, yield curves, credit spreads, dividend estimates and foreign exchange rates observable at commonly quoted intervals.
For level 3, derivatives are mainly priced by third-party vendors. Controls are in place to monitor the valuations of these derivatives. Valuations are mainly derived based on the income approach.
The fair value is determined using the market approach. For level 3, equity securities mainly represent private equity funds. The fair value is in most cases derived from the net asset value based on the valuation of the underlying portfolio companies as provided by third-party vendors. The fair value of the underlying companies is mainly determined using multiple approaches.
Available-for-sale investments – Equity securities For level 2, the fair value is mainly determined using the market approach. For certain private equity investments, the funds are priced based on transaction prices using the cost approach. As there are only few holders of these funds, the market is not liquid and transactions are only known to participants. For level 3, the fair value is mainly determined using net asset values. The net asset values are based on the fair value measurement of the underlying investments and are mainly provided by fund managers. For certain level 3 equity securities, the invested capital is considered to be a reasonable proxy for the fair value.
The valuation techniques for these debt securities are similar. For level 2 and level 3, the fair value is determined using the market approach and income approach. Primary inputs to the market approach are quoted prices for identical or comparable assets in active markets where the comparability between security and benchmark defines the fair value level. The income approach in most cases means a discounted cash flow method where either the cash flow or the discount curve is adjusted to reflect credit risk and liquidity risk. Depending on the observability of these risk parameters in the market, the security is classified in level 2 or level 3.
For level 2, the fair value is determined using the market or the income approach. For the income approach, primary observable inputs include yield curves observable at commonly quoted intervals. For level 3, the fair value is determined based on the net asset value provided by third-party vendors.
For financial liabilities for unit-linked contracts the same valuation techniques apply as for financial assets for unitlinked contracts.
The fair value of the derivatives is mainly determined based on the income approach using present value techniques. Primary inputs include yield curves observable at commonly quoted intervals. These derivatives are mainly used for hedging purposes. Certain derivatives are priced by Bloomberg functions, such as Black-Scholes Option Pricing, or the swap manager tool.
For level 2, the fair value is mainly determined using the market approach or the income approach. Valuation techniques applied for the income approach mainly include discounted cash flow models as well as the Black-Scholes model. Main observable input parameters include implied volatilities, yield curves observable at commonly quoted intervals and credit spreads observable in the market. For level 3, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. A significant proportion of derivative liabilities represent derivatives embedded in certain life and annuity contracts. Significant non-market observable input parameters include mortality rates and surrender rates.
The fair value is mainly determined based on the income approach using present value techniques. Primary inputs comprise swap curves, share prices and dividend estimates.
For level 2, the fair value is mainly determined using the income approach. Primary inputs include interest rates and credit spreads observable at commonly quoted intervals.
Financial liabilities for puttable equity instruments are generally required to be recorded at the redemption amount with changes recognized in income. For level 2, the fair value is mainly determined based on the income approach using present value techniques.
In general, financial assets and liabilities are transferred from level 1 to level 2 when liquidity, trade frequency and activity are no longer indicative of an active market. Conversely, the same policy applies for transfers from level 2 to level 1.
Certain available-for-sale government and government agency bonds in the amount of €0.3 BN as well as corporate bonds in the amount of €1.6 BN were transferred from level 1 to level 2 during the three months ended 31 March 2013.
Additionally, available-for-sale government and government agency bonds in the amount of €0.3 BN as well as certain corporate bonds in the amount of €2.5 bn were transferred from level 2 to level 1 during the three months ended 31 March 2013.
There were no significant transfers into or out of level 3 during the three months ended 31 March 2013.
Equity securities within available-for-sale investments classified as level 3 mainly comprise private equity fund investments as well as alternative investments of the Allianz Group and are in most cases delivered as net asset values by the fund managers (€4.5 bn). The net asset values are calculated using material non-public information about the respective private equity companies. The Allianz Group has only limited insight into the specific inputs used by the fund managers and hence a narrative sensitivity analysis is not applicable. The fund asset manager generally prices the underlying single portfolio companies in line with the International Private Equity and Venture Capital Valuation (IPEV) guidelines using discounted cash flow (income approach) or multiple approaches (market approach). For certain investments, the invested capital is considered to be a reasonable proxy for the fair value. In these cases, sensitivity analyses are also not applicable.
Corporate bonds within available-for-sale investments classified as level 3 are mainly priced based on the market approach using matrix pricing (€2.8 bn). The primary unobservable input used in the matrix pricing model is a yield taken from a benchmark security. A significant yield increase of the benchmark securities in isolation could result in a decreased fair value, while a significant yield decrease could result in an increased fair value. A 10% stress of the main non-market observable inputs only has an immaterial impact on fair value.
Financial liabilities held for trading mainly include embedded derivative financial instruments relating to annuity products that are priced internally using discounted cash flow models (€4.8 bn). A significant increase (decrease) in the utilization of annuitization benefits could result in a higher (lower) fair value. A significant decrease (increase) in mortality rates, surrender rates, or utilization of lifetime income benefits could result in a higher (lower) fair value. However, a 10% stress of the main non-market observable inputs only has an immaterial impact on fair value.
The following table shows the quantitative description of valuation technique(s) and input(s) used for the level 3 portfolios described above.
| Quantitative description of valuation technique(s) and non -market obs ervable input(s) used |
B 56 |
|---|---|
| ------------------------------------------------------------------------------------------------------------- | ------ |
| € mn | ||||
|---|---|---|---|---|
| Description | Fair value as of 31 March 2013 Valuation technique(s) | Non-market observable input(s) |
Range | |
| Available-for-sale investments | ||||
| Equity securities | 4,521 Net asset value | n/a | n/a | |
| Corporate bonds | 2,828 Matrix pricing | Credit spread | (225) bps – 431 bps | |
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 4,834 | |||
| Fixed indexed annuities | 4,065 Present value of insurance cash flow |
Annuitizations | 0% – 25% | |
| Surrenders | 0% – 25% | |||
| Mortality | 0% – 100% | |||
| Withdrawal benefit election | 0% – 50% | |||
| Volatility | n/a | |||
| Non-performance risk | n/a | |||
| Variable annuities | 769 Deterministic discounted cash flow |
Surrenders | 0.5% – 35% | |
| Mortality | 0% – 100% |
| € mn | ||||
|---|---|---|---|---|
| Carrying value (fair value) as of 1 January 2013 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Derivative financial instruments | 159 | 11 | – | (262) |
| Subtotal | 159 | 11 | – | (262) |
| Financial assets designated at fair value through income | ||||
| Equity securities | 233 | 11 | – | – |
| Subtotal | 233 | 11 | – | – |
| Available-for-sale investments | ||||
| Equity securities | 5,263 | 239 | (82) | (167) |
| Corporate mortgage-backed securities (residential and commercial) | 30 | 2 | 2 | (1) |
| Other asset-backed securities | 236 | – | (1) | (8) |
| Government and government agency bonds | 38 | – | – | (2) |
| Corporate bonds | 3,121 | 37 | – | (17) |
| Other debt securities | 467 | 27 | – | – |
| Subtotal | 9,155 | 305 | (81) | (195) |
| Financial assets for unit-linked contracts | 185 | 1 | – | (1) |
| Total financial assets at fair value | 9,732 | 328 | (81) | (458) |
| € mn | ||||
|---|---|---|---|---|
| Carrying value (fair value) as of 1 January 2013 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 4,581 | 245 | – | (195) |
| Financial liabilities for unit-linked contracts | 185 | 1 | – | (1) |
| Financial liabilities for puttable equity instruments | 80 | – | – | – |
| Total financial liabilities at fair value | 4,846 | 246 | – | (196) |
B 57
| Net gains (losses) for financial instruments held at the reporting date |
Carrying value (fair value) as of 31 March 2013 |
Changes in the consolidated subsidiaries of the Allianz Group |
Foreign currency translation adjustments |
Impairments | Net gains (losses) recognized in other comprehensive income |
Net gains (losses) recognized in consolidated income statement |
|---|---|---|---|---|---|---|
| (17) | 156 | – | (2) | – | – | 250 |
| (17) | 156 | – | (2) | – | – | 250 |
| – | 258 | – | – | – | – | 14 |
| – | 258 | – | – | – | – | 14 |
| 5,257 | – | (11) | (17) | 34 | (2) | |
| – – |
36 | – | 1 | – | 2 | – |
| 244 | – | 4 | – | 11 | 2 | |
| 37 | – | 1 | – | – | – | |
| 3,188 | – | 74 | – | (26) | (1) | |
| 499 | 3 | – | (3) | 5 | – | |
| 9,261 | 3 | 69 | (20) | 26 | (1) | |
| 185 | – | – | – | – | – | |
| (16) | ||||||
| 9,860 | 3 | 67 | (20) | 26 | 263 |
B 58
| Changes in the consolidated subsidiaries of the Allianz Group |
Foreign currency translation adjustments |
Impairments | Net gains (losses) recognized in other comprehensive income |
Net gains (losses) recognized in consolidated income statement |
|---|---|---|---|---|
| – | 128 | – | – | 218 |
| – | – | – | – | – |
| – | – | – | 9 | – |
| – | 128 | – | 9 | 218 |
Certain financial assets are measured at fair value on a non-recurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable.
If financial assets are measured at fair value on a non-recurring basis at the time of impairment corresponding disclosures can be found in note 31 – Impairments of investments (net). If fair value less cost to sell is used as measurement basis under IFRS 5, corresponding disclosures can be found in note 10 – Non-current assets classified as held for sale.
| € mn | ||||
|---|---|---|---|---|
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
| Financial assets | ||||
| Held-to-maturity investments | 2,264 | 2,586 | 11 | 4,861 |
| Investments in associates and joint ventures | 420 | 650 | 2,524 | 3,594 |
| Real estate held for investment | – | – | 14,443 | 14,443 |
| Loans and advances to banks and customers | 6,788 | 93,523 | 37,481 | 137,792 |
| Real estate held for own use | – | – | 3,968 | 3,968 |
| Total assets | 9,472 | 96,759 | 58,427 | 164,658 |
| Financial liabilities | ||||
| Liabilities to banks and customers | 5,549 | 2,291 | 15,014 | 22,854 |
| Certificated liabilities | 7,274 | 979 | 771 | 9,024 |
| Participation certificates and subordinated liabilities | 6,576 | 5,560 | 276 | 12,412 |
| Total liabilities | 19,399 | 8,830 | 16,061 | 44,290 |
For level 2, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. For level 3, the carrying amount (amortized cost) is considered to be a reasonable estimate for the fair value.
For level 2, fair values are mainly derived based on the market approach using multiple approaches. For level 3, fair values are mainly based on net asset values as provided by third-party vendors. In some cases, the proportion of the equity included in the at equity measurement (carrying amount) is considered to be a reasonable estimate of the fair value.
Fair values are mainly determined based on the income approach. In some cases, a market approach is applied using market prices of identical or comparable assets in markets which are not active. The fair values are either calculated internally and validated by external experts or derived from expert appraisals with internal controls in place to monitor these valuations.
For loans and advances to banks and customers, quoted market prices are not available as there are no active markets in which these instruments are traded. For level 2, the fair value for these assets is mainly derived based on the income approach using deterministic discounted cash flow models. For level 3, the carrying amount (amortized cost) is considered to be a reasonable estimate for the fair value.
For level 2, the fair value is mainly derived based on the market approach – in some cases using matrix pricing – or the income approach using future cash flows discounted with risk-specific interest rates. For level 3, fair values are determined based on the income approach using deterministic discounted cash flow models. Main non-market observable inputs include credit spreads. In some cases, the carrying amount (amortized cost) is considered to be a reasonable estimate of the fair value.
The fair value is determined using quoted market prices, if available. For level 2, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. For level 3, fair values are mainly derived based on the income approach using deterministic cash flows with credit spreads as primary non-market observable inputs. In some cases, the carrying amount (amortized cost) is considered to be a reasonable estimate for the fair value.
On 31 January 2009, certain USD-denominated CDOs were reclassified from financial assets held for trading to loans and advances to banks and customers in accordance with IAS 39.
As of 31 December 2012, the carrying amount and fair value of the CDOs was €370 mn and €366 mn, respectively. As of 31 March 2013, the carrying amount and fair value of the CDOs was €372 mn and €367 mn, respectively. For the three months ended 31 March 2013, the net profit related to the CDOs was not significant.
Basic earnings per share are calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding for the period.
| basic earnings per share |
B 60 | |
|---|---|---|
| € mn three months ended 31 March |
2013 | 2012 |
| Net income attributable to shareholders used to calculate basic earnings per share | 1,707 | 1,377 |
| Weighted average number of common shares outstanding | 453,175,764 | 452,499,514 |
| Basic earnings per share (€) | 3.77 | 3.04 |
Diluted earnings per share are calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding for the period, both adjusted for the effects of potentially dilutive common shares. Potentially dilutive common shares arise from various share-based compensation plans of the Allianz Group.
| € mn three months ended 31 March |
2013 | 2012 |
|---|---|---|
| Net income attributable to shareholders | 1,707 | 1,377 |
| Effect of potentially dilutive common shares | (25) | (6) |
| Net income attributable to shareholders used to calculate diluted earnings per share | 1,682 | 1,371 |
| Weighted average number of common shares outstanding | 453,175,764 | 452,499,514 |
| Potentially dilutive common shares resulting from assumed conversion of: | ||
| Share-based compensation plans | 2,466,088 | 235,906 |
| Weighted average number of common shares outstanding after assumed conversion | 455,641,852 | 452,735,420 |
| Diluted earnings per share (€) | 3.69 | 3.03 |
For the three months ended 31 March 2013, the weighted average number of common shares excludes 2,774,236 (2012: 2,800,486) treasury shares.
50 Consolidated Statements of Changes in Equity
| B 62 | |
|---|---|
| as of 31 March 2013 |
as of 31 December 2012 |
| 40,637 | 40,882 |
| 103,813 | 103,212 |
| 144,450 | 144,094 |
As of 31 March 2013, there were no significant changes in contingent liabilities compared to the consolidated financial statements for the year ended 31 December 2012.
As of 31 March 2013, commitments outstanding to invest in private equity funds and similar financial instruments amounted to €2,978 mn (31 December 2012: €2,507 mn) and commitments outstanding to invest in real estate and infrastructure amounted to €815 mn (31 December 2012: €962 mn). All other commitments showed no significant changes.
In May 2013 Allianz SE has called for redemption a subordinated bond with an outstanding amount of US Dollar 2 bn and a coupon of 8.375% p.a. Repayment will be in June 2013.
Allianz and Yapi Kredi have reached an agreement to enter into a 15-year exclusive distribution agreement and for Allianz to acquire Yapi Kredi Sigorta, the Property-Casualty insurer, including its subsidiary Yapi Kredi Emeklilik, the life and pension business. The transaction is expected to be closed during the second half of 2013 and is subject to regulatory and competition board approvals.
Munich, 14 May 2013
Allianz SE The Board of Management
We have reviewed the condensed consolidated interim financial statements of Allianz SE, Munich – comprising the consolidated balance sheets, consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, condensed consolidated statements of cash flows and selected explanatory notes – together with the interim group management report of Allianz SE, Munich, for the period from 1 January to 31 March 2013 that are part of the quarterly financial report according to §37x Abs.3 WpHG ("Wertpapierhandelsgesetz": "German Securities Trading Act"). The preparation of the condensed consolidated interim financial statements in accordance with those International Financial Reporting Standards (IFRS) applicable to interim financial reporting as adopted by the 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 consolidated interim financial statements and on the interim group management report based on our review.
We performed our review of the condensed consolidated interim financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed consolidated interim financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the E.U., and that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the 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, 14 May 2013
KPMG AG Wirtschaftsprüfungsgesellschaft
Dr. Frank Ellenbürger Dr. Frank Pfaffenzeller Wirtschaftsprüfer Wirtschaftsprüfer (Independent Auditor) (Independent Auditor)
The accounting terms explained here are intended to help the reader understand this Interim Report. Most of these terms concern the balance sheet or the income statement. Terminology relating to particular segments has not been included.
A
The amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition.
The parent company of the Group and all consolidated subsidiaries. Subsidiaries are enterprises where the parent company can exercise a significant influence over their corporate strategy in accordance with the control concept. This is possible, for example, where the parent company holds, directly or indirectly, a majority of the voting rights, has the power to appoint or remove a majority of the members of the Board of Management or equivalent governing body, or where there are contractual rights of control.
Policies in force – especially in life, health, and personal accident insurance – give rise to potential liabilities for which funds have to be set aside. The amount required is calculated actuarially.
The total of all investments, valued at current market value, which the Group has under management with responsibility for maintaining and improving their performance. In addition to the Group's own investments, they include investments held under management for third parties.
All enterprises, other than affiliated enterprises or joint ventures, in which the Group has an interest of between 20% and 50%, regardless of whether a significant influence is actually exercised or not.
Under this accounting principle the difference between the acquisition cost and redemption value (of an investment) is added to or subtracted from the original cost figure over the period from acquisition to maturity and credited or charged to income over the same period.
Available-for-sale investments are securities which are neither held to maturity nor have been acquired for sale in the near term; available-forsale investments are carried at fair value in the balance sheet.
A business combination is a transaction or event in which an acquirer obtains control of one or more businesses. Business combinations are accounted for using the acquisition method.
C
Statement showing movements of cash and cash equivalents during an accounting period, classified by three types of activity, operating activities, investing activities, financing activities.
Certificated liabilities comprise debentures and other liabilities for which transferable certificates have been issued.
A way of packaging credit risk. Several classes of securities (known as tranches) are created from a portfolio of bonds and there are rules for determining how the cost of defaults are allocated to classes.
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
Financial obligations not shown as liabilities on the balance sheet because the probability of a liability actually being incurred is low. Example: guarantee obligations.
With defined benefit plans, differences come about between the actuarial gains and losses which, when the corridor approach is applied, are not immediately recognized as income or expenses as they occur. Only when the cumulative actuarial gains or losses fall outside the corridor is recognition made from the following year onwards. The corridor is 10% of the present value of the pension rights accrued or of the market value of the pension fund assets, if this is higher.
Represents operating expenses divided by operating revenues.
The risk that one party to a contract will fail to discharge its obligations and thereby cause the other party to incur financial loss.
D
Expenses of an insurance company which are incurred in connection with the acquisition of new insurance policies or the renewal of existing policies. They include commissions paid, underwriting expenses and policy issuance costs.
The calculation of deferred tax is based on tax loss carry forwards, tax credit carry forwards and temporary differences between the carrying amounts of assets or liabilities in the published balance sheet and their tax base, and on differences arising from applying uniform valuation policies for consolidation purposes. The tax rates used for the calculation are the local rates applicable in the countries of the enterprises included in the consolidation; changes to tax rates already adopted on the balance sheet date are taken into account.
For defined benefit plans, the participant is granted a defined benefit by the employer or via an external entity. In contrast to defined contribution arrangements, the future cost to the employer of a defined benefit plan is not known with certainty in advance. To determine the expense over the period, accounting regulations require that actuarial calculations are carried out according to a fixed set of rules.
Financial contracts, the values of which move in relationship to the price of an underlying asset. Derivative financial instruments can be classified in relation to their underlying assets (e.g. interest rates, share prices, foreign currency exchange rates or prices of goods). Important examples of derivative financial instruments are options, futures, forwards and swaps.
E
Ratio calculated by dividing the net income for the year attributable to shareholders by the weighted average number of shares outstanding. For calculating diluted earnings per share the number of shares and the net income for the year attributable to shareholders are adjusted by the dilutive effects of any rights to subscribe for shares which have been or can still be exercised. Subscription rights arise in connection with participation certificates and share based compensation plans.
Represents acquisition and administrative expenses (net) divided by premiums earned (net).
F
The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
Options valued at market value.
Financial assets carried at fair value through income include financial assets held for trading and financial assets designated at fair value through income.
income
Financial liabilities carried at fair value through income include financial liabilities held for trading and financial liabilities designated at fair value through income.
Funds held by others are funds to which the reinsurer is entitled but which the ceding insurer retains as collateral for future obligations of the reinsurer. The ceding insurer shows these amounts as "funds held under reinsurance business ceded."
G
Difference between the cost of acquisition and the fair value of the net assets acquired.
In insurance terminology the terms gross and net mean before and after deduction of reinsurance, respectively. In the investment terminology the term "net" is used where the relevant expenses (e.g. depreciations and losses on the disposal of assets) have already been deducted.
H
The use of special financial contracts, especially derivative financial instruments, to reduce losses which may arise as a result of unfavorable movements in rates or prices.
A non-current asset is classified as held for sale if its carrying amount will be recovered principally through sale rather than though continuing use. On the date a non-current asset meets the criteria as held for sale, it is measured at the lower of its carrying amount and fair value less costs to sell.
Held-to-maturity investments comprise debt securities held with the intent and ability that they will be held-to-maturity. They are valued at amortized cost.
I
International Accounting Standards.
International Financial Reporting Standards. Since 2002, the designation IFRS applies to the overall framework of all standards approved by the International Accounting Standards Board. Already approved standards will continue to be cited as International Accounting Standards (IAS).
The framework for International Financial Reporting Standards (IFRS) which sets out the concepts that underlie the preparation and presentation of financial statements for external users.
Income from financial assets and liabilities carried at fair value through income (net) includes all realized and unrealized gains and losses including interest and dividend income from financial assets and financial liabilities carried at fair value through income, the income (net) from financial liabilities for puttable equity instruments and the foreign currency gains and losses (net).
This heading comprises the capital stock, the premium received on the issue of shares, and amounts allocated when option rights are exercised.
An enterprise which is managed jointly by an enterprise in the Group and one or more enterprises not included in the consolidation. The extent of joint management control is more than the significant influence exercised over associated enterprises and less than the control exercised over affiliated enterprises.
J
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
M
The amount obtainable from the sale of an investment in an active market.
N
Those parts of the equity of affiliated enterprises which are not owned by companies in the Group.
That part of net income for the year which is not attributable to the shareholders of the Allianz Group but to other third parties who hold shares in affiliated enterprises.
P
Amount payable on redemption of participating certificates issued. The participating certificates of Allianz SE carry distribution rights based on the dividends paid, and subscription rights when the capital stock is increased; but they carry no voting rights, no rights to participate in any proceeds of liquidation, and no rights to be converted into shares.
Reserves for current and future post-employment benefits formed for the defined benefit plans of active and former employees. These also include reserves for health care benefits and processing payments.
Premiums written represent all premium revenues in the year under review. Premiums earned represent that part of the premiums written used to provide insurance coverage in that year. In the case of life insurance products where the policyholder carries the investment risk (e.g. variable annuities), only that part of the premiums used to cover the risk insured and costs involved is treated as premium income.
R
Where an insurer transfers part of the risk which he has assumed to another insurer.
A repurchase (repo) transaction involves the sale of securities by the Group to a counterparty, subject to the simultaneous agreement to repurchase these securities at a certain later date, at an agreed price. The securities concerned are retained in the Group's balance sheet for the entire lifetime of the transaction, and are valued in accordance with the accounting principles for financial assets carried at fair value through income or investment securities, respectively. The proceeds of the sale are reported in liabilities to banks or to customers, as appropriate. A reverse repo transaction involves the purchase of securities with the simultaneous obligation to sell these securities at a future date, at an agreed price. Such transactions are reported in loans and advances to banks, or loans and advances to customers, respectively. Interest income from reverse repos and interest expenses from repos are accrued evenly over the lifetime of the transactions and reported under interest and similar income or interest expenses.
Reserves for the cost of insurance claims incurred by the end of the year under review but not yet settled.
That part of the operating surplus which will be distributed to policyholders in the future. This refund of premiums is made on the basis of statutory, contractual, or company by-law obligations, or voluntary undertaking.
In addition to the reserve required by law in the financial statements of the Group parent company, this item consists mainly of the undistributed profits of Group enterprises and amounts transferred from consolidated net income.
S
U
Financial information based on the consolidated financial statements, reported by business segments (Property-Casualty, Life/Health, Asset Management and Corporate and Other) as well as by reportable segments.
Liabilities which, in the event of liquidation or bankruptcy, are not settled until after all other liabilities.
Premiums written attributable to income of future years. The amount is calculated separately for each policy and for every day that the premium still has to cover.
Amount of actuarial gains or losses, in connection with defined benefit pension plans, which are not yet recognized as income or expenses (see also "corridor approach").
Generally Accepted Accounting Principles in the United States of America.
V
The benefits payable under this type of life insurance depend primarily on the performance of the investments in a mutual fund. The policyholder shares equally in the profits or losses of the underlying investments.
Interim Report First Quarter of 2013 Allianz Group 103
liabilities carried at fair value through
B42 Income and expenses from fully consolidated private equity investments 81 B43 Claims and insurance benefits incurred
B35 Equity 77
B36 Premiums earned (net) 78
income (net) 79 B39 Realized gains/losses (net) 80 B40 Fee and commission income 81
B41 Other income 81
(net) 82
B37 Interest and similar income 79 B38 Income from financial assets and
Other Information
Important dates for shareholders and analysts1
| ______ Interim Report 2Q |
2 August 2013 |
|---|---|
| ______ Interim Report 3Q |
8 November 2013 |
| __________ Financial Results 2013 |
27 February 2014 |
| _____ Annual Report 2013 |
14 March 2014 |
| _______ Annual General Meeting |
7 May 2014 |
| ______ Interim Report 1Q |
14 May 2014 |
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact, irrespective of the communicated schedules. Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
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