Inside Allianz Series #8

Home , Allianz, Axa, Liverpool Victoria

Allianz SE Giulio Terzariol CFO

Allianz UK Jon Dye CEO

Allianz Leben Alf Neumann Member of the Board of Management

Allianz Direct Bart Schlatmann CEO

London, November 26, 2019

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environment

Giulio Terzariol CFO Allianz SE London, November 26, 2019

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Agenda Inside AllianzSeries 5 4 3 2 1

AGCS II Solvency income Net business Life Investments Topics

Portfolio restructuring Portfolio Comfortable Resilient yieldsdespite low growthProfitable Well high balanced with Facts

quality

3) 2) 1) Inside AllianzSeries

1 investments As 3QAs of 2019 Debt5yrinstruments; average Debtinstruments 3.2%

86% Current investment portfolio investment Debt yield EUR 673bn Investments Allianz Group Allianz

Impairments

Investment 5bps (2018) 94% grade 6) 5) 4)

Loan Non EUREURinvestments excl. ratednot~67bn, ~4bn

1 -

traded assets, assets, valuefair traded - to

value ratio value 2

: balanced well with high quality which … which

of of

risk Illiquidity risk credit BBB

Illiquidity premium still attractive, opportunistic expansion opportunistic attractive, still premium Illiquidity risk credit furtheradd to intentionno Well balanced, • • • • • • Alternativedebt net net unrealized gains EUR with PHP 81% held in L/H Vast majority LTV unrealized gains net EUR 3.6bn 3.5% current yield 89% investment grade 15.6bn

(55%)

<60% 3

55%

47% 18%

149bn Alternat assets 135bn EUR

EUR

34% 45%

• • • • • • Alternativeequity BBB BBB BBB+ Low Managed by PIMCO Diversified unrealized gains EUR 15.6bn net 6.5% current yield 69% real estate -

share share in

BBB

(45%) -

Successful management margin Successful (EUR Group Inside AllianzSeries 4) 3) 2) 1)

2 Capital Capital intensity Share of pref. lines VNB NBM RoE OP Statutory New New business In - PVNBP onBased business new6M2019 principalguaranteed; of 67% refers6.6% risk to capitalover in 1% technical interest interest year+ 1% pertechnical participation (set profit annually)

force

Life

premiums

bn 1

business: business: profitable growth despite low yields

10.9

1.2 2015 2015 6.6 2.1 66.9 64 - 3.8 force businessreserves (2018), refers2.7% PV torisk of capital reservesof over PV for ne % bn % % %

11.4 2.1 2.7 3.6 2018 2018 70.4 82 4.2 % bn % %

Successful margin management in yieldin environment negative management margin Successful business): (retail Switzerland Example Principal Principal protection <100% Share in new business “Balance invest” 6M 18 ( 67% - guarantee 4 Ø %

- 67 p vs. PY) 6M 19 2.3 % 53% 2

NBM 3

w business wwrittenin2018

Unit Share in new business Unit - linked 6M 18 + - 9% linked 70.3

growth

business 6M 19 3.7 13% 3

% %

NBM 3

Product innovation Share in new business

3Q 18 “Flex “Flex saving” 0% guarantee and riders Savings

- 1 % 3Q 19 5.8 12%

NBM 3

Impact of 100bps lower of 100bps Impact 0 Inside AllianzSeries 1)

3 Compared to plan announced in 2018in announcedComparedplan to

reinvestment reinvestment Net Net income: resilient Lower - yield P/C 0.1bn

cash matched Largely - 0.0bn L/H

- flow flow

yields

1 lower base base mostly Higher

on 2021 offset offset by + 0.0bn AM returns AuM

shareholders’income net

Corporate Lower costs for for + 0.0bn debt

- 0.0bn 0.0bn vs. plan vs. ∑net 2021 –

- 0.1bn

Lever and approx. impact on net income (EUR) income onnet impact and approx. Lever or … or … or P/C L/H AM

… … + … +1% growth p.a. …

technical technical margin result from loadings and - - 1% 0.5% 1 % p.a. - p p CIR - p p CR

+50mn +0.1bn +0.1bn +0.2bn

Solvency II ratio II Solvency Inside AllianzSeries 3) 2) 1)

4 Growth +1% Growth 1 notch migration Rating +50bps spreads Credit - Interest rates Equities September 30, 2019 Scenarioincludes IR Additional AA AA to (e.g. notch1 50bps

Solvency

down - - 30% p growthp in - p

- 2 50bps, equities50bps,

) downgrade of all fixed income bondsgovernmentfixed allincome ) of including exposures, downgrade

P/C P/C NPE

and 1% and - 190% 30%, credit30%, spreads0 II: - 191% p growth in L/Hin growthp 192%

comfortable

195% Gov

201% PVNBP, growth 1% 3 PVNBP, for 202%

+200bps,realestate

206% Corp

- 5%, 5%, rd

party NatCat AuM

EURcredit plan,migrationaboverating1bn credit(half 2008/09of crisis scenario)capturingall internalmodel OEs AZ and

(4Q 2019) LV= / L&G transactions ( Combined stress (2Q/3Q 2020) SulAmérica (1Q 2020) UFRreduction settlement Santander / Popular post tax / post dividend SII operating earnings Things to keep in mind in keep Things to before before mgt.

(1Q 2020)

actions

- 15bps

)

SII SII ratio SII SII ratio ~ SII ratio SII ratio ~+2% +8 stress stress scenario SII ratio ~140%even in extreme –

+10% ~ ~ - - - 2 2 1 - % p p.a. p.a. p going forward – – - -

p p - -

3 3% 2%

- - p p

Li fe

GPW GPW Inside AllianzSeries 1)

GPW GPW 5 Alternative Risk AlternativeRisk Transfer

10% 3% 2% 15% 8% 14% 10% by by

AGCS 1%

LoB region (2018, 7%

19% 11%

(2018: EUR8.2bn)

3% 1%

11% 19%

: portfolio restructuring 43% 16%

excluding ART

Africa South America Asia Mediterranean London CEE North America Financiallines Marine MidCorp Property Liability ART

1 )

Other Entertainment Energy Aviation Engineering

AGCSoperating profit (EUR 102.9% • • • • Keymessages 3.9% 2015 423 2021 CRexpected to be <100% Portfolio restructuring initiated Reserve strengthening in 4Q 2019 following review 9M 2019 rate increase of 8.7% (renewals and newbusiness)

101.6% 3.4% 2016 376

105.2% 2017 1.4% 156

)

101.5% 2018 2.4%

282

9M2019 101.2% 2.7% 250

CR Contribution to Group OP

Insurance UK

Jon Dye CEO Allianz Insurance UK London, November 26, 2019

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Sources 3) 2) 1) Key data The UK at aglance • • • • Market specifics • • • • • • • Inside AllianzSeries with particular focus around pricingfair Regulatory recent performance market Changes to the Ogden discount rate have distorted Highly Largest European insurance market Country rating(S&P): insuranceP/C penetration Inflation: GDP/capita (GBP): GDP growth: GDP (GBP): Population: Direct Excluding GPW % of as : Global Data, peersData, Global Line competitive competitive P/C in accident & health insurance health & accident Group 2018

GDP environment continues to evolve

’ company

r eports

1 :

, S&P

2,140bn 66.4mn 32,216

2.0% 2.5% 1.4%

quickly Market Market shares and combined P/C market 93.8% Aviva 9.6 2014 38 %

Pro 96.6% 9.2% 2015 4.7% 3.6% 0.9% 38 - forma Allianz Victoria LiverpoolInsuranceGroup General Limited GeneralInsurance & Legal size

CAGR CAGR

2 91.7%

7.3 DLG 2016 and 42 +3.6% %

growth (GPW 98.4% 6.3 AXA 2017

44 %

ratios ratios (2018, 104.0%

5.8 RSA 2018 44 %

Admiral GBP 82.4% 5.2 % GPW, %)

) 96.3% 4.7 2021e

46 %

Zurich 94.9% 4.5 %

108.0% 3.9 AIG %

LV GIG 92.0% 3.6 %

Ageas 96.6% 3.6 %

2) 1) Revenues Allianz Combined ratio (%) Inside AllianzSeries Liverpool Victoria General Insurance Group and L&G Insurance L&G Ltd. Victoria LiverpoolInsuranceandGroup General Pro GPW growthonInternalCAGR based 2016 2016 28.6 67.4 96.1 2.6 - forma data combines ofcombines Allianzplc, 100%forma data Insurance

IG CAGR CAGR +1% +0.2% 100.4 2017 (EUR 2017 28.2 72.2 2.5

4.3%

- Insurance Insurance in the UK

n 1 2018

2018 96.3 30.4 65.9 ) 2.4

Pro Pro 2018 2018 - - 28.7 67.9 96.6 4.7 forma forma

2 2 ratio Claims ratio Expense

4) 3) NPSvs. market Operating profit 21.7 Petplan LGIL = Legal & General Insurance Ltd. Ltd. GeneralInsurance= & LegalLGIL = GIG Victoria LV LiverpoolInsuranceGroup General 2019. 2016 155 13.1

Petplan

CAGR

16.9 Broker Comm. : According to Group NPS program. Source engineering / commercial / commercial NPS Group Sourceto program.engineeringAccording broker: AZ UK : Ogden 2017 72 (1/2)

- - 0.5%

1.9

3 (EUR

Engineering (%

14.0 2018 153 - p)

- mn 2.5

Deals due to complete approval regulatorycomplete subject to to Decemberin Deals 2019 due

) Pro

2018 204 - forma Ø NPS m

arket

2019 2017 2007 1986 1905 Setup • • • • Highlights #1 in engineering with loyalty leader position best Second commercial broker NPS Market from #2 P/C insurer in the UKdue to acquisitions LVof GIG

Acquisition Acquisition LGIL of Announcement of LV GIG Renamed Acquired Establishment

2020 leader leader pet in insurance

onwards by Allianz Group Allianz Insurance of Cornhill of Insurance plc

and and 100% ownership LVof GIG

with loyalty leadership in 2019 joint joint venture plc

& LGIL & 4

2) 1) Allianz 2018 Inside AllianzSeries EUR 1.0bn GPW Retail EUR 1.4bn GPW Commercial Corporate Pro - forma forma

data partnersinclude

combines combines Allianz

Insurance Insurance in the UK Pro Product Both Other circles: 3% affinity deals affinity - forma Insurance plc, 100% of of plc, 100% Insurance mix(GPW)

Liverpool andGroupVictoria General Insurance

Legal Property Mobile Motor Pet Legal Property Mobile Motor Pet Engineering Packages Liability Property Motor Engineering Packages Liability Property Motor

22% 50% 20% 12% 16% 59% 25% 12% 17% 42% 14% 14% 20% 48% 1 4% 4% 7% 4 5% % %

(2/2) Pro Distribution L&G Insurance Ltd. Ltd. InsuranceL&G

- forma 1

mix(GPW)

Brokers Corp. Direct Brokers Corp. Direct Brokers Brokers

partners partners

2 2

100% 100% 28% 11% 61% 21% 55% 24%

(GPW Market DLG Aviva 10% 10%

Pro

)

shares 10% AXA - 9% forma

1 Aviva Zurich

9% 9%

Admiral AIG 7% 8%

Pro

LV GIG - 5% 8% forma

1 Ageas

RSA 5% 7%

1) New New Allianz set Inside AllianzSeries YouGov

Targets centricity Customer Distribution Product Market position

portfolio

- up up in theUK: + 1 1 +> 3 • • • • • • • • • • • 2025 2025 CR <93% 2025 of GBPGPW 5bn Allianz as loyalty leader with LV= “the UK’s most recommended insurer” partnership affinity / business (LGIL) Broker channel (Allianz), direct (LVand GIG) Complementary strengths Commercial and pet insurance (Allianz), retail (LV and LGIL) GIG Complementary strengths Number customers of increases 12mn to from 5mn Premiums double GBPto 4bn leap Quantum in to position market #2 from #6

Petplan

Alf Neumann Member of the Board of Management Allianz Lebensversicherungs-AG London, November 26, 2019

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3) 2) 1) Key data German Life ataglance • • • • Market specifics • • • • • • Inside AllianzSeries Source: GDVSource: GPW as Source: to to Actuarial interest rate (0.9% since Riester (corporate pension, Government subsidized pension savings average ratio at industry491% SII High businesspremium Trend towards Country rating(S&P): Insurance Inflation: GDP/capita (EUR): GDP (EUR): Population: be be lowered buffers Destatis % % of - pension 2018

Statistical GermanStatistical of YearbookInsurance GDP (source:GDV) penetration

, in particular more than EUR

1 capital

)

Ruerup -

2 efficient products and single

- pension 5 3,344bn 2017) 2017) expected

40,339 1.75% and 83mn 6.0% 2019 AAA

products products

65bn 65bn ZZR

5) 4) Source Source

4 ;

: : Assekurata Assekurata Market Market Life market size 24.6% 2015 88 , , 04/2019 , 02/2019;

shares shares (2018, GPW, %) Generali

11.1% ZZR = 2016 CAGR CAGR 87

Zinszusatzreserve

+0.3% 3

6.6% 2017 R+V and growth (GPW in EUR 87

Talanx

4.9% (reserverateenvironment)lowfor interest 2018 89

Debeka

4.1%

ERGO 4.0% 2019e ~97

) Zurich 3.7%

3.5% AXA

3.5% VBK

Leipziger 2.9% Alte

2) 1) Revenues Allianz New business margin (%) Inside AllianzSeries Excl to related acquisition Administration expensesand 2016 3.4% 2016 18.9 . unrealized gains/losses on debt securities securities DAC)shadowdebt(netgains/losses andunrealizedof on.

CAGR+9.2% +0.7% 2017 2017 (EUR 3.8% 21.1

Leben

n 2018 2018 22.5 4.1 )

AuM

Value of new business (EUR Operating profit goodwill 1,260 2016 2016 542

CAGR+18.7% CAGR 1,155 2017 2017 639 - 5.5%

(EUR

1,125 2018 2018 764 mn

)

mn )

2006 2002 1990 1922 Setup • • • • • • Highlights RoE Operating profit best Low EUR e.g., 8.0bn free Outstanding financial strength and high buffers, Comprehensive portfolio capital of Market leader

of of Allianz Lebensversicherungs Foundation Lebensversicherungs Transfer of business as subsidiary Deutsche Lebensversicherungs Takeover of East Foundation of Allianz -

lapse lapse 16.6% in - class productivity (82bps

rate rate (1.4%), 2 , ratio 478% SII

Vereinte of of Allianz Deutschland decline 2016 German German RfB low reduction low reduction in

Lebensversicherungs

- Lebensversicherungs and and EUR 12.5bn ZZR AG

2018 state insurance state authority’s life 1 )

- - efficient and due AG AG as as AG new holding company

yield and to

lower - AG AG into -

AG protection protection products

net

harvesting Allianz - AG

3) 2) 1) Well diversified investment portfolio with attractive yield Inside AllianzSeries Allianz Allianz Zinszusatzreserve investments of valuebook onBased Marketvalue 15% 17%

Leben

non of of which 10% 6% 286

(ZZR): reserveslowfor interest rateenvironment -

fixed income

investment portfolio (EUR, 2Q 2019) 2Q (EUR, portfolio investment 59 bn 9% ( bn local local GAAP)

7% 31%

Mortgages Covered bonds & other securitizeddebt Corporate bonds Government bonds emerging markets Government bonds industrializedmarkets Infrastructure renewables& estate Real Equity

Total GAAP)(local guarantee yield vs. 2015 2.5% 2.9% 4.7%

2016 2.3% 2.8% 4.4%

2017 2.0% 2.7% 4.6%

2018 1.8% 2.5% 4.2%

Ø guarantee w/ ZZR guarantee Ø w/ ZZR guarantee Ø w/o Total yield 2

1) Years Cash Cash flows with with In Inside AllianzSeries Cash flows Cash (2Q flows 2019) Market value as of of Market as value - D Surplus Covered minimum guarantees and expenses Fixed force business: force business: cash flow matched for 30 eficit 1 - income income

30 sufficient buffers beyond

30.06.2019 instruments instruments and

premiums

Year1 Year1 - -

30 60

• • 2Q 2019 Portfolio duration matched Liabilities11.7 Assets 11.7

years

Cumulated

Available as EUR 3bn EUR surplus years Years 1 and policyholders - 60

bonus

1 EUR 59bn EUR - Non

income assets 60 buffer - to to fixed

Simple and modular product portfolio with modern guarantees Inside AllianzSeries Corporate business Riester Basic Basic ( pension Guarantees

pension (state (state subsidized) pension Accumulation

Choice

Ruerup

, state state , subsidized)

Convenience Blueprint Upsidepotential

Long impairment Functional Disability Death Risk Risk coverage - term care term

Lump sum Lump Annuity Payout

Bart Schlatmann CEO Allianz Direct London, November 26, 2019

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Allianz Direct: ourvision Inside AllianzSeries withobsessioncustomer Create theCreate most efficient pan

- European insurerEuropean at its core:

and simpleand Harmonized databy Personalized service Outstanding pricing modular Transparent, proposition Intuitive

one product cross one product and platform one brand, One and services data Innovative digital experience Easy,hassle full transparency with price Attractive negative surprises no coverage, Clear -

free and seamless free - driven products products driven

- border

Customer view Customer Key design Keydesign principles Inside AllianzSeries Delivered Notifiedinadvance Never Personalservice Simple Uniform

ask

authentication

processes

digitally

twice!

ITview

Multilingual Single instance Cloud re Market standard onlyand Best One platform - use of Allianzassets - practice architecture - based

92% harmonized coverage 92%harmonized countries across Inside AllianzSeries services Mobility Add packages MTPL - ons

New price price cover - /purchase

( DE,NL) ES, embedded in Accident No claims No claims discount 3 packages

Free choice Free choice of repair repair shop

Mobility +2 Single packages Security pack

p ackage car

+2 right redress right Protection Protection packages

Mobility Active legal protection Family package package

Personal Personal accident

Ambitious Ambitious timeline 1) Inside AllianzSeries SLA = SLA service agreements level October October 2019 Wave 1 Oct Oct 19 Ready.

Process Process refinement Dec 19 Dec

Feb 20 February2020 Wave 2

Homeowners 1st 1st 2020half Set. Restructuring, decommissioning,

September September 2020 Sep 20

SLA 1

adjustments Home, (Introduction

Dec 20 Dec travel

Target structure, scaling depending on , personal liabilities Go.

market)

KPIs Outlook 1) Inside AllianzSeries Direct P/C operations in Germany, The Netherlands, Spain and Italy andonlyDirect SpainTheGermany,P/C Netherlands, in operations processing Straight expense Market 24h in paid Claims

leading - through ratio

~12% 95% 90%

during Handovers rejected Claims Exclusions

process

<1% ≤5 0

GPW in EUR in GPW 1.1bn 2018 1

Mid 3 - 5bn - term

Disclaimer Disclaimer banking and natural frequency markets Group's the Deviations those Actual assumptions expectations, This

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