Protecting the Future Allianz Group Annual Report 2014 Content A To Our Investors 7 Letter to the Investors 16 Supervisory Board Report 23 Supervisory Board 24 Board of Management 27 International Executive Committee 28 Allianz Share B Corporate Governance 35 Corporate Governance Report 40 Statement on Corporate Management pursuant to § 289a of the HGB 42 Takeover-related Statements and Explanations 45 Remuneration Report C Group Management Report 62 Content Your Alli Anz 63 Business Operations and Markets 70 Strategy and Steering 73 Progress in Sustainable Development MAnAGeMent Discussion AnD AnAlYsis 79 Business Environment 81 Executive Summary of 2014 Results 86 Property-Casualty Insurance Operations 92 Life/Health Insurance Operations 99 Asset Management 102 Corporate and Other 104 Outlook 2015 109 Balance Sheet Review 116 Liquidity and Funding Resources 121 Reconciliations risk AnD opportunitY report AnD FinAnciAl control 123 Risk and Opportunity Report 144 Controls over Financial Reporting and Risk Capital D Consolidated Financial Statements 150 Content 151 Consolidated Balance Sheets 152 Consolidated Income Statements 153 Consolidated Statements of Comprehensive Income 154 Consolidated Statements of Changes in Equity 155 Consolidated Statements of Cash Flows 157 Notes to the Consolidated Financial Statements E Further Information 269 Joint Advisory Council of the Allianz Companies 270 International Advisory Board 271 Mandates of the Members of the Supervisory Board To go directly to any chapter, 272 Mandates of the Members of the Board of Management 273 Glossary simply click on the headline or 277 Index the page number. Allianz at a glance AnnuAl results Change from More previous details on 2014 year 2013 2012 2011 2010 2009 2008 page Income statement Total revenues1 € Mn 122,253 10.4 % 110,773 106,383 103,560 106,451 97,385 92,568 82 Operating profit2 € Mn 10,402 3.3 % 10,066 9,337 7,764 8,243 7,044 7,455 82 Net income from continuing operations3 € Mn 6,603 4.1 % 6,343 5,558 2,853 5,209 4,650 4,268 – Net income (loss) from discontinued operations, net of income taxes3 € Mn – – – – – – (395) (6,373) – Net income (loss) € Mn 6,603 4.1 % 6,343 5,558 2,853 5,209 4,255 (2,105) 84 thereof: Attributable to shareholders € Mn 6,221 3.8 % 5,996 5,231 2,591 5,053 4,207 (2,363) 84 Balance sheet as of 31 December Total assets4 € Mn 805,787 13.3 % 711,079 694,411 641,322 624,945 583,717 954,999 110 Investments4 € Mn 486,445 18.3 % 411,148 401,711 350,645 334,618 294,252 258,812 190 Total liabilities4 € Mn 742,085 12.7 % 658,230 641,448 595,575 578,383 541,488 917,715 110 thereof: Reserves for insurance and investment contracts € Mn 463,334 14.7 % 404,072 390,984 361,956 349,793 323,801 298,057 209 thereof: Reserves for loss and loss adjustment expenses € Mn 68,989 3.6 % 66,566 72,540 68,832 66,474 64,441 63,924 204 Shareholders’ equity € Mn 60,747 21.3 % 50,083 50,388 43,457 44,491 40,108 33,720 109 Non-controlling interests € Mn 2,955 6.9 % 2,765 2,576 2,290 2,071 2,121 3,564 217 Share information Basic earnings per share € 13.71 3.6 % 13.23 11.56 5.74 11.20 9.33 (5.25) 253 Diluted earnings per share € 13.64 4.5 % 13.05 11.48 5.58 11.12 9.30 (5.29) 253 Dividend per share € 6.855 29.2 % 5.30 4.50 4.50 4.50 4.10 3.50 29 Total dividend € Mn 3,1305,6 30.2 % 2,405 2,039 2,037 2,032 1,850 1,580 83 Share price as of 31 December € 137.35 5.4 % 130.35 104.80 73.91 88.93 87.15 75.00 29 Market capitalization as of 31 December € Mn 62,769 5.5 % 59,505 47,784 33,651 40,419 39,557 33,979 29 Other data Return on equity after income tax7,8 % 11.2 (0.7) %-p 11.9 11.1 5.9 11.9 12.5 9.9 – Conglomerate solvency9 % 18110 (1) %-p 182 197 179 173 164 15711 109 Standard & Poor’s rating12 AA – AA AA AA AA AA AA 125 Total assets under management as of 31 December13 € Mn 1,801,178 1.8 % 1,769,551 1,852,332 1,656,993 1,517,538 1,202,122 950,548 99 thereof: Third-party assets under management as of 31 December13 € Mn 1,312,910 (3.5) % 1,360,759 1,438,425 1,281,256 1,163,982 925,699 703,478 100 Employees 147,425 (0.1) % 147,627 144,094 141,938 151,338 153,203 182,865 76 1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating 7 Based on average shareholders’ equity. Average shareholders’ equity has been calculated based upon revenues in Asset Management and total revenues in Corporate and Other (Banking). the average of the current and the preceding year’s shareholders’ equity as of 31 December. 2 The Allianz Group uses operating profit as a key financial indicator to assess the performance of its business 8 Based on net income from continuing operations after non-controlling interests. segments and the Group as a whole. 9 Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted 3 Following the announcement of the sale on 31 August 2008, Dresdner Bank was classified as held for sale by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. and discontinued operations. Therefore, all revenue and profit figures presented for our continuing busi- Excluding off-balance sheet reserves, the solvency ratio as of 31 December 2014 and 2013 would be 172 % ness do not include the parts of Dresdner Bank that we sold to Commerzbank on 12 January 2009. The and 173 %, respectively. results from these operations are presented in a separate net income line “Net income (loss) from dis- 10 Conglomerate solvency ratio as of 31 December 2014 was adjusted for the potential calls of hybrid capi- continued operations, net of income taxes”. tal (subordinated bonds) of € 0.4 BN in 2015. Excluding this adjustment, the solvency ratio would be 182 % 4 As of 1 January 2013, figures have been restated to reflect the implementation of IFRS 10. Figures prior to (including off-balance sheet reserves) as of 31 December 2014. 2012 have not been adjusted retrospectively. For further information, please refer to note 4 to the con- 11 Pro-forma after sale of Dresdner Bank completed. solidated financial statements. 12 For further information about insurer financial strength ratings of Allianz SE, please refer to page 125. 5 Proposal. 13 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset 6 Total dividend based on total amount of shares. Actual dividend payment will be reduced by the dividend Management to the reportable segments German Speaking Countries, Western & Southern Europe and amount attributable to treasury shares. Growth Markets within the business segment Life/Health and to the reportable segment Banking. Disclaimer regarding roundings The consolidated financial statements are presented in millions of Euros (€ MN), unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Figures prior to 2013 have not been adjusted accordingly. Allianz Group Annual Report 2014 Multichannel reporting Print Download Allianz Investor als PDF Relations App www.allianz.com/ Apple App Store and annualreport Google Play Store Orientation guide This sign indicates where additional information in this Annual Report or on the internet can be found. On pages 273 to 276, you will find a glossary of selected accounting, insurance and financial market terms used in this report. Allianz Human Resources Fact Book HR Fact Book 2014 HR Fact Book is the official and most comprehensive report on key human resources facts and figures, highlighting major HR achievements over the past year and revealing the outlook for 2015. www.allianz.com/hrfactbook Allianz Sustainability Report 2014 Our sustainability journey Allianz Group Sustainability Report 2014 The Allianz Group Sustainability Report covers our contribution to the environment, society and economy. It provides full details of our sustainability strategy, approach and progress as well as an outlook for 2015. www.allianz.com/sustainability Group profile Whatever tricks nature plays, whichever trends the financial markets follow, whenever risks turn into an emergency or a loss, Allianz stands by its clients, protecting them and helping them to realize their goals in life – as it has done since its founding 125 YEARS AGO. Its CAPITAL STRENGTH and INNOVATIVE POWER as well as the DEDICATION of its 147,425 employees vouch for this. € bn 60.7 € 6.85 Shareholders’ equity page 109 Dividend per share (proposal) page 29 AA Standard & Poor's rating since 2007 € bn122.3 € Mn10,402 Total revenues page 82 Operating profit page 82 € Mn 6,221 181 % Net income attributable to shareholders page 84 Conglomerate solvency page 109 Another of Allianz’s strengths is its fiveGLOBAL INSURANCE LINES. Not everyone is familiar with the highly specialized products and services of these units. But they have far-reaching implications for prosperous societies and thus for everyone. In this report, we present these business lines. With their profile. And their histories. They include our international industrial insurance providers ALLIANZ GLOBAL CORPORATE & SPECIALTY and EULER HERMES GROUP, the world’s leading credit insurer.