Allianz Benelux Solvency II SFCR Solvency II Solvency and Financial Condition Report 2020 Allianz Benelux Page 1 of 131 Allianz Benelux S.A. SFCR Solvency II Allianz Benelux SA Boulevard du Roi Albert II 32 1000 Brussels VAT: BE 0403258197 Auditor PwC Reviseurs d’Entreprises sccrl, M. Tom Meuleman as permanent representative, Woluwedal 18 – 1932 Zaventem 2 Allianz Benelux S.A. SFCR Solvency II Table of Content A BUSINESS AND PERFORMANCE ................................................... 8 Business and Performance ..................................................................................... 8 Business.............................................................................................................. 8 Group Structure ................................................................................................... 9 Highlights of the 2020 financial year .......................................................................10 General economic context ..................................................................................10 Legislative changes in Non-Life insurance ..........................................................11 Legislative changes in Life insurance .................................................................11 Financial markets ...............................................................................................12 The Allianz Benelux sales policy ............................................................................14 In Belgium ..........................................................................................................14 In the Netherlands ..............................................................................................16 Activities and outlook ..............................................................................................18 Individual insurance ............................................................................................19 Individual P&C Business ....................................................................................21 Life & Health Operations ....................................................................................21 P&C Operations .................................................................................................25 Corporate insurance ...........................................................................................27 Ceded reinsurance .............................................................................................30 Reinsurance accepted ........................................................................................31 Investment policy ...................................................................................................31 General Life & Health portfolio ............................................................................32 P&C excluding Occupational Accidents ..............................................................33 Ring-fenced funds ..............................................................................................33 Mortgage loans ......................................................................................................33 Activity ................................................................................................................33 Structure, organisation and IT ............................................................................34 Real estate .............................................................................................................34 B GOVERNANCE MEMORANDUM ................................................... 36 INTRODUCTION ....................................................................................................36 MANAGEMENT STRUCTURE, REMUNERATION & SHAREHOLDERS ...............37 Company’s bodies ..............................................................................................37 Remuneration .....................................................................................................47 Shareholders ......................................................................................................51 3 Allianz Benelux S.A. SFCR Solvency II FITNESS and PROPRIETY, EXTERNAL MANDATES and TRANSACTIONS with TOP MANAGERS ...............................................................................................55 “Fit & proper” ......................................................................................................55 External Functions and Incompatibilities .......................................................56 Loans, Credit & Guarantees & Insurance Contracts granted to Directors & Officers ..............................................................................................................58 RISK MANAGEMENT SYSTEM, ORSA PROCESS and RM FUNCTION .............59 Risk Management System ...............................................................................59 Own Risk & Solvability Assessment (ORSA) .................................................70 Risk Management function ..............................................................................71 Contingency plans ...........................................................................................71 Internal Control System ..........................................................................................78 Relationship between the three lines of defence.................................................78 Role of the second line departments ..................................................................78 INTERNAL AUDIT FUNCTION ..............................................................................78 Fundamental Principles ...................................................................................78 Objectives .........................................................................................................79 Tasks 80 Structure ...........................................................................................................80 Reporting line and Organizational independence ..........................................80 Individual independence and objectivity ........................................................81 Unrestricted information access - Confidentiality .........................................81 Right of direction ..............................................................................................82 Fitness and propriety .......................................................................................82 Audit related principles and procedures ........................................................83 Outsourcing or delegation of Internal Audit tasks .........................................83 ACTUARIAL FUNCTION .......................................................................................84 General regulation of the function ..................................................................84 Core tasks .........................................................................................................84 Independence ...................................................................................................84 OUTSOURCING ....................................................................................................85 Materiality .........................................................................................................85 Definitions .........................................................................................................86 General outsourcing principles .......................................................................86 Governance principles .....................................................................................87 Outsourcing processes ...................................................................................88 4 Allianz Benelux S.A. SFCR Solvency II Local Outsourcing Function ...........................................................................88 .OTHER INFORMATION ........................................................................................88 C RISK PROFILE ............................................................................... 89 Underwriting Risk ...................................................................................................90 Underwriting risk Non-life ...................................................................................90 Underwriting risk Life/Health ...............................................................................90 Reinsurance .......................................................................................................91 Market risk .............................................................................................................92 Equity risk ...........................................................................................................92 Interest rate risk ..................................................................................................92 Spread risk .........................................................................................................93 Currency risk ......................................................................................................93 Real estate risk...................................................................................................93 Credit risk ...............................................................................................................94 Liquidity risk ...........................................................................................................94