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Allianz Annual Report 2012

Annual Report 2012    Allianz Group The conglomerate solvency ratio decreased by approxi- mately 17 percentage points as of 1 January 2013 due to amendments to IAS 19.1 Total assets and total liabilities In the following sections, we show the asset allocation for our insurance portfolio and analyze important develop- ments in the balance sheets of our segments. As of 31 December 2012, total assets amounted to € 694.6  bn and total liabilities were € 638.4  bn. Compared to year-end 2011, total assets and total liabilities increased by € 53.1  bn and € 44.2  bn, respectively. This section mainly focuses on our financial investments in equities, debt instruments, real estate and cash and other as well as on our insurance reserves and external finan­cing, since these account for the major developments in our balance sheet. 1 For further details on the amendments to IAS 19, please refer to note 4 to the consolidated financial statements. Market environment of different asset classes Although financial markets remained volatile in 2012, mar- ket sentiment improved over the course of the second half of the year. As highlighted in the Business Environment starting on page 122, stock market indices in Europe and the United States experienced a positive development in the second half of the year, overcoming the second quarter downturn. After the decline in German and U.S. government bond yields in the second quarter driven by the “flight to quality”, yields on U.S. government bonds went up towards the end of the year. However, yields on German government bonds decreased further. Italian government bond yields finished the year lower than year-end 2011. Overall, U.S. and European corporate credit spreads for ­A-rated debtors narrowed during 2012.   122  Business Environment Interest rates development in 2012 C 059 10-year German government bond % 10-year U.S. government bond % 3.0 2.5 2.0 1.5 1.0 0.5 0 1Q 2Q 3Q 4Q 3.0 2.5 2.0 1.5 1.0 0.5 0 1Q 2Q 3Q 4Q 2.0 1.8 1.8 1.1 1.2 1.7 1.3 1.6 2.4 1.8 2.3 1.5 1.4 1.9 1.6 1.8  High/low    Yield at end of period  C Group Management Report Management Discussion and Analysis 122 Business Environment 124 Executive Summary of 2012 Results 132 Property-Casualty Insurance Operations 140 Life/Health Insurance Operations 148 Asset Management 152 Corporate and Other 154 Outlook 2013 and 2014 166 Balance Sheet Review 175 Liquidity and Funding Resources 182 Reconciliations 167