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Allianz Annual Report 2012

Annual Report 2012    Allianz Group Property-Casualty liabilities Development of reserves for loss and loss adjustment expenses1 C 066 € BN 150500 100 52.8 6.7 (13.4) 59.5 b a c d 12/31/2012 12/31/2011 55.8 6.9 (1.2) +15.3 62.7 +2.3 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 19 to the consolidated financial statements. Compared to year-end 2011, the gross reserves for loss and loss adjustment expenses for our Property-Casualty busi- ness increased by € 3.2  bn to € 62.7  bn. On a net basis, our reserves grew by € 3.0  bn to € 55.8  bn. Foreign currency trans- lation effects and other changes accounted for € 2.3  bn of the increase. This includes the activities acquired from Mensura and Gan Eurocourtage.1 1 For further details, please refer to note 5 to the consolidated financial statements. Assets and liabilities of the Life/Health segment Life/Health assets Our Life/Health asset base rose by € 44.8  bn, or 10.5 % to € 472.3  bnbyyear-end2012.Thegrowthofthesegment’sasset base was almost completely attributable to an increase in our debt investments (up by € 36.8  bn) due to market effects and reinvested interest inflows. Composition of asset base – fair values C 067 € bn as of 31 December 2012 2011 Financial assets and liabilities carried at fair value through income Equities 2.1 2.1 Debt securities 2.3 2.5 Other 1 (3.5) (4.4) Subtotal 0.9 0.2 Investments 2 Equities 24.1 22.1 Debt securities 266.4 229.6 Cash and cash pool assets 3 5.7 5.1 Other 9.9 9.0 Subtotal 306.1 265.8 Loans and advances to banks and customers 94.1 98.0 Financial assets for unit-linked contracts 4 71.2 63.5 Life/Health asset base 472.3 427.5 1 This comprises assets of € 1.7  bn and € 1.9  bn and liabilities (including the market value lia­ bility option) of € (5.2)  bn and € (6.3)  bn as of 31 December 2012 and 31 December 2011, respectively. 2 These do not include affiliates of € 0.7  bn and € 1.4  bn as of 31 December 2012 and 31 Decem- ber 2011, respectively. 3 Including cash and cash equivalents, as stated in our segment balance sheet, of € 5.6  bn and € 5.3  bn and receivables from cash pooling amounting to € 2.6  bn and € 2.5  bn, net of liabilities from ­securities lending and derivatives of € (1.5)  bn and € (1.8)  bn, as well as liabili- ties from cash pooling of € (1.0)  bn and € (0.9)  bn as of 31 December 2012 and 31 December 2011, respectively. 4 Financial assets for unit-linked contracts represent assets owned by, and managed on be- half of, policyholders of the ­­­­­Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Reporting Standards (IFRS) require the classification of any contract written by an insurance company either as an insurance contract or as an investment contract, depending on whether an insurance component is included. This requirement also applies to unit-linked products. In contrast to unit-linked investment contracts, unit-linked insurance contracts include coverage for significant mor- tality or morbidity risk. As of 31 December 2012, ABS amounted to € 15.3  bn and ­accounted for 3.2 % of our Life/Health asset base. Financial assets for unit-linked contracts amounted to € 71.2 bn. 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 171