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Allianz Annual Report 2012

Annual Report 2012    Allianz Group Conglomerate solvency 1 C 082 � bn 12/31/2011 12/31/2012 50 40 30 20 10 42.6 23.8 48.4 24.6 179 % 197 % Solvency ratio    Eligible capital   Requirement  1 Off-balance sheet reserves are included in the calculation but accepted by the authorities as eligible capital only upon request. ­Allianz SE has not submitted an application so far. Exclud- ing off-balance sheet reserves, the solvency ratio would be 188 % (2011: 170 %; 2010: 164 %). The conglomerate solvency ratio has increased by 18  per­ centage points. This was caused by an increase in eligible capital mainly due to net income (net of proposed divi­ dends) and the placement of subordinated bonds. To a smaller extent our solvency requirement is higher as well caused by higher aggregate policy reserves in the Life/ Health segment.1 The conglomerate solvency ratio decreased by approxi­ mately 17  percentage points as of 1 January 2013 due to amended IAS 19.2 External Rating agency capital adequacy Rating agencies apply their own models to evaluate the re­ lationship between the required risk capital of a company and its available capital resources. An assessment of capital adequacy is usually an integral part of the rating process. Meeting rating agencies’ capital requirements and main­ taining strong credit ratings are strategic business objec­ tives of the ­Allianz Group. 1 For further details on changes in eligible capital and solvency requirement, please refer to the chapter Balance Sheet Review from page 166 onwards. 2 For further details on amended IAS 19, please refer to note 4 to the consolidated financial statements. Following a review in January 2012, the ­Allianz Group’s AA rating was affirmed by Standard & Poor’s. However, as a result of the rating actions against numerous Eurozone governments in December 2011, Standard & Poor’s placed the ratings of various European insurers, among them ­Allianz Group, under credit watch with negative implica­ tions. In June 2012, A.M. Best affirmed its A+ Financial Strength Rating and withdrew its review with negative impli­ cations. ­Allianz Group still has one of the highest ratings amongst its peers. The following table provides evidence of the sustainable financial strength of ­Allianz SE and our ability to meet ongoing obligations. Insurer financial strength ratings of ­­Allianz SE C 083 Standard  & Poor’s Moody’s A.M. Best 2012 AA Negative outlook Aa3 Negative outlook A+ 2011 AA Credit watch negative Aa3 Stable outlook A+ Under review with negative implications 2010 back to 2007 AA Stable outlook Aa3 Stable outlook A+ Stable outlook 2006 AA– Positive outlook Aa3 Stable outlook A+ Stable outlook In addition to its long-term financial strength rating, ­Standard & Poor’s has a separate rating for “Enterprise Risk Manage­ment” (ERM). In September 2011, Standard & Poor’s assigned ­Allianz a “strong” rating for the ERM capabilities of our insurance operations. This rating indicates that Standard & Poor’s regards it as “unlikely that ­Allianz Group will experience major losses outside its risk tolerance”. Standard & Poor’s stated that the assessment is based on the ­Allianz Group’s strong risk management culture, strong controls for the majority of key risks and strong stra­ tegic risk management. In addition, for the ERM score, Stan­ dard & Poor’s reviewed ­Allianz’s internal economic capital model (ECM) in 2012 and is giving further credit to the capi­ tal position of the ­Allianz Group from 4Q 2012 onwards. 186