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Allianz Annual Report 2012

Annual Report 2012    Allianz Group Average, high and low allocated internal underwriting risk capital by source of risk (total portfolio before non-controlling interests and after Group diversification)1 C 099 € mn Premium natural catastrophe Premium terror Premium non-catastrophe Reserve Biometric Total Group 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 Quarterly results Average 685 681 106 129 2,315 2,532 3,157 2,920 593 476 6,856 6,738 High 718 714 111 146 2,391 2,633 3,304 3,337 734 606 7,258 7,436 Low 647 641 100 105 2,242 2,417 3,034 2,494 443 374 6,466 6,031 1 2011 figures recalculated based on model updates in 2012. Our Property-Casualty insurance businesses are exposed to premium risk related to the current year’s new and re- newed business as well as reserve risks related to the busi- ness in force. A substantial portion of the ­Property-Casualty segment’spre-diversifiedinternalunderwritingriskcapital arises from our entities operating locally in Germany, Italy, France and the United States (about 41 %) as well as from our global operating entities AGCS, ­Allianz Re and Euler Hermes (about 34 %) as of 31 December 2012. Premium risk As part of our Property-Casualty business operations, we receive premiums from our customers and provide insur- ance protection in return. Changes in profitability over time are measured based on loss ratios and their fluctua- tions.1 We face the risk that underwriting profitability is lower than expected. The volatility of the underwriting profit­ ability measured over one year defines our premium risk. 1 Please refer to the section Property-Casualty insurance operations – Property-Casualty ­operations by business division on page 138 for a regional breakdown of loss ratios over the past three years. Property-casualty loss ratios1 for the past nine years C 100 % 201220112010200920082007200620052004 70 60 50 40 30 20 10 68.369.969.169.568.066.165.067.267.6 1 Represents claims and insurance benefits incurred (net) divided by premiums earned (net). Premium risk is subdivided into natural catastrophe risk (“premium NatCat risk”), terror risk (“premium terror risk”) and non-catastrophe risk (“premium non-cat risk”). We calculate premium risk based on actuarial models that are used to derive loss distributions. 204

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