Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Allianz Annual Report 2012

Annual Report 2012    Allianz Group Biometric risk Biometric risks associated with life and health insurance include mortality, disability, morbidity, and longevity risks. −− Mortality, disability, and morbidity risks are risks associ- ated with the death or disability of policyholders’ or when medical claims are higher than expected. −− Longevity risk is the risk that policyholders live longer than expected. For modeling these risks within our inter- nal risk capital model, we distinguish level, trend volatil- ity, and calamity risks. Biometric assumptions, such as life expectancy, play a significant role. Due to product design, the offsetting effects of mortality risk, morbidity risk and longevity risk inherent in the com- bined portfolios of life insurance and annuity products, as well as because of our geographically diverse portfolio, our Life/Health segment did not have significant concentra- tions of biometric risk as of 31 December 2012.1 Business risk Businessrisksconsistofcostrisksandpolicyholderbehavior risks. Cost risks consist of unexpected changes in business assumptions and unanticipated fluctuations in earnings arising from a decline in income without a corresponding decrease in expenses. They include the risk that expenses incurred in acquiring and administering policies are higher than expected as a result of inflation, lower revenues or higher costs than budgeted. Policyholder behavior risks are risks related to the early ter- mination of contracts as well as risks that policyholders’ actions – such as withdrawals, renewals and annuitization – are more adverse than assumed. 1 For further information about insurance risk in the Life/Health segment, please refer to note 20 to the consolidated financial statements. Allocated internal business risk capital by business segment (total portfolio before tax and non-controlling interests) as of 31 December 2012 [31 December 20111] C 102 Pre-diversified Group-diversified Total Group internal business risk capital: 4,444 [4,076] Share of total Group internal risk capital: 9.9 % [9.8 %] € mn € mn 12/31/2011 12/31/2012 1,500 1,200 900 600 300 Life/Health 3,424 [3,173] Property-Casualty 1,020 [903] 177 973 218 1,018 +7.5 % 1,150 1,236  Property-Casualty   Life/Health  1 Recalculated based on model updates in 2012. 206