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Allianz Annual Report 2012

Deferred acquisition costs Changes in Deferred acquisition costs D 050 € mn 2012 2011 2010 Property-Casualty Carrying amount as of 1 January 4,197 4,121 3,789 Additions 5,359 4,939 4,798 Changes in the consolidated subsidiaries of the ­­­Allianz Group 2 1 (4) Foreign currency translation adjustments 3 (5) 151 Amortization (5,238) (4,859) (4,613) Carrying amount as of 31 December 4,323 4,197 4,121 Life/Health Carrying amount as of 1 January 14,579 14,459 14,452 Additions 2,621 2,867 2,719 Changes in the consolidated subsidiaries of the ­­­Allianz Group – – (10) Foreign currency translation adjustments (27) 195 492 Shadow accounting (1,668) (874) (977) Amortization (1,984) (2,068) (2,217) Carrying amount as of 31 December 13,521 14,579 14,459 Asset management 139 146 152 Total 17,983 18,922 18,732 Present value of future profits Present value of future profits D 051 € mn 2012 2011 2010 Cost as of 1 January 2,778 2,782 2,694 Accumulated amortization as of 1 January (1,725) (1,602) (1,482) Carrying amount as of 1 January 1,053 1,180 1,212 Foreign currency translation adjustments 5 (10) 48 Shadow accounting (24) 11 (1) Amortization 1 (89) (128) (79) Carrying amount as of 31 December 945 1,053 1,180 Accumulated amortization as of 31 December 1,838 1,725 1,602 Cost as of 31 December 2,783 2,778 2,782 1 During the year ended 31 December 2012, includes interest accrued on unamortized PVFP of € 59 mn (2011: € 63 mnn; 2010: € 65 mn). Reinsurance involves credit risk and is subject to aggregate loss limits. Reinsurance does not legally discharge the re- spective ­­Allianz company from primary liability under the reinsured policies. Although the reinsurer is liable to this company to the extent of the business ceded, the ­Allianz company remains primarily liable as the direct insurer on all the risks it underwrites, including the share that is rein- sured. The ­­Allianz Group monitors the financial condition of its reinsurers on a regular basis and reviews its reinsur- ance arrangements periodically in order to evaluate the reinsurer’s ability to fulfill its obligations to the ­­Allianz Group companies under existing and planned reinsurance contracts. The ­­Allianz Group’s evaluation criteria, which include the degree of creditworthiness, capital and surplus levels, and marketplace reputation of its reinsurers, are such that the ­­Allianz Group believes that its reinsurance credit risk is not significant, and historically has not expe- rienced noteworthy difficulty in collecting claims from its reinsurers. Additionally, and as appropriate, the ­­Allianz Group may also require letters of credit, deposits, or other financial guarantees to further minimize its exposure to credit risk. In certain cases, however, the ­­Allianz Group does establish an allowance for doubtful amounts related to reinsurance as appropriate, although this amount was not significant as of 31 December 2012 and 2011. The­­Allianz Group primarily maintains business relations with highly rated reinsurers. 12 – Deferred acquisition costs Deferred acquisition costs D 049 € mn as of 31 December 2012 2011 Deferred acquisition costs Property-Casualty 4,323 4,197 Life/Health 13,521 14,579 Asset Management 139 146 Subtotal 17,983 18,922 Present value of future profits 945 1,053 Deferred sales inducements 524 797 Total 19,452 20,772 Annual Report 2012    Allianz Group D Consolidated Financial Statements 219 Consolidated Balance Sheets 220 Consolidated Income Statements 221 Consolidated Statements of Comprehensive Income 222 Consolidated Statements of Changes in Equity 223 Consolidated Statements of Cash Flows 226 Notes to the Consolidated Financial Statements 279

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