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Allianz Annual Report 2012

change in reserves for loss and loss adjust- ment expenses The following table reconciles the beginning and ending reserves of the ­Allianz Group, including the effect of reinsur- ance ceded, for the Property-Casualty segment for each year in the three-year period ended 31 December 2012. change in reserves for loss and loss adjustment expenses D 070 € mn 2012 2011 2010 Gross Ceded Net Gross Ceded Net Gross Ceded Net As of 1 January 59,493 (6,658) 52,835 57,509 (6,659) 50,850 55,715 (7,175) 48,540 Loss and loss adjustment expenses incurred Current year 32,109 (2,410) 29,699 32,024 (2,444) 29,580 31,158 (2,473) 28,685 Prior years (1,271) 64 (1,207) (2,080) 420 (1,660) (2,551) 1,007 (1,544) Subtotal 30,838 (2,346) 28,492 29,944 (2,024) 27,920 28,607 (1,466) 27,141 Loss and loss adjustment expenses paid Current year (15,017) 574 (14,443) (15,011) 695 (14,316) (14,899) 805 (14,094) Prior years (15,132) 1,747 (13,385) (13,646) 1,417 (12,229) (13,860) 1,495 (12,365) Subtotal (30,149) 2,321 (27,828) (28,657) 2,112 (26,545) (28,759) 2,300 (26,459) Foreign currency trans­lation adjustments and other changes 1 (96) (2) (98) 684 (84) 600 2,188 (344) 1,844 Changes in the consolidated subsidiaries of the ­Allianz Group 2,625 (220) 2,405 13 (3) 10 (242) 26 (216) As of 31 December 62,711 (6,905) 55,806 59,493 (6,658) 52,835 57,509 (6,659) 50,850 1 Includes effects of foreign currency translation adjustments for prior years claims of gross € 47 mn (2011: € 295 mn; 2010: € 1,999 mn) and of net € 70 mn (2011: € 247 mn; 2010: € 1,707 mn) and for current year claims of gross € (156) mn (2011: € 444 mn; 2010: € 101 mn) and of net € (127) mn (2011: € 345 mn; 2010: € 63 mn). Prior years’ net loss and loss adjustment expenses incurred reflect the changes in estimation charged or credited to the consolidated income statement in each year with respect to the reserves for loss and loss adjustment expenses estab- lished as of the beginning of that year. During the year ended 31 December 2012, the ­Allianz Group recorded ad- ditional income of € 1,207  mn (2011: € 1,660  mn; 2010: € 1,544 mn) net in respect of losses occurring in prior years. During the year ended 31 December 2012, this amount as a percentage of the net balance of the beginning of the year was 2.3 % (2011: 3.3 %; 2010: 3.2 %). Changes in historical reserves for loss and loss adjustment expenses (LAE) The analysis of loss and LAE reserves by actuaries and man- agementisconductedbylineofbusinessandseparatelyfor specific claim types such as asbestos and environmental claims. The origin year of losses is taken into consideration by analyzing each line of business by accident year. While this determines the estimates of reserves for loss and LAE by accident year, the effect in the consolidated income statement in the respective calendar year combines the ac- cident year loss ratio for the current year with the favorable or adverse development from prior years (run-off). The tables below first show the loss development by accident year followed by the resulting change for the most recent calendar years. The run-off triangle, also known as the “loss triangle” is a tabular representation of loss-related data (such as pay- ments, loss reserves, ultimate losses) in two, time-related dimensions. One of these is the calendar year, while the other is the accident year (year of loss occurrence). Run-off triangles – as the basis for measuring loss reserves – dem- onstrate how the loss reserves change over the course of time due to payments made and new estimates of the ex- pected ultimate loss at the respective balance sheet date. Annual Report 2012    Allianz Group290

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