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Allianz Annual Report 2012

Changes in reserves for loss and LAE during 2012 D 077 Gross reserves as of 31 December 2011 Gross develop­ment related to prior years Net reserves as of 31 December 2011 Net development related to prior years € mn € mn %1 € mn € mn %2 Motor 18,783 (762) (4.1) 17,056 (692) (4.1) General Liability 11,390 86 0.8 9,631 207 2.1 Workers Compensation / Employers Liability 4,559 29 0.6 4,534 71 1.6 Property 4,571 (145) (3.2) 3,238 (253) (7.8) Inwards and Group Internal Reinsurance 2,521 (55) (2.2) 4,722 73 1.5 Personal Accident 1,462 29 2.0 1,155 (46) (4.0) Construction Damage and Liability 2,096 (22) (1.0) 1,959 7 0.4 Credit Insurance 1,406 (271) (19.3) 1,115 (206) (18.5) AGCS 8,307 (458) (5.5) 6,110 (348) (5.7) Other 4,398 298 6.8 3,315 (20) (0.6) ­­Allianz Group 59,493 (1,271) (2.1) 52,835 (1,207) (2.3) 1 In % of gross reserves as of 31 December 2011. 2 In % of net reserves as of 31 December 2011. The major highlights of the reserve developments in 2012 are discussed by line of business below. The discussion is based on net loss and LAE reserves in the local currency of therelevantlocaloperatingentitybeforeconsolidationand converted into Euro for uniform presentation. Only signifi- cant developments for the Allianz Group’s major operating entities are included and therefore the amounts do not fully reconcile to the line of business totals in the above table. Motor For Motor, net loss and LAE reserves developed favorably during 2012 by € 692 mn, or 4.1 % of reserves at 31 December 2011. Favorable development was caused by different ef- fects across several operating entities. The following sub- sidiaries were the largest contributors: € 161 mn at ­Allianz Italy. The reduction was driven by a fur- ther decrease in claims frequency as compared to the ex- pectation, due to the implications of difficult economic climate. This was only offset to a small extent by other fac- tors such as an increase in VAT. € 114 mn at Allianz Australia mainly driven by a favorable incurred cost experience in motor third party liability. € 108 mn at Allianz Spain. The reduction was driven by lower claim frequency and severity. This development is mainly due to the economic environment. Furthermore, Allianz Spain reached more favorable terms through improved price agreements with external suppliers, such as repair shops, lawyers and doctors. In addition, the number of claims managed directly by Allianz Global Assistance in- creased with the benefit of a lower cost to the company. € 70 mn at Allianz United Kingdom with savings mainly aris- ing from more recent accident years; contributing to the savings are reductions in larger claims across the portfolio and favorable development of bodily injury claims. € 59 mn at Allianz France due to a trend of decreasing claims frequency, especially for Motor Own Damage and Motor Third Party Liability property damage losses, as well as fa- vorable development on large bodily injury losses in Motor Third Party Liability. General Liability For General Liability, net loss and LAE reserves developed unfavorably during 2012 by € 207 mn, or 2.1 % of reserves at 31 December 2011. This development was caused by differ- ent effects across several operating entities. The following subsidiaries were the largest contributors: € 209 mn at Fireman’s Fund Insurance Company, was driven mainly by € 124 mn in Professional Liability Lawyers, where results have been affected by an unfavorable economic en- vironment and a change in portfolio mix towards slower emerging losses. Furthermore, an unfavorable run-off of Annual Report 2012    Allianz Group296