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Allianz Annual Report 2012

guarantees D 128 € mn Letters of credit and other financial guarantees Market value guarantees Indemnification contracts Performance guarantees 2012 Up to 1 year 387 271 1 24 1 - 3 years 16 614 – 19 3 - 5 years 14 60 1 2 Over 5 years 164 652 107 173 Total 581 1,597 109 218 Collateral 130 – – 36 2011 Up to 1 year 424 90 – 26 1 - 3 years 40 415 – 11 3 - 5 years 23 478 – 1 Over 5 years 123 714 108 119 Total 610 1,697 108 157 Collateral 112 – – 29 Guarantees A summary of guarantees issued by the ­­­­Allianz Group by maturity and related collateral-held is as follows: Nearly all customers of the letters of credit and of the in- demnification contracts have no external credit ranking. Letters of credit and other financial guarantees The majority of the ­­­­Allianz Group’s letters of credit and otherfinancialguaranteesareissuedtocustomersthrough the normal course of banking business in return for fee and commission income, which is generally determined based on rates subject to the nominal amount of the guarantees andinherentcreditrisks.Onceaguaranteehasbeendrawn upon, any amount paid by the ­­­­Allianz Group to third par- ties is treated as a loan to the customer, and is, therefore, principally subject to collateral pledged by the customer as specified in the agreement. Market value guarantees Market value guarantees represent assurances given to customers of certain mutual funds and fund management agreements, under which initial investment values and/or minimum market performance of such investments are guaranteed at levels as defined under the relevant agree- ments. The obligation to perform under a market value guarantee is triggered when the market value of such in- vestments does not meet the guaranteed targets at pre- defined dates. The ­­­­Allianz Group’s Asset Management segment, in the or- dinary course of business, issues market value guarantees in connection with investment trust accounts and mutual funds it manages. The levels of market value guarantees and maturity dates differ based on the separate governing agreements of the respective investment trust accounts and mutual funds. As of 31 December 2012, the maximum potential amount of future payments of the market value guarantees was € 652 mn (2011: € 714 mn), which represents the total value guaranteed under the respective agree- ments including the obligation that would have been due had the investments matured on that date. The fair value of the investment trust accounts and mutual funds related to these guarantees as of 31 December 2012, was € 734 mn (2011: € 761 mn). The ­­­­Allianz Group’s Banking operations in France, in the ordinary course of business, issue market value and perfor- mance-at-maturity guarantees in connection with mutual funds offered by the ­­­­Allianz Group’s Asset Management operations in France. The levels of market value and perfor- mance-at-maturity guarantees, as well as the maturity dates, differ based on the underlying agreements. In most cases, the same mutual fund offers both a market value 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 339