Allianz SE · XETR:ALV

Allianz — Q1 2017 Earnings Presentation

49 slides from Allianz's earnings presentation, May 12, 2017

1. Slide 1: 1Q 2017 Analyst conference call

   1Q 2017 Dieter Wemmer Chief Financial Officer Analyst conference call May 12, 2017 Please note: Prior year figures have been restated due to an updated operating profit definition and an accounting policy change. For further information please refer to the section “Additional information”.

2. Slide 2: Highlights

   1 1 Highlights Group financial results 1Q 2017 2 Additional information 3 Glossary © Allianz SE 2017

3. Slide 3: Group: excellent start into 2017

   Group financial results 1Q 2017 Group: excellent start into 2017 Total revenues (EUR bn) Operating profit drivers (EUR mn) Internal growth +2.5% +9.4% +2.5% +112 +33 2,932 35.4 36.2 +302 2,680 -12 -183 1Q 16 1Q 17 Shareholders’ net income (EUR mn) -15.3% Operating P/C L/H AM CO Consoli- Operating pr

4. Slide 4: Group: excellent start into 2017 - comments

   Group financial results 1Q 2017 Group: excellent start into 2017 Comments  All segments grow revenues  P/C – good performance despite volatile elements Double digit growth in AM (+12.3%) following higher OP at 24% of FY OP outlook mid-point despite average AuM supported by 3rd party net inflows of

5. Slide 5: SII ratio at 212% after full recognition of EUR 3bn share buy-back

   Group financial results 1Q 2017 Group: SII ratio at 212% after full recognition of EUR 3bn share buy-back Shareholders’ equity Key sensitivities (EUR bn) (EUR bn) +0.9% Equity -30% -3.6 markets 67.1 67.7 Unrealized +50bps -3.6 11.8 11.2 Interest gains/losses1 rate 27.6 -50bps +3.4 Retained earnings2

6. Slide 6: SII ratio at 212% - comments

   Group financial results 1Q 2017 Group: SII ratio at 212% after full recognition of EUR 3bn share buy-back Comments  Shareholders’ equity – up 1%, despite EUR 0.7bn  SII sensitivity more symmetric repurchased shares Equity: Higher exposure and market value increase In 1Q 2017, shareholders’ equity

7. Slide 7: Very strong capital generation

   Group financial results 1Q 2017 Group: very strong capital generation +3.1 +0.8 +2.2 75.3 75.8 -3.7 -2.0 +1.3 +0.1 +1.3 +0.4 +0.5 0.0 P/C AM Own funds -0.1 +0.3 L/H CO/Conso. (EUR bn) 31.12.16 Regulatory/ Operating SII Market Capital mgmt./ Other 31.03.17 model changes earnings impact management act

8. Slide 8: Very strong capital generation - comments

   Group financial results 1Q 2017 Group: very strong capital generation Comments  SII ratio increases 3%-p on a like-for-like basis  Market impact On an underlying basis, our SII ratio increases 3%-p Own funds: L/H benefits from positive economic to 212% in 1Q, mainly driven by strong capital varian

9. Slide 9: P/C: price-driven growth of 1.7 percent near target level

   Group financial results 1Q 2017 P/C: price-driven growth of 1.7 percent near target level Revenues Actual rate change on renewals Total growth Internal growth EUR mn 1Q 17 1Q 17 Momentum Δ p.y. Δ p.y. Total P/C segment 17,703 +2.7% +1.7% +1.7% – Large OEs Germany 4,416 +2.0% +2.0% +2.6% stable Franc

10. Slide 10: P/C: price-driven growth - comments

    Group financial results 1Q 2017 P/C: price-driven growth of 1.7 percent near target level Comments  Germany, Australia and AWP main growth drivers  AWP – AWP P&C leads strong growth Internal growth of +1.7% mainly driven by price. New business and existing portfolio (travel) F/X +0.3% and consolid

11. Slide 11: P/C: on track to meet full-year target despite higher large losses and Ogden

    Group financial results 1Q 2017 P/C: on track to meet full-year target despite higher large losses and Ogden Operating profit drivers (EUR mn) Combined ratio (in %) -12.7% +2.3%-p 1,442 +37 +18 1,259 93.3 95.6 -237 Loss ratio 64.8 67.2 NatCat impact2 0.2 1.1 (in %-p) Expense ratio 28.5 28.4 1Q 16 1Q

12. Slide 12: P/C: on track to meet full-year target - comments

    Group financial results 1Q 2017 P/C: on track to meet full-year target despite higher large losses and Ogden Comments  Operating profit – on good level  Loss ratio – underlying LR improves yoy Operating profit at 24% of FY mid-point outlook AY LR increases +1.7%-p to 69.9% mainly due despite volat

13. Slide 13: P/C: LatAm returns to positive operating profit

    Group financial results 1Q 2017 P/C: LatAm returns to positive operating profit Operating profit Combined ratio NatCat impact on CR1 EUR mn 1Q 17 Δ p.y. 1Q 17 Δ p.y. 1Q 17 Δ p.y. Total P/C segment 1,259 -12.7% 95.6% +2.3%-p 1.1%-p +0.9%-p Large OEs Germany 274 -22.2% 93.6% +4.6%-p 0.5%-p +0.5%-p Fra

14. Slide 14: P/C: LatAm returns to positive operating profit - comments

    Group financial results 1Q 2017 P/C: LatAm returns to positive operating profit Comments  Germany – CR remains on good level  Australia – impacted by NatCat LR adversely impacted by higher large and CR increase driven by higher NatCat (Sydney weather-related losses and lower run-off. hailstorm, cy

15. Slide 15: P/C: current income stable

    Group financial results 1Q 2017 P/C: current income stable Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) +5.2% 1.6 1.6 707 743 0.66 0.65 1Q 16 1Q 17 1Q 16 1Q 17 Total average asset base4 Duration5 1Q 16 1Q 17 Change (E

16. Slide 16: P/C: current income stable - comments

    Group financial results 1Q 2017 P/C: current income stable Comments  Interest & similar income  Economic reinvestment yield Resilient performance as higher yield on equities Largely unchanged compared to FY 2016 level compensates slightly lower yield on debt. of 1.7%. The low yield environment imp

17. Slide 17: L/H: business mix close to target 2018

    Group financial results 1Q 2017 L/H: business mix close to target 2018 PVNBP share by line1 PVNBP by OE1 NBM (in %) Other OEs Germany Life 1,394 (+10.6%) 3,987 (+11.2%) Total L/H segment 2.6 3.1 USA 2,211 (-26.1%) Protection & health 2.6 21% 22% 3.5 Asia Pacific Germany Health 1,258 (+56.7%) 491 (+3

18. Slide 18: L/H: business mix close to target 2018 - comments

    Group financial results 1Q 2017 L/H: business mix close to target 2018 Comments PVNBP by line PVNBP by OE  Growth modus for the 3rd consecutive quarter  Germany Life – share of preferred lines at 71% Growth in preferred lines (+11%) is sufficient to Higher production of capital-efficient products

19. Slide 19: L/H: operating profit outstanding at EUR 1.2 billion

    Group financial results 1Q 2017 L/H: operating profit outstanding at EUR 1.2 billion (EUR mn) Operating profit by source1 Operating profit by line1 +35.5% +35.5% +182 +22 1,155 1,155 +103 -1 -86 238 +82 852 852 135 88 91 205 250 624 458 Operating Operating Loadings Investment Expenses Technical Impa

20. Slide 20: L/H: operating profit outstanding - comments

    Group financial results 1Q 2017 L/H: operating profit outstanding at EUR 1.2 billion Comments  OP at 29% of FY target range mid-point  Expenses improve due to lower FIA sales in USA Very good start with OP at outstanding level Acquisition expenses down due to lower US FIA of EUR 1.2bn supported by

21. Slide 21: L/H: 3.1 percent NBM at 2018 target

    Group financial results 1Q 2017 L/H: 3.1 percent NBM at 2018 target Value of new business1 New business margin1 Operating profit EUR mn 1Q 17 Δ p.y. 1Q 17 Δ p.y. 1Q 17 Δ p.y. Total L/H segment 453 +22.8% 3.1% +0.5%-p 1,155 +35.5% Large OEs Germany Life 134 +22.0% 3.4% +0.3%-p 286 -15.8% USA 86 -17.9

22. Slide 22: L/H: 3.1 percent NBM at 2018 target - comments

    Group financial results 1Q 2017 L/H: 3.1 percent NBM at 2018 target Comments New business Operating profit  Successful new business management  Germany Life profitability remains very good NBM and VNB prove that our products are value Less beneficial impact from change in DAC creating even in very

23. Slide 23: L/H: investment margin strong at 25bps

    Group financial results 1Q 2017 L/H: investment margin strong at 25bps Investment margin Economic reinvestment yield1 (debt securities; in %) (Yields are pro-rata) 1Q 161 1Q 17 2.2 1.9 Based on Ø book value of assets2 (EUR bn) 490 516 Current yield 0.9% 0.9% Based on Ø aggregate policy reserves (EUR

24. Slide 24: L/H: investment margin strong - comments

    Group financial results 1Q 2017 L/H: investment margin strong at 25bps Comments  Yield decline within expected range  PHP slightly down Current yield based on aggregate policy reserves PHP declines by 2.8%-p to 80.9% which declines 5bps within expected range. Impact partially compares well with 78

25. Slide 25: AM: EUR billion 3rd party net inflows at PIMCO

    Group financial results 1Q 2017 AM: EUR 21 billion 3rd party net inflows at PIMCO (EUR bn) Total assets under management 3rd party assets under management development +2.4% +3.1% 1,871 1,916 Allianz Group 510 514 +25.8 +6.5 1,403 1,361 +20.9 assets -9.9 -1.5 3rd party AuM 1,361 1,403 31.12.16 31.03.

26. Slide 26: AM: 3rd party net inflows at PIMCO - comments

    Group financial results 1Q 2017 AM: EUR 21 billion 3rd party net inflows at PIMCO Comments  3rd party AuM segment – up 3%  PIMCO – EUR 21bn net inflows Increase driven by market development and Trend of 3rd party net inflows accelerates. Inflows excellent 3rd party net inflows at PIMCO. particular

27. Slide 27: AM: revenue increase driven by higher AuM

    Group financial results 1Q 2017 AM: 12 percent revenue increase driven by higher AuM (EUR mn) Revenues development1 PIMCO3 AllianzGI4 +12.3% +12.7% +10.2% +8.9% +9.0% +7.4% Internal growth 1,558 61 1,110 448 1,388 985 34 52 407 27 Performance fees 28 23 Other net fee and commission income (AuM drive

28. Slide 28: AM: revenue increase - comments

    Group financial results 1Q 2017 AM: 12 percent revenue increase driven by higher AuM Comments  Segment – significant revenue increase Increase driven by higher average 3rd party AuM (+11%) at PIMCO (+8%) and AllianzGI (+20%), resulting in higher AuM driven fees (+8%). Performance fees rise 18%. Sup

29. Slide 29: AM: operating profit up 24 percent

    Group financial results 1Q 2017 AM: operating profit up 24 percent – a promising start into 2017 (EUR mn) Operating profit drivers PIMCO Internal growth +24.4% +25.4% +20.8% 443 +121 +7 353 +16 5721 4601 -32 64.1 60.1 CIR 66.9 63.3 1Q 16 1Q 17 (in %) AllianzGI Operating AuM Performance Expenses F/X

30. Slide 30: AM: operating profit up 24 percent - comments

    Group financial results 1Q 2017 AM: operating profit up 24 percent – a promising start into 2017 Comments  Segment – OP up 24%  AllianzGI – OP up 19% Significant improvement driven by higher business Strong operating profit. CIR better by 2.2%-p volume. 25% of FY 2017 outlook mid-point due to high

31. Slide 31: CO: improving

    Group financial results 1Q 2017 CO: improving (EUR mn) Operating loss development and components +12 +2 0 +18 -41 -74 +44.4% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 1Q 16 1Q 17 Δ 1Q 17/16 © Allianz SE 2017 1Q 17 -87 31 15 0 1Q 16 -106 19 1

32. Slide 32: CO: improving - comments

    Group financial results 1Q 2017 CO: improving Comments  Holding & Treasury shows good improvement Driver is better net interest result (Δ EUR +20mn) mainly due to higher interest income from third-party loans. For the last time we recognized a positive impact related to the adapted cost allocation

33. Slide 33: Group: shareholders' net income at 26 percent of FY 2016 result

    Group financial results 1Q 2017 Group: shareholders’ net income at 26 percent of FY 2016 result EUR mn 1Q 16 1Q 17 Change Operating profit 2,680 2,932 +252 Non-operating items 276 -220 -496 Realized gains/losses (net) 568 167 -401 Impairments (net) -61 -12 +49 Income from financial assets and liabil

34. Slide 34: Group: shareholders' net income - comments

    Group financial results 1Q 2017 Group: shareholders’ net income at 26 percent of FY 2016 result Comments  2016 net income exceptionally high  Restructuring charges Prior year result benefitted from high level of Restructuring charges of EUR 112mn related to the tax exempt non-operating items and a

35. Slide 35: Status quo and ambitions for 2018

    Group financial results 1Q 2017 Status quo and ambitions for 2018 1Q 17 2018 1Q 17 2018 Businesses with 4.8%1 5%1 EPS Growth NPS above market 55%3 75% SII interest rate 12.4%2 13% RoE Allianz Group sensitivity 12%-p <11%-p 95.6% 94% P/C CR PIMCO CIR 60.1% 60% L/H OEs with 61%2 100% RoE ≥10% IMIX 70%

36. Slide 36: Status quo and ambitions for 2018 - comments

    Group financial results 1Q 2017 Status quo and ambitions for 2018 Comments  EPS growth  SII interest rate sensitivity Close to target, driven by profit growth. Slight increase compared to FY 2016 due to Small impact of share buy-back in first quarter. market developments and model changes.  RoE 

37. Slide 37: Additional information

    2 1 Highlights Group financial results 1Q 2017 2 Additional information 3 Glossary © Allianz SE 2017

38. Slide 38: Impact of 2017 accounting changes on 2016 result

    Group financial results 1Q 2017 – Additional information Impact of 2017 accounting changes on 2016 result Impact on operating profit (EUR mn) 1Q 16 2Q 16 3Q 16 4Q 16 12M 16 Operating profit as published in 2016 2,756 2,353 2,898 2,826 10,833 Updated definition for operating profit +2 +35 +34 +31 +10

39. Slide 39: Impact of 2017 accounting changes - comments

    Group financial results 1Q 2017 – Additional information Impact of 2017 accounting changes on 2016 result Comments  Changed definition for operating profit Restatement effects on operating profit by segment Restructuring charges now considered as 1Q 2Q 3Q 4Q 12M in EUR mn non-operating unless share

40. Slide 40: Glossary

    3 1 Highlights Group financial results 1Q 2017 2 Additional information 3 Glossary © Allianz SE 2017

41. Slide 41: Glossary (1)

    Glossary (1) AFS Available-for-sale: Non-derivative financial assets which have been acquired neither for sale in the near term nor to be held to maturity. Available-for-sale investments are shown at fair value on the balance sheet. AGCS Allianz Global Corporate & Specialty AllianzGI Allianz Global

42. Slide 42: Glossary (2)

    Glossary (2) Bps Basis points. 1 Basis point = 0.01%. CEE Central and Eastern Europe excluding Russia and Ukraine CIR Cost-income ratio: Operating expenses divided by operating revenues CO (The business segment) Corporate and Other CR Combined ratio: Represents the total of acquisition and administr

43. Slide 43: Glossary (3)

    Glossary (3) FIA Fixed-index annuity: Annuity contract whereby the policyholder can elect to be credited based on movements in equity or bond market indices with protection of principal. FV Fair value: The price that would be received to sell an asset or paid to transfer a liability in an orderly tr

44. Slide 44: Glossary (4)

    Glossary (4) L/H (The business segment) Life and Health insurance L/H lines of business Guaranteed savings & annuities: Guaranteed savings and annuities are life insurance products that always relate to the length of human life. These products offer life and / or death coverage of the insured in the

45. Slide 45: Glossary (5)

    Glossary (5) LatAm Latin America: South America and Mexico LoB Line of business LR Loss ratio: Represents claims and insurance benefits incurred (net) divided by premiums earned (net). The calendar year (c.y.) loss ratio includes the results of the prior year(s) reserve development in addition to th

46. Slide 46: Glossary (6)

    Glossary (6) OP Operating profit: Earnings from ordinary activities before income taxes and non-controlling interests in earnings, excluding, as applicable for each respective business segment, all or some of the following items: income from financial assets and liabilities carried at fair value thr

47. Slide 47: Glossary (7)

    Glossary (7) RfB Reserves for premium refunds (“Rückstellungen für Beitragsrückerstattung”): Part of the surplus that is to be distributed to policyholders in the future. These reserves are established based on statutory, contractual or company by-law obligations, or at the insurer’s discretion. RoE

48. Slide 48: Glossary (8)

    Glossary (8) Statutory premiums Represents gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s home juris

49. Slide 49: Disclaimer

    Disclaimer These assessments are, as always, subject to the disclaimer provided below. Forward-looking statements The statements contained herein may include prospects, statements of extent of credit defaults, (vii) interest rate levels, (viii) currency exchange future expectations and other forward

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