Allianz Se · XETR:ALV
Allianz — Investor Day (July 2010)
110 slides from Allianz's investor day presentation, Jul 1, 2010
Slide 1: Allianz Capital Markets Day – Global Business Lines
Allianz Capital Markets Day Global Business Lines Munich, July 1, 2010
Slide 2: Agenda
Agenda Global business lines Clement Booth A Global Automotive Karsten Crede B Mondial Assistance Rémi Grenier C Allianz Re Clemens von Weichs D Allianz Global Corporate & Specialty Axel Theis E Euler Hermes Wilfried Verstraete F Glossary Appendix Investor Relations contacts © Allianz SE 2010 Financ
Slide 3: Global Business Lines
Clement Booth, Member of the Board of Management Allianz SE Global Business Lines Capital Markets Day Munich, July 1, 2010
Slide 4: Agenda: Overview
A. Global business lines Agenda 1 Overview 2 Selected global business lines 3 A case in point © Allianz SE 2010 A2
Slide 5: Global business lines – overview (1)
A. Global business lines Global business lines – overview (1) § Centrally steered and managed operations, Allianz revenues EUR 97.4bn1 locally executed, profit center view § Serve our customers globally with global common standards, products, services and guidelines Global business lines 15% § 15% o
Slide 6: Global business lines – overview (2)
A. Global business lines Global business lines – overview (2) Revenues EUR 14.5bn1 25% P/C AGCS 25% AM Allianz Global Investors 11% P/C Euler Hermes 9% P/C Mondial Global 1% Health Allianz Worldwide Care External business 1% Life Global Life operations lines P/C Automotive2 P/C, L/H Global Broker In
Slide 7: Global business lines – the transformation process
A. Global business lines Global business lines – the transformation process EUR bn 2005 Transformation process 2009 14.5 34% 12.7 23% Total revenues +EUR 1.8bn OP +EUR 567mn 2.5 1.9 Share of OP +11%-p Total Operating Share in Total Operating Share in revenues profit Allianz Group revenues profit All
Slide 8: Agenda: Selected global business lines
A. Global business lines Agenda 1 Overview 2 Selected global business lines 3 A case in point © Allianz SE 2010 A6
Slide 9: Allianz Global Investors (AGI)
A. Global business lines Allianz Global Investors (AGI) § One of the world’s largest asset managers AuM (in EUR bn) with EUR 1.2tn AuM1 8%2 § Almost 30 operating entities located in the 1,1781 key financial markets all over the world 152 § Global network ensures utilization of shared 707 sales and i
Slide 10: Allianz Worldwide Care (AWC)
A. Global business lines Allianz Worldwide Care (AWC) CAGR § Specialist insurer offering health products to Revenues +26% 182 expatriates worldwide and to high net-worth (in EUR mn) Rest of world 97 individuals in emerging markets 5.1 EU Other 24 § One center of competence which can access 28 German
Slide 11: Global Life
A. Global business lines Global Life § Company: Allianz Global Life Ltd. (Ireland) GPW (in EUR mn) § Product: Variable Annuity (VA) business sold +154 in three European countries, on freedom of 182 establishment basis1: Germany 4 Italy 63 - France (since 2008) - Germany (since 2008 / 2009) New busin
Slide 12: Allianz Global Broker Initiative
A. Global business lines Allianz Global Broker Initiative § Broker channel contributes ~1/3 of Allianz broker business 2009 Allianz revenues, of which global (GPW in EUR bn) brokers represent 11% … § … with growth of 4% (CAGR 2007 - 2009) § Global brokers have business with all 45% P/C Allianz broke
Slide 13: Allianz Investment Management (AIM)
A. Global business lines Allianz Investment Management (AIM) § Global investment management function Asset allocation2 of Allianz Group investments as of 31.12.09 (previous year) § Maximizes risk-adjusted investment return § Responsible for >EUR 400bn of Allianz Equities insurance assets 8% (9%) § C
Slide 14: Shared Services exploit regional and global potential
A. Global business lines Shared Services exploit the regional and global potential – supported by global IT platforms Shared Services consolidate activities used by multiple divisions into a shared operation Scope of shared services Benefits Cost savings in IT IT ASIC 1 § Hardware, software and § Re
Slide 15: Agenda: A case in point
A. Global business lines Agenda 1 Overview 2 Selected global business lines 3 A case in point © Allianz SE 2010 A 13
Slide 16: AGCS – restructuring of former industrial corporate business
A. Global business lines AGCS1 – restructuring of former industrial corporate business Starting point in 2005 Objectives for restructuring § Decentralized corporate business carriers - AGR (Allianz Global Risks) Integrate In-house organization of Allianz responsible for U.S. and Europe the internati
Slide 17: AGCS – a successful transformation (1)
A. Global business lines AGCS – a successful transformation (1) EUR bn AGCS 20051) Transformation process AGCS 2009 122% 87% 5% GPW +EUR 1.4bn 90% LR 3.8 0.6 2.4 OP +EUR 0.9bn 62% LR -0.3 32% ER CR -35%-p 25% ER GPW Operating Combined GPW Operating Combined profit ratio profit ratio Challenges Actio
Slide 18: AGCS – a successful transformation (2)
A. Global business lines AGCS – a successful transformation (2) Status quo before AGCS set-up New AGCS structure Allianz Allianz AGR AGCS Local OE Local OE AMA Branch 1 Branch 2 Carrier 1 AGR unit AGR unit © Allianz SE 2010 Branch Branch Branch 1 2 3 A 16
Slide 19: Allianz Re: mandated to optimize Group reinsurance activities
A. Global business lines Allianz Re: mandated to optimize Group reinsurance activities Starting point in 2005 Objectives for restructuring Challenges Reinsurance purchase Improve Group profit through reinsurance optimization § Standalone OE purchasing without consideration of Group risk appetite § F
Slide 20: Allianz Re – a successful transformation
A. Global business lines Allianz Re – a successful transformation EUR bn Allianz Allianz Re 20061 Re 2005 Transformation process Allianz Re 2009 96.1% 92.4% NPE +EUR 0.2bn 4.7 66.3% LR OP +EUR 85mn 4.1 66.5% LR 3.2 3.4 0.3 0.4 29.8% ER CR -3.7%-p 25.9% ER GPW NPE Operating Combined GPW NPE Operating
Slide 21: Key take-aways
A. Global business lines Key take-aways From local to global Significant efficiency gains achieved and further potential exists Global lines account for a third of overall operating profit Growth initiatives begin to unfold Right incentive system in place Magnet for top talent Mid-term aspiration: c
Slide 22: Global Automotive
Karsten Crede, CUO Global Automotive Global Automotive Capital Markets Day Munich, July 1, 2010
Slide 23: Overview – Automotive
B. Global Automotive Overview – Automotive Highlights Allianz P/C business mix § Motor insurance is by far the Motor 33% biggest single line of business Non-motor 67% at Allianz Total EUR 42.5bn1 § Allianz has successfully leveraged car manufacturer and dealer cooperations and Allianz Group – channe
Slide 24: Current footprint of cooperations capturing almost 50% of worldwide car sales
B. Global Automotive Current footprint of cooperations capturing almost 50% of worldwide car sales Highlights New cars sold by … (mn vehicles) § Allianz has had cooperations with car manufacturers since the 1940s 33 … non-cooperation partners with whom it has developed a fully customized business mo
Slide 25: Car manufacturer and dealer cooperations are an opportunity
B. Global Automotive Car manufacturer and dealer cooperations are an opportunity for which Allianz is uniquely positioned The opportunity § Car manufacturer and dealer cooperations are a growth driver of Allianz Global Automotive § Huge opportunity for POS1 insurance created by = estimated worldwide
Slide 26: Cooperations are a growth driver in a stagnant German motor market
B. Global Automotive Car manufacturer and dealer cooperations are a growth driver for Allianz in a stagnant German motor market Example Germany German motor insurance market Allianz car manufacturer and dealer GPW (EUR bn) cooperations GPW (EUR mn) CAGR +4% ~610 CAGR 0% ~430 20 20 2000 2009 2000 200
Slide 27: Worldwide growth of car sales of 6% p.a.
B. Global Automotive Worldwide growth of car sales of 6% p.a. is creating a huge opportunity for Allianz Worldwide car market – new cars sold (mn) CAGR +6% 87.7 85.2 81.9 77.6 Huge opportunity 19.3 globally driven by 72.4 18.6 17.8 66.9 16.9 § Worldwide growth 61.8 16.0 of new car sales of 14.5 17.0
Slide 28: Global excellence in insurance through car manufacturers and dealers
B. Global Automotive Global excellence in insurance through car manufacturers and dealers Allianz Automotive motor GPW EUR mn, 2009 Germany ~610 Significant potential Australia ~450 § Grow further in countries with existing cooperations Poland ~100 Æ increased penetration of car sales Russia ~50 at
Slide 29: Overview – automotive agreements worldwide
B. Global Automotive Overview – automotive agreements worldwide Scope Agreement Branding Products Number countries Umbrella White Label Motor Warranty Assistance Brands 1 Volkswagen 17 x x x x 2 Audi 17 x x x x 3 Skoda 17 x x x x 4 Seat 17 x x x x 5 Bugatti 1 x x x - 6 Lamborghini 1 x x x x 7 Bentle
Slide 30: Mastery of business model key to capture opportunity
B. Global Automotive Mastery of business model key to capture opportunity Key success factors Allianz strengths Barriers to entry 1 § Longstanding relationships with car § Time and effort required to Fully understand manufacturers since the 1940s establish and maintain and support car cooperations a
Slide 31: Fully understand and support car manufacturers' key battles
B. Global Automotive 1 Fully understand and support the car manufacturers’ “key battles” 4 After-sales 3 Sales 1 Relationship to partners § Stabilize spare parts profits § Avoid discounts § Depth of value chain (OEMs1) § Stabilize residual value and type of relationship § Maximize garage utilization
Slide 32: Integrate end-to-end in car manufacturers' value chains
B. Global Automotive 2 Integrate end-to-end in car manufacturers’ value chains and proactively provide solutions Allianz end-to-end business model for car manufacturer cooperations insurance Product Pricing/UW Sales Ops/IT Claims development OEM1 Modular insurance Differentiated Improved Integration
Slide 33: Offer innovative products fully tailored to the car
B. Global Automotive 3 Offer innovative products fully tailored to the car ILLUSTRATIVE Premium models Holistic approach BMW 5 / Audi A6 / Mercedes E along the value chain Insurance Product: best insurance coverage, e.g. extended warranty, PPI2, GAP3 Pricing: actuarial basis for price reduction link
Slide 34: Global Automotive strategy
B. Global Automotive Global Automotive strategy Mission: Be the preeminent global strategic partner of integrated insurance solutions to the world‘s leading OEMs1 Global Automotive organization with an automotive DNA as a tier-1 supplier for the car Objectives Automotive expertise Growth Product Dis
Slide 35: Global Automotive created as a global line in 2010
B. Global Automotive Global Automotive created as a global line in 2010 to steer the car manufacturer and dealer business Allianz SE Counterpart to global car Global Automotive manufacturers Allianz OEs (K. Crede) Global steering Focus Central Finance/ Global profitability and local trade-offs funct
Slide 36: Outlook – medium-term aspirations
B. Global Automotive Outlook – medium-term aspirations EUR 2bn EUR 2 billion of GPW in existing markets 1 out Significant presence at least in one of of 2 the key growth markets (U.S. and China) 4 out Cooperations with 4 out of the “Top 5” of 5 world's largest car manufacturers <98% Target combined
Slide 37: Key take-aways
B. Global Automotive Key take-aways Automotive is a significant channel in European motor insurance for Allianz Current footprint of cooperations capturing almost 50% of worldwide car sales Automotive is a growth driver for Allianz in mature and emerging markets Allianz as global market leader in th
Slide 38: Mondial Assistance
Rémi Grenier, CEO Mondial Assistance Mondial Assistance Capital Markets Day Munich, July 1, 2010
Slide 39: Overview – assistance market in 2009
C. Mondial Assistance Overview – assistance market in 2009 Highlights Market structure (%) § EUR 17bn market (insurance 5 bound assistance and clubs) Automotive 19 § 3-year CAGR ~7%1 Travel 44 Total revenues § Mondial as a global leader on Health & Lifecare ~EUR 17bn the assistance market is Other >
Slide 40: Overview – Mondial Assistance (1)
C. Mondial Assistance Overview – Mondial Assistance (1) Highlights 2009 revenue split (2007 - 2009 growth p.a. in %) § Market leader in assistance By region (%) By market3 (%) § Mission: helping people, 7 7 Finance (ex. AZ) (+7) anytime, anywhere 7 Europe (+3) 14 25 Tourism Online (+18) § Founded in
Slide 41: Overview – Mondial Assistance (2)
C. Mondial Assistance Overview – Mondial Assistance (2) Revenues Operating profit (EUR mn) CAGR 7.9% (EUR mn) CAGR 5.4% 1,597 1,673 107 1,508 96 95 1,357 90 1,236 77 XX 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Combined ratio Risk-adjusted capital1 (in %) +0.1%-p (EUR mn) CAGR 12.6% 95.8 95.
Slide 42: Assistance is about combining insurance and services
C. Mondial Assistance Assistance is about combining insurance and services together > 90% of quotations contain both insurance and service elements CSA1 Service component product Insurance component composition Success § Underwriting capabilities § Customer contact point factors (risk assessment, (p
Slide 43: Wide range of offering with a strong funnel of new products
C. Mondial Assistance Mondial has a wide range of offering, with a strong funnel of new products Health & Life Lines of Automobile Travel business Health Lifecare Roadside Rehabilitation Offerings assistance Trip cancellation management Daily life services Accident Lost luggage Employment (= compone
Slide 44: Global trends will further increase demand for specialty assistance
C. Mondial Assistance Global trends will further increase demand for consumer specialty assistance Selected global trends are offering … to increase customer specialty new opportunities … assistance sales § Electric vehicle assistance Roadside § Extended warranty § Integrated customer contact manage
Slide 45: Innovation: unique e-commerce solutions
C. Mondial Assistance Innovation: Mondial’s unique e-commerce solutions to leverage business clients’ customer base Potential … visits B2B … which offers … based on Mondial’s unique customer … client website white labeled e-commerce distribution MA1 product platforms Potential customer E.g. over 50
Slide 46: 10,000 employees servicing customers around the clock
C. Mondial Assistance 10,000 employees servicing customers around the clock all over the world 28 operating entities More than 40 languages 2/3rd women Average age 35 42 million calls handled 15 million cases handled © Allianz SE 2010 Overall NPS1 of 61% 1) Net promoter score C9
Slide 47: Target structure allows more efficient capital management
C. Mondial Assistance Target structure allows more efficient capital management and a simplification of governance Illustrative / Management View MONDIAL Assistance S.A.S (Paris) Insurance company Europe Mondial Assistance MA1 Poland MA Italia Services company International MA Austria MA Greece Bran
Slide 48: Unfall Aktiv – a success story
C. Mondial Assistance Unfall 60 Aktiv – a success story for Mondial, Allianz and our customers (NPS >85%) Introduction of AZ-MA1 Starting position bundled product in 2004 Impact 60+ market segment viewed New bundled product developed, 500,000 contracts sold in 5 years non-profitable (high claims rat
Slide 49: Six reasons to grow, leading to one aspiration
C. Mondial Assistance Six reasons to grow, leading to one aspiration Growth driven by … … strong market position 1 ► Global number one on the market for assistance services … trends supporting the business 2 ► Aging society, travel industry revolution, new travel behavior … unique products/services
Slide 50: Allianz Re
Clemens von Weichs, CEO Allianz Re Allianz Re Capital Markets Day Munich, July 1, 2010
Slide 51: Overview – reinsurance market
D. Allianz Re Overview – reinsurance market Highlights Market share P/C1 § Continuing soft market § Capital levels almost back to 2007 15.3% § Demand of primary insurers driven by capital shortage § Insured losses 2009 ~USD 26bn (USD 22bn Cat losses, USD 4bn 9.4% man-made) 7.0% § Largest NatCat even
Slide 52: Overview – Allianz Re (1)
D. Allianz Re Overview – Allianz Re1 (1) Highlights GPW by region (Total EUR 4.1bn) § Profit center and Group reinsurance Germany 55% Americas 4% coordinator in one organization Asia-Pacific 12% SC & MC4 4% § Financial strength and international Germany Life 10% MENA 2% experience in underwriting an
Slide 53: Overview – Allianz Re (2)
D. Allianz Re Overview – Allianz Re (2) Revenues1 (EUR mn) Operating profit (EUR mn) CAGR -4.4% CAGR +8.5% 4,661 4,063 4911 339 3,774 3,749 LH 393 313 294 350 308 267 PC 4,322 3,461 3,455 3,713 2006 2007 2008 2009 2006 2007 2008 2009 Combined ratio (in %) Risk-adjusted capital2 (EUR mn) -3.7%-p CAGR
Slide 54: Evolution and role of Allianz Re
D. Allianz Re Evolution and role of Allianz Re Late 1970s / early 1980s 1990s 2007 onwards – RIO § Activities based on § Allianz Re started § Winding down of external Q/S cooperation with Munich accepting more agreements, increase of OE Re. Expertise provided business from OEs retentions by Munich R
Slide 55: Group reinsurance operations – our mission
D. Allianz Re Group reinsurance operations – our mission 1 § Maximize benefit of the Group’s EUR 4bn external reinsurance spend § Manage earnings volatility to acceptable level Group steering instrument § Protect capital base against extreme events § Provide competitive advantage for OEs by pooling
Slide 56: Rationale for Group internal business approach – RIO
D. Allianz Re Rationale for Group internal business approach – RIO Enhance transparency on Allianz group-wide Information reinsurance activities via globally shared information platform (GRIP) Capital efficiency through traditional and Capital efficiency structured intra-group reinsurance Reinsuranc
Slide 57: The Allianz reinsurance system – reinsurance optimization
D. Allianz Re The Allianz reinsurance system – reinsurance optimization Structures its local reinsurance program OE in line with Group requirements All P/C treaties excl. Cat XL Cat XL Pools Cat risk, calculates Group retention 70%+ in line with Group risk appetite 100% max. 30% Allianz Re External
Slide 58: Group internal business – the power of pooling
D. Allianz Re Group internal business – the power of pooling Allianz Re P/C results 2006 2007 2008 2009 Total Benefits to Group and OEs (EUR mn) Gross premiums 3,761 3,067 2,920 3,214 12,865 § Aligns external protection to Net earned premiums 2,346 1,980 2,379 2,507 9,212 risk appetite at Group leve
Slide 59: Maximizing the value of external reinsurance spend
D. Allianz Re Maximizing the value of external reinsurance spend Allianz Group P/C results 2005 2006 2007 2008 2009 (EUR mn) Gross premiums1 49,466 49,096 49,611 48,747 47,875 Ceded premiums 5,529 5,415 5,319 4,972 4,574 Gross combined ratio2 92% 87% 89% 88% 91% Net combined ratio3 93% 92% 93% 95% 9
Slide 60: Evolution of external business at Allianz Re
D. Allianz Re Evolution of external business at Allianz Re 1999 2007 2008 onwards § Formation of Allianz Re § Transfer of Allianz Suisse § Portfolio optimization started Singapore branch inwards book to Allianz Re § Non-profitable and non-strategic § 90%+ external business § All assumed reinsurance
Slide 61: External business – profitable and capital efficient
D. Allianz Re External business – profitable and capital efficient Allianz Re P/C results 2006 2007 2008 2009 Total (EUR mn) Gross premiums 562 396 565 565 2,088 Net earned premiums 514 315 444 567 1,840 Net loss ratio 63.7% 67.8% 56.9% 51.7% 60.0% Expense ratio 26.1% 24.4% 31.7% 25.9% 27.0% Combine
Slide 62: External business – client and market strategy
D. Allianz Re External business – client and market strategy Core Specialty Opportunistic Stable portfolio with broad based Business segments where we can Commodity coverage – primarily relationship across standard provide market leading expertise NatCat taking advantage of business lines and produc
Slide 63: Building blocks of NatCat protection strategy
D. Allianz Re Building blocks of NatCat protection strategy Current protection landscape External reinsurance Mega Cat Super Cat Cat bonds, Swaps Internal reinsurance Allianz Re Additional Group retention OE retention Retentions of operating entities (OEs) based on risk bearing capacities § Central
Slide 64: Group NatCat landscape
D. Allianz Re Group NatCat landscape1 3,000 OEP2 loss in EUR mn 2,500 Plafond EUR 2,600mn 2,000 Wind, hurricane Focus of Group Quake 1,500 retro program Flood Hail 1,000 500 Priority EUR 300mn 0 EUR WS I FL US HU I EQ US EQ Rest PT EQ TR EQ GR EQ D FL D HL UK FL A HL USA EQ NM USA EQ CA AUS CY USA E
Slide 65: Key take-aways
D. Allianz Re Key take-aways Allianz Re is a well established international player Allianz Re key to capital management within Allianz Group Optimization of internal reinsurance to support Group earnings power Support competitive position and profitable growth at OE level Attractive profit potential
Slide 66: Allianz Global Corporate & Specialty
Axel Theis, CEO Allianz Global Corporate & Specialty Allianz Global Corporate & Specialty Capital Markets Day Munich, July 1, 2010
Slide 67: Overview – Corporate & Specialty market
E. Allianz Global Corporate & Specialty Overview – Corporate & Specialty market § 8 global peers dominate the market Despite 2009 market downturn, AGCS improved ranking and GPW significantly with GPW1 EUR 39bn 2008 GPW 1 (EUR mn) 2009 GPW 1 (EUR mn) § Local competitors complement the 1 AIG Commercia
Slide 68: Overview – AGCS (1)
E. Allianz Global Corporate & Specialty Overview – AGCS1 (1) Highlights GPW by LoB Property 28% Marine 21% [Total EUR 3.8bn] § Global diversified portfolio Liability 18% allowing largest net capacity Aviation 16% Engineering 11% in all markets Energy 3% § Excellent underwriting and risk Financial Li
Slide 69: Overview – AGCS (2)
E. Allianz Global Corporate & Specialty Overview – AGCS (2) GPW (EUR bn) Operating profit2 (EUR mn) CAGR 12.2% CAGR 13.5% 3.8 590 2.8 2.9 404 413 434 2.7 2.4 -270 20051 2006 2007 2008 2009 20051 2006 2007 2008 2009 Combined ratio (in %) Risk-adjusted capital3 (EUR mn) - 35.1%-p CAGR 6.0% 122.3 1,693
Slide 70: Transformation into a global integrated leader
E. Allianz Global Corporate & Specialty Transformation from stand-alone businesses into a global integrated leader of Corporate & Specialty business AGR Re Decentralized AGCS & AMA1 business model Global Global business model 2002 2003 2004 2005 2006 2007 2008 2009 20102010 - 2012 2010 Merger of New
Slide 71: From heterogeneous systems to an integrated global platform
E. Allianz Global Corporate & Specialty From heterogeneous systems to an integrated global platform § Inherited AGCS IT AGCS Target Operating Model architecture too complex Market Mgmt U/W Operations Finance Claims Primary objective: Salesforce § 200+ applications to Create a high- support 4 major O
Slide 72: Global Change Program ensures global processes and structure
E. Allianz Global Corporate & Specialty Our Global Change Program ensures global processes and structure and increases cost efficiency Transforming regional silo structure … … into a global / functional model § Localized, non-standard processes / IT § Common business / operating model § Replicated c
Slide 73: Global AGCS business model fits our market and client segments
E. Allianz Global Corporate & Specialty Global AGCS business model fits best with our market and client segments Clients across various industries are served by Need for global business model dedicated client teams and key account managers Automotive industry Mechanical / electrical engineering § Gl
Slide 74: Global presence – lead insurer in International Insurance Solutions
E. Allianz Global Corporate & Specialty Global presence – lead insurer with consistent service in International Insurance Solutions § Direct market access § Local market know-how 5/2008 § Local underwriting 5/2010 7/2010 § Global processes & standards § Cooperation with Allianz OEs 2009 Bizet 7/2007
Slide 75: Excellent position in International Insurance Solutions
E. Allianz Global Corporate & Specialty Excellent position in International Insurance Solutions Today, the Allianz Group is represented in more than 70 countries AZ SOEs AGCS SOEs “AGCS” - offices and countries able to lead International Insurance Solutions in addition to service functionality Numbe
Slide 76: Diversified portfolio + underwriting discipline = sustainable profit
E. Allianz Global Corporate & Specialty Diversified portfolio + underwriting discipline = sustainable profit AGCS Global: loss ratio1 68% 68% § Diversified portfolio levels out 63% specific LoB development 62% 62% § Appropriate actions taken to tackle loss leaders e.g., in property, marine and gener
Slide 77: Large and CAT losses leveled out within expectations
E. Allianz Global Corporate & Specialty Specific line of business large / CAT loss leveled out and kept within expectations Large and CAT losses: actual vs. expected1 (in EUR mn) 2008 2009 Q1 2010 450 400 350 45 324 300 36 250 25 202 15 74 204 200 150 10 9 109 2 9 92 100 36 50 46 0 US Total Total To
Slide 78: Management attention focused on core drivers
E. Allianz Global Corporate & Specialty Management attention focused on core drivers AGCS KPI and early warning systems for pro-active management KPI Focus Management action Underwriting § UW discipline (e.g. CR, LR, Loss leaders) § Regular performance § Conservative monitoring and reporting Investm
Slide 79: Positive mid-term outlook despite challenging market conditions
E. Allianz Global Corporate & Specialty Positive mid-term outlook – despite challenging market conditions 2010/11 Mid-term price trend Key indicators by LoB (market) Real GDP growth Industrialized countries Property (in %) Emerging markets 8 6 6 6 5 Liability 3 2 2 2 1 -3 0 Engineering 2007 2008 200
Slide 80: Consequent execution of global strategy continues
E. Allianz Global Corporate & Specialty Consequent execution of global strategy continues 2010 - 2013 Our goal: AGCS § Expansion in Asia, South America and Eastern European Countries footprint § Focus on opportunities in growth “To be the Growth markets and specific LoBs leading global and market §
Slide 81: Key take-aways
E. Allianz Global Corporate & Specialty Key take-aways AGCS is a top global player in Corporate & Specialty business Successful transformation into a truly global carrier Business model guarantees consistency and efficient coordination Strong value proposition for global clients Competitive edge in
Slide 82: Euler Hermes
Wilfried Verstraete, Chairman of the Board of Management Euler Hermes Euler Hermes Capital Markets Day Munich, July 1, 2010
Slide 83: Overview – credit insurance market
F. Euler Hermes Overview – credit insurance market1 Highlights 2009 Structure (Credit insurance & surety/bonding) § Total direct gross premiums: EUR 6.9bn 25% 75% Credit insurance § Total net claims: EUR 5.8bn Surety / bonding § Overall net claims ratio: 84.6% § Total insured exposure: EUR 2,788bn E
Slide 84: Overview – Euler Hermes (1)
F. Euler Hermes Overview – Euler Hermes1 (1) Highlights Turnover by region Customer breakdown2 (by size in % of GEP3) § Euler Hermes is the world's Germany, Austria, Large >100mn premier credit insurer, offering Switzerland 37% 11 Medium 10-100mn 14 29 solutions for the management Northern Small <10
Slide 85: Overview – Euler Hermes (2)
F. Euler Hermes Overview – Euler Hermes (2) Net earned premiums Operating profit (EUR mn) CAGR 2.7% (EUR mn) CAGR -58.1% 1,267 1,360 496 1,111 420 442 1,113 997 145 13 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Combined ratio¹ Risk-adjusted capital² (in %) +43.2%-p (EUR mn) CAGR -0.8% 110.4 1
Slide 86: What does Euler Hermes do?
F. Euler Hermes What does Euler Hermes do? Business lines – turnover in % The service offering of Euler Hermes to Other services Credit insurance its customers include: Debt collection § Credit insurance (risk transfer, risk prevention, debt collection, claims payment) Bonding & 5.6 guarantees 5.1 §
Slide 87: Euler Hermes is number one in countries
F. Euler Hermes Euler Hermes is number one in 18 countries1 USA GCC Belgium Mexico France Poland Germany Italy Czech Republic Austria Portugal Hungary India Morocco Slovakia © Allianz SE 2010 Hong Kong UK Romania (50/50 with Coface) 1) The figures relate to the private credit insurance market F6
Slide 88: The GFC led to a deteriorating economic environment
F. Euler Hermes The GFC1 led to a deteriorating economic environment Change in GDP 2009: -2.1% (+2% in 2008) World trade 2009: Historical recession in 2008-2009 -13% in volume / -20% in value (+2% in 2008) 170 Index 2000:100 5% 4% 150 3% 2% 130 1% 0% 110 -1% Non-OECD countries 90 -2% OECD Source: Na
Slide 89: Did we see the crisis coming?
F. Euler Hermes Did we see the crisis coming? Acceptance rate1 Drop in acceptance rate in U.S. already beginning of 2008 Drop in acceptance rate in France 90% already since the second half 2008 80% 70% 60% 50% U.S. 40% France © Allianz SE 2010 Germany 30% Jan 08 Apr 08 Jul 08 Oct 09 Okt 08 Jan 09 Ap
Slide 90: One Euler Hermes: master the recession and protect capital
F. Euler Hermes “One Euler Hermes1” first objective was to master the recession and protect our capital 1 Vital Short-term stabilization Restore Master Protect Protect & mastering own destiny profitability recession capital franchise 2010-2012 Orga- Implement Legal 2 Simplix TOM nizational restructu
Slide 91: First among peers to start adjusting underwriting
F. Euler Hermes 1 Euler Hermes first among peers to start adjusting its underwriting … Global acceptance rate 0.8 (in %) 0.75 Drop in global acceptance rate 0.7 until May 2009; increase in coverage from June 2009 0.65 54.5% onwards 0.6 0.55 0.5 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09
Slide 92: Adjusting especially on high risk grades
F. Euler Hermes 1 … especially on high risk grades … Portfolio by risk grade December 2008 December 2009 March 2010 Exposure Exposure Exposure Grade % % % (EUR bn) (EUR bn) (EUR bn) Grade 1 18.291 2.74% 14.117 2.51% 13.541 2.45% Grade 2 72.474 10.85% 47.784 8.51% 46.533 8.41% Grade 3 123.258 18.46%
Slide 93: Decline in claims
F. Euler Hermes 1 … which translated into a decline in claims Number of claims (thousands) 5 -45% ytd § Strong deceleration in number of 2010/2009 claims since Q2 2009 4 § Q1 2010 even 20% below Q4 2009 3 § 10 claims >EUR 1mn in 2 Q1 2010 vs 36 in Q1 2009 1 Number of claims 0 Rolling average 6 weeks
Slide 94: Commercial action plans to secure global portfolio value
F. Euler Hermes 1 EH implemented commercial action plans to secure global portfolio value Global overview of portfolio value evolution (in EUR mn) 250 200 150 100 50 0 -50 -100 -150 -200 -250 -300 New Lost Rate Volume Other Total In EUR k business premiums variation variation variations variations 2
Slide 95: One Euler Hermes: operational and transparent structure
F. Euler Hermes “One Euler Hermes1” second objective was to move to an operational and transparent structure 1 Vital Short-term stabilization Restore Master Protect Protect & mastering own destiny profitability recession capital franchise 2010-2012 Orga- Implement Legal 2 Simplix TOM nizational rest
Slide 96: New centralized organizational structure
F. Euler Hermes 2 … including a new centralized organizational structure … Today Heads Board of § The Board of Management Chairman of region Management moved from controlling to Regional Internal audit, Operational operational steering with steering communications, steering HR regions reporting to C
Slide 97: New Target Operating Model
F. Euler Hermes 2 … and the implementation of a new Target Operating Model Finance Support functions Communications Audit HR Legal, tax and compliance Technical area Market Commercial underwriting Risk Management Distribution Market & customer Information intelligence Channel management Strategic ma
Slide 98: One Euler Hermes: capture the upswing of the cycle
F. Euler Hermes Last but not least, “One Euler Hermes1” objective was to capture the upswing of the cycle 1 Vital Short-term stabilization Restore Master Protect Protect & mastering own destiny profitability recession capital franchise 2010-2012 Orga- Implement Legal 2 Simplix TOM nizational restruc
Slide 99: New initiative “Renewal is my job”
F. Euler Hermes 3 A new initiative “Renewal is my job” is launched § “Renewal is my job” launched in Q1 2010 to extend our market leadership in terms of customers’ satisfaction and loyalty § 15,010 customers were contacted since January 2010 Number of lost policies 3.000 3,000 2.500 2,500 So far 5,7
Slide 100: Actions 2010
F. Euler Hermes 3 Actions 2010 Increase retention Increase customer centricity Rate increases Increase exposure Increase productivity/ flexibility Combined ratio <100% © Allianz SE 2010 Operating profit >EUR 100mn F 19
Slide 101: Improvement already seen in Q1 2010 results
F. Euler Hermes Improvement can already be seen in Q1 2010 results … Net earned premiums (EUR mn) Underwriting result (EUR mn) 310 310 267 267 22.2 -45.3 Q1 2009 Q1 2010 Q1 2009 Q1 2010 Operating profit (EUR mn) Net combined ratio1 (%) 114.6 51.3 91.7 © Allianz SE 2010 7.8 Q1 2009 Q1 2010 Q1 2009 Q1
Slide 102: … and will continue in the coming years
F. Euler Hermes … and will continue in the coming years § Combined ratio 2010 below 100% Short-term § Operating profit 2010 above EUR 100mn § ROE of 15% over 10 years § Based on: - average CR 84% Mid-term - average investment return 4% § Productivity/flexibility § Product development & enhancement M
Slide 103: Key take-aways
F. Euler Hermes Key take-aways Euler Hermes (EH) is the world leader in credit insurance EH developed the right tools to enable a faster adaptation to the market situation and manage the business cycles EH mastered the crisis and protected its capital EH is the only credit insurer with stable S&P AA
Slide 104: Glossary
Glossary Capital Markets Day Munich, July 1, 2010
Slide 105: Glossary (1)
Glossary (1) ACAS Allianz Common Applications and Services Advance payment bond A guarantee for the repayment of advance payments or payments made on account AGR Allianz Global Risks AMA Allianz Marine & Aviation AMIC Allianz Marine Insurance Company ASIC Allianz Shared Infrastructure Services CRM C
Slide 106: Glossary (2)
Glossary (2) MENA Middle East and North Africa NPS Net Promoter Score NPW Net premiums written OEM Original Equipment Manufacturer Performance bond A guarantee to secure the supply of goods and the performance of services with or without a warranty period. It may also trigger the repayment of warran
Slide 107: Appendix
Appendix Capital Markets Day Munich, July 1, 2010
Slide 108: Investor Relations contacts
Investor Relations contacts Oliver Schmidt ( +49 89 3800-3963 Peter Hardy ( +49 89 3800-18180 Head of E-mail: E-mail: Investor Relations oliver.schmidt@allianz.com peter.hardy@allianz.com Holger Klotz ( +49 89 3800-18124 Reinhard ( +49 89 3800-17224 Lahusen E-mail: E-mail: holger.klotz@allianz.com r
Slide 109: Financial calendar
Financial calendar August 6, 2010 2nd quarter results 2010 November 10, 2010 3rd quarter results 2010 February 24, 2011 Financial press conference for the fiscal year 2010 February 25, 2011 Analysts’ conference for the fiscal year 2010 March 18, 2011 Annual Report 2010 May 4, 2011 Annual General Mee
Slide 110: Disclaimer
Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary note regarding forward-looking statements The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views