Allianz SE · XETR:ALV
Allianz — FY2009 Earnings Presentation
187 slides from Allianz's earnings presentation, Feb 26, 2010
Slide 1: The way forward
The way forward Analysts’ conference February 26, 2010 Please note: Presentations based on 2009 preliminary figures
Slide 2: Agenda
Agenda The way forward Michael Diekmann A Group financial results 2009 Oliver Bäte B FIT for the New Normal Paul Achleitner C Glossary © Allianz SE 2010 Appendix Investor Relations contacts Financial calendar Disclaimer
Slide 3: The way forward
Michael Diekmann, CEO The way forward Analysts’ conference February 26, 2010
Slide 4: Today's agenda
A. The way forward Today’s agenda Economy Operating profit Outlook Rationale Management Structure compensation Strategy Priorities The way forward Result 2009 © Allianz SE 2010 Starting position Status quo A2
Slide 5: Today's agenda: Status quo
A. The way forward – status quo Today’s agenda: Status quo Outlook Management compensation The way forward Result 2009 © Allianz SE 2010 Starting position Status quo A3
Slide 6: Solid performance in difficult 2009
A. The way forward – status quo Solid performance in difficult 2009 … Revenues up 5.2% to EUR 97.4bn Operating profit almost stable (-2%) at EUR 7.2bn Net profit from continued operations1 up 18.3% to EUR 4.7bn Shareholders’ equity up 19.2% to EUR 40.2bn Solvency ratio up 7%-points to 164% Proposed
Slide 7: Based on well balanced business portfolio
A. The way forward – status quo … based on well balanced business portfolio … Segments1 Regions Distribution Operating profit in % Operating profit in % Insurance revenues in % 6% 6% 17% 10% 21% 14% 36% 49% 32% 34% 31% 34% 9% 1% P/C Germany Tied agents L/H Western Europe Proprietary Other prop. netw
Slide 8: World class operations
A. The way forward – status quo … world class operations … Excellent business positions1 Top P/C insurer worldwide Top 5 in Life business worldwide Top 5 asset manager worldwide Global top 5 insurer by market cap Strong rating (AA, stable outlook)2 Largest global Assistance provider EULE
Slide 9: Strong and stable performance over the cycle
A. The way forward – status quo ... and a strong and stable performance over the cycle 2007 2008 2009 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating profit (in EUR bn) DJ STOXX 600 2.9 2.6 2.6 2.7 2.2 2.2 1.9 2.0 1.8 1.6 1.4 0.9 Solvency ratio (in %)1 191 166 155 158 155 157 155 156 162 164 148 154
Slide 10: Today's agenda: The way forward
A. The way forward Today’s agenda: The way forward Outlook Management compensation Strategy Priorities The way forward © Allianz SE 2010 Status quo A8
Slide 11: Building blocks of Allianz strategy (1/5)
A. The way forward Building blocks of Allianz strategy … (1/5) Capital Reinsurance Investments Europe Germany NAFTA Growth- Broker- Regions + South Austria markets markets America Suisse Markets Global AGCS1 lines Operations Asset Management Credit Assistance + Worldwide Care Automotive Strategic ra
Slide 12: Building blocks of Allianz strategy (2/5)
A. The way forward Building blocks of Allianz strategy … (2/5) Capital Reinsurance Investment portfolio1 Investments Cash/Other: 1% EUR 409bn Markets Real Estate: 2% 1 Equities: 8% 49% AAA 14% AA Operations Debt instruments: 89% 24% A 8% BBB 1% Non investment grade 4% Not rated Strategic rationale I
Slide 13: Building blocks of Allianz strategy (3/5)
A. The way forward Building blocks of Allianz strategy … (3/5) Capital Reinsurance Capital management Investments Solvency ratio Risk capital Markets Target 170% range 150% 164% 13% Corporate 52% P/C (2009) Stress buffer 50% 6% AM Operations Minimum 100% 29% L/H Strategic rationale Implication Str
Slide 14: Building blocks of Allianz strategy (4/5)
A. The way forward Building blocks of Allianz strategy … (4/5) Capital Reinsurance Investments External reinsurance Mega Cat Markets Super Cat Mega Cat Cat bonds, swaps ARI1 Super Cat instruments Operations Group Capacity Pool Internal reinsurance Allianz Re Retentions based on OE retention risk bea
Slide 15: Building blocks of Allianz strategy (5/5)
A. The way forward Building blocks of Allianz strategy … (5/5) Capital Central Target operating Global Reinsurance Investments functions model (TOM) initiatives Markets IT frames Sustainability Application Operational Trans- management formation Program Operations Shared services Custome
Slide 16: Supporting a clear mission
A. The way forward … supporting a clear mission Capital Europe Germany NAFTA Growth- Broker- + South Austria markets markets America Suisse Reinsurance Investments AGCS Asset Management Credit Assistance + Worldwide Care Automotive Operations © Allianz SE 2010 Our mission Integrity and superior perf
Slide 17: Superior performance for all stakeholders
A. The way forward Superior performance for all stakeholders (Pay-out 2009) Clients EUR 82.9bn Shareholders Distributors EUR 1.9bn EUR 11.6bn Other Employees © Allianz SE 2010 EUR 2.4bn EUR 9.9bn A 15
Slide 18: Going forward: Top global priorities
A. The way forward Going forward: Top global priorities Capital Solvency 2 Investments Markets Reinsurance Low interest Permanent Counterparties rates review Operations © Allianz SE 2010 Complexity reduction A 16
Slide 19: Top global priorities: Improve P/C profitability
A. The way forward Top global priorities: Improve P/C profitability Illustrative example of heat map Portfolio overview Ø 2006-2008 2009 Action implemented Segment % of LoB Tied agents Brokers Tied agents Brokers Motor 1 Private cars 248 42 ! 175 29 1 Sustainability: 90% 96% 96% 91% Tariff increas
Slide 20: Top global priorities: Distribution management
A. The way forward Top global priorities: Distribution management Current channel mix Customer management Emphasis on compliance 6% Tied agents Ensuring consistent service and Proprietary Other prop. networks delivery via company-wide feedback 14% mechanisms (NPS, mystery shopping) Direct 36% Ch
Slide 21: Today's agenda: Management compensation
A. The way forward – management compensation Today’s agenda: Management compensation Outlook Rationale Management Structure compensation The way forward © Allianz SE 2010 Status quo A 19
Slide 22: Execution of strategy supported by compensation system
A. The way forward – management compensation Execution of strategy fully supported by compensation system Mid-term Short-term Share strategy targets price Mid-term Annual Stock-based bonus bonus compensation Management compensation © Allianz SE 2010 A 20
Slide 23: New compensation system strengthens sustainable development
A. The way forward – management compensation New compensation system strengthens sustainable development Old New structure structure Structure of Base salary 25% 25% 1/4 fix Monthly payments targets Annual Annual target 37% 25% bonus achievement Group 50% Division 25% Mid-term 3/4 Mid-term target ac
Slide 24: Mid-term targets business division
A. The way forward – management compensation Mid-term targets business division Illustrative example for target review 12% 24% BD achieved target profit level, but growth remained below target Portfolio matrix Peer comparison reveals below 3% Target average growth Growth Significant price dete
Slide 25: Today's agenda: Outlook
A. The way forward – outlook Today’s agenda: Outlook Economy Operating profit Outlook Management compensation The way forward © Allianz SE 2010 Status quo A 23
Slide 26: Industry and investors have to prepare for the New Normal
A. The way forward – outlook Industry and investors have to prepare for the New Normal 2010 2011 2012 Moderate recovery of Need for fiscal Return to “normal” world economy consolidation inflation rates New Normal What matters? Continued globalization but lower growth ¨ Capital strength Higher risk a
Slide 27: Outlook 2010: Solid operating profit
A. The way forward – outlook Outlook 2010: Solid operating profit (EUR bn) 1.1 – 1.3 +0.5bn 2.2 – 2.8 ~7.2 2009 operating profit -0.9 to -1.1 supported by positive -0.5bn market developments Still, similar operating 4.0 – 5.0 profit level aspired in 2010 Deviation range of Group result reflect
Slide 28: Key take-aways
A. The way forward - outlook Key take-aways Significant scale and diversification advantages Resilient and proven business model Conservative investment portfolio Strong capital base with limited sensitivity Transparent and tight capital management Attractive underlying profitability Well positioned
Slide 29: Today's presentations
A. The way forward - outlook Today’s presentations The way forward Michael Diekmann A Group financial results 2009 Oliver Bäte B FIT for the New Normal Paul Achleitner C Glossary © Allianz SE 2010 Appendix Investor Relations contacts Financial calendar Disclaimer A 27
Slide 30: Group financial results 2009
Oliver Bäte, Member of the Board of Management Group financial results 2009 Analysts’ conference February 26, 2010
Slide 31: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B2
Slide 32: Highlights: strong growth across key performance metrics
B. Group financial results 2009 Highlights: strong growth across key performance metrics Revenues up 5.2% to EUR 97.4bn, driven by double digit growth in L/H and AM Net income up 13.2% to EUR 4.7bn1 and operating profit of EUR 7.2bn despite a tough year for P/C Shareholders’ equity up 19.2% to
Slide 33: Solid results for 2009
B. Group financial results 2009 Solid results for 2009 (EUR mn) 12M 07 12M 08 12M 09 +5.2% Total revenues 97.7 97.4 (EUR bn) 92.6 -2.0% Operating 10,320 profit1 7,329 7,182 +13.2% Net income/loss 7,991 from continuing 4,186 4,740 operations © Allianz SE 2010 Net income/loss EUR +6.7bn (after minorit
Slide 34: Strong capitalization
B. Group financial results 2009 Strong capitalization Shareholders’ equity1 Conglomerate solvency (EUR mn) (EUR bn) Available funds2 Solvency ratio 47,753 +19.2% Requirement +7%-p Unrealized 40,166 gains/losses 10,470 158% 157% 164% 5,457 33,684 45.6 Revenue 2,011 reserves 8,962 6,074 3,104 34.8 31.
Slide 35: Economic solvency ratio of 159%
B. Group financial results 2009 Economic solvency ratio of 159% (EUR bn) Risk bearing funds Solvency ratio Calculated at a 3bps confidence level Risk capital (comparable to “AA”) Rise in available funds in 2009 based on 191% 140% 159% higher shareholders’ equity and a higher 63.7 “PVFP” not acco
Slide 36: Well capitalized to withstand market shocks
B. Group financial results 2009 Well capitalized to withstand market shocks Conglomerate solvency ratio Impact on IFRS equity1 Target range: 150% - 170% Estimation in EUR bn 100% Ratio as of 31.12.09 164% Equity markets -30% 149% -3.42 Interest rate +100bps 164% -4.0 Interest rate -100bps 164% +3.8
Slide 37: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B8
Slide 38: 4Q: strong improvement across the board
B. Group financial results 2009 4Q: strong improvement across the board (EUR mn) 4Q 07 4Q 08 4Q 09 Δ 4Q 09/08 +10.7% development Total revenues1 25.5 25.6 23.0 (EUR bn) P/C: flat L/H: EUR +2.1bn AM: EUR +0.6bn +132.5% Operating 2,601 profit 2,048 881 P/C: positive trend L/H: EUR +0.9bn A
Slide 39: 4Q: P/C – improvements continue
B. Group financial results 2009 4Q: P/C – improvements continue (EUR mn) Operating profit Operating profit drivers Combined ratio (in %) -3.3% +79 1,209 1,169 -93 -26 1,671 1,681 1,496 1,261 1,209 1,169 969 1,031 895 Operating Under- Invest- Other Operating profit writing ment profit 91.2 96.2 95.3
Slide 40: 4Q: L/H – operating profit of EUR 557mn
B. Group financial results 2009 4Q: L/H – operating profit of EUR 557mn (EUR mn) Operating profit Operating profit drivers1 EUR +859mn +874 +75 557 990 859 703 614 589 557 402 -302 218 -90 Operating Techn. Investm. Expense Operating profit result result result profit 4Q 08 4Q 09 4Q 09 248 256 53 -30
Slide 41: 4Q: AM – record quarter with profit of EUR 576mn
B. Group financial results 2009 4Q: AM – record quarter with profit of EUR 576mn (EUR mn) Operating profit Operating profit drivers Cost-income ratio (in %) +164.2%1 +541 +27 576 576 -210 218 391 368 281 241 246 Operating Net fee & Other Operat. Operating 218 211 profit comm. inc. income expenses pr
Slide 42: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 13
Slide 43: Revenues with strong growth of 5.2% in 2009
B. Group financial results 2009 Revenues with strong growth of 5.2% in 2009 (EUR bn) Total revenues1 +5.2% 97.7 97.4 92.6 Total Internal (in %) growth growth2 44.3 43.4 42.5 2009 +5.2 +5.1 P/C -2.0 -0.9 L/H +11.3 +10.4 49.4 45.6 50.8 AM +27.5 +20.3 3.3 2.9 3.7 0.63 0.63 0.53 2007 2008 2009 © Allianz
Slide 44: Operating profit of EUR 7.2bn
B. Group financial results 2009 Operating profit of EUR 7.2bn (EUR mn) Property/Casualty Life/Health 2009 Δ 09/08 -28.0% +132.5% 6,340 5,647 P/C 4,064 -28.0% 4,064 2,995 2,808 1,208 L/H 2,808 +132.5% 12M 07 08 09 07 08 09 AM 1,401 +51.3% Asset Management Corporate and Other +51.3% n/m CO1 -1,028 n/m
Slide 45: Non-operating items
B. Group financial results 2009 Non-operating items (EUR mn) 2007 2008 2009 Δ 09/08 2008 2009 Realized gains/losses Realized gains/losses 2,656 1,617 and impairments of 2,085 -640 623 +1,263 - Equities 2,623 1,339 investments (net) - Debt securities -26 196 - Real estate 59 82 Interest expense -1,05
Slide 46: Net income of EUR 4.7bn
B. Group financial results 2009 Net income of EUR 4.7bn1 (EUR mn) 2007 2008 2009 Δ 09/08 Operating profit 10,320 7,329 7,182 -147 Non-operating items 243 -1,856 -1,854 +2 Income before taxes 10,563 5,473 5,328 -145 Income taxes -2,572 -1,287 -588 +699 Net income from continuing operations 7,991 4,18
Slide 47: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 18
Slide 48: Corporate and Other
B. Group financial results 2009 Corporate and Other (EUR mn) Operating loss Operating loss components EUR -705mn -323 -295 -323 -519 -134 -35 -1,028 -17 Operating Holding Banking Alternative Conso Operating loss & Treasury Investments loss 2008 Δ 2009/08 2009 -1,028 2009 -849 -165 -13 -1 2008 -330 -
Slide 49: Corporate and Other: Holding & Treasury
B. Group financial results 2009 Corporate and Other: Holding & Treasury (EUR mn) Holding & Treasury operating loss drivers Δ 09/08 F/X swing driven by USD positions to a large extent offset by F/X hedges, recorded within both operating and non-operating -330 result Negative net interest result d
Slide 50: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 21
Slide 51: P/C: summary
B. Group financial results 2009 P/C: summary Selective underwriting leads to revenue reduction of 0.9% on internal basis Operating profit of EUR 4.1bn and combined ratio of 97.4% despite a 1%-p lower run-off, lower yields and special effects at some large OEs ! Administrative expenses reduced
Slide 52: P/C: top line reflects selective underwriting
B. Group financial results 2009 P/C: top line reflects selective underwriting (EUR mn) GPW (sel. OEs) 2007 2008 2009 Δ09/081 Gross premiums written (EUR bn) Germany2 9,425 9,344 9,235 -1.2% Countries Speaking German Switzerland 1,267 1,241 1,309 -0.1% -2.0% Italy 5,229 4,740 4,190 -10.5% Europe I Sp
Slide 53: P/C: operating profit of EUR 4.1bn
B. Group financial results 2009 P/C: operating profit of EUR 4.1bn (EUR mn) Operating profit Operating profit drivers 79 4Q -64 3Q -28.0% Detail: underwriting 5,647 -487 2Q 6,340 5,647 -256 1Q -728 -728 4,064 -578 4,064 -277 Operating Under- Invest- Other1 Operating profit writing ment1 profit 2007
Slide 54: P/C: combined ratio of 97.4%
B. Group financial results 2009 P/C: combined ratio of 97.4% (in %) Combined ratio 2007 2008 2009 Combined ratio Countries Speaking German Germany1,2 92.5 95.5 98.7 Switzerland 93.7 93.1 93.5 97.4 Italy 94.8 96.9 100.8 93.7 95.4 Europe I Spain 91.5 90.6 89.7 South America 99.0 98.5 98.4 France 97.3
Slide 55: P/C: accident year loss ratio of 72.4%
B. Group financial results 2009 P/C: accident year loss ratio of 72.4% (in %) 9-quarter overview a.y. loss ratio Development 12M 2009/2008 +1.8 73.4 72.7 +1.5%-p 72.4 72.3 72.4 -0.6 72.1 71.5 71.8 -0.2 71.8 71.5 -0.4 (9Q-Ø) 69.8 72.0 71.2 71.6 71.5 69.4 70.9 70.5 -1.5%-p 70.0 Δ 2009/2008 68.8 68.6 I
Slide 56: P/C: development of combined ratio of large OEs
B. Group financial results 2009 P/C: development of combined ratio showing impact of large OEs in 2009 (in %) Main drivers: Combined ratio 95.4 Tap water claims in 2009 & claims leakage due to changes in 12M 08 claims operations & reserve strengthening for earlier accident years AZ Sach Positive
Slide 57: P/C: accident year loss ratio development of large OEs
B. Group financial results 2009 P/C: accident year loss ratio development NatCat & large claims of large OEs in 2009 (in %) Excl. NatCat & large claims Quarterly development 2009 a.y. LR Action programs 1Q 2Q 3Q 4Q 12M 09 75.8 70.7 68.3 65.7 Price increases AZ Sach 70.1 Portfolio cleaning (esp.
Slide 58: P/C: expenses flat despite significant investments
B. Group financial results 2009 P/C: expenses flat despite significant investments (EUR mn) in % of NPE 10,631 10,478 10,540 First time consolidation of operations in Turkey Admin. in July 2008 (full year delta in 2009 EUR +52mn) expenses 3,739 3,447 3,255 Positive one-off effect in 1Q 2008 from
Slide 59: P/C: operating investment income impacted by lower yields
B. Group financial results 2009 P/C: operating investment income impacted by lower yields Operating investment income (EUR mn) -15.6% 3,780 3,695 3,117 in % of NPE 9.8 9.7 8.2 2007 2008 2009 Interest & similar income1,2 4,071 4,182 3,508 Other3 9 -233 -153 © Allianz SE 2010 Investment expenses4 -300
Slide 60: P/C: investment portfolio at EUR 90bn
B. Group financial results 2009 P/C: investment portfolio at EUR 90bn Asset base (EUR bn)1 Current yield5 (in %) Other2 +3.7% Equities Cash Debt securities Equities 95.2 4.8 4.5 4.6 Debt 6.9 90.2 sec. 0.83 87.0 4.1 4.0 6.5 6.9 16.5 4.4 4.53 5.0 2.8 6.4 71.0 69.2 74.3 20074 2008 2009 2007 2008 2009 ©
Slide 61: P/C: overall slight price recovery in the market
B. Group financial results 2009 P/C: overall slight price recovery in the market Pricing overview for selected major operations1 (in %) Price impact Nominal tariff Estimated 2010 Expert assessment of the market Selected OEs on YTD increase pricing trend renewals2 for 20093 Soft Motor market (esp.
Slide 62: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 33
Slide 63: L/H: summary
B. Group financial results 2009 L/H: summary Revenues grow by 11.3% to EUR 50.8bn, highest ever Operating profit grows by 132.5% to EUR 2.8bn Investment income of EUR 14.0bn and ! operating asset base grows 12% to EUR 385bn NBV increased to EUR 613mn, and NBM rises to 2.4% in the second half
Slide 64: L/H: double digit growth
B. Group financial results 2009 L/H: double digit growth (EUR mn) Stat. prem. Statutory premiums (EUR bn) 2007 2008 2009 Δ09/081 (selected OEs) +11.3% Germany Life 13,512 13,487 15,049 +11.6% Countries Speaking German 50.8 Germany Health 3,123 3,120 3,176 +1.8% 49.4 45.6 Switzerland 992 1,205 1,364
Slide 65: L/H: solid operating profit
B. Group financial results 2009 L/H: solid operating profit (EUR mn) Operating profit Operating profit drivers1 +132.5% +1,726 +8 2,808 2,995 2,808 1,208 -134 1,208 Operating Technical Investment Expense Operating profit result result result profit 2008 2009 2007 2008 2009 2009 888 2,046 -126 © Alli
Slide 66: L/H: EUR 14bn investment income
B. Group financial results 2009 L/H: EUR 14bn investment income Operating investment income (EUR mn) +81.6% 14,023 14,030 7,724 2007 2008 2009 Interest & similar income1,2 13,043 13,489 13,844 Other3 1,620 -5,182 808 © Allianz SE 2010 Investment expenses4 -640 -583 -622 1) French health business rec
Slide 67: L/H: asset base increases by 12%
B. Group financial results 2009 L/H: asset base increases by 12% Asset base (EUR bn)1 Current yield4 (in %) +12.3% Other2 Equities Cash Debt securities Equities 317.6 Debt 7.9 4.9 sec. 6.0 4.7 4.7 280.2 282.9 20.9 4.0 5.8 4.43 7.7 3.6 8.03 3.0 22.2 41.2 282.8 228.8 245.0 2007 2008 2009 2007 2008 200
Slide 68: L/H: net inflows of EUR 6.3bn
B. Group financial results 2009 L/H: net inflows of EUR 6.3bn (EUR bn) Operating asset base1 OAB 343.8 Net flows 2009 as of 31.12.20082 Germany Life +2.5 Net inflows +6.3 Germany Health +0.5 Consolidation France -0.2 Thailand +1.8 Italy +0.3 Interest & +13.8 Other Western Europe +0.5 similar income3
Slide 69: L/H: strong growth in margins and value
B. Group financial results 2009 L/H: strong growth in margins and value New business margin1 Value of new business1 Embedded value1 (VNB in % of PV of NB premiums) (EUR mn) (EUR mn) MCEV 2.4 2.4 changes: 1.8 +11,738 286 24,283 0.1 6013 2009 1Q2 2Q2 3Q2 4Q 175 PV of NB premiums1 (EUR mn) 146 12,545 2
Slide 70: L/H: new business value and margin more than double
B. Group financial results 2009 L/H: new business value and margin more than double Value of new business and New business margin (in %) new business margin VNB1 NBM1 3.0 3.0 (EUR mn) (in %) 2.8 Avg. 2.6 20082 20093 20082 20093 2.4 2.4 Europe 654 724 2.7% 2.7% 1.8 Asia-Pacific 21 71 0.7% 2.0% USA -3
Slide 71: L/H: embedded value recovers strongly
B. Group financial results 2009 L/H: embedded value1 recovers strongly Embedded value a/ min, EUR mn 8,197 601 24,283 - 30 2,135 5 12,762 613 2172 Operating earnings EUR 2,753mn or 22% Starting VNB Expected Operating Economic Other non- Net Ending Embedded business var. & var. & operating var. & cap
Slide 72: L/H: AZ Life operating profit of USD 798mn
B. Group financial results 2009 L/H: AZ Life operating profit of USD 798mn1 (USD mn) Fixed / indexed annuities operating profit Variable annuities operating profit 70 772 978 63 149 -15 -50 -276 -177 2008 Credit Impair- 2009 2008 Net M&E Other 2009 spreads & ments / impact of fees2 int. rates other
Slide 73: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 44
Slide 74: AM: summary
B. Group financial results 2009 AM: summary Total assets under management now exceed EUR 1,200bn 3rd party AuM of EUR 926bn 3rd party net inflows at record EUR 84bn ! Outstanding operating profit of EUR 1.4bn Excellent investment performance at PIMCO and equities business impacted by a tur
Slide 75: AM: strong growth in assets under management and income
B. Group financial results 2009 AM: strong growth in assets under management and income Assets under management (EUR bn) Net fee and commission income (EUR mn) 3rd party AuM +31.6% +24.9% internal growth: 3rd party AuM driven Internal +27.3% 1,202 margin1 (in bps) growth: +17.8% Total AuM2 1,010 951
Slide 76: AM: record 3rd party net inflows in 2009
B. Group financial results 2009 AM1: record 3rd party net inflows in 2009 3rd party net flow development (EUR bn) 82.8 65.8 37.1 31.3 27.5 11.4 -0.3 2003 2004 2005 2006 2007 2008 2009 Net flows in % of 3rd party 5.4 6.0 12.0 5.2 1.6 0.0 12.3 © Allianz SE 2010 AuM bop 1) AGI only B 47
Slide 77: AM: outstanding operating profit of EUR 1.4bn
B. Group financial results 2009 AM: outstanding operating profit of EUR 1.4bn (EUR mn) Operating profit Operating profit drivers Cost-income ratio (in %) +51.3% +79 +716 Internal growth: 1,401 +44.4% -320 1,356 1,401 926 926 58.4 68.0 62.0 Operating Net fee & Other Operat. Operating profit comm. inc
Slide 78: AM: fixed income products performed strongly
B. Group financial results 2009 AM: fixed income products performed strongly Fixed income 3rd party AuM Performance1 Operating profit (EUR bn) (Outperforming AuM in %) (EUR mn) +30.9% +48.6% 785 87 1,186 83 586 600 838 798 48 Net flows +12.4 +10.7 +91.0 31.12.07 31.12.08 31.12.09 2007 2008 2009 2007
Slide 79: AM: equities impacted by a turbulent year
B. Group financial results 2009 AM: equities impacted by a turbulent year Equities 3rd party AuM Performance1 Operating profit (EUR bn) (Outperforming AuM in %) (EUR mn) +36.8% -78.1% 172 79 147 140 62 63 102 64 Net flows -0.4 -10.9 -7.5 14 31.12.07 31.12.08 31.12.09 2007 2008 2009 2007 2008 2009
Slide 80: AM: cost-income ratio at 62%
B. Group financial results 2009 AM: cost-income ratio at 62% (EUR mn) Administrative expenses Administrative expenses drivers Cost-income ratio (in %) 58.4 68.0 62.0 +16.3% +175 2,288 2,288 +97 +48 1,968 1,968 1,903 +23.6% Personnel expenses 1,217 1,170 1,446 2008 cominvest F/X Run 2009 effects rate
Slide 81: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 52
Slide 82: Summary: strong growth across key performance metrics
B. Group financial results 2009 Summary: strong growth across key performance metrics Revenues up 5.2% to EUR 97.4bn, driven by double digit growth in L/H and AM Net income up 13.2% to EUR 4.7bn1 and operating profit of EUR 7.2bn despite a tough year for P/C Shareholders’ equity up 19.2% to EU
Slide 83: Agenda
Agenda Highlights 4Q results Group Corporate and Other P/C L/H Asset Management Summary © Allianz SE 2010 Additional information B 54
Slide 84: Changes in accounting and presentation in 2009
B. Group financial results 2009 Changes in accounting and presentation in 2009 Operating segments and new “Corporate and Other“: Asset Management now presented stand-alone Banking and Alternative Investments are included in the new “Corporate and Other” segment This structure better reflects t
Slide 85: MCEV methodology update
B. Group financial results 2009 MCEV methodology update 2008 VNB and NBM methodology: 2008 value of new business and new business margins are as published based on 2008 year-end parameters The methodology used in 2008 valued all business sold in the year using swap rates as at 31 December 2008 a
Slide 86: New segment reporting structure in 4Q 2009
B. Group financial results 2009 New segment reporting structure in 4Q 2009 Structure until 3Q 2009 Financial Services (FS) P/C L/H Corporate Asset Banking Altern. Investm. Management Management Corporate and Other © Allianz SE 2010 P/C L/H Asset Management Holding & Banking Alternative Treasury Inve
Slide 87: Group: result by segments overview
B. Group financial results 2009 Group: result by segments overview (EUR mn) Corporate and P/C L/H AM Consolidation Total Other 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 Total revenues 43.4 42.5 45.6 50.8 2.9 3.7 0.6 0.5 0.1 -0.1 92.6 97.4 (EUR bn) Operating
Slide 88: Group: key figures
B. Group financial results 2009 Group: key figures (EUR mn) 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Delta 12M 12M 12M 2007 2008 2008 2008 2008 2009 2009 2009 2009 4Q 09/08 2007 2008 2009 Total revenues 25.6 26.9 21.5 21.1 23.0 27.7 22.2 22.0 25.5 +2.5 97.7 92.6 97.4 (EUR bn) Operating profit 2,601 2,226 2,659 1,
Slide 89: Group: net income reconciliation
B. Group financial results 2009 Group: net income reconciliation (EUR mn) 2007 2008 2009 Δ 09/08 1) Continuing operations Net income from continuing operations after minority interests 7,316 3,967 4,692 +725 (old definition) Change of minority interests (on continuing operations) due to +675 +219 +4
Slide 90: RoRAC on continuing operations
B. Group financial results 2009 RoRAC on continuing operations (after minority interests, EUR mn) 20091 Avg. RAC2 RoRAC3 Group RoRAC3 P/C 20,346 13.0% -3.5%-p L/H 13,368 15.2% 23.4 18.6 AM 1,736 53.1% 15.1 Corporate 4,294 -29.6% and Other Group -10,156 n/m 20071 20081 20091 effects4 Avg. RAC5 27,799
Slide 91: 4Q: revenues
B. Group financial results 2009 4Q: revenues (EUR bn) Total revenues1 27.7 26.9 25.5 25.6 23.0 22.2 22.0 21.5 21.1 Total Internal (in %) 9.5 13.9 growth growth2 13.7 8.9 9.0 9.5 4Q 09 +10.7 +12.4 9.8 10.2 10.8 15.0 P/C -1.5 +0.4 12.3 13.1 13.0 11.8 10.8 15.2 10.7 L/H +15.7 +16.8 9.4 AM +78.2 +88.8 0
Slide 92: P/C: key figures
B. Group financial results 2009 P/C: key figures (EUR mn) 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Delta 12M 12M 12M 2007 2008 2008 2008 2008 2009 2009 2009 2009 4Q 09/08 2007 2008 2009 Gross premiums written 9.5 13.7 9.8 10.8 9.0 13.9 9.5 10.2 8.9 -0.1 44.3 43.4 42.5 (EUR bn) Operating profit 1,671 1,496 1,681 1
Slide 93: P/C: quarterly operating investment income development
B. Group financial results 2009 P/C: quarterly operating investment income development Operating investment income (EUR mn) -11.8% 1,073 948 855 888 851 786 782 791 693 in % of NPE 8.9 9.7 11.4 9.6 8.1 9.1 8.4 8.1 7.4 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 -14.1% Interest & similar income1,2 970
Slide 94: P/C: RoRAC of major OEs
B. Group financial results 2009 P/C: RoRAC of major OEs (EUR mn, b/ min) Risk-adjusted capital1 RoRAC (in %) 2008 2009 Δ in % 2008 2009 Δ in %-p 2 Countries Speaking German Germany 3,202 2,862 -10.6% 26.2% 12.1% -14.1%-p Switzerland 542 503 -7.2% 31.9% 23.2% -8.7%-p Italy 2,051 2,158 5.2% 19.0% 9.3%
Slide 95: L/H: key figures
B. Group financial results 2009 L/H: key figures (EUR mn) 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q Delta 12M 12M 12M 4Q 2008 2007 2008 2008 2008 2009 2009 2009 2009 4Q 09/08 2007 2008 2009 Statutory premiums 15.0 12.3 10.7 9.4 13.1 13.0 11.8 10.8 15.2 +2.1 49.4 45.6 50.8 (EUR bn) Operating profit 614 589 703 218 -30
Slide 96: L/H: quarterly operating investment income development
B. Group financial results 2009 L/H: quarterly operating investment income development Operating investment income (EUR mn) +1,149.8% 4,393 3,568 3,741 3,737 2,710 2,700 2,015 2,159 299 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 +2.0% Interest & similar income1,2 3,218 3,130 3,759 3,235 3,365 3,261 3
Slide 97: L/H: operating investment income – details
B. Group financial results 2009 L/H: operating investment income – details (EUR mn) 2007 2008 2009 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Interest & similar income1 3,218 3,130 3,759 3,235 3,365 3,261 3,611 3,541 3,431 Investment expenses -184 -140 -120 -110 -213 -138 -152 -151 -181 Other 534 -280 -939 -1,110 -
Slide 98: L/H: RoRAC of major OEs
B. Group financial results 2009 L/H: RoRAC of major OEs (EUR mn, b/ min) Risk-adjusted capital1 RoRAC (in %) 2008 2009 Δ in % 2008 2009 Δ in %-p German Speaking Germany Life 4,027 4,074 1.2% 20.7% 17.4% -3.3%-p Countries 2 Germany Health 175 598 241.7% 55.6% 19.7% -35.9%-p Switzerland 805 473 -41.2%
Slide 99: L/H: EV overview
B. Group financial results 2009 L/H: EV overview (a/ min, EUR mn) MCEV Embedded value (EV) VNB (NBM in %1) Increase of EUR 12bn in line with recovery of capital market conditions 5,308 300 3.3% from last year end in particular Germany Life 8,155 340 3.5% favorable interest rates movements 1,092 15
Slide 100: L/H: new business
B. Group financial results 2009 L/H: new business (EUR mn) Value of New business Present value of Recurring Single new business margin new business premium premium premium 1 2 1 Avg. 1 2 3 1 2 1 2 12M 08 12M 09 12M 08 2 12M 08 12M 09 Δ% 12M 08 12M 09 12M 08 12M 09 12M 09 Germany Life4 300 340 3.3% 3
Slide 101: L/H: new business quarterly values
B. Group financial results 2009 L/H: new business quarterly values (EUR mn) 1 1 1 1 2 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 Avg. VNB NBM VNB NBM VNB NBM VNB NBM F/X VNB NBM Germany Life 71 3.2% 77 3.7% 77 4.0% 115 3.2% 0 340 3.5% Germany Health 6 1.6% 3 1.7% 3 2.1% 3 2.0% 0 16 1.8% France 22 1.9% 25
Slide 102: L/H: embedded value sensitivity analysis
B. Group financial results 2009 L/H: embedded value sensitivity analysis (EUR mn, a/min) Economic factors Non economic factors Drop in risk free volatilities -5% mortality Liquidity equity -10% -10% Base case +25% +25% premium death longevity value by -100bp +100bp expense lapse swaption equity +10b
Slide 103: L/H: value of new business sensitivity analysis
B. Group financial results 2009 L/H: value of new business sensitivity analysis1 (EUR mn, a/min) Economic factors Non economic factors Drop in risk free volatilities -5% mortality Liquidity Base equity -10% -10% 2 +25% +25% premium death longevity case value by -100bp +100bp expense lapse swaption e
Slide 104: L/H: shareholder value not accounted for in IFRS equity
B. Group financial results 2009 L/H: shareholder value not accounted for in IFRS equity (a/min, EUR mn) 12M 08 12M 09 Value of inforce in EV 2,662 11,940 Adjust for 1 : IFRS DAC / VOBA -17,348 -15,194 Difference in life- and unallocated profit sharing reserves 11,191 9,799 Shareholder value of unrea
Slide 105: L/H: consistent economic assumptions for EV
B. Group financial results 2009 L/H: consistent economic assumptions are applied for EV across Allianz Group Key parameters Specification 2009 (2008) EUR USD CHF KRW Risk free rates (1 year zero coupon rate based on 1.0% (3.1%) 0.6% (2.0%) 0.4% (1.1%) 2.4% (3.3%) swap rate) Risk free rate (10 year z
Slide 106: L/H: definition of regional splits for MCEV reporting
B. Group financial results 2009 L/H: definition of regional splits for MCEV reporting Germany Allianz Leben AG, life subsidiaries are included at equity German Health German Health business: “Allianz Private Krankenversicherung” France Allianz France life operation in France including partnerships I
Slide 107: L/H: MCEV review
B. Group financial results 2009 L/H: MCEV review “Towers Watson has undertaken a review of the MCEV results and their opinion will be provided in the full disclosure document.“ Allianz will publish its Embedded Value Report 2009 together with the Annual Report 2009 on March 19, 2010. © Allianz SE 20
Slide 108: AM: key figures
B. Group financial results 2009 AM: key figures (EUR mn) 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Delta 12M 12M 12M 2007 2008 2008 2008 2008 2009 2009 2009 2009 4Q 09/08 2007 2008 2009 Operating revenues 879 730 738 700 726 716 780 899 1,294 +568 3,259 2,894 3,689 Operating profit 391 241 281 186 218 211 246 368
Slide 109: AM: 3rd party AuM
B. Group financial results 2009 AM: 3rd party AuM1 (EUR bn) AuM development AuM client mix AuM regional breakdown2 Retail 926 926 Institutional Other3 24 31.12.08 703 765 74 765 Asia-Pacific 703 297 and rest 40 703 Internal 152 Net inflows growth: 64 31 +84 +27.3% Europe 280 52 185 ex Germany 116 12
Slide 110: AM: AGI cost-income-ratio outstanding
B. Group financial results 2009 AM: AGI cost-income-ratio outstanding Cost-income ratio AGI vs. peers1 (in %) AGI 4th Quartile Peer average 3rd Quartile 2nd Quartile 1st Quartile 140 135 130 120 110 1063 100 90 87 83 81 782 76 76 80 70 70 79 71 72 60 69 68 63 624 50 56 56 © Allianz SE 2010 40 4Q 07
Slide 111: AM: AGI 3rd party net inflows
B. Group financial results 2009 AM: AGI 3rd party net inflows Net flows AGI vs. peers1 in % of AuM bop AGI 4th Quartile Peer average 3rd Quartile 2nd Quartile 1st Quartile 6.0 13 12 5.0 4.2 11 4.0 2.8 2.6 10 3.0 3.6 9 2.0 1.0 1.0 0.8 8 1.0 0.1 0.0 7 0 0.5 6 0.0 0.3 0.0 -1.0 -2.0 5 -1.2 -2.0 -1.7 4 -
Slide 112: Corporate and Other: key figures
B. Group financial results 2009 Corporate and Other: key figures (EUR mn) 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Delta 12M 12M 12M 2007 2008 2008 2008 2008 2009 2009 2009 2009 4Q 09/08 2007 2008 2009 Total revenues (Banking) 167 143 156 125 131 117 124 119 157 +26 630 555 517 Operating profit Holding & Treasury
Slide 113: Group: breakdown of profit consolidation
B. Group financial results 2009 Group: breakdown of profit consolidation (EUR mn) Net income 2009 +50 +37 L/H +11 -39 -26 CO © Allianz SE 2010 Intra-group Intra-group Total dividends gains consolidation B 84
Slide 114: Group asset allocation
B. Group financial results 2009 Group asset allocation (EUR bn) Corporate and P/C L/H AM Consolidation Group1 Other Balance sheet items 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 Investments Equities 2 6.4 5.0 22.2 20.9 0.1 0.1 5.2 4.8 0.0 0.0 33.9 30.8 Debt
Slide 115: Average AuM P/C and L/H: basis for yield calculation
B. Group financial results 2009 Average AuM P/C and L/H: basis for yield calculation (EUR bn) P/C L/H Balance sheet items 31.12.08 31.12.09 Average 31.12.08 31.12.09 Average Investments Equities 1 6.4 5.0 5.7 22.2 20.9 21.6 Debt sec. 51.0 58.0 54.5 153.6 182.5 168.1 Cash and cash 4.5 4.4 4.5 8.0 6.0
Slide 116: Investment result
B. Group financial results 2009 Investment result (EUR mn) Corporate und P/C L/H AM Consolidation Group1 Sonstiges 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 12M 08 12M 09 Operating investment result Interest and similar income2 4,182 3,508 13,489 13,844 63 30 531 228 -141
Slide 117: Goodwill
B. Group financial results 2009 Goodwill (EUR bn) Goodwill per segment +0.5 12.0 2008 2.3 +0.5 P/C 2009 2.3 11.2 -0.1 -0.1 2008 2.3 L/H 2009 2.3 2008 6.3 AM 2009 6.7 2008 0.3 CO 2009 0.7 Goodwill Additions Currency Impairment1 Reclass.2 Goodwill © Allianz SE 2010 31.12.08 translation 31.12.09 2008 1
Slide 118: Shareholders' equity
B. Group financial results 2009 Shareholders’ equity (EUR mn) Foreign Unrealized Paid-in Revenue currency Shareholders' Minority gains and Total equity capital reserves translation equity interests losses (net) adjustments Balance as of 31.12.07 28,321 12,618 -3,656 10,470 47,753 3,628 51,381 Total
Slide 119: Comprehensive income
B. Group financial results 2009 Comprehensive income (EUR mn) 12M 07 12M 08 12M 09 Net income (after tax, before minority interests) 8,714 -2,187 4,345 F/X translation adjustments -1,926 -259 398 Reclassification to net income 0 2 516 Changes arising during the year -1,926 -261 -118 Available-for-sa
Slide 120: Revaluation reserve of EUR 20.8bn
B. Group financial results 2009 Revaluation reserve of EUR 20.8bn (EUR bn) Off balance sheet Revaluation On balance sheet reserve Shareholders’ Policyholders’ share share 20.8 Real estate 2.0 (39.0%) 2.2 (42.7%) 5.1 5.8 Associated enterprises, joint ventures 8.8 0.0 Minorities 0.0 (0.7%) 0.01 16.3 1
Slide 121: Conglomerate solvency: details as of 31.12.09
B. Group financial results 2009 Conglomerate solvency1: details as of 31.12.09 (EUR bn) Available funds Required capital Shareholders’ equity1 38.5 21.2 Dividend accruals -1.9 Goodwill, P/C 6.8 other intangibles -14.8 Commerzbank shares -0.7 Subordinated bonds, participation +6.6 certific. +5.1 L/H
Slide 122: Risk capital breakdown
B. Group financial results 2009 Risk capital breakdown (EUR bn, b/ min, Group diversified) Risk capital by risk categories Risk capital by segments Δ Δ 30.3 30.4 +0.4% 30.3 30.4 +0.4% Market -10.5% P/C 14.3 12.9 15.8 15.7 -0.8% risk 3.5 -5.2% Credit 3.8 risk 7.8 +11.6% L/H 8.2 8.7 +5.9% Actuarial 7.
Slide 123: Earnings per share
B. Group financial results 2009 Earnings per share (EUR) Basic EPS Diluted EPS From continuing operations From continuing operations 16.53 16.26 10.41 10.37 8.81 8.59 2007 2008 2009 2007 2008 2009 From discontinued operations From discontinued operations 1.47 -14.24 -0.88 1.45 -14.06 -0.87 © Allianz
Slide 124: Equity market scenarios
B. Group financial results 2009 Equity market scenarios (as of 31.12.09, EUR bn) Expected total P/L impact1 … … and resulting unrealized gains / losses on AFS equity securities in shareholders’ equity1 Equity market scenarios2: 3.8 0.0 2.8 -0.1 -0.1 -0.2 -0.2 -0.2 1.9 -0.3 1.2 Total P/L impact Unrea
Slide 125: Net equity exposure and solvency
B. Group financial results 2009 Net equity exposure and solvency (EUR bn) 31.12.07 31.12.08 31.12.09 45.6 34.8 31.8 16.7 11.5 13.6 23.3 13.0 12.5 28.9 20.3 21.2 Net equity Available Net equity Available Net equity Available exposure funds for exposure funds for exposure funds for FCD calc.1 FCD calc
Slide 126: FIT for the New Normal
Paul Achleitner, Member of the Board of Management FIT for the New Normal Analysts’ conference February 26, 2010
Slide 127: Financing Investments Transactions
C. Fit for the New Normal F inancing I nvestments T ransactions © Allianz SE 2010 C2
Slide 128: Financing and investment highlights 2009
C. Fit for the New Normal Financing and investment highlights 2009 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Financing/ Divestments Closing of Dresdner EUR 1.5bn 10-year 4.75% senior bond Bank sale EUR 1.2bn sale of 50% of ICBC stake EUR 750mn Closing EUR 121mn redemption Redemption/ of C
Slide 129: Capital structure with prudent use of leverage
C. Fit for the New Normal Capital structure with prudent use of leverage (EUR bn) Debt / Equity ratio1 17.9% 13.9% 20.6% 18.5% 14.0% 7.9 7.9 7.2 9.3 9.3 47.0 56.8 51.4 37.2 42.3 9.7 9.0 12.2 8.6 7.2 2005 2006 2007 2008 2009 © Allianz SE 2010 Equity2 Hybrid bonds Senior debt 1) Group excluding bank s
Slide 130: Maturity profile of external bonds
C. Fit for the New Normal Maturity profile of external bonds (EUR bn) Outstanding bonds1 Maturity structure1 14.7 5.8 13.5 12.7 9.3 7.9 9.3 2.0 0.5 1.5 1.5 1.5 0.9 1.0 5.4 4.3 4.2 0.5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Perpetual 2007 2008 2009 Senior bond
Slide 131: Attractive dividend policy
C. Fit for the New Normal Attractive dividend policy Dividend per share (EUR) 5.50 4.103 3.80 3.50 Dividend yield2 1.9% 2.8% 3.5% 3.3% 5.6% 2.00 Balance between payout and solvency Payout ratio 19% 23% 31% 40%1 40%1 Target solvency range 150 - 170% Current dividend yield ~5% 2005 2006 2007 200
Slide 132: Financing Investments Transactions
C. Fit for the New Normal F inancing I nvestments T ransactions © Allianz SE 2010 C7
Slide 133: Strong contribution of investment result to operating profit
C. Fit for the New Normal Strong contribution of investment result to operating profit (EUR bn)1 7.3 7.2 Overall increased asset base compensated for lower current yield Investment Investment 4.0 5.1 Lower equity impairments compared result 55% result 72% to 2008, however also lower dividend yie
Slide 134: Conservative asset allocation
C. Fit for the New Normal Conservative asset allocation1 Group investments and loans as of 31.12.2009 (previous year) Real estate2 Cash / Other3 2% (2%) 1% (2%) Equities 8% (9%) Focus of portfolio discussion Management of duration Investment performance Debt instruments Quality of fixed income
Slide 135: Duration management
C. Fit for the New Normal Duration management Duration in years Assets Liabilities Assets Life: Selective duration extension via forward 2009 3.8 3.9 P/C swaps (narrowing of duration gap), 2008 3.8 3.8 particularly in German Life P/C: 2009 5.8 7.4 Benefits of duration mismatches L/H (going conce
Slide 136: High quality fixed income portfolio
C. Fit for the New Normal 89% High quality fixed income portfolio Investment portfolio By type of issuer Total By rating4 EUR 364.8bn Government 36% AAA 49% Pfandbrief & Covered bonds 26% AA 14% Corporate 16% A 24% Banks 9% BBB 8% ABS/MBS1 6% Non-investment grade 1% Other2 7% Not rated 4%* *) mostly
Slide 137: Fixed income portfolio – limited valuation issues
C. Fit for the New Normal Fixed income portfolio – limited valuation issues Assets FV/AC1 2009 Aggr. 5-yr. impairments impairment EUR bn (%) EUR mn EUR mn Government 130.5 103% 0 0 Covered bonds 94.9 104% 0 0 Corporate 57.8 104% -115 -311 Banks 33.4 102% -84 -367 ABS 20.8 99% -33 -55 Other 27.4 104%
Slide 138: Government bond allocation concentrated in G7 countries
C. Fit for the New Normal 32% Government bond allocation concentrated Investment in G7 countries portfolio By country Total By rating EUR 130.5bn1 Germany 23% AAA 44% Italy 20% AA 20% France 13% A 28% Spain 5% BBB 5% UK 2% Non-investment grade1% Rest of Europe 25% Not rated 2% USA 3% Rest of World 9
Slide 139: Net exposure to sovereign risk
C. Fit for the New Normal 30% Net exposure to sovereign risk Investment (EUR bn) portfolio Net1 in % of F/I (Net) Italy 7.6 6.7 Germany 7.2 6.3 France 4.1 3.6 U.S. 2.8 2.4 Korea 2.2 1.9 Spain 1.8 1.6 Netherlands 1.4 1.2 UK 1.3 1.2 Sw itzerland 1.2 1.0 Belgium 1.1 1.0 Australia 1.1 1.0 Luxemburg 1.0
Slide 140: Investment performance 2009 – Overview
C. Fit for the New Normal Investment performance 2009 – Overview IFRS excluding change in unrealized IFRS including change in unrealized 4.1% 5.8% 4.5% 17.6% 5.8% 7.8% 4.4% 7.0% Debt Equities Other Total Debt Equities Other Total securities securities © Allianz SE 2010 C 15
Slide 141: Equity portfolio
C. Fit for the New Normal 8%1 Equity portfolio Investment portfolio By regions Total By industry EUR 30.6bn2 Germany 24% Financials 28% Eurozone Consumer 14% ex. Germany 38% Basic materials 10% Europe ex. Eurozone 15% Utilities 7% NAFTA 11% Industrial 6% Rest of World 12% Energy 5% Funds and Other 3
Slide 142: Group equity gearing
C. Fit for the New Normal Group equity gearing1 (EUR bn) Reconciliation of net equity exposure Equity gearing (as of 31/12/2009) 34.12 Corporate 0.7 0.6 0.5 0.4 4.8 AM 0.7 L/H P/C 29.5 30.1 23.3 23.5 -16.3 12.5 -3.8 13.0 12.5 -1.1 -0.4 4.3 0.5 -0.5 4.6 5.1 3.1 Gross Policy- Def. Hedge Econ. Net 2006
Slide 143: Return on investment: Hartford
C. Fit for the New Normal Return on investment: Hartford Instruments Fair values Performance since acquisition (USD mn) Warrants +16.8% Cash inflows (USD) 69.3mn at USD 25.25 strike + 175mn coupons Equals 20% stake in The + 13mn dividends 2,920 Hartford if fully exercised + 200mn dilution compen
Slide 144: Return on investment: ICBC
C. Fit for the New Normal Return on investment: ICBC Instruments Fair values Performance since acquisition (EUR mn) +270.2% 3,065 Shares 1,203 Cash inflows (EUR) 6.4bn shares bought + 1,203mn net proceeds of 50% sale Various hedges in place + 145mn dividends Internal rate of return (IRR)1 45.9%
Slide 145: Real estate
C. Fit for the New Normal 2%1 Real estate Investment portfolio By regions Total By sectors EUR 15.5bn2 France 31% Office 61% Germany 28% Residential 22% Switzerland 15% Retail 8% Rest of Europe 21% Other/mixed 9% Rest of World 5% By currency Net AFS unrealized gains / losses3 (EUR bn) EUR 76% CHF 15
Slide 146: Economic and market scenarios
C. Fit for the New Normal Economic and market scenarios Global Position = inflation “We are here today” 7% Real assets USD Proven Emerging markets: crisis policy ”turbo” engine 5% effectiveness of growth Probability 10% Bull case Policy 3% Successful Probability 5% overkill policy making 2% Probabil
Slide 147: Tactical asset allocation 2010
C. Fit for the New Normal Tactical asset allocation 2010 Current Trend Comment Capital Charges share Solvency II Note (current version) Corporate bonds allocation rising in high quality segment Govern. Exempt from charge Debt Selective on government bonds 89% securities Securitized and mortg
Slide 148: Financing Investments Transactions
C. Fit for the New Normal F inancing I nvestments T ransactions © Allianz SE 2010 C 23
Slide 149: Transactions
C. Fit for the New Normal Transactions External: We stay disciplined Internal: Ongoing housekeeping Minority buy-out in Brazil: Alignment governance and legal structure Acquisition of 14% in Allianz Seguros from Itau Unibanco - AGCS Operations in 7 countries legally transferred to AGCS - AGI Ope
Slide 150: Excursus: Environmental, Social and Governance
C. Fit for the New Normal Excursus: Environmental, Social and Governance © Allianz SE 2010 C 25
Slide 151: Perspectives on sustainable development: Allianz4Good
C. Fit for the New Normal Perspectives on sustainable development: Allianz4Good Sustainable development is an integral part of our business model as an insurer and investor Responsible business behavior is being specifically promoted Allianz4Good is our internal Center of Competence tasked to
Slide 152: Allianz4Good contributions – Examples
C. Fit for the New Normal Allianz4Good contributions – Examples Microinsurance Financial inclusion and education at the basis of the pyramid 3.5mn people insured in Africa, Asia, Latin America Corporate “My Finance Coach” volunteering Social operational excellence program Disaster risk red
Slide 153: Well positioned to capture green market opportunities
C. Fit for the New Normal Well positioned to capture “green market opportunities” Green auto insurance “Prestige auto premiere“ - free hybrid upgrade (USA), “Environmental reward car insurance“ - reduced rates for hybrid cars or low emission vehicles, “Eco-Bonus” - discounts for holders of a publi
Slide 154: Continued external recognition for sustainability performance
C. Fit for the New Normal Continued external recognition for Allianz sustainability performance - Examples Listed since 2000, excellent rating position since 6 years Ranking 98% of best score and recognized as leader in several areas, e.g., “business risks and opportunities”, “access to insurance wi
Slide 155: Additional information
Additional information Analysts’ conference February 26, 2010
Slide 156: The Solvency II puzzle: High quality of capital structure
C. Fit for the New Normal The Solvency II puzzle: High quality of capital structure (EUR bn) 1.0 Dated hybrids Grandfathering expected Hybrids 6.6 5.6 Undated hybrids Open issues: - Solvency I: dated vs. undated hybrids - Solvency II: new requirements, XX tiering system Available funds 28.2 - Gr
Slide 157: Conservative asset allocation
C. Fit for the New Normal Conservative asset allocation1 Group investments and loans as of 31.12.2009, (previous year) Real estate2 Cash / Other3 2% (2%) 1% (2%) Equities 8% (9%) Focus of portfolio discussion Management of duration Investment performance Quality of fixed income portfolio Debt
Slide 158: High quality fixed income portfolio
C. Fit for the New Normal 89% High quality fixed income portfolio Investment portfolio By type of issuer Total By rating4 EUR 364.8bn Government 36% AAA 49% Pfandbrief & Covered bonds 26% AA 14% Corporate 16% A 24% Banks 9% BBB 8% ABS/MBS1 6% Non-investment grade 1% Other2 7% Not rated 4%* *) mostly
Slide 159: Fixed income portfolio – limited valuation issues
C. Fit for the New Normal Fixed income portfolio – limited valuation issues Assets FV/AC1 2009 Aggr. 5-yr. impairments impairment EUR bn (%) EUR mn EUR mn Government 130.5 103% 0 0 Covered bonds 94.9 104% 0 0 Corporate 57.8 104% -115 -311 Banks 33.4 102% -84 -367 ABS 20.8 99% -33 -55 Other 27.4 104%
Slide 160: Critical exposures well managed
C. Fit for the New Normal Critical exposures well managed Exposure / FV/AC Total performance1 Comment Rating (%) (EUR mn) (in %) 11% Gross Net2 CMBS / RMBS 1% 96% +4.8% - Conservative structures, mainly in CMBS, 7% +454 the most senior tranches (87% AAA) RMBS, 5% +294 - Average price of 93% of not
Slide 161: Government bond allocation concentrated in G7 countries
C. Fit for the New Normal 32% Government bond allocation concentrated Investment in G7 countries portfolio By country Total By rating EUR 130.5bn1 Germany 23% AAA 44% Italy 20% AA 20% France 13% A 28% Spain 5% BBB 5% UK 2% Non-investment grade1% Rest of Europe 25% Not rated 2% USA 3% Rest of World 9
Slide 162: Exposure to sovereign risk
C. Fit for the New Normal 30% Exposure to sovereign risk Investment (EUR bn) portfolio Gross Net1 in % of F/I (Gross) Germany 30.1 7.2 8.2 Italy 25.7 7.6 7.0 France 16.6 4.1 4.6 Spain 6.9 1.8 1.9 Switzerland 4.5 1.2 1.2 U.S. 4.4 2.8 1.2 Netherlands 4.4 1.4 1.2 Austria 4.3 0.9 1.2 Korea 3.7 2.2 1.0 B
Slide 163: Fixed income portfolio – Covered bonds
C. Fit for the New Normal 23% Fixed income portfolio – Covered bonds Investment portfolio By country of collateral pool Total By rating EUR 94.9bn Germany 63% AAA 95% Spain 12% AA 4% France 10% A 0% UK 3% BBB 0% Ireland 2% Non-investment grade 0% Switzerland 1% Not rated 1% Sweden 1% Rest of World 8
Slide 164: Fixed income portfolio – Corporate
C. Fit for the New Normal 14% Fixed income portfolio – Corporate Investment portfolio By region Total By rating EUR 57.8bn Eurozone 41% AAA 4% Europe ex Eurozone 11% AA 16% USA 42% A 37% Rest of World 6% BBB 31% Non-investment grade 4% Not rated2 8% By segment (EUR bn) Net AFS unrealized gains / los
Slide 165: Fixed income portfolio – Banks
C. Fit for the New Normal 8% Fixed income portfolio – Banks … Investment portfolio By country Total By rating EUR 33.4bn Germany 16% AAA 12% UK 12% AA 25% France 8% A 53% Italy 7% BBB 8% Rest Eurozone 19% Non-investment grade 1% Europe ex Eurozone 7% Not rated 1% USA 19% Rest of World 12% By segment
Slide 166: Limited exposure to Tier 1 bank debt
C. Fit for the New Normal 3% … thereof limited exposure to Tier 1 Investment bank debt portfolio Lower Tier 2 Upper Tier 2 Tier 1 Comments Lower Tier 2 assets have fixed maturities < 10 years and man- datory coupons Upper Tier 2 assets generally have deferr- able, but not cancel- able coupons Gr
Slide 167: Fixed income portfolio – ABS
C. Fit for the New Normal 5% Fixed income portfolio – ABS Investment portfolio By type of category Total By rating EUR 20.8 U.S. Agency 38% AAA 88% CMBS 27% AA 3% RMBS 12% A 3% Credit Card 4% BBB 1% Auto 2% Non-investment grade 5% Other1 17% Not rated <1% By segment (EUR bn) Net AFS unrealized gains
Slide 168: High quality CMBS, RMBS and low structured credit exposure
C. Fit for the New Normal 2% High quality CMBS, RMBS and low Investment structured credit exposure portfolio CMBS RMBS Structured credit USA 2008 vintage 3% 2007 2001 12% 12% 2007 2005 2006 20% and prior 8% 37% NL Rest of Europe 2006 2002- 35% IRL/SP/UK 2005 68% Net EUR 3.5bn Net EUR 0.8bn Net EUR 0
Slide 169: Equity portfolio
C. Fit for the New Normal 8%1 Equity portfolio Investment portfolio By regions Total By industry Germany 24% EUR 30.6bn2 Financials 28% Eurozone Consumer 14% ex Germany 38% Basic materials 10% Europe ex Eurozone 15% Utilities 7% NAFTA 11% Industrial 6% Rest of World 12% Energy 5% Funds and Other 30%
Slide 170: Group equity gearing
C. Fit for the New Normal Group equity gearing1 (EUR bn) Reconciliation of net equity exposure Equity gearing (as of 31/12/2009) 34.12 Corporate 0.7 0.6 0.5 0.4 4.8 AM 0.7 L/H P/C 29.5 30.1 23.3 23.5 -16.3 12.5 -3.8 13.0 12.5 -1.1 -0.4 4.3 0.5 -0.5 4.6 5.1 3.1 Gross Policy- Def. Hedge Econ. Net 2006
Slide 171: Real estate
C. Fit for the New Normal 2%1 Real estate Investment portfolio By regions Total By sectors EUR 15.5bn2 France 31% Office 61% Germany 28% Residential 22% Switzerland 15% Retail 8% Rest of Europe 21% Other/mixed 9% Rest of World 5% By currency Net AFS unrealized gains / losses3 (EUR bn) EUR 76% CHF 15
Slide 172: Glossary
Glossary Analysts’ conference February 26, 2010
Slide 173: Glossary (1)
Glossary (1) ABS Asset-backed securities: Structured bonds or notes collateralized by a pool of assets such as loans, bonds or mortgages. Given that characteristics of the collaterals vary considerably (with regard to asset class, quality, maturity, etc.), asset-backed securities do so as well ADAG
Slide 174: Glossary (2)
Glossary (2) CEE Central and Eastern Europe CEIOPS Committee of European Insurance and Occupational Pensions Supervisors CFI Customer Focus Initiative: Use of customer loyalty – measured by the Net Promoter Score – as a compulsory key performance indicator for Allianz Group’s operating entities CLO
Slide 175: Glossary (3)
Glossary (3) Dividend payout ratio Represents the fraction of net income after minorities that is paid to its shareholders in dividends Duration Duration is a measure of the average (cash-weighted) term-to-maturity of bonds Earnings per share (EPS) Ratio calculated by dividing the consolidated profi
Slide 176: Glossary (4)
Glossary (4) FCD Financial conglomerates directive: European regulation for the supervision of financial conglomerates and financial groups involved in cross-sectoral business operations F/I Fixed income securities FIA Fixed indexed annuities are insurance contracts that guarantee fixed returns to t
Slide 177: Glossary (5)
Glossary (5) Harvesting rate (Realized gains and losses (net) + impairments on investments (net)) / average investments and loans at book value (excluding income from financial assets/liabilities carried at fair value) HF Hedge funds Hybrid bonds Securities that combine characteristics of bonds and
Slide 178: Glossary (6)
Glossary (6) L/H Life and health insurance L/H operating profit drivers The objective of the Life/Health operating profit driver analysis is to explain movements in IFRS results by analyzing underlying drivers on a L/H segment consolidated basis. Technical result: Technical result comprises risk res
Slide 179: Glossary (7)
Glossary (7) MCEV Market Consistent Embedded Value is a measure of the consolidated value of shareholders’ interest in a life portfolio. The Market Consistent Embedded Value is defined as Net asset value (NAV) + Present value of future profits - Time value of financial options and guarantees (O&G) -
Slide 180: Glossary (8)
Glossary (8) Operating profit Earnings from ordinary activities before income taxes and minority interests in earnings, excluding, as applicable for each respective segment, all or some of the following items: Income from financial assets and liabilities held for trading (net), realized gains/losses
Slide 181: Glossary (9)
Glossary (9) Risk-adjusted capital (RAC) Risk-adjusted capital is the maximum of local solvency and risk capital based on internal model Risk capital Minimum capital required to ensure solvency over the course of one year with a certain probability which is linked to our rating ambition Risk-weighte
Slide 182: Glossary (10)
Glossary (10) Stress tests Conglomerate solvency ratio stress tests are based on the following scenarios: - Credit loss / migration: scenario based on probabilities of default in 1932, migrations adjusted to mimic recession and assumed recovery rate of 30% - Credit spread: 100bps increase in the cre
Slide 183: Glossary (11)
Glossary (11) Total equity Represents the sum of shareholders’ equity and minority interests Total revenues Represent the sum of P/C segment’s gross premiums written, L/H segment’s statutory premiums, operating revenues in Asset Management and total revenues in Corporate and Other (Banking) Unrealiz
Slide 184: Appendix
Appendix Analysts’ conference February 26, 2010
Slide 185: 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 reinhard.
Slide 186: Financial calendar
Financial calendar March 19, 2010 Annual Report 2009 May 5, 2010 Annual General Meeting May 12, 2010 1st quarter results 2010 August 10, 2010 2nd quarter results 2010 November 10, 2010 3rd quarter results 2010 February 24, 2011 Financial press conference for the 2010 fiscal year February 25, 2011 An
Slide 187: 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