Allianz Se · XETR:ALV
Allianz — Investor Presentation (November 2022)
32 slides from Allianz's investor presentation, Nov 22, 2022
Slide 1: Allianz Investor Relations, Munich, November 22, 2022
Allianz Investor Relations App Apple App Store Google Play Store © Allianz 2022 Munich November 22, 2022
Slide 2: Disclaimer
IFRS 9/17 @ ALLIANZ Disclaimer Figures in this presentation are illustrative and no forecast! Comparison between current IFRS and IFRS 9/17 framework assuming all other things being equal 2
Slide 3: Content
IFRS 9/17 @ ALLIANZ Content Property Life Group Summary Casualty Health 3
Slide 4: Summary: fundamentals unchanged, disclosure improved
IFRS 9/17 @ ALLIANZ Summary: fundamentals unchanged, disclosure improved • Solvency II Limited 1 • Cash flow economic impact • Dividend • Operating profit • Net income Strong 2 • S/h equity fundamentals • CSM1 • RoE • Transparency Improved • Comparability 3 disclosure • Simplicity • Profitability 1)
Slide 5: The new accounting at a glance
IFRS 9/17 @ ALLIANZ The new accounting at a glance Balance sheet (simplified) IFRS 9 IFRS 17 Financial instruments Insurance contracts • Principles for asset classification • Valuation principles Insurance • P&L measurement rules Investments liabilities • Timing of profit recognition • Impacts ~90%
Slide 6: IFRS 9: new classification of investments
IFRS 9/17 @ ALLIANZ IFRS 9: new classification of investments… Investment portfolio Highlights (Illustrative) • Valuation at fair value • Market value changes for >95% of debt portfolio booked in equity, but for debt instruments with special features4 booked through P&L Fixed income • Forward-lookin
Slide 7: Changes P&L impact
IFRS 9/17 @ ALLIANZ …changes P&L impact Asset classification and measurement Highlights (Illustrative) Fair value ~6% through P&L • New: non-consolidated funds2 and debt instruments with special features3 ~18% as well as real estate, JV and associates mostly for participating business Amortized cost
Slide 8: IFRS 17: liabilities comparable to Solvency II
IFRS 9/17 @ ALLIANZ IFRS 17: liabilities comparable to Solvency II Balance sheet liabilities Highlights (Illustrative) • Technical reserves more consistent with Solvency II technical provisions • Risk adjustment reflects non-financial risks not captured by best estimate Technical Technical reserves
Slide 9: Comprehensive s/h capital includes net CSM
IFRS 9/17 @ ALLIANZ Comprehensive s/h capital includes net CSM Group balance sheet equity Highlights (Illustrative) ~95bn ~80bn CSM • Future profits captured in contractual service margin (CSM) (net) • Comprehensive shareholder capital: shareholders’ equity plus net2 CSM ~35bn S/h S/h • S/h equity c
Slide 10: Operating profit on similar level
IFRS 9/17 @ ALLIANZ Operating profit on similar level Operating profit Highlights (Illustrative) similar level • Group operating profit on similar level • Better reflection of economic changes, particularly interest rates • Operating profit on similar level Short-term P/C upside from P/C • Short-ter
Slide 11: Net income on similar level
IFRS 9/17 @ ALLIANZ Net income on similar level Shareholders’ net income IFRS 9/17 Highlights (Illustrative) Operating profit On similar level – short-term upside in P/C from rising interest rates Non-operating items More volatile Realized gains/losses and impairments1 New: excludes net harvesting r
Slide 12: Content
IFRS 9/17 @ ALLIANZ Content Property Life Group Summary Casualty Health 12
Slide 13: P/C balance sheet with discounted reserves
IFRS 9/17 @ ALLIANZ P/C balance sheet with discounted reserves P/C balance sheet liabilities Highlights (Illustrative) For 99% of P/C business the simplified Premium Allocation Approach (PAA) is applied1, leading to only small conceptual changes versus current IFRS • Lower level subject to extent of
Slide 14: P/C underwriting result higher
IFRS 9/17 @ ALLIANZ P/C underwriting result higher Underwriting result Highlights (Illustrative) Current IFRS ~3bn Underwriting result +0.6bn – 0.9bn Discounting Impact from discounting1 depends on interest rate level Approach similar to current premium deficiency +/- Loss component reserve; some sh
Slide 15: P/C combined ratio in detail
IFRS 9/17 @ ALLIANZ P/C combined ratio in detail Combined ratio Highlights (Illustrative) Similar or lower level1 ~94 ~93-94 New topline: CR calculation based on gross instead of net premiums earned • Favorable impact from gross instead of net view as well as discounting of Loss ratio ~67 ~67-68 res
Slide 16: P/C investment result lower
IFRS 9/17 @ ALLIANZ P/C investment result lower Operating investment result Highlights (Illustrative) Current IFRS ~3bn Operating investment result Consistent with operating investment result +/-0 Investment income under current IFRS (interest & similar income minus investment expenses) Negative imp
Slide 17: P/C operating profit on similar level
IFRS 9/17 @ ALLIANZ P/C operating profit on similar level Operating profit IFRS 9/17 Operating profit contribution (Illustrative) Total business volume Corresponds to total revenues under current IFRS (GPW+fee income) Insurance revenues Similar to gross premiums earned under current IFRS Op. insuran
Slide 18: Content
IFRS 9/17 @ ALLIANZ Content Property Life Group Summary Casualty Health 18
Slide 19: L/H balance sheet shows future profits
IFRS 9/17 @ ALLIANZ L/H balance sheet shows future profits L/H balance sheet liabilities Highlights (Illustrative) • PVFCF1 represents discounted expected cash flows to policyholders and attributable expenses Present • Explicit add-on for non-financial risks to best estimate reserves value of Insura
Slide 20: L/H CSM movement integral part of disclosure
IFRS 9/17 @ ALLIANZ L/H CSM movement integral part of disclosure Contractual service margin movement Highlights (Illustrative) Future profits beginning of period CSM (beginning of period) ~55bn as shown in balance sheet +4 – 5bn CSM@inception Future profits from new business production Expected Unwi
Slide 21: L/H new business value higher
IFRS 9/17 @ ALLIANZ L/H new business value higher Value of new business Highlights (Illustrative) SII VNB ~4% ~2.5bn Current KPI for new business value; basis for NBM NBM ~+1bn Tax / minorities IFRS 9/17 view is before tax and minorities Slightly higher diversification benefit +0.2 – 0.3bn Risk adju
Slide 22: L/H operating profit on similar level
IFRS 9/17 @ ALLIANZ L/H operating profit on similar level Operating profit IFRS 9/17 Operating profit contribution (Illustrative) CSM release Release of earned profits from in-force business 4.5 – 5.0bn Release of risk adjustment Release of risk buffer ~0.5bn Loss component and variances1 Minor impa
Slide 23: Content
IFRS 9/17 @ ALLIANZ Content Property Life Group Summary Casualty Health 23
Slide 24: Summary: fundamentals unchanged, disclosure improved
IFRS 9/17 @ ALLIANZ Summary: fundamentals unchanged, disclosure improved • Solvency II Not impacted Limited 1 • Cash flow Not impacted economic impact • Dividend No change, still based on adjusted net income • Operating profit No major change, slightly higher in the short-term • Net income Similar l
Slide 25: Timeline
IFRS 9/17 @ ALLIANZ Timeline today 2022 2023 October November December January February March April May June Conference call FY 2022 results Annual report 1Q 2023 results (Introduction) (Current IFRS) (Current IFRS) (IFRS 9/17) IFRS 9/17 @ Allianz Outlook based on IFRS 9/17 opening 1st IFRS 9/17 IFR
Slide 26: Appendix
IFRS 9/17 @ ALLIANZ Appendix 26
Slide 27: Investment accounting and profit recognition
IFRS 9/17 @ ALLIANZ Investment accounting and profit recognition Asset class Criterion Measurement >95% of fixed income assets Fixed SPPI-test2: Simple debt Fair value through other comprehensive yes income with P&L recycling income definition met? Derivatives no <5% of fixed income assets Fair valu
Slide 28: P/C at a glance
IFRS 9/17 @ ALLIANZ P/C at a glance KPIs Simplified P&L Measurement model3 (% of GPW) Insurance revenues (similar to GPE) Growth Total business volume1 Gross claims PAA ~99% Gross expenses Profitability Combined ratio VFA / BBA ~1% Reinsurance result Operating insurance service result Earnings Opera
Slide 29: L/H at a glance
IFRS 9/17 @ ALLIANZ L/H at a glance KPIs Simplified P&L Measurement model1 (% of LRC2) CSM release Growth VNB / CSM Release risk adjustment (new business) (in-force) VFA ~79% Variances Profitability New business margin BBA / modified BBA ~21% Loss component PAA 0% Non-attributable cost Earnings Oper
Slide 30: IFRS 17 measurement models
IFRS 9/17 @ ALLIANZ IFRS 17 measurement models For each contract one measurement model is applicable based on contractual features Type of business IFRS 17 measurement model Pure non-participating risk business (short-term or long-term) Premium Allocation Approach (PAA) or Building Block Approach (B
Slide 31: Glossary
IFRS 9/17 @ ALLIANZ Glossary BBA Building block approach – measurement model, details see previous page Modified BBA Modified building block approach – measurement model, details see previous page CSM Contractual service margin – balance sheet liability, containing deferred discounted future profits
Slide 32: Cautionary note regarding forward-looking statements
DISCLAIMER Cautionary note regarding forward-looking statements This document includes forward-looking state- dustry generally, (iv) the frequency and severity No duty to update ments, such as prospects or expectations, that of insured loss events, including those resulting Allianz assumes no obliga