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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rules 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
for the period ended June 30, 2008
Commission file Number: 1-15154
ALLIANZ SE
Königinstrasse 28
80802 Munich
Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
THIS REPORT ON FORM 6-K (EXCEPT FOR ANY NON-GAAP FINANCIAL MEASURE AS SUCH TERM IS DEFINED IN REGULATION G UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM S-8 (FILE NO. 333-13462 AND NO. 333-139900) AND ON FORM F-3 (FILE NO. 333-151308) OF ALLIANZ SE AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED. FOR THE AVOIDANCE OF DOUBT, THE DISCLOSURE CONTAINING ANY NON-GAAP FINANCIAL MEASURE CONTAINED IN THE ATTACHED REPORT, INCLUDING WITHOUT LIMITATION REFERENCES TO “CONSOLIDATED OPERATING PROFIT” AND OPERATING PROFIT AS IT RELATES TO THE ALLIANZ GROUP, INCLUDING THE TABLES ENTITLED “OPERATING PROFIT” ON PAGE 2 AND PAGE 4 (AS IT RELATES TO THE ALLIANZ GROUP) AND THE SECTION ENTITLED “RECONCILIATION OF CONSOLIDATED OPERATING PROFIT AND INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS IN EARNINGS”, AND TO ANY OTHER NON-GAAP FINANCIAL MEASURES, IS NOT INCORPORATED BY REFERENCE INTO THE ABOVE-MENTIONED REGISTRATION STATEMENTS FILED BY ALLIANZ SE.
Table of Contents
Table of Contents
Group Management Report | ||||
Executive Summary and Outlook | 2 | |||
Property-Casualty Insurance Operations | 12 | |||
Life/Health Insurance Operations | 18 | |||
Banking Operations | 24 | |||
Asset Management Operations | 28 | |||
Corporate Activities | 32 | |||
Balance Sheet Review | 34 | |||
Other Information | 38 |
Condensed Consolidated Interim Financial Statements for the Second Quarter and the First Half of 2008 | ||||||
Detailed Index | 41 | |||||
Condensed Consolidated Interim Financial Statements | 42 | |||||
Notes to the Condensed Consolidated Interim Financial Statements | 47 |
Allianz Share
Development of the Allianz share price since January 1, 2008
indexed on the Allianz share price in€
Source: Thomson Financial Datastream
Current information on the development of the Allianz share price is available on the internet at www.allianz.com/share.
Basic Allianz share information
Share type | Registered share with restricted transfer | |||
Denomination | No-par-value share | |||
Stock exchanges | All German stock exchanges, London, | |||
Paris, Zurich, Milan, New York | ||||
Security Codes | WKN 840 400 | |||
ISIN DE 000 840 400 5 | ||||
Bloomberg | ALV GY | |||
Reuters | ALVG.DE |
Investor Relations
We endeavor to keep our shareholders up-to-date on all company developments. Our Investor Relations Team is pleased to answer any questions you may have.
Allianz SE
Investor Relations
Koeniginstrasse 28
80802 Muenchen
Germany
Fax: + 49 89 3800 3899
E-Mail: investor.relations@allianz.com
Internet:www.allianz.com/investor-relations
For telephone enquiries, our “Allianz Investor Line” is available:
+ 49 1802 2554269
+ 49 1802 ALLIANZ
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Allianz Group Key Data
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2008 | 2007 | Change year | 2008 | 2007 | Change from | |||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||
Total revenues1) | € mn | 22,037 | 24,337 | (9.5)% | 49,690 | 53,660 | (7.4)% | |||||||||||||||||||
Operating profit2) | € mn | 2,104 | 3,288 | (36.0)% | 3,960 | 6,158 | (35.7)% | |||||||||||||||||||
Net income | € mn | 1,542 | 2,140 | (27.9)% | 2,690 | 5,380 | (50.0)% | |||||||||||||||||||
SEGMENTS | ||||||||||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||||
Gross premiums written | € mn | 9,842 | 9,982 | (1.4)% | 23,552 | 24,093 | (2.2)% | |||||||||||||||||||
Operating profit2) | € mn | 1,683 | 1,894 | (11.1)% | 3,162 | 3,161 | 0.0% | |||||||||||||||||||
Net income | € mn | 1,822 | 1,380 | 32.0% | 2,879 | 2,560 | 12.5% | |||||||||||||||||||
Combined ratio | % | 93.5 | 92.9 | 0.6 pts | 94.1 | 94.8 | (0.7) pts | |||||||||||||||||||
Life/Health | ||||||||||||||||||||||||||
Statutory premiums | € mn | 10,729 | 11,758 | (8.8)% | 23,056 | 24,084 | (4.3)% | |||||||||||||||||||
Operating profit2) | € mn | 703 | 758 | (7.3)% | 1,292 | 1,508 | (14.3)% | |||||||||||||||||||
Net income | € mn | 425 | 479 | (11.3)% | 877 | 1,032 | (15.0)% | |||||||||||||||||||
Statutory expense ratio | % | 12.2 | 9.6 | 2.6 pts | 10.5 | 8.4 | 2.1 pts | |||||||||||||||||||
Banking | ||||||||||||||||||||||||||
Operating revenues | € mn | 694 | 1,850 | (62.5)% | 1,472 | 3,951 | (62.7)% | |||||||||||||||||||
Operating profit2) | € mn | (568) | 448 | n.m. | (1,024) | 1,148 | n.m. | |||||||||||||||||||
Net income | € mn | (552) | 411 | n.m. | (1,090) | 1,036 | n.m. | |||||||||||||||||||
Cost-income ratio | % | 172.0 | 72.3 | 99.7 pts | 164.1 | 69.4 | 94.7 pts | |||||||||||||||||||
Asset Management | ||||||||||||||||||||||||||
Operating revenues | € mn | 738 | 797 | (7.4)% | 1,465 | 1,577 | (7.1)% | |||||||||||||||||||
Operating profit2) | € mn | 281 | 325 | (13.5)% | 522 | 637 | (18.1)% | |||||||||||||||||||
Net income | € mn | 120 | 134 | (10.4)% | 198 | 233 | (15.0)% | |||||||||||||||||||
Cost-income ratio | % | 61.9 | 59.2 | 2.7 pts | 64.4 | 59.6 | 4.8 pts | |||||||||||||||||||
BALANCE SHEET | ||||||||||||||||||||||||||
Total assets as of June 30,3) | € mn | 1,016,396 | 1,061,149 | (4.2)% | 1,016,396 | 1,061,149 | (4.2)% | |||||||||||||||||||
Shareholders’ equity as of June 30,3) | € mn | 40,457 | 47,753 | (15.3)% | 40,457 | 47,753 | (15.3)% | |||||||||||||||||||
Minority interests as of June 30,3) | € mn | 3,398 | 3,628 | (6.3)% | 3,398 | 3,628 | (6.3)% | |||||||||||||||||||
SHARE INFORMATION | ||||||||||||||||||||||||||
Basic earnings per share | € | 3.44 | 4.85 | (29.1)% | 5.98 | 12.32 | (51.5)% | |||||||||||||||||||
Diluted earnings per share | € | 3.39 | 4.75 | (28.6)% | 5.85 | 12.08 | (51.6)% | |||||||||||||||||||
Share price as of June 30,3) | € | 111.90 | 147.95 | (24.4)% | 111.90 | 147.95 | (24.4)% | |||||||||||||||||||
Market capitalization as of June 30,3) | € bn | 50.6 | 66.6 | (24.0)% | 50.6 | 66.6 | (24.0)% | |||||||||||||||||||
OTHER DATA | ||||||||||||||||||||||||||
Third-party assets under management as of June 30,3) | € bn | 740 | 765 | (3.3)% | 740 | 765 | (3.3)% |
1) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. |
2) | The Allianz Group uses operating profit to evaluate the performance of its business segments and the Group as a whole. |
3) | 2007 figures as of December 31, 2007. |
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Executive Summary and Outlook1)
– Revenues were 7.4 % lower as a tough environment resulted in a slowdown in sales of unit-linked life insurance products and a net dealing loss in Banking.
– Operating profit decreased by€ 1.2 billion mainly attributable to Banking. Other segments were resilient.
– Net income was€ 0.6 billion lower as a result of reduced operating profit.
– Capital position remains strong.
1) | The Allianz Group operates and manages its activities primarily through four operating segments: Property-Casualty, Life/Health, Banking and Asset Management. Effective January 1, 2006, in addition to our four operating segments and with retrospective application, we introduced a fifth business segment named Corporate. |
2) | Does not include minority interests. |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Allianz Group’s Consolidated Results of Operations
In the second quarter of 2008 (2Q 2008), we recorded revenues of € 22,037 million, and delivered € 2,104 million of operating profit and € 1,542 million of net income. Compared to the second quarter of 2007 (2Q 2007), results declined significantly.
Operating profit declined by 36.0 % to € 2,104 million. This shortfall is almost entirely due to banking operations. Mark-downs on asset-backed securities (“ABS”), counterparty default adjustments on monoliners and mark-to-market valuations of other trading positions led to a net dealing loss at Dresdner Bank of € 627 million after a net trading income of € 351 million a year ago. In contrast, operating profit from our insurance and Asset Management businesses was resilient despite the credit crisis.
With income from non-operating items relatively flat at € 82 million, net income was almost entirely driven by operating profit.
Total revenues1)
Total revenues – Segments
in€ mn
Total revenues decreased by 9.5 % to € 22,037 million. On an internal basis2), growth declined by 7.4 %. This was due to decreased revenues from the sale of unit-linked life insurance products, lower contribution from our bancassurance sales channels and the net dealing loss from our investment bank.
Property-Casualty
At € 10,114 million, gross premiums written were 3.1 % ahead of previous year on an internal basis. On a nominal basis, revenues were down by 1.4 % to € 9,842 million, mainly reflecting the reclassification of AGF’s health business which was transferred to the Life/Health segment. Adjusted for the health business transferred, revenues increased by 1.4 %. With the exception of Italy and Credit Insurance, we saw growth in almost all regions and lines of business, though
1) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. |
2) | Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 39 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of our segments and the Allianz Group as a whole. Starting in 2Q 2008 we will focus our comments on internal growth, in order to provide more comparable information. |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
premium growth at Allianz Sach in Germany was flat. A key growth driver was our activities in the emerging markets1), where our expansion strategy continued to pay off.
For the first half year, gross premiums written increased by 1.1 % on an internal basis to € 23,827 million. Nominal growth amounted to (2.2) %, with premiums of € 23,552 million. Adjusted for the health business transferred, the premium growth rate was flat at 0.1 %.
Life/Health
Statutory premiums from our life/health business decreased by 8.0 % on an internal basis to € 11,070 million in the second quarter 2008. On a nominal basis revenues dropped by 8.8 % to € 10,729 million. Adjusted for the health business transferred, premiums declined by 10.9 %. Premiums from unit-linked products and revenues from our bancassurance sales channels declined whereas traditional life insurance products recorded strong growth in Germany, Switzerland and Belgium.
On a year-to-date basis the reduction of statutory premiums was lower – down 3.8 % to € 23,727 million on an internal basis, and down 4.3 % to € 23,056 on a nominal basis. Adjusted for the transfer of AGF’s health business, premiums declined by 6.5 %.
Banking
In the second quarter, revenues in our banking segment decreased to a nominal € 694 million. This development was mainly driven by the financial markets turbulence which led to significant shortfalls, resulting in a net dealing loss of € (630) million coming from a gain of € 354 million. Net fee and commission income showed weak development for the same reason, whereas net interest income was stable.
In the first six months revenues were down 62.7 % to a nominal € 1,472 million, mostly driven by a net dealing loss of € 1,192 million, after a gain of € 695 million a year earlier.
1) | New Europe, Asia-Pacific, South America, Mexico, Middle East, Northern Africa and Africa/Near East. |
Asset Management
Net inflows of € 33 billion exceeded the prior year performance by far, however negative foreign currency effects alone more than outweighed the high net inflows. With € 740 billion as of June 30, 2008 third party assets under management were € 25 billion below the year end 2007 level.
Operating revenues dropped by a nominal 7.4 % and 7.1 % on a quarter-over-quarter and year-to-date basis to € 738 million and € 1,465 million, respectively. A shortfall in net fee and commission income, unfavorable currency effects as well as lower mark-to-market valuation of seed money investments in the United States were the main reasons for this development.
Operating profit
Operating profit – Segments
in€ mn
Operating profit amounted to € 2,104 million, a decline of €1,184 million compared to the record quarter of 2Q 2007.
Property-Casualty
Operating profit decreased by 11.1 % to € 1,683 million, mainly due to reduced investment income and a high impact from smaller natural catastrophes. Our combined ratio increased to 93.5 %.
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
On a six months basis, operating profit was stable at € 3,162 million.
Life/Health
Despite the tough economic environment, we generated an operating profit of € 703 million. Maintaining operating profit on such levels attests to the underlying strength of our business. Nevertheless, turbulence in the financial markets affected our operating profit through higher impairments and lower realized gains.
On a six months basis, operating profit was down by 14.3 % to € 1,292 million. In the prior year, we recorded large realized gains in the first quarter due to the favorable market conditions existing at the time.
Banking
As a result of the weak revenue situation operating profit declined by € 1,016 million (1H 2008: € (2,172) million) leading to an operating loss of € 568 million (1H 2008: € (1,024) million). We achieved significant cost savings in almost every expense category. Administrative expenses were down 12.7 % to € 1,165 million in 2Q 2008 and down 13.2 % to € 2,383 million in the first half.
Asset Management
At € 281 million, operating profit decreased by € 44 million from a year ago in the quarter-over-quarter comparison, with foreign exchange having a significant impact. Operating revenues increased by 4.3% on an internal basis. Underlying operating expenses reflect our continuous investment in business expansion and future growth. The cost-income ratio increased by 2.7 percentage points to 61.9 %. On a year-to-date basis, it amounted to 64.4 %, up 4.8 percentage points.
Corporate Segment
Operating profit amounted to € 5 million coming from a loss of € 10 million and the operating loss for the first half stood at € 71 million, 36.0 % lower than in the respective period in 2007.
Non-operating result
Non-operating items showed a gain of € 82 million after a non-operating loss of € 90 million a year ago.
Impairments on investments were € 498 million higher than in 2Q 2007, however the increase was outweighed by the higher level of realized gains of € 604 million. A large portion of these gains resulted from large scale transactions at profits already locked-in in prior years, plus smaller, planned divestment activities. Lower interest expense from external debt and decreased acquisition expenses contributed to the improvement in non-operating items.
We recorded a non-operating gain of € 128 million for the first half of 2008, representing a decline of € 1,468 million as impairments on investments increased significantly by € 894 million and realized gains declined by € 791 million. In the prior year, we recorded realized gains net of impairments of € 2,446 million stemming primarily from the sales of equity investments in a very favorable market environment.
Net income
Net income of € 1,542 million was almost entirely derived from operating profit. Lower income tax expenses mainly resulting from lower income tax rates applied on lower taxable income in 2Q 2008, and lower minorities in earnings due to the minority buy-out at AGF in France completed last year positively contributed to net income development. The effective tax rate was down by 1.5 percentage points to 25.3 %.
On a six months basis, net income of € 2,690 million was also derived mainly from operating profit. Lower income tax expenses and reduced minority interests in earnings contributed positively to net income.
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Earnings per share1)
in€
1) | See note 35 to our condensed consolidated interim financial statements for further details. |
Segment Information – Total Revenues and Operating Profit
Property- Casualty | Life/Health | Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues1) | 9,842 | 9,982 | 10,729 | 11,758 | 694 | 1,850 | 738 | 797 | — | — | 34 | (50) | 22,037 | 24,337 | ||||||||||||||||||||||||||||||||||||||||||
Operating profit (loss) | 1,683 | 1,894 | 703 | 758 | (568) | 448 | 281 | 325 | 5 | (10) | — | (127) | 2,104 | 3,288 | ||||||||||||||||||||||||||||||||||||||||||
Non-operating items | 626 | 180 | (58) | 15 | 68 | 39 | (89) | (82) | (244) | (74) | (221) | (168) | 82 | (90) | ||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes and minority interests in earnings | 2,309 | 2,074 | 645 | 773 | (500) | 487 | 192 | 243 | (239) | (84) | (221) | (295) | 2,186 | 3,198 | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | (432) | (578) | (200) | (234) | (37) | (56) | (71) | (101) | 184 | 80 | 4 | 31 | (552) | (858) | ||||||||||||||||||||||||||||||||||||||||||
Minority interests in earnings | (55) | (116) | (20) | (60) | (15) | (20) | (1) | (8) | (3) | (4) | 2 | 8 | (92) | (200) | ||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 1,822 | 1,380 | 425 | 479 | (552) | 411 | 120 | 134 | (58) | (8) | (215) | (256) | 1,542 | 2,140 | ||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues1) | 23,552 | 24,093 | 23,056 | 24,084 | 1,472 | 3,951 | 1,465 | 1,577 | — | — | 145 | (45) | 49,690 | 53,660 | ||||||||||||||||||||||||||||||||||||||||||
Operating profit (loss) | 3,162 | 3,161 | 1,292 | 1,508 | (1,024) | 1,148 | 522 | 637 | (71) | (111) | 79 | (185) | 3,960 | 6,158 | ||||||||||||||||||||||||||||||||||||||||||
Non-operating items | 721 | 844 | (40) | 118 | 116 | 156 | (204) | (204) | (346) | 437 | (119) | 245 | 128 | 1,596 | ||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes and minority interests in earnings | 3,883 | 4,005 | 1,252 | 1,626 | (908) | 1,304 | 318 | 433 | (417) | 326 | (40) | 60 | 4,088 | 7,754 | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | (910) | (1,115) | (336) | (435) | (153) | (224) | (117) | (181) | 270 | 55 | 20 | 75 | (1,226) | (1,825) | ||||||||||||||||||||||||||||||||||||||||||
Minority interests in earnings | (94) | (330) | (39) | (159) | (29) | (44) | (3) | (19) | (10) | (8) | 3 | 11 | (172) | (549) | ||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 2,879 | 2,560 | 877 | 1,032 | (1,090) | 1,036 | 198 | 233 | (157) | 373 | (17) | 146 | 2,690 | 5,380 |
1) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. |
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Impact of the financial markets turbulence
The crisis in the mortgage market in the United States led to a devaluation of prices for various asset-backed securities (“ABS”), even for those with a high rating. Primarily, this affected collateralized debt obligations (“CDO”), and residential mortgage-backed securities especially those originating in the United States (“U.S. RMBS”).
The turbulence in the financial markets also impacted our business development, however the impact varied in each business segment.
The major impact of this crisis occurs in the Banking segment, with the substantial portion being attributable to some business units of Dresdner Bank’s investment banking activities. In contrast, impacts on our insurance operations have been far less severe although sales of our unit-linked life insurance products were depressed by the current market conditions. The investment activities of the insurance segments were only impacted to a very limited extent, reflecting the high quality of the asset bases with no material CDO and subprime exposure. Similarly, the direct impact on our Asset Management segment was of minor importance.
Impact on insurance assets
Of our Property-Casualty asset base, ABS made up € 4.7 billion, as of June 30, 2008, which is around 5 %. CDOs accounted for € 0.1 billion of this amount. Unrealized losses on CDOs of € 3 million were recorded in our equity.
Within our Life/Health asset base, ABS amounted to € 13.6 billion, as of June 30, 2008, which is 4 % of total Life/Health assets. Of these, € 0.2 billion are CDOs. Unrealized losses on CDOs of € 12 million were recorded in our equity.
Subprime expenses within CDOs were negligible.
Impact on investment banking activities of Dresdner Bank
Dresdner Bank is engaged in various business activities involving structured products. These comprise ABS of the trading book, credit enhancements, conduits, leveraged buy-out commitments and structured investment vehicles.
Furthermore, Dresdner Bank has sold credit protection for third party ABS and has re-insured these positions with monoline insurers (“monoliners”).
Net asset-backed securities of the trading book1)
As of June 30, 2008, Dresdner Bank carried ABS trading assets of a net notional € 6.9 billion. The majority of these ABS are of a high quality, with 68 % of them rated A or better.
Breakdown of exposure by rating class
in %
After write-downs, the net exposure after monoliner protection amounts to € 4.6 billion as of June 30, 2008. It contains € 0.9 billion CDOs, € 0.7 billion U.S. RMBS and € 3.0 billion other ABS. Because the financial markets turbulence mainly affected CDOs and U.S. RMBS, these net exposures are classified as “critical ABS”. We took substantial write-downs on CDOs and U.S. RMBS, recognizing the different quality and characteristics of the assets.
Exposure type | Exposure1) as of 31/12/2007 | Exposure1) as of | Markdowns 2Q 2008 | Remaining book value as of | ||||||||||||
€ mn | € mn | € mn | ||||||||||||||
U.S. RMBS | ||||||||||||||||
Prime | 713 | 664 | 34 | 446 | ||||||||||||
Midprime | 336 | 316 | 62 | 84 | ||||||||||||
Subprime | 617 | 554 | 81 | 149 | ||||||||||||
Total U.S. RMBS | 1,666 | 1,534 | 177 | 679 | ||||||||||||
CDO | ||||||||||||||||
High grade | 1,615 | 1,508 | 97 | 864 | ||||||||||||
Mezzanine | 667 | 622 | — | — | ||||||||||||
Total CDO | 2,282 | 2,130 | 97 | 864 |
1) | Before markdowns |
1) | Net of monoline exposures. In respect of the monoliner protection and our indirect ABS exposure please refer to page 8 of this report. |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Credit enhancements
Credit enhancements are one or more initiatives taken by the originator in a securitization structure to enhance the security, credit or the rating of the securitized instrument. In this context, Dresdner Bank offered second loss protection for credit investment related conduits (“CIRC”). This structure primarily contains ABS.
Under the CIRC structures, Dresdner Bank provides second loss protection, whereas the first loss stays with the client. Additionally, the Bank is entitled to sell the portfolio to the market, if the value of this portfolio falls below a pre-defined threshold. Here as well, the exposure was reduced and as of June 30, 2008, was a notional amount of € 2.1 billion.
Conduits
A conduit is a special purpose entity that securitizes its financial assets, e.g. receivables, by means of commercial papers.
Since the late nineties, Dresdner Bank has arranged the securitization of third party and own asset portfolios through asset-backed commercial paper programmes (“ABCP”) via several conduits. The underlying pool of assets exhibits a good quality, with 79 % having at least an A rating. Dresdner Bank has provided liquidity back-up lines of € 10.6 billion of which € 6.5 billion were undrawn, as of June 30, 2008.
Leveraged buy-out
A leveraged buy-out is a financing transaction involving a significant amount of debt.
Dresdner Bank provides credit lines for these transactions, the bulk of which are typically syndicated. As of June 30, 2008, Dresdner Bank’s LBO exposure amounted to € 4.2 billion containing drawn and undrawn amounts.
Monoliner
Dresdner Bank has entered into business relations with monoliners – companies that guarantee the repayment of a security and the corresponding interest in the event that the issuer defaults – in order to hedge the exposure from ABS.
In addition, Dresdner Bank has provided credit protection via Credit Default Swaps (“CDS”) for ABS exposures. According to our risk policies, most of these CDS positions are re-insured with monoliners.
Only in the case of a default of payment from the underlying assets and a breach of contractual duties of the monoliners, will an ultimate loss occur. This loss amounts to the difference between the guaranteed amount from the monoliner and the value of the underlying assets.
We bought net protection for ABS with a net notional of € 13.0 billion, of which € 8.9 billion have no primary reference to the US mortgage market. In addition, the secured ABS portfolio contains € 4.1 billion of exposures to the US mortgage market, of which we consider € 3.3 billion to be critical and expect – based on today’s knowledge – that we have to rely here partially on the monoliner protection. The remaining € 0.8 billion are U.S. RMBS.
Dresdner Bank’s gross counterparty risk amounted to € 2.4 billion. In order to hedge the monoliner default risk, the bank bought Credit Default Swaps from third parties on the various monoliners in a total amount of € 0.4 billion, leaving us with net a counterparty exposure of € 2.0 billion.
The positive market value of the protection bought from monoliners amounted to € 1.1 billion. In addition to that, we built up Counterparty Default Adjustments (CDAs) against the positive market value of € 0.4 billion, leaving us with a net book value of € 0.7 billion.
Breakdown of net book value
Mark-to- market | CDA | Net book value as of 30/06/2008 | ||||||||||
Monoliner 1 | 490 | 249 | 241 | |||||||||
Monoliner 2 | 306 | 125 | 181 | |||||||||
Monoliner 3 | 101 | 2 | 99 | |||||||||
Monoliner 4 | 68 | 15 | 53 | |||||||||
Monoliner 5 | 62 | 10 | 52 | |||||||||
Monoliner 6 | 36 | 15 | 21 | |||||||||
Monoliner 7 | 17 | 7 | 10 | |||||||||
Monoliner 8 | 4 | 1 | 3 | |||||||||
Monoliner 9 | — | — | — | |||||||||
Total | 1,084 | 424 | 660 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
The underlyings show a good quality, with 88 % of them being investment grade (having at least an A rating):
Breakdown of exposure by rating class
in %
As disclosed in our subsequent event section on page 88 we have entered into restructuring discussions with one mono-liner.
Structured Investment Vehicles (“SIV”)
A structured investment vehicle is an entity that primarily invests in long-term, high quality securities. The investments are refinanced by medium term notes (“MTN”) or commercial papers (“CP”).
On March 18, 2008, Dresdner Bank and K2 Corporation entered into an agreement through which Dresdner Bank will provide a support facility to the Structured Investment Vehicle K2 for the benefit of the senior note holders. The agreement consists of a U.S.$ 1.5 billion committed revolving mezzanine credit facility and a ‘backstop’ facility.
We have fully consolidated K2 since the end of 1Q 2008.
K2 has a well diversified portfolio that is predominantly composed of MBS, CLO and ABS and holds no direct exposure to subprime assets or CDOs on ABS/MBS. In the second quarter, the volume of K2 has been further reduced by 34.8 % to € 8.8 billion. The remaining assets are of a high quality with 91 % having at least an AA rating.
Risk Management
Risk management is an integral part of our business processes and supports our value-based management. As our internal risk capital model provides management with information which allows for active asset-liability management and monitoring, risk is well controlled and there are no identified risks which could in the future pose a threat to the existence of the Allianz Group.
The impacts from the subprime-crisis are described in the paragraph “Impacts from the financial markets turbulence”.
The information contained in the risk report in our 2007 Annual Report is still valid.
Events After the Balance Sheet Date
See “Outlook” below and Note 39 to the consolidated financial statements.
Opportunities
As presented in our 2007 Annual Report, we remain confident that the business prospects for financial service providers remain positive.
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Outlook
In macro-economic terms, conditions are challenging for business and consumers. Both are confronted with weak and volatile capital markets, increasing inflation, high oil prices, the risk of recession or even stagflation, a weak U.S. dollar, illiquid credit markets, falling property prices and increasing interest rates. This has created a sentiment of risk-aversion in the minds of consumers and tough trading conditions for businesses.
As discussed in our first quarter 2008 results, the further achievement of our targets was subject to a positive swing in financial markets. This has not materialized up to now. Although our underlying fundamentals remain healthy, these further deteriorating markets also affect Allianz.
We expect this difficult market environment to continue to 2009, therefore our 2006 long-term operating profit growth target of 10 % CAGR1) through 2009 cannot be maintained.
Due to expected market conditions accurate earnings predictions, especially for Banking, are not feasible. However our underlying operating profitability in Insurance and Asset Management is stable enough to generate a run rate before Banking of € 9 billion plus in 2008 and 2009.
As always, natural catastrophes and adverse developments in the capital markets, as well as the factors stated in our cautionary note regarding forward-looking statements, may severely impact our results of operations.
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 and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may”, “will”, “should”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group’s core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.
1) | Compound Annual Growth Rate |
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Property-Casualty Insurance Operations
– 3.1% internal revenue growth.
– Segment’s performance is at target level, with strong operating profit of € 1.7 billion despite high level of weather-
related claims in the second quarter.
– Combined ratio of 93.5% achieved.
Earnings Summary
Gross premiums written1)
2008 to 2007 second quarter comparison
Gross premiums written on an internal basis were 3.1% ahead of previous year at € 10,114 million. We maintained our focus on profitability and selectively wrote only those risks which we believe will generate adequate returns. This disciplined underwriting approach limited the negative pricing impacts stemming from still softening markets, while at the same time achieving organic growth.
On a nominal basis, gross premiums written were down by 1.4% to € 9,842 million with the decline mainly caused by the reclassification of € 284 million of AGF’s health business to the Life/Health segment, and negative currency translation effects of € 307 million. Positive impacts resulting from last year’s acquisitions in Russia and Kazakhstan could not compensate for these effects. Adjusted for the health business transferred, revenues were up by 1.4%.
Gross premiums written by region1)
in %
1) | After elimination of transactions between Allianz Group companies in different geographic regions and different segments. Gross premiums written from our specialty lines have been allocated to the respective geographic regions. |
1) In order to provide more comparable information, starting in 2Q 2008 we will comment the development of our gross premiums written on an internal basis, meaning adjusted for foreign currency translation and (de-) consolidation effects. |
We grew in most of our markets, with the exception of Italy and global credit insurance. Revenue development at Allianz Sach in Germany was flat.
In Italy, our operations showed a decline in gross premiums written of € 108 million or 8.1%. Here, a new regulation led to significantly decreased sales volumes from the agents network. Furthermore, prices in Italy were impacted by the Bersani-law, which resulted in a market-wide price reduction.
Our strategy of expansion into emerging markets2) continued to pay off as premiums grew strongly by € 173 million on a like-for-like basis. Together, these markets contributed € 1,221 million (2Q 2007: € 1,048 million) or 12.1% (2Q 2007: 10.7%) to total gross premiums written.
New Europe contributed € 81 million to revenue growth, adjusted for the full consolidation of Progress Garant in Russia and ATF-Polis in Kazakhstan. The main driver for the growth was motor insurance business in Poland.
At Allianz Global Corporate & Specialty (“AGCS”) internal revenues were up by 10.7% or € 75 million, driven by new business. This growth was to some extent offset by the currency depreciation of the U.S. Dollar and the GBP compared to the Euro.
2) | New Europe, Asia-Pacific, South America, Mexico, Middle East, Northern Africa and Africa/Near East. |
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Gross premiums written – Internal growth rates1)
in %
1) | Before elimination of transactions between Allianz Group companies in different geographic regions and different segments. |
2) | Together with our property-casualty reinsurance business assumed, primarily attributable to Allianz SE, within Germany there was an increase of 3.1 % for 2Q 2008 over 2Q 2007 and a decrease of 0.9 % for 1H 2008 over 1H 2007. |
2008 to 2007 first half comparison
For the first six months our gross premiums written on an internal basis increased by 1.1% to € 23,827 million. On a nominal basis, revenues were down by 2.2%. Adjusted for the reclassification of € 573 million of AGF’s health business, revenue growth was flat at 0.1%. The developments in most of our markets were largely consistent with the 2008 to 2007 second quarter comparison, while our operations in Germany and at AGCS showed declining revenues.
Operating profit
Operating profit
in€ mn
2008 to 2007 second quarter comparison
Operating profit remained strong at € 1,683 million, 11.1% below previous year’s quarter. The main reason behind this decline is lower investment income, stemming from the upstreaming of excess capital to the parent company Allianz SE, resulting in a lower asset base. In addition, we recorded higher losses from weather-related claims than in 2Q 2007. Administrative expenses were € 204 million lower compared to last year’s quarter.
We achieved acombined ratio of 93.5%, well inside our target range.
Ouraccident year loss ratio increased by 1.5 percentage points to 70.9% mostly driven by losses from hailstorms in Germany and the earthquake in China, amounting to € 222 million combined, as well as increasing claims inflation. At 4.8% the positive net development in prior years’ loss reserves was almost unchanged. Overall, thecalendar year loss ratio increased by 1.2 percentage points to 66.1%.
Acquisition and administrative expenses decreased by 4.3% to € 2,589 million. Further efficiency improvements contributed € 43 million to the reduction of administrative expenses. Due to this positive development, ourexpense ratio improved by 0.6 percentage points to 27.4%.
Interest and similar income was down by 3.6% to € 1,331 million. The reason for this was mainly the 2007 equity investments reduction program resulting in an outflow of € 5.6 billion. € 2.8 billion of these proceeds were used for capital upstreaming to the holding and thereby reduced the segment’s asset base and the current dividend income by about € 80 million. In addition, we recorded € 59 million higher losses from our assets designated at fair value as a result of weak market conditions.
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
2008 to 2007 first half comparison
On a six months basis, operating profit proved to be stable at € 3,162 million. Ourexpense ratio improved by 1.6 percentage points to 26.7% and our combined ratio was down by 0.7 percentage points to 94.1%.
Non-operating result
2008 to 2007 second quarter comparison
The non-operating result increased to a gain of € 626 million. This development was mainly due to much higher net realized gains which were only partly offset by increased impairments of investments.
Net realized gains from investments increased significantly to € 961 million compared to the previous year when no major single sales transaction was recorded. In the second quarter 2008 we recorded gains mainly from large scale transactions which were already locked-in in prior years as well as a number of smaller planned divestment activities.
Non-operatingnet impairments of investmentsincreased to € 341 million, reflecting the overall weakness in financial markets.
2008 to 2007 first half comparison
In contrast to the second quarter comparison, the non-operating result decreased by 14.6% to a gain of € 721 million for the first six months of 2008. The combined result of significantly lower net realized gains and higher impairments of investments recorded in the first quarter was not outweighed by the positive movements in the second quarter.
Net income
2008 to 2007 second quarter comparison
Net income increased by 32.0% to € 1,822 million. Higher non-operating items as well as lower income tax expenses and minority interests in earnings contributed to this improvement.
Income tax expenses were down to € 432 million, leading to a reduction of the effective tax rate from 27.9% to 18.7%. This resulted mainly from a higher tax-exempt income than in the second quarter 2007.
Lowerminority interests in earnings amounted to € 55 million, mainly reflecting the minority buy-out at AGF.
2008 to 2007 first half comparison
For the first six months, net income increased by 12.5% to € 2,879 million.
Income taxes were down to € 910 million, and the effective tax rate fell from 27.8% to 23.4% for the reason mentioned above.
Minority interests in earnings were also lower on a six months basis, amounting to € 94 million.
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Property-Casualty segment’s income statement and ratios1)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Gross premiums written2) | 9,842 | 9,982 | 23,552 | 24,093 | ||||||||||||
Ceded premiums written | (1,115) | (1,245) | (2,400) | (2,831) | ||||||||||||
Change in unearned premiums | 721 | 919 | (2,531) | (2,248) | ||||||||||||
Premiums earned (net) | 9,448 | 9,656 | 18,621 | 19,014 | ||||||||||||
Interest and similar income | 1,331 | 1,380 | 2,382 | 2,386 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net)3) | (60) | (1) | (46) | 16 | ||||||||||||
Operating realized gains/losses (net)4) | 61 | 1 | 58 | 35 | ||||||||||||
Fee and commission income | 293 | 280 | 560 | 552 | ||||||||||||
Other income | 7 | 11 | 257 | 95 | ||||||||||||
Operating revenues | 11,080 | 11,327 | 21,832 | 22,098 | ||||||||||||
Claims and insurance benefits incurred (net) | (6,247) | (6,266) | (12,548) | (12,649) | ||||||||||||
Changes in reserves for insurance and investment contracts (net) | (70) | (97) | (99) | (178) | ||||||||||||
Interest expenses | (91) | (92) | (179) | (184) | ||||||||||||
Loan loss provisions | (1) | (9) | (1) | (9) | ||||||||||||
Operating impairments of investments (net)5) | (72) | (5) | (165) | (7) | ||||||||||||
Investment expenses | (79) | (69) | (202) | (143) | ||||||||||||
Acquisition and administrative expenses (net) | (2,589) | (2,705) | (4,980) | (5,380) | ||||||||||||
Fee and commission expenses | (248) | (190) | (496) | (387) | ||||||||||||
Operating expenses | (9,397) | (9,433) | (18,670) | (18,937) | ||||||||||||
Operating profit | 1,683 | 1,894 | 3,162 | 3,161 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net)3) | 14 | (1) | 77 | (30) | ||||||||||||
Non-operating realized gains/losses (net)4) | 961 | 216 | 1,333 | 949 | ||||||||||||
Non-operating impairments of investments (net)5) | (341) | (23) | (683) | (47) | ||||||||||||
Amortization of intangible assets | (3) | (4) | (7) | (6) | ||||||||||||
Restructuring charges | (5) | (8) | 1 | (22) | ||||||||||||
Non-operating items | 626 | 180 | 721 | 844 | ||||||||||||
Income before income taxes and minority interests in earnings | 2,309 | 2,074 | 3,883 | 4,005 | ||||||||||||
Income taxes | (432) | (578) | (910) | (1,115) | ||||||||||||
Minority interests in earnings | (55) | (116) | (94) | (330) | ||||||||||||
Net income | 1,822 | 1,380 | 2,879 | 2,560 | ||||||||||||
Loss ratio6)in % | 66.1 | 64.9 | 67.4 | 66.5 | ||||||||||||
Expense ratio7)in % | 27.4 | 28.0 | 26.7 | 28.3 | ||||||||||||
Combined ratio8)in % | 93.5 | 92.9 | 94.1 | 94.8 |
1) | Since 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | For the Property-Casualty segment, total revenues are measured based upon gross premiums written. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
4) | The total of these items equals realized gains/losses (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
5) | The total of these items equals impairments of investments (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
6) | Represents claims and insurance benefits incurred (net) divided by premiums earned (net). |
7) | Represents acquisition and administrative expenses (net) divided by premiums earned (net). |
8) | Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net). |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Property-Casualty Operations by Geographic Region
The following table sets forth our Property-Casualty gross premiums written, premiums earned (net), operating profit, combined ratio, loss ratio and expense ratio by geographic region for the three and six months ended June 30, 2008 and 2007. Consistent with our general practice, these figures are presented before consolidation adjustments, representing the elimination of transactions between Allianz Group companies in different geographic regions and different segments.
Gross premiums written | Premiums earned (net) | Operating profit | Combined ratio | Loss ratio | Expense ratio | |||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, | 2008 as stated € mn | 2007 as stated € mn | 2008 internal 1) € mn | 2007 internal 1) € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 % | 2007 % | 2008 % | 2007 % | 2008 % | 2007 % | ||||||||||||||||||||||||||||||||||||||||||
Germany 2)3) | 2,136 | 1,959 | 2,136 | 2,072 | 2,603 | 2,325 | 357 | 467 | 96.8 | 92.6 | 69.1 | 64.9 | 27.7 | 27.7 | ||||||||||||||||||||||||||||||||||||||||||
Italy | 1,232 | 1,340 | 1,232 | 1,340 | 1,171 | 1,234 | 301 | 264 | 93.2 | 93.8 | 69.2 | 69.8 | 24.0 | 24.0 | ||||||||||||||||||||||||||||||||||||||||||
France4) | 842 | 1,143 | 842 | 836 | 808 | 1,103 | 114 | 163 | 96.1 | 96.8 | 69.1 | 69.3 | 27.0 | 27.5 | ||||||||||||||||||||||||||||||||||||||||||
United Kingdom | 528 | 613 | 617 | 613 | 443 | 498 | 66 | 64 | 94.6 | 98.5 | 61.5 | 65.3 | 33.1 | 33.2 | ||||||||||||||||||||||||||||||||||||||||||
Spain | 522 | 502 | 522 | 502 | 469 | 452 | 67 | 65 | 91.6 | 90.9 | 70.4 | 71.3 | 21.2 | 19.6 | ||||||||||||||||||||||||||||||||||||||||||
Switzerland2)3) | 124 | 305 | 121 | 115 | 289 | 402 | 26 | 71 | 94.1 | 92.3 | 71.5 | 66.3 | 22.6 | 26.0 | ||||||||||||||||||||||||||||||||||||||||||
Netherlands | 222 | 228 | 222 | 228 | 203 | 204 | 24 | 32 | 94.1 | 89.6 | 63.6 | 59.0 | 30.5 | 30.6 | ||||||||||||||||||||||||||||||||||||||||||
Austria | 197 | 201 | 197 | 201 | 177 | 183 | 28 | 31 | 92.2 | 92.9 | 68.7 | 69.6 | 23.5 | 23.3 | ||||||||||||||||||||||||||||||||||||||||||
Ireland | 163 | 165 | 163 | 165 | 146 | 154 | 29 | 29 | 93.0 | 94.7 | 65.8 | 70.0 | 27.2 | 24.7 | ||||||||||||||||||||||||||||||||||||||||||
Belgium5) | 73 | 83 | 73 | 73 | 65 | 75 | 13 | 15 | 97.3 | 97.9 | 59.9 | 63.1 | 37.4 | 34.8 | ||||||||||||||||||||||||||||||||||||||||||
Portugal | 71 | 67 | 71 | 67 | 62 | 62 | 10 | 11 | 91.6 | 89.9 | 64.4 | 62.7 | 27.2 | 27.2 | ||||||||||||||||||||||||||||||||||||||||||
Greece | 20 | 19 | 20 | 19 | 14 | 12 | 2 | 1 | 93.3 | 97.1 | 61.4 | 65.4 | 31.9 | 31.7 | ||||||||||||||||||||||||||||||||||||||||||
Western and Southern Europe | 746 | 763 | 746 | 753 | 667 | 690 | 111 6) | 124 6) | 93.5 | 92.7 | 65.2 | 65.2 | 28.3 | 27.5 | ||||||||||||||||||||||||||||||||||||||||||
Russia7) | 261 | 200 | 252 | 200 | 171 | 155 | 4 | 3 | 107.6 | 103.6 | 64.7 | 65.0 | 42.9 | 38.6 | ||||||||||||||||||||||||||||||||||||||||||
Hungary | 118 | 127 | 118 | 127 | 118 | 125 | 11 | 17 | 100.2 | 95.8 | 70.1 | 68.2 | 30.1 | 27.6 | ||||||||||||||||||||||||||||||||||||||||||
Poland | 122 | 95 | 109 | 95 | 83 | 61 | 17 | 7 | 82.8 | 93.0 | 55.4 | 57.6 | 27.4 | 35.4 | ||||||||||||||||||||||||||||||||||||||||||
Romania | 83 | 83 | 92 | 83 | 33 | 39 | 1 | 5 | 106.8 | 86.5 | 83.7 | 72.1 | 23.1 | 14.4 | ||||||||||||||||||||||||||||||||||||||||||
Slovakia | 78 | 70 | 73 | 70 | 76 | 68 | 28 | 32 | 71.1 | 61.6 | 42.3 | 35.2 | 28.8 | 26.4 | ||||||||||||||||||||||||||||||||||||||||||
Czech Republic | 66 | 54 | 58 | 54 | 52 | 46 | 7 | 13 | 89.8 | 75.5 | 67.8 | 52.4 | 22.0 | 23.1 | ||||||||||||||||||||||||||||||||||||||||||
Bulgaria | 28 | 24 | 28 | 24 | 16 | 15 | 1 | 2 | 100.1 | 93.1 | 57.8 | 47.1 | 42.3 | 46.0 | ||||||||||||||||||||||||||||||||||||||||||
Croatia | 25 | 21 | 25 | 21 | 19 | 14 | 1 | — | 99.3 | 105.9 | 62.2 | 69.9 | 37.1 | 36.0 | ||||||||||||||||||||||||||||||||||||||||||
New Europe8) | 781 | 674 | 755 | 674 | 568 | 523 | 62 | 74 | 96.2 | 92.0 | 62.6 | 60.1 | 33.6 | 31.9 | ||||||||||||||||||||||||||||||||||||||||||
Other Europe | 1,527 | 1,437 | 1,501 | 1,427 | 1,235 | 1,213 | 173 | 198 | 94.7 | 91.4 | 64.0 | 62.6 | 30.7 | 28.8 | ||||||||||||||||||||||||||||||||||||||||||
United States | 1,061 | 1,030 | 1,230 | 1,195 | 743 | 804 | 141 | 189 | 90.9 | 87.8 | 63.4 | 56.0 | 27.5 | 31.8 | ||||||||||||||||||||||||||||||||||||||||||
Mexico9) | 74 | 53 | 82 | 53 | 21 | 22 | 1 | 2 | 94.7 | 94.0 | 68.7 | 69.1 | 26.0 | 24.9 | ||||||||||||||||||||||||||||||||||||||||||
NAFTA | 1,135 | 1,083 | 1,312 | 1,248 | 764 | 826 | 142 | 191 | 91.0 | 88.0 | 63.6 | 56.4 | 27.4 | 31.6 | ||||||||||||||||||||||||||||||||||||||||||
Australia | 391 | 390 | 399 | 390 | 303 | 311 | 95 | 84 | 89.2 | 90.8 | 64.5 | 65.0 | 24.7 | 25.8 | ||||||||||||||||||||||||||||||||||||||||||
Other | 109 | 80 | 110 | 80 | 53 | 39 | 5 | 8 | 97.7 | 86.0 | 60.9 | 51.0 | 36.8 | 35.0 | ||||||||||||||||||||||||||||||||||||||||||
Asia-Pacific | 500 | 470 | 509 | 470 | 356 | 350 | 100 | 92 | 90.5 | 90.2 | 64.0 | 63.4 | 26.5 | 26.8 | ||||||||||||||||||||||||||||||||||||||||||
South America | 244 | 242 | 242 | 219 | 187 | 180 | 22 | 14 | 96.9 | 98.7 | 64.6 | 63.6 | 32.3 | 35.1 | ||||||||||||||||||||||||||||||||||||||||||
Other | 30 | 22 | 32 | 22 | 16 | 15 | 4 | 1 | —10) | —10) | — 10) | — 10) | — 10) | — 10) | ||||||||||||||||||||||||||||||||||||||||||
Specialty lines | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allianz Global Corporate & Specialty2) | 778 | 623 | 775 | 700 | 466 | 462 | 166 | 116 | 81.8 | 94.4 | 57.9 | 74.3 | 23.9 | 20.1 | ||||||||||||||||||||||||||||||||||||||||||
Credit Insurance | 437 | 446 | 437 | 446 | 333 | 330 | 112 | 161 | 87.3 | 73.1 | 60.2 | 43.4 | 27.1 | 29.7 | ||||||||||||||||||||||||||||||||||||||||||
Travel Insurance and Assistance Services | 306 | 270 | 306 | 270 | 308 | 266 | 33 | 24 | 89.1 | 107.7 | 53.6 | 58.8 | 35.5 | 48.9 | ||||||||||||||||||||||||||||||||||||||||||
Subtotal | 10,341 | 10,455 | 10,584 | 10,280 | 9,448 | 9,656 | 1,683 | 1,891 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Consolidation11) | (499) | (473) | (470) | (473) | — | — | — | 3 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | 9,842 | 9,982 | 10,114 | 9,807 | 9,448 | 9,656 | 1,683 | 1,894 | 93.5 | 92.9 | 66.1 | 64.9 | 27.4 | 28.0 |
1) | Reflect gross premiums written on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects). |
2) | Effective 1Q 2008, Allianz Risk Transfer AG is shown within Germany and Allianz Global Corporate & Specialty. Prior year balances have not been adjusted. |
3) | Reinsurance business of Allianz Suisse was transferred to Allianz SE. Effective 1Q 2008, renewal business is shown in Germany, run-off business is shown in Switzerland. |
4) | Effective 1Q 2008, health business in France is shown within Life/ Health segment. Prior year balances have not been adjusted. |
5) | Effective 1Q 2008, health business in Belgium is shown within Life/ Health segment. Prior year balances have not been adjusted. |
6) | Contains€ 5 mn and€ 5 mn for 2Q 2008 and 2Q 2007 respectively and€ 11 mn and€ 10 mn for 1H 2008 and 1H 2007 respectively from a former operating entity located in Luxembourg. To be continued on page 17. |
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Gross premiums written | Premiums earned (net) | Operating profit | Combined ratio | Loss ratio | Expense ratio | |||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, | 2008 as stated € mn | 2007 as stated € mn | 2008 internal 1) € mn | 2007 internal 1) € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 % | 2007 % | 2008 % | 2007 % | 2008 % | 2007 % | ||||||||||||||||||||||||||||||||||||||||||
Germany 2)3) | 6,774 | 6,575 | 6,774 | 6,833 | 5,035 | 4,592 | 952 | 582 | 95.6 | 97.8 | 70.4 | 69.2 | 25.2 | 28.6 | ||||||||||||||||||||||||||||||||||||||||||
Italy | 2,406 | 2,586 | 2,406 | 2,586 | 2,328 | 2,431 | 467 | 439 | 93.2 | 93.6 | 69.5 | 69.9 | 23.7 | 23.7 | ||||||||||||||||||||||||||||||||||||||||||
France4) | 2,236 | 2,838 | 2,236 | 2,215 | 1,639 | 2,217 | 173 | 237 | 97.7 | 99.0 | 70.7 | 71.5 | 27.0 | 27.5 | ||||||||||||||||||||||||||||||||||||||||||
United Kingdom | 1,034 | 1,152 | 1,188 | 1,152 | 903 | 989 | 124 | 127 | 95.9 | 97.4 | 62.3 | 64.1 | 33.6 | 33.3 | ||||||||||||||||||||||||||||||||||||||||||
Spain | 1,217 | 1,193 | 1,217 | 1,193 | 931 | 885 | 143 | 135 | 90.3 | 90.5 | 70.2 | 71.3 | 20.1 | 19.2 | ||||||||||||||||||||||||||||||||||||||||||
Switzerland2)3) | 898 | 1,272 | 886 | 867 | 598 | 806 | 76 | 122 | 92.4 | 94.9 | 69.7 | 68.3 | 22.7 | 26.6 | ||||||||||||||||||||||||||||||||||||||||||
Netherlands | 520 | 534 | 520 | 534 | 396 | 401 | 43 | 57 | 95.7 | 91.6 | 65.0 | 60.6 | 30.7 | 31.0 | ||||||||||||||||||||||||||||||||||||||||||
Austria | 539 | 551 | 539 | 551 | 359 | 366 | 46 | 52 | 94.7 | 95.1 | 71.5 | 73.1 | 23.2 | 22.0 | ||||||||||||||||||||||||||||||||||||||||||
Ireland | 363 | 369 | 363 | 369 | 296 | 305 | 59 | 128 | 91.6 | 93.9 | 65.6 | 69.3 | 26.0 | 24.6 | ||||||||||||||||||||||||||||||||||||||||||
Belgium5) | 184 | 207 | 184 | 181 | 130 | 150 | 23 | 21 | 96.7 | 103.5 | 58.6 | 69.2 | 38.1 | 34.3 | ||||||||||||||||||||||||||||||||||||||||||
Portugal | 158 | 147 | 158 | 147 | 123 | 124 | 20 | 20 | 90.7 | 89.7 | 64.1 | 61.8 | 26.6 | 27.9 | ||||||||||||||||||||||||||||||||||||||||||
Greece | 41 | 40 | 41 | 40 | 27 | 24 | 5 | 4 | 89.5 | 91.6 | 58.8 | 61.1 | 30.7 | 30.5 | ||||||||||||||||||||||||||||||||||||||||||
Western and Southern Europe | 1,805 | 1,848 | 1,805 | 1,822 | 1,331 | 1,370 | 207 6) | 292 6) | 94.0 | 94.3 | 66.0 | 67.0 | 28.0 | 27.3 | ||||||||||||||||||||||||||||||||||||||||||
Russia7) | 486 | 268 | 310 | 268 | 344 | 199 | 2 | 4 | 104.2 | 103.8 | 63.0 | 65.3 | 41.2 | 38.5 | ||||||||||||||||||||||||||||||||||||||||||
Hungary | 301 | 321 | 306 | 321 | 231 | 251 | 29 | 41 | 97.3 | 93.9 | 66.7 | 66.5 | 30.6 | 27.4 | ||||||||||||||||||||||||||||||||||||||||||
Poland | 227 | 181 | 206 | 181 | 159 | 117 | 24 | 12 | 88.6 | 94.6 | 59.3 | 60.5 | 29.3 | 34.1 | ||||||||||||||||||||||||||||||||||||||||||
Romania | 175 | 173 | 194 | 173 | 70 | 75 | 4 | 4 | 104.8 | 94.8 | 79.8 | 76.3 | 25.0 | 18.5 | ||||||||||||||||||||||||||||||||||||||||||
Slovakia | 188 | 175 | 179 | 175 | 143 | 135 | 57 | 60 | 67.9 | 64.0 | 41.4 | 37.8 | 26.5 | 26.2 | ||||||||||||||||||||||||||||||||||||||||||
Czech Republic | 149 | 132 | 134 | 132 | 107 | 91 | 19 | 25 | 86.0 | 77.6 | 63.9 | 54.9 | 22.1 | 22.7 | ||||||||||||||||||||||||||||||||||||||||||
Bulgaria | 54 | 47 | 54 | 47 | 36 | 31 | 5 | 7 | 89.9 | 84.9 | 55.1 | 42.8 | 34.8 | 42.1 | ||||||||||||||||||||||||||||||||||||||||||
Croatia | 51 | 44 | 51 | 44 | 37 | 29 | 3 | 1 | 96.5 | 101.7 | 63.5 | 69.2 | 33.0 | 32.5 | ||||||||||||||||||||||||||||||||||||||||||
New Europe8) | 1,631 | 1,341 | 1,434 | 1,341 | 1,127 | 928 | 129 | 143 | 94.0 | 91.2 | 61.4 | 60.3 | 32.6 | 30.9 | ||||||||||||||||||||||||||||||||||||||||||
Other Europe | 3,436 | 3,189 | 3,239 | 3,163 | 2,458 | 2,298 | 336 | 435 | 94.0 | 92.3 | 63.9 | 64.1 | 30.1 | 28.2 | ||||||||||||||||||||||||||||||||||||||||||
United States | 1,833 | 1,912 | 2,110 | 2,077 | 1,428 | 1,605 | 230 | 355 | 94.0 | 89.3 | 65.0 | 56.5 | 29.0 | 32.8 | ||||||||||||||||||||||||||||||||||||||||||
Mexico9) | 112 | 91 | 125 | 92 | 40 | 42 | 5 | 7 | 90.9 | 89.6 | 66.1 | 64.0 | 24.8 | 25.6 | ||||||||||||||||||||||||||||||||||||||||||
NAFTA | 1,945 | 2,003 | 2,235 | 2,169 | 1,468 | 1,647 | 235 | 362 | 93.9 | 89.3 | 65.0 | 56.7 | 28.9 | 32.6 | ||||||||||||||||||||||||||||||||||||||||||
Australia | 742 | 741 | 747 | 741 | 610 | 615 | 136 | 134 | 96.6 | 96.5 | 72.7 | 71.3 | 23.9 | 25.2 | ||||||||||||||||||||||||||||||||||||||||||
Other | 211 | 162 | 206 | 162 | 106 | 75 | 8 | 11 | 99.2 | 93.1 | 60.9 | 55.6 | 38.3 | 37.5 | ||||||||||||||||||||||||||||||||||||||||||
Asia-Pacific | 953 | 903 | 953 | 903 | 716 | 690 | 144 | 145 | 97.0 | 96.1 | 70.9 | 69.6 | 26.1 | 26.5 | ||||||||||||||||||||||||||||||||||||||||||
South America | 481 | 479 | 473 | 432 | 368 | 347 | 38 | 28 | 97.6 | 99.4 | 64.0 | 64.4 | 33.6 | 35.0 | ||||||||||||||||||||||||||||||||||||||||||
Other | 69 | 57 | 72 | 57 | 28 | 26 | 6 | 4 | —10) | —10) | — 10) | — 10) | — 10) | — 10) | ||||||||||||||||||||||||||||||||||||||||||
Specialty lines | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allianz Global Corporate & Specialty2) | 1,641 | 1,556 | 1,639 | 1,703 | 891 | 929 | 220 | 211 | 88.9 | 94.2 | 64.0 | 70.3 | 24.9 | 23.9 | ||||||||||||||||||||||||||||||||||||||||||
Credit Insurance | 969 | 934 | 969 | 934 | 675 | 631 | 189 | 278 | 88.2 | 74.6 | 61.7 | 45.8 | 26.5 | 28.8 | ||||||||||||||||||||||||||||||||||||||||||
Travel Insurance and Assistance Services | 633 | 566 | 633 | 566 | 583 | 526 | 59 | 55 | 91.2 | 104.2 | 55.7 | 56.9 | 35.5 | 47.3 | ||||||||||||||||||||||||||||||||||||||||||
Subtotal | 24,692 | 25,303 | 24,920 | 24,773 | 18,621 | 19,014 | 3,162 | 3,160 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Consolidation11) | (1,140) | (1,210) | (1,093) | (1,210) | — | — | — | 1 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | 23,552 | 24,093 | 23,827 | 23,563 | 18,621 | 19,014 | 3,162 | 3,161 | 94.1 | 94.8 | 67.4 | 66.5 | 26.7 | 28.3 |
7) | Effective February 21, 2007, Russian People’s Insurance Society “Rosno” was consolidated following the acquisition of approximately 49.2 % of the shares in ROSNO by the Allianz Group, increasing our holding to approximately 97 %. Effective May 21, 2007, we consolidated Progress Garant for the first time. |
8) | Contains income and expense items from a management holding in both 2008 and 2007. |
9) | Effective Q1 2007, life business in Mexico is shown within the Life/Health segment. |
10) | Presentation not meaningful. |
11) | Represents elimination of transactions between Allianz Group companies in different geographic regions. |
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Table of Contents
Life/Health Insurance Operations
– Strength of our underlying business reflected in resilient operating profit of€ 703 million.
– Challenging financial markets negatively impacted sales of unit-linked products.
Earnings Summary
Statutory premiums1)
2008 to 2007 second quarter comparison
At € 11,070 million statutory premiums were down 8.0 % on an internal basis compared to the prior year period. The current capital market situation resulted in a significant slow-down in our unit-linked business, that could not be outweighed by positive revenue developments from our traditional life insurance products.
On a nominal basis statutory premiums dropped 8.8 % to € 10,729 million. Adjusted for the reclassification of AGF’s health business of € 284 million from the property-casualty segment revenues were down by 10.9 %.
Statutory premiums by region 1)
in %
1) | After elimination of transactions between Allianz Group companies in different geographic regions and different segments. |
1) | In order to provide more comparable information we will comment the development of our gross premiums written on an internal basis; meaning adjusted for foreign currency translation and (de-)consolidation effects starting in 2Q 2008. |
Our traditional life insurance business continued to produce dynamic sales with single premium products being the main growth driver. Mostly these benefited from acquisitions of large group insurance contracts e.g. in Germany. Thereby, we achieved premium growth in the German life business (+ € 302 million), in Spain (+ € 65 million), Austria (+ € 44 million) and Switzerland (+ € 34 million).
This favorable development partly compensated the downturn in sales of unit-linked products. These were heavily depressed as customers were cautious about these products due to the weak situation in the equity markets.
In Italy, statutory premiums deteriorated by 36.8 % as a result of a shortfall in distribution capacity and the overall weakness of the Italian unit-linked market.
The 10.0 % decline in statutory premiums in the United States was primarily attributable to less business with fixed index annuity products. A year ago we ran a sales promotion which was not repeated this year. In addition, revenues from variable annuity products suffered from weak equity markets.
Revenues in Asia-Pacific were down 11.7 % compared to the prior year period, mainly caused by developments in Taiwan and Korea. In Taiwan new regulations with regards to unitlinked products slowed revenue growth. In addition we lost one of our major local bancassurance partners. In Korea we started seeing the effects of a strike that has lasted over six months, impacting sales growth and retention.
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Table of Contents
Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Statutory premiums – Internal growth rates1)
in %
1) | Before elimination of transactions between Allianz Group companies in different geographic regions and different segments. |
2008 to 2007 first half comparison
On a year-to-date comparison, statutory premiums were down 3.8 % to € 23,727 million . Adjusted for the reclassification of AGF’s health business of € 573 million, premiums declined by 6.5 %. On a nominal basis revenues decreased by 4.3 %.
Operating profit
Operating profit
in€ mn
2008 to 2007 second quarter comparison
Operating profit amounted to € 703 million proving the strength of our underlying business and its resilience to the tough market environment.
The challenging financial market conditions negatively affected investment income.Net impairments on investments increased by € 842 million and realized gains decreased by € 373 million.
Operating income from financial assets and liabilities carried at fair value through income showed an expense of € 352 million mainly as a result of positive effects from hedge accounting treatment for certain derivative instruments that was not available a year ago.
Due to the reclassification of AGF’s health business in France from the Property-Casualty to the Life/Health segment,net claims and insurance benefits incurred increased by 9.2% to € 4,540 million.
In aggregate,acquisition and administrative expensesincreased by 15.2% to € 1,285 million mainly due to higher acquisition expenses resulting from the transfer of the health business. Thestatutory expense ratio was up by 2.6 percentage points to 12.2%.
19
Table of Contents
Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
2008 to 2007 first half comparison
Operating profit for the first half year of 2008 decreased by 14.3% to € 1,292 million. The various line item developments were largely consistent with those described for the second quarter.
Non-operating result
2008 to 2007 second quarter comparison
The non-operating result was a loss of € 58 million. This was almost entirely made up of realized losses of € 47 million arising in Italy and Korea, not shared with policyholders,
2008 to 2007 first half comparison
We recorded a non-operating loss of € 40 million compared to a non-operating gain of € 118 million a year earlier.
Net income
2008 to 2007 second quarter comparison
Net income amounted to € 425 million. Both lower operating profit and the non-operating loss contributed to the 11.3% decline.
Theeffective tax rate rose by 0.7 percentage points to 31.0% mainly due to lower tax exempted income in 2Q 2008.
Minority interests in earnings were down by € 40 million mainly reflecting the minority buy-out at AGF in France.
2008 to 2007 first half comparison
Net income for the first six months of 2008 came to € 877 million, 15.0% lower than in the comparison period. Consistent with the development in the second quarter, the decrease stemmed from lower operating profit and the swing in non-operating items.
Income tax expenses were down by € 99 million, driven by the lower pre-tax profits. Oureffective tax rateremained stable at 26.8%.
As in the second quarter,minority interests in earningsreflected the minority buy-out in France and were € 120 million lower than a year earlier.
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Table of Contents
Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Life/Health segment’s income statement and ratios1)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Statutory premiums2) | 10,729 | 11,758 | 23,056 | 24,084 | ||||||||||||
Ceded premiums written | (124) | (186) | (267) | (379) | ||||||||||||
Change in unearned premiums | (29) | 3 | (66) | (24) | ||||||||||||
Statutory premiums (net) | 10,576 | 11,575 | 22,723 | 23,681 | ||||||||||||
Deposits from SFAS 97 insurance and investment contracts | (5,465) | (6,892) | (12,023) | (13,813) | ||||||||||||
Premiums earned (net) | 5,111 | 4,683 | 10,700 | 9,868 | ||||||||||||
Interest and similar income | 3,814 | 3,783 | 7,014 | 6,938 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net)3) | (352) | (668) | (121) | (979) | ||||||||||||
Operating realized gains/losses (net)4) | 273 | 646 | 922 | 1,734 | ||||||||||||
Fee and commission income | 168 | 164 | 339 | 335 | ||||||||||||
Other income | 5 | 9 | 115 | 63 | ||||||||||||
Income from fully consolidated private equity investments | 3 | — | 3 | — | ||||||||||||
Operating revenues | 9,022 | 8,617 | 18,972 | 17,959 | ||||||||||||
Claims and insurance benefits incurred (net) | (4,540) | (4,158) | (9,553) | (8,860) | ||||||||||||
Changes in reserves for insurance and investment contracts (net) | (1,389) | (2,211) | (3,192) | (4,835) | ||||||||||||
Interest expenses | (55) | (111) | (125) | (202) | ||||||||||||
Loan loss provisions | 4 | — | 6 | (3) | ||||||||||||
Operating impairments of investments (net)5) | (898) | (56) | (1,878) | (93) | ||||||||||||
Investment expenses | (82) | (163) | (410) | (359) | ||||||||||||
Acquisition and administrative expenses (net) | (1,285) | (1,115) | (2,393) | (1,989) | ||||||||||||
Fee and commission expenses | (70) | (43) | (130) | (105) | ||||||||||||
Operating restructuring charges6) | — | (2) | (1) | (5) | ||||||||||||
Other expenses | (1) | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | (3) | — | (3) | — | ||||||||||||
Operating expenses | (8,319) | (7,859) | (17,680) | (16,451) | ||||||||||||
Operating profit | 703 | 758 | 1,292 | 1,508 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net)3) | (3) | (1) | 8 | — | ||||||||||||
Non-operating realized gains/losses (net)4) | (47) | 17 | (35) | 122 | ||||||||||||
Non-operating impairments of investments (net)5) | (6) | — | (10) | — | ||||||||||||
Amortization of intangible assets | — | — | (1) | (1) | ||||||||||||
Non-operating restructuring charges6) | (2) | (1) | (2) | (3) | ||||||||||||
Non-operating items | (58) | 15 | (40) | 118 | ||||||||||||
Income before income taxes and minority interests in earnings | 645 | 773 | 1,252 | 1,626 | ||||||||||||
Income taxes | (200) | (234) | (336) | (435) | ||||||||||||
Minority interests in earnings | (20) | (60) | (39) | (159) | ||||||||||||
Net income | 425 | 479 | 877 | 1,032 | ||||||||||||
Statutory expense ratio7)in % | 12.2 | 9.6 | 10.5 | 8.4 |
1) | Since 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | For the Life/Health segment, total revenues are measured based upon statutory premiums. Statutory premiums are gross premiums written from sales of life insurance policies, as well as gross receipts from sales of unit linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s home jurisdiction. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
4) | The total of these items equals realized gains/losses (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
5) | The total of these items equals impairments of investments (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
6) | The total of these items equals restructuring charges in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
7) | Represents acquisition and administrative expenses (net) divided by statutory premiums (net). |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Life/Health Operations by Geographic Region
The following table sets forth our Life/Health statutory premiums, premiums earned (net), operating profit and statutory expense ratio by geographic region for the three and six months ended June 30, 2008 and 2007. Consistent with our general practice, these figures are presented before consolidation adjustments, representing the elimination of transactions between Allianz Group companies in different geographic regions and different segments.
Statutory premiums1) | Premiums earned (net) | Operating profit | Statutory expense ratio | |||||||||||||||||||||||||||||||||||||
Three months ended June 30, | 2008 as € mn | 2007 as € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 % | 2007 % | ||||||||||||||||||||||||||||||
Germany Life | 3,078 | 2,776 | 3,078 | 2,776 | 2,259 | 2,222 | 175 | 141 | 7.3 | 8.1 | ||||||||||||||||||||||||||||||
Germany Health3) | 779 | 783 | 779 | 783 | 778 | 783 | 23 | 41 | 7.7 | 9.4 | ||||||||||||||||||||||||||||||
Italy | 1,625 | 2,572 | 1,625 | 2,572 | 232 | 255 | 96 | 102 | 7.7 | 5.7 | ||||||||||||||||||||||||||||||
France4) | 1,690 | 1,575 | 1,690 | 1,847 | 637 | 390 | 140 | 227 | 19.3 | 15.1 | ||||||||||||||||||||||||||||||
Switzerland | 206 | 167 | 201 | 167 | 85 | 83 | 17 | 19 | 13.2 | 13.9 | ||||||||||||||||||||||||||||||
Spain | 233 | 168 | 233 | 168 | 118 | 119 | 31 | 26 | 7.1 | 8.3 | ||||||||||||||||||||||||||||||
Belgium5) | 185 | 155 | 185 | 166 | 76 | 71 | 22 | 28 | 9.3 | 10.4 | ||||||||||||||||||||||||||||||
Netherlands | 98 | 101 | 98 | 101 | 33 | 34 | 12 | 12 | 20.1 | 13.4 | ||||||||||||||||||||||||||||||
Austria | 139 | 95 | 139 | 95 | 68 | 71 | 6 | 6 | 8.1 | 8.8 | ||||||||||||||||||||||||||||||
Portugal | 31 | 28 | 31 | 28 | 19 | 17 | 3 | 7 | 20.7 | 26.1 | ||||||||||||||||||||||||||||||
Greece | 27 | 25 | 27 | 25 | 17 | 16 | 2 | 1 | 27.3 | 23.6 | ||||||||||||||||||||||||||||||
Luxembourg | 12 | 37 | 12 | 37 | 7 | 7 | 1 | 2 | 16.9 | 7.6 | ||||||||||||||||||||||||||||||
Western and Southern Europe | 492 | 441 | 492 | 452 | 220 | 216 | 46 | 55 6) | 12.9 | 12.2 | ||||||||||||||||||||||||||||||
Poland | 58 | 66 | 52 | 66 | 44 | 16 | (1) | 3 | 52.0 | 19.1 | ||||||||||||||||||||||||||||||
Slovakia | 65 | 64 | 61 | 64 | 43 | 40 | 8 | 9 | 16.8 | 12.3 | ||||||||||||||||||||||||||||||
Hungary | 51 | 26 | 51 | 26 | 19 | 20 | 3 | 4 | 14.0 | 27.6 | ||||||||||||||||||||||||||||||
Czech Republic | 22 | 24 | 20 | 24 | 15 | 13 | — | 3 | 22.2 | 15.5 | ||||||||||||||||||||||||||||||
Croatia | 17 | 17 | 17 | 17 | 10 | 10 | — | — | 21.9 | 6.1 | ||||||||||||||||||||||||||||||
Bulgaria | 8 | 7 | 8 | 7 | 7 | 6 | 1 | 1 | 16.7 | 16.4 | ||||||||||||||||||||||||||||||
Romania | 9 | 7 | 9 | 7 | 3 | 4 | — | — | 24.6 | 41.6 | ||||||||||||||||||||||||||||||
Russia | 4 | 3 | 4 | 3 | 4 | 3 | (4) | (3) | 135.4 | 126.1 | ||||||||||||||||||||||||||||||
New Europe | 234 | 214 | 222 | 214 | 145 | 112 | 7 | 17 | 27.9 | 18.9 | ||||||||||||||||||||||||||||||
Other Europe | 726 | 655 | 714 | 666 | 365 | 328 | 53 | 72 | 17.8 | 14.4 | ||||||||||||||||||||||||||||||
Mexico7) | 13 | 9 | 15 | 9 | 8 | 8 | 1 | 1 | 13.5 | 14.0 | ||||||||||||||||||||||||||||||
United States | 1,396 | 1,796 | 1,617 | 1,796 | 254 | 105 | 150 | 88 | 19.3 | 9.5 | ||||||||||||||||||||||||||||||
NAFTA | 1,409 | 1,805 | 1,632 | 1,805 | 262 | 113 | 151 | 89 | 19.2 | 9.6 | ||||||||||||||||||||||||||||||
South Korea | 380 | 466 | 483 | 466 | 186 | 238 | 26 | 24 | 16.0 | 17.6 | ||||||||||||||||||||||||||||||
Taiwan | 227 | 544 | 242 | 544 | 22 | 16 | (1) | 5 | 9.4 | 3.1 | ||||||||||||||||||||||||||||||
Indonesia | 48 | 76 | 58 | 76 | 12 | 11 | 2 | 2 | 14.7 | 7.4 | ||||||||||||||||||||||||||||||
Malaysia | 32 | 30 | 34 | 29 | 28 | 26 | 1 | 3 | 22.7 | 21.2 | ||||||||||||||||||||||||||||||
Other | 237 | 82 | 240 | 82 | 25 | 4 | (18) | (2) | 30.3 | 10.1 | ||||||||||||||||||||||||||||||
Asia-Pacific | 924 | 1,198 | 1,057 | 1,197 | 273 | 295 | 10 | 32 | 11.4 | 10.0 | ||||||||||||||||||||||||||||||
South America | 9 | 14 | 9 | 10 | 6 | 8 | 1 | — | 66.3 | 47.3 | ||||||||||||||||||||||||||||||
Other | 105 | 98 | 149 | 98 | 95 | 87 | 6 | 18 | —8) | —8) | ||||||||||||||||||||||||||||||
Subtotal | 10,784 | 11,811 | 11,167 | 12,089 | 5,110 | 4,683 | 703 | 767 | — | — | ||||||||||||||||||||||||||||||
Consolidation9) | (55) | (53) | (97) | (53) | — | — | — | (9) | — | — | ||||||||||||||||||||||||||||||
Total | 10,729 | 11,758 | 11,070 | 12,036 | 5,110 | 4,683 | 703 | 758 | 12.2 | 9.6 |
1) | Statutory premiums are gross premiums written from sales of life insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s home jurisdiction. |
2) | Reflect statutory premiums on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects). |
3) | Loss ratios were 72.1 % and 68.1 % for the three months ended June 30, 2008 and 2007 respectively and 75.7 % and 72.9 % for the six months ended June 30, 2008 and 2007 respectively. |
4) | Effective 1Q 2008, health business in France is shown within Life/ Health segment. Prior year balances have not been adjusted. |
5) | Effective 1Q 2008, health business in Belgium is shown within Life/ Health segment. Prior year balances have not been adjusted. To be continued on page 23. |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Statutory premiums1) | Premiums earned (net) | Operating profit | Statutory expense ratio | |||||||||||||||||||||||||||||||||||||
Six months ended June 30, | 2008 as € mn | 2007 as € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 % | 2007 % | ||||||||||||||||||||||||||||||
Germany Life | 6,656 | 5,815 | 6,656 | 5,815 | 4,884 | 4,788 | 363 | 332 | 7.3 | 4.6 | ||||||||||||||||||||||||||||||
Germany Health3) | 1,553 | 1,563 | 1,553 | 1,563 | 1,554 | 1,563 | 60 | 82 | 8.6 | 9.8 | ||||||||||||||||||||||||||||||
Italy | 3,254 | 5,402 | 3,254 | 5,402 | 446 | 498 | 127 | 196 | 7.9 | 5.5 | ||||||||||||||||||||||||||||||
France4) | 3,902 | 3,065 | 3,902 | 3,618 | 1,334 | 825 | 300 | 362 | 15.9 | 14.4 | ||||||||||||||||||||||||||||||
Switzerland | 869 | 665 | 857 | 665 | 279 | 278 | 34 | 35 | 5.4 | 6.9 | ||||||||||||||||||||||||||||||
Spain | 416 | 324 | 416 | 324 | 230 | 229 | 57 | 53 | 8.2 | 9.4 | ||||||||||||||||||||||||||||||
Belgium5) | 388 | 349 | 388 | 376 | 165 | 147 | 51 | 71 | 9.6 | 8.9 | ||||||||||||||||||||||||||||||
Netherlands | 197 | 214 | 197 | 214 | 66 | 69 | 21 | 23 | 19.9 | 12.9 | ||||||||||||||||||||||||||||||
Austria | 247 | 198 | 247 | 198 | 150 | 139 | 14 | 25 | 9.7 | 9.4 | ||||||||||||||||||||||||||||||
Portugal | 56 | 50 | 56 | 50 | 38 | 36 | 8 | 17 | 23.6 | 28.4 | ||||||||||||||||||||||||||||||
Greece | 56 | 54 | 56 | 54 | 35 | 32 | 3 | 2 | 24.3 | 20.2 | ||||||||||||||||||||||||||||||
Luxembourg | 35 | 47 | 35 | 47 | 14 | 14 | 2 | 5 | 12.4 | 11.1 | ||||||||||||||||||||||||||||||
Western and Southern Europe | 979 | 912 | 979 | 939 | 468 | 437 | 99 | 142 6) | 13.3 | 11.8 | ||||||||||||||||||||||||||||||
Poland | 121 | 314 | 110 | 314 | 81 | 44 | 3 | 6 | 45.5 | 10.5 | ||||||||||||||||||||||||||||||
Slovakia | 145 | 126 | 137 | 126 | 85 | 80 | 18 | 16 | 12.4 | 13.6 | ||||||||||||||||||||||||||||||
Hungary | 95 | 56 | 96 | 56 | 39 | 40 | 6 | 8 | 15.0 | 23.8 | ||||||||||||||||||||||||||||||
Czech Republic | 49 | 45 | 44 | 45 | 31 | 26 | 4 | 6 | 19.7 | 17.6 | ||||||||||||||||||||||||||||||
Croatia | 30 | 29 | 30 | 29 | 20 | 19 | 2 | 2 | 24.2 | 10.6 | ||||||||||||||||||||||||||||||
Bulgaria | 15 | 15 | 15 | 15 | 13 | 13 | 1 | 2 | 20.2 | 15.3 | ||||||||||||||||||||||||||||||
Romania | 16 | 16 | 18 | 16 | 7 | 6 | 1 | (1) | 27.6 | 34.1 | ||||||||||||||||||||||||||||||
Russia | 8 | 5 | 8 | 5 | 7 | 5 | (7) | (3) | 135.7 | 133.5 | ||||||||||||||||||||||||||||||
New Europe | 479 | 606 | 458 | 606 | 283 | 233 | 28 | 36 | 25.2 | 14.7 | ||||||||||||||||||||||||||||||
Other Europe | 1,458 | 1,518 | 1,437 | 1545 | 751 | 670 | 127 | 178 | 17.3 | 12.9 | ||||||||||||||||||||||||||||||
Mexico7) | 47 | 16 | 53 | 16 | 15 | 16 | 2 | 2 | 7.1 | 15.0 | ||||||||||||||||||||||||||||||
United States | 2,740 | 3,465 | 3,170 | 3,465 | 428 | 205 | 155 | 159 | 12.5 | 9.4 | ||||||||||||||||||||||||||||||
NAFTA | 2,787 | 3,481 | 3,223 | 3,481 | 443 | 221 | 157 | 161 | 12.4 | 9.5 | ||||||||||||||||||||||||||||||
South Korea | 864 | 931 | 1,047 | 931 | 396 | 490 | 56 | 78 | 13.8 | 15.8 | ||||||||||||||||||||||||||||||
Taiwan | 682 | 894 | 735 | 894 | 50 | 30 | 1 | 9 | 7.8 | 2.8 | ||||||||||||||||||||||||||||||
Indonesia | 94 | 106 | 110 | 106 | 22 | 22 | 5 | 4 | 13.6 | 11.4 | ||||||||||||||||||||||||||||||
Malaysia | 63 | 58 | 67 | 58 | 55 | 49 | 4 | 5 | 18.8 | 18.2 | ||||||||||||||||||||||||||||||
Other | 311 | 131 | 318 | 130 | 31 | 9 | (28) | (6) | 20.2 | 11.4 | ||||||||||||||||||||||||||||||
Asia-Pacific | 2,014 | 2,120 | 2,277 | 2,119 | 554 | 600 | 38 | 90 | 11.0 | 10.0 | ||||||||||||||||||||||||||||||
South America | 39 | 47 | 39 | 39 | 35 | 17 | 7 | (1) | 24.4 | 27.5 | ||||||||||||||||||||||||||||||
Other | 215 | 200 | 220 | 200 | 189 | 179 | 22 | 34 | —8) | —8 | ||||||||||||||||||||||||||||||
Subtotal | 23,163 | 24,200 | 23,834 | 24,771 | 10,699 | 9,868 | 1,292 | 1,522 | — | — | ||||||||||||||||||||||||||||||
Consolidation9) | (107) | (116) | (107) | (117) | — | — | — | (14) | — | — | ||||||||||||||||||||||||||||||
Total | 23,056 | 24,084 | 23,727 | 24,654 | 10,699 | 9,868 | 1,292 | 1,508 | 10.5 | 8.4 |
6) | Contains run-off€ (1) mn 1Q 2007 from our former life insurance business in the United Kingdom which we sold in December 2004. |
7) | Effective 2007, life business in Mexico is shown within the Life/Health segment. |
8) | Presentation not meaningful. |
9) | Represents elimination of transactions between Allianz Group companies in different geographic regions. |
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– | Further markdowns on asset-backed securities, counterparty default adjustments on monolines and mark-to-market valuations on other trading positions led to a net dealing loss of€ 627 million. |
– | Dresdner Bank’s loan book quality remained strong. |
Earnings Summary
Operating revenues
2008 to 2007 second quarter comparison
Operating revenues of € 635 million were significantly down compared to the second quarter 2007, as the ongoing financial market crisis severely impacted our net dealing income again.
Net interest income at € 703 million was stable, profiting from the positive development in our Private & Corporate Clients (“PCC”) division, where deposit business continued to compensate for slight shortfalls in loan business. PCC’s deposit business benefited from the shifts within the customer portfolios towards less riskier assets. In the Investment Bank Dresdner Kleinwort (“DKIB”) we recorded a lower result compared to the prior year period, in which higher income from structured finance transactions was generated. The impact from the accounting treatment for derivative financial instruments which do not qualify for hedge accounting amounted to € (12) million (2Q 2007: € 6 million).
Net fee and commission income declined 22.3 % to € 558 million as a result of low levels of customer activity in the challenging capital markets. This affected mainly PCC’s securities business, where our retail customers did fewer transactions, as well as the strategic advisory business at DKIB.
Net dealing income, which comprisesnet trading income andnet income from financial assets and liabilities designated at fair value through income, was severely hit by the market deterioration and turned sharply negative to € 627 million after
1) | The results of operations of our Banking segment are almost exclusively represented by Dresdner Bank, accounting for 92.0 % and 96.0 % of our total Banking segment’s operating revenues for the six months ended June 30, 2008 and 2007, respectively. Accordingly, the discussion of our Banking segment’s results of operations relates solely to the operations of Dresdner Bank. |
€ 351 million in the prior year period. This development is almost entirely attributable to DKIB. Whereas the direct impact from the credit crisis resulting in mark-downs on ABS at € 286 million was significantly lower than in the previous quarters, the ongoing build-up of counter-party default adjustments for monolines of € 212 million (net), and other credit crisis related negative impacts of € 191 million, both increased.
Additionally, we experienced lower net dealing income stemming from our rates, credit and equity businesses, which all suffered from the current market conditions.
2008 to 2007 first half comparison
Dresdner Bank’s operating revenues decreased by 64.3 % to € 1,354 million due to the ongoing financial markets turbulence that started in the second half of 2007. The line item developments were largely consistent with those described for the second quarter comparison.
Operating profit (loss)
Operating profit (loss)
in€ mn
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
2008 to 2007 second quarter comparison
Due to the weak revenue situation, especially in net dealing income as already described, we recorded anoperating loss of € 566 million compared to an operating profit of € 427 million in the same period one year ago. The loss was driven by DKIB which recorded an operating loss of € 715 million as a result of the lower net dealing income. PCC produced an operating profit of € 121 million and a cost-income-ratio of 81.5 %.
We further reduced ouroperating expenses. Down 11.4 %, they amounted to € 1,135 million. Personnel expenses were reduced by 19.7 % to € 643 million, reflecting significantly lower performance-related expenses following the lower revenues. Non-personnel costs, included in administrative expenses, declined by 3.2 % to € 461 million due to further efficiency gains and strict adherence to cost discipline, mainly resulting in lower office und IT-costs.
Net loan loss provisions stayed at a moderate level with net additions of € 66 million being € 4 million higher than in the second quarter 2007.
2008 to 2007 first half comparison
Resulting from the weak revenue situation in the first half of 2008, operating profit turned negative to anoperating loss of € 1,019 million. Although we managed down ouroperating expenses by 12.8 %, this development could not outweigh the decline in revenues.
Net loan loss provisions stayed at a moderate level, with net additions of € 76 million, up 38.2 %. The quality of Dresdner Bank’s loan book remained solid with a coverage ratio of 51.4 %.
Non-operating result
2008 to 2007 second quarter comparison
Thenon-operating result at € 67 million was up 123.3 %, mainly stemming from € 60 million highernet realized gains due to the further reduction of non-strategic investments of the bank. These more than compensated forimpairments of € 35 million, mainly resulting from losses from the sale of loans.
2008 to 2007 first half comparison
Compared to a year ago, the non-operating result was down by 20.0 %, amounting to € 116 million, mainly reflecting lower capital gains.
Net income (loss)
2008 to 2007 second quarter comparison
Due to the operating loss, net income declined to anet loss of € 545 million. In the prior year period we recorded a positive net income of € 395 million.
Despite the negative pre-tax income, we recorded an income tax charge of € 35 million (2Q 2007: € 44 million) due to positive income in other jurisdictions. The non-recognition of deferred tax assets for losses led to an effective tax rate of (7.0) % (2Q 2007: 9.6 %).
2008 to 2007 first half comparison
Net income decreased by € 2,065 million to a net loss of € 1,058 million as we recorded a loss before income taxes and minority interests in earnings of € 903 million due to the developments explained in the second quarter comparison.
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Banking Operations by Division
The following table sets forth our banking operating revenues, operating profit and cost-income ratio by division. Consistent with our general practice, these figures are presented before consolidation adjustments, representing the elimination of transactions between Allianz Group companies in different segments.
Operating revenues | Operating profit (loss) | Cost-income ratio | ||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 % | 2007 % | |||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||
Private & Corporate Clients | 839 | 879 | 121 | 173 | 81.5 | 77.1 | ||||||||||||||||||
Investment Banking | (222) | 760 | (715) | 158 | —2) | 74.5 | ||||||||||||||||||
Corporate Other1) | 18 | 131 | 28 | 96 | —2) | —2) | ||||||||||||||||||
Dresdner Bank | 635 | 1,770 | (566) | 427 | 178.7 | 72.4 | ||||||||||||||||||
Other Banks3) | 59 | 80 | (2) | 21 | 100.0 | 70.0 | ||||||||||||||||||
Total | 694 | 1,850 | (568) | 448 | 172.0 | 72.3 | ||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||
Private & Corporate Clients | 1,715 | 1,873 | 339 | 486 | 78.1 | 72.5 | ||||||||||||||||||
Investment Banking | (254) | 1,649 | (1,292) | 376 | —2) | 75.6 | ||||||||||||||||||
Corporate Other1) | (107) | 271 | (66) | 242 | —2) | —2) | ||||||||||||||||||
Dresdner Bank | 1,354 | 3,793 | (1,019) | 1,104 | 169.6 | 69.4 | ||||||||||||||||||
Other Banks3) | 118 | 158 | (5) | 44 | 100.8 | 69.0 | ||||||||||||||||||
Total | 1,472 | 3,951 | (1,024) | 1,148 | 164.1 | 69.4 |
1) | These items include, in particular, impacts from the accounting treatment for derivative financial instruments which do not qualify for hedge accounting as well as provisioning requirements for country and general risks. For the three and six months ended June 30, 2008 the impact from the accounting treatment for derivative financial instruments which do not qualify for hedge accounting on Corporate Other’s operating revenues amounted to€ 6 mn and€ (22) mn, respectively (2007:€ 4 mn and€ (16) mn respectively). |
2) | Presentation not meaningful. |
3) | Consists of non-Dresdner Bank banking operations within our Banking segment. |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Income statement and cost-income ratios for the Banking segment and Dresdner Bank
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||||||
Banking € mn | Dresdner Bank € mn | Banking Segment € mn | Dresdner Bank € mn | Banking € mn | Dresdner Bank € mn | Banking Segment € mn | Dresdner Bank € mn | |||||||||||||||||||||||||
Net interest income1) | 727 | 703 | 730 | 701 | 1,423 | 1,372 | 1,658 | 1,601 | ||||||||||||||||||||||||
Net fee and commission income2) | 597 | 558 | 766 | 718 | 1,241 | 1,162 | 1,598 | 1,507 | ||||||||||||||||||||||||
Trading income (net)3) | (697) | (694) | 338 | 335 | (1,403) | (1,392) | 689 | 680 | ||||||||||||||||||||||||
Income from financial assets and liabilities designated at fair value through income (net)3) | 67 | 67 | 16 | 16 | 211 | 211 | 6 | 5 | ||||||||||||||||||||||||
Other income | — | 1 | — | — | — | 1 | — | — | ||||||||||||||||||||||||
Operating revenues4) | 694 | 635 | 1,850 | 1,770 | 1,472 | 1,354 | 3,951 | 3,793 | ||||||||||||||||||||||||
Administrative expenses | (1,165) | (1,104) | (1,334) | (1,277) | (2,383) | (2,260) | (2,744) | (2,632) | ||||||||||||||||||||||||
Investment expenses | 1 | — | (4) | (5) | 3 | (1) | (13) | (16) | ||||||||||||||||||||||||
Other expenses | (30) | (31) | 1 | 1 | (36) | (36) | 14 | 14 | ||||||||||||||||||||||||
Operating expenses | (1,194) | (1,135) | (1,337) | (1,281) | (2,416) | (2,297) | (2,743) | (2,634) | ||||||||||||||||||||||||
Loan loss provisions | (68) | (66) | (65) | (62) | (80) | (76) | (60) | (55) | ||||||||||||||||||||||||
Operating profit (loss) | (568) | (566) | 448 | 427 | (1,024) | (1,019) | 1,148 | 1,104 | ||||||||||||||||||||||||
Realized gains/losses (net) | 104 | 103 | 51 | 43 | 166 | 166 | 190 | 180 | ||||||||||||||||||||||||
Impairments of investments (net) | (35) | (35) | (9) | (9) | (65) | (65) | (22) | (22) | ||||||||||||||||||||||||
Restructuring charges | (1) | (1) | (3) | (4) | 15 | 15 | (12) | (13) | ||||||||||||||||||||||||
Non-operating items | 68 | 67 | 39 | 30 | 116 | 116 | 156 | 145 | ||||||||||||||||||||||||
Income (loss) before income taxes and minority interests in earnings | (500) | (499) | 487 | 457 | (908) | (903) | 1,304 | 1,249 | ||||||||||||||||||||||||
Income taxes | (37) | (35) | (56) | (44) | (153) | (129) | (224) | (202) | ||||||||||||||||||||||||
Minority interests in earnings | (15) | (11) | (20) | (18) | (29) | (26) | (44) | (40) | ||||||||||||||||||||||||
Net income (loss) | (552) | (545) | 411 | 395 | (1,090) | (1,058) | 1,036 | 1,007 | ||||||||||||||||||||||||
Cost-income ratio5)in % | 172.0 | 178.7 | 72.3 | 72.4 | 164.1 | 169.6 | 69.4 | 69.4 |
1) | Represents interest and similar income less interest expenses. |
2) | Represents fee and commission income less fee and commission expenses. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
4) | For the Banking segment, total revenues are measured based upon operating revenues. |
5) | Represents operating expenses divided by operating revenues. |
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– Fixed income business robust.
– Consistent outperformance supports net flows.
– Stable underlying profitability.
Third-Party Assets Under Management of the Allianz Group
We continued with our successful investment performance. Around 80 % of our third party assets under management are consistently outperforming their respective benchmarks.
Rolling investment performance of Allianz Global Investors1) in %
This performance is the basis for strong net inflows which amounted to € 33 billion between year end 2007 and June 30, 2008.
Development of third-party assets under management in€ bn
Fixed income business proved to be robust, contributing € 37 billion to total net inflows. In contrast, we recorded outflows of € 4 billion of our equity business, primarily due to the continuing risk aversion of many investors against the background of the financial market crisis. In total, assets under management were down by 3.3 %. Negative market effects and unfavorable currency translation effects resulting from the downward trend of the U.S. dollar versus the Euro, were the main reasons.
1) | AGI account-based, asset-weighted 3-year investment performance of 3rd party assets vs. benchmark including all equity and fixed income accounts managed on a discretionary basis by equity and fixed income managers of AGI (including direct accounts, Spezialfonds and CPMs of Allianz with AGI Germany). For some retail funds the net of fee performance is compared to the median performance of an appropriate peer group (Micropal or Lipper; 1st and 2nd quartile mean out-performance). For all other retail funds and for all institutional accounts performance is calculated gross of fees using closing prices (revaluated) where appropriate and compared to the benchmark of each individual fund or account. Other than under GIPS, the performance of closed funds/accounts is not included in the analysis. Also not included: WRAP accounts and accounts of Caywood Scholl, AGI Taiwan, AGI Korea, AGF AM and RAS AM. |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Third-party assets under management by geographic region as of June 30, 2008 (December 31, 2007)1)
in %
1) | Based on the origination of assets. |
2) | Consists of third-party assets managed by Dresdner Bank (approximately€11 bn and€18 bn as of June 30, 2008 and December 31, 2007, respectively) and by other Allianz Group companies (approximately€20 bn and€22 bn as of June 30, 2008 and December 31, 2007 respectively). |
There were no major movements in the geographic origination of third party assets under management. Also the weighting of retail and institutional clients remained almost stable at 35% and 65% respectively, with a slight shift towards institutional clients. In the first half of 2008 there was a marginal movement from equity assets to our fixed income business, which represent 19% and 81% of the total assets under management, respectively.
Earnings Summary1)
Operating Revenues
2008 to 2007 second quarter comparison
At €725 million,operating revenues were down 6.8 % compared to the prior year period. This development was substantially impacted by €87 million unfavorable currency effects. At constant exchange rates and excluding deconsolidation effects, operating revenues would have been up by 4.7 %.
In line with the reduced asset base, management fees decreased by €40 million.
With €2 million,net income from financial assets and liabilities carried at fair value through income was down €13 million, primarily stemming from lower mark-to- market valuation of seed money investments related to equity products in the United States.
2008 to 2007 first half comparison
At €1,435 million,operating revenues declined by 6.6 %. The internal growth rate amounted to 2.8 %.
Net income from financial assets and liabilities carried at fair value through income turned negative to an expense of €1 million, €23 million below last year’s period. This drop primarily stemmed from lower mark-to-market valuation of seed money investments related to equity products in the United States.
1) | The results of operations of our Asset Management segment are almost exclusively represented by AGI, accounting for 98.2 % (2Q 2007:97.6 %) and 97.5 % (2Q 2007: 96.6 %) of our total Asset Management segment’s operating revenues and operating profit in the second quarter of 2008 , respectively. Accordingly, the discussion of our Asset Management segment’s results of operations relates solely to the operations of AGI. |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Management fees | 821 | 861 | 1,645 | 1,712 | ||||||||||||
Loading and exit fees | 63 | 78 | 126 | 159 | ||||||||||||
Performance fees | 30 | 20 | 43 | 35 | ||||||||||||
Other income | 113 | 94 | 178 | 196 | ||||||||||||
Fee and commission income | 1,027 | 1,053 | 1,992 | 2,102 | ||||||||||||
Commissions1) | (208) | (239) | (416) | (471) | ||||||||||||
Other expenses | (114) | (71) | (178) | (160) | ||||||||||||
Fee and commission expenses | (322) | (310) | (594) | (631) | ||||||||||||
Net fee and commission income | 705 | 743 | 1,398 | 1,471 |
1) | For the three months ended June 30, 2007 and the six months ended June 30, 2007,€ 13 million and€ 25 million, respectively, have been reclassified from other expenses to commission expenses. |
Operating profit
Operating Profit
in€ mn
2008 to 2007 second quarter comparison
At € 274 millionoperating profit was down 12.7 % compared to the prior year period, as a 2.8 % decrease in operating expenses could not compensate for the reduction of operating revenues. On an internal basis, operating profit was 3.1 % below the prior year period.
Administrative expenses declined by 2.8 % to € 451 million. However, adjusted for exchange rate effects the expenses increased by € 40 million as a consequence of our ongoing business expansion and investment in future growth.
Ourcost-income ratio increased by 2.6 percentage points to 62.2 %.
2008 to 2007 first half comparison
On a year-to-date comparisonoperating profit was down by 17.2 % , amounting to € 512 million. On an internal basis, operating profit declined by 12.3 %.
Ourcost-income ratio increased by 4.5 percentage points to 64.3 %.
Non-operating result
2008 to 2007 second quarter comparison
Acquisition-related expenses increased by € 4 million to € 87 million. This was primarily due to the favorable business development at PIMCO. The Allianz Group had acquired 67,863 of the 150,000 PIMCO LLC Class B Units originally outstanding, as of June 30 2008, compared to 37,760 as of June 30, 2007. There was no acquisition of B Units in the second quarter 2008.
2008 to 2007 first half comparison
At € 207 million,acquisition-related expenses were € 2 million higher than a year earlier. The positive development at PIMCO, as previously described, was the main driver behind this increase.
Net income
2008 to 2007 second quarter comparison
Net income of € 114 million was down 9.5 % . Excluding the effects of exchange rate movements and deconsolidation, the internal growth rate also decreased, but only by 4.3 %. The lower income resulted in a decline in tax charges which
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
amounted to € 71 million, roughly one forth less than a year ago. The effective tax rate was 38.4 % (2Q 2007: 43.1 %), primarily as a result of lower tax rates in Germany and Italy.
2008 to 2007 first half comparison
Net income dropped 13.2 % to € 190 million. On an internal basis, net income declined by 16.2 %. At €116 million tax charges were down €63 million for the same reasons as discussed in the quarter-to-quarter comparison . The effective
tax rate was 37.7 %, 5.5 percentage points less than for the first six months of 2007.
Income statement and cost-income ratios for the Asset Management segment and AGI
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||||||
Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | |||||||||||||||||||||||||
Net fee and commission income1) | 721 | 705 | 765 | 743 | 1,427 | 1,398 | 1,511 | 1,471 | ||||||||||||||||||||||||
Net interest income2) | 7 | 11 | 13 | 17 | 27 | 26 | 36 | 36 | ||||||||||||||||||||||||
Income from financial assets and liabilities carried at fair value through income (net) | 3 | 2 | 16 | 15 | (1) | (1) | 23 | 22 | ||||||||||||||||||||||||
Other income | 7 | 7 | 3 | 3 | 12 | 12 | 7 | 7 | ||||||||||||||||||||||||
Operating revenues3) | 738 | 725 | 797 | 778 | 1,465 | 1,435 | 1,577 | 1,536 | ||||||||||||||||||||||||
Administrative expenses, excluding acquisition-related expenses4) | (457) | (451) | (472) | (464) | (943) | (923) | (940) | (918) | ||||||||||||||||||||||||
Operating expenses | (457) | (451) | (472) | (464) | (943) | (923) | (940) | (918) | ||||||||||||||||||||||||
Operating profit | 281 | 274 | 325 | 314 | 522 | 512 | 637 | 618 | ||||||||||||||||||||||||
Realized gains/losses (net) | — | — | 1 | 1 | 8 | 8 | 3 | 3 | ||||||||||||||||||||||||
Impairments of investments (net) | (2) | (2) | — | — | (5) | (5) | — | — | ||||||||||||||||||||||||
Acquisition-related expenses4), thereof: | ||||||||||||||||||||||||||||||||
Deferred purchases of interests in PIMCO | (87) | (87) | (80) | (80) | (207) | (207) | (202) | (202) | ||||||||||||||||||||||||
Other acquisition-related expenses | — | — | (3) | (3) | — | — | (3) | (3) | ||||||||||||||||||||||||
Subtotal | (87) | (87) | (83) | (83) | (207) | (207) | (205) | (205) | ||||||||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | (2) | (2) | ||||||||||||||||||||||||
Non-operating items | (89) | (89) | (82) | (82) | (204) | (204) | (204) | (204) | ||||||||||||||||||||||||
Income before income taxes and minority interests in earnings | 192 | 185 | 243 | 232 | 318 | 308 | 433 | 414 | ||||||||||||||||||||||||
Income taxes | (71) | (71) | (101) | (100) | (117) | (116) | (181) | (179) | ||||||||||||||||||||||||
Minority interests in earnings | (1) | — | (8) | (6) | (3) | (2) | (19) | (16) | ||||||||||||||||||||||||
Net income | 120 | 114 | 134 | 126 | 198 | 190 | 233 | 219 | ||||||||||||||||||||||||
Cost-income ratio5)in % | 61.9 | 62.2 | 59.2 | 59.6 | 64.4 | 64.3 | 59.6 | 59.8 |
1) | Represents fee and commission income less fee and commission expenses. |
2) | Represents interest and similar income less interest expenses and investment expenses. |
3) | For the Asset Management segment, total revenues are measured based upon operating revenues. |
4) | The total of these items equals acquisition and administrative expenses (net) in the segment income statement included in Note 3 to the condensed consolidated interim financial statements. |
5) | Represents operating expenses divided by operating revenues |
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– Corporate Activities made a positive contribution to operating profit.
– Lower volume of realized gains affected net income.
Earnings Summary
The aggregate operating profit for the second quarter amounted to € 5 million coming from a loss of € 10 million. This development was attributable to a lower loss in the Holding Function which was only slightly offset by a lower profit in the Private Equity business. For the same reasons the operating loss of € 71 million for the first half of the year was 36.0 % lower than in the first six months of 2007.
At € 58 million, the overall net loss was € 50 million higher than in the respective quarter 2007, primarily due to a lower volume of realized gains and higher impairments of investments in the Holding Function. This development was also reflected in the first half year 2008 resulting in a net loss of € 157 million coming from a net gain of € 373 million in 2007.
Holding Function
Operating profit (loss)
At € 28 million the operating loss was € 18 million lower in the second quarter of 2008. This development was positively affected by interest and similar income that increased by € 55 million due to higher dividends received, however negative foreign currency exchange effects (– € 44 million) almost offset this.
In the first half of 2008 the same effects led to an operating loss of € 168 million that was slightly lower than last year (€ 178 million).
Non-operating result
The non-operating loss increased by € 232 million to € 293 million in the second quarter. The main driver for this development was significantly higher realized gains a year earlier which were not repeated in the period under review. Additionally, impairments increased due to the weak market conditions.
In the first half year comparison non-operating items showed a loss of € 383 million coming from a gain of € 451 million in the prior year. Similar to the second quarter, significantly lower realized gains and higher impairments were the reason for this development.
Net income
Due to the movements in non-operating items we recorded a net loss of € 127 million in the second quarter compared to a net loss of € 1 million in the prior year. Income tax amounted to a € 194 million income, partly compensating the negative impact from non-operating items.
In the first half of 2008, the holding function recorded a net loss of € 264 million coming from a net income of € 363 million in 2007. Income tax amounted to an income of € 287 million.
Private Equity
Operating profit
In the second quarter operating profit slightly decreased to €33 million. A higher margin from consolidated private equity investments was more than offset by lower interest and similar income.
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
For the first six months, operating profit increased by 44.8 % from € 67 million to € 97 million. In addition to the effects also observed in the second quarter, fee and commission income rose due to several real estate transactions in the first quarter 2008.
Non-operating result
In the second quarter comparison non-operating items turned into a positive result of € 49 million coming from a negative result of € 13 million in 2Q 2007, mainly due to higher realized gains.
The development in the first six months was consistent with the second quarter.
Net income
Driven by the development in non-operating items and lower income taxes net income amounted € 69 million in the second quarter coming from a loss € 7 million in 2Q 2007.
On a half year basis, net income increased by € 97 million to € 107 million due to higher operating profit, the increased non-operating result and also lower income tax expense.
Holding Function | Private Equity | Total | ||||||||||||||||||||||
Three months ended June 30, | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||||||||
Operating profit (loss) | (28) | (46) | 33 | 36 | 5 | (10) | ||||||||||||||||||
Non-operating items | (293) | (61) | 49 | (13) | (244) | (74) | ||||||||||||||||||
Income (loss) before income taxes and minorities | (321) | (107) | 82 | 23 | (239) | (84) | ||||||||||||||||||
Net income (loss) | (127) | (1) | 69 | (7) | (58) | (8) | ||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||
Operating profit (loss) | (168) | (178) | 97 | 67 | (71) | (111) | ||||||||||||||||||
Non-operating items | (383) | 451 | 37 | (14) | (346) | 437 | ||||||||||||||||||
Income (loss) before income taxes and minorities | (551) | 273 | 134 | 53 | (417) | 326 | ||||||||||||||||||
Net income (loss) | (264) | 363 | 107 | 10 | (157) | 373 |
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– Shareholders’ equity decreased due to 2007 dividend payment and reduced unrealized gains resulting from difficult financial markets.
Shareholders’ Equity
Shareholders’ equity1)
in€ mn
1) | Does not include minority interests of€ 3.4 bn,€ 3.5 bn and€ 3.6 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively. Please see note 18 to the condensed consolidated interim financial statements for further information. |
2) | Includes foreign currency translation adjustments. |
As of June 30, 2008 shareholders’ equity was down 10.1 % to € 40.5 billion compared to March 31, 2008 (down € 7.3 billion compared to year-end 2007). For the second quarter, net income increased our equity by € 1.5 billion (1H 2008: € 2.7 billion). However, dividends for the fiscal year 2007 amounting to € 2.5 billion, which were paid in the second quarter 2008 and a reduction of unrealized gains of € 3.6 billion (1H 2008: € 6.5 billion) led in sum to lower shareholders’ equity as of June 30, 2008.
Total Assets and Total Liabilities
In the first half of 2008 total assets and liabilities decreased by € 44.8 billion and € 37.2 billion, respectively. In the following sections we analyze important developments within the balance sheets of our Property-Casualty, Life/Health and Banking segments as presented on pages 48 and 49. Relative to the Allianz Group’s total assets and total liabilities, we consider the total assets and total liabilities from our Asset Management segment as immaterial and have, accordingly, excluded these assets and liabilities from the following discussion. Our Asset Management segment’s results of operations stem primarily from its business with third-party assets. Please see pages 28 and 29 for further information on the development of our third-party assets.
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Assets and Liabilities of the Property-Casualty segment
Property-Casualty assets
Property-Casualty asset base
fair values1) in€ bn
1) | Loans and advances to banks and customers, held-to-maturity investments, and real estate held for investment are stated at amortized cost. Investments in associates and joint ventures are stated at either amortized cost or equity, depending upon, among other factors, our ownership percentage. |
2) | Does not include affiliates of€ 9.8 bn,€ 9.8 bn and€ 10.0 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively. |
3) | Includes debt securities of€ 2.5 bn,€ 2.3 bn and€ 2.7 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively, equity securities of€ 0.5 bn,€ 0.4 bn and€ 0.4 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively, and derivative financial instruments of€ 0.1 bn,€ 0.1 bn and€ 0.1 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively. |
In the second quarter, our Property-Casualty asset base decreased by 3.7 %, or € 3.4 billion to € 88.4 billion (1H 2008: € (9.2) billion). Downward movements were seen in all asset categories, with the major impact in our investments, excluding affiliates. These were down 4.1 % or € 2.9 billion to € 67.1 billion (1H 2008: decline of 9.0 % or € 6.6 billion). Equity investments included in this balance decreased by 18.3 % to € 10.7 billion (1H 2008: (35.2) %) mainly caused by a strategic decision to actively decrease our equity exposure in order to reduce equity gearing. In addition, the asset base was reduced as a result of upstreaming € 2.8 billion of capital to the holding in the second quarter 2008.
Of our Property-Casualty asset base, ABS made up € 4.7 billion, as of June 30, 2008, which is around 5 %. CDOs accounted for € 0.1 billion of this amount. Unrealized losses on CDOs of € 3 million were recorded in equity.
Property-Casualty liabilities
Reserves for loss and loss adjustment expenses in our Property-Casualty segment increased by 0.6 % to € 54.8 billion in the second quarter (1H 2008: decline of 3.7 %) due to currency translation effects. Main contributors for the half year development were the change in presentation of AGF’s health insurance business which were previously recorded within the Property-Casualty segment and are now recorded in the Life/Health segment, and foreign currency translation effects.
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
Assets and Liabilities of the Life/Health segment
Life/Health assets
Life/Health asset base
fair values1) in€ bn
1) | Loans and advances to banks and customers, held-to-maturity investments, and real estate held for investment are stated at amortized cost. Investments in associates and joint ventures are stated at either amortized cost or equity, depending upon, among other factors, our ownership percentage. |
2) | Does not include affiliates of€ 2.9 bn,€ 2.9 bn and€ 2.7 bn as of June 30, 2008, March 31, 2008 and December, 31, 2007, respectively. |
3) | Financial assets for unit-linked contracts represent assets owned by, and managed on the behalf of, policyholders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit of policyholders. As a result, the value of financial assets for unit- linked contracts in our balance sheet corresponds with the value of financial liabilities for unit- linked contracts. |
4) | Includes debt securities of€ 7.9 bn,€ 8.0 bn and€ 9.3 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively, equity securities of€ 3.3 bn,€ 3.1 bn and€ 3.3 bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively, and derivative financial instruments of€ (3.9) bn,€ (4.1) bn and€ (4.5) bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively. |
The asset base of our Life/Health segment was down 1.1 % or € 3.6 billion (1H 2008: down 3.2 % or € 11.1 billion) amounting to € 338.9 billion as of June 30, 2008. Financial assets for unit-linked contracts declined by 1.7 % to € 59.4 billion, as the market conditions impacted the fair value of our assets in this category (1H 2008: decline of 10.1 %). In addition, the segment’s investments, excluding affiliates, decreased by 1.0 % to € 179.7 billion (1H 2008: decrease of 2.7 %). This resulted mainly from reduced equity market values (2Q 2008: down by 2.9 % or € 1.0 billion; 1H 2008: down by 18.7 % or € 7.7 billion) due to poor equity market conditions.
Within our Life/Health asset base, ABS amounted to € 13.6 billion, as of June 30, 2008, which is 4 % of total Life/Health assets. Of these, € 0.2 billion are CDOs. Unrealized losses on CDOs of € 12 million were recorded in equity.
Life/Health liabilities
Life/Health reserves for insurance and investment contracts were down 0.3 % since March 31, 2008 (1H 2008: down 1.3 %) to € 279.3 billion driven mainly by a reduction of premium refund reserves in Germany of € (1.3) billion (1H 2008: € (4.1) billion) and France of € (1.4) billion (1H 2008: € (2.1) billion) in the second quarter due to impairments of investments, and foreign currency translation effects of € (0.3) billion (1H 2008: € (3.3) billion from the United States and Korea). Furthermore due to the change in presentation of AGF’s health insurance business previously recorded in the Property-Casualty segment and now recorded in the Life/Health segment, reserves for loss and loss adjustment expenses increased by € 1,378 million.
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Assets and Liabilities of the Banking segment
Banking loans and advances to banks and customers1)
in€ bn
1) | Includes loan loss allowance of€ (0.8) bn ,€ (0.8) bn and€ (0.8) bn as of June 30, 2008, March 31, 2008 and December 31, 2007, respectively. |
Banking loans and advances to banks and customers
In our Banking segment, loans and advances to banks and customers were down € 83.3 billion to € 257.1 billion (1H 2008: decrease of € 38.4 billion). This development was caused primarily by lower volume in the collateralized refinancing business at Dresdner Bank.
Banking liabilities to banks and customers
In the second quarter the liabilities to banks and customers declined by 25.4 % to € 279.0 billion, mainly as term deposits and certificates of deposit were down by 18.7 % or € 24.5 billion to € 106.5 billion. In addition, lower business in the form of repurchase agreements contributed to this development.
For the first half year, banking liabilities to banks and customers also experienced a decrease of 12.9 % due to developments similar to the second quarter.
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Reconciliation of Consolidated Operating Profit and Income Before Income Taxes and Minority Interests in Earnings
The previous analysis is based on our consolidated financial statements and should be read in conjunction with those statements. The Allianz Group uses operating profit to evaluate the performance of its business segments and the Group as a whole. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz Group’s underlying operating performance and the comparability of its operating performance over time. Operating profit highlights the portion of income before income taxes and minority interests in earnings attributable to the on-going core operations of the Allianz Group. To better understand the on-going operations of the business, we exclude the effects of acquisition-related expenses and the amortization of intangible assets, as these relate to business combinations; and we exclude interest expense from external debt and non-operating income from financial assets and liabilities carried at fair value through income (net) as these relate to our capital structure.
We believe that trends in the underlying profitability of our business can be more clearly identified without the fluctuating effects of the realized capital gains and losses or impairments of investment securities, as these are largely dependent on market cycles or issuer-specific events over which we have little or no control, and can and do vary, sometimes materially, across periods. Further, the timing of sales that would result in such gains or losses is largely at our discretion.
Similarly, we exclude restructuring charges because the timing of the restructuring charges are largely within our control, and accordingly their exclusion provides additional insight into the operating trends of the underlying business. This differentiation is not made if the profit sources are shared with the policyholder.
Operating profit should be viewed as complementary to, and not a substitute for, income before income taxes and minority interests in earnings or net income as determined in accordance with IFRS.
Reconciliation of operating profit on a consolidated basis to the Allianz Group’s income before income taxes and minority interests in earnings.
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Operating profit | 2,104 | 3,288 | 3,960 | 6,158 | ||||||||||||
Non-operating realized gains/losses (net) and impairments of investments (net) | 507 | 401 | 761 | 2,446 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net) | (92) | (37) | 55 | (3) | ||||||||||||
Interest expenses from external debt | (233) | (278) | (485) | (500) | ||||||||||||
Non-operating restructuring charges | (8) | (12) | 14 | (39) | ||||||||||||
Acquisition-related expenses | (79) | (135) | (186) | (257) | ||||||||||||
Amortization of intangible assets | (3) | (4) | (8) | (7) | ||||||||||||
Reclassification of tax benefits | (10) | (25) | (23) | (44) | ||||||||||||
Income before income taxes and minority interests in earnings | 2,186 | 3,198 | 4,088 | 7,754 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Group Management Report
Composition of Total Revenue Growth
We further believe that an understanding of our total revenue performance is enhanced when the effects of foreign currency translation as well as acquisitions and disposals (or “changes in scope of consolidation”) are excluded. Accordingly, in addition to presenting “nominal growth”, we also present “internal growth”, which excludes the effects of foreign currency translation and changes in scope of consolidation.
Reconciliation of nominal total revenue1) growth to internal total revenue1) growth.
Three months ended June 30, 2008 | Six months ended June 30, 2008 | |||||||||||||||||||||||||||||||
Nominal growth | Changes in of consoli- | Foreign currency translation | Internal growth | Nominal growth | Changes in of consoli- | Foreign currency translation | Internal growth | |||||||||||||||||||||||||
% | % | % | % | % | % | % | % | |||||||||||||||||||||||||
Property-Casualty | (1.4) | (1.4) | (3.1) | 3.1 | (2.2) | (1.3) | (2.0) | 1.1 | ||||||||||||||||||||||||
Life/Health | (8.8) | 2.1 | (2.9) | (8.0) | (4.3) | 2.3 | (2.8) | (3.8) | ||||||||||||||||||||||||
Banking | (62.5) | — | 5.9 | (68.4) | (62.7) | — | 2.0 | (64.7) | ||||||||||||||||||||||||
thereof: Dresdner Bank | (64.1) | — | 6.2 | (70.3) | (64.3) | — | 2.0 | (66.3) | ||||||||||||||||||||||||
Asset Management | (7.4) | (0.6) | (11.1) | 4.3 | (7.1) | (0.5) | (9.0) | 2.4 | ||||||||||||||||||||||||
thereof: Allianz Global Investors | (6.8) | (0.2) | (11.3) | 4.7 | (6.6) | (0.1) | (9.3) | 2.8 | ||||||||||||||||||||||||
Allianz Group | (9.5) | 0.6 | (2.7) | (7.4) | (7.4) | 0.5 | (2.3) | (5.6) |
1) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. Segment growth rates are presented before the elimination of transactions between Allianz Group companies in different segments. |
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Group Management Report Allianz Group Interim Report Second Quarter and First Half of 2008
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Allianz Group Interim Report Second Quarter and First Half of 2008
Condensed Consolidated Interim Financial Statements Contents
42 | Consolidated Balance Sheets | |||
43 | Consolidated Income Statements | |||
44 | Consolidated Statements of Changes in Equity | |||
45 | Condensed Consolidated Statements of Cash Flows | |||
Notes to the Condensed Consolidated Interim Financial Statements | ||||
47 | 1 | Basis of presentation | ||
47 | 2 | Changes in the presentation of the condensed consolidated interim financial statements | ||
48 | 3 | Segment reporting | ||
Supplementary Information to the Consolidated Balance Sheets | ||||
64 | 4 | Financial assets carried at fair value through income | ||
64 | 5 | Investments | ||
65 | 6 | Loans and advances to banks and customers | ||
65 | 7 | Reinsurance assets | ||
65 | 8 | Deferred acquisition costs | ||
66 | 9 | Other assets | ||
66 | 10 | Intangible assets | ||
66 | 11 | Financial liabilities carried at fair value through income | ||
67 | 12 | Liabilities to banks and customers | ||
67 | 13 | Reserves for loss and loss adjustment expenses | ||
68 | 14 | Reserves for insurance and investment contracts | ||
68 | 15 | Other liabilities | ||
68 | 16 | Certificated liabilities | ||
68 | 17 | Participation certificates and subordinated liabilities | ||
69 | 18 | Equity |
Supplementary Information to the Consolidated Income Statements | ||||
70 | 19 | Premiums earned (net) | ||
71 | 20 | Interest and similar income | ||
72 | 21 | Income from financial assets and liabilities carried at fair value through income (net) | ||
73 | 22 | Realized gains/losses (net) | ||
74 | 23 | Fee and commission income | ||
75 | 24 | Other income | ||
76 | 25 | Income and expenses from fully consolidated private equity investments | ||
78 | 26 | Claims and insurance benefits incurred (net) | ||
79 | 27 | Change in reserves for insurance and investment contracts (net) | ||
81 | 28 | Interest expenses | ||
81 | 29 | Loan loss provisions | ||
81 | 30 | Impairments of investments (net) | ||
82 | 31 | Investment expenses | ||
82 | 32 | Acquisition and administrative expenses (net) | ||
84 | 33 | Fee and commission expenses | ||
85 | 34 | Income taxes | ||
86 | 35 | Earnings per share | ||
Other Information | ||||
87 | 36 | Supplemental information on the Banking Segment | ||
88 | 37 | Supplemental information on the condensed consolidated statements of cash flows | ||
88 | 38 | Other information | ||
88 | 39 | Subsequent events | ||
89 | Responsibility statement | |||
90 | Review report |
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Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Consolidated Balance Sheets
As of June 30, 2008 and as of December 31, 2007
Note | As of June 30, € mn | As of € mn | ||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | 35,555 | 31,337 | ||||||||||
Financial assets carried at fair value through income | 4 | 198,400 | 185,461 | |||||||||
Investments | 5 | 271,171 | 286,952 | |||||||||
Loans and advances to banks and customers | 6 | 359,462 | 396,702 | |||||||||
Financial assets for unit linked contracts | 59,446 | 66,060 | ||||||||||
Reinsurance assets | 7 | 14,512 | 15,312 | |||||||||
Deferred acquisition costs | 8 | 20,512 | 19,613 | |||||||||
Deferred tax assets | 4,977 | 4,771 | ||||||||||
Other assets | 9 | 39,160 | 41,528 | |||||||||
Intangible assets | 10 | 13,201 | 13,413 | |||||||||
Total assets | 1,016,396 | 1,061,149 | ||||||||||
Note | As of June 30, € mn | As of December 31, 2007 € mn | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||
Financial liabilities carried at fair value through income | 11 | 158,059 | 126,053 | |||||||||
Liabilities to banks and customers | 12 | 288,732 | 336,494 | |||||||||
Unearned premiums | 17,954 | 15,020 | ||||||||||
Reserves for loss and loss adjustment expenses | 13 | 63,099 | 63,706 | |||||||||
Reserves for insurance and investment contracts | 14 | 287,924 | 292,244 | |||||||||
Financial liabilities for unit linked contracts | 59,446 | 66,060 | ||||||||||
Deferred tax liabilities | 3,473 | 3,973 | ||||||||||
Other liabilities | 15 | 44,679 | 49,324 | |||||||||
Certificated liabilities | 16 | 34,130 | 42,070 | |||||||||
Participation certificates and subordinated liabilities | 17 | 15,045 | 14,824 | |||||||||
Total liabilities | 972,541 | 1,009,768 | ||||||||||
Shareholders’ equity | 40,457 | 47,753 | ||||||||||
Minority interests | 3,398 | 3,628 | ||||||||||
Total equity | 18 | 43,855 | 51,381 | |||||||||
Total liabilities and equity | 1,016,396 | 1,061,149 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Condensed Consolidated Interim Financial Statements
Consolidated Income Statements
For the three months and six months ended June 30, 2008 and 2007
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
Note | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||||||
Premiums written | 159,092 | 14,833 | 34,560 | 34,336 | ||||||||||||||||
Ceded premiums written | (1,225) | (1,415) | (2,641) | (3,176) | ||||||||||||||||
Change in unearned premiums | 692 | 921 | (2,598) | (2,278) | ||||||||||||||||
Premiums earned (net) | 19 | 14,559 | 14,339 | 29,321 | (28,882) | |||||||||||||||
Interest and similar income | 20 | 7,226 | 7,316 | 13,636 | 13,582 | |||||||||||||||
Income from financial assets and liabilities carried at fair value through income (net) | 21 | (1,121) | (343) | (1,173) | (228) | |||||||||||||||
Realized gains/losses (net) | 22 | 1,394 | 1,088 | 2,721 | 4,297 | |||||||||||||||
Fee and commission income | 23 | 2,103 | 2,322 | 4,204 | 4,678 | |||||||||||||||
Other income | 24 | 15 | 6 | 366 | 99 | |||||||||||||||
Income from fully consolidated private equity investments | 25 | 627 | 470 | 1,206 | 941 | |||||||||||||||
Total income | 24,803 | 25,198 | 50,281 | 52,251 | ||||||||||||||||
Claims and insurance benefits incurred (gross) | (11,313) | (11,421) | (23,299) | (23,468) | ||||||||||||||||
Claims and Insurance benefits incurred (ceded) | 526 | 997 | 1,198 | 1,959 | ||||||||||||||||
Claims and insurance benefits incurred (net) | 26 | (10,787) | (10,424) | (22,101) | (21,509) | |||||||||||||||
Change in reserves for insurance and investment contracts (net) | 27 | (1,466) | (2,332) | (3,311) | (5,068) | |||||||||||||||
Interest expenses | 28 | (1,620) | (1,841) | (3,446) | (3,439) | |||||||||||||||
Loan loss provisions | 29 | (65) | (74) | (75) | (72) | |||||||||||||||
Impairments of investments (net) | 30 | (1,526) | (102) | (3,023) | (169) | |||||||||||||||
Investment expenses | 31 | (160) | (202) | (597) | (463) | |||||||||||||||
Acquisition and administrative expenses (net) | 32 | (5,641) | (5,950) | (11,087) | (11,588) | |||||||||||||||
Fee and commission expenses | 33 | (712) | (601) | (1,367) | (1,235) | |||||||||||||||
Amortization of intangible assets | (3) | (4) | (8) | (7) | ||||||||||||||||
Restructuring charges | (8) | (14) | 13 | (44) | ||||||||||||||||
Other expenses | (31) | — | (37) | 13 | ||||||||||||||||
Expenses from fully consolidated private equity investments | 25 | (598) | (456) | (1,154) | (916) | |||||||||||||||
Total expenses | (22,617) | (22,000) | (46,193) | (44,497) | ||||||||||||||||
Income before income taxes and minority interests in earnings | 2,186 | 3,198 | 4,088 | 7,754 | ||||||||||||||||
Income taxes | 34 | (552) | (858) | (1,226) | (1,825) | |||||||||||||||
Minority interests in earnings | (92) | (200) | (172) | (549) | ||||||||||||||||
Net income | 1,542 | 2,140 | 2,690 | 5,380 | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
Note | 2008 € | 2007 € | 2008 € | 2007 € | ||||||||||||||||
Basic earnings per share | 35 | 3.44 | 4.85 | 5.98 | 12.32 | |||||||||||||||
Diluted earnings per share | 35 | 3.39 | 4.75 | 5.85 | 12.08 |
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Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2008 and 2007
Paid-in
| Revenue
| Foreign currency translation adjustments | Unrealized gains and losses (net) | Shareholders’
| Minority
| Total equity
| ||||||||||||||||||||||||||
€ mn | € mn | € mn | € mn | € mn | € mn | € mn | ||||||||||||||||||||||||||
Balance as of December 31, 2006 | 25,398 | 13,070 | (2,210) | 13,392 | 49,650 | 7,180 | 56,830 | |||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | (262) | (7) | (269) | (42) | (311) | |||||||||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||||||||
Unrealized gains and losses (net) arising during the period | — | — | — | (559) | (559) | (52) | (611) | |||||||||||||||||||||||||
Transferred to net income on disposal | — | — | — | (2,202) | (2,202) | (97) | (2,299) | |||||||||||||||||||||||||
Cash flow hedges | — | – | — | (9) | (9) | — | (9) | |||||||||||||||||||||||||
Miscellaneous | — | (136) | — | — | (136) | 9 | (127) | |||||||||||||||||||||||||
Total income and expense recognized directly in shareholders’ equity | — | (136) | (262) | (2,777) | (3,175) | (182) | (3,357) | |||||||||||||||||||||||||
Net income | — | 5,380 | — | — | 5,380 | 549 | 5,929 | |||||||||||||||||||||||||
Total recognized income and expense for the period | — | 5,244 | (262) | (2,777) | 2,205 | 367 | 2,572 | |||||||||||||||||||||||||
Paid-in capital | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Treasury shares | — | 200 | — | — | 200 | — | 200 | |||||||||||||||||||||||||
Transactions between equity holders | 2,765 | (6,051) | (62) | 563 | (2,785) | (3,242) | (6,027) | |||||||||||||||||||||||||
Dividends paid | — | (1,642) | — | — | (1,642) | (246) | (1,888) | |||||||||||||||||||||||||
Balance as of June 30, 2007 | 28,163 | 10,821 | (2,534) | 11,178 | 47,628 | 4,059 | 51,687 | |||||||||||||||||||||||||
Balance as of December 31, 2007 | 28,321 | 12,618 | (3,656) | 10,470 | 47,753 | 3,628 | 51,381 | |||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | (729) | 6 | (723) | (86) | (809) | |||||||||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||||||||
Unrealized gains and losses (net) arising during the period | — | — | — | (5,922) | (5,922) | (86) | (6,008) | |||||||||||||||||||||||||
Transferred to net income on disposal | — | — | — | (627) | (627) | (3) | (630) | |||||||||||||||||||||||||
Cash flow hedges | — | — | — | 8 | 8 | (1) | 7 | |||||||||||||||||||||||||
Miscellaneous | — | (357) | — | — | (357) | 22 | (335) | |||||||||||||||||||||||||
Total income and expense recognized directly in shareholders’ equity | — | (357) | (729) | (6,535) | (7,621) | (154) | (7,775) | |||||||||||||||||||||||||
Net income | — | 2,690 | — | — | 2,690 | 172 | 2,862 | |||||||||||||||||||||||||
Total recognized income and expense for the period | — | 2,333 | (729) | (6,535) | (4,931) | 18 | (4,913) | |||||||||||||||||||||||||
Paid-in capital | 203 | — | — | — | 203 | — | 203 | |||||||||||||||||||||||||
Treasury shares | — | 39 | — | — | 39 | — | 39 | |||||||||||||||||||||||||
Transactions between equity holders | — | (136) | — | 1 | (135) | (11) | (146) | |||||||||||||||||||||||||
Dividends paid | — | (2,472) | — | — | (2,472) | (237) | (2,709) | |||||||||||||||||||||||||
Balance as of June 30, 2008 | 28,524 | 12,382 | (4,385) | 3,936 | 40,457 | 3,398 | 43,855 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Condensed Consolidated Interim Financial Statements
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2008 and 2007
Six months ended June 30, | 2008 € mn | 2007 € mn | ||||||
Summary: | ||||||||
Net cash flow provided by operating activities | 27,506 | 9,573 | ||||||
Net cash flow used in investing activities | (4,559) | (6,212) | ||||||
Net cash flow provided by financing activities | (18,699) | (3,437) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (30) | (28) | ||||||
Change in cash and cash equivalents | 4,218 | (104) | ||||||
Cash and cash equivalents at beginning of period | 31,337 | 33,031 | ||||||
Cash and cash equivalents at end of period | 35,555 | 32,927 | ||||||
Cash flow from operating activities: | ||||||||
Net income | 2,690 | 5,380 | ||||||
Adjustments to reconcile net income to net cash flow provided by operating activities | ||||||||
Minority interests in earnings | 172 | 549 | ||||||
Share of earnings from investments in associates and joint ventures | (68) | (331) | ||||||
Realized gains/losses (net) and impairments of investments (net) of: | ||||||||
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans to banks and customers | 302 | (4,128) | ||||||
Other investments, mainly financial assets held for trading and designated at fair value through income | 1,846 | 449 | ||||||
Depreciation and amortization | 298 | 419 | ||||||
Loan loss provisions | 75 | 72 | ||||||
Interest credited to policyholder accounts | 1,680 | 1,268 | ||||||
Net change in: | ||||||||
Financial assets and liabilities held for trading | 3,054 | 10,266 | ||||||
Reverse repurchase agreements and collateral paid for securities borrowing transactions | 36,262 | (41,316) | ||||||
Repurchase agreements and collateral received from securities lending transactions | (18,150) | 34,231 | ||||||
Reinsurance assets | 314 | (50) | ||||||
Deferred acquisition costs | (709) | (905) | ||||||
Unearned premiums | 3,073 | 2,610 | ||||||
Reserves for losses and loss adjustment expenses | (87) | (394) | ||||||
Reserves for insurance and investment contracts | 876 | 3,389 | ||||||
Deferred tax assets/liabilities | 244 | 435 | ||||||
Financial assets designated at fair value through income (only banking) | 2,896 | (1,049) | ||||||
Financial liabilities designated at fair value through income (only banking) | (4,028) | 70 | ||||||
Other (net) | (3,234) | (1,392) | ||||||
Subtotal | 24,816 | 4,193 | ||||||
Net cash flow provided by operating activities | 27,506 | 9,573 | ||||||
Cash flow from investing activities: | ||||||||
Proceeds from the sale, maturity or repayment of: | ||||||||
Financial assets designated at fair value through income | 1,904 | 3,791 | ||||||
Available-for-sale investments | 59,802 | 76,884 | ||||||
Held-to-maturity investments | 163 | 146 | ||||||
Investments in associates and joint ventures | 585 | 590 | ||||||
Non-current assets and disposal groups held for sale | 2,147 | 3 | ||||||
Real estate held for investment | 299 | 584 | ||||||
Loans and advances to banks and customers (purchased loans) | 3,779 | 4,381 | ||||||
Property and equipment | 290 | 269 | ||||||
Subtotal | 68,969 | 86,648 |
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Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Six months ended June 30, | 2008 € mn | 2007 € mn | ||||||
Payments for the purchase or origination of: | ||||||||
Financial assets designated at fair value through income | (2,473) | (5,611) | ||||||
Available-for-sale investments | (62,297) | (77,828) | ||||||
Held-to-maturity investments | (450) | (142) | ||||||
Investments in associates and joint ventures | (351) | (401) | ||||||
Non-current assets and disposal groups held for sale | (37) | — | ||||||
Real estate held for investment | (118) | (245) | ||||||
Loans and advances to banks and customers (purchased loans) | (5,641) | (6,764) | ||||||
Property and equipment | (434) | (389) | ||||||
Subtotal | (71,801) | (91,380) | ||||||
Business combinations: | ||||||||
Acquisitions of subsidiaries, net of cash acquired | — | (507) | ||||||
Change in other loans and advances to banks and customers (originated loans) | (1,875) | (1,145) | ||||||
Other (net) | 148 | 172 | ||||||
Net cash flow used in investing activities | (4,559) | (6,212) | ||||||
Cash flow from financing activities: | ||||||||
Policyholders’ account deposits | 6,704 | 5,834 | ||||||
Policyholders’ account withdrawals | (5,134) | (4,786) | ||||||
Net change in liabilities to banks and customers | (11,728) | 2,750 | ||||||
Proceeds from the issuance of certificated liabilities, participation certificates and subordinated liabilities | 97,930 | 58,116 | ||||||
Repayments of certificated liabilities, participation certificates and subordinated liabilities | (103,304) | (57,333) | ||||||
Cash inflow from capital increases | 203 | — | ||||||
Transactions between equity holders | (146) | (6,027) | ||||||
Dividends paid to shareholders | (2,709) | (1,888) | ||||||
Net cash from sale or purchase of treasury shares | (23) | (290) | ||||||
Other (net) | (492) | 187 | ||||||
Net cash flow provided by financing activities | (18,699) | (3,437) |
46
Table of Contents
Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements
Basis of presentation
The condensed consolidated interim financial statements of the Allianz Group – comprising the consolidated balance sheet, income statement, condensed cash flow statement, statement of changes in equity and selected explanatory notes – are presented in accordance with the requirements of IAS 34, Interim Financial Reporting, and have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as adopted under European Union (“EU”) regulations in accordance with section 315a of the German Commercial Code (“HGB”). The condensed consolidated interim financial statements of the Allianz Group have also been prepared in accordance with IFRS as issued by the International Accounting Standard Board (“IASB”). The Allianz Group’s application of IFRS results in no differences between IFRS as adopted by the EU and IFRS as issued by the IASB.
The condensed consolidated interim financial statements comply with all new or amended IFRS, where application is compulsory for the first time for periods beginning on January 1, 2008.
For existing and unchanged IFRS the accounting policies for recognition, measurement, consolidation and presentation applied in the preparation of the condensed consolidated interim financial statements are consistent with the accounting policies that have been applied in the preparation of the consolidated financial statements for the year ended December 31, 2007.
IFRS do not provide specific guidance concerning all aspects of the recognition and measurement of insurance and reinsurance contracts. Therefore, as envisioned in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, the provisions embodied under accounting principles generally accepted in the United States of America (“US GAAP”) have been applied to those aspects where specific guidance is not provided by IFRS 4, Insurance Contracts.
The condensed consolidated interim financial statements are presented in millions of Euro (€mn).
2 Changes in the presentation of the condensed consolidated interim financial statements
As presented in the Notes to the Allianz Group’s consolidated financial statements for the year ended December 31, 2007, the Allianz Group identified certain prior period errors in 2007. The Allianz Group evaluated the errors individually and in the aggregate, and concluded that they were immaterial to the consolidated financial statements for all years in which they were included, and the Allianz Group corrected the errors in the 2007 consolidated financial statements. For these condensed consolidated interim financial statements, the following items were corrected in the consolidated statement of changes in equity:
As of € mn | ||||
Shareholders’ equity | ||||
Revenue reserves | (559) | |||
Unrealized gains and losses (net) | (272) | |||
Subtotal | (831) | |||
Minority interests | 771 | |||
Total equity | (60) |
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
47
Table of Contents
Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Allianz Group
Business Segment Information – Consolidated Balance Sheets
As of June 30, 2008 and as of December 31, 2007
Property-Casualty | Life/Health | |||||||||||||||
As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | |||||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | 4,687 | 4,985 | 8,742 | 8,779 | ||||||||||||
Financial assets carried at fair value through income | 3,124 | 3,302 | 11,869 | 13,216 | ||||||||||||
Investments | 76,908 | 83,741 | 182,531 | 187,289 | ||||||||||||
Loans and advances to banks and customers | 18,247 | 20,712 | 92,517 | 91,188 | ||||||||||||
Financial assets for unit linked contracts | — | — | 59,446 | 66,060 | ||||||||||||
Reinsurance assets | 9,645 | 10,317 | 4,912 | 5,043 | ||||||||||||
Deferred acquisition costs | 3,993 | 3,681 | 16,361 | 15,838 | ||||||||||||
Deferred tax assets | 1,661 | 1,442 | 398 | 316 | ||||||||||||
Other assets | 22,842 | 21,864 | 14,436 | 14,071 | ||||||||||||
Intangible assets | 2,312 | 2,332 | 2,214 | 2,218 | ||||||||||||
Total assets | 143,419 | 152,376 | 393,426 | 404,018 | ||||||||||||
Property-Casualty | Life/Health | |||||||||||||||
As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Financial liabilities carried at fair value through income | 78 | 96 | 4,573 | 5,147 | ||||||||||||
Liabilities to banks and customers | 4,921 | 6,865 | 6,123 | 6,078 | ||||||||||||
Unearned premiums | 15,793 | 13,163 | 2,162 | 1,858 | ||||||||||||
Reserves for loss and loss adjustment expenses | 54,843 | 56,943 | 8,264 | 6,773 | ||||||||||||
Reserves for insurance and investment contracts | 8,610 | 8,976 | 279,261 | 283,139 | ||||||||||||
Financial liabilities for unit linked contracts | — | — | 59,446 | 66,060 | ||||||||||||
Deferred tax liabilities | 2,381 | 2,606 | 731 | 946 | ||||||||||||
Other liabilities | 19,964 | 22,989 | 17,768 | 17,741 | ||||||||||||
Certificated liabilities | 160 | 158 | 2 | 3 | ||||||||||||
Participation certificates and subordinated liabilities | 845 | 905 | 65 | 60 | ||||||||||||
Total liabilities | 107,595 | 112,701 | 378,395 | 387,805 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
As of € mn | As of December 31, € mn | As of June 30, 2008 € mn | As of December 31, € mn | As of June 30, 2008 € mn | As of 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | |||||||||||||||||||||||||||
21,854 | 17,307 | 822 | 770 | 431 | 445 | (981) | (949) | 35,555 | 31,337 | |||||||||||||||||||||||||||
183,167 | 168,339 | 844 | 980 | 451 | 887 | (1,055) | (1,263) | 198,400 | 185,461 | |||||||||||||||||||||||||||
15,537 | 16,284 | 866 | 879 | 100,248 | 102,894 | (104,919) | (104,135) | 271,171 | 286,952 | |||||||||||||||||||||||||||
257,104 | 295,506 | 588 | 469 | 6,541 | 4,754 | (15,535) | (15,927) | 359,462 | 396,702 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 59,446 | 66,060 | |||||||||||||||||||||||||||
— | — | — | — | — | — | (45) | (48) | 14,512 | 15,312 | |||||||||||||||||||||||||||
— | — | 158 | 94 | — | — | — | — | 20,512 | 19,613 | |||||||||||||||||||||||||||
1,725 | 1,733 | 155 | 161 | 1,048 | 935 | (10) | 184 | 4,977 | 4,771 | |||||||||||||||||||||||||||
7,651 | 8,203 | 3,136 | 3,452 | 6,830 | 10,786 | (15,735) | (16,848) | 39,160 | 41,528 | |||||||||||||||||||||||||||
2,379 | 2,379 | 6,050 | 6,227 | 246 | 257 | — | — | 13,201 | 13,413 | |||||||||||||||||||||||||||
489,417 | 509,751 | 12,619 | 13,032 | 115,795 | 120,958 | (138,280) | (138,986) | 1,016,396 | 1,061,149 |
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
As of 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 € mn | As of June 30, 2008 € mn | As of December 31, 2007 €mn | |||||||||||||||||||||||||||
153,361 | 120,383 | — | — | 717 | 1,376 | (670) | (949) | 158,059 | 126,053 | |||||||||||||||||||||||||||
278,984 | 320,388 | 965 | 807 | 8,089 | 13,023 | (10,350) | (10,667) | 288,732 | 336,494 | |||||||||||||||||||||||||||
— | — | — | — | — | — | (1) | (1) | 17,954 | 15,020 | |||||||||||||||||||||||||||
— | — | — | — | — | — | (8) | (10) | 63,099 | 63,706 | |||||||||||||||||||||||||||
— | — | — | — | 285 | 358 | (232) | (229) | 287,924 | 292,244 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 59,446 | 66,060 | |||||||||||||||||||||||||||
93 | 102 | 48 | 35 | 226 | 88 | (6) | 196 | 3,473 | 3,973 | |||||||||||||||||||||||||||
9,681 | 11,011 | 2,987 | 3,647 | 15,737 | 14,625 | (21,458) | (20,689) | 44,679 | 49,324 | |||||||||||||||||||||||||||
27,493 | 34,778 | — | — | 8,967 | 9,567 | (2,492) | (2,436) | 34,130 | 42,070 | |||||||||||||||||||||||||||
7,033 | 7,966 | 14 | 14 | 8,281 | 7,069 | (1,193) | (1,190) | 15,045 | 14,824 | |||||||||||||||||||||||||||
476,645 | 494,628 | 4,014 | 4,503 | 42,302 | 46,106 | (36,410) | (35,975) | 972,541 | 1,009,768 | |||||||||||||||||||||||||||
Total equity | 43,855 | 51,381 | ||||||||||||||||||||||||||||||||||
Total liabilities and equity | 1,016,396 | 1,061,149 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Allianz Group
Business Segment Information – Consolidated Income Statements
For the three months ended June 30, 2008 and 2007
Property-Casualty | Life/Health | |||||||||||||||
Three months ended June 30, | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||
Premiums written | 9,842 | 9,982 | 5,255 | 4,856 | ||||||||||||
Ceded premiums written | (1,115) | (1,245) | (115) | (175) | ||||||||||||
Change in unearned premiums | 721 | 919 | (29) | 2 | ||||||||||||
Premiums earned (net) | 9,448 | 9,656 | 5,111 | 4,683 | ||||||||||||
Interest and similar income | 1,331 | 1,380 | 3,814 | 3,783 | ||||||||||||
Income from financial assets and liabilities carried at fair value through income (net) | (46) | (2) | (355) | (669) | ||||||||||||
Realized gains/losses (net) | 1,022 | 217 | 226 | 663 | ||||||||||||
Fee and commission income | 293 | 280 | 168 | 164 | ||||||||||||
Other income | 7 | 11 | 5 | 9 | ||||||||||||
Income from fully consolidated private equity investments | — | — | 3 | — | ||||||||||||
Total income | 12,055 | 11,542 | 8,972 | 8,633 | ||||||||||||
Claims and insurance benefits incurred (gross) | (6,678) | (7,093) | (4,637) | (4,336) | ||||||||||||
Claims and insurance benefits incurred (ceded) | 431 | 827 | 97 | 178 | ||||||||||||
Claims and insurance benefits incurred (net) | (6,247) | (6,266) | (4,540) | (4,158) | ||||||||||||
Change in reserves for insurance and investment contracts (net) | (70) | (97) | (1,389) | (2,211) | ||||||||||||
Interest expenses | (91) | (92) | (55) | (111) | ||||||||||||
Loan loss provisions | (1) | (9) | 4 | — | ||||||||||||
Impairments of investments (net) | (413) | (28) | (904) | (56) | ||||||||||||
Investment expenses | (79) | (69) | (82) | (163) | ||||||||||||
Acquisition and administrative expenses (net) | (2,589) | (2,705) | (1,285) | (1,115) | ||||||||||||
Fee and commission expenses | (248) | (190) | (70) | (43) | ||||||||||||
Amortization of intangible assets | (3) | (4) | — | — | ||||||||||||
Restructuring charges | (5) | (8) | (2) | (3) | ||||||||||||
Other expenses | — | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | — | — | (3) | — | ||||||||||||
Total expenses | (9,746) | (9,468) | (8,327) | (7,860) | ||||||||||||
Income (loss) before income taxes and minority interests in earnings | 2,309 | 2,074 | 645 | 773 | ||||||||||||
Income taxes | (432) | (578) | (200) | (234) | ||||||||||||
Minority interests in earnings | (55) | (116) | (20) | (60) | ||||||||||||
Net income (loss) | 1,822 | 1,380 | 425 | 479 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||||||||||||||||
— | — | — | — | — | — | (5) | (5) | 15,092 | 14,833 | |||||||||||||||||||||||||||
— | — | — | — | — | — | 5 | 5 | (1,225) | (1,415) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 692 | 921 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 14,559 | 14,339 | |||||||||||||||||||||||||||
2,067 | 2,214 | 22 | 33 | 285 | 245 | (293) | (339) | 7,226 | 7,316 | |||||||||||||||||||||||||||
(630) | 354 | 3 | 16 | (118) | (44) | 25 | 2 | (1,121) | (343) | |||||||||||||||||||||||||||
104 | 51 | — | 1 | 165 | 348 | (123) | (192) | 1,394 | 1,088 | |||||||||||||||||||||||||||
747 | 923 | 1,052 | 1,080 | 47 | 44 | (204) | (169) | 2,103 | 2,322 | |||||||||||||||||||||||||||
— | — | 7 | 3 | — | 9 | (4) | (26) | 15 | 6 | |||||||||||||||||||||||||||
— | — | — | — | 624 | 470 | — | — | 627 | 470 | |||||||||||||||||||||||||||
2,288 | 3,542 | 1,084 | 1,133 | 1,003 | 1,072 | (599) | (724) | 24,803 | 25,198 | |||||||||||||||||||||||||||
— | — | — | — | — | — | 2 | 8 | (11,313) | (11,421) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (2) | (8) | 526 | 997 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (10,787) | (10,424) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (7) | (24) | (1,466) | (2,332) | |||||||||||||||||||||||||||
(1,340) | (1,484) | (14) | (19) | (366) | (394) | 246 | 259 | (1,620) | (1,841) | |||||||||||||||||||||||||||
(68) | (65) | — | — | — | — | — | — | (65) | (74) | |||||||||||||||||||||||||||
(35) | (9) | (2) | — | (121) | (9) | (51) | — | (1,526) | (102) | |||||||||||||||||||||||||||
1 | (4) | (1) | (1) | (50) | (20) | 51 | 55 | (160) | (202) | |||||||||||||||||||||||||||
(1,165) | (1,334) | (544) | (555) | (73) | (251) | 15 | 10 | (5,641) | (5,950) | |||||||||||||||||||||||||||
(150) | (157) | (331) | (315) | (37) | (26) | 124 | 130 | (712) | (601) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (3) | (4) | |||||||||||||||||||||||||||
(1) | (3) | — | — | — | — | — | — | (8) | (14) | |||||||||||||||||||||||||||
(30) | 1 | — | — | — | — | — | (1) | (31) | — | |||||||||||||||||||||||||||
— | — | — | — | (595) | (456) | — | — | (598) | (456) | |||||||||||||||||||||||||||
(2,788) | (3,055) | (892) | (890) | (1,242) | (1,156) | 378 | 429 | (22,617) | (22,000) | |||||||||||||||||||||||||||
(500) | 487 | 192 | 243 | (239) | (84) | (221) | (295) | 2,186 | 3,198 | |||||||||||||||||||||||||||
(37) | (56) | (71) | (101) | 184 | 80 | 4 | 31 | (552) | (858) | |||||||||||||||||||||||||||
(15) | (20) | (1) | (8) | (3) | (4) | 2 | 8 | (92) | (200) | |||||||||||||||||||||||||||
(552) | 411 | 120 | 134 | (58) | (8) | (215) | (256) | 1,542 | 2,140 |
51
Table of Contents
Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Allianz Group
Business Segment Information – Consolidated Income Statements
For the six months ended June 30, 2008 and 2007
Property-Casualty | Life/Health | |||||||||||||||
Six months ended June 30, | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||
Premiums written | 23,552 | 24,093 | 11,019 | 10,251 | ||||||||||||
Ceded premiums written | (2,400) | (2,831) | (252) | (353) | ||||||||||||
Change in unearned premiums | (2,531) | (2,248) | (67) | (30) | ||||||||||||
Premiums earned (net) | 18,621 | 19,014 | 10,700 | 9,868 | ||||||||||||
Interest and similar income | 2,382 | 2,386 | 7,014 | 6,938 | ||||||||||||
Income from financial assets and liabilities carried at fair value through income (net) | 31 | (14) | (113) | (979) | ||||||||||||
Realized gains/losses (net) | 1,391 | 984 | 887 | 1,856 | ||||||||||||
Fee and commission income | 560 | 552 | 339 | 335 | ||||||||||||
Other income | 257 | 95 | 115 | 63 | ||||||||||||
Income from fully consolidated private equity investments | — | — | 3 | — | ||||||||||||
Total income | 23,242 | 23,017 | 18,945 | 18,081 | ||||||||||||
Claims and insurance benefits incurred (gross) | (13,536) | (14,267) | (9,767) | (9,214) | ||||||||||||
Claims and insurance benefits incurred (ceded) | 988 | 1,618 | 214 | 354 | ||||||||||||
Claims and insurance benefits incurred (net) | (12,548) | (12,649) | (9,553) | (8,860) | ||||||||||||
Change in reserves for insurance and investment contracts (net) | (99) | (178) | (3,192) | (4,835) | ||||||||||||
Interest expenses | (179) | (184) | (125) | (202) | ||||||||||||
Loan loss provisions | (1) | (9) | 6 | (3) | ||||||||||||
Impairments of investments (net) | (848) | (54) | (1,888) | (93) | ||||||||||||
Investment expenses | (202) | (143) | (410) | (359) | ||||||||||||
Acquisition and administrative expenses (net) | (4,980) | (5,380) | (2,393) | (1,989) | ||||||||||||
Fee and commission expenses | (496) | (387) | (130) | (105) | ||||||||||||
Amortization of intangible assets | (7) | (6) | (1) | (1) | ||||||||||||
Restructuring charges | 1 | (22) | (3) | (8) | ||||||||||||
Other expenses | — | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | — | — | (3) | — | ||||||||||||
Total expenses | (19,359) | (19,012) | (17,693) | (16,455) | ||||||||||||
Income (loss) before income taxes and minority interests in earnings | 3,883 | 4,005 | 1,252 | 1,626 | ||||||||||||
Income taxes | (910) | (1,115) | (336) | (435) | ||||||||||||
Minority interests in earnings | (94) | (330) | (39) | (159) | ||||||||||||
Net income (loss) | 2,879 | 2,560 | 877 | 1,032 |
52
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||||||||||||||||
— | — | — | — | — | — | (11) | (8) | 34,560 | 34,336 | |||||||||||||||||||||||||||
— | — | — | — | — | — | 11 | 8 | (2,641) | (3,176) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (2,598) | (2,278) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 29,321 | 28,882 | |||||||||||||||||||||||||||
4,305 | 4,423 | 50 | 66 | 515 | 399 | (630) | (630) | 13,636 | 13,582 | |||||||||||||||||||||||||||
(1,192) | 695 | (1) | 23 | 90 | 41 | 12 | 6 | (1,173) | (228) | |||||||||||||||||||||||||||
166 | 190 | 8 | 3 | 149 | 988 | 120 | 276 | 2,721 | 4,297 | |||||||||||||||||||||||||||
1,531 | 1,901 | 2,038 | 2,153 | 112 | 89 | (376) | (352) | 4,204 | 4,678 | |||||||||||||||||||||||||||
— | — | 12 | 7 | 1 | 14 | (19) | (80) | 366 | 99 | |||||||||||||||||||||||||||
— | — | — | — | 1,203 | 941 | — | — | 1,206 | 941 | |||||||||||||||||||||||||||
4,810 | 7,209 | 2,107 | 2,252 | 2,070 | 2,472 | (893) | (780) | 50,281 | 52,251 | |||||||||||||||||||||||||||
— | — | — | — | — | — | 4 | 13 | (23,299) | (23,468) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (4) | (13) | 1,198 | 1,959 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (22,101) | (21,509) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (20) | (55) | (3,311) | (5,068) | |||||||||||||||||||||||||||
(2,882) | (2,765) | (23) | (30) | (791) | (747) | 554 | 489 | (3,446) | (3,439) | |||||||||||||||||||||||||||
(80) | (60) | — | — | — | — | — | — | (75) | (72) | |||||||||||||||||||||||||||
(65) | (22) | (5) | — | (166) | — | (51) | — | (3,023) | (169) | |||||||||||||||||||||||||||
3 | (13) | — | — | (94) | (54) | 106 | 106 | (597) | (463) | |||||||||||||||||||||||||||
(2,383) | (2,744) | (1,150) | (1,145) | (219) | (368) | 38 | 38 | (11,087) | (11,588) | |||||||||||||||||||||||||||
(290) | (303) | (611) | (642) | (66) | (61) | 226 | 263 | (1,367) | (1,235) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (8) | (7) | |||||||||||||||||||||||||||
15 | (12) | — | (2) | — | — | — | — | 13 | (44) | |||||||||||||||||||||||||||
(36) | 14 | — | — | — | — | — | (1) | (37) | 13 | |||||||||||||||||||||||||||
— | — | — | — | (1,151) | (916) | — | — | (1,154) | (916) | |||||||||||||||||||||||||||
(5,718) | (5,905) | (1,789) | (1,819) | (2,487) | (2,146) | 853 | 840 | (46,193) | (44,497) | |||||||||||||||||||||||||||
(908) | 1,304 | 318 | 433 | (417) | 326 | (40) | 60 | 4,088 | 7,754 | |||||||||||||||||||||||||||
(153) | (224) | (117) | (181) | 270 | 55 | 20 | 75 | (1,226) | (1,825) | |||||||||||||||||||||||||||
(29) | (44) | (3) | (19) | (10) | (8) | 3 | 11 | (172) | (549) | |||||||||||||||||||||||||||
(1,090) | 1,036 | 198 | 233 | (157) | 373 | (17) | 146 | 2,690 | 5,380 |
53
Table of Contents
Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Allianz Group
Business Segment Information – Total revenues and reconciliation of
Operating Profit and Net Income For the three months ended June 30, 2008
and 2007
Property-Casualty1) | Life/Health1) | |||||||||||||||
Three months ended June 30, | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||
Total revenues2) | 9,842 | 9,982 | 10,729 | 11,758 | ||||||||||||
Premiums earned (net) | 9,448 | 9,656 | 5,111 | 4,683 | ||||||||||||
Interest and similar income | 1,331 | 1,380 | 3,814 | 3,783 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net) | (60) | (1) | (352) | (668) | ||||||||||||
Operating realized gains/losses (net) | 61 | 1 | 273 | 646 | ||||||||||||
Fee and commission income | 293 | 280 | 168 | 164 | ||||||||||||
Other income | 7 | 11 | 5 | 9 | ||||||||||||
Income from fully consolidated private equity investments | — | — | 3 | — | ||||||||||||
Claims and insurance benefits incurred (net) | (6,247) | (6,266) | (4,540) | (4,158) | ||||||||||||
Change in reserves for insurance and investment contracts (net) | (70) | (97) | (1,389) | (2,211) | ||||||||||||
Interest expenses, excluding interest expenses from external debt | (91) | (92) | (55) | (111) | ||||||||||||
Loan loss provisions | (1) | (9) | 4 | — | ||||||||||||
Operating impairments of investments (net) | (72) | (5) | (898) | (56) | ||||||||||||
Investment expenses | (79) | (69) | (82) | (163) | ||||||||||||
Acquisition and administrative expenses (net), excluding acquisition-related expenses | (2,589) | (2,705) | (1,285) | (1,115) | ||||||||||||
Fee and commission expenses | (248) | (190) | (70) | (43) | ||||||||||||
Operating restructuring charges | — | — | — | (2) | ||||||||||||
Other expenses | — | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | — | — | (3) | — | ||||||||||||
Reclassification of tax benefits | — | — | — | — | ||||||||||||
Operating profit (loss) | 1,683 | 1,894 | 703 | 758 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net) | 14 | (1) | (3) | (1) | ||||||||||||
Non-operating realized gains/losses (net) | 961 | 216 | (47) | 17 | ||||||||||||
Non-operating impairments of investments (net) | (341) | (23) | (6) | — | ||||||||||||
Interest expenses from external debt | — | — | — | — | ||||||||||||
Acquisition-related expenses | — | — | — | — | ||||||||||||
Amortization of intangible assets | (3) | (4) | — | — | ||||||||||||
Non-operating restructuring charges | (5) | (8) | (2) | (1) | ||||||||||||
Reclassification of tax benefits | — | — | — | — | ||||||||||||
Non-operating items | 626 | 180 | (58) | 15 | ||||||||||||
Income (loss) before income taxes and minority interests in earnings | 2,309 | 2,074 | 645 | 773 | ||||||||||||
Income taxes | (432) | (578) | (200) | (234) | ||||||||||||
Minority interests in earnings | (55) | (116) | (20) | (60) | ||||||||||||
Net income (loss) | 1,822 | 1,380 | 425 | 479 |
1) | Since the first quarter 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. |
54
Table of Contents
Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||||||||||||||||
694 | 1,850 | 738 | 797 | — | — | 34 | (50) | 22,037 | 24,337 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 14,559 | 14,339 | |||||||||||||||||||||||||||
2,067 | 2,214 | 22 | 33 | 285 | 245 | (293) | (339) | 7,226 | 7,316 | |||||||||||||||||||||||||||
(630) | 354 | 3 | 16 | (55) | 39 | 65 | (46) | (1,029) | (306) | |||||||||||||||||||||||||||
— | — | — | — | — | — | 14 | (1) | 348 | 646 | |||||||||||||||||||||||||||
747 | 923 | 1,052 | 1,080 | 47 | 44 | (204) | (169) | 2,103 | 2,322 | |||||||||||||||||||||||||||
— | — | 7 | 3 | — | 9 | (4) | (26) | 15 | 6 | |||||||||||||||||||||||||||
— | — | — | — | 624 | 470 | — | — | 627 | 470 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (10,787) | (10,424) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (7) | (24) | (1,466) | (2,332) | |||||||||||||||||||||||||||
(1,340) | (1,484) | (14) | (19) | (133) | (116) | 246 | 259 | (1,387) | (1,563) | |||||||||||||||||||||||||||
(68) | (65) | — | — | — | — | — | — | (65) | (74) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (17) | — | (987) | (61) | |||||||||||||||||||||||||||
1 | (4) | (1) | (1) | (50) | (20) | 51 | 55 | (160) | (202) | |||||||||||||||||||||||||||
(1,165) | (1,334) | (457) | (472) | (81) | (199) | 15 | 10 | (5,562) | (5,815) | |||||||||||||||||||||||||||
(150) | (157) | (331) | (315) | (37) | (26) | 124 | 130 | (712) | (601) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | — | (2) | |||||||||||||||||||||||||||
(30) | 1 | — | — | — | — | — | (1) | (31) | — | |||||||||||||||||||||||||||
— | — | — | — | (595) | (456) | — | — | (598) | (456) | |||||||||||||||||||||||||||
— | — | — | — | — | — | 10 | 25 | 10 | 25 | |||||||||||||||||||||||||||
(568) | 448 | 281 | 325 | 5 | (10) | — | (127) | 2,104 | 3,288 | |||||||||||||||||||||||||||
— | — | — | — | (63) | (83) | (40) | 48 | (92) | (37) | |||||||||||||||||||||||||||
104 | 51 | — | 1 | 165 | 348 | (137) | (191) | 1,046 | 442 | |||||||||||||||||||||||||||
(35) | (9) | (2) | — | (121) | (9) | (34) | — | (539) | (41) | |||||||||||||||||||||||||||
— | — | — | — | (233) | (278) | — | — | (233) | (278) | |||||||||||||||||||||||||||
— | — | (87) | (83) | 8 | (52) | — | — | (79) | (135) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (3) | (4) | |||||||||||||||||||||||||||
(1) | (3) | — | — | — | — | — | — | (8) | (12) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (10) | (25) | (10) | (25) | |||||||||||||||||||||||||||
68 | 39 | (89) | (82) | (244) | (74) | (221) | (168) | 82 | (90) | |||||||||||||||||||||||||||
(500) | 487 | 192 | 243 | (239) | (84) | (221) | (295) | 2,186 | 3,198 | |||||||||||||||||||||||||||
(37) | (56) | (71) | (101) | 184 | 80 | 4 | 31 | (552) | (858) | |||||||||||||||||||||||||||
(15) | (20) | (1) | (8) | (3) | (4) | 2 | 8 | (92) | (200) | |||||||||||||||||||||||||||
(552) | 411 | 120 | 134 | (58) | (8) | (215) | (256) | 1,542 | 2,140 |
55
Table of Contents
Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Allianz Group
Business Segment Information – Total revenues and reconciliation of
Operating Profit and Net Income For the six months ended June 30, 2008
and 2007
Property-Casualty1) | Life/Health1) | |||||||||||||||
Six months ended June 30, | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | ||||||||||||
Total revenues2) | 23,552 | 24,093 | 23,056 | 24,084 | ||||||||||||
Premiums earned (net) | 18,621 | 19,014 | 10,700 | 9,868 | ||||||||||||
Interest and similar income | 2,382 | 2,386 | 7,014 | 6,938 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net) | (46) | 16 | (121) | (979) | ||||||||||||
Operating realized gains/losses (net) | 58 | 35 | 922 | 1,734 | ||||||||||||
Fee and commission income | 560 | 552 | 339 | 335 | ||||||||||||
Other income | 257 | 95 | 115 | 63 | ||||||||||||
Income from fully consolidated private equity investments | — | — | 3 | — | ||||||||||||
Claims and insurance benefits incurred (net) | (12,548) | (12,649) | (9,553) | (8,860) | ||||||||||||
Change in reserves for insurance and investment contracts (net) | (99) | (178) | (3,192) | (4,835) | ||||||||||||
Interest expenses, excluding interest expenses from external debt | (179) | (184) | (125) | (202) | ||||||||||||
Loan loss provisions | (1) | (9) | 6 | (3) | ||||||||||||
Operating impairments of investments (net) | (165) | (7) | (1,878) | (93) | ||||||||||||
Investment expenses | (202) | (143) | (410) | (359) | ||||||||||||
Acquisition and administrative expenses (net), excluding acquisition-related expenses | (4,980) | (5,380) | (2,393) | (1,989) | ||||||||||||
Fee and commission expenses | (496) | (387) | (130) | (105) | ||||||||||||
Operating restructuring charges | — | — | (1) | (5) | ||||||||||||
Other expenses | — | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | — | — | (3) | — | ||||||||||||
Reclassification of tax benefits | — | — | — | — | ||||||||||||
Operating profit (loss) | 3,162 | 3,161 | 1,292 | 1,508 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net) | 77 | (30) | 8 | — | ||||||||||||
Non-operating realized gains/losses (net) | 1,333 | 949 | (35) | 122 | ||||||||||||
Non-operating impairments of investments (net) | (683) | (47) | (10) | — | ||||||||||||
Interest expenses from external debt | — | — | — | — | ||||||||||||
Acquisition-related expenses | — | — | — | — | ||||||||||||
Amortization of intangible assets | (7) | (6) | (1) | (1) | ||||||||||||
Non-operating restructuring charges | 1 | (22) | (2) | (3) | ||||||||||||
Reclassification of tax benefits | — | — | — | — | ||||||||||||
Non-operating items | 721 | 844 | (40) | 118 | ||||||||||||
Income (loss) before income taxes and minority interests in earnings | 3,883 | 4,005 | 1,252 | 1,626 | ||||||||||||
Income taxes | (910) | (1,115) | (336) | (435) | ||||||||||||
Minority interests in earnings | (94) | (330) | (39) | (159) | ||||||||||||
Net income (loss) | 2,879 | 2,560 | 877 | 1,032 |
1) | Since the first quarter 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues. |
56
Table of Contents
Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking | Asset Management | Corporate | Consolidation | Group | ||||||||||||||||||||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||||||||||||||||
1,472 | 3,951 | 1,465 | 1,577 | — | — | 145 | (45) | 49,690 | 53,660 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | 29,321 | 28,882 | |||||||||||||||||||||||||||
4,305 | 4,423 | 50 | 66 | 515 | 399 | (630) | (630) | 13,636 | 13,582 | |||||||||||||||||||||||||||
(1,192) | 695 | (1) | 23 | (45) | 40 | 177 | (20) | (1,228) | (225) | |||||||||||||||||||||||||||
— | — | — | — | — | — | 17 | 13 | 997 | 1,782 | |||||||||||||||||||||||||||
1,531 | 1,901 | 2,038 | 2,153 | 112 | 89 | (376) | (352) | 4,204 | 4,678 | |||||||||||||||||||||||||||
— | — | 12 | 7 | 1 | 14 | (19) | (80) | 366 | 99 | |||||||||||||||||||||||||||
— | — | — | — | 1,203 | 941 | — | — | 1,206 | 941 | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (22,101) | (21,509) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (20) | (55) | (3,311) | (5,068) | |||||||||||||||||||||||||||
(2,882) | (2,765) | (23) | (30) | (306) | (247) | 554 | 489 | (2,961) | (2,939) | |||||||||||||||||||||||||||
(80) | (60) | — | — | — | — | — | — | (75) | (72) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (17) | — | (2,060) | (100) | |||||||||||||||||||||||||||
3 | (13) | — | — | (94) | (54) | 106 | 106 | (597) | (463) | |||||||||||||||||||||||||||
(2,383) | (2,744) | (943) | (940) | (240) | (316) | 38 | 38 | (10,901) | (11,331) | |||||||||||||||||||||||||||
(290) | (303) | (611) | (642) | (66) | (61) | 226 | 263 | (1,367) | (1,235) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (1) | (5) | |||||||||||||||||||||||||||
(36) | 14 | — | — | — | — | — | (1) | (37) | 13 | |||||||||||||||||||||||||||
— | — | — | — | (1,151) | (916) | — | — | (1,154) | (916) | |||||||||||||||||||||||||||
— | — | — | — | — | — | 23 | 44 | 23 | 44 | |||||||||||||||||||||||||||
(1,024) | 1,148 | 522 | 637 | (71) | (111) | 79 | (185) | 3,960 | 6,158 | |||||||||||||||||||||||||||
— | — | — | — | 135 | 1 | (165) | 26 | 55 | (3) | |||||||||||||||||||||||||||
166 | 190 | 8 | 3 | 149 | 988 | 103 | 263 | 1,724 | 2,515 | |||||||||||||||||||||||||||
(65) | (22) | (5) | — | (166) | — | (34) | — | (963) | (69) | |||||||||||||||||||||||||||
— | — | — | — | (485) | (500) | — | — | (485) | (500) | |||||||||||||||||||||||||||
— | — | (207) | (205) | 21 | (52) | — | — | (186) | (257) | |||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | (8) | (7) | |||||||||||||||||||||||||||
15 | (12) | — | (2) | — | — | — | — | 14 | (39) | |||||||||||||||||||||||||||
— | — | — | — | — | — | (23) | (44) | (23) | (44) | |||||||||||||||||||||||||||
116 | 156 | (204) | (204) | (346) | 437 | (119) | 245 | 128 | 1,596 | |||||||||||||||||||||||||||
(908) | 1,304 | 318 | 433 | (417) | 326 | (40) | 60 | 4,088 | 7,754 | |||||||||||||||||||||||||||
(153) | (224) | (117) | (181) | 270 | 55 | 20 | 75 | (1,226) | (1,825) | |||||||||||||||||||||||||||
(29) | (44) | (3) | (19) | (10) | (8) | 3 | 11 | (172) | (549) | |||||||||||||||||||||||||||
(1,090) | 1,036 | 198 | 233 | (157) | 373 | (17) | 146 | 2,690 | 5,380 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Operating Profit
The Allianz Group uses operating profit to evaluate the performance of its business segments and the Group as a whole. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz Group’s underlying operating performance and the comparability of its operating performance over time. Operating profit highlights the portion of income before income taxes and minority interests in earnings attributable to the ongoing core operations of the Allianz Group. To better understand the on-going operations of the business, we exclude the effects of acquisition-related expenses and the amortization of intangible assets, as these relate to business combinations; and we exclude interest expense from external debt and non-operating income from financial assets and liabilities carried at fair value through income (net) as these relate to our capital structure.
The Allianz Group believes that trends in the underlying profitability of it’s business can be more clearly identified without the fluctuating effects of the realized capital gains and losses or impairments of investment securities, as these are largely dependent on market cycles or issuer-specific events over which the Allianz Group has little or no control, and can and do vary, sometimes materially, across periods. Further, the timing of sales that would result in such gains or losses is largely at the discretion of the Allianz Group. Similarly, restructuring charges are excluded because the timing of the restructuring charges are largely within the control of the Allianz Group, and accordingly their exclusion provides additional insight into the operating trends of the underlying business. This differentiation is not made if the profit sources are shared with policyholders.
Operating profit should be viewed as complementary to, and not a substitute for, income before income taxes and minority interests in earnings or net income as determined in accordance with IFRS.
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Property-Casualty Segment1)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Gross premiums written2) | 9,842 | 9,982 | 23,552 | 24,093 | ||||||||||||
Ceded premiums written | (1,115) | (1,245) | (2,400) | (2,831) | ||||||||||||
Change in unearned premiums | 721 | 919 | (2,531) | (2,248) | ||||||||||||
Premiums earned (net) | 9,448 | 9,656 | 18,621 | 19,014 | ||||||||||||
Interest and similar income | 1,331 | 1,380 | 2,382 | 2,386 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net)3) | (60) | (1) | (46) | 16 | ||||||||||||
Operating realized gains/losses (net)4) | 61 | 1 | 58 | 35 | ||||||||||||
Fee and commission income | 293 | 280 | 560 | 552 | ||||||||||||
Other income | 7 | 11 | 257 | 95 | ||||||||||||
Operating revenues | 11,080 | 11,327 | 21,832 | 22,098 | ||||||||||||
Claims and insurance benefits incurred (net) | (6,247) | (6,266) | (12,548) | (12,649) | ||||||||||||
Changes in reserves for insurance and investment contracts (net) | (70) | (97) | (99) | (178) | ||||||||||||
Interest expenses | (91) | (92) | (179) | (184) | ||||||||||||
Loan loss provisions | (1) | (9) | (1) | (9) | ||||||||||||
Operating impairments of investments (net)5) | (72) | (5) | (165) | (7) | ||||||||||||
Investment expenses | (79) | (69) | (202) | (143) | ||||||||||||
Acquisition and administrative expenses (net) | (2,589) | (2,705) | (4,980) | (5,380) | ||||||||||||
Fee and commission expenses | (248) | (190) | (496) | (387) | ||||||||||||
Operating expenses | (9,397) | (9,433) | (18,670) | (18,937) | ||||||||||||
Operating profit | 1,683 | 1,894 | 3,162 | 3,161 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net)3) | 14 | (1) | 77 | (30) | ||||||||||||
Non-operating realized gains/losses (net)4) | 961 | 216 | 1,333 | 949 | ||||||||||||
Non-operating impairments of investments (net)5) | (341) | (23) | (683) | (47) | ||||||||||||
Amortization of intangible assets | (3) | (4) | (7) | (6) | ||||||||||||
Restructuring charges | (5) | (8) | 1 | (22) | ||||||||||||
Non-operating items | 626 | 180 | 721 | 844 | ||||||||||||
Income before income taxes and minority interests in earnings | 2,309 | 2,074 | 3,883 | 4,005 | ||||||||||||
Income taxes | (432) | (578) | (910) | (1,115) | ||||||||||||
Minority interests in earnings | (55) | (116) | (94) | (330) | ||||||||||||
Net income | 1,822 | 1,380 | 2,879 | 2,560 | ||||||||||||
Loss ratio6)in % | 66.1 | 64.9 | 67.4 | 66.5 | ||||||||||||
Expense ratio7)in % | 27.4 | 28.0 | 26.7 | 28.3 | ||||||||||||
Combined ratio8)in % | 93.5 | 92.9 | 94.1 | 94.8 |
1) | Since 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | For the Property-Casualty segment, total revenues are measured based upon gross premiums written. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement. |
4) | The total of these items equals realized gains/losses (net) in the segment income statement. |
5) | The total of these items equals impairments of investments (net) in the segment income statement. |
6) | Represents claims and insurance benefits incurred (net) divided by premiums earned (net). |
7) | Represents acquisition and administrative expenses (net) divided by premiums earned (net). |
8) | Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net). |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Life/Health Segment1)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Statutory premiums2) | 10,729 | 11,758 | 23,056 | 24,084 | ||||||||||||
Ceded premiums written | (124) | (186) | (267) | (379) | ||||||||||||
Change in unearned premiums | (29) | 3 | (66) | (24) | ||||||||||||
Statutory premiums (net) | 10,576 | 11,575 | 22,723 | 23,681 | ||||||||||||
Deposits from SFAS 97 insurance and investment contracts | (5,465) | (6,892) | (12,023) | (13,813) | ||||||||||||
Premiums earned (net) | 5,111 | 4,683 | 10,700 | 9,868 | ||||||||||||
Interest and similar income | 3,814 | 3,783 | 7,014 | 6,938 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net)3) | (352) | (668) | (121) | (979) | ||||||||||||
Operating realized gains/losses (net)4) | 273 | 646 | 922 | 1,734 | ||||||||||||
Fee and commission income | 168 | 164 | 339 | 335 | ||||||||||||
Other income | 5 | 9 | 115 | 63 | ||||||||||||
Income from fully consolidated private equity investments | 3 | — | 3 | — | ||||||||||||
Operating revenues | 9,022 | 8,617 | 18,972 | 17,959 | ||||||||||||
Claims and insurance benefits incurred (net) | (4,540) | (4,158) | (9,553) | (8,860) | ||||||||||||
Changes in reserves for insurance and investment contracts (net) | (1,389) | (2,211) | (3,192) | (4,835) | ||||||||||||
Interest expenses | (55) | (111) | (125) | (202) | ||||||||||||
Loan loss provisions | 4 | — | 6 | (3) | ||||||||||||
Operating impairments of investments (net)5) | (898) | (56) | (1,878) | (93) | ||||||||||||
Investment expenses | (82) | (163) | (410) | (359) | ||||||||||||
Acquisition and administrative expenses (net) | (1,285) | (1,115) | (2,393) | (1,989) | ||||||||||||
Fee and commission expenses | (70) | (43) | (130) | (105) | ||||||||||||
Operating restructuring charges6) | — | (2) | (1) | (5) | ||||||||||||
Other expenses | (1) | — | (1) | — | ||||||||||||
Expenses from fully consolidated private equity investments | (3) | — | (3) | — | ||||||||||||
Operating expenses | (8,319) | (7,859) | (17,680) | (16,451) | ||||||||||||
Operating profit | 703 | 758 | 1,292 | 1,508 | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net)3) | (3) | (1) | 8 | — | ||||||||||||
Non-operating realized gains/losses (net)4) | (47) | 17 | (35) | 122 | ||||||||||||
Non-operating impairments of investments (net)5) | (6) | — | (10) | — | ||||||||||||
Amortization of intangible assets | — | — | (1) | (1) | ||||||||||||
Non-operating restructuring charges6) | (2) | (1) | (2) | (3) | ||||||||||||
Non-operating items | (58) | 15 | (40) | 118 | ||||||||||||
Income before income taxes and minority interests in earnings | 645 | 773 | 1,252 | 1,626 | ||||||||||||
Income taxes | (200) | (234) | (336) | (435) | ||||||||||||
Minority interests in earnings | (20) | (60) | (39) | (159) | ||||||||||||
Net income | 425 | 479 | 877 | 1,032 | ||||||||||||
Statutory expense ratio7)in % | 12.2 | 9.6 | 10.5 | 8.4 |
1) | Since 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
2) | For the Life/Health segment, total revenues are measured based upon statutory premiums. Statutory premiums are gross premiums written from sales of life insurance policies, as well as gross receipts from sales of unit linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s home jurisdiction. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement. |
4) | The total of these items equals realized gains/losses (net) in the segment income statement. |
5) | The total of these items equals impairments of investments (net) in the segment income statement. |
6) | The total of these items equals restructuring charges in the segment income statement. |
7) | Represents acquisition and administrative expenses (net) divided by statutory premiums (net). |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking Segment
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||||||
Banking € mn | Dresdner Bank € mn | Banking € mn | Dresdner Bank € mn | Banking € mn | Dresdner Bank € mn | Banking € mn | Dresdner Bank € mn | |||||||||||||||||||||||||
Net interest income1) | 727 | 703 | 730 | 701 | 1,423 | 1,372 | 1,658 | 1,601 | ||||||||||||||||||||||||
Net fee and commission income2) | 597 | 558 | 766 | 718 | 1,241 | 1,162 | 1,598 | 1,507 | ||||||||||||||||||||||||
Trading income (net)3) | (697) | (694) | 338 | 335 | (1,403) | (1,392) | 689 | 680 | ||||||||||||||||||||||||
Income from financial assets and liabilities designated at fair value through income (net)3) | 67 | 67 | 16 | 16 | 211 | 211 | 6 | 5 | ||||||||||||||||||||||||
Other income | — | 1 | — | — | — | 1 | — | — | ||||||||||||||||||||||||
Operating revenues4) | 694 | 635 | 1,850 | 1,770 | 1,472 | 1,354 | 3,951 | 3,793 | ||||||||||||||||||||||||
Administrative expenses | (1,165) | (1,104) | (1,334) | (1,277) | (2,383) | (2,260) | (2,744) | (2,632) | ||||||||||||||||||||||||
Investment expenses | 1 | — | (4) | (5) | 3 | (1) | (13) | (16) | ||||||||||||||||||||||||
Other expenses | (30) | (31) | 1 | 1 | (36) | (36) | 14 | 14 | ||||||||||||||||||||||||
Operating expenses | (1,194) | (1,135) | (1,337) | (1,281) | (2,416) | (2,297) | (2,743) | (2,634) | ||||||||||||||||||||||||
Loan loss provisions | (68) | (66) | (65) | (62) | (80) | (76) | (60) | (55) | ||||||||||||||||||||||||
Operating profit (loss) | (568) | (566) | 448 | 427 | (1,024) | (1,019) | 1,148 | 1,104 | ||||||||||||||||||||||||
Realized gains/losses (net) | 104 | 103 | 51 | 43 | 166 | 166 | 190 | 180 | ||||||||||||||||||||||||
Impairments of investments (net) | (35) | (35) | (9) | (9) | (65) | (65) | (22) | (22) | ||||||||||||||||||||||||
Restructuring charges | (1) | (1) | (3) | (4) | 15 | 15 | (12) | (13) | ||||||||||||||||||||||||
Non-operating items | 68 | 67 | 39 | 30 | 116 | 116 | 156 | 145 | ||||||||||||||||||||||||
Income (loss) before income taxes and minority interests in earnings | (500) | (499) | 487 | 457 | (908) | (903) | 1,304 | 1,249 | ||||||||||||||||||||||||
Income taxes | (37) | (35) | (56) | (44) | (153) | (129) | (224) | (202) | ||||||||||||||||||||||||
Minority interests in earnings | (15) | (11) | (20) | (18) | (29) | (26) | (44) | (40) | ||||||||||||||||||||||||
Net income (loss) | (552) | (545) | 411 | 395 | (1,090) | (1,058) | 1,036 | 1,007 | ||||||||||||||||||||||||
Cost-income ratio5)in % | 172.0 | 178.7 | 72.3 | 72.4 | 164.1 | 169.6 | 69.4 | 69.4 |
1) | Represents interest and similar income less interest expenses. |
2) | Represents fee and commission income less fee and commission expenses. |
3) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement. |
4) | For the Banking segment, total revenues are measured based upon operating revenues. |
5) | Represents operating expenses divided by operating revenues. |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Asset Management Segment
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||||||
Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | Asset € mn | Allianz Global € mn | |||||||||||||||||||||||||
Net fee and commission income1) | 721 | 705 | 765 | 743 | 1,427 | 1,398 | 1,511 | 1,471 | ||||||||||||||||||||||||
Net interest income2) | 7 | 11 | 13 | 17 | 27 | 26 | 36 | 36 | ||||||||||||||||||||||||
Income from financial assets and liabilities carried at fair value through income (net) | 3 | 2 | 16 | 15 | (1) | (1) | 23 | 22 | ||||||||||||||||||||||||
Other income | 7 | 7 | 3 | 3 | 12 | 12 | 7 | 7 | ||||||||||||||||||||||||
Operating revenues3) | 738 | 725 | 797 | 778 | 1,465 | 1,435 | 1,577 | 1,536 | ||||||||||||||||||||||||
Administrative expenses, excluding acquisition-related expenses4) | (457) | (451) | (472) | (464) | (943) | (923) | (940) | (918) | ||||||||||||||||||||||||
Operating expenses | (457) | (451) | (472) | (464) | (943) | (923) | (940) | (918) | ||||||||||||||||||||||||
Operating profit | 281 | 274 | 325 | 314 | 522 | 512 | 637 | 618 | ||||||||||||||||||||||||
Realized gains/losses (net) | — | — | 1 | 1 | 8 | 8 | 3 | 3 | ||||||||||||||||||||||||
Impairments of investments (net) | (2) | (2) | — | — | (5) | (5) | — | — | ||||||||||||||||||||||||
Acquisition-related expenses4), thereof: | ||||||||||||||||||||||||||||||||
Deferred purchases of interests in PIMCO | (87) | (87) | (80) | (80) | (207) | (207) | (202) | (202) | ||||||||||||||||||||||||
Other acquisition-related expenses | — | — | (3) | (3) | — | — | (3) | (3) | ||||||||||||||||||||||||
Subtotal | (87) | (87) | (83) | (83) | (207) | (207) | (205) | (205) | ||||||||||||||||||||||||
Restructuring charges | — | — | — | — | — | — | (2) | (2) | ||||||||||||||||||||||||
Non-operating items | (89) | (89) | (82) | (82) | (204) | (204) | (204) | (204) | ||||||||||||||||||||||||
Income before income taxes and minority interests in earnings | 192 | 185 | 243 | 232 | 318 | 308 | 433 | 414 | ||||||||||||||||||||||||
Income taxes | (71) | (71) | (101) | (100) | (117) | (116) | (181) | (179) | ||||||||||||||||||||||||
Minority interests in earnings | (1) | — | (8) | (6) | (3) | (2) | (19) | (16) | ||||||||||||||||||||||||
Net income | 120 | 114 | 134 | 126 | 198 | 190 | 233 | 219 | ||||||||||||||||||||||||
Cost-income ratio5)in % | 61.9 | 62.2 | 59.2 | 59.6 | 64.4 | 64.3 | 59.6 | 59.8 |
1) | Represents fee and commission income less fee and commission expenses. |
2) | Represents interest and similar income less interest expenses and investment expenses. |
3) | For the Asset Management segment, total revenues are measured based upon operating revenues. |
4) | The total of these items equals acquisition and administrative expenses (net) in the segment income statement. |
5) | Represents operating expenses divided by operating revenues |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Corporate Segment
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Interest and similar income | 285 | 245 | 515 | 399 | ||||||||||||
Operating income from financial assets and liabilities carried at fair value through income (net)1) | (55) | 39 | (45) | 40 | ||||||||||||
Fee and commission income | 47 | 44 | 112 | 89 | ||||||||||||
Other income | — | 9 | 1 | 14 | ||||||||||||
Income from fully consolidated private equity investments | 624 | 470 | 1,203 | 941 | ||||||||||||
Operating revenues | 901 | 807 | 1,786 | 1,483 | ||||||||||||
Interest expenses, excluding interest expenses from external debt2) | (133) | (116) | (306) | (247) | ||||||||||||
Investment expenses | (50) | (20) | (94) | (54) | ||||||||||||
Acquisition and administrative expenses (net), excluding acquisition-related expenses3) | (81) | (199) | (240) | (316) | ||||||||||||
Fee and commission expenses | (37) | (26) | (66) | (61) | ||||||||||||
Expenses from fully consolidated private equity investments | (595) | (456) | (1,151) | (916) | ||||||||||||
Operating expenses | (896) | (817) | (1,857) | (1,594) | ||||||||||||
Operating profit (loss) | 5 | (10) | (71) | (111) | ||||||||||||
Non-operating income from financial assets and liabilities carried at fair value through income (net)1) | (63) | (83) | 135 | 1 | ||||||||||||
Realized gains/losses (net) | 165 | 348 | 149 | 988 | ||||||||||||
Interest expenses from external debt2) | (233) | (278) | (485) | (500) | ||||||||||||
Impairments of investments (net) | (121) | (9) | (166) | — | ||||||||||||
Acquisition-related expenses3) | 8 | (52) | 21 | (52) | ||||||||||||
Non-operating items | (244) | (74) | (346) | 437 | ||||||||||||
Income (loss) before income taxes and minority interests in earnings | (239) | (84) | (417) | 326 | ||||||||||||
Income taxes | 184 | 80 | 270 | 55 | ||||||||||||
Minority interests in earnings | (3) | (4) | (10) | (8) | ||||||||||||
Net income (loss) | (58) | (8) | (157) | 373 |
1) | The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement. |
2) | The total of these items equals interest expenses in the segment income statement. |
3) | The total of these items equals acquisition and administrative expenses (net) in the segment income statement. |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Supplementary Information to the Consolidated Balance Sheets
4 Financial assets carried at fair value through income
As of June 30, 2008 € mn | As of 2007 € mn | |||||||
Financial assets held for trading | ||||||||
Debt securities1) | 52,694 | 59,715 | ||||||
Equity securities | 16,263 | 30,596 | ||||||
Derivative financial instruments | 98,046 | 73,230 | ||||||
Subtotal | 167,003 | 163,541 | ||||||
Financial assets designated at fair value through income | ||||||||
Debt securities2)3)4) | 20,476 | 15,924 | ||||||
Equity securities | 4,403 | 4,232 | ||||||
Loans to banks and customers | 6,518 | 1,764 | ||||||
Subtotal | 31,397 | 21,920 | ||||||
Total | 198,400 | 185,461 |
1) | Debt securities held for trading include€11.1 bn (2007:€15.1 bn) of asset-backed securities of Dresdner Bank as of June 30, 2008. |
2) | Debt securities designated at fair value through income include€5.7 bn (2007:€2.8 bn) of credit investment related conduits (“CIRC”) of Dresdner Bank as of June 30, 2008. |
3) | Debt securities designated at fair value through income include€0.8 bn (2007:€0.8 bn) of asset-backed securities of the Life/Health segment as of June 30, 2008. |
4) | The increase in debt securities at fair value through income is mainly related to the application of the fair value option for money market business. |
As of June 30, 2008 € mn | As of € mn | |||||||
Available-for-sale investments | 251,495 | 268,001 | ||||||
Held-to-maturity investments | 5,065 | 4,659 | ||||||
Funds held by others under reinsurance contracts assumed | 1,074 | 1,063 | ||||||
Investments in associates and joint ventures | 5,805 | 5,471 | ||||||
Real estate held for investment | 7,732 | 7,758 | ||||||
Total | 271,171 | 286,952 |
Available-for-sale investments
As of June 30, 2008 | As of December 31, 2007 | |||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | Amortized | Unrealized | Unrealized | Fair Value | |||||||||||||||||||||||||
Cost € mn | Gains € mn | Losses € mn | € mn | Cost € mn | Gains € mn | Losses € mn | € mn | |||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
Government and agency mortgage-backed securities (residential and commercial)1) | 7,326 | 20 | (161) | 7,185 | 7,628 | 30 | (112) | 7,546 | ||||||||||||||||||||||||
Corporate mortgage-backed securities (residential and commercial)1) | 6,673 | — | (304) | 6,369 | 6,663 | 39 | (101) | 6,601 | ||||||||||||||||||||||||
Other asset-backed securities1) | 5,433 | 13 | (197) | 5,249 | 5,384 | 34 | (92) | 5,326 | ||||||||||||||||||||||||
Government and government agency bonds | 93,216 | 598 | (3,137) | 90,677 | 98,285 | 1,334 | (1,479) | 98,140 | ||||||||||||||||||||||||
Corporate bonds | 97,743 | 303 | (4,702) | 93,344 | 86,095 | 660 | (2,356) | 84,399 | ||||||||||||||||||||||||
Other | 1,603 | 47 | (45) | 1,605 | 2,933 | 99 | (104) | 2,928 | ||||||||||||||||||||||||
Subtotal | 211,994 | 981 | (8,546) | 204,429 | 206,988 | 2,196 | (4,244) | 204,940 | ||||||||||||||||||||||||
Equity securities | 34,537 | 13,882 | (1,353) | 47,066 | 40,794 | 22,734 | (467) | 63,061 | ||||||||||||||||||||||||
Total | 246,531 | 14,863 | (9,899) | 251,495 | 247,782 | 24,930 | (4,711) | 268,001 |
1) | Includes asset-backed securities of the Property-Casualty segment of€4.6 bn (2007:€4.9 bn) and of the Life/Health segment of€12.8 bn (2007:€13.0 bn) as of June 30, 2008. |
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6 Loans and advances to banks and customers
As of June 30, 2008 | As of December 31, 2007 | |||||||||||||||||||||||
Banks € mn | Customers € mn | Total € mn | Banks € mn | Customers € mn | Total € mn | |||||||||||||||||||
Short-term investments and certificates of deposit | 9,503 | — | 9,503 | 10,316 | — | 10,316 | ||||||||||||||||||
Reverse repurchase agreements | 53,942 | 47,232 | 101,174 | 68,340 | 56,991 | 125,331 | ||||||||||||||||||
Collateral paid for securities borrowing transactions | 12,270 | 16,002 | 28,272 | 16,664 | 23,714 | 40,378 | ||||||||||||||||||
Loans | 76,625 | 124,643 | 201,268 | 74,944 | 125,403 | 200,347 | ||||||||||||||||||
Other | 9,210 | 10,859 | 20,069 | 14,012 | 7,148 | 21,160 | ||||||||||||||||||
Subtotal | 161,550 | 198,736 | 360,286 | 184,276 | 213,256 | 397,532 | ||||||||||||||||||
Loan loss allowance | (3) | (821) | (824) | (3) | (827) | (830) | ||||||||||||||||||
Total | 161,547 | 197,915 | 359,462 | 184,273 | 212,429 | 396,702 |
Loans and advances to customers by type of customer
As of June 30, 2008 € mn | As of € mn | |||||||
Corporate customers | 132,768 | 148,848 | ||||||
Private customers | 54,749 | 55,761 | ||||||
Public authorities | 11,219 | 8,647 | ||||||
Total | 198,736 | 213,256 |
As of June 30, 2008 € mn | As of € mn | |||||||
Unearned premiums | 1,663 | 1,342 | ||||||
Reserves for loss and loss adjustment expenses | 8,015 | 8,561 | ||||||
Aggregate policy reserves | 4,735 | 5,319 | ||||||
Other insurance reserves | 99 | 90 | ||||||
Total | 14,512 | 15,312 |
As of June 30, 2008 € mn | As of € mn | |||||||
Deferred acquisition costs | ||||||||
Property-Casualty | 3,989 | 3,675 | ||||||
Life/Health | 14,632 | 14,118 | ||||||
Asset Management | 158 | 94 | ||||||
Subtotal | 18,779 | 17,887 | ||||||
Present value of future profits | 1,209 | 1,206 | ||||||
Deferred sales inducements | 524 | 520 | ||||||
Total | 20,512 | 19,613 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
As of June 30, 2008 € mn | As of € mn | |||||||
Receivables | ||||||||
Policyholders | 4,421 | 4,616 | ||||||
Agents | 3,960 | 3,956 | ||||||
Reinsurers | 2,389 | 2,676 | ||||||
Other | 4,500 | 4,994 | ||||||
Less allowance for doubtful accounts | (455) | (389) | ||||||
Subtotal | 14,815 | 15,853 | ||||||
Tax receivables | ||||||||
Income tax | 2,270 | 2,536 | ||||||
Other tax | 734 | 731 | ||||||
Subtotal | 3,004 | 3,267 | ||||||
Accrued dividends, interest and rent | 8,905 | 8,782 | ||||||
Prepaid expenses | ||||||||
Interest and rent | 26 | 29 | ||||||
Other prepaid expenses | 393 | 261 | ||||||
Subtotal | 419 | 290 | ||||||
Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments | 436 | 344 | ||||||
Property and equipment | ||||||||
Real estate held for own use | 3,730 | 3,708 | ||||||
Equipment | 1,584 | 1,666 | ||||||
Software | 1,191 | 1,165 | ||||||
Subtotal | 6,505 | 6,539 | ||||||
Non-current assets and disposal groups held for sale | 1,587 | 3,503 | ||||||
Other assets1) | 3,489 | 2,950 | ||||||
Total | 39,160 | 41,528 |
1) | As of June 30, 2008, includes prepaid benefit costs for defined benefit plans of€535 mn. |
Non-current assets and disposal groups held for sale as of June 30, 2008 include assets related to Selecta AG of €1,579 mn (2007: €1,543 mn) with related liabilities of €1,305 mn (2007: €1,292 mn).
As of June 30, 2008 € mn | As of € mn | |||||||
Goodwill | 12,238 | 12,453 | ||||||
Brand names | 745 | 737 | ||||||
Other | 218 | 223 | ||||||
Total | 13,201 | 13,413 |
Changes in goodwill for the six months ended June 30, 2008, were as follows:
2008 € mn | ||||
Cost as of January 1, | 12,677 | |||
Accumulated impairments as of January 1, | (224) | |||
Carrying amount as of January 1, | 12,453 | |||
Additions | 1 | |||
Foreign currency translation adjustments | (216) | |||
Carrying amount as of June 30, | 12,238 | |||
Accumulated impairments as of June 30, | 224 | |||
Cost as of June 30, | 12,462 |
11 Financial liabilities carried at fair value through income
As of June 30, 2008 € mn | As of € mn | |||||||
Financial liabilities held for trading | ||||||||
Obligations to deliver securities | 22,348 | 34,795 | ||||||
Derivative financial instruments | 98,760 | 76,819 | ||||||
Other trading liabilities | 11,189 | 12,469 | ||||||
Subtotal | 132,297 | 124,083 | ||||||
Financial liabilities designated at fair value through income1) | 25,762 | 1,970 | ||||||
Total | 158,059 | 126,053 |
1) | The increase in financial liabilities designated at fair value through income is mainly related to the application of the fair value option for money market business. |
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12 Liabilities to banks and customers
As of June 30, 2008 | As of December 31, 2007 | |||||||||||||||||||||||
Banks € mn | Customers € mn | Total € mn | Banks € mn | Customers € mn | Total € mn | |||||||||||||||||||
Payable on demand | 14,666 | 61,191 | 75,857 | 11,204 | 60,443 | 71,647 | ||||||||||||||||||
Savings deposits | — | 5,297 | 5,297 | — | 5,304 | 5,304 | ||||||||||||||||||
Term deposits and certificates of deposit | 36,150 | 69,897 | 106,047 | 64,129 | 72,938 | 137,067 | ||||||||||||||||||
Repurchase agreements | 37,041 | 38,111 | 75,152 | 50,444 | 42,145 | 92,589 | ||||||||||||||||||
Collateral received from securities lending transactions | 13,566 | 6,685 | 20,251 | 16,235 | 4,729 | 20,964 | ||||||||||||||||||
Other | 3,186 | 2,942 | 6,128 | 5,513 | 3,410 | 8,923 | ||||||||||||||||||
Total | 104,609 | 184,123 | 288,732 | 147,525 | 188,969 | 336,494 |
13 Reserves for loss and loss adjustment expenses
As of June 30, 2008 € mn | As of € mn | |||||||
Property-Casualty | 54,843 | 56,943 | ||||||
Life/Health | 8,264 | 6,773 | ||||||
Consolidation | (8) | (10) | ||||||
Total | 63,099 | 63,706 |
Changes in the reserves for loss and loss adjustment expenses for the Property-Casualty segment for the six months ended June 30, 2008 and June 30, 2007, are as follows:
2008 | 2007 | |||||||||||||||||||||||
Gross € mn | Ceded € mn | Net € mn | Gross € mn | Ceded € mn | Net € mn | |||||||||||||||||||
As of January 1, | 56,943 | (8,266) | 48,677 | 58,664 | (9,333) | 49,331 | ||||||||||||||||||
Loss and loss adjustment expenses incurred | ||||||||||||||||||||||||
Current year | 14,684 | (1,350) | 13,334 | 15,114 | (1,822) | 13,292 | ||||||||||||||||||
Prior years | (1,148) | 362 | (786) | (847) | 204 | (643) | ||||||||||||||||||
Subtotal | 13,536 | (988) | 12,548 | 14,267 | (1,618) | 12,649 | ||||||||||||||||||
Loss and loss adjustment expenses paid | ||||||||||||||||||||||||
Current year | (4,747) | 238 | (4,509) | (5,086) | 402 | (4,684) | ||||||||||||||||||
Prior years | (8,769) | 1,052 | (7,717) | (9,384) | 1,199 | (8,185) | ||||||||||||||||||
Subtotal | (13,516) | 1,290 | (12,226) | (14,470) | 1,601 | (12,869) | ||||||||||||||||||
Foreign currency translation adjustments and other changes | (640) | 218 | (422) | (617) | 358 | (259) | ||||||||||||||||||
Changes in the consolidated subsidiaries of the Allianz Group | 1 | — | 1 | 122 | (14) | 108 | ||||||||||||||||||
Reclassifications1) | (1,481) | 90 | (1,391) | — | — | — | ||||||||||||||||||
As of June 30, | 54,843 | (7,656) | 47,187 | 57,966 | (9,006) | 48,960 |
1) | Since 1Q 2008, health business in Belgium and France is shown within Life/Health segment. Prior year balances have not been adjusted. |
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14 Reserves for insurance and investment contracts
As of € mn | As of € mn | |||||||
Aggregate policy reserves | 267,792 | 264,243 | ||||||
Reserves for premium refunds | 19,525 | 27,225 | ||||||
Other insurance reserves | 607 | 776 | ||||||
Total | 287,924 | 292,244 |
As of € mn | As of € mn | |||||||
Payables | ||||||||
Policyholders | 4,452 | 4,806 | ||||||
Reinsurance | 1,685 | 1,844 | ||||||
Agents | 1,458 | 1,743 | ||||||
Subtotal | 7,595 | 8,393 | ||||||
Payables for social security | 376 | 196 | ||||||
Tax payables | ||||||||
Income tax | 1,512 | 2,563 | ||||||
Other | 1,536 | 1,012 | ||||||
Subtotal | 3,048 | 3,575 | ||||||
Accrued interest and rent | 3,302 | 4,226 | ||||||
Unearned income | ||||||||
Interest and rent | 22 | 6 | ||||||
Other | 707 | 351 | ||||||
Subtotal | 729 | 357 | ||||||
Provisions | ||||||||
Pensions and similar obligations | 3,939 | 4,184 | ||||||
Employee related | 2,196 | 2,956 | ||||||
Share-based compensation | 1,335 | 1,761 | ||||||
Restructuring plans | 397 | 541 | ||||||
Loan commitments | 168 | 201 | ||||||
Contingent losses from non-insurance business | 155 | 134 | ||||||
Other provisions | 1,812 | 1,857 | ||||||
Subtotal | 10,002 | 11,634 | ||||||
Deposits retained for reinsurance ceded | 2,819 | 3,227 | ||||||
Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments | 1,350 | 2,210 | ||||||
Financial liabilities for puttable equity instruments | 3,515 | 4,162 | ||||||
Disposal groups held for sale | 1,305 | 1,293 | ||||||
Other liabilities | 10,638 | 10,051 | ||||||
Total | 44,679 | 49,324 |
As of June 30, 2008 € mn | As of December 31, 2007 € mn | |||||||
Allianz SE1) | ||||||||
Senior bonds | 4,073 | 4,279 | ||||||
Exchangeable bonds | — | 450 | ||||||
Money market securities | 2,875 | 2,929 | ||||||
Subtotal | 6,948 | 7,658 | ||||||
Banking subsidiaries | ||||||||
Senior bonds | 14,931 | 18,111 | ||||||
Money market securities | 12,223 | 16,298 | ||||||
Subtotal | 27,154 | 34,409 | ||||||
All other subsidiaries | ||||||||
Certificated liabilities | 28 | 3 | ||||||
Subtotal | 28 | 3 | ||||||
Total | 34,130 | 42,070 |
1) | Includes senior bonds, exchangeable bonds and money market securities issued by Allianz Finance B.V. and Allianz Finance II B.V. guaranteed by Allianz SE and money market securities issued by Allianz Finance Corporation, a wholly-owned subsidiary of Allianz SE, which are fully and unconditionally guaranteed by Allianz SE. |
17 Participation certificates and subordinated liabilities
As of June 30, 2008 € mn | As of December 31, 2007 € mn | |||||||
Allianz SE1) | ||||||||
Subordinated bonds2) | 8,065 | 6,853 | ||||||
Participation certificates | 85 | 85 | ||||||
Subtotal | 8,150 | 6,938 | ||||||
Banking subsidiaries | ||||||||
Subordinated bonds | 2,854 | 2,822 | ||||||
Hybrid equity | 2,383 | 2,429 | ||||||
Participation certificates | 768 | 1,686 | ||||||
Subtotal | 6,005 | 6,937 | ||||||
All other subsidiaries | ||||||||
Subordinated liabilities | 845 | 904 | ||||||
Hybrid equity | 45 | 45 | ||||||
Subtotal | 890 | 949 | ||||||
Total | 15,045 | 14,824 |
1) | Includes subordinated bonds issued by Allianz Finance B.V. and Allianz Finance II B.V. and guaranteed by Allianz SE. |
2) | In June 2008 Allianz SE issued undated subordinated bond in the aggregate principal amount of USD 2,000 mn at a coupon rate of 8.375 % p.a. |
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As of € mn | As of € mn | |||||||
Shareholders’ equity | ||||||||
Issued capital | 1,158 | 1,152 | ||||||
Capital reserve | 27,366 | 27,169 | ||||||
Revenue reserves | 12,515 | 12,790 | ||||||
Treasury shares | (133) | (172) | ||||||
Foreign currency translation adjustments | (4,385) | (3,656) | ||||||
Unrealized gains and losses (net)1) | 3,936 | 10,470 | ||||||
Subtotal | 40,457 | 47,753 | ||||||
Minority interests | 3,398 | 3,628 | ||||||
Total | 43,855 | 51,381 |
1) | As of June 30, 2008 includes€190 mn related to cash flow hedges (2007:€175 mn). |
Dividends
In the second quarter of 2008 a total dividend of €2,472 mn (2007: €1,642 mn) or €5.50 (2007: €3.80) per qualifying share was paid to the shareholders.
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Supplementary Information to the Consolidated Income Statements
Three months ended June 30, | Property- € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Premiums written | ||||||||||||||||
Direct | 8,987 | 5,169 | — | 14,156 | ||||||||||||
Assumed | 855 | 86 | (5) | 936 | ||||||||||||
Subtotal | 9,842 | 5,255 | (5) | 15,092 | ||||||||||||
Ceded | (1,115) | (115) | 5 | (1,225) | ||||||||||||
Net | 8,727 | 5,140 | — | 13,867 | ||||||||||||
Change in unearned premiums | ||||||||||||||||
Direct | 837 | (23) | — | 814 | ||||||||||||
Assumed | (188) | (4) | — | (192) | ||||||||||||
Subtotal | 649 | (27) | — | 622 | ||||||||||||
Ceded | 72 | (2) | — | 70 | ||||||||||||
Net | 721 | (29) | — | 692 | ||||||||||||
Premiums earned | ||||||||||||||||
Direct | 9,824 | 5,146 | — | 14,970 | ||||||||||||
Assumed | 667 | 82 | (5) | 744 | ||||||||||||
Subtotal | 10,491 | 5,228 | (5) | 15,714 | ||||||||||||
Ceded | (1,043) | (117) | 5 | (1,155) | ||||||||||||
Net | 9,448 | 5,111 | — | 14,559 | ||||||||||||
2007 | ||||||||||||||||
Premiums written | ||||||||||||||||
Direct | 9,347 | 4,794 | — | 14,141 | ||||||||||||
Assumed | 635 | 62 | (5) | 692 | ||||||||||||
Subtotal | 9,982 | 4,856 | (5) | 14,833 | ||||||||||||
Ceded | (1,245) | (175) | 5 | (1,415) | ||||||||||||
Net | 8,737 | 4,681 | — | 13,418 | ||||||||||||
Change in unearned premiums | ||||||||||||||||
Direct | 936 | — | — | 936 | ||||||||||||
Assumed | (55) | 3 | 1 | (51) | ||||||||||||
Subtotal | 881 | 3 | 1 | 885 | ||||||||||||
Ceded | 38 | (1) | (1) | 36 | ||||||||||||
Net | 919 | 2 | — | 921 | ||||||||||||
Premiums earned | ||||||||||||||||
Direct | 10,283 | 4,794 | — | 15,077 | ||||||||||||
Assumed | 580 | 65 | (4) | 641 | ||||||||||||
Subtotal | 10,863 | 4,859 | (4) | 15,718 | ||||||||||||
Ceded | (1,207) | (176) | 4 | (1,379) | ||||||||||||
Net | 9,656 | 4,683 | — | 14,339 |
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19 Premiums earned (net) (continued)
Six months ended June 30, | Property- € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Premiums written | ||||||||||||||||
Direct | 22,125 | 10,842 | — | 32,967 | ||||||||||||
Assumed | 1,427 | 177 | (11) | 1,593 | ||||||||||||
Subtotal | 23,552 | 11,019 | (11) | 34,560 | ||||||||||||
Ceded | (2,400) | (252) | 11 | (2,641) | ||||||||||||
Net | 21,152 | 10,767 | — | 31,919 | ||||||||||||
Change in unearned premiums | ||||||||||||||||
Direct | (2,625) | (61) | — | (2,686) | ||||||||||||
Assumed | (286) | (6) | — | (292) | ||||||||||||
Subtotal | (2,911) | (67) | — | (2,978) | ||||||||||||
Ceded | 380 | — | — | 380 | ||||||||||||
Net | (2,531) | (67) | — | (2,598) | ||||||||||||
Premiums earned | ||||||||||||||||
Direct | 19,500 | 10,781 | — | 30,281 | ||||||||||||
Assumed | 1,141 | 171 | (11) | 1,301 | ||||||||||||
Subtotal | 20,641 | 10,952 | (11) | 31,582 | ||||||||||||
Ceded | (2,020) | (252) | 11 | (2,261) | ||||||||||||
Net | 18,621 | 10,700 | — | 29,321 | ||||||||||||
2007 | ||||||||||||||||
Premiums written | ||||||||||||||||
Direct | 22,811 | 10,105 | — | 32,916 | ||||||||||||
Assumed | 1,282 | 146 | (8) | 1,420 | ||||||||||||
Subtotal | 24,093 | 10,251 | (8) | 34,336 | ||||||||||||
Ceded | (2,831) | (353) | 8 | (3,176) | ||||||||||||
Net | 21,262 | 9,898 | — | 31,160 | ||||||||||||
Change in unearned premiums | ||||||||||||||||
Direct | (2,562) | (38) | — | (2,600) | ||||||||||||
Assumed | (94) | 7 | 1 | (86) | ||||||||||||
Subtotal | (2,656) | (31) | 1 | (2,686) | ||||||||||||
Ceded | 408 | 1 | (1) | 408 | ||||||||||||
Net | (2,248) | (30) | — | (2,278) | ||||||||||||
Premiums earned | ||||||||||||||||
Direct | 20,249 | 10,067 | — | 30,316 | ||||||||||||
Assumed | 1,188 | 153 | (7) | 1,334 | ||||||||||||
Subtotal | 21,437 | 10,220 | (7) | 31,650 | ||||||||||||
Ceded | (2,423) | (352) | 7 | (2,768) | ||||||||||||
Net | 19,014 | 9,868 | — | 28,882 |
20 Interest and similar income
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Interest from held-to-maturity investments | 61 | 55 | 118 | 111 | ||||||||||||
Dividends from available-for-sale investments | 1,240 | 1,347 | 1,517 | 1,654 | ||||||||||||
Interest from available-for-sale investments | 2,581 | 2,402 | 5,110 | 4,770 | ||||||||||||
Share of earnings from investments in associates and joint ventures | 47 | 72 | 68 | 331 | ||||||||||||
Rent from real estate held for investment | 166 | 220 | 355 | 429 | ||||||||||||
Interest from loans to banks and customers | 3,084 | 3,155 | 6,387 | 6,153 | ||||||||||||
Other interest | 47 | 65 | 81 | 134 | ||||||||||||
Total | 7,226 | 7,316 | 13,636 | 13,582 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
21 Income from financial assets and liabilities carried at fair value through income (net)
Three months ended June 30, | Property- € mn | Life/Health
€ mn | Banking
€ mn | Asset € mn | Corporate
€ mn | Consolidation
€ mn | Group
€ mn | |||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||
Expenses from financial assets and liabilities held for trading | (62) | (162) | (697) | — | (116) | 25 | (1,012) | |||||||||||||||||||||
Income (expenses) from financial assets designated at fair value through income | 16 | (283) | 22 | 7 | (2) | — | (240) | |||||||||||||||||||||
Income from financial liabilities designated at fair value through income | — | — | 23 | — | — | — | 23 | |||||||||||||||||||||
Income (expenses) from financial liabilities for puttable equity instruments (net) | — | 90 | 22 | (4) | — | — | 108 | |||||||||||||||||||||
Total | (46) | (355) | (630) | 3 | (118) | 25 | (1,121) | |||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||
Income (expenses) from financial assets and liabilities held for trading | (42) | (775) | 338 | 4 | (46) | 9 | (512) | |||||||||||||||||||||
Income from financial assets designated at fair value through income | 42 | 181 | 42 | 47 | 2 | (8) | 306 | |||||||||||||||||||||
Income (expenses) from financial liabilities designated at fair value through income | — | 1 | (26) | — | — | 1 | (24) | |||||||||||||||||||||
Expenses from financial liabilities for puttable equity instruments (net) | (2) | (76) | — | (35) | — | — | (113) | |||||||||||||||||||||
Total | (2) | (669) | 354 | 16 | (44) | 2 | (343) |
Six months ended June 30, | Property- € mn | Life/Health
€ mn | Banking
€ mn | Asset € mn | Corporate
€ mn | Consolidation
€ mn | Group
€ mn | |||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||
Income (expenses) from financial assets and liabilities held for trading | 28 | 396 | (1,403) | 16 | 92 | 12 | (859) | |||||||||||||||||||||
Income (expenses) from financial assets designated at fair value through income | (7) | (814) | 154 | (67) | (2) | — | (736) | |||||||||||||||||||||
Income from financial liabilities designated at fair value through income | — | — | 57 | — | — | — | 57 | |||||||||||||||||||||
Income from financial liabilities for puttable equity instruments (net) | 10 | 305 | — | 50 | — | — | 365 | |||||||||||||||||||||
Total | 31 | (113) | (1,192) | (1) | 90 | 12 | (1,173) | |||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||
Income (expenses) from financial assets and liabilities held for trading | (86) | (1,189) | 689 | 3 | 36 | 13 | (534) | |||||||||||||||||||||
Income from financial assets designated at fair value through income | 72 | 320 | 74 | 69 | 5 | (8) | 532 | |||||||||||||||||||||
Income (expenses) from financial liabilities designated at fair value through income | 2 | 9 | (68) | — | — | 1 | (56) | |||||||||||||||||||||
Expenses from financial liabilities for puttable equity instruments (net) | (2) | (119) | — | (49) | — | — | (170) | |||||||||||||||||||||
Total | (14) | (979) | 695 | 23 | 41 | 6 | (228) |
Income from financial assets and liabilities held for trading (net)
Life/Health Segment
Income from financial assets and liabilities held for trading for the six months ended June 30, 2008 includes in the Life/Health segment income of €407 mn (2007: expenses of €1,208 mn) from derivative financial instruments. Expenses of €64 mn (2007: €771 mn) results from the purchase of forward contracts for interest bonds and forward sales of shares. Also included are expenses from derivative financial instruments related to equity indexed annuity contracts and guaranteed benefits under unit-linked contracts of €208 mn (2007: €142 mn) and income from other derivative financial instruments of €679 mn (2007: expenses of €295 mn).
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
Banking Segment
Income from financial assets and liabilities held for trading of the Banking segment comprises:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Trading in interest products | (49) | 128 | (46) | 283 | ||||||||||||
Trading in loan products1) | (622) | 41 | (1,314) | 125 | ||||||||||||
Trading in equity products | 5 | 137 | (97) | 260 | ||||||||||||
Foreign exchange/ precious metals trading | 54 | 40 | 203 | 92 | ||||||||||||
Other trading activities | (85) | (8) | (149) | (71) | ||||||||||||
Total | (697) | 338 | (1,403) | 689 |
1) | For the three and six months ended June 30, 2008 includes write-downs of€286 mn (2007:€36 mn) and of€1,131 mn (2007:€36 mn) for asset-backed securities held for trading of Dresdner Bank, respectively. |
Corporate Segment
Income from financial assets and liabilities held for trading for the six months ended June 30, 2008, includes in the Corporate segment expenses of €82 mn (2007: income of €86 mn) from derivative financial instruments for which hedge accounting is not applied. This includes income from derivative financial instruments embedded in exchangeable bonds of €133 mn
(2007: expenses of €216 mn), expenses from derivative financial instruments which partially hedge the exchangeable bonds, however, which do not qualify for hedge accounting, of €7 mn (2007: income of €164 mn), and expenses from other derivative financial instruments of €208 mn (2007: income of €138 mn).
22 Realized gains/losses (net)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Realized gains | ||||||||||||||||
Available-for-sale investments | ||||||||||||||||
Equity securities | 1,960 | 1,427 | 3,580 | 4,585 | ||||||||||||
Debt securities | 89 | 103 | 267 | 242 | ||||||||||||
Subtotal | 2,049 | 1,530 | 3,847 | 4,827 | ||||||||||||
Investments in associates and joint ventures1) | 2 | 38 | 68 | 45 | ||||||||||||
Real estate held for investment | 11 | 108 | 177 | 217 | ||||||||||||
Loans to banks and customers | 28 | 16 | 37 | 25 | ||||||||||||
Subtotal | 2,090 | 1,692 | 4,129 | 5,114 | ||||||||||||
Realized losses | ||||||||||||||||
Available-for-sale investments | ||||||||||||||||
Equity securities | (409) | (90) | (970) | (144) | ||||||||||||
Debt securities | (237) | (450) | (323) | (586) | ||||||||||||
Subtotal | (646) | (540) | (1,293) | (730) | ||||||||||||
Investments in associates and joint ventures2) | (2) | (3) | (5) | (6) | ||||||||||||
Real estate held for investment | 2 | (33) | (50) | (40) | ||||||||||||
Loans to banks and customers | (50) | (28) | (60) | (41) | ||||||||||||
Subtotal | (696) | (604) | (1,408) | (817) | ||||||||||||
Total | 1,394 | 1,088 | 2,721 | 4,297 |
1) | During the three and six months ended June 30, 2008, includes realized gains from the disposal of subsidiaries and businesses of€— mn (2007:€6 mn) and€66 mn (2007:€7 mn) respectively. |
2) | During the three and six months ended June 30, 2008, includes realized losses from the disposal of subsidiaries of€— mn (2007:€1 mn) and€1 mn (2007:€1 mn) respectively. |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Three months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Fees from credit and assistance business | 184 | (1) | 183 | 183 | (1) | 182 | ||||||||||||||||||
Service agreements | 109 | (16) | 93 | 97 | (6) | 91 | ||||||||||||||||||
Subtotal | 293 | (17) | 276 | 280 | (7) | 273 | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Service agreements | 40 | (11) | 29 | 37 | 4 | 41 | ||||||||||||||||||
Investment advisory | 126 | (10) | 116 | 122 | 1 | 123 | ||||||||||||||||||
Other | 2 | (2) | — | 5 | (5) | — | ||||||||||||||||||
Subtotal | 168 | (23) | 145 | 164 | — | 164 | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Securities business | 347 | (43) | 304 | 362 | (45) | 317 | ||||||||||||||||||
Investment advisory | 77 | (24) | 53 | 154 | (38) | 116 | ||||||||||||||||||
Payment transactions | 91 | (1) | 90 | 91 | (1) | 90 | ||||||||||||||||||
Mergers and acquisitions advisory | 17 | — | 17 | 72 | — | 72 | ||||||||||||||||||
Underwriting business | 17 | — | 17 | 19 | — | 19 | ||||||||||||||||||
Other | 198 | (40) | 158 | 225 | (22) | 203 | ||||||||||||||||||
Subtotal | 747 | (108) | 639 | 923 | (106) | 817 | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Management fees | 840 | (33) | 807 | 876 | (30) | 846 | ||||||||||||||||||
Loading and exit fees | 64 | — | 64 | 80 | — | 80 | ||||||||||||||||||
Performance fees | 30 | — | 30 | 21 | — | 21 | ||||||||||||||||||
Other | 118 | — | 118 | 103 | (2) | 101 | ||||||||||||||||||
Subtotal | 1,052 | (33) | 1,019 | 1,080 | (32) | 1,048 | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Service agreements | 52 | (23) | 29 | 44 | (24) | 20 | ||||||||||||||||||
Other | (5) | — | (5) | — | — | — | ||||||||||||||||||
Subtotal | 47 | (23) | 24 | 44 | (24) | 20 | ||||||||||||||||||
Total | 2,307 | (204) | 2,103 | 2,491 | (169) | 2,322 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
23 Fee and commission income (continued)
Six months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Fees from credit and assistance business | 355 | (1) | 354 | 356 | (1) | 355 | ||||||||||||||||||
Service agreements | 205 | (19) | 186 | 196 | (11) | 185 | ||||||||||||||||||
Subtotal | 560 | (20) | 540 | 552 | (12) | 540 | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Service agreements | 74 | (14) | 60 | 91 | (7) | 84 | ||||||||||||||||||
Investment advisory | 260 | (19) | 241 | 236 | (7) | 229 | ||||||||||||||||||
Other | 5 | (5) | — | 8 | (8) | — | ||||||||||||||||||
Subtotal | 339 | (38) | 301 | 335 | (22) | 313 | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Securities business | 695 | (88) | 607 | 827 | (94) | 733 | ||||||||||||||||||
Investment advisory | 163 | (53) | 110 | 308 | (76) | 232 | ||||||||||||||||||
Payment transactions | 182 | (2) | 180 | 182 | (1) | 181 | ||||||||||||||||||
Mergers and acquisitions advisory | 40 | — | 40 | 113 | — | 113 | ||||||||||||||||||
Underwriting business | 27 | — | 27 | 42 | — | 42 | ||||||||||||||||||
Other | 424 | (59) | 365 | 429 | (31) | 398 | ||||||||||||||||||
Subtotal | 1,531 | (202) | 1,329 | 1,901 | (202) | 1,699 | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Management fees | 1,681 | (60) | 1,621 | 1,742 | (60) | 1,682 | ||||||||||||||||||
Loading and exit fees | 130 | — | 130 | 162 | — | 162 | ||||||||||||||||||
Performance fees | 43 | — | 43 | 37 | — | 37 | ||||||||||||||||||
Other | 184 | (1) | 183 | 212 | (4) | 208 | ||||||||||||||||||
Subtotal | 2,038 | (61) | 1,977 | 2,153 | (64) | 2,089 | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Service agreements | 111 | (54) | 57 | 89 | (52) | 37 | ||||||||||||||||||
Other | 1 | (1) | — | — | — | — | ||||||||||||||||||
Subtotal | 112 | (55) | 57 | 89 | (52) | 37 | ||||||||||||||||||
Total | 4,580 | (376) | 4,204 | 5,030 | (352) | 4,678 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Income from real estate held for own use | ||||||||||||||||
Realized gains from disposals of real estate held for own use | 4 | 3 | 352 | 94 | ||||||||||||
Other income from real estate held for own use | 6 | — | 6 | — | ||||||||||||
Subtotal | 10 | 3 | 358 | 94 | ||||||||||||
Income from non-current assets and disposal groups held for sale | — | 1 | — | 3 | ||||||||||||
Other | 5 | 2 | 8 | 2 | ||||||||||||
Total | 15 | 6 | 366 | 99 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
25 Income and expenses from fully consolidated private equity investments
Three months ended June 30, | manroland AG € mn | Selecta AG € mn | Other € mn | Total € mn | ||||||||||||
2008 | ||||||||||||||||
Income | ||||||||||||||||
Sales and service revenues | 426 | 184 | 8 | 618 | ||||||||||||
Other operating revenues | 4 | — | 1 | 5 | ||||||||||||
Interest income | 4 | — | — | 4 | ||||||||||||
Subtotal | 434 | 184 | 9 | 627 | ||||||||||||
Expenses | ||||||||||||||||
Cost of goods sold | (329) | (113) | (12) | (454) | ||||||||||||
Commissions | (45) | — | — | (45) | ||||||||||||
General and administrative expenses | (2) | (25) | (1) | (28) | ||||||||||||
Other operating expenses | (44) | — | — | (44) | ||||||||||||
Interest expenses | (5) | (19) | (3) | (27) | ||||||||||||
Subtotal | (425) | (157) | (16) | (598) | ||||||||||||
Total | 9 | 27 | (7) | 29 | ||||||||||||
2007 | ||||||||||||||||
Income | ||||||||||||||||
Sales and service revenues | 456 | — | 1 | 457 | ||||||||||||
Other operating revenues | 11 | — | — | 11 | ||||||||||||
Interest income | 2 | — | — | 2 | ||||||||||||
Subtotal | 469 | — | 1 | 470 | ||||||||||||
Expenses | ||||||||||||||||
Cost of goods sold | (358) | — | (1) | (359) | ||||||||||||
Commissions | (40) | — | — | (40) | ||||||||||||
General and administrative expenses | (20) | — | — | (20) | ||||||||||||
Other operating expenses | (30) | — | — | (30) | ||||||||||||
Interest expenses | (7) | — | — | (7) | ||||||||||||
Subtotal | (455) | — | (1) | (456) | ||||||||||||
Total | 14 | — | — | 14 |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
25 Income and expenses from fully consolidated private equity investments (continued)
Six months ended June 30, | manroland AG € mn | Selecta AG € mn | Other € mn | Total € mn | ||||||||||||
2008 | ||||||||||||||||
Income | ||||||||||||||||
Sales and service revenues | 800 | 368 | 22 | 1,190 | ||||||||||||
Other operating revenues | 8 | — | 1 | 9 | ||||||||||||
Interest income | 7 | — | — | 7 | ||||||||||||
Subtotal | 815 | 368 | 23 | 1,206 | ||||||||||||
Expenses | ||||||||||||||||
Cost of goods sold | (619) | (226) | (14) | (859) | ||||||||||||
Commissions | (81) | — | — | (81) | ||||||||||||
General and administrative expenses | (41) | (80) | (1) | (122) | ||||||||||||
Other operating expenses | (44) | — | — | (44) | ||||||||||||
Interest expense | (9) | (36) | (3) | (48) | ||||||||||||
Subtotal | (794) | (342) | (18) | (1,154) | ||||||||||||
Total | 21 | 26 | 5 | 52 | ||||||||||||
2007 | ||||||||||||||||
Income | ||||||||||||||||
Sales and service revenues | 909 | — | 4 | 913 | ||||||||||||
Other operating revenues | 23 | — | — | 23 | ||||||||||||
Interest income | 5 | — | — | 5 | ||||||||||||
Subtotal | 937 | — | 4 | 941 | ||||||||||||
Expenses | ||||||||||||||||
Cost of goods sold | (710) | — | (1) | (711) | ||||||||||||
Commissions | (79) | — | — | (79) | ||||||||||||
General and administrative expenses | (42) | — | — | (42) | ||||||||||||
Other operating expenses | (70) | — | — | (70) | ||||||||||||
Interest expense | (14) | — | — | (14) | ||||||||||||
Subtotal | (915) | — | (1) | (916) | ||||||||||||
Total | 22 | — | 3 | 25 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
26 Claims and insurance benefits incurred (net)
Three months ended June 30, | Property- Casualty € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Gross | ||||||||||||||||
Claims and insurance benefits paid | (6,576) | (4,529) | 2 | (11,103) | ||||||||||||
Change in loss and loss adjustment expenses | (102) | (108) | — | (210) | ||||||||||||
Subtotal | (6,678) | (4,637) | 2 | (11,313) | ||||||||||||
Ceded | ||||||||||||||||
Claims and insurance benefits paid | 604 | 89 | (2) | 691 | ||||||||||||
Change in loss and loss adjustment expenses | (173) | 8 | — | (165) | ||||||||||||
Subtotal | 431 | 97 | (2) | 526 | ||||||||||||
Net | ||||||||||||||||
Claims and insurance benefits paid | (5,972) | (4,440) | — | (10,412) | ||||||||||||
Change in loss and loss adjustment expenses | (275) | (100) | — | (375) | ||||||||||||
Total | (6,247) | (4,540) | — | (10,787) | ||||||||||||
2007 | ||||||||||||||||
Gross | ||||||||||||||||
Claims and insurance benefits paid | (6,766) | (4,294) | 7 | (11,053) | ||||||||||||
Change in loss and loss adjustment expenses | (327) | (42) | 1 | (368) | ||||||||||||
Subtotal | (7,093) | (4,336) | 8 | (11,421) | ||||||||||||
Ceded | ||||||||||||||||
Claims and insurance benefits paid | 689 | 180 | (7) | 862 | ||||||||||||
Change in loss and loss adjustment expenses | 138 | (2) | (1) | 135 | ||||||||||||
Subtotal | 827 | 178 | (8) | 997 | ||||||||||||
Net | ||||||||||||||||
Claims and insurance benefits paid | (6,077) | (4,114) | — | (10,191) | ||||||||||||
Change in loss and loss adjustment expenses | (189) | (44) | — | (233) | ||||||||||||
Total | (6,266) | (4,158) | — | (10,424) | ||||||||||||
Six months ended June 30, | Property- € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Gross | ||||||||||||||||
Claims and insurance benefits paid | (13,516) | (9,708) | 4 | (23,220) | ||||||||||||
Change in loss and loss adjustment expenses | (20) | (59) | — | (79) | ||||||||||||
Subtotal | (13,536) | (9,767) | 4 | (23,299) | ||||||||||||
Ceded | ||||||||||||||||
Claims and insurance benefits paid | 1,290 | 230 | (4) | 1,516 | ||||||||||||
Change in loss and loss adjustment expenses | (302) | (16) | — | (318) | ||||||||||||
Subtotal | 988 | 214 | (4) | 1,198 | ||||||||||||
Net | ||||||||||||||||
Claims and insurance benefits paid | (12,226) | (9,478) | — | (21,704) | ||||||||||||
Change in loss and loss adjustment expenses | (322) | (75) | — | (397) | ||||||||||||
Total | (12,548) | (9,553) | — | (22,101) | ||||||||||||
2007 | ||||||||||||||||
Gross | ||||||||||||||||
Claims and insurance benefits paid | (14,470) | (9,182) | 13 | (23,639) | ||||||||||||
Change in loss and loss adjustment expenses | 203 | (32) | — | 171 | ||||||||||||
Subtotal | (14,267) | (9,214) | 13 | (23,468) | ||||||||||||
Ceded | ||||||||||||||||
Claims and insurance benefits paid | 1,601 | 382 | (13) | 1,970 | ||||||||||||
Change in loss and loss adjustment expenses | 17 | (28) | — | (11) | ||||||||||||
Subtotal | 1,618 | 354 | (13) | 1,959 | ||||||||||||
Net | ||||||||||||||||
Claims and insurance benefits paid | (12,869) | (8,800) | — | (21,669) | ||||||||||||
Change in loss and loss adjustment expenses | 220 | (60) | — | 160 | ||||||||||||
Total | (12,649) | (8,860) | — | (21,509) |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
27 Change in reserves for insurance and investment contracts (net)
Three months ended June 30, | Property- Casualty € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Gross | ||||||||||||||||
Aggregate policy reserves | (67) | (887) | — | (954) | ||||||||||||
Other insurance reserves | 5 | (29) | — | (24) | ||||||||||||
Expenses for premium refunds | (12) | (481) | (8) | (501) | ||||||||||||
Subtotal | (74) | (1,397) | (8) | (1,479) | ||||||||||||
Ceded | ||||||||||||||||
Aggregate policy reserves | 3 | 5 | 1 | 9 | ||||||||||||
Other insurance reserves | — | 1 | — | 1 | ||||||||||||
Expenses for premium refunds | 1 | 2 | — | 3 | ||||||||||||
Subtotal | 4 | 8 | 1 | 13 | ||||||||||||
Net | ||||||||||||||||
Aggregate policy reserves | (64) | (882) | 1 | (945) | ||||||||||||
Other insurance reserves | 5 | (28) | — | (23) | ||||||||||||
Expenses for premium refunds | (11) | (479) | (8) | (498) | ||||||||||||
Total | (70) | (1,389) | (7) | (1,466) | ||||||||||||
2007 | ||||||||||||||||
Gross | ||||||||||||||||
Aggregate policy reserves | (93) | (1,337) | — | (1,430) | ||||||||||||
Other insurance reserves | (2) | (29) | — | (31) | ||||||||||||
Expenses for premium refunds | (15) | (906) | (24) | (945) | ||||||||||||
Subtotal | (110) | (2,272) | (24) | (2,406) | ||||||||||||
Ceded | ||||||||||||||||
Aggregate policy reserves | 9 | 57 | — | 66 | ||||||||||||
Other insurance reserves | 1 | (1) | — | — | ||||||||||||
Expenses for premium refunds | 3 | 5 | — | 8 | ||||||||||||
Subtotal | 13 | 61 | — | 74 | ||||||||||||
Net | ||||||||||||||||
Aggregate policy reserves | (84) | (1,280) | — | (1,364) | ||||||||||||
Other insurance reserves | (1) | (30) | — | (31) | ||||||||||||
Expenses for premium refunds | (12) | (901) | (24) | (937) | ||||||||||||
Total | (97) | (2,211) | (24) | (2,332) |
79
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
27 Change in reserves for insurance and investment contracts (net) (continued)
Six months ended June 30, | Property- Casualty € mn | Life/Health
€ mn | Consolidation
€ mn | Group
€ mn | ||||||||||||
2008 | ||||||||||||||||
Gross | ||||||||||||||||
Aggregate policy reserves | (132) | (2,167) | — | (2,299) | ||||||||||||
Other insurance reserves | 2 | (41) | — | (39) | ||||||||||||
Expenses for premium refunds | 29 | (1,004) | (21) | (996) | ||||||||||||
Subtotal | (101) | (3,212) | (21) | (3,334) | ||||||||||||
Ceded | ||||||||||||||||
Aggregate policy reserves | (14) | 9 | 1 | (4) | ||||||||||||
Other insurance reserves | 7 | 3 | — | 10 | ||||||||||||
Expenses for premium refunds | 9 | 8 | — | 17 | ||||||||||||
Subtotal | 2 | 20 | 1 | 23 | ||||||||||||
Net | ||||||||||||||||
Aggregate policy reserves | (146) | (2,158) | 1 | (2,303) | ||||||||||||
Other insurance reserves | 9 | (38) | — | (29) | ||||||||||||
Expenses for premium refunds | 38 | (996) | (21) | (979) | ||||||||||||
Total | (99) | (3,192) | (20) | (3,311) | ||||||||||||
2007 | ||||||||||||||||
Gross | ||||||||||||||||
Aggregate policy reserves | (155) | (1,841) | — | (1,996) | ||||||||||||
Other insurance reserves | (2) | (123) | — | (125) | ||||||||||||
Expenses for premium refunds | (36) | (2,952) | (55) | (3,043) | ||||||||||||
Subtotal | (193) | (4,916) | (55) | (5,164) | ||||||||||||
Ceded | ||||||||||||||||
Aggregate policy reserves | 8 | 76 | — | 84 | ||||||||||||
Other insurance reserves | 2 | (5) | — | (3) | ||||||||||||
Expenses for premium refunds | 5 | 10 | — | 15 | ||||||||||||
Subtotal | 15 | 81 | — | 96 | ||||||||||||
Net | ||||||||||||||||
Aggregate policy reserves | (147) | (1,765) | — | (1,912) | ||||||||||||
Other insurance reserves | — | (128) | — | (128) | ||||||||||||
Expenses for premium refunds | (31) | (2,942) | (55) | (3,028) | ||||||||||||
Total | (178) | (4,835) | (55) | (5,068) |
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Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Liabilities to banks and customers | (964) | (929) | (1,834) | (1,762) | ||||||||||||
Deposits retained on reinsurance ceded | (10) | (34) | (36) | (54) | ||||||||||||
Certificated liabilities | (412) | (417) | (899) | (797) | ||||||||||||
Participating certificates and subordinated liabilities | (186) | (181) | (351) | (359) | ||||||||||||
Other | (48) | (280) | (326) | (467) | ||||||||||||
Total | (1,620) | (1,841) | (3,446) | (3,439) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Additions to allowances including direct impairments | (131) | (153) | (249) | (259) | ||||||||||||
Amounts released | 16 | 38 | 73 | 89 | ||||||||||||
Recoveries on loans previously impaired | 50 | 41 | 101 | 98 | ||||||||||||
Total | (65) | (74) | (75) | (72) |
30 Impairments of investments (net)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Impairments | ||||||||||||||||
Available-for-sale investments | ||||||||||||||||
Equity securities | (1,465) | (95) | (2,909) | (176) | ||||||||||||
Debt securities | (56) | (1) | (109) | (1) | ||||||||||||
Subtotal | (1,521) | (96) | (3,018) | (177) | ||||||||||||
Investments in associates and joint ventures | (5) | — | (5) | — | ||||||||||||
Real estate held for investment | (2) | (7) | (20) | (9) | ||||||||||||
Subtotal | (1,528) | (103) | (3,043) | (186) | ||||||||||||
Reversals of impairments | ||||||||||||||||
Available-for-sale investments | ||||||||||||||||
Debt securities | — | — | — | 13 | ||||||||||||
Real estate held for investment | 2 | 1 | 20 | 4 | ||||||||||||
Subtotal | 2 | 1 | 20 | 17 | ||||||||||||
Total | (1,526) | (102) | (3,023) | (169) |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Investment management expenses | (94) | (119) | (198) | (222) | ||||||||||||
Depreciation from real estate held for investment | (43) | (50) | (87) | (104) | ||||||||||||
Other expenses from real estate held for investment | (47) | (58) | (74) | (130) | ||||||||||||
Foreign currency gains and losses (net) | ||||||||||||||||
Foreign currency gains | 174 | 155 | 484 | 282 | ||||||||||||
Foreign currency losses | (150) | (130) | (722) | (289) | ||||||||||||
Subtotal | 24 | 25 | (238) | (7) | ||||||||||||
Total | (160) | (202) | (597) | (463) |
32 Acquisition and administrative expenses (net)
Three months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||
Incurred | (1,847) | — | (1,847) | (1,810) | — | (1,810) | ||||||||||||||||||
Commissions and profit received on reinsurance business ceded | 132 | — | 132 | 194 | (1) | 193 | ||||||||||||||||||
Deferrals of acquisition costs | 1,005 | — | 1,005 | 890 | — | 890 | ||||||||||||||||||
Amortization of deferred acquisition costs | (1,053) | — | (1,053) | (950) | — | (950) | ||||||||||||||||||
Subtotal | (1,763) | — | (1,763) | (1,676) | (1) | (1,677) | ||||||||||||||||||
Administrative expenses | (826) | 3 | (823) | (1,029) | 28 | (1,001) | ||||||||||||||||||
Subtotal | (2,589) | 3 | (2,586) | (2,705) | 27 | (2,678) | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||
Incurred | (892) | — | (892) | (928) | — | (928) | ||||||||||||||||||
Commissions and profit received on reinsurance business ceded | 17 | — | 17 | 40 | — | 40 | ||||||||||||||||||
Deferrals of acquisition costs | 572 | — | 572 | 634 | — | 634 | ||||||||||||||||||
Amortization of deferred acquisition costs | (571) | — | (571) | (455) | — | (455) | ||||||||||||||||||
Subtotal | (874) | — | (874) | (709) | — | (709) | ||||||||||||||||||
Administrative expenses | (411) | (3) | (414) | (406) | (25) | (431) | ||||||||||||||||||
Subtotal | (1,285) | (3) | (1,288) | (1,115) | (25) | (1,140) | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Personnel expenses | (666) | 2 | (664) | (820) | — | (820) | ||||||||||||||||||
Non-personnel expenses | (499) | 7 | (492) | (514) | 23 | (491) | ||||||||||||||||||
Subtotal | (1,165) | 9 | (1,156) | (1,334) | 23 | (1,311) | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Personnel expenses | (373) | — | (373) | (383) | — | (383) | ||||||||||||||||||
Non-personnel expenses | (171) | 5 | (166) | (172) | 7 | (165) | ||||||||||||||||||
Subtotal | (544) | 5 | (539) | (555) | 7 | (548) | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Administrative expenses | (73) | 1 | (72) | (251) | (22) | (273) | ||||||||||||||||||
Subtotal | (73) | 1 | (72) | (251) | (22) | (273) | ||||||||||||||||||
Total | (5,656) | 15 | (5,641) | (5,960) | 10 | (5,950) |
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32 Acquisition and administrative expenses (net) (continued)
Six months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||
Incurred | (3,987) | — | (3,987) | (3,963) | — | (3,963) | ||||||||||||||||||
Commissions and profit received on reinsurance business ceded | 348 | (1) | 347 | 362 | (1) | 361 | ||||||||||||||||||
Deferrals of acquisition costs | 2,456 | — | 2,456 | 2,477 | — | 2,477 | ||||||||||||||||||
Amortization of deferred acquisition costs | (2,167) | — | (2,167) | (2,217) | — | (2,217) | ||||||||||||||||||
Subtotal | (3,350) | (1) | (3,351) | (3,341) | (1) | (3,342) | ||||||||||||||||||
Administrative expenses | (1,630) | 12 | (1,618) | (2,039) | 44 | (1,995) | ||||||||||||||||||
Subtotal | (4,980) | 11 | (4,969) | (5,380) | 43 | (5,337) | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||
Incurred | (1,875) | 1 | (1,874) | (1,845) | 1 | (1,844) | ||||||||||||||||||
Commissions and profit received on reinsurance business ceded | 42 | — | 42 | 88 | — | 88 | ||||||||||||||||||
Deferrals of acquisition costs | 1,192 | — | 1,192 | 1,261 | — | 1,261 | ||||||||||||||||||
Amortization of deferred acquisition costs | (939) | — | (939) | (637) | — | (637) | ||||||||||||||||||
Subtotal | (1,580) | 1 | (1,579) | (1,133) | 1 | (1,132) | ||||||||||||||||||
Administrative expenses | (813) | 1 | (812) | (856) | (35) | (891) | ||||||||||||||||||
Subtotal | (2,393) | 2 | (2,391) | (1,989) | (34) | (2,023) | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Personnel expenses | (1,410) | 2 | (1,408) | (1,727) | — | (1,727) | ||||||||||||||||||
Non-personnel expenses | (973) | 7 | (966) | (1,017) | 32 | (985) | ||||||||||||||||||
Subtotal | (2,383) | 9 | (2,374) | (2,744) | 32 | (2,712) | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Personnel expenses | (795) | — | (795) | (808) | — | (808) | ||||||||||||||||||
Non-personnel expenses | (355) | 4 | (351) | (337) | 13 | (324) | ||||||||||||||||||
Subtotal | (1,150) | 4 | (1,146) | (1,145) | 13 | (1,132) | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Administrative expenses | (219) | 12 | (207) | (368) | (16) | (384) | ||||||||||||||||||
Subtotal | (219) | 12 | (207) | (368) | (16) | (384) | ||||||||||||||||||
Total | (11,125) | 38 | (11,087) | (11,626) | 38 | (11,588) |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
33 Fee and commission expenses
Three months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Fees from credit and assistance business | (155) | — | (155) | (116) | 1 | (115) | ||||||||||||||||||
Service agreements | (93) | 2 | (91) | (74) | 4 | (70) | ||||||||||||||||||
Subtotal | (248) | 2 | (246) | (190) | 5 | (185) | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Service agreements | (23) | 14 | (9) | (7) | — | (7) | ||||||||||||||||||
Investment advisory | (47) | 3 | (44) | (36) | 2 | (34) | ||||||||||||||||||
Subtotal | (70) | 17 | (53) | (43) | 2 | (41) | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Securities business | (59) | — | (59) | (45) | — | (45) | ||||||||||||||||||
Investment advisory | (38) | — | (38) | (50) | 2 | (48) | ||||||||||||||||||
Payment transactions | (6) | — | (6) | (6) | — | (6) | ||||||||||||||||||
Mergers and acquisitions advisory | 3 | — | 3 | (9) | — | (9) | ||||||||||||||||||
Underwriting business | — | — | — | (1) | — | (1) | ||||||||||||||||||
Other | (50) | 15 | (35) | (46) | 7 | (39) | ||||||||||||||||||
Subtotal | (150) | 15 | (135) | (157) | 9 | (148) | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Commissions | (214) | 83 | (131) | (241) | 110 | (131) | ||||||||||||||||||
Other | (117) | 5 | (112) | (74) | 1 | (73) | ||||||||||||||||||
Subtotal | (331) | 88 | (243) | (315) | 111 | (204) | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Service agreements | (38) | 2 | (36) | (26) | 3 | (23) | ||||||||||||||||||
Other | 1 | — | 1 | — | — | — | ||||||||||||||||||
Subtotal | (37) | 2 | (35) | (26) | 3 | (23) | ||||||||||||||||||
Total | (836) | 124 | (712) | (731) | 130 | (601) |
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Allianz Group Interim Report Second Quarter and First Half of 2008 Notes to the Condensed Consolidated Interim Financial Statements
33 Fee and commission expenses (continued)
Six months ended June 30, | 2008 | 2007 | ||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
Property-Casualty | ||||||||||||||||||||||||
Fees from credit and assistance business | (293) | — | (293) | (234) | 1 | (233) | ||||||||||||||||||
Service agreements | (203) | 3 | (200) | (153) | 8 | (145) | ||||||||||||||||||
Subtotal | (496) | 3 | (493) | (387) | 9 | (378) | ||||||||||||||||||
Life/Health | ||||||||||||||||||||||||
Service agreements | (43) | 18 | (25) | (28) | 8 | (20) | ||||||||||||||||||
Investment advisory | (87) | 8 | (79) | (77) | 3 | (74) | ||||||||||||||||||
Subtotal | (130) | 26 | (104) | (105) | 11 | (94) | ||||||||||||||||||
Banking | ||||||||||||||||||||||||
Securities business | (99) | — | (99) | (85) | — | (85) | ||||||||||||||||||
Investment advisory | (78) | — | (78) | (96) | 4 | (92) | ||||||||||||||||||
Payment transactions | (12) | — | (12) | (11) | — | (11) | ||||||||||||||||||
Mergers and acquisitions advisory | — | — | — | (12) | — | (12) | ||||||||||||||||||
Underwriting business | — | — | — | (1) | — | (1) | ||||||||||||||||||
Other | (101) | 18 | (83) | (98) | 10 | (88) | ||||||||||||||||||
Subtotal | (290) | 18 | (272) | (303) | 14 | (289) | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||
Commissions | (426) | 167 | (259) | (476) | 222 | (254) | ||||||||||||||||||
Other | (185) | 9 | (176) | (166) | 2 | (164) | ||||||||||||||||||
Subtotal | (611) | 176 | (435) | (642) | 224 | (418) | ||||||||||||||||||
Corporate | ||||||||||||||||||||||||
Service agreements | (66) | 3 | (63) | (61) | 5 | (56) | ||||||||||||||||||
Subtotal | (66) | 3 | (63) | (61) | 5 | (56) | ||||||||||||||||||
Total | (1,593) | 226 | (1,367) | (1,498) | 263 | (1,235) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Current income tax expense | (371) | (654) | (818) | (1,340) | ||||||||||||
Deferred income tax expense | (181) | (204) | (408) | (485) | ||||||||||||
Total | (552) | (858) | (1,226) | (1,825) |
85
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects
the effect of dilutive securities. Dilutive securities include participation certificates issued by Allianz SE which can potentially be converted to Allianz shares, warrants issued by Allianz SE, share-based compensation plans, and derivatives on own shares.
Reconciliation of basic and diluted earnings per share
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
| 2008 € mn |
| 2007 € mn |
| 2008 € mn |
| 2007 € mn | |||||||||||||
Numerator for basic earnings per share (net income) | 1,542 | 2,140 | 2,690 | 5,380 | ||||||||||||||||
Effect of dilutive securities | (10) | — | (32) | 1 | ||||||||||||||||
Numerator for diluted earnings per share(net income after assumed conversion) | 1,532 | 2,140 | 2,658 | 5,381 | ||||||||||||||||
Denominator for basic earnings per share (weighted-average shares) | 448,412,817 | 441,507,123 | 449,818,651 | 436,618,651 | ||||||||||||||||
Dilutive securities | ||||||||||||||||||||
Participation certificates | 1,469,443 | 1,469,443 | 1,469,443 | 1,469,443 | ||||||||||||||||
Warrants | — | 1,051,153 | 140,715 | 1,008,321 | ||||||||||||||||
Share-based compensation plans | 1,178,270 | 42,837 | 1,664,019 | 93,698 | ||||||||||||||||
Derivatives on own shares | 935,570 | 6,790,408 | 1,322,705 | 6,291,475 | ||||||||||||||||
Subtotal | 3,583,283 | 9,353,841 | 4,596,882 | 8,862,937 | ||||||||||||||||
Denominator for diluted earnings per share (weighted-average shares after assumed conversion) | 451,996,100 | 450,860,964 | 454,415,533 | 445,481,588 | ||||||||||||||||
Basic earnings per share | € | 3.44 | € | 4.85 | € | 5.98 | € | 12.32 | ||||||||||||
Diluted earnings per share | € | 3.39 | € | 4.75 | € | 5.85 | € | 12.08 |
For the six months ended June 30, 2008, the weighted average number of shares excludes 1,975,305 (2007: 1,251,988) treasury shares.
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Other Information
36 Supplemental information on the Banking Segment
Net interest income from the Banking Segment
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
2008 | ||||||||||||||||||||||||
Interest and similar income | 2,067 | (13) | 2,054 | 4,305 | (59) | 4,246 | ||||||||||||||||||
Interest expense | (1,340) | 40 | (1,300) | (2,882) | 109 | (2,773) | ||||||||||||||||||
Net interest income | 727 | 27 | 754 | 1,423 | 50 | 1,473 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
Interest and similar income | 2,214 | (32) | 2,182 | 4,423 | (43) | 4,380 | ||||||||||||||||||
Interest expense | (1,484) | 53 | (1,431) | (2,765) | 84 | (2,681) | ||||||||||||||||||
Net interest income | 730 | 21 | 751 | 1,658 | 41 | 1,699 |
Net fee and commission income from the Banking Segment
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
Segment € mn | Consolidation € mn | Group € mn | Segment € mn | Consolidation € mn | Group € mn | |||||||||||||||||||
2008 | ||||||||||||||||||||||||
Fee and commission income | 747 | (108) | 639 | 1,531 | (202) | 1,329 | ||||||||||||||||||
Fee and commission expense | (150) | 15 | (135) | (290) | 18 | (272) | ||||||||||||||||||
Net fee and commission income | 597 | (93) | 504 | 1,241 | (184) | 1,057 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
Fee and commission income | 923 | (106) | 817 | 1,901 | (202) | 1,699 | ||||||||||||||||||
Fee and commission expense | (157) | 9 | (148) | (303) | 14 | (289) | ||||||||||||||||||
Net fee and commission income | 766 | (97) | 669 | 1,598 | (188) | 1,410 |
The net fee and commission income of the Allianz Group’s Banking segment includes the following:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2008 € mn | 2007 € mn | 2008 € mn | 2007 € mn | |||||||||||||
Securities business | 288 | 317 | 596 | 742 | ||||||||||||
Investment advisory | 39 | 104 | 85 | 212 | ||||||||||||
Payment transactions | 85 | 85 | 170 | 171 | ||||||||||||
Merger and acquisitions advisory | 20 | 63 | 40 | 101 | ||||||||||||
Underwriting business | 17 | 18 | 27 | 41 | ||||||||||||
Other | 148 | 179 | 323 | 331 | ||||||||||||
Total | 597 | 766 | 1,241 | 1,598 |
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Notes to the Condensed Consolidated Interim Financial Statements Allianz Group Interim Report Second Quarter and First Half of 2008
37 Supplemental information on the condensed consolidated statements of cash flows
Six months ended June 30,
| 2008 € mn | 2007 € mn | ||||||
Income taxes paid | (1,604) | (1,147) | ||||||
Dividends received | 1,384 | 1,460 | ||||||
Interest received | 11,671 | 11,043 | ||||||
Interest paid | (4,359) | (3,359) | ||||||
Significant non-cash transactions: | ||||||||
Settlement of exchangeable bonds issued by Allianz Finance II B.V. for shares: | ||||||||
Available-for-sale investments | (450) | (812) | ||||||
Certificated liabilities | (450) | (812) | ||||||
Novation of quota share reinsurance agreement: | ||||||||
Reinsurance assets | (29) | (1,216) | ||||||
Deferred acquisition costs | 1 | 71 | ||||||
Payables from reinsurance contracts | (28) | (1,145) | ||||||
Effects from buy-out of AGF minorities: | ||||||||
Revenue reserves | — | (1,843) | ||||||
Unrealized gains and losses (net) | — | 146 | ||||||
Minority interests | — | (1,068) | ||||||
Paid-in capital | — | 2,765 | ||||||
Effects from first consolidation of K2: | ||||||||
Financial assets held for trading | 107 | — | ||||||
Financial assets designated at fair value through income | 8,665 | — | ||||||
Loans and advances to banks and customers | 1,714 | — | ||||||
Other assets | 51 | — | ||||||
Financial liabilities held for trading | 497 | — | ||||||
Financial liabilities designated at fair value through income | 8,889 | — | ||||||
Liabilities to banks and customers | 1,076 | — | ||||||
Other liabilities | 75 | — |
Number of employees
As of June 30, 2008 | As of December 31, 2007 | |||||||
Germany | 70,702 | 72,063 | ||||||
Other countries | 110,605 | 109,144 | ||||||
Total | 181,307 | 181,207 |
Acquisition of further stakes in Koç Allianz Sigorta AŞ and Koç Allianz Hayat ve Emeklilik
In April 2008, the Allianz Group signed a share purchase agreement regarding the acquisition of a shareholding in Koç Allianz Sigorta AŞ and Koç Allianz Hayat ve Emeklilik. The transaction has been approved by the relevant regulatory and competition board on July 20, 2008.
With this transaction, the Allianz Group acquired 47.1% of shares in the non-life insurer Koç Allianz Sigorta AŞ and 49.0% of the shares in the life-insurance and pension company Koç Allianz Hayat ve Emeklilik for a total consideration of €373 mn so that Allianz Group now controls 84.2% and 87.0% respectively.
Monoline insurer XL Capital Assurance
CDOs which Dresdner Bank issued in 2005/2006 are hedged using credit default swaps written by the monoline insurer XL Capital Assurance (XLCA). XLCA is currently negotiating the conditions of its restructuring with some counterparties of credit derivatives and insurance contracts. Dresdner Bank has participated in the negotiations since August 1, 2008. Its outcome is uncertain at present and not expected to be finalized before mid of October 2008.
Munich, August 6, 2008
Allianz SE
The Board of Management
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Allianz Group Interim Report Second Quarter and First Half of 2008 Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim group management report includes a fair review of the development and performance of the business and the position of the group,
together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the financial year.
Munich, August 6, 2008
Allianz SE
The Board of Management
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Review report Allianz Group Interim Report Second Quarter and First Half of 2008
To Allianz SE, Munich
We have reviewed the condensed consolidated interim financial statements of the Allianz SE, Munich - comprising balance sheet, income statement, condensed cash flow statement, statement of changes in equity and selected explanatory notes - together with the interim group management report of the Allianz SE, Munich for the period from January 1 to June 30, 2008 that are part of the half year financial report according to § 37 w WpHG [“Wertpapier-handelsgesetz”: “German Securities Trading Act”]. The preparation of the condensed consolidated interim financial statements in accordance with those IFRS applicable to interim financial reporting as adopted by the EU and in accordance with the IFRS for interim financial reporting as issued by the International Accounting Standards Board (“IASB”), and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company’s management. Our responsibility is to issue a report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We performed our review of the condensed consolidated interim financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (“IDW”). Those standards require that we plan and conduct the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed consolidated interim financial statements have not been prepared, in material aspects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU and in accordance with the IFRS for interim financial reporting as issued by the IASB, and that the interim group management report has not been prepared, in material aspects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor’s report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and in accordance with the IFRS for interim financial reporting as issued by the IASB, or that the interim group management report has not been prepared, in all material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.
Munich, August 6, 2008
KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Johannes Pastor | Dirk Hildebrand | |
Independent Auditor | Independent Auditor |
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Allianz SE
Koeniginstrasse 28
80802 Muenchen
Germany
Telephone +49 89 38 00 0
Telefax +49 89 38 00 3425
info@allianz.com
www.allianz.com
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 11, 2008
ALLIANZ SE | ||||
By | /s/ Burkhard Keese | |||
Name: | Burkhard Keese | |||
Title: | Executive Vice President Group Financial Reporting | |||
ALLIANZ SE | ||||
By | /s/ Harold Michael Langley-Poole | |||
Name: | Harold Michael Langley-Poole | |||
Title: | Head of Group Management Reporting |