Allianz – in good shape · PDF fileAllianz – in good shape. ... Dividend policy...

Allianz – in good shape

Merrill Lynch Banking and Insurance ConferenceLondon, September 2012

Michael DiekmannChief Executive Officer

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A Allianz at a glance

B Well positioned for an uncertain world

C Building franchise value in an uncertain world

D Summary

Agenda

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1

)

12/20112

)

06/20123

)

Based on dividend for fiscal 2011; no forecast4

)

Relation of business segments excluding Corporate & Other and consolidation

P/C

Allianz at a glance

EUR 104bn total revenues1

EUR 1,748bn total

AuM2

EUR 7.9bn operating profit1

178% economic solvency ratio2

EUR 48.0bn S/H equity2

EUR 36.0bn market cap2

About

78mn (direct) and 250mn (indirect) customers1

Approx. 5%3

dividend yield

Segments1,4

Operating profit in %Regions1,4

Operating profit in %

AM

L/H Western

Europe

GermanyEmerging markets

Specialty insurance

Broker markets US, UK, AUS

27%

26%

47%

6%11%

30%33%

20%

Allianz at a glance

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Leading P/C insurer globally

Top 5 in Life business globally

Top 5 asset manager globally

Largest global assistance provider

Worldwide leader in credit insurance

One of the leading industrial insurers globally

Building the leading global automotive provider

1

)

All rankings based on 2011 data

Strong market positions and brands1

Allianz at a glance

Unlimited access to

business opportunities

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Dividend continuity: EUR 4.50 DPS / 2.0bn payout for fiscal 2011 despite low net income

Attractive yield: ~5% based on 2011 dividend

Dividend accrual in line with normal payout ratio of ~40%

Dividend policy subject to maintaining strong capital adequacy

Dividend continuity and attractive yield

2007 2008 2009 2010 2011

DPS (EUR)5.5

4.1 4.53.5

2007 2008 2009 2010 2011

4.5

Payout ratio (in %)1

Net income

Payout ratio (in %)3

Operating profit

3140 40 40

23 2126 25 26

2007 2008 2009 2010 2011

High ratio to compensate non-operating impairments2

81

1

)

Based on net income from continuing operations, net of non-controlling interests, as historically reported2

)

Refers to additional non-operating impairments compared to 20103

)

Based on operating profit as historically reported

Allianz at a glance

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GroupNet income

(EUR mn)

GroupOperating profit

(EUR mn)

GroupTotal revenues(EUR bn)

First half 2012 –

a good start into the year

55.2

2011 2012

54.5

6M6M

+1.4%

4,6943,960

+18.5%

2,7651,986

+39.2%

P/COperating profit(EUR mn)

L/HOperating profit

(EUR mn)

AMOperating profit

(EUR mn)

2,301

2011 2012

1,992

6M6M

+15.5%

1,6471,381

+19.3%

1,2481,056

+18.2%

98.1% 96.8%CR

2.4% 1.8%NBM

34 423rd party net flows

(EUR bn)

Allianz at a glance

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D Summary

Agenda

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Well positioned for an uncertain world

Scenarios Allianz position

Crisis

continues

Resilient

business

model

Growing operating asset base

Diversified operating profit

Strong buffers in Life

Crisis

gets

worse

Limited

peripheral

exposure

Low share of business in peripheral countries

High-quality investment portfolio with limited exposure to peripheral sovereign debt

Crisis

gets

ugly

Strong

capital

position

Strong and resilient solvency

Low equity gearing

Stable liability structure

High probability

High risk


1

2

3

4

5

6

7

8

Probability

Risk

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Growth in operating asset base mitigates declining yields

1) Investments for P/C and L/H incl. unit-linked assets; 3rd party assets for AM

2)

AM: excluding performance fees; L/H: before policyholder participation

Interest and similar income plus AM fee and commission income2 (EUR bn)

15.6 16.3 17.5 19.3 20.0 20.4

CAGR 5.9%

20.4

CAGR

Operating asset base1

(EUR bn)

927 9711,186 1,239 1,240 1,145

1,4111,690

10.8%

6.7%1.0%

CAGR 8.9%

2003 2004 2005 2006 2007 2008 2009 2010

23.0

1Well positioned


1,918

2011

24.7

06/2012

1,822

2003 2004 2005 2006 2007 2008 2009 2010 2011

P/CL/HAM

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63 60 62 5973

49 47 47 44

23 23 25 2815

34 31 27 32

14 17 13 13 12 17 22 26 24

2004 2005 2006 2007 2008 2009 2010 2011 1H20121)

Historically reported figures excluding Banking segment 2) Based on historically reported figures excluding Corporate & Other,

Banking and consolidation

P/CL/HAM

Resilient and well diversified business model2Well positioned


Stable operating profit

in tough environment …

… thanks to diversification

2004 2005 2006 2007 2008 2009 2010 2011 2012e

6.3

Operating profit (EUR bn)1

Operating profit by

business segment (%)2

9.010.1

8.2 7.96.9

7.5 7.2

8.2

+/-

0.5

1H 2012

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2012e

~2.0%

Business in force

(based on aggregate policy reserves)

New business

2.7%

1

)

Based on IFRS current interest and similar income2

)

Weighted by aggregate policy reserves

5.0%

Ø

guarantee

of new

business2

2012e

Reinvest-

ment

yield F/I 1H 2012

Current1

yield

2011

Ø min. guarantee2

2011

230bpCovered bonds

9ys mat., ~3.4%

77% A or better

~15%

~25%

Government bonds

17ys maturity, ~3.8%

92% A or better

Corporate bonds 8ys mat., ~3.4%

94% BBB or better

~1.7%

200bp

~5%

ABS/MBS

16ys mat., ~3.9%

95% A or better

~55%

+ strong buffer EUR 17bn of RfB equal 5.3% of aggregate policy reserves

~3.7%


3Well positioned

Strong buffers and resilient margins in life

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Operating profit1,2 (%)

GIPS

Italy 10

83

7

GIPS

Revenues1 (%)

Italy

Global lines

Non Europe

Europe ex GIIPS

104

86

1

)

2011, figures used for the split are not consolidated on a Group

basis2

)

Excluding Holding & Treasury3

)

Carrying value of sovereign debt for GIPS and Italy in % of total investments as per 1H 2012

Low share of business in peripheral countries4Well positioned


Global lines

Non Europe

Europe ex GIIPS

Investments3 (%)

7

92

1

Other

Italy

GIPS

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Conservative asset allocation1

> 95% high quality with investment grade ratingBanking debt accounts for 9%; thereof 80% senior, 16% lower tier 2GIPS sovereign debt only 1%78% held by L/H

Well diversifiedBanking stakes reduced and partly hedgedNet equity exposure after hedging, policyholders and tax of EUR 10bn

Equity portfolio

Fixed income portfolio

EUR 481.9bn

Cash / other

1%

EUR 7.4bn

Real estate

2%

EUR 8.8bn

Equities

6%

EUR 27.9bn

Debt instruments 91%

EUR 437.8bn

1

)

1H 2012, based on based on consolidated insurance portfolios (P/C, L/H), Corporate and Other, does not include Banking operations

2

)

Including diversified investment funds (EUR 2.3bn); private and unlisted equity (EUR 6.2bn)3

)

Including U.S. agency MBS investments (EUR 5.5bn)4

)

Including 4% seasoned self-originated German private retail mortgage loans; 1% short-term deposits at banks

EUR 437.8bn

Industrial 5%

Energy 7%

Consumer 19%

Funds and other2

37%

Basic materials 10%

Other financials

15%

Banking

7%

EUR 27.9bn

ABS/MBS3

5%

Government

36%

Covered

24%

Corporate

30%

Other4

5%

thereof Banking 9%

High-quality investment portfolio5Well positioned


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Strong and resilient solvency

FCD solvency (in %)

1H 2012

Equities -30%

Int. rates -100bps

1H 2012

Equities -30%

Int. rates -100bps

186%

176%

183%1

178%

168%

150%

100%

1

)

Lower FCD capital driven by change in DAC write-off (shadow DAC) and negative impact from reserve discounting.

Regulatory capital excludes unrealized gains on bonds

Economic solvency ratio of 178% basedon Solvency II confidence level of 50bps

Economic capital based on marked-to-market sovereign bond portfolio

All solvency ratios after 40% net income dividend accrual

S&P rating AA (outlook negative)

Economic solvency (in %)

6Well positioned


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Shareholder’s

equity

Equity

market

NAV2 FCD

solvency ratio

1

)

Calculation based on equity investments held available for sale and designated at fair value,

associated enterprises, non consolidated affiliated enterprises and JVs2)

Shareholders’

equity and shareholders’

share of off-balance sheet reserves excluding goodwill


As of 1H 2012

7Well positioned

Low equity gearing1

-10%

-3%-2%

-3%-p

… leads to …

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P/C

L/H

Group4

1) Group excluding bank subsidiaries; nominal values

2) Amount may vary depending on prevailing regulatory conditions3) Duration adjusted to allow for asset overhang 4) Including Corporate & Other

Appropriate maturity profile

Effective diversification between debt instruments

Over EUR 250bn group assets eligible as collateral with central banks2

Closely matched ALM structure

Stable liabilities with long duration profile

Resilient surrender ratios in L/HAssets Liabilities

4.1

7.2

6.5

3.3

9.1

8.0

Duration3

(as of 1H 2012, years)

8Well positioned

Stable liability structure


Maturity structure1

(EUR bn, as of 1H 2012)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2041

Per

petu

al

Senior bondsSubordinated bonds

1.5 1.5 1.5 1.0

5.7

2.5

0.91.5

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D Summary

Agenda

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How to create franchise value in an uncertain world

Reorganizing

Asset Management

Optimizing the

broker channel

Creating a

common platform

Modernizing retail

Selected examples

B2C B2B

B2B2C B2C + B2B

Building franchise value in an uncertain world

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Mid-term ambitionProductivity

+ 25%

Levers

Sales efficiency

Cross-selling

Customer retention

Sales compliance

Tools

Simplification of sales process and product architecture

Market management data with “one customer view”

Structured TA1 activity planning

Structured, needs based sales process, also addressing compliance

Fast quote and straight-through processing

Sales tracking and coaching

Routing of admin tasks and calls to back office

Revenues from TAs:P/C 40%, L/H 35%

“Agency Future Program”

to enhance global tied agent productivity


1

)

Tied agent

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Example GermanyNew business1, indexed

04 -

12 / 2011 01 -

08 / 2012

100 114

+14 +17

117100

New business1, indexed

05 -

08 / 2012

+5

105100

Traditional TA modelNew AFP model

Germany

Austria

Czech

Switzerland

France

Spain

India

RolloutPilot

2011 2012 2013

RolloutPilot

Roll-

outPilotPrepare

RolloutPilotPrepare

RolloutPilotPrepare

RolloutPrepare

RolloutPilot

1)

Value of total premiums

2)

2013e ~300 new agencies p.a.

3)

2,000 agents in April 2012; 6,000 expected until April 2013

AFP model 12: new agencies

only

AFP model 23: existing agencies

Rollout started –

first achievements encouraging


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Multi-access combines strengths of Direct and agents to better address

hybrid customers, increase conversion rates and enhance cross-selling

From channel management to multi-access


Traditional structure Target structure

Agentwww.

Quote 1

Product A.1

Call

center

Quote 2

Product A.2

Quote 3

Product A.3

hybrid1 hybrid1

Customer

Agentwww. Call

center

Quote

Customer

Product A

Product modules

Service components

Multi-access strategy:Similar product at every access pointModular product with add-onsSlim-lined process across all access points

1

)

Example France: 77% of “first contact direct customers”

in motor become hybrid customers and change channel/product

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Total GWP non-motor

(EUR mn)

# of products

non-motor

534

201039

383

2013e

914

244

100

148

232

749

771

2013e

493

20101934

516

-1.2%

Under Group-wide implementation

Closed productsrelevant by size

Open products

1,299 1,283

Closed productsnegligible by size

Allianz OE example

Complexity reduction leads to …

… reducedclaims leakage

… enhanced sales productivity

-58%

Complexity reduction to enhance sales productivity


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FA / other proprietary networks 1%


2011

Tied Agents

40%

Auto 5%Banks 3%

Direct 2%Other 4%

Broker44%

Other brokers

Other channelsGlobal brokers

2009 2011

38.3 40.4

13.1 14.1

3.3 3.7

21.9 22.6

+2.7%

+3.7%

+5.9%

P/C revenues Allianz Group

(EUR bn)

CAGR

+1.6%

Allianz broker initiative to accelerate growth

Broker channel accounts for 44%of AZ Group P/C revenues in 2011

Above average growth of broker andespecially global broker revenuesdue to …

… global account management,e.g. with Aon, Marsh, Willis andJardine Lloyd Thompson

… best practice exchange onunder- writing and claims inmid-corp. segment

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)

Total AuM of AAM as of 1H 20122

)

Operating profit growth over full cycle and excluding f/x impact

► Client focusNew approach meets clients’

demand for global solutions across asset classes

► DistributionDistinct sales approaches

► Asset classesFull product offering across all asset classes

► Leadership and governanceLean governance holding Allianz Asset Management

Benefits of structural change Since 2012:


► Streamlined business structurePositioning of two focused global investment managers: PIMCO and AllianzGI

Aspiration: operating profit growth 5% -

10% p.a.2

PIMCO distribution

AllianzGIdistribution

Total AuMEUR 1,721bn1

► Transparency Clear view on both operating pillars

Asset management repositioned

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New setup

New setup

New setup

Consistent investment outperformance1

(%)Strong total net flows

(EUR bn)

96 9695

9393

91

93

95

89

94

8889909192939495969798

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

2001 2011

Core fixed incomeOther strategies2

41%59%63%37%

Growing operating profits(EUR mn)

Diversifying AuM from core fixed income business

361428 416 453 447

516 543566473474

0

100

200

300

400

500

600

700

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12


19.524.722.2

-3.2

13.314.316.3

41.9

28.137.8

-10

0

10

20

30

40

50

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

1

)

3-year 3rd party account based asset-weighted outperformance2

)

Includes e.g. real and absolute return strategies, credit, equities

PIMCO –

continuing success

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New setupNew setup

2011 2013e

Investment outperformance1

(%)

Total net flows in line with peers

(EUR bn)

62

566160

64

60 61

6360

63

45

50

55

60

65

70

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Sound operating profits(EUR mn)

Streamlining of organizational structures to generate further profit potential


-2.9-0.8

-5.6

-0.5

-4.8

0.1

-2.7-3.7

4.5

-1.6

-10

-5

0

5

10

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Number of

legal entities

1

)

3-year 3rd party account based asset-weighted outperformance

35

10 -

15

New setup

111 107123

10592 96 91

107

7897

02040

6080

100120

140160

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

AllianzGI –

solid contributor with potential

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B2B2C> 250 million

customers

Allianz Global Automotive

Allianz Global Assistance

AWC1

and other int.

health operations

Common platform


B2B2C –

maximize growth and operational synergies

Leverage product breadth Increase customer contactfrequency via service componentEliminate product overlaps

Leverage operationalsynergies of IT platforms + distributionAllianz brand or white labeled

EUR 1bnadditional revenuepotential2

1)

Allianz Worldwide Care2

)

Based on 5%-points higher growth rate over 3-year period compared to previous set-up

Bundle

Bundle

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Operating asset base growing to EUR 452bn

Total net inflows of EUR 41bnCIR 57.5%

Please mind the seasonality of the business and our disclaimer3!

Benign NatCatCR 96.8%

As planned

L/H

AM

CO

P/C 2.34.0 –

5.0

1.62.2 –

2.8

1.2

-0.5

Solid operating profit outlook for 2012

Operating profit (EUR bn)

-0.9 –

-1.1

1

)

For FY 20122

)

As % of target range mid-point3

)

Disclaimer: impact from NatCat, financial markets and global economic development not predictable!

6M 2012 Outlook1

published 02/12 6M 2012

2.0 –

2.4

8.2 +/-

0.5

57%2

64%2

55%2

50%2

51%2

Total 4.7

Summary

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To sum it up

Resilient and well diversified business model

Limited peripheral exposure

Strong market positions and brands

Strong capital position

Continuing generation of franchise value

Attractive dividend yield

1

Summary

2

3

4

5

6

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Investor Relations contacts

Oliver SchmidtHead of Investor Relations

Phone +49 89 [email protected]

Peter Hardy


Holger Klotz


Reinhard Lahusen


Christian Lamprecht


Stephanie AldagIR Events


Investor Relations

Fax +49 89 [email protected]

Internet

(English): www.allianz.com/investor-relations(German): www.allianz.com/ir

Appendix

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Financial calendar

November 9, 2012

Interim Report

3rd quarter 2012

February 21, 2013

Financial Press Conference for Fiscal Year 2012

May 7, 2013

Annual General Meeting 2013

May 7, 2014


May 6, 2015


The German Securities Trading Act ("Wertpapierhandelsgesetz")

obliges issuers to announce immediately any information which

may have

a substantial

price impact, irrespective of the communicated schedules. Therefore we cannot exclude that

we

have to

announce key figures of

quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the Internet at www.allianz.com/financialcalendar.

Appendix

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Disclaimer

These assessments are, as always, subject to the disclaimer provided below.

Cautionary Note Regarding Forward-Looking StatementsThe 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, and including market volatility, liquidity and

credit events (iii) the frequency and severity of insured loss events,

including from natural catastrophes and including the development of loss

expenses, (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

company assumes no obligation to update any forward-looking statement.

No duty to update The company assumes no obligation to update any information contained

herein.

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