SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rules 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
December 12, 2005
Commission file Number: 1-15154
ALLIANZ AKTIENGESELLSCHAFT
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 consists of interim financial statements of Allianz Aktiengesellschaft (Allianz AG) for the period ended September 30, 2005 with comparative figures for September 30, 2004, including a reconciliation to U.S. GAAP, for purposes of incorporation by reference into certain registration statements filed by Allianz AG with the U.S. Securities and Exchange Commission.
SIGNATURES
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: December 12, 2005
ALLIANZ AKTIENGESELLSCHAFT | ||
By: | /s/ Dr. Joerg Weber | |
Name: Dr. Joerg Weber Title: Head of Group Management Reporting |
By: | /s/ Jonathan Wismer | |
Name: Jonathan A. Wismer Title: Group Management Reporting |
EXHIBIT INDEX
Exhibit |
Description of Exhibit | |
99.1 | Allianz Group unaudited consolidated financial statements as of and for the nine months ended September 30, 2005 and 2004, including a reconciliation to U.S. GAAP. |
Exhibit 99.1
ALLIANZ GROUP
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
as of and for the nine months ended September 30, 2005 and 2004
F-1
Consolidated Balance Sheets
As of September 30, 2005 and as of December 31, 2004
September 30, 2005 |
December 31, 2004 | |||||
Note | mn | mn | ||||
(unaudited) | ||||||
ASSETS |
||||||
Intangible assets |
4 | 15,465 | 15,147 | |||
Investments in associated enterprises and joint ventures |
3,470 | 5,757 | ||||
Investments |
5 | 276,177 | 248,327 | |||
Loans and advances to banks |
6 | 150,048 | 181,543 | |||
Loans and advances to customers |
7 | 193,179 | 195,680 | |||
Financial assets carried at fair value through income |
8 | 235,097 | 240,574 | |||
Cash and cash equivalents |
24,093 | 15,628 | ||||
Amounts ceded to reinsurers from reserves for insurance and investment contracts |
9 | 23,533 | 22,310 | |||
Deferred tax assets |
15,242 | 14,139 | ||||
Other assets |
52,894 | 51,213 | ||||
Total assets |
989,198 | 990,318 | ||||
September 30, 2005 |
December 31, 2004 | |||||
Note | mn | mn | ||||
(unaudited) | ||||||
SHAREHOLDERS EQUITY AND LIABILITIES |
||||||
Shareholders equity |
10 | 48,588 | 37,691 | |||
Participation certificates and subordinated liabilities |
11 | 14,547 | 13,230 | |||
Reserves for insurance and investment contracts |
12 | 356,489 | 326,380 | |||
Liabilities to banks |
13 | 147,998 | 191,347 | |||
Liabilities to customers |
14 | 159,907 | 157,137 | |||
Certificated liabilities |
15 | 58,645 | 57,752 | |||
Financial liabilities carried at fair value through income |
16 | 141,085 | 145,137 | |||
Other accrued liabilities |
17 | 13,797 | 13,984 | |||
Other liabilities |
18 | 29,154 | 31,271 | |||
Deferred tax liabilities |
15,544 | 14,350 | ||||
Deferred income |
3,444 | 2,039 | ||||
Total shareholders equity and liabilities |
989,198 | 990,318 | ||||
F-2
Consolidated Income Statements (unaudited)
for the three months and nine months ended September 30, 2005 and 2004
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||
2005 |
2004 |
2005 |
2004 |
|||||||||||
Note | mn | mn | mn | mn | ||||||||||
Premiums earned (net) |
19 | 13,994 | 13,830 | 42,292 | 41,829 | |||||||||
Interest and similar income |
20 | 5,282 | 5,181 | 16,597 | 15,773 | |||||||||
Income from investments in associated enterprises and joint ventures (net) |
21 | 80 | 68 | 962 | 707 | |||||||||
Other income from investments |
22 | 1,008 | 783 | 3,487 | 4,137 | |||||||||
Income from financial assets and liabilities carried at fair value through income (net) |
23 | 617 | 346 | 1,099 | 1,305 | |||||||||
Fee and commission income, and income from service activities |
24 | 2,074 | 1,616 | 5,989 | 4,962 | |||||||||
Other income |
25 | 408 | 678 | 1,679 | 1,791 | |||||||||
Total income |
23,463 | 22,502 | 72,105 | 70,504 | ||||||||||
Insurance and investment contract benefits (net) |
26 | (13,375 | ) | (12,318 | ) | (40,194 | ) | (38,860 | ) | |||||
Interest and similar expenses |
27 | (1,387 | ) | (1,460 | ) | (4,700 | ) | (4,234 | ) | |||||
Other expenses from investments |
28 | (310 | ) | (651 | ) | (925 | ) | (2,102 | ) | |||||
Loan loss provisions |
29 | 132 | (51 | ) | 88 | (273 | ) | |||||||
Acquisition costs and administrative expenses (net) |
30 | (6,141 | ) | (5,806 | ) | (17,598 | ) | (17,286 | ) | |||||
Amortization of goodwill |
| (297 | ) | | (885 | ) | ||||||||
Other expenses |
31 | (724 | ) | (730 | ) | (2,707 | ) | (2,770 | ) | |||||
Total expenses |
(21,805 | ) | (21,313 | ) | (66,036 | ) | (66,410 | ) | ||||||
Earnings from ordinary activities before taxes |
1,658 | 1,189 | 6,069 | 4,094 | ||||||||||
Taxes |
32 | (530 | ) | (497 | ) | (1,541 | ) | (1,240 | ) | |||||
Minority interests in earnings |
(334 | ) | (224 | ) | (1,020 | ) | (884 | ) | ||||||
Net income |
794 | 468 | 3,508 | 1,970 | ||||||||||
|
|
|
|
|||||||||||
Basic earnings per share |
33 | 2.03 | 1.28 | 9.11 | 5.37 | |||||||||
Diluted earnings per share |
33 | 2.02 | 1.27 | 9.06 | 5.35 |
F-3
Consolidated Statements of Changes in Shareholders Equity (unaudited)
for the nine months ended September 30, 2005 and 2004
Paidin capital |
Revenue reserves |
Foreign currency translation adjustments |
Unrealized (net) |
Shareholders equity before minority interests |
Minority equity |
Shareholders equity |
||||||||||||||
mn | mn | mn | mn | mn | mn | mn | ||||||||||||||
Balance as of December 31, 2003, as previously reported |
19,347 | 6,914 | (1,916 | ) | 4,247 | 28,592 | 8,367 | 36,959 | ||||||||||||
Effect of implementation of new accounting standards (Note 2) |
| (2,821 | ) | 23 | 2,199 | (599 | ) | (1,101 | ) | (1,700 | ) | |||||||||
Balance as of December 31, 2003, as adjusted |
19,347 | 4,093 | (1,893 | ) | 6,446 | 27,993 | 7,266 | 35,259 | ||||||||||||
Foreign currency translation adjustments |
| | 99 | 17 | 116 | 15 | 131 | |||||||||||||
Changes in the group of consolidated companies |
| (22 | ) | 14 | 5 | (3 | ) | | (3 | ) | ||||||||||
Treasury shares |
| 43 | | | 43 | | 43 | |||||||||||||
Unrealized gains and losses (net) |
| | | (704 | ) | (704 | ) | 39 | (665 | ) | ||||||||||
Net income |
| 1,970 | | | 1,970 | 884 | 2,854 | |||||||||||||
Dividends paid |
| (551 | ) | | | (551 | ) | (432 | ) | (983 | ) | |||||||||
Miscellaneous |
| 104 | | | 104 | (433 | ) | (329 | ) | |||||||||||
Balance as of September 30, 2004 |
19,347 | 5,637 | (1,780 | ) | 5,764 | 28,968 | 7,339 | 36,307 | ||||||||||||
Balance as of December 31, 2004, as previously reported |
19,433 | 8,478 | (2,680 | ) | 5,597 | 30,828 | 9,531 | 40,359 | ||||||||||||
Effect of implementation of new accounting standards (Note 2) |
| (2,585 | ) | 46 | 1,706 | (833 | ) | (1,835 | ) | (2,668 | ) | |||||||||
Balance as of December 31, 2004, as adjusted |
19,433 | 5,893 | (2,634 | ) | 7,303 | 29,995 | 7,696 | 37,691 | ||||||||||||
Foreign currency translation adjustments |
| | 1,428 | 44 | 1,472 | 34 | 1,506 | |||||||||||||
Changes in the group of consolidated companies |
| (195 | ) | 2 | (13 | ) | (206 | ) | 106 | (100 | ) | |||||||||
Capital paid in |
2,064 | | | | 2,064 | | 2,064 | |||||||||||||
Treasury shares |
| 1,640 | | | 1,640 | | 1,640 | |||||||||||||
Unrealized gains and losses (net) |
| | | 2,191 | 2,191 | 466 | 2,657 | |||||||||||||
Net income |
| 3,508 | | | 3,508 | 1,020 | 4,528 | |||||||||||||
Dividends paid |
| (674 | ) | | | (674 | ) | (594 | ) | (1,268 | ) | |||||||||
Miscellaneous |
| (172 | ) | | | (172 | ) | 42 | (130 | ) | ||||||||||
Balance as of September 30, 2005 |
21,497 | 10,000 | (1,204 | ) | 9,525 | 39,818 | 8,770 | 48,588 | ||||||||||||
F-4
Consolidated Statements of Cash Flows (unaudited)
for the nine months ended September 30, 2005 and 2004
Nine months ended September 30, |
2005 |
2004 |
||||
mn | mn | |||||
Operating activities |
||||||
Net income |
3,508 | 1,970 | ||||
Change in unearned premiums |
1,712 | 1,469 | ||||
Change in aggregate policy reserves (without aggregate policy reserves for life insurance products in accordance with SFAS 97) |
12,283 | 10,912 | ||||
Change in reserve for loss and loss adjustment expenses |
2,759 | 2,091 | ||||
Change in other insurance reserves (without change in the reserve for latent premium refunds from unrealized investment gains and losses) |
2,745 | 1,714 | ||||
Change in deferred acquisition costs |
(1,716 | ) | (544 | ) | ||
Change in funds held by others under reinsurance business assumed |
(10 | ) | 457 | |||
Change in funds held under reinsurance business ceded |
(1,240 | ) | 477 | |||
Change in accounts receivable/payable on reinsurance business |
(84 | ) | (49 | ) | ||
Change in trading securities (including trading liabilities) |
8,513 | (22,059 | ) | |||
Change in loans and advances to banks and customers |
34,657 | (38,888 | ) | |||
Change in liabilities to banks and customers |
(40,857 | ) | 47,255 | |||
Change in certificated liabilities |
797 | 2,397 | ||||
Change in other receivables and liabilities |
(1,388 | ) | 5,392 | |||
Change in deferred tax assets/liabilities (without change in deferred tax assets/liabilities from unrealized investment gains and losses) |
(52 | ) | 164 | |||
Non-cash investment income/expenses |
(4,470 | ) | (3,024 | ) | ||
Amortization of goodwill |
| 885 | ||||
Other |
1,518 | (1,958 | ) | |||
Net cash flow provided by operating activities |
18,675 | 8,661 | ||||
Investing activities |
||||||
Change in securities available-for-sale |
(19,716 | ) | (9,648 | ) | ||
Change in investments held-to-maturity |
200 | (607 | ) | |||
Change in real estate |
(53 | ) | (1,457 | ) | ||
Change in other investments |
3,124 | 861 | ||||
Change in cash and cash equivalents from the acquisition of consolidated affiliated companies |
| (1,293 | ) | |||
Other |
(284 | ) | (1,528 | ) | ||
Net cash flow used in investing activities |
(16,729 | ) | (13,672 | ) | ||
Financing activities |
||||||
Change in participation certificates and subordinated liabilities |
1,311 | 1,232 | ||||
Change in investments held on account and at risk of life insurance policyholders |
(8,916 | ) | (6,177 | ) | ||
Change in aggregate policy reserves for life insurance products according to SFAS 97 |
10,404 | 4,365 | ||||
Cash inflow from capital increases |
2,064 | | ||||
Dividend payouts |
(1,268 | ) | (983 | ) | ||
Other from shareholders capital and minority interests (without change in revenue reserve from unrealized investment gains and losses) |
2,862 | 1,830 | ||||
Net cash flow provided by financing activities |
6,457 | 267 | ||||
Effect of exchange rate changes on cash and cash equivalents |
62 | 14 | ||||
Change in cash and cash equivalents |
8,465 | (4,730 | ) | |||
Cash and cash equivalents at beginning of period |
15,628 | 25,528 | ||||
Cash and cash equivalents at end of period |
24,093 | 20,798 | ||||
The data for the Allianz Groups consolidated statements of cash flows was prepared in accordance with International Financial Reporting Standards (IFRS).
Outflows for taxes on income amounted to 969 mn (2004: 885 mn).
F-5
Notes to the Consolidated Financial Statements (unaudited)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
The consolidated financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS) as adopted under European Union (EU) regulations in accordance with clause 315a of the German Commercial Code (HGB). EU regulations require full compliance with IFRS with the exception of the IAS 39 carve-out rules. Nevertheless, the endorsement by the EU, i.e. the elimination of the carve-out-rule, is expected before year-end 2005 and thus the fair value option for liabilities is already applied. Since 2002, the designation IFRS applies to the overall framework of all standards approved by the International Accounting Standards Board. Already approved standards continue to be cited as International Accounting Standards (IAS). All standards currently applicable have been adopted in the preparation of these consolidated financial statements.
For years through 2004, IFRS did not provide specific guidance concerning the reporting of insurance and reinsurance contracts. Therefore, as envisioned in the IFRS Framework, the provisions embodied under accounting principles generally accepted in the United States of America (U.S. GAAP) have been applied. See Note 2 regarding changes to IFRS effective January 1, 2005. The financial statements are presented in Euros ().
In certain cases, prior reporting period figures were reclassified in the consolidated balance sheet and in the consolidated income statement to make them comparable with the presentation of the current reporting period. These reclassifications had no impact on income.
2 Recently adopted accounting pronouncements
Effective January 1, 2005, the Allianz Group adopted IAS 32 revised, Financial Instruments: Disclosure and Presentation (IAS 32 revised) and IAS 39 revised, Financial Instruments: Recognition and Measurement (IAS 39 revised).
IAS 39 revised prohibits reversals of impairment losses on equity securities. According to the Allianz Groups previous accounting policy, if the amount of an impairment previously recorded on an equity security decreases, the impairment was reversed. IAS 39 revised required retrospective application of this change; therefore, the Allianz Groups previously issued consolidated financial statements were required to be restated to include the effects of this change. As a result of the adoption of this provision of IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Other income from investments |
(15 | ) | (262 | ) | ||
Insurance and investment contract benefits (net) |
(27 | ) | 93 | |||
Other expenses from investments |
34 | 100 | ||||
Taxes |
5 | 18 | ||||
Minority interests in earnings |
(1 | ) | (5 | ) | ||
Net impact on previously reported net income |
(4 | ) | (56 | ) | ||
In accordance with IAS 32 revised, a financial instrument qualifies as a financial liability of the issuer if it gives the holder the right to put the instrument back to the issuer for cash or another financial asset (a puttable instrument). The classification as a financial liability is independent of considerations such as when the right is exercisable, how the amount payable or receivable upon exercise of the right is determined, and whether the puttable instrument has a fixed maturity. As a result of the adoption of IAS 32 revised, the Allianz Group was required to reclassify the minority interests in shareholders equity of certain consolidated investment funds to liabilities. These liabilities are
F-6
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
required to be recorded at redemption amount with changes recorded in the consolidated income statement.
Further, IAS 39 revised created a new category, designated at fair value through income, for financial assets. Financial assets designated at fair value through income are recognized at fair value with changes recognized in net income. As a result of being required to record the liabilities related to the previously mentioned consolidated investment funds at the redemption amount due to the adoption of IAS 32 revised, the Allianz Group reclassified the related investments from securities available-for-sale to financial assets designated at fair value through income. IAS 39 revised required retrospective application of these changes.
As a result of the adoption of these provisions of IAS 32 revised and IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Interest and similar income |
(9 | ) | (38 | ) | ||
Other income from investments |
(54 | ) | (130 | ) | ||
Income from financial assets and liabilities carried at fair value through income (net) |
38 | 125 | ||||
Insurance and investment contract benefits (net) |
10 | (33 | ) | |||
Other expenses from investments |
27 | 82 | ||||
Taxes |
(4 | ) | (2 | ) | ||
Minority interests in earnings |
(7 | ) | 2 | |||
Net impact on previously reported net income |
1 | 6 | ||||
In addition, as a result of the adoption of IAS 39 revised, the Allianz Group reclassified certain securities available-for-sale to loans and advances to banks and loans and advances to customers. As a result of the adoption of this provision of IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Other income from investments |
11 | 8 | ||||
Other income |
(11 | ) | (8 | ) | ||
Other expenses from investments |
33 | 45 | ||||
Other expenses |
(33 | ) | (45 | ) | ||
Net impact on previously reported net income |
| | ||||
Effective January 1, 2005, the Allianz Group adopted IFRS 2, Share Based Payments (IFRS 2). In accordance with IFRS 2, share based compensation plans are required to be classified as equity settled or cash settled plans. Equity settled plans are measured at fair value on the grant date with changes recognized in the income statement and shareholders equity over the vesting period. Cash settled plans are measured at fair value at each reporting date and recognized as liabilities. Changes in the fair value of cash settled plans are recognized as expense in the income statement.
A company is considered to have a cash settled plan if the shares issued are redeemable, either mandatorily or at the counter-partys option. In this respect, IFRS 2 has incorporated the puttable instrument concept of IAS 32 revised, which requires that such instruments be classified as liabilities rather than equity instruments. As a result of the adoption of IFRS 2, the PIMCO LLC Class B Unit Purchase Plan (Class B Plan) is considered a cash settled plan as the equity instruments issued are puttable at the counter-partys option. According to
F-7
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
the Allianz Groups previous accounting policy, the Class B Plan was considered an equity settled plan.
Further, IFRS 2 requires that equity settled plans include a best estimate of the number of equity instruments that are expected to vest in determining the amount of expense to be recognized. The Allianz Groups previous accounting policy required that forfeitures of equity instruments be recognized when incurred.
As a result of the adoption of IFRS 2, the Allianz Group recorded the following effects in its consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Acquisition and administrative expenses (net) |
(60 | ) | (206 | ) | ||
Taxes |
12 | 50 | ||||
Minority interests in earnings |
29 | 84 | ||||
Net impact on previously reported net income |
(19 | ) | (72 | ) | ||
Effective January 1, 2005, the Allianz Group adopted IFRS 3, Business Combinations (IFRS 3). In accordance with IFRS 3, a company must cease the amortization of goodwill and intangible assets with an indefinite life and rather test for impairment on an annual basis in addition to whenever there is an indication that the carrying value is not recoverable. As a result of the adoption on IFRS 3 on January 1, 2005, the Allianz Group ceased amortization of goodwill and brand names.
Effective January 1, 2005, the Allianz Group adopted IFRS 4, Insurance Contracts (IFRS 4). IFRS 4 represents the completion of phase I and is a transitional standard until the IASB has more fully addressed the recognition and measurement of insurance contracts. IFRS 4 requires that all contracts issued by insurance companies be classified as either insurance contracts or investment contracts. Contracts with significant insurance risk are considered insurance contracts. IFRS 4 permits a company to continue with its previously adopted accounting policies with regard to recognition and measurement of insurance contracts. Only in case of presentation of more reliable figures a change in accounting policy shall be carried out. As a result, the Allianz Group principally continues to apply the provisions of US GAAP for the recognition and measurement of insurance contracts. Contracts issued by insurance companies without significant insurance risk are considered investment contracts. Investment contracts are accounted for in accordance with IAS 39 revised. As a result of the adoption of IFRS 4, certain contracts were reclassified as investment contracts. This change did not have a material effect on the Allianz Groups shareholders equity as of December 31, 2003.
Further, the Allianz Group reclassified the assets related to unit-linked insurance and investment contracts to financial assets designated at fair value through income and the related liabilities to financial liabilities designated at fair value through income as allowed under the EU insurance directives.
As a result of this reclassification, the Allianz Group recorded the following effects in its consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Income from financial assets and liabilities carried at fair value through income (net) |
12 | (105 | ) | |||
Insurance and investment contract benefits (net) |
(12 | ) | 105 | |||
Net impact on previously reported net income |
| | ||||
F-8
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Impairments of equity securities
IAS 39 revised requires a change to the Allianz Groups impairment criteria for available-for-sale equity securities. An equity security is considered to be impaired if there is objective evidence that the cost of the equity security may not be recovered. IAS 39 revised requires that a significant or prolonged decline in the fair value of an equity security below cost is considered to be objective evidence of impairment. The Allianz Group established, beside the existing qualitative impairment criteria, new quantitative impairment criteria for equity securities to define significant or prolonged decline. To satisfy the significant criteria, the Allianz Group has established a policy that an equity security is considered impaired if the fair value is below the weighted-average cost by more than 20%. To satisfy the prolonged criteria, the Allianz Group established a policy that an equity security is considered impaired if the fair value is below the weighted-average cost for greater than nine months. Each of these policies is applied independently at the subsidiary level.
In addition, IAS 39 revised does not allow an adjusted cost basis to be established upon impairment of an equity security. Rather, each reporting period, if the fair value is less than the original cost basis of the equity security, the security is analyzed for impairment based upon the Allianz Groups impairment criteria. At each reporting date, for equity securities that are determined to be impaired based upon the Allianz Groups impairment criteria, an impairment is recognized for the difference between the fair value and the original cost basis, less any previously recognized impairments. According to the Allianz Groups previously applied accounting policy, upon the recognition of an impairment of an equity security, an adjusted cost basis was established. Therefore, at each reporting period, if the fair value was less than the adjusted cost basis of the equity security, the security was analyzed for impairment based upon the Allianz Groups impairment criteria.
As a result, the Allianz Group recorded the following effects in the consolidated income statements:
(Debit) Credit |
Three months ended 2004 |
Nine months ended |
||||
mn | mn | |||||
Other income from investments |
111 | 742 | ||||
Insurance and investment contract benefits (net) |
17 | (138 | ) | |||
Other expenses from investments |
(157 | ) | (199 | ) | ||
Taxes |
(15 | ) | (70 | ) | ||
Minority interests in earnings |
(3 | ) | (68 | ) | ||
Net impact on previously reported net income |
(47 | ) | 267 | |||
F-9
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Fair value option for financial liabilities
IAS 39 revised created a new category, designated at fair value through income, for financial assets and liabilities. Both, financial assets and liabilities designated at fair value through income are recognised at fair value with changes recognised in net income. The Allianz Group already implemented this new rule for financial assets as of January 1, 2005. The implementation of this regulation with regard to financial liabilities was not allowed because the EU did not endorse it based on the revised IAS 39. In June 2005 the IASB adjusted the fair value regulation and considered the concerns raised by the EU. It is expected that the EU will endorse the new rules in the fourth quarter 2005. Thus, the Allianz Group already applied the fair value option for financial liabilities retrospectively in the third quarter due to the forthcoming EU endorsement.
This change did not have a material effect on net income for the three and nine months ended September 30, 2004.
Discretionary participating features
IFRS 4 contains specific guidance for contracts with discretionary participation features (DPF). These include other contracts that have additional payments where the timing or amount is at the discretion of the company. Based on this definition the Allianz Group recognised retrospectively a deferred premium refund for specific contracts for the Swiss business.
This change did not have a material effect on net income for the three and nine months ended September 30, 2004.
F-10
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Business Segment InformationConsolidated Balance Sheets
As of September 30, 2005 and as of December 31, 2004
Property-Casualty |
Life/Health | |||||||
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 | |||||
mn | mn | mn | mn | |||||
ASSETS |
||||||||
Intangible assets |
2,230 | 2,185 | 4,012 | 4,075 | ||||
Investments in associated enterprises and joint ventures |
48,231 | 48,359 | 4,038 | 5,532 | ||||
Investments |
86,612 | 81,245 | 173,886 | 154,920 | ||||
Loans and advances to banks |
13,632 | 7,424 | 56,984 | 56,699 | ||||
Loans and advances to customers |
2,006 | 6,224 | 27,658 | 28,808 | ||||
Financial assets carried at fair value through income |
3,285 | 1,137 | 61,708 | 46,668 | ||||
Cash and cash equivalents |
2,336 | 1,665 | 1,574 | 968 | ||||
Amounts ceded to reinsurers from reserves for insurance and investment contracts |
14,561 | 12,337 | 10,827 | 16,382 | ||||
Deferred tax assets |
7,597 | 6,816 | 3,849 | 3,451 | ||||
Other assets |
21,579 | 20,045 | 23,501 | 20,362 | ||||
Total segment assets |
202,069 | 187,437 | 368,037 | 337,865 | ||||
Property-Casualty |
Life/Health | |||||||
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 | |||||
mn | mn | mn | mn | |||||
SHAREHOLDERS EQUITY AND LIABILITIES |
||||||||
Participation certificates and subordinated liabilities |
7,307 | 5,497 | 140 | 141 | ||||
Reserves for insurance and investment contracts |
86,931 | 83,095 | 271,574 | 249,854 | ||||
Liabilities to banks |
2,605 | 1,358 | 1,082 | 1,241 | ||||
Liabilities to customers |
5,080 | 5,336 | 74 | 165 | ||||
Certificated liabilities |
9,668 | 11,405 | 4 | 68 | ||||
Financial liabilities carried at fair value through income |
1,252 | 530 | 56,679 | 44,776 | ||||
Other accrued liabilities |
6,032 | 5,960 | 856 | 1,016 | ||||
Other liabilities |
13,652 | 12,352 | 16,371 | 21,280 | ||||
Deferred tax liabilities |
8,310 | 7,894 | 5,172 | 4,539 | ||||
Deferred income |
124 | 161 | 124 | 139 | ||||
Total segment liabilities |
140,961 | 133,588 | 352,076 | 323,219 | ||||
*) | Shareholders equity and minority interests in shareholders equity. |
F-11
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Banking |
Asset Management |
Consolidation Adjustments |
Group | |||||||||||||||
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 | |||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||
2,541 | 2,526 | 6,682 | 6,362 | | (1 | ) | 15,465 | 15,147 | ||||||||||
2,764 | 3,037 | 3 | 3 | (51,566 | ) | (51,174 | ) | 3,470 | 5,757 | |||||||||
16,672 | 17,736 | 800 | 529 | (1,793 | ) | (6,103 | ) | 276,177 | 248,327 | |||||||||
81,281 | 119,025 | 274 | 144 | (2,123 | ) | (1,749 | ) | 150,048 | 181,543 | |||||||||
171,348 | 168,346 | 85 | 29 | (7,918 | ) | (7,727 | ) | 193,179 | 195,680 | |||||||||
169,914 | 192,746 | 307 | 131 | (117 | ) | (108 | ) | 235,097 | 240,574 | |||||||||
20,054 | 13,097 | 588 | 431 | (459 | ) | (533 | ) | 24,093 | 15,628 | |||||||||
| | | | (1,855 | ) | (6,409 | ) | 23,533 | 22,310 | |||||||||
3,588 | 3,679 | 202 | 187 | 6 | 6 | 15,242 | 14,139 | |||||||||||
10,131 | 15,341 | 3,407 | 2,942 | (5,724 | ) | (7,477 | ) | 52,894 | 51,213 | |||||||||
478,293 | 535,533 | 12,348 | 10,758 | (71,549 | ) | (81,275 | ) | 989,198 | 990,318 | |||||||||
Banking |
Asset Management |
Consolidation Adjustments |
Group | |||||||||||||||
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 | |||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||
7,308 | 7,815 | | | (208 | ) | (223 | ) | 14,547 | 13,230 | |||||||||
4 | 4 | | | (2,020 | ) | (6,573 | ) | 356,489 | 326,380 | |||||||||
144,644 | 189,187 | 41 | 7 | (374 | ) | (446 | ) | 147,998 | 191,347 | |||||||||
161,718 | 158,127 | 500 | 294 | (7,465 | ) | (6,785 | ) | 159,907 | 157,137 | |||||||||
49,610 | 47,041 | 4 | 4 | (641 | ) | (766 | ) | 58,645 | 57,752 | |||||||||
83,277 | 99,934 | | | (123 | ) | (103 | ) | 141,085 | 145,137 | |||||||||
5,115 | 5,783 | 1,794 | 1,225 | | | 13,797 | 13,984 | |||||||||||
4,482 | 8,859 | 1,290 | 709 | (6,641 | ) | (11,929 | ) | 29,154 | 31,271 | |||||||||
1,989 | 1,860 | 73 | 57 | | | 15,544 | 14,350 | |||||||||||
3,170 | 1,737 | 26 | 2 | | | 3,444 | 2,039 | |||||||||||
461,317 | 520,347 | 3,728 | 2,298 | (17,472 | ) | (26,825 | ) | 940,610 | 952,627 | |||||||||
Shareholders equity*) | 48,588 | 37,691 | ||||||||||||||||
Total shareholders equity and liabilities | 989,198 | 990,318 | ||||||||||||||||
F-12
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Business Segment InformationConsolidated Income Statements
for the three months ended September 30, 2005 and 2004
Property-Casualty |
Life/Health |
|||||||||||
Three months ended September 30, |
2005 |
2004 |
2005 |
2004 |
||||||||
mn | mn | mn | mn | |||||||||
Premiums earned (net) |
9,788 | 9,840 | 4,206 | 3,990 | ||||||||
Interest and similar income |
906 | 932 | 2,846 | 2,693 | ||||||||
Income from associated enterprises and joint ventures (net) |
152 | 72 | 54 | 82 | ||||||||
Other income from investments |
329 | 207 | 639 | 443 | ||||||||
Income from financial assets and liabilities carried at fair value through income (net) |
(65 | ) | 3 | 291 | 103 | |||||||
Fee and commission income, and income from service activities |
451 | 243 | 53 | 52 | ||||||||
Other income |
176 | 281 | 211 | 387 | ||||||||
Total income |
11,737 | 11,578 | 8,300 | 7,750 | ||||||||
Insurance and investment contract benefits (net) |
(7,247 | ) | (6,853 | ) | (6,128 | ) | (5,465 | ) | ||||
Interest and similar expenses |
(243 | ) | (369 | ) | (102 | ) | (212 | ) | ||||
Other expenses from investments |
(74 | ) | (319 | ) | (187 | ) | (275 | ) | ||||
Loan loss provisions |
(3 | ) | 2 | 6 | (1 | ) | ||||||
Acquisition costs and administrative expenses (net) |
(2,799 | ) | (2,654 | ) | (1,077 | ) | (1,199 | ) | ||||
Amortization of goodwill |
| (96 | ) | | (40 | ) | ||||||
Other expenses |
(505 | ) | (337 | ) | (149 | ) | (176 | ) | ||||
Total expenses |
(10,871 | ) | (10,626 | ) | (7,637 | ) | (7,368 | ) | ||||
Earnings from ordinary activities before taxes |
866 | 952 | 663 | 382 | ||||||||
Taxes |
(277 | ) | (452 | ) | (147 | ) | (186 | ) | ||||
Minority interests in earnings |
(181 | ) | (132 | ) | (140 | ) | (71 | ) | ||||
Net income |
408 | 368 | 376 | 125 | ||||||||
F-13
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Banking |
Asset Management |
Consolidation Adjustments |
Group |
|||||||||||||||||||||
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
|||||||||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||||||||
| | | | | | 13,994 | 13,830 | |||||||||||||||||
1,643 | 1,751 | 23 | 16 | (136 | ) | (211 | ) | 5,282 | 5,181 | |||||||||||||||
54 | 29 | | | (180 | ) | (115 | ) | 80 | 68 | |||||||||||||||
44 | 130 | 1 | | (5 | ) | 3 | 1,008 | 783 | ||||||||||||||||
375 | 244 | 16 | (1 | ) | | (3 | ) | 617 | 346 | |||||||||||||||
772 | 701 | 968 | 778 | (170 | ) | (158 | ) | 2,074 | 1,616 | |||||||||||||||
35 | 42 | 5 | 6 | (19 | ) | (38 | ) | 408 | 678 | |||||||||||||||
2,923 | 2,897 | 1,013 | 799 | (510 | ) | (522 | ) | 23,463 | 22,502 | |||||||||||||||
| | | | | | (13,375 | ) | (12,318 | ) | |||||||||||||||
(1,165 | ) | (1,092 | ) | (11 | ) | (3 | ) | 134 | 216 | (1,387 | ) | (1,460 | ) | |||||||||||
(49 | ) | (56 | ) | | (1 | ) | | | (310 | ) | (651 | ) | ||||||||||||
129 | (54 | ) | | | | 2 | 132 | (51 | ) | |||||||||||||||
(1,558 | ) | (1,440 | ) | (891 | ) | (657 | ) | 184 | 144 | (6,141 | ) | (5,806 | ) | |||||||||||
| (65 | ) | | (96 | ) | | | | (297 | ) | ||||||||||||||
(57 | ) | (177 | ) | (25 | ) | (95 | ) | 12 | 55 | (724 | ) | (730 | ) | |||||||||||
(2,700 | ) | (2,884 | ) | (927 | ) | (852 | ) | 330 | 417 | (21,805 | ) | (21,313 | ) | |||||||||||
223 | 13 | 86 | (53 | ) | (180 | ) | (105 | ) | 1,658 | 1,189 | ||||||||||||||
(74 | ) | 134 | (34 | ) | 9 | 2 | (2 | ) | (530 | ) | (497 | ) | ||||||||||||
(26 | ) | (22 | ) | (12 | ) | (13 | ) | 25 | 14 | (334 | ) | (224 | ) | |||||||||||
123 | 125 | 40 | (57 | ) | (153 | ) | (93 | ) | 794 | 468 | ||||||||||||||
F-14
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Business Segment InformationConsolidated Income Statements
for the nine months ended September 30, 2005 and 2004
Property-Casualty |
Life/Health |
|||||||||||
Nine months ended September 30, |
2005 |
2004 |
2005 |
2004 |
||||||||
mn | mn | mn | mn | |||||||||
Premiums earned (net) |
28,522 | 28,827 | 13,770 | 13,002 | ||||||||
Interest and similar income |
3,067 | 3,076 | 8,786 | 8,383 | ||||||||
Income from associated enterprises and joint ventures (net) |
1,305 | 1,560 | 724 | 283 | ||||||||
Other income from investments |
1,143 | 1,647 | 2,082 | 1,931 | ||||||||
Income from financial assets and liabilities carried at fair value through income (net) |
(166 | ) | (22 | ) | 291 | 168 | ||||||
Fee and commission income, and income from service activities |
1,266 | 672 | 136 | 154 | ||||||||
Other income |
817 | 650 | 669 | 971 | ||||||||
Total income |
35,954 | 36,410 | 26,458 | 24,892 | ||||||||
Insurance and investment contract benefits (net) |
(19,884 | ) | (20,575 | ) | (20,285 | ) | (18,285 | ) | ||||
Interest and similar expenses |
(1,125 | ) | (1,121 | ) | (340 | ) | (542 | ) | ||||
Other expenses from investments |
(270 | ) | (912 | ) | (498 | ) | (672 | ) | ||||
Loan loss provisions |
(3 | ) | (1 | ) | 3 | (2 | ) | |||||
Acquisition costs and administrative expenses (net) |
(8,305 | ) | (7,928 | ) | (3,055 | ) | (3,331 | ) | ||||
Amortization of goodwill |
| (287 | ) | | (119 | ) | ||||||
Other expenses |
(1,985 | ) | (1,412 | ) | (499 | ) | (630 | ) | ||||
Total expenses |
(31,572 | ) | (32,236 | ) | (24,674 | ) | (23,581 | ) | ||||
Earnings from ordinary activities before taxes |
4,382 | 4,174 | 1,784 | 1,311 | ||||||||
Taxes |
(909 | ) | (1,069 | ) | (282 | ) | (442 | ) | ||||
Minority interests in earnings |
(724 | ) | (725 | ) | (394 | ) | (283 | ) | ||||
Net income |
2,749 | 2,380 | 1,108 | 586 | ||||||||
F-15
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Banking |
Asset Management |
Consolidation Adjustments |
Group |
|||||||||||||||||||||
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
|||||||||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||||||||
| | | | | | 42,292 | 41,829 | |||||||||||||||||
5,100 | 4,878 | 67 | 47 | (423 | ) | (611 | ) | 16,597 | 15,773 | |||||||||||||||
238 | 116 | | | (1,305 | ) | (1,252 | ) | 962 | 707 | |||||||||||||||
596 | 515 | 6 | 7 | (340 | ) | 37 | 3,487 | 4,137 | ||||||||||||||||
953 | 1,160 | 21 | 2 | | (3 | ) | 1,099 | 1,305 | ||||||||||||||||
2,412 | 2,310 | 2,661 | 2,283 | (486 | ) | (457 | ) | 5,989 | 4,962 | |||||||||||||||
249 | 195 | 22 | 23 | (78 | ) | (48 | ) | 1,679 | 1,791 | |||||||||||||||
9,548 | 9,174 | 2,777 | 2,362 | (2,632 | ) | (2,334 | ) | 72,105 | 70,504 | |||||||||||||||
| | | | (25 | ) | | (40,194 | ) | (38,860 | ) | ||||||||||||||
(3,615 | ) | (3,162 | ) | (37 | ) | (10 | ) | 417 | 601 | (4,700 | ) | (4,234 | ) | |||||||||||
(137 | ) | (364 | ) | | (2 | ) | (20 | ) | (152 | ) | (925 | ) | (2,102 | ) | ||||||||||
88 | (271 | ) | | | | 1 | 88 | (273 | ) | |||||||||||||||
(4,336 | ) | (4,446 | ) | (2,427 | ) | (2,010 | ) | 525 | 429 | (17,598 | ) | (17,286 | ) | |||||||||||
| (194 | ) | | (285 | ) | | | | (885 | ) | ||||||||||||||
(207 | ) | (513 | ) | (84 | ) | (319 | ) | 68 | 104 | (2,707 | ) | (2,770 | ) | |||||||||||
(8,207 | ) | (8,950 | ) | (2,548 | ) | (2,626 | ) | 965 | 983 | (66,036 | ) | (66,410 | ) | |||||||||||
1,341 | 224 | 229 | (264 | ) | (1,667 | ) | (1,351 | ) | 6,069 | 4,094 | ||||||||||||||
(308 | ) | 225 | (51 | ) | 42 | 9 | 4 | (1,541 | ) | (1,240 | ) | |||||||||||||
(77 | ) | (104 | ) | (34 | ) | (40 | ) | 209 | 268 | (1,020 | ) | (884 | ) | |||||||||||
956 | 345 | 144 | (262 | ) | (1,449 | ) | (1,079 | ) | 3,508 | 1,970 | ||||||||||||||
F-16
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
The following table sets forth the total revenues, operating profit and IFRS net income for each of our business segments for the three months and nine months ended September 30, 2005 and 2004, as well as IFRS consolidated net income of the Allianz Group.
Property-Casualty |
Life/Health |
|||||||||||
Three months ended September 30, |
2005 |
2004 |
2005 |
2004 |
||||||||
mn | mn | mn | mn | |||||||||
Total revenues*) |
10,472 | 10,432 | 11,116 | 10,841 | ||||||||
Operating profit |
696 | 1,138 | 478 | 378 | ||||||||
Earnings from ordinary activities before taxes |
866 | 952 | 663 | 382 | ||||||||
Taxes |
(277 | ) | (452 | ) | (147 | ) | (186 | ) | ||||
Minority interests in earnings |
(181 | ) | (132 | ) | (140 | ) | (71 | ) | ||||
Net income (loss) |
408 | 368 | 376 | 125 | ||||||||
Nine months ended September 30, |
||||||||||||
Total revenues*) |
34,439 | 34,646 | 34,942 | 31,946 | ||||||||
Operating profit |
3,090 | 2,898 | 1,283 | 1,048 | ||||||||
Earnings from ordinary activities before taxes |
4,382 | 4,174 | 1,784 | 1,311 | ||||||||
Taxes |
(909 | ) | (1,069 | ) | (282 | ) | (442 | ) | ||||
Minority interests in earnings |
(724 | ) | (725 | ) | (394 | ) | (283 | ) | ||||
Net income (loss) |
2,749 | 2,380 | 1,108 | 586 | ||||||||
*) | Total revenues comprise property-casualty segments gross premiums written, life/health segments statutory premiums, banking segments operating revenues, and asset management segments operating revenues. |
F-17
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Banking |
Asset Management |
Consolidation Adjustments |
Total Group |
|||||||||||||||||||||
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
|||||||||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||||||||
1,542 | 1,527 | 708 | 564 | (63 | ) | (228 | ) | 23,775 | 23,136 | |||||||||||||||
250 | 136 | 299 | 217 | | | 1,723 | 1,869 | |||||||||||||||||
223 | 13 | 86 | (53 | ) | (180 | ) | (105 | ) | 1,658 | 1,189 | ||||||||||||||
(74 | ) | 134 | (34 | ) | 9 | 2 | (2 | ) | (530 | ) | (497 | ) | ||||||||||||
(26 | ) | (22 | ) | (12 | ) | (13 | ) | 25 | 14 | (334 | ) | (224 | ) | |||||||||||
123 | 125 | 40 | (57 | ) | (153 | ) | (93 | ) | 794 | 468 | ||||||||||||||
4,611 | 4,948 | 1,933 | 1,664 | (192 | ) | (612 | ) | 75,733 | 72,592 | |||||||||||||||
759 | 567 | 785 | 578 | | | 5,917 | 5,091 | |||||||||||||||||
1,341 | 224 | 229 | (264 | ) | (1,667 | ) | (1,351 | ) | 6,069 | 4,094 | ||||||||||||||
(308 | ) | 225 | (51 | ) | 42 | 9 | 4 | (1,541 | ) | (1,240 | ) | |||||||||||||
(77 | ) | (104 | ) | (34 | ) | (40 | ) | 209 | 268 | (1,020 | ) | (884 | ) | |||||||||||
956 | 345 | 144 | (262 | ) | (1,449 | ) | (1,079 | ) | 3,508 | 1,970 | ||||||||||||||
F-18
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Property-Casualty Insurance Segment
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
2005 |
2004 |
2005 |
2004 |
|||||||||
mn | mn | mn | mn | |||||||||
Gross premiums written |
10,472 | 10,432 | 34,439 | 34,646 | ||||||||
Premiums earned (net)1) |
9,788 | 9,840 | 28,522 | 28,827 | ||||||||
Current income from investments (net)2) |
776 | 721 | 2,622 | 2,387 | ||||||||
Insurance benefits (net)3) |
(7,225 | ) | (6,803 | ) | (19,845 | ) | (20,249 | ) | ||||
Net acquisition costs and administrative expenses4) |
(2,648 | ) | (2,540 | ) | (7,954 | ) | (7,619 | ) | ||||
Other operating income/(expenses)(net) |
5 | (80 | ) | (255 | ) | (448 | ) | |||||
Operating profit |
696 | 1,138 | 3,090 | 2,898 | ||||||||
Net capital gains and impairments on investments5) |
296 | (112 | ) | 1,040 | 982 | |||||||
Net trading income/(expenses)6) |
(108 | ) | (1 | ) | (269 | ) | (36 | ) | ||||
Intra-group dividends and profit transfer |
143 | 96 | 1,207 | 1,145 | ||||||||
Interest expense on external debt |
(160 | ) | (199 | ) | (630 | ) | (654 | ) | ||||
Amortization of goodwill7) |
| (96 | ) | | (287 | ) | ||||||
Restructuring charges |
(1 | ) | | (56 | ) | | ||||||
Other non-operating income/(expenses) (net) |
| 126 | | 126 | ||||||||
Earnings from ordinary activities before taxes |
866 | 952 | 4,382 | 4,174 | ||||||||
Taxes |
(277 | ) | (452 | ) | (909 | ) | (1,069 | ) | ||||
Minority interests in earnings |
(181 | ) | (132 | ) | (724 | ) | (725 | ) | ||||
Net income |
408 | 368 | 2,749 | 2,380 | ||||||||
Loss ratio8) in % |
72.9 | 66.4 | 68.2 | 68.2 | ||||||||
Expense ratio9) in % |
24.1 | 24.5 | 24.8 | 25.0 | ||||||||
Combined ratio in % |
97.0 | 90.9 | 93.0 | 93.2 | ||||||||
1) | Net of earned premiums ceded to reinsurers of 1,614 million and 4,071 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 1,518 million and 9M 2004: 4,079 million). |
2) | Net of investment management expenses of 88 million and 257 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 79 million and 9M 2004: 244 million), and interest expenses of 21 million and 136 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 99 million and 9M 2004: 341 million). |
3) | Comprises net claims incurred of 7,130 million and 19,456 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 6,529 million and 9M 2004: 19,655 million), net expenses from changes in other net underwriting provisions of 44 million and 130 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 212 million and 9M 2004: 398 million), and net expenses for premium refunds of 51 million and 259 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 62 million and 9M 2004: 196 million). Net expenses for premium refunds were adjusted for income of 6 million and 24 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: million and 9M 2004: 220 million), related to policyholders participation of net capital gains and impairments on investments, as well as net trading income/(expenses), that were excluded from the determination of operating profit. |
4) | Comprises net acquisition costs of 1,426 million and 4,277 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 1,435 million and 9M 2004: 4,314 million), administrative expenses of 937 million and 2,799 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 977 million and 9M 2004: 2,885 million), and expenses for service agreements of 285 million and 878 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 128 million and 9M 2004: 420 million). Net acquisition costs and administrative expenses do not include expenses for the management of investments and, accordingly, do not reconcile to the acquisition costs and administrative expenses as presented in the consolidated financial statements. |
5) | Comprises net realized gains on investments of 280 million and 1,068 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 88 million and 9M 2004: 1,517 million), and net impairments on investments of 16 million and 28 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 200 million and 9M 2004: 535 million). These amounts are net of policyholders participation. |
6) | Net trading income/(expenses) are net of policyholders participation. |
7) | Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized. |
8) | Represents ratio of net claims incurred to net premiums earned. |
9) | Represents ratio of net acquisition costs and administrative expenses as presented in the consolidated financial statements to net premiums earned. |
F-19
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Life/Health Insurance Segment
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
2005 |
2004 |
2005 |
2004 |
|||||||||
mn | mn | mn | mn | |||||||||
Statutory premiums1) |
11,116 | 10,841 | 34,942 | 31,946 | ||||||||
Gross premiums written |
4,508 | 4,465 | 14,643 | 14,579 | ||||||||
Premiums earned (net)2) |
4,206 | 3,990 | 13,770 | 13,002 | ||||||||
Current income from investments (net)3) |
2,764 | 2,597 | 8,547 | 8,156 | ||||||||
Insurance benefits (net)4) |
(5,697 | ) | (5,254 | ) | (18,005 | ) | (17,136 | ) | ||||
Net acquisition costs and administrative expenses5) |
(955 | ) | (1,083 | ) | (2,705 | ) | (2,989 | ) | ||||
Net trading income/(expenses) |
163 | 69 | (185 | ) | 62 | |||||||
Other operating income/(expenses) (net) |
(3 | ) | 59 | (139 | ) | (47 | ) | |||||
Operating profit |
478 | 378 | 1,283 | 1,048 | ||||||||
Net capital gains and impairments on investments6) |
183 | 42 | 431 | 315 | ||||||||
Intra-group dividends and profit transfer |
20 | 2 | 88 | 67 | ||||||||
Amortization of goodwill7) |
| (40 | ) | | (119 | ) | ||||||
Restructuring charges |
(18 | ) | | (18 | ) | | ||||||
Earnings from ordinary activities before taxes |
663 | 382 | 1,784 | 1,311 | ||||||||
Taxes |
(147 | ) | (186 | ) | (282 | ) | (442 | ) | ||||
Minority interests in earnings |
(140 | ) | (71 | ) | (394 | ) | (283 | ) | ||||
Net income |
376 | 125 | 1,108 | 586 | ||||||||
Statutory expense ratio8) in % |
8.5 | 10.1 | 7.7 | 9.6 | ||||||||
1) | Under the Allianz Groups accounting policies for life insurance contracts, for which we have adopted U.S. GAAP accounting standards, gross written premiums include only the cost- and risk-related components of premiums generated from unit-linked and other investment-oriented products, but do not include the full amount of statutory premiums written on these products. 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 insurers home jurisdiction. |
2) | Net of earned premiums ceded to reinsurers of 259 million and 780 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 463 million and 9M 2004: 1,519 million). |
3) | Net of investment management expenses of 117 million and 332 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 102 million and 9M 2004: 309 million), and interest expenses of 2 million and (-) million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 24 million and 9M 2004: (35) million). |
4) | Net insurance benefits were adjusted for income of 428 million and 2,279 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 212 million and 9M 2004: 1,152 million), related to policyholders participation of net capital gains and impairments on investments that were excluded from the determination of operating profit. |
5) | Comprises net acquisition costs of 598 million and 1,617 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 712 million and 9M 2004: 1,959 million), administrative expenses of 323 million and 993 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 342 million and 9M 2004: 941 million), and expenses for service agreements of 34 million and 95 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 29 million and 9M 2004: 89 million). Net acquisition costs and administrative expenses do not include expenses for the management of investments and, accordingly, do not reconcile to the acquisition costs and administrative expenses as presented in the consolidated financial statements. |
6) | Comprises net realized gains on investments of 191 million and 510 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 139 million and 9M 2004: 423 million), and net impairments on investments of 8 million and 79 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 97 million and 9M 2004: 108 million). These amounts are net of policyholders participation. |
7) | Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized. |
8) | Represents ratio of net acquisition costs and administrative expenses as presented in the consolidated financial statements to net premiums earned (statutory). |
F-20
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Banking Segment
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||||||||||
2005 |
2004 |
2005 |
2004 |
|||||||||||||||||||||
Banking Segment |
Dresdner Bank |
Banking Segment |
Dresdner Bank |
Banking Segment |
Dresdner Bank |
Banking Segment |
Dresdner Bank |
|||||||||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||||||||
Net interest income |
532 | 517 | 685 | 655 | 1,641 | 1,588 | 1,815 | 1,753 | ||||||||||||||||
Net fee and commission income |
635 | 599 | 598 | 569 | 2,017 | 1,909 | 1,974 | 1,858 | ||||||||||||||||
Net trading income |
375 | 358 | 244 | 250 | 953 | 916 | 1,159 | 1,165 | ||||||||||||||||
Operating revenues |
1,542 | 1,474 | 1,527 | 1,474 | 4,611 | 4,413 | 4,948 | 4,776 | ||||||||||||||||
Administrative expenses |
(1,421 | ) | (1,373 | ) | (1,337 | ) | (1,293 | ) | (3,940 | ) | (3,786 | ) | (4,110 | ) | (3,969 | ) | ||||||||
Net loan loss provisions |
129 | 130 | (54 | ) | (54 | ) | 88 | 84 | (271 | ) | (271 | ) | ||||||||||||
Operating profit |
250 | 231 | 136 | 127 | 759 | 711 | 567 | 536 | ||||||||||||||||
Net capital gains and impairments on investments |
(5 | )1) | (4 | ) | 78 | 1) | 77 | 541 | 1) | 542 | 170 | 1) | 161 | |||||||||||
Restructuring charges |
(5 | ) | (5 | ) | (11 | ) | (11 | ) | (10 | ) | (10 | ) | (127 | ) | (127 | ) | ||||||||
Other non-operating income/(expenses)(net) |
(17 | ) | (25 | ) | (125 | ) | (119 | ) | 51 | 43 | (192 | ) | (182 | ) | ||||||||||
Amortization of goodwill2) |
| | (65 | ) | (65 | ) | | | (194 | ) | (194 | ) | ||||||||||||
Earnings from ordinary activities before taxes |
223 | 197 | 13 | 9 | 1,341 | 1,286 | 224 | 194 | ||||||||||||||||
Taxes |
(74 | ) | (65 | ) | 134 | 129 | (308 | ) | (294 | ) | 225 | 235 | ||||||||||||
Minority interests in earnings |
(26 | ) | (19 | ) | (22 | ) | (18 | ) | (77 | ) | (60 | ) | (104 | ) | (56 | ) | ||||||||
Net income |
123 | 113 | 125 | 120 | 956 | 932 | 345 | 373 | ||||||||||||||||
Cost-income ratio3) in % |
92.2 | 93.1 | 87.6 | 87.7 | 85.4 | 85.8 | 83.1 | 83.1 | ||||||||||||||||
1) | Comprises primarily net realized gains on investments of 29 million and 649 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 145 million and 9M 2004: 511 million), and net impairments on investments of 34 million and 112 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: 71 million and 9M 2004: 371 million). For the three and nine months ended September 30, 2005, net impairments on investments includes 9 million and 28 million, respectively, (3Q 2004: 12 million and 9M 2004: 23 million) of scheduled depreciation of real estate used by third parties. |
2) | Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized. |
3) | Represents ratio of administrative expenses to operating revenues. |
F-21
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Asset Management Segment
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||||||||||
2005 |
2004 |
2005 |
2004 |
|||||||||||||||||||||
Asset Management Segment |
Allianz Global Investors |
Asset Management Segment |
Allianz Global Investors |
Asset Management Segment |
Allianz Global Investors |
Asset Management Segment |
Allianz Global Investors |
|||||||||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||||||||
Operating revenues |
708 | 698 | 564 | 558 | 1,933 | 1,906 | 1,664 | 1,658 | ||||||||||||||||
Operating expenses |
(409 | ) | (403 | ) | (347 | ) | (346 | ) | (1,148 | ) | (1,129 | ) | (1,086 | ) | (1,085 | ) | ||||||||
Operating profit |
299 | 295 | 217 | 212 | 785 | 777 | 578 | 573 | ||||||||||||||||
Acquisition-related expenses |
(213 | ) | (213 | ) | (174 | ) | (174 | ) | (556 | ) | (556 | ) | (557 | ) | (557 | ) | ||||||||
thereof: |
||||||||||||||||||||||||
Deferred purchases of interests in PIMCO1) |
(213 | ) | (213 | ) | (111 | ) | (111 | ) | (519 | ) | (519 | ) | (364 | ) | (364 | ) | ||||||||
Retention payments for management and employees of PIMCO and Nicholas Applegate |
| | (31 | ) | (31 | ) | (12 | ) | (12 | ) | (98 | ) | (98 | ) | ||||||||||
Amortization charges relating to capitalized bonuses for PIMCO management |
| | (32 | ) | (32 | ) | (25 | ) | (25 | ) | (95 | ) | (95 | ) | ||||||||||
Amortization of goodwill2) |
| | (96 | ) | (96 | ) | | | (285 | ) | (285 | ) | ||||||||||||
Earnings from ordinary activities before taxes |
86 | 82 | (53 | ) | (58 | ) | 229 | 221 | (264 | ) | (269 | ) | ||||||||||||
Taxes |
(34 | ) | (32 | ) | 9 | 9 | (51 | ) | (49 | ) | 42 | 42 | ||||||||||||
Minority interests in earnings |
(12 | ) | (12 | ) | (13 | ) | (13 | ) | (34 | ) | (32 | ) | (40 | ) | (40 | ) | ||||||||
Net income (loss) |
40 | 38 | (57 | ) | (62 | ) | 144 | 140 | (262 | ) | (267 | ) | ||||||||||||
Cost-income ratio3) in % |
57.8 | 57.7 | 61.5 | 62.0 | 59.4 | 59.2 | 65.3 | 65.4 | ||||||||||||||||
1) | Effective January 1, 2005, and applied retrospectively, under IFRS, the PIMCO LLC Class B Unit Purchase Plan (Class B Plan) is considered a cash settled plan, resulting in changes in the fair value of the shares issued to be recognized as expense. |
2) | Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized. |
3) | Represents ratio of operating expenses to operating revenues. |
F-22
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Supplementary Information to the Consolidated Balance Sheets
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Goodwill |
12,097 | 11,677 | ||
Present value of future profits |
1,398 | 1,522 | ||
Software |
1,030 | 972 | ||
Brand names |
740 | 740 | ||
Loyalty bonuses |
| 33 | ||
Other |
200 | 203 | ||
Total |
15,465 | 15,147 | ||
Changes in goodwill for the nine months ended September 30, 2005, were as follows:
mn |
|||
Cost as of December 31, 2004 |
11,901 | ||
Accumulated impairments as of December 31, 2004 |
(224 | ) | |
Carrying value as of December 31, 2004 |
11,677 | ||
Additions |
57 | ||
Disposals |
(45 | ) | |
Foreign currency translation adjustments |
408 | ||
Carrying value as of September 30, 2005 |
12,097 | ||
Accumulated impairments as of September 30, 2005 |
224 | ||
Cost as of September 30, 2005 |
12,321 |
Additions include goodwill from
| increasing the interest in GamePlan Financial Marketing LLC, Woodstock, by 60.0% to 100.0%, |
| the acquisition of 100.0% interest in Bettercare Group Limited, Kingston upon Thames. |
Disposals include goodwill from
| reducing the interest in Cadence Capital Management Inc., Delaware, by 100.0% to 0.0%. |
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Securities held-to-maturity |
4,986 | 5,179 | ||
Securities available-for-sale |
258,797 | 230,919 | ||
Real estate used by third parties |
10,781 | 10,628 | ||
Funds held by others under reinsurance contracts assumed |
1,613 | 1,601 | ||
Total |
276,177 | 248,327 | ||
Securities available-for-sale
Amortized cost |
Unrealized gains |
Unrealized losses |
Fair values | |||||||||||||||
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 |
September 30, 2005 |
December 31, 2004 | |||||||||||
mn | mn | mn | mn | mn | mn | mn | mn | |||||||||||
Equity securities |
35,671 | 32,106 | 17,293 | 12,488 | (212 | ) | (394 | ) | 52,752 | 44,200 | ||||||||
Government bonds |
115,136 | 106,155 | 7,470 | 5,375 | (346 | ) | (235 | ) | 122,260 | 111,295 | ||||||||
Corporate bonds |
77,986 | 69,083 | 4,344 | 3,629 | (197 | ) | (95 | ) | 82,133 | 72,617 | ||||||||
Other |
1,483 | 2,721 | 170 | 90 | (1 | ) | (4 | ) | 1,652 | 2,807 | ||||||||
Total |
230,276 | 210,065 | 29,277 | 21,582 | (756 | ) | (728 | ) | 258,797 | 230,919 | ||||||||
F-23
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Nine months ended September 30, |
Gross realized gains |
Gross realized losses |
||||||||
2005 |
2004 |
2005 |
2004 |
|||||||
mn | mn | mn | mn | |||||||
Equity securities |
2,383 | 2,997 | (257 | ) | (408 | ) | ||||
Debt securities |
789 | 849 | (226 | ) | (241 | ) | ||||
Other |
24 | 26 | (8 | ) | (43 | ) | ||||
Total |
3,196 | 3,872 | (491 | ) | (692 | ) | ||||
September 30, 2005 |
December 31, 2004 |
|||||
mn | mn | |||||
Loans |
67,429 | 59,543 | ||||
Reverse repurchase agreements and collateral paid for securities borrowing transactions |
66,334 | 103,406 | ||||
Short-term investments and certificates of deposit |
9,248 | 7,729 | ||||
Other |
7,282 | 11,096 | ||||
Loans and advances to banks |
150,293 | 181,774 | ||||
Loan loss allowance |
(245 | ) | (231 | ) | ||
Total |
150,048 | 181,543 | ||||
7 Loans and advances to customers
September 30, 2005 |
December 31, 2004 |
|||||
mn | mn | |||||
Loans |
116,514 | 119,832 | ||||
Reverse repurchase agreements and collateral paid for securities borrowing transactions |
61,425 | 70,459 | ||||
Other |
16,869 | 9,293 | ||||
Loans and advances to customers |
194,808 | 199,584 | ||||
Loan loss allowance |
(1,629 | ) | (3,904 | ) | ||
Total |
193,179 | 195,680 | ||||
8 Financial assets carried at fair value through income
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Financial assets held for trading |
170,569 | 194,439 | ||
Financial assets for unit linked contracts |
51,663 | 41,409 | ||
Financial assets designated at fair value through income |
12,865 | 4,726 | ||
Total |
235,097 | 240,574 | ||
Financial assets held for trading comprised the following:
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Fixed-income securities |
124,382 | 153,858 | ||
Equities |
25,725 | 20,033 | ||
Derivative financial instruments |
20,462 | 20,548 | ||
Total |
170,569 | 194,439 | ||
9 Amounts ceded to reinsurers from reserves for insurance and investment contracts
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Unearned premiums |
1,607 | 1,238 | ||
Aggregate policy reserves |
9,134 | 10,276 | ||
Reserves for loss and loss adjustment expenses |
12,688 | 10,684 | ||
Other insurance reserves |
104 | 112 | ||
Total |
23,533 | 22,310 | ||
F-24
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
September 30, 2005 |
December 31, 2004 |
|||||
mn | mn | |||||
Issued capital |
1,037 | 988 | ||||
Capital reserve |
20,460 | 18,445 | ||||
Revenue reserves |
10,063 | 10,498 | ||||
Treasury shares |
(63 | ) | (4,605 | ) | ||
Foreign currency translation adjustments |
(1,204 | ) | (2,634 | ) | ||
Unrealized gains and losses (net) |
9,525 | 7,303 | ||||
Shareholders equity before minority interests |
39,818 | 29,995 | ||||
Minority interests in shareholders equity |
8,770 | 7,696 | ||||
Total |
48,588 | 37,691 | ||||
On February 18, 2005, the Allianz Group issued a subordinated bond with 11.2 mn detachable warrants, which allow the holder to purchase a share of Allianz AG. The warrants are exercisable at any time during their 3 year term and have an exercise price of 92 per share. The warrants were recorded in capital reserve at the premium received of 174 mn on their issuance date. As a result of the exercise of 9 mn warrants during the third quarter 2005, the consideration received of 828 mn was recorded in issued capital, 23 mn, and capital reserve, 805 mn. During the third quarter 2005, the Allianz Group issued 10,116,850 shares for proceeds of 1,062 mn, which was recorded in issued capital, 26 mn, and capital reserve 1,036 mn.
Minority interests in shareholders equity are comprised of the following:
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Unrealized gains and losses (net) |
1,685 | 1,206 | ||
Share of earnings |
1,020 | 1,168 | ||
Other equity components |
6,065 | 5,322 | ||
Total |
8,770 | 7,696 | ||
The primary subsidiaries of the Allianz Group included in minority interests in shareholders equity are AGF Group, Paris and RAS Group, Milan.
11 Participation certificates and subordinated liabilities
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Allianz AG*) |
||||
Subordinated bonds |
6,188 | 4,775 | ||
Participation certificates |
85 | 85 | ||
Subtotal |
6,273 | 4,860 | ||
Banking subsidiaries |
||||
Subordinated liabilities |
4,179 | 4,779 | ||
Hybrid equity |
1,599 | 1,500 | ||
Participation certificates |
1,520 | 1,526 | ||
Subtotal |
7,298 | 7,805 | ||
All other subsidiaries |
||||
Subordinated liabilities |
931 | 520 | ||
Hybrid equity |
45 | 45 | ||
Subtotal |
976 | 565 | ||
Total |
14,547 | 13,230 | ||
*) | Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz AG. |
On February 18, 2005, the Allianz Group issued a subordinated bond with a principal amount of 1,400 mn. The subordinated bond is perpetual, however, the Allianz Group has the right to call the bond after 12 years. The subordinated bond has a coupon rate of 4.375%.
On January 27, 2005, the AGF Group issued a subordinated bond with a principal amount of 400 mn. The subordinated bond is perpetual and has a coupon rate of 4.625%.
F-25
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
12 Reserves for insurance and investment contracts
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Unearned premiums |
14,478 | 12,050 | ||
Aggregate policy reserves |
244,286 | 229,873 | ||
Reserves for loss and loss adjustment expenses |
68,176 | 62,331 | ||
Reserves for premium refunds |
28,741 | 21,237 | ||
Other insurance reserves |
808 | 889 | ||
Total |
356,489 | 326,380 | ||
Reserves for loss and loss adjustment expenses are comprised of the following:
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Property-Casualty |
61,133 | 55,536 | ||
Life/Health |
7,043 | 6,795 | ||
Total |
68,176 | 62,331 | ||
Changes in the reserves for loss and loss adjustment expenses for the Property-Casualty insurance segment for the nine months ended September 30, 2005, were as follows:
2005 |
|||
mn | |||
Gross reserves for loss and loss adjustment expenses as of January 1, |
55,536 | ||
Amount ceded to reinsurers |
(10,029 | ) | |
Net reserves for loss and loss adjustment expenses as of January 1, |
45,507 | ||
Loss and loss adjustment expenses incurred (net) |
|||
Current year |
19,846 | ||
Prior years |
(593 | ) | |
Subtotal |
19,253 | ||
Loss and loss adjustment expenses paid (net) |
|||
Current year |
(7,599 | ) | |
Prior years |
(9,277 | ) | |
Subtotal |
(16,876 | ) | |
Foreign currency translation adjustments |
1,369 | ||
Net reserves for loss and loss adjustment expenses as of September 30, |
49,253 | ||
Amount ceded to reinsurers |
11,880 | ||
Gross reserves for loss and loss adjustment expenses as of September 30, |
61,133 | ||
F-26
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Asbestos and Environmental (A&E) Reserves
In the United States, the planned external review of the asbestos & environmental (or A&E) liability reserves at Firemans Fund had no net impact at the Allianz Group level as a result of already sufficient reserves, absent a $ 56 mn loss caused by the increase in provisions for uncollectible reinsurance recoverables.
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Payable on demand |
16,775 | 14,003 | ||
Repurchase agreements and collateral received from securities lending transactions |
51,262 | 78,675 | ||
Term deposits and certificates of deposit |
77,339 | 96,736 | ||
Other |
2,622 | 1,933 | ||
Total |
147,998 | 191,347 | ||
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Savings deposits |
2,313 | 2,410 | ||
Home loan savings deposits |
3,292 | 3,214 | ||
Payable on demand |
53,336 | 50,946 | ||
Repurchase agreements and collateral received from securities lending transactions |
43,900 | 49,276 | ||
Term deposits and certificates of deposit |
55,130 | 49,124 | ||
Other |
1,936 | 2,167 | ||
Total |
159,907 | 157,137 | ||
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Allianz AG*) |
||||
Senior bonds |
4,776 | 5,741 | ||
Exchangeable bonds |
2,316 | 2,742 | ||
Money market securities |
1,202 | 1,428 | ||
Subtotal |
8,294 | 9,911 | ||
Banking subsidiaries |
||||
Certificated liabilities |
25,705 | 25,140 | ||
Money market securities |
23,831 | 21,693 | ||
Subtotal |
49,536 | 46,833 | ||
All other subsidiaries |
||||
Certificated liabilities |
415 | 458 | ||
Money market securities |
400 | 550 | ||
Subtotal |
815 | 1,008 | ||
Total |
58,645 | 57,752 | ||
*) | Includes senior bonds, exchangeable bonds and money market securities issued by Allianz Finance B.V., Allianz Finance II B.V. and Allianz Finance Corporation and guaranteed by Allianz AG. |
On February 18, 2005, the Allianz Group issued a senior exchangeable bond, Basket Index Tracking Equity Linked Securities (BITES), with a principal amount of 1,262 mn. The redemption value of the BITES is linked to the performance of the DAX Index. The BITES were issued at a DAX reference level of 4,205.115. The Allianz Group will redeem the BITES with shares of BMW AG, Munich Re and/or Siemens AG. The BITES have a term of 3 years, however, the Allianz Group has the right to redeem the BITES at anytime during their term. The holders of the BITES have the right to exchange the BITES during their term at the redemption value. An outperfomance premium is paid annually equal to 0.75% of the average DAX Index during the reference period prior to the payment date. Upon redemption of the BITES by the Allianz Group or at maturity, the holders of the BITES receive a redemption premium of 1.75% of the redemption
F-27
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
value. The Allianz Group has recorded an embedded derivative related to this transaction in financial liabilities carried at fair value through income of 253 mn as of September 30, 2005.
On March 23, 2005, the Allianz Group repaid in cash a senior exchangeable bond with a face amount of 1,700 mn.
On August 26, 2005, the Allianz Group repaid a senior bond with a face amount of CHF 1,500 mn.
16 Financial liabilities carried at fair value through income
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Financial liabilities held for trading |
87,084 | 102,141 | ||
Financial liabilities for unit linked contracts |
51,663 | 41,409 | ||
Liabilities for puttable equity instruments |
2,112 | 1,386 | ||
Financial liabilities designated at fair value through income |
226 | 201 | ||
Total |
141,085 | 145,137 | ||
Financial liabilities held for trading are comprised of the following:
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Obligations to deliver securities |
55,310 | 72,804 | ||
Derivative financial instruments |
23,357 | 23,018 | ||
Other trading liabilities |
8,417 | 6,319 | ||
Total |
87,084 | 102,141 | ||
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Reserves for pensions and similar obligations |
5,788 | 5,738 | ||
Accrued taxes |
1,440 | 1,408 | ||
Miscellaneous accrued liabilities |
6,569 | 6,838 | ||
Total |
13,797 | 13,984 | ||
Of the accrued taxes, 1,304 mn (2004: 1,278 mn) is attributed to taxes on income.
September 30, 2005 |
December 31, 2004 | |||
mn | mn | |||
Funds held under reinsurance business ceded |
7,541 | 8,706 | ||
Accounts payable on direct insurance business |
7,233 | 8,199 | ||
Accounts payable on reinsurance business |
1,649 | 1,694 | ||
Other liabilities |
12,731 | 12,672 | ||
Total |
29,154 | 31,271 | ||
F-28
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Supplementary Information to the Consolidated Income Statements
Three months ended September 30, |
Property-Casualty |
Life/Health |
Total |
||||||||||||||||||
Segment |
Consolidation adjustments |
Group*) |
Segment |
Consolidation adjustments |
Group*) |
Group*) |
|||||||||||||||
mn | mn | mn | mn | mn | mn | mn | |||||||||||||||
2005 |
|||||||||||||||||||||
Premiums written |
|||||||||||||||||||||
Direct |
9,357 | | 9,357 | 4,447 | | 4,447 | 13,804 | ||||||||||||||
Assumed |
1,115 | (58 | ) | 1,057 | 61 | | 61 | 1,118 | |||||||||||||
Subtotal |
10,472 | (58 | ) | 10,414 | 4,508 | | 4,508 | 14,922 | |||||||||||||
Ceded |
(1,493 | ) | | (1,493 | ) | (258 | ) | 58 | (200 | ) | (1,693 | ) | |||||||||
Net |
8,979 | (58 | ) | 8,921 | 4,250 | 58 | 4,308 | 13,229 | |||||||||||||
Premiums earned |
|||||||||||||||||||||
Direct |
10,285 | | 10,285 | 4,406 | | 4,406 | 14,691 | ||||||||||||||
Assumed |
1,116 | (59 | ) | 1,057 | 59 | | 59 | 1,116 | |||||||||||||
Subtotal |
11,401 | (59 | ) | 11,342 | 4,465 | | 4,465 | 15,807 | |||||||||||||
Ceded |
(1,613 | ) | | (1,613 | ) | (259 | ) | 59 | (200 | ) | (1,813 | ) | |||||||||
Net |
9,788 | (59 | ) | 9,729 | 4,206 | 59 | 4,265 | 13,994 | |||||||||||||
2004 |
|||||||||||||||||||||
Premiums written |
|||||||||||||||||||||
Direct |
9,351 | | 9,351 | 4,391 | | 4,391 | 13,742 | ||||||||||||||
Assumed |
1,081 | (207 | ) | 874 | 74 | (7 | ) | 67 | 941 | ||||||||||||
Subtotal |
10,432 | (207 | ) | 10,225 | 4,465 | (7 | ) | 4,458 | 14,683 | ||||||||||||
Ceded |
(1,323 | ) | 7 | (1,316 | ) | (462 | ) | 207 | (255 | ) | (1,571 | ) | |||||||||
Net |
9,109 | (200 | ) | 8,909 | 4,003 | 200 | 4,203 | 13,112 | |||||||||||||
Premiums earned |
|||||||||||||||||||||
Direct |
10,273 | | 10,273 | 4,380 | | 4,380 | 14,653 | ||||||||||||||
Assumed |
1,084 | (207 | ) | 877 | 74 | (5 | ) | 69 | 946 | ||||||||||||
Subtotal |
11,357 | (207 | ) | 11,150 | 4,454 | (5 | ) | 4,449 | 15,599 | ||||||||||||
Ceded |
(1,517 | ) | 5 | (1,512 | ) | (464 | ) | 207 | (257 | ) | (1,769 | ) | |||||||||
Net |
9,840 | (202 | ) | 9,638 | 3,990 | 202 | 4,192 | 13,830 | |||||||||||||
*) | After elimination of intra-Allianz Group transactions between segments. |
F-29
Allianz Group
Notes to the Consolidated Financial Statements(Continued)
as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004
Nine months ended September 30, |
Property-Casualty |
Life/Health |
Total |
||||||||||||||||||
Segment |
Consolidation adjustments |
Group*) |
Segment |
Consolidation adjustments |
Group*) |
Group*) |
|||||||||||||||
mn | mn | mn | mn | mn | mn | mn | |||||||||||||||
2005 |
|||||||||||||||||||||
Premiums written |
|||||||||||||||||||||
Direct |
31,656 | | 31,656 | 14,467 | | 14,467 | 46,123 | ||||||||||||||
Assumed |
2,783 | (171 | ) | 2,612 | 176 | (1 | ) | 175 | 2,787 | ||||||||||||
Subtotal |