Allianz SE · XETR:ALV

Allianz — Q3 2016 Earnings Presentation

47 slides from Allianz's earnings presentation, Nov 11, 2016

1. Slide 1: 3Q 2016 Analyst conference call

   3Q 2016 Dieter Wemmer Chief Financial Officer Analyst conference call November 11, 2016

2. Slide 2: Highlights / Group financial results 3Q 2016 / Glossary

   1 1 Highlights Group financial results 3Q 2016 2 Glossary © Allianz SE 2016 2

3. Slide 3: Group: positive OP contribution from all segments

   Group financial results 3Q 2016 Group: positive OP contribution from all segments Total revenues Operating profit drivers2 (EUR mn) (EUR bn) +0.5%1 +18.2% +391 +3 +3 2,898 27.5 27.7 -10 2,452 +59 3Q 15 3Q 16 Shareholders’ net income (EUR mn) +36.5% Operating P/C L/H AM CO Conso. Operating profit pro

4. Slide 4: Group: positive OP contribution from all segments - comments

   Group financial results 3Q 2016 Group: positive OP contribution from all segments Comments  Revenues – +1.7% internal growth  Asset Management – on track Internal growth in P/C remains strong at Operating profit stabilizes. Improvement of CIR +3.1%. L/H shows good growth in capital- by 3%-points.

5. Slide 5: Group: book value reached EUR 154 per share

   Group financial results 3Q 2016 Group: book value reached EUR 154 per share Shareholders’ equity Key sensitivities (EUR bn) (EUR bn) +3.4% Equity -30% -2.9 67.7 70.1 markets 63.1 Unrealized 17.9 +50bps -3.7 gains/losses1 10.9 16.6 Interest rate Retained earnings2 23.3 22.2 23.2 -50bps +3.5 on gov. b

6. Slide 6: Group: book value reached EUR 154 per share - comments

   Group financial results 3Q 2016 Group: book value reached EUR 154 per share Comments  Shareholders’ equity – further up  Interest rate sensitivity – slight reduction In 3Q 2016, net income (EUR 1.9bn) and Expected positive impact from sale of our higher net unrealized gains (EUR 1.3bn) Korean life

7. Slide 7: Group: pre-tax operating capital generation as expected

   Group financial results 3Q 2016 Group: pre-tax operating capital generation as expected +2.8 +0.4 72.7 72.5 70.6 -0.6 -0.7 0.0 +1.6 +0.1 +1.1 -0.3 +0.6 0.0 -0.5 -0.4 Own funds P/C AM L/H CO/Conso. (EUR bn) 31.12.15 30.06.16 Regulatory/ Operating SII Market Dividends/ Other 30.09.16 model changes ear

8. Slide 8: Group: pre-tax operating capital generation as expected - comments

   Group financial results 3Q 2016 Group: pre-tax operating capital generation as expected Comments  Sale of Korea not considered  Market impact The expected positive effects of the sale of Further decreasing interest rates with our Korean life entity on our SII ratio and its negative impact on both

9. Slide 9: P/C: strong price- and volume-driven growth

   Group financial results 3Q 2016 P/C: strong price- and volume-driven growth (EUR mn) 3Q 2016 Revenues Total Internal Price Volume growth growth effect effect Δ p.y. Δ p.y. Total P/C segment 11,526 0.0% +3.1% +1.6% +1.5% Large OEs Germany 1,990 +2.0% +2.0% France 1,018 +3.8% +3.8% Italy 961 -4.2% -4.

10. Slide 10: P/C: strong price- and volume-driven growth - comments

    Group financial results 3Q 2016 P/C: strong price- and volume-driven growth Comments  Strong growth continues  AGCS – profitability over volume Internal growth of +3.1% equally driven by Re-underwriting initiatives impact top-line. volume and price. F/X -1.8% (mainly British  AWP – strong rebound

11. Slide 11: P/C: OP up on better underwriting and investment results

    Group financial results 3Q 2016 P/C: OP up on better underwriting and investment results Operating profit drivers (EUR mn) Combined ratio (in %) +4.3% NatCat impact2 (in %-p) +28 1,410 -0.6%-p +44 1,352 -13 94.1 93.5 Loss ratio 65.9 65.5 1.2 0.2 Expense ratio 28.3 28.0 Operating Underwriting Investm

12. Slide 12: P/C: OP up on better underwriting and investment results - comments

    Group financial results 3Q 2016 P/C: OP up on better underwriting and investment results Comments  Operating profit – up on less NatCat and  Run-off – slightly below 10-year average lower large losses At 3.0%, run-off is in line with our expected OP rises driven by lower NatCat (∆ EUR 0.1bn), long

13. Slide 13: P/C: strong combined ratio broadly supported

    Group financial results 3Q 2016 P/C: strong combined ratio broadly supported (EUR mn) 3Q 2016 Operating Δ p.y. Combined Δ p.y. NatCat Δ p.y. profit ratio impact in CR1 Total P/C segment 1,410 +4.3% 93.5% -0.6%-p 0.2%-p -1.0%-p Large OEs Germany 315 +19.0% 91.0% -1.6%-p 0.1%-p -3.4%-p France 145 +42.

14. Slide 14: P/C: strong combined ratio broadly supported - comments

    Group financial results 3Q 2016 P/C: strong combined ratio broadly supported Comments  Almost 2/3 of GPW better than CR target  Australia – remedial action is being taken GPW share of OEs with <94% CR stands at CR impacted by higher claims inflation and 64% in 3Q, up 12%-p vs. last year. frequency

15. Slide 15: P/C: investment result up on net F/X result

    Group financial results 3Q 2016 P/C: investment result up on net F/X result Operating investment result1,2 Current yield (debt securities; in %) (EUR mn) +3.8% 3Q 15 0.73 722 749 3Q 16 0.68 Total average asset base2,3 111.0 111.5 Reinvestment yield6 (debt securities; in %) (EUR bn) Economic 3Q 15 2.

16. Slide 16: P/C: investment result up on net F/X result - comments

    Group financial results 3Q 2016 P/C: investment result up on net F/X result Comments  Interest and similar income  Economic reinvestment yield Current income down driven by lower yields – Alternative calculation methodology in line with the interest rate development – as incorporates long-term F/X

17. Slide 17: L/H: successful execution of new business strategy

    Group financial results 3Q 2016 L/H: successful execution of new business strategy PVNBP share by line1 PVNBP by OE1 Operating entity PVNBP in EUR mn (Δ p.y.) NBM (in %) Other OEs Germany Life 926 (-12.2%) 3,298 (+27.0%) Total L/H segment 3.0 2.8 Spain 268 (+13.0%) 6.6 6.2 Protection & health 12% Ge

18. Slide 18: L/H: successful execution of new business strategy - comments

    Group financial results 3Q 2016 L/H: successful execution of new business strategy Comments PVNBP by line PVNBP by OE  New business – growth and better mix  GER Life – protection & health up 33% For the first time since 1Q 2015 new business Capital-efficient products enhance 35% with starts growin

19. Slide 19: L/H: operating profit excellent at EUR 1.1 billion

    Group financial results 3Q 2016 L/H: operating profit excellent at EUR 1.1 billion (EUR mn) Operating profit by source1 Operating profit by line1 +53.0% +53.0% +143 1,129 1,129 +109 +79 +16 196 +148 738 -104 92 738 175 225 73 219 616 419 Operating Operating Loadings Investment Expenses Technical Imp

20. Slide 20: L/H: operating profit excellent at EUR 1.1 billion - comments

    Group financial results 3Q 2016 L/H: operating profit excellent at EUR 1.1 billion Comments  9M OP at 85% of FY target range mid-point  Expenses – new business and one-offs 9M 2016 operating profit of EUR 3.1bn at EUR 52mn higher acquisition expenses as outstanding level. result of increased sales

21. Slide 21: L/H: healthy profitability continued

    Group financial results 3Q 2016 L/H: healthy profitability continued (EUR mn) 3Q 2016 VNB1 Δ p.y. NBM1 Δ p.y. Operating Δ p.y. profit Total L/H segment 318 -1.0% 2.8% -0.3%-p 1,129 +53.0% Large OEs Germany Life 140 +86.5% 4.2% +1.4%-p 323 -1.6% USA 30 -66.6% 1.1% -2.7%-p 273 +91.0% Italy 23 -27.6% 1

22. Slide 22: L/H: healthy profitability continued - comments

    Group financial results 3Q 2016 L/H: healthy profitability continued Comments New business Operating profit  5th consecutive quarter with NBM ≥2.5%  USA – better investment margin NBM remains solid despite lower rates Investment margin (∆ EUR +119mn) benefits (10-year swaps EUR -80bps, US -93bps)

23. Slide 23: L/H: investment margin strong at 25bps

    Group financial results 3Q 2016 L/H: investment margin strong at 25bps (yields are pro-rata) Reinvestment yield1,6 Based on Ø book value of assets2 3Q 151 3Q 161 (debt securities; in %) Current yield3 0.9% 0.8% Economic reinvestment yield Based on Ø aggregate policy reserves 2.3 2.1 Current yield3 1

24. Slide 24: L/H: investment margin strong at 25bps - comments

    Group financial results 3Q 2016 L/H: investment margin strong at 25bps Comments  Yield decline within expected range  PHP ratio up Current yield based on aggregate policy PHP (+7%-p) normalizes from exceptionally reserves down 6bps. low level in 3Q 2015.  Net harvesting and other – high level  E

25. Slide 25: AM: positive net flows at PIMCO and AllianzGI

    Group financial results 3Q 2016 AM: positive net flows at PIMCO and AllianzGI (EUR bn) ∆ total AuM +5.4% +1.5% 1,830 1,859 1,763 +1.5% Allianz Group 524 532 +1.9% 1,327 487 1,307 +0.1% +0.4% assets +0.0% -0.8% 3rd party AuM 1,276 1,307 1,327 31.12.15 30.06.16 30.09.16 30.06.16 Net flows Market & F/X

26. Slide 26: AM: positive net flows at PIMCO and AllianzGI - comments

    Group financial results 3Q 2016 AM: positive net flows at PIMCO and AllianzGI Comments  Segment – 3rd party AuM up 1.5%  PIMCO – net inflows Increase in 3Q 2016 driven by favorable First quarter with 3rd party net inflows market returns and 3rd party net inflows at (EUR 4.7bn) since 2Q 2013, stemm

27. Slide 27: AM: AllianzGI revenues up 8 percent

    Group financial results 3Q 2016 AM: AllianzGI revenues up 8 percent (EUR mn) Revenues development1 Internal growth PIMCO3 Internal growth -6.0% -6.2% -11.2% -10.9% 1,636 1,539 1,207 Performance fees 192 1,071 120 165 Other net fee and 65 commission income (AuM driven fees) 39.7 38.7 1,042 1,005 3rd

28. Slide 28: AM: AllianzGI revenues up 8 percent - comments

    Group financial results 3Q 2016 AM: AllianzGI revenues up 8 percent Comments  Segment – revenues down 6%  PIMCO – 3rd party AuM margin stable Revenues decrease primarily due to lower versus 2Q 2016 performance fees (∆ EUR -73mn). AuM driven Current margin (38.7bps) stable versus fees slightly redu

29. Slide 29: AM: operating profit stable

    Group financial results 3Q 2016 AM: operating profit stable Internal growth Operating profit drivers (EUR mn) +0.6% CIR +0.5% +42 6001 +34 6041 +59 +4 AllianzGI AllianzGI 111 +11 -2 74.5% -73 154 67.3% -72 PIMCO PIMCO 500 58.6% 455 57.5% Operating Revenues Expenses F/X Operating profit Performance N

30. Slide 30: AM: operating profit stable - comments

    Group financial results 3Q 2016 AM: operating profit stable Comments  Segment – OP stable  AllianzGI – OP up 38% versus 3Q 2015 Lower expenses offset impact from lower OP increases considerably versus 3Q 2015, performance fees and lower margins. driven by absence of restructuring expenses and high

31. Slide 31: CO: operating result in line with outlook

    Group financial results 3Q 2016 CO: operating result in line with outlook (EUR mn) Operating loss development and components +22 0 -246 -13 -6 -242 -1.3% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 3Q 15 3Q 16 Δ 3Q 16/15 © Allianz SE 2016 3Q 1

32. Slide 32: CO: operating result in line with outlook - comments

    Group financial results 3Q 2016 CO: operating result in line with outlook Comments  Operating profit 9M result for Corporate and Consolidation of EUR -573m slightly better (72%) than full-year outlook mid-point run-rate.  Holding &Treasury – slightly up Improvement driven by income from assets car

33. Slide 33: Group: shareholders' net income up 36.5 percent

    Group financial results 3Q 2016 Group: shareholders’ net income up 36.5 percent (EUR mn) 3Q 15 3Q 16 Change Operating profit 2,452 2,898 +446 Non-operating items -293 -105 +188 Realized gains/losses (net) 150 226 +76 Impairments (net) -155 -48 +108 Income from fin. assets and liabilities carried at

34. Slide 34: Group: shareholders' net income up 36.5 percent - comments

    Group financial results 3Q 2016 Group: shareholders’ net income up 36.5 percent Comments  Non-operating result – better Predominantly driven by higher realized gains and lower impairments.  Shareholders’ net income – up Shareholders’ net income reflects higher operating profit, a better non-operat

35. Slide 35: Group: outlook 2016 unchanged

    Group financial results 3Q 2016 Group: outlook 2016 unchanged Group Property-Casualty Life/Health Asset Management Total revenues 9M 16 (EUR bn) vs. prior year 92.4 (-3.2%) 40.4 (-0.8%) 47.5 (-4.7%) 4.4 (-8.2%) Operating profit 9M 16 (EUR mn) vs. prior year 8,007 (-1.7%) 3,949 (-9.9%) 3,065 (+13.8%)

36. Slide 36: Group: outlook 2016 unchanged - comments

    Group financial results 3Q 2016 Group: outlook 2016 unchanged Comments  Revenues – positive trend  Asset Management – improving Total internal growth of -1.3% (after -2.5% Operating profit below previous year, but up in 1H 2016) impacted by strategic product quarter on quarter in 2016 and in-line

37. Slide 37: Status quo and ambitions for 2018

    Group financial results 3Q 2016 Status quo and ambitions for 2018 9M 16 2018 9M 16 2018 Businesses with 3.5%1 5%1 EPS Growth 50%4 75% NPS above market SII interest rate 12.4%2 13% RoE Allianz Group 11%-p <11%-p sensitivity 94.4% 94% P/C CR PIMCO CIR 61.1% 60% L/H OEs with 75%2 100% IMIX 68%4 72% RoE

38. Slide 38: Highlights / Glossary

    2 1 Highlights Group financial results 3Q 2016 2 Glossary © Allianz SE 2016 38

39. Slide 39: Glossary (1)

    Glossary (1) AFS Available-for-sale: Securities which have been acquired neither for sale in the near term nor to be held to maturity. Available-for-sale investments are shown at fair value on the balance sheet. AGCS Allianz Global Corporate & Specialty AllianzGI Allianz Global Investors AM Asset Ma

40. Slide 40: Glossary (2)

    Glossary (2) CIR Cost-income ratio: Operating expenses divided by operating revenues CO Corporate and Other – CO segment CR Combined ratio: Represents the total of acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, and claims and insurance benefits inc

41. Slide 41: Glossary (3)

    Glossary (3) FV Fair value: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FVO Fair value option: Financial assets and liabilities designated at fair value through income are measured at

42. Slide 42: Glossary (4)

    Glossary (4) L/H Life and health insurance – L/H segment L/H lines of business Guaranteed savings & annuities: Guaranteed savings and annuities are life insurance obligations that always relate to the length of human life. Life obligations may be related to guarantees offering life and / or death co

43. Slide 43: Glossary (5)

    Glossary (5) LatAm Latin America: South America and Mexico LoB Line of business LR Loss ratio: Claims and insurance benefits incurred (net) divided by premiums earned (net). Loss ratio calendar year (c.y.) includes the results of the prior year reserve development in contrast to the loss ratio accid

44. Slide 44: Glossary (6)

    Glossary (6) OP Operating profit: Earnings from ordinary activities before income taxes and non-controlling interests in earnings, excluding, as applicable for each respective segment, all or some of the following items: Income from financial assets and liabilities carried at fair value (net), reali

45. Slide 45: Glossary (7)

    Glossary (7) RfB Reserves for premium refunds (“Rückstellung für Beitragsrückerstattung”): That part of the surplus to be distributed to policyholders in the future. This refund of premiums is made on the basis of statutory, contractual, or company by-law obligations, or voluntary undertaking. RoE R

46. Slide 46: Glossary (8)

    Glossary (8) Total revenues Represent the sum of P/C gross premiums written, L/H statutory premiums, operating revenues in AM and total revenues in CO (Banking). UFR Ultimate forward rate: The estimate of the ultimate forward rate is defined in line with the EIOPA methodology and guidelines. An extr

47. Slide 47: Disclaimer

    Disclaimer These assessments are, as always, subject to the disclaimer provided below. Forward-looking statements The statements contained herein may include prospects, statements of extent of credit defaults, (vii) interest rate levels, (viii) currency exchange future expectations and other forward

Allianz — Q3 2016 Earnings Presentation on 6ix