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Allianz Annual Report 2013

Changes in the treasury shares were: changes in treasury shares Acquisition costs Number of shares Issued capital as of 31 December € mn  % 2013 ­Allianz SE 220 2,761,795 0.61 Other – 1,586 – Total 220 2,763,381 0.61 2012 ­Allianz SE 218 2,777,438 0.61 Other – 586 – Total 218 2,778,024 0.61 Non-controlling interests non-controlling interests € mn as of 31 December 2013 2012 Unrealized gains and losses (net) 93 135 Share of earnings 348 327 Other equity components 2,324 2,113 Total 2,765 2,575 Capital requirements The ­AllianzGroup’scapitalrequirementsareprimarilydependent on the type of business that it underwrites, the industry and geographic locations in which it operates and the allocation of the ­Allianz Group’s investments. During the ­Allianz Group’s annual planning dialogues with its operating entities, capital requirements are deter- mined through business plans regarding the levels and timing of capital expenditures and investments. Regulators impose minimum capital requirements at the level of the ­Allianz Group’s operating entities and the ­Allianz Group as a whole. On 1 January 2005, the Financial Conglomerates Directive (FCD), a supplementary European Union (E.U.) directive, became effective in Germany. Under this directive, a financial conglomerate is defined as any financial parent holding company that, together with its sub- sidiaries, has significant cross-border and cross-sector activities. The ­Allianz Group is a financial conglomerate within the scope of the directive and the related German laws. The directive requires that the financial conglomerate calculates the capital needed to meet the respective solvency requirement on a consolidated basis. As of 31 December 2013, the ­Allianz Group’s eligible capital for the solvency margin, required for the insurance segments and the Asset Management and Banking business, was € 46.5 bn (2012 as pub- lished: € 48.4 bn) including off-balance sheet reserves 1 of € 2.3 bn (2012: € 2.2 bn), surpassing the minimum legally stipulated level by € 20.9 bn (2012: € 23.8 bn). This margin resulted in a preliminary cover ratio of 182 % (2012 as published: 197 %) as of 31 December 2013. The decrease in the cover ratio was mainly driven by an approximately 16 %-points decrease due to amendments to IAS 19. In addition to regulatory capital requirements, ­Allianz SE also uses an internal risk capital model to determine how much capital is required to absorb any unexpected volatility in results of operations and to steer its operations. Going forward, with the planned introduction of Solvency II in January 2016, the ­Allianz Group expects the Solvency II rules to become the binding regulatory constraint for the Group. Insurance subsidiaries of the ­Allianz Group including ­Allianz SE prepare individual financial statements based on local laws and regulations. These laws establish to some extent additional restric- tions on the minimum level of capital and the amount of dividends that may be paid to shareholders. The respective local minimum capital requirements are based on various criteria including, but not limited to, volume of premiums written or claims paid, amount of insurance reserves, investment risks, mortality risks, credit risks, underwriting risks and off-balance sheet risks. As of 31 December 2013, the ­Allianz Group’s insurance subsid- iaries were in compliance with all applicable regulatory solvency and capital adequacy requirements. Some insurance subsidiaries are subject to regulatory restric- tions on the amount of dividends which can be remitted to ­Allianz SE without prior approval by the appropriate regulatory body. Such restrictions provide that a company may only pay dividends up to an amount in excess of certain regulatory capital levels or based on the levels of undistributed earned surplus or current year income or a percentage thereof. By way of example only, the operations of the ­Allianz Group’s insurance subsidiaries located in the United States are subject to limitations on the payment of dividends to their parent company under applicable state insurance laws. Dividends paid in excess of these limitations generally require prior approval of the insurance commissioner of the state of domicile. The ­Allianz Group believes that these restrictions will not affect the ability of ­Allianz SE to pay dividends to its shareholders in the future. 1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; ­Allianz SE has not submitted an application so far. The solvency ratio excluding off-balance sheet reserves would be 173 % (2012: 188 %). D Consolidated Financial Statements 127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements Annual Report 2013    Allianz Group 195

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