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Allianz Annual Report 2013

Annual Report 2013    Allianz Group60 Customer focus The loyalty of our customers is a key factor for sustainable growth. As part of our customer-focused activities, we use key feedback tools, such as the Net Promoter Score (NPS). NPS is a measurement of cus- tomers’ willingness to recommend ­Allianz and has been established as our key global metric for customer loyalty in about 40 ­Allianz com- paniesworldwiderepresentingaround90 %ofgrosspremiumswritten. Top-down NPS is measured annually according to global cross- industry standards and allows benchmarking against competitors in the respective markets. Despite shortfalls in some markets versus local peers, we increased our global NPS performance by two percent- age points overall in 2013. Compared to our competitors, 50 % of ­Allianz businesses significantly outperformed their local peer aver- age and 27 % have achieved loyalty leadership in their market. In 2014, we expect the positive global trend to continue and more markets to outperform their local peers. To steadily improve our customer service, we apply bottom-up NPS: asking our customers for direct feedback after key interactions with ­Allianz – such as claims handling or sales – helps us to identify areas for improvement and continuously monitor the impact of our measures taken. Sustainability In Core Business and Products And Services Established in 2012, the Group ESG Board, a committee with Board Member leadership, is responsible for further promoting environ- mental, social and governance (ESG) aspects in our insurance and investing activities. Strengthening the governance and integration of ESG aspects in our core business processes was a priority in 2013. We identified sensitive business areas for both underwriting and invest- ments, developed a global ESG business screening process and also established an ESG dialogue format which continually engages a group of NGOs. The dialogues allow NGOs to directly address ­Allianz with their concerns and give us the opportunity to listen, understand and respond to their different perspectives. We can also tap into the expertise of NGOs when formulating ESG positions and guidelines, incorporatingtheirdirect,on-the-groundexperienceonvarioustopics. Sustainability in proprietary investments We strive to invest sustainably across all asset classes over time. The practical implementation of sustainability in proprietary asset man- agementinvolvesintegratingESGfactorsintoourinvestmentprocess through research, corporate and country analysis, asset manager selection, monitoring and risk management. Moreover, concerns about climate change are changing the way assets are managed and are giving rise to new and alternative asset classes: −− As large institutional investors, insurance companies are impor- tant players in the financing of a low-carbon economy. We are oneoftheleadinginvestorsinrenewableswithastrongportfolio in wind energy and solar power amounting to € 1.7 bn in 2013 (2012: € 1.3 bn). Renewables have an attractive risk-return profile that fits well with our long-term investment strategy. We are gradually expanding our investments in this sector with a planned investment volume of around € 400 mn per year. −− Allianz Real Estate (ARE) has a comprehensive sustainability pro- gram, with a focus on environmental factors. We apply specific sustainability metrics in investment and property management processes and actively engage with tenants. −− As part of ­Allianz’s Climate Change Strategy, we are an early investor in the carbon market. The Rimba Raya project in Borneo (Indonesia), which will prevent the emission of 90 million tons of CO2 over a 30-year period, is ­Allianz’s third carbon investment in emerging markets. We are also using the credits from these direct investments to offset our own carbon footprint. Sustainability in third-party asset management Allianz manages a growing portfolio of Sustainable and Responsible Investments (SRI). At the end of 2013, assets under management in our SRI funds for PIMCO totaled € 78.2 BN (2012: € 49.1 BN) and ­AllianzGI € 17.5 BN (2012: € 15.3 BN), bringing the total to € 95.7 BN, which is 6 % of our total third-party assets under management. At the heart of our ESG strategies lay strong ESG research capabilities, engagement with the companies we invest in and pursuit of active share ownership through proxy voting. Sustainability in underwriting As a leading industrial insurer globally and one of the world’s top life insurers, it is important that we demonstrate leadership to our cus- tomers, the industry as a whole and wider society in embedding ESG issues into our insurance business. Effective research and risk man- agement are crucial to mitigating ESG risks. To support our local insurance entities in assessing ESG risks, we have agreed to establish an ESG Impact Desk. Entities will be required to consult this Desk in the event that their transactions trigger key ESG issues within our sensitive business areas. We will continue to work on integrating ESG issues into our insurance business in 2014. Green solutions We offer our private and commercial customers over 150 green prod- ucts and services that mitigate the negative effects of climate change or take its environmental impact into account. We are able to report on their contribution to our overall financial performance for the first time and in 2013 revenues totaled more than € 1.1 BN.

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