Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Allianz Annual Report 2013

C Group Management Report Management Discussion and Analysis 64 Business Environment 66 Executive Summary of 2013 Results 71 Property-Casualty Insurance Operations 78 Life/Health Insurance Operations 82 Asset Management 85 Corporate and Other 87 Outlook 2014 92 Balance Sheet Review 99 Liquidity and Funding Resources 104 Reconciliations Annual Report 2013    Allianz Group 95 fixed income portfolio Total fixed income portfolio as of 31 December 2013: € 480.6 bn [as of 31 December 2012: € 480.4 bn] in % Banks 7 [8] Government bonds 37 [37] Covered bonds 21 [22] Other corporate bonds 24 [22] Other 11 [11] The allocation of our fixed income portfolio remained stable, with a slightincreaseincorporatebondsandaminorreductioninbankand covered bonds. About 95 % of this portfolio of debt instruments was invested in investment-grade bonds and loans. 1 Ourgovernmentbondexposureremainedalmostflatat€ 179.6  bn (31 December 2012: € 177.4  bn), representing 37 % of our fixed income portfolio. During 2013 we increased our exposure to supranational bonds and decreased our exposure to Italy. Our sovereign exposure in Italy and Spain equaled 6.0 % and 0.6 % of our fixed income portfolio, respectively. The corresponding unrealized gains (gross) amounted to € 1,922  mn in Italy and € 144  mn in Spain. Our government bond exposure in Portugal remained limited and we reduced substantially all our remaining exposure in Greece and Ireland at the beginning of the year. Our covered bonds portfolio decreased from € 107.1  bn to € 102.5  bn as the proceeds from matured covered bonds – mainly in Germany – were only partially reinvested in this fixed income class. 47 % of this portfolio was German Pfandbriefe, backed by either public sector loans or mortgage loans. Another 16 % and 9 % of the covered bonds were allocated to France and Spain, respectively. Covered bonds provide a cushion against real estate price deterioration and payment defaults through minimum required security buffers and over-collateralization. Our corporate bond portfolio increased from € 107.1  bn to € 116.3  bn as new investments exceeded fair value declines. We reduced our exposure to subordinated securities in banks by € 1.9  bn to € 4.8 bn in both Tier 1 and Tier 2 shares. 1 Excluding self-originated German private retail mortgage loans. For 2 %, no ratings were available. Our fixed income portfolio also includes 4 % of asset-backed securities (ABS), which amounted to € 18.4  bn, down € 1.1  bn. This decrease was driven by a reduction of mortgage-backed securities (MBS) issued by U.S. agencies, which are backed by the U.S. govern- ment. Their share declined from 21 % to 13 % of our ABS securities. Overall, 73 % of our ABS were related to MBS and 97 %of the ABS portfolio received an investment grade rating, with 87 % rated “AA” or better (31 December 2012: 88 %). Investment result investment income (Net) € mn Group as of 31 December 2013 2012 Delta Interest and similar income (net) 1 20,497 20,598 (101) Income from financial assets and liabilities carried at fair value through income (net) (1,842) (511) (1,331) Realized gains/losses (net) 4,285 4,327 (42) Impairments of investments (net) (611) (934) 323 Investment expenses (905) (876) (29) Investment income (net) 21,424 22,604 (1,180) 1 Net of interest expenses (excluding interest expenses from external debt). Our investment income (net) decreased by € 1,180  mn to € 21,424  mn. This was mainly due to the decline in our net income from financial assets and liabilities carried at fair value through income. Income from financial assets and liabilities carried at fair value through income (net) worsened from a loss of € 511  mn to a loss of € 1,842  mn. This was primarily driven by the net of negative foreign currency effects and financial derivatives that are used to protect againstequityandforeigncurrencyfluctuationsaswellastomanage duration and other interest rate-related exposures, in particular in our German Life/Health business. The appreciation of the Euro against selected emerging markets currencies and the rise in interest rates were the main drivers. In addition, the drop also includes the absence of income from The Hartford warrants, which were sold in April 2012. Our interest and similar income (net)2 decreased only 0.5 % to € 20,497  mn.Lowerincomefromdebtinvestments,whichwasimpacted by the low interest rate environment, was partly offset by higher income from equity-related investments and real estate. Overall, our interest and similar income (net) held up very well in this low-yield environment. The net interest result also benefited from reduced interest expenses. 2 Net of interest expenses (excluding interest expenses from external debt).

Pages Overview