Allianz Germany


AllianzGermanyBurkhard Keese, CFOAllianz Deutschland AGMunich, June 30, 2016

Allianz GermanyGermany at a glance Population:81.5mnGDP (EUR):3,026bnGDP/capita (EUR):37,129Inflation:0.5%2Insurance penetration : P/C 3.4% Life 3.1%Country rating (S&P):AAAMarket specificsP/C: Mature market, strong competitionLife: Challenging business environment due tovolatile financial markets and low interest rates Market trend towards new productsHealth: 2-pillar system with compulsory statutoryhealth insurance, supplementary private healthinsurance and comprehensive private healthinsurance1) Destatis2) GPW in % of GDP (2014); Sigma 04/2015Market size and growth (GPW, EUR bn)3CAGR 152016eP/CLifeHealthMarket shares 2014 (GPW, %)316. ERGOR VAXA Debeka TalanxVK(Bayern)3) GDV 08/20152 Allianz SE 2016Key data 20151

Allianz GermanyAllianz Germany (1)Revenues1 (EUR bn)Operating profit1 (EUR mn)29.99.332. 0.33.2 0.33.3 0.320132014 Leading market position 20mn retail customers Leading P/C insurer in Germany withnearly 2x market share of number 2 Market leader in Life with respect to AuM,GPW, new business and corporate pensions Strong player in health insurancewith a 8.9% market share in 2014CAGR 30.7%CAGR thBank20156568622012013-123209 31214 4020142015HighlightsCombined ratio1 (%)New business margin (%)-7.6%-p99.591.5-0.7%-p91.92.81Q 163.1% ratio26.125.8Expense25.1 ratio2013201420151) ion of Allianz as an accidentand transport insurance companyEntry into the motor insurance businessFormation of AllianzLebensversicherungs-AGTakeover of the East Germanstate insurance authorityMinority buy-outsFoundation of a direct business entity,initially named Allianz 24, renamed intoAllSecur in 2009Foundation of Allianz Deutschland AG3 Allianz SE 2016Legal setup

Allianz GermanyAllianz Germany (2)Product mix (GPW)Other 13%P/C2015Distribution mix (GPW)Motor 37%Liability 12%Other 3%Direct 2%Banks 4%Automotive 8%Agents 68%Market shares 2014 (GPW, %)1P/C combined ratio (%) VHUKTalanxAXA6.45.85.1R VTalanxERGO7.57.5SignalAXABrokers 15%91.2Accident 14%Property 25%Retail 59%Agents 43%Other 11%20.412.0Banks 18%L2015Brokers 28%Supplementary21%Comprehensive79%Banks 1%Other 2%GeneraliAgents 77%14.614.4Brokers 20%8.9H2015Debeka1) GDV 08/2015; local GAAP; Life incl. internal pension fundsERGO Allianz SE 2016Corporate 41%4

Allianz HealthGermanyBirgit König, CEOAllianz PrivateKrankenversicherungs-AGMunich, June 30, 2016

Allianz Health GermanyGerman health insurance market at a glanceMarket size and growth (GPW, EUR bn)Product mix 2015 (GPW)CAGR 76%ComprehensiveMarket shares 2014 (GPW, %)14.6Banks5%14.48.9DebekaChannel mix 2014 (New business total)ERGO7.5Signal7.5Brokers34%Other 28%Tied agents53% Allianz SE 201620132016e1AXA1) GDV as of April 6th, 20162) Other includes direct business and co-operations (e.g. with public health insurers)Sources: PKV data as of May 23rd, 2016 (preliminary), Towers Watson Survey 20156

Allianz Health GermanyAllianz Health Germany at a glanceGPW (EUR mn)Operating profit (EUR mn)CAGR -0.1%CAGR 3.0%3,2643,2453,2576576586842,6072,587Compre2,573 015Highlights Two-pillar German health systemunique in the world No long-term guarantees plus ability toadjust premiums reduces interest ratesensitivity substantially Demographic trends negative for industry stable premium income strong achievement Allianz Health offers strong coverage andsuperior financial strength On top, Allianz Health is working on simplifyingits product design, streamlining its cost baseand offering delightful customer journeysCombined ratio (%) 8.8Claims82.8 eOther (1%)1SupplementaryBanks (3%)Brokers2013189020151) Other includes direct business and co-operations2) Original name “Kosmos” Kranken- und Sterbegeldversichungsbank AGTied Agents3) GPW, 20154) New business, 20152006Formation of Allianz as an accidentand transport insurance companyFormation of Vereinigte Krankenversicherungs-AG2, later renamed inVereinte Krankenversicherung AGTakeover of Vereinte Group by Allianz(incl. Vereinte Krankenversicherung AG)Renaming in Allianz PrivateKrankenversicherungs-AGFoundation of Allianz Deutschland AG,since then sole shareholder of AllianzPrivate Krankenversicherungs-AG7 Allianz SE 2016Legal setupProductmix3

Allianz Health GermanySimplified product designExample dental productsEasy to understand designEncouraging sales uptake (sales / week)# All-in-one coverage for dental treatments,dental prostheses and orthodontictreatments160 Easy to understand terms and conditions,e.g. coverage of 90% of total costs120 Two product variants with differentcoverage levels Very competitive prices14.7114214010010080686040Price in EUR at age 30114.681522418.702014.90280Peer 11)Peer 2Peer 3Allianz tariff Dental Plus and comparable competitor tariffs18192021Calendar week2223 Allianz SE 201617Top position on Check 24:Dental Plus #1 in relevantage group8

Allianz Health GermanyDelightful customer journeysDigitized claims processDigitized claims processUser uptakeSubmit a claimNumber of registered app users (05/2016)70,00060,00050,000Go-livephoto app40,00030,000 67,000registered users20,00010,000Mar 16Dec 15Sep 15Jun 15Mar 15Dec 14Sep 14Jun 14Mar 14Dec 13Sep 13Jun 130Mar 13User statistics online tracking tool (05/2016) 25,000 sent messages per month(SMS, email) Allianz SE 2016Track statusDez 12Check bonus Up to 850 visits per day9

Allianz Health GermanyStreamlined cost baseArtificial intelligence in operationsArtificial intelligence in operationsHistoricclaims dataSpline-based regression model with over 370 individual input variablesIn case of potential, routing to theappropriate claims specialist Allianz SE 2016Predictionof correction potentialInstant feedback of recent claims settlement decisions into prediction model for self-learning10

Allianz Health GermanyMarket recognizes our strategyCompany ratings Allianz SE 2016Product ratings11

Allianz LifeBill GaumondCFO Allianz LifeMunich, June 30, 2016

Allianz LifeUSA at a glanceKey data 2015 Population:GDP (USD):GDP/capita (USD):Inflation:Life insurance penetration1:Country rating (S&P):Annuity market size and growth (CAGR)319mn17,400bn54,6000.8%3.0%AA (Statutory premiums, USD bn) 1.5%Market 013201420152017eFA/SPIA2/DIA3VAFIAFixed indexed annuity (FIA)1) Source: Sigma 04/20152) Single premium income annuity3) Deferred income annuity4) Independent marketing organizations6.8% 6.0%8.7% 8.6%4.6%7.4% 6.6% Allianz SE 2016Allianz Life of NAAllianz Life of NAPruAXAAIGLincolnJackson1.5%1.5%Nationwide Mainly distributed via banks and captives Single-digit RoE, not MCEV friendly17.4%16.0%12.5%AIGFixed annuity (FA)VAGreat American Main distribution channels are B/D and captivesfollowed by wirehouses and banks Significant de-risking post-crisis. Potentially higherRoE, but volatile earnings and capital patternFIAAmerican EquityVariable annuity (VA)Market shares (2015, statutory premiums)Allianz Life of NA Traditionally distributed by IMOs4, however,increasing sales from B/D and wirehouses Typically double-digit RoE,stable earnings and capital pattern13

Allianz LifeAllianz Life (1)CAGR 9.3%CAGR 20.1%15.78762. profit (USD mn) Outstanding financial strength with AA S&Prating201320142015RoE1 (%)Allianz Life history1896 North American Casualty was founded10.4%8.5%1Q 163.5%20132014 1.9%-p3.1%2015 Product levers allow for active profitabilitymanagement on both new and inforce business Overall profitability remains hindered by legacyVA businessOtherVAFIA 0.1%-p3.4%9320.8New business margin (%)3.0% Market leader in fixed index annuities for 27consecutive quarters264611.6Highlights1979 NALAC acquired by Allianz AG7.5%329%349%RBC369% (CAL)ratio2013201420151) Excl. unrealized gains/losses on debt securities (net of shadow DAC) and goodwill2) Based on statutory GPW1912 North American Casualty merged withNorth America Life Association to formNorth American Life and Casualty (NALAC)1993 Company renamed Allianz Life InsuranceCompany of North America (Allianz Life) Allianz SE 2016Revenues (USD bn)1999 Allianz Life merged with Life USA to formtoday’s company14

Allianz LifeAllianz Life (2)Regional/Wires 5%Independentagents 60%Reserves (USD bn)69.580.284.63%3%97%97%Life 6%Banks 6%2%IndependentB/D 29%FIA 94%98%LifeFIAUSD 9.3bnHybrid VA(“Index Advantage”)Separate accountproductsDistribution mix (GPW)USD %Regional/Wires 14%67%Banks 19%53%VA newIndependent B/D67%USD 2.0bnUSD 2.0bn56%50%47%201320142015VA legacy15 Allianz SE 2016General account products2015 Product mix (GPW)

Risk managementThomas Wilson, CROAllianz SEMunich, June 30, 2016

Risk managementAllianz Solvency II model at a glanceKey elementsSolvency II ratio5 (in %) Partial internal model1-11%-p Use of TCE2 and dynamic Volatility Adjustmentbut NO application of Matching Adjustment orTransitional Measures3 for our liabilities20019618631.12.1501.01.1631.03.16 “Sovereign light” approach for sovereign debt Solvency II ratio target range 180 – 220% Target interest rate sensitivity of -11%-pby 2018 (1Q 2016: -12%-p)4 Dividend accrued on a pro-rata basisKey sensitivities6 Solvency II capitalization 186% As per EIOPA rules, EUR valuation rate of2.88% in year 60EquitymarketsInterest rateSII non-parallel Sensitivity to UFR -50bps -5%-p SII operating capital generation pre-tax of 9%-p1) All major insurance operations are covered by our internal model. However,some smaller operations are under Standard Model and others, like AZ Life,included with TCE under the deduction and aggregation approach2) Third Country Equivalence3) Except grandfathering of certain hybridsCredit spread 100bps 5%-p 30%-30%-7%-p 7%-p 50bps-50bps-12%-pon gov. bonds -13%-pon other bonds Allianz SE 20161Q 2016-10%-p4) -50bps non-parallel interest rate shift5) Changed regulatory tax treatment of German life sectorreduces year-end SII ratio from 200% to 196% on January 1, 20166) Second order effects to other risk types and to own funds transferabilityrestrictions are not considered17

Risk managementConservative capital structure with 158% Tier 1 coverageMain standard model entitiesTier 3Tier 1 unrestrictede.g. net DTA, T3 equivalentown fundse.g. paid-in capital,available surplus funds,T1 equivalent andsectoral own fundsTier 2e.g. subordinatedliabilities, T2 sectoral /equivalent own hRepublicThird %Netherlands7%Greece12%Tier 1 restrictedPoland 7%EUR69.3bnTier 1 158% of SCR79%14%SMUKUSA (P/C)6%EUR37.3bnKorea73%IMItalyFranceGermany Own funds in %1,2,3Main internal model entities1) Requirements: Tier 2 3 50%, Tier 3 15% of consolidated insurance group SCR2) Immaterial non-EEA (re)insurance entities included via book value deduction (Art. 229 SII directive)3) 1Q 2016 Allianz SE 2016AGCSSolvency capitalrequirement in %2,318

Risk managementStrong pre-tax operating capital generation72.7-1.7 0.4 1.4 2.0-0.3-5.8 1.769.3-1.2Own funds(EUR bn)P/CL/H31.12.15SII capitalization200%Regulatory / Operating SIImodel changes earnings196%MarketimpactAMCO/Conso.Dividends /capital mgmt.Other186% 9%-pPre-tax operatingcapital generation31.03.16 2.136.4 0.2 0.237.3Other231.03.16-1.3 Allianz SE 2016-0.3SCR(EUR bn)31.12.15Regulatory /model changesBusinessevolution1) Including cross effects and policyholder participation2) Other effects on SCR include diversification effects and Third Country EquivalenceMarketimpact1Managementactions19

DisclaimerThese assessments are, as always, subject to the disclaimer provided below.Forward-looking statementsThe statements contained herein may include prospects, statements ofextent of credit defaults, (vii) interest rate levels, (viii) currency exchangefuture expectations and other forward-looking statements that are basedrates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws andon management's current views and assumptions and involve known andregulations, including tax regulations, (x) the impact of acquisitions, includingunknown risks and uncertainties. Actual results, performance or eventsrelated integration issues, and reorganization measures, and (xi) generalmay differ materially from those expressed or implied in such forward-competitive factors, in each case on a local, regional, national and/or globallooking statements.basis. Many of these factors may be more likely to occur, or moreSuch deviations may arise due to, without limitation, (i) changes of thepronounced, as a result of terrorist activities and their consequences.general economic conditions and competitive situation, particularly in theAllianz Group's core business and core markets, (ii) performance of financialNo duty to updatecy and severity of insured loss events, including from natural catastrophes,The company assumes no obligation to update any information or forward-and the development of loss expenses, (iv) mortality and morbidity levels andlooking statement contained herein, save for any information requiredtrends, (v) persistency levels, (vi) particularly in the banking business, theto be disclosed by law. Allianz SE 2016markets (particularly market volatility, liquidity and credit events) (iii) frequen-20

Health: 2-pillar system with compulsory statutory health insurance, supplementary private health insurance and comprehensive private health insurance Allianz Germany CAGR 1.9% 2016e 194 66 91 2015 194 64 93 2014 193 63 94 2013 187 61 91 VK (Bayern) 3.7 Talanx 5.0 Debeka 5.1 AXA 5.4 R V 5.8 ERGO 6.8 Generali 8.8 16.5 Life Health P/C 3636 37 37 1) Destatis 2) GPW in % of GDP (2014);