V E R S L A G V A N D E G R O E P S D I R E C T I E. Allianz Nederland Groep. Annual Report 2007

Transcription

1 a l l i a n z n e d e r l a n d g r o e p V E R S L A G V A N D E G R O E P S D I R E C T I E Allianz Nederland Groep Annual Report

2 Contents 1 Key Figures 3 Allianz Nederland 5 Foreword Report of the group management 6 Allianz Nederland in 10 Property-Casualty insurance 11 Life insurance 12 Banking products and asset management Financial Statements Allianz Nederland Groep 14 Consolidated Financial Statements 18 Notes to the Consolidated Financial Statements 25 Notes to the Consolidated Balance Sheet Assets 31 Notes to the Consolidated Balance Sheet Equity and Liabilities 37 Notes to the Group s Consolidated Income Statement 55 Corporate Financial Statements 59 Other information 61 Addresses

3 a l l i a n z n e d e r l a n d g r o e p Key Figures ( mln) a Income Gross premiums written - Property-Casualty Life Total gross premiums written 1,326 1,351 1,311 1,481 1,603 Investment income Other income K E Y F I G U R E S Income 1,599 1,553 1,507 1,670 1,843 Net premiums written 1,199 1,221 1,186 1,320 1,431 Profit before taxes Property-Casualty Life Asset Management Other profit/loss (including cost of financing) (5) 2 (3) (4) (17) Total result before taxes Total result after taxes Investments At the risk of the company 2,951 3,109 3,031 2,847 2,789 At the risk of the policyholders 3,356 3,172 2,916 2,484 2,185 Total investments 6,307 6,281 5,947 5,331 4,974 Capital insured Life insurance 25,011 24,332 24,310 23,819 25,076 Insurance provisions Gross 5,551 5,329 5,082 4,655 4,588 Net 5,374 5,191 4,947 4,499 4,313 Shareholders equity Paid-up capital Reserves Average number of staff (converted to full-time equivalent) 1,295 1,331 1,389 1,498 1,560 a Key Figures based on Dutch GAAP.

4 2 a l l i a n z n e d e r l a n d g r o e p Organogram Allianz Nederland Groep N.V. Allianz Group AGF Allianz Nederland Groep N.V. Property-Casualty Life Asset Management Other activities Allianz Nederland Schadeverzekering N.V. Allianz Nederland Levensverzekering N.V. Allianz Nederland Asset Management B.V. ITEB Schadeservices B.V. Allianz Nederland Schadeverzekering Universal Leven N.V. Havelaar & van Stolk B.V. Allianz Global Risks Nederland Nemian Life & Pensions S.A. (Luxembourg) Allsecur BV Allianz Nederland Verkeeren Privéverzekeringen Allianz Nederland Allianz Verkeer- Inkomensverzekeringen Privéverze- London Verzekeringen N.V. Management board Allianz Nederland R. van het Hof (chairman) H.J.E.J. van Lent (chairman till October 1, ) A.C. de Grunt C.C. Krijgsman H.J.J. Schoon P.H.M. Versteeg Supervisory board Allianz Nederland R.J.W. Walvis (chairman) G.J. de Boer-Kruyt F.W. Fröhlich K.-H. Jung F.M.A.H. Thomazeau

5 a l l i a n z n e d e r l a n d g r o e p 3 Allianz Nederland Profile Allianz Nederland is part of Allianz Group, one of the largest financial institutions in the world. In Europe Allianz is market leader when it comes to risk taking and developing and offering financial solutions. In The Netherlands Allianz works as an integrated financial service provider with an outstanding range of risk and asset management products. Our worldwide knowledge of risk management and financial planning means that we can continually stay ahead in expert advice and product development. With approximately 1,450 employees Allianz Nederland is a medium-sized service provider which due to its size can adapt flexibly and successfully to changes in the market. Our employees have the room to develop themselves and to play a meaningful role in achieving our strategy. Profitable growth lies at the heart of this. By operating extremely efficiently we offer customers the best quality and service for the best price. This forces us to innovate continually in the interest of the customer. Positioning Allianz performs above average when compared with the Dutch financial services market and we want to maintain this advantage. Profitable growth is our target. We want to achieve this by positioning ourselves as the most efficient provider that delivers top quality and through which customers are automatically loyal. We differentiate ourselves with innovative products and services and we make sure that the customer always has access to these by being creative with distribution. Professional, driven employees are a prerequisite for Allianz Nederland in order to be able to implement the strategy. Employees are given a lot of responsibility and they are challenged to grab hold of this with both hands and to continue to develop themselves. A L L I A N Z N E D E R L A N D Allianz Nederland offers its services and products within the disciplines of property-casualty, life, asset management and income protection and has its head office in Rotterdam. Our regional presence makes us an accessible company with short lines of communication which is situated close to the private customer and the commercial market. We serve our customers in the most appropriate way for them. Ambition Allianz is the financial services provider which stands beside the customer. We listen to and learn from our customers and according to what we hear, we make choices regarding the composition of our range and the way in which we approach the market. Our people, together with our knowledge, products and services make up our strength. We want to be the insurer with the most loyal customers.

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7 a l l i a n z n e d e r l a n d g r o e p 5 Foreword The Dutch financial services and risk management market is changing. The competitive dynamics are affected by various factors. Our market is a market where we want to expand our position with innovative concepts. We see the current market relationships as an enormous opportunity for Allianz to position itself as an integrated service provider with international capability. The European playing field is getting ever closer and our customers are increasingly more oriented towards Europe. Internet makes national boundaries submit to the choices which customers and we must make. For a company like Allianz with a strong European network behind it, this creates wonderful opportunities. F O R E W O R D The changing legal and regulatory situation in The Netherlands is an impediment to free market enterprise for some providers. However, the departure of several leading players does not allow us to continue to benefit from the extra market room to manoeuvre. As soon as the European regulations dictate how to play the game in The Netherlands, foreign players are standing ready to enter the Dutch market again. Allianz is preparing to continue to offer solutions in changed market situations. Another trend which we are experiencing is that the self-assured customer wants to arrange his affairs himself. Internet affords a great deal of transparency and freedom of choice and that has consequences for the way in which we approach our customers. The risk profile and financial planning must be the starting point. Therefore at every moment of every phase we must offer our services in the form which best meets the demand and situation of the customer. This forces us to adopt a new way of thinking about market approach. In line with this we announced the launch of our direct writer Allsecur in. It remains the case that we are sure about advising the customer in a professional way together with the intermediary. Research shows that almost 50% of the population needs this advice and consciously seeks it. The intermediary is a wellqualified, experienced professional group which is positioned well, close to the customer. In addition, they know the market in which they operate the best. Allianz also wants to be close to the customer and shows this through its regional presence. We bring worldwide knowledge and experience within hand s reach of the intermediary and are at their side at all times with our teams of account managers and specialists. In addition we have been thinking actively with the intermediary for some time about their changing role in the market which is calling for more transparency. With our Pure Life programme we are working with the intermediary on a new advisory model and accompanying business model. Even the Financial Services Authority (AFM) called this initiative best practice for the industry. A sign that we, a medium-sized player, are recognised as an innovative market player which is capable of reacting to change. In The Netherlands Allianz still has a world to win. Our performance in shows improvement once again in market position. Across the board the profit development was positive. However, our income is also under pressure because of the heavy competition and increasing pressure on prices. Still we can speak of a solid financial result which lays a strong basis for our future plans. Sustainable profitable growth remains our ambition. Particularly in the current market circumstances, we see good opportunities to expand our strengths. To do this we must also set a clear course and we shall do this with conviction in a good and profitable way. On behalf of the management board Ron van het Hof

8 6 a l l i a n z n e d e r l a n d g r o e p Report of the management board Allianz Nederland in Allianz Nederland has achieved a healthy result in a very competitive market. Although premium income fell in parts of the portfolio, net profit rose by 28% to million (: million). The operating result, however, decreased to 172 million (: 208 million). Each division contributed to this result. Strong market pressure on risk products and a negative mood in the market for investment insurance are the most important reasons for the reduced premium income in the market, also for Allianz Nederland. The total premium income in Property- Casualty and Life insurance fell by 2% to 1,326 million. (: 1,351 million). In Property-Casualty we were confronted with higher claims incurred because of which the combined ratio rose from 89% in to 93% in. Our Life company achieved good technical results. Allianz Nederland Asset Management improved the result of by 6%. With these results Allianz Nederland further strengthened its financial position. Shareholders equity grew from million in to million in. The Standard + Poor s rating was raised in mid to AA- with a stable outlook. Allianz Nederland satisfies the demands of the Sarbanes Oxley Act with its processes and systems. Property-Casualty ( mln) % Premium income Operating result (25.4) Profit before tax Claims incurred Due to increasing pressure on premiums and higher claims frequency, particularly in property and motor insurance, the profit margin of these product groups has become smaller. The storm in January contributed to more claims incurred, albeit that we were able to limit these risks with reinsurance. The higher claims frequency in fire can be explained by the reduced attention to prevention which is required less forcible by the market. We continue to find this a worrying development. In motor business we see claims frequency influenced by insureds making use of their bonus protection: more relatively small claims are reported than in previous years. In other classes, claims remain stable. By continuing focus on efficient claims handling we do not let expenses get out of hand. Market Despite fierce competition we have been able to maintain our market share in our most important markets: motor insurance and commercial risks. Our subsidiary London Verzekeringen plays an important role in the motor market because of its ever stronger position as an intermediary internet insurer. The intermediary arranges insurance increasingly via LondonNet, which has simplified the whole process considerably. In the SME-segment we position ourselves successfully as the insurer for the commercial intermediary. This has led to growth in our commercial risks portfolio. In the large corporate market where we are mainly active in coinsurance, we have encountered strong competition due the entrance of several new players. Our distinctive value proposition in this market is our worldwide knowledge of highly specialist fields, which enables us to act as leading insurer on large complex risks. In group schemes offered in the form of employee benefits, we continue to achieve good results. This is also the case with motor fleets which have been developed for the commercial segment. Our new Allianz Inkomensverzekeringen business unit has made a successful start. Allianz has established itself as a specialist in this field by raising our profile in the income market with business acumen and innovative products. At the end of we announced the establishment of a direct property-casualty insurer. This company will work under the name Allsecur and compete in the direct market, in particular via the internet.

9 a l l i a n z n e d e r l a n d g r o e p 7 Life insurance ( mln) % Premium income (6.1) Operating result Profit before tax Market was a challenging year for Allianz Nederland Levensverzekering. The unit-linked insurance market to which we direct ourselves primarily with our life policies, was under heavy pressure in. As expected the negative sentiment after the announcements about investment insurances had a clear downwards effect on premium income in the whole market. The new annuity market fell by almost 35% and premium paying policies by 30%. We were not left untouched by this development, but despite these difficult market circumstances we were still able to expand our market share significantly again. Our approach aimed at maintaining short and personal lines of communication with the intermediary works excellently. The account managers in each team can call on specialists who can bring professional knowledge to the intermediary on the spot. In particular our position on the pensions market gets stronger through this so that Allianz is now one of the larger players on the market for available premium arrangements. A range of excellent investment funds, fast administrative processing and specialist sales support is the basis for this. Competition grew even harder in the term assurance and mortgage product groups. Allianz continues to aim for profitable growth, so that a slight decrease in market share had to be accepted in these areas. The strong growth in Universal Leven definitely contributed to our good commercial performance. Our strategy to let Universal Life only direct itself towards the large distribution players and asset managers bears visible fruit. Through all these factors our premium income fell modestly when compared with the market by about 6% over. The operating result showed healthy growth of about 13% again, partly influenced by the good technical results. Efficiency The financial performance of Allianz Nederland Levensverzekering is influenced positively by an improvement in the operational flow. This fits with our aim to work more cost efficiently. The merger of our ICT systems is now almost in order, so that our back office can work even more quickly and effectively. In mid our digital environment with regard to the intermediary was extended with online quotation software and the possibility of communicating pension changes online. Several hundred intermediaries are now connected and the volume of proposals that was received digitally was already 40% after six months and is growing steadily. Also in Universal Leven a lot has been invested in modernization of the technical infrastructure in recent years so that it will soon be one of the most modern in the industry. We have started to digitalise all our files which, as well as the planned benefits in efficiency, also delivers clear improvements in the service to the intermediary. Our account management that is organised regionally, has gained access to a customer relationship management system with which it can be supported better in its regular contact with the intermediary. As is usual for Allianz, considerable attention was paid again in to further support of the intermediary via workshops and courses. The most eyecatching initiatives are the Summer Courses and the Pure Life approach in which more than eighty firms will participate in With Pure Life Allianz develops a new advice model together with advisory firms which uses Financial Life Planning as well as the corresponding business model. In one of its reports the AFM called this training method best practice for the intermediary to create added value. With regard to providing the desired transparency to the market we have paid considerable attention to the implementation of the De Ruiter models. Our investment insurances are some of the most transparent in the insurance sector. In addition we have prepared ourselves to be able to issue uniform pension statements which must be implemented with effect from January 1, 2008 according to the new pension legislation. R E P O R T O F T H E G R O E P M A N A G E M E N T

10 8 a l l i a n z n e d e r l a n d g r o e p Banking products and asset management ( mln) % Operating result Profit before tax The operating result of Allianz Nederland Asset Management (ANAM) was mainly influenced by the higher management fees and high profits from our savings company. The new money in our investment funds, however, remained less than expected. Customer confidence was not helped by the situation on the financial markets. These were restless particularly in the second half of the year as a consequence of the mortgage crisis in the United States. Efficiency The implementation of the new banking giro system was completed last year. Furthermore the legal merger of several investments funds was realized with which we streamlined the funds on offer. In a combined tax, legal and compliance department was also created by integrating these disciplines of ANAM and Life. Despite this unrest the performance of our investment funds was exceptionally good this year again. With an average of four Morningstar stars, ANAM ranks as a top performer in investment funds. Market In ANAM invested a large amount of time and resources in the development of the Plus concept, a new range of products aimed specifically at bank saving. These additions to the portfolio are possible now that banks are legally allowed with effect from 2008 to also offer savings products with fiscal benefits. ANAM has a banking licence and in June was the first to provide the Allianz Plus account to the market. This is an investment account linked to a whole of life policy which follows the Universal Life principle. At the beginning of 2008 the range has been expanded further with annuity savings and tax deductible saving for home purchase. In order to use these new possibilities to the commercial optimum, we have strengthened ANAM s power by integrating the marketing departments of ANAM and Life. Our team of specialists was expanded with knowledge about asset management in order to support account management in selling these new products. This knowledge is naturally implemented for the benefit of the intermediary.

11 a l l i a n z n e d e r l a n d g r o e p 9 New company Allsecur is Allianz s direct writer which is bringing propertycasualty products to the market under its own label. The company was established in and has started its activities in Solvency As an internal solvency target the Group uses a Capital Adequacy Ratio (CAR) of 150%, calculated with the Standard & Poor s model. At the end of the year this ratio was 173% and herewith comfortably exceeding the target (: 158%). Outlook The fierce competition is expected to continue in the propertycasualty market. We expect that the effect of this premium erosion will in particular put the results of the fire and motor insurance under pressure. However, our efforts remain aimed at profitable growth. We foresee good opportunities for this in the commercial market and in direct distribution in which our new company has a good starting position to gain market share. In the co-insurance market which is important to us, we await the outcome of the discussion with the European Commission about possible changes in the regulations. For the life insurance activities of Allianz, 2008 promises to be another challenging year. Bank saving is entering the market. While the success of this must still be awaited, this implies in any case additional competition. As front runner in this new market, Allianz expects good opportunities for growth of its market share with its Plus concept with its innovative and flexible savings concept. Sizeable investments are being made in completely new, state of the art mortgage software, which will significantly increase both the effectiveness and efficiency of the distribution channel. We want to complete the implementation in We expect far-reaching growth in our pension activity, where there is still enough room in the market for Allianz. All in all further expansion in market share is expected. Supervisory board In the composition of the supervisory board changed twice. In accordance with the requirements of applicable statutes and the profile regarding size and composition of the supervisory board, the following changes took place: May 22, apple reappointment of Mr R.J.W. Walvis as chairman of the supervisory board; apple reappointment of Mr F.W. Fröhlich as member of the supervisory board and chairman of the audit committee of the board; apple retirement of Mr J.-P. Thierry as member of the supervisory board; apple appointment of Mr J. Gerke as member of the supervisory board. November 13, apple reappointment of Mrs G.J. de Boer-Kruyt as member of the supervisory board; apple retirement of Mr J. Gerke as member of the supervisory board; apple appointment of Mr K.-H. Jung as member of the supervisory board. Mr Jung also became a member of the audit committee of the board. Meetings The supervisory board met four times again in, in the presence of the management board of Allianz Nederland Groep N.V. In addition to the regular subjects, the board discussed amongst other things: apple the market developments regarding investment insurances, including the question of transparency; apple the trends in the life insurance market in general; apple the planning and establishment of AllSecur B.V., the direct writer of Allianz Nederland Groep N.V.; apple the status of the Allianz Group sustainability programme and the sales-strenghtening initiatives locally. The audit committee decided to amend its audit charter following developments in the field: legal and regulatory authorities and increasing insight into the adequacy of such commissions. We thank the supervisory board and the members of the audit committee for the constructive execution of their statutory tasks and duties and trust that this positive co-operation will continue in the same way in Changes relating to AGF/ Allianz At the level of ultimate ownership of Allianz Nederland Groep N.V. a number of changes took place in. The relationships between Allianz SE and AGF International SA were simplified as a result. The withdrawal of the financial instruments traded publicly in AGF played an important role in this. The direct shareholding of AGF in Allianz Nederland Groep N.V., however, remained unchanged. R E P O R T O F T H E G R O E P M A N A G E M E N T

12 1 0 a l l i a n z n e d e r l a n d g r o e p Key activities Property-Casualty insurance Allianz Nederland is an important player on the Dutch propertycasualty market. The Property-Casualty division occupies a leading position in a number of markets, particularly in motor insurance and commercial risks. It is characteristic of our approach that we are good at combining professional knowledge in the field of risk underwriting with commercial sense. The account management has a high degree of freedom in meeting our aim to cooperate with the intermediary to the optimum. The Property-Casualty division operates five business units which serve their own markets under own labels: apple Allianz Nederland Schadeverzekering concentrates on the commercial SME and private lines market. An increasing number of fleets is insured annually via the independent intermediary. apple Allianz Nederland Verkeer- en Privé-verzekeringen insures large motor fleets and works with local and international brokers. apple Allianz Global Risks Nederland insures large, complex commercial risks for national and international companies in the co-insurance market. It works together with national and international brokers. apple London Verzekeringen aims itself mainly at standard insurance products for the private lines market as an internet insurer, the distribution works via intermediaries and is completely electronic. apple Allianz Inkomensverzekeringen was started in and is a specialised company aimed exclusively at service in the area of income protection. It works with the specialist intermediary. Solvency All insurance companies established in one of the European Union member states have to comply with minimum requirements regarding the solvency margin. At the end of the year of account the available and required solvency was as follows: ( mln) Required solvency Available solvency Solvency ratio Property-Casualty insurance 390% 449% Results by class of business ( mln) Total Fire Motor Marine Other Accident Gross premiums written Net premiums earned Insurance benefits (net) Company expenses Underwriting results (0.7) Allocated investment Income Property-Casualty insurance results Key ratio (net) Loss ratio 62.0% 57.1% 62.4% 50.9% 63.4% 58.7% 75.1% 55.1% 48.1% 56.5% Expense ratio 31.4% 31.9% 34.7% 35.0% 29.5% 30.1% 29.0% 30.3% 39.7% 40.2% Combined ratio 93.4% 89.0% 97.1% 85.9% 92.9% 88.8% 104.1% 85.4% 87.8% 96.7%

13 a l l i a n z n e d e r l a n d g r o e p 1 1 Life insurance Allianz Nederland Levensverzekering differentiates itself in the life market with modern, flexible products with a relatively competitive price. We attach great value to the advice which a high quality intermediary gives on our products. Through this channel we offer mortgages, whole of life, group and individual pensions, using the available premium approach and individual life. The insureds can select the investment mix which suits their profile best, themselves using unit-linked products. The Life division comprises two parts: apple Allianz Nederland Levensverzekering transacts a wide product range. It contains both classic savings and risk products and modern universal life/unit-linked products. Sales take place exclusively via the intermediary network with partners who are able to advise the customers professionally. apple Universal Leven is aimed at a limited number of large intermediaries who bring to the market products like mortgage, pension and annuity insurance exclusively under private labels. Embedded Value The Embedded Value provides an insight into the value of the insurance portfolio and value of new business of a life insurer. The calculations are based on prudential assumptions in accordance with the Market Consistent embbeded value (MCEV) principles. As of December 31, the MCEV was million after dividend payments. The corresponding figure as of December 31, was million. The Value Added of New Business (VANB) was 4.3 million (: 15.4 million). At the end of the year the breakdown of the embedded value of account was as follows: ( mln) Net asset value Present value future profit Total cost required capital (23.6) (17.9) Costs of non-financial risk (32.7) (25.6) Value of options and guarantees (2.5) (9.7) Embedded Value Solvency All insurance companies established in one of the European Union member states have to comply with minimum requirements regarding the solvency margin. At the end of the year of account the available and required solvency was as follows: ( mln) Required solvency Available solvency Solvency ratio Life insurance 244% 258% K E Y A C T I V I T I E S Life premiums ( mln) Insurance contracts where the company bears the investment risk Single Regular Total Single Regular Total Endowment policies Annuities Mortgages Term assurances Other Insurance contracts where the policyholders bear the investment risk Unit-linked policies Gross premiums written Reinsurance ceded Net premiums earned

14 1 2 a l l i a n z n e d e r l a n d g r o e p Banking products and asset management Allianz Nederland Asset Management is a banking institution which has kept itself busy with group asset management since Our activities are aimed at: apple Offering a complete range of investment funds amongst others via investment accounts. We manage the wealth of 50,000 account holders in this way. apple Managing the unit-linked funds offered to policyholders by Allianz Nederland Levensverzekering. apple Offering banking savings products linked to whole of life insurance. apple Asset management for the companies belonging to Allianz Nederland Groep. Total assets under the management of Allianz Nederland Asset Management amounted to 6.3 billion at the end of. Solvency Based on the guidelines of De Nederlandsche Bank, requirements are made about the amount of capital, the BIS requirements. The minimum level for the capital assessment amounts to 8% of the assets as graded according to risk. Allianz Nederland satisfies these standards comfortably. ( mln) Available capital Risk weighted assets Solvency ratio (BIS ratio) 120% 118%

15 Financial Statements Allianz Nederland Groep a l l i a n z n e d e r l a n d g r o e p 1 3 Consolidated Financial Statements Notes to the Group s Consolidated Income Statement A Consolidated balance sheet 18 Premiums earned (net) B Consolidated income statement 19 Interest, dividend and similar income C Consolidated statement of changes in shareholders equity 20 Other income from investments D Consolidated cash flow statement 21 Fee and commission income (net) 22 Other income Notes to the Consolidated Financial Statements 23 Insurance benefits (net) 1 Consolidation principles 24 Interest and similar expenses 2 Summary of significant accounting and valuation policies 25 Impairments of investments 26 Movement in financial assets and liabilities carried at fair Notes to the Consolidated Balance Sheet - Assets value through income (net) 3 Cash and cash equivalents 27 Acquisition costs and administrative expenses 4 Financial assets carried at fair value through income 28 Other expenses 5 Investments 29 Taxes 6 Investments in associated enterprises 30 Risk management 7 Amounts ceded to reinsurers from insurance provisions 31 Derivative financial instruments 8 Deferred acquisition costs 32 Fair value 9 Other assets 33 Contingent liabilities, commitments and guarantees 10 Intangible assets 34 Employee information 35 Share based compensation plans and management Notes to the Consolidated Balance Sheet - Equity and Liabilities compensation 11 Shareholders equity 36 Related parties transactions 12 Financial liabilities carried at fair value through income 13 Liabilities to financial institutions Corporate Financial Statements 14 Liabilities to customers 37 Notes to the corporate financial statements 15 Insurance provisions 38 Statutory balance sheet 16 Other accrued liabilities 39 Statutory income statement 17 Other liabilities 40 Notes to the statutory balance sheet FINANCIAL STATEMENTS allianz nederland groep Other information 41 Subsequent events 42 Auditors Report 43 Consolidated subsidiaries 44 Appropriation of result

16 1 4 a l l i a n z n e d e r l a n d g r o e p Consolidated balance sheet as of December 31 assets Note Cash and cash equivalents 3 100, ,823 Financial assets carried at fair value through income 4 3,992,514 3,860,582 Investments 5 2,951,158 2,955,634 Investments in associated enterprises ,879 Loans and advances to banks , ,700 Amounts ceded to reinsurers from insurance provisions 7 177, ,560 Deferred acquisition costs 8 116, ,715 Deferred tax assets 29 44,858 48,885 Other assets 9 253, ,038 Intangible assets 10 6,937 3,978 Total assets 8,552,407 8,230,794 Liabilities and shareholders equity Note Financial liabilities carried at fair value through income 12 3,991,645 3,850,990 Liabilities to financial institutions , ,901 Liabilities to customers , ,570 Insurance provisions 15 2,195,525 2,157,679 Deferred tax liabilities 29 92, ,664 Other accrued liabilities 16 77,492 86,995 Other liabilities , ,154 Total liabilities 7,764,090 7,464,953 Shareholders equity , ,841 Total equity and liabilities 8,552,407 8,230,794

17 a l l i a n z n e d e r l a n d g r o e p 1 5 Consolidated income statement January 1 to December 31 Note Premiums earned (net) 18 1,195,887 1,226,402 Interest, dividend and similar income , ,050 Income from investments in associated enterprises 19 2,180 3,950 Other income from investments ,575 45,026 Fee and commission income (net) 21 37,294 34,728 Other income 22 16,351 19,516 Total income 1,505,874 1,457,672 Insurance benefits (net) 23 (846,413) (829,322) Interest and similar expenses 24 (5,605) (8,779) Impairments of investments 25 (1,795) (3,026) Movement in financial assets and liabilities carried at fair value through income (net) Acquisition costs and administrative expenses 27 (333,709) (339,608) Other expenses 28 (22,931) (27,339) Total expenses (1,209,471) (1,207,110) Income before taxes 296, ,562 Taxes 29 (70,778) (74,798) C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Net income 1 225, ,764 1 There is no minority interest to which the result of period under review can be ascribed.

18 1 6 a l l i a n z n e d e r l a n d g r o e p Consolidated statement of changes in shareholders equity Paid-in capital Share premium Revenue reserves Unrealized gains and losses Shareholders equity Balance as of 12/31/ ,813 76, , , ,559 Unrealized investment gains and losses (16,555) (16,555) Net income 175, ,764 Shareholders dividend (45,000) (45,000) Miscellaneous Balance as of 12/31/ 59,813 76, , , ,841 Unrealized investment gains and losses (103,549) (103,549) Net income 225, ,625 Shareholders dividend (100,000) (100,000) Miscellaneous Balance as of 12/31/ 59,813 76, , , ,317 There is no minority interest to which shareholders equity of period under review can be ascribed.

19 a l l i a n z n e d e r l a n d g r o e p 1 7 Consolidated cash flow statement Operating activities Net income 225, ,764 Change in provision for unearned premiums 2,994 (5,411) Change in aggregate policy provision 12,671 9,867 Change in provision for loss and loss adjustment expenses (16,610) (16,208) Change in deferred acquisition costs (4,707) 5,441 Change in accounts receivable/payable on reinsurance business 9,892 (1,842) Change in trading securities 1 8,723 (2,805) Change in liabilities to banks and customers (34,532) (5,393) Change in other receivables and liabilities (145,077) 68,205 Change in deferred tax assets/liabilities 2 5,951 12,369 Non-cash investment income/expenses (5,290) (3,042) Other non-cash income/expenses (912) (6,573) Other (5,036) (4,357) C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Net cash flow provided by operating activities 53, ,015 Investing activities Change in securities available-for-sale (103,549) 29,611 Change in securities held-to-maturity (20,654) (4,317) Change investments in associated enterprises 153,582 (150,000) Net cash flow provided by investing activities 29,379 (124,706) Financing activities Change in investments held on account and at risk of life insurance policyholders (184,084) (255,451) Change in Insurance provision for life insurance where investment risk is carried by policyholders 184, ,451 Dividend payouts (100,000) (45,000) Net cash flow provided by financing activities (100,000) (45,000) Change in cash and cash equivalents (16,929) 56,309 Cash and cash equivalents at beginning of period 117,823 61,514 Cash and cash equivalents at end of period 100, ,823 1 Including trading liabilities. 2 Without change in deferred tax assets/liabilities from unrealized investment gains and losses.

20 1 8 a l l i a n z n e d e r l a n d g r o e p Notes to the Consolidated Financial Statements 1 Consolidation principles The consolidated financial statements have been prepared by management in conformity with International Financial Reporting Standards as adopted by the European Union (IFRS-EU). Since the company did not apply the IAS 39 carve-out clauses, these financial statements are also in conformity with International Financial Reporting Standards as issued by the IASB (IFRS). All standards currently in force for the years under review have been adopted in the consolidated financial statements, except for IFRS 8 which standard is only obligatory to companies quoted on the stock exchange. The consolidated financial statements of Allianz Nederland have been prepared in thousands of euros ( ), unless stated otherwise. Group relationships Allianz Nederland Groep N.V. is legally registered at Rotterdam, Coolsingel 139. The issued shares in Allianz Nederland Groep N.V. are all held by AGF International SA, a subsidiary of Assurances Générales de France SA (AGF) in France. Allianz SE in Germany is the 100% shareholder in AGF. The financial data of Allianz Nederland Groep N.V. have been included in the consolidated annual report and accounts of AGF SA in Paris and Allianz SE in Munich. The consolidated financial statements include the annual financial statements of Allianz Nederland Groep N.V., domiciled in The Netherlands and all subsidiaries and investment funds. The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements. Subsidiaries Subsidiaries are those entities controlled by Allianz Nederland. Control exists when Allianz Nederland has the power, directly or indirectly, to govern the financial and operating policies of an entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Positive differences arising on first-time consolidation are capitalized as goodwill. Investments in associated enterprises and joint ventures Associated enterprises are enterprises in which Allianz Nederland Groep holds directly or indirectly at least 20% but no more than 50% of the voting rights, or in which Allianz Nederland Groep exercises in another way a significant influence, without having control. A joint venture is an entity over which Allianz Nederland Groep and or more other parties have joint control. Investments in associated enterprises and joint ventures are generally accounted for using the equity method. Income from investments in associated enterprises and joint ventures is included as a separate component of total income. Transactions eliminated on consolidation Intragroup balances and transactions and any unrealized gains and losses arising from intragroup transactions are eliminated in preparing the consolidated financial statements. Use of estimates and assumptions The preparation of consolidated financial statements requires that Allianz Nederland makes estimates and assumptions that affect items reported in the consolidated balance sheet and income statement and under contingent liabilities. The estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The actual results may differ from these estimates. The most important of such items are the provisions for outstanding claims and provisions for long duration insurance contracts Life; these are more fully described in Note 15. Foreign currency translation Allianz Nederland s reporting and functional currency is the euro ( ). Income and expenses are translated at the rate per transaction date. The assets and liabilities in foreign currency are translated at the closing rate on the balance sheet date. Currency gains and losses arising from foreign currency transactions are reported in other income or other expenses respectively.

21 2 Summary of significant accounting and valuation policies Supplementary information on assets Cash and cash equivalents Cash and cash equivalents include balances with banks payable on demand, balances with central banks, checks and cash on hand, treasury bills (to the extent that they are not included in trading assets) and bills of exchange which are eligible for refinancing at central banks, subject to a maximum term of six months from the date of acquisition. Cash funds are stated at their face value, with holdings of foreign notes and coins valued at year-end closing prices. Financial assets carried at fair value through income These financial assets are measured at fair value. Changes in fair value are recorded in the Consolidated income statement as income from financial assets and liabilities carried at fair value through income (net). Derivative financial instruments are recognized initially at fair value. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The fair value of interest rate swaps is the estimated amount that Allianz Nederland would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counter parties. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price. Investments Investments include securities held-to-maturity and securities available-for-sale. Securities held-to-maturity are comprised of fixed income securities of which Allianz Nederland has the positive intent and ability to hold to maturity. These securities are carried at amortized cost and the related premium or discount is amortized using the effective interest rate method over the life of the security. Amortization of premium or discount is included in interest income. Securities available-for-sale are securities that are not classified as held-to-maturity or financial assets carried at fair value through income. Securities available-for-sale are valued at fair value at the balance sheet date. Unrealized gains and losses, which are the difference between fair value and cost (amortized cost in the case of fixed income securities), are included as a separate component of shareholders equity, net of deferred taxes. The realized result on securities is determined by applying the average cost method. Fixed income securities and equity investments are subject to regular impairment reviews. a l l i a n z n e d e r l a n d g r o e p 1 9 Impairment policy - securities A held-to-maturity or available-for-sale debt security is impaired if there is objective evidence that the cost may not be recovered. If all amounts due according to the contractual terms of the security are not considered collectible, typically due to deterioration in the creditworthiness of the issuer, the security is considered to be impaired. An impairment is not recorded as a result of declines in fair value resulting from general market interest or exchange rate movements unless Allianz Nederland Groep intends to dispose of the security. If there is objective evidence that the cost may not be recovered, an available-for-sale equity security is considered to be impaired. Objective evidence that the cost may not be recovered, in addition to qualitative impairment criteria, includes a significant or prolonged decline in the fair value below cost. Allianz Nederland established a policy that an available-for-sale equity security is considered impaired if the fair value is below the weighted-average cost by more than 20% or if the fair value is below the weighted-average cost for greater than nine months. This policy is applied individually by all subsidiaries. If an available-for-sale equity security is impaired based upon Allianz Nederland s qualitative or quantitative impairment criteria, any further declines in the fair value at subsequent reporting dates are recognized as impairments. Therefore, at each reporting period, for an equity security that is determined to be impaired based upon Allianz Group s impairment criteria, an impairment is recognized for the difference between the fair value and the original cost basis, less any previously recognized impairments. In a subsequent period, if the amount of the impairment previously recorded on a debt security decreases and the decrease can be objectively related to an event occurring after the impairment, such as an improvement in the debtor s credit rating, the impairment is reversed through other income from investments. These reversals do not result in a carrying amount of a debt security that exceeds what would have been, had the impairment not been recorded, at the date of the impairment is reversed. Reversals of impairments of available-for-sale equity securities are not recorded. Loans and advances to banks Investments lent under securities lending arrangements continue to be recognized in the Balance Sheet and are measured in accordance with the accounting policy for assets at fair value through income or available-for-sale as appropriate. Received cash collateral is recognized under Liabilities to financial institutions. The reinvested cash collateral is recognized under Loans and advances to banks. Income and expenses arising from the securities borrowing and lending business are recognized on an accrual basis over the period of the transactions and are included in interest income or expense. N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

22 2 0 a l l i a n z n e d e r l a n d g r o e p Reinsurance Only contracts that give rise to a significant transfer of insurance risk are accounted for as reinsurance. Amounts recoverable under such contracts are recognized in the same period as the related claim. Accordingly, revenues and expenses related to reinsurance agreements are recognized consistent with the underlying risk of the business reinsured. Deferred acquisition costs Deferred acquisition costs related to Life business generally consist of commissions which are directly related to the acquisition of new insurance contracts. These acquisition costs are deferred, to the extent they are recoverable and are amortized based on policy revenues which differ per product. In the case of property-casualty insurance contracts, the amortization period is calculated for each insurance portfolio, based on the average term of the relevant policies. All deferred policy acquisition costs are reviewed regularly to determine if they are recoverable from future operations. Deferred policy acquisition costs which are not deemed to be recoverable are charged to income. Other assets Other assets include equipment, receivables, real estate owned by Allianz Nederland and used for its own activities and prepaid expenses. Equipment is carried at cost, less accumulated depreciation and impairments. Depreciation is generally computed using the straightline method over the estimated useful lives of the assets, taking into account the residual value. The estimated useful life of equipment including information technology equipment is five years. Expenditures to restore economic benefits are capitalized if they extend the useful life as improvements. Costs for repairs and maintenance are expensed. An impairment loss, unscheduled amortization, is recognized when the recoverable amount of these assets is less than their carrying amount. Receivables are recorded at face value, net of appropriate valuation allowances. Real estate owned by Allianz Nederland and used for its own activities is carried at cost less accumulated depreciation and impairments. The capitalized cost of buildings is calculated on the basis of acquisition cost and depreciated over a maximum of 40 years in accordance with their expected useful lives. There is no amortization on the ground/soil. Expenditures to restore the future economic benefit are capitalized if they extend the useful lives as improvements. Costs for repairs and maintenance are expensed. An impairment loss is recognized when the recoverable amount of these assets is less than their carrying amount. Intangible assets Goodwill represents the difference between the acquisition cost and the Allianz Nederland Groep s proportionate share of the net fair value of assets, liabilities and certain contingent liabilities. Goodwill is not subject to amortization. Allianz conducts an annual impairment test, in addition to whenever there is an indication that goodwill is not recoverable. The impairment test includes comparing the recoverable amount to the carrying amount, including the goodwill, for all cash generating units. A cash generating unit is not impaired if the carrying amount is greater than the recoverable amount. The impairment of a cash generating unit is equal to the difference between the carrying amount and the recoverable amount. Impairments of goodwill are not reversed. Software purchased from third parties or developed internally is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates and is amortized over its useful life on a straight-line basis generally over five years. Supplementary information on equity and liabilities Liabilities to financial institutions and customers Interest-bearing liabilities are accounted for at their nominal value. Where liabilities are subject to a discount, such discounts are reported as prepaid expenses and amortized over the life of the respective liabilities, using the effective yield method. Insurance provisions Classification of contracts Contracts under which Allianz Nederland accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder or other beneficiary if a specified uncertain future event (the insured event) adversely affects the policyholder or another beneficiary are classified as insurance contracts. Contracts under which the transfer of insurance risk to Allianz Nederland from the policyholder is not significant, are classified as investment contracts. Allianz Nederland issues contracts to policyholders that contain both insurance and an investment component. If the investment component cannot be measured separately, the whole contract is accounted for as an insurance contract. A contract that qualifies as insurance remains an insurance contract until all risks and obligations are extinguished or expired. Unearned premiums provision Gross premiums written is earned over the period to which the risk coverage is related and is calculated on a pro rata temporis basis. Outward reinsurance premium is incurred over the same period and in the same manner as which the gross premium written associated with the reinsured contracts is earned. The unearned premiums