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Prospectus brochure de l'obligation Allianz DE000A28RSQ8 en EUR 0%, échue

Allianz est une multinationale allemande leader mondial des services financiers, spécialisée dans l'assurance et la gestion d'actifs.

L'Obligation émise par Allians ( Pays-bas ) , en EUR, avec le code ISIN DE000A28RSQ8, paye un coupon de 0% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 14/01/2025

Base Prospectus dated 12 May 2020
This document constitutes three base prospectuses for the purposes of Art. 8(1) of Regulation (EU) 2017/1129 of the European Parliament and of the
Council of 14 June 2017 (the "Prospectus Regulation") (i) the base prospectus of Allianz SE, Munich, Germany, in respect of non-equity securities
within the meaning of Art. 2(c) of the Prospectus Regulation ("Non-Equity Securities"), (ii) the base prospectus of Allianz Finance II B.V., Amsterdam,
The Netherlands, in respect of Non-Equity Securities and (iii) the base prospectus of Allianz Finance III B.V., Amsterdam, The Netherlands, in respect
of Non-Equity Securities.
ALLIANZ SE
(incorporated in Munich, Germany, as a European Company (Societas Europaea SE))
as Issuer
and, in respect of Notes issued by Allianz Finance II B.V. or Allianz Finance III B.V., as Guarantor
ALLIANZ FINANCE II B.V.
(incorporated in Amsterdam, The Netherlands, with limited liability)
as Issuer
ALLIANZ FINANCE III B.V.
(incorporated in Amsterdam, The Netherlands, with limited liability)
as Issuer
EUR 30,000,000,000 Debt Issuance Programme
Under this base prospectus (together with any documents incorporated by reference therein, the "Base Prospectus"), Allianz SE, Allianz Finance II B.V.
and Allianz Finance III B.V. (each an "Issuer" and together the "Issuers"), subject to compliance with all relevant laws, regulations and directives, may
from time to time issue unsubordinated bearer notes in a minimum denomination of EUR 1,000.00 per Note (together the "Notes"). The payments of
all amounts due in respect of Notes issued by Allianz Finance II B.V. and Allianz Finance III B.V. will be unconditionally and irrevocably guaranteed by
Allianz SE (the "Guarantor"). The aggregate principal amount of Notes issued under the Debt Issuance Programme described in this Base Prospectus
(the "Programme") outstanding will not at any time exceed EUR 30,000,000,000 (or the equivalent in other currencies).
The principal amount of the Notes, the issue currency, the interest payable in respect of the Notes, the issue prices and maturities of the Notes and
all other terms and conditions which are applicable to a particular Series and, if applicable, Tranche of Notes (each term as defined below, see "General
description of the Programme") will be set out in the document containing the final terms (each "Final Terms") within the meaning of Art. 8(4) of the
Prospectus Regulation.
This Base Prospectus has been approved by the Luxembourg Commission de Surveillance du Secteur Financier (the "CSSF") as competent authority
under the Prospectus Regulation. The CSSF only approves this Base Prospectus as meeting the standards of completeness, comprehensibility and
consistency imposed by the Prospectus Regulation and gives no undertakings as to the economic and financial soundness of the transaction or the
quality or solvency of the Issuers or the Guarantor (if any) in line with the provisions of article 6(4) of the Luxembourg act relating to prospectuses for
securities (loi relative aux prospectus pour valeurs mobilières) dated 16 July 2019 (the "Luxembourg Prospectus Law"). Such approval should not be
considered as an endorsement of the Issuers or of the quality of the Notes that are the subject of this Base Prospectus. Investors should make their
own assessment as to the suitability of investing in the Notes.
Each Issuer may request the CSSF to provide competent authorities in host member states within the European Economic Area and the United Kingdom
with a certificate of approval attesting that this Base Prospectus has been drawn up in accordance with the Prospectus Regulation.
Application has also been made to the Luxembourg Stock Exchange for Notes issued under the Programme to be listed on the official list of the
Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated market "Bourse de
Luxembourg". The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of the Markets in Financial Instruments
Directive 2014/65/EU (as amended, "MiFID II"). However, Notes may be listed on any other stock exchange or may be unlisted as specified in the
relevant Final Terms.
This Base Prospectus and any supplement to this Base Prospectus will be published in electronic form together with all documents incorporated by
reference on the website of the Luxembourg Stock Exchange (www.bourse.lu). This Base Prospectus is valid for a period of twelve months after its
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approval. The validity ends upon expiration of 12 May 2021. The obligation to supplement this Base Prospectus in the event of significant new factors,
material mistakes or material inaccuracies does not apply when this Base Prospectus is no longer valid.
This Base Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes in any jurisdiction where such offer or
solicitation is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and subject to certain
exceptions, the Notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons.
Prospective purchasers of the Notes should ensure that they understand the nature of the Notes and the extent of their exposure to risks and that
they consider the suitability of the Notes as an investment in light of their own circumstances and financial condition. Investing in the Notes involves
certain risks. Please review the section entitled "Risk Factors" beginning on page 8 of this Base Prospectus.
Arranger
Commerzbank
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RESPONSIBILITY STATEMENT
Allianz SE ("Allianz" and, together with its consolidated subsidiaries, "Allianz Group" or, in connection with Notes issued by Allianz Finance II B.V. and
Allianz Finance III B.V., the "Guarantor") with its registered office in Munich, Germany, Allianz Finance II B.V. with its registered office in Amsterdam,
The Netherlands and Allianz Finance III B.V. with its registered office in Amsterdam, The Netherlands (each an "Issuer" and together the "Issuers")
accept responsibility for the information contained in and incorporated by reference into this Base Prospectus and for the information which will be
contained in the Final Terms.
Each Issuer hereby declares that to the best of its knowledge the information contained in this Base Prospectus for which it is responsible is in
accordance with the facts and that this Base Prospectus makes no omission likely to affect its import.
NOTICE
This Base Prospectus should be read and understood in conjunction with any supplement hereto and with any other documents incorporated herein
by reference (see "Documents Incorporated by Reference" below). Full information on the Issuers and any Tranche of Notes is only available on the
basis of the combination of the Base Prospectus and the relevant Final Terms.
No person has been authorised to give any information or to make any representation other than those contained in this Base Prospectus in connection
with the issue or sale of the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by
the Issuers or the Arranger or any Dealer (as defined in "General Description of the Programme").
Neither the Arranger nor any Dealer nor any other person mentioned in this Base Prospectus, excluding the Issuers, is responsible for the information
contained in this Base Prospectus or any supplement thereof, or any Final Terms or any other document incorporated herein by reference, and
accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these persons accepts any responsibility for the accuracy and
completeness of the information contained in any of these documents.
Neither the delivery of this Base Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication that
there has been no change in the affairs of the Issuers since the date hereof or the date upon which this Base Prospectus has been most recently
supplemented or that there has been no adverse change in the financial position of the Issuers since the date hereof or the date upon which this Base
Prospectus has been most recently supplemented or that any other information supplied in connection with the Programme is correct as of any time
subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.
The distribution of this Base Prospectus and the offering or sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose
possession this Base Prospectus comes are required by the Issuers, the Arranger and the relevant Dealer(s) to inform themselves about and to observe
any such restriction.
The Notes and the Guarantee have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with
any securities regulatory authority of any state or other jurisdiction of the United States. The Notes will be issued in bearer form and are subject to
certain U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to, or for the
account or benefit of, any U.S. person. The term "U.S. person" has the meaning ascribed to it in Regulation S under the Securities Act ("Regulation S")
and the U.S. Internal Revenue Code of 1986, as amended (the "Code") and regulations thereunder. The Notes are being offered and sold outside the
United States to non-U.S. persons pursuant to Regulation S and may not be legally or beneficially owned at any time by any U.S. person. For a
description of certain restrictions on offers and sales of Notes and on distribution of this Base Prospectus, see "Subscription and Sale - Selling Re-
strictions".
Neither this Base Prospectus nor any supplement(s) thereto nor any Final Terms may be used for the purpose of an offer or solicitation by anyone in
any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation.
Neither this Base Prospectus nor any supplement(s) thereto nor any Final Terms constitute an offer or an invitation to subscribe for or purchase any
Notes and should not be considered as a recommendation by the Issuers or any Dealer that any recipient of this Base Prospectus or any Final Terms
should subscribe for or purchase any Notes. Each recipient of this Base Prospectus or any Final Terms shall be taken to have made its own investigation
and appraisal of the condition (financial or otherwise) of the Issuers.
The language of the Base Prospectus except for the form of terms and conditions of the Notes is English. The binding language of the terms and
conditions of each Series of Notes will be specified in the respective Final Terms.
The information on any website referred to in this Base Prospectus do not form part of the Base Prospectus and has not been scrutinized or approved
by the CSSF unless that information is incorporated by reference into the Base Prospectus.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET
The Final Terms in respect of any Notes may include a legend entitled "MiFID II Product Governance" which will outline the target market assessment
in respect of the Notes and which channels for distribution of the Notes are appropriate. Any person subsequently offering, selling or recommending
the Notes (a "distributor") should take into consideration the target market assessment; however, a distributor subject to Directive 2014/65/EU (as
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amended, "MiFID II") is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target
market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID Product Governance rules under EU Delegated
Directive 2017/593 (the "MiFID Product Governance Rules"), any Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but
otherwise neither the Arranger nor the Dealers nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID Product
Governance Rules.
PRIIPS REGULATION / EEA AND UK RETAIL INVESTORS
If the Final Terms in respect of any Notes include a legend entitled "Prohibition of Sales to EEA and UK Retail Investors", the Notes are not intended
to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European
Economic Area ("EEA") or in the United Kingdom (the "UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive 2016/97/EU as amended (the "Insurance
Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a
qualified investor as defined in the Prospectus Regulation. Consequently, no key information document required by Regulation (EU) No 1286/2014 (as
amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA or in the UK has
been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be
unlawful under the PRIIPs Regulation.
BENCHMARK REGULATION / STATEMENT IN RELATION TO ADMINISTRATOR'S REGISTRATION
Interest amounts payable under floating rate notes issued under this Programme are calculated by reference to (i) EURIBOR (Euro Interbank Offered
Rate) which is provided by the European Money Markets Institute (EMMI) or (ii) LIBOR (London Interbank Offered Rate) which is provided by the ICE
Benchmark Administration Limited (IBA). As at the date of this Base Prospectus, each of EMMI and IBA appears on the register of administrators and
benchmarks established and maintained by the European Securities and Markets Authority (ESMA) pursuant to Article 36 of the Regulation (EU)
2016/1011 of the European Parliament and of the Council of 8 June 2016, as amended ("Benchmark Regulation").
STABILISATION
In connection with the issue of any Tranche of Notes under the Programme, the Dealer or Dealers (if any) named as stabilising manager(s) in the
applicable Final Terms (or persons acting on behalf of a stabilising manager) may over-allot Notes or effect transactions with a view to supporting the
price of the Notes at a level higher than that which might otherwise prevail. However, stabilisation may not necessarily occur. Any stabilisation action
may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun,
may cease at any time, but it must end no later than the earlier of 30 days after the Issue Date of the relevant Tranche of Notes and 60 days after the
date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant stabilising
manager(s) (or person(s) acting on behalf of any stabilising manager(s)) in accordance with all applicable laws and rules.
FORWARD-LOOKING STATEMENTS
This Base Prospectus contains certain forward-looking statements. A forward-looking statement is a statement that does not relate to historical facts
and events. They are based on analyses or forecasts of future results and estimates of amounts not yet determinable or foreseeable. These forward-
looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may",
"plan", "predict", "project", "will" and similar terms and phrases, including references and assumptions. This applies, in particular, to statements in
this Base Prospectus containing information on future earning capacity, plans and expectations regarding Allianz Group's business and management,
its growth and profitability, and general economic and regulatory conditions and other factors that affect it.
Forward-looking statements in this Base Prospectus are based on current estimates and assumptions that the Issuers make to the best of their present
knowledge. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results, including Allianz
Group's financial condition and results of operations, to differ materially from and be worse than results that have expressly or implicitly been assumed
or described in these forward-looking statements. Allianz Group's business is also subject to a number of risks and uncertainties that could cause a
forward-looking statement, estimate or prediction in this Base Prospectus to become inaccurate. Accordingly, investors are strongly advised to read
the following sections of this Base Prospectus: "Risk Factors" and "Description of Allianz SE and Allianz Group". These sections include more detailed
descriptions of factors that might have an impact on Allianz Group's business and the markets in which it operates.
In light of these risks, uncertainties and assumptions, future events described in this Base Prospectus may not occur. In addition, neither the Issuers
nor the Dealers assume any obligation, except as required by law, to update any forward-looking statement or to conform these forward-looking
statements to actual events or developments.
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TABLE OF CONTENTS
GENERAL DESCRIPTION OF THE PROGRAMME ..................................................................................................................................................... 6
RISK FACTORS ....................................................................................................................................................................................................... 8
ISSUE PROCEDURES ............................................................................................................................................................................................ 20
PROGRAMME TERMS AND CONDITIONS OF THE NOTES ................................................................................................................................... 22
FORM OF FINAL TERMS .................................................................................................................................................................................... 109
DESCRIPTION OF ALLIANZ SE AND ALLIANZ GROUP ......................................................................................................................................... 127
DESCRIPTION OF ALLIANZ FINANCE II B.V......................................................................................................................................................... 155
DESCRIPTION OF ALLIANZ FINANCE III B.V. ....................................................................................................................................................... 157
DESCRIPTION OF THE GUARANTEE WITH RESPECT TO ALLIANZ FINANCE II B.V. ............................................................................................. 159
DESCRIPTION OF THE GUARANTEE WITH RESPECT TO ALLIANZ FINANCE III B.V. ............................................................................................ 162
USE OF PROCEEDS ............................................................................................................................................................................................ 165
TAXATION WARNING ........................................................................................................................................................................................ 166
SUBSCRIPTION AND SALE ................................................................................................................................................................................. 167
GENERAL INFORMATION .................................................................................................................................................................................. 171
DOCUMENTS INCORPORATED BY REFERENCE .................................................................................................................................................. 173
NAMES AND ADDRESSES .................................................................................................................................................................................. 178
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GENERAL DESCRIPTION OF THE PROGRAMME
GENERAL
Under the Programme, Allianz SE, Allianz Finance II B.V. and Allianz Finance III B.V., subject to compliance with all relevant laws, regulations and direc-
tives, may from time to time issue notes (the "Notes") to one or more Dealers. Each of the Issuers and Guarantor (as applicable) may from time to
time appoint any institution as a Dealer in relation to a single Tranche. References in this Base Prospectus to "Dealer(s)" means, in relation to any
Tranche, each person who is appointed as a Dealer under the Programme Agreement.
Commerzbank Aktiengesellschaft acts as arranger in respect of the Programme (the "Arranger").
Deutsche Bank Aktiengesellschaft will act as fiscal agent (the "Fiscal Agent") and paying agent (the "Paying Agent").
Deutsche Bank Luxembourg S.A. will act as Luxembourg listing agent (the "Luxembourg Listing Agent").
The aggregate principal amount of the Notes outstanding at any one time under the Programme will not exceed EUR 30,000,000,000 (or its equivalent
in any other currency) (the "Programme Limit"). The Issuers may increase the Programme Limit in accordance with the terms of the Programme
Agreement (as defined herein) from time to time.
PROSPECTUS
Notes issued under the Programme may be issued either: (1) pursuant to this Base Prospectus and associated Final Terms; or (2) pursuant to a Specific
Prospectus (as defined below); or (3) in relation to Notes not publicly offered in, and not admitted to trading on a regulated market of, any member
state of the European Economic Area and the United Kingdom, in such form as agreed between the relevant Issuer, the relevant Dealer(s) and, if
relevant for the Fiscal Agent (as defined below), the Fiscal Agent.
"Specific Prospectus" means any prospectus prepared by an Issuer in relation to Notes issued under the Programme and having terms not contem-
plated by the Base Prospectus as Option I or Option II, which may incorporate by reference certain parts of the Base Prospectus and which constitutes
a prospectus for the purposes of Article 6 para. 3 of the Prospectus Regulation, including any documents which are from time to time incorporated by
reference in the Specific Prospectus, as such Specific Prospectus is amended, supplemented or replaced from time to time.
ISSUES OF NOTES
Notes may be issued on a continuing basis to one or more of the Dealers.
The Notes issued under this Base Prospectus will be issued as fixed rate notes (the "Fixed Rate Notes"), non-interest bearing notes (the "non-interest
bearing Notes") or floating rate notes (the "Floating Rate Notes").
The Notes issued by Allianz Finance II B.V. and Allianz Finance III B.V. will have the benefit of a guarantee, dated 12 May 2020, given by the Guarantor
(the "Guarantee"). The Guarantee constitutes an irrevocable, unsecured and unsubordinated obligation of the Guarantor ranking pari passu with all
other unsecured and unsubordinated obligations of the Guarantor. The Guarantee will be governed by German law.
Notes will be issued in tranches ("Tranches"), each Tranche in itself consisting of Notes, which are identical in all respects. One or more Tranches, which
are expressed to be consolidated and forming a single series and identical in all respects, but having different issue dates, interest commencement
dates, issue prices and dates for first interest payments may form a series ("Series") of Notes. Further Notes may be issued as part of existing Series.
Notes of any Tranche may be issued at a price (the "Issue Price") equal to their principal amount or at a discount or premium to their principal amount.
The Issue Price for the Notes of any Tranche issued on a syndicated basis will be determined at the time of pricing on the basis of a yield which will be
determined on the basis of the orders of the investors which are received by the Dealers during the offer period. Orders will specify a minimum yield
and may only be confirmed at or above such yield. The resulting yield will be used to determine the Issue Price.
Notes will be issued in such denominations as may be agreed between the relevant Issuer and the relevant Dealer(s) and as indicated in the applicable
Final Terms save that the minimum denomination of the Notes will be, if in euro, EUR 1,000.00, and, if in any currency other than euro, an amount in
such other currency at least equivalent to EUR 1,000.00 at the time of the issue of Notes. Subject to any applicable legal or regulatory restrictions, and
requirements of relevant central banks, Notes may be issued in euro or any other currency.
Notes will be issued with such maturities as may be agreed between the relevant Issuer and the relevant Dealer(s), subject to such minimum or
maximum maturities as may be allowed or required from time to time by any laws, regulations and directives applicable to the relevant Issuer or the
relevant currency.
The principal amount of the Notes, the currency, the interest payable in respect of the Notes, if any, the Issue Price and maturities of the Notes which
are applicable to a particular Series and, if applicable, Tranche will be set out in the relevant Final Terms.
The yield for Notes with fixed interest rates will be calculated by the use of the International Capital Market Association ("ICMA") method, which
determines the effective interest rate of notes taking into account accrued interest on a daily basis.
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Each Tranche of Notes will be represented, on issue, either
(i)
initially by a temporary global note which will be exchangeable, in whole or in part, for interest in a permanent global Note on or after the
date 40 days after the later of the commencement of the offering and the relevant issue date (the "Exchange Date"), upon certification as
to non-U.S. beneficial ownership, or
(ii)
by a permanent global note.
The Notes will be freely transferable in accordance with the rules and regulations of the relevant Clearing System.
DISTRIBUTION OF NOTES
Notes may be distributed by way of public offer or private placements and, in each case, on a syndicated or non-syndicated basis. The method of
distribution of each Tranche will be stated in the relevant Final Terms. The Notes may be offered to qualified and non-qualified investors.
The Notes may be offered to the public in Luxembourg. The Issuers may request the CSSF to provide competent authorities in host member states
within the European Economic Area and the United Kingdom with a certificate of approval attesting that this Base Prospectus has been drawn up in
accordance with the Prospectus Regulation.
The offer and distribution of any Notes of any Tranche will be subject to selling restrictions, including those for the United States, the European
Economic Area and the United Kingdom. See "Subscription and Sale" below.
The Final Terms in respect of any Notes may include a legend entitled "MiFID II Product Governance" which will outline the target market assessment
in respect of the Notes and which channels for distribution of the Notes are appropriate. Any person subsequently offering, selling or recommending
the Notes (a "distributor") should take into consideration the target market assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target market assessment) and determining
appropriate distribution channels.
LISTING OF NOTES
Application has also been made to the Luxembourg Stock Exchange for Notes issued pursuant to this Base Prospectus to be listed on the official list of
the Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated market "Bourse de
Luxembourg", appearing on the list of regulated markets issued by the European Commission and may be made on any other regulated market in a
Member State of the EEA or the UK (a "Regulated Market"). The Luxembourg Stock Exchange's regulated market is a regulated market included on the
list of regulated markets published by ESMA for the purposes of MiFID II. However, Notes may be listed on any other stock exchange or may be unlisted
as specified in the relevant Final Terms, subject to the notification of the Base Prospectus in accordance with Art. 25 of the Prospectus Regulation.
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RISK FACTORS
Allianz SE and the Allianz Group are exposed to a variety of risks through its core insurance and asset management activities, including market, credit,
underwriting, business, operational, strategic, liquidity, and reputational risks. The following is a description of the material risk factors in relation to
Allianz SE as Issuer and the Allianz Group in relation to the Notes. The realisation of any of the risks described below may affect the ability of Allianz
SE to fulfil its obligations as Issuer or (as the case may be) as Guarantor and/or may adversely affect the market price of Notes and can lead to losses
for the holders of the Notes (the "Noteholders"). As a result, investors are exposed to the risk of losing their investment in whole or in part. Additional
risks not included in the risk factors below, e.g., because they are now immaterial or not currently known to Allianz SE or Allianz Group, may result in
material risks in the future. This is in particular true for risks related to the crisis resulting from the outbreak of SARS-CoV-2 and its associated disease
("Covid-19") which, although to some extent explicitly mentioned as a risk factor or implicitly reflected in the weighting (high / medium / low) of the
relevant other risk factors discussed in the following sections, are considered based on currently available information and are subject to a constantly
changing and very volatile environment. Investors should be aware that the Allianz SE as the ultimate parent of the Allianz Group may face the same
risks as the Allianz Group.
Words and expressions defined in the Terms and Conditions shall have the same meanings in this section.
Risk factors relating to Allianz SE / Allianz Group
I. MARKET RISKS
The market risks of the Allianz Group include credit spread risk, equity risk, interest rate risk, real estate risk, currency risk and inflation risk. In our
assessment, the credit spread and the equity risk are the most material risks for the Allianz Group in the category of market risks.
THE ALLIANZ GROUP IS EXPOSED TO CREDIT SPREAD RISK.
The Allianz Group holds a significant portfolio of fixed-income assets such as bonds. The value of this portfolio is changing in case of moving credit
spreads. It may lose value if credit spreads widen. This may happen in case the perception of risk in the market changes, i.e. investors demand higher
compensation for taking on risks, which can happen for several reasons for example following a political crisis, an economic recession or changed
monetary policy.
We consider this risk to be high.
THE ALLIANZ GROUP IS EXPOSED TO EQUITY RISK.
The Allianz Group holds a significant equity portfolio. This portfolio is subject to volatility in equity markets affecting the market value and liquidity of
these holdings. Investments are reviewed regularly for impairment, with write-downs to fair value charged to income if there is objective evidence
that the cost may not be recovered. The Allianz Group holds interests in a number of financial institutions as part of its portfolios, which are particularly
exposed to uncertain market conditions affecting the financial services sector generally.
In prior years the Allianz Group has incurred significant impairments on the value of the securities and other financial assets that it holds and there is
the risk that the Allianz Group will recognize significant impairments in the future again, which may have an adverse effect on the Allianz Group's
earnings and on the Allianz Group's business and its financial condition.
We consider this risk to be high.
THE ALLIANZ GROUP IS EXPOSED TO INTEREST RATE RISK.
Changes in prevailing interest rates (including changes in the difference between the levels of prevailing short- and long-term rates, or enduring neg-
ative rates) may adversely affect the Allianz Group's insurance, asset management, corporate and other results.
An increase in interest rates could substantially decrease the value of the Allianz Group's fixed-income portfolio, and any unexpected change in interest
rates could materially adversely affect the Allianz Group's bond and interest rate derivative positions.
Assets and liabilities from an Allianz Group perspective are not necessarily matched in terms of interest rate sensitivities and therefore any significant
change in interest rates could materially adversely affect the Allianz Group's bond and interest rate derivative positions and the fair value of liabilities.
A change in prevailing interest rates may accordingly have a negative impact on the capitalization of the Allianz Group.
Results of the Allianz Group's asset management business may also be affected by movements in interest rates, as management fees are generally
based on the value of assets under management, which fluctuate with changes in the level of interest rates.
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Changes in interest rates will impact the Allianz Group's Life/Health business to the extent they result in changes to current interest income, impact
the value of the Allianz Group's fixed-income portfolio and the fair value of the liabilities and affect the levels of new product sales or surrenders of
business in force. Reductions in the effective investment income below the rates prevailing at the issue date of the policy, or below the long-term
guarantees in countries such as Germany and Switzerland, would reduce the profit margins or lead to losses on the Life/Health insurance business
written by the Allianz Group's Life/Health subsidiaries to the extent the maturity composition of the assets does not match the maturity composition
of the insurance obligations they are backing. In particular, if low interest rates persist, the effective investment income will decrease over time due to
reducing reinvestment yields. Similarly, reductions in the effective investment income of the fixed income trust assets backing the Allianz Group's
pension reserves may lead to deficits of the internal pension plans, and these deficits would have to be covered by the Allianz Group. Interest rate
volatility risk could substantially impact the economic capitalization in a low interest rate environment, as long term guarantees in Life/Health business
increase in value.
We consider this risk to be medium to high.
THE ALLIANZ GROUP IS EXPOSED TO REAL ESTATE RISK.
The Allianz Group holds a significant alternative investments portfolio. Alternative investments include real estate, private equity, renewable energy
and infrastructure investments. These investments are subject to volatility in real estate, equity and alternative investment markets affecting the
market value and liquidity of these holdings and are generally covered by either the real estate or the equity risk capital modelling depending on their
characteristics. Investments are reviewed regularly for impairment, with write-downs to fair value charged to income if there is objective evidence
that the cost may not be recovered.
In prior years the Allianz Group has incurred significant impairments on the value of the securities and other financial assets that it holds and there is
the risk that the Allianz Group will recognize significant impairments in the future again, which may have an adverse effect on the Allianz Group's
earnings, the Allianz Group's business and its financial condition.
We consider this risk to be low.
THE ALLIANZ GROUP IS EXPOSED TO CURRENCY RISK.
The Allianz Group prepares its consolidated financial statements in Euro. However, a significant portion of the revenues and expenses from the Allianz
Group companies outside the Euro zone, originates in currencies other than the Euro. As a result, although the Allianz Group's non-Euro zone subsid-
iaries generally record their revenues and expenses in the same currency, changes in the exchange rates used to translate foreign currencies into Euro
may adversely affect the Allianz Group's results of operations and the net asset value of subsidiaries from an Allianz Group perspective.
We consider this risk to be low.
THE ALLIANZ GROUP IS EXPOSED TO INFLATION RISK.
Allianz Group is exposed to changing inflation rates, predominantly due to the Non-Life insurance obligations but also due to inflation-indexed internal
pension obligations. Unexpected inflation increases both future claims and expenses, leading to greater liabilities and payments to policyholders.
We consider this risk to be low.
II. CREDIT RISKS
The Allianz Group companies are subject to a potential economic loss in the value of their portfolio that would result from either changes in the credit
quality of counterparties ("migration risk") or the inability or unwillingness of a counterparty to fulfill contractual obligations ("default risk"). Allianz
Group's credit risk profile is derived from three sources:
Investment portfolio: Credit risk results from Allianz Group's investments in fixed-income bonds, loans, derivatives, cash positions, and receivables
whose value may decrease depending on the credit quality of the obligor. As a result, defaults by one or more of these parties on their obligations
to the Allianz Group companies due to bankruptcy, lack of liquidity, downturns in the economy or real estate values, operational failure or other
reasons, or even rumors about potential defaults by one or more of these parties or regarding the financial services industry generally, could lead
to losses or defaults by the Allianz Group companies or by other institutions. In addition, with respect to secured transactions, the Allianz Group
companies' credit risk may be exacerbated when the collateral held by them cannot be realized or is liquidated at prices not sufficient to recover
the full amount of the loan or derivative exposure. The Allianz Group companies also have exposure to a number of financial institutions in the
form of unsecured debt instruments, derivative transactions and equity investments. Losses on or impairments to the carrying value of these
assets may materially and adversely affect the Allianz Group's business or results of operations. In our assessment, the credit risk related to the
investment portfolio of the Allianz Group is the most material risk in the category of credit risk. We consider this risk to be medium.
Credit insurance: Credit risk arises from potential claim payments on limits granted by Euler Hermes to its policyholders. Euler Hermes insures its
policyholders from credit risk associated with short-term trade credits advanced to clients of the policyholder. If the client of the policyholder is
unable to meet its payment obligations, Euler Hermes indemnifies the loss to the policyholder. We consider this risk to be low.
Reinsurance: The Allianz Group transfers exposure to certain risks in the Property-Casualty and Life/Health insurance businesses to others through
reinsurance arrangements. Under these arrangements, other insurers assume a portion of the Allianz Group's losses and expenses associated
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with reported and unreported losses in exchange for a portion of policy premiums. Credit risk arises from potential losses from non-recoverability
of reinsurance receivables or due to default on benefits under in-force reinsurance treaties. We consider this risk to be low.
If any of the above-mentioned risks materialize, this may materially and adversely affect the Allianz Group's business or results of operations. In prior
years the Allianz Group has incurred significant impairments on the value of the securities and other financial assets that it holds and there is the risk
that the Allianz Group will recognize significant impairments in the future again, which may have an adverse effect on the Allianz Group's earnings and
on the Allianz Group's business and its financial condition.
III. UNDERWRITING RISK OF THE ALLIANZ GROUP
Underwriting risk consists of premium and reserve risks in the Property-Casualty business segment as well as biometric risks in the Life/Health business
segment. In our assessment, the underwriting risk related to Property-Casualty business is the most material in this category.
UNDERWRITING RISK RELATED TO PROPERTY-CASUALTY BUSINESS
Our Property-Casualty insurance businesses are exposed to premium risk-related adverse developments in the current year's new and renewed busi-
ness as well as to reserve risks related to the business in force.
Loss reserves for the Allianz Group's Property-Casualty insurance and reinsurance policies are based on estimates as to claims liabilities. Adverse
developments relating to claims could lead to further reserve additions and materially adversely impact the Allianz Group's results of operations.
In accordance with industry practice, accounting and regulatory requirements, the Allianz Group establishes reserves for losses and loss adjustment
expenses related to its Property-Casualty insurance and reinsurance businesses, including Property-Casualty business in run-off.
Reserves are based on estimates of future payments that will be made in respect of claims, including expenses relating to such claims. Such estimates
are made both on a case-by-case basis as well as in respect of losses that have been incurred but not reported ("IBNR") to the Allianz Group. These
reserves represent the estimated ultimate cost necessary to bring all pending reported and IBNR claims to final settlement.
Reserves are subject to change due to a number of variables that affect the ultimate cost of claims, such as exchange rates, changes in the legal
environment and results of litigation as well as effects closely related to (super-imposed-) inflation that may adversely affect costs of repairs and
medical costs. The Allianz Group's reserves for asbestos and environmental and other latent claims are particularly subject to such variables.
Established loss reserves estimates are periodically adjusted in the ordinary course of settlement, using the most current information available to
management, and any adjustments resulting from changes in reserve estimates are reflected in current results of operations.
To the extent that the Allianz Group's actual claims experience is less favorable than the underlying assumptions used in setting the prices for products
and establishing reserves, the Allianz Group may be required to increase its reserves, which may materially adversely affect its results of operations.
On a quarterly basis, Allianz Group monitors reserve levels, movements and trends. This monitoring is conducted on the basis of quarterly data sub-
mitted by the subsidiaries as well as through frequent dialogue with local actuaries. However, ultimate losses may materially exceed the established
reserves and have a material adverse effect on the Allianz Group's results of operations.
Allianz Group's Property-Casualty insurance covers to a large extent losses from major unpredictable events like natural catastrophes (e.g. hurricanes,
earthquakes, floods) and man-made events (e.g. fires, industrial explosions) but also acts of terror. The likelihood of such events can change due to
natural climate cycles, changes in the portfolios, but also through a changing market or geopolitical environment. Consequently, geopolitical tensions
may increase the risk of terror losses significantly in some regions. Also increasing urbanization and increasing concentration of industrial facilities in
natural catastrophe prone regions has increased losses over the past years, a trend that is expected to continue. In addition, increasing digitalization
introduces new risks in regard to Cybercrime, i.e. manipulation of software or loss of sensitive data. However, the incidence and severity of all these
catastrophes in any given period are inherently unpredictable. All risk models are subject to uncertainty arising from both scientific and management
assumptions as well as underlying data.
The Allianz Group monitors its overall exposure to catastrophes and other unpredictable events in each geographic region and each of the Allianz
Group's subsidiaries within the Allianz Group's limit framework. In addition, local entities have implemented their own underwriting limits related to
insurance coverage for losses from catastrophic events. However, a series of unlikely catastrophes in a year may result in unusually high levels of losses
with a material adverse effect on the Allianz Group's financial position or results of operations.
Furthermore, the occurrence of extreme large scale natural catastrophes, pandemics and man-made disasters (e.g. terror events) can have a negative
impact on local or even global economy in general, and capital markets in particular, and thus also on the Allianz Group's financial position and results
of operations.
We consider this risk to be medium.
UNDERWRITING RISK RELATED TO LIFE-HEALTH BUSINESS
Underwriting risks in our Life/Health operations (biometric risks) include mortality, disability, morbidity, and longevity risks.
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