Q1 2026 Allianz SE Earnings Call - Media Conference

May 13, 2026

Speaker #1: And welcome to Allianz's first quarter 2026 media conference call. Thank you very much for joining us today. My name is Frank Stoffel, Head of Financial Communications and Valuation Relations and I'm speaking to you from our headquarters here in Munich.

Speaker #1: I am joined today by our Chief Financial Officer, Claire-Marie Koste-Poutre. Before going into the presentation, let me briefly cover the usual housekeeping items. We will answer all questions in English; however, if you feel more comfortable asking your question in German, please feel free to do so; we will then repeat the question in English for everyone else on the call.

Speaker #1: Good morning, everyone, and welcome to Allianz's first quarter 2026 media conference call. Thank you very much for joining us today. My name is Frank Stoffel, Head of Financial Communications and Valuation Relations, and I'm speaking to you from our headquarters here in Munich.

Speaker #1: I am joined today by our Chief Financial Officer, Claire-Marie Coste-Lepoutre. Before going into the presentation, let me briefly cover the usual housekeeping items. We will answer all questions in English.

Speaker #1: If you want to ask a question during the Q&A session, press *5. If you have joined via telephone, press the Talk Request button on the web audio call.

Speaker #1: However, if you feel more comfortable asking your question in German, please feel free to do so; we will then repeat the question in English for everyone else on the call.

Speaker #1: If you are on an IP-based telephone, this may cost technical problems for you. If this is the case, please email media.contact@allianz.com and we can assist you with your setup.

Speaker #1: If you want to ask a question during the Q&A session, press *5 if you have joined via telephone or press the talk request button on the web audio call.

Speaker #1: Or we can take your question and ask it on your behalf. Today's conference call is scheduled for 60 minutes and is usual we will answer your questions following our presentation by our CFO.

Speaker #1: If you are on an IP-based telephone, this may cause technical problems for you. If this is the case, please email media.contact@allianz.com and we can assist you with your setup.

Speaker #1: With this, it is my pleasure to hand over to Claire-Marie.

Speaker #2: Thank you very much, Frank, and good morning everyone. Let me start with an overview of the group results for the first quarter of 2026.

Speaker #2: So the overall picture from my perspective is one of a strong start to the year, which allows to reaffirm our full-year outlook of an operating profit of 17.4 billion plus minus 1 billion euro.

Speaker #1: With this, it is my pleasure to hand over to Claire-Marie.

Speaker #2: Thank you very much, Frank, and good morning, everyone. Let me start with an overview of the group results for the first quarter of 2026.

Speaker #2: We can confidently do so despite an elevated market volatility and a more uncertain macro environment. Across our three strategic levers, growth, productivity, and resilience, we continue to execute with discipline and to deliver to answer our ambition.

Speaker #2: So the overall picture from my perspective is one of a strong start to the year, which allows us to reaffirm our full-year outlook of an operating profit of €17.4 billion, plus or minus €1 billion.

Speaker #2: Moving to the numbers on page A4, here you can see overall our business volume continues to show steady internal growth, driven in particular this quarter by our P&C and asset management segments.

Speaker #2: We can confidently do so, despite elevated market volatility and a more uncertain macro environment. Across our three strategic levers—growth, productivity, and resilience—we continue to execute with discipline and to deliver to answer our ambition.

Speaker #2: The live business was resilience against the first quarter 2025, where business volume was particularly high back then. Our operating profit momentum is excellent, nearly 7% year on year.

Speaker #2: With where we see more benefit from the diversification of our business model. Here we see in particular a double-digit growth in P&C, which is reaching a new record level of operating profit, an excellent performance in asset management, which is up 6% or 15% if you adjust for FX, and life delivered a resilience performance even if it has been impacted by FX.

Speaker #2: The live business was resilient against the first quarter of 2025, where business volume was particularly high back then. Our operating profit momentum is excellent, nearly 7% year on year.

Speaker #2: With where we see more benefit from the diversification of our business model. Here we see, in particular, a double-digit growth in P&C, which is reaching a new record level of operating profit, an excellent performance in Asset Management, which is up 6%, or 15% if you adjust for FX, and Life delivered a resilient performance even if it has been impacted by FX.

Speaker #2: And the disposal of the joint ventures with UniCredit and Bajaj. Our net income includes the impact of the completion of the Bajaj disposal for 1.1 billion euro net.

Speaker #2: As a reminder, we have indicated in the fourth quarter that we will neutralize this accounting gain over the course of 2026 through strategic and productivity actions and reinvestment into higher yielding instruments.

Speaker #2: And the disposal of the joint ventures with UniCredit and Bajaj. Our net income includes the impact of the completion of the Bajaj disposal for 1.1 billion euro net.

Speaker #2: Only a modest offset of 150 million euro net was booked in the first quarter and more will follow through during the year. Adjusted for the Bajaj impacts, our underlying core net income achieved a strong increase of 7% year on year, with an ROE of 18% and an excellent EPS growth of 9%.

Speaker #2: Only a modest offset of €150 million net was booked in the first quarter, and more will follow through during the year. Adjusted for the Bajaj impacts, our underlying core net income achieved a strong increase of 7% year-on-year, with an ROE of 18% and excellent EPS growth of 9%.

Speaker #2: So beyond these exceptional effects, the fundamental performance is very strong and fully on track towards the capital market day ambition. Finally, our solvency to ratio ended the quarter at 221%.

Speaker #2: This is a very resilient level with well-contained market volatility and a consistently delivered strong operating capital generation. Let's move to P&C on page A5.

Speaker #2: So, beyond these exceptional effects, the fundamental performance is very strong and fully on track towards the Capital Market Day ambition. Finally, our solvency II ratio ended the quarter at 221%.

Speaker #2: What you can see, first of all, is that our top line momentum continued at the pace that is in line with 2025. Our internal growth is at 7%, with a split roughly 50-50 between price and volume.

Speaker #2: This is a very resilient level with well-contained market volatility at a consistently delivered strong operating capital generation. Let's move to P&C. On page A5, where you can see first of all that our top line momentum continued at the pace that is in line with 2025.

Speaker #2: As you can see in the further detailed pages, the growth across the P&C portfolio remains well diversified, maybe some standout contributors for this quarter you will see as an example that our platform businesses such as Allianz Partners and Direct have been both growing double-digit, we have a strong new business in Germany, and we have also selective growth in commercial where pricing meets our other rates.

Speaker #2: Our internal growth is at 7%, with a split roughly 50-50 between price and volume. As you can see in the further detailed pages, the gross across the P&C portfolio remains well diversified.

Speaker #2: Across the organization, we continue to focus on our growth triathlon, new customer growth, increased cross-selling, and churn reduction. Our underwriting profitability is excellent, with a combined ratio at 91%, supported by both retail and commercial.

Speaker #2: Maybe some standout contributors for this quarter, you will see as an example that our platform businesses such as Allianz Partners and Direct have been both growing double-digit.

Speaker #2: We have a strong new business in Germany, and we also have selective growth in Commercial where pricing meets our other rates. Across the organization, we continue to focus on our gross triathlon, new customer growth, increased cross-selling, and churn reduction.

Speaker #2: These outcomes reflect a broadly benign net-cut environment for the quarter, but more importantly, a robust underlying underwriting performance and an ongoing improvement in the expense ratio.

Speaker #2: Our underwriting profitability is excellent with a combined ratio at 91% supported by both retail and commercial. These outcomes reflect broadly benign net-cut environment for the quarter, but more importantly, a robust underlying underwriting performance and an ongoing improvement in the expense ratio.

Speaker #2: The sustained top line momentum and the further improved combined ratio drive our 11% operating profit growth, reaching an excellent 2.4 billion euro operating profit, the investment result is broadly flat.

Speaker #2: We also continue to leverage AI across the P&C value chain as we have been explaining also in the fourth quarter results. From marketing and distribution of new business through to claims management, so basically broadly, the main focus is on customer experience and also distinctiveness of our product offering, so that we can fuel our growth trajectory.

Speaker #2: The sustained top-line momentum and the further improved combined ratio drive our 11% operating profit growth, reaching an excellent €2.4 billion operating profit.

Speaker #2: The investment result is broadly flat. We also continue to leverage AI across the P&C value chain, as we have been explaining also in the fourth quarter results.

Speaker #2: A couple of examples maybe of what we have further tapped into during the first quarter. As an example, on Allianz Partners, we have onboarded several new large OEMs relationships where we support by which are fully supported by Agentic AI tools in particular on the roadside assistance side, which is significantly scaling our straight-through processing of claims.

Speaker #2: From marketing and distribution of new business through to claims management—so basically, broadly, the main focus is on customer experience and also the distinctiveness of our product offering.

Speaker #2: So that we can fuel our growth trajectory. A couple of examples maybe of what we have further tapped into during the first quarter. As an example, on Allianz Partners, we have onboarded several new large OEMs relationship where we support by which are fully supported by Agentic AI tools in particular on the roadside assistance side, which is significantly by significantly scaling our straight-through processing of claims.

Speaker #2: In Italy, in France, and Spain as an example, we have AI tools that are supporting our agents to provide training or real-time support in assessing the risk via AI experts and this is boosting customer service and productivity at the point of sales.

Claire-Marie Coste-Lepoutre: Onboarded several new large OEMs relationship where we support, which are fully supported by agentic AI tools, in particular on the roadside assistance side, which is significantly scaling our straight-through processing of claims. In Italy, in France, and Spain as an example, we have AI tools that are supporting our agents to provide training or real-time support in assessing the risk via AI expert, this is boosting customer service and productivity at the point of sale. Similarly, in commercial, our submission hub allows for a much faster and higher quality answers to submission via preparation, enrichment, and best allocation to underwriter. This is generating significant impact both in response time and conversion rate. Overall, I'm very pleased with the P&C performance this quarter. We see good growth, excellent, and robust underwriting profitability across both retail and commercial.

Speaker #2: Similarly, in commercial, our submission hub allows for a much faster and higher quality answers to submission via preparation and enrichment and best allocation to underwriters.

Speaker #2: This is generating significant impact both in response time and conversion rate. So overall, I'm very pleased with the P&C performance this quarter. We see good growth, excellent and robust underwriting profitability across both retail and commercial.

Speaker #2: Similarly, in commercial, our submission up allows for a much faster and higher quality answers to submission via preparation and enrichment and best allocation to underwriters.

Speaker #2: Let's move to life and health on page A6. Where the underlying performance of the segment is, from my perspective, considerably stronger than the headline momentum might suggest.

Speaker #2: The new business comparison versus previous year is impacted by a very high base in the first quarter 2025, which included large tickets in Germany, strong Thailand sales ahead of regulatory changes in medical on medical riders, and the UniCredit GV business, which has been disposed in the second half of 2025.

Speaker #2: Let's move to Life and Health. On page A6, where the underlying performance of the segment is, from my perspective, considerably stronger than the headline momentum might suggest.

Claire-Marie Coste-Lepoutre: Let's move to life and health on page 8 where the underlying performance of the segment is, from my perspective, considerably stronger than the headline momentum might suggest. The new business comparison versus previous year is impacted by a very high base in Q1 2025, which included large tickets in Germany, strong Thailand sales ahead of regulatory changes on medical riders, and the UniCredit Allianz Vita business, which has been disposed in H2 2025. Adjusted for those impacts and the FX effects, the underlying new business volumes are slightly up, and the new business value is broadly stable with an attractive mix with protection, health, and unit-linked contributing to 60%.

Speaker #2: Adjusted for those impacts and the FX effects, the underlying new business volumes are slightly up and the new business value is broadly stable with an attractive mix with protection health and unit link contributing to 60%.

Speaker #2: To illustrate a bit some of those strong developments versus last year, in Italy as an example, the new business value is up net of minorities and including associated fees with strong unit link growth through financial advisors.

Speaker #2: New business in Asia excluding Thailand is up 12% and we see a continued strong momentum in health Germany with a continuing double-digit new business value growth.

Claire-Marie Coste-Lepoutre: To illustrate a bit, some of those strong developments versus last year, in Italy as an example, the new business value is up net of minorities and including associated fees with strong unit link growth through financial advisors. New business in Asia, excluding Thailand, is up 12%, and we see a continued strong momentum in health Germany with a continuing double-digit new business value growth. On the life CSM development, we can see that despite the lower new business value, the expected in-force return still exceeded the release, generating a healthy 1.7 normalized growth. Our life operating profit was impacted by FX and the UniCredit and Bajaj, the UniCredit Vita and Bajaj disposals. Adjusting for this, the underlying life profit was slightly up.

Speaker #2: On the live CSM development, we can see that despite the lower new business value, the expected in-force return still exceeded the release generating a healthy 1.7 normalized growth.

Speaker #2: New business in Asia, excluding Thailand, is up 12%, and we see continued strong momentum in Health Germany with continuing double-digit new business value growth.

Speaker #2: Our life operating profit was impacted by FX and the UniCredit and Bajaj the UniCredit Vita and Bajaj disposals, adjusting for these the underlying life profit was slightly up.

Speaker #2: On the live CSM development, we can see that despite the lower new business value, the expected in-force return still exceeded the release, generating a healthy 1.7 normalized growth.

Speaker #2: So overall, the life performance has been resilient in the context of a demanding comparison with last year perimeter changes and the market volatility seen in the quarter.

Speaker #2: Our Life operating profit was impacted by FX and the UniCredit Vita and Bajaj disposals. Adjusting for these, the underlying Life profit was slightly up.

Speaker #2: We remain focused on achieving on achieving attractive risk return risk return profile on our new business and we are confident we will deliver in line with our capital market day targets.

Speaker #2: So overall, the life performance has been resilient in the context of a demanding comparison with last year perimeter changes and the market volatility seen in the quarter.

Claire-Marie Coste-Lepoutre: Overall, the life performance has been resilient in the context of a demanding comparison with last year, perimeter changes, and the market volatility seen in the quarter. We remain focused on achieving attractive risk return profile on our new business, and we are confident we will deliver in line with our capital market day targets. Moving to page 8 and the asset management business. There we had an outstanding start to the year against volatile capital markets. Our net inflows in Q1 reached a record level for a Q1 with strong growth at both PIMCO and AGI. Overall, the net inflows of EUR 45 billion correspond to an annualized organic growth rate of 9% diversified across regions and asset classes.

Speaker #2: Moving to page A7 and the asset management business, there we had an outstanding start to the year against volatile capital markets. Our net inflows in the first quarter reached a record level for a first quarter with strong growth at both PIMCO and AGI.

Speaker #2: We remain focused on achieving an attractive risk-return profile on our new business, and we are confident we will deliver in line with our Capital Market Day targets.

Speaker #2: Overall, the net inflows of 45 billion euros correspond to an annualized organic growth rate of 9% diversified across regions and asset classes. Some illustration of these at PIMCO, we see continued strong structure beyond the more traditional fixed income strategies for its expanding active ETF suite and broad-based demand also across Asia and Europe.

Speaker #2: Overall, the net inflows of 45 billion euros correspond to an annualized organic growth rate of 9% diversified across regions and asset classes. Some illustration of these, at PIMCO we see continued strong structure beyond the more traditional fixed income strategies for its expanding active ETF suite and broad-based demand also across Asia and Europe.

Speaker #2: At AGI, we see inflows across multi-assets, fixed income, equities, and alternatives with new mandate wins in Asia, in particular. The product proposition of our asset managers continues to be strongly supported by our value creation for our customers via our investment performance with at least 90% of outperformance on a one and three-year basis across our third-party AOM.

Claire-Marie Coste-Lepoutre: Some illustration of this, at PIMCO, we see continued strong traction beyond the more traditional fixed income strategies for its expanding active ETF suite and broad-based demand also across Asia and Europe. At AGI, we see inflows across multi-asset, fixed income, equities, and alternatives with new mandate wins in Asia in particular. The product proposition of our asset managers continues to be strongly supported by our value creation for our customers via our investment performance with at least 90% of outperformance on a 1 and 3-year basis across our third-party AUM. We generated EUR 2.2 billion of revenues, up 12% FX adjusted, driven by the growth of our asset under management.

Speaker #2: At AGI, we see inflows across multi-assets, fixed income, equities, and alternatives, with new mandate wins in Asia in particular. The product proposition of our asset managers continues to be strongly supported by our value creation for our customers via our investment performance, with at least 90% of outperformance on a one- and three-year basis across our third-party AOM.

Speaker #2: We generated 2.2 billion of revenues up 12% at fixed adjusted driven by the growth of our asset under management. I'm also very pleased with the productivity focus at both asset managers that is evident in an excellent cost income ratio delivering more than 850 million of operating profit up 15% on an FX adjusted basis.

Speaker #2: It was a volatile period for capital markets in the first quarter and there was a lot of debate around topics such as private credit.

Claire-Marie Coste-Lepoutre: I'm also very pleased with the productivity focus at both asset managers that is evident in an excellent cost-income ratio, delivering more than EUR 850 million of operating profit, up 15% on an FX-adjusted basis. It was a volatile period for capital markets in Q1, and there was a lot of debate around topics, such as private credit. Overall, our asset management businesses have been selective and very mindful of liquidity considerations, even when growing their private and alternative offerings. Their focus in the alternative and private credit space is differentiated and focused around areas such as infrastructure or asset-backed finance. Overall, the current focus on credit and liquidity risk is a tailwind for our asset managers to continue to demonstrate the strength of their offering. Let's move to page 8, looking at our solvency ratio development.

Speaker #2: Overall, our asset management businesses have been selective and very mindful of liquidity considerations even when growing their private and alternative offerings. Their focus in the alternative and private credit space is differentiated and focused around the RIAs such as infrastructure or asset-backed finance.

Speaker #2: Overall, the current focus on credit and liquidity risk is a tailwind for our asset managers to continue to demonstrate the strength of their offerings.

Speaker #2: Let's move to page A8 looking at our solvency ratio development. Finance further emerged with a strong solvency ratio at 221% with a 2 percentage point increase versus year-end in a volatile market environment.

Speaker #2: I think on this page beyond the announced Bajaj share buyback and the usual dividend accrual effects, the additional interesting points for me are the fact that first of all we have a very contained market impact and secondly that we have a very consistent operating capital generation.

Claire-Marie Coste-Lepoutre: Allianz further emerged with a strong solvency ratio at 221% with a 2 percentage point increase versus year-end in a volatile market environment. I think on this page, beyond the announced Bajaj share buyback and the usual dividend accrual effects, the additional interesting points for me are the fact that first of all, we have a very contained market impact, and secondly, that we have a very consistent operating capital generation. Clearly, the underlying drivers of the solvency developments are very strong in the quarter with volatility. Let's move to page 9.

Speaker #2: So clearly, the underlying drivers of the solvency developments are very strong in a quarter with volatility. Let's move to page A9. Here I'm very pleased actually to announce that from this quarter onwards we will be including in the backup slides actually additional disclosure providing insights into the performance of our health and protection business.

Speaker #2: As a reminder, we set we set out at our we set out a target at the capital market day to grow the operating profit of protection and health by a CAGR of 7% through to 2027 to reach a 2.2 billion operating profit by by by then.

Claire-Marie Coste-Lepoutre: Here I'm very pleased actually to announce that from this quarter onwards, we will be including in the backup slides, actually additional disclosure providing insights into the performance of our health and protection business. As a reminder, we set out a target at the capital market day to grow the operating profit of protection and health by a CAGR of 7% through to 2027 to reach a EUR 2.2 billion operating profit by then. Our protection and health business is currently split across P&C and life segments with different product features, leading to different technical accounting treatments. Our disclosure will develop over time, it is designed to give more insight into the components of profit and the nature of the products we are selling.

Speaker #2: Our protection and health business is currently split across P&C and life segments with different product features leading to different technical accounting treatments. Our disclosure will will develop over time but it is designed to give more insight into the components of profits and the nature of the products we are selling.

Speaker #2: On the left-hand side of this slide, we provide some more details on the products in the value segments. This is a broad offering with some key highlights highlight products like our new dental offering in health Germany or our health travel coverage at Allianz Partners both being accounted in different parts of the split between short-term and long-term product.

Claire-Marie Coste-Lepoutre: On the left-hand side of this slide, we provide some more details on the products in the value segments. This is a broad offering with some key highlights, highlight products like our new dental offering in Health Germany or our health travel coverage at Allianz Partners, both being accounted in different parts of the split between short-term and long-term product. Across the protection and health businesses, we combine a strong global oversight on underwriting standards, product, and pricing with customization to local market needs. In particular, we have global coordination for our health business through Allianz Digital Health. This was showcased at our Allianz Insights session of June 2025, and a good reference material from my perspective if you want to get more insights on our health business.

Speaker #2: Across the protection and health businesses, we combined a strong global oversight on underwriting standards product and pricing with customization to local market needs. In particular, we have global coordination for our health business through Allianz Digital Health.

Speaker #2: This was showcased at our Allianz Insights session of June 2025 and a good reference material for my perspective if you want to get more insights on our health business.

Speaker #2: All our businesses have initiative in place as you can see in the middle of this of this page to further grow and to strengthen technical excellence.

Speaker #2: Some examples of that would be as an example that they cover a broad increased use of digital channels for selling and customer servicing. The use of AI to increase the ability of agents to more quickly educate themselves and to better sell our health proposition.

Claire-Marie Coste-Lepoutre: All our businesses have initiative in place, as you can see in the middle of this, of this page, to further grow and to strengthen technical excellence. Some examples of that would be, as an example, that they cover a broad increased use of digital channels for selling and customer servicing, the use of AI to increase the ability of agents to more quickly educate themselves and to better sell our health proposition, and more systematically leveraging cross-sell opportunities to sell health alongside our P&C products. Let's move to page 18. That is actually showing some financial highlights for the business and also illustrate the new format we will use going forward in the backup. You can see the very good momentum in the operating profit, growing 10% year-on-year, adjusted for the disposal of the UniCredit JV.

Speaker #2: And more systematically leveraging cross-sell opportunities to sell health alongside our P&C products. Let's move to page A10. That is actually showing some financial highlights for the business and also illustrate the new format we will use going forward in the backup.

Speaker #2: You can see the very good momentum in the operating profit growing 10% year on year adjusted for the disposal of the UniCredit GV. On profitability, you can see a healthy combined ratio of around 93% for the short-term business booked within the P&C business driven in particular by attractive margins in health.

Speaker #2: For the business booked in life and health, our new business and new business margin are at a good level but impacted by some scope effects in particular the disposal of the UniCredit GV the lower level of sales of medical riders in Asia and some additional tax on health insurance premiums in France.

Claire-Marie Coste-Lepoutre: On profitability, you can see a healthy combined ratio of around 93% for the short-term business booked within the P&C business, driven in particular by attractive margins in health. For the business booked in life and health, our new business and new business margin are at a good level, but impacted by some scope effects, in particular the disposal of the UniCredit JV, the lower level of sales of medical riders in Asia, and some additional tax on health insurance premiums in France. The normalized CSM growth of around 1.5% for the long-term business is healthy, and we would expect the business to deliver full year normalized growth at least in 9, in line with the whole life segment. Overall, the health and protection market is a huge market with significant growth potential.

Speaker #2: The normalized CSM growth of around 1.5% for the long-term business is healthy and we would expect the business to deliver full year normalized growth at least in line with the with the role life segment.

Speaker #2: So overall, the health and protection market is a huge market with significant growth potential also as we see selective disengagements of states in that space.

Speaker #2: We see strong appetite for our products also supported by our ecosystems we are very well positioned and very confident in our ability to meet our capital market day targets here too.

Speaker #2: Let me now recap on page A11. So overall, we had a strong start into the year. If you normalize for the positive effect of the sale of our stake in our GVs with Bajaj we deliver an excellent 9% core EPS growth which is at the high end of our capital market day commitments.

Claire-Marie Coste-Lepoutre: As we see selective disengagements of states in that space, we see strong appetite for our products, also supported by our ecosystem. We are very well-positioned and very confident in our ability to meet our capital market day targets here, too. Let me now recap on page 11. Overall, we had a strong start into the year. If you normalize for the positive effect of the sale of our stake in our JVs with Bajaj, we deliver an excellent 9% core EPS growth, which is at the high end of our capital market day commitment. Our productivity and resilience focus is as well visible in our numbers. I can thus confidently reaffirm our outlook for the full year at EUR 17.4 billion ± EUR 1 billion.

Speaker #2: Similarly, our productivity and resilience focus is as well well visible in our numbers. I can just confidently reaffirm our outlook for the full year at 17.4 billion plus minus 1 billion euro.

Speaker #2: And before I hand over back, Franck, , I would like to thank all our employees for their work and their engagement in delivering our results.

Speaker #2: This quarter again. With that, I thank you all for your attention and I hand over back for questions, Franck.

Speaker #1: Thank you, Claire-Marie. Before we start our Q&A session, let me briefly recap the housekeeping. If you want to ask a question, press star five if you have joined via telephone.

Claire-Marie Coste-Lepoutre: Before I hand over back, Frank, I would like to thank all our employees for their work and their engagement in delivering our results this quarter again. With that, I thank you all for your attention, and I hand over back for questions. Frank?

Speaker #1: Or press the talk request button on the web audio call. If you are on an IP-based telephone, this may cause technical problems for you.

Frank Stoffel: Thank you, Claire-Marie. Before we start our Q&A session, let me briefly recap the housekeeping. If you want to ask a question, press star five if you have joined via telephone, or press the Talk Request button on the web audio call. If you are on an IP-based telephone, this may cause technical problems for you. If this is the case, please email media.contact@allianz.com and we can assist you with your setup, or we can take your question and ask it on your behalf. Let's wait a few moments for the questions. Okay, a question has reached us via email. It's from Stephan Kahl at Bloomberg, and we will read it out on your behalf. Stephan is asking: How important is Asia Pacific for Allianz's growth ambitions in insurance? Does the company pursue any deals in the region, particular inorganic growth?

Speaker #1: If this is the case, please email media.contact@allianz.com and we can assist you with your setup. Or we can take your question and ask it on your behalf.

Speaker #1: Just with a few moments for the questions. Okay, a question has reached us via email. It's from Stefan Karl at Bloomberg. And we will I will read it out on your behalf.

Speaker #1: Stefan is asking, how important is Asia Pacific for Allianz's growth ambitions in insurance? Does the company pursue any deals in the region, particularly inorganic growth?

Speaker #2: So thank you very much. Franck, for that first question. So our our M&A focus as we as we as we have mentioned is is a long I would say three lines, right?

Speaker #2: The first one is looking at P&C. And this looking at making sure we are at the right scale in the in the markets. And and we need to understand markets in the broad sense of the term.

Claire-Marie Coste-Lepoutre: Thank you very much, Frank, for that first question. Our M&A focus, as we have mentioned, is along, I would say, 3 lines, right. The first one is looking at P&C, and is looking at making sure we are at the right scale in the markets. We need to understand markets in the broad sense of the term, where we are not in the top 3 or top 5, where we definitely need the scale to be capable to operate our machine, we believe, and to gain the traction we want to gain. An interesting development from my perspective along those lines is that last year we have been looking at multiple M&A options.

Speaker #2: Where we are not in the top three or top five where we definitely need the scale to be capable to operate our machine we believe and to to gain the traction we we want to to gain.

Speaker #2: And an interesting development from my perspective along those lines is that last year we have been looking at multiple M&A options. And what was clear is that we have an ability to grow organically that is very strong and sometimes is not really not making sense against other other options in the markets that are offered that are definitely too expensive versus what we are capable of delivering ourselves.

Speaker #2: We generated €2.2 billion of revenues, up 12% at fixed adjusted, driven by the growth of our assets under management. I'm also very pleased with the productivity focus at both asset managers, which is evident in an excellent cost-income ratio, delivering more than €850 million of operating profit, up 15% on an FX-adjusted basis.

Speaker #2: The second angle is is the geographic angle. So typically Southeast Asia will be one in terms of further rebalancing our our geographical distribution across across markets.

Claire-Marie Coste-Lepoutre: What was clear is that we have an ability to grow organically that is very strong, and sometimes is really not making sense against other options in the market that are offered that are definitely too expensive versus what we are capable of delivering ourselves. The second angle is the geographic angle. Typically Southeast Asia will be one in terms of further rebalancing our geographical distribution across markets. Southeast Asia is a prominent one from that angle. You know that as well from what we have been looking at in Singapore in particular, historically. That's an important area of focus too. The last angle is more related to distribution in general.

Speaker #2: So Southeast Asia is a proeminent one from from that angle. And you know that as well from what we have been looking at in Singapore in particular historically.

Speaker #2: It was a volatile period for capital markets in the first quarter, and there was a lot of debate around topics such as private credit.

Speaker #2: Overall, our asset management businesses have been selective and very mindful of liquidity considerations even when growing their private and alternative offerings. Their focus in the alternative and private credit space is differentiated and focus around the RIAs such as infrastructure or asset-backed finance.

Speaker #2: But but that's an important area of focus too. And the last angle is more related to distribution distribution in general. So that's basically the way we are looking at at M&As across across our portfolio.

Speaker #2: And there is no thing in particular to be to be added. We don't comment on specific elements.

Speaker #2: Overall, the current focus on credit and liquidity risk is a tailwind for our asset managers to continue to demonstrate the strength of their offerings.

Speaker #1: Thank you, Claire-Marie. The next question comes from Tom Sims from Reuters. So Tom, your line is open.

Speaker #2: Let's move to page A8 looking at our solvency ratio development. Allianz further emerged with a strong solvency ratio at 221% with a 2 percentage point increase versus year-end in a volatile market environment.

Claire-Marie Coste-Lepoutre: That's basically the way we are looking at M&As across our portfolio. There is nothing in particular to be added. We don't comment on specific elements.

Speaker #3: Yes. Hello. Can you hear me?

Speaker #1: Loud and clear.

Speaker #3: Splendid. Thank you. Good morning. First question about artificial intelligence. Some big financial firms are hoping to get access to Anthropic's Mythus. Is Allianz one of them?

Frank Stoffel: Thank you, Claire-Marie. The next question comes from Tom Sims from Reuters. Tom, your line is open.

Speaker #3: And if so, when do you expect to be able to use it? And what preparations or precautions are you making if if you consider it some sort of a security concern?

Tom Sims: Yes. Hello, can you hear me?

Frank Stoffel: Loud and clear.

Tom Sims: Splendid. Thank you and good morning. First, a question about artificial intelligence. Some big financial firms are hoping to get access to Anthropic's Mythos. Is Allianz one of them? If so, when do you expect to be able to use it, and what preparations or precautions are you making, if you consider it some sort of a security concern? Second, a question about private credit. Forgive me if this is something that you've already elaborated on in detail in the past, but what exactly is your private credit exposure, and where exactly is that located? If you can quantify it in some way, and maybe whether you're seeing any redemptions at funds. Thank you.

Speaker #3: And second, a question about private credit. And forgive me if this is something that you've already elaborated on in detail in the past. But what exactly is your private credit exposure?

Speaker #3: And where exactly is that located? And if you can quantify it in some way. And maybe whether you're seeing any redemptions at at funds.

Speaker #3: Thank you.

Speaker #2: Sure. Maybe let me start with your second question, related so to private credit. I can I can refer to you as well you know and in our full year publication in the analyst presentation we have a page called C51 where we provide full transparency into our non-traded basically private debt portfolio.

Speaker #2: Our protection and health business is currently split across P&C and Life segments, with different product features leading to different technical accounting treatments. Our disclosure will develop over time, but it is designed to give more insight into the components of profits and the nature of the products we are selling.

Claire-Marie Coste-Lepoutre: Sure. Maybe let me start with your second question related so to private credit. I can refer to you as well, you know, in our full year publication in the analyst presentation, we have a page called C-51, where we provide full transparency into our non-traded, basically private debt portfolio, where you can see basically the way we are operating. Maybe before I elaborate on the structure of that portfolio, let me start with the fact that we have been operating in the private debt environment for many, many years.

Speaker #2: Where you where you can see basically the the way we are operating. And maybe before I elaborate on the structure of that portfolio, let me start with the fact that we have been operating in the private debt environment for many many years.

Speaker #2: On the left-hand side of this slide, we provide some more details on the products in the value segments. This is a broad offering, with some key highlights: highlight products like our new dental offering in Health Germany, or our health travel coverage at Allianz Partners, both being accounted in different parts of the split between short-term and long-term product.

Speaker #2: So for us it's an area where we feel comfortable to operate. And it's also an area where we feel comfortable to operate because when you think about basically the credit risk it's a it's a risk we know well and we understand well.

Speaker #2: We are the owner of PIMCO. We are also the owner of Allianz Trade. We which both are dealing extensively with credit risk. So that's an area we we we understand particularly well.

Claire-Marie Coste-Lepoutre: For us, it's an area where we feel comfortable to operate, and it's also an area where we feel comfortable to operate because when you think about basically the credit risk, it's a risk we know well and we understand well. We are the owner of PIMCO, we are also the owner of Allianz Trade. Which both are dealing extensively with credit risk. That's an area we understand particularly well. Now, if you look at the structure of our private debt portfolio across the Allianz group as displayed on this page C-51, you will see that a large part of that portfolio is actually very boring and very plain vanilla portfolio. More than almost 50% of that portfolio is real estate related.

Speaker #2: Now if you look at the structure of our private debt portfolio across the the Allianz group as displayed on this page C51. You will see that a large part of that portfolio is actually very boring and very plain vanilla portfolio.

Speaker #2: This was showcased at our Allianz Insight session of June 2025, and is a good reference material for my perspective if you want to get more insights on our health business.

Speaker #2: More than almost 50% of that portfolio is real estate related. As As an example, 27% of our portfolio will be retail mortgages where we expect actually pretty low return between three and four percent.

Speaker #2: All our businesses have initiative in place as you can see in the middle of this of this page to further grow and to strengthen technical excellence.

Speaker #2: So that's not aggressive type of returns we are expecting there. And those are retail mortgages. We are operating since many many years. Mainly in Germany and in the Benelux as an example.

Speaker #2: Some examples of that will be as an example that they cover a broad increased use of digital channels for selling and customer servicing. The use of AI to increase the ability of agents to more quickly educate themselves and to proposition.

Claire-Marie Coste-Lepoutre: As an example, 27% of our portfolio will be retail mortgages, where we expect actually pretty low return between 3% and 4%. That's not aggressive type of returns we are expecting there. Those are retail mortgages we are operating since many, many years, mainly in Germany and in the Benelux, as an example. We do have also in some infrastructure debts, and the infrastructure debts, they are actually also of low risks. They are more than 85% investment grade, and they are really long-dated infrastructure debts, most of them also with guaranteed coupon feature, which are really supporting the quality of the investment.

Speaker #2: Then we we do have also in some infrastructure debts. And the infrastructure debts they are actually also of low risks. They are more than 85% investment grade.

Speaker #2: And more systematically leveraging cross-sell opportunities to sell health alongside our P&C products. Let's move to page A10. That is actually showing some financial highlights for the business and also illustrates the new format we will use going forward in the backup.

Speaker #2: And they are really long dated infrastructure debts. Most of them also with with guaranteed guaranteed coupons feature which are really supporting the the quality of the of the investment.

Speaker #2: You can see the very good momentum in the operating profit, growing 10% year on year, adjusted for the disposal of the UniCredit GV. On profitability, you can see a healthy combined ratio of around 93% for the short-term business booked within the P&C business, driven in particular by attractive margins in health.

Speaker #2: We also do have a private placement part of our portfolio which is also almost exclusively exclusively investment grade which is highly diversified with more than 1,500 companies with a strong focus on the US and Europe.

Speaker #2: And that's almost exclusively managed by PIMCO. AGI and also also Voya. So the riskier part if you want of our non-traded debt portfolio is the middle market lending.

Speaker #2: For the business booked in life and health, our new business and new business margin are at a good level, but impacted by some scope effects—in particular, the disposal of the UniCredit GV, the lower level of sales of medical riders in Asia, and some additional tax on health insurance premiums in France.

Claire-Marie Coste-Lepoutre: We also do have a private placement part of our portfolio, which is also almost exclusively investment grade, which is highly diversified with more than 1,500 companies with a strong focus on the US and Europe. That's almost exclusively managed by PIMCO, AGI, and also Voya. The riskier part, if you want, of our non-traded debt portfolio is the middle market lending, where we expect also higher return commensurate to the slightly higher risk we are taking in that portfolio. Between 7% and 8%, that's what we expect. This is a portfolio that is extremely diversified and that we have been operating historically only with very few and selected partners we like.

Speaker #2: Where we expect also higher return commencerate to the slightly higher risk. We are taking in that in that portfolio. So between seven and eight percent.

Speaker #2: That's what we expect. And this is a portfolio that is extremely diversified. And that we have been operating historically only with very few and selected partners we like.

Speaker #2: The normalized CSM growth of around 1.5% for the long-term business is healthy, and we would expect the business to deliver full-year normalized growth at least in line with the whole life segment.

Speaker #2: And we have a dedicated way of operating of operating that portfolio which means usually we are the sole lenders on the on the risk.

Speaker #2: So overall, the health and protection market is a huge market with significant growth potential, also as we see selective disengagements of states in that space.

Speaker #2: So that we can operate in particular the workout is there is a need to operate the workout in a different way which is securing also the level of losses we are we are planning with.

Speaker #2: We see strong appetite for our products, also supported by our ecosystems. We are very well positioned and very confident in our ability to meet our Capital Market Day targets, tier two.

Claire-Marie Coste-Lepoutre: We have a dedicated way of operating that portfolio, which means usually we are the sole lenders on the risk so that we can operate, in particular the workout, if there is a need to operate the workout in a different way, which is securing also the level of losses we are planning with. Just to give you a sense of the quality of that portfolio. Historically, that portfolio has been operated with 20 bps loss experience, while we are pricing, so we are expecting in what we are pricing for more than 100 bps of loss experience.

Speaker #2: So just to give you a sense of the quality of that portfolio. So historically that portfolio has been operated with 20 bips loss experience.

Speaker #2: Let me now recap on page A11. So overall, we had a strong start into the year. If you normalize for the positive effect of the sale of our stake in our GVs with Bajaj, we deliver an excellent 9% core EPS growth which is.

Speaker #2: Why we are pricing. So we are expecting in what we are pricing for more than 100 100 bips of of loss loss experience. So and at this point in time we don't see we don't see new movements or relevant movements to be to be mentioned that we have experienced in the first quarter.

Speaker #2: The high hand of our capital market day commitments. Similarly, our productivity and resilience focus is as well well visible in our numbers. I can just confidently reaffirm our outlook for the full year at €17.4 billion, plus or minus €1 billion.

Speaker #2: So there is no deviation if you want. This is what I have communicated at your end when it comes to to that portfolio. And any further details you would want to to go into for for that portfolio please don't hesitate.

Speaker #2: And before I hand over back, Frank, I would like to thank all our employees for their work and their engagement in delivering our results.

Claire-Marie Coste-Lepoutre: At this point in time, we don't see, we don't see new movements or relevant movements to be mentioned that we have experienced in Q1. There is no deviation, if you want. This is what I have communicated at your end when it comes to that portfolio. Any further details you would want to go into for that portfolio, please don't hesitate. We are happy to answer. Now, coming to your question on Anthropic. Indeed, you're right, we have a specific partnership with Anthropic that cover a number of elements.

Speaker #2: We are happy to happy to answer. Now coming to your question on Anthropic. So indeed you're right. We have we have a specific partnership with Anthropic that cover a number of of elements.

Speaker #2: This quarter again. With that, I thank you all for your attention and I hand over back for questions, Frank.

Speaker #1: Thank you, Claire-Marie. Before we start our Q&A session, let me briefly recap the housekeeping. If you want to ask a question, please press star five if you have joined via telephone.

Speaker #2: And and please understand that we are not in a position to comment on what are the features of of our what are the specific feature of our relationship with with Anthropic.

Speaker #1: Or press the talk request button on the web audio call. If you are using an IP-based telephone, this may cause technical problems for you. If this is the case, please email media.contact@allianz.com and we can assist you with your setup.

Speaker #2: So we are not in a position to comment. But maybe what I can add to your question is that we are extremely engaged as a as a group on on managing monitoring understanding the cyber risk.

Claire-Marie Coste-Lepoutre: Please understand that we are not in a position to comment on what are the features of what are the specific feature of our relationship with Anthropic. We are not in a position to comment. Maybe what I can add to your question is that we are extremely engaged as a group on managing, monitoring, understanding the cyber risk. Clearly, cyber risk are evolving extremely fast. We are developing option solutions constantly, and we are also engaging constantly with the best possible providers and peers to be able to basically operate and ensure that we are well coping with that raising risk environment.

Speaker #2: Clearly cyber risk are evolving extremely fast. So. So we are we are developing option solutions constantly. And we are also engaging constantly with the best possible providers and peers to be able to basically operate and ensure that we are well well coping with that raising risk environment.

Speaker #1: Or, we can take your question and ask it on your behalf. Just a few moments for the questions. Okay, a question has reached us via email.

Speaker #1: It's from Stefan Karl at Bloomberg. And I will read it out on your behalf. Stefan is asking, how important is Asia Pacific for Allianz's growth ambitions in insurance?

Speaker #3: Okay. Thanks. That sort of sounds like you're testing it now. Is that the right assumption?

Speaker #2: I cannot comment on on Anthropic. Sorry.

Speaker #3: Okay. Okay. Okay. Thank you very much.

Speaker #1: Does the company pursue any deals in the region, particularly inorganic growth?

Speaker #1: Thank you Tom. Our next question comes from Susanne Scheer from Handelsblatt. Susanne your line is open.

Tom Sims: Okay, thanks. That sort of sounds like you are testing it now. Is that the right assumption?

Speaker #2: So thank you very much. Frank, for that first question. So our our M&A focus as we as we as we have mentioned is is a long, I would say, three lines, right?

Speaker #4: Good morning. Can you hear me?

Claire-Marie Coste-Lepoutre: I cannot comment on Anthropic. Sorry.

Speaker #1: Loud and clear.

Tom Sims: Okay. Okay, thank you very much.

Speaker #4: Good. There was one interesting question at the shareholders meeting. Namely how you want to measure whether investments in AI and digitalization will pay off in the future.

Speaker #2: The first one is looking at P&C. And this is looking at making sure we are at the right scale in the markets. And we need to understand markets in the broad sense of the term.

Frank Stoffel: Thank you, Tom. Our next question comes from Susanne Scheer from Handelsblatt. Susanne, your line is open.

Frank Stoffel: Thank you, Tom. Our next question comes from Susanne Schier from Handelsblatt. Susanne, your line is open.

Speaker #2: Where we are not in the top three or top five, where we definitely need the scale to be capable to operate our machine, we believe, and to to gain the traction we we want to to gain.

Speaker #4: Could you please give a little bit more insight on that? And a second question regarding cyber. Why did you decide to give the commercial business to Coalition?

Susanne Scheer: Good morning. Can you hear me?

Susanne Schier: Good morning. Can you hear me?

Frank Stoffel: Loud and clear.

Susanne Scheer: Good. There was one interesting question at the shareholders meeting, namely how you want to measure whether investments in AI and digitalization will pay off in the future. Could you please give a little bit more insight on that? A second question regarding cyber. Why did you decide to give the commercial business to Coalition? Is the segment not attractive enough for Allianz to operate it on your own? Thank you.

Susanne Schier: Good. There was one interesting question at the shareholders meeting, namely how you want to measure whether investments in AI and digitalization will pay off in the future. Could you please give a little bit more insight on that? A second question regarding cyber. Why did you decide to give the commercial business to Coalition? Is the segment not attractive enough for Allianz to operate it on your own? Thank you.

Speaker #2: An interesting development from my perspective along those lines is that last year we have been looking at multiple M&A options. And what was clear is that we have an ability to grow organically that is very strong, and sometimes it is really not making sense against other options in the markets that are offered, that are definitely too expensive versus what we are capable of delivering ourselves.

Speaker #4: Is the segment not attractive enough for Allianz to operate it on on your own? Thank you.

Speaker #2: Thank you very much Suzanne. Let me maybe start with your second question regarding Coalition or the partnership with Coalition. So I want to start first by being very clear that we have not sold our cyber business.

Speaker #2: The second angle is the geographic angle. So, typically, Southeast Asia will be one. In terms of further rebalancing our geographical distribution across markets.

Speaker #2: We have entered into a partnership with Coalition. Which basically is bringing benefits to both partners and a strong value proposition to our customers. It allows greater capacity to offer these important coverage which we are convinced is a very important risk we need to provide support towards or against to support our customers.

Claire-Marie Coste-Lepoutre: Thank you very much, Susanne. Let me maybe start with your second question regarding Coalition or the partnership with Coalition. I want to start first by being very clear that we have not sold our cyber business. We have entered into a partnership with Coalition, which basically is bringing benefits to both partners and a strong value proposition to our customers. It allows greater capacity to offer this important coverage, which we are convinced is a very important risk. We need to provide support towards or against to support our customers. As you know, this is a risk that is extremely technical and that is also extremely fast evolving.

Speaker #2: So Southeast Asia is a pro-eminent one from from that angle. And you know that as well from what we have been looking at in Singapore in particular, historically.

Speaker #2: This is but as you know this is a risk that is extremely technical and that is also extremely fast evolving. And so we have decided to partner with Coalition which is well known for its excellent technical expertise and service capabilities in the cyberspace.

Speaker #2: And there is nothing in particular to be added. We don't comment on specific elements.

Speaker #2: Which includes as an example best in class underwriting based on sophisticated stress assessment that they have a proprietary and quite distinctive way of of doing.

Speaker #1: Thank you, Claire-Marie. The next question comes from Tom Sims from Reuters. So, Tom, your line is open.

Speaker #2: So what we have decided to do is actually we have decided to delegate the underwriting under certain conditions to Coalition. But the business is actually underwritten on our own balance sheet.

Claire-Marie Coste-Lepoutre: We have decided to partner with Coalition, which is well known for its excellent technical expertise and service capabilities in the cyber space, which includes, as an example, best-in-class underwriting, based on sophisticated stress assessments that they have a proprietary and quite distinctive way of doing. What we have decided to do is actually we have decided to delegate the underwriting under certain conditions to Coalition, but the business is actually underwritten on our own balance sheet. This is a partnership we are very happy to engage into and to sign, but we expect it to last at least 10 years. From our perspective, definitely, this partnership is enhancing the expected profitability and the scalability of the Allianz Commercial offering associated to cyber.

Speaker #3: Yes. Hello. Can you hear me?

Speaker #1: Loud and clear.

Speaker #3: Splendid. Thank you. Good morning. First, a question about artificial intelligence. Some big financial firms are hoping to get access to Anthropic's Mythos. Is Allianz one of them?

Speaker #2: And this is a partnership we are very happy to engage into and to sign. But and we expect it to last at least ten years.

Speaker #2: So from our perspective definitely this partnership is enhancing the expected profitability and the scalability of the Allianz commercial offering associated to cyber. Also we expect this this extension to support in reducing volatility.

Speaker #3: And if so, when do you expect to be able to use it? And what preparations or precautions are you making, if you consider it some sort of a security concern?

Speaker #2: And on the side of Coalition they clearly benefit from the access to our to our network which is extensive obviously across our geographies. They also benefit from our brands and also from our various expertise when it comes to underwriting underwriting capabilities.

Speaker #3: And where exactly is that located? And if you can quantify it in some way. And maybe whether you're seeing any redemptions at at funds.

Claire-Marie Coste-Lepoutre: We expect this extension to support in reducing volatility. On the side of Coalition, they clearly benefit from the access to our network, which is extensive, obviously, across our geographies. They also benefit from our brands and also from our values expertise when it comes to underwriting capabilities. We really think it's a very good marriage of basically partnership. Allianz is clearly providing a capacity to support the growth in a very important market and to be there for its customer on that dimension as well. Then maybe on your first question on AI return. The way we are leveraging AI currently is as I mentioned, right?

Speaker #2: So we really think it's a very good marriage of basically partnership. And Allianz is is clearly providing capacity to support the growth in a very important market and to be there for its customer on on that that dimension as well.

Speaker #3: Thank you.

Speaker #2: Sure. Maybe let me start with your second question, related so to private credit. I can I can refer to you as well. You know, and in our full year publication in the analyst presentation, we have a page called C51 where we provide full transparency into our non-traded basically private debt portfolio.

Speaker #2: Then maybe on your first question on AI AI return. So so the way we are leveraging AI currently is as I mentioned right. So so basically we are leveraging AI all along the value chain with the with the view of enhancing our processes and also the customer experience and the quality or the distinctiveness of the products we are offering to our customers.

Speaker #2: Where you can see basically the way we are operating. And maybe before I elaborate on the structure of that portfolio, let me start with the fact that we have been operating in the private debt environment for many, many years.

Speaker #2: So for us, it's an area where we feel comfortable to operate. And it's also an area where we feel comfortable to operate because, when you think about basically the credit risk, it's a risk we know well and we understand well.

Speaker #2: So it it allows also to do hyper hyper personalization of certain features which are adding a lot of value to the to the customer experience.

Claire-Marie Coste-Lepoutre: Basically, we are leveraging AI all along the value chain with the view of enhancing our processes and also the customer experience and the quality or the distinctiveness of the products we are offering to our customers. It allows also to do hyper-personalization of certain features, which are adding a lot of value to the customer experience. While we are looking at multiple KPIs when it comes to the performance of our business, also how more productive the business is becoming and those type of dimension, AI is just one component out of it.

Speaker #2: We are the owner of PIMCO. We are also the owner of Allianz Trade, which both are dealing extensively with credit risk. So that's an area we understand particularly well.

Speaker #2: So so while we are we are looking at multiple KPIs when it comes to the to the performance of of our business. Also how more productive the business is becoming and those type of dimension.

Speaker #2: Now, if you look at the structure of our private debt portfolio across the Allianz Group, as displayed on this page, C51, you will see that a large part of that portfolio is actually very boring and very plain vanilla portfolio.

Speaker #2: AI is just one component out of it. So so we are we are looking at it comprehensively I would say. And not in a in a standalone isolated manner because that would not really make sense to us against our overall overall ambition.

Speaker #2: More than almost 50% of that portfolio is real estate related. As an example, 27% of our portfolio will be retail mortgages, where we expect actually pretty low return between three and four percent.

Speaker #1: Thank you Suzanne. The next question comes sorry it comes from Florian Müller Financial Times. Florian your line is open.

Speaker #2: So that's not an aggressive type of returns we are expecting there. And those are retail mortgages. We are operating since many, many years mainly in Germany and in the Benelux, as an example.

Claire-Marie Coste-Lepoutre: We are looking at it comprehensively, I would say, and not in a standalone isolated manner, because that would not really make sense to us against our overall ambition.

Speaker #5: Thank you so much for taking my question. It is on the impact of the conflict in the Middle East slash Iran war. Did Allianz have any any any impact and how do you see it going forward in your business?

Speaker #2: Then we do have also in some infrastructure debts, and the infrastructure debts—they are actually also of low risk. They are more than 85% investment grade.

Frank Stoffel: Thank you, Susanne. The next question comes from Florian Mueller, Financial Times. Florian, your line is open.

Speaker #2: And they are really long dated infrastructure debts. Most of them also with with guaranteed guaranteed coupons feature, which are really supporting the the quality of the of the investment.

Speaker #5: Where exactly do you see the biggest risks? And what do you do in order to mitigate them? Thank you.

Florian Mueller: Thank you so much for taking my question. It is on the impact of the conflict in the Middle East/Iran war.

Florian Mueller: Thank you so much for taking my question. It is on the impact of the conflict in the Middle East/Iran war. Did Allianz have any impact? How do you see it going forward in your business? Where exactly do you see the biggest risks, and what do you do in order to mitigate them? Thank you.

Speaker #2: Thanks a lot. So indeed I think when it comes so maybe like starting from from the point of the situation in the in the Middle East.

Speaker #2: We also do have a private placement part of our portfolio, which is also almost exclusively exclusively investment grade, which is highly diversified with more than 1,500 companies with a strong focus on the US and Europe.

Florian Mueller: Did Allianz have any impact? How do you see it going forward in your business? Where exactly do you see the biggest risks, and what do you do in order to mitigate them? Thank you.

Speaker #2: We we don't own direct operations in the Middle East and we don't have operating entities based in the Middle East. So clearly our exposure to the Middle East is much more related to our global lines of business.

Speaker #2: And that's almost exclusively managed by PIMCO, AGI, and also Voya. So the riskier part, if you want, of our non-traded debt portfolio is the middle market lending.

Claire-Marie Coste-Lepoutre: Thanks a lot. Indeed, I think, when it comes, maybe, like, starting from the point of the situation in the Middle East, we don't own direct operations in the Middle East, and we don't have operating entities based in the Middle East. Clearly our exposure to the Middle East is much more related to our global lines of business. What we see is that, first of all, there was quite a good risk management and anticipation of raising stress associated to the Middle East, related to those various entities. Allianz Partners, Allianz Trade, and AGCS, Allianz Commercial, in particular.

Speaker #2: And what we see is that first of all there was quite a good risk management and anticipation of raising stress associated to the Middle East related Allianz partners Allianz trade and and AGCS Allianz commercial in particular.

Speaker #2: Where we expect also higher return, commencerate to the slightly higher risk. We are taking in that in that portfolio. So between seven and eight percent.

Speaker #2: That's what we expect. And this is a portfolio that is extremely diversified, and that we have been operating historically only with very few and selected partners we like.

Speaker #2: And what we have experienced in terms of in terms of losses was actually small and really well within our risk appetite and the type of exposure we we are ready to take.

Speaker #2: And we have a dedicated way of operating that portfolio, which means usually we are the sole lenders on the risk.

Speaker #2: So I think from a direct standpoint there is not much to highlight as being as being a core concern to us. We are we are what where we are more exposed is definitely more to the macroeconomic development and basically to the consequence of the situation in the Middle East.

Speaker #2: So that we can operate—in particular, the workout—is there is a need to operate the workout in a different way, which is securing also the level of losses we are planning with.

Claire-Marie Coste-Lepoutre: What we have experienced in terms of in terms of losses was actually small and really well within our risk appetite and the type of exposure we are ready to take. I think from a direct standpoint, there is not much to highlight as being a core concern to us. Where we are more exposed is definitely more to the macroeconomic development and basically to the consequence of the situation in the Middle East. For the first part of the year, actually, even rising interest rate and a bit of a stronger U.S. dollar was a positive to our numbers.

Speaker #2: So just to give you a sense of the quality of that portfolio. So historically, that portfolio has been operated with 20 bps loss experience.

Speaker #2: For the first part of the year actually even rising interest rate and a bit of a stronger US dollar was a positive to our numbers.

Speaker #2: Why we are pricing. So we are expecting in what we are pricing for more, 100 bps of loss experience. So, and at this point in time, we don't see, we don't see new movements or relevant movements to be mentioned that we have experienced in the first quarter.

Speaker #2: But basically going forward I think the key critical items will be the management of these of these volatility in general where we feel well equipped with because we have strengthened our resilience.

Speaker #2: We are we have a strong solvency ratio and we have tightened our sensitivities. But as well related to inflation obviously and the fact that we will we will we are we are looking at the inflation trends as always I will say.

Speaker #2: So there is no deviation, if you want, versus what I have communicated at your end when it comes to that portfolio. And any further details you would want to go into for that portfolio, please don't hesitate.

Claire-Marie Coste-Lepoutre: Basically going forward, I think the key critical items will be the management of these of this volatility in general, where we feel well-equipped with because we have strengthened our resilience, we have a strong solvency ratio, and we have tightened our sensitivities. As well related to inflation, obviously, and the fact that we will, we will, we are looking at the inflation trends as always, I would say, but even with more accuracy as we speak, so that we can monitor and optimize and react as appropriate within our businesses.

Speaker #2: But even even with more more accuracy as as we speak. So that we can monitor and optimize and react as appropriate within our businesses.

Speaker #2: We are happy to happy to answer. Now, coming to your question on Anthropic. So indeed, you're right. We have we have a specific partnership with Anthropic that cover a number of of elements.

Speaker #5: Okay. Thank you.

Speaker #1: Thank you.

Speaker #2: Maybe maybe on what last item on inflation. So we are obviously monitoring ready to react as appropriate. But what I wanted to add which I think is a very important aspect as well is the fact that we are constantly working a lot on ways to minimize the effect of inflation in particular leveraging our ability as an example to tap into our platform business or into solve as an example that is providing opportunity for us to do to provide distinctive features in terms of absorption of inflation into the cost of claims as an example.

Speaker #2: And and please understand that we are not in a position to comment on what are the features of of our what are the specific feature of our relationship with with Anthropic.

Florian Mueller: Okay. Thank you.

Speaker #2: So we are not in a position to comment. But maybe what I can add to your question is that we are extremely engaged, as a group, on managing, monitoring, understanding the cyber risk.

Frank Stoffel: Thank you for-

Claire-Marie Coste-Lepoutre: Maybe on one last item on inflation. We are obviously monitoring, ready to react as appropriate. But what I wanted to add, which I think is a very important aspect as well, is the fact that we are constantly working a lot on ways to minimize the effect of inflation, in particular, leveraging our ability, as an example, to tap into our platform business or into Solve, as an example, that is providing opportunity for us to do to provide distinctive features in terms of absorption of inflation into the cost of claims, as an example.

Speaker #2: Clearly, cyber risks are evolving extremely fast. So, we are developing optional solutions constantly. And we are also engaging constantly with the best possible providers and peers, to be able to basically operate and ensure that we are well, well coping with that raising risk environment.

Speaker #2: So that's definitely a very important aspect on which we are we are always working but we have even further doubling as we speak together with the productivity dimensions which is a very important way of tackling also inflation beyond the steering and the reaction that we are ready to do obviously.

Speaker #2: And we are we have demonstrated we are good at doing in the past as well.

Claire-Marie Coste-Lepoutre: That's definitely very important aspect on which we are always working, but we are even further doubling as we speak, together with the productivity dimensions, which is a very important way of tackling also inflation beyond the steering and the reaction that we are ready to do, obviously, and we are, we have demonstrated we are good at doing in the past as well.

Speaker #1: Thank you. Our next question comes from Herbert Fromme Versicherungsmonitor. Herbert your line is open.

Speaker #3: Okay. Thanks. That sort of sounds like you're testing it now. Is that the right assumption?

Speaker #2: I cannot comment on Anthropic. Sorry.

Speaker #3: I have three questions. One is on page B10. You show that pricing for AGCS has gone down. Could you give a similar figure for the whole Allianz commercial group?

Speaker #3: Okay. Okay. Okay. Thank you. Thank you very much.

Speaker #1: Thank you, Tom. Our next question comes from Susanne Scheer from Handelsblatt. Susanne, your line is open.

Frank Stoffel: Thank you. Our next question comes from Herbert Fromme, Versicherungsmonitor. Herbert, your line is open.

Frank Stoffel: Thank you. Our next question comes from Herbert Fromme, Süddeutsche Zeitungr. Herbert, your line is open.

Speaker #3: Because AGCS of course is underwriting as part of Allianz commercial. The second question in November. Allianz partners announced that they would shed more than 500 jobs due to more use of AI.

Speaker #2: Good morning. Can you hear me?

Speaker #1: Loud and clear.

Herbert Fromme: I have three questions. One is, on page B-10, you show that pricing for AGCS has gone down. Could you give a similar figure for the whole Allianz Commercial group? Because AGCS, of course, underwriting is part of Allianz Commercial. Second question, in November, Allianz Partners announced that they would shed more than 1,500 jobs due to more use of AI. Has that been completed, and is that other initiatives in that respect expected from Allianz companies? The third question, you became a shareholder of Viridium, the runoff specialist in Germany last year, and in that connection, you mentioned in March 2025 that you might move portfolios, Allianz Life portfolios to Viridium. Is that in the making? Are those German portfolios or what other, what is it that you might move to Viridium?

Speaker #2: Good. There was one interesting question at the shareholders meeting. Namely, how you want to measure whether investments in AI and digitalization will pay off in the future.

Speaker #3: Has that been completed and is that other initiatives in that respect expected from Allianz companies? And the third question you became a shareholder of Viridium the runoff specialist in Germany.

Speaker #2: Could you please give a little bit more insight on that? And a second question regarding cyber: why did you decide to give the commercial business to Coalition?

Speaker #3: Last year and in that connection you mentioned in March 2025 that you might move portfolios Allianz live portfolios to Viridium. Is that in the in the making?

Speaker #2: Is the segment not attractive enough for Allianz to operate it on your own? Thank you.

Speaker #3: Are those German portfolios or what other what is it that you might move to Viridium?

Speaker #4: Thank you very much, Suzanne. Let me maybe start with your second question regarding Coalition or the partnership with Coalition. So, I want to start first by being very clear that we have not sold our cyber business.

Speaker #2: Thank you very much. Maybe starting with your with your question on overall rate change on the overall commercial portfolio. We are at plus 2 percent for the quarter.

Speaker #4: We have entered into a partnership with Coalition. Which basically is bringing benefits to both partners and a strong value proposition to our customers. It allows greater capacity to offer these important coverage, which we are convinced is a very important risk we need to provide support towards or against to support our customers.

Speaker #2: So actually it has increased a bit versus year end 2025. And that's actually also linked to the in particular to the mid-corp business where on the mid-corp business overall we are at plus 4 plus 4 percent in terms of rate change on renewal.

Claire-Marie Coste-Lepoutre: Thank you very much. Maybe starting with your question on overall rate change on the overall commercial portfolio. We are at +2% for the quarter. Actually it has increased a bit versus year-end 2025. That's actually also linked to the, in particular, to the MidCorp business, where on the MidCorp business overall, we are at +4% in terms of rate change on renewal. You can see that in the diversified book of Allianz Commercial, we have very different dynamics when it comes to the rate environment.

Speaker #2: So you can see that in the diversified book of of Allianz commercial we have very different very different dynamics when it comes to the rate environment.

Speaker #4: This is, but—as you know—this is a risk that is extremely technical and that is also extremely fast-evolving. And so, we have decided to partner with Coalition, which is well known for its excellent technical expertise and service capabilities in the cyberspace.

Speaker #2: Yeah.

Speaker #3: I didn't I didn't get the the sorry I didn't understand what point may where where did you get the increase from mainly?

Speaker #4: Which includes, as an example, best-in-class underwriting based on sophisticated stress assessment that they have a proprietary and quite distinctive way of doing.

Speaker #2: Mainly from the mid-corp portfolio. So within the mid-corp yeah mid-corp portfolio we are at plus 4. Across the book. Yeah. Now looking at Viridium.

Speaker #4: So what we have decided to do is, actually, we have decided to delegate the underwriting under certain conditions to Coalition. But the business is actually underwritten on our own balance sheet.

Speaker #2: So on your question on Viridium. So as you know we are the we are a shareholder of of Viridium. So we we have no direct influence when it comes to their strategy and what what they want to do in particular.

Herbert Fromme: I didn't get the, sorry, I didn't understand what point. Where did you get the increase from, mainly?

Claire-Marie Coste-Lepoutre: Mainly from the MidCorp portfolio. within the MidCorp.

Speaker #4: And this is a partnership we are very happy to engage in and to sign. We expect it to last at least ten years.

Herbert Fromme: MidCorp?

Claire-Marie Coste-Lepoutre: Yeah, MidCorp portfolio, we are at +4 across the book.

Speaker #2: You you are right with the fact that we are constantly looking on our side at ways to optimize the risk return profile of the of the group.

Herbert Fromme: Okay.

Claire-Marie Coste-Lepoutre: Yeah. Now looking at Viridium. On your question on Viridium. As you know, we are a shareholder of Viridium, so we have no direct influence when it comes to their strategy and what they want to do in particular. You are right with the fact that we are constantly looking on our side at ways to optimize the risk-return profile of the group. Also at the Capital Market Day, we had highlighted that we have a couple of historical life back books, which are not at the type of return we would like to see generated by those portfolios. We continue to work on those portfolios to really find the best possible solution either via reinsurance.

Speaker #4: So from our perspective, definitely, this partnership is enhancing the expected profitability and the scalability of the Allianz Commercial offering associated to cyber. Also, we expect that this extension will support in reducing volatility.

Speaker #2: And also at the capital market day we had highlighted that we have a couple of historical live back books which are not at the type of return we would like to see generated by by those by those portfolios.

Speaker #2: So we continue to work on those portfolios to really find the best possible solution either via reinsurance Viridium is is like our divestment like what what Viridium will be providing as a as an example.

Speaker #4: And on the side of Coalition, they clearly benefit from the access to our network, which is extensive, obviously, across our geographies. They also benefit from our brand and also from our various expertise when it comes to underwriting, underwriting capabilities.

Speaker #2: So there is no thing for Allianz Leben. Definitely. And for multiple reasons. First of all because performance and overall risk return profile of the Leben portfolio is extremely strong.

Speaker #4: So, we really think it's a very good marriage of, basically, partnership. And Allianz is clearly providing capacity to support the growth in a very important market and to be there for its customer on that dimension as well.

Speaker #2: But also even if you were to step back from that and look just at the key features the the unit cost at which Allianz Leben is operating are absolutely is absolutely best in class.

Claire-Marie Coste-Lepoutre: Viridium is like our divestment, like what Viridium will be providing as an example. There is nothing for Allianz Leben definitely, and for multiple reasons. First of all, because performance and overall risk-return profile of the Leben portfolio is extremely strong. Even if you were to step back from that and look just at the key features, the unit cost at which Allianz Leben is operating is absolutely best in class. There is no way a competitor like Viridium could make sense against that level of unit cost as an example in terms of play. That's not an angle definitely for Allianz Leben portfolios. Yeah. On your last question, which I think was related to Allianz-

Speaker #2: So there is no way a competitor like Viridium could make sense against that that level of unit cost as an example in terms of play.

Speaker #4: Then maybe on your first question on AI, I'll return. So, the way we are leveraging AI currently is, as I mentioned, right? So basically, we are leveraging AI all along the value chain.

Speaker #2: So that's not an angle definitely for for Allianz Leben portfolios. Yeah. Then on on your last question which I think was related to to to Allianz.

Speaker #4: With the view of enhancing our processes, and also the customer experience and the quality or the distinctiveness of the products we are offering to our customers.

Speaker #3: Allianz partners.

Speaker #2: Yeah. So so basically we coming back to our AI to our AI approach right. The right the way we are looking at AI is via this optimization of our processes all along the value chain.

Speaker #4: So it allows us also to do hyper, hyper-personalization of certain features, which are adding a lot of value to the customer experience.

Speaker #4: So so while we are we are looking at multiple KPIs when it comes to the to the performance of of our business, also how more productive the business is becoming and those type of dimension.

Speaker #2: And looking at where we can add most value to the customer. And when where the the human in the loop basically is adding value also in terms of touchpoint from from from a customer customer experience.

Herbert Fromme: Allianz Partners.

Claire-Marie Coste-Lepoutre: Coming back to our AI approach. The way we are looking at AI is via this optimization of our processes all along the value chain, and looking at where we can add most value to the customer and where the human in the loop basically is adding value also in terms of touch point from a customer experience perspective.

Speaker #4: AI is just one component out of it. So so we are we are looking at it comprehensively, I would say, and not in a in a standalone isolated manner because that would not really make sense to us against our overall overall ambition.

Speaker #2: Perspective. And so what we what we are doing associated with that one is that and and basically the the main angle we want to achieve associated with this one is the fact that we are fueling growth because we are increasing customer satisfaction.

Speaker #2: And we are also increasing the distinctiveness of our products which is supporting us from from from that angle. What we do in addition basically beyond tapping into our scale into our brand and into our networks which is very important we also are upskilling our talents and providing access to to the to the tools and also to the to the new learnings which are essential as part of as part of the AI developments just to give you a sense we have been spending more than 100 million euros both in 2024 and 2025 to to train in general our our population and also to give them access access to those to those tools.

Speaker #1: Thank you, Susanne. The next question comes—sorry, it comes from Florian Müller, Financial Times. Florian, your line is open.

Claire-Marie Coste-Lepoutre: What we are doing associated with that one is that the main angle we want to achieve associated with this one is the fact that we are fueling growth because we are increasing customer satisfaction, and we are also increasing the distinctiveness of our products, which is supporting us from that angle. What we do in addition beyond tapping into our scale, into our brand, and into our networks, which is very important, we also are upskilling our talents and providing access to the tools and also to the new learnings which are essential as part of the AI developments.

Speaker #5: Thank you so much for taking my question. It is on the impact of the conflict in the Middle East/Iran war. Did Allianz have any impact?

Speaker #5: And how do you see it going forward in your business? Where exactly do you see the biggest risks? And what do you do in order to mitigate them?

Speaker #5: Thank you.

Speaker #4: Thanks a lot. So indeed, I think when it comes so maybe like starting from from the point of the situation in the in the Middle East, we we don't own direct operations in the Middle East and we don't have operating entities based in the Middle East.

Speaker #2: So so now when it comes to to to basically to Allianz partners I think they are they are currently to they are currently basically working and and executing on their on their on their journey.

Claire-Marie Coste-Lepoutre: Just to give you a sense, we have been spending more than EUR 100 million both in 2024 and 2025 to train in general our population, and also to give them access to those tools. Now when it comes to Allianz Partners, I think they are currently basically working and executing on their journey. Beyond Allianz Partners, I think there is nothing I need to report at this point in time. We can come back to you with the exact details for Allianz Partners, because I don't have them with me right now. I basically, I would expect smooth execution on their side.

Speaker #4: So clearly, our exposure to the Middle East is much more related to our global lines of business. And what we see is that, first of all, there was quite...

Speaker #2: And beyond Allianz partners I think there is nothing I need to report at this point in time. We can come back to you with the exact details for for Allianz partners because I don't have them with me right now.

Speaker #4: Good risk management and anticipation of raising stress associated to the Middle East related to those various entities. So Allianz partners, Allianz Trade, and and AGCS Allianz Commercial in particular.

Speaker #2: But I basically I would expect smooth execution on their side. Yeah.

Speaker #3: I have a question was whether they they have done it already and at the time they said between jobs. Has there been more clear clarity now whether it's 1,500 or 1,800?

Speaker #4: And what we have experienced in terms of losses was actually small and really well within our risk appetite and the type of exposure we are ready to take.

Speaker #4: So I think from a direct standpoint, there is not much to highlight as being as being a core concern to us. We are we are what where we are more exposed is definitely more to the macroeconomic development and basically to the consequence of the situation in the Middle East.

Speaker #2: We will come back to you because I don't have the numbers with me. So I cannot tell you exactly. Yeah.

Speaker #3: Thank you very much.

Herbert Fromme: The question was whether they have done it already and at the time they said between 1,500 and 1,800 jobs. Has there been more clarity now whether it's 15 or 1,800?

Speaker #2: You're welcome.

Speaker #1: Good. Thank you Herbert. The next question comes from Maximilian Volzplatow. Maximilian your line is open.

Speaker #4: For the first part of the year, actually, even rising interest rate and a bit of a stronger US dollar was a positive to our numbers.

Claire-Marie Coste-Lepoutre: We will come back to you because I don't have the numbers with me.

Speaker #4: Hello. Can you hear me?

Speaker #1: Yes we can hear you.

Herbert Fromme: Okay.

Claire-Marie Coste-Lepoutre: I cannot tell you exactly. Yeah.

Speaker #4: Thank you very much. I have a a question. Besides from the raw numbers which sales channels will gain in importance over the next five years?

Herbert Fromme: Thank you very much.

Speaker #4: But basically, going forward, I think the key critical items will be the management of these, of these, volatility in general, where we feel well equipped because we have strengthened our resilience.

Claire-Marie Coste-Lepoutre: You're welcome.

Frank Stoffel: Good. Thank you, Herbert. The next question comes from Maximilian Völz. Maximilian, your line is open.

Frank Stoffel: Good. Thank you, Herbert. The next question comes from Maximilian Volz, PLATOW. Maximilian, your line is open.

Speaker #4: And which will lose ground both globally and specifically in Germany? And what conclusion do you draw from this? Thank you very much.

Speaker #4: We are we have a strong solvency ratio and we have tightened our sensitivities. But as well, related to inflation, obviously, and the fact that we will we will we are we are looking at the inflation trends as always.

Maximilian Völz: Hello. Can you hear me?

Maximilian Volz: Hello. Can you hear me?

Frank Stoffel: Yes, we can hear you.

Speaker #2: Thanks a lot Maximilian. So you are right that definitely the fact that we have a strong and diversified distribution net networks are basically really playing a key role when it comes to achieving our growth ambition.

Maximilian Völz: Thank you very much. I have a question besides from the raw numbers. Which sales channels will gain in importance over the next 5 years, and which will lose ground, both globally and specifically in Germany? What conclusion do you draw from this? Thank you very much.

Maximilian Volz: Thank you very much. I have a question besides from the raw numbers. Which sales channels will gain in importance over the next 5 years, and which will lose ground, both globally and specifically in Germany? What conclusion do you draw from this? Thank you very much.

Speaker #4: I will say, but even with more accuracy as we speak, so that we can monitor, optimize, and react as appropriate within our businesses.

Speaker #2: And today we have a broad distribution mix. We have obviously tight agents. We have brokers. We have direct. We have banks. We have partnerships.

Speaker #1: Okay. Thank you.

Speaker #2: Thank you.

Speaker #4: Maybe maybe on what last item on inflation. So we are obviously monitoring, ready to react as appropriate. But what I wanted to add, which I think is a very important aspect as well, is the fact that we are constantly working a lot on ways to minimize the effect of inflation in particular leveraging our ability as an example to tap into our platform business or into solve as an example that is providing opportunity for us to do to provide distinctive features in terms of absorption of inflation into the cost of claims as an example.

Claire-Marie Coste-Lepoutre: Thanks a lot, Maximilian. You are right that definitely the fact that we have a strong and diversified distribution networks are basically really playing a key role when it comes to achieving our growth ambition. Today we have a broad distribution mix. We have obviously tied agents, we have brokers, we have direct, we have banks, we have partnerships, we have cooperation. This mix is actually very different market by market, but it is definitely very important. When we look at it globally today, brokers and tied agents are the most important distribution channels for us. On P&C, direct is also very relevant and is definitely growing. It's now accounting for almost 10% of our premium generation already. As I was mentioning, it's actually growing double digit.

Speaker #2: We have cooperation. And this mix is actually very different market by market. But it is definitely very important. So when when we look at it globally today brokers and tight agents are the most important distribution channels for us.

Speaker #2: On P&C direct is also very relevant. And this definitely growing it's now accounting for almost 10 percent of our premium generation already. And as I was mentioning it's actually growing double digit.

Speaker #2: In life and health the bunch the banking channel is also highly relevant. And it's accounting for basically a bit more than 15 percent of our life and health.

Speaker #4: So, that's definitely a very important aspect on which we are always working, but we have even further doubling as we speak, together with the productivity dimensions, which is a very important way of tackling also inflation, beyond the steering and the reaction that we are ready to do, obviously, and we have demonstrated we are good at doing in the past as well.

Speaker #2: Premium generation in in 2025. So I think if you look into the future which is difficult to do right also because when you think about it we have been I think as an insurance industry we have made maybe predictions on what's going to happen.

Claire-Marie Coste-Lepoutre: In life and health, the banking channel is also highly relevant, and is accounting for, basically a bit more than 15% of our life and health premium generation in 2025. I think if you look into the future, which is difficult to do, right? Also because when you think about it, we have been I think as an insurance industry, we have made many predictions on what's going to happen, and as an industry in general, we were quite wrong. I think what we expect is that the share business that is going to be initiated online will grow obviously substantially. Our ambition is definitely to further develop all of those channels.

Speaker #2: Thank you. Our next question comes from Herbert Frommel, Versicherungsmonitor. Herbert, your line is open.

Speaker #2: And as an industry in general we were quite wrong. I think what we expect is that the share of business that is going to be initiated online will grow obviously substantially.

Speaker #3: I have three questions. One is on page B10. You show that pricing for AGCS has gone down. Could you give a similar figure for the whole Allianz Commercial Group?

Speaker #2: And our ambition is definitely to further develop all of those channels. As we speak we have a lot of actions and work that is happening in various geographies and also in some of our more global lines when it comes to also how we are going to initiate and interact like the the action and the engagement with our customers within the LLM.

Speaker #3: Because AGCS, of course, is underwriting as part of Allianz Commercial. The second question: in November, Allianz Partners announced that they would shed more than 1,500 jobs due to more use of AI.

Speaker #2: So it's actually very interesting and a lot of developments are already happening not all of them being live because we have also quite a number of very interesting more legal considerations associated to having yes or no as an example a broker license within within those channels.

Claire-Marie Coste-Lepoutre: As we speak, we have a lot of actions and work that is happening in various geographies and also in some of our more global lines when it comes to also how we are going to initiate and interact, like the action and the engagement with our customers within the LLMs. It's actually very interesting, and a lot of developments are already happening, not all of them being live because we have also quite a number of very interesting, more legal considerations associated to having yes or no, as an example, a broker license within those channels. Coming back to the looking ahead, we definitely expect that much more business will be initiated online.

Speaker #3: Last year and in that connection, you mentioned in March 2025 that you might move portfolios Allianz live portfolios to Viridium. Is that in the in the making?

Speaker #2: So coming back to the looking ahead so we definitely expect that much more business will be initiated online. And we are very comfortable then with the thinking that the customer will then decide how he wants to interact with us.

Speaker #3: Are those German portfolios or what other what is it that you might move to Viridium?

Speaker #2: So we are ready to welcome the customer. And we will be ready even further to welcome the customer whatever way he wants to engage with us.

Speaker #4: Thank you very much. Maybe starting with your with your question on overall rate change on the overall commercial portfolio, we are at plus 2% for the quarter.

Speaker #2: And in particular I think the traditional agents will remain very relevant because it can reach customers who value advice and also more personal touch.

Claire-Marie Coste-Lepoutre: We are very comfortable then with the thinking that the customer will then decide how he wants to interact with us. We are ready to welcome the customer, and we will be ready even further to welcome the customer whatever way he wants to engage with us. In particular, I think the traditional agents will remain very relevant because it can reach customers who value advice and also more personal touch. It can also be not always meeting physically. It will also be certainly meeting via a digital interface if they want.

Speaker #4: So actually, it has increased a bit versus year-end 2025. And that's actually also linked to the in particular to the mid-corp business where on the mid-corp business overall, we are at plus 4 plus 4% in terms of rate change on renewal.

Speaker #2: It can also be not always meeting physically. It will also be certainly meeting via a digital interface if they want. And through the direct channel and the platform channel we are reaching out and we will reach out further to customer which are more price sensitive or prefer to have a purchase that is independent and quick online also with a lot of you know embedded features that makes it very easy to purchase and to engage with us.

Speaker #4: So you can see that in the diversified book of of Allianz Commercial, we have very different very different dynamics when it comes to the rate environment.

Speaker #4: Yeah.

Speaker #3: I didn't I didn't get the the sorry, I didn't understand what point may where where did you get the increase from mainly?

Speaker #2: Now when you look at Germany specifically I think in terms of distribution channels we will distinguish between tight agents brokers banks and online distribution.

Claire-Marie Coste-Lepoutre: Through the direct channel and the platform channel, we are reaching out, and we will reach out further to customer which are more price sensitive or prefer to have a purchase that is independent and quick online also with a lot of, you know, embedded features that makes it very easy to purchase and to engage with us. Now, when you look at Germany specifically, I think in terms of distribution channels, we will distinguish between tied agents, brokers, banks, and online distribution, such as Allianz Direct. Through these channels, we reach a broad customer base as well as specific target groups, online and through personal face-to-face interactions, clearly.

Speaker #4: Mainly from the mid-corp portfolio. So within the mid-corp yeah, mid-corp portfolio, we are at plus 4. Across the book. Yeah. Now looking at Viridium.

Speaker #2: Such as Allianz Direct. Through these channels we reach a broad customer base as well as specific target groups. Online and through personal face to face interactions clearly.

Speaker #4: So on your question on Viridium. So as you know, we are the we are a shareholder of of Viridium. So we we have no direct influence when it comes to their strategy and what what they want to do in particular.

Speaker #2: And we will and what we observe is that in the past the vast majority of insurance packages was currently made through personal interaction with an intermediary.

Speaker #4: You you are right with the fact that we are constantly looking on our side at ways to optimize the risk-return profile of the of the group.

Speaker #4: And also at the capital market day, we had highlighted that we have a couple of historical life backbooks, which are not at the type of return we would like to see generated by by those by those portfolios.

Speaker #2: So so what we expect is that there is no what we see is that as as we speak and it's a bit counterintuitive is that there is no massive change in the way people are engaging.

Speaker #2: So they start they start differently but then they come usually to an agent to have this conversation to decide via an intermediary. And that we expect to continue also in Germany in particular.

Claire-Marie Coste-Lepoutre: What we observe is that in the past, the vast majority of insurance purchases was currently made through personal interaction with an intermediary. What we see is that as we speak, and it's a bit counterintuitive, is that there is no massive change in the way people are engaging. They start differently, but then they come usually to an agent to have this conversation, to decide via an intermediary, and that we expect to continue also in Germany in particular. And we see actually also very few differences between age groups. And among the younger customers, like the one under 30, most insurance contracts are concluded with a personal contact.

Speaker #4: So we continue to work on those portfolios to really find the best possible solution either via reinsurance, Viridium is is like our divestment like what what Viridium will be providing as a as an example.

Speaker #2: And we see actually also very few differences between age groups. And amongst the younger customers like the one under 30 most insurance contracts are concluded with a personal contract contact.

Speaker #4: So there is nothing for Allianz Leben. Definitely. And for multiple reasons. First of all, because performance and overall risk-return profile of the Leben portfolio is extremely strong.

Speaker #4: But also, even if you were to step back from that and look just at the key features, the unit cost at which Allianz Leben is operating is absolutely best in class.

Speaker #2: At the same time we know that many customers today have had at least one digital touch point with Allianz before taking out a policy.

Speaker #2: And the variety of these touch points continues to grow. So really what we see is this expansion of contacts but then these conclusion via personal personal contact.

Speaker #4: So there is no way a competitor like Viridium could make sense against that that level of unit cost as an example in terms of play.

Speaker #2: And so I think the conclusion is that also in Germany we do not expect a radical shift between sales channels in five years from now.

Speaker #4: So that's not an angle definitely for for Allianz Leben portfolios. Yeah. Then on on your last question, which I think was related to to to Allianz.

Claire-Marie Coste-Lepoutre: At the same time, we know that many customers today have had at least one digital touchpoint with Allianz before taking out a policy, and the variety of these touchpoints continues to grow. Really what we see is expansion of contacts, but then this conclusion via a personal contact. I think the conclusion is that also in Germany, we do not expect a radical shift between sales channels in five years from now, but we are ready to have those engagements to start the conversation whatever ways and then to conclude the conversation whatever ways. From my perspective, that's the most important, we are ready to do that in a very advanced manner, I would say.

Speaker #2: But we are ready to have those engagements to start the conversation whatever ways and then to conclude the conversation whatever ways from my perspective that's the most important.

Speaker #3: Allianz partners.

Speaker #4: Yeah. So so basically we coming back to our AI to our AI approach, right? The right the way we are looking at AI is via these optimization of our processes all along the value chain.

Speaker #2: And we are ready to do that in in in a very in a very advanced manner I would say.

Speaker #1: Thank you very much. So to sum it up you don't think that there will be a big switch from Germany business as example to Allianz Direct because of the online boom I call it.

Speaker #4: And looking at where we can add most value to the customer, and when and where the human in the loop basically is adding value, also in terms of touchpoints from a customer experience perspective.

Speaker #2: No I think like the way we see it is that basically both Allianz Direct and Allianz Fairs are actually are the German businesses are working smoothly together.

Maximilian Völz: Thank you very much. To sum it up, you don't think that there will be a big switch from Germany business, as example, to Allianz Direct because of the online boom, I call it?

Maximilian Volz: Thank you very much. To sum it up, you don't think that there will be a big switch from Germany business, as example, to Allianz Direct because of the online boom, I call it?

Speaker #4: And so what we what we are doing associated with that one is that and and basically the the main angle we want to achieve associated with this one is the fact that we are fueling growth because we are increasing customer satisfaction.

Speaker #2: And we are we we generate exchanges basically we start conversations and then we offer to the customer what he wants. And I think that's the most important answer.

Speaker #4: And we are also increasing the distinctiveness of our products, which is supporting us from from from that angle. What we do in addition, basically beyond tapping into our scale, into our brand and into our networks, which is very important, we also are upskilling our talents and providing access to to the to the tools and also to the to the new learnings, which are essential as part of as part of the AI developments just to give you a sense.

Claire-Marie Coste-Lepoutre: I think, like, the way we see it is that basically both Allianz Direct and Allianz France are actually, or the German businesses are working smoothly together. We generate exchanges. Basically, we start conversations, and then we offer to the customer what he wants. I think that's the most important answer. We expect there is space for both sides, given the different profile of our customers. Strangely enough, that has not evolved massively over the recent years, despite the fact that it was already available.

Speaker #2: And we expect that there would be there is space for both sides given the different profile of our customers. And strangely enough that has not evolved massively over the over the recent years despite the fact that it was already available.

Speaker #2: But maybe to take another angle to what I was saying is that we have recently launched on the on the side of Allianz Direct a product for non-motor that is 100 percent AI AI fueled if I may put it this way as a as a product.

Speaker #4: We have been spending more than $100 million both in 2024 and 2025 to to train in general our our population. And also to give them access access to those to those tools.

Speaker #2: So you can really start the conversation with an AI agent and conclude entirely on the Allianz Direct platform with your non-motor product buying. And this is actually working also extremely well.

Claire-Marie Coste-Lepoutre: Maybe to take another angle to what I was saying is that we have recently launched on the side of Allianz Direct, a product for non-motor that is 100% AI fueled, if I may put it this way, as a product. You can really start the conversation with an AI agent and conclude entirely on the Allianz Direct platform with your non-motor product buying. This is actually working also extremely well. We have 30% of our customers that have started this way, that have concluded the buying of the product entirely fueled by an AI agent. I think what it is saying, that there is space for the two.

Speaker #4: So so now when it comes to to to basically to Allianz partners, I think they are they are currently to they are currently basically working and and executing on their on their on their journey.

Speaker #2: We have 30 percent of our customers that have started this way that have concluded the buying of the product entirely fueled by an AI agent.

Speaker #2: So so I think what what it is saying is that that there is space for the two. You need to welcome the customers whatever way.

Speaker #2: And then you need to ensure that there is a super smooth integration of the digital world together with the physical world. So that you can ensure that good experience from a customer perspective.

Speaker #4: And beyond Allianz partners, I think there is nothing I need to report at this point in time. We can come back to you with the exact details for for Allianz partners because I don't have them with me right now.

Speaker #4: But I basically I would expect smooth execution on their side.

Speaker #1: Thank you very much for your answer.

Speaker #3: Thank you Maximilian. Our next question comes from Jean-Philippe Lacour AFP. Jean-Philippe your line is open. Jean-Philippe we can't hear you. Please feel free to share your question then with us via email.

Speaker #3: Now the question was whether they they have done it already and at the time they said between 1,500 and 1,800 jobs. Has there been more clear clarity now whether it's 1,500 or 1,800?

Claire-Marie Coste-Lepoutre: You need to welcome the customers whatever way, and then you need to ensure that there is a super smooth integration of the digital world together with the physical world so that you can ensure that good experience from a customer perspective.

Speaker #4: We will come back to you because I don't have the numbers with me. So I cannot tell you exactly. Yeah.

Maximilian Völz: Thank you very much for your answer.

Maximilian Volz: Thank you very much for your answer.

Speaker #3: Thank you very much.

Frank Stoffel: Thank you, Maximilian. Our next question comes from Jean-Philippe Lacour, AFP. Jean-Philippe, we can't hear you. Please feel free to share your question then with us via email. Thank you. The next question comes from Michael Hylands, Börsen-Zeitung. Michael, your line is open.

Frank Stoffel: Thank you, Maximilian. Our next question comes from Jean-Philippe Lacour, AFP. Jean-Philippe, we can't hear you. Please feel free to share your question then with us via email. Thank you. The next question comes from Michael Flämig, Börsen-Zeitung. Michael, your line is open.

Speaker #4: You're welcome.

Speaker #3: Thank you. The next question then comes from Michael Fleming Börsenseitung. Michael your line is open.

Speaker #1: Good. Thank you, Herbert. The next question comes from Maximilian Volzplatow. Maximilian, your line is open.

Speaker #4: Good evening I have three questions please. Inflation India and Germany. We talked already about inflation. Inflation inspections have risen sharply in the short space of time.

Speaker #5: Hello. Can you hear me?

Speaker #1: Yes, we can hear you.

Speaker #5: Thank you very much. I have a a question. Besides from the raw numbers, which sales channels will gain in importance over the next five years?

Speaker #4: We saw this happen back in '22 at the time Allianz took a while to adapt I think. Will inflation infect Allianz profit that we over the next six months?

Speaker #5: And which will lose ground, both globally and specifically in Germany? And what conclusion do you draw from this? Thank you very much.

Michael Hylands: I have three questions, please. Inflation, India, and Germany. We talked already about inflation. Inflation expectations have risen sharply in the short space of time. We saw this happen back in 2022. At the time, Allianz took a while to adapt, I think. Will inflation affect Allianz profitability over the next 6 months? To India, there are offsetting measures of EUR 200 million in the context with the sale of your stake in India. Could you explain what you did in the Q1? Germany, perhaps you could put the business performance into context. Thank you.

Michael Flämig: I have three questions, please. Inflation, India, and Germany. We talked already about inflation. Inflation expectations have risen sharply in the short space of time. We saw this happen back in 2022. At the time, Allianz took a while to adapt, I think. Will inflation affect Allianz profitability over the next 6 months? To India, there are offsetting measures of EUR 200 million in the context with the sale of your stake in India. Could you explain what you did in the Q1? Germany, perhaps you could put the business performance into context. Thank you.

Speaker #4: To India there are offsetting measures of 200 million euro in context with the sale of your stake in India. Could you explain what you did in the first quarter and Germany?

Speaker #4: Thanks a lot, Maximilian. So, you are right that definitely the fact that we have strong and diversified distribution networks is basically really playing a key role when it comes to achieving our growth ambition.

Speaker #4: Perhaps you could put the business performance into context. Thank you.

Speaker #4: And today we have a broad distribution mix, we have obviously tight agents, we have brokers, we have direct, we have banks, we have partnerships, we have cooperation.

Speaker #2: Thank you very much. So I think on inflation first of all I will not agree with you that we have not reacted well back back then.

Speaker #4: And this mix is actually very different market by market. But it is definitely very important. So, when we look at it globally today, brokers and tied agents are the most important distribution channels for us.

Speaker #2: I think as an organization we did react well. And we also did react in multiple instances ahead of the of the market. Maybe so ahead of the market which also allows us to be quite well positioned to also reap the further benefits of of this being ahead while also competitors had to to follow up.

Speaker #4: On P&C, direct is also very relevant and is definitely growing. It's now accounting for almost 10% of our premium generation already. And as I was mentioning, it's actually growing double digit.

Claire-Marie Coste-Lepoutre: Thank you very much. I think on inflation, first of all, I will not agree with you that we have not reacted well back then. I think as an organization, we did react well, and we also did react in multiple instances ahead of the market. Maybe ahead of the market, which also allows us to be quite well-positioned to also reap the further benefits of this being ahead, while also competitors had to follow up. I would say at this point in time, when I look at the overall pricing environment, first of all, we believe that in most markets, actually, we are pricing ahead of inflation.

Speaker #2: So I I would say at this point in time when I look at the overall pricing environment first of all we we believe that in most markets actually we we are pricing ahead of inflation.

Speaker #4: In life and health, the bunch—the relevant. And it's accounting for basically a bit more than 15% of our life and health premium generation in 2025.

Speaker #2: So we feel comfortable with the assumptions we have taken and with the way we are proceeding within within our various markets. Obviously that's a conversation that requires to be quite nuanced.

Speaker #4: So I think if you look into the future, which is difficult to do, right? Also because when you think about it, we have been I think as an insurance industry, we have made many predictions on what's going to happen and as an industry in general, we were quite wrong.

Speaker #2: Across geographies across line of business because not everything is equal everywhere. But I think the long story short is that we are well positioned and we feel comfortable where we are.

Speaker #4: I think what we expect is that the share of business that is going to be initiated online will grow obviously substantially. And our ambition is definitely to further develop all of those channels.

Claire-Marie Coste-Lepoutre: We feel comfortable with the assumptions we have taken and with the way we are proceeding within our various markets. Obviously, that's a conversation that requires to be quite nuanced across geographies, across line of business, because not everything is equal everywhere. I think the long story short is that we are well-positioned, and we feel comfortable where we are. Now what we do is that we do this super tight monitoring together with our local operating entities. At local entity level, there is this very strong cooperation between the pricing team, the claims team, and the reserving team to be in a situation to identify what's happening and basically to react actively if there is a need to react.

Speaker #2: And now what we do is that we do these super tight monitoring together with with our local operating entities. So at local entity level there is this very strong cooperation between the pricing teams the claims team and the and the reserving team.

Speaker #4: As we speak, we have a lot of actions and work that is happening in various geographies and also in some of our more global lines.

Speaker #2: To be in a situation to identify what's happening. And basically to react actively if there is a need to react. At the same time our ability to react is very strong.

Speaker #4: When it comes to also how we are going to initiate and interact—like, the action and the engagement with our customers within the LLMs.

Speaker #2: We have also further enhanced our technical excellence. We have the ability to be even further nuanced when it comes to pricing action as an example.

Speaker #4: So it's actually very interesting and a lot of developments are already happening, not all of them being live because we have also quite a number of very interesting more legal considerations associated to having yes or no as an example, a broker license within within those channels.

Speaker #2: And also the frequency of the pricing actions has further evolved even if you compare to to 2022. So I think that's from a pricing perspective.

Speaker #4: So coming back to the looking ahead, so we definitely expect that much more business will be initiated online. And we are very comfortable then with the thinking that the customer will then decide how he wants to interact with us.

Claire-Marie Coste-Lepoutre: At the same time, our ability to react is very strong. We have also further enhanced our technical excellence. We have the ability to be even further nuanced when it comes to pricing action as an example, and also the frequency of the pricing actions has further evolved, even if you compare to 2022. I think that's from a pricing perspective. As I was mentioning as well, we work a lot, and I think we are also very well-positioned from that angle on productivity and on leveraging everything we can do with providers like Solve, as with Solved and each provider to also minimize some of the impact of inflation into our products.

Speaker #2: As I was mentioning as well we work a lot and I think we are also very well positioned from that angle on productivity. And on leveraging everything we can do with providers like Solve with Solve and it provider to also minimize some of the impact of inflation into into our products.

Speaker #4: So we are ready to welcome the customer and we will be ready even further to welcome the customer, whatever way he wants to engage with us.

Speaker #2: And the last dimension from a pricing or product perspective is the fact that we are also innovating with further products which are more steep products.

Speaker #4: And in particular, I think the traditional agents will remain very relevant because they can reach customers, move value, advise, and also offer a more personal touch.

Speaker #2: So that will be the case at Allianz Direct. Which is as an example offering a product with a with a further discount but where basically in case of claims experience you are you are steered in a very comfortable way from a customer perspective.

Speaker #4: It can also be not always meeting physically. It will also be suddenly meeting via a digital interface if they want. And through the direct channel and the platform channel, we are reaching out and we will reach out further to customers who are more price sensitive or prefer to have a purchase that is independent and quick online, also with a lot of, you know, embedded features that make it very easy to purchase and to engage with us.

Claire-Marie Coste-Lepoutre: The last dimension from a pricing or product perspective is the fact that we are also innovating with further products which are more steer products. That would be the case at Allianz Direct, which is, as an example, offering a product with a further discount, but where basically in case of a claims experience, you are steered in a very comfortable way from a customer perspective. It's adding a lot of value from a customer experience angle, but it's also allowing us to basically have the cost of the claims under control and as such, allowing a much better basically overall pricing for that product. That's basically for the inflationary angle.

Speaker #2: So it's adding a lot of value from a customer experience angle. But it's also allowing us to basically have the cost of the claims under control and as such allowing allowing a much better basically overall pricing for for for that product.

Speaker #4: Now when you look at Germany specifically, I think in terms of distribution channels, we will distinguish between tight agents, brokers, banks, and online distribution.

Speaker #2: So that's basically for the for the inflationary angle. And overall we feel extremely well positioned also for the for the for the rest of the year and and we and as mentioned we are just monitoring it carefully.

Speaker #4: Such as Allianz Direct. Through these channels, we reach a broad customer base as well as specific target groups. Online and through personal face-to-face interactions, clearly.

Speaker #4: And what we observe is that in the past, the vast majority of insurance packages was currently made through personal interaction with an intermediary.

Speaker #2: Now coming to India and indeed the usage of the proceeds. So so what we what we have communicated is that we will use the proceeds for various buckets.

Speaker #4: So so what we expect is that there is no what we see is that as as we speak and it's a bit counterintuitive, is that there is no massive change in the way people are engaging.

Speaker #2: One one broad one is is related to the acceleration of of our strategic deployment and also the investment into productivity AI and so on and so forth.

Claire-Marie Coste-Lepoutre: Overall, we feel extremely well-positioned also for the rest of the year. As mentioned, we are just monitoring it carefully. Now coming to India and indeed the usage of the proceeds. What we have communicated is that we will use the proceeds for various buckets. One broad one is related to the acceleration of our strategic deployment and also the investment into productivity, AI, and so on and so forth. That's one angle to it. The second one is also further basically debt realization on our investment portfolio to benefit further from the interest from the higher yielding environment.

Speaker #4: So they start they start differently, but then they come usually to an agent to have this conversation to decide via an intermediary. And that we expect to continue also in Germany in particular.

Speaker #2: So that's one angle to it. And the second one is also further basically debt realization on our on our investment portfolio to benefit further from the from the interest from the higher yielding environment.

Speaker #4: And we see actually also very few different between age groups. And amongst the younger customers like the one under 30, most insurance contracts are concluded with a personal contract contact.

Speaker #2: So in the first quarter we have we have realized 200 200 million of debt losses into into our portfolio. Mostly supporting the PNC business.

Claire-Marie Coste-Lepoutre: The second one is also further basically debt realization on our investment portfolio to benefit further from the interest from the higher yielding environment. In the first quarter, we have realized EUR 200 million of debt losses into our portfolio, mostly supporting the P&C business. That's going to basically support further the investment results of the P&C segment in H2 and also as we move into 2027. That's basically what we have done at this point in time.

Speaker #4: At the same time, we know that many customers today have had at least one digital touchpoint with Allianz before taking out a policy. And the variety of these touchpoints continues to grow.

Speaker #2: So that's going to basically support further the investment results of the PNC segment in the second half of the year and also as we move into 2027.

Speaker #4: So really what we see is this expansion of contacts, but then these conclusions via personal personal contact. And so I think the conclusion is that also in Germany, we do not expect a radical shift between sales channels in five years from now.

Speaker #2: And that's basically what we have done at this point. Time. So on a net basis against the 1.1 we have spent 1.150 million if you want.

Claire-Marie Coste-Lepoutre: In the first quarter, we have realized EUR 200 million of debt losses into our portfolio, mostly supporting the P&C business. That's going to basically support further the investment results of the P&C segment in H2 and also as we move into 2027. That's basically what we have done at this point in time.

Speaker #2: And the rest will come during the year. And then I think you had the last question around the overall performance of the of the German of the German business.

Speaker #4: But we are ready to have those engagements to start the conversation, whatever ways, and then to conclude the conversation, whatever ways. From my perspective, that's the most important.

Speaker #2: Which basically had a had a very very good very good first on the renewal side we have seen a very strong renewal in the in the first half of first half of first in the first of January of of the year.

Speaker #4: And we are ready to do that in in in a very in a very advanced manner, I would say.

Claire-Marie Coste-Lepoutre: On a net basis, against the 1.1, we have spent EUR 150 million, if you want, and the rest will come during the year. I think you had a last question around the overall performance of the German business, which basically had a very, very good. First, on the renewal side, we have seen a very strong renewal in the first half of January of the year. It was a very strong H1 into the year. We have a very good level of internal growth of more than 5% for that business.

Speaker #5: Thank you very much. So, to sum it up, you don’t think that there will be a big switch from Germany business, as an example, to Allianz Direct because of the online boom, I call it.

Speaker #2: So it was a very strong very strong first half into into the year. So we have a very good level of internal internal growth of more than 5% for for that business.

Speaker #4: No, I think like the way we see it is that basically both Allianz Direct and Allianz Fairs are actually are the German businesses are working smoothly together.

Speaker #2: And then when it comes to to profitability also excellent level of profitability of our life business on the on the PNC side with 80 like a combined ratio around 88%.

Speaker #4: And we are we we generate exchanges basically we start conversations and then we offer to the customer what he wants. And I think that's the most important answer.

Speaker #2: Which is supported as well with the fact that we had a lower level of natural catastrophes in this quarter. That being said we had a lot a lot of frost in the in the first first quarter.

Speaker #4: And. We expect that there would be there is space for both sides, given the different profile of our customers. And strangely enough, that has not evolved massively over the over the recent years, despite the fact that it was already available.

Claire-Marie Coste-Lepoutre: When it comes to profitability, also excellent level of profitability of our life business on the P&C side with a combined ratio around 88%, which is supported as well with the fact that we had a lower level of natural catastrophes in this quarter. That being said, we had a lot of frost in Q1, which basically led to quite some increased frequency in what we call the weather-related type of business. As you can see, not impacting the overall expected, I mean, the overall profitability of that business. We are very happy with the development of the business. A really good growth and a very nice level of profitability.

Speaker #2: Which basically led to quite some increased frequency in what we call the weather related type of business. But as you can see not impacting the overall expected I mean the overall profitability of that business.

Speaker #4: But maybe to take another angle to what I was saying is that we have recently launched on the on the side of Allianz Direct a product for non-motor that is 100% AI AI fueled, if I may put it this way, as a as a product.

Speaker #2: So we are very happy with with the development of the business. Really good growth. And and very nice level of profitability. So so well done to the team in general.

Speaker #2: So I hope that answer or you want also a broader views on our other life business our other German business also including life. I wasn't sure if this is PNC only or more.

Speaker #4: So you can really start the conversation with an AI agent and conclude entirely on the Allianz Direct platform with your non-motor product buying. And this is actually working also extremely well.

Speaker #1: No. It's okay. Like thank you very much.

Speaker #2: Thank you. Thanks a lot.

Speaker #3: Thank you. Our next question comes from Ben Dyson S&P Global Markets. Ben your line is open.

Speaker #4: We have 30% of our customers that have started this way, that have concluded the buying of the product entirely fueled by an AI agent.

Claire-Marie Coste-Lepoutre: Well done to the team in general. I hope that answer or you want also broader views on our other life business, our other German business also including life. I wasn't sure if this is P&C only or more.

Speaker #4: So so I think what what it is saying is that there is space for the two. You need to welcome the customers, whatever way.

Speaker #4: Hi. Good morning. One quick follow up on the on Allianz Commercials arrangement with Coalition on Cyber. I just wondered if you could say how that will change Allianz Commercials' existing cyber underwriting team.

Speaker #4: And then you need to ensure that there is a super smooth integration of the digital world together with the physical world, so that you can ensure that good experience from a customer perspective.

Michael Hylands: No, it's okay like that.

Michael Flämig: No, it's okay like that.

Claire-Marie Coste-Lepoutre: Okay.

Michael Hylands: Thank you very much.

Michael Flämig: Thank you very much.

Claire-Marie Coste-Lepoutre: Thank you. Thanks a lot.

Frank Stoffel: Thank you. Our next question comes from Ben Dyson, S&P Global Market Intelligence. Ben, your line is open.

Frank Stoffel: Thank you. Our next question comes from Ben Dyson, S&P Global Market. Ben, your line is open.

Speaker #4: And whether it will need to shrink because more of the front end underwriting is being handled by Coalition. Thank you.

Speaker #5: Thank you very much for your answer.

Speaker #6: Thank you, Maximilian. Our next question comes from Jean-Philippe Lacour, AFP. Jean-Philippe, your line is open. Jean-Philippe, we can't hear you. Please feel free to share your question then with us via email.

Speaker #2: So so as part so I will not go into all details but basically we have two different elements associated to that. There is part of the team that is basically being transferred to to the underwriting team together with to work together with Coalition.

Ben Dyson: Oh, hi, good morning. One quick, follow-up on the, on Allianz Commercial's, arrangement with Coalition on cyber. I just wonder if you could say how that will change Allianz Commercial's existing cyber underwriting team and whether it will need to shrink because, more of the front-end underwriting is being handled by Coalition. Thank you.

Speaker #2: And also we have some level of expertise that we retain for our cyber cyber assessment also related to the reinsurance which is a very important aspect as well of the overall risk management of the of the cyber risk.

Speaker #6: Thank you. The next question then comes from Michael Fleming, Börsen-Zeitung. Michael, your line is open.

Claire-Marie Coste-Lepoutre: I will not go into all details, but basically we have two different elements associated to that. There is part of the team that is basically being transferred to the underwriting team together with to work together with Coalition. We have some level of expertise that we retain for our cyber cyber assessment also related to the reinsurance, which is a very important aspect as well of the overall risk management of the cyber risk.

Speaker #4: Okay. Thank you.

Speaker #7: Three questions, please. Inflation India and Germany. We talked already about inflation. Inflation inspections have risen sharply in the short space of time. We saw this happen back in '22 at the time.

Speaker #3: So thank you. And Jean-Philippe Lacour has shared his question via email. Jean-Philippe is inquiring what are the net costs of the severe floods that have hit France in February?

Speaker #7: Allianz took a while to adapt, I think. Will inflation in fact Allianz profit that we lility over the next six months? To India, there are offsetting measures of 200 million euro in tall context with the sale of your stake in India.

Speaker #2: So it's actually like meet double digit level for Allianz France overall. So I mean so an impact but also well within what we would expect related to NATCAT exposure overall.

Ben Dyson: Thank you.

Frank Stoffel: Thank you. Jean-Philippe Lacour has shared his question via email. Jean-Philippe is inquiring what are the net costs of the severe floods that have hit France in February?

Speaker #7: Could you explain what you did in the first quarter and Germany? Perhaps you could put the business performance into context. Thank you.

Speaker #3: Thank you. There are no further questions in the queue. Thank you for everyone who has put forward questions. Of course we are ready to help.

Speaker #4: Thank you very much. So I think on inflation, first of all, I will not agree with you that we have not reacted well back back then.

Claire-Marie Coste-Lepoutre: It's actually like mid-double digit level for Allianz France overall. I mean, an impact but also well within what we would expect related to net cut exposure overall.

Speaker #3: For just for your calendars we will report our second quarter and first half 2026 financial results on August 7th. And in addition we would like to remind you of our media barbecue on July July 7th here in Munich.

Speaker #4: I think as an organization, we did react well. And we also did react in multiple instances ahead of the of the market. Maybe so ahead of the market, which also allows us to be quite well positioned to also reap the further benefits of of this being ahead while also competitors had to to follow up.

Frank Stoffel: Thank you. There are no further questions in the queue. Thank you for everyone who has put forward questions. Of course, we are ready to help. For, just for your calendars, we will report our Q2 and H1 2026 financial results on 7 August. In addition, we would like to remind you of our media barbecue on 7 July here in Munich. We look forward to welcoming as many of you as possible in person here at our headquarters. This concludes today's media call on our Q1 2026 financial results. Thank you for your participation, and goodbye.

Speaker #3: We look forward to welcoming as many of you as possible in person here at our headquarters. This concludes today's media call on our 1Q 2026 financial results.

Speaker #3: Thank you for your participation and goodbye.

Speaker #4: So I I would say at this point in time, when I look at the overall pricing environment, first of all, we we believe that in most markets, actually, we we are pricing ahead of inflation.

Speaker #2: Thanks a lot.

Speaker #4: So we feel comfortable with the assumptions we have taken. And with the way we are proceeding, within within our various markets. Obviously, that's a conversation that requires to be quite nuanced.

Speaker #4: Across geographies, across line of business, because not everything is equal everywhere. But I think the long story short is that we are well positioned and we feel comfortable where we are.

Claire-Marie Coste-Lepoutre: Thanks a lot.

Speaker #4: And now what we do is that we do these super tight monitoring together with with our local operating entities. So at local entity level, there is this very strong cooperation between the pricing teams, the claims team, and the and the reserving team, to be in a situation to identify what's happening.

Speaker #4: And basically to react actively if there is a need to react. At the same time, our ability to react is very strong. We have also further enhanced our technical excellence.

Andrew Ritchie: Welcome to the Allianz Equity Story. I am Andrew Ritchie, Head of Group Investor Relations. This video is presented by an avatar. This enables us to keep the information updated quickly and make it available in different languages. For more than 130 years, Allianz has helped people and businesses manage uncertainty with confidence. Today, that same strength, scale, and discipline underpin our long-term investment case. Allianz is one of the world's largest financial services groups, focused on insurance and asset management. We generate around EUR 187 billion in business volume, manage around EUR 2 trillion in assets, and have a market capitalization of about EUR 140 billion. Founded in 1890, we are the largest insurer in Europe, one of the largest globally, and for 7 consecutive years, the most valuable insurance brand worldwide, according to Interbrand. Why insurance matters.

Speaker #4: We have the ability to be even further nuanced when it comes to pricing action, as an example. And also the frequency of the pricing actions, as further evolve even if you compare to to 2022.

Speaker #4: So I think that's from a pricing perspective. As I was mentioning as well, we work a lot. And I think we are also very well positioned from that angle.

Speaker #4: On productivity, and on leveraging everything we can do. Providers like Solve, with Solve and its provider, to also minimize some of the impact of inflation into our products.

Speaker #4: And the last dimension from a pricing or product perspective is the fact that we are also innovating with further products, which are more steep products.

Speaker #4: So that will be the case at Allianz Direct, which is, as an example, offering a product with a further discount, but where basically in case of claims experience, you are steered in a very comfortable way from a customer perspective.

Speaker #4: So it's adding a lot of value from a customer experience angle. But it's also allowing us to basically have the cost of the claims under control.

Andrew Ritchie: Insurance is a fundamental enabler of everyday life and plays a pivotal role in society and the broader economy. Insurance acts as a safety net for individuals and businesses, offering protection of property, finances, and livelihoods. Insurance gives businesses the confidence to invest in growth or protects individuals when they are traveling or planning for retirement. Insurance is also a long-term business. Insurers must honor commitments that often extend decades into the future, requiring strong capital, disciplined risk management, and substantial financial resources. Why Allianz? The industry is highly regulated and capital intensive, creating significant barriers to entry. Allianz holds a clear advantage here, supported by one of the strongest balance sheets in the sector, a AA rating from Standard & Poor's, capital levels more than twice regulatory requirements, and conservative liquidity management. Around 80% of our profit comes from insurance.

Speaker #4: And as such, allowing allowing a much better basically overall pricing for for for that product. So that's basically for the for the inflationary angle.

Speaker #4: And overall, we feel extremely well positioned also for the for the for the rest of the year. And and we and as mentioned, we are just monitoring it carefully.

Speaker #4: Now coming to India and indeed the usage of the proceeds. So so what we what we have communicated is that we will use the proceeds for various buckets.

Speaker #4: One one broad one is definitely is related to the acceleration of of our strategic deployment and also the investment into productivity AI and so on and so forth.

Speaker #4: So that's one angle to it. And the second one is also further basically debt realization on our on our investment portfolio to benefit further from the from the interest from the higher yielding environment.

Andrew Ritchie: Let me talk about our property and casualty business first. In property and casualty insurance, also called non-life, we are a leading global insurer across personal and commercial lines. Scale matters. It helps us keep products affordable and service strong. That means that we rank among the top 3 providers in more than 60% of our property and casualty markets by premium volume. We are the world's leading credit insurer, a major player in travel insurance, and we operate the largest direct insurance platform in Europe. Let's now have a closer look at our second insurance business, life and health. We offer savings, protection, and health insurance solutions. We hold over 30% share in life new business in Germany, have a broad presence across Europe, rank among the top 5 in the US annuities market, and own attractive franchises in Asia.

Speaker #4: So in the first quarter, we have we have realized 200 200 million of debt losses into into our portfolio. Mostly supporting the P&C business.

Speaker #4: So that's going to basically support further the investment results of the P&C segment in the second half of the year and also as we move into 2027.

Speaker #4: And that's basically what we have done at this point in time. So on a net basis against the 1.1, we have spent 1.150 million, if you want.

Speaker #4: And the rest will come during the year. And then I think you had the last question around the overall performance of the of the German of the German business.

Speaker #4: Which basically had a had a very very good very good first on the renewal side, we have seen a very strong renewal in the in the first half of first half of first in the first of January of of the year.

Andrew Ritchie: Our life business benefits from a strong track record in providing innovative retirement solutions for our clients. Now moving on to our third business segment, asset management. Beyond insurance, around 20% of our profits come from asset management through PIMCO and Allianz Global Investors. This contributes stable income and enhances diversification. PIMCO is a leading fixed income and alternative investments manager with a particularly strong presence in the US. They manage some of the largest active fixed income funds and also have strong alternative asset capabilities. Allianz Global Investors focuses on multi-asset equity and alternative investments, working closely with our insurance distribution channels and partners, with strong footholds in Europe and Asia. Together, they manage both our group insurance assets and third-party funds of around EUR 2 trillion, contributing steady fee income and further diversifying earnings. Geographic breadth and distribution.

Speaker #4: So it was a very strong, very strong first start into the year. So we have a very good level of internal growth of more than 5% for that business.

Speaker #4: And then when it comes to to profitability, also excellent level of profitability of our life business on the on the P&C side, with 80 like a combined ratio around 88%, which is supported as well with the fact that we had a lower level of natural catastrophes in this quarter.

Speaker #4: That being said, we had a lot, a lot of frost in the first quarter, which basically led to quite some increased frequency in what we call the weather-related type of business.

Speaker #4: But as you can see, not impacting the overall expected I mean, the overall profitability of that business. So we are very happy with with the development of the business.

Speaker #4: Really good growth. And and very nice level of profitability. So so well done to the team in general. So I hope that answer or you want also a broader views on our other life business our other German business, also including life.

Andrew Ritchie: We have a very strong position in our home market, Germany, leading positions across Europe, a significant presence in the US savings and investment market, alongside strong franchises in Australia and Asia. Our products reach customers through a wide range of distribution channels, from agents and brokers to direct platforms and corporate partners. This combination provides both resilience and broad customer access. It also ensures exposure to opportunities for growth, in particular, growing demand for protection and retirement solutions driven by global trends like aging societies, increasing health costs, and climate change. Our strategy for 2025 to 2027. Our current strategic cycle runs from 2025 to 2027 and is supported by three key priorities. First, we want to drive smart growth by winning new customers, increasing customer retention, and expanding cross-selling opportunities across our business. Second, we are reinforcing productivity.

Speaker #4: I wasn't sure if this is P&C only or more. No, it's okay. Like thank you very much. Thank you. Thanks a lot. Thank you.

Speaker #4: Our next question comes from Ben Dyson S&P Global Markets. Ben, your line is open. Hi, good morning. One quick follow up on the on Allianz Commercials arrangement with Coalition on Cyber.

Speaker #4: I just wondered if you could say how that will change Allianz Commercial’s existing cyber underwriting team, and whether it will need to shrink because more of the front-end underwriting is being handled by Coalition.

Speaker #4: Thank you. So so as part so I will not go into all details, but basically we have two different elements associated to that. There is part of the team that is basically being transferred to to the underwriting team together with to work together with Coalition.

Speaker #4: And also, we have some level of expertise that we retain for our cyber assessment, also related to the reinsurance, which is a very important aspect as well of the overall risk management of the cyber risk.

Andrew Ritchie: This means continuing to reduce our non-life expense ratio through technology and through smart use of artificial intelligence and ongoing process efficiencies. Third, we are strengthening resilience by reinforcing our balance sheet and risk management to deliver strong returns even in volatile environments. We have set ambitious financial targets and shareholder returns. We target core earnings per share growth of 7% to 9%, a core return on equity of at least 17%, and operating capital generation of 24 to 25 percentage points in 2027. To ensure we hold enough capital to meet policyholders' obligations even under stress, we target to maintain a Solvency II ratio of at least 180%. At the end of 2025, it was 218%. This supports our attractive payout policy. We recognize the importance of regular income for our shareholders.

Speaker #4: Thank you. So, thank you. And Jean-Philippe Lacour has shared his question by email. Jean-Philippe is inquiring: What are the net costs of the severe floods that have hit France in February?

Speaker #4: So it's actually like meet double digit level for Allianz France overall. So I mean, so an impact, but also well within what we would expect related to NATCAT exposure overall.

Speaker #4: Thank you. There are no further questions in the queue. Thank you for everyone who has put forward questions. Of course, we are ready to help.

Andrew Ritchie: This reliability is a cornerstone of our investment case. Our policy consists of two elements. Firstly, to pay a dividend per share amounting to the higher of 60% of shareholders' net income, adjusted for extraordinary and volatile items, or at least previous year's level in the event that our net income would be lower than the year before. For fiscal year 2025, we intend to pay EUR 17.10 per share. Secondly.

Speaker #4: Just for your calendars: we will report our second quarter and first half 2026 financial results on August 7th. In addition, we would like to remind you of our media barbecue on July 7th here in Munich.

Speaker #4: We look forward to welcoming as many of you as possible in person here at our headquarters. This concludes today's media call on our Q1 2026 financial results.

Andrew Ritchie: A minimum of 15% additional capital return on average for the financial years 2025 to 2027. This would most likely take the form of share buybacks. In 2025, we bought back shares worth EUR 2 billion. Further information about our payout policy can be found in our capital management video or in our annual report. The Allianz Equity Story in a nutshell. Put simply, Allianz combines scale and leadership with broad diversification, a fortress balance sheet, a clear strategy, and a proven ability to create sustainable long term value. For more than a century, individuals, families and businesses around the world have trusted Allianz to protect what matters most to them. These strengths underpin our long term investment case and define our purpose: We secure your future. Thank you for watching. Willkommen zur Allianz Equity Story. Ich bin Andrew Ritchie, Leiter Investor Relations.

Speaker #4: Thank you for your participation, and goodbye. Thanks a lot. Welcome to the Allianz Equity Story. I'm Andrew Ritchie, Head of Group Investor Relations. This video is presented by an avatar.

Speaker #4: This enables us to keep the information updated quickly and make it available in different languages. For more than 130 years, Allianz has helped people and businesses manage uncertainty with confidence.

Speaker #4: Today, that same strength, scale, and discipline underpin our long-term investment case. Allianz is one of the world's largest financial services groups, focused on insurance and asset management.

Andrew Ritchie: Dieses Video wird von einem Avatar präsentiert. Dadurch können wir die Informationen schneller aktualisieren und in verschiedenen Sprachen bereitstellen. Seit mehr als 130 Jahren hilft die Allianz Menschen und Unternehmen dabei, mit Risiken umzugehen und abzusichern. Heute bildet genau diese Stärke, kombiniert mit unserer globalen Ausrichtung und einer umsichtigen Unternehmensführung die Grundlage unseres Erfolgs. Die Allianz zählt zu den weltweit größten Finanzdienstleistungsunternehmen mit Schwerpunkt auf Versicherung und Vermögensverwaltung. Wir erzielen ein Geschäftsvolumen von rund EUR 187 billion, verwalten rund EUR 2 trillion an Vermögen für Dritte bei einer Marktkapitalisierung von etwa EUR 140 billion. Die Allianz wurde im Jahr 1890 gegründet, ist der größte Versicherer Europas, einer der größten weltweit und wurde von Interbrand zum 7. Mal in Folge als wertvollste Versicherungsmarke der Welt ausgezeichnet. Warum sind Versicherungen wichtig? Versicherungen sind ein wichtiger Bestandteil des täglichen Lebens und spielen eine zentrale Rolle in unserer Gesellschaft und der Gesamtwirtschaft.

Andrew Ritchie: [Foreign language]

Speaker #4: We generate around 187 billion euros in business volume, manage around 2 trillion euros in assets, and have a market capitalization of about 140 billion euros.

Speaker #4: Founded in 1890, we are the largest insurer in Europe, one of the largest globally and for seven consecutive years, the most valuable insurance brand worldwide, according to Interbrand.

Speaker #4: Why insurance matters? Insurance is a fundamental enabler of everyday life and plays a pivotal role in society and the broader economy. Insurance acts as a safety net for individuals and businesses, offering protection of property, finances, and livelihoods.

Speaker #4: Insurance gives businesses the confidence to invest in growth or protects individuals when they are traveling or planning for retirement. Insurance is also a long-term business.

Speaker #4: Insurers must honor commitments that often extend decades into the future, requiring strong capital discipline, risk management, and substantial financial resources. And why highly regulated and capital intensive.

Andrew Ritchie: Versicherungen dienen als Sicherheitsnetz für Privatpersonen und Unternehmen und bieten Schutz für Eigentum, Finanzen, Gesundheit und Leben. Sie geben Unternehmen die Zuversicht, in Wachstum zu investieren oder schützen Privatpersonen auf Reisen oder bei der Planung ihrer Altersvorsorge. Versicherungen sind zudem ein langfristiges Geschäft. Versicherer müssen Verpflichtungen erfüllen, die oft Jahrzehnte in die Zukunft reichen. Das erfordert Kapitalstärke, diszipliniertes Risikomanagement und erhebliche finanzielle Ressourcen. Warum Allianz? Die Branche ist stark reguliert und kapitalintensiv. Das schafft hohe Markteintrittsbarrieren. Hierin liegt ein klarer Vorteil der Allianz. Wir verfügen über eine der stärksten Bilanzen der Branche, ein Double A Rating von Standard & Poor's, eine Kapitalausstattung, die mehr als doppelt so hoch ist wie die regulatorischen Anforderungen, sowie ein konservatives Liquiditätsmanagement. Rund 80% unseres Gewinns erwirtschaften wir durch den Verkauf von Versicherungen. Schauen wir uns nun also unsere Versicherungssparten genauer an.

Speaker #4: Creating significant barriers to entry. Allianz holds a clear advantage here, supported by one of the strongest balance sheets in the sector, a double A rating from Standard & Poor's, capital levels more than twice regulatory requirements, and conservative liquidity management.

Speaker #4: Around 80% of our profit comes from insurance. Let me talk about our property and casualty business first. In property and casualty insurance, also called non-life, we are a leading global insurer across personal and commercial lines.

Speaker #4: Scale matters. It helps us keep products affordable and service strong. That means that we rank among the top three providers in more than 60% of our property and casualty markets by premium volume.

Speaker #4: We are the world's leading credit insurer, a major player in travel insurance, and we operate the largest direct insurance platform in Europe. Let's now have a closer look at our second insurance business, life and health.

Speaker #4: We offer savings, protection, and health insurance solutions. We hold over 30% share in Life New Business in Germany, have a broad presence across Europe, rank among the top five in the US Annuities market, and own attractive franchises in Asia.

Andrew Ritchie: Im Bereich Schaden- und Unfallversicherung sind wir ein führender globaler Anbieter im Privat- und Gewerbekundengeschäft. Größe ist entscheidend. Sie hilft uns, Produkte erschwinglich zu machen und eine hohe Servicequalität zu garantieren. Das gelingt uns, denn gemessen am Prämienvolumen zählen wir in über 60% unserer Schaden- und Unfallversicherungsmärkte zu den 3 größten Anbietern. Darüber hinaus sind wir der weltweit führende Kreditversicherer, ein bedeutender Akteur in der Reiseversicherung und betreiben die größte Direktversicherungsplattform in Europa. Im Bereich Lebens- und Krankenversicherung bieten wir ein umfassendes Angebot an Altersvorsorge, Kranken- und Risikoversicherungen an. Wir halten einen Marktanteil von über 30% im Leben-Neugeschäft in Deutschland, sind europaweit breit aufgestellt, gehören zu den 5 größten Anbietern im US-amerikanischen Rentenversicherungsmarkt und schreiben Geschäft im gesamten asiatischen Raum. Unser Produktangebot in der Lebensversicherung spiegelt eine langjährige Erfolgsbilanz bei Produktinnovation wieder, insbesondere im Bereich kapitaleffizienter Sparprodukte. Nun zu unserer Vermögensverwaltung.

Speaker #4: Our life business benefits from a strong track record in providing innovative retirement solutions for our clients. Now, moving on to our third business segment, asset management.

Speaker #4: Beyond insurance, around 20% of our profits come from asset management through PIMCO and Allianz Global Investors. This contributes stable income and enhances diversification. PIMCO is a leading fixed income and alternative investments manager with a particularly strong presence in the United States.

Speaker #4: They manage some of the largest active fixed income funds and also have strong alternative asset capabilities. Allianz Global Investors focuses on multi-asset, equity, and alternative investments, working closely with our insurance distribution channels and partners, with strong footholds in Europe and Asia.

Speaker #4: Together, they manage both our group insurance assets and third-party funds of around 2 trillion euro. Contributing steady fee income and further diversifying earnings. Geographic breadth and distribution.

Andrew Ritchie: Rund 20% unseres Gewinns stammen aus der Vermögensverwaltung von PIMCO und Allianz Global Investors. Dies trägt zu insgesamt stabilen Erträgen bei und erhöht die Diversifikation. PIMCO ist ein führender Vermögensverwalter im Bereich festverzinslicher Wertpapiere und alternativer Anlagen mit besonders starker Präsenz in den US. PIMCO verwaltet einige der größten aktiv gemanagten Rentenfonds und verfügt zudem über umfassende Expertise bei alternativen Anlagen. Allianz Global Investors konzentriert sich auf Multi Asset, Anleihen, Aktien und alternative Anlagen und arbeitet eng mit unseren Versicherungsvertriebskanälen und Partnern zusammen. Allianz Global Investors ist in Europa und Asien stark vertreten. PIMCO und Allianz Global Investors verwalten sowohl einen Großteil der Kapitalanlagen der Allianz Group als auch Drittkundengelder in Höhe von rund EUR 2 billion. Hierdurch generieren wir stetige Gebühreneinnahmen und diversifizieren unsere Erträge. Als Ganzes sind wir als Allianz in unserem Heimatmarkt Germany sehr stark vertreten.

Speaker #4: We have a very strong position in our home market, Germany, leading positions across Europe. A significant presence in the US savings and investment market alongside strong franchises in Australia and Asia.

Speaker #4: Our products reach customers through a wide range of distribution channels, from agents and brokers to direct platforms and corporate partners. This combination provides both resilience and broad customer access.

Speaker #4: It also ensures exposure to opportunities for growth, in particular growing demand for protection and retirement solutions driven by global trends like aging societies, increasing health costs, and climate change.

Speaker #4: Our strategy for 2025 to 2027. Our current strategic cycle runs from 2025 to 2027 and is supported by three key priorities. First, we want to drive smart growth by winning new customers, increasing customer retention, and expanding cross-selling opportunities across our business.

Speaker #4: Second, we are reinforcing productivity. This means continuing to reduce our non-life expense ratio through technology, and through smart use of artificial intelligence, and ongoing process efficiencies.

Andrew Ritchie: Wir nehmen führende Marktpositionen in ganz Europa ein und sind im US-amerikanischen Rentenversicherungsgeschäft ein bedeutender Akteur. Darüber hinaus sind wir in Australien und Asien breit aufgestellt. Unsere Produkte erreichen Kunden über ein breites Spektrum an Vertriebskanälen, von Agenturen über Makler bis hin zu Direktvertrieb und Zusammenarbeit mit Finanz- und Nichtfinanzpartnern. Diese Kombination sorgt für hohe Resilienz und sichert einen breiten Kundenzugang. Gleichzeitig profitieren wir von Wachstumschancen, insbesondere von der steigenden Nachfrage nach Versicherungs- und Altersvorsorgelösungen, getrieben durch globale Megatrends wie alternde Gesellschaften, steigende Gesundheitskosten und Klimawandel. Unser aktueller Strategiezyklus erstreckt sich über die Jahre 2025 bis 2027 und stützt sich auf drei Kernprioritäten. Erstens wollen wir intelligentes Wachstum erzielen, indem wir Neukunden gewinnen, die Kundenbindung stärken und Cross-Selling-Potenziale in unserem gesamten Unternehmen ausbauen. Zweitens steigern wir unsere Produktivität. Das bedeutet, unsere Kostenquote im Schadenunfallbereich weiter zu senken durch neue Technologien, durch klugen Einsatz von künstlicher Intelligenz und durch fortlaufende Prozessoptimierung.

Speaker #4: Third, we are strengthening resilience. By reinforcing our balance sheet and risk management to deliver strong returns even in volatile environments. We have set ambitious financial targets, and shareholder returns.

Speaker #4: We target core earnings per share growth of 7 to 9%, a core return on equity of at least 17%, and operating capital generation of 24 to 25 percentage points in 2027.

Speaker #4: To ensure we hold enough capital to meet policyholders' obligations even under stress, we target to maintain a solvency to ratio of at least 180%.

Speaker #4: At the end of 2025, it was 218%. This supports our attractive payout policy. We recognize the importance of regular income for our shareholders. This reliability is a cornerstone of our investment case.

Speaker #4: Our policy consists of two elements. Firstly, to pay a dividend per share amounting to the highest 60% of shareholders' net income, adjusted for extraordinary and volatile items, or at least previous year's level in the event that our net income would be lower than the year before.

Andrew Ritchie: Drittens stärken wir die Widerstandsfähigkeit des Konzerns weiter, um auch in Zeiten volatiler oder unsicherer makroökonomischer Entwicklungen attraktive Erträge zu erwirtschaften. Wir haben uns ehrgeizige Finanzziele gesetzt: ein bereinigtes Gewinnwachstum je Aktie von 7% bis 9%, eine Eigenkapitalrendite von mindestens 17% sowie eine Kapitalgenerierung aus eigener Kraft von 24 bis 25 Prozentpunkten im Jahr 2027. Um sicherzustellen, dass wir auch in einem Stressszenario über ausreichend Kapital verfügen, um die Verpflichtungen gegenüber unseren Kunden zu erfüllen, streben wir eine Solvency-II-Kapitalquote von mindestens 180% an. Ende 2025 lag diese bei 218%. Diese Finanzziele erlauben uns weiterhin, eine attraktive Ausschüttungspolitik anbieten zu können. Wir wissen, wie wichtig regelmäßige Erträge für unsere Aktionärinnen und Aktionäre sind. Diese Verlässlichkeit ist ein Eckpfeiler unseres Investment Cases. Unsere Politik umfasst zwei Elemente.

Speaker #4: For fiscal year 2025, we intend to pay 17.10 euro per share. Secondly, a minimum of 15% additional capital return on average for the financial years 2025 to 2027.

Speaker #4: This would most likely take the form of share buybacks. In 2025, we bought back shares worth €2 billion. Further information about our payout policy can be found in our capital management video or in our annual report.

Speaker #4: The Allianz equity story in a nutshell. Put simply, Allianz combines scale and leadership with broad diversification: a fortress balance sheet, a clear strategy, and a proven ability to create sustainable long-term value.

Speaker #4: For more than a century, individuals, families, and businesses around the world have trusted Allianz to protect what matters most to them: these strengths underpin our long-term investment case, and define our purpose: we secure your future.

Speaker #4: Thank you for watching. Willkommen zu Allianz Equity Story. Ich bin Andrew Ritchie, Leiter Investor Relations. Dieses Video wird von einem Avatar präsentiert, dadurch können wir die Informationen schneller aktualisieren und in verschiedenen Sprachen bereitstellen.

Andrew Ritchie: Erstens die Zahlung einer Dividende je Aktie in Höhe von 60% des auf die Anteilseigner entfallenden Jahresüberschusses, bereinigt um außerordentliche und volatile Posten. Falls unser Jahresüberschuss niedriger als im Vorjahr ausfällt, bleibt die Dividende je Aktie unverändert auf Vorjahresniveau. Für das Geschäftsjahr 2025 wollen wir eine Dividende von EUR 17.10 je Aktie ausschütten. Zweitens die Zusage einer durchschnittlichen Rückgabe von zusätzlich mindestens 15% für die Geschäftsjahre 2025 bis 2027. Dies erfolgt höchstwahrscheinlich in Form von Aktienrückkäufen. Wir haben zum Beispiel im Jahr 2025 eigene Aktien im Wert von EUR 2 billion zurückgekauft. Weitere Informationen zu unserer Ausschüttungspolitik finden Sie in unserem Video zur Dividendenpolitik oder in unserem Geschäftsbericht. Wie lässt sich die Allianz Equity Story zusammenfassen? Einfach ausgedrückt: Die Allianz vereint Größe und Führungsstärke mit breiter Diversifikation, einer starken Bilanz, einer klaren Strategie und der nachweislichen Fähigkeit, langfristig nachhaltigen Wert zu schaffen.

Speaker #4: Seit mehr als 130 Jahren hilft die Allianz Menschen und Unternehmen dabei, mit Risiken umzugehen und abzusichern. Heute bildet genau diese Stärke kombiniert mit unserer globalen Ausrichtung und einer umsichtigen Unternehmensführung die Grundlage unseres Erfolgs.

Speaker #4: Die Allianz zählt zu den weltweit größten Finanzdienstleistungsunternehmen, mit Schwerpunkt auf Versicherung und Vermögensverwaltung. Wir erzielen ein Geschäftsvolumen von rund 187 Milliarden Euro verwalten rund 2 Billionen Euro an Vermögen für Dritte bei einer Marktkapitalisierung von etwa 140 Milliarden Euro.

Speaker #4: Die Allianz wurde im Jahr 1890 gegründet, ist der größte Versicherer Europas, einer der größten weltweit und wurde von Interbrand zum siebten Mal in Folge als wertvollste Versicherungsmarke der Welt ausgezeichnet.

Andrew Ritchie: Seit mehr als einem Jahrhundert vertrauen Menschen, Familien und Unternehmen auf der ganzen Welt auf uns, um das zu schützen, was ihnen am wichtigsten ist. Diese Stärken bilden die Grundlage für unseren langfristigen Investment Case und definieren unser Leitbild unseres Handelns: We secure your future. Vielen Dank für Ihre Aufmerksamkeit.

Speaker #4: Warum sind Versicherungen wichtig? Versicherungen sind ein wichtiger Bestandteil des täglichen Lebens und spielen eine zentrale Rolle in unserer Gesellschaft und der Gesamtwirtschaft. Versicherungen dienen als Sicherheitsnetz für Privatpersonen und Unternehmen und bieten Schutz für Eigentum, Finanzen, Gesundheit und Leben.

Speaker #4: Sie geben Unternehmen die Zuversicht, in Wachstum zu investieren, oder schützen Privatpersonen auf Reisen oder bei der Planung ihrer Altersvorsorge. Versicherungen sind zudem ein langfristiges Geschäft.

Speaker #4: Versicherer müssen Verpflichtungen erfüllen, die oft Jahrzehnte in die Zukunft reichen. Das erfordert Kapitalstärke, diszipliniertes Risikomanagement und erhebliche finanzielle Ressourcen. Und warum Allianz? Die Branche ist stark reguliert und kapitalintensiv.

[Company Representative] (Allianz): Well, good morning. Good morning, ladies and gentlemen, and welcome to our media conference, our financial media conference for the year. On the panel, we have two new faces. We have Jackie Hunt with us, member of the boards responsible for asset management and our US life business. To my right from your point of view, we have Giulio Terzariol, our new CFO. We will first hear from Mr. Bäte, as usual, who will give us an overview of the past year and the outlook onto the coming year. After that, we will have Mr. Terzariol with the financial results of 2017 in detail. After him, Günther Thallinger will give us some status update on investments. Finally, we will have Ms. Hunt with an update on our asset management business. Following that, you will have time for your questions.

Sabia Schwarzer: Well, good morning. Good morning, ladies and gentlemen, and welcome to our media conference, our financial media conference for the year. On the panel, we have two new faces. We have Jackie Hunt with us, member of the boards responsible for asset management and our US life business. To my right from your point of view, we have Giulio Terzariol, our new CFO. We will first hear from Mr. Bäte, as usual, who will give us an overview of the past year and the outlook onto the coming year.

Speaker #4: Das schafft hohe Markteintrittsbarrieren. Hierin liegt ein klarer Vorteil der Allianz: Wir verfügen über eine der stärksten Bilanzen der Branche, ein AA-Rating von Standard & Poor's, eine Kapitalausstattung, die mehr als doppelt so hoch ist wie die regulatorischen Anforderungen, sowie ein konservatives Liquiditätsmanagement.

Speaker #4: Rund 80% unseres Gewinns erwirtschaften wir durch den Verkauf von Versicherungen. Schauen wir uns nun also unsere Versicherungssparten genauer an. Im Bereich Schaden und Unfallversicherung sind wir ein führender globaler Anbieter im Privat- und Gewerbekundengeschäft.

Sabia Schwarzer: After that, we will have Mr. Terzariol with the financial results of 2017 in detail. After him, Günther Thallinger will give us some status update on investments. Finally, we will have Ms. Hunt with an update on our asset management business. Following that, you will have time for your questions. Ms. Hunt will talk in English. If you need simultaneous interpretation, feel free to put on the headphones. Of course, the questions will also be translated. With this, I would like to hand over to Mr. Bäte.

Speaker #4: Größe ist entscheidend: Sie hilft uns, hohe Servicequalität zu garantieren. Das gelingt uns, denn gemessen am Prämienvolumen zählen wir in über 60% unserer Schaden- und Unfallversicherungsmärkte zu den drei größten Anbietern.

[Company Representative] (Allianz): Ms. Hunt will talk in English. If you need simultaneous interpretation, feel free to put on the headphones. Of course, the questions will also be translated. With this, I would like to hand over to Mr. Bäte. Thank you very much, Ms. Schwarzer. Thank you also from my side. Thank you for coming to Munich that early in the morning. I would like to present to you the results for the year 2017. Let me start first with the CEO assessment and outlook. As usual, the slides are in English. This year almost all of us will be talking in German. Especially glad that we have my colleague Jackie Hunt with us, which gives a sign that internationalization and globalization have materialized in a personal view on the Board of Management. Welcome to you.

Speaker #4: Darüber hinaus sind wir der weltweit führende Kreditversicherer, ein bedeutender Akteur in der Reiseversicherung und betreiben die größte Direktversicherungsplattform in Europa. Im Bereich Lebens- und Krankenversicherung bieten wir ein umfassendes Angebot an Altersvorsorge, Kranken- und Risikoversicherungen an.

Oliver Bäte: Thank you very much, Ms. Schwarzer. Thank you also from my side. Thank you for coming to Munich that early in the morning. I would like to present to you the results for the year 2017. Let me start first with the CEO assessment and outlook. As usual, the slides are in English. This year almost all of us will be talking in German. Especially glad that we have my colleague Jackie Hunt with us, which gives a sign that internationalization and globalization have materialized in a personal view on the Board of Management. Welcome to you.

Speaker #4: Wir halten einen Marktanteil von über 30% im Leben neu Geschäft in Deutschland, sind europaweit breit aufgestellt, gehören zu den fünf größten Anbietern im US-amerikanischen Rentenversicherungsmarkt und schreiben Geschäft im gesamten asiatischen Raum.

Speaker #4: Unser Produktangebot in der Lebensversicherung spiegelt eine langjährige Erfolgsbilanz bei Produktinnovationen wider, insbesondere im Bereich Kapitaleffizienter Sparprodukte. Nun zu unserer Vermögensverwaltung. Rund 20% unseres Gewinns stammen aus der Vermögensverwaltung von PIMCO und Allianz Global Investors.

Oliver Bäte: If I count Mr. Thallinger also as a foreigner, an Austrian, then I'm the only German on board here, apart from Ms. Schwarzer. No, I'm American. Well, I'm the only German here. Let me start with the presentation, we will then have enough time for your interesting questions. Of course, there are some interesting topics to discuss. 2017 was a truly challenging year and especially challenging year for our industry. Oftentimes you tend to forget that we are still suffering from ultra-low rates, even though in the United States, interest rates turnaround seems to be coming up, which is not visible in Europe so far. We have too much quantitative easing and too much cheap money, which puts pressure on our revenues and returns. We had the natural catastrophes.

Speaker #4: Dies trägt zu insgesamt stabilen Erträgen bei und erhöht die Diversifikation. PIMCO ist ein führender Vermögensverwalter im Bereich festverzinslicher Wertpapiere und alternativer Anlagen mit besonders starker Präsenz in den USA.

Speaker #4: PIMCO verwaltet einige der größten aktiv gemanagten Rentenfonds und verfügt zudem über umfassende Expertise bei alternativen Anlagen. Allianz Global Investors konzentriert sich auf Multi-Asset-Anleihen, Aktien und alternative Anlagen und arbeitet eng mit unseren Versicherungsvertriebskanälen und Partnern zusammen.

Oliver Bäte: 2017 will probably become the most expensive year for the insurance industry, especially driven by the events in the Caribbean and the US when it comes to natural catastrophes. We had a special one-off, the auction topic at the beginning of the year in the UK. Finally, we were able to hand over the Oldenburgische Landesbank to a new owner. There was something we had to take into account, which we hadn't calculated with and which will also be a topic for 2018 to a high degree. That's the weakness of the US dollar, which due to the especially high returns we generate in the US, has a negative aspect, at least when it comes to book values on our revenues and also on our operational results and the net income for the year.

Speaker #4: Allianz Global Investors ist in Europa und Asien stark vertreten. PIMCO und Allianz Global Investors verwalten sowohl einen Großteil der Kapitalanlagen der Allianz Gruppe als auch Drittkundengelder in Höhe von rund €2 Billionen.

Speaker #4: Hierdurch generieren wir stetige Gebühreneinnahmen und diversifizieren unsere Erträge. Als Ganzes sind wir als Allianz in unserem Heimatmarkt Deutschland sehr stark vertreten. Wir nehmen führende Marktpositionen in ganz Europa ein und sind im US-amerikanischen Rentenversicherungsgeschäft ein bedeutender Akteur.

Speaker #4: Darüber hinaus sind wir in Australien und Asien breit aufgestellt. Unsere Produkte erreichen Kunden über ein breites Spektrum an Vertriebskanälen. Von Agenturen über Makler bis hin zu Direktvertrieb und Zusammenarbeit mit Finanz- und Nichtfinanzpartnern.

Speaker #4: Diese Kombination sorgt für hohe Resilienz und sichert einen breiten Kundenzugang. Gleichzeitig profitieren wir von Wachstumschancen, insbesondere von der steigenden Nachfrage nach Versicherungs- und Altersvorsorgelösungen, getrieben durch globale Megatrends wie alternde Gesellschaften, steigende Gesundheitskosten und Klimawandel.

Oliver Bäte: Towards the end of the year, in addition to this, we had to take provisions through the tax reform to our deferred tax assets. Nevertheless, Allianz had a wonderful development in 2017. First of all, for our shareholders, let me start with this. Our shareholders were truly satisfied and put the shares up 27%, including dividends. The total return increased by 27%, and that was not to the detriment of our solvency strength. Our Solvency II capitalization has reached 229%. We have a very strong capitalization, which is a result of the consistent work the colleagues did over the past year. The turnaround in life insurance, which we started years ago, was continued in a very consistent way and will continue to do that.

Speaker #4: Unser aktueller Strategiezyklus erstreckt sich über die Jahre 2025 bis 2027 und stützt sich auf drei Kernprioritäten. Erstens wollen wir intelligentes Wachstum erzielen, indem wir Neukunden gewinnen, die Kundenbindung stärken, und Cross-Selling-Potenziale in unserem gesamten Unternehmen ausbauen.

Speaker #4: Zweitens steigern wir unsere Produktivität. Das bedeutet, unsere Kostenquote im Schaden-Unfall-Bereich weiter zu senken, durch neue Technologien, durch klugen Einsatz von künstlicher Intelligenz und durch fortlaufende Prozessoptimierung.

Oliver Bäte: What's great, after two or three years of shrinking in life insurance, we've started to grow again. That is to say, we have the right product structures and the right sales channels in place, and we will now really push ahead with a lot of strength. The operating result was in the upper half of our target range at EUR 11.1 billion, and the shareholders' net income was at EUR 6.8 billion, in spite of the effects, especially from OLB taxes and all that we had to deal with. We finalized the first share buyback in Allianz's history and are in the process of finalizing the second one in the Q1. By the end of April, we will have finalized that as well.

Speaker #4: Drittens stärken wir die Widerstandsfähigkeit des Konzerns weiter, auch in Zeiten volatiler oder unsicherer makroökonomischer Entwicklungen attraktive Erträge zu erwirtschaften. Wir haben uns ehrgeizige Finanzziele gesetzt.

Speaker #4: Ein bereinigtes Gewinnwachstum je Aktie von 7 bis 9 %, eine Eigenkapitalrendite von mindestens 17 % sowie eine Kapitalgenerierung aus eigener Kraft von 24 bis 25 % im Jahr 2027.

Speaker #4: sicherzustellen, dass wir auch in einem Stressszenario über ausreichend Kapital verfügen, die Verpflichtungen gegenüber unseren Kunden zu erfüllen, streben wir eine Solvency-to-Kapitalquote von mindestens 180% an.

Oliver Bäte: We increased our dividend to EUR 8, an increase by 5% to a historic record level, which shows that we reflect the figures and can translate them into dividends for the shareholders. That will lead to great dividend return in spite of the strongly increased share price. We are a little concerned, let me say this upfront, we're a little concerned about 2018. I talked about this in Davos already, and we've seen this on the stock exchanges. We need a market correction in the sense that we've reached a very volatile environment. Interest rates have started to increase. Inflation is coming back in the US, and that will lead to volatility. I don't think that's been finalized with the volatilities we've seen over the past weeks.

Speaker #4: Ende 2025 lag diese bei 218%. Diese Finanzziele erlauben uns weiterhin eine attraktive Ausschüttungspolitik anbieten zu können. Wir wissen, wie wichtig regelmäßige Erträge für unsere Aktionärinnen und Aktionäre sind.

Speaker #4: Diese Verlässlichkeit ist ein Eckpfeiler unseres Investmentcases. Unsere Politik umfasst zwei Elemente: Erstens die Zahlung einer Dividende je Aktie in Höhe von 60% des auf die Anteilseigner entfallenden Jahresüberschusses, bereinigt außerordentliche und volatile Posten.

Speaker #4: Falls unser Jahresüberschuss niedriger als im Vorjahr ausfällt, bleibt die Dividende je Aktie unverändert auf Vorjahresniveau. Für das Geschäftsjahr 2025 wollen wir eine Dividende von 17,10€ je Aktie ausschütten.

Oliver Bäte: We have to prepare for the fact that the whole year might be coined by volatilities in the capital markets, and that is why we will continue to keep our capital positions strong on a sustainable basis. Let me now come to page 3. Use the clicker. Okay. I would like to give you a short overview about what's happened in the different segments in P&C, Life Health and Asset Management. What are the main developments or what were the main developments of the year from my point of view? Mr. Terzariol will then give you the detailed figures on this later on, and Ms. Hunt when it comes to Asset Management. Mr. Thallinger will let you know what about on the investment side.

Speaker #4: Zweitens die Zusage einer durchschnittlichen Rückgabe von zusätzlich mindestens 15% für die Geschäftsjahre 2025 bis 2027. Dies erfolgt höchstwahrscheinlich in Form von Aktienrückkäufen. So haben wir zum Beispiel im Jahr 2025 eigene Aktien im Wert von 2 Milliarden Euro zurückgekauft.

Speaker #4: Weitere Informationen zu unserer Ausschüttungspolitik finden Sie in unserem Video zur Dividendenpolitik oder in unserem Geschäftsbericht. Wie lässt sich die Allianz Equity Story zusammenfassen? Einfach ausgedrückt: Die Allianz vereint Größe und Führungsstärke mit breiter Diversifikation, einer starken Bilanz, einer klaren Strategie und der nachweislichen Fähigkeit, langfristig nachhaltigen Wert zu schaffen.

Oliver Bäte: Mr. Thallinger is also responsible for Global Life and Health, so he'll also certainly be willing to answer your questions on life insurance as well. All the topics will be covered here by the panelists. Let me start with property and casualty. The first topic that we're really strong about and really proud about is that we had one of the most difficult years when it comes to natural catastrophes in our history. The figures haven't been fully set. The different experts, especially from reinsurance, are talking about EUR 45 to 50 billion of insured losses. We've had major losses, but not often has they haven't been fully insured. Allianz went through this relatively unscathed. This is not due to the fact that we passed all this on to reinsurers.

Speaker #4: Seit mehr als einem Jahrhundert vertrauen Menschen, Familien und Unternehmen auf der ganzen Welt auf uns, das zu schützen, was ihnen am wichtigsten ist. Diese Stärken bilden die Grundlage für unseren langfristigen Investmentcase und definieren unser Leitbild unseres Handelns, wie secure your future.

Speaker #4: Vielen Dank für Ihre Aufmerksamkeit. Well, good morning. Good morning, ladies and gentlemen, and welcome to our media conference, a financial media conference for the year. On the panel we have two new faces.

Oliver Bäte: We have a great reinsurance structure, but the main point is that we withdrew from highly exposed areas because the premium sets the prices weren't fitting to the risk. I'm extremely proud of the colleagues, especially Mr. Theiss's colleagues in reinsurance, that how well they've managed the situation. The second topic is the turnaround in Latin America. As you know, we had to fight for and struggle for quite some time with recession in Brazil, with problems with the profitability in Argentina, which led to difficulty with profitability as a whole in Latin America. In 2017, we completed the turnaround in spite of negative effects.

Speaker #4: We have Jackie Hunt with us, member of the board's responsible for asset management and our US life business, and to my right from your point of view, we have Giulio Terza Riol, our new CFO.

Speaker #4: We will first hear from Mr. Berte, as usual, who will give us an overview of the past year and the outlook onto the coming year.

Speaker #4: After that, we will have Mr. Terza Riol with the financial results of the year 2017 in detail. After him, Günter Thalinger, who will give us a status update on investments. And finally, we will have Ms. Hunt with an update on our—following that, you will have time for your questions.

Oliver Bäte: I wanted to have a little bit better result, but it's a great effort by the colleagues led by Iván de la Sota, who've been able not just to consistently implement our Allianz business model in Latin America, but who've grown profitably again. That is highly important. The third effect of that is important to me when it comes to looking at the year 2017, that is the joint venture we've closed with Liverpool Victoria. That is the first time that one of the oldest friendly societies has linked up with a stock-listed, with an exchange-listed company, which shows trust into Allianz. We've been able to position Allianz as the third-largest P&C insurer in the United Kingdom.

Speaker #4: Ms. Hunt will talk in English, and if you need simultaneous interpretation, feel free to put on the headphones. Of course, the questions will also be translated.

Speaker #4: And with this, I would like to hand over to Mr. Berte. Thank you very much, Ms. Schwarzer. Thank you also from my side, and thank you for coming to Munich that early in the morning.

Speaker #4: I would like to present to you the results for the year 2017, and let me start first with the CEO assessment and outlook. As usual, the slides are in English, and this year almost all of us will be talking in German, but especially glad that we have my colleague Jackie Hunt with us, which gives a sign that the internationalization and globalization have materialized in a personal view on the board of management.

Oliver Bäte: What is just as important, ladies and gentlemen, is that we have a direct insurance business, which we've tried to strengthen for years in Allianz, we need to bring this ahead even more. LV= is the brand in the UK which has the highest trust of customers. In the center of our renewal agenda, we have customer satisfaction, we can learn a lot from LV= when it comes to the question how in a highly competitive market you can gain margin, but at the same time satisfy your customers to a high degree. These topics, direct business and customer-centric direct business, that is something we'll have to deal with intensively over the coming years. Those are my three highlights from P&C, now I would like to come to life and health insurance.

Speaker #4: So, welcome to you. And if I count, Mr. Thalinger also has a foreigner in Austria, then I'm the only German on board here. Apart from Ms. Schwarzer—no, I'm American.

Speaker #4: Oh, so I'm the only German here. Okay, let me start with the presentation. And we will then have enough time for your interesting questions and, of course, your awesome interesting topics to discuss.

Speaker #4: 2017 was a truly challenging year, and an especially challenging year for our industry. Oftentimes, you tend to forget that we are still suffering from ultra-low rates, even though the United States interest rate turnaround seems to be coming up, which is not visible in Europe's reform.

Oliver Bäte: One topic that we're especially proud about is when we started with our renewal agenda, we said we want to have a new business margin in spite of falling interest rates of above 3%. We were asked how this could be possible. We said by the end of 2018, 80% of our new business should be in products which are more capital efficient and don't have any long-term guarantees. You'll see the figures on this in a minute. We said we want to do this in a way that after a phase of corrections, we'll continue to grow strongly again. If you look at the figures, we've come very close to our goal for 2018. I say with all the confidence in my colleagues that we will reach these goals.

Speaker #4: We have too much quantitative easing and too much cheap money, which puts pressure on our revenues and returns. Then we had the natural catastrophes.

Speaker #4: 2017 will probably become the most expensive year for the insurance industry, especially driven by the events in the Caribbeans and the US when it comes to natural catastrophes.

Speaker #4: And we had special one-offs, the Axon topic at the beginning of the year in the UK. Then, finally, we were able to hand over the Oldenburgische Landesbank to a new owner, and there was something we had to take into account, which we hadn't calculated with, and which will also be a topic for 2018 to a high degree, and that's the weakness.

Oliver Bäte: The new business has grown by 30%, which we didn't think was possible. That had a strong new business margin of 3.4%, so 4 basis points above the target range we set ourselves at the time. We've grown again. Topline has grown even though we're taking old business, legacy business out of our portfolio. The third area, asset management. When I started in May 2015, in addition to the issues in life insurance capital, and there were the outflows that we had at PIMCO, the huge outflows. Last year now we had EUR 150 billion in third-party net inflows.

Speaker #4: The weakness of the US dollar, which due to the especially high returns we generate in the US has a negative aspect, at least when it comes to book values, on our revenues and also on our operational results.

Speaker #4: And the net income for the year. Towards the end of the year, then in addition to this, we had to take provisions through the tax reform to our deferred tax assets.

Speaker #4: Nevertheless, Allianz had a wonderful development in 2017. First of all, for our shareholders, let me start with this. Our shareholders were truly satisfied and put the shares up 27%, including dividends.

Oliver Bäte: We have reached the highest level ever of assets under management with EUR 1,960 billion. We've been able to further improve our productivity by 1.5 percentage points to 62%. Very strong figures which might not be reflected that much in the year-end results, but which are important to understand the results. I would like to underline how consistently we've worked on these topics. Coming back to life health. In 2015, we started with 64% of preferred products, and we came up at 72%, 2016, and then 76% for 2017. New business from 21% to 30%. For new business margin, we went up from 2.7 to 3.2 to 3.4.

Speaker #4: So the total return increased by 27%, and that was not to the detriment of our solvency strength. Our solvency to capitalization has reached 229%.

Speaker #4: So we have a very strong capitalization, which is a result of the consistent work the colleagues did over the past year. The turnaround in life insurance, which we started years ago, was continued in a very consistent way and we will continue to do that.

Speaker #4: And what's great after two or three years of shrinking in life insurance, we've started to grow again. That is to say, we have the right product structures, in the right sales channels, in place, and we will now really push ahead with a lot of strength.

Speaker #4: The operating results was in the upper half of our target range at 11.1 billion euros, and the shareholders' net income was at 6.8 billion euros.

Speaker #4: In spite of the effects especially from Axon Oliver taxes and all, that we had to deal with. We finalized the first share buyback in Allianz's history, and our in the process of finalizing the second one in the first quarter.

Oliver Bäte: We had negative inflows, EUR -20 last year, now to EUR 150 billion inflows in asset management. Cost income ratio was at 65% in 2015, 63.4% in 2016, and 61.9% in 2017. Each and every individual KPI has shown the right trend against the environment that we've described, which has led to hiccups for some of our competitors. Let us look into the details of the segments. Natural catastrophes. On page 4, you can see the estimated industry losses and how they add up, and what the market share, if you wish, that Allianz has in these losses.

Speaker #4: So by the end of April, we will have finalized that as well, and we increase our dividend to 8 euros and increase by 5% to a historic record level, which shows that we reflected the figures and can translate them into dividends for the shareholders.

Speaker #4: And that will lead to a great dividend return in spite of the strongly increased share price. We are a little concerned, let me say this at the upfront.

Speaker #4: We are a little concerned about 2018. I talked about this in Davos already, and we've seen this on the stock exchanges. We need a market correction in the sense that we've reached a very volatile environment.

Oliver Bäte: Even if we looked at only our US share, which is at 1.2%, we have maximum of half of our market share that we have to take into the losses. If you take the global market share we have, we are far below 2. We have vast conditions. On page 5, you can see the changes in the new business, the change mix. I went back on purpose to 2013 because we didn't start this topic when I took over office. No, in 2013, we had a new business margin of only 2.1%. Traditional products made up more than half of our product mix. As of just 76% in the target segment already for 2017.

Speaker #4: Interest rates have started to increase. Inflation is coming back in the US, and that will lead to volatility. And I don't think that's been finalized with the volatilities we've seen over the past weeks, but we have to prepare for the fact that the whole year might be coined by volatilities in the capital markets, and that is why we will continue to keep our capital positions strong on a sustainable basis.

Speaker #4: Let me now come to page three. Here's the clicker. Okay. I would like to give you a short overview about what's happened in the different segments in P&C, Life/Health, and Asset Management.

Oliver Bäte: Only 4 points away from our target and the new business margin of 3.4%. Just to explain once again the success in asset management, here you can see in the third-party net new money and if result the 3 out of benchmarks for the 6th time, when we with an outperformance of only 63%. In Q4 2017, with EUR 45 billion and 91% of outperformance, we were strongly ahead of our competitors. This of course, also translates into our ability to use our capital for our shareholders. What you can see on page 7 is the development of our solvency and what we returned in cash to our shareholders and what the plan is in this regard for 2018.

Speaker #4: What are the main developments or what were the main developments of the year from my point of view? Mr. Tessario will then give you the detailed figures on this later on, and Ms. Hunt, when it comes to asset management.

Speaker #4: And Mr. Thalinger will let you know what it was about on the investment side. Mr. Thalinger is also responsible for global life and health, so he'll also certainly be willing to answer your questions on life insurance as well.

Speaker #4: So all the topics will be covered here by the panelists. Let me start with the property and casualty. The first topic that we're really strong about and really proud about is that we had one of the most difficult years when it comes to natural catastrophes in our history.

Speaker #4: The figures haven't been fully set. The different experts, especially from reinsurance, are talking about $45 to $50 billion of insured losses. We've had major losses, but oftentimes they haven't been fully insured.

Oliver Bäte: We started with EUR 2 billion in 2013, then EUR 2.4 billion, EUR 3.1 billion in 2015, EUR 3.3 billion in 2016, EUR 6.4 billion in 2017, and more than EUR 4.4 billion for this year. Let me say at this point that our share buyback will be consistently implemented, so in sum to more than EUR 23 billion. Solvency has increased as our Solvency II models was approved in the first year, 2016. There were several changes, only at the beginning of 2016 we received the approval, we had to change, for example, spread adjustments, which cost us some percentage points. We had to model negative interest rates, which reduced solvency. There will be other topics which will reduce our solvency.

Speaker #4: And Allianz went through this relatively unscathed. And this is not due to the fact that we passed all this on to reinsurers. We have a great reinsurance structure, but the main point is that we withdrew from highly exposed areas because the premium sets the prices.

Speaker #4: We're in fitting to the risk, and I'm extremely proud of the colleagues, especially Mr. Tyson's colleagues in reinsurance, for how well they've managed the situation.

Speaker #4: The second topic is the turnaround in Latin America. As you know, we had to fight for and struggle for quite some time with recession in Brazil, with problems with the profitability in Argentina, which led to difficulty with profitability as a whole in Latin America.

Speaker #4: And in 2017, we completed the turnaround in spite of negative effects. I wanted to have a little bit better result, but it's a great effort by the colleagues led by Ivan de la Sota.

Oliver Bäte: Nevertheless, our capital force and capital strength has consistently increased and enables us to really invest into our future. Talking about future investments and what have we done in this regard. On page 8, you can see an overview of that. Let me start with what we've sold. People always say we're only buying, buying, but that's not true. We have just sold Korea on 31 December 2016, one of the most important transactions of our recent history, which added 5 percentage points to our solvency. We also gave up our P&C business there. We had a deal with China Life last year about selling a back book in Taiwan, and we also sold OLB. Entrepreneurs who want to further develop the bank.

Speaker #4: I've been able not just to consistently implement our Allianz business model in Latin America, but we've grown profitably again. And that is highly important.

Speaker #4: I think the third effect of that is important to me when it comes to looking at the 2017. That is the joint venture we've closed with Liverpool Victoria.

Speaker #4: That is the first time that one of the oldest friendly societies has linked up with the stock-listed when the exchange-listed company which shows trust into Allianz.

Speaker #4: And we've been able to position Allianz as the third largest P&C insurer in the United Kingdom. But what is just as important, ladies and gentlemen, is that we have a direct insurance business which we've tried to strengthen for years in Allianz, and we need to bring this ahead even more.

Speaker #4: And LV is the brand in the UK which has the highest trust of customers. And in the center of our renewal agenda, we have customer satisfaction and we can learn a lot from LVI.

Oliver Bäte: We were not able to do so because this is simply not our core business. What did we invest in? Well, I talked about LV before. Many countries were far away from top positions in the insurance market, and the UK is one of the most important insurance markets in the world, Brexit notwithstanding. With our investment into LV and P&C, we've been able to improve our position there, and we want to further invest there. Minority core business that we know a lot about. 1 percentage point per year put into that. We Standard Chartered, which is highly important for us because in P&C in Southeast Asia, we used to be underdeveloped, and then we bought up the minority shares in Allianz Irish Life.

Speaker #4: When it comes to the question how in a highly competitive market you can gain margin, but at the same time satisfy your customers to a high degree.

Speaker #4: And these topics: direct business and customer-centric, direct business. That is something we'll have to deal with intensively over the coming years. Those are my three highlights from P&C, and now I would like to come to Life and Health insurance.

Speaker #4: One topic that we're especially proud about is when we started with our renewal agenda, we said we want to have a new business margin in spite of falling interest rates of above 3%.

Speaker #4: And we were asked how this could be possible. And we said by the end of '18—2018—80% of our new business should be in products which are more capital efficient.

Speaker #4: And don't have any long-term guarantees. And you'll see the figures on this in a minute. And we said we want to do this in a way that after a phase of corrections, we'll continue to grow strongly again.

Oliver Bäte: We should be P&C market leader in Ireland with organic development. We bought in countries such as Switzerland, Slovakia, legal insurance business. Sri Lanka, we did an important step ahead, a society that's well-developed. We will be the number 2 and have the aspiration to become market lead in Sri Lanka. We closed a very important cooperation with HVB. In the year before, we already gained Santander as a bank assurance partner for Germany. We also did investments into BIMA, a very creative new business model, how you can efficiently offer services to customers in emerging markets. That was developed in Ghana first in Africa, and then further developed to Asia.

Speaker #4: And if you look at the figures, we've come very close to our goals for all the confidence in my colleagues that we will reach these goals.

Speaker #4: Our new business has grown by the new business has grown by 30%, which we didn't think was possible. And that had ourselves and that had a strong business margin of new business margin of 3.4% so far, base points above the target range we set ourselves at the time.

Speaker #4: And we're growing again. Top line is growing even though we're taking old business, legacy business, out of our portfolio. The third area: asset management.

Speaker #4: When I started in May 2015, in addition to the issues in life insurance, capital, and there were the outflows that we had, a PIMCO, huge outflows.

Oliver Bäte: We are systematically developing ourselves and really entering into high growth markets so that we can gain profitable growth for years to come. Ladies and gentlemen, we do all this without any volatilities, because if you look at page 89, you can see how our target delivery has developed over the years from 2012 to 2017. Each year, we've delivered more than our midpoint. We have to say that we always take a cautious approach in our planning. We have a highly conservative approach also for 2018 because we believe there will be a lot of volatility. We have these EUR 300 million outperformance in spite of the critical developments. Taking the US dollar out, it would have been EUR 11.3 billion. That's due to foreign exchange volatilities.

Speaker #4: And last year, we had €150 billion in third-party net inflows. We had reached the highest level ever of assets under management, with €1.96 trillion.

Speaker #4: And we've been able to further improve our productivity by 1.5 percentage points—262%. So, very strong figures, which might not be reflected that much in the year-end results, but which are important to understand the result.

Speaker #4: And I would like to underline how consistently we've worked on these topics. Coming back to life health, in 2015, we started with 64% of preferred products and we came up at 72% in 2016.

Speaker #4: And then 76 for 2017. New business from '21 to 30%. And for new business margin, we went up from 2.7 to 3.2 to 3.4.

Oliver Bäte: The interest rates have decreased over all these years, and the euro swap hasn't moved upwards anymore over all these years. As a large part of our income stems from fixed income investments and the low interest rates are still a part of all our results, we have to counteract, which is sometimes stressing, and the colleagues do a great job in that. Now, what does it look like for 2018? Well, we started in 2015 with EUR 10.7 billion operating profit, then EUR 11.1 in 2017. FX adjusted for error, that was EUR 11.3 more. For our target range for 2018 is between EUR 10.6 and EUR 11.6. Conservative planning because of the following topics, highly volatile capital markets.

Speaker #4: We had—we switched from negative inflows, minus €20 billion last year, now to €150 billion inflows in asset management. Cost-income ratio was at 65% in 2015, 63.4% in 2016, and 61.9% in 2017.

Speaker #4: So each and every individual KPI has shown the right trend. Against the environment hiccups for some of our competitors. But let us look into the details of the segments.

Speaker #4: Natural catastrophes. On page four, you can see the estimated industry losses and how they add up. And what the market share, if you wish that Allianz has in these losses.

Oliver Bäte: We have to assume that there will be corrections on the market and also the low price of the US dollar. I would like to mention the ROE target. We have a target of 13.0% on the basis of a figure of 12.5% in 2015. Now, our shareholders' capital has grown much stronger, the figure looks lower. If we adjust by the OLB disposal, we'd be at 12.2%.

Speaker #4: And even if we looked at only our US share, which is at 1.2%, we have a maximum of half of our market share that we had to take into the losses.

Speaker #4: And if you take the global market share we have, we are far below what you would have to expect in under normal conditions. On page five, you can see the changes in the new business mix.

Oliver Bäte: Given that we can still do quite a bit on the capital side, given that the share buyback, which we hadn't included this year, will be included here, that we have the US taxes, that there are other topics that go into our direction, then we feel very comfortable, highly comfortable to at least come close to our ambition, if not to 13% return on equity. As such, most of our competitors don't even have double-digit figures. Earnings per share and dividend per share, we are on a comfortable development path. We've just suggested to raise the dividend to EUR 8, and in our plan to increase that by 5%, we need to come up to EUR 8.4, and we think that this is possible. We've all said that our dividend is sacred.

Speaker #4: I went back on purpose to 2013 because we didn't start with this topic. When I took over office, no, in 2013, we had a new business margin of only 2.1%.

Speaker #4: And traditional products made up more than half of our product mix. And as I've just said, for 2013, we went from a margin of 3.4%.

Speaker #4: And on the you see when we started with only 63%. And 91% of outperformance we were strongly ahead of our competitors. Of course, then also insurability to use capital for our shareholders.

Oliver Bäte: There have been years in the past when we increased the payout ratio to strengthen our dividend, and if we're able to do this, we would always do that. Earnings per share buybacks, US tax reform, those are just two elements that play into that. Now, what do we have ahead of us when we come to content? Going away from figures back to business, I would like to mention, and that's something that comes to my mind now. We shouldn't just be proud of all the financial KPIs that we've reached. I'll come back to customer and employee satisfaction because that's not included on slide, but that's important to me. Before that, let me talk about sustainability.

Speaker #4: And what we've returned cash to our shareholders and what the plan for 2018. We started with 2 billion in 2013 and 2.4 billion, 3.1 billion in 2015, 3.3 in 2016, 6.4 billion in 2017, and more than 4.4 billion this year.

Oliver Bäte: Ms. Schwarzer, her team worked together with Mr. Talinger and others, I'm really proud about the fact that we once again received the crown as the number 1 in the Dow Jones Sustainability Index last year. I'm extremely proud that we've been able to reach that again. There are all kinds of measures behind that, be it on environment, be it on employee leadership, on governance, the ESG assessments on the investment side, how we are driving these ahead. We have a multiplication of these topics, and that's extremely important for our employees because they demand that from us. Day by day asking us, What do you do in this regard? Let me just mention 1 topic in this regard, the Inclusive Meritocracy Index on the bottom left.

Speaker #4: Let me say this point: consistently implemented. So in some more than 23 billion. And solvency has increased over all this, which is not self-evident.

Speaker #4: Our solvency to model was only was approved in '16. There were several changes. And then only at the beginning of 2016, we received approval.

Speaker #4: And we had to change for example, strategy adjustments, which cost us percentage points. We had to model negative interest rates which reduced solvency. And there will be other topics which we'll reduce our solvency.

Speaker #4: But nevertheless, our capital strength has consistently increased and enables us to really invest into our future. Now, talking about future investments, ladies and gentlemen, what have we done in this regard?

Oliver Bäte: You might remember that in 2015, the board team said that we don't just want to improve the financial strength of Allianz, but especially when it comes to the health of the organization, as we call it, customer trust, customer satisfaction, and employee leadership. Not just employee satisfaction, but employee leadership. These are the elements we want to get ahead with. We have value for the so-called Inclusive Meritocracy Index and what we wanted to reach for 2018. We've already reached that. We already reached this in 2017. Now, when it comes to customer satisfaction, there's still a bit to do for us. We started with close to 50% of our businesses which were above the market or even loyalty leaders. In 2016, we came up to 55%, and in 2017, we were up at 60%.

Speaker #4: On page eight, you can see an overview of that. Let me start with what we've sold. People always say we're only buying, buying, buying, but that's not true.

Speaker #4: We haven't just sold Korea. On 31st of December 2016, one of the most important transactions of our recent history, which added 5 percentage points to our sales.

Speaker #4: But we also gave up our P&C business. We had a deal with China Life. Last year, selling a backbook in. The insurance market in the UK is one of the most important insurance markets in the world.

Oliver Bäte: Now you will say you want to reach 75%. How is that possible? Well, there's a large number of OEs which are on the step from market average to above market average. We're working hard on reaching this goal as well. Allianz is not just financially very sound, but it also takes care and consistent care of the topic of employee motivation and customer satisfaction, because without that, these financial figures wouldn't be worth too much. What will we do to make sure that also in the future, we can deliver to our shareholders and customers?

Speaker #4: Brexit, notwithstanding, and with our into core business that we percentage points per year. And the charted, which is highly important for us because in P&C in Southeast Asia, we used to be underdeveloped.

Oliver Bäte: Let me start with P&C. The topic of turnaround was completed in P&C. There's a lot to be done about nat cat. We're adding the high intensity and the more higher frequency. You might remember Friederike is a storm and in the early weeks of the year. Underwriting, it has to be looked at in terms of prices. Some of our products are too low in our prices. Secondly, we know that the combined ratio can be reached by us unless we have a year like 2017, because the attritional loss ratio, adjusted by large volatile losses, has improved considerably by a lot of work.

[Company Representative] (Allianz): Let me start with P&C. The topic of turnaround was completed in P&C. There's a lot to be done about nat cat. We're adding the high intensity and the more higher frequency. You might remember Friederike is a storm and in the early weeks of the year. Underwriting, it has to be looked at in terms of prices. Some of our products are too low in our prices. Secondly, we know that the combined ratio can be reached by us unless we have a year like 2017, because the attritional loss ratio, adjusted by large volatile losses, has improved considerably by a lot of work.

Speaker #4: And then we bought out the minority share of Allianz Life. So we should be P&C market leader in Ireland from an organic with organic development.

Speaker #4: We bought in countrysides such as Switzerland, Slovakia, and legal insurance business. It's Sri Lanka we did an important step ahead. A society that's well-developed, we will be the number two and have the aspiration to be market leader in Sri Lanka.

Speaker #4: We closed a very important cooperation with HVD in. Before, we had—we already gained Santander as a bank insurance partner for Germany.

Oliver Bäte: What we're focused on at the moment is just to start a cultural change, and that is going to be described a bit more detailed on our capital market day. That is the simplification and productivity increases. We are really successful in a lot of areas, but where we're not as good is the profitability. We need to be self-critical here. After two and a half years of investments in digitalization, we have created a lot of assets. One thing we haven't managed yet to simplify the business model underneath as much as making it needed for our, so that the reduced cost ratio can be expressed by that and can be felt by our customers. Mr. Terzariol is going to show it.

[Company Representative] (Allianz): What we're focused on at the moment is just to start a cultural change, and that is going to be described a bit more detailed on our capital market day. That is the simplification and productivity increases. We are really successful in a lot of areas, but where we're not as good is the profitability. We need to be self-critical here. After two and a half years of investments in digitalization, we have created a lot of assets. One thing we haven't managed yet to simplify the business model underneath as much as making it needed for our, so that the reduced cost ratio can be expressed by that and can be felt by our customers. Mr. Terzariol is going to show it.

Speaker #4: And then we also investment into Beamer, a very creative new business model how you can efficiently offer services to customers in emerging markets. That was developed in Ghana first, in Africa, and then further developed further developed to Asia.

Speaker #4: So we are systematically developing ourselves and really entering into high-growth markets. So that we can gain profitable growth for years to come. And ladies and gentlemen, we do all this without any volatilities because if you look at page A9, you can see how we've our targets delivery has developed over the years from 2012 to 2017.

Oliver Bäte: After 15 years, for the first time ever, we are going to reduce our expense ratio. The target is that we can be re-reducing that by 30 basis points, and we have made the investments last year. In life and health, we want to go on with a change of mix, and there's a lot to be done in our inventory, and we want to grow profitably, which is definitely possible with our markets and products. Like in Germany, where we can do that very successfully. I think you can nicely see that by our figures. PIMCO turnaround, that has been completed. Now we're focusing on the question of how do we behave in an interest environment that is, first of all, volatile and drives inflation. PIMCO will be perfectly positioned there.

[Company Representative] (Allianz): After 15 years, for the first time ever, we are going to reduce our expense ratio. The target is that we can be re-reducing that by 30 basis points, and we have made the investments last year. In life and health, we want to go on with a change of mix, and there's a lot to be done in our inventory, and we want to grow profitably, which is definitely possible with our markets and products. Like in Germany, where we can do that very successfully. I think you can nicely see that by our figures. PIMCO turnaround, that has been completed. Now we're focusing on the question of how do we behave in an interest environment that is, first of all, volatile and drives inflation. PIMCO will be perfectly positioned there.

Speaker #4: Each year, we've delivered more than our midpoint. We have to say that we always take a cautious approach in our planning. We have a highly conservative approach also for 2018 because we believe there will be a lot of volatility.

Speaker #4: But we have this €300 million outperformance in spite of the critical developments. Taking the US dollar out, it would have been €11.3 billion.

Speaker #4: So this is due to foreign exchange volatilities. But the interest rates have decreased over all these years. And the euro swap hasn't moved upwards any over all these years.

Speaker #4: And as a large part of our income stems from fixed income investments, the low interest rates are still part of all our results.

Oliver Bäte: What would, you should not buy an index fund then, of course, you would definitely lose your money. The more, it is important that a basic point should be reached, and the more important is it also that our colleagues in PIMCO know what they're doing. That's why the inflows in the first 2 months are really strong, Jackie Hunt can say something about that. Productivity will remain important. There's also an Allianz Global Investors. A lot has happened. Productivity has increased. Also the diversification away from pure share investments. I think it's less than 40%. We're still purely depending on equity assets. Here we want to continue our profitable growth and grow on a diversified basis. Capital management and just cash generation was optimized.

[Company Representative] (Allianz): What would, you should not buy an index fund then, of course, you would definitely lose your money. The more, it is important that a basic point should be reached, and the more important is it also that our colleagues in PIMCO know what they're doing. That's why the inflows in the first 2 months are really strong, Jackie Hunt can say something about that. Productivity will remain important. There's also an Allianz Global Investors. A lot has happened. Productivity has increased. Also the diversification away from pure share investments. I think it's less than 40%. We're still purely depending on equity assets. Here we want to continue our profitable growth and grow on a diversified basis. Capital management and just cash generation was optimized.

Speaker #4: We have to counteract, which is sometimes stressing, and the colleagues do a great, great job in that. Now, what does it look like for 2018?

Speaker #4: Well, we started in 2015 with €10.7 billion in operating profit. Then €11.1 billion in 2017—effects adjusted for that was €11.3 billion more. And for our target range for 2018, it's between €10.6 and €11.6 billion.

Speaker #4: Conservative planning because of the following topics: highly volatile capital markets. We have to assume that there will be corrections on the market. And also the low rate of the low price of the US dollar.

Speaker #4: Then I would like to mention the ROE target. We have a target of 13.0% on the basis of a figure of 12.5% in 2015.

Speaker #4: Now our shareholders' capital has grown much stronger, so the figure looks lower. But if we adjust for the OLB disposal, we'd be at 12.2.

Oliver Bäte: We have a very attractive dividend policy where, as you can tell by our suggestion to increase our dividend to EUR 8 and to achieve our target 2018. We're gonna do that as well. In order to anticipate 1 question about M&A, we want to grow profitably. It's also okay to grow externally, but only if it makes sense strategically and also when it makes sense financially. Otherwise, we would not do that. We're disciplined, and we're gonna stay disciplined. That's the end of my presentation. I would like to pass over to my colleague, Mr. Tesariol. Thank you. Yes, good morning.

[Company Representative] (Allianz): We have a very attractive dividend policy where, as you can tell by our suggestion to increase our dividend to EUR 8 and to achieve our target 2018. We're gonna do that as well. In order to anticipate 1 question about M&A, we want to grow profitably. It's also okay to grow externally, but only if it makes sense strategically and also when it makes sense financially. Otherwise, we would not do that. We're disciplined, and we're gonna stay disciplined. That's the end of my presentation. I would like to pass over to my colleague, Mr. Terzariol. Thank you.

Speaker #4: And given that we can still do quite a bit on the capital side, given that the share buyback, which we hadn't included this year, will be included here, that we have the US taxes, that there are other topics that go into our direction, then we feel very comfortable, highly comfortable, to at least come close to our ambition, if not to 13% return on equity as such.

Giulio Terzariol: Yes, good morning. First of all, I will start with an overview of the results of Q4 2017, then I will talk about the overall annual results in 2017 in more detail. In Q4 2017, we've rendered a solid operating performance and revenues went up by 10%. All segments made a contribution to this positive growth rate. The operating profit is EUR 2.8 billion and it's below the previous year level. There are two effects Mr. Bäte mentioned, the FX exchange ratios and the effects on that. In Q4 2017, compared with Q4 2016, that provided a burden of EUR 100 million.

Giulio Terzariol: First of all, I will start with an overview of the results of Q4 2017, then I will talk about the overall annual results in 2017 in more detail. In Q4 2017, we've rendered a solid operating performance and revenues went up by 10%. All segments made a contribution to this positive growth rate. The operating profit is EUR 2.8 billion and it's below the previous year level. There are two effects Mr. Bäte mentioned, the FX exchange ratios and the effects on that. In Q4 2017, compared with Q4 2016, that provided a burden of EUR 100 million.

Speaker #4: Most of our competitors don't even have double-digit figures. Earnings per share and dividend per share—we are uncomfortable. Development path, we've just suggested to raise the dividend to €8, and in our plan to increase that by 5%.

Speaker #4: We need to come up to €8.4. And we think that this is possible. We've always said that our dividend is sacred. So there have been years in the past when we increased the payout ratio to strengthen our dividend, and then we were able to do this.

Speaker #4: We would always do that. And earnings per share, share buybacks, US tax reform—those are just two elements that play into that. Now, what do we have ahead of us when we come to content?

Speaker #4: Going away from figures back to business, I would like to mention and that's something that comes to my mind now. We shouldn't just be proud of all the financial KPIs that we've reached.

Giulio Terzariol: Also in Q4 2016, we had a special effect in Allianz Life, and we made a restatement. When you consider the EUR 140 million, and if you adjust that for the figures 2016, the operating revenues would be on the level of 2016. There were a few extraordinary effects. If you adjust it by that, the operating profit is on the level of the previous year. It's even more when you take the EUR 2.8 billion, and if we are analyzing these EUR 2.8 billion, then we would have EUR 11 billion operating profit, which is above the midpoint of the outlook for the whole year. That means the quarter looks quite solid.

Speaker #4: And I'll come back to customer and employee satisfaction, because that's not included on the slide, but that's important to me. But before that, let me talk about sustainability.

Speaker #4: So Ms. Schwartz, her team worked together with Mr. Tulling and others and we were really—I'm really proud about the fact that we once again received the crown as the number one in the Dan Jones Sustainability Index last year.

Speaker #4: And I'm extremely proud that we've been able to reach that again. There are all kinds of measures behind that: speed on environment, speed on employee leadership, on governance, the ESG assessments, on the investment side, how we are driving these ahead.

Giulio Terzariol: If you look at the operating figures, they always develop in the right direction, all of them. The new business margin has went up considerably. The cost income ratio and Asset Management went down. The combined ratio from the improvement is not that obvious, you just need to look at and adjust the combined ratio by the nat cats. There you can see that the combined ratio has improved by more than 1 percentage point. In the operating profits, we see the shareholders' net income, we also see the burden of the sale of OLB. Also the tax reform has shown EUR 135 million in the quarter. That's why this was in effect in their quarter.

Speaker #4: So we have a multiplication of these topics. And that is extremely important for our employees because they demand that from us. Day by day, asking us, "What do you do in this regard?" So let me just mention one topic in this regard: the inclusive meritocracy.

Speaker #4: Index on the bottom left. You might remember that in 2015, the board team said that we don't just want to improve the financial strength of Allianz, but especially when it comes to the health of the organization as we call it, customer trust, customer satisfaction, and employee leadership, not just employee satisfaction, but employee leadership.

Speaker #4: These are the elements we want to get ahead with. And we have a value for the so-called inclusive meritocracy index and what we wanted to reach for 2018.

Giulio Terzariol: Actually, we have a solid picture for Q4, and the operating key figures have developed pleasantly. If we go to page 5, we see the development for the over a year. Also in looking at the whole year, the assumptions have increased by 5%. In particular, the asset management area and also life insurance segment have contributed to that growth rate. The operating profit is in the upper half of our target range. Actually, it is on record level. It's not that much, actually, but it's on record level. In 2017, also, we had a higher burden from nat cats, and also the FX exchange rates have not really helped us in 2017.

Speaker #4: We've already reached that. We already reached this in 2017. Now, when it comes to customer satisfaction, there's still a bit to do for us.

Speaker #4: We started with close to 50% of above-the-market or even loyalty leaders in 2016. We came up to 55%. And in 2017, we were up at 60%.

Speaker #4: And now you will say you want to reach a large number of OEs which are on the step from market average to above market average.

Speaker #4: So we're working hard on reaching this goal as well. So Allianz is not just financially very sound, but it also takes care—and consistent care—of the topic of employee motivation and customer satisfaction, because without that, these financial figures wouldn't be worth too much.

Speaker #4: So what will we do to make sure that also in the future we can deliver to our shareholders and customers?

Speaker #1: Versicherung an.

Giulio Terzariol: That's why the performance of 2017, I see that as outstanding. The shareholders' net income, we see a slight decline, and basically, that is attributed to higher restructuring expenses. The earnings per share is relatively stable, and the dividend per share, as Mr. Bäte said before, is increasing by 5%. Generally speaking, we are rendering a good picture for the year 2017. Here, you can see our solvency rate and that has increased by 11 percentage points. That means the capital strength of Allianz remains to be very high.

Speaker #2: topic of turnaround was completed in P&C. There's a lot to be done about NATCAT. So we're adding the high-intensity. The high or the more higher frequency.

Speaker #2: You might remember Frederica's storm. And in the early weeks of the year, it's underwriting and has to be looked at in terms of prices.

Speaker #2: Some of our products are too low in our prices. And secondly, we know that the combined ratio can be reached by us unless we have a year like 2017, because the attritional loss ratio—those adjusted by large, volatile losses—has improved considerably by a lot of work.

Giulio Terzariol: The main drivers for this development of the solvency rate were, first of all, the operating profit, the market developments have also had a positive effect because the interests went up and the credit spreads went down, and the share markets generally showed a positive picture. We had a few model changes, and these model changes rendered a positive contribution to the solvency rate. All of these factors have you know, more than ever compensated the consumption from our consumption and also from the buyback programs. In the equity based on IFRS, you see a slight decline. That is driven by the FX exchange rates, and the FX effects have shown EUR 2 billion effect in our capital position.

Speaker #2: Now, what we're focused on at the moment is to start a cultural change that is going to be described a bit more detailed on our capital market day.

Speaker #2: That is the simplification and productivity increases. We're really successful in a lot of areas. But where we're not as good is the profitability. We need to be self-critical here.

Speaker #2: And after two and a half years of investments in digitalization, we have created a lot of assets. But one thing we haven't managed yet is to simplify the business model underneath as much as making it needed for our—so that the reduced cost ratio can be expressed by that and can be felt by our customers.

Speaker #2: Mr. Tessariol is going to show it after 15 years for the first time ever. We're going to reduce our expense ratio, and the target is that we can be reducing that by 30 basis points.

Giulio Terzariol: Page 9, that is, basically only to give you an overview. I talked about the main drivers of our solvency rate, and this helps you to get a more detailed picture backed by figures. I would skip that slide. Here we can start to show our P&C segment. In P&C, we've seen an internal growth of 2.3%, and which is broadly spread with only a few exceptions. On the positive side, I'd like to mention Allianz Partners, Spain, and also Latin America, where we see a good recovery, not only in the combined ratio, but also when it comes to growth. Also Eastern Europe has developed very nicely. What is important, even more important, is to look at the outlook of 2018.

Speaker #2: And we have made the investments last year. And then life and health, we want to go on with the change of mix, and there's a lot to be done in our inventory.

Speaker #2: And we want to grow profitably. We're just definitely possible with our markets and products and like in Germany where we can do that very successfully.

Speaker #2: I think you can nicely see that by our figures. The PIMCO turnaround—that has been completed. Now we're focusing on the question of how do we behave in an interest environment that is, first of all, volatile and drives inflation?

Speaker #2: PIMCO will be perfectly positioned there, so you should not buy an index fund. Then, of course, you would definitely lose your money. So, the more it is important that a basic point should be reached, and the more important is it also that our colleagues in PIMCO know what they're doing.

Speaker #2: That's why the inflows in the first two months are really strong and check your hand can say something about that. And productivity, we'll remain important.

Giulio Terzariol: Our expectation is that the rate changes are rather going to be positive and stable in 2018, and that's why our combined ratio should also be improved and should also support that improvement. On page 13, you see the development of the operating profit. Basically, the focus is on the combined ratio. That's where the action is, has going down by 0.9 percentage points, but it is driven by the nat cat impact. We can see the combined ratio, and you adjust it by the nat cats and also by the run-off ratio. The combined ratio has improved by 0.4%. That means we have an operating improvement.

Speaker #2: There's also an Allianz Global Investors. A lot has happened. Productivity has increased. And also the diversification away from pure share investments—I think it's less than 40%.

Speaker #2: We're still purely depending on equity assets. And here we want to continue our profitable growth and grow on a diversified basis. Capital, capital management, and just cash generation was optimized we have a very attractive dividend policy.

Speaker #2: As you can tell by our suggestion to increase our dividend to 8 euros and to achieve our target 2018, we're going to do that as well.

Speaker #2: And in order to anticipate one question about M&A, yeah, we want to grow profitably. It's also okay to grow externally, but only if it makes sense strategically and also when it makes sense financially.

Speaker #2: Otherwise, we would not do that. We're disciplined, and we're going to stay disciplined. That's the end of my presentation. I would like to pass over to my colleague, Mr. Tessariol.

Giulio Terzariol: If you look at the combined ratio and adjust it by the weather-related losses, which are the losses, they would not be seen as cat losses, but still based on a per loss basis, then the combined ratio has improved by almost 1% as compared with 2016. On the next slide, we can see the development of the combined ratio and the profit by countries. The operating profit in most countries has increased, with a few exceptions, Germany, and AGCS. In Germany and also in AGCS, we've seen a higher burden from nat cats. In Germany, we have more weather-related losses.

Speaker #2: Thank you. Yes, good morning. First of all, I will start with an overview of the results of the fourth quarter 2017. And then I will talk about the overall annual results in 2017 in more detail.

Speaker #2: Then, in the final quarter of 2017, we've rendered a solid operating performance, and revenues went up by 10%. All segments made their contribution to this positive growth rate.

Speaker #2: The operating profit is 2.8 billion and it's below the previous year level, but there are two effects. Mr. Bete mentioned the FX exchange ratios and the effects on that.

Giulio Terzariol: In AGCS, we had a few large losses. The development in the United Kingdom is characterized by the Ogden changes. Generally, most OEs have seen an improvement of the operating profit, which is a good sign for our outlook for 2018. The investment results and the investment yield were relatively stable. The operating investment result has only been reduced by EUR 17 million. The amounts from equity and shares compensated the lower interest rates. We could not expect that we would have a trend like that this will continue. In the future, we would expect that the revenues from shares would rather be stable. Still, we would get some headwinds from the developments of the interest rate.

Speaker #2: And in the fourth quarter 2017, where the compared with the fourth quarter 2016, that provided a burden by 100 million. And also in the fourth quarter 2016, we had especially effect in Allianz Life.

Speaker #2: And we made a restatement. So when you consider the 140 million, and if you adjust that for the figures in 2016, the operating revenues would be on the level of 2016.

Speaker #2: So there were a few extraordinary effects, but if you adjust it by that, the operating profit is on the level of the previous year, but it's even more when you take the 2.8 billion and if we're analyzing these 2.8 billion, then we would have 11 billion operating profit.

Speaker #2: Which is above the midpoint of the outlook for the whole year. That means the quarter looks quite solid. And if you look at the operating figures, they always developed in the right direction, all of them.

Giulio Terzariol: Generally speaking, for 2017, the investment result was very good and also better than our expectations. We can go to the life and health segment, which is definitely a new story. The new production has increased by roughly 4%. The new business margin has improved by 70 basic points. If you take these two factors together, our new business value has increased by 30%. It is also important to refer to the quality of our business. We set a target for ourselves, so that means that 80% of the new products should be having capital light product. In 2016, at the end of 2016, we were at 72%. You can see an increase. The tendency is the right tendency, we can say.

Speaker #2: The new business margin has went up considerably. The cost-income ratio and asset management went down. And the combined ratio from the improvement is not that obvious, but you just need to look at and adjust the combined ratio by the net cuts and there you can see that the combined ratio has improved by more than 1 percentage point.

Speaker #2: And in the operating profits, we see the shareholders' net income. Then we also see the burden of the sale of OLB. And also, the tax reform has shown €135 million in the quarter.

Speaker #2: And that's why this was an effect in the quarter. But actually, we have a solid picture for the fourth quarter. And the operating key figures have developed.

Speaker #2: Pleasantly. If we go to page number five, we see the development for the overall year. And also in looking at the whole year, the assumptions have increased by 5%.

Giulio Terzariol: We can also be confident that by 2018, we will be going up to the 80% level. Page 21 shows the development of our operating profit. First of all, I would like to mention that the operating profit in life and health was above our target range of 4.4, and that's definitely a very good result. We also know that this is not the normal expectation that we have and with what we also considered in our forecast. The slide also shows that the loadings and fees have increased because we had an increased production in Asia and unit-linked products. The investment margin has deteriorated, which is due to the US.

Speaker #2: In particular, the asset management area and also the life insurance segment have contributed to that growth rate. The operating profit is in the upper half of our target range.

Speaker #2: And actually, it is on record level—it's not that much, actually, but it's on record level. But in 2017, we also had a higher burden from net cuts, and also the FX exchange rates have not really helped us in 2017.

Speaker #2: So that's why the performance of 2017, I see that as outstanding. And the shareholders' net income, we see a slight decline and basically that is attributed to a higher restructuring expenses.

Giulio Terzariol: There is compensation for that in other revenue sources, like in the technical margin that has gone up considerably. The increase in the technical margin was driven by Allianz Life. The total of EUR 4.4 billion, the operating profit in Life is on record level, and we've never had such a record high before in Life. This is the value of the new business, that went up 30%, which is the result of a higher new business margin and also increased production. The improvement, which is remarkable, is distributed to all the different OEs. Asia-Pacific is what I would like to stress as.

Speaker #2: And the earnings per share is relatively stable. And the dividend per share, as Mr. Bete said before, is increasing by 5%. So generally speaking, we are rendering a good picture for the year 2017.

Speaker #2: Now here, you can see observancy rate and that has increased by 11 percentage points. That means the capital strength of Allianz remains to be very high.

Speaker #2: The main drivers for this development of the observancy rate were, first of all, the operating profit, and the market developments have also had a positive effect because the interest rates went up and the credit spreads went down.

Speaker #2: And the share markets generally showed a positive picture. And also, we also performed a—we had a few model changes, and these model changes rendered a positive contribution to the observancy rate.

Giulio Terzariol: When you measure it by the new business values, you would call it the third-largest OE in our life insurance in business, which is also important for the growth perspective for the future. Investment margin, that's an important topic. Very strong on 97 basis points. That went down compared with the previous year, that expresses a normalization that we expected anyway. Moreover, we believe that the investment margin will be at 90 to 95 next year, which is a consequence of a benefit that we had in 2017. The volatility was very low, that, of course, rendered a positive effect on our results in life insurance. We cannot always proceed from the assumption that volatility will stay as low as we've seen it in 2017.

Speaker #2: All of these factors have more than ever compensated the consumption from our consumption and also from the buyback programs. In the equity based on IFRS, you see a slight decline that is driven by the FX exchange rates, and the FX effects have shown a €2 billion effect in our capital position.

Speaker #2: Page nine—that is basically only to give you an overview. I talked about the main drivers of observancy rate, and you can see this helps you to get a more detailed picture backed by figures.

Speaker #2: But I would skip that slide. And here we can start to show our P&C segment. In P&C, we've seen an internal growth of 2.3%.

Giulio Terzariol: What is important to mention is that the investment margin goes towards 95%, and that is the expectation for the future. That's stable. That's very good. Now let's look at asset management. 2017 for asset management, it was a very good year. Third-party assets went up by 6%. Obviously, it's quite extraordinary. We had net inflows in PIMCO with EUR 144 billion, which is a great result. As I would like to mention, in Allianz Global Investors, we also seen a positive trend, and that was not the case in 2016.

Speaker #2: And which is broadly spread with only a few exceptions. On the positive side, I'd like to mention Allianz Partners, and Spain, and also Latin America, where we see a good recovery.

Speaker #2: Not only in the combined ratio, but also when it comes to growth. And also, Eastern Europe has developed very nicely. What is important, even more important, is to look at the outlook of 2018.

Speaker #2: And our expectation is that the rate changes are, rather, going to be positive and stable in 2018. And that's why our combined ratio should also be improved and should also support that improvement.

Speaker #2: On page 13, you see the development of the operating profit. So basically, the focus is on the combined ratio. That's where the action is and has going down by 0.9 percentage points.

Giulio Terzariol: As opposed to that, the FX exchange rates, we could see that the impact from FX made EUR 120 billion of our asset bases, and that was reduced by that. That's definitely a relevant figure, and that's definitely headwind. The operating improvement was such good that really compensated this massive headwind. That's definitely a great performance of our asset management segment. On page 29, you can see that the development of the inflows with the revenue or internal revenue growth of 8%, that corresponds basically the development of the assets under management. It's important to note on this slide is the development of the fee margin. In PIMCO, the fee margin is 38.3 basic points, has remained more or less stable seen from the previous year level.

Speaker #2: But it is driven by the net cut impact and we can see the combined ratio and the adjusted by the net cuts and also by the runoff ratio.

Speaker #2: Then the combined ratio has improved by 0.4%. That means we have an operating improvement and also if you look at the combined ratio and adjusted by the weather-related losses, which are the losses they would not be seen as cat losses, but still based on a per loss basis.

Speaker #2: Then the combined ratio has improved by almost 1% as compared with 2016. On the next slide, we can see the development of the combined ratio and the profit by countries.

Giulio Terzariol: In AGI, we've seen a reduction of more than 2 basis points. 1.6 or 1.7 of this reduction is attributed to 2 technical factors, and only 0.4 of this deterioration is a true decline. We also seen that in the last quarter, the fee margin, both in PIMCO and also in AGI, it was very, very stable. The operating profit drivers for asset management. First of all, I'd like to draw your attention to the fact that the operating profit is above the midpoint, although EUR 15 million burden came from the FX impact and the cost-income ratio became better, which is actually an expectation in asset management.

Speaker #2: The operating profit in most countries has increased, with a few exceptions. Germany and HGCS—and both in Germany and also in HGCS—we've seen a higher burden from nat cats. And also in Germany, we have more weather-related losses, and in HGCS, we had a few large losses.

Speaker #2: And the development in the United Kingdom is characterized by the Ogden changes. But generally, most OEs have seen an improvement in operating profit, which is a good sign for our outlook for 2018.

Speaker #2: The investment results and the investment yield that was relatively stable, the operating investment result has only been reduced by 17 million. And the amounts from equity and shares provided for the low compensated the lower interest rates.

Giulio Terzariol: Once the revenues go up, then there is this certain operating leverage, which is expressed in our figures, that the growth in operating profit has outperformed the operating growth of the revenues. On the corporate segment, I'd like to say that all sub-segments have contributed to the improvement of the operating profit in corporate. I would like to talk about the reconciliation between operating profit and net income. You can see, there's a lot of movement here. We had a bit less realized gains than in the past. We had an impairment, was also a bit less. Also what is different than the previous year is the development of the restructuring charges, by roughly EUR 300 million up. One-third of this goes to Allianz Technology.

Speaker #2: We could not expect that we would have a trend like that, that this will continue. But in the future, we would expect that the revenues from shares would rather be stable, but still we would get some headwinds from the developments of the interest rate.

Speaker #2: But generally speaking for 2017, so the investment result was very good and also better than our expectations. So we can go to the life and health segment, which is definitely a new story.

Speaker #2: The new production has increased by roughly 4%. The new business margin has improved by 70 basis points, and so if you take these two factors together, new business value has increased by 30%.

Speaker #2: It's also important to refer to the quality of our business. We set a target for ourselves, so that means that 80% of the new products should be in capital-light products.

Giulio Terzariol: We also made a contribution and of the restructuring charges in AGCS and also in other countries. That corresponds to what Mr. Bäte said before, with getting prepared, the for that combined ratio and with, is going down by 30% in 2018. That is why we made measures in order to reduce that cost rate and also take measures in order to improve our productivity. Then I can talk about the outlook for 2018. For 2018, we have a range of 10.6 to 11.6, with a midpoint of 11.1. That is EUR 0.3 billion higher than the midpoint in 2017.

Speaker #2: And then at the end of 2017, we have 76%, and at the end of 2016, we were at 72%. And you can see an increase, or the tendency is the right tendency, we can say, and we can also be confident that by 2018, we would be going up to the 80% level.

Speaker #2: Page 21 shows the development of our operating profit first of all, I'd like to mention that the operating profit in life and health was above our target range of 4.4.

Speaker #2: And that's definitely a very good result. We also know that this is not the normal expectation that we have and with what we also considered in our forecast.

Giulio Terzariol: If we adjust it by the FX impact, because the midpoint 2017 was calculated with different exchange rates than the midpoint in 2018, we still have EUR 0.3 billion on top. That means the operating increase and improvement that we consider here as well is EUR 0.6 billion. That is definitely a great operating improvement, particularly when you think that Allianz anyway has a very good starting performance. Nevertheless, we have increased our guidance by EUR 0.6, adjusted by FX. In the segments in P&C, we have a target of EUR 5.4 billion, which corresponds to a combined ratio of 94%. In Life & Health, we see EUR 4.2 midpoint, and this is the normalization compared to the level of EUR 4.4.

Speaker #2: The slide also shows that under loadings and fees have increased because we had increased production in Asia and unit-linked products. And the investment margin has deteriorated, which is due to the US, but there is compensation for that in other revenue sources, like in the technical margin, that has gone up considerably.

Speaker #2: The increase in the technical margin was driven by Allianz Live. So the total of 4.4 billion, the operating profit in live is on record level and we've never had such a record high before.

Speaker #2: In Life, this is the value of the new business. That went up 30%, which is the result of a higher new business margin and also increased production.

Giulio Terzariol: In Asset Management, you see an operating profit of EUR 2.4, that is flat compared with the level of 2017, which is due to the FX impact. Adjusted by the FX impact in Asset Management, we would have more than you would expect, definitely more than EUR 2.4. Definitely towards EUR 2.5. The outlook is EUR 11.1, EUR 0.3 above the previous year level. Adjusted by FX impact, we're talking about an improvement of EUR 0.6 billion. Let's look at the overview of our renewal agenda. We're quite confident that we will be able to achieve our targets. It's probably not visible intuitively at first glance.

Speaker #2: The improvement, which is remarkable, is distributed to all the different OEs. Asia Pacific is—what I would like to stress is—and when you measure it by the new business values, you would call it the third largest OE in our life insurance business.

Speaker #2: And which is also important for the growth perspective, for the future. Investment margin, that's an important topic. It's very strong on 97 basis points.

Speaker #2: That went down compared with the previous year. But that expresses a normalization that we expected anyway. And, moreover, we believe that the investment margin will be at 90, 95 next year.

Giulio Terzariol: Just to give you an example, the growth of the earnings per share, where we've seen a growth of 5% that we would like to attain. In order to reach that target, we need an annual surplus of 2018 of EUR 7.3 billion. 2017 annual surplus was EUR 6.1 billion, we know there were a few special impacts. We are going to have a positive impact this year from the US tax reform. We also know that the largest share is in Allianz Trade that also is going to render a contribution. That's why we can set our target of EUR 7.3 billion in order to reach that point. In combined ratio, we're doing fine.

Speaker #2: Which is a consequence of a benefit that we had in 2017. The volatility was very low and that of course rendered a positive effect on our results in life insurance.

Speaker #2: And we cannot always proceed from the example assumption that volatility will stay as low as we've seen it in 2017. But what is important to mention is that the investment margin goes towards 99 to 5, and that is the expectation for the future.

Speaker #2: So that's stable. It's very good. Now let's look at asset management 2017 for asset management. It was a very good year. And third party assets went up by 6%.

Giulio Terzariol: Once we normalize our combined ratio in 2017 for all the special effects, we are slightly above the 94.5% level. We want to reduce 30 basis points of cost anyway. The other basis points we get from the improvement of the technical profitability. Renewal agenda, highly important for us. We are all focused that in the net promoter score and also in the share of the products that we have, that we will also be able to reach our targets. That's really important when it comes to of the share of the newly launched digital products. Let us summarize. 2017's biggest operating profit was at the upper half of our range.

Speaker #2: And obviously, it's quite extraordinary. We had net inflows in PIMCO with 244 billions. 144 billion, which is a great result. And as I would like to mention in Allianz Global Investors, we also have seen a positive trend.

Speaker #2: And that was not the case in 2016. As opposed to that, the FX exchange rates and we could see that the impact from FX made 120 billion euros of our asset basis.

Speaker #2: And that was reduced by that. So that's definitely a relevant figure, and that's definitely a headwind. But the operating improvement was so good that it really compensated for this massive headwind.

Giulio Terzariol: Combined ratio was 95.2, which is in a year where the impact from nat cats were outstanding. I mean, also we heard that it was the most expensive year for the insurance, Munich Re has. There are many peers that are shown loss. In P&C, we were able to say, well, we would still be able to stay within our range in such a year that is characterized by a lot of big nat cats. There was also on record level, and also we had to help for that, but we're still more than EUR 4 billion operating profit and in net inflows and asset management, EUR 115 billion. The solvency ratio was improved, plus 100 percentage points.

Speaker #2: And that's definitely a great performance of our asset management segment. On page 29, you can see the development of the inflows, with the revenue or internal revenue growth of 8%.

Speaker #2: That corresponds basically to the development of the assets under management. What's important to note on this slide is the development of the fee margin. In PIMCO, the fee margin is 38.3 basis points and has remained more or less stable.

Speaker #2: Seen from the previous year level, in AGI, we've seen a reduction of more than 2 basis points. But 1.6 or 1.7 of this reduction is attributed to two technical factors.

Speaker #2: And only 0.4 of this deterioration is true decline. And we also saw that in the last quarter, the fee margin both in PIMCO and also in AGI was very, very stable.

Giulio Terzariol: We had EUR 5 billion buybacks because the EUR 2 billion were also at to the solvency rate of 2017, and the dividend was increased by 5%. Not to forget that the total revenues went up by 5%. No matter how you would look at this performance, I think this is an outstanding performance, and I would like to thank you and my our employees because they made that possible. Thank you very much. I would like pass on the floor to Günther Thallinger, please.

Speaker #2: The operating profit drivers for asset management—first of all, I'd like to draw your attention to the fact that the operating profit is above the midpoint, although a €15 million burden came from the FX impact.

Speaker #2: And the cost-income ratio became better, which is actually an expectation in asset management. Once the revenues go up, then there is a certain operating leverage, which is expressed in our figures.

Speaker #2: The growth in operating profit has outperformed the operating growth of the revenues. And on the corporate segment, I'd like to say that all subsegments have contributed to the improvement of the operating profit in Corporate.

Günther Thallinger: Sorry, I just had to get the technical equipment here. Yeah, let me talk about investment after the very impressive report of Mr. Terzariol. Well, the markets, if you look at them purely from a share point of view, they were highly attractive and doing great in 2017. Increases of 10% to 15% in stock prices could be reached, depending on the market that you look at. Looking at the bond markets, you have to say that the level of these markets is still very low. Even though in Europe we've seen a slight increase of 20 to 22 basis points. Especially taking a German point of view

Speaker #2: And then I would like to talk about the reconciliation between operating profit and net income. And you can see there's a lot of movement here.

Speaker #2: We had a bit less realized gains than in the past, and so we had an impairment—it was also a bit less. But also, what is different than the previous year is the development of the restructuring charges.

Speaker #2: And by roughly $300 million up. And one third of this goes to Allianz Technology. And we also made a contribution of the restructuring charges in HECS and also in other countries.

Speaker #2: And that corresponds to what Mr. Petty said before. We're getting prepared for that combined ratio, which is going down by 30% in 2018. And so that's why we made measures in order to reduce that cost rate.

Speaker #2: We are also taking measures in order to improve our productivity. And then I can talk about the outlook for 2018. For 2018, we have a range of 10.6 to 11.6, with a midpoint of 11.1.

Speaker #2: That is 0.3 billion higher than the midpoint in 2017. And if we adjusted by the FX impact because the midpoint 2017 was calculated with different exchange rates than 2018, we still have 0.3 billion on top.

Speaker #2: That means the operating increase and improvement that we consider here as well is €0.6 billion. And that is definitely a great operating improvement, particularly when you think that Allianz, anyway, has a very good starting performance.

Speaker #2: Nevertheless, we have increased our guidance by 0.6 adjusted by FX. In the segments in P&C, we have a target of 5.4 billion. Which corresponds to a combined ratio of 94.

Speaker #2: In Life and Health, we see 4.2 as the midpoint, and this is the normalization compared with the level of 4.4. And in Asset Management, you see an operating profit of 2.4.

Speaker #2: And that is flat compared with the level of 2017. And which is due to the FX impact adjusted by the FX impact in asset management.

Speaker #2: We would have more than you would expect, definitely more than 2.4, definitely towards 2.5. But the outlook is 11.1, which is 0.3 above the previous year level and adjusted by FX impact.

Speaker #2: We're talking about an improvement of $0.6 billion. Then let's look at the overview of our renewal agenda. We're quite confident that we will be able to achieve our targets.

Speaker #2: And it's probably not visible intuitively at first glance. But just to give you an example, the growth of the earnings per share, where we've seen a growth of 5%.

Speaker #2: That we would like to attain, so in order to reach that target, we need an annual surplus for 2018 of €7.3 billion. In 2017, our annual surplus was €6.1 billion.

Speaker #2: But we know that we're a few special impacts and last year we have we are going to have a positive impact this year from the US tax reform.

Speaker #2: We also know that a large share is in Yulia Hermes, that also is going to render a contribution. So that's why we can set our target of 7.3 in order to reach that point.

Speaker #2: In combined ratio, we're doing fine. Once we normalize our combined ratio in 2017 for all the special effects, we are slightly above the 94.5 level.

Speaker #2: We want to reduce 30 basis points of costs anyway. And the other basis points we get from the improvement of the technical profitability. Renewal agenda, highly important for us.

Speaker #2: And we are all focused on the Net Promoter Score and also on the share of the products that we have, so that we will also be able to reach our targets.

Speaker #2: And that's really important when it comes to the share of the newly launched digital products. But let us summarize our 2017 figures. Operating profit was at the upper half of our range.

Speaker #2: Combined ratio was 95.2. And which is in a year where the impact from Natcats were outstanding. I mean, and also we heard that it was the most expensive year for the insurance Munich resets.

Speaker #2: And there are many peers that are showing loss. And in P&C, we were able to say, well, we would still be able to stay within our range in such a year that is characterized by a lot of big NatCats.

Speaker #2: Then there was also on record level and also we had to help for that. But we're still more than 4 billion operating profit. And in net inflows and asset management, 150 billion.

Speaker #2: And insolvency ratio was improved 100 percentage point. Although we had 5 billion buybacks because the 2 billion we also at to the insolvency rate of 2017.

Speaker #2: And the dividend was increased by 5%. Plus, not to forget that the total revenues went up by 5%. So no matter how you would look at that performance, I think this was an outstanding performance.

Speaker #2: And I would like to thank you and my employees, because they made that possible. Thank you very much. And I would like to pass on the floor to Günther Tallinger, please.

Speaker #2: Entschuldigung.

Speaker #3: So sorry, I just had to get the technical equipment here. But yeah, let me talk about investment after the very impressive report of Mr. Tessarial.

Speaker #3: Well, the markets, if you look at them purely from a share point of view, they were highly attractive. And doing great in 2017. Increases of 10, 15 percent in stock prices.

Speaker #3: Could be reached, depending on the market that you look at. But looking at the bond markets, you have to say that the level of these markets is still very low.