C _ Group Management Report − no disruptive fiscal or regulatory interference or major litigation, normalized levels. In 2022, we envisage a combined ratio of − level of claims from natural catastrophes at expected average approximately 93 %. The underlying assumption is that the aggregate levels, effect of improvements in pricing, claims management, and − an average U.S. dollar-to-euro exchange rate of 1.19. productivity will compensate for any inflation in underlying claims. As for impacts from natural catastrophes, despite the highly volatile − A 10 % weakening (strengthening) of the U.S. dollar, compared nature of such catastrophes in recent years, we assume claims to to the assumed exchange rate of 1.19 to the euro, would have continue at comparable levels going forward. a negative (positive) effect on operating profits of As the low-interest-rate environment is likely to persist, investment approximately € 0.5 bn. income will remain under pressure due to the rather short investment spans in our Property-Casualty business segment. Going forward, we For further information on our ambitions for the period 2022 - 2024, will continue to actively adapt our investment strategy to changing please see section “Our business aspirations” in the Risk and market conditions. Opportunity Report. Overall, we expect our 2022 operating profit to be € 6.0 bn, plus or minus 10 % (2021: € 5.7 bn). Management’s assessment of expected revenues and earnings for At € 5.0 bn, the operating profit of our Life/Health business segment was above target range in 2021. For 2022, we expect an operating 2022 profit of around € 4.8 bn, plus or minus 10 %. One of the key performance indicators used in the financial In 2021, our total revenues were € 148.5 bn, a 5.7 % increase on a steering of Life/Health is RoE. In 2022, we expect it to be between nominal and a 6.1 % increase on an internal basis1, compared to 2020. 10.0 % and 13.0 % (2021: 13.0 %). For 2022, we envisage overall moderate growth, resulting from growth Allianz continuously works to make the Life/Health business in Property-Casualty, moderate growth in Asset Management, model more resilient to market volatility, for instance, by adjusting our combined with rather stable revenues in Life/Health, owing to our products to market needs while keeping them in line with our strategy. selective focus on profitable growth. Going forward, we will continue to pursue profitable growth and to Our operating profit was € 13.4 bn in 2021. For 2022, we envisage improve our capital-efficient products – always with a strong strong performance in all business segments and an overall operating customer focus – while exploring new market opportunities and profit of € 13.4 bn, plus or minus € 1.0 bn. building on our strong track record of product innovation. In addition, Our net income attributable to shareholders was € 6.6 bn in 2021. we will continue to actively manage both our new and our in-force Consistent with our disclosure practice in the past, and given the business through continuous price reviews, expense management, susceptibility of our non-operating results to capital market asset/liability management, crediting strategies, and reinsurance developments, we refrain from providing a precise outlook for net solutions. As in past years, this should allow us to mitigate the impacts income. However, seeing as our outlook presumes no major of difficult market conditions, in particular negative interest rates, and disruptions in our capital markets, we anticipate a higher net income achieve our profitability targets. for 2022 that supports our dividend policy. With regard to the current uncertainties pertaining to the ongoing proceedings in connection with the Structured Alpha funds please refer to note 37 to the For 2022, we envisage overall moderate third-party net inflows and Consolidated Financial Statements. market returns at both PIMCO and AllianzGI, following this past year of very high inflows. Margins and performance fees should remain relatively stable, resulting in modest operating revenue growth. We In this business segment, we expect revenues to increase by 3 to 5 % in further assume the U.S. dollar will remain relatively stable, compared 2022 (2021: 5 %), of which 1 % will be contributed by our acquisition of to 2021. All things considered, we expect our 2022 operating profit to Aviva in Italy and Poland. Organic growth will be supported by be € 3.4 bn, plus or minus 10 % (2021: € 3.5 bn). favorable price and volume effects. Our cost-income ratio should be around 60 % in 2022 (2021: At Allianz Partners, where we have pooled our B2B2C activities, 58.4 %) as we continue to invest in business growth. Over the mid-term, we expect revenue growth to pick up (subject to the further develop- we expect to grow further, also depending on the market ment of the COVID-19 pandemic). Further growth is likely to happen development. in Germany and Brazil, as well as in Asian markets such as China. We believe that the rise in prices we saw in a number of markets in 2021 will continue in 2022. That said, we will continue to focus on In this business segment, we recorded an operating loss of € 0.8 bn in achieving strong underwriting results by adhering to our strict 2021. For 2022, we envisage an operating loss at a similar level: 0.8 bn underwriting discipline, as we have in previous years, and we will be plus or minus 10 %. prepared to accept a lower top line if we fail to achieve target margins. Our combined ratio was 93.8 % in 2021, below target. This was due to the fact that impacts from natural catastrophes were above 1_Operating revenues adjusted for foreign currency translation and (de)consolidation effects. 88 Annual Report 2021 − Allianz Group