D _ Consolidated Financial Statements Property-Casualty In the business segment Property-Casualty, reportable segments offer The Allianz Group uses operating profit to evaluate the performance a wide variety of insurance products to both private and corporate of its reportable segments as well as of the Allianz Group as a whole. customers, including motor liability and own damage, accident, Operating profit highlights the portion of income before income taxes general liability, fire and property, legal expense, credit, and travel that is attributable to the ongoing core operations of the Allianz Group. insurance. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the Life/Health understanding of the Allianz Group’s underlying operating performance In the business segment Life/Health, reportable segments offer a and the comparability of its operating performance over time. comprehensive range of life and health insurance products on both an Effective 1 January 2021, the Allianz Group has complemented its individual and a group basis, including annuities, endowment and operating profit definition by excluding income taxes related term insurance, unit-linked and investment-oriented products, as well incidental benefits/expenses, and one-time effects from significant as full private health, supplemental health, and long-term care reinsurance transactions with disposal character. These items are not insurance. attendant to the Allianz Group’s sustainable performance. Therefore, the Allianz Group believes that the amended definition of operating Asset Management profit provides more relevant information for investors. In addition, this The reportable segment Asset Management operates as a global year, the Allianz Group recognized for the first time material litigation provider of institutional and retail asset management products and expenses and - in application of the general definition of operating services to third-party investors. It also provides investment profit - specified that those expenses are presented outside operating management services to the Allianz Group’s insurance operations. The profit as these items are not attendant to the Allianz Group’s products for retail and institutional customers include equity and fixed- sustainable performance. income funds as well as multi-assets and alternative products. The To better understand the ongoing operations of the business, the United States, Canada, Europe, and the Asia-Pacific region represent Allianz Group generally excludes the following non-operating effects: the primary asset management markets. − income from financial assets and liabilities carried at fair value Corporate and Other through income (net), The reportable segment Corporate and Other includes the − realized gains/losses (net), management and support of the Allianz Group’s businesses through − impairments of investments (net), its strategy, risk, corporate finance, treasury, financial reporting, − interest expenses from external debt, controlling, communication, legal, human resources, technology, and − specific acquisition and administrative expenses (net), consisting of other functions. Furthermore, it includes the banking activities in acquisition-related expenses (from business combinations), income France, Italy, and Bulgaria, as well as digital investments. taxes related incidental benefits/expenses, litigation expenses, and one-time effects from significant reinsurance transactions with disposal character, Prices for transactions between reportable segments are set on an − amortization of intangible assets, arm’s length basis in a manner similar to transactions with third parties. − restructuring and integration expenses, and Lease transactions are accounted for in accordance with IFRS, except − profit (loss) of substantial subsidiaries classified as held for sale. for intra-Group lease transactions which are classified as operating leases (i.e., off-balance sheet treatment by lessee) for internal and The following exceptions apply to this general rule: segment reporting purposes. Transactions between reportable segments are eliminated in the consolidation. Financial information is − In all reportable segments, income from financial assets and recorded based on reportable segments; cross-segmental country- liabilities carried at fair value through income (net) is treated as specific information is not determined. operating profit if the income relates to operating business. At the Allianz Group, the existing contracts between Group − For life/health insurance business and property-casualty entities in the financial year generally represent the basis for the insurance products with premium refunds, all items listed above presentation of the amounts in the segment reporting. However, in are included in operating profit if the profit sources are shared with individual cases, the internal reporting can differ from the contractual policyholders. There is one exception from this general rule with view. In 2021, this was in particular relevant for the internal charging regard to policyholder participation in extraordinary tax benefits of IT service contracts between the reportable segments Iberia & Latin and expenses: as IFRS require that the consolidated income America and Allianz Partners and Corporate and Other. The deviation statement presents all tax effects in the line item income taxes, even between management and contractual view amounted to € 129 mn when they belong to policyholders, the corresponding expenses for in 2021. The deviation increased the operating result of the reportable premium refunds are shown as non-operating as well. segment Iberia & Latin America and Allianz Partners by € 129 mn, whereas the operating result of the reportable segment Corporate and Other is decreased respectively. 138 Annual Report 2021 − Allianz Group