C _ Group Management Report LIFE/HEALTH INSURANCE OPERATIONS Present value of new business 5 Key figures Life/Health1,2,3 premiums (PVNBP) Our PVNBP grew by € 17,117 mn, totaling € 82,565 mn. Most of the 2021 2020 Delta increase was due to higher sales volumes for fixed index annuities in Statutory premiums2 € mn 78,348 74,044 4,304 the United States, and back-book management in Italy and France. Operating profit € mn 5,011 4,359 652 Other factors included increased volumes from unit-linked products in Net income € mn 4,170 3,766 404 Italy, and a large reinsurance treaty at Allianz Reinsurance. Positive Return on equity3 % 13.0 12.8 0.2 %-p effects were partly offset by lower sales volumes for capital-efficient products in the German life business. 4 Present value of new business premiums (PVNBP) by lines of business Statutory premiums % 2021 2020 Delta On a nominal basis, our statutory premiums went up by 5.8 %. This Guaranteed savings & annuities 12.2 13.6 (1.4) includes both unfavorable foreign currency translation effects Protection & health 20.8 17.4 3.3 (€ 766 mn) and positive (de-)consolidation effects (€ 48 mn). On an Unit-linked without guarantee 25.2 24.4 0.8 internal basis, statutory premiums grew by 6.8 % – or € 5,022 mn – to Capital-efficient products 41.9 44.6 (2.7) € 79,021 mn. Total 100.0 100.0 - Statutory premiums in the German life business totaled € 23,868 mn, a 9.0 % decrease on an internal basis that was largely driven by lower single premium sales in our business with capital- Operating profit efficient products. In the German health business, statutory premiums went up to € 3,895 mn – a 4.1 % increase on an internal basis – which was due to strong new business premiums in the comprehensive healthcare coverage as well as premium adjustments. In the United States, statutory premiums rose to € 13,214 mn, a Operating profit by profit sources 37.9 € mn % increase on an internal basis. Most of it was attributable to higher sales of fixed index annuity products as well as of non- 2021 2020 Delta traditional variable-annuity products. Loadings and fees 6,888 6,605 284 In Italy, statutory premiums grew to € 14,021 mn, or 12.3 % on an Investment margin 4,440 4,194 246 internal basis. This was predominantly due to stronger sales for unit- Expenses (7,999) (7,365) (635) linked without guarantee products. Technical margin 1,305 1,132 173 In France, statutory premiums increased to € 7,783 mn, a 5.1 % Impact of changes in DAC 377 (206) 583 rise on an internal basis. It was largely attributable to higher sales of Operating profit 5,011 4,359 652 hybrid products. In the Asia-Pacific region, statutory premiums went up to € 6,972 mn. Most of this rise – 15.7 % increase on an internal basis – was due to sales increases for unit-linked products in Indonesia, Taiwan Our operating profit increased strongly. Key drivers were higher sales and the Philippines. for non-traditional variable-annuity products with higher reserve loadings, an improved investment margin, and the previous year’s loss recognition in the United States. Other factors included increased unit-linked management fees in Italy, an improved investment margin in France, and a better technical margin for the German life and health business. The positive development was partly offset by a write-off for an administrative system in Benelux. Furthermore, higher acquisition costs were largely compensated by the capitalization of deferred acquisition costs. 1_For further information on Allianz Life/Health figures, please refer to note 4 to the Consolidated Financial 4_In this section, our comments in the following section on the development of statutory gross premiums Statements. written refer to values determined “on an internal basis”, i.e., adjusted for foreign currency translation 2_Statutory premiums are gross premiums written from sales of life and health insurance policies as well as and (de-) consolidation effects, in order to provide more comparable information. gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the 5_PVNBP before non-controlling interests. statutory accounting practices applicable in the insurer’s home jurisdiction. 6_The purpose of the analysis of Life/Health operating profit sources is to explain movements in IFRS results 3_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on by analyzing underlying drivers of performance, consolidated for the Life/Health business segment. bonds, net of shadow accounting, at the beginning of the period and at the end of the period. 80 Annual Report 2021 − Allianz Group