D _ Consolidated Financial Statements Purchase Plans was carried out in 2021. Employees of the details on how Allianz Group manages its capital, please refer to the Allianz Group purchased approximately 75 section “Target and strategy of risk management” of the % of the shares of the Risk and purchase plan at a reference price of € 197.82 (2020: € 167.76) per Opportunity Report. share and were allocated one additional share per three shares With Solvency II being the regulatory regime relevant for the purchased, which is equivalent to a discount of approximately 25 Group as of 1 January 2016, the risk profile is measured and steered %. The shares were sold to employees at a mean price of € 148.37 (2020: based on the approved Solvency II internal model1. The Allianz Group € 125.82). As of 31 December 2021, the remaining treasury shares of has introduced a target Solvency ratio range in accordance with Allianz SE held for covering subscriptions by employees in the context Solvency II, based on pre-defined stress scenarios for both the Group of the Employee Stock Purchase Plans of Allianz SE and its subsidiaries and related undertakings, supplemented by ad-hoc scenarios, in Germany and abroad amounted to 38,720 shares. historical and reverse stress tests, and sensitivity analyses. In the year ending 31 December 2021, the total number of The Allianz Group’s Own Funds are composed of the eligible Own treasury shares of Allianz SE decreased by 8,769 (2020: a decrease Funds relating to the Group of internal model and standard formula of 348,188), which corresponds to € 25,116.49 (2020: € 988,015.75) entities, the sectoral Own Funds of entities from other financial sectors, or 0.002 % (2020: 0.08 %) of issued capital as of 31 December 2021. as well as the equivalent Own Funds of entities included via the The treasury shares of Allianz SE and its subsidiaries represented deduction and aggregation (D&A) method. The eligible Own Funds € 0.7 mn (2020: € 0.7 mn) or 0.06 % (2020: 0.06 %) of the issued capital relating to the Group of internal model and standard formula entities as of 31 December 2021. essentially consist of the MVBS excess of assets over liabilities plus qualifying subordinated liabilities, less deductions for foreseeable dividends as well as further deductions relating, for example, to In its meeting on 5 August 2021, the Board of Management of transferability restrictions. Allianz SE resolved to carry out a share buy-back program in an Based on the information available to the Allianz Group as of the amount of up to € 750 mn within a period between August 2021 and end of December 2021 and with a Solvency II capitalization of 209 % 31 December 2021 (Share Buy-Back Program 2021) based on the (2020: 207 %), it is expected that the Group continues to be sufficiently authorization granted by the Annual General Meeting on 9 May 2018. capitalized and compliant with both the regulatory Solvency Capital In the period between 18 August 2021 and 22 October 2021, a total Requirement and the minimum consolidated Group Solvency Capital of 3,835,255 treasury shares with a market value of € 749,998,846.69 Requirement. For further information on Solvency II capitalization, were acquired for an average price of € 195.55. please refer to the section “Solvency II regulatory capitalization” of the All of the treasury shares acquired within the Share Buy-Back Risk and Opportunity Report. Program 2021 have been redeemed according to the simplified The Allianz Group is a financial conglomerate within the scope of procedure without reduction of the share capital. the Financial Conglomerates Directive (FCD). The FCD does not impose a materially different capital requirement on Allianz Group compared to Solvency II. The Allianz Group’s insurance subsidiaries (including Allianz SE) Non-controlling interests prepare individual financial statements based on local laws and € mn regulations. The local regulations establish additional restrictions on As of 31 December 2021 2020 the minimum level of capital and the amount of dividends that may be Unrealized gains and losses (net) 201 354 paid to shareholders. The respective local minimum capital Share of earnings 495 326 requirements are based on various criteria including, but not limited to, Other equity components 3,575 3,093 the volume of premiums written or claims paid, amount of insurance Total 4,270 3,773 reserves, investment risks, credit risks, and underwriting risks. As of 31 December 2021, the Allianz Group believes that there are no outstanding regulatory capital or compliance matters that would have material adverse effects on the financial position or the results of operations of the Allianz Group. For further information on the The Allianz Group’s capital requirements primarily depend on the type Structured Alpha matter please refer to note 37. of business that it underwrites, the industry and geographic locations Some insurance subsidiaries of the Allianz Group are subject to in which it operates, and the allocation of the Allianz Group’s regulatory restrictions on the amount of dividends that can be remitted investments. During the Allianz Group’s annual planning and strategic to Allianz SE without prior approval by the appropriate regulatory dialogs with its related undertakings, internal capital requirements are body. These restrictions require that a company may only pay determined through business plans regarding the levels and timing of dividends up to an amount in excess of certain regulatory capital capital expenditures and investments. These plans also form the basis levels, or based on the levels of undistributed earned surplus or current for the Allianz Group’s capital management. Resilience under stress year income or a percentage thereof. Allianz Group’s Board of conditions is also considered when determining the internal capital Management believes that these restrictions will not affect the ability requirements of the Group. The regulators impose minimum capital of Allianz SE to pay dividends to its shareholders in the future. requirements on the Group and its related undertakings. For further 1_From a formalistic perspective, the German Supervisory Authority deems the model to be “partial” generality, the term internal model might be used in the following chapters, e.g., in case descriptions also because not all of the related entities are using the internal model. Some of the smaller entities report referring to entities that use the internal model, or descriptions focusing on processes with respect to the under the standard formula and others under the deduction and aggregation approach. Without loss of internal model components. 160 Annual Report 2021 − Allianz Group