C _ Group Management Report capital allocation, liquidity position, and investment strategy, including A risk function, headed by a Chief Risk Officer which is strategic asset allocation for the different business segments. independent from business line management, is established by the related undertakings. A local Risk Committee supports both the Board Overall risk organization and roles in risk management of Management and the Chief Risk Officer by acting as the primary A comprehensive system of risk governance is achieved by setting risk controlling body. standards related to organizational structure, risk strategy and Consistent implementation of the Group’s risk management appetite, limit systems, documentation, and reporting. These framework in the related undertakings, including regular dialogue standards ensure the accurate and timely flow of risk-related between the Group and the entity, is ensured, for example, through information and a disciplined approach towards decision-making and Group Risk representation on local Risk Committees and through execution at both the global and local levels. regular assessment of the appropriateness of the local risk As a general principle, the responsibility for the First Line of management framework and performance of the Chief Risk Officers Defense rests with business managers in the related undertaking. They by Group Risk. Moreover, the Group Chief Risk Officer must be are responsible for both the risks taken and the returns from their consulted on decisions regarding the staffing, objectives, and decisions. The Second Line of Defense is made up of independent performance evaluation of local Chief Risk Officers. global oversight functions including Risk, Actuarial, Compliance, and Legal, which support the Board in defining the risk frameworks within Other functions and bodies which the business can operate. Group Audit forms the Third Line of In addition to Group Risk and the local risk functions, legal, Defense, independently and regularly reviewing risk governance compliance, and actuarial functions established at both the Group implementation, compliance with risk principles, performing quality and the entity levels constitute additional components of the Second reviews of risk processes, and testing adherence to business standards, Line of Defense. including the internal control framework. Group Legal and Group Compliance seek to mitigate legal risks with support from other departments. The objectives of both functions Group Risk management function are to ensure that laws and regulations are observed, to react Group Risk is managed by the Group Chief Risk Officer and supports appropriately to all impending legislative changes or new court Allianz SE’s Board of Management, including its committees, by rulings, to attend to legal disputes and litigation, and to provide legally performing various analyses, communicating risk management appropriate solutions for transactions and business processes. In related information, and preparing and implementing committee addition, Group Compliance – in conjunction with Group Legal and decisions. other experts involved – is responsible for integrity management, Group Risk also supports the Board of Management in which aims to protect the Allianz Group as well as our related developing the risk management framework – which covers risk undertakings and employees from regulatory risks. governance, risk strategy and appetite – and risk monitoring and Group Actuarial, Planning and Controlling contributes towards reporting. Group Risk’s operational responsibility encompasses assessing and managing risks in line with regulatory requirements, in assessing risks and monitoring limits and accumulations of specific particular for those risks whose management requires actuarial risks across business lines, including natural and human-caused expertise. The range of tasks includes, amongst others, the calculation (regulatory terminology: man-made) disasters and exposures to and monitoring of technical provisions, technical actuarial assistance financial markets and counterparties. in business planning, reporting and monitoring of the results, and Group Risk strengthens and maintains the Group’s risk network supporting the effective implementation of the risk management through regular and close interaction with the management of related system. undertakings and with other key stakeholders such as the local finance, risk, actuarial, underwriting, and investment departments. A strong group-wide risk network enables the Allianz Group to influence Risk-based steering and risk risk culture across the Group, identify risks at an early stage, and make 1 management aware of these risks. management The Allianz Group is exposed to a variety of risks through its core Related undertakings insurance and asset management activities, including market, credit, Related undertakings are responsible for their own risk management, underwriting, business, operational, strategic, liquidity, and including adherence to both external requirements (for example, reputational risks. those imposed by local regulators) and internal standards. Their As an integrated financial services provider, we consider Boards of Management are responsible for setting and approving a diversification across different business segments and regions to be an local risk strategy − supporting the Group’s risk strategy − during the important element in managing our risks efficiently, as it limits the annual Strategic and Planning Dialogues with the Group and for economic impact of any single event and contributes to relatively ensuring adherence to their risk strategy. stable results. Our aim is to maintain a balanced risk profile without any disproportionately large risk concentrations and accumulations. 1_This section contains specific risk disclosures as required by IFRS 4 and IFRS 7 relating to the Notes to the Consolidated Financial Statements. Annual Report 2021 − Allianz Group 99