C _ Group Management Report EXECUTIVE SUMMARY OF 2021 RESULTS the disposal of Allianz Popular S.L. in Spain, while in 2021 the impact from a reinsurance transaction in the United States positively impacted Key figures Allianz Group1 the non-operating result8 by € 0.4 bn. Income taxes decreased by € 55 mn to € 2,415 mn, as a 2021 2020 Delta consequence of lower profit before tax. The effective tax rate Total revenues2 € mn 148,511 140,455 8,056 Operating profit3 € mn 13,400 10,751 2,649 decreased to 25.4 % (2020: 25.7 %), mostly due to lower local taxes. Net income3 € mn 7,105 7,133 (28) While operating profit increased, the decrease in our non- thereof: attributable to shareholders € mn 6,610 6,807 (197) operating result led to a slight reduction in our net income. Solvency II capitalization ratio4 % 209 207 1 %-p Shareholders’ equity9 decreased by € 0.9 bn to € 80.0 bn. Key Return on equity5 % 10.6 11.4 (0.7) %-p drivers included a net income attributable to shareholders of € 6.6 bn, Earnings per share € 15.96 16.48 (0.52) the issuance of undated subordinated bonds of € 2.4 bn, and higher Diluted earnings per share € 15.83 16.32 (0.48) foreign currency translation adjustments of € 1.2 bn. These effects were offset by a € 4.0 bn dividend payout, € 750 mn for the purchase of 3.8 million own shares10 as well as lower unrealized gains and losses 2,3,4,5 (net) of € 5.9 bn. Earnings summary Our Solvency II capitalization ratio was strong at 209 11 % . For a more detailed description of the results generated by each individual business segment (Property-Casualty, Life/Health, Asset In 2021, the Allianz Group’s total revenues increased by 6.1 % on an Management, and Corporate and Other), please consult the respective internal basis6 compared to the previous year. All our business chapters on the following pages. segments contributed to this growth. Our Life/Health business segment strongly increased its sales in the United States and Italy, and our Property-Casualty business segment owed its revenue increase to both Other information higher prices and volume growth. Our Asset Management business segment recorded higher assets under management (AuM) driven revenues as well as an increase in performance fees. In the course of the year, there were only some minor reallocations Our operating profit increased significantly by 24.6 % compared to between reportable segments. 2020, which was negatively impacted by COVID-19. All our business segments registered strong operating profit growth. In Asset Management, it was due to higher average AuM and continued cost Other parts of the Group Management control. Our Property-Casualty business segment saw a higher Report underwriting result despite the increase in claims from natural catastrophes. In our Life/Health business segment, the increase in The Group Management Report also includes the following sections: operating profit was due to higher reserve loadings and an improved − Statement on Corporate Management, and investment and technical margin. In our Corporate and Other business − Takeover-Related Statements and Explanations. segment, the operating result improved, largely due to higher investment income. Our operating investment result increased by € 1,450 mn to € 25,084 mn, mostly as a result of significantly lower impairments. Our non-operating result decreased by € 2,733 mn, increasing its loss to € 3,880 mn, due to a provision for litigation expenses of € 3,687 mn in the Asset Management business segment for Structured Alpha7. We recorded a higher non-operating investment result, which had been noticeably affected by COVID-19-related market impacts in the previous year. In addition, in 2020 we recorded realized gains from 1_For further information on Allianz Group figures, please refer to note 4 to the Consolidated Financial 6_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions Statements. and disposals. For a reconciliation of nominal total revenue growth to internal total revenue growth for 2_Total revenues comprise Property-Casualty total revenues (gross premiums written, and fee and each of our business segments and the Allianz Group as a whole, please refer to the chapter commission income), Life/Health statutory gross premiums written, operating revenues in Asset Reconciliations. Management, and total revenues in Corporate and Other (Banking). 7_For further information on Structured Alpha, please refer to note 37 to the Consolidated Financial 3_The Allianz Group uses operating profit and net income as key financial indicators to assess the Statements. performance of its business segments and of the Group as a whole. 8_For further information on the reinsurance transaction, please refer to note 8 to the Consolidated 4_Figures as of 31 December. Figures exclude the application of transitional measures for technical Financial Statements. provisions. Increase is only 1 %-p due to rounding. 9_For further information on shareholders‘ equity, please refer to the Balance Sheet Review. 5_Represents the ratio of net income attributable to shareholders to the average shareholders’ equity at 10_For further information on the share buy-back program, please refer to note 19 to the Consolidated the beginning of the period and at the end of the period. The net income attributable to shareholders is Financial Statements. adjusted for net financial charges related to undated subordinated bonds classified as shareholders’ 11_Including the application of transitional measures for technical provisions, the Solvency II capitalization equity. From the average shareholders’ equity undated subordinated bonds classified as shareholders’ ratio amounted to 239 % as of 31 December 2021. For further information, please refer to the Risk and equity and unrealized gains/losses on bonds net of shadow accounting are excluded. Opportunity Report. Annual Report 2021 − Allianz Group 77