C _ Group Management Report Property-Casualty liabilities As of 31 December 2021, the business segment’s gross reserves for loss and loss adjustment expenses as well as discounted loss reserves amounted to € 78.2 bn, compared to € 72.8 bn at year-end 2020. On a net basis, our reserves, including discounted loss reserves, increased 1 from € 62.0 bn to € 65.8 bn. Life/Health liabilities Life/Health reserves for insurance and investment contracts increased by € 21.0 bn to € 617.1 bn. A € 21.2 bn increase (before foreign currency translation effects) in aggregate policy reserves was driven by our operations in Germany (€ 11.8 bn) and the United States (€ 11.0 bn before foreign currency translation effects). Reserves for premium refunds decreased by € 9.8 bn (before foreign currency translation effects), due to lower unrealized gains to be shared with policyholders. Foreign currency translation effects increased the balance sheet value by € 9.6 bn, mainly due to the stronger U.S. dollar (€ 8.3 bn). Off-balance sheet arrangements In the normal course of business, the Allianz Group may enter into arrangements that do not lead to the recognition of assets and liabilities in the Consolidated Financial Statements under IFRS. Since the Allianz Group does not rely on off-balance sheet arrangements as a significant source of revenue or financing, our off-balance sheet exposure to loss is immaterial relative to our financial position. The Allianz Group enters into various commitments including loan commitments, purchase obligations, and other commitments. For more details, please refer to note 37 to the Consolidated Financial Statements. The Allianz Group has also entered into contractual relationships with various types of structured entities. They have been designed in such a way that their relevant activities are directed by means of contractual arrangements rather than voting or similar rights. Typically, structured entities have been set up in connection with asset-backed financing and certain investment fund products. For more details on our involvement with structured entities, please refer to note 35 to the Consolidated Financial Statements. Please refer to the Risk and Opportunity Report for a description of the main concentrations of risk and other relevant risk positions. Regulatory capital adequacy For details on the regulatory capitalization of the Allianz Group, please refer to our Risk and Opportunity Report. 1_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty business segment, please refer to note 14 to the Consolidated Financial Statements. Annual Report 2021 − Allianz Group 91