C _ Group Management Report OUTLOOK 2022 1 Overview: 2021 results versus previous year’s outlook 2021 results versus previous year’s outlook for 2021 Outlook 2021 – as per Annual Report 2020 Results 2021 Allianz Group Operating profit of € 12.0 bn, plus or minus € 1 bn. Operating profit was € 13.4 bn, exceeding the upper end of our target range. Protect shareholder value while continuing to provide attractive Return on equity (RoE)1 amounted to 10.6 % (2020: 11.4 %) including a negative 4.2 %-pt impact from a returns and dividends. litigation provision for Structured Alpha. Dividend proposal is € 10.80 (2020: € 9.60) per share and is an increase of 12.5 % compared to 2020. As part of our policy to return capital to shareholders on a flexible basis, Allianz SE ran a share buy-back program of € 750 mn in 2021. Selective profitable growth. Total revenues increased by 6.1 % on an internal basis, compared to 2020. The increase was supported by all segments. Property-Casualty Revenue growth of approximately 6 % of which 1 % come from Total revenues increased by 5 %. Internal growth of 4.1 % was mainly driven by Allianz Partners due to our acquisitions in Spain. recovery from the COVID-19 pandemic. Operating profit of € 5.6 bn, plus or minus 10 %. Operating profit of € 5.7 bn was well within our target range, despite above-normal natural catastrophe impacts weighing on our underwriting result. Combined ratio of approximately 93 %. Combined ratio was at 93.8 %, missing our target. Our accident year loss was strongly impacted by natural catastrophes, which was compensated by a higher run-off level as well as an ongoing strong and even slightly improved expense ratio. Pressure on operating investment income (net) to continue, due to Operating investment income (net) slightly increased, driven mainly by higher interest and similar income. reinvestments in a consistently low interest rate environment. Life/Health Continue to focus on profitable growth; keep developing capital- Revenues of € 78.3 bn were above the forecast range. Stronger sales in the United States and favorable efficient products; expand to new markets. Revenues expected to momentum for unit-linked products in Italy were only partly offset by slower growth of capital-efficient be in the range of € 67.0 bn to € 73.0 bn. products in Germany. Operating profit of € 4.4 bn, plus or minus 10 %. At € 5.0 bn, our operating profit was above range, driven by positive contributions from the United States and a strong performance on unit-linked products in Italy. RoE2 between 10.0 % and 13.0 %. 13.0 % RoE2 is at the upper end of the outlook range. Pressure on investment income due to low interest rates and Operating investment result was € 21.5 bn. Lower impairments and higher interest and similar income were continued capital market volatility. partly offset by lower trading and realized gains. Asset Management Moderate increase in AuM driven by slight positive market return Total AuM recorded 9.2 % growth, supported by very strong third-party net inflows of € 110 bn, positive combined with third-party net inflows at PIMCO and AGI. currency effects of € 103 bn, and moderate market growth of € 19 bn. Operating profit € 2.8 bn, plus or minus 10 %. Operating profit amounted to € 3.5 bn, driven by higher AuM-driven fees reflecting strong AuM growth. Cost-income ratio approximately 62 %. At 58.4 %, the cost-income ratio is clearly below 62 %. 1_Represents the ratio of net income attributable to shareholders to the average shareholders' equity at the beginning of the period and at the end of the period. The net income attributable to shareholders is adjusted for net financial charges related to undated subordinated bonds classified as shareholders' equity. From the average shareholders' equity undated subordinated bonds classified as shareholders' equity and unrealized gains/losses on bonds net of shadow accounting are excluded. 2_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the period and at the end of the period. 1 2 addition, the different approaches of central banks are expected to Economic outlook influence international capital flows and exchange rates. The global economic recovery following the COVID-19 crisis is continuing in 2022. However, it is going to lose momentum overall and will also be distributed quite unevenly, not least due to differences in the pace of vaccination which cause the gap between industrialized and emerging countries to widen further. Overall, we expect the global economy to grow by 4.1 % in 2022. While the United States and the eurozone are expected to achieve 3.9 % and 4.1 % respectively, growth in China will cool to 5.2 %, the lowest rate in over 30 years (apart from the slump in the COVID-19 year 2020). Supply bottlenecks and parts shortages are likely to continue to weigh on production and prices, with no improvement expected before the second half of 2022. In view of persistent inflation, central banks will probably withdraw more of their expansionary monetary policy measures; first interest rate hikes are expected in the United States, albeit not in the eurozone. Even if financing conditions remain generous overall, volatility in the stock markets is expected to increase in 2022. The same goes for the bond markets, where a slight rise in interest rates and a slight widening of spreads is to be expected. In 1_For more detailed information on the previous year’s outlook for 2021, please see the Annual Report 2_The information presented in the sections “Economic Outlook”, “Insurance Industry Outlook”, and “Asset 2020 from page 73 onwards. Management Industry Outlook” is based on our own estimates. 86 Annual Report 2021 − Allianz Group