C _ Group Management Report Furthermore, the Disclosures Delegated Act requires the E.U. Commission to review the application of this regulation by 30 June Non-life insurance (and thereof eight Solvency II Lines of Business 2024, and to assess in particular the need for any further amendments (LoBs)) is one economic activity in scope of the Taxonomy Regulation with regard to the inclusion of (a) exposures to central governments (“taxonomy-eligible”), as it is generally deemed as able to have a and central banks in the numerator and denominator of key positive enabling function with a view to climate change adaptation. performance indicators of financial undertakings, and (b) exposures In the non-life insurance business, the Allianz Group is active in all to undertakings that do not publish a non-financial statement the eight LoBs that can generally be considered as eligible under the pursuant to Articles 19a or 29a of Directive 2013/34/EU in the Taxonomy Regulation; the same applies for the Allianz Group’s numerator of key performance indicators of financial undertakings. reinsurance business accepted from external counterparties. Namely Overall, this means that the Taxonomy Regulation will evolve reinsurance business of eligible insurance activities can be considered further over the next years, translating into an extension of the as Taxonomy-eligible. The extent to which individual contracts include expected screening and reporting scope alongside various protection against climate-related perils (e.g., flood events or hail dimensions. storms) depends on the individual demand and the requirements of the customer’s typical situation or unique risk exposure. Risk analysis and product advice is an integral part of our sales process and we are For a transitional period of two years, a simplified approach applies pursuing the objective to close insurance coverage gaps as far as for the financial sector. In this context, only eligibility has to be possible. reported. This means that we only report on (investments into) economic activities which are in scope of the Taxonomy Regulation, i.e., We integrate climate protection into our core business. We embed the described in the Climate Delegated Act; irrespective of whether that management of risks and opportunities resulting from climate change economic activity meets any or all of the technical screening criteria in our overall business strategy. Measures include developing and laid down therein. adjusting financial products and services, updating policies and Thus, taxonomy eligibility of an economic activity implies that processes, setting targets and limits, managing our operational respective Technical Screening Criteria are available and the activity climate footprint, and engaging with internal and external could generally make a substantial contribution to one of the stakeholders. As a treaty reinsurer of external clients, we consider the environmental objectives of the taxonomy. Whether an activity is climate-related strategies of these insurance companies as part of our taxonomy-eligible, or not, provides no indication about how green or underwriting process in order to determine our reinsurance business environmentally sustainable that activity is. This will only be possible strategy. with the future alignment KPI. The information about taxonomy eligibility in our underwriting Taxonomy alignment of an activity goes beyond taxonomy portfolio is an indication of the scope of our activities that can eligibility. It implies that an activity complies with the requirements generally be assessed against the specific technical screening criteria defined specifically for this particular activity in the Technical for taxonomy-alignment applying to (re-)insurers, and therefore have Screening Criteria of the taxonomy. For example, to be “taxonomy- the potential to provide a substantial contribution to the aligned” under the current taxonomy, an activity has to fulfill the environmental objective of climate change adaptation. An LoB must specific criteria that determine when an economic activity makes a contain at least one policy with terms related to the treatment of substantial contribution to the climate objectives as outlined in the climate perils to be considered as taxonomy-eligible. On the one hand, Climate Delegated Act. Going forward, an activity has to fulfill the the Allianz Group offers policies in the LoBs of “other motor insurance“, Technical Screening Criteria, the “do no significant harm” criteria, and “marine, aviation and transport insurance” and “fire and damage to the minimum social safeguards linked to this activity to be taxonomy- property insurance”, where protection against climate perils is explicitly aligned. Taxonomy alignment has to be reported by financial included. On the other hand, the Allianz Group offers policies that are undertakings from the financial year 2023 onwards. based on a general protection approach, thus covering all risks, including (yet, not explicitly referring to) climate perils in the five remaining LoBs “medical expense insurance”, “income protection The Disclosures Delegated Act specifies the disclosure obligations insurance”, “workers’ compensation insurance”, “motor vehicle liability under Art. 8 of the Taxonomy Regulation. insurance” and “assistance”. Allianz generally considers both types of LoBs as eligible under the Taxonomy Regulation, as they all comprise In order to ensure comparability of the Taxonomy information with the policies that cover against climate perils. The most material eligible Group's financial disclosure, we report for each of our material LoBs are “fire and other damage to property insurance”, “motor vehicle financial activities. Consequently, Allianz Group will report on the liability insurance” and “other motor insurance”. following activities: − non-life insurance, − proprietary investments, and − third-party investments. 72 Annual Report 2021 − Allianz Group