AMOS Annual Report 2016 - Allianz · Annual Report 2016 AMOS SE 3 ... core-insurance sandboxes for rapid prototyping and ... The first implementation project has already been started

AMOS SEAnnual Report 2016

Allianz Managed Operations & Services SE

AMOS

Annual Report 2016 AMOS SE2

Annual Report 2016 AMOS SE 3

04 Report of the Supervisory Board 201609 Members of the Supervisory Board10 Executive Management Team

A – Management Report15 Mandates and Mission15 Structure and Operation18 Business Overview 201620 Business Performance 201624 Outlook24 Opportunities and Risk Report

B – Financial Statements 30 Balance Sheet on 31 December 201632 Income Statement33 Notes to the Financial Statements47 Auditor’s Report

Content


Report of the Supervisory Board 2016

The Supervisory Board fulfilled its duties and obligations as provided for under the statutes and applicable law. It moni-tored the management of the company and advised the Board of Management regarding the conduct of business. The Board of Management informed the Supervisory Board on a regular basis in a timely and comprehensive manner, both verbally and in writing, on the course of business.

In the financial year 2016, the Supervisory Board held two meetings; in March and in November. In these meetings, the Board of Management informed about the economic situation of the company, the planned and implemented measures on the development of the business, and the risk situation. The Supervisory Board was directly involved in major decisions. In addition, the Supervisory Board adopted three resolutions by circular procedure in February, March and June of 2016.

The business year 2016 was characterized by finalizing the internal reorganization of Allianz Managed Operations & Ser-vices SE (AMOS), which allows for stronger customer focus. Another focus was on the rollout of various major projects to consolidate Allianz wide infrastructure and applications.

− Within the Data Center Consolidation (DCC) program, more than 4,600 servers were migrated or decommissioned.

− The Allianz Global Network (AGN) program has successfully completed waves one through three, while wave four has been kicked off, which includes Allianz Asia-Pacific, the IberoLatAm region, Central & Eastern Europe, Turkey and Greece.


− With regard to the Allianz Virtual Client (AVC) program, as of year-end 2016, about 45,000 users from 13 Allianz oper-ating entities are using the product. More than 211,000 identities have now been integrated into the Global Identity & Access Management (GIAM) system.

− The preparation of new Allianz Business System (ABS) implementations in Central & Eastern Europe, Asia and Turkey started in 2016. The two-speed architecture solution – ABS plus CISL – has been implemented successfully.

− Allianz Telematics successfully conducted its market launch in Germany. In addition to its platform security, the

offering portfolio was improved and further enhanced.

− oneWeb is the strategic platform for online interaction at Allianz Group. At the end of 2016, oneWeb hosted 112 live portals.

− oneMobile is now the Allianz strategic framework for mobile app development, enabling Allianz companies to imple-

ment their own mobile apps within a defined framework. Six apps went live in 2016.

− AMOS directly supports the digital agenda of Allianz Group. The successful collaboration with the Global Digital Fac-tory (GDF) was characterized by the deployment of the Agile Delivery Platform (ADP), core-insurance sandboxes for rapid prototyping and development, and the implementation of digital customer journeys.

− B2B2C successfully completed the roll out of Digital RSA and Travel applications and the migration of Allianz World-

wide Partners (AWP) France into the Europe2 Data Center. At the end of 2016, AWP incidents and outages were reduced by 2 percent and overall IT legacy cost for AWP decreased by 15 percent. The focus now is to ensure the delivery of ABS transformation for AWP leverages the new agile delivery model.

− Currently, there are 26 Robotics prototypes in development for 20+ Allianz operating entities in insurance operations

and financial services. The first implementation project has already been started with Allianz Global Corporate & Specialty (AGCS).

− As part of the Business Services portfolio of AMOS, Global Insurance Operations (GIO) and Finance Business Services

(FBS) provide centralized operations services in Insurance and Finance operations to Allianz Group. These units have seen a significant growth especially from AGCS and Allianz Australia in 2016, reaching a strength of 1,400+ FTEs sup-porting a wide range of processes from India.

− Similar to the Risk Analysis & Infrastructure (RAI) operations and development, which was insourced from an external

vendor to AMOS, the focus is to identify similar opportunities for the AMOS Global Delivery Network to reduce external spend. As an example, DCC is being supported via AMOS India.


− The business of AMOS is organized into service and investment portfolios. The service portfolio includes the delivery of mature shared services and maintained the targeted “Black Zero” for 2016. The investment portfolio, consisting of strategic transformation projects to develop new Allianz Group and operating entity platforms as well as associated services, developed unfavorable to plan in 2016 mainly due to lower revenues (resulting from delays in project prog-ress) from such projects and services. This effect could be partially but not fully compensated by lower costs.

− The customer satisfaction is steadily increasing. AMOS has seen stability in the Customer Net Promoter Score (NPS)

throughout 2016 at roughly 30 percent. The NPS for running services saw a slight improvement within the year, ending at 44 percent in the October survey. A significant achievement was the dramatic improvement in the end-user NPS, which went from -12 percent in the April survey, to 6 percent in the October 2016 survey. This represents a key mile-stone, as the overall perception of AMOS services by end-users is overall positive.

− In line with its goal to become a truly customer-centric organization, AMOS has increased its focus on formalizing the

approach to customer relationships and service delivery. New reporting lines were put in place for the global com-mercial entities. The Branch Concept Implementation (BCI) project will improve customer focus globally and enable more centralized steering.

− The ongoing measures in the transformation program contributed to a strong result in this year’s Allianz Engagement

Survey with a participation rate of 93 percent. Most indices and priority items improved and were either better or at the same level as results from Allianz Group. With an increase of 3 percent to 72 percent, the Inclusive Meritocracy Index already reached its target score for 2018. Furthermore, the Work-Well Index increased by 1 percent to 68 percent.

Mr. Jesus Marin and Mr. Patrick Grosjean resigned from their offices as Members of the Supervisory Board of the Company with effect from 31 January 2016. On 5 February 2016, an extraordinary shareholders meeting elected Ms. Nina Klingspor, Member of the Board of Management of Allianz Global Corporate & Specialty SE, and Ms. Claire-Marie Coste-Lepoutre, Member of the Board of Management of Allianz Benelux SA, as their successors with immediate effect.


Dr. Ralf Schneider resigned from his office as Member of the Board of Management with effect from 31 March 2016. The Supervisory Board accepted his resignation. As the company has grown in size and importance for Allianz to an extent, which requires further strengthening of the Board of Management, the Supervisory Board approved the nomination of Dr. Eckart Pech, Dr. Daniel Besendorfer and Mr. Steve Coles effective 1 April 2016.

Dr. Eckart Pech joined the Board of Management to take on responsibility for Application Platforms - Global Platforms. Dr. Daniel Besendorfer is responsible for Application Platforms – Customer Platforms and Mr. Steve Coles is responsible for Infrastructure & Information Security. The mandate of Mr. Philip Varghese as Member of the Board of Management expired effective 31 December 2016.

KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, audited the annual financial statements and management report of Allianz Managed Operations & Services SE and issued an unqualified opinion for the financial year 2016.

The annual financial statements and management report, together with the audit report prepared by KPMG AG Wirtschafts-prüfungsgesellschaft, were made available to all members of the Supervisory Board and were discussed in detail during the Supervisory Board meeting on 6 March 2017 in the presence of the independent auditors. The examination of these documents presented by the Board of Management and the independent auditors has raised no objections, and the Super-visory Board concurs with the findings of the independent audit carried out by KPMG AG Wirtschaftsprüfungsgesellschaft. The Supervisory Board has also approved the annual financial statements prepared by the Board of Management.

The Supervisory Board expresses its gratitude and appreciation to the Board of Management and the employees for their dedicated work over the past year. The Supervisory Board wishes to extend its special thanks to Dr. Ralf Schneider, Mr. Philip Varghese, Mr. Jesus Marin and Mr. Patrick Grosjean for their valuable contributions.

Munich, 6 March 2017On behalf of the Supervisory Board

Dr. Christof Mascher



Dr. Christof MascherMember of the Board of Management, Chief Operating Officer,

Allianz SE

Chairman of the Supervisory Board

Sabia SchwarzerHead of Group Communications and Corporate Responsibility,

Allianz SE

Deputy Chairwoman of the Supervisory Board

Claire-Marie Coste-LepoutreMember of the Board of Management, Chief Financial Officer,

Allianz Benelux S. A.

(since 5 February 2016)

Patrick GrosjeanMember of the Board of Management, Chief Operating Officer,

Allianz France S.A

(to 31 January 2016)

Members of the Supervisory Board

Members who left the Supervisory Board

Nina KlingsporMember of the Board of Management, Chief Financial Officer,

Allianz Global Corporate & Specialty SE

(since 5 February 2016)

Manfred BüttnerEmployee, Chairman of the General Works’ Council,


Employee Representative

Jürgen LawrenzEmployee, first Deputy Chairman of the General Works’ Council,


Employee Representative

Jesus MarinMember of the Board of Management, Chief Operating Officer,

Allianz S.p. A. Italy

(to 31 January 2016)


Executive Management Team

AMOS SE Executive Management Team Members, Board of Management mandates

Dr. Barbara Karuth-ZelleChair of the Executive Management Team, Chief Executive Officer

Stefan BritzMember of the Executive Management Team, Chief Financial Officer

Dr. Daniel Besendorfer Member of the Executive Management Team responsible for Application Platform – Customer Platforms (since 1 April 2016)

Steve Coles Member of the Executive Management Team responsible for Infrastructure and Information Security (since 1 April 2016)

Dr. Eckart PechMember of the Executive Management Team responsible for Application Platform – Global Platforms (since 1 April 2016)

Beginning on 1 April 2016, Allianz Managed Operations & Services SE (AMOS) introduced a new organizational structure of eight pillars (see Section 2. Structure and Operation). The heads of each pillar compose the eight-member Executive Manage-ment Team (EMT), which consists of all members of the Board of Management of AMOS, plus additional persons with the mandate of “general representative”. The EMT collaborates as a single top leadership body with legally mandated members of the Board of Management, executing the legal tasks associated with that role. In this way, AMOS was able to encompass its full base of pillars within its leadership structure without needing to adjust the size of its Board of Management.To correctly reflect the new organizational structure of the company, the content of this management report has been adapt-ed and configured accordingly.


Members who left the Board of Management Philip VargheseMember of the Executive Management Team responsible for Global Delivery Network (until 31 December 2016)

Dr. Ralf Schneider Member of the Board of Management responsible for IT (until 31 March 2016)

Executive Management Team Members, General Representative mandates

Umberto CostanziniMember of the Executive Management Team responsible for Global and Regional Lines (since 1 April 2016)

Andrea PettinelliMember of the Executive Management Team responsible for Customer and Solution Management (since 1 May 2016)

Dr. Turan SahinMember of the Executive Management Team responsible for Global Delivery Network (since 1 January 2017)



AMANAGEMENT REPORT

Pages 14 – 27

Annual Report 2016 AMOS SE14 Annual Report 2016 AMOS SE14


1. Mandates and Mission

AMOS is designed to transform Allianz into a digital group. The AMOS mission is to deploy Allianz Group solutions together with and to the benefit of Allianz companies. Its internal reorganization in 2016 (see Section 2) took another step toward achieving this through specialized pillars to provide these solutions.

By deploying the Allianz Group platform architecture (infrastruc-ture and applications) and Group synergies – including procure-ment, processing services, and internal consulting –, AMOS deliv-ers significant value to Allianz Group.

The information infrastructure and user applications that AMOS builds and runs ensure a secure and efficient backbone for the digi-talization of Allianz Group. It protects Allianz’s data against threats, while supporting the seamless distribution of products and modern customer servicing. With this backbone, AMOS collaborates closely with Allianz companies to develop next-generation offerings such as telematics, new direct business models, business-to-business-to-customer services, risk prevention and assistance. In addition to this digitalization remit, AMOS business services provide long-term cost savings and qualitative benefits through central purchasing, scaled processes and pooled resources.

AMOS delivers value for Allianz Group through six key levers:1. Driving harmonization and simplification of business pro-

cesses around best practices2. Incubating innovation and ensuring fast scale-up and deploy-

ment3. Leveraging sourcing opportunities around the globe to exploit

skill tanks and cost-efficient locations, as well as outsourcing options; bringing external services providers on board

4. Leveraging the buying power of Allianz Group5. Capitalizing on repeat delivery experiences and industrial

methodologies, notably via international delivery centers to bring predictability, reliability and quality

6. Leveraging proven change and business transformation expertise

As an internal shared services provider, the overall economic situ-ation has minimal impact on AMOS. Crucial are the developments in Allianz Group. These foreseeable developments are aligned in the multi-year and annual planning processes with Allianz SE (strategic dialogue in spring/summer and planning dialogue in autumn) and Allianz Group operating entities (regular and ad-hoc account manager alignment meetings). Allianz SE has the respon-sibility, for example, for Group IT strategy and shared services.

2. Structure and Operation

The new structure of AMOS, introduced on 1 April 2016, is designed to further its goal of generating savings, driving strategic differen-tiation through a resilient digital backbone and working with Alli-anz Group companies to transform customer digital interactive experiences.

2.1 Pillars and ServicesThe services of AMOS are driven by the strategic requirements of Allianz Group, as well as by the operational needs of Allianz Group operating entities. Its new structure is built around these services in such a way that it can continue to evolve as the needs of Allianz evolve.

Infrastructure & Information Security PillarThe Infrastructure & Information Security pillar makes Allianz fit for the digital future by managing a full infrastructure stack. Services:

− Allianz Cyber Defense Center − Data Center Services − IT Security Platform − Network Platform − Private Cloud Platform

Global Platforms PillarThe Global Platforms pillar makes Allianz fit for the digital future by providing necessary platforms, services and tool groups to man-age its three key resources globally: financial assets, data assets and human capital. Services:

− Finance Systems − HR Systems − Enterprise Resource Planning (ERP) Platforms − Risk Systems − Anti-Money Laundering − Global Business Intelligence & Big Data Platforms − NatCat (Natural Catastrophe) Risk Modeling Systems

Customer Platforms PillarThe Customer Platforms pillar leads the digital interaction of Alli-anz with their customers into the future by using a customer-cen-tric and integrated software suite. Through a fully flexible front-end, supported by an open-source strategy and open interfaces to third-party providers, as well as a scalable and stable backend, it ensures a short time-to-market and the maximum usage of syner-gies at the same time. Services:

− Digital Interaction Platforms − Core Insurance Systems − Telematics Platform

A Management Report

15 Mandates and Mission 15 Structure and Operation 18 Business Overview 2016

20 Business Performance 2016 24 Outlook 24 Opportunities and Risk Report


Global & Regional Lines PillarThe Global & Regional Lines pillar is designed to support Allianz Group in its future evolution by providing dedicated business mod-els for single Allianz Group operating entities and Allianz Group operating entities that serve customers beyond a single national market.

The pillar includes the units dedicated to “end-to-end” IT transfor-mation and service delivery for Allianz global lines of business, as well as specific regional or local Allianz Group operating entities. Currently this includes serving Allianz Worldwide Partners as a main customer.

Global Delivery Network PillarThe Global Delivery Network (GDN) forms the integrated delivery centers for all AMOS pillars and Allianz Group by providing skills, scale and scope to support and accelerate the digital transforma-tion.

The GDN further focuses on developing reusable assets, standard-izing tools, methodologies and sharing best practices. The pillar delivers a wide range of specialized services by leveraging the strengths of the delivery centers in India, Romania and Thailand, as well as via the multiple partner ecosystems. The GDN provides IT support for the areas led by the pillars of Infrastructure & Infor-mation Security, Global Platforms and Customer Platforms.

Business service offerings include actuarial, PMO (Project Manage-ment Office), human resources, insurance operations, financial business services, call centers and administrative support. The mission of GDN is to develop a global network of proven talent for AMOS, delivering innovative, high quality and cost effective ser-vices that enable its customers to succeed and that create value for Allianz.

Customer & Solution Management PillarThe Customer & Solution Management pillar helps develop new projects and services for AMOS, creates strong contractual relation-ships with Allianz Group operating entities, develops value propo-sitions for the transformation program of Allianz Group operating entities, and tracks their contracts ensuring realization. Further-more, the pillar is in charge of internal efficiency, including devel-oping the AMOS Global Operating Model and managing the project portfolio management process. Finally, it leads the creation and implementation of the new AMOS branch structure, which mirrors the global pillar structure to assure global alignment of delivery, and that each country where AMOS is present, has a leader with a clear customer relationship mandate.

CEO PillarThe CEO pillar takes the lead in planning and driving the transfor-mation of Allianz Group, and the AMOS internal transformation via business areas such as Human Resources & Change, Corporate Communications, Audit and System Architecture, and by provid-ing services to Allianz Group operating entities through:

− Allianz consulting services − Large transformation program support − A dedicated business model for Allianz Germany, inclusive of

business and BI (Business Intelligence) systems

CFO PillarThe CFO pillar is in charge of the classical financial functions including Accounting, Controlling and Risk Management, harmo-nizing finance systems and processes across all AMOS entities, coordinating real estate spend, and coordinating the local finan-cial officers and all business controllers to achieve its P&L and cash targets. The revamped CFO pillar also covers Legal & Compliance, as both areas are closely linked to accounting topics. Furthermore, it takes a strong role in cost optimization for all of Allianz by man-aging Global Sourcing and Procurement for Allianz Group and by running the Smart Prices & Costs program for AMOS.

2.2 AMOS CustomersAMOS customers are Allianz Group operating entities and business units of Allianz Group as well as clients outside of Allianz Group; either direct external customers (for a limited part of the AMOS business) or customers of AMOS customers (for instance bancas-surance or Global Automotive partners, which AMOS supports via its products and services, together with the relevant Allianz operat-ing entity).

In 2016, 304 Allianz companies sourced services from AMOS. As in the past, the largest customer was Allianz Deutschland AG (Allianz Germany) and its subsidiaries, such as Allianz Versicherungs-Aktiengesellschaft and Allianz Beratungs- und Vertriebs-AG (ABV), with annual sales revenues of approximately € 374 million. AMOS business grew in almost every region. The share of business with countries outside of Germany expanded to 38.7 percent (2015: 37.0 percent).


Revenues 2016

Region

2016 2015

Total in Mio €

Share in %

Number of

clients (Allianz Group)

Total in Mio €

Share in %

Number of

clients (Allianz Group)

Americas 28.4 3.0 % 34 31.4 3.7 % 33Asia-Pacific 22.7 2.4 % 55 22.2 2.6 % 51EEMEA 22.5 2.4 % 57 17.3 2.0 % 56Germany 583.4 61.3 % 50 533.6 63.0 % 48Western Europe (excl. Germany) 288.9 30.4 % 108 235.3 27.8 % 111Total within Allianz 945.9 99.5 % 304 839.9 99.1 % 299Third-party business 5.0 0.5 % 7.4 0.9 %Total 950.9 100.0 % 847.3 100.0 %

2.3 Employees

EngagementEach year, AMOS conducts the Allianz Engagement Survey (AES), in line with Allianz Group, to gather employee feedback on a range of issues, including those identified as promoting a high-perfor-mance culture. In 2016, some 7,300 employees from AMOS Group were invited to participate. The response rate was 93 percent.

DiversityDue to the Equal Treatment of Women and Men Act in Germany for both the private and public sectors, AMOS established the follow-ing targets for the proportion of women in management positions. The deadline to achieve all targets was set for 30 June 2017.

− The target quota for women on the Supervisory Board is 30 percent (as of 31 December 2016: 50 percent).

− The target quota for women on the Board is 20 percent (as of 31 December 2016: 16.7 percent).

− The target quota for women in the highest leadership level below the board is 20 percent (as of 31 December 2016: 23.1 percent).

− The target quota for women in roles below the highest leader-ship level is also 20 percent (as of 31 December 2016: 21.7 percent).

2.4 Protection of Natural ResourcesTo ensure compliance with the Allianz Group Standard for Procure-ment, AMOS requires vendors with a contract value over certain thresholds (defined locally by market) to undergo a vendor screen-ing procedure. This is designed to ensure due diligence and mitiga-tion against counter-party risks. Since 2010, AMOS has conducted 2,756 vendor integrity screenings, including 425 in 2016. In addi-tion, AMOS requires vendors to sign a Vendor Code of Conduct, which stipulates that AMOS vendors must – with regard to fair labor practices (including modern slavery in the supply chain), human rights and non-discrimination, environmental protection and sustainability – comply with all applicable laws and regula-tions, industry standards, agreements and guidelines regarding the environment and sustainability and, where appropriate, estab-lish policies and management practices that encourage environ-mental stewardship in their own supply chain. Since its introduc-tion in 2015, 254 suppliers have signed the AMOS Vendor Code of Conduct, including 162 in 2016.

2.5 Non-Financial Key Performance IndicatorsThe non-financial key performance indicators (KPIs) of AMOS are similar to those of Allianz Group, as AMOS is part of Allianz Group. They are mainly used for the sustainability assessment of the mid-term bonus. Under the category “partner of choice” the following KPIs are considered: Allianz Engagement Survey, Net Promoter Score results, diversity development, organizational transparency (as measured by the Transparency International Corporate Report-ing ranking) and sustainable result development (as measured by widely-recognized indices and rankings).

A Management Report




3. Business Overview

The business reporting of AMOS is organized into service and investment portfolios. The service portfolio includes the delivery of mature shared services. The investment portfolio consists of stra-tegic transformation projects to develop new Allianz Group and operating entity platforms as well as associated services.

After achieving for the first time a “Black Zero” result (slightly pos-itive P&L) for the 2015 service portfolio, the “Black Zero” was main-tained in 2016. Additionally, AMOS reduced unit prices to the ben-efit of Allianz Group operating entities, which was compensated by volume increases and lower unit costs.

Continuous cost-reductions are a focus area within AMOS to improve the competitiveness of Allianz Group. In 2016, cost reduc-tions were achieved through the “Smart Prices & Costs Program”, including contract renegotiations and reduced external expendi-tures.

3.1 Service Portfolio OverviewThe following is an abbreviated list of shared services within the service portfolio.

Core Insurance PlatformsAMOS implements strategic application platforms in a harmo-nized way within Allianz Group, thereby ensuring that economies of scope, scale and skill are leveraged. A key component of the application architecture are the core insurance platforms that help streamline the product portfolio and support interdisciplinary product sales through multiple channels.

− Allianz Business System (ABS): ABS, including ABS Core license business and the operational ABS run services, is the primary strategic core insurance application for Allianz. The platform manages contracts and claims for all classes of insurance, providing broad functionality and consistent views to cen-trally stored data. ABS has multilingual and multi-currency capabilities, and supports various organizational and opera-tional structures.

− Open Product Underwriting System (OPUS): OPUS provides standard modules for a complete insurance application com-prised of underwriting, claims, reinsurance and accounting for almost all lines of business of the Property & Casualty and Life insurance business.

− ePac: An end-to-end insurance application platform for Spain, Portugal, Colombia and Brazil designed to centralize business processes aimed at customers, agents and brokers.

Business Intelligence & Big Data PlatformsBusiness Intelligence & Big Data (BIBD) is part of a group-wide environment and provides business intelligence platform solu-tions like Exadata as well as big data platform services such as Hadoop.

Finance, Account, Investment & ReportingFinance, Account, Investment & Reporting (FAIR) provides group finance systems such as the group consolidation system, Group Reporting Platform (GRP) templates as well as investment and accounting functionalities.

Human Resources, Treasury & ComplianceHuman Resources, Treasury & Compliance (HRTC) provides HR platforms, risk (Solvency II), cash and treasury (Allianz Cash & Treasury System) and compliance (Group Sanction Screening Solu-tion) systems.

Global Sourcing and ProcurementAMOS Global Sourcing and Procurement (GSP) drives the integrat-ed sourcing and procurement network within Allianz to deliver sustainable value for the Group. In 2016, savings of €126 million were achieved with respective Allianz companies and business partners.

Allianz ConsultingAllianz Group’s internal consulting unit, Allianz Consulting, pro-vides management consulting services for Allianz entities world-wide across all Allianz functions. The unit is closely involved in initiatives such as the Allianz Group’s Renewal Agenda, digitaliza-tion and customer experience journeys.

Robotics Center of ExcellenceThe Robotics Center of Excellence focuses on enabling a consistent approach for robotics within Allianz, and provides support to the Allianz Group operating entities’ initiatives in terms of proof-of-concept, projects and advisory services.

Global Insurance OperationsGlobal Insurance Operations provide centralized operations ser-vices to Allianz Group, which include policy administration, claims handling, loss recoveries, data management services, underwrit-ing, management support services, and a contact center that pro-vide services and sales process support for Allianz Group operating entities.


3.2 Investment Portfolio OverviewThe following is an abbreviated list of shared services within the investment portfolio.

Allianz Infrastructure TransformationThe Allianz Infrastructure Transformation (AIT) program, which was formed by AMOS in 2013, is well developed and deploying ser-vices to Allianz Group operating entities across the globe. AIT is an umbrella program that pulls together all the projects and initia-tives working to transform IT-infrastructure throughout Allianz Group and consists of four key IT infrastructure projects:

− Allianz Global Network (AGN): A modern data and voice net-work for accessing and processing large volumes of business data. AGN turns fragmented local networks into a high-speed data and voice highway.

− Data Center Consolidation (DCC): A program transforming the current heterogeneous data center landscape of Allianz into a globally harmonized private cloud infrastructure by consolidating the more than 140 Allianz data centers down to five strategic locations.

− Allianz Virtual Client (AVC): An agile virtual desktop environ-ment enabling Allianz employees to work at anytime from anywhere on any device. The environment helps maintain Allianz’s global business continuity.

− Global Identity and Access Management (GIAM): A worldwide identity store and tool suite for identification and access man-agement.

These projects are creating the digital infrastructure backbone, and are the foundation for transforming Allianz into a digital group.

In addition to the transformational AIT program, AMOS is also responsible for 24x7 IT infrastructure and security operations for many Allianz Group operating entities worldwide. This means sup-porting and securing a large range of services, including multiple data centers, some 45,000 Allianz Virtual Client users, and 63,600 devices such as laptops and remote working stations, in addition to the many servers and mainframes in operation. These run ser-vices are mainly shown in the service portfolio.

AWP IT Future ModelSince 2015, AMOS handles the full IT service delivery of Allianz Worldwide Partners (AWP) on a global scale. The objective of the AWP IT Future Model is to ensure stable IT delivery for legacy appli-cations while implementing the new Allianz IT infrastructure via AIT and the Allianz Business System platform. This allows an over-all process harmonization and operational simplification to sup-port AWP in providing services to their customers. As the preferred

IT services provider for AWP, AMOS triggers economies of scale and cost-effectiveness solutions, while ensuring speed-to-market and end-to-end IT services delivery to the customer.

Allianz Business System – MigrationsA core insurance platform part of key Allianz Group and individual Allianz Group operating entities’ projects that includes, for exam-ple, delivery of services for Allianz Global Automotive, Allianz Worldwide Partners and Allianz France.

oneWeb & oneMobileoneWeb for Inter- and Intranet and oneMobile for mobile applica-tions, foster digital customer interaction and engagement.

Global Business IntelligenceGlobal Business Intelligence (BI) provides analytics solutions based on a global data warehouse to evaluate existing data, sup-port decision-making processes and enable new digital business models.

Business ServicesBusiness Services consist of several services offered to clients by leveraging the Expertise Center in Romania and India. Some fea-ture services in the portfolio include:

− Financial Business Services (FBS): provides finance offshoring and transformation to Allianz Group through an ecosystem of in-house offshore centers and third-party service providers.

− Actuarial Services: provides local pricing and reserving teams with effective actuarial services, enabling best practices shared within Allianz to provide a successful track record on customer engagement. The service portfolio is tailored to dif-ferent actuarial needs along the full value chain.

− Human Resources (HR): provides HR-related services such as operational support, recruiting, training, and eLearning sup-port services.

TelematicsTelematics provides fully developed solutions specialized for insur-ance, automotive, health and smart home with current focus on connected car solutions.

AMOS CIO / Service ManagementTo further streamline operations and the supply chain, AMOS has deployed a dedicated platform landscape to support its business mission.

A Management Report




4. Business Performance

In 2016, AMOS continued to expand and improve its portfolio as the global shared services provider for Allianz Group. AMOS delivers mature shared services (service portfolio) and supports strategic transformation projects introducing new platforms and associat-ed services for Allianz Group entities (investment portfolio).

On 23 July 2015, the Accounting Directive Implementation Act (Bil-RUG) entered into force and is to be applied for fiscal year 2016 for the first time. It entails major changes, which also lead to changes in the commercial reporting of companies. Impacts result, among other things, from the fact that the intermediate result “Earnings from ordinary activities” included in the income statement has been eliminated. The business reporting of AMOS is based on the result “Earnings from ordinary activities” (split into service and investment portfolio) and is, therefore, been kept for the explana-tion of the development of earnings. It is defined as “Result after tax” less the “Taxes on income and earnings”.

AMOS stabilized its ordinary business activity result for the service portfolio by achieving a positive result of € 19.1 million (2015: € 19.3 million), thereby sustaining the targeted “Black Zero” in the service portfolio. This development is mainly a result of continuous cost reductions and increased near- and offshoring.

In the investment portfolio, revenues and expenses for global pro-jects increased as the rollout of projects further continued. The result from ordinary business activity for the investment portfolio of € -297.9 million in 2016 (2015: € -229.9 million) includes impair-ments of € 63.9 million for ABSi and Asia Life@Digital asset.

In 2016, net € -2.8 million (2015: € -2.5 million) taxes on income and earnings were recognized. The 2016 expenses mainly result from the India branch corporate income taxes.

The annual net loss before settlement from the domination and profit transfer agreement was € -283.4 million (2015: € -214.2 mil-lion).

As the shared services provider of Allianz Group, AMOS uses, aside from internal resources, external providers and knowledge for pro-viding and further developing its shared services to Allianz Group companies. In 2016, AMOS increased international revenues and strengthened its position as shared services provider within Alli-anz Group.

4.1 Organizational structureIn addition to the existing AMOS branches and subsidiaries at the end of 2015, AMOS continued its global expansion in 2016 with the foundation of two new branches.

AMOS expanded in Eastern Europe. On 1 March 2016, the branch AMOS Slovakia based in Bratislava started its activities. On 1 November 2016, the branch AMOS Slovakia took over the SAP and related business from ABS Bratislava. On the same date, the new Hungarian branch in Budapest went live after transferring the Data Center Services (DCS) of Allianz Business Services spol. s.r.o Hun-gary with its respective employees to AMOS Hungary.

AMOS branches with their main business activities on 31 Decem-ber 2016 were as follows:

Branch Location Main business activityAMOS Germany Munich, Germany

HeadquartersIT infrastructure services, IT applications services, business services

AMOS Belgium Brussels, Belgium Infrastructure, onsite demand management

AMOS India Pune Pune, India Infrastructure, application development and management, global demand management, business transformation and project management

AMOS India Trivandrum

Trivandrum, India Infrastructure, application development and management, global demand management, business transformation and project management

AMOS Ireland Dublin, Ireland Infrastructure, onsite demand management

AMOS Romania Bucharest, Romania

Consulting, financial, business processing, HR, administration and corporate real estate services

AMOS Singapore Singapore, Singapore

Infrastructure, regional and onsite demand management, corporate real estate services

AMOS Suisse Wallisellen, Switzerland

IT software license procurement, IT transformation

AMOS UK Guildford, UK Infrastructure, onsite demand management

AMOS Australia Sydney, Australia IT infrastructure services AMOS Slovakia Bratislava, Slovakia IT infrastructure service,

IT application servicesAMOS Hungary Budapest, Hungary Data Center Services


AMOS held participations in the following entities on 31 December 2016:

Entity AMOS shareholding

Main business activity

Investments in affiliated companiesAMOS European Services SAS, Paris, France

100% subsidiary of AMOS

Infrastructure, IT application services

Allianz Managed Operations & Services Netherlands B.V., Rotterdam, Netherlands


Infrastructure, onsite demand management

Allianz Managed Operations & Services (Thailand) Co., Ltd, Bangkok, Thailand


Infrastructure, onsite demand management, IT application services

Metafinanz-Informationssysteme GmbH, Munich, Germany


Consulting services and workforce management for IT services

AMOS International B.V., Amsterdam, Netherlands


Shareholding entity

Allianz Telematics S.p.A., Trieste, Italy


IT infrastructure services, IT applications services

AMOS of America, Inc., Petaluma, USA

95% subsidiary of AMOS International B.V.

Shared services center for North America

ParticipationsAMOS Austria GmbH, Vienna, Austria

49,9% subsidiary of AMOS

IT infrastructure services, IT application services

AMOS IberoLatAm S.L., Barcelona, Spain

49,0% subsidiary of AMOS

IT infrastructure services, IT application services

4.2 Development of EarningsCompared to 2015, total return from ordinary business activity earned by AMOS increased in 2016 by € 47.3 million.

Total return from ordinary business activity (in € million)2016 2015 1 Change

Revenues 950.9 847.3 103.6Other income 83.1 139.5 -56.4Other own work capitalized 26.9 19.6 7.3Other operating income 56.3 119.9 -63.6Total 1,034.1 986.8 47.3

1 – 2015 amounts presented without reclassifications according to BilRUG

AMOS generated revenues from shared services business of € 950.9 million in 2016 (2015: € 847.3 million), a year-on-year increase of €103.6 million or 12.2 percent.

Revenues (in € million) Revenues in percent

2016 2015 *1) Deviation 2016 2015

Deviation in %

Service Portfolio CEO 79.2 71.0 8.2 8.3% 8.4% 0.0%CFO 36.4 28.9 7.5 3.8% 3.4% 0.4%Customer & Solution Management 0.7 0.0 0.7 0.1% 0.0% 0.1%Application Platform - Customer Platform 25.4 23.0 2.4 2.7% 2.7% 0.0%Global Delivery Network 9.0 9.3 -0.4 0.9% 1.1% -0.2%Application Platform - Global Platform 191.4 163.0 28.4 20.1% 19.2% 0.9%Infrastructure & Information Security 290.0 275.8 14.1 30.5% 32.6% -2.1%Total Service Portfolio 632.1 571.1 61.0 66.5% 67.4% -0.9%

Investment Portfolio 318.9 276.2 42.7 33.5% 32.6% 0.9%

Total Revenues 950.9 847.3 103.6 100.0% 100.0% 0.0%

1 – 2015 amounts presented without reclassifications according to BilRUG

Increase of revenue compared to the previous year in the service portfolio was mainly driven by the pillar Application Platform – Global Platform (with services in Finance, Accounting, Investment & Reporting as well as HR, Risk, Treasury, Compliance) and the pil-lar Infrastructure & Information Security. The continuous increase of revenues in the investment portfolio (€ 42.7 million) resulted from progress in large global projects such as the AWP IT Future Model, AVC, AGN and DCC.

The year-on-year decrease in other operating income is mainly due to a positive one-time effect from a transaction (sale of a main-frame) in December 2015 in the amount of € 16.5 million. Further-more, the current year VAT refund amounting to € 41.9 million in 2016 was presented in the related expense line items, mainly in expense for IT operations, rather than in the position other operat-ing income as in prior years (separate presentation) (2015: € 31.9 million). Other operating income is classified in returns from ordi-nary business activity.

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Total expenses and other income from ordinary business activity comprise of expenses for IT operations, personnel expenses, depre-ciation and amortization, other operating expenses, income from participations, other interest and similar income, and interest and similar expenses. In 2016, total expenses and other income from ordinary business activity amounted to € 1,229.7 million (2015: € 1,057.9 million), which reflects an increase of € 171.9 million or a 16.2 percent increase compared to 2015.

Expenses and other income from ordinary business activity (in € million) 2016 2015 ChangeService Portfolio -613.0 -551.8 -61.2Investment Portfolio -616.8 -506.1 -110.7Total expenses and other income from ordinary business activity -1,229.7 -1,057.9 -171.9

Costs in the service portfolio increased compared to the previous year by € -61.2 million, as business was expanded, although sev-eral measures (for example, contract renegotiations) have led to cost reductions.

Expansion and growth of large global projects, visible on the reve-nue side (such as AWP IT Future Model, AVC, AGN and DCC), led to increased costs in the investment portfolio. Included in the cost increase are impairment effects to the amount of € 62.0 million for ABSi.

The increase in expenses for IT operations by € 72.7 million to € 743.6 million (2015: € 670.9 million) resulted, considering VAT refunds of € 30.9 million, mainly from increasing service provider expenses of € 49 million and consulting fees of € 25.9 million.

In addition, the expansion of the business and the increase in the number of employees led to an € 31.7 million increase in personnel expenses to € 290.3million (2015: € 258.6 million).

Depreciation and amortization increased by € 49.1 million from € 150.6 million in 2015 to € 199.7 million in 2016. This mainly was a result of € 63.9 million impairments related to the assets ABSi and Asia Life@Digital. The ABSi impairment mainly results from a decline in planned revenues. The Asia Life@Digital asset has been developed specifically for the needs of the Korea Life business. Due to the sale of the insurance company Allianz Korea by Allianz SE, the asset will no longer be used.

Other operating expenses decreased in 2016 by € 37.6 million to € 64.0 million (2015: € 101.6 million), primarily due to a special effect last year arising out of pension valuations of € 22.1 million and a decrease in the warranty expense of € 6.6 million.

In fiscal year 2012, a domination and profit transfer agreement was established between AMOS as the controlling company and Metafi-nanz-Informationssysteme GmbH as the dependent company. Due to this contract, AMOS has the obligation to compensate loss-es and the right to obtain gains from the subsidiary. The contract term ended on 31 December 2016 and is since then renewed on a yearly basis if it is not terminated six (6) months in advance of the calendar year. It is assumed that the contract will be continued.

Income from the domination and profit transfer agreement con-tract with Metafinanz Informationssysteme GmbH is disclosed under income from participations.

The year-on-year decrease in income from other securities, other interest and similar income mainly results from interest income under the domination and profit transfer agreement with Allianz SE.

Interest and other expenses decreased by € 0.3 million, from € 19.3 million in 2015 to € 19.0 million in 2016, mainly due to loans from customers to fund projects.

The total result from ordinary business activity amounted to € -278.8 million in 2016, compared to € -210.6 million in 2015.

Result from ordinary business activity (in € million)2016 2015 Change

Service Portfolio 19.1 19.3 -0.2Investment Portfolio -297.9 -229.9 -68.0Total result from ordinary activities -278.8 -210.6 -68.2

Result from ordinary business activity for the service portfolio (€ 19.1million) remained on a prior year level (2015: € 19.3 million). For the second year in a row, the targeted “Black Zero” was achieved and surpassed. This sustained development is driven by cost reductions and increased near- and offshoring activities.

As expected, both revenues and costs in the investment portfolio grew again significantly in 2016 due to business growth. The result of the investment portfolio includes a negative impairment effect in the amount of € 62.0 million for ABSi. Without this effect, the result of the investment portfolio would be at € -235.9 million (2015: € -210.6million).

The overall result was driven by investments in global projects such as AWP IT Future Model, DCC, Automotive and AVC within Allianz Group, leading to a negative result in 2016 of € -278.8 mil-lion that includes the mentioned impairment of € -63.9 million.


Taxes on income and earnings amount to € 2.8 million and mainly consist of local corporate income taxes from the branch in India.

Accordingly, earnings after tax record a loss of € -281.6 million (loss 2015: € -213.1 million) for the financial year 2016.

Other taxes amounted to € 1.8 million in 2016 (2015: € 1.1 million).

Therefore, the annual net loss before settlements from the domina-tion and profit transfer agreement is € -283.4 million (loss 2015: € -214.2 million).

A domination and profit transfer agreement between Allianz SE as the controlling company and AMOS as the dependent company, has been in place since the fiscal year 2009. The contract term ended on 31 December 2013, and is since then renewed on a yearly basis if it is not terminated six (6) months in advance of the calen-dar year. It is assumed that the contract will be continued, as AMOS provides worldwide shared services for Allianz Group.

Overall, AMOS achieved its financial targets in the service portfolio to sustain “Black Zero” result, while in the investment portfolio, which is by design currently negative, financial results were below plan due to the € 63.9 million partial impairment related to ABSi and project roll-out being below plan.

4.3 Asset Situation, Financial DevelopmentThe total assets of AMOS increased in 2016 by € 178.6 million, or 10.3 percent, to € 1,912.6 million (2015: € 1,734.0 million). The non-current assets increased by € 77.0 million, from € 1,074.2 million in the previous year to € 1,151.2 million in 2016.

Within the non-current assets, the reduction of € 57.0 million in internally generated intangible assets from € 125.8 million last year to € 68.8 million in 2016, is mainly attributable to the impairment of ABSi and Asia Life@Digital assets of € 63.9 million in 2016.

The acquired intangible non-current assets are comprised of both finished and intangible assets that are in development, which are not yet ready for use. Purchased licenses and software increased by € 97.3 million from € 436.4 million to € 533.7 million. The main increase results from capitalizable costs relating to projects such as ABS implementation at Allianz Worldwide Partners entities and DCC.

Overall, € 162.4 million development costs for IT projects were capitalized under non-current assets for fiscal year 2016.

These investments are above all attributable to the execution of IT projects of the Allianz Group and of IT projects for individual Alli-

anz Group companies. Increases were offset by disposals and depreciation.

In the financial year, expenses amounting to € 1.5 million (2015: € 1.4 million) incurred for pre-studies for self-created intangible assets were not capitalized.

Property, plant and equipment increased from € 340.4 million in 2015 by € 38.2 million to € 378.6 million in 2016. This increase main-ly results from investments in the project AGN, which is an asset under construction. Additional investments in non-current assets concerned network components, business equipment and server purchases.

Financial assets decreased from € 171.6 million last year by € 1.5 million to € 170.1 million in 2016. The decrease is attributable to change in securities.

The current assets increased by € 94.4 million, from € 605.9 million in the previous year to € 700.3 million in 2016. This increase results from higher receivables against Allianz SE from the domination and profit transfer agreement of € 283.4 million for the financial year 2016, as well as higher receivables due from affiliated compa-nies. This increase in current assets was partially offset by a decrease in the balances with banks.

Prepaid expenses increased by € 5.8 million due to a higher con-tractual volume.

The 2016 balance sheet shows € 1.4 million under excess of plan assets over post-employment benefit liability, which results from offsetting the obligations from earned pension contribution rates stemming from the defined contribution plan with cover assets.

Shareholders’ equity increased from € 211.3 million by € 42.2 mil-lion to € 253.5 million. This increase results from a cash contribu-tion from Allianz SE of 15 April 2016 to the capital reserve of € 42.2 million. The equity ratio increased on the balance sheet date, 31 December 2016, to 13.3 percent (2015: 12.2 percent).

An increase of other provisions for outstanding trade payables mainly contributed to the overall € 37.1 million increase of provi-sions to € 235.3 million (2015: € 198.2 million).

Compared to 2015, AMOS liabilities increased by € 98.8 million from € 1,323.8 million to € 1,422.6 million, which resulted mainly from new loans and bonds from Allianz Group companies for the projects DCC and AGA IT Future Model, and an increase in the cash pool liability. The short-term refinancing of AMOS is funded through the Allianz cash pool. The company’s solvency has been

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ensured at all times in 2016. Other liabilities, mainly sales tax, increased by € 1.3 million compared to 2015.

Other financial obligations mainly result from multi-year projects, maintenance and data transmission contracts with third-parties, and amount to € 2,482.7 million (2015: € 2,246.5 million).

4.4 InvestmentsInvestments in the financial year 2016 amounted to € 281.8 million (2015: € 422.3 million), € 140.5 million less than 2015. The decrease compared to the previous year is mainly due to the fact that AMOS performed significant financial investments in 2015.

Investments (€ million) 2016 2015 ChangeSoftware 206.2 189.5 16.7Financial investments 0.0 126.2 -126.2Network components 37.4 47.9 -10.5Operating/business equipment 16.9 17.8 -0.9Client/server hardware 20.0 35.5 -15.5Mainframe hardware 1.2 2.0 -0.8Storage media 0.0 3.2 -3.2Low-value assets 0.1 0.3 -0.2Total 281.8 422.3 -140.5

The total investment of IT projects under the item intangible assets on the balance sheet amounted to € 206.2 million in 2016 (2015: € 189.5 million). Capitalizable costs related to the AGN project with a volume of € 223.4 million were recognized under the item non-current assets on the balance sheet. These investments were main-ly financed through loans and bonds of € 930.0 million (2015: € 836.0 million) within Allianz Group for pre-financing IT projects. In addition, loans and short-term financing from Allianz SE were used to finance business operations.

5. Outlook

After reaching the intermediate target of the “Black Zero” in the service portfolio for first time in 2015, AMOS has repeated this in 2016. AMOS also aims to achieve the “Black Zero” in the service portfolio in 2017.

By design, the investment portfolio will continue to show a nega-tive result up to the scheduled break-even point for business cases of Allianz Group and of individual Allianz Group operating entities’ projects. Accordingly, the payback of this strategic transformation effort is planned for later years. In the coming year, AMOS expects to moderately improve the result of the investment portfolio in comparison to fiscal year 2016.

Funding requirements arising from these investments will con-tinue to be covered through obtained loans or registered bonds issued within Allianz Group. AMOS bears these investments. AMOS will continue to have access to short-term liquidity via the Allianz cash pool.

In 2017, AMOS projects strong increasing revenues, mainly driven by the investment portfolio. A moderate improvement of earnings prior to settlements under the profit and loss transfer agreement is expected in the investment portfolio, with the service portfolio maintaining the “Black Zero”. Overall, AMOS expects a negative result in 2017, which for AMOS is inherent with the strategic posi-tioning of the investment portfolio.

6. Opportunities and Risk Report

6.1 Opportunities ReportThe extension of the AMOS international delivery network creates various opportunities and supports Allianz Group in transforming into a digital group.

With the creation of AMOS IberoLatAm S.L., and thus building an ePac (insurance application platform) Core Competence Center (CCC) for the IberoLatAm region, the core insurance platform strat-egy can be completed. The new setup further contributes to effi-ciently serve the future business needs in the IberoLatAm region and ensures continuous service operations and delivery to Allianz Group operating entities using ePac.

With the transfer of additional services and functions, the AMOS branches in Slovakia and Hungary have the opportunity to expand their footprint beyond the Central & Eastern Europe (CEE) region, offer oneWeb proximity services for CEE and potentially for other regions, as well as joint SAP projects and data center services on a


global level. By joining unit forces, AMOS will benefit from scaling effects, increased global collaboration, exchange of best practices, and cost reductions.

The consolidation of Allianz Shared Services in India, intended for 1 January 2017, will enable AMOS to create one single delivery cent-er in India. This creates synergies and economies of scale, and fur-ther develops expertise and enhances the service delivery for Alli-anz Group operating entities.

The ongoing development of the Allianz Worldwide Partners (AWP) IT Future Model, including further IT service delivery for AWP (for example, the carve-out of Allianz Global Assistance US IT intended in 2017), will make global operations for AWP IT easier. As AWP, consisting of Allianz Global Assistance, Allianz Worldwide Care and Global Automotive, drives further synergies throughout its business, the AWP IT Future Model will also reflect these changes, and its operational setup will be enhanced to best serve customer needs.

Furthermore, the AMOS Executive Management Team has devel-oped a new branch concept that is to take effect on 1 January 2017. This completes the overall picture of the new AMOS organizational structure, which is designed to mirror the global structure of ser-vice lines along internal pillars under customer-centric leadership. The new branch structure will create a harmonized approach in all countries where AMOS locally delivers to Allianz Group operating entities. At the same time, it will allow AMOS to better manage its business, both globally and locally, with a truly global operating model that brings with it improved transparency, efficiency, qual-ity of work and employee career opportunities within the company.

6.2 Risk ReportAs an internal service provider to Allianz Group, AMOS aligns its risk management with operating and financial risks, and reports regularly to Allianz Group on its current risk position. Since AMOS is the internal shared services provider of Allianz Group, generally reference can be made to the risk report of Allianz Group.

6.2.1 Risk ProfileThe risk profile of AMOS is primarily dominated by operational risk resulting from its IT infrastructure and application services. Risks associated with the AMOS business strategy and AMOS business model are operational risks, reputational risks, business and stra-tegic risks, liquidity risks, market risks and credit risks. The core business objective of AMOS is to deliver high-quality services to Allianz companies by being a trusted partner and optimizing transaction costs of Allianz through realizing scale effects, stream-lining and increasing efficiency, automation, and leverage of labor costs. To protect AMOS and its clients, and to support its strategic

objectives, the AMOS Risk Management framework mainly focuses on operational and reputational risks, while not disregarding oth-er risks. What follows provides an overview of major risks that may affect AMOS.

Quantifyable Risks Operational risksOperational risks cover all risks of loss arising from inefficiencies or errors in processes and controls caused by technology, employ-ees, organizational structures or external factors. Operational risk is present in all activities conducted within AMOS and typically cannot be fully avoided, but needs to be managed by effective inter-nal controls. Therefore, the internal control framework is designed to ensure an enterprise-wide, holistic approach covering all busi-ness services and functions and all entities. It also takes the specif-ics of the AMOS business model into account; that is, service deliv-ery for AMOS clients, AMOS internal services and functions, and outsourcing of services and functions to third-party providers, including potential sub-outsourcing. AMOS fully utilizes the Alli-anz Group Risk Catalog to ensure consistent reporting of its risk mitigating measures and control activities within the Integrated Risk and Control System (IRCS).

A number of risks have been identified as part of the risk manage-ment processes and assessed by the Board with a high risk rating. The progress of risk-reducing measures is regularly reported to the Supervisory Board and Group Risk. Risks with a high rating are:

− Security Situation and Data Protection: Risks associated with the insufficient management of design, development, main-tenance and support of AMOS’s infrastructure and platforms

− Operational Resilience: Risks associated with missing guid-ance for the business continuity management system and missing overarching strategy for AMOS critical services and not effective and tested response plans

− Business Continuity Risk for Data Center: Risks associated with insufficient response planning and testing for loss and outages of the Allianz data centers because of terror attacks, natural disasters or other unforeseeable events

− Outsourcing Control Framework: Risks associated with a lack of efficiency of an end-to-end comprehensive control frame-work connecting control requirements from Allianz Group operating entities with those from AMOS and its third-party partners.

Market risksAmong market risks, all risks arising from changes in market con-ditions are identified, and are considered together with financial risks. Use is made of derivative financial instruments to hedge for-

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eign currency risk exposure due to loans and bonds. Hedging transactions are entered into with Allianz SE only.

Other Risks Reputational risksReputational risk may result from operational events with respect to AMOS services or via AMOS outsourcing partners, but may also be inherent to new business decisions. Potential reputational risks are discussed and tracked regularly with AMOS Corporate Com-munications.

Strategic risksStrategic risks include threats associated to the implementation of strategy, for example the implementation of the company’s target achievement. Responsibility for strategic corporate management lies with the Board. Further, to measure business policy decisions in AMOS, an Executive Committee on new business (NBM) will assess and monitor the impact of projects and contracts on the revenue, cost and earning situation.

Liquidity risksLiquidity risk is defined as the risk that requirements from current or future payment obligations cannot be met. This risk can arise primarily if there are mismatches in the timing of cash flows on the asset and liability side. The liquidity needs of AMOS are in general ensured by the operating cash flow. Projects and long-term invest-ments are financed by Allianz Group operating entities via debt capital. AMOS also participates in the cash pool of Allianz Group, which ensures that short-term liquidity needs are covered at any time. Losses of AMOS are compensated on the basis of the Profit and Loss Transfer Agreement, which is in place with Allianz SE.

Currency risksAMOS’s currency risk arises from its branches outside the Euro region and the use of non-Euro loans for financing purposes. The currency risk is monitored on a regular basis and managed in line with the Allianz Standard for Foreign Exchange Management. Non-Euro financing instruments are hedged via internal FX (foreign exchange) Forwards with Allianz SE to eliminate the currency risk. There have been no new financing transactions in non-Euro in 2016.

6.2.2 Risk GovernanceRisk Management OrganizationThe Risk Management function performs the independent over-sight function in a second line of defense for all risk related matters and has been established in line with the AMOS Governance & Con-trol Policy. The Risk Management function oversees all AMOS Group-wide short- and long-term risks, and is mandated with the maintenance of the Internal Control System.

The Risk Committee is a sub-committee of the AMOS Executive Management Team (EMT) and acts as the decision-making body for AMOS with respect to risk subjects within its delegated author-ities. It consists of the members of the AMOS EMT. The heads of the safeguarding functions and representatives of the Allianz Group Center participate as permanent guests. The Risk Committee is responsible for defining risk management activities and is the focal point for review and communication of risks, internal con-trols, resilience, compliance and legal matters to the responsible executive management.

Risk Management reports on the current risk position to the Risk Committee, the AMOS EMT and to the CRO of Allianz Group. Report-ing on the adequacy and effectiveness of the Risk Management framework to the Supervisory Board of AMOS is carried out by the Board of Management.

Throughout the entire organization, Risk & Control Officers as well as Resilience Officers have been established. Their main tasks are to consistently apply risk and resilience management procedures, like operational loss reporting, risk and control self-assessment, performance of controls, business impact analysis and disaster response planning.

Risk StrategyAs a core element of the Risk Management framework, the AMOS Board of Management designed the AMOS Risk Strategy to define the overall risk appetite with respect to all material risks. It is derived from the AMOS Business Strategy, which is based on the Allianz Operations strategy (H4 Chief Operating Officer Strategy).

Risk Policy FrameworkThe Risk Strategy is supported by an additional group-wide risk man-agement process, which is described in a set of policies (AMOS Risk Policy, AMOS Enterprise-Wide Risk-Based Integrated Control (ERIC) Policy, AMOS Resilience Policy) in which the requirements of Allianz Group are included in the AMOS business model. Further detailed guidance and process descriptions are set out in the related AMOS standards and manuals as well as guidelines of Allianz Group.


Integrated Risk and Control SystemThe objective of the AMOS ERIC Policy is to establish an Integrated Risk & Control System (IRCS) to proactively manage operational risks of AMOS through control activities, and to ensure effective-ness of key controls at all times. In its role as Allianz Group’s inter-nal shared services provider, who also outsources a major part of these provided services, AMOS needs to ensure that it covers all risks inherent to its business model, including service delivery to Allianz companies, AMOS internal services and functions, and out-sourcing (including sub-outsourcing) to third-party providers.

This approach is designed to ensure that AMOS’s ability to conduct business is safeguarded, that business operations are effective, and that AMOS adheres to applicable laws and regulations. It also guarantees that internal and external financial reporting and reg-ulatory reporting processes produce complete and accurate infor-mation.

AMOS designed jointly with Group Risk a standard set of control objectives to build one unified control environment, covering all relevant risks and supporting compliance in different regulations across the globe. This standard set of control objectives uses COBIT 5 as a common control language encompassing around 50 COBIT management practices. For each control objective, key control actions will be defined to cover standard services, including critical global applications. Consequently, the existing “Internal Controls over Financial Reporting (ICOFR)”, will be migrated into the future IRCS approach from 2017 onwards. Potentially uncovered control areas are subject to a gap analysis at AMOS and its external suppli-ers, and will be completed to the relevant level COBIT 5 control activities. This will build the basis to provide Allianz Group operat-ing entities with the required reporting for demonstrating risk and control oversight “end-to-end”; that is, a consistent internal con-trol system at Allianz Group operating entities, AMOS and external suppliers.

Resilience ManagementAs a service partner to Allianz Group, AMOS is subject to the appli-cable regulations and laws requiring the implementation and maintenance of sound resilience management. The objective of the AMOS Resilience Policy is to continue its operations and protect its employees and assets in cases of incidents or crises. It provides an effective business continuity, emergency and crisis manage-ment approach for services offered by AMOS and its third-party providers. It is the ambition of AMOS to complete and update dis-aster recovery planning for all business critical services, processes and functions, and to align them to the needs of Allianz companies through integration and testing.

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BFINANCIAL STATEMENTS

Pages 30 – 47


Balance sheet at December 31, 2016Assets1

€2016 2016 2016 2015

A. Non-current assets I. Intangible assets 1. Internally generated commercial property rights and similar rights and

assets 68,783,104 125,780,815 2. Purchased concessions, commercial property rights and similar rights

and assets as well as licenses to such rights and assets 533,711,152 436,350,517602,494,256 562,131,332

II. Property, plant and equipment 2. Technical plant and equipment 130,573,138 136,567,694 4. Down payments made and assets under construction 247,991,825 203,875,808

378,564,963 340,443,502 III. Financial assets 1. Investment in affiliated companies 87,661,047 87,661,047 2. Loans to affiliated companies 23,413,132 23,441,569 3. Participations 54,405,755 54,405,755 5. Securities 4,625,561 6,095,318

170,105,495 171,603,6881,151,164,714 1,074,178,522

B. Current assets II. Receivables and other assets 1. Trade receivables

thereof with a remaining term of more than one year € 0 (2015: € 0) 13,968,941 26,061,402 2. Receivables due from affiliated companies

thereof with a remaining term of more than one year € 0 (2015: € 0) 577,219,436 439,385,947 3. Receivables from companies in which participations are held

thereof with a remaining term of more than one year € 0 (2015: € 0) 11,597,390 2,377,500 4. Other assets

thereof with a remaining term of more than one year € 8,353 (2015: € 0) 68,690,708 91,295,342671,476,476 559,120,190

IV. Balances with banks, Bundesbank checks and cash on hand 28,860,299 46.792.474700,336,774 605,912,664

C. Prepaid expenses 59,680,451 53,929,759E. Excess of plan assets over post-employment benefit liability 1,387,735 0Total assets 1,912,569,674 1,734,020,946

1– Item numbering as per § 266 (2) HGB


Balance sheet at December 31, 2016Equity and Liabilities2

€2016 2016 2015

A. Shareholders’ equity I. Issued capital 121,000 121,000 II. Additional capital reserves 253,374,878 211,174,878

253,495,878 211,295,878B. Provisions 1. Reserves for pensions and similar obligations 1,647,450 4,613,956 2. Tax provisions 20,471,390 14,209,942 3. Other provisions 213,226,736 179,374,825

235,345,576 198,198,724C. Liabilities 4. Trade payables

thereof due within one year € 28,331,999 (2015: € 47,544,382) 28,331,999 47,544,382 6. Liabilities to affiliated companies

thereof due within one year € 811,993,514 (2015: € 542,347,173) thereof due within up to five years € 371,515,623 (2015: € 556,783,848) thereof due more than five years € 181,282,077 (2015: € 146,051,954) 1,364,791,214 1,245,182,975

7. Liabilities to companies in which a participating interest is held thereof due within one year € 405,148 (2015: € 0) 405,148 3,203,192

8. Other Liabilities thereof due within one year € 29,103,451 (2015: € 27,843,898) thereof from taxes € 18,004,852 (2015: € 24,304,150) thereof for social security € 73,029 (2015: € 58,566) 29,103,451 27,843,898

1,422,631,812 1,323,774,448D. Prepaid expenses 1,096,408 751,897Total equity and liabilities 1,912,569,674 1,734,020,946

2 – Item numbering as per § 266 (3) HGB

B Financial Statements

30 Balance sheet at December 31, 2016 32 Income statement 33 Notes to the Financial Statements 47 Auditor’s Report


Income statement €

2016 2016 2016 2015 1. Revenues 950,927,778 847,303,587 2. Increase or decrease of finished and unfinished goods 0 0 3. Other own work capitalized 26,926,211 19,612,476 4. Other operating income 56,236,868 119,896,836 thereof from currency conversion: € 14,586,119 (2015: € 17,244,130) thereof out-of-period revenues: € 23,627,765 (2015: € 39,294,164) 1,034,090,857 986,812,899 5. Expenses for IT operations a) Expenses for materials and other supplies -1,667,836 -3,643,060 thereof out-of-period expenses: € 0 (2015: € 0) b) Expenses for services received -480,381,435 -454,643,767 thereof out-of-period expenses: € 0 (2015: € 259,048) c) Service provider services -261,576,689 -212,598,347 thereof out-of-period expenses: € 0 (2015: € 10,043)

-743,625,960 -670,885,175 6. Personnel expenses a) Wages and salaries -241,879,482 -213,297,280 thereof out-of-period expenses: € 9,230 (2015: € 304,238) b) Social security -28,189,504 -25,922,380 thereof out-of-period expenses: € 0 (2015: € 1,600) c) Pensions -20,272,390 -19,408,968

-290,341,376 -258,628,629 7. Depreciation and amortization a) on intangible assets -163,606,365 -107,246,944 b) on property, plant and equipment -36,128,016 -43,370,065

-199,734,381 -150,617,010 8. Other operating expenses -63,954,311 -101,661,069 thereof from currency conversion: € 13,244,936 (2015: € 16,076,966) thereof out-of-period expenses: € 0 (2015: € 25,242) -1,297,656,028 9. Income from participations 1,901,803 1,669,284 thereof income from profit transfer: € 1,901,803 (2015: € 1,669,284) thereof from affiliated companies: € 1,901,803 (2015: € 1,669,284) 11. Other interest and similar income 1,859,035 2,027,143 thereof from affiliated companies: € 1,206,133 (2015: € 1,983,244) thereof from discounting interest on provisions: € 175,545 (2015: € 1,035) 13. Interest and similar expenses -19,005,252 -19,307,774 thereof from affiliated companies: € 18,019,491 (2015: € 18,300,647) thereof from discounting interest on provisions: € 147,988 (2015: € 348,076) 14. Taxes on income and earnings -2,758,671 -2,492,842 15. Result after tax -281,568,255 -213,083,173 16. Other Taxes -1,846,054 -1,083,182 17. Income from losses absorbed 283,414,308 214,166,355 18. Net income/loss for the year 0 0 Net profit/loss 0 0


Legal RegulationsAllianz Managed Operations & Services SE (AMOS) is located at Fritz-Schäffer-Strasse 9, 81737 München. The company is listed in the trade register B at the Munich District Court with the registra-tion number 173388.

AMOS prepares its annual financial statements and management report in accordance with the provisions of the German Commer-cial Code (HGB) and German law governing the establishment of the Societas Europaea (SE Implementation Act). It meets the crite-ria for recognition as a large corporation on the basis of the provi-sions in § 267 section 3 of the German Commercial Code (HGB). The financial statements have been prepared in Euros (€).

The income statement has been prepared using the total cost method (§ 275 section 2 HGB). Income statement item names have been adjusted in accordance with § 265 sections 5 and 6 HGB in accordance with the business activity of AMOS.

Accounting and valuation policies Figures may not add up due to rounding differences.

In the reporting period the following deviations of applied presen-tation, accounting and valuation method of preceding periods were made.On 23 July 2015, the Accounting Directive Implementation Act (Bil-RUG) entered into force and is to be applied for fiscal year 2016 for the first time. It entails major changes, which also lead to changes in the commercial reporting of companies. Amongst others, the income statement line items “earnings from extraordinary activi-ties” and “expenses from extraordinary activities” are eliminated, as well as the interim results “result from ordinary business activi-ties” and “result from extraordinary business activities”. Further-more, the income statement presentation is changed with the addition of the interim result “result after tax” in between of the “taxes on income and earnings” and “other taxes”. These changes are mandatory, applicable for the financial year 2016, and corres-pondingly are reflected in the notes.

Intangible assets, property, plant and equipment Intangible assets, property plant and equipment are stated at their acquisition cost or production cost less accumulated straight-line depreciation and amortization over the defined economic lives, less accumulated impairments. Interest expenses are not capita-lized as part of production costs but are expensed as incurred. Amortization and depreciation is calculated on a monthly basis.

Assets Useful life in yearsTenant fixtures Up to 10 (depending on lease term)Motor vehicles 6Office equipment 7 to 13Personal computers and mobile devices 2 to 3Software 3Self-created software 5 to 10Network components 3 to 10Server and storage 3 to 5

AMOS performs strategic projects for Allianz Group, for which a longer economic life is planned. This primarily concerns the imple-mentation of the insurance portfolio management system Allianz Business System international (ABSi) (10 years), Allianz Group financial systems such as SAP ERP (10 years) and Solvency II sys-tems (10 years), as well as infrastructure projects such as Data Center Consolidation (8 years) and Global Network (10 years).

At year-end 2016, the project Allianz Global Network continues to be in development and is anticipated to be available in the first half year 2017 with the full scope of functionality expected by manage-ment and customers. Since peripheral equipment such as telepho-nes is already partly in use, AMOS has commenced depreciation of this peripheral equipment.

The production costs are reported with the lower production cost limit.

Notes to the Financial Statements




Intangible assets include various IT projects capitalized at acqui-sition or production costs, which AMOS implements for customers. Purchased intangible assets include completed and not completed intangible assets.

In exercising the capitalization options pursuant to § 248 section 2 HGB, intangible assets that were self-created in the financial year are capitalized and depreciated on a straight-line basis over the defined economic lives. An impairment test is performed in case of a triggering event or regularly at year-end. Impairments are recog-nized when an expected permanent impairment is determined. AMOS considered in previous years the shareholder expectation on cost of equity as discount rate in the calculation of the net present value of future cash flows for the impairment test. From the finan-cial year 2016 onwards, AMOS calculates the net present value of future cash flows for the impairment test with using the weighted average cost of capital as discount rate. The weighted average cost of capital is 3.17 percent in 2016 and includes the shareholder expectation on cost of equity as well as current financing condi-tions of AMOS. Based on shareholder expectation on cost of equity,

the discount rate would have been 8 percent in the current finan-cial year. This change considers the financing structure in the impairment test and enables a better true and fair view on asset, financial and earnings position. Impairments in the financial year 2016 are illustrated in the section “notes to the balance sheet and income statement”. Self-created intangible assets include comple-ted and not completed intangible assets.

In the financial year, expenses amounting to € 1,453 k (2015: € 1,404 k) for pre-studies for self-created intangible assets incurred were not capitalized.

Assets with an acquisition cost of up to € 410 are immediately depreciated in accordance with tax regulations.

Financial assetsFinancial assets are measured according to the diluted lower of cost or market principle.

Development of non-current assets in the financial year 2016

Acquisitions Depreciation and amortization Balance sheet results

Balance at01.01.16

Total €

Additions2016

€

Reclassifications2016

€

Disposals2016

€

Balance at31.12.16

Total €

Balance at01.01.16

Total €

Additions2016

€


€

Disposals2016

€

Balance at31.12.16

Total €

Balance at01.01.16

Total €

Balance at31.12.16

Total €Purchased concessions, commercial property rights and similiar rights and assets as well as licenses to such rights and assets 830,257,547 173,668,325 -4,116,255 -8,886,467 990,923,150 393,907,030 69,986,050 0 -6,681,083 457,211,997 436,350,517 533,711,152Internally genertated commercial property rights and similar rights and assets 237,478,041 32,506,369 4,116,255 0 274,100,665 111,697,226 93,620,335 0 0 205,317,561 125,780,815 68,783,104Total intangible assets 1,067,735,588 206,174,694 0 -8,886,467 1,265,023,815 505,604,256 163,606,385 0 -6,681,083 662,529,559 562,131,332 602,494,256

Mainframes 20,818,420 1,177,735 0 -1,490,201 20,505,954 18,333,875 827,217 0 -443,912 18,717,179 2,484,545 1,788,774Storage media 60,612,735 17,910 0 -501,958 60,128,687 47,633,787 3,161,234 0 -289,458 50,505,563 12,978,949 9,623,124Print and post-press 80 0 -81 0 -0 11 -12 0 0 -0 69 0Network components 274,033,715 37,427,090 -154,360 -4,694,413 306,612,031 38,318,016 8,352,168 -4,288 -4,692,649 41,973,247 235,715,699 264,638,784Servers 143,528,896 20,047,241 1,722,643 -51,086 165,247,695 103,740,808 6,212,522 61,143 -51,086 109,963,387 39,788,088 55,284,308Plant and office equipment 124,933,003 16,873,698 -1,656,359 -5,660,509 134,489,833 75,981,304 17,365,369 -56,855 -5,570,578 87,719,240 48,951,700 46,770,593Low-value assets 2,139,607 56,849 88,156 -65 2,284,547 1,615,154 210,020 0 -6 1,825,168 524,453 459,379Total property plant and equipment 626,066,456 75,600,522 0 -12,398,233 689,268,746 285,622,954 36,128,519 0 -11,047,690 310,703,783 340,443,502 378,564,963

Investments in a affiliated companies 87,661,047 0 0 0 87,661,047 0 0 0 0 0 87,661,047 87,661,047Loans to affiliated companies 23,441,569 0 0 -28,437 23,413,132 23,441,569 23,413,132Participations 54,405,755 0 0 0 54,405,755 0 0 0 0 0 54,405,755 54,405,755Securities 6,095,318 0 0 -1,469,757 4,625,561 0 0 0 0 0 6,095,318 4,625,561Total investments 171,603,689 0 0 -1,498,194 170,105,495 0 0 0 0 0 171,603,689 170,105,495

Total AMOS SE 1,865,405,733 281,775,216 0 -22,782,893 2,124,398,056 649,196,952 199,734,904 0 -17,728,773 973,233,342 1,074,178,523 1,151,164,714


Investment in affiliated companiesInvestments in affiliated companies are carried at acquisition cost or at the contribution value (book value carried by the predecessor in title).

Loans to affiliated companiesLoans to affiliated companies are valued at acquisition cost. Neces-sary write-downs are performed in accordance with § 253 (3) sen-tence 5 HGB.

Participations Participations are valued at cost.

Securities Part of the pension commitments are secured by a contractual trust arrangement (Methusalem Trust e.V.). These trust assets con-stitute primarily plan assets for which offsetting in accordance with § 246 (2) HGB is required, and for which the fair value is either equivalent to the asset value or the market value in accordance with § 253 (1) HGB.

Trade and other receivables Trade and other receivables are valued at their nominal amounts.

Option rights are acquired to hedge liabilities from Stock Apprecia-tion Rights (SAR). The Restricted Stock Units (RSU) are hedged through forward contracts (Hedge RSU) with Allianz SE, carried as a receivable due from Allianz SE and as an equity swap. The option rights and forward contracts are combined with the corresponding underlying transactions as a hedge, provided a direct hedging rela-tionship exists. The underlying transactions are reported under ‘Other Provisions’ and the hedging transactions are reported under ‘Other Assets’. A micro-hedge is used to ensure the hedges are fully protected against the risk of price changes as a result of fluctua-tions in market prices.

The effectiveness of the hedging for the Group Equity Incentive Plans, which are scheduled to expire in 2020 at the latest, is che-cked prospectively and retrospectively at the balance sheet date using the critical term match method to match conditions, para-meters and risks.

Acquisitions Depreciation and amortization Balance sheet results

Balance at01.01.16

Total €

Additions2016

€


€

Disposals2016

€

Balance at31.12.16

Total €

Balance at01.01.16

Total €

Additions2016

€


€

Disposals2016

€

Balance at31.12.16

Total €

Balance at01.01.16

Total €

Balance at31.12.16

Total €Purchased concessions, commercial property rights and similiar rights and assets as well as licenses to such rights and assets 830,257,547 173,668,325 -4,116,255 -8,886,467 990,923,150 393,907,030 69,986,050 0 -6,681,083 457,211,997 436,350,517 533,711,152Internally genertated commercial property rights and similar rights and assets 237,478,041 32,506,369 4,116,255 0 274,100,665 111,697,226 93,620,335 0 0 205,317,561 125,780,815 68,783,104Total intangible assets 1,067,735,588 206,174,694 0 -8,886,467 1,265,023,815 505,604,256 163,606,385 0 -6,681,083 662,529,559 562,131,332 602,494,256

Mainframes 20,818,420 1,177,735 0 -1,490,201 20,505,954 18,333,875 827,217 0 -443,912 18,717,179 2,484,545 1,788,774Storage media 60,612,735 17,910 0 -501,958 60,128,687 47,633,787 3,161,234 0 -289,458 50,505,563 12,978,949 9,623,124Print and post-press 80 0 -81 0 -0 11 -12 0 0 -0 69 0Network components 274,033,715 37,427,090 -154,360 -4,694,413 306,612,031 38,318,016 8,352,168 -4,288 -4,692,649 41,973,247 235,715,699 264,638,784Servers 143,528,896 20,047,241 1,722,643 -51,086 165,247,695 103,740,808 6,212,522 61,143 -51,086 109,963,387 39,788,088 55,284,308Plant and office equipment 124,933,003 16,873,698 -1,656,359 -5,660,509 134,489,833 75,981,304 17,365,369 -56,855 -5,570,578 87,719,240 48,951,700 46,770,593Low-value assets 2,139,607 56,849 88,156 -65 2,284,547 1,615,154 210,020 0 -6 1,825,168 524,453 459,379Total property plant and equipment 626,066,456 75,600,522 0 -12,398,233 689,268,746 285,622,954 36,128,519 0 -11,047,690 310,703,783 340,443,502 378,564,963

Investments in a affiliated companies 87,661,047 0 0 0 87,661,047 0 0 0 0 0 87,661,047 87,661,047Loans to affiliated companies 23,441,569 0 0 -28,437 23,413,132 23,441,569 23,413,132Participations 54,405,755 0 0 0 54,405,755 0 0 0 0 0 54,405,755 54,405,755Securities 6,095,318 0 0 -1,469,757 4,625,561 0 0 0 0 0 6,095,318 4,625,561Total investments 171,603,689 0 0 -1,498,194 170,105,495 0 0 0 0 0 171,603,689 170,105,495

Total AMOS SE 1,865,405,733 281,775,216 0 -22,782,893 2,124,398,056 649,196,952 199,734,904 0 -17,728,773 973,233,342 1,074,178,523 1,151,164,714




The underlying transactions, which consist of future payment obli-gations, totaled € 11,521 k (€ 10,274 k) on the balance sheet date. With hedge accounting, risks of changes in value in the amount of € 3,941 k (€ 6,011 k) is hedged. AMOS applies the net hedge presen-tation method.

Prepaid expenses Prepaid expenses are valued at their nominal amounts.

Reserves for pensions and similar obligationsAMOS has made pension commitments for which pension reserves have been formed. Part of these pension commitments are secured by a contractual trust arrangement (Methusalem Trust e.V.).

These trust assets constitute plan assets for which offsetting in accordance is required, and for which the fair value is either equi-valent to the asset value or the market value.

The settlement amount is determined by applying the projected unit credit actuarial method or reported as the present value of the acquired pension entitlement. In the case of security-linked com-mitments, the fair value of the offset assets is applied.

Status 31 December, (in percent) 2016 2015Discount rate (10-year average)* 4.01 - Discount rate (7-year average)* 3.23 3.89Pension trend 1.50 1.70Salary trend including average career trend 3.25 3.25

On 31 December 2015, the discount rate was determined on the basis of the to date valid German Regulations on the Discounting of Provisions (Rückstellungsabzinsungsverordnung) based on the 7-year average. In line with the legislative change on 31 December 2016, the 10-year average was applied for pensions and a 7-year average was continued to be applied for other employee-related liabilities.

Notwithstanding the above, some of the pension commitments use the guaranteed rate of the pension commitments of 2.75 per-cent per annum and the guaranteed rate of pension increase of 1 percent per annum as their basis. The mortality tables used are the current RT2005G tables of Dr. Klaus Heubeck, adjusted with respect to mortality, disability and fluctuation to reflect company-specific circumstances.

The retirement age applied is the contractual or legal retirement age as per the German Pension Insurance Retirement Age Adjust-ment Act of 2007.

Status 31 December, (in €) 2016 2015Acquisition cost of the offset assets 76,042,578 63,116,851Fair value of the offset assets 77,191,881 63,696,430Settlement amount of the offset debts 77,451,596 67,955,765

The exceeding amount of the fair value of the plan assets over the offset debt of the defined contribution pension contract (BPV) is recognized in the statement of financial position as a surplus from offsetting according to § 246 section 2 sentence 2 HGB.

The remaining pension provision is recognized net with the res-pective fair value of the plan assets in balance sheet item.

You can find further explanations of reporting of pensions and similar obligations in the Notes under Notes on liabilities and Con-tingent liabilities.

The based on 7-year average interest rate determined settlement amount of offset liabilities as of 31 December 2016 amounts to € 77,743 k. The difference amounts to € 291,9 k. Under consideration of the clarification of the Federal Ministry of Finance as of 23 December 2016, no profit distribution block as per § 310 AktG (Stock Corporation Act) arise, as AMOS closed a profit transfer agreement with Allianz SE.

Tax provisionsTax provisions are recognized according with § 253 section 1 sen-tence 2 HGB in the amount of the defined settlement amount according to commercial assessment. There is an income tax and trade tax unit with Allianz SE.

Other provisionsThe provision for employee jubilees, partial retirement and early retirement benefit are also determined in accordance with actua-rial principles and recognized as liability in full.

In accordance with § 253 section 1 sentence 1 HGB, provisions are entered at the anticipated settlement amount required on the basis of reasonable commercial appraisal. Expected cost and price changes as well as uncertainty is considered in the determination of provisions.

Provisions with a residual term in excess of one year are discounted based on the average maturity of the obligation and the discount rate published by the German Central Bank in line with the provi-sion discount regulations (Rückstellungsabzinsungsverordnung)


and in accordance with § 253 (2) HGB. Unwinding gains and losses are reported in the income statement line item other interest income or interest and similar expenses, respectively.

AMOS has obligations from staff long-service awards, a long-term credit account and partial retirement and early retirement agree-ments, which are presented in Other provisions. The provisions from staff long-service awards, long-term credit account, partial retirement and early retirement agreements are determined accor-ding to actuarial principles and the full amount of the obligations determined is carried as a liability. The assets reserved in the Methusalem Trust e.V. for partial retirement security deposits and the long-term credit account, represent off-settable pension assets, the fair value of which is either equivalent to the asset value or the market value. These obligations are valued largely in the same way as for pension commitments and on the basis of the same accoun-ting assumptions.

Status 31 December, (in €) 2016 2015Acquisition cost of the offset assets 14,836,377 14,404,172Fair value of the offset assets 16,090,959 15,732,934Settlement amount of the offset debts 20,686,625 20,746,025

Liabilities Liabilities are carried at the settlement amount.

Foreign currency translation All business transactions are, in principle, posted in the original currency and converted to Euros at the rate prevailing on the day (average spot exchange rate). On 31 December 2016, receivables and liabilities as per § 256 a sentence 1 HGB were measured at the average spot exchange rate on the balance sheet date. The provisi-ons of § 256 a sentence 2 HGB were applied to receivables and lia-bilities due within one year. Profit and loss were posted in the income statement in the “thereof” note.

Derivative financial instruments and hedge accountingUse is made of derivative financial instruments to hedge foreign currency risk exposure that can arise due to foreign currency loans and bonds. Provided commercial-code requirements are fulfilled for offsetting opposing changes in fair value or cash flows resulting from the onset of comparable risks, the underlying transactions are combined with these derivative financial instruments as a hedge, provided a direct hedging relationship exists. If no direct hedging relationship exists, they are accounted for in accordance with general valuation principles. The derivative financial instru-ments are combined into valuation units with the opposing foreign currency transactions with respect to future cash flows. If, over the life of the hedging relationship, there is no change to parameters

of the underlying transaction and hedge with respect to valuation, and it can be assumed that the payments will be fully covered, the opposing changes of expected payments from the hedging relati-onship are not reported in the balance sheet or income statement. The ineffective parts of hedging relationships (i.e. uncompensated changes in fair value or unhedged foreign currency positions) are treated according to general valuation principles. The effectiveness of the hedging relationships is determined prospectively and ret-rospectively at each balance sheet date. Hedging relationships are exclusively entered into with Allianz SE.

To hedge against foreign currency risk in USD (USD 44,200 k) und CHF (CHF 107,619 k), AMOS enters into opposing forward exchange transactions. The sum of the risks hedged with the valuation unit is equivalent to the fair value of the forward exchange transactions.

On 31 December 2016, the fair value of the forward exchange tran-sactions to hedge foreign currency transactions was € 15,472 k (2015: € 13,177 k).

Prepaid expensesPrepaid expenses are valued at their nominal amount.

Deferred taxes Pursuant to the option provided under § 274 section 1 sentence 2 HGB, deferred tax assets in excess of the off-settable amount are not included.

The largest difference between the commercial and fiscal measu-rement results from provisions for pensions, leading to a deferred tax assets. A tax rate of 31 percent is used in the measurement of domestic deferred tax.

Profit distribution blockThe sum total of amounts, pursuant to § 268 section 8 HGB, are essentially subject to the profit distribution block or are subject to the profit transfer block as per § 268 section 8 in combination with § 301 AktG (Stock Corporation Act) is € 71,187 k (2015: € 127,689 k)

This amount comprises capitalized self-created intangible assets totaling € 68,783 k (2015: € 125,781 k) and capitalizing assets at fair value totaling € 2,404 k (2015: € 1,908 k), exclusively serving debts from pension obligations. The amount subject to the profit transfer block is fully covered by freely available shareholder equity.




Notes to the balance sheet and income statement

Intangible assets (Assets A.I.) Intangible assets consist of self-created intangible assets, acquired software licenses, completed assets and assets under construction.

Self-created intangible assets decreased from € 125,781 k in the previous year to € 68,783 k. The purchased intangible assets include both completed intangible assets and assets under construction. A total of € 146,025 k was capitalized in 2016 for development costs of intangible assets.

These investments are primarily driven by global Allianz Group projects and by projects for individual companies in the Allianz Group. Increases were offset by disposals and depreciation, which are illustrated in the fixed asset movement schedule.

Property, plant and equipment (Assets A.II.) Technical plant and equipment mainly comprise of server, storage and network components.

Prepayments assets under construction include € 247,992 k for the Allianz Global Network and Data Center Consolidation assets, which are not yet completed and presented in the fixed asset move-ment schedule in the line items server, storage and network com-ponents.

Depreciation on additions in the financial year 2016 amount to € 31,182 k.

Financial assets (Assets A.III.) Investment in affiliated companies (Assets A.III.1.)

Participation(percentage

share)

Equity capital31.12.2016

€ k

Result2016

€ k

Equity capital31.12.2015

€ k

Result2015

€ kDirect participationsAMOS European Services SAS (Paris, France) 100% 41,928.3 1,407.5 40,520.8 478.8Allianz Managed Operations & Services Netherlands B.V. (Rotterdam, Netherlands) 100% -2,389.1 -2,877.8 488.63 -405.9Allianz Managed Operations & Services (Thailand) Co., Ltd, (Bangkok, Thailand) 100% 2 5,497.1 1,815.9 3,521.4 1,112.6Metafinanz-Informations-systeme GmbH (Munich, Germany) 100% 1,026.7 1,901.8 1 1,026.7 1,669.3 1

AMOS International B.V. (Amsterdam, Netherlands) 100% 35,509.0 -13.0 35,522.0 -28.0Allianz Telematics S.p.A. (Triest, Italy) 100% 1,832.4 685.1 1,148.4 -275.0Indirect participationsAMOS of America, Inc. (Petaluma, USA) 95% 11,405,1 -5,135,2 46,759.6 -13,830.6

1 – Result before profit transfer 2 – AMOS holds 99,99978947 percent of shares. Allianz SE and Allianz Europe B.V. each hold 0.000105268

percent of shares

AMOS European Hosting SAS was founded in March 2014 and officially became AMOS European Services SAS in November 2014. AMOS has held a 100 percent share in the company since its foun-dation.

In 2012, the AMOS branch in the Netherlands was converted to a 100 percent subsidiary.

Allianz Managed Operations & Services Thailand Co. Ltd was foun-ded in November 2014 and AMOS has since November 2014 held a 99.9 percent share in the company. Allianz SE and Allianz Europe B.V. each hold 0.000105268 percent of the shares.


Metafinanz-Informationssysteme GmbH (Munich) has been a 100 percent subsidiary of AMOS since August 2011. A domination and profit transfer agreement was concluded with AMOS in the finan-cial year 2012.

In July 2015, AMOS acquired Allianz Telematics S.p.A. from Allianz Italy SpA. AMOS has since that time held a 100 percent share of the company.

The company AMOS International B.V. was founded in August 2015 and since that time has been a 100 percent subsidiary of AMOS. In September 2015, AMOS International B.V. acquired preference sha-res in AMOS of America, Inc. and since that time has held a 95 per-cent share of the company.

Loans to affiliated companies (Assets A.III. 2.) The loans to affiliated companies include loans to AMOS European Services SAS totaling € 20,000 k (2015: € 20,000 k) and to Allianz Managed Operations & Services (Thailand) Co., Ltd. totaling € 3,413 k (2015: € 2,025 k).

Participations (Assets A.III.3.)

Participation (percentage

share)

Equity capital

31.12.2016 € k

Result 2016

€ k

Equity capital

31.12.2015€ k

Result2015

€ kAMOS Austria GmbH (Vienna, Austria) 49 % 45,852.2 4,363.6 41,987.2 4,612.2AMOS IberoLatAm (Barcelona, Spain) 49 % 67,327.5 1,487.8 80,951.6 0

AMOS has held a 49.9 percent share in AMOS Austria GmbH (Vien-na) since June 2011.

Furthermore, in December 2015, Allianz Compañía de Seguros y Reaseguros S.A. founded the company AMOS IberoLatAm S.L., and AMOS acquired a 49 percent participation in the company in December 2015.

Securities (Assets A. III. 5.)The portfolio of securities comprises investment fund shares of € 4,626 k (2015: € 6,095 k) serving as insolvency insurance for parti-al retirement credits under the Contractual Trust Arrangement (CTA). The shares in the CTA are assets received up to the balance sheet date with the same value as the liability under the partial retirement agreements insured against insolvency from 1 July 2004.

Assets and debts were offset pursuant to § 246 section 2 sentence 2 HGB.

Receivables and other assets (Assets B.II.) Receivables from affiliated companies are primarily the receivable of € 284,474 k (2015: € 214,732 k) plus applicable taxes from the domination and profit transfer agreement with Allianz SE. Further-more, trade receivables from Group customers arising from unpaid invoices for services amounted to € 274,232 k (2015: € 224,684 k).

Trade receivables from companies in which participations are held include in the financial year 2016 € 11,597 k (2015: 2,378 k).

Other assets include among other items tax refund claims resul-ting from the affiliation for tax purposes with Allianz SE totaling € 18,416 k (2015: € 25,340 k). Tax fund reclaims were partly offset by tax liabilities resulting from the affiliation for tax purposes with Allianz SE totaling € 8,588 k (2015: € 13,780 k). Receivables from pre-vious year value added tax amounted to € 1,784 k (2015: € 11,028 k). At the AMOS Switzerland branch, VAT receivables amounted to € 4,352 k (2015: € 6,692 k), while VAT liabilities amounted to € 3,495 k (2015: € 6,253 k).

Furthermore, options on shares of Allianz SE to hedge the risks of the Allianz Group arising from the Group Equity Incentives (GEI) and Allianz Equity Incentives (AEI) amounted to € 11,521 k (2015: € 10,274 k) and SAP licenses held for resale amounted to € 4,510 k (2015: € 11,312 k). Details as per § 285 No.23 HGB on the valuation units (GEI) are reported under Trade and other receivables in the section Accounting and valuation policies.

In addition to above-listed items, reimbursement rights from tax authorities resulting from corporate tax and loans to employees are also reported under this item.

Prepaid expenses (Assets C.) Prepaid expenses increased by € 5,750 k from € 53,930 k in 2015 to € 59,680 k, and comprise prepaid amounts for maintenance, servi-cing of hardware and software, as well as lease fees.

Issued capital (Equity and liabilities A.I.)Similar to the previous year, the issued capital on 31 December 2015 amounted to € 121 k, and is divided into 121,000 shares of € 1 each.

Additional capital reserves (Equity and liabilities A.II.) The capital reserve increased by € 42,200 k compared to 2015 due to a cash injection from Allianz SE on 15 April 2016.The capital reserves includes freely available equity pursuant to § 272 (4) HGB.




Reserves for pensions and similar obligations (Equity and liabilities B.1) The reserves for pensions mainly comprise of pension obligations from deferred compensation schemes (PZE) amounting to € 1,290 k (2015: € 1,330 k).

Tax provisions (Equity and liabilities B.2.) Tax provisions contain € 9,968 k (2015: € 6,554 k) corporate income tax provisions and € 10,504 k (2015: € 7,655 k) VAT provisions.

Other provisions (Equity and liabilities B.3.) The main items under Other Provisions are € 152,578 k (2015: € 122,055 k) trade provisions, € 19,785 k (2015: € 20,746 k) profit-sharing provisions, € 11,124 k (2015: € 9,293 k) vacation and over-time provisions and € 8,396 k (2015: € 6,746 k) provisions for Group Equity Incentives (GEI) and the Allianz Equity Incentives (AEI).

The € 33,852 k increase in other provisions mainly results from € 30,523 k higher trade provisions in 2016, an € 2,299 k higher pro-vision for salary tax, € 1,802 k severance provision and the € 1,649 k GEI and AEI provision increase. An € 2,401 k provision consumption of provisions previously recognized within a business carve out lead to a partial offset.

In the financial year 2016, the provisions for outstanding trade payables include warranty provisions totaling € 5,029 k (2015: € 9,940 k), which are recognized in accordance with HGB § 249 sec-tion 1.

Other provisions contain obligations with a term of more than one year, which were discounted at the interest rate published by the German Central Bank (Deutsche Bundesbank) on the balance sheet date and are illustrated in the line item “interest income and similar income” and “interest expense and similar expenses”.

Further amounts were mainly recognized for partial retirement of € 4,596 k (2015: € 5,013 k), employee jubilees of € 4,231 k (2015: € 4,228 k), gratuities of € 2,401 k (2015: € 2,459 k), income tax of € 2,299 k (2015: € 0 k) and severance payments of € 1,802 k (2015. € 0 k).

Liabilities (Equity and liabilities C.) Liabilities resulting from trade payables relate to not yet paid claims by third parties for goods and services received and for con-tractual agreements.

Liabilities to affiliated companies comprise primarily liabilities arising from loans and bonds. The loan providers are the parent company Allianz SE/Munich, AGA International S.A. Paris/France, Allianz IARD S.A, Paris/France, Allianz Hellas Insurance Company,

Athens/Greece, Allianz S.p.A, Milano/Italy, Allianz Risk Transfer Zurich/Switzerland, Allianz Lebensversicherungs-AG/Stuttgart, Euler Hermes Group S.A., Paris/France, Allianz Vie S.A., Paris/France, Allianz Global Corporate & Specialty SE, Munich, Allianz Compañía de Seguros y Reaseguros S.A., Barcelona/Spain, Allianz Worldwide Partners SAS, Saint Ouen/France and Allianz Suisse Lebensversicherungs-Gesellschaft AG, Wallisellen/Switzerland. In the financial year 2016, loan liabilities, without taking into account interest, rose to € 930,014 k (2015: € 836,036 k).

This item also includes the following liabilities: € 359,950 k (2015: € 344,453 k) in liabilities to Allianz SE resulting from the cash pool, and liabilities of € 70,871 k (2015: € 61,439 k) through the clearing business with Allianz Group companies.

Revenues (Income statement 1.) BilRUG changes in § 277 (1) HGB make previous year revenues not comparable with financial year 2016 revenues since AMOS did not adjust previous year revenues for BilRUG. If § 277 (1) HGB would have been applied, previous year revenues would have amounted to € 849,432 k.

As a result of the new definition of revenue, the line item “other income from business activities” was impacted, too. Rent income and income from intragroup charges, which were previously pre-sented as “other income from business activities”, are presented in revenues beginning with the financial year 2016.

If § 277 (1) HGB would have been applied, previous year revenues would be stated as follows:

2015k €

2015 nach BiLRUG

k €Effekt

k €Revenues 847,304 849,432 +2,128Other income from business activities 119,897 117,768 -2,128

The first time application off BilRUG and related changes are exp-lained in further detail in the section Accounting Policies.

In the financial year 2016, AMOS achieved revenues from shared services totaling € 950,928 k (2015: € 874,304 k).


Accordingly, revenues increased over the previous year by € 103.7 million, or 12.2 percent:

Revenue (in € million) Revenue (in percent)2016 2015 ³ Change 2016 2015 Change

ServiceportfolioCEO 79,2 71,0 8,2 8,3 8,4 0,0CFO 36,4 28,9 7,5 3,8 3,4 0,4Customer & Solution Management 0,7 0,0 0,7 0,1 0,0 0,1Application Platform – Customer Platform 25,4 23,0 2,4 2,7 2,7 0,0Global Delivery Network 9,0 9,3 -0,4 0,9 1,1 -0,2Application Platform – Global Platform 191,4 163,0 28,4 20,1 19,2 0,9Infrastructure & Information Security 290,0 275,8 14,1 30,5 32,6 -2,1Total Service Portfolio 632,1 571,1 61,0 66,5 67,4 -0,9

Investment Portfolio 318,9 276,2 42,7 33,5 32,6 0,9

Total Revenues 950,9 847,3 103,6 100,0 100,0 0,03 – Previous year figures not restated according to BilRUG

Revenues by AMOS branches are as follows:

Branch 2016 2015 4

k € % K € %Germany 864,273 90.9 784,269 92.6Ireland 27,699 2.9 11,053 1.3Switzerland 23,586 2.5 15,280 1.8Great Britain 17,613 1.9 24,481 2.9Singapore 6,694 0.7 4,697 0.6Belgium 3,444 0.4 7,112 0.8Slovakia 3,122 0.3 0 0Australia 2,083 0.2 0 0Hungary 1,949 0.2 0 0Romania 465 0.0 412 0.0Total revenue 950,928 100.0 847,304 100.0

4 – Previous year figures not restated according to BilRUG

Other own work capitalized (Income statement 3.)This item comprises own work capitalized for IT projects amoun-ting to € 26,926 k (2015: € 19,612 k), which are carried as intangible assets and property, plant, and equipment in the balance sheet.

Project k €Data Center Consolidation 6,170Allianz Business System (ABSi) 4,753Allianz Global Network 3,321Allianz Global Assistance IT Carve-out 2,576Global Buisness Intelligence 1,669IT Service Management 1,641Group Reporting Platform 1,343ABS@Allianz Global Assistance Travel 991Solvency II 664

Other operating income (Income statement 4.)The first time application of BilRUG and related changes are exp-lained in further detail in the section Accounting Policies.

As a result of the elimination of the item “extraordinary income” the € 268 k (2015: € 0 k) release of restructuring provision was reclassified to the line item “other operating income”.

VAT refund for the financial year 2016 amounting to € 41,974 k was presented with the underlying expense line items, mainly IT ope-rations. In the previous year, the VAT refund amounting to € 31,861 k was recognized in “other operating income”.

Other operating income mainly results from € 14,586 k (2015: € 17,244 k) foreign exchange gains, € 14,284 k (2015: € 26,015 k) release of provisions and € 5,884 k (2015: € 42,121 k) VAT refund.

Expenses for IT operations (Income statement 5.) The items recognized under expenses for IT operations include expenses for purchased services and for materials and other sup-plies.

Expenses for materials and other supplies amounting to € 1,688 k (2015: € 3,643 k) consist of expenses for disposable items, consu-mables and IT information carriers.

Expenses for purchased services amounting to € 480,381 k (2015: € 454,644 k) primarily include expenses for maintenance and repair services, rent, fees for external consulting services, Allianz Group-internal and external charges, communication charges and external personnel costs.




Service provider expenses amounting to € 261,577 k (2015: € 212,598 k) primarily include expenses for external vendors in con-nection with Allianz Global Network and Data Center Services and new projects.

Personnel expenses (Income statement 6.)The item includes wages and salaries, social security contribu-tions, expenses for pensions and for support for AMOS employees over the financial year. The € 31,712 k increase in personnel expenses, from € 258,629 k to € 290,341 k, is attributable to the expansion of the business and the resulting higher number of employees in 2016, and to a 2.1 percent increase in collective-agreement wages and salaries in October 2016.

Depreciation and amortization (Income statement 7.) Depreciation and amortization are recorded as scheduled depre-ciation applied on the basis of monthly charges as permitted under HGB, based on the useful lives specified in the section Accounting and valuation policies.

In line with § 253 (3) sentence 5 HGB, considering expected perma-nent impairment, € 63,858 k assets were impaired (2015: € 36,260 k). The impairments consist of expected permanent impairments of part of the ABSi asset (€ 61,957 k) and non-usage of the Asia Digi-tal@Life asset (€ 1,901 k). The ABSi impairment mainly results from a decline in planned revenues. The Asia Life@Digital asset has been developed specifically for the needs of the Korea Life business and due to the sale of the insurance company Allianz Korea by Alli-anz SE, it will no longer be used. In case of similarity to the previous year, only the cost of capital would be used for the discount rate within the net present value calculation for the impairment test, the result would be an additional excess of € 19,243 k mainly resul-ting from ABSi.

Other operating expenses (Income statement 8.) Other operating expenses include expenses for the use of cross-departmental functions charged by Allianz Group companies to AMOS, expenses for travel and professional training, expenses for consulting services, expenses for foreign currency valuation, or exchange differences, respectively. The other operating expenses decreased by € 37,707 k from € 101,661 k to € 63,954 k, which is mainly attributable to the one-time effect in the amount of € 22,068 k of decrease of the KVV dis-count rate from 5.25 percent to 2.20 percent, while the adjustment of pension trend (inflation assumption) from 2.00 percent to 1.70 percent had an offsetting effect. The remaining change compared to the previous year results from foreign exchange losses and chan-ges in warranty expenses.

Income from participations (Income statement 9.) Income from participations exclusively comprises the income from profit transfer with Metafinanz-Informationssysteme GmbH totaling € 1,902 k (2015: € 1,669 k).

Other interest and similar income (Income statement 11.)Other interest and similar income of € 1,859 k (2015: € 2,027 k) mainly comprise of interest revenue from affiliated companies ari-sing out of interest on the assumption of losses by Allianz SE for the previous year, and interest accruing from the cash pool.

In addition, this item includes other interest income. This results mainly from interest from pension commitments, interest from discounting of multi-year provisions, interest income from value added tax refunds, and interest income from employee loans.

Interest and similar expenses (Income statement 13.)Interest and similar expenses amounting to € 19,005 k (2015: € 19,308 k) mainly comprise of interest expenses against affiliated companies. These include € 16,634 k (2015: € 16,196 k) interest expenses for loans, € 306 k (2015: € 322 k) interest expenses for reserves for employee anniversary awards. Furthermore, this item contains other interest expense amounting to € 986 k (2015: € 1,007 k), which mainly comprise of € 260 k (2015: € 409 k) interest cost on long-term provisions and € 726 k (2015: € 598 k) interest payment for pension commitments.

Other obligations

Status 31 December, (in €) 2016 2015Income from the fair value of the offset assets 113,518 -59,353Imputed interest on the settlement amount of offset debts 522,629 807,504Effect of the change in the discount rate on the settlement amount 187,739 187,254Net amount of offset income and expenses 823,886 935,405

Pensions and similar obligations

Status 31 December, (in €) 2016 2015Income from the fair value of the offset assets -1,944,221 -2,114,527Imputed interest on the settlement amount of offset debts 2,710,192 2,439,371Effect of the change in the discount rate on the settlement amount -44.485 165,118Net amount of offset income and expenses 721,486 489,962

Offsetting was performed in line with § 246 (2) sentence 2 half-sentence 2 HGB and recognized in interest expenses.


Prior period incomeThe € 23,628 k (2015: € 39,294 k) prior period income mainly results from release of prior year provisions and VAT refund.

Prior period expenseThe € 168 k (2015: € 714 k) prior period expense mainly contain VAT expense.

Taxes on income and earnings (Income statement 18.)In the financial year 2016, taxes on income and earnings include the current year’s actual taxes on earnings of € 2,405 k (2015: € 3,177 k), the previous year’s actual taxes on earnings of € 1,539 k (2015: € 213 k) and an earnings tax reapportionment of € -1,187 k (2015: € -897 k).

Other taxes (Income statement 19.)The other taxes mainly comprise of value added tax expenses.

Other information

Contingent liabilities from company pension commit-ments and other financial obligations

a) Pension commitmentsContingent liabilities exist within the framework of pension plans. The company pension plan for employees of the German subsidi-aries who joined the companies until 31.12.2014 is generally based on membership in the Allianz Versorgungskasse VVaG pension fund (AVK), which is a legally independent pension fund regulated by the German Federal Financial Supervisory Authority (Bundes-anstalt für Finanzdienstleistungsaufsicht, or BaFin). The benefits provided by the Allianz Versorgungskasse VVaG are financed in accordance with the lump-sum contribution system, under which the member companies make payments to the fund through defer-red compensation. In addition to Allianz SE, Allianz Deutschland AG, Allianz Versicherungs-AG and Allianz Lebensversicherungs-AG, the member companies also include AMOS.

AMOS is obliged to cover the administration costs of the Allianz Versorgungskasse VVaG pension fund on a pro rata basis, and may also be obliged to pay subsidies in accordance with legal require-ments. The member companies also make contributions to the Allianz Pensionsverein e.V. (APV), a contribution-based Group pen-sion plan, for employees who joined the company until 31.12.2014.

Due to the sharp drop in the discount rate, the value of the Allianz Pensionsverein e.V. plan assets per 31 December 2016, is lower than the pension commitments. The shortfall per 31 December 2016, is € 2,275 k (2015: € 8,435 k). AMOS is exercising its option as per Art. 28 section 1 sentence 2 EGHGB not to set aside reserves for contin-gent liabilities, because the legally mandated adjustment of pensi-ons to the consumer price index is financed by additional contri-butions to the Allianz Pensionsverein e.V.

Both the Allianz Versorgungskasse VVaG and the Allianz Pensions-verein e.V have been closed to new entrants effective 1 January 2015. For new entrants from 1 January 2015, the company pension arrangements have been uniformly revised. For new entrants from 1 January 2015, AMOS pays a monthly contribution into a direct insurance at Allianz Lebensversicherungs-AG, which is financed by employees as part of the deferred compensation scheme.




In addition, an employer contribution is granted monthly in the form of a direct commitment.Allianz SE has assumed joint liability for part of the pension com-mitments of AMOS. AMOS reimburses the costs; Allianz SE has assumed the fulfillment. For this reason, reserves for pensions are carried on the Allianz SE accounts and not on the accounts of AMOS.

In 2015, the contract determining cost reimbursement was chan-ged so that in the future, Allianz SE bears the interest risk. The com-pany has paid a one-off-amount to compensate for the interest risk.

The company’s joint and several liabilities arising from these pen-sion commitments and the related right of recourse against Allianz SE are:

Status 31 December, (in €) 2016 2015Settlement amount of the offset debts 106,829,983 109,340,229Joint and several liability/right of recourse to Allianz SE 106,829,983 109,340,229

b) Changed financing procedure of the Pension Guarantee Fund in 2006

The conversion of the financing procedure of the pension guaran-tee fund in 2006 gave rise to joint and several liability of € 206 k (2015: € 244 k), which is not reported in the AMOS balance sheet as it is matched by a right of recourse to Allianz SE in the same amount.

c) Other financial obligationsOther financial obligations resulting chiefly from multi-year pro-jects and maintenance and data transmission contracts with third parties total € 2,482,716 (2015: € 2,246,510 k).

This item includes obligations totaling an anticipated € 427,012 k (2015: € 263,262 k) from the overarching Allianz Group project Alli-anz Global Network, and € 1,392,654 k (2015: € 1,797,027 k) from IBM contracts assuming fulfilment of the contracts over the planned duration.

Additional financial obligations result from multi-year rental agreements and amount to € 88,053 k (2015: € 98,986 k) and obliga-tions towards affiliated companies totaling € 7,618 k (2015: € 15,220 k).

Auditor’s feesA disclosure of the auditor’s fees for the financial year is not perfor-med in line with § 285 (17) HGB. The total fees to the auditor are reported in the Group financial statements of Allianz SE.

Members of the Board of Management − Dr. Barbara Karuth-Zelle, Member of the Board of Manage-

ment, Chair of the Board of Management since January 1, 2016 − Stefan Britz, Member of the Board of Management, Chief

Financial Officer − Dr. Daniel Besendorfer, Member of the Board of Management

since April 1, 2016, responsible for Application Platform – Cus-tomer Platforms

− Steve Coles, Member of the Board of Management since April 1, 2016, responsible for Infrastructure and Information Secu-rity

− Dr. Eckart Pech, Member of the Board of Management since April 1, 2016, responsible for Application Platform – Global Platforms

− Philip Varghese, Member of the Board of Management to December 31, 2106, responsible for Global Delivery Network

− Dr. Ralf Schneider, Member of the Board of Management to March 31, 2016, responsible for IT

Members of the Supervisory Board − Dr. Christof Mascher, Member of the Board of Management,

Chief Operating Officer, Allianz SE, Chairman of the Supervi-sory Board

− Sabia Schwarzer, Head of Group Communications and Corpo-rate Responsibility, Allianz SE, Deputy Chairwoman of the Supervisory Board

− Claire-Marie Coste-Lepoutre, Member of the Board of Manage-ment, Chief Financial Officer, Allianz Benelux S. A. (since 5 Feb-ruary 2016)

− Nina Klingspor, Member of the Board of Management, Chief Financial Officer, Allianz Global Corporate & Specialty SE (since 5 February 2016)

− Manfred Büttner, Employee, Chairman of the General Works’ Council, Allianz Managed Operations & Services SE, Employee Representative

− Jürgen Lawrenz, Employee, first Deputy Chairman of the Gen-eral Works’ Council, Allianz Managed Operations & Services SE, Employee Representative

− Patrick Grosjean, Member of the Board of Management, Chief Operating Officer, Allianz France S.A (to 31 January 2016)

− Jesus Marin, Member of the Board of Management, Chief Oper-ating Officer,Allianz S.p. A. Italy (to 31 January 2016)


Remuneration for the Board of Management and the Supervisory Board The total remuneration for the members of the Board of Manage-ment in the reporting period was € 3,926 k (2015: € 3,515 k).

Shared-based remuneration of 6,406 (2015: 5,586) Restricted Stock Units (RSU)¹ granted in the financial year was issued to members of the Board of Management. The fair value of these units at the time they were granted is € 709 k (2015: € 688 k).

1 – The applicable value of an RSU cannot be determined until after the attestation by the auditor. The re-ported units and values are based on a best estimate. As was reported in the Annual Report 2015, the alloca-tion of share-based remuneration in 2016 was regarded as a granted remuneration for 2015. The RSUs were reported in the Annual Report 2015 at best-estimate value. The actual allocations on 4 March 2016, are re-ported in the 2016 Annual Report with the amounts in brackets (=previous year).

Allianz SE created provisions of € 3,998 k (2015: € 4,155 k) for current pensions and accrued pension rights for former members of the Board of Management and their surviving dependents.

The following chart shows the reserves for pensions for former members of the Board of Management/Directors and their survi-ving dependents:

Status 31 December, (in € ) 2016 2015Acquisition cost of the offset assets 127,092 122,777Fair value of the offset assets 127,092 122,777Settlement amount of the offset debts 4,124,952 4,277,513Reserves for pensions 3,997,860 4,154,736

The difference for the reserves for pensions amounts to € 5,6 k.

The based on 7-year average interest rate determined settlement amount of offset liabilities as of 31 December 2016, amounts to € 4,454 k. The difference amounts to € 329,5 k. Under consideration of the clarification of the Federal Ministry of Finance as of 23 December 2016, no profit distribution block as per § 310 AktG (Stock Corporation Act) arise, as AMOS closed a profit transfer agreement with Allianz SE.

The fair value of the offset assets is based on the fair asset value of the reinsurance cover.

Expenses for the Supervisory Board amounted to € 0.4 k in the financial year (2015: € 36 k). The members of the Supervisory Board and the members of the Board of Management are listed on pages 8 and 9 respectively.

Average total number of employees for the year (excluding board members, trainees, interns and employees on parental leave or in military service/alternative civilian service)

2016 2015Full-time employees 3,353 2,791Part-time employees 209 216Total 3,562 3,007

Subsequent eventsOn 5 January 2017, AMOS acquired the majority share of Allianz Cornhill Information Services Private Limited, Kerala, India, from Allianz Holding plc, Guildford, Great Britain. The purchase price was € 57,105. There are no further material subsequent events that occurred after closure of the financial year 2016, which are not reflected in the income statement or balance sheet.




Group membershipAllianz Managed Operations & Services SE (AMOS) is part of Allianz Group, for which the controlling parent company is Allianz SE, Munich. The consolidated financial statements and Group Management Report of Allianz SE in accordance with § 315a HGB are published in March in the Group Annual Report and then sub-mitted to the operator of the German Official Gazette and publis-hed there. The documents may be viewed in the corporate register or be requested from AMOS. They are also available on the Allianz SE website. AMOS is included in the consolidated financial state-ments and Group Management Report of Allianz SE, with dischar-ging effect for AMOS in accordance with § 291 HGB.

A domination and profit transfer agreement has existed between Allianz SE and AMOS since the financial year 2009. The companies belonging to the Allianz Group and their affiliated companies are named in the Annual Report of Allianz SE.

Munich, 21 February 2017Allianz Managed Operations & Services SE

The Board of Management

Dr. Barbara Karuth-Zelle Stefan Britz

Steve Coles Dr. Daniel Besendorfer

Dr. Eckart Pech


We have audited the annual financial statements, comprising the balance sheet, the income statement and the notes to the financial statements, together with the bookkeeping system, and the man-agement report of Allianz Managed Operations & Services SE, Munich, Germany, for the financial year from 1 January to 31 December 2016. The maintenance of the books and records and the preparation of the annual financial statements and manage-ment report in accordance with German commercial law are the responsibility of the Company’s executive board. Our responsibil-ity is to express an opinion on the annual financial statements, together with the bookkeeping system, and the management report based on our audit.

We conducted our audit of the annual financial statements in accordance with Section 317 of the German Commercial Code [HGB] and the generally accepted standards for the audit of finan-cial statements promulgated by the German Institute of Public Auditors [IDW]. Those standards require that we plan and perform the audit such that misstatements materially affecting the presen-tation of the net assets, financial position and results of operations in the annual financial statements in accordance with German principles of proper accounting and in the management report are detected with reasonable assurance. Knowledge of the business

activities and the economic and legal environment of the Compa-ny and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effective-ness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, the annual financial statements and the management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the executive board, as well as evaluating the overall presentation of the annual financial state-ments and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the annual finan-cial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting. The management report is consistent with the annual financial statements, complies with the German statu-tory requirements, and as a whole provides a suitable view of the Company’s position and suitably presents the opportunities and risks of future development.

Munich, 6 March 2017KPMG AG Wirtschaftsprüfungsgesellschaft

Auditor’s Report

DielehnerWirtschaftsprüfer(Independent Auditor)

CurtWirtschaftsprüferin(Independent Auditor)



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