AMOS Allianz Managed Operations & Services SE
Transforming Allianz into a Digital Group
Annual Report 2012
At a glance 2012
2011
Key commercial figures Revenues (€ mn) Investments (€ mn) Active employees as of 31 December
606.9 286.2 2,146*
617.5 238.5 1,744**
Key figures for IT Computing capacity in MIPS Disk space (terabytes) Servers Physical workstations Virtual workstations Regular users of Virtual Client (approx. figure) Pages printed (million) Number of Allianz companies using AMOS SAP systems Users of AMOS SAP systems with broad-ranging functionality Number of installed video systems Users connected to Allianz Global Network
49,801 5,980 7,176 64,485 10,259 8,000 753 98 24,088 261 4,217
46,986 5,649 6,692 67,546 nn 5,800 767 59 22,100 63 nn
1,175 6,904 150
1,100 6,351 59
75.9 31.6 3.3
127.6 32.8 nn
Key figures for Operations OPEX black-belt trained employees (total) OPEX blue-belt trained employees (total) OPEX-supported projects Key figures for Services Purchasing savings for the Allianz Group (€ mn) on IT products and services on non-IT products and services on claims * 2012: Number of employees with a contract of employment with AMOS.
** 2 011: Number does not include Board members, general managers, division heads, employees in the passive phase of partial retirement, employees in early retirement, trainees, interns, employees doing military service, employees on parental leave and employees on assignment from other Allianz companies.
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AMOS Annual Report 2012
Table of Contents 04 Report of the Supervisory Board 06 Supervisory Board 07 Board of Management
Management Report
09 AMOS Strategy Service Portfolio Worldwide Presence Our Customers Quality and Methods Our Employees Protection of Natural Resources 13 Focus of 2012 Business Applications Infrastructure 19 Business Performance Structural Changes Financial Development Investments 23 Outlook Business Applications Infrastructure Financial Development 26 Risk Report 27 Intercompany Agreements 27 Report on Events Subsequent to the Balance Sheet Date
Annual Financial Statements
30 32 33 47
Balance Sheet Income Statement Notes to the Financial Statements Auditor’s Report
This is a translation of the German Annual Report of Allianz Managed Operations & Services SE. In case of any divergences, the German original is legally binding.
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Report of the Supervisory Board
Dr. Christof Mascher Chairman of the Supervisory Board
The Supervisory Board fulfilled its duties and obligations as provided for under the Statutes and applicable law. We monitored the management of the company and advised the Board of Management regarding the conduct of business. In line with our monitoring and advisory activities, the Board of Management informed us on a regular basis in a timely and comprehensive manner, both verbally and in writing, on the course of business. In the financial year 2012 the Supervisory Board held two meetings, one in April and another in December. In these meetings, the Board of Management informed us about the development of the business and the economic situation of the company. We were directly involved in all major decisions. In addition, the Supervisory Board adopted two resolutions by circular procedure in August and October 2012. Allianz Managed Operations & Services SE (AMOS) has grown rapidly in size, international presence and complexity to an extent which requires further strengthening of the leadership team. The Supervisory Board has therefore appointed three new board functions. The business year 2012 was characterized by the successful further development of AMOS into a truly customer-focused shared service organization serving Allianz Group with the mission to transform Allianz into a Digital Group. Milestones in 2012 were the advancement of the International Delivery Model with the opening of new delivery centers and the servicing of new international customers (such as Allianz France and USA). Seamless international collaboration and a shared culture of service are key to the success of the International Delivery Model: AMOS is leveraging international specialized teams in international delivery centers as well as national delivery centers covering for local specificities. As a third layer of the AMOS international delivery model, proximity centers keep AMOS close to customers
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and ensure “high touch” services. Furthermore AMOS works with global external partners to deliver global programs swiftly, with the right level of performance, leveraging international transformation experience and providing best-in-class services. As AMOS has continued to diversify its service portfolio, the company is now also partnering with the consulting company Roland Berger for internal consulting. A dedicated team of experts in insurance processes will capitalize best knowledge and experience, at optimized costs, to drive improvement and transformation initiatives. AMOS has also advanced in providing process platforms, exploiting economies of scale, scope and skills for HR and Finance processes. AMOS continues to reinforce its service culture: clientcentric, proactive and fast, outcome-focused, ensuring continuous improvement. Our discussions focused on the development of the company as the Allianz shared-service unit as described above and we thoroughly deliberated the implications of the major decisions taken. At all of our meetings, the Board of Management informed us in detail about ongoing activities and we discussed the impact of the implemented and the planned measures on the development of business, the risk situation and the economic situation of the company. Changes on the Supervisory Board Dr. Röhler resigned from the Supervisory Board effective February 29, 2012. Mr. Marin was appointed as his successor with effect from March 1, 2012. The Supervisory Board thanks Dr. Röhler for his competent advice and commitment to the company.
AMOS Annual Report 2012
Changes on the Board of Management The Supervisory Board appointed Ms. Ouziel as Chairwoman of the Board of Management effective February 6, 2012. Ms. Ouziel’s appointment reflects the growing importance of AMOS as the shared-service provider of the Allianz Group. To complete the AMOS Board there were two additional nominations effective May 1: Mr. Britz joined the Board of Management as the Chief Financial Officer of AMOS. Dr. Karuth-Zelle was confirmed by the Supervisory Board as the responsible Board member for the unit Business Transformation of AMOS. The appointments demonstrate the increasing importance of these areas. The new Management Board Function Business Transformation controls and bundles the international project portfolio for implementation of the strategic Allianz target platforms for Core Insurance, web-based access (oneWeb) and Finance (GRP). The new Management Board Function CFO reflects further professionalization of accounting, cost management, project, product and service controlling as well as the funding management that will be so vital in view of the rapid internationalization of AMOS’ business activities. With Dr. Karuth-Zelle and Mr. Britz we were able to strengthen the AMOS leadership team with two colleagues who both have been with the Allianz Group for several years and bring a diverse range of skills and relevant experience to the Board. Mr. Werner resigned his mandate as Board Member of AMOS responsible for Corporate Services effective September 30, 2012 to pursue new professional challenges outside of Allianz. Mr. Werner’s responsibilities in terms of heading up the Corporate Services division (comprising HR Services, Financial Business Services, Global Sourcing and Procurement, and Corporate Real Estate Services) were assumed by Ms. Ouziel as of October 1, 2012. Mr. Werner’s duties as the AMOS Board Member
responsible for labor relations and social affairs as well as the responsibility for HR were transferred, at the same time, to Mr. Britz. Mr. Werner was involved in the establishment of AMOS from the outset and played a key role in forging ahead with this process in the early years. The Supervisory Board thanks Mr. Werner for his support and commitment in building up AMOS. Annual Financial Statements 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 2012 financial year. The annual financial statements and management report, together with the audit report prepared by KPMG, were made available to all members of the Supervisory Board and were discussed in detail during the Supervisory Board meeting on April 17, 2013, in the presence of the independent auditors. Our examination of these documents presented by the Board of Management and the independent auditors has raised no objections and we concur with the findings of the independent audit carried out by KPMG. The Supervisory Board has 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. Munich, April 17, 2013 On behalf of the Supervisory Board:
Dr. Christof Mascher Chairman
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Supervisory Board Members of the Supervisory Board
Members who left the Supervisory Board during the year
Dr. Christof Mascher Member of the Board of Management Allianz SE Chairman
Dr. Klaus-Peter Röhler Direttore Generale Allianz S.p.A. Italy (until February 29, 2012)
Manfred Büttner Employee Allianz Managed Operations & Services SE Employee Representative Patrick Grosjean Chief Operating Officer Allianz France Jürgen Lawrenz Employee Allianz Managed Operations & Services SE Employee Representative Dr. Alexander Vollert Member of the Board of Management Allianz Deutschland AG Deputy Chairman Jesus Marin Chief Operating Officer Allianz S.p.A. Italy (since March 1, 2012)
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AMOS Annual Report 2012
Board of Management
Sylvie Ouziel Chairwoman of the Board of Management (since February 6, 2012)
Stefan Britz Member of the Board of Management Responsible for labor relations and social affairs (since May 1, 2012)
Dr. Barbara Karuth-Zelle Dr. Rüdiger Schäfer Member of the Board Member of the Board of Management of Management (since May 1, 2012)
Members who left the Board of Management during the year Holger Werner Member of the Board of Management Responsible for labor relations and social affairs (until September 30, 2012)
Dr. Ralf Schneider Member of the Board of Management
The motivation and all-out commitment of the people who work for AMOS are crucial to the success of the company and its development going forward. We, the Board of Management of AMOS, would like to thank the employees for all their hard work and personal commitment throughout 2012. We would also like to thank the representatives of the works’ councils for their willingness to engage in dialog and for the good cooperation in a spirit of mutual respect.
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Management Report
AMOS Annual Report 2012
Management Report AMOS supports Allianz in its transformation to a digital Group. We create synergies in IT and non-IT, and deploy global transformation projects. 1. AMOS Strategy Allianz Managed Operations and Services SE (AMOS) was established in May 2010 as the internal shared-service provider of Allianz Group. AMOS offers a selection of IT, Operations and Business Services and deploys harmonization and transformation projects. As the delivery entity for Allianz operations strategy, AMOS is an enabler for Allianz Group’s digital transformation and drives Group synergies. Security remains at the heart of investments and initiatives in the digital space. 1.1 Service Portfolio Infrastructure The installation of a global connected infrastructure is what underpins the digital program of the Group: Allianz Global Network provides the modern, cost effective telecommunication solutions which serve as the basis for a robust cloud-based strategy. The program for consolidating data centers will reduce Group infrastructure costs while improving service and keeping IT resilient to disasters. Allianz Virtual Client provides a flexible, costefficient and data-secured personal computing solution for Allianz employees.
Applications The application architecture is structured into three layers: 1. Mobile and Internet solutions (oneWeb) enable the use of digital channels. 2. Best-in-class integrated core insurance applications (ABS, OPUS, ePac) help streamline the product portfolio and support multi channel product distribution across insurance lines. Corporate functions platforms (GRP, OneHR, Solvency II) make for efficient management of an integrated international Group and deliver compliance with regulations. 3. High quality analytics (Global BI & Analytics) help transform data into insight and actions. AMOS ensures that these strategic application platforms are rolled out at Allianz in a coordinated and harmonized way as the Group progresses along its strategic trajectory. The objective is to create economies of scope and scale for Allianz entities and for the Group as a whole. Business Services AMOS achieves further Group synergies and cost savings through improved transaction processes and expertise in Finance and HR, and helps optimize external spend through Procurement and Real Estate Services.
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1.2 Worldwide Presence Moving forward, AMOS has internationalized its delivery model to be where the clients are. AMOS has three types of location: › Proximity service centers are about ensuring the clientfacing interface, on site, when “high touch” services are needed. › National Delivery Centers are delivery “factories” located in the countries concerned – for reasons of language and national specificities, to make use of existing national skills, or when the size of the local entity justifies a dedicated Delivery Center. Despite their national focus, National Delivery Centers are part of the AMOS International Delivery Model and share the same management, methods and approaches – providing the same economies of scope and skills. › International Delivery Centers are regional or global factories which serve various countries; these centers are where the synergies really materialize in terms of scale, scope and skill. In February 2012 a new AMOS branch in India was established and commenced operations on August 1, 2012. The expansion is part of Allianz’ strategy to build a fully fledged internal provider of shared services for Allianz companies across the globe. AMOS India will offer a portfolio of IT services for application development, maintenance and infrastructure as well as business process services. As of December 31, 2012 AMOS was represented by branches and subsidiaries in Austria, Belgium, India, Ireland, the Netherlands, Singapore, Switzerland and UK in addition to Germany.
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1.3 Our Customers AMOS addresses all the companies and entities in the Allianz Group – including holding-company functions – as its customers. A strong customer focus is at the heart of the overall AMOS strategy. In 2012 AMOS served 241 Allianz entities all over the globe. Region
Numbers
Percentage
110
45,6 %
Germany
52
21,6 %
Asia/Pacific
40
16,6 %
Americas
28
11,6 %
EEMEA (Eastern Europe, Middle East, Africa)
11
4,6 %
241
100 %
Western Europe without Germany
Total AMOS client companies by region
Two new roles were defined in 2012 to reinforce service delivery relationships with customers. Account Managers are responsible for multiple services delivered to one Allianz company. They are in charge of account planning, sales and customer satisfaction and broker the contacts with Service Owners. Service Owners, meanwhile, are responsible for one service delivered to multiple Allianz entities. As such, they are accountable for revenue, cost, profitability and the cash profile of their services. They are also in charge of service level and quality fulfillment, and take care of continuous improvement and innovation of their service.
AMOS Annual Report 2012
AMOS Learning Days – a platform for open exchange on strategic matters 1.4 Quality and Methods AMOS is a learning organization with a service-centered culture. Customer feedback is a vital tool for monitoring customer satisfaction and ensuring we continue to enhance products, services and processes. To further improve service delivery and customer satisfaction, AMOS established a new department, Quality und Methods, in 2012. Its role is to ensure key activities, vendor contracts and projects undergo a quality review and to capture intelligence and the “voice of the customer” from service level reporting, interviews and surveys. In 2012 the department conducted surveys covering strategic topics such as innovation, quality and value for money, as well as operational topics like budget, collaboration, project reporting and implemented services. 1.5 Our Employees AMOS was created from several Allianz teams, with people from many different backgrounds and cultures. This diversity is why it is all the more important to build on a solid foundation: a shared aspiration and mission centering around customers. Central values AMOS holds high are excellence, passion, innovation, collaboration and integrity. A shared understanding of strategy and targets is a key success factor. The AMOS Learning Days 2012 were one initiative staged last year to reinforce this understanding. A platform for open, two-way feedback between the Management Board and staff, the Learning Days offered employees the opportunity to engage in debate with the Management Board on issues of strategy, operations and corporate culture, and also gave management the chance to obtain valuable feedback from employee teams.
As at December 31, 2012, AMOS had 1,937 employees at the three German locations in Munich, Frankfurt am Main and Stuttgart. The branches had 209 employees working for AMOS.
Region Germany Netherlands UK Ireland Switzerland Singapore Belgium India
Location in Germany Munich
Number of employees 1,937 27 125 26 4 8 18 1
Number of employees 1,611
Stuttgart
250
Frankfurt
76
AMOS employees 2012
26 trainees were in apprenticeships at the Munich campus, working toward qualifications as IT specialists, machine & plant operators and digital printers. In cooperation with the Ingolstadt University of Applied Sciences, AMOS continues to offer two part-time degree programs for employees – an MBA in IT Management and a BA in computer science and business – as well as a cooperative degree program (combined work and study periods).
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Personnel and Skill Management As AMOS grows in its role as global shared-service provider to the Allianz Group, sustainable HR supply and demand management is a vital element in supporting the company’s development. In 2012, AMOS rolled out a program to set the framework for professional, standardized competency management. The program has also helped to establish the retained organization for the Allianz Global Network, and has reduced the number of external resources deployed in the IT Infrastructure unit. As a result, some 90 vacant positions were filled by deploying existing staff rather than through external recruitment.
1.6 Protection of Natural Resources Environment and climate protection is actively practiced in internal AMOS processes and its core business. In 2012, AMOS again continued to drive down CO2 emissions. This is chiefly attributable to a range of interventions in and around the data center and printshop, both of which have been exclusively hydropowered since 2010. There was another reduction in energy consumption in 2012, achieved by consolidating and virtualizing more servers and by using less and lighter paper in the printshop. AMOS has also continued to dispatch the customer correspondence of Allianz Germany with a neutral carbon footprint. AMOS Global Sourcing & Procurement plays a key role in promoting environmental standards with current and potential suppliers. In practice, this means ensuring that all Allianz suppliers abide by the company’s environmental, social and governance standards, as outlined in the Allianz Code of Conduct and Purchasing Principles.
Digital processes make day-to-day working life easier
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Open workplace concept to promote communication and collaboration
2. Focus of 2012 AMOS has a broad service portfolio and strives continuously to enhance its value for Allianz companies and the Allianz Group. AMOS provides shared services along business, application and infrastructure dimensions. Business
›
Operations and Business Services
Applications
›
Business Transformation Global Business Platforms Central Function Platforms
Infrastructure
›
Global Infrastructure Platforms
AMOS has become the key enabler for the digitalization of Allianz Group infrastructure and applications. In 2012 AMOS realized synergies in IT, Operations and Business Services, empowering Allianz to leverage its market leadership and achieve economies of both scope and scale. AMOS also streamlined its service portfolio in 2012 by clustering services into approximately 100 service families. This reshape is a basis for further adapting the service portfolio to future customer demand. This section presents the key developments in the AMOS service portfolio in 2012. 2.1 Business Corporate Real Estate Services AMOS worked with Allianz companies in 2012 to identify and realize savings in Corporate Real Estate. An integrated workplace management system was customized and case studies conducted with Allianz companies as a basis for the rollout, starting amongst others with Allianz France in 2013. AMOS introduced a new workplace concept – with an emphasis on open, shared spaces to promote collaboration and communication – in its own offices in Neuperlach, Munich. Discussion is already underway about rolling the concept out in other Allianz entities.
Key design principles for all phases of the corporate real estate value chain were developed in cooperation with the largest Allianz entities and global lines. These principles serve to frame and guide all Allianz relocation projects, providing steers for selecting locations, designing workplaces, and for facility and process management. AMOS is also developing a group-wide baseline of travel data to unlock savings opportunities and make supplier management more efficient. For example, AMOS conducted a hotel tender that gives participating Allianz entities access to a worldwide hotel directory with prenegotiated special rates, leveraging the global scale of the Group. Likewise, a new online booking tool was developed and launched, giving employees access to external conferencing facilities at Allianz rates. AMOS also rolled out an international Travel and Procurement initiative: this will converge the numerous travel agencies which the Group now uses to just a few preferred agencies in the future. Management Support Services AMOS Management Support Services continued to assist Allianz companies in 2012 with routine tasks such as presentation design. Graphic design and eLearning support were added to the portfolio in 2012, whereas administration services such as travel arrangements or organizing meetings were dropped because of the heavy reliance on local travel and meeting platforms. In future AMOS will focus primarily on presentation support, graphic design and eLearning support as these have a broader footprint and usage. Financial Business Services Financial Business Services (FBS) is working with interested Allianz entities to develop centralized shared services of highest quality by standardizing non-core processes and by leveraging economies of scope, skill and scale. With shared services to call on for their non-core tasks, Allianz entities can delegate the identified processes to
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Professional in-house consulting provided by Allianz Group OPEX the Financial Business Services unit and focus on their core business. Working through a steering committee comprising the CFOs of selected pilot entities and delegates from Group Functions, the unit has categorized finance processes as “transactional”, “expertise” or “retained”. Financial Business Services now plans to work with a business process outsourcing provider for processes categorized as “transactional”, to pool “expertise” processes into a captive shared service center, or – in the case of services in the “retained” category –to leave the processes as they are. HR Shared Services AMOS HR Shared Services offers administrative services to Allianz entities to support them in the challenge of recruiting, developing and retaining talented staff in a competitive employment market. The unit ran several pilot programs for Recruitment and Training Administration services in 2012, including: › Recruiting services for Allianz SE › Training administration to support the eLearning component of Allianz Compliance and Information Security Training › Establishment of the Allianz Language School, offering blended-learning language programs to Allianz Germany, Allianz SE and AMOS with cost savings of approx. 30 %. Customers have lower local administrative outlay and lower costs thanks to the savings passed on. All pilot customers plan to turn the pilots into operational business in 2013. Business process outsourcing in selected fields is also part of HR Shared Services. Working with Global Procurement and IT, the unit completed contract negotiations with its preferred service provider for Workforce Administration & Payroll Services in 2012. In 2013, HR Services will engage with potential customers to initiate the contract’s deployment.
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Consulting & Training The internal Allianz Group consulting unit, Allianz Group OPEX, further expanded its consulting activities in 2012. The unit supported Allianz companies and Group functions in a variety of projects and forged ahead with the establishment of operational consulting and the provision of support in transformation projects. The consulting teams were involved in 150 projects across the whole Allianz Group. The revenues of Allianz Group OPEX increased by 44 %. AGO consulting activities scored well on the net promoter score (NPS), beating their overall target of 70 %. In 2012, Allianz Group OPEX established local teams in CEEMA, America and Asia. With its local presence, Group OPEX is better equipped to identify and address the needs and realities on the ground, and can do so more quickly. Allianz Group OPEX also set up the OREX training program in 2012. OREX stands for Organizational Excellence and provides a systematic, data-driven approach and toolkit for improving end-to-end value chains within a company or department. The program teaches participants how to put organizational insights into practice, take opportunities and minimize the associated risk exposure. eLearning is fast gaining in popularity, and in 2012 AMOS began offering eLearning development support to Group entities. Allianz Group OPEX provides its expertise in developing and producing in-house eLearning programs. Experts oversee and coordinate the entire eLearning production process, from defining content to doing the technical development and integrating eLearning into the customer’s own platform, all in line with Allianz’s Corporate Design and Sound guidelines. In 2012, Allianz Group OPEX continued to train and certify employees in the OPEX methodology. Social OPEX
AMOS Annual Report 2012
also continued in 2012. Working in 16 Social OPEX projects, Allianz employees engaged with a range of social initiatives, contributing their business knowledge and OPEX skills to progress these initiatives on the ground.
negotiated sourcing of parts, glass and paint for the automotive insurance business in six major countries, the primary objective being to reduce claims costs and avoid further price increases in the parts business.
Global Sourcing & Procurement AMOS Global Sourcing & Procurement has the mission to mobilize the procurement network of Allianz and to utilize all possible saving potentials and procurement benefits. It does this by increasing overall transparency, pooling Allianz spending and leveraging the bargaining power of the Group. In 2012 AMOS Global Sourcing & Procurement generated procurement savings in excess of € 110 million for Allianz Group.
2.2 Applications Through Global Business Platforms, AMOS implements the core insurance platforms and the oneWeb Internet platform as shared software services for the core business operations. AMOS is responsible for technical development, implementation and operation of the platforms.
In a global program for IT and Non-IT sourcing, AMOS devised global and regional procurement initiatives with local Allianz entities and other key stakeholders. Another important initiative was to extend the multi-sourcing approach, previously used for application development and maintenance, to infrastructure services. Three providers have been selected to deliver IT infrastructure services to Allianz worldwide. The IT shopping cart is now fully integrated into the multi-sourcing approach and the foundations are in place to move ahead with other key initiatives such as data center consolidation. AMOS Global Sourcing & Procurement also further developed and rolled out the Contract Management System and the Spend Management System to more Allianz Group companies. The Spend Management System provides multi-dimensional views of both local and global external expenditures and helps to identify savings opportunities and prepare negotiations. A new unit, Claims Procurement, was established in strategic procurement. It works in close alignment with claims management departments in the Allianz entities and has a direct impact on the loss ratio of the entities. In one Claims Procurement project, “Spare Parts”, teams
Core Insurance System ABS The core insurance system Allianz Business System (ABS) facilitates cross-disciplinary management of insurance processes on a shared platform. AMOS delivers the ABS core application to Allianz Germany, Allianz Global Assistance, Allianz France, Allianz Switzerland and Allianz Austria. Development and maintenance of the core application are done in Vienna, working out of the AMOS ABS Competence Center. AMOS also provides ABS customizing services for Allianz entities through local teams. In 2012 AMOS transferred the ABS clients of Allianz Germany to the private Allianz cloud. Using the virtual clients, claims managers can now work more quickly and productively, and to higher standards of security. ABS Global Lines Software is based on the ABS core and is deployed at Allianz entities with an international reach, such as Allianz Global Assistance. Allianz Global Assistance deploys ABS for travel insurance and assistance business. In 2012, following the success of the first rollouts, Allianz Global Assistance and AMOS further enhanced the ABS B2B2C capability for travel insurance and rolled out the solution across Allianz Global Assistance worldwide, also harmonizing products and business processes. In 2013 Allianz Global Assistance will implement “ABS in a box”, with full travel insurance business functio-
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Optimized web presentation on any end device with oneWeb nality. The solution – which operates without major country-specific adjustments – will initially be rolled out in Belgium, France, Austria and Germany. In 2012 global ABS was also introduced for Allianz direct insurance business and the automotive business, where it helps by driving down cost and increasing process and product flexibility through sharing of platforms and processes. ABS for Allianz Direct Insurance and Automotive Business In the automotive business, ABS connects car manufacturers and dealers with Allianz insurance entities. This creates the opportunity for point-ofsale insurance offerings and contracting. Products implemented include car insurance, leasing insurance, credit insurance, claims management and all the other essential backend processes. In the direct business, ABS offers a state-of-the-art direct platform to fulfill clients´ needs and to enable cost-efficient operation. 2012 also saw the launch of the IT harmonization project at Allianz France. The transformation project impacts on the entire IT landscape in the French entities. It will deliver a unified, state-of-the art platform that increases productivity by automating and digitalizing business processes. Overview of the biggest Allianz entities using ABS, with the number of contracts and claims they manage (total): Allianz entity
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Contracts
Claims
Allianz Austria
4,000,000
800,000
Allianz Switzerland
2,000,000
400,000
Allianz Germany (incl. ESA)
4,655,530
2,605,550
oneWeb Designed to serve as a baseline for the different Allianz websites, the new internet platform oneWeb was successfully launched on seven web portals in 2012. Allianz oneWeb is a cost-efficient web interaction solution that enables customers, agents and employees to communicate, access customer data and enter claims digitally. OneWeb went live at Allianz Switzerland in May 2012, making the Swiss entity the first in the Allianz Group to roll out the new platform for its customer portal. The Allianz corporate website allianz.com followed in autumn 2012. The website won the Lundquist award for Corporate Social Responsibility communication and best employer branding in 2012; it ranked number 1 in Germany and was in the top 10 European companies. The online award judges whether the company’s Corporate Social Responsibility communication meets the needs of key users. Allianz was specifically recognized for the responsive design, providing an optimized experience on different devices and allowing for an innovative navigation structure. Global Business Intelligence The Global Business Intelligence (BI) Platform was launched in September 2011 as part of the Allianz Group´s Digitalization Program, the aim being to provide a consolidated platform to meet the information and reporting needs of Allianz entities worldwide. Products offered by the Global BI Platform are packaged into a modular suite of complementary components, designed to meet the entire gamut of requirements in a specific business area. Work in 2012 focused on developing the first components, and the initial successful rollouts are complete. Base components › Platform as a Service: with a powerful BI platform maintained centrally as a service, Allianz entities can avoid the painful process of integrating new SAS products into complex IT environments. › The Data Warehouse takes care of data loads, historization and overall maintenance.
AMOS Annual Report 2012
Business Reporting components › For Business Reporting, standard dimensions and measures (for Life & Non-Life), report layouts and chart types have been developed. A prototype has been rolled out for the Allianz Asia Pacific region. Implementation for Allianz Belgium is in progress. › Improve Customer Base: AMOS has developed a customer value calculator that uses complex predictive models to rate the potential value of customers. › The Fraud Detection component, which currently covers Property & Casualty for the automotive business, supports detection of potentially fraudulent claims by applying business rules, anomaly detection and link analysis. Fraud Detection and Combat Allianz takes its responsibilities in identifying and combating claims fraud seriously, and while the majority of claims are genuine, we are committed to ensuring our honest customers are not paying for the dishonest actions of the minority. The fraud detection tool running on the Global Business Intelligence Platform uses complex self-learning models and network analysis to identify and investigate potentially fraudulent cases, allowing genuine claims to pass more quickly through the handling process. Central Function Platforms deliver Finance and HR applications deployment and maintenance. Global Reporting Program The SAP-based Global Reporting System makes it possible to compare and analyze accounts from right across the Group, and also simplifies compliance with the legalities of financial reporting. The rollout of a shared SAP-based platform drives down complexity while also reducing operating costs. In 2012, new customers were integrated into the Global Reporting Program: the shared
Finance platform was used in pilot projects with Allianz France and Allianz Global Assistance as well as Allianz Worldwide Care and Allianz Turkey. Implementation projects were carried out in 2012 for the two key entities of Allianz France, for 13 units of Allianz Global Assistance and for Allianz Austria. These customers began using the central accounting platform for the financial year 2013. Cash and Treasury System In 2012 the Allianz Cash and Treasury System was successfully implemented in Allianz France. The system is one of the global Allianz solutions and has standardized interfaces for external bank communication, SAP and the core insurance system ABS. HR Management Suite The Global HR Management Suite for Talent/Performance/Compensation Management is now deployed in over 100 entities of the Allianz Group, with the entire top management of the Group and over 25,000 employees using components from the suite. Further rollouts are planned for 2013. 2.3 Infrastructure Data Center Consolidation Allianz currently operates data centers at around 140 locations worldwide, with more than 17,000 servers. In October 2012, the Group IT Committee decided to consolidate Allianz data centers worldwide starting 2013. The program aims to transform the current IT infrastructure landscape by harmonizing IT operations, technology and data centers, and to leverage synergies for Allianz by establishing global IT operating capability. The data center strategy was validated in 2012 with selected Allianz operating entities and external service providers, and in December 2012 a project was initiated to select the future service providers for Allianz IT operations.
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Easier data exchange, communication and collaboration thanks to a global group network
Allianz Global Network In 2012, AMOS started the rollout of the Allianz Global Network (AGN). The AGN consolidates the data and voice networks across Allianz into a worldwide Group network, also standardizing, updating and optimizing data exchange, communications and collaboration services. Employees experience the benefits of AGN in multiple ways. The first tangibles are the move to IP-enabled phones and a common collaboration solution. In the first step, taken in 2012, Allianz sites with over 4,000 employees in Germany were connected; by 2014, the Allianz Global Network will have interconnected the entire Allianz Group. AGN also paves the way for continued progress on Allianz strategic IT initiatives such as data center consolidation and digitalization. It also ensures that critical applications are always readily available – with cost-efficient and accelerated application rollouts.
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Allianz Virtual Client The Allianz Virtual Client turns the PC into an access gateway, with a user’s Windows 7 desktop being hosted from the AMOS data center. Being device-independent, the desktop can be accessed from anywhere in the world, on virtually any computer or tablet with an Internet connection. The solution was launched in 2012 with Allianz Germany ABS users, and continued with the clients of Allianz SE, Allianz Ireland, Allianz Worldwide Care, Allianz Reinsurance and Allianz Real Estate. By the end of 2012 over 15,000 Allianz employees around the world had access to the Allianz Virtual Client, 8, 000 of them working regularly with it. AMOS also developed Secure Mobile Email in 2012, providing employees with secure and mobile access to personal data. While the Virtual Client gives people access to their personal desktops complete with all their applications, Secure Mobile Email is optimized for mobile access to Outlook content via a touch screen. Mails, calendar entries, contacts – users have all their personal items available via an app.
AMOS Annual Report 2012
3. Business Performance In 2012, AMOS continued to make progress on its trajectory to becoming the global shared-service company of the Allianz Group. 3.1 Structural Changes In the first half year of 2012, AMOS implemented new organizational structures to strengthen its ability to deliver shared services to the Allianz Group. A new CEO position was implemented, with Sylvie Ouziel heading AMOS as Chairwoman. The position of CFO was also established, with Stefan Britz the new AMOS Board member heading Finance, Controlling, and later also HR. This was followed by the establishment of the Business Transformation unit, headed by new AMOS Board member Barbara KaruthZelle. This unit acts as an interface for Allianz Group companies in implementing strategic target application projects. On June 12, 2012, AMOS opened AMOS Netherlands B.V., a 100 % subsidiary, headed by Rudy Duyck and Eric van Batenburg. The subsidiary took over the AMOS Netherlands Branch business on August 1, 2012. All contracts of employment, assets, contracts etc. were transferred unchanged. A new branch of AMOS in Trivandrum, India, went into operation on August 1, 2012, and steps were initiated to establish a second branch office in Pune. The AMOS India offices in Trivandrum and Pune will focus on IT services in Application Development & Maintenance and Infrastructure, and other expertise services like Personal Administration, Presentation Support and Financial Business Services, to be provided in shared-service mode to many Allianz entities and dealing with harmonized core platforms and solutions for Allianz Group.
3.2 Financial Development The total assets of AMOS rose in 2012 by 90.6 % to € 899.0 million (2011: € 471.6 million). The € 427.4 million increase on the assets side is on the one hand attributable to an increased entitlement under the terms of the profit transfer agreement with Allianz SE and on the other hand to the capitalization of IT projects in noncurrent assets. In the 2012 financial year, self-created intangible non-current assets were made and capitalized in the amount of € 124.1 million. This chiefly comprised a European IT platform for contract management and claims processing. The acquired intangible non-current assets comprise both completed and not yet completed intangible assets. Overall, € 220.6 million development cost for IT projects and self-created intangible assets were capitalized. Research costs in the financial year were € 2 million. No research costs were attributable in the financial year 2012 to the self-created intangible assets. These investments are mainly driven by Group and client company projects. Increases were offset by disposals and depreciation. Property, plant, and equipment include another major project, Allianz Global Network, with € 66.3 million being an asset under construction. Additional investments in non-current assets focused on network components and telecommunications and computer purchases. AMOS recorded an increase in current assets of € 252.1 million. One the one hand, receivables from Allianz SE rose due to increased entitlements under the terms of the profit transfer agreement with Allianz SE. Additionally, receivables from the cash pool with Allianz SE increased. Balances with banks grew by € 2.1 million. Prepaid expenses decreased by € 3.3 million. Under equity and liabilities, shareholders’ equity remained unchanged at € 189.6 million. Due to the significantly increased borrowed capital, the equity ratio on the balance sheet date of December 31, 2012 was lower, at 21.1 % (2011: 40.2 %).
19
management report
Provisions increased year-on-year by € 109.6 million to € 199.4 million (2011: € 89.8 million), primarily owing to other provisions. The increase of other provisions follows on the one hand from the allocation of € 77.0 million to provisions for outstanding trade payables and on the other hand from the allocation of € 40.0 million for the restructuring project “Transformation Plan”. AMOS recorded an increase in liabilities of € 317.8 million. Liabilities to affiliated companies rose by € 331.9 million, mainly due to borrowings of € 329.7 million from Allianz Group companies (Allianz SE, Allianz France S.A., Allianz Suisse Versicherungs-Gesellschaft, and AGA International S.A. Paris). The term of each of the loans is five years, with interest rates between 2.2 % and 2.9 %. An opposite impact results from the decrease of trade accounts payables by € 18.7 million. Other liabilities, mainly from value added tax, increased by € 4.6 million. In the 2012 financial year, AMOS generated total revenues of € 606.9 million (2011: € 617.5 million) from shared services, a year-on-year decrease of € 10.6 million or 1.7 %. This includes a further decrease of € 86.6 million resulting from the transition of the former Dresdner Bank business to Commerzbank AG in 2011. This could largely be offset by revenue growth with other clients and other areas of business.
The breakdown of revenues (in € million) by AMOS product groups is as follows: Revenues (€ million)
2012
2011
Application & Data Services
201.5
252.8
-20.3%
82.0
94.0
-12.8%
Print & Output Services
Change
Workplace
68.8
76.8
-10.4%
Telecommunication
29.6
33.5
-11.6%
Projects & Consulting / Individual Services
81.2
77.1
+5.3%
Network
21.3
13.9
+53.2%
Cross Functional Services (Standard & Others)
66.5
42.6
+56.1%
Others
56.0
26.8
+109.0%
606.9
617.5
-1.7 %
Total
The “Others” group contains license business (which is the main driver of the revenue increase), services from the former Holding area, and overarching services of branches, plus the procurement services for Allianz Germany acquired in 2011. The percentage breakdown of revenues is as follows: 2012
2011
Application & Data Services
Revenues in %
33.2
40.9
-7.7
Print & Output Services
13.5
15.2
-1.7
Workplace
11.3
12.4
-1.1
4.9
5.4
-0.5
13.4
12.5
+0.9
3.5
2.2
+1.3
Telecommunication Projects & Consulting / Individual Services Network Cross Functional Services (Standard & Others) Others Tota
Change
11.0
6.9
+4.1
9.2
4.5
+4.7
100.0
100.0
0.0
Total income in 2012 was € 653.8 million (2011: € 658.5 million). This comprises sales revenues of € 606.9 million (2011: € 617.5 million), other own work capitalized totaling € 12.7 million (2011: € 7.1 million) and other operating income of € 34.2 million (2011: € 33.8 million).
20
AMOS Annual Report 2012
This represents a slight decrease of € 4.7 million compared to 2011. Expenses from ordinary activities of €871.4 million (2011: € 717.9 million) were incurred in generating this income in the current period. This represents an increase of 21.4 % or € 153.5 million over 2011, the main reasons being the business growth, the investments in developing AMOS, and one-off expenses related to a provider change in the workplace services area. In this context, the cost of IT operations increased by € 90.1 million to € 523.1 million (2011: € 433.0 million). Personnel expenses increased by € 17.5 million to € 203.5 million (2011: € 186.0 million) owing to the expansion of the business. Depreciations increased by € 46.8 million owing to investments for purchased and self-created intangible assets. Additionally, write-downs were made for various licenses and for various items of operating/ business equipment. Other operating expenses went down by € 1.1 million, primarily due to lower expenses for services from Allianz Group and from external providers.
well as of inefficiencies that the “Transformation Plan” is designed to remedy. Extraordinary income arose mainly from the completion of older restructuring measures. AMOS pushed ahead with the ongoing cost reduction and process improvement programs. At the end of the financial year the program “Transformation Plan” targeting a reduction of approx. 450 full time positions in the IT Infrastructure, Procurement, and Financial Business Services area was set up to operationalize the planned transition of AMOS to a global shared services provider at benchmark level. Extraordinary expenses are mostly related to this new restructuring measure. Before settlements from the domination and profit transfer agreement, the annual net loss is € 254.2 million (2011: € - 61.6 million). Thus, the results were below expectations for the financial year. This resulted in a loss before taxes in the 2012 financial year of € 251.8 million (2011: € - 59.1 million).
In 2012, a domination and profit transfer agreement was closed with Metafinanz-Informationssysteme GmbH. Income from this contract is disclosed under income from participations. The increased income from other securities, other interest and similar income is mainly due to interest income from the discounting of longterm provisions. Interest and other expenses rose mainly due to borrowing from Allianz SE in 2011 by in total € 2.2 million. A loss of € 216.7 million (2011: € - 60.7 million) was recorded in earnings from ordinary activities. This loss is primarily the result of expenses and startup costs for new services and projects incurred to expand AMOS’ role and establish it as the global shared service provider of the Allianz Group. It is also the result of one-off costs incurred to boost efficiency in ongoing operations, as
21
management report
3.3 Investments Breakdown of investments (€ million)
2012
2011
Software
156.6
180.6
-13 %
8.9
15.9
-44 %
Mainframe hardware
2.9
11.5
-75 %
Storage media
9.0
7.3
+23 %
Client/server hardware
Change
Printing and finishing
0.0
0.2
-100 %
Network components
74.6
2.6
+2.769 %
5.7
1.7
+235 %
Communications equipment Operating/business equipment
19.6
0.4
+4.800 %
Low-value assets
4.3
2.4
+79 %
Financial investments
4.6
15.9
-71 %
286.2
238.5
+20 %
Total
Investments in the financial year 2012 were € 286.2 million, € 47.7 million more than 2011 (€ 238.5 million). This is because more Group and client company related IT projects were capitalized as AMOS moved forward with establishing new areas of business. The total investment of IT projects under the item Intangible assets on the balance sheet was €156.6 million in 2012 (2011: 180.6 million). Also, the AGN (Allianz Global Network) project – which started in 2012 – was capitalized under the item Property, plant and equipment on the balance sheet with a volume of € 66.2 million.
22
The increase in Operating/business equipment owes mainly to the purchase of network components and telecommunications and computer equipment as well as to the purchase of tenant fixtures for the Gustav-Heinemann-Ring building in Munich. These investments were financed chiefly through new loans of € 329.7 million (2011: 85.0 million) from Allianz SE, Allianz France S.A., Allianz Suisse VersicherungsGesellschaft, and AGA International S.A. Paris for the pre-financing of IT projects. These loans and short-term bridging loans from Allianz SE were in addition used to finance ongoing losses.
AMOS Annual Report 2012
4. Outlook 2013 In 2013, AMOS will continue to make significant contributions to transforming Allianz into a digital group, realizing synergies and implementing global transformation projects. AMOS will also be gradually adjusting its structures and processes to ensure global delivery capability, agility and competitive price points. As ever, the focus is on establishing a customer-oriented service culture, raising customer satisfaction and reliability. AMOS is transforming its delivery model for the future to adapt to its international clients’ footprint. Local client-facing presence will be expanded, and locations optimized to ensure cost efficiency, flexibility, scalability and access to talent pools. The AMOS delivery model will be complemented by new proximity centers and delivery centers. AMOS will continue to expand its international presence and plans to open new offices in France, India, Romania and the US. The following section presents key examples of the activities of AMOS in 2013: 4.1 Business In Corporate Real Estate, AMOS will continue to roll out best-practice operation and location standards for Allianz Group in each country and with each new relocation project. AMOS will support Allianz entities in efforts to achieve savings while continuing to provide attractive and efficient workplace environments.
HR Services will engage with potential customers and initiate the contract that will deliver customers up to 40 % savings on payroll administration costs through multicountry volume discounts. Customers will also benefit from unified personnel management processes based on a common HR information system that can deliver better quality at a lower price by leveraging the purchasing power of the Allianz Group. Allianz Group OPEX will intensify its focus on operational consulting and support for transformation projects in 2013. A partnership with consulting company Roland Berger will enable Allianz Group OPEX to call on additional capacity and skills worldwide at short notice and will help to expand capabilities and offerings. In 2013 AMOS Global Sourcing & Procurement will continue to realize Group synergies and additional procurement savings. One strong focus will be to improve the loss ratio by further claims procurement projects (parts, glass, paint). The unit will also continue to roll out global and regional procurement initiatives both in IT and non-IT, using Group synergies to improve the expense ratio. A state-of-the-art eSourcing solution will be launched to harmonize and professionalize sourcing processes within the Group. This will make negotiation and tendering processes more transparent, auditable and efficient, while also supporting internal and external compliance requirements.
New shared services are being prepared in Financial Business Services and Procurement, the aim being to offer these to Allianz Group companies in the course of 2013. The first step will be to establish standardized, consistent services for predominantly transactional activities in the fields of transactional finance and, notably, procure-to-pay processes and accounts receivable, which will be operated by a Business Process Outsourcing (BPO) provider. After development of a target scenario, the plan is then to select a provider and to move operative tasks to that provider.
23
management report
4.2 Applications In 2013 AMOS will continue transformation projects to ensure that requirements are harmonized and that platforms deliver value to customers. In 2013 AMOS will provide its services and expertise to help replace the insurance application landscape of Allianz France. The Allianz Business System (ABS) is to replace all the IT systems apart from the individual life segment, and will manage contracts, products, business partners and insurance claims operations. The “Volkswagen Autoversicherung AG” (a joint venture between Volkswagen Financial Services AG and Allianz SE) will go live with ABS international in 2013. Business Transformation will also be working with Global Business Intelligence on analytics to unlock more of the value in available information assets. The new global, digital interaction platform Allianz oneWeb will be rolled out to further Allianz entities and Global Lines. The platform will be continuously maintained, developed and enhanced, and new functionalities for direct and third-party business will be added. The next oneWeb migrations in 2013 will take place in Allianz France, Allianz Austria, Allianz Korea and Allianz Global Corporate & Specialty.
24
4.3 Infrastructure The fundamental change to the data center landscape also affects the requirements of IT operations. Global scale is essential to run an IT infrastructure competitively. AMOS therefore plans to team up with a strong global partner who has the ability to scale its IT infrastructure services sustainably across a number of companies. To coordinate cooperation and to establish end-toend operations, AMOS will set up a “Service Integrator Function”. This unit will oversee process standardization and optimization, and coordinate global service delivery through internal and external resources. It is also part of the global Allianz IT strategy that the operation of strategic platforms and business-critical legacy systems will remain within AMOS. The Allianz Global Network will be implemented in Italy and France in 2013, and will then be expanded throughout Europe and North America. By 2014, the Allianz Global Network will have interconnected the entire Allianz Group.
AMOS Annual Report 2012
As the basis for its Shared Security Services, AMOS will continue to develop and maintain an international security competence center with highly skilled security experts. This underpins the security of the standard IT services which AMOS provides. Core security capabilities such as data leakage protection, and vulnerability and threat management will be developed and rolled out. An IT Enterprise Governance, Risk and Compliance Service will be established, and the unit will also be piloting an identity and access tool for global identity and access management . The tool creates the basis for granting access to applications and data in a globally harmonized process landscape; once it is in place, AMOS will be able to provide shared services even more efficiently. The international rollout of the Allianz Virtual Client will continue until 2015. Furthermore Allianz Cloud Client will be launched with selected Allianz Group companies beginning in 2013.This will combine the Virtual Client with an intelligent end-device service.
4.4 Financial Development From a financial point of view, the AMOS business can be organized into the delivery of shared services (service portfolio) and support for strategic transformation projects for Allianz Group (investment portfolio). Within the service portfolio, AMOS expects an improvement in results from the “Transformation Plan” restructuring program and further measures initiated to increase revenue and reduce cost. Considering the baseline 2012, also in 2013 the profit will be negative. The investment portfolio is impacted by startup costs, with revenues for the new platforms and services for Allianz Group and client companies growing only slowly at first. The investment projects will also entail funding requirements, to be covered by equity or capital borrowing within the Allianz Group. In total, in 2013 and also for 2014, AMOS plans revenue growth and an improved profit situation prior to settlements under the profit and loss transfer agreement, without reaching break-even. Additional measures to regain profitability are targeted.
Increased performance and security thanks to the consolidation of data centers 25
management report
5. Risk Report 2012 As an internal service provider to the Allianz Group, AMOS aligns its risk management with operating and financial risks and reports regularly on its current risk position. 5.1 Risk Management Organization Risk controlling is part of Operational Risk and Business Continuity Management (OpRisk & BCM) in Business Development. OpRisk & BCM heads the risk committee, which comprises the members of AMOS Management Board. Preliminary work for the committee is carried out by the sub-division heads of each business unit. The committee convenes for regular meetings, where it identifies, appraises and manages risks and the countermeasures to be adopted. OpRisk & BCM reports on the current risk position to the Supervisory Board of AMOS and to Allianz SE. 5.2 Risk Categories, Risk Assessment and Control Measures As a service provider, AMOS classifies risks into the following categories: operational, financial, strategic, reputation and market risks. The risks are assessed both quantitatively and qualitatively using recognized and reliable methods in accordance with Allianz Group specifications. In this respect, AMOS essentially concentrates on identifying and minimizing operational and financial risks. Strategic risks are identified and managed as part of the wider strategic debate in the Allianz Group as a whole. Strategic risks include risks which could, for example, jeopardize the company’s ability to reach its strategic objectives. Reputation risks concern the risk of loss in the event the reputation of AMOS is compromised. Potential reputation risks are regularly discussed with AMOS Communications and recorded. Market risks encompass all risks arising from changes to underlying market conditions, and are considered in conjunction with financial risks. Financial risks cover all risks that can cause
26
outcomes to deviate from financial planning, such as incorrect costing or project planning. Such risks can be mitigated by controlling of financial reporting and by project steering within AMOS. Operational risks cover all risks of loss arising from inefficiencies or errors in processes and controls caused by technology, employees, organizational structures or external factors. Risks of this nature are mitigated by appropriate technical and organizational safeguards – such as high availability and backup measures at the Unterföhring computer centers and crisis management to recover business following a disaster. Allianz customers and business partners have controlled, authorized access to Allianz Group applications protected by firewall-DMZ complexes (demilitarized zone, security system with access-controlled communication between internal and external computer networks). This prevents unauthorized access from the Internet or other external networks. Access authorization and control systems are employed alongside encryption technologies to ensure the confidentiality of stored or transferred data. In addition, correct and secure operation and development of central applications in finance, investment, HR and procurement are ensured by incorporating SAP applications and SAP-supported processes. A business impact analysis/risk identification and assessment (BIA/RIA) is carried out in compliance with the Allianz Business Continuity Management (BCM) policy to evaluate the ability of AMOS to recover operations in the event of disaster. The risk controlling activities at AMOS did not identify any risks in 2012 that could jeopardize the company’s existence. AMOS meets the requirements of Internal Control over Financial Reporting (ICoFR) in compliance with the provisions of the Group Financial Controls (GFC), carrying out regular controls of key service provision processes such as procurement, processes in change management, problem management, user access management and IT security management, and supplying documentary
AMOS Annual Report 2012
6. Intercompany Agreements evidence to the financial reporting officers at customer companies. The controlling environment introduced under ICoFR will continue to contribute to high-quality financial reporting. AMOS consistently meets the Group guidelines set out in documents such as the Group Information Security Framework, the Business Continuity Policy, the Risk Policy, the Group Compliance Policy and financial reporting requirements from the ICoFR. Compliance with the requirements is demonstrated on a regular basis by means of suitable controls and reports. As was previously the case for the German client base of AMOS, these compliance services for standard operating processes are now also performed for European and non-European Allianz companies which are customers of AMOS. Client-specific services are provided in accordance with customer requirements.
A domination and profit transfer agreement between Allianz SE as a controlling company and AMOS SE as dependent company has been in place since the 2009 financial year. In the 2012 financial year a domination and profit agreement between AMOS SE as the controlling company and Metafinanz-Informationssysteme GmbH as the dependent company was concluded.
7. Report on Events Subsequent to the Balance Sheet Date No events of particular significance for evaluating the asset, financial and earnings situation at AMOS occurred between the end of the financial year and the Management Board meeting at which the Annual Report was presented.
Risk Controlling will again actively track AMOS services for client companies in the 2013 financial year.
27
Annual Financial Statements
AMOS Annual Report 2012
AMOS Annual Financial Statements 2012 Allianz Managed Operations & Services SE
29
Annual Financial Statements
Balance sheet as at December 31, 2012 Assets
2012 €
2012 €
2012 €
2011 €
A. Non-current assets I. Intangible assets 1. Self-created commercial property rights and similar rights and assets
124,057,339
2. Purchased concessions, commercial property rights and similar rights and assets as well as licenses to such rights and assets
191,665,823
222,298,094 315,723,162
222,298,094
II. Property, plant and equipment 2. Technical plant and equipment
91,976,119
4. Downpayments made and assets under construction
66,246,570
77,666,093 0 158,222,689
77,666,093
III. Financial assets 1. Investment in affiliated companies 3. Participations 5. Securities held as non-current assets
15,475,124
15,457,124
1,500
1,500
6,842,641
2,293,843 22,319,264
17,752,466 496,265,115
317,716,653
B. Current assets I. Inventories 1. Materials and other supplies
699,851
625,116 699,851
625,116
II. Receivables and other assets 2. Receivables due from affiliated companies, thereof due after more than one year 9,981,099 € (2011: 0 €) 4. Other assets IV. Balances with banks, Bundesbank,checks and cash on hand 1)
C. Prepaid expenses Total assets 1)
Item numbering as per § 266 HGB
30
342,810,611
100,519,471
28,383,616
20,745,517 371,194,226
121,264,989
2,416,890
291,160 374,310,967
122,181,265
28,413,237
31,668,186
898,989,319
471,566,104
AMOS Annual Report 2012
Equity and liabilities
2012 €
2012 €
2011 €
A. Shareholders‘ equity I. Issued capital II. Additional capital reserves
121,000
121,000
189,487,056
189,487,056 189,608,056
189,608,056
B. Provisions 1. Reserves for pensions and similar obligations 2)
2,033,202
1,905,277
2. Tax provisions
6,279,484
10,645,568
3. Other provisions
191,101,804
77,245,234 199,414,490
89,796,078
C. Liabilities 4. Trade payables, thereof due within one year 48,108,150 € (2011: 49,816,597 €) 6. Liabilities to affiliated companies thereof due within one year 121,016,305 € (2011: 33,852,421 €) thereof due within up to five years 329,718,263 € (2011: 85,000,000 €) 8. Other liabilities, of which in taxes, of which in social welfare thereof due within one year 11,124,054 € (2011: 6,529,473 €)
Total equity and liabilities ²)
48,108,150
66,780,076
450,734,568
118,852,421
11,124,054
6,529,473 509,966,773
192,161,970
898,989,319
471,566,104
Item numbering as per § 266 HGB.
31
Annual Financial Statements
Income statement
for the period from January 1 to December 31, 2012 2012 €
1. Revenues
2012 €
2012 €
606,933,262
2011 € 617,541,020
3. Other own work capitalized
12,682,726
7,086,710
4. Other operating income
34,217,124
33,843,552
thereof from currency conversion 1,722,692,€ (2011: 1,425,952 € ) 1) 653,833,113
thereof out-of-period revenues 12,019,010 € (2011: 28,291,145 €) 2)
658,471,282
5. Expenses for IT operations a) Expenses for materials and other supplies
-6,959,240
-6,479,495
-380,911,499
-344,603,308
-135,253,885
-81,867,573
thereof out-of-period expenses 56,410 € (2011: 0 €) b) Expenses for services received thereof out-of-period expenses 7,908 331 € (2011: 0€) c) Service provider services thereof out-of-period expenses 375,241 € (2011: 752,412 €) -523,124,624
-432,950,377
6. Personnel expenses a) Wages and salaries
-163,273,643
-149,053,160
-21,643,858
-19,382,465
thereof out-of-period expenses 145,897 € (2011: 3,007,658 €) b) Social security thereof out-of-period expenses 64,573 € (2011: 21,575 €) c) Pensions
-18,604,531
-17,534,250 -203,522,033
-185,969,874
7. Depreciation and amortization a) on intangible assets
-62,892,274
-25,268,780
b) on property, plant and equipment
-43,272,001
-34,089,861
8. Other operating expenses
-106,164,275
-59,358,641
-38,572,914
-39,649,787
thereof following currency conversion 2,154,060 (2011: 1,686,092 €) 1) thereof out-of-period expenses 1,115,090 € (2011: 26 591 €) 9. Income from participations
-871,383,845
-717,928,678
1,297,703
0
thereof income from profit transfer: 1,297,703 € (2011: 0 €) 10. Income from other securities 11. Other interest and similar income
0
516
4,104,676
999,972
-4,508,971
-2,274,762
-216,657,325
-60,731,670
from affiliated companies: 335,926 € (2011: 510,754 €) from discounting interest on provisions: 3,335,148 € (2011: 184,543 €) 13. Interest and similar expenses from affiliated companies: 3,473,505 € (2011: 1,372,382 €) from discounting interest on provisions: 387,450 € (2011: 712,880 €) 14. Earnings from ordinary activities 15. Extraordinary income 16. Extraordinary expenses 17. Extraordinary result
8,101,509
2,739,589
-43,277,957
-1,113,786
-35,176,448
1,625,803
-251,833,773
-59,105,867
18. Taxes on income and earnings 19. Other taxes Income from losses absorbed
628,042
-96,815
-2,971,696
-2,363,452
254,177,426
61,566,135
20. Net income/loss for the year
0
0
Net profit/loss
0
0
) In the previous year 2011 the item reported solely unrealized exchange rate profits and losses ) Reported in 2011 as out-of-period 28,291,145 €; value added tax for 2011 totalling 10,063,483 € included in this amount was not out-of-period.
1 2
32
AMOS Annual Report 2012
Notes to the Financial Statements Legal Regulations The Company prepares its annual financial statements and management report in accordance with the provisions of the German Commercial Code (HGB) and the German law governing the establishment of a Societas Europaea (SE Introduction Act). It meets the criteria for recognition as a large corporation on the basis of the provisions in § 267 Section 3 of the German Commercial Code (HGB).
Accounting and valuation policies
The financial statements have been prepared in Euros (€).
Intangible assets, property, plant and equipment These assets are stated at their acquisition cost or production cost minus straight-line depreciation and amortization in accordance with German commercial law. Depreciation is calculated on a monthly basis. The production costs are reported with the lower production cost limit. Overheads have not been included because they were insignificant.
In 2012, the Company continued to develop as a global shared service company.
The purchased intangible assets include both finished and unfinished intangible assets.
On February 17, 2012, a branch was founded in The Netherlands, and this commenced operations on August 1, 2012.
In exercising the capitalization options pursuant to § 248 section 2 HGB, self-created intangible assets were capitalized in the financial year. The research and development costs in the financial year amounted to € 2,003 thou. No research and development costs were incurred in 2012 on self-created intangible assets in 2012. In 2012 there was a reclassification of the acquired noncurrent assets into self-created intangible assets in the amount of € 76,919 thou. These assets were the software acquired in 2011 in the amount of € 40 631 thou, which was further developed by AMOS SE in 2012 such that it was reported to December 31, 2012 as part of the selfcreated intangible assets (€ 114,867 thou).
Moreover, on August 1, 2012, AMOS SE migrated its branch in The Netherlands into the Netherlands subsidiary Allianz Managed Operations & Services Netherlands B.V., Rotterdam. The subsidiary is reported in the balance sheet at investment book value. Owing to these circumstances, there is only limited comparability between the figures of this reporting year and those of the previous year.
Assets with an acquisition cost of less than € 150 are depreciated according to tax regulations. Various IT projects that AMOS SE is performing for other Allianz companies are capitalized in the intangible assets at acquisition or production costs. Investment in affiliated companies Investments in affiliated companies are carried at acquisition cost or at the contribution value (book value carried by the predecessor in title).
33
Annual Financial Statements
Development of non-current assets in the financial year 2012 Acquisitions Balance at 31.12.11 Total €
Additions 2012 €
Reclassifications 2012 €
Disposals 2012 €
451,175,217
18,212,353
-300
-1,612,209
467,775,060
0
138,422,636
0
0
138,422,636
451,175,217
156,634,989
-300
-1,612,209
606,197,696
Mainframes
66,659,292
2,892,079
0
-11,060,631
58,490,740
Storage media
94,725,393
9,046,282
-336
-16,898,852
86,872,487
Print and post-press
25,087,429
26,047
195
-855,015
24,258,656
Network components
26,667,738
74,602,931
38,525
-1,055,450
100,253,744
Software Self-created software Total software
Servers Plant and office equipment Low-value assets Total property plant and equipment
Balance at 31.12.12 €
216,825,016
8,860,940
2,262
-25,590,597
200,097,621
38,652,225
25,270,509
-76,137
-1,748,785
62,097,812
1,747,954
4,308,860
36,176
-2,589,805
3,503,185
470,365,047
125,007,649
686
-59,799,135
535,574,246
719,159
18,000
0
0
737,159
14,739,465
0
0
0
14,739,465
Investments 1. Investments in affiliated companies 2. Participations 3. Securities Total investments Total
2,293,843
4,548,798
0
0
6,842,641
17,752,466
4,566,798
0
0
22,319,264
939,292,730
286,209,435
386
-61,411,345
1,164,091,206
Participations The participation is valued at cost. Securities Part of the pension commitments are secured by a contractual trust arrangement (Methusalem Trust e.V.). These trust assets constitute primarily offsettable plan assets in accordance with § 246 section 2 HGB, the fair value of which is either equivalent to the asset value or the market value in accordance with § 253 section 1 HGB. The financial assets are valued at the mitigated lower of cost or market principle. Inventories Inventories are valued individually at cost.
34
Trade and other receivables, balances with banks, checks and cash on hand Receivables are valued at their nominal amounts. Receivables in currencies other than the Euro are valued at the average foreign exchange spot rate on the balance sheet date. Allianz Managed Operations & Services SE (AMOS SE) has offset certain receivables against payables and liabilities to the extent permitted by German commercial law. The option rights and equity swaps acquired to hedge share-based compensation plans (Group Equity Incentive Plans) are combined with the corresponding underlying transactions as a hedge, provided a direct hedging relationship exists. The underlying transactions are reported under Other Provisions and the hedging transactions are reported under Other Assets.
AMOS Annual Report 2012
Depreciation and amortization Balance at 31.12.11 Total €
Balance sheet results
Additions 2012 €
Reclassifications 2012 €
Disposals 2012 €
Balance at 31.12.12 €
Balance at 31.12.11 Total €
Balance at 31.12.12 €
228,877,123
48,526,977
-40
-1,294,822
276,109,238
222,298,094
191,665,823
0
14,365,297
0
0
14,365,297
0
124,057,339
228,877,123
62,892,273
-40
-1,294,822
290,474,534
222,298,094
315,723,162
55,160,495
3,246,353
0
-10,972,107
47,434,742
11,498,796
11,055,998
83,028,834
5,586,611
-49
-16,898,722
71,716,674
11,696,559
15,155,813
19,706,485
1,696,731
195
-855,015
20,548,396
5,380,944
3,710,260
22,940,618
2,249,712
1,480
-784,037
24,407,773
3,727,121
75,845,971
193,864,497
13,756,408
103
-25,537,495
182,083,512
22,960,519
18,014,109
16,250,070
12,940,672
10,727
-982,898
28,218,571
22,402,155
33,879,241
1,747,954
3,795,512
-12,415
-2,589,163
2,941,889
0
561,296
392,698,953
43,272,001
40
-58,619,437
377,351,557
77,666,094
158,222,689
0
0
0
0
0
719,159
737,159
0
0
0
0
0
14,739,465
14,739,465
0
0
0
0
0
2,293,843
6,842,641
0
0
0
0
0
17,752,466
22,319,264
621,576,076
106,164,274
0
-59,914,259
667,826,092
317,716,654
496,265,115
A micro-hedge is used to ensure the hedges are fully protected against the risk of price changes as a result of fluctuations in market prices. The effectiveness of the hedging for the Group Equity Incentive Plans which are scheduled to expire in 2016 at the latest is checked prospectively and retrospectively at the balance sheet date using the critical term match method to match conditions, parameters and risks. The underlying transactions, which consist of future payment obligations, totaled € 6,196 thou (2011: € 5,276 thou) on the balance sheet date. Hedges against risks of changes in value in the amount of € 2,449 thou (2011: € 229 thou) have been formed. The hedges are reported using the net hedge presentation method.
In the net hedge presentation method, value changes or the changes to payment flows of underlying transactions and the hedging transactions are not reported when they concern the effective component of the valuation unit. They are reported in the balance sheet only for the noneffective part of the valuation unit and for unhedged risks. Prepaid expenses Prepaid expenses are stated at nominal value. Provisions Provisions are based on the anticipated settlement amount required. Long-term provisions formed in 2012 are discounted applying the average market interest rate of the past financial years, according to their remaining maturities.
35
Annual Financial Statements
Derivative financial instruments (Assets B.II.) Category / type
Nominal amount in € thou
Fair value in € thou
Valuation method
Options (Allianz Long Call SAR 2006)
1,502
0
Binomial model
Options (Allianz Long Call SAR 2007)
Options (Allianz Long Call SAR 2008)
Options (Allianz Long Call SAR 2010)
36
2,379
2,353
2,121
1
98
368
Binomial model
Binomial model
Binomial model
Significant assumptions
Interest rate
0.26 %
Volatility
20.94 %
Dividend yield
4.29 %
Share price
104.80 €
Cap
331.03 €
Interest rate
0.26 %
Volatility
20.52 %
Dividend yield
4.29 %
Share price
104.80 €
Cap
400.33 €
Interest rate
0.26 %
Volatility
22.38 %
Dividend yield
4.47 %
Share price
104.80 €
Cap
293.45 €
Interest rate
0.26 %
Volatility
25.14 %
Dividend yield
4.62 %
Share price
104.80 €
Cap
218.40 €
Book value in € thou
Balance sheet line item
0
Assets B. II.
1
Assets B. II.
98
Assets B. II.
368
Assets B. II.
AMOS Annual Report 2012
Reserves for pensions The Company 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 offsettable plan assets, the fair value of which is either equivalent 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. The reserves for pensions are calculated according to actuarial principles. The conversion costs incurred as a result of the initial application of the German Act to Modernize Accounting, Reporting and Auditing (BilMoG) in 2010 are being distributed over up to 15 years. In the financial year 2012, one-fifteenth of this amount is recorded as an extraordinary expense. This results from the pension commitments which are accounted for centrally at Allianz SE (see section on Contingent Liabilities). Provisions for long-service awards to staff, partial retirement (“Altersteilzeit”, which is a specific type of early retirement program in Germany) and preretirement benefits are also determined according to actuarial principles. The full amount of the obligations determined is carried as a liability. The simplified regulations in § 253 section 2 sentence 2 HGB (residual time to maturity of 15 years) were used to arrive at the discount rate.
Notwithstanding the above, some of the pension commitments use the guaranteed rate of the pension commitments of 2.75 % p.a. and the guaranteed rate of pension increase of 1 % p.a. 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 Adjustment Act of 2007). 31.12.2012 €
31.12.2011 €
Acquisition cost of the offset assets
42,192,672
34,248,623
Fair value of the offset assets
42,297,526
34,276,361
Settlement amount of the offset debts
44,330,729
36,181,638
0
0
Amount of provisions not recognized in accordance with Art. 67 section 2 EGHGB (Introductory Act to the German Commercial Code)
The net total amount of reserves for pensions formed at AMOS SE is € 2,033 thou (2011: € 1,905 thou). In accordance with § 246 section 2 sentence 2 HGB, assets that serve exclusively to fulfill obligations from pension commitments are offset with debts. In addition, pension obligations were issued which are accounted for under joint and several liability at Allianz SE. You can find further explanations of reporting of pensions and similar obligations in the Notes under “Notes on Liabilities” and “Contingent liabilities”.
The effect of a change in the discount rate is recognized in Other Interest and Similar Income. On December 31, 2012, the discount rate was 5.06 % (2011: 5.13 %), the rate of pension increase was 1.90 % (2011: 1.90 %) and the rate of increase in remuneration was 3.25 % (2011: 3.25 %), including average career rate increases.
37
Annual Financial Statements
Additional capital reserves (Equity and liabilities A.II.) Additional capital reserves
Balance at 31.12.11 in €
Addition
Disposal
Balance at 31.12.12 in €
189,487,056
0
0
189,487,056
Retained earnings (Equity and liabilities A.III.) Retained earnings
38
Balance at 31.12.11 in €
Addition
Disposal
Balance at 31.12.12 in €
0
0
0
0
AMOS Annual Report 2012
Other provisions The company has obligations from staff long-service awards, a long-term credit account and partial retirement and early retirement agreements which are reported under Other Provisions. The assets reserved in the Methusalem Trust e.V. for partial retirement security deposits and the long-term credit account represent offsettable 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 accounting assumptions.
Acquisition cost of the offset assets
31.12.2012 €
31.12.2011 €
9,194,029
8,788,362
Fair value of the offset assets
10,373,109
9,775,164
Settlement amount of the offset debts
27,365,183
18,550,537
Liabilities Liabilities are carried at the settlement amount. Liabilities in currencies other than the Euro are valued on the balance sheet date at the average foreign exchange spot rate on the balance sheet date.
Deferred taxes Pursuant to the option provided under § 274 section 1 sentence 2 HGB, deferred tax assets in excess of the offsettable amount are not included. The largest discrepancies between the commercial and fiscal valuations can be found in the items Non-current Assets, Property, Plant and Equipment and Other Provisions, which result in deferred tax assets. A tax rate of 31 % is used in the valuation of the domestic deferred tax assets. Profit distribution block The sum total of amounts which pursuant to § 268 section 8 HGB are essentially subject to the profit distribution block, or which are subject to the profit transfer block as per § 268 section 8 in combination with § 301 AktG (Stock Corporation Act) is € 125,236 thou. This amount comprises amounts from capitalizing self-created intangible assets totaling € 124,057 thou, and amounts from capitalizing assets at fair value totaling € 1, 284 thou, serving exclusively to serve debts from pension obligations. The amount subject to the profit transfer block is fully covered by freely available shareholder equity.
Foreign currency translation Foreign currency translation into Euros during the year was at the rate prevailing at the time the transactions were posted. As at December 31, 2012, receivables and liabilities as per § 256 a sentence 1 HGB were valued on the balance sheet date at the average spot exchange rate on the balance sheet date. The provisions of § 256 a sentence 2 HGB were applied to receivables and liabilities due within one year. Profit and loss was posted in the income statement in the “thereof” note.
39
Annual Financial Statements
Notes to the balance sheet and income statement Intangible assets (Assets A.I.) This item covers purchased software licenses. The purchased intangible assets include both finished and unfinished intangible assets. Various IT projects that AMOS SE is performing for other Allianz companies are capitalized in the intangible assets at acquisition or production costs. Property, plant and equipment (Assets A.II.) Property, plant and equipment comprises servers, network components, storage devices, plant and office equipment, mainframes, print and post-press, and lowvalue assets. The Downpayments made and assets under construction item includes the Allianz Global Network project, which is not yet completed. Financial assets (Assets A.III.) Investment in affiliated companies (Assets A.III.1.) Investments in affiliated companies are capitalized at acquisition cost or at contribution value (the book value of the legal predecessor). The change in 2012 results from the migration of the branch in the Netherlands to a 100 % subsidiary. The subsidiary is reported at investment book value. The company equity is € 131.8 thou, of which € 18 thou is subscribed capital. Metafinanz-Informationssysteme GmbH (Munich) has since August 2011 been a 100 % subsidiary of AMOS SE. Its subscribed capital is 1,000,000 DM (€ 511,292), and the company equity is € 2,324 thou. A domination and profit transfer agreement was concluded with AMOS SE in the 2012 financial year. AMOS SE has held a 49.9 % share in AMOS Austria GmbH (Vienna) since June 2011. The company equity is € 25,234 thou, this includes the net loss for 2012 of € 4,233 thou.
40
Participations (Assets A. III.3.) The portfolio of participation investments at the balance sheet date consists solely of a holding in DENIC Domain Verwaltungs- und Betriebsgesellschaft eG, Frankfurt am Main, Germany. Securities (Assets A. III .5.) The portfolio of securities comprises investment fund shares of € 6,843 thou (2011: € 2,294 thou) serving as insolvency insurance for partial 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 July 1, 2004. The remaining fund shares are equivalent to the assets contributed by employees in deferred compensation schemes. Assets and debts were offset pursuant to § 246 section 2 sentence 2 HGB. Inventories (Assets B.I.) The inventories comprise stocks of printing paper. Receivables and other assets (Assets B.II.) Trade receivables relate to unpaid claims against third parties for services rendered and contractual agreements. Receivables from affiliated companies are primarily the receivable of € 254,591 thou (2011: € 61,817 thou) from the domination and profit transfer agreement with Allianz SE. There are also receivables of € 47,845 thou (2011: € 32,410 thou) from Group customers arising from unpaid invoices for services and cash pool claims against Allianz SE of € 32,414 thou (2011: - € 18,511 thou). The Other assets item includes tax refund claims resulting from the affiliation for tax purposes with Allianz SE totaling € 7,318 (2011: € 1,319 thou), options on shares of Allianz SE to hedge the risks of the Allianz Group arising from the Group Equity Incentives (GEI) and Allianz Equity
AMOS Annual Report 2012
Incentives (AEI) totaling € 6,662 thou (2011: € 5,460 thou), SAP licenses held for resale totaling € 6,144 thou (2011: 5,273 thou), tax refund claims from value added tax in Switzerland totaling € 4,135 thou (2011: € 2,503 thou) and other claims totaling € 1,400 thou. Details as per § 285 No.23 HGB on the valuation units (GEI) are reported under Receivables and other assets, Balances with banks, checks and cash in hand. In addition, reimbursement rights from the inland revenue resulting from corporation tax and loans to employees are also reported under this item. Prepaid expenses (Assets C.) Prepaid expenses comprise prepaid amounts for maintenance and servicing of hardware and software and for rental fees. Issued capital (Equity and liabilities A.I.) The issued capital on December 31, 2012 totaled € 121 thou, the same as 2011. Additional capital reserves (Equity and liabilities A.II.) The capital reserves were unchanged per December 31, 2012 over December 31, 2011. The capital reserves include freely available shareholder equity pursuant to § 272 (4) HGB. Reserves for pensions (Equity and liabilities B.1.) Reserves for pensions consist of obligations arising from vested pension contributions of € 1,138 thou (2011: € 1,110 thou ) to contribution-based pension plans (BPV), after offsetting with the pension assets, and of pension commitments for deferred compensation schemes (PZE) amounting to € 895 thou (2011: € 795 thou). Tax provisions (Equity and liabilities B.2.) A tax reserve was formed for operations at various locations. In addition, it was necessary to form a value added tax reserve for the procurement of licenses, the use of
which had not been adequately finalized by December 31, 2012. Other provisions (Equity and liabilities B.3.) The main items under Other Provisions were €106,169 thou (2011: € 29,169 thou) for outstanding trade payables, € 39,962 thou for restructuring measures for the „Transformation Plan“ restructuring program, and € 27,365 thou for reserves for partial retirement schemes. The increase of € 77,000 thou in provisions for trade payables is mainly attributable to provisions for expenses related to the change of provider (€ 43,972 thou), as well as from the provisions for external consulting services, including for realization of capitalizable projects such as AGN and GEP. The restructuring provisions for the „Transformation Plan“ program served to set up a cost reduction and process improvement program to realize the planned transformation of AMOS into a global shared-service provider. Since provisions for documents with mandatory retention periods (archiving costs) are provisions with a term of more than one year, they were discounted at the interest rate published by the German Central Bank (Deutsche Bundesbank) on the balance sheet date. Further funds have been set aside for profit-sharing and bonuses, staff vacation and flexitime credits, staff anniversary awards, Group Equity Incentive plans, preretirement benefits, contributions to the employers’ mutual insurance association, archiving costs, financial statement costs and the compensatory levy for severely disabled persons. Liabilities (Equity and liabilities C.) Trade payables relate to unpaid claims by third parties for goods and services received and for contractual agreements. In 2012, there are no liabilities whose due date lies over five years into the future.
41
Annual Financial Statements
Liabilities to affiliated companies comprise primarily liabilities to Allianz SE arising from loans. The loan providers are the parent company Allianz SE , Allianz France, AGA International S.A. Paris and Allianz Switzerland. Per December 31, 2012, the loan liabilities were € 414,718 thou (2011: € 85,000 thou). This item includes the following liabilities: € 33,248 thou (2011: € 14,684 thou) through the clearing business with Group companies, and liabilities of € 1, 790 thou (2011: € 0) for value added tax payments from the years 1999-2003 due to Allianz SE. Revenues (Income statement 1.) Revenues are attributable to Application & Data Services (33.2 %), Print & Output Services (13.5 %), Projects & Consulting (13.4 %), Workplace (11,3 %), Standard and Other Cross Functional Services (11.0 %), Other Services (9.2 %), Telecommunication (4.9 %) and Network (3.5 %). The Other Services also include services from Operations and Services and license sales. Revenues organized by geographical markets: Company code Germany
2012 € thou
%
554,238
91.3
United Kingdom
26,345
4.4
Belgium
10,591
1.7
Ireland
8,117
1.3
Netherlands
4,585
0.8
Switzerland
1,577
0.3
Singapore
1,481
0.2
India Total revenue
0
0
606,933
100
Other own work capitalized (Income statement 3.) This item comprises own work capitalized for IT projects which are recorded as intangible assets and property, plant and equipment in the balance sheet.
42
Other operating income (Income statement 4.) Other operating income essentially results from € 20,758 thou (2011: € 13,732 thou) from value added tax declarations from 2012 as a result of company affiliation for tax purposes, and € 9,244 thou (2011: € 11,145 thou) from the release of provisions, including for room costs and profit-sharing, due to low requirement. 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 supplies. Expenses for purchased services primarily include expenses for services of service providers, for maintenance and repair services, rents, fees for external services, intraGroup and inter-Group netting of services, fees for postal services, communications and external personnel costs. Expenses for materials and other supplies represent expenses for disposable items and consumables and IT information carriers. Personnel expenses (Income statement 6.) The item includes wages and salaries, social security contributions and pensions for AMOS SE employees over the financial year. The increase in personnel expenses is attributable to the higher number of employees in 2012. Depreciation and amortization (Income statement 7.) Depreciation and amortization is recorded as scheduled depreciation applied on the basis of monthly charges as permitted under commercial law. In contrast with the amortization period of 3-5 years, the European target IT platform project transferred from Allianz SE is being amortized over a period of ten years. Pursuant to § 253 (3) sentence 3 HGB, owing to the expected permanent impairment of non-current assets, impairment losses totaling € 20,826 thou are reported. These impairment losses were recognized on intangible assets and on plant and equipment.
AMOS Annual Report 2012
Other operating expenses (Income statement 8.) Other operating expenses include expenses for the use of cross-departmental functions charged by Group companies to AMOS SE, expenses for travel and professional training, expenses for consulting services for AMOS projects, and expenses for the valuation of foreign currencies and for exchange differences.
Other obligations
Income from participations (Income statement 9.) Metafinanz GmbH has since August 2011 been a 100 % subsidiary of AMOS SE. The domination and profit transfer agreement between AMOS SE and Metafinanz GmbH has existed since January 1, 2012. The income from profit transfer from Metafinanz GmbH per December 31, 2012 is € 1,298 thou.
Pensions and similar obligations
Income from other securities (Income statement 10.) This item recognizes income from distributions from the PZE pension fund. Other interest and similar income (Income statement 11.) Other interest and similar income chiefly comprises interest revenue from affiliated companies arising 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 multiyear provisions and interest income from employee loans. Interest and similar expenses (Income statement 13.) Interest and similar expenses chiefly comprise interest expenses against affiliated companies. These include the proportionate interest expenses for the loans, and the interest cost for reserves for employee anniversary awards. Also reported in this item are other interest expenses. These chiefly comprise interest cost on long-term provisions, and interest payment for a back payment of value added tax.
2012 €
Income from the fair value of the offset assets
-62,793
Imputed interest on the settlement amount of offset debts
698,288
Effect of the change in the discount rate on the settlement amount
20,207
Net amount of offset income and expenses
655,702
2012 €
Income from the fair value of the offset assets
-1,647,820
Imputed interest on the settlement amount of offset debts
1,732,709
Effect of the change in the discount rate on the settlement amount
22,310
Net amount of offset income and expenses
107,199
Offsetting was carried out as per § 246 section 2 sentence 2 HGB.
Extraordinary income (Income statement 15.) There was extraordinary income of € 8,102 thou (€ 2,739 thou) in 2012, chiefly comprising income from dissolving restructuring provisions. These concerned mainly older restructuring measures which were ended in 2012. Income ascribed to a different financial year was recognized in the income statement under the item Other Operating Income. Extraordinary expenses (Income statement 16.) There were extraordinary expenses of € 43,278 thou (2011: € 1,114 thou) in 2012. These largely comprised expenses of € 42,212 thou for the new restructuring measure “Transformation Plan” in 2012, and expenses of € 1,066 thou (2011: € 1,114 thou) arising out of exercising the option in accordance with article 67 section 1 sentence 1 in conjunction with article 67 section 7 EGHGB. The extraordinary expense of € 1,066 thou results from pension commitments.
43
Annual Financial Statements
Out-of-period income The out-of-period income of € 12,019 thou results chiefly from dissolving provisions for general corporate functions, and for profit-sharing and bonuses, and for credits pertaining to the previous year concerning the Service Provider area. Out-of-period expenses The out-of-period expenses of € 9,666 thou result chiefly from expenses for external consulting for the restructuring and expansion of AMOS SE implemented in 2011 , and higher expenses for service provider invoices and for maintenance services.
Other taxes Value added tax The other taxes are chiefly value added tax expenses for previous years.
Other information Contingent liabilities from company pension commitments and other financial obligations a) Pension commitments Contingent liabilities exist within the framework of pension plans. The company pension plan for employees of the German subsidiaries 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 (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin). The benefits provided by the AVK are financed in accordance with the lump-sum contribution system, under which the member companies make payments to the fund through deferred compensation. In addition to Allianz SE, Allianz Deutschland AG, Allianz Versicherungs-AG and Allianz Lebensversicherungs-AG, the member companies also include the Company. The Company is obliged to make employer contributions as required and to cover the administration costs of the pension fund on a pro rata basis. The payments are made through Allianz SE. The member companies also make contributions to the Allianz Pensionsverein e.V. (APV), a contribution-based Group pension plan. In addition, Allianz SE assumed joint and several liability for the majority of the Company’s pension commitments. The Company reimburses the costs; Allianz SE has assumed the fulfillment. For this reason, reserves for pensions are carried on the Allianz SE accounts. The Company’s joint and several liabilities arising from these pension commitments and the related right of recourse against Allianz SE are:
44
AMOS Annual Report 2012
31.12.2012 €
31.12.2011 €
Settlement amount of the offset debts
91,753,141
87,320,494
Amount of reserve not recognized in accordance with Art. 67 section 2 EGHGB
11,637,030
12,703,384
Joint and several liability/right of recourse to Allianz SE
80,116,111
74,617,110
b) Changed financing procedure of the Pension Guarantee Fund The conversion of the financing procedure of the pension guarantee fund in 2006 gave rise to joint and several liability of € 351 thou (2011: € 384 thou), which is not reported in the Company’s balance sheet as it is matched by a right of recourse to Allianz SE in the same amount. c) Contributions to the Pension Guarantee Fund payable in 2013 The same holds true for the contributions to the pension guarantee fund payable for 2013 arising from the financial year 2009. This also results in joint and several liabilities of € 176 thou (2011: € 352 thou ), which are not reported in the Company’s balance sheet as these liabilities are matched by a right of recourse against Allianz SE in the same amount. d) Other financial obligations Other financial obligations resulting chiefly from multiyear project, maintenance and data transmission contracts with third parties total around € 1,259,542 thou (2011: € 269,049 thou). Compared to the previous year, this item includes obligations totaling € 858,581 thou resulting from obligations from the overarching Allianz Group project Allianz Global Network. Additional financial obligations toward affiliated companies resulting from multiyear rental agreements totaling € 102,199 thou (2011: € 78,441 thou). At the end of 2012, a property complex was leased for all the Allianz companies in Singapore.
The full fees to the auditor are reported in the Group financial statements of Allianz SE. Remuneration for the Board of Management and the Supervisory Board The remuneration paid to two members of the Board of Management is part of the personnel expenses of Allianz SE. The total remuneration for the other members of the Board of Management was € 3,027 thou in the reporting period. Shared-based remuneration of 5,051 Restricted Stock Units (RSU) 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 € 435 thou. A comparison with the previous year is not possible, since in 2011 the remuneration paid to the Board of Management was reported in the Group financial statements of Allianz SE. Allianz SE created provisions of € 3,380 thou (2011: € 3,319 thou) 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 surviving dependents: 31.12.2012 €
31.12.2011 €
Acquisition cost of the offset assets
97,104
93,189
Fair value of the offset assets
97,104
93,189
4,193,888
4,188,582
716,294
775,985
3,380,490
3,319,408
Settlement amount of the offset debts Amount of reserve not recognized in accordance with Art. 67 section 2 EGHGB Reserves for pensions/excess of plan assets over pension liability
The fair value of the offset assets is based on the fair asset value of the reinsurance cover.
45
Annual Financial Statements
Expenses for the Supervisory Board amounted to € 10 thou in the financial year (2011: € 5 thou). The members of the Supervisory Board and the Board of Management are listed on pages 6 and 7 respectively. Average total number of employees for the year (excluding members of the Board of Management, trainees, interns and employees on parental leave or in military service/alternative civilian service.) Full-time employees 1,529 Part-time employees 243 Total1,772
Group membership Allianz Managed Operations & Services SE (AMOS SE) is part of the Allianz Group, for which the controlling parent company is Allianz SE, Munich. The consolidated financial statements and Group Management Report of Allianz SE are published in March in the Group Annual Report and then submitted to the operator of the electronic German Official Gazette and published there. The documents may be viewed in the corporate register or requested from our Company. They are also available on the Allianz SE website. AMOS SE is included in the consolidated financial statements and Group Management Report of Allianz SE, with discharging effect for AMOS SE. A domination and profit transfer agreement has existed between Allianz SE and AMOS SE since the financial year 2009. The companies belonging to the Allianz Group and their affiliated companies are listed in the Annual Report of Allianz SE.
Munich, March 18, 2013 Allianz Managed Operations & Services SE
The Board of Management
Sylvie Ouziel
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Stefan Britz
Dr. Barbara Karuth-Zelle
Dr. Rüdiger Schäfer
Dr. Ralf Schneider
AMOS Annual Report 2012
Auditor’s Report 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 management report of the Allianz Managed Operations & Services SE, Munich, for the business year from 1 January to 31 December 2012. The maintenance of the books and records and the preparation of the annual financial statements and management report in accordance with German commercial law are the responsibility of the Company’s management. Our responsibility 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 § 317 HGB [“Handelsgesetzbuch”: “German Commercial Code”] and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation 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 Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness 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 management, as well as evaluating the overall presentation of the annual financial statements 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 financial 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 and as a whole provides a suitable view of the Company‘s position and suitably presents the opportunities and risks of future development.
Munich, March 26, 2013 KPMG AG Wirtschaftsprüfungsgesellschaft Dr. Thomas Kagermeier Rüdiger Hildebrandt Auditor Auditor
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