12 Allianz / Economic-Financial Performance

Economic-Financial Performance (G4-9, G4-EC1)

Premiums and claims

Net premiums issued by Allianz Seguros reached BRL 2.7 billion in 2015 (BRL 2.8 billion in 2014), indicating a reduction of 5.5% compared with the previous year and ranking Allianz 11th in the Brazilian market. In terms of product lines, the company ranked eighth in Auto and Corporate Lines, 19th in Life, and 24th in Health (sixth among insurance companies).

The loss ratio reached 74.8% on premiums received (89.5% in 2014). At the end of the period, a loss of BRL 327.7 million was recorded (BRL 363.6 million in 2014). The main items influencing this result were:

• A 5.9% reduction in premiums received, influenced by the Assets, Transports, and Rural segmentation;

• Increase by 12% in administrative costs mainly associated with larger expenses for personnel and maintenance of our technology platform, as well as the increase in brand activations (media and events);

• Increased expenses for taxes by 21% due to higher PIS/Cofins rates upon insurance operations;

• Reduction in the financial results caused by exchange variation on technical provisions for insurance and reinsurance;

• Loss in the affiliate company Allianz Saúde totaling BRL 151,048.

Costs, results of reinsurance, and operating and administrative expenses

The deferred acquisition costs involving commissions paid and other marketing expenses totaled BRL 266.7 million in 2015, a result 13.8% lower than in 2014. In the same period, net balance associated with other operating expenses dropped by 68.4% resulting from both a reduction in the ledger account for other operating revenue and, especially, the increase in other operating expenses. Net loss in reinsurance in 2015 was BRL 2.6 million, compared with the positive result of BRL 343.3 million in the previous fiscal period. Administrative expenses totaled BRL 471.7 million in 2015, representing an increase of 10.9% compared with 2014.

Net financial result

Net financial result in 2015 was positive in BRL 168.1 million, representing a result 18.8% lower than that recorded in 2014.

Net result

Net result for the period was negative by BRL 327.7 million in 2015, absorbed by the profit reserve. This result was mostly influenced by the appreciation of the dollar and the Brazilian and global economic scenario, both more noticeable after the month of July and with a direct impact on the automotive sector.

Variations in balance sheet accounts

On December 31, 2015, stockholders' equity for Allianz Seguros totaled BRL 917 million, and representative shares of the capital had equity value of BRL 915.65 per lot of 1,000 shares. At the end of 2014, stockholders' equity was BRL 872.8 million, with equity value at BRL 1,689.46 per lot of 1,000 shares. The company's current assets at the year-end closing in 2015 totaled BRL 3.15 billion, indicating a decline of 25.1% compared with the previous year Non-current assets grew by 28.7%, going from BRL 2.03 billion in 2014 to BRL 2.62 billion at the end of 2015. Current liabilities totaled BRL 3.53 billion on December 31, 2015, representing an increase of 27.8% compared with 2014. Long-term obligations, represented by non-current liabilities, reached BRL 1.31 billion at the end of 2015, compared with BRL 496.8 million in the previous year.