Based on various legal, regulatory and other operational issues associated with operating entities in jurisdictions worldwide, the in- surance segments of the Allianz Group are also further analyzed by geographical areas or regions in a matrix that comprises a number of profit and service-center segments. This geographic analysis is per- formed to provide further understanding of trends and results un- derlying the segment data. 

Property/Casualty The Allianz Group’s property/casualty segment provides automobile, homeowners, liability, travel insurance and as- sistance services and other personal lines insurance products. Addi- tionally, the Allianz Group provides commercial, industrial and credit coverages to business enterprises of all sizes. 

Life/Health The Allianz Group’s life/health segment provides en- dowment, fixed and variable annuities and traditional life insurance and a wide range of health, disability and related coverages to indi- vidual insureds. Additionally, the Allianz Group offers group-life, group-health and pension products to employers. 

Banking The Allianz Group’s banking segment provides traditional commercial banking products and services such as deposit-taking, lending (including mortgage lending), cash management and trans- action banking, as well as corporate finance advisory services, merg- ers and acquisitions advisory services, capital and money market serv- ices, securities underwriting and securities trading and derivatives business on its own account and for its customers. 

Asset Management The Allianz Group’s asset management segment provides equity, fixed income, money market, sector, geographic and a variety of other products and alternative investment vehicles to re- tail and institutional customers. 

## Explanation of the accounting and valuation policies differ- ing from German law 

The most important differences are summarized below: 

## Assets 

The definition of an asset is broader under IFRS rules than under the German Commercial Code (HGB). By its reference to the creation of future commercial benefit for the company without the prerequisite of an acquisition against payment, items such as brand names and software developed in-house also must be reported in the accounts under IFRS as assets. 

## Special funds 

Under IAS-SIC 12 all investment funds in which the Group has share- holdings in excess of 50.0% are included within the scope of con- solidation. Under the German Commercial Code (HGB) the units of special funds held are recognized in the balance sheet. 

## Shareholders’ equity 

Shareholders’ equity increases overall because 

_ trading assets and large proportions of the investments are shown in the balance sheet at market value, and 

_ insurance reserves in property and casualty insurance are lower un- der IFRS because they are not calculated in accordance with the prudence concept but are based on best-estimate future claims ex- perience. 

## Calculation of profit 

There are substantial differences between accounting treatment un- der IFRS rules and the German Commercial Law (HGB) in the case of investments, trading activities and reserves. The following sum- mary explains the most important aspects of IFRS which differ from HGB: 

Claims equalization reserves Claims equalization reserves and ma- jor risk reserves are not allowed under IFRS because they do not rep- resent a present obligation toward third parties. The net result for the year is not affected by transfers to or from such reserves. 

Claims reserves Claims reserves tend to be somewhat lower under IFRS because they are not calculated in accordance with the prudence concept but at the best estimate of the ultimate cost. 

Acquisition costs Under IFRS acquisition costs are capitalized and amortized over the term of the policy. 

