ALLIANZGROUP 24 The Allianz Group is managed and controlled according to the  principle of value-based management. The goal of our corporate policy is to consistently meet the expectations of our shareholders over the long term. We want shareholders, employees, customers and our social surroundings to profit from the value our company creates. What do we mean when we talk about the creation of wealth? The capital that is employed by the company must yield a higher return than a comparable alternative investment. In order to reach this objective, we apply the EVA ® (Economic Value Added) concept company-wide. Adapted to the specific requirements of our industry and the needs of Allianz, EVA ® determines our company’s economic goals. It provides a measure of our per- formance and plays an important role in setting the remunera- tion of management. comes negative, that means a shareholder would have received a greater return from another risk adequate investment than from Allianz shares. In this case, his investment has destroyed value instead of increasing it. With EVA ® , we have a measuring instrument that These considerations are important because they support value- based management of the Allianz Group and at the same time allow us to retain a decentralized structure. Why do we need decentralization? We are convinced that the management of our business entities worldwide is in the best position to determine what measures are appropriate for making their companies more profitable. They have to decide what risks they can take – for example, when they write insurance policies, extend loans, in- vest funds or make other managerial decisions – to generate a specific profit. The basic idea behind EVA ® involves comparing profit with the cost of capital. EVA ® – whether positive or negative – is the dif- ference between the two. It tells us whether or not our profits exceed the return expected by our shareholders. Thus, EVA ® is the result of the following calculation: The cost of capital represents the return an investor can expect from an alternative investment with comparable risk. An EVA ® greater than zero indicates that an added value for the share- holder has been created. If, on the other hand, the EVA ® be- Central and decentral elements Basic idea EVA ® = Profit – (Capital employed x Cost of capital) _  takes into account our industry-specific risks, and _  establishes a relationship between corporate profit and the mi- nimum return our investors expect from the capital they have invested. EVA$^{® }$is a registered Trademark of Stern Steward & Co. Economic Value Added (EVA$^{®}$): An all-encompassing steering and  coordination process Goodwill,  investor appeal,  secure employment Attractive products, growth,  employment Objectives,  measuring achievement ➤ ➤ ➤ ➤ Increase in value Acceptance  by society  Motivation Corporate  management Allocation of capital,  enhancement of  efficiency,  optimized risk profile EVA ®