Fair value hierarchy

Assets and liabilities measured at fair value in the consolidated financial statements are measured and classified in accordance with the fair value hierarchy in IFRS13, which consists of three levels based on the observability of inputs within the corresponding valuation techniques used.

The fair value hierarchy levels are based on the type of inputs used to determine the fair value:

  • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
  • Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (i.e. quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; market-corroborated inputs).
  • Level 3 inputs are unobservable inputs for the asset or liability, which reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk (of the model used and of inputs used).

The fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. Assessing the significance of a particular input to the entire measurement requires judgement, taking into account factors specific to the asset or liability.

A fair value measurement developed using a present value technique might be categorised within Level 2 or Level 3, depending on the inputs that are significant to the entire measurement and the level of the fair value hierarchy within which those inputs are categorised.

If an observable input requires an adjustment using an unobservable input and that adjustment results in a significantly higher or lower fair value measurement, the resulting measurement would be categorised within the level attributable to the input with the lowest level utilized.

Adequate controls have been set up to monitor all measurements including those provided by third parties. If these checks show that the measurement is not considered as market corroborated the instrument must be classified in level 3.

The table shows the classification of financial assets and liabilities measured at fair value among the levels of fair value hierarchy as defined by IFRS13.

 31.12.2013
(€ million)Level 1Level 2Level 3Total
Available for sale financial assets 201,390 22,871 5,769 230,030
Equities 9,095 213 1,520 10,828
Bonds 179,934 20,086 1,970 201,989
Investment fund units 12,323 1,826 1,685 15,833
Other assets available for sale 38 747 595 1,380
Financial assets at fair value through profit or loss 42,839 28,292 1,763 72,893
Equities 140 142 1 283
Bonds 4,222 1,484 308 6,014
Investment fund units 4,229 109 53 4,391
Derivatives 275 1,105 1 1,382
Hedging derivatives 0 78 0 78
Investments back to policies where the investment riks is borne by the policyholders 33,410 24,698 1,009 59,116
Other assets at fair value through profit or loss 563 676 391 1,629
Totale assets at fair value 244,229 51,163 7,532 302,924
Financial liabilities at fair value through profit or loss 13,239 2,767 78 16,084
Financial liabilities related to investment contracts issued by insurance  companies 12,174 1,095 0 13,270
Derivatives 307 824 0 1,131
Hedging derivatives 1 815 78 894
Other financial liabilities 756 33 0 789
Totale liabilities at fair value 13,239 2,767 78 16,084
 31.12.2012
(€ million)Level 1Level 2Level 3Total
Available for sale financial assets 191,814 18,206 2,439 212,459
Equities 7,540 451 916 8,907
Bonds 176,554 13,762 34 190,350
Investment fund units 7,413 3,115 929 11,458
Other assets available for sale 307 879 559 1,745
Financial assets at fair value through profit or loss 42,187 25,392 843 68,423
Equities 70 145 1 216
Bonds 4,567 1,928 15 6,510
Investment fund units 3,838 43 115 3,995
Derivatives 261 1,526 0 1,786
Hedging derivatives 0 86 0 86
Investments back to policies where the investment riks is borne by the policyholders 32,792 20,790 259 53,842
Other assets at fair value through profit or loss 660 875 453 1,988
Totale assets at fair value 234,001 43,599 3,282 280,882
Financial liabilities at fair value through profit or loss 12,564 2,964 25 15,553
Financial liabilities related to investment contracts issued by insurance  companies 11,488 1,162 0 12,650
Derivatives 310 770 0 1,079
Hedging derivatives 0 1,003 25 1,028
Other financial liabilities 767 29 0 796
Totale liabilities at fair value 12,564 2,964 25 15,553
Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328