Allianz SE · XETR:ALV
Allianz — FY2003 Earnings Presentation
181 slides from Allianz's earnings presentation, Mar 19, 2004
Slide 1: Analysts' Conference March 19, 2004
+ one Analysts’ Conference March 19, 2004
Slide 2: Agenda
Agenda A. 3 + one Michael Diekmann A 1 B. Group financial results 2003 Helmut Perlet B 1 C. Protect and enhance capital base Paul Achleitner C 1 D. Dresdner Bank: restructure and grow profitably Herbert Walter D 1 E. AGF Financial Services Laurent Mignon E 1 F. Index F 1 G. Appendix Glossary G 1 Inv
Slide 3: 3 + one
Michael Diekmann, CEO 3 + one Analysts’ Conference March 2004
Slide 4: The year 2003
A. 3 + one The year 2003 At the beginning Our agenda Today § Tight capital position and high Protect and enhance equity gearing 1 capital base What § Low operating profitability and turnaround cases Substantially strengthen was bad? § Complex business portfolio 2 operating profitability Reduce 3 com
Slide 5: Our track record 2003
A. 3 + one Our track record 2003 Issues 2003 What went right? What went wrong? AGF ✔ AGR ✔ Dresdner Bank § Administrative expenses ✔ § Loan-loss provisions ✔ § Operating profit ✘ § Net profit ✘ FFIC ✔ Allianz Life Korea ✘ Retrospective tax change L/H1 ✘ Rights issue ✔ BDF and MR cluster risk reducti
Slide 6: Protect and enhance capital base
A. 3 + one Protect and enhance capital base 1 Issue 2002 2003 Status Risk capital Shareholders’ surplus1 EUR 21.7bn EUR 28.6bn equity (in EUR bn) +13.5 +11.8 10,2 Equity 19% 16% ratio Capital adequacy 154% 172% ratio2 -0,5 -1.7 Solvency 163% 206% 2002 2003 ratio 1) According to internal model 2) Acc
Slide 7: Substantially strengthen operating profitability
A. 3 + one Substantially strengthen operating profitability 2 Segment 2002 2003 Status Operating profit Property/ 105.7% CR 97.0% CR (in EUR m) Casualty 10.0% statutory 7.9% statutory +4,512 +3,988 Life/Health expense ratio expense ratio* 96.7% 90.3% Banking CIR CIR Asset 78.5% 67.2% Management CIR
Slide 8: Reduce complexity
A. 3 + one Reduce complexity1 3 Status Sale of § Entenial, AGF Belgium Bank, Allianz Life Re non-strategic § Dresdner: sale of sub-custody, divestment of Divestments entities more than 30 non-core activities, liquidation (in EUR bn) of more than 100 non-strategic legal entities 1.9 1.9 § AMA New leg
Slide 9: Increase sustainable competitiveness and value: execution is key
A. 3 + one + Increase sustainable competitiveness and value: one execution is key! Disciplined process § Strong management commitment § Clearly defined measures Opportunity § Precise targets Success § Close monitoring § Performance-linked incentives A 6
Slide 10: Rejuvenated management team
A. 3 + one + Rejuvenated management team* one Holding Michael Diekmann, Jan Carendi, Herbert Walter Herbert Walter (Dresdner Bank), Thomas Pleines (Allianz Suisse), CEOs Andrew Torrance (Cornhill), Frank Levene (AZ Life Korea), Robert Franssen (Belgium) Ralf Jung (Dresdner), Stephan-Andreas Kaulvers
Slide 11: Top-management compensation aligned with Group targets
A. 3 + one + Top-management compensation aligned one with Group targets Stock-related compensation* Virtual shares (RSUs) Stock options (SARs) Stock-related compensation 35% (5-7 years time horizon) 3-year bonus 13% 3-year bonus (annual share) EVA targets Strategic targets 28% Annual bonus Annual bo
Slide 12: Strategic dialogue combines top-down and bottom-up approach
A. 3 + one + Strategic dialogue combines top-down one and bottom-up approach February March July November December Strategic Strategic Planning group analysis dialogue meetings Capital Communication Prioritization OE target Portfolio allocation of top-down of strategic setting decisions + dividend i
Slide 13: New comprehensive capital allocation process
A. 3 + one + New comprehensive capital allocation process one Capital Investment priorities Capital allocation § Current profitability High § Cash flow and dividends Long-term growth § Limited § Long-term perspectives – OE market position § Flexibility – Market attractiveness needed for – EVA potent
Slide 14: Snapshot of Allianz portfolio
A. 3 + one + Snapshot of Allianz portfolio one (in % of assigned capital1) Revenue Strategic Growers Outperformers growth +9% +8% +9% 5% 33% 25% 0% 8.15% 15% Underperformers RoRACN Optimizers -9% -1% -7% 25%2 3% 9% Ø revenue growth rate 2003 Goal § Better balance between Optimizers and Outperformers
Slide 15: Snapshot of Allianz portfolio
I.A. Kapitelüberschrift + Snapshot of Allianz portfolio one (in % of assigned capital1) Revenue Strategic Growers Outperformers growth +26% +11% +15% 15% 10% 1%* 5% Underperformers Optimizers +3% +4% +3% 18% 15% 4%* 0% 8.15% 15% -9% -1% -7% RoRACN 3% 9% 25%2 Ø revenue growth rate 2003 Goal § Better
Slide 16: Key tool: Allianz Group dividend model
A. 3 + one + Key tool: Allianz Group dividend model one Dividends > CoC External Optimizers growth Debt Dividends = CoC Allianz AG reduction Outperformers Dividends Individual targets Underperformers Debt service Strategic Holding growers expenses Tied capital § Clear dividend targets for all Group
Slide 17: Market position strengthened by selective investments and JVs
A. 3 + one + Market position strengthened by selective one investments and JVs PIMCO § Increase of PIMCO stake from 70% to 83.9% at end of 2003 minorities = Rationale: increase of interest in highly successful operation § Italy: acquisition of CAMI1 with ~200 financial advisors Financial § Italy: ac
Slide 18: The IFSP concept: encouraging development, promising potential
A. 3 + one + The IFSP* concept: encouraging development, one promising potential Status Distribution Driving factors Germany Agents Branches for cross selling: Customers 16m 5m § Training and remuneration Points of sale 10,700 940 of sales force § Strong demand / need for Insurance comprehensive adv
Slide 19: IFSP: bank branches have quadrupled insurance sales
A. 3 + one + IFSP: bank branches have quadrupled one insurance sales in less than three years New business life plus non-life Annual Business business value (in value EUR(in EUR m)1 m)* Number of contracts 2000 2000 2001 2001 2002 2002 2003 2000 2000 2001 2001 2002 20022003 181,999 173,475166,771 5,
Slide 20: IFSP: the corporate pension success story continues
A. 3 + one + IFSP: the corporate pension success story continues one (in EUR bn) Allianz Leben: new business value1 ADAM (dbi)2: institutional inflows Private pensions Total net inflows3 +29.2% 25.2% Corporate pensions 22.2 Market share net inflows3 19.5% 16.1 13.3 11.3 +5.3% 9.9 10.2 6.9 4.1% 5.4 1
Slide 21: IFSP: Allianz agents doubled sales of mutual funds in 2003
A. 3 + one + IFSP: Allianz agents doubled sales of one mutual funds in 2003 Net inflows in German securities mutual funds Net inflows from Allianz distribution (EUR m) Follow-up business2 Allianz agents 1 702 Real estate 506 520 +35% 177 EUR 0.2bn +3% Allianz 249 257 +100% 14.1% distribution +2% 525
Slide 22: CEE: strong presence in Central and Eastern Europe
A. 3 + one + CEE: strong presence in Central and one Eastern Europe Market position § EUR 2bn GPW (thereof 86% non-life) Slovakia 1 § 11% market share - second largest insurer Hungary 1 overall and largest international insurer 3 § Among top 3 position in each market - except Romania 1 Poland § More
Slide 23: CEE: promising growth prospects
A. 3 + one + CEE: promising growth prospects one 2003 Allianz GPW growth rates Expected market GPW CAGR 2003 - 2008* § Insurance 28% Romania +24.3% § Insurance in countries with Russia +23.3% largest populations: Slovakia +16.5% – Romania 42% Croatia +13.7% – Russia 41% Bulgaria +12.9% – Poland 21%
Slide 24: We will continue to deliver
A. 3 + one We will continue to deliver Protect and enhance capital base 1 § Maintain strong rating compared to peers § Align all processes according to internal economic risk capital allocation model Substantially strengthen operating profitability § P/C: target combined ratio approximately 97% in 2
Slide 25: Today's presentations
A. 3 + one Today’s presentations To do’s Today’s presentations § Michael Diekmann 1 Protect and enhance capital base 3 + one § Helmut Perlet 2 Substantially strengthen operating profitability Group financial results 2003 § Paul Achleitner 3 Reduce complexity Protect and enhance capital base + § Herb
Slide 26: B. Group financial results 2003
Helmut Perlet - Board member Allianz AG B. Group financial results 2003 Analysts’ Conference March 2004
Slide 27: Where do we come from?
B. Group financial results 2003 Where do we come from? ! Have we achieved what we were aiming for? “3 plus 1” program was set up to respond to the challenges we were confronted with in early 2003 Today, we would like to review to what extent our goals have been met B 1
Slide 28: Key developments 2003
B. Group financial results 2003 Key developments 2003 ! 12M 2003 § Operating profit1 improved by EUR 4.5bn – Administrative expense reduction of EUR 1.9bn (EUR 0.5bn F/X-effect) – Turnarounds at FFIC and AGR achieved, significant progress made at AGF and Dresdner Bank § Shareholders’ equity strength
Slide 29: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 30: Substantially strengthened operating profitability
B. Group financial results 2003 Where do we stand: substantially strengthened operating profitability ! Total revenues Expenses1 Operating profit Net profit (EUR bn) (EUR m) (EUR m) (EUR m) +1.3% -12.3% +4.5bn +2,845 92.6 93.8 3,988 1,616 15,558 13,646 Internal growth: 6.4% -524 -1,229 2002 2003 200
Slide 31: Considerable internal growth
B. Group financial results 2003 Considerable internal growth Total revenues1 (EUR bn) Total growth Internal growth2 92.6 93.8 2.3 2.2 -2.8% 14.7% AM AM Banking 7.6 6.5 Banking -13.9% -6.4% L/H 40.1 42.3 L/H 5.4% 10.9% P/C 0.4% 4.0% Total insurance 2.8% 7.3% P/C 42.5 42.7 growth 12M 2002 12M 2003 Tot
Slide 32: Operating profit increased by EUR 4.5bn
B. Group financial results 2003 Operating profit1 increased by EUR 4.5bn EUR m Op. profit 12M 2003 Changes vs. 12M 2002 Comments 2,825 2,517 § Combined ratio improved to 97% P/C § Increase in investment income L/H 1,111 434 § Stat. expense ratio down 2.1%-p § Administrative expenses lowered by EUR 1
Slide 33: Absolute expenses reduced by EUR 1.9bn despite growing business
B. Group financial results 2003 Absolute expenses reduced by EUR 1.9bn despite growing business Main expense drivers Evolution of expenses (EUR m)1 § Personnel expenses reduced -12.3% by EUR 993m 15,558 § Non-personnel expenses Asset Management 1,812 13,646 reduced by EUR 919m -15.3% 1,535 § EUR 0.5
Slide 34: Return on equity much improved
B. Group financial results 2003 Sustainable enhancement of competitiveness and value creation: return on equity much improved Comprehensive IFRS RoE b/Gdw.1 RoACN2 (old model) RoRACN3 (new model) +44.2%-p +8.6%-p +9.5%-p 11.8% 12.6% 11.8% 3.2% 3.1% -32.4% 2002 2003 2002 2003 2002 2003 Clearly improv
Slide 35: 69% of assigned capital earns more than its cost of capital
B. Group financial results 2003 69% of assigned capital earns more than its cost of capital Assigned capital and RoACN1 (old model) RoACN 50% 2002A 2003A 40% 15,0% § 35% of capital earns more 8,15% CoC than 15% RoACN 30% 35% § 69% of capital (AC) earns more than its cost of capital2 20% 69% Banking
Slide 36: Quarterly key figures
B. Group financial results 2003 Quarterly key figures Total revenues (EUR bn) Operating profit (EUR m) Net income (EUR m) 2002 Q1 25.4 Q1 349 Q1 1,914 Q2 21.8 Q2 605 Q2 -372 Q3 21.8 Q3 -1,684 Q3 -2,516 Q4 23.5 Q4 206 Q4 -255 2003 Q1 27.6 Q1 829 Q1 -546 Q2 21.9 Q2 1,3391 Q2 595 Q3 21.6 Q3 939 Q3 372
Slide 37: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 38: P/C: key developments
B. Group financial results 2003 P/C: key developments Operating profit (EUR m) § Controlled internal growth (4.0%) +817% 2,825 § Combined ratio lowered by 8.7%-p to 97% § Turnarounds FFIC and AGR successfully 308 completed 2002 2003 § Operating profit improved by EUR 2.5bn Net income (EUR m) -37.5%
Slide 39: P/C: significant internal GPW growth of 4.0%
B. Group financial results 2003 P/C: significant internal GPW growth of 4.0% Growth drivers Gross premiums written (EUR bn) § Expansion strategy in growth markets in Eastern 43.3 43.4 Europe: Total premiums 42.1 increased by 24.3% § New business success, e.g. in 8.6 Spain, total premiums up by 12.8%
Slide 40: P/C: combined ratio already better than original target
B. Group financial results 2003 P/C: combined ratio already better than original target of 100% Claims ratio drivers Combined ratio (in %) Adjustments1 § Risk-adjusted pricing, premium increases Combined 105.0 108.8 105.7 97.0 ratio § “Clearing up” of in-force business (unadjusted) 4.4 4.0 § Improve
Slide 41: P/C: turnarounds achieved for FFIC and AGR
B. Group financial results 2003 P/C: turnarounds achieved for FFIC and AGR Claims ratio (Ratios in %) Expense ratio Fireman’s Fund ✔ Allianz Global Risks1 ✔ AGF2 § Progress, target achieved, but turnaround not yet completed CR in continued 128.6 lines: 88.3% (YTD) 126.3 112.3 99.4 2003 2003 102.8 20
Slide 42: P/C: realized gains raised investment income
B. Group financial results 2003 P/C: realized gains, especially from Beiersdorf sale, raised investment income considerably EUR m 4.2% 5,854 Total yield Current yield: thereof equities: 2.5% 6.6% thereof bonds: 4.5% -1,452 6,495 -1,385 5,765 -885 3,634 Current Realized Write-ups/ Trading Expenses Co
Slide 43: P/C: improvement of operating profit
B. Group financial results 2003 P/C: improvement of operating profit EUR m 1,156 -110 2,825 31 115 145 37 148 235 352 408 308 Total SGD AGR Euler AGF Italy Spain UK AMA FFIC Other Total 2002 Hermes 2003 B 17
Slide 44: P/C: quarterly development of 2003 key figures
B. Group financial results 2003 P/C: quarterly development of 2003 key figures (in EUR bn) Gross premiums written Combined ratio (in %) Operating profit 14.6 97.7 96.4 96.5 97.5 1.0 0.8 9.5 10.1 9.2 0.6 0.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q21 Q3 Q4 1) Includes majority of external dividends received in 2
Slide 45: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 46: L/H: key developments
B. Group financial results 2003 L/H: key developments Profit b/taxes, goodwill, minorities (EUR m) § Strong internal growth (10.9%) +1,292% 1,155 § Profit before taxes, goodwill, minorities at EUR 1,155m; Major profit drivers: - Italy + EUR 253m 83 - France + EUR 201m - Allianz Life US + EUR 154m 20
Slide 47: L/H: operating improvements, but still low investment result
B. Group financial results 2003 L/H: operating improvements, but still relatively low investment result 2000 2001 2002 2003 Comments Statutory premiums CAGR § Considerable growth, also in established markets, 10.9% e.g. Italy (+19.2%) and Spain (+10.8%). In 40.2 42.3 31.0 33.7 Germany strong growth
Slide 48: L/H: improvement of operating profit
B. Group financial results 2003 L/H: improvement of operating profit EUR m 77 31 106 27 1,111 333 -26 -114 677 Total AGF Allianz RAS Allianz Allianz Allianz Other Total 2002 Switzerland Leben Life Korea 2003 B 22
Slide 49: L/H: less impairment charges and realized losses
B. Group financial results 2003 L/H: less impairment charges and realized losses lead to improvement EUR m Current yield: 5.1% thereof equities: 3.1% Total yield thereof bonds: 5.2% 4.1% +10,843 +9,769 -365 +112 +8,788 -1,411 -390 Current Realized Write-ups/ Trading Expenses Contribution Segment inc
Slide 50: L/H: effect of extraordinary items
B. Group financial results 2003 L/H: effect of extraordinary items Goodwill depreciation Korea (EUR -224m) Profit before taxes, 1,155 § Low interest rate environment leads to reduced goodwill, minorities expectations for future earnings Goodwill § Extraordinary depreciation of goodwill accounts -398
Slide 51: Allianz Life Korea actively tackles the burdens of the past
B. Group financial results 2003 Allianz Life Korea actively tackles the burdens of the past Background Key financials (in EUR m) Turnaround initiatives 2002 2003 2004P § Redesigning products with focus on profitability – Repricing by increasing expense loading Statutory – Shifting product emphasis f
Slide 52: Allianz is improving underlying profitability of its life business
B. Group financial results 2003 Allianz is improving the underlying profitability of its life business Allianz reaction § Develop products with low/ no interest sensitivity Product § Promote regulatory changes (reduction of guaranteed policy rates, more flexible use of terminal bonus, etc.) § Stop s
Slide 53: Life: value of new business by regions
B. Group financial results 2003 Life: value of new business written after minorities by regions (in EUR m) Value of new business at issue before and after cost of assigned capital 2003 2002 § Germany: higher long term shareholder participation NB NB Margin NB NB Margin assumed in the EV model leads
Slide 54: L/H: quarterly development of 2003 key figures
B. Group financial results 2003 L/H: quarterly development of 2003 key figures Total revenues (in EUR bn) Stat. expense ratio (in %) Operating profit (in EUR bn) 11.7 0.4 10.7 9.7 10.4 8.6 9.5 0.3 0.3 7.3 5.8 0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 B 28
Slide 55: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 56: Dresdner Bank: key developments
B. Group financial results 2003 Dresdner Bank: key developments Operating result1 (EUR m) § Operating result improved by EUR 1.7bn § Adjusted for deconsolidations (esp. Dt. Hyp), IRU -1,248 + 519 -728 operating revenues decreased by 7.8% § RWA reduction (21.6%) ahead of plan § Cost-cutting target ex
Slide 57: Dresdner Bank: positive operating profit ex IRU
B. Group financial results 2003 Dresdner Bank1: positive operating profit in Dresdner Bank ex IRU (in EUR m) Operating profit 354 447 248 268 -7822 -728 -460 PBC CB DrKW Corporate DreBa IRU Total items ex IRU § PBC: Strong improvement in particular due to higher fee & commission income, cost cutting
Slide 58: Dresdner Bank: operating revenues declined by 7.8%
B. Group financial results 2003 Dresdner Bank1: operating revenues declined by 7.8%, adjusted for deconsolidations (in EUR m) Revenue drivers - 7.8% +0.16%-p § Negative F/X impact Operating revenues 6,824 Net interest of EUR 201m due to 6,293 margin (in %)2 2.35 2.51 weak USD and GBP § IAS 39 effect
Slide 59: Dresdner Bank: cost-cutting target exceeded
B. Group financial results 2003 Dresdner Bank1: cost-cutting target exceeded Expense drivers Operating expenses (EUR m) § Operating expenses declined by 16% due Operating cost- 100.1 to tough cost-management income ratio 91.2 (in %) § Personnel expenses reduced by 14.1% 6,830 due to lower headcount
Slide 60: Dresdner Bank: net loan-loss provisions more than halved
B. Group financial results 2003 Dresdner Bank1: net loan-loss provisions more than halved, coverage ratio increased Risk-provision drivers Net loan-loss provisions (EUR m) Net loan-loss 74.0 provisions/net interest income § LLP significantly reduced and (in %) 42.1 below budget -52.9% § More than 80
Slide 61: Dresdner Bank: EUR 1.9bn strain from non-operating result
B. Group financial results 2003 Dresdner Bank1: EUR 1.9 bn strain from non-operating result still masks improvement in operating profit Drivers of non-operating Non-operating result result (EUR m) (EUR m) § Other non-operating result 5152 2003 burdened by extraordinary charges § Investment result 20
Slide 62: Dresdner Bank: risk capital and RWA significantly reduced
B. Group financial results 2003 Dresdner Bank: risk capital and RWA significantly reduced, capital ratios improved (in EUR bn) Risk-weighted assets (BIS)1 Risk capital1 IRU DreBa ex IRU -21.6% -24.1% 142.5 10.8 111.7 -53.1% 8.2 19.9 -48.7% IRU 3.2 10.2 CI 1.2 1.5 -11.8% 2.1 122.6 DrKW 3.0 -17.2% 7.6
Slide 63: Dresdner Bank: quarterly development of 2003 key figures
B. Group financial results 2003 Dresdner Bank1: quarterly development of 2003 key figures Op. revenues (EUR bn) Operating CIR2 (in %) Operating profit (EUR m) 1.9 106.8 1.6 100.3 63 1.4 1.4 85.2 78.1 -108 -118 -297 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1) Contribution to Allianz banking segment 2) Ope
Slide 64: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 65: Asset Management: key developments
B. Group financial results 2003 Asset Management: key developments Cost-income ratio (in%) -11.3%-p § Strong third-party net inflows of 78.5 EUR 25bn 67.2 § Cost-income ratio further lowered by 11.3%-p § Operating profit increased by EUR 238m 2002 2003 or 48.1%. Adjusted for currency effects and dec
Slide 66: Asset Management: assets under management further increased
B. Group financial results 2003 Asset Management: assets under management further increased Drivers of AuM development Third-party AuM (EUR bn) § Third-party AuM increased Third-party AuM 561 by EUR 4bn (EUR 72bn (as of 31/12/02) F/X adjusted) Net inflow 25 § Third-party net inflows at 4.4% of AuM (
Slide 67: Asset Management: strong improvement of operating result
B. Group financial results 2003 Asset Management: strong improvement of operating result Operating revenues drivers 2002 2003 § Operating revenues decreased by Operating revenues 2,302 2,238 2.8% from EUR 2.3bn to EUR 2.2bn due to negative US-Dollar effect. Operating expenses -1,807 -1,505 Without F
Slide 68: Asset Management: ADAM reduced operating expenses
B. Group financial results 2003 Asset Management: ADAM has significantly reduced operating expenses over the last year EUR m 1,807 -53 -25 -96 -56 -37 -35 1,505 Operating Personal IT- G&A Marketing Depreciation Other Operating expenses costs expenses expenses expenses 2002 2003 B 42
Slide 69: Asset Management: quarterly development of 2003 key figures
B. Group financial results 2003 Asset Management: quarterly development of 2003 key figures Op. revenues (EUR m) Cost income ratio (in %) Operating profit (EUR m) 633 573 208 205 545 488 71.9 183 66.4 67.1 64.2 137 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 B 43
Slide 70: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 71: Group asset allocation: equity exposure significantly reduced
B. Group financial results 2003 Group asset allocation: equity exposure significantly reduced Development asset allocation (in %) Equities Real estate Fixed income Other Equity gearing 2003 (EUR bn) 3 3 3 4 § Shareholder exposure: 25.0 66 44 55 44 § NAV ex goodwill: 17.8 § Goodwill: 12.4 " Gearing:
Slide 72: Group assets per year-end 2003
B. Group financial results 2003 Group assets per year-end 2003 (in EUR bn) Total in % P/C in % L/H in % Bank in % AM in % Equity 55.4 16.4 19.0 21.3 26.2 11.8 10.1 38.3 0.1 10.9 Fixed income 255.3 75.6 55.0 61.4 184.7 83.6 15.2 57.4 0.5 80.6 Real estate 13.8 4.1 4.7 5.2 8.0 3.6 1.1 4.3 0.0 0.5 Other
Slide 73: High-quality fixed-income portfolio in insurance
B. Group financial results 2003 High-quality fixed-income portfolio in insurance (in %) AAA 34 AA 33 Investment grade (92%) A 20 BBB 6 Non investment 1 grade Not rated 7 B 47
Slide 74: Net impairments on available for sale clearly decreased
B. Group financial results 2003 Net impairments on „available for sale“ clearly decreased (in EUR m) Write-ups Impairments Net 2002 679 -5,523 -4,844 2003 2,031 -4,823 -2,792 Q1 252 -2,330 -2,078 Q2 754 -758 -4 Q3 539 -730 -191 Q4 486 -1,005 -519 2003: § Release of management judgements § Additional
Slide 75: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 76: Where do we stand: protect and enhance the capital base
B. Group financial results 2003 Where do we stand: protect and enhance the capital base ! IFRS Equity (EUR bn) Risk capital surplus1 (EUR bn) +EUR +31.9% 13.5 28.6 21.7 11.8 -1.7 2002 2003 2002 2003 Equity was increased by Increased capital base, EUR 6.9bn, despite negative reduced risk exposure cur
Slide 77: IFRS equity increased by EUR 6.9bn despite F/X effects
B. Group financial results 2003 Despite negative F/X effects, IFRS equity has increased by EUR 6.9bn EUR m 2,454 1,616 28,592 4,562 -14 -1,699 21,673 Unrealized Unrealized 1.0 4.31 gains/losses (EUR bn) gains/losses (EUR bn) Equity Rights issue Change in Currency Net Other Equity 31/12/2002 unrealiz
Slide 78: Revaluation reserve around EUR 17.5bn
B. Group financial results 2003 Revaluation reserve around EUR 17.5bn (in EUR bn) Off balance sheet Revaluation reserve On balance sheet Shareholders’ share Policyholders’ share 1.6 (34.7%) 2.2 (47.4%) 17.5 Real 4.0 estate 0.7 At equity Minorities 6.8 0.3 (6.5%) Available 0.7 12.8 for sale 1.2 Defer
Slide 79: Risk-adjusted capital requirements have considerably decreased
B. Group financial results 2003 Risk-adjusted capital requirements have considerably decreased Measures Required risk-adjusted capital (EUR bn) § Reduction of equity share in investment RAC 2002 43.5 portfolio following a “risk on excess” strategy Equity investment risk1 -2.4 § Credit risk: Pro-acti
Slide 80: Allianz Group risk capital: required vs. available funds
B. Group financial results 2003 Allianz Group risk capital: required vs. available funds (in EUR bn) Required risk-adjusted capital Required vs. available Available funds Surplus Risk categories EUR 11.8bn Shareholders’ equity 28.6 Market/ALM 16.2 Minorities 8.4 47.3 Credit/counterparty 6.2 Hybrid C
Slide 81: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 82: Agenda: where do we stand
B. Group financial results 2003 Agenda: where do we stand I. Substantially strengthen operating profitability § Group § P/C § L/H § Banking § Asset Management § Investment income II. Protect and enhance capital base III. Streamline portfolio and reduce complexity IV. Increase sustainable competitive
Slide 83: Summary: we have delivered on what we promised
B. Group financial results 2003 Summary: All in all, we have delivered on what we promised ! § “Across-the-board” cost reduction § Operating profit EUR 4.0bn § Significant progress of all (ex-)turnaround cases ✔ § Shareholders’ equity increase by EUR 6.9bn § Lower equity exposure and better diversif
Slide 84: Additional information
B. Group financial results 2003 Additional information B 58
Slide 85: Key figures and ratios: overview
B. Group financial results 2003 Key figures and ratios: overview (in EUR m) 12M 02 12M 03 ∆ 03/02 Total revenues1 (EUR bn) 92.6 93.8 +1.3% Operating profit -524 3,988 n/m Net capital gains 5,444 4,657 -14.5% Net impairments -3,232 -1,960 -39.4% Other -1,835 -2,744 49.6% Profit before goodwill amorti
Slide 86: Breakdown of profit consolidations
B. Group financial results 2003 Breakdown of profit consolidations - profit before goodwill amortization, taxes, minorities EUR m 199 26 1,435 393 817 Intra-group Gains from Other income/ Other Total dividends intra-Group expenses from consolidations transactions investments1 of shares1 1) Including
Slide 87: Considerable improvements in operating profit across all segments
B. Group financial results 2003 Considerable improvements in operating profit across all segments (in EUR m) Asset Con- Total P/C L/H1 Banking Mgmt. solidation 12M 12M 12M 12M 12M 12M 12M 12M 12M 12M 12M 12M 02 03 02 03 02 03 02 03 02 03 02 03 Profit before taxes and minorities 7,554 5,509 -91 757 -
Slide 88: P/C: key figures and ratios
B. Group financial results 2003 P/C: key figures and ratios (in EUR m) 12M 2002 12M 2003 ∆ 03/02 4Q 2003 ∆ 4Q 03/02 Net income 7,207 1 4,506 -37.5% 3,248 +155.5% Gross premiums written 43,294 43,420 +0.3% 9,222 -4.9% Investment result 11,734 6,495 -44.6% 4,315 +115.9% Investment result adjusted1 7,8
Slide 89: Most P/C combined ratios further improved
B. Group financial results 2003 Most P/C combined ratios further improved (in %) Combined ratio (in %) Combined ratios 12M 02 12M 03 Combined SGD (German P/C Group) 101.5 93.0 ratio 105.0 108.8 105.7 97.0 (unadjusted) Allianz AG2 102.9 100.2 4.4 4.0 RAS Group Italy 100.7 97.0 Claims Lloyd Adriatico
Slide 90: P/C earnings contribution by company/region
B. Group financial results 2003 P/C earnings contribution by company/region1 (in EUR m) 12M 2002 12M 2003 ∆ 03/02 Allianz AG 8,736 4,569 -47.7% SGD 1,702 392 -77.0% AGF France 383 294 -23.2% Italy 842 402 -52.3% Cornhill 237 199 -16.0% Allianz Spain 62 97 +56.5% Fireman’s Fund -666 155 n/m Allianz S
Slide 91: L/H: key figures and ratios
B. Group financial results 2003 L/H: key figures and ratios (in EUR m) 12M 2002 12M 2003 ∆ 03/02 4Q 2003 ∆ 4Q 03/02 19 Net income -48 -352.6% -302 n/m Statutory premiums 40,176 42,319 +5.3% 11,720 +0.8% IFRS premiums 20,663 20,689 +0.1% 5,965 -0.2% Investment result 7,445 9,769 +31.2% 3,300 +172.1%
Slide 92: L/H earnings contribution by company/region
B. Group financial results 2003 L/H earnings contribution by company/region1 (in EUR m) 12M 2002 12M12M 200303 ∆ 03/02 Germany Life 80 -50 -162.5% Allianz PKV 64 5 -92.2% Italy 289 221 -23.5% AGF France2 -223 191 n/m AZ Suisse -80 -9 n/m Allianz Life USA -18 165 n/m AZ Life Korea 2 -57 -2,950.0% 1)
Slide 93: Banking segment: key figures
B. Group financial results 2003 Banking segment: key figures (in EUR m) 12M 2002 12M 2003 ∆ 03/02 Net interest income 3,827 2,805 -1,022 Net commission & fee income 2,658 2,452 -206 Trading income 1,081 1,486 +405 Operating income 7,566 6,743 -823 Administrative expenses -7,314 -6,086 +1,228 Loan lo
Slide 94: Dresdner Bank - IRU: substantial progress in 2003
B. Group financial results 2003 Dresdner Bank - IRU: substantial progress in 2003 Objectives Loan exposure (EUR bn) § Exit loan exposure 34.1 of EUR 10bn before end of 2004 24.1 17.3 Ahead of plan 6.8 16.7 0.6 17.3 5.1 11.6 20021 Exits in 2003 Investm.- + oth. Potential Non-perf. Original2 2003 non-
Slide 95: Dresdner Bank: key figures and ratios
B. Group financial results 2003 Dresdner Bank1: key figures and ratios account for re-grouping of activities into IRU (in EUR m) 12M 2003 PBC CB DrKW Corp. DreBa ex IRU Total Items IRU 447 354 248 268 Operating profit -460 -782 2 -728 Net interest income 1,528 694 355 -653 1,924 488 2,412 Net commis
Slide 96: Dresdner Bank: RWAs reduced, core capital ratio 6.6%
B. Group financial results 2003 Dresdner Bank: RWAs significantly reduced and core capital ratio improved to 6.6% RWA1 at end of period in EUR bn (BIS) 185.5 181.7 151.3 142.5 134.1 132.5 121.9 111.7 1Q 02 2Q 02 3Q 022 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 Core capital 5.5% 5.6% 6.2% 6.0% 6.3% 6.3% 6.8% 6.6
Slide 97: Assets under management
B. Group financial results 2003 Assets under management (in EUR bn) Assets under Third party management Group investments Unit linked 996 32.5 (5.4%) Other1 597 13.0 (3.9%) Real estate 13.8 (4.1%) Asset management 61 Trading2 564.7 (94.6%) Equity 55.4 (16.4%) 338 Fixed income 255.3 (75.6%) 1) E.g. f
Slide 98: Goodwill
B. Group financial results 2003 Goodwill (in EUR m) Goodwill acquired/dispatched 13,786 557 PIMCO Advisors 624 12,370 -560 RAS 146 -1,189 -224 AFORE -124 Others -89 Total 557 Goodwill Currency Net Scheduled Impairment Goodwill 31/12/2002 translation acquisi- amortization Korea 31/12/2003 tions B 72
Slide 99: Taxes
B. Group financial results 2003 Taxes (in EUR m) 2002 2003 Comments Current income taxes -844 -1,510 Increase in tax charge is due to – increase of operating income Deferred income taxes 1,686 1,435 – change in German tax law for life and health insurance companies Income taxes 842 -75 Other taxes -
Slide 100: Increase in EPS
B. Group financial results 2003 Increase in EPS (in EUR) Basic EPSR1 EPSA1 before goodwill Number Unweighted Weighted depreciation of shares outstanding outstanding # of shares at beginning of year 242,977,214 242,977,214 Valuation adjustment 2 - 11,320,660 Capital increase 117,187,500 78,981,164 8.
Slide 101: Allianz Group solvency
B. Group financial results 2003 Allianz Group solvency1: more than twice the required funds (in EUR bn) Required funds (EUR bn) Required vs. available Available funds Shareholders’ equity 28.6 Solvency ratio: 206.3% Subdebts 1.0 Participations 0.1 (0.8%) Free RfB2 3.3 26.0 Goodwill, intangibles -6.1
Slide 102: Allianz AG: certified liabilities by maturity and interest paid
B. Group financial results 2003 Allianz AG: certified liabilities by maturity and interest paid (in EUR m) Certified liabilities by maturities Outstanding bonds of Allianz AG* Nominal values Overview 2004 990 Volume Interest paid (EUR bn) 2003 2005 1700 962 2,662 2006 1075 Senior straight bonds 5.7
Slide 103: Value management: RoACN of major P/C operations
B. Group financial results 2003 Value management: RoACN* of major P/C operations (in %) Before minorities 37.5 30.1 31.8 26.1 21.3 19.7 17.9 18.4 18.6 13.4 13.9 11.9 12.1 12.5 13.2 9.2 5.1 5.3 Assigned capital before minorities 2003 (in EUR bn) 0.2 0.8 2.6 0.4 2.1 0.2 0.4 1.5 1.1 20.8 0.9 0.3 0.6 2.
Slide 104: Value management: RoACN of major L/H operations
B. Group financial results 2003 Value management: RoACN* of major L/H operations (in %) Before minorities 31.0 17.0 17.9 15.4 12.5 13.3 11.3 11.6 9.1 0.9 1.7 Assigned capital before minorities 2003 (in EUR bn) 0.6 0.6 1.5 10.8 2.9 1.7 0.3 0.2 1.2 0.6 0.2 a um y n o KV in e re tal be tic ca iss pa H
Slide 105: Embedded value of Allianz's life operations
B. Group financial results 2003 Embedded value of Allianz’s life operations B 79
Slide 106: The Allianz embedded value framework for life business
B. Group financial results 2003 The Allianz embedded value framework for life business Before minorities Assigned capital (AC) Embedded value + Present value of future profits (PVFP) (EV) – Cost of assigned capital (CAC) Assigned capital Capital tied in to life business (S & P capital adequacy model
Slide 107: Overview of economic assumptions used for projections
B. Group financial results 2003 Overview of economic assumptions used for projections (in %) Embedded value 2003 economic assumptions for selected countries Country Risk discount Return on Equity return Tax rate (after tax) government bonds (pre tax) rate (pre tax)1 Germany 8.15 4.3 8.5 39.90 France
Slide 108: Life: embedded value after minorities
B. Group financial results 2003 Life: embedded value after minorities (in EUR m) Per region and by components PVFP - CAC AC 11,657 PVFP: 6,888 4,738 CAC: 2,150 3,232 2,372 6,919 2,102 1,997 2,121 1,489 829 803 702 465 495 1,111 1,299 994 1,295 1,543 677 - 212 Germany France Italy Other USA1 Rest of
Slide 109: New business values and margins
B. Group financial results 2003 New business (NB) values and margins before and after cost of capital net of tax and minorities (in EUR m) New business 2003 2002 Delta before CAC NB Value 501 456 +10% 1,651.2 NB Margin 2.17% 2.15% +0.02%-p NB APE Margin* 15.5% 13.6% +1.9%-p 2,294.6 New business 2003
Slide 110: Life: value of new business by regions
B. Group financial results 2003 Life: value of new business written after minorities by regions (in EUR m) Value of new business at issue before and after cost of assigned capital 2003 2002 § Germany: Higher long term shareholder participation NB NB Margin NB NB Margin Value (%) Value (%) assumed in
Slide 111: EV model change to include unrealized capital gains
B. Group financial results 2003 Allianz has changed its EV model to include the value of unrealized capital gains within the PVFP Initial Adjustments Adjustment Value Description Valuation of UCG within PVFP 896 Until 2002 the value of unrealized capital gains on assets backing P/H liabilities was g
Slide 112: Movement analysis of embedded value
B. Group financial results 2003 Movement analysis of embedded value after minorities (in EUR m) 2003 2002 EV published 10,977 9,559 Initial adjustments 573 583 Revised start value 11,550 10,142 Unwinding of discount rate 935 874 Non-economic variances and assumption changes -57 -251 In-force operati
Slide 113: Sensitivities on value of in-force
B. Group financial results 2003 Sensitivities on value of in-force for Allianz’s share in selected countries (in EUR m) PVFP-CAC Country Base case - 1 %-p in total - 1 %-p in - 1 %-p in Using statutory investment equity risk discount solvency yield yield rate capital Germany 2,121 -130 -17 238 0 Fra
Slide 114: Comparison of PVFP to IFRS equity
B. Group financial results 2003 Comparison of PVFP to IFRS equity IFRS amounts in DAC/VOBA exceed statutory DAC/VOBA levels included in PVFP Aggregate IFRS life technical and UPR Difference in reserves reserves exceed statutory reserves used in PVFP modeling. Aggregate amounts of unrealized capital
Slide 115: Reconciliation of PVFP to IFRS equity
B. Group financial results 2003 Reconciliation of PVFP to IFRS equity (in EUR m) PVFP - CAC 4,738 Adjust for – IFRS DAC / VOBA -7,282 – Difference in life and UPR reserves 6,416 – S/H value of UCG included in PVFP -1,427 – Net amount of Asset Valuation differences 400 – Other adjustments -264 Additi
Slide 116: Review of embedded value methodology
B. Group financial results 2003 Review of embedded value methodology Tillinghast has reviewed certain aspects of the 2003 embedded value results for the eight main operating countries of the Allianz Group (Germany, France, USA, Italy, Korea, Switzerland, Belgium and Spain). The review covered the em
Slide 117: C. Protect and enhance capital base
Paul Achleitner - Board member Allianz AG C. Protect and enhance capital base Analysts’ Conference March 2004
Slide 118: Actions taken
C. Protect and enhance capital base Actions taken 1 Capital raised 2 Non-strategic portfolio cleaned up 3 Munich Re cross-holdings unwound 4 Equity exposure reduced 5 Investment policy changed 6 Capital allocation tightened 7 Dividend policy sustained C1
Slide 119: Capital raised (1): EUR 4.4bn rights issue
C. Protect and enhance capital base Capital raised (1): successful completion of EUR 4.4bn rights issue Actions taken Allianz share price development since 20/03/20031 ✔ Allianz Share +87% 1 Capital raised 120 100 DJ EURO STOXX Insurance 80 60 +45% 40 20 0 03/2003 06/2003 09/2003 12/2003 Comments §
Slide 120: Capital raised (2): first hybrid bond issue
C. Protect and enhance capital base Capital raised (2): first hybrid bond issue under Moody’s C-basket Actions taken Spreads of outstanding sub bonds 300 Allianz sub bond 01/2025 call date 1 Capital raised ✔ Allianz sub bond 05/2022 call date Spread over Swap (bps) 250 200 Issue of bond 150 100 050
Slide 121: Non-strategic portfolio cleaned up (1)
C. Protect and enhance capital base Non-strategic portfolio cleaned up (1): ongoing divestments of industrial holdings Actions taken Selected holdings1 Stakes2 Allianz + Dresdner3 > 15% < 15% < 10% < 5% 0% 1 Capital raised ✔ E.ON RWE 2 Non-strategic portfolio cleaned up ✔ Schering BMW Bayer Siemens
Slide 122: Non-strategic portfolio cleaned up (2)
C. Protect and enhance capital base Non-strategic portfolio cleaned up (2): ongoing divestments of industrial holdings Actions taken Selected holdings1 Stakes2 Allianz + Dresdner3 > 15% < 15% < 10% < 5% 0% 1 Capital raised ✔ mg technologies Continental 2 Non-strategic portfolio cleaned up ✔ Freseniu
Slide 123: Divestment of German financials completed
C. Protect and enhance capital base Non-strategic portfolio cleaned up (3): divestment of German financials completed Actions taken Selected holdings1 Stakes2 Allianz + Dresdner3 > 15% < 15% < 10% < 5% 0% 1 Capital raised ✔ Deutsche Bank 4 HypoVereinsbank 2 Non-strategic portfolio cleaned up ✔ Comme
Slide 124: Munich Re cross-holdings unwound
C. Protect and enhance capital base Munich Re cross-holdings unwound Actions taken 2000 Today 1 Capital raised ✔ Allianz ~33%1 ~25% Munich Re Allianz ~9% ~12% Munich Re 2 Non-strategic portfolio cleaned up ✔ 50.3% Allianz Leben 40.6% 49.9% Frankfurter 50.0% 3 Munich Re cross-holdings unwound ✔ 45.0%
Slide 125: Equity exposure reduced (1)
C. Protect and enhance capital base Equity exposure reduced (1): further reduction of shareholder exposure Actions taken Reconciliation: gross vs. net equity figures1 1 Capital raised ✔ (in EUR bn) Life / Health Property / Casualty Banking 55.4 2 Non-strategic portfolio cleaned up ✔ -0.9 26.2 30.2 3
Slide 126: Equity exposure reduced (2): gearing significantly limited
C. Protect and enhance capital base Equity exposure reduced (2): gearing significantly limited Actions taken Net equity exposure vs. NAV1 (EUR bn) 2002 2003 1 Capital raised ✔ 32.4 30.2 2 Non-strategic portfolio cleaned up ✔ x 1.2 26.8 13.8 25.0 x 0.8 12.4 Good- Good- will 3 Munich Re cross-holdings
Slide 127: Investment policy changed
C. Protect and enhance capital base Investment policy changed: where are we going in our investment policy? Actions taken Specification Investment objectives Limit for NAV loss § Active financial risk management 1 Capital raised ✔1 from investments puts value protection above strict benchmark orient
Slide 128: Capital allocation tightened
C. Protect and enhance capital base Capital allocation tightened: numerous divestments and selective investments in 2003 Actions taken Operating businesses Investments Divestments (as per 03/2004) 1 Capital raised ✔ § PIMCO minorities § No. of deals: 20 2 Non-strategic portfolio cleaned up ✔ § Italy
Slide 129: Dividend policy sustained
C. Protect and enhance capital base Dividend policy sustained: track record in dividend continuity Actions taken Dividends Total amount of dividends (EUR m) 1 Capital raised ✔ 14.7%* 551 2 Non-strategic portfolio cleaned up ✔ 276 307 367 364 374 185 199 224 160 3 Munich Re cross-holdings unwound ✔ 1
Slide 130: D. Dresdner Bank: restructure and grow profitably
Herbert Walter – Board member of Allianz AG D. Dresdner Bank: restructure and grow profitably Analysts’ Conference March 2004
Slide 131: New Dresdner: leading provider of integrated financial services
D. Dresdner Bank: restructure and grow profitably New Dresdner: transform into leading provider of integrated financial services with pre-eminent position in Germany 1 Implement best-practice business model 2 Focus strategic businesses on customers and profitability Personal Private & Corporate Dres
Slide 132: Two-stage transformation process towards New Dresdner
D. Dresdner Bank: restructure and grow profitably Two-stage transformation process towards “New Dresdner” Optimize and grow profitably (2004 ff) Restructure (2001 - 2003) § Positive net income before restructuring Objectives § Stop the bleeding § Earn cost of capital § Secure the base § Sustainable,
Slide 133: Key achievements in 2003
D. Dresdner Bank: restructure and grow profitably Key achievements in 20031… § Separate strategic from non-strategic businesses ü Corporate 1 business model § Customer-centric business model developed, implementation started § Straight-through functional responsibilities introduced ü Strategic § Ref
Slide 134: Focused initiatives for 2004
D. Dresdner Bank: restructure and grow profitably … and focused initiatives for 2004 to achieve positive net income before restructuring § Superior positioning in the market and leveraging strong 1 Corporate business model brand value § Optimizing bancassurance model with Allianz ! ! § Building on s
Slide 135: Our strategic businesses: positioning for profitable growth
D. Dresdner Bank: restructure and grow profitably Our strategic businesses: positioning for profitable growth Leadership Personal Banking Corporate Banking Retail Clients Corporate 4.9m Clients Cooperation 9,000 Motivated Allianz staff Affluent, HNWI, MNCs, Business Clients Institutions 0.4m 5,500 P
Slide 136: Private and business clients: strong client base
D. Dresdner Bank: restructure and grow profitably Private and business clients: good starting position with strong client base Business with private and business clients 20021 Customers (million) Operating revenues (EUR bn) Postbank 10 Deutsche Bank 3.4 Deutsche Bank 8 HVB 3.4 Dresdner Bank 5 Dresdn
Slide 137: Winning a competitive edge: positioning
D. Dresdner Bank: restructure and grow profitably Winning a competitive edge: our positioning for private and business clients High Positioning Relevant market § More approachable, 25 - 30m Status more modern, more progressive customers § Opening towards middle class § Leverage access to investment
Slide 138: Strong advisory competence and customer orientation
D. Dresdner Bank: restructure and grow profitably Strong advisory competence and customer orientation Private and business clients Advisory competence (%1) Customer orientation (%2) Dresdner Bank Dresdner Bank ... ahead of Best competition Practice … employees spend enough Securities 21 85 85 time w
Slide 139: Private and business clients: two strong offerings
D. Dresdner Bank: restructure and grow profitably Private and business clients: two strong offerings... Personal Banking Private & Business Banking Execute § Further enhancing daily partnership § Further strengthening banking offers and model position in relationship personalized financial based ind
Slide 140: ...with strong local presence
D. Dresdner Bank: restructure and grow profitably ...with strong local presence Personal Banking Private & Business Banking ~ EUR 92bn assets under control1 ~ EUR 102bn assets under control1 940 branches 130 centers (incl. 175 OLB branches) plus access to 940 Personal Banking branches Retail, Afflue
Slide 141: Together with Allianz: largest integrated distribution network
D. Dresdner Bank: restructure and grow profitably Together with Allianz: largest integrated distribution network Front-office employees in Germany ~90,000 ~65,500 ~20,000 ~15,500 ~10.000 ~8.000 ~8.000 Sales points ~ 17,000 ~ 15,000 ~ 12,0001 ~ 5,500 ~ 800 ~ 800 ~ 800 1) Thereof Dresdner Bank: 940 Pe
Slide 142: Growth levers for private and business clients
D. Dresdner Bank: restructure and grow profitably Growth levers for private and business clients Exploit customer base and increase Powerful share of wallet Focus on growth excellence in initiatives distribution Acquire new attractive clients Profitable growth Optimize customer/advisor- Consequent r
Slide 143: Corporate clients: attractive starting position
D. Dresdner Bank: restructure and grow profitably Corporate clients: Dresdner Bank with attractive starting position Advisory competence (%1) Customer orientation (%2) Dresdner Bank Dresdner Bank ... ahead of competition Insurance … provides one key contact 9 76 Products person for each customer Int
Slide 144: Corporate Banking and DrKW: major achievements in 2003
D. Dresdner Bank: restructure and grow profitably Corporate Banking and Dresdner Kleinwort Wasserstein: major achievements in 2003… Corporate Banking Dresdner Kleinwort Wasserstein § Client-centric business § Right-sized business model for 9,000 target model established customers implemented § Execu
Slide 145: Dedicated initiatives 2004
D. Dresdner Bank: restructure and grow profitably … and dedicated initiatives 2004 Corporate Banking Dresdner Kleinwort Wasserstein Execute § Profit enhancement for partnership § Exploit strong client credit relationships based model relationships, especially on risk adjusted pricing in Germany § Sa
Slide 146: Milestones until the end of 2005
D. Dresdner Bank: restructure and grow profitably Milestones until the end of 2005 End Beginning Mid End Mid End of 2003 of 2004 2004 of 2004 2005 of 2005 Cost of capital “New Dresdner” earned largely implemented Positive net income before restructuring Adjusted business models implemented, Cost-cut
Slide 147: E. AGF Financial Services
Laurent Mignon - Managing Director AGF E. AGF Financial Services All figures based on IFRS (Allianz Group) unless stated otherwise Analysts’ Conference March 2004
Slide 148: AGF Group at a glance
E. AGF Financial Services AGF Group at a glance Highlights Total premium income/net income1 § France: 4th largest insurer Premium income (EUR bn) Net income (EUR m) – P/C 11.3% market share 17.6 18.5 18.3 – Life 4.7% market share 17.1 – Health 11.2% market share 845 717 763 § Strong international in
Slide 149: Overview L/H France - positive swing in earnings
E. AGF Financial Services Overview L/H France - positive swing in earnings after taxes France Gross premiums written (EUR m) § No. 8 in Life with 4.7% market share 4,864 4,438 4,283 § No. 2 in Health with 11.2% market share § Product mix – 78% Individual & group life 2001 2002 2003 – 22% Individual
Slide 150: Overview P/C France: combined ratio significantly down
E. AGF Financial Services Overview P/C France: combined ratio significantly down France Gross premiums written (EUR m) § No. 3 with 11.3% market share 5,3921 4,941 5,367 § Product mix 28% Motor – 49% Individuals 21% Household 22% SME 2001 2002 2003 – 51% Commercials 19% Large accounts Combined ratio
Slide 151: 2003: action plan has paid off
E. AGF Financial Services 2003: action plan has paid off Business 2002 situation Actions taken 2003 results Individual Life and § Shrinking premiums § New products § Premiums up 3.6% Financial § Negative net income § Crediting rates down § Net income positive Services Group Life § Rate increases § C
Slide 152: 2004: challenges
E. AGF Financial Services 2004: challenges Business Challenges Individual Life § Create new sales dynamics while shifting to and more profitable products Financial § Exploit restructuring potential Services § Leverage French pension reform opportunities Group Life § Improve combined ratio and § Bene
Slide 153: Life and Financial Services in detail
E. AGF Financial Services Life and Financial Services in detail Today’s situation § Life as a pure savings market § Banks with a dominant position (60% market share) Today’s § Margins under pressure context § Pension market reform under way § Low internal growth over the past 3 years § Strong and we
Slide 154: Individual Life and Financial Services: distribution and product range
E. AGF Financial Services Individual Life and Financial Services: focus on distribution and product range The challenge § Create new sales dynamics while shifting to more profitable products § Exploit restructuring potential: reduce costs significantly § Leverage new business opportunities offered b
Slide 155: Group Life and Health: focus on profitable growth
E. AGF Financial Services Group Life and Health: focus on profitable growth and exploit restructuring potential The challenge § Further improve combined ratio § Benefit from French pension and health reform Achieved so far Next steps 2004 targets § Health CR down § Introduce further rate § Health CR
Slide 156: P/C France: leverage successful turnaround
E. AGF Financial Services P/C France: leverage successful turnaround The challenge § Further restore profitability Achieved so far Next steps 2004 targets § CR down 9.5%-p to § General agents and local § CR < 99%* 102.8%* brokerage § Cost cutting > EUR 30m – Further rate increases § CR in Q4 03 down
Slide 157: Protect capital base and reduce complexity
E. AGF Financial Services Protect capital base and reduce complexity The challenge § Protect capital base § Reduce complexity Achieved - Protect capital base Next steps Assets Liabilities § Pursue active ALM § Reduced equity exposure § Reduced debt (Entenial) § Zero-cost equity hedging § Increased f
Slide 158: Outlook
E. AGF Financial Services Outlook 2004 & 2005 Outlook AGF is committed to pursuing its strategy in line with Allianz 3 plus 1 program: 1 Raise operating profitability to targeted levels 2 Continue to improve the organization of the Group 3 Safeguard and enhance the Group’s financial condition + Sust
Slide 159: Backup
E. AGF Financial Services Backup E 12
Slide 160: Distribution France: new business
E. AGF Financial Services Distribution France: new business (in %) Number P/C Life Health Comments General § Historical traditional insurance network of self- 3,100 54% 18% 27% employed agents with exclusive distribution agents agreement with the company Salaried § Salaried financial advisors networ
Slide 161: Overview Financial Services
E. AGF Financial Services Overview Financial Services Banque AGF RWA1 (EUR bn) § Pure financial services provider n.a. 1.2 1.5 § Distribution only through AGF networks § Outsourcing of product shaping 2001 2002 2003 § Number of clients: 260,000 i.e. 5% of total AGF Earnings2 (EUR m) § Entenial (mort
Slide 162: Overview Credit Insurance and Assistance
E. AGF Financial Services Overview Credit Insurance and Assistance Euler Hermes Gross premiums written (EUR m) 1,589 1,579 1,564 § No. 1 credit insurer worldwide with close to 40% market share § Current AGF stake: 70.7% 2001 2002 2003 § Successful merger with Hermes in 2002 Combined ratio (%) § Adap
Slide 163: F. Index
F. Index Analysts’ Conference March 2004
Slide 164: Index (1)
F. Index Index (1) A. “3 + one” A B. Group financial results 2003 B The year 2003 ................................................................................... A 1 Where do we come from? .................................................................. B 1 Our track record 2003 ..............
Slide 165: Index (2)
F. Index Index (2) L/H: operating improvements, but still relatively low investment Asset Management: ADAM has significantly reduced operating result ................................................................................................. B 21 expenses over the last year ...................
Slide 166: Index (3)
F. Index Index (3) P/C earnings contribution by company / region .............................. B 64 Sensitivities on value of in-force for Allianz’s share in selected L/H: key figures and ratios ................................................................ B 65 countries ........................
Slide 167: Index (4)
F. Index Index (4) D. Dresdner Bank: Restructure and grow profitably D E. AGF Financial Services E New Dresdner: transform into leading provider of integrated AGF Group at a glance ....................................................................... E 1 financial services with pre-eminent positio
Slide 168: G. Appendix
G. Appendix Analysts’ Conference March 2004
Slide 169: Glossary (1)
G. Appendix Glossary (1) ACP Allianz Capital Partners ADAM Allianz Dresdner Asset Management A&E Asbestos & Environmental AFS Securities available for sale AGM Annual General Meeting AGR Allianz Global Risks ART Allianz Risk Transfer Assets under management (AuM) Sum of investments marked-to-market
Slide 170: Glossary (2)
G. Appendix Glossary (2) Assigned capital (AC) Capital assigned to subsidiaries for core business (“old model”) AVmG (Altersvermögensgesetz) German Law on Retirement Savings BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) Federal Financial Supervisory Authority BIS Bank for International Set
Slide 171: Glossary (3)
G. Appendix Glossary (3) - Total capital ratio: Relation of Tier I plus Tier II capital to risk-weighted assets. Tier II capital (supplementary capital) comprises profit participation certificates, subordinated liabilities and revaluation reserves on securities and other adjustments CEE Central and
Slide 172: Glossary (4)
G. Appendix Glossary (4) DAC Deferred acquisition costs dbi dresdner bank investment management dit DEUTSCHER INVESTMENT-TRUST DVFA (Deutsche Vereinigung für Finanzanalyse und Asset Management) German Society of Investment Analysis and Asset Management Embedded Value (EV) Sum of assigned capital and
Slide 173: Glossary (5)
G. Appendix Glossary (5) Equity Gearing Equity exposure (attributable to shareholders) divided by NAV ETA Employment Termination Agreement EVA (Economic Value Added) Product of assigned capital and the difference between normalized ROE and the cost of capital Excess capital Difference between net as
Slide 174: Glossary (6)
G. Appendix Glossary (6) HGB German GAAP HNWI High net worth individuals IFRS International Financial Reporting Standards (formerly IAS) IFSP Integrated financial services provider Interest coverage ratio Profit before taxes, goodwill and interest expenses divided by interest expenses IRU Institutio
Slide 175: Glossary (7)
G. Appendix Glossary (7) MNC Multinational companies Net asset value (NAV) Shareholders equity + off-balance reserves (attributable to shareholders) NPL Non-performing loans NPV Net present value OE Operating entity Operating profit Profit before taxes and minorities + goodwill amortization - net ca
Slide 176: Glossary (8)
G. Appendix Glossary (8) PD Probability of default PPL Potential problem loans PVFP Present value of future profits RfB Reserve for premium refunds Risk-adjusted capital (RAC) Capital required according to internal economic risk capital model (“new model”) RoACN Normalized return on assigned capital
Slide 177: Glossary (9)
G. Appendix Glossary (9) RWA (Risk-weighted assets) All assets of the bank multiplied by the respective risk-weight according to the risk rate of each type of asset SAR Stock appreciation rights Statutory premiums Premium income under local GAAP Survival ratio Claims reserves divided by claims payme
Slide 178: Glossary (10)
G. Appendix Glossary (10) U/W Underwriting VAG (Versicherungsaufsichtsgesetz) German insurance supervisory law Value-at-Risk (VaR) Potential loss which may occur during a pre-defined period of time, based on a given confidence level and certain assumptions regarding changes of market parameters G 10
Slide 179: Investor Relations contacts
G. Appendix Investor Relations contacts Oliver Schmidt Tel. +49 (0) 89 3800-3963 Peter Hardy Tel. +49 (0) 89 3800-18180 Head of e-mail: e-mail: Investor Relations oliver.schmidt@allianz.com peter.hardy@allianz.com Susanne Arheit Tel. +49 (0) 89 3800-3324 Christian Tel. +49 (0) 89 3800-3892 Lamprecht
Slide 180: Financial calendar 2004/2005
G. Appendix Financial calendar 2004/2005 05 May 2004 Annual General Meeting 14 May 2004 Financial report first quarter of 2004 16 August 2004 Financial report first half 2004 12 November 2004 Financial report first three quarters 2004 17 March 2005 Financial press conference for the 2004 fiscal year
Slide 181: Disclaimer
G. Appendix Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on managemen