S&P Affirms Allianz Canada ‘BBB’ Ratings; Raises Outlook to Stable

June 10, 2004

Standard & Poor’s Ratings Services announced that it has revised its outlook on Allianz Insurance Co. of Canada and Trafalgar Insurance Co. of Canada (collectively referred to as Allianz Canada) to stable from negative and has affirmed its “BBB+” counterparty credit and financial strength ratings on the companies.

“The outlook revision reflects Standard & Poor’s view that the company will continue to demonstrate improved operating performance through 2004 and into 2005,” stated S&P credit analyst Michael Gross.

The rating agency said it expects Allianz Canada to report a combined loss and expense ratio of about 100 percent and net income of about C$30 million (U.S.$22.4 million). It noted that the “continued financial improvement is attributable to management actions aimed at achieving strong and sustainable earnings and some improvement in industry operating conditions.

“Based on 2003 net premium writings, Allianz Canada was ranked as one of the top-15 writers of property/casualty (P/C) insurance in a highly fragmented and competitive Canadian P/C marketplace. Leveraging the Allianz AG brand name has provided for additional presence in the market.”

Germany’s Allianz AG owns the Canadian P/C business platform. “Allianz Canada benefits from the Allianz AG group through its brand, reinsurance, investment, underwriting and management capabilities,” said S&P.

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