Allianz Posts Strong 1st Half Results

August 17, 2004

Germany’s Allianz Group reported a very strong first half for 2004 with total revenues of 49.5 billion euros ($61 billion). Net income was 1.289 billion euros ($1.59 billion), an increase of more than 1.1 billion euros ($1.385 billion) compared to the figure for the corresponding prior-year period.

Board of Management Chairman Michael Diekmann, speaking at the presentation of the financial results, noted, “We are on track. The positive results show that our ‘3+one’ program is taking effect.”

Earnings before taxes, goodwill amortization and minorities were up sharply from 500 million euros ($617.5 million) to 3.3 billion euros ($4.075 billion) in the first six months of 2004, as compared to the the same period last year. The net figure was calculated after deducting tax charges of 743 million euros ($917.6 million), minority interests of 656 million euros ($810 million) and goodwill amortization of 588 million euros ($722 million).

The turn around in the banking sector must be extremely comforting after the string of losses Allianz has suffered there since it bought 100 percent control of Dresdner Bank. It contributed 197 million euros ($243.3 million) to net profits, compared to a loss of 437 million euros ($539.6 million) in the first half of 2003.

“The first half of 2004 proves that our work has been successful. We are maintaining our upward trend in earnings. All segments show an improvement in the quality of earnings”, commented Helmut Perlet, member of the Allianz Group Board of Management responsible for controlling. However, he cautioned that the first half-year figures should not be extrapolated to the year as whole.

“There are still uncertainties such as major claims and natural catastrophes. In addition, we anticipate a decrease in capital gains in the second half of the year. Most dividends from shareholdings were booked to a large extent in the first six months. As a result, net income from investments will flatten out towards the end of the year,” he continued.

Allianz’ P/C business remained relatively stable with premium income increasing slightly compared to the first half of 2003 by 0.6 percent to 24.2 billion euros ($29.88 billion). Adjusted for consolidation effects, growth came to 2.1 percent. The combined ratio dropped from 97.1 percent to 94.3 percent.

“We have an optimistic view of the future”, Diekmann continued. “Our group companies are well on the way to achieving our ambitious goals.” The company reiterated its 2004 goals to increase total premium income by approximately four percent and achieve a combined ratio of less than 97 percent in the P/C insurance business for the year as whole – barring major natural catastrophes of course.

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