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Letter to the Shareholder | |
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Dear Shareholder,
Looking back upon a year that was marked by more turmoil and confronted us with greater challenges than many a year in the recent history of your company, an original remark by Konrad Adenauer, the first Chancellor of the Federal Republic of Germany came to mind. "History", he said, "is the sum of all the events that could not be prevented." How true. We could easily have done without many of the disturbances that upset the world and our industry in 2001 above all, the horrible terrorist attack on the World Trade Center, the symbol of a free and prosperous world economy. A new dimension in destructive terrorism not only took the lives of thousands of human beings and inflicted tremendous pain and suffering on colleagues, friends and relatives of the victims; the attack also resulted in insurance losses of unprecedented magnitude and dealt the world's financial markets a severe blow. Against the background of a recessionary economic environment, these factors combined to have a devastating effect on our operating results. Despite continued intensive efforts on the part of our nearly 180,000 employees as well as our agents and cooperation partners, all of whom have earned my sincere thanks for their unremitting efforts, our net income amounted to only 1.6 billion euros - a solid billion euros less than planned. Following excellent performance in the year 2000, Allianz shares lost 33 percent of their value in the course of the reporting year. For you, our shareholders, this is certainly every bit as disappointing as it is for my colleagues and myself. But does this mean we have to rethink the way we do business in light of recent developments? In various areas, this process is off to a good start. Examples include the creation of an early-warning system, review of our comprehensive risk controlling, coverage for terrorist risks and discussions with government concerning the question as to how the consequences of such attacks can be insured in the future. But our business maxim of profitable growth will not be changed by the unprecedented destruction of September 11, 2001. Quite the opposite: for my colleagues and myself, subsequent developments are an additional incentive to stay our course and further increase the value of your company. When you look at the newspapers, you are sure to find any number of reports on companies that have evidently forgotten what they stand for. Some have already disappeared, without having produced a single euro or dollar in earnings. That is not our world - Allianz stands for sustainability, continuity and predictability. Since 1992, we have improved the performance of your company year after year and thus generated the value you justifiably expect from your company. Following the setback in 2001, we have every confidence that we will be able to return to a path of growth in the current year. You might ask yourself whether a company that is already generating revenues of over 80 billion euros, 75 billion of which derive from insurance activities alone, can continue to grow profitably? My answer is an unqualified yes. Size does not necessarily lead to inflexibility or a loss of forward momentum. We think and act in global dimensions, but we essentially work at the local level. Our companies, which operate in vastly disparate markets, know and understand their customers; they realize what they have to do to become even leaner, faster and more customer-focused and they know that they can rely on the global resources of the entire Group to support this ongoing process of improvement. This proven approach to our business will help us continue to tap many new sources of further growth and greater efficiency in the future. We are also focusing our attention on expanding and networking our core activities to create integrated financial services. The acquisition of Dresdner Bank, the largest in the history of Allianz, was a salient example last year. This major corporate milestone not only made your company larger but also enabled Allianz to assume a new quality. Together with Dresdner Bank, we are poised to capitalize on the enormous opportunities in the growth market for long-term insurance and investment products in Germany. We have a diversified product portfolio that offers a complete array of solutions for insurance, retirement benefits, asset management and banking needs. Plus we are setting up a multi-channel distribution network that will make us a unique single-source provider of integrated financial services and allow us to address any and all needs that our customers might have. In the year under review, we have come a long way, and you can read about it beginning on page 32 of this Annual Report. But we still have a lot to do. That is why the year 2002 will, more than anything else, be a year of consolidation. In this context, we will concentrate on three major projects. First of all, we will energetically pursue our efforts to integrate Dresdner Bank and take appropriate profit-driven measures to restructure its operations. Secondly, we will continue to enhance the operational efficiency of our property and casualty insurance activities, especially in the area of industrial insurance, and the same applies to our asset management business. We are making a concerted effort to accelerate growth in these segments. Thirdly, we intend to leverage our solid, broad-based platform in the areas of private retirement insurance and corporate pension plans to further strengthen our position of leadership in this growth market throughout Europe in general and in Germany in particular. Ladies and Gentlemen, a difficult year lies behind us and, despite all optimistic forecasts at the present time, we cannot know how the world economy will develop in the future. Together with Dresdner Bank, we have set ourselves ambitious targets for the years to come. Please give us your continued trust. My colleagues and I have every confidence that we will earn this trust with reports on good entrepreneurial progress and significantly better results in a year's time. Yours sincerely Dr. Henning Schulte-Noelle Chairman of the Board of Management |
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