Allianz's 3+One program was introduced in December 2003 to promote our business model and achieve sustainable and profitable growth. Since then, we have made significant progress in

1. protecting and enhancing the capital base,

2. substantially strengthening the operating profitability, and

3. reducing complexity.

These efforts have become an integral part of our daily business and a lot of progress has been made towards increasing our sustainable competitiveness and value - the +One component of the program.

Sufficient risk capital is essential if Allianz is to remain a reliable partner for our clients. Capital reserves are also an essential factor in acquiring a good rating, which is key to gaining the trust of investors and customers.

Today, Allianz has a sound capital base and sophisticated risk control in place. This has been achieved through measures, such as increasing our risk capital surplus, establishing a group-wide risk management system and improving our investment portfolio structure, for example, by reducing our equity exposure and investing into a broader range of European companies as well as private equity.

One clear objective of Allianz is to be profitable - through the operative business alone, in order to be as independent as possible from the prevailing economic situation and influences of the capital market. Every business unit and every Group company is committed to operational excellence, operating in a professional and customer-oriented manner, and leading the competition.

Allianz's Sustainability Program in P/C and life insurance are helping to turn best practice into common practice within the Group. Further measures to strengthen profitability include maintaining cost discipline through streamlining of processes, enhancing underwriting quality and consistent risk selection. Also, turnaround cases at Fireman's Fund, Allianz Global Corporate & Specialty, AGF and Dresdner Bank have been successfully concluded.

Only companies with a clear structure and efficient operational processes are sufficiently flexible to react quickly to the fast-moving market conditions and to respond to changes in customer requirements - further prerequisites for profitable growth. Since the launch of the 3+One program, Allianz has therefore focused on core activities, on reducing structural inefficiencies and on streamlining processes and the product range.

In September 2005, we announced our repositioning in Europe. The corresponding "Euroefficiency" measures include the merger of RAS into Allianz, the conversion into a European Company SE, and the streamlining of European insurance operations. In Germany, we are simplifying our insurance operations as well as Dresdner Bank's structures.

In a joint effort with its operating units, Allianz has made considerable progress on the first three components of the 3+One program. Business is back on a solid footing. However, the work on strengthening the capital base, increasing profitability and reducing complexity continues.

Today, Allianz is focused on driving forward the +One part of the program which aims at increasing sustainable competitiveness and value. +One initiatives include Customer Focus, Sustainability, Leadership Values, and Global Brand and Communication. The definition of Growth Markets (China, Russia and India) and the systematic exploration of future growth areas are examples of measures to secure long-term value.