Diekmann: Allianz is writing figures in the black again. Improvements in operating business have allowed us to make significant progress in all business segments and in many Group companies. We achieved an upswing in operating earnings amounting to 4.5 billion euros. Following a loss of 1.2 billion euros in the previous year, we reported net income totaling 1.6 billion euros for the year 2003.

Perlet: First of all, income from the active management of our investments forms a part of the core business of an insurance company and is generated every year. And compared to 2002, net capital gains realized on disposal of investments in the fiscal year 2003 were not higher.

The sale of Beiersdorf shares brought in 2.8 billion euros. This contrasts with unscheduled tax charges in the Life and Health insurance segment due to changes in fiscal legislation. We have further tightened our accounting for impairments on investments. Restructuring expenses amounting to 840 million euros were incurred at Dresdner Bank.

We also booked unscheduled amortization of capitalized goodwill for Allianz Life in Korea amounting to 224 million euros. This measure takes account of the lower interest-rate environment in Korea and our current appreciation of earnings power for Allianz Life.

Diekmann: We took consistent measures within the scope of the "3 plus 1" program designed to make us more efficient, leaner and more powerful. This is about strengthening our capital base, increasing profitability and reducing complexity. These steps are necessary in order to enhance our competitiveness and increase value on a sustainable basis.

Perlet: In 2003, we strengthened the Group's capital base by 6.9 billion euros using a number of measures, notably the successful capital increase last April. We also reduced the proportion of equities in our financial portfolio by the sale of significant stakes in Beiersdorf, Munich Re and other companies. This has made us less dependent on market fluctuations.

In order to reduce the complexity of the business portfolio, we have withdrawn from a total of 20 Group activities. These included operations in Mexico and the Philippines. This enabled us to release 0.9 billion euros in risk capital.

Most important are the improvements we made in the operating business. The combined ratio in Property and Casualty insurance improved from 105.7 to 97.0 percent. Strict cost discipline in all divisions of the Group helped us to save administrative costs amounting to 1.9 billion euros.

Diekmann: In our banking business which is primarily determined by Dresdner Bank, we significantly improved the operating result by 1.6 billion to minus 357 million euros. Although this is a successful result, the task now is to generate positive earnings.

With the "New Dresdner" program, the bank is on the right path to becoming competitive again so that it can generate sustainable profit. We're convinced that the bank will achieve significant improvements over the course of 2004, and will earn its capital costs from 2005.

The turnaround programs at Fireman's Fund in the U.S. and at Allianz Global Risks proved more successful than expected in 2003. We are now reporting a significantly positive underwriting result for both entities.

We're also making significant progress in the turnaround program at AGF in France. The combined ratio is currently 102.8 percent and this is slightly better than planned. Our joint goal here is to get below 100 percent.

Perlet: We're continuing the "3 plus 1" program at an unabated pace. In 2004, we will be focusing on further operating improvements and sustained profitable growth.

Diekmann: Operating discipline and a corporate culture geared to performance are the key factors. In order to move forward in these areas, we have for example changed the rules for financing our subsidiaries and our dividend policy. Each operating unit must pay dividends amounting to the capital costs. Only the entities presenting the best business plan and who can prove the greatest value added, qualify for additional capital.

This internal capital market is intended to promote the entrepreneurial spirit throughout the entire organization. It rewards those companies that have successful local strategies with customers and that achieve an attractive return. Our aim is to promote this individual responsibility in every manager and each and every member of staff.

We have lots of opportunities to return to where we belong by 2005 - the premier league of companies with strong earning power. We simply have to make the most of them.


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