2004 was a year of profitable growth for Allianz. There was a significant increase in the operating profit, which rose by 2.8 billion euros (68.6 percent) to 6.9 billion euros. Total revenues increased by 3.1 billion euros (3.3 percent) to 96.9 billion euros; adjusted for consolidation and currency effects the increase was 6.0 percent.

All four business segments contributed to the strong performance. Moreover, the Allianz Group achieved its goal of 15 percent return on risk adjusted capital. "Allianz has regained its status as a company with a solid capital base and sound earnings," said Michael Diekmann, CEO Allianz AG. "We now wish to set the bar even higher: In 2005 we want to see a further increase in group earnings."

Earnings before taxes and minority interests were 5.2 billion euros (2003: 2.9 billion euros). The balance of net capital gains, including non-operating trading income, and impairments on investments decreased by 1.6 billion euros to 1.3 billion euros in 2004. Taxes and minority interests rose significantly: the tax charge was 1.7 billion euros (2003: 0.1 billion euros), while minority interests increased to 1.3 billion euros (2003: 0.8 billion euros).

Net income was up 16.4 percent, from almost 1.9 billion euros in 2003 to 2.2 billion euros in 2004, thanks to the strong operating profit. As a result, the capital base is now even stronger: Shareholders' equity increased by 2.2 billion euros to 30.8 billion euros.

In Property & Casualty, the combined ratio was lowered by a further 4.1 percentage points to 92.9 percent, due to a tightly disciplined price and underwriting policy and strict cost control. Premium income rose by 0.8 percent to 43.8 billion euros, reflecting internal growth of 2.1 percent (adjusted for consolidation and currency effects).

The operating profit was up 63.3 percent, from 2.4 billion euros to 4.0 billion euros. However, net income fell from 4.7 billion euros to 3.3 billion euros due to non-operating items as, for example, less capital gains were realized compared with 2003. As a result significantly less profit from the disposal of investments was realized compared with the previous year.

"In Property & Casualty, the positive trend, particularly the substantially lower combined ratio, shows we are definitely on track in concentrating on operating profitability and tight risk management," said Helmut Perlet, Allianz AG board member responsible for controlling and accounting. "Let's not forget that 2004 was a year of major natural catastrophes for the insurance industry, with large-scale damages reaching record levels."

Life & Health enjoyed strong growth and an improved operating profit. Total statutory premiums rose to 45.2 billion euros, an increase of 6.8 percent (10.0 percent after adjustment for currency effects and consolidation), largely due to profitable growth of 43.6 percent at American subsidiary Allianz Life. Another key factor was the strong new business growth in Germany, due primarily to the new German retirement income act ("Alterseinkünftegesetz"). As a result Allianz Leben sold a record high of approximately 1.2 million insurance policies in 2004.

The operating profit increased by 12.1 percent to 1.4 billion euros (2003: 1.3 billion euros). Net income rose by 770 million euros to 808 million euros (the figure for the previous year was dragged down by goodwill amortizations in South Korea and especially by tax changes in Germany).

In Banking, which is almost exclusively represented by Dresdner Bank, the upturn in 2003 continued in the 2004 business year: Restructuring of the segment continued, earnings were stabilized, efficiency improved, and risks reduced.

During the last 24 months Dresdner Bank has slashed its administrative expenses by more than 1.7 billion euros to 5.3 billion euros (2003: 5.7 billion euros; 2002: 7.1 billion euros). The net loan loss provisions were only 337 million euros, and adjustments for credit risks were reduced by two-thirds compared to the previous year.

Thanks to the aforementioned cuts in administrative expenses and the lower net loan loss provisions, Dresdner Bank's operating profit increased significantly from a 482 million euro loss in 2003 to an operating profit of 599 million euros. Despite restructuring costs of 290 million euros, Dresdner Bank's net income after restructuring costs was 142 million euros, compared with a loss of 1.305 billion euros the previous year.

"Dresdner Bank has more than achieved its goals for 2004. It is back on track to profitability," said Helmut Perlet.

In Asset Management, the trend towards profitable growth continued. Another good performance in the fixed income business led to strong net inflows of 31 billion euros. Particularly in the US as well as in Germany the Allianz Group has powerful market positions. More than 70 percent of the third party assets came from the US, more than 15 percent from Germany.

In spite of the negative effects of exchange rate movements of 31 billion euros, third party assets rose by 20 billion euros (3.5 percent) to 585 billion euros. Moreover, due to strict cost management and improved efficiency, the cost-income ratio fell considerably, from 67.2 percent to 62.9 percent.

The operating profit increased for the third time in a row by a double digit percentage (16.8 percent) to 856 million euros. After deduction of acquisition-related expenses, taxes, and minority interests, Asset Management posted a lower than expected loss of 152 million euros, compared with a loss of 270 million euros the previous year.

For the first time, Allianz is publishing the remuneration packages for all members of the board of management. This is in response to growing public interest, and following the recommendation of the German Corporate Governance Codex.

The Allianz board of management and supervisory board will recommend to the annual general meeting on May 4 an increase in the dividend from 1.50 euros per share to 1.75 euros per share.

During 2005 (the current business year) the Allianz Group will put even greater emphasis on profitable and sustainable growth. Total revenues are expected to increase in line with 2004. Some lines of business are expected to further improve operating profitability while others should maintain current levels.

In Property & Casualty Allianz aims to maintain a combined ratio of below 95 percent. In Life and Health, the target is an operating profit of at least 1.5 billion euros. In 2005, Dresdner Bank should earn the cost of capital of 8.85 percent. In Asset Management, the objective is a 10 percent increase in operating profit, and positive net income.

All targets are based on the assumption that profitability is not impacted by natural catastrophes or unfavorable capital markets.

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