Diekmann: In the first instance, conversion to SE status was a tool for delivering the most efficient merger with our Italian subsidiary RAS. By fully integrating RAS into Allianz, we simplify our operating structures in Europe, and this in turn means that we are better positioned to capture the long term business opportunities in Europe.

Diekmann: Western Europe's problems are well-known: ageing populations, weak and under-funded social security systems, high fiscal indebtedness and so forth. For a company like Allianz, these structural weaknesses offer long-term business opportunities. We are especially well placed for example to address the retirement needs of the ageing population in "old Europe" - we have the necessary expertise in insurance, as well as asset management, banking and assistance services.

In the new EU member states and candidate countries, the opportunity is similar to that in other "emerging markets" in other parts of the world: Allianz will benefit as expenditure on health, savings and insurance increases.

Diekmann: The legal step reinforces the reality of our day to day operations: Allianz is a European company at heart. Almost 75 percent of our revenues are obtained in Europe, more than half of this outside of Germany. We employ 153,000 people in Europe and serve over 45 million customers in 29 countries; we manage 156 billion euros of money (third party assets under management) in Europe and pay more than two billion euros of taxes in Europe.

A comparison with 1997, when Germany still accounted for 50 percent of revenues, shows the degree of Europeanization we have seen over the past decade alone.

Diekmann: Definitely not! Allianz is an international company and has been for many decades. At the same time, it would be totally wrong to see us as a "virtual" company, somehow floating free of our historic roots in Germany or in other countries for that matter. Germany remains our most important market and we have chosen to keep our headquarters in Germany, even though the SE legislation would have allowed us to move elsewhere; similarly, we have preserved many of the features of German law and governance, because they are a vital part of our culture and heritage.

The most obvious example of that is co-determination. We believe this to be a source of competitive advantage for Allianz and we didn't for a moment seriously think of dropping that. What we have done - and this was announced some weeks ago - is change the size and composition of our supervisory board. Now, representatives of the workforce are drawn from several European countries and not just Germany as in the past. Besides this, we also have a European works' council.

Meanwhile our companies in France, Italy and other countries will all preserve their operational autonomy. The reality is, as I said, that our home market has steadily grown beyond Germany and embraces Europe as whole.

Apart from this, we continue to get very high growth from Asia-Pacific, and the Americas are also crucial for our future: both areas will continue to receive investment and attention in line with their considerable future importance.

Diekmann: In the first instance, the RAS transaction eliminates a great deal of complexity in the group. Have a look at the "before" and "after" organizational charts to see graphically how at one fell swoop we have radically simplified our structures and taken out unnecessary layers of administration and bureaucracy.

For example, our companies in Spain, Portugal and Switzerland used to report to RAS: in future they will report direct to Munich. There is a new clarity to our organization that means we can make quicker and better decisions and allocate our capital more effectively.

Diekmann: We are more than a German holding company with multiple unconnected subsidiaries all over Europe and the rest of the world. If we can do something better at the central or regional level, we have an obligation to our shareholders, customers and employees to do so.

But this is not the reason for converting to SE status. By cooperating more effectively that we do now, we will be able to create better products for our clients and open new opportunities for our people. See it as an intensification of the various strategic initiatives - for example Sustainability or Customer Focus - that we have put in place to promote best practice across the group worldwide. The local companies will be empowered to become more influential in the region and the group as a whole.

Diekmann: Only last week, Allianz Global Investors launched a new range of investment funds designed for distribution across the whole of Europe. Later in the year, we will launch a new pan-European pensions offer: I can't reveal any details yet but this is something our corporate customers have been wanting for years.

We have also just launched a new index-linked life insurance product for the entire CEE region. On an even more global scale, a unit-linked life insurance product developed by Allianz Life in the US was successfully rolled out in Germany.

In a different market segment, we have concluded an international agreement with the world's leading glass repair specialist with the result that more customers worldwide can get their windscreens repaired while saving money. We will shortly introduce a pet insurance product in the Netherlands, which is based on a product developed by Allianz in the UK and which is also available in the US, Canada, Japan and Ireland. And I should mention the hedging services provided by Dresdner Kleinwort to many of our international operations.

On the employee side, there are numerous initiatives in place to encourage international mobility for our managers and experts.

Diekmann: Yes, the SE is the latest evidence of broader cultural change at the Allianz Group. The governance and legal structure is catching up with the reality of Allianz today.


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