Allianz Deutschland AG (ADAG) has brought its first year as an operating holding company to a successful close. Gross premiums written in the property/casualty, life and health insurance lines grew 3.1 percent to 25.6 billion euros; operating profit was 2.0 billion euros. While gross premiums written were down slightly at Allianz Sach, revenues were up at Allianz Leben and in private health insurance.

Preliminary consolidated IFRS calculations indicate a net income of 1.7 billion euros for the year. Shareholders’ equity was 16 billion euros.

The company systematically pursued its reorganization of the German insurance business in 2006. The aim is to remain the unchallenged Number One in Germany, and to achieve our ambition of being the customers’ choice as the most trustworthy insurance company.

"To make sure we have a viable future in the German market, we must operate even more cost-effectively and with an even better focus on the client," said Gerhard Rupprecht, Chairman of the Board of Management at ADAG. Assistance benefits will be a key feature of new Allianz products for the German market. Said Rupprecht: "We mean to evolve from a mere provider of reimbursements into a problem-solver for our clients."   Rupprecht’s summary of the past fiscal year: "I think it’s a sign of strength that ADAG, its employees, and its agents generated such a good result in the face of so many stresses."

With 25.6 billion euros in gross premiums written, ADAG accounts for about one-quarter of consolidated revenues. The operating profit was approximately 2.0 billion euros. Property/casualty contributed 1.3 billion, life contributed 0.5 billion, and health contributed 0.2 billion euros. 

Gross premiums written at Allianz Sach were down slightly against the prior year, to 9.5 billion euros. After adjustment for the transfer of the Group’s industrial insurance business to Allianz Global Corporate & Specialty, the decrease is equivalent to 0.5 percent. The number of vehicles insured in the motor business rose slightly. But revenues were down 4.2 percent because of the segment’s systematically applied earnings-oriented application approval policy.

Revenues in casualty and liability insurance grew during the year. Sales successes among full-time agents also yielded a gratifying increase in the commercial mass-market business. Gross premiums written in corporate property insurance grew 2.3 percent. Expenses for claims were down overall, despite certain regional effects of forces of nature. The combined ratio remains very favorable.

Allianz Deutschland AG’s strongest growth engine is Allianz Leben. This segment gained market share. New premiums grew about one-quarter, to 4.5 billion euros. In its business with private clients, the segment’s sales of retirement insurance plans, with an emphasis on "Riester pension" products, showed an especially substantial gain of 39.3 percent. Company retirement plans in the corporate segment also grew, by nine percent. The strong influx from new business increased gross premiums written by 6.4 percent, to 13.0 billion euros.

The investment portfolio grew vigorously to 128.6 billion euros, and the stock exposure in terms of market value grew from 17.7 to 21.0 percent.  Thanks to its strong financial base, Allianz Leben can afford a stock exposure substantially above the market, and take advantage of opportunities for long-term earnings for its clients.

In private health insurance, gross premiums written were up 1.6 percent, to about 3.1 billion euros. In new business, the debate about health care reform again interfered with sales of full-coverage policies. But demand for supplemental coverage was up. New business overall was down 6.0 percent.

The number of individuals insured rose slightly, by 0.5 percent, to more than 2.4 billion people. Although the number of individuals with full coverage declined 1.6 percent, those with supplemental coverage increased 1.4 percent. The improved claims situation again led to an improvement in the net income ratio for insurance operations: following the prior year’s 9.7 percent, it reached an outstanding 12.1 percent. 

Allianz Beratungs- und Vertriebsgesellschaft (ABV) generated commission income of 2.1 billion euros as a sales agent for insurance, retirement, capital formation and banking products. As expected, revenues were enough to cover ABV’s costs, especially compensation for its roughly 11,000 full-time agents, part-time agents and sales employees. ABV was also able to attract more than 330,000 clients for Dresdner Bank during the year.

At the end of 2006, ADAG and its subsidiaries had a total of 32,307 employees, 3,353 fewer than at the end of 2005. After adjustments for intra-Group transfers, the staff decreased by 2,506. Since restructuring began, voluntary agreements have saved 1,555 full-time positions up to the end of January of the current year.

As part of the reorganization of its German insurance business, ADAG will be introducing a new operating model that will enhance its efficiency and customer orientation. "In the negotiations on reconciling interests with our labor councils, we extensively discussed and defined the details of the employment concept. Now we can start implementing it," said Rupprecht.

The first area of emphasis will be the Northeast Service Region. By mid-year, the new Incoming Mail Center will be set up in Berlin, and a pilot program for customer support via phone will be set up in Leipzig. The Mail Center will scan insurance mail electronically and distribute it directly to the computer screens of the appropriate customer support staff members. The Leipzig customer support center is expected to resolve 80 percent of requests and leave no need for further action, which should make procedures substantially faster for customers.

In product development, ADAG is focusing on assistance benefits. For some years now, the Company has had considerable success with such products – for example, the Haus- und Wohnungsschutzbrief, a kind of "emergency assistance coverage" for homeowners and renters.

Said Rupprecht:  "Merely reimbursing costs for property damage or a benefits claim only goes part way toward serving the customer. The customer’s biggest concern is to remedy the damage caused by an accident, a fire or a broken pipe, and to get the right help for an injury or illness, or if there’s legal trouble. That’s where we come in."

For the target group age 55 and over, this year ADAG will also be introducing two multi-line products on the market. Since February, 100 Allianz agencies are being expanded into banking agencies to provide integrated financial services. Agents and banking advisers can work out the best coverage and capital-building concept for their clients right on the spot. In 2007, we expect to welcome the one millionth Dresdner Bank customer brought in by an Allianz agency.

Despite its very demanding transformational processes, Allianz Deutschland AG will grow further in fiscal 2007. Said Rupprecht: "We intend to grow further in property insurance, even though the insurance association has projected that revenues in this sector overall will decline. We expect new momentum from the sale of our new products. Gains at Allianz Leben should also outperform the projections for the market as a whole. In health insurance, we expect to achieve at least the same growth rate as we did in 2006."

These documents are for information purposes only and represent neither an offer to purchase nor a solicitation of an offer to sell shares in Allianz Lebensversicherungs-Aktiengesellschaft. The terms and conditions of the voluntary public offer of Allianz AZL Vermögensverwaltung GmbH & Co. KG for the acquisition of shares of Allianz Lebensversicherungs-Aktiengesellschaft are contained in the offer document published on February 28, 2007 after approval of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). Investors and holders of shares of the company are strongly advised to read the offer document and any other documents published in connection with the voluntary public tender offer asthey contain important information. The voluntary public tender offer of Allianz AZL Vermögensverwaltung GmbH & Co. KG for the acquisition of shares of Allianz Lebensversicherungs-Aktiengesellschaft will be implemented exclusively in accordance with German law and applicable U.S. securities laws.

To the extent that this release states projections or expectations, or our comments have to do with the future, such statements may be associated with known and unknown risks and uncertainties. Actual results and performance may therefore differ materially from the expectations and assumptions mentioned here. In addition to other causes not listed here, discrepancies may result from changes in the general economic picture and the competitive situation. They may also result from the scope or frequency of insurance claims, cancellations, and mortality and morbidity rates or trends. Further material influences may derive from changes in the financial markets and in foreign-exchange rates, as well as in the applicable laws, especially regulations regarding taxes and health policy. Terrorist attacks and their consequences may increase the probability and scope of discrepancies. The company assumes no obligation to update forward-looking statements.