Welcome to our 2008 Sustainable Development report which describes our work to build value for our customers, employees, shareholders and the community.

As a global risk manager operating in 70 countries and serving more than 80 million customers, a sustainable approach is essential for our business.

Demographic change, climate change, evolving social security systems as well as the opportunities provided by economic development in every region of the world are affecting our business today and will do even more so tomorrow.

Providing innovative product solutions that support our clients in meeting today’s global challenges is an integral part of our strategy.

Looking back, I am proud of how much we have achieved. For example, four years ago climate change was a topic left to reinsurers. Today, we support our clients in meeting the challenges posed by climate change, for example, by empowering them to rebuild their homes according to the highest ecological standards. We also transfer risks to the capital markets as shown by our disaster bonds for flood risks. Further, by 2010 we will have invested more than €500 million in renewable energy.

We are also working in developing countries like India, Indonesia and Egypt to provide microinsurance products that help people and markets to develop. In this effort, we cooperate with partners like the UN Development Program, the GTZ, CARE, PlaNet Finance as well as local organizations.

This business approach has earned Allianz external recognition including being listed by Ethisphere as one of the world’s most ethical companies. We aim at strengthening this leadership role through our new Allianz4Good platform that enables our employees to take an active role in furthering our sustainable development strategy.

The message is clear – knowledge enables innovation, innovation empowers solutions and solutions drive business.

In reading our report, you will gain a clearer picture of how we are part of the solution. For the first time, we have included a materiality assessment in this report, identifying those issues with greatest relevance to our stakeholders and our business. This assessment allows us to further focus our efforts and generate the greatest long-term value for all of us.

Please share your comments with us. Your feedback is integral to our success.

Sustainability reports have proliferated in both number and scope over recent years. Key to effective reporting is determining which issues are the most ‘material’.

Our web reporting covers the sustainability issues we have determined as being the most relevant to Allianz and our stakeholders, based on the following criteria:

Issues with current or potential impact on the company: this involved consultation with key business units, including Group Development, as well as an analysis of trends, research and business results.

Issues of significant concern to stakeholders: to better understand what our stakeholders expect from us, we conducted a stakeholder survey with media, political, non-governmental, scientific and economic communities to prioritise these issues. (Link to employee magazine)

Below is our ‘materiality matrix’, which plots the above information to help illustrate which issues are most relevant for Allianz. The position of each issue represents our understanding of its relative importance to Allianz and its stakeholders at the time of reporting. Stakeholders’ views and the potential impacts of these issues on our business change over time, so we will be reviewing the matrix on a regular basis.