Net revenue from banking ¤ bn 3.9 – 0.2 – 0.2 93
_The Dresdner Bank Group was integrated into the financial statements of Allianz Group as of July 23, 2001.
_In fiscal 2001, total premium income increased by 9.4 percent to 75.1 billion euros.
_Turmoil in the capital markets and the terrorist attack of September 11 on the United States had a significant impact on our earnings.
Insurance reserves for life insurance where the investment risk is carried by
Fee and commission income, and income resulting from service activities 4.8 2.2
_ In fiscal 2001, total premium income increased by 9.4 percent to 75.1 billion euros.
_ Turmoil in the capital markets and the terrorist attack of September 11 on the United States had a significant impact on our earnings.
Net revenues from asset management ¤ bn 2.0 1.1 0.5 – –
Looking back upon a year that was marked by more turmoil and confronted us with greater challenges than many a year in the recent history of your company, an original remark by
Konrad Adenauer, the first Chancellor of the Federal Republic of Germany came to mind.
A new dimension in destructive terrorism not only took the lives of thousands of human beings and inflicted tremendous pain and suffering on colleagues, friends and relatives of the victims; the attack also resulted in insurance losses of unprecedented magnitude and dealt the world’s financial markets a severe blow. Against the background of a recessionary economic environment, these factors combined to have a devastating effect on our operating results.
For you, our shareholders, this is certainly every bit as disappointing as it is for my colleagues and myself. But does this mean we have to rethink the way we do business in light of recent developments? In various areas, this process is off to a good start. Examples include the creation of an early-warning system, review of our comprehensive risk controlling,
When you look at the newspapers, you are sure to find any number of reports on companies that have evidently forgotten what they stand for. Some have already disappeared, without having produced a single euro or dollar in earnings. That is not our world – Allianz stands for sustainability, continuity and predictability. Since 1992, we have improved the performance of your company year after year and thus generated the value you justifiably expect from your company. Following the setback in 2001, we have every confidence that we will be able to return to a path of growth in the current year.
we are poised to capitalize on the enormous opportunities in the growth market for long-term insurance and investment products in Germany. We have a diversified product portfolio that offers a complete array of solutions for insurance, retirement benefits, asset management and banking needs. Plus we are setting up a multi-channel distribution network that will make us a unique single-source provider of integrated financial services and allow us to address any and all needs that our customers might have.
Bank and take appropriate profit-driven measures to restructure its operations. Secondly, we will continue to enhance the operational efficiency of our property and casualty insurance activities, especially in the area of industrial insurance, and the same applies to our asset management business. We are making a concerted effort to accelerate growth in these segments. Thirdly, we intend to leverage our solid, broad-based platform in the areas of private retirement insurance and corporate pension plans to further strengthen our position of leadership in this growth market throughout Europe in general and in Germany in particular.
Ladies and Gentlemen, a difficult year lies behind us and, despite all optimistic forecasts at the present time, we cannot know how the world economy will develop in the future.
Together with Dresdner Bank, we have set ourselves ambitious targets for the years to come.
D R. H E N N I N G S C H U LT E-N O E L L E
D R. PA U L AC H L E I T N E R
D E T L E V B R E M K A M P
D R. R E I N E R H AG E M A N N
D R. H E L M U T P E R L E T
We monitored the activities of the Board of Management in accordance with the responsibilities assigned to us by legal regulations and the company’s articles of association. The Supervisory Board met five times in the course of fiscal year 2001. Between the meetings, the Board of Management kept us informed of important developments in written reports. In addition, the Board of Management notified the Chairman of the Supervisory Board of major developments and decisions as and when they occured.
The Supervisory Board received regular reports on business developments and the economic situation of the Allianz Group, Allianz AG and major affiliates. Reports of the Board of Management submitted to the Supervisory Board included the consolidated financial statements and interim reports of the Allianz Group, which were prepared in compliance with IAS accounting rules. We also received in-depth information on corporate planning for fiscal year 2002.
Board of Management with support to facilitate management and control of the entire group.
Other topics of discussion The Board of Management reported to us on the ramifications for the Allianz Group of the terrorist attack of September 11, 2001. Notwhithstanding the financial burden imposed upon us by these events, we were above all relieved to hear that all Allianz employees working in the World Trade Center were able to leave the buildings in time and unharmed.
We also discussed the creation of Allianz Global Risks Rückversicherungs-AG. This company will assume responsibility for centralized coordination of international industrial insurance for major Allianz Group customers. Considerable effort will be required to enhance the earnings performance of these activities. We will closely follow further developments in this area.
The Supervisory Board was able to ascertain that Allianz is very well prepared for the German pension reform, which went into effect at the beginning of 2002. The company has a broad marketing platform and a comprehensive range of offerings that meet all needs in the area of private retirement insurance and company pension plans.
We unanimously approved the Board of Management’s decision to offer Allianz shares at special conditions to employees in over 20 countries. For the first time, employees of Dresdner Bank were also eligible to participate in this share plan. The Long-Term Incentive Plan, which allows senior Group management to participate in the long-term performance of Allianz Aktiengesellschaft, was also expanded to include top-tier management of Dresdner Bank.
AG Wirtschaftsprüfungsgesellschaft, Munich, audited the annual accounts of Allianz AG and the consolidated financial statements of the Group as of December 31, 2001, as well as the management reports of Allianz AG and the Group and issued its certification without any reservations.
Members of the Supervisory Board and the Board of Management Several changes occurred in the composition of the Supervisory Board, partially as a result of the integration of Dresdner
Dr. Bernd W. Voss to succeed Dr. Titzrath. Dr. Schmidt will be succeeded by Dr. Uwe Haasen as an elected substitute member.
D R . D I E T H A R T B R E I P O H L Former member of the Board of Management, Allianz Aktiengesellschaft
K L A U S C A R L I N Consultant/Trainer, until July 11, 2001
B E R T R A N D C O L L O M B Président Directeur Général, Lafarge
H I N R I C H F E D D E R S E N Member of the Federal Steering Committee, ver.di – Vereinte Dienstleistungsgewerkschaft, since August 20, 2001
R E I N E R L E M B K E Employee, Allianz Versicherungs-AG, until September 1, 2001
R E I N H O L D P O H L Janitor, Allianz Immobilien GmbH
G E R H A R D R E N N E R Member of the Board of Management, Deutsche Angestellten-Wohnungsbau-AG (DAWAG), until July 11, 2001
D R . A L B R E C H T S C H M I D T Spokesman of the Board of Management, Bayerische Hypo- und Vereinsbank AG, until June 12, 2002
D R . M A N F R E D S C H N E I D E R Chairman of the Board of Management, Bayer AG
D R . H E R M A N N S C H O L L Managing Director, Robert Bosch GmbH
J Ü R G E N E . S C H R E M P P Chairman of the Board of Management, DaimlerChrysler AG
J Ö R G T H A U Employee, Vereinte Krankenversicherung AG
A T A G L A N C E , O V E R A L L B U S I N E S S D E V E L O P M E N T
G R O U P M A N A G E M E N T R E P O R T
Property and Casualty Insurance 96, Credit Insurance 112, Travel Insurance and Assistance Services 113
Group Controlling 134, Risk Report 137, Our Employees 147, Outlook 150
In addition to members of Allianz AG’s Board of Management, the International
W I L L I A M R AY M O N D T R E E N Cornhill Insurance, London
L E O N H A R D H. F I S C H E R Dresdner Bank, Frankfurt/Main
W I L L I A M S . T H O M P S O N PIMCO, Newport Beach
J E F F E R Y H . P O S T Fireman’s Fund, Novato
I N T E R N A T I O N A L P R E S E N C E 12
A L L I A N Z G R O U P 13
4. We recognize that a sustainable performance requires primary focus on operational excellence and organic growth, supported by profitable acquisitions.
5. We aim to be among the top five competitors in the markets in which we choose to participate.
These fundamental convictions lead us to the five strategic priorities listed below. They reflect a new strategic vision of the changing realities in the international financial services market: we see ourselves as a global financial services provider with activities in insurance, banking and asset management.
_ increasing our asset gathering capabilities by building customer specific, multichannel distribution platforms.
Jones EURO STOXX 50 and Dow Jones EURO STOXX Insurance indices.
The Allianz share remains a profitable long-term investment. Over the last ten years, the value of our share increased on average 11.7 percent per year (including dividends).
As a guideline for long-term investors, we have calculated the increase in value produced by an investment in Allianz shares over different periods in the past. The starting point for these calculations is December 31, 1991. At this point, 10,000 euros are invested in Allianz shares and all dividends and subscription rights are reinvested in additional shares. As a basis for comparison, we use the performance of an investment of the same amount in DAX shares.
Development of an investment of 10,000 euros in Allianz shares and in the DAX
The events of September 11 have left their mark on our balance sheet. In view of these circumstances, our original earnings forecast of 2.7 billion euros could no longer be maintained.
Weighting of the Allianz share in European indices on December 31, 2001 in %
We take it as a good sign that almost all former shareholders of Dresdner Bank have accepted our exchange offer and redeemed their stock for Allianz shares. Since 94.1 percent of the shareholders addressed accepted our offer, Allianz now has 440,000 shareholders instead of the previous 265,000.
Our foremost objective is profitable growth. This is why we use “Economic Value Added”
Average number of shares in the fiscal year1) 243,585,880 245,401,507 245,013,485
Average number of shares traded per day on Xetra 1,008,085 610,611 464,375
Return on equity, adjusted2) before depreciation 1) Excluding treasury shares 2) After elimination of special factors, in particular, a tax effect of ¤ 1.1 bn in 2000
For the first time, Allianz shareholders will be able to follow the entire 2002 Annual General
Security identification no. 132 275 5.75 % bond issued by Allianz Finance B. V., Amsterdam
Security identification no. 194 000 5.0 % bond issued by Allianz Finance B. V., Amsterdam
At the issuer’s discretion, exchangeable for /repayable by E.ON AG, BASF AG,
Security identification no. 600 385 1.25 % exchangeable bond issued by Allianz Finance II B. V., Amsterdam
level. The bond has a maturity of up to three years. It is repaid on the basis of the DAX level at the time of redemption. At the issuer’s choice, repayment can be made in the form of shares in E.ON AG, BASF AG, Münchener Rückversicherungs-Gesellschaft AG or certain other shares.
This bond has a maturity of five years. At maturity, repayment can be made in the form of shares in RWE AG. The holder of the exchangeable bond receives a guaranteed interest of 1.25 percent plus the full benefit of any RWE share price increase.
March 20, 2003 Financial press conference for the 2002 fiscal year
These four categories – sustainability, corporate citizenship, corporate governance and purpose of business – sum up our company’s code of ethical behavior. We have already made considerable progress in these areas but are, at the same time, fully conscious of the fact that corporate responsibility is an open-ended process that gives rise to new dimensions every day.
Shortly thereafter, our shares qualified for the Dow Jones Sustainability STOXX Index. Inclusion in these two indices is limited to the top 10 percent of the companies in a given industry rated in terms of corporate sustainability. Today, Allianz shares are held by ten different sustainability funds that manage their investments by relying on their own research. This recognition will help us convince even skeptical stakeholders that we are moving in the right direction.
Allianz Group’s Rating in the Dow Jones Sustainability Group Index In % of maximum score
_ sustainability will become a permanent part of our in-house management training.
_ we intend to make sustainability reporting increasingly more objective, for example, in the area of asset management.
_ as members of the World Business Council for Sustainable Development of the United Nations Environmental Program and the Global Compact (United Nations) and the “Ecosense”
Our activities in these areas include active initiation of and support for future-oriented projects. We try to encourage the efforts of others, to implement promising ideas and to network with those who share our commitment. For us, it is important not only to provide financial support but also to contribute creative input and to involve our employees wherever possible.
Various of these activities are coordinated by Allianz foundations. Two foundations are already at work with a comfortable endowment of 51 million euros each, and a third is currently being created.
Each of these foundations has been assigned to a specific area of activity. Their geographic orientation reflects the international scope of the Allianz Group. The Allianz Environment
Foundation has supported over 50 major projects and more than 1,400 smaller undertakings.
In the course of the reporting period, the diverse activities of the Environment Foundation, became more closely correlated with the overall Allianz strategy for sustainable development.
Our Culture Foundation also lives from the idea of networking. We want to build bridges and create cross-border contacts among young people from all over Europe who are involved in cultural activities. In addition to our projects, forums and seminars regularly bring together
Strasse 4a, D-81675 Munich (Phone +49 89 4107-303, Fax +49 89 4107-3040).
Dresdner Bank has endowed the Jürgen Ponto Foundation for the past 25 years. This sponsors highly talented young artists and was particularly active in supporting educational projects during 2001. The bank’s commitment to Dresden – its founding city 130 years ago – is very high. For many years, Dresdner Bank has been active in supporting reconstruction of the
Frauenkirche (Church of Our Lady), one of the masterpieces of Baroque architecture. The citizens of Dresden and institutions have now donated over 51 million euros to this project. Dresdner Bank is determined to ensure that the additional sum of 28 million euros required to complete the Frauenkirche in 2005 is collected. The Jürgen Ponto Foundation also provides support in many ways for the cultural life and cityscape of Dresden and for promoting science and arts in the capital of Saxony.
Corporate Governance Corporate governance encompasses issues having to do with corporate management, control and transparency. We are open to further improvements in corporate governance in Germany and are involved in the corresponding commission of the German government. As the country ’s largest institutional investor, we also welcome the adoption of a corporate governance code.
Since 1999, Allianz has been reporting according to IAS/U.S. GAAP. Since our debut on the New York Stock Exchange, we have complied with the stringent regulations of the U.S.
Securities and Exchange Commission in our financial statements and in communication with capital markets. This body of regulations is accepted worldwide as the benchmark for measuring the success and quality of companies. In this respect, we are already following all recommendations contained in the German corporate governance code.
Meeting will be asked to ratify an increase in the remuneration of the members of these committees. To the extent that data were available, the present Annual Report already complies with the recommendations of the German Corporate Governance Code. The “statement of compliance” called for by the code will be published as soon as the legal prerequisites have been put in place and the Board of Management and the Supervisory Board make a decision as to whether or not to apply a provision in the code that allows for deviation from the recommendations of the Commission with explanation of the reasons for doing so.
In our opinion, corporate governance is not limited exclusively to compliance with the guidelines and legislation alluded to above. More than anything else, it has to do with corporate culture and the personal integrity of those who are responsible for determining the degree of transparency and accessibility of a company vis-à-vis its stakeholders.
_ We provide our customers with access to the funds they need to pursue their private and business activities. In addition, we offer our corporate and institutional customers our comprehensive knowledge of investment banking.
Our purpose of business – security – also meets a basic human need. It ranks immediately after the need for food, clothing and shelter, according to studies by psychologist Abraham
Maslow. Even if our customers are spared losses through a benevolent fate, our insurance products shoulder the burden for them. They need not worry as much about the financial implications of an insured risk, which is especially important because they are seldom in a position to influence the probability of occurrence.
The world of Allianz hat is Allianz really like? What issues interest the Group? What are the people like who contribute to the success of one of the world’s leading providers of financial services? These are questions which financial statements do not address, at least not in detail. Figures, totals, charts and comments on business developments represent important information for investors, but investors often also want to gain insight into the way a company works, how it handles challenges, how it acts, not only in terms of strategy but also at the operational level.
In the year 2001, the world economy exhibited the lowest growth since 1991. In the spring, major industrial countries – the United States, Japan and Germany – slipped into recession.
Pressure on consumer prices increased, peaking in mid-year to taper in the months thereafter.
Our life insurance business will benefit over the long term from the revamping of public pension systems (see page 56 of this Annual Report for more information). People are beginning to realize that they have to make provisions for retirement on their own. In the reporting year, the German pension reform (“Riester pension”) stimulated substantial demand for private retirement insurance although the law did not come into effect until 2002. Since many products remained uncertified for a long period during the year under review, this tended to reinforce a wait-and-see attitude on the part of consumers. On the other hand, there was a strong resurgence of interest in employment disability insurance in Germany, driven by changes in the country’s social security legislation. Due to weak stock markets, demand for unit-linked products was down in the euro zone countries, excluding Austria and Belgium.
Central and Eastern Europe In the countries seeking entry to the European Union (EU), GDP growth dropped from an average of 3.9 to 2.7 percent, primarily due to the weakness of Western Europe’s economy. On the other hand, domestic demand in this region increased significantly, giving the insurance industry an additional boost. This was the case in Poland, where economic performance did not keep pace with that of the other countries. The rate of inflation dropped slightly despite higher oil prices.
Canada and Mexico. The year 2001 marked the abrupt end of a nine-year period of uninterrupted dynamic economic growth for the United States. The country’s GDP grew an average of 1.2 percent for the year. In the third quarter, the U.S. economy contracted. In the aftermath of September 11, companies increased efforts to reduce their workforces. However, consumer demand remained surprisingly strong. The Canadian economy mirrored that of the U.S., as is shown by the following chart.
The waning economy resulted in weakness in the insurance industry markets as well. The situation in the area of property and casualty insurance took on dramatic proportions, especially in Argentina. Some business was abandoned. On the other hand, premium income from life insurance remained stable, both in Argentina and Brazil. Demand was concentrated especially on unit-linked products. The banking sector in this region performed better than expected, except in crisis-plagued Argentina.
Asia-Pacific Region and Australia Economic growth dropped by half to 3.8 percent in the Asian emerging markets. The Chinese and Indian economies performed well, but those of Taiwan and Singapore, Malaysia and Thailand were extremely weak. What these economies have in common is that they are all very dependent upon exports and high-tech industries.
Given this situation, it was not possible to maintain the earlier growth of premium income from property and casualty insurance activities. Life insurance, traditionally a source of solid growth in this part of the world, was also negatively affected by the economic downturn. The situation on the capital markets put a damper on asset management business as well. However, this does not in any way change the long-term prospects for growth in this region.
Financial market developments have a decisive impact on the insurance, banking and asset management activities that Allianz is involved in through the world. These markets determine the performance of different types of investments and change the demand patterns of our customers. In the course of the 2001 reporting period, fixed-interest securities outperformed stocks, as was the case in the previous year. But investors exhibited a clear preference for investments that were not exposed to price risks.
Stock markets All major international stock market indices ended the year with a loss. In particular, indices with a high percentage of telecom, media and technology stocks took a heavy knock. Germany ’s DAX share index closed with a loss of 20 percent for the year, as did the Dow Jones
EURO STOXX 50. Against the background of these losses and given that the economic downswing was even more pronounced in the U.S., American indices performed substantially better. The Dow Jones Industrial Index was down 7 percent for the year and the Standard & Poor’s 500 was down 13 percent. This can be attributed to the forceful interest rate policy of the U.S.
The weakness in the stock markets up to the summer of 2001 was a result of the slowdown in the economy. Investors recognized that they would have to lower their expectations of company earnings. Following the September terrorist attack, there was a general reluctance to get involved in the stock market. However, the markets recovered surprisingly quickly from their lows in late September. On December 31, 2001, most indices closed upon their September 10 level.
_ As of July 23, 2001, the accounts of the Dresdner Bank Group have been included in the consolidated financial statements of the Allianz Group. This resulted in significant changes in both the balance sheet and the income statement. The reporting format is oriented towards international common standards.
_ Profit for the year came to 1.6 billion euros, more than 1.0 billion euros less than originally planned.
The downturn in the world’s financial markets triggered by the September 11 attack also impacted negatively upon our activities. We were obliged to take a write-down of 1.6 billion euros on investments, which affected earnings.
_ weakness in the capital markets dampened our activities in life and health insurance.
_ in the area of asset management, earnings were down significantly from the preceding year.
_ the discouraging situation in the financial markets had an unusually severe impact upon our banking business, which consists almost exclusively of the activities of Dresdner Bank.
_ capital gains realized which have been recognized, to a great extent, as tax-free in accordance with IAS guidelines.
The resultant tax saving, which will be offset against future earnings, must be carried as an asset in our balance sheet, and this results in a net tax benefit.
Minority interests in earnings decreased by 233 million euros to 1.0 billion euros. Net income after deducting minority interests amounts to 1.6 billion euros. Compared with the previous year’s figure, which was favorably impacted by special tax effects, this represents a decrease of 53 percent. Compared with adjusted net income for the preceding year, the decrease still comes to a substantial 32 percent. Earnings per share came to 6.66 euros.
We propose that the Annual General Meeting ratify our proposal to distribute a dividend in the amount of 1.50 euros per share for the 2001 fiscal year. As a result, the dividend will remain unchanged with respect to the previous year.
The effects of fluctuations in exchange rates, in particular changes in the value of the U.S. dollar and the pound sterling with respect to the euro, offset one another. After restatement to eliminate the effects of consolidation and translation differences, total insurance sales were up 8.2 percent.
Asset management Assets under management with the Allianz Group increased to 1.2 trillion (0.7) euros in the reporting year. The Dresdner Bank Group contributed 414 billion euros to this sum. Investments for private and institutional investors were up 284 billion euros to 620 billion euros, of which 211 billion euros derived from the fund-management activities of Dresdner Bank and 29 billion euros from those of Nicholas Applegate. Asset management activities suffered from the depressed situation of the capital markets, which made customers uncertain and reluctant to make investments.
Group and reflects virtually exclusively the activities of the latter. The Dresdner Bank’s accounts have been included in our financial statements since July 23, 2001. Net revenues in the banking segment amounted to 3.9 billion euros. This sum includes net earnings from interest and commissions as well as trading profit. The downturn in the capital markets, especially in the third and fourth quarters, severely impacted the banking segment’s earnings.
_ we created ADVANCE Holding, which operates a direct bank and manages the activities of mobile financial planners. We are now in the process of building up this third, independent distribution channel for upmarket financial advising in Germany.
_ Dresdner Bank, Deutsche Bank and Commerzbank have grouped their mortgage banking activities under the “Eurohypo” brand to create a provider of financing for commercial real estate capable of competing throughout Europe.
Shareholders’ equity Shareholders’ equity amounted to 31.7 billion euros at the end of the reporting period, which takes into account 25,238,465 treasury shares purchased for 5.8 billion euros. Shareholders’
equity was down 3.9 billion euros from year-end 2000, primarily due to the fact that the net result of unrealized gains and losses on equities decreased as a result of lower stock market prices.
Human Resources The total number of employees worldwide increased by 60,263 to 179,946 at year-end 2001, most of which resulted from the integration of the Dresdner Bank Group.
(clause § 71b AktG) are not entitled to receive a dividend. Further purchases or sales of own shares during the period prior to the Annual General Meeting may increase or decrease the number of shares eligible for dividends. In this case, an amended proposal for the appropriation of profit based upon an unchanged dividend in the amount of 1.50 euros per eligible share will be submitted to the Annual General Meeting for ratification.
Travel insurance and assistance services 732 656 581 *) Before cross-border consolidation
Travel insurance and assistance services 3 24 23 *) Earnings after taxes, before amortization of goodwill and minority interests, net of extraordinary tax items in 2000
_ Net investment income decreased by 13 percent to 7.3 billion euros.
Germany, Great Britain, Spain and France, were primarily responsible for this improvement.
Disregarding the World Trade Center losses, the claims ratio improved by 1.2 percentage points to 76.7 percent. This was due to premium adjustments, lower claims frequency in many countries and the absence of major natural catastrophes. In addition, we were able to reap the initial benefits of our portfolio revitalization strategy, for example, in Great Britain, Austria and
Net investment income amounted to 7.3 billion euros, which reduced this item in relation to premium income by 5.4 percentage points to 21.3 percent. Investment income was mainly affected by write-downs of our stock portfolio required by IAS due to negative market development.
Total premium income rose by 696 million euros or 5.8 percent to 12.6 billion euros.
Earnings after taxes improved by 63.8 percent to 3.8 (2.3) billion euros.
Premium income of SGD increased by 5.2 (1.7) percent to 10.1 billion euros. Despite a difficult market situation, the Group was able to achieve considerable improvement over last year’s slight growth in income.
Automobile insurance produced especially strong growth in premium income due to the positive impact of higher premiums, and premium income was up 4.8 (1.5) percent. In the reporting year, SGD insured a total 9.17 million vehicles, down slightly from the previous year’s figure.
The claims ratio improved to 70.9 (72.2) percent. Claims resulting from the attack on the
World Trade Center, which amounted to 67 million euros for SGD, were more than offset by the favorable development with respect to claims frequency. A decrease in the number of natural disasters was especially advantageous for us.
Substantial investments in the expansion of marketing capabilities and information technology (IT) increased the expense ratio to 26.8 (25.4) percent.
SGD reported investments in the amount of 22.0 billion euros. Net investment income rose to 1.9 billion euros, an increase of 221 million euros over the preceding year.
SGD's earnings after taxes improved by 825 to 1,660 million euros.
The claims ratio jumped to 86.3 (75.7) percent. This indicator was dramatically impacted not only by the attack on the World Trade Center but also by an increase in the number of major losses in the area of industrial insurance.
Investments of Allianz AG increased from 62 to 83.8 billion euros. Net investment income rose to 3.1 (2.9) billion euros, primarily due to realized capital gains.
After several years of sluggish growth, premium income rose a substantial 13.6 percent in 2001.
_ We are represented by the property and casualty insurance companies of the RAS Group and Lloyd Adriatico in the Italian market.
Premium income of the RAS Group was up 9.1 percent to 3.4 billion euros. Lloyd Adriatico, a company that sells primarily automobile insurance, posted premium growth of 3.4 percent to 1.2 (1.1) billion euros.
Net investment income of the RAS Group rose to 491 (413) million euros, while that of Lloyd
_ This company resulted from the merger of our ELVIA, Berner Versicherung and Allianz Schweiz companies .
_ With sales of 1.2 billion euros, Allianz Suisse Versicherungs-Gesellschaft ranks third in its market.
Due to weak stock market performance, net investment income fell significantly to 164 (330)
As a result, earnings after taxes deteriorated to 121 (199) million euros.
ART provides comprehensive risk management solutions to companies in the service, financial and industrial sectors. These products combine both financial and insurance expertise.
This highly profitable business segment now accounts for 20 percent of ART’s total portfolio.
Total earnings after taxes fell to 34 (47) million euros, primarily as a result of the attack on the World Trade Center.
_ This subsidiary increased its premium income by a substantial 18.4 percent to 2.5 billion euros.
_ Allianz Companía de Seguros y Reaseguros, our property and casualty insurer, ranks second in its market.
_ We sell property and casualty insurance in the Netherlands, Austria, Ireland, Belgium, Portugal, Luxembourg and Greece and are present in Hungary, Slovakia, the Czech Republic and Poland. In addition, we write property and casualty insurance in Croatia, Bulgaria, Rumania and Russia.
In Central and Eastern Europe, sales were up approximately 20 percent to 937 million euros, primarily due to further expansion of our automobile insurance business in Hungary. With a total market share of 8 percent, we continue to be the leading international insurer in this emerging region.
Earnings after taxes improved to 112 (55) million euros. The main contributing factors were the return to profitability of our Austrian company and the strong performance of Allianz
In Russia, we acquired a 45 percent interest in the Rosno insurance company coupled with an option to acquire a majority interest in this company in the future. This considerably strengthened our presence in this market. If the acquisition of the former government insurer in Slovakia is successful, we will move up to first place in this growth market.
In the current fiscal year, we are planning to further expand the reach of our sales network and to reinforce our market position. Here too, we are aiming for profitable growth, which means that we make every effort to see to it that expansion of our activities does not jeopardize our earnings targets.
_ Our property and casualty insurance companies in the North American Free Trade Association (NAFTA) generated sales of 6.8 billion euros.
_ Fireman’s Fund Insurance Company (FFIC) and Allianz Insurance Company (AIC) cover the U.S. market.
_ new product lines in the areas of liability, marine and agricultural insurance performed very well.
FFIC’s accident year’s claims ratio for 2001 improved by a substantial 12.7 percentage points to 80.1 percent. However, since we had to strengthen insurance reserves for the business segments we abandoned, this progress is reflected only partially in the calendars’ year claims ratio, which improved from 88.6 to 84.7 percent.
Net investment income of FFIC was depressed by substantially lower realized gains and write-offs on investments.
FFIC’s new management is making an all-out effort to bring the company back to profitability. Unprofitable product lines are being removed from the market. Further radical corrections in the company’s portfolio, higher premiums and an extremely restrictive underwriting policy are expected to get this company back on track. At the same time, FFIC is expanding profitable lines such as agricultural insurance and group business. Its organizational structures are being thoroughly streamlined.
Trade Center more than any other company in the Allianz Group and ended the year with a loss of 472 million euros.
Allianz Canada recorded premium income in the amount of 539 (516) million euros. Sales in Mexico stagnated at 136 million euros.
The claims ratio for all our companies in the NAFTA region jumped to 99.9 (87.9) percent due to the fact that effects of the September 11 attack are reflected in the 2001 financial statements.
_ Our total sales in the Asia-Pacific region amounted to 1.3 billion euros.
Premium income increased significantly in almost all markets in which we are active.
In the other markets in this region, we were able to continue our success of the previous year and generated earnings after taxes of 6 million euros.
Together, our companies in the Asia-Pacific region reported earnings after taxes of 11 (39) million euros.
However, this represented a considerable improvement over the preceding year. In other countries, notably in Brazil, earnings showed substantial improvement. This put us back in the black in this region, where we showed a loss of 27 million euros the previous year. In 2001, earnings after taxes amounted to 29 million euros.
We also serve the casualty and property insurance markets in the West African countries of
Austria, Scandinavia, Central and Eastern Europe, Portugal and the Asia-Pacific region.
Premium income amounted to 1.6 billion euros, down just 1.4 percent from the preceding year. This was due to the fact that in 2001 income from service contracts was no longer treated as premium income but rather as other income. Without this change, premium income would have shown a 7.6 percent increase.
This accounting change also had a considerable effect on the claims ratio, which deteriorated from 46.6 to 68.0 percent. Without the change, the claims ratio, which was unfavorably impacted by a large number of major losses, would have risen to 58.6 percent.
In the current fiscal year, we will combine the activities of our two credit insurance companies under EULER & HERMES S.A. As the leading credit insurer worldwide, this will enable us to achieve the greatest possible synergies, which, among other factors, will be generated by a uniform market presence, the pooling of administrative services and IT operations and the exchange of experience and expertise.
_ With sales of 910 million euros, the Mondial Assistance Group ranks among the leading service providers in this market segment.
_ In the course of the reporting period, we strengthened our position in assistance services in the Asia-Pacific region by acquiring World Care Assist in Australia and Auto Assist in Thailand.
Together with its subsidiaries, Mondial Assistance provides assistance services in 28 countries. A tightly-knit network of partners ensures first-rate customer service around the globe.
Mondial Assistance has approximately 6,500 employees. One of its strengths is its business with institutional clients, primarily travel operators and insurance companies as well as banks and carmakers. In 2001, Mondial Assistance arranged assistance for customers of these business partners in 180 countries.
The claims ratio in the travel insurance business rose only slightly to 64.4 (63.2) percent. The expense ratio, however, once again showed substantial improvement, going from 36.5 to 33.4 percent. This positive development was accelerated by the regrouping of our activities in the
Mondial Assistance Group, which had already produced noticeable improvements in the preceding year.
(24) million euros. This sharp decline is attributable to lower investment income and higher expenses for assistance services.
Asia-Pacific Region 3,945 3,241 3,174 *) 2001 excluding own used real estate
_ Total sales increased by 8.6 percent to 33.7 billion euros.
The following table shows sales generated by investment-oriented products in the various countries.
In IAS accounts, which reflect sales of investment-oriented products only to a limited extent, premium income decreased slightly by 0.5 percent to 20.1 billion euros. When evaluating the stagnation of the traditional life insurance business, it should be noted that in the previous
year our French subsidiary AGF sold a group contract with a non-recurring premium of 800 million euros. Disregarding this one-time effect, growth of these products reached a satisfactory level of 3.6 percent. This increase was primarily generated by life insurance sales in the
U.S. – for the most part annuity insurance – and the successful launch of new products in
Earnings before taxes and amortization of goodwill fell by 68 percent to 0.6 billion euros.
_ In this market, we offer life insurance products through Allianz Lebensversicherungs AG, Deutsche Lebensversicherungs-AG and Vereinte Lebensversicherung AG.
Life insurance The premium income of our German life insurance companies decreased by 1.2 percent to 9.0 billion euros. This hiatus after many years of continuous growth is attributable to two factors: _ on the one hand, the number of contracts reaching maturity increased substantially.
Investments fell to 106.4 billion euros in 2001. Net investment income, which was depressed by developments on the capital markets, amounted to 4.5 (8.1) billion euros.
Health insurance Premium income of Vereinte Krankenversicherung AG increased by 4.1 percent to 2.7 billion euros. The 4.8 percent growth of premium income from the core health insurance business resulted from new business and from the adjustment of premiums to reflect higher health care costs.
Due to lower realized gains, net investment income fell to 275 (457) million euros.
Earnings after taxes rose to 48 (34) million euros. This increase is primarily due to an adjustment of deferred tax assets and liabilities to the future projected fiscal situation of Vereinte Kranken.
For the current fiscal year, Vereinte Krankenversicherung AG expects to increase its sales by about 6 percent. The company continues to invest in streamlining the workflow of its in-house and field services departments. Efforts to reduce the claims ratio focus on benefits and health management. For the time being, however, continued cost increases in health care are limiting the potential for further improvement.
_ We have an excellent position in the Italian life insurance market with the RAS Group and Lloyd Adriatico.
The demand for fund-linked life insurance products continues to increase in the current fiscal year. The marketing agreement with the Unicredito Group and the dynamic development of
_ The AGF Group ranks sixth in the French life insurance market.
With a decline of 12.5 percent, our French companies shifted into reverse and posted a drop in sales, which is essentially attributable to two factors: _ sales of our investment-oriented products suffered from the volatility and general weakness of the capital markets, but fared better than the market as a whole.
Premium income in IAS accounts amounted to 1.6 billion euros. Disregarding the one-time effect of the group contract in the previous year, this represents a 3.9 percent increase over fiscal 2000.
The expense ratio increased to 52.0 (27.6) percent, which resulted from the fact that the high premium income from the group contract in the previous year was also a non-recurring item.
_ In Switzerland, our former companies were regrouped to form Allianz Suisse Lebensversicherungsgesellschaft.
Total premium income increased by 11.5 percent. This growth is primarily attributable to group business with a high percentage of single-payment premiums, while sales of individual life insurance policies continued to develop very slowly.
Since realized gains were significantly lower and investments (mainly stocks) had to be substantially revaluated, net investment income dropped from 424 to 220 million euros.
The situation in Switzerland will continue to remain difficult in the current fiscal year. The statutory guaranteed interest of 4 percent in the group plan business cannot be generated from current investment income. Substantial capital gains can hardly be expected as long as the present situation in the capital markets remains unchanged. If there is no significant and longterm improvement of the regulatory environment for our activities in Switzerland, we may have to revise our strategy.
Total sales increased by 22.6 percent. This increase would have been even more substantial were it not for the fact that Allianz Seguros sold two group contracts in the preceding year with non-recurring premiums that do not reappear in the 2001 financial statements. Private customers clearly showed growing demand for life insurance products with guaranteed interest. With these products, we achieved a growth rate of 60.3 percent, which is a result of our optimized marketing structure in Spain, as well as the measures taken to increase the productivity of our sales force. Fund-linked contracts without guaranteed interest, however, were less popular, which prevented our Eurovida bancassurance joint venture from repeating last year’s rapid growth.
The expense ratio improved to 4.2 (8.9) percent, clearly reflecting the savings resulting from the integration of our Spanish companies and high-volume pension contracts signed in the course of the year.
Total sales of life and health insurance in the other European markets amounted to 1.9 billion euros. In many countries we once again achieved double-digit growth rates, especially through sales of investment-oriented products. Premium income in IAS accounts increased to 1,148
_ Allianz Life of North America is our life insurer in the United States of America.
_ Appreciation of the U.S. dollar with respect to the euro contributed 4.3 percent of growth.
The most important business segment for Allianz Life, annuity insurance, continued its dynamic performance with a growth rate of 38.7 percent. Our recovery program in the fundlinked annuity business began producing results; for the first time since 1997, we expanded our portfolio, and new business is picking up. Life reinsurance is also performing very well.
Premium income in this segment amounted to 424 (366) million euros.
Gross premium income in IAS accounts amounted to a total of 1.2 billion euros, of which 1.1 billion euros originated from South Korea.
Earnings after taxes also improved for the region as a whole. The loss of 66 million euros in the previous year was reduced to 5 million euros. Earnings were negatively impacted by our company in Taiwan, which, in an extremely difficult business climate, reduced its losses but has not yet crossed the profitability threshold.
The year 2001 was an extremely difficult year for financial institutions, and this applies both to banks operating at the national level as well as institutions operating at the global level.
Interest-earning business suffered from persistently low interest levels and intensive competition with respect to conditions. Net interest income amounted to 2.4 billion euros.
Commission income suffered from the reluctant attitude of customers in the securities and issuing areas. Net fee and commission income amounted to 1.3 billion euros.
Following the takeover of the Dresdner Bank Group, our report now also includes a “banking” segment. This segment covers all Allianz Group banking activities, including the new “mobile investment advisor” marketing channel currently being established. However, our banking business is primarily comprised of the Dresdner Bank Group, which was integrated into the financial statements of Allianz Group as of July 23, 2001. This segment does not include the Dresdner Bank Group asset management activities, which are covered by our asset management segment.
We incurred administrative expenses of 3.3 billion euros. Above all, administrative expenses were inflated by bonus guarantees from the previous year. Although our cost-containment program began producing results, these will not be reflected in our financial statements until fiscal 2002.
The net total of other income and expenses amounts to 248 million euros. This includes income of nearly one billion euros from management of equity investments and expenses for realignment of the Dresdner Bank totaling 338 million euros.
Private customers Business with private customers was depressed by weak securities markets throughout the year 2001. Particularly affected by the bear market were commission-based financial services.
While our restructuring program succeeded in slowing down runaway costs, it was not possible to compensate for the significant drop in income. We set up loan loss provisions of 177 million euros. As a result, our business with private customers produced an after-tax loss of 111 million euros.
_ assets under management which include investments used to cover insurance provisions, equity capital and borrowed funds.
Asset management for third parties Over the past four years, we have expanded our asset management operations for third party investors into a core business area, mainly through acquisitions. Following the acquisition of
Management (ADAM) division. The division has uniform management and reporting structures, but each of its companies has clear competencies and its own responsibilities and decisionmaking powers. The internationally operating units are Global Retail, Global Equity and Global
_ This ranks Allianz among the five largest companies in this business segment.
Investments held on account and at risk of life-insurance policyholders 25 23
_ In Germany, we, jointly with Allianz Leben, obtained the mandate to lead the MetallRente consortium, which is projected to be the largest pension institution in this promising market. The award of this contract demonstrates that as a leading provider of know-how in the insurance, banking and asset management businesses, we can offer our customers unique service combinations that are well received in a newly opening market. This trend and the restructuring of our activities should enable us to attain above-average results in the future
A further 188 million euros was charged as “capitalized loyalty bonuses” for the management of the PIMCO group. These loyalty bonuses were part of the price paid for the company and will be amortized over five years. Additional retention payments intended to incite management and employees to stay with the company amounted to 186 million euros. These payments were also included in the PIMCO acquisition package and will be made over the next five to seven years. Retention payments amounting to 30 million euros were granted by
Minority interests in earnings amounted to 182 million euros. Of this amount, PacLife received 142 million euros. The former owner of the PIMCO group still holds a 30 percent interest in the company. A purchase option for these shares takes effect in January 2003.
Disregarding these items, Asset Management generated a pre-tax operating result of 313 million euros, bearing out the fact that the cost-income ratio is still unsatisfactorily high at 84.7 percent. This indicator was weighed down by the cost of setting up and restructuring the
Investments The current value of Group investments amounted to 527.4 billion euros. For the first time, this figure also includes Dresdner Bank investments in the amount of 203.1 billion euros. Altogether, Group investments grew by 11.3 percent compared to the amount established on a pro forma basis for the previous year (474 billion euros). The increase in value was weakened by lower stock market prices.
The current value of investments in affiliated enterprises, joint ventures and associated enterprises decreased by 5.1 to 24.4 billion euros. Most of these investments are in associated enterprises (i.e. companies in which we hold a share of between 20 and 50 percent), which are valued by the equity method. Our biggest holdings were Münchener Rückversicherungs-
Gesellschaft AG (Munich Re) (14.0 billion euros) and Beiersdorf AG (4.1 billion euros).
Real estate rented to third parties amounted to 16.7 billion euros in fiscal 2001, securities held to maturity to 7.7 billion euros.
Funds held by others under reinsurance contracts were valued at 3.4 billion euros.
Investments held on account and at risk of life insurance policyholders increased in 2001 by 8 percent to 24.7 billion euros.
Investments in the insurance business contributed 14.6 (21.3) billion euros to net investment income. This reduction was in particular due to a 6.5 billion decrease of realized gains and losses, which amounted to 1.0 billion euros at year-end (also see the table “Investment income“ on page 64 of the Consolidated Financial Statements).
The banking segment contributed a further 2.6 billion euros to investment income; 0.2 billion euros of this amount were generated by trading activities. In addition, current income amounted to 1.4 billion euros, realized capital gains and losses from disposal of investments to 1.1 billion euros and write-downs to 0.1 billion euros.
For these two reasons – local business and global accumulation risks – the basic principle in Allianz Group controlling is: “As decentralized as possible, as centralized as necessary.”
Strategic Holding Allianz AG operates as a management holding company. In exercising its control function, the
Board of Management is supported by the Group Center, which provides the following assistance: _ the Group Center formulates Group objectives applicable worldwide, adapts these objectives to the various business segments and companies and coordinates any necessary changes in the management dialogue.
The aim of Group controlling is to increase corporate value. We want to ensure that all the Allianz Group companies contribute to increasing corporate value across all our segments (insurance, asset management and banking). In this controlling process, Allianz AG acts as management holding company. The key indicator of our value-based corporate management concept is “Economic Value Added” (EVA).
Strategic planning and controlling The foremost aim of this process is the sustained increase of corporate value. We therefore identify the units that increase the value of the Group, as well as those that destroy economic value, and summarize the results of this ongoing analysis in alternative action plans. In this we are supported by an internal reporting system that provides a standardized, condensed and up-to-date picture of essential business developments throughout the Group.
Strategic portfolio management This process leads to decisions on capital allocation and portfolio optimization. The structure and focus of the portfolio are determined on the one hand by the acquisition and disinvestment of companies and on the other hand by the reorganization and realignment of existing Group companies. Capital must be employed with the highest possible effectiveness, meaning we invest in business segments and company units where we can expect results to clearly exceed capital costs on a sustained basis. But in this process, we also observe market cycles and their interdependency in order to utilize them for continued value increase and to limit the fluctuation of results. All this is done in the interest of increasing shareholder value.
Management deployment Our management trainees are identified at a Group level, supported and individually prepared to take on management responsibilities within the international
Management dialogue The purpose of this management instrument is to make sure that all company units contribute to sustained, profitable growth of the Group. In the management dialogue we agree on targets and discuss the concepts and activities designed to meet them. A vital ingredient of the management dialogue is the direct communication between decision-makers which unfolds in three phases.
Thereafter, the EVA target for the coming year is agreed upon in accordance with the topdown objectives specified.
_ In the late fall, we hold planning discussions are held at the Group companies to ensure that the agreed targets are effectively reflected in the detailed operating plans.
Economic Value Added How do we benchmark the success of our strategies and the measures taken to increase corporate value? We have adopted the value added concept, which has since become familiar under the name “Economic Value Added” or EVA. This concept determines: _ our objectives,
or EVA – shows to what extent we have been able to exceed the opportunity costs of our risk capital or not. The EVA calculation process has been customized to fit in with the specific requirements of our business.
Risk capital We determine the amount of risk capital required for the operating units or business segments by applying the following criteria: the risk profile of the individual companies or segments (for more information about risks, see pages 137 to 146 of this Annual Report) and the security level.
Fine-tuning How do operating units increase their EVA? First of all, by identifying all value drivers in their business and by continually monitoring their development. Secondly, by determining where values are created or destroyed in their value added chain. For this purpose, they observe such indicators as claims development, sales and personnel costs, new business or investments.
For several years, our internal reporting system has been based on rules that are comparable to international accounting standards. The differences between our internal and external reporting are diminishing increasingly because our external financial statements have also been prepared in accordance with International Accounting Standards since 1998.
Group Controlling assesses the Allianz Group’s risk exposure on the basis of local and global risks. The results of these analyses are then submitted to senior management. At the same time, Group Controlling ensures that the processes are transparent and comprehensive. Risk management activities are supervised by both internal and external auditors.
Risk Categories Total risk exposure of the Allianz Group is subdivided into individual risk categories: Actuarial risks These risks are based on the technicalities of the insurance business: we have to guarantee future payment commitments, and the volume of such payments must be calculated in advance. Different actuarial risks exist in the various insurance lines.
As providers of financial services, we consider risk management one of our core competencies. As a result, risk management is an integrated part of our controlling process, which involves identifying, measuring, aggregating and managing risks. This process is used to determine how capital is allocated to the Group’s various divisions.
_ the payout for claims made is higher than the corresponding provisions (reserve risk).
Credit and counterparty risks These risks involve potential losses that may result from the default of a business partner. “Default” means the inability or refusal of a counterparty, an issuer or another contracting party is incapable or unwilling to meet contractual obligations. Credit risk also includes the risk of a deterioration of a business partner’s creditworthiness. These risks also include counterparty risks from trading activities as well as country risks in connection with cross-border transactions and the local business of foreign units. Counterparty risks from trading activities relate primarily to derivatives and especially OTC transactions. In the insurance business, these risks stem from the possibility that receivables may remain unpaid, in particular those due from reinsurers.
In the banking area, the volatility risk primarily concerns trading activities, which are shown in the institution’s trading portfolio. Unlike the latter, the non-trading portfolio, which contains customer business and strategic investments, is exposed to long-term factors. In this case, the market risk is essentially the interest rate risk resulting from granting long-term fixed-rate loans, which are to some extent funded by short-term deposits. In addition, loans and deposits in foreign currencies are exposed to currency risks.
Investment risks in the insurance business primarily include all counterparty and market risks.
There is a direct link between investments and obligations to our customers. Certain insurance lines are exposed to an interest guarantee risk. Life insurance, for example, must generate the guaranteed interest payment agreed upon.
Management of the Allianz Group through risk capital We control our activities through our respective local companies. Economic Value Added (EVA)
Risk capital is required to cover unexpected losses. The amount of risk capital is calculated by using internal models. These models are based on generally accepted quantification methods, which are used for purposes of group-internal risk management as well. We also use the risk capital models of the Standard & Poor’s rating agency. When measuring and analyzing risks, we distinguish between the various risk-relevant factors in a given situation. This enables us to appraise specific risks at various levels: first, for the Group as a whole and on the level of our operational units and their business activities.
We back our risk capital calculations with a certain level of statistical confidence to validate their reliability and to permit comparison. The security level of our internal models is sufficiently high to ensure that Group controlling meets Standard & Poor’s requirements of an AAA rating for the Allianz Group.
In the insurance area, we calculate risk capital for premium, reserve, investment and credit risks. Within these risk categories, we distinguish between the following types of risks: _ actuarial risks, which in the area of property and casualty insurance include the premium and reserve risks for each insurance line. Reinsurance is considered separately. In the case of life insurance, we calculate the insurance provisions required.
_ investment risks, which include market and counterparty risks. The market risks are subdivided according to dividend-bearing instruments, interest-bearing instruments and real estate.
Credit and counterparty risks are assessed on the basis of the debtor’s creditworthiness or rating class.
_ credit and counterparty risks in connection with receivables in the insurance business.
Following the Dresdner Bank takeover, it was agreed that our Group Risk Controlling Center and Dresdner Bank’s Corporate Risk Controlling Center would closely cooperate with one another. The Dresdner Bank’s Risk Controlling is the center of competence for setting risk standards and evaluating banking risks within the Allianz Group.
Risk management also includes participation in scientific and technical loss prevention.
We regularly carry out technical studies for the manufacturing and automobile industries, for example. The sole purpose of these studies is to reduce the probability of claims and keep losses to a minimum.
Natural disasters such as earthquakes, storms and floods represent a special challenge for risk management. Although they happen considerably less frequently than other incidents, the consequences are far more extensive when, for example, entire regions are devastated. We make use of special modeling techniques to control such risks. They involve the collection of data on earthquakes and weather patterns, which are used to simulate natural disaster scenarios and estimate the potential for damage.
Reserve risks We have to constitute provisions for insurance claims that have been submitted but not yet settled. The amount is estimated on the basis of past experience and on the use of statistical methods. We also limit risks by constantly monitoring the development of these provisions and use the information we obtain to make forecasts. In the area of life insurance, reserves are calculated by using actuarial methods. In addition to other criteria, these calculations take into account the biometric data of the populations insured by using, for example, national mortality tables.
We monitor market risks by means of sensitivity analyses and stress testing. Exchange rate fluctuations represent a risk that can essentially be disregarded because our insurance commitments are to a very large extent backed by funds in the same currency.
Asset structure and diversification are other elements in our management of investment risk.
Organizational risk controlling In terms of organization, we limit our investment risks through a clear separation of management and controlling functions. Within the Group, risk management is implemented in cooperation with the local units through the use of a top-down bottomup process. The Allianz Finance Committee, which is made up of members of the Allianz Board of Management, delegates far-reaching decision-making authority to the regional Finance Committees, which monitor activities in their respective regions or countries. The duties and responsibilities at each decision-making level are defined by guidelines issued at the Group level.
If we subdivide the rated exposure of the Dresdner Bank Group according to internal rating classes, it becomes apparent that approximately 90 percent of our business volume falls into rating classes 1 to 4.
As a result of our trading activities, Dresdner Bank’s portfolio is primarily focused on the banking and financial services sectors.
In the year 2001, we made specific loan loss allowances or set up provisions to cover counterparty risks in the lending business. In addition, we set aside general loan loss allowances for latent risks.
To further reduce counterparty risks, Dresdner Bank enters into what are called cross-product netting master agreements with its business partners. In the case of a defaulting counterparty, netting makes it possible to offset any claims and liabilities not yet due.
Market risks At the global level, Dresdner Bank controls the risks of its worldwide trading units by using the value-at-risk method. Value-at-risk is defined as the potential loss which may occur during a specific period of time and with a given confidence level. This statistical valuation tool can be applied to a range of different financial instruments such as stocks, foreign exchange instruments or interest rate instruments.
This risk quantification model was approved by the German Federal Banking Supervisory
Year-end 2001 annual statistics Year-end 2001 Mean value Maximum1) Minimum1) 2000
For purposes of setting internal limits and risk determination, Dresdner Bank calculates value-at-risk with a confidence level of 95 percent and a one-day holding period. This ensures that value-at-risk data more accurately reflect current market developments. Trading is controlled by using market risk limits. Current limit utilization is determined and monitored on a daily basis. Limit breaches are immediately corrected.
Limits are periodically revised and adapted to take into account changes in business structures, market situations or risk profiles. To ensure that the data used meet the required quality and consistency criteria, they are subjected to stringent controls.
Interest rate risks Interest rate risks, which represent an essential part of the market risk of the non-trading portfolio, are controlled by using sensitivity and value-at-risk indicators (99 percent confidence level, 10-day holding period). As in the case of trading risks, Dresdner Bank contains its exposure by using limits. Taking into account portfolio effects, the interest rate value-at-risk from Dresdner Bank’s non-trading portfolio at year-end amounted to 95.3 million euros.
Liquidity risks A guideline applying to the entire Dresdner Bank Group was issued which governs liquidity management. This guideline establishes basic principles as well as emergency procedures. In addition to satisfying legal requirements, it sets an even stricter internal standard, which provides for liquidity risk limits and other control tools.
Risk control in asset management Risk control in the area of asset management is an integral part of the processes of the local units or the investment platform. The Corporate Center ensures that Group-wide standards for asset management are applied at the local level. The individual asset management companies have the possibility of assessing the portfolio risks of the customer assets they manage at all times by using analytical tools specifically adapted to the risk profile of the instruments concerned. At the same time, the performance of the various product lines is periodically monitored and analyzed at the Group level.
This is done, for example, by using internationally recognized standard documentation and, if necessary, by obtaining legal opinions. Contracts for established products are continuously reviewed to include any amendments required by changes in legislation or jurisdiction.
Group. In addition, we continue to expand our aggregate risk control and limit systems while at the same time extending them to our banking activities. In the context of this process, we are systematically evaluating the experience of our various Group companies in the aftermath of the events of September 11, 2001.
The system for evaluating counterparty risks and creditworthiness as well as the authorization, supervision and control processes used in connection with the lending and trading activities of Dresdner Bank will be further improved during the current year. This will be undertaken on the basis of the second release of the Basel Capital Accord (Basel II). The new accord ushers in a fundamental reform of regulatory capital requirements for credit risks and, for the first time, includes operating risks. The objective is to bring statutory minimum equity capital requirements in line with actual risks and align the regulatory framework with best practice risk measurement methods in the banking sector. The new regulations provide for different calculation options with different levels of security for both credit and operational risks.
In both cases, Dresdner Bank intends to implement the approach with the most stringent requirements. For credit risks, this is the Internal Ratings Based Advanced Approach and for operational risks the Advanced Measurement Approach. For the lending business, this means that quantitative models and their application to bank-internal processes will be further expanded.
On December 31, 2001, our Group companies had 179,946 (119,683) employees. This increase is largely due to the consolidation of Dresdner Bank. The Zwoolsche Algemeene was also included for the first time in 2001. In addition, the expanded business activities of our units in France, Rumania and Australia have contributed to increasing the number of employees. Including Dresdner Bank, we have approximately as many employees in Germany as we have in other countries. A more detailed overview is provided in the chart on the next page and the following table.
Recruitment of talented new staff To further strengthen our position as a leading integrated financial service provider we are constantly searching for highly qualified young professionals with management potential who, together with us, will take on this challenging task. In this process, we are looking at recent university graduates as well as junior managers with first professional experience.
One of the venues for our recruiting efforts is the “Allianz Open Space Forum” in Berlin.
We are also present as an attractive employer at other locations. We cultivate contacts with international management recruits in the U.S., France, Switzerland, Italy as well as in Australia and South Korea, mainly at renowned universities and business schools. One example: together with our U.S. fund managers PIMCO and Oppenheimer Capital we sponsored last year’s “opening weekend” of the new curriculum at the Wharton School in Philadelphia.
_ We want to meet our employees’ justified expectations of a global financial services provider. Intercultural experiences in foreign countries make the job more appealing and exciting and provide the qualifications for further career moves. With Dresdner Bank, we offer a wealth of additional new career opportunities.
Development Program.” A large number of junior managers from growth markets took advantage of this development path and studied the latest developments in the insurance business outside their home country.
Allianz Management Institute We are constantly expanding the programs offered by the Allianz Management Institute (AMI).
In 2001, this corporate university inaugurated a new seminar center at Lake Starnberg on the outskirts of Munich. The aim of this facility is to foster the international exchange of knowledge and experience. In cooperation with leading business schools, AMI offers top-level management seminars which are held in the U.S., Europe and Asia. AMI also organizes a “Career
We also receive a large number of external applications through our Internet career pages at www.allianz.com.
Our employee stock purchase plan was yet again expanded. In 2001, we offered Allianz shares at preferential conditions to approximately 140,000 employees in 22 (11) countries.
Thank you! We would like to thank the employees and representatives of our Group companies for their dedication and loyalty, which were particularly outstanding during the rough seas of the year 2001. Our thanks also go to the members of the employees’ representative bodies.
Prospects are good that the world economy will start to pick up again in the course of the current year. However, growth is likely to remain modest in most industrialized countries following a slow start at the beginning of the year. On the whole, we expect substantial improvement in the overall economic environment for our financial services activities.
The performance of the economy in the near term will to a great extent depend upon how investors view the future. U.S. monetary and fiscal policy has played its part in building confidence in the economy. It is now critical that this confidence spread quickly and determine entrepreneurial thought and action. Of the world’s major economic regions, Japan will have the hardest row to hoe. The recession is not expected to end as long as the crisis in that country’s banking and financial markets continues to smoulder.
Reforms of the German social security system will also have a significant effect upon health insurance activities.
In Central and Eastern Europe, growth will likely weaken. Nevertheless, the insurance business can be expected to flourish. Private providers are profiting from deregulation, by no means a completed process but one which is being given a new impetus in view of the imminent entry of these countries to the EU. In addition, domestic insurance industries will benefit from the introduction of mandatory insurance and tax-favored plans.
The economy in the growth markets of the Asia-Pacific region is expected to recover relatively swiftly in the year 2002. However, the household savings rate in this region is particularly high. Coupled with further liberalization of the insurance markets in India and the People’s
Republic of China, this will produce upward momentum for our industry.
All in all, we expect the Allianz Group’s steady growth to continue throughout the current fiscal year 2002, with total premium income up a good 4 percent from the previous year.
Membership in other statutory supervisory boards in Germany E.ON AG (Chairman), Preussag AG,
Membership in other statutory supervisory boards in Germany Celanese AG, Deutsche Lufthansa AG,
Dresdner Bank AG, Münchener Rückversicherungs-Gesellschaft AG, RWE AG, VAW aluminium AG (until March 15, 2002)
Membership in other statutory supervisory boards in Germany Deutsche Bank AG, E.ON AG, Linde AG, mg technologies ag, Schering AG, Siemens AG (Chairman), ThyssenKrupp AG, Wilhelm von Finck AG
Membership in other statutory supervisory boards in Germany Bayerische Hypo- und
Membership in comparable*) management bodies ATCO, Crédit Commercial de France (CCF),
H O R S T M E Y E R since July 12, 2001
Membership in other statutory supervisory boards in Germany Allianz Versorgungskasse VVaG,
U W E P L U C I N S K I since August 20, 2001
Membership in other statutory supervisory boards in Germany Dresdner Bank AG (Deputy Chairman)
Membership in other statutory supervisory boards in Germany Bayerische Börse AG (Chairman),
Münchener Rückversicherungs-Gesellschaft AG, Siemens AG Membership in Group bodies Bank Austria AG (Chairman),
Membership in comparable*) management bodies Membership in Group bodies Robert Bosch Corporation,
Membership in other statutory supervisory boards in Germany Bayerische Hypo- und Vereinsbank AG Membership in Group bodies DaimlerChrysler Services AG (Chairman)
Oil and Gas Corporation (Sasol) Ltd., Vodafone Group Plc. Membership in Group bodies DaimlerChrysler of
*) We regard foreign memberships as “comparable”, if the foreign company is listed on the stock exchange or has more than 500 employees.
Münchener Rückversicherungs-Gesellschaft AG (Deputy Chairman), Siemens AG, ThyssenKrupp AG Membership in Group bodies Allianz Lebensversicherungs-AG (Chairman), Allianz Versicherungs-AG (Chairman), Dresdner Bank AG (Chairman)
(Vice president), Riunione Adriatica di Sicurtà S. p. A. (Vice president)
Membership in comparable*) management bodies Membership in Group bodies Allianz Compañía de Seguros y
Reaseguros S. A. (Chairman), Allianz Portugal S. A., Companhia de Seguros, Assurances Générales de France,
Allianz First Life (until December 31, 2001), Allianz Insurance Company of Canada (since April 4, 2002),
Fireman’s Fund Insurance Company (since January 1, 2002), Allianz Hungária (until January 29, 2002),
Membership in comparable*) management bodies Società Metallurgica Italiana S. p. A. Membership in Group bodies RASbank S. p. A.
Membership in other statutory supervisory boards in Germany Bayerische Motorenwerke AG,
Fresenius Medical Care AG, Heidelberger Zement AG Membership in Group bodies ADVANCE Holding AG (Chairman)
Membership in comparable*) management bodies Banco General de Negocios S. A., BNP Paribas S. A.
Eurex Clearing AG, Eurex Frankfurt AG, itelligence AG (until February 5, 2002), K + S Aktiengesellschaft,
NorCom Information Technology AG (until February 15, 2002) Membership in Group bodies Deutscher Investment-
Membership of Board of Management members in other corporate management bodies *) We regard foreign memberships as “comparable”, if the foreign company is listed on the stock exchange or has more than 500 employees.
Membership in comparable*) management bodies Eurex Zürich AG Membership in Group bodies Dresdner Bank
Luxembourg S. A., Dresdner Kleinwort Wasserstein (Japan) Inc. (Chairman), Dresdner Kleinwort Benson North America Inc.
Membership in comparable*) management bodies Membership in Group bodies Allianz Elementar Lebensversicherungs -AG, Allianz Elementar Versicherungs-AG, Allianz Investmentbank AG, Allianz Irish Life, Allianz Suisse Lebensversicherungs -AG, Allianz Suisse Versicherungs-AG, Cornhill Insurance Plc., EULER
Membership in other statutory supervisory boards in Germany BATIG Gesellschaft für Beteiligungen mbH,
Membership in comparable*) management bodies Membership in Group bodies Allianz Australia Ltd. (until December 31, 2001), Fireman’s Fund Insurance Co., Lloyd Adriatico S. p. A., Riunione Adriatica di Sicurtà S. p. A.
ThyssenKrupp Automotive AG Membership in Group bodies ADVANCE Holding AG, Deutsche Hypothekenbank Frankfurt -Hamburg AG, Vereinte Holding AG (Deputy Chairman), Vereinte Lebensversicherung AG (Chairman)
Membership in other statutory supervisory boards in Germany RWE Power AG, SMS AG
J A C Q U E S A . N A S S E R Retired President and CEO Ford Motor Company
P E T E R S U T H E R L A N D Chairman BP Plc.
G E R H A R D F U L L Chairman of the Board of Management, Linde AG
P R O F E S S O R D R . h . c . H A N S - O L A F H E N K E L President, Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz
D R . J Ü R G E N H E R A E U S Chairman of the Supervisory Board, Heraeus Holding GmbH
D R . D I E T E R S C H A D T Former Chairman of the Board of Management, Franz Haniel & Cie. GmbH
D R . h . c . W A LT E R S C H E E L Former President of the Federal Republic of Germany
D R . h . c . H E I N R I C H W E I S S Chairman of the Board of Management, SMS AG
D R . M A R K W Ö S S N E R Chairman, Citigroup Deutschland
B E R N D W R E D E Former Chairman of the Board of Management, Hapag-Lloyd AG
Allianz Dresdner Bausparkasse AG Am Sonnenplatz 1 61116 Bad Vilbel www.dresdner-bauspar.de
Allianz Lebensversicherungs-AG Reinsburgstraße 19 70178 Stuttgart Tel.: +49 711663-0 Fax: +49 711663-2654 www.allianz-leben.de
Oldenburgische Landesbank AG Stau 15-17 26122 Oldenburg Tel.: +49 441221-0 Fax: +49 441221-1457
DreAM Dresdner Asset Management (Germany) GmbH Mainzer Landstraße 11-13 60329 Frankfurt am Main
Allianz AG EU Representative Office Avenue des Arts 44 1040 Bruxelles
National Insurance Company Berhad 3rd Floor, Scouts Headquarters Building Iln Gadong BE 1118 Darussalam
Dresdner RCM Global Investors Australia Ltd. Level 16, 207 Kent Street Sydney NSW 2000 Tel.: +612 92478-865 Fax: +612 92478-960 www.dresdnerrcm.com.au
UCAR Boulevard du Général de Gaulle B.P. 343. Bangui Tel.: +236 613-666 Fax: +236 613-340
Allianz Dazhong Life Insurance Co. Ltd. 16F China Merchants Tower 66 Lujiazui Road Shanghai 200120 Tel.: +86 21587988-28 Fax: +86 21587988-30
Allianz Insurance Company – Guangzhou Branch (Preparatory Office) RM 1234-7 Garden Tower Garden Hotel Huanshi Donglu 368 Guangzhou 510064
Allianz Insurance (Hong Kong) Ltd. 9/F, One International Finance Center One Harbour View Street Central Hong Kong Tel.: +852 25216651 Fax: +852 28106191 www.allianz.com/itint/asia/hk/cornhill
Dresdner RCM Global Investors Asia Ltd. 21st Floor, Cheung Kong Centre 2 Queen’s Road Central, Hong Kong Tel.: +852 22388889 Fax: +852 28770066 www.dresdnerrcm.com.hk
Allianz Insurance Company of Canada 10 York Mills Road, Suite 700 Toronto, Ontario M2P 2G5 Tel.: +1416 227-7800 Fax: +1416 227-9837 www.allianz.ca
ARCALIS 20, place de la Seine Tour Neptune 92400 Courbevoie – La Défense Tel.: +33158850-362 Fax: +33158850-802
Compagnie de Gestion et de Prévoyance 1, rue des Arquebusiers, B. P. 322 67008 Strasbourg Cedex
Mondial Assistance Group 37, rue Taitbout 75009 Paris Tel.: +33153255-325 Fax: +33153255-432 www.mondial-assistance-group.com
Allianz Zagreb d.d. Selska 136-138 10000 Zagreb Tel.: +38513670-367 Fax: +38513670-414 www.allianz-zg.hr
Cooperative Central Bank Ltd. Insurance Department Gregoriou Afxentiou Street 8 P.O. Box 24537 1389 Nicosia
Dresdner RCM Global Investors (UK) Ltd. P.O. Box 191 10 Fenchurch Street London EC3M 3LB
Allianz Hungária Biztosító R. t. Bajcsy-Zsilinszky ut 52 1054 Budapest Tel.: +3613016-565 Fax: +3613016-100 www.ahbrt.hu
GE Plaza Airport Road, Yerawada Pune 411006 Tel.: +9140 26-700 Fax: +9140 26-667
P. T. Asuransi Allianz Utama Indonesia Summitmas II, 9th Floor Jl. Jend. Sudirman Kav. 61-62 Jakarta 12190 Tel.: +62 21252-2470 Fax: +62 21252-3246 www.allianz.co.id
RAS ASSET MANAGEMENT SGR S. p. A. Piazza Velasca 7/9 20122 Milano
Allianz Fire and Marine Insurance Japan Ltd. MITA N. N: Bldg. 4th Floor 1-23, Shiba 4-chome Minato-ku, Tokyo 108-0014 Tel.: +813 5442650-0 Fax: +813 5442650-9 www.allianz.co.jp
Toranomon 4-chome Mori Building 1-8, Toranomon 4-chome Minato-ku Tokyo 105-0001 Tel.: +813 54039-500 Fax: +813 54039-090 www.drkw.com
MEIJI Dresdner Asset Management Co., Ltd Palacio Tower 12F 6-7, Kita Aoyama 3-chome Minato-ku Tokyo 107-0061 Tel.: +813 5469-3700 Fax: +813 5469-3690
Assurances Générales du Laos Vientiane Commercial Bank Building Avenue Lane Xang B.P. 4223 Vientiane RDP Tel.: +856 2121590-3 Fax: +856 2121590-4
SNA Immeuble SNA Hazmieh B.P. 11-4805/16-6528 Beyrouth Tel.: +96159566-000 Fax: +96159566-24
An der Landstraße 5 9490 Vaduz Tel.: +423 237660-0 Fax: +423 237660-9
Allianz Subalpina S. p. A. Società di Assicurazioni e Riassicurazioni Via Alfieri 22 10121 Torino Tel.: +39 011516-1111 Fax: +39 011516-1470 www.allianzsubalpina.it
Lloyd Adriatico S. p. A. Largo Ugo Irneri 1 34123 Trieste www.lloydadriatico.it
AFORE Allianz Dresdner Insurgentes Sur No. 819 Col. Napoles Mexico D.F., C.P. 03810 www.aforeallianz.com.mx
Allianz Rentas Vitalicias S. A. Boulevard Manuel Ávila Camacho 164 Col. Lomas de Barrilaco Vertientes 11010 México, D.F.
London Verzekeringen N. V. Weesperzijde 150 1097 DS Amsterdam Tel.: +3120 561-8618 Fax:+3120 561-8680 www.london.nl
Royal Nederland Verzekeringsgroep N. V. Coolsingel 139 P.O. Box 64 3000 AB Rotterdam Tel.: +3110 4541-911 Fax: +3110 4541-310 www.royal.nl
Pioneer Allianz Life Assurance Corporation 4/F Pioneer House-Makati 108 Paseo de Roxas Legaspi Village Makati City 1229 www.pioneer-allianz.com
Rolf Michel Acting President of Management Board dresdnerbank asset management S. A. 6A, route de Trèves 2633 Senningerberg Tel.: +352 463463-1 Fax: +352 463463-620
Dresdner Bank Luxembourg S. A 26, rue du Marché-aux-Herbes B.P. 355 2097 Luxemburg www.dresdner-bank.lu
International Reinsurance Company S. A. 43, avenue John F. Kennedy B.P. 845 2018 Luxemburg Tel.: +352 4276762-30 Fax: +352 4276762-40
Allianz Life Insurance Malaysia Berhad Level 23 & 23A Wisma UOA II 21 Jalan Pinang 50450 Kuala Lumpur www.allianz.com.my
Ost-West Allianz Insurance Company Zentrale 3rd Samotechny Pereulok, 3 103473 Moscow www.allianz.ru
Allianz AG - Reinsurance Branch Asia Pacific #3, Temasek Avenue #08-01 Centennial Towers Singapore 039190 Tel.: +656 2978-801 Fax: +656 2978-901 www.allianzre.com.sg
Allianz Asset Management Asia Pacific 6 Battery Road #28-01 Singapore 049909 Tel.: +656 31180-18 Fax: +656 31180-19
Allianz Insurance Company of Singapore Pte. Ltd. #3, Temasek Avenue #03-01 Centennial Towers Singapore 039190 Tel.: +656 297-2529 Fax: +656 297-1956 www.allianz.com.sg
Allianz Parkway Integrated Care Pte. Ltd. #3, Temasek Avenue #03-03 Centennial Towers Singapore 039190 Tel.: +656 8875-088 Fax: +656 8875-301 www.allianzparkway.com.sg
Dresdner Asset Management Ltd. 20 Collyer Quay #22-00 Tung Centre Singapore 049319 Tel.: +65 222-8080 Fax: +65 231-9298 www.dam.com.sg
T. U. Allianz Życie Polska S. A. Chocimska Street 17 00-791 Warsaw www.allianz.pl
Allianz Ţiriac Asigurări S. A. 80-84, Câderea Bastiliei Str. 71139 Bucharest Tel.: +401208249-1 Fax: +401208249-6 www.allianztiriac.ro
Eurovida, S. A./Europensiones, S. A. José Ortega y Gasset, 29 28006 Madrid Tel.: +34 914360-300 Fax: +34 914360-325 (Eurovida) Fax: +34 914360-263 (Europensiones)
Allianz Risk Transfer (ART) Lavaterstraße 67 8027 Zürich Tel.: +411285181-8 Fax: +411285181-9 art.allianz.com
CAP Rechtsschutz Poststraße 30 Postfach 1248 6301 Zug Tel.: +4141726848-4 Fax: +4141726848-1
Dresdner Bank (Schweiz) AG Utoquai 55 Postfach 264 8034 Zürich Tel.: +4112585-111 Fax: +4112585-252 www.dresdner-bank.ch
Allianz General Insurance Co. Korea Ltd. 14th Floor Allianz Tower 45-21 Yeoido-dong Yeongdeungo-gu Seoul 150-978
Allianz Life Insurance Co. Ltd. Allianz Tower 45-21 Yeoido-dong Yeongdeungo-gu Seoul 150-978 www.allianzfirstlife.co.kr
France Life Insurance Co. Ltd. 20F. Kangnam Bld. 1321-1 Soucho-dong Seoucho-Ku Seoul 137-070
Allianz C. P. General Insurance Co., Ltd. 19/F C. P. Tower 313 Silom Road Bangrak Bangkok 10500 www.allianzcp.com
Allianz C. P. Life Assurance Co., Ltd. 19/F C. P. Tower 313 Silom Road Bangrak Bangkok 10500 www.allianzcp.com
Ayudhya Allianz C. P. Life Public Co., Ltd. 17th Floor Ploenchit Tower 898 Ploenchit Road Patumwan Bangkok 10330 Thailand
Allianz Versicherungs-AG Dubai Branch Kendah House, 29th Floor, Office No. 2 Sheikh Zayed Road
Allianz Life Insurance Company of North America 5701 Golden Hills Drive Minneapolis, MN 55416 P. O. Box 1344 Minneapolis, MN 55440-1344 Tel.: +1763 7656-500 Fax: +1763 7656-657 www.allianzlife.com
Dresdner Asset Management (Taiwan) Ltd. 5F, No 300, Sec 4, Chung Hsiao East Rd. Taipei, 106 Taiwan, R.O.C.
NFJ Investment Group 2121 San Jacinto, Suite 1840 Dallas, TX 75201 Tel.: +1214 75417-80 Fax: +120175417-98 www.nfjinvestmentgroup.com
Pacific Investment Management Company LLC 840 Newport Center Drive, Suite 300 Newport Beach, CA 92660 Tel.: +1949 720-6000 Fax: +1949 720-1376 www.pimco.com
PIMCO Equity Advisors LLC 1345 Avenue of the Americas, 50th Floor New York, NY 10105-4800 Tel.: +1212 7393-800 Fax: +1212 7393-954 www.pimcoequity.com
Unit 4, 8th Floor The Metropolitan Tower 235 Dong Khoi Street-Dist. 1 Ho Chi Minh City
Cadence Capital Management 265 Franklin Street 11th Floor Boston, MA 02110-3113 Tel.: +1617 3677-400 Fax: +1617 3677-393 www.cadencecapital.com
Dresdner RCM Global Investors LLC 4 Embarcadero Center San Francisco, CA 94111-4189 www.dresdnerrcm.com
William L. Price Chairman Susan Gause Senior Managing Director and Chief Executive Officer
Fireman’s Fund Insurance Company 777 San Marin Drive Novato, CA 94998 Tel.: +1415 899-2000 Fax: +1415 899-3600 www.the-fund.com
Allowance for credit losses The overall volume of provisions includes allowance for credit loss – deducted from the asset side of the balance sheet – and provisions for risks associated with hedge derivatives and other contingencies, such as guarantees, loan commitments or other obligations, which are stated as liabilities.
Allianz AG carry distribution rights based on the dividends paid, and subscription rights when the capital stock is increased; but they carry no voting rights, no rights to participate in any proceeds of liquidation, and no rights to be converted into shares.
The accounting terms explained here are intended to help the reader understand this Annual
For a comprehensive explanation of accounting terminology, please see the glossary on pages 90 to 97 of the Consolidated Financial
Cash flow statement Statement showing movements of cash and cash equivalents during an accounting period, classified by three types of activity: _ normal operating activities _ investing activities _ financing activities
Earnings from ordinary activities Pre-tax profit or loss from activities which an enterprise undertakes in the normal course of business. This does not include extraordinary items, i.e. income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and are therefore not expected to recur frequently or regularly.
IAS Framework The framework for International Accounting Standards (IAS) which sets out the concepts that underlie the preparation and presentation of financial statements for external users.
Loss ratio Loss and loss adjustment expenses as a percentage of premiums earned.
Minority interests in earnings That part of net earnings for the year which is not attributable to the Group but to others outside the Group who hold shares in affiliated enterprises.
Options Derivative financial instruments where the holder is entitled – but not obliged – to buy (call option ) or sell (put option) the underlying asset at a predetermined price sometime in the future.
The grantor (writer) of the option, on the other hand, is obliged to transfer or buy the asset and receives a premium for granting the option to the purchaser.
Trading assets Trading assets are debt issues and stocks as other financing instruments (essentially derivatives, note loans und precious metals holding) which have been acquired solely for sale in the near term.
Allianz Insurance Company of Canada 108-109, 149 Allianz Kapitalanlagegesellschaft 131 Allianz Leben 68-69, 117-118 Allianz Life Insurance Berhad 125 Allianz Life of North America 124-125 Allianz Management Institute 55, 149 Allianz Mexico Companía de Seguros 108 Allianz Open Space Forum 148 Allianz Property and Casualty Group Germany 99-100 Allianz Risk Consultants 83 Allianz Risk Transfer 105 Allianz Schweiz 104 Allianz Seguros 123 Allianz share 16-25, 26 Allianz Suisse Lebensversicherungsgesellschaft 122 Allianz Suisse Versicherungs-Gesellschaft 104 A. M. Best 146 American Depositary Receipt 21
Corporate responsibility 26-31 Corporate tax credit 19 Cost income ratio 132 Credit insurance 112 Crédit Lyonnais 101 Croatia 107 Czech Republic 86, 107
Deutsche Lebensversicherungs-AG 117 DEUTSCHER INVESTMENT-TRUST (dit) 55, 149 Disability insurance 70, 85
Dow Jones Euro STOXX 50 15 Dow Jones Sustainability Index 18, 26-27
E E.ON AG 24 Early warning system 1 Earnings 91 Earnings per share 19, 92 Economic importance of financial services providers 31 Economic Value Added (EVA) 21, 135-136, 139 Econsense 28 ELVIA 104 Employee shares 5, 149 Employees 94 Environmental audit 27 Environmental management systems 27 EULER 112 Eurohypo 94 Eurovida 123
Free float 16, 20-21 FTSE4Good Europe 50 26 Fund-linked life insurance 116
H Half-income method 19 Hermes 112 HIH insurance portfolio 110 Hungary 107
Inflation 85 ff Infoline (for investors) 22, 25 Insurance pools 79 ff, 101 Integration management 39-44 International Executive Committee 10-11, 27 Internet 102
Mondial Assistance 113 Moody’s 24 Münchener Rückversicherungs-Gesellschaft AG 20, 24, 132
Premium income (from the insurance business) 92-93 Property and casualty insurance
U Unemployment rate 85 ff Unicredito 120 United Nations Environmental Program 28
● Very much so ● Mostly, but not always ● Not at all
_ I would additionally like to read more about the following subjects in the Annual Report 2002: We will be glad to keep you informed
● Corporate Responsibility Magazine (to be published at the end of June, 2002)
Minority interests in earnings ¤ mn – 1,044 – 1,277 – 974 – 814 – 469
Minority interests in equity ¤ bn 17 16 13 12 8
Return on equity before amortization of goodwill % 7.2 12.1 10.2 10.9 9.6
Share price at year end ¤ 266 399 334 316 238
Market capitalization at year end ¤ bn 64.2 98.0 81.8 77.6 54.8 1) 1999 without IAS SIC 12 and SEC adjustment 2) Including banking
A L L I A N Z G R O U P 2001 Change from 2000 Change from 19991) More previous year previous year information in % in % on page
Net revenue from asset management ¤ bn 2.0 81.2 1.1 126.0 0.5 93
Share price at year end ¤ 266 – 33.3 399 19.3 334 16