Building a global asset manager

Transcription

1 Joachim Faber, Member of the Board Building a global asset manager German Corporate Conference June 1, 2006

2 Agenda Group overview and results Allianz Global Investors Additional information

3 Allianz businesses Property/Casualty Life/Health Banking Asset Management Total revenues 1 : EUR 44.1bn 11% 17% 24% 26% 11% 11% Largest P/C insurer worldwide Core strengths in main European markets Total revenues 1 : EUR 48.1bn 23% 8% Leading position in private & corporate pension business in Germany Strong positions in core EU markets and the U.S. Over 60 million retail customers worldwide 7% 11% 32% 19% Net operating revenues 1 : EUR 6.3bn 26% 6% 3% 65% Strong German franchise with crossselling capabilities in private and corporate banking 3rd party AuM: EUR 743bn 73% 6% 15% 6% Germany Italy France Other Eur. U.S. Other Top 5 global asset manager All major equity investment styles, fixed income (PIMCO) and structured products 1) FY2005, segment consolidated 3

4 2006 a very good start into the year (1) Total revenues (EUR bn) +4.9% Q 2Q 3Q 4Q 1Q Operating profit (EUR m) +41.9% 1,887 2,346 2,677 1,864 1,906 Internal growth: +2.9% Development in line with expectations Strong growth particularly in New Europe and Asia-Pacific All segments contribute significantly to improvement, thereof Dresdner Bank EUR 320m 1Q 2Q 3Q 4Q 1Q

5 2006 a very good start into the year (2) Net income (EUR m) +34.4% 1,324 1, ,779 High quality of result: net income improvement entirely driven by operating profit 1Q 2Q 3Q 4Q 1Q Shareholders equity 1 (EUR bn) +4.6% Profit further strengthens capital base 1) Before minority interests 5

6 operating profitability further strengthened (1) Property/Casualty insurance Life/Health insurance GPW (EUR bn) % 14.1 GPW (EUR bn) % CR (%) Margin (bps) Operating profit (EUR m) 1,214 1,386 1Q Q 2006 Disciplined underwriting, negligible NatCat Loss ratio almost unchanged Expense ratio increase due to acquisition costs 1 Target FY06: CR +/- 95% +14.2% Operating profit (EUR m) % 723 1Q Q 2006 AuM growth drives higher investment income Higher operating profit despite lower harvesting Improving overall shareholder margins Target FY06: op. profit EUR 2.1bn 1) Largely due to DAC and true-up effects that are expected to level out during the rest of the year 2) Operating income on gross technical reserves including unit-linked business 6

7 operating profitability further strengthened (2) Dresdner Bank Asset Management Op. rev. (EUR bn) % 1.9 Op. rev. (EUR bn) % CIR (%) CIR (%) Operating profit (EUR m) % 529 1Q Q 2006 All revenues lines increase Better operational gearing due to cost discipline Sound credit quality (coverage ratio 1Q06: 60.4%) Target FY06: operating profit EUR 1.2bn Operating profit (EUR m) % 304 1Q Q 2006 Operating profit boosted by higher revenues Best of breed CIR 3 rd -party AuM 753bn (+3.2% qoq) 1 Target FY06: 3 rd -party AuM +10% 1) Currency adjusted. Including F/X effects qoq growth was 1.2%. 7

8 Profitability progress on track 2Qe 4Qe 1Qa Operating profit (EUR m) Net income (EUR m) + 0.7bn 8,003 6,116 76% 8, ,380 6,052 69% bn 4, ,140 3,056 70% 1,887 2,677 1,324 1, % = Increasing shareholder returns and better quality of earnings 1) Target recalculated following new reporting format adopted in 1Q 2006 (see additional information for further detail) 8

9 Agenda Group overview and results Allianz Global Investors Additional information

10 Allianz Global Investors - top five in global asset management in only 15 months Acquisition Integration Internal Growth rd -party AuM May July 2001 Integration of Allianz Asset Management units + EUR May 2915, bn EUR 36 bn 2 + EUR 228 bn 2 Setting-up 1) In EUR bn as of year-end 2) 3rd-party AuM in EUR bn as of closing date 10

11 Allianz Global Investors fully established among the world s leading asset managers AGI AuM vs. relevant peers and Allianz AuM breakdown Ranking of largest active asset managers EUR bn, end Fidelity Capital Group AGI AXA AM BlackRock/MLIM Legg Mason 7 J.P. Morgan AM Deutsche AM Mellon AM UBS GAM , AuM Allianz Group EUR bn, 2005 External clients Allianz Group assets 1, Allianz Total AGI Other AGI Other External clients Equity Fixed Income Group assets 1) Pro forma Source: Company reports 11

12 Consistent AuM growth 8% p.a. on top of market yield Development of Allianz Global Investors third-party AuM 1 vs. market indices EUR bn MSCI World Net Return (LC) 2 SSB World Gov t (LC) % p.a % p.a. +5% p.a ) Currency adjusted, based on 2001 spot FX rate USD/EUR ) Local currency 12

13 PIMCO at the heart of Allianz Global Investors growth story PIMCO AuM development by region USD bn Asia Pacific Europe US % p.a CAGR % 48% 15% Additional assets powered by PIMCO USD 67bn ) Third party fixed income clients in Germany 13

14 Allianz Global Investors earnings power is concentrated in four units Operating Earnings by entity Increasing earnings diversification In % of total 1, 2005 US Equity Managers 4% AllianzGI AP 1% AllianzGI Europe 2 11% AllianzGI Distributors US 10% ADGI Germany 19% PIMCO 55% Leveraging regional distribution units Improved performance to boost equity managers over-proportionally Unexploited growth opportunities outside US and Germany PIMCO Regional AllianzGI US Equity Managers 1) Excluding Controlling Units AllianzGI AG, Ownership Structure, Cadence 2) AGF AM (2.4%-pts.), RAS AM (4.0%-pts.), AllianzGI Netherlands (1.5%-pts.), AllianzGI/RCM UK (-0.6%-pts.) 14

15 Allianz Global Investors investment outperformance increasingly driven by equity Account based asset-weighted outperformance of third party assets (in %) 1 Fixed Income AllianzGI year year Equity 41 1-year year YE 2003 YE 2004 YE 2005 Target Share assets with benchmark of total AuM (%) 1-year 69 3-year 56 1) Excluding RAS AM, AGF AM and Cadence 15

16 Allianz Global Investors successfully coped with equity market downturn in the early-2000s Restructuring of equity managers Equity manager Major measures/ results Change of operating expenses 04 vs. 01 Investment performance (%) 1 RCM US RCM UK NACM Germany OpCap Streamlining of product portfolio Active management of book-ofbusiness Restructuring of business processes Outsourcing/ bundling of backoffice functions Realignment of investment management processes Focused business models Lean expense structures Improved investment performance -59% -55% -44% -42% -25% Outperforming AuM Underperforming AuM 1) Asset-weighted 1-year performance vs. benchmark 16

17 US Retail: leveraging Allianz Global Investors common distribution platform Retail distribution US Net inflows US Ranking versus peers 1 Common platform: Allianz Global Investors Distributors LLC, Stamford PIMCO RCM Nicholas Applegate Oppenheimer Capital PEA Capital NFJ Investment Group Net inflows Vanguard American American American 2 American Vanguard Vanguard Vanguard 3 AllianzGI US AllianzGI US Fidelity Barclays 4 MFS Dodge Cox Dodge Cox Dodge Cox 5 Oppenheimer Fidelity AllianzGI US Fidelity 7 AllianzGI US AuM Allianz GI Distributors (USD bn) +37% p.a American Vanguard Barclays AllianzGI US John Hancock ) Long-term mutual funds 17

18 Germany: leveraging Allianz Group s distribution power and superior products Net inflows (EUR bn) AuM market share 1 (%) Allianz GI 13.8 Total (EUR bn) DWS Mutual funds Institutional special funds DWS Union Activest INKA Allianz GI Helaba Union Union Deka Allianz GI Other Total (EUR bn) Allianz GI Universal DWS/DeAM Deka Other ) According to BVI statistics, excluding real estate funds 18

19 Allianz Global Investors has consistently proven to be competitive in capturing net flows Third party net flows (EUR bn) Comments % AuM bop Ø Peers 2 n.a Outstanding record of capturing net flows Achieving positive net flows each quarter since it was founded Collecting higher net inflows than all its global peers 1) Dresdner Bank asset management pro-forma included for the full-year ) Global peer group: Deutsche AM, AXA AM, Legg Mason (until 2004: Citigroup AM), Merrill Lynch IM, UBS Global AM, Amvescap, Franklin; for 2005, additionally Mellon, BlackRock, Morgan Stanley IM, Société Générale AM, Schroders 19

20 Consistently improved profitability Operating profit (EUR m) Cost-income ratio (%) +24% p.a %-p , Ø Peers 3 +7% p.a. Ø Peers ) Dresdner Bank asset management pro-forma included for the full-year ) Currency-adjusted +32% p.a. 3) Global peer group: Deutsche AM, AXA AM, Legg Mason (until 2004: Citigroup AM), Merrill Lynch IM, UBS Global AM, Amvescap, Franklin; for 2005, additionally Mellon, BlackRock, Morgan Stanley IM, Société Générale AM, Schroders

21 While cost management remains important, business growth will drive profitability going forward Operating profit driver analysis (EUR m) Share of total change of operating profit 80% % 2002 Cost management Impact 40% Business growth 1,124 20% 2005 Cost management Impact Business growth 2008e 21

22 Taking our business to the next level 2002 Internal Perspective 2006 External Perspective Profitability Return cost of capital to shareholder 3 Best talent required Sustainable growth through to truly become client centricity: the preeminent Listen to client and market needs global asset manager Provide innovative solutions Provide superior service Create a trusted relationship with clients Ensure product quality Sustainable alpha as key prerequisite Benchmark against the best 22

23 Agenda Group overview and results Allianz Global Investors Additional information

24 Reporting changes (1/3): transparency significantly improved Reporting changes effective 1Q 2006 New P&L 1 structure Introduction of corporate segment New consolidation method New definition of operating profit P&L structure reworked Individual P&L positions newly defined Holding activities reported separately Intragroup dividends eliminated at receiving segment (except L/H) Definition of operating profit reworked L/H: now including net realized gains and impairments for with-profits business Improvements Consistent labels across all reporting formats Ratios can be directly derived from P&L position Better representation of operating performance of business segments Consolidation adjustments vastly reduced Better representation of operating performance Increased consistency across segments Adjustments to combined ratio Previous definition of combined ratio amended by full combined ratio elements and parts of other income/ expenses P&L position other income/ expenses reduced 1) Profit and loss statement 24

25 Reporting changes (2/3): no change in net income (EUR m) Old reporting format New reporting format Q 2Q 3Q 4Q 12M 1Q 1Q 06/05 1Q 2Q 3Q 4Q 12M 1Q 1Q 06/05 Op. profit 1,820 2,374 1,723 1,826 7,743 2, Op. profit 2 1,887 2,346 1,864 1,906 8,003 2, P/C -L/H - Banking -AM Non-op. result Income b/tax, minorities Income taxes 1 Minority interest Net income P/C comb. Ratio (in %) 1, , , , , , , , , ,162 1, , ,880-2,114-1,386 4, , , ,779 n.a n.a. -P/C -L/H - Banking -AM - Corporate Non-op. result Income b/tax, minorities Income taxes Minority interest Net income P/C comb. Ratio (in %) 1, , , , , , , , , ,142 2, , ,829-2,063-1,386 4, , , , %-p 1) Formerly Taxes 2) Including effect from consolidation of intra-group dividends paid to the Life segment 25

26 Reporting changes (3/3): reconciliation of published merger plan figures (EUR m) Old reporting format Operating profit -P/C -L/H - Banking - Asset Mgmt. Non-operating result Income b/tax, minorities Income taxes 1 Minority interest Net income Combined ratio (in %) AuM growth (in %) 3 Plan ,359 4,267 1,728 1,285 1, ,499-2,571-1,009 4, Plan ,239 4,454 2,102 1,473 1, ,245-2,854-1,025 5, Plan ,362 4,988 2,271 1,713 1,390 10,385-3,386-1,088 5, ) Formerly Taxes 2) Including effect from consolidation of intra-group dividends paid to the Life segment 3) Before F/X effects New reporting format Operating profit 2 -P/C -L/H - Banking - Asset Mgmt. - Corporate Non-operating result Income b/tax, minorities Income taxes Minority interest Net income Comb. Rat. (in %) AuM gro. (in %) 3 Plan ,729 5,026 2,101 1,234 1, ,464-2,536-1,009 4, Plan ,387 5,108 2,366 1,406 1, ,209-2,818-1,025 5, Plan ,564 5,569 2,580 1,650 1, ,353-3,354-1,088 5, Impacted 2006 published targets CAGR % CAGR % 26

27 Strong capital base (EUR bn) Shareholders equity 1 Conglomerate solvency Risk capital Requirement Available Funds Solvency ratio Risk capital requirement Available risk-bearing funds Coverage ratio % % 173% 149% 153% ) Before minority interests ( : EUR 7,615m; : EUR 7,705m) 27

28 Group: key figures per quarter (EUR m) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/05 Total revenues (EUR bn) Operating profit 1,887 2,346 1,864 1,906 2, Non-operating items Income b/ tax, min. 2,255 2,134 1,646 1,794 3, Income taxes Minority interests Net income 1,324 1, , AuM 1 (EUR bn) 1) Group own assets (incl. financial assets carried at fair value through income), excl. loan portfolio Banking segment

29 P/C: key figures and ratios per quarter (EUR m) Gross premiums written (EUR bn) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/ Operating profit 1,214 1, ,286 1, Non-operating items Income b/ tax, min. 1,730 1,750 1,180 1,506 1, Income taxes Minority interest Net income 996 1, , Combined ratio (in %) AuM 1 (EUR bn) 1) Group own assets (incl. financial assets carried at fair value through income) %-p

30 L/H: key figures and ratios per quarter (EUR m) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/05 Statutory premiums (EUR bn) Operating profit Non-operating items Income b/ tax, min Income taxes Minority interest Net income Stat. expense ratio (in %) AuM 1 (EUR bn) 1) Group own assets (incl. financial assets carried at fair value through income) %-p

31 Dresdner Bank 1 : key figures and ratios per quarter (EUR m) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/05 Operating revenues 1,623 1,330 1,510 1,576 1, Operating profit Non-operating items Income b/ taxes, min Taxes Minority interests Net income RWA (EUR bn) Cost-income ratio (in %) %-p 1) Dresdner Bank contribution to Allianz Banking segment 31

32 Asset Management: key figures and ratios per quarter (EUR m) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/05 Operating revenues Operating profit Non-operating items Income b/taxes, min Income taxes Minority interests Net income Cost-income ratio (in %) 59.3% 60.4% 57.7% 56.6% 59.5% 0.2%-p Third-party AuM (EUR bn)

33 Corporate segment: key figures per quarter (EUR m) Delta 1Q 2Q 3Q 4Q 1Q 1Q 06/05 Operating profit Non-operating items Income b/taxes, min Income taxes Minority interests Net income

34 Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro-U.S. dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences. The matters discussed herein may also involve risks and uncertainties described from time to time in Allianz AG s filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement. No duty to update The company assumes no obligation to update any information contained herein. 34