Allianz delivering on our promises German Corporate Conference Frankfurt, June 2, 2005

Transcription

1 Paul Achleitner Allianz delivering on our promises German Corporate Conference Frankfurt, June 2, 2005

2 Allianz businesses in 2004 Property/Casualty Life/Health Banking Asset Management Total revenues 1 : EUR 43.8bn Total revenues 1 : EUR 45.2bn Net operating revenues 1 : EUR 6.5bn 3rd party AuM: EUR 585 bn 30% 27% 10% 11% 11% 11% 10% 25% 5% 19% 31% 10% 3% 97% 8% 15% 70% 7% Germany Italy France Other Eur. U.S. Other Largest P/C insurer worldwide Core strengths in main European markets 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 Strong German franchise with crossselling capabilities in private and corporate banking Top 5 global asset manager All major equity investment styles, fixed income (PIMCO) and structured products 1) Segment consolidated 1

3 Allianz at a glance Revenues (EUR bn) Operating profit (EUR bn) Banking 6.2 EUR 96.9bn AM 2.5 AM 12% EUR 6.9bn L/H 45.2 P/C 43.0 Banking 9% L/H 21% P/C 58% Net income 2004 (EUR m) Risk adjusted capital (EUR bn) EUR 2,199m Banking 104 L/H 808 P/C 3,325 AM -152 Consolidation -1,886 EUR 34.3bn AM 2.0 Banking 6.8 L/H 4.5 P/C 17.7 Holding 3.3 1) Fully consolidated 2) End of period 2

4 Allianz Operating profit (EUR m) Net income (EUR m) 6,856 4,066 1,890 2, ,

5 Still a good buying opportunity Allianz share price development Analyst recommendations (May 2005) 1 Neutral 40% 120 EUR 60% Buy / outperform 0% Sell / underperform Allianz rights issue Price target (consensus): EUR EUR 4.4bn ) Based on a survey among 10 senior sell side analysts 4

6 Update: our 3+one program Protect and enhance capital base Substantially strengthen operating profitability Reduce complexity Increase sustainable competitiveness and shareholder value 5

7 Capital base enhanced Achievements 2004/2005 Capital strengthened Successful launch of All in one transaction - Improved debt structure Risk capital surplus 1 (EUR bn) 16.0 Including All in one pro forma Sound capital base 11.8 Risks reduced Lower equity gearing Less equity cluster risks Reduced risk-weighted assets in banking 1) Based on internal risk capital model

8 Operating profitability strengthened (1) Property/Casualty Insurance Life/Health Insurance GPW (EUR bn) CR % % % GPW (EUR bn) Stat.exp. ratio % % % Operating profit (EUR m) 1,004 Operating profit (EUR m) Q2003 1Q2004 1Q2005 Disciplined underwriting High quality risk management (e.g. NatCat) Efficiency gains and expense reduction Target FY05: CR < 95% 497 1) Net acquisition costs and admin. expenses divided by net premiums earned Q2003 1Q2004 1Q2005 Improving overall shareholder margins Operating profit distorted by capital gains Net income appropriate performance measure Target FY05: op. profit EUR 1.5bn Net income 7

9 Operating profitability strengthened (2) Dresdner Bank Asset Management Op. Rev. (EUR bn) Op. Rev. (EUR bn) CIR 82.7% 81.4% 80.4% CIR 71.9% 66.9% 60.9% Operating profit (EUR m) Operating profit (EUR m) Q2003 1Q2004 1Q2005 Successful restructuring Sound credit quality (coverage ratio 1Q05: 61.9%) Two way cross-selling key to growth Target FY05: earn cost of capital (8.85%) 1Q2003 1Q2004 1Q2005 Best of breed CIR New global set up for growth Target FY05: op. profit +10% 8

10 2005: Profitability progress on track Operating profit (EUR m) Net income (EUR m) + 1bn 1, bn 834 1, , Q2003 1Q2004 1Q2005 1Q2003 1Q2004 1Q2005 = Increasing shareholder returns and better quality of earnings 9

11 Complexity reduced Selected initiatives IRU Ongoing reduction of nonstrategic loan portfolio Company Country Announced Transaction Health portfolio Netherlands July 04 sale Allianz President General Taiwan Aug. 04 sale Divestments Sale of sub-critical subsidiaries, e.g. AZ Canada, AZ President, ZA Verzekeringen, Cornhill Life All in one Significant reduction of Dresdner Bank s non-strategic equity portfolio Sustainability Business optimization driven by CEOs instead of head office AGF Chile P&C Aug. 04 sale Allianz Canada Oct. 04 sale Life portfolio Guernsey Oct. 04 sale ZA Verzekeringen Belgium Nov. 04 sale Mondial Morocco (31% stake) Nov. 04 sale Allianz Cornhill Life Dec. 04 sale DBLA Private Banking Dec. 04 sale Astrée (Tunesian insurer) Jan. 05 sale BNP-AK Bank Turkey Jan. 05 sale IRU Private Equity Portfolio Mar. 05 sale Allianz General Insurance Vietnam Mar. 05 sale Gecina Mar. 05 sale 10

12 Enhancing Allianz competitiveness Strategic approach Risk management Hedging and diversification Maturing business Managing for value growth Growth markets CEE 1 BRIC 1 US Life EU pension business 1) CEE = Central and Eastern Europe ; BRIC = Brazil, Russia, India, China Leverage strong position Placing table stakes Profitable growth Capitalize on strength 11

13 Europe has exciting growth potential it s the pension market Growth drivers EU pension assets (EUR bn) Demographic change - longevity - population ageing Few mature pension markets Underfunded pension schemes 16,000 14,000 12,000 CAGR +7,5% 16,367 France Germany Italy Spain Austria + 8.8% Allianz core markets Ongoing reduction of PAYG benefits Trend towards defined contribution schemes - higher contributions than in defined benefit schemes Management of longevity opportunity 10,000 8,000 6,000 4,000 2, , e 2015e Belgium Denmark Finland Ireland Norway Portugal Sweden UK Switzerland Netherlands +8.2% Rest of Europe +6.3% Mature markets Source: Allianz Global Investors 12

14 Relying on PAYG pension is no longer an option... Deteriorating demographics trigger higher demand Replacement Ratio Low incentive for private pension Portugal Austria Finland Norway France Spain Belgium Sweden Italy Germany Ireland Netherlands Denmark Switzerland Rising need for private pension arrangement 1) PAYG pension as % of net income prior to retirement (depending on the country, different income definitions apply (average; best 10 years; last year etc.)). 2) Individuals older than 65Y as percentage of the population aged 15Y-65Y UK Rising need for private provision Dependency Ratio 2 13

15 ... and only annuities can provide full protection Retirement income duration sensitivity (German example) Baseline Event Runs out of money at Couple retiring at age 65 with EUR 1 million in assets Monthly withdrawal EUR 5,000 (pre-tax) Real investment returns of 4.7% Life expectancy of 86 years Husband and wife live on to 95 Husband admitted to a nursing home at 75 3 years of 7% inflation 3 years of a bear market (à la ) Further assumptions: equity allocation 35% with 7% p.a. return, fixed income allocation 65% with 3.5% p.a. return, monthly withdrawal EUR 5,000, monthly nursing home costs EUR 3,000, inflation rate 1.5% 88 years 83 years 83 years 78 years 14

16 Leveraging Europe: Allianz is well positioned for EU pensions France Rank 1 5 P.O.S. 2 7,700 Germany Rank 1 P.O.S ,531 Italy Spain Rank 1 2 P.O.S. 2 12,915 Rank 1 2 P.O.S. 2 10,669 1) Rank by gross premiums written 2) P.O.S.: point of sale FY2004 including agents, subagents, brokers, salaried salesforce but not part-time salesmen; 909 proprietary bank branches included in Germany15

17 Critical factors for success in Europe s pension market Distribution Products Brand has it all Financial strength Strong local presence 16

18 Investor Relations contacts Oliver Schmidt Tel. +49 (0) Holger Klotz Tel. +49 (0) Head of Investor Relations Susanne Arheit Tel. +49 (0) Christian Lamprecht Tel. +49 (0) Andrea Förterer Tel. +49 (0) Peter Hardy Tel. +49 (0) Daniela Meintzschel IR events Tel. +49 (0) Fax: +49 (0) Internet (English): Internet (German): 17

19 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. 18