Allianz SE · XETR:ALV
Allianz — Merrill Lynch Banking & Insurance Conference 2004
35 slides from Allianz's conference presentation, Oct 6, 2004
Slide 1: One year later
Michael Diekmann One year later Merrill Lynch Banking & Insurance Conference „Managing Complexity“ London, 6 October 2004
Slide 2: Our focus is sustainable value creation
Michael Diekmann: One year later Our focus is sustainable value creation Last year’s outlook Value creation Capitalizing on strength Focus on profitability Strong and sound market Back to basics position in all business Focus on execution segments “3 + one” program in place - remains key 0407_SE_MD
Slide 3: Market perception of Allianz beginning of the year
Michael Diekmann: One year later Market perception of Allianz beginning of the year Analysts’ and investors’ view January 20041 Threats Demands § High equity exposure § Focus on profitability § Turnaround Dresdner Bank § Focus on shareholder value 0407_SE_MD ML Conference2004_FINAL ohne Notizen § Li
Slide 4: Framework for all activities is the "3 + one" program
Michael Diekmann: One year later Framework for all activities is the “3 + one” program Back to basics 1 Protect and enhance capital base 2 Substantially strengthen operating profitability 3 Reduce complexity 0407_SE_MD ML Conference2004_FINAL ohne Notizen Building the future + one Increase sustainab
Slide 5: Protect and enhance capital base
Michael Diekmann: One year later Protect and enhance capital base 1 Challenges 2003 § Maintain adequate rating § Further improve capital position 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 4
Slide 6: Capital position significantly improved
Michael Diekmann: One year later Capital position significantly improved 1 „3 + one“ program Comments / Outlook Asset -8.3%-p Targets: allocation equity ratio 22.9 16.5 14.6 § Further optimization of (in %) risk-return profile § Reduction of equity +2.2% gearing to 1.03 from 1.2 SH equity 27.2 29.3
Slide 7: Substantially strengthen operating profitability: P/C
Michael Diekmann: One year later Substantially strengthen operating profitability 2 P/C - Challenges 2003 § Operating discipline § Maintain positive technical results over the cycle 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 6
Slide 8: P/C achieves impressive combined ratio
Michael Diekmann: One year later P/C achieves impressive combined ratio 2 „3 + one“ program Comments / Outlook -2.4%-p Targets: Expense ratio § Further reduction of 27.6 25.6 25.2 (in %) expense ratio - to be balanced with... -5.5%-p § ... underwriting discipline Claims over the cycle ratio 74.6 71.
Slide 9: P/C turnarounds almost completed
Michael Diekmann: One year later P/C turnarounds almost completed - GPW growth 2 continued focus on strategic challenges Claims ratio Expense ratio Fireman’s Fund1 4 Allianz Global Risks2 4 AGF3 Target 04: combined ratio <100% +13.6% +3.4% +11.6% -10.9% +9.5% +8.4% +2.8% 128.6 -2.4% 126.3 112.3 99.4
Slide 10: Substantially strengthen operating profitability: L/H
Michael Diekmann: One year later Substantially strengthen operating profitability 2 L/H - Challenges 2003 § Increase profitability § Reduce risk profile 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 9
Slide 11: More potential in L/H
Michael Diekmann: One year later More potential in L/H 2 „3 + one“ program Comments / Outlook +11.5% Targets: Statutory premiums 18.9 21.1 21.1 § Further improvement of (in EUR bn) underwriting result § Further cost reduction +0.4%-p Investment yield 2.8 § Further optimization of profit 2.4 1.8 0407
Slide 12: Substantially strengthen operating profitability: Dresdner Bank
Michael Diekmann: One year later Substantially strengthen operating profitability 2 Dresdner Bank - Challenges 2003 § Focus on profitability § Increase retail capabilities 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 11
Slide 13: Dresdner Bank – turnaround taking effect
Michael Diekmann: One year later Dresdner Bank – turnaround taking effect 2 Income and costs1 (half-years, EUR bn) Operating result1 (half-years, EUR m) Operating income Administrative expenses + risk costs 409 6.000 400 5.500 200 5.000 4.500 0 0407_SE_MD ML Conference2004_FINAL ohne Notizen 4.000 3
Slide 14: Dresdner Bank - targets reiterated
Michael Diekmann: One year later Dresdner Bank - targets reiterated 2 „3 + one“ program Comments / Outlook Operating -19.2%-p Targets: cost- income 100.2 81.4 81.0 ratio § Deliver on cost reduction (in %) program -39.2%-p § CIR mid-term < 75%, LLP ratio1 long-term < 70% (in %) 58.9 58.6 0407_SE_MD M
Slide 15: Substantially strengthen operating profitability: Asset Management
Michael Diekmann: One year later Substantially strengthen operating profitability 2 Asset Management - Challenges 2003 § Grow assets under management and revenues § Optimize organization and reduce cost-income ratio 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 14
Slide 16: Asset Management improves continuously
Michael Diekmann: One year later Asset Management improves continuously 2 „3 + one“ program Comments / Outlook +3.8% Targets: Third-party AuM (in EUR bn) 577 571 599 § Ongoing optimization of global structures § CIR below 65% -4.7%-p Cost- income § EUR 1bn operating profit 0407_SE_MD ML Conference20
Slide 17: Substantially strengthen operating profitability: Group
Michael Diekmann: One year later Substantially strengthen operating profitability 2 Group - Challenges 2003 § Improve profitability 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 16
Slide 18: Cost base lowered in all segments ...
Michael Diekmann: One year later Cost base lowered in all segments ... 2 „3 + one“ program Comments / Outlook -26.4% Targets: 8,097 AM 872 6,647 § Maintain strict cost 601 5,957 3,827 560 discipline Expenses Bank (in EUR m) 3,023 2,749 § Utilize cross-border L/H 920 synergy and know-how 851 769 pote
Slide 19: ... and quality of earnings substantially improved
Michael Diekmann: One year later ... and quality of earnings substantially improved 2 Total revenues RAC Operating profit Net income (EUR bn) (EUR bn) (EUR m) (EUR m) 3,135 47.2 49.5 49.5 43.5 37.3 34.1 2,178 1,542 1,289 974 146 1H 02 1H 03 1H 04 1H 02 12M 02 1H 03 1H 04 1H 02 1H 03 1H 04 1H 02 1H 0
Slide 20: Reduce complexity
Michael Diekmann: One year later Reduce complexity 3 Challenges 2003 § Optimize portfolio + management structures § Maintain sufficient operational flexibility 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 19
Slide 21: Reduce complexity: logic of regional and global business models
Michael Diekmann: One year later Reduce complexity: logic of regional 3 and global business models Germany Europe Growth markets USA, UK and Australia Integrated financial Multi-channel Multi-channel Independent services provider business models business models intermediary markets 0407_SE_MD ML Con
Slide 22: Reduce complexity: Ongoing streamlining of organization
Michael Diekmann: One year later Reduce complexity: Ongoing streamlining 3 of organization Since 2003 § 32 deals Divestments § Approx. EUR 2.3bn deal volume § Approx. EUR 1.1bn risk capital release E.g. IRU: Loan volume1 (EUR bn) RAC (EUR bn) Sale/run-off of non-strategic 24.6 -59% 3.2 -53% and non-
Slide 23: Increase sustainable competitiveness and value
Michael Diekmann: One year later + Increase sustainable competitiveness and value one Challenges 2003 § Optimize capital allocation § Focus on profitable growth 0407_SE_MD ML Conference2004_FINAL ohne Notizen 06.10.04 22
Slide 24: Capital allocation: clear enhancement of Allianz portfolio
Michael Diekmann: One year later + Capital allocation: clear enhancement one of Allianz portfolio 1H 2004, in % of risk-adjusted capital Revenue Strategic Growers Value Growers Outperformers growth -5%-p -13%-p +10%-p 33% 25% 35% 5% 0.2% 20% 2003 1H 2004 2003 1H 2004 2003 1H 2004 0407_SE_MD ML Confe
Slide 25: 95% of risk-adjusted capital earns at least CoC
Michael Diekmann: One year later + 95% of risk-adjusted capital in 1H 2004 one earns at least CoC1 Risk-adjusted capital und RoRACN2 80% RoRACN3 1H 2003 1H 2004 70% 60% 1H 04 43% RoRACN > 8.15% 1H 04 50% RoRACN > 15% 95% 40% 1H 03 1H 03 30% 31% 58% 0407_SE_MD ML Conference2004_FINAL ohne Notizen 20%
Slide 26: Optimized capital allocation through Allianz dividend model
Michael Diekmann: One year later + Profitable growth: optimized capital allocation one through Allianz dividend model Dividends paid by OEs bef. min. (EUR bn1) § Cash dividend model with cost of capital +61% being hurdle rate > 2.9 § Management tool to achieve economic discipline on group level 2.5
Slide 27: Well managed growth engine AZ Life
Michael Diekmann: One year later + Profitable growth: well managed growth engine AZ Life one Comments Variable annuities Fixed annuities +22% § Target: balanced portfolio Statutory +233% between fixed and variable premiums 4.5 4.8 annuities (USD bn) 2.9 0.6 3.4 1.1 2.0 2.8 2.3 § Clear focus on prici
Slide 28: Retirement savings law increases potential for Allianz Leben
Michael Diekmann: One year later + Profitable growth: retirement savings law one increases potential for Allianz Leben1 State-aided products on top of Tax incentivized amounts Allianz Leben state pensions (EUR) § Pillar II ~4,300 § No. 1 in Germany - Company pensions 2,472 § 15% overall market share
Slide 29: Next integration step - agents selling banking products
Michael Diekmann: One year later + Profitable growth: next integration step - one agents selling banking products Distribution model Benefits Selected 300.000 Customer standardized products new clients § One-stop shopping in 2005 - Current accounts § Convenient access to banking - Money market servi
Slide 30: Going forward
Michael Diekmann: One year later Going forward Management focus Deliverables for 2005 § Capital optimization § P/C: combined ratio < 97% § Strengthening of proprietary distribution § L/H: operating profit EUR 1.5bn § Customer market share § AM: operating profit EUR 1.0bn1 § Cost and underwriting dis
Slide 31: Additional information
Michael Diekmann: One year later Michael Diekmann Additional information
Slide 32: Overview: Key figures
Michael Diekmann: One year later Overview: Key figures1 International financial services provider Property/Casualty Life/Health Banking Asset Management § Total revenues2: § Total revenues2: § Net operating § Total revenues2: EUR 42.7bn EUR 42.3bn revenues2: EUR 6.5bn EUR 2.2bn Market share 2003 in
Slide 33: Retirement savings Germany: shift to deferred taxation
Michael Diekmann: One year later + Retirement savings Germany: shift to deferred taxation one should result in higher savings volumes State pensions Company pensions Private pensions What is new Contributions will be tax deductible - Proceeds hereof will be taxable in 2005? What is § All contributio
Slide 34: Traditional German life contracts: attractive also in new environment
Michael Diekmann: One year later + Traditional German life contracts: one attractive also in new environment Contracts signed until 2004 Contracts signed starting 2005 Pay-in phase Limited tax deductibility1 No tax deductibility Client can opt Client can opt At maturity Lump sum Lump sum Annuity Ann
Slide 35: Disclaimer
Michael Diekmann: One year later 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 a
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