Allianz Aktiengesellschaft Annual Report 2001 Allianz Aktiengesellschaft Annual Report 2001 Allianz Aktiengesellschaft Königinstrasse 28 D-80802 München Telephone +49 89 38 00-0 Telefax +49 89 34 99 41 www.allianz.com Allianz AG Reinsurance Branch Asia Pacific 3 Temasek Avenue #08-01 Centennial Tower Singapore 039190 Photography: Peter Ginter AllianzAG Tables and Charts: Allianz UKGBE0020Z0 (0/05) 5. 02 At a glance A click ➤➤ on the page number brings you directly to the page concerned. Allianz Aktiengesellschaft2001Change from2000Change from1999Change fromDetails previous yearprevious yearprevious yearon page in % in % in % Gross premiums written ¤mn5,690– 5.86,04016.65,1808.87 Retention in % 61.9 65.5 63.4 Loss ratio on own accountin %93.076.074.96 Gross expense ratioin %27.326.225.67 Underwriting result¤mn– 645– 201– 1237 Non-underwriting result ¤mn 1,07114.0940– 18.51,15330.712 Earnings before tax¤mn426– 42.3739– 28.31,03010.012 Taxes¤mn119126– 32112 Net income¤mn545– 36.986522.17091.612 Investments under management¤mn60,48951.639,91313.635,12910.010 Shareholders’ equity¤mn18,33561.111,3837.010,6405.233 as percent of net premium income in % 520.8 287.6 324.1 Insurance reserves¤mn19,06210.817,2117.615,991 7.229 Dividend per share¤1.501.501.2512 Total dividend ¤mn 362 369 307 Allianz share price at 12/31 ¤ 266 399 334 Market capitalization of Allianz shares at 12/31 ¤bn 70.9 98.0 81.8 To go directly to any chapter, simply click ➤➤ on the headline or the page number. ALLIANZ AG ANNUAL REPORT 2001 CONTENTS 2 Report of the Supervisory Board 5 Supervisory Board and Board of Management 6 Management Report 22 Recommendation for Appropriation of Profit Allianz Aktiengesellschaft 23 Financial Statements 43Auditor’s Report 44 Memberships 2 ❘ Report of the Supervisory Board Ladies and Gentlemen, We monitored the activities of the Board of Management in accordance with the responsi- bilities assigned to us by legal regulations and the company’s articles of association. The Super- visory Board met five times in the course of fiscal 2001. The Board of Management kept us informed of important developments between meetings in writing. In addition, the Board of Management notified the Chairman of the Supervisory Board of major developments and decisions on an ongoing basis. 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 Man- agement submitted to the Supervisory Board included the consolidated financial statements and interim reports of the Allianz Group, which were prepared in compliance with IAS ac- counting rules. We also received in-depth information on corporate planning for fiscal 2002. Acquisition and integration of Dresdner Bank The acquisition of Dresdner Bank was the ma- jor topic of discussion on the agenda at the meetings of the Supervisory Board in the course of the year. This extremely complex transaction, which took the form of a public takeover offer, was completed as planned on July 23, 2001. Expeditious integration of Dresdner Bank and its subsidiaries into the Allianz Group now numbers among the company’s most urgent priorities. As a result, we dealt intensively with the measures involved in the integration process. The Board of Management kept us informed on the current situation, and we were able to ascertain that rapid progress is being made. In particular, we received a detailed presentation of the new organization of the asset man- agement division and the model for a single integrated marketing strategy in Germany. We were also provided with in-depth information on activities involved in restructuring of divi- sions of Dresdner Bank and measures taken to improve earning performance. We received a separate report on the newly formed Corporates & Markets division, which regroups the corporate client and investment banking activities of Dresdner Bank. Allianz Aktiengesellschaft ❘ 3 At the level of Allianz AG, a Group Center was set up to provide the Board of Management of the holding company with support to facilitate management and control of the entire group. The Group Center’s chief activities include definition of strategic goals and opera- tional guidelines for the group. Other topics of discussion The Board of Management reported to us on the ramifications of the terrorist attacks of September 11, 2001, for the Allianz Group. These events represent a financial burden for us, but 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 customers of the Allianz Group. 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 extremely 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 employees in more than 20 countries Allianz shares at special conditions. 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. Corporate Governance The Supervisory Board welcomed the German Corporate Governance Code that was recently adopted. Many of the standards for the proper and responsible man- agement and supervision of a company set forth in this code have long been part of every- day business practice at Allianz. We will consider additional recommendations that concern the Supervisory Board in the near future. However, we reserve the right not to implement certain recommendations if there are good reasons not to do so. Committee meetings The members of the Supervisory Board formed a Standing Committee, an Executive Committee and a Mediation Committee in compliance with the German Codetermination Act. At a total of four meetings were held in the course of the year under review, the members of the Standing Committee dealt primarily with capital measures taken by the company, other projects requiring approval and appointment of the auditors for the annual financial statements. The Executive Committee, which is responsible for human re- sources issues, met three times in the course of the year. There was no need for the Media- tion Committee to meet. Annual accounts and consolidated financial statements KPMG Deutsche Treuhand-Gesell- schaft 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. 4 ❘ Report of the Supervisory Board The annual accounts and the consolidated financial statements, managements reports, the recommendation of the Board of Management concerning the appropriation of earnings and the audit reports submitted by KPMG were distributed to all the members of the Supervisory Board and were discussed in detail in the presence of the independent auditors at the meet- ing of the Supervisory Board held for this purpose on April 17,2002. No objections arose in the course of our review of the documents presented by the Board of Management and the independent auditors, and we concur with the findings of the audit by KPMG. We approved the appropriation of earnings as proposed by the Board of Management. The Supervisory Board approved, and thereby adopted, the annual accounts prepared by the Board of Management. 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 Bank into the Allianz Group. Employee representatives Karl Miller, Klaus Carlin, Reiner Lembke and Gerhard Renner resigned from the Supervisory Board. Mr. Miller was succeeded by Mr. Horst Meyer as his elected substitute. Mr. Frank Ley was elected as the new Deputy Chairman of the Supervisory Board. Messrs. Hinrich Feddersen, Peter Haimerl and Uwe Plucinski were appointed by the court to replace Messrs. Carlin, Lembke and Renner on the Supervisory Board. On the shareholder side, Dr. Karl-Herrmann Baumann left the Supervisory Board on September 30, 2001. The Court of Registry appointed Dr. Gerhard Cromme as his successor. This appointment is to be confirmed by the Annual General Meeting on June 12, 2002. Dr. Alfons Titzrath and Dr. Albrecht Schmidt resigned from their positions as shareholder representatives on the Supervisory with effect as of the end of the Annual General Meeting on June 12, 2002. The Supervisory Boards proposes that the Annual General Meeting elect Dr. Bernd W.Voss to succeed Dr. Alfons Titzrath. Dr. Schmidt will be succeeded by Dr. Uwe Haasen as elected substitute member. We have expressed our thanks to the former members of the Supervisory Board for their valuable contribution to our work. Mr. Herbert Hansmeyer, who was responsible for North and South America, retired from the Board of Management on December 31, 2001, and Mr. Michael Diekmann has assumed his functions. We have expressed our thanks to Mr. Hansmeyer for his many years of successful service. Dr. Werner Zedelius was appointed to the Board of Management with effect January 1, 2002, and is now responsible for Growth Markets. The Supervisory Board would like to take this opportunity to express its gratitude to all the employees of the individual Group companies for their efforts and motivation.