090603 oliver baete

European Financials ConferenceJune 2009

Oliver Bäte, Member of the Board of Management

Delivering the "Best of Allianz"

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Agenda

Industry under pressure but Allianz determined to achieve sustainable outperformance

How we will continue to deliver the "Best of Allianz"

Current priority: mastering the crisis


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Industry under severe pressure – negative impact on investor "appreciation"


Investors' perspective on the industry – recently more skeptical

Concerns further amplified during the current crisis

Mature industry profile with declining growth and challenged profitability

1 Continued pro-cyclical behavior of many players

Volatile earnings due to high susceptibility to capital markets and economic crises

2 Capital destruction above expectations

Opaque economics and reporting from an investor's view of point (esp. Life)

3Inconsistent use of MCEV and significant, but unclear balance sheet risks

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Allianz with strong operating performance in 2008

1 Operating profit of EUR 7.4 billion from continuing operations

2 Solvency position with 161% at the top of the industry

3 Full transparency, "pure" disclosure of MCEV and conservative investment portfolio

Results2008


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With "3+One" we built the foundation for our resilienceDelivering the "Best of Allianz"

Examples of results"3+One"

§ Buy-out of most minoritiesSimplify business model and governance

Reduce complexity

§ ~ 550,000 Net Promoter Score calls p.a.§ NPS implementation in ~ 40 businesses

Strengthen customer focus and innovation

Sustainable and profitable customer growth

§ Sustainability programs drove underwriting performance to top of industry § Targeted OTP savings at EUR 1.1 billion

(by 2011)

Fundamentally strengthen operating profitability levers

Increase operating profitability

§ Solvency at the top of our industryImprove risk and capital management

Enhance the capital base

Strategic focus§ Turnaround§ Product-driven § Lever-by-lever transformation

20072003

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We have created a strong operating platformGroup profit development excl. discontinued banking operations1

EUR millions

Operating profitNon-operating profit


1 2002/03 figures: different definition of operating profit and combined ratio applied; restatements and retrospective adoption of new standards not applied for 2002; goodwill amortized until year-end 2004

4,491

1,446

-1,960

250344

-612-1,316

1,424

7,373

04

6,547

032002

-1,218

2008

7,433

07

10,313

06

9,219

05

P/C com-bined ratio Percent

105.7 97.0 94.9 94.3 92.9 93.6 95.1

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Current priority: mastering the crisis


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We are now moving to delivering the "Best of Allianz"Delivering the "Best of Allianz"

Reduce complexity

Sustainable and profitable customer growth


Enhance the capital base

"3+One reloaded"

§ Customer-centric Target Operating Model (TOM)

§ High-quality customer experiences systematically leveraging customer insights

§ Operational excellence: Efficiency and effectiveness along the entire value chain

§ Leader in Solvency II implementation§ Integrated and global investment

management (AIM)

§ Customer-insight-driven § Group wide transformation around TOM§ Continuous improvement and true synergies

2011

"3+One"

Simplify business model and governance

Strengthen customer focus and innovation

Fundamentally strengthen operating profitability levers

Improve risk and capital management

Strategic focus§ Turnaround§ Product-driven § Lever-by-lever

transformation

20072003

Operations

Sales / Distributi

on

TechnicalArea

Operations

Sales / Distributi

on

TechnicalArea

Central Functions

Operations

Sales/ Distri-bution

Product Provider

MarketManage-

ment

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From functional business optimization to cross-border and cross-functional transformation


First step –Focus of OTP savings delivery

Second step –Focus of TOM benefits realization

Optimize processes within TOM functional areas

Operations

Sales / Distribution

TechnicalArea

Operations


TechnicalArea

MarketManage-

ment

Product Provider

Sales/ Distribution

Central Functions

Operations

Optimize cross-border across functional areas of TOM

Operations


TechnicalArea

Operations


TechnicalArea

Creating a lean and customer-centric organization – thereby significantly increasing productivity and quality of service delivery

Leveraging scale and scope through cross-functional excellence and cross-business synergies

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OTP1 starts to pay off – around EUR 250 million additional productivity gains every year until 2011

220 -270

318

2008

220 -270

2011eï 2007 2010e

912 - 1,062

2009e

220 -270

Targeted savings

-66

~ 13% of cost base-

line

Run-up schedule

ADAG

AGF

Italy

Spain

Suisse

New Eur.

Other

Elementar

Wave II

Wave I


1 Operational Transformation Program 2 Based on reference model after recurring before restructuring expenses

Targeted OTP savings to date2

EUR millions

Counter effects to be managed§ Distribution

investments§ MTM stock

options§ F/X rate

changes § Re-branding

spend

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Savings started to show in our IFRS financials

OTP addressesP/C and L/H§ Admin. cost§ Acquisition

overhead § LAE

2008

11.1

Inflation-adjusted run-rate

0.3

0.6

2007pro forma2

Non-operatingeffects3

11.7 0.3

Cost inflation


Evolution of internal cost base in P/C & L/H1

Gross, EUR billions

1 After restructuring expenses; DAC and commissions are excluded2 Adjusted for changes in methodology and perimeter to make comparable to 2008 figures3 Changes in F/X rate, MTM stock options

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TOM "early mover" Allianz AustriaDelivering the "Best of Allianz"

P/C expense ratio (Percent)

§ Change of company structureShift of service processes to 1 centralized customer service center, instead of 10 regional branches

§ Establishment of Market Management function to strengthen customer and market focusCustomer segmentation as enabler for tailormademarketing approaches

§ Implementation of customer centered IT-system and database as a pre-requisite for integrated customer servicesCustomer centric data warehouse as marketing and campaigning platform

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Market

AZ Austria

2003 2004 2005 2006 2007

Starting position

Target setting, develop-ment of measures

Imple-mentationof TOM

New processes estab-lished

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5 additional levers addressing cross-borderand cross-functional synergies launched

Examples of targeted potential

Assumed p.a. savings potential by 20111

EUR millions

Duplication of finance functions across LoBs inseveral OEs

More than 25% factor cost disadvantage in some European countries

IT infrastructure sourced and run locally

No systematic review of eligibility of subsidies

Complexity cost reduction

Factor cost optimization

Application Development and Maintenance

IT-Infrastructure efficiency (CREDO II)

Distribution & sales support costs

200 - 250

100 - 135

80 - 100

160

150 - 180


1 Before restructuring expenses 2 Due to potential overlaps total amount of additional savings not yet specified

Insufficient use of strategic vendors for sourcing

Additionalsavings potential of at least another EUR 500

million2 p.a

1

2

3

4

5

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Start into 2009 reflects the continued impact of the crisis despite strong fundamentals

1Operating profit of EUR 1.4 billion with all businesses contributing; but 2.7% pts increase of the combined ratio vs. Q4 2008

2 Solvency strength further reinforced (161% end of April 2009)

3 Full transparency on underlying value drivers and issues

Results Q1 2009


A uniquely severe crisis"3+One" provides resilience but cannot mitigate all adverse effects

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Additional crisis measures taken to preserveour strengths


Q1 2009 results Measures we are taking

Operating profit of EUR 1.4 billion with all businesses contributing; but 2.7% pts increase of the combined ratio vs. Q4 2008

§ Additional short term measures of ~ EUR 200 million targeted for 2009; thus, maintaining productivity targets § Rigorous portfolio improvement

to stabilize P&C loss ratio

1

Solvency strength further reinforced (161% end of April 2009)

§ Continuous de-risking to minimize volatility§ Rigorous risk-return analyses

in the portfolio (e.g., US VA)

2

Full transparency on underlying value drivers and issues

§ No mortgaging of the future; e.g., through cash flow underwriting or accounting tricks

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In parallel, we will continue to strengthen the Allianz franchise


"3+One reloaded" – delivering the "Best of Allianz"

Enhance capital base

§ Best-in-class solvency§ Transparent capital management§ Sensible dividend policy


§ P&C performance leader§ Value creation focus in Life§ Building a track record for continuous operational improvements

Reduce complexity

§ Systematic simplification of business portfolio, models, and operations§ Leverage our superior operating model – already successfully

replicated across different countries and businesses

Sustainable and profit-able custom-er growth

§ Strong positions in key growth markets§ Unique position to benefit from European pension opportunity§ Well positioned to exploit global mega trends

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Disclaimer

These assessments are, as always, subject to the disclaimer provided below

Cautionary Note Regarding Forward-Looking StatementsThe statements contained herein may include 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, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (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 be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the US Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement

No duty to updateThe company assumes no obligation to update any information contained herein

090603 oliver baete

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