REG-Allianz AG Allianz SE: Operating Profit of 1.6 Bn Euros in 3Q Achieved, 6.5 Bn Euros Year-to-Date

Mon Nov 10, 2008 2:00am EST

* Reuters is not responsible for the content in this press release.

--  Dresdner Bank treated as discontinued business (1); Transaction on track

    --  Q3 net income from continued operations of 545 million euros

    --  Q3 net loss considering discontinued operations of 2.0 billion euros

    --  Solvency ratio at 157 percent
MUNICH, Germany--(Business Wire)--


Allianz Group maintained its financial strength and earning power in the third
quarter of 2008, although turmoil in the equity markets and a difficult economic
environment severely affected the business of the financial services industry as
a whole. Total revenues decreased slightly by 3.8 percent to 21.1 billion euros,
compared to 21.9 billion euros in the third quarter of 2007. Operating profit
decreased to 1.6 billion euros, compared to 2.6 billion euros in the same period
of 2007. Quarterly net income from continued operations amounted to 545 million
euros, compared to 2.0 billion euros in third quarter 2007.

During the first nine months of 2008, Allianz Group achieved an operating profit
of 6.5 billion euros, compared to 7.7 billion euros in the same period of 2007.
Net income from continued operations amounted to 4.2 billion euros, compared to
6.1 billion euros in the same period of last year.

Difficult capital market conditions during the third quarter had a negative
effect on revenues and on the operating profit from the life insurance and asset
management businesses. However, Allianz Group's largest segment, the Property &
Casualty business, proved to be resilient.

The sale of Dresdner Bank will be reported under 'discontinued operations' as of
September 1, 2008. Discontinued operations accounted for a net loss of 2.6
billion euros in the third quarter, comprised of a net loss from the bank's
operations of 1.2 billion euros as well as transaction-based impairments
according to IFRS 5 of 1.4 billion euros. Allianz's net loss for the third
quarter stood at 2.0 billion euros, compared to a net income of 1.9 billion
euros in the third quarter of 2007.

With a shareholder's equity of 37.5 billion euros, Allianz Group's capital base
remains on a high level. This also applies to the solvency ratio of 157 percent
(2), net of a dividend accrual of 1.6 billion euros.

The Property and Casualty business delivered a solid performance in the third
quarter. Gross premiums written increased to 10.8 billion euros, compared with
10.7 billion euros in the third quarter of 2007. Adjusted for exchange rates and
consolidation effects, revenue grew by 7.8 percent.

The operating profit in the third quarter decreased to 1.2 billion euros from
1.5 billion euros in the third quarter of 2007. The decline is largely due to
two factors. The credit insurance business recorded payment delays as suppliers
faced liquidity bottlenecks. In addition, the US crop business had to absorb
losses following the slump in commodity prices at the end of September.

The expense ratio decreased from 27.6 percent in the third quarter of 2007 to
26.2 percent, while the combined ratio reached 96.2 percent, compared to 94.1
percent for the same period in 2007.

In the Life & Health business total premium income decreased to 9.4 billion
euros in the third quarter, compared to 10.2 billion euros in third quarter
2007. Financial market conditions negatively impacted the sale of unit-linked
products, which was down by 1.3 billion euros, while traditional life insurance
business increased by 10 percent or 400 million euros. Especially Germany,
Switzerland, and France experienced growth in their traditional business.

The financial market downturn impacted operating investment result through
impairments level of 1.6 billion euros and around 500 million euros lower
realized gains compared to the third quarter of 2007. Operating profit in the
third quarter 2008 declined to 218 million euros from 873 million euros in the
same quarter of last year.

Allianz Banking, which now consists of Oldenburgische Landesbank (OLB) and one
million banking customers acquired by Allianz tied agents in Germany, as well as
Allianz Banking in Italy, France, and New Europe, achieved operating revenues of
123 million euros in the third quarter of 2008. The operating loss in the third
quarter amounted to 17 million euros, compared to an operating loss of 14
million euros in the same period of 2007.

Dresdner Bank, now accounted for as discontinued business, had operating
revenues of 747 million euros, down from 1.2 billion euros a year ago. Dresdner
Bank continued to suffer from weak and volatile markets in the third quarter.
The operating loss in the third quarter of 2008 amounted to 835 million euros,
compared to an operating profit of 87 million euros in the same period of 2007.

The Tier I ratio of Dresdner Bank stood at 8.1 percent as of end of September.

In Asset Management, operating revenues decreased to 698 million euros in the
third quarter from 803 million euros in third quarter 2007. Asset Management's
operating profit was strongly influenced by foreign currency and capital market
effects and amounted to 186 million euros, down by 44 percent from the strong
third quarter of last year, when the operating profit amounted to 330 million
euros.

Third-party assets under management increased to 754 billion euros by the end of
the quarter. At the end of the second quarter they stood at 740 billion euros.
Despite increasingly challenging conditions, net inflows amounted to 5.6 billion
euros in the third quarter. A negative capital market effect of 44 billion euros
was more than offset by a positive foreign exchange effect of 53 billion euros.

Outlook

'Our standard caveat with respect to the financial markets has never been more
important than during the third quarter. Without a major equity market recovery,
the operating profit outlook of 9 billion euros before banking for this year and
next year cannot be reached. In this environment, reliable statements about
future earnings are not possible', said Helmut Perlet and added: '6.5 billion
euros of operating profit from January to September prove the fundamental
strength of our business.'

(1) Following the announcement of the sale, Dresdner Bank qualifies as
held-for-sale and discontinued operations. Therefore, all revenue and profit
figures presented for our continuing business do not include the parts of
Dresdner Bank which we will sell to Commerzbank.

(2)Solvency computed according to the draft amendment of FkSolV published by the
BaFin, which revises the treatment of unrealized gains/losses on the bond
portfolio.

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

Information and Explaination of the Issuer to this News:

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 SE's
filings with the U.S. Securities and Exchange Commission. The company assumes no
obligation to update any forward-looking information contained herein.

No duty to update The company assumes no obligation to update any information
contained herein. 07.11.2008

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Language:  English
Issuer:    Allianz SE
           Koniginstr. 28
           80802 Munchen
           Deutschland
Phone:     +49 (0)89 38 00 - 41 24
Fax:       +49 (0)89 38 00 - 38 99
E-mail:    investor.relations@allianz.com
Internet:  www.allianz.com
ISIN:      DE0008404005
WKN:       840400
Indices:   DAX-30, EURO STOXX 50 Listed: Regulierter Markt in Berlin,
            Frankfurt (Prime Standard), Hannover, Dusseldorf,
            Stuttgart, Munchen, Hamburg; Terminborse EUREX; Foreign
            Exchange(s) London, NYSE, SWX
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Allianz SE
Michael Sieburg, +49 (0)89-3800-19957
michael.sieburg@allianz.com
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Allianz

Copyright Business Wire 2008
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