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Allianz Capital Markets DayCreating customer loyaltyMunichJuly 13, 2006

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Agenda

The Customer Focus Initiative Jan Carendi A Chuck Kavitsky

Appendix Investor Relations contacts D 01Financial calendar D 02Disclaimer D 03

Reorganization of German Insurance Gerhard Rupprecht B

Investment Banking Stefan Jentzsch C

The Customer Focus InitiativeJan Carendi, Chuck Kavitsky

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Agenda

I. The Customer Focus promise

II. Measuring customer loyalty

III. Implementation

IV. Successful FFIC pilot

V. Summary

A 01

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Allianz will create a superior customer experience that maximizes customer loyalty and results in

The Customer Focus promiseI. The Customer Focus promise

! Increased referrals, retention and cross-selling! Sustainable profitablegrowth! Increased shareholder value

A 02

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Listening to our customers, understanding their needs and implementingsolutions to exceed their rational and emotional expectations

What is Customer Focus?I. The Customer Focus promise

Customer Focus is the next competitive frontier for differentiation and will create sustainable profitablegrowth

! Ease of doing business with Allianz! Fast and professional problem resolution! Peace of mind and trust in all we do

A 03

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Reasons for defection in % of total responses (P/C Germany)

2 1

14

21

98

12

33

The opportunity: only 33% of defectors leave because of price

Price0%

20%

40%

60%

80%

100%

Companyin general

Externalfactors

Fieldstaff

Productoffering

Back-office

Claim Relo-cation


Source: Allianz 2005A 04

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Agenda



III. Implementation


V. Summary

A 05

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Net Promoter® Score (NPS) is Allianz� key metric to measure and manage customer focus

"On a scale 0-10, how likely is it that you would recommend our company to a friend or colleague?"

10 9 8 7 6 5 4 3 2 1 0

Passives

Note: Net Promoter® is a registered trademark of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.Source: Bain research, Frederick F. Reichheld�s "The One Number You Need to Grow", HBR Dec 03

Question

Scale

How the NPS works

Net PromoterScore (NPS)

NPS works because it requires putting personal reputation on the line

% Promoters % Detractors

Focus on emotional bonding

Focus on real enthusiasm

� =


A 06

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Promoters (NPS scale 9 � 10)

Passives (NPS scale 7 � 8))

Per

cent

age

of re

spon

dent

s on

NP

S s

cale

Allianz in line with market, but significant room for improvement

Detractors(NPS scale 0 � 6)

Average NPS performance

-6.1% NPS

22 lines of business participating

12.4%

31.9%22.3%

42.3%43.0%

25.8%34.7%

Allianz

-6.2%

32.3%

41.6%

26.1%

Relevant Market Best-in-Class

∆8.9%-p

∆9.6%-p


Source: Allianz 2006 A 07

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Indexed average of newly concluded gross premium volume per existing customerand year

Indexed average new GPW generated through recommendation per customer

Indexed average gross premium volume cancelled per customer and year1

Promoters defect less Promoters buy more Promoters drive business

Defection Cross- and up-selling Referral

Converting detractors to promoters increases profitablegrowth significantly

Promoters are significantly more valuable than detractors

-300

-250

-200

-150

-100

-50

0

Promoter Detractor

-100

-271

fullycancelled

partlycancelled

0

20

40

60

80

100100

83

Promoter Detractor

-200

-150

-100

-50

0

50

100100

-200

Promoter Detractor


partlycancelled

1) Source: Allianz 2005; without �inevitable� cancellation

fully c.

A 08

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NPS versus growth in GPW

NPS and top-line growth strongly correlatedII. Measuring customer loyalty

Insurance companies GermanyCAGR GPW 2002-2004

US Life insuranceCAGR revenues 1999-2003

R² = 0.62 R² = 0.77

-40-5

0

5

10

15

20

-20 0 20 40%

NPS

%

-40 -20 0 20 40 60 80%-2

0

2

4

6

8

NPS

%

Sources:Germany: Bain & Company German Insurance NPS study 2005 (15 companies across all business lines)US Life: Bain experience

A 09

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Proven relationship between NPS and organicgrowth valid for Allianz as well

4.5 %pts

Allianz OEs1 withNPS below relevant

market average

Allianz OEs withNPS above relevant

market average (excl. best in class)

Difference:

Relationship between NPS and top-line growth (P/C)

Ave

rage

CAG

R

GPW

200

2-20

05

Allianz OEs withbest-in-class

NPS

4.8 %ptsDifference:

9.3%

0.03%

4.5%


1) OE = operating entitySource: Allianz 2006; only brand specific turnover in local currency; simple non weighted average over all relevant OEs

A 10

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NPS performance within local benchmark

-40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60%GPW 2005in EUR bn

P/C: large OEs have huge improvement potential

CAGRGPW 2002 - 2005

Subsidiary A

Subsidiary B

Subsidiary D

Subsidiary C 17.2

Subsidiary E

0.03%

∆ 4.8 %pts

Subsidiary L2.0

Subsidiary M9.3%

Subsidiary K

Subsidiary H10.7

Subsidiary I

Subsidiary J

Subsidiary G

4.5%

Subsidiary F

∆ 4.5 %pts


worst-in-classcompetitor

best-in-classcompetitor

relevant marketaverage Allianz NPS

position

Explanation:

Source: Allianz 2006

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L/H: opportunities for cross-border know-how transfer

-40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60%

Subsidiary B

Subsidiary H

Subsidiary D

Subsidiary E

Subsidiary G

Subsidiary C

Subsidiary A

Subsidiary F

NPS performance within local benchmark

35.9

Stat. premiums2005 in EUR bn


worst-in-classcompetitor

best-in-classcompetitor

relevant marketaverage Allianz NPS

position

Explanation:

Source: Allianz 2006 A 12

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Agenda



III. Implementation


V. Summary

A 13

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Bottom-up NPS �mobilizes� staff to bemore customer focused

Top-down NPS

Measured on OE levelin comparison tokey competitors

Bottom-up NPS

Measured directly after customer interaction at pre-defined touchpoints

! Top management KPI to measure Customer Focus success

! Benchmark OEs with key competitors over time

! Used for management incentives and OE target-setting

! Institutionalize customer feedback via frontline staff

! Change-management tool to mobilize frontlinestaff at critical touchpoints

! Mandatory enabling tool for OEs

III. Implementation

A 14

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The Bottom-up NPS process

Touchpoints

Identify critical customer interactions! Claims! Payment difficulties! Complaints management! Advice, quotation, policy issuing! Expiration of policy/reinvestment! First payout (mortgage)

Improving customer orientation

Individual learning experience! From personal feedback

(both positive & negative)Change-management! From process related feedback

(both positive & negative)

Allianz call center (Mondial)

First short telephone call! Ask for NPS! Ask for primary reason! Ask for permission to call back! Ask for best time to call backSend information to employeefor call-back

Employee

! Prepare call with receivedinformation

! Conduct second call(with customer�s permission)

! Enter feedback into database(process related, no personalfeedback)

1 2

4 3

On a scale 0-10,how likely is it that

you will recommendour company to your

friends or colleagues?

III. Implementation

A 15

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High customer acceptance of NPS survey

Customers

Participated inNPS survey

91%

85%

Accepted feedback callfrom Allianz employee

Source: Allianz 2005

III. Implementation

A 16

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Touchpoint advice/quotation, German property business without motor

Bottom-up NPS measurement offers perfect tool for operative management

1) New business ratio: # of new contracts as % of # of existing contracts per agentSource: Allianz

0

2

4

6

8%

0 20 40 60%

NPS at touchpoint advice/quotation(aggregated for Aug-Oct; in %)

New business ratio1

(Jan-Sep 2005; Property w/o motor)

“Outperformers”

“High potentials”

“Push-sellers”

“With development opportunity”

Ø-NPS28%

Ø-New business ratio3.7%

~63% of agents with above average NPS (>28%) show new business ratio above average (>3.7%)

~75% of agents with below average NPS (<28%) show new business ratio below average (<3.7%)

III. Implementation

A 17

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Bottom-up NPS is complemented by ServiceRecovery in order to turn detractors into promoters

Current customer base CFI enablers Target customer base

Passives

Promoters

Detractors

Passives

Promoters

Detractors

Service Recovery

Bottom-upNPS for critical

touchpoints

III. Implementation

A 18

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Service Recovery takes complaint management into the next dimension

! Customers want a reliable, hassle-free and result-oriented complaint management experience

! Customers experiencing poor problem resolutionare 3 x more likely to defect

! Superior problem-solving tends to create customer loyalty and cross-selling

! But only a fraction of dissatisfied customers actually take action to complain at all (�tip of the iceberg�)

! With an efficient �pre-complaint� process we try to identify �not filed� complaints

! A blueprint for all processes surrounding Service Recovery is currently rolled out Image Source: National Oceanic and Atmospheric Administration

Direct complaints

Complaints not filed

III. Implementation

A 19

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Where do we stand today?

Status

All tools were piloted in 2005 at 4 flagship OEs in different lines of business and markets

Top-down NPS implemented as KPI in all flagship OEs

CF targets will be substantially reflected in all management incentive schemes

Group-wide tools as Bottom-up NPS and Service Recovery will be implemented mid 2007 at the latest

III. Implementation

A 20

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Agenda



III. Implementation


V. Summary

A 21

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FFIC addresses three key themes to deliver the desired customer experience

Able to

Do they have the capabilities, skillsand the knowledge?

Want to

Do we measure them, reward them and recognize them appropriately?

Allowed to

Do they have the right leadership encouragement, the right processes and technology, and do we empower them?

Enabled Motivated Empowered


Employees and agents

A 22

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Majorinitiatives

! Enterprise agency management

! Agency segmentation and service differentiation

! Substantially improved sales fundamentals

! Pipeline of innovative product launches

! Significant management visibility with customers

! Accelerated Customer Focus transformation

- Top-down and Bottom-up NPS pilots

- NPS & value drivers within business review process

- Communication, awareness, training

In 2005, FFIC executed several major initiatives to improve customer focus

January2005

2006March June September


A 23

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Break-down of NPS score provides perfect management toolBottom-up NPS performanceby team and region1

Do not manage to averages to improve performance

Team A: + 77%

Team B: + 63%

Team C: + 68%

Team D: + 58%

Passives

Detractors

Promoters

Promoters 84%Passives 9%Detractors 7%




South West: + 67%


North East: + 36%


Commercial: + 52%


Team A: + 18%

Team B: + 69%

Team D: + 20%





1) Illustrative example only

A 24

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FFIC�s NPS improved by 19%-points in one year �

NPS (in %)

44

31

17

28

5

-20

58

42

28 25 22

5

-8

169

35

Company A Company B Fireman's Fund Company D MarketAverage

Company E Company F Company G

+14%pt +19%pt -6%pts 0%pt +12%pt+8%pt+11%pt

2005

2006


+19%pt

Source: Allianz 2005 / 2006A 25

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Top-down NPS1

In %

NPW growth 20052

In %

� and it works!

2005 2006 FFIC Industry

16

359.1

1.9


1) Data collected in early 2006 and 2005 respectively, therefore reflects experiences made in the previous year2) On-going business only

2 x

Personal Commercial

FFIC Industry

2.5

-0.1

A 26

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Agenda



III. Implementation


V. Summary

A 27

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The CFI aims to encourage OEs tobecome �willing participants�

Allowed to:! CFI is a clear priority ! Sufficient local

resources ! OE-driven � by the OEs

for the OEs! Incorporated in

leadership culture

Want to:! Compensation and recognition ! Success stories demonstrating

business & financial impact! Profit (company success)! Incentive and recognition

linked to Bottom-up NPS

Enabled

Motivated

Able to:! Sufficient support,

i.e. tools, methods and solutions

Empowered

Pullfor

action

V. Summary

A 28

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CFI success measured through dedicated framework

Lean Group controlling, wide range of optional OE interventions

ServiceRecovery/ complaint

management

Segment-specific price/

product/service strategy

Defection &loyalty driver

analysis

OE-specific initiatives driven

by deficits at touchpoints

Bottom-up NPS at chosen customer touchpoints (sales, claims, etc.)

Retention Cross-/up-selling New bus./referrals

Top-down NPSLeadingGroup

indicator

LaggingGroup

indicator

LeadingOE

indicator

Groupinitiatives

Main CF initiatives

V. Summary

A 29

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Take aways

Customer Focus Initiative

! Customer loyalty drives profitablegrowth

! NPS provides perfect tool to measure and incentivize customer focus

! Consistent group-wide implementation of CFI initiated

! CFI targets part of top management compensation scheme

! Current NPS and customer structure offers huge growth potential

CFI will significantly enhance profitablegrowth of Allianz Group

V. Summary

A 30

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“Everything we do at Allianz should start and end with

the customer’s best interest in mind …building loyalty with profitable customers”

A 31

Appendix

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Understanding the language of CFIAppendix

Net Promoter Score (NPS)! Promoters as percentage of total number surveyed minus detractors as percentage of total

number surveyed

Top-down NPS! Measured on OE level in comparison to key competitors! High correlation between NPS and growth

Bottom-up NPS ! Measures referral willingness directly after customer interaction at pre-defined touchpoints

including 1-2 questions about quality of actual interaction. Responses are grouped, analyzed and used to create continuous learnings from frontlines. Touchpoints can be changed and varied according to changing needs.

! Strong indicator for deficiencies and Top-down NPS

Service Recovery! Consistent and sustainable set of activities for dealing with customers who feel, may feel, or are

about to feel, that an Allianz experience has not lived up to their expectations. Any expression of dissatisfaction is seen as a complaint. Consequently, Service Recovery comprises complaint management as reactive (follow-up) as well as proactive (prediction, detection) activity.

A 33

Reorganization ofGerman insuranceGerhard Rupprecht

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Agenda

I. Introduction

II. German insurance reorganization

III. Take aways

B 01

© A

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006! Structures

! Processes! IT

! Distribution! Products/

Services

Reorganization of German insurance integral part of strategic initiatives

I. Introduction

Pipe-line

IntegratedFinancialServicesProvider

AGRAMA

reorgani-zation

Growthinitiatives

Growthmarkets

Growth

Efficiency

SecureNo. 1

position inhome market

Europeancomplexityreduction

DresdnerBank

reorgani-zation

Germaninsurancereorgani-

zation

Sustain-ability

Program

CustomerFocus

Initiative

B 02

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Overview � Allianz´s German insurance business 2005

Key figures (IFRS)Revenues2 (EUR bn)Net income3 (EUR m)Market share4 (%)Customers5

P/C1

10.01,21317.0

12.4m

Life12.2329

16.38.4m

Health3.096

11.14.2m

1) German P/C Group (SGD)2) Revenues comprise GPW in P/C and statutory premiums in Life and Health3) Before minorities and amortization of goodwill

Product mix (%)

Casualty

Others

Property

Motor

Unit-linked

Annuities

Comple-mentaryhealth care

Compre-hensive

health careOthers6

I. Introduction

40%

12%

48%

Based on GPW Based on new business Based on GPW

Revenues2 of German insurance business (EUR 25.2bn)

16%

84%

Liability

24%

15%

13%

10%

38%

4) Based on GPW (P/C and Life) and NPE (Health)5) As of May 20066) E.g. time account insurance

Term (1%)

Endowment

6%4%

23%

66%

B 03

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Strong position in German insurance, but reorganization necessary

Distribution Products/Services Efficiency

but but but

! Lack of integratedsteering and incen-tivization

! Highly complexproduct portfolio

! Scattered IT land-scape

! Duplicated processes

Our challenge: turn threat into opportunity

! Full product range! Innovative �assis-

tance� services

! Strong compositecaptive sales force

! Multi-channelapproach

! Well establishedinternal bench-marking

! Strong IT supportfor agencies

I. Introduction

B 04

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Huge cross-selling potential in insurance �

Total private insurance customers 19.8m

P/C: 12.4m

Life: 8.4m

Health: 4.2m

4%

Only 22% of customershave policies in morethan one LoB1

Only 4% of customershave policies in eachLoB1

I. Introduction

1) Line of business

B 05

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�as well as in banking

Only 10% ofinsurance customers haveDresdner accounts

Only 9% of all customers have insurance policies and Dresdner accounts

Dresdner Bank customers 5.8m

2.1m customers

Total private customers ~24m

I. Introduction

Private insurancecustomers 19.8m

B 06

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Customer Centric

Marketing

Management / Central Functions

Operations

Distribution

Life

Property

Health

I. Introduction

Target Operating Model as basis for German reorganization

Business model centered around the client needs

B 07

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Competitiveadvantages

Sustainability Program - sharing best practice

Our approach to strengthen competitive advantages

Customer Focus Initiative

Products/ServicesDistribution Efficiency

=

1 2 3

I. Introduction

1) Unique selling proposition

! Profit-orienteddistributioncompany

! Improved salessupport by Customer Care Center/ database management

! Diversification ofsales channels

! Service enhanced products with USP1

! Standardization of commodity type products

! Time-to-market improvement

! Structures! Processes! IT

B 08

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Agenda

I. Introduction


III. Take aways

B 09

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Distribution: where are we now? II. German insurance reorganization

Market leader, but loss of one million customers since 2001

We are strong � � but

Tied agents

Bank

Diversified channels

Customers

! 11,000 agents selling full range of financial services

! Largest insurance sales force

! 900 Dresdner branches! Already 5% and 12% share in

new production (P/C and L/H)

! Active in growing channels like brokers, car dealers or direct

! Strong customer base with ~20m customers

! Too many products per agent diluting individual strengths

! Strong in rural areas, weaker in big cities

! Insurance penetration still below European best practice

! Huge potential still untapped

! Low cross selling rates! Missing customer view by product

providers

1

B 10

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Distribution: how to grow our business

Increase retention and cross-selling, win new customers

Diversification of sales channels

! Enlarge broker channel! Bundling of existing Allianz internet presences in Allianz24.de! New stationary sales formats in big cities: financial centers at Dresdner Bank

locations

Profit-oriented distribution company

! Common basis for sales planning, sales steering, restructuring of sales network

! Incorporate profit orientation in distribution company! Comprehensive tracking of client profitability

Improved sales support by CCC1/ database management

! More effective information retrieval for focused sales campaigns! Common database for P/C, L/H to increase cross-selling rates! Reduced product complexity! Better integration of Customer Care Center

1II. German insurance reorganization

1) Customer Care Center

B 11

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Distribution: �new data mining tools� as example for better use of database

! Identifying and disclosing�best customers� to sales staff

! Target: renewals or rearrangement of contracts

! First results are promising

Sales promotion

Ris

k of

sur

rend

erClient clusters

Val

ue o

f clie

nt

Identifying�best customers� with highsurrender risk


B 12

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Distribution: success of CFI-pilot as example for winning customers

Mortgage business Allianz Leben

Development NPS1 New business development

Initiatives generated from NPS-feedback: ! �Customer Care Call�! Additional coaching! New contract design! Redesign of new business process

20%

30%

40%

50%

60%

70%

May

04

Jul 0

4

Sep

04

Nov

04

Jan

05

Mar

05

May

05

Jul 0

5

Sep

05

Nov

05

Jan

06

Mar

06

May

06

NPS in %

Rolling 3-Month avg.

0

30

60

90

120

150

180

Jan

04

Apr

04

Jul 0

4

Oct

04

Jan

05

Apr

05

Jul 0

5

Oct

05

Jan

06

Apr

06

EUR m

1) Net promoter score


B 13

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Products: where are we now?

Full innovative product range,but complex product portfolio and difficult to administrate

We are strong � � but

Life

P/C

Health

! Very strong brand! Successful product innovations

like Allianz Indexpolice! Sole provider of full range of

employee benefit schemes

! Full product range! Innovative product combinations

with assistance elements

! Besides private health insurance full product portfolio including home care and complementary health cover

! Complex product portfolioe.g. in P/C ~140 products with ~800 tariff options

! Market perception: high service levels,but also above-average prices


B 14

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Products: how to grow our business

Service enhanced products

Time to market improvement

Access to new customers/segments

Standardization

Build on specific Allianz abilities " Difficult to copy, attractive margins- Assistance:

- Accident 60 Active " builds on assistance for elderly people- Home emergency " builds on assistance for homeowners

- 1st mover: Allianz Indexpolice " combines know-how from Dresdner Bank and Allianz Leben

- Employee benefit schemes " unique know-how (company pensions, time accounts, outsourcing of pension liabilities)

- Central marketing and product committee - Institutionalized idea generation by �I2S-program�

New customer groups accessed with specific products(e.g. �55+�, �Accident 60 Active�) and channels (e.g. direct channel)

e.g. Bancassurance, " easier to sell, free up time for new customers


B 15

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Structures, processes and IT: where are we now?

� but

! 21 locations

! Heterogeneous service levels and client handling due to highly decentralized responsibilities

! Mishandling of customer requests due to missing information across the lines of business

! Different business processes in similar lines of business

! IT platform highly complex with low degree of standardization

Cost levels above those of closest competitors despite market leadership

P/C Life Health

Claims Benefits Benefits

Operations Operations Operations

Distribution Distribution Distribution

Productdevelopment

Productdevelopment

Productdevelopment

3

Traditional structures�


B 16

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Structures: implementation of Target Operating Model in Germany

! German Insurance Holding established

! Top management teamin place

! Distribution streamlined, cooperation with mutual banks prolonged

! P/C companies merged

Starting position Status today Target

Allianz AG

Life HealthP/C

Operations OperationsOperations

Distr. Distr. DistributionDistribution

Allianz SE

German Insurance Holding

Life HealthP/C

Operations

Distribution


done

done

in progress

B 17

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Structures: new location concept

! 7 regions organized into4 regions

! 12 distribution head-offices merged into 11

! 114 sales support offices merged into 90

! 21 administrative locationsto be merged into 10

Starting position Status today Target 2008


done

done

in progress

done

B 18

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Faster and easier handling increases quality and satisfaction of customers and agents

Processes: client/agent handling

CustomerCare Center

Frequent transactions with highdegree of standardization across all LoBs

Call / Non-Call

Product& Process Center

Case solutions handled by specialized groups

Forwarding of infrequent transactions

3

80%of

requests

20%of

requests

Target


Customer/Agent

B 19

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IT: increased efficiency through standardized platform

From old model with separate IT platforms�

�to convergence with a common IT platform

Status: successful blue printsin Switzerland and Austria

Austria! In use since 1997! 1.1m customers, 2.1m policies

Switzerland! In use since 2000! 0.8m customers, 1.2m policies

Germany! Convergence of redundant

platforms to start in 2006! Target Operating Model to start

in 3Q 2007 ! ~25m1 insurance customers,

57m policies

P/C Life Health

Database

Policies

Accounting Payment

Claims Policies

Accounting Payment

Claims Policies

Accounting Payment

Claims

All lines of business


Database Database

Customer Tied agents

Customer Care Tied agents Customer

Database

Customer Care Others Customer

Care Others Customer Care Others

Policies Accounting PaymentClaims Others

1) Aggregated B 20

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Target Operating Model requires less employeesII. German insurance reorganization

New location concept: FTEs1 by region

Status as of 30/09/2005 Target(after implementation of Target Operating Model)

Total

3

D 2,952

Σ 6,127A 3,174

D 2,828

Σ 6,750A 3,921

D 2,936

Σ 9,223A 6,287

D 2,593

Σ 8,630A 6,037

D = DistributionA = Administration (operations + headquarters)

D = DistributionA = Administration (operations + headquarters)

D 11,309

Σ 30,728A 19,420

Total

D 2,789

Σ 5,457A 2,669

D 2,639

Σ 4,789A 2,150

D 2,746

Σ 7,125A 4,379

D 2,430

Σ 7,645A 5,214

D 10,605

Σ 25,016A 14,411

1) FTE = Full time equivalent

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Status

! Overall restructuring package and voluntary leave program agreed withWorkers� Councils

- No compulsory redundancies during 2006 and 2007

- Prolongation until 2010 possible, if specified growth and cost targetsare achieved on an annual basis

! Expected cost savings between EUR 500-600m1

! Expected restructuring costs approx. EUR 500m2


1) Before policyholders and tax; full run-rate after implementation of Target Operating Model until end of 20082) Bulk of provisions for restructuring costs expected to be booked in 2H 2006

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ImplementationEnsure technical and organizational requirements

Target Operating ModelRollout

01/2008

08/2006

07/2007

Conception

Time schedule for Target Operating Model

Today


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Agenda

I. Introduction


III. Take aways

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Take awaysIII. Take aways

German insurance reorganization

! Abolish complex structures and cost duplications

! Organize customer centric processes

! Exploit huge cross-selling potential

! Place emphasis on value-adding services

! Implement best in class business model

Generate profitable growth

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Appendix

Appendix

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Overview - German P/C1

12.4m customers - Allianz ranks # 1

Appendix

Key figures (IFRS)GPW (EUR bn)Expense ratio (%)Claims ratio (%)Combined ratio (%)Net income2 (EUR bn)Market share3 (%)

20019.7

26.970.997.81.6

17.4

20029.8

28.073.5

101.51.9

17.1

200310.124.968.193.00.4

17.2

200410.224.663.588.21.5

17.1

200510.024.263.787.91.2

17.0

Product mix3 (%) Distribution mix4 (%) Market share major groups5 (%)

38

24

151310

Casualty

Liability

Property

66

Car manufacturers (4%)

Agents

Brokers (18%)Dresdner Bank (5%)

5.1

17.1

5.3 5.3 5.2 4.9

Allianz ErgoGroup

HUKCoburg

R&V AMBGenerali

AXA Group

1) German P/C Group (SGD)2) Before minorities and amortization of goodwill3) Based on GPW

Motor

Others (7%)

2005 2005

4) Based on new business5) Market share 2004, based on GPW

Others

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Overview - German Life8.4m customers - Allianz ranks # 1

Appendix

1) Before minorities and amortization of goodwill2) Based on new business3) Based on GPW

4) E.g. time account insurance5) Market share 2005, based on new business excluding group pension fund (Pensionskasse) and pension funds

(Pensionsfonds)

Key figures (IFRS)Stat. prem. (EUR bn)

Expense ratio (%)Net income1 (EUR m)Market share2 (%)Market share3 (%)

20019.0

13.765

15.214.4

20029.79.462

19.014.9

200310.46.884

20.015.2

200410.910.422318.415.5

200512.27.0

32923.316.3


23

66

Endowment (6)

Term (1)

24

20

47

9

Brokers

Tied agents

Banks (Dresdner Bank 12%)

Other4Others

Annuities

2005 2005

Unit-linked (4)

4.18.79.69.7

23.5

5.2

Allianz ErgoGroup

AMBGenerali

Publ. LawCorp.

R&V Zurich

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Overview - German Health4.2m customers - Allianz ranks # 3

Appendix

1) Before minorities and amortization of goodwill2) Based on NPE; market share 2005 is preliminary

5) Figures for 2004, based on NPE

Key figures (IFRS)Stat. prem. (EUR bn)Expense ratio (%)Claims ratio (%)Combined ratio (%)Net income1 (EUR m)Market share2 (%)

20012.79.9

73.183.048.012.3

20022.9

10.671.081.663.612.4

20033.0

10.468.779.126.011.9

20043.09.3

68.978.280.311.4

20053.08.8

69.778.595.811.1


16

84 Comprehensive health care

27

12

61

Special units

Allianz agents 5.77.4

11.413.113.7

6.0

Debeka DKVGroup

Allianz Signal BBKK /Union

AMBGenerali

Complementary health care

Brokers

2005 2005

3) Based on GPW4) Based on new business

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Products: example for service enhanced products

! Assistance in case of accident that leaves victim immobilized or in need of care

- Only limited protection from state nursing care scheme provided

- Covers all detriments from the first day

- Customer can stay at home

- Benefits include daily lunch, shopping service, cleaning, dish washing

�Accident 60 Active�

Sold to 250,000 customers since introduction 1.5 years ago

! Allianz provides insurance and help for

- Lock and key service

- Blocked pipes

- Emergency heating

- Plumbing and electrical services

- Pest control

- Others

�Home emergency�

Sold to 100,000 customers since introduction 3 years ago


Risk coverage from Allianz Versicherungs-AG, assistance services from Mondial,

a 100% subsidiary of Allianz

Risk coverage from Allianz Versicherungs-AG, assistance services from Allianz

Handwerkerservice

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Munich, 13 July 2006Investment BankingStefan Jentzsch

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Agenda

I. Starting position/business model

II. Homogenization of coverage & client targeting

III. Modernization of lending business

IV. Growth driver Capital Markets

V. Abstract

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In EUR mIn EUR m

Performance Corporate Bank - LLPs as key driver of operating result and profit before tax


Operating revenues In EUR m

12 M2004

12 M2005

12 M2003

12 M2002

CAGR-1%

-31

1,058 1,014 1,0271,042

Loan loss provisions (LLPs)

CAGR-48%

12 M2004

12 M2005

12 M2003

12 M2002

-84

98118

54

14

Profit before tax

CAGR21%

12 M2004

12 M2005

12 M2003

12 M2002

+241

305

470546

321

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Performance DrKW � stagnation since 2003

Operating revenuesIn EUR m

Operating expenses Profit before tax

12 M2004

12 M2005

12 M2003

12 M2002

CAGR-2%

-157

In EUR m In EUR mCAGR-10%

2,045 2,1022,1512,259

12 M2004

12 M2005

12 M2003

12 M2002

-707

1,828 1,9271,876

2,634

12 M2004

12 M2005

12 M2003

12 M2002

272132

210

-559

+769


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Capital and headcount DrKW - need to be aligned to business growth

Risk weighted assetsIn EUR m

Risk capital FTE1)

12 M2004

12 M2005

12 M2003

12 M2002

CAGR+0.2%

+201

In EUR mCAGR-15%

12 M2004

12 M2005

12 M2003

12 M2002

-1,363

12 M2004

12 M2005

12 M2003

12 M2002

-289

CAGR-2%

30,736

40,527

5,658 5,849 5,944

1,927 2,1212,236

40,326

3,484 6,23333,823

Note: RWA and risk capital average values1) Payroll staff Front and Back Office


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Improvement operating performance needed �

CIR - lagging behind, but impacted by strategic legacy

12 M2004

12 M2005

12 M2003

12 M2002

12 M2001

104%

118%

87% 89% 92%

70%69%67%72%71%

DrKW CIR Average CIR competitors1)

12 M2004

12 M2005

12 M2003

12 M2002

12 M2001

20%

10%

22% 23% 24%

10%7%

12%

-19%-15%

DrKW RoE pre taxAverage RoE pre tax competitors2)

1) Competitors: Bear Stearns, Citigroup, Credit Suisse, Goldman Sachs, JPM Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, Lazard, Greenhill2) Competitors: Bear Stearns, Credit Suisse, Goldman Sachs, JPM Chase, Lehman Brothers, Merrill LynchNote: RoE pre tax calculated as profit before tax / avg. risk capital


RoE pre tax - underperforming the competition

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0

50

100

150

`

� to reach targets regarding key performance indicators

Actual 2005Target over next 3-5 years

1) Operating revenues/avg. risk capital2) Profit before tax/avg. risk capital3) Payroll staff Front and Back Office4) Payroll staff Front and Back Office

Bonus/head4

Revenues/head3 RoE pre tax2

CIR

Capital efficiency1

40%

25%

40%21%

28%


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Inefficiencies in setup and incentive model �

! Actual pool based on 55% T-Comp formula1

- Management focus on top level revenues only- Missing consideration of operating costs, loan loss

provisions, capital usage- No direct link to financial performance

! Limited transparency regarding bonus pool and allocation

! Structures do not follow business logic

! Artificial split of business units

! Redundant functions

! Client responsibilities not clearly defined

Inefficient structures

Wrong incentive system

1) Revenues multiplied with 55% less fixed personnel costs


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� addressed along key dimensions

! Implementation of simple, functional structure! Definition of clear-cut areas of responsibilities

! Initiatives to improve operating performance

! EVA based incentive system


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New structure - functional set up with clear areas of responsibility


C 09

Global Banking Capital Markets COO

AdvisoryInvest-ment

Banking

Global Finance

Credit Asset Mmgt. (CAM)

GlobalEquities

Fixed Income

Currencies Commo-

dities(FICC)

GlobalDerivatives

Global Distri-bution

Financing &

Securities Mgmt.

(F&SM)

Structured Finance

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New incentive system - allow for right level of incentivization

New bonus modelObjectives General bonus pool

! Value driven and integrated bonus model for the whole of the IB division (front office)

! Functional bonus to be paid via agreed allocations

! EVA based incentive systems

! Linkage bottom line performance and payout

! All paid on same P&L reflecting market reality

! Greater transparency

! Everyone incentivizedto work together

! Open to all permanent employees in IB division

! Allocation based on financial performance of individual business and overall IB division

! Transparency via accrual and allocation logic

! General bonus pool to be implemented in 2006

! No changes to the terms of stock deferrals in 2006


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General bonus pool - a two step process

- Step 1 �

Setting the overall IB pool

! Pool based on overall result for IB division

! Formula based on percentage of �residual income� - EVA pre tax and bonus- after divisional and functional costs- after adjusting for corporate tax charge

! Functional costs capped by charge agreed in the budget/MYP

! Bonus methodology indicative but not contractually binding ��force majeure� right of the CEO

- Step 2 �

Allocating the pool to

individual businesses

! �Formulaic� and �discretionary� pools

! Formulaic pool - creating transparency to business- Relative business unit performance measured by residual income- Business specific multiplier

! Discretionary pool �smoothing� bonus-payouts across the cycle by subsidising and incentivization when necessary


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Initiatives to improve operating performance

Homogenization of coverage & client targeting

! Build unified client coverage model! Implement sector approach across

all customer segments

Actions Targets

! Leverage of Capital Markets know-how

! Improve client penetration and share of wallet

Modernizationof lending business

! Build integrated lending platform! Separate origination from coverage

and asset ownership! Roll out Credit Asset Management

! Tailor-made solutions for increased customer retention

! Coverage exempt from credit responsibilities

! Improve capital efficiency

Growth driver Capital Markets

! Realize growth through improved leverage of client relationships

! Streamline operational approach (front-to-back)

! Increase cross-selling! Top 5/10 position in core

competencies! Elimination of duplications,

increased efficiency


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Current situation �

! No explicit and shared strategic customer focus

! Cross-selling potential still by far not captured

! Missing separation of origination, product delivery and portfolio management

! Still too many administrative tasks within coverage function

Issues: strategy and coverage model

! Systematic and consistent IB wide account planning and controlling process does not exist

! True economics per customer still not transparent

! No common CRM platform in place across IB

! Accounting along product/ customer matrix not yet implemented

Issues: management process


Inconsistent coverage setup within CB, CF&O1

and Capital Markets

1) CF&O: Corporate Finance & Origination

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� triggering adjustment and coordination of target customers

! Focus on �real� IB clients with capital market potential and multi product demand

! Coherence regarding customer, risk, research and Capital Markets strategy

Clear cut IB target clients

! Elimination of overlap between business clients and large corporates (Geschäftskunden, GK)

! ~ 90 % of GK as encapsulated business within CB division to be transferred to Private Bank

Proper value proposition for �Mittelstands�-segment

! Selective usage of capital market products (i.e. interest rate and FX derivatives, M&A) ensured via relevant service level agreements

Usage of existing competencies and product portfolios


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Future focus on real IB clients and sector approach

1) Multinational accounts, corporate groups and top large corporates (GK)

Investment Banking

! Leverage existing competencies within international franchise, offering

- Capital Markets products and services to Corporate Banking clients

- Corporate Banking products to international clients

! Focus on generation of cross-/ deep-selling

Targets

! Target customer lists across all segments

! CRM�s to lead strategic CEO/CFO dialogue

! Sector based coverage in line with existing expertise in equity research, M&A and back-office functions

! CRM�s accountable for entire customer relationship

! Consolidation of coverage in 4 regions with 6 locations

Relationship focus

Institutionals

# Clients: ~ 3,800

Corporates(1)

# Clients: ~1,900


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Addressing dynamics and opportunities in lending business


Issues: strategy and management Integration benefits

! Most financing products are run more or less uncoordinated in silos and without a common strategy

! Inconsistent communication/linkage with coverage

! Processes, structure and functions in DrKW/CB are different

! Ongoing review of capital allocated to EVA-negative loans/clients

! Systematic credit asset management across regions/segments/clients

Synergies availabledue to integrated processes/platforms

Optimized capital usage with integrated Credit Asset Management

Credit Asset Management

Partly uncoordinated setup of financing products

1

2

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Clear upside potential and benefits �1

! Implementation of consistent product strategies

! Usage of common IT-systems and pipeline

! Unification and simplification of processes and functions

Bundling of all financing activities

! Shift credit responsibility away from CRM

! Focus CRMs on cross-/deep-sellingImplementation �Credit-specialist�1

! Support operational requirements of our clients in Germany

! Grow business internationally via leverage of competencies within existing franchise

Bundling of international trade business


1) �Kredit-Fachbetreuer�

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... via integration of lending activities on one common platform

Leverage finance (tbd)! LBO incl. mezz finance

(cash flow driven)! DPF (bridge to securitization)! Infrastructure (cash flow und bridge)

Corporate finance! Acquisition finance! Debt structuring/balance sheet

restructuring! Corporate syndicated loans

Specialty finance! Real estate! Project finance ! Public finance! Ship finance! Film finance! Renewable energies

International products! Non-Euro sight deposits! Cross border payments! Documentary business! International guarantees! Structured export & trade fin.! Bilateral loans to financial institutions

Credit products! Basic lending! Guarantees! Bilateral credit lines, mixed limits! Term loans! Treasury credit lines ! Plain vanilla forfaiting

Bilateral credit & international products


Syndicated credit

Global financeplatform

1

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Roll out of Credit Asset Management for growth and efficiency

2

Coverage

Client coverageand origination

Transferpricing

Benefits of Credit Asset Management

Management of excess capital and improvement of diversification

Optimization of portfolio/secondary market transactions

(Internal) price setting for all assets by portfolio management,transfer of all assets to portfolio management

CAM

Manages the assets by! risk type! industry! regionbased on policies set by credit committee

Secondary market

Credit tradingSecuritizationCredit derivatives

Portfoliooptimization


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! Missing differentiation vis-a-vis market and customers

! Cross selling potential not fully captured

! Missing clarity regarding product responsibilities within Capital Markets

! Coverage without clear responsibilities

Current status

Focusing Capital Markets

Exploit intrinsic potential of Capital Markets

! Clear-cut positioning, focus on core competencies

! Exploitation of revenue potential of client portfolio and target accounts

! Clear assignment of responsibilities and reduction of redundancies

! Bundling of sales competencies in S&TPS1

and SAM2

Future potential


1) S&TPS: securities & treasury products sales2) SAM: sales and marketing

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Key objectives and associated initiatives - expansion of growth areas

Focus on client business

! Full exploitation of cross-selling potential

! Increase in share of customer business

Targets Actions

! Consistently measure account executives on overall client profitability and product coverage

! Improve alignment of incentivization of sales force with target client definition

! Disband MRVT1 business group, align back book activities in asset classes

Focus on core competencies

! Expand market share in high margin businesses (e.g. structured products)

! Gain significant (top 5/10) position in strategic areas

! Thoroughly analyze product lines to identify areas of growth and areas of disinvestment

! Continuously monitor/improve productivity

! Develop high-performance culture by aligning compensation to bottom line productivity

1) Macro & Relative Value Trading


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Key objectives and associated initiatives -increase in efficiency

Focus on connectivity

! Full exploitation of customer potential

! Strong �product development shop� for the group

Targets Actions

! Upgrade product knowledge of German sales force

! Improve understanding of client needs to better utilize our product development capabilities

! Buildup e-platforms in order to facilitate access to Capital Markets products

Reduction of complexity

! Fully integrated international business model

! Increase in efficiency and effectiveness

! Eliminate duplications in product offering

! Align regional activities with global business model and strategy

! Streamlining of product development process to improve �time-to-market�


C 25

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New service concept for sales Germany -integration of SAM and S&TPS

Criteria SAM head office

Service concept ! SAM1: market related clients! S&TPS2 regions: new service concept aligned with SAM

Locations

Servicing of further business clients

! Centrally in Frankfurt with highly specialized sales staff

! Via S&TPS regions with BTW3 asset management and BTW risk management

Focused coverage in the new concept

Clients

! All multinational clients! Selected large caps/corporate clients! Selected mid caps/business clients! Institutional investors incl. banks

! Total no. of clients ~ 1,400! Roughly 20% of former regionally covered clients! Roughly 50% of S&TPS revenues 2005

1) SAM: sales and marketing 2) S&TPS: securities & treasury products sales3) BTW: �Betreuer Wertpapier� (consultant securities)


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Business Services

Corporate Functions

Private &Corporate Clients

InvestmentBanking

Dresdner Kleinwort - an integral part of Dresdner Bank

Key figures Dresdner Kleinwort 20051New business model

1) Pro forma figures 2005 (not reflected in segment reporting yet)

V. Abstract

Operating revenues 2,647

Operating expenses 2,338

Loan loss provisions -19

Operating result 327

Risk capital (∅, EUR bn) 3.2

RWA (EoP, EUR bn) 59.4

FTE 6,235

CIR 88.3%

RoE pre tax 10.7%

Capital Efficiency 0.8

Pro formain EUR m

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Strategic focus - orientation going forward

Our activities are driven by customer needs, no self-interest in proprietary trading or investments

Positioning as pan-European investment bank with strong focus on Germany and UK

Improvement of performance and key ratios (CIR and RoE) to come in line with market average

V. Abstract

C 29

Appendix

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Investor Relations contacts

Oliver Schmidt Tel. +49 (0) 89 3800-3963

Head ofInvestor Relations

e-mail: [email protected]

Susanne Arheit Tel. +49 (0) 89 3800-3324


Peter Hardy Tel. +49 (0) 89 3800-18180

e-mail:[email protected]

Andrea Förterer Tel. +49 (0) 89 3800-6677


Daniela Meintzschel

Tel. +49 (0) 89 3800-17975


IR events

Christian Lamprecht

Tel. +49 (0) 89 3800-3892


Holger Klotz Tel. +49 (0) 89 3800-18124


Fax: +49 (0) 89 3800-3899e-mail: [email protected] Internet (English): www.allianz.com/investor-relations

Internet (German): www.allianz.com/ir

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Financial calendar 2006/20071

11 August 2006 Interim report first half of 2006

10 November 2006 Interim report first three quarters of 2006

22 February 2007 Financial press conference for the 2006 fiscal year

23 February 2007 Analysts� conference for the 2006 fiscal year

02 May 2007 Annual General Meeting

11 May 2007 Interim report first quarter of 2007

10 August 2007 Interim report first half of 2007

14 November 2007 Interim report first three quarters of 2007

1) As we cannot rule out of dates, we recommend to check them on the Internet at www.allianz.com/financialcalendar.

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Disclaimer

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

Cautionary Note Regarding Forward-Looking StatementsCertain 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 includingthe 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 updateThe company assumes no obligation to update any information contained herein.

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