ALLIANZ GROUP 90 Risk control in asset management Risk monitoring by third parties Supervisory authorities and rating agencies are additional risk monitoring bodies. Supervisory authorities specify the minimum precautions that must be taken in individual countries and at the international level. Rating agencies determine the relation- ship between the required risk capital of a company and the available safeguards. In their evaluation of capital resources, the rating agencies include equity shown in the balance sheet, mi- nority interests and other items representing additional securi- ties in times of crisis. At the end of the year, this total was at a level that corresponds to our current ratings. At the end of fis- cal 2003, the financial strength of the Allianz Group was rated by Standard & Poor’s as “AA–” and by A. M. Best as “A+”. The  Allianz Group’s credit risk was rated by Moody’s as “Aa3”.  Risk capital At the end of fiscal 2003, the risk capital of Dresdner Bank, before risk-reducing diversification effects, was composed as follows: 0.7 billion euros were allocated for market risks,  4.8 billion euros for credit and counterparty risks, 3 billion eu- ros for risks from private equity and other investments, 1.4 mil- lion billion euros for operational risks and 0.7 billion euros for other business risks. After deduction of diversification effects, total risk capital amounted to 8.3 billion euros.  Required risk capital by type of risk Organizational risk controlling At the organizational level, risk management and risk controlling are strictly separated on the basis of the principle of dual control. Dresdner Bank’s risk man- agement sets the limits for the company’s different activities that are exposed to risks. This is done in accordance with a general framework approved by the Board of Management. Business risks These risks stem from an unexpected variance of results, which can arise when a downturn in earnings, for example as a result of changes in the competitive situation or in customer behavior, can not be compensated by a correspon- ding reduction of expenses. Operational risks Dresdner Bank has a system for the system- atic identification, measuring and controlling of operational risks. The essential risk factors are evaluated in the framework of a structured self-assessment. Risk control in asset management is an integral part of the processes of the local units or the investment platform. The Cor- porate Center ensures that Group-wide standards for asset management are applied at the local level. The individual asset management companies continually monitor the portfolio risks of the customer assets they manage by using analytical tools specifically adapted to the risk profile of the product concerned. At the same time, the performance of the various product lines is periodically monitored and analyzed at the Group level. At the end of fiscal 2003, risk capital in the asset management seg- ment – calculated according to the Standard & Poor’s model and before minority interests – amounted to 1.8 billion euros.  12/31/2003 12/31/2002 ¤  bn ¤  bn Market risks 0.7 1.0 Credit and counterparty risks 4.8 7.5 Private equity/investments 3.0 3.0 Operating risks 1.4 1.4 Business risks 0.7 0.7 Total (before diversification effect) 10.7 13.6 Diversification – 2.4 – 2.6 Total 8.3 11.0