ALLIANZ GROUP 52 Net investment income of the RAS Group returned to normal levels at 381 (1,033) million euros. The much higher income in the previous year was attributable to the sale of part of the company’s real estate holdings.  Net investment income at Lloyd Adriatico came to 69 (69) million euros. We expect our Italian property and casualty insurance business to continue its growth in the  current year while the claims and expense ratios remain stable or show slight improvement. How- ever, this forecast is contingent upon the positive effects that the legal reform aimed at greater discipline in road traffic (dri- ver’s permit with point system, for example) is expected to have on automobile insurance. Earnings after taxes of our Italian operations came to 402 (842) million euros. Of this amount, 278 (742) million euros were generated by RAS Group, while Lloyd Adriatico contributed 124 (101) million euros.  In local currency, we achieved  revenue growth of 2.7 percent. The increase came mainly from commercial business and spe- cialties such as the “Petplan” health insurance for animals. In automobile insurance for private customers, we reduced the vol- ume of our portfolio because there are indications that prices will fall in the medium term and thus will no longer be risk-ad- equate. At the same time, we restructured our portfolio and un- derwrote more profitable business, for example in building in- surance.  Due to a risk-adequate pricing policy and the absence of major and elementary losses, the  claims ratio improved 1.9 percent- age points to 66.9 percent. The  expense ratio fell to 28.7 (29.5) percent. To maintain strict cost control in the future, we founded a company for the provision of IT development services in India. In the current fiscal year, its task will be expanded to policy administration. In the  current fiscal year , we are concentrating our efforts on maintaining our profitability by expanding the business with commercial customers and by scaling down automobile insur- ance. Overall, we expect this reorientation to slow down rev- enue growth in pound sterling. Lower realized gains than in the previous years depressed  net investment income to 181 (248) million euros.  Earnings after taxes went down to 199 (237) million euros, the overall result of our continued improvements in underwriting techniques. 2003 2002 2001 Gross premiums ¤ mn 2,519 2,699 2,492 Premiums earned (net) ¤ mn 1,838 1,881 1,766 Claims ratio % 66.9 68.8 73.2 Expense ratio % 28.7 29.5 30.6 Earnings after taxes ¤ mn 198.6 236.9 69.0 Investments ¤ mn 3,071 2,879 2,753 Employees 4,347 4,121 3,992 Allianz Cornhill GREAT BRITAIN  _  Our subsidiary Allianz Cornhill ranks sixth in the British property and casualty insurance market. _  At 2.5 (2.7) billion euros, premium income did not quite come up to previous year’s figure, which is attributable to the declining exchange rate of the pound sterling with respect to the euro.