G ROUP MANAGEMENT REPORT Property and Casualty Insurance 59 Allianz Global Risks Rückversicherungs-AG In the  current fiscal year , the company will further diversify its portfolio. We expect the company to enhance its earnings per- formance. 2003 2002 Gross premiums ¤ mn 1,346 1,136 Premiums earned (net) ¤ mn 1,038 559 Claims ratio % 70.9 100.8 Expense ratio % 27.9 41.7 Earnings after taxes ¤ mn 77.1 – 256.7 C REDIT INSURANCE  _  We provide worldwide credit insurance through Euler Hermes S. A. Premium income declined 0.9 percent to 1.6 (1.6) billion euros. What were the determining factors in this downturn? The lack- luster economic climate hurt our clients’ business, while we set tighter standards for the risk-oriented underwriting policy and eliminated bad risks from our portfolio. In addition, currency effects diminished revenues in euro accounts. Due to the absence of major losses and the improved risk qual- ity of the portfolio, the  claims ratio fell 22.8 percentage points to 49.3 percent. At the same time, the  expense ratio improved to 32.7 (34.2) percent, even though revenues declined and ad- ministrative cost-cutting programs in many countries required considerable expenditures. This success is the result of signifi- cant cost reductions in the IT area due to synergies achieved through the integration of Euler and Hermes. Investment income fell 39 million euros to 58 million euros.  Earnings after taxes improved significantly to 119 (16) million euros. The integration of Euler and Hermes has given us access to a pool of information and data whose breadth and depth will enable us to make even better underwriting decisions in the future. For this reason, and assuming the world economy will continue to pick up speed on its path to recovery, we expect the claims ra- tio to remain favorable in the  current fiscal year . The expense ratio should continue its downward course because of impend- ing further anticipated synergies, particularly in information technology. On the whole, we expect earnings after taxes to re- main stable. 2003 2002 2001 Gross premiums ¤ mn 1,564 1,579 1,589 Premiums earned (net) ¤ mn 845 857 901 Claims ratio % 49.3 72.1 68.0 Expense ratio % 32.7 34.2 44.0 Earnings after taxes ¤ mn 119.3 16.1 90.5 Investments ¤ mn 2,669 2,420 2,562 Employees 5,057 5,687 5,849 Credit insurance