G ROUP MANAGEMENT REPORT Life and Health Insurance 73 ASIA-PACIFIC REGION acquisition. Whilst the interest rates in the market dropped from 7 percent at the start of 2003 to 5.5 percent at the end of the year (and fell as low as 4.5 percent in between), the guaranteed interest for new business stayed at 5 percent. To shore up our earnings potential, we had to act without delay. We therefore embarked on the reorientation of our company: This translates into a 13.3 percent growth of  revenues .  With a premium volume of 1.6 (1.9) billion euros, or 62 per- cent of total revenues in the Asia-Pacific region, Allianz Life In- surance Korea is our biggest life insurer in this area. Since August 2003,  South Korea has permitted the sale of life insurance over the bank counter. We participate in this business through Hana Life, our joint venture with the South Korean Hana Bank. With premium income of 87 million euros, this business is off to a very promising start. In  Taiwan , the methodical restructuring of our joint venture  Allianz President Life resulted in very successful sales of unit- linked life insurance products and pushed premium income up to 827 million euros. This boosted our market position from fourteenth to fifth place.  In  Thailand , our joint venture Ayudhya Allianz CP Life increased its premium income which put it in third place among Thai- land’s life insurers. In new business, it ranks second.  In  India , our joint venture continued its growth and raised its premium income.  In  Malaysia , our life insurer posted 35 percent growth in new business; in  Indonesia premium income was up 57 percent.  We abandoned the life insurance business in  Singapore because even long-term earnings prospects were unsatisfactory. With  earnings after taxes of 2 (– 9) million euros, our business in the region returned to profitability. Our subsidiary Allianz Life Korea required an unscheduled amortization of 224 million euros of goodwill. The combination of a low-interest environment and high guar- anteed minimum interest rates has brought South Korea to the point where income generated by the current portfolio no longer corresponds to the assumptions we made at the time of We expect earnings to improve in the  current fiscal year . Total revenues by country _  We also offer life and health insurance in Asia and are steadily expanding our business in the rapidly developing markets of this region. _  Total premium income from this region amounted to 2.6 billion euros. _ We revised the product portfolio and will primarily launch  capital market-oriented products as well as products with low guaranteed minimum interest. _ Parallel to the strengthening of our distribution organization through restructuring and training programs, we revised our commission system and put it in on a stronger performance- oriented footing. _ A far-reaching cost cutting program with considerable savings in the back office will substantially improve our cost situation. Asia-Pacific Region 2003 2002 2001 ¤ mn ¤ mn ¤ mn Korea 1,609 1,894 1,642 Taiwan 827 277 127 Indonesia 74 47 25 Malaysia 72 54 13 China 18 16 8 Pakistan 3 2 2 Phillippines – 8 – Total 2,603 2,298 1,817 Total premiums earned (net) 1,303 1,605 1,202 Total earnings after taxes 2 – 9 – 5