G ROUP MANAGEMENT REPORT Property and Casualty Insurance 49 GERMANY _  With revenues of 10.1 billion euros, Allianz Sachgruppe Deutschland (SGD) is number one in the German property and casualty  insurance market. _  In addition to being the holding company, Allianz AG is also the Group’s reinsurer. Its premium income amounted to 5.5 billion  euros.  Sachgruppe Deutschland  Gross premiums Earnings after taxes and before amortization of goodwill Sachgruppe Deutschland 2003 2002 2001 Gross premiums ¤ mn 10,109 9,782 10,075 Premiums earned (net) ¤ mn 6,858 6,471 6,662 Claims ratio % 68.1 73.5 70.9 Expense ratio % 24.9 28.0 26.8 Earnings after taxes ¤ mn 392.0 1,883.5 1,659.9 Investments ¤ mn 22,349 21,298 22,007 Employees 32,001 32,862 31,384 2003 2002 2001 ¤ mn ¤ mn ¤ mn Allianz Sachgruppe Deutschland 392 1,883 1,660 Allianz AG 4,815 9,513 2,516 Subtotals 5,207 11,396 4,176 Consolidations Profit transfer 602 1,373 284 Dividends, others 504 788 120 Property and casualty insurance in Germany 4,101 9,235 3,772 2003 2002 2001 ¤ mn ¤ mn ¤ mn Allianz Sachgruppe Deutschland 10,109 9,782 10,075 Allianz AG 5,485 5,600 5,687 Consolidation property and casualty insurance, Germany – 2,967 – 3,068 – 3,118 Property and casualty insurance in Germany 12,627 12,314 12,644 Total  premium income in Germany increased by 313 million eu- ros or 2.5 percent to 12.6 billion euros. At 4.1 (9.2) billion euros,  earnings after taxes were substantially lower than in 2002, which is in particular attributable to excep- tionally high disposition gains in the previous year. Premium income of SGD grew by 3.4 percent to 10.1 billion eu- ros, driven mainly by premium growth in automobile insurance (2.7 percent), casualty insurance (3.9 percent) and liability in- surance (4.5 percent). The  claims ratio clearly improved to 68.1 (73.5) percent. In the previous year, the high claims expenses caused by the flooding disasters had pushed up this indicator by 5.1 percentage points. Putting this aside as one separate occurance, the improvement comes to 0.3 percentage points. Comprehensive cost cutting, mainly in administrative expenses and IT costs, which had  already been launched in the previous year, brought down the expense ratio to 24.9 (28.0) percent. SGD’s  investments totaled 22.3 (21.3) billion euros at the end of the year. The corresponding income of 565 million euros re- mained clearly below the year 2002 figure of 2.4 billion euros. This figure, however, reflected the one-off special effect produced by the substantial gains. As a result,  earnings after taxes fell to 0.4 (1.9) billion euros. In the  current fiscal year , we expect SGD to be able to sustain its improvement of the combined ratio, even while it is pursu- ing its risk and earnings-oriented rate and underwriting policy. We project premium growth of approximately 1 percent. 