ALLIANZ GROUP 142 The gross reserves for loss and loss adjustment expenses of the Group’s insurance business are as follows: Reserves for loss and loss adjustment expenses Reserve for premium refunds includes  ¤ 2,650 (2002: 2,664) mn in annuity reserves for existing annuity agreements. The discount rate for such cases varies between 3.0 % and 6.5 %. The reserve for premium refunds includes the amounts to which pol- icyholders are entitled under the relevant local statutory or contrac- tual regulations in the form of experience-rated or other participa- tion in profits. In addition, the reserve for premium refunds includes amounts arising from the valuation of certain assets and liabilities of the Group’s life and health insurance enterprises at market value (the “latent” reserve for premium refunds). The reserve for premium refunds has changed as follows: 12/31/2003 12/31/2002 ¤ mn ¤ mn a) Amounts already allocated under local  regulations As of 1/1  7,131 10,088 Translation differences – 35 – 14 Changes in the scope of consolidation – 7 81 Change 237 – 3,024 As of 12/31  7,326 7,131 b) Latent reserves As of 1/1 9,059 11,501 Translation differences – 24 4 Change due to fluctuations in market value 1,960 – 928 Changes in the scope of consolidation 1,031 233 Changes due to valuation differences  credited to income – 2,014 – 1,751 As of 12/31  10,012 9,059 c) Total 17,338 16,190 In addition to the amounts allocated under a), amounts totaling ¤ 3,514 (2002: 3,680; 2001: 3,670) mn were directly credited to pol- icyholders of the Allianz Group from the surplus. In 2003, there were no extraordinary insured events that had a ma- terial effect on the Group’s shareholders’ equity, investments or earn- ings. The settlement of the special events of the previous year, in par- ticular the examination and subsequent increase of the reserves for asbestos-related claims in 2002 as well the claims stemming from the terrorist attack of September 11, 2001, did not show any unusual de- velopment in 2003. No retrospective back-payments of premiums have been de- manded. No exceptional events have occurred since the balance sheet date which would have material affects on the net worth, fi- nancial position or results of the Group. The balance sheet amount The reserves for loss and loss adjustment expenses (loss reserves) have changed in Property/Casualty insurance during the year under review as follows: 12/31/2003 12/31/2002 ¤ mn ¤ mn Property/Casualty 56,244 59,654 Life/Health 6,538 6,307 Total 62,782 65,961 2003 2002 ¤ mn ¤ mn 1. Loss reserve as of 1/1 a. Gross 59,654 61,476 b. Amount ceded to reinsurers – 14,588 – 16,156 c. Net 45,066 45,320 2. Plus claims (net) a. Claims in the year under review 25,712 27,130 b. Previous years’ claims 279 646 c. Total 25,991 27,776 3. Less claims paid (net) a. Claims in the year under review – 11,860 – 12,642 b. Previous years’ claims – 13,155 – 12,143 c. Total – 25,015 – 24,785 4. Currency translation adjustments –1,822 –3,367 5. Change in the group of consolidated  companies –25 122 6. Loss reserve as of 12/31 a. Net 44,195 45,066 b. Amount ceded to reinsurers 12,049 14,588 c. Gross 56,244 59,654