SUPERVISORY BOARD REPORT 5 Ladies and Gentlemen,  In the course of 2003, the members of the Supervisory Board dealt in depth with the situation of the company, against the background of a continuing difficult economic environment. We advised the Board of Management with respect to the management of the company, oversaw its conduct of business and were directly involved in decisions of fun- damental importance. The Supervisory Board held four meetings during the reporting period. Between meetings, the Board of Manage- ment informed us in writing on important matters. In addition, the Chairman of the Super- visory Board was kept up-to-date on major developments and decisions. The Board of Management regularly provided us with timely, comprehensive infor- mation on the economic and financial development of the Allianz Group, including the risk situation, important business transactions and corporate strategy. We discussed in detail the company planning for the year 2004 and asked for explanations of the devia- tions in the course of business from the stated plans and objectives. Improvement of the operating result and strengthening of the capital base Our delibera- tions were centered on the measures taken by the Board of Management to improve operating profitability. In all meetings, the Board of Management informed us about the development of the Group’s revenues and earnings, developments in the individual business segments and the financial situation. We were able to ascertain that operations were improved in all business areas, in some cases significantly. In several meetings, the Group’s capital resources were discussed. In April 2003, we approved the capital increase with subscription rights for the shareholders. In a difficult market context, this increase was successfully completed with proceeds of 4.4 billion euros, thereby strengthening the company’s equity base and securing the Group’s high rating. To reduce the dependency of the company’s shareholders’ equity and earnings on fluctuations in the capital mar- kets, the Board of Management substantially reduced the share of equity investments. Among others, this was done through a significant reduction of the shareholdings in Münchener Rückversicherungs-Gesellschaft AG (Munich Re) and Beiersdorf AG. The Supervisory Board considers these measures to be appropriate. Successful restructuring efforts In two special reports, we were given detailed information about the progress in the implementation of the turnaround program at Dresdner Bank. We noted that important intermediary objectives towards restoring the profitability of the bank had already been achieved. We were also able to ascertain that the integration of the bank into the Allianz Group has made good progress. In this context, we were informed of the merger of the IT service activities of Allianz and Dresdner Bank, which are now combined in AGIS Allianz Dresdner Informations- systeme GmbH. The previously launched program to improve the business performance of the French AGF Group was also pur- sued with increasing intensity. We will closely monitor its further progress. In addition, the ongoing success of the restructuring of the Group’s U.S. company Fireman’s Fund was presented to us. The same applies to Allianz Global Risks Rückversicherungs-AG, the company that controls the Group’s indus- trial insurance business. Other topics of discussion The Board of Management presented its “Three Plus One” program to us, which summa- rizes the Group’s objectives and initiatives through 2005. The program calls for strengthening the capital base of the company, improving its operational profitability, making its structures less complex and bringing about a sustainable increase of its value. To reach the latter objective, the Holding makes growth capital available to its Group companies. One of the essential criteria for allocating capital is a company’s ability to make a lasting contribution to the Group’s economic value added.