ALLIANZ GROUP 50 Allianz AG Allianz AG FRANCE  In fiscal 2003,  gross premiums of Allianz AG fell by 2.1 percent to 5.5 (5.6) billion euros, which was essentially due to the fact that certain Group companies increased their retentions.  The  combined ratio was down to 105.1 (104.1) percent. In property and casualty reinsurance, i. e. excluding reinsurance business in life and health insurance, the combined ratio was 100.2 (102.9) percent. Investment income fell to 4.8 (9.5) billion euros, even though it includes the greater part of the capital gains from the disposal of shares of Beiersdorf AG. The extraordinarily high investment income of the previous year was the result of a series of trans- actions in connection with the takeover of Dresdner Bank as well as other stock disposals. The use of a macro hedge to re- duce our equity exposure depressed investment income by 1.3 billion euros. Earnings after taxes amounted to 4.8 (9.5) billion euros.  In the  current fiscal year , Allianz AG’s reinsurance business should generate premium income of the same amount as last year, provided that rates stay at acceptable levels. In the absence of extraordinary loss developments, the underwriting result will again be positive. The  claims ratio increased to 77.7 (75.3) percent. At 27.4 per- cent, the  expense ratio also improved from the previous year (28.8 percent).  Premium growth of 8.6 percent is primarily attributable to rate adjustments. All business lines contributed to this increase. Pre- mium growth in the private insurance lines came primarily from automobile and household insurance. In international corporate business, we mainly increased rates in liability insurance. While we also increased rates in the business with small- and medium- sized companies, our very restrictive underwriting policy meant that the number of contracts slightly decreased. AGF’s cooper- ation with Crédit Lyonnais continues to develop well. Premium income at our joint subsidiary, Assurances Fédérales, climbed 15.8 percent to 94.6 (81.7) million euros. age points to 79.8 percent. In particular, these measures in- cluded rate adjustments, agreements on higher retentions, the introduction of a stricter underwriting policy and the elimina- tion of unprofitable business from our portfolio. Substantial in- creases in the international corporate business also helped to improve the claims ratio. The efforts of the French authorities to enforce road discipline, for example through more rigorous speed checks, clearly reduced the loss frequency in automobile insurance, which was also reflected in the lower claims ratio. Significant savings in information technology and administra- tion brought down the  expense ratio by 2.0 percentage points to 24.4 percent. Despite high payouts amounting to 24.3 million euros in con- nection with the fire and flood catastrophes in the South of France, the measures introduced as part of our turnaround pro- gram were able to bring down the  claims ratio by 4.7 percent- Investment income  amounted to 751 (701) million euros.  Earnings after taxes decreased to 294 million euros. The previ- ous year’s results of 383 million euros had been increased through a tax yield.  2003 2002 2001 Gross premiums ¤ mn 5,485 5,600 5,687 Premiums earned (net) ¤ mn 3,607 3,781 3,477 Claims ratio % 77.7 75.3 86.3 Expense ratio % 27.4 28.8 26.9 Earnings after taxes ¤ mn 4,815.3 9,512.9 2,516.4 Investments ¤ mn 92,273 88,431 83,751 _  Premium income at AGF amounted to 5.4 (4.9) billion euros. _  AGF thus maintained its third place ranking among French property and casualty insurers.