Investor Relations Allianz Roadshow USA November 2000 AV Medienzentrale 10.00
I. Introduction Who are we? Henning Schulte-Noelle Chairman and CEO Paul Achleitner Finance Joachim Faber Asset Management Helmut Perlet Controlling, Accounting, Tax 2
I. Introduction Why are we here? No regular roadshow Nor selling stock or transaction Simply... Courtesy call because we are in town Reason is listing of Allianz at NYSE tomorrow Technical listing - no offering Today... Short overview / messages Limited financials (well known) Availability for Q&A 3
I. Introduction Why are we listing at NYSE? Highest standards of transparency Better access to largest capital market Tax effective acquisition currency (if required) Share incentive program for US employees 4
Agenda I. Introduction II. III. IV. Overview Growth opportunities Profitability V. Summary
II. Overview Financial services provider with three core businesses Allianz Group Life / Health Insurance Property & Casualty Insurance Asset Management Presence in 70 countries Top 3 in key European markets Strong growth in asset accumulation > 9 bn euros market capitalization with AAA rating* *) As per 10/00. 6
II. Overview One of the leading global players 61 bn euros total insurance revenue (12/99)* P&C 8% 42% Life/Health 64% 36% Domestic Non domestic 719 bn euros assets under management (6/00)** 3rd party 1% 49% Other 27% Domestic 73% Non domestic *) Gross premium income including sales of investment oriented life products. **) Including Nicholas-Applegate. 7
II. Overview Top position in the large Euroland countries Eurozone Germany France Italy Netherlands Spain Belgium Austria Ireland Portugal Property & Casualty Life / Health Total 1 3 2 3 2 1 2 1 2 12 11 6-6 1 3 2 10 3 n.a. Non-Eurozone UK Switzerland 3 >10 6 >10 6 Eastern Europe Poland Czech Republic Hungary Croatia Slovakia Bulgaria Based on GPW at year end 1999 (except for Belgium, the Netherlands -1998 figures including Zwolsche Allgemeene) 7 3 1 3 2 2 9 6 3 9 1 4 3 2 8
II. Overview One of the leading asset managers worldwide 719 bn assets under management* Nicholas-A. Allianz Asset Management Equity-Division Institutional Retail 3 rd party assets 368 bn Growth style o Nicholas-Applegate o Pimco Equity Advisors (US) o Nicholas-Applegate (non-us) Insurance assets 31 bn Value style Core style o Oppenheimer Capital o NFJ o Allianz Asset Management o Cadence o Pimco Equity Advisors o NFJ o Allianz Asset Management *) As per 06/00 including 4 bn euros from Nicholas-Applegate. 9
II. Overview Strong brands for multi-choice environment Strong existing brand awareness* - Germany 100% - France 83% - Italy 82% Branding especially critical in e-finance: - High customer acquisition costs - Brand and physical presence needed to build trust *) Source: Icon Brand Navigation, aided brand awareness as per 12/99. 10
Agenda I. Introduction II. III. IV. Overview Growth opportunities Profitability V. Summary 11
III. Growth opportunities The private pension opportunity - German example Public pension in % of last net income Present level 100% 70% private provisioning Business opportunity Level in 2030 according to government 61% pension reform > 40 bn EUR** Actual level in 200 according to independent demographers* 30% 0%? Expected additional growth driven by increased awareness of actual pension gap *) Source: West LB. **) Savings incentivized by final stage of potential pension reform in 2008. 12
III. Growth opportunities Similar opportunities in other core markets Net present value of public pension schemes as % of 1994 GDP 0-61% -102% -9% -108% -70% -23% -23% -20% -40% -60% -80% -100% Germany France Italy Spain Japan UK US Source: OECD, 1996 Allianz home markets 13
III. Growth opportunities The European old-age provision opportunity Assets in Europe EUR bn 14,00 CAGR 13.0% Mutual funds 1.9% 4,270 7,820 Corporate pension plans Life insurance 9.6% 12.9% 1993 1998 2003 e Source: McKinsey, 2000 14
III. Growth opportunities Allianz well positioned to take advantage of the potential European pension boom L/H ranking in European core countries European distribution Tied agents Brokers Bank branches Germany 1 12,20 7,329,088 France 6,7 * 2,400 - Italy 2 4,073 * n.a. 3,037 Total European customer base > 0 million * Including financial advisors and specialized life sales force. 1
III. Growth opportunities Other growth opportunities in emerging markets Among the top foreign players in the emerging markets...... and especially strong in Central and Eastern Europe Allianz AIG Generali ING Zurich Non-Life Life Allianz 7.1% ING CGU.1% 4.0% AIG 3.1% Generali 2.7% Aegon 2.2% AXA 0.6% Winterthur 0.6% 0 10 20 30 40 0 Three points given for a market share of more than % per country, two for a market share between 1% and %, and one point for a market share between 0% and 1%. Source: Swiss Re, 2000.* Domestic IC 63.6% Market Share CEE 1999 (without CIS)* Other int. Insurance Companies 11% *Based on 1998 premiums including M&A until March 2000. *Source: local insurance associations 16
Agenda I. Introduction II. III. IV. Overview Growth opportunities Profitability V. Summary 17
IV. Profitability Focus on value and transparency Targets and hurdles Positive EVA from all operating subsidiaries Return on new investments has to exceed COC within 3- years Transparency IAS plus US GAAP Risk based (assigned) capital Normalized ROEs Management compensation Expected variable remuneration > 0% - Long-term virtual stock option plan - Bonus based on EVA targets 18
IV. Profitability Increase in business volume... 70 Non-German 60 German Business volume (EUR bn)* CAGR: 14% 0 40 CAGR: 19% 30 20 10 CAGR: 9% 0 Share Non-German" of total business 1990 1991 1992 1993 1994 199 1996 1997 1998 1999 44.0% 0.1% 48.9% 48.6% 44.8% 46.7% 1.4% 0.8% 9.1% 63.7% *) GPW including sales of investment-oriented life insurance products. 19
IV. Profitability... was topped by EPS growth EPS (EUR) DVFA basis 9.30 IAS basis (restated) CAGR (1990-1999) 20.0% 6.18 7.90 4.46 4.73 2.89 1.80 0.77 1.23 2.10 1990 1991 1992 1993 1994 199 1996 1997 1998 1999 20
IV. Profitability Strong benefit from German tax reform Reduction of corporate tax by 1%p in 2001 Abolition of tax on capital gains in 2002 Higher net earnings Increased NAV Capital reallocation Restructuring of investment portfolio Further increase of NAV Improved EVA expected 21
IV. Profitability Capital reallocation already under way REVALUATION RESERVE Deferred taxes 18 bn Shareholders share 20 bn Debt Bonds Siemens exchangeable Deutsche exchangeable Sale of Mannesmann* Sale of % Munich Re*......... CORE BUSINESS AGF Pimco Life USA First Life BVB* Frankfurter* Zwolsche Algemeene HIH Nicholas-Applegate*... *) Announced. 22
Agenda I. Introduction II. III. IV. Overview Growth opportunities Profitability V. Summary 23
V. Summary Takeaways: key investment highlights Substantial scale and strength Strong positioning in growth markets Positive impact of tax and pension reform Commitment to strong financial returns 24
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