Edgar Filing: ALLIANZ AKTIENGESELLSCHAFT

Consolidated financial statements for nine months ended Sep 30, 2005 and 2004

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rules 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

December 12, 2005

Commission file Number: 1-15154

ALLIANZ AKTIENGESELLSCHAFT

Königinstrasse 28

80802 Munich

Germany

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

This Report on Form 6-K consists of interim financial statements of Allianz Aktiengesellschaft (“Allianz AG”) for the period ended September 30, 2005 with comparative figures for September 30, 2004, including a reconciliation to U.S. GAAP, for purposes of incorporation by reference into certain registration statements filed by Allianz AG with the U.S. Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: December 12, 2005


ALLIANZ AKTIENGESELLSCHAFT

By:		/s/ Dr. Joerg Weber
		Name: Dr. Joerg Weber Title: Head of Group Management Reporting



By:		/s/ Jonathan Wismer
		Name: Jonathan A. Wismer Title: Group Management Reporting

EXHIBIT INDEX


Exhibit		Description of Exhibit
99.1		Allianz Group unaudited consolidated financial statements as of and for the nine months ended September 30, 2005 and 2004, including a reconciliation to U.S. GAAP.

Exhibit 99.1

ALLIANZ GROUP

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

as of and for the nine months ended September 30, 2005 and 2004

INDEX


Consolidated Balance Sheets		F-2
Consolidated Income Statements		F-3
Consolidated Statements of Changes in Shareholders’ Equity		F-4
Consolidated Statements of Cash Flows		F-5
Notes to the Consolidated Financial Statements
1	Basis of presentation	F-6
2	Recently adopted accounting pronouncements	F-6
3	Segment reporting	F-11
Supplementary Information to the Consolidated Balance Sheets
4	Intangible assets	F-23
5	Investments	F-23
6	Loans and advances to banks	F-24
7	Loans and advances to customers	F-24
8	Financial assets carried at fair value through income	F-24
9	Amounts ceded to reinsurers from reserves for insurance and investment contracts	F-24
10	Shareholders’ equity	F-25
11	Participation certificates and subordinated liabilities	F-25
12	Reserves for insurance and investment contracts	F-26
13	Liabilities to banks	F-27
14	Liabilities to customers	F-27
15	Certificated liabilities	F-27
16	Financial liabilities carried at fair value through income	F-28
17	Other accrued liabilities	F-28
18	Other liabilities	F-28
Supplementary Information to the Consolidated Income Statements
19	Premiums earned (net)	F-29
20	Interest and similar income	F-30
21	Income from investments in associated enterprises and joint ventures (net)	F-32
22	Other income from investments	F-32
23	Income from financial assets and liabilities carried at fair value through income (net)	F-32
24	Fee and commission income, and income from service activities	F-33
25	Other income	F-34
26	Insurance and investment contract benefits (net)	F-35
27	Interest and similar expenses	F-39
28	Other expenses from investments	F-39
29	Loan loss provisions	F-39
30	Acquisition costs and administrative expenses (net)	F-40
31	Other expenses	F-42
32	Taxes	F-42
Other Information
33	Other information	F-43
34	Subsequent events	F-44
35	Summary of significant differences between the accounting principles used in the preparation of the consolidated financial statements and accounting principles generally accepted in the United States of America	F-45

F-1

Allianz Group

Consolidated Balance Sheets

As of September 30, 2005 and as of December 31, 2004


		September 30, 2005	December 31, 2004
	Note	€ mn	€ mn
		(unaudited)
ASSETS
Intangible assets	4	15,465	15,147
Investments in associated enterprises and joint ventures		3,470	5,757
Investments	5	276,177	248,327
Loans and advances to banks	6	150,048	181,543
Loans and advances to customers	7	193,179	195,680
Financial assets carried at fair value through income	8	235,097	240,574
Cash and cash equivalents		24,093	15,628
Amounts ceded to reinsurers from reserves for insurance and investment contracts	9	23,533	22,310
Deferred tax assets		15,242	14,139
Other assets		52,894	51,213

Total assets		989,198	990,318


		September 30, 2005	December 31, 2004
	Note	€ mn	€ mn
		(unaudited)
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity	10	48,588	37,691
Participation certificates and subordinated liabilities	11	14,547	13,230
Reserves for insurance and investment contracts	12	356,489	326,380
Liabilities to banks	13	147,998	191,347
Liabilities to customers	14	159,907	157,137
Certificated liabilities	15	58,645	57,752
Financial liabilities carried at fair value through income	16	141,085	145,137
Other accrued liabilities	17	13,797	13,984
Other liabilities	18	29,154	31,271
Deferred tax liabilities		15,544	14,350
Deferred income		3,444	2,039

Total shareholders’ equity and liabilities		989,198	990,318

F-2

Allianz Group

Consolidated Income Statements (unaudited)

for the three months and nine months ended September 30, 2005 and 2004


		Three months ended September 30,				Nine months ended September 30,
		2005		2004		2005		2004
	Note	€ mn		€ mn		€ mn		€ mn
Premiums earned (net)	19	13,994		13,830		42,292		41,829
Interest and similar income	20	5,282		5,181		16,597		15,773
Income from investments in associated enterprises and joint ventures (net)	21	80		68		962		707
Other income from investments	22	1,008		783		3,487		4,137
Income from financial assets and liabilities carried at fair value through income (net)	23	617		346		1,099		1,305
Fee and commission income, and income from service activities	24	2,074		1,616		5,989		4,962
Other income	25	408		678		1,679		1,791

Total income		23,463		22,502		72,105		70,504

Insurance and investment contract benefits (net)	26	(13,375	)	(12,318	)	(40,194	)	(38,860	)
Interest and similar expenses	27	(1,387	)	(1,460	)	(4,700	)	(4,234	)
Other expenses from investments	28	(310	)	(651	)	(925	)	(2,102	)
Loan loss provisions	29	132		(51	)	88		(273	)
Acquisition costs and administrative expenses (net)	30	(6,141	)	(5,806	)	(17,598	)	(17,286	)
Amortization of goodwill		—		(297	)	—		(885	)
Other expenses	31	(724	)	(730	)	(2,707	)	(2,770	)

Total expenses		(21,805	)	(21,313	)	(66,036	)	(66,410	)

Earnings from ordinary activities before taxes		1,658		1,189		6,069		4,094
Taxes	32	(530	)	(497	)	(1,541	)	(1,240	)
Minority interests in earnings		(334	)	(224	)	(1,020	)	(884	)

Net income		794		468		3,508		1,970


		€		€		€		€
Basic earnings per share	33	2.03		1.28		9.11		5.37
Diluted earnings per share	33	2.02		1.27		9.06		5.35

F-3

Allianz Group

Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

for the nine months ended September 30, 2005 and 2004


	Paid–in capital	Revenue reserves		Foreign currency translation adjustments		Unrealized gains and losses (net)		Shareholders’ equity before minority interests		Minority interests in shareholders’ equity		Shareholders’ equity
	€ mn	€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
Balance as of December 31, 2003, as previously reported	19,347	6,914		(1,916	)	4,247		28,592		8,367		36,959
Effect of implementation of new accounting standards (Note 2)	—	(2,821	)	23		2,199		(599	)	(1,101	)	(1,700	)

Balance as of December 31, 2003, as adjusted	19,347	4,093		(1,893	)	6,446		27,993		7,266		35,259
Foreign currency translation adjustments	—	—		99		17		116		15		131
Changes in the group of consolidated companies	—	(22	)	14		5		(3	)	—		(3	)
Treasury shares	—	43		—		—		43		—		43
Unrealized gains and losses (net)	—	—		—		(704	)	(704	)	39		(665	)
Net income	—	1,970		—		—		1,970		884		2,854
Dividends paid	—	(551	)	—		—		(551	)	(432	)	(983	)
Miscellaneous	—	104		—		—		104		(433	)	(329	)

Balance as of September 30, 2004	19,347	5,637		(1,780	)	5,764		28,968		7,339		36,307

Balance as of December 31, 2004, as previously reported	19,433	8,478		(2,680	)	5,597		30,828		9,531		40,359
Effect of implementation of new accounting standards (Note 2)	—	(2,585	)	46		1,706		(833	)	(1,835	)	(2,668	)

Balance as of December 31, 2004, as adjusted	19,433	5,893		(2,634	)	7,303		29,995		7,696		37,691
Foreign currency translation adjustments	—	—		1,428		44		1,472		34		1,506
Changes in the group of consolidated companies	—	(195	)	2		(13	)	(206	)	106		(100	)
Capital paid in	2,064	—		—		—		2,064		—		2,064
Treasury shares	—	1,640		—		—		1,640		—		1,640
Unrealized gains and losses (net)	—	—		—		2,191		2,191		466		2,657
Net income	—	3,508		—		—		3,508		1,020		4,528
Dividends paid	—	(674	)	—		—		(674	)	(594	)	(1,268	)
Miscellaneous	—	(172	)	—		—		(172	)	42		(130	)

Balance as of September 30, 2005	21,497	10,000		(1,204	)	9,525		39,818		8,770		48,588

F-4

Allianz Group

Consolidated Statements of Cash Flows (unaudited)

for the nine months ended September 30, 2005 and 2004


Nine months ended September 30,	2005		2004
	€ mn		€ mn
Operating activities
Net income	3,508		1,970
Change in unearned premiums	1,712		1,469
Change in aggregate policy reserves (without aggregate policy reserves for life insurance products in accordance with SFAS 97)	12,283		10,912
Change in reserve for loss and loss adjustment expenses	2,759		2,091
Change in other insurance reserves (without change in the reserve for latent premium refunds from unrealized investment gains and losses)	2,745		1,714
Change in deferred acquisition costs	(1,716	)	(544	)
Change in funds held by others under reinsurance business assumed	(10	)	457
Change in funds held under reinsurance business ceded	(1,240	)	477
Change in accounts receivable/payable on reinsurance business	(84	)	(49	)
Change in trading securities (including trading liabilities)	8,513		(22,059	)
Change in loans and advances to banks and customers	34,657		(38,888	)
Change in liabilities to banks and customers	(40,857	)	47,255
Change in certificated liabilities	797		2,397
Change in other receivables and liabilities	(1,388	)	5,392
Change in deferred tax assets/liabilities (without change in deferred tax assets/liabilities from unrealized investment gains and losses)	(52	)	164
Non-cash investment income/expenses	(4,470	)	(3,024	)
Amortization of goodwill	—		885
Other	1,518		(1,958	)

Net cash flow provided by operating activities	18,675		8,661

Investing activities
Change in securities available-for-sale	(19,716	)	(9,648	)
Change in investments held-to-maturity	200		(607	)
Change in real estate	(53	)	(1,457	)
Change in other investments	3,124		861
Change in cash and cash equivalents from the acquisition of consolidated affiliated companies	—		(1,293	)
Other	(284	)	(1,528	)

Net cash flow used in investing activities	(16,729	)	(13,672	)

Financing activities
Change in participation certificates and subordinated liabilities	1,311		1,232
Change in investments held on account and at risk of life insurance policyholders	(8,916	)	(6,177	)
Change in aggregate policy reserves for life insurance products according to SFAS 97	10,404		4,365
Cash inflow from capital increases	2,064		—
Dividend payouts	(1,268	)	(983	)
Other from shareholders’ capital and minority interests (without change in revenue reserve from unrealized investment gains and losses)	2,862		1,830

Net cash flow provided by financing activities	6,457		267

Effect of exchange rate changes on cash and cash equivalents	62		14

Change in cash and cash equivalents	8,465		(4,730	)
Cash and cash equivalents at beginning of period	15,628		25,528

Cash and cash equivalents at end of period	24,093		20,798

The data for the Allianz Group’s consolidated statements of cash flows was prepared in accordance with International Financial Reporting Standards (IFRS).

Outflows for taxes on income amounted to € 969 mn (2004: € 885 mn).

F-5

Allianz Group

Notes to the Consolidated Financial Statements (unaudited)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

1 Basis of presentation

The consolidated financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS) as adopted under European Union (EU) regulations in accordance with clause 315a of the German Commercial Code (HGB). EU regulations require full compliance with IFRS with the exception of the IAS 39 carve-out rules. Nevertheless, the endorsement by the EU, i.e. the elimination of the carve-out-rule, is expected before year-end 2005 and thus the fair value option for liabilities is already applied. Since 2002, the designation IFRS applies to the overall framework of all standards approved by the International Accounting Standards Board. Already approved standards continue to be cited as International Accounting Standards (IAS). All standards currently applicable have been adopted in the preparation of these consolidated financial statements.

For years through 2004, IFRS did not provide specific guidance concerning the reporting of insurance and reinsurance contracts. Therefore, as envisioned in the IFRS Framework, the provisions embodied under accounting principles generally accepted in the United States of America (U.S. GAAP) have been applied. See Note 2 regarding changes to IFRS effective January 1, 2005. The financial statements are presented in Euros (€).

In certain cases, prior reporting period figures were reclassified in the consolidated balance sheet and in the consolidated income statement to make them comparable with the presentation of the current reporting period. These reclassifications had no impact on income.

2 Recently adopted accounting pronouncements

Effective January 1, 2005, the Allianz Group adopted IAS 32 revised, Financial Instruments: Disclosure and Presentation (“IAS 32 revised”) and IAS 39 revised, Financial Instruments: Recognition and Measurement (“IAS 39 revised”).

IAS 39 revised prohibits reversals of impairment losses on equity securities. According to the Allianz Group’s previous accounting policy, if the amount of an impairment previously recorded on an equity security decreases, the impairment was reversed. IAS 39 revised required retrospective application of this change; therefore, the Allianz Group’s previously issued consolidated financial statements were required to be restated to include the effects of this change. As a result of the adoption of this provision of IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Other income from investments	(15	)	(262	)
Insurance and investment contract benefits (net)	(27	)	93
Other expenses from investments	34		100
Taxes	5		18
Minority interests in earnings	(1	)	(5	)

Net impact on previously reported net income	(4	)	(56	)

In accordance with IAS 32 revised, a financial instrument qualifies as a financial liability of the issuer if it gives the holder the right to put the instrument back to the issuer for cash or another financial asset (a “puttable instrument”). The classification as a financial liability is independent of considerations such as when the right is exercisable, how the amount payable or receivable upon exercise of the right is determined, and whether the puttable instrument has a fixed maturity. As a result of the adoption of IAS 32 revised, the Allianz Group was required to reclassify the minority interests in shareholders’ equity of certain consolidated investment funds to liabilities. These liabilities are

F-6

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

required to be recorded at redemption amount with changes recorded in the consolidated income statement.

Further, IAS 39 revised created a new category, designated at fair value through income, for financial assets. Financial assets designated at fair value through income are recognized at fair value with changes recognized in net income. As a result of being required to record the liabilities related to the previously mentioned consolidated investment funds at the redemption amount due to the adoption of IAS 32 revised, the Allianz Group reclassified the related investments from securities available-for-sale to financial assets designated at fair value through income. IAS 39 revised required retrospective application of these changes.

As a result of the adoption of these provisions of IAS 32 revised and IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Interest and similar income	(9	)	(38	)
Other income from investments	(54	)	(130	)
Income from financial assets and liabilities carried at fair value through income (net)	38		125
Insurance and investment contract benefits (net)	10		(33	)
Other expenses from investments	27		82
Taxes	(4	)	(2	)
Minority interests in earnings	(7	)	2

Net impact on previously reported net income	1		6

In addition, as a result of the adoption of IAS 39 revised, the Allianz Group reclassified certain securities available-for-sale to loans and advances to banks and loans and advances to customers. As a result of the adoption of this provision of IAS 39 revised, the Allianz Group recorded the following effects in its consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Other income from investments	11		8
Other income	(11	)	(8	)
Other expenses from investments	33		45
Other expenses	(33	)	(45	)

Net impact on previously reported net income	—		—

Effective January 1, 2005, the Allianz Group adopted IFRS 2, Share Based Payments (“IFRS 2”). In accordance with IFRS 2, share based compensation plans are required to be classified as equity settled or cash settled plans. Equity settled plans are measured at fair value on the grant date with changes recognized in the income statement and shareholders’ equity over the vesting period. Cash settled plans are measured at fair value at each reporting date and recognized as liabilities. Changes in the fair value of cash settled plans are recognized as expense in the income statement.

A company is considered to have a cash settled plan if the shares issued are redeemable, either mandatorily or at the counter-party’s option. In this respect, IFRS 2 has incorporated the “puttable instrument” concept of IAS 32 revised, which requires that such instruments be classified as liabilities rather than equity instruments. As a result of the adoption of IFRS 2, the PIMCO LLC Class B Unit Purchase Plan (“Class B Plan”) is considered a cash settled plan as the equity instruments issued are puttable at the counter-party’s option. According to

F-7

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

the Allianz Group’s previous accounting policy, the Class B Plan was considered an equity settled plan.

Further, IFRS 2 requires that equity settled plans include a best estimate of the number of equity instruments that are expected to vest in determining the amount of expense to be recognized. The Allianz Group’s previous accounting policy required that forfeitures of equity instruments be recognized when incurred.

As a result of the adoption of IFRS 2, the Allianz Group recorded the following effects in its consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Acquisition and administrative expenses (net)	(60	)	(206	)
Taxes	12		50
Minority interests in earnings	29		84

Net impact on previously reported net income	(19	)	(72	)

Effective January 1, 2005, the Allianz Group adopted IFRS 3, Business Combinations (“IFRS 3”). In accordance with IFRS 3, a company must cease the amortization of goodwill and intangible assets with an indefinite life and rather test for impairment on an annual basis in addition to whenever there is an indication that the carrying value is not recoverable. As a result of the adoption on IFRS 3 on January 1, 2005, the Allianz Group ceased amortization of goodwill and brand names.

Effective January 1, 2005, the Allianz Group adopted IFRS 4, Insurance Contracts (“IFRS 4”). IFRS 4 represents the completion of phase I and is a transitional standard until the IASB has more fully addressed the recognition and measurement of insurance contracts. IFRS 4 requires that all contracts issued by insurance companies be classified as either insurance contracts or investment contracts. Contracts with significant insurance risk are considered insurance contracts. IFRS 4 permits a company to continue with it’s previously adopted accounting policies with regard to recognition and measurement of insurance contracts. Only in case of presentation of more reliable figures a change in accounting policy shall be carried out. As a result, the Allianz Group principally continues to apply the provisions of US GAAP for the recognition and measurement of insurance contracts. Contracts issued by insurance companies without significant insurance risk are considered investment contracts. Investment contracts are accounted for in accordance with IAS 39 revised. As a result of the adoption of IFRS 4, certain contracts were reclassified as investment contracts. This change did not have a material effect on the Allianz Group’s shareholders’ equity as of December 31, 2003.

Further, the Allianz Group reclassified the assets related to unit-linked insurance and investment contracts to financial assets designated at fair value through income and the related liabilities to financial liabilities designated at fair value through income as allowed under the EU insurance directives.

As a result of this reclassification, the Allianz Group recorded the following effects in its consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Income from financial assets and liabilities carried at fair value through income (net)	12		(105	)
Insurance and investment contract benefits (net)	(12	)	105

Net impact on previously reported net income	—		—

F-8

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Impairments of equity securities

IAS 39 revised requires a change to the Allianz Group’s impairment criteria for available-for-sale equity securities. An equity security is considered to be impaired if there is objective evidence that the cost of the equity security may not be recovered. IAS 39 revised requires that a significant or prolonged decline in the fair value of an equity security below cost is considered to be objective evidence of impairment. The Allianz Group established, beside the existing qualitative impairment criteria, new quantitative impairment criteria for equity securities to define significant or prolonged decline. To satisfy the significant criteria, the Allianz Group has established a policy that an equity security is considered impaired if the fair value is below the weighted-average cost by more than 20%. To satisfy the prolonged criteria, the Allianz Group established a policy that an equity security is considered impaired if the fair value is below the weighted-average cost for greater than nine months. Each of these policies is applied independently at the subsidiary level.

In addition, IAS 39 revised does not allow an adjusted cost basis to be established upon impairment of an equity security. Rather, each reporting period, if the fair value is less than the original cost basis of the equity security, the security is analyzed for impairment based upon the Allianz Group’s impairment criteria. At each reporting date, for equity securities that are determined to be impaired based upon the Allianz Group’s impairment criteria, an impairment is recognized for the difference between the fair value and the original cost basis, less any previously recognized impairments. According to the Allianz Group’s previously applied accounting policy, upon the recognition of an impairment of an equity security, an adjusted cost basis was established. Therefore, at each reporting period, if the fair value was less than the adjusted cost basis of the equity security, the security was analyzed for impairment based upon the Allianz Group’s impairment criteria.

As a result, the Allianz Group recorded the following effects in the consolidated income statements:


(Debit) Credit	Three months ended September 30, 2004		Nine months ended September 30, 2004
	€ mn		€ mn
Other income from investments	111		742
Insurance and investment contract benefits (net)	17		(138	)
Other expenses from investments	(157	)	(199	)
Taxes	(15	)	(70	)
Minority interests in earnings	(3	)	(68	)

Net impact on previously reported net income	(47	)	267

F-9

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Fair value option for financial liabilities

IAS 39 revised created a new category, designated at fair value through income, for financial assets and liabilities. Both, financial assets and liabilities designated at fair value through income are recognised at fair value with changes recognised in net income. The Allianz Group already implemented this new rule for financial assets as of January 1, 2005. The implementation of this regulation with regard to financial liabilities was not allowed because the EU did not endorse it based on the revised IAS 39. In June 2005 the IASB adjusted the fair value regulation and considered the concerns raised by the EU. It is expected that the EU will endorse the new rules in the fourth quarter 2005. Thus, the Allianz Group already applied the fair value option for financial liabilities retrospectively in the third quarter due to the forthcoming EU endorsement.

This change did not have a material effect on net income for the three and nine months ended September 30, 2004.

Discretionary participating features

IFRS 4 contains specific guidance for contracts with discretionary participation features (DPF). These include other contracts that have additional payments where the timing or amount is at the discretion of the company. Based on this definition the Allianz Group recognised retrospectively a deferred premium refund for specific contracts for the Swiss business.

This change did not have a material effect on net income for the three and nine months ended September 30, 2004.

F-10

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

3 Segment reporting

Business Segment Information—Consolidated Balance Sheets

As of September 30, 2005 and as of December 31, 2004


	Property-Casualty		Life/Health
	September 30, 2005	December 31, 2004	September 30, 2005	December 31, 2004
	€ mn	€ mn	€ mn	€ mn
ASSETS
Intangible assets	2,230	2,185	4,012	4,075
Investments in associated enterprises and joint ventures	48,231	48,359	4,038	5,532
Investments	86,612	81,245	173,886	154,920
Loans and advances to banks	13,632	7,424	56,984	56,699
Loans and advances to customers	2,006	6,224	27,658	28,808
Financial assets carried at fair value through income	3,285	1,137	61,708	46,668
Cash and cash equivalents	2,336	1,665	1,574	968
Amounts ceded to reinsurers from reserves for insurance and investment contracts	14,561	12,337	10,827	16,382
Deferred tax assets	7,597	6,816	3,849	3,451
Other assets	21,579	20,045	23,501	20,362

Total segment assets	202,069	187,437	368,037	337,865


	Property-Casualty		Life/Health
	September 30, 2005	December 31, 2004	September 30, 2005	December 31, 2004
	€ mn	€ mn	€ mn	€ mn
SHAREHOLDERS’ EQUITY AND LIABILITIES
Participation certificates and subordinated liabilities	7,307	5,497	140	141
Reserves for insurance and investment contracts	86,931	83,095	271,574	249,854
Liabilities to banks	2,605	1,358	1,082	1,241
Liabilities to customers	5,080	5,336	74	165
Certificated liabilities	9,668	11,405	4	68
Financial liabilities carried at fair value through income	1,252	530	56,679	44,776
Other accrued liabilities	6,032	5,960	856	1,016
Other liabilities	13,652	12,352	16,371	21,280
Deferred tax liabilities	8,310	7,894	5,172	4,539
Deferred income	124	161	124	139

Total segment liabilities	140,961	133,588	352,076	323,219

*)	Shareholders’ equity and minority interests in shareholders’ equity.

F-11

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004


Banking		Asset Management		Consolidation Adjustments				Group
September 30, 2005	December 31, 2004	September 30, 2005	December 31, 2004	September 30, 2005		December 31, 2004		September 30, 2005	December 31, 2004
€ mn	€ mn	€ mn	€ mn	€ mn		€ mn		€ mn	€ mn
2,541	2,526	6,682	6,362	—		(1	)	15,465	15,147
2,764	3,037	3	3	(51,566	)	(51,174	)	3,470	5,757
16,672	17,736	800	529	(1,793	)	(6,103	)	276,177	248,327
81,281	119,025	274	144	(2,123	)	(1,749	)	150,048	181,543
171,348	168,346	85	29	(7,918	)	(7,727	)	193,179	195,680
169,914	192,746	307	131	(117	)	(108	)	235,097	240,574
20,054	13,097	588	431	(459	)	(533	)	24,093	15,628
—	—	—	—	(1,855	)	(6,409	)	23,533	22,310
3,588	3,679	202	187	6		6		15,242	14,139
10,131	15,341	3,407	2,942	(5,724	)	(7,477	)	52,894	51,213

478,293	535,533	12,348	10,758	(71,549	)	(81,275	)	989,198	990,318


Banking		Asset Management		Consolidation Adjustments				Group
September 30, 2005	December 31, 2004	September 30, 2005	December 31, 2004	September 30, 2005		December 31, 2004		September 30, 2005	December 31, 2004
€ mn	€ mn	€ mn	€ mn	€ mn		€ mn		€ mn	€ mn
7,308	7,815	—	—	(208	)	(223	)	14,547	13,230
4	4	—	—	(2,020	)	(6,573	)	356,489	326,380
144,644	189,187	41	7	(374	)	(446	)	147,998	191,347
161,718	158,127	500	294	(7,465	)	(6,785	)	159,907	157,137
49,610	47,041	4	4	(641	)	(766	)	58,645	57,752
83,277	99,934	—	—	(123	)	(103	)	141,085	145,137
5,115	5,783	1,794	1,225	—		—		13,797	13,984
4,482	8,859	1,290	709	(6,641	)	(11,929	)	29,154	31,271
1,989	1,860	73	57	—		—		15,544	14,350
3,170	1,737	26	2	—		—		3,444	2,039

461,317	520,347	3,728	2,298	(17,472	)	(26,825	)	940,610	952,627

*Shareholders’ equity)**								48,588	37,691

Total shareholders’ equity and liabilities								989,198	990,318

F-12

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Business Segment Information—Consolidated Income Statements

for the three months ended September 30, 2005 and 2004


	Property-Casualty				Life/Health
Three months ended September 30,	2005		2004		2005		2004
	€ mn		€ mn		€ mn		€ mn
Premiums earned (net)	9,788		9,840		4,206		3,990
Interest and similar income	906		932		2,846		2,693
Income from associated enterprises and joint ventures (net)	152		72		54		82
Other income from investments	329		207		639		443
Income from financial assets and liabilities carried at fair value through income (net)	(65	)	3		291		103
Fee and commission income, and income from service activities	451		243		53		52
Other income	176		281		211		387

Total income	11,737		11,578		8,300		7,750

Insurance and investment contract benefits (net)	(7,247	)	(6,853	)	(6,128	)	(5,465	)
Interest and similar expenses	(243	)	(369	)	(102	)	(212	)
Other expenses from investments	(74	)	(319	)	(187	)	(275	)
Loan loss provisions	(3	)	2		6		(1	)
Acquisition costs and administrative expenses (net)	(2,799	)	(2,654	)	(1,077	)	(1,199	)
Amortization of goodwill	—		(96	)	—		(40	)
Other expenses	(505	)	(337	)	(149	)	(176	)

Total expenses	(10,871	)	(10,626	)	(7,637	)	(7,368	)

Earnings from ordinary activities before taxes	866		952		663		382
Taxes	(277	)	(452	)	(147	)	(186	)
Minority interests in earnings	(181	)	(132	)	(140	)	(71	)

Net income	408		368		376		125

F-13

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004


Banking				Asset Management				Consolidation Adjustments				Group
2005		2004		2005		2004		2005		2004		2005		2004
€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
—		—		—		—		—		—		13,994		13,830
1,643		1,751		23		16		(136	)	(211	)	5,282		5,181
54		29		—		—		(180	)	(115	)	80		68
44		130		1		—		(5	)	3		1,008		783
375		244		16		(1	)	—		(3	)	617		346
772		701		968		778		(170	)	(158	)	2,074		1,616
35		42		5		6		(19	)	(38	)	408		678

2,923		2,897		1,013		799		(510	)	(522	)	23,463		22,502

—		—		—		—		—		—		(13,375	)	(12,318	)
(1,165	)	(1,092	)	(11	)	(3	)	134		216		(1,387	)	(1,460	)
(49	)	(56	)	—		(1	)	—		—		(310	)	(651	)
129		(54	)	—		—		—		2		132		(51	)
(1,558	)	(1,440	)	(891	)	(657	)	184		144		(6,141	)	(5,806	)
—		(65	)	—		(96	)	—		—		—		(297	)
(57	)	(177	)	(25	)	(95	)	12		55		(724	)	(730	)

(2,700	)	(2,884	)	(927	)	(852	)	330		417		(21,805	)	(21,313	)

223		13		86		(53	)	(180	)	(105	)	1,658		1,189
(74	)	134		(34	)	9		2		(2	)	(530	)	(497	)
(26	)	(22	)	(12	)	(13	)	25		14		(334	)	(224	)

123		125		40		(57	)	(153	)	(93	)	794		468

F-14

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Business Segment Information—Consolidated Income Statements

for the nine months ended September 30, 2005 and 2004


	Property-Casualty				Life/Health
Nine months ended September 30,	2005		2004		2005		2004
	€ mn		€ mn		€ mn		€ mn
Premiums earned (net)	28,522		28,827		13,770		13,002
Interest and similar income	3,067		3,076		8,786		8,383
Income from associated enterprises and joint ventures (net)	1,305		1,560		724		283
Other income from investments	1,143		1,647		2,082		1,931
Income from financial assets and liabilities carried at fair value through income (net)	(166	)	(22	)	291		168
Fee and commission income, and income from service activities	1,266		672		136		154
Other income	817		650		669		971

Total income	35,954		36,410		26,458		24,892

Insurance and investment contract benefits (net)	(19,884	)	(20,575	)	(20,285	)	(18,285	)
Interest and similar expenses	(1,125	)	(1,121	)	(340	)	(542	)
Other expenses from investments	(270	)	(912	)	(498	)	(672	)
Loan loss provisions	(3	)	(1	)	3		(2	)
Acquisition costs and administrative expenses (net)	(8,305	)	(7,928	)	(3,055	)	(3,331	)
Amortization of goodwill	—		(287	)	—		(119	)
Other expenses	(1,985	)	(1,412	)	(499	)	(630	)

Total expenses	(31,572	)	(32,236	)	(24,674	)	(23,581	)

Earnings from ordinary activities before taxes	4,382		4,174		1,784		1,311
Taxes	(909	)	(1,069	)	(282	)	(442	)
Minority interests in earnings	(724	)	(725	)	(394	)	(283	)

Net income	2,749		2,380		1,108		586

F-15

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004


Banking				Asset Management				Consolidation Adjustments				Group
2005		2004		2005		2004		2005		2004		2005		2004
€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
—		—		—		—		—		—		42,292		41,829
5,100		4,878		67		47		(423	)	(611	)	16,597		15,773
238		116		—		—		(1,305	)	(1,252	)	962		707
596		515		6		7		(340	)	37		3,487		4,137
953		1,160		21		2		—		(3	)	1,099		1,305
2,412		2,310		2,661		2,283		(486	)	(457	)	5,989		4,962
249		195		22		23		(78	)	(48	)	1,679		1,791

9,548		9,174		2,777		2,362		(2,632	)	(2,334	)	72,105		70,504

—		—		—		—		(25	)	—		(40,194	)	(38,860	)
(3,615	)	(3,162	)	(37	)	(10	)	417		601		(4,700	)	(4,234	)
(137	)	(364	)	—		(2	)	(20	)	(152	)	(925	)	(2,102	)
88		(271	)	—		—		—		1		88		(273	)
(4,336	)	(4,446	)	(2,427	)	(2,010	)	525		429		(17,598	)	(17,286	)
—		(194	)	—		(285	)	—		—		—		(885	)
(207	)	(513	)	(84	)	(319	)	68		104		(2,707	)	(2,770	)

(8,207	)	(8,950	)	(2,548	)	(2,626	)	965		983		(66,036	)	(66,410	)

1,341		224		229		(264	)	(1,667	)	(1,351	)	6,069		4,094
(308	)	225		(51	)	42		9		4		(1,541	)	(1,240	)
(77	)	(104	)	(34	)	(40	)	209		268		(1,020	)	(884	)

956		345		144		(262	)	(1,449	)	(1,079	)	3,508		1,970

F-16

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

The following table sets forth the total revenues, operating profit and IFRS net income for each of our business segments for the three months and nine months ended September 30, 2005 and 2004, as well as IFRS consolidated net income of the Allianz Group.


	Property-Casualty				Life/Health
Three months ended September 30,	2005		2004		2005		2004
	€ mn		€ mn		€ mn		€ mn
Total revenues^*)	10,472		10,432		11,116		10,841
Operating profit	696		1,138		478		378

Earnings from ordinary activities before taxes	866		952		663		382
Taxes	(277	)	(452	)	(147	)	(186	)
Minority interests in earnings	(181	)	(132	)	(140	)	(71	)

Net income (loss)	408		368		376		125

Nine months ended September 30,
Total revenues^*)	34,439		34,646		34,942		31,946
Operating profit	3,090		2,898		1,283		1,048

Earnings from ordinary activities before taxes	4,382		4,174		1,784		1,311
Taxes	(909	)	(1,069	)	(282	)	(442	)
Minority interests in earnings	(724	)	(725	)	(394	)	(283	)

Net income (loss)	2,749		2,380		1,108		586

^*)	Total revenues comprise property-casualty segment’s gross premiums written, life/health segment’s statutory premiums, banking segment’s operating revenues, and asset management segment’s operating revenues.

F-17

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004


Banking				Asset Management				Consolidation Adjustments				Total Group
2005		2004		2005		2004		2005		2004		2005		2004
€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
1,542		1,527		708		564		(63	)	(228	)	23,775		23,136
250		136		299		217		—		—		1,723		1,869

223		13		86		(53	)	(180	)	(105	)	1,658		1,189
(74	)	134		(34	)	9		2		(2	)	(530	)	(497	)
(26	)	(22	)	(12	)	(13	)	25		14		(334	)	(224	)

123		125		40		(57	)	(153	)	(93	)	794		468


4,611		4,948		1,933		1,664		(192	)	(612	)	75,733		72,592
759		567		785		578		—		—		5,917		5,091

1,341		224		229		(264	)	(1,667	)	(1,351	)	6,069		4,094
(308	)	225		(51	)	42		9		4		(1,541	)	(1,240	)
(77	)	(104	)	(34	)	(40	)	209		268		(1,020	)	(884	)

956		345		144		(262	)	(1,449	)	(1,079	)	3,508		1,970

F-18

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Property-Casualty Insurance Segment


	Three months ended September 30,				Nine months ended September 30,
	2005		2004		2005		2004
	€ mn		€ mn		€ mn		€ mn
Gross premiums written	10,472		10,432		34,439		34,646
Premiums earned (net)¹⁾	9,788		9,840		28,522		28,827
Current income from investments (net)²⁾	776		721		2,622		2,387
Insurance benefits (net)³⁾	(7,225	)	(6,803	)	(19,845	)	(20,249	)
Net acquisition costs and administrative expenses⁴⁾	(2,648	)	(2,540	)	(7,954	)	(7,619	)
Other operating income/(expenses)(net)	5		(80	)	(255	)	(448	)

Operating profit	696		1,138		3,090		2,898

Net capital gains and impairments on investments⁵⁾	296		(112	)	1,040		982
Net trading income/(expenses)⁶⁾	(108	)	(1	)	(269	)	(36	)
Intra-group dividends and profit transfer	143		96		1,207		1,145
Interest expense on external debt	(160	)	(199	)	(630	)	(654	)
Amortization of goodwill⁷⁾	—		(96	)	—		(287	)
Restructuring charges	(1	)	—		(56	)	—
Other non-operating income/(expenses) (net)	—		126		—		126

Earnings from ordinary activities before taxes	866		952		4,382		4,174

Taxes	(277	)	(452	)	(909	)	(1,069	)
Minority interests in earnings	(181	)	(132	)	(724	)	(725	)

Net income	408		368		2,749		2,380

Loss ratio⁸⁾ in %	72.9		66.4		68.2		68.2
Expense ratio⁹⁾ in %	24.1		24.5		24.8		25.0

Combined ratio in %	97.0		90.9		93.0		93.2

¹⁾	Net of earned premiums ceded to reinsurers of € 1,614 million and € 4,071 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 1,518 million and 9M 2004: € 4,079 million).

²⁾

Net of investment management expenses of € 88 million and € 257 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 79 million and 9M 2004: € 244 million), and interest expenses of € 21 million and € 136 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 99 million and 9M 2004: € 341 million).

³⁾

Comprises net claims incurred of € 7,130 million and € 19,456 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 6,529 million and 9M 2004: € 19,655 million), net expenses from changes in other net underwriting provisions of € 44 million and € 130 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 212 million and 9M 2004: € 398 million), and net expenses for premium refunds of € 51 million and € 259 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 62 million and 9M 2004: € 196 million). Net expenses for premium refunds were adjusted for income of € 6 million and € 24 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € – million and 9M 2004: € 220 million), related to policyholders’ participation of net capital gains and impairments on investments, as well as net trading income/(expenses), that were excluded from the determination of operating profit.

⁴⁾

Comprises net acquisition costs of € 1,426 million and € 4,277 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 1,435 million and 9M 2004: € 4,314 million), administrative expenses of € 937 million and € 2,799 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 977 million and 9M 2004: € 2,885 million), and expenses for service agreements of € 285 million and € 878 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 128 million and 9M 2004: € 420 million). Net acquisition costs and administrative expenses do not include expenses for the management of investments and, accordingly, do not reconcile to the acquisition costs and administrative expenses as presented in the consolidated financial statements.

⁵⁾

Comprises net realized gains on investments of € 280 million and € 1,068 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 88 million and 9M 2004: € 1,517 million), and net impairments on investments of € 16 million and € 28 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 200 million and 9M 2004: € 535 million). These amounts are net of policyholders’ participation.

⁶⁾	Net trading income/(expenses) are net of policyholders’ participation.

⁷⁾	Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized.

⁸⁾	Represents ratio of net claims incurred to net premiums earned.

⁹⁾	Represents ratio of net acquisition costs and administrative expenses as presented in the consolidated financial statements to net premiums earned.

F-19

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Life/Health Insurance Segment


	Three months ended September 30,				Nine months ended September 30,
	2005		2004		2005		2004
	€ mn		€ mn		€ mn		€ mn
Statutory premiums¹⁾	11,116		10,841		34,942		31,946
Gross premiums written	4,508		4,465		14,643		14,579
Premiums earned (net)²⁾	4,206		3,990		13,770		13,002
Current income from investments (net)³⁾	2,764		2,597		8,547		8,156
Insurance benefits (net)⁴⁾	(5,697	)	(5,254	)	(18,005	)	(17,136	)
Net acquisition costs and administrative expenses⁵⁾	(955	)	(1,083	)	(2,705	)	(2,989	)
Net trading income/(expenses)	163		69		(185	)	62
Other operating income/(expenses) (net)	(3	)	59		(139	)	(47	)

Operating profit	478		378		1,283		1,048

Net capital gains and impairments on investments⁶⁾	183		42		431		315
Intra-group dividends and profit transfer	20		2		88		67
Amortization of goodwill⁷⁾	—		(40	)	—		(119	)
Restructuring charges	(18	)	—		(18	)	—

Earnings from ordinary activities before taxes	663		382		1,784		1,311

Taxes	(147	)	(186	)	(282	)	(442	)
Minority interests in earnings	(140	)	(71	)	(394	)	(283	)

Net income	376		125		1,108		586

Statutory expense ratio⁸⁾ in %	8.5		10.1		7.7		9.6

¹⁾

Under the Allianz Group’s accounting policies for life insurance contracts, for which we have adopted U.S. GAAP accounting standards, gross written premiums include only the cost- and risk-related components of premiums generated from unit-linked and other investment-oriented products, but do not include the full amount of statutory premiums written on these products. Statutory premiums are gross premiums written from sales of life insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s home jurisdiction.

²⁾	Net of earned premiums ceded to reinsurers of € 259 million and € 780 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 463 million and 9M 2004: € 1,519 million).

³⁾

Net of investment management expenses of € 117 million and € 332 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 102 million and 9M 2004: € 309 million), and interest expenses of € 2 million and € (-) million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 24 million and 9M 2004: € (35) million).

⁴⁾

Net insurance benefits were adjusted for income of € 428 million and € 2,279 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 212 million and 9M 2004: € 1,152 million), related to policyholders’ participation of net capital gains and impairments on investments that were excluded from the determination of operating profit.

⁵⁾

Comprises net acquisition costs of € 598 million and € 1,617 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 712 million and 9M 2004: € 1,959 million), administrative expenses of € 323 million and € 993 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 342 million and 9M 2004: € 941 million), and expenses for service agreements of € 34 million and € 95 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 29 million and 9M 2004: € 89 million). Net acquisition costs and administrative expenses do not include expenses for the management of investments and, accordingly, do not reconcile to the acquisition costs and administrative expenses as presented in the consolidated financial statements.

⁶⁾

Comprises net realized gains on investments of € 191 million and € 510 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 139 million and 9M 2004: € 423 million), and net impairments on investments of € 8 million and € 79 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 97 million and 9M 2004: € 108 million). These amounts are net of policyholders’ participation.

⁷⁾	Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized.

⁸⁾	Represents ratio of net acquisition costs and administrative expenses as presented in the consolidated financial statements to net premiums earned (statutory).

F-20

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Banking Segment


	Three months ended September 30,								Nine months ended September 30,
	2005				2004				2005				2004
	Banking Segment		Dresdner Bank		Banking Segment		Dresdner Bank		Banking Segment		Dresdner Bank		Banking Segment		Dresdner Bank
	€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
Net interest income	532		517		685		655		1,641		1,588		1,815		1,753
Net fee and commission income	635		599		598		569		2,017		1,909		1,974		1,858
Net trading income	375		358		244		250		953		916		1,159		1,165

Operating revenues	1,542		1,474		1,527		1,474		4,611		4,413		4,948		4,776
Administrative expenses	(1,421	)	(1,373	)	(1,337	)	(1,293	)	(3,940	)	(3,786	)	(4,110	)	(3,969	)
Net loan loss provisions	129		130		(54	)	(54	)	88		84		(271	)	(271	)

Operating profit	250		231		136		127		759		711		567		536
Net capital gains and impairments on investments	(5	)¹⁾	(4	)	78	¹⁾	77		541	¹⁾	542		170	¹⁾	161
Restructuring charges	(5	)	(5	)	(11	)	(11	)	(10	)	(10	)	(127	)	(127	)
Other non-operating income/(expenses)(net)	(17	)	(25	)	(125	)	(119	)	51		43		(192	)	(182	)
Amortization of goodwill²⁾	—		—		(65	)	(65	)	—		—		(194	)	(194	)

Earnings from ordinary activities before taxes	223		197		13		9		1,341		1,286		224		194
Taxes	(74	)	(65	)	134		129		(308	)	(294	)	225		235
Minority interests in earnings	(26	)	(19	)	(22	)	(18	)	(77	)	(60	)	(104	)	(56	)

Net income	123		113		125		120		956		932		345		373

Cost-income ratio³⁾ in %	92.2		93.1		87.6		87.7		85.4		85.8		83.1		83.1

¹⁾

Comprises primarily net realized gains on investments of € 29 million and € 649 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 145 million and 9M 2004: € 511 million), and net impairments on investments of € 34 million and € 112 million for the three and nine months ended September 30, 2005, respectively (3Q 2004: € 71 million and 9M 2004: € 371 million). For the three and nine months ended September 30, 2005, net impairments on investments includes € 9 million and € 28 million, respectively, (3Q 2004: € 12 million and 9M 2004: € 23 million) of scheduled depreciation of real estate used by third parties.

²⁾	Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized.

³⁾	Represents ratio of administrative expenses to operating revenues.

F-21

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Asset Management Segment


	Three months ended September 30,								Nine months ended September 30,
	2005				2004				2005				2004
	Asset Management Segment		Allianz Global Investors		Asset Management Segment		Allianz Global Investors		Asset Management Segment		Allianz Global Investors		Asset Management Segment		Allianz Global Investors
	€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
Operating revenues	708		698		564		558		1,933		1,906		1,664		1,658
Operating expenses	(409	)	(403	)	(347	)	(346	)	(1,148	)	(1,129	)	(1,086	)	(1,085	)

Operating profit	299		295		217		212		785		777		578		573
Acquisition-related expenses	(213	)	(213	)	(174	)	(174	)	(556	)	(556	)	(557	)	(557	)
thereof:
Deferred purchases of interests in PIMCO¹⁾	(213	)	(213	)	(111	)	(111	)	(519	)	(519	)	(364	)	(364	)
Retention payments for management and employees of PIMCO and Nicholas Applegate	—		—		(31	)	(31	)	(12	)	(12	)	(98	)	(98	)
Amortization charges relating to capitalized bonuses for PIMCO management	—		—		(32	)	(32	)	(25	)	(25	)	(95	)	(95	)
Amortization of goodwill²⁾	—		—		(96	)	(96	)	—		—		(285	)	(285	)

Earnings from ordinary activities before taxes	86		82		(53	)	(58	)	229		221		(264	)	(269	)
Taxes	(34	)	(32	)	9		9		(51	)	(49	)	42		42
Minority interests in earnings	(12	)	(12	)	(13	)	(13	)	(34	)	(32	)	(40	)	(40	)

Net income (loss)	40		38		(57	)	(62	)	144		140		(262	)	(267	)

Cost-income ratio³⁾ in %	57.8		57.7		61.5		62.0		59.4		59.2		65.3		65.4

¹⁾	Effective January 1, 2005, and applied retrospectively, under IFRS, the PIMCO LLC Class B Unit Purchase Plan (“Class B Plan”) is considered a cash settled plan, resulting in changes in the fair value of the shares issued to be recognized as expense.

²⁾	Effective January 1, 2005, under IFRS, and on a prospective basis, goodwill is no longer amortized.

³⁾	Represents ratio of operating expenses to operating revenues.

F-22

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Supplementary Information to the Consolidated Balance Sheets

4 Intangible assets


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Goodwill	12,097	11,677
Present value of future profits	1,398	1,522
Software	1,030	972
Brand names	740	740
Loyalty bonuses	—	33
Other	200	203

Total	15,465	15,147

Changes in goodwill for the nine months ended September 30, 2005, were as follows:


	€ mn
Cost as of December 31, 2004	11,901
Accumulated impairments as of December 31, 2004	(224	)

Carrying value as of December 31, 2004	11,677

Additions	57
Disposals	(45	)
Foreign currency translation adjustments	408

Carrying value as of September 30, 2005	12,097

Accumulated impairments as of September 30, 2005	224
Cost as of September 30, 2005	12,321

Additions include goodwill from

•

increasing the interest in GamePlan Financial Marketing LLC, Woodstock, by 60.0% to 100.0%,

•

the acquisition of 100.0% interest in Bettercare Group Limited, Kingston upon Thames.

Disposals include goodwill from

•

reducing the interest in Cadence Capital Management Inc., Delaware, by 100.0% to 0.0%.

5 Investments


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Securities held-to-maturity	4,986	5,179
Securities available-for-sale	258,797	230,919
Real estate used by third parties	10,781	10,628
Funds held by others under reinsurance contracts assumed	1,613	1,601

Total	276,177	248,327

Securities available-for-sale


	Amortized cost		Unrealized gains		Unrealized losses				Fair values
	September 30, 2005	December 31, 2004	September 30, 2005	December 31, 2004	September 30, 2005		December 31, 2004		September 30, 2005	December 31, 2004
	€ mn	€ mn	€ mn	€ mn	€ mn		€ mn		€ mn	€ mn
Equity securities	35,671	32,106	17,293	12,488	(212	)	(394	)	52,752	44,200
Government bonds	115,136	106,155	7,470	5,375	(346	)	(235	)	122,260	111,295
Corporate bonds	77,986	69,083	4,344	3,629	(197	)	(95	)	82,133	72,617
Other	1,483	2,721	170	90	(1	)	(4	)	1,652	2,807

Total	230,276	210,065	29,277	21,582	(756	)	(728	)	258,797	230,919

F-23

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004


Nine months ended September 30,	Gross realized gains		Gross realized losses
Nine months ended September 30,	2005	2004	2005		2004
	€ mn	€ mn	€ mn		€ mn
Equity securities	2,383	2,997	(257	)	(408	)
Debt securities	789	849	(226	)	(241	)
Other	24	26	(8	)	(43	)

Total	3,196	3,872	(491	)	(692	)

6 Loans and advances to banks


	September 30, 2005		December 31, 2004
	€ mn		€ mn
Loans	67,429		59,543
Reverse repurchase agreements and collateral paid for securities borrowing transactions	66,334		103,406
Short-term investments and certificates of deposit	9,248		7,729
Other	7,282		11,096

Loans and advances to banks	150,293		181,774
Loan loss allowance	(245	)	(231	)

Total	150,048		181,543

7 Loans and advances to customers


	September 30, 2005		December 31, 2004
	€ mn		€ mn
Loans	116,514		119,832
Reverse repurchase agreements and collateral paid for securities borrowing transactions	61,425		70,459
Other	16,869		9,293

Loans and advances to customers	194,808		199,584
Loan loss allowance	(1,629	)	(3,904	)

Total	193,179		195,680

8 Financial assets carried at fair value through income


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Financial assets held for trading	170,569	194,439
Financial assets for unit linked contracts	51,663	41,409
Financial assets designated at fair value through income	12,865	4,726

Total	235,097	240,574

Financial assets held for trading comprised the following:


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Fixed-income securities	124,382	153,858
Equities	25,725	20,033
Derivative financial instruments	20,462	20,548

Total	170,569	194,439

9 Amounts ceded to reinsurers from reserves for insurance and investment contracts


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Unearned premiums	1,607	1,238
Aggregate policy reserves	9,134	10,276
Reserves for loss and loss adjustment expenses	12,688	10,684
Other insurance reserves	104	112

Total	23,533	22,310

F-24

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

10 Shareholders’ equity


	September 30, 2005		December 31, 2004
	€ mn		€ mn
Issued capital	1,037		988
Capital reserve	20,460		18,445
Revenue reserves	10,063		10,498
Treasury shares	(63	)	(4,605	)
Foreign currency translation adjustments	(1,204	)	(2,634	)
Unrealized gains and losses (net)	9,525		7,303

Shareholders’ equity before minority interests	39,818		29,995
Minority interests in shareholders’ equity	8,770		7,696

Total	48,588		37,691

On February 18, 2005, the Allianz Group issued a subordinated bond with € 11.2 mn detachable warrants, which allow the holder to purchase a share of Allianz AG. The warrants are exercisable at any time during their 3 year term and have an exercise price of € 92 per share. The warrants were recorded in capital reserve at the premium received of € 174 mn on their issuance date. As a result of the exercise of 9 mn warrants during the third quarter 2005, the consideration received of € 828 mn was recorded in issued capital, € 23 mn, and capital reserve, € 805 mn. During the third quarter 2005, the Allianz Group issued 10,116,850 shares for proceeds of € 1,062 mn, which was recorded in issued capital, € 26 mn, and capital reserve € 1,036 mn.

Minority interests in shareholders’ equity are comprised of the following:


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Unrealized gains and losses (net)	1,685	1,206
Share of earnings	1,020	1,168
Other equity components	6,065	5,322

Total	8,770	7,696

The primary subsidiaries of the Allianz Group included in minority interests in shareholders’ equity are AGF Group, Paris and RAS Group, Milan.

11 Participation certificates and subordinated liabilities


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Allianz AG^*)
Subordinated bonds	6,188	4,775
Participation certificates	85	85

Subtotal	6,273	4,860

Banking subsidiaries
Subordinated liabilities	4,179	4,779
Hybrid equity	1,599	1,500
Participation certificates	1,520	1,526

Subtotal	7,298	7,805

All other subsidiaries
Subordinated liabilities	931	520
Hybrid equity	45	45

Subtotal	976	565

Total	14,547	13,230

^*)	Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz AG.

On February 18, 2005, the Allianz Group issued a subordinated bond with a principal amount of € 1,400 mn. The subordinated bond is perpetual, however, the Allianz Group has the right to call the bond after 12 years. The subordinated bond has a coupon rate of 4.375%.

On January 27, 2005, the AGF Group issued a subordinated bond with a principal amount of € 400 mn. The subordinated bond is perpetual and has a coupon rate of 4.625%.

F-25

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

12 Reserves for insurance and investment contracts


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Unearned premiums	14,478	12,050
Aggregate policy reserves	244,286	229,873
Reserves for loss and loss adjustment expenses	68,176	62,331
Reserves for premium refunds	28,741	21,237
Other insurance reserves	808	889

Total	356,489	326,380

Reserves for loss and loss adjustment expenses are comprised of the following:


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Property-Casualty	61,133	55,536
Life/Health	7,043	6,795

Total	68,176	62,331

Changes in the reserves for loss and loss adjustment expenses for the Property-Casualty insurance segment for the nine months ended September 30, 2005, were as follows:


	2005
	€ mn
Gross reserves for loss and loss adjustment expenses as of January 1,	55,536
Amount ceded to reinsurers	(10,029	)

Net reserves for loss and loss adjustment expenses as of January 1,	45,507

Loss and loss adjustment expenses incurred (net)
Current year	19,846
Prior years	(593	)

Subtotal	19,253

Loss and loss adjustment expenses paid (net)
Current year	(7,599	)
Prior years	(9,277	)

Subtotal	(16,876	)

Foreign currency translation adjustments	1,369

Net reserves for loss and loss adjustment expenses as of September 30,	49,253
Amount ceded to reinsurers	11,880

Gross reserves for loss and loss adjustment expenses as of September 30,	61,133

F-26

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Asbestos and Environmental (A&E) Reserves

In the United States, the planned external review of the asbestos & environmental (or “A&E”) liability reserves at Fireman’s Fund had no net impact at the Allianz Group level as a result of already sufficient reserves, absent a $ 56 mn loss caused by the increase in provisions for uncollectible reinsurance recoverables.

13 Liabilities to banks


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Payable on demand	16,775	14,003
Repurchase agreements and collateral received from securities lending transactions	51,262	78,675
Term deposits and certificates of deposit	77,339	96,736
Other	2,622	1,933

Total	147,998	191,347

14 Liabilities to customers


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Savings deposits	2,313	2,410
Home loan savings deposits	3,292	3,214
Payable on demand	53,336	50,946
Repurchase agreements and collateral received from securities lending transactions	43,900	49,276
Term deposits and certificates of deposit	55,130	49,124
Other	1,936	2,167

Total	159,907	157,137

15 Certificated liabilities


	September 30, 2005	December 31, 2004
	€ mn	€ mn
*Allianz AG^)**
Senior bonds	4,776	5,741
Exchangeable bonds	2,316	2,742
Money market securities	1,202	1,428

Subtotal	8,294	9,911

Banking subsidiaries
Certificated liabilities	25,705	25,140
Money market securities	23,831	21,693

Subtotal	49,536	46,833

All other subsidiaries
Certificated liabilities	415	458
Money market securities	400	550

Subtotal	815	1,008

Total	58,645	57,752

^*)	Includes senior bonds, exchangeable bonds and money market securities issued by Allianz Finance B.V., Allianz Finance II B.V. and Allianz Finance Corporation and guaranteed by Allianz AG.

On February 18, 2005, the Allianz Group issued a senior exchangeable bond, Basket Index Tracking Equity Linked Securities (“BITES”), with a principal amount of € 1,262 mn. The redemption value of the BITES is linked to the performance of the DAX Index. The BITES were issued at a DAX reference level of 4,205.115. The Allianz Group will redeem the BITES with shares of BMW AG, Munich Re and/or Siemens AG. The BITES have a term of 3 years, however, the Allianz Group has the right to redeem the BITES at anytime during their term. The holders of the BITES have the right to exchange the BITES during their term at the redemption value. An outperfomance premium is paid annually equal to 0.75% of the average DAX Index during the reference period prior to the payment date. Upon redemption of the BITES by the Allianz Group or at maturity, the holders of the BITES receive a redemption premium of 1.75% of the redemption

F-27

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

value. The Allianz Group has recorded an embedded derivative related to this transaction in financial liabilities carried at fair value through income of € 253 mn as of September 30, 2005.

On March 23, 2005, the Allianz Group repaid in cash a senior exchangeable bond with a face amount of € 1,700 mn.

On August 26, 2005, the Allianz Group repaid a senior bond with a face amount of CHF 1,500 mn.

16 Financial liabilities carried at fair value through income


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Financial liabilities held for trading	87,084	102,141
Financial liabilities for unit linked contracts	51,663	41,409
Liabilities for puttable equity instruments	2,112	1,386
Financial liabilities designated at fair value through income	226	201

Total	141,085	145,137

Financial liabilities held for trading are comprised of the following:


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Obligations to deliver securities	55,310	72,804
Derivative financial instruments	23,357	23,018
Other trading liabilities	8,417	6,319

Total	87,084	102,141

17 Other accrued liabilities


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Reserves for pensions and similar obligations	5,788	5,738
Accrued taxes	1,440	1,408
Miscellaneous accrued liabilities	6,569	6,838

Total	13,797	13,984

Of the accrued taxes, € 1,304 mn (2004: € 1,278 mn) is attributed to taxes on income.

18 Other liabilities


	September 30, 2005	December 31, 2004
	€ mn	€ mn
Funds held under reinsurance business ceded	7,541	8,706
Accounts payable on direct insurance business	7,233	8,199
Accounts payable on reinsurance business	1,649	1,694
Other liabilities	12,731	12,672

Total	29,154	31,271

F-28

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Supplementary Information to the Consolidated Income Statements

19 Premiums earned (net)


Three months ended September 30,	Property-Casualty						Life/Health						Total
Three months ended September 30,	Segment		Consolidation adjustments		*Group^)**		Segment		Consolidation adjustments		*Group^)**		*Group^)**
	€ mn		€ mn		€ mn		€ mn		€ mn		€ mn		€ mn
2005
Premiums written
Direct	9,357		—		9,357		4,447		—		4,447		13,804
Assumed	1,115		(58	)	1,057		61		—		61		1,118

Subtotal	10,472		(58	)	10,414		4,508		—		4,508		14,922
Ceded	(1,493	)	—		(1,493	)	(258	)	58		(200	)	(1,693	)

Net	8,979		(58	)	8,921		4,250		58		4,308		13,229

Premiums earned
Direct	10,285		—		10,285		4,406		—		4,406		14,691
Assumed	1,116		(59	)	1,057		59		—		59		1,116

Subtotal	11,401		(59	)	11,342		4,465		—		4,465		15,807
Ceded	(1,613	)	—		(1,613	)	(259	)	59		(200	)	(1,813	)

Net	9,788		(59	)	9,729		4,206		59		4,265		13,994

2004
Premiums written
Direct	9,351		—		9,351		4,391		—		4,391		13,742
Assumed	1,081		(207	)	874		74		(7	)	67		941

Subtotal	10,432		(207	)	10,225		4,465		(7	)	4,458		14,683
Ceded	(1,323	)	7		(1,316	)	(462	)	207		(255	)	(1,571	)

Net	9,109		(200	)	8,909		4,003		200		4,203		13,112

Premiums earned
Direct	10,273		—		10,273		4,380		—		4,380		14,653
Assumed	1,084		(207	)	877		74		(5	)	69		946

Subtotal	11,357		(207	)	11,150		4,454		(5	)	4,449		15,599
Ceded	(1,517	)	5		(1,512	)	(464	)	207		(257	)	(1,769	)

Net	9,840		(202	)	9,638		3,990		202		4,192		13,830

^*)	After elimination of intra-Allianz Group transactions between segments.

F-29

Allianz Group

Notes to the Consolidated Financial Statements—(Continued)

as of September 30, 2005 and December 31, 2004 and for the three months and nine months ended September 30, 2005 and 2004

Nine months ended September 30,

Property-Casualty

Life/Health

Total

Segment

Consolidation
adjustments

Group^*)

Segment

Consolidation
adjustments

Group^*)

€ mn

2005

Premiums written

Direct

31,656

—

31,656

14,467

—

14,467

46,123

Assumed

2,783

(171

)

2,612

176

)

175

2,787

Subtotal

&nb

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