MUNICH – German insurance giant Allianz AG reported Thursday that it returned to the black in 2003, thanks to the proceeds from the sale of chemical company Beiersdorf which more than offset further losses at its Dresdner Bank unit.

Europe’s largest insurer said it achieved a EUR 1.6 billion surplus in 2003, rebounding from losses of EUR 1.2 billion the year before.

The company said that it would propose a EUR 1.5 share dividend, unchanged from last year’s payout.

“Maintaining dividend continuity for the shareholders has always been an important principle at Allianz,” company chairman Michael Diekmann commented.

The recovery in earnings came from the sale of Beiersdorf, the insurance firm’s figures showed, with both operating income down and the banking unit losing money, with Dresdner Bank the chief cause.

Operating revenues fell to EUR 6.7 billion from EUR 7.6 billion in 2002, while gross premium income edged up 2.8 percent to EUR 85 billion. For 2004, Allianz expects 4 percent premium income growth.

In 2003, Dresdner Bank remained a drag on earnings, separately reporting EUR 1.99 billion in losses, to give the Allianz banking unit losses of EUR 1.3 billion in 2003. In 2002, the unit lost EUR 1.4 billion.

Putting a positive spin on the figures, Diekmann said the group had been returned to a “solid capital base”, with the company’s “3 plus 1 Programme” in revamping operations promising to make Allianz a force “to be reckoned with”.

“We are convinced that by 2005 at the latest, we will be back where we belong – in the premier league of companies with strong earning power,” Diekmann said, but said more work is needed.

“We know that we still have some way to go in order to achieve projected profitability goals, particularly in banking business and in some insurance units. However, we have the strength and financial muscle to achieve this,” the Allianz CEO said.

Last year, Allianz sold a 40 percent stake in Beiersdorf for EUR 4.4 billion, with EUR 2.8 billion of that booked as profit in the fourth quarter of 2003.

But the net income in the fourth quarter came to EUR 1.2 billion, as against losses of EUR 255 million in the final quarter of 2002. Allianz cited EUR 840 million in reorganisation expenses at Dresdner, along with writedowns of EUR 224 million at the Korea Life unit and tax charges of EUR 428 million in the fourth quarter.

On the Frankfurt Stock Exchange, investors showed their disappointment at the Allianz figures, amid worries that the cost of turning Dresdner Bank around will continue to be a drag on the insurance group’s earnings.

Early in the afternoon, Allianz shares were down almost 3.6 percent to EUR 89.28 euros.

DPA

Subject: German News