The Allianz-RAS merger provided the opportunity to streamline the Allianz Group’s structure in an effort to increase capital efficiency and to benefit from operational and strategic synergies.
As a consequence of the merger, Allianz SE now holds 100% of its property-casualty and life/health subsidiaries in Switzerland (Allianz Suisse Versicherungs-Gesellschaft and Allianz Suisse Lebensversicherungs-Gesellschaft) and in Austria (Allianz Elementar Versicherungs-Aktiengesellschaft and Allianz Elementar Lebensversicherungs-Aktiengesellschaft) through holding companies. These subsidiaries were formerly held jointly by Allianz AG (now Allianz SE) and RAS, with RAS holding the majority. Also due to implementation of the merger, Allianz SE now directly holds majority interests in the Portuguese insurance subsidiary, Compañhía de Seguros Allianz Portugal S.A., and in the Spanish insurance subsidiary, Allianz Compañía de Seguros y Reaseguros S.A.
The proposed acquisition of the minority interests in AGF and Allianz Leben, which were announced on January 18, 2007, are also designed to further streamline our Group structure across regions and business units.(2)
Reorganization of German Insurance Operations
In 2006, we further consolidated our major German insurance subsidiaries (Allianz Versicherungs-Aktiengesellschaft, Allianz Lebensversicherungs-Aktiengesellschaft, and Allianz Private Krankenversicherungs-Aktiengesellschaft), under the new holding company Allianz Deutschland AG (wholly-owned by Allianz SE). In the course of this reorganization, which we announced in September 2005, Frankfurter Versicherungs-AG and Bayerische Versicherungsbank AG were merged into Allianz Versicherungs-Aktiengesellschaft. The tied agent sales activities of the German property-casualty and life/health business, which previously were run by five different corporations, were consolidated into a separate sales company, Allianz Beratungs- und Vertriebs-AG, which is also a subsidiary of Allianz Deutschland AG. We have replaced the insurance operations’ previous regional structure with four sales and service regions.
The reorganization of our German insurance operations is designed to simplify structures and reduce complexity within the Allianz Group, allowing us to react to changes in our markets with greater speed, focus and flexibility. Our goal is to create one joint presence of our insurance operations, with customers perceiving Allianz as one unit with comprehensive high quality services geared toward the customer’s needs. This process is part of our strategy to further develop our leading position in the German insurance market.
We are continuing this reorganization plan and expect to have the new business model in place by 2008. The new business model will require approximately 5,700 fewer staff. In connection with this reorganization we took the following steps in 2006:
Created the German insurance holding company Allianz Deutschland AG.
Top management team in place.
Agreement on key points between the works councils and the management of Allianz Deutschland AG and its main subsidiaries.
Allianz Deutschland AG and its main subsidiaries committed not to make any compulsory redundancies until the end of 2009.
Districts organized into four regions.
Distribution centralized.
Property-Casualty companies merged.
We expect the reduced complexity to allow us to reduce costs in the long-term. As of December 31, 2006, Allianz Deutschland AG’s provisions for restructuring amounted to € 455 million.(3)
Merger of industrial insurance business within Allianz global corporate & Specialty
In the second half of 2006, we commenced the reorganization of the Allianz Group’s international corporate and specialty insurance business by creating Allianz Global Corporate & Specialty AG, a wholly-owned subsidiary of Allianz SE. This unit houses the activities of the former Allianz Global Risks Re and Allianz Marine & Aviation operating entities, the corporate customer business of Allianz Sach, as well as Allianz Risk Transfer in Switzerland, under the umbrella of one Munich-based company. In the future, we also plan to integrate other local corporate and specialty insurance activities in selected locations into Allianz Global Corporate & Specialty AG in order to offer a comprehensive range of risk management solutions and specialist expertise from one source. The new organization is designed to facilitate a clear client focus, while it reduces complexity, increases efficiency and promotes globally consistent management practices.
“Neue Dresdner Plus” Reorganization Program
In 2006, Dresdner Bank launched the “Neue Dresdner Plus” reorganization program, by integrating its former four operating divisions into two operating divisions. After an agreement between the Board of Management and the works council of Dresdner Bank AG in late December 2006 and effective starting with the first quarter of 2007, it was determined that the final new business model of Dresdner Bank will require approximately 2,500 fewer employees, and consist of the following two new operating divisions:
Private & Corporate Clients combines all banking activities formerly provided by the Personal Banking and Private & Business Banking (including Private Wealth Management) divisions as well as our activities with medium-sized business clients from our former Corporate Banking division.
Investment Banking, with Global Banking and Capital Markets, unites the activities formerly provided by the Dresdner Kleinwort Wasserstein division and the remaining activities of the former Corporate Banking division.
In addition, the Corporate Other division contains income and expense items that are not assigned to Dresdner Bank’s operating divisions.
The goal of the “Neue Dresdner Plus” program is to re-position Dresdner Bank to further develop its advisory services and sales activities for private clients as well as to create a single source for groups and institutional clients. As of December 31, 2006, Dresdner Bank Group’s provisions for restructuring amounted to € 379 million. In 2006, Dresdner Bank Group recorded restructuring charges for all restructuring programs of € 422 million.(3)
Reorganization in the United States
In order to capture the potential for regional synergies, the Allianz Group has commenced a reorganization of the business lines in the United States by strengthening the role of the Allianz of America Inc. holding company in an effort to create expense and distribution synergies between the different businesses in the United States. This regionalization is designed to allow our U.S. companies to leverage all of the available resources and assets and to enable Allianz Life United States and Fireman’s Fund to more effectively anticipate and deliver on customer needs. The respective management teams of each company will be able to draw upon the resources of Allianz of America to provide customers with highquality solutions, maximize cross-selling opportunities, simplify services, and leverage combined assets while driving a performance-based culture. The goal of the reorganization is to optimize the ability of both companies to improve their market positions.
(1) For information on changes in the scope of consolidation in the years ended December 31, 2006, 2005 and 2004 please see pages 140 to 142. You find them in the PDF file "Notes to the Consolidated Financial Statements", which you can download on page Notes to the Consolidated Financial Statements. (2) For further information on these contemplated transactions please see page Executive Summary and Outlook. (3) For further information see please see pages 219-223. You find them in the PDF file "Other Information", which you can download on page Notes to the Consolidated Financial Statements..
