The ratings on Germany-based Allianz AG (AZAG) and related entities are based on the Allianz group's very strong operating performance, strong operational controls, strong capitalization, and a very strong competitive position, with the first tangible benefits of AZAG's bancassurance strategy emerging. These strengths are partially offset by the improving but still low earnings contributions of AZAG's banking activities. Allianz' earnings performance has become very strong. Positive earnings growth is being predominantly generated by improved operational fundamentals across all segments, but also reflects a favorable market environment. Performance in property/casualty insurance has been excellent, with a reported combined ratio of 91% for the first six months of 2005 and a ROR of 12% in full-year 2004. Performance in life insurance was
