S&P Affirms Allianz (Australia/NZ) Ratings; Revises Outlook to Positive

August 12, 2005

Standard & Poor’s Ratings Services announced that it has affirmed the long-term “A” insurer financial strength and counterparty credit ratings on Allianz Australia and its affiliate Allianz New Zealand, and has revised the rating outlook on the two companies to positive from stable.

“The outlook change reflects Allianz Australia’s sustained earnings, and improved business profile stemming from a growth in short-tail lines and the intermediary business,” stated S&P credit analyst Michael Vine. “The positive outlook reflects an expectation that improvements made to the business and financial position of Allianz Australia will be sustainable over the next few years. The prospects of Allianz Australia maintaining solid earnings performance in the short to medium term appear encouraging, assisted by sound underwriting practices and good growth prospects.”

S&P noted that it hasn’t moved the rating on Allianz Australia to a higher level at this stage, “as it seeks continued evidence of sustainable earnings required to support a higher rating.”

S&P added: “The ratings on Allianz Australia reflect the company’s sound business profile in the Australian general insurance market, strengthened operating performance despite some market softening in commercial lines, and solid investment performance from a conservative investment strategy. The business profile has improved with an increase in the proportion of short-tail business in the total insurance portfolio. Allianz Australia maintains capital resources, reserves, and reinsurance cover supportive of the rating, and further benefits as a strategically important subsidiary of Munich-based global insurance group Allianz AG (AA-/Stable/A-1+).

“Moderating factors are its high reliance on intermediaries as its channel of distribution; however, Allianz Australia’s intermediary partners are well diversified. “

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