Development of the Allianz share price from January 1, 2008 to September 30, 2008

indexed on the Allianz share price in €

Source: Thomson Reuters Datastream

Current information on the development of the Allianz share price is available at www.allianz.com/share.

Basic Allianz share information

Investor Relations

We endeavor to keep our shareholders up-to-date on all company developments. Our Investor Relations Team is pleased to answer any questions you may have.

Allianz SE

Investor Relations

Koeniginstrasse 28

80802 Muenchen

Germany

Fax:    + 49 89 3800 3899

E-Mail: investor.relations@allianz.com

Internet: www.allianz.com/investor-relations

For telephone enquiries, our “Allianz Investor Line” is available:

  + 49 1802 2554269

  + 49 1802 ALLIANZ

Highlights of the Third Quarter 2008

On August 31, 2008, Allianz SE (“Allianz”) and Commerzbank AG (“Commerzbank”) agreed on the sale of significantly all of Dresdner Bank AG (“Dresdner Bank”) to Commerzbank. Following the announcement of the sale, Dresdner Bank qualifies as held-for-sale and discontinued operations. Therefore, all revenue and profit figures presented for our continuing business do not include the parts of Dresdner Bank which we will sell to Commerzbank. The results from these operations are presented in a separate net income line “net income from discontinued operations, net of income taxes and minority interests in earnings” starting in the third quarter of 2008 (3Q 2008).

In September 2008, subsequent to the agreed sale, Dresdner Bank reclassified certain assets into the categories “available for sale” and “loans and receivables” according to amended IAS 39.²⁾ Without this reclassification, the operating results of Dresdner Bank would have been € 422 million lower. However, due to the treatment of Dresdner Bank as a discontinued operation, the results of Dresdner Bank no longer affect Allianz Group’s result.

Results of the third quarter 2008

In the third quarter of 2008 economic conditions deteriorated further and stock markets fell worldwide. In common with the industry, Allianz is influenced by these developments, which impacted both results and asset values. The extent of the effect varied by segment. Property-Casualty operations continued to deliver robust results, both in terms of revenues and operating profit. In contrast, revenues and profitability of our asset accumulation businesses were negatively affected by the financial market crisis.

Total revenues

in € bn

Internal revenue growth was (0.8)% mainly due to the negative revenue development in our unit-linked business and lower sales from our bancassurance channels. The strong growth rates in Property-Casualty and our growing traditional life business almost compensated for these shortfalls. On a nominal basis, total revenues declined by 3.8% and amounted to € 21,080 million. Main reason for the decline was a negative foreign exchange effect of € 549 million.

Operating profit

in € mn

Operating profit from continuing operations was € 1,556 million and thus 39.3% lower than in the comparison period. Property-Casualty operations made a solid contribution of € 1,249 million to operating profit, even though two of our operations were significantly affected by market conditions resulting in a 16.0% decline in operating profit compared to previous year’s quarter. In the Life/Health segment operating profit declined by 75.0% due to a high level of impairments and a prior year effect. In Asset Management, a negative impact from the financial market crisis and foreign exchange effects reduced the operating profit to € 186 million, from € 330 million in the prior year period.

Net income from continuing operations

in € mn

Net income amounted to € 545 million, down 73.4% mainly due to the shortfall in operating profit and net impairments of € 404 million within non-operating items.

Shareholders’ equity ¹⁾

in € mn

Shareholders’ equity was down € 2,909 million from June 30, 2008 and amounted to € 37,548 million as of September 30, 2008 mainly impacted by the net loss from discontinued operations and changes in unrealized gains and losses. At 157%, our solvency ratio¹⁾ remained at the target level of 150%.

Sale of Dresdner Bank

The agreed consideration comprises a cash component, 315 million Commerzbank shares, the Asset Manager Cominvest, a distribution agreement and a receivable against a fund held in trust to cover losses for specific ABS assets. The fair value of these considerations amounted to € 7.8 billion as of September 30, 2008.

The sale of significantly all of Dresdner Bank will take place in two steps. In the first step, Commerzbank will acquire 60.2% of the shares in Dresdner Bank from Allianz. In exchange Allianz will receive 163.5 million new shares in Commerzbank generated from a capital increase against contribution in kind, which is equivalent to a share of 18.4% of the increased share capital of Commerzbank. On the basis of the average XETRA closing price during August, these shares are worth € 3.4 billion. Commerzbank will pay Allianz an additional € 2.5 billion in cash. Thereof € 975 million will be provided to the aforementioned trust account to cover ultimate losses for the specific ABS assets.

The trust will be dissolved not later than 2018. In the transaction, Cominvest which is valued at € 0.7 billion will be transferred to Allianz.

In the second step, which is subject to the approval by the General Meetings of both entities, Dresdner Bank will be merged with Commerzbank and Allianz will receive further shares in Commerzbank. The final stake in Commerzbank which Allianz will hold after the second step will depend on the exact exchange ratio of Commerzbank shares to Dresdner Bank shares. The expected stake that Allianz will hold in Commerzbank will amount to nearly 30%. This will make Allianz SE the largest shareholder and a strong partner of the new bank.

The transaction is expected to be completed no later than the end of 2009 and is subject to approval by the regulatory authorities.

Allianz Group’s Consolidated Results of Operations

Total revenues ¹⁾

Total revenues – Segments

in € mn

Property-Casualty

Gross premiums written were 7.8% ahead of previous year at € 10,989 million on an internal basis. On a nominal basis, gross premiums written were up by 1.3% to € 10,816 million.

We grew in most of our markets. A significant part of the premium growth derived from increased crop business in the United States. Excluding this business, the major part of which is ceded to re-insurers, revenue growth would have been 5.2%. In addition, our activities in the emerging markets²⁾ were a key growth driver.

For the first nine months of 2008 gross premiums written on an internal basis increased by 3.1% to € 34,812 million. On a nominal basis, revenues were down by 1.1%. Adjusted for the reclassification of € 850 million of AGF’s health

business from Property-Casualty to the Life/Health segment, revenues grew by 1.3 %.

Life/Health

Premiums decreased by 8.7 % on an internal basis to € 9,625 million in the quarter. On a nominal basis, revenues were 8.3 % lower, at € 9,415 million. Adjusted for the reclassification of AGF’s health business of € 279 million from the Property-Casualty segment, revenues declined by 10.7 %.

On an internal basis, statutory premiums for the first nine months amounted to € 33,367 million, down 5.2 %. On a nominal basis, revenues decreased by 5.5 % to € 32,471 million.

Banking¹⁾

In the third quarter, revenues from continuing banking operations declined 3.1 % or € 4 million to € 123 million. This development resulted mainly from lower net fee and commission income, primarily in the Italian market. Net interest income was stable at € 74 million and net dealing income was up € 7 million to € 1 million.

In the nine month review we recorded downward movements in net dealing income and in net fee and commission income, leading to a revenue decrease of 8.6 % to € 416 million.

Asset Management

Operating revenues dropped by 3.2 % on an internal basis and by 13.1 % to € 698 million on a nominal basis. Lower net fee and commission income, negative foreign exchange effects and lower mark-to-market valuation of seed money in the United States were the key drivers behind the shortfall.

On an internal basis operating revenues increased by 0.5 % for the first nine months. Revenues amounted to € 2,163 million, down 9.1 % on a nominal basis.

Operating profit

Operating profit – Segments

in € mn

Property-Casualty

At € 1,249 million representing a decrease of 16.0 %, the segment continued to generate strong returns in operating profit but was mainly due to Euler Hermes and Fireman’s Fund € 238 million lower than in 3Q 2007. Both operations had to cope with difficult market conditions. Our combined ratio increased to 96.2 %.

On a nine month basis, operating profit decreased by € 237 million to € 4,411 million.

Life/Health

Operating profit amounted to € 218 million, after € 873 mil- lion in 3Q 2007. The reason for this decline is the € 385 million lower net investment result and a one-off technical gain of € 170 million recorded in 3Q 2007.

On a nine month basis, operating profit decreased by 36.6 % to € 1,510 million.

Banking¹⁾

Operating loss from our continuing Banking operations was € 17 million after a loss of € 14 million in the comparison period. This was mainly the result of lower revenues and higher loan loss provisions.

For the nine months we recorded an operating loss of € 6 million after a profit in 2007 of € 28 million. Higher loan loss provisions in the third quarter was the major reason.

Asset Management

In the quarter-to-quarter comparison operating profit dropped by 43.6 % to € 186 million, as a consequence of lower revenues, increased administrative expenses and a significant negative foreign exchange effect.

Corporate Segment

The operating loss for the third quarter decreased to € 54 million compared to a loss of € 155 million in 3Q 2007.

In the first nine months the operating loss of € 125 million represented an improvement of € 141 million compared to the first nine months of 2007.

Non-operating result

Non-operating items produced a loss of € 729 million coming from a gain of € 37 million a year ago. Due to the current market environment, the impairments on investments recorded as non-operating increased to € 921 million mainly reflecting high equity impairments. Higher net realized gains, totalling € 517 million, only partly compensated for this development. Furthermore, the non-operating result was reduced by higher restructuring charges mainly relating to AGF, where we executed a transformation program.

For the first nine months of 2008 we recorded a non-operating loss of € 817 million compared to a gain of € 1,018 million in the prior year, representing significantly higher impairments on investments. Realized gains also decreased by 11.8 % to € 1,981 million, as we benefited from the sales of equity investments in a very favorable market environment a year ago.

Net income from continuing operations

Net income from continuing operations decreased by € 1,504 million to € 545 million. Lower taxable income led to a decrease in tax expenses. In addition, the prior year period benefited from the German tax reform by € 119 million. Without this one-time impact the swing would have been larger. The effective tax rate increased to 30.0 %. Minority interests in earnings were reduced to € 34 million.

On a nine month basis, net income from continuing operations amounted to € 4,150 million. The developments were largely consistent with those described for the third quarter.

Net income (loss) from discontinued operations

Net loss from discontinued operations amounted to € 2,568 million and represents the expected loss from the sale of Dresdner Bank. This loss comprises Dresdner Bank’s results of 2008 amounting to € 1,159 million as well as the impairment charge of € 1,409 million, reflecting the negative difference between the consideration and the carrying value of Dresdner Bank in the books of Allianz Group.

Net Income (loss)

Net loss for the third quarter amounted to € 2,023 million compared to a net income of € 1,921 million a year ago. For the first nine months net income was € 667 million compared to € 7,301 million in the comparison period.

Earnings per share ¹⁾

in €

Impact of the financial markets turbulence

The financial markets crisis has its root cause in the sub-prime crisis, when rising defaults on subprime mortgages in the United States resulted in significant deterioration of prices for securitized assets. Primarily, this affected collateralized debt obligations (“CDO”), and residential mortgage-backed securities especially those originating in the United States (“U.S. RMBS”). The revaluation of these assets resulted in massive write-downs in the industry. Subsequently, uncertainty about the extent and distribution of losses arose and the interbank market started to freeze. This prompted central banks to take concerted action and provide the capital market with additional liquidity.

2008 has been characterized by weak equity markets, volatile credit spreads and further declines in U.S. house and mortgage prices. The downgrading of monoline insurers (“monoliners”) led to further writedowns on derivatives contracts banks held with the insurers. Investors faced further downgrades and market losses on insured bonds. In September, large financial institutions faltered, leading to failures, mergers and conservatorships. These recent developments led to continuously deteriorating market sentiment and falling stock markets worldwide and ultimately prompted governments to take coordinated actions and announce broad rescue plans for distressed institutions.

The turbulence in the financial markets has clearly impacted our business development. However, the impact varied in each business segment.

The major operating impact of the crisis comes through Dresdner Bank which, as already mentioned, we now record as a discontinued operation. Impacts on our insurance operations have been limited to the impairments on equity and fixed-income securities as well as lower sales of unit-linked life insurance products. Investment activities of the insurance segments were only impacted to a very limited extent, reflecting the high quality of the asset bases with no material CDO or subprime exposure.

Impact on insurance assets

Impairments by insurance segment

Asset-backed securities exposure

Of our Property-Casualty asset base, asset-backed securities (“ABS”) made up € 4.8 billion as of September 30, 2008, which is around 5.6 %. CDOs accounted for € 0.1 billion of this amount. Unrealized losses on CDOs of € 3 million were recorded in our equity.

Within our Life/Health asset base, ABS amounted to € 14.7 billion as of September 30, 2008, which is 4.3 % of total Life/ Health assets. Of these, € 0.3 billion are CDOs. Unrealized losses on CDOs of € 5 million were recorded in our equity.

Subprime exposures within CDOs were negligible.

Impact on investment banking activities of Dresdner Bank (discontinued business)

Dresdner Bank is engaged in various business activities involving structured products. These comprise ABS, credit enhancements, conduits, leveraged buy-out commitments (“LBO”) and structured investment vehicles (“SIV”). Furthermore, Dresdner Bank has sold credit protection for third party ABS and has re-insured these positions with monoliners.

Net asset-backed securities

As of September 30, 2008, Dresdner Bank carried ABS with an exposure of € 9.4 billion.

The net exposure of ABS increased by € 2.5 billion since June 30, 2008. This resulted predominantly from the restructuring of certain monoline exposures.

ABS are carried in the trading and in the banking book. The ABS banking book exposures stemmed from reclassifications made out of the trading book in September 2008.

Breakdown of exposure by rating class

in %

Credit enhancements

Credit enhancements are initiatives taken by the originator in a securitization structure to enhance the security, credit or the rating of the securitized instrument. In this context, Dresdner Bank offered second loss protection for credit investment related conduits (“CIRC”). This structure primarily contains ABS.

Under the CIRC structures, Dresdner Bank provides second loss protection, whereas the first loss stays with the client. Additionally, the Bank is entitled to sell the portfolio to the market, if the value of this portfolio falls below a pre-defined threshold. Here as well, the exposure was reduced and as of September 30, 2008, was an exposure of € 1.8 billion.

Conduits

A conduit is a special purpose entity that securitizes its financial assets, e.g. receivables, by means of commercial papers.

Since the late nineties, Dresdner Bank has arranged the securitization of third party and own asset portfolios through asset-backed commercial paper programmes (“ABCP”) via

several conduits. The underlying pool of assets exhibits a good quality, with 81 % having at least an A rating. Dresdner Bank has provided liquidity back-up lines of € 10.9 billion of which € 4.6 billion were undrawn as of September 30, 2008.

Leveraged buy-out

A leveraged buy-out is a financing transaction involving a significant amount of debt.

Dresdner Bank provides credit lines for these transactions, the bulk of which are typically syndicated. Dresdner Bank’s LBO exposure amounted to € 3.8 billion consisting of drawn and undrawn amounts as of September 30, 2008. In the third quarter, we recorded a negative impact of € 105 million resulting from loan loss provisions and realized losses.

Monoliner

Dresdner Bank has entered into business relations with monoliners – companies that guarantee the repayment of a security and the corresponding interest in the event that the issuer defaults – in order to hedge the exposure from ABS.

In addition, Dresdner Bank has provided credit protection via Credit Default Swaps (“CDS”) for ABS exposures. According to our risk policies, most of these CDS positions are re-insured with monoliners.

Only in the case of a default of payment from the underlying assets and a breach of contractual duties of the monoliners, will an ultimate loss occur. This loss amounts to the difference between the guaranteed amount from the monoliner and the value of the underlying assets.

Notional exposure versus monoliners was significantly reduced as a result of restructuring agreements as previously described.

We bought net protection for ABS with a net notional value of € 10.9 billion, of which € 8.9 billion have no primary reference to the U.S. mortgage market. In addition, the secured ABS portfolio contains € 2.0 billion of exposures to the U.S. mortgage market, of which we consider € 1.6 billion to be critical and expect, based on today’s knowledge, that we have to rely here partially on the monoliner protection. The remaining € 0.4 billion are U.S. RMBS.

Dresdner Bank’s gross counterparty risk amounted to € 2.0 billion. In order to hedge the monoliner default risk, the

bank bought Credit Default Swaps from third parties on the various monoliners in a total amount of € 0.4 billion, leaving us with a net counterparty exposure of € 1.6 billion.

The positive market value of the protection bought from monoliners amounted to € 1.1 billion. In addition to that, we built up Counterparty Default Adjustments (CDAs) against the positive market value of € 0.4 billion, leaving us with a net book value of € 0.7 billion.

The underlyings show a good quality, with 92 % being investment grade (having at least an A rating):

Breakdown of exposure by rating class

in %

Structured Investment Vehicles (“SIV”)

A structured investment vehicle is an entity that primarily invests in long-term, high quality securities. The investments are refinanced by medium term notes (“MTN”) or commercial papers (“CP”).

On March 18, 2008, Dresdner Bank and K2 Corporation entered into an agreement through which Dresdner Bank will provide a support facility to the Structured Investment Vehicle K2 for the benefit of the senior note holders. The agreement consists of a U.S. $ 1.5 billion committed revolving mezzanine credit facility and a ‘backstop’ facility.

We have fully consolidated K2 since the end of 1Q 2008.

K2 has a well diversified portfolio that is predominantly composed of MBS, CLO and ABS and holds no direct exposure to subprime assets or CDOs on ABS/MBS. In the third quarter, the volume of K2 has been further reduced by 31.8 % to € 6.0 billion. The remaining assets are of a high quality with 90 % having at least an AA rating.

As a result of the decreasing market values in the third quarter, K2’s assets no longer fully cover the repayment of K2’s senior debt; due to the backstop facility provided by Dresdner Bank a negative € 148 million impacted our result in 3Q.

Risk Management

Risk management is an integral part of our business processes and supports our value-based management. As our internal risk capital model provides management with information which allows for active asset-liability management and monitoring, risk is well controlled and managed.

The impacts from the subprime-crisis are described in the paragraph “Impacts from the financial markets turbulence”.

The information contained in the risk report in our 2007 Annual Report is still valid.

Events After the Balance Sheet Date

Capital investment in The Hartford

On October 6, 2008, Allianz SE announced a binding agreement providing for a capital investment of U.S. $ 2.5 billion in The Hartford.

We have purchased, for a consideration of U.S. $ 2.5 billion, 24 million of preferred shares convertible to common stock after receipt of applicable approvals, warrants for 69 million of Hartford shares and junior subordinated debentures with a nominal value of U.S. $ 1.75 billion and a 10 % interest coupon.

For further information see “Outlook” on page 11 and Note 41 to the condensed consolidated interim financial statements.

Opportunities

We remain confident that in principle the positive opportunities for the future development of our operating business and economic position as described in our 2007 Annual Report are still valid, subject to market uncertainties as described in our Outlook.

Furthermore, as part of the sale of Dresdner Bank to Commerzbank, Allianz will have access to more than 11 million banking clients (currently 6.3 million) and approximately 1,200 branches (currently 900) of the combined entity for the distribution of Allianz products.

Also as part of the Dresdner Bank transaction, the combination of Allianz Global Investors’ and Cominvest’s strengths and expertise under the roof of Allianz Global Investors Germany will create the largest asset manager in Germany with more than € 325 billion of assets under management.

Outlook

With a solvency ratio¹⁾ of 157% at the end of the current reporting period net of a dividend accrual of € 1.6 billion (40 % of net income before discontinued operations) and healthy underlying fundamentals in our operations, we feel well positioned for the future.

The challenging and volatile conditions in financial markets continue to impact our asset accumulation businesses. Further impairments are therefore expected, hitting operating profit especially in the Life/Health business.

As the nine month Group operating profit of € 6.5 billion was behind expectations for the same reasons, we expect to fall short of the 2008 operating profit outlook of € 9 billion plus before banking.

In these economic circumstances, making accurate earnings predictions for the short to medium term is extremely difficult. In the absence of a strong recovery in equity markets, the operating profit outlook for 2009 of € 9 billion plus cannot be confirmed.

As always, natural catastrophes and adverse developments in the capital markets, as well as the factors stated in our cautionary note regarding forward-looking statements, may severely impact our results of operations.

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may”, “will”, “should”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group’s core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.

Earnings Summary

Gross premiums written¹⁾

2008 to 2007 third quarter comparison

We maintained our focus on profitability and selectively wrote only those risks that we believe will generate adequate returns. This disciplined underwriting approach limited the negative pricing impacts stemming from markets that have remained soft for longer than expected, while at the same time achieving organic growth.

Gross premiums written on an internal basis were 7.8% ahead of previous year at € 10,989 million. A good part of the growth came from increased crop business in the United States. Other contributors to growth included South America and Allianz Global Corporate & Specialty (“AGCS”). These growth areas compensated for the negative impact of the reclassification of € 279 million of AGF’s health business to the Life/Health segment. Negative currency translation effects amounted to € 256 million. On a nominal basis, gross premiums written were up by 1.3% to € 10,816 million.

Gross premiums written by region ¹⁾

in %

The regional split of our gross premiums written was largely unchanged. We delivered growth in the majority of our markets.

In Italy, there was a decline in gross premiums written of € 125 million or 11.9%. This development stemmed mainly from the motor business, in particular due to a lower number of car registrations and our selective underwriting approach. Furthermore, prices were impacted by the Bersani-law, which resulted in a market-wide price reduction.

In the United States gross premiums written grew by 34.4% or € 508 million, primarily due to the crop business. Excluding the growth in crop insurance, internal growth declined by 6.8 %. At the same time business in the United States was mostly affected by price decreases which we estimate to be 2.7 %.

In emerging markets²⁾, where our strategy of expansion continued to pay off, premiums grew strongly by € 112 million or 10.4% on a like-for-like basis. Together, these markets

contributed € 1,185 million (3Q 2007: € 1,073 million) or 10.8% (3Q 2007: 10.5%) to total gross premiums written. Brazil experienced very dynamic growth across all lines of business, especially in motor and fire insurance. This drove the premium growth of € 69 million or 33.0% in South America

Adjusted for the full consolidation of Progress Garant in Russia and ATF-Polis in Kazakhstan, New Europe contributed € 14 million or 2.0% to total revenue growth. As in the second quarter the main driver for the growth was motor insurance business in Poland.

Premiums in AGCS increased by €  123 million, or 16.5%, largely driven by new business in aviation and energy.

Gross premiums written – Internal growth rates ¹⁾

in %

2008 to 2007 nine months comparison

For the first nine months our gross premiums written on an internal basis increased by 3.1% to € 34,812 million. On a nominal basis, revenues were down by 1.1%. Adjusted for the reclassification of € 850 million of AGF’s health business, revenue grew slightly by 1.3% nominally. The developments in our markets were largely consistent with the 2008 to 2007 third quarter comparison.

Operating profit

Operating profit

in € mn

2008 to 2007 third quarter comparison

The segment continued to deliver a strong operating profit contribution and was largely unaffected by the financial market crisis. Third quarter operating profit of € 1,249 million was 16.0% below previous year’s quarter mainly due to a higher claims level, which was partly compensated by a € 221 million reduction in administrative expenses.

The combined ratio of 96.2% was 2.1 percentage points above 3Q 2007, mainly impacted by the 2.5% increase in the accident year loss ratio, which stands now at 71.5%.

In our Credit Insurance business at Euler Hermes, we observed increases in payment delays – being the industry lead indicator for future defaults – resulting in an accident year loss ratio of 73.9%, after 50.0% in the third quarter 2007. At Fireman’s Fund Insurance Company (“Fireman’s Fund”) we had to absorb losses from crop insurance following a slump in commodity prices at the end of September.

An increase in claims severity was only partly compensated for by a lower claims frequency. This quarter we benefited from a lower level of natural catastrophes claims, which included € 146 million for hurricanes Ike and Gustav,

compared to € 225 million for natural catastrophes in 2007. At 1.5% the net development in prior years’ loss reserves was below the average level. Overall, the calendar year loss ratio increased by 3.5 percentage points to 70.0 %.

Acquisition and administrative expenses decreased by 5.4% to € 2,597 million. The reduction of administrative expenses was partly driven by further efficiency improvements that contributed € 56 million. Due to this positive development, our expense ratio improved by 1.4 percentage points to 26.2%.

Interest and similar income was up by 4.2% to € 1,049 million. The reason for this development was the higher investment income on debt securities that exceeded the decline in dividend income.

2008 to 2007 nine months comparison

On a nine month basis, operating profit decreased in line with the third quarter comparison to € 4,411 million. Our expense ratio improved by 1.5 percentage points to 26.6%, but the loss ratio deteriorated by 1.8 percentage points. Therefore, our combined ratio was up by 0.3 percentage points to 94.9%.

Non-operating result

2008 to 2007 third quarter comparison

The non-operating result decreased to a loss of € 126 million. This development was mainly due to increased impairments of investments which more than offset higher net realized gains.

Net realized gains from investments increased by € 228 million to € 530 million mainly reflecting forward sales of participations in both RWE and Linde.

Non-operating impairments on investments increased to € 583 million, reflecting the overall weakness in the financial markets.

2008 to 2007 nine months comparison

The non-operating result decreased to a gain of € 595 million, down 45.7% for the first nine months of 2008. Although net realized gains increased they were more than outweighed by higher impairments of investments.

Net income

2008 to 2007 third quarter comparison

Net income decreased significantly by 53.7% to € 791 million. Higher income tax expenses contributed to this development.

Income tax expenses increased to € 303 million, leading to a rise in the effective tax rate from (1.9)% to 27.0%. This mainly resulted from the benefit from the German tax reform in the third quarter 2007.

Lower minority interests in earnings amounted to € 29 million.

2008 to 2007 nine months comparison

For the first nine months, net income decreased by 14.0% to € 3,670 million.

Income tax expenses increased up to € 1,213 million, leading to an increase in the effective tax rate from 18.8% to 24.2% for the reason mentioned above.

Minority interests in earnings were also lower on a nine months basis, amounting to € 123 million.