First semester 2008: Euler Hermes turnover grows by 5.5% and net result progresses to (euro)122.3 million end June 2008 compared to (euro)231.2 million end June 2007



    PARIS, France, July 30 /CNW Telbec/ - On 28 July 2008 the Management
Board presented to the Supervisory Board the consolidated results for the
first half 2008. The results have been reviewed by the auditors and the Audit
Committee.

    
    Key figures

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    in (euro) million            H1 2008     H1 2007   Variation   Variation
                                                       in amount        in %
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    Turnover                     1,083.6     1,052.0        31.6        3.0%
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    Turnover (at constant
     exchange rates)             1,083.6     1,027.4        56.2        5.5%
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    Technical income               114.2       222.1      -107.9      -48.6%
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    Net financial income            55.8        60.6        -4.8       -7.9%
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    Operating income net
     of realised gains             170.0       282.7      -112.7      -39.9%
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    Realised gains                  31.5        76.6       -45.1      -58.9%
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    Operating income               201.5       359.3      -157.8      -43.9%
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    Net consolidated result        122.3       231.2      -108.9      -47.1%
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    Net combined ratio
     (Allianz format excluding
     service margin)                91.7%       73.5%
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    Net combined ratio
     (EH format including
     service margin )               82.5%       63.3%
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    "The second quarter 2008 confirms the slowdown of global economic growth
which started at the end of 2007, impacting Euler Hermes' activities and
leading to an increase of the claims ratio. The claims ratio of the second
quarter 2008 stands at 64.6% compared to 62.9% for the previous quarter. This
is in line with the outlook given by Euler Hermes. At the same time, the
combined ratio improved from 83.1% in the first quarter of 2008 to 81.9% in
the second quarter of 2008, thanks to strict cost controls", states Clemens
von Weichs, Chairman of the Euler Hermes Board of Management.
    "Furthermore, from a commercial perspective, the turnover in the first
half of 2008 grew by 5.5% at constant exchange rates, in line with the
turnover growth of the first quarter of 2008 (5.4%)."

    1. Business review by geographical region

    The majority of Euler Hermes' European business units have demonstrated
positive growth. Specifically the United Kingdom (+10.6%), the Netherlands
(+12.9%) and the Nordic countries (+6.8%) grew very dynamically.
    In the United States the business is facing a strong slowdown, with a
negative growth of -1.5 % for the first semester 2008. This situation can be
explained by more restrictive risk and commercial underwriting implying
overall reduction of exposure and affecting the insured turnover volume, as
well as the cancellation of unprofitable contracts. Premium growth is also
affected by the slowdown in policy holders' turnover growth.
    The regions where Euler Hermes pursued its international expansion
(Eastern Europe, Southern Europe, Latin America and Asia) contributed with a
dynamic growth rate of 18.2%, at constant consolidation and exchange rates.

    Revenues by country (based on earned premium)

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    in (euro)     30/06/2008  30/06/2007   variation  30/06/2007   Variation
     thousand             (1)         (2)     (1)/(2)         (3)     (1)/(3)
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    France           203,929     202,422         0.7%    202,422         0.7%
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    United Kingdom   102,213     106,642        -4.2%     92,423        10.6%
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    Belgium           39,269      38,079         3.1%     38,079         3.1%
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    Netherlands       26,335      23,331        12.9%     23,331        12.9%
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    North America     66,028      77,592       -14.9%     67,028        -1.5%
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    Italy            128,342     123,703         3.8%    123,703         3.8%
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    Scandinavia       23,218      22,147         4.8%     21,736         6.8%
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    Germany          369,129     352,786         4.6%    352,786         4.6%
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    sub-total main
     countries       958,463     946,702         1.2%    921,508         4.0%
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    Sub-total new
     markets         125,157     105,264        18.9%    105,905        18.2%
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    Total Group
     turnover      1,083,620   1,051,966         3.0%  1,027,413         5.5%
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    (1) Turnover based on average exchange rate June 2008
    (2) Turnover based on average exchange rate June 2007 published in
        June 2007
    (3) Turnover published in June 2007 corrected by the impacts of exchange
        rate and perimeter changes


    2. Operating income

    Operating income amounts to (euro)201.5 million, decreasing by 43.9%
compared to end of June 2007. This evolution is due to an increase of the
combined ratio to 82.5% (compared to 63.3% at the end of June 2007) and to a
decrease in the financial income by 36.4% mainly due to lower capital gains in
2008 compared to the same period in 2007.

    As part of the net combined ratio, the claims and cost ratios show the
following evolution:

    - The net claims ratio increased by 18 points, from 45.8% at the end of
      June 2007 to 63.7% at the end of June 2008. This is due to an 8 points
      increase on claims of the attachment year 2008, rising from 57.9% at
      the end of June 2007 to 65.8% at the end of June 2008, and lower runoff
      decreasing from 12.1% to 2.0%. North America and Southern Europe are
      the regions that are suffering most from the increase in claims. Euler
      Hermes also notices an increase of the claims rates in the other
      European countries. The net claims ratio slightly increased during the
      second quarter of 2008 (64.6%) compared to the first quarter of 2008
      (62.9%) due to higher claims in the UK and in Italy.

    - The net cost ratio moves up to 18.8% compared to 17.5% at the end of
      June 2007 mainly due to the decline of reinsurance commissions
      received. The cost ratio of the second quarter of 2008 is lower than
      the cost ratio end of March 2008 (20.3%) due to the strict costs
      management.
    

    Net financial income, at the end of June 2008, slightly decreased by
7.9 % compared to the first semester of 2007.
    During the second quarter of 2008 Euler Hermes reduced its equity
exposure and realised capital gains of (euro)31.4 million. The unrealised
capital gains on the portfolio add up to (euro)35.6 million end of June 2008,
equal to 17.5% of the market value of the portfolio as of 30 June 2008.
    At the end of June 2008 the market value of the financial portfolio was
(euro)3,305 million compared to (euro)3,497 million as of 31 December 2007,
decreasing by (euro)193 million. The decrease was mainly due to dividends paid
out during the second quarter of 2008.
    The portfolio also suffered from a decrease in unrealised capital gains
((euro)-130 M). The decrease is tied to the sharp fall in the equity markets
and the rates increase which affected the market value of the portfolio.

    3. Net income, group share

    After financial costs and taxes, Euler Hermes posted a net income of
(euro)122.3 million, compared to (euro)38.4 million at end March 2008.

    4. Shareholders' equity

    The Group's shareholders' equity totalled (euro)1,847 million at the end
of June 2008 compared with (euro)2.058 million at the end of 2007. This 10%
decrease is principally due to the dividends paid out during the second
quarter of 2008.

    5. Outlook

    For the following months Euler Hermes forecasts that the slowdown in OECD
countries will continue. The sharp increase in energy, raw material and food
prices as well as the tightening of financial conditions has an impact on both
consumers and companies. The slowdown in the construction sector and the drop
of household consumption are two very visible factors of the deteriorating
economic environment. The consequence of all these elements is a rise in
overdue and business insolvencies.
    As far as the countries which are already affected by the economic
slowdown are concerned (US, UK, Italy, Spain...) Euler Hermes has taken the
appropriate measures in terms of credit risk underwriting and is also
reviewing the commercial conditions in the contracts.
    As of today, Germany and France have performed better than the other
European countries. However these countries are now affected by the current
economic slowdown. In order to limit the impact Euler Hermes is taking all the
necessary measures in terms of risk prevention and commercial underwriting in
these two countries.
    In the case of a worsening economic slowdown, all the measures taken
should enable Euler Hermes to have a customer portfolio in line with the new
market conditions.

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    Euler Hermes is the worldwide leader in credit insurance and one of the
leaders in the areas of bonding, guarantees and collections. With 6,000
employees in over 50 countries, Euler Hermes offers a complete range of
services for the management of B-to-B trade receivables and posted a
consolidated turnover of (euro)2.1 billion in 2007.
    Euler Hermes has developed a credit intelligence network that enables it
to analyse the financial stability of 40 million businesses across the globe.
The group protects worldwide business transactions totalling (euro)800
billion. Euler Hermes, subsidiary of AGF and a member of the Allianz group, is
listed on Euronext Paris. The group and its principal credit insurance
subsidiaries are rated AA- by Standard & Poor's.

    www.eulerhermes.com
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    These assessments are, as always, subject to the disclaimer provided
below. Cautionary Note Regarding Forward-Looking Statements: Certain of the
statements contained herein may be 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 SE's core business
and core markets, (ii) performance of financial markets, including emerging
markets, (iii) the frequency and severity of insured loss events, (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, (*) 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 involve risks and uncertainties described from time
to time in Allianz SE's filings with the U.S. Securities and Exchange
Commission. The group assumes no obligation to update any forward-looking
information contained herein.




For further information:

For further information: Nicolas Hein, Investors Relations, Euler Hermes
Group, +33 (0)1 40 70 54 65, nicolas.hein@eulerhermes.com; Raphaele Hamel,
Press Relations, Euler Hermes Group, +33 (0)1 40 70 81 33,
raphaele.hamel@eulerhermes.com; www.eulerhermes.com

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