German insurer Allianz is still grappling with massive deficits in its operations. Only one of its four divisions – general insurance – made an operating profit for 2003, even though it made a profit of $7.3 billion. Its life and health insurance arm lost $78.7 million and the asset management division lost $442 million.

Most spectacular of all is the continuing struggle to turn around the ailing Dresdner Bank – which has proved an enormous loss-maker since Allianz bought it several years ago. Last year it cost another $1.37 billion in restructuring costs and lost $583 million on top of the $2.6 billion it lost in 2002.

Following a massive global downsizing – Allianz shed 7900 jobs last year – and the sale of some 20 operating units, the group was able to report a profit of $2.62 billion, compared with a group loss of $1.9 billion in 2002.

Allianz says it is now looking forward to a better 2004. Chairman Michael Diekmann said in Munich that by 2005 the group “will be back where we belong, ­in the premier league of companies with strong earning power”.

The general insurance arm has lowered its combined ratio from 105.7% to 97%, and Mr Diekmann is expecting even better performance this year. “We have the strength and financial muscle to achieve this,” he said.