Standard & Poor’s Ratings Services has upgraded its outlook on Allianz Insurance Co. of Canada and Trafalgar Insurance Co. of Canada to stable from negative and affirmed its ‘BBB+’ counterparty credit and financial strength ratings on the companies.

“The outlook revision reflects Standard & Poor’s view that the company will continue to demonstrate improved operating performance through 2004 and into 2005,” said Standard & Poor’s credit analyst Michael Gross.

In 2004, Standard & Poor’s expects Allianz Canada (which includes Allianz and Trafalgar) to report a combined loss-and-expense ratio of about 100% and net income of about $30 million. The continued financial improvement is attributable to management actions aimed at achieving strong and sustainable earnings and some improvement in industry operating conditions.

Based on 2003 net premium writings, Allianz Canada was ranked as one of the top-15 writers of property/casualty insurance in a highly fragmented and competitive Canadian P&C marketplace. Leveraging the Allianz AG brand name has provided for additional presence in the market. Allianz AG owns the Canadian P&C business platform.