Allianz threatens tax revolt
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February 24, 1999: 10:28 a.m. ET
Insurer says it may shift units from Germany if tax reforms proceed
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LONDON (CNNfn) - Europe's largest insurer threatened Wednesday to transfer large parts of its business out of Germany in a backlash against the new government's plans to reform the country's corporate taxes.
Allianz, the world's second-largest insurer, said the measures currently being discussed by the government would cost the company an additional 2.5 billion marks ($1.4 billion) over the next few years. The company stressed the impact of the proposed reforms wouldn't alter its profitability but would affect its balance sheet.
Allianz (FALV) shares rose 3 percent to 292.5 euros in Frankfurt.
A company spokesman lambasted the reforms as "an absolute novelty in the insurance industry worldwide," and predicted that smaller German insurers would suffer far more under the new plan.
Allianz conducts only one-third of its business in Germany. The company said it easily could transfer segments such as reinsurance, claims settlement and commercial operations out of Germany to reduce the impact of the new taxes, which could come into effect at the end of March.
Allianz made the threats to quit Germany after announcing full-year earnings for 1998.
The company posted a 30 percent increase in net earnings to 3.5 billion marks, and said group revenue rose 19 percent to 91 billion marks.
Management predicted a 10 percent increase in profit for 1999, barring further claims from major natural disasters.
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Allianz
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