041 Business development of the AMB Generali Group in 2007 BUSINESS DEVELOPMENT GROUP MANAGEMENT REPORT Chap. 2 Overall business Our report on the business development of the Group is divided into two parts. The chapter "overall business" describes the business performance of the AMB Generali Group as an economic unit on the basis of consolidated figures. This is followed by segment reporting on the development in the segments of life and health insurance, property and casualty insur- ance and financial services. In segment reporting, relationships are only eliminated within one and the same segment. Therefore an addition of the amounts indicated in segment reporting does not lead to the figures stated in the consolidated balance sheet and the consolidated income statement. In 2007, the AMB Generali Group was again in a position to prove its competency as an innova- tive insurance group and witnessed premium growth above the market average in all segments, thanks to its excellent distribution strength. This is reflected in a substantial rise of the con- solidated net profit to 499 m. The consolidated net profit adjusted for extraordinary tax items improved to 417 m compared to 346 m in the previous year. Despite turmoil in international financial markets, the AMB Generali Group has thus markedly exceeded its profit target raised in the middle of the year from 380 m to 400 m before extraordinary tax items. The improvement of the consolidated net prof- it without tax impacts is primarily supported by the life and health segment. The property and casualty segment made a lower profit contribution than in the previous year following a decrease of net investment income. In the course of both the reporting year and the previous year various extraordinary items had to be taken into consideration. Within the scope of an optimization of the shareholding structure within the Group, various transactions were made in respect of participating interests. The previous year's merger of an intermediate holding company into AMB Generali affected the net profit in the life and health sub-seg- ments as a result of necessary adjustments of the pro- vision for deferred premium refunds and for deferred tax. In the year under report, negative results had to be dealt with as a result of the consolidation of capital decreases for real estate companies belonging to the life sub-segment. These negative results are primarily attributable to differences between the actual rates of provisions for premium refunds and the rates to be applied in consolidation. On the other hand, the con- tribution of our German asset management unit into · The consolidated net profit of the AMB Generali Group, before extraordinary tax items, rose from 346 m to 417 m ­ all segments contributed to this development. · For the fourth consecutive year, the Group was able to expand its market share ­ premium growth was again noticeably above the market average. · In life insurance we benefit from the high demand for Riester and basic pension cover. The improvement of the Group net profit is primarily supported by the life and health segment