Allianz's plans to raise around € 5bn (£3.39bn) failed to prevent Standard & Poor's downgrading its credit rating and sent tremors through the investment community.

The German insurer saw its S&P rating cut to AA- from AA and its London-listed stock slide 13% last week.

One market commentator said: "It could have done this for half the price last year. The timing shows just how desperate it is."

The trouble came despite better than expected results from the group's property and casualty operations and its UK arm, Allianz Cornhill.

These positive results were undermined by losses from its subsidiary Dresdner Bank. Group earnings from banking slumped by 777% to a loss of € 1.5bn (£1.01bn) from a profit of € 227m (£154m) in 2001.

The group's total earnings before tax slid by 166% to €1.2bn (£815m) from €1.8bn (£1.2bn) last year.

Property and casualty earned € 7.5bn (£5bn), up 213% from € 2.4bn (£1.6bn) last year.

Allianz Cornhill's operating profit before tax increased to £116.2m in 2002 from £59.3m in 2001.

Premium income from general business increased to £1.7bn, up from £1.5bn in 2001.

The company achieved a combined ratio of 100%. Its claims ratio improved to 68.8% from 73.2% last year and the expense ratio shifted by 1.1% to 29.5% from 30.6% the year before.