Preliminary development of Vienna Insurance Group in 2011*

“With the preliminary data for 2011 Vienna Insurance Group demonstrates once more that it is operating successfully even against the background of difficult economic conditions. Pursuing our consistent strategy, we have achieved a sizeable growth, as expected. Despite partly significant fluctuations of important CEE currencies, we report a substantial increase in premiums of 3.4 percent and are again performing above the market average. The increase in profit before taxes by about 10 percent to nearly EUR 560 million underlines the long-term favourable development of our Group“, explains Günter Geyer, CEO of Vienna Insurance Group, and adds: “Our market entry in Bosnia and Herzegovina will allow us to take advantage of existing opportunities in this new market. Furthermore, we have strengthened our presence in interesting markets by acquiring Intersig in Albania as well as the life insurance company Polisa in Poland. Taking efficiency-boosting measures,  we optimise the profitability of our Group on an ongoing basis. Our goal is to gain a clear competitive edge as the leading insurance Group in Central and Eastern Europe through the best customer service.“

I. OVERVIEW OF KEY GROUP DATA FOR THE YEAR 2011
In the financial year 2011 Vienna Insurance Group earned unconsolidated premiums written of EUR 9 billion; this corresponds to a plus of about 3.4 percent. In the non-life insurance segment Vienna Insurance Group increased premiums written by a remarkable 4.9 percent to EUR 5.1 billion. In the life insurance business the Group reported a total of EUR 3.9 billion, achieving a growth of 1.4 percent – despite the difficult economic setting.

Based on preliminary data, the forecast Group profit (before taxes, consolidated) for the year 2011 will amount to nearly EUR 560 million. This corresponds to an increase by approximately 10 percent.
 
The management of Vienna Insurance Group assumes that the combined ratio of the Group (net, after reinsurance) for 2011 will amount to the target value of about 97 percent.

II. DIVIDEND
The Managing Board of Vienna Insurance Group considers proposing an increase in dividend for the year 2011 to the corporate bodies. This would result in a dividend yield of about 3.6 percent.**

III. DEVELOPMENT OF THE KEY REGIONS IN THE YEAR 2011
AustriaBased on preliminary data, the Austrian Group companies earned premiums of EUR 4.0 billion; this result reflects a stable development as compared to the previous year.

In the non-life insurance segment (including health insurance) premiums increased substantially by 10.2 percent to a total of EUR 2.1 billion.
In the life insurance the Group reported premiums of EUR 1.9 billion in Austria. The decline in the life insurance business may be attributed to the changed legislation on the minimum lock-up period for single-premiums. In contrast, regular premiums were increasing.

Czech Republic
The premiums of the three Czech Group companies Kooperativa pojišťovna, a.s., Česká podnikatelská pojišťovna, a.s. and Pojišt’ovna České spořitelny, a.s. climbed by a highly welcomed  5.7 percent (compared to the previous year) to a total of EUR 1.9 billion. The Group companies of Vienna Insurance Group have a market share of about 30 percent in the overall Czech insurance market.

Growing by a significant 13.1 percent, the life insurance segment proved once more to be an important growth engine, reporting premiums of EUR 837.1 million. In the non-life insurance business the premium income remained at a stable level of EUR 1.1 billion.

Slovakia
The Slovak Group companies Kooperativa poisťovňa, a.s., Komunálna poisťovňa, a.s. as well as  Poist’ovňa Slovenskej sporitel’ne, a.s. achieved a growth of 4.2 percent, earning premiums of a total of EUR 686.5 million. Vienna Insurance Group has continued strengthening its market leadership in Slovakia, holding a market share of about 32 percent.

The life insurance reported a growth of 6.7 percent, with premiums amounting to EUR 363.2 million. In the non-life insurance segment premiums rose by 1.5 percent to EUR 323.3 million.

Poland
The Polish Group companies of Vienna Insurance Group succeeded in achieving a growth clearly above the average of the local market. With premiums written totalling EUR 962.1 million, they reported a significant increase of 27.7 percent.

In the non-life insurance business the Group registered premiums of EUR 618.4 million, boasting a sizeable growth of 9.5 percent. In the life insurance segment premiums almost doubled to EUR 343.6 million – this is mainly due to the strong demand for single-premium contracts. Vienna Insurance Group is the number 3 in the non-life insurance segment in the Polish insurance market.

Romania
In Romania Vienna Insurance Group earned premiums of a total of EUR 510.9 million. In the wake of the income-oriented restructuring of the portfolio in the non-life insurance segment, a decline of 4.7 percent in total was reported.

In the life insurance segment the Group stepped up premiums by a gratifying 7.9 percent to EUR 100.9 million – this may be attributed in particular to using banks as a sales channel. The non-life segment earned premiums of EUR 410.0 million. With its Romanian Group companies, Vienna Insurance Group holds a market share of about 30 percent.

Remaining markets
The remaining markets of Vienna Insurance Group currently comprise the countries of Albania, Bulgaria, Bosnia-Herzegovina, Germany, Georgia, Croatia, Liechtenstein, Macedonia, Montenegro, Russia, Serbia, Turkey, Ukraine, Hungary, Belarus as well as the three Baltic states. The companies of Vienna Insurance Group earned a total of premiums written of EUR 887.1 million in these countries; this amount reflects a minor decline by 2.2 percent. A favourable development of premiums was observed in Ukraine and the Baltic states.

IV. OUTLOOK FOR THE FINANCIAL YEAR 2012
The Management of Vienna Insurance Group continues its efforts to keep volatilities affecting earnings as low as possible, taking into account the economic environment, and to promote the organic growth in premiums.

*THE BUSINESS FIGURES ARE BASED ON PRELIMINARY DATA AND ARE **UNCONSOLIDATED AND UNAUDITED. ALL FIGURES STATED ARE BASED ON EURO.