Vienna Insurance Group in the 1st to 3rd quarter of 2010

“The continuous development of Vienna Insurance Group confirms once more our outlook for the current financial year. The strong demand in the life insurance business has made an essential contribution to growth. In this segment especially the companies of Sparkassen Versicherung Group report double-digit growth rates in CEE“, emphasised Günter Geyer, CEO of Vienna Insurance Group. “The trends in Central and Eastern Europe are not uniform. In Austria, the Czech Republic and Slovakia we observe great interest in life insurance, while in Poland there is mainly a strong demand for non-life insurance products. The increase in profit (before taxes) by more than 10 percent – which we achieved despite the high expenditure caused by natural disasters – confirms the strategy pursued in our markets. Thanks to the further expansion of our sound capital base, we are perfectly equipped for all future challenges.“

I. OVERVIEW OF KEY GROUP DATA FOR THE FIRST THREE QUARTERS OF 2010 (IN ACCORDCANCE WITH IFRS)
In the first three quarters of 2010, Vienna Insurance Group registered premiums written (consolidated) of a total of EUR 6.5 billion, corresponding to a plus of 7.1 percent compared to the same period of the previous year.

With a Group profit (before taxes, consolidated) totalling EUR 377.7 million, Vienna Insurance Group has continued its efforts to improve its result on an ongoing basis, increasing it by a remarkable 10.9 percent.

Amounting to 98.2 percent, the combined ratio of the Group (net, this means after reinsurance, excluding investment income) continued to remain under the 100-percent threshold despite increases arising from natural disasters. This damage (before reinsurance) – particularly in Austria, the Czech Republic, Poland and Romania – amounted to more than EUR 180 million.

In the first three quarters of the current year, the financial result of the Group totalled EUR 895.7 million; this corresponds to an increase by 23.2 percent compared to the same period of the previous year.

The investments of the Group as of 30 September 2010 totalled EUR 27.7 billion, climbing by 6.9 percent from the level of 31 December 2009.

The Group’s equity rose by 6.2 percent to a total of EUR 4.9 billion.


II. GROUP DATA BY SEGMENTS, 1ST TO 3RD QUARTER OF 2010 (CONSOLIDATED)

Property/casualty insurance
With premiums written totalling EUR 3.4 billion in this segment, Vienna Insurance Group achieved a plus of 0.3 percent. Based on net earned premiums, the Group recorded a plus of 4.7 percent.

In the CEE markets Vienna Insurance Group reported premiums written of EUR 2.0 billion, corresponding to an increase by 1.2 percent.

In the non-CEE markets premiums written in the casualty/property insurance segment amounted to EUR 1.3 billion. In Austria the Group companies achieved premiums of EUR 1.3 billion. In Germany premiums rose by 2.2 percent to a total of EUR 55.0 million.

Life insurance
In this segment the Vienna Insurance Group companies earned premiums totalling EUR 2.9 billion, corresponding to a strong increase by 16.6 percent.

In the life insurance segment in CEE markets the Group registered a significant growth of 16.8 percent; premiums increased to EUR 1.1 billion. Growing by a total of 47.6 percent, Sparkassen Versicherung Group made a significant contribution to the highly gratifying development in this segment.

In non-CEE markets the Group earned premiums of a total of EUR 1.8 billion; this is a substantial increase by 16.5 percent.

In Austria premiums in this segment went up by 13.6 percent to a total of EUR 1.7 billion. With premiums of EUR 156.3 million, the Group companies achieved a growth of 59.2 percent in Germany and Liechtenstein.

Health insurance
With premiums of EUR 245.8 million, Vienna Insurance Group recorded a plus of 1.7 percent in this segment.


III. GROUP DATA BY REGIONS, 1ST TO 3RD QUARTER OF 2010 (CONSOLIDATED)

Austria
In the first three quarters of the current year, Vienna Insurance Group earned premiums written of EUR 3.2 billion in Austria; this corresponds to a 6.2-percent increase. In the property/casualty insurance segment the Group reported premiums of EUR 1.3 billion. In the life insurance segment the Group registered premiums written of EUR 1.7 billion after a strong increase by 13.6 percent.

Profit (before taxes) amounted to EUR 180.6 million.

The combined ratio stood at 96.9 percent.

Czech Republic
In the Czech Republic the Vienna Insurance Group companies achieved a significant plus of 7.6 percent, with premiums written amounting to EUR 1.3 billion.

In the non-life insurance segment premiums written totalled EUR 759.3 million. Growing significantly by 27.7 percent, premiums written in the life insurance business rose to a total of EUR 530.8 million.

Profit (before taxes) amounted to EUR 103.7 million, increasing by 5.4 percent.

In the first three quarters of 2010, the combined ratio totalled 95.2 percent.

Slovakia
With a total of EUR 478.5 million premiums written, the Group companies of Vienna Insurance Group achieved a plus of 1.9 percent in Slovakia.

In the non-life insurance segment the Group earned premiums written of EUR 232.1 million. In the life insurance segment premiums written surged by 15.6 percent to EUR 246.4 million.

Profit (before taxes) showed a gratifying increase from EUR 16.1 million to a total of EUR 29.0 million.

The combined ratio decreased by 2.5 percentage points to 91.7 percent.

Poland
In the first three quarters of 2010, premiums written recorded a gratifying increase by 31.7 percent to EUR 534.5 million. In the non-life insurance segment the Polish Group companies achieved a significant increase of 48.1 percent; this resulted in a total of premiums written of EUR 410.8 million. In the life-insurance segment the Group earned premiums written of EUR 123.7 million.

Profit (before taxes) amounted to EUR 17.8 million.

Due to damage caused by natural disasters, the combined ratio amounted to more than 100 percent.

Romania
In Romania Vienna Insurance Group reported a total of premiums written of EUR 396.6 million. The earnings-oriented restructuring of the portfolio entailed a decline in premiums.

Premiums written of EUR 326.5 million were registered in the non-life insurance segment. In the life insurance segment the Group achieved a significant increase by 17.5 percent, reporting premiums written of EUR 70.1 million.

Profit (before taxes) totalled EUR 25.9 million, surging by 56.1 percent.

Due to the development of damages, the combined ratio exceeded 100 percent.

Other CEE markets
The segment “Other CEE markets“ comprises the Group companies of Vienna Insurance Group in the following countries: Albania, Bulgaria, Croatia, Macedonia, Serbia, Turkey, Hungary, Ukraine as well as the three Baltic states.

In this segment Vienna Insurance Group recorded premiums written of a total of EUR 433.9 million and thus a growth by 3.6 percent. Increasing by 3.0 percent, premiums written of EUR 290.7 million were attributable to the non-life insurance segment. In the life insurance business the Group’s premiums written increased by 4.7 percent, totalling EUR 143.2 million.

Profit (before taxes) amounted to EUR 4.8 million.

Other markets
In Germany and Liechtenstein the Group companies achieved premiums written of EUR 211.3 million; this is a significant plus of 39.0 percent.

Profit (before taxes) amounted to EUR 15.9 million.

IV. CONFIRMATION OF THE PROFIT FORECAST
The management of Vienna Insurance Group confirms that the aspired increase in the profit before taxes of at least of 10 percent is likely to be achieved according to plans in the current financial year.

Another increase in the profit before taxes by about 10 percent is expected for the year 2011, while the volume of premiums is expected to rise within a single-digit percentage range. Prerequisites are, however, that the economic and legal framework will not deteriorate substantially and that damage arising from natural disasters will not show a dramatic development.

V. EXAMINING A BOND ISSUE
With an equity ratio of 12.6 percent and meeting capital adequacy requirements by more than 200 percent, the Group has an excellent financial base. To continue optimising the future-oriented equity base and capital structure, the Managing Board considers the possibility of issuing a subordinated bond.

Disclaimer:
This announcement serves information purposes in Austria and constitutes neither an offer to sell nor a solicitation to buy any securities. A public offer by VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe has not yet taken place. Any securities orders received prior to the commencement of the offer period will be rejected. If a public offer is made, a prospectus approved by the Austrian Financial Market Authority will be published in Austria which will be available free of charge at VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe, Schottenring 30, 1010 Vienna.

This announcement is not an offer for sale of securities in any jurisdiction where such an offer is illegal. The securities have not been registered under the U.S. Securities Act of 1933 as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from the registration requirements under the Securities Act. This announcement is not being issued in the United States and may not be distributed to U.S. persons or publications with general circulation in the United States.

This announcement is directed only at persons (i) who are outside the United Kingdom or (ii) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (iii) who fall within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Order (all such persons together being referred to as "Relevant Persons"). Any person who is not a Relevant Person must not act or rely on this announcement or any of its contents. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.