Vienna Insurance Group in the 1st to 3rd Quarter of 2011

“Vienna Insurance Group continues its sustainable development even in a difficult environment. This fact is reflected in the A+ rating with a stable outlook by Standard & Poor´s. To proceed on this path successfully, we have already taken the next steps”, stated Günter Geyer, CEO of Vienna Insurance Group. “By entering the market of Bosnia and Herzegovina and making another acquisition in Albania, we have rounded off our portfolio of markets and insurance companies."

I. OVERVIEW OF KEY GROUP DATA FOR THE FIRST THREE QUARTERS OF 2011 (in accordance with IFRS)
In the first three quarters of the current year Vienna Insurance Group increased its premiums written (consolidated) by 4.0 percent to a total of EUR 6.8 billion, compared to the same period of the previous year.

The Group profit (before taxes, consolidated) went up by 9.6 percent to a total of EUR 414.1 million, compared to the first three quarters of 2010.

The combined ratio of the Group after reinsurance (excluding investment income) amounted to 97.2 percent – after 98.2 percent in the respective period of the previous year.

The investments of the Group rose by about EUR 370 million including liquid funds, totalling approximately EUR 29 billion as of 30 September 2011. The financial result amounted to EUR 798.6 million. This figure reflects, inter alia, the impact of the write-down to a value of 50 percent on the portfolio of Greek government bonds. Moreover, the portfolio of Italian government bonds was written down by ten percent.

II. GROUP DATA BY SEGMENTS FOR THE FIRST THREE QUARTERS OF 2011 (consolidated)

Property/casualty insurance
In the property/casualty insurance segment the Group companies of Vienna Insurance Group reported a total of premiums written of EUR 3.6 billion; this corresponds to an increase by 7.5 percent compared to the same period of the previous year.

Life insurance
In the life insurance segment the Group companies of Vienna Insurance Group earned premiums of about EUR 2.9 billion (minus 0.4 percent). Regular direct premiums increased by 4.2 percent, while single-premiums (direct premiums) declined by 6.1 percent, which was mainly due to a change in legislation concerning the minimum lock-up period in Austria.

Health insurance
With premiums written of EUR 269.9 million, Vienna Insurance Group achieved an increase of 9.8 percent in the health insurance segment, which may be attributed predominantly to the consolidation of the Georgian Group companies.

III. GROUP DATA BY REGIONS FOR THE FIRST THREE QUARTERS OF 2011 (consolidated)

Austria
In the first three quarters of 2011 the Group companies of Vienna Insurance Group in Austria reported premiums written of EUR 3.1 billion (minus 2.2 percent). In the property/casualty insurance premiums written rose by 10.2 percent to a total of more than EUR 1.4 billion. In the life insurance segment premiums dropped by 12.4 percent to about EUR 1.5 billion – as a consequence of changed legislation on the minimum lock-up period for single-premiums. In the health insurance segment the Group earned premiums written of EUR 252.5 million, corresponding to a plus of 2.7 percent.

Growing sharply by 14.8 percent, profit (before taxes) amounted to EUR 207.3 million in the first three quarters of 2011.

The combined ratio reached a very good level of 94.6 percent, improving by 2.3 percentage points compared to the same period of the previous year.

Czech Republic
In the first three quarters of 2011 the Group companies in the Czech Republic earned a total of premiums written of EUR 1.4 billion following an increase by 8.9 percent.

In the non-life insurance segment premiums written went up by 2.9 percent to EUR 781.6 million. In the life insurance segment premiums written increased very significantly by an excellent 17.4 percent to a total amount of EUR 623.4 million.

Profit (before taxes) rose steeply by 34.5 percent to EUR 139.5 million (compared to the corresponding prior-year period).

The combined ratio stood at an excellent 92.5 percent, dropping by 2.6 percentage points from the level of the same period of the previous year.

Slovakia
The Group companies in Slovakia succeeded in increasing premiums written by 4.2 percent to EUR 498.7 million.

Based on a plus of 3.3 percent, premiums written in the non-life insurance segment amounted to EUR 239.7 million. The life-insurance segment reported a strong growth of 5.1 percent in premiums written to a total volume of EUR 259.0 million.

The Vienna Insurance Group companies achieved in the first three quarters of 2011 a market share of 31.9 percent and thus consolidated their position as the number 1 in the Slovak insurance market.

Profit (before taxes) amounted to EUR 42.6 million; this corresponds to a significant growth by 46.8 percent compared to the same period of the previous year.

The combined ratio was 93.9 percent.

Poland
Thanks to a strong increase by 39.0 percent, the Group companies of Vienna Insurance Group in Poland achieved a total volume of premiums written of EUR 742.8 million.

In the non-life insurance segment premiums written went up by 15.1 percent to EUR 473.0 million. Increasing sharply by 118.1 percent, the life insurance segment earned premiums written of EUR 269.8 million.

Profit (before taxes) rose by 76.0 percent to a total of EUR 31.2 million (compared to the same period of 2010).

The combined ratio was successfully decreased by more than 4 percentage points to approximately 100 percent.

Romania
The economic situation in Romania has been under the impact of the government’s austerity measures and the consequently subdued cyclical development. This affected also the insurance sector, in particular the motor leasing business.

The only small increase of premiums by 0.6 percent to a total of EUR 398.9 million as well as the loss of EUR 8.8 million – resulting from a write-down on premiums receivable, the downward trend in the motor leasing business and the unfavourable trend of claims in the motor insurance business – must also be seen against this background.

The non-life insurance segment reported a slight decline (minus 1.3 percent) of premiums written to EUR 322.3 million, which was also due to the downward trend of the motor leasing business. The increase of premiums written by 9.3 percent to EUR 76.7 million was a welcomed development in the life insurance segment.
The combined ratio exceeded 100 percent.

Remaining markets
The segment remaining markets comprises the countries Albania, Bulgaria, Germany, Estonia, Croatia, Latvia, Liechtenstein, Lithuania, Macedonia, Serbia, Turkey, Ukraine, Hungary and Georgia.

In this segment the Group companies of Vienna Insurance Group earned premiums written of EUR 634.2 million. In the non-life insurance segment premiums written grew sharply by 14.8 percent to EUR 396.8 million, while the life insurance segment recorded a decline to EUR 237.4 million – which has been mainly due to the development of single-premiums in Liechtenstein.

In the first three quarters of 2011 an operating result of EUR 29.8 million was reported in this segment. In accordance with the very prudent policy of Vienna Insurance Group, insurance portfolios are being amortised in this segment. By taking into account this effect, the result (before taxes) amounts to EUR 2.2 million.

The combined ratio narrowly surpassed 100 percent.

IV. OUTLOOK
The Management of Vienna Insurance Group has been striving for many years to avoid volatilities of premiums and of the profit as well as to ensure the sound capitalisation of the Group. This will remain a key objective of the Group in the near future, particularly in view of the current global economic environment as well as the European economic and currency situation.