Please note: this is a translation; only the German version of this news release is legally binding.

Transcription

1 August 22, 2006 Please note: this is a translation; only the German version of this news release is legally binding. Vienna Insurance Group (Wiener Städtische Group) in the first half of 2006 (IFRS figures): Group's half year premiums to exceed EUR 3 billion mark for the first time Share of CEE companies in the Group's premiums already totaling approx. 35 percent, in property/casualty already nearly about 50 percent Group profit before tax increases by 14.4 percent, attaining EUR million "The first half of 2006 clearly demonstrates that the Vienna Insurance Group - by its consolidation and the strategic expansion of the Group companies as well as placing the focus on core business segments - continues to show strong signals of healthy growth. During the first six months of the current year, we increased our Group profits before tax by 14.4 percent to approx. EUR 143 million as compared to the same period of the previous year - despite the high number of claims with a volume of approx. EUR 96 million incurred due to the natural disasters that have occurred. We are also pleased with the continuing increase of the share of the relatively young life business in the CEE countries," CEO Günter Geyer comments on the positive half-year result. "The satisfactory results achieved in the course of business during the first half of the year support the forecast that Group profits before tax for the entire year will be approx. EUR 290 million." I. OVERVIEW OF KEY GROUP DATA FOR THE 1ST HALF OF 2006 * : In the first half of 2006, the Vienna Insurance Group achieved consolidated premiums written in the amount of EUR 3.03 billion; this is the first time that its half-year result exceeds the three-billion-euro limit. As compared to the same period of the previous year, the premium income thus rose by a total of 14.9 percent. Including other insurance participations, non-consolidated premiums written amounted to EUR 3.17 billion, i.e., rose by 13.4 percent. * As compared to the same period of the previous year, the following companies were included in the consolidated accounts for the first time in the first half of 2006: CPP, Cigna, Benefia Property, Cosmopolitan, Helios, Bulstrad, Omniasig, Royal Polska.

2 The Group also continued to increased its profit before tax. In the first half of 2006, it amounted to EUR million and thus surpassed the comparative value of the same period of the previous year by 14.4 percent. This result was achieved in spite of the increased expenses that were incurred in this accounting period due to damage caused by snow pressure and flooding. Furthermore, the figure for the comparable period of the previous year included profits realized from the sale of Investkredit and stakes in Porr in the amount of approx. EUR 45 million. On the other hand, the value of EUR 9.8 million from the sale of the non-profit residential building companies (gemeinnützige Wohnbaugesellschaften) was included for the first time. At 97.9 percent, the combined ratio after reinsurance (not including investment income) continues to be below the 100-percent mark despite the high number of claims due to flooding and snow pressure and is thus in compliance with the corporate goals. The financial result of the first half of 2006 amounted to EUR million, showing an increase of 18.2 percent as compared to the prior-year period. Although the capital markets were rather reserved, the Vienna Insurance Group was able to benefit from price gains due to its cautious and broadly diversified investment policy. The expenses for claims incurred increased by 16.5 percent to EUR 2.05 billion with payments due to damage caused by flooding and snow pressure in the amount of approx. EUR 96 million. The total investments of the Group rose from EUR billion (as of December 31, 2005) to EUR billion as of June 30, 2006 (plus 7.0 percent). II. DATA FOR GROUP FOR THE 1ST HALF OF 2006, IN TOTAL (CONSOLIDATED): With a total of premiums written of EUR 3.03 billion and a double-digit premium expansion of 14.9 percent, the Vienna Insurance Group successfully continued its dynamic growth in the first half of the current year. The CEE companies generated premiums written in the amount of EUR 1.06 billion, which constitutes an increase of 38.4 percent. The share in the Group's premiums is thus already as high as approx. 35 percent - after amounting to 31 percent at the end of The CEE companies contributed already as much as 47 percent to the volume of the Group's property and casualty business. In the Austrian companies, premiums written amounted to EUR 1.85 billion. This is an increase of 7.2 percent as compared to the same period of the previous year. In the other markets (Germany and Liechtenstein), premiums written in the amount of EUR million were earned

3 III. DATA FOR GROUP FOR THE 1ST HALF OF 2006, CLASSED BY SEGMENTS (CONSOLIDATED): 1. BUSINESS SEGMENT RESULTS Property/casualty insurance In the property/casualty segment, the Vienna Insurance Group was able to achieve a considerable increase in premiums in the first half of 2006, by 21.3 percent, to a total of EUR 1.72 billion. In the CEE markets, a premium volume of EUR million was achieved in that segment, which translates to a more than just dynamic growth of 39.7 percent. In Austria, the premium expansion in that segment was 8.8 percent, with premiums written amounting to EUR million. In the other markets (Germany and Liechtenstein), premiums written in the amount of EUR million were earned (a plus of 5.9 percent). Profit before tax in the property/casualty segment amounted to EUR million in the first half of 2006, thus falling by 15.3 percent compared to the same period of the previous year. The reason for this is the extraordinary profit gained from the sale of Investkredit, which is included in the figures for 2005 and most of which must be attributed to that segment. Life insurance Premiums written of the Vienna Insurance Group in the life insurance segment amounted to a total of EUR 1.16 billion in the first half of 2006 having grown by 8.1 percent. An impressive contribution to that figure was provided already by the Group companies in CEE, with a plus of 34.4 percent or an expansion to EUR million in premium income. The Austrian Group companies were able to increase premiums written by 6.3 percent to EUR million. The premiums from the CEE countries thus also contributed already more than 20 percent to the results in this particular sector which is still relatively young in these countries. In the other markets (Germany and Liechtenstein), premiums written amounted to EUR million. Profit before tax in the life insurance segment was up percent in the first half of 2006, rising to EUR million. Health insurance In the health insurance segment, the Vienna Insurance Group generated premiums written in the amount of EUR million, which translates to an increase of close on 3 percent. The health insurance business is still predominantly focused on the Austrian market. Health insurance continued to have a steady contribution to profits of EUR 8.84 million (profit before tax)

4 2. GEOGRAPHIC RESULTS Austria In the first half of 2006, the Vienna Insurance Group and its Austrian companies were able to generate a total of EUR 1.85 billion in premiums written. This translates to a 7.2 percent premium expansion. Profit before tax in Austria was EUR million, representing an increase of 5.8 percent compared to the comparable period of the previous year. Czech Republic In the Czech Republic, the Vienna Insurance Group achieved premiums written in the amount of EUR million. As compared to the first half of the previous year, this is an increase by 22 percent. In spite of the substantial extraordinary burden caused by the bad weather disasters with claims payments due to floodings in the amount of EUR million, the Czech Group companies were able to generate a total profit before tax of EUR million. Slovakia In Slovakia, where the premium volume rose by 9.0 percent, it was likewise possible to keep up a growth that was markedly better than the market. In this country, the Vienna Insurance Group achieved premiums written in the amount of EUR million. The profit before tax of all Slovak Group companies totaled EUR million, i.e., it was up by a considerable 18.7 percent. Other CEE In the other CEE countries, double-digit increases were achieved on almost all markets. The first half of 2006 also turned out a marked success for the Group companies in Poland, Bulgaria and Serbia as regards their organic growth. A total of EUR million was generated in premiums written. The Vienna Insurance Group has therefore achieved an outstanding growth in premiums of percent. Profit before tax also increased, rising by over 160 percent to EUR 4.91 million in the aggregate. This was the first time that a positive figure was posted in the half-year results on that count. The term "other CEE" as used by the Vienna Insurance Group includes Bulgaria, Croatia, Poland, Romania, Serbia and Hungary. The Georgian, Ukrainian and Belarusian enterprises are not yet included in the consolidation scope of the Group. Other markets In its other markets (Germany and Liechtenstein), the Vienna Insurance Group was able to generate premiums written in the amount of EUR million. Profit before tax of the Group companies amounted to EUR 6.23 million. This is an increase of 12.3 percent. UNIQUE STRATEGY OF MARKET PROXIMITY The Vienna Insurance Group is doing business in 17 countries and, overall, is the leading Austrian insurance group in Central and Eastern Europe. In Austria, Romania, the Czech Republic, Slovakia, and Bulgaria, the Group ranks first or second, respectively, and is among the top five in Croatia, Serbia and Georgia (Data: 1 st quarter 2006 and/or 31 December 2005). CEO Günter Geyer: "Our unique strategy of striving for proximity to the local markets, which makes us so strong in distribution, is an important cornerstone of our continuing business success. As we are - 4 -

5 adopting a uniform brand image by continuing to use the excellently established local trademarks of the Group companies under the international umbrella of the Vienna Insurance Group, we are banking on the proximity which is needed in the insurance business, adding our international competence, experience and strength as a big Central European insurance group. This way we can successfully continue existing distribution relationships in our markets and put the focus of our activities on continuing the expansion of the respective companies. In doing so, the Vienna Insurance Group - in contrast to the usual international standardization - is most successful in pursuing an independent distribution concept." TARGETS The result of the first half of 2006 shows that the Vienna Insurance Group is continuing on its successful path of consolidating the Group companies and purchasing additional enterprises that fit our strategy. The Group's targeted profit before tax of approx. EUR 290 million for the entire year 2006 is thus corroborated, i.e. an increase of more than 20 percent as compared to the prioryear period. The Vienna Insurance Group is the leading Austrian insurance group in Central and Eastern Europe. Among the international competitors, the Vienna Insurance Group ranks an excellent second in the region. Outside its Austrian home market, the Vienna Insurance Group operates (through subsidiaries) in Belarus, Bulgaria, Croatia, the Czech Republic, Germany, Georgia, Hungary, Liechtenstein, Poland, Romania, Russia, Serbia, Slovakia and Ukraine. Branch offices are maintained in Italy and Slovenia. Alongside WIENER STÄDTISCHE Versicherung AG Vienna Insurance Group, the Group in Austria includes Donau Versicherung, Bank Austria Creditanstalt Versicherung and Union Versicherung. The Group also has ownership interests in Wüstenrot Versicherung and Sparkassen Versicherung. In Austria, Bulgaria, the Czech Republic, Slovakia and Romania, the Vienna Insurance Group ranks first or second in the market. Contact: Wiener Städtische Versicherung AG Vienna Insurance Group Investor Relations, 1010 Vienna, Schottenring 30 Thomas Schmee Tel.: Fax: mailto:t.schmee@staedtische.co.at Nina Higatzberger Tel.: Fax: mailto:n.higatzberger@staedtische.co.at Wiener Städtische s Investor Relations News are also available at under Investor Relations > IR News - 5 -

6 Consolidated Balance Sheet (IFRS) 30 June 2006 Assets /- % A. Intangible assets 443, , B. Total investments 16,180,258 15,162, C. Unit- and index-linked investments 1,936,157 1,762, D. Reinsurers' share in technical provisions 986, , E. Receivables 1,008, , F. Deferred tax assets 19,277 11, G. Other assets 197, , H. Cash and cash equivalents 170, , Total Assets 20,942,412 19,441, Equity and Liabilities /-% A. Shareholders' equity 2,055,298 2,059, B. Subordinated liabilities 413, , C. Technical provisions 13,806,881 13,086, D. Unit- and index-linked technical provisions 1,875,505 1,729, E. Non-technical provisions 824, , F. Liabilities 1,800,373 1,074, G. Deferred tax liabilities 88, , H. Other liabilities 77,444 82, Total equity and liabilities 20,942,412 19,441, Consolidated Income Statement (IFRS) 1 January June M M /- % Gross premiums written 3, , A. Net earned premiums 2, , B. Net investment income C. Other income >100.0 D. Expenses for claims incurred -2, , E. Operating expenses F. Other expenses Income from shares in affiliated and associated companies Profit before taxes Taxes Profit for the period Thereof attributable to owners of minority interests Net profit after minorities

7 Segment Reporting 1 January June 2006 Split by Business Segments: P&C Life Health Total 6M M M M M M M M 2005 Gross written premiums 1, , , , , ,635.5 A. Net earned premiums 1, , , , ,079.9 B. Net investment income C. Other income D. Expenses for claims incurred , , ,756.0 E. Operating expenses F. Other expenses G. Profit before tax Split by Regions: Austria Czech Republic Slovakia 6M M M M M M 2005 Gross written premiums 1, , A. Net earned premiums 1, , B. Net investment income C. Other income D. Expenses for claims incurred -1, , E. Operating expenses F. Other expenses G. Profit before tax Other CEE Other Total 6M M M M M M 2005 Gross written premiums , ,635.5 A. Net earned premiums , ,079.9 B. Net investment income C. Other income D. Expenses for claims incurred , ,756.0 E. Operating expenses F. Other expenses G. Profit before tax including income from associated and affiliated companies - 7 -