Erste Bank JPMorgan Merrill Lynch International

Insurance Group’s net loss ratio in Austria in fiscal years 2005 to 2007 in direct business are set forth
in the table below:
Fiscal year ended
December 31,
Net loss ratio 2007 2006
(in %)
2005
Vienna Insurance Group Austria
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.6 67.8 67.9
Collision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.5 71.1 73.1
Passenger accident . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.0 17.0 10.5
Approximately two-thirds of Wiener Städtische AG’s gross premiums written from the motor
vehicle segment result from the liability insurance business and approximately one-third results from
collision and passenger accident insurance. DONAU’s ratio of liability insurance premiums to collision
and passenger insurance premiums is approximately 4:3. The growth rate for the motor vehicle class
of business is generally above the market growth rate. While premiums for the motor vehicle class in
Austria declined slightly in 2007 (Source: Internal analysis based on preliminary data 2007 of the
VVO), gross premiums written for the Vienna Insurance Group in Austria grew by over 1.5%. This
growth resulted primarily from the growth in insured vehicles and only to a small extent from a rise in
the average premium per risk. Regardless of changes in premiums, the Vienna Insurance Group
seeks to define its motor vehicle insurance products not just by a price that adequately reflects the
risk but also by the quality and efficiency of its claims handling.
Accident Insurance
Private accident insurance is supplemental to statutory accident insurance, which provides
protection only in the occupational area and, therefore, only applies to persons who are employed.
Accidents occurring during uninsured leisure time represent the majority of accidents in accident
statistics. In 2006, about 655,000 accidents occurred outside the occupational area, representing
approximately 78% of total recorded accidents (Source: Curatorship for Transportation Safety, Statistics
on Leisure Time Accidents in 2006). The financial consequences of such accidents can be
covered with private accident insurance.
Accident insurance products are defined specifically for certain target groups, which include:
(i) individuals (adults or children), (ii) families and (iii) groups (associations, businesses, fire
departments).
Accident insurance offers the following coverage:
Permanent disability: The most important element is the endowment payment in the event of
permanent disability. The insurance payment is determined based on the insured amount, the
degree of permanent impairment, and the additional benefits (using sliding scale) agreed upon
by contract. Sliding scale payments enable a higher level of coverage for serious accidents.
Accident benefits: Accident benefits are paid for life (in addition to an endowment payment)
and cover the additional monthly financial burden and/or compensate for the loss of income
suffered due to the accident.
Accident expenses: Accident expense insurance covers the costs of therapeutic treatment for
accidents (rehabilitation, physiotherapy treatments to reduce the consequences of the accident)
as well as salvage and retrieval.
Accidental death: This insurance offers endowment payments in the event of accidental death
in order to provide financial coverage for the family or to cover obligations that have been
incurred (credit insurance).
The Vienna Insurance Group’s net loss ratio with respect to accident insurance in Austria
averaged approximately 60.5% between 2005 and 2007. While the net loss ratio was stable in fiscal
years 2005 and 2006, the increase in fiscal year 2007 was due to an anti-cyclical increase of larger
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