Erste Bank JPMorgan Merrill Lynch International

through the sales networks of MSK and the Bank of Moscow, which has offices in Russia from
Kaliningrad to Vladivostok. Approximately 10,000 policies were written in the first few months. The
Vienna Insurance Group also holds 15% of the Closed Joint-Stock Medical Insurance Company
“Solidarnost Ollya Zhizni” (SoVita) and Insurance Joint-Stock Company “Standart-Rezerv”, two insurance
companies that were part of KFS until 2006. These two companies are also majority owned by
the Bank of Moscow. SoVita is purely a health insurance company currently specializing predominantly
in mandatory medical coverage. The Vienna Insurance Group believes that there is considerable
potential in the Russian insurance market due to its size and the large amount of pent-up demand for
insurance services.
Serbia
The Vienna Insurance Group operates through its subsidiary, Wiener Städtische Osiguranje a.d.o.
Beograd, in both the life and non-life areas of the Serbian market. Wiener Städtische Osiguranje
a.d.o. Beograd received its license from the competent finance ministry in 2003. As of December 31,
2007, Wiener Städtische Osiguranje a.d.o. Beograd was operating in the Serbian market with 13
branches. According to statistics from the Serbian National Bank, in the first three quarters of 2007,
Wiener Städtische Osiguranje a.d.o. Beograd was ranked fourth in the Serbian market, as measured
by gross premiums written. Wiener Städtische Osiguranje a.d.o is focusing on the core area of Serbia
and is not active in Kosovo. Following restrictive license revocations in 2006 and the privatization of
DDOR in 2007, the Serbian insurance market is now characterized by the entry of a number of new
players.
Turkey
In June 2007, the Vienna Insurance Group acquired a 74.3% share in Ray Sigorta A.S. through
its holdings in TBIH Financial Services Group N.V. Ray Sigorta is purely a non-life insurance company
with a market share of approximately 2.7%. The company was founded in 1958 and specialized in
transportation insurance. In 1992, Ray Sigorta was privatized and is currently listed on the Istanbul
Stock Exchange. The majority of premiums are still generated by motor and casualty insurance.
Toward the end of 2007, Ray Sigorta reached an agreement with Petrol Ofisi (OMV), which has the
largest network of petrol stations in Turkey, allowing Ray Sigorta to use the network to sell its motor
insurance products.
The Turkish insurance market holds considerable potential due to the size and vitality of its
economy and the large pent-up demand for insurance services.
Ukraine
In the fourth quarter of 2004, the Vienna Insurance Group entered the Ukrainian insurance
market by acquiring a participating interest in the insurance company Geschlossene Aktiengesellschaft
Versicherungsgesellschaft “Jupiter” (Jupiter) AG, a life insurance company. In 2005, Wiener
Städtische AG acquired majority shares in the Ukrainian insurance company Versicherungs AG
Kniazha AG (Kniazha). At the beginning of 2007, the Vienna Insurance Group increased its share in
Kniazha from just under 50% to 80%. In 2006, it acquired a majority stake in IC Globus Uzhgorod
(Globus), a non-life insurance company founded in 1994. Kniazha operates exclusively in the property
insurance area (primarily in motor vehicle third-party liability insurance) and its network of insurance
agents and branches provide it with representation throughout Ukraine. Globus operates in the
property, health and casualty areas, and also has a widespread distribution network covering the
entire country. 2007 was a dynamic year for Globus with several key events, which sustained its
position in the Ukrainian market. The regional network of branches was expanded, the sale of
insurance products intensified, public relations were enhanced and its information technology was
modified. Jupiter is a life insurance company. In November 2007, TBIH Financial Services Group N.V.,
which is majority owned by the Vienna Insurance Group, acquired a 62% stake in Ukrainska
Strakhova Grupa, subject to regulatory approvals which were received in February 2008. Aside from
motor vehicle liability insurance, that company concentrates on selling products in the collision
insurance segment.
In March 2006, through its majority shareholding in TBIH, the Vienna Insurance Group held a
50% interest in UPIH. As part of the restructuring of the TBIH holdings, VAB Bank (a Ukrainian bank
that held interests in VAB Insurance, VAB Life Insurance and VAB Re Insurance through TBIF, a
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