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subsidiary of TBIH) transferred its interests in the VAB companies to UPIH, causing them to become
direct subsidiaries of UPIH. In March 2008, the Vienna Insurance Group, through its shareholding in
KFS, increased its interest in UPIH to 62% and, as a result, increased its indirect holdings in VAB
Insurance, VAB Life Insurance and VAB Re Insurance.
UPIH holds a 99.98% interest in each of the private joint-stock companies, VAB Insurance, VAB
Life Insurance and VAB Re Insurance. VAB Insurance is active primarily in the motor vehicle liability
insurance segment with gross premiums of approximately EUR 8.3 million in fiscal year 2007. VAB
Life Insurance recorded gross premiums of approximately EUR 0.6 million in fiscal year 2007. VAB Re
Insurance primarily sells reinsurance in the transit insurance segment and recorded gross premiums
of approximately EUR 5 million in fiscal year 2007. The retirement pension insurance company VAB
Pension has approximately 105,000 members.
Hungary
The Vienna Insurance Group operates in the life and non-life areas in Hungary through its
subsidiary Union Vienna Insurance Group Biztosítóz Rt. (Union Hungary). From the viewpoint of the
Vienna Insurance Group there were no attractive acquisition opportunities in the Hungarian insurance
market over the last few years. Consequently, the Vienna Insurance Group decided to invest in the
organic growth of Union Hungary. Its entry into the motor vehicle insurance segment in 2004 was one
of the primary reasons why the company was able to grow. In terms of gross premiums written, Union
Hungary was ranked ninth in the market for fiscal year 2007 (Source: Internal analysis based on
preliminary data 2007 of the Hungarian Insurance Association). Recently performance improvement
measures were introduced, primarily in the areas of claims management and general work processes.
In recent years, there were positive developments particularly on the life insurance side in connection
with the single-premium product “Smaragd”, a fund-linked life insurance plan in which Union Hungary
raises customers’ premium payments through a credit arrangement.
In fiscal year 2007, the growth in premiums in the Hungarian insurance market was 12.0% (2006:
21.0%), with premium revenues growing by 2.9% in the non-life area (2006: 6.6%) and 20.8% in the
life area (2006: 39.3%). In contrast, Union Hungary recorded growth of 38.6% in total gross written
premiums (2006: 20.9%), with premiums growing by 19.3% in the non-life area (2006: -20.3%) and
57.8% in the life area (2006: 148.5%). (Source: Internal analysis based on preliminary data 2007 of
the Hungarian Insurance Association).
Belarus
In 2002, the Vienna Insurance Group entered the Belarus insurance market by acquiring an
interest in the Joint Belarus-Austrian Insurance Company Kupala (Kupala). In July 2005, ZASO
Victoria (property insurance) was acquired, with the objective of developing and expanding the
distribution of insurance products (household insurance, small and medium business insurance)
through Prior Bank (Raiffeisen). This partnership was formed and further expanded in 2006. The
Vienna Insurance Group is the only Western insurance company represented in the Belarus market.
Description of the Individual Group Companies in the Other Markets
Germany
Wiener Städtische AG operates in the Federal Republic of Germany through its wholly-owned
subsidiaries, InterRisk Versicherungs AG Vienna Insurance Group and InterRisk Lebensversicherungs
AG Vienna Insurance Group. In contrast to the insurance markets in the CEE region, the German
insurance market is relatively saturated, and the Vienna Insurance Group holds only a small market
share. InterRisk Versicherungs-AG concentrates primarily on casualty and selected property insurance
products. On the life insurance side it concentrates primarily on risk insurance and disability insurance.
Both InterRisk companies sell their products through independent brokers and multiple agents.
Liechtenstein
Wiener Städtische AG has been operating in Liechtenstein since 2000 through its subsidiary,
Vienna-Life Lebensversicherung AG Vienna Insurance Group. The majority of Vienna-Life Lebensversicherung
AG Vienna Insurance Group’s gross earned premiums are generated from unit-linked and
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