Erste Bank JPMorgan Merrill Lynch International

grade bonds are made only in individual cases and only upon a decision to this effect by the
Management Board. The goal is to achieve the greatest possible diversification among individual
issuers, avoid accumulation risks, ensure good average creditworthiness, control foreign currency
effects and make the majority of investments in middle to long-term maturities.
As a result of the very conservative risk politics of the Vienna Insurance Group and the avoidance
of credit derivatives and complex credit structures, the exposure of the Vienna Insurance Group to the
structured credit market is lower than 0.5% of total capital assets.
The following table sets forth the bond portfolio, managed by Vienna Insurance Group, of the
Austrian companies in the Group as of December 31, 2007 and 2006, broken down by market value.
Management of the bond portfolio within the Vienna Insurance Group is performed in part by the
security investment departments of the insurance companies and in part by the investment company
Ringturm KAG. The investment guidelines set by the Strategic Investment and Risk Committee
(Securities) and the Tactical Investment Committee are carried out through the respective funds and
portfolios. In the selection of pension funds not managed by the Group, the criteria and principles
applied in the selection process are consistent with those applied within the Group.
Fiscal year ended
December 31,
2007 2006
(in %)
Standard & Poor’s Rating (1)
AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.8 18.3
AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.1 31.2
A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.7 43.2
BBB.......................................................... 5.8 6.7
BB........................................................... 0.4 0.4
B ............................................................ 0.2 0.2
(1) Or equivalent rating classes of other rating agencies (Moody’s, Fitch).
The composition of the bonds of the Vienna Insurance Group’s portfolio and their average rating
has not materially changed since December 31, 2007.
The following table sets forth the remaining maturities as of December 31, 2007 and 2006 for the
bonds in the portfolio described above. All bonds, including, for example, floating rate notes and
callable bonds, are classified according to their longest possible remaining maturity.
Fiscal year ended
December 31,
2007 2006
(in %)
Remaining maturity of up to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.1
Remaining maturity from one to three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 3.8
Remaining maturity from three to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 8.7
Remaining maturity from five to seven years. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7 11.9
Remaining maturity from seven to ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.1 20.8
Remaining maturity from ten to fifteen years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.9 20.9
Remaining maturity over fifteen years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.0 31.8
Loans
As of December 31, 2007, the Vienna Insurance Group’s loan portfolio had a book value of
EUR 1,187.4 million. Investments in loans and credits are used to create long-term positions for the
insurance business, and are made only in instruments with top quality creditworthiness, particularly
those from public institutions and non-profit housing construction companies, as well as mortgage
loans. Overall, the loan portfolio is decreasing in significance relative to the Vienna Insurance Group’s
total investment portfolio because inviting bids on loans has become less important to the Austrian
federal government and local authorities. Public institutions are instead increasingly raising needed
financing by issuing bonds.
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