Erste Bank JPMorgan Merrill Lynch International

Health insurance products are marketed in a meaningful way only by Wiener Städtische AG in
Austria. The private health insurance primarily offers benefits supplementing the mandatory Austrian
social security insurance.
In life insurance, the Vienna Insurance Group offers a variety of risk (such as classic life
insurance products), savings and pension products (annuity insurance, endowment insurance policies
and various forms of unit- and index-linked products). There is a trend to unit-linked and index-linked
products and in Austria the government-subsidized private pension plan.
Strategy
For a discussion of the risks in connection with the strategic objectives of the Vienna Insurance
Group, see “Risk Factors”.
The Vienna Insurance Group’s primary goal is to achieve long-term, steady growth in premiums
and profit. Based on this goal, the Vienna Insurance Group has two core strategies. The first core
strategy is to further sustain its solid position in Austria, which has an insurance penetration below the
average for the Western European countries, especially in life insurance. In particular, the reorganization
of the social insurance system and the associated expansion of private insurance are expected to
open up new business opportunities in the coming years. For this, the Vienna Insurance Group
primarily relies on its well-established distribution channels and plans to continuously expand them for
the benefit of the consumer. The second core strategy is to expand selectively in the dynamic growth
markets in the CEE region. In its Core CEE markets, the Vienna Insurance Group strives to be at
least one of the three largest insurance companies in each country. For the further expansion of its
activities in the CEE region, the Vienna Insurance Group relies on an intensive market observation
process in which the existing subsidiaries with their local contacts play an integral role. The Group’s
growth into the CEE region is based on the current undersupply of high-quality insurance services in
the region. The region’s dynamic economic development results in a need for insurance services both
in the corporate and private customer sectors. The following management principles underlie the two
core strategies of Vienna Insurance Group:
Think globally – act locally. The Group’s goal is to combine the local experience of its
employees with the quality standards of the Group. Newly acquired companies continue to
operate under the existing, already locally established brand names, which are known to
customers.
Local roots. Local management, familiar with the market environment prevailing in the individual
countries from many years of experience is predominantly responsible for the management
of the individual Group companies.
Support by headquarters. The Group supports the local companies in key business areas in
order to obtain synergy effects and to ensure for a group wide risk management for risk
containment reasons regarding reinsurance, investments, etc.
Diversification. The Group’s geographic diversification, with activities in 23 countries, should
minimize risks resulting from a worsening of the insurance environment in individual countries.
In addition, the Vienna Insurance Group sets medium- and short-range financial targets. The
most important of these targets for the 2008 to 2011 planning horizon include:
More than EUR 12 billion in gross written premiums in 2011;
Earnings before taxes in 2011 of approximately EUR 1.05 billion;
Maintenance of a net combined ratio in property and casualty insurance of less than 100%;
Return on equity before taxes (RoE) of approximately 20% in 2011; and
Dividend pay out ratio of at least 30%.
All financial targets have been set on the assumption of the acquisition of the Target Companies
and the disposition of UNITA and a substantial interest of BA-CA Versicherung. These are financial
targets and not forecasts, predictions or guarantees. The Vienna Insurance Group believes that these
targets are reasonable under present market conditions. However, the Vienna Insurance Group cannot
guarantee that it can attain these targets. Many factors over which the Vienna Insurance Group has
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