Erste Bank JPMorgan Merrill Lynch International

The calculations for 31 December 2007 and 31 December 2006 are based on the following
assumptions:
2007 2006
Interest rate . . . . . . . . . . . . . . . . . . . 5.0% 4.5%
Pension and salary increases . . . . . . 3.0% 2.5%
Labour turnover rate . . . . . . . . . . . . . Age-dependent 0% - 7% Age-dependent 0% - 7%
Retirement age, Woman . . . . . . . . . . 62+ transitional arrangement 62+ transitional arrangement
Retirement age, Men. . . . . . . . . . . . . 62+ transitional arrangement 62+ transitional arrangement
Life expectancy . . . . . . . . . . . . . . . . . according to AVÖ 1999-P for
employees
according to AVÖ 1999-P for
employees
For all employment relationships in Austria which began after 31 December 2002, Vienna
Insurance Group pays monthly 1.53% of earnings into an occupational employee pension fund, where
the contributions are invested in an account of the employee and paid out or passed on to the
employee as a claim when employment ends. In Austria the Vienna Insurance Group’s obligation is
strictly limited to payment of these amounts. As a result, no provision needs to be set up for this
defined contribution plan.
Other non-underwriting reserves
Other non-underwriting reserves are recognised if Wiener Städtische has a de jure or de facto
obligation to a third party resulting from a past event, it is probable that this obligation will lead to an
outflow of resources, and a reliable estimate can be made of the amount of the obligation.
The reserves are recognised at the value representing the best possible estimate of the
expenditure needed to fulfil the obligation. If the present value of the reserve calculated using a
commercial rate of interest differs significantly from the nominal value, the present value of the
obligation is recognised.
The other non-underwriting reserves item also includes personnel reserves other than the
reserves for pensions and similar obligations. These relate primarily to reserves for unused vacation
and anniversary bonus obligations. Anniversary bonus obligations are valued using the calculation
method described for post-employment benefit obligations and the same calculation parameters. The
corridor method is not used.
(Subordinated) liabilities
As a rule, liabilities are valued at amortized cost of acquisition. This also applies to liabilities
arising from financial insurance contracts.
Net earned premiums*
As a rule, deferred premiums (unearned premiums) are determined on a pro rata basis according
to time. No deferral of unit- and index-linked life insurance premiums is performed, since the full
amount of the premiums written in the reporting period is included in the calculation of the unit- and
index-linked life insurance underwriting reserve. The change in the cancellation reserve is also
recognised in net earned premiums.
Expenses for claims and insurance benefits
All payments to policyholders arising from loss events, direct claims handling expenses, and
internal costs attributable to claims handling are recognised in expenses for insurance claims.
Expenses for loss prevention are also recognised in this item. Expenses for insurance claims are
reduced by the income gained from using existing contractual and statutory avenues of recourse (this
applies in particular to property and casualty insurance). Changes in underwriting reserves, except for
the change in the cancellation reserve, are also recognised in the expenses for insurance claims item.
* The exception rule of § 81 o par. 6 VAG was used.
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