Erste Bank JPMorgan Merrill Lynch International

The Vienna Insurance Group depends to a great extent on the support of complex IT systems,
which could be considerably impaired by internal and external factors
The Vienna Insurance Group is dependent on the functioning of an efficient IT system (hardware
and software). IT systems are susceptible to a number of problems, such as computer viruses,
hackers, damage to critical IT centers or hardware defects. The partial or complete failure of the
Vienna Insurance Group’s IT systems could lead to a significant disruption of business processes, a
temporary shutdown of business operations, to claims for damages and/or a loss of customers. See
“Business – Information Technology”.
The Vienna Insurance Group is currently in the process of developing a Group-wide SAP system.
Once it is implemented on a Group-wide basis, there may still be disruptions of business processes,
loss of data and problems with data retrieval and other malfunctions and risks. Should such events or
similar events occur and lead to damages or lost revenues, there could be a material adverse effect
on the Vienna Insurance Group’s assets, financial position and earnings.
A change of management could result in a loss of know-how
The financial results of the Vienna Insurance Group are to a significant degree dependent on the
existing market and insurance knowledge of its management. The loss of executives or of employees
in key positions could materially adversely affect the assets, financial position and earnings of the
Vienna Insurance Group if it is not possible to fill the vacant positions with equally qualified executives
within an appropriate time period.
The Vienna Insurance Group can give no assurance that it will be able to meet its established
financial targets
The Vienna Insurance Group continuously sets financial targets which, based on factors including
the present market and insurance regulatory conditions, appear to be achievable. Many factors, over
some of which the Vienna Insurance Group has no influence, may have a material adverse effect on
the ability of the Vienna Insurance Group to achieve these targets. Currently unknown circumstances
or factors may arise which the Vienna Insurance Group has not considered and which could prevent
the attainment of the Group’s targets. A description of the factors that could put the attainment of
these targets at risk can be found in the section entitled “General Information – Forward-Looking
Statements”.
Regulatory conditions for the Vienna Insurance Group can change; non-compliance with
regulatory requirements could result in the imposition of sanctions or can have other
adverse effects
Wiener Städtische AG and its most important subsidiaries are insurance companies and are
subject to insurance regulations within and outside of Austria. Among other things, such regulations
include rules concerning:
equity capital of insurance companies and insurance groups;
permissibility of using capital assets to secure actuarial reserves;
licenses of the various Group companies of the Vienna Insurance Group;
marketing activities and the sale of insurance contracts; and
withdrawal rights of policyholders.
New regulations on solvency (“Solvency II”) are currently being discussed at the EU level by
insurance companies operating in the EU. However, the effects of these framework conditions cannot
be assessed yet, as work on the drafts is not sufficiently advanced. Changes to the general legal
framework can require restructurings and accordingly cause higher costs or reduce the income
prospects of the Vienna Insurance Group, which could have a material adverse effect on the assets,
financial position and earnings of the Group. See “Insurance Supervision”. If a Group company were
to violate regulatory requirements in a country, there is a risk that the regulatory agency in the affected
country could issue injunctions effecting, or impose fines on, the Vienna Insurance Group and its
managers. Such injunctions could have detrimental effects on the ongoing business activity of the
Vienna Insurance Group and in the most extreme case could lead to the termination of further
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