Erste Bank JPMorgan Merrill Lynch International

Premiums written/earned
Premiums written represent all premium revenues in the relevant period under review. Premiums
earned represent that part of the premiums written used to provide insurance coverage in that period.
In the case of life insurance products where the policyholder carries the investment risk (e.g., variable
annuities), only that part of the premiums used to cover the risk insured and costs involved is treated
as premium income, to the extent that such contracts are not insurance contracts within the meaning
of IFRS and are excluded from profit distribution.
Provisions of unearned premiums
The portion of premiums written that is to be recognized as income in future years. As a rule, the
calculation is performed – individually and precisely to the day – for every insurance contract.
Recognized premiums written/earned premiums
The recognized premiums written correspond to the portion of the premiums written pertaining to
the respective fiscal year. The portions thereof that pertain to the insurance coverage for the fiscal
year are the earned premiums. Of the contributions for life insurance products where the customer
takes on the investment risk, such as fund-linked life insurance, only those calculated portions are
recorded as premiums received that cover the risks and the costs, to the extent that these contracts
are not insurance policies within the meaning of IFRS 4 and are also excluded from profit
participation.
Reinsurance
Reinsurance refers to an insurance company insuring a portion of its risk with another insurance
company.
Result from ordinary operations
The profit/loss for the year before taxes from activities that a company undertakes as part of its
ordinary business. It does not include extraordinary items, such as income or expenses pertaining to
events or transactions that clearly differ from the company’s ordinary activities and cannot be assumed
to recur frequently or regularly.
Retention
Calculated amounts minus deductions for the reinsurers’ share – is also referred to as “net”.
Return on Equity (RoE)
Calculated as follows: Profit before taxes as a percentage of average equity, calculated as of the
beginning and the end of the year.
Securities\available-for-sale
Securities available-for-sale includes securities that were not acquired with the intention of being
held-to-maturity, or for short-term trading purposes. These available-for-sale securities are recognized
at market value as of the balance sheet reporting date. The difference between the market value and
the amortized cost (unrealized gains and losses) is recognized directly in equity.
Securities held to maturity
Held-to-maturity securities include debt securities that are intended to be held to maturity, and
can be held to maturity. They are recognized “at amortized cost”.
Segment reporting
Presentation of the consolidated financial statements according to the property and accident
insurance, life insurance, and health insurance areas as primary segments, and by regions as
secondary segments.
G-7