Erste Bank JPMorgan Merrill Lynch International

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SELECTED FINANCIAL DATA The following table sets forth the contributions to gross premiums written and profit before taxes from the property and casualty, life insurance, and health insurance businesses of the Vienna Insurance Group, with an additional breakdown according to geographic region for fiscal years 2007, 2006 and 2005. Unless otherwise indicated, all financial data contained in this section has been audited. Gross written premiums 2007 2006 2005 Profit before taxes Fiscal year ended December 31, Gross written premiums (in EUR million) Profit before taxes Gross written premiums Profit before taxes Property and casualty Austria . . . . . . . . . . . . . . 1,487.1 154.9 1,411.8 108.5 1,345.0 65.9 Czech Republic. . . . . . . . 838.1 49.5 788.5 24.4 672.5 54.7 Slovakia . . . . . . . . . . . . . 296.9 23.5 246.5 20.8 225.7 17.5 Poland . . . . . . . . . . . . . . 324.3 15.1 215.7 6.3 50.4 0.6 Romania . . . . . . . . . . . . . Remaining CEE 399.9 9.7 224.8 6.3 126.7 -0.1 markets . . . . . . . . . . . . Other markets (Germany 258.9 3.4 117.7 1.9 84.4 -0.5 and Liechtenstein) . . . . 66.0 9.0 62.2 7.4 58.6 7.2 Subtotal . . . . . . . . . . 3,671.2 265.1 3,067.2 175.7 2,563.3 145.5 Life insurance Austria. . . . . . . 1,901.6 116.9 1,725.0 87.7 1,537.9 57.2 Czech Republic. . . . . . . . 292.3 24.3 259.5 34.7 219.0 5.4 Slovakia . . . . . . . . . . . . . 197.7 6.8 141.2 6.9 105.3 7.5 Poland . . . . . . . . . . . . . . 218.8 3.7 119.3 1.4 23.7 0.9 Romania . . . . . . . . . . . . . Remaining CEE 13.6 -5.1 12.1 -3.5 9.5 0.6 markets . . . . . . . . . . . . Other markets (Germany 124.9 6.9 80.7 0.9 42.7 1.6 and Liechtenstein) . . . . 185.2 3.8 178.6 4.5 218.6 0.3 Subtotal . . . . . . . . . . Health insurance 2,934.2 157.2 2,516.4 132.5 2,156.4 73.4 Austria . . . . . . . . . . . . . . 306.6 15.0 297.9 12.8 288.1 21.5 Subtotal . . . . . . . . . . . . . 306.6 15.0 297.9 12.8 288.1 21.5 Total . . . . . . . . . . . . . . . . . . . 6,911.9 437.3 5,881.5 321.0 5,007.8 240.3 54
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion and analysis below is based on the Wiener Städtische AG’s audited consolidated financial statements for the fiscal years ended December 31, 2007, 2006 and 2005, all of which are included elsewhere in this Prospectus and it should be read in conjunction with them. The consolidated financial statements were prepared in accordance with <strong>International</strong> Financial Reporting Standards (IFRS), as applied in the EU. The Company’s consolidated financial statements for the fiscal years ended December 31, 2007, 2006 and 2005 were audited by KPMG Austria GmbH Wirtschaftsprüfungsund Steuerberatungsgesellschaft, which issued an unqualified auditor’s report. See “General Information on Wiener Städtische AG – Auditors”. Definitions of specific terms from the insurance industry and from the annual and interim financial statements can be found in the section entitled “Glossary”. Unless otherwise indicated, all financial data contained in this section has been audited. Introduction Overview of the Vienna Insurance Group With approximately 17 million customers, the Vienna Insurance Group is among the largest international insurance groups in the CEE region based on gross premiums written, which amounted to EUR 6,911.9 million in 2007 (2006: EUR 5,881.5 million) (Source: Internal analysis based on data for the first three quarters of 2007 of the national insurance associations and supervisory authorities). It has life and non-life insurance business operations in Austria and in 22 other countries, primarily in the CEE region. In the CEE region, the Group is active in Albania, Bulgaria, Georgia, Croatia, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia (through a branch of Wiener Städtische AG), the Czech Republic, Turkey, Ukraine, Hungary, Lithuania, Latvia, Estonia and Belarus. The Vienna Insurance Group operates independent companies in Germany and Liechtenstein and also operates in Italy through a branch of Wiener Städtische AG. In addition to its solid position in its home market Austria, the Vienna Insurance Group is primarily growing into the emerging countries of the CEE region. The insurance business outside Austria is gaining increasing importance for the Group (share of overall gross premiums generated outside Austria: 2007 – 46.5%; 2006 – 41.6%; 2005 – 36.7%). Based on its internal analysis of the local data of national insurance authorities, the Vienna Insurance Group believes that, with a market share of approximately 12.1%, it is the second largest insurance group based on gross premiums written among Western publicly traded insurance companies operating in the Core CEE markets (excluding Serbia). Based on the same analysis, the Vienna Insurance Group believes that no other Western publicly traded insurance group generates a higher percentage of its group premiums from operations in the CEE countries. In fiscal year 2007, the Vienna Insurance Group employed on average 20,307 employees (including 100% of the employees of proportionally consolidated companies) compared to an average 18,587 employees in fiscal year 2006 (including 100% of the employees of proportionally consolidated companies). Vienna Insurance Group segments The range of activities conducted by the Vienna Insurance Group includes both the life and nonlife insurance business. In Liechtenstein it is only active in the life insurance business. Health insurance products are marketed to a significant extent only by Wiener Städtische AG and only in Austria. In Austria, the Vienna Insurance Group is a main player in all three business areas. Measured by gross premiums written, as of December 31, 2007, the Vienna Insurance Group ranked first in the property and casualty insurance business, second in the health insurance business and first in the life insurance business (Source: Internal analysis based on preliminary data 2007 of the VVO). In Austria, the Vienna Insurance Group held a market share of 6.0% in 2006 in wealth-creation products (of which savings and pension-oriented life insurance products form a part) (Source: Estimate based on VVO and data of the Austrian National <strong>Bank</strong>), whereas in the market of life insurance products for personal risk insurance the market share of the Vienna Insurance Group was 15.0% in 2006 (Source: Internal analysis based on preliminary data 2006 of the VVO). In the Czech Republic and Slovakia, the Vienna Insurance Group holds second place in the market in both countries for life and non-life insurance. Measured by gross premiums written, the 55
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WIENER STÄDTISCHE Versicherung AG
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Stabilization measures. In connecti
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[THIS PAGE INTENTIONALLY LEFT BLANK
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Proceeding Regarding BA-CA Versiche
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in detail factors which may influen
Page 14 and 15: “Benefia Non-Life” refers to BE
Page 16 and 17: “Unita” refers to Unita S.A. Vi
Page 18 and 19: Health insurance products are marke
Page 20 and 21: The Vienna Insurance Group can give
Page 22 and 23: The Offer Period and the Employee O
Page 24 and 25: Entitlement to Dividends: . . . . .
Page 26 and 27: RISK FACTORS Potential investors sh
Page 28 and 29: negative effects on the Vienna Insu
Page 30 and 31: safeguard the stability of the publ
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Page 34 and 35: Since the purchase price of the Tar
Page 36 and 37: always passed such resolutions as p
Page 38 and 39: General THE OFFERING The Offering c
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Page 42 and 43: PLAN OF DISTRIBUTION Scope of and A
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Page 48 and 49: CAPITALIZATION The following table
Page 50 and 51: USE OF PROCEEDS Assuming all of the
Page 52 and 53: DIVIDEND POLICY All Existing Shares
Page 54 and 55: The respective country agreements i
Page 56 and 57: The table below sets forth key fina
Page 62 and 63: year, the Target Companies derived
Page 66 and 67: Vienna Insurance Group ranked secon
Page 68 and 69: Year Real economic growth Consumer
Page 70 and 71: therefore, good growth potential st
Page 72 and 73: Non-life rate-setting Rate-setting
Page 74 and 75: has also remained between 9.5 and 1
Page 76 and 77: Insurance policies generally includ
Page 78 and 79: Severance obligations Based on stat
Page 80 and 81: increase also came from insurance c
Page 82 and 83: of the scope of consolidation throu
Page 84 and 85: Financial result The following tabl
Page 86 and 87: The following table sets forth by r
Page 88 and 89: Health insurance segment The follow
Page 90 and 91: individual subsidiaries are respons
Page 92 and 93: Currently, neither the Management B
Page 94 and 95: EMBEDDED VALUE OF WIENER STÄDTISCH
Page 96 and 97: Group Embedded Value The following
Page 98 and 99: Overview BUSINESS With approximatel
Page 100 and 101: Life Insurance The life insurance b
Page 102 and 103: for a strong demand for these produ
Page 104 and 105: For more information regarding comp
Page 106 and 107: that entity. In 1938, “Gemeinde W
Page 108 and 109: In 2005, the Issuer acquired a part
Page 110 and 111: The following table sets forth the
Page 112 and 113: damages. The changes in the Vienna
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Corporate Customers In the property
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medical treatment, medicines (inclu
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In connection with endowment insura
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Wiener Städtische AG offers produc
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premiums written in fiscal year 200
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The Vienna Insurance Group conducts
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KOMUNÁLNA Poist’ovňa, a.s. Vien
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Description of the Six Most Importa
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The following table sets forth the
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11.8%), with premiums increasing by
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subsidiary of TBIH) transferred its
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The investment policy is more conse
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The following table sets forth the
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at equity). The table below provide
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ought against them will have a mate
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Trademarks and Patents The names
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Risk Management Organization The Gr
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Auditing In keeping with the minimu
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Reinsurers with a lower rating are
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Real Estate Risk The value of the r
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On the basis of the Group’s inter
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INSURANCE SUPERVISION Wiener Städt
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an ongoing basis. Insurance compani
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Persons that would like to directly
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In addition to his responsibilities
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Chairman of the supervisory board o
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Member of the supervisory board of
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General director (retired) KR Dr. K
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Members of the Extended Board The f
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Members of the Group Management Boa
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the extended Group board since 2008
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Member of management board, supervi
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Shares and Stock Options Held by Me
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Human Resources Committee (committe
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DESCRIPTION OF SHARE CAPITAL AND SU
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through a resolution of the shareho
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After the capital increase resolved
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The following measures require purs
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Neither Austrian law nor the Articl
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Dividend Rights The offered New Sha
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the purchase price exceeds 10% of t
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The executive bodies of WST-Versich
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esolution on the formal approval of
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Taxation in Austria TAXATION Taxes
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Capital Gains Resident Shareholders
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tax consequences that may be releva
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liability and may entitle such hold
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THE VIENNA STOCK EXCHANGE The infor
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Trading Volume In 2006, the aggrega
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Czech languages. The dissemination
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Takeover Commission and must prepar
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THE PRAGUE STOCK EXCHANGE The follo
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est quotation. During the closed ph
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obligations; or (iv) a criminal off
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Operating private hospitals in the
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RESPONSIBILITY STATEMENT PURSUANT T
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CONSOLIDATED BALANCE SHEET AS OF 31
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CONSOLIDATED SHAREHOLDERS’ EQUITY
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CONSOLIDATED CASH FLOW STATEMENT FR
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SEGMENT REPORTING CONSOLIDATED INCO
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total of 29 domestic and 41 foreign
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In the third quarter, the Celetná
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existing on the balance sheet repor
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For both owner-occupied and third p
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The credit quality of each contract
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not set to zero for Group subsidiar
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The calculations for 31 December 20
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RISK REPORTING The Vienna Insurance
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internal processes, strategic procu
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Concentration risk Concentration ri
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Other securities Financial investme
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The following table shows Vienna In
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measurement of the value of a compa
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that occurred in the current and al
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amount, the closely held corporatio
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Unrealised profits and losses are a
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Affiliated companies and participat
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Detail: Acquisition Costs Carried F
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9. RECEIVABLES Detail in EUR ’000
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13. CONSOLIDATED SHAREHOLDERS’ EQ
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Development in EUR ’000 Property/
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Development in life insurance 31.12
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Development in severance obligation
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24. LIABILITIES Detail in EUR ’00
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Off-balance sheet commitments The f
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Premiums written — Direct life in
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Detail — income in EUR ’000 Cur
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Detail — expenses in EUR ’000 D
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Detail in EUR ’000 Property/Casua
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The Supervisory Board is composed o
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the Austrian Stock Corporation Act
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SIGNIFICANT EVENTS AFTER THE BALANC
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REPORT OF THE SUPERVISORY BOARD The
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INDEPENDENT AUDITOR’S REPORT We h
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CONSOLIDATED SHAREHOLDERS’ EQUITY
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CONSOLIDATED CASH FLOW STATEMENT FR
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SEGMENT REPORTING CONSOLIDATED INCO
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28 does not exist, since Wiener St
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Information on the companies that a
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Accounting policies for specific it
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Financial investments Financial inv
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Active tax deferrals are not recogn
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policyholders. These reserves are f
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Operating expenses Group personnel
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To manage these underwriting risks,
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The Vienna Insurance Group has made
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Investments segment Health Life in
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Equities As of 31 December 2006, Vi
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The following table shows the Vienn
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The shareholder margin is calculate
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Reinsurance The Vienna Insurance Gr
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Development of purchased insurance
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4. PARTICIPATIONS On 31 December 20
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The information required under § 2
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For financial investments available
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9. RECEIVABLES Detail in EUR ’000
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13. CONSOLIDATED SHAREHOLDERS’ EQ
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14. SUBORDINATED LIABILITIES Subord
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Health insurance mathematical reser
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Maturities in EUR ’000 31.12.2006
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23. OTHER PROVISIONS Detail in EUR
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agreements with other insurers conc
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income statement. A portion of the
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Detail — income in EUR ’000 Cur
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The Other income of EUR 7,091 milli
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33. OTHER EXPENSES Detail in EUR
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The Supervisory Board is comprised
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The Managing Board is comprised of
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Significant events after the balanc
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AUDITOR’S REPORT We have audited
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REPORT OF THE SUPERVISORY BOARD The
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CONSOLIDATED INCOME STATEMENT FOR T
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SEGMENT REPORTING CONSOLIDATED BALA
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NOTES TO THE CONSOLIDATED FINANCIAL
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During the reporting period from 1
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negative, taking into account capit
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factors including contract and mark
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The creditworthiness of each contra
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formed at the individual policy lev
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The reserves are recognised at the
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The other capital assets item consi
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date, real estate has not represent
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Embedded value sensitivity analysis
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IBNR provisions are formed to offse
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Private customer activities. Privat
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Detail in EUR ’000 31.12.2005 31.
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For financial instruments available
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10. CASH AND CASH EQUIVALENTS Detai
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existing preferred shares may be is
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17. RESERVE FOR OUTSTANDING CLAIMS
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22. OTHER PROVISIONS Detail in EUR
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Other threatened and pending court
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Premiums written, total account Pro
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29. OTHER INCOME Detail in EUR ’0
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35. OTHER INFORMATION The Superviso
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The Management Board is comprised o
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in the area of pension funds in Bul
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Tax-free reserves In the consolidat
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AUDITOR’S REPORT We have audited
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Banker’s blanket bond The Banker
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Expense ratio The ratio of premium
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Loss ratio The percentage ratio of
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Shares of minority shareholders in
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experience are normal and are to be
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The FOG and the Cost of Non-Market
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The NBV has only been calculated fo
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policyholder behaviors, i.e. some a
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The yields shown are risk-free euro
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Sensitivity Analysis EEV The follow
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B&W Deloitte GmbH Magnusstra�e 11
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Embedded Value of the Target Compan
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3.2 Value of In-Force The VIF is th
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5. Sensitivity Analysis The followi
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ZUSAMMENFASSUNG DES PROSPEKTS Diese
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Gewinn vor Steuern von rund 1,05 Mr
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Sollten es die bisherigen Aktionär
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Mai 2008 ablaufen. Die Bezugsrechte
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diesem Prospekt enthaltenen Konzern
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SHRNUTÍ PROSPEKTU Toto shrnutí pr
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Dne 26. brˇezna 2008 uzavrˇely sp
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Uplatnění Upisovacích práv ze s
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prˇedstavují právo prˇevodu na
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Vybrané informativní finanční
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Erste Bank JPMorgan Merrill Lynch International

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