Erste Bank JPMorgan Merrill Lynch International

Year Real economic growth Consumer price index
(in %)
Poland
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 2.1
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 1.0
2007 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6 2.4
(Source: Bank Austria Creditanstalt CEE Quarterly 04/2007, Polish Central Bank, Central Statistics Office
Poland)
Year Real economic growth Consumer price index
(in %)
Romania
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 9.0
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 6.6
2007 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8 4.3
(Source: Bank Austria Creditanstalt CEE Quarterly 04/2007, Romanian Central Bank, Central Statistics
Office Romania)
The economic situation in the CEE region – Overview
With a total population of approximately 175 million, the entire CEE region (excluding Russia)
represents a very large and dynamic economic area with a considerable potential for growth and
future prosperity (Source: VVO-Europa-News 3-4/2007). In 2007, the average gross national product
in the CEE region grew far more quickly than in the EU-15. Factors including an already well
developed infrastructure in most CEE countries compared with other emerging countries, a high
educational level and increasing political stability due to the geographic proximity to Western Europe
and the sustained eastern expansion of the EU are making it possible for these countries to overcome
decades of isolation and stagnation under communism.
The insurance market in Austria and the CEE region
The earnings of the Vienna Insurance Group also depend on the individual insurance markets in
which each Group company operates.
The insurance market in Austria
Compared to the CEE region, the Austrian insurance market is a more mature and developed
market, which is best illustrated by a comparison of insurance density (per capita premiums).
Insurance density reached a value of USD 2,397 in Austria in 2006, while the average in the CEE
region was USD 212 (Source: Swiss Re sigma No. 4/2007). Austria still has the potential to catch up
with the other EU-15 countries in the life insurance area, where the insurance density is at USD 1,105
in Austria compared to an average of USD 2,198 for the EU-15 countries. Since 2003, the life
insurance sector has grown in particular due to the increasing significance of personal pension plans
and the governmental support thereof. In the non-life sector particular focus is on underwriting results.
The Austrian insurance market breaks down as follows for the periods presented:
2006 2005 2007e (*)
Gross premiums written
Claims/Benefits paid
Fiscal year ended December 31, Fiscal year ended December 31,
2006 2005
2007e (*)
(in EUR million)
(in EUR million)
Property and casualty . . . . . . . . . 7,187.0 6,969.0 6,773.0 4,764.0 4,434.0 3,861.0
Health . . . . . . . . . . . . . . . . . . . . . 1,483.0 1,437.0 1,398.0 1,026.0 997.0 989.0
Life . . . . . . . . . . . . . . . . . . . . . . . 7,208.0 7,183.0 7,124.0 4,919.0 4,245.0 3,934.0
Total . . . . . . . . . . . . . . . . . . . . . . 15,878.0 15,589.0 15,295.0 10,709.0 9,676.0 8,784.0
(Source: VVO Direct Business)
(*) February estimate by VVO
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