Erste Bank JPMorgan Merrill Lynch International

EMBEDDED VALUE OF WIENER STÄDTISCHE VERSICHERUNG AG
VIENNA INSURANCE GROUP
In addition to its consolidated IFRS financial statements, which are its primary financial statements,
the Vienna Insurance Group is providing in this Prospectus information about its insurance
business on an “embedded value” approach based on local GAAP. This method is used by a number
of European insurance groups to provide supplementary information to that shown in their primary
financial statements to give a better reflection of the economic value of the business by incorporating
the value of the future profits likely to be generated by the existing business over its entire life span.
Embedded Value methodology is generally applied to long-term business.
The embedded value of an insurance company is an estimate of the value of both its net assets
and the income stream expected from insurance policies already in force. It does not include the value
of policies that the company will sell in the future. In the case of the Vienna Insurance Group, it
comprises the sum of the total of the Group’s Net Asset Values of all insurance segments plus the
present value of all expected future surpluses for the life and health insurance segment at the
valuation date. The present value of all future surpluses is calculated taking into account reserve
releases. The Adjusted Net Asset Value is calculated as an indicator of the funds of an insurance
company belonging to the shareholder. The Value in Force is calculated to indicate the potential profits
that shareholders will receive in the future.
The calculation of embedded values requires the use of numerous assumptions with respect to
future business, operating, and economic conditions, and other factors, some of which are beyond the
control of the Vienna Insurance Group. Although the assumptions used represent estimates which the
Vienna Insurance Group considers reasonable, actual future operating conditions and actual future
experience may vary from that assumed in the calculation, and such variations may be material.
Consequently, the inclusion of embedded value information herein should not be regarded as a
representation by the Vienna Insurance Group, or any other person, that the stream of future after-tax
profits used to determine the embedded values will be achieved.
The following is an excerpt of the report “Embedded Value of Wiener Städtische Versicherung AG
Vienna Insurance Group” reproduced on pages H-3 through H-13 of this Prospectus. The following
data is unaudited.
Introduction
The Wiener Städtische Versicherung AG Vienna Insurance Group (VIG) last disclosed its Group
Embedded Value (GEV) results in April 2007 for the year 2006. The disclosure included the European
Embedded Value (EEV) or the Traditional Embedded Value for the long standing Life and Health
(L&H) businesses and the Adjusted Net Asset Value (ANAV) for the Property & Casualty (P&C)
businesses in Austria, Germany, the Czech Republic, Slovakia, Hungary and Poland. In accordance
with VIG’s goal of continually extending the scope of the GEV reporting the TEV for Life business and
the ANAV for the P&C business of Compensa in Poland has been included in the GEV for the first
time. The ANAV for the P&C business of Compensa includes the IFRS equity of Compensa Holding.
Previously the GEV only included the IFRS equity of these Polish operations.
VIG has a strong track record of, and continues, expanding dynamically in Central and Eastern
Europe (CEE). The integration of the acquired businesses in VIG, and the resultant restructuring, is in
many cases still ongoing. Therefore, the companies listed in the table below have been included in the
GEV on the basis of their IFRS equity and it has not yet been possible to determine the EEV or the
ANAV.
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