UNIQA’s profit improvement programme 2007–2010

The profit improvement programme (PIP) is an additional step in the consistent implementation of the earnings-oriented business strategy. The focus is on achieving a cost, claims and profit structure that is comparable to international benchmark companies.

The goal of this programme is a sustainable increase in the Group’s pre-tax results of about € 200 million. This corresponds to earnings of € 430 million for the year 2010, whereby value is placed on consistent development of the results. In total, the PIP presumes savings in the amount of € 280 million, from which € 80 million will be reinvested in measures to expand distribution and infrastructure, and increase brand recognition. The PIP is based on numerous measures and campaign plans that ensure the sustainable achievement of this ambitious goal.

Life insurance

The vast majority of the population is aware that a private pension plan is a basic prerequisite for upholding the standard of living in retirement. Insurers play a very important role with respect to private old-age provision. Private pension and retirement annuities and federally subsidised provisions for the future will also be of great significance in the future.

Thus, private pension plans will also form the core of UNIQA’s distribution and marketing activities in 2007. Within the framework of its autumnal provision campaign, Raiffeisen Versicherung will focus especially on retirement annuity, and FINANCE LIFE, which successfully promotes federally subsidised provisions for the future, will further expand its market share through innovative product developments and improvements.

UNIQA will also focus on the development of new products and product features in the future:

• A new focal point of advisory services in 2007, will be nursing insurance schemes, since private provision in the event of nursing requirements is becoming ever more important. Thus in 2007, UNIQA with “Care & Advance Preparation” (“Pflege & Vordenken”) and Raiffeisen Versicherung with “My Guaranteed Care” (“Meine sichere Pflege”) both launched new nursing insurance products. These can be concluded as additional or stand-alone variants – as a single-premium insurance or insurance with recurring premiums. The nursing care requirements are determined according to the “Activities of Daily Life” system (ADL).


• The development of a product platform in the life insurance segment will also be an area of concentration in 2007. UNIQA will combine the advantages of classical and unit-linked pension plan products and their numerous varieties of product components into a single system.


• A special area of concentration in 2007, will be dedicated to company pension plans. UNIQA strives to achieve optimum solutions in the area of company old-age provision plans for small and medium-sized enterprises. There is enormous growth potential in this area. In collaboration with Raiffeisen bank group, especially Raiffeisen Versicherung is in a position to offer an optimum pension solution for every company. The company pension scheme products are largely standardised for this purpose and suitable for the needs of bank distribution. Company old-age provision will be additionally emphasised within the framework of the SuccessfulPartnership – UNIQA’s newly created corporate customer loyalty instrument.

Internationally, the UNIQA Group will further strengthen and intensify cooperation with Raiffeisen bank group in Eastern and Southern Europe. Following the acquisitions in Romania and Bulgaria, as well as in Serbia and the Ukraine, these countries are the object of increasing concentration of cooperation in the bank insurance sector. In the product area, the focus is placed on combined bank and insurance products. In 2007, a strong growth dynamic is expected, in particular, in the personal injury insurance sector. A further increase in the life insurance sector – above all, in the unit-linked life insurance lines – is expected in Italy through the successful cooperation with the Veneto Banca Group.

Health insurance

After the success of 2006, the UNIQA Group will also continue down the path taken to date in Austria in 2007. Of primary importance is, on the one hand, the goal of keeping costs within a moderate scope through cost reduction measures, and on the other hand, making the successes of medical advancement directly accessible to our customers. The negotiations with the hospital carriers and medical associations were characterised by businesslike rigidity, but at the same time, it was possible to achieve a significant milestone in the development of the contracts through the negotiation of a new operations Group scheme. The necessary premium adjustments of the dominating special premium class insurance were once again somewhat less than in the previous year. UNIQA achieved a clear increase in the number of hospitals which invoice electronically. This number should also increase dramatically in 2007.

The year 2007 will also be characterised by renewal and innovation of products. As a result of the Unisex-Directive of the EU, it will be necessary to recalculate nearly the entire rate scale by November. As of that point, costs for all new customers associated with pregnancy and childbirth may no longer be allocated solely to women, but must be equally apportioned to both sexes. This will result in a reduction in premiums for women and a simultaneous increase in premiums for men.

As early as the middle of 2007, UNIQA plans to launch two special products which already comply with the unisex approach:

• A comprehensive medical expenses rate, which will also include a “semi-in-patient” portion for the first time, in addition to the classic special premium class insurance. This offers insurance protection for the increasingly important area of complex diagnostics, which, in fact, does not require a hospital stay, but for organisational reasons can only be conducted in the hospital. Furthermore, in addition to the possibility of obtaining a “second opinion” prior to operations, psycho-therapeutical support in the event of severe diagnoses and events, as well as hospital stays will be offered. Additionally, the product will comprise of an innovative form of premium refund which rewards health-conscious behaviour and also offers concrete assistance through UNIQA VitalCoaches.


• The second new product pertains to “expatriates”. These are individuals who are active outside of their homeland – usually on orders by their employer – temporarily or long term. Comprehensive, but tailored solutions, which cover the (to some extent) very different needs of customers, are required in this segment. The rate structure is prepared at the Group level and is thus available to all the UNIQA Group companies that sell private health insurance.

Our product range in company health management will also be further expanded in 2007. The UNIQA VitalTruck exceeds all expectations and was operated at full capacity in 2006.

In Germany, the discussion concerning the wide-ranging health reform dominated the discussion in the reporting year. At the beginning of 2007, the corresponding legal provisions were approved. To some extent, they result in significantly altered conditions for private health insurance, which also affect Mannheimer Krankenversicherung. However, this insurer had improved its position prior to the conclusion of the reform discussion with an innovative expansion of its rate scale in the area of additional insurance, as well as through an attractive renewal of its total cost and nursing care rate. For 2007, the focus will be on the careful evaluation of the consequences of the reform and the corresponding development of strategies.

In Italy, UNIQA Assicurazioni has been successfully providing health insurance for decades. In 2007, the company will further develop its product range, not only in the area of hospital insurance, but also in the area of hospital per diem insurance in order to continue to live up to its image as an excellent health insurer.

The trend in the markets of Central and Eastern Europe continues to develop on an evolutionary basis through products adjusted to the private health sector – which is not yet comparable to Western Europe. Essentially, these are rates which provide for lump-sums (for instance, per hospital day or operation).

Property and casualty insurance

UNIQA will also consistently continue measures for the further improvement of technical results in the 2007 financial year. The goal is a continued, sustainable improvement in earnings through the stabilisation of loss ratios at a low level.

In the area of material insurance, special attention will be given to the development of the loss ratio in the burglary and water damage insurances. The crime rate has perhaps slackened somewhat, however, it can hardly be considered a trend reversal. Therefore, UNIQA seeks to improve the security awareness of its customers through informational brochures and the offer of security checks for small and medium-sized enterprises. In the legal expenses insurance line in 2007, UNIQA also expects continued growth, and the contacts in the art insurance industry should be further expanded through the art history service and professional advisory services.

In the motor vehicle insurance division in 2007, UNIQA will also be able to maintain the technical results at the current level, although all indicators suggest further price competition and, thus, lower growth opportunities. Owing to increased competition in the motor vehicle insurance market, the current price level is stagnating and is even regressing in some risk segments. Since premium adjustments for existing policies will only be possible to a small extent, despite the fact that expenses for personal injury have increased disproportionately as a result of increased health costs, product policy will continue to focus on the specific risk situation of our customers.

As the first company in the entire German-speaking insurance market, UNIQA plans to introduce usage-optimised insurance (UOI) to the market in 2007. The new system will enable a precise specification of the risk profile by measuring the kilometres actually driven and also the streets used. These values influence the amount of the premium. Initially, private customers will be offered motor vehicle liability and collision damage insurance in addition to the standard rates. The insurance product will also be tied to an extensive security service.

With optimal claims settlement for our customers in mind, UNIQA will also focus on the intensive use of its own motor vehicle experts and current communications technology in 2007. That is why we have concentrated activities in the areas of motor vehicle and property damage through the foundation of our own company for damage observation and repair. Additionally, UNIQA supports new and effective repair methods, and is focusing on a trustworthy collaboration with the qualified Austrian repair industry.

In 2007, Raiffeisen Versicherung will promote motor vehicle, homeowner and apartment insurance products within the framework of its spring campaign.

In the corporate customer business, UNIQA expects the continuation of the trend in which risks requiring little know-how and small capacities will be subjected to price pressure. In the general liability insurance line, there is a tendency to gather entire professional groups in framework agreements in order to achieve a price advantage. UNIQA will also further develop its competence in cross-border insurance programmes together with the international UNIQA companies.

Results and proposed appropriation of profit for UNIQA Versicherungen AG

The individual accounts of UNIQA Versicherungen AG, prepared in accordance with the Austrian Commercial Code, report an annual net profit for the 2006 financial year of € 42.0 million (2005: € 31.3 million). The Management Board shall thus recommend to the annual general meeting of shareholders on 21 May 2007, that the net profit for the 2006 year in the amount of € 42,036,959.37 (2005: € 31,321,289.45) be distributed as a dividend of 35 cents on each of the 119,777,808 individual share certificates issued at the balance sheet date and entitled to receive a dividend, and that the remaining amount be carried forward to a new account.

Vienna, 2 April 2007

The Management Board