Property and casualty insurance

UNIQA will consistently continue on its path of further improvement in technical results in the 2008 financial year as well. The goal is a sustained improvement in profit through stabilisation of the loss ratios at a low level. One focus will be the accumulation of weather extremes in recent years. Special attention will be paid in the area of elementary insurance to accounting for risk zones according to the Austrian flood risk zoning system (HORA), with regard to floods and earthquakes. Another area to be observed is the development of the loss ratios in burglary and water- damage insurance. The crime rate has slackened somewhat; however, it can hardly be considered a trend reversal. With more precise observation, it can be seen that the number of burglaries is declining, but the amount of average losses is increasing. Losses from the storms “Paula” and “Emma” in the 1st quarter of 2008 are expected to encumber the 2008 profit by approximately €30 million.

In the area of premium definition, the focus is on expanding and refining scoring models for achieving individual and risk-appropriate premium definitions. This strategy has been successfully implemented in the private segment and will also be implemented in the business segment as of 2008. In the area of legal expenses insurance, UNIQA expects to continue in 2008 its profitable growth exceeding that of the market. In 2008, Raiffeisen Versicherung will promote automotive, home and flat insurance products within the framework of the spring campaign, and will offer its advantage customers the already successful severe weather warnings within the framework of “My secure advantage”.

The reduction of complexity will be an important component of the strategy for 2008. This consists of two main components – continuing with standardisation of the product world as well as optimisation of the processing procedures.

In the corporate customer business, UNIQA consciously relies on high- quality insurance protection and innovative product ideas, in order to counteract the price pressures that are clearly noticeable in this segment. For example, we concluded a framework agreement in 2007 with the Austrian Association of Real Estate Trustees, in order to insure the liability of this professional group, for which mandatory insurance is required by law as of the first half of 2008.

UNIQA offers risk management against legionnaires’ disease to the hospitals we insure, in order to set new standards in this area and to offer our policy holders the highest quality of insurance protection. In the area of alternative energy, UNIQA is planning to develop a combined property and liability insurance product during 2008, in order to offer simple and customised insurance solutions in these areas for this future technology.

In corporate customer business, such as the SuccessPartnership, a customer advantage programme with a selection of supplemental services for freelancers, farmers and small and medium-sized businesses will be strongly promoted. Over 7,000 new partnerships are expected for the first full year. This service and customer loyalty instrument should reduce cancellation rates and bind customers more strongly to UNIQA through the claims-based SuccessBonus. Cross-selling will be heavily expanded in the corporate customer business through additional trainings and centrally supported campaigns.

Health insurance

One of the hot topics during the last few months of the year 2007 was the implementation of the unisex directive. Nearly the entire product range was recalculated in order to comply with the requirement of distributing the costs associated with pregnancy equally among men and women, for all contracts concluded as of 1 December 2007. The redesign was used as an occasion for some product improvements that will enter into effect in the year 2008. The protection and service concept of the core product “special class insurance” was expanded with the following new features:

• At the customer’s request, UNIQA will organise and pay for a “second opinion” before planned operations, in order to assure the patient that the planned intervention is, in fact, medically indicated.
• In event of the unexpected death of a close relative or upon receipt of a dramatic diagnosis (e.g. cancer), the customer has the right to a therapeutic crisis intervention. Diagnosis with cancer not only results in coverage of the treatment costs but also payment of a lump sum benefit.

The idea of allowing health insurance to grow along with the various needs of different phases of life was introduced with the product “FirstCare”. The coverage ranges here from costs for the accompaniment of small children in hospital to accident costs for youths to serious illnesses in adults, with the added option of a discounted switch to full special-class insurance. The further development of the life-cycle concept and the associated additional flexibility of the health insurance protection will be key points for the current year.

This will also be one of the answers of Mannheimer Krankenversicherung AG, a member of the UNIQA Group, to the health reform being realised this year in Germany. Mannheimer Krankenversicherung will, in this way, continue its path as an innovative service-oriented insurance company in the premium segment.

The “Expatriate” product concept developed according to plan during 2007 and now available, will be important for the entire UNIQA Group. This product allows individually customised insurance solutions to be offered to people who will be living abroad temporarily for periods longer than a year, with the inclusion, if desired, of corresponding follow-on insurance after the end of the time abroad. Particularly for people who were already insured with UNIQA, the opportunity to return to this insurance without disadvantages is of great importance. The option for Austrian companies to insure even their non-Austrian employees while working abroad is also worth highlighting. Especially in high-level management positions, optimal coverage in the event of an illness is a “fringe benefit” in high demand, and a decisive competitive advantage in the Central and Eastern European employment market.

The big breakthrough toward a developed private health insurance market in Eastern and south-eastern Europe is still not in sight for 2008. Regardless of this, UNIQA is evaluating selected markets for the implementation of a product concept that combines services and insurance protection at various levels in cooperation with health care service providers, as well as with institutions not yet established.

Life insurance

The UNIQA Group offers a comprehensive selection of classic and unitlinked life insurance products as well as private nursing care insurance.

One focus of the UNIQA sales and marketing activities in 2008 will be the innovative product FlexSolution, which is being realised within the framework of the new future provisions platform and combines the advantages of classic and unit-linked life insurance within a single contract. The future provisions solution accompanies the customer throughout his or her life and can be flexibly adapted to changed life circumstances and customer needs, making it an optimal solution for actively reacting to life cycles or a specific market situation.

Private insurance companies and state-subsidised future provisions will also be extremely important during 2008. UNIQA is always “in tune with the times” and develops new products and product features:

• Expansion of the future provisions platform with additional product modules for all sales channels will be a focal issue in 2008.
• Differentiation between smokers and non-smokers will be a premiumdetermining factor, among others, in the rate definition for life insurance policies.
• As of mid-year, nursing care insurance will be offered in a variant with a constant premium dynamic, i.e. the entry premium is lower and increases by fixed values up to age 65. This means a convenient entry premium specially for young customers.

As bank insurer for the Austrian Raiffeisen banks, Raiffeisen Versicherung will reintroduce Raiffeisen personal protection in March 2008. This product, introduced as an innovation to the Austrian insurance market in 1983, combines life insurance and casualty insurance with special advantages. Raiffeisen personal protection is specially oriented toward target groups who would like to secure their credit and establish provisions for the future at the same time.

Some flexible and customer-oriented offers are also planned within the comprehensive life insurance product line. These include dynamisation of capital insurance contracts with an arbitrary percentage and arbitrary years, as well as the option of flexibly selectable mixed life insurance protection. This variant is particularly intended for the 20- to 40-year-old target group, who would like to secure credit and provide for the future. The future provisions can be continuously adapted to the customer’s individual life circumstances.

At the end of the first half of 2008, a life insurance variant with fixed payout sums and instalments is planned at Raiffeisen Versicherung. This offer will be directed toward customers who would like to rely on a fixed minimum pay-out amount for their plans, or financial coverage upon ending of the contract.

Internationally, the UNIQA Group will further intensify its cooperation with the Raiffeisen bank group in Eastern and south-eastern Europe during 2008. The focus in the product area will continue to be combined banking and insurance products, as well as preparation for the staged introduction of capital- forming life insurance products. The know-how transfer in Albania will be intensified after the acquisition of 45.6% of SIGAL and the first successful placement of newly developed life insurance products on the market.