We conscientiously and resolutely continued

In 2007, we conscientiously and resolutely continued the expansion strategy of our insurance group with its focus on consistent internationalisation and a sustained increase in yields. The success of our coordinated efforts to achieve these ambitious goals can be seen in the exceptionally high increase in the earnings before taxes, by over 42% to €340 million, the growth in premium revenues from Eastern Europe by over 27%, as well as the increase in earnings per share, by over 62% to €2.07.

Return goal achieved early

“The yield-focused growth strategy of expansion secures our independence as a Central European insurance group and takes advantage of the growth opportunities in the Eastern European markets.” Konstantin Klien

The return on equity, in particular, which not only reached the target of 20% but significantly exceeded it at over 26%, proves that the chosen path was the right one. This path will ensure the independence of the Group even in times of hard competition in the current age of globalisation. The strategy allows us to operate successfully in the largely saturated markets in Austria and Central Europe, as well as to take advantage of the exceptional opportunities presented by the rapidly developing regions encompassing 360 million people, both within and beyond the eastern border of the EU.

Under the management of the publicly traded company UNIQA Versicherungen AG, our European insurance group, active in 20 markets, succeeded in strengthening its position as one of the leading market players in Central, Eastern and south-eastern Europe with a premium revenue of €5.3 billion and capital investments totalling over €21.5 billion.

By extending our activities in south-eastern Europe to include Albania, Macedonia and Kosovo, and expanding our financial commitment in Bulgaria and the Ukraine, we have further strengthened our positions in these rapidly developing markets.

New markets in the East secure company goals

These markets currently contribute 15.5% of our premium revenue. The share of total premiums generated in international business is currently over 33% and will continue to rise until 2010, further driving the internationalisation of the business volume as well as the Group results. In this way, we diversify the risks of our company portfolio and achieve our ambitious growth goals that exceed the market average.

Premiums volume written 2007
incl. the savings portion of premiums from unit- and index-linked life insurance

Share of target markets 2007

Share of international business 2007

We concentrate all of our company activities and decisions on the realisation of these goals. Within the framework of our differentiated multi-region strategy, we intend to maintain UNIQA’s leading position in Austria through segment-focused qualitative growth with higher returns. The Western European markets, characterised by higher insurance density, contributed roughly 18% of the Group premiums in 2007. We hold profitable niches in these markets and succeed through exclusive offerings.

“UNIQA operates in 20 European markets. We are successful in these regions because we understand our markets well, act flexibly and have strong local partners.” Andreas Brandstetter

We take advantage of the prospects in the future markets within and beyond the eastern border of the European Union through optimisation of our financial involvement, through dynamic growth projects for increasing market shares between 5 and 7% in non-life segments and 3% in life insurance, as well as through cooperative transitions to majority participations in companies where we entered with a minority interest. We employ uniform branding and advertising concepts, shared IT and human resources policies as well as development of management staff to support the expansion of our presence in these markets.

The Preferred Partnership with the Raiffeisen bank group in Eastern Europe and the regional Raiffeisen banks in Austria has proven effective for the successful penetration of new insurance markets. This cooperation now covers 13 Eastern and southeastern European regions. It has proven to be a cost-effective and efficient sales channel for accessing these underdeveloped markets to the profit of both partners, while ensuring aboveaverage growth in the future. The premium revenues generated through the programme have nearly doubled since the start of the cooperation in 2004, to reach over €100 million in 2007.

More potential for expansion created

Additional support for UNIQA’s expansion comes from the European Bank for Reconstruction and Development (EBRD). The EBRD has increased the scope of its financial cooperation with us from €70 million to €150 million. This makes available to us extensive funds for minority investments by the EBRD in UNIQA subsidiaries in Central and Eastern Europe. As the first project, the EBRD took over 20% of UNIQA Osiguranje, which is currently the fifth-largest insurance company in Bosnia and Herzegovina.

“Product innovation and customer service are crucial for sustained success. In 2008, we will continue to impress our customers with excellent service and innovative product solutions.” Karl Unger

Additional potential for our sustained expansion is generated by the third UNIQA Profit Improvement Programme 2007–2010. The goal of this plan is to increase Group profits by €200 million by 2010. As part of the programme, we would like to further reduce our loss and cost ratios considerably, compress our structures, decrease unnecessary work by eliminating redundancies and save money by outsourcing to other international groups. The Group profit before taxes should be improved by 2010 to €430 million. We are already well on our way – we have succeeded in achieving the initial goals for 2007.

Employing our strengths as an innovation leader

“Country-specific development of markets is one of our key competitive advantages: niche strategies in the mature markets of Central Europe and positioning as a composite and bank insurer in the eastern growth markets.” Gottfried Wanitschek

We will make decisive use of our strengths as a product pioneer and innovation leader to implement this expansion based on controlling costs and improving efficiency, primarily in southeastern and Eastern Europe. In addition, UNIQA will continue to address the issues of the future today, confirming our reputation as a trendsetter.

In 2007, for example, we achieved a milestone with a number of product innovations: the first electronic, kilometre-based automotive insurance rate that also offers customers additional safety features. A box containing a GPS receiver registers the driving profile of the insured within city traffic, on country roads or motorways and uses this information to calculate the usagebased premium. The insurance policy is supplemented with intelligent assistance services in the event of an accident or theft of the vehicle. This innovation secures for us a clear competitive advantage on the market.

We have also implemented a very flexible and innovative product version in life and health insurance. Our new style of product for long-term old-age pension combines the elements of classic and unit-linked life insurance with a completely new level of flexibility. As market leader in health insurance, we set new standards through a combination of extensive medical insurance protection with effective preventive measures and useful assistance services.

World of advantage ensures a competitive edge

“Continuous process optimisation is a constant task for every company. With our Profit Improvement Programme, we successfully laid the foundation in 2007 for consistent improvement in profits up to the year 2010.” Hannes Bogner

The high competence in developing products with additional benefits and unique features within the market is part of the UNIQA world of advantage. It emotionalises the bare insurance product, allowing customers to experience it more directly. The bundling of intelligent additional benefits and effective prevention offerings differentiates us from our competitors as a next-generation insurance company.

Innovative solution competence demands constant training and education of our employees, as well as flexibility and mobility beyond national borders. We rely on the outstanding quality of our human capital at all levels as a central competitive factor for the realisation of our company strategy, and we employ advanced principles of human resources management to develop and serve our employees.

Social responsibility and corporate citizenship are also fixed components of the UNIQA corporate culture, which emphasises a broad perspective and attention to the bigger picture. We consider our participation in the Raiffeisen climate protection initiative to be a proactive response to the challenges of the future. These efforts will pay off for our insurance group, our employees and our shareholders.