| | StrategyProfitable International GrowthConsistent internationalisation and a sustainable increase in
yield – these are the core goals of the UNIQA Group’s
expansion strategy. The Group continued persistently with
this strategy in 2008 despite the fact that the economic
environment on the financial markets had become considerably
more difficult by the end of the year.
The UNIQA Group continues to pursue its top-level goals – even
in the considerably harsher environment since the outbreak of
the international financial and economic crisis. Visible proof of
the success of our concerted efforts to implement our growth
strategy in 2008 was, once again, the above-average growth in
premium volume by a total of 10.4% to €5,825 million and
above all of the premium revenue in Eastern Europe by 56.7%
to €1,279 million. On the other hand, profit (before taxes) sank
to €90 million because of the economic crisis and mainly due
to the turbulences on the financial markets. Given these developments,
the UNIQA Group has also postponed its mediumterm
forecast until further notice.
Strong presence in Central, Eastern and South Eastern Europe
Targets and core strategies remain unchangedThe central strategic concern of the UNIQA Group is to preserve
its strong position in the Central and Eastern European markets
in times of tough competition and increasing globalisation. This
should make it possible for the Group to operate successfully in
the largely saturated markets in Austria and Central Europe while
at the same time actively taking advantage of the historic opportunities
presented by the exceptionally dynamic regions
encompassing 360 million people within and beyond the eastern
borders of the EU.
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In implementing
these goals,
UNIQA is pursuing
the following
basic strategic
approaches, and
has laid them out
in operational
action plans. |
The Group defined a target for average (pre-tax) return on equity
of at least 20% as a guide to ensure successful implementation
of its strategy; up until now, the medium-term forecast for the
result was €430 million by 2010. However, in light of the volatile
market environment, as already mentioned, this has been postponed
until further notice.
As far as continuing the Group’s internationalisation is concerned,
UNIQA aims in the medium term to bring the share of international
premiums within the entire Group’s premium volume up
to 50%. Of this amount, a considerable percentage should come
from Eastern Europe. In addition, the company has set concrete
medium-term targets for the respective market shares in the
various growth markets in Central, Eastern and South Eastern
Europe.
Well-positioned in Central, Eastern andWith 40 insurance companies in a total of 20 markets, a premium revenue of €5.8 billion and investments amounting to over €21 billion, UNIQA has managed to position itself in only a few years as one of the leading market players in Central, Eastern and South Eastern Europe. In the past few years, the Group was able to expand its sphere of activities in South Eastern Europe to include Albania, Macedonia and Kosovo. At the same time, by expanding its financial commitment in Bulgaria and Ukraine, it was able to further strengthen its position in these quickly growing markets.
The most recent highlight of this expansion was in November 2008 with the 100% takeover of UNITA, the sixth-largest Romanian property insurer, giving UNIQA a market share of over 7% in one of the largest markets in the European East in one swoop. International business becoming increasingly
Premium volume 2008 by region |
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The markets in Central, Eastern and South Eastern Europe currently
contribute 22% to the premium revenue of the UNIQA
Group; in 2008, the total portion of premiums generated by all
international business was over 38% and should be rising even
more. With this increasing internationalisation of business volume
as well as the Group results, the Group is not only diversifying
the risks of its corporate portfolio both regionally and by
product groups and distribution channels, it is also laying the
foundation for fulfilling its ambitious growth targets.
Growing share of international business |
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In the process, the UNIQA Group is pursuing differentiated strategies in the
various regions: In Austria, UNIQA wants to maintain its strong
position with segment-focused qualitative growth and higher returns. The Western
European markets, characterised by higher insurance density, contributed
roughly 16% of the Group premiums in 2008. The Group holds profitable niches
in these markets and succeeds through exclusive offerings in individual distribution
channels such as bank and broker sales. In Central, Eastern and South
Eastern Europe, the UNIQA Group is relying not only on the optimisation
of its financial commitment but also on a targeted increase of its market shares
and on a partnership-oriented acquisition of the majority of its various associated
companies. Ongoing expansion of market presence in CEE
In order to expand its position in the new markets in a focused
manner, UNIQA launched a series of dynamisation projects in
sales. The goal is to increase the various market shares in the
non-life sector to between 5% and 7% and in the life insurance
sector to 3%. This expansion of market presence is accompanied
by a uniform brand and marketing concept throughout the
Group as well as shared policies in IT, human resources and
management training. Successful partnership with RaiffeisenIn penetrating the new insurance markets, the “Preferred Partnership”
with the Raiffeisen bank group has proved to be very
valuable. The cooperation is an efficient sales channel that now
covers 13 countries in Eastern and South Eastern Europe; all of
these areas are still highly underdeveloped, both in insurance
and banking. This means that both partners profit from the cooperation,
which also promises to continue bringing aboveaverage
growth levels in the future. Since 2004, the first year of
this cooperation, the premium volume generated together has
increased to over €380 million in the year 2008.
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The “Preferred Partnership” with Raiffeisen
International has proven to be very valuable in a
number of markets in Eastern and South Eastern Europe. |
Innovative leadership ensures a competitive
“International growth and a
sustainable increase in yields
made possible by excellent
performance, innovative leadership
and ongoing optimisation;
these are our central
goals – yesterday, today
and tomorrow.”
Konstantin Klien, Chairman of the Management Board |
As it expands, the UNIQA Group will continue to persistently
leverage its strengths as a product pioneer and innovation
leader. The company will continue its approach of laying claim
to certain topics of the future, thereby confirming its reputation
as a trendsetter over the long term.
UNIQA can look back on a long tradition of innovative product
design, giving it an obvious competitive advantage on the market.
Recent examples of this are the first kilometre-dependent
motor vehicle insurance with additional safety features and a
highly innovative product for long-term old-age pensions, which
blends elements of classic and unit-linked life insurance with a completely new level of flexibility so that it can be adapted at
any time to the current needs of the customer. As market leader
in health insurance, UNIQA set new standards by combining
extensive medical insurance protection with effective preventive
measures and useful assistance services. Innovative services for
premium category customers, customised offers for children
and packages for expatriates round off the portfolio. Promoting customer loyalty with differentiated
Innovative products are supplemented by a broad range of service instruments
that create an attractive added value for customers, binding them more strongly
to the company. In this way, UNIQA proves its high level of expertise in developing
products with additional value and unique selling points in the market. This
reinforces the brand’s image and aids both the acquisition of new customers
and targeted cross-selling in the sense of a “total customer” strategy. Offers
such as the extensive information service UNIQA Companion,
the UNIQA QualityPartnership and the extremely popular weather
warnings by SMS and e-mail have all been very well received.
As an additional success factor, UNIQA cultivates the capability
of its employees to find innovative solutions by providing ongoing
training as part of its customised staff development
programmes. The outstanding quality of the Group’s human
capital on all levels is essential for the successful implementation
of its corporate strategy, which is why it is constantly refined
and developed through aggressive personnel management. This
includes flexibility and mobility across country borders. EBRD expands financial optionsAn important factor in UNIQA’s expansion in Eastern Europe is
provided by the European Bank for Reconstruction and Development
(EBRD). In 2007, the EBRD increased the scope of its
financial cooperation with the Group from the previous €70
million to the current €150 million. This provides UNIQA with
noticeably more funds for minority investments by the EBRD in
UNIQA companies in Central and Eastern Europe. Consistent process optimisation
Further potential for sustainable expansion has been created
with UNIQA’s third Profit Improvement Programme 2007–2010.
It should bring a clear improvement in the profit on ordinary
activities by 2010. To this end, UNIQA has developed concrete
action plans, making an effort to noticeably lower the claim and
cost ratios even further, to compress structures, eliminate redundant
work in the corporation and save money by outsourcing
certain tasks to international Group companies. The Management Board of UNIQA Versicherungen AG
Hannes Bogner, Andreas Brandstetter, Konstantin Klien, Karl Unger, Gottfried
Wanitschek (from left to right)
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Hannes Bogner Member of the
Management Board
- Born in 1959
- Academic background:
Business administration
Hannes Bogner has been
with the UNIQA Group
since 1994 and was appointed
to the Management
Board in 1998. Prior
to this, he worked at THS
Treuhand Wirtschaftsprüfungsgesellschaft
in
Salzburg and at PwC
PricewaterhouseCoopers in
Vienna. Mr. Bogner became
a tax consultant in 1988
and a chartered accountant
in 1993.
Responsible for:
Group
accounting, planning
and controlling, asset
management (back office),
investor relations,
industry customers and
reinsurance policy
Country responsibility:
Germany, Italy, Poland,
Switzerland
Andreas Brandstetter Member of the
Management Board
- Born in 1969
- Academic background:
Political science and
history
Dr. Brandstetter joined
the Group in 1997 and
was responsible for the
restructuring of UNIQA
Versicherungen AG in
1999; he was appointed
to the Management Board
in 2002. Before that, he
was head of the EU office
of the Austrian Raiffeisenverband
in Brussels and
completed the MBA programme
at the California
State University.
Responsible for:
New
markets, mergers &
acquisitions, bank sales
policy
Country responsibility:
Albania, Bulgaria,
Kosovo, Macedonia,
Montenegro, Romania,
Russia, Serbia, Slovenia,
Ukraine
Konstantin Klien Chairman of the
Management Board
- Born in 1951
- Academic background:
Economics
Dr. Klien joined the UNIQA
Group in October 2000
as Vice Chairman of the
Management Board.
Since 1 January 2002,
he has been Chairman of
the Management Board
and CEO of UNIQA
Versicherungen AG.
Dr. Klien began his professional
career at Arthur
Andersen and transferred
to Nordstern Versicherung
in 1978, where he was
appointed to the
Management Board in
1986. In 1991, he became
Chairman of the Board of
the holding company AXA
Austria and also exercises
executive functions for the
AXA companies in Central
Europe since 1995.
Responsible for:
Group
management, sales,
planning and controlling,
human resources,
marketing, communications,
investor relations,
internal auditing
Country responsibility:
Austria
Karl Unger Member of the
Management Board
- Born in 1953
- Academic background:
Actuarial mathematics
Karl Unger began his professional
career in 1979 as
an actuary at Volksfürsorge
Versicherung. He later
transferred to Nordstern
Versicherung, where he was
appointed to the Management
Board in 1994 and
took over the life insurance
department. In 1999, Karl
Unger took on responsibility
for Central Europe within
the AXA Group. He switched
to UNIQA in 2001 as head
of the administrative department
for corporate
planning and joined the
Management Board of
UNIQA Versicherungen AG
in 2002.
Responsible for:
Private
customer business, IT,
company organisation,
customer service, Group
actuarial office, risk
management
Country responsibility:
Liechtenstein, Hungary,
Slovakia
Gottfried Wanitschek Member of the
Management Board
- Born in 1955
- Academic background:
Law
Dr. Wanitschek started working in the insurance business back in the eighties
and was first head of the legal office and later secretary general of Raiffeisen
Versicherung AG. From 1991 until he was appointed to the Management Board of
UNIQA Versicherungen AG in 1997, he was director of Beteiligungsholding Leipnik-Lundenburger
Industrie AG, managing director of Kurier GmbH, member of the executive management
at Mediaprint and director of Zeitschriften-Verlagsbeteiligungs-AG.
Responsible for:
Asset
management (front
office), equity holdings,
property management,
legal affairs, general
administration, internal
auditing
Country responsibility:
Bosnia and Herzegovina,
Croatia, Czech Republic
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Acquisition costs | | The amount paid in currency or currency equivalent in acquiring an asset, or the current fair value of another form of payment at the time of acquisition. | | Actuarial provision | | Provision in the amount of the existing obligation to pay insurance claims and premium refunds, mainly in life and health insurance. The provision is calculated in line with actuarial methods as the balance of the cash value of future obligations less the cash value of future premiums. | | Affiliated companies | | Affiliated companies are the parent and its subsidiaries. Subsidiaries are companies in which the parent may exercise a controlling influence on business policy. This is the case, for instance, if the parent directly or indirectly holds more than half of the voting rights, if control agreements have been concluded or if the parent is in a position to nominate the majority of the members of the Management Board, or of other controlling bodies of the subsidiary. | | Asset allocation | | The structure of the investments, i.e. the portion of the total investments invested in the different vehicles of investment (e.g. shares, fixed income securities, holdings, real estate, money market instruments). | | Asset liability management | | Management concept in which decisions regarding company assets and liabilities are coordinated. This involves a continuous process in which strategies for assets and liabilities are formulated, implemented, monitored and revised, in order to achieve the financial goals with defined risk tolerances and restrictions. | | Associated companies | | These are participating interests consolidated at equity, i.e. by including them in the consolidated financial statements with the corresponding share in the equity. The major prerequisite for doing so is the possibility of the Group exercising a decisive influence on the operating and financial policy of the associated companies, regardless of whether the Group actually exercises that influence. | | At amortised cost | | Recognised on the balance sheets at the amortised cost, i.e. the difference between acquisition costs and the redemption amount is spread out over the corresponding pro rata term or capital share. | | Benchmark method | | An accounting and valuation method preferred under IFRS. | | Book value (amortised acquisition costs) | | The original acquisition costs minus lasting reduction in value and differences between acquisition costs and redemption amount are credited or debited to acquisition costs, with an effect on income until the amount falls due. | | Cash flow statement | | Shows the cash surplus from operating, investing and financing activities generated by the company during a specific period (source and use of funds). | | Combined ratio | | Sum of the operating expenses and the insurance benefits (both retained) in relation to the premiums earned in property and casualty insurance. | | Corporate governance | | Corporate governance refers to the legal and factual framework of the management and monitoring of companies. Corporate governance regulations are geared towards transparency and thus strengthen the trust in management and control focusing on value creation. | | Cost ratio | | Operating expenses (retained) in relation to premiums earned. | | Deferred acquisition costs | | These comprise the expenses incurred by an insurance company for concluding new insurance policies or renewing existing policies. Amongst other costs, they include acquisition commissions and expenses for handling the proposal form and risk underwriting. | | Deferred taxes (active/passive) | | Deferred taxes arise from temporary differences between the commercial balance sheet and the balance sheet for tax purposes, and those resulting from uniform valuation standards throughout the Group. The calculation of deferred taxes is based on the specific tax rates of each country that the Group companies are based in; changes in the tax rate that have been decided on as at the balance sheet date are included. | | Deposits receivable/payable under reinsurance business | | Amount receivable by the reinsurance company from the ceding company on the basis of the reinsurance business accepted by the reinsurer and which, for the latter, is similar to an investment. The amount equals the amount the ceding company provides as collateral. Analogously: deposits payable. | | Derivatives | | Financial contracts whose value depends on the price development of an underlying asset. | | Direct insurance business | | Insurance contract taken out by a direct (primary) insurance company with a private person or company, as opposed to reinsurance business accepted (indirect business) which refers to the business accepted from another direct (primary) insurer or reinsurance company. | | Diversification | | Diversification is a business policy instrument that generally involves positioning or distributing the activities of a company over various areas to avoid dependence on single factors. | | Duration | | The weighted average maturity of an interest-sensitive financial investment or a portfolio. It is a risk measure of the sensitivity of financial investments to changes in the rate of interest. | | Earnings per share | | The consolidated profit for the year divided by the average number of shares outstanding. Diluted earnings per share include subscription rights exercised or to be exercised in the number of shares, and in the consolidated profit for the year. | | Earned premiums | | The premiums earned on an accrual basis, which determine the year's income. For calculating the amount of earned premiums, in addition to gross premiums written, the change in unearned premiums in the business year, the provision for expected cancellations and other receivables from unwritten premiums are considered. | | Equity method | | Method used for recognising the interests in associated companies. They are, in principle, valued at the Group's share in the equity of these companies. In the case of interests in companies which also prepare consolidated financial statements, the valuation is based on the share in Group equity. Under current valuation, this measurement is to be adjusted for proportional equity changes, with the interest in the net income for the year being allocated to the consolidated result. | | FAS | | US Financial Accounting Standards laying down specifics of US GAAP (Generally Accepted Accounting Principles). | | Goodwill | | Excess over the purchase price for a subsidiary and the share in its equity after winding up the hidden reserves attributable to the purchaser on the date of acquisition. | | Gross amounts | | Presentation of the balance sheet items prior to the deduction of the amount which is allocated to the business ceded to a reinsurer. | | Hedging | | A way of insuring oneself against unwanted price fluctuations by the use of adequate counter positions, particularly in derivatives. | | IAS | | International Accounting Standards. | | IFRS | | International Financial Reporting Standards. As of 2002, the term IFRS refers to the entire concept of standards adopted by the International Accounting Standards Board. Standards that were adopted before that are still called International Accounting Standards (IAS). | | Insurance benefits | | Expenses (net of the reinsurer's share) arising from claim settlement, premium refunds and profit participation, and from changes in the actuarial provisions. | | Loss ratio | | Retained insurance benefits in property and casualty insurance, in relation to premiums earned. | | Minority interests | | Shares in the equity of associated companies that are not held by Group companies. | | Minority interests in net profit | | The share of net profit allocated not to the Group, but to shareholders outside of the Group holding interests in associated companies. | | Multitranches | | Bonds involving a put option under which the seller can sell additional bonds (with an identical or shorter term) to the buyer. The buyer receives a premium which increases the yield on the security as opposed to a 'normal' security having the same term and yield. | | Operating expenses | | This item includes acquisition expenses, the handling of the policy portfolio and reinsurance expenses. After deduction of commissions and profit participations received under reinsurance business ceded, the remaining expenses are the net operating expenses. | | Premiums | | Total premiums written. All compulsory premiums in the financial year, from insurance policies in direct business and reinsurance business accepted. | | Profit participation | | In life and health insurance, the policyholders are entitled by law and by contract to an adequate share in the profits generated by the company. The amount is reset every year. | | Provision for outstanding claims | | This provision includes the obligations for payment of insurance claims which have already occurred on the reporting date, but which are not yet completely settled. | | Provision for premium refunds and profit participation | | The part of the profit to be distributed to the policyholders is appropriated to a provision for premium refunds and/or profit participation. The provision also includes deferred amounts. | | Reinsurance | | An insurance company would cede parts of its own risk to another insurance company. | | Reinsurance premiums ceded | | Share of the premiums paid to the reinsurer as a consideration for insuring certain risks. | | Retention | | The part of the risks assumed which the (re)insurer does not cede. | | Retrocession | | Retrocession is the ceding of reinsurance business accepted to a retrocessionaire. Professional reinsurance companies and also other insurance companies, within their internal reinsurance business, use retrocession as an instrument for spreading and controlling risks. | | Return on equity | | The return on equity (before tax) is the profit on ordinary activities in relation to the average total equity (without consideration of the contained net profit). It is used as a general indication of the company' s efficiency. | | Revaluation reserves | | Unrealised profits and losses resulting from the difference in the present market value and acquisition value and/or the amortised acquisition costs for fixed interest securities are allocated to this reserve, without affecting income, after the deduction of deferred taxes and provisions for deferred profit participation (in life insurance). | | Risk | | The possibility that negative factors could influence the future financial situation of the company. Furthermore, in the insurance business, risk is understood as the possibility that a claim will arise because a danger that has been ensured against occurs. The insured object or insured person is also frequently referred to as a risk. | | Risk management | | Ongoing, systematic and continuous identification, analysis, evaluation and management of potential risks that could endanger the assets, financial situation and profits of a company over the medium and long terms. Target: to ensure the continued existence of a company, secure the company goals against disruptive events, with the aid of appropriate measures, and improve the company value. | | Securities available for sale | | Available-for-sale securities are securities that are neither meant to be held until maturity nor have they been acquired for short-term trading purposes. Available for sale at any time, they are recognised at par value on the balance sheet date. | | Securities held to maturity | | Securities representing money claims which are held with the intention of keeping them to maturity. They are recognised at amortised cost. | | Solvability | | Level of own funds in an insurance company. | | Stress test | | Stress tests are a special form of scenario analysis with the goal of being able to quantify the potential loss of portfolios during extreme fluctuations in the market. | | Subordinate debt | | Debt which is honoured in the case of winding up or bankruptcy only after all the other debts have been settled. | | Supplementary capital | | Capital paid in which is agreed to remain at the insurance company's disposal for at least five years, with no cancellation possible; it accrues interest only to the extent that this is covered by the net profit for the year. It can only be repaid prior to liquidation after a pro rata deduction of the net losses incurred during the retention period; in the case of liquidation, it can only be redeemed after those payables have been settled or secured that do not constitute equity or participation capital. | | Trading portfolio | | Debt securities, shares and other securities (primarily derivatives and structured products) which are held mainly for short-term trading purposes. They are recognised at current market value. | | Unearned premiums | | That part of the premium income of the year which refers to periods of insurance that lie after the reporting date, i.e. which have not yet been earned on the reporting date. In the balance sheet, with the exception of life insurance, unearned premiums have to be shown as a separate line item under the actuarial provisions. | | US GAAP | | US Generally Accepted Accounting Principles. | | Value at risk | | A method for measuring market risks in order to calculate the expected value of a loss that might occur in an unfavourable market situation, with a determined probability within a defined period of time. | |
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