Segment Income Statement

Classified by segment

	Property and casualty		Health		Life		Consolidation		Group
	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000
1. a) Gross premiums written	2,438,009	2,199,785	947,644	907,761	1,653,326	1,422,398	–36,615	–2,054	5,002,364	4,527,889
1. Premiums written (retained)	2,282,537	1,887,344	946,177	906,356	1,573,420	1,342,880	–30,724	2,861	4,771,410	4,139,440
2. Change due to premiums earned (retained)	–32,827	–32,238	315	–736	–3,254	–480	–5,272	391	–41,038	–33,063
3. Premiums earned (retained)	2,249,710	1,855,105	946,492	905,620	1,570,166	1,342,401	–35,996	3,252	4,730,372	4,106,377
4. Income from fees and provisions	15,563	63,482	116	106	6,377	11,484	–2,657	–3,646	19,399	71,426
5. Net investment income	60,597	278,876	17,475	137,181	150,925	579,318	–1,401	–2,369	227,596	993,005
6. Other income	74,573	29,961	1,204	1,047	14,548	7,283	–10,317	–1,160	80,008	37,131
7. Insurance benefits	–1,443,949	–1,253,528	–809,683	–811,254	–1,328,260	–1,534,497	20,270	2,255	–3,561,622	–3,597,024
8. Operating expenses	–762,816	–667,457	–134,285	–127,892	–369,739	–332,376	10,035	622	–1,256,805	–1,127,104
9. Other expenses	–71,353	–45,970	–1,808	–3,285	–43,408	–37,792	17,153	479	–99,416	–86,569
10. Amortisation of goodwill	0	–4,688	0	0	–10,530	–14,407	0	0	–10,530	–19,095
11. Operating profit	122,325	255,780	19,511	101,522	–9,921	21,412	–2,913	–567	129,002	378,147
12. Financing costs	–24,220	–23,276	0	0	–14,565	–14,615	0	0	–38,785	–37,891
13. Profit on ordinary activities	98,106	232,504	19,511	101,522	–24,486	6,797	–2,913	–567	90,217	340,256
14. Income taxes	–8,982	–45,386	–4,400	–24,425	–10,087	–1,452	0	0	–23,470	–71,263
15. Net profit	89,124	187,118	15,110	77,097	–34,573	5,345	–2,913	–567	66,748	268,993
of which consolidated profit	68,836	179,418	9,574	55,813	–22,189	12,440	–2,913	–567	53,308	247,103
of which minority interests	20,287	7,700	5,536	21,284	–12,383	–7,095	0	0	13,440	21,889

Impairment by segment

	Property and casualty		Health		Life		Consolidation		Group
	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000
Goodwill
Change in impairment for current year	0	–4,689	0	0	0	0	0	0	0	–4,689
of which reallocation affecting income	0	–4,689	0	0	0	0	0	0	0	–4,689

Investments
Change in impairment for current year	–51,830	–50,359	–43,099	–17,063	–387,373	–138,422	0	0	–482,302	–205,844
of which reallocation/reinstatement of original values affecting income	–51,830	–50,359	–43,099	–17,063	–387,373	–138,422	0	0	–482,302	–205,844

Classified by region

	Premiums earned (retained)		Net investment income		Insurance benefits		Operating expenses		Profit on ordinary activities
	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000	2008 € 000	2007 € 000
Western Europe (incl. Austria)	3,919,460	3,686,823	173,326	954,617	–2,971,455	–3,352,784	–1,066,143	–1,004,440	42,758	306,021
Austria	2,957,792	2,889,769	97,602	863,864	–2,273,314	–2,754,509	–719,861	–671,928	–5,250	294,254

Other Europe	1,808,576	1,213,356	138,569	138,176	–1,308,578	–844,771	–671,579	–575,905	86,347	53,399
Western Europe	961,668	797,053	75,724	90,754	–698,141	–598,276	–346,283	–332,512	48,007	11,767
Italy	214,251	193,335	37,045	48,817	–156,123	–160,667	–77,010	–78,653	18,182	4,400
Germany	298,865	288,006	43,390	29,188	–239,792	–222,918	–128,981	–127,864	14,859	4,024
Switzerland	445,150	311,286	–6,761	9,612	–297,603	–209,950	–136,096	–123,622	18,764	3,021
Liechtenstein	3,402	4,426	2,049	3,026	–4,623	–4,741	–4,195	–2,374	–3,799	212
The Netherlands	0	0	2	110	0	0	0	0	2	110
Eastern Europe	846,908	416,303	62,846	47,422	–610,437	–246,495	–325,296	–243,393	38,339	41,632
Poland	464,871	139,939	16,832	12,844	–409,869	–102,632	–74,519	–59,877	6,473	7,817
Hungary	87,916	86,788	31,526	20,953	–30,953	–34,682	–74,339	–66,732	25,525	20,314
Czech Republic	104,562	77,084	–557	5,176	–51,680	–40,445	–55,399	–45,000	13,504	13,086
Bulgaria	42,995	40,086	1,076	1,408	–23,402	–25,676	–26,725	–24,670	1,484	–2,259
Slovakia	46,226	37,643	3,293	2986	–26,990	–19,981	–30,825	–23,821	4,600	7341
Ukraine	29,674	143	1,160	118	–11,776	–2	–19,720	–680	–9,381	–372
Romania	20,234	0	2,159	637	–21,573	0	–9,732	0	–231	535
Serbia	19,953	12,896	4,493	1501	–12,899	–9,239	–15,301	–9,029	–3,062	–4,791
Croatia	16,341	11,815	1,678	995	–12,887	–7,767	–10,981	–8,772	–175	–99
Bosnia and Herzegovina	13,464	9,800	1,737	799	–8,003	–5,997	–6,233	–4,687	1433	146
Others	674	108	–551	4	–405	–74	–1,523	–126	–1,831	–86

Total before consolidation	4,766,368	4,103,125	236,172	100,2039	–3,581,892	–3,599,279	–1,391,439	–1,247,833	81,097	347,653

Consolidation (based on geographic segments)	–35,996	3252	–8,576	–9,035	20270	2,255	134,634	120,729	9,120	–7,398

In the consolidated financial statements	4,730,372	4,106,377	227,596	993,005	–3,561,622	–3,597,024	–1,256,805	–1,127,104	90,217	340,256

The investment income and profit on ordinary activity by region are presented net of the capital consolidation effects contained in the investment income. The consolidation item includes the expenditure and income consolidation from operational business relations between Group companies on the basis of geographic segments.

Glossary

Close Glossary

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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