Profitable International Growth

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 unchanged

The 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.

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 and

With 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

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

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 Raiffeisen

In 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.

The “Preferred Partnership” with Raiffeisen International has proven to be very valuable in a number of markets in Eastern and South Eastern Europe.