Development in the current financial year

Despite the worsening economic conditions, the premium volume of the UNIQA Group exhibited very satisfactory development in the first two months of 2009. The premium growth in property and casualty insurance was 4.5%, in health insurance 3.7% and in life insurance 0.8%. Overall, growth in the months of January and February was roughly 3.2%. While premiums in Austria increased by 1.5%, growth in the international markets was significantly stronger at 6.5%.

Property and casualty insurance

On the basis of numerous initiatives in product development, customer loyalty management and efficiency improvement, UNIQA expects very solid developments in the area of property and casualty insurance once again in 2009.

The growth of the legal expense insurance line proved very favourable in 2008. However, the financial crisis and its effects on the real economy will also have their consequences for this line. In various cases, mass losses in the area of asset investment have already been claimed. In order to avoid exposure to these difficult-to-assess risks, the UNIQA Group has already defined the majority as excluded risks. The growth goals for 2009 are also not being scaled back, meaning that continuous observation of the general situation in the claims area will be that much more important.

Unfortunately, no relief is in sight for the loss ratio in the storm risk segment. Countermeasures such as segmentation have already been introduced, and the course already begun in 2008 will continue to be consistently followed. UNIQA will also continue to expand the HORA (High Water Risk Zoning System Austria) system in coming years in cooperation with the Insurance Association of Austria and the Ministry of Agriculture, Forestry, Environment and Water Management. The goal of this system is to create and refine a risk map that makes it possible to better assess possible natural dangers. In the area of natural dangers as well as other risk areas such as burglary, UNIQA relies on various preventive measures to avoid losses. Examples include security checks as well as the severe weather warnings offered exclusively by UNIQA within the insurance industry.

In other areas, a subdued investment level is expected in property insurance, particularly among commercial customers. In order to continue to support the customers in this difficult phase, the strategy of complexity reduction and efficiency improvement – above all through offering of standardised customer-oriented products – will be sustained. Increased productivity in sales, efficiency gains and process streamlining have already been successfully introduced in the private customer business. In 2009, UNIQA will implement these key practices in the commercial area as well.

Further refinements in the private customer business will be seen in 2009 as well. For instance, new opportunities will be offered by scoring models in the new private customer product arriving on the market in 2009. The goal of these models is an individual and risk-appropriate premium definition, in which UNIQA will naturally continue to pursue the goal of climate protection in accordance with the course already set jointly with Raiffeisen. The features already present here in the current product will be carried over and further expanded.

The SuccessPartnership, a customer advantage programme with a selection of supplemental services for freelancers, farmers and small and mediumsized businesses, will be strongly promoted in the corporate customer segment. More than 7,000 new members are expected here for the year 2009. The goal of this service and customer loyalty instrument is to reduce cancellation rates by promoting customer loyalty and the claimsdependent SuccessBonus. Cross-selling will also be heavily expanded in the corporate customer business through additional training courses and centrally supported campaigns. In addition, a focus will be placed on innovative product design in connection with risk management measures. As an example, the risk management with respect to legionella for hospitals insured with UNIQA has been successfully completed in this area. Where this was necessary due to the results of investigations, it was possible to significantly reduce this risk through the implementation of preventive measures.

For its cableway customers, UNIQA has offered a free cableway weather information system (SEWIS) since autumn 2008. This allows every single cable-way operator to access weather forecasts for their specific location. This reduces the risk potential for UNIQA as an insurer since exposed cableways can be shut down in time in the event of a storm or gale warning, for example. The advantage for the insured lies in improved use of resources through higher forecasting precision. The progressing internationalisation of the Group allows it to professionally support and serve its internationally active customers with know-how and custom-tailored product solutions in an increasing number of markets.

In motor vehicle insurance, a new coverage component will be introduced to the market for the first time in 2009 – driver protection. Previously, in the event of an accident, the driver at fault received nothing for his own personal injuries or to support surviving dependents. With this driver protection, UNIQA also offers these drivers benefits of up to €1 million for care and treatment costs, living expenses, lost salary and compensation for pain and suffering. Also new is the classification of the product range in liability and comprehensive insurance into three packages: “compact”, “optimal” and “premium”. The compact comprehensive package, in particular, offers all owners of medium to old used cars the opportunity to insure themselves against the consequences of natural damage, such as storms and hail, at a low price. In addition, they receive compensation in event of theft to secure their continued mobility.

In 2009, Raiffeisen Versicherung will place an additional focus on scoring for the Raiffeisen motor vehicle and property insurance policies offered to Raiffeisenbank customers. This emphasis pursues the goal of more individual and risk-appropriate premium definitions. A driver protection component was also presented in March as part of the introduction of a new motor vehicle insurance rate.

Health insurance

Once again in 2009, it was possible to extend direct billing agreements, which are important for the special class insurance, with all contract partners in Austria. The negotiations, which continued into February, were hardfought on both sides and were characterised by high price adjustment demands by the hospitals and physicians as well as by the prevailing economic slowdown. In the end, however, reasonable compromises for all parties were reached with only relatively moderate premium consequences for the insured.

The successful issuance of roughly 540,000 new MedUNIQA cards to all special class insured was completed in January. The credit card sized card provides access to special class services but can also be used for the storage of diagnoses, if desired. Medical histories, laboratory diagnoses, X-ray and ultrasound images, etc. can be conveniently managed via the free Internet portal. When visiting the doctor, the insured is spared the hassle of locating the required documents. This not only simplifies the handling of documents between countries, but also prevents frequently expensive repeat examinations. Only the insured and a specifically authorised physician have access to the portal via a secure password.

The new MedUNIQA card also has much more to offer: With the UNIQA Medikamentenkompass, UNIQA special class customers receive the additional advantage of checking their medications for possible interactions on the Internet. Also free, the Spitalskompass offers information on the staff and technical capabilities as well as treatment performance of Austrian care facilities, including how often specific treatments are performed in various hospitals. It is also possible to request a reduced-price emergency card, on which emergency data such as blood group, immunisations, allergies and medications as well as the contact data of close relatives can be saved for retrieval in the ambulance.

The new Internet health portal of UNIQA is scheduled to go live in April. Over three million hits per year are already being received at www. medUNIQA.at. The completely renovated portal will continue to encompass the previous UNIQA VitalClub website. New, however, is the interactive design that also offers the ability to access individualised information.

Also planned for April is the start of an initiative in company health manage- ment specially conceived for UNIQA customers. The UNIQA VitalBilanz for companies and its modules (e.g. movement balance, nutrition balance, mental balance) represents a comprehensive service offering. This project is being implemented by UNIQA HealthService GmbH.

In Eastern Europe, UNIQA is starting an offensive in the still underdeveloped business of private health insurance. Corresponding projects have already begun in Hungary, the Czech Republic, Poland, Slovakia, Croatia and Bosnia and Herzegovina. Serbia will follow within the first half of 2009. In Germany, the first few months of the new year alone have shown that the wave of terminations and policy changes expected for the first half of the year from customers with full health insurance will not take place. UNIQA Group member Mannheimer Krankenversicherung has been very successful with its new product line PURISMA and is constantly signing up new customers. In Italy, the entire product portfolio of UNIQA Assicurazioni was renewed last year. The full effects of the change are now unfolding. According to the proven Austrian example, UNIQA offers exclusively lifelong coverage concepts here that cannot be terminated by the insurer, thereby strengthening its already outstanding market position on the Italian market achieved through the consistent quality policies implemented to date.

Life insurance

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

In the area of unit- and index-linked life insurance in particular, UNIQA was able to not only maintain its market leadership in 2008 but also expanded on it further. Continued positive reception of the unit-linked life insurance in 2009 is expected in Austria as well as in Germany and Slovenia within the framework of the free movement of services. Development in the segment of single premium policies in the form of index-linked life insurance is also expected to be positive. While the products within the framework of the state-subsidised pension provisions are being left largely unchanged, UNIQA will upgrade the classic unit- and index-linked insurance products with new investment and combination options in the 2009 financial year.

One focus of the UNIQA sales and marketing activities in 2009 will continue to be the innovative product FlexSolution, which saw further development in 2008 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 stock market situation.

The financial crisis is only one of the reasons why the concept of “security” will gain in importance in 2009 and along with it classic, pure life insurance as one of the most secure forms of investment. The difference from other financial products lies in the special protection for the insured even in the event of the bankruptcy of the insurer, since the investment amounts are separately secured in the full amount of the insurer’s obligations from such insurance contracts. In addition, annually allocated gains are guaranteed and can no longer be changed.

As a leader in matters of old-age pensions, UNIQA also places great value on the issue of nursing care insurance. Since the start of 2009, a new variant of nursing care pension insurance has been offered for the target group of people under 40. This new rate offers younger people an inexpensive starting premium that then rises annually up to age 65, after which it remains constant for the remainder of their life.

In 2009, Raiffeisen Versicherung is taking up security as a central life issue and is putting a focus on the financial foundation for security in the form of the Raiffeisen Security Check. This new consulting concept for holistic customer advice encompasses four areas of security (provisions, investments, mobility and living). The security fields of provisions and investments are covered by the offered life insurance products: occupational disability, provisions for surviving dependents, provisions for serious illnesses, nursing care, premium-discounted old-age pensions, pension provisions with lifelong and guaranteed pension payments and unit-linked life insurance.

At the start of 2009, the cooperation with Raiffeisen Versicherung and Raiffeisen Capital Management was also established in the area of premium- discounted old-age pensions. In place of the previous two variants in the form of “My Subsidised Life Pension” and the unit-linked solution “Raiffeisen Pension Fund Austria”, customers of Raiffeisen banks now have access to a single insurance variant as a combined old-age pension product. The investment is handled 100% by Raiffeisen Capital Management, Austria’s largest investment company.

As part of its annual autumn provision campaign, Raiffeisen Versicherung will offer a new variant of flexible life insurance in 2009. As with the UNIQA product FlexSolution, the customer determines how his premium is split between an investment with capital guarantee and a yield-oriented component. This weighting can be changed at any time at no charge. This choice regarding the amount of death benefits establishes nearly unlimited flexibility in investment, term definition and risk protection.

In Central and Eastern Europe, the UNIQA Group will further intensify its cooperation with the Raiffeisen banking group in 2009. The focus in the product area continues to lie on combined banking and insurance products as well as the successive introduction of capital-forming life insurance products. With the planned founding of a new life insurance company in Russia, the existing cooperation with Raiffeisen will be expanded to the Russian market, bringing the total number of countries involved in the cooperation from 13 to 14. Apart from Russia, the UNIQA Group is intensifying its sales work in customised life insurance products via the Raiffeisen banks in Serbia and, since February 2009, also in Bulgaria. A children’s product as well as endowment and life insurance are offered. In Albania, after purchasing the SIGAL insurance company, UNIQA became the first insurer on the market to offer a children’s product in addition to classic endowment and life insurance. Active selling of the product will begin in 2009 within the framework of a structured sales cooperation.

Outside of Europe, UNIQA founded in 2008 the life and health insurance company “Takaful Al-Emarat”, with offices in Dubai, as a joint venture with the insurance company Al Buhaira. The company, which is currently still being built up, should offer as of 2009 health insurance and life insurance products according to Sharia rules, a product type that is also meeting with increased interest in Europe as well. Starting with Dubai and the United Arab Emirates, the business activities should be expanded in future to additional Gulf States and other Muslim countries.

Occasioned by the 3rd EU Money Laundering Directive, UNIQA has established the office of “International Money Laundering Prevention”. The goal of this office is to position UNIQA as a leader in this field through development of prevention systems, realistic risk assessments of the market and of customer behaviour, training measures, the expansion of risk-based IT systems, increased controlling and a generally high standard of precautions. Special value is placed on cost-efficient standardisation of the prevention measures and reporting systems, intensive communication and international information exchange and cooperation.

Information according to Section 243a paragraph 1 of the Austrian Business Code

1. The share capital of UNIQA Versicherungen AG is €131,673,000 and comprises 131,673,000 individual no par value shares in the name of the bearer. The share capital has been paid in full. All shares have the same rights and obligations.
2. Due to their voting commitments, the shares of Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH, BL Syndikat Beteiligungs Gesellschaft m.b.H., Collegialität Versicherung auf Gegenseitigkeit, Raiffeisen Centrobank AG and UQ Beteiligung GmbH are counted together. Reciprocal purchase option rights have been agreed upon between the first three shareholders listed.
3. Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH holds 35.79% of the share capital of UNIQA Versicherungen AG and BL Syndikat Beteiligungs Gesellschaft m.b.H. holds 32.45%.
4. No shares with special control rights have been issued.
5. No employee capital participation models exist.
6. No provisions of the articles or other provisions exist that go beyond the statutory provisions for appointing Management Board and Supervisory Board members or for modifying the articles with the exception of the rule that when a Supervisory Board member turns 70 years of age, he or she shall retire from the Supervisory Board at the end of the next Annual General Meeting.
7. According to the decision of the General Meeting of 23 May 2005, the Management Board is authorised to increase the share capital by a total of €50 million up to 30 June 2010, inclusive, with the approval of the Supervisory Board. On 29 October and 14 November 2008, the Management Board resolved, with approval of the Supervisory Board, to increase the share capital of the company through the issue of 11,895,192 new, no-par bearer unit shares with voting rights under retention of the statutory subscription rights of the shareholders. Furthermore, the Management Board passed a resolution on 19 May 2008 that UNIQA will repurchase its own shares. The Supervisory Board of the company confirmed the decision of the Management Board in its meeting on 19 May 2008. In this connection, the ongoing programme for resale of shares was brought to a close. The programme for repurchasing shares entered into effect on 22 May 2008. In the reporting year, 469,650 own shares were purchased via the stock exchange. As at 31 December 2008, the company held 819,650 own shares.
8. With regard to the associated company STRABAG SE, corresponding agreements with other shareholders of this company exist.
9. No reimbursement agreements exist for the event of a public takeover offer.

Proposed appropriation of profit

The individual accounts of UNIQA Versicherungen AG, prepared in accordance with the Austrian Business Code, report an annual net profit for the 2008 financial year of €53,190,348.20 (2007: €60,036,789.70). The Management Board shall thus recommend to the Annual General Meeting on 25 May 2009, that the annual net profit be distributed as a dividend of 40 cents on each of the 131,673,000 individual share certificates issued at the balance sheet date and entitled to receive a dividend, and that the remaining amount be carried forward to a new account.

Vienna, 15 April 2009