Wiener Städtische Versicherung AG Vienna Insurance Group, Vienna is the parent company of the Vienna Insurance Group. All companies that are under the control (“control principle”) of Wiener Städtische AG (“subsidiaries”) are fully consolidated in the consolidated financial statements. Control exists when Wiener Städtische AG is, directly or indirectly, in a position to determine the financial and business policy of a subsidiary. Consolidation of a subsidiary starts when control is gained and ends when this influence no longer exists. The consolidated financial statements include a total of 28 domestic and 41 foreign companies. Subsidiaries that are immaterial for a true and fair presentation of the net assets, financial position and results of operations of the Group were not included in the scope of consolidation. A total of 21 domestic and 13 foreign subsidiaries were excluded for this reason.

Companies that are managed as a joint venture with other companies (“joint venture companies”) are included using the proportional consolidation method (recognition of a proportionate share of the assets, liabilities, income and expenses).

This applies to those companies that were managed as a joint venture with TBIH Financial Services Group N.V., Amsterdam. Since the company is a pure holding company and the business operations are conducted in in the associated enterprises, a 60% share of the latter is directly incorporated in the consolidated financial statements. During the reporting period, four companies were included in the consolidated financial statements using proportional consolidation.

Associated companies are companies over which Wiener Städtische AG has a significant influence, but does not exercise control. These companies are accounted for using the equity method. The present consolidated financial statements include 5 domestic at equity consolidated companies and 1 foreign at equity consolidated company. In addition, 13 affiliated companies that are of lesser importance for the results of operations of the Group were also accounted for using the equity method. In accordance with the requirements of IAS 39 “Financial instruments”, 34 companies of minor importance were treated as available-for-sale financial instruments and measured accordingly at fair value. Wiener Städtische AG owns a 31.6% interest in Wüstenrot Versicherungs-Aktiengesellschaft, Salzburg. Significant influence within the meaning of IAS 28 does not exist, since Wiener Städtische is not in a position to receive timely IFRS financial statements from Wüstenrot Versicherungs-Aktiengesellschaft. In accordance with the requirements of IAS 39 “Financial instruments”, the shares are treated as available-for-sale financial instruments. For more information, please refer to note 6, “Other securities”, in the Notes to the Consolidated Financial Statements.

Fully controlled investment funds (“special funds”) were fully consolidated in accordance with the requirements of SIC 12. Mutual funds in which the Vienna Insurance Group holds the majority of units were not fully consolidated, since Vienna Insurance Group has no control over such mutual funds.

The following non-profit housing development companies were included in the Vienna Insurance Group consolidated financial statements.

  • “Neue Heimat” Gemeinnützige Wohnungs- und Siedlungsgesellschaft in Oberösterreich GmbH, Linz
  • Alpenländische Heimstätte Gemeinnützige Wohnungsbau- und Siedlungsgesellschaft m.b.H., Innsbruck
  • Erste gemeinnützige Wohnungsgesellschaft “Heimstätte Gesellschaft m.b.H.”, Vienna
  • GIWOG Gemeinnützige Industrie-Wohnungs-AG, Leonding
  • GEMYSAG Gemeinnützige Mürz-Ybbs-Siedlungsanlagen-GmbH, Kapfenberg
  • “Schwarzatal” Gemeinnützige Wohnungs- und Siedlungs-anlagen GmbH, Vienna

Distribution of the annual profit of non-profit housing development companies is subject to statutory restrictions in Austria and there is only limited access to the assets of such companies. The total profit before taxes of all consolidated non-profit housing development companies was EUR 31,408,000 (EUR 35,253,000).

The share of all non-profit housing development companies in the Vienna Insurance Group’s real estate portfolio is EUR 1,922,048,000 (EUR 1,784,510,000).

First-time inclusion of a subsidiary is performed in accordance with the purchase method of accounting by allocating the cost of acquisition to the identifiable assets and liabilities of the acquired company. The amount by which the cost of acquisition of the subsidiary exceeds the fair value of the net assets acquired is recognised as goodwill. If the fair value of the net assets acquired exceeds the cost of acquisition (positive differences from capital consolidation), after a second critical appraisal of the recognition and valuation of the assets and liabilities acquired, the Vienna Insurance Group recognises this excess amount as income on the income statement.

With respect to subsidiaries, joint ventures, and at equity consolidated companies acquired before 1 January 2004, the previous inclusion or valuation rules were carried over to the IFRS opening balance sheet. In the consolidated financial statements prepared in accordance with the Austrian commercial code and insurance supervisory regulations up to 31 December 2004, asset-side differences from capital consolidation of acquired insurance companies were offset against consolidated reserves instead of being recognised as goodwill. Therefore, in accordance with IFRS 1, the revaluation related to these companies owing to the conversion to IFRS were also offset against consolidated equity. Intercompany transactions, receivables, liabilities, and significant unrealized profits (intercompany profits) are eliminated. Unrealised losses are only eliminated if the unrealized loss is not the result of impairment.

In 2008, the following changes occurred in the scope of consolidation:

The following companies were deconsolidated during the financial year:

Deconsolidations (table)

The deconsolidation of the above companies had the following effects:

Effects of the deconsolidation on the Balance Sheet and the Income Statement (table)

Total gains of around EUR 388 million were realised from the deconsolidation of real estate companies, or Bank Austria Creditanstalt Versicherung and Unita Vienna Insurance Group, respectively.

During financial year 2008, Benefia Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group, Warsaw, was merged with Royal Polska Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group, Warsaw, as the absorbing company. The name of the absorbing company was changed to Benefia Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group, Warsaw.

In addition, I.V., s.r.o., Bratislava, was merged with Kooperativa pojišt’ovna a.s. Vienna Insurance Group, Bratislava, as the absorbing company.

FinLife Towarzystwo Ubezpieczeń na Życie S.A., Warsaw, which was not previously consolidated, was merged in financial year 2008 with Towarzystwo Ubezpieczeń na Życie Compensa Spolka Akcyjna Vienna Insurance Group, Warsaw, as the absorbing company.

During the reporting period from 1 January 2008 to 31 December 2008, the Vienna Insurance Group acquired control over the following subsidiaries:

Companies acquired (table)
Expansion of the scope of consolidation (table)
Companies founded (table)

SC BCR Asigurari Vienna Insurance Group S.A.1, Bucharest, and SC BCR Asigurari de Viata Vienna Insurance Group S.A.1, Bucharest, were not included in the consolidated financial statements as of 31 December 2008 as the Vienna Insurance Group as of the reporting date had not yet acquired a controlling share of the voting rights as specified in IAS 27.13. For this reason, both companies will be included in the Vienna Insurance Group’s consolidated financial statements in 2009.

It should be noted that the allocation of the purchase price for the newly consolidated companies is still provisional and that all company purchases were made with cash or cash equivalents.

Information on the companies that are fully consolidated, proportionally consolidated, or accounted for using the equity method in the consolidated financial statements as of 31 December 2008 is provided in Note 4 “Ownership interests” in the Notes to the Consolidated Financial Statements.

1 New company name subject to approval by the appropriate executive bodies of the Company and registration of the amendment to the articles of association by the local authorities.

Audited information