The Vienna Insurance Group has set itself the goal of keeping its combined ratio significantly below 100%.

In 2008, as a result of its acquisition of Erste Group’s insurance operations and through organic growth, the Vienna Insurance Group sustainably expanded its position of market leadership in its core CEE markets. After achieving a leading position in the non-life segment in 2007, a systematic implementation of the Group’s strategy and its rapid identification of and reaction to current developments have now permitted it to become one of this region’s leading life insurers as well.

Despite the challenging economic environment, the Vienna Insurance Group is expecting premium growth in 2009. A precise forecast is not possible at the moment, due to the high exchange rate volatility being experienced by CEE currencies. New business areas are intended to contribute a portion of the expected premium increase. As an immediate need is seen for health insurance in the CEE region, the first step is being taken by expanding the health insurance business from its current exclusive base of operations in Austria to the CEE region. An expansion of legal protection insurance into this economic area, in collaboration with a partner, is being contemplated as a second step.

The Vienna Insurance Group has set itself the goal of keeping its combined ratio significantly below 100% throughout the economic cycle. In order to ensure that this goal is achieved, an efficiency improvement project has been begun that has identified potential optimisations of at least EUR 100 million. Most of the measures in this Group-wide, forward-looking action program, which focuses on material costs and extensive process improvements at both the individual company and Group levels, are to be implemented over the current year. Company management anticipates that it can increase the potential for optimisation by as early as 2010.

Due to the uncertain situation on the financial markets, the Group does not currently feel able to make a precise forecast of profit before taxes for the year 2009 as a whole. The current volatility makes a serious forecast of the financial result, a major driver of insurance company earnings, impossible at the present time. Based on the current outlook, this also applies to the following year.

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