ALM (Asset- und Liability-Management)

ALM refers to the continuous matching of corporate assets and liabilities. It ensures that promised payments are covered by achievable returns. ALM serves as a management instrument for developing a strategy with which financial goals can be achieved within prescribed risk limits.

Annuity tables

Annuity tables are the most important calculation tool used in life and health insurance. The annuity tables used by insurers are based on the mortality tables derived from the population census. These are revised every ten years to take into account changing conditions, such as medical advances and improved living conditions.

Assets under management

Total capital assets that are valued at fair value, under management by the group, and where the group is responsible for asset performance.

Associated companies

The parent company and its subsidiaries are considered to be associated companies if the parent company is able to exert control over the business policies of the subsidiary. Examples of this are where the parent company directly or indirectly holds more than half of all voting rights, a controlling agreement exists, or it is possible to appoint the majority of the members of the Managing Board or other executive bodies of the subsidiary (§ 244 UGB).

Available for sale securities

Available for sale securities include securities that were not acquired with the intention of being held-to-maturity, or for short-term trading purposes. These available for sale securities are recognised at market value as of the balance sheet reporting date. The difference between market value and amortized cost (unrealised gains and losses) is applied directly to equity.

Cash flow statement

A presentation of the changes in cash and cash equivalents during a fiscal year, broken down into the three areas of ordinary activities, investing activities, and financing activities.

CEE (Central and Eastern Europe)

The Vienna Insurance Group defines “CEE” as all of the growth markets of Central and Eastern Europe, in which the Group operates. These include the Czech Republic, Slovakia, Poland, Romania, Albania, Bulgaria, Estonia, Georgia, Croatia, Latvia, Lithuania, Macedonia, Russia, Serbia, Slovenia, Turkey, the Ukraine, Hungary and Belarus.

In case of a deviation from the concept of "CEE" defined here, a footnote explains and describes what is understood by the concept of “CEE” in the given situation. When CEE is used in a sense that differs from the definition provided here, a footnote is provided indicating the definition of CEE being used in that particular case. It must also be noted that the definition of CEE may differ from those used by other companies, financial institutions (e.g. IWF, OECD, WIFI, IHS) etc.

Ceded reinsurance premiums

Share of the premiums to which the reinsurer is entitled in return for reinsuring certain risks.

CEIOPS (Committee of European Insurance and Occupational Pensions Supervisors)

CEIOPS is an independent committee for insurance and company pension plans, which consists of high-ranking representatives of supervisory authorities for insurance in the EU and EEA member countries. The committee advises the European Commission on the development of drafts for implementing provisions and contributes to a consistent implementation of the directives.

Claims incurred but not reported

Losses that are reported in the current fiscal year but occurred in the previous year. Each year as of the balance sheet reporting date, a reserve (= incurred but not reported reserve, IBNR) is formed for losses that relate to the financial statement year but are not reported until the following year.

Claims ratio

The percentage ratio of expenses for insurance claims divided by gross earned premiums. The calculation is based on the expenses for insurance claims in the income statement less claims handling expenses.

Combined ratio (net)

When the total of all items in the income statement that contribute to the profit before taxes, except for income from capital assets and the value of gross earned premiums itself, is divided by gross earned premiums, the result is called the combined ratio. If this ratio is less than 100%, the company is earning a profit from the underwriting portion of the business. This ratio is only calculated for property and casualty insurance. Since the reinsurers’ share is taken into account in the calculation, theresult is a net combined ratio.


The financial assets of the parent company and those of the subsidiaries are combined when the consolidated financial statements are prepared by the parent company. During this process, intercompany capital combinations, interim profit/loss, payables and receivables, and income and expenses between group companies are eliminated.

Deposits on assumed and ceded reinsurance business

A claim by the reinsuring company against the ceding company for deposits that it retains. When business is assumed, the reinsurer’s share of premiums and claims are retained as security by the ceding insurance company. The deposits on ceded reinsurance item is analogous.

Derivative financial instruments (derivatives)

Financial contracts whose value depends on the price of an underlying asset. Derivatives can be classified systematically according to the nature of the underlying asset (interest rates, share prices, currency rates, or commodity prices). Options, futures, forwards and swaps are important examples of derivative financial instruments.

Direct business

Insurance business where an immediate legal relationship exists between the insurer and policyholder.

Earned premiums

The portion of premiums written which is allocated to the current fiscal year.

Earnings per share (basic/diluted)

The ratio of consolidated net income divided by the average number of shares outstanding. The diluted earnings per share include convertible securities that have been exercised, or are still available for exercise, in the calculation of the number of shares and net income. The convertible securities consist of convertible bonds and stock options.

Enterprise Risk Management (ERM)

Risk and opportunity management. Identification, assessment, analysis and control of opportunities and risks.

Equity method

Shares in non-consolidated affiliated companies and non-profit companies, and shares in associated companies are recognised using this method. As a rule, the value recognised corresponds to the Group’s proportional share of the equity in these companies. In the case of shares in companies that prepare their own consolidated financial statements, the consolidated equity is recognised instead. For current valuation, the value recognised is adjusted using a proportional share of changes to equity, with the shares in net income being allocated to consolidated net income and disbursed profit distributions deducted.

Expense ratio

The ratio of premium writing expenses and other operating expenses divided by gross earned premiums. The expense ratio is therefore made up of a premium writing expense ratio and an administrative expense ratio.

Expenses for insurance claims

These are comprised of the payments for insurance claims, payments for claims investigation, claims settlement, and claims prevention, and from the change in the associated reserves.

Fair value

A security value calculated using a theoretical pricing model that takes into account factors on which the price depends.

Financial result

Income and expenses for capital assets and interest. This includes, for example, income from securities, loans, real estate and equity interests, as well as bank interest, and expenses incurred in the financial area, such as scheduled depreciation on owned real estate, unscheduled write-downs of securities to listed market prices, bank fees, etc.

Gross domestic product (GDP)

A measure of a country’s economic production. All goods and services produced or provided within a country (by citizens or foreigners) during a specified period, valued at current prices (market prices) or constant prices (prices in a certain base year).


In insurance terminology, “gross/net” means before or after reinsurance has been deducted (“net” is also used to mean “for own account”). In connection with income from equity interests, the term “net” is used when related expenses have already been deducted from income (e.g., write-offs and losses from sale).Therefore, (net) income from equity interests equals the profit or loss from these interests.


International Accounting Standards.


International Financial Reporting Standards. Since 2002, the designation IFRS has stood for the overall framework of all standards adopted by the International Accounting Standards Board. Previously adopted standards continue to be referred to as International Accounting Standards (IAS).

Income from capital assets and interest income

Income from capital assets and other interest income is comprised of income from equity interests (from associated companies), income from land and buildings, income from other capital assets, income from write-ups, gains from the sale of capital assets, and other income from capital assets and interest income.

Indirect business

Insurance business where the company acts as a reinsurer.

Insurance density

Annual per capita insurance premiums, used as an indicator for the state of development of a country’s insurance sector.

Insurance payments (net)

Expenses (after deducting reinsurance) for insurance claims.

Insurance penetration

Insurance premiums as a percentage of gross domestic product, used as an indicator for the state of development of a country’s insurance sector.

Insurance supervisory authority

The Austrian insurance supervisory authority is the Financial Market Authority (FMA), an independent government agency which supervises the operations of all insurance companies, banks, and employee retirement and pension funds in Austria.

Market value

The value of an asset on the balance sheet that can be realised by selling it in the market to a third party.

Mathematical reserve

A reserve calculated according to mathematical principles for future insurance payments in the life and health insurance areas. In the health insurance area, this is also referred to as an ageing reserve.

Minority interest

Shares in the equity of affiliated companies that are not held by Group companies.

Minority interest in net income/loss

The share of net income/loss allocated not to the Group, but to shareholders outside of the Group holding interests in associated companies.


Non-life insurance includes the property and casualty insurance and health insurance segments.

Operating expenses

Operating expenses for retained insurance business are broken down into policy writing expenses, and other operating expenses, less reinsurance commissions and profit commissions for reinsurance cessions. Expenses for claims investigation, loss prevention, and claims processing (claims handling expenses) or for making insurance payments (settlement costs) are shown in the expenses for insurance claims item.


Derivative financial instruments which entitle, but do not obligate, the buyer to purchase (call option) or sell (put option) an underlying asset at a future point in time for a specified price. In contrast, the seller of the option is obligated to deliver or purchase the asset and receives a premium for providing the option.


Agreed fee paid in exchange for assumption of risk by an insurance company.

Premium refund (profit-dependent)

The policyholder’s profit participation in the profit of the insurance class in question (life / health / property and casualty).

Premium refund (profit-independent)

Contractually accorded refund of premiums to the policyholder.

Premiums written

Direct business premiums written are comprised of set premiums, not including premium or fire service taxes, plus policyholder collateral payments, reduced by premiums cancelled during the fiscal year. In indirect business, the premiums written correspond to the premiums that the ceding insurer has indicated for offset. In co-insurance business, the premiums written by each co-insurer correspond to the share of premiums allotted to it.

Profit participation

See premium refund (profit-dependent).

Real GDP

Real GDP is GDP that has been adjusted to remove inflation. Inflation is removed by using the market prices in a base year to value all goods and services and removing all price increases from the calculations (GDP at constant prices).


Reinsurance is when an insurance company insures a portion of its risk with another insurance company.

Retained earnings

Retained earnings are the profits generated by the company that have not been distributed as dividends.

Return on equity (RoE)

Profit before taxes as a percentage of average equity, calculated using values at the beginning and end of the year.

Securities held to maturity

Held-to-maturity securities comprise debt securities that are intended to be held to maturity, and can be held to maturity. They are recognised “at amortized cost”.

Segment reporting

Presentation of the consolidated financial statements broken down according to the property and casualty insurance, life insurance, and health insurance areas as primary segments, and according to regions as secondary segments.

Solvency II

Solvency II is a fundamental reform of insurance supervisory law in Europe, particularly solvency regulations relating to the capital adequacy of insurance companies. Solvency II is intended to create methods for the risk-based management of the total solvency of insurance companies. The static system for determining capital adequacy currently in effect will be replaced by a risk-based system, which goes beyond the current capital adequacy provisions of the Insurance Supervision Act to also take into account, in particular, qualitative factors (e.g. internal risk management).


From 1 January 2007 Austrian Corporation Code (Unternehmensgesetzbuch UGB)

Underwriting provisions

These consist of the provision for outstanding claims, actuarial reserve, unearned premiums, provisions for profit-dependent and profit-independent premium refunds, the equalisation provision, and other underwriting reserves.

Unearned premiums

Premiums written that are to be included in the profit/ loss calculation of future fiscal years. As a rule, the calculation is performed to the day for each individual insurance policy.

Unit-linked and index-linked life insurance

Insurance policies where the capital investment is made at the policy-holder’s risk. The investments in this area are valued at fair value, with the underwriting reserves shown at the value of the capital assets.


The Austrian Insurance Supervision Act (Versicherungs aufsichtsgesetz) includes provisions governing the organisation and supervision of insurance companies.

Value at Risk (VaR)

A method of quantifying risk that can be used to estimate the potential loss that could result from a change in the market situation having a given probability of occurrence over a specified period of time.

Vienna Insurance Group (VIG)

Umbrella brand of the Wiener Städtische Group.


Fluctuations in security prices, currency rates, and interest rates.

Wiener Städtische AG


Sources of market shares and market positions

Sources of market shares and market positions (table)


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