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Uniqa Insurance Group AG

Annual Report Apr 26, 2007

764_10-k_2007-04-26_eb10a907-1bb3-468e-8f82-ccc8fc5ef482.pdf

Annual Report

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Group Report 2006 UNIQA Versicherungen AG

Success through individuality

The insurance of a new generation

Group key figures Page 2006
€ million
2005
€ million
2004
€ million
2003
€ million
2002
€ million
Premiums written 127 4,532.1 4,370.2 3,599.6 3,030.5 2,668.4
Savings portion of premiums from unit- and
index-linked life insurance
559.3 360.2 178.2 102.3 18.7
Premiums written incl. the savings portion of premiums
from unit- and index-linked life insurance1)
5,091.4 4,730.4 3,777.8 3,132.8 2,687.1
Premiums earned (net)2) 128 4,129.7 4,000.4 3,301.7 2,778.6 2,405.6
of which property and casualty insurance 1,715.6 1,627.7 1,393.5 1,025.4 774.3
of which health insurance 886.7 849.4 742.1 716.4 688.6
of which life insurance 1,527.4 1,523.3 1,166.1 1,036.7 942.8
Insurance benefits 133 3,715.6 3,776.9 3,033.4 2,484.1 2,351.9
Operating expenses (net)3) 129, 134 966.9 927.7 826.2 601.5 472.4
Cost ratio (net after reinsurance) 54 20.9% 21.5% 24.2% 21.4% 19.4%
Net investment income4) 66 865.0 962.9 747.9 420.9 475.9
Profit on ordinary activities 66 238.5 190.3 120.8 68.3 35.3
Net profit 66 175.1 133.3 101.8 56.2 18.5
Investments5) 64 21,155.2 19,367.3 16,597.9 13,233.8 11,682.1
Technical provisions (net)6) 65 19,064.5 17,673.6 15,544.4 12,962.4 11,336.3
Shareholders' equity 68 1,122.5 930.4 683.1 540.5 509.5
Total equity incl. minority interests 68 1,329.8 1,133.7 860.2 649.4 608.6
Average number of employees 56, 136 10,748 9,943 9,701 8,335 6,565
Insurance policies 12,533,673 11,892,828 11,739,085 9,834,256 7,441,574

1) Values gross before reinsurance.

2) Fully consolidated values.

3) Incl. reinsurance provisions and profit shares from reinsurance business ceded.

4) Minus financing costs.

5) Incl. self-used land and buildings, land and buildings held as financial investments, shares in associated companies and investments

held on account and at risk of life insurance policyholders.

6) Incl. technical provisions for life insurance policies held on account and at risk of policyholders.

What we have achieved

  • Successful market entry in Serbia and the Ukraine. Presence in 16 European insurance markets.
  • Group premium volume of over €5 billion.
  • The profit improvement programme 2004–2006 was successfully completed and achieved an increase in profit of €170 million.
  • Record result of €238.5 million and an ROE of over 20%.

What we want to achieve

  • Profitable, sustainable growth and an increase in the share of international business to over 40% by 2010.
  • Profit improvement programme 2007–2010: Increase Group profit by 2010 to €430 million.
  • Improve competitive advantage through brand awareness and UNIQA's innovative leadership.
  • Keep an eye on further internationalisation of the Group.

Success through individuality. The success of a strategy depends on its being individually tailored to fit the situation. This applies both to product solutions that UNIQA develops for its customers throughout Europe as well as to the strategic orientation of the company itself. Our business strategy is a response to the diverse market conditions and accommodates the regional differences of the various locations. However, all our different strategies have a common goal: to increase the profitability of our Group, strengthen our market position and develop new markets.

Customers and Markets

16

Processes and Products

25

Franz Fischler

In a conversation, the European by conviction outlines the consequences of Europeanisation through the eyes of a politician and how one can profit through market opening with innovative products.

4 Forewords

6 Strategy

13 Customers and Markets

  • 13 Brand image
  • 15 QualityPartnership
  • 18 Sponsoring

20 Processes and Products

  • 21 Product innovation
  • 23 Old-age provision
  • 26 Processes and service

28 Group and Profit

  • 29 New Eastern Emerging Markets
  • 34 Central Eastern Europe
  • 36 Western European Markets
  • 37 Rating

38 Staff and Partners

  • 39 UNIQA as employer
  • 41 TopPartners
  • 44 Training and development

Group and Profit

32

Hans Peter Haselsteiner

The successful building contractor speaks from experience as an international businessman about the potential in the Eastern European countries and which strategies

Staff and Partners

42

Benni Raich

For three years, Benni Raich has been the sports partner of the UNIQA Group. In an interview, the Austrian athlete of the year explains the meaning of team play for success and what he considers "mental fitness" to be.

46 UNIQA Shares

  • 47 Price trends
  • 47 Basic stock information
  • 48 Shareholder structure
  • 48 Financial Calendar
  • 49 Corporate Governance Report

50 Financial Section

50 Group Management Report

  • 50 Economic environment
  • 53 Group business development
  • 56 Business segments
  • 61 Outlook

64 Group Financial Statements

  • 64 Consolidated Balance Sheet
  • 66 Consolidated Income Statement
  • 67 Consolidated Cash Flow Statement
  • 68 Development of Group Equity
  • 70 Segment reporting

  • 76 Notes to the Group Financial Statements

  • 84 Management and Supervisory Board members
  • 86 Risk report
  • 144 Auditor's Opinion
  • 145 Report of the Supervisory Board

146 Other

  • 146 Glossary
  • 148 Contact
  • 149 Group Organisational Chart Imprint

The past financial year was again a very successful one for the UNIQA Group. For the first time, consolidated premium volume surpassed the € 5 billion mark and, with earnings before taxes of € 238 million, we achieved yet another record result.

In accordance with this positive trend we want our shareholders to profit from the improvement in the company's result with an increase in dividends – from 26 cents to 35 cents per share.

We are pleased that all the corporate areas have contributed to this result. Although it cannot be overlooked that the markets in Eastern Europe and the life insurance business in Italy have clearly been the growth drivers during the past financial year. In contrast, the competitive environment is growing stiffer, particularly in the property insurance business in the Western European markets, and this is flattening the growth rates. This makes the further expansion steps that we took in 2006 – entry into the markets in the Ukraine and Serbia – all the more important. With these two countries and the new EU members, Romania and Bulgaria, we have concentrated our activities in the past two years on markets that are offering a high potential for growth.

Of course, a persistent strategy for growth and expansion also requires the right amount of financial strength to go with it. For this reason, we stocked up our capital base by taking up € 250 million of new subordinated debt. Beyond this, it is also very important that the company be in a position to finance its growth from funds it generates on its own. Therefore, it is necessary to pay particular attention to implementing the measures announced last year to lower costs and increase productivity. With the 2007–2010 profit improvement programme we want to optimally tap into the corporate Group's potential, thus further increasing company value.

The goal must be to bring about a benefit for our customers, to strengthen our market position in Austria and Central Europe and position the UNIQA Group as a reliable insurer and financial investor throughout the region. With this, we want to make the

profitable UNIQA company an even more attractive investment for our shareholders, ensuring that we, with strong internal financial power and attractive shares, can take advantage of all the opportunities that our markets offer us.

I would like to thank all our employees for the tremendous commitment you have brought to your work during the 2006 business year. And I ask you to continue in this same manner to support the further development of our company as it becomes one of the leading Central European insurance groups.

Vienna, April 2007

Christian Konrad

In this year's Group Report, we are focussing on the theme of "success through individuality". For this, we shall let wellknown personalities from the worlds of culture, politics, business and sports have their say, depicting the developments in a new Europe, in their environment. The emphasis will be on the various points of view of different generations from Eastern and Western Europe.

As "The insurance for a new generation", we consider it our main task to adjust to this rapid change and offer appropriate customised solutions in all areas. In order to also ensure success in the future, it is not enough to look at our core area of insurance – we must also keep an eye on all the changes, trends and developments. In our modern, networked environment, which is developing at varying speeds, understanding and the capability to anticipate changing needs is increasingly becoming a crucial precondition for economic success. We prove that UNIQA is standing up to this challenge with our innumerable product and service innovations for increasing customer benefit and customer loyalty.

As a result of our consistent strategic orientation, we were recently able to achieve a record result of € 238 million in 2006, and drive our development into one of the leading insurance groups in Central and Eastern Europe further forward during the year. We intend to allow our shareholders to participate in the Group's successful development with another increase in the dividend by 35% to 35 cents per share. We shall submit a respective proposal to the Supervisory Board and at the annual general meeting.

Following the rapid price increase during the previous year, UNIQA shares experienced a consolidation phase in 2006. International attention to our activities increased significantly which was, not least, also confirmed by the more frequent coverage of UNIQA's shares by investment companies. Through the further intensification of capital market communication, we intend to continue supporting the positive trend of the UNIQA shares during the coming years.

With the initiation of business activity in the Ukraine and Serbia, we undertook further steps in 2006, in the growth markets of Central and Eastern Europe. We are convinced that, with our expansion activities and the positive development of our cooperation with Raiffeisen within the context of the preferred partnership, we have established excellent preconditions for continuing our growth trend in these regions in the future.

We consider it a main prerequisite for the further development of the UNIQA Group to secure the Group's earning power over the longterm. This will strengthen the Group's internal financing power and retain the possibility of responding to market developments with the greatest possible flexibility.

With our new, dedicated profit improvement programme 2007– 2010, we are pursuing the goal of increasing the Group's profit by a further € 200 million by 2010. To implement this programme we will primarily rely on securing our profitable growth path in the right product segments and on additional measures for increasing the efficiency of the organisational structures. Furthermore, we are, of course, continuing to work intensively on improving the technical results. With the implementation of this ambitious programme, we are strengthening the preconditions for increasing company value, from which the shareholders will also profit.

Our success is primarily linked to the dedication and motivation of our employees. Special thanks go to them, for their willingness to fully support the changes to secure the Group's future, for their motivation and their identification with UNIQA's values and goals.

Vienna, April 2007

Konstantin Klien

Strategy

With a new programme to further reduce costs and continually improve profit, as well as the preferred partnership with Raiffeisen, UNIQA has laid the foundation for a continuation of its successful internationalisation strategy.

In the friendly global economic environment, we were able to make some sound decisions in 2006, to further secure our future as an independent player on the insurance markets of Central and Eastern Europe – the future of an insurance group that is active in 16 countries with a premium volume of over € 5 billion, that manages investments of over € 21 billion, and has a market capitalisation of € 3 billion.

The solid foundation of our far-reaching decisions remained our long-term corporate strategy – a strategy that strengthens our market position in Austria, diversifies the risks of our portfolio through consequential internationalisation and, at the same time; makes use of the enormous growth opportunities in Central and Eastern Europe to promote strong Group expansion with increasing profitability.

Responsible for:

Group management, sales, planning and controlling human resources, marketing, communications, investor relations and internal audit Country responsibility: Austria

Dr Klien joined the UNIQA Group in October 2000 as vice Chairman of the Management Board. Since 1 January 2002, he has been Chairman of the Management Board and CEO of UNIQA Versicherungen AG. Dr Klien began his professional career at Arthur Andersen and transferred to Nordstern Versicherung in 1978, where he was appointed to the Management Board in 1986. In 1991, he became Chairman of the Management Board of the Austrian AXA holding company and held executive positions in the AXA companies in Central Europe.

Streamlining to counteract the biting winds of competition

Size alone is no guarantee of survival in the future. We must continuously increase our efficiency in all areas, in an on-going company-wide optimisation process. We must continuously improve our customer service and sales impact, lower costs and increase income. We must work hard and without pause to become even more efficient and competitive. The slogan is: "more efficiency".

In global competition, enterprises that are lean and healthy will do the best. More efficiency also results in a sustainable increase in income and financial power. For us, a central element for safeguarding our independence is being able to independently earn the funds we need to finance our strategic investments for the future.

"Our strategy of internationalisation is focussed on profitable growth, securing our future as an independent insurance group in Europe."

Konstantin Klien

Profit improvement programme 2007–2010

Pre-tax result in € million

Ambitious profit improvement programme (PIP)

After successfully completing two programmes to increase profits, UNIQA has decided on a third profit improvement programme for the years 2007–2010. In the process, we will intensify some structures and tasks, do without some activities and bundle certain occupations in international Group companies by outsourcing them.

In the course of this programme, which is based on numerous measures and action plans, we want to further reduce both costs and loss ratios, and lastingly secure the (pre-tax) return on equity of our Group at a level of 20%. From the total savings potential of € 280 million, we intend to reinvest € 80 million in Austria and internationally in expanding sales, in infrastructure and increasing the awareness of our brand. Because of the profit improvement programme, our annual pre-tax result should climb steadily until 2010, from € 200 million to € 430 million.

"With our profit improvement programme we will reduce the costs of sales and administration, increase the efficiency of processes and make lasting improvements to the income situation by 2010." Karl Unger

"In the mature markets of Western Europe we operate successfully in profitable market niches, winning over demanding clients with exclusive product solutions."

Gottfried Wanitschek

Responsible for:

asset management (front office), equity holdings, property management, legal affairs, general administration and internal audit Country responsibility: Czech Republic

Dr Wanitschek started working in the insurance business back in the eighties and was first head of the legal office and later, secretary general of Raiffeisen Versicherung AG. From 1991 until he was appointed to the Management Board of UNIQA Versicherungen AG, he was director of Beteiligungsholding Leipnik-Lundenburger Industrie AG, managing director of Kurier GmbH, member of the management at Mediaprint and director of Zeitschriften-Verlagsbeteiligungs-AG.

Dr Gottfried Wanitschek (* 1955) Member of the Management Board

Financing of further expansion secured

With funds we have earned on our own, the issuance of a supplementary capital bond for € 250 million and the planned increase of the funding framework at the European Bank for Reconstruction and Development, we are well prepared for further profitable expansion in Austria and internationally.

The structure of our insurance business will change noticeably with the internationalisation of the company portfolio. At the moment, the Austrian market dominates the Group premium revenue, with about a two-thirds share. By the year 2010, however, international business should already be contributing well over 40% to the Group premium volume and to the Group results.

Playing out the advantages of being Austria's top brand

We also owe this success to the differentiated expansion strategy of concentric circles in our target markets. Our Austrian strategy centres on solidifying our position as market leader in personal injury insurance and as one of the largest property insurers, and focussing on qualitative growth. In so doing, we play out the competitive advantages UNIQA has as the best-known insurance brand with excellent customer service and a powerful sales department with an innovative product portfolio in all sales channels. This is winning over more and more total customers and continuously strengthening the profitability of the business in Austria.

Niche strategy for Western Europe is paying off

In our Western European markets in Italy, Germany, Switzerland and Liechtenstein, we operate with niche and specialty products for private customers and medium-sized companies. In Germany, Mannheimer Versicherung is on a successful path as an established brand name company and supplier of brand programmes, above all in the high-growth area of southern Germany.

The close cooperation between the three Group companies in Italy after the acquisition of Claris Vita led to a jump in premiums, in particular due to the bank sales made through Veneto Banca. In Switzerland and Liechtenstein, we score points with an exclusive target group business.

Responsible for: new markets and mergers & acquisitions Country responsibility: Romania, Bulgaria, Ukraine, Serbia, Italy

Dr Brandstetter joined the Group in 1997 and was responsible for the restructuring of UNIQA Versicherungen AG in 1999; he was appointed to the Management Board in 2002. Before that, he was head of the EU office of the Austrian Raiffeisenverband in Brussels.

Andreas Brandstetter (* 1969) Member of the Management Board

On a course of expansion as composite insurer in Eastern Europe

In the countries on both sides of the Eastern border of the European Union, we are positioned as a composite insurer and, in cooperation with the Raiffeisen bank group, are relying more strongly on bank assurance in order to make the most of the enormous potential in the retail market business. In the process, we are aspiring to achieve a unified market presence of the UNIQA brand and a market share of 5 to 7% in property insurance and from 3 to 5% in life insurance.

"The symbiotic partnership with the Raiffeisen bank group is a definite advantage for our drive into the growth markets in Eastern and South-Eastern Europe."

Andreas Brandstetter

In the established Eastern European markets such as Poland, the Czech Republic, Slovakia, Hungary and Croatia, we are accelerating our growth rate with dynamisation projects using our own funds. With the expansion of sales structures and fortified organic growth, we want to attain the targeted market shares quickly but without any further company acquisitions. We are placing particular importance on profitable and sustainable growth in all sales channels.

EBRD as an important partner

The EBRD (European Bank for Reconstruction and Development) is an important partner for further expansion in UNIQA's focus markets. The bank was founded in 1991 with the goal of supporting Eastern European countries in their progression towards a market economy with private corporate activities. The EBRD subsidises structural and sector-specific reforms such as competition, privatisation and entrepreneurship. Through its financing it helps secure co-financing and direct foreign investment, as well as mobilising domestic capital. Investments are mainly made in private companies, usually together with business partners. In addition, the bank provides technical cooperation in relevant areas and cooperates with international financial institutions and international and national organisations. The EBRD and UNIQA have had business relations since 1998.

Development of Group premium volume written incl. the savings portion of premiums from the unit-linked and index-linked life insurance in € million

For several years, the European Bank for Reconstruction and Development (EBRD) has been supporting us in taking optimum advantage of the business potential in the Eastern and South-Eastern European countries. The EBRD has already invested minority stakes in the UNIQA companies in Croatia, Hungary, the Czech Republic and Poland.

Preferred partnership as growth driver

The successful cooperation with the Raiffeisen bank group in the countries of Eastern and South-eastern Europe is a strategic advantage for our commitment in the New Eastern Emerging Markets and a central building block for our launch in Serbia and the Ukraine. This cooperation, which in the meantime spans eleven of fifteen international markets, has given us access to 10 million customers: this is a very promising area of future potential for tailored insurance solutions, above all in the area of old-age provision.

"We will do without expensive company acquisitions abroad for a time and speed up our growth through targeted dynamisation projects that strengthen sales structures in the new EU member states."

Hannes Bogner

Share of international business in %

"Go east" remains in focus

During our further internationalisation, we will continue to keep our eyes on Russia, Albania, Macedonia and Kosovo, because of the enormous growth opportunities they offer. If the screening of these target markets is positive, we will stake our claims there as well.

All in all, we have every reason to continue our decisive company strategy of yield-orientated growth and consistent internationalisation. We are headed in the right direction. We can look to the future with confidence.

Hannes Bogner (* 1959) Member of the Management Board

Responsible for:

group accounting, planning and controlling, asset management (back office) and investor relations Country responsibility: Poland, Croatia, Bosnia and Herzegovina, Germany

Hannes Bogner joined the Group in 1994, and was appointed to the managing board in 1998. Before that, he worked at THS Treuhand Wirtschaftsprüfung sgesellschaft in Salzburg and at PricewaterhouseCoopers in Vienna. Mr Bogner became a tax consultant in 1988 and a chartered accountant in 1993.

The world will look different tomorrow. And the day after tomorrow.

The insurance of a new generation.

Customers and Markets

UNIQA is the best-known and most trusted insurance brand and, as "the insurance of a new generation", stands for innovation, product quality and first-class service in a rapidly changing world.

Entrepreneurial success in such a quickly evolving global environment requires a feel for trends as well as constant readiness to respond proactively to people's needs. Those who face the challenges of the future with resolve are one step ahead, as a pioneer on new terrain.

In the seven years since forming our internationally oriented insurance group and establishing the successful UNIQA brand, which is, meanwhile, operating in sixteen European countries, we have succeeded in recognising our customers' desires and the changes in society sooner than others. And we have found the right answers to questions about insurance and old-age provision that are arising from demographic and technological changes.

Successful strategy of consistent customer orientation

With a business strategy that focuses specifically on the needs of mobile customers in the age of globalisation, UNIQA has achieved a leading market position in Austria. And we have positioned ourselves as a competent partner in our Central and Eastern European target markets, filling the need for private insurance and old-age provision, which is increasing everywhere.

Our success in developing new markets can be attributed to many factors: The ability to replace separate product offers with comprehensive insurance solutions that include sensible additional benefits and excellent service quality. In doing so, we are honing our image as a leading innovator and trendsetter.

The insurance of a new generation

UNIQA's success can be attributed not least to the clear orientation of our business strategy on the changing way of life in the age of globalisation. We approach our customers flexibly, openminded and receptive about each of life's phases.

In this new age, we are conveying the overall concept of our company as the insurance of a new generation with an international image campaign, directed at the broader public in Austria and our Central and Eastern European markets.

Lead in brand awareness increased

UNIQA can build upon its extremely positive brand image. Our high profile is unequalled according to the most recent questionnaire by the market research institute FESSEL-GfK. When they think of insurance, 18% of all Austrians think first about UNIQA. Thus, we have improved our lead compared to the previous year.

UNIQA moved up to 46% with respect to spontaneous awareness and 90% awareness with prompting. We also received the best scores for customer contacts in 2006. Once again, we clearly achieved the highest share of customers (32%), primary customers (18%), and exclusive customers in the Austrian insurance market.

UNIQA is the most trusted insurance company in the eyes of Austrian consumers.

Most trusted brand in Austria

And what's more, according to the consumer study "Reader's Digest European Most Trusted Brands", UNIQA is the most trusted insurance brand in Austria for the fourth year in a row. Furthermore, we regularly rank at the top of the market institute's industry brand monitoring, with respect to estimation of service quality, brand value or innovation.

Finally, in 2006, we were amongst the best insurance companies rated by 400 independent insurance brokers for the "Assurance Award Austria", awarded by the market research institute psychonomics AG.

Top grade for Raiffeisen Versicherung's service

Raiffeisen Versicherung, the Group's subsidiary that is leading in bank sales, also reaped high praise from its customers. In a survey of the level of satisfaction with the central service centre, nearly three-fourths of those questioned awarded the top grade of "very satisfied" as an overall assessment.

They consider product quality and the bank advisor in his advisory function as the most important reason for the overall high satisfaction. Raiffeisen Versicherung is also clearly ahead of other bank insurers and above the industry average in advisory services after the conclusion of a contract.

Strengthen and develop the competitive advantage

In this age of pressing economic change, however, we cannot let ourselves be satisfied with the successes to date which have made UNIQA the leading insurance company in Austria, with 5.5 million Group customers and a premium volume of more than € 5 billion. We must use our strategic role as pioneer and technology leader in the insurance landscape, our first-class brand image, high innovativeness and enormous customer potential to strengthen the market position in Austria and to develop emerging markets in Eastern Europe.

For this purpose, our product designers are continuously developing new insurance solutions tailored to customers' needs, optimising our best sellers and reinforcing our competitive advantage through modern innovations. And UNIQA occupies new business segments early, which will increase in significance in the future.

Business health management as a future topic

Thus, UNIQA – by far Austria's leading health insurer – recognised "business health management" as one of tomorrow's growth sectors. Because healthier employees are verifiably more productive, expenditures to promote their health are also sound business investments. We are leading the way in this sector by setting a good example in our own company. The campaign "UNIQA@ work" changed the personal behaviour and self-confidence of the employees with numerous events within the Group.

With the results of this campaign, we will succeed in the future in making our commercial and industrial customers more aware of the topic "health in business" and in providing them with attractive offers. These offers range from simple introductory models to mobile medical examinations, to the vital statistics of a company as a whole.

Pilot project against high blood pressure has begun

With "disease management/hypertension", UNIQA has started another innovative health insurance pilot project within the framework of our comprehensive efforts to promote all types of preventative measures, and therefore to avoid illness. Around 100 UNIQA customers between the ages of 60 and 70 who, like every fourth Austrian, suffer from hypertension were equipped

The insurance of a new generation

UNIQA is an insurance company which not mented in the campaign. In addition to the four topics on posters and billboards in Austria with a blood pressure gauge and a so-called home box for the duration of the project. This transmitted the data which was measured daily per telephone to LifeSensor – a software programme developed by us.

The medical team in our call centre checks this data and advises customers with elevated numbers about possible ways to lower their blood pressure. The project is intended to support the therapy of the doctor treating the patient by providing ongoing consultation outside of normal consulting hours. The goal is to adjust blood pressure to an optimum, to avoid or minimise subsequent diseases, and to reduce the costs to the health care system in the long term.

Digital risk maps for natural catastrophes

A unique project in Europe for injury and damage prevention has been available since the middle of 2006 throughout Austria: The risk zone system for natural catastrophes, "HORA", developed in cooperation with the Insurance Association of Austria and the Austrian Ministry of Agriculture, Forestry, Environment and Water Management. It conveys a picture of the regional risks of flood or earthquake.

At www.hochwasserrisiko.at, every Austrian can learn about the risk of flood or earthquake to which his or her own house or property in the respective region is exposed on a digital risk map and, if necessary, take preventative measures.

The UNIQA and Raiffeisen Versicherung customers affected by flood or storm damage in Austria in 2006 and early 2007, were helped quickly and unbureaucratically. A free hotline was promptly available to them for emergencies and to report damages suffered.

QualityPartnership

The QualityPartnership is one of our well-established customer loyalty instruments: We reward the loyalty of our customers to our company with PartnerPoints. We also grant an additional bonus if they complete a calendar year without any claims in the defined insurance areas.

QualityPartnership made even more attractive

Since its introduction in 2003 as an instrument to gain profitable total and new customers, our insurance offer of the QualityPartnership, which is unique in Austria, has continually increased in significance.

This innovative product and service programme to foster and intensify customer relationships was further developed in 2006, and made even more attractive. It documents our consulting philosophy and shows how we are consistently changing from the product-focused to the solution-focused insurance of a new generation.

A personal UNIQA VitalCoach helps our customers learn how they can best maintain their health and wellbeing or improve it, e.g. through an individually tailored sports programme.

Currently, more than 300,000 customers who own at least two contracts in different insurance areas have a QualityPartnership. They profit from an exclusive insurance and service package in connection with targeted health prevention.

Active consultation and goodies included

Tried-and-tested building blocks of the QualityPartnership include the guaranteed ActiveCare through a personal Exclusive Advisor, who regularly adjusts the insurance protection to fit new life situations, and also the possibility to receive a bonus of up to € 200.

Furthermore, we reward loyal customers of the QualityPartnership with PartnerPoints and attractive goodies, such as sport and thermal spring gift certificates or a cheque for a short hotel vacation. All contract data of the QualityPartnership, including the balance of PartnerPoints, is available on demand for all customers at any time at the Internet portal myUNIQA.

Use of the PartnerConto expanded

The PartnerConto is the "financial hub" of the QualityPartnership. The advantage for the customers: premium payments for all insurance contracts are summarised in a single line, all credits are accounted for and handled in one monthly charge.

Our 3,000 brokers in Austria can also take advantage of the TopConto in sales. And we are working as fast as we can to further intensify our connections to total and multiple-contract customers, with the help of the CustomerConto in the distribution channels. At the same time, we would like to greatly simplify communication with the advantages of the QualityPartnership. Additionally, this will be expanded to include a business partnership in the corporate customer segment in 2007.

Interview with Peter Simonischek

Peter Simonischek was born on 6 August 1946 in Graz, studied at the Graz Academy of Music and Performing Arts, performed at the Graz Schauspielhaus Theatre and later in St. Gallen, Bern and Düsseldorf. Following that, an engagement at the Berlin Schaubühne Theatre, where he stayed for 20 years, proved to be the fulfilment of the dream of a lifetime. In 1999, Klaus Bachler brought him to the Burgtheater, where he was also established as a box-office success. Since the summer of 2002, he has also been a hit in the title

What does the Salzburg Festival mean to you?

For me, the Salzburg Festival represents outstanding artistic performances with world-famous interpreters. The best musicians and actors in the world gather together to create something new. This always brings out new and daring ideas. Working here is wonderful. Personally, I most appreciate the summertime togetherness with so many European talents. That is very inspiring.

Fostering this "gem of Austrian culture" takes a huge amount of money every year; the festival could not possibly be held as it is without suitable sponsoring. How do you feel about the subject of cultural sponsoring?

High culture has always been dependent on support. In the past it was the job of the royalty, today this role is filled by successful corporations – a potential win-win situation when a credible and intelligent partnership can be formed. In this regard, Austrian companies can nurture their traditional role as integrators to the benefit of a cultural European convergence.

After your successes in the past two years, amongst other things at the Salzburg Festival, one might think that you have reached a peak. What is it that continues to motivate you?

Acting is unbelievably lively and diverse. It's as if an expedition begins with the rehearsals for each new role, a departure

For UNIQA, sponsoring is an important social responsibility. Our commitment is based on partnership and is not limited to purely financial services: as an active partner, we focus on individual sponsoring partnerships that are precisely tailored to meet the needs and requirements of the situation.

into unexplored regions of our being – a submersion into the depths of the human soul, searching and recognising correlations and contradictions. It is a joy to discover and learn new things each day, and to go on to celebrate a "Festival of the Moment" on opening night and take the audience along on a voyage from which they return happy and a little bit different.

"Commitment based on partnership is important."

Customers and Markets 17

Next Generation

Kamilla Baar, 27

and-coming Polish actress can be Juliusz Machulski's new film, Vinci.

The path to the top is very difficult these days. What characteristics do you need to be successful?

You have worked together with famous producers and actors. What impresses you most? On the one hand, they are the best

Concerning your work: what inspires you?

Fitness training in the VitalClub

A QualityPartnership or health insurance policy is automatically combined with a membership in Austria's largest health programme – the UNIQA VitalClub, where 90 VitalCoaches are available to work out individual prevention programmes with customers that focus on maintaining and improving fitness and well-being.

The health project, which is unique in the Austrian insurance business, already has around 1 million members. The VitalClub was also established in Germany and Hungary in 2006, for the first time. In the future, it will also focus on corporate customers.

A fixed component of our commitment to preventative health management is the FitnessProfile on four wheels, the VitalTruck. The blue and white vehicle is meant to enable regular VitalChecks for as many people as possible by bringing the VitalCheck to them.

VitalTruck on tour internationally

The 20-tonne truck, complete with trained medical personnel for the examination of 100 employees daily, can be rented by public and private companies. In 2006, it not only travelled all over Austria, but also in Germany and Hungary.

German air-traffic control employees, who need maximum mental and physical fitness to monitor around 8,000 flights daily, submitted themselves to a check-up in the VitalTruck. The German air-traffic control's health partner is our Group subsidiary, Mannheimer Versicherung.

More than 100,000 Raiffeisen customers use the Advantage Programme

Raiffeisen Versicherung achieved remarkable success with their core customer programme, "my sure advantage". The company, which operates in bank sales over the counter of the Austrian Raiffeisen banks, greeted the 100,000th Advantage customer in 2006. The success that "my sure advantage" has enjoyed until now is not only based on incentives such as the premium discount. Above all, Raiffeisen customers also receive competent advisory services for all financial matters at their bank.

Sponsoring

UNIQA's sponsoring strategy is to enter into intermediate and long-term partnerships. Commitment is not limited to purely financial services. As an active partner, UNIQA focuses on the individual and precisely on the necessities and requirements of coordinated sponsoring partnerships.

Positive image transfer through sponsoring

Within the scope of the UNIQA Group strategy for securing profitable total and new customers in the Central and Eastern European insurance markets, the development of a positive brand image plays an important role. With our sports sponsoring, we aim for optimum support of brand recognition and an image transfer in the areas of innovation, dynamics, success and compassion. With the support of high-class art and cultural events, we emphasise our claim to quality and exclusiveness based on UNIQA's business values.

Thus, in 2006, we extended the successful partnership with the top ski star Benjamin Raich until 2010. The "Blitz from Pitz" won the slalom and giant slalom at the 2006 Winter Olympic Games, and also won the Overall World Cup. He ensured the optimum presence of the UNIQA brand on his blue helmet, which is a symbol for security not only in Austria.

Popular figure Benni Raich athlete of the year

Austria's sports journalists chose Benni Raich as Austria's 2006 athlete of the year. Our commitment to the sport of skiing is rounded out by our partnership with the Austrian Ski Association (ÖSV). We are the general sponsor, as well as sponsor of many world cup races organised by the ÖSV.

Furthermore, in 2006 we supported the Austrian Cycling Association, the Austrian Tennis Association, the runner-up in Olympic sailing, Andreas Geritzer, as well as sponsoring the top event of the track-and-field all-around competition – the meet in Götzis in Vorarlberg.

Consistent strategy of "faces for UNIQA"

We continued our sports sponsoring in the international markets of Eastern Europe. The subsidiary in the Czech Republic was one of the main sponsors of the world championship in white-water racing held in Prague. The logical consequence was our partnership with the world-class kayaker, Stepanka Hilgertova, our UNIQA athletic face for the Czech Republic. We continued our overall strategy of "faces for UNIQA" in Bulgaria in 2006, with a cooperation with the rally driver, Krum Donchev, in Serbia with the ex-basketball star, Alexander Djordjevic, as well as in Slovakia with the successful skier, Veronika Zuzulova, and in Hungary with the highly popular water polo players, Adam and Barnabas Steinmetz.

Cultural sponsoring: the Salzburg Festival

Additionally, we are partner of the most popular Czech football association Sparta Prague, and support the games of the Handball Champions League in Hungary.

As Austria's largest art insurer, the promotion of excellent cultural events is a part of our corporate culture. We have noticeably expanded cultural sponsoring for a good reason. Above all, our long-term cooperation with the Salzburg Festival has proved itself as a symbiotic union between two partners at the highest level of quality.

Cultural sponsoring receives high approval

The approval is high. Half of all culturally interested people in Austria have a positive perception of our commitment to the Salzburg Festival. And 81% of our customers welcome our sponsoring of this world-class cultural event. As a quality insurer, we are providing an important contribution in order to preserve the high quality of Austrian culture.

UNIQA ArtCercle for demanding lovers of art

With our ArtCercle, we offer demanding art lovers amongst our customers regular access to top cultural events beyond the usual programme. In addition to previews with tours conducted by experts, the ArtCercle organises backstage access at exhibitions, enables cultural fans to peruse warehouses and collections, or arranges conversations with renowned experts. In a short time, it has established itself as synonymous with top-quality events of the most demanding scale. The preview of the 200 works of Pablo Picasso, on exhibition at the Albertina, left a particularly special impression in 2006.

Promotion of the Schiele exhibition in the Belvedere Gallery

Within the scope of our long-term partnership with the Belvedere Gallery, we supported the Egon Schiele exhibition, insured the masterpieces of early Austrian expressionism shown there, and took advantage of this connection for a UNIQA ArtCercle event.

In the area of music, we sponsor the Vienna Philharmonic and promote the Mörbisch Festival on the Lake. And we shall engage ourselves in the future as sponsor of the music festival at Grafenegg Castle under the direction of Rudolf Buchbinder.

Highlights

With 90% brand awareness, UNIQA is the best-known insurance group in Austria and has also been the most trusted insurance brand for several

The QualityPartnership was in 2006. Already, more than 300,000 customers benefit

Our sponsoring strategy focuses on the areas of sport sequentially expanded on the

Many insurance companies keep up with the times. Mine is a step ahead.

The insurance of a new generation.

Processes and Products

We utilise state-of-the-art Internet and communications technology to ensure efficient processing and administration processes and, top-quality customer service and as instruments for developing creative insurance and pension provision solutions.

In 2006, we pioneered the development of a completely new form of motor vehicle insurance in Austria based on advanced technology. Satellite navigation, a mobile telephone network and information technology are the foundation of usage-optimised insurance (UOI).

The two-phase test run of this innovative project was an impressive success. It marks yet another milestone in our technology leadership. The key innovation: more precise definition of the risk profile by measuring the actual distance driven as well as the roads used.

Savings from a brand new form of motor vehicle insurance

The core of usage-optimised insurance is the Navi Box – a small device installed in the automobile that contains a GPS receiver. Via satellite navigation, this box records when and where the car is driven. It transmits the data once per day to a server of the telematics provider via the mobile telephone network. The navigation data are then compared with a map. This makes it possible to differentiate between distances driven in the city, on rural roads and motorways. Driving on rural roads presents a statistically lower risk of accidents than driving in the city. The information obtained serves as the basis for risk-based definition of the premiums.

300 test vehicles

are driving with the Navi Box and counting kilometres. The new motor vehicle insurance concept: the premium depends on the distance driven, as measured by a Navi Box in the car.

After the successful completion of the pilot run with 300 test drivers, we will offer motor vehicle liability insurance and comprehensive insurance of this new generation, initially to private customers, starting at the end of 2007. Anyone who drives fewer than 10,000 kilometres in a year will save up to one third of their premium costs with this new form of insurance. The market potential is large: according to our estimate, a target group of roughly 900,000 drivers exists within Austria.

Combination with mobile safety packages

Already unique within Austria, this insurance product will be perfected as a complete solution with additional services, such as accident alarm, car finder, emergency assistance, navigation system and mobile weather warnings. In an emergency, for example, the Navi Box can direct assistance to the accident site or locate a stolen car with the car finder feature.

We are preparing a special offer for companies with small or medium-sized vehicle fleets. It should serve as an electronic driving log as well as allowing locating and tracking of the vehicle fleet. Roughly 12,000 businesses come into question as potential customers for this innovation in commercial motor vehicle insurance, primarily from the areas of leasing and rental cars, car sharing, tradespersons or transport and customer service.

Planned integration of cooperation partners

We will constantly expand the mobile services associated with the UOI project through cooperation with telecommunications partners. For example, the Navi Box could be installed in containers for tracking transport goods and locating them in the event of theft. The technology has great potential to offer in the area of valuable shipments and in the construction industry. Also conceivable would be its use in a "Help Box" the size of a wrist watch. It could notify an ambulance and simplify rescue measures in the event of an emergency.

Another innovation is our "Auto & Network Environmental Bonus". Since people who do little driving and use public transportation place less of a burden on the environment, we give all owners a personal annual pass for public transportation, and a one-time credit of two months of premiums upon conclusion of a new liability and comprehensive insurance policy. If passenger insurance is also purchased, we provide free public transportation accident insurance as well. This covers accidents occurring in the use of public transportation and is yet another innovation on the Austrian insurance market.

We reward young drivers for staying safe

We also made our motor vehicle rates considerably more attractive in 2006, through improved benefits. For young drivers in particular, we offer significant premium discounts for just three years with no claims after opening of the insurance policy.

For new driver's license recipients who do not generate any claims at UNIQA within three years of obtaining their license, we will reimburse the additional costs for multi-phase driver's training. This has led to a significant decline in the accidents caused by learner drivers. The revised motor vehicle rates also offer noticeable improvements for existing customers.

Professional safety check for companies

For us, prevention is a decisive factor for limiting claims in all areas of insurance. Upon conclusion of a business insurance bundle, we therefore give our commercial customers a free security package in cooperation with the world's largest security company SECURITAS.

This security package is implemented between SECURITAS and our customers and allows many small and medium-sized enterprises to obtain an individual risk analysis and security strategy. Because break-ins to offices and business locations or the theft of laptops, computers and expensive electronics are an often underestimated risk for Austrian companies.

Direct line to a solicitor without an appointment

We have also optimised our service for legal expense insurance customers with access to legal advice. Thanks to the solicitor PLUSservice from UNIQA and the immediate legal expense assistance of the Group subsidiary Raiffeisen Versicherung, customers can directly contact one of 26 top-notch solicitor's offices in all parts of Austria through a free hotline available on business days.

As an important contribution to claim prevention, UNIQA provided roughly 165,000 private customers with 2.4 million free severe weather warnings, via SMS to their mobile phones or by e-mail to their computers, within the framework of the QualityPartnership. In addition, approximately 1,100 communities and many companies have taken advantage of this innovative offer. As another unique offering, we also made a separate service available to the agricultural sector free of charge.

165,000 private customers

take advantage of our severe weather SMS service. This service makes an important contribution to claim prevention as part of the QualityPartnership.

Modern weather service now also for farmers

This special agricultural weather service is the first forecasting service for temperature, humidity, precipitation, wind speed and evaporation in Austria that is specific to postal code regions. Timely warnings of gale winds, rain or hail contribute to minimising claims at fruit orchards and vineyards, as well as for vehicle fleets.

More accident benefits for the same premium

Raiffeisen Versicherung has expanded the scope of benefits for its accident insurance package. In the event of an occupational or recreational accident, it provides funds to compensate for lost income, financing of therapies, treatment aids or operations, as well as home alterations.

As an additional premium-free benefit upon conclusion of an emergency package, we now offer the "Rehab Service". Specialists support the accident victim with medical, social and occupational rehabilitation in the event of an expected prolonged invalidity of at least 35%.

270,000 Policies

The "Pension & Gestalten" pension plan offers our customers two great opportunities to actively design their provisions for the future. They can choose between a proven, conservative investment and the future plan. The future plan offers overall higher yield expectations through special forms of investment. In 2006, we were able to conclude 270,000 policies.

Private personal old-age provisions are indispensable

As an insurance company of the next generation, creativity in long-term old-age provisions is particularly important to us. Because more than four out of five Austrians consider private personal old-age provisions to be indispensable. Nearly two-thirds have already started at age 30 and spend an average of € 138 per month, primarily for private life and pension insurance.

Three pillars of old-age provision

Future-proof provisions with the three pillars

Old-age provisions that are secure against the future are based on three pillars: state pension, company pension and private provisions. Private provisions, which are subsidised by the state with premium discounts, are particularly popular within Austria. Up to a maximum annual contribution of € 2,115, the government offers a subsidy of 9% for 2007. Roughly 1 million Austrians already take advantage of this opportunity. We are the clear market leader in old-age provisions, with 300,000 policies and a market share of approximately 30%.

The advantages: Receipt of the deposited capital plus the government premium is guaranteed. After expiration of the minimum ten-year contract duration – insofar as no pension qualification exists – the collected capital can be paid out subject to subsequent taxation, reinvested in old-age provisions or used as a one-time contribution for a life-long pension, payable at no earlier than 40 years of age.

There is tremendous untapped potential in the area of company old-age provisions. The introduction of employee group insurance based on the model of classic life insurance expanded the range of offerings in the area of company old-age provisions previously served predominately by pension funds.

Great interest in company old-age provisions

According to an exclusive study by the market research institute FESSEL-GfK commissioned by Raiffeisen Versicherung, the employee group insurance was still unknown to 77% of Austrians shortly after its introduction. The same study showed that those surveyed placed company old-age provisions products in fourth place amongst the provision alternatives. Every second worker would even prefer a company pension to a salary increase. We offer models for this with our employee group insurance and provident insurance, as well as through pension funds.

UNIQA is seeking to score points with companies through a new employee group insurance. The offer provides companies with the security they desire to ensure their capability to provide promised benefits through the guarantee of minimum interest rates, allocated profits and life-long annuity payments.

Transforming salary into company pension

The UNIQA Group has also developed for companies two attractive models for company pensions through conversion of employee salary increases – with advantages for both sides. Salary increases converted into contributions for provident insurance save the company money on social security contributions and are deductible as business expenses. At the same time, employees transform the salary increase, which is not subject to taxation and social security contributions, gross for net into a guaranteed life-long pension, with provisions, for surviving dependants.

Companies have a choice in the type of investment: either classic life insurance with guaranteed payout values and annual vested profit allocations, or unit-linked life insurance with greater prospects for better interest rates on the invested money coupled with higher risks.

We are also optimally situated in the area of company old-age provisions through pension funds. Our partner ÖPAG, the most experienced pension fund in Austria, is considered the best pension fund in the country. In addition, the new indemnity system has been competently implemented in our complete solution for business customers with our partner for company pension schemes, ÖVK Vorsorgekasse.

New fund policy with optimal freedom of choice

Our specialist and the market leader for unit-linked life insurance, FINANCELIFE, once again set new standards for innovative provisions in 2006. With "FL active" and "My Raiffeisen fund policy PLUS", this creative product developer created exclusive offers that combine guaranteed insurance protection with an intelligent concept for asset management.

These offers give the customer power to choose. During the policy term, they can combine the guarantee on their invested money with investment in international stocks or bond funds of various compositions however they like. And they can change their decision at any time. A flexible opportunity for future provisions that is unique throughout the market.

Next Generation

Roland Kwitt, 25 Austria, research assistant at Salzburg Research

In his diploma thesis, which was recognised with an award from the Federal Ministry for Education, Science and Culture, the ITS graduate developed methods of detecting, amongst other things, hacker attacks on the World Wide Web. The Salzburg University of Technologies has already put these methods successfully into practice.

Mr Kwitt, your industry is considered very rich in innovation. How do you arrive at new ideas? Well, we don't reinvent the wheel. But the world is constantly in motion and this always gives rise to new challenges. It is only necessary to critically question what exists – then one finds sufficient ideas regarding what could still be optimised. I simply enjoy asking the questions: How can that be done better, more efficiently, more quickly? How can I achieve my optimal goal?

That sounds very technical and rational.

It isn't intended to. I am of the opinion that technology should always be in the service of humanity. For example, my programme makes it possible to exchange information more securely. To me, technology is a tool that can be used intelligently for the optimisation of work processes.

As a qualitative market leader, we are always looking for new and innovative ideas that further improve our service quality. We consider it both our job and our duty to confirm our customers' trust in UNIQA, as being the leader in innovation through customised solutions.

"One must first invest, then one can profit."

Interview with Franz Fischler

Franz Fischler became the Austrian Federal Minister of Agriculture and Forestry in 1989, and as a member of the European Commission for European agricultural policy from 1995 to 2004, he was responsible for rural development and, as of 2000, for European fishery policy as well. Today, he works as a consultant, gives talks and lectures, and is the Chairman of the Eco-Social Forum.

Dr Fischler, you are familiar with the opportunities and pitfalls of the political process. What fascinates you in particular about politics?

In politics, I have always been fascinated by the ability to influence developments and shape the future. I have also always enjoyed being constantly in direct contact with many different people.

How do you measure the success of a project – based on public acclaim?

Public opinion is a factor that should be considered. However, the most important thing in politics is to communicate decisions transparently and verifiably. In addition, I measure politics, as well as myself, based on implementation of the goals.

You are considered a "European by conviction". What tasks still lie ahead for Europe, in your opinion?

The most important tasks for the future are, in my opinion, ensuring sufficient jobs and fighting unemployment. To do this, it will be necessary to make our economy more know-how intensive, reduce bureaucracy and also ensure social justice and more responsibility toward the environment. This is also the European

answer to globalisation. However, these are not tasks for the European Community but rather shared tasks in which we all must make our contribution. New sales markets that will help secure jobs will also arise in this way. There is tremendous potential for Austria in the East, in particular. We already profit the most from the expansion and must do everything possible to continue this success story. The Central and Eastern European countries have a long way to catch up, particularly in banking and insurance, as well as in IT. We must optimally serve the markets at our doorstep.

What does that mean in concrete terms?

We need a more innovative economy. We only register half as many patents every year as the USA and also have only half as much risk capital. One must first invest, then one can profit.

What is your personal recipe for success?

I believe that one should be open to everything new, but at the same time maintain a critical attitude. Only by asking new questions to provoke new answers can we make progress in politics.

FinanceLife created another flexible investment concept in the form of the limited edition "Bonus & Garantie II" and "TOPAS BEST 20-GARANT II". It combines the capital guarantee with high yield prospects and tax advantages. The income earned year after year is not only regularly credited to the investor, it is paid out tax-free after just five years, or no later than at the end of the contract.

Increasing importance of private nursing care provisions

The increasing average age of society presents enormous challenges, not only for the state pension system but also for the financing of caretaking insurance. Approximately 550,000 Austrians currently require nursing care. In fifteen years, there will be an additional 350,000 people of over the age of 75. According to estimates, caretaking costs could rise by up to 400% by 2030. The state nursing care allowance may then fall far short of financing care for the elderly.

Timely private nursing care provisions are becoming the order of the day. For this reason, UNIQA and Raiffeisen Versicherung developed new, flexible options for provisions against the financial burdens care in old age. Nursing care insurance is available as a supplement to pension insurance and also as an independent policy with single or recurring premiums. The benefits are independent of the state nursing care allowance. Independent experts determine the level of nursing care needs.

New answers for the future of the health care system

As the insurance company of a new generation, we must provide new answers to the burning question of the future of our health care system, because expenditures will increase over the coming decades at above-average rates due to demographic developments and the rising costs for modern high-tech medicine.

With new types of products and attractive offers, we are setting a clear course to curb the rise in costs and premiums through prevention. We provide private customers with information and meaningful offers for a healthy lifestyle through our VitalClub. And we expand on this prevention initiative for business customers and their employees. In cooperation with the Institute for Health Management, our UNIQA HealthService offers companies not only individual prevention modules but also a comprehensive health balance sheet for the company.

Health account for curbing contribution increases

We imagine a private health account as a suitable instrument for curbing future contribution increases in the state health care system. It would be funded with regular payments and serve for financing of minor health care services that are no longer covered by the state. State subsidisation of this health account, as for old-age provisions, would make the model even more attractive.

"Select special category" is a bestseller

We have made the entry into private health insurance more interesting for people just starting their careers and for young families on a tight budget with the new "select special category" premium class. We are the only insurance company in Austria to cover the full costs of particularly serious illnesses and accidents at lower premiums than with complete medical insurance of the special premium class.

In addition, we offer the savings model known as FutureBonus. During times when one is earning well, it is possible to pay a higher premium, which reduces the premium burden after retirement.

Increasing outsourcing of processes

We are supporting the increasing internationalisation of our business through creative solutions in our administrative and service processes. For instance, we set up Group IT competence centres in Poland, Slovakia, Hungary, Romania and Croatia in recent years.

In these competence centres, we not only maintain and develop IT solutions for local markets but also for other regions within our field of operations in Central and Eastern Europe. We even distribute classic insurance processes within the UNIQA Group to various locations in the respective region. In this way, we utilise cost and synergy advantages without any decrease in the quality of the service.

The internationalisation of the administrative and processing processes is also creating new jobs in Austria, since the duties of roughly 200 employees at the UNIQA headquarters are directly related to the activities of the Group outside of Austria.

U.CIS for a new era of customer service

We took a decisive step in 2006 toward better utilisation of our customer potential, and toward creation of many more complete customer relationships, with the rollout of the UNIQA customer information system U.CIS. The modern online database opens up an entirely new dimension of advising. U.CIS offers us the opportunity to consolidate and statistically analyse all the information from our existing policies, supplemented by the information collected by our representatives in personal conversations with customers.

Electronic access to the individual profile of every policyholder offers the opportunity for service tailored to individual needs as well as access to untapped potentials through cross selling. The start of a new era for our ExclusiveSales programme, which we are also introducing at the subsidiaries in the Czech Republic and Slovakia in 2007.

The holistic approach of U.CIS, which includes not just an individual person but the whole family, will contribute to significantly increasing the number of policies per customer. However, the system will also allow for better service quality and therefore customer loyalty.

Competition offensive ensures maximum quality

With the aspiration of being an insurance company of a new generation, we had to offer our most demanding customers an extra class of service. Constantly improving this service is the goal of our ServiceCup. The winning team of this internal competition must rank at the top in multiple categories: correct processing of policies, the speed of precise and unbureaucratic handling of claims or accessibility by telephone.

Ratings by our customers decide the winner of the ServiceCup. The gratifying result: 81% of customers gave us top marks.

But customers also expect attention, speed and correctness in the processing of a claim. For this reason, we hold the employees of the service departments to the highest standards of professionalism, sensitivity and communication skills.

Top satisfaction with the central customer service

This challenge must be met by our central customer service in 2,500 inquiries per day. Competence as well as the ability to establish an insightful dialogue are basic requirements for the employees.

We therefore apply the highest standards to their selection, education and training. Our customers' assessment of our central customer service, which also works for group companies such as Raiffeisen Versicherung and FINANCELIFE, is clear: 94.2% of those surveyed are very satisfied or satisfied with their personal contact person, 85% would recommend our central customer service to a friend.

Providing our customers with online access to their policy data is a natural part of our business. With the Internet communications portal myUNIQA, they have constant access to the PartnerConto, including the most important services, all insurance policies, the payment plan or an overview of the no-claim bonus, their current PartnerPoints status or the contact information of their exclusive representative.

Pioneering accomplishment in portal technology

Raiffeisen Versicherung also achieved a pioneering accomplishment in a new portal technology for its customers. They now have access to an exclusive offering at the Internet address mein.raiffeisen.at.

In addition to the overview of policies and premium due dates available at any time, the user can order special benefits through this online service, such as short holidays in top hotels at preferential rates or hotel vouchers.

MedPLUS24

UNIQA customers with the MedPLUS24 service can directly contact the medical call centre staffed with knowledgeable physicians to answer their questions. Medical information of all kinds is available, such as explanation of test results and diagnoses, a second opinion, alternative treatment options, tips for medical check ups, travel medicine or addresses of appropriate hospitals and supplemental services.

Our health platform MedUNIQA has now long established itself as the largest and most comprehensive Austrian medical website with over 160,000 accesses per month, thanks in particular to the current and up-to-date articles it publishes on the Internet. The professional mixture of knowledge base, news and, above all, services is exceptionally attractive. Not least of which is the MedPLUS24 service, which offers our customers the opportunity to consult with a physician by telephone.

Highlights

With the usage-optimised insurance (UOI) we are working on a unique and innovative motor vehicle insurance product that will be introduced to the market at the end of 2007.

In the area of pension provisions, the UNIQA Group is the clear market leader in Austria with a market share of 30%. We are also forerunners in health insurance and in nursing care provisions.

The U.CIS customer information system provides our customer representatives with a new dimension in consulting – and gives them access to untapped cross selling potentials.

In 16 markets, the focus is on one thing: people.

The insurance of a new generation.

Group and Profit

The internationalisation of our company portfolio and the profit improvement programme are consolidating our leading position in Austria, and our increasing importance as a profitable player in Central and Eastern Europe.

The clear increase of our premiums and profit in the 2006 financial year was the result of our company strategy aimed at consequent internationalisation and yield-oriented expansion. Our position as one of the leading insurance groups in Austria has remained the basis for our success.

With the strategy of concentric circles around the Austrian market, we are focussing on profitable insurance niches in Western Europe (WEM), but, in particular, on the enormous growth potential in the New Eastern Emerging Markets (NEEM) on the eastern border of the European Union as well as on Central and Eastern Europe (CEE).

New markets in Eastern Europe as growth drivers

The new markets, with their considerable need to increase their economic prosperity, insurance coverage and old-age provisions, are our strategic growth drivers. We are utilising their potential with prudent determination. We are now operating in fifteen countries outside of Austria. And we are constantly evaluating the possibilities of becoming active in other regions of Eastern and South-Eastern Europe.

16 countries

The UNIQA Group is active in Austria and in fifteen other European insurance markets. In total, the UNIQA Group attained a premium volume of € 5 billion. The profit made on ordinary activities for 2006 amounted to € 238.5 million – whereof approximately 30% is attributed to international markets.

The preferred partnership with the Raiffeisen bank group is a reliable pillar of our internationalisation strategy. Together with our local banking partners, we provide services to over 10 million clients in the eastern target markets.

Leading life insurer acquired in Serbia

We increased UNIQA's presence in the largely untapped emerging markets of South-Eastern Europe in 2006. At the beginning of November, we acquired 80% of the share capital of Zepter osiguranje A.D. in Belgrade. Concurrently, the general conditions for the acquisition of the remaining shares were specified. We renamed the company "UNIQA a.d.o." at the start of 2007 and successfully launched the UNIQA brand in Serbia.

The sixth-largest insurer in Serbia is one of the country's largest life insurers with more than 26 branches operating in the market. There are approximately 100 in-house employees. Brokers, cooperation partners as well as employed and freelance salespersons are involved in sales.

We aim to consolidate the position of UNIQA osiguranje as a leading life insurer by building up bank sales, made possible by the signing of a cooperation agreement between UNIQA and the Raiffeisen banka in Belgrade. The life insurance business is developing very positively and promises to create great opportunities.

The Serbian insurance market, which has annual premiums of approximately € 420 million, is currently dominated by property insurance, which makes up about nine tenths of the market. Therefore, we will broaden the offer of the new Group company to include innovative property and motor vehicle insurances.

Our involvement in the future growth region of Serbia perfectly complements our activities in South-Eastern Europe. The Serbian economy has achieved above-average growth levels in recent years. In 2006, despite increasing inflationary tension, the total economic output experienced a real growth of approximately 7% and is, therefore, on a steep growth path.

Entry into the Ukrainian market

We entered into the Ukrainian market in May 2006. The entry was a new milestone in our massive commitment in Eastern Europe.

With its 47 million inhabitants, the Ukraine is considered to be one of the largest and most promising markets in Eastern Europe. Due to its enormous need to catch up, the economy is growing dynamically: Despite double-digit inflation rates, the total economic output increased by more than 6% in 2006, and will continue to grow at a similar pace in the next years.

First, we took an equity stake of 35% of the share capital of Credo-Classic in Kiev, which was previously only active in property insurance. At the same time, an agreement was reached to gradually increase our involvement to 76% by 2009. Credo-Classic is the seventh-largest insurer in the country and has a premium volume of around € 30 million and almost 950 employees working in or outside of the office at 26 locations.

35%

The UNIQA Group acquired 35% of the seventh-largest Ukrainian insurer, Credo-Classic, in 2006, and founded the Kiev-based UNIQA LIFE.

Extreme consolidation of the market

A process of extreme consolidation is taking place in the Ukrainian insurance market, which still consists of more than 400 companies. The ten largest companies currently only have a market share of around 21%. The greatest potential for growth in the next few years will lie in motor vehicle liability insurance, which has been compulsory since 2004, and the clearly underrepresented life insurance.

For this reason, we founded the Kiev-based UNIQA LIFE in October, with identical capital shares to Credo-Classic. The company immediately began selling life insurance, though at first mainly via Credo-Classic's extensive marketing network.

Cooperation with Raiffeisen Bank Aval

The new cooperation with Raiffeisen Bank Aval, the leading retail bank in the country with 1,400 branches, offers great possibilities for expansion. It gives access to 3 million clients and creates an enormous potential for cross selling property insurance and other products. Therefore, Credo-Classic developed further offers in 2006, such as traveller's accident insurance and travel cancellation insurance.

In the course of our expansion strategy, we had already achieved a foothold in the Romanian market in 2005. After acquiring 27% of the share capital of the seventh-largest Romanian insurer, Versicherung ASTRA S.A., we intend to acquire the majority interest of the company in future.

New logo for the Romanian market

After a decision at an extraordinary general meeting of ASTRA and UNIQA, the company now appears under the new ASTRA-UNIQA logo. The logo was presented to the public at a launch event in Bucharest.

The company aims to become the market leader in the Romanian insurance market in future, by utilising the solid basis of both partners and innovations in its broad product spectrum for private and corporate clients. The high expectations of the management for 2006 have been fulfilled by an increase in premiums of over 80%.

The service was also improved in 2006 by the new website www.astra-uniqa.ro, which enables online access to products and contract data. Furthermore, Romanian clients can now reach the call centre at a freephone hotline number, and pay in their policy fees at any post office country-wide.

Joining the EU promotes prosperity in Romania and Bulgaria

The admission of Romania into the European Union as of 1 January 2007, will add further impetus to the country's economic catching-up process. Supported by a strong increase in private consumption and a robust growth in investments, the country's real production rose by more than 6% in 2006.

The unemployment rate has levelled out at about 6%; inflation continues to fall, recently hitting 7%. These are favourable prerequisites for a basically problem-free expansion over the next few years. Our activities in this future growth region will benefit by this.

As will our commitment in Bulgaria, which also became a new EU member at the beginning of 2007. After taking over 20% of the capital stock of the sixth-largest Bulgarian insurance company, Vitosha, in the year 2005, we have been responsible for managing the Sofia-based company since 2006. At the beginning of 2007, we took over the majority of the shares and rebranded Vitosha into UNIQA. We plan to increase our commitment to at least 75% by 2009.

The cooperation with the Raiffeisen banks in Bulgaria has resulted in an enormous growth spurt in property insurance, and particularly in the life insurance business.

Capital increase for future investments in Bulgaria

A capital increase of € 18 million in 2006, made Vitosha one of the best capitalised insurance companies in Bulgaria. Aside from building up reserves, the influx of capital has served to finance important investments for the future. The goal is to strengthen the impact of marketing, modernise the IT system and to increase the brand awareness of UNIQA in Bulgaria.

In 2006, to reinforce our brand in the Bulgarian market we launched a campaign in motor vehicle liability insurance called "Stick and Win". And we also promoted UNIQA as a quality brand in the aspiring new EU member country through an advertising cooperation with Krum Donchev, the Bulgarian runner-up in the European rally championships.

Faces for UNIQA

Sports sponsoring is one of the cornerstones of our marketing activities in Central and Eastern Europe. For example, we were able to increase the brand awareness of UNIQA amongst the public as the main sponsor of the world water slalom championships held in Prague. In Bulgaria, we are working successfully with Krum Donchev, the runner-up of the European rally championships, as a public advertising medium in the aspiring new EU member country. Moreover, we support Sparta Prague, the most popular Czech football club, and in Hungary the games of the Handball Champions League. We are also continuing the Group "faces for UNIQA" campaign with a partnership with the Czech world-class kayak paddler Stepanka Hilgertova, the Serbian ex-basketball star Alexander Djordjevic as well as in Slovakia with the successful ski racer, Veronika Zuzulova, and in Hungary with the well-known water polo players, Adam and Barnabas Steinmetz.

Interview with Hans Peter Haselsteiner

Over the past 30 years, the 63-year-old entrepreneur has turned a family business based in Carinthia into one of the largest construction firms in Europe, which is planning an initial public offering in 2007. As one of the leading suppliers in Central and Eastern Europe, STRABAG has over 50,000 employees at over 500 locations and provides construction services amounting to more than e 10 billion a year.

Dr Haselsteiner, you have written a success story in the construction branch that is quite unusual. Why are you so successful?

I am often described as calculating with a cool head. I find this description too one-sided. But it is an on-the-mark description of a certain side of my actions: I always make sure that I have minimised the risks and use the opportunities that the market offers in a consequential and decisive manner. You can only be successful if you act economically. Because you don't build for its own sake, construction is an economic activity that has to pay off over the long run, like any other business.

What do the new markets in Eastern Europe mean to you?

Without a doubt, Eastern Europe is a market of the future; in certain areas its expansion rate is even outdoing the growth rates in China. In ambitious markets, the construction business is always there before all the others. And the need to catch up in the next 30 years is huge in the countries of Eastern Europe. What it took us 60 years to accomplish after the war is expected to take place in just a short time in the emerging markets. An enormous potential for the future of the construction

If you want to be successful in business you have to be ready to cross borders and take on risks. UNIQA provides its customers with a reliable and experienced partner in sixteen countries, helping them guard against, and overcome, entrepreneurial risks.

"You can only be successful if you act economically."

business, which can contribute substantially to the economic development of Eastern Europe and its people.

What are the important factors in the development of Eastern Europe?

Entrepreneurial thinking must adapt itself to the needs of the markets. All-purpose strategies or across-the-board solutions don't help here. What we need are fitting comprehensive concepts for the special situations in the individual countries of Eastern Europe. Those who develop intelligent custommade solutions are, as always, a step ahead.

Next Generation

Gerlinde Fellner, 29 Institute for Political Economy

The scientist examined the influence of psychology on the financial markets in her thesis and received two awards for her work.

Ms Fellner, you tie human behavioural patterns to macroeconomic developments. What discoveries did you make here?

Human behaviour in economic and financial markets is much less characterised by rational calculation as economic theory would like to assume. The quality of a decision definitely depends on emotional and social processes.

Do you see differences here between Western and Eastern Europe?

There is a divide between West and East in the willingness to take risks. However, the people in most of the Eastern European countries are currently being confronted with major economic changes. They still have little faith in government institutions. This can dampen the growth rate. Above all, those companies that operate in the market must help to reduce these trust barriers.

How can you explain the success of your scientific work?

In research, as in most other professions, hard work and persistence pay off. But building up cooperative partnerships and networks is decisive for success.

Our new campaign also started internationally in 2006: The print campaign began in the early summer, almost simultaneously, in four Eastern European countries. In the autumn, we broadened the campaign to include two additional countries.

UNIQA Hungary receives quality seal of approval

UNIQA Biztosító Zrt., operating in Hungary for sixteen years and based in Budapest, has earned a reputation as a pioneer for product innovation as well as a top address for first-class customer service. These achievements were recognised in 2006, with the ISO certification and the issuing of the seal of approval through SGS Hungaria GesmbH by an external audit firm.

The niche product "Super-G", travel insurance with extra coverage which was developed towards the end of 2005, in collaboration with Car-Tour International travel agencies and the Hungarian Ski Academy, has already become a great success in Hungary. The product was upgraded to "Super-G+" with an additional personal liability insurance in connection with a motor vehicle assistance service, and was taken out by almost 10,000 clients in the past winter season.

The introduction of the VitalClub in Hungary made UNIQA Hungary the first Group company outside Austria to strengthen the activities in the area of health care. The prevention programme was introduced in April 2006 in the form of a health week, several VitalWeekends and UNIQA company sport days.

UNIQA Biztosító Zrt. was awarded the quality seal of approval for first-class service. Our Hungarian subsidiary has been impressing people with product innovations and an outstanding understanding of service for sixteen years.

Network of agencies has expanded further

We have increased our presence in Hungary by opening the 100th agency office. The advantage of the agency system, which is unique in Hungary, is that external UNIQA employees can operate agencies on their own account.

The agency network and the office's own network give UNIQA Biztosító a powerful basis for expanding the business. A result of our dynamisation projects, with which we aim to increase our market share in countries such as Hungary, Poland, the Czech Republic, Slovakia and Croatia through integral, sustained and profitable growth.

With a market share of around 6.5% and over 1,100 employees who look after more than 320,000 clients, we are now not only the no. 6 in Hungary; above all, we are the most rapidly expanding business on the Hungarian insurance market.

Reorganisation increased the sales force in Poland

In 2006, the Group companies UNIQA and FILAR in Poland focussed on the optimisation of all processes which serve to continually improve the quality of service. The reorganisation of sales structures was part of this.

The role of bank sales reached a whole new dimension as a result of the framework agreement with Raiffeisen Bank Polska. In particular, in the case of life insurance – especially unit-linked policies – the sale over the bank counter is becoming increasingly important in Poland as well.

As part of the preferred partnership between UNIQA and the Raiffeisen bank group, we developed a special offer for Raiffeisen's clients in Poland. It includes diverse new products such as insurance coverage for unemployment, improper use of credit cards or loss of money. Furthermore, we insure the leasing vehicles of Raiffeisen Leasing Poland.

ExclusiveSales in Poland was strengthened considerably, the reorganisation of FILAR's office network was completed and the broker service was totally restructured, both internally and across the region. In the process, we made sure the contact to the bigger brokers was efficient. A special team was trained to see to their needs.

New channels of distribution were developed

In 2006, we reached a cooperation agreement with car dealers in Poland to open up new channels of distribution. A special motor vehicle policy was offered to selected clients. The range of products was also increased and made more attractive in other areas of insurance.

We introduced a new house and flat insurance for private clients and developed a comprehensive security offer for small and medium-sized enterprises in Poland, as well as a tailor-made comprehensive insurance package for important cooperation partners in residential cooperatives.

Award for the best insurance in Poland

Furthermore, we began the sale of a unit-linked life insurance that is also suitable as a company old-age provision. We also brought innovative solutions for health care onto the Polish market.

The efforts taken by UNIQA TU to constantly optimise services were rewarded by the monthly magazine "Home & Market" with the conferring of the title "Best Insurance Company".

Brand awareness increased in the Czech Republic

Our subsidiary UNIQA pojišt'ovna based in Prague launched new activities in 2006, to further increase brand awareness and our market share in the Czech Republic. As the main sponsor of the world championship in water slalom, we increased the advertising awareness of the public to UNIQA.

Thus the prerequisites for a continued high expansion rate in insurance and old-age provision have been created for the current year.

New products for Slovakia

UNIQA poistovna was successful in Slovakia in 2006, thanks to new products and sponsoring activities. The market launch of the unique life insurance "life insurance joker" aroused much public attention. Furthermore, a group life insurance and the health insurance MedExclusive were offered for the first time.

In 2006, we again successfully participated in the "golden coin" competition for the best products from the banking and insurance industry and this time, we took third place for our household insurance product. This allows us to advertise publicly with the "golden coin" logo.

Bank sales begin in Croatia

Together with the Raiffeisenbank Croatia our extremely rapidly expanding company in Croatia, UNIQA osiguranje, launched the sale over the bank counter of credit balance insurance and a credit card package. This distribution channel now makes up 15% of UNIQA Croatia's existing premium volume, contributing more than usual to expansion.

At the beginning of the year, the Croatian company presented a new boat insurance at the Zagreb Boat Show and the Croatia Boat Show in Split. We were also the main sponsors of the chamber music festival by Julian Rachlin & Friends in Dubrovnik, for the third time. By inviting selected guests to this event, we made our contribution to the idea – very popular in Austria – of an ArtCercle.

Best insurer

UNIQA received the award for "Best Insurance Company" in Poland. We have been operating successfully on the Polish market since 1998, and have been setting standards with our innovative products.

Successful switch-over process in Bosnia

Our company in Bosnia and Herzegovina successfully switched to the UNIQA brand in 2006. This was achieved through advertising on television and advertising signs in Sarajevo and other cities. The UNIQA brand was thus successfully introduced to the Bosnian insurance market, while at the same time emphasising the reliable cooperation with the Raiffeisen bank group within the framework of the preferred partnership.

With the start of bank assurance in Bosnia and Herzegovina, the Group company brought an innovative combination product to the market for the acquisition, financing and insurance of real estate. The unique offer will give new impetus to the continuously high rate of expansion of our business in Bosnia and Herzegovina.

UNIQA Osiguranje is now the fifth-largest insurer in Bosnia and Herzegovina. In life insurance, the company has even reached third place.

Mannheimer Versicherung on course for success once again

In Germany, our Mannheimer insurance group was once again on course for success in 2006. The company managed to slimdown internal procedures and increase the number of its brokers significantly, particularly in on location broker sales.

With its growing brand programmes, in particular, the Mannheimer multi-risk policy for the middle-class, the company operated with extreme success. In connection with special expertise for target groups and underwriting and pricing by competent local brokers, the company will further consolidate its position in the medium-sized company segment of the market.

Additional impetus for the broker business

The extraordinarily fast-growing broker business was given additional impetus by the opening of the new industry headquarters in Ulm, at the beginning of 2007, as a result of access to one of the most rapidly expanding economic regions in Germany. The entire UNIQA Group profits from the role Mannheimer Versicherung plays within the corporate Group as a competence centre for target groups and brand programmes.

As a provider of specialist services and niche insurance, Mannheimer is distinguished by its insurance of the SINFONIMA music instruments. This includes a special and comprehensive insurance coverage in the area of music: for musicians, orchestras, hobby musicians and anyone who owns a musical instrument.

Private insurance programme in Liechtenstein

The Vaduz-based UNIQA Group companies are, amongst other things, established as product pioneers in Liechtenstein with innovative concepts for asset management and art insurance. The insurance concept for the new generation with changed provision needs has taken shape with the development of the private insurance programme "Liechtenstein Privileg", which offers individual solutions for all phases of life.

The cooperation between UNIQA Liechtenstein, Finance Life, Raiffeisen Capital Management and Raiffeisenbank Liechtenstein enabled the creation of a product with the best of both worlds: The "tailor-made suit" for investment, refined by the privileges of the life insurance line in Liechtenstein. In addition, the subsidiary achieved much success amongst art lovers and private collectors as a result of the all-risk coverage from its art insurance programme "CasaArte".

High-quality service in Switzerland

The continued success with innovative group health insurance in Switzerland achieved by UNIQA Assurances in Geneva is attributed to the high quality of service and an advisor team selected for the consulting needs of international organisations, embassies and missions.

The European nuclear research centre CERN remains the biggest client with 12,000 policyholders. The Swiss Group company's high level of service was confirmed by the renewal of its ISO quality certification.

Synergy leads to success in Italy

The integration of our three companies in Italy under one management, which was initiated after acquiring the equity majority of Claris Vita, which was branded UNIQA Previdenza at the beginning of 2007, and accessing bank distribution via the branches of the Veneto Banca, brought the desired success. The introduction of competence and corporate centres made it possible to utilise the specialised expertise of the separate companies for the entire Italian group.

UNIQA Assicurazioni is the specialist for health insurance; UNIQA Previdenza is responsible for life insurance; while CARNICA takes care of the property and casualty insurance business. The company with the best competence in a specific area makes its specialised experience available to all Group companies in all channels of distribution, through the technical development of new products.

New accident insurance for all distribution channels

Thus the new accident insurance rate, "Prospettiva Sicura", which CARNICA made ready for the market, has been sold by all agents from the three companies since November 2006. The product's suitability for use in all distribution channels was already taken into consideration during the design phase.

As a special service and instrument of customer retention, UNIQA Previdenza introduced the "UNIQA Aura" credit card in cooperation with Veneto Banca and Findomestic. Clients in Italy can use the card to pay for purchases or insurance premiums in instalments, recharge their airtime or pay motorway tolls.

Extended financial scope for EBRD commitment

The European Bank for Reconstruction and Development (EBRD) gives us considerable support in opening up our target markets in Eastern Europe. Up to now, the bank has invested € 46 million in our Group companies in Croatia, Hungary, the Czech Republic and Poland, within the scope of its financial commitment.

We intend to increase the cooperation with the EBRD in the current year. The EBRD will support our involvement in Bosnia and Herzegovina, Serbia, Romania, Bulgaria and the Ukraine over the next few years, by acquiring a minority stake of the UNIQA companies.

In view of the exceptional growth rate of our Group, UNIQA Versicherungen AG issued supplementary capital bonds to the value of € 250 million as a further boost to its capital resources. The ownership ratios and voting rights of our shareholders remained unchanged by this measure used to finance our expansion with supplementary capital.

"A" rating

This year, UNIQA once again impressed the rating agency Standard & Poor's: Once more, the international agency gave the UNIQA Group an "A" rating.

Standard and Poor's confirms "A" rating

According to a recent analysis by the international rating agency Standard & Poor's, the fundamental data of the Austrian insurance industry has strongly improved during the past few years and is predicted to remain at a good level in the future. The reason for this positive development lies in healthy growth rates, the booming life insurance business in Austria and the expansion to Eastern Europe. Despite increasing price competition in some areas of property insurance, the results are convincing and the outlook for this line of business is stable.

UNIQA insurance group's sound financial state was also confirmed by Standard & Poor's in 2007. The rating of the UNIQA Group, as well as that of its core companies: UNIQA property insurance, UNIQA personal insurance and the Zurich-based UNIQA Re, remains consistently good at "A". The outlook of the individual companies and the Group as a whole was assessed by the agency as "STABLE".

Highlights

The UNIQA Group's premium volume amounted to over € 5 billion in 2006. About a third of this came from the countries outside of Austria.

In 2006, we entered the market in Serbia and the Ukraine. When developing our target markets, the preferred partnership with Raiffeisen is an important component of our internationalisation strategy.

The cooperation with the EBRD is a cornerstone of our expansion in South-Eastern and Eastern Europe and has existed since 1998. We plan to further intensify it in the future.

Behind success is a staff with a vision.

The insurance of a new generation.

Staff and Partners

Our corporate values of quality, flexibility, togetherness, decency and respect mark how staff deal with each other and with partners in Austria and abroad, as well as our overall social commitment.

A symbol of our corporate culture visible for miles around and our distinctive profile in the insurance landscape is the UNIQA Tower, the Group headquarters in Vienna. For behind this innovative structure stands not only a creative architect, but also a visionary client.

For this reason, we see the awarding of the building designed by renowned architect Heinz Neumann with the Client Prize 2006 of the Central Association of Austrian Architects, as recognition of our corporate concept of the insurance of a new generation.

Award for corporate architecture

The jury praised the transparent and imposing appearance of the building, which matches the image of UNIQA. It also highlighted the fact that UNIQA will be making another mark on the urban landscape in the coming years with the "Praterstrasse 1" project by architect Jean Nouvel, to be constructed on the left bank of the Danube opposite the centre of Vienna.

The award of the Client Prize 2006 also acknowledged our nighttime lighting system on the tower as making an important contribution to "metropolitan life". We adjust the exterior lighting to match current seasonal events. The illumination of the UNIQA Tower in this form is unique anywhere in Europe.

Modern workplaces created in the region

UNIQA also offers examples of sound and functional corporate architecture in other regions. Following the conversion of the regional headquarter for Carinthia and East Tyrol, we concentrated our three locations in Klagenfurt on a single space of around 3,000 square metres. Around 145 staff moved into new offices with a high level of flexibility, mobility and easy communication.

Innovative: The lighting system on the UNIQA Tower

The regional headquarters in Innsbruck is also constructing a new central office building for about 250 staff. The six-storey new-build of 3,900 square metres is incorporated within a health and social insurance centre. The project should be ready to occupy this year.

New headquarters for Prague subsidiary

In Prague, around 300 staff from UNIQA Czech Republic moved into a new four-storey head office in 2006. Sixty per cent of the architecturally and technically ultra-modern headquarters, with a floor space of around 8,000 square metres, is thus utilised by our Group company. It is easy to reach by public transport and just fifteen minutes away from the airport.

The staff at UNIQA set a good example in the efforts made concerning prevention and health care. In 2006, we initiated the campaign series "UNIQA@work" in all regional headquarters, regional service centres and in the UNIQA Tower in Vienna. These campaigns should allow our staff to personally experience the activities of the VitalClub.

Fitness plan for staff

The project devotes itself regularly to another important topic. The campaign day "Success through mental fitness and brainfood" was met with great interest in all parts of Austria. The topics of "VitalAging" and tips on proper nutrition also met with a high degree of acceptance. Sport and movement are at the heart of "UNIQA@work" in the fight against monotony at the workplace in 2007.

According to international studies, staff with diverse skills are especially sought after for management positions in financial services companies. In addition to the necessary specialist knowledge, they must, above all, have overseas experience and knowledge of other languages.

Career studies abroad

The mobility programme "Go Ahead" developed by specialists of the UNIQA Human Resources-Service in 2004 for international staff was, therefore, also met by a high level of acceptance in its third year. A total of 129 staff have garnered experience through short-term appointments abroad. These assignments opened new professional and cultural horizons to them, improved their language skills and strengthened their competence within our Group.

The robust expansion of UNIQA will require many more participants in the international exchange of experience. Therefore, with "Go Ahead Light" we are offering a mobility programme reduced by 20 to 60 working days for staff who are unable to take on a longer stint abroad for personal or professional reasons.

These staff work for the agreed period of time in a host company of our Group, but continue to exercise their function in the home company. We are increasingly introducing this type of learning to all actuarial/technical areas and service functions, and expanding it to Sales.

Management helps management

With "Go Ahead Light Mentoring" we are also building on the internal cooperation of our management staff. Under this programme, experts from headquarters and the regions act as mentors for specific corporate areas in the subsidiaries and support their position holders. Thus, a team leader from our central sales organisation supports the sales organisation in Prague locally in designing processes, while retaining his function in Austria.

The tried-and-test staff appraisal used to optimise the working climate in the company was further improved in 2006. It offers an annual platform on which to define structured professional targets for the future, to estimate performance potentials together and to clear up misunderstandings at an internal discussion between management and staff.

Living corporate values

We gained insight into the internal corporate culture of UNIQA by carrying out an anonymous survey of 2,925 staff and partners. This revealed that our staff live the common corporate values intensively in their everyday professional life. "Decency" and "respect" were cited as being particularly important.

ManagerCircle

Twice a year, the Management Board and managers come together to discuss current aspects of corporate strategy and to develop ways to implement them in work appraisals. This exchange lets us keep an eye on structural conditions on the market and ask critical questions about our strategy.

20,000 days of training

were arranged by UNIQA in 2006, for the ongoing development of its staff, in order to meet the high requirements placed on quality and competence.

ManagerCircle in Vienna and Venice

For more than 120 managers from eleven countries and all areas of the Group, our two ManagerCircles in Vienna and Venice were top-level meetings. They offered the opportunity to discuss the strategic objectives of our insurance Group for the future.

Key to the discussion were the new profit improvement programme, sales strategies, the importance of the preferred partnership with Raiffeisen for our internationalisation strategy and the new principles in the reinsurance business.

Mental fitness through regular training

Unsurprisingly, UNIQA scores particularly well in the insurance industry in a comparison of specialist competence and the sales skills of our teams of experts. This success is thanks to the experts at the UNIQA human resources service who specialise in the promotion of human capital. In 2006, they organised around 20,000 training days that met the familiar demands for competence and quality.

Despite country-specific differences, we impose uniformly high requirements on the training of staff in the international Group companies. We have, therefore, implemented a standardised basic training course. In this way, we are able to guarantee the same conditions for working in our company – from Poland to Croatia. After basic training, the companies also offer specific further training packages.

Conveying knowledge around the clock with eLearning

To help staff prepare ideally for tests, we are increasingly offering the option to work through the training material independently, using eLearning. We consider electronically supported learning on the computer and the Internet as a modern opportunity for flexible operational training. As a pioneer of eLearning, we also operate an electronic platform that allows users to refresh their knowledge and which acts as a reference work, available round the clock.

Training with a future – to become a FinancialAdvisor

We offer additional opportunities for a job with a future through our training course to become a UNIQA FinancialAdvisor. This is because a new generation of clients is demanding high-quality solutions for insurance and pensions, as well as creative and yield-orientated solutions for financial investments and asset building.

The FinancialAdvisor training programme, which is run by experts from UNIQA and the Danube University at Krems, includes three courses. Around 120 participants have already successfully completed the programme and thus acquired a high level of consulting competence.

For us, investing in the enhancement of the independent insurance broker is obvious as the insurer with the largest broker sales in Austria. The successful cooperation with our independent business partners is a central element of our corporate strategy.

On an international information tour with the broker academy

We manage contacts with insurance brokers in the form of the broker academy (MAK), which is unique in Austria. With its diverse range of seminars, it has proven itself to be an indispensable service and first-class instrument for our broker managers to manage relationships.

Once a year, the latest module in the seminar programme "MAK international" presents interesting topics with an emphasis on finance within the scope of a trip abroad. Last year, "MAK international" led 115 business partners from Poland, the Czech Republic and Slovakia to the East Asian growth centre of India for the first time.

Other MAK seminars also attracted great interest. These were devoted to specialist sessions on unit-linked life insurance or topics such as "Golf & Management" and "Mental Power Training". These two to three-day compact courses noticeably improve the impact of our broker sales.

Decentralisation of the BrokerService

In the further expansion of our international BrokerService, we have started on the process of decentralisation in the Czech Republic and Poland. This should reduce the concentration on the capitals of Prague and Warsaw and simultaneously build up staff capacities in the regions. In addition, business with large broker customers has been encouraged in Hungary and the Czech Republic.

The extraordinary commitment of our BrokerService was made clear in 2006, by the international participation of 250 staff during the "International team days", which take place every two years.

TopPartner strategy refined

Our TopPartner strategy focussed on the concentration of brokers with large sales volumes exceeded the highest of expectations. The introduction of automated systems led to a greater range of cooperation. More business partners are now selling the products of various insurance sectors. This has reduced the dependency on individual brokers, some of whom are dominant in specific sectors.

The TopPartner strategy was refined in 2006, through the introduction of a third target group. Between TopPartners and DirectPartners, there now fall those partners who are also serviced by broker managers, but not to the full extent of TopPartners.

Interview with Benni Raich

Despite his success, the 28-year-old top athlete of Alpine ski racing has kept his feet on the ground and is much admired, not only in Austria. The two-time World Champion and two-time Olympic Champion won the Overall World Cup for the first time in 2006. He was chosen Austrian Sportsman of the Year last year.

2006 was your top year – two gold medals in the Olympics, Slalom World Cup, Overall World Cup… What is the secret to your success?

First you need a clear objective that you must follow consistently. Even when you suffer setbacks along the way. You can't let it get to you, but have to take the experience on board and continue working consistently towards your final goal. Naturally, success also needs talent, in order to ski at such a high level for years on end. And, of course, you need to love the job. Just like you do in a company. If you don't enjoy managing a firm, you won't have any success either.

Experts say that you are cool in difficult situations, whether you're in the lead after the first run in the Olympic slalom or when a race is postponed. You have to learn to adjust body and mind quickly and flexibly to different situations. You can train for this by simulating unusual situations and also by always trying out new things during training. This not only gives rise to the correct physical reaction, but you also learn to remain relaxed – or cool, as they say. You could also call it "mental fitness".

Next Generation

Astrid Mangi, 17 Figure skater

At the 2006 Junior World Championships, the 17-year-old Viennese surprised everyone with her 13th place at the end of the short programme. She is treated as one of the talents in Austrian figure skating.

Ms Mangi, were you counting on this level of success?

I've counted on a lot, but such a debut at my first Junior World Championship is still hard to believe. It was like a dream!

Figure skating is a solo discipline. What role does teamwork play for you?

A big role. The cooperation with my trainer Sabina Richter-Pavlasova is very important to me. She helps me to develop my own style and find my own expression.

Individual expression? Is this

where the key to success lies? I think it does. In fact, figure skating thrives on the athlete's personal interpretation. You can train your technique, but at the top of the game, personal expression and the individuality of the course determine success or failure.

UNIQA's success is primarily determined by its staff and partners: team play is our central success factor. This is why we promote cooperative activities on an international level and provide our staff with targeted support through individual training programmes.

You are known for being a solo athlete. How important is the concept of "team" to you?

I'm alone on the slope. But before and after my run I need a functioning team, a functioning environment. The team of trainers for skiing as well as conditioning and fitness, the physiotherapists, the doctors, my press agent. Very important, of course, is the service engineer from the ski company. Confidence must be 100%. In a highly developed, innovative area such as skiing, nothing works without a team and partners!

TopPartners

As part of its "TopPartner strategy", UNIQA sets decisive standards in service quality and additional services for the best and most important business partners, the so-called TopPartners. We guarantee them personal support while observing clearly defined service standards, the use of the TopPartnerCard, with its numerous benefits, as well as the opportunity to present themselves briefly on our sales platform.

Since not only private customers, but also brokers can enjoy numerous benefits by opening a TopConto, we are preparing to introduce the SuccessPartnership for small and medium-sized companies, freelancers and farmers in the current year. Another UNIQA innovation which will place Austrian brokers ahead of the pack in future.

Area management increases impact in ExclusiveSales

ExclusiveSales, which is responsible for over 10,000 brokers, has acquired an impressive structure with area management to support the service and to control the seventeen regions of the Group. In coordination with the regional Management Boards, the area managers define the strategy for the current eight international Group companies and nine regions of Austria, and are responsible for the annual result.

They pay particular attention to the exchange of best-practice strategies between the regions. They develop joint measures to safeguard and expand the customer base, draw up annual sales and staff plans, as well as action plans. They define business, provisioning and salary models and develop and control quality standards.

At the beginning of 2007, the responsibilities of area management were reallocated amongst a new total of four area managers. This reallocation should increase the impact of ExclusiveSales and, at the same time, underscore its considerable significance for the yield-orientated internationalisation strategy of the Group.

ProfitCentre instead of regional management

A ProfitCentre model has also been recently implemented. Its task is to secure our top position on the Austrian market by strengthening regional autonomy, further expanding the external sales organisation and giving new impulses to the growth area of personal injury insurance.

In addition, it deals with the direct and indirect control of productivity and quality, the ongoing decentralisation of sales-related decisions and the relocation of customer service functions locally. Finally, the ProfitCentre is intended to reduce the processing stages of standardised business cases, to optimise staff functions and to create clear communication channels between central ExclusiveSales, regional sales management and regional administration. The simultaneous expansion of independent agency partners secures long-term stability in coordination with the ProfitCentre structure.

Raiffeisen Versicherung expands Management Board

The Group's own Raiffeisen Versicherung strengthened its upper echelon in 2006: It made former manager of Raiffeisen Bausparkasse, Martin Sardelic, the third member of the Management Board of Austria's leading bank insurer on 1 October 2006.

The Raiffeisen manager should secure the high significance of pension provision as a key element of the product range, and above all more strongly thematise the covering of risks in daily life, such as occupational disability, accidents during leisure time or the loss of household goods and valuables. And he should further improve the high quality of service provided by Raiffeisen Versicherung to the sales partners.

The cooperation of our Raiffeisen Versicherung with the Raiffeisen banks in Austria has developed into an ongoing success story. Important chapters of this story have been written by Chairman of the Board, Dr Christian Sedlnitzky. In 2006, he looked back at the twentieth anniversary of extremely successful work for Raiffeisen Versicherung.

Bank advisors as qualified insurance partners

Half of all life insurance in Austria is taken out through a bank advisor. Motivated and committed Raiffeisen bankers are more than an interface; they are the fixed link to the customer and therefore qualified partners of a sales channel that is strategically important to the UNIQA Group.

Bank assurance is a decisive driver of growth, especially for expansion on international markets. Transferring the success of bank sales in Austria to the emerging markets in Eastern Europe remains the greatest challenge for Raiffeisen Versicherung as a competence centre for bank sales within the Group.

In eleven countries in Eastern and South-Eastern Europe, UNIQA has already gained access to more than 10 million customers through the cooperation with the Raiffeisen Bank group. These customers are offered our Group's insurance and pension products over the bank counter.

Special training for Raiffeisen bank advisors

The success of bank sales is based mostly on the quality of the special training courses based by Raiffeisen Versicherung on the characteristics and requirements of the respective bank staff. Bank advisors have to pass a comprehensive basic training course on insurance matters. To prepare for the compact introduction, socalled "eLearning courses", which teach basic sector knowledge, have recently be added.

10th international pensions symposium in London with www.womanlife.at high-level EU representation.

Around 680 participant days are currently covered by the training and development seminars in the professional and behavioural area. More than 1,180 days are allocated to teaching bank staff the basic insurance training, which will become increasingly important in the future.

Pensions symposium in London

For the property insurance business, comprehensive old-age pensions remain the focus of activities of Raiffeisen Versicherung, even after the successful opening up of the insurance business. Therefore, the company extended an invitation to the 10th international pensions symposium in London in May 2006, attended by highlevel experts.

Given all the differences in the pension systems of the European Union, the experts are decidedly of the opinion that the pension systems must be thoroughly modernised and adjusted to shifts in demographics.

Raiffeisen Versicherung is sharpening awareness of security in everyday life and loss prevention with a national campaign run in newspaper advertisements, radio spots, display window posters and campaign folders. It documents its competence by offering tailored products such as insurance for owned homes or rented accommodation, as well as accident and motor vehicle insurance solutions to counter the financial risks of life.

Successful women's programme: "Womanlife"

The product and advice programme "Womanlife", created by Raiffeisen Versicherung for women, has exceeded all expectations. Under this special programme, women also receive additional benefits in accident insurance: By being placed in a cheaper risk class, premiums for women young and old fall by up to 40%.

The "Circle Womanlife" initiative launched for the exchange of information amongst female Raiffeisen bankers has developed with great promise. The first national meet took place in the Wachau in October. The number of Raiffeisen bankers belonging to the circle has already passed the 1,000 mark. The Internet platform, with tips and suggestions on special WomanLife events, arguments for consultancy and expert tips, is also well used.

Highlights

For three years, the international mobility programme "Go Ahead" has been an essential part of the training and development programme at the UNIQA Group.

With the TopPartner strategy in BrokerService and the new area management in ExclusiveSales, we set new standards in these sales channels in 2006.

Raiffeisen Versicherung's 10th international pensions symposium was held in London in 2006.

UNIQA Shares

Ongoing upwards trend on the stock markets

The upwards trend on the international stock markets continued in 2006, despite increasing volatility. Stock prices rose worldwide by an average of 13.8%. Once again, the stock markets in Europe developed better than those in North America. Amongst the emerging markets, the stock exchanges stood out in China (+130.4%), India (+46.7%) and Argentina (+35.5%).

On Wall Street, the DOW JONES INDUSTRIAL AVERAGE of the 30 largest industrial companies hit a new all-time high of 12,529.88 points. After a consolidation stage at mid-year, prices started to rise again and the DOW JONES closed at the end of 2006 with a gain of 16.3%. The S&P 500, which has a broader range of companies, was up 13.6% in 2006.

Europe beat the US again

In Europe, the DJ EURO STOXX 50 set the benchmark at the end of 2006, with earnings up 15.1% compared to the end of the previous year. The branch index, DJ EURO STOXX Insurance, consisting of eighteen European insurance companies, increased by 16.3%. The top performers in Europe were the stock exchanges in Oslo (+ 33.5%), Madrid (+31.8%), Frankfurt (+ 22.0%) and Vienna (+ 21.7%). The performance on the exchanges in Paris and Milan (+17.5%), Zurich (+15.8%) and London (+10.7%) were slightly weaker in 2006.

The Vienna Stock Exchange has been on a successful path since 2000, and remained that way in 2006. With 4,463.47 points, the ATX closed off the year just below its all-time high of 4,474.80 points. Thus, for the sixth year in a row, the leading index ATX finished trading with a healthy gain. The 21.7% increase in price compared to the pluses of 50.8% (2005) and 57.4% (2004) was still not bad despite the flattening in a European comparison.

Vienna once again one of the most successful exchanges in the world

At the end of January, the ATX broke through the 4,000 point mark already and in May it hit a new high with slightly over 4,300 points. It then completely relinquished these price gains, as a result of raging inflation fears and profit-taking, falling to almost 3,300 points. Not until November did a lastingly strong rise in prices set in, which went on to lead the ATX to new record highs by the end of the year.

Vienna proved, once again, to be one of the most successful stock exchanges in the world, overshadowing international financial centres like New York, London and Tokyo. The companies listed on the ATX owe a substantial part of this new success to their high commitment level in the new EU member countries and the emerging markets in Eastern and South-Eastern Europe. As the hub of the East-West integration, they profited more than usual from the economic dynamics of this region, which is developing into Europe's growth driver.

Record influx of fresh capital

The Vienna Stock Exchange also struck an extremely positive balance in 2006, with a record influx of fresh capital. Through IPOs and capital increases € 11.9 billion were raised, almost double the amount of 2005. With an increase of about 36%, market capitalisation reached a record high of € 146 billion. And this

Share key figures 2006 2005 2004
Stock market price of UNIQA shares as at 31 Dec. 25.09 23.40 10.60
High 29.86 23.65 11.00
Low 22.35 10.60 7.85
Ø Trading volume/day (in million €) 4.7 3.1 0.2
Market capitalisation as at 31 Dec. (in million €) 3,005.2 2,802.8 1,269.6
Earnings per share 1.29 0.94 0.74
Pre-tax earnings per share 1.80 1.44 0.92
Dividend per share 0.35 0.26 0.22

Development of UNIQA shares

in %

Information on UNIQA shares

300
Securities abbreviation
UQA
Reuters UNIQ.VI
Bloomberg UQA.AV
ISIN AT0000821103
250
Market segment
Prime Market – Vienna Stock Exchange
Trade segment Official trading
Indices ATX, ATXPrime, WBI, VÖNIX
200
No. shares
119,777,808

despite a rise in the monthly trading volume to an average of more than € 10.6 billion, an increase of almost 75%. 150

The strategy for winning foreign investors and trading members played an essential role in this success story. In 2006 alone, six international members joined the Vienna Stock Exchange for direct trading. In the meantime, about 56% or more than half of turnover is already with foreign traders. 50 100

This year the Vienna Stock Exchange plans to continue its road shows to international financial centres and meetings with institutional investors, in order to maintain the successes that have already been achieved. The goal is to consolidate average monthly volume as well as the annual influx of fresh capital on a level of between € 11 and € 12 billion. 250 300

Consolidation phase of UNIQA shares 200

With a price explosion and a gain of 120.8%, UNIQA shares were the top performers on the Vienna Stock Exchange in 2005. This past year ushered in a phase of consolidation. Following a very promising start and an all-time high of € 29.86 on 11 May 2006, the shares could not withstand the period of general weakness that then developed and recorded a correction – hitting an annual low of € 22.35 in mid-June. 100 150

The powerful recovery that later set in did not, however, persist until the end of the year. At € 25.09 apiece, UNIQA shares thus closed on the market at the end of the 2006 year with a gain of 7.2% in comparison with the year before. This brought the company's capitalisation up further, to about € 3 billion.

Analysts discover UNIQA

In addition to the numerous visits we paid to investors and analysts in Vienna, in 2006 we participated in a great number of Austrian and international road shows and investor conferences. As a result of this ongoing communication with the capital market, numerous investment banks and analysts took up the coverage of the UNIQA Group and evaluated us on a regular basis.

A current overview of the recommendations can be found in English on the Internet at www.uniqagroup.com ‡ Investor Relations ‡ UNIQA Shares ‡ Research Coverage. Researchers from the following companies have written reports about the UNIQA Group:

  • Raiffeisen Centrobank
  • UBS
  • Erste Bank
  • JPMorgan
  • CA IB

Shareholder structure of UNIQA Versicherungen AG in %

  • 35.24 Austria Versicherungs verein Beteiligungs- Verwaltungs GmbH
  • 31.95 BL Syndikat Beteiligungs Gesellschaft m.b.H.
  • 17.10 Free float
  • 6.97 UQ Beteiligung GmbH 5.22 NÖ Landes-Beteiligungs-
  • holding GmbH
  • 3.23 Collegialität Versicherung auf Gegenseitigkeit
  • 0.29 Own shares

Shareholder structure by country in %

Shareholder structure by investor type in %

Shareholder structure unchanged

The structure of our core shareholders remained basically unchanged compared to 2005. Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH owns 35.24%, BL Syndikat Beteiligungs GmbH 31.95%, UQ Beteiligung GmbH 6.97%, NÖ Landes-Beteiligungsholding GmbH 5.22% and Collegialität Versicherung auf Gegenseitigkeit 3.23% of the share capital of the Group's parent company UNIQA Versicherungen AG. Due to their voting commitment, the shares of Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH, BL Syndikat Beteiligungs GmbH and Collegialität Versicherung auf Gegenseitigkeit are counted together.

The portfolio of own shares amounted to 0.29% at the end of 2006. The free float thus continues to be just over 17%. Of the total share capital, 95% is held in Austria and 5% in other countries of Europe and North America.

Continued inclusion in the sustainability index VÖNIX

Even after the new configuration of the sustainability index, VÖNIX, we are amongst the now 27 listed names that are leaders regarding their social and ecological achievements. This means that we may display the VÖNIX membership label for another year.

The development of VÖNIX has shown that corporate citizenship and corporate social responsibility also pay off for investors, as an element of modern corporate management. In the first index year 2005/2006, which ended on 16 June 2006, the VÖNIX achieved a performance of 17.85% and clearly beat the benchmark of the ATXPrime of the Vienna Stock Market by about 3.5 percentage points.

ar2006.uniqagroup.com

Our Group Report is published in German and English and is also available in an interactive online version.

Optimum shareholder information

Our modern Investor Relations instruments have also enabled us to provide the financial community and the shareholders with comprehensive and up-to-date information in 2006. We continue to make our annual and quarterly reports as well as ad-hoc releases available not only on our website www.uniqagroup.com but also in written form, if desired. For investors, analysts and institutional investors around the world this information can also be obtained from our Investor Relations Department in English.

Financial Calendar 2007

21 May 2007 Annual General Meeting

31 May 2007 1st Quarterly Report 2007

4 June 2007 Ex Dividend Day Dividend Payment Day

31 August 2007 2nd Quarterly Report 2007

28 November 2007 3rd Quarterly Report 2007

Corporate Governance Report

UNIQA Versicherungen AG has committed itself since 2004, to compliance with the Austrian Code of Corporate Governance and publishes this voluntary declaration of commitment both in the Group annual report and on the Group website www.uniqagroup.com ‡ Investor Relations ‡ Corporate Governance. Implementation and compliance with the individual rules of the codex are regularly evaluated by an external institution. Using a questionnaire, they evaluate whether companies comply with the Austrian code of corporate governance, as published by the Austrian "Working Group on Corporate Governance". Their reports about this voluntary evaluation can also be read on the UNIQA Group website.

UNIQA declares its continuing willingness to comply with the Austrian Code of Corporate Governance. In accordance with the law, the L-rules ("legal requirements") are all adhered to. UNIQA deviates from the provisions of the code in the 2006 version regarding the following C-rules ("comply or explain") and explains as follows:

Rule 38

It is not considered appropriate to specify a certain age limit in the articles for members of the Management Board. The appointment to the board of management depends exclusively on professional and personal qualifications.

Rule 41 and 43

The responsibilities of the nomination committee and the compensation committee are carried out by the Committee for Board Affairs.

Rule 45

Markus Mair is, in addition to his function as a member of the Supervisory Board of UNIQA Versicherungen AG, also on the Supervisory Board of Grazer Wechselseitige Versicherung AG and GRAWE-Vermögensverwaltung.

Rule 49

Due to the growth of UNIQA's shareholder structure and the special nature of the insurance business, with regard to the inwith companies associated with individual members of the Supervisory Board. As long as such contracts require approval by the Supervisory Board according to Section 95 paragraph 5 sub-para 12 of the Austrian Stock Corporation Act (rule 48), the details of these contracts cannot be made public for reasons of tions are handled under customary market conditions.

Rule 52

The Supervisory Board of UNIQA Versicherungen AG currently consists of twelve members. This higher number results from the shareholder structure of the company.

A detailed report on the remuneration of the Management Board and the Supervisory Board (rules 29, 30 and 51) can be found in the notes to the Group financial statements on p. 136 ff.

A detailed list of the members that make up the Supervisory Board of UNIQA Versicherungen AG and the committees that have been set up, the independence of the individual members, the length of time they have been serving and any comparable positions held at other listed stock corporations in Austria and abroad (rules 39, 53 and 58) can be found in the notes to the Group financial statements on p. 84 f. The criteria for the independence of the Supervisory Board and committee members, as well as the areas they are responsible for in the individual committees, can be downloaded from the Group website.

A comprehensive risk report (rule 67) is included in the Group notes on p. 86 ff. A description of the announcements made about the director's dealings (rule 70) can be downloaded from the Group website.

Group Management Report

Economic environment

The economic environment for our business activities was favourable owing to continued strong global economic growth in 2006. In addition to East Asia and the USA, the Euro zone developed a special dynamic following the cautious growth of the previous year.

Growth in the Euro zone nearly doubled

Above all, as a result of continuing intensification of investment activity and the lively increase in exports, gross domestic product of the twelve European countries belonging to the monetary union grew by more than 2.5% – nearly twice the rate of 2005. The Central and Eastern European EU accession countries were, once again, one of the international centres of growth. They improved their real production performance by around 5.5%.

Inflation continued to remain above 2%, in particular, as a result of the increased price of crude oil. The European Central Bank, therefore, continued the restrictive course it set at the end of 2005, because of the sustained risk to stability and increased the key interest rate in five steps to 3.5%.

Strong recovery in Austria

Austria profited particularly well from the economic recovery in the Euro zone. Real gross domestic product grew by around 3.2% – stronger than ever since 2000. Despite timid domestic demand, real exports expanded by nearly 9% as a result of strong foreign demand – above all, from Eastern Europe. Unemployment continued to decrease with the increase in employment. With an inflation rate of around 1.5%, Austria was one of the most price stable countries in the Euro zone in 2006.

Insurance industry feeling the slowdown of business

After 2005, which boomed with a premium growth of 9.5% as a result of the explosive increase in single premium policies, the expansion of the Austrian insurance industry slowed noticeably. Total premium revenues increased in the past year around 1.9% to € 15.6 billion. Without taking the single premiums into account, the solid upward trend of the insurance industry continued – if somewhat flatter – with an increase in premiums of 4.2% in 2006. Not lastly, as a result of the significant amount of unsatisfied demand for private old age pension insurance compared to Western Europe, the insurance industry will continue to be a growth driver of the Austrian economy.

Decrease in single-premium life insurance policies

Personal injury insurance exhibited the most significant slowdown in 2006. This was, above all, attributable to the decrease in single-premium policies: Their revenues decreased by 12.2% compared to 2005. In contrast, life insurance policies with recurring premiums continued their upward trend with an increase of 6.4%.

In total, life insurance policies lost significant momentum in the past year with an increase in premiums of just over 1% compared to 2005 (+15.6%). Health insurance policies, whose premium revenues increased by only 2.8%, also suffered a slight setback. The casualty line continued its growth trend of over 4%.

Timid property insurance performance

The property insurance line was more subdued in 2006. Total premiums increased by 2.8%, which was less than in 2005 (+4.8%). As a result of strong competition, automobile liability insurance reduced its growth rate to 0.8%. Premium revenues for general liability insurance, household insurance and industrial fire insurance also lost some of their dynamics.

Financial markets under the sign of increasing interest rates

International financial markets stood under the sign of increasing interest rates in 2006. The US Federal Reserve Board increased the key interest rate in four steps to 5.25%. The Japanese Central Bank increased the key lending rate for the first time in six years from zero to 0.25%. The European Central Bank increased the refinancing costs of banks to 3.5%.

And during the course of the year, money market interest rates also increased significantly along with the key interest rates. At first, long-term government bond yields increased sharply in both the US and the Euro zone until the middle of 2006, then retreated slightly. The flattening of the yield curve, which was already observable in 2005, continued in 2006. In total, longterm interest rates continued to remain at a historically low level. Despite the round of international key rate increases by the central banks, the economy remained quite liquid. The tight monetary policy has not yet dampened the business activity. As a result of the decreased interest rate discrepancy between the USA and the Euro zone and the interest rate advantage compared to Japan, the external value of the Euro increased significantly compared to the US dollar and yen.

Stock markets soaring despite volatility

The international stock markets were, of course, affected by losses following the peak in May. However, they continued to soar by the end of the year as a result of the recovery following the increased volatility. In particular, the DOW JONES INDUSTRIAL AVERAGE reached a new all time high and closed on the last trading day of 2006 with a profit of 16.3%. The S&P 500 increased by 13.6%, and the NASDAQ COMPOSITE by 9.5%.

Many European stock markets performed even better. Whereas the DJ EURO STOXX 50 increased by 15.1%, the DAX in Frankfurt increased by 22.0%, the ATX in Vienna by 21.7%, and the CAC 40 in Paris by 17.5%. The index of Central and Eastern European stock markets (CECE) recorded a performance of 14.7% in 2006.

Economic climate cooling somewhat in 2007

The global economy will cool slightly in the current year, but will continue to expand at only slightly reduced speed. The continued expansion in Europe and the newly emerging Asian nations continues to compensate the increasing weakness of growth in the USA which set in following the overheated development in the real estate market.

Initially, the dynamics will also decrease slightly in the Euro zone. However, the economy will remain robust in 2007. The economic region, which expanded to thirteen members after the admittance of Slovenia to the monetary union, should grow by more than 2% with a slight increase in the rate of inflation. Despite increasing tension between monetary and fiscal policy, the Eastern European EU accession countries will be able to maintain their above-average rate of growth. In 2007, wages in the Euro zone have been rising more strongly than in the previous year, increasing disposable income. Private consumption should thus become somewhat livelier than in 2006.

Slight weakening also in Austria

The somewhat slower rate of growth in the Euro zone also carried over to Austria. Despite a slight clouding of economic prospects, real production performance should increase by more than 2.6%, and thus continue to be above the Euro zone average. Economic drivers continue to be increasing exports and unchanged strong growth of financial investments. Private consumption should increase by around 2% as a result of moderate wage increases and unchanged low inflation.

Insurance industry overcomes weak phase

In 2007, the Austrian insurance industry should overcome the short period of weakness which began with the decline in single-premium policies in the previous year, and should expand stronger than the overall economy with a premium plus of more than 4%. Personal injury insurance will drive growth forward with an increase of around 4.8%.

Above all, in life insurance, which is profiting from the increasing need for private old age pension insurance, growth of more than 5% is forecast as a result of the continued dynamic of recurring premiums (+5.8%) and single-premium policies which are once again higher (+3.9%). The health and casualty insurance lines should continue their upward trend in 2007, at a nearly unchanged rate.

The property insurance business will be characterised in 2007 by continued strong pressure from competition in the industrial business area. Thus, growth prospects in the industrial insurance lines should cloud over somewhat in the coming year. Premium growth in the automobile insurance line is stabilising. In total, an increase in premium income of around 2.9% for 2007 is expected for the property insurance line.

Cautious optimism on the stock markets

Cautious optimism dominated the international stock markets in the first weeks of the new year. As a result of the slight clouding of economic prospects and the insecurity surrounding the further plans of the Federal Reserve in the USA and the central banks in Europe, subdued performance is expected in the first half of the year. At the same time, volatility will increase significantly. As a result of the overall improved future economic prospects for 2007, stock markets in the Euro zone should once again perform better than those in the USA.

The UNIQA Group

With € 4,532.1 million premiums written, UNIQA is one of the leading insurance groups in Central and Eastern Europe. The savings portion of premiums from unit- and index-linked life insurance amounting to € 559.3 million is, in accordance with FAS 97 (US-GAAP), balanced out by the changes in the actuarial provision. Premium volume including the savings portion of premiums from unit- and index-linked life insurance amounts to € 5,091.4 million.

The UNIQA Group offers its products and services through all distribution channels (salaried sales force, general agencies, brokers, banks and direct sales). UNIQA is active in all insurance sectors; market leader in Austria for personal injury insurance and one of the largest property insurers in the country.

UNIQA in Europe

The UNIQA Group operates its direct insurance business in Austria through UNIQA Personenversicherung AG, UNIQA Sachversicherung AG, Raiffeisen Versicherung AG, FinanceLife Lebensversicherung AG, Salzburger Landes-Versicherung AG, and CALL DIRECT Versicherung AG.

The listed Group holding company, UNIQA Versicherungen AG, is responsible for Group management and is the central reinsurer for the Group's Austrian operational companies. UNIQA Re AG has its headquarters in Zurich and is responsible for reinsuring the Group's international operational companies.

A continuous and sustainable growth in our strategic target markets is one of the UNIQA Group's key objectives. The UNIQA Group's international activities are managed centrally through the competence centre and specialist departments, in order to achieve the maximum synergy effects. On the other hand, UNIQA International Versicherungs-Holding GmbH is responsible, in addition to the ongoing observation and analysis of the international target markets, for acquisitions and their integration into the Group.

Successful market entry in Ukraine and Serbia

In May of 2006, UNIQA acquired a 35% stake in Credo-Classic, the seventh-largest insurance company in the Ukraine, based in Kiev. At the same time, an agreement was reached to gradually increase the commitment to 76% by 2009. In October of 2006, UNIQA and Credo-Classic both invested equal capital shares to form UNIQA LIFE in Kiev, to take up the sale of life insurance policies.

At the beginning of November 2006, the UNIQA Group took over 80% of the share capital of Zepter Osiguranje in Belgrade. At the same time, the general conditions for the acquisition of the remaining shares were specified. At the beginning of 2007, the company was renamed to UNIQA a.d.o. Serbia's sixth-largest insurer is headquartered in Belgrade and is one of the largest life insurance companies in the country.

The preferred partnership cooperation with the Raiffeisen bank group has already been expanded to include the Ukraine (Raiffeisen Bank Aval) and Serbia (Raiffeisen banka).

With these companies the UNIQA Group has expanded its presence in Eastern and South-Eastern Europe and is now already represented in a total of sixteen European countries. UNIQA currently holds either direct or indirect shares of the following 27 international insurance companies:

Central Eastern Europe (CEE)

  • UNIQA TU S.A., Lodz
  • UNIQA TU na ˚ Zycie S.A., Lodz
  • TU FILAR S.A., Stettin
  • UNIQA pojišt'ovna a.s., Prague
  • UNIQA poistovˇna a.s., Bratislava
  • UNIQA Biztosító Zrt., Budapest
  • UNIQA osiguranje d.d., Zagreb
  • UNIQA Osiguranje d.d., Sarajevo

New Eastern Emerging Markets (NEEM)

  • Credo-Classic, Kiev
  • UNIQA LIFE, Kiev
  • ASTRA S.A., Bucharest
  • UNIQA Insurance plc (previously Vitosha AD), Sofia
  • UNIQA Life Insurance plc (previously Vitosha Life AD), Sofia
  • UNIQA a.d.o. (previously Zepter osiguranje A.D.), Belgrade
  • Zepter Osiguranje A.D., Podgorica

Western European Markets (WEM)

  • Mannheimer AG Holding, Mannheim
  • Mannheimer Versicherung AG, Mannheim
  • Mannheimer Krankenversicherung AG, Mannheim
  • mamax Lebensversicherung AG, Mannheim
  • Mannheimer Versicherung AG, Zurich
  • UNIQA Assurances S.A., Geneva
  • UNIQA Re AG, Zurich
  • UNIQA Versicherung AG, Vaduz
  • UNIQA Lebensversicherung AG, Vaduz
  • UNIQA Assicurazioni S.p.A., Milan
  • UNIQA Previdenza S.p.A. (previously Claris Vita S.p.A.), Milan
  • CARNICA Assicurazioni S.p.A., Udine

Companies included in the IFRS consolidated financial statements

The 2006 consolidated financial statements of the UNIQA Group include – along with UNIQA Versicherungen AG – 30 domestic and 52 foreign companies. 43 affiliated companies, whose influence on an accurate presentation of the actual financial status of the assets, financial position and profitability is insignificant, were not included in the consolidated financial statements. In addition, we included fourteen domestic and two foreign companies as associates according to the equity accounting method. Eight associates were of minor importance and their shares are recognised at market value.

The scope of consolidation of the UNIQA Group expanded in the first quarter of 2006, with the Bulgarian companies UNIQA Insurance plc and UNIQA Life Insurance plc, which were fully consolidated for the first time. The Ukrainian Insurance company Credo-Classic has been listed as an associate since the second quarter of 2006. The newly founded UNIQA LIFE in Ukraine has been amongst the fully consolidated companies since the third quarter of 2006. UNIQA a.d.o in Serbia was first consolidated in the fourth quarter of 2006.

Group business development

Business activity

The UNIQA Group provides life and health insurance, and is active in almost all lines of property and casualty insurance. The Group holding company, UNIQA Versicherungen AG, conducts the indirect business for the Group. In addition, it carries out numerous service functions for the Austrian and international insurance subsidiaries, in order to take best advantage of synergy effects within all the Group companies, and to consistently implement the Group's long-term corporate strategy.

With over 12.5 million insurance policies being managed at home and abroad, a gross premium volume written of € 5.1 billion (2005: € 4.7 billion) and capital investment of more than € 21 billion (2005: € 19.4 billion), the UNIQA Group is one of the leading insurance groups in Central and Eastern Europe.

In 2006, 42.5% of premium volume came from life insurance (2005: 41.3%), 17.5% from health insurance (2005: 17.9%) and 40.0% from property and casualty insurance (2005: 40.9%).

Group pre-tax results reached e 238.5 million

In the 2006 financial year, the UNIQA Group was able to further improve its profits and earned a profit that was 25.3% higher than the profit on ordinary activities, which amounted to € 238.5 million (2005: € 190.3 million). Sales profitability could be increased in 2006 to 5.8% (2005: 4.8%).

Details on the consolidated and associated companies can be found in the corresponding overview in the Group notes (cf. Group companies). The accounting and valuation methods used as well as the changes in the scope of consolidation are also explained in the Group notes.

Risk report

The comprehensive risk report of the UNIQA Group is in the notes to the consolidated financial statement 2006 (cf. notes, p. 86 ff).

UNIQA Group business development

The following comments to the business development are divided into two sections. The section "Group business development" describes the business performance from the perspective of the Group with fully consolidated amounts. The business trends in life, health and property and casualty insurance are discussed in the segment reports. For the first time, the 2006 Group management report is also geared to the fully consolidated amounts. The figures for the previous year have been adjusted accordingly.

Profit on ordinary activities Net profit

UNIQA is pursuing a consistent dividend policy that provides for a pay-out ratio of about 30% of the Group results. Therefore, the Management Board intends to propose a dividend payment of 35 cents per share to the Supervisory Board and the general assembly – an increase of 35% compared to the previous year. 323.6 415.2

Premium volume written

incl. the savings portion of premiums from unit- and index-linked life insurance

in € million

Premium volume climbed to over e 5 billion in 2006

The UNIQA Group's consolidated premiums written rose in 2006, by 3.7% to € 4,532.1 million (2005: € 4,370.2 million). If one also considers the savings portion of premiums from unitand index-linked life insurance in the amount of € 559.3 million (2005: € 360.2 million), the total premium volume grew by 7.6% to € 5,091.4 million (2005: € 4,730.4 million). The retained Group premiums earned grew by 3.2% to € 4,129.7 million (2005: € 4,000.4 million).

In Austria, premium volume written incl. the savings portion of premiums from unit- and index-linked life insurance increased in 2006, by 1.0% to € 3,420.5 million (2005: € 3,385.6 million). The reasons for this moderate growth were the high expirations in the area of bank sales and the reduction in singlepremium business in life insurance. Furthermore, the loss of recurring premiums from policies with abbreviated premium payment periods put a burden on the development of premiums. Premiums earned in Austria in 2006 amounted to € 2,916.3 million (2005: € 2,917.0 million).

In the growth regions of Eastern and South-Eastern Europe (CEE & NEEM) the premiums developed noticeably faster in 2006. Premium volume written including the savings portion of premiums from unit- and index-linked life insurance increased in 2006, by 32.7% to € 639.8 million (2005: € 482.2 million). This put the share of Group premiums coming from CEE & NEEM at 12.6% (2005: 10.2%). The premiums earned rose by 20.2% to € 523.5 million (2005: € 435.4 million).

In the Western European Markets (WEM) the premium volume written also rose by 19.5% to € 1,031.1 million (2005: € 862.6 million). This corresponded to a share in the Group premiums of 20.3% (2005: 18.2%). Earned premium income in the companies in Germany, Switzerland, Liechtenstein and Italy increased by 6.5% to € 689.8 million (2005: € 648.0 million).

Development of insurance benefits

The consolidated retained insurance benefits decreased in the 2006 financial year, despite the rise in premiums by a total of 1.6% to € 3,715.6 million (2005: € 3,776.9 million).

In Austria, UNIQA was even able to decrease insurance benefits by an impressive 5.2% to € 2,807.4 million (2005: € 2,960.3 million). In the CEE & NEEM regions, because there was a rise in premium volume, the insurance benefits were also higher. They increased by 16.5% to € 325.6 million (2005: € 279.5 million). In Western Europe insurance benefits grew by 8.5% to € 582.7 million (2005: € 537.1 million).

Development of operating expenses

Total consolidated operating expenses (cf. Group notes, no. 36) less reinsurance commissions and profit shares from reinsurance business ceded (cf. Group notes, no. 32) increased only slightly in the 2006 financial year, despite the increase in the number of companies to be consolidated and the rise in premiums, by 4.2% to € 966.9 million (2005: € 927.7 million). Acquisition expenses incl. the change in the deferred acquisition costs and less the reinsurance commissions received rose by 8.4% to € 627.6 million (2005: € 579.1). Other operating expenses decreased in comparison to the previous year due to successful cost reduction measures as part of the 2004–2006 profit improvement plan by 2.7%, from € 348.7 million to € 339.4 million.

The cost ratio of the UNIQA Group, i.e. the relation of total operating expenses to the Group premiums earned, including the savings portion of premiums from unit- and index-linked life insurance, decreased in 2006 to 20.9% (2004: 21.5%). The administrative cost ratio sank even more, coming to 7.3% at the end of the year (2005 8.1%).

2004 2005 2006

Total investments

Investment portfolio exceeded e 21 billion

Total investments incl. land and buildings used by the Group, real estate held as investments, shares in associates and investments in unit-linked and index-linked life insurance increased in the reporting year by € 1,787.8 million or 9.2% to € 21,155.2 million (2005: € 19,367.3 million).

Net investment income less financing costs sank by 10.2% to € 865.0 million (2005: € 962.9 million). In 2005, UNIQA recorded an unusually high level of realised capital gains that was used to compensate the additional provisions needed for retirement annuities due to the adjustment of the Austrian mortality tables. In 2006, the performance of the stock markets was slightly weaker compared to the years before and this, together with the rising interest-rate environment, were additional reasons why the investment results were lower. Nevertheless, a solid profit could be made over the past year due to the broad distribution of asset investments and the use of alternative investment instruments.

A detailed description of the investment income can be found in the notes to the financial statements. (cf. note no. 33).

Own funds and total assets

The UNIQA Group's total equity increased in 2006, by € 196.1 million to € 1,329.8 million (2005: € 1.133.7 million). This included minority interests amounting to € 207.3 million (2005: € 203.2 million). The pre-tax return on equity – the ratio of profit on ordinary activities to average total equity (without taking into consideration the included net profit for 2006) amounted to 20.8% in the past financial year ( 2005: 19.7%).

In light of the obvious growth of the Group, UNIQA Versicherungen AG issued subordinated debt amounting to € 250 million to further strengthen own funds, that was placed in December 2006 and early 2007 in two tranches.

The total assets of the Group increased in the past financial year, by 8.9% and totalled € 24,587.1 million (2005: € 22,568.4 million) on 31 December 2006.

Cash flow

The cash flow from operating activities increased by 136.0% to € 1,237.0 million (2005: € 524.1 million) in 2006. Cash flow from investing activities of the UNIQA Group amounted to € –1,280.4 million (2005: € –799.7 million). There was an outflow of cash due to the acquisition of companies of € –159.8 million (2005: –69.5 million). The financing cash flow remained stable due to the issuance of subordinate capital, and came to € 100.7 million (2005: € 104.4 million). A total of € 31.1 million were spent on the dividends from the 2005 financial year. The amount of liquid funds changed in total by € 71.1 million (2005: € –163.3 million). At the end of 2006, funds amounting to € 263.2 million (2005: € 192.0 million) were available.

Staff

The average number of employees in the UNIQA Group increased in the 2006 financial year to 10,748 (2005: 9,943 employees). Of these, 3,957 (2005: 3,469) were in sales (employed sales force) and 6,791 (2005: 6,474) were in administration. In the New Eastern Emerging Markets (NEEM) UNIQA employed a staff of 547 in 2006 (2005: 0), 2,930 people (2005: 2,800) in Central Eastern Europe (CEE) and 989 (2005: 968) in the Western European Markets (WEM). In Austria, 6,282 people were employed (2005: 6,175). This corresponded to a share 58.4%

Half of the staff employed in administration in Austria in the past year were women, 17.6% of the employees were working part time. The average age in 2006 was 43 years. In total, 11.1% of the employees participated in UNIQA's result-oriented remuneration system – a variable payment system that is tied both to the success of the company and to personal performance. In addition, the new UNIQA apprentice exchange programme offers young people in training the opportunity to get to know foreign cultures and make international contacts.

The productivity of UNIQA's employees continued to rise in the past financial year as well – the income before taxes per employee in 2006 came to € 22,190 (2005: € 19,139).

Business segments

Life insurance

Premiums rose by more than 10%

Premium volume written in life insurance incl. the savings portion of premiums from unit- and index-linked life insurance increased in the past year by 10.9% to € 2,164.5 million (2005: € 1,951.4 million).

In Austria, premium volume sank 1.3% to € 1,478.9 million (2005: € 1,498.4 million) due to higher expirations in the area of bank sales and the deliberate withdrawal of single-premium business. On the other hand, revenues from policies with recurring premium payments rose by 4.1% to € 1,287.5 million (2005: € 1,236.4 million). Although the development of premiums was influenced by the loss of recurring premiums from policies with abbreviated premium payment periods, there was the same amount of new business in the past financial year as in the year before. The international Group companies were able to clearly increase the premiums from life insurance. In the CEE and NEEM regions premium volume written rose, incl. the savings

portion of premiums from unit- and index-linked life insurance, by 77.1% to € 210.1 million (2005: € 118.6 million). The share of life insurance from these countries thus already amounted to € 9.7% in 2006 (2005: 6.1%). In the Western European Markets (WEM) premium volume increased thanks to the booming Italian business by 42.2% to € 475.5 million (2005: € 334.4 million) – that was a 22.0% (2005: 17.1%) share of the Group's total life insurance premiums.

The risk premium portion of unit- and index-linked life insurance included in the consolidated financial statements totalled € 67.3 million in 2006 (2005: € 55.2 million). The savings portion of premiums from unit- and index-linked life insurance amounted to € 559.3 million (2005: € 360.2 million) and was, in accordance with FAS 97 (US-GAAP), balanced out by the changes in the actuarial provision.

The earned premium income from the life insurance sector of the UNIQA Group increased by 0.3% in 2006 to € 1,527.4 million (2005: € 1,523.3 million).

Life insurance segment 2006 2005 2004
€ million € million € million
Premiums written 1,605.2 1,591.2 1,199.3
Savings portion of premiums from unit- and index-linked life insurance 559.3 360.2 178.2
Share CEE & NEEM 9.7% 6.1% 5.2%
Share WEM 22.0% 17.1% 2.1%
Premiums earned 1,527.4 1,523.3 1,166.1
Net investment income 610.3 731.3 580.1
Insurance benefits 1,779.8 1,897.7 1,450.6
Acquisition expenses less reinsurance commissions 188.5 157.0 148.1
Other operating expenses 72.9 87.1 82.5
Cost ratio (after reinsurance) 12.9% 13.3% 17.8%
Administrative cost ratio 3.6% 4.7% 6.4%
Profit on ordinary activities 56.0 68.8 38.6
Net profit 36.7 44.5 29.0

Development of insurance benefits

The retained insurance benefits (expenditure for claims incurred, expenditure for increased actuarial provision as well as provisions for premium refunds and profit sharing) decreased by 6.2% to € 1,779.8 million (2005: € 1,897.7 million).

In Austria, insurance benefits even decreased by 9.5% to € 1,448.2 million (2005: € 1,599.6 million). In 2005, one-time additional provisions were made for retirement annuities due to the adjustment of the Austrian mortality tables. In CEE & NEEM insurance benefits rose in life insurance by 13.6% to € 87.4 million (2005: € 76.9 million), in WEM by 10.4% to € 244.2 million (2005: € 221.3 million).

Operating expenses

Consolidated operating expenses in life insurance less reinsurance commissions and profit shares from reinsurance business ceded rose in 2006, by 7.1% to € 261.4 million (2005: € 244.1 million). While acquisition expenses went up due to the high level of new business 20.1% to € 188.5 million (2005: € 157.0 million), other operating expenses decreased by an impressive 16.3% to € 72.9 million (2005: € 87.1 million).

As a result of this development the cost ratio of life insurance, i.e. the relation of total operating expenses to the Group premiums earned, including the savings portion of premiums from unit- and index-linked life insurance, decreased to 12.9% (2005: 13.3%). The administrative cost ratio also decreased in 2006 and amounted to 3.6% (2005: 4.7%).

Investment results

Net investment income less financing costs sank in the reporting year, by 16.5% to € 610.3 million (2005: € 731.3 million). The UNIQA Group's life insurance investment portfolio increased by 9.5% to € 15,744.7 million in 2006 (2005: € 14,381.0 million).

Profit on ordinary activities, net profit

In life insurance, profit on ordinary activities came to € 56.0 million in 2006 (2005: € 68.8 million). Net profit was down by 17.6% to € 36.7 million (2005: € 44.5 million).

Premium volume written in life insurance incl. the savings portion of premiums from unit- and index-linked life insurance in € million

Health insurance segment 2006 2005 2004
€ million € million € million
Premiums written 889.8 845.4 744.6
Share CEE & NEEM 0.3% 0.2% 0.2%
Share WEM 20.2% 17.7% 9.4%
Premiums earned 886.7 849.4 742.1
Net investment income 113.8 100.9 81.5
Insurance benefits 805.8 773.1 675.3
Acquisition expenses less reinsurance commissions 86.8 78.3 66.6
Other operating expenses 49.9 52.6 52.9
Cost ratio (after reinsurance) 15.4% 15.4% 16.1%
Administrative cost ratio 5.6% 6.2% 7.1%
Profit on ordinary activities 53.7 40.6 23.6
Net profit 34.8 34.7 20.2

Health insurance

Premiums up by more than 5% in 2006

In comparison to the previous year, premiums written in health insurance increased by 5.3% to € 889.8 million (2005: € 845.4 million).

In Austria, where UNIQA is the clear no. 1 in the health insurance market, a premium volume of € 707.4 million (2005: € 693.9 million) was achieved in 2006. This was an increase of 2.0%. In the WEM region, health insurance premiums rose 19.9% to € 179.5 million (2005: € 149.7 million), because Mannheimer Krankenversicherung had only been included in the consolidated financial statements for three quarters in 2005. In the Western European markets, the share of the total premiums in health insurance rose from 17.7% to 20.2%. In the countries in Eastern and South-Eastern Europe, private health insurance still plays a secondary role.

In 2006, 4.4% more premiums were earned in health insurance, amounting to € 886.7 million at the end of the year (2005: € 849.4 million).

Premium volume written in health insurance in € million

Development of insurance benefits

Retained insurance benefits rose due to the increased amount of business by 4.2% to € 805.8 million (2005: € 773.1 million). In Austria, insurance benefits rose only very slightly compared to the increase in premiums; by 0.7% to € 644.5 million (2005: € 639.7 million). In the international health insurance line insurance benefits rose by 21.0% to € 161.3 million (2005: € 133.4 million).

Operating expenses

In 2006, total operating expenses increased slightly by 4.4% to € 136.7 million (2005: € 130.9 million). Acquisition expenses rose by 10.9% to € 86.8 million (2005: € 78.3 million). In health insurance it was also possible to reduce the other operating expenses. Despite the rise in premium revenue these expenses sank by 5.2% to € 49.9 million (2005: € 52.6 million).

In 2006, the cost ratio in health insurance remained at 15.4%, the same level as the previous year (2005: 15.4%). However, the administrative cost ratio decreased from 6.2% to 5.6%.

Investment results

Net investment income less financing costs rose in 2006, by 12.8% to € 113.8 million (2005: € 100.9 million). In health insurance capital investments increased by 2.0% to € 2,067.3 million (2005: € 2,026.7 million).

Profit on ordinary activities, net profit

Profit on ordinary activities in health insurance rose again in the reporting year by 32.1% to € 53.7 million (2005: 40.6 million). Because of an extraordinary tax effect in 2005, net profit remained, with a rise of 0.2% to € 34.8 million, at basically the same level as the previous year (2005: € 34.7 million).

Property and casualty insurance segment 2006 2005 2004
€ million € million € million
Premiums written 2,037.1 1,933.6 1,655.6
Share CEE & NEEM 21.0% 18.7% 18.6%
Share WEM 18.5% 19.6% 13.4%
Premiums earned 1,715.6 1,627.7 1,393.5
Net investment income 140.9 130.7 89.5
Insurance benefits 1,130.1 1,106.1 907.5
Loss ratio (after reinsurance) 65.9% 68.0% 65.1%
Loss ratio (before reinsurance) 64.1% 66.4% 63.6%
Acquisition expenses less reinsurance commissions 352.3 343.8 302.4
Other operating expenses 216.6 208.9 176.9
Cost ratio (after reinsurance) 12.9% 13.3% 17.8%
Administrative cost ratio 12.6% 12.8% 12.7%
Combined ratio (after reinsurance) 99.0% 101.9% 99.5%
Combined ratio (before reinsurance) 95.4% 98.2% 95.8%
Profit on ordinary activities 128.8 80.9 58.6
Net profit 103.7 54.2 52.6

Property and casualty insurance

Premiums written over e 2 billion for the first time

In the property and casualty line UNIQA was able to increase premium volume written in the past year by 5.4% to € 2,037.1 million (2005: € 1,933.6 million).

Premium volume in Austria was up, despite the stiffer competition, by 3.4% to € 1,234.1 million (2005: € 1,193.3 million). In the CEE & NEEM regions growth was clearly higher in 2006. The premium volume written jumped up 18.0% to € 426.8 million (2005: € 361.8 million), thus already contributing 21.0% (2005: 18.7%) to Group premiums in property and casualty. On the markets in Western Europe premium volume written sank slightly in 2006, by 0.6% to € 376.2 million (2005: € 378.5 million). That represents a share of 18.5% (2005: 19.6 %).

Premium volume written in property and casualty insurance in € million

Details on premium volume written in the most important business lines can be found in the notes to the consolidated financial statements (cf. note no. 30).

Premiums earned in the property and casualty line amounted to € 1,715.6 million (2005: € 1,627.7 million) at the end of the year, which was 5.4% more than in 2005.

Development of insurance benefits

The rise in total retained insurance benefits in the property and casualty line in 2006 was, despite the harsh winter and the claims relating to heavy snow loads, only a very moderate 2.2% to € 1,130.1 million (2005: € 1,106.1 million). In Austria, insurance benefits decreased by 0.9% to € 714.7 million (2005: € 721.0 million), in the Western European Markets even by 2.7% to € 178.1 million (2005: € 183.1 million). In the CEE and NEEM regions, insurance benefits were up 17.4% to € 237.2 million because of the increased volume of business (2005: € 202.0 million).

As a result of this positive trend, the consistent implementation of reorganisation measures and risk-oriented underwriting policies the net loss ratio (retained insurance benefits relative to premiums earned) sank by 2.1 percentage points to 65.9% (2005: 68.0%). At the end of 2006, the gross loss ratio (before reinsurance) was even lower, at 64.1% (2005: 66.4%).

The level of reserves in property and casualty insurance (total retained claims provisions in relation to earned premiums) rose slightly, reaching 110.9% (2005: 109.4%) at the end of 2006.

Operating expenses, combined ratio

Total operating expenses increased in the property and casualty insurance line – below average, compared to premiums – by 2.9% to € 568.9 million (2005: € 552.8 million). In the process, acquisition costs rose by 2.5% to € 352.3 million (2005: € 343.8 million), other operating expenses increased by 3.7% to € 216.6 million (2005: € 208.9 million).

The cost ratio in property and casualty insurance sank in the past financial year to 33.2% (2005: € 34.0%). The administrative cost ratio diminished slightly, falling to 12.6% (2005: 12.8%).

The combined ratio was successfully reduced in 2006, and amounted to 99.0% (2005: 101.9%). The combined ratio before reinsurance was even lowered to 95.4% (2005: 98.2%).

Investment results

Net income from investments less financing costs rose in the past year by 7.8% to € 140.9 million (2005: € 130.7 million). The investment portfolio increased in property and casualty insurance by 13.0% to € 3,343.1 million (2005: € 2,959.6 million).

Profit on ordinary activities, net profit

Profit on ordinary activities increased in property and casualty insurance in 2006, by 59.2% to € 128.8 million (2005: € 80.9 million). Net profit almost doubled, increasing by 91.3% to € 103.7 million (2005: € 54.2 million).

International markets

Above average growth in 2006 as well

The international premium volume of the UNIQA Group rose sharply in the past financial year, due to strong organic growth and the acquisition of companies in Eastern and South-Eastern Europe. Premium volume written in the international Group companies incl. the savings portion of premiums from unitand index-linked life insurance climbed in 2006, by 24.3% to € 1,670.9 million (2005: € 1,344.8 million). This brought the international share of Group premiums up to 32.8% (2005: 28.4%). Premiums earned rose 12.0% to € 1,213.3 million (2005: € 1,083.4 million).

The premium volume written incl. the savings portion of premiums from unit- and index-linked life insurance was divided as follows amongst the various regions and countries in the UNIQA Group:

UNIQA international markets Premium volume written1) Share of Group
2006 2005 2004 premiums 2006
€ million € million € million %
Poland 197.7 177.1 117.9 3.9
Czech Republic 110.9 95.6 87.7 2.2
Slovakia 56.8 51.9 45.9 1.1
Hungary 203.9 138.5 120.3 4.0
Croatia 15.0 12.3 9.4 0.3
Bosnia and Herzegovina 10.8 6.9 0 0.2
Central Eastern Europe (CEE) 595.0 482.2 381.1 11.7
Bulgaria 42.0 0 0 0.8
Serbia 2.8 0 0 0.1
New Eastern Emerging Markets (NEEM) 44.8 0 0 0.9
Germany 394.7 371.6 122.2 7.8
Switzerland2) 41.2 49.7 63.8 0.8
Liechtenstein 15.6 13.1 26.4 0.3
Italy 579.7 428.2 107.2 11.4
Western European Markets (WEM) 1,031.1 862.6 319.7 20.3
Total international 1,670.9 1,344.8 700.8 32.8

1) Incl. the savings portion of premiums from unit- and index-linked life insurance.

2) Excl. premiums from internal Group reinsurance business.

International premium volume written in € million

Total insurance benefits in the international Group companies increased 11.2% in 2006, to € 908.3 million (2005: € 816.6 million). Consolidated operating expenses less reinsurance commissions and profit shares from reinsurance business ceded rose in the past financial year by 17.6% to € 346.1 million (2005: € 294.2 million).

In 2006, before consolidation based on the geographic segments (cf. segment reports), profit on ordinary activities generated by the companies in the three regions outside of Austria amounted to € 64.5 million (2005: € 63.2 million). This amounted to a share of the Group results of 27.0% (2005: 33.2%).

Significant events subsequent to the balance sheet date (subsequent report) 2000 35

UNIQA increases involvement in Bulgaria 1500 25

The UNIQA Group expanded its commitment in Bulgaria at the beginning of 2007, by taking over an additional 31% of Vitosha. This brought UNIQA's portion of Vitosha's share capital up from 20% to 51%. In order to make the integration of the Bulgarian Vitosha companies visible they have already been renamed to UNIQA. 500 1000 15

UNIQA cooperating with largest Albanian insurance company 0

At the end of March 2007, UNIQA agreed on a cooperation with Sigal, the largest Albanian insurance group. Sigal has a premium volume of about € 20 million, a market share of 28%

Outlook for 2007

UNIQA's profit improvement programme 2007–2010

The profit improvement programme (PIP) is an additional step in the consistent implementation of the earnings-oriented business strategy. The focus is on achieving a cost, claims and profit structure that is comparable to international benchmark companies.

The goal of this programme is a sustainable increase in the Group's pre-tax results of about € 200 million. This corresponds to earnings of € 430 million for the year 2010, whereby value is placed on consistent development of the results. In total, the PIP presumes savings in the amount of € 280 million, from which € 80 million will be reinvested in measures to expand distribution and infrastructure, and increase brand recognition. The PIP is based on numerous measures and campaign plans that ensure the sustainable achievement of this ambitious goal.

and is Albania's largest insurance company with a corresponding market presence in Kosovo and Macedonia. UNIQA will support Sigal in the areas of product development – above all, in life and health insurance – as well as training and marketing.

The agreement also provides an excellent basis for expanding the preferred partnership in these dynamically developing regions in South-Eastern Europe. In addition, UNIQA has secured an option to acquire the majority of Sigal as of 2010. 0

Life insurance

The vast majority of the population is aware that a private pension plan is a basic prerequisite for upholding the standard of living in retirement. Insurers play a very important role with respect to private old-age provision. Private pension and retirement annuities and federally subsidised provisions for the future will also be of great significance in the future.

Thus, private pension plans will also form the core of UNIQA's distribution and marketing activities in 2007. Within the framework of its autumnal provision campaign, Raiffeisen Versicherung will focus especially on retirement annuity, and FINANCELIFE, which successfully promotes federally subsidised provisions for the future, will further expand its market share through innovative product developments and improvements.

UNIQA will also focus on the development of new products and product features in the future:

  • A new focal point of advisory services in 2007, will be nursing insurance schemes, since private provision in the event of nursing requirements is becoming ever more important. Thus in 2007, UNIQA with "Care & Advance Preparation" ("Pflege & Vordenken") and Raiffeisen Versicherung with "My Guaranteed Care" ("Meine sichere Pflege") both launched new nursing insurance products. These can be concluded as additional or stand-alone variants – as a single-premium insurance or insurance with recurring premiums. The nursing care requirements are determined according to the "Activities of Daily Life" system (ADL).
  • The development of a product platform in the life insurance segment will also be an area of concentration in 2007. UNIQA will combine the advantages of classical and unit-linked pension plan products and their numerous varieties of product components into a single system.
  • A special area of concentration in 2007, will be dedicated to company pension plans. UNIQA strives to achieve optimum solutions in the area of company old-age provision plans for small and medium-sized enterprises. There is enormous growth potential in this area. In collaboration with Raiffeisen bank group, especially Raiffeisen Versicherung is in a position to offer an optimum pension solution for every company. The company pension scheme products are largely standardised for this purpose and suitable for the needs of bank distribution. Company old-age provision will be additionally emphasised within the framework of the SuccessfulPartnership – UNIQA's newly created corporate customer loyalty instrument.

Internationally, the UNIQA Group will further strengthen and intensify cooperation with Raiffeisen bank group in Eastern and Southern Europe. Following the acquisitions in Romania and Bulgaria, as well as in Serbia and the Ukraine, these countries are the object of increasing concentration of cooperation in the bank insurance sector. In the product area, the focus is placed on combined bank and insurance products. In 2007, a strong growth dynamic is expected, in particular, in the personal injury insurance sector. A further increase in the life insurance sector – above all, in the unit-linked life insurance lines – is expected in Italy through the successful cooperation with the Veneto Banca Group.

Health insurance

After the success of 2006, the UNIQA Group will also continue down the path taken to date in Austria in 2007. Of primary importance is, on the one hand, the goal of keeping costs within a moderate scope through cost reduction measures, and on the other hand, making the successes of medical advancement directly accessible to our customers. The negotiations with the hospital carriers and medical associations were characterised by businesslike rigidity, but at the same time, it was possible to achieve a significant milestone in the development of the contracts through the negotiation of a new operations Group scheme. The necessary premium adjustments of the dominating special premium class insurance were once again somewhat less than in the previous year. UNIQA achieved a clear increase in the number of hospitals which invoice electronically. This number should also increase dramatically in 2007.

The year 2007 will also be characterised by renewal and innovation of products. As a result of the Unisex-Directive of the EU, it will be necessary to recalculate nearly the entire rate scale by November. As of that point, costs for all new customers associated with pregnancy and childbirth may no longer be allocated solely to women, but must be equally apportioned to both sexes. This will result in a reduction in premiums for women and a simultaneous increase in premiums for men.

As early as the middle of 2007, UNIQA plans to launch two special products which already comply with the unisex approach:

  • A comprehensive medical expenses rate, which will also include a "semi-in-patient" portion for the first time, in addition to the classic special premium class insurance. This offers insurance protection for the increasingly important area of complex diagnostics, which, in fact, does not require a hospital stay, but for organisational reasons can only be conducted in the hospital. Furthermore, in addition to the possibility of obtaining a "second opinion" prior to operations, psycho-therapeutical support in the event of severe diagnoses and events, as well as hospital stays will be offered. Additionally, the product will comprise of an innovative form of premium refund which rewards health-conscious behaviour and also offers concrete assistance through UNIQA VitalCoaches.
  • The second new product pertains to "expatriates". These are individuals who are active outside of their homeland – usually on orders by their employer – temporarily or long term. Comprehensive, but tailored solutions, which cover the (to some extent) very different needs of customers, are required in this segment. The rate structure is prepared at the Group level and is thus available to all the UNIQA Group companies that sell private health insurance.

Our product range in company health management will also be further expanded in 2007. The UNIQA VitalTruck exceeds all expectations and was operated at full capacity in 2006.

In Germany, the discussion concerning the wide-ranging health reform dominated the discussion in the reporting year. At the beginning of 2007, the corresponding legal provisions were approved. To some extent, they result in significantly altered conditions for private health insurance, which also affect Mannheimer Krankenversicherung. However, this insurer had improved its position prior to the conclusion of the reform discussion with an innovative expansion of its rate scale in the area of additional insurance, as well as through an attractive renewal of its total cost and nursing care rate. For 2007, the focus will be on the careful evaluation of the consequences of the reform and the corresponding development of strategies.

In Italy, UNIQA Assicurazioni has been successfully providing health insurance for decades. In 2007, the company will further develop its product range, not only in the area of hospital insurance, but also in the area of hospital per diem insurance in order to continue to live up to its image as an excellent health insurer.

The trend in the markets of Central and Eastern Europe continues to develop on an evolutionary basis through products adjusted to the private health sector – which is not yet comparable to Western Europe. Essentially, these are rates which provide for lump-sums (for instance, per hospital day or operation).

Property and casualty insurance

UNIQA will also consistently continue measures for the further improvement of technical results in the 2007 financial year. The goal is a continued, sustainable improvement in earnings through the stabilisation of loss ratios at a low level.

In the area of material insurance, special attention will be given to the development of the loss ratio in the burglary and water damage insurances. The crime rate has perhaps slackened somewhat, however, it can hardly be considered a trend reversal. Therefore, UNIQA seeks to improve the security awareness of its customers through informational brochures and the offer of security checks for small and medium-sized enterprises. In the legal expenses insurance line in 2007, UNIQA also expects continued growth, and the contacts in the art insurance industry should be further expanded through the art history service and professional advisory services.

In the motor vehicle insurance division in 2007, UNIQA will also be able to maintain the technical results at the current level, although all indicators suggest further price competition and, thus, lower growth opportunities. Owing to increased competition in the motor vehicle insurance market, the current price level is stagnating and is even regressing in some risk segments. Since premium adjustments for existing policies will only be possible to a small extent, despite the fact that expenses for personal injury have increased disproportionately as a result of increased health costs, product policy will continue to focus on the specific risk situation of our customers.

As the first company in the entire German-speaking insurance market, UNIQA plans to introduce usage-optimised insurance (UOI) to the market in 2007. The new system will enable a precise specification of the risk profile by measuring the kilometres actually driven and also the streets used. These values influence the amount of the premium. Initially, private customers will be

offered motor vehicle liability and collision damage insurance in addition to the standard rates. The insurance product will also be tied to an extensive security service.

With optimal claims settlement for our customers in mind, UNIQA will also focus on the intensive use of its own motor vehicle experts and current communications technology in 2007. That is why we have concentrated activities in the areas of motor vehicle and property damage through the foundation of our own company for damage observation and repair. Additionally, UNIQA supports new and effective repair methods, and is focusing on a trustworthy collaboration with the qualified Austrian repair industry.

In 2007, Raiffeisen Versicherung will promote motor vehicle, homeowner and apartment insurance products within the framework of its spring campaign.

In the corporate customer business, UNIQA expects the continuation of the trend in which risks requiring little know-how and small capacities will be subjected to price pressure. In the general liability insurance line, there is a tendency to gather entire professional groups in framework agreements in order to achieve a price advantage. UNIQA will also further develop its competence in cross-border insurance programmes together with the international UNIQA companies.

Results and proposed appropriation of profit for UNIQA Versicherungen AG

The individual accounts of UNIQA Versicherungen AG, prepared in accordance with the Austrian Commercial Code, report an annual net profit for the 2006 financial year of € 42.0 million (2005: € 31.3 million). The Management Board shall thus recommend to the annual general meeting of shareholders on 21 May 2007, that the net profit for the 2006 year in the amount of € 42,036,959.37 (2005: € 31,321,289.45) be distributed as a dividend of 35 cents on each of the 119,777,808 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, 2 April 2007

The Management Board

Consolidated Balance Sheet

as at 31 December 2006

Assets
Notes
31 Dec. 2006
€ 000
31 Dec. 2005
€ 000
A. Tangible assets
I.
Self-used land and buildings
1
233,997 236,388
II.
Other tangible assets
2
111,113 135,299
345,110 371,686
B. Land and buildings held as financial investments
3
927,456 856,351
C. Intangible assets
I.
Deferred acquisition costs
4
863,430 807,297
II.
Goodwill
5
253,064 223,418
III.
Other intangible assets
6
47,167 49,029
1,163,661 1,079,744
D. Shares in associated companies
7
371,998 219,469
E. Investments
I.
Variable-yield securities
1. Available for sale
8
3,462,337 3,080,919
2. At fair value through profit or loss 1,025,332 881,383
4,487,668 3,962,302
II.
Fixed interest securities
1. Held to maturity 0 0
2. Available for sale
8
10,634,769 9,926,273
3. At fair value through profit or loss 508,599 515,629
11,143,369 10,441,902
III.
Loans and other investments
1. Loans
10
1,034,044 1,157,424
2. Cash at credit institutions
11
802,106 855,233
3. Deposits with ceding companies
11
105,678 97,627
1,941,827 2,110,285
IV.
Derivative financial instruments
1. Variable-yield derivatives
9
41,144 6,168
2. Fixed interest derivatives
9
54,826 42,236
95,970 48,405
17,668,834 16,562,894
F. Investments held on account and at risk of life insurance policyholders
23
1,952,897 1,492,241
G. Share of reinsurance in technical provisions
I.
Provision for unearned premiums
18
31,031 29,291
II.
Actuarial provision
19
384,279 370,004
III.
Provision for outstanding claims
20
322,567 333,946
IV.
Provision for profit-unrelated premium refunds
21
315 1,752
V.
Provision for profit-related premium refunds, i.e. policyholder profit sharing
21
100 100
VI.
Other technical provisions
2,656 2,577
22 740,947 737,670
H. Share of reinsurance in technical provisions for life insurance policies where the
investment risk is borne by policyholders
23
305,580 255,704
I. Receivables including receivables under insurance business
12
I.
Reinsurance receivables
36,298 56,849
II.
Other receivables
634,784 604,813
III.
Other assets
37,150 36,959
708,233 698,621
J. Receivables from income tax
13
54,249 28,792
K. Deferred tax assets
14
85,000 73,197
L. Liquid funds 263,164 192,024
Total assets 24,587,131 22,568,392
Notes
A.
Total equity
I.
Shareholders' equity
15
1. Subscribed capital and capital reserves
206,305
206,305
2. Revenue reserves
692,161
576,389
3. Revaluation reserves
181,982
116,433
4. Group total profit
42,037
31,321
1,122,485
930,449
II.
Minority interests in shareholders' equity
16
207,299
203,226
1,329,784
1,133,674
B.
Subordinated liabilities
17
475,000
325,000
C.
Technical provisions
I.
Provision for unearned premiums
18
389,987
351,896
II.
Actuarial provision
19
14,942,474
13,970,159
III.
Provision for outstanding claims
20
2,022,881
1,939,806
IV.
Provision for profit-unrelated premium refunds
21
48,027
43,518
V.
Provision for profit-related premium refunds, i.e. policyholder profit sharing
21
752,647
863,618
VI.
Other technical provisions
43,461
40,381
22
18,199,478
17,209,378
D.
Technical provisions for life insurance policies held on account
and at risk of policyholders
23
1,911,516
1,457,644
E.
Financial liabilities
I.
Liabilities from loans
24
193,526
211,731
II.
Derivatives
9
1,209
37,029
194,734
248,760
F.
Other provisions
I.
Pensions and similar provisions
25
542,418
523,127
II.
Other provisions
26
179,900
175,830
722,319
698,957
G.
Payables and other liabilities
27
I.
Reinsurance liabilities
724,329
689,251
II.
Other payables
655,096
429,998
III.
Other liabilities
8,232
11,539
1,387,657
1,130,787
H.
Liabilities from income tax
28
66,754
95,361
I.
Deferred tax liabilities
29
299,889
268,831
Total equity and liabilities
24,587,131
22,568,392
Equity and liabilities 31 Dec. 2006 31 Dec. 2005
€ 000 € 000

Consolidated Income Statement

for the 2006 business year

2006 2005
Notes € 000 € 000
1. Premiums written (retained)
30
a) Gross 4,532,137 4,370,165
b) Reinsurers' share –372,366 –354,410
4,159,771 4,015,755
2. Change due to premiums earned (retained)
a) Gross –31,152 –15,824
b) Reinsurers' share 1,048 498
–30,104 –15,326
3. Premiums earned (retained)
31
a) Gross 4,500,985 4,354,341
b) Reinsurers' share –371,318 –353,912
4,129,666 4,000,429
4. Income from fees and provisions
32
Reinsurance provisions and profit shares from reinsurance business ceded 80,865 66,744
5. Net investment income
33
890,342 989,470
of which profit from associated companies
38
45,017 12,871
6. Other income
34
41,884 36,566
Total income 5,142,757 5,093,209
7. Insurance benefits (net)
35
a) Gross –3,938,925 –4,005,588
b) Reinsurers' share 223,290 228,685
–3,715,635 –3,776,903
8. Operating expenses
36
a) Acquisition costs –708,444 –645,811
b) Other operating expenses –339,361 –348,651
–1,047,805 –994,461
9. Other expenses
37
–107,024 –93,230
10. Amortisation of goodwill –8,448 –11,732
Total expenses –4,878,912 –4,876,326
11. Operating profit 263,845 216,883
12. Financing costs –25,359 –26,550
13. Profit on ordinary activities 238,487 190,332
14. Income taxes
39
–63,422 –56,991
15. Net profit 175,065 133,342
of which consolidated profit 151,900 107,760
of which minority interests 23,165 25,581

Consolidated Cash Flow Statement

for the 2006 business year

2006 2005
€ 000 € 000
Net profit including minority interests
Net profit 175,065 133,342
of which interest and dividend payments 54,651 41,593
Minority interests –23,165 –25,581
Change in technical provisions 1,372,731 1,825,129
Change in deferred acquisition costs –55,965 –49,026
Change in amounts receivable and payable from direct insurance 53,830 28,798
Change in other amounts receivable and payable 121,029 154,983
Change in securities at fair value through profit or loss –184,484 –884,970
Realised gains/losses on the disposal of investments –468,225 –677,288
Depreciation/appreciation of other investments 211,661 –44,891
Change in provisions for pension and severance payments 19,291 56,404
Change in deferred tax assets/liabilities 13,542 10,620
Change in other balance sheet items –5,714 –832
Change in goodwill and intangible assets 1,737 –9,272
Other non-cash income and expenses as well as accounting period adjustments 5,638 6,710
Net cash flow from operating activities 1,236,972 524,126
of which cash flow from income tax –115,688 –25,465
Receipts due to disposal of consolidated companies and other business units 59,807 6,088
Payments due to acquisition of consolidated companies and other business units –159,821 –69,486
Receipts due to disposal and maturity of other investments 9,488,763 6,116,234
Payments due to acquisition of other investments –10,208,539 –6,425,148
Change in investments held on account and at risk of life insurance policyholders –460,656 –427,361
Net cash flow used in investing activities –1,280,446 –799,673
Change in investments on own shares 0 118,261
Dividend payments –31,051 –24,620
Receipts and payments from other financing activities 131,794 10,739
Net cash flow used in financing activities 100,743 104,379
Change in cash and cash equivalents 57,268 –171,168
Change in cash and cash equivalents due to foreign currency translation 911 342
Change in cash and cash equivalents due to acquisition/disposal of consolidated companies 12,961 7,495
Cash and cash equivalents at beginning of period 192,024 355,354
Cash and cash equivalents at end of period 263,164 192,024
of which cash flow from income tax –115,688 –25,465

The cash and cash equivalents correspond to item L. of the assets: Liquid funds.

Development of Group Equity

Subscribed capital Revaluation Revenue reserves
and capital reserves reserve including reserves for
own shares
€ 000 € 000 € 000
Situation as at 31 Dec. 2004 206,305 77,211 440,206
Changes for:
Foreign currency translation 3,815
Change in consolidation scope 1,187
Unrealised capital gains and losses from evaluation at equity 3,247
Dividends to shareholders
Own shares 53,806
Unrealised capital gains and losses from investments 39,222
Net profit for the period
Changes in revenue reserves 77,546
Changes in capital reserves
Other –858
Situation as at 31 Dec. 2005 206,305 116,433 578,950
Changes for:
Foreign currency translation 4,962
Change in consolidation scope
Unrealised capital gains and losses from evaluation at equity
Dividends to shareholders
Own shares
Unrealised capital gains and losses from investments 65,549
Net profit for the period
Changes in revenue reserves 109,661
Changes in capital reserves
Other 1,149
Total Minority Equity Profits carried forward Holding of
equity interests and net profit own shares
€ 000 € 000 € 000 for the year
€ 000
€ 000
860,161 177,081 683,080 26,373 –67,016
3,815 3,815
6,177 4,990 1,187
3,247 3,247
–32,731 –8,110 –24,620 –24,620
118,261 118,261 64,454
42,905 3,683 39,222
133,342 25,581 107,760 107,760
–77,546
–1,503 –1,503 –646
1,133,674 203,226 930,449 31,321 –2,561
4,962 4,962
4,975
–40,899 –9,848 –31,051 –31,051
51,331 –14,218 65,549
175,065 23,165 151,900 151,900
–109,661
676 –473
1,329,784 207,299 1,122,485 42,037 –2,561

Segment Balance Sheet

Classified by segment

Property and casualty Life
2006
€ 000
2005
€ 000
2006
€ 000
2005
€ 000
Assets
A.
Tangible assets
202,477 287,770 126,641 67,085
B.
Land and buildings held as financial investments
334,423 384,362 411,829 285,862
C.
Intangible assets
284,162 235,882 664,432 628,567
D.
Shares in associated companies
270,794 174,410 81,275 24,646
E.
Investments
2,707,690 2,268,921 13,294,902 12,603,478
F.
Investments held on account and at risk of
life insurance policyholders 0 0 1,952,897 1,492,241
G.
Share of reinsurance in technical provisions
346,393 359,815 391,873 375,776
H.
Share of reinsurance in technical provisions for
life insurance policies where the investment risk is
borne by policyholders 0 0 305,580 255,704
I.
Receivables incl. receivables under insurance business
682,119 485,461 417,502 468,984
J.
Receivables from income tax
26,853 18,632 26,377 8,736
K.
Deferred tax assets
74,770 67,353 3,921 1,565
L.
Liquid funds
95,637 76,817 151,653 99,506
Total segment assets 5,025,318 4,359,423 17,828,884 16,312,149
Equity and liabilities
B.
Subordinated liabilities
235,000 85,000 270,000 240,000
C.
Technical provisions
2,250,311 2,136,197 13,726,250 12,983,065
D.
Technical provisions for life insurance policies held on
account and at risk of policyholders 0 0 1,911,516 1,457,644
E.
Financial liabilities
185,419 260,345 51,930 56,597
F.
Other provisions
681,973 660,867 32,150 29,770
G.
Payables and other liabilities
835,028 589,370 1,166,519 974,217
H.
Liabilities from income tax
42,667 71,215 13,673 13,219
I.
Deferred tax liabilities
200,188 152,377 54,829 60,027
Total segment liabilities 4,430,587 3,955,370 17,226,866 15,814,538
2005
2006
2005
2006
2005
2006
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
67,085
15,993
16,832
0
0
345,110
285,862
181,204
186,127
0
0
927,456
628,567
215,067
215,295
0
0
1,163,661
24,646
19,929
20,413
0
0
371,998
12,603,478
1,877,779
1,831,951
–211,537
–141,456
17,668,834
1,492,241
0
0
0
0
1,952,897
375,776
2,681
2,078
0
0
740,947
255,704
0
0
0
0
305,580
468,984
174,445
182,762
–565,834
–438,586
708,233
8,736
1,019
1,424
0
0
54,249
1,565
6,310
4,279
0
0
85,000
99,506
15,873
15,701
0
0
263,164
16,312,149
2,510,300
2,476,862
–777,372
–580,042
24,587,131
240,000
0
0
–30,000
0
475,000
12,983,065
2,223,393
2,084,506
–476
5,610
18,199,478
1,457,644
0
0
0
0
1,911,516
56,597
0
1,361
–42,615
–69,543
194,734
29,770
8,195
8,321
0
0
722,319
974,217
89,747
82,053
–703,637
–514,854
1,387,657
13,219
10,414
10,928
0
0
66,754
60,027
44,871
56,427
0
0
299,889
15,814,538
2,376,621
2,243,596
–776,728
–578,786
23,257,347
Equity and minority interests
1,329,784
Group Consolidation Health
2005
€ 000
371,686
856,351
1,079,744
219,469
16,562,894
1,492,241
737,670
255,704
698,621
28,792
73,197
192,024
22,568,392
325,000
17,209,378
1,457,644
248,760
698,957
1,130,787
95,361
268,831
21,434,718
1,133,674
Total equity and liabilities
24,587,131
22,568,392

The amounts indicated for each business segment have been adjusted to eliminate amounts resulting from segment-internal transactions.

Therefore, the balance of segment assets and segment liabilities does not allow conclusions to be drawn with regard to the equity allocated to the respective segment.

Segment Income Statement

Classified by segment

Property and casualty Life
2006 2005 2006 2005
€ 000 € 000 € 000 € 000
1. a) Gross premiums written 2,039,463 1,941,188 1,605,224 1,591,214
1. Premiums written (retained) 1,742,395 1,642,200 1,527,607 1,523,553
2. Change due to premiums earned (retained) –27,561 –15,752 –200 –291
3. Premiums earned (retained) 1,714,834 1,626,448 1,527,407 1,523,262
4. Income from fees and provisions 60,440 63,322 22,088 12,083
5. Net investment income 148,292 132,245 626,283 754,905
6. Other income 38,120 26,508 7,156 5,900
7. Insurance benefits –1,132,322 –1,105,385 –1,779,823 –1,897,899
8. Operating expenses –632,131 –612,962 –284,125 –255,867
9. Other expenses –60,985 –48,336 –39,123 –40,052
10. Amortisation of goodwill 0 –1,846 –8,448 –9,886
11. Operating profit 136,247 79,995 71,415 92,446
12. Financing costs –10,774 –12,197 –14,585 –14,353
13. Profit on ordinary activities 125,474 67,797 56,830 78,092
14. Income taxes –25,191 –26,748 –19,311 –24,267
15. Net profit 100,282 41,049 37,518 53,825
of which consolidated profit 93,641 36,928 30,711 45,621
of which minority interests 6,641 4,121 6,807 8,204

Impairment by segment

Life
2006 2005 2006 2005
€ 000 € 000 € 000 € 000
0 –1,839 0 –3,485
0 –1,839 0 –3,485
–21,604 –3,873 –97,996 –22,864
–21,604 –3,873 –97,996 –22,864
Property and casualty
Group Consolidation Health
2005 2006 2005 2006 2005 2006
€ 000 € 000 € 000 € 000 € 000 € 000
4,370,165 4,532,137 –7,657 –2,351 845,420 889,801
4,015,755 4,159,771 6,239 1,944 843,763 887,825
–15,326 –30,104 –4,181 –335 4,899 –2,008
4,000,429 4,129,666 2,057 1,609 848,662 885,817
66,744 80,865 –9,008 –2,078 346 414
989,470 890,342 268 –38 102,051 115,804
36,566 41,884 2,945 –4,728 1,214 1,336
–3,776,903 –3,715,635 –1,158 1,484 –772,461 –804,974
–994,461 –1,047,805 5,465 5,052 –131,097 –136,602
–93,230 –107,024 2,111 –1,244 –6,953 –5,671
–11,732 –8,448 0 0 0 0
216,883 263,845 2,680 58 41,763 56,125
–26,550 –25,359 0 0 0 0
190,332 238,487 2,680 58 41,763 56,125
–56,991 –63,422 0 0 –5,975 –18,919
133,342 175,065 2,680 58 35,788 37,206
107,760 151,900 2,680 58 22,532 27,490
25,581 23,165 0 0 13,256 9,716
Group Consolidation Health
2005 2006 2005 2006 2005 2006
€ 000 € 000 € 000 € 000 € 000 € 000
–5,325 0 0 0 0 0
–5,325 0 0 0 0 0
–29,217 –130,681 0 0 –2,480 –11,081
–29,217 –130,681 0 0 –2,480 –11,081

Classified by region

Premiums earned (retained) Net investment income
2006 2005 2006 2005
€ 000 € 000 € 000 € 000
Austria 2,919,866 2,921,048 763,497 874,933
Other Europe 1,208,191 1,077,462 133,331 120,018
Italy 306,581 268,878 47,240 44,127
Germany 272,000 263,461 36,439 28,419
Switzerland 266,707 265,123 6,173 5,354
Poland 134,495 112,713 11,005 11,414
Hungary 71,077 68,893 18,704 15,201
Czech Republic 64,345 48,961 5,049 10,006
Bulgaria 35,764 0 639 0
Slovakia 29,945 25,798 2,119 1,999
Croatia 9,117 6,886 797 501
Bosnia and Herzegovina 8,519 5,905 550 204
Others 9,640 10,844 4,615 2,791
Total before consolidation 4,128,058 3,998,509 896,828 994,951
Consolidation (based on geographic segments) 1,609 1,919 –6,486 –5,480
In the consolidated financial statements 4,129,666 4,000,429 890,342 989,470

Starting in the 2006 fiscal year, the presentation of the investment income and the profit on ordinary activities by region has been adjusted for the effects from the capital consolidation included in the investment income. The amounts from the previous year have been adjusted to correspond. Accordingly, the consolidation based on geographic segments comprises the expenses and income consolidation from operative business between Group companies.

Profit on ordinary activities Operating expenses Insurance benefits
2006
2005
2006
2005 2006
€ 000
€ 000
€ 000
€ 000 € 000
–666,749
181,531
–665,495 –2,967,962 –2,813,002
–416,122
64,461
–483,890 –807,783 –904,118
–72,833
–57,388
13,691
–243,917 –275,827
–118,406
8,960
–115,844 –190,663 –221,314
–92,276
3,339
–102,099 –186,558 –177,073
–56,083
–50,888
8,376
–82,506 –98,310
–48,479
–37,714
19,375
–45,938 –34,889
–37,548
–29,754
9,145
–27,378 –35,531
–15,072
0
–602
0 –22,482
–19,322
–17,907
3,873
–14,221 –17,429
–7,360
–6,176
–140
–3,290 –5,845
–4,613
–3,078
–1,002
–2,972 –5,657
–4,636
–2,536
–553
–10,339 –9,760
–1,082,871
245,992
–1,149,385 –3,775,745 –3,717,119
101,580
88,410
–7,505
–1,158 1,484
–994,461
238,487
–1,047,805 –3,776,903 –3,715,635

Notes to the Group Financial Statements

Accounting regulations

As a publicly listed company, UNIQA is obligated to prepare its consolidated financial statements according to internationally accepted accounting principles. These consolidated financial statements and Group management report, therefore, do not follow the accounting principles according to the Insurance Supervisory Act, rather the "International Financial Reporting Standards" (IFRS) and the "International Accounting Standards" (IAS) in the versions applicable to this reporting period. No early application of modified standards was performed.

Since 2005, UNIQA Versicherungen AG has applied IFRS 4, published in 2004, for insurance contracts. This standard demands that the methods of accounting and valuation be largely unaltered with regard to the technical items.

The present Group financial statements were therefore prepared, as in previous years, in compliance with IFRS 4 and in accordance with the regulations of the US Generally Accepted Accounting Principles (US-GAAP). For balancing the accounts and evaluation of the insurance-specific entries of life insurance with profit sharing, FAS 120 was observed; FAS 60 was applied for specific items in health, property and casualty insurance, and FAS 113 for reinsurance. Unit-linked life insurance, for which the policyholder bears the investment risk, was accounted for in accordance with FAS 97.

Consolidation

Scope of consolidation

In addition to the annual financial statement of UNIQA Versicherungen AG, the Group financial statements include the financial statements of all subsidiaries at home and abroad. Fortythree affiliated companies did not form part of the consolidated Group. They were of only minor significance, even if taken together, for the presentation of a true and fair view of the Group's assets, financial position and income.

The scope of consolidation therefore contains – in addition to the UNIQA Versicherungen AG – 30 domestic and 52 foreign subsidiaries in which UNIQA Versicherungen AG held the majority voting rights.

The scope of consolidation was extended in the reporting period by the following companies:

Date of Net profit for Acquired Acquisition Goodwill
initial
inclusion
the year
in € million1)
shares
%
costs
in € million
in € million
Vitosha AD, Sofia 1 Jan. 2006 –1.1 20 6.3 10.0
Vitosha Life AD, Sofia 1 Jan. 2006 0.3 99.7 0.0 0.0
Vitosha Auto OOD, Sofia 1 Jan. 2006 0.0 100 0.0 0.0
Aspernbrückengasse Errichtungs- und
Betriebs GmbH, Vienna 1 April 2006 –0.1 100 6.1 0.1
Floreasca Tower SRL, Bucharest 1 Jan. 2006 1.1 100 8.8 0.1
Pretium Ingatlan Kft., Budapest 1 Oct. 2006 0.0 100 20.0 0.0
UNIQA poslovni centar korzo d.o.o., Rijeka 1 Oct. 2006 –0.2 100 5.0 0.0
RK Invest Kft., Budapest 1 April 2006 0.0 100 5.2 0.0
Knesebeckstrasse 8–9
Grundstücksgesellschaft mbH, Berlin 1 April 2006 –0.3 100 0.4 1.0
Credo-Classic, Kiev 1 July 2006 0.0 35 14.1 8.8
UNIQA LIFE, Kiev (new) 1 July 2006 0.0 100 0.8 0.1
Zepter osiguranje A.D., Belgrade 1 Oct. 2006 –0.9 80 14.1 17.0

1) Net profit for the year included in the consolidated statements.

With effect from 25 January 2006, 20% of the shares were acquired in the Vitosha Group (Bulgaria) as were options to buy the majority of all shares at any time. Due to the assumption of control, these companies have already been fully consolidated.

The effects of the change to the scope of consolidation on the main asset and debt positions can be seen under no. 5 of the notes to the consolidated financial statements.

The associated companies refer to fourteen domestic and two foreign companies consolidated at equity; of these, eight companies were of minor significance and were listed at current market value.

During the course of the restructuring within the Austria Hotel Group, four companies inside the Group were merged together (Hotel Burgenland in Eisenstadt Betriebsgesellschaft m.b.H., Seminarhotel Baden Betriebsgesellschaft m.b.H., Grand Hotel Bohemia s.r.o. and Hotel International Praha a.s.).

In applying IAS 39 and in terms of the present interpretation of this statement of the IASB (SIC 12), fully controlled investment funds were included in the consolidation, insofar as their fund volumes were not of minor importance when viewed singularly and in total.

Consolidation principles

Capital consolidation follows the acquisition method. The costs of acquiring shares in the subsidiaries are written as the proportional equity of the subsidiary. The conditions at the time of acquiring the shares in the consolidated subsidiary are taken into consideration for the initial consolidation. To the extent other (non-Group) shareholders hold shares in the subsidiary's equity at the reporting date, these are dealt with under minority interests.

If the shareholding was acquired before 1 January 1995, the differences are set off against profits carried forward in line with the applicable transitional provisions.

In compliance with IFRS 3, the goodwill is not subject to any scheduled depreciation. The value of existing goodwill resultant from the acquisition of holdings is appraised in an annual impairment test.

A fall in value is written off where necessary. In doing so, the cash value of all future contributions to earnings generated by the economic units is contrasted with the deferred goodwill (including a share of the equity) from a discounted perspective by applying a risk-adequate interest rate.

The group of related companies within a country are treated as an economic unit rather than the individual company. An impairment, therefore, only applies if depreciation is deemed necessary at this level.

Negative differences from mergers consummated after 31 March 2004, must be credited with an effect on income immediately after reappraisal.

Shares in associated companies are, as a general rule, valued according to the equity method using the equity held by the Group. Differences are determined according to the principles of capital consolidation and the amounts are recorded under shares in associated companies. The updating of the development of the associated companies is based on the most recent financial statements available.

In establishing the value of shares in associated companies, an IFRS report is generally required. Where no IFRS reports are presented, the adjustment of the entries for these companies to the uniform Group valuation benchmarks must be dispensed with due to a lack of available documentation; however, this does not have any significant impact on the present Group consolidated financial statements.

For debt consolidation, the receivables from Group companies are set off against the payables to Group companies. As a rule, any differences have an effect on income. Group-internal results from deliveries and services are eliminated if they are of minor significance for giving a true and fair view of the Group's assets, financial position and income. Proceeds and other income from deliveries and services within the Group are set off against the corresponding expenditure.

Presentation of balance sheet and income statement

The International Financial Reporting Standards (IFRS) allow a shortened version of the balance sheet and income statement. Summarising many individual items into units enhances the informative quality of the financial statements. Explanatory notes to these items are contained in the Group notes. Because of formatting to thousand €, there may be rounding differences.

Segment reports

The primary segment reports depict the main business segments of property and casualty insurance, life insurance and health insurance. The consolidation principles are applied here to transactions within a segment. In addition, the main items of the income statement are also broken down by regional perspectives.

Foreign currency translation

The reporting currency of UNIQA Versicherungen AG is the euro. All annual financial statements of foreign subsidiaries which are not reported in euros are converted at the rate on the balance sheet closing date according to the following guidelines:

  • Assets, liabilities and transition of the annual profit/deficit at the middle rate on the balance sheet closing date
  • Income statement at the annual average exchange rate
  • Equity capital (except for annual net profit/deficit) at the historic exchange rate

Resulting exchange rate differences are set off against the shareholders' equity without affecting income.

The most important exchange rates are summarised in the following table:

e rates on balance sheet closing date 2006 2005
Swiss franc CHF 1.6069 1.5551
Slovakian koruna SKK 34.4350 37.8800
Czech koruna CZK 27.4850 29.0000
Hungarian forint HUF 251.7700 252.8700
Croatian kuna HRK 7.3504 7.3715
Polish zloty PLN 3.8310 3.8600
Bosnia and Herzegovina
convertible mark BAM 1.9581 1.9558
Romanian leu (new) RON 3.3840 3.6800
Bulgarian lev (new) BGN 1.9558 1.9563
Ukrainian hrywnja UAH 6.6631
Serbian dinar RSD 79.8438

Estimates

For creation of the Group consolidated financial statements according to IFRS, it is necessary to make assumptions for the future within various items. These estimates can have a considerable influence on the valuation of assets and debts on the balance sheet closing date, as well as the amount of expenses and income in the financial year. The items below carry a not insignificant level of risk that considerable adjustments to asset or debt values may be necessary in the following year:

  • Deferred acquisition costs
  • Goodwill
  • Shares in associated companies/investments insofar as the valuation does not take place based on stock exchange prices or other market prices
  • Technical provisions
  • Pension and similar provisions

Methods of accounting and valuation

The annual financial statements of the companies in Austria and abroad included in the consolidated financial statements were predominantly prepared up to the reporting date of UNIQA Versicherungen AG, i.e. 31 December. For recording in the consolidated financial statements, the annual financial statements of UNIQA Versicherungen AG and its included subsidiaries are unified to conform to the accounting and valuation principles of IFRS/IAS and, as far as actuarial provisions, acquisition costs and actuarial expenses and income are concerned, according to the provisions of US-GAAP. Securities transactions are recorded using the settlement date. As a rule, the fair values are derived from an active market.

Intangible assets

Intangible assets include goodwill, deferred acquisition costs, the current value of life, property and casualty insurance contracts and other items.

Goodwill is the difference between the purchase price for the stake in the subsidiary and the Group's share in the equity after the disclosure of hidden reserves at the time of acquisition.

Deferred acquisition costs for insurance activities that are directly related to new business and/or to extensions of existing policies, and that vary in line with that business, are capitalised and written off over the term of the insurance contracts they refer to. If they are attributable to property and casualty insurance, they are written off over the probable policy term, with a maximum of five years. For life insurance, the acquisition costs are amortised over the duration of the policy in the same proportion as the expected profit margin of each individual year is realised, in comparison to the total margin to be expected from the policies. For long-term health insurance policies, the depreciation of acquisition costs is measured in line with the proportionate share of earned premiums in the present value of expected future premium income. The changes in deferred acquisition costs are shown as operating expenses.

With regard to life insurance business acquired, the updating of the current value follows the progression of the estimated gross margins.

The other intangible assets include both purchased and selfdeveloped software which is depreciated on a straight-line basis over its useful economic life of 2 to 5 years.

Land and buildings, including buildings on third-party land

Land and buildings that are held as long-term investments are recognised according to IAS 40 at acquisition or construction costs, reduced by the amounts of scheduled amortisations and depreciation. Owner-used land and buildings are shown at book values (IAS 16 – benchmarking method). The scheduled depreciation term generally corresponds to the useful life, up to a maximum of 80 years. Real estate is depreciated on a straightline basis over time. The list of market values can be found in the Group notes under no. 1 and 3.

Shares in affiliated and associated companies

To the extent that the annual financial statements of affiliated and associated companies are not consolidated for being of minor significance and/or included at equity, these companies are valued as available for sale in accordance with IAS 39.

Investments

With the exception of the mortgage loans and other loans, the investments are listed at the current fair value, which is established by determining a market value or stock market price. In the case of investments for which no market value can be determined, the fair value is determined through internal valuation models or on the basis of estimates of what amounts could be achieved under current market conditions in event of proper liquidation.

Mortgage loans and other loans

These are recognised at amortised costs in the balance sheet. This means that the difference between acquisition costs and the redemption amount changes the book value with an effect on income in proportion to time and/or equity. The items included under other loans are recognised at their nominal amount less any redemptions made in the interim.

Securities available for sale

These are recognised in the financial statements at their fair value on the reporting date. Differences between the fair value and historical acquisition costs are dealt with under equity with a neutral effect on income, after deduction of the provisions for latent profit sharing and deferred taxes. Depreciation that affects income (impairment) is undertaken only where we anticipate a lasting fall in value. During the previous year, the method of calculating impairment was changed from one of individual assessment to a standardised procedure. This uses the fluctuations in fair value over the last nine months as well as the absolute difference between acquisition costs and the fair value on the reporting date as the basis for assessing a necessary impairment. In addition, foreign exchange differentials resulting from fixed-income securities are recognised with an effect on income. Foreign exchange differentials resulting from variable yield securities are recognised as equity with no effect on income, to the extent that these are not securities which are written off as the result of impairment.

Investments at fair value through profit or loss: derivatives

Derivatives are used within the limits permitted by the Austrian Insurance Supervisory Act for hedging investments and for increasing earnings. All fluctuations in value are recognised in the income statement.

Investments at fair value through profit or loss: structured products

Structured products are not split between the underlying transaction and derivative, but are accounted for as a unit. All the structured products can, therefore, be found in the "Financial instruments at fair value through profit or loss" item of the balance sheet. Unrealised profits and losses are dealt with in the income statement. ABS structures and hedge funds with leveraged risk are also dealt with under the term "Structured products".

Deposits with credit institutions and other investments are recognised at their fair value.

Investments held for unit-linked and index-linked life insurance policyholders

These investments concern life insurance policies whose value or profit is determined by investments for which the policyholder carries the risk, i.e. the unit-linked or index-linked life insurance policies. The investments in question are collected in asset pools, balanced at their current market value and managed separately from the remaining investments of the companies. The policyholders are entitled to all income from these investments. The

amount of the balanced investments strictly corresponds to the actuarial provisions (before reinsurance business ceded) for life insurance, to the extent that the investment risk is borne by the policyholders. The unrealised profits and losses from fluctuations in the current market values of the investment pools are thus counterbalanced by the corresponding changes in these provisions.

Shares of reinsurers in the technical provisions

From 2005, these are recognised on the assets page, taking the reinsurance contracts into consideration.

Receivables

These are recognised at their nominal value, taking into account redemptions made and reasonable value adjustments.

Liquid funds

Liquid funds are valued at their nominal amounts.

Other tangible assets

The tangible assets and inventories included on the balance sheet under other assets are recognised at acquisition and production costs, net of depreciation. Tangible assets are depreciated on a straight-line basis over their useful lifetime (up to a maximum of 10 years).

Technical provisions

Unearned premiums

Unearned premiums are, in principle, calculated for each individual policy and exactly to the day. If they are attributable to life insurance, they are included in the actuarial provision.

Actuarial provision

Actuarial provisions are established in the property, life and health insurance lines. Their recognition value on the balance sheet is determined according to actuarial principles on the basis of the present value of future benefits to be paid by the insurer, less the present value of future net premiums the insurer expects to receive. The actuarial provision of the life insurer is calculated by taking into account prudent and contractually agreed bases of calculation.

For policies of a mainly investment character (e.g. unit-linked life insurance), the regulations in the Statement of Financial Accounting Standards no. 97 (FAS 97) are used to value the actuarial provision. The actuarial provision is arrived at by combining the invested amounts, the change in value of the underlying investments and the withdrawals under the policy.

For unit-linked insurance policies, where the policyholder carries the sole risk of the value of the investment rising or falling, the actuarial provision is listed as a separate liability entry under "Technical provisions for life insurance policies held on account and at risk of policyholders".

The actuarial provisions for health insurance are determined on a calculation basis of "best estimate", taking into account safety margins. Once the calculation basis has been determined, these have to be applied to the corresponding partial portfolio for the whole term (locked-in principle).

Provision for outstanding claims

The provision for outstanding claims in the property insurance line consists of the future payment obligations determined by realistic estimation, using recognised statistical methods taking into account current or expected volumes, including the related expense of loss adjustment. This applies to claims already reported as well as for claims incurred, but not yet reported. In insurance lines where past experience does not allow the application of statistical procedures, individual loss provisions are made.

Life insurance is calculated on an individual loss basis with the exception of the provision for unreported claims.

For health insurance, the provisions for outstanding claims are estimated on the basis of past experience, taking into consideration the known arrears in claim payments.

The provision for the assumed reinsurance business generally complies with the figures of the cedents.

Provision for premium refunds and profit sharing

The provision for premium refunds includes, on the one hand, the amounts for profit-related and profit-unrelated profit sharing to which the policyholders are entitled on the basis of statutory or contractual regulations, and on the other hand, the amount resulting from the valuation of assets and obligations of life insurers deviating from valuation under commercial law. The amount of the provision for latent profit sharing amounts to generally 85% of the valuation differentials before tax.

Other technical provisions

This item basically contains the provision for contingent losses for acquired reinsurance portfolios as well as a provision for expected cancellations and premium losses.

Technical provisions for life insurance policies held on account and at risk of policyholders

This item concerns the actuarial provisions and the remaining technical provisions for obligations from life insurance policies whose value or income is determined by investments for which the policyholder bears the risk, or for which the benefit is indexlinked. As a general rule, the valuation corresponds with the investments of the unit-linked and index-linked life insurance written at current market values.

Other provisions for pensions and similar obligations

For the performance-orientated old-age provision systems of the UNIQA Group, pension provisions are calculated according to IAS 19, using the projected unit credit method. Future obligations are spread over the whole employment duration of the employees. All actuarial profits and losses due to changed parameters are recognised as having an effect on income. The calculation is based on current mortality, disability and fluctuation probabilities, expected increases in salaries, pension entitlements and pension payments, as well as a realistic technical interest rate. The technical interest rate, which is determined in conformity with the market and on the basis of the reporting date, is in line with the market yield of long-term, high-quality industrial or government bonds.

The amount of other provisions is determined by the extent to which the provisions will probably be made use of.

Payables and other liabilities and are shown at the amount to be repaid.

Deferred taxes

Deferred tax assets and liabilities are to be created according to IAS 12 for temporary differences arising from the comparison of a stated asset or an obligation using the respective taxable value. This results in probable tax burdens affecting future cashflow. These are to be accounted for independent of the date of their release. Moreover, according to IAS, deferred taxes for accumulated losses brought forward and not yet used are to be capitalised to the extent that they can be used in the future with adequate probability.

Value adjustments (impairments)

In principle, the carrying amounts of assets on the balance sheet are checked at least once a year with regard to possible impairment. Securities with an expected lasting decrease in value are depreciated with an effect on income. The entire real estate inventory is subject to recurrent valuation through external reports prepared by legally sworn experts. If there is a foreseeable lasting reduction in the value of assets, their carrying amount is reduced.

Premiums

Of the premiums written in the area of unit- and index-linked life insurance, only those parts calculated to cover the risk and costs are allocated as premiums.

Classes of insurance

(direct business and partly accepted reinsurance business)

  • Life insurance
  • Unit-linked and index-linked life insurance
  • Health insurance
  • Casualty insurance
  • General liability insurance
  • Motor TPL insurance, vehicle and passenger insurance
  • Marine, aviation and transport insurance
  • Legal expense insurance
  • Fire and business interruption insurance
  • Housebreaking, burglary and robbery insurance
  • Water damage insurance
  • Glass insurance
  • Storm insurance
  • Household insurance
  • Hail insurance
  • Livestock insurance
  • Machinery and business interruption insurance
  • Construction insurance
  • Credit insurance
  • Other forms of insurance

Major differences between IFRS/IAS and Austrian accounting regulations

Goodwill

In the case of sustained impairment, the entire goodwill is written off at its fair value. The valuation is performed at least once a year by applying a valuation model (impairment test). No ordinary amortisation of goodwill is performed.

Intangible assets

According to IFRS self-developed intangible assets have to be capitalised, whereas they cannot be capitalised under the Austrian Business Code.

Land and buildings

Land and buildings, including buildings on third-party land, are valued according to IAS 16 and also, if so chosen, according to IAS 40 at book value minus scheduled amortisation. These are based on the actual duration of use; in accordance with Austrian Business Code they are mostly also influenced by tax regulations.

Shares in affiliated and associated companies

Affiliated and associated companies that are not consolidated fully or at equity due to their minor significance are recognised at market value.

As a general rule, participating interests are valued at equity insofar as the company has the opportunity to exercise a considerable influence. This is assumed, as a matter of principle, for shares between 20% and 50%. The actual exercising of considerable influence has no bearing on these figures.

Financial assets

According to IAS 39, a different classification system is applicable to financial assets. It classifies other securities into the following categories: held to maturity, available for sale, fair value through profit or loss (FVTPL). The main valuation difference that applies to the other securities available for sale, which account for the majority of financial assets, as well as the other securities recorded with effect on income is that these are stated at fair value on the balance sheet date.

According to the Austrian Business Code, the acquisition costs constitute the maximum valuation limit.

With regard to the other securities available for sale, the difference between book value and fair value is treated within the shareholders' funds without affecting income, whereas in the case of the other securities at fair value through profit or loss, the difference fully affects income. In contrast, when applying the strict lower-of-cost-or-market principle in the Austrian Business Code, depreciation always affects income, even in the case of a temporary reduction in value and appreciations in line with the requirement to reinstate original values. In the case of the mitigated lower-of-cost-or-market principle, the impairment is not obligatory if the depreciation is only temporary. Expected permanent impairments, posted as depreciation, affect income according to both the IFRS and the Austrian Business Code.

Reinsurance

From 2005, the shares of reinsurers in actuarial provisions are shown on the assets page of the balance sheet in accordance with IFRS 4.

Acquisition costs

Commissions, as well as other variable costs that are directly related to the acquisition or extension of existing policies, are capitalised and distributed over the insurance contract terms and/or the premium payment period. The deferred acquisition costs also replace the administrative expense deductions allowed under the Insurance Supervisory Act for premiums brought forward in property and casualty insurance.

Actuarial provision

For the calculation of the actuarial provisions in life and health insurance, regulations deviating from Austrian law apply, which affect valuation variances as well as the allocation between actuarial provisions and provisions for premium refunds. In particular, this refers to the non-application of the zillmerisation of acquisition costs as well as the integration of the revalued unearned premiums and real final bonus in the life insurance line.

Health insurance is mainly affected by the deviating interest rate as well as the application of the most recent parameters, including safety margins.

Provision for premium refunds and profit sharing

Due to the difference in valuation of the assets and liabilities in the area of life insurance, a provision has to be made for deferred profit sharing which complies with the national legal or contractually regulated profit sharing and is assessed in favour of the policyholder. The change of the provision for deferred premium refunds compensates, to a large extent, for the effects of revaluation on the income statement and thus in the results for the year.

Provisions for outstanding claims

In accordance with US-GAAP, provisions for outstanding claims in the property insurance line are basically no longer established using the principle of caution and on a single-loss basis, but rather using mathematical procedures based on probable future compliance amounts.

Provisions for claims equalisation and catastrophes

The establishment of a provision for claims equalisation and catastrophes is not permitted under IFRS or US-GAAP regulations, as it does not represent any current obligations to third parties on the balance sheet date. Accordingly, transfers or releases do not influence the results for the year.

Pension commitments

The accounting principles used to calculate the pension provision under IFRS are different from those of the Austrian Business Code. These are listed in detail in IAS 19. Overall, the individual differences result in greater detail than under the Austrian Business Code. This is most notably the result of the use of the projected unit credit method and of the anticipation of future demographic and economic developments.

Deferred taxes

Deferred tax assets and liabilities are to be created according to IAS 12 for temporary differences arising from the comparison of a stated asset or an obligation using the respective taxable value. This results in anticipated future tax burdens or relief on taxes on income (temporary differences), which are to be reported regardless of the date of their liquidation. According to Austrian commercial law, deferred taxation is only permissible as a result of a temporary difference between the commercial balance sheet profit and the income calculated according to the tax regulations.

Moreover, according to IAS, deferred taxes for accumulated losses brought forward and not yet used are to be capitalised to the extent that they can be used in the future with adequate probability.

Management and Supervisory Board members

Management Board

Chairman Konstantin Klien, Vienna

Members

Hannes Bogner, Vienna Andreas Brandstetter, Vienna Karl Unger, Teesdorf Gottfried Wanitschek, St. Margarethen

All members of the Management Board are appointed until 30 September 2010.

Supervisory Board

Chairman

Christian Konrad, Vienna, appointed from 29 June 1990 until the 8th AGM in 2007

  • Chairman of the Supervisory Board of AGRANA Beteiligungs-Aktiengesellschaft, Vienna
  • Member of the Supervisory Board of DO & CO Restaurants & Catering Aktiengesellschaft, Vienna
  • Member of the Supervisory Board of BAYWA AG, Munich
  • Vice Chairman of the Supervisory Board of Südzucker AG Mannheim/Ochsenfurt, Mannheim

First Vice Chairman

Klaus Braunegg, Vienna, appointed from 18 December 1996 until 15 May 2006

First Vice Chairman of the Supervisory Board of Sparkassen Immobilien Aktiengesellschaft, Vienna

Herbert Schimetschek, Vienna, appointed from 15 May 2006 until the 8th AGM in 2007

Member of the Board of Directors of SCOR, Paris

Second Vice Chairman

Walter Rothensteiner, Vienna, appointed from 3 July 1995 until the 8th AGM in 2007

Chairman of the Supervisory Board of Raiffeisen International Bank-Holding AG, Vienna

Third Vice Chairman

Heinz Kessler, Vienna, appointed from 17 September 1999 until the 8th AGM in 2007

  • Chairman of the Supervisory Board of Erste Bank der oesterreichischen Sparkassen AG, Vienna
  • Vice Chairman of the Supervisory Board of Rath Aktiengesellschaft, Vienna

Fourth Vice Chairman

Georg Doppelhofer, Graz, appointed from 25 June 2001 until 15 May 2006

Karl Waltle, Bregenz, appointed from 25 June 1996 until 18 December 1996 and since 17 September 1999 until the 8th AGM in 2007

Fifth Vice Chairman

Ewald Wetscherek, Vienna, appointed from 17 September 1999 until the 8th AGM in 2007

Members

Dietrich Blahut, Vienna, appointed from 17 September 1999 until 15 May 2006

Konrad Fuchs, Maria Enzersdorf, appointed from 17 September 1999 until the 8th AGM in 2007

Christian Kuhn, Vienna, appointed from 15 May 2006 until the 8th AGM in 2007

Markus Mair, Graz, appointed from 15 May 2006 until the 8th AGM in 2007

Peter Püspök, Perchtoldsdorf, appointed from 17 September 1999 until the 8th AGM in 2007

Member of the Supervisory Board of Österreichische Elektrizitätswirtschafts-Aktiengesellschaft, Vienna

Günther Reibersdorfer, Salzburg, appointed from 23 May 2005 until the 8th AGM in 2007

Georg Winckler, Vienna, appointed from 17 September 1999 until the 8th AGM in 2007

First Vice Chairman of the Supervisory Board of Erste Bank der oesterreichischen Sparkassen AG, Vienna

Assigned by the Central Employee Council Doris Böhm, Strasshof

Hans Hahnen, Absam

Franz Michael Koller, Graz

Friedrich Lehner, Gunskirchen

Walter Vock, Gumpoldskirchen

Walter Zwiauer, Vienna

All selected members of the Supervisory Board have declared their independence under rule 53 of the Austrian Corporate Governance Code. The Supervisory Board appointments in domestic and foreign listed companies are given.

Committees of the Supervisory Board

Committee for Board Affairs

Christian Konrad (Chairman)

Klaus Braunegg (until 15 May 2006)

Herbert Schimetschek (from 15 May 2006)

Walter Rothensteiner

Heinz Kessler

Working Committee

Christian Konrad (Chairman)

Klaus Braunegg (until 15 May 2006)

Herbert Schimetschek (from 15 May 2006)

Walter Rothensteiner

Heinz Kessler

Georg Doppelhofer (until 15 May 2006)

Karl Waltle (from 15 May 2006)

Ewald Wetscherek

Assigned by the Central Employee Council Doris Böhm

Franz Michael Koller

Walter Zwiauer

Audit Committee

Christian Konrad (Chairman)

Klaus Braunegg (until 15 May 2006)

Herbert Schimetschek (from 15 May 2006)

Walter Rothensteiner

Heinz Kessler

Georg Doppelhofer (until 15 May 2006)

Karl Waltle (from 15 May 2006)

Ewald Wetscherek

Assigned by the Central Employee Council Doris Böhm

Franz Michael Koller

Walter Zwiauer

Investment Committee

Peter Püspök (Chairman)

Konrad Fuchs (Vice Chairman)

Karl Waltle

Georg Winckler

Assigned by the Central Employee Council Doris Böhm

Walter Zwiauer

Risk report

The nature of an insurance company is to take on risks in return for premium payments. However, these risks arising from the insurance business are only part of the risks which can arise within an insurance company. In addition, to general technical risks, there are also financial, operational and management risks. The term external risks refers to those risks that cannot be influenced by the insurance business.

In order to identify, measure, aggregate and control all risks, a UNIQA risk management system was created which is in use in all operating companies in Austria. This system is also used in Germany, Slovakia, the Czech Republic, Italy and Hungary. The remaining countries of the UNIQA Group will introduce this system during the course of 2007.

The risk management process is centrally controlled and operated by the respective actuary departments. These are responsible for the documentation of all risks that could significantly jeopardise the continued existence of the company or the insurance business. They also report quarterly to the Management Board regarding the risk situation of the company. Ad-hoc information is also provided where necessary. Asset liability management is performed annually in the life insurance segment, and the analyses of stress tests are included in the report on a quarterly basis.

Promoters, who can be described as responsible for an area, are tasked with documenting all risks that concern their segment. The actual assessment of the risks is performed by assessors. The assessment is followed by a check by both the promoter and risk management.

Amongst other aspects, the level of risk and probability of occurrence are documented for each risk. Multiplying these two values together gives the risk potential. Each scenario that corresponds to the highest risk potential is used when assessing the risk.

The risk potential is also a figure that allows for comparing risks. This guarantees that risks with a high probability of occurrence and risks with a high level of risk are considered to be major risks.

Management of actuarial and financial risks

1. Actuarial risks

The risk of an insurance contract is the occurrence of the insured event. By definition the occurrence of this risk takes place by chance and is, therefore, unpredictable. Using the law of large numbers, the risk can be calculated for a sufficiently large insurance portfolio. The larger the portfolio consisting of similar insurance policies, the more accurately the result (loss) can be estimated. For this reason, insurance companies strive for growth.

Premiums earned (gross) € 000
2006 4,500,985
2005 4,354,341
2004 3,613,794
2003 3,016,185
2002 2,636,938
2001 2,636,777

The principle of insurance is built on the law of large numbers: only a few of those at risk will actually suffer a loss. For the individual, the occurrence of loss is uncertain; for the collective, however, it is largely determined. The loss-bearing and loss-free risks theoretically cancel each other out. The actuarial risk now exists in the danger that the actual claims for a certain period deviate from those expected. This risk can be divided into the chance risk, the change risk and the error risk.

The chance risk means that higher than expected losses can occur by pure chance. Amongst other things, the change risk means that unforeseen changes to the risk factors have an impact on the actual loss payments. The error risk comes about from deviations arising through incorrect assessment of the risk factors.

1.1. Property insurance

The total customer perspective already introduced should be further strengthened within the UNIQA Group in the future. When implementing sales campaigns, actuarial calculations that include the associated risks are utilised.

For reasons of turnover, the discounting capacity of Sales is generally entirely exhausted. A risk could also arise through further relocation of discounting competence to Sales. Constant analyses of the use of discounts and the exhausting of the discount capacity are performed to counteract this risk. The total discounting capacity is determined centrally by using various key figures and is then divided amongst the individual regional

offices. Because revenue components are also built into the various compensation systems, any use of discounts that reduces revenue would have a direct impact on income. There are also discount limits that are based on the risk and customer criteria.

Reinsurance policies reduce the retained earnings of the initial insurer and lead to a smoothing of results. On the one hand, they can lead to a reduction of the claim ratio in retained earnings in the event of extraordinary events; on the other, a good level of claims can worsen the claim ratio in retained earnings. The aim of an optimal reinsurance strategy is to find a structure that takes both of these points into consideration.

Claims ratio (gross) %
2006 64.3
2005 66.7
2004 64.1
2003 68.9
2002 77.3
2001 73.7

With regard to unexpected claims, risk management makes assessments on elemental, major and cumulative losses in the areas of storms, floods and earthquakes that are based on accepted scenarios. Reinsurance policies considerably reduce the levels of possible losses. Due to the possibility of the failure of reinsurers, the reinsurance structure of the UNIQA Group is described below.

For the exact determination of the reserve risk and premium risk, an internal model is implemented that indicates the risk based on the fundamental portfolio structure, the current reinsurance programme and future developments. Detailed information regarding the future development of mass, major and catastrophic damages, calculated on the basis of historic data, are used as the basis for this. This makes it possible to identify developments at an early point and take direct measures (structuring of premiums and scopes of coverage, adaptation of reinsurance structures) to minimise the risk and control financial results.

Excursus: reinsurance

The total obligatory reinsurance requirement of operating UNIQA companies is covered with reinsurance policies at UNIQA Versicherungen AG or UNIQA Re. UNIQA Versicherungen AG in Vienna is the sole reinsurer of Austrian UNIQA companies, while UNIQA Re in Zurich acts as sole risk bearer for international UNIQA companies.

Between 50% and 60% of the entire portfolio are covered by these reinsurance policies. Ratio figures, which, depending upon the volatility of the respective insurance branch, reach between 25% and 90%, are supplemented with excess loss policies. Two cumulative excess loss policies also exist which should cover major losses across the insurance branch ("umbrella") incurred through natural disasters (earthquakes, flooding, high water, storm, etc.)

In 2004, we also created our own reinsurance line on a nonproportional basis for the large industrial business of all Group companies. This includes major risks in various branches of industrial insurance according to precise earnings limits and includes general liability insurance.

UNIQA Insurer AG and UNIQA Re pool the business acquired by the Group companies according to insurance branches and pass gross excess loss policies, which are supplemented by net ratios, on to international reinsurers as a "bouquet". The reinsurance structure, the conditions, the shares and all reinsurance partners in this bouquet are identical for both companies. The reinsurance policy is fully placed.

The effect of the reinsurance programme on the claims ratio in retained earnings can be seen in the following table:

Claims ratio (retained earnings) %
2006 66.0
2005 68.0
2004 65.6
2003 69.8
2002 76.0
2001 73.0

The table below shows the reinsurance requirements for outstanding claims and incurred but not reported claims arranged according to ratings. This concerns the reinsurance business ceded by domestic subsidiaries and UNIQA Re from the property insurance lines to companies outside the Group. The cessions of international subsidiaries and the IWD portion of co-insurance are not included.

31 Dec. 2006
Rating € 000
AAA 4,813
AA 110,857
A 98,323
BBB* 13,609
Not rated 3,705

* "Long Tail" reserves are secured with security deposits.

The creditworthiness of reinsurers is also very important, not least because of the long duration of claim settlement in the area of general liability insurance and motor vehicle liability insurance.

The problem of duration in reinsurance (initial insurance policies are often multi-year, while reinsurance policies are taken out for only one year) is primarily held in check by the reinsurance team, which controls this risk. Systematic analyses, supported by actuarial methods, are used to assess the appropriateness of the actuarial provisions.

In addition to the elemental lines, the commercial property business also includes liability and technical insurance. The UNIQA Group divides this into three areas:

  • Standardised bundled policies for small commercial businesses.
  • Customised policies for medium-sized companies; however, the scope of coverage and exposure of these policies are such that they can be accepted decentrally in the Austrian regions and international subsidiaries.
  • Large policies, or policies with a complicated scope of coverage, are decided on and arranged centrally both in Austria and for the international subsidiaries. These policies are selected according to quantitative criteria (e.g. €2 million insured sum in property insurance) as well as by content-based, qualitative criteria, such as asset damage coverage in the liability insurance.

Since 2004, the top risks (e.g. over €10.9 million probable maximum loss in property insurance) have been covered by our own, non-proportional reinsurance policy outside of the obligatory reinsurance. A team of experts at the International Desk in Vienna decides on the contribution to this policy for the entire Group.

In the property segment, major risks are evaluated for risk prior to acceptance and subsequently at regular intervals, and documented in survey reports. In the liability insurance line, the portfolio for high-level risks is subject to permanent monitoring (e.g. planning risks and liability insurance in the medical segment).

The industry holdings of the international companies are regularly analysed for their exposure and composition (risk mix), and survey reports on the exposed risks are prepared.

1.2. Life insurance

The risk of an individual insurance contract lies in the occurrence of the insured event. The occurrence is considered random and, therefore, unpredictable. The insurance company takes on this risk for a corresponding premium. When calculating the premium, the actuary refers to the following carefully selected bases of calculation:

  • Interest: The actuarial interest is set so low that it can be produced with certainty in each year.
  • Mortality: The probabilities of dying are deliberately and carefully calculated for each type of insurance.
  • Costs: These are calculated in such a way that the costs incurred by the policy can be permanently covered by the premium.

Careful selection of the bases of calculation gives rise to scheduled profits, an appropriate amount of which is credited to the policyholders as part of profit sharing in accordance with the profit plan.

The calculation of the premium is also based on the acceptance of a large, homogenous inventory of independent risks, so that the randomness inherent in an individual insurance policy is balanced out by the law of large numbers.

The following risks exist for a life insurance company:

  • The bases of calculation prove to be insufficient despite careful selection.
  • Random fluctuations prove disadvantageous for the insurer.
  • The policyholder exercises certain implicit options to his advantage.

The risks of the insurer can be divided into actuarial and financial risks.

Capital and risk insurance

UNIQA's portfolio consists primarily of long-term insurance policies. Short-term assurances payable at death play a minor role.

In the following table, the number of insurance policies is divided by rate groups and insured sums, and takes into consideration the companies of UNIQA Personenversicherung AG, Raiffeisen Versicherung AG, Salzburger Landes-Versicherung and CALL DIRECT Versicherung AG.

Number of insurance policies as at 31 Dec. 2006 Deferred Liquid
Capital retirement retirement Risk
Category* insurance annuity annuity insurance
€0 to €20,000 1,272,818 86,818 14,260 174,619
€20,000 to €40,000 282,672 40,181 229 37,284
€40,000 to €100,000 111,480 22,549 50 123,879
€100,000 to €200,000 12,486 3,740 1 61,922
> €200,000 2,836 1,169 0 8,545

* Capital and risk insurance policies are based on the insured sum, for deferred pension annuities the redemption capital is included at maturity, for liquid pension annuities the category refers to the annuity.

Mortality

Insurance policies with an assurance character implicitly include a safety surcharge on the risk premium, in that the premium calculation is based on an accounting table (the Austrian Mortality Table for 1990/92 or for 2000/02).

Using risk selection (health examinations) means that the mortality probabilities of the portfolio are consistently smaller than those of the overall population; in addition, the advancement of mortality means that the real mortality probabilities are consistently smaller than the values shown in the accounting table.

Homogeneity and independence of insurance risks

An insurance company takes great pains to compose a portfolio of the most homogenous, independent risks possible, in accordance with the classic, deterministic approach to calculating premiums. Because this is virtually impossible in practice, a considerable risk arises for the insurer due to random fluctuations, in particular, from the outbreak of epidemic illnesses (AIDS, SARS, bird flu, etc.), as not only could the calculated mortality probabilities prove to be too low, but the independence of the risks can also no longer be assumed.

Cumulative risks contained in the portfolio can be reduced by using reinsurance contracts. As the first reinsurer, UNIQA Versicherungen AG operates with a retained risk of €200,000 per insured life; the excesses are mostly reinsured with Swiss Re, Münchener Rück and Gen Re. A catastrophic excess (CAT-XL) contract is also held with Swiss Re, although it excludes losses resulting from epidemics.

Antiselection

The portfolios of Raiffeisen Versicherung AG and UNIQA Personenversicherung AG contain large inventories of risk insurance policies with a premium adjustment clause. This allows the insurer to raise premiums in the event of a (less probable) worsening of the mortality profile. However, this presents the danger of possible antiselection behaviour: policies for good risks tend to be terminated while worse ones remain in the portfolio.

Retirement annuities

Mortality

The reduction of mortality probabilities represents a large uncertainty for retirement annuities. The advancement of mortality as a result of medical progress and changed lifestyles is virtually impossible to extrapolate.

Attempts to predict this effect were made when producing the generation tables; however, such tables exist only for the Austrian population. This data cannot be applied to other countries. Moreover, the past shows that the effect of these changes was seriously underestimated, so that subsequent reservations had to be made for retirement annuity contracts. For retirement annuity contracts in the qualifying period, a lump sum provision was formed; for liquid pensions, a subsequent reservation was made corresponding to the altered conditions of the long lifetime risk.

Antiselection

The right to choose annuity pensions for deferred retirement annuities also results in antiselection. Only those policyholders that feel very healthy opt for annuity payment, while all others choose partial or full capital payment; in this way, the retirement portfolio tends to consist mostly of healthier people, i.e. worse risks, overall, than the population average.

This phenomenon is countered by corresponding modifications to the retirement mortality tables. A further possibility exists in the requirement that the intention to exercise the right to choose annuity payments must be announced no later than one year in advance of the expiration.

Financial risks

The actuarial interest that may be used in the calculation for writing new business is based on the maximum interest rate ordinance, and currently amounts to 1.75% per annum ("Lebensaktie", "Zukunftsplan") or 2.25% per annum (other life insurance policies). However, the portfolio also contains older contracts with actuarial interest of up to 4.0% per annum, while the average rate for the portfolio is 2.92 %.

As these interest rates are guaranteed by the insurance company, the financial risk lies in not being able to generate these returns. As classic life insurance predominantly invests in interest bearing titles (loans, credits, etc.), the unpredictability of long-term interest rate trends is the most significant financial risk for a life insurance company. The interest risk weighs especially heavily on retirement annuities, as these concern extremely long-term policies.

The interest risk functions in the following ways:

Investment and reinvestment risk

Premiums that are paid in the future must be invested at an interest rate guaranteed at the time the policy is taken out; however, it is entirely possible that no corresponding securities are available at the time the premium is paid. In the same way, future income must be reinvested at the actuarial interest rate.

Ratio of assets to liabilities

For practical reasons, the goal of duration matching cannot be fully achieved on the assets and liability side. The duration of assets is between five and six years, while that of liabilities is considerably larger. This creates a duration gap that reduces the ratio of assets to liabilities in the event of falling interest rates.

Value of implicit options

Life insurance policies contain implicit options that can be exercised by the policyholder. While the possibilities of partial or full buy-back, or the partial or full release of premiums, in fact, represent financing options; these options are not necessarily exercised as a consequence of correct, financially rational decisions. However, in the case of a mass buy-back (e.g. due to an economic crisis), this represents a considerable risk to the insurance company.

The question of whether a capital or annuity option should be exercised is, in addition to subjective motives of the policyholder, also characterised by financially rational considerations; depending on the final interest level, a policyholder will opt for the capital or the annuity, so that these options represent a considerable (cash) value for the policyholder, and therefore, a corresponding risk for the insurer.

The guarantee of an annuitising factor represents another financial risk. Here, the insurance company guarantees to annuitise a sum unknown in advance (namely the value of the fund shares at maturity) in accordance with an interest rate and a mortality table set at the time the policy is taken out (the latter risk is not only financial).

Besides these technical and financial risks, the cost risk must also be mentioned. For the term of the policy, the insurer guarantees only to withdraw the calculated costs. The business risk here is that the cost premiums are insufficient (e.g. due cost increases resulting from inflation).

1.3. Health insurance

Health insurance is a type of insurance that takes biometric risks into account within its calculations and which must be operated according to the "type of life insurance" in Austria. Terminations by the insurer are not possible except in the case of obligation violations by the insured. Premiums must therefore be calculated in such a way that they are sufficient to cover the insurance benefits that generally increase with age, assuming probabilities that remain constant. The probabilities and cost structures can change frequently over time. For this reason, it is possible to adjust the premiums for health insurance as necessary to the changed bases of calculation.

When taking on the risks, the existing risk of the persons is also evaluated. If it is established that an illness already exists for which the cost risk is expected to be higher than for the calculated portfolio, then either this illness is excluded from the policy, an adequate risk surcharge is demanded or the risk is not underwritten.

In health insurance, assurance coverage ("ageing provision") is built up through calculation according to the "type of life insurance" and reduced again in later years because this is used to finance an ever larger part of the benefits that increase with age.

The actuarial interest rate for this actuarial provision is a prudent 3%, so that the investment risk of health insurance in Austria is relatively low. If it were expected that 3% could no longer be obtained in future, this fact would have to be taken into account for future benefits and included in the premium adjustment.

The operational risks are extensively determined by the IT architecture and by errors that can arise from the business processes (policy formulation, risk assessment and benefit calculation). These risks should be kept to a minimum by using risk management.

The legal risks arise primarily from the effects that changes to legislation have on the existing private health insurance business model. This includes, in particular, changes to the legal framework that make it harder or impossible to adapt to changed circumstances or sharply reduce the income opportunities. Developments in this area will be observed by the insurance association, and, where necessary, an attempt will be made to react to negative developments from the perspective of the private health insurer.

2. Financial risks

For numerous insurance products, a calculatory interest rate is taken into consideration for the investment period between expected deposit and expected payout. The risk, therefore, lies in a deviation between the expected or calculated interest and the return on capital actually achieved on the capital market. The main components of these capital market risks are:

  • Interest rate change risk: possible losses caused by a change in the level and term-based structure of interest rates.
  • The share risk: possible losses due to price performance on the stock markets caused by macroeconomic and companyrelated changes.
  • The credit risk: possible losses caused by the inability to pay or the worsening creditworthiness of debtors or contractual partners.
  • The currency risk: possible losses caused by changes in exchange rates.
  • The liquidity risk: the danger of not having sufficient liquid funds on the date of scheduled payout.

The financial risks have different weightings and various degrees of seriousness, depending on the investment structure. However, the effects of the financial risks on the value of the investments also influence the level of technical liabilities to some extent.

There is, therefore, a partial dependence between the growth of assets and debts from insurance policies. UNIQA monitors the income expectations and risks of assets and liabilities arising from insurance policies as part of an Asset-Liability Management (ALM) process. The aim is to achieve a return on capital that is sustainably higher than the updating of the technical liabilities while retaining the greatest possible security. Here, assets and debts are allocated to different accounting groups. The following table shows the most important accounting groups that arise from the different product categories.

Investments 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Long-term life insurance policies with
guaranteed interest and profit sharing 13,943,506 12,988,283
Long-term unit-linked and index-linked
life insurance policies 1,952,897 1,492,241
Long-term health insurance policies 2,083,161 2,042,431
Short-term property and casualty insurance
policies 3,438,782 3,036,411
Total 21,418,346 19,559,365
Technical provisions and liabilities 31 Dec. 2006 31 Dec. 2005
(retained) € 000 € 000
Long-term life insurance policies with
guaranteed interest and profit sharing 13,713,127 12,958,338
Long-term unit-linked and index-linked life
insurance policies 1,911,516 1,457,692
Long-term health insurance policies 2,224,055 2,085,526
Short-term property and casualty insurance
policies 1,918,533 1,798,359

2.1. Interest rate change risk

Due to the investment structure and the high proportion of interest bearing titles, the interest rate risk forms a very important component of the financial risks. The following table shows the interest-bearing securities and the average interest coupons arranged by the most important investment categories and their average coupon interest rate on the reporting date.

Average interest coupon USD Other
in % 2006 2005 2006 2005 2006 2005
Fixed interest securities
High-grade loans 4.05 4.31 4.95 4.39 5.06 4.90
Bank/company loans 4.75 4.55 7.50 5.76 3.97 4.04
Emerging markets loans 7.61 6.86 7.82 7.98 8.17 7.02
High-yield loans 6.30 6.50 8.07 8.10 6.51 8.59
Other investments 4.08 3.80 3.19 3.19
Fixed interest liabilities
Subordinated liabilities 5.34 5.49
Guaranteed interest life insurance 2.92 3.00
Debenture bonds 4.00 4.00

Long-term policies and life insurance policies with guaranteed interest and profit sharing

Insurance policies with guaranteed interested and additional profit sharing contain the risk that the guaranteed interest rate will not be achieved over a sustained period of time. Capital income produced over and above the guaranteed interest rate will be shared between the policyholder and the insurance company, with the policyholder receiving an appropriate share of the profit. The following table shows the comparison of assets and debts for such insurance policies.

Investments for long-term life insurance
policies with guaranteed interest and 31 Dec. 2006 31 Dec. 2005
profit sharing € 000 € 000
Annuities 10,213,018 9,226,366
Shares 1,164,251 1,289,589
Alternatives 810,089 747,333
Holdings 82,711 80,807
Loans 302,187 459,568
Real estate 642,796 418,435
Liquidity 635,751 682,481
Deposits receivable 92,702 83,704
Total 13,943,506 12,988,283
Difference between book value and market
value of land and buildings 163,867 144,589
Provisions and liabilities from long-term
life insurance policies with guaranteed 31 Dec. 2006 31 Dec. 2005
interest and profit sharing € 000 € 000
Actuarial provision 12,541,017 11,710,531
Provision for profit-unrelated premium
refunds 13 0
Provision for profit-related premium
refunds and profit sharing 687,165 798,463
Other technical provisions 15,239 17,383
Provision for outstanding claims 90,982 80,914
Deposits payable 378,712 351,046
Total 13,713,127 12,958,338

The following table shows the structure of the remaining terms of interest-bearing securities and loans.

Remaining term 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
< 1 year 688,828 295,986
> 1 year to < 3 years 1,546,677 1,137,819
> 3 years to < 5years 1,400,020 1,415,906
> 5 years to < 7 years 1,923,959 2,596,612
> 7 years to < 10years 1,786,409 1,768,978
> 10 years to < 15years 1,392,811 1,179,110
> 15 years 1,774,369 1,291,522
Total 10,513,073 9,685,934

The capital-weighted average remaining term of technical liabilities is around 8.5 years (2005: 8.4 years).

Long-term unit-linked and index-linked life insurance policies

In the segment of unit- and index-linked life insurance, the interest income and all fluctuations in value of the dedicated investments are reflected in the technical provisions. There is, therefore, no financial risk from the point of view of the insurer. The following table shows the investment structure of financial investments that are used to cover the technical provisions arising from unit-linked and index-linked life insurance policies.

Investments in unit-linked and 31 Dec. 2006 31 Dec. 2005
index-linked life insurance policies € 000 € 000
Share-based funds 672,620 493,872
Bond funds 1,236,337 959,076
Liquidity 43,939 38,916
Other investments 1 377
Total 1,952,897 1,492,241

Long-term health insurance policies

The actuarial interest rate for the actuarial provision in health insurance lines, which is selected depending on the type of life insurance, is 3%. However, this interest rate is not guaranteed and can, upon presentation of proof to the Insurance Supervisory Authority, be reduced to a lower capital income that may be expected. The following table shows the investment structure available to cover insurance liabilities.

Investments for long-term 31 Dec. 2006 31 Dec. 2005
health insurance policies € 000 € 000
Annuities 1,154,135 1,017,857
Shares 133,201 186,545
Alternatives 96,335 66,203
Holdings 27,476 36,450
Loans 303,746 354,320
Real estate 195,770 203,327
Liquidity 172,499 177,728
Total 2,083,161 2,042,431
Difference between book value and market
value of land and buildings 231,861 228,118
Provisions and liabilities from long-term 31 Dec. 2006 31 Dec. 2005
health insurance policies € 000 € 000
Actuarial provision 1,972,628 1,839,393
Provision for profit-unrelated premium
refunds 20,793 18,546
Provision for profit-related premium refunds
or profit sharing 57,191 56,612
Other technical provisions 5,916 1,070
Provision for unearned premiums 14,959 13,918
Provision for outstanding claims 150,725 154,010
Deposits payable 1,842 1,976
Total 2,224,055 2,085,526

Property and casualty insurance policies

Most property and casualty insurance policies are short-term. Due to the short investment term, there is naturally a lower risk arising from financial risks. The technical provisions are not discounted, so that no interest is calculated for the short-term investment. The average terms of interest-bearing securities and loans invested to cover technical provisions is shown in the following table.

Remaining term 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
< 1 year 203,409 248,346
> 1 year to < 3 years 261,545 233,004
> 3 years to < 5 years 304,229 263,930
> 5 years to < 7 years 509,274 262,948
> 7 years to < 10 years 471,467 394,218
> 10 years to < 15 years 163,883 335,564
> 15 years 163,397 132,542
Total 2,077,205 1,870,551

The investment structure in the property and casualty insurance is as follows.

Investments for short-term property and 31 Dec. 2006 31 Dec. 2005
casualty insurance policies € 000 € 000
Annuities 1,426,894 1,511,366
Shares 166,185 156,721
Alternatives 80,184 36,955
Holdings 624,072 364,501
Loans 428,111 359,187
Real estate 441,872 457,345
Liquidity 258,489 136,414
Deposits receivable 12,975 13,922
Total 3,438,782 3,036,411
Difference between book value and market
value of land and buildings 150,996 143,320
Provisions and liabilities from short-term 31 Dec. 2006 31 Dec. 2005
property and casualty insurance policies € 000 € 000
Provision for unearned premiums 343,997 308,686
Actuarial provision 44,550 50,231
Provision for outstanding claims 1,458,607 1,370,935
Provision for profit-unrelated premium
refunds 26,907 23,220
Provision for profit-related premium refunds
or profit sharing 8,191 8,443
Other technical provisions 19,651 19,350
Deposits payable 16,630 17,493
Total 1,918,533 1,798,359

The average policy term in property and casualty insurance is between three and five years.

2.2. Share risk

When investing in stock markets, the risk is diversified by using various management styles (total-return approach, benchmarkoriented approach, value growth approach and industry- and region-specific and fundamental title selection). For the purpose of securing the investment, the effective investment ratio is controlled through the use of derivate financial instruments. The following table shows the investment structure of the share portfolios by asset classes:

Share portfolio composition 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Shares in Europe 649,588 781,476
Shares in America 85,456 113,936
Shares in Asia 128,591 193,380
Shares international1) 1,401 69,582
Shares in emerging markets 142,316 195,232
Shares total return2) 401,580 263,194
Other shares 56,200 16,057
Total 1,465,133 1,632,855

1) Share-based funds with globally diversified investments.

2) Share-based funds with the management goal of achieving an absolute return by including less risky investments (liquidity, bonds) in difficult market phases.

2.3. Credit risk

When investing in securities, we invest in debt securities of varying quality, taking into consideration the yield prospects and risks. The following table shows the quality structure of fixedinterest investments.

Rating 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
AAA 3,603,331 3,441,215
AA 3,603,847 2,896,111
A 3,110,333 2,438,287
BBB 1,029,342 906,437
BB 1,082,315 1,095,305
B 381,519 94,578
CCC 51,308 76,352
Not rated 150,871 807,304
Total 13,012,867 11,755,589

2.4. Currency risk

The UNIQA Group invests in securities in a wide range of currencies. Although the insurance business is operated in different countries, the foreign currency risks of the investments do not always correspond to the currency risks of the technical provisions and liabilities. The most significant currency risk is in USD. The following table shows a breakdown of assets and debts by currency.

The fair value of securities investments in USD amounted to €2.532 million as at 31 December 2006. The exchange rate risk was reduced using derivative financial instruments to €101 million, while the safeguard ratio was 96.0%. The safeguard was maintained in a range of between 66% and 98% during the financial year.

31 Dec. 2006
in € 000 USD Others Total
Assets
Investments 19,622,362 101,067 1,694,917 21,418,346
Other tangible assets 100,264 10,849 111,113
Intangible assets 1,097,655 66,006 1,163,661
Share of reinsurance in the technical provisions 953,174 93,353 1,046,527
Other assets 733,552 113,931 847,483
Total assets 22,507,007 101,067 1,979,056 24,587,131
Provisions and liabilities
Subordinated liabilities 475,000 475,000
Technical provisions 19,176,359 934,634 20,110,993
Other provisions 708,052 14,267 722,319
Liabilities 1,831,926 117,108 1,949,035
Total liabilities 22,191,337 1,066,009 23,257,347
31 Dec. 2005
in € 000
USD Others Total
Assets
Investments 17,637,935 431,797 1,489,633 19,559,365
Other tangible assets 126,285 9,014 135,299
Intangible assets 1,028,736 51,008 1,079,744
Share of reinsurance in the technical provisions 893,737 99,637 993,374
Other assets 718,912 81,698 800,610
Total assets 20,405,605 431,797 1,730,990 22,568,392
Provisions and liabilities
Subordinated liabilities 325,000 325,000
Technical provisions 17,939,377 727,644 18,667,021
Other provisions 691,091 7,866 698,957
Liabilities 1,641,124 102,615 1,743,739
Total liabilities 20,596,592 838,125 21,434,718

2.5. Liquidity risk

The UNIQA Group must satisfy its payment obligations on a daily basis. For this reason, a precise liquidity schedule for the immediately following months is used, and a minimum liquidity holding is defined by the Management Board and is available as a cash reserve on a daily basis. Additional underwriting obligations exist for private equity investments in the amount of €202.0 million. Obligations of €90.0 million result from multitranche loans.

2.6. Sensitivities

The risk management for investments is done in a structured investment process, in which the various market risks are controlled at the levels of the selection of a strategic asset allocation, the tactical weighting of the individual asset classes depending on market opinion and in the form of timing and selection decisions. In particular, stress tests and sensitivity analyses are used as key figures for measuring, observing and actively controlling the risk.

The table below shows the most important market risks in the form of key sensitivity figures; these are details available on the reporting date and, therefore, represent rough figures for future losses of fair value. The key figures are calculated theoretically on the basis of actuarial principles and do not take into consideration any diversification effects between the individual market risks or counter-controlled measures taken in the various market scenarios.

Interest rate change risk 31 Dec. 2006 31 Dec. 2005
in € 000 +100 base points –100 base points +100 base points –100 base points
High grade loans –244,381 244,381 –232,091 232,091
Bank/company loans –159,067 159,067 –150,101 150,101
Emerging markets loans –41,857 41,857 –13,116 13,116
High-yield loans –2,027 2,027 –1,728 1,728
Total –447,332 447,332 –397,037 397,037
Share risk 31 Dec. 2006 31 Dec. 2005
in € 000 +10% –10% +10% –10%
Shares in Europe 60,895 –60,895 78,265 –78,265
Shares in America 8,509 –8,509 11,391 –11,391
Shares in Asia 12,468 –12,468 19,450 –19,450
International shares 27 –27 5,855 –5,855
Shares in emerging markets 13,875 –13,875 19,536 –19,536
Shares total return 39,967 –39,967 26,319 –26,319
Derivative financial instruments and other shares –18,851 34,151 –4,849 4,849
Total 116,890 –101,590 155,968 –155,968
Currency risk 31 Dec. 2006 31 Dec. 2005
in € 000 +10 % –10 % +10 % –10 %
0 0 0 0
USD 9,569 –9,569 43,180 –43,180
Other 141,597 –141,597 144,333 –144,333
Total 151,166 –151,166 187,512 –187,512
Quality risk 31 Dec. 2006 31 Dec. 2005
in € 000 Change to spread + +
AAA 0 base points 0 0 0 0
AA 25 base points –41,493 41,493 –42,490 42,490
A 50 base points –64,780 64,780 –63,536 63,536
BBB 75 base points –65,987 65,987 –69,130 69,130
BB 100 base points –67,275 67,275 –53,275 53,275
B 125 base points –21,536 21,536 –7,017 7,017
CCC 150 base points –5,156 5,156 –2,613 2,613
Not rated 100 base points –7,222 7,222 –2,183 2,183
Total –273,448 273,448 –240,244 240,244

Value at risk

The overall market risk of the investment portfolio is determined on the basis of the value-at-risk approach. The key figure is calculated for a confidence interval of 95% and a holding term of one year. The basic data is in the form of historical figures from the last calendar year and a balancing of the individual values (decay factor of 1).

The following table shows the key value at risk figures for the last financial year as reporting date values, annual average and maxima/minima for the year.

Value at risk Total value at risk
€ 000
Share risk
€ 000
Currency risk
€ 000
Interest risk
€ 000
Diversification
€ 000
31 Dec. 2006 514,686 194,216 61,579 432,430 –173,539
31 Dec. 2005 746,000 131,000 102,000 741,000 –229,000
Lowest 480,245 194,216 59,086 392,192 –173,539
Average 523,467 221,224 64,737 439,755 –202,249
Highest 594,831 248,796 72,350 528,187 –248,406

Supplementary information on the consolidated balance sheet 2006

Development of asset items

Balance sheet Currency Additions Unrealised capital
values 2005 differences gains and losses
€ 000 € 000 € 000 € 000
A.
Tangible assets
I.
Self-used land and buildings
236,388 1,090 18,380 0
II.
Other tangible assets
1. Tangible assets 47,842 171 14,052 0
2. Inventories 7,296 0
3. Other assets 80,160 0
Total A.II. 135,299 171 14,052 0
Total A. 371,686 1,261 32,431 0
B.
Land and buildings held as financial investments
856,351 1,408 106,905 0
C.
Intangible assets
I.
Deferred acquisition costs
807,297 620 209,414 0
II.
Goodwill
1. Positive goodwill 152,386 0 38,158 0
2. Value of insurance policies 71,032 –10 0 0
Total C.II. 223,418 –10 38,158 0
III. Other intangible assets
1. Self-produced software 12,955 0 624 0
2. Acquired intangible assets 36,074 84 13,671 0
Total C.III. 49,029 84 14,295 0
Total C. 1,079,744 694 261,868 0
D.
Shares in associated companies
219,469 0 94,398 0
E.
Investments
I.
Variable-yield interest securities
1. Shares, investment shares and other variable
yield securities, including holdings and shares in
associated companies 3,080,919 464 3,381,076 229,931
2. At fair value through profit or loss 881,383 0 675,864 0
Total E.I. 3,962,302 464 4,056,940 229,931
II.
Fixed interest securities
1. Debt securities and other fixed interest securities 9,926,273 4,401 6,620,677 –122,881
2. At fair value through profit or loss 515,629 0 112,905 0
Total E.II. 10,441,902 4,401 6,733,582 –122,881
III.
Loans and other investments
1. Loans
a) Debt securities issued by and loans to
associated companies 119 4 0 0
b) Debt securities issued by and loans to
participating interests
792 0 0 0
c) Mortgage loans 172,604 0 28,257 0
d) Loans and advance payments on policies 15,472 2 4,856 0
e) Other loan receivables and registered bonds 968,436 –549 181,864 –11,075
Total E.III. 1. 1,157,424 –544 214,977 –11,075
2. Cash at credit institutions 855,233 2,845 5,840 0
3. Deposits with ceding companies 97,627 –148 16,631 0
Total E.III. 2,110,285 2,153 237,448 –11,075
IV.
Derivatives
48,405 0 126,531 0
Total E. 16,562,894 7,017 11,154,502 95,976
F.
Investments held on account and at risk of
life insurance policyholders
1,492,241 1,356 1,550,575 7,883
Aggregate total 20,582,384 11,736 13,200,678 103,859
Book values Depreciation Appreciation Disposals Transfers Amortisation
for financial year
€ 000
€ 000 € 000 € 000 € 000 € 000
233,997 7,233 0 4,973 –9,654 0
44,608 14,694 56 2,766 –52 0
4,844 2,452
61,661 18,500
111,113 14,694 56 23,718 –52 0
345,110 21,927 56 28,691 –9,706 0
927,456 36,629 0 10,285 9,706 0
863,430 153,901 0 0 0 0
190,545 0 0 0 0 0
62,519
253,064
8,503
8,503
0
0
0
0
0
0
0
0
7,909 5,671 0 0 0 0
39,258 9,826 1 745 0 0
47,167 15,497 1 745 0 0
1,163,661 177,901 1 745 0 0
371,998 4,899 48,782 59,796 74,045 0
3,462,337 53,011 669 3,123,916 –53,797 0
1,025,332 35,797 43,739 539,858 0 0
4,487,668 88,808 44,409 3,663,774 –53,797 0
10,634,769 159,089 1,505 5,608,135 –11,407 –16,575
508,599 7,638 589 104,098 –8,392 –396
11,143,369 166,727 2,094 5,712,233 –19,799 –16,971
80 0 0 43 0 0
792 0 0 0 0 0
178,956 5,111 2,399 18,833 –361 0
15,400 0 0 4,929 0 0
838,814 3,172 0 297,051 361 0
1,034,044 8,283 2,399 320,855 0 0
802,106 3,105 0 58,707 0 0
105,678 0 0 8,432 0 0
1,941,827 11,389 2,399 387,994 0 0
95,970
17,668,834
26,419 58,803 111,349 0 0
293,342 107,704 9,875,350 –73,595 –16,971
1,952,897 3,646 9,816 1,104,877 –450 0
22,429,957 538,344 166,359 11,079,745 0 –16,971

1 | Self-used land and buildings

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Book values for
Property and casualty insurance 104,338 163,506
Life insurance 116,025 58,621
Health insurance 13,635 14,260
233,997 236,388
Market values for
Property and casualty insurance 132,918 188,385
Life insurance 124,789 63,430
Health insurance 18,338 20,043
276,045 271,859
Acquisition values 323,175 323,696
Cumulative depreciation –89,177 –87,309
Book value 233,997 236,388
Useful life for land and buildings 10–80 years 10–80 years
Additions from company acquisition 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Self-used land and buildings 2,087 2,448

The market values are derived from expert reports.

2 | Other tangible assets

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Tangible assets 44,608 47,842
Inventories 4,844 7,296
Other assets 61,661 80,160
Total 111,113 135,299
Tangible assets Group total
Development in financial year € 000
Acquisition values as at 31 Dec. 2005 156,710
Cumulative depreciation up to 31 Dec. 2005 –108,867
Book value as at 31 Dec. 2005 47,842
Currency translation changes 171
Additions 14,052
Disposals –2,766
Transfers –52
Appreciation and depreciation –14,638
Book value as at 31 Dec. 2006 44,608
Acquisition values as at 31 Dec. 2006 159,825
Cumulative depreciation up to 31 Dec. 2006 –115,216
Book value as at 31 Dec. 2006 44,608

Tangible assets refer mainly to office equipment. They are depreciated over a useful life of four to ten years. The amounts of depreciation are recognised in the income statement on the basis of allocated operating expenses under the items insurance benefits, operating expenses and net investment income.

31 Dec. 2006 31 Dec. 2005
Additions from company acquisition € 000 € 000
Tangible assets 1,081 449

3 | Land and buildings held as financial investments

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Book values for
Property and casualty insurance 334,423 384,362
Life insurance 411,829 285,862
Health insurance 181,204 186,127
927,456 856,351
Market values for
Property and casualty insurance 456,839 502,804
Life insurance 566,932 425,911
Health insurance 408,361 408,462
1,432,132 1,337,177
Acquisition values 1,257,256 1,150,615
Cumulative depreciation –329,800 –294,264
Book value 927,456 856,351
Useful life for land and buildings 10–80 years 10–80 years
Additions from company acquisition 31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Land and buildings used by third parties 52,667 303

The market values are derived from expert reports.

31 Dec. 2006
€ 000
Change on impairment for current year 11,451
of which reallocation 11,451

4 | Deferred acquisition costs

2006 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
Situation as at 1 Jan. 97,131 89,209
Currency translation changes 352 630
Changes to scope of consolidation 168 0
Capitalisation 57,065 47,851
Depreciation –44,665 –40,560
Situation as at 31 Dec. 110,050 97,131
Life insurance
Situation as at 1 Jan. 496,159 456,035
Currency translation changes 268 59
Capitalisation 105,867 106,800
Interest surcharge 22,778 25,497
Depreciation –85,643 –92,232
Situation as at 31 Dec. 539,428 496,159
Health insurance
Situation as at 1 Jan. 214,008 192,754
Currency translation changes 1 1
Changes to scope of consolidation 0 20,273
Capitalisation 14,371 15,119
Interest surcharge 9,166 8,468
Depreciation –23,593 –22,608
Situation as at 31 Dec. 213,952 214,008
Consolidated Financial Statements
Situation as at 1 Jan. 807,297 737,998
Currency translation changes 620 690
Changes to scope of consolidation 168 20,273
Capitalisation 177,302 169,770
Interest surcharge 31,944 33,965
Depreciation –153,901 –155,400
Situation as at 31 Dec. 863,430 807,297

5 | Goodwill

Group total
€ 000
Acquisition values as at 31 Dec. 2005 315,826
Cumulative depreciation up to 31 Dec. 2005 –92,408
Book value as at 31 Dec. 2005 223,418
Acquisition values as at 31 Dec. 2006 353,975
Cumulative depreciation up to 31 Dec. 2006 –100,911
Book value as at 31 Dec. 2006 253,064
Group total
€ 000
Cumulative depreciation up to 31 Dec. 2006 100,911
of which relating to impairment 16,648
of which current depreciation 84,263
31 Dec. 2006
€ 000
Change in impairment for current year 0
of which reallocation 0

The values mentioned above include the goodwill and the purchase price paid for the total acquired insurance policies.

Company acquisitions 2006 Amounts placed at the Book value of the
time of acquisition acquired companies
€ 000 € 000
Assets 106,191 106,191
Tangible assets 3,168 3,168
Land and buildings held as financial investments 52,667 52,667
Intangible assets 1,663 1,663
Shares in associated companies 0 0
Investments 20,389 20,389
Investments held for unit-linked and index-linked life insurance policyholders 0 0
Share of reinsurance in the technical provisions 963 963
Receivables including receivables under insurance business 12,209 12,209
Receivables from income tax 329 329
Deferred tax assets 1,842 1,842
Liquid funds 12,961 12,961
Equity and liabilities 106,191 106,191
Total equity 53,056 53,056
Subordinated liabilities 0 0
Technical provisions 19,050 19,050
Technical provisions for life insurance policies held on account and at risk of policyholders 0 0
Financial liabilities 3,717 3,717
Other provisions 211 211
Payables and other liabilities 22,577 22,577
Liabilities from income tax 26 26
Deferred tax liabilities 7,554 7,554

6 | Other intangible assets

Self-produced software Acquired
intangible assets
Group total Group total
€ 000 € 000
Acquisition values as at 31 Dec. 2005 39,378 137,295
Cumulative depreciation up to 31 Dec. 2005 –26,423 –101,222
Book value as at 31 Dec. 2005 12,955 36,074
Acquisition values as at 31 Dec. 2006 40,003 149,972
Cumulative depreciation up to 31 Dec. 2006 –32,094 –110,714
Book value as at 31 Dec. 2006 7,909 39,258

Other intangible assets as at 31 Dec. 2006 comprised:

31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Computer software 40,034 43,096
Licences 2,438 3,063
Other intangible assets 4,695 2,870
47,167 49,029
Useful life Years Years
Self-produced software 2–5 2–5
Acquired intangible assets 2–5 2–5

The intangible assets include paid-for and self-produced computer software and licences.

The amortisation of the other intangible assets were recognised in the income statement on the basis of allocated operating expenses under the items insurance benefits, operating expenses and net investment income.

Intangible assets are depreciated using the straight-line method.

Additions from company acquisition 31 Dec. 2006
€ 000
Self-produced software 0
Acquired intangible assets 1,496
31 Dec. 2006
€ 000
Research and development expenditures recorded
as an expense during the period under review 2,105

7 | Shares in affiliated companies and companies valued at equity

31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Current market value for
Shares in affiliated companies of minor importance1) 18,804 18,407
Shares in associated companies of minor importance 26,722 1,522
Book value for
Shares in associated companies valued at equity 345,276 217,947
Equity for
Shares in affiliated companies of minor importance 13,919 17,999
Annual net profit/deficit for the year
Shares in affiliated companies of minor importance –4,019 –447

1) The shares in affiliated companies of minor importance are shown on the balance sheet as available for disposal at any time under variable yield securities (Assets E. I. 1.).

Shares in associated companies 31 Dec. 2006
€ 000
Current market value of associated companies
listed on a public stock exchange
0
Profits/losses for the period 45,017
Unrecorded, proportional loss, ongoing,
if shares of loss are no longer recorded
0
Unrecorded, proportional loss, cumulative,
if shares of loss are no longer recorded
0

Due to restructuring measures at STRABAG SE, the share of equity relevant to the adjustment at equity was increased. The resulting adjustment effect is €18.830 million.

8 | Securities, available for sale

Type of investment Acquisition costs Fluctuation in value not
affecting income
31 Dec. 2006 31 Dec. 2005 31 Dec. 2006 31 Dec. 2005
€ 000 € 000 € 000 € 000
Shares in affiliated companies 18,804 18,407 0 0
Shares 901,955 948,712 38,249 68,456
Equity funds 467,114 549,053 32,194 47,395
Debenture bonds not capital-guaranteed 700,879 518,206 40,131 25,673
Other variable-yield securities 864,862 563,593 3,639 14,432
Participating interests and other investments 241,096 316,304 209,174 13,235
Fixed interest securities 10,793,413 9,774,805 33,575 207,805
Total 13,988,124 12,689,079 356,963 376,996

The market values listed for participating interests contain participating interest valuations for the first time, resulting in an appreciation in the amount of €153.145 million. In 2005, application of this valuation method would have resulted in an appreciation of €96.443 million.

Type of investment Accumulated
value adjustments
from previous years Of which accumulated Of which
from current year
31 Dec. 2006
€ 000
31 Dec. 2005
€ 000
31 Dec. 2006
€ 000
31 Dec. 2005
€ 000
31 Dec. 2006
€ 000
31 Dec. 2005
€ 000
Shares in affiliated companies 0 0 0 0 0 0
Shares –26,771 –17,109 –10,550 –10,388 –16,221 –6,721
Equity funds 0 –981 0 0 0 –981
Debenture bonds not capital-guaranteed 0 270 0 270 0 0
Other variable-yield securities –2,229 –84 0 0 –2,229 –84
Participating interests and other investments –14,080 –287 0 0 –14,080 –287
Fixed interest securities –129,260 –53,052 –38,106 –31,616 –91,154 –21,436
Total –172,341 –71,244 –48,656 –41,735 –123,684 –29,509
Type of investment Change in value adjustment
current year
Of which write-down/write-up
affecting income
Of which
write-up of equity
31 Dec. 2006
€ 000
31 Dec. 2006
€ 000
31 Dec. 2006
€ 000
Shares in affiliated companies 0 0 0
Shares –14,385 –16,221 1,836
Equity funds 0 0 0
Debenture bonds not capital-guaranteed 200 200 0
Other variable-yield securities –2,145 –2,145 0
Participating interests and other investments –14,080 –14,080 0
Fixed interest securities –86,983 –86,983 0
Total –117,393 –119,229 1,836
Change in equity as at 31 Dec. 2006 Allocation not
affecting income
31 Dec. 2006
31 Dec. 2005
affecting income Withdrawal* due to disposals Change in unrealised
gains/losses
31 Dec. 2006 31 Dec. 2005 31 Dec. 2006 31 Dec. 2005
€ 000 € 000 € 000 € 000 € 000 € 000
Other securities
Available for sale 115,846 62,956 –50,297 –23,734 65,549 39,222

* Withdrawal affecting the income statement due to disposals and impairments.

Accumulated value
adjustments
Foreign currency differences
affecting income
Market values
31 Dec. 2006 31 Dec. 2005 31 Dec. 2006 31 Dec. 2005 31 Dec. 2006 31 Dec. 2005
€ 000 € 000 € 000 € 000 € 000 € 000
0 0 0 0
18,804
18,407
–26,771 –17,109 0 0
913,433
1,000,059
0 –981 0 0
499,309
595,467
0 270 –12,681 15,645 728,329 559,793
–2,229 –84 0 0
866,272
577,941
–14,080 –287 0 0
436,190
329,251
–129,260 –53,052 –62,959 –3,285 10,634,769 9,926,273
–172,341 –71,244 –75,640 12,360 14,097,106 13,007,192
Remaining contractual term Acquisition costs Market values
31 Dec. 2006
31 Dec. 2005
31 Dec. 2006 31 Dec. 2005
€ 000 € 000 € 000 € 000
Infinite 46,558 0 47,347 0
Up to 1 year 657,301 335,663 656,151 339,713
Of more than 1 year up to 5 years 3,942,155 3,092,007 3,922,674 3,157,522
Of more than 5 years up to 10 years 4,212,410 4,692,078 4,156,568 4,748,540
More than 10 years 3,500,730 2,736,856 3,446,630 2,818,232
Total 12,359,154 10,856,603 12,229,370 11,064,007

The remaining maturities stipulated by contract refer to fixed income securities, other variable-rate securities and bonds without capital guarantee.

Risk of default rating 31 Dec. 2006
€ 000
Fixed interest securities
Rating AAA 3,343,467
Rating AA 2,657,943
Rating A 3,637,927
Rating BBB 1,024,734
Rating < BBB 1,152,657
Not assigned 412,642
Rating total of fixed interest securities 12,229,370
Issuer countries
Share securities
IE, NL, UK, US 298,865
AT, BE, CH, DE, DK, FR, IT 691,356
ES, FI, NO, SE 113,819
Remaining EU 231,323
Other countries 190,450
Issuer countries total of share securities 1,525,812
Other shareholdings 323,120
Total variable-yield securities 1,848,932

9 | Derivative financial instruments

31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Market values
Share risk 42,278 5,217
Interest rate change risk 6,045 311
Currency risk 27,790 –25,112
Structured risk 18,648 30,961
Total 94,761 11,376
Structured risk – of which:
Share risk 18,925 18,438
Interest rate change risk –12,108 3,391
Currency risk 10,428 7,566
Credit risk 1,404 1,567
Balance sheet value
Investments 95,970 48,405
Financial liabilities –1,209 –37,029

10 | Loans

Book values
31 Dec. 2006 31 Dec. 2005
€ 000 € 000
1. Loans to affiliated companies 80 119
2. Loans to participating interests 792 792
3. Mortgage loans 178,956 172,604
4. Loans and advance payments on policies 15,400 15,472
5. Other loans 613,566 789,545
6. Registered bonds 225,248 178,891
Total 1,034,044 1,157,424
Remaining contractual term Book values
31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Infinite 2,184 1,855
Up to 1 year 204,544 284,636
Of more than 1 year up to 5 years 188,968 287,506
Of more than 5 years up to 10 years 431,477 389,711
More than 10 years 206,870 193,716
Total 1,034,044 1,157,424
Market values
31 Dec. 2006 31 Dec. 2005
€ 000 € 000
1. Loans to affiliated companies 80 119
2. Loans to participating interests 792 792
3. Mortgage loans 178,956 172,604
4. Loans and advance payments on policies 15,400 15,472
5. Other loans 617,068 808,175
6. Registered bonds 225,248 178,891
Total 1,037,546 1,176,054
Remaining contractual term Market values
31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Infinite 2,184 1,855
Up to 1 year 204,585 286,666
Of more than 1 year up to 5 years 189,401 295,334
Of more than 5 years up to 10 years 434,505 398,439
More than 10 years 206,870 193,759
Total 1,037,546 1,176,054

11 | Other investments

31 Dec. 2006 31 Dec. 2005
€ 000 € 000
Other investments included:
Deposits with credit institutions 802,106 855,233
Deposits with ceding companies 105,678 97,627
Total 907,783 952,861

12 | Receivables incl. receivables under insurance business

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
I.
Reinsurance receivables
1. Accounts receivable under reinsurance operations 36,298 56,849
36,298 56,849
II.
Other receivables
Receivables under the insurance business
1. from policyholders 202,790 180,587
2. from intermediaries 62,817 66,854
3. from insurance companies 8,310 11,533
273,917 258,974
Other receivables
Accrued interest and rent 221,679 208,082
Other tax refund claims 28,648 44,698
Receivables due from employees 3,709 4,236
Other receivables 106,832 88,822
360,867 345,839
Total other receivables 634,784 604,813
Subtotal 671,083 661,662
Of which receivables with a remaining term of
up to 1 year 657,315 635,946
more than 1 year 13,767 25,717
671,083 661,662
III. Other assets
Accruals 37,150 36,959
37,150 36,959
Total receivables incl. receivables under insurance business 708,233 698,621

13 | Receivables from income tax

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Receivables from income tax 54,249 28,792
of which receivables with a remaining term of
up to 1 year 40,954 28,642
more than 1 year 13,295 150

14 | Deferred tax assets

Cause of origin 31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Actuarial items 8,762 6,991
Social capital 54,585 53,026
Investments 2,583 0
Loss carried forward 5,052 5,520
Other 14,019 7,659
Total 85,000 73,197

15 | Subscribed capital

31 Dec. 2006 31 Dec. 2005
Number of authorised and issued
no-par shares 119,777,808 119,777,808
of which fully paid up 119,777,808 119,777,808

The subscribed capital and capital reserves correspond to values from the individual financial statements of UNIQA Versicherungen AG.

The following shareholders hold shares greater than 10%: Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH 35.24% BL Syndikat Beteiligungs Gesellschaft m.b.H. 31.95%

Unrealised capital gains and losses from the revaluation of investments available for sale affected the revaluation reserve, with deferred participation in profits (for life insurance) and deferred taxes taken into consideration.

In addition to the subscribed capital, UNIQA Versicherungen AG has at its disposal an authorised capital in the amount of € 50 million. The Annual General Meeting of 23 May 2005, extended the authorisation of the Management Board of UNIQA Versicherungen AG to increase the share capital, with the approval of the Supervisory Board, up to and including 30 June 2010.

In addition, the Management Board was authorised in the first, second and fourth Annual General Meetings to buy own shares in accordance with Section 65 paragraph 1 number 8 and paragraph 1a of the Austrian Stock Corporation Act, upon approval by the Supervisory Board. On 28 April 2004, the UNIQA Versicherungen AG Management Board decided to resell shares which had previously been bought back. This decision was approved by the Supervisory Board on 29 April 2004, and the share buy-back programme was suspended as the resale programme came into effect on 6 May 2004.

At the reporting date, own shares are accounted for as follows:

31 Dec. 2006 31 Dec. 2005
Shares held by:
UNIQA Versicherungen AG
Acquisition costs in € 000 2,561 2,561
Number of shares 350,000 350,000
Share of subscribed capital in % 0.29 0.29

In the performance figure "earnings per share", the Group net profit is set against the average number of ordinary shares in circulation.

Earnings per share 2006 2005
Group net profit (in € 000) 151,900 107,760
Of which accounts for ordinary shares (in € 000) 151,900 107,760
Own shares as at 31 Dec. 2006 350,000 350,000
Average number of shares in circulation 119,427,808 114,612,683
Profit per share (in €)* 1.27 0.94
Profit before taxes per share (in €)* 1.80 1.44
Profit per share*, adjusted for goodwill amortisation 1.34 1.04
Earnings from ordinary activities per share, adjusted for goodwill amortisation 2.07 1.76
Dividend per share 0.35** 0.26

* Calculated on the basis of the consolidated net profit for the year.

** Subject to the decision to be taken in the AGM.

The diluted result per share is equal to the undiluted result per share in the reporting year and in the previous year.

Change in the tax amounts included in the 31 Dec. 2006
equity without affecting income Group total
€ 000
Effective tax 0
Deferred tax –14,837
Total –14,837

16 | Minority interests

Total 207,299 203,226
In other equity 181,000 160,292
In net income for the year 23,165 25,581
In revaluation reserve 3,134 17,352
€ 000 € 000
Group total Group total
31 Dec. 2006 31 Dec. 2005

17 | Subordinated liabilities

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Supplementary capital 475,000 325,000

In December 2002, Raiffeisen Versicherung AG, and in July 2003, UNIQA Versicherungen AG, UNIQA Personenversicherung AG and UNIQA Sachversicherung AG, issued partial debentures with a nominal value of €325 million for paid-up supplementary capital, according to Section 73 c paragraph 2 of the Austrian Insurance Supervisory Act. The partial debentures are valid for an unlimited time period. An ordinary or extraordinary notice of redemption to the issuer is not possible for at least five years. Subject to coverage in the annual net profit before the issuer's movements in reserves, the interest to July 2013 will be 5.36%, except in the case of Raiffeisen Versicherung AG, where the interest to December 2012 will be 5.7%, plus a bonus interest payment of between 0.2% and 0.4% depending on sales profitability, and the increase in premiums in comparison to the whole market.

In December 2006, UNIQA Versicherungen AG issued bearer debentures with a face value of €150 million for deposited supplementary capital, according to article 73 c paragraph 2 of the Austrian Insurance Supervisory Act. According to the conditions of the bearer debentures, the deposited capital of UNIQA Versicherungen AG is agreed to remain at the company's disposal for at least five years, with no ordinary or extraordinary cancellation possible. Interest is applied only insofar as this is covered in the net profit for the year of the issuer. The interest rate up to December 2016 is 5.079%.

18 | Unearned premiums

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
Gross 374,948 337,908
Reinsurers' share –30,951 –29,222
343,997 308,686
Health insurance
Gross 15,039 13,987
Reinsurers' share –80 –69
14,959 13,918
Consolidated financial statements
Gross 389,987 351,896
Reinsurers' share –31,031 –29,291
Total (fully consolidated values) 358,956 322,605

19 | Actuarial provision

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
Gross 44,800 53,093
Reinsurers' share –251 –2,861
44,550 50,231
Life insurance
Gross 12,923,203 12,075,698
Reinsurers' share –382,186 –365,167
12,541,017 11,710,531
Health insurance
Gross 1,974,470 1,841,369
Reinsurers' share –1,842 –1,976
1,972,628 1,839,393
Consolidated financial statements
Gross 14,942,474 13,970,159
Reinsurers' share –384,279 –370,004
Total (fully consolidated values) 14,558,195 13,600,156

The interest rates used as an accounting basis were as follows:

For Life insurance Health insurance
acc. to SFAS 120 acc. to SFAS 60
% %
2006
For actuarial provision 1.75–4.00 4.50 or 5.50
For deferred acquisition costs 4.80 4.50 or 5.50
2005
For actuarial provision 2.25–4.00 4.50 or 5.50
For deferred acquisition costs 4.50–4.80 4.50 or 5.50

20 | Provision for outstanding claims

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
Gross 1,770,641 1,694,155
Reinsurers' share –312,033 –323,220
1,458,607 1,370,935
Life insurance
Gross 100,756 91,607
Reinsurers' share –9,775 –10,693
90,982 80,914
Health insurance
Gross 151,484 154,043
Reinsurers' share –759 –33
150,725 154,010
Consolidated financial statements
Gross 2,022,881 1,939,806
Reinsurers' share –322,567 –333,946
Total (fully consolidated values) 1,700,314 1,605,860

The provision for outstanding claims (provisions for outstanding claims) developed in the property and casualty insurance as follows:

2006 2005
Group total Group total
€ 000 € 000
1. Provisions for outstanding claims as at 1 Jan.
a. Gross 1,694,155 1,583,949
b. Reinsurers' share –323,220 –320,031
c. Retention 1,370,935 1,263,918
2. Plus (retained) claims expenditures
a. Losses of the current year 1,199,829 1,104,873
b. Losses of the previous year –147,719
–129,005
c. Total 1,052,110 975,867
3. Less (retained) losses paid
a. Losses of the current year –598,972 –542,058
b. Losses of the previous year –385,554 –331,431
c. Total –984,527 –873,489
4. Foreign currency translation 5,280 3,733
5. Change in consolidation scope 14,808 1,401
6. Other changes 0 –495
7. Provisions for outstanding claims as at 31 Dec.
a. Gross 1,770,641 1,694,155
b. Reinsurers' share –312,033 –323,220
c. Retention 1,458,607 1,370,935
Claims payments 2001 2002 2003 2004 2005 2006 Total
€ 000 € 000 € 000 € 000 € 000 € 000 € 000
Financial year 484,734 573,623 541,069 534,560 580,829 618,734
One year later 758,469 905,224 829,750 834,530 895,217
Two years later 826,713 973,469 892,547 908,373
Three years later 854,016 1,003,317 921,149
Four years later 874,247 1,018,105
Five years later 884,304
Accumulated payments 884,304 1,018,105 921,149 908,373 895,217 618,734
Estimated final claims payments 933,181 1,065,557 1,007,919 1,040,556 1,126,831 1,201,690
Current balance sheet reserve 48,877 47,452 86,770 132,183 231,614 582,957 1,129,852
Balance sheet reserve for the claims years
"2000 and before":
349,448
1,479,300
Plus other reserve components (internal
claims regulation costs, etc.)
291,341
Provisions for outstanding claims (gross)
as at 31 Dec. 2006
1,770,641

21 | Provision for premium refunds

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
Gross 35,413 33,415
Reinsurers' share –315 –1,752
35,098 31,663
Life insurance
Gross 687,278 798,563
Reinsurers' share –100 –100
687,178 798,463
Health insurance
Gross 77,984 75,159
Reinsurers' share 0 0
77,984 75,159
Consolidated financial statements
Gross 800,674 907,136
Reinsurers' share –415 –1,852
Total (fully consolidated values) 800,260 905,284
Of which profit-unrelated (retention) 47,712 41,766
Of which profit-related (retention) 752,547 863,518
Group total 31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
a) Provision for profit-unrelated premium refunds 48,027 43,518
of which property and casualty insurance 27,222 24,972
of which health insurance 20,793 18,546
of which life insurance 13 0
b) Provision for profit-related premium refunds
and/or policyholder profit participation 339,138 285,815
of which property and casualty insurance 8,191 8,443
of which health insurance 57,191 56,612
of which life insurance 273,755 220,759
Deferred profit participation 413,510 577,803
Total (fully consolidated values) 800,674 907,136
Group total 2006 2005
Group total Group total
€ 000 € 000
a) Provision for profit-unrelated premium refunds, profit-related
premium refunds and policyholder profit participation
As at 1 Jan. 329,333 278,528
Changes for:
Other changes 57,832 50,805
As at 31 Dec. 387,165 329,333
b) Deferred profit participation
As at 1 Jan. 577,803 420,601
Changes for:
Fluctuation in value, securities available for sale –153,744 134,359
Revaluations affecting income –10,550 22,843
As at 31 Dec. 413,510 577,803

22 | Actuarial provisions

Gross Unearned premiums Actuarial provision Provision for outstanding claims
€ 000 € 000 € 000
Property and casualty insurance
31 Dec. 2005 337,908 53,093 1,694,155
Exchange rate differences 2,281 –95 5,591
Changes in consolidation scope 6,289 15,933
Portfolio changes 9,456
Additions –563
Disposals 7,635
Premiums written 1,572,537
Premiums earned 1,553,523
Claims in reporting year 1,369,490
Claims payments in reporting year 679,464
Change in claims from previous years –178,824
Claims payments in previous years 456,240
As at 31 Dec. 2006 374,948 44,800 1,770,641
Health insurance
As at 31 Dec. 2005 13,987 1,841,369 154,043
Exchange rate differences –40 10 12
Changes in consolidation scope 449 1
Portfolio changes –1,308
Additions 138,822
Disposals 5,730
Premiums written 744,051
Premiums earned 742,099
Claims in reporting year 627,536
Claims payments in reporting year 495,389
Change in claims from previous years –4,216
Claims payments in previous years 130,503
As at 31 Dec. 2006 15,039 1,974,470 151,484
Life insurance
As at 31 Dec. 2005 12,075,698 91,607
Exchange rate differences 3,237 97
Changes in consolidation scope 20,166 888
Portfolio changes 136,411 –580
Additions 725,326
Disposals 37,635
Premiums written
Premiums earned
Claims in reporting year 1,064,454
Claims payments in reporting year 1,010,894
Change in claims from previous years 26,139
Claims payments in previous years 70,954
As at 31 Dec. 2006 0 12,923,203 100,756
Group total
As at 31 Dec. 2005 351,896 13,970,159 1,939,806
Exchange rate differences 2,241 3,152 5,699
Changes in consolidation scope 6,738 20,166 16,822
Portfolio changes 8,147 136,411 –580
Additions 863,585
Disposals 51,000
Premiums written 2,316,587
Premiums earned 2,295,622
Claims in reporting year 3,061,480
Claims payments in reporting year 2,185,747
Change in claims from previous years –156,902
Claims payments in previous years 657,697
As at 31 Dec. 2006 389,987 14,942,474 2,022,881
Total Other actuarial provisions Provision for profit-related
premium refunds and/or
policyholder profit participation
Provision for profit-unrelated
premium refunds
€ 000 € 000 € 000 € 000
2,140,900
8,297
22,330
531
8,443
4
24,972
–16
22,222
9,456
4,523 2,896 –185 2,375
11,078 3,263 71 109
1,572,537
1,553,523
1,369,490
679,464
–178,824
456,240
2,248,295 22,494 8,191 27,222
2,085,614 1,056 56,612 18,546
–18
449
–1,299 9
149,360 5,168 2,470 2,900
8,591 316 1,891 653
744,051
742,099
627,536
495,389
–4,216
130,503
2,224,894 5,916 57,191 20,793
12,982,864 16,996 798,563
3,392 75 –16
21,068 14
136,478
801,795
647
875
75,581 13
228,052 3,541 186,876
1,064,454
1,010,894
26,139
70,954
13,726,288 15,051 687,265 13
17,209,378
11,671
40,381
606
863,618
–13
43,518
–16
43,739 14
144,634 656
955,678 8,939 77,866 5,288
247,722 7,121 188,838 763
2,316,587
2,295,622
3,061,480
2,185,747
–156,902
657,697
18,199,478 43,461 752,647 48,027
Reinsurers' share Unearned premiums Actuarial provision Provision for outstanding claims
€ 000 € 000 € 000
Property and casualty insurance
As at 31 Dec. 2005 29,222 2,861 323,220
Exchange rate differences 589 1 310
Changes in consolidation scope 347 1,125
Portfolio changes 2,147 11,825
Additions 89
Disposals 2,700
Premiums written 281,447
Premiums earned 282,801
Claims in reporting year 157,836
Claims payments in reporting year 80,491
Change in claims from previous years –31,105
Claims payments in previous years 70,686
As at 31 Dec. 2006 30,951 251 312,033
Health insurance
As at 31 Dec. 2005 69 1,976 33
Exchange rate differences
Changes in consolidation scope
Portfolio changes
Additions
Disposals 133
Premiums written 546
Premiums earned 535
Claims in reporting year 95
Claims payments in reporting year 48
Change in claims from previous years 694
Claims payments in previous years 15
As at 31 Dec. 2006 80 1,842 759
Life insurance
As at 31 Dec. 2005 365,167 10,693
Exchange rate differences 41 20
Changes in consolidation scope 39
Portfolio changes –4,199
Additions 22,402
Disposals 1,264
Premiums written
Premiums earned
Claims in reporting year 16,496
Claims payments in reporting year 11,879
Change in claims from previous years –3,289
Claims payments in previous years 2,266
As at 31 Dec. 2006 0 382,186 9,775
Group total
As at 31 Dec. 2005 29,291 370,004 333,946
Exchange rate differences 589 42 330
Changes in consolidation scope 347 39 1,125
Portfolio changes 2,147 –4,199 11,825
Additions 22,491
Disposals 4,097
Premiums written 281,993
Premiums earned 283,336
Claims in reporting year 174,428
Claims payments in reporting year 92,418
Change in claims from previous years –33,701
Claims payments in previous years 72,967
As at 31 Dec. 2006 31,031 384,279 322,567
Total Other actuarial provisions Provision for profit-related
premium refunds and/or
Provision for profit-unrelated
premium refunds
€ 000 € 000 policyholder profit participation
€ 000
€ 000
359,815 2,761
5
1,752
1,472
13,971
350 180
4,589 272 1,617
281,447
282,801
157,836
80,491
–31,105
70,686
346,393 2,843 0 315
0 0 0
–184 100
–4
–187 100 0
2,577 100 1,752
737,670 5
346 180
272 1,617
281,993
283,336
2,656 100 315
Retained Unearned premiums Actuarial provision Provision for outstanding claims
€ 000 € 000 € 000
Property and casualty insurance
As at 31 Dec. 2005 308,686 50,231 1,370,935
Exchange rate differences 1,693 –95 5,280
Changes in consolidation scope 5,942 14,808
Portfolio changes 7,309 –11,825
Additions –652
Disposals 4,935
Premiums written 1,291,090
Premiums earned 1,270,722
Claims in reporting year 1,211,654
Claims payments in reporting year 598,972
Change in claims from previous years –147,719
Claims payments in previous years 385,554
As at 31 Dec. 2006 343,997 44,550 1,458,607
Health insurance
As at 31 Dec. 2005 13,918 1,839,393 154,010
Exchange rate differences –40 10 12
Changes in consolidation scope 449 1
Portfolio changes –1,308
Additions 138,822
Disposals 5,597
Premiums written 743,505
Premiums earned 741,564
Claims in reporting year 627,441
Claims payments in reporting year 495,341
Change in claims from previous years –4,910
Claims payments in previous years 130,488
As at 31 Dec. 2006 14,959 1,972,628 150,725
Life insurance
As at 31 Dec. 2005 11,710,531 80,914
Exchange rate differences 3,196 77
Changes in consolidation scope 20,127 888
Portfolio changes 140,611 –580
Additions 702,924
Disposals 36,371
Premiums written
Premiums earned
Claims in reporting year 1,047,958
Claims payments in reporting year 999,015
Change in claims from previous years 29,428
Claims payments in previous years 68,688
As at 31 Dec. 2006 0 12,541,017 90,982
Group total
As at 31 Dec. 2005 322,604 13,600,156 1,605,860
Exchange rate differences 1,653 3,110 5,370
Changes in consolidation scope 6,390 20,127 15,697
Portfolio changes 6,001 140,611 –12,405
Additions 841,094
Disposals 46,903
Premiums written 2,034,594
Premiums earned 2,012,286
Claims in reporting year 2,887,052
Claims payments in reporting year 2,093,328
Change in claims from previous years –123,200
Claims payments in previous years 584,730
As at 31 Dec. 2006 358,956 14,558,195 1,700,314
Other actuarial provisions Provision for profit-related Provision for profit-unrelated
premium refunds and/or premium refunds
€ 000 policyholder profit participation
€ 000
€ 000
19,569 8,443 23,220
527 4 –16
2,546 –185 2,195
2,991 71 –1,508
19,651 8,191 26,907
1,055 56,612 18,546
9
5,168 2,470 2,900
316 1,891 653
5,916 57,191 20,793
12,607,088 17,179 798,463
75 –16
14
647
879 75,581 13
3,541 186,876
15,239 687,165 13
16,471,708 37,804 863,518 41,766
602 –13 –16
14
656
8,593 77,866 5,108
6,849 188,838 –854
40,805 752,547 47,712

23 | Actuarial provisions for unit-linked and index-linked life insurance policies

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Gross 1,911,516 1,457,644
Reinsurers' share –305,580 –255,704
Total 1,605,935 1,201,939

As a general rule, the valuation of the actuarial provisions for unit-linked and index-linked life insurance policies corresponds to the investments in unit-linked and index-linked life insurance policies reported at current market values. The reinsurers' share is offset by deposits payable in the same amount.

24 | Liabilities from loans

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Liabilities under issued debenture bonds
UNIQA Versicherungen AG, Vienna
4.00%, €150 million, bond 2004/2009 149,700 149,700
Loan liabilities 43,825 62,031
up to 1 year 5,876 13,711
more than 5 years 37,950 48,320
Total 193,526 211,731

25 | Provisions for pensions and similar commitments

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Provisions for pensions 414,589 401,005
Provision for severance payments 127,830 122,122
542,418 523,127
2006 2005
Group total Group total
€ 000 € 000
As at 1 Jan. 523,127 462,522
Change in consolidation scope 0 4,171
Changes from foreign currency translation 2 12
Withdrawal for pension payments –27,160 –22,336
Expenditure in the financial year 46,450 78,758
As at 31 Dec. 542,418 523,127

Calculation factors applied 2006 Technical rate of interest 4.50% Valorisation of wages and salaries 3.00% Valorisation of pensions 2.00% Employee turnover rate dependent on years of service Accounting principles AVÖ 1999 P – Pagler & Pagler/employee 2005 Technical rate of interest 4.50%

Valorisation of wages and salaries 3.00%
Valorisation of pensions 2.00%
Employee turnover rate dependent on years of service
Accounting principles AVÖ 1999 P – Pagler & Pagler/employee
Specification of pension expenditures for pensions and similar commitments 31 Dec. 2006 31 Dec. 2005
included in the income statement Group total Group total
€ 000 € 000
Current service cost 15,443 8,096
Interest cost 23,220 22,765
Actuarial profit and loss 7,525 47,896
Income and expenditures from budget changes 262 0
Total 46,450 78,758

Under the contribution-oriented company pension scheme, the employer pays fixed amounts into company pension funds. The employer has satisfied its obligation by making these contributions.

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Contributions to company pension funds 942 390

26 | Other provisions

Balance sheet figures Currency translation Change in
prev. year changes consolidation scope
€ 000 € 000 € 000
Provisions for unconsumed vacations 31,948 26 22
Provisions for anniversary payments 16,329 0 0
48,277 26 22
Other personnel provisions 11,876 28 26
Provisions for customer relations and marketing 28,853 4 0
Provision for Holocaust compensation 100 0 0
Provision for variable components of remuneration 15,834 4 0
Provision for legal and consulting expenses 5,088 –1 0
Provision for premium adjustment from
reinsurance contracts 3,307 23 0
Provision for portfolio maintenance commission 1,762 0 0
Other provisions 60,733 82 163
127,553 140 189
Total 175,830 167 211
31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Other provisions1) with a high probability of utilisation (more than 90%)
Up to 1 year 73,286 82,244
In 1 to 5 years 2,907 3,338
Up to 1 year 4,915 6,097
81,107 91,679
Other provisions1) with a lower probability of consumption (less than 90%)
Up to 1 year 47,143 34,773
In 1 to 5 years 1,672 959
Up to 1 year 371 142
49,186 35,874
Total 130,294 127,553

1) Without unconsumed vacations and anniversary payments.

Balance sheet figures Additions Reclassifications Reversals Utilisation
2006
€ 000 € 000 € 000 € 000 € 000
33,610 3,131 0 –290 –1,226
15,996 59 –6 –234 –151
49,606 3,189 –6 –525 –1,377
12,916 11,653 –2 –3,659 –7,006
32,851 32,426 0 –1,227 –27,204
0 0 –100 0
14,614 14,614 100 –4,012 –11,926
5,136 3,015 35 –278 –2,723
6,261 5,886 0 –173 –2,783
1,955 1,955 0 –41 –1,721
56,561 56,561 –126 0 –60,851
130,294 126,109 6 –9,490 –114,214
179,900 129,298 0 –10,015 –115,591

27 | Payables and other liabilities

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
I.
Reinsurance liabilities
1. Deposits held under reinsurance business ceded 702,765 626,269
2. Accounts payable under reinsurance operations 21,563 62,982
724,329 689,251
II.
Other liabilities
Liabilities under insurance business
Liabilities under direct insurance business
to policyholders 122,319 108,802
to intermediaries 99,036 93,063
to insurance companies 5,341 3,637
226,696 205,502
Liabilities to credit institutions 3,922 0
Other liabilities 424,478 224,495
of which for taxes 45,652 45,667
of which for social security 10,055 10,149
of which from fund consolidation 251,376 84,001
Total other liabilities 655,096 429,998
Subtotal 1,379,425 1,119,248
Of which liabilities with a remaining term of
up to 1 year 766,296 575,559
between 1 and 5 years 41,472 26,608
more than 5 years 571,657 517,081
1,379,425 1,119,248
III. Other liabilities
Deferred income 8,232 11,539
Total payables and other liabilities 1,387,657 1,130,787

The item "Deferred income" basically comprises the balance of the deferred income regarding the indirect business settlement.

28 | Liabilities from income tax

31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Liabilities from income tax 66,754 95,361
Liabilities from income tax
up to 1 year 6,150 205
between 1 and 5 years 60,074 94,938
more than 5 years 530 218

29 | Deferred tax liabilities

Cause of origin 31 Dec. 2006 31 Dec. 2005
Group total Group total
€ 000 € 000
Actuarial items 152,276 135,119
Untaxed reserves 27,761 28,953
Shares in affiliated companies 28,425 28,425
Investments 79,261 71,434
Other 12,166 4,900
Total 299,889 268,831
Of which not affecting income 57,845 43,007

Notes to the consolidated income statement 2006

30 | Premiums written

Direct business 2006 2005
Group total Group total
€ 000 € 000
1. Property and casualty insurance 1,996,674 1,876,302
2. Life insurance 1,577,346 1,568,783
3. Health insurance 888,902 843,023
Total (fully consolidated values) 4,462,923 4,288,108
Of which written in:
1. Austria 3,071,160 3,057,892
2. Other member states of the EU and other signatory states of the
Treaty on the European Economic Area 1,280,195 1,170,770
3. Other countries 111,568 59,446
Total (fully consolidated values) 4,462,923 4,288,108
Indirect business 2006 2005
Group total Group total
€ 000 € 000
1. Property and casualty insurance 40,473 57,276
2. Life insurance 27,844 22,410
3. Health insurance 898 2,371
Total (fully consolidated values) 69,214 82,057
2006 2005
Group total Group total
€ 000 € 000
Total (fully consolidated values) 4,532,137 4,370,165
Premiums written in property and casualty insurance 2006 2005
Group total Group total
€ 000 € 000
Direct business
Fire and business interruption insurance 166,131 160,802
Household insurance 157,768 151,163
Other property insurance 188,244 175,925
Motor TPL insurance 511,755 471,553
Other motor insurance 335,076 311,577
Casualty insurance 224,076 210,439
Liability insurance 210,712 198,175
Legal expenses insurance 44,663 40,353
Marine, aviation and transport insurance 100,525 103,790
Other insurance 57,725 52,526
Total 1,996,674 1,876,302
Indirect business
Marine, aviation and transport insurance 2,529 3,272
Other insurance 37,943 54,004
Total 40,473 57,276
Total direct and indirect business (fully consolidated values) 2,037,147 1,933,578
Reinsurance premiums ceded 2006 2005
Group total Group total
€ 000 € 000
1. Property and casualty insurance 293,678 285,929
2. Life insurance 77,603 67,642
3. Health insurance 1,085 839
Total (fully consolidated values) 372,366 354,410

31 | Premiums earned (retained)

2006 2005
Group total Group total
€ 000 € 000
1. Property and casualty insurance 1,715,604 1,627,706
Gross 2,008,241 1,912,925
Reinsurers' share –292,637 –285,220
2. Life insurance 1,527,391 1,523,309
Gross 1,604,998 1,591,095
Reinsurers' share –77,607 –67,786
3. Health insurance 886,672 849,415
Gross 887,746 850,321
Reinsurers' share –1,074 –906
Total (fully consolidated values) 4,129,666 4,000,429
Premiums earned in indirect business 2006 2005
Group total Group total
€ 000 € 000
Posted immediately 10,836 17,197
Posted after up to one year 30,318 40,129
Property and casualty insurance 41,155 57,326
Posted immediately 5,452 599
Posted after up to one year 22,339 22,115
Posted after more than one year 53 –304
Life insurance 27,844 22,410
Posted immediately 495 717
Posted after up to one year 403 1,653
Health insurance 898 2,371
Total (fully consolidated values) 69,896 82,107
Earnings from indirect business 2006 2005
Group total Group total
€ 000 € 000
Property and casualty insurance 11,985 18,295
Life insurance 866 2,185
Health insurance –137 –448
Total (fully consolidated values) 12,714 20,032

32 | Income from fees and provisions

2006 2005
Group total Group total
€ 000 € 000
Reinsurance commission and profit shares from reinsurance business ceded 80,865 66,744
Property and casualty insurance 59,539 55,851
Life insurance 21,203 10,818
Health insurance 122 74
Total (fully consolidated values) 80,865 66,744

33 | Net investment income1)

Property and casualty insurance Life insurance
2006 2005 2006 2005
€ 000 € 000 € 000 € 000
I.
Properties held as financial investments
2,757 6,201 3,370 3,994
II.
Variable-yield securities
69,131 65,698 302,237 403,428
1. Available for sale 63,100 57,054 257,310 312,335
2. Reported in the income statement 6,031 8,644 44,927 91,093
III. Fixed interest securities 33,156 69,069 209,024 490,996
1. Held to maturity 0 0 0 0
2. Available for sale 32,284 68,220 188,906 448,792
3. Reported in the income statement 872 849 20,118 42,204
IV. Loans and other investments 13,877 22,111 27,735 41,080
1. Loans 13,107 17,869 14,835 24,242
2. Other investments 770 4,242 12,900 16,838
V.
Derivative financial instruments
8,753 –22,314 80,599 –189,873
VI. Expenditures for asset management, interest
expenditures and other –12,448 –8,490 –7,160 –7,281
Total (fully consolidated values) 115,226 132,274 615,804 742,343

1) The total income (net) from investments is shown here without the earnings from associated companies.

Ordinary income Write-ups and unrealised
capital gains
2006 2005 2006 2005
€ 000 € 000 € 000 € 000
I.
Properties held as financial investments
43,985 40,457 0 0
II.
Variable-yield securities
1. Available for sale 122,585 79,418 661 28,365
2. Reported in the income statement 30,522 42,629 43,739 55,833
III. Fixed interest securities
1. Held to maturity 0 0 0 0
2. Available for sale 410,441 368,117 1,553 59,225
3. Reported in the income statement 29,627 40,159 589 3,567
IV. Loans and other investments
1. Loans 49,901 59,716 2,399 2,582
2. Other investments 17,839 22,467 0 0
V.
Derivative financial instruments
–26,327 –9,255 65,361 37,880
VI. Expenditures for asset management, interest
expenditures and other –23,326 –18,247 0 0
Total (fully consolidated values) 655,247 625,462 114,302 187,452
Life insurance
Health insurance
Consolidated financial statements
2006
2005
2006
2005
2006
€ 000
€ 000
€ 000
€ 000
€ 000
3,370
3,994
8,726
6,215
14,852
302,237
403,428
53,930
35,518
425,298
257,310
312,335
47,015
29,452
367,425
44,927
91,093
6,915
6,065
57,873
209,024
490,996
28,231
61,196
270,411
621,260
0
0
0
0
0
188,906
448,792
25,663
57,751
246,853
20,118
42,204
2,568
3,445
23,559
27,735
41,080
20,244
18,479
61,856
14,835
24,242
16,074
17,092
44,017
12,900
16,838
4,169
1,387
17,839
80,599
–189,873
6,882
–16,950
96,233
–7,160
–7,281
–3,717
–2,475
–23,326
615,804
742,343
114,294
101,982
845,325
2005
€ 000
16,410
504,643
398,841
105,802
0
574,762
46,498
81,670
59,203
22,467
–229,137
–18,247
976,600
Realised capital gains Write-offs and unrealised Realised capital losses Consolidated financial statements
capital losses
2006 2005 2006 2005 2006 2005 2006 2005
€ 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000
8,820 797 –36,630 –24,754 –1,323 –91 14,852 16,410
303,447 299,491 –53,011 –4,466 –6,257 –3,967 367,425 398,841
29,644 19,865 –35,797 –1,406 –10,235 –11,119 57,873 105,802
0 0 0 0 0 0 0
42,017 175,238 –159,091 –21,501 –48,068 –6,317 246,853 574,762
1,840 9,637 –7,638 –4,939 –860 –1,927 23,559 46,498
0 3,329 –8,283 –6,420 0 –5 44,017 59,203
0 0 0 0 0 0 17,839 22,467
139,993 55,377 –22,420 –82,912 –60,373 –230,226 96,233 –229,137
0 0 0 0 0 0 –23,326 –18,247
525,761 563,734 –322,869 –146,397 –127,116 –253,651 845,325 976,600
Impairment value adjustment Write-offs and depreciation/amortisation Of which current Of which value
adjustment
2006
€ 000
2005
€ 000
2006
€ 000
2005
€ 000
2006
€ 000
2005
€ 000
I.
Properties held as financial investments
–36,630 –24,754 –25,179 –24,754 –11,451 0
II.
Variable-yield securities
1. Available for sale –53,011 –4,466 –20,480 3,607 –32,530 –8,073
2. Reported in the income statement –35,797 –1,406 –35,797 –1,406 0 0
III. Fixed interest securities
1. Held to maturity 0 0 0 0 0 0
2. Available for sale –159,091 –21,501 –67,937 –65 –91,154 –21,436
3. Reported in the income statement –7,638 –4,939 –7,638 –4,939 0 0
IV. Loans and other investments
1. Loans –8,283 –6,420 –8,283 –6,420 0 0
2. Other investments 0 0 0 0 0 0
V.
Derivative financial instruments
–22,420 –82,912 –22,420 –82,912 0 0
VI. Expenditures for asset management, interest
expenditures and other
0 0 0 0 0 0
Total (fully consolidated values) –322,869 –146,397 –187,733 –116,888 –135,136 –29,509

34 | Other income

2006 2005
Group total Group total
€ 000 € 000
a) Other actuarial income 18,771 12,616
Property and casualty insurance 15,538 9,816
Life insurance 2,558 2,521
Health insurance 675 280
b) Other non-actuarial income 19,534 18,054
Property and casualty insurance 14,443 13,781
Life insurance 4,435 3,344
Health insurance 655 929
Of which
Services rendered 7,312 5,028
Changes in exchange rates 3,629 2,148
Other 8,593 10,878
c) Other income 3,579 5,896
From foreign currency conversion 2,967 1,377
From other 612 4,519
Total (fully consolidated values) 41,884 36,566

35 | Insurance benefits

2006 2005
Gross Reinsurers'
share
Retention Gross Reinsurers'
share
Retention
€ 000 € 000 € 000 € 000 € 000 € 000
Property and casualty insurance
Expenditure for claims
Claims paid 1,204,312 –150,890 1,053,422 1,141,388 –170,547 970,841
Change in provision for outstanding claims 60,800 –4,053 56,746 101,980 7,341 109,321
Total 1,265,112 –154,943 1,110,169 1,243,368 –163,206 1,080,162
Change in actuarial provision –1,723 –4,157 –5,880 –1,429 –1,052 –2,481
Change in other actuarial provisions –491 –1 –492 1,568 501 2,069
Expenditure for profit-unrelated and
profit-related premium refunds
24,933 1,328 26,262 27,192 –818 26,373
Total amount of benefits 1,287,832 –157,773 1,130,059 1,270,699 –164,576 1,106,123
Life insurance
Expenditure for claims
Claims paid 975,275 –48,192 927,083 821,923 –46,189 775,733
Change in provision for outstanding claims 5,807 3,997 9,804 –5,785 1,100 –4,685
Total 981,082 –44,195 936,887 816,138 –45,089 771,049
Change in actuarial provision 638,341 –20,207 618,134 901,734 –18,313 883,421
Change in other actuarial provisions –2,418 0 –2,418 706 0 706
Expenditure for profit-unrelated and
profit-related premium refunds and/or
(deferred) profit participation
227,085 95 227,180 242,544 0 242,544
Total amount of benefits 1,844,089 –64,307 1,779,782 1,961,122 –63,402 1,897,720
Health insurance
Expenditure for claims
Claims paid 649,390 –616 648,774 622,163 –262 621,901
Change in provision for outstanding claims –2,474 –726 –3,199 11,518 –32 11,486
Total 646,917 –1,342 645,575 633,681 –295 633,387
Change in actuarial provision 132,727 133 132,861 104,267 –409 103,858
Change in other actuarial provisions 9 0 9 40 0 40
Expenditure for profit-unrelated and
profit-related premium refunds 27,352 –2 27,350 35,779 –4 35,775
Total amount of benefits 807,004 –1,210 805,794 773,767 –707 773,060
Total (fully consolidated values) 3,938,925 –223,290 3,715,635 4,005,588 –228,685 3,776,903

36 | Operating expenses

2006 2005
Group total Group total
€ 000 € 000
Property and casualty insurance
a) Acquisition costs
Payments 424,170 406,901
Change in deferred acquisition costs –12,342 –7,235
b) Other operating expenses 216,582 208,949
628,410 608,615
Life insurance
a) Acquisition costs
Payments 252,282 207,848
Change in deferred acquisition costs –42,576 –40,041
b) Other operating expenses 72,902 87,105
282,608 254,912
Health insurance
a) Acquisition costs
Payments 86,845 79,316
Change in deferred acquisition costs 64 –979
b) Other operating expenses 49,878 52,597
136,787 130,934
Total (fully consolidated values) 1,047,805 994,461

37 | Other expenses

2006 2005
Group total Group total
€ 000 € 000
a) Other actuarial expenses 74,391 67,060
Property and casualty insurance 33,129 21,825
Life insurance 36,161 38,731
Health insurance 5,101 6,503
b) Other non-actuarial expenses 27,009 25,813
Property and casualty insurance 23,513 24,086
Life insurance 2,931 1,282
Health insurance 565 445
Of which
Services rendered 2,155 1,759
Exchange rate losses 8,821 7,852
Motor vehicle registration 6,404 3,711
Other 9,629 12,491
c) Other expenses 5,623 357
For foreign currency translation 304 357
For other 5,320 0
Total (fully consolidated values) 107,024 93,230

38 | Profit from associated companies

Consolidated financial statements
2006 2005
€ 000 € 000
Income from associated companies 45,017 12,871
2006 2005
€ 000 € 000
45,017 18,358
0 0
0 0
0 –5,488
0 0
45,017 12,871

39 | Tax expenditure

Income tax 2006 2005
Group total Group total
€ 000 € 000
Actual tax in reporting year 52,218 41,255
Actual tax in previous year 9,086 15,713
Deferred tax 2,117 22
Total (fully consolidated values) 63,422 56,991
2006 2005
Group total Group total
€ 000
238,487 190,332
59,607 46,913
–10,943 –4,665
14,757 14,742
91 2,794
1,406 2,215
9,412 4,981
3,849 4,752
63,422 56,991
26.6 29.9
€ 000

The basic applicable corporate income tax rate for all segments was 25%. For life insurance, to the extent that the minimum taxation is applied, in the case of an assumed profit participation of 85%, this leads to a different corporate tax rate.

Other disclosures

Employees

Personnel expenses1) 2006 2005
Group total Group total
€ 000 € 000
Salaries and wages 291,929 258,055
Expenses for severance payments 18,660 25,348
Expenses for employee pensions 12,501 53,175
Expenditure on mandatory social security contributions as well as income-based charges
and compulsory contributions 87,909 84,033
Other social expenditures 5,926 4,244
Total 416,925 424,856
Of which business development 129,472 132,160
Of which administration 269,086 269,376

1) The data are based on IFRS valuation.

Average number of employees 2006 2005
Total 10,748 9,943
Of which business development 3,957 3,469
Of which administration 6,791 6,474
2006 2005
€ 000 € 000
Expenses for severance payments and employee pensions amounted to
Members of the Management Board and executive employees,
in accordance with Section 80 paragraph 1 of the Stock Corporation Law 5,929 17,350
Other employees 34,016 80,440

Both figures include the expenditure for pensioners and surviving dependants (basis: Business Code valuation). The indicated expenses were charged to the Group companies based on defined company processes. The higher expenses in the previous year were attributed to the reduction of the discount rate from 6% to 4%.

Earnings of the Management Board and Supervisory Board

Members of the Management Board receive remunerations exclusively from UNIQA Versicherungen AG.

2006 2005
€ 000 € 000
The expenses for remuneration of Management Board members attributable to the
reporting year amounted to:
Regular payments 1,902 1,903
Performance-related remunerations2) 1,540 1,541
Total 3,442 3,444
Of which charged to operational subsidiaries: 3,270 3,272
Former members of the Management Board and their surviving dependants were paid: 2,574 2,411
Because of pension commitments to these persons, the following provision was set up on 31 December 24,796 26,552

2) Included in the variable portion are effects from the previous year amounting to €0 (2005: €2,000).

The remuneration to members of the Supervisory Board amounted to:

2006 2005
€ 000 € 000
For the current financial year (provision) 410 416
For the previous financial year (settlement) 0 129
Meeting attendance fees 39 37
Total 449 582

Former members of the Supervisory Board did not receive any remuneration.

The information according to Section 239 paragraph 1 of the Business Code, in connection with 80b of the Insurance Supervisory Act, which must be included in the appendix as mandatory information for financial statements according to IFRS, releasing the company from the requirement to prepare financial statements in accordance with the Austrian Business Code, are defined for the individual financial statements according to the provisions of the Austrian Business Code, with expanded scope. In addition to the executive functions (Management Board) of UNIQA Versicherungen AG, the individual financial statements also include the earnings of the Management Boards of the subsidiaries, insofar as there exists a legally binding basis with UNIQA Versicherungen AG.

Principles for profit participation by the Management Board

A variable income component was made available to the members of the Management Board for the 2006 financial year in the form of bonus agreements and provided as a one-time payment based on the earnings situation in 2006. The basis for determining the size of the bonus is the return on equity based on the IFRS consolidated financial statements 2006 of UNIQA Versicherungen AG.

Principles for the pension scheme provided in the company for the Management Board and its requirements

Retirement pensions, a pension for occupational invalidity as well as a widow's and orphans' pension have been established. The retirement pension is due upon meeting the requirements for the old-age pension according to the General Social Security Act. The pension amount is calculated from a percentage of a

contractually established assessment basis. In the event of early pension eligibility, according to the transitional provisions included in the General Social Security Act, the pension claim is reduced. For the occupational invalidity pension and the pension for surviving dependants, flat rates are provided as minimum pension.

Principles for vested rights and claims of the Management Board of the company in the event of termination of their position

Severance payments have been agreed upon based partially on the provisions of the Salaried Employee Act. The benefits are fundamentally retained in the event of termination of membership of the Management Board; however, a reduction rule based on the remaining time until meeting the claim requirements for the old-age pension according to the General Social Security Act applies.

Supervisory Board remuneration scheme

Remunerations to the Supervisory Board are passed at the annual general meeting as a total amount for the work in the past financial year. The remuneration amount applicable to the individual Supervisory Board members is based on the position within the Supervisory Board and the number of committee positions.

Group holding company

The parent company of the UNIQA Group is UNIQA Versicherungen AG. This company is registered in the company registry of the Commercial Court of Vienna under FN 92933 t. In addition to its duties as Group holding company, this company also performs the duties of a Group reinsurer.

Related companies and persons 2006 2005
Group total Group total
€ 000 € 000
Receivables and liabilities with affiliated and associated companies
as well as related persons
Mortgage loans and other loans 80 119
Affiliated companies 80 119
Receivables 2,383 3,998
Other receivables 2,383 3,998
Affiliated companies 2,376 3,977
Associated companies 6 21
Liabilities 1,270 2,377
Other liabilities 1,270 2,377
Affiliated companies 1,270 2,376
Associated companies 0 1
Income and expenses of affiliated companies as well as related persons
Income –1,271 814
Investment income –1,274 811
Affiliated companies –1,274 811
Other income 3 3
Affiliated companies 3 3
Other financial commitments and contingent liabilities 2006 2005
€ 000 € 000
Contingent liabilities from risks of litigation 8,563 8,751
Foreign 8,563 8,751
Other contingent liabilities (affiliated, not consolidated) 0 78
Foreign 0 78
Other contingent liabilities 130 52
Foreign 130 52
Total 8,693 8,881

The companies of the UNIQA Group are involved in court proceedings in Austria and other countries in connection with their ordinary business operations as insurance companies. The result of the pending or threatened proceedings is often impossible to determine or predict.

In consideration of the provisions set aside for these proceedings, the management is of the opinion that these proceedings have no significant effects on the financial situation and the operating earnings of the UNIQA Group.

2006 2005
€ 000 € 000
Future leasing payments due to the financing of the new UNIQA headquarters in Vienna
Up to 1 year 5,693 5,254
More than 1 year up to 5 years 22,878 21,015
More than 5 years 56,932 52,538
Total 85,503 78,808
Income from subleasing in 2006 297 306

We moved into the new UNIQA headquarters – the UNIQA Tower – in 2004. The aforementioned leasing obligations are based on the investment expenditures in connection with a specific calculatory rate of interest yield.

Affiliated and associated companies in 2006

Company Type Location Equity Share in
in € million1) equity
in %2)
Domestic insurance companies
UNIQA Versicherungen AG (Group Holding Company) 1029 Vienna
UNIQA Sachversicherung AG Full 1029 Vienna 94.0 100.0
UNIQA Personenversicherung AG Full 1029 Vienna 371.6 63.4
Salzburger Landes-Versicherung AG Full 5020 Salzburg 17.6 100.0
Raiffeisen Versicherung AG Full 1029 Vienna 133.2 100.0
CALL DIRECT Versicherung AG Full 1029 Vienna 10.5 100.0
FINANCE LIFE Lebensversicherung AG Full 1029 Vienna 17.7 100.0
SK Versicherung Aktiengesellschaft Equity 1020 Vienna 6.6 25.0
Foreign insurance companies
UNIQA Assurances S.A. Full Switzerland, Geneva 9.9 100.0
UNIQA Re AG Full Switzerland, Zurich 85.9 100.0
UNIQA Assicurazioni S.p.A. Full Italy, Milan 102.6 100.0
UNIQA poistovnaˇ a.s. Full Slovakia, Bratislava 19.1 99.9
UNIQA pojiš '
tovna, a.s.
Full Czech Republic, Prague 26.6 83.3
UNIQA osiguranje d.d. Full Croatia, Zagreb 8.0 80.0
Friuli-Venezia Giulia Assicurazioni "La Carnica" S.p.A. Full Italy, Udine 19.5 89.1
UNIQA Towarzystwo Ubezpieczen S.A. Full Poland, Lodz 66.2 69.9
UNIQA Towarzystwo Ubezpieczen na ˚
Zycie S.A.
Full Poland, Lodz 3.5 69.7
UNIQA Biztosító Zrt. Full Hungary, Budapest 43.5 85.0
UNIQA Lebensversicherung AG Full Liechtenstein, Vaduz 5.1 100.0
UNIQA Versicherung AG Full Liechtenstein, Vaduz 3.1 100.0
Towarzystwo Ubezpieczen FILAR S.A. Full Poland, Stettin 23.6 93.1
Mannheimer AG Holding Full Germany, Mannheim 69.8 88.7
Mannheimer Versicherung AG Full Germany, Mannheim 49.1 100.0
mamax Lebensversicherung AG Full Germany, Mannheim 8.6 100.0
Mannheimer Versicherung AG Full Switzerland, Zurich 24.2 100.0
Mannheimer Krankenversicherung AG Full Germany, Mannheim 9.1 100.0
Claris Vita S.p.A. Full Italy, Milan 53.1 80.0
UNIQA Osiguranje d.d. Full Bosnia and Herzegovina, Sarajevo 5.0 99.8
ASTRA S.A. Equity Romania, Bucharest 34.0 27.0
Vitosha AD Full Bulgaria, Sofia 10.6 20.0
Vitosha Life AD Full Bulgaria, Sofia 3.7 99.7
Zepter osiguranje A.D. Full Serbia, Belgrade –0.7 80.0
Credo-Classic Equity Ukraine, Kiev 24.8 35.3
UNIQA LIFE Full Ukraine, Kiev 1.5 100.0
Zepter Osiguranje A.D. *1) Montenegro, Podgorica 99.4
Company Type Location Equity Share in
equity
in € million1) in %2)
Group domestic service companies
UNIQA Immobilien-Service GmbH Full 1029 Vienna 0.2 100.0
Versicherungsmarkt-Servicegesellschaft m.b.H. Full 1010 Vienna 0.2 100.0
Agenta Risiko- und Finanzierungsberatung Gesellschaft m.b.H. Full 1010 Vienna 0.5 100.0
Raiffeisen Versicherungsmakler GmbH Equity 6900 Bregenz 0.1 50.0
Versicherungsbüro Dr. Ignaz Fiala Gesellschaft m.b.H. *2) 1010 Vienna 33.3
RSG – Risiko Service und Sachverständigen GmbH *1) 1029 Vienna 100.0
Dr. E. Hackhofer EDV-Softwareberatung Gesellschaft m.b.H. Full 1070 Vienna 1.1 51.0
UNIQA Software-Service GmbH Full 1029 Vienna 0.6 100.0
SYNTEGRA Softwarevertrieb und Beratung GmbH Full 3820 Raabs 0.4 100.0
UNIQA Finanz-Service GmbH Full 1020 Vienna 0.3 100.0
UNIQA Alternative Investments GmbH Full 1020 Vienna 3.5 100.0
UNIQA International Versicherungs-Holding GmbH Full 1029 Vienna 107.5 100.0
UNIQA International Beteiligungs-Verwaltungs GmbH Full 1029 Vienna 339.1 100.0
Alopex Organisation von Geschäftskontakten GmbH *1) 1020 Vienna 100.0
RC Risk-Concept Versicherungsberatungs- &
Versicherungsmaklergesellschaft m.b.H. *1) 1010 Vienna 100.0
Allfinanz Versicherungs- und Finanzservice GmbH Full 1010 Vienna 0.2 100.0
Direct Versicherungsvertriebs-GesmbH *1) 1020 Vienna 100.0
Assistance Beteiligungs-GmbH Full 1010 Vienna 0.3 52.0
Real Versicherungs-Makler GmbH *1) 1220 Vienna 100.0
Together Internet Services GmbH *2) 1030 Vienna 24.0
FL-Vertriebs- und Service GmbH *1) 5020 Salzburg 100.0
*1)
UNIQA HealthService – Services im Gesundheitswesen GmbH 1029 Vienna 100.0
UNIQA Real Estate Beteiligungsverwaltung GmbH Full
*2)
1029 Vienna –0.1 100.0
Aviso Beta Veranlagungs GmbH *1) 1010 Vienna 20.0
Privatklinik Grinzing GmbH 1190 Vienna 100.0
Group foreign service companies
Syntegra Szolgaltato es Tanacsado KFT Full Hungary, Budapest 0.3 60.0
Insdata spol s.r.o. *1) Slovakia, Nitra 100.0
Racio s.r.o. *1) Czech Republic, Prague 100.0
UNIQA partner, s.r.o Full Slovakia, Bratislava 0.0 100.0
UNIQA Pro *1) Czech Republic, Prague 100.0
UNIQA InsService s.r.o. Full Slovakia, Bratislava 0.2 100.0
UNIQA Penztarszolgaltato Kft Full Hungary, Budapest 4.0 100.0
Heller Saldo 2000 Penztarszolgaltato Kft Full Hungary, Budapest 0.5 83.6
Dekra Expert Muszaki Szakertöi Kft Full Hungary, Budapest 0.8 74.9
UNIQA Vagyonkezelö Zrt Full Hungary, Budapest 4.2 100.0
UNIQA Szolgaltato Kft Full Hungary, Budapest 7.1 100.0
Profit-Pro Kft. *1) Hungary, Budapest 100.0
RC Risk Concept Vaduz *1) Liechtenstein, Vaduz 100.0
Elsö Közszolgalati Penzügyi Tanacsado Kft *1) Hungary, Budapest 92.4
Millennium Oktatási és Tréning Kft Full Hungary, Budapest 0.1 100.0
verscon GmbH Versicherungs- und Finanzmakler *1) Germany, Mannheim 100.0
IMD Gesellschaft für Informatik und Datenverarbeitung GmbH *1) Germany, Mannheim 100.0
UMV Gesellschaft für Unterstützungskassen-Management
und Vorsorge GmbH *1) Germany, Mannheim 100.0
Mannheimer Service und Vermögensverwaltungs GmbH *1) Germany, Mannheim 100.0
Carl C. Peiner GmbH *1) Germany, Hamburg 100.0
Wehring & Wolfes GmbH *1) Germany, Hamburg 100.0
Falk GmbH *1) Germany, Hamburg 100.0
Company Type Location Equity Share in
in € million1) equity
in %2)
Group foreign service companies
Hans L. Grauerholz GmbH *1) Germany, Hamburg 100.0
GSM Gesellschaft für Service Management mbH *1) Germany, Hamburg 100.0
FL Servicegesellschaft m.b.H. *1) Germany, Munich 100.0
Skola Hotelnictivi A Gastronom *1) Czech Republic, Prague 100.0
ITM Praha s.r.o. *2) Czech Republic, Prague 29.1
ML Sicherheitszentrale GmbH *2) Germany, Mannheim 30.0
Mannheimer ALLFINANZ Versicherungsvermittlung AG *1) Germany, Mannheim 100.0
dmuk Dt. Mittelstands-Unterstützungskasse GmbH *1) Germany, Mannheim 100.0
UFL UNIQA Finance Life Service GmbH *1) Germany, Mannheim 100.0
Financni poradci s.r.o. *1) Czech Republic, Prague 75.0
Claris Previdenza *1) Italy, Milan 100.0
UNIQA Software Service d.o.o. *1) Croatia, Zagreb 100.0
Vitosha Auto OOD Full Bulgaria, Sofia –0.1 100.0
Syntegra S.R.L. *1) Romania, Klausenburg 100.0
Agenta-Consulting Kft. *1) Hungary, Budapest 100.0
UNIQA Software Service-Polska Sp.z o.o *1) Poland, Lodz 100.0
AGENTA consulting s.r.o. *1) Czech Republic, Prague 100.0
AGENTA Consulting Sp z oo w organizacji *1) Poland, Lodz 100.0
Financial and strategic domestic shareholdings
Medial Beteiligungs-Gesellschaft m.b.H. Equity 1010 Vienna 11.2 29.6
Medicur-Holding Gesellschaft m.b.H.**) Equity 1020 Vienna –18.4 25.0
ÖVK Holding GmbH Equity 1030 Vienna 5.0 25.0
PKB Privatkliniken Beteiligungs-GmbH**) Equity 1010 Vienna 20.2 50.0
STRABAG SE**) Equity 9500 Villach 467.6 25.0
Humanomed Krankenhaus Management Gesellschaft m.b.H. Equity 1040 Vienna 1.1 44.0
Privatklinik Villach Gesellschaft m.b.H. & Co. KG *2) 9020 Klagenfurt 34.9
ÖPAG Pensionskassen Aktiengesellschaft Equity 1203 Vienna 20.3 40.1
call us Assistance International GmbH Equity 1090 Vienna 0.6 61.0
EBV Leasing Gesellschaft m.b.H. Equity 1061 Vienna 0.3 50.0
UNIQA Leasing GmbH Full 1061 Vienna 0.1 100.0
UNIQA Human Resources-Service GmbH Full 1020 Vienna 0.3 100.0
UNIQA Beteiligungs-Holding GmbH Full 1029 Vienna 140.2 100.0
UNIQA Erwerb von Beteiligungen Gesellschaft m.b.H. Full 1029 Vienna 12.4 100.0
Austria Hotels Betriebs-GmbH3) Full 1010 Vienna 8.3 100.0
Wiener Kongresszentrum Hofburg Betriebsgesellschaft m.b.H. *2) 1010 Vienna 24.5
JALPAK International (Austria) Ges.m.b.H. *2) 1010 Vienna 25.0
Allrisk-SCS-Versicherungsdienst Gesellschaft m.b.H. Equity 2334 Vösendorf-Süd 0.0 37.5
Company Type Location Equity Share in
equity
in € million1) in %2)
Real-estate companies
Fundus Praha s.r.o. Full Czech Republic, Prague 2.2 100.0
UNIQA Reality s.r.o. Full Czech Republic, Prague 0.7 100.0
UNIQA Real s.r.o. Full Slovakia, Bratislava 1.0 100.0
UNIQA Real II s.r.o. Full Slovakia, Bratislava 1.0 100.0
Steigengraben-Gut Gesellschaft m.b.H. *1) 1020 Vienna 100.0
Raiffeisen evolution project development GmbH Equity 1030 Vienna 23.2 20.0
DIANA-BAD Errichtungs- und Betriebs GmbH Equity 1020 Vienna 0.9 33.0
UNIQA Real Estate AG Full 1029 Vienna 8.7 100.0
"Hoher Markt 4" Besitzgesellschaft m.b.H. Full 1020 Vienna 9.0 100.0
UNIQA Praterstraße Projekterrichtungs GmbH Full 1029 Vienna 26.4 100.0
Aspernbrückengasse Errichtungs- und Betriebs GmbH Full 1029 Vienna 6.0 100.0
UNIQA Plaza Irohadaz es Ingatlankezelö Kft Full Hungary, Budapest 1.2 100.0
MV Augustaanlage GmbH & Co. KG Full Germany, Mannheim 16.3 100.0
MV Augustaanlage Verwaltungs-GmbH Full Germany, Mannheim 0.0 100.0
AUSTRIA Hotels Liegenschaftsbesitz AG3) Full 1010 Vienna 32.9 99.5
Passauerhof Betriebs-Ges.m.b.H.3) Full 1010 Vienna 1.3 100.0
Austria Österreichische Hotelbetriebs s.r.o.3) Full Czech Republic, Prague 21.3 100.0
Grupo Borona Advisors, S.L. Ad *1) Spain, Madrid 74.6
MV Grundstücks GmbH & Co. Erste KG Full Germany, Mannheim 3.9 100.0
MV Grundstücks GmbH & Co. Zweite KG Full Germany, Mannheim 6.3 100.0
MV Grundstücks GmbH & Co. Dritte KG Full Germany, Mannheim 5.0 100.0
HKM Immobilien GmbH *1) Germany, Mannheim 100.0
CROSS POINT, a.s. Full Slovakia, Bratislava 4.8 100.0
Aniger s.r.o. Full Czech Republic, Prague 4.2 100.0
Floreasca Tower SRL Full Romania, Bucharest –0.3 100.0
Pretium Ingatlan Kft. Full Hungary, Budapest 1.1 100.0
UNIQA poslovnic centar Korzo d.o.o. Full Croatia, Rijeka 0.8 100.0
RK Invest Kft. Full Hungary, Budapest 0.8 100.0
Knesebeckstraße 8–9 Grundstücksgesellschaft mbH Full Germany, Berlin 0.2 100.0
UNIQA Real Estate Bulgaria EOOD *1) Bulgaria, Sofia 100.0
UNIQA Real Estate BH nekretnine, d.o.o *1) Bosnia and Herzegovina, Sarajevo 100.0
UNIQA Real Estate d.o.o *1) Serbia, Belgrade 100.0

*1) Unconsolidated company.

*2) Associated not "at equity" valued company.

1) In the case of fully consolidated companies, the value of the stated equity equals the local annual accounts, while in the case of companies valued at equity, it equals the latest annual accounts published or, with companies marked with **), the latest Group accounts published.

2) The share in equity equals the share in voting rights before minorities, if any.

3) Consolidated on the basis of a non-calendar financial year (balance sheet date 30 September).

Approval for publication

These Group consolidated financial statements were compiled by the Management Board as of the date of signing and approved for publication.

Konstantin Klien Hannes Bogner Andreas Brandstetter Karl Unger Gottfried Wanitschek

Vienna, 2 April 2007

Financial Section

Auditor's Opinion (report of the independent auditor)

Report on the consolidated financial statements

We have audited the German version of the consolidated financial statements of UNIQA Versicherungen AG, Vienna, for the financial year from 1 January to 31 December 2006. These Group consolidated financial statements include the consolidated balance sheet as at 31 December 2006, the consolidated income statement, the Group cash flow statement and the statement of changes in Group equity for the financial year ending 31 December 2006, as well as a summary of the most important methods of accounting and valuation applied and other notes.

Legal representatives' responsibility for the consolidated financial statements

The legal representatives of the company are responsible for the preparation of consolidated financial statements that give a true and fair view of the net assets, the financial position and the profit situation of the Group, in agreement with the International Financial Reporting Standards (IFRS) as applied in the EU. This responsibility includes the design, implementation and maintenance of an internal control system, to the extent that this is important for the preparation of the consolidated statements and the negotiation of as true a picture as possible of the Group's net assets, financial position and profit situation, so that these consolidated statements are free from material misrepresentations, whether due to intentional or unintentional mistakes: It also includes the choice and application of suitable accounting and valuation methods and the effecting of estimates that appear appropriate under the existing circumstances.

The auditor's responsibility

We are responsible for rendering an audit opinion on these consolidated financial statements on the basis of the audit performed by us. Our audit was conducted in accordance with the prevailing statutory provisions and the International Standards on Auditing (ISA) as published by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). These principles require that we conform to the ethics of the profession and plan and execute the audit in such a manner that we can judge, with a sufficient degree of certainty, whether the consolidated financial statements are free from material misstatements.

An audit includes the execution of audit procedures to verify the amounts and other statements in the consolidated financial statements. The choice of audit procedures depends on the conscientious discretion of the auditor, taking into consideration his estimate of the chance that a material misstatement has been made, whether due to an intentional or an unintentional mistake. When estimating the level of this risk, the auditor takes the internal control system into consideration, to the extent that it is of significance for preparing the consolidated financial statements and providing as true and fair a view as possible of the Group's net assets, financial position and profit situation, in order to determine the appropriate audit procedures under the circumstances; the auditor does not, however, give an opinion on the effectiveness of the Group's internal control system. The audit also includes our evaluation of the adequacy of the accounting principles and valuation methods applied and the material estimates made by the legal representatives of the company, as well as an assessment of the overall tenor of the consolidated financial statements.

We believe that we obtained sufficient and suitable verification with our audit, so that our audit provides a reasonably sound basis for our opinion.

Audit opinion

Our audit did not lead to any objections. In our opinion, based on the findings of our audit, the consolidated financial statements comply with the statutory requirements and give as accurate a view as possible of the net assets and financial position of the Group as of 31 December 2006, as well as the group's profit situation and cash flow for the financial year from 1 January to 31 December 2006, in accordance with the International Financial Reporting Standards (IFRS), as applicable in the EU.

Report on the Group management report

Due to the prevailing statutory provisions in Austria, the Group management report is to be audited as to whether it is in agreement with the consolidated financial statements and whether or not other statements in the Group management report give a false impression of the situation of the Group.

The Group management report agrees with the consolidated financial statements.

KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

Vienna, 3 April 2007

Chartered Accountant Chartered Accountant

Report of the Supervisory Board

During the past financial year, the Supervisory Board was regularly informed of the business development and the situation of the Group and the company by the Management Board. It also supervised the Management Board's conduct of business. In the Supervisory Board meetings held in 2006, the Management Board presented detailed quarterly reports and provided additional oral and written reports to the Supervisory Board. The Supervisory Board was given timely and comprehensive information about those measures requiring its approval.

Focus of the meetings

The meetings focussed on the Group's earnings situation and its further strategic development. The Supervisory Board had five meetings in 2006. One decision was made by circulating it in writing. In the meeting on 15 March 2006, the Supervisory Board mainly discussed the companies' preliminary results for 2005 and the progress of expansion measures in Ukraine and Serbia. The Supervisory Board also made a decision concerning the implementation of the changes to the code of corporate governance (as amended in January 2006). The meeting of the Supervisory Board on 24 April 2006, focussed on a discussion of the annual financial statements and the Group's consolidated financial statements as at 31 December 2005, as well as the report of the Management Board about the development of the Group in the first quarter of 2006. The changes in the Supervisory Board that took place at the annual general meeting required a reorganisation of the Supervisory Board which took place on 15 May 2006. In the meeting of the Supervisory Board held on 12 September 2006, the Supervisory Board essentially dealt with company trends in the first half of 2006. Aside from covering the earnings of the company in the first three quarters of 2006, the Supervisory Board discussed at its meeting on 28 November 2006 the business plan for 2007, and measures to further strengthen the capital structure of the company and approved the issuance of supplementary capital amounting to €250 million.

Committees of the Supervisory Board

To facilitate the work of the Supervisory Board and to improve its efficiency, additional committees were set up in addition to the mandatory financial audit committee. The Working Committee mainly talked about the development of the Group's earnings, the company's long-term strategy and discussed possible acquisition projects. They had four meetings in 2006, and made four decisions by circulating them in writing. The Committee for Board Affairs met twice to deal with the legal employment formalities of the members of the Management Board. The Investment Committee had three meetings about the capital investment strategy and questions of the capital structure. In its meeting, the Audit Committee concentrated on all audit documents and the Management Board's proposed appropriation of earnings, and reported to the Supervisory Board. The various chairmen of the committees informed the members of the Supervisory Board about the meetings and their committee's work.

Financial statements and consolidated financial statements

The financial statements prepared by the Management Board and the management report of UNIQA Versicherungen AG, as well as the consolidated financial statements prepared according to the International Financial Reporting Standards (IFRS) and the Group management report for the year 2006, were audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Ste uerberatungsgesellschaft and given an unqualified audit opinion. The Supervisory Board noted the results of the audit with approval.

The Supervisory Board consented to the consolidated financial statements and the financial statements of UNIQA Versicherungen AG and agreed to the Group management report and the management report. The 2006 financial statements were thereby adopted in accordance with Section 125 of the Stock Corporation Law.

The proposed appropriation of earnings submitted by the Management Board to the Supervisory Board was examined and approved by the Supervisory Board. On this basis, a dividend distribution of 35 cents per share will be proposed at the annual general meeting on 21 May 2007.

The Supervisory Board thanks the Management Board and all staff members for their commitment and the work they have done.

Vienna, April 2007

On behalf of the Supervisory Board

Christian Konrad

Glossary

Acquisition costs

The amount paid in currency or currency equivalent in acquiring an asset, or the current fair value of another form of payment at the time of acquisition.

Actuarial provision

Provision in the amount of the existing obligation to pay insurance claims and premium refunds, mainly in life and health insurance. The provision is calculated in line with actuarial methods as the balance of the cash value of future obligations less the cash value of future premiums.

Affiliated companies

Affiliated companies are the parent and its subsidiaries. Subsidiaries are companies in which the parent may exercise a controlling influence on business policy. This is the case, for instance, if the parent directly or indirectly holds more than half of the voting rights, if control agreements have been concluded or if the parent is in a position to nominate the majority of the members of the Management Board, or of other controlling bodies of the subsidiary.

Asset allocation

The structure of the investments, i.e. the portion of the total investments invested in the different vehicles of investment (e.g. shares, fixed income securities, holdings, real estate, money market instruments).

Asset liability management

Management concept in which decisions regarding company assets and liabilities are coordinated. This involves a continuous process in which strategies for assets and liabilities are formulated, implemented, monitored and revised, in order to achieve the financial goals with defined risk tolerances and restrictions.

Associated companies

These are participating interests consolidated at equity, i.e. by including them in the consolidated financial statements with the corresponding share in the equity. The major prerequisite for doing so is the possibility of the Group exercising a decisive influence on the operating and financial policy of the associated companies, regardless of whether the Group actually exercises that influence.

At amortised cost

Recognised on the balance sheets at the amortised cost, i.e. the difference between acquisition costs and the redemption amount is spread out over the corresponding pro rata term or capital share.

Benchmark method

An accounting and valuation method preferred under IFRS.

Book value (amortised acquisition costs)

The original acquisition costs minus lasting reduction in value and differences between acquisition costs and redemption amount are credited or debited to acquisition costs, with an effect on income until the amount falls due.

Cash flow statement

Shows the cash surplus from operating, investing and financing activities generated by the company during a specific period (source and use of funds).

Combined ratio

Sum of the operating expenses and the insurance benefits (both retained) in relation to the premiums earned in property and casualty insurance.

Corporate governance

Corporate governance refers to the legal and factual framework of the management and monitoring of companies. Corporate governance regulations are geared towards transparency and thus strengthen the trust in management and control focusing on value creation.

Cost ratio

Operating expenses (retained) in relation to premiums earned.

Deferred acquisition costs

These comprise the expenses incurred by an insurance company for concluding new insurance policies or renewing existing policies. Amongst other costs, they include acquisition commissions and expenses for handling the proposal form and risk underwriting.

Deferred taxes (active/passive)

Deferred taxes arise from temporary differences between the commercial balance sheet and the balance sheet for tax purposes, and those resulting from uniform valuation standards throughout the Group. The calculation of deferred taxes is based on the specific tax rates of each country that the Group companies are based in; changes in the tax rate that have been decided on as at the balance sheet date are included.

Deposits receivable/payable under reinsurance business

Amount receivable by the reinsurance company from the ceding company on the basis of the reinsurance business accepted by the reinsurer and which, for the latter, is similar to an investment. The amount equals the amount the ceding company provides as collateral. Analogously: deposits payable.

Derivatives

Financial contracts whose value depends on the price development of an underlying asset.

Direct insurance business

Insurance contract taken out by a direct (primary) insurance company with a private person or company, as opposed to reinsurance business accepted (indirect business) which refers to the business accepted from another direct (primary) insurer or reinsurance company.

Diversification

Diversification is a business policy instrument that generally involves positioning or distributing the activities of a company over various areas to avoid dependence on single factors.

Duration

The weighted average maturity of an interest-sensitive financial investment or a portfolio. It is a risk measure of the sensitivity of financial investments to changes in the rate of interest.

Earnings per share (ordinary/diluted)

The consolidated profit for the year divided by the average number of shares outstanding. Diluted earnings per share include subscription rights exercised or to be exercised in the number of shares, and in the consolidated profit for the year.

Earned premiums

The premiums earned on an accrual basis, which determine the year's income. For calculating the amount of earned premiums, in addition to gross premiums written, the change in unearned premiums in the business year, the provision for expected cancellations and other receivables from unwritten premiums are considered.

Equity method

Method used for recognising the interests in associated companies. They are, in principle, valued at the Group's share in the equity of these companies. In the case of interests in companies which also prepare consolidated financial statements, the valuation is based on the share in Group equity. Under current valuation, this measurement is to be adjusted for proportional equity changes, with the interest in the net income for the year being allocated to the consolidated result.

FAS

US Financial Accounting Standards laying down specifics of US GAAP (Generally Accepted Accounting Principles).

Goodwill

Excess over the purchase price for a subsidiary and the share in its equity after winding up the hidden reserves attributable to the purchaser on the date of acquisition.

Gross amounts

Presentation of the balance sheet items prior to the deduction of the amount which is allocated to the business ceded to a reinsurer.

Hedging

A way of insuring oneself against unwanted price fluctuations by the use of adequate counter positions, particularly in derivatives.

IAS

International Accounting Standards.

IFRS

International Financial Reporting Standards. As of 2002, the term IFRS refers to the entire concept of standards adopted by the International Accounting Standards Board. Standards that were adopted before that are still called International Accounting Standards (IAS).

Insurance benefits

Expenses (net of the reinsurer's share) arising from claim settlement, premium refunds and profit participation, and from changes in the actuarial provisions.

Loss ratio

Retained insurance benefits in property and casualty insurance, in relation to premiums earned.

Minority interests

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

Minority interests in net profit

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

Multitranches

Bonds involving a put option under which the seller can sell additional bonds (with an identical or shorter term) to the buyer. The buyer receives a premium which increases the yield on the security as opposed to a "normal" security having the same term and yield.

Operating expenses

This item includes acquisition expenses, the handling of the policy portfolio and reinsurance expenses. After deduction of commissions and profit participations received under reinsurance business ceded, the remaining expenses are the net operating expenses.

Premiums

Total premiums written. All compulsory premiums in the financial year, from insurance policies in direct business and reinsurance business accepted.

Profit participation

In life and health insurance, the policyholders are entitled by law and by contract to an adequate share in the profits generated by the company. The amount is reset every year.

Provision for outstanding claims

This provision includes the obligations for payment of insurance claims which have already occurred on the reporting date, but which are not yet completely settled.

Provision for premium refunds and profit participation

The part of the profit to be distributed to the policyholders is appropriated to a provision for premium refunds and/or profit participation. The provision also includes deferred amounts.

Reinsurance

An insurance company would cede parts of its own risk to another insurance company.

Reinsurance premiums ceded

Share of the premiums paid to the reinsurer as a consideration for insuring certain risks.

Retention

The part of the risks assumed which the (re)insurer does not cede.

Retrocession

Retrocession is the ceding of reinsurance business accepted to a retrocessionaire. Professional reinsurance companies and also other insurance companies, within their internal reinsurance business, use retrocession as an instrument for spreading and controlling risks.

Return on equity (ROE)

The return on equity (before tax) is the profit on ordinary activities in relation to the average total equity (without consideration of the contained net profit). It is used as a general indication of the company's efficiency.

Revaluation reserves

Unrealised profits and losses resulting from the difference in the present market value and acquisition value and/or the amortised acquisition costs for fixed interest securities are allocated to this reserve, without affecting income, after the deduction of deferred taxes and provisions for deferred profit participation (in life insurance).

Risk

The possibility that negative factors could influence the future financial situation of the company. Furthermore, in the insurance business, risk is understood as the possibility that a claim will arise because a danger that has been ensured against occurs. The insured object or insured person is also frequently referred to as a risk.

Risk management

Ongoing, systematic and continuous identification, analysis, evaluation and management of potential risks that could endanger the assets, financial situation and profits of a company over the medium and long terms. Target: to ensure the continued existence of a company, secure the company goals against disruptive events, with the aid of appropriate measures, and improve the company value.

Securities available for sale

Available-for-sale securities are securities that are neither meant to be held until maturity nor have they been acquired for short-term trading purposes; available for sale at any time, they are recognised at par value on the balance sheet date.

Securities held to maturity

Securities representing money claims which are held with the intention of keeping them to maturity. They are recognised at amortised cost.

Solvability

Level of own funds in an insurance company.

Stress test

Stress tests are a special form of scenario analysis with the goal of being able to quantify the potential loss of portfolios during extreme fluctuations in the market.

Subordinate debt

Debt which is honoured in the case of winding up or bankruptcy only after all the other debts have been settled.

Supplementary capital

Capital paid in which is agreed to remain at the insurance company's disposal for at least five years, with no cancellation possible; it accrues interest only to the extent that this is covered by the net profit for the year. It can only be repaid prior to liquidation after a pro rata deduction of the net losses incurred during the retention period; in the case of liquidation, it can only be redeemed after those payables have been settled or secured that do not constitute equity or participation capital.

Trading portfolio (held for trading)

Debt securities, shares and other securities (primarily derivatives and structured products) which are held mainly for short-term trading purposes. They are recognised at current market value.

Unearned premiums

That part of the premium income of the year which refers to periods of insurance that lie after the reporting date, i.e. which have not yet been earned on the reporting date. In the balance sheet, with the exception of life insurance, unearned premiums have to be shown as a separate line item under the actuarial provisions.

US GAAP

US Generally Accepted Accounting Principles.

Value at risk

A method for measuring market risks in order to calculate the expected value of a loss that might occur in an unfavourable market situation, with a determined probability within a defined period of time.

Contacts

Austria

UNIQA Versicherungen AG Untere Donaustrasse 21 A-1029 Vienna MMag. Stefan Glinz Tel.: (+43) 1 211 75 - 3773 Fax: (+43) 1 211 75 - 793773 E-mail: [email protected] www.uniqagroup.com

UNIQA Personenversicherung AG

Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 211 75 - 0 Fax: (+43) 1 214 33 36 E-mail: [email protected] www.uniqa.at

UNIQA Sachversicherung AG

Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 211 75 - 0 Fax: (+43) 1 214 33 36 E-mail: [email protected] www.uniqa.at

Raiffeisen Versicherung AG

Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 211 19 - 0 Fax: (+43) 1 211 19 - 1134 E-mail: [email protected] www.raiffeisen-versicherung.at

Finance Life

Lebensversicherung AG Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 214 54 01 - 0 Fax: (+43) 1 214 54 01 - 3780 E-mail: [email protected] www.financelife.com

CALL DIRECT Versicherung AG

Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 211 09 - 2858 Fax: (+43) 1 211 09 - 2859 E-mail: [email protected] www.calldirect.at

Salzburger

Landes-Versicherung AG Auerspergstrasse 9 A-5021 Salzburg Tel.: (+43) 662 86 89 - 0 Fax: (+43) 662 86 89 - 669 E-mail: [email protected] www.salzburger.biz

International

bosniA and herzegowina UNIQA Osiguranje d.d. Fra Anðela Zvidovica 1 ´ BiH-71000 Sarajevo Tel.: (+387) 33 295 500 Fax: (+387) 33 295 541 E-mail: [email protected] www.uniqa.ba

BulgarIA

UNIQA Insurance plc W Gladstone Str. 5 BG-1000 Sofia Tel.: (+359) 2 9156 333 Fax: (+359) 2 9156 300 E-mail: [email protected] www.uniqa.bg

UNIQA Life Insurance plc Iskar Str. 8 BG-1000 Sofia Tel.: (+359) 2 9359 595 Fax: (+359) 2 9359 596 E-mail: [email protected] www.uniqa.bg

CROATIA

UNIQA osiguranje d.d. Savska cesta 106 HR-10000 Zagreb Tel.: (+385) 1 6324 200 Fax: (+385) 1 6324 250 E-mail: [email protected] www.uniqa.hr

CZECH REPUBLIC

UNIQA pojištovna a.s. Evropská 136 CZ-16012 Prague 6 Tel.: (+420) 225 393 111 Fax: (+420) 225 393 777 E-mail: [email protected] www.uniqa.cz

GERMANY

Mannheimer AG Holding Augustaanlage 66 D-68165 Mannheim Tel.: (+49) 180 220 24 Fax: (+49) 180 299 99 92 E-mail: [email protected] www.mannheimer.de

Mannheimer Versicherung AG Augustaanlage 66 D-68165 Mannheim Tel.: (+49) 180 220 24 Fax: (+49) 180 299 99 92 E-mail: [email protected] www.mannheimer.de

Mannheimer Krankenversicherung AG Augustaanlage 66 D-68165 Mannheim Tel.: (+49) 180 220 24 Fax: (+49) 180 299 99 92 E-mail: [email protected] www.mannheimer.de

mamax Lebensversicherung AG Augustaanlage 66 D-68165 Mannheim Tel.: (+49) 800 62 62 92 66 Fax: (+49) 621 457 45 05 E-mail: [email protected] www.mamax.com

HUNGARY

UNIQA Biztosító Zrt. Róbert Károly krt. 76–78 H-1134 Budapest Tel.: (+36) 1 238 60 00 Fax: (+36) 1 238 60 60 E-mail: [email protected] www.uniqa.hu

ITALY

UNIQA Assicurazioni S.p.A. Via Carnia 26 I-20132 Milan Tel.: (+39) 02 268 583-1 Fax: (+39) 02 268 583-440 E-mail: [email protected] www.uniqagroup.it

UNIQA Previdenzia S.p.A. Via Carnia 26 I-20132 Milan Tel.: (+39) 02 281 891 Fax: (+39) 02 281 89 200 E-mail: [email protected] www.uniqagroup.it

CARNICA Assicurazioni S.p.A. Viale Venezia 99 I-33100 Udine Tel.: (+39) 0432 536 311 Fax: (+39) 0432 530 548 E-mail: [email protected] www.uniqagroup.it

LIECHTENSTEIN

UNIQA Versicherung AG Neugasse 15 LI-9490 Vaduz Tel.: (+423) 237 50 10 Fax: (+423) 237 50 19 E-mail: [email protected] www.uniqa.li

POLAND

UNIQA TU S.A. ul. Gdanska 132 PL-90520 Lodz Tel.: (+48) 42 63 44 700 Fax: (+48) 42 63 77 430 E-mail: [email protected] www.uniqa.pl

UNIQA TU na ˚ Zycie S.A. ul. Gdanska 132 PL-90520 Lodz Tel.: (+48) 42 63 44 700 Fax: (+48) 42 63 65 003 E-mail: [email protected] www.uniqa.pl

TU Filar S.A. ul. ˚ Zubrów 3 PL-71617 Szczecin Tel.: (+48) 91 42 54 500 Fax: (+48) 91 42 21 610 E-mail: [email protected] www.filar.pl

ROMANIA

ASTRA S.A. Strada Nerva Traian 3 RO-Sector 3 Bucharest Tel.: (+40) 8000 800 88 Fax: (+40) 21 318 80 74 E-mail: [email protected] www.astra-uniqa.ro

SERBIA

UNIQA a.d.o. Milutina Milankovica 134 G SRB-11070 Belgrade Tel.: (+381) 11 20 24 100 Fax: (+381) 11 20 24 160 E-mail: [email protected] www.uniqa.co.yu

SLOVAKIA

UNIQA poistovnˇa a.s. Lazaretská 15 SK-82007 Bratislava 27 Tel.: (+421) 2 57 88 32 11 Fax: (+421) 2 57 88 32 10 E-mail: [email protected] www.uniqa.sk

SWITZERLAND

UNIQA Re AG Lavaterstrasse 85 CH-8002 Zürich Tel.: (+41) 43 344 41 30 Fax: (+41) 43 344 41 35

UNIQA Assurances S.A. Rue des Eaux-Vives 94 Case postale 6402 CH-1211 Geneva 6 Tel.: (+41) 22 718 63 00 Fax: (+41) 22 718 63 63 E-mail: [email protected] www.uniqa.ch

UKRAINE

Credo-Classic Reytarskaya Str. 37 UA-01034 Kiev Tel.: (+380) 44 230 99 30 Fax: (+380) 44 238 63 12 E-mail: [email protected] www.credo-classic.com

Imprint

Owner and publisher

UNIQA Versicherungen AG Untere Donaustrasse 21 (UNIQA Tower) A-1029 Vienna

Commercial registry no.: 92933t Data processing register: 0055506

Investor relations

UNIQA Versicherungen AG Stefan Glinz Untere Donaustrasse 21 A-1029 Vienna Tel.: (+43) 1 211 75 - 3773 Fax: (+43) 1 211 75 - 793773 E-mail: [email protected]

www.uniqagroup.com

Information

UNIQA's Group Report is published in German and English and can be downloaded as a PDF file from the investor relations area on our Group website. The annual report of the UNIQA Group's Austrian insurance companies can also be downloaded at this address.

The interactive online version of UNIQA's Group Report is available at ar2006.uniqagroup.com.

Concept and design Kirchhoff Consult AG, Hamburg

Printed by AV+Astoria Druckzentrum GmbH, Vienna

Translation

Interlingua Language Services GmbH, Vienna

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