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Vienna Insurance Group AG — Interim / Quarterly Report 2009
Oct 13, 2009
766_ir_2009-10-13_622a7ba8-4c27-4035-be40-4f76150f756f.pdf
Interim / Quarterly Report
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HALF YEAR FINANCIAL REPORT 2009
LETTER FROM THE CHAIRMAN OF THE MANAGING BOARD
Dear Shareholders, Dear Madam/Sir!
The 2nd quarter of 2009 saw a change that few would have dared to predict to this extent. Share prices of precisely those companies with a heavy involvement in the CEE region, most of which are based in Austria, began to recover strongly from the extreme lows
recorded in the initial months of the year.
Among those shares, VIG's share price in particular showed a sensational performance, far exceeding most of its European competitors. The price of VIG share has risen approximately 45% since the beginning of the year, compared to an increase of only about 2% for the sector as a whole. Happily, this reflects the changed – and in my opinion more realistic – assessment by the capital markets of future economic developments in the CEE region and Austria.
Thus, investors now share our view that the business outlook is good in our core markets in particular, even with more subdued conditions. As a result, this year our shareholders will benefit in two ways: from this remarkable share price development, as well as from the loyalty bonus to be paid in the 4th quarter of 2009.
The consistent results published by the Vienna Insurance Group undoubtedly also contributed to this satisfying turn of events.
This trend was also maintained over the past months. In spite of weaker currencies and a number of restructurings in our portfolios, Group premiums rose slightly to EUR 4.3 billion in the 1st half of 2009. Profit before taxes was EUR 230 million, and was significantly influenced by the solid operating performance of our Group companies. Rapid implementation of measures aimed at reducing operating expenses played a particularly important role in this. As a result, the Vienna Insurance Group's combined ratio managed to move in the opposite direction from the market, coming in below the ratio achieved in the comparable period a year ago, as well as below that of the 1st quarter of 2009. We intend to use our efficiency improvement programme to maintain this trend in the future.
In so doing, we aim to ensure that the Vienna Insurance Group continues to offer stability and – given appropriate market conditions – growth, consistent with the outlook provided by a new analysis of the Vienna Insurance Group recently prepared by an international bank of the highest renown.
Yours sincerely,
Günter Geyer
MANAGEMENT REPORT
BUSINESS DEVELOPMENT
In the first six months of 2009, Vienna Insurance Group achieved a total of consolidated premiums written of EUR 4.25 billion. Based on euros, this corresponds to an increase of 0.9% compared to the same period of the previous year. The net earned premiums rose by 4.1% (based on euros).
The Group companies of Vienna Insurance Group managed to stay on a growth path despite the currently difficult economic situation. Based on local currencies Vienna Insurance Group registered a significant plus of 6.3% of premiums written, while the net earned premiums climbed by 9.7%.
The Group profit before taxes amounted to EUR 230.25 million in the first six months of 2009 which is, compared to the international industry, a very good result. The difficult situation in the capital markets as well as the one-off effects of the sale of BA-CA Versicherung and Unita last year led to a year-on-year decline (-20.1%). Compared to the 1st half of 2007, Vienna Insurance Group even succeeded in increasing the result by EUR 15 million; this corresponds to a plus of 7%. The adverse effects arising from storm damages – predominantly in Austria and the Czech Republic – were more than compensated for by the cost-cutting restructuring measures implemented by the management.
The combined ratio of the Group after reinsurance (excluding income from investments) stood at 95.5% during the first six months of the current year; this is a slight improvement – contrary to the market trends. The loss ratio increased by about EUR 20 million net or 1.6 percentage points (which was mainly due to storm damages), while the Group's expense ratio dropped by 2.1 percentage points, corresponding to an amount of EUR 36 million.
The financial result for the first six months of 2009 amounted to EUR 471.58 million. The minus of 23.8% reflects the continuing difficult situation in the capital markets. A comparison with prior-year data is possible only to a limited extent due to the non-recurring effects of the sale of BA-CA Versicherung and Unita last year.
As of 30 June 2009, the investments of the Group amounted to EUR 25.08 billion. This is a 2.2% increase from the level of 31 December 2008. The shareholders' equity of the Group increased by 8.5% to a total of EUR 4.49 billion.
BUSINESS DEVELOPMENT BY BUSINESS SEGMENTS
Property/Casualty insurance
In the property/casualty segment, total premiums written of EUR 2.35 billion were registered. Based on local currencies, a
4.5% growth was achieved in this segment (-2.3% on a euro basis). The Group even succeeded in increasing the net earned premiums in this segment by 10.4% based on local currencies.
In the CEE markets, the Group companies of the Vienna Insurance Group registered an increase in premiums of 6.4% (in local currencies) compared to the same period of the previous year. Based on euros, they posted premiums written of EUR 1.35 billion (-4.9%).
In the non-CEE countries, premiums in this segment totalled
EUR 999.47 million, corresponding to a year-on-year increase of 1.6%. In Austria, the Group companies registered premiums amounting to EUR 962.60 million, i.e. a plus of 1.6%. In Germany, premiums totalled EUR 36.87 million; this is a pleasing 3.5% increase compared to the first six months of the previous year.
Group premiums significantly above EUR 4 billion Profit before taxes of about EUR 230 million
Double-digit growth in numerous CEE markets
Life insurance
In the life insurance segment, the Group companies of Vienna Insurance Group reported a total of premiums written of EUR 1.74 billion, i.e. plus 5.2% compared to the same period of the previous year. This favourable result may be attributed mainly to the companies of s Versicherung. Vienna Insurance Group achieved a substantial increase of 9.8% in net earned premiums compared to the same period of the previous year.
With premiums written totalling EUR 627.40 million, a remarkable plus of 11.7% was registered in the CEE markets. Doubledigit growth rates were reported in this segment, in particular in the Czech Republic, Slovakia, Romania, Croatia, Bulgaria and Hungary.
In non-CEE countries, premiums written in the life insurance segment amounted to EUR 1.11 billion, corresponding to an increase of 1.8% compared to the same period of the previous year.
Health insurance
In the health insurance segment, Vienna Insurance Group achieved a 2.9% increase in premiums written, amounting to EUR 162.85 million.
BUSINESS DEVELOPMENT BY REGION
Austria
In the first six months of 2009, the Group companies of Vienna Insurance Group in Austria registered a total of premiums written of EUR 2.19 billion, corresponding to a year-on-year increase of 3.1%.
In the property/casualty segment, premiums increased by 1.6% to a total of EUR 962.60 million. In the life insurance segment premiums amounted to EUR 1.06 billion, exceeding the prioryear level by 4.5%. This stable result of premiums is due to the first-time consolidation of s Versicherung. In contrast, Wiener Städtische Versicherung and Donau Versicherung registered a decline in the single premium business in the life insurance segment – in line with the market situation in Austria.
The profit before taxes amounted to EUR 132.35 million (-14.4%). Due to the sale of BA-CA Versicherung and Unita, a prior-year comparison is possible only to a very limited extent. A great success was achieved by the Group as the combined ratio remained on a stable level of 94.7% despite considerable flood and storm damages in the first six months.
Czech Republic
During the 1st half of 2009, the Group companies in the Czech Republic succeeded in continuing their excellent performance of the first three months of the year. Based on euros, a total of premiums written of EUR 776.58 million (+12.4%) was recorded in the first six months of 2009. Premiums totalled EUR 507.64 million (-2.5%) in the non-life insurance segment and EUR 268.94 million (+57.7%) in the life insurance segment.
On a local currency basis, a significant growth of premiums written of 22.9% was reached in all segments. The premium volume in the non-life insurance segment grew by 6.6%, while the life insurance segment registered a 72.4% increase. Based on net earned premiums, an increase of no less than 33.7% was reported compared to the same period of the previous year.
The profit before taxes was stepped up by an excellent 21.5% to EUR 56.32 million. The combined ratio continued to decrease, amounting to 88.4% in the first six months of 2009. This favourable figure is mainly due to the decrease in the expense ratio by 1.6 percentage points, corresponding to more than EUR 6 million.
Slovakia
The result of the first six months of 2009 registered by the Group companies in Slovakia was equally pleasing. With premiums written of EUR 324.40 million, a plus of 9.0% was achieved compared to the same period of the previous year. Net earned premiums increased by 10.2% from the prior-year period.
Premiums in the non-life insurance segment totalled EUR 184.41 million; this corresponds to an increase by 5.1%. In the life insurance segment, a significant plus of 14.8% was achieved from the prior-year level, with premiums amounting to EUR 140.00 million.
In the first six months of 2009, the profit before taxes amounted to EUR 7.68 million. Hence, the profit for the entire year 2008 has been exceeded significantly already now. The combined ratio stood at 96.3%.
Poland
On a euro basis, the Group companies of Vienna Insurance Group recorded a total of premiums of EUR 262.91 million. This corresponds to a minus of 33.3%, which may be attributed almost exclusively to the decline in the single premium business in the wake of the economic crisis.
In the non-life insurance segment, premiums totalled EUR 170.38 million (i.e. a minus of 20.2% on a euro basis). In the life insurance segment, premiums amounted to EUR 92.53 million. This is a decrease by 48.7% compared to the same period of the previous year (euro basis).
Based on local currency, premiums written in the non-life insurance segment went up by 4.8%. In the life-insurance segment a decline by 32.6% was registered. Based on net earned premiums, a significant growth of 7.6% was achieved in the non-life insurance segment.
The profit before taxes increased by 2.6% to EUR 14.42 million. The combined ratio amounted to 99.3%.
Romania
In the first six months of 2009, the Group companies of Vienna Insurance Group posted premiums written of EUR 313.01 million (-13.2%), based on euros. Following the consolidation of the newly acquired life insurance BCR, premiums in the life insurance segment surged by 64.6% (euro basis), totalling EUR 34.59 million. The premium volume in the non-life insurance segment amounted to EUR 278.42 million (-18.0%).
The Group companies of Vienna Insurance Group in Romania achieved an increase in premiums written of 0.6% (based on local currency) compared to the first six months of 2008. An excellent 90.7% increase (in local currency) was registered in the life insurance segment, while the premium volume shrank by 5.0% in the non-life insurance segment due to portfolio adjustments. Based on net earned premiums (in local currency), the Group registered a growth of 9.0% in Romania.
The profit before taxes amounted to EUR 12.07 million. A comparison with prior-year data is not conclusive due to the deconsolidation of Unita. The combined ratio stood at 103.4% but decreased by 4.6 percentage points compared to the same period of the previous year. Despite the increase of the loss ratio by 1.9 percentage points, the combined ratio benefited from the decrease in the expense ratio by 6.4 percentage points.
Other CEE markets
The results of the Group companies of Vienna Insurance Group in the segment Other CEE markets for the first six months of 2009 include the following countries: Bulgaria, Croatia, Serbia, Turkey, Ukraine and Hungary as well as the three Baltic markets. The companies of the Group in Albania and Macedonia were included for the first time. A highly satisfactory increase in premiums (on a euro basis) was registered in Hungary (+44.9%), in Croatia (+18.0%) and in Bulgaria (+49.8%).
The total of premiums written in this segment increased by a remarkable 25.7% to EUR 300.66 million.
With a total of premiums written of EUR 209.32 million, a sizeable plus of 22.1% was achieved in the non-life insurance segment. In the life insurance segment, premiums totalled EUR 91.34 million. This is a pleasing increase of 34.9% compared to the first six months of 2008.
The profit before taxes in this segment (excluding Croatia) amounted to EUR 5.13 million. In Croatia, a one-off provision of about EUR 10 million had to be recognized in the financial statements due to a regulatory reduction of the guaranteed interest on life insurance contracts. This had an adverse effect on the result.
Other markets
In Germany and Liechtenstein, the Group companies registered premiums totalling EUR 88.39 million in the first six months of 2009.
The profit before taxes increased by 11.2% to EUR 9.69 million.
Business development of the Group by region
| Gross premiums written |
Profit before taxes | |||
|---|---|---|---|---|
| 30.6.2009 | 30.6.2008 | 30.6.2009 | 30.6.2008 | |
| in million EUR | ||||
| Austria | 2,185.18 | 2,120.36 | 132.35 | 154.53 |
| Czech | ||||
| Republic | 776.59 | 690.96 | 56.32 | 46.34 |
| Slovakia | 324.40 | 297.52 | 7.68 | 15.86 |
| Poland | 262.91 | 393.93 | 14.42 | 14.06 |
| Romania | 313.01 | 360.52 | 12.07 | 44.55 |
| Other CEE | ||||
| markets | 300.66 | 239.16 | –2.27 | 4.29 |
| Other markets | 88.39 | 112.68 | 9.69 | 8.71 |
| Total | 4,251.14 | 4,215.14 | 230.25 | 288.34 |
BUSINESS DEVELOPMENT OF THE GROUP IN THE 2ND QUARTER 2009
In the 2nd quarter of 2009, the Vienna Insurance Group wrote consolidated premiums (not including other insurance participations) totalling EUR 1.91 billion, representing an increase of 0.1% compared to the same period in the previous year. The financial result (including at equity consolidated companies) for the 2nd quarter of 2009 was EUR 233.43 million.
Expenses for claims and insurance benefits were EUR 1,489.84 million in the 2nd quarter of 2009, representing a decrease of 4.1%. Operating expenses rose only slightly by 1.3% to EUR 413.72 million.
The Vienna Insurance Group recorded a profit before taxes of EUR 109.43 million in the 2nd quarter of 2009.
RISK REPORT
Dealing professionally with risk is one of the core competences of the Vienna Insurance Group. An enterprise risk management process is used to identify, analyse, evaluate, report, control and monitor risks. This allows systematic and comprehensive control of the overall risk position of the Group in a targeted and forward-looking manner. Due to the Vienna Insurance Group's use of this process and its existing financial strength, the Group is well prepared for the future solvency requirements being tested and quantified in the European Quantitative Impact Studies (QIS).
Current topics
In spite of the difficult environment, Standard & Poor's (S&P) reconfirmed the Group's previous A+ rating, thereby once again acknowledging the Group's conservative risk management and high risk capacity.
In addition to this external confirmation of the current enterprise risk management (ERM) system, two key internal projects are aimed at further improving the ERM system. One of these is the assignment to develop an internal capital model in the framework of Solvency II, and the other is the systematic improvement of the integration of subsidiaries within the investment and risk management system, both in organisational terms and by means of an integrated investment management system for the Group. This integrated system conforms to modern GRC standards, where GRC stands for Governance, Risk and Compliance and involves a number of guidelines and requirements that are subject to an international standardisation process.
OUTLOOK
Despite the challenging economic environment, business is expected to develop positively for the remainder of financial year 2009. Owing to the volatile condition of the markets, however, it is impossible to make a concrete forecast at the present time. The development of the life insurance business in the CEE region and the expansion of the health insurance business into important markets of the Vienna Insurance Group are expected to contribute to positive premium growth.
The combined ratio of the Group – in contrast to the market trend – improved still further in the 1st half of 2009, and the plan is to keep this ratio below 100% in the future.
The group-wide, future-oriented action programme announced in March 2009 has already provided initial positive results for the Vienna Insurance Group. In order to continue increasing the Group's competitiveness as number one in the CEE region, even under economically difficult conditions, the Vienna Insurance Group plans within its action programme to reduce costs by EUR 100 million until 2010.
Due to continued uncertainty in financial markets, the Vienna Insurance Group is currently not in a position to provide a concrete forecast of profit before taxes for 2009 as a whole. The volatile situation makes it impossible to reliably forecast the Group's financial result, a major driver of insurance company profits.
CURRENT TOPICS
V.I.G. INTERNATIONAL
Vienna Insurance Group successfully completes the acquisition of TBIH's stakes in Albania, Bulgaria and Macedonia
After having obtained the necessary regulatory approvals, the Vienna Insurance Group has successfully completed the takeover of the TBIH Financial Services Group N.V. (TBIH) stakes in insurance companies in Albania, Bulgaria and Macedonia. The Vienna Insurance Group directly holds 60% of the shares in TBIH, with the Dutch financial group Kardan Financial Services B.V. having a 40% stake.
In Albania, the Vienna Insurance Group has acquired TBIH's directly held majority stake (approximately 87%) in Sigma Sh.a. and now holds 100% of Sigma's shares in Macedonia. In Bulgaria, the Vienna Insurance Group increased its holding in Bulstrad Vienna Insurance Group to approximately 97% and raised its stake in Bulstrad Life Vienna Insurance Group to approximately 92% by acquiring all shares indirectly held by TBIH.
As a result of the restructuring of TBIH's insurance activities, the Vienna Insurance Group increased its stake in Kvarner Vienna Insurance Group and Helios Vienna Insurance Group, both based in Croatia, to 99% and 100%, respectively, at the beginning of 2009.
Expansion of the partnership with Daimler – Sales cooperation in Central and Eastern Europe
In June 2009 a cooperation agreement was signed between the Vienna Insurance Group and Daimler Insurance Services GmbH with the aim of intensifying cooperation with regard to brokering and concluding motor insurance policies in Austria and Central and Eastern Europe.
The cooperation agreement covers a period of five years. The agreement covers eight further countries in Central and Eastern Europe in which the Vienna Insurance Group is represented by its Group companies, including Vienna Insurance Group's core markets such as the Czech Republic, Slovakia, Romania and Poland.
V.I.G. AUSTRIA
Vienna Insurance Group among the top 10 brands in Austria
The European Brand Institute has now for the sixth time conducted its study of Austrian brand values, eurobrand Austria 2009. The Vienna Insurance Group's brand value exceeded EUR 1 billion, placing it among the top 10 brands in Austria and increasing its brand value by outstanding 14.4%. According to the study, the Vienna Insurance Group was one of the top brands in the "banks and insurance companies" sector, where it took the 3rd place.
V.I.G. SLOVAKIA
Vienna Insurance Group achieves further milestone: Number 1 in Slovakia
With its dynamic growth, the Vienna Insurance Group achieved another goal in its CEE strategy. Due to an exemplary catchingup process, the Vienna Insurance Group companies in Slovakia have now become the number 1 in their local insurance market with a market share of 31.5%. Despite the difficult economic conditions, the Vienna Insurance Group has made optimal use of the potential in the Slovakian insurance market in order to make a very successful start to 2009.
In order to further increase efficiency and to optimise the activities of the Vienna Insurance Group in Slovakia, the synergies afforded by the group will be realised to an even greater extent as part of the group-wide and future-oriented 2009 action programme. The Kontinuita and Komunálna companies will thus be merged to form a strong composite insurer. This will allow them to take advantage of the opportunities arising in the Slovakian market even more effectively in the future as well as enabling them to provide optimal customer service.
CAPITAL MARKETS & INVESTOR RELATIONS
CAPITAL MARKETS
International overview
The performance of international equity markets was for the most part positive in the first six months of the current year, in spite of repeated downward revisions of negative economic forecasts. The price losses of the beginning of the year were in most cases recovered by an outstanding performance in the 2nd quarter of 2009, thereby calling a halt to the massive downward trend that had dominated since September 2008. This change was mainly due to the surprisingly good results achieved in the financial sector, as well as to investor confidence in the effectiveness of fiscal and monetary policy measures.
The expected stabilisation in the economy's downturn and an improvement in U.S. consumer sentiment were among the factors leading to improved stock exchange momentum right at the start of the 2nd quarter of 2009. This once again encouraged international investors to invest the massive amounts of available liquidity in the equity markets. The upward movement noticeably flattened out toward the end of the first half of the stock market year, ending with a period of sideways movement.
The Nasdaq market in the U.S. rose more than 16% during the 1st half of the year, as compared to a slight price drop of 3.8% for the U.S. Dow Jones Index. The Eurostoxx 50 Index also ended at a level -2.0% below its year-end value. By contrast, the Japanese leading index, the Nikkei 225, rose more than 12% in the 1st half of 2009.
The CECE Eastern European index also posted an overall positive performance, increasing 2.6%. The massive 1st quarter price losses of more than 20%, resulting from a major lack of confidence in the future economic development of CEE countries, were followed by a reversal of the trend. The 2nd quarter of 2009 showed price gains of 33.3%, mainly as a result of a greater differentiation on the part of investors, rating agencies and the International Monetary Fund in assessing the risk of individual countries.
Vienna Stock Exchange
The ATX, the Vienna Stock Exchange leading index, put in a significant positive performance of 19.9% in the 1st half of the year. While at the beginning of the year a stream of steadily worsening reports and projections of future economic development in CEE countries had led to an interim low of 1,411.95 points reached on 9 March 2009, positive international developments subsequently helped to generate strong price growth. This price increase was also supported by better than expected corporate earnings and a more reliable assessment of the risk of CEE countries. As a result, an increase of more than 50% was recorded, leading to an interim high for the year of 2,190.24 points on 12 June 2009. This was followed by volatile sideways movement, with the index winding up at 2,098.65 at the end of the quarter.
INVESTOR RELATIONS
Market interest in corporate equity investments went up significantly again in the 1st half of 2009. In the case of the Vienna Insurance Group, this was seen, first, in the increased number of meeting requests and, second, in the great interest shown for scheduling one-to-one meetings at banking conferences and roadshows.
As a result, the 2nd quarter of 2009 was also marked by extensive roadshow activities. Working together with an agency specialising in this area, the Investor Relations department organised two roadshows, bringing V.I.G. management to London and Edinburgh, as well as to Toronto, Boston, New York and Chicago. The Vienna Insurance Group also participated in roadshows in Zurich and Warsaw initiated by the Vienna Stock Exchange. In June, a visit was paid to new and existing investors in Stockholm, for a discussion of the Vienna Insurance Group's strategy in the current market environment.
In connection with the Goldman Sachs European Financial Conference in London and Deutsche Bank's German & Austrian Corporate Conference in Frankfurt, V.I.G. management made presentations outlining the continued success of the Group's business model.
All banking conference and roadshow dates, along with the associated presentation materials, are available online at www.vig.com/ir under Financial Calendar and Downloads.
Of particular note is a new analysis published on 24 July 2009 by HSBC. Vienna Insurance Group shares were given an "Overweight" rating in HSBC's initial coverage and a target price of EUR 38.00. Unchanged prospects for long-term growth, combined with good capitalisation and conservative investments, were the deciding factors in HSBC's Buy recommendation. With the addition of HSBC, 16 investment banks have now published research on the Vienna Insurance Group this year.
SHARE
VIENNA INSURANCE GROUP SHARE INFORMATION
Key share information for 1st half 2009
| High | EUR | 31.90 |
|---|---|---|
| Low | EUR | 16.10 |
| Price as of 30 June 2009 | EUR | 30.98 |
| Market capitalisation | EUR | 4.00 billion |
| Dividend 2008 | EUR | 1.10 |
| Bonus dividend 2008 | EUR | 0.90 |
| Average daily stock exchange trading | ||
| volume* | EUR | 4.76 million |
| * using single counting |
Overview of the VIG share
| Initial listing (Vienna) | 17 October 1994 |
|---|---|
| Initial listing (Prague) | 5 February 2008 |
| Number of common shares | 128 million |
| Free float | approx. 30% |
| ISIN | AT0000908504 |
| Securities symbol | VIG |
| Bloomberg | VIG AV /VIG CP |
| Reuters | VIGR.VI / VIG.PR |
| Rating – Standard & Poor's | A+, stable outlook |
Performance of VIG shares
Vienna Insurance Group shares followed the downward lead set by international markets at the beginning of the year, reaching an interim low for the year of EUR 16.10 on 9 March 2009. Since that time, the price of the shares has almost doubled, closing at an interim high of EUR 31.90 on 11 May 2009. This excellent performance of VIG shares was primarily due to the announcement of a bonus dividend payment and the record result earned in 2008, which represented an increase in profit of close to 24%. The publication of 1st quarter results, confirming the stable trend in earnings, provided additional support for the good price performance by VIG shares. As a result, VIG shares outperformed the MSCI Insurance benchmark index by more than 36% in the 1st half of 2009.
In addition, the 3rd quarter price performance, with an increase of around 18% thus far, has been highly gratifying to Vienna Insurance Group shareholders, with shares reaching a further high for the year of EUR 36,53 on 13 August 2009.
Financial Calendar of V.I.G.
| Ex-bonus dividend day | 27 October 2009 |
|---|---|
| Bonus dividend payment day | 27 October 2009 |
| 9M result for 2009 | 10 November 2009 |
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET AS OF 30 JUNE 2009
| ASSETS | 30.6.2009 | 31.12.2008 |
|---|---|---|
| in EUR '000 | ||
| A. Intangible assets | ||
| I. Goodwill | 1,776,841 | 1,416,089 |
| II. Purchased insurance portfolio | 74,547 | 67,569 |
| III. Other intangible assets | 159,904 | 165,283 |
| Total intangible assets | 2,011,292 | 1,648,941 |
| B. Investments | ||
| I. Land and buildings | 3,163,761 | 3,090,411 |
| II. Shares in at equity consolidated companies | 115,967 | 119,651 |
| III. Financial instruments | 21,798,068 | 21,337,503 |
| a) Loans and other investments | 4,942,433 | 5,765,808 |
| b) Other securities | 16,855,635 | 15,571,695 |
| Financial instruments held to maturity | 2,683,512 | 2,347,061 |
| Financial investments available for sale | 12,721,294 | 11,707,295 |
| Financial instruments recognised at fair value through profit and loss* | 1,450,829 | 1,517,339 |
| Total investments | 25,077,796 | 24,547,565 |
| C. Investments of unit- and index-linked life insurance | 4,021,557 | 3,602,404 |
| D. Reinsurers' share in underwriting provisions | 1,081,051 | 1,222,261 |
| E. Receivables | 1,762,154 | 1,500,067 |
| F. Deferred tax assets | 136,812 | 131,170 |
| G. Other assets | 582,818 | 393,385 |
| H. Cash and cash equivalents | 385,477 | 619,327 |
| Total ASSETS | 35,058,957 | 33,665,120 |
* including trading assets
CONSOLIDATED BALANCE SHEET AS OF 30 JUNE 2009
| LIABILITIES AND SHAREHOLDERS' EQUITY | 30.6.2009 | 31.12.2008 |
|---|---|---|
| in EUR '000 | ||
| A. Shareholders' equity | ||
| I. Share capital | 132,887 | 132,887 |
| II. Other capital reserves | 2,109,003 | 2,109,003 |
| III. Capital reserves from hybrid capital | 495,602 | 245,602 |
| IV. Retained earnings | 1,463,572 | 1,423,144 |
| V. Other reserves | 8,604 | –38,763 |
| VI. Minority interests | 279,168 | 266,917 |
| Total shareholders' equity | 4,488,836 | 4,138,790 |
| B. Subordinated liabilities | 545,594 | 501,242 |
| C. Non-underwriting provisions | ||
| I. Unearned premiums | 1,351,013 | 1,030,712 |
| II. Mathematical reserve | 17,073,469 | 16,861,965 |
| III. Provision for outstanding claims | 3,334,749 | 3,370,508 |
| IV. Provisions for premium refunds not dependent on profit | 50,478 | 46,744 |
| V. Provision for profit dependent premium refunds | 419,135 | 348,994 |
| VI. Other underwriting provisions | 23,148 | 23,444 |
| Total underwriting provisions | 22,251,992 | 21,682,367 |
| D. Underwriting provisions of unit- and index-linked life insurance | 3,833,572 | 3,346,773 |
| E. Non-underwriting provisions | ||
| I. Provisions for pensions and similar obligations | 296,085 | 338,160 |
| II. Tax provisions | 114,866 | 152,853 |
| III. Other provisions | 238,142 | 261,009 |
| Total non-underwriting provisions | 649,093 | 752,022 |
| F. Liabilities | 2,891,064 | 2,842,755 |
| G. Deferred tax liabilities | 164,876 | 141,483 |
| H. Other liabilities | 233,930 | 259,688 |
| Total LIABILITIES AND SHAREHOLDERS' EQUITY | 35,058,957 | 33,665,120 |
CONSOLIDATED SHAREHOLDERS' EQUITY
Change in consolidated shareholders' equity in fiscal years 2008 and 2009
| Share capital |
Other capital reserves* |
Capital reserves from hybrid capital* |
Retained earnings |
Unreal ised gains and losses |
Foreign currency exchange and other reserves |
Share holders' equity before minority interests |
Minority interests |
Share holders' equity |
|
|---|---|---|---|---|---|---|---|---|---|
| in EUR '000 | |||||||||
| As of 1 January 2008 | 109,009 | 1,035,029 | 0 | 1,057,693 | 78,146 | 58,228 | 2,338,105 | 277,458 | 2,615,563 |
| Exchange rate changes | 0 | 0 | 0 | 0 | 0 | 53,216 | 53,216 | 2,120 | 55,336 |
| Changes in ownership interests | 0 | 0 | 0 | 86,818 | 0 | 0 | 86,818 | –47,548 | 39,270 |
| Capital increase | 23,878 | 1,073,612 | 245,588 | 0 | 0 | 0 | 1,343,078 | 0 | 1,343,078 |
| Unrealised gains and losses from financial investments |
|||||||||
| available for sale | 0 | 0 | 0 | 0 | –73,166 | 0 | –73,166 | –3,691 | –76,857 |
| Profit for the period | 0 | 0 | 0 | 207,740 | 0 | 0 | 207,740 | 21,142 | 228,882 |
| Dividend payment | 0 | 0 | 0 | –115,500 | 0 | 0 | –115,500 | –4,824 | –120,324 |
| As of 30 June 2008 | 132,887 | 2,108,641 | 245,588 | 1,236,751 | 4,980 | 111,444 | 3,840,291 | 244,657 | 4,084,948 |
| As of 1 January 2009 | 132,887 | 2,109,003 | 245,602 | 1,423,144 | –57,102 | 18,339 | 3,871,873 | 266,917 | 4,138,790 |
| Exchange rate changes | 0 | 0 | 0 | 0 | 0 | –2,789 | –2,789 | 1,001 | –1,788 |
| Changes in ownership interests | 0 | 0 | 0 | 1,395 | 0 | 0 | 1,395 | 525 | 1,920 |
| Capital increase | 0 | 0 | 250,000 | 0 | 0 | 0 | 250,000 | 0 | 250,000 |
| Unrealised gains and losses from financial investments |
|||||||||
| available for sale | 0 | 0 | 0 | 0 | 50,156 | 0 | 50,156 | 1,575 | 51,731 |
| Profit for the period | 0 | 0 | 0 | 179,833 | 0 | 0 | 179,833 | 10,199 | 190,032 |
| Dividend payment | 0 | 0 | 0 | –140,800 | 0 | 0 | –140,800 | –1,049 | –141,849 |
| As of 30 June 2009 | 132,887 | 2,109,003 | 495,602 | 1,463,572 | –6,946 | 15,550 | 4,209,668 | 279,168 | 4,488,836 |
*The offsetting against the share premium of those expenses incurred as part of the capital adjustments that took place in 2008 was based on preliminary figures.
CONSOLIDATED INCOME STATEMENT
| for the period from 1 January to 30 June 2009 (2008) | 1.1.-30.6.2009 | 1.1.-30.6.2008 |
|---|---|---|
| in EUR '000 | ||
| Premiums | ||
| Premiums written - Gross | 4,251,137 | 4,215,141 |
| Premiums written - Reinsurers´ share | –464,722 | –547,997 |
| Premiums written - Retention | 3,786,415 | 3,667,144 |
| Change in unearned premium - Gross | –250,846 | –298,109 |
| Change in unearned premium - Reinsurers' share | 77,230 | 102,261 |
| Net earned premiums | 3,612,799 | 3,471,296 |
| Financial result excluding at equity consolidated companies | ||
| Income from investments | 926,935 | 1,028,767 |
| Expenses for investments and interest expenses | –460,091 | –412,885 |
| Total financial result excluding at equity consolidated companies | 466,844 | 615,882 |
| Other income | 61,997 | 30,669 |
| Expenses for claims and insurance benefits | ||
| Expenses for claims and insurance benefits - Gross | –3,156,540 | –3,201,390 |
| Expenses for claims and insurance benefits - Reinsurers' share | 193,640 | 289,032 |
| Total expenses for claims and insurance benefits | –2,962,900 | –2,912,358 |
| Operating expenses | ||
| Acquisition expenses | –689,949 | –700,423 |
| Other administrative expenses | –192,885 | –196,249 |
| Reinsurance commissions | 59,205 | 96,776 |
| Total operating expenses | –823,629 | –799,896 |
| Other expenses | –129,598 | –120,058 |
| Result from shares in at equity consolidated companies | 4,740 | 2,807 |
| Profit before taxes | 230,253 | 288,342 |
| Tax expense | –40,221 | –59,460 |
| Profit for the period | 190,032 | 228,882 |
| thereof attributable to shareholders of Vienna Insurance Group | 179,833 | 207,740 |
| thereof minority interests in net profit for the period | 10,199 | 21,142 |
| Earnings per share (annualised) | 2.81 | 3.72 |
| Undiluted = diluted earnings per share (in EUR) |
CONSOLIDATED INCOME STATEMENT
| for the period from 1 April to 30 June 2009 (2008) | 1.4.-30.6.2009 | 1.4.-30.6.2008 |
|---|---|---|
| in EUR '000 | ||
| Premiums | ||
| Premiums written - Gross | 1,905,706 | 1,903,891 |
| Premiums written - Reinsurers´ share | –164,118 | –207,944 |
| Premiums written - Retention | 1,741,588 | 1,695,947 |
| Change in unearned premium - Gross | 101,390 | 67,746 |
| Change in unearned premium - Reinsurers' share | –28,428 | –29,205 |
| Net earned premiums | 1,814,550 | 1,734,488 |
| Financial result excluding at equity consolidated companies | 0 | 0 |
| Income from investments | 415,642 | 665,655 |
| Expenses for investments and interest expenses | –186,849 | –224,878 |
| Total financial result excluding at equity consolidated companies | 228,793 | 440,777 |
| Other income | 20,790 | 13,211 |
| Expenses for claims and insurance benefits | 0 | 0 |
| Expenses for claims and insurance benefits - Gross | –1,584,828 | –1,694,032 |
| Expenses for claims and insurance benefits - Reinsurers' share | 94,990 | 140,783 |
| Total expenses for claims and insurance benefits | –1,489,838 | –1,553,249 |
| Operating expenses | 0 | 0 |
| Acquisition expenses | –337,018 | –341,215 |
| Other administrative expenses | –97,296 | –115,683 |
| Reinsurance commissions | 20,590 | 48,596 |
| Total operating expenses | –413,724 | –408,302 |
| Other expenses | –55,776 | –65,760 |
| Result from shares in at equity consolidated companies | 4,638 | 2,332 |
| Profit before taxes | 109,433 | 163,497 |
| Tax expense | –18,420 | –33,483 |
| Profit for the period | 91,013 | 130,014 |
| thereof attributable to shareholders of Vienna Insurance Group | 85,081 | 116,328 |
| thereof minority interests in net profit for the period | 5,932 | 13,686 |
| Earnings per share (annualised) | 2.66 | 3.93 |
| Undiluted = diluted earnings per share (in EUR) |
CONSOLIDATED CASH FLOW STATEMENT
| for the period from 1 January to 30 June 2009 (2008) | 1.1.-30.6.2009 | 1.1.-30.6.2008 |
|---|---|---|
| in EUR '000 | ||
| Profit for the period less minority interests | 179,833 | 207,740 |
| Minority interests | 10,199 | 21,142 |
| Profit for the period before minority interests | 190,032 | 228,882 |
| Change in underwriting provisions net | 774,156 | 1,503,048 |
| Change in underwriting receivables and liabilities | –311,672 | –293,929 |
| Change in deposit receivables and liabilities, | ||
| as well as in reinsurance receivables and liabilities | –6,627 | –6,804 |
| Change in other receivables and liabilities | 151,918 | –610,839 |
| Changes in securities held for trading | 47,426 | 119,664 |
| Gain/loss from disposal of investments | –74,263 | –335,247 |
| Depreciation/appreciation of all other investments | 169,370 | 87,255 |
| Change in pension, severance and other personnel provisions | –42,076 | –72,358 |
| Change in deferred tax assets/liability excl. tax provisions | –1,578 | 14,243 |
| Change in other balance sheet items | –286,871 | –8,581 |
| Change in goodwill and other intangible assets | 2,653 | 2,197 |
| Other cash neutral income and expenses, and adjustments to the result for the period | 396,508 | –349,517 |
| Cash flow from operating activities | 1,008,976 | 278,014 |
| Cash inflow from the sale of fully and at equity consolidated companies | 1,493 | 322,815 |
| Payments for the acquisition of fully and at equity consolidated companies | –442,449 | –20,952 |
| Cash inflow from the sale of securities available for sale | 1,987,445 | 2,594,569 |
| Payments for the acquisition of available for sale securities | –3,180,656 | –3,210,611 |
| Cash inflow from the sale of securities held to maturities | 183,921 | 28,182 |
| Payments for the acquisition of securities held to maturity | –411,140 | –122,557 |
| Cash inflow from the sale of land and buildings | 12,032 | 10,804 |
| Payments for the acquisition of land and buildings | –107,869 | –111,137 |
| Change in unit- and index-linked life insurance items | –326,712 | –307,613 |
| Change in other investments | 859,033 | –1,150,624 |
| Cash flow from investing activities | –1,424,902 | –1,967,124 |
| Capital increase incl. hybrid capital | 250,000 | 1,343,078 |
| Minority interest in capital increase | 0 | 0 |
| Decrease/increase subordinated liabilities | 39,643 | 1,000 |
| Dividend payments | –141,849 | 120,324 |
| Cash in- and outflow from other financing activities | 18,095 | 288,731 |
| Cash flow from financing activities | 165,889 | 1,753,133 |
| Change in cash and cash equivalents | –250,037 | 64,023 |
| Cash and cash equivalents at beginning of period | 619,327 | 277,700 |
| Cash and cash equivalents at end of period | 385,477 | 359,308 |
| thereof non-profit housing societies | 60,277 | 44,950 |
| Change in scope of consolidation | 18,202 | 17,274 |
| Foreign currency exchange differences in cash and cash equivalents | –2,015 | 311 |
| Additional information | ||
| Received interest | 356,310 | 290,435 |
| Received dividends | 100,235 | 86,362 |
Interest paid 39,749 39,009 Income taxes paid 147,251 42,827
SEGMENT REPORTING
CONSOLIDATED BALANCE SHEET BY LINES OF BUSINESS
| ASSETS | Property/Casualty | Life | Health | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | |
| in EUR '000 | ||||||||
| A. Intangible | ||||||||
| assets | 1,068,107 | 801,894 | 935,342 | 839,088 | 7,843 | 7,959 | 2,011,292 | 1,648,941 |
| B. Investments | 3,939,487 | 3,751,376 | 20,283,559 | 19,965,446 | 854,750 | 830,743 | 25,077,796 | 24,547,565 |
| C. Investments of | ||||||||
| unit- and index-linked life insurance |
0 | 0 | 4,021,557 | 3,602,404 | 0 | 0 | 4,021,557 | 3,602,404 |
| D. Reinsurers' share | ||||||||
| in underwriting provisions |
940,220 | 1,097,749 | 139,548 | 122,302 | 1,283 | 2,210 | 1,081,051 | 1,222,261 |
| E. Receivables | 1,154,907 | 943,227 | 586,683 | 526,685 | 20,564 | 30,155 | 1,762,154 | 1,500,067 |
| G. Other assets | 375,892 | 206,079 | 200,616 | 181,944 | 6,310 | 5,362 | 582,818 | 393,385 |
| H. Cash and cash equivalents | 128,083 | 197,254 | 254,205 | 418,279 | 3,189 | 3,794 | 385,477 | 619,327 |
| Subtotal | 7,606,696 | 6,997,579 | 26,421,510 | 25,656,148 | 893,939 | 880,223 | 34,922,145 | 33,533,950 |
| Consolidated deferred tax | ||||||||
| assets | 136,812 | 131,170 | ||||||
| Total ASSETS | 35,058,957 | 33,665,120 |
LIABILITIES AND
| SHAREHOLDERS' EQUITY | Property/Casualty | Life | Health | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | |
| in EUR '000 | ||||||||
| B. Subordinated | ||||||||
| liabilities | 264,157 | 189,646 | 281,437 | 311,596 | 0 | 0 | 545,594 | 501,242 |
| C. Non-underwriting | ||||||||
| provisions | 4,356,857 | 4,101,240 | 17,069,952 | 16,776,290 | 825,183 | 804,837 | 22,251,992 | 21,682,367 |
| D. Underwriting | ||||||||
| provisions of unit- | ||||||||
| and index-linked | ||||||||
| life insurance | 0 | 0 | 3,833,572 | 3,346,773 | 0 | 0 | 3,833,572 | 3,346,773 |
| E. Non-underwriting | ||||||||
| provisions | 364,121 | 426,524 | 244,741 | 276,396 | 40,231 | 49,102 | 649,093 | 752,022 |
| F. Liabilities | 646,527 | 634,701 | 2,109,827 | 2,063,294 | 134,710 | 144,760 | 2,891,064 | 2,842,755 |
| H. Other liabilities | 216,945 | 248,839 | 16,904 | 10,806 | 81 | 43 | 233,930 | 259,688 |
| Subtotal | 5,848,607 | 5,600,950 | 23,556,433 | 22,785,155 | 1,000,205 | 998,742 | 30,405,245 | 29,384,847 |
| Consolidated deferred tax | ||||||||
| liabilities | 164,876 | 141,483 | ||||||
| Consolidated shareholders' | ||||||||
| equity | 4,488,836 | 4,138,790 | ||||||
| Total LIABILITIES AND SHAREHOLDERS' EQUITY |
35,058,957 | 33,665,120 |
The amounts indicated for each business segment have been adjusted for internal segment transactions. As a result, the asset and liability balances cannot be used to infer the shareholders' equity allocated to each area of operations.
SEGMENT REPORTING
CONSOLIDATED INCOME STATEMENT BY SEGMENT
| LINES OF BUSINESS | Property/Casualty | Life | Health | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | |
| in EUR '000 | ||||||||
| Premiums written - Gross | 2,349,641 | 2,403,814 | 1,738,647 | 1,653,136 | 162,849 | 158,191 | 4,251,137 | 4,215,141 |
| Net earned premiums | 1,734,170 | 1,690,136 | 1,718,208 | 1,625,467 | 160,421 | 155,693 | 3,612,799 | 3,471,296 |
| Financial result excluding at equity consolidated |
||||||||
| companies | 85,027 | 153,214 | 376,636 | 456,063 | 5,181 | 6,605 | 466,844 | 615,882 |
| Other income | 38,588 | 19,166 | 23,344 | 11,491 | 65 | 12 | 61,997 | 30,669 |
| Expenses for claims and insurance benefits |
–1,128,668 | –1,072,290 | –1,697,160 | –1,700,951 | –137,072 | –139,117 | –2,962,900 | –2,912,358 |
| Operating expenses | –486,211 | –494,677 | –316,790 | –284,650 | –20,628 | –20,569 | –823,629 | –799,896 |
| Other expenses | –88,271 | –88,782 | –40,909 | –30,884 | –418 | –392 | –129,598 | –120,058 |
| Result from shares in at equity consolidated |
||||||||
| companies | 1,872 | 1,032 | 2,875 | 2,192 | -7 | –417 | 4,740 | 2,807 |
| Profit before taxes | 156,507 | 207,799 | 66,204 | 78,728 | 7,542 | 1,815 | 230,253 | 288,342 |
| REGIONS | Austria | Czech Republic | Slovakia | Poland | ||||
|---|---|---|---|---|---|---|---|---|
| 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | |
| in EUR '000 | ||||||||
| Premiums written - Gross | 2,185,182 | 2,120,358 | 776,585 | 690,960 | 324,404 | 297,524 | 262,906 | 393,934 |
| Net earned premiums | 1,847,247 | 1,757,816 | 662,975 | 541,968 | 270,782 | 245,667 | 240,961 | 361,421 |
| Financial result excluding at equity consolidated |
||||||||
| companies | 354,931 | 486,216 | 25,192 | 22,428 | 17,819 | 9,878 | 14,495 | 6,393 |
| Other income | 5,888 | 5,026 | 12,529 | 6,554 | 3,000 | 1,426 | 1,711 | 3,659 |
| Expenses for claims and insurance benefits |
–1,740,838 | –1,745,600 | –436,371 | –353,930 | –213,833 | –170,811 | –136,973 | –225,830 |
| Operating expenses | –316,415 | –316,082 | –172,556 | –142,847 | –46,986 | –48,834 | –99,477 | –120,737 |
| Other expenses | –22,075 | –34,713 | –36,577 | –28,778 | –23,098 | –21,465 | –6,301 | –10,849 |
| Result from shares in at equity consolidated companies |
3,610 | 1,863 | 1,130 | 944 | 0 | 0 | 0 | 0 |
| Profit before taxes | 132,348 | 154,526 | 56,322 | 46,339 | 7,684 | 15,861 | 14,416 | 14,057 |
| Romania | Other CEE markets | Other markets | Total | |||||
|---|---|---|---|---|---|---|---|---|
| 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | |
| in EUR '000 | ||||||||
| Premiums written - Gross | 313,009 | 360,520 | 300,662 | 239,163 | 88,389 | 112,682 | 4,251,137 | 4,215,141 |
| Net earned premiums | 272,320 | 289,550 | 233,910 | 178,510 | 84,604 | 96,364 | 3,612,799 | 3,471,296 |
| Financial result excluding at equity consolidated |
||||||||
| companies | 25,206 | 76,008 | 19,947 | 6,879 | 9,254 | 8,080 | 466,844 | 615,882 |
| Other income | 20,739 | 9,298 | 4,445 | 3,283 | 13,685 | 1,423 | 61,997 | 30,669 |
| Expenses for claims and | ||||||||
| insurance benefits | –209,526 | –228,968 | –165,858 | –113,694 | –59,501 | –73,525 | –2,962,900 | –2,912,358 |
| Operating expenses | –90,686 | –93,876 | –80,978 | –65,786 | –16,531 | –11,734 | –823,629 | –799,896 |
| Other expenses | –5,985 | –7,459 | –13,740 | –4,900 | –21,822 | –11,894 | –129,598 | –120,058 |
| Result from shares in at equity consolidated |
||||||||
| companies | 0 | 0 | 0 | 0 | 0 | 0 | 4,740 | 2,807 |
| Profit before taxes | 12,068 | 44,553 | –2,274 | 4,292 | 9,689 | 8,714 | 230,253 | 288,342 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDING 30 JUNE 2009
Accounting Policies
These interim consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS), and are consistent with IAS 34 "Interim Financial Reporting".
Information regarding seasonal and cyclical influences
Within the Vienna Insurance Group, seasonal fluctuations chiefly appear in the areas of premiums, claims and financial results. Based on the high number of policy inceptions in January, the 1st quarter is normally the year's strongest in terms of premiums. Claims in the 1st quarter (or the 1st half, as the case may be) are also normally marked by higher liabilities, especially due to adverse environmental influences (snow, melting snow, storms, floods). Financial results are affected by the fact that a large portion of dividends must be paid in the 2nd quarter, while many investment funds make distributions in the 4th quarter. The focus of the Group's investment strategy is on the ongoing financial market crisis and, consequently, the continued pursuit and refinement of the Vienna Insurance Group's conservative risk policy, also in 2009. In addition, and in response to the increased volatility of the money markets, group foreign exchange risks were protected in terms of earnings for the core regions.
Estimates
Preparation of interim consolidated financial statements in accordance with IFRS requires that discretionary assessments and assumptions be made about the future development of the Company that could have a material effect on the recognition and value of assets and liabilities, as well as income and expenses, during the financial year. The estimates relate in particular to the underwriting provisions. No material changes were made to the system for determining these estimates during the reporting period under review.
Related party transactions
These mainly concern intercompany reinsurance relationships on a minor scale and financing at market terms, chiefly in the real estate area, as well as intercompany charges. These transactions have no material effect on the performance of the Company. No loans or guarantees were granted to the members of the Managing Board or Supervisory Board during the reporting period.
Information regarding changes to scope of consolidation
The companies Sigma Sh.a., Tirana, Sigma AD, Skopje, and "WIENER Re" akcionarsko društvo za reosiguranje were fully consolidated for the first time in the 2nd quarter of 2009. In addition, the companies BCR Asigurari de Viata S.A., BCR Asigurari S.A., and Compensa Life (formerly Seesam), which operates in the Baltic markets, were fully consolidated in the Vienna Insurance Group reporting entity for the first time in the 1st half of 2009. Bulstrad Insurance Joint-Stock Company, Bulstrad Life Insurance Joint-Stock Company and Helios Vienna Insurance Group d.d. were previously included in the consolidated financial statements by means of proportional consolidation, and were fully consolidated for the first time in the 1st half of 2009.
Compared with the 1st half of 2008, Sparkassen Versicherung AG Vienna Insurance Group, Erste Vienna Insurance Group Biztosító Zrt., Erste osiguranje Vienna Insurance Group, Pojišt'ovna České spořitelny a.s. Vienna Insurance Group and Poist'ovňa Slovenskej sporitel'ne, a.s. Vienna Insurance Group are now fully consolidated. The companies HOTEL SRNÍ, a.s., ČPP servis, s.r.o., and Sparkassen Immobilien AG were included in the consolidated financial statements for the first time in 2008 using the equity method. In addition, VIG RE zajišťovna, a.s. was established in 2008 and fully consolidated in the annual financial statements.
PKB Privatkliniken Beteiligungs-GmbH was deconsolidated in the 1st half of 2009. In addition, the Austrian insurance company BA-CA Versicherung AG, the Romanian Unita Vienna Insurance Group and Agras Vienna Insurance Group S.A., which is affiliated with Unita, were deconsolidated in 2008.
Type and extent of business transactions unusual in terms of type, amount or frequency
The Vienna Insurance Group sold Erste Group a 95% stake in its investment fund company Ringturm KAG at the beginning of 2009.
Changes in contingent liabilities and receivables
There were no changes in this area during the reporting period just ended relative to the 1st half of 2008.
INTANGIBLE ASSETS
| Composition | 30.6.2009 | 31.12.2008 |
|---|---|---|
| in EUR '000 | ||
| Goodwill | 1,776,841 | 1,416,089 |
| Purchased insurance portfolio | 74,547 | 67,569 |
| Other assets | 159,904 | 165,283 |
| Purchased software | 44,662 | 46,024 |
| Others | 115,242 | 119,259 |
| Total | 2,011,292 | 1,648,941 |
OTHER SECURITIES
| Development | Held to maturity | Available for sale | Trading assets | Recognised at fair value through profit and loss |
||||
|---|---|---|---|---|---|---|---|---|
| 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | 30.6.2009 | 31.12.2008 | |
| in EUR '000 | ||||||||
| Acquisition costs | 2,365,092 | 373,237 | ||||||
| Cumulative depreciation as | ||||||||
| of 31.12. of previous years | –18,031 | 36 | ||||||
| Book value as of 31.12 of the | ||||||||
| previous year | 2,347,061 | 373,273 | 11,707,295 | 13,877,579 | 287,271 | 977,235 | 1,230,068 | 164,428 |
| Exchange rate changes | 59,447 | 15,947 | 400 | 20,403 | –18,250 | –38,613 | 1,769 | 519 |
| Book value as of 1.1 | 2,406,508 | 389,220 | 11,707,695 | 13,897,982 | 269,021 | 938,622 | 1,231,837 | 164,947 |
| Reclassifications | 13,567 | 1,393,784 | –14,073 | –2,437,519 | 0 | –28,818 | 4,811 | 8,657 |
| Additions | 410,148 | 164,649 | 3,230,696 | 6,049,986 | 50,732 | 641,970 | 102,668 | 164,853 |
| Disposals | –182,236 | –41,905 | –1,878,669 | –4,898,500 | –119,190 | –656,987 | –118,235 | –426,308 |
| Changes in scope of consolidation |
35,525 | 458,776 | –383,245 | –75,318 | 19,584 | –516,332 | 7,171 | 1,335,205 |
| Changes in value recognised through profit and loss |
0 | 0 | 72 | 0 | 2,122 | –86,030 | 1,786 | –17,286 |
| Changes in value not recognised through profit |
||||||||
| and loss | 0 | 0 | 183,994 | –497,296 | 0 | 0 | 0 | 0 |
| Impairments | 0 | –17,463 | –125,176 | –332,040 | –1,478 | –5,154 | 0 | 0 |
| Book value as of 31.12 | 2,683,512 | 2,347,061 | 12,721,294 | 11,707,295 | 220,791 | 287,271 | 1,230,038 | 1,230,068 |
| Cumulative appreciation/depreciation as |
||||||||
| of 31.12. | 2,057 | 18,031 | ||||||
| Acquisition costs | 2,685,569 | 2,365,092 |
REINSURERS' SHARE IN UNDERWRITING PROVISIONS
| Composition | Property/Casualty 30.6.2009 |
Life 30.6.2009 |
Health 30.6.2009 |
Total 30.6.2009 |
Total 31.12.2008 |
|---|---|---|---|---|---|
| in EUR '000 | |||||
| Unearned premiums | 182,590 | 8,292 | 0 | 190,882 | 138,085 |
| Mathematical reserve | 2 | 120,786 | 1,200 | 121,988 | 109,791 |
| Provisions for outstanding claims | 751,318 | 10,379 | 83 | 761,780 | 968,601 |
| Provisions for premium refunds not dependent on profit |
4,703 | 0 | 0 | 4,703 | 2,612 |
| Provisions for profit dependent premium refunds |
0 | 0 | 0 | 0 | 25 |
| Other underwriting provisions | 1,607 | 91 | 0 | 1,698 | 3,147 |
| Total | 940,220 | 139,548 | 1,283 | 1,081,051 | 1,222,261 |
RECEIVABLES
| Composition | Property/Casualty | Life | Health | Total | Total |
|---|---|---|---|---|---|
| 30.6.2009 | 30.6.2009 | 30.6.2009 | 30.6.2009 | 31.12.2008 | |
| in EUR '000 | |||||
| Underwriting | 962,236 | 195,395 | 4,140 | 1,161,771 | 900,857 |
| Receivables from direct insurance | |||||
| business | 839,921 | 183,976 | 4,099 | 1,027,996 | 758,099 |
| to policyholders | 677,796 | 166,193 | 4,099 | 848,088 | 578,478 |
| to intermediaries | 123,826 | 17,600 | 0 | 141,426 | 139,692 |
| to insurance companies | 38,299 | 183 | 0 | 38,482 | 39,929 |
| Receivables from reinsurance | |||||
| business | 122,315 | 11,419 | 41 | 133,775 | 142,758 |
| Non-underwriting | 192,671 | 391,288 | 16,424 | 600,383 | 599,210 |
| Other receivables | 192,671 | 391,288 | 16,424 | 600,383 | 599,210 |
| Total | 1,154,907 | 586,683 | 20,564 | 1,762,154 | 1,500,067 |
EARNINGS PER SHARE
| 1.1.-30.6.2009 | 1.1.-30.6.2008 | ||||
|---|---|---|---|---|---|
| Profit for the period | EUR '000 | 190,032 | EUR '000 | 228,882 | |
| Net profit for the period after minority interests | EUR '000 | 179,833 | EUR '000 | 207,740 | |
| Number of shares (2008 weighted) | Pcs | 128,000,000 | Pcs | 111,607,735 | |
| before capital increase | 105,000,000 | ||||
| capital increase | 23,000,000 | ||||
| Earnings per share (annualised) | EUR | 2.81 | EUR | 3.72 |
| 1.4.-30.6.2009 | 1.4.-30.6.2008 | ||||
|---|---|---|---|---|---|
| Profit for the period | EUR '000 | 91,013 | EUR '000 | 130,014 | |
| Net profit for the period after minority interests | EUR '000 | 85,081 | EUR '000 | 116,328 | |
| Number of shares (2008 weighted) | Pcs | 128,000,000 | Pcs | 118,288,889 | |
| before capital increase | 105,000,000 | ||||
| capital increase | 23,000,000 | ||||
| Earnings per share (annualised) | EUR | 2.66 | EUR | 3.93 |
UNDERWRITING PROVISIONS – GROSS
| Composition | Property/Casualty 30.6.2009 |
Life 30.6.2009 |
Health 30.6.2009 |
Total 30.6.2009 |
Total 31.12.2008 |
|---|---|---|---|---|---|
| in EUR '000 | |||||
| Unearned premiums | 1,187,060 | 160,127 | 3,826 | 1,351,013 | 1,030,712 |
| Mathematical reserve | 125 | 16,311,644 | 761,700 | 17,073,469 | 16,861,965 |
| thereof for guaranteed policy benefits |
125 | 14,723,582 | 761,700 | 15,485,407 | 15,474,561 |
| thereof for allocated and committed profit shares |
0 | 1,588,062 | 0 | 1,588,062 | 1,387,404 |
| Provisions for outstanding claims | 3,116,202 | 173,694 | 44,853 | 3,334,749 | 3,370,508 |
| Provision for premium refunds | 35,921 | 419,692 | 14,000 | 469,613 | 395,738 |
| thereof dependent on profit | 197 | 418,938 | 0 | 419,135 | 348,994 |
| thereof not dependent on profit | 35,724 | 754 | 14,000 | 50,478 | 46,744 |
| Other underwriting provisions | 17,549 | 4,795 | 804 | 23,148 | 23,444 |
| Total | 4,356,857 | 17,069,952 | 825,183 | 22,251,992 | 21,682,367 |
LIABILITIES
| Composition | Property/Casualty | Life | Health | Total | Total |
|---|---|---|---|---|---|
| 30.6.2009 | 30.6.2009 | 30.6.2009 | 30.6.2009 | 31.12.2008 | |
| in EUR '000 | |||||
| Underwriting | 402,778 | 300,525 | 17,988 | 721,291 | 840,432 |
| Liabilities from direct business | 287,496 | 167,065 | 11,955 | 466,516 | 572,214 |
| to policyholders | 166,761 | 119,924 | 11,955 | 298,640 | 406,707 |
| to insurance brokers | 101,054 | 31,458 | 0 | 132,512 | 134,538 |
| to insurance companies | 19,681 | 715 | 0 | 20,396 | 12,980 |
| arising from financial insurance | |||||
| contracts | 0 | 14,968 | 0 | 14,968 | 17,989 |
| Liabilities from reinsurance business | 114,150 | 13,820 | 3,528 | 131,498 | 151,307 |
| Deposits from ceded reinsurance | |||||
| business | 1,132 | 119,640 | 2,505 | 123,277 | 116,911 |
| Non-underwriting | 243,749 | 1,809,302 | 116,722 | 2,169,773 | 2,002,323 |
| Liabilities to financial institutions | 26,355 | 699,982 | 34,000 | 760,337 | 788,294 |
| Other liabilities | 217,394 | 1,109,320 | 82,722 | 1,409,436 | 1,214,029 |
| Total | 646,527 | 2,109,827 | 134,710 | 2,891,064 | 2,842,755 |
INFORMATION RELATING TO CONSOLIDATED INCOME STATEMENT
PREMIUMS WRITTEN
| Property/Casualty insurance | Gross 1.1.-30.6.2009 |
Gross 1.1.-30.6.2008 |
|---|---|---|
| in EUR '000 | ||
| Direct business | ||
| Fire and fire business interruption insurance | 309,008 | 286,703 |
| Household insurance | 113,433 | 107,620 |
| Other non-life insurance | 222,401 | 206,998 |
| Motor liability insurance | 613,187 | 688,374 |
| Other motor vehicle insurance | 527,060 | 569,718 |
| Casualty insurance | 182,065 | 137,474 |
| Liability insurance | 180,575 | 180,801 |
| Legal expenses insurance | 25,335 | 24,551 |
| Marine, aviation, and transport insurance | 38,333 | 36,589 |
| Credit and guarantee insurance | 9,715 | 22,473 |
| Other insurance | 96,212 | 112,471 |
| Subtotal | 2,317,324 | 2,373,772 |
| Indirect business | ||
| Marine, aviation, and transport insurance | 203 | 311 |
| Other insurance | 32,114 | 29,731 |
| Subtotal | 32,317 | 30,042 |
| Total | 2,349,641 | 2,403,814 |
| Direct business life insurance | 1.1.-30.6.2009 | 1.1.-30.6.2008 |
|---|---|---|
| in EUR '000 | ||
| Regular premiums | 1,080,168 | 926,898 |
| Single premium policies | 649,425 | 723,661 |
| Total life direct gross written premiums | 1,729,593 | 1,650,559 |
| thereof: | 1,729,593 | 1,650,559 |
| Policies with profit participation | 953,005 | 936,943 |
| Policies without profit participation | 177,639 | 170,186 |
| Unit- and index-linked policies | 598,949 | 543,430 |
| thereof: | 1,729,593 | 1,650,559 |
| Individual insurance | 1,632,261 | 1,413,724 |
| Group insurance | 97,332 | 236,835 |
FINANCIAL RESULT
| Composition: | Property/Casualty | Life | Health | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Income | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 |
| in EUR '000 | ||||||||
| Current income | 79,923 | 83,996 | 562,215 | 427,013 | 18,531 | 16,358 | 660,669 | 527,367 |
| Income from appreciations | 4,864 | 2,168 | 31,818 | 9,831 | 2,965 | 113 | 39,647 | 12,112 |
| Income from the disposal of | ||||||||
| investments | 78,678 | 134,023 | 141,697 | 353,360 | 6,244 | 1,905 | 226,619 | 489,288 |
| Total | 163,465 | 220,187 | 735,730 | 790,204 | 27,740 | 18,376 | 926,935 | 1,028,767 |
| Composition: | Property/Casualty | Life | Health | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Expenses | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 | 1.1.-30.6.09 | 1.1.-30.6.08 |
| in EUR '000 | ||||||||
| Depreciation of investments | 12,457 | 30,605 | 65,555 | 72,470 | 1,587 | 1,642 | 79,599 | 104,717 |
| Impairment of investments | 23,472 | 8,065 | 100,835 | 39,007 | 2,682 | 228 | 126,989 | 47,300 |
| Exchange rate changes | –4,903 | 130 | –1,621 | 2,797 | –6 | 0 | –6,530 | 2,927 |
| Loss from disposal of | ||||||||
| investments | 26,816 | 8,082 | 114,631 | 144,145 | 13,704 | 6,397 | 155,151 | 158,624 |
| Interest expenses | 14,418 | 12,952 | 46,629 | 38,245 | 3,372 | 2,620 | 64,419 | 53,817 |
| Other expenses | 6,178 | 7,139 | 33,065 | 37,477 | 1,220 | 884 | 40,463 | 45,500 |
| Total | 78,438 | 66,973 | 359,094 | 334,141 | 22,559 | 11,771 | 460,091 | 412,885 |
EXPENSES FOR CLAIMS AND INSURANCE BENEFITS
| Composition | Gross | Reinsurers' share | Retention | ||||
|---|---|---|---|---|---|---|---|
| 1.1.-30.6.2009 | 1.1.-30.6.2008 | 1.1.-30.6.2009 | 1.1.-30.6.2008 1.1.-30.6.2009 | 1.1.-30.6.2008 | |||
| in EUR '000 | |||||||
| Property/Casualty insurance | |||||||
| Expenses for claims and insurance benefits | |||||||
| Payments for claims and insurance benefits | 1,230,864 | 1,185,137 | –188,644 | –283,103 | 1,042,220 | 902,034 | |
| Changes in provision for outstanding claims | 53,807 | 135,204 | 15,318 | 22,513 | 69,125 | 157,717 | |
| TOTAL | 1,284,671 | 1,320,341 | –173,326 | –260,590 | 1,111,345 | 1,059,751 | |
| Change in mathematical reserve | 4 | -5 | 0 | 0 | 4 | -5 | |
| Change in other underwriting provisions | 2,094 | 1,030 | –1,081 | –383 | 1,013 | 647 | |
| Expenses for premium refunds not dependent on | |||||||
| profit | 18,320 | 12,675 | –2,014 | –778 | 16,306 | 11,897 | |
| TOTAL EXPENSES | 1,305,089 | 1,334,041 | –176,421 | –261,751 | 1,128,668 | 1,072,290 | |
| Life insurance | |||||||
| Expenses for claims and insurance benefits | |||||||
| Payments for claims and insurance benefits | 1,277,350 | 840,542 | –12,313 | –15,189 | 1,265,037 | 825,353 | |
| Changes in provision for outstanding claims | 15,836 | 7,083 | –1,264 | 379 | 14,572 | 7,462 | |
| TOTAL | 1,293,186 | 847,625 | –13,577 | –14,810 | 1,279,609 | 832,815 | |
| Change in mathematical reserve | 408,798 | 575,666 | –3,417 | –11,977 | 405,381 | 563,689 | |
| Change in other underwriting provisions | –189 | 18 | –24 | 0 | –213 | 18 | |
| Expenses for premium refunds dependent on | |||||||
| and not dependent on profit | 12,383 | 304,429 | 0 | 0 | 12,383 | 304,429 | |
| TOTAL EXPENSES | 1,714,178 | 1,727,738 | –17,018 | –26,787 | 1,697,160 | 1,700,951 | |
| Health insurance | |||||||
| Expenses for claims and insurance benefits | |||||||
| Payments for claims and insurance benefits | 106,780 | 108,820 | –140 | –450 | 106,640 | 108,370 | |
| Changes in provision for outstanding claims | 564 | 420 | –10 | –16 | 554 | 404 | |
| TOTAL | 107,344 | 109,240 | –150 | –466 | 107,194 | 108,774 | |
| Change in mathematical reserve | 19,482 | 19,007 | –51 | –28 | 19,431 | 18,979 | |
| Change in other underwriting provisions | 0 | 0 | 0 | 0 | 0 | 0 | |
| Expenses for premium refunds not dependent on | |||||||
| profit | 10,447 | 11,364 | 0 | 0 | 10,447 | 11,364 | |
| TOTAL EXPENSES | 137,273 | 139,611 | –201 | –494 | 137,072 | 139,117 | |
| TOTAL | 3,156,540 | 3,201,390 | –193,640 | –289,032 | 2,962,900 | 2,912,358 |
OPERATING EXPENSES
| Composition | Property/Casualty | Life | Health | Total |
|---|---|---|---|---|
| 1.1.-30.6.2009 | 1.1.-30.6.2009 | 1.1.-30.6.2009 | 1.1.-30.6.2009 | |
| in EUR '000 | ||||
| Acquisition expenses | 420,942 | 254,810 | 14,197 | 689,949 |
| Commission expenses | 294,449 | 178,083 | 4,478 | 477,010 |
| Pro rata personnel expenses | 74,616 | 32,270 | 5,171 | 112,057 |
| Pro rata material expenses | 51,877 | 44,457 | 4,548 | 100,882 |
| SUBTOTAL | 420,942 | 254,810 | 14,197 | 689,949 |
| Administrative expenses | 121,738 | 64,615 | 6,532 | 192,885 |
| Pro rata personnel expenses | 57,310 | 27,873 | 3,338 | 88,521 |
| Pro rata material expenses | 64,428 | 36,742 | 3,194 | 104,364 |
| SUBTOTAL | 121,738 | 64,615 | 6,532 | 192,885 |
| Received reinsurance commissions | –56,469 | –2,635 | –101 | –59,205 |
| Total | 486,211 | 316,790 | 20,628 | 823,629 |
| Composition | Property/Casualty 1.1.-30.6.2008 |
Life 1.1.-30.6.2008 |
Health 1.1.-30.6.2008 |
Total 1.1.-30.6.2008 |
|---|---|---|---|---|
| in EUR '000 | ||||
| Acquisition expenses | 450,987 | 235,575 | 13,861 | 700,423 |
| Commission expenses | 319,662 | 158,439 | 4,087 | 482,188 |
| Pro rata personnel expenses | 75,873 | 33,699 | 5,357 | 114,929 |
| Pro rata material expenses | 55,452 | 43,437 | 4,417 | 103,306 |
| SUBTOTAL | 450,987 | 235,575 | 13,861 | 700,423 |
| Administrative expenses | 132,656 | 56,830 | 6,763 | 196,249 |
| Pro rata personnel expenses | 64,416 | 24,695 | 3,485 | 92,596 |
| Pro rata material expenses | 68,240 | 32,135 | 3,278 | 103,653 |
| SUBTOTAL | 132,656 | 56,830 | 6,763 | 196,249 |
| Received reinsurance commissions | –88,966 | –7,755 | –55 | –96,776 |
| Total | 494,677 | 284,650 | 20,569 | 799,896 |
OTHER INFORMATION
| Employee statistics | 30.6.2009 | 31.12.2008 |
|---|---|---|
| Austria | 6,315 | 6,341 |
| Field sales representatives | 2,907 | 2,961 |
| Office employees | 3,408 | 3,380 |
| Outside Austria | 18,334 | 17,052 |
| Field sales representatives | 9,931 | 8,821 |
| Office employees | 8,403 | 8,231 |
| Total | 24,649 | 23,393 |
DECLARATION BY THE MANAGING BOARD
The Managing Board hereby declares that the half year financial report, prepared in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU, give a true and fair view of the net assets, financial position and results of operations of Vienna Insurance Group Wiener Städtische Versicherung AG and all companies included in the consolidation. The board further declares that the half year Group management report presents the course of business and the business results in such a way as to yield as true a presentation as possible of the assets, financial position and operating results of the Vienna Insurance Group Wiener Städtische Versicherung AG as well as of the companies included within the scope of consolidation. The half year financial report was not audited or reviewed by an auditor.
Managing Board of the Group:
Günter Geyer
Karl Fink Martin Diviš Christine Dornaus
Peter Hagen Judit Havasi Peter Höfinger
Robert Lasshofer Erich Leiß Martin Simhandl
Vienna, 14 August 2009
Media publisher and owner
Vienna Insurance Group Wiener Städtische Versicherung AG Company register: 75687 f. Data Processing Register code (DVR No.): 0016705 Internet: www.vig.com
Editorial deadline: 14 August 2009
This interim report can be downloaded as a pdf-file in German or English language from our website at: www.vig.com/ir > Downloads
Address
Vienna Insurance Group Wiener Städtische Versicherung AG Investor Relations Thomas Schmee Schottenring 30, A-1010 Vienna Phone +43 (0)50 350-21919 Fax +43 (0)50 350 99-21919 E-Mail: [email protected]
It goes without saying that all references in the text refer to men and women equally and without discrimination.
In case of doubt, the German version is authoritative.
Project coordination: General Secretariat, Elisabeth Karner Design: General Secretariat and Advertising Department – Wiener Städtische Versicherung AG 17PG008/E1H09 (09.08 – J20091943)