G icherung A s che Ver s Wiener Städti | eport 2011 R l a Annu

Foresight Showing Annual Report 2011 | Wiener Städtische Versicherung AG Annual Report 2011 | Wiener Städtische Versicherung AG shown. Foresight. ALWAYS There, WHERE YOU NEED US

A Austria’s largest insurance network: 140 business offices, nine provincial headquarters,

102 approximately 2,000 advisors

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Annual Report 2011 | Wiener Städtische Highlights 2011

EXCELLENT RESULTS IN SPITE OF DIFFICULT MARKET SITUATION. ­ Profitability increased once again. Profit before taxes increased further. Combined ratio improved again to 95%. Security­ oriented investment a key factor in ­stability. Assekuranz Award Austria 2011, insurance award for “Business Class” com- mercial insurance. Mobile phone storm ­alert ­system for desired locations. Market leader in Austria. TV commercial receives 2011 Werbespot Award for advertising.

Annual Report 2011 | Wiener Städtische Editorial

Showing Foresight

Offer the best security for every situation in life.

We consider this to be our main duty at Wiener Städtische. Long-term security and the right advice are more important than ever in difficult economic times. We are a reliable partner for our customers, operating the greatest number of local ­advisory offices country-wide to offer optimal solutions, ­custom-tailored products and straightforward claims settle- ment. Wiener Städtische develops many innovations to meet its customer needs to provide for the future, and is always one step ahead, because to us “showing foresight” means taking social change ­seriously, working for reforms and changing our products and services to adapt to changes in living condi- tions. This is based on our long-term risk-conscious business policy that customers can rely on today and in the future in every life situation. As the number 1 in Austria, we have shown foresight for 187 years, day after day, in and throughout Austria.

Robert Lasshofer Chairman of the Managing Board of Wiener Städtische

Annual Report 2011 | Wiener Städtische FOR A BETTER overview A

Highlights & Management

Highlights 2 Showing foresight (editorial) 3 Excellent profit performance (interview) 6 Wiener Städtische Managing Board 12 A day with the Managing Board 14 B COMPANY & STRATEGY

Key figures 22 Leading in Austria 24 Vienna Insurance Group 26 Clear objectives and strategy 30 Skilled employees ensure success 34 Sustainable security 38 Carefree in all life situations 44 Campaigns with foresight 50

Annual Report 2011 | Wiener Städtische B

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MANAGEMENT REPORT 2011

Business development in 2011 54 Risk report 59 Outlook 61 Proposed distribution of profits 63 D

ANNUAL FINANCIAL STATEMENTS 2011

Balance sheet 66 Income statement 72 Notes 2011 79 Auditor’s report 105 Declaration by the Managing Board 107 Supervisory Board report 108

SERVICE Provincial advisory boards 110 Provincial head offices 113 Contact information and addresses 114 Glossary 123

Annual Report 2011 | Wiener Städtische B

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Wiener Städtische AG Managing Board (l. to r.): Judit Havasi, Erich Leiß, General Manager Robert Lasshofer, Ralph Müller, Christine Dornaus.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

“... WE can look back on a year of excellent profit performance in 2011 ...” A

7 An interview with the members of the Managing Board of Wiener Städtische ­Versicherung AG, General Manager Robert Lasshofer, Christine Dornaus, Judit Havasi, Erich Leiß and Ralph Müller.

Mr Lasshofer, 2011 was not a particularly Our premiums increased by close to 3% easy year for the economy in general, or for the non-motor vehicle class (i.e. prop- for the insurance industry. How did Wiener erty insurance without motor vehicle insur- Städtische do? ance). This was primarily because people are becoming considerably more serious Lasshofer: Wiener Städtische performed about providing for the future, also with re- extraordinarily well, in spite of the diffi- spect to their belongings. Insurance is be- cult environment. We increased our result ing increasingly used in this way to cover from ordinary activities to EUR 236 million, risks that require protection. This is the which is outstanding under the current case, for example, with catastrophe cover- economic conditions. We did, however, age, where we became the first mover by suffer a decline in premiums, mainly due offering appropriately designed supple- to single-premium life insurance. This was mentary modules. due to an increase in the tax lock-in period from ten to 15 years. Elderly people in par- Havasi: We recorded a 2.3% growth in ticular do not want to be locked-in for such health insurance in 2011. Some of the a long period of time. This is why we are products in this class were updated, and actively promoting a more realistic and, some even redesigned completely, all therefore, better solution. We were very while a very heated public ­debate was tak- successful in this product area in previ- ing place on our health care system and ous years, and were therefore all the more its funding. We introduced two health care strongly affected by the change in the law. products in 2011 that show once again that we are serious about our responsibility And how did the business perform in the to provide affordable insurance products. other classes? Given that people’s financial resources ­diminish as they age, we are now offering Leiß: We recorded growth in all other a supplementary variant of our special classes in 2011, in some cases consid- class health care insurance that reduces erable growth. There was a significant premiums by 25%, or even 50%, start- turnaround, for example, in motor vehicle ing at age 65. We are also a first mover in insurance. This was partly due to a con- ­private nursing care provision, which we siderable increase in new vehicle regis- introduced as a supplementary module trations last year – an increase of 8.4%. last year. We have also taken up this topic However, there was also a recovery in the in the public debate, as we feel the funding general discounting trend, for all policy gap is widening here. types, making the motor vehicle business more profitable again. Lasshofer: The same is true of pension pro- visions, where we are working to ­maintain

Annual Report 2011 | Wiener Städtische government funding, and we feel that a ­reduce our combined ratio to 95% in 2011. similar funding should be provided for pri- One has to keep in mind, however, that the vate nursing care. When they think about reduction in claims figures for 2011 made private provisions for the future, people also it a year of very low losses. No natural ca- generally think of a combination of pension tastrophes occurred in our area of opera- and nursing care provisions. In our view, tions, which was good for our profits, but the government-sponsored old-age provi- does not mean that the risk of natural sion product should be improved by moving ­catastrophes is declining, and we never- in the direction of investments with a very theless recorded a few large claims by our small weighting on shares and, so, with a industrial customers. guaranteed interest rate. 2011 was your first year of complete inde- How were you able to raise profits signifi- pendence after the spin-off of Vienna Insur- cantly in spite of a fall in premiums? The ance Group Holding – did everything work B conditions on the capital markets were not out well? particularly favourable ... Lasshofer: Focusing on our business op- Dornaus: Given the environment, we can erations in Austria proved to be a good 8 be truly proud of the profits we achieved. move. With 3,500 employees, including This was due, on the one hand, to highly approximately 2,000 directly involved in capable asset management, which is gen- customer service, and around 1.3 million erally conservative and security-oriented. customers, we continue to be number 1 in In addition, we also pay close attention to the country and were able to increase pre- the creditworthiness of the issuers when miums in all classes – except, as previous- choosing investment securities, result- ly mentioned, in life insurance, where the ing in a high weighting of bonds with AAA legal framework for single-premium poli- and AA ratings in our investment portfolio. cies simply changed to our disadvantage. I say this, however, being fully aware of the We were nevertheless able to considerably scepticism needed when talking about rat- increase our economic profit as compared ings today, which is why this is just one of to the previous year. the criteria we use to choose investments. For 2012, we have set ourselves a goal of Müller: We continue to systematically im- “The Motor expanding our real estate portfolio in order plement a regional approach for our 140 to further increase the stability of our in- business offices, some of which were es- ­vehicle business vestments. tablished in 2011. We are currently building became more a new provincial headquarters for Lower Havasi: A high level of cost-efficiency also Austria, while simultaneously creating new profitable again had a positive effect on our profits. The re- business offices in locations such as Tulln structuring measures we have introduced and Herzogenburg. We are therefore in- in 2011.” in recent years, in particular combining all vesting heavily in Austria, especially in the administrative responsibility for personal locations where we are generating most of Erich Leiß insurance, property insurance, and col- our premiums. The stability we enjoy in the lections in three service centres, reduced VIG Group is a great help in all of this. costs substantially. We are also taking ad- vantage of many synergies within the VIG You said earlier that you are not cutting Group, particularly with respect to back costs where employees are concerned. office areas and reinsurance programs. What does this mean in concrete terms? The only area in which we are purposely not cutting back is our employees. We are Müller: It means that we see our employ- saving by reducing the complexity of our ees as the key factor for the success of our processes. regional approach, which is aimed at creat- ing close customer relationships. Our goal Leiß: Thanks to highly disciplined cost therefore continues to be increasing the management, we were able to further number of employees in customer service,

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

and thereby also increasing customer satis- Leiß: In the area of mobility, we added a faction. We are therefore investing and add- second bonus level to our highly successful ing new employees, particularly new field motor vehicle climate bonus, a new insur- staff, even though these are difficult times. ance package for electric bicycles, and a We are also currently training around 150 product providing security against vehicle trainees under our trainee initiative, making lease payment defaults. This underscores A us the leading Austrian insurance company the self-image we have as a first mover in in this area. the Austrian insurance industry. We also consider it important to use all available We are looking for dedicated, outstanding channels to our customers, while remain- 9 individuals in this program – qualifications, ing constantly up-to-date and innovative. expertise and motivation are extremely im- In so doing, we also naturally make use of portant to us. The training and advanced new technologies and are placing increas- training that each individual needs are ing emphasis on applications for smart- therefore an important part of our annual phones. A not unimportant result is better employee performance reviews. We also customer access when a loss occurs, such place great importance on uniform princi- as regular SMS information on the status ples and ethical conduct, which is why we of claims processing. Another example is a reviewed our Code of Conduct last year and storm warning initiative we started in May made it mandatory for all employees. 2011 as an important measure for effective loss prevention. Our WetterService mobile Havasi: For us, equal opportunity is a mat- warning system provides free storm warn- ter of course – 40% of Wiener Städtische’s ings to our private and business customers employees are women, and 34% of man- via an application or SMS for individually agers are women. In 2011 we established specified locations throughout Austria. an “Idea Exchange” that gives female employees a good opportunity to become How is the cooperation with Erste Bank more involved with the Company. De- Sparkassengruppe going? signed as an internet platform, it not only allows suggestions to be submitted and re- Lasshofer: We also continued to expand warded, but also facilitates mutual support and intensify our efforts in this area last by allowing employees to work together to year, and will continue to do so in the find solutions to real problems they are ­future. This form of close cooperation be- “We pay close facing. This significantly promotes the ex- tween an insurance company and a bank change of knowledge and team spirit. is unique in Austria. It allows us to offer attention to customers full service for all their financial issuer credit­ What is happening in terms of customer needs. Due to the added value this cre- service, products, and services? ates, it is also well received by our mutual worthiness in customers. Havasi: 2011 was definitely a year of prod- our investments.” uct innovation. We brought 14 new prod- There were a few changes and reassign- Christine Dornaus ucts to market, compared to a normal ments in the Wiener Städtische Managing rate of three to five a year. These products Board in 2011 … ­covered all classes, and both private and business customers. Two examples were Lasshofer: Yes, changes were made and previously mentioned above, namely pri- we also further optimised our manage- vate nursing care and special-class pre- ment organisation by reassigning several mium reduction after the age of 65. Other areas of responsibility. ­examples of new products brought to market are a new life insurance product Mr Ralph Müller joined our team on 1 April offering guaranteed interest for children, a 2011 and is responsible for sales, market- single-premium product with inflation pro- ing and advertising, areas that were previ- tection, and a supplementary module al- ously mine. Peter Höfinger, on the other lowing hospital deductibles to be reduced. hand, withdrew from the Managing Board

Annual Report 2011 | Wiener Städtische on 30 June in order to dedicate himself ­beginning of 2013 – although based on the more intensively to his duties in VIG. His current situation it now looks likely to be former areas of responsibility, reinsurance delayed. Solvency II brings a higher ­level of and corporate customers, have now been transparency with respect to our ability to assigned to Erich Leiß. fulfil our benefit commitments at any time and with respect to whether the Company Responsibility for human resources passed is sound and solvent today and in the fu- over to me from Judit Havasi at the end of ture. On the whole, therefore, the trend is 2011. In turn, she assumed responsibility in the direction of more careful, sustain- for business organisation and IT from Erich able management. In addition, transpar- Leiß, which gave him the freedom needed ency also creates a greater level of trust. for the strategically very important corpo- We therefore also feel this is a constructive rate customer ­business. In addition, IT is change, even though a few provisions are particularly important in personal insur- still under discussion. It means more ef- B ance, which is one of Judit Havasi’s areas fort for us, and also requires a change to of responsibility. our management culture, since risk con- siderations have to play a greater role in Mr Müller, what areas are you focusing on as all decision-making. The biggest hurdles 10 a new member of the Managing Board? are continuity of documentation, and the preparation and processing of associated Müller: My goal is to ensure that custom- reports and their integration into the day- ers feel they are getting excellent service. to-day life of the Company. Based on the principle of “no customer without an advisor”, we will increase our You just mentioned sustainability and trust, efforts even further in the future to create which brings me to the topic of social re- the closest possible relationships with our sponsibility. What are your thoughts in this customers. Our sales employees and dis- area? tribution partners both have an extremely important role to play in this. We must Havasi: Social involvement has always successfully defend and expand our po- been very important to us. We have worked sition as market leader in all areas of our together with organisations like the Red broad portfolio of product offerings. This Cross, Caritas, Hilfswerk, and Volkshilfe “We brought a requires great commitment, as custom- for many years. It is, after all, normal for ers are rightfully more demanding today. an insurance company to help others who total of 14 new Personal ­service, transparent product are not doing so well – in essence, that is Products to offerings, innovative solutions for all situ- what our business is about. However, we ations in life, and the power of our brand also contribute to art and culture by spon- ­market in 2011.” are central factors in this. We want to apply soring, for example, the Bregenz Festival, these strengths of our Company even more children and youth, or sports and exercise. Judit Havasi effectively. In late autumn, we also used an ­advertising awareness campaign to Müller: In the spirit of our many years of underline this with the themes: “Showing commitment, we brought the Social Active Foresight”, “Be Able to Listen”, and “Talk Day to life in 2011. The idea was incred- in Plain Language”. ibly popular, with 200 employees volun- teering for the initiative in just the first five With respect to transparency, which is weeks. This provides additional support also an important topic in connection with for the sponsored parties that were just ­Solvency II, how are the preparations com- mentioned, and our employees are also ing along? free to make their own suggestions. In this way, we also demonstrate internally that Dornaus: We started full force on the im- social involvement is one of our central plementation of all necessary measures concerns, while at the same time motivat- in 2011. The original plan was, after all, ing our employees. This means that we for the new rules to enter into force at the not only provide monetary support, but

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

also make a personal contribution. It also Let us finish with a look into the future. fits in with our commitment to a regional What strategy will Wiener Städtische follow? approach, as there are projects receiving support throughout Austria. In addition, it Lasshofer: Even though conditions may is also fascinating to see what this creates have changed, our goals and strategy re- internally. Employees talk with each other main the same. First and foremost, we want A about what they are doing, considerably to maintain and further expand our leading strengthening the bonds between employ- position in the Austrian insurance market. ees and to the Company. The members of In addition to products and services that the Managing Board, by the way, have also continue to set the trend for the future, 11 taken part in this initiative. For example, I the road to our goals is built on ­nationwide myself helped in the integration kinder- advice and service, top ­efficiency, an even garten in Brigittenau, the 20th District of closer partnership with Erste Bank and the Vienna, and was impressed by the enthu- Sparkasse savings banks, and a conscious siasm of the children. commitment to our social responsibility.

And what are the prospects for 2012?

“We will focus Müller: We began laying the foundation in our work plan for 2012 under the motto on further “inspire our customers”, which is aimed ­increasing at further intensifying the level of advice provided, promoting the theme of old- ­cus­tomer- age provision as a growth area, gaining new distribution partners, and positioning orien­tation ­Wiener Städtische as the partner for bro- in sales.” kers, agents, and financial service provid- ers. Customer satisfaction is a key success Ralph Müller factor we are putting our full efforts into.

Lasshofer: We are doing everything pos- sible to continue our record of good eco- nomic profits. The October 2011 forecast “Separating from by the Austrian Association of Insurance Companies (VVO) predicts market growth VIG and concen­ of 1.8% over all classes in 2012. We would trating on busi­ very much like to outperform this fore- cast for the overall market. In order to also ness operations ­increase our profits, we are naturally also working toward further improving our com- in Austria has bined ratio. proven to be the Thank you for the interview. right decision.”

Robert Lasshofer

Annual Report 2011 | Wiener Städtische WIENER STÄDTISCHE MANAGING BOARD

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Erich Leiß Judit Havasi Robert Lasshofer Ralph Müller Christine Dornaus

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Erich LeiSS Judit Havasi Robert Lasshofer Ralph müller Christine dornaus Member of the Member of the General Manager, CEO Member of the Member of the A Managing Board Managing Board Managing Board Managing Board

Born in 1956 Born in 1975 Born in 1957 Born in 1968 Born in 1963 Studied law Studied social sciences Studied law Studied commerce 13 and economics

Erich Leiß joined Donau Judit Havasi has been Robert Lasshofer first Ralph Müller was a mem- Christine Dornaus began Versicherung in 1976. In employed by the Vienna worked for the Group at ber of the Managing Board her career at Wiener 1999 he became head of Insurance Group since Union Versicherung AG in of AWD Holding AG with Städtische Versicherung AG the property/casualty 2000. She began as an 1986. After that, he be- responsibility for Austria in 2002 as assistant man- department. In 2007 he internal audit employee in came managing director of and the CEE region before ager of the investment was appointed to the UNION Biztosító, and AWD Gesellschaft für being appointed to the management and loans Managing Board with became the head of this Wirtschaftsberatung and Managing Board of Wiener department, which she has responsibility for the area company in 2003. Judit was appointed to the Städtische Versicherung managed since 2005. of actuarial practice. Erich Havasi was a member of Managing Board of Donau AG on 1 April 2011. From Before this, she followed a Leiß was a member of the the Wiener Städtische Versicherung in 1998. He 2000 to 2004, he was 10-year banking career by Wiener Städtische Austria Austria Committee of the became a member of the managing director of Bank setting up the controlling Committee of the Vienna Vienna Insurance Group Managing Board of Wiener Austria Finanzservice. He department in Invest Equity Insurance Group Managing Managing Board and a Städtische Versicherung AG was head of sales starting Beteiligungs AG. She was a Board starting as of member of the Managing in 1999. In October 2007, in 2005, and subsequently member of the Wiener 1 January 2009 before his Board of UNION Biztosító he was appointed “Deputy a member of the managing Städtische Austria Commit- appointment to the Manag- in Hungary before her General Manager”. He has board of Bank Austria tee of the Vienna Insurance ing Board of Wiener appointment to the Manag- been General Manager of responsible for the private Group Managing Board and Städtische Versicherung ing Board of Wiener Wiener Städtische and commercial customer a member of the Extended AG. Städtische Versicherung ­Versicherung AG since areas. Board before being ap- AG in 2008. 3 August 2010. pointed to the Managing Board of Wiener Städtische Versicherung AG in 2009.

Areas of responsibility: Areas of responsibility: Areas of responsibility: Areas of responsibility: Areas of responsibility: General liability insurance, Company law, sponsoring, Management of the Com- Marketing and advertising, Securities and funds, property insurance, legal business organisation, IT pany, strategic matters, central sales management, equity investment manage- protection insurance, management and provider media and public relations, primary distribution, ment and loans, real private and commercial management, life insur- internal communications, secondary distribution, estate, finance and business, motor vehicle ance, casualty insurance, Erste Bank Sparkassen- commercial client busi- ­accounting, collections insurance, special health insurance, personal gruppe partnership, human ness, corporate and large service centre ­damages, corporate and insurance service centre relations and personnel customer sales, provincial large customer business, development, general headquarters reinsurance, property secretariat, communication insurance service centre with the Supervisory Board, representative vis-a-vis the supervisory authority, insurance associations and trade associations

Annual Report 2011 | Wiener Städtische A DAY WITH THE WIENER STÄDTISCHE ­MANAGING BOARD A

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7:55 A.M. Erich Leiß is already talking with a field employee early in the morning about the solution for a claim in the Large Customer segment. He always makes time to talk with sales staff.

Erich Leiß’ area of responsibility includes, among other things, property ­insurance for private and business customers, as well as corporate and large customers. Claims processing is of key importance to his everyday work. Cooperative garages, for instance, allow efficient time-saving organi- sational structures that directly benefit customers. A Wiener Städtische adjuster can simply drive to such a garage to assess the claim. This saves customers travel time, waiting time and formalities.

Annual Report 2011 | Wiener Städtische 8:00 A.M. Judit Havasi checks the agenda for the day A with her assistant and takes the documents for today’s Idea Exchange meeting, one of Wiener Städtische’s many employee initia- tives. 15

“Our 2012 work ­programme is all about intensifying our sales activities. Our main goal is to provide excellent ­service that further increases customer satisfaction.”

9:15 A.M. Ralph Müller (centre) calls a quick sales meeting in his office. He ­discusses current issues with Walter Wichtel, head of Corporate Sales (left), and ­Gerhard Heine, head of Alternative Sales.

The focus is on objectives and sales measures for 2012. The latest sales figures are analysed and agreement is reached on main priorities and the implementation of planned measures over the next few weeks. An initiative to expand both distribution channels is planned for 2012.

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10:00 a.m. Christine Dornaus, responsible for the investment area, talks on the phone with an employee about the details that still need to be clarified regarding a possible real estate investment.

In accordance with its conservative investment policy, Wiener Städtische is planning to expand its real estate portfolio in 2012.

10:55 a.m. “Wiener Städtische is a reliable partner Ralph Müller informs Robert Lasshofer about current sales results. for its customers. Wiener Städtische continues to follow the principle of regionalism, even in difficult economic times. Having a nationwide presence in Austria is a fun- Our motto is: ‘An damental decision that allows customer contact to be further intensified in the future and the best possible advisory services to be offered. ­advisor for every ­customer.’ We want our customers to be enthusiastic about our expertise and innovative products. Those are our stated goals for 2012.”

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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11:30 a.m. The Idea Exchange committee: Robert Redl, Robert Bilek, Chairman Judit Havasi, Franz Urban, Ralph Müller (l. to r.)

The committee meets periodically to discuss and evaluate ideas submit- ted by employees and to decide on their implementation. The suggestions cover a wide range extending all the way from minor improvements in the workplace to Group-wide innovations.

“More than 250 ideas submitted since the beginning of September 2011, more than 400 comments, and more than 10,000 visitors show the great interest generated by the Idea Exchange.”

Annual Report 2011 | Wiener Städtische A

18 “We work continu­ ously to optimise loss prevention by 1:30 p.m. integrating state-of- Erich Leiß receives the latest figures on the mobile phone storm warn- the-art technologies. ing from co-worker Astrid Frisch. The storm warning ­initiative that began in 2011 to deliver ­warnings by SMS or app has been very well received by our customers. They greatly ­value the ­opportunity to receive storm warnings not only for the location where they live, but for any location in Austria.”

Annual Report 2011 | Wiener Städtische A

“Social responsibility 19 is a key theme that is consciously and 2:15 p.m. ­actively promoted Judit Havasi talks with Sabine Weiss, who is responsible for advertising and within our company. sponsoring, about activities for Social Active Day 2012. The impressive suc- Wiener Städtische is once again promoting employee social ­involvement to cess of the Social help the needy and disadvantaged in our society in 2012 by making a work- ing day available to all employees who want to volunteer their time. Active Day shows that our employees are highly dedicated to volunteer activities.”

2:45 p.m. On the way to a meeting with other members of the Managing Board, Robert Lasshofer meets Doris Janik, head of the General Secretariat, and hears about the latest developments in the Austrian insurance market.

Annual Report 2011 | Wiener Städtische 3:35 p.m. Erich Leiß and Annemarie Ulbing, head of the Property Insurance Service Centre, discuss the new customer satisfaction study. A In order to increase customer satisfaction, ­Wiener Städtische focuses not only on quick and easy claims processing, but also on opti- 20 mising measures for loss prevention.

4:15 p.m. Christine Dornaus chairs the investment meeting with Reza Kazemi-­ Tabrizi, Robert Burger, Christian Buchmayer and Anton-Leonhard Werner (l. to r.).

The meeting begins with a discussion of the current market situation. Christine Dornaus examines investment valuations and discusses with her team the next steps to be taken for the planned transactions. In ac- cordance with the policy of risk-conscious business management, the focus is on security-oriented investments.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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6:15 p.m. Robert Lasshofer is on his way to the 20th floor to a discussion meeting.

“Stability and security have top priority in every decision. We ensure this by making selected investments in sound projects that guarantee reliability for our customers even in economically difficult times.”

Annual Report 2011 | Wiener Städtische Key Figures Wiener Städtische Versicherung AG

in EUR million 2010 2011

Gross premiums written 2,432.8 2,274.6 Property/casualty insurance 1,046.5 1,066.2 Life insurance 1,058.5 872.9 Health insurance 327.8 335.4 Financial result 388.4 388.9 B Result from ordinary activities 187.6 235.5 Total investments 12,510.6 12,323.0 Investments 10,286.6 10,107.1 Investments for unit-linked and 22 index-linked life insurance 2,234.0 2,215.9 Underwriting provisions (excluding unit-linked and index-linked life insurance) 8,294.9 8,531.3 Underwriting provisions for unit-linked and index-linked life insurance 2,141.4 2,164.9 Equity capital 881.7 903.3 Number of employees 3,497 3,462 Office employees 1,546 1,543 Field sales representatives (incl. trainees) 1,951 1,919

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

2011 PREMIUMS BY SEGMENT 2011 INSURANCE PAYMENTS* BY SEGMENT

Life 38.4% Life 43.7% Property/Casualty Property/Casualty 46.9% 40.5% B

23 Health 14.7% Health 15.8%

* Incl. costs of claims processing

2011 RESULT FROM ORDINARY Activities BY SEGMENT STRUCTURE OF INVESTMENTS 31 DEC 2011*

Life 12.9% Other 0.5% Real estate 2.7%

Loans 14.0% Health 12.9%

Property/Casualty Securities 64.6% 74.2%

Equity investments 18.2%

* Investments as at 31 December 2011 excluding investments for unit-linked and index-linked life insurance: EUR 10,107.05 million

Annual Report 2011 | Wiener Städtische Leading IN Austria

In an excellent position even in financially difficult times: as a reliable partner with foresight, Wiener Städtische offers ­security and stability, along with the experience of a company that has been well established for 187 years. Other key success factors

B for Wiener Städtische’s market leadership in Austria are its ­financial strength, know-how, innovative insurance solutions and 24 top-level consulting competency.

With a market share of about 14% and a will continue to be one of the main pillars of premium volume of about EUR 2.27 bil- its strategic orientation. This is also the lion most recently, Wiener Städtische core strength of all employees and distri- ­Versicherung is the leading Austrian in- bution partners. surance company. It is also the largest ­individual company in the international Reliable partner in all situations ­Vienna Insurance Group (VIG). It has its As an innovative insurance company, registered office in Vienna and is focused Wiener Städtische offers individual, flexi- on activities within the Austrian market. ble insurance solutions for every personal As an insurance partner, it is responsible life situation as well as customised pack- for more than 1.3 million customers ages for businesses in all lines of business across all lines of business. In addition, (property/casualty, life and health insur- Wiener Städtische has branch offices in ance). Banking products are also becom- Italy and Slovenia. ing increasingly important. In 2008, ­Wiener Städtische addressed the growing Consistent customer orientation need of its customers for comprehensive With provincial headquarters in all nine support by entering into a distribution federal states, about 140 business offices agreement with Erste Bank Sparkassen- and approximately 2,000 advisors, ­Wiener gruppe. Continuous investments into this Städtische is clearly focused on having a partnership expand and improve the ser- nationwide presence in Austria in order to vices offered on an ongoing basis in order provide the best possible advisory ­services to be able to offer customers one-stop and ensure proximity to its customers. The ­solutions in all financial matters. consistent implementation of the principle of regionalism is the basis for the ongoing Source of economic stimulus optimisation of customer relationships, Thanks to its long-standing business his- comprehensive professional support tory and strong market position, Wiener throughout Austria and prompt claims set- Städtische is one of the most important tlement. Clear customer orientation is the investors and sources of stimulus for the crux of Wiener Städtische’s success and business hub Austria.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Wiener Städtische is one of the most im- and capital requirements for insurance “We are portant institutional real estate investors under the terms of the EU Directive “Sol- ­represented in the country and regularly adds pro­ vency II”. perties to its investment portfolio. Also throughout when it comes to investments, Wiener Städtische always acts with a view toward Austria.” maximum security and a high return for the policy holders. As an equitable part- Judit Havasi ner for industrial enterprises and large corporations, Wiener Städtische also makes a major contribution to the stabili- ty and growth of the Austrian economy.

Stability and security Targeted investments in solid projects as well as the Company’s long-standing factbox ­experience and success provide stability R With a market share of about 14% and even in economically difficult times. In 1.3 million customers, the leading addition, a high equity ratio and integra- insurance company in Austria tion into the broadly positioned Vienna Insurance Group (VIG) provide security. R New provincial headquarters, about 140 VIG, which is listed on the Vienna Stock business offices and 3,500 employees, Exchange’s leading index, occupies a of which 2,000 are advisors, ensure the leading position on the market in Central provision of services nationwide and Eastern Europe and makes a signifi- cant contribution to Austria as a financial R Strong financial position due to solid ­centre. capital resources and integration into the Vienna Insurance Group Already today, Wiener Städtische is well prepared for the new risk regulations

Annual Report 2011 | Wiener Städtische VIENNA INSURANCE GROUP

With a premium volume of approximately EUR 9 billion and around 25,000 employees, Vienna Insurance Group (VIG) is one of the leading insurance groups in Austria and Central and Eastern ­Europe (CEE). Innovation, strong customer relationships and an

B emphasis on customer service create a high quality product ­portfolio offering attractive solutions in both the life and non-life 26 insurance segments.

VIG’s clearly focused strategy for expan- sion in the CEE region enabled it to make a transition from being an Austrian insur- ance company to an international group at an early stage. Today, VIG is represented by approximately 50 insurance companies in 25 countries. VIG stands for financial stability, and offers a high level of security to customers, shareholders, partners and employees. One of the key reasons is its conservative investment policy. This is re- flected in its A+ rating with a stable out- look, which makes Vienna Insurance Group the best-rated company in the ATX leading index of the Vienna Stock Ex- change. VIG has also been listed on the Prague Stock Exchange since 2008.

In addition to economic considerations, the Group also places great importance on an involvement with social concerns and helping to create a future society worth living. In this way, Vienna Insurance Group remains true to its fundamental goal of value-oriented growth.

Core market: Austria Vienna Insurance Group is the largest in- surer in Austria, where it holds an excel- lent position with its group companies Wiener Städtische, Donau Versicherung and s Versicherung. The strength shown in this core market since 1824 is one of the reasons for the successful realisation of VIG’s internationalisation strategy.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Major player in the CEE region ­household and homeowner insurance as Vienna Insurance Group started its ex- well, today retirement provisions, savings pansion in 1990, making it one of the first and investment products in the form of Western European insurance companies life insurance policies are enjoying rising to expand into Central and Eastern Eu- popularity. rope. Today the Group is one of the most important players in this region and earns With the establishment of VIG RE, the more than 50% of its total Group premi- Group has also had its own reinsurance ums in the CEE region. It has group com- company since 2008. The location of the panies and branches in the following company’s registered office in the Czech countries in this region: Albania, Belarus, Republic underscores the importance of Bulgaria, Croatia, Czech Republic, Esto- the CEE region as a growth market for nia, Georgia, Hungary, Latvia, Lithuania, VIG. Macedonia, Montenegro, Poland, Roma- nia, Russia, Serbia, Slovakia, Slovenia, Strategic partnership with Erste Group B Turkey and the Ukraine. VIG has also Erste Group is a strong partner for Vienna been represented in Bosnia-Herzegovina Insurance Group. It also operates inde- “A clear since 2011. Due to many years of experi- pendently, has the same values and fol- 27 ence and excellent knowledge of the mar- lows a similar growth strategy. The two division of kets in this region, and to its expertise in companies benefit equally from a long- responsibili­ all insurance matters, VIG is optimally po- term cooperation agreement concluded sitioned to continue benefiting from fu- in 2008 for Austria and the CEE region. ties within the ture increases in the standard of living in Erste Group distributes VIG insurance the CEE region and from the accompany- products, whereas VIG companies ­offer Group allows ing increased need for insurance. Erste Group banking products in re- full concen­ turn. The cooperative arrangement gave Vienna Insurance Group is also represent- ­Vienna Insurance Group access to a well- tration on ed in Germany, Liechtenstein and Italy. established bank distribution network.

­Austria.” A common goal: to offer security to Skilled employees bring success customers Employees play a particularly important Robert Lasshofer Every customer is unique. They differ in role in the success of a service company. their need for insurance and retirement Here too, in addition to dedication, pro- provisions, living circumstances and the fessional advice, and excellent service, way they like to receive advice. Vienna In- Vienna Insurance Group places great im- surance Group is aware of this. There is portance on understanding local markets no “standard” insurance customer for and close customer relationships. VIG, it therefore pays close attention to special local characteristics, and main- Further information on Vienna Insurance tains a presence with more than one Group is available at www.vig.com or in brand name and broad distribution net- the VIG Group Annual Report. works in many of its markets. There is one thing, however, that all Vienna Insurance Group companies have in common: the goal of providing security to customers.

VIG companies have offered a complete range of insurance solutions in Austria for many decades in both the non-life and life segments. Although the markets in Cen- tral and Eastern Europe are currently still at a different economic level, they are ­increasingly moving in a similar direction. While demand in this region in the period following 1989 was initially strongest for motor vehicle insurance, and then

Annual Report 2011 | Wiener Städtische AVOID THE PROBLEMS OF TOMORROW TODAY. PROVIDE FOR THE FUTURE.

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Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

“Take care of ­tomorrow, while still being able to B

enjoy today. Our 29 ­‘Prämienpension’ and ­‘Garantiepension’ pension products offer flexible ­retirement provision ­models at a reasonable price, and help provide a secure standard of living even after the end of your professional life.”

What we can offer you Don’t worry about getting old. Our “Extra- Pflegegeld“ nursing care insurance adds many benefits that enhance the basic government insurance, closing a big gap in your retirement provisions.

Annual Report 2011 | Wiener Städtische CLEAR OBJECTIVES AND STRATEGY

Wiener Städtische’s overarching strategic objective is clear and seemingly simple: continuing to develop its position as the leading insurance company in Austria.

B Radical change continues in insurance that are to contribute to the long-term markets. Regulatory changes, a new risk security and enhancement of the Com- perception as a result of the financial and pany’s success. 30 economic crises and changes in custom- er behaviour pose major challenges to > Best possible consulting services for ­insurance companies. Better informed the customers and knowledgeable consumers create a > Targeted personnel development competition in trust. On the other hand, > Innovation of products and services as a result of people’s increasing need for > Increasing profitability security, the crisis brings new business > Sustainable development of the opportunities, especially in consulting as Company’s management and well as in the pension and property insur- ­investments ance business. > Developing the partnership with Erste Bank OBJECTIVES STRATEGY Developing a leading market position With a market share of about 14% and a Several strategic cornerstones serve to premium volume of EUR 2.27 billion, implement these objectives – always with ­Wiener Städtische easily remained number a view to the wellbeing, security and 1 in the Austrian market in 2011. Approxi- peace of mind of the customers. Credibil- mately 1.3 million private and business ity and trust, customer satisfaction and customers rely on the first-class service quality of service, responsibility and ini- “Our goal is to provided by Wiener Städtische in the life tiative as well as appreciation and respect insurance, health insurance and property are the fundamental values. The motto ensure sustained and casualty segments. chosen for 2012 – “Inspire our clients!” – perfectly conveys the central strategic Company perfor­ Wiener Städtische’s primary strategic ob- approach. mance over the jective is not only to maintain this leading position but also to continue to develop it. Best possible service nationwide long term.” As a reliable partner to its customers in all Due to the consistent implementation of life situations, it focuses on open dia- the principle of regionalism, Wiener Robert Lasshofer logue, a high degree of transparency and Städtische is represented and close to its a business perspective that extends be- customers throughout Austria. Estab- yond the “here and now”. lished components of this proximity are the provincial headquarters in all nine fed- With these objectives in mind, it has de- eral states, the approx. 140 business of- veloped a series of operational ­objectives fices throughout Austria and the ­approx.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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31 2,000 advisors in the Company. Even in misation of administrative services and economically turbulent times, Wiener ­synergies to continuously improve the Städtische holds on to its wide regional combined ratio and result from ordinary base and invests in establishing and ex- activities. The Company also deliberately panding its locations. pursues a conservative investment ­policy.

Constant innovation Social responsibility “We want to When it comes to the development of in- Since its foundation 187 years ago, novative insurance products and services ­Wiener Städtische has upheld values, ­inspire our that are tailored to meet customer needs, such as joint or sustainable management. ­customers Wiener Städtische has traditionally been This fundamental attitude is a permanent the trendsetter in Austria. The Company process that is firmly anchored in the cor- in 2012.” will continue to maintain and develop this porate culture. Reliable customer support position. Optimisation, simplification and is just as much part of it as equal treat- Ralph Müller individualisation are the most significant ment, caring for employees, respect for challenges in this regard. For example, in the environment, social involvement or 2011 storm alert services were provided promoting sports, arts and culture. to all customers free of charge via an app. Targeted personnel development Developing the partnership with Erste Wiener Städtische employees primarily Bank Sparkassengruppe advise customers. Employee develop- The successful partnership, which has ment and training of young employees been going on since 2008 and which are, therefore, crucial for lasting success ­allows customers to obtain comprehen- in personal advisory services. sive advice on a full range of financial and insurance matters, will be further devel- oped and strengthened, as both compa- nies have customer potential that has not yet been fully exploited.

Improving efficiency and cost control Long-term success requires solid figures and high efficiency. Accordingly, Wiener Städtische’s aim is for targeted growth in premium volume as well as further opti-

Annual Report 2011 | Wiener Städtische OUR CUSTOMERS UNDERSTAND THEIR BUSINESS. WE UNDERSTAND OURS.

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32 “Business Class is right for your ­business. Professional ­service and advice – even for complex requirements. We take care of all of your insurance needs, so that you can concen- trate on your business.”

What we can offer you Flexible custom-tailored protection with special “Plus- Risk” packages. In addition to “extended cover”, you can even obtain cover for natural hazards with our ­“unidentified hazards” and “natural hazards” packages.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Annual Report 2011 | Wiener Städtische SKILLED EMPLOYEES ENSURE SUCCESS

Experience, skills and the involvement of its employees are key factors for success in Wiener Städtische’s leading position on the Austrian insurance market. First-class educational and ­training programmes, as well as initiatives to motivate employees­

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Jobs for about 3,500 employees interactions. The corporate ­behaviour to- During its 187 years in business, Wiener wards the employees, customers and Städtische has become the largest em- shareholders is guided by ­honesty and ployer in the Austrian insurance industry. sustainability, leadership in matters large Of the approx. 3,500 staff members, and small, customer satisfaction, diver­ about 2,000 work as advisors. Open sity and equal opportunity. In addition, ­communication and a “Code of Conduct”, ­values, such as respect, fairness and ap- which is based on Wiener Städtische’s preciation, characterise the corporate corporate values, are of central impor- culture. tance to all the employees in their daily Largest apprentice trainer in Austria As the number 1 apprentice trainer, ­Wiener Städtische employs about one third of all apprentices that are trained as insurance advisors throughout Austria. About 250 young people from all over Austria have completed their apprentice- ship with Wiener Städtische over the past five years. In 2011, Wiener Städtische continued to focus on the promotion of young talent and offered again training with open-ended career opportunities to about 100 young people as part of the ­apprentice recruitment. Thus, in addition to a sound training, the apprentices also obtain the necessary equipment for a promising professional career. Approxi- mately 150 apprentices, of which 36% are women, are currently undergoing training.

Personnel development in focus In addition to general education and ­training, which are central elements of Trainees: Matthias Krischke, Joana-Nina Matejka, Jessica Sedlacek, Dominik Salomon, ­personnel policy, group-wide analyses of Lisa Dolezal and Fabian Leidenfrost (l. to r.). potential form the basis for a targeted,

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

needs-based support programme for the the five-member Managing Board and purpose of imparting know-how and cor- 35% women in middle management posi- porate values on an individualised basis. tions, the Company puts this principle Wiener Städtische continuously invests into practice. in training and support programmes in ­order to offer its employees growth oppor- In addition, since 2005, Wiener Städtische tunities and career perspectives. has been a quick starter with respect to the so-called “Daughters’ Day”, as part of An important focus of personnel develop- which all Viennese girls between the ages ment is a three-level training programme of eleven and sixteen are invited to take a for executives, which systematically sup- look behind the scenes of a typical work- ports the target groups – future/young day of Viennese companies. In 2011, 40 executives, department heads and group girls took this opportunity to learn about leaders – in customised internal courses. the responsibilities of an insurance advisor The goal is to strengthen the leadership at Wiener Städtische. B skills of the participants. In addition, the Company makes a conscious effort to As one of the most family- and female- promote the exchange of information and friendly companies in Austria, Wiener 35 the continuous transfer of best practices Städtische has already received several among all employees. In doing so, Wiener awards. As early as 1974, it played a pio- Städtische contributes significantly not neering role as one of the first employers only to the personal and professional de- in Austria to introduce a company kinder- velopment of its employees, but also to garten in Vienna. Today, 104 children of the long-term security of its corporate employees are looked after in these facili- success. ties. The possibility of flexible working time and work organisation models, as Exchange of ideas – creativity pays off well as the return of 90% of the em­ployees from maternity leave, demonstrate the bor success of the measures for the benefit of n se ee a work-life balance. Id

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i Naturally, Wiener Städtische also prac- d tices equal treatment when it comes to persons with special needs and the topic Employee statistics as of of immigration. It has 102 disabled em- 31 December 2011 Employees can demonstrate their faith in ployees, which is more than what is ­legally their own ideas on Wiener Städtische’s required. In addition, Wiener Städtische 2010 2011 Ideas Exchange. All employees are invit- supports multilingualism as an important Number As of As of of employees 31 Dec 31 Dec Change ed to submit via this online platform their element when it comes to customer infor- Administration 1,546 1,543 –3 ideas, beliefs and experiences in order mation and English is part of its minimum Headquarters 1,030 1,076 +46 to improve processes, products or work- requirements in all areas. Provincial headquarters place design. They can also actively (including business­ 516 467 –49 ­support the new and onward develop- offices) ment of products and services. A com- Sales 1,802 1,778 –24 mittee ­under the direction of Judit Havasi Sales representatives 1,598 1,570 –27 meets on a regular basis and evaluates Organisational every single idea that has been submit- employees 204 208 +4 ted. Apprentices 149 141 –8 Total 3,497 3,462 –35 Equal treatment in practice The decrease in the number of personnel by 35 In the course of its long tradition, Wiener employees is mainly due to natural turnover and the Städtische has attached great impor- integration of duties during the structural reorgani- sation of the Company. tance to equal treatment, as well as find- ing a balance between life at work and home. With two women and mothers in

Annual Report 2011 | Wiener Städtische DON’T JUST TALK ABOUT RESPONSIBILITY. TAKE SOME, TOO.

B “Insurance has a great deal to do 36 with responsibility that extends far beyond the busi­ ness itself. One has to look at people in their ­entirety. We therefore ­encourage our employees to become socially ­involved.”

What we can offer you Many years of social involvement. Approximately 200 employees were involved in helping the dis- advantaged during just the first five weeks of the “Social Active Day” initiative.

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Annual Report 2011 | Wiener Städtische Sustainable security

Wiener Städtische actively assumes social responsibility vis-à-vis its employees, customers and society. Values, such as social ­involvement and sustainable management, are integral parts of corporate governance.

B Social Active Day bono involvement of its employees. For many years, Wiener Städtische has ­Already in the first five weeks, about 200 been socially committed to and has employees used Social Active Day in 38 ­cooperated with aid organisations, such around 50 projects for the benefit of as Caritas, Hilfswerk, Kinderfreunde, ­disadvantaged members of our society. ­Diakonie, the Red Cross, Volkshilfe, the They were able to get involved with aid or- Samaritans and Integrationshaus. In ganisations, with which Wiener Städtische 2011, the European Year of Volunteering, had a pre-existing partnership, or with Wiener Städtische sent another powerful projects suggested by them. The range of message of the high importance attribut- activities was comprehensive and includ- ed to social issues within the Company ed giving soup to those in need, caring for with the so-called “Social Active Day”. the elderly, working with persons with The Social Active Day initiative was intro- special needs, caring for children from duced in order to actively support the pro socially disadvantaged families, as well as replenishing the shelves at social super- markets.

The Managing Board also participated in this activity. Robert Lasshofer spent a day accompanying the residents of the nurs- ing ward of a retirement home. Judit Havasi spent time with children with spe- cial needs and helped out at the “Am ­Himmel” nursery, which provides curative education, while Ralph Müller visited the Kinderfreunde Kindergarten in Engerth- straße, where he demonstrated his talent as a storyteller.

Sustainable products with foresight Wiener Städtische also meets its respon- sibility for providing sustainable and long- term security to its customers through af- fordable products as part of the government-sponsored pension plan and individually customisable models for a company pension plan. Thus, Wiener Städtische covers both elements that are Judit Havasi dedicated her time to the “Am Himmel” remedial nursery on her Social Active Day. recommended within the scope of the

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Ralph Müller with children from the Kinderfreude Kindergarten.

three-pillar model as a supplement to Micro-insurance – celebrating five “Providing support government pension with attractive offer- successful years ings. Socially disadvantaged groups are more to socially disad­ exposed to risks, such as illness, acci- Products tailored to the needs of dents or loss of property, than the aver- vantaged groups persons with special needs age population. Thus, Wiener Städtische is one of Wiener In 2011, Wiener Städtische developed, was the first insurance company in ­together with the Behindertensportver- ­Austria and in the European Union to ad- Städtische’s funda­ band Salzburg (Disabled Sports Federa- dress the issue of micro insurance. In tion of Salzburg), a unique, tailor-made 2011, the cooperation with the “Zweite mental values.” insurance concept for group health and Sparkasse”, the “Bank für Menschen accident insurance. Previously, the ap- ohne Bank” (“the bank for those without a Robert Lasshofer proximately 7,000 members of this feder- bank”), has already celebrated its fifth ation had difficulty in obtaining or had anniversary. “Zweite Sparkasse” provides limited access to insurance solutions as a people in need with particularly favour- result of their physical impairment. This able banking and insurance services free obstacle could only be overcome with the of charge. Included within the scope of help of Wiener Städtische – a significant this cooperation, Wiener Städtische gives step towards equal treatment in the in­ customers of “Zweite Sparkasse” basic surance field. The framework agreement insurance coverage with free legal advice ­offers comprehensive insurance cover- once every three months, as well as free age in the event of an ­accident or illness, accident insurance. Wiener Städtische including spouses or domestic partners Versicherungsverein – Vermögensver- as well as children of members of the Dis- waltung – Vienna Insurance Group pro- abled Sports Federation. Accident insur- vided support for this activity. ance also includes ­insurance coverage for participation in national competitions Sponsorship for art and culture as well as the option of co-insurance for By supporting art and cultural projects, international competitions. Wiener Städtische significantly contributes

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Hermann Fried, Wiener Städtische Provincial Director, Christine Dornaus, Member of the Wiener Städtische Managing Board, and Thomas Irschik and

Gerhard Fida, Managing Directors of Wien Energie Fernwärme, at the awarding of the CO2 certificate by the Vienna University of Technology (l. to r.).

to the diversity and attractiveness of of safety. It supports, for example, Kinder- ­Austria’s cultural landscape. For many freunde, the Zoom Kindermuseum, and years Wiener Städtische has been the the KinderuniWien. sponsoring partner of institutions, such as Burgtheater Wien, Volkstheater Supporting sports and exercise Wien, Theater in der Josefstadt, Ver- Sports are an important contributing fac- einigte ­Bühnen Wien, Opernfestspielen tor in maintaining one’s health. The cor- St. ­Margarethen, Bregenzer Festspiele, rect preventive health care, vitality and a Carinthischer Sommer and Viennale – to healthy body are essential requirements name just a few examples. for a happy and fulfilled life. As sponsor of various Austrian sports associations, Activities for children, adolescents and ­Wiener Städtische supports numerous families projects, such as the Vienna City Mara- Wiener Städtische is also a reliable part- thon, the Wachau Marathon, the Vienna ner for supporting children and adoles- Capitals and the Wiener Käfigmeister- cents taking part in sports activities, cre- schaften. ative projects and initiatives on the issue

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Careful handling of resources Wiener Städtische also takes environ- mental protection very seriously as part of factbox its activities. The Company focuses ­primarily on campaigns on raising the Wiener Städtische as Sponsor awareness of its employees as well as on the ongoing optimisation of energy effi- R Children & adolescents: Sponsoring ciency in the entire building and office op- projects, including Kinder-Sicherheits­ erations, including the IT infrastructure. olympiade or Zoom Kindermuseum, and This also includes the use of environmen- collaboration with child-oriented tally friendly materials as well as energy- ­organisations. efficient lighting systems. R Social involvement: Cooperation with In addition, Wiener Städtische, as a co- “Zweite Sparkasse”, the “Bank für operation partner, gives the IT hardware Menschen ohne Bank”, and with many B that it no longer uses to the non-profit aid organisations. ­organisation AfB (Arbeit für Menschen mit ­Behinderungen, Work for People with R Arts & culture: Wiener Städtische 41 Disabilities). AfB collects the IT equip- supports cultural projects, theatre ment from its cooperation partners, tests productions, as well as film and music it, repairs it, if necessary, and re-sells it festivals. with a twelve-month warranty. AfB has set out to create workstations for persons R Sports & exercise: With the right with special needs at its facility and has pension plans and as a sponsor of the thus established the first non-profit IT Austrian sports associations, Wiener system house in Europe. Städtische uses measures to maintain and support health. In this regard, it also When it comes to supplying its office supports large events such as the Vienna buildings with heating, Wiener Städtische City Marathon. increasingly uses district heating, and thereby contributes significantly to the

­reduction of the greenhouse gas CO2. The new provincial headquarter in St. Pölten, which is still under construction, will be “Active climate built according to the most modern en- ­protection is an ergy technology principles and will be supplied with district heating. By using important ­every- this environmentally friendly, reliable and efficient technology, Wiener Städtische day principle of saved a total of 1,575 tons of CO at three 2 ­sustainability office locations in Vienna in 2011. In the coming years, a climate protection part- for us.” nership with Wien Energie Fernwärme is expected to help to further increase dis- Christine Dornaus trict heating and lower the emission levels more than before. The CO2 savings will be confirmed by a certificate issued by the Vienna University of Technology.

Annual Report 2011 | Wiener Städtische YOU HAVE TO GET BETTER BY YOURSELF. WE’LL DO THE REST.

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“Fighting an ­illness already takes enough energy. You shouldn’t also have to worry about the cost of the treatment.”

What we can offer you Pay significantly lower premiums starting at age 65. With our new “ZukunftsPlus” supplementary insurance for “TopMed” health policies, you can choose to reduce your premiums by 25% or even 50%.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Annual Report 2011 | Wiener Städtische CAREFREE IN ALL LIFE SITUATIONS

With customised, flexible products and individual services, Wiener Städtische’s customers can obtain optimal provision for all life situations.

The needs and satisfaction of the custom- insurance, life insurance, accident insur- B ers are the focus of all of the Company’s ance, nursing care and building society activities – in 2011, 14 product innovations savings. set new standards in this regard. The focus was on pension and business products. On the security radar, financial security in 44 old age was followed by concern about PENSION INITIATIVE property and fear of natural disasters. In 2011, Wiener Städtische invested in prod- Security is Wiener Städtische’s core busi- uct innovations and preventive measures ness and especially in economically diffi- also in these areas – an overview of the cult times the need for long-term security key innovations is provided below. is greater than ever. Also in the field of pri- vate pensions, Wiener Städtische owes its INNOVATIONS IN LIFE INSURANCE pioneering role and market leadership not least to its foresight in socio-political The classic life insurance continues to be themes and issues. Most recently, in a favourite when it comes to security-­ ­November 2011, it presented, together oriented pension. Benefits that argue in “Create a with the Institut für Strategieanalysen favour of this are guaranteed interest and, ­(Institute for Strategy Analyses [ISA]), a in the case of the Garantiepension pen- solid foun­ security radar that analyses the “con- sion product, calculation of the pension cerns” of 1,800 insured parties in Austria. payment according to the pension table dation for The information gained from this study is that applies at the time the contract is the future.” incorporated into the concept of new ­entered into. This means a higher pension products and guarantees a precise align- in the case of continuously increasing life Judit Havasi ment with customer needs. 47% of those expectancy, because a shorter average surveyed indicate financial security in old payment period is assumed at the time a age to be the number 1 concern. This policy is purchased. confirms that Wiener Städtische made the right choice with the pension initiative Double pension with the “Start-ins- it started in 2011 and its commitment to Leben” package for children ­reforms in the government incentive The Start-ins-Leben package combines ­system permitting greater freedom of insurance coverage and capital formation choice. Therefore, these will be contin- in one product of the classic life insurance. ued at full force in 2012. With a guaranteed interest of 2%, a solid financial basis can be created for the Wiener Städtische provides its customers ­future of the insured child, since at the with the right provision in all phases of life time of the determined payout, a starting and, if the needs of the customers capital is created for key milestones in life change, adjusts its insurance offerings in – professional training, education, dwell- a flexible manner to new life situations. ing or driving licence. Even in the event of The product portfolio includes pension death of the premium payer, the insured

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

sum plus the gains accrued after expiry of the event when no benefit claims are the agreed term of insurance will be paid made. If no need for care arises, as of age out. Wiener Städtische also assumes pay- 65, the customer benefits from a premi- ment of outstanding contributions. How um payment every five years. The new the profits are invested (classic, dynamic policy can also be taken out in addition to or progressive) and the monthly contribu- any existing contracts. tions can be freely selected with this ­product. Reduction in deductibles when in hospital In addition, the Junior’s Best future provi- With the Selbstbehaltsretter deductible sion plan for children or grandchildren saver product, Wiener Städtische offers a and the special insurance package TAKE new additional policy that is unique in IT EASY for students and young people Austria, which lowers the financial burden offer further customised, advantageous in the event of a hospital stay. The policy pension models for young people. guarantees reduction in the deductible B payable as of the second calendar year Limited Edition 15/10 & Sicher gradually by 20%. If no claims are submit- Save for 15 years, but pay only for ten ted for five calendar years, there will be 45 years – this is the clear benefit of the no deductible payable in the sixth year in ­Limited Edition 15/10 & Sicher (secure), the event of a hospital stay. The “Selbst- a product of the classic endowment insur- behaltsretter” policy can be taken out as ance. In the case of survival, at the end of a supplement to the special class policies the term, Wiener Städtische pays 104.5% with deduction. of the gross premium amount, plus profit sharing. The payment is exempt from Special class premium reduction as of ­income tax and investment income tax. age 65 with ZukunftsPLUS Income usually decreases on ­reaching PIONEER IN PENSIONS AND ­retirement. With ZukunftsPLUS, a sup- ­NURSING CARE plemental insurance for special class TOP MED, customers can reduce their premi- The state-supported pension provision – um by 50% or 25% when they reach 65. or premium pension – for closing the Until the age of 60, this additional policy ­pension gap has developed into one of can be taken out without any medical Wiener Städtische’s most successful examination. The customer’s high level ­pension products. In 2011, it celebrated of freedom of choice is also a unique fea- its 240,000th state-supported premium ture. In the event the contract is terminat- pension customer – and the trend of sup- ed at the age of 65, the customer receives ported pension provision continues. an attractive one-time payment instead of ­Compared to the previous year, in 2011, the above-mentioned reduction in premi- ­Wiener Städtische was able to record um. In the event the policy is terminated more than 5% growth in premium from prior to the claim for a reduction of the premium pension contracts. premium, the entire actuarial reserve of the additional policy is paid out. New PflegeBONUS with payment at intervals Award-winning BUSINESS CLASS As the number 1 insurance company in Austria, Wiener Städtische has also As a strong partner for the economy, recognised the high importance of private ­Wiener Städtische strives to satisfy the nursing care, which will continue to gain continuously increasing security require- importance in light of demographic and ments of small and medium-sized opera- social developments, and develops inno- tions (approximately 40,000 customers vative products for it. For example, in at present) with continuous product in­ 2011 it brought the attractive additional novations. In 2011, Wiener Städtische policy PflegeBONUS to the market for ­received the “Assekuranz Award” with a

Annual Report 2011 | Wiener Städtische “very good” classification for once again In all, more than 580,000 customers put bringing additional diverse products and their trust in the extensive cover provided services onto the market for Business by Wiener Städtische’s third-party liability Class commercial insurance last year. motor vehicle insurance and more than This enabled it to offer its customers even 230,000 customers in its comprehensive more precise insurance protection and motor vehicle insurance. This is largely comprehensive services, including skilful the result of the innovative additional of- advisory for complex requirements. ferings, such as the family bonus in third- party liability and comprehensive insur- The nine components of contents insur- ance, which provides a more favourable ance, assistance, liability insurance, classification by up to three stages for building insurance, legal expenses insur- each additional vehicle within the family. ance, machine commercial insurance, electronics comprehensive insurance, Through the leasing company Wiener B transport insurance and freezer container Städtische – Donau Leasing, Wiener insurance cover all the insurance needs Städtische also offers its customers lease of businesses. In addition, Wiener financing models with many additional Städtische is the only insurance company benefits. As of 2011, customers can in- 46 in Austria to include claims management sure themselves with the new insurance free of charge. concept Leasing-Protect against a pay- ment default on their motor vehicle lease INNOVATIONS IN MOBILITY AND agreement. LEGAL PROTECTION The well-established travel insurance for Strong environment triple in the motor care-free travel offers protection against factbox vehicle business motor vehicle damage at home or abroad With the Climate Bonus and Environ- and can simply be taken out by means of Business Class ment Bonus, Wiener Städtische intro- a payment slip policy. In 2011, this insur- duced preferential premium policies for ance was expanded by a new leisure R “Classic” and “Premium” versions motor vehicles six years ago in order to package for sports, hunting and fishing. It complete and efficient basic protection support forward-looking technologies for also insures private property and is of or complete all-round protection can be the ­reduction of pollutants. By doing so, it ­interest primarily to those who would like freely chosen for each segment was the first Austrian insurance company to temporarily expand their coverage for a R Commercial third-party liability to promote the use of environmentally trip. insurance with flexible sum selection, friendly vehicles. Every other customer of choice of deductible payable and Wiener Städtische already benefits from Legal protection comprehensive clause package this attractive policy. The climate bonus Wiener Städtische’s legal protection in- R Numerous extras for special require- promotes conventionally powered ­vehicles surance is an ideal product for both em- ments as well as free apps and free if they have lower CO2 emissions. The envi- ployees and the self-employed. In addi- collection service ronment bonus, in turn, promotes ­vehicles tion, as of 2011 it offers many innovations: R Flexible solutions for business that run on natural gas, hybrid ­vehicles as premium-free and worldwide assistance interruptions with individual sums, well as other alternative drive concepts. abroad for criminal law protection, higher liability periods, pension solutions insured sums, legal protection in inheri- R Plus Risk package: flexible extra In 2011, the climate bonus was expanded tance and family law matters, stalking, protection for unidentified risks, flood by a second bonus level. Whereas the employment law matters as well as in the or earthquake, which can be taken out premium savings in the case of a CO2 event of mobbing and workplace sexual individually emission of up to 160 g/km in the motor harassment, general contract law protec- R Individual motor vehicle packages for vehicle liability insurance amount to 10%, tion and social insurance legal protection, each segment now 20% of the policy amount can be which also offers coverage for proceed- R Outside business packages: compre- saved in the case of an emission of up to ings at the highest courts. Particular ben- hensive protection for outdoor property, 120 g/km. efits to the customer are instant protec- e.g. umbrella bars, lamps, company tion, protection for the entire family, free signs, swimming pools or outdoor In addition, in 2011, Wiener Städtische choice of a lawyer as well as a premium furniture brought a new insurance package for discount of 15% if the customer decides electric bicycles onto the market. to take out a policy with a 10% deductible.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

MODERN – MOBILE – UP-TO-DATE an app for all smart phones or via SMS. Thus, storm alerts reach customers auto- CUTTING EDGE SERVICES matically and accurately directly over their mobile phone, wherever they are in The security of and service to its custom- Austria. Secured data quality in conjunc- ers, along with the intelligent use of the tion with cutting-edge technology now most recent technologies, are at the core guarantees safety and reasonable pre- of Wiener Städtische’s diverse innovative vention in the event of a storm. In addi- developments in the service sector. The tion, as of August 2011, the alert service company website, as the central plat- can be subscribed to not only for one but form, offers the best service and opti- three locations. Business customers can mised user friendliness: here, both pri- even select up to 30 operating sites. By vate and business customers can the end of 2011, more than 265,000 promptly find all the desired information alerts have been sent locally, regionally and can obtain information on all of and nationally. B ­Wiener Städtische’s insurance solutions – including online calculation and quote The app for all events generation. Naturally, online claim notifi- Wiener Städtische’s free Schaden­ 47 cation is also available. The well-struc- Service-App (loss service app) for tured service area offers information iPhones and Android mobile phones of- about all the key contact platforms, ser- fers via a loss form, check lists and first vice numbers and assistance services, aid measures as well as an emergency “We ensure and the website also offers valuable tips call, valuable tips and quick help in a case that our mobile on loss prevention. of emergency number – regardless of whether the loss is caused by a storm, services are Wiener Städtische’s ombudsman, whose fire, burglary or motor vehicle. Not least, office can be reached by phone, e-mail or this service offers all customers the op- as user-friendly through the website, provides feedback tion of an uncomplicated and time-saving as possible.” on customer satisfaction and is of course claim settlement. In addition, the current also available for personal customer con- status of the loss event will, upon request, Erich Leiß tact. Prompt service and a minimum wait- be communicated at any time via ing time for replying to complaints ensure SchadenSMS service. that customers receive a response re- garding further procedure within a few hours, including when contact is made via e-mail. The ombudsman’s office also receives a lot of positive customer feed- back and shows that the constant further development of the service contributes significantly to maximising customer ­satisfaction. With this in mind, all com- plaints submitted are deemed to be an opportunity to improve the customer rela- tionship and are, therefore, analysed in a very detailed manner, verified for feasibil- ity and communicated to all departments concerned.

Successful storm alert In May 2011, Wiener Städtische initiated an important measure to effectively pre- vent losses with its storm alert initiative. The new WetterService mobile weather alert system is available free of charge to both private and ­business customers as

Annual Report 2011 | Wiener Städtische AGAINST BUMPS AND SCRAPES TO THE SOUL. AND ELSEWHERE.

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48 “You drive better with all-around cover. And if something actually does ­happen, you are in the best of hands with us, because we ­cover all mobility risks with attractive modules with flexible components.”

What we can offer you A trio of excellent environmental products in the motor vehicle segment. Our environmental bonus benefits vehicles with alternative drive technologies (natural gas, hybrid, super ethanol or electric), and our two-level climate bonus benefits

vehicles with low CO2 emissions.

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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49

Annual Report 2011 | Wiener Städtische CAMPAIGNS WITH foresight

Clear advertising messages and, as ever, best impact values for the “Dear Neighbours” from the well-known TV campaign ­ensure a strong and successful presence in the media for ­Wiener Städtische. True to the motto: “We wish your problems

B were ours”, the Wiener Städtische brand appeared with ­messages for ­customised insurance solutions and skilful 50 ­advisory in a wide range of media. The advertising portfolio as of the end of 2011 has been supplemented with a highly ­acclaimed poster campaign.

New Poster Campaign ually tailored products and services. The fact that Wiener Städtische also demon- Showing foresight – be able to listen strates “foresight” is emphasised by its – talk in plain language solid and long-term commitment to busi- Hand in hand with numerous product in- ness policy, on the basis of which it will be novations, in 2011, Wiener Städtische able to reliably serve its clients in all life also focused on a new impetus in its ad- situations. vertising. With the new poster campaign launched throughout Austria in October TV Campaign 2011, it focuses on its skills and strengths as a partner and advisor. Three visuals in “Dear Neighbours” still a hit close-ups place emphasis on the follow- The best stories are true stories – with ing central themes “Showing Foresight”, this concept, Wiener Städtische not only “Be Able to Listen” and “Talk in Plain conquered viewers’ hearts, but also suc- ­Language”. With these, Wiener Städtische cessfully conveys, in addition to product memorably conveys the message that it messages, values, such as trust, reliabili- always provides its customers with the ty and proximity. With the TV campaign best possible advice and addresses their about the likeable neighbours, Wiener personal needs with customised, individ- Städtische also demonstrated foresight

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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Lisa, Peter and Sophie – The “Dear Neighbours” in the TV Campaign. 51 for its media appearance. The trailer that as Sophie, the daughter as Lisa and the presents three protagonists (single moth- neighbour as Peter. er with teenage daughter, new neighbour) was broadcast for the first time in Novem- Image and Print Campaigns ber 2009. The continuation of the cam- paign, which in 2010 had been selected From the poster campaign, the subject as a double-“impact winner”, proved to “Showing Foresight” has also been used be very successful in 2011 as well. In the since the autumn of 2011 as an adver- TV spot, the female protagonist guides tisement in various print media and has her neighbour into a parking space. Dis- been combined with the well-known slo- tracted by her daughter, she gives an er- gan “We wish your problems were ours”. roneous signal, as a result of which the In addition, the performers of “Dear neighbour causes damage. The episode Neighbours” appeared again on print humorously conveys to the viewer that the ­advertisements also in 2011, in line with customers of Wiener Städtische are cov- the respective TV spot and the associated “Our message ered against all mobility risks. ­Other spots products. As part of a uniform ­marketing focuses on our that were broadcast in 2011 addressed appearance, Wiener Städtische’s prod- the topic of pension provision in general uct folders will also be designed with strengths as (“Morning Hygiene”) and the personal the ­corresponding photographs from the advisory to premium pension (“The New campaign. a partner and One”). ­advisor.” The “Say only one Word” campaign was The Neighbours introduce themselves also continued in 2011. In this sequel, Ralph Müller In 2011, it was time to give names to the Wiener Städtische conveyed its message popular protagonists from the advertising by focusing on the essential point. Catch- spots – they have been around long words, such as “Security”, “Pension”, enough to develop a relationship with “Care”, “Trust”, and even loss events, each other as well as with the viewers. For such as, “Burst Pipe” or “Car Body Dam- that reason, Wiener Städtische initiated a age” conveyed strong values and clear name-finding campaign among its 3,500 messages about the products. employees, who were very enthusiastic about participating and submitted 1,180 suggestions and 787 different names. In the end, the competition came down to the most frequently submitted names. In the future, the mother can be addressed

Annual Report 2011 | Wiener Städtische EQUIPMENT CAN COME APART AT THE SEAMS. BUT OUR INSURANCE HOLDS.

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52 Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

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53 “Make your home a carefree zone. We have the right solution for all needs and types of losses – from garden sheds to multi- family properties. After all, the best way to handle losses is together.”

What we can offer you Comprehensive, custom-tailored protection for an all- round secure feeling in your home.

Annual Report 2011 | Wiener Städtische MANAGEMENT REPORT 2011

ECONOMIC CONDITIONS matically from growing risk aversion and a lack of confidence in its stability. Financial market development in 2011 Capital market development was influenced by a wide range Resolutions aimed at solving the "euro crisis" were adopted of political, economic and even environmental factors in the at many EU crisis summits, rescue funds were set up, and year just ended. new capital requirements were put into place for European banks. However, none of these measures were able to re- Dramatic political changes in North Africa and the Middle duce tension over the long term. All of these efforts were also East were the focus of attention at the beginning of 2011. A hindered by an economic slowdown that was gradually be- number of autocrats were forced to leave the stage and ginning to affect core European countries, too. The European make room for democratic movements. In one case, this was Central Bank then attempted to remedy the situation by brought about by a civil war, with the rebels receiving inter- reducing its key interest rate from 1.5% to 1% in the last two national support. This reshaping of the political landscape in months of the year. the Middle East and North Africa affected the international financial markets, mainly through the resulting fluctuations The end effect was very sobering on balance for the capital in the price of oil. markets. European equity markets were more strongly af- fected than, for example, the USA. The DAX ended the year C A natural disaster in Asia caused massive damage to the with a loss of 15.4%, and the EURO STOXX 50 closed with a Fukushima nuclear power plant in Japan, leading to a high loss of 14.5%. The market in Austria, where the ATX index level of market turbulence. In addition to the environmental recorded a loss of 34.9%, was one of the most strongly af- contamination caused by high levels of radiation, this was fected by these negative developments. 54 also a serious setback for Japanese industry, and a great deal more time is still needed to remedy the effects on the In contrast, the US S&P 500 index managed to end the year economy. unchanged.

The core European countries, in particular Germany and Economic situation in Austria Austria, provided a positive surprise in terms of economic The economy slowed considerably after recording a good performance in the first half of the year, while the peripheral first quarter in 2011. Only slow growth of 0.2% was recorded countries continued to battle with stagnation and even re- in each of the second and third quarters. The Austrian econ- cession. The data published in the USA were also rather omy nevertheless did grow strongly in 2011. The latest fore- disappointing. cast by the Austrian central bank (Österreichische National- bank – OeNB) predicts real GDP growth of 3.3% in 2011. The biggest test, however, was still to come for international The labour market also did surprisingly well in 2011. Inflation capital markets. rose, however, to 3.5% due to large increases in the price of energy, services and food. Excessive levels of sovereign debt became the dominant topic of discussion during the course of the summer. In addi- THE AUSTRIAN INSURANCE MARKET tion to Greece and Portugal, attention also turned to Italy and Spain. International rating agencies unleashed a wave of According to preliminary statistics from the Austrian Asso- credit downgrades for European countries and banks. Stan- ciation of Insurance Companies at the end of February 2012, dard & Poor’s even downgraded the AAA status held by the the Austrian insurance industry recorded a 1.7% reduction in USA. Risk premiums for southern European countries ex- total premiums in 2011 to EUR 16.464 billion (2010: +2.0%). ploded to record levels. Premium income from life insurance declined by 7.5% to EUR 6.989 billion (2010: +1.9%). Life insurance with regular At the same time, yields on German government bonds fell to premiums rose by 1.6% to EUR 5.612 billion (2010: +1.4%), all-time lows. The DAX and ATX indices, for example, lost while single-premium life insurance fell by 32.2% to EUR more than 30% of their value in a relatively short time during 1.376 billion (2010: +3.2%). This was primarily due to an this phase. The financial sector in particular suffered dra- increase raising the minimum lock-in period to 15 years.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Health insurance premiums grew by 3.6% to EUR 1.697 PREMIUMS 2011 BY SEGMENTS billion (2010: +3.0 %).

Premiums written for property and casualty insurance grew by 2.9% to EUR 7.778 billion (2010: +2.0%) thereby outper- forming 2010. Life 38.4% (43.5%)

Property/casulty BUSINESS DEVELOPMENT IN 2011 46.9% (43.0%) OVERALL BUSINESS DEVELOPMENT

Wiener Städtische is one of the leading insurance companies in the Austrian insurance market. It operates in the prop- Health 14.7% (13.5%) erty/casualty, life and health insurance segments. Wiener Figures for 2010 in brackets Städtische also has branch offices in Italy and Slovenia. These branch offices sell products in the non-motor vehicle and life insurance classes. The Slovenian branch office is Expenses for claims and insurance benefits located in Ljubljana and has 30 employees. Wiener Städ- Including the change in the mathematical reserve, gross tische has operated in Italy since 1999. The Rome branch expenses for claims and insurance benefits fell by 22.4% in C office has 16 employees. 2011 compared to the previous year, to EUR 1,748.43 mil- lion. This was primarily due to the volatility of the single- Wiener Städtische is a 99.9% subsidiary of VIENNA INSUR- premium business and price losses in unit- and index-linked 55 ANCE GROUP AG Wiener Versicherung Gruppe, whose A+ life insurance. rating was reconfirmed with a stable outlook by the interna- tionally recognised rating agency Standard & Poor's in 2011. Operating expenses Administrative expenses were EUR 421.50 million, repre- Premium income senting a decrease of 0.4% compared to the previous year. Wiener Städtische generated a premium volume of EUR Workflow efficiency was examined and improved during the 2,274.55 million in financial year 2011, representing a de- organisational changes made under corporate law in 2010, crease of 6.5% compared to 2010. The decrease is due to a including the Vienna Insurance Group Holding spin-off. For sharp decline in premium income from single-premium life example, joint use is made of back-office departments, such insurance policies. EUR 2,265.78 million of these total pre- as accounting. Group-wide systems are also being used in miums were generated from direct business and EUR 8.77 the IT area. million from indirect business. EUR 1,786.41 million of the gross premiums written was retained by Wiener Städtische, and EUR 488.14 million ceded to reinsurance companies.

Property/casualty insurance contributed EUR 1,066.18 million in premiums, representing 46.9% of total premium income, while life insurance contributed EUR 872.93 million, or 38.4%, and health insurance EUR 335.44 million, or 14.7%.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Key figures for Wiener Städtische Financial result Wiener Städtische's financial result increased to EUR in EUR million 2010 2011 388.87 million in 2011. This was mainly due to an increase in Gross premiums written 2,432.80 2,274.55 the extraordinary financial result, which in turn was due to Thereof property/casualty 1,046.52 1,066.18 the realisation of loan-related gains, and from realised secu- Thereof life 1,058.52 872.93 rities-related gains and losses. Thereof health 327.76 335.44 Gross premiums written, direct 2,419.86 2,265.78 Investments Thereof property/casualty 1,037.09 1,060.88 Thereof life 1,055.08 869.57 Investments were EUR 12,322.99 million as at 31 December Thereof health 327.69 335.33 2011, including EUR 2,215.94 million attributable to invest- Gross premiums written, indirect 12.94 8.77 ments for unit- and index-linked life insurance. Investments Thereof property/casualty 9.43 5.30 without including unit- and index-linked life insurance were Thereof life 3.44 3.36 EUR 10,107.05 million at the end of 2011. Thereof health 0.07 0.11 Financial result 388.39 388.87 Investments at the end of 2011 (not including investments Gross expenses for claims and insurance for unit- and index-linked life insurance) consisted of 64.58% benefits1 -2,252.97 -1,748.43 in securities, 18.19% in participations, 14.04% in loans, Result from unrealised gains and losses from C unit- and index-linked life insurance 174.83 -143.14 2.67% in real estate and 0.52% in other investments. Gross administrative expenses -423.40 -421.50 Result from ceded reinsurance -104.08 -74.92 STRUCTURE OF INVESTMENTS 31/12/2011* Other income/expenses (net) -28.01 -39.92 56 Result from ordinary activities 187.56 235.51 Thereof property/casualty 123.34 174.72 Others 0.52% Thereof life 40.63 30.50 Real estate 2.67% Thereof health 23.59 30.29 Investments2 12,510.59 12,322.99 Loans 14.04% Underwriting provisions3 Securities 64.58% 10,990.58 10,882.89 1) Incl. the change in the mathematical reserve. 2) Incl. unit-and index-linked life insurance. 3) Incl. unit- and index-linked life insurance and deposits from ceded reinsurance business. Ownership interests 18.19% Combined ratio far below 100% The combined ratio is a figure showing the ratio of adminis- * Balance of investments excluding unit-linked and index-linked life insurance was EUR 10,107.05 mn as at 31 December 2011 trative expenses and insurance payments to net earned premiums in the property/casualty area. Wiener Städtische's 2011 net combined ratio of 95% (after deducting reinsurers' shares) was once again significantly less than 100%.

Solvency in accordance with VAG Solvency is the equity capital available to an insurance com- pany, i.e. free and unencumbered assets. Insurance com- pany solvency is governed by § 73b(1) VAG (the Austrian Insurance Supervision Act), which is intended to ensure that policyholder claims are secure even in the case of unfavour- able developments. Wiener Städtische has equity capital of EUR 1,027.24 in the form of free and unencumbered assets. The solvency requirement is EUR 438.08. This means that Wiener Städtische has a cover ratio of 234.48%. The higher the level of capital available (solvency), the better these claims are covered.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Result from ordinary activities Direct premiums written by Wiener Städtische in the non- Wiener Städtische earned a result from ordinary activities of motor vehicle classes rose by 3.1% to EUR 741.70 million. In EUR 235.51 million in 2011, calculated according to the 2011, the motor vehicle classes recorded an increase of requirements of the Austrian Commercial Code (UGB). This 0.6% in direct premiums to EUR 319.18 million. The insur- corresponds to an increase of 25.6% over the value of the ance market is showing a slight recovery in this class, primar- previous year (EUR 187.56 million). This increase was mainly ily due to an increase of 8.4% in new registrations (+27,582) due to a reduction in expenses for claims and insurance compared to the previous year. In the non-motor vehicle benefits. classes (direct business), high growth rates were recorded in the storm damage (+7.0% to EUR 32.43 million), water pipes 74.2% of the result from ordinary activities came from the (+5.5% to EUR 73.01 million) and casualty insurance (+3.4% property/casualty segment, 12.9% from life insurance, and to EUR 96.05 million) areas. 12.9% from health insurance. Premium volume for storm damage insurance rose as a result of continuing demand for coverage against natural RESULTS FROM ORDINARY BUSINESS BY SEGMENTS 2011 catastrophes, which is in turn due to increased public awareness of the need for insurance coverage in this area. Life 12.9% (21.7%) The steady increase in public awareness about the risks of everyday life and the need to increase insurance protection C Health 12.9% (12.6%) beyond the coverage provided by social security is responsi- ble for the increase in new accident insurance policies. Property/casualty 57 74.2% (65.7%) Key figures – property/casualty insurance

in EUR million 2010 2011 Gross premiums written 1046.52 1,066.18 Financial result 90.42 130.51 Figures for 2010 in brackets Gross expenses for claims and insurance benefits -682.05 -708.77 Gross administrative expenses -236.32 -238.73 Research and development Result from ceded reinsurance -93.25 -65.20 Due to the nature of the business, research and development Other income/expenses (net) -1.98 -9.27 Result from ordinary activities plays a secondary role for Wiener Städtische. Development 123.34 174.72 work in the most general sense is done as part of product pricing during product development, for example in the area The claim ratio was 65% (total after reinsurance, not incl. of demographics or risk-related parameters, or in terms of claims processing expenses). preventive measures.

BUSINESS DEVELOPMENT IN DETAIL

Property and casualty insurance Wiener Städtische recorded a premium increase of 1.9% over the previous year to EUR 1,066.18 million in the prop- erty and casualty business (direct and indirect). This was mainly due to positive performance in the non-motor vehicle classes. Indirect property and accident premiums fell by 43.8% to EUR 5.3 million. This was due to Group-wide rein- surance programs using VIG RE in Prague. Direct premiums written, on the other hand, rose by 2.3% to EUR 1,060.88 million.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Expenses for claims and insurance benefits rose 3.9% in The result from ordinary activities was EUR 30.50 million for 2011 to EUR 708.77 million. Gross administrative expenses the life insurance business in 2011, representing a drop of were EUR 238.73 million in 2011 (+1.0%). 24.9% compared to 2010.

The result from ordinary activities for the property/casualty Health insurance area was EUR 174.72 million for the whole of 2011, repre- EUR 335.44 million in premiums were written in the health senting an increase of 41.7% over the previous year. insurance segment during the financial year just ended, corresponding to an increase of 2.3% over 2010. Life insurance Wiener Städtische recorded a decrease in life insurance Wiener Städtische also brought new products to market in premiums to EUR 872.93 million, representing a drop of 2011 that were primarily intended to make it easier for young 17.5% compared to 2010. This was primarily due to in- people to purchase private health insurance. Wiener Städ- creased volatility in the single-premium product area. tische also added new supplementary nursing care policies to its product range. Due to changes in the tax framework for life insurance, there was a massive fall in new single-premium business in 2011. Expenses for claims and insurance benefits (incl. the change The change that came into effect (raising the minimum lock- in the mathematical reserve) were EUR 275.92 million in in period to 15 year) as part of the amendments to the 2011. Gross administrative expenses were EUR 40.27 mil- C 2011 Austrian Budget Accompanying Act (Budgetbegleitge- lion in 2011. setz) imposes an 11% insurance tax on policies with terms shorter than 15 years. Direct premiums written in the life The result from ordinary activities reached EUR 30.29 mil- 58 insurance segment fell by 17.6% compared to the previous lion in the health insurance segment in 2011. year, with premiums from single-premium policies falling even further by 43% to EUR 233.07 million. Life insurance Key figures – health insurance policies with regular premiums decreased by 1.5% to EUR 636.50 million because of an increase in policy expirations. in EUR million 2010 2011 Gross premiums written 327.76 335.44 Key figures – life insurance Financial result 19.53 31.33 Gross expenses for claims and insurance benefits1 -263.04 -275.92 in EUR million 2010 2011 Gross administrative expenses -39.74 -40.27 Gross premiums written 1,058.52 872.93 Result from ceded reinsurance -9.11 -8.01 Financial result 278.44 227.03 Other income/expenses (net) -11.81 -12.28 Gross expenses for claims and insurance benefits1 -1,307.88 -763.74 Result from ordinary activities 23.59 30.29 Result from unrealised gains and 1 incl. the change in the mathematical reserve losses from unit- and index-linked life insurance 174.83 -143.14 Gross administrative expenses -147.34 -142.50 Result from ceded reinsurance -1.72 -1.71 Other income/expenses (net) -14.22 -18.37 Result from ordinary activities 40.63 30.50 1 incl. the change in the mathematical reserve

Gross expenses for claims and insurance benefits were EUR 763.74 million in 2011 (incl. change in the mathematical reserve). Gross administrative expenses were EUR 142.50 million in 2011 (-3.3%). This change was caused by the drop in single-premium business and price decreases in unit- and index-linked life insurance.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Employees RISK REPORT 2011 The number of Wiener Städtische employees fell by 35 com- pared to the previous year. At the end of 2011, Wiener Städ- The risk management system consists of all the guidelines, tische had a total of 3,462 employees, including 1,778 sales processes and reporting procedures used to continuously employees and 1,543 administrative employees. There were identify, measure, monitor, manage and report on relevant 141 trainees at the end of 2011. risks on an individual and aggregated basis while taking account of interdependencies. One of the main functions of Number of employees the Company-wide corporate risk management department is to establish, maintain and manage the risk management 2010 2011 system. Office employees 1,546 1,543 Field sales representatives (incl. The new Solvency II framework directive (2009/138/EG), trainees) 1,951 1,919 which also amends insurance company risk management, is TOTAL 3,497 3,462 to be implemented at the national level in the EU by 2013, although delays of a year are very likely. Like the Basel II Employee interests model for the banking sector, Solvency II is composed of Wiener Städtische's business performance is highly depend- three pillars. The first pillar deals with the quantitative re- ent on the use of qualified, satisfied employees. Professional, quirements of capital adequacy, while the second pillar deals motivated employees therefore represent a valuable re- with the qualitative requirements for company management, C source for Wiener Städtische. the risk management system and internal controls. The second pillar also covers supervisory principles and methods. Training, advanced training and equal treatment in the work- The third pillar deals with the new provisions for market 59 place are key elements of the Company's business philoso- discipline, transparency and disclosure requirements. phy. The Company places great importance on training and offers many development and career opportunities. The Company's own human resources development company, Horizont GmbH, is one of the ways the Company ensures continuous training of its employees. Targeted support is also provided for trainee development. Wiener Städtische will continue its efforts in this area in 2012 by offering 100 young people outstanding career opportunities.

Wiener Städtische is one of the most family and women- friendly companies in Austria. The company day-care centre is one example of how employees are actively supported in creating a balance between career and family. Wiener Städ- tische also provides a variety of fringe benefits to make con- ditions attractive for its women employees.

Events occurring after the balance sheet date No other events of special significance that would have changed the presentation of the net assets, financial position and results of operations occurred after the balance sheet date.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Due to the many complex requirements of the new Solvency Market risk II framework directive, implementation has already begun on Market risk is the risk of changes in the value of investments Level 2 and drafts for Level 3, when available, based on the due to unforeseen fluctuations in interest rate curves, share framework directive and provisional implementing measures. prices and exchange rates, and the risk of changes in the As a rule, there is no single valid method for implementing market value of real estate and participations. these future statutory principle-based requirements. Insur- ance companies have been asked to analyse the statutory Strategic risks requirements and provide a justification for their method of Strategic risks can arise due to changes in the economic implementation. environment, case law, or the regulatory environment.

These issues therefore require intensive efforts in advance in Operational risks order to implement the current abstract and theoretical risk These may result from deficiencies or errors in business management requirements of Solvency II in practice. Wiener processes, controls or projects caused by technology, em- Städtische performed a voluntary test run for the calculation ployees, organisation or external factors. of risk-based equity capital in 2011 in order to document and improve the calculation procedures. Current plans are to Liquidity risk use a partial internal model to calculate the risk capital Liquidity risk depends on how good the fit is between in- needed for the property/casualty class. The model is under vestment holdings and insurance obligations. C development and must receive supervisory approval under Solvency II. The actuarial department is performing ongoing Concentration risk tests of the potential internal model for property/casualty Concentration risk is a single direct or indirect position, or a 60 insurance whose theoretical foundations are being devel- group of related positions, that have the potential to signifi- oped by the Group. The Company-wide risk management cantly endanger the insurance company, core businesses or department and the actuarial department are developing a key performance measures. Concentration risk is caused by concept for application of the internal mode in consultation an individual position, a collection of positions with common with all relevant areas, such as operational departments, the holders, guarantors or managers, or by sector concentrations. Group and the FMA. In addition, Wiener Städtische is an active participant in the Group-wide project that is making RISK STRATEGY preparations for Solvency II. The Managing Board is responsible for risk management, The rating agency Standard & Poor’s continuously rates the and the internal control system developed from it, and de- VIG Group and, therefore, Wiener Städtische, which is the fines the risk strategy, risk policy, targets and measurement most important component of the Group. The Group has an bases. A+ rating with stable outlook. The objective of risk management is not complete avoidance All important risk measures are in the good to excellent of risk, but instead a conscious acceptance of desired risks range. or the implementation of measures to monitor and, if neces- sary, reduce existing risks based on economic factors. These THE INDIVIDUAL RISK CATEGORIES considerations are based on the assumption that higher returns can be achieved by accepting higher risk. Underwriting risks Underwriting risks are risks that the calculated premiums The risk-return ratio is therefore a key measure that should and reserves will be insufficient to provide the benefits that be optimised. are promised to policyholders in advance, but unknown. RISK ORGANISATION Credit risk This risk quantifies the potential loss due to a deterioration of In addition to the operational risk managers, an independent the situation of a counterparty against which claims exist. corporate risk management department has been estab-

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

lished in the Managing Board Secretariat, directly under the OUTLOOK Managing Board. ECONOMIC GROWTH FOR AUSTRIA IN 2012 The risk committee is headed by the Company-wide corpo- rate risk management department; it is part of the risk man- The Austrian economy grew strongly in 2011. The latest agement system and provides detailed reports for the Com- forecast by the Austrian Central Bank (Österreichische pany-wide risk report. The risk committee is an information Nationalbank – OeNB) predicts real GDP growth of 3.3% in platform used to identify relevant risks; it proposes risk man- 2011. Do to a significant deterioration in foreign trade and a agement measures to the Managing Board. major loss of confidence, growth will likely only be 0.7% in 2012. OUTLOOK 2012 Assuming that the international economy recovers and the 2012 will also be dominated by the Eurozone crisis. The loss of confidence resulting from the sovereign debt crisis international rating agencies Standard & Poor’s and Fitch eases, growth is expected to increase to 1.6% in 2013. The consider default by Greece to be very likely. The rating agen- economic outlook is therefore considerably poorer compared cies began downgrading the credit ratings of most European to the OeNB forecast of June 2011. The forecasts for 2012 countries in 2012. Austria was also affected, receiving a and 2013 were reduced by 1.6 and 0.9 percentage points, downgrade to AA+. The countries of Europe must now pro- respectively. C pose a solution for stabilising the EU financial system, and support and implement such a solution. Austria continues to be one of the countries with the lowest unemployment rates in the Eurozone. The unemployment The insurance industry expects the new solvency legislation rate was 4.2% in 2011 based on the Eurostat definition. As 61 to have unpleasant side effects, i.e. that it will be expensive growth prospects deteriorated, however, it rose from 4.1% in and increase capital costs. Wiener Städtische will continue to the second quarter of 2011 to 4.6% at the end of 2011, improve its Solvency II compliance in 2012 and optimise and followed by a small reduction. The unemployment rate is document its risk processes. Another test run of the risk- expected to remain at 4.5% in 2012 and 2013. based equity capital calculation and an Own Risk and Sol- vency Assessment (ORSA) are planned for the second half of the year.

Internal control system

The internal control system (ICS) is continuously revised and documented. Operational and financial statement-related risk classes are ranked according to risk magnitude, com- bined with their controls in a risk and control matrix, and reported to the Managing Board and Supervisory Board. This allows control processes to be efficiently optimised. This risk and control matrix is monitored continuously and registered, thereby enabling optimal risk hedging.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

THE AUSTRIAN INSURANCE MARKET IN 2012 WIENER STÄDTISCHE IN 2012

The insurance market will be dealing with the financial and Times of economic stress cause a particularly large increase banking crisis and the resulting real economic problems for in customer demands for security. This applies both to pres- some time to come. The outlook for the Austrian insurance ervation of assets and safeguarding the standard of living industry is, however, optimistic. that has been achieved.

According to the February 2012 forecasts by the Austrian Our focus in 2012 will be to inspire our customers and gain Association of Insurance Companies (VVO), the Austrian their confidence by further intensifying customer contact insurance market as a whole will grow by 1.3% in 2012. The and personal advice, thereby clearly orienting all our activi- decrease in premiums in 2011, provisionally estimated at ties around the customer. This also applies to the acquisition 7.5%, is due to above-average growth in single-premium life of new customers in the market, who we plan to win over with insurance in 2010 and the change of the minimum lock-in custom-tailored products and services. period to 15 years. Wiener Städtische worked intensively on product improve- According to initial conservative forecasts, a small reduction ments in 2011, and great efforts will also be made to be just of 0.5% is expected for life insurance premiums in 2012. as innovative in 2012. Product-specific optimisations will be C However, due to the demographic change which is increas- used to smooth the road to our customers. ing the number of older people in the population, demand is expected to rise in the area of retirement provisions. Life In addition to intensifying efforts to build customer relation- insurance is the ideal instrument for making provisions to ships, attention has also turned to the business opportunities 62 protect one's standard of living in old age. offered by advisory services in the retirement provision and property insurance business. In light of the trend toward Premium growth is expected to remain strong in the health increasingly better informed consumers, Wiener Städtische's insurance area, with an increase of 3.2% expected in 2012. top priority is to communicate transparently and credibly to The growing propensity to invest in private health insurance customers that their retirement provisions are in good hands in order to protect the standard of medical care in old age and taken seriously by Wiener Städtische, today and in the will have a positive effect on premium income. future.

Property/casualty premiums are forecast to grow by 2.5% in 2012. Premiums for motor vehicle liability insurance are expected to grow again slightly by 0.3% in 2012.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Proposed appropriation of profits

WIENER STÄDTISCHE Versicherung AG Vienna Insurance Group ended financial year 2011 with net retained profits of EUR 186,390,649.21.

We propose that the 2011 net retained profits be appropriated as follows:

A dividend of EUR 140,000,000.00 should be paid from the net retained profits, and the remaining balance of EUR 46,390,649.21 carried forward.

The Managing Board

C

Robert Lasshofer

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Christine Dornaus Judit Havasi

Ralph Müller Erich Leiß

Vienna, 9 March 2012

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

ANNUAL FINANCIAL STATEMENTS 2011

Wiener Städtische Versicherung ag Vienna Insurance Group

Separate financial statements prepared in accordance with the Austrian Corporate Code (UGB) and the Austrian Insurance Supervision Act (VAG)

ANNUAL FINANCIAL STATEMENTS

66 Balance sheet 72 Income statement

NOTES 2011

79 General disclosures on accounting policies 79 Accounting policies 86 Notes to the balance sheet 89 Notes to the income statement 93 Profit participation 101 Significant equity investments 102 Other disclosures

AUDITOR’S REPORT D

DECLARATION BY THE MANAGING BOARD 64 SUPERVISORY BOARD REPORT

Annual Report 2011 | Wiener Städtische Highlights & Management | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

wiener städtische versicherung ag Vienna Insurance Group

Separate financial statements prepared in accordance with the Austrian Corporate Code (UGB) and the Austrian Insurance Supervision Act (VAG) 31/12/2011 Reporting period 1/1/2011 – 31/12/2011 Balance sheet comparison date 31/12/2010 Income statement comparison date 1/1/2010 – 31/12/2010 Currency EUR

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BALANCE SHEET FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

Assets Property/casualty In EUR A. Intangible assets I. Expenses for acquisition of an insurance portfolio 700,000.00 II. Other intangible assets 15,099,291.04 TOTAL INTANGIBLE ASSETS 15,799,291.04 B. Investments I. Land and buildings 35,786,842.44 II. Investments in affiliated companies and participations 1. Shares in affiliated companies 536,270,367.69 2. Bonds and other securities of affiliated companies and loans to affiliated companies 562,961,393.59 3. Participations 28,124,969.65 thereof reorganisation surplus 0.00 4. Bonds and other securities of and loans to companies in which an ownership interest is held 1,937,147.91 1,129,293,878.84 III. Other investments 1. Shares and other non-fixed-income securities 188,498,402.45 2. Bonds and other fixed- income securities 277,273,337.44 3. Shares in joint investments 0.00 4. Mortgage receivables 21,004,946.72 5. Policy prepayments 0.00 6. Other loans 33,818,139.10 7. Bank balances 21,886,261.44 542,481,087.15 IV. Deposits on assumed reinsurance business 504,453.18 TOTAL INVESTMENTS 1,708,066,261.61 C. Investments of unit- and index-linked life insurance 0.00 D D. Receivables I. Receivables from direct insurance business 1. from policyholders 70,822,657.48 2. from insurance intermediaries 60,041,513.10 66 3. from insurance companies 15,188,135.78 146,052,306.36 II. Receivables from reinsurance business 77,481,582.47 III. Other receivables 141,729,321.34 TOTAL RECEIVABLES 365,263,210.17 E. Pro rata interest 15,165,188.59 F. Other assets I. Tangible assets (not incl. land and buildings) and inventories 18,357,568.48 II. Current bank balances and cash on hand 23,768,865.82 III. Futher other assets 87,318,806.06 TOTAL OTHER ASSETS 129,445,240.36 G. Prepaid expenses I. Deferred taxes 41,143,926.33 II. Other prepaid expenses 19,207,191.01 TOTAL PREPAID EXPENSES 60,351,117.34 H. Offsetting items between departments 125,756,400.58 Total assets 2,419,846,709.69

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Health Life Total business in 2011 2010 In EUR '000

0.00 0.00 700,000.00 2,100 0.00 62,035.42 15,161,326.46 14,972 0.00 62,035.42 15,861,326.46 17,072

87,310,865.70 146,681,710.39 269,779,418.53 273,844

11,523,077.80 1,017,587,903.30 1,565,381,348.79 1,484,257 58,038,973.19 303,709,810.80 924,710,177.58 821,440 9,518,113.96 234,948,770.55 272,591,854.16 276,068 0.00 8,957,022.00 8,957,022.00 8,957 16,747,611.29 95,827,776.24 18,031,667.36 1,574,278,152.01 36,716,426.56 2,799,399,807.09 37,306

118,732,148.74 2,354,494,254.52 2,661,724,805.71 2,836,199 528,773,538.87 2,872,756,299.55 3,678,803,175.86 3,770,160 0.00 32,107,191.79 32,107,191.79 40,787 37,655,563.49 293,639,722.11 352,300,232.32 371,803 0.00 16,981,069.88 16,981,069.88 18,026 4,801,924.17 204,869,238.68 243,489,301.95 221,998 14,194,992.40 704,158,167.67 13,008,362.19 5,787,856,138.72 49,089,616.03 7,034,495,393.54 116,409 0.00 2,872,414.95 3,376,868.13 18,306 887,296,809.61 7,511,688,416.07 10,107,051,487.29 10,286,603 0.00 2,215,940,978.19 2,215,940,978.19 2,223,989 D

3,569,213.70 25,941,831.59 100,333,702.77 111,795 0.00 418,400.52 60,459,913.62 70,620 1,341,623.22 4,910,836.92 1,247,456.98 27,607,689.09 17,777,215.98 178,570,832.37 33,745 67 5,243.10 221,749.22 77,708,574.79 76,192 1,518,148.74 12,450,192.73 155,697,662.81 149,930 6,434,228.76 40,279,631.04 411,977,069.97 442,282 12,570,941.37 88,426,542.68 116,162,672.64 117,628

0.00 362,529.05 18,720,097.53 19,648 29,715,630.45 21,426,863.56 74,911,359.83 85,047 4,127,500.00 16,186,896.02 107,633,202.08 110,298 33,843,130.45 37,976,288.63 201,264,659.44 214,993

2,582,828.22 9,915,596.24 53,642,350.79 74,193 0.00 5,137,529.11 24,344,720.12 50,740 2,582,828.22 15,053,125.35 77,987,070.91 124,933 248,189,800.17 –373,946,200.75 0.00 0 1,190,917,738.58 9,535,480,816.63 13,146,245,264.90 13,427,500

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

BALANCE SHEET FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

Liabilities and shareholders' equity Property/casualty In EUR A. Shareholders' equity I. Share capital 1. Par value 10,000,000.00 II. Capital reserves 1. Committed reserves 157,617,585.61 III. Retained earnings 1. Mondatory reserves 1,000,000.00 2. Free reserves 14,000,000.00 15,000,000.00 IV. Risk reserve as per § 73a VAG, taxed portion 15,301,745.25 V. Net retained profits 144,883,050.54 thereof brought forward 23,835,976.92 Thereof partial payment in accordance with § 54a AktG 0.00 TOTAL SHAREHOLDERS' EQUITY 342,802,381.40 B. Tax-exempt reserves I. Risk reserve as per § 73a VAG 19,406,564.75 II. Valuation reserve for impairment losses 326,215.30 TOTAL RESERVES 19,732,780.05 C. Subordinated liabilities II. Supplementary capital bond 70,000,000.00 TOTAL SUBORDINATED LIABILITIES 70,000,000.00 D. Underwriting provisions - retained I. Unearned premiums 1. Gross 109,563,524.86 D 2. Reinsurers' share –14,121,764.56 95,441,760.30 II. Mathmatical reserve 1. Gross 0.00 2. Reinsurers' share 0.00 0.00 68 III. Provision for outstanding claims 1. Gross 1,078,454,358.52 2. Reinsurers' share –348,071,810.14 730,382,548.38 IV. Provision for profit-unrelated premium refunds 1. Gross 23,065,501.79 2. Reinsurers' share –2,870,671.15 20,194,830.64 V. Provision for profit-related premium refunds and policyholder profit participation 1. Gross 196,912.47 2. Reinsurers' share 0.00 196,912.47 VI. Equalisation provision 141,715,554.00 VII. Other underwriting provisions 1. Gross 13,014,301.26 2. Reinsurers' share –1,489,821.03 11,524,480.23 TOTAL TECHNICAL PROVISIONS 999,456,086.02 E. Underwriting provisions of unit- and index-linked life insurance 0.00 Amount carried forward 1,431,991,247.47

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Health Life Total business in 2011 2010 In EUR '000

0.00 0.00 10,000,000.00 10,000

28,724,845.15 316,539,424.61 502,881,855.37 502,882

0.00 0.00 1,000,000.00 1,000 10,000,000.00 10,000,000.00 36,000,000.00 36,000,000.00 60,000,000.00 61,000,000.00 0 3,325,210.71 27,226,449.51 45,853,405.47 45,853 22,760,535.74 18,747,062.93 186,390,649.21 200,246 9,811,961.26 12,497,764.03 46,145,702.21 –84 0.00 0.00 0.00 –80,000 64,810,591.60 398,512,937.05 806,125,910.05 759,981

9,208,223.29 14,825,539.49 43,440,327.53 43,440 11,018,497.07 42,435,033.20 53,779,745.57 78,287 20,226,720.36 57,260,572.69 97,220,073.10 121,727

10,000,000.00 195,000,000.00 275,000,000.00 275,000 10,000,000.00 195,000,000.00 275,000,000.00 275,000

2,137,982.10 34,506,318.42 146,207,825.38 143,319 –213,798.21 1,924,183.89 –28,065.85 34,478,252.57 –14,363,628.62 131,844,196.76 –13,757 D

901,939,854.00 6,070,829,054.32 6,972,768,908.32 7,188,991 –91,631,644.50 810,308,209.50 –11,158,224.84 6,059,670,829.48 –102,789,869.34 6,869,979,038.98 –99,785 69 44,711,861.00 45,988,030.36 1,169,154,249.88 1,118,470 –4,470,405.12 40,241,455.88 –51,000.00 45,937,030.36 –352,593,215.26 816,561,034.62 –295,057

15,050,000.00 0.00 38,115,501.79 38,988 –1,505,000.00 13,545,000.00 0.00 0.00 –4,375,671.15 33,739,830.64 –5,770

0.00 48,533,800.00 48,730,712.47 51,858 0.00 0.00 0.00 48,533,800.00 0.00 48,730,712.47 0 0.00 0.00 141,715,554.00 154,223

523,563.65 1,064,536.87 14,602,401.78 14,903 0.00 523,563.65 0.00 1,064,536.87 –1,489,821.03 13,112,580.75 –1,482 866,542,412.92 6,189,684,449.28 8,055,682,948.22 8,294,901 0.00 2,164,866,606.61 2,164,866,606.61 2,141,430 961,579,724.88 9,005,324,565.63 11,398,895,537.98 11,593,039

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Liabilities and shareholders' equity Property/casualty In EUR Amount carried forward 1,431,991,247.47 F. Non-underwriting provisions I. Provision for post-employment benefits 5,981,152.00 II. Provision for pensions 37,331,155.00 III. Tax provisions 29,258,575.00 IV. Other provisions 72,706,816.62 TOTAL OTHER PROVISIONS 145,277,698.62 G. Deposits from ceded reinsurance business 82,092,138.08 H. Other liabilities I. Liabilities from direct insurance business 1. from policiyholders 84,710,313.63 2. from insurance intermediaries 16,088,194.73 3. from insurance companies 5,072,339.44 105,870,847.80 II. Liabilities from reinsurance business 18,702,198.27 III. Liabilities from bonds (not including supplementary capital) 0.00 IV. Liabilities to financial institutions 103,072.00 V. Other liabilities 634,111,354.75 TOTAL LIABILITIES 758,787,472.82 I. Prepaid expensese 1,698,152.70 Total assets 2,419,846,709.69

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Health Life Total business in 2011 2010 In EUR '000 961,579,724.88 9,005,324,565.63 11,398,895,537.98 11,593,039

2,376,389.00 6,357,791.92 14,715,332.92 14,912 14,832,148.00 37,402,808.00 89,566,111.00 89,654 0.00 230,900.00 29,489,475.00 29,489 1,694,777.00 7,664,046.72 82,065,640.34 81,814 18,903,314.00 51,655,546.64 215,836,559.26 215,869 93,448,381.68 11,186,290.69 186,726,810.45 138,402

3,106,533.43 22,745,180.42 110,562,027.48 193,744 0.00 5,305,316.11 21,393,510.84 21,852 254,949.26 3,361,482.69 0.00 28,050,496.53 5,327,288.70 137,282,827.02 7,261 7,999,194.33 1,539,569.23 28,240,961.83 32,270 0.00 150,000,000.00 150,000,000.00 150,000 0.00 4,665,206.77 4,768,278.77 38,510 105,545,501.77 200,787,902.87 940,444,759.39 945,165 116,906,178.79 385,043,175.40 1,260,736,827.01 1,388,802 80,139.23 82,271,238.27 84,049,530.20 91,388 1,190,917,738.58 9,535,480,816.63 13,146,245,264.90 13,427,500

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ANNUAL REPORT 2011 | WIENER STÄDTISCHE

INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2011

Property/casualty insurance 2011 2010 In EUR In EUR '000 Underwriting account 1. Net earned premiums Premiums written Gross 1,066,178,221.01 1,046,516 Ceded reinsurance premiums –443,857,598.94 622,320,622.07 –387,300 Change due to unearned premiums Gross –4,054,434.68 7,191 Reinsurers' share 5,391,201.65 1,336,766.97 –7,617 TOTAL PREMIUMS 623,657,389.04 658,790 2. Investment income from technical business 34,589.11 53 3. Other underwriting income 5,743,290.02 6,335 4. Expenses for claims and insurance benefits Payments for claims and insurance benefits Gross 659,793,816.21 698,493 Reinsurers' share –219,087,625.90 440,706,190.31 –226,266 Changes in provision for outstanding claims and insurance benefits Gross 48,982,183.38 –16,436 Reinsurers' share –62,401,957.15 –13,419,773.77 –3,607 TOTAL CLAIMS AND INSURANCE BENEFITS –427,286,416.54 –452,184 5. Increase in underwriting provisions Other underwriting provisions Gross 949,200.00 982 Reinsurers' share 0.00 949,200.00 –27 D TOTAL INCREASE IN UNDERWRITING PROVISIONS –949,200.00 –955 6. Expenses for profit-unrelated premium refunds Gross 7,735,403.71 13,166 Reinsurers' share –505,107.72 7,230,295.99 –4,458 72 TOTAL EXPENSES FOR PROFIT-UNRELATED PREMIUM REFUNDS –7,230,295.99 –8,708 7. Administrative expenses Acquisition expenses 191,644,052.46 191,487 Other administrative expenses 47,093,031.84 44,834 Reinsurance commissions and profit commissions from reinsurance cessions –87,951,861.57 –62,356 TOTAL OPERATING EXPENSES –150,785,222.73 –173,965 8. Other underwriting expenses –11,704,355.91 –7,078 9. Change in the equalisation provision 12,507,185.00 10,410 Underwriting result (Amount carried forward) 43,986,962.00 32,698

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Property/casualty insurance 2011 2010 In EUR In EUR '000 Underwriting result (amount carried forward) 43,986,962.00 32,698 Non-underwriting account 1. Investment and interest income Income from participations 44,791,162.54 26,893 Income from land and buildings 3,522,527.89 2,518 Income from other investments 76,704,260.49 61,886 Income from appreciations 264,174.68 0 Gains from disposal of investments 47,026,480.58 43,775 Other investment and interest income 2,476,254.35 3,880 TOTAL INVESTMENT INCOME 174,784,860.53 138,952 2. Expenses for investments and interest expenses Expenses for asset management 2,056,614.36 2,536 Depreciation of investments 2,994,107.07 2,879 Interest expenses 39,083,399.13 39,893 Losses from disposal of investments 46.39 30 Other investment expenses 140,404.57 3,189 TOTAL INVESTMENT EXPENSES –44,274,571.52 –48,527 3. Investment income transferred to the underwriting account –34,589.11 –53 4. Other non-underwriting income 315,912.20 568 5. Other non-underwriting expenses –61,289.73 –298 Result from ordinary activities; property/casualty insurance 174,717,284.37 123,340

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ANNUAL REPORT 2011 | WIENER STÄDTISCHE

INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2011

Health insurance 2011 2010 In EUR In EUR '000 Underwriting account 1. Net earned premiums Premiums written Gross 335,444,511.17 327,763 Ceded reinsurance premiums –40,902,634.98 294,541,876.19 –40,693 Change due to unearned premiums Gross 201,926.84 –310 Reinsurers' share 3,140.83 205,067.67 15 TOTAL PREMIUMS 294,746,943.86 286,775 2. Investment income from technical business 31,334,363.09 19,530 3. Other underwriting income 3,321.94 7 4. Expenses for claims and insurance benefits Payments for claims and insurance benefits Gross 214,126,922.28 212,094 Reinsurers' share –21,807,152.97 192,319,769.31 –20,846 Changes in provision for outstanding claims and insurance benefits Gross 379,255.00 –561 Reinsurers' share –60,805.52 318,449.48 58 TOTAL CLAIMS AND INSURANCE BENEFITS –192,638,218.79 –190,745 5. Increase in underwriting provisions Mathematical reserve Gross 61,413,703.00 51,509 Reinsurers' share –6,217,072.40 55,196,630.60 –5,293 D TOTAL INCREASE IN UNDERWRITING PROVISIONS –55,196,630.60 –46,216 6. Expenses for profit-unrelated premium refunds Gross 12,402,279.29 11,472 Reinsurers' share –1,238,141.81 11,164,137.48 –1,127 74 TOTAL EXPENSES FOR PROFIT-UNRELATED PREMIUM REFUNDS –11,164,137.48 –10,345 7. Administrative expenses Acquisition expenses 26,474,511.05 26,051 Other administrative expenses 13,793,809.98 13,689 Reinsurance commissions and profit shares From reinsurance cessions –4,562,588.13 –4,402 TOTAL OPERATING EXPENSES –35,705,732.90 –35,338 8. Other underwriting expenses –1,107,645.53 –82 Underwriting result (Amount carried forward) 30,272,263.59 23,586

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Health insurance 2011 2010 In EUR In EUR '000 Underwriting result (amount carried forward) 30,272,263.59 23,586 Non-underwriting account: 1. Investment and interest income Income from participations 29,080.00 293 Income from land and buildings 2,173,393.62 2,327 Income from other investments 37,740,920.79 33,675 Gains from disposal of investments 3,824,194.16 3,716 Other investment and interest income 3,131,271.61 1,296 TOTAL INVESTMENT INCOME 46,898,860.18 41,307 2. Expenses for investments and interest expenses Expenses for asset management 4,029,377.26 4,897 Depreciation of investments 2,814,330.16 8,588 Interest expenses 7,708,503.55 7,589 Losses from disposal of investments 0.00 0 Other investment expenses 1,012,286.12 703 TOTAL INVESTMENT EXPENSES –15,564,497.09 –21,777 3. Investment income transferred to the underwriting account –31,334,363.09 –19,530 4. Other non-underwriting income 21,366.73 0 Result from ordinary activities; health insurance 30,293,630.32 23,586

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ANNUAL REPORT 2011 | WIENER STÄDTISCHE

INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2011

Life insurance 2011 2010 In EUR In EUR '000 Underwriting account 1. Net earned premiums Premiums written Gross 872,928,368.13 1,058,516 Ceded reinsurance premiums –3,381,992.54 869,546,375.59 –3,313 Change due to unearned premiums Gross 2,232,338.10 1,169 Reinsurers' share –19,652.54 2,212,685.56 –1 TOTAL PREMIUMS 871,759,061.15 1,056,371 2. Investment income from technical business 227,025,688.24 278,442 3. Unrealised gains on investments shown under balance sheet asset item C 51,338,871.86 186,808 4. Other underwriting income 563,808.41 558 5. Expenses for claims and insurance benefits Payments for claims and insurance benefits Gross 1,023,787,323.25 738,969 Reinsurers' share –3,981,436.21 1,019,805,887.04 –1,236 Changes in provision for outstanding claims and insurance benefits Gross 1,528,457.29 4,086 Reinsurers' share 90,000.00 1,618,457.29 40 TOTAL CLAIMS AND INSURANCE BENEFITS –1,021,424,344.33 –741,859 6. Increase in underwriting provisions Mathematical reserve Gross 0.00 564,824 D Reinsurers' share 0.00 0.00 –417 TOTAL INCREASE IN UNDERWRITING PROVISIONS 0.00 –564,407

7. Increase in underwriting provisions Mathematical reserve 76 Gross –261,579,318.80 0 Reinsurers' share 2,320,139.33 –259,259,179.47 0 TOTAL REDUCTION UNDERWRITING PROVISIONS 259,259,179.47 0 8. Expenses for profit-unrelated premium refunds and policyholder profit participation Gross 18,350,276.57 15,700 Reinsurers' share 0.00 18,350,276.57 0 TOTAL PROFIT PARTICIPATION –18,350,276.57 –15,700 9. Administrative expenses Acquisition expenses 110,038,196.94 112,083 Other administrative expenses 32,459,066.67 35,259 Reinsurance commissions and profit commissions from reinsurance cessions –527,714.89 –533 TOTAL OPERATING EXPENSES –141,969,548.72 –146,809 10. Unrealised losses on investments shown under balance sheet asset item C –194,480,849.63 –11,979 11. Other underwriting expenses –3,280,952.40 –802 Underwriting result (Amount carried forward) 30,440,637.48 40,623

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Life insurance 2011 2010 In EUR In EUR '000 Underwriting result (amount carried forward) 30,440,637.48 40,623 Non-underwriting account: 1. Investment and interest income Income from participations 18,398,110.45 10,764 Income from land and buildings 8,145,927.01 9,260 Income from other investments 257,013,599.19 289,381 Income from appreciations 428,686.78 29,005 Gains from disposal of investments 27,153,477.51 14,521 Other investment and interest income 34,938,352.66 27,166 TOTAL INVESTMENT INCOME 346,078,153.60 380,097 2. Expenses for investments and interest expenses Expenses for asset management 15,672,589.30 18,532 Depreciation of investments 60,081,364.01 67,908 Interest expenses 27,349,810.68 9,915 Losses from disposal of investments 7,435,678.20 1,852 Other investment expenses 8,513,023.17 3,448 TOTAL INVESTMENT EXPENSES –119,052,465.36 –101,655 3. Investment income transferred to the underwriting account –227,025,688.24 –278,442 4. Other non-underwriting income 57,814.22 8 Result from ordinary activities; life insurance 30,498,451.70 40,631

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ANNUAL REPORT 2011 | WIENER STÄDTISCHE

INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER 2011

Property/Casualty + Health + Life = Total Business 2011 2010 In EUR In EUR '000 Underwriting result, property/casualty 43,986,962.00 32,698 Underwriting result, health 30,272,263.59 23,586 Underwriting result, life 30,440,637.48 40,623 TOTAL UNDERWRITING RESULT 104,699,863.07 96,907

Non-underwriting account: 1. Investment and interest income Income from participations 63,218,352.99 37,951 Income from land and buildings 13,841,848.52 14,105 Income from other investments 371,458,780.47 384,942 Income from appreciations 692,861.46 29,005 Gains from disposal of investments 78,004,152.25 62,011 Other investment and interest income 40,545,878.62 32,342 TOTAL INVESTMENT INCOME 567,761,874.31 560,356 2. Expenses for investments and interest expenses Expenses for asset management 21,758,580.92 25,965 Depreciation of investments 65,889,801.24 79,375 Interest expenses 74,141,713.36 57,397 Losses from disposal of investments 7,435,724.59 1,882 Other investment expenses 9,665,713.86 7,340 TOTAL INVESTMENT EXPENSES –178,891,533.97 –171,959 3. Investment income transferred to the underwriting account –258,394,640.44 –298,025 D 4. Other non-underwriting income 395,093.15 576 5. Other non-underwriting expenses –61,289.73 –298 6. Result from ordinary activities 235,509,366.39 187,557 7. Taxes on income –59,771,332.01 –51,954 78 8. Profit for the period 175,738,034.38 135,603 9. Release of reserves Release of valuation reserve for impairment losses 24,506,912.62 30,727 TOTAL RELEASE OF RESERVES 24,506,912.62 145,727 10. Transfer to reserves Transfer to risk reserve as per § 73a VAG 0.00 1,000 Transfer to free reserves 60,000,000.00 0 TOTAL TRANSFER TO RESERVES –60,000,000.00 –1,000 11. Profit for the year 140,244,947.00 280,330 12. Partial payment in accordance with § 54a AktG 0.00 –80,000 13. Retained profits brought forward 46,145,702.21 –84 Net retained profits 186,390,649.21 200,246

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

NOTES TO THE ANNUAL FINANCIAL STATEMENTS A2A DEFENSIV T OF 2011 ABER GLOBAL II EURO GOVERNMENT BOND A2 T ABERDEEN GL EMERG MKT SM I2 USD I. GENERAL DISCLOSURES ON ACCOUNTING POLICIES ABERDEEN GLOBAL EMERGING MARKETS EQUITY A2 T ABERDEEN GLOBAL WORLD RESOURCES S2 T The accounting provisions of the Austrian Commercial Code ACATIS AKTIEN GLOBAL FONDS T (UGB) and special provisions of the Austrian Insurance Su- ACTIVEST TOTAL RETURN D pervision Act (VAG) as amended were applied when prepar- ALL ASIA MITEIGENTUMSANTEILE GEM § 20 INFG T ing the annual financial statements as of 31 December 2011. ALL EUROPE THESAURIERUNGS ANTEILE ALL JAPAN T MITEIGENTUMSANTEILE The annual financial statements were prepared in accor- ALL TRENDS T dance with Austrian generally accepted accounting princi- ALL WORLD T MITEIGENTUMSANTEILE ples and the general standard of presenting a fair and true ALLIANZ PIMCO EUROPAZINS A view of the net assets, financial position and results of opera- ALLIANZ PIMCO INTERNATIONAL RENTENFONDS tions. ALLIANZ RCM BIOTECHNOLOGIE A ALLIANZ RCM VERMOEGENSBILDUNG DEUTSCHLAND A The precautionary principle was satisfied in that only profits AMUNDI FUND EQUITY LATIN AMERICA AU C T USD that had been realised as at the balance sheet date were ARERO DER WELTFONDS T reported and all identifiable risks and impending losses were AUSTRIA STOCK T recorded in the balance sheet, with the exception of the less AXA WF FRAMLINGTON SWITZERLAND A CAP T CHF strict valuation of bonds and other fixed-income securities as AXA WORLD EURO 5 7 CAP provided for in § 81h(1) VAG and use of the valuation relief BANTLEON OPPORTUNITIES L PT options provided for in § 81h(2) VAG for units of institutional BARING EASTERN EUROPE FUND funds. Figures are generally shown in thousands of euros BARING EUROPE SELECT INC GBP (EUR ‘000). Figures from the previous year are indicated as BARING GERMAN GROWTH TRUST T GBP such or shown in brackets. BARING GLB EMG MKTS FD USD INC D BARING HONG KONG CHINA FD A II. ACCOUNTING POLICIES BAWAG PSK GLOBAL BOND FOND BAWAG PSK MUENDEL RENT KRZ A Land is valued at cost, buildings at cost less depreciation BAWAG PSK MUENDEL RENT KRZ T 79 and any write-downs. As a rule, repair costs for residential BELLEVUE LUX BB MEDTECH BEUR buildings are spread over ten years. BERENBERG EMER MKT EQY SEL R BGF EMERGING EUROPE FUND A2 Investments for unit- and index-linked life insurance are BGF EUROPEAN FUND A2 valued using the current cost principle. Unit-linked life insur- BGF GBL HI YIELD BD HED A2 ance investments are made in the following funds: BGF NEW ENERGY FUND USD A2 BL BOND DOLLAR T BL BOND EURO T BLACKROCK GLOBAL FUND JAPAN S&M CAP OPPORTU- NITIES A2 USD BLACKROCK GLOBAL FUNDS WORLD GOLD FUND BLACKROCK GLOBAL FUNDS EMERGING MARKETS FUND A2 USD BLACKROCK GLOBAL FUNDS EURO BOND FUND A2 EUR BLACKROCK GLOBAL FUNDS EUROPEAN OPPORTUNITY FUND A BLACKROCK GLOBAL FUNDS GLOBAL ALLOCATION FUND HEDGED A2 EUR

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

BLACKROCK GLOBAL FUNDS LATIN AMERICAN DEXIA EQUITIES B EUROPEAN PROPERTY C T FUND T USD DEXIA QUANT EQUITIES EUROPE C T BLACKROCK GLOBAL FUNDS NEW ENERGY FUND T DEXIA QUANT EQUITIES USA C T BLACKROCK GLOBAL FUNDS US FLEXIBLE EQUITY DEXIA SUSTAINABLE MEDIUM C CAP T FUND A2 USD DIT GLOBAL MARKETS BOND UNITS BLACKROCK GLOBAL FUNDS WORLD ENERGY DJE ABSOLUT P FUND T USD DJE INTERCASH P BLACKROCK GLOBAL FUNDS WORLD GOLD FUND DJE RENTEN GLOBAL P BLACKROCK GLOBAL FUNDS WORLD MINING DKLT EM BD UNITS CF DISTRIBUTION FUND A2 EUR DWS AKKUMULA T BLUEBAY HIGH YIELD BOND B DWS AKTIEN STRAT DEUTSCHLAND BNPP L1 BOND WORLD EMERGING LOCAL C USD DWS BIOTECH TYP 0 BNPP L1 EQUITY USA GROWTH C T DWS DEUTSCHLAND BNPP L1 EQ EU ENRGY CD DWS ENERGY TYP O BNPP L1 EQUITY EUROPE CC DWS FLEX PENS 2014 T BW RENTA INTERNATIONAL UNIVERSAL FONDS DWS FLEXPENSION 2015 T CAPITAL INVEST GOLD STOCK A DWS FLEXPENSION 2016 T CAPITAL INVEST SWISS STCK A DWS FLEXPENSION 2017 T CARMIGNAC INVESTISSEMENT DWS FLEXPENSION 2018 T CARMIGNAC PATRIM.A 3D DWS FLEXPENSION 2019 T CB GELDMARKT DEUTSCHLAND I A DWS FLEXPENSION 2020 T CI GLOBAL MIX 50 DWS FLEXPENSION 2021 T COMGEST GROWTH INDIA USD DWS FLEXPENSION 2022 T COMINVEST FONDAK P DWS FLEXPENSION 2023 T COMINVEST FONDIS A DWS FLEXPENSION II 2019 T D COMSTAGE ETF DOW JONES EURO STOXX 50 TR DWS FLEXPENSION II 2020 T CPB ZZ 2 FUND DWS FLEXPENSION II 2021 T CPB ZZ1 FUND DWS FLEXPENSION II 2023 T C-QUADRAT ACTIVE BALANCED T DWS FLEXPENSION II 2024 T 80 C-QUADRAT ACTIVE GLOBAL EQUITY T DWS FLEXPENSION II 2025 T C-QUADRAT ARTS BEST MOMENTUM T DWS FLEXPENSION II 2026 T C-QUADRAT ARTS TOTAL RETURN BALANCED T DWS HEALTH CARE TYP O C-QUADRAT ARTS TOTAL RETURN GLOBAL - AMI DWS INTER RENTA C-QUADRAT ARTS TOTAL RETURN SPECIAL T DWS INVEST CHINESE EQUITY LC EUR C-QUADRAT BEST FONDS BASIC T DWS INVEST EUROPEAN EQUITIES T CREDIT SUISSE BF LUX CHF B T DWS INVEST GLOBAL AGRIBUSINESS LC CREDIT SUISSE BF LUX SHORT TERM CHF B T DWS INVEST TOP 50 ASIA LC CREDIT SUISSE EF (LUX) USA VALUE B DWS INVEST TOP 50 ASIA T CRYSTAL ROOF RUBIN T DWS OSTEUROPA FCP UNITS CAPITALISATION T CRYSTAL ROOF SAFIR T DWS SHIFT 2015 EUR T CRYSTAL ROOF SMARAGD T DWS SHIFT 2016 EUR T CS EF LUX GLB VALUE R CHF DWS SHIFT 2017 EUR T CS EUROREAL A DWS TELEMEDIA TYP O DBXT DBLCI DWS TOP 50 ASIEN T DBX TRACKERS DJ EU STX 50 1D DWS TOP 50 WELT DEEP BONUS 30 ZERT.EUROSTOXX 50 DWS TOP DIVIDENDE ANTEILE DEGI EUROPA DWS VERMOEGENSBILDUNGSFOND I A DEKARENT INTERNATIONAL CF E+S ERFOLGS INVEST T DEXIA BOND EURO INFLATION LINKED C T ECOFIN INDEX AKTIEN GLOBAL T

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

ESPA BEST OF AMERICA T FORTIS L FUND EQ ENRGY WD CC ESPA BEST OF EUROPE T FRANK TE IN FR GL SMC G AACC ESPA BEST OF HEALTHCARE T FRANKLIN INDIA FUND T EUR ESPA BEST OF WORLD T FRANKLIN TEMPLETON BRIC FUND ESPA BOND DANUBIA T GARTMORE CONTINENTAL EUROPEAN SHS A1 ESPA BOND DOLLAR A GLOBAL ADVANTAGE EMERGING MARKETS HIGH VALUE T ESPA BOND DOLLAR CORP T GLOBAL HEALTH CARE ESPA BOND EMERGING MARKETS GOLDEN ROOF BRANCHEN T ESPA CASH EURO MIDTERM A GOLDEN ROOF WELT R T ESPA CASH EURO PLUS T GOLDMAN SACHS EUROP COR E BA ESPA PORTFOLIO BALANCED 50 T GUTMANN VORSORGEFONDS A ESPA PORTFOLIO BALANCED 30 T HENDERSON GLOBAL TECHNOLOGY A2 USD ESPA PORTFOLIO BOND T HSBC GIF CHINESE EQUITY AD USD ESPA SELECT BOND T HSBC GLOBAL INDIAN EQUITY USD ESPA STOCK ASIA INFRASTRUCTURE T INDUSTRIA A EUR ESPA STOCK ISTANBUL T INVESCO ASIA INFRASTRUCT A USD ESPA STOCK NEW CONSUMER T INVESCO EMERGING MARKETS BOND A ESPA STOCK PHARMA T INVESCO GLB HEALTH CARE A USD ESPA STOCK VIENNA A INVESCO GLOBAL TECHNOLOGY A USD ETF DACHFONDS P INVESCO JAPANESE EQUITY A ETHNA AKTIV E T INVESCO JAPANESE SMALL/MID CAP EQUITY A ETHNA AKTIV E UNITS INVESCO JAPANESE VL EQUITY T JPY ETHNA GLOBAL DEFENSIV A INVESCO PACIFIC EQUITY A USD FAIR INVEST BALANCED T INVESCO PAN EUR STRUC EQTY A FI ALPHA RENTEN GLOBAL INVESCO PAN EUROPEAN EQUTIY T FIDELITY EURO BOND FUND A INVESCO PAN EUROPEAN SMALL CAP EQUITY T D FIDELITY EUROPEAN FUND T EUR INVESCO UMWELT UND NACHHALTI FIDELITY EUROPEAN GROWTH FUND A ISHARES ATX DE FIDELITY FDS SOUTH E ASIA A ISHARES DAX DE FIDELITY FDS SOUTH E ASIA A USD ISHARES DJ EURO STOXX 50 DE 81 FIDELITY FNDS GL CONS IND A ISHARES DJ EURO STOXX SD 30 FIDELITY FNDS GL TECH FD A ISHARES EB.REXX JUMBO PFANDBRIEFE FIDELITY FNDS GLO FIN SVC A ISHARES EUROSTOXX SEL DVD 30 FIDELITY FNDS GL HEALTH C A EUR ISHARES MSCI EMERGING MARKET FIDELITY FNDS STERLING BD A GBP ISHARES MSCI WORLD FIDELITY FUND CHINA FC A USD ISHARES MSCI WORLD ACC FIDELITY FUNDD II AUD CURRENCY FUND ISHARES S+P LISTED PRIVATE EQUITY USD FIDELITY FUNDS INTERNATIONAL USD FUND JB EUROPE GRWTH STOCK B EUR FIDELITY FUNDS LATIN AMERICA FUND USD JB GBP STERLING CASH FUND B FIDELITY FUNDS MALAYSIA FUND A USD JP MORGAN FLEMING EUROPE SMALL CAP FUND FIDELITY FUNDS PACIFIC FUND USD JPM AMERICA EQUITY A USD FIDELITY FUNDS WORLD FUND JPM EMERGING MARKETS DEBT A DIS EUR HGD FIDELITY GLOBAL PROPERTY FUND A EUR JPM EMERGING MARKETS EQUITY A USD FIDELITY JAPAN FUND A JPY JPM GLOBAL TOTAL RETURN T EUR FIDELITY JAPAN SMALLER COMPANIES FUND A JPY JPM INDIA FUND A USD FIDELITY MODERATE FPS EUR FUND JPM LATIN AMERICA A USD FIDELITY PS GLOBAL GROWTH FUND A USD JPM MORGAN US SMALL CAP GROWTH A DIS USD FIDELITY PS GROWTH FUND A JPM PACIFIC EQUITY A DIST USD FIDELITY SOUTH EAST ASIA T USD JPM US TECHNOLOGY A USD

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

JPMORGAN EUROPE STRATEGIC VALUE A PICTET WATER I JPMORGAN F EAST EURO E A PICTET WATER PDY JULIUS BAER MULTISTOCK BLACK SEA FUND A PICTET EMERGING DEBT HP KBC ECO FUND WATER C PIONEER AUSTRIA CORP TR IN A KBC EQUITY FD FOOD & BEVERAGES C PIONEER CENTRAL EUROPE BD A KBC RENTA NOKRENTA B CAP NOK PIONEER EM. M. KBC RENTA NZD RENTA CAP PIONEER EURO AGGREGATE BOND KEPLER ETHIK AKTIENFONDS A PIONEER EURO BOND MEDIUM LLOYDS TSB MF NEW ZEALAND NZD PIONEER FDS GLBL ECOLG A AC LO FUNDS WORLD GOLD EXPERTISE USD P PIONEER FDS GLOBAL SEL A A LO FUNDS WORLD GLD EUR PA PIONEER FUNDS CORE EU EQ A LYXOR ETF DJ BUYWRITE PARTS DE CAPITALISATION/DI PIONEER FUNDS US DOL S T A USD LYXOR ETF EURO 5 7Y PIONEER FUNDS EURO AG BO A=A LYXOR ETF EURO MTS PIONEER EM EUR & MED A EUR LYXOR ETF EUROMTS CBA PSM GROWTH UI LYXOR ETF WORLD WATER PSM VALUE STRATEGY UI LYXOR EURO MTS 3 5Y QUALITY USA EQUITY FUND B USD M&G 1 GLOBAL BASIC ACCUMALTED SHARES CLASS A RAIFFEISEN EURO RENT T M&G ASIAN FUND A ACC RAIFFEISEN OESTERREICH AK A M&G GLBL GROWTH EUR A ACC RAIFFEISEN EURASIEN AKTIEN A MAGNA TURKEY FUND A RAIFFEISEN OSTEUROP AKTIEN A MARKET ACCESS JIM ROGERS INT COMMODITY INDEX REAL INVEST AUSTRIA A MLIIF WORLD MINING SHARES A2 CAPITALISATION USD RINGTURM PIF DYNAMISCH VT MMT GLOBAL SELECTION B A RINGTURM PIF TRADITIONELL VT MORGAN STANLEY EMERGING MARKETS DEBT T USD ROBECO INT. ASSET MANAGM. BV D MORGAN STANLEY EMERGING MARKETS EQUITY T USD RT ABSOLUTE RETURN BOND FUND T MULTI INVEST OP RT ACTIVE GLOBAL TREND T NORDASIA FUND T RT EURO CASH PLUS T OEKOWORLD OEKOVISION CLASSIC RT OESTERREICH AKTIENFONDS T 82 OP FOOD ANTEILE A RT OSTEUROPA AKTIENFONDS T PEH STRATEGIE FLEXIBEL RT VIF VERSICHERUNG INTERNATIONAL T PIA AMERICA STOCK FONDS T USD RT VORSORGE § 14 RENTENFONDS A PIA DOLLAR BOND FONDS T RT VORSORGE RENTENFONDS T PIA DOLLAR SHORT TERM BOND A RT ZUKUNFTVORSORGE AKTIENFONDS T PIA EURO BOND A SCHOELLERB GLOBAL PENSION FONDS PIA EURO CORPORATE BOND T SCHOELLERBANK TOP BAL M T PIA MASTER FONDS DYNAMISCH A ANTEILE SCHOELLERBANK AKTIENFONDS A PIA MASTER FONDS DYNAMISCH T SCHOELLERBANK AKTIENFONDS T PIA MASTER FONDS PROGRESSIV T SCHOELLERBANK AKTIENFONDS WÄHR.T PIA MASTER FONDS TRADITIONELL T SCHOELLERBANK AKTIENFONDS WÄHRUNGSGESICHERT PIA MÜNDEL BOND A MITEIGENTUMSANTEILE SCHOELLERBANK ANLEIHEFONDS A PIA SELECT EUROPE STOCK A MITEIGENTUMSANTEILE SCHOELLERBANK ANLEIHEFONDS T PIA SELECT EUROPE STOCK T SCHOELLERBANK ANLEIHENFNDS 14 A PIA TRADERENT T SCHOELLERBANK ANLEIHENFONNDS 14 T PICTET FUNDS FCP BIOTECH ANT. P SCHOELLERBANK EURO ALTERNATIV PICTET ASIAN LOCAL CURRENCY PDY GBP SCHOELLERBANK EURO ALTERNATIV T PICTET FUNDS (LUX) SICAV SECURITY SCHOELLERBANK GLOB RESORCS A PICTET FUNDS (LUX) SICAV WATER SCHOELLERBANK GLOB RESORCS T PICTET GLOBAL EMERG DEBT P USD SCHOELLERBANK GLOBAL DYNAMIK T

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

SCHOELLERBANK KURZINVEST A TRADITIONAL FUND TR GLOBAL BD GBP DG SCHOELLERBANK KURZINVEST T UBS (LUX) STRATEGY FUND FCP BALANCED T SCHOELLERBANK KURZINVST T UBS LUX BOND FUND GBP P ACC SCHOELLERBANK LIQUID A UBS LUX BOND FUND USD P ACC T SCHOELLERBANK LIQUID T UBS LUX BOND FUND CHF P ACC T CHF SCHOELLERBANK NETTO RENT UBS LUX MD TRM BND EUR P ACC SCHOELLERBANK NETTORENT T UNIASIA T SCHOELLERBANK PIF T UNIDEUTSCHLAND SCHOELLERBANK REALZINS PLUS A UNIDYNAMICFONDS EUROPA A SCHOELLERBANK REALZINS PLUS T UNIFONDS SCHOELLERBANK USD KURZINVEST T UNIGLOBAL SCHOELLERBANK USD KURZINVEST ANTEILE A UNIJAPAN SCHOELLERBANK USD KURZINVST A UNTERNEHMENSANLEIHENFONDS 2014 GEM SCHOELLERBANK USD RENTENFONDS A §20 INVFG A SCHOELLERBANK USD RENTENFONDS A EUR UNTERNEHMENSANLEIHENFONDS 2014 GEM SCHOELLERBANK USD RENTENFONDS T §20 INVFG T SCHOELLERBANK VORSORGEFONDS VONTOBEL EMERGING MARKETS EQUITY B T USD SCHOELLERBANK VORSORGEFONDS T MITEIGENTUMS- VONTOBEL USD BOND T ANTEILE VONTOBEL EURO BOND A SCHOELLERBANK ZINSSTRUKTUR PLUS MITEIGEN- VONTOBEL SWISS MONEY B CHF TUMSF.GEM. VPI WORLD INVEST TM SCHÖLLERB.ZINSSTRUK.PLUS VPI WORLD SELECT TM SCHÖLLERBANK (LEMBERGER) USD RENTENFONDS T WALSER PORTFOLIO GERMAN SCT SCHÖLLERBANK GLOBAL PENSION WIENER PRIVATBANK PREMIUM AUSGEWOGEN T SCHRODER INT EME ASIA A USD ACC WIENER PRIVATBANK PREMIUM DYNAMISCH T SCHRODER INT HONG KONG EQ AAC HKD WSTV ESPA DYNAMISCH D SCHRODER INTL EMG EUROPE A D WSTV ESPA PROGRESSIV SEMPER BOND EURO A WSTV ESPA TRADITIONELL SEMPERPROPERTY EUROPE T WSTV ESPA GARANTIE II SEMPERSHARE AUSTRIA T WSTV ESPA GARANTIE MITEIGENTUMSFONDS 83 SMART INVEST HELIOS AR B In accordance with § 20A I SPAENGLER BOND CORPORATE A SPAENGLERR BOND CORPORATE RT Shares and other non-fixed-income securities (with the SPECIAL PLUS T exception of units of RT2 and RT3 institutional funds), and STARCAPITAL UNIVERSAL BONDVALUE UI shares in affiliated companies are valued according to the SUCCESS ABSOLUTE T strict lower-of-cost-or-market principle (strenges Niederst- SUCCESS RELATIVE T wertprinzip). Starting in 2008, bonds and other fixed-income SUPERIOR 3 ETHIK A securities have been valued using the less strict lower-of- TEMPLETON ASIA GROWTH FUND T EUR cost-or-market principle (gemildertes Niederstwertprinzip) TEMPLETON EMERGING MARKETS BAL. FUND T provided for in § 81h(1) VAG. Valuation using the less strict TEMPLETON EMERGING MARKETS FUNDS A YDIS lower-of-cost-or-market principle resulted in write-downs of TEMPLETON GLOBAL TOTAL RETURN T EUR EUR 110,237,000 (EUR 59,833,000) not being performed. TEMPLETON GROWTH FUND EURO Bonds issued by the Republic of Greece were written down TERRASSISI RENTEN I AMI A to market value at the end of 2011. In accordance with Man- THREADNEEDLE EM MK B USD RGA agement Board resolutions, holdings of RT2 and RT3 institu- THREADNEEDLE EUROPEAN SELECT FUND tional funds were reported as fixed assets and the valuation THREADNEEDLE US EQUITIES relief options provided for in § 81h(2) VAG were not used TOP VARIO MIX T until 30 September 2011. TRADECOM FONDSTRADER T

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und The Company reported assets whose interest payments were Steuerberatungsgesellschaft provided confirmation that the not guaranteed and whose principal repayment might be statutory requirements for using the valuation relief options defaulted in whole or in part in the balance sheet asset item were satisfied and the existing amount of net hidden re- “shares and other non-fixed-income securities” with a carry- serves was double the size of the write-downs not performed. ing amount of EUR 29,973,000 (EUR 32,345,000) and a fair value of EUR 29,973,000 (EUR 33,996,000) as at 31 De- Use of the less strict valuation principle resulted in EUR cember 2011. 94,258,000 (EUR 0) in write-downs not being performed for units of institutional funds. Austrian banks have the option to tender previously sub- scribed bank bonds with a value of EUR 15,000,000 in 2013. The Company makes its investments in fixed-income securi- It is currently not expected that these options will be exer- ties, real estate, participations, shares, and structured in- cised. vestment products, taking into account the overall risk posi- tion of the Company and the investment strategy provided for As a rule, mortgage receivables and other loans, including this purpose. The risk inherent in the categories specified those to affiliated companies and companies in which a and market risks were taken into account when determining participation is held, are valued at the nominal value of the exposure volumes and limits. outstanding receivables. Discounts deducted from loan principal are spread over the term of the loan and shown The investment strategy is laid down in the form of invest- under deferred income on the liabilities side of the balance ment guidelines that are continuously monitored for compli- sheet. ance by the corporate risk controlling and internal audit departments. The corporate risk controlling department Valuation allowances of adequate size are formed for doubt- reports regularly to the tactical and strategic investment ful receivables and deducted from their nominal values. committee. The internal audit department reports regularly Tangible assets (not including land and buildings) are valued to the Managing Board. at cost less depreciation. Low-cost assets are written off in D full in the year of acquisition. As a rule, investments are generally low-risk. The strategic investment committee decides on possible high-risk invest- Unearned premiums for property/casualty insurance were ments based on the inherent risk of each individual invest- generally calculated by prorating over time after applying a 84 ment after performing a full analysis of all related risks and cost deduction of EUR 17,708,000 (EUR 16,859,000). Un- liquidity at risk, and considering all assets currently in the earned premiums for life insurance are formed according to portfolio and the effects of the individual investments on the the amounts prescribed in the business plan. No cost deduc- overall risk position. tion is applied. Unearned premiums for health insurance are calculated by prorating over time without applying a cost All known financial risks are assessed regularly and specific deduction. limits or reserves are used to limit exposure. Security price risk is reviewed periodically using value-at-risk and stress The mathematical reserve is calculated using the formulas tests. Default risk is measured using both internal and exter- and calculation bases contained in the business plans ap- nal rating systems. proved by or submitted to the supervisory authority.

An important goal of investment and liquidity planning is to The provision for outstanding claims for direct prop- guarantee that the return on investment remains continu- erty/casualty and life insurance business is calculated for ously above the minimum rate of return for the life insurance claims reported by the balance sheet date by individually class and that adequate amounts of liquid, value-protected valuing unsettled claims and adding lump-sum safety mar- financial investments are maintained for all classes. Liquidity gins for large unexpected losses. Lump-sum provisions planning therefore takes into account the trend in insurance based on past experience are formed for claims incurred but benefits and the majority of investment income is generally not reported. reinvested.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

In health insurance, provisions for outstanding claims are sion obligations, in the amount of EUR 25,368,000 (EUR calculated by applying lump-sum percentages to payments 25,689,000), is administered as an occupational group made for claims during the financial year. The percentage insurance plan under an insurance policy concluded in ac- rates were unchanged compared to the previous year. cordance with § 18f to 18j VAG. Provisions are formed for another portion (actuarial pension amount of EUR 9,603 In indirect business, provisions for outstanding claims are thousand (EUR 9,804 thousand)). As permitted under the primarily based on reports from ceding companies as of the Austrian Federal Ministry of Finance decree of 3 August 31 December 2011 balance sheet date. The reported 2001, an amount of EUR 295,000 (EUR 273,000) was trans- amounts were increased where this was considered neces- ferred to an outside insurance company to outsource sever- sary in light of past experience. ance pay obligations. The severance pay provision required under Austrian corporate law for 2011 was EUR 71,715,000 The equalisation provision is calculated in accordance with (EUR 70,216,000). The amount earmarked for satisfying the the directive of the Austrian Federal Finance Minister, BGBl outsourced severance pay obligations that was held by the (Federal Gazette) No. 545/1991 in the version contained in outside insurance company was EUR 63,590,000 (EUR BGBl II No. 66/1997. Use was made of the release provision 60,682,000). The difference of EUR 14,461,000 (EUR in § 13. 14,721,000) between the size of the severance pay provi- sions to be formed under Austrian corporate law and the The provision for profit-related premium refunds and poli- deposit held by the outside insurance company is reported in cyholder profit participation includes the amounts ear- the provisions for severance pay in the balance sheet. marked for policyholder premium refunds based on the business plans and articles of association for which no dis- Amounts denominated in foreign currencies are translated position had been made as of the balance sheet date. to euros using the appropriate mean rate of exchange.

The provisions for severance pay, pensions, and anniver- A portion of the underwriting items for assumed reinsurance sary bonuses are based on the pension insurance calcula- business and the associated retrocessions for prop- tion principles of the Actuarial Association of Austria (AVÖ), erty/casualty and life insurance is deferred for one year be- D AVÖ 2008-P (Employees), using a discount rate of 4% p.a. fore being shown in the annual financial statements. Company pension plan obligations are measured using the actuarial entry age normal method (Teilwertverfahren). The The following disclosures are provided for off-balance sheet retirement age used to calculate the provisions for anniver- contingent liabilities: Letters of comfort and liability under- 85 sary bonuses and severance pay is the statutory minimum takings totalling EUR 40,582,000 (EUR 38,904,000) have retirement age as stipulated in the Austrian General Social been issued in connection with a real estate purchase and Security Act (ASVG) (2004 reform), subject to a maximum borrowing. Liability undertakings totalling EUR 278,000 age of 62 years for the provision for anniversary bonuses. The (EUR 72,000) have been issued in connection with loan retirement age used to calculate the provision for pensions is repayments and bank guarantees. based on each individual agreement. The following percent- ages were used for employee turnover based on age: <31 A total of EUR 29,149,000 (EUR 29,149,000) relates to 7.5%, 31-35 3.5%, 36-40 2.5%, 41-50 1.5%, 51-55 0.5% letters of comfort with affiliated companies. and 56-65 0%. (<31 7.5%, 31-35 3.5%, 36-40 2.5%, 41-50 1.5%, 51-55 0.5% and 56-65 0%) The severance entitlement III. NOTES TO THE BALANCE SHEET used to calculate the provision for severance obligations is based on each individual agreement or on the collective The value of developed and unimproved properties was agreement. The following percentages were used for em- EUR 74,135,000 (EUR 73,788,000) as of 31 December ployee turnover based on age: <30 7.5%, 30-34 3.5%, 35-39 2011. 2.5%, 40-50 1.5%, 50-59 1.0% and 60-65 0.5% (<30 7.5%, 30-34 3.5%, 35-39 2.5%, 40-50 1.5%, 50-59 1.0% and 60- The carrying amount of owner occupied property was EUR 65 0.5%) The interest expenses for personnel provisions of 53,272,000 (EUR 53,444,000). EUR 4,550,000 (EUR 4,921,000) are reported under in- vestment and interest expenses. A portion of the direct pen-

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Other loans not secured by insurance contracts were com- The fair value of EUR 410,899,000 (EUR 373,548,000) for posed of the following: loans to the Republic of Austria in the land and buildings is composed of market value appraisals amount of EUR 28,408,000 (EUR 31,813,000), loan receiv- for the years 2007 to 2011 as follows: 2011: EUR ables from other public bodies in the amount of EUR 139,434,000, 2010: EUR 124,275,000 (EUR 124,275,000), 26,653,000 (EUR 30,885,000) and loan receivables from 2009: EUR 59,857,000 (EUR 69,547,000), 2008: EUR other borrowers in the amount of EUR with 188,428,000 44,017,000, (EUR 99,124,000), 2007: EUR 43,316,000, (EUR 159,300,000). (EUR 80,602,000).

The fair values of the investments are: In health insurance, the mathematical reserve is calculated using actuarial principles in accordance with § 18c VAG for Items under § 81c Abs. 2 Market value Market value all portfolio groups. VAG 31/12/11 31/12/10 In EUR '000 For individual insurance, the mathematical reserve is calcu- Land and buildings 410,899 373,548 Shares in affiliated companies 1,814,938 1,743,071 lated exclusively for each individual policy. This also applies Bonds and other securities of and to new business in the group insurance area affected by the loans to affiliated companies 925,151 821,908 1994 amendment to the Austrian Insurance Contract Act Participations 290,470 350,939 (VersVG). A lump-sum mathematical reserve is formed for Bonds and other securities of and the remaining group policies. The mathematical reserve is loans to other companies in which generally calculated using the prospective method. The an ownership interest exists 36,716 37,306 Shares and other non-fixed- calculation of the mathematical reserve takes into account interest securities 2,631,971 3,066,979 the fact that the mathematical reserve for a policy is forfeited Bonds an other fixed-income in favour of the community of the insured (Versichertenge- securities 3,762,691 3,897,843 meinschaft) in the event of early policy termination or death Shares in joint investments 32,107 40,787 of the insured. Mortgage receivables 352,300 371,803 Policy prepayments 16,981 18,026 D Other loans 243,489 221,998 Bank balances 49,090 116,409 Deposit receivables 3,377 18,306 10,570,180 11,078,923 86 Hidden reserves totalled EUR 463,129,000 (EUR 792,320,000) as of 31 December 2011. The fair value of the shares in affiliated companies and shares in companies in which a participation is held is equal to the stock exchange value or other available market value (up-to-date internal measurement calculations). If no stock exchange value or other market value is available, the purchase price is used as the fair value, if necessary reduced by any write-downs or a proportionate share of the publicly reported equity capital, whichever is greater. For shares and other securities, stock exchange values or carrying amounts (purchase price, re- duced by write-downs if necessary) are used as the fair value. The remaining investments were valued at their nominal values, reduced by write-downs where necessary.

The fair values of land and buildings were determined in accordance with the recommendations of the Austrian Asso- ciation of Insurance Companies. All properties are individu- ally valued during a 5-year period.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

The claims frequencies used for the actuarial calculation of The main probability tables used are the following: the mathematical provision are primarily derived from analy- ses of the Company's own claims experience. Mortality rates For endowment insurance policies DM 24/26 were mainly taken from the Austrian 2000/2002 general ÖVM 80/82 ÖVM/ÖVF 90/92 mortality tables. Consistent with the premium calculation, ÖVM/ÖVF 00/02 the mathematical reserve is generally calculated using a For annuity insurance policies EROM/EROF discount rate of 3% p.a. AVÖ 1996 R AVÖ 2005 R In life insurance, the mathematical reserve is calculated using principles laid down in business plans and approved by the supervisory authority and using calculation bases sub- For a large portion of the portfolio, the mathematical reserve mitted to the supervisory authority. is calculated using a discount rate of 3% p.a. Starting in 1995, a discount rate of 4% p.a. was used for certain policies, The mathematical reserve is calculated for each individual and between 1 July 2000 and 31 December 2003 a discount case, with the prospective method being used almost exclu- rate of 3.25% p.a. was used. For policies with coverage be- sively. ginning on or after 1 January 2004 the discount rate is 2.75% p.a., and on or after 23 September 2005 the discount rate is 2.25% for employer group policies. The discount rate is 2.25% for policies concluded on or after 1 January 2006, and 2.0% p.a. on or after 1 April 2011.

The amount shown under other liabilities includes EUR 24,137,000 (EUR 22,953,000) in tax liabilities and EUR 3,186,000 (EUR 3,167,000) in social security liabilities.

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The following balance sheet items are accounted for by affiliated companies and companies in which an ownership interest is held:

Companies in which an ownership Affiliated companies interest existis In EUR '000 2011 2010 2011 2010 Mortgage receivables 33,513 37,761 5,067 5,064 Deposit receivables 10,247 10,452 0 0 Receivables from direct insurance business 2,681 12,356 1,417 1,358 Receivables from reinsurance business 14,373 23,521 78 114 Other receivables 108,004 105,269 255 195 Deposits retained 173,857 122,532 0 0 Liabilities from direct insurance business 1,253 436 1 50 Liabilities from reinsurance business 10,106 12,132 16 10 Other liabilities 902,631 905,918 2 0

Liabilities arising from the use of off-balance sheet tangible assets were EUR 31,622,000 (EUR 25,097,000) for the following financial year and EUR 166,032,000 (EUR 148,922,000) for the following five years.

The book values of intangible assets, land and buildings, investments in affiliated companies and ownership interests have changed as follows:

Bonds and other securities of and Bonds and other loans to securities of and companies in Shares loans to which an D Intangible Land and in affiliated affiliated ownership assets buildings companies companies Participations interest is held In EUR '000 As of 31 December 2010 17,072 273,844 1,484,257 821,440 276,068 37,306 88 Additions 2,465 3,417 97,435 71,001 101 712 Disposals 7 0 311 9,147 3,227 1,302 Rebooking 0 0 0 11,416 0 0 Appreciation 0 693 0 0 0 0 Capital consumption 3,669 8,175 16,000 0 350 0 Change due to value adjustments 0 0 0 30,000 0 0 As of 31 December 2011 15,861 269,779 1,565,381 924,710 272,592 36,716

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

IV. NOTES TO THE INCOME STATEMENT

The premiums written, earned premiums, expenses for insurance claims, operating expenses and reinsurance bal- ance in property/casualty insurance in 2011 are broken down as follows:

Expenses for claims Net earned and insurance Administrative Reinsurance Gross Premiums written premiums benefits expenses balance In EUR '000 Direct business Fire and fire business interruption insurance 203,626 200,225 127,230 38,976 –54,664 Liability insurance 114,451 114,270 63,660 32,405 –23 Household insurance 76,803 76,804 37,852 19,973 –2,578 Motor liability insurance 190,036 190,949 129,396 36,081 –1,193 Legal expenses insurance 26,949 26,963 12,698 6,733 320 Marine, aviation, and transport insurance 32,799 31,979 20,827 7,673 –4,885 Other insurances 33,955 33,963 39,906 6,812 10,147 Other motor vehicle insurance 123,926 123,264 96,294 26,764 –3,285 Other non-life insurance 161,986 161,545 112,309 39,352 –13,242 Casuality insurance 96,352 96,770 57,248 22,290 –2,170 1,060,883 1,056,732 697,420 237,059 –71,573 Previous year value 1,037,091 1,044,202 670,877 234,458 –102,703

Indirect business Marine, aviation, and transport insurance 37 37 –74 13 8 Other insurances 5,258 5,355 11,430 1,665 2,540 5,295 5,392 11,356 1,678 2,548 Previous year value 9,425 9,504 11,180 1,863 16 D

Direct and indirect business 1,066,178 1,062,124 708,776 238,737 –69,025 Previous year value 1,046,516 1,053,706 682,057 236,321 –102,687 89

The reinsurance balance includes earned reinsurance premiums, effective reinsurance claims and reinsurance commissions.

Premiums written for health insurance in 2011 are broken down as follows:

2011 2010 In EUR '000 Direct business Individual insurance 235,679 230,122 Group insurance 99,657 97,566

Indirect business Group insurance 109 75

335,445 327,763

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Premiums written had the following breakdown for life insurance in 2011:

2011 2010 In EUR '000 Direct business 869,568 1,055,076 Indirect business 3,360 3,440

872,928 1,058,516

Direct premiums for life insurance were composed of the following:

2011 2010 In EUR '000 Individual insurance 794,651 984,289 Group insurance 74,917 70,787 869,568 1,055,076 Single premium policies 233,069 408,703 Policies with regular premium payments 636,499 646,373 869,568 1,055,076 Policies with profit participation 410,519 449,253 Policies without profit participation 2,951 3,260 Unit-linked life insurance policies 412,786 556,730 Index-linked life insurance policies 43,312 45,833

869,568 1,055,076

The branch office in Italy wrote direct premiums of EUR 8,963,000 (EUR 59,653,000) and had an underwriting result of EUR D 198,000 (EUR 4,798,000). The exception rule of § 81o(6) VAG was used.

The reinsurance balance for life insurance was negative in 2011, with a value of EUR 1,499,000 (EUR 1,717,000). The result from indirect business was EUR 212,000 (EUR 540,000). The reinsurance balance for health insurance was negative in 2011, 90 with a value of EUR 8,010,000 (EUR 9,109,000). The result from indirect business was EUR 75,000 (EUR 64,000). A portion of the net earned premiums of EUR 5,392,000 (EUR 9,504,000) from indirect property/casualty insurance business had been deferred one year before being recognized in the income statement. Of the EUR 3,364,000 (EUR 3,443,000) in net earned premiums from indirect life insurance business, EUR 332,000 (EUR 391,000) was deferred for one year before being shown in the income statement.

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Of the income from participations, income from other investments and income from land and buildings shown in the income statement, affiliated companies accounted for the following amounts:

2011 2010 In EUR '000 Income from participations Property/casualty insurance 42,631 26,061 Life insurance 10,808 4,388 Total 53,439 30,449

Income from other investments Property/casualty insurance 21,454 20,415 Health insurance 1,199 2,112 Life insurance 15,449 14,909 Total 38,102 37,436

Income from land and builing Property/casualty insurance 62 0 Health insurance 17 75 Life insurance 517 532

Total 596 607

All of the investment income in the life insurance and health insurance segments was transferred to the underwriting account, as investment income is a component of the underwriting calculations in both segments. In the property/casualty segment, only deposit interest income for indirect business was transferred to the underwriting account. D The expenses for insurance claims and benefits, administrative expenses, other underwriting expenses and invest- ment expenses include:

2011 2010 91 In EUR '000 Wages and salaries 119,102 112,932 Expenses for severance benefits and payments to company pension plans 4,038 7,980 Expenses for retirement provisions 15,831 13,428 Expenses for statutory social contributions and income-related contribution and mandatory contributions 40,970 46,788 Other social security expenses 1,476 1,807

Commissions of EUR 180,057,000 (EUR 174,553,000) were incurred for indirect business in 2011.

Losses on disposals of investments were EUR 7,436,000 (EUR 1,882,000) in financial year 2011.

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The valuation reserve shown on the balance sheet as of 31 December 2011 and releases over the fiscal year are broken down by asset item as follows:

As of As of 31/12/2010 Release 31/12/2011 In EUR '000 Land and buildings 51,605 1,263 50,342 Shares in affiliated companies 226 0 226 Shares and other non-fixed-income securities 26,456 23,244 3,212 78,287 24,507 53,780

The formation and release of untaxed reserves resulted in an increase in income tax expenses of EUR 316,000 (EUR 7,682,000) for the financial year.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

V. PROFIT PARTICIPATION LIFE INSURANCE

HEALTH INSURANCE Under the FMA regulation of 20 October 2006 on profit participation in the life insurance sector (GBVVU), the ex- All policies with an adjustment clause whose premiums were penses for profit-related premium refunds and policyholder not increased by the required actuarial amount when 2011 profit participation plus any direct credits must be at least premium adjustments were performed receive a special 85% of the assessment base. profit share on 31 December 2011. The assessment basis within the meaning of § 3(1) GBVVU is The size of the profit share equals the single-premium calculated as follows for life insurance policies eligible for amount that is necessary to provide relief to elderly persons profit participation: covered by health insurance.

In EUR ´000 Under § 7 of the Financial Market Authority (FMA) regulation Earned premiums 405,522 on profit participation in the health insurance industry Expenses for insurance claims (GBVKVU) of 12 June 2007, this regulation is applicable to including changes to underwriting reserves -478,605 policies whose actuarial bases were submitted after 30 June Operating expenses -66,324 2007 and whose terms provide for profit participation. The Other underwriting and expenses for profit-related premium refunds plus any direct non-underwriting income/expenses -3,780 credits must be at least 85% of the assessment basis for the Investment and interest income health insurance policies concerned. and expenses 165,366 Assessment base as at 31/12/2011 22,179 The assessment basis within the meaning of § 3(1) GBVKVU is calculated as follows for health insurance policies eligible for profit participation: As a general rule, the listed income and expense items were calculated directly. Where this was not possible, an alloca- D

In EUR ´000 tion was performed as far as possible on the basis of origin in accordance with the provisions of § 3(2) GBVVU. Earned premiums 6,013 Expenses for insurance claims including changes to underwriting reserves -5,114 Expenses for profit participation, including direct credits, 93 Operating expenses -2,320 were EUR 23,744,000 in 2011 (EUR 21,279,000), repre- Other underwriting and senting 107.1% of the assessment basis. non-underwriting income/expenses -20 Investment and interest income The Managing Board of Wiener Städtische Versicherung AG and expenses 271 has adopted a resolution providing the following earnings Assessment base as at 31/12/2011 -1,170 appropriation as of 31 December 2011 for the insurance policies in the following various profit classes depending on the guaranteed actuarial interest rate: As a general rule, the listed income and expense items were calculated directly. Where this was not possible, an alloca- tion was performed as far as possible on the basis of origin in accordance with the provisions of § 3(2) GBVKVU. The option provided for in § 3(3) GBVKVU to apply a prior deduction to the calculation of the assessment basis was used.

Since the assessment basis is negative, the percentage rate specified in § 6(1) GBVKVU was not calculated.

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Profit Class A Profit Class B 1. In accordance with policy terms and conditions, all insur- In accordance with policy terms and conditions, all insurance ance policies in Profit Class A that belong to Settlement Class policies in Profit Class B receive profit shares equal to 15% of 92 receive the following profit shares: the annual net premium.

a) An interest profit share equal to 0.25% of the mathe- Ordinary life insurance policies with a sum insured of at least matical reserve specified in the business plan at the be- EUR 726.73 and a policy term of at least 12 years that are ginning of the current insurance year. included in Profit Class B also receive a final profit share equal to 20% of the sum insured upon maturity of the sum b) A total profit share equal to 2.5% of the sum insured insured in 2012 in the case of survival. The special profit upon death for policies that have a proper adjustment shares approved in 1983 and 1984 are counted toward this letter and no regular premium payments outstanding, final profit share. and 1% for all other policies. Profit Class D c) A final profit share upon maturity of the endowment sum In accordance with policy terms and conditions, all insurance in 2012 equal to an interest profit share as per point a) policies in Profit Class D receive the following profit shares: on the total matured capital. a) An interest profit share equal to 0.00% of the mathe- 2. In accordance with policy terms and conditions, all insur- matical reserve specified in the business plan at the be- ance policies in Profit Class A that belong to Settlement Class ginning of the current insurance year. 96 (single-premium insurance policies) receive the following profit shares: b) A total profit share equal to 2% of the sum insured upon death for policies that have a proper adjustment letter a) An interest profit share equal to 0.25% of the mathe- and no regular premium payments outstanding, and 1% matical reserve specified in the business plan at the be- for all other policies. D ginning of the current insurance year. c) A final profit share upon maturity of the endowment sum b) A final profit share upon maturity of the endowment sum in 2012 equal to a single interest profit share as per in 2012 equal to an interest profit share as per point a) point a) on the total matured capital for single-premium 94 on the total matured capital. policies, and equal to a single interest profit share as per point a) on the total matured capital for policies with 3. In accordance with policy terms and conditions, all insur- regular premiums and a premium payment period of ance policies in Profit Class A, with the exception of policies less than 20 years, or equal to double the interest profit in Settlement Classes 92 and 96, receive the following profit share for policies with a premium payment period of 20 shares: years or more.

a) An interest profit share equal to 0.25% of the mathe- matical reserve specified in the business plan at the be- ginning of the current insurance year.

b) A total profit share equal to 3.5% of the sum insured upon death for policies that have a proper adjustment letter and no regular premium payments outstanding, and 2% for all other policies.

c) A final profit share upon maturity of the endowment sum in 2012 equal to an interest profit share as per point a) on the total matured capital.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Profit Classes F, H, I, J, L, X, Y and S the case of annuity contracts, the corresponding final 1. In accordance with policy terms and conditions, all insur- profit share is allocated only if the payout is made in the ance policies in Profit Classes F, H, I, J, L, X, Y and S that form of an annuity. belong to Settlement Class 2004 receive the following profit shares: d) Special profit share as additional final profit share upon maturity of the endowment sum for policies with regular a) An interest profit share equal to 0.50% of the contrac- premium payments equal to the interest profit share tual mathematical reserve at the beginning of the cur- applicable at the time. In the case of annuity contracts, rent insurance year. this special profit share is allocated only if the payout is made in the form of an annuity. b) A total or additional profit share equal to 1% of the sum insured upon death, the contractual annuity redemption 3. In accordance with policy terms and conditions, all insur- value or the endowment sum for policies with no regular ance policies in Profit Classes F, H, I, J, L, X, Y and S that premium payments outstanding. belong to Settlement Class 2007 receive the following profit shares: c) A final profit share upon maturity of the endowment sum in 2012 equal to the interest profit share as per point a) a) An interest profit share equal to 1.00% of the contrac- on the contractual mathematical reserve and, in the tual mathematical reserve at the beginning of the cur- case of Profit Class F or S, an additional 3.25% of the rent insurance year. profit reserve existing as at the balance sheet date, re- gardless of whether payout is in the form of an annuity b) A total or additional profit share for policies with no or a lump-sum payment. regular premium payments outstanding, equal to 1% of the sum insured upon death or the contractual annuity 2. In accordance with policy terms and conditions, all insur- redemption value or the endowment sum, plus an ad- ance policies in Profit Classes F, H, I, J, L, X, Y and S that ministrative cost bonus equal to 0.15% of the sum in- belong to Settlement Class 2006 receive the following profit sured upon death or the contractual redemption value D shares: or the endowment sum for each year of the policy term and/or period of deferment, distributed over the last five a) An interest profit share equal to 1.00% of the contrac- years of the policy term and/or period of deferment. tual mathematical reserve at the beginning of the cur- 95 rent insurance year. c) A final profit share upon maturity of the endowment sum in 2012 equal to a single interest profit share as per b) A total or additional profit share equal to 1% of the sum point a) on the contractual mathematical reserve for insured upon death, the contractual annuity redemption single-premium policies, or equal to double the interest value or the endowment sum for policies with no regular profit share as per point a) on the contractual mathe- premium payments outstanding. matical reserve for policies with regular premium pay- ments plus, in the case of Profit Class F or S, 3.25% of c) A final profit share on maturity of the endowment sum in the profit reserve existing as at the balance sheet date. 2012 equal to a single interest profit share as per point a) In the case of annuity contracts, the corresponding final on the contractual mathematical reserve for single- profit share is allocated only if the payout is made in the premium policies, and equal to a single interest profit form of an annuity. share as per point a) on the contractual mathematical reserve for policies with regular premiums and a pre- mium payment period of less than 15 years, or equal to double the interest profit share as per point a) on the contractual mathematical reserve for policies with a premium payment period of 15 years or more and, in the case of Profit Class F or S, an additional 3.25% of the profit reserve existing as at the balance sheet date. In

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

4. In accordance with policy terms and conditions, all insur- c) A final profit share upon maturity of the endowment sum ance policies in Profit Class F that belong to Settlement Class in 2012 equal to a single interest profit share as per 2008 receive the following profit shares: point a) on the contractual mathematical reserve for single-premium policies, or equal to double the interest a) An interest profit share equal to 1.00% of the contrac- profit share as per point a) on the contractual mathe- tual mathematical reserve at the beginning of the cur- matical reserve for policies with regular premium pay- rent insurance year. ments plus, in the case of Profit Class F or S, 3.25% of the profit reserve existing as at the balance sheet date. b) A total or additional profit share for policies with no regular premium payments outstanding, equal to 1% of 6. In accordance with policy terms and conditions, all insur- the sum insured upon death or the contractual annuity ance policies in Profit Classes F, H, I, J, L, X, Y and S that redemption value or the endowment sum, plus an ad- belong to Settlement Class 2011E or 2011R receive the ministrative cost bonus equal to 0.15% of the sum in- following profit shares: sured upon death or the contractual annuity redemption value or the endowment sum for each year of the policy a) An interest profit share equal to 1.25% of the contrac- term and/or period of deferment, distributed over the tual mathematical reserve at the beginning of the cur- last five years of the policy term and/or period of defer- rent insurance year. ment. b) A total or additional profit share for policies with no c) A final profit share upon maturity of the endowment premium payments outstanding, equal to 0.5% of the capital in 2012 equal to a single interest profit share as contractual annuity redemption value or the endowment per point item a) on the contractual actuarial reserve, sum, plus an administrative cost bonus equal to 0.15% plus 3.25% of the profit reserve existing as at the bal- of the contractual annuity redemption value or the en- ance sheet date. In addition to this final profit share, a dowment sum for each year of the policy term and/or "goal" bonus of EUR 73.00 for each EUR 50.00 of period of deferment for policies with a term and/or de- D monthly premiums is credited to policies with Annex ferment period of 15 years or more, distributed over the TBL, provided the contractual premium is paid as last five years of the policy term and/or period of defer- agreed until policy expiration. ment.

96 5. In accordance with policy terms and conditions, all insur- c) A final profit share upon maturity of the endowment sum ance policies in Profit Classes F, H, I, J, L, X, Y and S that in 2012 equal to a single interest profit share as per belong to Settlement Class 2011G receive the following profit point a) on the contractual mathematical reserve for shares: single-premium policies, or equal to double the interest profit share as per point a) on the contractual mathe- a) An interest profit share equal to 1.25% of the contrac- matical reserve for policies with regular premium pay- tual mathematical reserve at the beginning of the cur- ments plus, in the case of Profit Class F or S, 3.25% of rent insurance year. the profit reserve existing as at the balance sheet date, regardless of whether payout is in the form of an annuity b) A total or additional profit share for policies with no or a lump-sum payment. regular premium payments outstanding, equal to 1‰ of the sum insured upon death, plus an administrative cost bonus equal to 0.15% of the sum insured upon death or the annuity present value or the endowment sum for each year of the policy term and/or period of deferment for policies with a term and/or deferment period of 15 years or more, distributed over the last five years of the policy term and/or period of deferment.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

7. In accordance with policy terms and conditions, all insur- surance year for policies with no regular premium pay- ance policies in Profit Classes F, H, I, J, L, X, Y and S, with the ments outstanding. exception of policies in Settlement Classes 2004, 2006, 2007, 2008, 2011E, 2011G and 2011R, receive the following 3. In accordance with policy terms and conditions, all whole profit shares: life endowment insurance policies in Profit Class WVN that belong to Settlement Class 2011 receive the following profit a) An interest profit share equal to 0.00% of the contrac- shares: tual mathematical reserve at the beginning of the cur- rent insurance year. a) An interest profit share equal to 1.25% of the mathe- matical reserve specified in the business plan at the be- b) A total or additional profit share equal to 1‰ of the sum ginning of the current insurance year. insured upon death, the contractual annuity redemption value or the endowment sum for policies with no regular b) An additional profit share equal to 25% of the risk pre- premium payments outstanding. mium included in the total premium for the current in- surance year for policies with no regular premium pay- c) A final profit share upon maturity of the endowment sum ments outstanding. in 2012 equal to the interest profit share as per point a) on the contractual mathematical reserve and, in the 4. In accordance with policy terms and conditions, all whole case of Profit Class F or S, an additional 3.25% of the life endowment insurance policies in Profit Class WVN, with profit reserve existing as at the balance sheet date, re- the exception of policies in Settlement Classes 2004, 2006 gardless of whether payout is in the form of an annuity and 2011, receive the following profit shares: or a lump-sum payment. a) An interest profit share equal to 0.25% of the mathe- Profit Class WVN matical reserve specified in the business plan at the be- 1. In accordance with policy terms and conditions, all whole ginning of the current insurance year. life endowment insurance policies in Profit Class WVN that D belong to Settlement Class 2004 receive the following profit b) An additional profit share equal to 25% of the risk pre- shares: mium included in the total premium for the current in- surance year for policies with no regular premium pay- a) An interest profit share equal to 0.50% of the mathe- ments outstanding. 97 matical reserve specified in the business plan at the be- ginning of the current insurance year. Profit Class FLV 1. In accordance with policy terms and conditions, all insur- b) An additional profit share equal to 25% of the risk pre- ance policies in Profit Class FLV that belong to Settlement mium included in the total premium for the current in- Class 2008 receive the following profit shares: surance year for policies with no regular premium pay- ments outstanding. 0.3% p.a. of the assets of the fund in question will be distrib- uted as profit for policies with no premium payments out- 2. In accordance with policy terms and conditions, all whole standing. life endowment insurance policies in Profit Class WVN that belong to Settlement Class 2006 receive the following profit 2. In accordance with policy terms and conditions, all insur- shares: ance policies in Profit Class FLV that belong to Settlement Class 2010 receive the following profit shares: a) An interest profit share equal to 1.00% of the mathe- matical reserve specified in the business plan at the be- 0.3% p.a. of the assets of the fund in question will be distrib- ginning of the current insurance year. uted as profit for policies with no premium payments out- standing. b) An additional profit share equal to 25% of the risk pre- mium included in the total premium for the current in-

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

3. In accordance with policy terms and conditions, all insur- Class K that belong to Settlement Class 99 receive a pre- ance policies in Profit Class FLV, with the exception of poli- mium bonus equal to 65% of the premium set for the insur- cies in Settlement Classes 2008 and 2010, receive the fol- ance year beginning in 2012. lowing profit shares: 2. In accordance with policy terms and conditions, all risk a) Policies with regular premium payments: A profit share insurance policies with regular premium payments in Profit equal to 3% of the premium set for the insurance year Class K that belong to Settlement Class 05 receive the follow- beginning in 2011. ing premium bonus:

b) Single-premium policies: A profit share equal to 3 ‰ of a) 65% of the premium set for the insurance year begin- the single premium of the master insurance policy at the ning in 2011 for policies 3GP, 3FP, H3P, H3G, K3P and beginning of the insurance year falling in the year 2011. K3G

4. For premium shares and capital shares invested in the b) 20% of the premium set for the insurance year begin- cover fund (Deckungsstock) of the traditional life insurance ning in 2012 for all remaining policies. policy, the approved total interest is distributed equally over all of the days of the calendar year and partial amounts cred- 3. In accordance with policy terms and conditions, all risk ited continuously to their portion of the cover fund. Total insurance policies with regular premium payments and sup- interest of 3.25% p.a. will be credited to the corresponding plementary risk insurance policies in Profit Class K, with the mathematical reserve in 2012. exception of policies in Settlement Classes 99 and 05, re- ceive a premium bonus equal to 25% of the premium set for Profit Class ZV – Retirement provision the insurance year beginning in 2012. For premium shares and capital shares invested in the cover fund (Deckungsstock) of the traditional life insurance policy, 4. In accordance with policy terms and conditions, all dread the approved total interest is distributed equally over all of disease supplementary insurance policies with regular pre- D the days of the calendar year and partial amounts credited mium payments for lump-sum payment and premium waiver continuously to their portion of the cover fund. Total interest in the event of serious illnesses or need for extensive nursing of 3.25% p.a. will be credited to the corresponding mathe- care receive a premium bonus equal to 10% of the supple- matical reserve in 2012. mentary policy premium set for the insurance year beginning 98 in 2012. Profit Class BU with profit participation In accordance with policy terms and conditions, all occupa- Profit Class R tional disability policies in Profit Class BU with profit partici- 1. In accordance with policy terms and conditions, all insur- pation receive profit shares equal to 35% of the insurance ance policies in Profit Class R (including policies in Settle- premium, accumulated with interest at 3.25% and paid out ment Classes 87 and 99), with the exception of policies at the end of the policy term. whose annuity payments have already started, receive the following profit shares: Profit Class BU with premium bonus In accordance with policy terms and conditions, all occupa- a) An interest profit share equal to 0.25% of the mathe- tional disability insurance policies and supplementary occu- matical reserve specified in the business plan at the be- pational disability insurance policies with regular premium ginning of the current insurance year. payments in Profit Class BU with premium bonus receive a

premium bonus equal to 35% of the policy premium or sup- b) An additional profit share equal to 1 ‰ of the contrac- plementary policy premium set for the insurance year begin- tual annuity redemption value or endowment sum for ning in 2012. policies with no regular premium payments outstanding.

Profit Class K / DD supplementary policy c) A final profit share upon maturity of the endowment sum 1. In accordance with policy terms and conditions, all risk in 2012 equal to an interest profit share as per point a) insurance policies with regular premium payments in Profit on the total matured capital.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

2. In the case of insurance policies in Settlement Class 2000 b) An additional profit share equal to 1‰ of the contrac- whose annuity payments have already started and are in tual annuity redemption value for policies with no regu- their second year of payments or later, annuities whose pay- lar premium payments outstanding. ments have already started receive an increase starting as of 1 January 2011 equal to 0.00% of the last annuity payment. c) A final profit share on maturity of the endowment sum in The bonus interest rate is 3.25% for bonus annuity agree- 2012 equal to an interest profit share as per point a) on ments. the total mathematical reserve.

3. In the case of insurance policies in Settlement Class 2004 2. In the case of insurance policies in Profit Class Z whose whose annuity payments have already started and are in annuity payments have already started and are in their sec- their second year of payments or later, annuities whose pay- ond year of payments or later, annuities whose payments ments have already started receive an increase starting as of have already started receive an increase starting as of 1 1 January 2012 equal to 0.50% of the last annuity payment. January 2011 equal to 0.25% of the last annuity payment. The bonus interest rate is 3.25% for bonus annuity agree- ments. Profit Class FPZ 1. In accordance with policy terms and conditions, all insur- 4. In the case of insurance policies in Settlement Class 2006 ance policies in Profit Class FPZ in the “Single” policy form whose annuity payments have already started and are in receive profit shares equal to 25% of the risk premium at the their second year of payments or later, annuities whose pay- beginning of the current insurance year, provided the first ments have already started receive an increase starting as of annuity payment has not yet become payable. These will be 1 January 2011 equal to 1.00% of the last annuity payment. transferred to an investment fund for the acquisition of fund The bonus interest rate is 3.25% for bonus annuity agree- units. ments. 2. Insurance policies in Profit Class FPZ are subject to the 5. In the case of insurance policies in Settlement Class 2011 provisions of Profit Class Z starting as of the time of liquida- whose annuity payments have already started and are in tion. D their second year of payments or later, annuities whose pay- ments have already started receive an increase starting as of Profit Class BKV 1 January 2012 equal to 1.25% of the last annuity payment. 1. In accordance with policy terms and conditions, all insur- The bonus interest rate is 3.25% for bonus annuity agree- ance policies in Profit Class BKV that belong to Settlement 99 ments. Class 2006 with equal distribution receive the following profit shares: 6. For insurance policies that are not in Settlement Classes 2000, 2004, 2006 and 2011 whose annuity payments have The profit share approved for the entire calendar year and already started and are in their second year of payments or the guaranteed minimum interest are distributed equally later, annuities whose payments have already started receive over all of the days of the calendar year and partial amounts an increase starting as of 1 January 2012 equal to 0.25% of credited continuously to their portion of the cover fund. Total the last annuity payment. The bonus interest rate is 3.25% interest of 4.00% p.a., equal to the sum of the profit share for bonus annuity agreements. and guaranteed minimum interest, will be credited to the corresponding mathematical reserve in 2012. Profit Class Z 1. In accordance with policy terms and conditions, all sup- 2. In accordance with policy terms and conditions, all insur- plementary pension insurance policies in Profit Class Z, with ance policies in Profit Class BKV that belong to Settlement the exception of policies whose annuity payments have al- Class 2011 with equal allocation receive the following profit ready started, receive the following profit shares: shares: a) A profit share equal to 0.25% of the mathematical re- The profit share approved for the entire calendar year and serve specified in the business plan at the beginning of the guaranteed minimum interest are distributed equally the current insurance year. over all of the days of the calendar year and partial amounts

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

credited continuously to their portion of the cover fund. Total 5. In the case of insurance policies in Profit Class BKV that interest of 4.00% p.a., equal to the sum of the profit share belong to Settlement Class 2006 whose annuity payments and guaranteed minimum interest, will be credited to the have already started and are in their second year of pay- corresponding mathematical reserve in 2012. ments or later, annuities whose payments have already started receive an increase starting as of 1 January 2012 3. In accordance with policy terms and conditions, all insur- equal to 1.75% of the last annuity payment. There is no in- ance policies in Profit Class BKV - classic that belong to crease for bonus annuity agreements. The bonus annuity Settlement Class 2006 with reporting date allocation receive interest rate is 4%. the following profit shares: 6. In the case of insurance policies in Profit Class BKV that An interest profit share equal to 1.75% of the mathematical belong to Settlement Class 2011 whose annuity payments reserve specified in the business plan at the beginning of the have already started and are in their second year of pay- current insurance year. ments or later, annuities whose payments have already started receive an increase starting as of 1 January 2012 4. In accordance with policy terms and conditions, all insur- equal to 2.00% of the last annuity payment. There is no in- ance policies in Profit Class BKV that belong to Settlement crease for bonus annuity agreements. The bonus annuity Class 2011 with reporting date allocation receive the follow- interest rate is 4%. ing profit shares: The following applies to all profit classes: An interest profit share equal to 2.00% of the mathematical The Managing Board will decide towards the end of 2012 on reserve specified in the business plan at the beginning of the the size of the profit allocation for 31 December 2012. current insurance year.

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

VI. SIGNIFICANT PARTICIPATIONS

Participations were held in the following companies as of 31 December 2011:

Net income Equity Last Annul Direct share fort he year capital in Financial Name, Location in % in EUR ´000 EUR ´000 Statements I. Direct interests in affiliated companies Andel Investment Praha s.r.o., Prag 100 901 27,816 2011 ARITHMETICA Versicherungs- und Finanzmathematische Beratungs-Gesellschaft m.b.H., Wien 75 27 403 2011 BML Versicherungsmakler GmbH, Wien 100 36,199 810,060 2011 CENTER Hotelbetriebs GmbH, Wien 55 294 -652 2011 DBR-Liegenschaften GmbH & Co KG, Stuttgart 100 44 11,185 2011 DBR-Liegenschaften Verwaltungs GmbH, Stuttgart 100 0 23 2011 DIRECT-LINE Direktvertriebs-GmbH, Wien 100 1 64 2010 EXPERTA Schadenregulierungs-Gesellschaft m.b.H., Wien 25 371 903 2010 HORIZONT Personal-, Team- und Organisationsentwicklung GmbH, Wien 76 33 177 2010 KÁLVIN TOWER Immobilienentwicklungs- und Investitionsgesellschaft m.b.H., Budapest 100 80 1,771 2011 PFG Holding GmbH, Wien 60 -8,678 126,122 2011 PFG Liegenschaftsbewirtschaftungs GmbH, Wien 50 0,0 45 2010 Projektbau Holding GmbH, Wien 60 -2 21,328 2011 Senioren Residenz gemeinnützige Betriebsgesellschaft mbH, Wien 100 -422 492 2010 Senioren Residenz Veldidenapark Errichtungs- und Verwaltungs GmbH, Innsbruck 67 -438 9,360 2011 Sparkassen Versicherung AG Vienna Insurance Group, Wien 17 84,615 523,229 2011 VICE-Beteiligungs GmbH, Wien 100 -10 52 2010 D Wiener Verein Bestattungs- und Versicherungsservice Gesellschaft m.b.H., Wien 100 29 1,498 2011

WPWS Vermögensverwaltung GmbH, Wien 100 11,296 442,638 2011 II. More than 20%,ownership, where a direct ownership interest exists 101 Österreichisches Verkehrsbüro Aktiengesellschaft, Wien 36 10,396 146,641 2010

The exception provided for in § 241 (2) and (3) of the Austrian Corporate Code (Unternehmensgesetzbuch – UGB) was used.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

VII. OTHER INFORMATION Employee representatives: Peter Grimm The Company has EUR 10,000,000.00 in share capital that Franz Urban is divided into 100,000 no-par value registered voting shares, Gerd Wiehart with each share participating equally in the share capital. Peter Winkler

The Company has subordinated liabilities in the form of THE MANAGING BOARD HAD THE FOLLOWING supplementary capital bond 2009 in accordance with § MEMBERS IN FINANCIAL YEAR 2011: 73c(2) VAG with a total nominal value of EUR 100,000,000.00. This bond does not have a fixed term, and Chairman: pays a variable rate of interest. Robert Lasshofer

On 22 December 2010, the Company issued supplementary Members: capital bond 2010 in accordance with § 73c(2) VAG with a Christine Dornaus total nominal value of EUR 175,000,000.00. This bond does Judit Havasi not have a fixed term, pays a fixed interest rate of 8% p.a., Peter Höfinger (until 30 June 2011) and can be called starting as of 28 December 2029. Ralph Müller (starting 1 April 2011) Erich Leiß The auditor has verified that these supplementary capital bonds satisfy the requirements of § 73b (2)(4) VAG. THE FOLLOWING INDIVIDUALS WERE APPOINTED AS TRUSTEES IN FINANCIAL YEAR 2011 IN ACCORDANCE The Company also issued bond 2010-2020 with a nominal WITH § 22(1) VAG: value of EUR 150,000,000.00 in September 2010. The bond has a term of ten years and pays a fixed interest rate of Trustee: 3.63% p.a. (cover funds – § 20(2)(1) VAG): D Oskar Ulreich THE SUPERVISORY BOARD HAD THE FOLLOWING MEMBERS IN FINANCIAL YEAR 2011: Deputy: Nicole Schweizer 102 Chairman: Günter Geyer Trustee: (except for cover funds – § 20(2)(1) VAG): Deputy Chairman: Wolfgang Pechriggl Hans-Peter Hagen Deputy: Members: Michael Hysek Rudolf Ertl Christian Haidinger Werner Muhm Gabriele Payr Martin Simhandl Sonja Zwazl

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

The average number of employees (including cleaning staff) The Company is a group member within the meaning of § 9 was 3,480 (3,528). 1,935 (1,992) of these employees were of the Austrian Corporate Tax Act (Körperschaftssteuerge- active in sales resulting in personnel expenses of EUR setz – KStG) of WIENER STÄDTISCHE WECHSELSEITIGER 85,305,000 (EUR 89,815,000), and 1,545 (1,536) were in VERSICHERUNGSVEREIN – VERMÖGENSVERWALTUNG – operations resulting in personnel expenses of EUR Vienna Insurance Group, Vienna. The taxable earnings of 96,112,000 (EUR 93,119,000). group members are attributed to the parent company. The parent company has entered into agreements with each No loans were outstanding to members of the Managing group member governing the allocation of positive and nega- Board on 31 December 2011 (EUR 0). tive tax amounts for the purpose of allocating corporate income tax charges according to their origin. A liability of Supervisory Board members received no loans in 2011 EUR 5,935,000 (EUR 11,792,000) is owed to the parent (EUR 0). company for tax allocations. Use was made of the election to capitalise deferred profit taxes arising due to temporary No guarantees were outstanding for members of the Manag- differences between earnings under corporate law and tax- ing Board or Supervisory Board as of 31 December 2011. able earnings. A 25% tax rate was chosen for deferred taxes.

In 2011, the total expenses for severance pay and pensions of EUR 19,869,000 (EUR 21,408,000) included severance pay and pension expenses of EUR 9,074,000 (EUR 29,000) for members of the Managing Board and senior manage- ment in accordance with § 80(1) of the Austrian Stock Corporation Act (Aktiengesetz – AktG).

The members of the Managing Board received EUR 2,760,000 (EUR 1,760,000) in remuneration for their ser- vices to the Company during the reporting period. The mem- D bers of the Managing Board received EUR 805,000 (EUR 458,000) from affiliated companies during the reporting period. EUR 544,000 (EUR 436,000) of this amount was charged to the Company in the form of an intercompany 103 charge.

The total compensation paid to former members of the Man- aging Board (including surviving dependants) during the reporting period was EUR 3,472,000 (EUR 1,655,000).

The members of the Supervisory Board received EUR 173,000 (EUR 99,000) in remuneration for their services to the Company in 2011.

A summary of auditing fees is provided in the notes to the consolidated financial statements of VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe, Vienna.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

The Company is a 99.9% subsidiary of VIENNA INSURANCE most of the companies. These consolidated financial state- GROUP AG Wiener Versicherung Gruppe, Vienna, and is ments have been disclosed and are available for inspection therefore part of the group formed by this shareholder and its at the business premises of this company located at Schot- affiliated companies. The remaining 0.1% of the shares tenring 30, 1010 Vienna. belong to Wiener Städtische Wechselseitiger Versicherungs- verein – Vermögensverwaltung – Vienna Insurance Group, VIENNA INSURANCE GROUP AG Wiener Versicherung Vienna. Gruppe, Vienna, prepares consolidated financial statements for a small number of companies. These consolidated finan- Wiener Städtische Wechselseitiger Versicherungsverein – cial statements have been disclosed and are available for Vermögensverwaltung – Vienna Insurance Group, Vienna, inspection at the business premises of this company located prepares consolidated financial statements that include at Schottenring 30, 1010 Vienna.

The Managing Board:

Robert Lasshofer

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Christine Dornaus Judit Havasi

Ralph Müller Erich Leiß

Vienna, 9 March 2012

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HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

AUDITOR'S REPORT Auditor’s responsibility and description of type and scope of the statutory audit REPORT ON THE ANNUAL FINANCIAL STATEMENTS Our responsibility is to express an opinion on these annual financial statements based on our audit. We conducted our We have audited the accompanying annual financial state- audit in accordance with the statutory requirements applica- ments, including the accounting, of WIENER STÄDTISCHE ble in Austria and Austrian generally accepted principles for VERSICHERUNG AG Vienna Insurance Group, Vienna, for the financial statement auditing. Those standards require that we financial year from 1 January to 31 December 2011. These comply with professional guidelines and plan and perform annual financial statements comprise the balance sheet as of the audit to obtain reasonable assurance that the financial 31 December 2011, the income statement for the financial statements are free from material misstatement. year ended 31 December 2011, and the notes to the finan- cial statements. An audit involves performing audit procedures to obtain audit evidence about the amounts and disclosures in the annual Management’s responsibility for the annual financial financial statements. The choice of audit procedures is within statements and the accounting the auditor’s discretion, based on an assessment of the risk The management of the Company is responsible for the ac- of material misstatements, whether due to fraud or uninten- counting and for the preparation of annual financial state- tional error. The auditor takes the internal control system into ments giving a true and fair view of the Company's net assets, account when performing this risk assessment, to the extent financial position and results of operation in accordance with it is relevant to the preparation of annual financial statements the requirement of Austrian corporate and insurance super- that give a true and fair view of the Company's net assets, visory law. This responsibility includes: designing, implement- financial position and results of operations, in order to deter- ing and maintaining an internal control system for the pur- mine audit procedures that are suitable under the circum- pose of preparing annual financial statements that give a true stances, but not for the purpose of expressing an opinion on and fair view of the Company's net assets, financial position the effectiveness of the Company’s internal control system. and results of operation and are free from material misstate- An audit also includes an assessment of the appropriateness ments, whether due to fraud or unintentional error; selecting of the accounting policies used and the accounting estimates D and applying appropriate accounting policies; making esti- made by management, and an evaluation of the overall pres- mates that are reasonable in the circumstances given. entation of the annual financial statements.

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We believe that we have obtained sufficient and suitable COMMENTS ON THE MANAGEMENT REPORT audit evidence to provide a reasonable basis for our audit opinion. The management report is to be audited based on the statu- tory requirements to determine whether it is consistent with Opinion the annual financial statements and whether the other dis- Our audit did not give rise to any objections. In our opinion, closures in the management report are misleading with re- based on the findings of our audit, the annual financial spect to the situation of the Company. The auditor’s report statements comply with the statutory requirements and give must also include a statement as to whether the manage- a true and fair view of the Company's net assets and financial ment report is consistent with the annual financial state- position as of 31 December 2011 and the Company's results ments. of operations for the financial year from 1 January to 31 De- cember 2011 in accordance with Austrian generally ac- In our opinion, the management report is consistent with the cepted accounting principles. annual financial statements.

Vienna, 9 March 2012

PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

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signed: signed:

Günter Wiltschek Liane Hirner Austrian Certified Public Accountant Austrian Certified Public Accountant

Disclosure, publication and reproduction of the annual financial statements together with the auditor’s report within the mean- ing of § 281(2) UGB in a form that is not in accordance with statutory requirements and differing from the version audited by us is not permitted. Reference to our audit may not be made without out prior written permission.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

DECLARATION BY THE MANAGING BOARD

We declare to the best of our knowledge that the annual financial statements of WIENER STÄDTISCHE Versicherung AG Vienna Insurance Group, prepared in accordance with the requirements of Austrian corporate law and the Austrian Insurance Super- vision Act, give a true and fair view of the Company’s net assets, financial position and results of operations, the management report presents the business development, performance and position of the Company so as to give a true and fair view of its net assets, financial position and results of operations, and the management report provides a description of the principal risks and uncertainties to which the Company is exposed.

The Managing Board:

Robert Lasshofer

D

107

Christine Dornaus Judit Havasi

Ralph Müller Erich Leiß

Vienna, 9 March 2012

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

SUPERVISORY BOARD REPORT By inspection of appropriate documents, meetings with the Managing Board and discussions with the auditor, the Super- The Supervisory Board reports that it has taken the opportu- visory Board Audit Committee was able to form a satisfactory nity to comprehensively review the management of the Com- view of the accounting process and found no reasons for pany, both acting as a whole and also regularly through its objection. committees, Chairman and Deputy Chairman. Detailed pres- entations and discussions during meetings of the Supervisory The Audit Committee also reviewed the effectiveness of the Board and its committees served this purpose, as did recur- internal control system, the internal auditing system and the ring meetings with the members of the Managing Board, who risk management system by requesting descriptions of the provided detailed explanations and supporting documenta- processes and organisation of these systems from the Man- tion relating to the management and financial position of the aging Board, the auditor and the individuals directly respon- Company. The strategy, business development, risk man- sible for these areas. The Audit Committee reported on these agement, internal control system and activities of the internal monitoring activities to the Supervisory Board and stated that audit department of the Company were also discussed in no deficiencies had been identified. these meetings. In order to prepare the Supervisory Board’s proposal for The Supervisory Board has formed four committees from selection of the auditor for the annual financial statements, among its members. Information on the responsibilities and the Audit Committee requested that PwC INTER-TREUHAND composition of these committees is available on the Com- GmbH Wirtschaftsprüfungs- und Steuerberatungsgesell- pany’s website and in the corporate governance report. schaft submit documents concerning its license to audit. A written report was prepared stating that there were no One Annual General Meeting, one extraordinary General grounds for exclusion or circumstances that could provide Meeting and four Supervisory Board meetings were held in cause for concern regarding partiality. In addition, a list of 2011. Three meetings of the Audit Committee were also held. services grouped by category showing the total revenues that The Committee for Urgent Matters held no meetings in 2011 PwC received from the Company in the previous financial D but was contacted in writing with regard to three matters. The year was requested and reviewed, and it was verified that Supervisory Board was informed of any resolutions passed by PwC was included in a statutory quality assurance system. the committees at the next Supervisory Board meeting. The The Audit Committee reported to the Supervisory Board on auditor, PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- the findings gained from these investigations and proposed 108 und Steuerberatungsgesellschaft (PwC), attended three to the Supervisory Board and subsequently to the General Audit Committee meetings and one Supervisory Board meet- Meeting that PwC INTER-TREUHAND GmbH ing, namely the meeting dealing with the auditing and formal Wirtschaftsprüfungs- und Steuerberatungsgesellschaft be approval of the annual financial statements, as well as the selected as auditor for the annual financial statements. Annual General Meeting. In addition, one meeting of the Committee for Managing Board Matters was also held in In addition, the Supervisory Board Audit Committee received 2011. the 2011 annual financial statements and management report from the Managing Board, and reviewed and carefully No agenda items were discussed in the Supervisory Board examined them. The Managing Board’s proposal for appro- and committee meetings without the participation of mem- priation of profits was also debated and discussed during the bers of the Managing Board. No member of the Supervisory course of this examination. As a result of this examination Board attended fewer than half of the Supervisory Board and discussion, a unanimous resolution was adopted to rec- meetings. ommend to the Supervisory Board that they be accepted without qualification. The committee chairman informed the Supervisory Board of the resolutions adopted by the commit- tee.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

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The 2011 annual financial statements and management After a thorough examination, the Supervisory Board there- report, and the Managing Board's proposal for appropriation fore unanimously adopted a resolution to approve the annual of profits were then taken up, thoroughly discussed, and financial statements prepared by the Managing Board, to examined by the Supervisory Board. In addition, the auditor’s raise no objections to the management report, and to declare reports prepared by PwC INTER-TREUHAND GmbH its agreement with the Managing Board proposal for appro- Wirtschaftsprüfungs- und Steuerberatungsgesellschaft for priation of profits. the 2011 annual financial statements and 2011 manage- ment report were reviewed by the Audit Committee and the The 2011 annual financial statements have therefore been Supervisory Board, and debated and discussed in detail with approved in accordance with § 96(4) of the Austrian Stock PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Corporation Act. Steuerberatungsgesellschaft. The final findings of the audit provided no reason for objections. The Supervisory Board declared that it had nothing to add to the auditor's reports.

The Supervisory Board proposes to the General Meeting that it approve the Managing Board proposal for appropriation of profits and formally approve the actions of the Managing Board and Supervisory Board.

Vienna, March 2012

The Supervisory Board

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Günter Geyer

(Chairman)

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

STATE ADVISORY BOARDS Dietmar Steinbrenner Karl Th. Trojan The advisory boards for the federal states of Austria provided Johann Trost jun. for in the Articles of Association to advise the Managing Wolfgang Wiedermann Board have the following members: Gerhard Zinner

STATE ADVISORY BOARD FOR VIENNA STATE ADVISORY BOARD FOR UPPER AUSTRIA

Martin Bachlechner Othmar Bruckmüller Peter Bosek Herbert Brunsteiner Ilse Brandner-Radinger Robert Ebner Ismail H. Ergener Othmar Friedl Michael Hafner Alois Froschauer René Alfons Haiden Peter Glatzmeier Peter Hanke Manfred Haimbucher Brigitte Jank Peter Halatschek Helmut Jonas Norbert Haudum Hans Judmann Heinz Hillinger Willibald Keusch Manfred Hochhauser Michael Landau Hermann Kepplinger Michael Ludwig Anette Klinger Sigi Menz Richard Kirchweger Walter Nettig Markus Limberger Ernst Nonhoff Johann Mayr Carl Ludwig Richard Josef Peischer D Michael Schottenberg Ludwig Scharinger Günter Wandl Adolf Scheuchenpflug Udo Weinberger Wolfgang Schneckenreither Wilhelm Wohatschek Ernst Strauss 110 Gerda Weichsler-Hauer STATE ADVISORY BOARD FOR LOWER AUSTRIA STATE ADVISORY BOARD FOR STYRIA Christian Aichinger Gertrude Baumgartner Wolfgang Bartosch Rupert Dworak Herbert Beiglböck Burkhard Ellegast Gerhard Deutsch Wilhelm Gelb Gerhard Fabisch Helmut Guth Horst Hilmer Berthold Heigl Andrea Hirschenberger Herwig Hofstätter Karl-Franz Maier Karl Jurtschitsch Ernst Meixner Herbert Kaufmann Wolfgang Messner Herbert Klenk Paul Nussbaumer Hans Knoll Hermann Retter Otto Korten Ulrike Retter Werner Magyer Bernhard Rosenberger Josef Panis Wolfram Sacherer Elisabeth Schubrig Alois Samer Matthias Stadler Horst Schachner

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Christoph Stark STATE ADVISORY BOARD FOR TYROL Gerald Stoiser Josef Wallner Martin Baltes Manfred Wegscheider Christian Bernard Manfried Gantner STATE ADVISORY BOARD FOR CARINTHIA AND EAST Hannes Gschwentner TYROL Markus Jochum Walter Kircher Ingo Appé Hansjörg Mölk Helmut Eder Hermann Nagiller Hermann Egger Jakob Ringler Horst Felsner Elmar Schmid Günter Goach Harald Schneider Reinhard Iro Karl Schranz Rudolf Kandussi Raimund Schreier Franz Kreuzer Hans Unterdorfer Johann Lintner Elisabeth Zanon Franz Liposchek Helmut Manzenreiter STATE ADVISORY BOARD FOR VORARLBERG Claudia Mischensky Hans Michael Offner Wilfried Berchtold Anton Peternel Werner Böhler Herwig Rettenbacher Michael Diem Hans Schönegger Horst Fritz Oskar Seidler Jürgen Gabrieli Arno Sorger Werner Gunz D Andrea Springer Guntram Jäger Michael Stattmann Edgar Mayer Peter Mennel STATE ADVISORY BOARD FOR SALZBURG Wilhelm Muzyczyn 111 Ewald Netzer Wolfgang Bell Peter Oksakowski Franz Blum Kuno Riedmann August Hirschbichler Anton Steinberger Hildegund Maier Walter Thöny Alois Johann Nindl Regina Ovesny-Straka STATE ADVISORY BOARD FOR BURGENLAND Ferdinand Saller Günter Schied Mario De Martin De Gobbo Harald Seiss Hannes Frech Christian Stöckl Michael Gerbavsits Josef Treml Oswald Hackl Erich Horvath Christian Illedits

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Michael Koch Helmut Löffler Hans Niessl Frank Pfnier Matthias Reiner Ingrid Salamon Nikolaus Sauer Ernst Schmid Johann Schmidt Peter Schmitl Rudolf Simandl Gerhard Steier Georg Stiegelmar Csaba Szekely Robert Tauber Josef Wein

ADVISORY BOARD FOR FUNERAL INSURANCE

The advisory board provided for in the Articles of Association to advise the Managing Board on funeral matters and funeral insurance has the following members:

Walter Egger Christian Fertinger D Wilhelm Fuchs Peter Kotzbauer Othmar Lechner Hansjörg Lein 112 Peter Marent Ulrich Mayerhofer Franz Nechansky Gerfried Redlich Wolfgang Saiko Peter Schlaffer Eduard Schreiner Mario Wagenhuber Karl Wagner Gregor Zaki

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STATE HEAD OFFICES STATE HEAD OFFICE FOR TYROL

STATE HEAD OFFICE FOR VIENNA 6020 Innsbruck, Südtiroler Platz 4 Phone: +43 (0) 50 350-46000 1020 Vienna, Obere Donaustrasse 49-53 Fax: +43 (0) 50 350 99-46000 Phone: +43 (0) 50 350-40000 Email: [email protected] Fax: +43 (0) 50 350 99-40000 Ida Wander, State Director Email: [email protected] Hermann Fried, State Director STATE HEAD OFFICE FOR VORARLBERG

STATE HEAD OFFICE FOR LOWER AUSTRIA 6800 Feldkirch, Waldfriedgasse 2 Phone: +43 (0) 50 350-47000 3100 St. Pölten, Europaplatz 2 Fax: +43 (0) 50 350 99-47000 Phone: +43 (0) 50 350-41000 Email: [email protected] Fax: +43 (0) 50 350 99-41000 Burkhard Berchtel, State Director Email: [email protected] Helmut Maurer, State Director STATE HEAD OFFICE FOR BURGENLAND

STATE HEAD OFFICE FOR UPPER AUSTRIA 7000 Eisenstadt, Kalvarienbergplatz 7 Phone: +43 (0) 50 350-48000 4020 Linz, Untere Donaulände 40 Fax: +43 (0) 50 350 99-48000 Phone: +43 (0) 50 350-42000 Email: [email protected] Fax: +43 (0) 50 350 99-42000 Gerold Stagl, State Director Email: [email protected] Günther Erhartmaier, State Director BRANCH OFFICES D STATE HEAD OFFICE FOR STYRIA ITALY

8010 Graz, Brockmanngasse 32 Wiener Städtische Versicherung AG Phone: +43 (0) 50 350-43000 Vienna Insurance Group 113 Fax: +43 (0) 50 350 99-43000 I-00147 Rome Email: [email protected] Via Cristoforo Colombo 149 Gerald Krainer, State Director Phone: +39 (0) 6 510 70 11 Email: [email protected] STATE HEAD OFFICE FOR CARINTHIA AND EAST TYROL Website: www.wieneritalia.com Gernot Isak, Managing Director 9020 Klagenfurt, St. Veiter-Ring 13 Paolo Masci, Managing Director Phone: +43 (0) 50 350-44000 Fax: +43 (0) 50 350 99-44000 SLOVENIA Email: [email protected] Erich Obertautsch, State Director Wiener Städtische zavarovalnica podružnica SI-1000 Ljubljana STATE HEAD OFFICE FOR SALZBURG Masarykova 14 Phone: +386 (0) 1 300 17 00 5020 Salzburg, Max-Ott-Platz 3 Email: [email protected] Phone: +43 (0) 50 350-45000 Website: www.wienerstaedtische.si Fax: +43 (0) 50 350 99-45000 Tomo Mrden, Managing Director Email: [email protected] Thomas Schmidtmeier, Managing Director Hans Vierziger, State Director

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

CONTACTS AND ADDRESSES ENTERPRISE RISK MANAGEMENT

LIFE/HEALTH ACTUARIAL DEPARTMENT Alexander Schuh Phone: +43 (0) 50 350-21450 Josef Hiller Fax: +43 (0) 50 350 99-21450 Phone: +43 (0) 50 350-21721 Email: [email protected] Fax: +43 (0) 50 350 99-21721 Email: [email protected] FINANCE AND ACCOUNTING

PROPERTY/CASUALTY ACTUARIAL DEPARTMENT Hans Meixner Phone: +43 (0) 50 350-21810 Michael Schlögl Fax: +43 (0) 50 350 99-21810 Phone: +43 (0) 50 350-21530 Email: [email protected] Fax: +43 (0) 50 350 99-21530 Email: [email protected] CORPORATE AND LARGE CUSTOMER BUSINESS

ALTERNATIVE DISTRIBUTION Underwriting Wolfgang Petschko Gerhard Heine Phone: +43 (0) 50 350-21406 Phone: +43 (0) 50 350-22840 Fax: +43 (0) 50 350 99-21406 Fax: +43 (0) 50 350 99-22840 Email: [email protected] Email: [email protected] Claims PARTICIPATION MANAGEMENT AND LOANS Josef Aigner Phone: +43 (0) 50 350-26112 D Christine Dornaus Fax: +43 (0) 50 350 99-26112 Phone: +43 (0) 50 350-21126 Email: [email protected] Fax: +43 (0) 50 350 99-21126 Email: [email protected] GENERAL SECRETARIAT 114 BUSINESS ORGANISATION Doris Janik Phone: +43 (0) 50 350-21059 Robert Redl Fax: +43 (0) 50 350 99-21059 Phone: +43 (0) 50 350-22193 Email: [email protected] Fax: +43 (0) 50 350 99-22193 Email: [email protected] COMPANY LAW

CONTROLLING Helene Kanta Phone: +43 (0) 50 350-21122 Szabolcs Nagy Fax: +43 (0) 50 350 99-21122 Phone: +43 (0) 50 350-21056 Email: [email protected] Fax: +43 (0) 50 350 99-21056 Email: [email protected] IT MANAGEMENT AND PROVIDER MANAGEMENT

Klaus Krebs Phone: +43 (0) 50 330-22106 Fax: +43 (0) 50 330 99-22106 Email: [email protected]

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MOTOR VEHICLE INSURANCE (UNDERWRITING) COMMUNICATIONS / INTERNAL COMMUNICATIONS

Michael Schlögl Claudia Riebler Phone: +43 (0) 50 350-21530 Phone: +43 (0) 50 350-21336 Fax: +43 (0) 50 350 99-21530 Fax: +43 (0) 50 350 99-21336 Email: [email protected] Email: [email protected]

HEALTH INSURANCE LEGAL EXPENSES INSURANCE (CLAIMS)

Peter Kranz Günther Bauer Phone: +43 (0) 50 350-21610 Phone: +43 (0) 50 350-21587 Fax: +43 (0)50 350 99-21610 Fax: +43 (0) 50 350 99-21587 Email: [email protected] Email: [email protected]

LIFE AND CASUALTY INSURANCE AUDIT

Mathias Frisch Herbert Allram Phone: +43 (0) 50 350-21600 Phone: +43 (0) 50 350-21070 Fax: +43 (0) 50 350 99-21600 Fax: +43 (0) 50 350 99-21070 Email: [email protected] Email: [email protected]

REAL ESTATE AND REAL ESTATE-RELATED REINSURANCE PARTICIPATIONS Eduard Oberleithner Anton-Leonhard Werner Phone: +43 (0) 50 350-21474 Phone: +43 (0) 50 350-21050 Fax: +43 (0) 50 350 99-21474 D Fax: +43 (0) 50 350 99-21050 Email: [email protected] Email: [email protected] NON-LIFE, GENERAL LIABILITY AND LEGAL EXPENSES OMBUDSPERSON INSURANCE – PRIVATE AND COMMERCIAL BUSINESS 115 (UNDERWRITING) Julia Christanell Phone: +43 (0) 50 350-21088 Robert Ulbing Fax: +43 (0) 50 350 99-21088 Phone: +43 (0) 50 350-21421 Email: [email protected] Fax: +43 (0) 50 350 99-21421 Email: [email protected] HUMAN RESOURCES / HUMAN RESOURCES DEVELOPMENT COLLECTIONS SERVICE CENTRE

Robert Bilek Andreas Weninger Phone: +43 (0) 50 350-21300 Phone: +43 (0) 50 350-21817 Fax: +43 (0) 50 350 99-21300 Fax: +43 (0 )50 350 99-21817 Email: [email protected] Email: [email protected]

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

PERSONAL INSURANCE SERVICE CENTRE

Sabine Pfeffer Phone: +43 (0)50 350 21313 Fax: +43 (0)50 350 99-21313 Email: [email protected]

PROPERTY INSURANCE SERVICE CENTRE

Annemarie Ulbing Phone: +43 (0) 50 350-27500 Fax: +43 (0) 50 350 99-27500 Email: [email protected]

SPECIAL CLAIMS

Wolfgang Reisinger Phone: +43 (0) 50 350-21500 Fax: +43 (0) 50 350 99-21500 Email: [email protected]

DISTRIBUTION

Walter Wichtel Phone: +43 (0) 50 35022530 D Fax: +43 (0) 50 350 99-22530 Email: [email protected]

ADVERTISING / SPONSORING 116 Sabine Weiss Phone: +43 (0) 50 350-21194 Fax: +43 (0) 50 350 99-21194 Email: [email protected]

SECURITIES AND FUNDS

Reza Kazemi Tabrizi Phone: +43 (0) 50 100-75473 Fax: +43 (0) 50 100-975473 Email: [email protected]

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BUSINESS OFFICES

Wiener Städtische is available throughout Austria for the cost of a local call 24 hours a day, 7 days a week.

Phone +43 (0) 50 350 (direct line), Fax: +43 (0) 50 350 99 (direct line)

Offices with motor vehicle registration

VIENNA Liesing Bruck/Leitha Direct dial 51700 Direct dial 52900 Headquarters Breitenfurter Strasse 393 Fischamender Strasse 54 Direct dial 20000 1230 Vienna 2460 Bruck/Leitha Schottenring 30 [email protected] [email protected] 1010 Vienna [email protected] Ottakring Gänserndorf Direct dial 51100 Direct dial 52500 State Head Office for Vienna Thaliastrasse 44 Bahnstrasse 15 Direct dial 40000 1160 Vienna 2230 Gänserndorf Obere Donaustrasse 49-53 [email protected] [email protected] 1020 Vienna [email protected] LOWER AUSTRIA Gföhl Direct dial 64300 Customer retirement provisions office State Head Office Lower Austria Hauptplatz 1 Direct dial 22380 Direct dial 41000 3542 Gföhl Zelinkagasse 14 Europaplatz 2 [email protected] 1010 Vienna 3100 St. Pölten D [email protected] [email protected] Gmünd

Direct dial 54900 Donaustadt Amstetten Stadtplatz 17 117 Direct dial 51400 Direct dial 53900 3950 Gmünd Bernoullistrasse 1 Waidhofner Strasse 31 [email protected] 1220 Vienna 3300 Amstetten [email protected] [email protected] Groß Enzersdorf Direct dial 52600 Floridsdorf Aspang Bischof Berthold-Platz 4 Direct dial 51300 Direct dial 53400 2301 Groß Enzersdorf Am Spitz 10 Mönichkirchner Strasse 3 [email protected] 1210 Vienna 2870 Aspang [email protected] [email protected] Herzogenburg Direct dial 53600 Landstraße Baden St. Pöltner Strasse 11 Direct dial 50800 Direct dial 53000 3130 Herzogenburg Rochusgasse 3-5 Bahngasse 9 [email protected] 1030 Vienna 2500 Baden [email protected] [email protected]

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Hollabrunn Mistelbach Stockerau Direct dial 51900 Direct dial 52200 Direct dial 51800 Bahnstrasse 12 Ernstbrunnerstrasse 8 Hauptstrasse 4 2020 Hollabrunn 2130 Mistelbach 2000 Stockerau [email protected] [email protected] [email protected]

Horn Mödling Ternitz Direct dial 54600 Direct dial 52800 Direct dial 53200 Schützenplatz 2 Klostergasse 14 Hans Czettel-Platz 1 3580 Horn 2340 Mödling 2630 Ternitz [email protected] [email protected] [email protected]

Klosterneuburg Neulengbach Tulln Direct dial 54200 Direct dial 53500 Direct dial 54400 Am Renninger 2 Hauptplatz 27 Königstetter Strasse 60 3400 Klosterneuburg 3040 Neulengbach 3430 Tulln [email protected] [email protected] [email protected]

Korneuburg Neunkirchen Waidhofen/Thaya Direct dial 52100 Direct dial 53100 Direct dial 54700 Wiener Ring 16 Schwarzottstrasse 2a Bahnhofstrasse 8 2100 Korneuburg 2620 Neunkirchen 3830 Waidhofen/Thaya [email protected] [email protected] [email protected]

Krems Poysdorf Waidhofen/Ybbs D Direct dial 54500 Direct dial 52400 Direct dial 54000 Ringstrasse 11 Brunngasse 4 Riedmüllerstrasse 3a/1 3500 Krems 2170 Poysdorf 3340 Waidhofen/Ybbs [email protected] [email protected] [email protected] 118 Laa/Thaya Retz Wolkersdorf Direct dial 52300 Direct dial 52000 Direct dial 65100 Stadtplatz 38 Hauptplatz 21 Wiener Strasse 1 2136 Laa/Thaya 2070 Retz 2120 Wolkersdorf [email protected] [email protected] [email protected]

Lilienfeld Scheibbs Wr. Neustadt Direct dial 53700 Direct dial 53800 Direct dial 53300 Babenbergerstrasse 36 Rathausplatz 11 Ferdinand Porsche-Ring 2 3180 Lilienfeld 3270 Scheibbs 2700 Wr. Neustadt [email protected] [email protected] [email protected]

Melk Schwechat Zistersdorf Direct dial 54100 Direct dial 52700 Direct dial 65500 Hauptstrasse 9 Wiener Strasse 9 Schlossgasse 2 3390 Melk 2320 Schwechat 2225 Zistersdorf [email protected] [email protected] [email protected]

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Zwettl [email protected] Ried/lnnkreis Direct dial 54800 en Direct dial 57200 Neuer Markt 13 Direct dial 56600 Thurnerstrasse 16 3910 Zwettl Roßmarkt 30 4910 Ried/lnnkreis [email protected] 4710 Grieskirchen [email protected] [email protected] UPPER AUSTRIA Rohrbach Kirchdorf/Krems Direct dial 55600 Head Office for Upper Austria Direct dial 56200 Pfarrgasse 4 Direct dial 42000 Linzer Strasse 2 4150 Rohrbach Untere Donaulände 40 4560 Kirchdorf/Krems [email protected] 4020 Linz [email protected] [email protected] Schärding Kremsmünster Direct dial 56700 Bad Ischl Direct dial 56100 Linzer Strasse 29 Direct dial 56900 Rathausplatz 9 4780 Schärding Karl Wiesinger-Strasse 2 4550 Kremsmünster [email protected] 4820 Bad Ischl [email protected] [email protected] Scharnstein Leonding Direct dial 56400 Bad Leonfelden Direct dial 55400 Hauptstrasse 22 Direct dial 65200 Michaelsbergstrasse 5 4644 Scharnstein Böhmerstrasse 7 4060 Leonding [email protected] 4190 Bad Leonfelden [email protected] [email protected] Schörfling Linz, Kleinmünchen Direct dial 57100 D Braunau/lnn Direct dial 55100 Hauptstrasse 7b/Top 3 Direct dial 57300 Zeppelinstrasse 4 4861 Schörfling Ringstrasse 47 4032 Linz, Kleinmünchen [email protected] 5280 Braunau/lnn [email protected] 119 [email protected] Steyr Linz, Urfahr Direct dial 55900 Eferding Direct dial 55200 Leopold-Werndl-Strasse 10a Direct dial 55500 Freistädter Strasse 16 4400 Steyr Bahnhofstrasse 19 4040 Linz, Urfahr [email protected] 4070 Eferding [email protected] [email protected] Traun Mondsee Direct dial 55300 Freistadt Direct dial 61100 Kremstalerstrasse 20 Direct dial 55700 Herzog-Odilostrasse 14 4050 Traun Zemannstrasse 25 5310 Mondsee [email protected] 4240 Freistadt [email protected] [email protected] Vöcklabruck Perg Direct dial 57000 Gmunden Direct dial 55800 Linzerstrasse 61 Direct dial 56800 Dr. Schober-Strasse 25 4840 Vöcklabruck Schiffslände 1 4320 Perg [email protected] 4810 Gmunden [email protected]

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Wels Fürstenfeld Judenburg Direct dial 56300 Direct dial 58100 Direct dial 59400 Bauernstrasse 9 Realschulstrasse 2a Jägersteig 2 4600 Wels 8280 Fürstenfeld 8750 Judenburg [email protected] [email protected] [email protected]

Windischgarsten Gleisdorf Kapfenberg Direct dial 65700 Direct dial 57900 Direct dial 58900 Gleinkerseestrasse 1 Businesspark 4 Mariazellerstrasse 1 4580 Windischgarsten 8200 Gleisdorf 8605 Kapfenberg [email protected] [email protected] [email protected]

STYRIA Gratkorn Knittelfeld Direct dial 57700 Direct dial 59300 State Head Office for Styria Grazer Strasse 50 Hauptplatz 15 Direct dial 43000 8101 Gratkorn 8720 Knittelfeld Brockmanngasse 32 [email protected] [email protected] 8010 Graz [email protected] Graz, Andritz Leibnitz Direct dial 65400 Direct dial 58400 Bad Aussee Andritzer Reichstrasse 26 Bahnhofstrasse 9 Direct dial 59900 8045 Graz 8430 Leibnitz Kirchengasse 31 [email protected] [email protected] 8990 Bad Aussee [email protected] Graz, Elisabethstrasse Leoben D Direct dial 66200 Direct dial 59200 Bad Radkersburg Elisabethstrasse 59 Franz Josef-Strasse 1 Direct dial 58500 8010 Graz 8700 Leoben Emmenstrasse 21-27 [email protected] [email protected] 120 8490 Bad Radkersburg [email protected] Graz, Seiersberg Liezen Direct dial 057600 Direct dial 59700 Bruck/Mur Kärnterstrasse 525-527 Werkstrasse 30 Direct dial 58800 8054 Seiersberg 8940 Liezen Mittergasse 4 [email protected] [email protected] 8600 Bruck/Mur [email protected] Gröbming Murau Direct dial 59800 Direct dial 59600 Deutschlandsberg Poststrasse 336 Anna-Neumann-Strasse 9 Direct dial 58600 8962 Gröbming 8850 Murau Frauentalerstrasse 44 [email protected] [email protected] 8530 Deutschlandsberg [email protected] Hartberg Mürzzuschlag Direct dial 58000 Direct dial 59100 Feldbach Ressavarstrasse 12-14 Kirchengasse 10 Direct dial 58200 8230 Hartberg 8680 Mürzzuschlag Bismarckstrasse 16 [email protected] [email protected] 8330 Feldbach [email protected]

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Voitsberg Villach Bischofshofen Direct dial 58700 Direct dial 60400 Direct dial 61400 Hauptplatz 1 Moritschstrasse 5 Franz-Mohshammer-Platz 14 8570 Voitsberg 9500 Villach 5500 Bischofshofen [email protected] [email protected] [email protected]

Weiz Völkermarkt Hallein Direct dial 57800 Direct dial 60000 Direct dial 61200 Marburgerstrasse 47 Klagenfurter Strasse 12 Bürgermeisterstrasse 13 8160 Weiz 9100 Völkermarkt 5400 Hallein [email protected] [email protected] [email protected]

CARINTHIA Wolfsberg Mattighofen (Upper Austria) Direct dial 60300 Direct dial 61000 State Head Office for Carinthia Wiener Strasse 5 Stadtplatz 18 Direct dial 44000 9400 Wolfsberg 5230 Mattighofen St. Veiter-Ring 13 [email protected] [email protected] 9010 Klagenfurt [email protected] EAST TYROL Saalfelden Direct dial 61900 Feldkirchen Lienz Bahnhofstrasse 12/Top4 Direct dial 60500 Direct dial 60800 5760 Saalfelden Dr.-Arthur-Lemisch-Strasse 1 Andreas-Hofer-Strasse 1a [email protected] 9560 Feldkirchen 9900 Lienz [email protected] [email protected] Salzburg, Lasserstrasse Direct dial 60900 D Ferlach SALZBURG Lasserstrasse 32 Direct dial 60100 5020 Salzburg Hauptplatz 5 State Head Office for Salzburg [email protected] 9170 Ferlach Direct dial 45000 121 [email protected] Max-Ott-Platz 3 Seekirchen 5020 Salzburg Direct dial 65300 Hermagor [email protected] Bahnhofstrasse 5 Direct dial 60600 5201 Seekirchen Hauptstrasse 33 Abtenau [email protected] 9620 Hermagor Direct dial 61300 [email protected] Au 87 St. Johann/Pongau 5441 Abtenau Direct dial 61600 Spittal/Drau [email protected] Hans Kappacherstrasse 1 Direct dial 60700 5600 St. Johann/Pongau Bahnhofstrasse 2 Bad Gastein [email protected] 9800 Spittal/Drau Direct dial 61700 [email protected] Bahnhofsplatz 7 Tamsweg 5640 Bad Gastein Direct dial 61500 St. Veit/Glan [email protected] Kirchengasse 13 Direct dial 60200 5580 Tamsweg Platz am Graben 3 [email protected] 9300 St. Veit/Glan [email protected]

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Zell am See Wörgl Jennersdorf Direct dial 61800 Direct dial 62200 Direct dial 64000 Brucker Bundesstrasse 67 Steinbacherstrasse 1 Eisenstädter Strasse 1 5700 Zell am See 6300 Wörgl 8380 Jennersdorf [email protected] wö[email protected] [email protected]

TYROL VORARLBERG Mattersburg Direct dial 63600 State Head Office for Tyrol State Head Office for Vorarlberg Schubertstrasse 42 Direct dial 46000 Direct dial 47000 7210 Mattersburg Dr. Carl Pfeiffenbergerstrasse 14 Waldfriedgasse 2 [email protected] 6020 Innsbruck 6800 Feldkirch [email protected] [email protected] Neusiedl/See Direct dial 63500 Imst Bludenz Altenburgerstrasse 20/Top 1 Direct dial 62700 Direct dial 63000 7100 Neusiedl/See Pfarrgasse 32 Färberstrasse 10 [email protected] 6460 Imst 6700 Bludenz [email protected] [email protected] Oberpullendorf Direct dial 63700 Kufstein Bregenz Hauptstrasse 22 Direct dial 62300 Direct dial 63400 7350 Oberpullendorf Arkadenplatz 6 Rheinstrasse 42 [email protected] 6330 Kufstein 6900 Bregenz [email protected] [email protected] Oberwart D Direct dial 63800 Landeck Dornbirn Waldmüllergasse 6 Direct dial 62800 Direct dial 63200 7400 Oberwart Malser Strasse 19 Schwefel 91 [email protected] 122 6500 Landeck 6850 Dornbirn [email protected] [email protected]

Reutte BURGENLAND Direct dial 62900 Mühlerstrasse 19 State Head Office for Burgenland 6600 Reutte [email protected] Direct dial 48000 Kalvarienbergplatz 7 Schwaz 7000 Eisenstadt Direct dial 62100 [email protected] Swarovskistrasse 25a 6130 Schwaz Güssing [email protected] Direct dial 63900 Hauptplatz 10 Telfs 7540 Güssing Direct dial 62600 [email protected] Anton Auer Str. 5 6410 Telfs [email protected]

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

GLOSSARY Result from ordinary activities Result from ordinary activities Sum of the the underwriting Ceded reinsurance premiums result, financial result and other non-actuarial income and Share of the premiums to which the reinsurer is entitled in expenses before tax expense. return for reinsuring certain risks. Equity Net earned premiums Consists of share capital and reserves. The portion of premiums written that is allocated to the cur- rent financial year. Single-premium policy Policy where the policyholder is obligated to make a single Administrative expenses lump-sum premium payment at the beginning of the term of Commissions, personnel expenses, cost of materials and the policy that covers the entire term of the policy. other expenses for distribution and administration of insur- ance policies. Financial result Investment and interest income less expenses. This includes, Expenses for claims and insurance benefits for example, income from securities, loans, real estate, par- Paid insurance benefits plus the change in provisions for ticipations, and bank interest, and expenses incurred in the losses that have already occurred, but are not yet processed, financial area, such as scheduled depreciation on owned plus the costs for claim settlement, loss investigation (e.g. real estate, write-downs of securities to stock exchange Fees for expert witnesses, legal fees) and loss prevention. prices, bank fees, etc.

Gross/net Financial Market Authority (FMA) In insurance terminology, “gross/net” means before or after See insurance supervisory authority. reinsurance has been deducted (“net” is also used to mean “for own account”). In connection with income from partici- Fund-linked life insurance pations, the term “net” is used when related expenses have In this special form of life insurance, the amount of the bene- D been deducted from income (e.g., depreciation, amortisation, fit payment depends on the performance of a portfolio of write-downs and disposal losses). This means that (net) assets in a fund. The policyholder bears the investment risk income from participations is the profit or loss on these and therefore has the opportunity to directly participate in shares. above-average performance of the fund, but must also take 123 into account the risk of losses. Combined ratio Ratio for assessing development of the property and casualty GBVVU insurance business. All actuarial expenses after deducting Financial Market Authority (FMA) regulation of 20 October reinsurers' shares, except for the change in the equalisation 2006 on profit participation in the life insurance industry provision, as a percentage of net earned premiums after (Gewinnbeteiligungs-Verordnung). deducting reinsurers' shares (=sum of net expense ratio and net claim ratio). Does not include any financial income. Profit participation See Premium refund (profit-related). Mathematical reserve A reserve calculated according to mathematical principles Retained earnings for future insurance benefits in the life and health insurance Retained earnings are profits earned by the Company that segments. In the health insurance segment, this is also re- are not distributed as dividends or carried forward to the ferred to as an ageing reserve. following year.

Direct business Indirect business Business acquired in-house, including coinsurance shares Assumed reinsurance business (inwards reinsurance). assumed, less surrendered coinsurance shares.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

Index-linked life insurance Premium refund (profit-unrelated) Life insurance where income depends upon the performance Contractual refund of premiums to the policyholder. of an underlying stock index. Unearned premiums Investments The portion of premium income that represents fees paid for Assets such as securities, loans, real estate and participa- the policy term following the balance sheet date, i.e. premi- tions that are primarily used to cover obligations arising from ums that have not yet been earned as of the balance sheet the insurance business. date. Unearned premiums are reported in the balance sheet under underwriting provisions. Consolidation The parent company combines its annual financial state- Annuity tables ments and those of its subsidiaries when preparing its con- Annuity tables are the most important calculation tool used solidated financial statements. During this process, equity in life and health insurance. The annuity tables used by in- holdings, interim results, receivables and payables, and surers are based on the mortality tables derived from the income and expenses within the Group are eliminated. population census. These are revised every ten years to take into account changing conditions, such as medical advances Group of consolidated companies and improved living conditions. Consists of the parent company and all subsidiaries included in the consolidated financial statements. Risks/risk Insured individuals, objects, hazards or interests Consolidated financial statements Annual financial statements prepared by the parent com- Reinsurance pany that present the net assets, financial position and re- Insurance coverage for insurance companies, whereby one sults of operations of the group. Also see Consolidation. insurance company uses another insurance company, the reinsurer, to insure a portion of its risk. D Expense ratio Ratio of administrative expenses to net earned premiums. Reinsurance company A company that will assume risks from a primary insurer or Market value another reinsurer (retrocession) for an agreed premium. 124 The value of a balance sheet item that can be realised by selling it in the market to a third party. Loss reserve Provision for outstanding claims (claims incurred but not yet Non-life settled or only partially settled). Non-life insurance includes the property & casualty and health insurance segments. Claim ratio Ratio of expenses for claims and insurance benefits to net Non-motor vehicle classes earned premiums. Non-motor vehicle classes are property & casualty classes that are not motor vehicle related. Equalisation provision The equalisation provision is an underwriting provision used Premium to smooth out fluctuations in future claims. It is built up in Agreed fee paid in exchange for assumption of risk by an years with below-average claims and used in years with insurance company. above-average claims.

Premium refund (profit-related) Secondary market yield The policyholder’s profit participation in the profit of the The secondary market yield is the average return on all fixed- insurance class in question (mandatory for traditional life interest securities in circulation with an agreed term of more insurance) than four years. The secondary market yield therefore re- flects level of capital market interest rates.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

HIGHLIGHTS & MANAGEMENT | COMPANY & STRATEGY | MANAGEMENT REPORT 2011 | ANNUAL FINANCIAL STATEMENTS 2011

Solvency Insurance benefits Solvency is the capital available to an insurance company See Expenses for claims and insurance benefits (free and unencumbered assets). It is governed by § 53c(1) VAG. VersVG The Austrian Insurance Contract Act (Versicherungsver- Incurred but not reported (IBNR) tragsgesetz), which governs general insurance contract law. Claims incurred in the current financial year but not reported until following years. Volatility Fluctuations in security prices, exchange rates, and interest Hidden reserve rates. A hidden reserve is created when the actual value (market value) of a balance sheet asset is higher than its carrying VVO amount, e.g. if the price of a security rises, but the security is The Austrian Insurance Association (Versicherungsverband not written up in the balance sheet. Österreich) is an umbrella association for Austrian insurance companies in the Austrian Federal Economic Chamber UGB (Wirtschaftskammer Österreich). Austrian Corporate Code (Unternehmensgesetzbuch)

VAG The Austrian Insurance Supervision Act (Versicherungsauf- sichtsgesetz) includes provisions governing the organisation and supervision of insurance companies.

Affiliated company A parent company and its subsidiaries are considered to be affiliated companies if the parent company is able to exert D control over the business policies of the subsidiary. Examples of this are where the parent company directly or indirectly holds more than half of all voting rights, a controlling agree- ment exists, or it is possible to appoint the majority of the 125 members of the managing board or other executive bodies of the subsidiary (§ 244 UGB).

Premiums written Policyholder premiums stipulated in the insurance policies, not including taxes, levies and fees.

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

Underwriting provisions These consist of the provision for outstanding claims (mathematical reserve), unearned premiums, provisions for profit-related and profit-unrelated premium refunds, the equalisation provision, and other underwriting provisions.

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

ADDRESS GENERAL INFORMATION

WIENER STÄDTISCHE Versicherung AG Editor and media owner Vienna Insurance Group WIENER STÄDTISCHE Versicherung AG Schottenring 30 Vienna Insurance Group 1010 Vienna Company register: 333376i Phone: +43 (0) 50 350 350 Data Processing Register No (DVR): 4001506 [email protected] www.wienerstaedtische.at Production & Design be.public Werbung Finanzkommunikation GmbH General Secretariat WIENER STÄDTISCHE Versicherung AG Produced in-house using FIRE.sys Vienna Insurance Group Michael Konrad GmbH Corporate Media Solutions Contact person: Doris Janik Photos Ian Ehm NOTICE Young & Rubicam Christian Hofer / Fernwärme This annual report includes forward-looking statements Wiener Städtische based on current assumptions and estimates that were made by the management of WIENER STÄDTISCHE Versi- Printing cherung AG Vienna Insurance Group to the best of its knowl- Gutenberg GmbH, Wiener Neustadt edge. Statements using the words “expectation”, “target” or similar formulations indicate such forward-looking state- Environmentally responsible paper: D ments. Forecasts related to the future development of the Forest Stewardship Council (FSC), from sustainably man- Company are estimates made on the basis of information aged forests was used. available as of the date this annual report went to press. Actual results may differ from the forecasts if the assump- 126 tions underlying the forecast prove to be wrong or if unex- pectedly high risks occur.

Rounding differences may occur when rounded amounts or percentages are added. 17PG001/AGE11

The annual report was prepared with great care to ensure that all information was complete and accurate. The possibil- ity of rounding, type-setting or printing errors can, however, not be ruled out completely.

Editorial deadline: 29 February 2012

ANNUAL REPORT 2011 | WIENER STÄDTISCHE

G icherung A s che Ver s Wiener Städti | eport 2011 R l a Annu

Foresight Showing Annual Report 2011 | Wiener Städtische Versicherung AG Annual Report 2011 | Wiener Städtische Versicherung AG shown. Foresight.