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ANNUAL REPORT 2003

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KEY FIGURES

in EUR million 1999 2000 2001 2002 2003

Gross earned premium income 1,341 1,450 1,498 1,615 1,773

Property and casualty insurance 593 621 639 725 791

Health insurance 237 244 253 264 272

Life insurance 512 585 605 626 710

Financial result 354 371 292 213 263

Profit on ordinary activities 31.61 19.67 19.98 20.25 30.55

Capital assets 6,103 6,447 6,676 6,961 7,339

Underwriting provisions 5,218 5,540 5,786 6,014 6,345

Equity capital 746 753 746 753 770

Workforce 4,030 3,927 3,776 3,720 3,754

Office staff 1,997 1,934 1,856 1,841 1,824

Sales force 2,033 1,993 1,920 1,879 1,930

KEY FIGURES FOR WIENER STÄDTISCHE AG (INDIVIDUAL FINANCIAL STATEMENT)

BULGARIA

AUSTRIA

GERMANY CZECH REPUBLIC

www.koop.sk

SLOVAK REPUBLIC BELARUS

LIECHTENSTEIN ITALY BRANCH OFFICE CROATIA

SERBIA & MONTENEGRO

www.interrisk.de www.koop.cz

www.kpas.sk

www.kontinuita.sk

HUNGARY

ROMANIA

www.kupala.by

www.unionbiztosito.hu

www.agras.biz

www.wuestenrot.at

www.union.at

www.s-versicherung.at

www.donauversicherung.at

www.wienerstaedtische.at

www.wiener.co.yu

www.kvarner-wiener-osig.comwww.wieneritalia.comE-Mail: [email protected] www.bulgarskiimoti.bg

www.unita.ro

POLAND

www.compensa.pl

www.ba-cav.at

ANNUAL REPORT 20032

WIENER STÄDTISCHE GROUP

ANNUAL REPORT 2003 3

CONTENTS

General Section

2 Wiener Städtische Group – Map4 Introduction6 Wiener Städtische AG – Managing Board8 The company’s executive bodies

10 Company chart11 Portrayal of the company12 Experta Schadenregulierung13 Environmental programme14 Preference share

Management report on the individualfinancial statement of Wiener Städtische AG

16 Economic environment20 Business development22 Financial result25 Personnel28 Advertising30 Sponsorship32 Risk Management34 Electronic data processing35 Property and casualty insurance38 Health insurance40 Life insurance43 Outlook for the financial year 200445 Proposal for distribution of profits

Wiener Städtische AG individual financial statement46 Balance sheet52 Income statement59 Annex68 Profit sharing71 Auditor’s certificate72 Report of the Supervisory Board

Management report on the consolidated financialstatements of Wiener Städtische AG

84 Wiener Städtische Group – Logo overview85 Wiener Städtische Group

Austria87 Wiener Städtische AG88 Donau Versicherung89 BA-CA Versicherung90 UNION Versicherung91 Wüstenrot Versicherung92 s Versicherung

Bulgaria93 Bulgarski Imoti

Germany94 InterRisk

Croatia95 Kvarner Wiener Städtische

Liechtenstein96 Vienna Life

Poland97 Compensa

Romania99 Unita

100 AgrasSerbia and Montenegro

101 Wiener Städtische BelgradSlovak Republic

102 Kooperativa Bratislava103 Komunálna104 Kontinuita

Czech Republic105 Kooperativa Prag

Hungary106 Union Biztosító

Belarus107 Kupala

108 Outlook for the financial year 2004110 Group contact addresses abroad

Wiener Städtische AGConsolidated Financial Statements

112 Balance sheet116 Income statement121 Notes to the consolidated accounts133 Overview of participations137 Auditor’s certificate

Concluding section

138 Provincial advisory councils140 People to contact142 Wiener Städtische’s provincial head offices 143 Glossary146 Investor Relations, General Information

CONTENTS.

ANNUAL REPORT 2003

Wiener Städtische’s results in the financial year 2003were shaped both in the domestic market and abroadby an excellent development of the premium income.Overall, the Wiener Städtische Group produced premi-um income amounting to approximately EUR 3.9 bil-lion in 2003 with a premium growth of approximately11%. In the process, Wiener Städtische has succeed-ed, on the one hand, in strengthening its position inthe Austrian insurance market through a growth thatwas markedly above the market and, on the otherhand, in increasing the premium growth of the insur-ance companies of the Wiener Städtische Group out-side Austria disproportionately by means of a consis-tent utilisation of the dynamic economic developmentin the neighbouring countries. The increasing contri-bution of the foreign insurance companies to the totalpremium income of the Wiener Städtische Group isreflected also in the passing of the one billion eurothreshold in premium income outside Austria.

As in the years before, the Czech and Slovak Kooper-ativa companies, which are the largest insurers in theirhome markets after the former state insurance compa-ny, were the most significant pillars of this expansion-ary development outside Austria.

After the years of major acquisitions, the main focusin 2003 was on the consolidation of the newlyacquired companies. After the merger of WienerStädtische’s two Polish life insurance companies,Vienna Life and Compensa Leben, the merger of thetwo Polish property insurance companies of theWiener Städtische Group, Heros and Compensa Sach,was carried out in the summer of 2003.

The most recent gains in the Wiener Städtische Grouptook place in Slovakia through the acquisition of thefifth-largest company on the Slovak life insurancemarket, Kontinuita, and in Serbia through the forma-tion of Wiener Städtische Belgrade. Furthermore, withSlovenia’s admission into the European Union as anew member, Wiener Städtische intends to be activewith a branch in Slovenia. This is a logical conse-quence of the expansion and growth strategy of theWiener Städtische Group, which has already applied inprevious years with its domestic and foreign compa-nies, which became reality in our neighbouring coun-tries on 1st May 2004 with the accession of the newmembers into the European Union: a common market

with concentration on core competences in the respec-tive countries.

As far as Wiener Städtische AG itself is concerned,this company was able to clearly outperform thegrowth of the Austrian insurance market of approxi-mately 4% with an increase in premiums of 10% toapproximately EUR 1.8 billion. Wiener Städtische AGachieved the highest premium growth in the life insur-ance class with a premium increase of more than13%. The reason for this satisfactory performance liesprimarily in the still increasing pension awareness ofAustrians and the promotion of private retirement pro-vision by the State. The decisive factor for the salesrecord of the “Premium Pension”, the Wiener Städtis-che product for the government-sponsored future pen-sion plan, was the circumstance that Wiener Städtis-che was already offering this product at the beginningof the year 2003 as the first insurance company to doso.

The performance of Wiener Städtische AG in the finan-cial year 2003 benefited further through the more sat-isfactory economic environment both on the interna-tional financial markets and in the Austrian insurancemarket. Thus, Austria was spared from serious naturalcatastrophes in 2003 with the exception of a hail-storm. The losses caused by the hailstorm were manytimes smaller than the destruction that was caused in2002 by the floods of the century along the Danubeand its tributaries. In addition, the stock markets alsorecovered from their downward slide. After the insur-ance market was shaped appreciably by the negativeperformance of the most important stock markets inthe years 2000 to 2002, the year 2003 finally broughta turnaround in this area. The most important shareindices showed a positive performance last year, whichwas reflected also in the increase in the financialresult in Wiener Städtische AG of more than 20%.

Taking into account these economic conditions, whichwere much more satisfactory compared with previousyears, it was possible for Wiener Städtische toincrease the profit on ordinary activities from EUR20.25 million in 2002 to more than EUR 30 millionin 2003 through the excellent premium growth alreadymentioned, through the consistent optimisation ofworkflows and tight cost management and through anongoing improvement in underwriting results.

INTRODUCTION.

4

+++ WIENER STÄDTISCHE’S RESULTS WERE

SHAPED BY AN EXCELLENT DEVELOPMENT OF

THE PREMIUM INCOME. +++

MANAGING BOARD INTRODUCTION

As far as the financial year 2004 is concerned, theobjective of Wiener Städtische AG is to follow itshigh premium growth, particularly in the area ofretirement provision, with further improvement inresults at the same time. In order to create the basisfor a high premium growth in the future as well,Wiener Städtische is also relying on the strengthen-ing of its employees in consumer advice – as in pre-vious years – in addition to its distribution partners.Also indispensable in the following years is the con-tinuation of the clear orientation of the WienerStädtische to adjust the organisational structure tomarket circumstances on a continuous basis and to

organise the company more efficiently and toincrease the underwriting results sustainably underthe maxim of risk minimisation.

We would like to take the opportunity also, with theannual financial statements, to thank our customers,business friends and shareholders for their confidenceshown to us and for their allegiance. Our gratitude isdue as well to all employees in the Group for theircommitment and their dedication.

The Managing Board


+++ WE WOULD LIKE TO TAKE THE OPPORTUNITY

TO THANK OUR CUSTOMERS, BUSINESS FRIENDS,

EMPLOYEES AND SHAREHOLDERS.+++

MANAGING BOARD INTRODUCTION

ANNUAL REPORT 2003

Dr. Günter Geyer, Born on 31.7.1943, lawyer, married, 2 children, involvedin Wiener Städtische since 1974. Became Chairman ofthe Managing Board of Union Versicherung in 1983, lat-er General Secretary of Wiener Städtische, Member of theManaging Board of Kooperativa Prague, General Managerof Donau Versicherung. On the Managing Board of WienerStädtische since 1988, General Manager and Chairmanof the Managing Board since 2001.

Dkfm. Karl Fink, Born on 22.8.1945, graduate of the Hochschule fürWelthandel (School of International Trade), married, 1 son,involved in Wiener Städtische since 1975 in industrialinsurance, Chairman of the Managing Board of InterRiskAG Vienna 1979-1987. On the Managing Board ofWiener Städtische since 1987, Deputy General Managerfrom 1.7.2004.

Mag. Christian Brandstetter, Born on 19.7.1963, studied economics, married, 2 chil-dren, in the insurance sector since 1992, at WienerStädtische since 1998, primarily working in the interna-tional sector, on the Supervisory Board of several foreignparticipations. On the Managing Board of WienerStädtische since 2003.

Kurt Ebner, Born on 18.10.1954, actuary, married, 2 children,involved in the Wiener Städtische Group since 1976,specialist for occupational personal insurance. Earlierpositions were, amongst others, Managing Director ofArithmetica, Director of Vereinigte Pensionskasse AGand Director of Union Versicherung and of a Polish lifeinsurance company. On the Managing Board of WienerStädtische since 2001.

Dr. Rudolf Ertl, Born on 14.5.1946, lawyer, married, 1 daughter,involved in Wiener Städtische since 1972 with afocus in the areas of auditing, asset management,real estate, motor legal protection, currently DeputyGeneral Manager of Donau Versicherung. Also on theManaging Board of Wiener Städtische since 2001.

Ing. Mag. Robert Lasshofer, Born on 3.8.1957, studied social and economic sci-ences, married, 2 children, worked at a bank after hisstudies, after that in Union Versicherung (marketing),later on the Managing Board of Donau Versicherung(marketing and sales). Switch to the Managing Boardof Wiener Städtische in 1999.

Dr. Peter Hagen, Born on 12.12.1959, lawyer, involved in Wiener Städti-sche since 1989. The central elements of his work werethe management of the Managing Board secretariat, theexpansion of Wiener Städtische’s international presence,reinsurance, Deputy General Manager of KooperativaPrague until 30.6.2004. On the Managing Board ofWiener Städtische from 1.7.2004.

Dr. Franz Lauer, Born on 20.7.1939, lawyer, married, involved in WienerStädtische since 1962, main focus on property andcasualty insurance. On the Managing Board since 1986,Deputy General Manager from 1988, General Managerfrom 1.2.2004, retired from 1.7.2004.

WIENER STÄDTISCHE AG – MANAGING BOARD.

6

MANAGING BOARD


MANAGING BOARD

The Managing Board of Wiener Städtische AG in 2003.At the front (from left to right): Director on the Managing Board Dkfm. Karl Fink, General ManagerDr. Günter Geyer, Deputy General Manager Dr. Franz Lauer.At the back (from left to right): Director on the Managing Board Dr. Rudolf Ertl,Director on the Managing Board Mag. Robert Lasshofer, Director on the Managing Board Mag. Christian Brandstetter, Director on the Managing Board Kurt Ebner.

ANNUAL REPORT 2003

Managing Board

Dr. Günter GeyerGeneral Manager, Chairman of the Managing BoardMember of the Managing Board since 1988

Area of responsibility: Strategic planning, Groupissues, international relations, financial affairs, invest-ment, participations, real estate and real estate-relatedparticipations, public relations, personnel managementTerritorial responsibility: Slovakia, Czech Republic,Hungary

Dr. Franz Lauer (until 30.6.2004)General Manager (from 1.2.2004)Member of the Managing Board since 1986

Area of responsibility until 30.6.2004: Third-party lia-bility insurance, legal expenses insurance (underwrit-ing), motor vehicle insurance (claims), property insur-ance (main lines), legal matters, sponsorship

Dkfm. Karl FinkDeputy General Manager (from 1.7.2004)Member of the Managing Board since 1987

Area of responsibility: Industrial and commercial insur-ance (general), reinsurance Territorial responsibility: Bulgaria, Germany

Mag. Christian BrandstetterMember of the Managing Board since 2003

Area of responsibility: International sector, IT and oper-ational structure abroad, industrial and commercialinsurance (third-party liability, marine, aviation)Territorial responsibility: Croatia, Poland, Romania,Belarus

Kurt EbnerMember of the Managing Board since 2001

Area of responsibility: Life, health and personal accidentinsurance

Dr. Rudolf ErtlMember of the Managing Board since 2001

Area of responsibility: Motor insurance (underwriting),legal expenses insurance (claims), IT and operationalstructureTerritorial responsibility: Serbia

Ing. Mag. Robert LasshoferMember of the Managing Board since 1999

Area of responsibility: Marketing, sales, provincial headoffices, advertisingTerritorial responsibility: Liechtenstein, branches inSlovenia and Italy

Dr. Hans-Peter HagenMember of the Managing Board from 1.7.2004Member of the Extended Board of Management since1999

Area of responsibility from 1.7.2004: General liability(underwriting), motor/non-motor insurance (claims,excluding legal expenses protection, marine, aviation)

Extended Board of Management

The members of the Managing Board and

Mag. Robert HaiderMember of the Managing Board of Donau AllgemeineVersicherungs-AGMember of the Extended Board of Management since2001

Area of responsibility: IT and operational structure

Dr. Martin SimhandlMember of the Managing Board of InterRisk Versicherungs-AG (until 31.12.2003)Member of the Extended Board of Management since2000

Area of responsibility: Management of the investmentsmanagement group

THE COMPANY’S EXECUTIVE BODIES.

8

THE COMPANY’S EXECUTIVE BODIES

Supervisory Board

Chairman:

President Komm.-Rat Dkfm. Klaus Stadler(from 10.12.2003)

Komm.-Rat Karl Samstag (until 10.12.2003)

Deputy Chairman:

Komm.-Rat Dr. Karl Skyba (from 10.12.2003)

Komm.-Rat Dkfm. Klaus Stadler (until 10.12.2003)

Members:

Abbot General, Provost Bernhard Backovsky

Peter Haunschmidt

Dipl.-Ing. Guido Klestil

Dkfm. Helmut Mayr

Komm.-Rat Walter Nettig

Hofrat Dkfm. Heinz Öhler

Senator Komm.-Rat Wolfgang Radlegger

Member of the Managing Board Dr. Johann Sereinig

Komm.-Rat Dr. Karl Skyba (until 10.12.2003)

General Manager Mag. Dr. Friedrich Stara

Employee representatives:

Peter Grimm, Graz, 1st Deputy to the Chairman of theCentral Advisory Council

Dietfried Kreiner, Klagenfurt

Heinz Neuhauser, Wien

Franz Urban, Vienna, Chairman of the Central AdvisoryCouncil

Gerd Wiehart, Vienna, 2nd Deputy to the Chairman of thecentral Advisory Council

Fritz Zickbauer, Vienna

Trustee in accordance with Section 22 Para. 1 of theAustrian Insurance Supervision Act [VAG]:

Robert Freitag

Deputy:Ernestine Graßberger


THE COMPANY’S EXECUTIVE BODIES

ANNUAL REPORT 2003

WIENER STÄDTISCHE VERSICHERUNG AG.

10

COMPANY CHART

Domestic InsuranceCompanies

Donau Versicherung 89%

BA-CA Versicherung 90%

UNION Versicherung 45%

Wüstenrot Versicherung 32%

s Versicherung 10%

InterRisk (D) 100%

Kvarner Wiener Städtische (HR) 92%

Vienna Life (FL) 100%

Compensa (PL) 50%

Compensa Leben (PL) 62%

Unita (RO) 100%

Agras (RO) 69%

Wiener Städtische Belgrad (YU) 100%

Kooperativa (SK) 100%

Komunálna (SK) 95%

Kontinuita (SK) 80%

Kooperativa (CZ) 95%

Union Biztosító (H) 100%

Kupala (BY) 33%

Foreign Insurance Companies

Experta Schaden-regulierung 100%

Gewista Werbung 33%

Horizont Personal-entwicklung 100%

Kapital & Wert 54%

Metropolitan Datenservice 100%

Österreichisches Verkehrsbüro 21%

Porr Allgemeine Baugesellschaft 15%

Ringturm KAG 91%

Vereinigte Pensionskasse15%

Wiener Verein 100%

Other ServiceCompanies

Business Park Brunn 99%

Celetná (CZ) 100%

Crown WSF (CZ) 30%

DBR Friedrichscarée (D) 100%

DBR Liegenschaften GmbH (D) 100%

Gesundheitspark Wien Oberlaa 99%

Kalvin Tower (H) 100%

Tech Gate Vienna 60%

Real Estate Companies

Bulgarski Imoti (BG) 70%

Simplified representation, values rounded offto nearest per cent. Foreign participations withcountry of company headquarters in brackets.(Position at: 31.12.2003)

Bulgaria

Germany

Croatia

Liechtenstein

Poland

Romania

Serbia and Montenegro

Slovak Republic

Czech Republic

Hungary

Belarus

Wiener Städtische GroupThe Wiener Städtische Group is the leading Austrianinsurance group with approximately 15,000 employeesworking currently in 14 countries of Central and EasternEurope.

The objective is to ensure the successful positioning ofthe Group companies in the respective markets for thelong-term. The Wiener Städtische Group, as an interna-tionally operating insurance group, counts on the localmanagement in the individual countries. Earned profitsremain in the individual companies for the financing offurther growth.

The Wiener Städtische Group admits to a multi-brandstrategy both in the domestic market and abroad.

Wiener Städtische AGWiener Städtische Versicherung AG, which is listed onthe stock exchange, is the leading company of theWiener Städtische Group. As a composite insurer, itoffers optimum protection in all insurance matters, bothfor private customers and for corporate customers andpublic institutions.

Its year of foundation was 1824. That represents 180years of experience and success, from which cus-

tomers, shareholders and employees of the companyare benefiting.

The product range is characterised by its flexibility. Thecustomer chooses from core products, which can be sup-plemented with corresponding modules and adapted tothe individual needs of the customer.

The marketing is carried out via different marketingchannels. The salaried sales force constitutes the main-stay of the marketing, but brokers, insurance agents andcollaboration with banks also have a high importance.Direct mailing, the call centre and the Internet are alsoused as lines of distribution.

The employees of the company are a central success fac-tor. Therefore, particular attention is placed on the ongo-ing initial and advanced training of all employees. It isonly in this way that fast problem solving can be ensuredfor the customers to the highest level.

The compatibility of family and career is facilitatedthrough flexible working hours models.

Wiener Städtische is conscious of its socio-politicalresponsibility and supports the most diverse art and cul-tural projects and social facilities.

ANNUAL REPORT 2003

PORTRAYAL OF THE COMPANY.

11

+++ THE WIENER STÄDTISCHE GROUP IS THE

LEADING AUSTRIAN INSURANCE GROUP. +++

PORTRAYAL OF THE COMPANY

ANNUAL REPORT 2003

Experta – claims handling to the highest levelWiener Städtische sees it as a core competence to beable to ensure a quick and non-bureaucratic claims set-tlement in the event of a loss. In order to achieve thisobjective, there is a company in the Group, ExpertaSchadenregulierung GmbH, specialising exclusively inthat for the motor vehicle sector. Experta has been activein the assessment of losses from the entire motor vehi-cle sector since 30th March 1993, therefore for morethan 10 years.

With a workforce of 69 employees – in part generallycertified legal experts for the motor vehicle sector, inpart master mechanics and sheet metal workers withyears of experience as experts in the calculation ofrepair costs and assessment of vehicles – more than145,000 inspections were carried out on damagedvehicles by Experta in 2003.

Since the beginning of its activity, Experta hasassigned itself the task of simplifying the operationalprocess of damage inspection and assessment in theWiener Städtische Group and of providing EDP tech-nical support in order to achieve the greatest possible

customer value. An EDP system was developed fromthese efforts, which supports both damage inspectionand assessment and the activities of the repair work-shops.

In each Federal Province, Experta has at least one sup-port centre with a drive-in station, which is occupied byan expert at fixed times. An inspection can be carriedout at any time within these operating times. An assess-ment includes a description of the condition of the vehi-cle, a stipulation of the extent of the repair, a calcula-tion of repair costs using the Audatex system, a vehiclevaluation and photographic documentation.

Experta has been successfully working for the WienerStädtische Group for more than 10 years in order tofurther increase customer friendliness in the event of aloss and to ensure a quick claim settlement. In themeantime, with Experta’s active support, Experta’sbusiness model has been introduced by several foreignsubsidiaries of the Group in Central and EasternEurope as well, so a transfer of expertise is taking placewithin the Group in the area of damage assessment andclaims handling also.

EXPERTA SCHADENREGULIERUNG GMBH.

12

+++ WIENER STÄDTISCHE SEES IT AS A CORE

COMPETENCE TO PROVIDE A NON-BUREAUCRATIC

CLAIMS SETTLEMENT. +++

EXPERTA SCHADENREGULIERUNG

Wiener Städtische and its public responsibilityAs the largest Austrian insurance company, WienerStädtische works in several public bodies and organi-sations on implementation of ecological ideas. It is amember on the working group for environmental pro-tection of the Austrian banking and insurance industryand a member of the Austrian Society for Environmentand Technology (ÖGUT), amongst others. ÖGUT has setitself the objective of putting the discussion betweenindustry and the general public on a broad basisthrough an exchange of views and information and ofidentifying and implementing common objectives viathe dialogue. The research project “Risikodialog” (RiskDialogue), which is being implemented by companiesfrom the entire German-speaking area in close collabo-ration with the University of St. Gallen, is pursuingsimilar objectives. Wiener Städtische has participatedin this wide-ranging research work since commence-ment of the project.

At the end of November 1995, Wiener Städtische wasthe only insurance company in Austria to sign the inter-national “Statement of Environmental Commitment forthe Insurance Industry” in the UN headquarters inGeneva. As a result, it is stating that it increasinglytakes environmental considerations into account bothwith its business activity and within the Group.

Environmental protection and waste preventionEmployees spend a large proportion of their time in theworkplace. It is a major task of the company to providethem with a workplace that is designed in a modern andenvironmentally aware way with exactly the same apply-ing for the working environment.

For instance, in order to achieve this, the following mea-sures were taken: the furnishing of office accommoda-tion preferably with furniture made from natural prod-ucts, the use of energy-saving bulbs, cleaning agentswith a natural base, chlorine-free bleached paper, water-based adhesives, uncoated pencils and PVC-free trans-parent folders.

Each of Wiener Städtische’s employees has a wastepaper container in close proximity to his workplace. Inaddition to that, there are collection bins for glass andaluminium throughout the operation. The greatest vari-ety of other problem materials are disposed of via autho-rised waste collectors. Used toner cartridges from print-ers and copiers are collected and handed over to therespective businesses for recycling.

Wiener Städtische Versicherung as an environmental insurerOur environment is a heavily insurable asset. Aninsurance company can lend a helping hand here pri-marily through support with the implementation ofpreventive measures for the avoidance of environ-mental losses.

But if damage to our environment results, WienerStädtische helps to limit and to rectify the conse-quences. Thus, for example, “environmental packages”are included with fire, householders’ and homeowners’insurance policies, which ensure an environmentallycompatible disposal of hazardous wastes in the eventof a loss. Public liability insurance with pollution lia-bility cover offers insurance protection in this area forcompanies as well.

ANNUAL REPORT 2003

ENVIRONMENTAL PROGRAMME.

13

+++ WIENER STÄDTISCHE, AS AUSTRIA’S LARGEST

INSURANCE COMPANY, DECLARES ITS SUPPORT

FOR THE PROTECTION OF OUR ENVIRONMENT. +++

ENVIRONMENTAL PROGRAMME

ANNUAL REPORT 2003

Positive performance of the Vienna Stock ExchangeThe year 2003 was one of the most successful years inthe history of the Vienna Stock Exchange since the Sec-ond World War. The Austrian equity market was able topush ahead considerably in every respect. The ATX(Austrian Traded Index), the guiding index of the Vien-na Stock Exchange, achieved a performance of 34.4%.

This excellent performance of the Austrian equity markethad several causes. First and foremost, there were theincreasing company profits and the reawakened interestof international investors, both of which are also con-nected with the fact that many Austrian companies are

heavily represented in the EU acceding countries andalready produce a considerable contribution to profits inthis region.

Positive influences emanated also from the government-sponsored future pension plan, with which a consider-able proportion of the volume of assets under manage-

ment was invested in Austrian shares. Another positivesignal for the Vienna Stock Exchange was also the pri-vatisation of voestalpine, VA Tech and Böhler-Uddeholm.The increased interest in Austrian shares is alsoexpressed clearly in trade volumes, which increased byapproximately 40% compared with the year 2002.

Wiener Städtische Preference ShareFirst quotation: 1st October 1994Market capitalisation of the preference share:approximately EUR 230 millionShare capital: EUR 89,655,022.06Security identification number: 892.804ISIN: AT0000908520Bloomberg: WSTV AV, Reuters: WISV_p.VIStock exchange listing: Vienna, Munich, Berlin, Stuttgart

The share price of Wiener Städtische’s preferenceshare listed on the Vienna Stock Exchange of EUR116.00 as of the year-end 2002 was outperformedby 2.16% with EUR 118.50 as of the year-end2003. A return of 4.05% was achieved with theshare in 2003, taking into account the dividend ofEUR 2.20 for the financial year 2002.

On the occasion of the Annual General Meeting on16.6.2004, a dividend increase will be proposed forthe financial year 2003 from EUR 1.00 to EUR 1.40in the case of the no-par-value shares with votingrights and from EUR 2.20 to EUR 3.15 with the non-voting preference share.

Proposed dividendNo-par-value shares: EUR 1.40Preference shares: EUR 3.15

The preference share in the first quarter 2004The year 2004 has started extremely favourably for theshareholders of Wiener Städtische AG. Due to theimproved year-end result 2003 compared with the previ-ous year, the promised dividend increase and the excel-lent future prospects for Wiener Städtische, the prefer-

PREFERENCE SHARE.

14

+++ A RETURN OF 4.05 PER CENT ACHIEVED

WITH THE WIENER STÄDTISCHE PREFERENCE

SHARE IN 2003. +++

PREFERENCE SHARE

KEY FIGURES FOR THE WSTV PREFERENCE SHARE

Year-end 2002 Year-end 2003 High Low(31.12.2003) (11.9.2003)

EUR 116.00 EUR 118.50 EUR 118.50 EUR 106.50

SHARE PRICE OF THE PREFERENCE SHARE ON 3.5.2004

EUR 177.95

SHAREHOLDER STRUCTURENon-voting preference share:Free floating 1,350,000 11%

No-par-value shares with voting rights:Wiener Städtische WechselseitigeVersicherungsanstalt-Vermögensverwaltung: 10,986,800 89%

160%

150%

140%

130%

120%

110%

100%

90%

80%

70%

60%

01

-20

03

03

-20

03

05

-20

03

07

-20

03

09

-20

03

11

-20

03

01

-20

04

03

-20

04

05

-20

04

MSCI INSURANCEWSTV VZ

WIENER STÄDTISCHE PREFERENCE SHARE COMPARED WITH THE MSCI INSURANCE INDEX

MSCI INSURANCE INDEX: worldwide insurance share index

ence share increased to more than EUR 180 in the firstquarter 2004. As a result, the share achieved an appre-ciation in value of more than 47% in the first quarter of2004. The MSCI Insurance index (a worldwide insuranceindex) has been outperformed by approximately 30%since the beginning of the year 2004.

A share split is planned in the summer of 2004 in orderto be able to trade the share more easily and thus tomake it even more attractive primarily for small share-holders as well.

Preview of dates 2004Annual General Meeting 16th June 2004Notification of dividend 17th June 2004Ex-dividend day 21st June 2004Dividend payment 28th June 2004

Investor Relations and public relations work 2003Extensive information on the topic of investor relationsis offered on the Wiener Städtische website(www.wienerstaedtische.at). For example, the shareprice performance of the Wiener Städtische preferenceshare is shown. In addition, the annual and quarterlyreports back to the year 1996 in German and Englishare available on-line or to download. The website isrounded off with a comprehensive investor relationsglossary and Wiener Städtische’s current pressannouncements.

It is the common objective of all these measures toinform the capital market about the company in thebest possible way and on a continuous basis. As aresult, the opportunity should be provided for allmarket participants to be able to better evaluate thecurrent performance and the potential of the compa-ny. In order to increase contact with private investorsand customers, Wiener Städtische is regularly repre-sented at numerous exhibitions and events through-out Austria. Wiener Städtische is also a member ofCircle Investor Relations Austria (C.I.R.A.).

Wiener Städtische stands for an ongoing and opendialogue with external and internal target groups. Inaddition to discussions with the press held quarter-ly and the traditional press conference on the annu-al accounts in May, the Wiener Städtische Groupalso pushed ahead with public relations work withthe foreign participations in 2003. Here, dialogueresulted with foreign media representatives andopinion formers in Minsk, Belgrade, Sofia andBucharest.

An international newsletter in English and Germanwas published on the Internet in 2003 for the firsttime as a general communication instrument of theinsurance group. Activities and events in the WienerStädtische Group will be notified in it at periodicintervals.

ANNUAL REPORT 2003

INVESTOR RELATIONS.

15

+++ WIENER STÄDTISCHE IS IN AN ONGOING

AND OPEN DIALOGUE WITH ITS TARGET

GROUPS. +++

INVESTOR RELATIONS

ANNUAL REPORT 2003

The Austrian economyThe year 2003 was shaped by a weak global econom-ic environment, from which the Austrian economycould also not escape. For the third time in succes-sion, Austrian economic growth remained considerablybelow the average of the previous years in 2003 with+0.7% in real terms. However, the first indications foran incipient global economic upturn emanating fromthe USA and the Asian area have clearly shown sincethe start of 2004.

In Austria, goods imports grew markedly faster thanexports in 2003. This resulted in a deterioration inthe balance of trade. Among the domestic demandfactors, construction investments in particular sus-tained economic activity in 2003. In the process, theexpansion of the rail and road infrastructure above allplayed a major role. A recovery for the residential con-struction sector, which had declined strikingly from1999 to 2002, is also anticipated for 2004. Howev-er, there continue to be excess capacities in the officebuildings sector.

Also, consumer spending only increased at a belowaverage rate for the third year running. The retailtrade and other service sectors in particular felt thefull force of the weak development in net income andthe accompanying demand. For the coming years,however, an increased per capita income is expectedagain, though also with a rising trend in the rate ofsaving. According to current estimates, private con-sumption should increase by approximately 2% inreal terms in 2004.

In the tourist industry, it is to be assumed that, in2004, the negative effect of the appreciation in theeuro on the domestic holiday traffic will be more thancompensated by the positive repercussions from therecovery of income in the most important countries oforigin.

The economic revival should not result in an increasein inflation. After a 1.3% average price increase in2003, in fact just 1.2% is expected for 2004.

The economic crisis made itself felt most markedly onthe job market. With an unemployment rate of 4.5%,58,000 more people were looking for a job in Decem-ber 2003 than just two years before (unemployment

rate 2001: 3.6%). Now, no turnaround is yet inprospect in spite of the first indications of an eco-nomic recovery.

In 2003, the public authorities’ deficit increased con-siderably due to weak tax revenue and increasing expen-diture for childcare allowance and partial retirement.According to provisional estimates, it is supposed tohave amounted to approximately 0.9% of Gross Domes-tic Product (GDP).

The global economyGlobal economic development was primarily shaped bytwo events in 2003. Firstly, the USA marched into Iraqin March 2003. Three weeks after the commencementof war, Baghdad was already captured and the fearedeconomic disaster scenarios with oil prices of up to US$100 per barrel failed to appear. Nevertheless, economicrecovery was delayed by the war.

Secondly, the outbreak of the lung disease SARS in Asiain the spring of 2003 resulted in a slump in tourism, thecancellation of flights and the temporary closure of man-ufacturing facilities. However, the epidemic quicklycame to a halt again and thus had only short-term glob-al economic consequences.

The economy in the euro zone again had to cope witha slow-down in GDP growth after the bad years 2001and 2002. The actual GDP grew by just 0.4% in2003. As a result, growth was way behind the USA.

ECONOMIC ENVIRONMENT.

16

MANAGEMENT REPORT FOR WIENER STÄDTISCHE AG

MANAGEMENT REPORT ON THE INDIVIDUAL FINANCIAL STATEMENT OF WIENER STÄDTISCHE AG

5%

4%

3%

2%

1%

0%

–1%

–2%

Austria EU 15 USA

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

INTERNATIONAL COMPARSION OF ECONOMIC GROWTH

Negligible domestic demand in particular caused trou-ble for the euro countries. In the export sector, newproblems arose primarily in the 2nd half of the yeardue to the persistent weakness of the dollar. The eurobecame approximately 20% more expensive comparedwith the US$ in 2003.

Outlook for 2004The positive influences from the USA and Asia shouldtransfer to the economy in the euro zone in 2004,which is still adversely affected by a weakness indomestic demand. Nevertheless, economic recoverywill turn out very restrained in the euro countries. Thesignificant appreciation of the euro compared with thedollar is slowing down export and investment growthconsiderably and the budget policy will also remaintight in the coming years. In Germany, export tradeshould benefit from the recovery in world trade and, inaddition, the construction industry should slowly sur-mount its nadir; therefore, economic growth shoulddevelop again in the medium-term to the average ofthe euro countries.

Capital marketsThe bond markets were characterised by high volatilityin 2003. In the first quarter, the uncertainty in connec-tion with the Iraq war above all prompted investorsincreasingly to low-risk investments. A marked drop inreturns was the consequence. The end of the war,emerging confidence regarding future economic devel-opment and a negligible prospect of further cuts ininterest rates have heavily weighed down bond prices.American bonds in particular came under pressure moreand more. The situation stabilised again somewhat justtowards the end of the year.

After three years of slump and depression, stock mar-kets around the globe reported back again with astrong recovery. High double-digit percentage increas-

es were definitely the rule in 2003 and allowed mem-ories of the share price appreciations of the late1990s to be awakened. The weak dollar alone cloud-ed the picture and could also be a risk factor in thecurrent year.

The USA, the world economy locomotive, discerniblyeasily picked up speed and gradually hauled both theworld’s other large industrial areas and the emergingcountries of Asia with it. Right there, investors havealready been pleased for a long time about a limited eco-nomic recovery – triggered by the boom in the economicwonderland of China – which is also noticeably radiatingonto the small Asian “Tiger States”. In addition, the costof money remained favourable after a long, unparalleledphase of interest rate reductions by the internationalcentral banks. The previous deflation fears, which pri-marily caused trouble for the stock markets, were virtu-ally no longer a topic at mid-year.

The insurance market in AustriaAccording to provisional data from the insurance asso-ciation, the Austrian insurance industry recorded apremium increase of 4.1% in 2003 to EUR 13.23 bil-lion. As a result, the forecast of 3.9% was somewhatexceeded. Insurance payments increased by 5.2% toEUR 9.53 billion and likewise capital assets by 4.9%to EUR 61 billion.

A plus of 1.7% resulted in life insurance. That repre-sents a premium income of EUR 5.81 billion. (2002:EUR 5.71 billion). A clear trend appeared towardsrenewable premium payments (to EUR 4.23 billion,+10%) and away from lump-sum payments (to EUR1.58 billion, –15%). For 2004, the Austrian InsuranceAssociation (Österreichischer Versicherungsverband)expects a plus of 5.8% in life insurance.

The massive increase in premiums against renewablepayment recognises that Austrians again increasinglyrely on the life insurance instrument for a private pen-sion. In particular, the newly introduced, special-ratefuture pension plan encountered great interest. Overall,more than 200,000 policies were concluded in 2003.

Many investors use the favourable entry level to the stockmarkets in order to invest in unit-linked life insurancepolicies. A total of EUR 890.54 million (+5.1%) in pre-miums were paid for unit-linked life insurance policies,


+++ THE POSITIVE INFLUENCES FROM THE

USA AND ASIA SHOULD ALSO TRANSFER TO

EUROPE IN 2004. +++


ECONOMIC DEVELOPMENT IN 2003Increase in % GDP in real terms CPI Unemployment rate

Austria 0.7 1.3 4.5

Germany 0.0 1.1 9.4

EU 15 0.8 2.0 8.1

USA 2.8 2.3 6.1

Japan 2.6 –0.3 5.2

(Source: WIFO)

ANNUAL REPORT 2003

whereby a fall in single-premium policies was to beobserved here as well.

In the life insurance class of business, the benefits paidout amounted to EUR 4.37 billion (+19.1%), but it shouldbe taken into account here that, on 1.1.1989, the lock-inperiod for the tax encouragement of capital-sum lifeinsurance policies was increased from 15 to 20 years andtherefore many customers brought forward the plannedconclusion of the life insurance policy to the year 1988.The majority of these policies matured at the end of 2003.

In health insurance, premium income increased by3.8% to EUR 1.30 billion. The volume of benefitsincreased by 2.8% to EUR 954 million. For this year, theinsurance association expects another growth in premi-um of approximately 3%.

In property and casualty insurance, there was anincrease in premium income by 6.5% to EUR 6.12 bil-lion. In particular, the absence of major losses com-pared with 2002 resulted in a reduction in claim pay-ments by 5.8% to EUR 4.21 billion. For the year2004, a premium growth of approximately 4.5% isexpected.

Motor vehicle liability insurance was also in the red in2003. The results were indeed better than in 2002,but the combined ratio was still greater than 100%.Car insurers suffered especially with the dispropor-tionately high increase in car repair costs. Theyincreased in cost overall by 4.4% with an inflation rateof just 1.3%.

ECONOMIC ENVIRONMENT.

18

+++ AUSTRIA’S INSURANCE INDUSTRY

RECORDED A PREMIUM GROWTH OF 4.1 PER

CENT IN 2003. +++


THE AUSTRIAN INSURANCE MARKETin EUR billion Premiums Change Claims Change

2003 over 2002 2003 over 2002

Life 5.81 1.7% 4.37 19.1%

Health 1.30 3.8% 0.95 2.8%

Property/casualty 6.12 6.5% 4.21 – 5.8%

Total 13.23 4.1% 9.53 5.2%

(Source: Austrian Insurance Association)

The insurance industry worldwide

Return to core businessThe year 2003 certainly represented the end of an era inthe global insurance industry. The times, when it was pos-sible to compensate losses in the underwriting area bymeans of an appropriately positive financial result, areover. Therefore, globally, insurance companies are remem-bering their core business again – the insurance of risk.

This rethinking process was also necessary becausethe high financial earnings from the capital assetspresumably belong to the past. We are currently in alow-interest phase globally, which will probably alsocontinue for some time yet. The insurance industry’sattempt to compensate falling interest earnings bymeans of share price gains on the stock markets hascollapsed. Lower financial earnings are the future, towhich the worldwide insurance industry must adapt.

The consequence from this is that insurers have torevert to their core business and make money againon risk. The sustainable attainment of a combinedratio below 100% turns into a survival strategy.

Increasing losses from natural catastrophesNatural catastrophes such as tornadoes, earthquakesand forest fires have driven up losses in the global insur-ance industry in 2003. Insured losses increased toapproximately US$ 15 billion (2002: US$ 11.5 billion).

Thus, approximately 70 serious earthquakes wereregistered, which caused an economic loss ofapproximately US$ 6 billion, but of this roughly onlyUS$ 100 million was insured. In May, an earth-quake in Algeria claimed at least 2,200 humanlives. The tidal wave arising from this caused dam-age that reached up to Mallorca, Ibiza and Menorca.In China, one of the most serious earthquakes for 50years was registered. Approximately 70,000 build-ings were very seriously damaged in some cases orcompletely destroyed. Finally, Iran was also affectedby an earthquake with a strength of 6.6 (Richterscale). The city of Bam was almost completelydestroyed and there were more than 25,000 victimsto mourn.

75% of the insured losses from all natural catastro-phes were attributable to storm and bad weather loss-es. In April and May, a striking series of tornadoes inthe Mid-West of the USA was observed. The insuredlosses amounted to US$ 5 billion. In the second halfof September, Hurricane Isabel caused havoc on theEast Coast of the USA and devastated more than360,000 dwellings.

In Europe, the losses were kept within limits in 2003in spite of storms up to 200 km/h. Conspicuous inEurope was the extreme heat and drought in the sum-mer. Viewed statistically, a heat wave like that one onlyoccurs every 450 years.


+++ GLOBALLY, INSURANCE COMPANIES ARE

REMEMBERING THEIR CORE BUSINESS AGAIN,

THE INSURANCE OF RISK. +++


ANNUAL REPORT 2003

Wiener Städtische was able to achieve a profit on ordi-nary activities (calculated in accordance with the pro-visions of the Austrian Commercial Code [HGB]) ofEUR 30.5 million in the 2003 financial year. This rep-resents an increase by approximately 50% comparedwith the profit on ordinary activities for the year 2002(EUR 20.25 million).

Gross earned premiums amounted to EUR 1,773.31million in the financial year 2003 across all classes ofbusiness. This represents a plus of 9.8% compared with2002. As a result, Wiener Städtische was once againway above the growth of the Austrian insurance market.The insurance market was clearly outperformed in thelife insurance class of business in particular with agrowth in gross earned premiums of 13.4%. In compar-ison with that, the premium income of the entire Austri-an life insurance market increased by just 1.7%. WienerStädtische’s total premium income consists of approxi-mately 45% from property and casualty insurance, 40%from life insurance and 15% from health insurance.

The expenses for insurance claims (including thechange in the actuarial reserve) increased by 9.4% toEUR 1,458.97 million, primarily due to the high dis-bursements towards the end of 2003 for tax-privi-leged 15-year life insurance policies concluded in1988.

Operating expenses increased by 13.3% to EUR 390.74million. This also includes the expenses for commis-sions, which have risen considerably due to the excellentsales result primarily in life insurance.

The financial result of the year 2003 increased by23.7% compared with the financial result of the year2002 to EUR 263.10 million due to the easing situationon the capital markets.

The capital assets position as of 31.12.2003 amountedto EUR 7,338.69 million (+5.4%), of this EUR 301.14million (+97.0%) belonged to the capital assets of the

unit-linked and index-linked life insurance. The capitalassets position without the unit-linked and index-linkedlife insurance increased by 3.4%.

Property and casualty insurance In property and casualty insurance, an increase in grossearned premiums was achieved in 2003 amounting to9.1% to EUR 791.24 million.

At the same time, it should be taken into account thatthe assumed portfolio of Montanversicherung is includ-ed completely for the first time in 2003, whereas theMontanversicherung premiums are only taken intoaccount for the 2nd half of the year in the comparablefigures for the year 2002. Montanversicherung was aspecialist industrial insurer, which was already in thepredominant ownership of Wiener Städtische before thecomplete transfer of the portfolio of policies. WienerStädtische became Austria’s largest corporate businessinsurer through the takeover.

In motor vehicle liability insurance, gross earned premi-ums increased by 9.8% to EUR 178.62 million in 2003

BUSINESS DEVELOPMENT.

20

+++ COMPARED WITH 2002, PROFIT ON ORDI-

NARY ACTIVITIES COULD BE INCREASED BY

APPROXIMATELY 50 PER CENT. +++


KEY FIGURES FOR BUSINESS DEVELOPMENT in EUR million 2003 Change over 2002

Gross earned premium 1,773.31 +9.8%

Gross expenses for1,458.97 +9.4%insurance claims

Gross expenses for390.74 +13.3%insurance operations

Result on30.55 +50.9%ordinary activities

Capital assets 7,338.69 +5.4%

1,800

1,600

1,400

1,200

1,000

800

600

400

200

01998 1999 2000 2001 2002 2003

WIENER STÄDTISCHE’S PREMIUM DEVELOPMENT

Property and casualty insuranceHealth insuranceLife insurance

by means of successful new business. For other motorvehicle insurance policies, an increase by 8.7% to EUR96.97 million could be accomplished. This is all themore significant as no tariff adjustment was applied in2003 in the motor hull class of business.

In the non-motor classes of business, there was anincrease in gross earned premiums by 8.9% to EUR 515.65 million. Underwriting adjustments to thepremium calculation in the large risk division on the onehand and the very good sales result on the other handwere responsible for this situation. For instance, it waspossible to excellently position the newly developedinsurance product “Business Class” in the market – aflexible comprehensive commercial lines insurance poli-cy that was specifically devised for the small and medi-um-sized businesses that are so important in Austria.

Although a severe hailstorm in May 2003 resulted in acharge on the results of the property and casualty classof approximately EUR 11.9 million overall, the expensesfor insurance claims fell by 2.2% compared with theyear 2002. It should be taken into account in this regardthat the result in the property and casualty class in 2002was heavily weighed down by the flood disaster along theDanube and its tributaries.

Life insuranceThe gross earned premiums in life insurance amountedto EUR 710.23 million in 2003 and were thus around13.4% above the premium level of the previous year. Inthe case of renewable premiums, a premium growth of16.9% could be produced due to an increasing numberof policy conclusions for long-term pension products.

In particular, Wiener Städtische’s “Premium Pension”,the product for the future pension plan with subsidisedpremiums, sold exceptionally well. In the course of theyear 2003, approximately 55,000 “Premium Pension”policies were concluded, as a result of which WienerStädtische has gained a market share of more than 20%.Ringturm KAG’s “Future Pension Plan Equity Fund”[Zukunftsvorsorge Aktienfonds], in which WienerStädtische invests the legally-prescribed proportion ofshares for the future pension plan with subsidised pre-miums, achieved an appreciation in value of 22.4% in2003.

The high premium income of 2002 was again increasedby 5.9% to EUR 211.07 million in the single-premiumpolicy sector as well. In comparison with that, the pre-mium income in the single-premium policy sector fell bymore than 15% in the Austrian insurance market.

The expenses for insurance claims (including funding ofthe actuarial reserve) increased in 2003 by 20.2% com-pared with 2002 to EUR 734.66 million. The reason forthis high increase was the maturing, towards the end ofthe year 2003, of the 15-year tax-privileged policiesconcluded in 1988.

Health insuranceIn health insurance, gross earned premiums amountedto EUR 271.84 million in 2003. As a result, an increaseof approximately 3% could be achieved compared with2002. The expenses for insurance claims, including thechange in the ageing provision, amounted to EUR233.46 million, which represents an increase of 5.7%compared with the previous year.


+++ IN 2003, APPROXIMATELY 55,000 “PRE-

MIUM PENSIONS” WERE CONCLUDED BY WIENER

STÄDTISCHE. +++


ANNUAL REPORT 2003

Recovery in the securities marketsAfter a sustained weakness of the stock markets overthree years, which even the most pessimistic analystswould not have considered possible, the stock mar-kets slowly recovered from the spring of 2003. Sup-ported by economic activity now cautiously revivingagain and by the gradually returning confidence ofthe investors, all significant share indices achieved aperceptibly positive performance for the year by theyear-end.

The performance of the Vienna Stock Exchange in2003 was particularly gratifying. Its guiding index,the Austrian Traded Index (ATX), when compared withthe most important share indices of the world, onlyhad to narrowly admit defeat with the German shareindex (DAX) and was able to achieve an annual appre-ciation in value of 34.4%. It should be noted, on theperformance of the DAX, that the DAX was seriouslyweakened by the stock market crash in the years2000 to 2002 and therefore started off from a rela-tively low level.

Most other stock markets could also be pleased aboutincreasing share prices in 2003. The Dow Jones indexof the New York Stock Exchange achieved a plus of25.3%, the Japanese Nikkei 225 a plus of 24.5%, the

London FTSE all-share index a plus of 13.6% and thepan-European EURO Stoxx 50 index a plus of 10.5%.

The bond markets appeared to be highly volatile peri-odically, but ended the stock market year 2003 at thesame level as at the beginning of the year with a returnof approximately 4.3% for a 10-year federal bond.

The remarkable performance of Ringturm KAG’s “FuturePension Plan Equity Fund (Zukunftsvorsorgeaktienfonds)”(2003: +22.4%), which ensures an excellent return forthe “Premium Pension”, is especially gratifying for allcustomers of Wiener Städtische who have relied on thefuture pension plan with subsidised premiums.

Financial resultAfter taking into account the expenses for asset man-agement, Wiener Städtische was able to produce afinancial result of EUR 263.10 million in the financialyear 2003, which corresponds to an increase of23.7% compared with the previous year.

In spite of the reduced interest rate level, which had anegative impact on the return of the bond portfolioand of the loan portfolio, the ordinary financial result2003, at EUR 345.85 million, was below that of theyear 2002 by just 0.8%.

FINANCIAL RESULT.

22

+++ ALL SIGNIFICANT SHARE INDICES ACHIEVED

A PERCEPTIBLY POSITIVE PERFORMANCE FOR

THE YEAR UP TO THE YEAR-END. +++


FINANCIAL RESULTOrdinary financial result 345.85 –0.8%

Extraordinary financial result –82.75 n.a.

Financial result 263.10 +23.7%


40%

35%

30%

25%

20%

15%

10%

5%

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ATX

(Aus

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THE PERFORMANCE OF IMPORTANT INTERNATIONAL STOCK MARKET INDICES IN 2003

7%

6%

5%

4%

3%1

99

3

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

SECONDARY MARKET YIELDS 1993–2003

6.74 6.696.51

5.36

5.33

4.84

4.404.14

4.674.44

3.43

(Source: Austrian Central Bank, SMR issuers overall, annual average share price)

(Source: Bloomberg)

37

.1%

34

.4%

25

.3%

24

.5%

18

.5%

16

.1%

13

.6%

10

.5%

4.6

%

It was possible to increase the capital assets position,including the unit-linked and index-linked life insur-ance, by 5.4% to EUR 7,338.69 million in the finan-cial year 2003.

The capital assets of unit-linked and index-linked lifeinsurance increased by 97% from EUR 152.89 million toEUR 301.14 million. The reason for this, in addition tothe future pension plan with subsidised premiums, wasthe successful reshaping of the unit-linked life insurancepolicy, United Funds of Success. Many customers usedthe historically low entry level to the securities marketsfor an investment in a unit-linked life insurance policy.Stock market prices, which have increased in everyrespect, have resulted in a positive performance of unit-linked life insurance policies in the last year.

Wiener Städtische as an investor in showcase Austrian companiesIn accordance with the principle of the Wiener Städti-sche Group to invest premiums received predominant-ly in the respective country of origin, Wiener Städtis-che AG holds shares in several blue-chip Austriancompanies. Long-term participation in Austrian com-panies is the objective. Thus, for example, such

prominent traditional companies like voestalpine, Aus-trian (formerly AUA), Semperit, Verkehrsbüro, ViennaAirport or Böhler Uddeholm are in the portfolio. Theseinvestments should make a contribution to these com-panies remaining in the domestic market and to secur-ing jobs, but they also act, of course, as a long-termand valuable capital investment.

LoansIn the loans sector, Wiener Städtische continues toattach importance to the highest creditworthiness ofthe borrower. Loans represent a considerable propor-tion of the capital assets with a volume of EUR 1.33billion or 18% of the invested assets.

Real estateWith a volume of EUR 617.73 million or approximate-ly 8% of the total invested assets, real estate occupiesan important place in Wiener Städtische’s portfolio.The strategy of changing from directly held real estateinto real estate funds operating across Europe was alsoconsistently pursued in 2003. Thus, for example, thefavourable situation in the real estate market was usedwith the sale of “Haas House” on Stephansplatz inVienna and of the Schillerpark Hotel in Linz. In Janu-ary 2004, building complex A of the “Campus 21”business centre situated in the south of Vienna wassold. In the process, 16,500 m2 changed owners.

The mm Liegenschaftsbesitz GmbH real estate project,which was handled via the Wiener Städtische subsidiaryLVP Holding GmbH, is exemplary for a successfully exe-cuted project. An office block, the T-Center, was con-structed in collaboration with three other investors in thearea of the former St. Marx abattoir. T-Mobile Austriaintends to concentrate its locations here, which are cur-rently scattered all over Vienna. An agreement hadalready been reached with T-Mobile (formerlymax.mobile) regarding a long-term leasing before com-mencement of construction. The 135,000 square metreT-Center should be completed by the end of 2004 andhas already been completely pre-let to T-Systems Austriaand its subsidiary company T-Mobile Austria. In April2004, it was sold to a foreign real estate fund.

Wiener Städtische’s widely diversified real estate port-folio was supplemented in 2003 by the InnovaparkInnsbruck and the acquisition of an office building inWiesbaden/Germany.


+++ RISING STOCK MARKET PRICES HAVE

RESULTED IN A POSITIVE PERFORMANCE FOR

UNIT-LINKED LIFE INSURANCE. +++


Real estate: 617.7

Participations: 1,075.5

Loans: 1,328.4

Securities: 4,096.7

Banks: 220.4

BREAKDOWN OF CAPITAL ASSETS

Other: 285.7

Shares: 121.6

Bonds: 1,696.5

Funds: 1,992.9

BREAKDOWN OF SECURITIES

ANNUAL REPORT 2003

ParticipationsIn the area of participations, Wiener Städtische reliedon favourable financial participations on the one handand on the other hand on investments in the growthmarkets of Central and East European countries byway of capital increases at Group companies in thesecountries. In addition, shares were increased in BA-CAVersicherung (formerly CA Versicherung) and in UnionVersicherung.

In the area of participations in insurance companies inthe growth markets of Central and Eastern Europe, theGroup’s expansion phase has essentially concluded.Further acquisitions will only be undertaken selective-ly. Wiener Städtische’s focal points in 2003 lay in thestrengthening of the equity capital position of Groupcompanies by way of capital increases. This was nec-essary due to their strong growth and promises excel-lent returns on the invested capital.

In 2003, EUR 6 million was invested in the Romaniancompany Unita and EUR 1 million in its subsidiaryAgras in the form of capital increases. The capitalincreases at Bulgarski Imoti (Bulgaria) and CompensaNon-life (Poland) were fully subscribed in each caseby Wiener Städtische’s overseas partner, the Germancompany HUK-Coburg, whereby a clear declarationwas made on the strategic partnership of the twogroups. Capital increases had already been adopted in2003, which were implemented in 2004, at Koopera-tiva Prague (EUR 25 million) and at the strongly grow-ing Croatian company Kvarner (EUR 2 million).

Acquisitions in the insurance sectorWiener Städtische was able to further increase theGroup’s market share in Austria with the increase in

the share in BA-CA Versicherung and in Union Ver-sicherung. The share in BA-CA Versicherung wasincreased from 50% to 90% with the acquisition of a40% block from Bank Austria Creditanstalt and that inUnion Versicherung increased by one third to 45%.

In Slovakia, the acquisition took place in 2004 of theremaining 20% of Kontinuita, which is now a 100%member of the Wiener Städtische Group.

Ringturm KAGRingturm KAG (www.ringturm.at) currently manages14 special funds and public funds with a total volumeof approximately EUR 2.5 billion. It has been operat-ing in the investment fund business for more than fif-teen years. 91% of Ringturm KAG is in Wiener Städti-sche’s ownership. Österreichische Beamtenversiche-rung holds the remaining 9%. As the name alreadysuggests, the headquarters of Ringturm KAG is Ring-turm, where Wiener Städtische’s head office is alsolocated.

Public funds comprise the bond fund pension with afund volume of approximately EUR 740 million, whichis investing predominantly in government bonds andmortgage bonds. A further speciality of the range offunds is the Versicherung International Fonds (VIF)[Insurance International Fund], invested exclusively ininsurance company shares, with a fund volume ofapproximately EUR 220 million. Since the end of theyear 2002, the “Future Pension Plan Equity Fund”has completed the funds range with its main area ofinvestment in Austrian shares. In 2003, RingturmKAG was able to conclude marketing agreements forits public funds with a number of reputable institu-tions located in the German-speaking area.

FINANCIAL RESULT.

24

+++ RINGTURM KAG CURRENTLY MANAGES 14

SPECIAL AND PUBLIC FUNDS WITH APPROXI-

MATELY EUR 2.5 BILLION. +++


Thanks to the employeesA really special thank you is due to all employees ofWiener Städtische, who have ensured, with greatcommitment and high expertise in the past financialyear, that a quite excellent result could be producedas well as a premium growth that is historically highand way above the Austrian insurance market.

Declaration to the employeesWiener Städtische is a service company and the suc-cess of a service company depends on its employeesto a particularly high extent. It is not only the excel-lent products, but primarily also the qualified, effi-cient and committed employees, both in the officestaff and in the sales force, who have created thebasis for the commercial success in 2003. Therefore,the employees also have a correspondingly highimportance in the company.

At the year-end 2003, Wiener Städtische employed3,754 employees, which is 34 people more than atthe year-end 2002. In contrast to the prevailing trendin the Austrian market to reduce the workforce,Wiener Städtische has appointed a total of 433 newemployees. An initiative for the acquisition of employ-ees had already been started in the insurance consul-tancy sector at the end of 2002. Wiener Städtischeaccommodated 337 new employees for the sales

force in the context of this campaign. This showsWiener Städtische’s clear declaration of belief to thesales force on the permanent staff.

The most important employer for insurance traineesWiener Städtische employed 99 trainees in 2003. Asa result, approximately one third of all trainees in theAustrian insurance market are trained by WienerStädtische. They are offered the opportunity to obtaina sound training and to gain a foothold in a renownedcompany.

A pro-family and pro-women personnel policyThe social awareness of Wiener Städtische isemphasised not only through the education of a highnumber of trainees, but also through the measuresin favour of families. The company supports thesmooth return after maternity leave with flexibleworking hours packages, with part-time workingpackages also if requested, whereby the re-entry ofthe employees is also facilitated through companykindergartens with nursery and day-care centres,which have been in existence since 1974. Thesespecial services from Wiener Städtische resulted inthe company being one of the most family-friendlycompanies in Austria, which has also been honouredagain and again over the years with various awards(e.g. the “glass slipper”).

Wiener Städtische’s policy towards disabled peopleagain demonstrates how seriously the companytakes its social responsibility. According to the infor-mation of the Federal Social Welfare Office, 130

employees belonged to the group of “government-assisted” disabled people in 2003. Wiener Städti-sche has recognised for a long time that people withcertain restrictions can provide work that is just ashighly qualitative and efficient as employees with-out handicaps.

ANNUAL REPORT 2003

PERSONNEL.

25

+++ AN EXCELLENT RESULT WAS PRODUCED

DUE TO THE COMMITMENT OF EMPLOYEES. +++


500,000

450,000

400,000

350,000

300,000

250,0001999 2000 2001 2002 2003

EMPLOYEE PRODUCTIVITY

in EUR

KEY FIGURES31.12.2003 Change as of 31.12.2003

Workforce 3,754 +34

Administration 1,824 –17

Sales 1,831 +51

Trainees 99 –

(Earned premiums per employee)

ANNUAL REPORT 2003

Works CouncilWiener Städtische also shows the effect of setting anexample in the company management’s relationshipwith the Works Council. The principle is that the com-pany management and Works Council do not regardeach other as opponents, but as partners. There is aconstructive dialogue between the Managing Boardand Works Council regarding employment law issues.All this sounds self-evident, but Wiener Städtischealso puts it into practice.

International orientation is emphasisedAs the parent company of an international insurancegroup operating in 13 countries, the international ori-entation and cross-cultural capability of employees isrequired in Wiener Städtische, but also encouraged.If they wish, employees may work abroad for a certaintime, when required, and also employees of foreigncompanies regularly complete extensive trainee pro-grammes in Wiener Städtische. Apart from the sym-posia regularly taking place with participants from allGroup companies, joint recreational activities are alsooffered, where possible, such as the joint winter com-pany outing for Wiener Städtische and for both Koop-erativa companies.

Initial and advanced trainingThe highest importance is attached to the ongoinginitial and advanced training of all employees. Thetechnical capability and the regular advanced trainingof the employees are ensured by the Group’s own per-sonnel development company, Horizont GmbH. Afterthe compulsory four-week basic training course, Hori-zont GmbH offers the employees a very highly diver-sified and annually updated range of training. Thechoice includes both technical and character-formingseminars, which allow a constant progression of theemployees.

The office staff require a sound technical trainingwith their duties in order to deal with the requests ofthe customers in a way that is as efficient and cus-tomer-orientated as possible. In order to achieve this,the main focus of the advanced training measures inthe first two years of service is placed primarily on thecustomer services areas. With the aid of the so-called“training passport” for newly joined office staff, com-prehensive and practical training is ensured in theimportant areas (an overview of customer orientation,

working in a call-centre, basic PC training, motorvehicle licensing and claims handling) and all train-ing already completed is documented.

At the same time, the sales force in turn is supportedprimarily by Horizont GmbH to make new employeesproductive and successful faster than elsewherethrough good training. After the basic training forsales staff, the new employees are prepared for theBÖV examination with two intensive training periods(an examination for certified insurance consultants,conducted by the BÖV [“Bildungswerk der österrei-chischen Versicherungswirtschaft”, Austrian Insur-ance Industry Training Institute]. Experienced salesstaff can then broaden their knowledge by means ofspecial courses, e.g. the newly introduced course forfinancial professionals (an intensive course for theinvestment and financing sector as well as occupa-tional personal insurance) or the course for businessprofessionals (intensive training for advising cus-tomers with operating risks).

The quality of management is also important for thesuccess of the insurance group. Therefore, great atten-tion is paid to the selection of suitable people for thefulfilment of management functions. Potential candi-dates are evaluated according to objective and consis-tent criteria. Assessment centres supply the most reli-able information within the framework of knownpotential assessment methods. This information sup-ports the management, the divisional managers andthe personnel resources with the development anddeployment planning of executives. The participantsin the assessment centre obtain valuable informationregarding their own management potential and fortheir personal development plan. Participants in theassessment centre are (new generation) executivesfrom Group companies in the domestic market andabroad and are nominated by their superiors. Greatvalue is also placed, in the context of the meeting, onthe participants’ exchange of experiences.

Subsequently, future executives are optimally pre-pared for their duties in the Group, after confirmationby the Managing Board, on a two-year managementcourse with an integrated residence abroad for sever-al weeks in a subsidiary company. On the course, pro-fessional advanced training is carried out for theknowledge and capabilities that are essential for the

PERSONNEL.

26

+++ AN INTERNATIONAL ORIENTATION AND

CROSS-CULTURAL CAPABILITY ARE KEYS TO

THE SUCCES OF WIENER STÄDTISCHE. +++


successful fulfilment of management functions anddemanding staff duties.

In collaboration with renowned international trainers,important key topics for the management are dis-cussed and developed. The effect of the seminars andworkshops, taking place in modular form, is support-ed by several projects and excursions.

Austrian Insurance Industry Training InstituteWiener Städtische’s success is attributable primarilyto the highly qualitative customer consultation workof its employees. Also decisive for this high level ofwork is certainly the intensive training over severalmonths in preparation for the comprehensive exami-nation conducted by the Austrian Insurance IndustryTraining Institute (BÖV). The so-called BÖV examina-tion extends over 3–4 days. After successful comple-tion, the employees may designate themselves as a“Geprüfter Versicherungsfachmann BÖV” [BÖV-certi-fied insurance expert]. So far 1,069 Wiener Städtis-che employees have already completed their studies,

an above-average number of them with distinction.Even though this professional examination is onlycompulsory for those insurance consultants whojoined the insurance sector after 1.1.1995, manysales staff that had already joined before this datehave also voluntarily taken them.

The costs for the initial and advanced training, whichreached EUR 3.3 million in 2003, highlight the par-ticular importance of employee training at WienerStädtische.

Applications always welcomeWiener Städtische is always on the lookout for highlymotivated customer advisors. If you also have aninterest in working at Wiener Städtische, please senda valid application to the personnel department.

Wiener Städtische Allgemeine Versicherung AGPersonnel departmentSchottenring 301010 Vienna


+++ THE INITIAL AND ADVANCED TRAINING

OF EMPLOYEES IS A CENTRAL PART OF THE

COMPANY PHILOSOPHY. +++


ANNUAL REPORT 2003

“Wish wie had your problems”In 2003 also, this slogan was at the centre of all WienerStädtische’s advertising drives. As an insurer, WienerStädtische lives on tackling the problems and concernsof its customers. Wiener Städtische is orientated to theneeds of its customers and offers innovative, high-quali-ty insurance protection with individual consultation andextensive services. The company’s advertising campaignis impressive not only due to its creativity, its humourand its naturalness, but for its innovative ideas as well.It has a very high awareness level and appeals to a broadtarget group.

Wiener Städtische’s advertisements are found in a mul-titude of different media, on TV and in the printed mediaas well as on radio, on posters or on the Internet.

Wiener Städtische’s posters and advertisements werehonoured several times in 2003 and always reached topplaces at international festivals. The “supermarket”advertisement, which had already received severalawards in 2002 (e.g. the “Golden Award of Montreux” orORF’s top advertisment), was given an award in 2003 aswell. It gained a distinction both in New York at the“Midas Awards” and at “EPICA” in Paris. The advertis-ing for the “Woman Plus” product, which won an“EFFIE” recognition award (a competition for particular-ly efficient advertising) obtained a special distinction.

Joint advertising again with PalmersIn the autumn of 2003, there was a continuation of theinnovative advertising co-operation already initiated in2002 with Palmers, Austria’s biggest textiles group.Wiener Städtische’s posters were stuck up in October2003, on which perfect legs were to be seen in a mini-skirt – with an unsightly ladder. Wiener Städtische’s mes-sage was: “If that is your greatest concern, you are wellinsured.” In mid-October, the posters were supplement-ed with an oversticker from Palmers, which advertisedthe current stocking collection. The joint advertisingmessage of both companies was the capability for thesolving of “concerns” – Palmers solves the small every-day concerns of women with its new stockings, WienerStädtische the greater concerns for the future by meansof an appropriate insurance policy. As a result, this kindof advertising, which is totally new for Europe – the jointadvertising of two companies from completely differentsectors on one poster – was successfully continued.

In November 2003, Wiener Städtische participated in aposter campaign of the news magazine “Profil”. In thiscase, a poster for the magazine was supplemented by aWiener Städtische oversticker in order to draw attentionto Wiener Städtische’s Premium Pension.

Two surveys conducted by the Austrian Gallup Institutein December 2003 prove that the new-style advertising

ADVERTISING.

28

+++ IN 2003 ALSO, THE SLOGAN “WISH WE

HAD YOUR PROBLEMS” WAS AT THE CENTRE OF

ALL ADVERTISING DRIVES. +++


IF THAT IS YOUR GREATEST CONCERN, YOU ARE WELL INSURED. “Wish we had your problems”

went down very well with its target group and that thepublicity value both of the Palmers’ advertising cam-paign and of that for “Profil” was exceptionally good.

InfoscreenWiener Städtische’s advertising is also always open tonew ideas. An excellent example for this is the collabo-ration with the company Infoscreen. Wiener Städtischecollaborated with the company Infoscreen from the start,which has proven to be extremely successful. Since1998, a varied programme from editorial contributions(news, weather, sport, cultural tips etc.) and advertisinghas been offered to the passengers of Wiener Linien ona total of 33 large projection screens at the most fre-quented underground stations in Vienna and in the lat-est railcars of Line U3. The stimulus-free environment inthe underground area is a guarantee for a particularlyhigh publicity value for the advertisement. As a result,advertising turns into a welcome diversion during thewait for the next train or during the tube train journey.

In the process, Wiener Städtische is not only represent-ed on the Infoscreen monitor with its current advertise-ment, but the company’s logo is also shown on the fade-in message “Please step back – your train is arriving”,drawing attention to the arrival of each undergroundtrain. Infoscreen’s coverage is tremendous: they are seenby approximately one million people per week.

Wiener Städtische has taken over the patronage for thenew City Airport Train (CAT), which connects Central Vien-na to Schwechat Airport. Passengers spend the journey ofjust under 16 minutes with a programme tailor-made forthem – and Wiener Städtische wishes them a good flight.

ÖH – Austrian Students’ UnionWiener Städtische achieved a particular success throughthe collaboration with the Austrian Students’ Union(ÖH). Since 1.10.2003, Wiener Städtische has assumedthe compulsory insurance for all students in Austria.Each student pays a compulsory premium for the insur-ance with the ÖH subscription. This amount protects thestudents in the event of accidents and claims for com-pensation on an accident and liability insurance basis.

“Take it easy” –special insurance offers for studentsBy means of the collaboration with the ÖH, WienerStädtische succeeds in directly addressing the target

group of “students”. Employees of Wiener Städtische,who give advice competently on the spot and provideinformation in detail, provide customer care for the stu-dents at the respective location. All over Austria. Usingthe “Take it easy” insurance package, a range wasdeveloped specifically for students made up of separateproducts for students, such as a personal accidentinsurance policy, a health insurance policy, a house-holders’ insurance policy and a pension plan.

Gewinn-Messe 2003As in the years before, in addition to other smallerexhibitions, Wiener Städtische was also representedwith a 75m2 stand at the Gewinn-Messe [Assets Fair]held in October 2003 at the Vienna Exhibition Cen-tre. The exhibition stand, modelled on a café with anopen layout, served as a communication platform forconsultation interviews and informative discussionsin a pleasant atmosphere. In addition to very welltrained employees of the provincial head office inVienna, Ringturm KAG’s fund managers were alsopresent and they were able to answer special ques-tions on the subject of “capital investment in funds”as well.

The zeppelin with the Wiener Städtische logo, which wasflying freely in the entrance area and operated remotely,has certainly remained in the memory of all visitors tothe exhibition and advertised Wiener Städtische’s lotterygame. The daily newspaper “Die Presse” was enlisted asa cooperation partner for the lottery game. WienerStädtische’s lottery game was distributed with a sleevearound the newspaper. Approximately 20,000 copies ofthe daily newspaper were put into circulation and theresponse to completed lottery games was extremely highthanks to attractive prizes.

Advertising media catalogueAn extensive advertising media catalogue, compiledby the advertising department, is available for adver-tising drives, e.g. as customer gifts or for the appear-ance at events. The well over 100 items offered in itrange from the ballpoint pen, cigarette lighter, ash-tray and sun-shade up to exclusive and high-valuecustomer gifts – all furnished with the Wiener Städtis-che logo. As a special service for employees of thecompany, all these items in the advertising media cat-alogue may also be purchased at cost price for privatepurposes.


+++ SINCE 2003, WIENER STÄDTISCHE HAS

ASSUMED THE COMPULSORY INSURANCE FOR

THE AUSTRIAN STUDENT’S UNION. +++


ANNUAL REPORT 2003

Wiener Städtische is conscious not only of its responsi-bility to its employees and customers, but also to thegeneral public commensurate with its role in the Austri-an financial market. Therefore, it also supports a multi-tude of social institutions, events of the most diversekind or artists as well.

For example, projects from the areas of architecture, the-atre, film and music are sponsored across Austria. For itscommitment in the promotion of art and culture, WienerStädtische has already been honoured with the “Maece-nas” art sponsorship award.

Support for the refurbishment of the Stephansdom(St. Stephan’s Cathedral)The Stephansdom, the symbol of the city of Vienna, isbeing lavishly refurbished at the moment. The refurbish-ment will take up at least three years. In collaborationwith ERSTE Bank, Wiener Städtische is advertising onthe scaffolding of the almost 140 metres high southspire with large-scale billboards. The net proceeds of thecampaign are used fully by the Church for the refurbish-ment of the Cathedral. Since December 2003, thecatchy slogan “Only He understands your concerns bet-ter than us” has been resplendent on the scaffolding,which was superseded in May 2004 by “A carefree ‘GrüßGott’ *) to the new EU neighbours”.

Ringturm exhibition centreIn the now internationally known exhibition series“Architecture in Ringturm”, architecture exhibitions areregularly shown in the company’s head office with freeadmission. Four exhibitions took place in 2003:

“45 under 45 – Young architecture from Japan”(22nd October 2002 until 28th February 2003)The exhibition showed the work of the generation of youngJapanese architects, in which familiar names such asKazuyo Sejima or Yoshiharu Tsukamoto were represented.

“in/from/to: Salzburg”(29th April until 13th June 2003)Salzburg architecture was the centre of attention of thetouring exhibition. Buildings and projects were shownfrom the years 1993 to 2003. A total of 70 projects from40 teams of architects were represented from the domes-tic market and abroad, e.g. the museum at Mönchsberg.

*) Austrian for “Hello”

“Tuscany: Architecture of the modern-day”(10th July until 3rd October 2003)A selection of the most important buildings of the 20thcentury from Tuscany in Italy was exhibited in pho-tographs, original plans and models.

“Architecture in Slovakia: stimulation and reflection in Ringturm”(30th October 2003 until 12th March 2004)The exhibition was organised in collaboration with theSlovak company Kooperativa Insurance. A cross-sec-tion was shown through the Slovak architecture of the20th century. The exhibition was structured accordingto the periods of political development of the country.Original plans, drawings, photographs and modelswere viewed.

Caritas campaignsWiener Städtische’s strong commitment in the socialarea is demonstrated also in the long-standing support ofthe Austrian Caritas organisation. The Caritas Hospicecampaign from the year 2002 was also continued in2003. Wiener Städtische supported it together withERSTE Bank again as main sponsor. A life worthy ofhuman beings is made possible to the very end for criti-cally ill and dying patients.

For the year 2004, the Caritas campaign “BedroomStreet” – help for the street children in Central and East-ern Europe – is one of Wiener Städtische’s sponsorshipfocal points. The Central and Eastern Europe region isthe most important market geographically of the WienerStädtische Group and therefore support for the currentCaritas campaign is also particularly important to thecompany.

School project: “A letter to the stars”More than 500 schools participated in the wide-rangingproject. 15,000 pupils have researched the life historiesof countless Austrian victims of the Nazis. The pupilsthen wrote letters to the person, with whose history theyhad occupied themselves. Balloons with the letters roseinto the sky during a large memorial event at Helden-platz in Vienna on 5th May 2003. The information foundout by the pupils was collected and documented and lat-er it is to become a part of the holocaust centre in the“Haus der Geschichte” [House of History]. In 2003, abook also appeared with the letters that were written dur-ing the project.

SPONSORSHIP.

30

+++ WIENER STÄDTISCHE IS SUPPORTING THE

REFURBISHMENT OF ST. STEPHEN’S CATHEDRAL

WITH LARGE-SCALE BILLBOARDS. +++


The “Safety Tour” child safety OlympicsAs in previous years, Wiener Städtische was the mainsponsor in 2003 of the child safety Olympics of theAustrian Civil Defence Association. It consists of fourindividual competitions, at which elementary schoolpupils test their theoretical knowledge in civil defenceissues and are able to practice their behaviour inemergencies. The child safety Olympics 2003 wereagain an outstanding success: more than 30,000 chil-dren, supported by a thousand “visiting supporters”,had their knowledge and ability on issues of civildefence and skill proven and thus had gained self-con-fidence within the team, arranged in a playful andsporting way. The Olympics took place in each Feder-al Province, whereupon the winners from the individ-ual Federal Provinces fought for total victory in a bigFederal finale.

Altenburg convent: “Angels for angels for angels”“Angels for angels for angels” is the title of the fund-raising campaign for the refurbishment of the stone

angels of the Altenburg convent in Lower Austria. Thehistorically valuable 106 baroque cherubs (stone angels)of the convent, which was one of the founder membersof Wiener Städtische, urgently need an extensive recon-struction. It is the objective of the fund-raising cam-paign, which continues in 2004 as well, to secure thefinancing necessary for this purpose.

Cultural commitmentWiener Städtische would like to target as many people aspossible with the assistance of a broad range of art andculture events from the greatest variety of areas fromVienna to Bregenz. Through its support, Wiener Städtis-che makes the successful materialisation of the eventspossible and facilitates access to them for countlesspeople who are enthusiastic about art and culture. Asvaried as insurance itself is, so too is the spectrum ofevents that are supported by it: from the annual BregenzFestival via the Carinthian Summer Festival to the operafestivals in the St. Margarethen Roman quarry and to theZOOM Children’s Museum in the museum district, tomention just a few.


+++ WIENER STÄDTISCHE PROMOTES A MULTI-

TUDE OF SOCIAL INSTITUTIONS, EVENTS AND

ARTISTS. +++


ANNUAL REPORT 2003

Risk is our businessThe transfer of risks is the core competence of aninsurance company. The insurance business is basedon intentional and controlled dealings with risks. Theprerequisite for the long-term existence of each insur-ance company is a carefully implemented risk man-agement system. It is the task of risk management toreduce the probability of the occurrence of a risk bymeans of appropriate precautions and, if the riskstrikes nevertheless, to make its consequences con-trollable.

In Wiener Städtische, risk is identified, measured, mon-itored and controlled by highly qualified specialists in allrelevant areas of the company and business lines. Thecontrol of risks is carried out consistent with the imple-mentation of the business strategy specified by the com-pany management.

Due to new increased requirements on the part of theregulatory authorities (key word: Solvency II) and due toproduct innovations such as the capital guarantee withthe future pension plan with subsidised premiums, themethods and systems of the risk management processare fine-tuned on a continuous basis.

The significant risksWiener Städtische is exposed to a multitude of most var-ied risks in the context of its cross-border activity anddue to the progressive intensification of competition.One can roughly subdivide these risks into the signifi-cant underwriting risk for an insurance company and theequally important capital market risk and additionallyinto the country risk, counterparty default risk and theoperating risk. The risks arise due to possible future neg-ative deviations from the business plan and from theactuarial calculation of the variables that are importantfor the result.

The most significant risk categories in the technicalaccount are:

– the premium risk, which results from an inadequatepremium calculation, for example due to use of insuf-ficient statistical records and inadequately modified

mortality tables, or from an unexpectedly high claimsvolume;

– the reserving risk, from which is understood the devi-ation of reserves from the actual claim payments;

– the expenses risk, which lies in the deviation of thecalculatory expenses from the actual expenses;

– the biometric risk, i.e. the change of the biometricdata of the population;

– the trend risk and accumulation risk: one example forthe trend risk is the unexpectedly high increase fromstorms and natural catastrophes due to new climateconditions, with an accumulation risk is understood anaccumulation of possible risks.

The capital market risk is understood as the risk of achange in value of investments due to unforeseen fluctua-tions of yield curves, share prices and exchange rates. Thismay have as a consequence that the guaranteed interestrate in the life insurance policy may not be produced or acapital guarantee provided (as with the future pension planwith subsidised premiums) may not be fulfilled.

Country risk: by this is meant the risks of political andsocial changes in a country or special country-specificrisks (for example, the earthquake risk in particularlyearthquake-prone areas).

The counterparty default risk consists of the potentialloss that arises due to the deterioration in the circum-stances of a party to the contract. It includes both thecredit risk and the contracting party risk.

The operating risk refers to the potential occurrence oflosses connected with employees, legal risks, technolog-ical risks, infrastructure deficiencies as well as externalinfluences.

The risk management of Wiener Städtische hasemployed effective monitoring and control systems forthe early identification, evaluation and correct handlingof all these risks.

RISK MANAGEMENT.

32

+++ IT IS THE TASK OF RISK MANAGEMENT TO

REDUCE THE PROBABILITY OF THE OCCURENCE

OF A RISK. +++


Different risk management with property/casualtyin comparison with life and health insuranceThe risk profile of the insurance lines life and health andproperty/casualty are very different.

In life insurance just as in health insurance, the capitalmarket risk predominates, as the underwriting result isvery precisely estimated by the actuary. No significantdeviations in the total result from the calculations car-ried out beforehand are revealed, particularly with sucha large life insurance portfolio as Wiener Städtische’s,due to the law of large numbers. On the other hand, how-ever, there may be a fluctuation in the financial result,which is dependent on the current capital market situa-tion. This has been shown especially by the very difficultpast years in this sector.

In the property/casualty classes of business, major loss-es and natural catastrophes in particular affect the risk.The risk is reduced and made controllable by means ofoptimum reinsurance and the maximum diversificationbetween classes of business. Wiener Städtische has alsomade provisions for completely incalculable terroristattacks through its membership in the “Austrian Insur-ance Pool for the Coverage of Terrorism Risks”.

Future regulatory provisionsIn view of the rising number of natural catastrophesand not least also of the increased terrorism risk inconjunction with the greatly restrained global econom-

ic growth and the accompanying problematical situa-tion on the capital markets in the last few years, theregulatory authorities both in Austria and in the EU orglobally increased the risk management requirements.In the EU, the project “Solvency II” was set up, whichanalyses the regulatory provisions currently in exis-tence. It is the objective to harmonise the insuranceregulation law throughout the EU after the conclusionof the analysis. In the process, consideration shouldbe taken above all of the actual risks of an insurancecompany.

The risk management established in Wiener Städtischeover decades today already complies with the futurerequirements of “Solvency II”. This brings a significantcompetitive advantage to the company, as in this waythe impact of strategic decisions on the companyresults can be better determined in advance and thecapital more efficiently used.

Asset Liability Management (ALM)ALM is the implementation of strategic decisions withsimultaneous consideration of the assets and liabilitiesfor the attainment of optimum company results and, asa result, the prerequisite for the assessment and themanagement of the necessary risk capital, of the con-gruence between assets and liabilities (duration, cash-flow and earnings matching) and for the optimisation ofinvestment and reinsurance. ALM is a synonym for inte-grated company-wide risk management.


+++ ALM (ASSET LIABILITY MANAGEMENT) IS

A SYNONYM FOR INTEGRATED COMPANY-WIDE

RISK MANAGEMENT. +++


ANNUAL REPORT 2003

The SMILE projectTogether with SAP, the worldwide industry leader for tai-lor-made corporate software solutions, Wiener Städtischeand several Group companies are developing a total soft-ware solution for all insurance lines and all companies ofthe insurance group. The project initiated in 2002 is theworld’s biggest SAP project in the insurance sector. It isenvisaged that approximately 10,000 users will workwith it when completed.

The use of EDP is viewed from several standpoints byWiener Städtische.

– From the process-related view, EDP is the essentialbasis for the implementation of modern and customer-orientated workflows.

– From the standpoint of cost leadership, an EDP solu-tion with moderate ongoing maintenance cost isessential.

– From a forward-looking approach, it follows that EDPmust be flexible and adaptable to new requirements.

– Due to the international orientation of the insurancegroup, it is essential that the EDP can be used cross-border at different companies.

– From the standpoint of data security, the absolute reli-ability of EDP is a mandatory prerequisite.

All these standpoints are taken into consideration withthe total solution currently in development. The insur-ance administration system in development will fulfil therequirements of modern standardised workflows, takinginto consideration cost-efficiency, flexibility and datasecurity.

The project is supported by several companies of theWiener Städtische Group in Austria, the Czech Republicand the Slovak Republic. The objective – administrationof the entire new life insurance business of Kooperativa

Prague from the 1st quarter 2005 – has come withinreach. In the current financial year, test teams from allthree countries will test the software for their future usein order to ensure a smooth operation next year.

It is the long-term objective gradually to replace all sys-tems currently in use in the entire Group through thenew total solution. In this way, a considerable savingspotential will result, as the maintenance costs are lowdue to streamlined and uniform processes and theexpensive maintenance of interfaces lapses completely.However, customers will benefit due to the new system,primarily through an even quicker processing of all busi-ness matters.

The new sales force system NADS 2A new sales force system based on SAP is being devel-oped at present for the support of client advisors inWiener Städtische. Furnished with new software for thepreparation of offers, the recording of customer and pol-icy details will be facilitated. Due to the electronic trans-fer of the insurance application data from the laptop ofthe sales force employee to the central mainframe, theprocessing of applications will be considerably simplifiedand accelerated.

NEXA – The new order system for expertsAnother step to the paperless office was taken in 2003in claims handling. A tool is available to the claimsdepartment with NEXA to administer frequently occur-ring business processes completely electronically. Com-munication both with the expert and with the workshopsis already carried out predominantly without paper.Through the use of new technology, incoming fax mes-sages are not printed out, but provided to the specialistdirectly on the screen. The improvements attained in theworkflow of the claims departments benefit the customerdue to the quicker processing of business matters.

ELECTRONIC DATA PROCESSING.

34

+++ THE SMILE PROJECT INITIATED IN 2002

IS THE WORLD’S BIGGEST SAP PROJECT IN

THE INSURANCE SECTOR. +++


The year 2003 was shaped by a number of seriousnatural peril events, according to a Munich Re analy-sis. A third of the approximately 700 events recordedin the Munich Re study was apportionable to stormsand bad weather in 2003, from which fortunatelyEurope remained spared to a great extent.

The most conspicuous natural event in Europe in thepast year was the extreme heat and drought of thesummer. This exceptional heat wave and the everclearer increase worldwide in weather extremes areevidence above all for climate change. They show thatnew weather risks and greater loss potential should beexpected in future.

The conclusion of the study is that the insuranceindustry also has to continue to trade consistently dueto the intensified risk situation. For example, morethan ever it has to agree liability limitations and pre-miums adequate to the risk.

The performance of the market in AustriaIn property and casualty insurance, accounted premi-um income increased by 6.5% in 2003 to EUR 6.12billion. After the flood disaster in 2002, the insur-ance industry has remained spared from similarevents in 2003 and the total amount of claim pay-ments has therefore decreased again from the veryhigh level of the year 2002. Overall, claim paymentsamounted to EUR 4.21 billion in 2003, which repre-sents a minus of 5.8% compared with the previousyear. Austria remained largely spared from naturalcatastrophes in 2003 except for a serious hailstormon 13th May.

Wiener Städtische’s resultEven in 2003, Wiener Städtische was again able toincrease its premium income to a much greaterextent than the insurance market. Gross earned pre-miums increased in 2003 by 9.1% to EUR 791.24million. In addition to the exceptionally good salesresult of last year, this growth is also partly attribut-able to the underwriting adjustments to the premiumcalculation in the large risk division already initiatedin 2002. It should be taken into account also thatWiener Städtische’s premium income in 2003 fullyincludes for the first time the insurance portfolio ofthe former Montanversicherung assumed as of1.7.2002, whereas in the comparable figures for the

year 2002 the premiums of Montanversicherung areonly included for the period from 1.7.2002 to31.12.2002.

In 2003, the expenses for insurance claims fell by2.2% compared with the previous year to EUR490.85 million. This could be accomplished in spiteof the hailstorm in May, which resulted in a chargeon the results of property and casualty insurance ofEUR 11.9 million overall, whereby approximatelyEUR 7.3 million of this was apportioned to the motorhull class of business. Operating expenses amountedto EUR 194.48 million in 2003, which correspondsto an increase of 2.7%. The combined ratio could beimproved considerably once again in the financialyear 2003, compared with the previous year.

Motor insuranceGross earned premiums increased across all motorclasses by 9.4% compared with 2002 to EUR 275.60million in 2003. This excellent result, which was con-siderably above the growth in the Austrian insurancemarket in the motor classes, was primarily attribut-able to the strong increase in new policies. In addi-tion, a tariff adjustment was effected in motor vehicleliability insurance, but which at 2.9% turned out tobe very moderate and considerably smaller than theincrease in motor vehicle repair costs. It should bementioned also that no tariff increase was applied inmotor hull insurance in 2003.

In 2003, expenses for insurance claims in all motorclasses increased by 17.7% compared with 2002and amounted to EUR 205.22 million. As a result,the loss ratio deteriorated by almost 6 percentagepoints to approximately 75%. This deterioration wasprimarily attributable to the hail damage in May2003.

ANNUAL REPORT 2003

PROPERTY AND CASUALTY INSURANCE.

35

+++ WIENER STÄDTISCHE WAS ABLE TO INCREASE

THE PREMIUM INCOME IN PROPERTY AND CASU-

ALTY INSURANCE BY 9.1 PER CENT. +++


KEY FIGURES FOR PROPERTY AND CASUALTY INSURANCEin EUR million 2003 Change over 2002

Gross earned premium 791.24 +9.1%

Gross expenses for490.85 –2.2%insurance claims



ANNUAL REPORT 2003

However, motor vehicle repair costs (+4.4% in 2003),which have risen above the rate of inflation in the pastyear, and the increased number of injured people in roadtraffic were also further causes for the higher claims pay-ments compared with the previous year.

The chart shows the movement in the average premiumand in the policy count in motor vehicle liability insur-ance. The average premium in 2003 has increased in

absolute terms compared with 1997 by EUR 17(+5.57%). The policy count has risen by 12% in thesame corresponding period.

In motor hull insurance, the premium grew by EUR 50(+10.71%) overall over the period from 1997 to 2003.The number of policies has increased by 30.6% in thesame period.

Both charts quite clearly show the drop in the averagepremium level at Wiener Städtische up to the year 1999.In spite of increasing claims, essential premium increas-es could not be implemented due to the price war in theAustrian motor insurance market. Several competitorsattempted to gain market share and customers with anaggressive price policy. In fact, Wiener Städtische didnot fight for customer share with give-away prices, butlikewise was not able to avoid increasingly granting dis-counts and not implementing premium adjustments.The price war in the market resulted in a hefty charge onthe results of the motor classes of all insurance compa-nies. There was a rethink only in the last few years andessential premium adjustments could again be imple-mented, at least in part. Nevertheless, even in 2003 theaverage premium – taking into account inflation – wasstill below the level of the year 1997.

Non-motor classesIn 2003, Wiener Städtische was able to achieve anexcellent premium growth in the non-motor sector andincrease gross earned premiums by 8.9% to EUR515.65 million. It was possible to excellently positionthe newly developed insurance product “Business Class”in the market – a flexible comprehensive commerciallines insurance policy that was specifically devised forthe small and medium-sized businesses that are soimportant in Austria.

“Business Class” – Security for every entrepreneurWith the new “Business Class”, Wiener Städtische offersa completely revamped insurance package for small andmedium-sized businesses from practically all lines ofbusiness. By means of a flexible building block princi-ple, it is straightforward to adapt the scope of cover andthe level of cover to the most varied needs of the differ-ent companies. A comprehensive basic coverage may beextended, on request, to a comprehensive insurancepackage with optimum protection by means of freelycombinable additional insurance policies.

PROPERTY AND CASUALTY INSURANCE.

36

+++ IT WAS POSSIBLE TO EXCELLENTLY POSI-

TION THE NEWLY-DEVELOPED INSURANCE PACK-

AGE “BUSINESS CLASS” IN THE MARKET. +++


350

300

250

200

150

100

50

01997 1998 1999 2000 2001 2002 2003

MOVEMENT IN THE AVERAGE PREMIUM AND IN THE POLICY COUNT IN MOTOR VEHICLE LIABILITYINSURANCE AT WIENER STÄDTISCHE

305

100.0%

255

105.4%

258

106.3%

277

106.4%

300322

107.9%

112.0%275

102.8%

Average premium Policy count

550

500

450

400

350

300

250

200

150

100

50

01997 1998 1999 2000 2001 2002 2003

MOVEMENT IN THE AVERAGE PREMIUM AND IN THE POLICY COUNT IN MOTOR HULLAT WIENER STÄDTISCHE

467

100.0%

403

118.0%

410

123.7%

446

126.0%

483517

130.6%

128.0%430

107.0%

Average premium Policy count

The strength of Wiener Städtische as an all-round insur-er, which has a suitable product on offer for any sectorof the economy, is demonstrated with its broad productrange – from the New Severance Plan via the new “Busi-ness Class” to the Future Pension Plan.

Unrivalled motorcycle tariffSince March 2003, Wiener Städtische has been theunbeatable partner in third-party liability and hullinsurance for motorcycle enthusiasts and hobby bik-ers. Wiener Städtische has introduced the power-weight ratio as a rating criterion in motorcycle insur-ance and was the first insurance company in themarket to do so. It is calculated from the power of theengine and the weight of the two-wheeled vehicle.Motorcycles with a power-weight ratio less than 0.28kW/kg and – in hull insurance – with a list price

greater than EUR 18,000, therefore the bigger andheavier bikes, are preferred, for which premiums thatare favourable and adequate to the risk may beoffered.

Legal expenses insurance even more advancedLegal expenses insurance was also revamped in thefinancial year 2003. Since last year, Wiener Städtischehas also offered its legal expenses insurance to self-employed people, as private individuals, and with anextended range of benefits. The protection of the insur-ance policy now also extends to extrajudicial mediationand to the diversion programmes in legal criminal pro-ceedings. In the event of disputes arising from a con-tract, Wiener Städtische’s customers enjoy insuranceprotection with immediate effect not only in Austria, butalso in the entire European economic area.


+++ WITH AN UNBEATABLE TARIFF, WIENER

STÄDTISCHE IS THE IDEAL PARTNER FOR

MOTORCYCLE ENTHUSIASTS. +++


ANNUAL REPORT 2003

State health insuranceIn contrast to countries such as the USA, state healthinsurance in Austria is very well developed. Approxi-mately 99% of the Austrian population have a statu-tory health insurance policy that offers basic medicalhealth provision.

However, the long-term ability to finance state healthinsurance with its current range of benefits is thesubject of intense discussions due to constantlyincreasing costs in public health. The discussionreached a temporary peak in April 2004 with thecontroversy regarding the modification to the con-tract between the Vienna Regional Health InsuranceScheme and the General Medical Council [Ärzte-kammer].

The benefits under the private health insurance policyPrivate health insurance policies mainly offer supple-mentary insurance policies to the social security insur-ance. The most important benefits of private healthinsurance are the free choice of doctor and the muchhigher degree of comfort in the priority category in theevent of a hospital stay. In addition, a lot of customersalso have a daily benefits insurance policy, whichcushions the financial burden of a hospital stay.

For example, return transportation from abroad is notcovered by the state health insurance and generallyonly a small part of the costs actually accrued is reim-bursed by the social security insurance with hospitalstays abroad. Wiener Städtische is the second-biggestAustrian health insurance company with a marketshare of approximately 20% and 200,000 priority cat-egory policyholders. It offers a broad spectrum ofhealth insurance products of all kinds.

Wiener Städtische’s resultThe gross earned premium income in health insur-ance amounted to EUR 271.84 million in the pastfinancial year 2003. As a result, an increase of 3.0%could be booked compared with the year 2002. Theexpenses for insurance claims in the year 2003amounted to EUR 233.46 million, which representsan increase of 5.7% on the previous year. This 5.7%increment in expenses for insurance claims resulteddue to the increase in the funding of the ageing pro-vision included in it.

The ageing provision ensures the financing of futureclaims regardless of demographic movement. The levelof the expenses for insurance claims without taking intoaccount the funding of the ageing provision is barelyabove the level of the previous year with just a smallincrease of 1.4%.

“Day by day money”With “day by day money for beginners”, WienerStädtische has developed a health insurance policyespecially for young people. One is protected againstthe financial drawbacks of a hospital stay for just sixeuro a month. The benefits package includes a dailybenefit in the event of a hospital stay, refund of costsfor an accompanying person with insured children upto the 12th year of life, repatriation within Austria intoa hospital in proximity to the place of residence,worldwide refund of costs for hospital treatment afteraccidents or acute illnesses, medical fees and medi-cines and, of course, also worldwide return transporta-tion with air rescue.

Priority category – more advantages than a private patientThe priority category offers the best possible medicalhealth provision throughout life through the free choiceof hospital and doctor. A priority category patientreceives appointments faster and is entitled to a 2-bedroom with continuous visiting hours. The full costs ofan inpatient therapeutic treatment, even in a privatehospital, are borne by Wiener Städtische.

As a special service, new customers may now claima comprehensive health check every two years,including detailed discussion of the results ascer-tained with a consultant. A preventive care exami-nation may save long hospital stays and result infaster recovery.

HEALTH INSURANCE.

38

+++ WIENER STÄDTISCHE HOLDS A MARKET

SHARE OF APPROXIMATELY 20 PER CENT IN

HEALTH INSURANCE. +++


KEY FIGURES HEALTH INSURANCE in EUR million 2003 Change over 2002


Gross expenses for233.46 +5.7%insurance claims*)


Result on4.03 n.a.ordinary activities

*) including the change in the actuarial reserve

As a special incentive to conclude a priority categoryinsurance policy now, Wiener Städtische is waiving theenforcement of the excess in the indemnity event withall new customers with low-cost excess rates – until theend of 2009. Wiener Städtische also took a customer’swish into account in the previous year and introducedexcess rates for the individual federal provinces.

“Live Better” – the supplementary package for thepriority category or for the pension insurance policyThe supplementary package “Live Better” is a positivecontribution to a healthier way of life. After the conclu-sion of “Live Better”, there is a choice of three benefitspackages: a stay in a wellness hotel, membership of a fit-ness club or a comprehensive health check. And thatevery two years. In addition, “Live Better” offers anoth-er range of services: in the event of a hospital stay, forexample, Wiener Städtische assumes the costs fordomestic help. So far, approximately 40,000 customersof Wiener Städtische have already opted for “Live Bet-ter” in order to be able to use these benefits.

Health without limits with “worldwideMED”“worldwideMED” presents itself as an attractive supple-ment to Wiener Städtische’s priority category insurancepolicy. Insurance protection in Austria is extended to theentire world with “worldwideMED”. As a result, the bestdoctors may be utilised on a worldwide basis in the eventof incidents.

“worldwideHELP”The priority category insurance policy “worldwideHELP”guarantees optimum medical health provision after anaccident – this too on a global basis. It is an excellentproduct above all for active and travel-enthusiastic youngpeople and sports fans. The benefits include either a dai-ly benefit or a stay in the priority category, the assump-tion of rescue costs, a cash invalidity payment and thefinancing of cosmetic operations after an accident. If, in aspecial case, treatment is not possible in Austria, the insur-ance assumes the costs of the treatment, including trav-el expenses to a special foreign clinic specialising in it.

Wiener Städtische’s private clinicsIn order to be able to organise the hospital stay to beas agreeable as possible for its policyholders in theevent of sickness, Wiener Städtische also participatesto a considerable extent in several of the leading pri-vate clinics in Austria. This involves the Döbling andJosefstadt (Confraternität) private clinics in Vienna,the Villach, Wehrle (Salzburg), Maria Hilf (Klagenfurt)private clinics and the Graz-Ragnitz private clinic. Theprivate clinics offer the ambience of a first-class hotelfurnished to a high quality and in the process theycover a spectrum of services, which includes practi-cally all medical sectors. At the same time, the hightechnical capability of the medical personnel shouldbe stressed in particular. The greatest importance isattached also to the personal devotion to and individ-ual care of the patients.

Senior citizen residences – for a comfortable retirementSome of the most beautiful and most modern seniorcitizen residences in Austria also belong to WienerStädtische. Thus, the senior citizen residences AmKurpark in Vienna Oberlaa, Mirabell in Salzburg andMartinsbrunnen in Dornbirn are solely owned byWiener Städtische and Wiener Städtische has amajority interest in the Velidenapark senior citizenresidence in Innsbruck. The senior citizen residencesare optimally organised so that their residents canenjoy their retirement with all conceivable comfort.The high standard of quality of the senior citizen res-idences is also guaranteed by the ISO-9001:2000certification.

Support of prevention measuresIn close collaboration with cancer relief in Austria,Wiener Städtische arranged evening lectures in all fed-eral provinces in 2003. The central elements were thetopics “healthy nutrition” and “breast cancer”. On thesubject of the risk of ticks, lectures were conducted inareas particularly at risk in collaboration with the asso-ciation “Self-help for Tick Victims”.


+++ THE PRIORITY CATEGORY INSURANCE

POLICY “WORLDWIDEMED” GUARANTEES OPTIMUM

MEDICAL HEALTH PROVISION WORLDWIDE. +++


ANNUAL REPORT 2003

The state pension insurance policy The state pension insurance policy in Austria involves apension plan system financed by contributions. At pre-sent, it is subject to the serious influences of demo-graphic change. Schooling and training periods arebecoming ever longer, happily life expectancy is improv-ing steadily, while at the same time the periods of con-tribution payments for the statutory pension insurancepolicy for those gainfully employed are reducing evermore. The low birth figures complicate the position fur-ther, which leads to the situation that ever fewer youngpeople must finance the pensions of a steadily growingnumber of pensioners.

In the longer-term, the economic conditions of the exist-ing pension scheme have to be correspondingly adjustedin order to maintain the ongoing ability to finance. Thelegislator is attempting to achieve this, in that he is rais-ing the average retirement starting age and at the sametime lowering the average pension size.

The pensions reform approved by parliament in2003, which came into force on 1st January 2004,is based on these measures as well. Since the retire-ment starting age has already been massively raisedwith the pensions reform in 2000, the corner pointsof the new pensions reform are the gradual harmoni-sation of the early retirement age to the normalretirement age, the extension of the calculation peri-ods and the reduction of the increment percentages.

Increasing importance of the private pensionThe private pension plan becomes more and more impor-tant for these reasons. The majority of Austrians haverecognised that the creation of a second pillar in addi-tion to the state pension is indispensable for retirementprovision in order to be able to maintain the standard ofliving even in retirement. The undisputed number onepension product is life insurance. In 2003, almost sixbillion euro in premiums throughout Austria flowed intoprivate life insurance. The legislator also gave a clearsignal in the past year on the need for a private pensionthrough the creation of the future pension plan with sub-sidised premiums.

Wiener Städtische leaves market growth farbehind itWiener Städtische, with its multitude of excellentproducts, is the number two in the Austrian life

insurance market after s Versicherung, which spe-cialises exclusively in life insurance policies. With anincrease in accounted premiums of 13.2%, the mar-ket could be outperformed quite considerably as itincreased by just 1.7%.

The success of the financial year 2003 is demon-strated in particular in the single-premium policysector – while the insurance market contracted by15.9%, Wiener Städtische’s premiums from single-premium policies increased by 5.9% compared withthe year 2002. Even with products against a renew-able premium, Wiener Städtische accomplished aconsiderably higher growth rate than in the marketwith an increase in accounted premiums by 17.3%,while the market was able to increase accountedrenewable premiums by 9.8% overall.

Wiener Städtische’s resultThe huge interest in private pensions has made it possi-ble in the financial year 2003 for Wiener Städtische tohave the highest production in life insurance since itsfoundation. Gross earned premiums could be increasedby 13.4% compared with the year 2002 to EUR 710.23million. EUR 499.17 million (+ 16.9%) of this wasapportioned to life insurance policies with renewablepremium payment and EUR 211.06 million (+ 5.9%) tosingle-premium policy products. New business in unit-linked life insurance, especially the “Premium Pension”product launched by Wiener Städtische in the context ofthe future pension plan with subsidised premiums, hascontributed above all to the excellent growth in renew-able premium.

An excellent sales result was also achieved with thesingle-premium policy products, particularly with theaid of the “Limited Edition” products, which were verywell regarded by the market.

LIFE INSURANCE.

40

+++ WIENER STÄDTISCHE WAS ABLE TO

ACHIEVE A RECORD RESULT IN THE LIFE

INSURANCE CLASS IN 2003. +++


KEY FIGURES LIFE INSURANCE in EUR million 2003 Change over 2002


Gross expenses for734.66 +20.2%insurance claims*)



*) including the change in the actuarial reserve

Gross expenses for insurance claims increased by20.2% in 2003 compared with the previous year.This high growth rate is primarily attributable to thematuring of the 15-year tax-privileged policies con-cluded in 1988, but it should be noted here that aconsiderable proportion of the disbursements contin-ues to be invested with Wiener Städtische. Theincrease of 33.2% with the gross expenses for insur-ance operations is based on the increased commis-sions due to the excellent sales result.

Profit participationIt has been possible for the year 2003 as well forWiener Städtische to credit a profit participation to allcustomers who either already have an additional privatepension or have concluded a pension plan insurancepolicy against a renewable premium, taking as a basis atotal distribution of five per cent.

This performance shows that an annuity insurance poli-cy is an excellent instrument for personal retirement pro-vision. A distribution of 5% is considerably more thanthe currently achievable yields of most other secureforms of investment. In addition to the tax advantages ofa life insurance policy, one should also take into accountadditionally that, with a life insurance policy, an annualminimum distribution is certainly guaranteed to the lev-el of the statutory actuarial interest rate with the con-clusion of the policy.

Market leadership with the “Premium Pension”The “Premium Pension” provided a significant con-tribution to the record result for Wiener Städtische.

The law approved by the Federal Government on thefuture pension plan with subsidised premiums cameinto effect at the start of 2003. The objective of thestate support for a private life insurance policy is aneasing of the state pension scheme by means of theprivate pension plan. Wiener Städtische, which hasdevised and launched a product for the future pen-sion plan with subsidised premiums – the “PremiumPension” – as the first Austrian insurance companyto do so, was able to sell approximately 55,000 unitsoverall in 2003 and thus quite clearly take over themarket leadership in Austria.

The advantages, which have turned the “PremiumPension” into a sales success, are amongst other fac-tors the tax exemption (no insurance tax, no incometax and no capital gains tax with retirement) and the100% capital guarantee when choosing a lifelongpension – in addition to the state premium. The lev-el of state encouragement is determined all overagain each year. For the year 2003, it amounted to9.5% of the insurance premium paid-up, for 2004 itcomes to a still extremely interesting 9%, particular-ly in the current low-interest phase.

The investment of the deposited premiums of the“Premium Pension” is effected in Wiener Städti-sche’s cover fund for 60% and in Ringturm KAG’s“Future Pension Plan Equity Fund” for 40%, whichinvests solely in first-class Austrian shares and wasable to achieve a performance of 22.4% in 2003.Apart from the state encouragement, there wasanother additional benefit module from WienerStädtische in 2003 for Wiener Städtische’s “Premi-um Pension” customers, the loyalty bonus. This loy-alty bonus, whose level corresponds to the premiumspaid by the customer, is provided when drawing thepension. In addition, as an attractive additional mod-ule to the “Premium Pension”, Wiener Städtischeoffers protection with the additional insurance policy“Family Plus” (premium waiver in the event of sick-ness, during maternity leave and a period of rest at afamily hospice).

The age distribution of the policyholders is alsoworth noting with the “Premium Pension”. Approxi-mately 15% of the insured people are under 20 yearsold. This happens therefore because many parents oreven grandparents, with the conclusion of a “Premi-


+++ THE “PREMIUM PENSION” CONTRIBUTED A

CONSIDERABLE PORTION OF THE HIGH PREMIUM

GROWTH. +++


700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

01999 2000 2001 2002 2003

PREMIUM DEVELOPMENT FOR LIFE INSURANCE

Renewable premium Single-premium policies

ANNUAL REPORT 2003

um Pension”, have right then laid the foundationstone for an additional private pension for their chil-dren or grandchildren.

The decline, feared by a few, in the traditional life insur-ance policy in favour of the “Premium Pension” has notoccurred at Wiener Städtische. Even the premiumincome of the traditional life insurance policy could beincreased considerably in the financial year 2003.

“Limited Edition QUATTRO”At the start of 2003, another product of this rangewas developed by Wiener Städtische due to theexcellent sales success of the pension product “Lim-ited Edition – two for the price of one”, which waslaunched in 2002 and sold out within a short period:“Limited Edition – Best of Best”. This successorproduct was also very well regarded by the marketand was completely sold out some time in the firstquarter 2003.

After the major sales success of the present single-premium policy products of this range, the best seller“Limited Edition” went into the third edition in theautumn of 2003 with the product “QUATTRO”.“QUATTRO”, with a minimum deposit of EUR 5,000and a term of 12 years, offers annual annuity pay-ments even after 6 years. The capital guarantee andthe 80% peak level guarantee of the structured bondunderlying the product (QUATTRO bond, issued byErste Bank, coupled to the MSCI World index) safe-guard the success of the investment. Furthermore, the“Limited Edition QUATTRO” is combined with protec-tion against death. It amounts to the current value ofthe investment, but 100% of the capital employed asa minimum, net of annuities already paid out. In fact,

in the event of accidental death, the guaranteed pro-tection amounts to 150% of the capital employed. The“Limited Edition QUATTRO”, appearing in a limitededition with its extraordinary extras and high yieldprospects, is an extremely attractive form of invest-ment-orientated insurance.

“United Funds of Success” – Wiener Städtische’s unit-linked life insurance policy“United Funds of Success” is the successful combi-nation of risk protection and capital investment indifferent investment funds. In this way, the customerprotects his relatives with the unit-linked life insur-ance policy – and has the opportunity at the sametime to build up sizeable assets for his own future.“United Funds of Success” consists of the mostpromising investment fund in the world, carefullyselected according to strict criteria – according torisk diversification, continuity, international orienta-tion and yield opportunity.

The customer has the freedom as well to choose theinvestment strategy and the management of the fundand may choose between renewable and single addi-tional contributions depending on his individual sit-uation in life. There is the option to arrange partialdisbursements at any time as well as to change fundswithout charges. The customer may also individuallyprotect his profits already obtained by switchingthem into funds with VAG-Garantie, i.e. with a guar-anteed interest rate.

In addition, the unit-linked life insurance policyenjoys the same tax advantages as the traditional lifeinsurance policy: neither capital gains tax norincome tax is accruable.

LIFE INSURANCE.

42

+++ THE SUCCESSFUL SINGLE-PREMIUM POLICY

RANGE “LIMITED EDITION” WENT INTO THE THIRD

EDITION WITH THE PRODUCT “QUATTRO”. +++


Economic trendThe international economic recovery appears to begathering momentum more and more in the currentyear. In addition to the USA, the Japanese economyalso shows signs of a sustainable recovery for the firsttime – economic growth even exceeded that of the USAin the fourth quarter. This upward trend has so farbarely reached the euro zone and, in the German man-ufacturing sector, expectations for the business envi-ronment clouded over again in the end. However, Aus-trian companies viewed future development this yearwith increased optimism. After an actual GDP gain of0.7% in Austria in 2003, an increase of just under 2%is anticipated for the year 2004.

Capital market trendThe world stock markets performed extremely positivelyin the first two months of the year 2004, though therewas a consolidation phase in March 2004. For the restof the year, a cautiously positive share price movementin the stock markets should be expected, though stockmarket rallies appear rather unlikely after the experi-ences of the years 2000 to 2003.

The current low-interest phase appears to be drawing toa close and a moderate increase in base rates is expect-ed in the course of the year by a majority. This meansimpending exchange losses with the fixed-interest secu-rities with a low coupon issued in the past year. WienerStädtische has limited its risk in this area by means ofthe increased investment in structured products withvariable interest rates.

Prognosis for the Austrian insurance industryThe following assumptions on the development of pre-mium income in the Austrian insurance market originatefrom the current forecast of the Austrian Association ofInsurance Companies (VVO).

In life insurance, it should be assumed that the growthin premium income against a renewable premium(2003: +10%) slackens somewhat in 2004, but a con-siderable growth should still be expected in this sec-tor amounting to approximately 8%. Yet, as in 2003also, the strongest impetus for growth will emanatefrom the future pension plan with subsidised premi-ums. In the area of single-premium policies, as in theyear before, a further drop in premium income is prob-able for 2004 as well.

Since premiums in the property and casualty class havecertainly developed very dynamically for the third timenow in relation to the subdued macroeconomic perfor-mance, a slackening of the strong revenue momentumshould be assumed for the current year 2004. After agrowth of 6.5% in 2003, an increase of approximately4.5% should be expected for 2004.

A moderate decrease in the premium momentum to +3%is anticipated for health insurance.

Wiener Städtische in 2004Since the topics “pensions reform” and “private pen-sion” again rank among the focal points of domestic dis-cussion in 2004 as well and this will probably remain sotoo, it should be assumed that Wiener Städtische’s pen-sion products will also provide a substantial contributionto premium growth in the current year 2004.

In the single-premium policy sector, the continuation ofthe “Limited Edition” range, which was so successful inprevious years, is envisaged with a new product at mid-year. This will involve the fourth “Limited Edition” product since the year 2002 as well.

In the property and casualty sector, a restructuring of theold policies that were not appropriately rated, particular-ly in the large risks sector, has already resulted in thepast two years, therefore a somewhat lower premiumincrease should be expected for the current year than in2003 (+9.1%). Also, the lapsing of the positive premi-um effect through the assumption of Montanver-sicherung, whose insurance portfolio was taken over byWiener Städtische in the second half-year 2002, willresult in a decline in the high premium increase of theyear 2003 in the property and casualty classes.

In the motor classes, the main focus in the current yearwill also be on the generation of premiums that covercosts. In particular, repair costs that are continuously ris-

ANNUAL REPORT 2003

OUTLOOK FOR THE FINANCIAL YEAR 2004.

43

+++ THE PREDICTED ECONOMIC UPTURN ALLOWS

THE INSURANCE SECTOR TO LOOK FORWARD

WITH OPTIMISM. +++


PREMIUM MOMENTUM IN THE INSURANCE MARKET2001 2002 2003 2004

(Estimate)

Life +8.2% –2.0% +1.7% +5.8%

Property/casualty +5.9% +5.8% +6.5% +4.5%

Health +4.1% +3.9% +3.8% +3.0%

Total +6.8% +1.9% +4.1% +4.9%

(Source: VVO, accounted premiums)

ANNUAL REPORT 2003

ing considerably above inflation will make premiumadjustments necessary in the motor classes.

Further expansion of customer servicesWiener Städtische will also expedite employee strength-ening in the area of consumer advice in 2004. A furtherexpansion of the sales force on the permanent staff isplanned. Measures will be effected in line with that inorder to further raise the high level of training of theclient advisors. This is essential in order to be able tofind the optimum solution for the most varied needs ofcustomers in the insurance landscape that is becomingever more complex.

The continuation of the adjustment of organisationalstructures to market circumstances is also indispensablein the current year. The utilisation of earnings enhance-ment capacities and an increase in efficiency will also beprimary objectives in the coming years with the aim ofsafeguarding the position as the leading Austrian insur-ance company in Central and Eastern Europe for thelong-term.

New logo for Wiener StädtischeAfter almost two decades, the Wiener Städtische logowas reworked in the first quarter. The tulip was mod-

ernised and now has a more dynamic effect. Theshapes are softer and rounder. The flower and theleaves of the tulip have a more natural effect – secu-rity, trust and reliability are the focal point of the mes-sage of the new logo.

The introduction of the reworked logo is being effectedgradually in the course of the year 2004. Since the logois on all policies, sales documents and also on the sta-tionery, the complete conversion to the new logo will takesome time. Existing stocks of printed forms with the oldlogo will not be destroyed, but used up for the purposesof economic trading. The fitting out of the agencies andbranches with the new logo will now be carried out grad-ually as well.

New advertisement with father and sonThe already very well known and popular father-son duofrom the Wiener Städtische advertisement (“cakes”advertisement from 2002, “bedfellows” from 2003) willalso be seen on the screen again across the country inthe current year. Since the “petrol station” advertise-ment with the two actors has already been runningextremely successfully since the start of March 2004, anew advertising campaign with the two as the leadingactors is currently in production.


44

+++ A HIGH PREMIUM GROWTH CONTINUES

TO BE EXPECTED IN THE LIFE INSURANCE

CLASS. +++


ANNUAL REPORT 2003

PROPOSAL FOR DISTRIBUTION OF PROFITS.

45

+++ THE DIVIDEND PROPOSAL IS INCREASED

CONSIDERABLY FOR 2003 COMPARED WITH THE

FINANCIAL YEAR 2002. +++


The Wiener Städtische Allgemeine VersicherungAktiengesellschaft has concluded the financial year2003 with a net profit of EUR 20,036,756.48. Thefollowing distribution of profits will be proposed at theordinary Annual General Meeting:

The 10,986,800 ordinary shares will receive a divi-dend of EUR 1.40 per share. Overall, a distribution ofEUR 15,381,520 will be effected to ordinary shares.

The 1,350,000 preference shares will receive a divi-dend of EUR 3.15 per share. Overall, a distribution ofEUR 4,252,500 will be effected to preferenceshares.

After distribution of the dividend of EUR 19,634,020 intotal, the remaining net profit of the financial year 2003amounting to EUR 402,736.48 should be carried overto the new account.

Dr. Günter Geyer Dr. Franz Lauer

Kurt Ebner Dr. Rudolf Ertl

Dkfm. Karl Fink

Mag. Christian Brandstetter

Ing. Mag. Robert Lasshofer

The Managing Board:

Vienna, April 2004

ANNUAL REPORT 2003

BALANCE SHEET AS OF 31st DECEMBER, 2003

46

WIENER STÄDTISCHE INDIVIDUAL FINANCIAL STATEMENT

ASSETS PROPERTY & CASUALTY

in EUR

A. Intangible Assets

I. Expenditure for the acquisition of an insurance portfolio 11,900,000.00

II. Other intangible assets 11,573,184.63

TOTAL INTANGIBLE ASSETS 23,473,184.63

B. Capital assets

I. Land and buildings 197,424,295.30

II. Capital assets in affiliated companies and participating interests

1. Shares in affiliated companies 250,867,182.52thereof gain from restructuring

2. Bonds and other securities from affilliatedcompanies and loans to affiliated companies 67,223,767.27

3. Participations 19,819,905.22

4. Bonds and other securities from and loans to companies with which a shareholding relationship exists 14,279,943.81 352,190,798.82

III. Other capital assets

1. Shares and other non fixed-interest securities 85,113,176.03

2. Bonds and other fixed-interest securities 23,528,225.61

3. Shares in jointly-owned capital assets 0.00

4. Mortgage receivables 79,641,320.63

5. Advance payments on policies 0.00

6. Other loans 48,084,722.77

7. Deposits at banks 79,052,439.36 315,419,884.40

IV. Deposit receivables from the assumed reinsurance business 1,145,247.24

TOTAL CAPITAL ASSETS 866,180,225.76

C. Capital assets of the unit-linked and index-linked life insurance policies 0.00

D. Receivables

I. Receivables from the direct insurance business

1. from policyholders 62,978,425.62

2. from insurance intermediaries 11,294,605.05

3. from insurance companies 2,784,241.80 77,057,272.47

II. Accounts receivable from the reinsurance business 26,163,038.30

III. Other receivables 66,725,128.71

TOTAL RECEIVABLES 169,945,439.48

E. Pro rata interest 2,077,108.09

F. Other assets

I. Tangible assets (excluding land and buildings) and inventories 20,367,680.29

II. Cash at banks and cash in hand 109,125,231.86

III. Other assets 36,083,400.98

TOTAL OTHER ASSETS 165,576,313.13

G. Accruals and deferrals

I. Shortfall as per Article X, Paragraphs 3 and 4of the Austrian Financial Reporting Act [RLG] 0.00

II. Tax deferral on the assets side 29,428,214.80

III. Other deferred charges 21,759,700.09

TOTAL DEFERRED CHARGES 51,187,914.89

H. Offsetting items between the departments 41,871,254.99

Balance sheet total 1,320,311,440.97



HEALTH LIFE TOTAL BUSINESS IN 2003 2002

in EUR ’000

0.00 0.00 11,900,000.00 13,300

0.00 930,737.74 12,503,922.37 6,174

0.00 930,737.74 24,403,922.37 19,474

76,238,952.67 344,064,357.90 617,727,605.87 632,711

30,375,309.14 555,855,182.10 837,097,673.76 811,1988,883,755.76 8,883,755.76 8,884

10,006,693.87 203,943,064.87 281,173,526.01 253,926

35,073,332.71 183,465,595.63 238,358,833.56 215,996

12,533,641.97 87,988,977.69 34,294,384.33 977,558,226.93 61,107,970.11 1,417,738,003.44 69,608

333,461,303.38 1,509,525,075.06 1,928,099,554.47 2,205,562

80,491,603.26 1,544,378,297.66 1,648,398,126.53 1,082,852

0.00 75,724,719.46 75,724,719.46 68,735

65,501,442.09 153,821,742.70 298,964,505.42 319,512

0.00 22,120,088.44 22,120,088.44 23,207

75,455,601.56 684,848,868.53 808,389,192.86 862,122

11,102,111.11 566,012,061.40 85,918.24 3,990,504,710.09 90,240,468.71 4,871,936,655.89 201,429

1,065,161.40 90,266,895.05 92,477,303.69 89,992

731,305,153.16 5,402,394,189.97 6,999,879,568.89 6,836,850

0.00 301,140,307.14 301,140,307.14 152,886

4,142,844.63 28,396,539.10 95,517,809.35 75,572

0.00 6,434.12 11,301,039.17 9,116

606,824.22 4,749,668.85 321,600.66 28,724,573.88 3,712,666.68 110,531,515.20 4,806

5,980,995.16 4,111,165.07 36,255,198.53 52,979

1,781,820.70 11,990,271.88 80,497,221.29 109,795

12,512,484.71 44,826,010.83 227,283,935.02 252,268

2,395,107.48 78,451,684.38 82,923,899.95 73,667

0.00 58,732.88 20,426,413.17 21,015

1,194,760.79 19,827,869.41 130,147,862.06 61,157

1,771,600.00 7,559,313.01 45,414,313.99 17,589

2,966,360.79 27,445,915.30 195,988,589.22 99,761

0.00 15,213,637.43 15,213,637.43 18,838

1,900,114.18 5,581,515.08 36,909,844.06 18,046

130.80 9,929,402.57 31,689,233.46 27,654

1,900,244.98 30,724,555.08 83,812,714.95 64,538

–44,677,862.01 2,806,607.02 0.00 0

706,401,489.11 5,888,720,007.46 7,915,432,937.54 7,499,445

ANNUAL REPORT 2003


48


LIABILITIES PROPERTY & CASUALTY

in EUR

A. Shareholders’ equity

I. Share capital

1. Nominal value 44,827,511.03

II. Capital reserves

1. Committed 129,610,682.54

III. Revenue reserves

1. Free reserves 89,188,246.21

IV. Risk reserve as per Section 73a of the Austrian Insurance Supervision Act, taxed portion 4,417,884.25

V. Net profit 12,186,666.51thereof profit brought forward 229,448.14

TOTAL SHAREHOLDERS’ EQUITY 280,230,990.54

B. Untaxed reserves

I. Risk reserve as per Section 73a of the Austrian Insurance Supervision Act 19,406,564.75

II. Valuation reserve due to special write-downs 30,187,437.92

III. Other untaxed reserves 6,239,481.17

TOTAL RESERVES 55,833,483.84

C. Underwriting provisions in the retention

I. Unearned premiums

1. Overall account 97,981,853.27

2. Reinsurers’ share –8,166,756.97 89,815,096.30

II. Actuarial reserve

1. Overall account 0.00

2. Reinsurers’ share 0.00 0.00

III. Provision for outstanding insurance claims



IV. Provision for the refund of premium not related to results



V. Provision for the refund of premium related to results or the profit participation for policyholders


2. Reinsurers’ share 0.00 1,290,762.75

VI. Equalisation reserve 73,295,616.00

VII. Other underwriting positions



TOTAL TECHNICAL PROVISIONS 785,813,277.08

D. Underwriting provisions of the unit-linkedand index-linked life insurance policies 0.00

Amount carried forward 1,121,877,751.46




in EUR ’000

17,931,004.41 26,896,506.62 89,655,022.06 89,655

43,968,805.39 99,436,710.91 273,016,198.84 273,016

6,802,640.21 45,422,796.73 141,413,683.15 141,414

1,433,552.71 13,198,058.51 19,049,495.47 14,243

2,728,879.33 5,121,210.64 20,036,756.48 14,58226,809.57 369,534.74 625,792.45 1,087

72,864,882.05 190,075,283.41 543,171,156.00 532,910

9,208,223.29 14,825,539.49 43,440,327.53 43,441

12,418,847.37 128,619,587.05 171,225,872.34 150,493

119,130.19 5,775,749.22 12,134,360.58 26,390

21,746,200.85 149,220,875.76 226,800,560.45 220,324

1,031,853.44 58,010,472.85 157,024,179.56 153,479

0.00 1,031,853.44 –376,299.93 57,634,172.92 –8,543,056.90 148,481,122.66 –10,050

525,087,443.00 4,557,234,535.16 5,082,321,978.16 4,915,326

–1,692,206.00 523,395,237.00 –21,757,231.64 4,535,477,303.52 –23,449,437.64 5,058,872,540.52 –37,662

41,177,991.00 18,433,502.67 836,224,424.17 835,979

–205,039.00 40,972,952.00 –810,310.76 17,623,191.91 –164,581,842.74 671,642,581.43 –175,429

12,986,000.00 0.00 22,369,844.15 20,768

0.00 12,986,000.00 0.00 0.00 –5,228,057.34 17,141,786.81 –3,269

3,601,112.52 82,957,020.79 87,848,896.06 99,698

0.00 3,601,112.52 –7,000.00 82,950,020.79 –7,000.00 87,841,896.06 –15

0.00 0.00 73,295,616.00 57,860

526,900.80 1,538,245.08 7,439,924.96 7,137

0.00 526,900.80 0.00 1,538,245.08 –1,165,201.38 6,274,723.58 –561

582,514,055.76 4,695,222,934.22 6,063,550,267.06 5,863,261

0.00 281,841,488.00 281,841,488.00 150,501

677,125,138.66 5,316,360,581.39 7,115,363,471.51 6,766,996

ANNUAL REPORT 2003


50

LIABILITIES PROPERTY & CASUALTY

in EUR

Amount brought forward 1,121,877,751.46

E. Non-underwriting provisions

I. Provisions for liabilities and charges 0.00

II. Provisions for pensions 0.00

III. Provisions for taxation 21,970,400.00

IV. Other provisions 39,448,586.86

TOTAL OTHER PROVISIONS 61,418,986.86

F. Deposit liabilities from the ceded reinsurance business 142,681.21

G. Other liabilities

I. Liabilities from the direct insurance business

1. to policyholders 21,219,367.88

2. to insurance intermediaries 23,365,450.88

3. to insurance companies 6,099,411.27 50,684,230.03

II. Unsettled claims from the reinsurance business 21,981,897.60

III. Liabilities to banks 757,051.32

IV. Other liabilities 51,262,833.26

TOTAL LIABILITIES 124,686,012.21

H. Accruals and deferrals 12,186,009.23

Balance sheet total 1,320,311,440.97

The sum of EUR 4,535,477,303.52 as of 31st Decem-ber 2003 shown in life insurance under the heading“actuarial reserve” includes the actuarial reserve for ownbusiness of EUR 4,472,300,145.06 and for businessassumed as reinsurance of EUR 84,934,390.10, net ofthe share ceded to the reinsurer of EUR 21,757,231.64.The sum of EUR 57,634,172.92 shown under the head-ing “unearned premiums” includes the unearned premi-ums for own business of EUR 49,658,649.00 and for busi-ness assumed as reinsurance of EUR 8,351,823.85, netof the share ceded to the reinsurer of EUR 376,299.93.I hereby confirm that the actuarial reserve and theunearned premiums for own business are calculated inaccordance with the provisions and actuarial principlesapplying in this respect.

Vienna, 29th March 2004 Ebner

The sum of EUR 523,395,237.00 as of 31st December2003 shown in health insurance under the heading“actuarial reserve” includes the actuarial reserve for ownbusiness of EUR 524,163,934.00 and for businessassumed as reinsurance of EUR 923,509.00, net of theshare ceded to the reinsurer of EUR 1,692,206.00. Thesum of EUR 1,031,853.44 shown under the heading“unearned premiums” includes the unearned premiumsfor own business of EUR 1,030,977.10 and for businessassumed as reinsurance of EUR 876.34. I hereby con-firm that the actuarial reserve and the unearned premi-ums for own business are calculated in accordance withthe provisions and actuarial principles applying in thisrespect.

Vienna, 29th March 2004 Ebner




in EUR ’000

677,125,138.66 5,316,360,581.39 7,115,363,471.51 6,766,996

8,110,872.43 58,247,853.00 66,358,725.43 65,437

0.00 273,093,791.44 273,093,791.44 273,430

2,742,900.00 4,119,800.00 28,833,100.00 5,421

7,875,612.06 16,555,191.56 63,879,390.48 50,285

18,729,384.49 352,016,636.00 432,165,007.35 394,573

1,064,388.97 19,629,105.12 20,836,175.30 35,949

4,186,423.05 56,032,208.05 81,437,998.98 43,201

0.00 850,923.98 24,216,374.86 18,571

150,437.56 4,336,860.61 200,076.29 57,083,208.32 6,449,925.12 112,104,298.96 9,524

58,645.46 1,030,711.91 23,071,254.97 15,847

28.00 70,354,669.64 71,111,748.96 36,470

5,028,586.97 70,880,866.82 127,172,287.05 162,578

9,424,121.04 199,349,456.69 333,459,589.94 286,191

58,455.95 1,364,228.26 13,608,693.44 15,736

706,401,489.11 5,888,720,007.46 7,915,432,937.54 7,499,445

I hereby confirm in accordance with Section 81a Para. 1 of the Austrian Insurance Supervision Act that the cov-erage requirement for the departments of the cover fund in accordance with Section 20 Para. 2 Z 1 to 5 of theAustrian Insurance Supervision Act (additional pensions insurance policy, other life insurance policy, other unit-linked life insurance policy, index-linked life insurance policy, health insurance policy) is complied with in fullby means of the dedication of suitable assets for the cover.

Vienna, 15th March 2004 Freitag


ANNUAL REPORT 2003

INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1.1. TO 31.12.2003

52

PROPERTY AND CASUALTY INSURANCE 2003 2002

in EUR in EUR ’000

Underwriting account

1. Earned premiums

Accounted premiums

Overall account 795,415,521.90

Ceded reinsurance premiums –194,378,475.06 601,037,046.84 564,834

Change due to premium deferral

Overall account –4,173,382.23

Reinsurers’ share –1,131,706.92 –5,305,089.15 –664

TOTAL PREMIUMS 595,731,957.69 564,170

2. Investment income for the technical account 56,541.00 54

3. Other underwriting income 3,289,266.78 2,483

4. Expenses for insurance claims

Payments for insurance claims


Reinsurers’ share –98,710,029.65 398,549,153.41 379,925

Change in the provision for outstanding insurance claims


Reinsurers’ share 11,425,004.77 5,012,374.45 3,114

TOTAL INSURANCE CLAIMS – 403,561,527.86 –383,039

5. Decrease in underwriting provisions

Other underwriting provisions


Reinsurers’ share 0.00

TOTAL DECREASE IN UNDERWRITING PROVISIONS 1,044,582.32 762

6. Expenditure for the refund of premium not related to results


Reinsurers’ share –1,958,733.34

TOTAL EXPENDITURE FOR THE REFUND OF PREMIUMNOT RELATED TO RESULTS 43,930.24 –1,374

7. Expenditure for the refund of premium related to results

Overall account 0.00

Reinsurers’ share 0.00

TOTAL EXPENDITURE FOR THE REFUND OF PREMIUMRELATED TO RESULTS 0.00 –1,300

8. Operating expenses

Acquisition expenses 151,467,615.42 147,117

Other operating expenses 43,014,116.95 42,234

Reinsurance commissions and profit commissions fromreinsurance cessions –36,951,382.17 –46,712

TOTAL OPERATING EXPENSES –157,530,350.20 –142,639

9. Other underwriting expenses –17,829,971.33 –21,766

10. Change in the equalisation reserve –15,435,876.00 505

Underwriting result (amount carried forward) 5,808,552.64 17,855



PROPERTY AND CASUALTY INSURANCE 2003 2002


Underwriting result (amount brought forward) 5,808,552.64 17,856

Non-underwriting account

1. Income from capital assets and interest income

Income from participations 67,798,658.66 10,208

Income from land and buildings 6,077,573.64 5,830

Income from other capital assets 26,101,755.62 41,749

Profits from the disposal of capital assets 9,133,663.55 12,117

Other income from capital assets and interest income 13,927,365.39 8,896

TOTAL INVESTMENT INCOME 123,039,016.86 78,801

2. Expenditure for capital assets and interest charges

Expenditure for asset management 3,532,902.55 4,030

Write-downs on capital assets 94,608,709.93 63,877

Interest charges 3,089,632.65 3,304

Losses from the disposal of capital assets 1,261,696.87 5,102

Other expenditure for capital assets 12,114,926.26 8,809

TOTAL CAPITAL EXPENDITURE –114,607,868.26 –85,122

3. Investment income transferred into the underwriting account –56,541.00 –54

4. Other non-underwriting income 770,116.41 819

5. Other non-underwriting expenditure –507,017.45 –4,080

Profit on ordinary activities (property/casualty) 14,446,259.20 8,220


ANNUAL REPORT 2003


54

HEALTH INSURANCE 2003 2002



1. Earned premiums

Accounted premiums




Overall account –81,239.71

Reinsurers’ share 0.00 –81,239.71 367

TOTAL PREMIUMS 266,365,190.48 262,562

2. Investment income for the technical account 7,630,554.50 4,257

3. Other underwriting income 24,131.24 42






Overall account 302,094.00

Reinsurers’ share 53,639.00 355,733.00 –280

TOTAL INSURANCE CLAIMS –186,257,628.88 –193,560

5. Increase in underwriting provisions

Actuarial reserve


Reinsurers’ share –102,331.00 35,925,213.00

TOTAL INCREASE IN UNDERWRITING PROVISIONS –35,925,213.00 –26,022

6. Expenditure for the refund of premium not related to results –10,525,418.46 –9,735




Reinsurance commissions and profit commissionsfrom reinsurance cessions –195,890.78 –205



Underwriting result (amount carried forward) 4,028,653.85 389



HEALTH INSURANCE 2003 2002


Uderwriting result (amount brought forward) 4,028,653.85 389







Other income from capital assets and interest income 981,621.78 2,219



Expenditure for asset management 1,021,991.77 933


Losses from the disposal of capital assets 0.00 2,101

Other expenditure for capital assets 2,473,553.26 38


3. Investment income transferred into the underwriting account –7,630,554.50 –4,257


Profit on ordinary activities (health) 4,031,349.52 392


ANNUAL REPORT 2003


56

LIFE INSURANCE 2003 2002



1. Earned premiums

Accounted premiums




Overall account –501,817.30

Reinsurers’ share –395,180.84 –896,998.14 –1,649

TOTAL PREMIUMS 704,895,657.50 620,168

2. Investment income for the technical account 247,041,255.10 214,822

3. Non-realised profits from capital assets as per Item C of the Assets 14,952,696.15 581

4. Other underwriting income 76,336.48 82







Reinsurers’ share –394,536.76 6,270,099.92 423

TOTAL INSURANCE CLAIMS –528,062,308.11 –450,249


Actuarial reserve


Reinsurers’ share 1,542,706.82 202,330,136.74 155,089

TOTAL INCREASE IN UNDERWRITING PROVISIONS –202,330,136.74 –155,089

7. Expenditure for the refund of premium related to resultsor profit participation of the policyholders


Reinsurers’ share –7,000.00 54,500,000.00 61,820

TOTAL PROFIT PARTICIPATION –54,500,000.00 –61,820




Reinsurance commissions and profit commissions fromreinsurance cessions –542,445.77 –394


9. Non-realised losses from capital assets as per Item C of the Assets –2,658,107.33 –27,897


Underwriting result (amount carried forward) 11,562,477.37 11,704




in EUR in TEUR

Underwriting result (amount brought forward) 11,562,477.37 11,704




Income from land and buildings 19,177,734.85 23.902


Income from write-ups 0.00 4,484













5. Other non-underwriting expenditure –43,359.73 –587

Profit on ordinary activities (life) 12,073,987.91 11,640


ANNUAL REPORT 2003


58

PROPERTY/CASUALTY + HEALTH + LIFE = TOTAL BUSINESS 2003 2002


Underwriting result Property/Casualty 5,808,552.64 17,855

Underwriting result Health 4,028,653.85 389

Underwriting result Life 11,562,477.37 11,704

TOTAL UNDERWRITING RESULT 21,399,683.86 29,948

Non-technical result





Income from write-ups 0.00 4,484












4. Other non-underwriting income 1,327,682.35 1,345

5. Other non-underwriting expenditure –550,377.18 –4,666

6. Profit on ordinary activities 30,551,596.63 20,252

7. Taxes on income 149,939.07 474

8. Profit for the year 30,701,535.70 20,726

9. Release of reserves

Release of the valuation reserve due to special write-downs 5,212,939.57 10,714

Release of other untaxed reserves 18,855,939.80 22,595

TOTAL RELEASE OF RESERVES 24,068,879.37 33,309

10. Transfer to reserves

Transfer to the risk reserve as per Section 73a of the Austrian Insurance Supervision Act 4,806,551.00 2,796

Transfer to the valuation reserve due to special write-downs 25,945,627.32 16,353

Transfer to other untaxed reserves 4,600,000.00 16,989

Transfer to free reserves 7,272.72 4,401

TOTAL TRANSFER TO RESERVES – 35,359,451.04 – 40,539

11. Profit for the year 19,410,964.03 13,496

12. Profit brought forward 625,792.45 1,087

Net profit 20,036,756.48 14,583



I. General informations on the accounting andvaluation methods

The annual financial statements were prepared in com-pliance with proper accounting principles and in com-pliance with the general practice to convey an as accu-rate as possible picture of the company’s net worth,financial position and earnings.

The principle of prudence was fulfilled because only theprofits realised on the balance sheet date were reportedand all identifiable risks and impending losses havebeen recorded in the balance sheet. The figures arealways provided in thousands of euro (TEUR). Previousyear values are identified as such or placed in brackets.

II. Accounting and valuation principlesLand is valued at acquisition cost and buildings atacquisition or construction cost, reduced by scheduledwrite-downs. Maintenance expenditure for residentialbuildings that are rented to people who are not employedby the company are essentially spread over ten years.

The capital assets of unit-linked and index-linked lifeinsurance are valued according to the market value prin-ciple. Investment in unit-linked life insurance is effectedin the following funds: Zukunftsvorsorge Aktienfonds (T),Fair Invest Balanced (T), Global & Stabil- World Megas-tock (T), Crystal Roof Rubin (T), Crystal Roof Smaragd (T),Crystal Roof Safir (T), Leonardo “Sprinting” (T), VorsorgeMax (T), Global Max (T), Mercury Europäischer Anleihen-fonds (T), RT-Blue Chips Dachfonds (T), RT-PIFdynamisch (T), RT-PIF traditionell (T), Spaengler-Spar-Trust Corporate (T), Golden Roof Branchen (T), Leonardo“Walking” (T), Leonardo “Jogging” (T), CI Master Fondstraditionell (T), CI Master Fonds dynamisch (T), CI MasterFonds progressiv (T), CI Europe Stock (T), CI AmericaStock (T), CI Euro Corporate Bond (T), CI Euro Cash (T),CI Dollar Bond (T), ESPA Portfolio Bond, Golden Roof Welt(T), ESPA Select Stock (T), Schoellerbank Aktienfonds(T), Schoellerbank Euro Alternativ (T), SchoellerbankAnleihefonds (T), Schoellerbank Kurzinvest (T), Schoeller-bank Realzins Plus (T), Vorsorge Rentenfonds, VorsorgeRentenfonds (T), VIF Versicherung International Fonds, CIEuro Bond, Constantia Euro Bond, CI Dollar Cash, ADIGFONDIS, Deka Rent International, MLIIF US Equity (T),MLIIF European Opportunities (T), MLIIF Japan Opportu-nities (T), Fidelity Euro Bond Fund, JPMF America EquityFund, JPMF – America Small Cap Fund, Vontobel USDBond (T), UBS Lux Bond Fund US (T), INVESCO GT

Japan, Vontobel Emerging Markets Equity (T), MLIIFEmerging Markets Fund (T), CS EF (Lux) – Small Cap USA(T), Fidelity Japan Smaller Companies Fund, FidelityInternational Fund, Fidelity European Growth Fund,Fidelity Japan Fund, CS Money Market (Lux) CHF (T),MLIIF European Bond (T), JPMF Europe Small Cap Fund,INVESCO GT Pan European (T), INVESCO GT Pan Euro-pean Enterprise (T), CS Bond Fund (Lux) USD (T), CSBond Fund (Lux) Euro (T), JPMF – Emerging Markets DebtFund, Morgan Stanley US Small Cap Equity (T), MorganStanley Emerging Markets Equity Fund (T), BAWAG PSKGlobal Bond, ESPA Cash Euro-Plus (T), ESPA Stock Vien-na, ESPA Stock Europe, Fidelity Portfolio Selector GlobalGrowth Fund, Fidelity Portfolio Selector Growth Fund,Fidelity Portfolio Selector Moderate Growth Fund, MorganStanley Japanese Value Equity Fund (T), INVESCO GTJapan Enterprise, INVESCO GT Emerging Markets Bond,Morgan Stanley Emerging Markets Debt Fund (T), Tem-pleton Emerging Markets Fund, Kapital und Wert Premi-um Dynamisch (T), BL Kingfisher Fund of Funds“Orange”, BL Kingfisher Fund of Funds “Red”, BL King-fisher Fund of Funds “Yellow”, Success Absolute (T),Success Relative (T), VJV Security Fonds, WSTV ESPADynamisch, WSTV ESPA Progressiv, WSTV ESPA Tradi-tionell, Constantia Austrian Equity (T).

All other securities, including the shares of affiliatedcompanies and participations, are valued according tothe strict lower-of-cost-or-market principle.

Mortgage receivables and other loans, including those toaffiliated companies and to companies with which ashareholding relationship exists, are valued essentially atthe nominal value of the outstanding receivables. Anadditional payment discount is spread over the term ofthe loan and reported on the liabilities side of the bal-ance sheet under deferrals.

For receivables whose collectibility is questionable, ade-quate individual value adjustments are established,which are deducted from the nominal amounts. The val-uation of tangible assets (excluding land and buildings)is effected at acquisition cost, reduced by scheduledwrite-downs. Low-value assets are fully written off in theyear of acquisition. No write-ups on assets werearranged.

Unearned premiums in property and casualty insuranceare basically calculated pro rata temporis with deduc-

NOTES TO THE ACCOUNTS.



tion of a cost discount amounting to TEUR 14,553(TEUR 14,595). In life insurance, unearned premiumsare established to the extent prescribed in the businessplan with no cost discounts deducted. In health insur-ance, unearned premiums are calculated pro rata tem-poris without a cost discount.

The actuarial reserve is calculated using the calculationbases in the business plan in accordance with the com-putational formulae that are stipulated in the businessplans authorised by the Austrian insurance regulatoryauthorities or submitted to the insurance regulatoryauthorities.

The provision for outstanding insurance claims in directbusiness for property and casualty insurance and for lifeinsurance is measured by individual evaluation for loss-es reported up to the balance sheet date for loss eventsnot yet settled and is supplemented by lump-sum con-tingency loadings for unidentifiable, major losses. Lump-sum reserves are established for incurred but not report-ed losses (IBNR reserve), measured in accordance withpast experience.

In health insurance, the provisions for outstanding insur-ance claims are quantified using lump-sum percentagesof the payments carried out for insurance claims in thefinancial year. The percentages remained unchangedcompared with the previous year.

In indirect business, the provisions for outstanding insur-ance claims are based for the most part on the notifica-tions of ceding companies as of 31st December 2002and 31st December 2003 respectively. The notifiedamounts were supplemented by loadings, if this was con-sidered necessary, in accordance with past experience.

The equalisation reserve is calculated in accordancewith the provisions of the Ordinance of the Federal Min-ister of Finance, Austrian Federal Law Gazette No.545/1991 as amended by Austrian Federal Law GazetteII. No. 66/1997.

The provision for the refund of premium related to resultsor profit participation of the policyholders includes theamounts that were set aside for premium refunds for pol-icyholders on the basis of the business plans and theArticles of Association and regarding which no allocationhad yet been made in the balance sheet.

The provisions for severance payments amount to 45%or, for employees who have completed the fiftieth year oflife on the balance sheet date, 60% of the notional sev-erance obligations in accordance with the law and withthe collective wage agreement on the balance sheetdate. A calculation of the mathematical reserve for sev-erance obligations undertaken on the deadline of 31stDecember 2003 according to actuarial principles (6% actuarial interest rate, entry age method) has resulted in an amount of TEUR 63,034 (TEUR 67,780),which is 50.8% of the notional severance obligations.

The provisions reported in the balance sheet are aroundTEUR 3,325 higher (2002: around TEUR 2,360 lower)than the actuarially calculated provision requirement.

The provisions for pensions of TEUR 273,094 (TEUR 273,430) reported in the balance sheet as of31st December 2003 consist of the pensions provisionsof TEUR 255,947 (TEUR 252,659) calculated inaccordance with the provisions of Section 14 in con-junction with Section 116 of the Austrian Income TaxAct, a taxed amount of TEUR 1,933 (TEUR 1,933) andthe shortfall in accordance with Article X Paras. 3 and4 of the Austrian Financial Reporting Act of TEUR15,214 (TEUR 18,838), which is reported separatelyunder accruals on the assets side; the shortfall reducedin 2003 by TEUR 3,624 (TEUR 3,534).

The pensions provisions are TEUR 0 (TEUR 718) low-er than the total from the mathematical reserve foraccrued pension rights calculated in accordance withthe calculation bases for the pension insurance policyAVÖ 1999-P (salaried staff) – the Ettl-Pagler table wasused until 1999 (with an actuarial interest rate of 6%)– and the cash value of liquid pensions of TEUR 273,094(TEUR 274,148) in total.

The amounts denominated in a foreign currency are con-verted into euro at the prevailing average rate of exchange.

In some cases, technical items of the assumed reinsur-ance business and the associated retrocession cessionsare recorded in the annual financial statements one yearin arrears in life insurance and in property and casualtyinsurance.

The following explanations are provided on the contin-gent liabilities not reported in the balance sheet: There




are letters of comfort for Businesspark Brunn Entwick-lungs GmbH amounting to TEUR 799 (TEUR 1,911) infavour of the municipality of Brunn am Gebirge regard-ing the assumption of costs for the construction of themotorway junction and development of the property.There is a new liability for Towarzystwo Ubezpieczeniowe“Compensa” S.A. amounting to TEUR 7,018. In addi-tion, there is a letter of indemnity in favour of APC-Geschäftscenter Betriebsges.m.b.H. amounting to TEUR 359 (TEUR 509) and a joint and several liabilityfor loans that were contracted by COUNTRY INN VICHotelerrichtungs- und Betriebsgesellschaft m.B.H. up toa total amount of TEUR 10,392 (TEUR 10,392). Fur-thermore, the company is liable for the loan repaymentsof employees to Spar- und Vorschusskasse der Angestell-ten der “Wiener Städtische Allgemeine Versiche-rung Aktiengesellschaft” reg.Gen.m.b.H. of TEUR 267 (TEUR 228). In addition, together with CollegiumAugustinum GmbH, Wiener Städtische Versicherung AGhas signed a letter of comfort without an assumption ofliability relating to amount in favour of GesundheitsparkWien- Oberlaa Gesellschaft m.b.H.

There is a guarantee in favour of Kooperativa Prague forthe provision of security for a loan of Ceska Sporitelna toKooperativa amounting to TEUR 43,197 (0).

In total, TEUR 44,355 (TEUR 15,944) is apportionableto contingent liabilities with affiliated companies.

The letter of comfort in favour of Union IT GmbH,Budapest (TEUR 343) no longer applies. Also, the lia-bility in favour of Unita S.A for receivables from a claimno longer applies (TEUR 2,144).

III. Explanatory notes on items in the balance sheetIntangible assets that were acquired from affiliatedcompanies are included with a balance sheet value ofTEUR 982 (TEUR 988).

The real estate values of developed and undevelopedland amounted to TEUR 129,112 (TEUR 130,082) on31st December 2003.

The balance sheet value of the land used by WienerStädtische amounts to TEUR 72,884 (TEUR 72,079).

Other loans, which are not secured by means of an insu-rance policy, break down as follows: Loans to the Repu-

blic of Austria amounting to TEUR 588,702 (TEUR646,412), receivables from loans from other publicbodies amounting to TEUR 85,508 (TEUR 101,777)and receivables from loans from other borrowers amoun-ting to TEUR 134,179 (TEUR 113,934).

The market values of capital assets amount to:

The hidden reserves increased in the reporting year byTEUR 61,290 to TEUR 1,199,388 (TEUR 1,138,098)in total. The market values of shares in affiliated under-takings or of shares in participations correspond to thestock market values or other available fair market values.If stock market values or other available fair market val-ues do not exist, the acquisition costs are assessed asmarket values. If necessary, the acquisition costs arereduced by non-scheduled depreciations or the higheropenly reported proportionate capital. Stock market val-ues or book values (acquisition costs, if necessaryreduced by non-scheduled depreciations) were valued asmarket values of shares and of other securities. Theremaining capital assets were valued at nominal value, ifnecessary reduced by non-scheduled depreciations.

The market values of land and buildings were determinedin accordance with the recommendations of the AustrianAssociation of Insurance Companies. Valuation reportsfrom 1999 formed the basis of the valuation for the most

Items in accordancewith Section 81c Para. 2 of the Austrian Insurance Supervision Act Market value on Market value onAmounts in EUR ’000 31.12.2003 31.12.2002

Land and buildings 747,126 752,837

Shares in affiliated companies 1,629,228 1,539,543

Bonds and other securities fromand loans to affiliated companies 281,173 254,023

Participations 417,873 464,205

Bonds and other securities fromand loans to companies with whicha shareholding relationship exists 61,108 69,703

Shares and othernon fixed-interest securities 1,996,898 2,217,944

Bonds and otherfixed-interest securities 1,672,384 1,107,013

Shares injointly-owned capital assets 81,286 73,419

Mortgage receivables 298,965 319,512

Advance payments on policies 22,120 23,207

Other loans 808,389 862,122

Deposits at banks 90,240 201,429

Deposit receivables 92,477 89,992

8,199,267 7,974,948



part. The market values for reports from the valuation year2004 amount to TEUR 82,420, 2003: TEUR 204,737,2002: TEUR 26,267, 2001: TEUR 57,079, 2000:TEUR 50,560, 1999: TEUR 326,063.

In health insurance, the calculation of the actuarialreserve in accordance with Section 18c of the AustrianInsurance Supervision Act is carried out in accordancewith actuarial principles in all portfolio categories.

In individual insurance, the calculation of the actuarialreserve is effected exclusively for each individual policy.This applies also for the new entrant into group insurancecovered by the 1994 amendment to the Austrian Insur-ance Policy Act. A lump-sum actuarial reserve is estab-lished for the remaining group insurance business. Thecalculation of the actuarial reserve is effected exclusivelyin accordance with the prospective method. The calcula-tion of the actuarial reserve takes into account that theactuarial reserve of the respective policy lapses in favourof the policyholder community in the event of prematurepolicy termination or the death of the insured person.

Claims frequencies are derived predominantly from eval-uations of our own claims portfolio as the actuarial basesfor the calculation of the actuarial reserve. Mortalitieswere taken in the main from the Austrian general mor-tality tables 1990/92. The actuarial reserve is calculat-ed for the most part using an assumed interest rate of3% p.a., in line with the premium calculation.

In life insurance, the calculation of the actuarialreserve is effected in accordance with the principlesspecified in the business plan and authorised by theinsurance regulatory authorities or in accordance withthe principles notified to the insurance regulatoryauthorities.

The actuarial reserve is individually calculated for eachparticular case; the prospective method is almost exclu-sively applied in the process.

The most important probability tables used are: Forendowment insurance policies: DM 24/26, ÖVM 80/82,ÖVM /ÖVF 90/92For annuity insurance policies: EROM/EROF, AVÖ 1996 R

The actuarial reserve is calculated using an assumedinterest rate of 3% p.a. for the predominant proportionof the portfolio. An assumed interest rate of 4% p.a.was used from 1995 for certain tariffs; the assumedinterest rate amounts to a maximum of 3.25% p.a. forpolicies with a policy inception from 1.7.2000.Explanatory notes to the pensions provisions and sev-erance provisions are shown under Item II. of theNotes.

From the amount included in the item Other liabilities,TEUR 21,076 (TEUR 30,494) is apportionable to taxliabilities and TEUR 3,962 (TEUR 3,756) to socialsecurity liabilities.

The following balance sheet items are apportionable to affiliated companies and to companies with which a share-holding relationship exists:

Affiliated companies Companies with which aAmounts in EUR ’000 shareholding relationship exists

2003 2002 2003 2002

Mortgage receivables 61,821 63,857 8,452 8,641

Deposit receivables 8,591 7,270 64,978 61,055

Receivables from direct insurance business 1,047 204 15 36

Accounts receivable from reinsurance business 1,744 2,725 2,727 4,313

Other receivables 50,020 32,332 5,617 11,480

Deposit liabilities 421 379 0 141

Liabilities from direct insurance business 250 277 106 89

Unsettled claims from reinsurance business 3,724 4,350 561 1,688

Other liabilities 64,281 108,238 6,807 6,936




The balance sheet values of intangible assets, land and buildings and capital assets in affiliated companies and par-ticipations have developed as follows:

IV. Explanatory notes to items in the income statementIn 2003, accounted premiums, earned premiums, expenses for insurance claims, operating expenses and the reinsurance balance in property and casualty insurance break down as follows:

Amounts in EUR ’000 Intangible Land and Shares in Bonds and other Participations Bonds and otherassets buildings affiliated securities from securities from

companies and loans to and loans toaffiliated companies

companies with which ashareholdingrelationship

exists

Position on 31st December 2002 19,474 632,711 811,199 253,927 215,996 69,608

Additions 7,917 22,738 111,040 32,768 65,358 14,406

Additions from restructuring 0 0 22,732 0 23,358 0

Disposals 0 18,654 564 8,510 3,541 6,816

Disposals from restructuring 0 0 42,311 0 3,779 0

Transfers 0 0 32,902 2,989 –47,031 –12,020

Write-downs 2,987 19,067 97,900 0 12,002 4,070

Position on 31st December 2003 24,404 617,728 837,098 281,174 238,359 61,108

Overall account Accounted Earned Expenses for Operating Reinsurancepremiums premiums insurance expenses balance

Amounts in EUR ’000 claims

Direct business

Fire and fire consequential loss insurance 123,396 123,458 56,655 28,765 – 46,045

Liability insurance 77,853 75,557 48,704 21,800 –1,099

Householders’ insurance 61,431 61,413 28,942 16,796 –1,344

Motor vehicle liability insurance 178,254 177,044 125,371 37,291 1,026

Legal expenses insurance 21,699 21,720 9,019 5,651 – 7

Marine, aviation and transit insurance 30,217 31,423 16,010 7,666 –10,166

Other insurance policies 3,821 3,794 4,145 1,231 – 29

Other motor vehicle insurance policies 92,853 92,414 78,618 22,520 4,038

Other property insurance policies 105,426 103,114 72,370 28,011 –9,128

Personal accident insurance 69,891 69,514 34,598 16,785 –4,194

764,841 759,451 474,432 186,516 –66,948

(Values for previous year) 687,958 687,359 477,071 174,365 683

Indirect business

Marine, aviation and transit insurance 378 381 44 79 –4

Other insurance policies 30,196 31,411 16,370 7,887 –4,323

30,574 31,792 16,414 7,966 –4,327

(Values for previous year) 37,223 37,971 24,937 14,988 3,835

Direct and indirect business overall 795,415 791,243 490,846 194,482 –71,275

(Values for previous year) 725,181 725,330 502,008 189,353 4,518



Amounts in EUR ’000 2003 2002

Direct business

Individual insurance policies 188,222 182,258

Group insurance policies 82,974 80,750

Indirect business

Individual insurance 0 0

Group insurance policies 721 448

271,917 263,456


Direct business 688,516 606,467

Indirect business 22,220 21,263

710,736 627,730




688,516 606,467

Policies with a single premium 211,067 199,320

Policies with renewable premiums 477,449 407,147

688,516 606,467

Policies with profit participation 526,679 517,233

Policies without profit participation 5,357 5,855

Unit-linkedlife insurance policies 122,923 64,562

Index-linkedlife insurance policies 33,557 18,817

688,516 606,467

The accounted premiums for health insurance policies break down as follows in 2003:

The accounted premiums for life insurance policies break down as follows in 2003:

For life insurance policies, the premiums in direct business are made up as follows:

In 2003, the reinsurance balance in life insurancewas negative at TEUR 1,465 (TEUR 1,180). The rein-surance balance in health insurance was positive in2003 at TEUR 5,963 (TEUR 123). The earned premi-ums in indirect business in property and casualtyinsurance of TEUR 31,792 (TEUR 37,971) were

recorded in the income statement one year in arrearsin some cases. TEUR 120 (TEUR 138) of the earnedpremiums of TEUR 22,010 (TEUR 20,450) in indirectbusiness in life insurance was recorded in the incomestatement one year in arrears.





Income from participations

Property and casualty insurance 67,048 9,555

Health insurance 7,436 0

Life insurance 2,834 7,362

Total 77,318 16,917

Income from other capital assets

Property and casualty insurance 4,069 3,411

Health insurance 1,320 1,170

Life insurance 12,222 10,575

Total 17,611 15,156

The following amounts are apportionable to affiliated companies from the income from participations and incomefrom other capital assets reported in the income statement:

The items expenses for insurance claims, operating expenses, other underwriting expenses, investment expens-es and other non-underwriting expenditure include the following:

The valuation reserve reported in the balance sheet as of 31st December 2003 and the transfers and releasesin the financial year break down as follows (by fixed asset item):

The total income from capital investment in lifeinsurance and in health insurance was transferredinto the technical account, as the investment incomein these two sectors constitute a component of the

technical calculations. In property and casualtyinsurance, only the interest income from deposits forthe indirect business was transferred into the techni-cal account.

In the direct insurance business, commissions amount-ing to TEUR 165,399 (TEUR 120,983) accrued in thefinancial year 2003.

Losses from the disposal of capital assets amountedto TEUR 8,443 (TEUR 30,134) in the financial year 2003.

Position on Transfer Release Reclassification Position onAmounts in EUR ’000 31.12.2002 31.12.2003

to land and buildings 112,557 22,317 5,071 0 129,803

to shares in affiliated companies 8,187 0 0 0 8,187

to participations 3,626 0 0 0 3,626

to shares and othernon-fixed-interest securities 26,123 0 0 0 26,123

to intangible assets 0 3,628 142 0 3,486


Salaries and wages 124,344 117,447

Expenditure for severance payments 7,582 8,574

Expenditure for pension scheme 23,416 29,714

Expenditure for statutory social security contributionsand wage-related levies and compulsory contributions 39,697 38,611

Other social expenditure 1,961 2,051



The reserve reported in the balance sheet as of 31stDecember 2003 as per Section 10 of the AustrianIncome Tax Act breaks down as follows (by year):

The expenditure for taxes on income and earningsdecreased in the financial year by TEUR 2,812(TEUR 1,501) due to the formation and release ofuntaxed reserves.

V. Profit participationThe overview regarding the calculation of the profit par-ticipation is provided in the Notes on pages 68 to 70.

VI. Significant participationsThe overview of participations and the information onthe consolidation scope are attached to the notes to theconsolidated financial statements as an Annex (page133 et seq).

VII. Other informationThe share capital of the company amounts to EUR89,655,022.06. It is divided into 10,986,800 no-par-value shares with voting rights made out to bearerand 1,350,000 non-voting preference shares madeout to bearer, whereby each no-par-value share partic-ipates in the share capital to the same extent. Thepreference shares are listed for official trading onVienna Stock Exchange.

The Managing Board is authorised, until 30th June2008 at the latest, to increase the share capital of thecompany – in several tranches where necessary – by anominal value of EUR 19,354,229.20 by issuing2,663,200 no-par-value shares registered or madepayable to bearer against cash or contribution in kind.The Managing Board, with the agreement of theSupervisory Board, decides on the capacity of theshare rights, the exclusion of the subscription rightand the other conditions of the share issue. In theprocess, non-voting preference shares may also beissued, which are on a par with the rights from alreadyexisting preference shares. The issue prices of no-par-value and preference shares may vary greatly.

The other untaxed reserves reported in the balance sheet as of 31st December 2003 and the transfers andreleases of these reserves in the financial year break down as follows:

Investment allowances as per Section 10 Amounts in EUR of the Austrian Income Tax Act

from 1995 114,089

from 1996 102,916

from 1997 35,037

from 1998 1,153,079

from 1999 2,215,534

from 2000 3,913,706

Position on Transfer Release Position onAmounts in EUR ’000 31.12.2002 31.12.2003

Investment allowances as per Section 10 of the Austrian Income Tax Act 9,402 0 1,868 7,534

Transfer reserves as per Section 12 of the Austrian Income Tax Act 16,989 4,600 16,989 4,600




The composition of the Managing Board and of theSupervisory Board in the financial year may be found onpages 8 and 9 of this annual report.

The average number of employees (including cleaningstaff) amounted to 3,854 (3,875). Of the 3,737 (3,748)employees on average, 1,905 (1,900) were employed inbusiness production with personnel costs of TEUR85,671 (TEUR 81,302) and 1,832 (1,848) wereadministrative staff with personnel costs of TEUR111,329 (TEUR 115,095).

No loans are outstanding with members of the ManagingBoard on 31st December 2003.

Members of the Supervisory Board did not receive anyloans in 2003.

There were no liabilities for members of the ManagingBoard and of the Supervisory Board on 31st December2003.

From the expenditure for severance payments and pen-sions amounting to TEUR 30,998 (TEUR 38,288) intotal, TEUR 8,524 (TEUR 8,167) is apportionable in

2003 to severance payments and pensions expenditurefor members of the Management Board and seniorexecutives in accordance with Section 80 Para. 1 ofthe Austrian Stock Company Act. In 2003, emolu-ments accrued to the members of the Managing Boardfor their work amounting to TEUR 2,334 (TEUR2,162), reduced by elements debited by affiliatedcompanies. TEUR 183 (TEUR 180) of this is appor-tionable to emoluments from affiliated companies. Theremuneration package of former members of the Man-aging Board (excluding the surviving dependents)amounted to TEUR 1,373 (TEUR 1,164) in 2003.

The emoluments of the members of the SupervisoryBoard for their work for the company amounted to TEUR88 (TEUR 85) in 2003.

WIENER STÄDTISCHE Allgemeine VersicherungAktiengesellschaft is included in the consolidated finan-cial statements prepared by Wiener Städtischen Wech-selseitigen Versicherungsanstalt-Vermögensverwaltungwith its headquarters in Vienna. The published consoli-dated financial statements are available for inspection inthe offices of this company in 1010 Vienna, Schotten-ring 30.


Kurt Ebner

Dkfm. Karl Fink



Vienna, 19th April 2004


Dr. Rudolf Ertl

The Managing Board:


PROFIT PARTICIPATION.The calculation of the profit participation is effectedin accordance with the following principles:

HEALTH INSURANCE

All insurance policies concluded according to rateswith an escalator clause will receive a special bonus asof 31st December 2004 if their premium was notincreased to the extent actuarially necessary with the2004 premium adjustment.

The level of the respective profit commission will cor-respond to the single premium that is necessary forthis measure to be used as relief for older health insur-ance policyholders.

LIFE INSURANCE

Profit Class A1. All insurance policies in Profit Class A, which belongto Settlement Class 92, will receive profit commissionsto the following extent in accordance with the insuranceterms and conditions underlying the policies:a) an interest bonus amounting to 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year.b) a total bonus amounting to 2.5‰ of the sum insuredon death for policies with a proper adjustment letter, butamounting to 1‰ for all other policies.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the total matured capital.

2. All insurance policies in Profit Class A, which belongto Settlement Class 96 (insurance policies against a sin-gle premium), will receive profit commissions to the fol-lowing extent in accordance with the insurance termsand conditions underlying the policies:a) an interest bonus amounting to 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year.b) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the total matured capital.

3. All insurance policies in Profit Class A – excluding poli-cies in Profit Classes 92 and 96 – will receive profit com-missions to the following extent in accordance with theinsurance terms and conditions underlying the policies:

a) an interest bonus amounting to 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year.b) a total bonus amounting to 3.5‰ of the sum insuredon death for policies with a proper adjustment letter, butamounting to 2‰ for all other policies.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the total matured capital.

Profit Class BAll insurance policies that belong to Profit Class B willreceive profit commissions to the extent of 15% of theannual premium in accordance with the insurance termsand conditions underlying the policies.

Ordinary life insurance policies with a sum insured of atleast EUR 726.73 and an insurance period of at least 12years and which belong to Profit Class B will receive inaddition a final bonus of 20% of the sum insured onmaturity of the sum insured in 2005 in the event of sur-vival. The special bonuses approved in the years 1983and 1984 will be offset against this final bonus.

Profit Class DIn accordance with the insurance terms and conditionsunderlying the policies, all insurance policies in ProfitClass D will receive a total bonus to the extent of 2‰ ofthe sum insured on death for policies with a properadjustment letter, but amounting to 1‰ for all the rest.Interest bonuses and final bonuses on maturity of theendowment sum in 2005 are set to zero.

Profit Classes F, H, I, J, L, X, YAll insurance policies in Profit Classes F, H, I, J, L, X andY will receive profit commissions to the following extentin accordance with the insurance terms and conditionsunderlying the policies:a) an interest bonus amounting to 0.75% of the con-tractual actuarial reserve on commencement of the cur-rent insurance year.b) a total or additional bonus amounting to 1‰ of thesum insured on death or of the endowment value or ofthe survival sum.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the contractual actuarial reserve.d) a special bonus to the extent of 1% of the actuarialreserve specified in the business plan on commence-



ment of the current insurance year for all annuity poli-cies in Profit Classes I, J and L with renewable premiumpayments.The special bonus becomes payable in the event of thedrawing of an annuity payment.

Profit Class WVNAll whole life endowment insurance policies, whichbelong to Profit Class WVN, will receive profit com-missions to the following extent in accordance withthe insurance terms and conditions underlying thepolicies:a) an interest bonus amounting to 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year.b) an additional bonus amounting to 25% of the risk pre-mium included in the total premium for the currentinsurance year.

Profit Class FLVAll policies in Profit Class FLV will receive profit com-missions to the following extent in accordance with theinsurance terms and conditions underlying the policies:a) policies against renewable premium payment: a bonusamounting to 3% of the premium that is set for theinsurance year commencing in 2005.b) policies against a single premium: a bonus amountingto 3‰ of the single premium of the master insurancepolicy on commencement of the insurance year falling inthe year 2005.

Profit Class BU with profit participationIn accordance with the insurance terms and conditionsunderlying the policies, all occupational disability insur-ance policies in Profit Class BU with profit participationwill receive profit commissions amounting to 35% of theinsurance premium, which bears interest of 4% and ispaid out on expiry of the policy period.

Profit Class BU with premium bonusIn accordance with the insurance terms and conditionsunderlying the policies, all occupational disabilityinsurance policies and additional occupational disabil-ity insurance policies against renewable premium pay-ment, which belong to Profit Class BU with premiumbonus, will receive a premium bonus amounting to35% of the insurance premium or additional insurancepremium, which is set for the insurance year com-mencing in 2005.

Profit Class K / DD additional insurance policy1. In accordance with the insurance terms and condi-tions underlying the policies, all term insurance policiesin Profit Class K with a constant sum insured againstrenewable premium payment, which belong to Settle-ment Class 99, will receive a premium bonus amount-ing to 65% of the premium, which is set for the insur-ance year commencing in 2005.

2. In accordance with the insurance terms and condi-tions underlying the policies, all term insurance policiesand additional term insurance policies in Profit Class Kwith a constant sum insured against renewable premiumpayment – excluding policies in Settlement Class 99 –will receive a premium bonus amounting to 25% of thepremium, which is set for the insurance year commenc-ing in 2005.

3. In accordance with the insurance terms and condi-tions underlying the policies, all dread disease addi-tional insurance policies against renewable premiumpayment for capital payment and premium waiver inthe event of serious illnesses or a requirement forextensive nursing care will receive a premium bonusamounting to 10% of the additional insurance premi-um, which is set for the insurance year commencingin 2005.

Profit Class R1. All insurance policies in Profit Class R – excludingpolicies in Profit Classes with annuity paymentsalready being paid – will receive profit commissions tothe following extent in accordance with the insuranceterms and conditions underlying the policies:a) an interest bonus amounting to 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year.b) an additional bonus amounting to 1‰ of the endow-ment value or of the survival sum.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the total matured capital. d) a special bonus to the extent of 1% of the actuarialreserve specified in the business plan on commence-ment of the current insurance year for all annuity poli-cies with renewable premium payment.

The special bonus becomes payable in the event of thedrawing of an annuity payment.



PROFIT PARTICIPATION.2. For insurance policies with annuity paymentsalready being paid, which belong to SettlementClass 2000 and are in the second year of ongoingannuity payment at the earliest, the annuitiesalready being paid will receive an increase from 1stJanuary 2005 of 1.75% of the annuity last paid. Noincrease takes place as a result of the already antic-ipated profit participation in the event of a bonusannuity agreement.

3. For insurance policies with annuity paymentsalready being paid, which do not belong to SettlementClass 2000 and are in the second year of ongoingannuity payment at the earliest, the annuities alreadybeing paid will receive an increase from 1st January2005 of 2% of the annuity last paid. No increasetakes place as a result of the already anticipated prof-it participation in the event of a bonus annuity agree-ment.

Profit Class SAll insurance policies in Profit Class S will receiveprofit commissions to the following extent in accor-dance with the insurance terms and conditions under-lying the policies:a) an interest bonus amounting to 0.75% of the con-tractual actuarial reserve on commencement of the cur-rent insurance year.b) a total or additional bonus amounting to 1‰ of theendowment value or of the survival sum.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the contractual actuarial reserve.d) a special bonus to the extent of 1% of the contrac-tual actuarial reserve on commencement of the cur-rent insurance year for all annuity policies withrenewable premium payment. The special bonusbecomes payable in the event of the drawing of anannuity payment.

Profit Class Z1. All additional pensions insurance policies in ProfitClass Z – excluding policies with annuity paymentsalready being paid – will receive profit commissions tothe following extent in accordance with the insuranceterms and conditions underlying the policies:a) a bonus amounting to 1.125% of the actuarial reservespecified in the business plan on commencement of thecurrent insurance year.b) an additional bonus amounting to 1‰ of the endow-ment value.c) a final bonus on maturity of the endowment sum in2005 to the extent of an interest bonus as per Item a)on the entire actuarial reserve.d) a special bonus to the extent of 0.875% of the actuar-ial reserve specified in the business plan on commence-ment of the current insurance year for all policies withrenewable premium payment. The special bonus becomespayable in the event of the drawing of an annuity payment.

2. For insurance policies with annuity payments alreadybeing paid, which belong to Profit Class Z and are in thesecond year of ongoing annuity payment at the earliest,the annuities already being paid will receive an increasefrom 1st January 2005 of 2% of the annuity last paid.

Profit Class FPZ1. In accordance with the insurance terms and condi-tions underlying the policies, all insurance policies inProfit Class FPZ in the “Single” policy form will receiveprofit commissions amounting to 25% of the risk premi-um of the fund balance on commencement of the cur-rent insurance year – so long as the first annuity paymenthas not yet become payable. These will be allocated toan investment fund for the acquisition of fund units.

2. The insurance policies in Profit Class FPZ are subjectto the provisions of Profit Class Z from the moment ofliquidation.



AUDITOR’S REPORT.Auditor’s certificate.

We have audited the annual financial statements of

WIENER STÄDTISCHE Allgemeine VersicherungAktiengesellschaft, Vienna,

as of 31st December 2003 including the accounting,which were produced in accordance with the provi-sions applying in Austria under commercial law. Thepreparation and content of these annual financialstatements are the responsibility of the legal repre-sentatives of the company. Our responsibility lies inthe submission of an audit opinion on these annualfinancial statements on the basis of our inspection.

We have carried out our audit in compliance with thelegal provisions applicable in Austria and the customaryprinciples in our profession. These principles requirethat the audit is planned and executed in such a waythat a sufficiently reliable judgement may be submittedregarding whether the annual financial statements are

free from significant inaccurate statements. The auditincludes an inspection of the proof for amounts and oth-er information in the annual financial statements, basedon random sampling. It also includes the assessment ofthe accounting principles applied by the legal represen-tatives and the significant estimates undertaken as wellas an appraisal of the overall message of the annualfinancial statements. We are of the opinion that ouraudit provides a sufficiently reliable basis for our auditopinion. On the basis of the findings of the audit conducted by us, we provide the following unqualifiedaudit certificate in accordance with Section 274 Para. 1of the Austrian Commercial Code:

“The accounting and the annual financial statementscomply with the statutory provisions according to ouraudit carried out in accordance with our duty. Theannual financial statements convey an as accurate aspossible picture of the net worth, financial positionand earnings of the company in compliance with theproper accounting principles. The management reportis consistent with the annual financial statements.”

KPMG Alpen-Treuhand GmbHWirtschaftsprüfungs- und Steuerberatungsgesellschaft

Dr. Walter Knirsch Mag. Liane KarnerAuditor and tax advisor Tax advisor




REPORT OF THE SUPERVISORY BOARD.The Supervisory Board has received, examined and care-fully checked the annual financial statements 2003together with the Notes to the accounts and the Man-agement Report from the Managing Board. As the out-come of this examination, the Supervisory Board haspassed the unanimous resolution to approve the annualfinancial statements prepared by the Managing Boardand to declare its agreement with the proposal of theManaging Board for the distribution of profits.

Consequently, the annual financial statements havebeen adopted.

The Supervisory Board additionally reports that it hastaken the opportunity, both as a whole and occasionallythrough its Chairman and his deputy, to review the man-agement of the company. Repeated discussions with themembers of the Managing Board also served this pur-

pose, who gave exhaustive explanations and proof aboutthe management of the business of the company bymeans of books and reports.

In 2003, one ordinary Annual General Meeting and fivemeetings of the Supervisory Board were held.

Furthermore, the Supervisory Board informs the Annu-al General Meeting that the annual financial state-ments 2003 and the Management Report were audit-ed by the auditor, KPMG Alpen-Treuhand GmbHWirtschaftsprüfungs- und Steuerberatungsgesell-schaft, that the audit report was received, examinedand discussed by the Supervisory Board and that thisexamination has provided no reason for complaintsaccording to its final conclusion. The SupervisoryBoard declares for its part that it has nothing to addto the auditor’s report.

The Supervisory Board therefore submits the

proposal to the Annual General Meeting

that it adopts a resolution regarding the distribution of profits in accordance withthe proposal of the Managing Board and that it grants formal approval

to the acts of the Managing Board and Supervisory Board.

Vienna, May 2004

The Supervisory Board:

KR Dkfm. Klaus Stadler(Chairman)



MANAGEMENT REPORT FOR THE GROUP

AUSTRIA

BELARUS

HUNGARY

POLAND

CROATIA

SERBIA &MONTENEGRO

ROMANIA

BULGARIA

ITALYCZECHREPUBLIC

SLOVAKREPUBLIC

GERMANY

LIECHTENSTEIN

www.wienerstaedtische.at

www.kupala.by

www.donauversicherung.at

www.unionbiztosito.hu

www.ba-cav.at

www.compensa.pl

www.union.at

www.wuestenrot.at

www.kvarner-wiener-osig.com

www.s-versicherung.at

www.wiener.co.yu

www.koop.cz

www.unita.ro

www.koop.sk

www.agras.biz

www.kpas.sk

www.kontinuita.sk

www.bulgarskiimoti.bg

www.interrisk.de

www.wieneritalia.com

[email protected]

As the leading Austrian insurance group in Central andEastern Europe, the Wiener Städtische Group is nowrepresented in fourteen countries. The opening of abranch in Slovenia is intended as the latest expan-sionary step. At present, approximately 15,000employees in the Group look after around 11 millioncustomers in 1,000 offices.

In the financial year 2003, the earned premiums ofGroup companies increased to approximately EUR3.9 billion, whereby in the process the one billioneuro threshold in premium income outside Austriawas exceeded for the first time.

Outside Austria, the Wiener Städtische Group oper-ates in Bulgaria, Germany, Croatia, Liechtenstein,Poland, Romania, Serbia, the Slovak Republic, theCzech Republic, Hungary, Belarus and with a branchin Italy. With Slovenia’s accession to the EU in themiddle of 2004, the commencement of operationalactivity is envisaged in this country also with abranch.

Enlargement of the GroupIn Austria, Wiener Städtische strengthened itsinvolvement with BA-CA Versicherung (the former CA-Versicherung) and Union Versicherung at the end ofthe year 2003. Wiener Städtische’s participation inBA-CA Versicherung was then increased by 40% to90%. The share in UNION Versicherung was likewiseincreased. Wiener Städtische now holds 45% of theshares in this company. In the Slovak Republic, theresidual 20% in Kontinuita remaining with the formerowner was also acquired in 2004; it now belongs100% to the Wiener Städtische Group. In addition,the operational activity of the newly establishedWiener Städtische Belgrade in Serbia ensued at thestart of 2003.

Expansion of collaboration with HUK-CoburgThere is a collaboration with the German insurancegroup HUK-Coburg primarily in respect of overseasoperations. We closely collaborate in Poland and inBulgaria at present. HUK and Wiener Städtische arejointly involved in the Bulgarski Imoti companies andthe Polish company Compensa. This represents theopportunity for Wiener Städtische to be able to haverecourse to the expertise of HUK-Coburg, particularlyin the motor insurance sector.

“Think global – act local” –the Wiener Städtische Group’s strategy for the East“Think global – act local”, reads Wiener StädtischeGroup’s concept for success. The Wiener StädtischeGroup recognised at an early stage what opportunitiesCentral and Eastern Europe offers and steadilyextended its reach.

Behind the recipe for success is the fact that businessis not controlled only from the head office in Vienna.Objectives are set in collaboration with the subsidiarycompanies. Local decision-makers, the multi-brandstrategy and investment of the money earned in thecountry of origin are significant cornerstones in thesuccess of the Group. To that is added the transfer ofexpertise and of organisational, product design andmarketing strategies into the still young insurancecompanies of the Group. In the EDP area, for example,the subsidiaries are very closely involved in the jointdevelopment of applications (currently mainly SAP);the longer-term target is a standard EDP system land-scape for the entire Group.

ANNUAL REPORT 2003

WIENER STÄDTISCHE GROUP.

85


MANAGEMENT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS OF WIENER STÄDTISCHEN AG

1,100

1,000

900

800

700

600

500

400

300

200

100

01998 1999 2000 2001 2002 2003

PREMIUM INCOME 1998–2003 WIENER STÄDTISCHE GROUP ABROAD

in EUR milliom

ANNUAL REPORT 2003

Immediately after the removal of the “iron curtain”,Wiener Städtische was already involved, in 1990, in thefoundation of the first private insurance company inwhat was Czechoslovakia at that time. The newly estab-lished company chalked up profits from the start anddeveloped into an unparalleled success story. With theliberalisation of motor third-party liability insurance inthe Czech Republic, Kooperativa Prague was able to sellmore than one million policies within two months. A sim-ilar success was achieved by Kooperativa Bratislava withthe liberalisation carried out two years later in Slovakia.

Positive market environmentThe market environment of the past years in EasternEurope is mainly characterised by a rapid economicgrowth. GDP growth rates were considerably above theEU average in all East European countries in whichWiener Städtische operates. Of course, the economicturmoil of past years was also to be felt in the East Euro-pean countries, nevertheless the region was one of themost dynamic economic regions in the world. This higheconomic growth also resulted in large premium increas-es in the insurance sector.

In the newly added EU countries, inquiries are mademainly for non-life insurance policies, such as motor,third-party liability, marine, machinery, fire insuranceand householders’ and homeowners’ insurance policies.However, with increasing prosperity, the citizens are alsothinking increasingly about the security of their personalassets generated.

Another aspect of the market conditions in the EastEuropean countries is the still very low insurance densi-ty. In Western Europe, approximately EUR 1,500 perhead is currently spent per annum on insurance premi-um and the amount is approximately EUR 100 in theEast European countries, even far below that in severalcountries. While the insurance market in Austria or West-ern Europe is already relatively saturated, the position isdifferent in the East European countries. There, practi-cally all countries currently have very dynamically grow-ing markets with a high demand for reliable insurers withstable economic performance. The Wiener StädtischeGroup intends to cover this need.

Austria right at the front with investmentsAustria’s location has proven to be very advantageous forthe expansion into Eastern Europe. Austria is in first

place with direct foreign investment in practically allreform countries. Austrian companies rank among themost important investors due to the geographic proximi-ty, just as with the earlier close economic interlinkingthat goes back to the period of the monarchy.

WIENER STÄDTISCHE GROUP.

86

+++ THE MARKET ENVIRONMENT IN EASTERN

EUROPE IS CHARACTERISED BY A RAPID ECO-

NOMIC GROWTH. +++


Comment on the key figures with the individual presentations for the insurance companies

The figures from the local annual financial statements of the companieswere used with the individual presentations for the insurance companies.The percentage changes on the previous year were calculated in each caseon the basis of the local currency. The conversion into euro of the absolutefigures for the year 2003 was carried out for better legibility and, in theprocess, the year-end rate of exchange for the year 2003 was used.

The consolidated figures flow into Wiener Städtische AG’s consolidatedbalance sheet in accordance with legal provisions.

1 Euro

BGN Bulgaria 1.9557 Bulgarian Leva

BYR Belarus 2,695.22 Belarussian Ruble

CHF Switzerland/Liechtenstein 1.5579 Swiss Franc

CSD Serbia 68.4861 Serbian Dinar

CZK Czech Republic 32.41 Czech Koruna

HRK Croatia 7.6983 Croatian Kuna

HUF Hungary 262.50 Hungarian Forint

PLN Poland 4.7019 Polish Zloty

ROL Romania 41158 Romanian Lei

SKK Slovak Republic 41.17 Slovak Koruna

Wiener Städtische is Austria’s leading insurance com-pany operating in all classes of business. Approximate-ly 3,750 employees offer an appropriate solution to itscustomers for all insurance questions.

Excellent sales resultIn the past financial year 2003, one of the best salesresults for decades could be produced. Premiumincome was increased significantly in all three insur-ance lines. Overall, gross written premiums amount-ing to EUR 1,778.07 million were produced in 2003,as a result of which the result of the previous yearcould be outperformed by 10.0%. As a result, WienerStädtische was way above the average market growthin the Austrian insurance market, which amounted toapproximately 4%.

The insurance market was clearly overtaken in the lifeinsurance class of business in particular with a growthin gross earned premiums of 13.4%. In 2003, approx-imately 55,000 “Premium Pension” policies wereconcluded, Wiener Städtische’s product for the futurepension plan with subsidised premiums. As a result,Wiener Städtische achieved a market share of morethan 20% with the future pension plan with sub-sidised premiums.

The year 2003 was also very successful in the propertyand casualty class. Here, gross earned premiums couldbe increased by 9.1% to a total of EUR 791.24 million.Wiener Städtische is clearly the country’s biggest insur-er in corporate business. Wiener Städtische’s total pre-mium income consisted of approximately 45% from

property and casualty insurance, 40% from life insur-ance and 15% from health insurance.

Increase in profit on ordinary activities by approximately 50%The financial result of the year 2003 was increased by23.7% to EUR 263.10 million compared with thefinancial result of the year 2002, which was adverselyaffected by the negative performance of most stockmarkets. It was particularly gratifying that it was alsopossible in 2003 to increase the profit on ordinaryactivities by approximately 50% compared with theprevious year to EUR 30.55 million.

Austria’s leading insurance group Wiener Städtische is also the parent company of Aus-tria’s leading insurance group. The Wiener StädtischeGroup currently operates in fourteen countries of Cen-tral and Eastern Europe, including Slovenia, whereoperating started with the country’s accession to theEU. In 2003, approximately EUR 3.9 billion in earnedpremiums was produced in the Group, thereof morethan one billion outside Austria.

ANNUAL REPORT 2003

AUSTRIA.

87

+++ WIENER STÄDTISCHE ACHIEVED ONE OF

THE BEST SALES RESULTS OF ITS HISTORY

IN 2003. +++


KEY FIGURES *)

in EUR million 2003 change over 2002

Gross earned premium 1,773.31 +9.8%

Property/casualty 791.24 +9.1%

Life 710.23 +13.4%

Health 271.84 +3.0%


Profit on ordinary activities 30.55 +50.9%

*) see comment on page 86

Donau Versicherung is Wiener Städtische’s biggest ful-ly-consolidated domestic insurance participation andranks among Austria’s leading insurance companies,particularly in the property insurance sector. WienerStädtische’s shareholding in Donau amounts toapproximately 89%. As of 31.12.2003, 1,322employees were working at Donau.

High premium growth in the past financial yearDonau generated EUR 554.28 million in grossearned premiums in the extremely successful finan-cial year 2003 and thus achieved an increase of10.0% compared with the previous year. The growthof the entire insurance sector of approximately 4%was thus outperformed by a long way. The profit onordinary activities in the year 2002 amounted toEUR 24.10 million due to the sale of a participationand it reached EUR 16.02 million in 2003 withoutthis special effect.

Life insuranceDue to the extensive media coverage regarding themodification of the existing state pension scheme,the population has become aware that only one’s owninitiative can guarantee financial security in retire-ment. Donau’s pension products offer ideal solutionsfor customers in different periods of life with differ-ent associated needs.

In the past financial year, Donau launched the “Bonus-Pension”, its product for the future pension plan withsubsidised premiums. One of the special features ofthe “BonusPension” is the capital guarantee, which isprovided not only as required by law with the drawingof a monthly annuity, but also with complete withdraw-al of capital at the end of the insurance policy. Donaureacted to the investors’ reduced willingness to takerisks with the single-premium insurance policy “Star-Bond GoodTimes” with a capital guarantee and a min-imum rate of return. At the end of 2003, the unit-linked life insurance policy “StarInvest NEU” wasintroduced, which allows both capital accumulationand pension provision. “StarInvest” invests in globallysuccessful funds, offers the highest flexibility andallows various configuration possibilities.

The premium growth in life insurance amounted to anextremely satisfactory 20.2%; gross earned premiumscould be increased to EUR 184.10 million. This gainrepresents the best result for 10 years. Donau’s mod-ern and flexible product range was the appropriateanswer to the raised pension awareness of the popula-tion due to the ongoing media profile of pensions-related topics.

Property and casualty insurance In property and casualty insurance, Donau has generat-ed a gross earned premium income of EUR 370.18 mil-lion. That corresponds to a gain of 5.6% compared withthe result of the previous year. Expenses for insuranceclaims have fallen by 2.9% to EUR 252.54 million. Thismassive reduction was primarily possible, therefore,because the result of the financial year 2002 wasadversely affected by very high claim payments after theflood disaster.

Cooperation partners in the savings bank sectorCollaboration with the savings bank sector wasstrengthened further in the past financial year. Foryears now, Donau has been the partner of the savingsbanks, of s Versicherung and of Erste Bank in the non-life insurance sector.

Support for art and cultureDonau supports art and culture in Austria. The Donaufoyer at Schottenring has established itself as anevent venue for sophisticated cultural projects in thelast few years. The area designed by Prof. BorisPodrecca offers an aesthetic ambience for exhibi-tions and events. Donau Versicherung was the spon-sor and event venue for the “Long night of music” forthe third time.

ANNUAL REPORT 2003

AUSTRIA.

88

+++ DONAU VERSICHERUNG WAS ABLE TO

INCREASE GROSS EARNED PREMIUMS IN LIFE

INSURANCE BY 20.2 PER CENT. +++


KEY FIGURES *)




Life 184.10 +20.2%


Profit on ordinary activities 16.02 –33.5%


ANNUAL REPORT 2003

In the financial year 2003, BA-CA Versicherung (former-ly CA-Versicherung) generated one of the best results inits company history. Premium growth compared with theyear 2002 recorded a double-digit percentage growthrate, gross earned premiums rose to a total of EUR139.57 million and the profit on ordinary activities couldbe increased to EUR 6.41 million.

Change in the ownership structureDuring the financial year 2003, Wiener Städtische con-siderably raised its shareholding in the company. BA-CAVersicherung is now 90% (formerly 50%) owned byWiener Städtische and 10% (formerly 50%) owned byBank Austria Creditanstalt.

High premium growthIn the key class of life, BA-CA Versicherung once againachieved a growth in premium, which was markedlyabove that of the entire market, with an increase ingross earned premium by 10.2% to EUR 137.90 mil-lion. There were gains primarily in the area of tradi-tional life insurance and essentially with the businessagainst renewable premium payment. The companycontinued its many years of growth above the marketaverage and was able to claim 12th position in themarket among Austria’s life insurance companies. Ifone considers the average growth rate of the last tenyears, BA-CA Versicherung’s premium income rose onaverage by 20.2%, while the entire life insurance mar-ket only grew by 7.7%.

The promotion of life insurance policies againstrenewable premium payment resulted in productiongains of more than 50%. Rates in connection with thepension plan in particular developed disproportionate-ly – BA-CA Versicherung’s so-called “Pensions Man-agement” and unit-linked guarantee products againstrenewable premium payment. In addition, the newproduct in connection with the future pension planwith subsidised premiums, the “VorsorgePlusPen-

sion”, provided a significant contribution to the salessuccess. BA-CA Versicherung jumped over the thresh-old of 300,000 policies in the past financial year forthe first time and currently administers 301,622 lifeinsurance policies, a plus of 10.4%.

In the non-life sector, which is less significant in termsof income (BA-CA Versicherung only operates in the per-sonal accident insurance line), the company recordedincreases of 62.1% or an earned premium income ofEUR 1.67 million.

Excellent total resultThe company’s tight cost management and the consid-erably improved performance again on the capital mar-kets compared with past years primarily contributed tothe excellent year-end result – the net profit could beincreased significantly.

In spite of the increased volume of business, adminis-trative expenses were lowered again in 2003. As a result,the administrative expense ratio could be reduced in thereporting year from 3.9% in the previous year to 3.0%.The capital assets position rose commensurate with thesatisfactory business performance by 14.8% to EUR859.01 million. Due to the favourable performance ofthe financial markets compared with previous years,accounting exchange losses could be almost completelyavoided in the reporting year and a financial result ofEUR 28.64 million produced, which was markedly abovethe previous year.

AUSTRIA.

89

+++ BA-CA VERSICHERUNG GENERATED ONE OF

THE BEST RESULTS IN ITS COMPANY HISTORY

IN 2003. +++


KEY FIGURES *)

in millions of euros 2003 change over 2002



Life 137.90 +10.2%

Capital assets 859.01 +14.8%



Union Versicherung transacts life and personal acci-dent insurance business. Its core competences are pri-vate retirement provision, asset accumulation and riskcoverage. In the financial year 2003, UNION was ableto increase its policy count (life and personal accidentinsurance policies) to approximately 420,000 units.With a market share in life insurance of 5.14%, itattained eighth position in the market from among 40providers operating in the domestic life insurancemarket. It is represented particularly strongly in thefederal capital Vienna, where UNION occupies thirdposition in the life insurance market. Total gross pre-miums have decreased by 12.1% compared with theprevious year, mainly due to the fall in single-premiumpolicies in the life insurance sector. UNION’s grossearned premium income amounted to EUR 303.97million in 2003 and the profit on ordinary activitiescould be increased to EUR 15.09 million (+77.7% onthe previous year).

Increase in Wiener Städtische’s share in Union VersicherungIn addition to Wiener Städtische, which primarily con-tributes its production and development capacities intothe collaboration, the German company ERGO Ver-sicherungsgruppe and Bank Austria Creditanstalt arealso involved in UNION. The ownership structure wasreorganised in the financial year 2003. Wiener Städtis-che and ERGO Versicherungsgruppe now hold 45% eachin UNION, Bank Austria Creditanstalt 10%.

The core business, life insurance policies against arenewable premium, increased by 6.6%. Renewable pre-miums increased by 26.6% to EUR 19.77 million in thecase of unit-linked life insurance policies. The mainfocus with new business was on endowment and annuityinsurance policies in 2003: the introduction of thefuture pension plan with subsidised premiums and thedemand for other pensions-related products broughtapplications to UNION with an annual premium magni-tude of EUR 6.74 million in this sector in 2003 com-pared with EUR 2.44 million in 2002 (+176.7%). Over-all, policies were issued for life insurance applicationswith an annual premium of EUR 161.20 million in the

reporting year. There were approximately 370,000 lifeinsurance policies in UNION’s portfolio as of31.12.2003. This corresponds to a gain of 4.2% com-pared with the year-end 2002.

In personal accident insurance, gross earned premiumsincreased by 1.4% to EUR 5.21 million; at the year-end2003 there were approximately 50,000 policies inUNION’s portfolio.

Payments for insurance claims increased in the lifeinsurance sector in 2003 by 21.3% and amounted toEUR 147.26 million. In personal accident insurance, atotal of EUR 1.31 million was expended in payments forinsurance claims (–12.1%). In 2003, a fall could berecorded by 5.4% in the case of expenses.

Marketing focus on the future pension plan with subsidised premiumsFollowing the trend and the market development,UNION placed its marketing focus on pension productsin 2003. The “future pension plan with subsidised pre-miums”, which has been possible since the start of2003, formed the basic conditions for the widening ofthe product range: with the “VorsorgePlusPension” andthe “RenditePlusPension”, the customer also enjoys taxreliefs in addition to a direct government subsidy and acapital guarantee.

UNION’s capital assets position amounted to EUR 1,823.72 million as of 31.12.2003 (+13.8%on the previous year). The income from capital assetsincreased by 4.7% compared with 2002 from EUR 90.51 million to EUR 94.72 million.

ANNUAL REPORT 2003

AUSTRIA.

90

+++ IN 2003, UNION WAS ABLE TO INCREASE ITS

POLICY COUNT (LIFE AND PERSONAL ACCIDENT)

TO APPROXIMATELY 420,000. +++


KEY FIGURES *)


Gross earned premium 303.97 –12.1%


Life 298.76 –12.3%




ANNUAL REPORT 2003

AUSTRIA.

91

+++ NEW BUSINESS REACHED RECORD VALUES

IN LIFE INSURANCE AND IN PROPERTY AND

CASUALTY INSURANCE. +++


Established in 1974, Wüstenrot Versicherung is31.6% owned by Wiener Städtische. In addition toseveral subsidiaries from the non-insurance sector,Wüstenrot Versicherung participates in WüstenrotLebensversicherung in Warsaw and in Prague with50% in each case and with 45% in WüstenrotLebensversicherung in Bratislava.

If one disregards the ongoing existing need for restruc-turing in motor hull insurance, the financial year 2003ran very satisfactorily for Wüstenrot Versicherung. Newbusiness reached record values both in life insuranceagainst renewable premium as well as in property andcasualty insurance. Nevertheless, the development ofWüstenrot Versicherung’s premium portfolio is alsoshaped by the significant drop in single-premium poli-cies in life insurance business.

Practically the entire life insurance sector was markedin 2003 by a drop in single-premium policies, by arecord in endowment maturities from 15-year lifeinsurance policies concluded at the time and from thenew future pension plan with subsidised premiums.This market situation is reflected also in Wüstenrot Ver-sicherung’s result for the financial year 2003: single-premium policies reduced considerably to EUR 56.3million and the premiums from policies against renew-able payment increased by 3.9% to EUR 275.3 mil-lion, primarily due to the future pension plan with sub-sidised premiums.

In property and casualty insurance, earned premi-ums developed greatly above the industry average

with a plus of 11.8%. In the process, the growth inthe motor sector of 14% should be highlighted.Unfortunately, only a slight improvement could beachieved in claims – not least due to the hail on13th May 2003 – and one can only hope that thetariff adjustment undertaken at the end of the yearshows corresponding positive results in the financialyear 2004.

The premium income from health insurance was on thedecline in the past financial year, namely by 3.7%compared with the year 2002 with a gross earned pre-mium income of EUR 5.67 million.

Thus, as in the two preceding years, a further reductionin personnel and operating expenses was also achievedin 2003. Capital assets rose to EUR 3,164.10 million(+5.0%), including the capital assets of the unit-linkedand index-linked life insurance to EUR 3,534.41 mil-lion (+6.7%). The balance sheet total as of 31.12.2003amounts to EUR 3,657.2 million, which corresponds toan increase of 6.1%.

KEY FIGURES *)


Gross earned premium 492.75 –12.3%


Life 331.57 –20.5%

Health 5.67 –3.7%


Profit on ordinary activities 2.82 n.a.


ANNUAL REPORT 2003

AUSTRIA.

92

+++ IN 2003 - FOR THE THIRD TIME IN

SUCCESSION - S VERSICHERUNG WAS AUSTRIA’S

BIGGEST LIFE INSURER. +++


s Versicherung, the life insurance specialist for ErsteBank and Sparkassengruppe, was also Austria’s biggestlife insurer in 2003 – for the third time in succession.Wiener Städtische indirectly participates in s Ver-sicherung via Donau Versicherung.

Sales winner – the future pension plan with subsidised premiumsBusiness with life insurance policies against renewablepremium developed particularly favourably for s Ver-sicherung in the previous year. In the process, it achievedpremium income of EUR 279.82 million, which corre-sponds to a plus of 19.4% compared with the corre-sponding period in 2002. The government-sponsoredfuture pension plan, which s Versicherung offers to its cus-tomers in the form of the “s Private Pension with Premi-um Plus” was excellently regarded by the market. In theprevious year, s Versicherung succeeded in concludingapproximately 43,000 “s Private Pension with PremiumPlus” policies. Approximately 200,000 future pensionplan policies with subsidised premiums were concludedin the insurance sector throughout Austria in 2003 – aresult that definitely fulfilled the original expectations.

Market leader with single-premium life insurance policiesHowever, the satisfactory development of single-premi-um policies has also contributed considerably to the suc-cess of s Versicherung in the previous year. In spite ofthe persistently low interest rate level, the single-premi-um policy income could be maintained roughly at thehigh level of the previous year. It only decreased by2.1% from EUR 491.54 to EUR 481.10 million. Heretoo, s Versicherung performed significantly better thanthe entire industry. With a market share of well over 30per cent, s Versicherung is unchallenged in first placewith single-premium policies.

Overall, from January to December 2003, s Ver-sicherung achieved a gross earned premium income of

EUR 760.92 million in the life class, which corre-sponds to a market share of around 13.3% and agrowth of 4.8% compared with the premiums from thecorresponding period of the year 2002. s Versicherungclearly outperformed the industry average (+1.7%)with these results.

Premium development under personal accident insur-ance also continued to be strong. Here, s Versicherungrecorded gross earned premium income amounting toEUR 12.21 million in the past financial year, whichcorresponds to a plus of 11.1% in comparison with thecorresponding period in 2002.

The portfolio of policies as of the effective date of 31stDecember 2003 stood at approximately 886,000 poli-cies in both classes of business (life and personal acci-dent). This is a plus of roughly 11% compared with2002. The excellent business trend of the year 2003 isreflected also in the profit on ordinary activities, whichcould be increased from EUR 5.41 million (2002) toEUR 27.40 million.

Outlook – promotion of overseas operationsApart from the consolidation of market position in Aus-tria, it is s Versicherung’s declared objective to contin-ue the course pursued so successfully in Austria in theneighbouring foreign countries as well in order to takea leading position in the life insurance business thereas well in the medium-term.

KEY FIGURES *)




Life 760.92 +4.8%




Great potential in the Bulgarian insurance marketBulgaria’s economy achieved very attractive gains in theyears 2002 and 2003 with 4.8% and 4.6% real GDPgrowth respectively and, for the year 2004, an increaseof approximately 4.8% is again expected. The insurancerevenue per inhabitant is still very low at around EUR 36per annum, as is the case with insurance penetration(insurance premium in relation to Gross Domestic Prod-uct) at roughly 1.9%. On the basis of the excellent eco-nomic forecasts, however, a significant increase shouldbe expected here in the coming years.

Partnership with HUK-Coburg in Bulgaria as wellIn the summer of 2003, the participation of the Ger-man company HUK-Coburg in the two Bulgarski Imotiinsurance companies came about. Since the two-yearcollaboration between HUK-Coburg and WienerStädtische in Poland has proven to be successful,HUK-Coburg then acquired a shareholding of 26% ineach case in the Bulgarski Imoti life and non-life insur-ance companies in the course of a capital increase.Wiener Städtische – the majority owner of the two Bul-garski Imoti insurance companies since the year 2002– now holds shares of 70% each.

Premium income of EUR 6.03 million overallThe two Bulgarski Imoti companies achieved a grossearned premium income of EUR 6.03 million in totalin 2003. This represents 12th position in the entireBulgarian insurance market.

The Bulgarski Imoti life insurance company achievedan earned premium income amounting to EUR 0.81million in 2003, as a result of which it was the ninth

biggest life insurance company in the Bulgarian mar-ket in 2003. In view of the fact that the life insurancemarket in Bulgaria is still in the initial phase, there isa disproportionately high growth potential for the nextfew years.

The Bulgarski Imoti non-life insurance company gener-ated a premium plus of 10.2% in the financial year2003, compared with the previous year, and achievedEUR 5.22 million in earned premiums. More than halfof the premium income in this sector originates frommotor vehicle liability insurance.

In the coming years, the market share of the two Bul-garski Imoti companies should be increased further.The partnership with HUK-Coburg, the capital increasecarried out in 2003 and the planned introduction offurther products in the non-life and life sectors in thecurrent year 2004 are the best preconditions for this.

ANNUAL REPORT 2003

BULGARIA.

93

+++ A DISPROPORTIONATELY HIGH GROWTH

POTENTIAL IS TO BE EXPECTED IN BULGARIA

FOR THE NEXT FEW YEARS. +++


KEY FIGURES NON-LIFE *)





KEY FIGURES LIFE *)


Gross earned premium 0.81 +27.9%**)

Capital assets 2.24 +43.2%**)


*) See comment on page 86**) In order to facilitate comparability with the previous year, single-premium

policies – which were no longer offered in the reporting year – were not taken into account.

ANNUAL REPORT 2003

The Wiener Städtische Group is represented in the Ger-man insurance market with InterRisk. The company,with its headquarters in Wiesbaden, is 100% owned byWiener Städtische and InterRisk in turn is the sole own-er of InterRisk Lebensversicherung (InterRisk Life).

The year 2003 ran extremely favourably for the two Ger-man companies. InterRisk was able to grow more thantwice as strongly as the entire market of German proper-ty and casualty insurers, both in accident and in proper-ty insurance, while the subsidiary InterRisk Lebensver-sicherung achieved the best result by far in the 30-yearhistory of the company.

InterRisk Non-lifeThanks to a satisfactory increase in new production by12.7%, gross earned premiums increased to a total ofEUR 51.75 million. This corresponds to a gain of 5.7%compared with 4.8% in 2002.

InterRisk’s marketing department was completelyrestructured at the start of last year. More than twice asmany intermediary visits as in the previous year and bro-ker events implemented nationwide were coordinatedcentrally from Wiesbaden and the hitherto regional mar-keting agencies closed at the start of 2003.

This has also contributed to internal expenses fallingand therefore the gross expense ratio could be trimmedin spite of increased commissions due to the additionalnew business. The loss ratio also dipped after the highburden of losses of the previous year, caused primarilyby natural peril events. Thus, the loss and expense ratio(combined ratio) could be emphatically improved overallin 2003 from 95.7% to 91.8%.

InterRisk LebensversicherungIn life insurance, new production could be increased by53.5% in total. As before, a considerable proportion of

that is term life insurance, followed by occupational dis-ability and life annuity insurance and “capital-forminglife insurance”. Gross earned premiums increased by7.8% to EUR 41.77 million in the financial year 2003.

As a consequence of increased investment income frominterest and capital gains and concurrently reducedexpenditure for capital asset administration, the resultfrom capital investment could be markedly improved –the net interest return increased in the process to 6.1%.As a result, InterRisk was able to stipulate a surplus dec-laration for the current year as well, which is above themarket average.

After the development of the “self-employed occupa-tional disability insurance policy”, the company has tak-en a further step to successfully react to the changes inthe German welfare state, by means of products orien-tated towards target groups, with the introduction of afuneral expenses insurance policy for senior citizenswithout evidence of health.

GERMANY.

94

+++ IN LIFE INSURANCE, IT WAS POSSIBLE

TO INCREASE NEW PRODUCTION OVERALL BY

MORE THAN 50 PER CENT. +++


KEY FIGURES *)

InterRisk Versicherungs-Aktiengesellschaft



Capital assets 152.33 –8.5%

Profit on ordinary activities **) –15.49 n.a.

KEY FIGURES *)

InterRisk Lebensversicherungs-Aktiengesellschaft





*) See notes on page 86**) The negative result on ordinary activities is based solely on the write-off of shares in

Bayerischer Hypo Vereinsbank (HVB), without this effect it would have been positiveat EUR 2.77 million.

On the way into the EUCroatia wishes to join the European Union, if possible inthe next round of expansion in 2007. Creation of thepreconditions for this has the highest priority in Croatiandomestic and foreign policy. Important steps in thisdirection were the admission into the World Trade Organ-isation (WTO), the accession to the NATO programme“Partnership for Peace”, the conclusion of the Stabilisa-tion and Association Agreement with the EU and mem-bership of CEFTA.

Macroeconomic development in Croatia has benefitedtremendously from normalisation of the political situa-tion in the last few years. Stable growth rates have beenachieved for three years; GDP rose in 2003 by 4.3%with an inflation rate of 1.5%.

Investors have recognised and used the opportunitiesin Croatia since the middle of the 1990s. Austria is thebiggest foreign investor with a share of almost 30%and is very strongly represented in the financial ser-vices sector in particular.

KvarnerKvarner Wiener Städtische, with its headquarters inRijeka, emerged as a composite insurer through themerger in 2001 of the companies Wiener Städtischeosiguranje, which was almost only active in the lifeinsurance sector, and the non-life insurance companyKvarner osiguranje. Approximately 92% of the shares

in Kvarner Wiener Städtische were owned by WienerStädtische as of 31.12.2003.

Kvarner further increases market share in 2003as well Kvarner Wiener Städtische achieved a premium incomeof EUR 18.45 million overall in 2003. This correspondsto a premium growth of 50.5% compared with the pre-vious year. In this way, the company recorded the biggestgain in the insurance market and moved up from twelfthto ninth position in the market. Significant steps in2003 were the setting-up of the extensive nationwidesales network, the strengthening of the successful col-laboration with Steiermärkische Sparkasse operating inthe country (a member of the Erste Bank Group) andpreparations for the creation of a new company headoffice in Zagreb. A capital increase amounting to15,390,000 Croatian Kuna (approximately EUR 2 mil-lion) was implemented in the first quarter 2004 in orderto comply with regulatory provisions.

ANNUAL REPORT 2003

CROATIA.

95

+++ KVARNER WIENER STÄDTISCHE MOVES UP

TO NINTH POSITION IN THE MARKET WITH A

PREMIUM GROWTH OF 50.5 PER CENT. +++


KEY FIGURES *)



Non-life 8.99 +50.3%

Life 9.46 +50.6%




ANNUAL REPORT 2003

Vienna Life, which has been operationally active sincethe year 2000 and has its headquarters in Schaan,Liechtenstein, continued its strong expansionarycourse in 2003 as well. The company, with grossearned premiums amounting to EUR 15.09 million,produced a plus of almost 200% compared with thefinancial year 2002.

Vienna Life transacts only life insurance business,whereby the main focus lies with unit-linked life insur-ance. In the process, in addition to standard products,product design adapted to the individual needs of thecustomer is to the fore. Up to the year 2002, unit-linkedlife insurance policies excluding single-premium insur-ance policies were written in the segment. In 2003, theproduct range was broadened by products againstrenewable premium payment. The first sales results con-firm the correctness of this expansion strategy.

The company also succeeded in attracting new customergroups with implementation of the new generation of

products. Apart from the expansion of marketing collab-oration arrangements, Vienna Life’s focus was with theconsolidation and extension of administrative capacities.This applies both in personnel considerations and in thefunctional extension of the management software usedby the company.

In addition to continuation of the consolidation andoptimisation of business processes, a further strength-ening of distribution capacities is also planned for theyear 2004. Apart from these primary corporate goals,a further consolidation of operating results is also tar-geted.

LIECHTENSTEIN.

96

+++ GROSS EARNED PREMIUMS WERE INCREASED

BY ALMOST 200 PER CENT COMPARED WITH THE

FINANCIAL YEAR 2002. +++


KEY FIGURES *)



Life 15.09 +186.5%


Profit on ordinary activities –0.55 n.a.


The largest new EU memberAlmost 39 million people live in Poland, so the coun-try offers an extremely high potential for insuranceservices. Poland is not only the largest of the new EUcountries in terms of surface area, but is also highlyinteresting as far as its history is concerned. The endof communism was initiated here, economic structuresaligned to the West developed here even before mostother countries – and it is Poland that has the biggestprivatisation factor of all the new EU countries. Nowonder that Poland was and is one of the first desti-nations for investors.

After an economic growth of 3.4% in 2003, an actu-al GDP growth of approximately 4.3% is assumed forthe current year. Inflation amounted to just 0.8% in2003 and an increase to around 2.6% is anticipatedfor 2004.

Compensa Non-life and Compensa LifeThe Wiener Städtische Group is strongly representedin Poland with the two Compensa companies. Highbrand awareness, innovative and award-winning prod-ucts distinguish Compensa Non-life and CompensaLife in the Polish insurance market. In Poland, theWiener Städtische Group has successfully cooperatedwith the German insurance group HUK-Coburg (whichalso participates in both Compensa companies) sincethe year 2001.

The two Compensa companies are present in allPoland’s regions with approximately 100 representa-tive offices. In the financial year 2003, a revampedcompany logo was relaunched, which gives a modernand contemporary image to the two insurance com-panies.

Compensa Non-life – merger with Heros completedCompensa Non-life is the non-life insurance companyof the Wiener Städtische Group in the Polish insur-ance market. Compensa Non-life was merged withHeros in the financial year 2003, the former secondnon-life insurance company of the Group in Poland.The conclusion of the merger in accordance with theletter of the law was in September 2003. In terms ofthe premiums of both companies achieved in the fullyear 2003, Compensa Non-life now ranks among theten largest non-life insurance companies in the country.

The first synergy effects of the merger were already inforce in the course of the year 2003: significant sav-ings could be achieved in the administrative area dueto the amalgamation of numerous provincial headoffices and a streamlining of the distribution network.

Compensa Non-life, which is owned by Wiener Städti-sche and German HUK-Coburg with equal shares,offers products in virtually all non-life classes of busi-ness excluding financial insurance policies. The cen-tral element of the portfolio lies in motor insurance.Compensa Non-life was honoured by one of the Polishdaily newspapers with the widest circulation – “Gaze-ta Wyborcza” – and by Poland’s most important opin-ion research institute for the two motor hull insuranceproducts “Basic” and “Power”. A householders’ insur-ance policy and a product for small and medium-sizedbusiness enterprises were also relaunched in 2003.

After a premium drop in 2002 caused by a portfolioadjustment, Compensa Non-life’s premiums could beincreased significantly again in the year 2003. Grossearned premiums amounted to EUR 36.73 million, whichrepresents a gain of 16.2% on the financial year 2002.

ANNUAL REPORT 2003

POLAND.

97

+++ AFTER THE MERGER WITH HEROS, COMPENSA

NON-LIFE NOW RANKS AMONG POLAND’S TEN

LARGEST NON-LIFE INSURANCE COMPANIES. +++


ANNUAL REPORT 2003

Compensa Life – continued strong premium growthThe shareholders in Compensa Life are WienerStädtische with approximately 62% and HUK-Coburgwith around 38% of the shares. Considerable savingscould be achieved in the administrative area in 2003due to the merger of Vienna Life with Compensa Lifeeffected in 2002.

The restructuring of the distribution network was suc-cessfully continued. Particular attention was paid to aneven greater collaboration with Compensa Non-life. Anew product (“Gwarancja Jubilat”) was introduced in2003. This endowment insurance policy with a strongpension element is directed mainly at younger cus-tomers.

Gross earned premiums for Compensa Life could beincreased in 2003 by 29.4% compared with the pre-vious year to EUR 14.25 million.

Plans for 2004In the first quarter 2004, the two Compensa compa-nies moved into a new head office in the capital War-saw. Further organisational improvements are planned

for the year 2004 through utilisation of synergy effectsbetween the two Compensa companies. A capitalincrease is envisaged for the second quarter 2004,both at Compensa Non-life and at Compensa Life, forthe financing of growth.

The gross earned premiums for Heros for the first ninemonths of the year are not included in the key figuresblock. They amounted to EUR 11.51 million.

POLAND.

98

+++ THE TWO COMPENSA COMPANIES MOVED

INTO A NEW HEAD OFFICE IN WARSAW AT THE

START OF 2004. +++


KEY FIGURES *)

Compensa Non-life





KEY FIGURES *)

Compensa Life






Strong economic growthIn 2003, the Romanian economy was able to practi-cally maintain the high growth of the previous year andto achieve a real GDP growth of 4.4% (2002: 4.9%). Itshould be assumed that this high growth momentumwill also continue in 2004. Inflation has eased consid-erably in the last few years and slightly more than 10%(2003: 15.4%) is expected for 2004.

UnitaUnita was founded in 1990 as the first insurance com-pany in Romania exclusively with private capital, as aresult of which it has ended the 50 years of continuousstate insurance monopoly. Originally, only life insur-ance policies were sold by Unita, but non-life insur-ance policies have also enlarged the product rangesince 1996. Unita has belonged to the Wiener Städtis-che Group since the year 2001.

In October 2002, Unita acquired 54% of Agras,Romania’s leading agricultural insurance company.This shareholding has risen in the meantime toapproximately 69% in the course of a capitalincrease.

Unita improves from ninth to sixth position in the marketUnita’s product portfolio covers the needs both of pri-vate and of corporate customers in the life and non-lifeinsurance sectors.

The products are mainly distributed via the nation-wide sales network of approximately 40 offices and130 agencies with more than 1,000 employees. Inaddition, Unita also collaborates with brokers andbanks in marketing. In the financial year 2003, Uni-ta succeeded in improving from ninth (2002) to sixthposition in the market and in increasing its marketshare to more than 5%.

With a share capital of approximately EUR 10.5 mil-lion, Unita ranks among the most financially strongcompanies in the Romanian insurance market. Grossearned premium of EUR 26.44 million could beachieved in the financial year 2003, which representsa gain of 96.9% on the previous year.

For the year 2004, a widening of the product portfolioby a pension plan insurance policy and a revision of thehouseholders’, homeowners’ and motor hull insurancepolicies is planned.

ANNUAL REPORT 2003

ROMANIA.

99

+++ UNITA RANKS AMONG THE MOST FINAN-

CIALLY STRONG COMPANIES IN THE ROMANIAN

INSURANCE MARKET. +++


KEY FIGURES *)



Non-life 23.46 +134.7%

Life 2.98 –13.1%




ANNUAL REPORT 2003

Clear market leader in the agricultural insurance sectorEstablished in 1992, Agras is Romania’s biggest agri-cultural insurance company by a long way with a mar-ket share of 53% at the year-end 2003. The companyis listed on Bucharest Stock Exchange – as the onlyinsurance company. The main shareholder withapproximately 69% of the shares is Unita in additionto Raiffeisenbank with around 13% and other smallshareholders.

At the start of 2003, Agras (which up to then had beencalled Agras Omniasig) was renamed Agras – GrupulWiener Städtische (Agras – a company of the WienerStädtische Group) in order to make its membership ofthe Wiener Städtische Group recognisable. Apart fromits head office in the capital Bucharest, Agras has 42offices across the country, in which approximately 300employees worked at the year-end 2003.

Roughly half of the insurance portfolio for Agras con-sists of agricultural insurance policies, such as hailand windstorm insurance policies, livestock insurancepolicies (pestilence, death and accident insurancepolicies for working agricultural animals). A specialline for Agras is the insurance of agricultural busi-nesses including their commercial vehicles and othermachines.

Agras is also strong in the other property and casualty classesTo supplement the core business, Agras also offers oth-er non-life insurance products, on request, in addition toagricultural insurance policies. Motor insurance policies,homeowners’ and householders’ insurance policies, per-sonal accident and liability insurance polices are sold. Atravel sickness insurance policy – “AgrasMed” – waslaunched in 2003. As a supplement to the motor third-party liability and motor hull insurance policies, a “greencard” and a transit insurance policy (“AgrasTrans”) havebeen offered also since 2003.

After a capital increase in the autumn of 2003, theshare capital of Agras now amounts to approximatelyEUR 2.2 million. Gross earned premium of EUR 6.98million could be achieved in the financial year 2003,which represents a gain of 115.8% on the year 2002.The area of insured land used for agricultural purposesamounted to approximately one million hectares.

ROMANIA.

100

+++ AGRAS IS ROMANIA’S BIGGEST AGRICUL-

TURAL INSURANCE COMPANY BY A LONG WAY

WITH A MARKET SHARE OF 53 PER CENT. +++


KEY FIGURES *)



Non-life 6.98 +115.8%




High economic growth in Serbia and MontenegroThe economic growth of the country, with inhabitantsnumbering 10.6 million, was always between 4.0% and5.5% from 2000 to 2003. The total Gross DomesticProduct amounted to EUR 17.7 billion in 2003. Thereduction in the inflation rate from 19.2% in 2002 to11.9% in 2003 is worth noting. A further declining infla-tion rate of 8% is forecast for the year 2004. With regardto the exchange rate, the Serbian Dinar is tied to theEuro. Due to the stringent targets of the IMF, the perfor-mance of the state budget should also be viewed as verypositive.

Wiener Städtische Belgrade: successful formation of a new companyThe market entry of Wiener Städtische in Serbia was pre-pared with a team from Serbia and Austria. After a thor-ough phase of analysis and preparation, the decisioncame down to the formation of a new company. At theend of 2002, “Wiener Städtische osiguranje a.d. –Beograd” (Wiener Städtische Belgrade) was founded,which began its operational activity in the first quarter2003. Wiener Städtische Belgrade is the first foreigninsurance company in Serbia that is active both in thelife sector and in the non-life sector.

The new company succeeded in establishing itself sus-tainably in the Serbian insurance market even in thefirst year of its existence. More than EUR 1 million in

accounted premium had already been generated afterfive months and there was almost EUR 2.6 million atthe end of the year 2003. In 2004, another surge ofgrowth should be expected in the first half-year after ashort consolidation phase.

The allocation of premiums between life insurance andnon-life insurance is almost in balance as well. Apartfrom life insurance policies, the main elements of busi-ness are motor hull insurance policies, which representmore than half of the non-life insurance portfolio. WienerStädtische Belgrade employed approximately 100 staffas of 31.12.2003. The head office is located in Bel-grade and there were nine offices in the country at theyear-end.

Wiener Städtische Belgrade is very positively received bythe population. In the area of marketing, a sponsorshipcontract could be concluded with the popular footballclub “Roter Stern Belgrad” (Red Star Belgrade) for thenational games and extended for 2004.

ANNUAL REPORT 2003

SERBIA AND MONTENEGRO.

101

+++ IN THE FIRST YEAR OF EXISTENCE, WIENER

STÄDTISCHE BELGRADE WAS ALREADY ABLE TO

ESTABLISH ITSELF SUSTAINABLY. +++


KEY FIGURES *)

in EUR millon 2003 change over 2002

Gross earned premium 0.86 n.a.

Non-life 0.30 n.a.

Life 0.56 n.a.

Capital assets 1.23 n.a.



ANNUAL REPORT 2003

The Slovak Republic – the EU star pupil withrobust economic growthThe Slovak Republic’s tax system was fundamentallyreformed at the start of 2004. The income, turnoverand corporation taxes now amount to a uniform 19%,while the inheritance, gift and dividend taxes weretotally abolished. This reform should improve theinvestment climate in the country even further andlead to additional business locations by foreign com-panies. The economic trend of the Slovak Republicpromises a thing or two: Gross Domestic Product isgrowing robustly (3.8% is anticipated for 2004),unemployment is falling and the Slovak Korunaremains stable. Medium-sized businesses are gainingground with foreign investors, but the majority areconcentrating on the Bratislava area. For majorinvestments, the build-up of the automotive industryis particularly remarkable; the Slovak Republic willclimb to be one of Europe’s biggest motor manufac-turers in the coming years.

Kooperativa BratislavaKooperativa Bratislava is the second-biggest insurancecompany in the Slovak Republic and is ranked as oneof the most successful companies of the WienerStädtische Group. In the years 2002 and 2003, itmanaged, together with its two subsidiaries, to practi-cally double the market share of the Group to morethan 21% in 2003. Wiener Städtische was one of thefounder members of the company in 1990, today it isthe 100% owner of Kooperativa.

Kooperativa operates extensively in the country withnine provincial head offices, 70 offices and more than300 sales agencies in all Slovak towns and municipal-ities with more than 3,000 inhabitants. The compre-hensive product portfolio covers both the life sectorand the non-life sector both for private customers andfor businesses and public institutions.

After disproportionately high premium increasescould be produced in the financial year 2002, Koop-erativa was able to considerably increase the premi-um growth rates once again in 2003. It managed, in

2003, to increase gross earned premiums by 40.6%compared with the previous year to EUR 176.63 mil-lion. As a result, Kooperativa has surpassed the mar-ket growth of the Slovak insurance market of approx-imately 15% by a long way. The non-life branch, inwhich earned premiums were increased by 49.0% toEUR 121.52 million, was particularly successful. Theincrease in premiums in life insurance by 25.0% toEUR 55.11 million also represented an extremely sat-isfactory outcome.

The reasons for Kooperativa’s success are varied, butthe following, amongst other factors, have contributedsignificantly to it: the company’s emphatically trans-acted cross-selling activities in 2003, the introductionof a totally new customer relationship management sys-tem and, of course, also the introduction of new prod-ucts tailored to the needs of the customers both in non-life as well as life insurance. The collaboration initiatedmid-2003 with the country’s biggest retail bank –Slovenská sporitel’na belonging to the Erste BankGroup – performed very successfully for both sides. Asin the year before, Kooperativa won the honour “Insur-er of the Year” in 2003 as well, which has beenbestowed by the economics magazine “Trend” since2002.

Objectives for the year 2004In addition to a further increase in market share andstrengthening of the collaboration with Slovenskásporitel’na, the swift integration of a joint back-officefor all three Slovak insurance companies of the WienerStädtische Group is planned in particular for the year2004, for Komunálna and Kontinuita in addition toKooperativa.

SLOVAK REPUBLIC.

102

+++ WITH 41 PER CENT PREMIUM GROWTH,

KOOPERATIVA HAS SURPASSED THE GROWTH OF

THE SLOVAK MARKET BY FAR. +++


KEY FIGURES *)



Non-life 121.52 +49.0%

Life 55.11 +25.0%




The most successful year in the company historyThe year 2003 was the most successful year so far forKomunálna in the now 10-year existence of the com-pany. It has belonged to the Wiener Städtische Groupsince 2001 with Kooperativa Bratislava as the major-ity owner. Komunálna is a composite insurer, which isvery heavily involved in the municipal sector. Munici-palities and towns as well as companies in their own-ership rank among its most important customers.

Komunálna occupied fifth place with the awarding ofthe prize “Poist’ovna roka 2003” (Insurance Compa-ny of the Year 2003) of the respected Slovak eco-nomics magazine “Trend” – this award is granted forexcellent corporate success. It was able to prove withthis honour that a smaller company can also operateflexibly and extremely successfully economically.

Gross earned premiums reached the volume of EUR15.48 million in 2003, which represents a growth of61.0% on the previous year. This high premiumincrease was mainly possible due to the excellent sales

result in motor classes. In non-life insurance, grossearned premiums could be increased by 84.4% and by1.0% in life insurance.

Expansion of the distribution networkKomunálna’s marketing arrangements were steppedup considerably in 2003. As a result, the awarenesslevel of the brand was raised and the positive imageof the company strengthened. To support the salesactivity, the company’s sales organisation wasexpanded by an external distribution network in 2003in order to be able to comprehensively cover theneeds of the market as far as possible.

ANNUAL REPORT 2003

SLOVAK REPUBLIC.

103

+++ FOR KOMUNÁLNA, THE YEAR 2003 WAS

THE MOST SUCCESSFUL YEAR SO FAR IN THE

COMPANY HISTORY. +++


KEY FIGURES *)



Non-life 12.75 +84.4%

Life 2.73 +1.0%




ANNUAL REPORT 2003

Kontinuita was founded in 1997. In June of the year2003, Wiener Städtische became the majority share-holder with the acquisition of an 80% holding of sharesand therefore the most important strategic partner forthe company. Wiener Städtische acquired the remain-ing 20% in Kontinuita in the first quarter of the year2004. Subsequently, Kooperativa Bratislava acquiredthe shares.

Cessation of the non-life insurance branch – number 5 in the life insurance marketThe entry of Wiener Städtische resulted in a completerestructuring of Kontinuita’s product portfolio: in July2003, the selling of non-life products was discontinuedand Kontinuita now exclusively concentrates on lifeinsurance.

In the second half of the year 2003, distribution andmarketing activities were intensified and the trainingof marketing staff stepped up. At the same time, aninitiative was launched for the recruitment of newsales force employees, who work at Kontinuita on afreelance basis. Kontinuita has a well-organised distri-

bution network and is represented in the whole of Slo-vakia with 40 offices. It was the fifth-largest insurancecompany in the Slovak life insurance market in 2003with a market share of 4.93%.

Even in the change of ownership phase, an increase ingross earned premiums amounting to 3.6% could beaccomplished in 2003 compared with the year 2002.Excellent results were produced in traditional lifeinsurance, where an increase in earned premiums by7.8% resulted. The slightly negative result on ordinaryactivities is connected with the costs of the restructur-ing and integration of the company into the WienerStädtische Group.

SLOVAK REPUBLIC.

104

+++ KONTINUITA HAS SPECIALISED IN LIFE

INSURANCE POLICIES AND IS NOW THE NUM-

BER FIVE IN THE SLOVAK MARKET. +++


KEY FIGURES *)



Non-life 0.62 +48.4%

Life 20.33 +2.6%




Czech Republic – growth above the EU levelThe actual GDP growth in the Czech Republic amountedto 2.9% in 2003 and 3.0% is anticipated for 2004. Theinternationalisation of the Czech economy should beexpedited even further through accession to the EU. Theinsurance market in the Czech Republic ranks amongEurope’s most rapidly growing markets. Total growthamounted to 15.3% in 2003, in the process the premi-um income in life insurance rose by 20% and that innon-life insurance by 12.4%.

Kooperativa PragueThe Czech Kooperativa is the biggest insurance compa-ny of the Wiener Städtische Group outside Austria.Established in the year 1990 with the involvement ofWiener Städtische, the company was the first privatefoundation of an insurance company in the reform coun-tries of Central and Eastern Europe. In subsequent years,Wiener Städtische gradually expanded its shareholdingin Kooperativa, which was developing extremely suc-cessfully, and is today the owner of approximately 95%of the company.

Kooperativa is a modern composite insurer, which offersa broad spectrum of insurance products for the propertyand casualty sector as well as for the pensions sector. 15regional provincial head offices with just under 230offices report to Kooperativa’s headquarters in Prague.Approximately 3,300 employees were working in thecompany at the end of the year 2003.

Growth rates considerably above the market growthPremium income could be increased by 19.1% in 2003compared with the previous year to almost EUR 600 mil-lion. As a result, Kooperativa is the clear number two onthe Czech insurance market, but Kooperativa’s marketshare could be extended from 18% to 19.1% in 2003.

In life insurance, Kooperativa recorded a growth rate forgross earned premiums of 34.1%, the premium growthin non-life insurance amounted to 15.8%.

Divisional takeover of the savings bank insurance companyOne of the most important events of the financialyear 2003 was the acquisition of non-life insurancefrom Pojis t’ovna Ceské sporitelny (Czech savingbanks insurance company) with effect from thebeginning of the year 2004, as a result of whichKooperativa has assumed a premium incomeamounting to approximately EUR 100 million andmore than 550 well-qualified employees. As a result,the foundation stone was also laid for the strategiccollaboration between Kooperativa and the parentcompany of the Czech savings bank insurance com-pany, the Czech Savings Bank (a member of the ErsteBank Group).

AwardsKooperativa also received numerous awards in 2003;one of the most important was the honour “InsuranceCompany of the Year” for Kooperativa’s personal insur-ance policy, which it received from the Czech Chamberof Insurance Brokers.

Kooperativa was again voted best insurance company inthe country with the survey of the Pan-European Associ-ation for Culture, Education and Scientific Collaboration,now conducted for the third time.

Capital increase in the first quarter 2004In the first quarter 2004, Kooperativa’s share capital wasdoubled to 2 billion Czech Koruny (approximately EUR60 million).

ANNUAL REPORT 2003

CZECH REPUBLIC.

105

+++ KOOPERATIVA IS THE LARGEST COMPANY

OF THE WIENER STÄDTISCHE GROUP OUTSIDE

AUSTRIA. +++


KEY FIGURES *)



Non-life 473.60 +15.8%

Life 120.39 +34.1%




ANNUAL REPORT 2003

High economic growth in 2004 as wellThe actual GDP growth in Hungary amounted to 2.8% in2003 and 3.2% is anticipated for 2004.

Union Biztosító: successful entry into the non-life branchUNION Biztosító is a modern composite insurer and haspension products, motor insurance policies and propertyand liability insurance polices for private customers andcompanies in its portfolio.

At the end of 1999, when Wiener Städtische becameUnion’s sole owner, the company was almost exclu-sively operating in the Hungarian life insurance mar-ket. By the year 2002, premium income could bealmost trebled in this branch. The non-life sector hasbeen strongly promoted now as well since the year2003. In 2003, Union reached a premium income ofEUR 5.81 million in the non-life branch with a broadproduct range.

The company doubled its number of customers in2003 with the sales offensive in the non-life sectorand thus laid the foundation stone for future cross-selling activities, which will have a positive influenceon the sales development of other insurance prod-ucts. Through the expansion in non-life insurance,the company has created a second pillar in the mar-ket in the past financial year in addition to the lifebranch and in this way successfully changed from acompany mainly operating in life insurance to a com-posite insurer.

Union is the exclusive partner of the Hungarian motoring associationAs a result of a very successful advertising campaign inOctober 2003, Union was able to conclude approxi-mately 60,000 motor third-party liability policies in thefinal two months of the year 2003. The exclusive collab-oration with the Hungarian motoring association alsodemonstrates the excellent quality of Union’s motorinsurance products.

Positive development of life insurance productsagainst renewable premium paymentIn 2003, Union was able to increase its total earned pre-mium income by 2.7% to EUR 20.55 million and thusconsolidate its position among the medium-sized insur-ance companies in the Hungarian market. In the area oflife insurance policies against renewable premium pay-ment, Union was able to increase its earned premiumsby 12.0%, whereas a decrease was recorded with single-premium insurance policies. The company has set fur-ther expansion in the non-life sector as an objective forthe following years in addition to stable growth in lifeinsurance.

HUNGARY.

106

+++ UNION BIZTOSÍTÓ DOUBLED ITS NUMBER

OF CUSTOMERS IN 2003 WITH AN OFFENSIVE

IN THE NON-LIFE SECTOR. +++


KEY FIGURES *)



Non-life 5.81 +153.7%

Life 14.74 –16.8%




In 2003, Kupala celebrated its 10-year anniversary inthe Belarussian insurance market. The company, inwhich Wiener Städtische participates with 33.1%, wasable to steadily increase its gross earned premium inprevious years and currently occupies ninth position inthe Belarussian insurance market, which is dominatedby the state insurance companies. In total, 33 insurancecompanies are active in Belarus.

In 2003, Kupala generated gross earned premiumamounting to EUR 2.16 million. This corresponds to again of 74.7% compared with the previous year.

Kupala has a well-developed distribution network withseveral branches in the entire country. The head officewas relocated from Grodno to Minsk in 2003. The year2003 was characterised by comprehensive reorganisa-tion measures both in the head office and in thebranches, which can now concentrate exclusively onmarketing. Improvements in the IT sector and in mon-

itoring, in claims handling and in operating procedurescontributed to a significant increase in efficiency forthe company.

At the year-end 2003, there was a state intervention inthe Belarussian insurance industry – motor third-partyliability business was remonopolised and may now bewritten solely by state insurance companies. Therefore,in Kupala, the year 2004 is characterised by portfoliorestructuring and intensified efforts in the marketing ofproperty insurance policies, particularly householders’insurance.

ANNUAL REPORT 2003

BELARUS.

107

+++ KUPALA CELEBRATED ITS TEN-YEAR

EXISTENCE IN THE BELARUSSIAN INSURANCE

MARKET IN 2003. +++


KEY FIGURES *)



Non-life 2.16 +74.7%

Capital assets 1.34 –37.6%



ANNUAL REPORT 2003

Milestone EU enlargementThe enlargement of the European Union on 1st May2004 represented an important milestone in the histo-ry of the EU: ten countries joined the EU and will giveit a new appearance in the coming years in many dif-ferent respects. The population of the EU has grown byalmost 20%, the moving closer together of Europe’scountries in living proximity will be the centre of atten-tion for the coming years. The effects of the cultural,economic and social interconnections will show in vir-tually all private and public areas.

The significant countries for the Wiener StädtischeGroup that have acceded to the EU are Poland, theCzech Republic, the Slovak Republic and Hungary andalso Slovenia, where Wiener Städtische’s business activ-ity also commences with accession to the EU. Thealready very strong economic development in thesecountries is accelerated even further by accession to theEU and will have a positive impact on the premiumincome in the insurance sector.

In private customer business, life insurance in par-ticular is booming, as more and more people have

the necessary means for a private retirement arrange-ment and do not wish to exclusively rely on the exist-ing state pension scheme. There is also still a con-siderable need to catch up in the motor andhomeowners’ insurance lines and therefore a hugemarket potential for the companies of the WienerStädtische Group to offer suitable products for itsdevelopment.

Accompanying corporate customersThe entrepreneurial move into the new countries hassimplified significantly for Austrian companies with EUenlargement. Due to the removal of various export andimport regulations, Austria’s small and medium-sizedbusinesses are also able to more easily take advantageof the tremendous growth potential of the Central Euro-pean market in future.

As the leading Austrian insurance group, the WienerStädtische Group accompanies its domestic customerson their way into the new markets. It is a strong part-ner – at home and on the spot – so that the opportuni-ties that regional collaboration in an open Europeoffers may be used.


108

+++ ECONOMIC MOMENTUM IN THE NEW EU MEM-

BER STATES WILL ACCELERATE FURTHER. +++


1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0Bulgaria Czech Rep. Croatia Poland Romania Slovak Rep. Slovenia Serbia Hungary Austria

INSURANCE DENSITY AND INSURANCE PENETRATION

in USD in %

Accounted premiums USD/head (insurance density) Accounted premiums over GDP in % (insurance penetration)

7.5

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

(Source: Swiss Re, Sigma 8/2003)

Expansion plans for the current yearNo major expansionary steps are planned for theGroup for the year 2004. However, the main focus ofthe current year in the Group is the expansion of theexisting company. It is the overriding objective to con-tinue to participate disproportionately in the stronggrowth of the insurance markets in Central and East-ern Europe and in this way to steadily raise the mar-ket share of Group companies in the respective mar-kets. In addition to the development of marketpresence, the integration into the Group of the com-panies founded or taken over in previous years is alsoan important task area for the year 2004. Through thebuild-up of supraregional networks within the Groupand the strengthening of the collaboration of Groupcompanies, synergy effects in many lines (personneldevelopment, EDP, reinsurance etc.) may be obtainedon the one hand and on the other hand service quali-ty for the customers will also be raised through thecross-border collaboration.

The chart on page 108 – which highlights the need forthe countries of the region to catch up in relation toinsurance services – makes the high market potentialof the insurance markets of Central and Eastern Europeclear. While Austria’s insurance market is relatively sat-urated, one may assume an ongoing increase in insur-

ance density and insurance penetration in the remain-ing countries. This development will occur – at a dif-ferent speed in the different countries – over a periodof several years in parallel with the positive economicdevelopment of the region.

The following overview, from which the economicmomentum of the region clearly emerges, highlightsthe high economic growth of the countries in Centraland Eastern Europe. In terms of the West Europeanenvironment, the countries of Central and EasternEurope will also develop considerably more dynami-cally in 2004.


+++ THE OBJECTIVE IS TO CONTINUE TO PAR-

TICIPATE IN THE GROWTH OF THE CENTRAL AND

EAST EUROPEAN INSURANCE MARKETS. +++


GDP GROWTH IN REAL TERMS2002 2003 2004 (forecast)

Bulgaria 4.8% 4.6% 4.8%

Czech Republic 2.0% 2.9% 3.0%

Croatia 5.2% 4.3% 3.5%

Poland 1.4% 3.7% 4.3%

Romania 4.9% 4.4% 4.7%

Slovak Republic 4.4% 4.1% 3.8%

Slovenia 3.2% 2.4% 3.3%

Hungary 3.3% 2.8% 3.2%

Austria 0.9% 0.7% 2.0%

(Source: Bank Austria Creditanstalt, EEC Research)

ANNUAL REPORT 2003

Bulgaria

Bulgarski ImotiAlabin Str. 56BG-1000 SofiaTel.: 00359 2 988 80 05Fax: 00359 2 988 11 46E-Mail: [email protected]: www.bulgarskiimoti.bg

Germany

InterRisk VersicherungenKarl-Bosch-Straße 5D-65203 WiesbadenTel.: 0049 611 2787 0Fax: 0049 611 2787 222E-Mail: [email protected]: www.interrisk.de

Italy

Wiener Städtische Allgemeine Versicherung AG ItaliaVia Cristoforo Colombo 149I-00147 RomaTel.: 0039 06 510 70 11Fax: 0039 06 510 70 129E-Mail: [email protected]: www.wieneritalia.com

Croatia

Kvarner Wiener Städtische osiguranje d.d.Osjecka 46HR-51000 RijekaTel.: 00385 51 22 78 96Fax: 00385 51 22 79 71E-Mail: [email protected]: www.kvarner-wiener-osig.com

Liechtenstein

Vienna Life Lebensversicherung AGWagnerweg 6FL-9494 SchaanTel.: 00423 235 06 60Fax: 00423 235 06 69E-Mail: [email protected]

Poland

Towarzystwo Ubezpieczen “Compensa” S.A.Towarzystwo Ubezpieczen na Z

.ycie “Compensa” S.A.

Al. Jerozolimskie 162PL-02-342 WarszawaTel.: 0048 22 501 6000Fax: 0048 22 501 6001Internet: www.compensa.pl

Romania

Unita S.A.Str. Ofcea 9RO-300561 TimisoaraTel.: 0040 256 490 308Fax: 0040 256 203 650E-Mail: [email protected]: www.unita.ro

Agras – Grupul Wiener Städtische S.A.Str. Alexandru Philippide 9B, Sector 2RO-020466 BucurestiTel.: 0040 212 114 542Fax: 0040 212 114 276E-Mail: [email protected]: www.agras.biz

WIENER STÄDTISCHE INTERNATIONAL.

110


Serbia and Montenegro

Wiener Städtische Osiguranje a.d. BeogradBulevar Mihajla Pupina 10a11070 Novi BeogradTel.: 00381 11 135 760Fax: 00381 11 137 403E-Mail: [email protected]: www.wiener.co.yu

Slovak Republic

Kooperativa poist’ovna, a.s.Stefanovicova 4SK-816 23 BratislavaTel.: 00421 2 572 99 210Fax: 00421 2 572 99 239E-Mail: [email protected]: www.koop.sk

Komunálna poist’ovna, a.s.ul. Vladimíra Clementisa 10SK-821 02 BratislavaTel.: 00421 2 48 21 05 111Fax: 00421 2 48 21 05 115E-Mail: [email protected]: www.kpas.sk

Kontinuita poist’ovna, a.s.Rajská 15SK-811 08 BratislavaTel.: 00421 2 57 370 200Fax: 00421 2 57 370 291E-Mail: [email protected]: www.kontinuita.sk

Czech Republic

Kooperativa pojistovna, a.s.Templova 747CZ-110 01 Praha 1Tel.: 00420 2 210 00 111Fax: 00420 2 210 00 410E-Mail: [email protected]: www.koop.cz

Hungary

Union Biztosító Rt.Baross u. 1H-1082 BudapestTel.: 0036 1 486 42 00Fax: 0036 1 486 43 91E-Mail: [email protected]: www.unionbiztosito.hu

Belarus

Joint Belarus-Austrian Insurance Company Kupala1-yj Izmailovskij pereulok 51 entr. 4BY-220131 MinskTel.: 00375 17 237 16 39Fax: 00375 17 237 11 59E-Mail: [email protected]: www.kupala.by



ANNUAL REPORT 2003

CONSOLIDATED BALANCE SHEET AS OF 31st DECEMBER 2003

112

ASSETS 2003 2002

in EUR

A. Intangible assets

I. Goodwill acquired against payment 1,043,527.20 1,161,745.34

II. Expenditure for the acquisition of an insurance portfolio 10,775,273.14 14,499,007.36

III. Other intangible assets 25,906,359.27 14,602,330.76

TOTAL INTANGIBLE ASSETS 37,725,159.61 30,263,083.46

B. Capital assets

I. Land and buildings 1,226,677,077.91 1,207,894,997.20

II. Capital assets in affiliated companies and participations

1. Shares in affiliated companies in so far as they arenot included in the consolidated financial statements 70,850,064.64

2. Bonds and other securities from affiliated companies and loans to affiliated companies 51,326,676.82

3. Participations

Equity consolidation 78,418,475.74

Other 192,728,946.87

4. Bonds and other securities from and loans to companies with which a shareholding relationship exists 293,474,063.43 686,798,227.50 768,695,058.56

III. Other capital assets

1. Shares and other non fixed-interest securities 2,769,961,514.22

2. Bonds and other fixed-interest securities 3,606,605,834.71

3. Shares in jointly-owned capital assets 86,635,758.71

4. Mortgage receivables 303,390,408.64

5. Advance payments on policies 27,628,349.73

6. Other loans 1,414,536,617.63

7. Deposits at banks 309,864,952.76

8. Other capital assets 416,555.40 8,519,039,991.80 7,736,298,323.64

IV. Deposit receivables from the assumed reinsurance business 70,296,783.25 78,209,317.36

TOTAL CAPITAL ASSETS 10,502,812,080.46 9,791,097,696.76

C. Capital assets of the unit-linked andindex-linked life insurance policies 813,164,289.06 387,236,874.82

D. Receivables

I. Receivables from the direct insurance business

1. from policyholders 204,888,952.00

2. from insurance intermediaries 16,308,290.68

3. from insurance companies 4,250,974.83 225,448,217.51 212,665,820.54

II. Accounts receivable from the reinsurance business 69,940,679.13 84,122,008.21

III. Other receivables 115,575,327.65 135,936,006.95

TOTAL RECEIVABLES 410,964,224.29 432,723,835.70

E. Pro rata interest 164,941,512.46 139,485,272.94

Amount carried forward 11,929,607,265.88 10,780,806,763.68

WIENER STÄDTISCHE CONSOLIDATED FINANCIAL STATEMENTS


ASSETS 2003 2002

Amount brought forward 11,929,607,265.88 10,780,806,763.68

F. Other assets

I. Tangible assets (excluding land and buildings) and inventories 53,852,683.24 50,376,860.97

II. Cash at banks and cash in hand 346,249,064.72 164,643,029.16

III. Other assets 67,391,428.18 35,006,085.16

TOTAL OTHER ASSETS 467,493,176.14 250,025,975.29

G. Accruals and deferrals

I. Shortfall as per Article X, Paragraphs 3 and 4of the Austrian Financial Reporting Act [RLG] 19,673,657.41 24,291,135.91

II. Tax deferral on the assets side 54,242,980.11 30,805,593.13

III. Other deferred charges 108,500,033.16 91,717,870.05

TOTAL DEFERRED CHARGES 182,416,670.68 146,814,599.09

Balance sheet total 12,579,517,112.70 11,177,647,338.06


ANNUAL REPORT 2003

CONSOLIDATED BALANCE SHEET AS OF 31st DECEMBER 2003

114

LIABILITIES 2003 2002

in EUR

A. Shareholders’ equity

I. Share capital

1. Nominal value 89,655,022.06 89,655,022.06

II. Capital reserves

1. Committed 151,497,067.69 257,102,428.43

III. Revenue reserves

1. Free reserves 24,602,729.82 18,774,840.71

IV. Risk reserve as per Section 73a of theAustrian Insurance Supervision Act, taxed portion 30,707,836.27 22,801,621.42

V. Net profit 20,036,756.48 14,582,592.45

thereof profit brought forward 625,792.45 1,086,851.87

VI. Adjustment items for shares of other shareholders 16,911,980.88 7,630,335.05

TOTAL SHARHOLDERS’ EQUITY 333,411,393.20 410,546,840.12

B. Untaxed reserves

I. Risk reserve as per Section 73a of theAustrian Insurance Supervision Act 60,494,940.33 59,474,662.22

II. Valuation reserve due to special write-downs 196,733,608.03 175,532,477.36

III. Other untaxed reserves 19,567,214.28 59,051,941.96

TOTAL RESERVES 276,795,762.64 294,059,081.54

C. Subordinated liabilities 12,201,067.30 3,500,000.00

D. Underwriting provisions in the retention

I. Unearned premiums


2. Reinsurers’ share –54,358,892.51 332,188,856.65 280,994,262.43

II. Actuarial reserve

1. Overall account 7,829,955,126.93

2. Reinsurers’ share –77,641,161.74 7,752,313,965.19 6,988,407,452.41

III. Provision for outstanding insurance claims

1. Overall account 1,734,745,358.21

2. Reinsurers’ share –465,252,541.41 1,269,492,816.80 1,256,447,174.91

IV. Provision for the refund of premium not related to results


2. Reinsurers’ share –4,470,113.50 34,264,077.29 36,442,945.86

V. Provision for the refund of premium related to resultsor the profit participation for policyholders


2. Reinsurers’ share –7,000.00 150,735,150.36 148,328,410.67

VI. Equalisation reserve 148,727,417.04 119,331,558.42

VII. Other underwriting provisions


2. Reinsurers’s share –1,675,823.97 47,825,773.49 51,956,777.56

TOTAL TECHNICAL PROVISIONS 9,735,548,056.82 8,881,908,582.26

E. Underwriting provisions of the unit-linkedand index-linked life insurance policies 779,165,123.90 382,764,244.35

Amount carried forward 11,137,121,403.86 9,972,778,748.27



LIABILITIES 2003 2002

Amount brought forward 11,137,121,403.86 9,972,778,748.27

F. Non-underwriting provisions

I. Provisions for severance payments 88,625,783.83 89,477,407.86

II. Provisions for pensions 346,324,696.14 344,039,543.00

III. Provisions for taxation 61,350,191.78 29,897,245.60

IV. Other provisions 116,702,845.46 85,331,472.05

TOTAL OTHER PROVISIONS 613,003,517.21 548,745,668.51

G. Deposit liabilities from the ceded reinsurance business 80,852,970.21 80,619,783.46

H. Other liabilities

I. Liabilities from the direct insurance business

1. to policyholders 231,806,431.09

2. to insurance intermediaries 41,997,523.03

3. to insurance companies 9,952,631.30 283,756,585.42 221,792,871.15

II. Unsettled claims from the reinsurance business 58,384,506.71 45,460,922.73

III. Bonds payable (with the exception of supplementary capital) 4,126,500.00 4,823,524.97

IV. Liabilities to banks 184,418,208.03 46,075,566.91

V. Other liabilities 160,178,525.62 187,075,876.23

TOTAL LIABILITIES 690,864,325.78 505,228,761.99

I. Accruals and deferrals 57,674,895.64 70,274,375.83

Balance sheet total 12,579,517,112.70 11,177,647,338.06


ANNUAL REPORT 2003


116

GENERAL INSURANCE(PROPERTY/CASUALTY AND HEALTH INSURANCE) 2003 2002

Underwriting account in EUR1. Earned premiums

Accounted premiums

Overall account 2,173,512,726.36

Ceded reinsurance premiums –516,561,753.85 1,656,950,972.51 1,454,276,602.21



Reinsurers’ share –13,075,451.83 –45,465,857.74 –5,614,153.75

TOTAL PREMIUMS 1,611,485,114.77 1,448,662,448.46 2. Investment income for the technical account 16,413,764.35 10,400,303.92 3. Other underwriting income 12,211,506.33 9,918,344.17 4. Expenses for insurance claims



Reinsurers’ share –367,930,916.46 1,032,683,604.69 987,841,122.86



Reinsurers’ share 107,333,380.11 13,420,241.80 24,556,736.46

TOTAL INSURANCE CLAIMS –1,046,103,846.49 –1,012,397,859.32 5. Increase in underwriting provisions

Actuarial reserve


Reinsurers’s share –102,331.00 35,925,213.00 26,022,077.40


Overall account 0.00

Reinsurers’ share 0.00 0.00 1,239,431.44

TOTAL INCREASE IN UNDERWRITING PROVISIONS –35,925,213.00 –27,261,508.846. Decrease in underwriting provisions



Reinsurers’ share –27,030.03 –2,190,208.59 0.00

TOTAL DECREASE IN UNDERWRITING PROVISIONS 2,190,208.59 0.007. Expenditure for the refund of premium not related to results


Reinsurers’s share 782,703.40 17,071,160.18 18,661,987.32

TOTAL EXPENDITURE FOR THE REFUND OF PREMIUMNOT RELATED TO RESULTS –17,071,160.18 –18,661,987.32

8. Expenditure for the refund of premium related to resultsOverall account 0.00

Reinsurers’s share 0.00 0.00 1,300,000.00

TOTAL EXPENDITURE FOR THE REFUND OF PREMIUMRELATED TO RESULTS 0.00 –1,300,000.00

9. Operating expensesAcquisition expenses 365,979,201.52 340,287,876.02

Other operating expenses 171,332,441.49 160,762,498.83

Reinsurance commissions and profit commissionsfrom reinsurance cessions –106,805,950.43 –154,735,480.65

TOTAL OPERATING EXPENSES –430,505,692.58 –346,314,894.2010. Other underwriting expenses –85,147,924.66 –78,407,994.01 11. Change in the equalisation reserve –29,906,125.63 668,014.76 Underwriting result (amount carried forward) –2,359,368.50 –14,695,132.38



GENERAL INSURANCE(PROPERTY/CASUALTY AND HEALTH INSURANCE) 2003 2002

Underwriting result (amount brought forward) –2,359,368.50 –14,695,132.38



Income from participations 3,095,561.87 5,427,691.80

Income from land and buildings 32,549,533.14 35,836,074.48

Income from other capital assets 76,825,260.98 105,607,612.15

Profits from the disposal of capital assets 32,639,116.33 34,321,722.37

Other income from capital assets and interest income 24,411,988.26 22,073,100.33

TOTAL INVESTMENT INCOME 169,521,460.58 203,266,201.13


Expenditure for asset management 6,640,618.92 7,061,510.52

Write-downs on capital assets 74,644,227.37 109,927,539.35

Interest charges 2,923,537.32 7,509,553.32

Losses from the disposal of capital assets 5,096,437.93 15,424,013.33

Other expenditure for capital assets 24,956,659.77 13,570,267.49

TOTAL CAPITAL EXPENDITURE –114,261,481.31 –153,492,884.01

3. Investment income transferred into the underwriting account –16,413,764.35 –10,400,303.92

4. Other non-underwriting income 9,509,327.03 4,242,925.17

5. Other non-underwriting expenditure –3,096,406.03 –10,352,182.66

Profit on ordinary activities (property/casualty and health) 42,899,767.42 18,568,623.33


ANNUAL REPORT 2003


118


Underwriting account in EUR

1. Earned premiums

Accounted premiums


Ceded reinsurance premiums –31,905,791.76 1,402,738,556.09 1,138,004,681.04



Reinsurers’ share –326,403.98 –7,521,208.59 –6,254,375.27

TOTAL PREMIUMS 1,395,217,347.50 1,131,750,305.77

2. Investment income for the technical account 378,674,142.49 303,973,719.52

3. Non-realised profits from capital assets as per Item C of the Assets 30,774,952.17 4,698,206.81

4. Other underwriting income 7,765,996.70 3,579,049.06




Reinsurers’ share –15,870,548.00 868,176,762.95 687,830,649.12



Reinsurers’ share –442,589.00 10,464,617.68 7,161,774.90

TOTAL INSURANCE CLAIMS –878,641,380.63 –694,992,424.02


Actuarial reserve


Reinsurers’ share –7,510,798.82 490,770,528.17 341,339,827.65



Reinsurers’ share 0.00 1,541,211.62 –2,291.73

TOTAL INCREASE IN UNDERWRITING PROVISIONS –492,311,739.79 –341,337,535.92

7. Expenditure for the refund of premium related to resultsor profit participation of the policyholders

Overall account 85,806,494.64 88,500,797.64

Reinsurers’ share –7,000.00 –15,000.00

TOTAL PROFIT PARTICIPATION –85,799,494.64 –88,485,797.64


Acquisition expenses 254,588,901.65 186,064,251.57

Other operating expenses 72,846,918.76 60,134,730.93

Reinsurance commissions and profit commissionsfrom reinsurance cessions –8,443,027.07 –5,100,436.14

TOTAL OPERATING EXPENSES –318,992,793.34 –241,098,546.36

9. Non-realised losses from capital assets as per Item C of the Assets –7,573,385.46 –53,076,132.32

10. Other underwriting expenses –22,838,053.33 –20,170,932.91

Underwriting result (amount carried forward) 6,275,591.67 4,839,911.99




Underwriting result (amount brought forward) 6,275,591.67 4,839,911.99






Income from write-ups 0.00 4,483,812.44











3. Investment income transferred into the underwriting account –378,674,142.49 –303,973,719.52



Profit on ordinary activities (life) 7,628,205.93 4,790,800.08


ANNUAL REPORT 2003


120

GENERAL INSURANCE + LIFE = TOTAL BUSINESS 2003 2002

Underwriting result General Insurance –2,359,368.50 –14,695,132.38

Underwriting result Life 6,275,591.67 4,839,911.99

TOTAL UNDERWRITING RESULT 3,916,223.17 –9,855,220.39






Income from write-ups 0.00 4,483,812.44











3. Investment income transferred into the underwriting account – 395,087,906.84 – 314,374,023.44



6. Profit on ordinary activities 50,527,973.35 23,359,423.41

7. Taxes on income –23,371,150.52 –16,157,535.14

8. Profit for the year 27,156,822.83 7,201,888.27

9. Non-group shareholders’ share in the profit for the year –2,853,536.56 –3,058,335.21

10. Release of reserves

Release of the valuation reserve due to special write-downs 7,140,924.95 13,065,667.15

Release of other untaxed reserves 44,180,490.27 28,291,781.68

Release of free reserves 0.00 39,577,122.02

TOTAL RELEASE OF RESERVES 51,321,415.22 80,934,570.85

11. Transfer to reserves

Transfer to the risk reserve as per Section 73a of the Austrian Insurance Supervision Act 5,605,632.13 3,452,401.82

Transfer to the valuation reserve due to special write-downs 28,398,361.88 17,772,680.46

Transfer to other untaxed reserves 4,659,697.43 41,038,835.07

Transfer to free reserves 17,550,046.02 9,318,465.98

TOTAL TRANSFER TO RESERVES –56,213,737.46 –71,582,383.33

12. Profit for the year 19,410,964.03 13,495,740.58

13. Profit brought forward 625,792.45 1,086,851.87

Net profit 20,036,756.48 14,582,592.45


ANNUAL REPORT 2003

NOTES TO THE CONSOLIDATED ACCOUNTS.

121


I. General information on the accounting and val-uation methods

The consolidated financial statements were prepared incompliance with proper accounting principles and incompliance with the general practice to convey an asaccurate as possible picture of the company’s net worth,financial position and earnings.

That applies in particular for the group of companiesincluded in the consolidation and the provisions regard-ing the consolidation of capital, debts and expenditureand earnings.

The formal structure of the consolidated financial state-ments fundamentally complies with the structure provi-sions of the Austrian Insurance Supervision Act.

II. Consolidation scopeEssentially, all subsidiaries are included in the consoli-dated financial statements. In addition to WIENERSTÄDTISCHE Allgemeine Versicherung Aktiengesell-schaft, a total of 21 domestic companies and 24 foreigncompanies were fully consolidated. One further compa-

ny was included in the consolidated financial statementson a pro rata basis and 11 companies were included atequity. Due to their overall lesser significance for aninsight into the net worth, financial position and earn-ings or due to the lack of possibilities for influence, theparticipations specially marked in the Annex (Overviewof the participations) were only assessed at the book val-ue. Three companies (non-profit-making residential con-struction companies) are subject to a consolidation banin accordance with Section 248 of the Austrian Com-mercial Code, as they would distort the insight into thenet worth, financial position and earnings, and weretherefore assessed at the book value. In the case of thecompany that is consolidated on a pro rata basis, thereis a corresponding collaboration agreement or an under-writing agreement, which provides that the businesses ofthis company are jointly managed by the shareholders.

Compared with the consolidated financial statements asof 31st December 2002, 4 foreign companies and 1domestic company were included in the consolidatedfinancial statements for the first time by way of full con-solidation.

Reason

“Wiener Städtische osiguranje” akcionarsko drustvo, Belgrade Incorporation

Bulgarski Imoti Life AG Insurance Company, Sofia Acquisition

Bulgarski Imoti Non-Life AG Insurance Company, Sofia Acquisition

KONTINUITA – Slovenská zivotná poist’ovna, a.s., Pressburg Acquisition

Businesspark Brunn Entwicklungs GmbH, Vienna Purchase of additional shares

Change in the consolidation scope:

An additional capital contribution amounting to TEUR 36.5 (= 50.0% of the subscribed capital) was acquired in 2003 by WIENER STÄDTISCHEAllgemeine Versicherung Aktiengesellschaft, Vienna from Businesspark Brunn Entwicklungs GmbH, Vienna (BBE), hitherto valued according to theequity method. Consequently, WIENER STÄDTISCHE Allgemeine Versicherung Aktiengesellschaft, Vienna became the sole shareholder in BBE. Fol-lowing the acquisition, 99% of the shares were invested as a contribution in kind in LVP Holding GmbH, Vienna. Therefore, as of 31st December2003, BBE is included in the consolidated financial statements for the first time by way of full consolidation.

In the financial year 2003, WIENER STÄDTISCHE Allgemeine Versicherung Aktiengesellschaft, Vienna acquired 40% of the share capital of BankAustria Creditanstalt Versicherung AG, Vienna (formerly: CA Versicherung AG, Vienna). As a result, the participation increased from 50% to 90%.Therefore, the hitherto proportionally consolidated company is included in the consolidated financial statements as of 31st December 2003 by wayof full consolidation.

In the financial year 2003, WIENER STÄDTISCHE Allgemeine Versicherung Aktiengesellschaft, Vienna acquired 11.67% of the share capital ofUnion Versicherungs-AG, Vienna (Union). The participation in Union, which is included in the consolidated financial statements on a pro rata basis,increased in this way from 33.33% to 45.00% of the share capital.

In 2003, Bankowe Towarzystwo Ubezpieczen i Reasekuracji “HEROS” S.A., Warsaw (Heros), which was included in the consolidated financial state-ments until 31st December 2002 by way of full consolidation, was merged with Towarzystwo Ubezpieczeniowe “Compensa” S.A., Warsaw (CompensaNon-life) as an acquiring company. WIENER STÄDTISCHE Allgemeine Versicherung Aktiengesellschaft, Vienna directly participates in the share cap-ital of Compensa Non-life with 23.04% after implementation of the merger. Compensa Non-life is valued in the consolidated financial statements asof 31st December 2003 according to the equity method.

Metropolitan Rechenzentrum Betriebs-GmbH, Vienna was merged in 2003 with Metropolitan Datenservice Gesellschaft m.b.H., Vienna as anabsorbing company.

ANNUAL REPORT 2003


122


III. Principles of consolidationThe annual financial statements of WIENER STÄDTI-SCHE Allgemeine Versicherung Aktiengesellschaft andof the subsidiaries involved form the basis of the con-solidated financial statements. The financial state-ment reporting date for all companies included in the

consolidation scope is 31st December 2003. Capitalconsolidation was carried out according to the bookvalue method by offsetting the acquisition costs withthe proportionate shareholders’ equity of the sub-sidiaries on the date of acquisition or of the consoli-dation for the first time.

Amounts in EUR ’000 Disposals Additions

Capital assets –26,864 390,561

Underwriting provisions –16,007 533,704

Amounts in EUR ’000 Disposals Additions

Earned premium

Gross –21,032 113,623

Net –6,353 105,103

Expenses for insurance claims

Gross –10,672 45,279

Net –5,002 42,899

Change to underwriting provisions

Gross 0 64,469

Net 0 62,950

Operating expenses –9,717 19,123

Financial result –905 21,151

Balance sheet

Income statement

The repercussions of the changes to the consolidation scope or to the method of consolidation are as follows,taking into account the consolidation-related transactions:

The following first consolidation dates were selected for the companies included in the consolidated financialstatements:

Fully-consolidated companies Date of first consolidation

DONAU Allgemeine Versicherungs-Aktiengesellschaft, Vienna 1.1.1995

“Grüner Baum” Errichtungs- und Verwaltungsges.m.b.H., Innsbruck 1.1.1995

Altstadt Hotelbetriebs GmbH, Vienna 1.1.1995

ARITHMETICA Versicherungs- und Finanzmathematische Beratungs-Gesellschaft m.b.H., Vienna 1.1.1995

Brunn am Gebirge Realbesitz GmbH, Vienna 1.1.1995

CENTER Hotelbetriebs GmbH, Vienna 1.1.1995

InterRisk Versicherungs-Aktiengesellschaft, Wiesbaden 1.1.1995



Fully consolidated companies Date of first consolidation

LVP Holding GmbH, Vienna 1.1.1995

Senioren Residenz Fultererpark Errichtungs- und Verwaltungs GmbH, Innsbruck 1.1.1995

Senioren Residenz Veldidenapark Errichtungs- und Verwaltungs GmbH, Innsbruck 1.1.1995

Wiener Verein Bestattungs- und Versicherungsservice Gesellschaft m.b.H., Vienna 1.1.1995

Neue Heimat Oberösterreich Holding GmbH, Vienna 1.1.1996

PROGRESS Beteiligungsges.m.b.H., Vienna 1.1.1996

KOOPERATIVA poist’ovna, a.s., Pressburg 31.12.1996

Kooperativa pojistovna, a.s., Prague 31.12.1996

VLTAVA majetkovosprávní a podílová spol.s.r.o., Prague Date of establishment

SECURIA majetkovosprávna a podielová s.r.o., Pressburg 1.1.1997

PFG Parkflächenbewirtschaftungs GesmbH, Salzburg 1.1.1998

Projektbau GesmbH, Vienna 1.1.1998

Bank Austria Creditanstalt Versicherung AG, Vienna 31.12.1998

Kvarner Wiener Städtische osiguranje d.d., Rijeka 1.1.1999

WIENER STÄDTISCHE Beteiligungs GmbH, Vienna 1.1.1999

Union Biztosító Rt., Budapest 31.12.1999

DBR Friedrichscarrée GmbH & Co KG, Stuttgart Date of establishment

DBR Friedrichscarrée Liegenschaften-Verwaltungs GmbH, Stuttgart Date of establishment

DBR-Liegenschaften GmbH & Co KG, Stuttgart Date of establishment

DBR-Liegenschaften Verwaltungs-GmbH, Stuttgart Date of establishment

InterRisk Lebensversicherungs-Aktiengesellschaft, Wiesbaden 1.1.2000

Vienna-Life Lebensversicherung Aktiengesellschaft, Schaan 1.1.2000

KÁLVIN TOWER Immobilienentwicklungs- und Investitionsgesellschaft m.b.H., Budapest 31.12.2000

CAPITOL a.s., Pressburg 1.1.2001

Celetná 25, s.r.o., Prague 1.1.2001

Gesundheitspark Wien-Oberlaa Gesellschaft m.b.H., Vienna 1.1.2001

KAPITOL pojist’ovaci a financni poradenstvi, a.s., Brno 1.1.2001

Komunálna poist’ovna, a.s., Banská Bystrica 1.1.2001

St. Magdalen Projektentwicklungs- und Verwertungsgesellschaft m.b.H., Vienna 30.9.2001

WIENER STÄDTISCHE Finanzierungsdienstleistungs GmbH, Vienna Date of establishment

Metropolitan Datenservicegesellschaft m.b.H., Vienna 1.1.2002

UNITA S.A., Timisoara 1.1.2002

AGRAS – Grupul Wiener Städtische S.A., Bucharest 31.12.2002

„Wiener Städtische osiguranje“ akcionarsko drustvo, Belgrade 1.1.2003

Bulgarski Imoti Life AG Insurance Company, Sofia 1.1.2003

Bulgarski Imoti Non-Life AG Insurance Company, Sofia 1.1.2003

Businesspark Brunn Entwicklungs GmbH, Vienna 1.1.2003

KONTINUITA – Slovenská zivotná poist’ovna, a.s., Pressburg 1.1.2003

Proportionally consolidated companies Date of first consolidation

Union Versicherungs-Aktiengesellschaft, Vienna 1.1.1995

ANNUAL REPORT 2003


124


In the case of the fully-consolidated companiesincluded in the consolidated financial statements asof 31.12.2003 for the first time or for newly acquiredshares of companies already included in previousyears, there resulted differential amounts on theassets side of TEUR 103,726 (TEUR 88,754) and dif-ferential amounts on the liabilities side of TEUR 916(TEUR 9,146). The differential amounts on the assetsside of TEUR 8,445, originally allocated into consoli-dated reserves, decreased due to the removal from theconsolidation scope of a subsidiary hitherto includedby way of full consolidation (Bankowe TowarzystwoUbezpieczen i Reasekuracji “HEROS” S.A., Warsaw).

The book value method as per Section 264 Para. 1 ofthe Austrian Commercial Code was used with the val-

uation of participations in associated companies. Inthe consolidated financial year 2003, additional dif-ferential amounts on the assets side to the extent ofTEUR 19,803 (TEUR 3,273), which were offset withthe consolidated reserves, resulted on balancebetween the book values of the participations and therespective proportionate shareholders’ equity.

The determination of the profit or loss apportionable toother shareholders was effected on the basis of the netincome or net loss.

Receivables and liabilities between the includedcompanies are offset, expenses and income frominternal business transactions are essentially elimi-nated.

Associated companies Reporting date of annual financial statements

PKB Privatkliniken Beteiligungs-GmbH, Vienna (consolidated financial statements) 31.12.2002

Medial Beteiligungs-Gesellschaft m.b.H., Vienna 31.12.2002

Gewista-Werbegesellschaft m.b.H., Vienna 31.12.2002

Kapital & Wert Vermögensverwaltung Aktiengesellschaft, Vienna (consolidated financial statements) 30.09.2003

TECH-GATE VIENNA Wissenschafts- und Technologiepark GmbH, Vienna 31.12.2003

CROWN-WSF spol.s.r.o., Prague 31.12.2002

IMPERIAL-Székesfehérvar Ingatlankezelési Kft., Budapest 31.12.2002

Wüstenrot Versicherungs-Aktiengesellschaft, Salzburg 31.12.2003

Towarzystwo Ubezpieczen Na Zycie Compensa Spolka Akcyjna, Warsaw 31.12.2003

Towarzystwo Ubezpieczeniowe „Compensa“ Spolka Akcyjna, Warsaw 31.12.2003

Joint Belarus-Austrian Insurance Company Kupala, Minsk 31.12.2002

The annual financial statements at the following financial statement reporting dates were used for the equity valu-ation of the affiliated companies:



IV. Accounting and valuation rulesThe annual financial statements underlying the consolidated financial statements for WIENERSTÄDTISCHE Allgemeine Versicherung Aktienge-sellschaft and for the included subsidiaries wereuniformly prepared in accordance with the account-ing and valuation principles applicable for WienerStädtische.

The currency conversion of the annual financialstatements of foreign subsidiaries is effected inaccordance with the reporting date rate method.

Intangible assets, if acquired against payment, wereshown on the assets side at acquisition cost withdeduction of scheduled amortisations.

Land, rights and buildings equivalent to land,including buildings on foreign land, were valued atacquisition cost or construction cost, reduced byscheduled and non-scheduled depreciations; differ-ential amounts were allocated to hidden reserves inland and buildings in the case of two included com-panies.

The capital assets of unit-linked and index-linkedlife insurance are valued according to the marketvalue principle.

Mortgage receivables and other loans, includingthose to affiliated companies and to companies withwhich a shareholding relationship exists, are valuedessentially at the nominal value of the outstandingreceivables. An additional payment discount isspread over the term of the loan and reported on theliabilities side of the balance sheet under deferrals.

The valuation of tangible assets (excluding land andbuildings) is effected at acquisition cost, reduced byscheduled write-downs. Low-value assets are fullywritten off in the year of acquisition.

Shares in non-consolidated affiliated companies,which were not valued according to the equitymethod, and participations are valued according tothe strict lower-of-cost-or-market principle.

Securities and shares are valued on the balancesheet date at acquisition cost or the lower stock

exchange or market value. The strict lower-of-cost-or-market principle was continued for all companies.

Underwriting provisions:Underwriting provisions are essentially adopted inthe consolidated financial statements withoutchange from the annual financial statements ofincluded companies.

Unearned premiums in property and casualty insur-ance are basically calculated pro rata temporis withdeduction of a cost discount amounting to TEUR23,252 (TEUR 22,634). In life insurance, unearnedpremiums are established to the extent prescribedin the business plan with no cost discounts deduct-ed. In health insurance, unearned premiums are cal-culated pro rata temporis without a cost discount.

Non-underwriting provisions:Pensions and severance provisions are adopted with-out change from the individual financial statementsof the subsidiaries. Liabilities are shown in the bal-ance sheet in compliance with the respective provi-sions under commercial or fiscal laws. Other provi-sions are established to the extent of estimatedutilisation.

The provisions for pensions of TEUR 346,325(TEUR 344,040) reported in the balance sheet as of31st December 2003 consist of the pensions provi-sions of TEUR 324,426 (TEUR 317,664) calculat-ed in accordance with the provisions of Section 14in conjunction with Section 116 of the AustrianIncome Tax Act, a taxed amount of TEUR 2,225(TEUR 2,085) and the shortfall in accordance withArticle X Paras. 3 and 4 of the Austrian FinancialReporting Act of TEUR 19,674 (TEUR 24,291),which is reported separately under accruals on theassets side; the shortfall decreased in 2003 byTEUR 4,617 (TEUR 4,501).

Liabilities to the tax authorities are adopted fromthe financial statements of the subsidiaries.

Receivables and liabilities are valued at the nominalvalue or repayment amount.

The following explanations are provided on the contin-gent liabilities not reported in the balance sheet.

ANNUAL REPORT 2003


126


There are letters of comfort for Businesspark Brunn Entwicklungs GmbH amounting to TEUR 799 (TEUR 1,911) in favour of the municipality of Brunnam Gebirge regarding the assumption of costs for theconstruction of the motorway junction and develop-ment of the property. There is a new liability forTowarzystwo Ubezpieczeniowe “Compensa” S.A. amount-ing to TEUR 7,018. In addition, there is a letter ofindemnity in favour of APC-Geschäftscenter Betriebs-ges.m.b.H. amounting to TEUR 359 (TEUR 509) anda joint and several liability for loans that were con-tracted by COUNTRY INN VIC Hotelerrichtungs- undBetriebsgesellschaft m.b.H. up to a total amount of

TEUR 10,392 (TEUR 10,392). Furthermore, the com-pany is liable for the loan repayments of employees toSpar- und Vorschusskasse der Angestellten der“Wiener Städtische Allgemeine Versicherung Aktienge-sellschaft” reg.Gen.m.b.H. of TEUR 267 (TEUR 228).

The letter of comfort with regard to Union IT GmbH,Budapest (TEUR 343) no longer applies.

V. Significant participationsThe overview of participations and the information onthe consolidation scope are attached to the notes tothe consolidated financial statements as an Annex.

Amounts in Intangible Land Shares in Participations Bonds and Bonds and SharesEUR ’000 assets and buildings associated (Other) other securities other securities in

companies from and loans from and loans affiliatedto affiliated to companies companiescompanies with which a

shareholdingrelationship

exists

Position on31st Dec. 2002 30,263 1,207,895 77,067 385,376 45,849 189,465 70,939

Additions 17,759 87,573 1,351 26,541 36,086 142,814 46,969

Disposals –517 –21,086 0 –116,623 –8,488 –37,276 –38,495

Transfers –2,290 –11,617 0 –87,651 –22,120 –1,485 –8,028

Write-downs –7,490 –36,088 0 –14,914 0 –44 –535

Position on31st Dec. 2003 37,725 1,226,677 78,418 192,729 51,327 293,474 70,850


Loans to the Republic of Austria 954,407 936,020

Receivables from loans to other public bodies 106,379 124,044

Receivables from loans to other borrowers 353,751 328,561

VI. Explanatory notes on items in the balance sheet

The values of the balance sheet items shown hereinafter have developed as follows:

The real estate values of developed and undevelopedland amounted to TEUR 227,272 (TEUR 204,448) on31.12.2003. The balance sheet value of properties

used by Wiener Städtische amounted to TEUR 130,681(TEUR 132,914).

Other loans, which are not secured by means of an insurance policy, break down as follows:



The market values of capital assets amount to:

Hidden reserves increased in the reporting year by TEUR130,725 to TEUR 498,433 (TEUR 367,708) in total.

The market values of land and buildings were deter-mined in accordance with the recommendations of theAustrian Association of Insurance Companies. Valuationreports from 2003 formed the basis of the valuation forthe most part.

The market values for reports from the valuation year2004 amount to TEUR 82,420, 2003: TEUR 756,759,2002: TEUR 33,406, 2001: TEUR 57,398, 2000:TEUR 59,695, 1999: TEUR 466,745.

The market values of shares in affiliated companies orof shares in participations correspond to the stockmarket values or other available fair market values. Ifstock market values or other available fair market val-ues do not exist, the acquisition costs are assessed asmarket values. If necessary, the acquisition costs arereduced by non-scheduled depreciations or the higheropenly reported proportionate capital.

Stock market values or book values (acquisition costs,if necessary reduced by non-scheduled depreciations)were valued as market values of shares and of othersecurities.

The remaining capital assets were valued at nominalvalue, if necessary reduced by non-scheduled depre-ciations.

From the amount reported in the item other liabilities,TEUR 36,548 (TEUR 46,109) is apportionable to taxliabilities and TEUR 8,319 (TEUR 7,506) to socialsecurity liabilities.

Differential amounts resulting on the assets side fromthe capital consolidation amounting to TEUR 237,879(TEUR 142,598) were offset with revenue reserves.

The differential amounts on the assets side allocatedin the previous year to hidden reserves in land and buildings decreased in 2003 by TEUR 3,757 toTEUR 71,757.

Differential amounts on the liabilities side, resultingfrom the capital consolidation, amounting to TEUR 15,945 (TEUR 15,029) were allocated to therevenue reserves.

Differential amounts on the assets side from the equityvaluation amounting to TEUR 37,930 (TEUR 18,127)were offset on balance with revenue reserves.

Items as per Section 81c Para. 2of the Austrian InsuranceSupervision Act Market value on Market value onAmounts in EUR ’000 31.12.2003 31.12.2002

Land and buildings 1,456,423 1,416,636

Shares in affiliated companies 73,563 72,380

Bonds and other securities fromand loans to affiliated companies 51,327 45,984

Equity participations 145,951 77,067

(Other) participations 238,857 439,753

Bonds and other securities fromand loans to companieswith which a shareholdingrelationship exists 294,159 190,950

Shares and othernon fixed-interest securities 2,855,792 3,051,504

Bonds and otherfixed-interest securities 3,666,039 2,603,300

Shares in jointly-ownedcapital assets 93,000 79,178

Mortgage receivables 303,390 320,832

Advance payments on policies 27,628 29,123

Other loans 1,414,537 1,388,625

Committed deposits at banks 309,865 364,017

Other capital assets 417 1,248

Deposit receivables 70,297 78,209

11,001,245 10,158,806

ANNUAL REPORT 2003


128


VII. Explanatory notes to items in the income statement

Accounted premiums in property and casualty insurance break down as follows in 2003:


Direct business

Fire and fire consequential loss insurance 220,488 194,367

Householders’ insurance 116,675 110,989

Other property insurance policies 266,564 248,061

Motor vehicle liability insurance 511,588 431,842

Other motor vehicle insurance policies 295,430 268,514

Personal accident insurance 177,734 147,406

Liability insurance 142,194 123,954

Legal expenses insurance 38,075 37,414

Marine, aviation and transit insurance 36,678 42,444

Credit and surety insurance 538 3,286

Other insurance policies 72,863 59,146

1,878,827 1,667,423

Indirect business

Marine, aviation and transit insurance 829 716

Other insurance policies 21,192 25,980

22,021 26,696

Direct and indirect business overall 1,900,848 1,694,119

Accounted premiums of direct business are made up as follows:

The accounted premiums for health insurance policies break down as follows in 2003:


Direct business



271,944 263,503

Indirect business

Group insurance policies 721 448

272,665 263,951

Amounts in EUR ’000 Property/Casualty Health Life Total

Domestic market 1,105,648 271,196 1,082,505 2,459,349

Member states of the European Economic Area 80,613 0 116,555 197,168

Other foreign countries 692,566 748 223,883 917,197

1,878,827 271,944 1,422,943 3,573,714



Investment in unit-linked life insurance is effected inthe following funds: Activest Lux Tele Global, ADIGFONDIS, Ariconsult Ausgewogen, Ariconsult Global, Ari-consult Trend, Ariconsult Wachstum, BAWAG PSK Glob-al Bond, BFC Masterportfolio Ertrag, BFC Masterportfo-lio Wachstum, BFC Protected Performance, BLKingfisher Fund of Funds “Orange”, BL Kingfisher Fundof Funds “Red”, BL Kingfisher Fund of Funds “Yellow”,CI America Stock (A), CI America Stock (T), CI AssetAllocation Mix, CI Austria Med, CI Austria Stock, CIBasket I Fonds, CI Basket II Fonds, CI Basket III Fonds,CI Basket IV Fonds, CI BetriebsService Mix, CI BiotechStock, CI Corporate Bond, CI Dollar Bond (T), CI DollarCash, CI Dynamic Europe Stock, CI Eastern EuropeStock, CI Energy Stock, CI Euro Bond, CI Euro Cash (T),CI Euro Corporate Bond (T), CI Euro Government Bond,CI Europe Stock (T), CI Global Bond, CI Global HighYield Bond, CI Global Stock CI Pharma Stock, CI Inter-net Stock, CI Latin America Stock, CI Master Fonds“Dynamisches Portfolio”, CI Master Fonds “Konserva-tives Portfolio”, CI Master Fonds “Traditionelles Portfo-lio”, CI Master Fonds Innovativ, CI Mündel Bond Fonds,CI Pensions Invest dynamisch, CI Pensions Invest klas-sisch, CI Pensions Invest traditionell, CI PI.Free

dynamisch, CI PI.Free klassisch, CI PI.Free progressiv,CI PI.Free traditionell, CI Select Europe Stock, CI SwissStock, CI Teleworld Stock, CI Tiger Stock, CI TrendBond, Constantia Austrian Equity (T), Crystal RoofRubin (T), Crystal Roof Safir (T), Crystal Roof Smaragd(T), CS Bond Fund (Lux) Euro (T), CS Bond Fund (Lux)USD (T), CS EF (Lux) – Small Cap USA (T), CS IM (Lux)on S&P 500, CS Money Market (Lux) CHF (T), DekaRent International, DJE Golden Wave Fonds, DONAUStar-Fonds, DWS Vermögensbildungsfonds I, EcofinIndex Aktien Fonds, ESPA Bond International(Intertrend), ESPA Cash Euro-Plus (T), ESPA PortfolioBond, ESPA Select Stock (T), ESPA Stock Europe,ESPA Stock Vienna, EuroBasket I, Euro- Basket II,EuroBasket III, EuroBasket IV, EuroBasket V, EuroBas-ket VI, EuroBasket VII, EuroBasket IX, EuroBasket XI,EuroStock Fonds, Evolution 1 Fonds, Fair Invest Bal-anced (T), Fidelity Euro Bond Fund, Fidelity EuropeanGrowth Fund, Fidelity International Fund, Fidelity JapanFund, Fidelity Japan Smaller Companies Fund, FidelityPortfolio Selector Global Growth Fund, Fidelity PortfolioSelector Growth Fund, Fidelity Portfolio Selector Mod-erate Growth Fund, Fidelity South East Asia, Finanz-marktfond, Fondis, FondsBasket I Ausgeglichen, Fonds-

The accounted premiums for life insurance policies break down as follows in 2003:

Premiums in direct business for life insurance are made up as follows:

Amounts in ’000 2003 2002

Direct business 1,422,943 1,152,917

Indirect business 11,701 13,034

1,434,644 1,165,951


Individual insurance policies 1,374,891 1,106,907


1,422,943 1,152,917

Policies with a single premium 519,674 378,790

Policies with renewable premiums 903,269 774,127

1,422,943 1,152,917

Policies with profit participation 1,056,491 926,463

Policies without profit participation 78,752 49,566

Unit-linked life insurance policies 244,615 152,663

Index-linked life insurance policies 43,085 24,225

1,422,943 1,152,917

ANNUAL REPORT 2003


130


Basket II Dynamisch, FondsBasket III Progressiv,FondsBasket IV Rasant, GAM Star Tokyo Fund, GamaxFunds FCP-Top 100, Gamax Funds Top 100, Global &Stabil-World Megastock (T), Global Garant I, GlobalGarant II, Global Garant III, Global Garant V, GlobalGarant VII, Global Garant IX, Global Garant X, GlobalGarant XI, Global Garant XII, Global Garant XIII, GlobalGarant XV, Global Garant XVII, Global Garant XVIII,Global Garant XIX, Global Max (T), Golden RoofBranchen (T), Golden Roof Welt (T), GT Bond Fund, GTInvesco GF Balanced Fonds, GT Invesco GF BasicFonds, GT Invesco GF Top Fonds, GT Investment FundA-shares, Invesco Global Corporate Bond, Invesco GTBond Fund, INVESCO GT Emerging Markets Bond,INVESCO GT Japan, INVESCO GT Japan Enterprise,INVESCO GT Pan European (T), INVESCO GT Pan Euro-pean Enterprise (T), IP 80 Anteile, JPMF SICAV-PacificEQ Fund, JPMF America Equity Fund, JPMF AmericaSmall Cap Fund, JPMF Emerging Markets Debt Fund,JPMF Europe Small Cap Fund, JPMF Pacific Equity,Julius Baer Swiss Stock Fund, Kapital & Wert PremiumDynamisch (T), Korunovy dlhopisovy fond, Leonardo“Jogging” (T), Leonardo “Sprinting” (T), Leonardo“Walking” (T), Market Timing Portfolio Fonds, Master SBest-Invest C, MBI Dynamischer Fond, MBI Konserva-tiver Fond, MBI Progressiver Fond, MBI Success, Mer-cury Europäischer Anleihenfonds (T), MLIIF EmergingMarkets Fund (T), MLIIF European Bond (T), MLIIFEuropean Opportunities (T), MLIIF Japan Opportunities(T), MLIIF US Equity (T), MLIIF World Financial Fund,MLIIF World Gold Fund, Morgan Stanley Emerging Mar-

kets Debt Fund (T), Morgan Stanley Emerging MarketsEquity Fund (T), Morgan Stanley Global Equity, MorganStanley Japanese Value Equity Fund (T), Morgan Stan-ley US Small Cap Equity (T), Obligationsfond, Pension-sinvest Basket-Garant, Pictet Biotech, Pictet FundsFCP-Biotech Anteile, Portfolio 20, Portfolio 40, Portfo-lio 60, Portfolio 80, Progresívny zmiesany fond, RT-Blue Chips Dachfonds (T), RTPIF dynamisch (T), RT-PIFtraditionell (T), Schoellerbank Aktienfonds (T),Schoellerbank Anleihefonds (T), Schoellerbank EuroAlternativ (T), Schoellerbank Kurzinvest (T), Schoeller-bank Realzins Plus (T), Select International, Spaengler-Spar-Trust Corporate (T), Success Absolute (T), SuccessRelative (T), System Select A, Templeton EmergingMarkets Fund, Templeton Growth Fund, TradecomFondstrader, UBS Lux Bond Fund US (T), UngarischerAktienfond, VIF Versicherung International Fonds, VJVSecurity Fonds, VL MP Absolute Life, VL MP Life Plan,VL MP Wachstum EUR, Vontobel Emerging MarketsEquity (T), Vontobel USD Bond (T), Vorsorge Max (T),Vorsorge Rentenfonds, Vorsorge Rentenfonds (T), WSTVESPA Dynamisch, WSTV ESPA Progressiv, WSTV ESPATraditionell und Zukunftsvorsorge Aktienfonds (T).

The total income from capital investment in life insur-ance and in health insurance was transferred into thetechnical account, as the investment income in thesetwo sectors constitute a component of the technicalcalculations. In property and casualty insurance, onlythe interest income from deposits for indirect businesswas transferred into the technical account.



In the direct insurance business, commissions amount-ing to TEUR 413,872 (TEUR 323,242) accrued in thefinancial year 2003.

Losses from the disposal of capital assets amountedto TEUR 17,583 (TEUR 45,710) in the financialyear 2003.


Salaries and wages 237,807 226,218

Expenditure for severance payments 10,366 11,521

Expenditure for retirement provision 30,715 37,721

Expenditure for statutory social security contributions andwage-related levies and compulsory contributions 77,304 73,419

Other social expenditure 3,767 3,672


to land and buildings 136,618 23,205 6,474 153,349

to shares in affiliated companies 8,232 0 0 8,232

to participations 3,627 1 0 3,628

to bonds and other fixed-interest securities 805 7 805 7

to shares and other non-fixed-interest securities 26,123 0 0 26,123

to tangible assets 127 0 37 90

to intangible assets 0 5,481 176 5,305


Investment allowances as per Section 10 of the Austrian Income Tax Act 15,341 2,975 1) 3,416 14,900

Transfer reserves as per Section 12 of the Austrian Income Tax Act 43,711 4,667 43,711 4,6671) therefrom TEUR 2,829 due to the merger of REAL-TECH Immobilienverwaltung GmbH, Vienna with DONAU Allgemeine Versicherungs-Aktiengesellschaft, Vienna as an absorbing company

Investment allowances as per Section 10 Amounts in EUR ’000 of the Austrian Income Tax Act

from 1995 114,089.30

from 1996 102,915.92

from 1997 647,132.47

from 1998 2,190,325.84

from 1999 3,638,449.92

from 2000 8,207,580.30

The items expenses for insurance claims, operating expenses, other underwriting expenses, investment expensesand other non-underwriting expenditure include the following:

The valuation reserve reported in the balance sheet as of 31st December 2003 and the transfers and releases in thefinancial year break down as follows (by fixed asset item):

The other untaxed reserves reported in the balance sheet as of 31st December 2003 and the transfers and releasesof these reserves in the financial year break down as follows:

The reserve reported in the balance sheet as of 31st December 2003 as per Section 10 of the AustrianIncome Tax Act breaks down as follows (by year):

ANNUAL REPORT 2003


132


VIII. Other informationThe composition of the Managing Board and of theSupervisory Board in the financial year may be found onpages 8 and 9 of this annual report.

The average number of employees (including cleaningstaff) at the fully consolidated companies amounted to11,577 (11,091). Of this figure, 5,326 (5,035) wereemployed in business production with personnel costs ofTEUR 145,522 (TEUR 137,557) and 6,251 (6,056)were administrative staff with personnel costs of TEUR211,925 (TEUR 211,252).

The average number of employees (including cleaningstaff) at the proportionally consolidated companiesamounted to 122 (175). Of this figure, 21 (42) wereemployed in business production with personnel costs ofTEUR 815 (TEUR 1,856) and 101 (133) were adminis-trative staff with personnel costs of TEUR 4,768 (TEUR 7,580).

No loans are outstanding with Members of the ManagingBoard on 31st December 2003.

Members of the Supervisory Board did not receive anyloans in 2003.

There were no liabilities for Members of the Managing Boardand of the Supervisory Board on 31st December 2003.

From the expenditure for severance payments and pen-sions amounting to TEUR 41,081 (TEUR 49,242) intotal, TEUR 8,524 (TEUR 8,167) is apportionable in2003 to severance payments and pensions expenditurefor Members of the Managing Board and senior execu-tives in accordance with Section 80 Para. 1 of the Aus-trian Stock Company Act.

Emoluments amounting to TEUR 2,634 (TEUR 2,425)accrued to Members of the Managing Board for their workin 2003. The remuneration package of former Membersof the Managing Board (excluding the surviving depen-dents) amounted to TEUR 1,373 (TEUR 1,164) in 2003.

The emoluments of the members of the SupervisoryBoard for their work for the company amounted toTEUR 88 (TEUR 85) in 2003.


Kurt Ebner

Dkfm. Karl Fink



The Managing Board:

Vienna, 22nd April 2004

Dr. Rudolf Ertl

ANNUAL REPORT 2003

PARTICIPATIONS.

133


Share in the capital Equity capital Net income/ Last annual Consoli-Overview of the participations TEUR loss in financial dation

Total Direct TEUR statement

1. Direct participations in affiliated companies

“Schillerpark Linz” Holding GmbH, Vienna 100.00% 100.00% A1

“Wiener Städtische osiguranje”akcionarsko drustvo, Belgrade 100.00% 100.00% 507 –1,420 2003 VK

ARITHMETICA Versicherungs- und FinanzmathematischeBeratungs-Gesellschaft m.b.H., Vienna 100.00% 75.00% 356 14 2003 VK

Bank Austria Creditanstalt Versicherung AG, Vienna 90.00% 90.00% 24,104 4,219 2003 VK

Bulgarski Imoti Life AG Insurance Company, Sofia 70.30% 70.30% 2,647 2 2003 VK

Bulgarski Imoti Non-Life AG Insurance Company, Sofia 70.30% 70.30% 2,133 10 2003 VK

CAPITOL Spolka z.o.o., Warsaw 96.34% 95.24% 1 –9 2002 A1

Celetná 25, s.r.o., Prague 100.00% 93.72% 7,071 94 2003 VK

CENTER Hotelbetriebs GmbH, Vienna 82.66% 55.00% 45 21 2003 VK

DBR Friedrichscarrée GmbH & Co KG, Stuttgart 100.00% 100.00% 27,532 –3,928 2003 VK

DBR FriedrichscarréeLiegenschaften-Verwaltungs-GmbH, Stuttgart 100.00% 100.00% 25 0 2003 VK

DBR-Liegenschaften GmbH & Co KG, Stuttgart 100.00% 100.00% 15,739 339 2003 VK

DBR-Liegenschaften Verwaltungs-GmbH, Stuttgart 100.00% 100.00% 24 0 2003 VK

DIRECT-LINE Direktvertriebs-GmbH, Vienna 100.00% 100.00% 95 39 2003 A1

DONAU Allgemeine Versicherungs-Aktiengesellschaft, Vienna 89.47% 89.47% 103,054 9,538 2003 VK

HORIZONT Personal-, Team- und Organisationsentwicklung GmbH, Vienna 100.00% 76.00% 172 21 2003 A1

HUMANOCARE gemeinnützige Betriebsgesellschaft für Betreuungseinrichtungen GmbH, Vienna 100.00% 100.00% 552 549 2002 A1

HUMANOCARE Management-Consult GmbH, Vienna 75.00% 75.00% 148 27 2002 A1

InterRisk Versicherungs-Aktiengesellschaft, Wiesbaden 100.00% 100.00% 96,208 –16,847 2003 VK

KÁLVIN TOWER Immobilienentwicklungs-und Investitionsgesellschaft m.b.H., Budapest 100.00% 100.00% 1.151 –309 2003 VK

KONTINUITA – Slovenská zivotnápoist’ovna, a.s., Pressburg 80.00% 80.00% 6,550 –544 2003 VK

KOOPERATIVA poist’ovna, a.s., Pressburg 100.00% 91.36% 39,858 10,014 2003 VK

Kooperativa pojistovna, a.s., Prague 95.48% 89.28% 70,414 12,492 2003 VK

Kvarner Wiener Städtische osiguranje d.d., Rijeka 91.69% 91.69% 5,614 109 2003 VK

LVP Holding GmbH, Vienna 100.00% 100.00% 99,986 –1,622 2003 VK

Metropolitan Datenservicegesellschaft m.b.H., Vienna 100.00% 100.00% 4,733 1.592 2003 VK

PFG Parkflächenbewirtschaftungs GesmbH, Salzburg 89.50% 60.00% 5,224 –1,005 2003 VK

Projektbau GesmbH, Vienna 89.50% 60.00% 260 242 2003 VK

Realitätenverwaltungs- und Restaurantbetriebs- Gesellschaft m.b.H., Vienna 100.00% 98.00% 430 24 2003 A1

Ringturm Kapitalanlagegesellschaft m.b.H., Vienna 91.00% 91.00% 1,250 171 2003 A1

SECURIA majetkovosprávna a podielová s.r.o., Pressburg 100.00% 100.00% 3,103 42 2003 VK

Senioren Residenz Veldidenapark Errichtungs- und Verwaltungs GmbH, Innsbruck 66.70% 66.70% 11,886 53 2003 VK

Union Biztosító Rt., Budapest 100.00% 100.00% 19,128 –4,084 2003 VK

UNITA S.A., Timisoara 100.00% 100.00% 8,556 –475 2003 VK

Use was made of the provisions as per Section 241 Para. 2 and Section 265 Para. 3 of the Austrian Commercial Code.

On 31st December 2003, there were participations in the following companies:



PARTICIPATIONS.Share in the capital Equity capital Net income/ Last annual Consoli-

Overview of the participations TEUR loss in financial dationTotal Direct TEUR statement

Vienna-Life LebensversicherungAktiengesellschaft, Schaan 100.00% 100.00% 4,466 –585 2003 VK

VLTAVA majetkovosprávní a podílová spol.s.r.o., Prague 100.00% 100.00% 2,388 –2 2003 VK

WIENER STÄDTISCHE Beteiligungs GmbH, Vienna 100.00% 100.00% 167,273 –16,749 2003 VK

WIENER STÄDTISCHEFinanzierungsdienstleistungs GmbH, Vienna 100.00% 100.00% 31,357 –3,008 2003 VK

Wiener Verein Bestattungs- und Versicherungs-service Gesellschaft m.b.H., Vienna 100.00% 100.00% 1,202 224 2003 VK

2. Other direct participations of more than 20%

EXPERTA Schadenregulierungs-Gesellschaft m.b.H., Vienna 100.00% 25.00% 579 242 2003 A1

HUK-COBURG Auslandsbeteiligungs-GmbH, Coburg 50.00% 50.00% 55,388 –17,771 2001 A2

Humanomed Krankenhaus Management Gesellschaft m.b.H., Vienna 25.00% 25.00% 552 233 2002 A2

IMPERIAL-Székesfehérvar Ingatlankezelési Kft., Budapest 25.00% 25.00% 9,300 920 2002 EK

Joint Belarus-Austrian Insurance Company Kupala, Minsk 33.20% 33.10% 596 333 2002 EK

Kapital & Wert Immobilienbesitz AG, Vienna 44.65% 41.85% 13,662 220 2003 A2

ÖBV-DIREKT Versicherungsservice GmbH, Vienna 33.33% 33.33% 368 313 2002 A2

PKB Privatkliniken Beteiligungs-GmbH, Vienna(consolidated financial statements) 25.00% 25.00% 26,443 –458 2002 EK

Privatklinik Villach Gesellschaft m.b.H. & Co. KG, Klagenfurt 23.29% 23.29% 1,005 –325 2002 A2

RISK CONSULT Sicherheits- undRisiko-Managementberatung Gesellschaft m.b.H., Vienna 51.00% 41.00% 216 78 2003 A1

Ruster Hotel Bau- und Betriebs-gesellschaft m.b.H. & Co KG, Vienna 47.86% 47.86% –4,722 186 2002 A2

service & more Versicherungsagenturbetreuung GmbH, Vienna 100.00% 26.00% 31 –223 2003 A1

Towarzystwo Ubezpieczeniowe “Compensa” Spolka Akcyjna, Warsaw 49.90% 23.04% 17,532 –8,702 2003 EK

Towarzystwo Ubezpieczen Na Zycie “Compensa”Spolka Akcyjna, Warsaw 62.07% 41.38% 14,468 –5,690 2003 EK

Union Versicherungs-Aktiengesellschaft, Vienna 45.00% 45.00% 58,895 10,356 2003 QK

Wiener Porzellanmanufaktur Augarten-Beteiligungs-verwaltungsgesellschaft m.b.H., Vienna 50.00% 50.00% –985 –2 2003 A2

Wüstenrot Versicherungs-Aktiengesellschaft, Salzburg 31.60% 31.60% 129,933 –450 2003 EK

3. Other direct participations below 20% in insurance companies and financial institutions

Bausparkasse Wüstenrot Aktiengesellschaft, Salzburg 3.13% 3.13%

Kapital-Beteiligungs Aktiengesellschaft, Vienna 10.00% 10.00%

Vereinigte Pensionskasse Aktiengesellschaft, Vienna 15.11% 15.11%

Wüstenrot Wohnungswirtschaft registrierteGenossenschaft mit beschränkter Haftung, Salzburg 0.46% 0.46%




Share in the capital Equity capital Net income/ Last annual Consoli-Overview of the participations TEUR loss in financial dation

Total Direct TEUR statement

4. Other direct participations below 20% in other companies

“TBG” Thermenzentrum GeinbergBetriebsgesellschaft m.b.H., Linz 9.52% 9.52%

“THG” Thermenzentrum Geinberg Errichtungs-GmbH, Linz 9.52% 9.52%

Allgemeine Baugesellschaft – A. Porr Aktiengesellschaft, Vienna 15.33% 15.33%

ARWAG Holding-Aktiengesellschaft, Vienna 4.30% 4.30%

Hausgarage Brigittenauerlände Betriebsgesellschaft m.b.H., Vienna 10.00% 10.00%

Hausgarage Wohnen am Donaupark Betriebsgesellschaft m.b.H., Vienna 10.00% 10.00%

New Europe Insurance Ventures, Edinburgh 2.94% 2.94%

Österreichisches Verkehrsbüro Aktiengesellschaft, Vienna 21.25% 5.09%

Privatklinik Villach Gesellschaft m.b.H., Klagenfurt 13.00% 13.00%

Semperit Aktiengesellschaft Holding, Vienna 23.76% 5.59%

UBF Mittelstandsfinanzierungs AG, Vienna 19.90% 19.90%

VV Immobilien GmbH & CO GB II KG, Munich 9.09% 9.09%

WED Holding Gesellschaft m.b.H., Vienna 5.77% 5.77%

Wiener Börse AG, Vienna 0.29% 0.29%

5. Participations in affiliated companies solely held indirectly

“Grüner Baum” Errichtungs- und Verwaltungsges.m.b.H., Innsbruck 66.60% 989 –210 2003 VK

“Neue Heimat” Gemeinnützige Wohnungs- undSiedlungsgesellschaft in Oberösterreich,Gesellschaft mit beschränkter Haftung, Linz 99.81% 58,946 2,801 2002 A3

AGRAS – Grupul Wiener Städtische S.A., Bucharest 68.74% 4,089 239 2003 VK

Alpenländische Heimstätte Gemeinnützige Wohnungsbau-und Siedlungsgesellschaft m.b.H., Innsbruck 94.00% 73,708 4,915 2002 A3

Altstadt Hotelbetriebs GmbH, Vienna 100.00% 20,870 –678 2003 VK

Brunn am Gebirge Realbesitz GmbH, Vienna 88.83% 1,921 115 2003 VK

Businesspark Brunn Entwicklungs GmbH, Vienna 100.00% 9,793 –351 2003 VK

CAPITOL a.s., Pressburg 100.00% 2,861 1,151 2003 VK

DVS Donau-Versicherung Vermittlungs- und Service-Gesellschaft m.b.H., Vienna 100.00% 4,038 457 2003 A1

Erste gemeinnützige Wohnungsgesellschaft“Heimstätte Gesellschaft m.b.H.”, Vienna 99.45% 52,188 5,545 2002 A3

Gesundheitspark Wien-Oberlaa Gesellschaft m.b.H., Vienna 100.00% 24,076 965 2003 VK

InterRisk Lebensversicherungs-Aktiengesellschaft, Wiesbaden 100.00% 11,338 1,278 2003 VK

Kapital & Wert Vermögensverwaltung Aktien- gesellschaft, Vienna (consolidated financial statements) 53.79% 22,130 1,023 2003 EK

KAPITOL pojist’ovaci a financni poradenstvi, a.s., Brno 100.00% 7,790 1,560 2003 VK

Komunálna poist’ovna, a.s., Banksá Bystrica 95,14% 8,620 1,768 2003 VK

Neue Heimat Oberösterreich Holding GmbH, Vienna 100.00% 19,834 681 2003 VK

Prago-Immobilien, a.s., Prague 100.00% 65 11 2002 A1

PROGRESS Beteiligungsges.m.b.H., Vienna 60.00% 7,169 2,012 2003 VK




PARTICIPATIONS.Share in the capital Equity capital Net income/ Last annual Consoli-

Overview of the participations TEUR loss in financial dationTotal Direct TEUR statement

Renaissance Hotel Realbesitz GmbH, Vienna 67.00% 6,915 –650 2003 A1

Senioren Residenz Fultererpark Errichtungs- und Verwaltungs GmbH, Innsbruck 100.00% –3,466 –287 2003 VK

St. Magdalen Projektentwicklungs- und Verwertungsgesellschaft m.b.H., Vienna 89.00% 5,717 –220 2003 VK

TECH GATE VIENNA Wissenschafts- undTechnologiepark GmbH, Vienna 60.00% 39,029 162 2003 EK

6. Other participations in other companies of more than 25% solely held indirectly

CROWN-WSF spol. s.r.o., Prague 30.00% EK

Gemeinnützige Industrie-Wohnungsaktiengesellschaft, Linz 40.00%

Gewista-Werbegesellschaft m.b.H., Vienna 33.00% EK

KDAG Data GmbH, Vienna 39.52%

Medial Beteiligungs-Gesellschaft m.b.H., Vienna 29.63% EK

mm Liegenschaftsbesitz GmbH, Vienna 26.67%

Privatklinik Graz Ragnitz GmbH, Vienna 25.00%

Privatklinik Josefstadt GmbH, Vienna 25.00%

Privatklinik Maria Hilf GmbH, Klagenfurt 25.00%

Privatklinik Wehrle Gesellschaft m.b.H., Salzburg 25.00%

Wagramer Straße Hotel-Betriebs-GmbH, Vienna 50.00%


The abbreviations in the column “Consolidation” mean:

VK Fully consolidated company A1 Non-consolidated company as per Section 249 Para. 2 of the Austrian Commercial CodeQK Proportionally consolidated company A2 Non-consolidated company as per Section 263 Para. 2 of the Austrian Commercial CodeEK Equity consolidated company A3 Non-consolidated company as per Section 248 of the Austrian Commercial Code

A4 Non-consolidated company as per Section 249 Para.1 Section 2 of the Austrian Commercial Code



AUDITOR’S REPORT.Auditor’s certificate.

We have audited the consolidated financial statements of

WIENER STÄDTISCHE Allgemeine VersicherungAktiengesellschaft, Vienna,

as of 31st December 2003 including the accounting,which were produced in accordance with the provisionsapplying in Austria under commercial law. The prepara-tion and content of these consolidated financial state-ments are the responsibility of the legal representativesof the company. Our responsibility lies in the submissionof an audit opinion on these consolidated financial state-ments on the basis of our inspection.

We have carried out our audit in compliance with thelegal provisions applicable in Austria and the customaryprinciples in our profession. These principles requirethat the audit is planned and executed in such a waythat a sufficiently reliable judgement may be submittedregarding whether the consolidated financial statements

are free from significant inaccurate statements. Theaudit includes an inspection of the proof for amountsand other information in the consolidated financial state-ments, based on random sampling. It also includes theassessment of the accounting principles applied by thelegal representatives and the significant estimatesundertaken as well as an appraisal of the overall mes-sage of the consolidated financial statements. We are ofthe opinion that our audit provides a sufficiently reliablebasis for our audit opinion. On the basis of the findingsof the audit conducted by us, we provide the followingunqualified audit certificate in accordance with Section274 Para. 1 of the Austrian Commercial Code:

“The consolidated financial statements comply with thestatutory provisions according to our audit carried out inaccordance with our duty. The consolidated financialstatements convey an as accurate as possible picture ofthe net worth, financial position and earnings of thegroup in compliance with the proper accounting princi-ples. The management report for the group is consistentwith the consolidated financial statements.”


KPMG Alpen-Treuhand GmbHWirtschaftsprüfungs- und Steuerberatungsgesellschaft

Dr. Walter Knirsch Mag. Liane KarnerAuditor and tax advisor Tax advisor

Advisory councilsThe following people belong to the advisory councils inthe individual federal provinces designated in the Arti-cles of Association for advising the Managing Board(Position at May 2004):

Provincial advisory council for ViennaManfred AnderleDr. Peter BosekDr. Ilse Brandner-RadingerLiane GarnhaftMajor Michael HafnerKomm.-Rat Mag. Dr. Erich HaiderMag. Franz HauberlKomm.-Rat Franz HäusslerKomm.-Rat Heinz Leo HavelkaKomm.-Rat Dkfm. Volkmar HutschinskiKomm.-Rat Willibald KeuschMag. Josef LeopoldDr. Michael LudwigDr. Ernst NonhoffMag. Friedrich PrimetzhoferKomm.-Rat Dkfm. Dr. Carl Ludwig RichardDr. Gerhard SchusterGünter WandlIng. Wilhelm Wohatschek

Provincial advisory council for Lower AustriaConsistorial Counsellor Dr. Burkhard EllegastConsistorial Counsellor Prelate Berthold HeiglMag. Gertrude BaumgartnerKomm.-Rat Dr. Wolfgang FrankRudolf GabmannWilhelm GelbMag.Helmut GuthIng. Josef HimmelMag. Dr. Herwig HofstätterMag. Herbert KaufmannHans KnollHans KocevarOtto KortenWerner MagyerDipl.-Ing. Rudolf SchramlDr. Dietmar Steinbrenner

Provincial advisory council for Upper AustriaDr. Othmar BruckmüllerDr. Erich DipplingerDr. Franz Dobusch

Walter ErnhardIng. David ForstenlechnerMag. Othmar FriedlMag. Alois FroschauerIng. Mag. Peter HalatschekHeinz HillingerDr. Hermann KepplingerKomm.-Rat Dr. Richard KirchwegerDr. Peter KoitsHelmut OberchristlDr. Josef PeischerKomm.-Rat Dr. Ludwig ScharingerMag. Wolfgang SchneckenreitherRoland StieblerDkfm. Max StockingerReinhard Winterauer

Provincial advisory council for StyriaHerbert GritznerDr. Josef GroßDipl.-Ing. Manfred HeinrichMag. Werner HeinzlKarl HofmeisterDr. Josef LacknerKurt LeitnerMag. Dr. Karl-Franz MaierErnst MeixnerMag. Dr. Arno PichlerRudolf PirkerHeinz RobinsonPeter Schlacher, senior civil servantCouncillor Dr. Franz Stingl

Provincial advisory council for Carinthia and Eastern TyrolKurt AuerFranz Christian BergerDkfm. Helmut EderHelmut FanzottDr. Horst FelsnerDipl.-Ing. Johann GlantschnigMag. Rüdiger GrießerKomm.-Rat Rudolf KandussiMag. Monika Kircher-KohlHofrat Dr. Helmut KrainerIng. Franz LiposchekHelmut ManzenreiterIng. Josef PodesserDr. Herwig Rettenbacher

ANNUAL REPORT 2003

ADVISORY COUNCILS.

138

ADVISORY COUNCILS


ADVISORY COUNCILS

Mag. Siegfried TrostMag. Alfred Wurzer

Provincial advisory council for SalzburgIngeborg AltmannDipl.-Ing. Günther AuerWolfgang BellFranz BlumDr. Reiner BrettenthalerDipl.-Ing. Günter FleischmannFranz KühbergerMag. Johannes LassacherEvelyn Ludwig-MeingastIng. Johann MyslikRudolf QuehenbergerFerdinand SallerGünter SchiedDr. Harald SeissHermann SteinlechnerDr. Christian StöcklCouncillor Prof. Mag. Walter Thaler

Provincial advisory council for TyrolPrelate Prof. Mag. Raimund SchreierDipl.-Ing. Martin BaltesKomm.-Rat Sieghard BiemannUniv.-Prof. Dr. Manfried GantnerHannes GschwendtnerKomm.-Rat Dipl.-Vw. Helmut HolzmannKomm.-Rat Rosa KirchlerSieglinde KoblerDipl.-Vw. Hansjörg MölkMag. Tobias MorettiMag. Jakob RinglerKomm.-Rat Siegfried RücklGerhard SchneiderKomm.-Rat Karl SchranzSiegmar StrohscheinDr. Berndt WagnerKonsul Dr. Ernst WunderbaldingerFranz Wurnig

Provincial advisory council for VorarlbergMag. Alois AichbauerMag. Wilfried BerchtoldWalter DurigRichard EcksteinRudolf GrabherDipl.-Ing. Guntram Jäger

Ing. Wilhelm MuzyczynDipl.-Ing. Peter OksakowskiKomm.-Rat Kuno RiedmannDkfm. Franz SalzmannReinhold Winkler

Provincial advisory council for BurgenlandActing Consistorial Counsellor Matthias ReinerMag. Mario De Martin De GobboKomm.-Rat Erich HorvathKomm.-Rat Michael KochMag. Hans LukitsHans NiesslMag. Dr. Günther OfnerIng. Josef OrovitsIng. Frank PfnierErnst SchmidKomm.-Rat Erwin SchneebergerMag. Rudolf SimandlGertrude SpiessMag. Gerold StaglGerhard SteierGeorg StiegelmarDr. Csaba SzekelyDr. Robert TauberJosef Wein

Advisory council for funeral insuranceThe following people belong to the advisory councildesignated in the Articles of Association and estab-lished for advising the Managing Board on funeralmatters and funeral insurance (Position at May 2004):

Monsignore Mag. Karl WagnerJohannes BammerOtto BinderKomm.-Rat Wilhelm FuchsWalter HämmerleErich HohenbergerHarald HudalJosef KlacklManfred KlinglerProf. Dkfm. Franz KnispelMag. Arno MolinariEduard SchreinerIng. Wilhelm SereiniggMicaela Strack-DewangerEduard Wimmer

ANNUAL REPORT 2003

General secretariat

Mag. Sascha Bock,Authorised agent

Property insurance

Motor vehicle insuranceDipl.-Ing. Mathias Frisch,Senior Management Secretary

Third-party liability and legal expenses insurance(underwriting department)Dr. Alfred Biegl,Assistant Manager

Legal expenses protection claims departmentDr. Günther Bauer,Authorised agent

Homeowners’, residential, company premises,householders’ and burglary/theft insuranceHeinrich Herbst,Senior Manager

Property and motor insurance(claims department)Dr. Wolfgang Reisinger,Senior Manager

Industrial and commercial business, generalKurt Möller,Assistant Manager

Industrial and commercial businessthird-party liability/marine/aviationDr. René Kempf,Assistant Manager

Personal insurance

Life, health, personal accident insuranceDr. Walter Leonhartsberger,Director

Funeral insurance

Peter Skyba,Director

Reinsurance

Dr. Peter Hagen,Director

Sales

Central sales managementFranz Meingast,Sales Director

Alternative marketing departmentGerhard Heine,Administrative Director

Asset management

Co-ordination of the investment divisions,participation management, loans,securities and fundsDr. Martin Simhandl,Director

Properties and real estate-relatedparticipationsMag. Anton Werner,Senior Manager

PEOPLE TO CONTACT.

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PEOPLE TO CNTACT

General company functions

Finance and accountingMag. Hans Meixner,Director

Legal matters, associations and chambers of commerceMag. Helene Kanta,Assistant Manager

Internal auditingMag. Dr. Herbert Allram,Senior Management Secretary

SponsorshipBrigitta Fischer,Senior Management Secretary

Press, internal communication, investor relationsMag. Barbara Hagen-Grötschnig

Personnel managementRobert Bilek,Director

Operational structure/ITMag. Robert Haider,Director

Senior consultant, personal insuranceand outpatient departmentDr. Alfred Heiter

Responsible actuary

Kurt Ebner,Director on the Managing Board,Life and health insurance


PEOPLE TO CONTACT

ANNUAL REPORT 2003

Provincial head office for Vienna1020 Vienna, Obere Donaustraße 53Phone: (01) 211 29-0, Fax: (01) 211 29-3154E-Mail: [email protected] Windhager, Provincial director

Provincial head office for Lower Austria3100 St. Pölten, Europaplatz 2Phone: (02742) 83 18-0, Fax: (02742) 83 18-1080E-Mail: [email protected] Maurer, Provincial director

Provincial head office for Upper Austria4020 Linz, Untere Donaulände 40Phone: (0732) 76 31-0, Fax: (0732) 76 31-292E-Mail: [email protected]. Günther Erhartmaier, Provincial director

Provincial head office for Styria8020 Graz, Gürtelturmplatz 1Phone: (0316) 789-0, Fax: (0316) 789-210E-Mail: [email protected] Gall, Provincial director

Provincial head office for Carinthia and Eastern Tyrol9010 Klagenfurt, St. Veiter Ring 13Phone: (0463) 58 52-0, Fax: (0463) 58 52-350E-Mail: [email protected] Obertautsch, Provincial director

Provincial head office for Salzburg5020 Salzburg, Max-Ott-Platz 3Phone: (0662) 889 66-0, Fax: (0662) 889 66-260E-Mail: [email protected]. Hans Vierziger, Provincial director

Provincial head office for Tyrol6020 Innsbruck, Südtiroler Platz 4Phone: (0512) 595 69-0, Fax: (0512) 56 21 45E-Mail: [email protected] Wander, Provincial director

Provincial head office for Vorarlberg6800 Feldkirch, Reichsstraße 173Phone: (05522) 34 84-0, Fax: (05522) 34 84-32E-Mail: [email protected] Kopf, Provincial director

Provincial head office for Burgenland7000 Eisenstadt, Kalvarienbergplatz 7Phone: (02682) 604-0, Fax: (02682) 641 13E-Mail: [email protected] Habeler, Provincial director

PROVINCIAL HEAD OFFICES.

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PROVINCIAL HEAD OFFICES

Accounted premiumsPremiums imposed on the policyholders without ele-ments of taxes, levies and fees.

Actuarial reserveProvision for future insurance payments in life andhealth insurance, calculated in accordance with math-ematical principles. This is also described in healthinsurance as an ageing provision.

Affiliated companiesAffiliated companies are deemed to be the parent com-pany and its subsidiaries, in so far as the parent com-pany can exert a controlling influence over the busi-ness policy of the subsidiary. This is the case even if,inter alia, the parent company directly or indirectly hasmore than half of all the voting rights, if there are con-tractual controlling rights or the possibility exists toappoint the majority of the Members of the ManagingBoard or other managing bodies of the subsidiary (Sec-tion 244 of the Austrian Commercial Code).

Austrian Commercial CodeHGB (Handelsgesetzbuch)

Austrian Insurance Policy ActThe Austrian Insurance Policy Act (Versicherungsver-tragsgesetz, VersVG) governs the general law relating toinsurance policies.

Austrian Insurance Supervision ActAustrian Insurance Supervision Act (Versicherungsauf-sichtsgesetz, VAG), which governs the law concerningorganisations and the supervisory law for insurancecompanies.

Capital assetsAssets such as securities, loans, real estate and com-pany participations, which basically serve as cover forthe liabilities from the insurance business.

Ceded reinsurance premiumsShare of the premiums, which are due to the reinsurerbecause he assumes reinsurance cover for certain risks.

Combined ratio (CR)Ratios for the evaluation of the development of thebusiness in property and casualty insurance: operatingexpenses plus expenses for insurance claims, divided

by the earned premiums (= sum of the expense ratioand loss ratio).

ConsolidationDuring the preparation of the consolidated financialstatements by the parent company, the annual finan-cial statements of the parent company and the annualfinancial statements of the subsidiaries are combined.In the process, intra-group capital linkages, interimresults, receivables and liabilities as well as incomeand expenses are offset.

Consolidated financial statementsAnnual financial statements prepared by the parentcompany of a Group, in which the net worth, financialposition and earnings of the Group are presented. Inthe process, the net income of the parent company ispresented consolidated with the net incomes of thesubsidiaries.

Consolidation scopeConsists of the parent company and all subsidiariesincluded in the consolidated financial statements.

Deposit receivable, deposit liabilityReceivable of the reinsurance company from the previ-ous insurer, which accrues to it by virtue of the insur-ance business assumed under reinsurance cover as acapital asset substitute. Its level is consistent with theamount of the securities placed with the previousinsurer. Deposit liability is analogous.

Direct businessBusiness produced by the company itself, increased byassumed co-insurance shares less ceded co-insuranceshares.

Earned premiumsThat part of the accounted premiums that is appor-tionable to the financial year.

Equalisation reserveOne of the underwriting provisions. This is set up inyears with a below average burden of losses and usedin years with an above average burden of losses.

Expense ratioRatio of the operating expenses over the earned pre-miums.

ANNUAL REPORT 2003

GLOSSARY.

143

GLOSSARY

ANNUAL REPORT 2003

Expenses for insurance claimsInsurance payments paid out plus the provisions foralready occurred but outstanding losses and plus thecosts for claims handling and loss prevention (e.g.experts’ fees, solicitor’s fees).

Financial resultIncome and expenditure for capital assets and interest.This includes, for example, income from securities,loans, properties and company participations or alsobank interest as well as the expenditure resulting fromthe finance division and the scheduled depreciationsfrom property ownership, non-scheduled depreciationsto the lower stock market prices in the case of securi-ties, bank charges etc.

Hidden reserveThe actual value (market value) of an asset item inthe balance sheet that is greater than the book value(arises, for example, due to the rise in price of secu-rities).

Incurred but not reported (IBNR) lossesLosses that are notified in the current financial year,but have already occurred in a previous year.

Indirect businessBusiness assumed under reinsurance cover (activereinsurance).

Insurance paymentsSee “Expenses for insurance claims”.

Insurance regulatorsThe insurance regulatory authority is the AustrianFinancial Market Authority (Finanzmarktaufsicht,FMA), which monitors the operation of all insurancecompanies, banks, employee pensions and pensionfunds in Austria as an independent authority.

Loss ratioRatio of the expenses for insurance claims over theearned premiums.

Loss reserveA reserve for outstanding insurance claims (= alreadyoccurred, but not yet or only partly settled).

Market valueValue of an asset item in the balance sheet, which isachievable on the market through its sale to third parties.

Operating expensesCommissions, personnel costs, material costs and oth-er expenditure for the marketing and the administra-tion of insurance policies.

PremiumAgreed fee for the assumption of a risk by an insurancecompany.

Premium reserveThe share of the premium income, which represents thefee for the insurance term after the balance sheet report-ing date and therefore not yet earned at the balancesheet reporting date. Unearned premiums are reported inthe balance sheet under underwriting provisions.

Profit/loss/result on ordinary activitiesProfit on ordinary activities: total of the underwritingresult, of the financial result and of the other non-tech-nical expenses and income before taking into consider-ation the tax charge.

Profit participationSee “Refund of premium (related to results)”.

Refund of premium (related to results)Profit participation for policyholders, which dependson the success of the respective insurance class(life/health/property & casualty).

Refund of premium (not related to results)Contractually granted refund of premiums to the poli-cyholders.

ReinsuranceInsurance protection for insurance companies. In theprocess, an insurance company insures a share of itsrisk with another insurance company, the reinsurer.

Reinsurance companyA company that assumes risks from a primary insureror another reinsurer (in this case one talks of retroces-sion) against an agreed premium.

GLOSSARY.

144

GLOSSARY

Revenue reservesRevenue reserves contain the profits produced by thecompany, in so far as they were not distributed as a div-idend.

Risks/riskInsured people, objects, perils or interests.

Shareholders’ equityConsists of the share capital and reserves.

Single-premium policyThis is when the policyholder fulfils the premium pay-ment obligation on commencement of the policy with asingle payment for the entire insurance period.

Underwriting provisionsThey consist of the provision for outstanding insurance

claims, the actuarial reserve, the premium reserve, theprovisions for the refund of premium related to resultsand not related to results, the equalisation reserve andthe other underwriting provisions.

Unit-linked life insuranceIn the case of this special form of life insurance, thelevel of benefit depends to a considerable extent onthe performance of the assets combined in a fund.The investment risk is borne by the policyholder, whotherefore has the opportunity to directly participatein a disproportionate appreciation in value of thefund, but must also accept the risk of value depreci-ations.

VolatilityFluctuations of security prices, exchange rates andinterest rates.


GLOSSARY

ANNUAL REPORT 2003

INVESTOR RELATIONS – HOTLINE 0800/208 800

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INVESTOR RELATIONS

Financial Calendar

13th ordinary Annual General Meeting 16th June 2004

Ex-dividend day 21st June 2004

Dividend payment 28th June 2004

Results for 1st half-year 2004 calendar week 41

Results for 1st–3rd quarter 2004 calendar week 51

Up-to-date information around the clock

Do you want additional detailed information regarding Wiener Städtische?

Would you like to receive our regular updates of information for shareholders?

Let us know!

Our investor relations team is readily at your disposal.

You can receive information from:

Wiener Städtische Allgemeine Versicherung AktiengesellschaftInvestor RelationsSchottenring 301010 Wien

Mag. Barbara Hagen-GrötschnigPhone: (0043 1) 531 39-1027Fax: (0043 1) 531 39-3134E-Mail: [email protected]

General Information:

Owner, publisher and media owner:Wiener Städtische Allgemeine Versicherung AktiengesellschaftSchottenring 301010 ViennaInternet: www.wienerstaedtische.atCompany register: 75687 fDVR number: 0016705

Additional information:Mag. Sascha BockPhone: (0043 1) 531 39-1065Fax: (0043 1) 531 39-1066E-mail: [email protected]

The annual report may be downloaded from our website as a PDF file, both in German and in English.

Project coordination: Mag. Wolfgang UngerDesign and production: Werbeagentur Demner, Merlicek & BergmannEnglish translation: Futura Fachübersetzungen, Vienna

Managing Board photograph: Peter RigaudAdditional photographs: Anzenberger, Contrast, Corbis, German Tourism Association, Getty Images,Homolka, J. Kalmar, Mauritius, P. Rigaud, Zefa.

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