AG english 1990617 II-neu

ALLGEMEINE VERSICHERUNG AKTIENGESELLSCHAFT
Annual Report 1998
Key Figures
Wiener Städtische (individual accounts)
Gross premiums earned (mio.)
1998/ATS
1997/ATS
17,709
17,430
e 1,287.0
– Property & casualty (mio.)
8,406
8,612
e 610.9
– Health (mio.)
3,201
3,178
e 232.6
– Life (mio.)
6,102
5,640
e 443.4
Combined ratio (property & casualty) (%)
Financial result (mio.)
102.9
99.5
5,051
4,594
e 367.1
Profit on ordinary activities (mio.)
784
750
e 57.0
Investments (mio.)
80,124
71,908
e 5,822.8
Underwriting provisions (mio.)
67,305
62,863
e 4,891.2
Capital resources (mio.)
10,084
9,610
e 732.8
Staff
4,096
4,085
– Office staff
2,045
2,064
– Field staff
2,051
2,021
171
170
Number of field offices
Contents
Foreword
2
Supervisory Board, Trustees and
Management Board
4
Status Report
The Economic Setting in 1998
Wiener Städtische in 1998
Property & Casualty Insurance
Health Insurance
Life Insurance
Reinsurance
Investments
Essential Equity Interests
The Staff of Wiener Städtische
Outlook and Distribution of Profits
9
12
16
18
20
25
26
28
34
37
Report of the Supervisory Board
41
Annual Accounts
Balance Sheet
Profit and Loss Account
Separate Earnings Statement for
Motor Third-Party Liability Insurance
Notes to the Annual Accounts
44
50
56
59
The right contact for you ...
78
Impress
80
98 1
Foreword
The insurance industry for years has been among
the fastest changing economic sectors worldwide. Mergers and take-overs, new models for
risk transfers and risk financing, competitors
from outside the insurance industry, as well as
better educated and more sophisticated customers represent some of the current strategic challenges facing insurance companies. Despite this
difficult environment, Wiener Städtische can look
back upon 1998 as a successful financial year.
The life/pension insurance business has emerged
as a catalyst for growth in the Austrian insurance
market in recent years. Since 1990, the volume of
premiums has more than doubled. Nevertheless,
the Austrian life/pension insurance market continues to show potential for growth, in comparison to markets world-wide. Based upon gross
domestic product per capita, Austria is ranked
no. 8 among OECD countries; based upon premiums per capita, Austria is ranked only no. 17.
However, competition has increased also in the
life/pension insurance sector. More and more
often, products are being offered along with
promises of economically infeasible returns,
whilst little mention is made of the risks associated with such products. The life insurance of
Wiener Städtische, by contrast, offers not only
high returns but also a high level of security. This
is attributable, primarily, to the company’s maintenance of a high equity ratio. While returns on
fixed-income securities have dropped from 8 %
to less than 4 % since 1990, the interest earned
on life insurance policies offered by Wiener
Städtische has remained nearly unchanged
during the same time period, with 6.75 % in 1998.
As reported by numerous business magazines,
our company has not only consistently met but
even exceeded its anticipated profits.
2 98
Demographic developments clearly show the
limits of the social security system as the sole
vehicle of retirement planning. The age pyramid
is tipping over. In 2035, there will be 66 Austrians
60 years or older for every 100 Austrians between
the ages of 15 and 60. As a result, it will become
increasingly difficult to uphold the so-called
“contract between the generations” (i.e. the
system in which the pensions of one generation
are financed by the contributions of the next
generation). A 1998 Ifes-Fessel-GFK study clearly showed that the confidence of Austrians in the
state pension system has suffered. Only 50 %
believe that their pensions will be secure for the
next ten years. Even worse, only 10 % believe
that their pensions will be secure at their present
levels in the year 2030. Almost 60 % of those surveyed stated that a “far-reaching” or “radical”
reform was needed. The state pension system by
itself will no longer be able to provide social
security for all. Reliable partners for long-term
financing of old-age pensions are needed.
In addition to the state pension system, there are
several models for institutionalised private retirement planning in Austria. Among them are private
insurance plans, (inter)company pension funds,
and old-age pension group plans. Whereas
life/pension insurance companies have been on
the market for many decades, pension funds and
old-age pension group plans are of more recent
origin. The different tax treatment of the various
models has evolved historically, but is no longer
justifiable nowadays. This has distorted the
attractiveness of the various instruments and has
had a negative effect on competition.
Notwithstanding the fact that interest in old-age
pension insurance policies is on the rise – younger people increasingly opt for this variant of
From left to right: Gen.-Dir. Dkfm. Dr. Siegfried Sellitsch, Gen.-Dir.-Stv. Dr. Günter Geyer, Gen.-Dir.-Stv. Dr. Franz Lauer,
Vorst.-Dir. Dkfm. Karl Fink, Vorst.-Dir. Heinz Jaindl, Vorst.-Dir. Dkfm. Hans Raumauf.
retirement planning – private retirement planning
is subjected to second-class treatment when
compared to the state pension system and company pension plans.
Life insurers expect the government to afford private old-age pension insurance plans equal recognition and treatment.
The importance of private old-age provision has
now also found political recognition in the form of
the draft bill to the tax reform presented by the
Austrian government; this reform is to be passed
before summer and its essential parts are to take
effect as early as January 1, 2000. The planned
“old-age pension provision at subsidised premiums” (supplementary pension insurance) is a first
step towards equal treatment of private old-age
pension provision in Austria. The new product will
receive a state subsidy in the amount of 4.5 % of
the insurance premium. The maximum subsidy
will be ATS 619 per year, which is a good compromise between the state’s intent to grant subsidies and the constraints of the budget. In so
doing, the Austrian legislature for the first time
emphasises the necessity of private old-age provision supplementing the state and company
pension schemes.
Versicherung Aktiengesellschaft and its Austrian
and foreign affiliates during the financial year
1998. At the same time, we would like to use this
opportunity to express our sincere gratitude to
our shareholders, customers, and business partners for the trust and loyalty they have shown.
We also would like to thank all of the employees
of Wiener Städtische, whose efforts and competence substantially contributed to the success of
the past year.
The Management Board
WIENER STÄDTISCHE
ALLGEMEINE VERSICHERUNG
AKTIENGESELLSCHAFT
The frequently repeated requests of the Austrian
insurance industry in the field of old-age provision that priority be given to the safety of the
pensions have thus been taken into consideration. Overall, the insurance companies expect the
2000 tax reform to have a positive impact on the
life/pension insurance business.
The purpose of this Annual Report is to provide
you with information about the business developments of Wiener Städtische Allgemeine
98 3
Supervisory Board
Supervisory Board
Chairman:
President Komm.-Rat Karl Samstag, Vice
Chairman of the Management Board of Bank
Austria AG
Employees’ Representatives:
Vice Chairman:
Renate Doringer, Linz
Komm.-Rat Dkfm. Klaus Stadler, Chairman of
the Management Board of Wiener Holding AG
Sylvia Fiedler, Vienna, 1st Vice Chairman of the
Central Works Council
Members:
Peter Grimm, Graz, 2nd Vice Chairman of the
Central Works Council
Paul Ambrozy, Gmünd
Abbot Präses Dr. Clemens Lashofer, Göttweig
Monastery
Heinz Neuhauser, Vienna
Norbert Grinninger, Vice Chairman of the Trade
Union for Municipal Employees
Franz Urban, Vienna, Chairman of the Central
Works Council
Dr. Alfred Holoubek, Chairman of the
Management Board, retired
Trustees acc. to sec. 22 (1) VAG
Ing. Werner Kasztler, Chairman of the
Management Board of Telekom Austria AG
Robert Freitag, Vice Chairman of the
Management Board of the Employees’ Pension
Guarantee Association
Dipl.-lng. Guido Klestil
Deputy:
Dkfm. Helmut Mayr
Ernestine Graßberger, District Head, ViennaOttakring
Komm.-Rat Walter Nettig, President of the
Chamber of Trade and Industry for Vienna
Wolfgang Radlegger, Vice Chairman of the
Management Board of Bausparkasse Wüstenrot AG
Dr. Johann Sereinig, Director of the
Management Board, Österreichische
Elektrizitätswirtschafts AG (Verbundgesellschaft)
4 98
Dr. Karl Skyba, Senior Senate Councilman,
Chairman of the Management Board of Wiener
Stadtwerke
Management Board
Dkfm. Dr. Siegfried Sellitsch
Chairman
Board member since 1979
Board Chairman since 1989
Responsible for:
Strategic planning, group issues, finance,
investments, holdings, public relations,
international relations
Dr. Günter Geyer
Vice Chairman
Board member since 1988
Responsible for:
Human resources, advertisement, information
and internal organisation, real property
management and building projects
Dr. Franz Lauer
Vice Chairman
Board member since 1986
Responsible for:
Third-party liability, legal protection and motor
insurance, non-life personal lines
Dkfm. Karl Fink
Management Board Director
Board member since 1987
Responsible for:
Industrial and key-account customers,
reinsurance
Heinz Jaindl
Management Board Director
Board member since 1992
Responsible for:
Life and personal accident insurance, health
insurance
Dkfm. Hans Raumauf
Management Board Director
Board member from 1991 until June 30, 1999
Responsible for:
Marketing, sales, Provincial Headquarters
Ing. Mag. Robert Lasshofer
Management Board Director
Board member as from July 1, 1999
Responsible for:
Marketing, sales, Provincial Headquarters
Enlarged Management
The members of the Management Board
as well as
Kurt Ebner
Member of the Management Board of Union
Versicherungs-Aktiengesellschaft
Dr. Rudolf Ertl
Member of the Management Board of Donau
Allgemeine Versicherungs-Aktiengesellschaft
Dr. Hans-Peter Hagen
Member of the Management Board of
Kooperativa Prague and Brno
Mag. Gerald Hasler
Member of the Management Board of
Kapital & Wert Vermögensverwaltung AG
98 5
Status Report
The Economic Setting
in 1998
Overview
In 1998, the global economy was marked by a
high degree of volatility on the stock markets,
critical developments in some countries, and
generally low interest rates.
Nonetheless, the Austrian economy can still
claim to have had a successful year. According to
the most recent estimates, the growth in real
gross domestic product reached 3.3 %, which
means it clearly surpassed the EU average of
3 %.
Crises in the global financial system
The serious crisis of the “tiger economies”
in south-east Asia, which manifested itself in
sharp drops in prices on the stock markets,
currency devaluations and the collapse of entire
governments, led to severe turbulences in the
global financial system. The floating of the exchange rate of the rouble was followed by the
overthrow of the Russian government, and in the
autumn of 1998 such developments also spread
to Latin America. The declining demand in Asia
led to lower prices for raw materials, causing
economic turmoil in Latin American countries.
Test for the euro
The troubles on the emerging markets also led to
temporarily severe price losses in European and
US stock markets which, in turn, resulted in highly volatile securities markets. However, both the
currencies and the national economies of the
Member States of the European Monetary Union
proved to be stable. The euro, therefore, managed to pass its first test already prior to its introduction. Since the euro was launched at the
beginning of 1999, the common European currency proved to be rather weak vis-à-vis the US
dollar. Yet this trend can most likely be attributed
more to the structural weakness of the European
national economies than to the concept of the
common currency or to the euro itself.
The Austrian economy in 1998
The international crises led to a decline in the volume of exports in Austria which was counterbalanced, however, by growing private spending.
The increase in purchasing power can be attributed to the drop in raw material and energy prices, on the one hand, and to an improved
employment situation and low inflation on the
other. Consumer prices rose by only 0.9 % in
1998. In view of the composition of the consumer
price index, one can even speak of a deflationary
trend in some sectors of the Austrian economy.
in %
GDP change over last year
Ö
EU
OECD
USA
Japan
+ 3.3
+ 3.0
+ 2.0
+ 3.5
- 2.5
Unemployment rate
4.4
10.0
7.0
4.5
4.1
Inflation rate
0.9
1.8
3.7
1.6
0.7
Source: Wifo
The economic situation in Central Europe
For the first time since 1992, the Czech Republic
recorded a 2.3 % decline in its economy last year.
At present, there are no signs that an upswing
might be around the corner. Although there are
many reasons for this downward trend, careless
lending by banks to insolvent companies in the
heavy industry sector and the resulting collapse
of some credit institutions are mainly responsible
for the present situation. Considerable price
increases in rent, electricity and gas led to a drop
in the purchasing power of the Czech population.
In Slovakia, ambitious projects such as the
construction of motorways and the Mochovce
98 9
nuclear power plant contributed significantly to
the growth of the economy last year. Despite the
increase in the gross domestic product by over
5 %, the financial situation of Slovak companies
has deteriorated due to high interest rates. This is
one reason why the restructuring of the Slovak
industry is proving to be such a lengthy process.
The unemployment rate remains high at 15.6 %.
Last year’s parliamentary elections in Slovakia
led to a change of government and to a new
strategy for the country. In the years to come, the
main focus will be on constitutional reform, a
liberal economic policy and greater western orientation.
The Polish currency, the zloty, proved to be
surprisingly stable despite the Russian crisis.
This is mainly thanks to the restrictive fiscal
policy of the government. Industrial production
and the sale of agricultural products suffered
considerably from the weak domestic and foreign
demand and from growing imports. The unemployment rate stabilised at the EU average; the
weak demand, good harvests, low crude oil
in %
Selected stock indices 1998 (January 1 to December 31, 1998)
120
110
100
90
80
prices, the strong zloty and the growing imports
helped keep inflation in check. The consumer
price index rose by only 8.6 %, instead of the predicted 9.5 %.
With a 5 % increase in its GDP, Hungary is still
expanding. The Russian crisis has not had any
lasting impact on the Hungarian economy.
Exports continue to be the driving force behind
the upswing. Growing production also led to a
decline in the unemployment rate, which dropped
below 10 % for the first time since the fall of the
Iron Curtain. Inflation showed an equally positive
trend, falling to only 14.3 % from 18.3 % in 1998.
The Austrian insurance market
In 1998, the Austrian insurance industry recorded
a 3.1 % growth in premiums to ATS 139.7 billion
compared with the previous year. This suggests
that the psychological and tax-related effects of
the government austerity measures have been
overcome. Insurance payouts amounted to ATS
100.7 billion in 1998. This represents an increase
of 3.7 % over the previous year.
Old-age provision as the driving force
The public discussion about private old-age provision has given great impetus to the life insurance industry, with both unit-linked and traditional options benefiting. Life insurance policies
recorded an aggregate growth of around 9 %,
with policyholders paying premiums of around
ATS 55 billion. This demonstrates a change in
people’s attitudes towards the third pillar of
making provision for old age. It is anticipated that
the strong impetus in this sector will continue.
70
60
• Dow Jones • ATX • Hang Seng (Hong Kong)
10 98
In the health insurance sector, the volume of premiums more or less equalled that of the previous
year. The Austrian insurance companies have
passed on to their customers the reduction in
special-care class payments, which are the result
of the March 1995 decision of the Constitutional
Court, in the form of premium reductions.
Premiums totalled ATS 15.4 billion in 1998. In the
next few years, premiums are expected to increase again by around 2 %.
Continuing price competition in property &
casualty insurance
In the property & casualty line, insurance premiums dropped to just below ATS 70 billion, whereas losses paid rose by 7.8 %. A minus of 6.5 %
was recorded in motor third-party liability insurance, which continues to be hotly contested. The
continuing intense competition in this segment
suggests that the market will continue to stagnate.
Premiums
written
Change
over 1997
Insurance
claims paid
Change
over 1997
139.7
+ 3.1 %
100.7
+ 3.7 %
Property/casualty
68.9
- 0.3 %
51.3
+ 7.8 %
Health
15.4
- 0.1 %
11.7
+ 2.6 %
Life
55.4
+ 8.6 %
37.7
- 1.2 %
in ATS billion
Total
The Austrian insurance market in 1998
Source: Austrian Insurance Association
98 11
Wiener Städtische
in 1998
The course of business in 1998 was characterised primarily by three trends:
1. successful marketing efforts, especially in
life/pension insurance,
2. rising expenditure on claims in property insurance, and
3. the best financial result in the entire history of
Wiener Städtische.
Although the general conditions were altogether
difficult, profit on ordinary activities was
increased to ATS 784 million, i.e. plus 4.5 % as
compared to 1997.
Boom in private old-age provision
The trend towards private old-age provision continued. 67 % of the Austrian population claim that
they regularly worry about the security of state
pensions. In 1998, Wiener Städtische was able to
profit from that trend and to boost life/pension
insurance by a considerable 8.8 %.
1998
Change
over 1997
Gross premiums earned
17,709
+ 1.6 %
Gross expenditure on
insurance claims
15,291
+ 3.3 %
784
+ 4.5 %
80,124
+ 11.4 %
in ATS million
Profit on ordinary activities
Investment income
Key figures of Wiener Städtische
Additional business in health insurance
Wiener Städtische increased its premium volume
in health insurance although premium rates were
cut and despite the downward market trend in
this line. New business rose by more than 2 %.
This was due, amongst other things, to the new
“TT” tariff. This new product offers more benefits
12 98
in case of extended hospitalisation, a waiver of
premium in case of illness, and additional protection for travels abroad.
Fierce competition in property &
casualty insurance
Property & casualty insurance was characterised
by fierce competition. The significant rise of the
losses paid is attributable to large losses, most of
which are covered by reinsurance. In commercial
and industrial insurance, the pressure exerted by
foreign insurers increased. In the motor vehicle
insurance sector, Wiener Städtische succeeded
in raising the number of new customers by 2.8 %
to approximately 527,000. However, the result of
this line is also impaired by the increasing expenditure for claims paid. Nevertheless, the price
level on the market continues to fall.
In accident insurance, the new “Multi-Schutz”
accident pension tariff contributed significantly to
the increase in premium income. “Multi-Schutz”
is the first product which includes, in addition to
a cash benefit that is paid immediately after the
accident, an accident pension. Furthermore, the
product can be tailored to include complimentary
assistance and support services.
Best financial result
Wiener Städtische managed to make optimum
use of the volatility of the financial markets and to
increase its financial result, due to trading profits,
by 9.9 % to ATS 5,051 million. As the strong competitive pressure caused a decline of the underwriting result of 1998, the higher net income on
ordinary activities is due to the financial result.
With capital markets being subject to great fluctuations, the financial result will continue to have
a major influence on the corporate profit in the
future.
Higher operating expenses
In 1998, operating expenses rose by 4.7 % to ATS
4,375.5 million. This was primarily attributable to
non-recurring special projects, such as the conversion to the euro, preparations for the year 2000 and
the privatisation of motor vehicle registration. The
cost increase is furthermore due to higher commission payments which reflect the successful sales of
particular products and the greater emphasis on
brokers in the marketing structure.
Premium development of Wiener Städtische in 1990–1998
in %
140
130
120
110
Semperit AG Holding in June 1998 has to be viewed in this context.
Commitment in Europe
Outside Austria, Wiener Städtische operates in
six European countries (Czech Republic,
Slovakia, Hungary, Germany, Italy and Poland),
and has applied for the freedom to provide services in a number of other countries (Belgium,
France, Greece, UK, Ireland, Liechtenstein,
Luxembourg, the Netherlands and Sweden). In
1998, Wiener Städtische acquired an interest in
the Polish property insurer Heros, which is doing
successful business mostly with small and medium-sized enterprises in trade and industry. In
1999, Wiener Städtische’s presence in the Italian
market is to be strengthened by the establishment of a branch office in Milan.
100
90
1990
1991
1992
1993
1994
1995
1996
1997
1998
• Life • Non-Life • Total
Strategic investments in Austria
In November, Wiener Städtische acquired a
50.3 % stake in Kapital & Wert Vermögensverwaltung AG. That acquisition has permitted Wiener
Städtische to expand its activities in the growth
market of private asset formation. By taking over
50 % of CA-Versicherung, Wiener Städtische
acquired a stake in one of the major bancassurers in Austria. CA-Versicherung is the largest provider of unit-linked life insurance products throughout Austria. Wiener Städtische is continuously
pursuing its investment strategy of making itself a
key shareholder in Austrian enterprises listed on
the stock exchange, and holds stakes in Burgenland Holding, Flughafen Wien, Wienerberger, OMV
and others. The acquisition of a 24.3 % stake in
14 98
Service and consulting as challenges
In 1998, Wiener Städtische registered about
3,000 problem situations where its customers
received quick help through its complimentary
assistance and support services. The complimentary services provided in the motor vehicle
insurance line were used by approximately 2,500
customers; 80 % of them contacted Wiener
Städtische after a breakdown of their cars and
20 % after a car accident. By dialling 0800/202800,
the customers of Wiener Städtische also get
competent support around the clock in accident
insurance as well as in household and homeowners’ insurance. Moreover, Wiener Städtische
organises a tradesmen service, or home health
aide/housekeeping services in case of illness,
and bears the costs after insured losses.
Wiener Städtische is aware that its success
depends greatly on highly trained staff and qualified consulting services. In 1998, 243 Wiener
Städtische employees passed the examination of
the “Bildungswerk der österreichischen Versicherungswirtschaft (BÖV)” (Educational Institute of the
Austrian Insurance Industry). Since this examination was introduced in autumn 1996, 450 employees have already obtained the certificate – 75 % of
them with honours. Every second member of
Wiener Städtische’s field staff has passed the
examination on the provisions of the Austrian
“Wertpapieraufsichtsgesetz” (Securities Services
Supervision Act), and is thus qualified to furnish
information and advice on fund products. Business
with brokers was also facilitated in 1998. In the
year under review, the new broker data record
BRAIN was developed, and it has already been
applied in 1999. Brokers are able to reach their
attendants quickly and easily by e-mail. This new
EDP facility gives the brokers, and ultimately
Wiener Städtische, a decisive competitive edge
in terms of time and information.
Wiener Städtische Preference Share
International financial markets in 1998
Due to the turmoil in Asia, the crises in Russia
and Latin America and the crash of the Long
Term Capital Management Fund, the year 1998
will certainly be remembered for quite a long time
by the international investors. The international
finance system was severely tried. Nevertheless,
most stock exchanges – except for Vienna and
Tokyo – closed above the level of 1997.
by the Vienna Stock Exchange and the Frankfurt
Stock Exchange, is expected to give a fresh
impetus to the spot market of the Vienna Stock
Exchange, making an entry into the Vienna market attractive in the long run.
An attractive investment
Contrary to the overall market, the Wiener
Städtische preference share recorded a positive
price development. Investors who decided to buy
the Wiener Städtische preference share upon its
issue in 1994 have seen the share’s value go up
and can cash in a rising dividend. Since 1994, the
increase in value of that investment, including
dividend, has been more than 10 % per year.
Investor relations
As in other years, Wiener Städtische also sought
personal and regular contacts with its shareholders in 1998. This was intensified by roadshows
in Austria and abroad, by participating in various
events and, last but not least, by periodic mailings sent to the interested public. The great interest with which all these activities are generally
received shows how extremely important it is to
provide fast, direct first-hand information.
The Austrian stock market
Contrary to the trend in Europe, the Vienna stock
market was not able to make up for the losses
incurred in mid-1998 and closed down 13.5 % as
compared to the last day of 1997. However, the
agreement on the introduction of the common
trading platform “Xetra” in Vienna, entered into
98 15
Property & Casualty
Insurance
Pressure on margins in industrial business
In the year under review, the commercial and
industrial insurance industry was characterised
by continued fierce competition among insurers
and a world-wide plunge in premium income. In
this environment, Wiener Städtische was able to
stand its ground as industrial risks insurer and to
fortify its position in the European market. As
much as 47 % of the premium volume in the
property insurance lines (excl. motor vehicle
insurance) was attributable to commercial and
industrial insurance, with the emphasis on fire,
third-party liability, transport and art insurance as
well as technical lines.
in ATS million
1998
Change
over 1997
Gross premiums earned
8,406
- 2.4 %
Gross expenditure on insurance claims
6,011
- 0.7 %
Gross expenditure on
insurance claims
2,635
+ 4.5 %
158
- 71.1 %
1,691,053
- 2.2 %
Net income on ordinary activities
Number of policies
Key figures of property & casualty insurance
Within the scope of an EU-wide tendering procedure, Wiener Städtische was able in 1998 to win
a large European provider of trackbound vehicles
as an important new customer, besides establishing contacts with other new customers. Moreover, Wiener Städtische managed to become a
co-insurer in a large European group of insurance companies in the field of technical lines.
In Austria, Wiener Städtische became the leading
insurer in the expanding telecommunications
market, counting providers of mobile telecommunication services and fixed network services
among its new customers.
16 98
An international group of companies in the paper
industry chose Wiener Städtische as the insurer
of all its European operations.
Thanks to its dense network of co-operation
partners, Wiener Städtische can provide its
Austrian industrial customers, which increasingly
engage in cross-border transactions, with quick
and efficient claims adjustment on the spot.
1998 saw a number of large fire losses, and Wiener
Städtische proved once more that it is fast and
customer-friendly in the adjustment of claims.
Increasing number of customers in motor
vehicle insurance
The continued intensive competition in motor
vehicle insurance led to another drop in premium
income, while expenditure on insurance claims
rose. By making use of additional distribution
channels, Wiener Städtische succeeded in outperforming the industry in the motor third-party
liability insurance business. The number of
customers holding motor third-party liability
insurance policies grew by 2.8 % to some
527,000. New flexible products in comprehensive
and collision (“Kasko”) insurance which are tailored to meet customers’ wishes contributed to
that positive development of the portfolio. The
number of customers holding “Kasko” policies
rose by 6.5 % to about 150,000. Around 85,000
customers have taken out passenger casualty
insurance with Wiener Städtische.
Since its introduction in January 1998, the “additional protection abroad” product has been sold
to some 2,000 customers. This innovative product provides quick and efficient help if the customer happens to gets involved in an accident
abroad. If an insured suffered injuries in the
course of an accident abroad and wishes to claim
damages, he/she must simply contact Wiener
Städtische after his/her return to Austria. The
claims are settled according to Austrian law, no
matter whether the insured was responsible for
the accident or not.
Motor third-party liability premiums vs. consumer price index
in %
140
130
120
110
Preparations for the privatisation of motor vehicle
registration were completed in 1998. Together with
Donau and VJV, Wiener Städtische offers such
registration service throughout Austria. Trial operation started on February 1, 1999, and was very successful: in the first month alone, Wiener Städtische
handled 1,081 registrations for its customers.
Extended protection for private customers
Already in 1998, Wiener Städtische developed a
new product in the sector of household and
homeowners’ insurance. The “System Plus”
homeowners’ insurance provides comprehensive
protection in case of floods, inundations, earthquakes and avalanches. The avalanche disasters
in early 1999 clearly demonstrated the need for
such insurance protection.
The new household insurance was supplemented
by the more comprehensive private third-party liability insurance with world-wide coverage. In 1998,
more than 13,500 customers opted for the attractive additional benefit “Die rasche Hilfe”, a package of complimentary assistance and support services in household and homeowners’ insurance,
which was introduced in 1997. In May 1998,
Wiener Städtische launched the “Multi-Schutz”
accident tariff which reflects the changed risk
situation of the Austrian population. Since 1986,
the number of accidents causing permanent bodily injury has risen by 16 %. “Multi-Schutz” is the
first product to include an accident pension along
with a cash benefit that is paid immediately after
100
90
1990
•
1991
1992
1993
1994
Motor third-party liability premiums
1995
•
1996
1997
CPI
the accident. Furthermore, the policyholder may
also opt for a number of complimentary assistance
and support services, such as arranging for
housekeeping or meals service. The excellent
sales performance of this new product contributed
significantly to the 4.6 % increase in the overall
premium volume in accident insurance, which
totalled ATS 647 million.
World-wide claims processing
Wiener Städtische has been meeting the increasing demand for claims processing on a worldwide basis with the help of more than 50 co-operation partners. The settlement of minor losses
directly with the customer – the quota is approximately 33 % – is also continuously intensified. In
well over 100 offices all over Austria, claims
resulting from minor losses are quickly and efficiently adjusted on the spot.
The total number of losses in 1998 was roughly
350,000, with 122,000 attributable to the motorvehicle sector. Assuming that a year has about
250 working days, the employees in the claims
processing departments at headquarters and in
the local offices dealt with approximately 1,400
claims per day.
98 17
1998
Health Insurance
Premiums lower than in 1993
In 1998, negotiations held by Wiener Städtische
with hospital providers and physicians again led
to a reduction in hospital charges. As in the two
previous years, Wiener Städtische passed on the
resulting cost advantages to its customers without delay. In most federal provinces, Wiener
Städtische lowered its premiums by up to 2 %.
On account of the premium reductions over the
previous three years, the premium level in 1998
was even below that of 1993. During the same
period, the consumer price index increased by
approximately 13 %, the average income by
about 18 %. By continuing its premium-reduction
policy in the 1998 financial year, Wiener
Städtische again succeeded in making the special-care class health insurance even more affordable for its customers.
In spite of the rate cuts, the premium volume rose
by 0.7 % to a total of ATS 3,200 million. This
means that despite the downward market trend
in 1998, Wiener Städtische was able to increase
its premium income. The new business developed well in 1998. New insurance contracts generated a premium income of ATS 160 million.
Monthly premium in ATS
Premium reduction in health insurance
1,460
1,420
1,380
1,340
1,300
1993
1994
1995
1996
1997
1998
Premium calculated for a woman, insured under the Austrian “ASVG” (General
Social Security Act), born in 1959, age of subscription: 33, supplementary
insurance for the special-care class in semi-private room,
federal province: Vienna (applies to Austria as a whole)
18 98
12,000 “TT” contracts
One of the main contributors to this development
was the new “TT” tariff, which was launched in
May 1998 and provides, among other things, for
a daily hospitalisation benefit. More than 12,000
contracts were purchased in 1998. The new
product also covers loss of income in case of
illness and offers significantly more benefits
during extended hospitalisation. Moreover, this
tariff also includes a health insurance for trips
abroad.
Hospital stays on the rise
During the past two years, Wiener Städtische
registered an Austria-wide average increase of
4 % in the number of hospital stays of its
policyholders. As a consequence, the benefits
paid by Wiener Städtische went up by almost 2 %
in 1998, in spite of price reductions and fewer
days of hospitalisation. The increase in the
number of hospital stays is basically due to
advances in medicine, but partly also to the
introduction of performance-oriented hospital
financing on January 1, 1997. It was particularly
on account of this development that in 1999 the
premiums were raised slightly by about 2.5 %.
However, Wiener Städtische will also in the future
continue to do everything to ensure that the
insurance premiums remain affordable for its
customers.
Partners in health provision
The census carried out in Austria in 1997 revealed that the life expectancy of the Austrian
population continues to rise. The decisive factor
for the increasing life span is certainly the progress in medicine. This trend, in connection with a
fair and just access of the population to medical
care, including state-of-the-art medicine, means
that more and more people will live to an advan-
ced age. The composition of our portfolio of
policyholders according to age reflects this.
Progress in medicine has enabled not only the
development of new and sophisticated operation
techniques but also their application to very senior patients. As a consequence, the intensity and
frequency of treatment of elderly patients have
increased much more than would have been
expected on account of their percentage.
The effects of the constantly increasing life
expectancy can be drastically demonstrated with
an example. If we take the life expectancy of a
60-year-old in 1950, an average of seven
hospitalisations could be expected for his/her
remaining life span. Taking into consideration
today’s life expectancy, nine hospitalisations
have to be reckoned with.
Increasing life expectancy as a consequence of
the advances in medicine has great economic
importance as regards the medical costs. This
circumstance must also be considered in private
health insurance programmes.
Outlook for 1999
It is the prime goal of the insurance companies to
come to an agreement with the Vienna city hospitals on the amount of the charges for first-class
accommodation in 1999. While, on the one hand,
the Vienna Medical Society and the Vienna
private hospitals have already reached an
agreement on hospital rates in 1999, the City of
Vienna, on the other hand, without having
reached an understanding with the private health
insurers, has fixed charges for first-class
accommodation at a rate which clearly exceeds
the limits laid down by the Constitutional Court in
its landmark decision of 1995.
Wiener Städtische, however, is still making efforts
to come to an agreement on this issue. Its customers may, of course, continue to use the firstclass facilities in the Vienna city hospitals. As in
the past, Wiener Städtische undertakes to directly settle the accounts by declaring its liability to
pay the costs.
In early 1999, Wiener Städtische enlarged the
number of products available under the “Bonus
Tariff”. This tariff offers an attractive premium
return if the customer has no claim on the insurance company and a premium reduction in case
of illness as well as incapacity to work. Moreover,
a new product will be offered as of this summer
which will include preventive medical check-ups,
stays in wellness hotels and fitness activities.
98 19
Life/Pension Insurance
Pension provision continues to boom
In 1998, the trend towards private old-age provision continued. Half the Austrian population have
already made arrangements for their lives as pensioners. A study by the market research institute
Fessel-GfK showed that in 1991, 45 % of those
interviewed in the age group of 20 to 54 years
had already taken measures to provide for old
age, and by 1997, the percentage had gone up to
56 %.
in ATS million
1998
Change
over 1997
Gross premiums earned
6,102
+ 8.2 %
Gross expenditure on insurance claims
incl. actuarial provision
6,276
+ 8.3 %
Gross operating expenses
1,287
+ 6.0 %
631
+ 173.9 %
1,577,196
- 2.5 %
Net income on ordinary activities
Number of policies
Key figures of life/pension insurance
More and more young people, too, are becoming
aware of and addressing the problems surrounding state pensions.
in ATS million
Change of commission structure
200
150
The investment pattern of Austrian investors
reveals an inclination for long-term forms of
investment. According to an opinion poll taken by
the Spectra market research institute, Austrians
intend to increasingly spend their money on life
insurance policies, securities, and land and other
real estate. The spectacular development of unitlinked life insurance confirms this trend. For
example, the premium volume of the five insurers
that offer unit-linked life insurance either alone or
with other products, and with great success,
including Wiener Städtische’s affiliate CAVersicherung, soared by almost 40 %; the premium volume of the other insurers rose by 7.2 %.
Wiener Städtische continued to successfully
stand its ground in the market of traditional oldage provision. In 1998, the market share in
life/pension insurance was 10.5 %. 85 % of the
new policies were taken out provide for retirement. Every second new pension insurance
customer was 30 years old or younger.
In total, Wiener Städtische recorded an 8.2 %
increase in life/pension insurance over the past
year. Income from ongoing premium payments
for long-term provision products rose by 4.2 %
to ATS 4,427 million. As regards policies based
on single-premium payments, Wiener Städtische
registered a growth by as much as 26.1 %.
Already one third of the company’s entire
premium volume comes from life/pension
insurance.
100
50
0
1996
1997
1998
Commissions of full-time employees
• Commissions of insurance agents and•other alternative distribution channels
20 98
In the past year, Wiener Städtische paid out more
than ATS 4.9 million worth of endowment and
whole-life insurance benefits to its customers.
As of December 31, 1998, the sum insured of all
life policies in the portfolio totalled ATS 121.2
billion.
Security and profitability
In the media, more and more investment ads lure
customers with promises of high yields, omitting,
however, to point out the inherent risks. A life
insurance policy from Wiener Städtische offers a
high yield as well as security. While the yield of
fixed-income securities has fallen from 8 % to
just a little under 4 % since 1990, the interest
earned on a life insurance policy has remained
almost the same over that period. In 1998, such
interest was 6.75 %; due to the current interest
situation on the capital markets, it will certainly
in %
Comparison of yield
9
ress in life expectancy made by the Austrian
population over the last century. While back in
1900, the mean life expectancy of the male part
of the Austrian population was 40.7 years, it has
since advanced to 72.5 years. Women even live
to the age of 79.1, on average.
This increased life expectancy means that a male
child born in 1990 will, on average, live for 72.5
years; it does not, of course, mean that a man
who is 71 years old today has only one more year
to live. As regards the life expectancy of that
man, all other males who died before reaching
the age of 71 are disregarded. His further life
span is calculated as the average of all 71-yearold men who are still alive.
8
If – starting from a basis of a thousand 55-yearold Austrian women and a thousand 55-year-old
Austrian men – one looks at the age of 80, for
example, it becomes apparent that 43.7 % of the
men and 62.1 % of the women are still alive.
7
6
5
4
3
1990
1991
1992
1993
1994
1995
1996
1997
1998
of fixed-income securities
•• yield
interest earned on life insurance policies
• net yield of life insurance investments
decrease. However, numerous articles published
in business magazines show that Wiener
Städtische not only achieved but even surpassed
the profits forecast by it.
Increasing life expectancy as a challenge
“The rise in the life expectancy of men is frightening, and women are indeed approaching
immortality.” This quote from the university professor Dr. Walter Schachermayer is absolutely to
the point in describing the most gratifying prog-
22 98
If mortality rates at all age levels, but in particular
from the age of 60, continue to fall, the mean life
expectancy of an Austrian born in 1990 will even
be considerably higher than that indicated in the
above example. The increase in the further life
expectancy of a 55-year-old woman is even more
striking: while in 1900 she could expect to live for
16.3 more years, this number increased to 26.6 in
1990.
Taking a look at the medium-term future, one may
proceed on the assumption that due to the fast
progress of medical science mortality rates will
decrease, in particular at higher age levels.
Besides life expectancy, it is the date of retirment
that determines the duration of old-age pension
payments. Between 1970 and 1990, the effective
retirement age fell from 63 years to 58 years. The
statutory retirement age of 65 in the case of men
and 60 in the case of women has not changed,
but Austrians still tend to retire early. The amendments of the Austrian “ASVG” (General Social
Security Act), which had been intended to curb
the trend, proved almost ineffective in that respect.
Further life expectancy of a man aged 60
and a woman aged 55
26
24
22
20
18
16
Due to the increase in life expectancy described
above, the average duration of old-age pension
payments rose from 14 years in 1970 to 23 years
in 1990. As a logical consequence, the amount of
old-age pensions under the General Social
Security Act will continue to decline. The reduction of the so-called “Ersatzrate” – i.e. the ratio
between the social security pension financed by
contributions and the last active-service income
before retirement – will further intensify the trend
towards private old-age provision.
Rising customer loyalty
Wiener Städtische’s efforts to continuously improve quality and customer service were rewarded by its customers showing an ever increasing
loyalty in 1998. As compared to the previous
year, the number of customers terminating their
policies prematurely was down by about 10 %.
Furthermore, a larger percentage of the expiring
life insurance policies were renewed.
Outlook
Since January 1999, Wiener Städtische has been
offering a risk insurance that encourages a healthconscious way of life: non-smokers receive a 65 %
premium bonus which is guaranteed for five years.
14
12
10
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
• a woman aged 55 • a man aged 60
comprehensive product of its kind in the Austrian
market: “United Funds of Success®”, which combines a high earnings potential with a high degree
of flexibility concerning customers’ wishes and a
unique type of protection in case of death.
The so-called “contract between the generations” – this term denotes the system in which the
pensions of one generation are financed by the
contributions of the next generation – is increasingly jeopardised by the fact that Austrians generally tend to retire earlier while their life expectancy is rising, and also by the sinking birth rate
in Austria. In 2000, every third person will have
retired. As young people grow aware of this problem, private old-age provision is expected to
become even more important.
In February 1999, Wiener Städtische introduced
a unit-linked life insurance which is the most
98 23
Reinsurance
Reinsurance international
The world-wide reinsurance market was characterised by a string of mergers and acquisitions also
in 1998. The cumulation of natural catastrophes in
the early nineties caused bankruptcies and forced
companies out of the market, on the one hand,
but, on the other hand, also showed the importance of a quality-oriented selection of reinsurance
partners. Both factors contributed to the consolidation process on the global reinsurance
market.
Reinsurance activities
In 1998, Wiener Städtische restructured and optimised its reinsurance programme according to
quality criteria: priority was given to a few handpicked international reinsurers of top rating. Large
proportions of Wiener Städtische’s gross premium
income were ceded, among others, to Swiss Re,
Cologne Re, Munich Re, Bavarian Re and ERCFrankona. An important control function is played
by a sister company of Wiener Städtische, called
MuVi Replayed.
In 1998, efforts were made to further adjust the
reinsurance contracts to the requirements of the
individual insurance lines. The strategic aim was
and is the stabilisation of the results of the retained
business in the long run.
Wiener Städtische has practically abandoned the
assumed reinsurance business, shifting its emphasis to its core business, primary insurance.
Nevertheless, it acts as advisor and also as reinsurance partner for the inwards business from its
Austrian and foreign subsidiaries. These cooperations are a major part of the assumed reinsurance business and an important element in the
success of the Wiener Städtische insurance subsidiaries.
Reinsurance result
Wiener Städtische’s reinsurance business is focused almost exclusively on property insurance.
Unlike its foreign rivals, Wiener Städtische hardly
ceded any reinsurance business in personal insurance. Consequently, with Wiener Städtische, the
entire life insurance contributes to the value added.
In the ceded reinsurance business, ATS 970.3 million worth of premiums were ceded, at a positive
result of ATS 258.9 million for Wiener Städtische
(loss of reinsurers). The negative result of the reinsurers is primarily due to large losses which are to
a large degree covered by reinsurance.
Source: Sigma, No. 9/1998
The result of active reinsurance amounted to
ATS – 2.6 million. In inwards reinsurance, the premium income of Wiener Städtische was ATS 549.6
million. In line with its policy to focus its commercial interests, Wiener Städtische acted primarily as a
reinsurer for its subsidiaries.
The above figures do not include the portion of
ceded reinsurance that results from reporting the
ceded indirect-like-direct co-insurance business as
reinsurance (mandatory since 1996).
98 25
Investments
Involvement in residential real estate
Low interest rates and highly volatile stock markets were the environment in which investments
were made in 1998. Interest rates on bonds,
which were already at a very low level, dropped
even further. Inflation was also very low and continued to fall steadily. In 1996, consumer prices
rose by as much as 1.9 %, in the following year
by only 1.3 %, and in 1998 they went up by a
mere 0.9 %.
For this reason, loans to the Austrian federal
government – which make up around two thirds
of all claims in respect of loans – accounted for
an insignificant proportion of new investments in
the past year. Wiener Städtische continued to
invest in housing finance and granted most of its
loans to the sector of the non-profit-making
housing enterprises.
Further increase in the equities portfolio
Wiener Städtische further expanded its equities
portfolio in the past year. Owing to the historically low level of interest rates and the decreasing
stability of the world economy, the stock markets
are very volatile at present. Wiener Städtische will
be taking even greater advantage of this volatility
in the future in order to generate trading profits.
As long as there is the necessary diversification,
investing in equities is a profitable as well as
secure option in the long term.
US Tr.
30 ys.
DM bd.
10 ys.
S bd.
10 ys.
hfl bd.
15 ys.
3 -mo.
VIBOR
3 -mo.
FIBOR
3- mo.
LIBOR
Dec. 30, 1997
5.97
5.33
5.40
5.42
3.78
3.64
5.81
Dec. 30, 1998
5.10
3.84
4.01
4.08
3.25
3.25
5.07
Interest rate level Austria/EU/USA
Investment in the euro zone
The common European currency has created an
expanded “home market” for investments. As a
26 98
result, Wiener Städtische is gaining new opportunities but also expects stronger competition in all
areas.
To achieve an even better performance and at the
same time increase security through diversification, Wiener Städtische intends to rise the noneuro share of its portfolio. It will in particular
enlarge its investment in US markets.
Innovative methods of financing
In 1998, Wiener Städtische issued the first convertible euro bond of the Austrian insurance
industry which is convertible into stock of another company. The bond, which has a nominal
value of DEM 100 million and a term of 5 years, is
convertible into ordinary shares of Semperit AG
Holding within its maturity and was offered in
Austria, Germany and Switzerland. The capital
raised is intended to be applied to the financing
of the Wiener Städtische’s growing international
business. The shares of Semperit AG Holding
were acquired from CA in the first half of 1998 as
part of a 24 % shareholding.
Wiener Städtische – a Central European
insurance company
In 1998, Wiener Städtische acquired strategic
interests in the finance and insurance sectors in
Austria and Central Europe in order to permanently strengthen its position there.
In the first half of 1998, Wiener Städtische acquired a 50 % stake in CA-Versicherung. CAVersicherung is a very successful life-insurance
company with an annual premium volume of
more than ATS 1 billion and has a network of
branches throughout Austria. The existing cooperation with Wüstenrot was expanded through
the acquisition of a 3 % stake in Bausparkasse
Wüstenrot AG.
In addition, Wiener Städtische acquired a 50.3 %
stake in Kapital & Wert Vermögensverwaltung AG,
thereby gaining a further foothold in the growth
market of private asset formation. The company’s
products and services are an important addition to
the range of products and services provided by
Wiener Städtische. Furthermore, Kapital & Wert
offers an additional sales channel for innovative
products and a highly qualified consulting service
for private asset formation schemes. At the same
time, by developing joint products full use can be
made of the synergy potential.
Wiener Städtische’s successful involvement in the
Czech Republic was further expanded by capital
increases in the Kooperativa companies in Brno
and Prague. The greater capital resources are
intended, among other things, to ensure the best
possible preparation for the forthcoming liberalisation of motor third-party liability insurance. The
merger of the two Kooperativa companies is
scheduled to take place in 1999.
Investing in the future
The infrastructure surrounding the “Campus 21”
business park in the south of Vienna was almost
completed in 1998. “Campus 21” combines offices, laboratories and warehouse facilities into a
functional unit, providing its lessees with good
transport connections, state-of-the-art technology and a maximum of organisational freedom and
customer service. The first construction stage
will be completed by the end of 1999.
In Vienna, Wiener Städtische provided financial
support to the “House of Music”. From the year
2000 onwards, this establishment will not only
provide tourists and music lovers with information and special performances, but will also be a
central information bureau for musical events.
In 1998, Wiener Städtische acquired a majority
stake in the Polish property insurer Heros, which
means that it now holds a total of 122,045 shares
in Heros. That corresponds to 69.7 % of the capital and 62.3 % of the voting rights.
Inner circle: Investments in 1995
Wiener Städtische also acquired a 10 % stake in
the listed Polish bank Powszechny Bank
Kredytowy; in 1999, the Polish authorities agreed
to the Bank Austria/CA Group acquiring a majority stake in that bank. This means that we have an
important banking partner in the Polish market,
both for us and for Heros.
Outer circle: Investments in 1998
As part of the focus on the European market, the
interest held in the US insurance company Folksamerica was sold at a profit.
98 27
Essential Equity Interests
Donau Allgemeine Versicherungs AG
With an overall growth of 1.4 %, Donau achieved
a premium volume of ATS 5.4 billion in 1998. The
main business activities of Donau are traditionally
in the areas of private customers, agriculture and
trade. Donau has a special relationship with the
Austrian savings-bank sector. Donau is the property insurer of the savings bank sector and has a
corporate-law relationship with S-Versicherung.
In the property & casualty insurance, the income
slightly decreased by 1 %. Claims paid rose by
7.7 % due to large fire losses. By virtue of its selective risk-management policy in motor thirdparty liability insurance, Donau was able to
achieve significantly better results than the rest
of the insurance industry.
In life insurance, the premium income went up by
8.3% to a total of ATS 1.5 billion, which is in line
with the overall market trend. Thanks to its innovative products, Donau was able to obtain good
results in the sector of private old-age provision
also in 1998. The scope of benefits of the “Dread
Disease” policy – a life insurance policy where
payments are made already in the case of severe
Market shares of Wiener Städtische's equity
interests in Austrian companies
in %
illness – have been significantly extended for the
second time since the introduction of this product. Also in the sector of the unit-linked life insurance, the offer was increased.
Volksfürsorge-Jupiter Allgemeine
Versicherungs AG
VJV achieved a premium volume of ATS 3.3 billion in 1998, which is equivalent to an approximately 3 % growth over last year’s results. Life
insurance accounted for 16 % of this growth. In
the property & casualty insurance, the loss ratio
deteriorated on account of the declining premium
volume and increased expenditures.
Investments rose by 9.6 % to ATS 9.3 billion and
yielded an income of ATS 590 million before
taxes. This is equivalent to a mean return of
almost 7 %.
In 1998, VJV again introduced a number of new
insurance products on the market. An especially
innovative product is “FreeLife”, a life insurance
policy with variable premium payments.
In the motor-vehicle sector, the “fun-and-ride”
customer club was founded in order to attract
and bind new customers.
Union Versicherungs AG
In 1998, Union increased its premium volume
from ATS 2,282 million in 1997 to ATS 2,299 million. Of that amount, ATS 2,252 million were
attributable to life insurance and ATS 47 million to
property & casualty insurance.
25
20
15
10
5
0
Property/Casualty
Life
Städtische
•• Wiener
Donau
• VJV
28 98
Health
•• Union
CA-Versicherung
• Montan
The “Pensions Management” product, which is a
customised and flexible programme for private
asset formation for old-age provision, was
launched at the beginning of 1998 and was well
ALLGEMEINE VERSICHERUNG AKTIENGESELLSCHAFT
VERSICHERUNGS-AG
45.8%
Kooperativa poistóvna a.s.
(Bratislava)
87.0%
47.7%
Ceská
Kooperativa poistóvna a.s.
(Prag)
82.3%
33.3%
Moravskoslezká
Kooperativa poistóvna a.s.
(Brünn)
83.2%
75.0%
Die
meistbesungene
Ve r si c h e r u n
g
VERSICHERUNGS-AKTIENGESELLSCHAFT
49.0 %
50.0%
78.5%
m
montan
VERSICHERUNG AKTIENGESELLSCHAFT
69.7%
Insurance holdings of Wiener Städtische
30 98
received by the market. Union was also engaged
in the further development of the unit-linked life
insurance. Special emphasis was placed on the
offering of additional benefits which ensure that
the customers will reach their proposed savings
goals even in the case of unemployment or
illness.
performance is clearly above the market average.
This result confirms the strategic orientation of
Montanversicherung as a national as well as
international quality insurer. The effects of synergy created by incorporating Montanversicherung
into the Wiener Städtische group stabilised the
costs at last year’s level.
Montanversicherung AG
In 1998, Montan was able – despite the aggressive price war raging in industrial insurance – to
further improve its position in this line of business. The gross premium income rose by 8 % to
ATS 308 million as compared to 1997 this-
Bank Austria AG
In 1998, the proven co-operation between Bank
Austria and Wiener Städtische has been continued. The co-operation mainly concentrated on
the distribution of insurance products and financial services (VISA cards, investment certifi-
cates), and on the area of motor-vehicle leasing.
In spite of the generally unfavourable conditions
prevailing in the international financial markets,
the Bank Austria group succeeded also in 1998 in
reaching the good operating result of 1997; it
totalled ATS 13.4 billion. In the private customer
sector, the Bank Austria group takes care of
about 1.6 million customers, thus holding a share
of about one fifth of the overall market.
CA-Versicherung AG
In mid-1998, Wiener Städtische acquired a 50 %
stake in CA-Versicherung. 1998 was mainly characterised by a boom in unit-linked life insurance.
The CA-Versicherung premium income from unitlinked life insurance soared by 204 % to
ATS 660 million. Classical life insurance, and private pension insurance in particular, registered
an increase of 9 %.
The gross premiums earned in life insurance amounted to ATS 1,278 million in 1998 and in
the property & casualty line to ATS 9 million. All
in all, this means an increase of 41.2 % over 1997.
Kapital & Wert Vermögensverwaltung AG
At the end of last year, Wiener Städtische acquired a 50.3 % stake in Kapital & Wert
Vermögensverwaltung AG, a stock corporation
engaged in corporate finance as well as the
development and distribution of investment
products, in particular real estate and securities
funds as well as unit-linked life insurance policies. In 1998, Kapital & Wert Vermögensverwaltung AG was able to increase its business
result and had an investment volume of a total of
ATS 12.8 billion with about 30,000 investors. The
net profit in the financial year 1997/98 totalled
ATS 88 million; this means an increase of 15.6 %
in comparison to the previous accounting period.
Ceská Kooperativa pojistóvna, a.s., Prague,
and Moravskoslezská Kooperativa pojistóvna,
a.s., Brno
The Kooperativa companies in Prague and Brno
with a joint market share of 13.8 % are the undisputed number two in the Czech market, right
behind the former state monopoly insurer. In
1998, the foundation was being laid for a merger
of the two Czech companies, which is scheduled
for 1999. Due to this measure, the premium volume of the company will be significantly larger
than that of the third-ranking insurer in the Czech
market.
Kooperativa Prague was able to score a premium
income of CZK 5,106 million in the year under
review. This is equivalent to a growth of 11.6 %.
Kooperativa Brno showed an increase of 12.1 %
to CZK 2,077 million. As in the previous year,
both companies registered high growth rates in
life insurance and succeeded in further evolving
their business into that of multi-line insurers.
The forthcoming liberalisation of the motor thirdparty liability insurance in the Czech Republic in
early 2000 will be used to extend the companies’
good position in the comprehensive and collision
(“Kasko”) insurance to the motor vehicle insurance business as a whole.
Change in GDP
Austria
Change in overall
premiums
6.9
27.1
Czech Republic
14.9
40.2
Slovakia
10.8
34.7
Hungary
1.6
69.4
Poland
30.6
89.9
Comparison in 1992 and 1996 in %
98 31
Kooperativa poistóvna, a.s., Bratislava
Also in 1998, Kooperativa Bratislava registered a
high growth in premium. In the year under review,
the company’s market share amounted to 8.2 %,
which means that Kooperativa Bratislava is the
largest private insurer in Slovakia. The premium
volume increased by 21.3 % to SKK 1,680 million, with non-life lines accounting for SKK 1,334
million of the premium income.
InterRisk Internationale
Versicherungsholding GmbH
In 1998, InterRisk Holding sold its majority share
in Freiburger Allgemeine Versicherung Aktiengesellschaft in Switzerland to the minority shareholder Coop Lebensversicherungs-Genossenschaft Basel. Not affected by this sale was the
100 % share in InterRisk Versicherung AG
Wiesbaden.
InterRisk Versicherung AG Wiesbaden had a premium volume of ATS 578 million in 1998, with
accident insurance, the core segment of the
Premium/inhabitant
in 1996 (in ATS)
Premium growth
1995/96 (in %)
Austria
8,790
0.4
Germany
9,490
0.2
Sweden
5,250
- 2.5
England
7,730
- 6.5
France
9,490
- 1.1
Poland
50
26.2
Slovakia
230
21.1
Czech Rep.
420
10.2
Hungary
180
4.1
Slovenia
2,620
6.1
Market Size (Non-Life)
32 98
company, accounting for ATS 392 million. At the
end of 1998, InterRisk Lebensversicherungs-AG
was established as a subsidiary of InterRisk
Versicherung AG Wiesbaden in order to be able
to offer the distribution partners of the InterRisk
group also life insurance products. The necessary capital expenditures were financed from the
proceeds of the sale of the Freiburger share.
Glória-Swiss Life Svájci-Magyar
Biztositó Rt., Budapest
Since 1996, Wiener Städtische has a stake in
Glória-Swiss Life, which is firmly anchored in the
life insurance business. After a capital increase in
1997, Glória has strengthened its position in the
Hungarian insurance market in the previous year
and reached a premium income of HUF 1,576
million (+ 37.9 %). In 1999, Glória will broaden its
range of products and increasingly offer its private customers property insurance contracts as
well.
Heros Bankowe Towarzystwo Ubezpieczen
i Reasekuracji S.A.
In 1998, Wiener Städtische acquired a majority
stake in the Polish property insurer Heros which
is mainly doing business in the trade and industrial sectors and has a dense distribution network. The company’s premium income in 1998
amounted to PLZ 67 million (+ 11.1 %). The participation in the Polish Heros has opened up an
interesting insurance market with 40 million inhabitants. In Poland, an average of USD 60 per
inhabitant is spent on insurance, compared to
ATS 8,790 per capita in Austria. It is the aim of
Wiener Städtische to restructure Heros into an
insurance company concentrating on the privatecustomer business. With this objective in mind, a
“family policy” was launched already at the end
of 1998. It comprises a household and a home-
owners’ insurance, an accident insurance for the
whole family, a motor-vehicle insurance and a
professional liability insurance.
Performance of the VIF fund and
the “Vorsorge Rentenfonds” bond fund
in %
300
250
Ringturm KAG
Ringturm KAG, in which Wiener Städtische has a
stake of 51 %, celebrated its 10th anniversary in
the year under review. Ringturm KAG is the sixth
largest investment company in Austria and the
only one in which the majority owner is not a
bank. It offers three specialised funds and four
funds open to the general public. The flagship of
Ringturm KAG is the “Vorsorge Rentenfonds”
fund which exclusively invests in Austrian fixedincome securities. The average performance of
the “Vorsorge Rentenfonds” bond fund during the
past 10 years was 8.1 %. The VIF (Versicherung
International Fonds) fund, which is the only fund
world-wide which exclusively invests in international insurance shares, had a performance of
23 % in 1998 and a 10-year performance of
11.8 % p.a.
200
150
100
50
0
1995
1996
•
•
VIF fund
1997
1998
1999
“Vorsorge Rentenfonds” bond fund
In 1998, Ringturm KAG succeeded in boosting its
volume by 108 % to ATS 23.8 billion and in
increasing its share in the overall market from
2.0 % to 3.2 %. Ringturm KAG was awarded an
honorary distinction for its successful fund management by the financial services provider
Standard & Poor’s in 1998. In the presentation of
the “Micropal Award ’98” for the most successful
international fund companies, Ringturm KAG was
ranked second in the five-year comparison and
thus was number one among the Austrian investment fund companies.
98 33
The Staff of
Wiener Städtische
Together we are going for success
As of the end of 1998, Wiener Städtische had an
overall staff of 4,096, with 11 employees having
been added since the beginning of the year. For
the first time the ratio between field staff (including apprentices) and office staff was 1:1.
Following the overall trend in the insurance
industry, the number of office staff shrank to
2,045 (minus 19 as compared to 1997). This
reduction is mainly due to the retirement of
employees who have not been replaced. The
number of staff working in field service was
2,051, roughly the same as in the previous year.
Up-to-date apprentice training
In line with the apprenticeship programme
“Karriere mit Lehre”, Wiener Städtische has been
offering young people the opportunity to launch
their career in a promising line of business.
During the year 1998, the number of apprentices
increased by 33 (up 32 %), so that as of
1998
Change
over 1997
Salaries and wages (in ATS million)
1,670
+ 0.6 %
Overall staff
4,096
+ 11
Office staff
2,045
- 19
Field staff
1,914
-3
Apprentices
137
+ 33
December 31, 1998, a total of 137 young men
and women were doing a three-year apprenticeship to become insurance merchants. Thus,
Wiener Städtische’s share in the training of
apprentices is twice as high as its market share
in the Austrian insurance industry. The training
34 98
of successful apprentices includes a stay in
England to improve their language skills.
In the past year, 135 employees of Wiener
Städtische belonged to the group of handicapped individuals classified as eligible for preferential treatment by the Federal Social Security
Office. The fact that Wiener Städtische did not
have to pay any compensatory duties in 1998
either shows how seriously it takes its social responsibility.
Awards
In 1998, the “Association of Women University
Graduates of Austria” awarded its honorary
distinction to Wiener Städtische in recognition of
the company’s women- and family-friendly
management policy. In addition, the Chamber of
Labour of Tyrol voted Wiener Städtische the most
women- and family-friendly business of the province out of approximately 1,300 candidates.
Employees with a “quality seal”
When the so-called “BÖV certification” for insurance agents was introduced in Austria, it set a
quality standard for consulting services provided
to insurance customers. Meanwhile, more than
450 Wiener Städtische employees working in
field service have passed this examination of the
“Bildungswerk der österreichischen Versicherungswirtschaft (BÖV)” (Educational Institute of
the Austrian Insurance Industry) – three out of
four candidates even with honours. This gives
Wiener Städtische a clear lead among Austrian
insurance companies.
Although the BÖV examination is mandatory for
new recruits only, a great number of the established Wiener Städtische field staff have also
taken up that challenge; this not only proves their
excellent insurance know-how and consulting
skills but also demonstrates their willingness to
provide high quality consulting service to customers.
Job and security
In its subsidiary Produktiva, Wiener Städtische
continues to offer a new job model that addresses, in particular, women who are newcomers to
the job or who wish to re-enter working life. The
model consists of a two-year training period
during which the participants can also acquire
practical experience. A fixed base salary and
flexible working hours afford full social security
coverage. In 1998, Produktiva employed 28
women, which constitutes about 50 % of its entire workforce.
Number of employees
Age structure of employees
1,200
1,000
800
600
400
200
0
up to 20
21–30
31–40
41–50
51–60
Highlights of personnel development
Since 1998, employees from the individual lines
of insurance and from the claims processing
departments have been receiving further training
in customer service by phone, at the Service Line
training centre.
The sales and consulting training of new employees in field service was extended in 1998.
Particular emphasis was placed on analysing
customer needs and on competent technical
advice in the field of private old-age pension provision. In 1998, training activities were focused
on investment funds and unit-linked life insurance products. This served to considerably
increase the number of insurance consultants
specialised in these products.
98 35
Current Position
and Outlook
The uncertainty on the international financial
markets and the resulting slowdown in world
economic growth are definitely also having an
impact on Austria. The Vienna-based Institute for
Higher Studies (IHS) has forecast that the GDP
will grow by + 2.4 % in 1999, falling to + 1.9 % in
2000. Nonetheless, the Austrian Insurance
Association expects insurance companies to
register a further increase in premium income
from life insurance, the main reason being that
life/pension insurance represents an extremely
profitable form of investment when interest rates
are low. According to the IHS forecast, the
current interest rate cycle is due to bottom out in
1999, but since there is still a great demand for
private old-age pension provision, life/pension
insurance has considerable growth potential.
pressure of competition, which has been almost
irrational at times, has led to a reduction in premium income. The cost of claims has risen continuously and, together with the fall in premiums,
has led to a higher loss ratio. This trend in the
Austrian insurance industry will continue, at least
in 1999. Wiener Städtische’s aim, therefore, is to
maintain the level of premiums through specific
well-aimed measures, such as stepping up the
acquisition of new business and combating cancellations.
Forecast premium development
of the Austrian insurance market
in %
150
140
130
However, an ever growing number of investors
prefer personalised investment packages – a
trend which reflects the increasing competence
of customers and their desire for a wide range of
options. The demand for unit-linked life insurance in Austria doubled from 1997 to 1998. New
business in unit-linked life insurance amounted
to more than ATS 2.4 billion in the previous year.
In keeping with the growing demand for unitlinked life insurance, Wiener Städtische launched
United Funds of Success®, an absolute novelty
on the Austrian market. This product combines
the earning potential of 36 first-rate investment
funds with a unique insurance protection in case
of death and affords a high degree of flexibility to
meet the customers’ wishes. Sales service is provided by specially trained field staff who work out
a tailor-made investment profile for the customer.
As regards the motor vehicle insurance line, the
forecast of the Austrian Insurance Association is
quite different. In the past few years, the growing
120
110
100
90
1998
1999
2000
2001
2002
third-party liability
•• Life
•• Motor
Health
Total
• Property/Casualty
To support its new customer business, Wiener
Städtische has acquired a 50 % stake in Bank
Austria Kfz Leasing GmbH. Under the company
name “Bank Austria Wiener Städtische Kfz
Leasing GmbH”, the complete range of motor
vehicle leasing finance is offered. This market
player is an important part of Wiener Städtische’s
marketing and sales activities. In addition, sales
finance is intended to be stimulated by means of
existing business relationships with domestic car
dealers.
98 37
2003
As regards the affiliated companies in the Czech
Republic, Slovakia, Poland and Hungary, the aim
for 1999 is to further expand their market position. This growth is to be achieved by introducing
and selling property insurance for private households as well as life insurance. The structure of
the premium volume generated by the foreign
subsidiaries will and must evolve away from the
commercial and industrial business towards the
private customer business.
Wiener Städtische also plans to make its highquality life-insurance products available to
private customers in northern Italy.
The merger of the two Kooperativa companies in
the Czech Republic owned by Wiener Städtische,
which will be implemented in 1999, is intended to
strengthen the market position of these two subsidiaries and, by making use of the effects of synergy, increase their competitiveness in the long term.
In this environment, Wiener Städtische Allgemeine Versicherung AG expects premiums to
develop quite differently in the individual lines in
1999. Growth of around 2 % in the property and
casualty line should be achieved through the
in ATS billion
consumer business in the personal lines and the
industrial-risks business. To ensure that these
objectives are met, the level of premiums in
motor vehicle insurance must be stabilised. In
health insurance, too, an increase in premiums of
around 2 % should be possible by soliciting new
business.
In life/pension insurance, which will again provide
the greatest impetus for growth in 1999, Wiener
Städtische has set its sights high. The aim is to
raise the planned new business from policies
with ongoing premium payments by ATS 100 million or 20 %, as compared to around ATS 500 million in 1998.
Based on these assumptions, the premiums
earned in direct business are expected to amount
to around ATS 17.3 billion (+3 %) in 1999, although the performance of new products such as
United Funds of Success® cannot yet be fully
assessed.
As a result of new investments and the restructuring of the portfolio, total investments will rise
from ATS 80 billion to ATS 85 billion. The equities
share will be increased to up to 8 % of total capital investments, whereas loans will continue to
decrease as a result of the market situation.
Solvency
Given the volatility of the financial markets it
is not possible at present to make a realistic
forecast of the financial result and, thus, of the
year-end result.
10
8
6
4
2
0
1993
1994
1995
1996
1997
1998
• Eligible equity capital • Prescribed equity capital
38 98
Proposal for the distribution of profits
In 1998, Wiener Städtische Allgemeine Versicherung AG reported a balance sheet profit of
ATS 285,280,684.83. The following distribution
of profits will be proposed to the annual
shareholders’
meeting
with
a
par
of
ATS 1,098,680,000.00. The total dividend to be distributed on ordinary shares is ATS 219,736,000.00.
A 30 % dividend will be paid on the preference
shares of Wiener Städtische Allgemeine Versicherung AG with a par value of ATS
135,000,000.00. A bonus of 2 % will be added.
The total dividend to be distributed on preference shares is ATS 43,200,000.00. The remaining
balance sheet profit for the 1997 financial year in
the amount of ATS 22,344,684.83 shall be carried
forward.
The Management Board:
Dkfm. Dr. Sellitsch
Dr. Geyer
Dkfm. Fink
Dr. Lauer
Jaindl
Dkfm. Raumauf
Vienna, May 1999
98 39
Report of the
Supervisory Board
The Supervisory Board has received the annual
accounts for 1998 plus notes and the status
report from the Management Board, and has inspected and thoroughly examined them. As a
result of this examination the Supervisory Board
resolved unanimously to approve the annual
account prepared by the Management Board and
to agree with the proposal of the Management
Board for the distribution of profits.
Thus the annual accounts 1998 have been
established.
The Supervisory Board further reports that it
took the opportunity, both as a whole and from
case to case by its chairman and his deputy, to
examine the conduct of business by the
Management Board. Repeated discussions with
the members of the Management Board, who
furnished exhaustive explanations and proof of
the conduct of business with the help of books
and records, also served this purpose.
In 1998, an annual shareholders’ meeting as well
as five meetings of the Supervisory Board were
held.
The Supervisory Board further informs the shareholders’ meeting that the annual accounts for
1998 and the status report were audited by the
auditors KPMG Austria WirtschaftsprüfungsGesellschaft m.b.H., that the auditors’ report
was received, inspected and discussed by the
Supervisory Board, and that, in accordance with
its final results, the audit did not give rise to any
objections. The Supervisory Board for its part
declares that it has nothing to add to the auditors’ report.
The Supervisory Board therefore
moves
that the shareholders’ meeting resolve on the distribution of profits following the proposal of the
Management Board and grant the members of the Management Board and of the Supervisory Board
relief of their responsibility.
Vienna, in May 1999
The Supervisory Board:
Samstag
(Chairman)
98 41
Annual Accounts
Balance sheet as of December 31, 1998
Assets
Property & Casualty ATS
Health ATS
A. Intangible assets
24,389,163.00
I. Other intangible assets
B. Tangible Assets
2,762,639,528.28
I. Land and buildings
II. Assets in affiliated companies
1. Shares in affiliated companies
2. Loans to affiliated companies
3. Participating interests
2,327,939,476.12
215,849,862.00
2,230,978,775.55
535,458,132.80
4. Debt securities issued by and loans to companies with which the
insurance company is linked by virtue of a participating interest
98,611,338.00
4,873,379,451.67
201,500,006.00
III. Other financial investments
1. Shares and other variable yield securities
4,821,923,752.19
1,311,088,185.49
2. Debt securities and other fixed income securities
1,730,263,795.23
1,079,380,684.23
3. Loans guaranteed by mortgages
2,564,711,017.00
944,896,851.00
4. Loans on policies
5. Other loans
6. Deposits with credit institutions
411,403,117.00
31,591,594.01
1,343,015,704.00
9,559,893,275.43
0.00
26,149,289.61
IV. Deposits with ceding companies
17,222,061,544.99
Sum total tangible assets
C. Investments for the benefit of life-assurance policyholders who
bear the investment risks
D. Debtors
I. Debtors arising out of direct insurance operations
1. Policyholders
439,113,850.46
2. Intermediaries
58,188,551.00
3. Insurance companies
99,786,444.91
II. Debtors arising out of reinsurance operations
III. Other debtors
Sum total debtors
E. Accrued interest and rent
78,624,363.75
597,088,846.37
849,110,432.36
662,841,559.33
2,109,040,838.06
113,431,549.59
F. Other assets
I. Tangible assets (other than land and buildings) and stocks
311,487,542.42
II. Cash at credit institutions and cash in hand
603,541,339.33
III. Other assets
175,822,153.64
Sum total other assets
1,090,851,035.39
G. Prepayments and accrued income
I. Provision deficiency acc. to Art. X, Sec. 3 & 4 RLG
300,833,600.00
II. Other prepayments and accrued income
182,203,850.66
Sum total prepayments and accrued income
483,037,450.66
H. Offset items between divisions
Balance sheet total
44 98
-469,041.89
21,042,342,539.80
2,542,387.75
Life ATS
Total 1998 ATS
1997 ATS
16,181,280.00
417,569.00
40,988,012.00
33,982,793.00
1,787,235,200.77
4,468,557,405.22
9,018,432,134.27
7,753,838,995.97
736,958,138.80
492,923,936.00
2,820,863,412.12
215,849,862.00
81,400,000.00
2,180,012,308.80
4,946,449,217.15
4,350,383,177.63
1,916,682,669.31
4,589,618,914.11
2,216,794,013.31
1,693,780,957.41
10,199,956,504.58
2,906,384,183.40
14,709,662,065.33
20,842,674,003.01
9,848,895,806.08
14,389,345,802.56
17,198,990,282.02
21,336,304,899.62
1,250,617,283.00
4,760,225,151.00
4,454,418,723.00
201,385,233.00
201,385,233.00
153,664,958.00
15,127,978,470.00
16,882,397,291.00
18,076,184,799.00
4,678,381,424.72
45,678,988,853.89
59,917,263,554.04
320,944,848.19
2,323,044.00
959,649,094.81
988,121,428.42
932,151,489.47
7,204,897,808.29
55,696,814,268.03
80,123,773,621.31
71,908,352,837.77
31,083,793.27
31,083,793.27
13,571,803.87
81,166,751.50
31,591,594.01
199,178,516.43
716,916,730.64
840,861.47
59,029,412.47
5,380,249.10
205,399,627.00
107,709,081.76
647,661,982.31
43,256,451.56
883,655,224.87
142,237,929.38
4,173,339.00
34,449,553.52
887,733,324.88
386,856,939.42
161,048,510.50
160,416,181.83
984,306,251.66
2,365,219,823.58
246,388,601.00
400,265,362.35
2,755,694,801.41
3,585,233,126.25
69,946,722.38
1,257,893,216.87
1,441,271,488.84
1,594,706,403.22
7,149,440.00
17,334,572.80
335,971,555.22
291,128,535.33
56,651,174.37
187,814,352.88
848,006,866.58
1,821,936,654.04
47,327,333.00
31,996,688.85
255,146,175.49
132,064,742.03
111,127,947.37
237,145,614.53
1,439,124,597.29
2,245,129,931.40
67,475,899.00
107,802,085.00
476,111,584.00
542,455,903.00
4,347,009.00
186,550,859.66
169,753,918.26
67,475,899.00
112,149,094.00
662,662,443.66
712,209,821.26
5,279,265.60
- 4,810,223.71
0.00
0.00
7,721,297,523.64
57,730,958,694.34
86,494,598,757.78
80,093,186,716.77
98 45
Balance sheet as of December 31, 1998
Liabilities
Property & Casualty
ATS
Health
ATS
A. Capital and reserves
I. Share capital
616,840,000.00
1. Nominal amount
II. Share premium account
1,783,481,875.00
1. Restricted
III. Revenue reserves
953,795,167.00
1. Voluntary reserves
102,367,072.45
IV. Profit account
38,649,166.23
derived from profit brought forward
3,456,484,114.45
Sum total capital and reserves
B. Tax allowed reserves
I. Risk reserve acc. to § 73a VAG
291,894,453.00
II. Reserve from additional capital allowances
739,413,917.01
306,504,199.00
III. Other tax allowed reserves
1,337,812,569.01
Sum total reserves
C. Technical provisons
I.
Unearned premiums
1. Gross amount
2. Reinsurance amount
7,154,534.00
1,052,475,237.10
- 35,083,902.99
1,017,391,334.11
0.00
II. Actuarial provision
5,053,067,420.00
1. Gross amount
- 8,733,112.00
2. Reinsurance amount
III. Claims outstanding
1. Gross amount
2. Reinsurance amount
530,590,513.00
8,981,532,934.93
- 567,265,984.20
8,414,266,950.73
- 3,169,031.00
IV. Provisions for bonuses and rebates
1. Gross amount
2. Reinsurance amount
109,430,184.00
0.00
119,000,000.00
109,430,184.00
0.00
V. Provision for profit participation
1. Gross amount
2. Reinsurance amount
190,747,993.36
0.00
49,552,388.58
190,747,993.36
0.00
995,995,178.00
VI. Equalisation provision
VII. Other technical provisions
1. Gross amount
2. Reinsurance amount
Sum total technical provisions
175,444,159.81
- 8,361,635.04
5,878,828.00
167,082,524.77
10,894,914,164.97
D. Technical provisions for life-assurance policies where the
investment risk is borne by the policyholders
carried forward
46 98
15,689,210,848.43
0.00
Life
Total 1998
ATS
1997
ATS
ATS
246,736,000.00
370,104,000.00
1,233,680,000.00
1,233,680,000.00
605,023,952.80
1,368,278,973.20
3,756,784,801.00
3,756,784,801.00
83,309,103.00
766,640,033.00
1,803,744,303.00
1,495,702,845.00
- 82,965,426.20
265,879,038.58
285,280,684.83
277,428,090.44
- 28,036,474.44
6,579,398.65
17,192,090.44
47,612,676.06
852,103,629.60
2,770,902,044.78
7,079,489,788.83
6,763,595,736.44
131,089,674.00
246,363,106.00
669,347,233.00
661,224,077.00
153,541,723.24
998,279,314.12
1,891,234,954.37
1,608,125,373.10
28,342,434.00
108,523,768.00
443,370,401.00
576,654,427.00
312,973,831.24
1,353,166,188.12
3,003,952,588.37
2,846,003,877.10
1,722,934,453.77
663,304,682.67
7,154,534.00
-13,500,848.53
649,803,834.14
-503,071,129.38
47,773,818,768.76
-290,800.00
-511,804,241.38
160,893,141.00
-570,725,815.20
52,818,153,076.76
0.00
-300,000.00
2,036,446,659.71
0.00
211,504,214.00
4,335,000.00
-8,361,635.04
0.00
2,111,537,091.65
2,276,747,041.65
-260,000.00
995,995,178.00
866,622,960.00
185,657,987.81
4,335,000.00
5,878,828.00
-300,000.00
-743,695,431.64
228,430,184.00
2,277,047,041.65
2,036,746,659.71
49,552,388.58
-485,862,975.97
9,249,423,467.90
9,102,581,573.73
228,430,184.00
119,000,000.00
-41,272,759.56
49,848,580,064.56
9,673,307,388.93
161,183,941.00
527,421,482.00
1,738,367,924.14
1,674,349,702.25
53,329,957,318.14
48,276,889,898.14
5,044,334,308.00
-48,584,751.52
100,183,528.81
177,296,352.77
-5,916,388.04
67,273,553,109.16
62,849,211,695.85
5,753,341,540.58
50,625,297,403.61
31,083,793.27
31,083,793.27
13,571,803.87
6,918,419,001.42
54,780,449,429.78
77,388,079,279.63
72,472,383,113.26
98 47
Balance sheet as of December 31, 1998
Property & Casualty ATS
Liabilities
Health ATS
15,689,210,848.43
brought forward
E. Provisions for other risks and charges
591,477,670.03
I. Provisions for termination or severance payments
2,123,435,166.69
II. Provisions for pensions
19,289,261.00
III. Provisions for taxation
360,606,180.15
IV. Other provisions
3,094,808,277.87
Sum total provisions for other risks and charges
1,242,266.90
F. Deposits received from reinsurers
G. Creditors
I. Creditors arising out of direct insurance operations
1. Policyholders
427,094,173.63
2. Iintermediaries
163,855,480.32
3. Insurance companies
57,018,934.16
15,244,289.67
606,193,943.62
II. Creditors arising out of reinsurance operations
100,677,628.48
III. Debentures (not including supplementary capital)
707,057,700.00
IV. Amounts owed to credit institutions
149,807,580.98
V. Other creditors
683,428,715.43
Sum total creditors
2,247,165,568.51
9,915,578.09
H. Accruals and deferred income
Balance sheet total
The amount of ATS 47,773,818,768.76 reported
under the item “actuarial provision” for life insurance as of December 31, 1998 consists of
the actuarial provision for direct business
totalling
AT S
47,333,812,149.00
and
ATS 943,077,749.14 in reinsurance business
assumed, minus the reinsurers’ share, which
totals ATS 503,071,129.38. The amount of
ATS 649,803,834.14 reported under “provision
for unearned premiums” consists of the
unearned
premiums
amounting
to
ATS 589,588,406.00 from direct business and
ATS 73,716,276.67 from reinsurance business
assumed, minus the reinsurers’ share, which
totals ATS 13,500,848.53. I confirm that the
48 98
2,216,882.00
21,042,342,539.80
actuarial provision and the provision for unearned premiums from direct business were calculated in accordance with the applicable regulations and actuarial principles.
Vienna, March 29, 1999
Jaindl m.p.
Life ATS
Total 1998 ATS
1997 ATS
6,918,419,001.42
54,780,449,429.78
77,388,079,279.63
72,472,383,113.26
130,688,639.56
277,728,106.41
999,894,416.00
941,174,189.00
474,607,419.38
885,257,033.93
3,483,299,620.00
3,385,140,863.00
161,388,360.00
180,677,621.00
326,515,898.00
72,084,211.26
193,221,603.21
625,911,994.62
512,230,119.06
677,380,270.20
1,517,595,103.55
5,289,783,651.62
5,165,061,069.06
2,323,044.00
505,271,202.91
508,836,513.81
481,152,690.94
59,235,816.16
151,458,162.03
635,571,269.82
2,866,865.34
166,722,345.66
1,179,583.93
155,504,611.30
13,331,615.04
18,640,755.60
540,186,666,61
165,320,874.06
820,934,371.08
18,734,375.84
114,009,243.52
48,195,544.47
707,057,700.00
149,807,580.98
41,334,089.19
59,610,149.33
706,109,665.11
1,449,148,529.87
1,029,831,759.35
118,845,965.49
874,945,891.45
3,240,957,425.45
1,843,603,309.52
4,329,242.53
52,697,066.65
66,941,887.27
130,986,533.99
7,721,297,523.64
57,730,958,694.34
86,494,598,757.78
80,093,186,716.77
The amount of ATS 5,044,334,308.00 reported
under the item “actuarial provision” for health
insurance as of December 31, 1997 consists of
the actuarial provision for direct business in the
amount of ATS 5,053,067,420.00, minus the reinsurers’ share, which totals ATS 8.733,112.00.
The amount of ATS 7,154,534.00 reported under
“provision for unearned premiums” consists of
the unearned premiums from direct business.
I confirm that the actuarial provision and the pro-
I confirm that the investment of premium reserve
stock complies with the applicable regulations.
vision for unearned premiums from direct business were calculated in accordance with the
applicable regulations and actuarial principles.
Vienna, March 29, 1999
Jaindl m.p.
Vienna, March 29, 1999
Freitag m.p.
98 49
Profit and Loss Account for the financial year beginning January 1 and ending December 31, 1998
Property & Casualty
1998 ATS
1997 ATS
Technical Account:
1. Earned premiums
Premiums written
Gross
Outward reinsurance premiums
8,388,637,538.40
-1,114,431,525.29
7,274,206,013.11
7,120,881,941.75
23,155,314.16
-26,599,524.12
7,297,361,327.27
7,094,282,417.63
Change in premium accruals
Gross
Reinsurer’s share
17,719,476.82
5,435,837.34
Sum total premiums
2. Allocated investment return
3. Other technical income
4,580,568.34
2,526,995.34
24,065,219.42
29,889,967.48
4,497,948,061.12
4,317,333,280.13
4. Claims incurred
Claims paid
Gross
Reinsurer’s share
5,545,850,748.94
-1,047,902,687.82
Change in the provisions for claims
Gross
465,573,590.81
Reinsurer’s share
-35,876,981.73
Sum total claims
429,696,609.08
919,253,378.64
-4,927,644,670.20
-5,236,586,658.77
5. Increase in other technical provisions
Other technical provisions
Gross
118,659,438.00
118,798,188.00
7,990,688.00
-118,798,188.00
-7,990,688.00
6. Expenses for bonuses and rebates
-40,667,761.00
-48,529,546.00
7. Expenses for profit participation
-33,000,000.00
-25,000,000.00
1,920,830,988.12
1,841,224,151.66
Reinsurer’s share
Sum total provision increase
138,750.00
8. Operating expenses
Acquisition costs
Administrative expenses
Reinsurance commissions and profit participating
Sum total operating expenses
9. Other technical charges
10. Change in the equalisation provision
Technical result (carried forward)
50 98
714,003,958.65
680,116,022.42
-298,355,863.10
-517,047,504.94
-2,336,479,083.67
-2,004,292,669.14
-191,250,678.52
-242,357,749.69
-129,372,218.00
214,917,390.00
-451,205,484.36
-223,140,541.15
Property & Casualty
Technical result (brought forward)
1998 ATS
1997 ATS
- 451,205,484.36
- 223,140,541.15
Income from participating interests
133,177,885.47
114,458,892.11
Income from land and buildings
116,192,306.44
86,862,478.97
Income from other investments
485,709,212.06
543,748,722.37
Gains from the realisation of investments
611,123,364.65
394,816,544.29
Non-technical Account:
1. Investment income
Other income from investments and interest yield
Sum total investment income
62,973,523.40
63,888,086.59
1,409,176,292.02
1,203,774,724.33
2. Investment charges
Investment management charges
42,416,609.40
42,343,072.92
Value adjustments on investments
546,954,390.01
373,778,434.56
47,762,161.61
2,418,490.03
2,347,147.98
525,000.00
Interest charges
Losses on the realisation of investments
Other charges from investments
154,191,694.44
15,937,324.90
Sum total investment charges
-793,672,003.44
- 435,002,322.41
- 4,580,568.34
- 2,526,995.34
3,580,352.47
6,057,538.45
3. Allocated investment return transferred to the technical account
4. Other non-technical income
5. Other non-technical charges
Profit on ordinary activities Property & Casualty
- 4,871,857.58
-1,660,491.30
158,426,730.77
547,501,912.58
98 51
Profit and Loss Account for the financial year beginning January 1 and ending December 31, 1998
Health Insurance
1998 ATS
1997 ATS
Technical Account:
1. Earned premiums
Premiums written
Gross
Outward reinsurance premiums
3,201,364,973.20
- 10,520,397.00
3,190,844,576.20
3,170,359,989.89
Change in premium accruals
Gross
Reinsurer’s share
- 1,324,764.00
0.00
Sum total premiums
2. Allocated investment return
3. Other technical income
- 1,324,764.00
- 2,662,121.50
3,189,519,812.20
3,167,697,868.39
390,701,581.86
345,377,522.90
1,044,243.81
2,433,543.96
2,510,839,729.69
2,460,651,704.49
4. Expenses for claims incurred
Claims paid
Gross
Reinsurer’s share
2,524,857,722.69
- 14,017,993.00
Change in the provisions for claims
Gross
10,871,201.00
10,501,627.00
- 7,099,093.00
- 2,521,341,356.69
- 2,453,552,611.49
- 467,583,431.00
- 488,717,358.00
- 113,157,668.70
- 116,657,967.30
Acquisition costs
280,625,476.21
262,129,746.18
Administrative expenses
173,269,506.52
181,866,186.82
Reinsurer’s share
Sum total claims
- 369,574.00
5. Increase in other technical provisions
Sum total provisions increase
6. Expenses for bonuses and rebates
7. Operating expenses
-1,426,632.00
-1,115,898.00
- 452,468,350.73
- 442,880,035.00
8. Other technical charges
- 31,639,799.88
- 41,181,855.99
Technical result (carried forward)
- 4,924,969.13
- 27,480,892.53
Reinsurance commission and profit participation
Sum total operating expenses
52 98
Health Insurance
1998 ATS
Technical result (brought forward)
-4,924,969.13
1997 ATS
-27,480,892.53
Non-technical Account:
1. Investment income
Income from participating interests
12,977,591.54
6,934,876.34
Income from land and buildings
73,371,543.27
69,904,581.88
Income from other investments
324,654,100.71
325,085,601.12
Gains on the realisation of investments
182,093,723.11
40,681,510.45
Other income from investments and interest yield
Sum total investment income
25,728,395.65
22,463,396.16
618,825,354.28
465,069,965.95
2. Investment charges
Investment management charges
13,895,285.52
12,751,539.14
Value adjustments on investments
195,554,875.66
105,721,823.90
135,333.00
0.00
Interest charges
Other charges from investments
Sum total investment charges
3. Allocated investment return transferred to the technical account
4. Other non-technical income
5. Other non-technical charges
Profit on ordinary activities Health
18,538,278.24
1,219,080.01
-228,123,772.42
-119,692,443.05
-390,701,581.86
-345,377,522.90
42,624.05
9,600.00
-1,255.62
-3,512.36
-4,883,600.70
-27,474,804.89
98 53
Profit and Loss Account for the financial year beginning January 1 and ending December 31, 1998
Life Insurance
1998 ATS
1997 ATS
Technical Account:
1. Earned premiums
Premiums written
Gross
Outward reinsurance premiums
6,111,626,851.91
-93,513,740.86
6,018,113,111.05
5,518,539,826.21
Change in premium accruals
Gross
Reinsurer’s share
-9,160,330.85
2,262,002.97
Sum total premiums
2. Allocated investment return
- 6,898,327.88
26,569,218.52
6,011,214,783.17
5,545,109,044.73
4,044,539,729.72
3,480,278,716.56
3. Non realised gains out of investments acc. to
position C. of the assets
4. Other technical income
1,241,546.22
791,666.20
2,817,392.43
1,867,073.26
4,927,882,588.29
4,802,395,405.51
-3,838,665.00
-4,924,043,923.29
-4,847,631,378.33
1,272,590,361.92
863,060,191.70
5. Claims incurred
Claims paid
Gross
Reinsurer’s share
4,975,156,782.47
-47,274,194.18
Change in the provisions for claims
Gross
Reinsurer’s share
- 3,926,665.00
88,000.00
Sum total claims
45,235,972.82
6. Increase in other technical provisions
Life assurance
Gross
Reinsurer’s share
1,304,527,528.54
- 31,937,166.62
Other technical provisions
Gross
Reinsurer’s share
- 38,500,000.00
0.00
Sum total provision increase
- 38,500,000.00
38,500,000.00
-1,234,090,361.92
-901,560,191.70
7. Expenses for profit participation
Gross
1,926,300,000.00
1,926,000,000.00
1,753,000,000.00
-1,926,000,000.00
-1,753,000,000.00
Acquisition costs
928,129,599.33
851,420,960.18
Administrative expenses
358,664,126.14
362,890,715.61
Reinsurance commission and profit participation
-13,984,964.46
-11,430,080.65
-1,272,808,761.01
-1,202,881,595.14
Reinsurer’s share
Sum total profit sharing
- 300,000.00
8. Operating expenses
Sum total operating expenses
9. Non realised losses out of investments acc. to
position C. of the assets
-78,489.28
-161,812.24
10. Other technical charges
-73,041,331.08
-92,609,264.95
629,750,584.96
230,202,258.39
Technical result (carried forward)
54 98
Life Insurance
1998 ATS
Technical result (brought forward)
629,750,584.96
230,202,258.39
48,602,642.80
41,528,890.00
1997 ATS
Non-technical Account:
1. Investment income
Income from participating interests
Income from land and buildings
236,864,676.82
261,872,277.32
Income from other investments
3,037,477,431.79
3,029,463,130.50
Gains from the realisation of investments
1,292,837,904.88
807,690,031.77
102,929,619.90
43,151,642.81
4,718,712,276.19
4,183,705,972.40
Other income from investments and interest yield
Sum total investment income
2. Investment charges
Investment management charges
40,716,641.69
36,070,866.14
Value adjustments on investments
553,030,049.05
649,721,946.92
0.00
16,939,295.89
Interest charges
Losses on the realisation of investments
Other charges from investments
Sum total investment charges
6,334,098.02
0.00
74,091,757.71
695,146.89
-674,172,546.47
-703,427,255.84
-4,044,539,729.72
-3,480,278,716.56
4. Other non-technical income
912,664.68
49,924.53
5. Other non-technical charges
-70,430.61
-3,691.38
630,592,819.03
230,248,491.54
3. Allocated investment return transferred to the technical account
Profit on ordinary activities Life
98 55
Profit and Loss Account for the financial year beginning January 1 and ending December 31, 1998
Property & Casualty + Health + Life = Total
1998 ATS
1997 ATS
173,620,131.47
-20,419,175.29
Income from participating interests
194,758,119.81
162,922,658.45
Income from land and buildings
426,428,526.53
418,639,338.17
Income from other investments
3,847,840,744.56
3,898,297,453.99
Gains from the realisation of investments
2,086,054,992.64
1,243,188,086.51
Technical result (brought forward)
Non-technical Account:
1. Investment and interest income
191,631,538.95
129,503,125.56
6,746,713,922.49
5,852,550,662.68
Investment management charges
97,028,536.61
91,165,478.20
Value adjustment on investments
1,295,539,314.72
1,129,222,205.38
47,897,494.61
19,357,785.92
Other income from investments and interest yield
Sum total investment income
2. Investment charges
Interest charges
Losses on the realisation of investments
Other charges from investments
Sum total investment charges
3. Allocated investment return transferred to the technical account
8,681,246.00
525,000.00
246,821,730.39
17,851,551.80
-1,695,968,322.33
-1,258,122,021.30
-4,439,821,879.92
-3,828,183,234.80
4. Other non-technical income
4,535,641.20
6,117,062.98
5. Other non-technical charges
-4,943,543.81
-1,667,695.04
6. Profit on ordinary activities
784,135,949.10
750,275,599.23
7. Taxes on profit and income
-112,643,941.44
-334,683,796.02
8. Profit for the financial year
671,492,007.66
415,591,803.21
9. Release of reserve
46,738,357.14
113,421,091.60
Release of other tax allowed reserves
264,959,351.00
258,066,165.00
Sum total release of reserves
311,697,708.14
371,487,256.60
Release of reserves from additional capital allowances
10. Transfer to reserves
Transfer to risk reserve acc. § 73a VAG
Transfer to reserves from additional capital allowances
Transfer to other tax allowed reserves
Transfer to voluntary reserves
Sum total transfer to reserves
11. Profit for the financial year
12. Profit brought forward
Total profit
56 98
99
8,123,156.00
6,474,362.00
329,847,938.41
119,492,405.43
68,888,569.00
75,907,716.00
308,241,458.00
355,389,162.00
-715,101,121.41
-557,263,645.43
268,088,594.39
229,815,414.38
17,192,090.44
47,612,676.06
285,280,684.83
277,428,090.44
Motor Third-Party Liability Insurance
1998 ATS
1997 ATS
Separate Earning Statement,
direct domestic business:
1. Earned premiums
Premiums written
Gross
Outward reinsurance premiums
2,060,780,069.00
-23,663,264.47
2,037,116,804.53
1,800,403,069.13
Change in premium accruals
Gross
9,483,693.00
9,646,318.38
- 6,959,328.59
2,046,763,122.91
1,793,443,740.54
1,673,199.00
1,783,630.00
1,449,853,465.30
1,327,282,690.90
97,969,815.05
200,892,619.95
- 1,547,823,280.35
- 1,528,175,310.85
- 1,338,829.00
- 2,565,358.00
Acquisition costs
410,658,284.97
387,682,858.26
Administrative expenses
222,626,434.31
214,117,456.00
- 633,356.09
- 226,506,991.27
- 632,651,363.19
- 375,293,322.99
- 49,779,362.00
- 69,038,370.00
Reinsurer’s share
162,625.38
Sum total premiums
2. Other technical income
3. Claims incurred
Claims paid
Gross
Reinsurer’s share
1,450,570,625.00
-717,159.70
Change in the provisions for claims
Gross
108,667,985.00
Reinsurer’s share
-10,698,169.95
Sum total claims
4. Expenses for bonuses and rebates
5. Operating expenses
Reinsurance commission and profit participation
Sum total operating expenses
6. Other technical charges
7. Change in the equalisation provision
Technical result
- 51,909,496.00
108,186,542.00
- 235,066,008.63
- 71,658,449.30
98 57
Notes
I. General Information on
Accounting and Valuation
Methods
The annual accounts have been drawn up in
accordance with the principles of proper
accounting and the general requirement to
present a true and fair view of the company's
assets as well as of its financial and earnings
situation.
The principle of conservative accounting was
observed by reporting only the profits that had
been realised by the balance sheet date and duly
including all foreseeable risks and imminent losses in the balance sheet.
Amounts shown are basically quoted in ATS
thousand. 1997 figures are either identified as
such or put in parentheses.
II. Accounting and Valuation
Principles
Land is valued at acquisition cost and buildings
at acquisition or production cost, reduced by
scheduled depreciation. Expenditure on repairing
or overhauling residential buildings rented to individuals unconnected to the company is spread,
as a rule, over 10 years.
Investments for the benefit of life-assurance
policyholders who bear the investment risk,
which were valued at current value, have been
made into the following funds: Vorsorge
Rentenfonds (bond fund managed by Ringturm
Kapitalanlagegesellschaft, Vienna), DekaRentInternational (DEKA-Kapitalanlagegesellschaft,
Germany), FONDIS (ADIG-Investmentgesellschaft, Germany), as well as Fidelity Growth,
Fidelity Moderate and Fidelity Global (Fidelity
Investments Luxembourg S.A., Luxembourg).
All other securities, including shares in affiliated companies as well as participating interests, are valued strictley according to cost or
market, whichever is lower; write-downs for the
financial year amounted to ATS thousand
904,770 (ATS thousand 840,071).
Loans guaranteed by mortgages and other
loans, including loans to affiliated companies and
companies with which the insurance company is
linked by virtue of a participating interest, are generally valued at the nominal value outstanding. The
discount, if any, is distributed over the term of the
loan and reported under liabilities as deferred items.
Adequate itemised allowances have been made
for doubtful debtors; these allowances were
deducted from the nominal amounts.
Tangible assets (excluding land and buildings)
are valued at acquisition cost, minus scheduled
depreciation. Low value assets are completely
written off in the year of entry.
No additions were made to Assets in the financial year.
Unearned premiums in property & casualty
insurance are essentially prorated temporally,
whereby a deduction was made for costs in the
amount of ATS thousand 157,313 (ATS thousand 161,350). For life insurance, the provision
for unearned premiums is established at the level
stipulated in the company's business plan; here,
no deduction was made for costs. Unearned premiums in health insurance are prorated temporally, without any deduction for costs.
99 59
The actuarial provision is computed in accordance with the formulae prescribed in the approved business plans, applying the accounting
principles laid down in the business plan.
For the claims reported up to the balance sheet
date, the provision for outstanding insurance
claims in direct property & casualty and life
insurance business is determined through itemised valuation of the outstanding claims and
supplemented by a general surplus allowance for
unforeseeable major claims.
IBNR claims are provided at a flat rate, based on
past experience.
The provisions for outstanding insurance claims
in health insurance are assigned general percentages for the payments made for insurance claims
in the financial year. The percentages remained
unchanged over the previous year.
In assumed business, the provisions for outstanding insurance claims are primarily based on
information supplied by the original insurer at the
balance sheet date(s) on December 31, 1997,
and/or December 31, 1998. The reported
amounts were supplemented wherever this was
considered necessary in light of past experience.
The equalisation provision is determined
according to the regulations of the Ordinance
issued by the Federal Minister of Finance
(Federal Law Gazette No. 545/1991, as amended
by Federal Law Gazette II No. 66/1997).
The provision for profit participation contains
the amounts which were set aside for refunding
premiums to policyholders, as provided for in the
business plans and the articles of incorporation,
and had not yet been claimed by the balance
sheet date.
The provisions for severance payments
amount to 50 % of the projected severance
60 99
pay requirements at the balance sheet date,
as provided for by the law or the collective
bargaining agreement; for employees who have
reached the age of 50 at the balance sheet
date, the provisions are calculated at 60 %. At
the balance sheet date on December 31, 1998,
actuarial methods were used to calculate the
cover capital for severance pay requirements
(an assumed interest rate of 6 % and the
standard entry age method were applied);
this resulted in ATS thousand 1,130,457
(ATS thousand 1,103,794), which equals
62.5 % of the projected severance pay requirements.
The provisions reported in the balance sheet are
ATS thousand 130,563 (ATS thousand 162,620)
below the provision requirement resulting from
actuarial calculations.
The ATS thousand 3,483,300 (ATS thousand
3,385,141) in provisions for pensions reported
in the balance sheet as of December 31, 1998,
comprise the provisions for pensions of ATS
thousand 2,980,593 (ATS thousand 2,816,090),
calculated in accordance with the provisions of
sec. 14 in connection with sec. 116 of the
Austrian “EStG” (Income Tax Act), a taxed
amount of ATS thousand 26,595 (ATS thousand
26,595), and a deficiency of ATS thousand
476,111 (ATS thousand 542,456) as per Art. X,
para. 3 and para. 4 of the Austrian “RLG”
(Financial Reporting Act), which is separately
reported under Assets in “deferred items”. The
deficiency declined in 1998 by ATS thousand 66,345 (ATS thousand 69,481).
The provisions for pensions are ATS thousand
189,375 (ATS thousand 245,223) below the sum
total of the cover capital for expected future pension benefits, calculated at an assumed interest
rate of 6 % (Ettl-Pagler method) and applying the
standard entry age method, and the cash value of
liquid pensions totalling ATS thousand 3,007,188
(ATS thousand 3,630,364).
Items in the annual accounts stated in foreign
currencies are converted into Austrian schillings
at the mean rate of foreign exchange at the
balance sheet date, respectively converted by
the fixed euro rate.
In life as well as property & casualty insurance, the
underwriting items for assumed reinsurance
business and the associated retrocession charges
are in some cases deferred by one year in the
annual accounts.
The following notes are made with regard to contingent liabilities and guarantees not shown in
the balance sheet: There is a letter of comfort in
favour of Business Park Brunn Entwicklungs
GmbH in the amount of ATS thousand 32,000 (ATS
thousand 29,000) and a warranty of quality in
favour of APC-Geschäftscenter Betriebsgesellschaft m. b. H. in the amount of ATS thousand 13,000 (ATS thousand 0). Moreover, the company is jointly and severally liable for loans raised
by Country Inn VIC Hotelerrichtungs- und
Betriebsgesellschaft m.b.H. up to a total of ATS
thousand 143,000 (ATS thousand 143,000). Wiener
Städtische is liable for any borrowings by “THG”
Thermenzentrum Geinberg Errichtungs-GmbH
during the construction stage up to a total of ATS
thousand 43,000 (ATS thousand 43,000). For the
repayment of loan obligations of PFG Parkflächenbewirtschaftung GmbH there is a prorata
liability in the amount of ATS thousand 77,984 (ATS
0). Furthermore, Wiener Städtische is liable for loan
repayments of employees to “Spar- und
Vorschußkasse der Angestellten der ‘Wiener
Städtische Allgemeine Versicherung Aktiengesellschaft’ reg.Gen.m.b.H.” (Employees’ Savings
and Advance Disbursement Office) in the amount
of ATS thousand 2,570 (ATS thousand 3,233).
III. Explanation of Balance
Sheet Items
Intangible assets acquired from affiliated companies are included at a balance-sheet value of
ATS thousand 3,835 (ATS thousand 8,853).
As of December 31, 1998, the real estate value
of developed and undeveloped land amounted
to ATS thousand 2,070,295 (ATS thousand 1,819,974).
The balance-sheet value of land and buildings
used by Wiener Städtische itself amounted to
ATS thousand 1,077,545 (ATS thousand 1,110,706).
Other loans not covered by an insurance contract include the following: loans to the Republic
of Austria in the amount of ATS thousand
13,324,910 (ATS thousand 14,088,553), loans to
other public-law bodies corporate in the amount
of ATS thousand 1,891,004 (ATS thousand
1,922,893), and loans to other borrowers in the
amount of ATS thousand 1,666.483 (ATS thousand 2,064,739).
The current market value of investments,
excluding land and buildings, for which the
current market value will have to be reported
for the first time in the annual accounts 1999,
is as follows:
Items as per § 81 c para. 2
of the Austrian “VAG”
amounts in ATS thousand
Current
value as of
Dec. 31, 1998
Current
value as of
Dec. 31, 1997
Shares in affiliated companies
3,280,641
2,074,460
Loans to affiliated companies
215,850
81,400
Participating interests
5,398,465
4,964,127
Debt securities issued by and loans to
companies with which the insurance
company is linked by the virtue of a
participating interest
2,314,069
3,008,129
Shares and other variable
yield securities
21,903,706
10,849,250
Debt securities and other
fixed-income securities
18,248,429
22,540,903
4,760,225
4,454,419
Loans guaranteed by mortgage
Loans on policies
Other loans
Deposits with credit institutions
201,385
153,665
16,882,397
18,076,185
31,592
320,945
73,236,759
66,523,483
99 61
Shares or interests held in affiliated companies as
well as participating interests are valued at
market prices. Where no such prices are quoted,
they are valued at the higher of their acquisition
cost, less non-scheduled depreciation, if any, or
their proportionate capital resources as shown in
the most recent annual accounts.
Shares and other securities were valued at their
market prices or, in their absence, at the acquisition cost less non-scheduled depreciation, if any.
Other investments were valued at their nominal
value less non-scheduled depreciation, if any.
In health insurance, the actuarial provision
required in the different contract groups is computed in accordance with the principles laid
down in the business plan as approved by the
Insurance Supervisory Authority.
For individual insurance contracts, the actuarial
provision is always calculated on the basis of
each individual contract. This also applies to new
contracts within group insurance plans covered
by the 1994 amendment to the Austrian “Versicherungsvertragsgesetz” (Insurance Contract
Act). For the remaining contracts within the group
insurance plan, actuarial provisions are made on
an aggregate basis.
Actuarial provisions are always calculated using
the prospective method.
The method of calculating the actuarial provision
takes into account that in case of premature cancellation of a contract or the death of an insured
person, the actuarial provision made for the respective contract will be forfeited and fall to the
entire group of insured persons.
The actuarial provision has been calculated on
the actuarial basis of claims frequency which is
primarily inferred from an evaluation of claims
filed with Wiener Städtische. Death rates were
62 99
taken from the general Austrian General Mortality
Tables – Men 1949/51. In analogy to premium
calculation, the actuarial provision is generally
calculated on the basis of an assumed interest
rate of 3 % p.a.
In life insurance, the actuarial provision is
computed in accordance with the principles laid
down in the business plan as approved by the
Insurance Supervisory Authority or other principles of which the Insurance Supervisory Authority
has been informed.
The actuarial provision is calculated separately
for every individual contract, using almost exclusively the prospective method.
The most important probability tables used in this
context are: for whole-life insurance contracts
DM 24/26, ÖVM 80/82, ÖVM 90/92, and for
annuity contracts EROM/EROF; AVÖ, as revised
in 1996.
For the major part of the existing contracts, the
actuarial provision is calculated on the basis of
an assumed interest rate of 3 % p.a.; some of the
more recent tariffs are based on an assumed
interest rate of 4 % p.a.
Explanations of pension and severance pay
provisions are included in Section II of the Notes
to the Annual Accounts.
Other creditors comprise creditors for taxes
which amount to ATS thousand 319,584 (ATS
thousand 638,978), and creditors for social
security payments which amount to ATS thousand 49,577 (ATS thousand 48,077).
The following balance-sheet items are attributable to affiliated companies and companies in
which participating interests are held:
amounts in ATS thousand
Companies in which
participating interests are held
Affiliated companies
1997
1998
1998
1997
102,529
Deposits with credit institutions
0
0
2,500
Loans guaranteed by mortgage
862,649
817,041
60,862
62,881
62,216
68,052
572,847
492,257
1,867
16,986
577
184
Deposits with ceding companies
Debtors arising out of
direct insurance operations
Debtors arising out of
reinsurance operations
Other debtors
8,697
33,364
173,575
100,550
519,478
1,108,916
90,798
94,446
1,916
3,408
1,703
3,154
10,444
3,555
22,299
15,544
Creditors arising out of
direct insurance operations
Creditors arising out of
reinsurance operations
0
0
0
1,037
69,635
15,653
110,565
109,825
Amounts owed to credit institutions
Other creditors
The balance-sheet figures for intangible assets, land and buildings, and investments in affiliated
companies and companies in which participating interests are held are as follows:
Intangible
assets
Land and
buildings
Shares in
affiliated
companies 1)
Status as of
Dec. 31, 1997
33,983
7,753,839
1,693,781
81,400
4,350,383
Additions
24,627
1,085,076
1,158,283
95,000
1,061,202
45,000
Disposals
0
21,101
56,121
55,550
267,175
637,000
Retransfer
amounts in ATS thousand
Loans to
affiliated
companies
Participating
interests
Bonds from and loans
to companies in which
participating interests
are held
2,906,384
0
571,292
80,738
95,000
80,738
95,000
Depreciation and
amortisation
17,622
370,674
55,818
0
117,223
2,591
Status as of
Dec. 31, 1998
40,988
9,018,432
2,820,863
215,850
4,946,449
2,216,793
1) Includes disposals in the amount of ATS thousand 52,142 from the take-over of Seniorenresidenz Mirabell, Landstrasser Hauptstrasse 71 Realbesitz
GmbH, Vienna, PLAZA Hotel am Schottenring Betriebsgesellschaft m. b. H., Vienna, and Projektbau Ges. m. b. H., Salzburg.
99 63
IV. Notes to the Profit and Loss Account
The premiums written, earned premiums, expenses for claims incurred, operating expenses and
the reinsurance balance in property & casualty insurance are broken down as follows for 1998:
Gross
Premiums
written
Premiums
earned
Expenditure
on insurance
claims
Operating
expenses
Reinsurance
balance
amounts in ATS thousand
Direct business
Fire and fire business
interruption insurance
Household insurance
971,370
987,951
1,010,525
320,289
378,891
765,670
761,927
385,139
244,418
– 719
Other property insurance
1,026,568
1,019,562
677,816
339,790
– 25,904
Motor t.-p. liability insurance
2,060,780
2,070,264
1,559,239
633,285
– 11,452
951,713
944,002
707,642
282,609
– 11,734
Other motor vehicle insurance
Casualty insurance
647,157
647,617
321,664
209,330
– 4,001
General liability insurance
738,348
743,229
542,119
253,832
6,556
Legal protection insurance
267,875
267,363
136,528
84,271
33
Marine, aviation and transport insurance
187,284
188,679
147,383
52,772
– 905
Credit and guarantee insurance
447
466
67
98
– 226
Other lines of insurance
82,172
81,546
52,169
27,085
– 25,225
7,699,384
7,712,606
5,540,291
2,447,779
– 305,314
Previous year’s figures
7,674,690
7,644,540
5,146,884
2,336,898
– 259,860
Assumed business
Marine, aviation and transport insurance
Other lines of insurance
Previous year’s figures
64 99
30,055
29,907
14,914
13,642
– 1,847
659,198
663,844
456,219
173,413
– 30,327
689,253
693,751
471,133
187,055
– 32,174
966,394
967,822
905,321
184,442
74,446
Direct and assumed
business combined
8,388,637
8,406,357
6,011,424
2,634,834
273,140
Previous year’s figures
8,641,084
8,612,362
6,052,205
2,521,340
– 185,414
The premiums written for health insurance are broken down as follows for 1998:
amounts in ATS thousand
1998
1997
2,201,468
2,190,992
995,499
987,523
Direct business
Individual insurance
Group insurance
Assumed business
Individual insurance
Group insurance
270
0
4,128
1,531
3,201,365
3,180,046
The premiums written for life insurance are broken down as follows for 1998:
amounts in ATS thousand
Direct business
Assumed business
1998
1997
5,904,938
5,429,008
206,689
184,953
6,111,627
5,613,961
The premiums written for health insurance are broken down as follows for 1998:
amounts in ATS thousand
Individual insurance
Group insurance
1998
1997
5,400,422
5,055,678
504,516
373,330
5,904,938
5,429,008
Single-premium policies
1,489,277
1,180,606
Policies with ongoing premium payment
4,415,661
4,248,402
5,904,938
5,429,008
5,760,759
5,296,919
124,618
126,902
Policies with profit sharing
Policies without profit sharing
Policies for unit-linked life insurance
Reinsurance for life insurance showed a negative balance of ATS thousand 22,665 (ATS thousand 22,142) in 1998. Reinsurance for health
insurance showed a positive balance of ATS
thousand 5,457 (ATS thousand 8,596) in 1998.
The ATS thousand 693,751 (ATS thousand
967,822) in premiums earned from assumed
19,561
5,187
5,904,938
5,429,008
business in property & casualty were deferred in
some cases by one year in the profit and loss
account. Of the ATS thousand 203,144 (ATS thousand 181,788) in premiums earned from assumed life insurance business, ATS thousand
5,332 (ATS thousand 5,214) was entered in the
profit and loss account after a one-year deferral.
99 65
Income from participating interests and income from other investments, as reported in the profit and loss account, are attributable to affiliated companies as follows:
amounts in ATS thousand
1998
1997
64,165
62,787
Income from participating interests:
Property & casualty insurance
0
0
1,355
1,355
65,520
64,142
Property & casualty insurance
57,723
49,766
Health insurance
14,247
15,675
Life insurance
10,175
8,987
Total
82,145
74,428
Health insurance
Life insurance
Total
Income from other investments:
All income from the investment of capital in life
and health insurance was carried over to the
underwriting account, since the investment income in these two areas is part of the underwrit-
ing calculations. In property & casualty insurance,
only interest earned on securities on deposit for
assumed business was carried over to the underwriting account.
The items net expenses for claims incurred, net operating expenses, other technical charges,
investment expenses and other non-technical charges contain:
amounts in ATS thousand
Salaries and wages
1997
1,669,774
1,659,034
Expenditure on severance pay
156,452
141,815
Expenditure on old-age provision
384,960
479,380
Expenditure on social security contributions prescribed by law,
pay-related changes and compulsory contributions
544,116
528,156
26,691
28,830
Other staff benefits
In direct insurance business, commissions in the
financial year 1998 totalled 1,188,705 (TS
1,091,592). Losses from the realisation of
investments in the financial year 1998 totalled
66 99
1998
ATS thousand 8,681 (ATS thousand 525).
Creating and releasing untaxed reserves changed
the expenditure for taxes on income and earnings
The revaluation reserve from additional capital allowances in the balance sheet as of December
31, 1998, and the allocations thereto and releases thereof in the financial year 1998 are broken
down by fixed asset items as follows:
as of
Dec. 31, 1998
amounts in ATS thousand
Land and buildings
Allocations
Releases
Umgliederung
as of
Dec. 31, 1997
1,020,083
309,262
24,552
0
735,373
Shares in affiliated companies
114,385
0
167
0
114,552
Participating interests
498,328
0
8,916
0
507,244
0
0
0
- 17,764
17,764
Debt securities issued by affiliated companies
Debt securities and other
fixed-income securities
Shares and other variable-yield securities
0
0
9,805
- 223,387
233,192
241,151
0
0
241,151
0
17,288
20,586
3,298
0
0
Intangible assets
The other untaxed reserves in the balance sheet as of December 31, 1998, and the allocations
thereto and releases thereof in the financial year 1998 are broken down as follows:
as of
Dec. 31, 1998
amounts in ATS thousand
Reserves acc. to § 10 of the Austrian Income Tax Act
Rental income reserves acc. to § 11
of the Austrian Income Tax Act
Reserve acc. to § 12 EStG of the Austrian Income Tax Act
1)
Allocations
Releases
as of
1)
Dec. 31, 1998
434,153
68,888
68,845
434,110
9,217
0
147,114
156,331
0
0
49,000
49,000
Of which ATS thousand 62,787 from Wiener Städtische’s take-over of Seniorenresidenz Mirabell and Landstrasse Hauptstrasse 71 Realbesitz GmbH, Vienna.
The reserve reported in the balance sheet as of
December 31, 1998, acc. to sec. 10 of the
Austrian Income Tax Act is broken down by
years as follows:
amounts in ATS thousand
Investment allowance
as per § 10 of the
Austrian Income Tax Act
from 1990
11,139,697.00
from 1991
21,082,525.00
from 1992
15,425,047.00
from 1993
66,185,047.00
from 1994
89,419,801.00
from 1995
71,499,089.00
from 1996
60,839,126.00
from 1997
31,088,154.00
from 1998
67,473,821.00
in the financial year by ATS thousand 52,727
(ATS thousand 13,905).
The amount permitted to be entered on the
assets side pursuant to sec. 198 (10) of the
Austrian “HGB” (Commercial Code) was not
included in the balance sheet. The tax relief
expected for the following financial years is ATS
thousand 44,828 (ATS thousand 59,094).
99 67
V. Shares in Profit
The shares in profit (= bonus) are calculated
on the basis of the following principles:
Property & Casualty insurance
The bonus allocated to all lines of comprehensive
residential building insurance policies is 10 % of
the annual premium. The bonus is credited to
every annual premium falling due in the period
from August 1, 1999, to July 31, 2000. No bonus
is paid for fixed premium policies or for subject to
profit-sharing arrangements covering two or
more insurance lines.
a) Interest bonus in the amount of 3.5 % of the
operative level actuarial provisions at the beginning of the current insurance year.
b) Sum bonus in the amount of 2.5 per thousand
of the sum payable at death for policies with a
valid adjustment note, or 1 per thousand for all
other policies.
c) Terminal bonus on maturity of the sum insured
under endowment in 2000, in the amount of an
interest bonus as per point a) as a percentage of
the entire sum payable.
2. Under the insurance conditions underlying all
Class A policies belonging to settlement class 96
(single-premium policies), policyholders receive
the following bonuses:
Health insurance
Holders of insurance policies written in accordance with tariffs AK 1, 2, AV 12, 22, 32, AS 2, OS
1, 2, 3 MS 0, 1, 2, 3, 4, 5, 7, 77, MO 5, BV 0, 1,
2, 4, 5, 7, VA 3, GW 0, 1, 2, 4, 5, TS 1, 2, 3, 4, 5,
7, HV 11, 21, 31, 12, 22, 32, 13, 23, 33, HS 1, 2,
3, HZ 11, 12, 13, 14, 15, 17, MB 11 and ML 1 will
receive a special bonus as per December 31,
1999, if their premiums have not been raised by
the actuarially required amount under the 1998
premium adjustment.
The amount of the respective bonus corresponds
to the single premium required for this measure,
which serves to provide financial relief for senior
holders of health insurance policies.
Life insurance
Profit Class A
1. Under the insurance conditions underlying all
Class A policies belonging to settlement class 92,
policyholders receive the following bonuses:
68 99
Interest bonus depending on inception date:
if the inception date is between March 1996 April 1997: 3.5 %
if the inception date is between May 1997 December 1998: 2.25 % of the operative level
actuarial provisions at the beginning of the current insurance year.
3. Under the insurance conditions underlying all
Class A policies, apart from settlement classes
92 and 96, policyholders receive the following
bonuses:
a) Interest bonus in the amount of 3.5 % of the
operative level actuarial provisions at the beginning of the current insurance year.
b) Sum bonus in the amount of 3.5 per thousand
of the sum payable at death for policies with a
valid adjustment note, or 2 per thousand for all
other policies.
c) Terminal bonus on maturity of the sum insured
under endowment in 2000, in the amount of an
interest bonus as per point a) as a percentage of
the entire sum payable.
Profit Class B
Under the insurance conditions underlying all
Class B policies, policyholders receive a bonus in
the amount of 15 % of the annual premium.
Holders of Class B ordinary life insurance policies
with an insured sum of ATS 10,000 or more and a
term of not less than 12 years also receive a terminal bonus of 20 % of the insured sum in case
of maturity of the sum insured under endowment
in 2000. The special bonuses contracted in 1983
and 1984 are credited to this terminal bonus.
Profit Class R
1. Under the insurance conditions underlying all
Class R policies, apart from the policies with current annuity payments, policyholders receive the
following bonuses:
a) Bonus in the amount of 3.5 % of the operative
level actuarial provision at the beginning of the
current insurance year.
b) Supplementary bonus in the amount of 1 per
thousand of the accumulated amount of annuity
or endowment.
c) Terminal bonus on maturity of the sum insured
under endowment in 2000, in the amount of a
bonus as per point a) as a percentage of the entire sum payable.
2. In case of Class R insurance policies with current annuity payments which are in the second or
in a later year of annuity payments, current annuities are increased by 3.5 % or, in the event of a
bonus annuity agreement, by 1.5 % of the latest
annuity paid, both as from January 1, 2000.
Profit Class WV
Under the Class WV whole-life insurance policies, policyholders receive the following bonuses
in accordance with the provisions of the bonus
scheme approved by the Insurance Supervisory
Authority:
a) Interest bonus in the amount of 3.5 % of the
operative level actuarial provision at the beginning of the current insurance year.
b) Surplus bonuses from the risk profit in the
amount of 5 per thousand of the difference between the contracted sum insured on the effective date of the allocation of profits and the related operative level actuarial provision (“risk
capital”) at the beginning of the current insurance
year.
c) Surplus bonuses from the expense result in the
amount of 3 per thousand of the risk capital, as
defined in point b), for insurance policies with a
sum insured of ATS 15,000 or more.
Profit Class WVN
Under the insurance conditions underlying all
Class WVN whole-life insurance policies,
policyholders receive the following bonuses:
a) Interest bonus in the amount of 3.5 % of the
operative level actuarial provision at the beginning of the current insurance year.
b) Supplementary bonus in the amount of 25 % of
the risk premium included in the total annual premium of the current insurance year.
Profit Class K
1. Under the insurance conditions underlying all
Class K risk insurance policies which feature
constant insurance sums with ongoing premium
payments and which belong to settlement class
99, policyholders receive a bonus equal to 65 %
of the premium charged for the insurance years
beginning in 1999 and 2000.
2. Under the insurance conditions underlying all
Class K risk insurance policies featuring constant
insurance sums with ongoing premium payments
99 69
and all Class K supplementary risk insurance
policies – except for policies belonging to the
settlement class 99 – policyholders receive a
bonus equal to 25 % of the premium charged for
the insurance year beginning in 2000.
Profit Class D
Under the insurance conditions underlying all
Class D risk insurance policies, policyholders
receive the following bonuses:
a) Interest bonus in the amount of 2.5 % of the
operative level actuarial provision at the beginning of the current insurance year.
b) Sum bonus in the amount of 2 per thousand of
the sum insured in case of death for policies with
a valid adjustment note, in the amount of 1 per
thousand for all other policies.
c) Terminal bonus on maturity of the sum insured
under endowment in 2000, in the amount of an
interest bonus as per point a) as a percentage of
the entire sum payable.
Profit Class FLV
Under the insurance conditions underlying all
Class FLV policies, policyholders receive the following bonuses:
a) policies based on ongoing premium payment:
a bonus in the amount of 3 % of the premium
charged for the insurance year beginning in 2000;
b) policies based on a single-premium payment:
a bonus in the amount of 3 per thousand of the
single premium payable under the original insurance, at the start of the insurance year beginning
in 2000.
VI. Other Particulars
The subscribed capital in the total amount of ATS
1,233,680,000 comprises 10,986,800 ordinary
shares made out to bearer with a par value of ATS
70 99
100 each and 1,350,000 non-voting preference
shares made out to bearer with a par value of ATS
100 each. The preference shares are listed on the
Vienna Stock Exchange in Segment B.
By a resolution passed at the annual shareholders’ meeting on June 22, 1998, the
Management Board was authorised to raise the
company's subscribed capital by May 31, 2003,
at the latest, by a nominal amount not to exceed
ATS 266,320,000 by issuing 2,663,200 registered
or bearer shares with a par value of ATS 100
each, against payment in cash or contribution in
kind. The Management Board, with the approval
of the Supervisory Board, will determine the
shareholders’ rights, the exclusion of the preemptive right, and other terms and conditions for
the issue of shares; non-voting preference shares
having priority over or equal to existing
preference shares may be issued. The issue
prices of ordinary and preference shares may be
set at different levels.
Participating interests were held in the following enterprises as of December 31, 1998:
Overview of equity interests
Capital held
Equity capital
ATS
Net profit (loss) latest
before changes annual
in reserve in ATS accounts
total
directly
100.00 %
75.00 %
6,050,663
1,718,007
1998
62.27 %
97.50 %
75.00 %
100.00 %
100.00 %
62.27 %
97.50 %
55.00 %
100.00 %
100.00 %
72,556,614
71,246,726
309,012
- 883,571
604,612
107,537
- 78,888
- 71,433
- 38,725
75,587
1997
1997
1998
1997
1998
75.00 %
75.00 %
1,232,373,226
127,984,241
1998
100.00 %
25.00 %
3,613,590
833,613
1998
76.00 %
75.00 %
52.00 %
75.00 %
1,465,981
33,242
315,794
16,581
1997
1997
50.30 %
82.32 %
94.89 %
100.00 %
100.00 %
83,86 %
100.00 %
91.67 %
51.00 %
75.06 %
70.40 %
70.25 %
89.26 %
100.00 %
50.30 %
75.80 %
39.69 %
392,568,877
154,957,614
267,060,251
87,405,628
8,352,474
12,539,432
1998
1997
1997
55.23 %
100.00 %
100,158,043
497,787,320
6,153,512
- 36,114,876
1997
1998
1. Affiliated companies
ARITHMETICA Versicherungs- und Finanzmathematische Beratungs-Gesellschaft m.b.H., Vienna
Bankowe Towarzystwo Ubezpieczen i
Reasekuracji “Heros” S.A., Warsaw
Business Park Brunn Entwicklungs AG, Vienna
Center Hotel Holding GmbH, Vienna
Center Hotelbetriebs GmbH, Wals
DIRECT-LINE Direktvertriebs-GmbH, Vienna
DONAU Allgemeine VersicherungsAktiengesellschaft, Vienna
DVS Donau-Versicherung Vermittlungsund Service-Gesellschaft m.b.H., Vienna
RD-BETEILIGUNGS-AKTIENGESELLSCHAFT, Vienna
EXPERTA SchadenregulierungsGesellschaft m.b.H., Vienna
HORIZONT Personal-, Team- und
Organisationsentwicklung GmbH, Vienna
Humanocare Betriebsgesellschaft m.b.H., Vienna
Kapital & Wert Vermögensverwaltung
Aktiengesellschaft, Vienna
KOOPERATIVA, poist’ovna a.s., Bratislava
Ceskà Kooperativa pojistòvna, a.s., Prague
Celetná, s.r.o., Prague
Ceská Kooperativa Londýn Ltd., London
IF KIP, a.s., Prague
Kámen Ostromer, s.r.o, Ostromer
Klara-sklárská hut’, s.r.o.
Prago-Immobilien, a.s., Prague
Sanatorium Astoria, a.s., Karlovy Vary
Spec. ústav pro rek.pam., a.s., Prague
Unigeo, a.s., Ostrava
Moravskoslezská Kooperativa pojist’ovna, a.s., Brno
LVP Holding GmbH, Vienna
“Grüner Baum” Errichtungs- und
Verwaltungsges.m.b.H., Innsbruck
Brunn am Gebirge Realbesitz GmbH, Vienna
HOTEL EUROPA SALZBURG Realbesitz
Aktiengesellschaft, Vienna
HOTEL EUROPA WIEN Realbesitz GmbH, Vienna
MAP Bürodienstleistung Gesellschaft m.b.H., Vienna
Neue Heimat Oberösterreich Holding GmbH, Vienna
REAL-TECH Immobilienverwaltung Gesellschaft m.b.H., Vienna
Senioren Residenz Fultererpark
Errichtungs- und Verwaltungs GmbH, Innsbruck
100.00 %
80.00 %
66.66 %
85.00 %
100.00 %
100.00 %
100.00 %
100.00 %
76.00 %
66.60 %
The statutory exemption provided for in § 241 para. 2 (2) of the Austrian Commertial Code was claimed.
99 71
Overview of equity interests
Seniorenresidenzen Gemeinnützige
Betriebs GmbH, Vienna
SH Sicherheits-Beratung und -Dienstleistungen
GmbH, Vienna
TECH GATE VIENNA Wissenschafts- und
Technologiepark GmbH, Vienna
Vösendorf Realbesitz GmbH, Vienna
Altstadt Hotelbetriebs GmbH, Salzburg
Metropolitan Datenservicegesellschaft m.b.H., Vienna
DEVÍN Vermögensverwaltungs- und
Beteiligungs-Genossenschaft, Bratislava
Metropolitan Rechenzentrum-Betriebs-GmbH, Vienna
Pict & Byte Computeranwendung-Entwicklung
und Handelsgesellschaft, Vienna
PVK Versicherungs-Vermittlungsgesellschaft m.b.H., Vienna
Capitol a.s., Bratislava
Kapitol pojist’ovací a financni poradenství, a.s., Brno
Montanversicherung Aktiengesellschaft, Vienna
PFG Parkflächenbewirtschaftungs GesmbH, Salzburg
PRODUKTIVA Versicherungsvermittlungsund Finanzierungsberatungs GmbH, Vienna
PROGRESS Beteiligungsges.m.b.H., Vienna
Projektbau Ges.m.b.H., Wals
Realitätenverwaltungs- und RestaurantbetriebsGesellschaft m.b.H., Vienna
APC-Geschäftscenter Betriebsgesellschaft m.b.H., Vienna
Ringturm Kapitalanlagegesellschaft m.b.H., Vienna
RISK CONSULT Sicherheits- und RisikoManagementberatung Gesellschaft m.b.H., Vienna
RISK-SERVICE Versicherungsmakler und
-betreuungsgesellschaft m.b.H., Vienna
SECURIA majetkovosparávna a podielová
s.r.o., Bratislava
Senioren Residenz Veldidenapark Errichtungsund Verwaltungs GmbH, Innsbruck
VLTAVA majetkovosprávní a podílová spol.s.r.o., Prague
Wiener Verein Bestattungs- und Versicherungsservice Gesellschaft m.b.H., Vienna
Capital held
total
Equity capital
ATS
100.00 %
41,423,966
9,553,498
1997
100.00 %
100.00 %
100.00 %
78.61 %
85.00 %
78.61 %
60.00 %
149,924,854
4,205,302
55,485,581
3,281,167
1998
1998
100.00 %
60.00 %
85.00 %
100.00 %
60.00 %
60.00 %
4,686,046
35,540,250
-6,462,125
-313,954
10,069,808
- 5,524,262
1997
1998
1997
96.00 %
94.00 %
6,421,517
2,366,242
1998
100.00 %
51.00 %
51.00 %
16,630,852
3,348,619
1998
100.00 %
60.00 %
1,988,872
375,753
1998
100.00 %
100.00 %
2,130,436
1,341,290
1998
100.00 %
100.00 %
24,104,884
24,534
1997
66.70 %
100.00 %
66.70 %
100.00 %
169,744,617
30,095,230
- 6,344,052
58,090
1998
1997
100.00 %
100.00 %
13,768,579
850,269
1998
100.00 %
100.00 %
60.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
70.00 %
The statutory exemption provided for in § 241 para. 2 (2) of the Austrian Commercial Code was claimed.
72 99
Net profit (loss) latest
before changes annual
in reserve in ATS accounts
directly
Overview of equity interests
Capital held
Equity capital
Net profit (loss) latest
before changes annual
in reserve in ATS accounts
total
directly
ATS
49.00 %
50.00 %
30.00 %
50.00 %
49.00 %
39.00 %
50.00 %
30.00 %
50.00 %
49.00 %
11,524,199
161,762,581
- 1,499,108
362,724
149,455,279
8,130,530
16,929,972
- 1,015,079
- 137,276
- 21,117,567
1997
1998
1997
1997
1997
25.00 %
25.00 %
50.00 %
50.00 %
33.33 %
25.00 %
20.00 %
49.90 %
25.00 %
25.00 %
25.00 %
33.33 %
33.33 %
25.00 %
20.00 %
49.90 %
4,095,337
7,905,776
1,598,577
279,973,174
- 1,358,451
59,674,714
14,921,812
539,634
2,731,763
- 4,561,094
- 695,528
141,621,082
- 1,999,033
8,973,995
- 4,731,857
577
1997
1997
1997
1998
1997
1997
1997
1997
47.86 %
33.33 %
47.86 %
33.33 %
- 53,438,225
537,823,221
5,542,898
70,600,655
1997
1998
50.00 %
30.12 %
50.00 %
30.12 %
654,254
122,182,460
23,807
2,030,069
1997
1997
47.67 %
47.67 %
566,209,154
34,089,455
1998
50.00 %
50.00 %
2,324,414
- 23,734
1997
47.00 %
17.00 %
2. Direct participating interests of over 20 %
Audatex Österreich Gesellschaft m.b.H., Vienna
CA-Versicherung Aktiengesellschaft, Vienna
CROWN-WSF spol.s.r.o., Prague
DATATRAK Projektentwicklung GmbH, Vienna
GLÓRIA-SWISS LIFE Svájci-Magyar Biztositó Rt., Budapest
Humanomed Krankenhaus Management
Gesellschaft m.b.H., Vienna
IMPERIAL-Székesfehérvar, Ingatlankezelési, Kft. Kistarcsa
InExCo a.s., Bratislava
InterRisk Internationale Versicherungsholding GmbH, Vienna
ÖBV-DIREKT Versicherungsservice GmbH, Vienna
PKB Privatkliniken Beteiligungs-GmbH, Vienna
Privatklinik Wehrle Gesellschaft m.b.H., Salzburg
Ruster Hotel Bau- und Betriebsgesellschaft m.b.H., Vienna
Ruster Hotel Bau- und Betriebsgesellschaft m.b.H. & Co KG, Vienna
Union Versicherungs-Aktiengesellschaft, Vienna
VBÖ VERSICHERUNGSVERMITTLUNG
GESELLSCHAFT M.B.H., Vienna
Vereinigte Pensionskasse Aktiengesellschaft, Vienna
Volksfürsorge-Jupiter Allgemeine VersicherungsAktiengesellschaft, Vienna
Wiener Porzellanmanufaktur Augarten-Beteiligungsverwaltungsgesellschaft m.b.H., Vienna
2a. Direct participating interests of under 20 %,
jointly with an affiliated company
SOLIDARITA, a.s., Preßburg
The statutory exemption provided for in § 241 para. 2 (2) of the Austrian Commercial Code was claimed.
99 73
Overview of equity interests
Capital held
total
Equity capital
directly
3. Other participating interests in
insurance companies and banks
ALLNATIONS, INC., Columbus, Ohio
Bank Austria Aktiengesellschaft, Vienna*)
Cesk ý penzijní fond, a.s., Prague
Horizonte Enterprise Development Company B.V., ED Heiloo
InterRisk Lebensversicherung-Aktiengesellschaft, Wiesbaden
InterRisk Versicherungs-Aktiengesellschaft, Wiesbaden
Investmentfonds Quantum AG
Investmentgesellschaft SOLIDINVEST, AG
Kapital-Beteiligungs Aktiengesellschaft, Vienna
Kölnische Rück Wien RückversicherungsAktiengesellschaft, Vienna
OESTERREICHISCHE NATIONALBANK, Vienna
Österreichische Investitionskredit
Aktiengesellschaft, Vienna
Österreichische KreditversicherungsAktiengesellschaft, Vienna
Powszechny Bank Kredytowy S.A., Warsaw
PRISMA Kreditversicherungs-Aktiengesellschaft, Vienna
Sparkassen Versicherung Aktiengesellschaft, Vienna
Venture Finanzierungsgesellschaft m.b.H., Vienna
Wüstenrot Versicherungs-Aktiengesellschaft, Salzburg
Wüstenrot Wohnungswirtschaft registrierte Genossenschaft mit beschränkter Haftung, Salzburg
Wüstenrot a.s., Prague
0.01 %
5.03 %
23.73 %
14.03 %
45.83 %
45.83 %
23.99 %
17.29 %
10.00 %
10.00 %
15.00 %
0.47 %
15.00 %
0.47 %
7.82 %
7.82 %
14.83 %
9.88 %
2.80 %
18.75 %
1.16 %
15.00 %
14.83 %
9.88 %
2.80 %
0.12 %
5.28 %
0.01 %
4.80 %
14.03 %
1.16 %
15.00 %
0.12 %
*) Cross holdings
The statutory exemption provided for in § 241 para. 2 (2) of the Austrian Commercial Code was claimed.
74 99
ATS
Net profit (loss) latest
before changes annual
in reserve in ATS accounts
Overview of equity interests
4. Other participating interests in other enterprises
“TBG” Thermenzentrum Geinberg
Betriebsgesellschaft m.b.H., Linz
“THG” Thermenzentrum Geinberg
Errichtungs-GmbH, Linz
92.9 RTL Radio Wien GmbH, Vienna
AKL Sanatorium Betriebsgesellschaft m.b.H., Vienna
AKL Sanatorium Betriebsgesellschaft m.b.H. & Co KG, Vienna
Ambulatorien Betriebsgesellschaft m.b.H., Vienna
Ambulatorien Betriebsgesellschaft m.b.H.
Ärzte- und Laborbedarf Vertriebs KG, Vienna
ARWAG Holding-Aktiengesellschaft, Vienna
Avance Hotel GmbH, Bad Tatzmannsdorf
Badgasteiner Kur- und KongreßbetriebsGesellschaft m.b.H., Badgastein
BUCHBINDER KFZ FULL SERVICE GesmbH, Vienna
Casinos Austria Aktiengesellschaft, Vienna
COUNTRY INN VIC Hotelerrichtungs- und Betriebsgesellschaft, Vienna
DM servis, druzstvo, Prague
Gesundheitspark Wien-Oberlaa
Gesellschaft m.b.H., Vienna
Gewista-Werbegesellschaft m.b.H., Vienna
Golf resort Karlovy Vary, a.s., Karlovy Vary
HAUSGARAGE BRIGITTENAUER LÄNDE-BETRIEBSGESELLSCHAFT M.B.H., Vienna
Kapital & Risk Kapital-Anlage-Beratung Ges.m.b.H., Vienna
Medial Beteiligungs-Gesellschaft m.b.H., Vienna
Minet, a.s., Prague
New Europe Insurance Ventures, Edinburgh
Österreichisches Verkehrsbüro Aktiengesellschaft, Vienna
PKM Handels- und Beteiligungsgesellschaft m.b.H., Graz
Privatklinik Josefstadt GmbH, Vienna
Privatklinik Villach Gesellschaft m.b.H. & Co.KG, Klagenfurt
Privatklinik Villach Gesellschaft m.b.H., Klagenfurt
Privatklinik Wehrle Realbesitz GmbH, Vienna
RW Beteiligungsgesellschaft institutioneller Anteilseigner mbH,
Düsseldorf
Sanatorium Döbling Betriebsführungs GmbH Nfg KEG, Vienna
Sanatorium Maria Hilf GmbH, Klagenfurt
Semperit Aktiengesellschaft Holding, Vienna
SHD Komes, a.s., Most
SILURUS Handels- und Beteiligungs GmbH, Vienna
Solitér, a.s., Jablonec/Nisou
VFG Vorsorge-Finanzierungsconsulting-GesmbH, Vienna
Wagramer Straße Hotel-Betriebs-GmbH, Vienna
WED Donau-City Gesellschaft m.b.H., Vienna
WED Holding Gesellschaft mbH., Vienna
WED Kastor Liegenschaftsbesitz GmbH, Vienna
WED Orion Liegenschaftsbesitz GmbH, Vienna
WED Planungs- und Errichtungs-Gesellschaft mbH, Vienna
WED Saturn Liegenschaftsbesitz GmbH, Vienna
WED Wiener Entwicklungsgesellschaft für den
Donauraum Aktiengesellschaft, Vienna
Wiener Holding Aktiengesellschaft, Vienna
Wiener Messen & Congreß Gesellschaft m.b.H., Vienna
Wiener Porzellanmanufaktur Augarten
Gesellschaft m.b.H., Vienna
The statutory exemption provided for in § 241 para. 2 (2) of the Austrian Commercial Code was claimed.
99 75
In 1998, the Supervisory Board comprised the
following individuals:
Chairman:
Komm.-Rat Karl Samstag
Vice Chairman:
Komm.-Rat Dkfm. Klaus Stadler
Members:
Abbot Präses Dr. Clemens Lashofer
Norbert Grinninger
Dr. Alfred Holoubek
Ing. Werner Kasztler
Dipl.-Ing. Guido Klestil
Dkfm. Helmut Mayr
Komm.-Rat Walter Nettig
Wolfgang Radlegger
Dr. Johann Sereinig
Dr. Karl Skyba
Employees’ representatives:
Paul Ambrozy
Renate Doringer
Sylvia Fiedler
Peter Grimm
Heinz Neuhauser
Franz Urban
In 1998, the following individuals sat on the
Management Board:
Chairman:
Dkfm. Dr. Siegfried Sellitsch
Members:
Dr. Günter Geyer
Dr. Franz Lauer
Dkfm. Karl Fink
Heinz Jaindl
Dkfm. Hans Raumauf
76 99
The average number of employees (including
cleaning staff) was 4,253 (4,217) . Of the 4,091
(4,048) white-collar workers on the payroll, 2,036
(1,972) were in field service and incurred
ATS thousand 919,065 (ATS thousand 888,327)
in personnel costs, whilst 2.055 (2.076) worked
in the office and incurred ATS thousand
1,862,928 (ATS thousand 1,948,888) in personnel
costs.
As of December 31, 1998, the members of the
Management Board were liable for the repayment
of loans amounting to ATS thousand 1,068
(ATS thousand 1,188); no loan payments were
made in 1998. Interest on the loans is 6.5 % p.a.
The loans will expire in 2005.
Members of the Supervisory Board did not take
out any loans in 1998.
There were no liabilities for members of the
Management or Supervisory Board as of
December 31, 1998.
Of the 1998 expenditure for severance pay and
pensions totalling ATS thousand 541,412
(ATS thousand 621,195), ATS thousand 34,855
(ATS thousand 37,430) went to severance pay
and pensions for Management Board members
and executive staff acc. sec. 80 para. 1 of the
Austrian “AktG” (Stock Corporation Act).
In consideration of the work performed in 1998,
the members of the Management Board received
emoluments (reduced by the amount redistributed to holding companies) totalling ATS thousand 23,864 (ATS thousand 24,600), of which
ATS thousand 683 (ATS thousand 669) were
emoluments from affiliated companies. Total
emoluments received in 1998 by former
Management Board members (including their
survivors) amounted to ATS thousand 14,427
(ATS thousand 14,137).
Remuneration received by the members of
the Supervisory Board for the work performed
by them for the company in 1998 amounted
to ATS thousand 1,073 (ATS thousand 1,090).
WIENER STÄDTISCHE Allgemeine Versicherung
Aktiengesellschaft is included in the consolidated
annual accounts of Wiener Städtische Wechselseitige Versicherungsanstalt-Vermögensverwaltung with corporate seat in Vienna. The published
consolidated annual accounts are available for
inspection on the business premises of the company at Schottenring 30, 1010 Vienna, Austria.
The Management Board:
Dkfm. Dr. Sellitsch
Dr. Geyer
Dkfm. Fink
Dr. Lauer
Jaindl
Dkfm. Raumauf
Vienna, March 29, 1999
Unqualified Audit Opinion on the fiancial statements and the annual report for the year ended
December 31, 1998. As the result of our due
audit we can certify that the accounting records
and the financial statements comply with the
legal regulations. The financial statements give a
true and fair view of the company’s assets, liabilities, financial position and profit or loss in conformity with generally accepted accounting principles in Austria. The annual report of the board
of management corresponds with the financial
statements.
KPMG Austria
Wirtschaftsprüfungs-Gesellschaft mbH
Dr. Knirsch
DDr. Zöchling
CPAs and tax advisors
Vienna, April 8, 1999
99 77
The right contact
for you …
General Secretariat
Central Sales
Mag. Gerald Hasler, Secretary General
Central Sales Management, Field Organisation
Dr. Helmut Zeglovits, Sales Director
Property and Casualty insurance
Motor Insurance
Heinz Mandl, Department Head
Helmut Lassl, Prokurist
Liability and Legal Protection Insurance
Dr. Alfred Biegl, Prokurist
Homeowners’ Insurance, Residential, Office
Building, Household and Burglary and Housebreaking Insurance
Heinrich Herbst, Prokurist
HUK-Benefits Department
Dr. Wolfgang Reisinger, Oberprokurist
Fire Insurance, Transport Insurance and
Technical Insurance Lines
Mag. Dr. Walter Bauer, Prokurist
Indemnity Department for Fire Insurance,
Transport Insurance and Technical Insurance
Lines
Günter Tozzer, Oberprokurist
General Third-party Liability Insurance, Industrial
and Commercial Business
Dr. René Kempf, Prokurist
Health Insurance
Dr. Walter Leonhartsberger-Schrott,
Department Head
Life & Accident Insurance
Gerhard Ernst, Department Head
Funeral Services Insurance
Peter Skyba, Director
Rudolf Durstmüller, Sales Director
Reinsurance
Dr. Peter Hagen, Prokurist
International Business
Dr. Peter Hagen, Prokurist
78 99
Alternative Sales Channels
Mag. Gerhard-Walter Jeidler, Sales Director
Main Office Business, Commercial Business
Hans Wolf, Sales Director
Asset Management
Equity Holdings Management, Loans
Dr. Martin Simhandl, Prokurist
Project and Real Estate Holdings
Mag. Anton Werner, Asset Management**
Securities and Investment Funds, Investor
Relations, Ringturm-Kapitalanlageges.m.b.H.
Dr. Peter Strobl, Director
General Company Functions
Accounting and Finance
Dieter Leichtfried, Direktor
Law, Taxes and Associations
Dr. Sven Teichmeister, Director
Internal Auditing
Leopold Tuma, Department Director
Advertising
Elfriede Tozzer, Department Director
Personnel
Robert Bilek, Prokurist
Operations Organisation
Peter Sandhoff, Asset Management
Metropolitan Rechenzentrum Betriebsges.m.b.H.
Walter Seybal, Director
Emmerich Weber, Managing Director
Metropolitan Datenservice Ges.m.b.H.
Management:
Dr. Franz Kosyna
Franz Schneeberger
Franz Simböck
Realitätenverwaltungs- und RestaurantbetriebsGesellschaft m.b.H.
Management:
Johann Fahrnberger
Herbert Halbauer
Franz Jappel
Chief Physician, Personal Insurance and OutPatient Clinic
Dr. med. Alfred Heiter
Wiener Städtische operates 171 offices on the
Austrian market. More than 4,000 employees are
available to answer customers’ questions quickly
and efficiently. Irrespective of the issues brought
before them, the Provincial Headquarters will
know who is the right person to contact.
Head Office
Schottenring 30, Ringturm,
1010 Vienna
Phone: (++43-1) 531 39-0,
Fax: (++43-1) 535 34 37
E-Mail: [email protected]
Internet: http://www.staedtische.co.at
Vienna Provincial Headquarters
Obere Donaustraße 53, 1020 Vienna
Phone: (++43-1) 211 29-0,
Fax: (++43-1) 211 29-3135
Max Windhager, Provincial Director
Lower Austria Provincial Headquarters
Franz Hochedlinger-Gasse 6-8
1020 Vienna
Phone: (++43-1) 211 39-2092,
Fax: (++43-1) 211 39-3143
Helmut Maurer, Provincial Director
Upper Austria Provincial Headquarters
Untere Donaulände 40, 4010 Linz
Phone: (++43 -732) 76 31-0,
Fax: (++43 -732) 76 31-202
Dr. Manfred Mahrle, Provincial Director
(until June 30, 1999)
Franz Meingast, Deputy Provincial Director
(as from July 1, 1999)
Authorised Actuary
Heinz Jaindl, Management Board Director, Life
and Health Insurance
Deputies:
Franz Oppel, Head Office Secretary,
Life Insurance
Mag. Dr. Klaus Wegenkittl,
Handlungsbevollmächtigter, Health Insurance
Styria Provincial Headquarters
Gürtelturmplatz 1, 8021 Graz
Phone: (++43 -316) 789-0,
Fax: (++43 -316) 989-210
Hans Zechner, Provincial Director
Carinthia and East Tyrol Provincial
Headquarters
St. Veiter Ring 13, 9010 Klagenfurt
Phone: (++43 -463) 58 52-0,
Fax: (++43 -463) 58 52-350
Erich Obertautsch, Provincial Director
Salzburg Provincial Headquarters
Max Ott-Platz 3, 5020 Salzburg
Phone: (++43 -662) 889 66-0,
Fax: (++43 -662) 889 66-465
Peter Köpf, Provincial Director
Tyrol Provincial Headquarters
Südtiroler Platz 4, 6020 Innsbruck
Phone: (++43 -512) 59 5 69-0,
Fax: (++43 -512) 56 21 45
Ida Wander, Provincial Director
Vorarlberg Provincial Headquarters
Reichsstrasse 173, 6800 Feldkirch
Phone: (++43 -5522) 34 84-0,
Fax: (++43 -5522) 34 84-32
Walter Kopf, Provincial Director
Burgenland Provincial Headquarters
Kalvarienbergplatz 7, 7000 Eisenstadt
Phone: (++43 -2682) 604-0,
Fax: (++43 -2682) 641-1
Josef Habeler, Provincial Director
99 79
Hotline 0800/201 800
Current information available
around the clock.
Investor Relations Information
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information about Wiener Städtische?
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For further information please contact:
Wiener Städtische Allgemeine Versicherung
Aktiengesellschaft
Investor Relations
Schottenring 30
1010 Vienna
Phone: (++43-1) 531 39-1151
Fax: (++43-1) 531 39-3121
E-Mail: [email protected]
Impress:
Owner, publisher and editor:
Wiener Städtische Allgemeine Versicherung Aktiengesellschaft
Schottenring 30, A-1010 Vienna, Austria
Contact:
Mag. G. Hasler, Phone: (++43-1) 531 39-1060
Design: Huber und Pott
Photographs: Wolfgang Zajc
Environmentally friendly paper made from
100% chlorium-free bleached pulp
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