- Profit (before taxes) up by 21% to EUR 135 million
- Consolidated net profit up by 59% to EUR 105 million
- Earnings per share up by 32 cents to 88 cents
- Premiums in the Eastern European growth regions increased by 23%
-   Profit outlook for 2007 increased from EUR 270 million to EUR 320 million

In the first half of 2007, UNIQA Group Austria continued its consistent course focusing on improving earnings and recorded massively improved results whilst substantially increasing profitability. The six month profit (before taxes) of EUR 135 million was 20.7% above the same value in the previous year, net profit (after taxes and minority interests) increased by 58.6% to EUR 105 million. Earnings per share rose by 32 cents to 88 cents. The basis of these results is the concentration on more profitable product groups, strong growth impulses from Eastern Europe and an operating profit totalling EUR 154 million which improved again (+23.7%). The capital increase of STRABAG SE had no influence on the first half of 2007 earning improvements. As the corresponding closing only took place in August 2007, the resulting increase in assets of the UNIQA Group will only affect earnings in the third quarter.

The forecast for the 2007 profit on ordinary activities has been increased from EUR 270 million to EUR 320 million. Compared with the 2006 financial year (EUR 239 million), this represents an increase of around 34%.

UNIQA CEO Konstantin Klien comments: “The good half-year results, which were achieved purely from organic growth, meet our expectations as part of the profit improvement programme and therefore reflect the path taken: we are focussing on profit and not on sales at any price. The sales profitability, which increased from 5.3% to 6.6% within 12 months and the 75.6% benefit and loss ratio, which improved in spite of the claims from the “Kyrill” storm, are a clear expression that we are also being successful. At the same time, it is also a result of restructuring the portfolio towards higher quality product groups in terms of risks and margins, which we are already undertaking in small steps with a view to the Solvency II regulations. In addition, our dynamisation projects to enhance organic growth in CEE countries are having an excellent effect. We were not only able to increase premiums in Eastern Europe overall by 23%, we have also extended our market shares in this region. In spite of the lower single premium volume in Italy, the international share of total premiums rose further- to currently 32.6%.”

Premiums
Premium volume written for products with recurring premiums continued to see pleasing development in the first six months of 2007 and rose by a pleasing 4.2% to EUR 2,413 million. In contrast, single premiums fell due to inadequate profitability in the marketplace and special effects in Italy - by 16.7% to EUR 306 million. In total the gross premium volume written (including the savings portion from the premiums of unit- and index-linked life insurance), rose by 1.4% to EUR 2,719 million without major changes to the consolidation scope. 

The strongest impulses for growth continued to come from the Eastern European markets - premium volume rose there by 23.0% to EUR 377 million and thus already contributes 13.9% to consolidated premiums.

In Austria, premiums rose in spite of the ongoing high maturities in bank sales and the targeted withdrawal of single premium business by 0.6% to EUR 1,832 million. Recurring premium volume increased in Austria by 1.3% to EUR 1,726 million.

In Western Europe, the fall in premiums in the first quarter, which was affected by lower single premium business, could be weakened substantially. Business volume totalled EUR 510 million (- 8.1%). Recurring premium business increased in Western Europe by a pleasing 5.3% to EUR 368 million.
In total, the international share of Group premiums is 32.6% (1-6/2006: 32.1%).

Benefits
At the same time, it was possible to reduce total expenses and benefits compared with the same period in the previous year in spite of storm claims in the first quarter - by 7.6% to EUR 1,772 million. As a result of this development, the benefits ratio fell from 82.2% to 75.6%.

Investments
The UNIQA Group was able to increase capital investments as at 30 June 2007 compared with the value for same period in 2006 by 9.9%, or EUR 1,963 million, to EUR 21,770 million. The complete assets of UNIQA Group excluding intangible assets total around EUR 23 billion (+3%). Net investment income of EUR 455 million was 4.0% above the value for the same period last year.

Segments
In property and casualty insurance the company was able to increase written premiums by a substantial 6.3% to EUR 1,211 million. Growth drivers in this segment also came from Eastern Europe, increasing its premium volume by 18.6% to EUR 261 million. This already corresponds to 21.5% of total consolidated premiums for property and casualty insurance. Austria and Western Europe also provided premium increases, which faced with the high insurance densities, is certainly pleasing. In Austria, the premiums were 2.5% above the value for the same period last year, at EUR 724 million. The premium volume of EUR 227 million in Western Europe corresponds to a substantial 6.4% increase. The total international share of premiums in property and casualty insurance is therefore already around 40.2%.

The (gross) combined ratio for the first two quarters of 2007 is 98.1%. Adjusted for the storm damage (Kyrill), the (gross) combined ratio is 93.4%.

In life insurance there was a substantial increase in premium development in the second quarter. Recurring premiums increased in the first half of 2007 by 2.3% to EUR 741 million. The targeted withdrawal of single premiums by 16.7% to EUR 306 million resulted in a decrease in total life insurance premium volume by 4.1% to EUR 1,047 million.

The strongest growth rates for life insurance were also seen in the Eastern European markets - with an increase by 32.9% to EUR 114 million. The share of these markets in total life insurance premium volume therefore increased by 7.8% to 10.9%.

In Austria, unit-linked life insurance policies in particular increased substantially - the premiums from this area rose by 22.9% to EUR 207 million. UNIQA Group remains the clear market leader in this division. The subsidised premium pension provision also saw a pleasing development. This year alone, around 23,000 new customers were acquired for this pension provision option. Therefore the UNIQA Group already administrates 300,000 policies of this kind. As a result of the further withdrawal - for business policy considerations - of business with single premium products by 9.3%, total life insurance premiums in Austria fell in total by 1.8% to EUR 745 million. Overall the classic distribution channels have seen positive development and are stronger than the market, whereas the high maturities in bank sales as in previous years have limited growth.

Even in Western Europe, the recurring premium business saw pleasing developments with an increase in premiums of 9.5% to EUR 45 million. As a result of the heavy fall in single premiums in Italy (especially in the first quarter), the total life insurance premium volume in Western Europe dropped by 24.0% to EUR 188 million.

Written premiums in health insurance rose by 2.1% to EUR 461 million. In Austria, premium volumes rose by 2.1% to EUR 363 million. Internationally the premiums were 2.5% above last year’s level at EUR 98 million - that corresponds to 21.2% of the consolidated health insurance premium volume.

Internationalisation
In the first half of 2007, the UNIQA Group continued its expansion into Eastern Europe. Involvement in the eastern emerging markets in particular was strengthened.

Thus the stake in the Bulgarian company Vitosha - currently the fifth largest insurance company in the country - was strengthened gradually from 20% to around 62% and the brand appearance was altered to UNIQA.

In June 2007, a decision was taken to purchase an additional 23% of the share capital in the Romanian company ASTRA. This gives UNIQA, after signing the transaction - which still requires official approval - a controlling interest in the seventh largest Romanian insurance company. Even in 2006, the company was branded as “ASTRA-UNIQA”.   

In Serbia too, in terms of the single brand policy of the UNIQA Group, the brand was altered from Zepter to UNIQA in January 2007. UNIQA has held the majority of the company since 2006. In addition, a separate non-life insurance company was established in 2007 in line with the new rules on separating division. In a first step, this has already started to sell car insurance.

In the Ukraine, UNIQA Group has held 35% of the Credo-Classic non-life insurance company since the start of 2006 and has established a life insurance company in cooperation with Credo-Classic. The majority takeover of Credo-Classic has been agreed at the latest for 2008. This company is already also branded as a member of the UNIQA Group.

For the Albanian, Macedonian and Kosovar markets, UNIQA has agreed a far-reaching strategic cooperation with the largest Albanian insurance company Sigal. This agreement includes a fixed option to acquire the majority of Sigal by 2010. Thus the UNIQA Group has created an excellent basis to extend the radius of its activities to this dynamically developing region.

Outlook
As a result of the inclusion of special effects from the interest in STRABAG SE that will become effective in the third quarter, intensifying investment activity in organic growth in Eastern Europe, and under the assumption that there are no extraordinary claim events and that capital markets remain stable, the forecast for the profit (before taxes) for 2007 has been increased from EUR 270 million to EUR 320 million. This represents an increase of around 34% over the profit in 2006.

Reservations for future statements
This notification contains statements relating to the future development of UNIQA Group Austria. These statements represent estimates made on the basis of information available to us at the current time. If the assumptions on which they are based are not fulfilled, the actual results may vary from those currently expected. For this reason, we cannot accept liability for these statements.