Wiener Städtische Versicherung AG - VIENNA INSURANCE GROUP
euro adhoc: Wiener Städtische Allg. Vers. AG
other
Vienna Insurance Group
(Wiener Städtische Group) for the first time publishes European Embedded Value
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
04.05.2006
Please note: this is a translation; only the German version of this news release is legally binding.
The big international insurance groups use the embedded-value approach in addition to the annual financial statements in order to better reflect the nature of the insurance business as a long-term business when determining the economic value of the enterprise. The group embedded value (after taxes) for the Vienna Insurance Group (Wiener Städtische Group) was EUR 3.779 billion as of the valuation date December 31, 2005. This value is based exclusively on the business already written and does not take into account the enormous potential for future growth.
After the traditional embedded value had been published within the scope of last year's capital increase, the leading Austrian insurance group in Central and Eastern Europe for the first time, and as the only Austrian insurance group to do so, publishes a European Embedded Value. The European Embedded Value is a new market standard by which the Vienna Insurance Group reflects the most recent developments in the valuation of businesses by the capital market. This approach tries to represent as realistically as possible the environment in which insurance business is transacted.
To obtain the embedded value number, the value of in-force insurance business is calculated. According to international principles, the embedded value is made up of the net assets for life, health and P & C insurance and the present value of the combined future earnings from in-force business in the life and health lines.
In addition to these two components, the Vienna Insurance Group also determines the value of in-force business for parts of the Austrian P & C business. This value is determined on the basis of long-term relations with private customers who have taken out P & C contracts that are serviced via the important sales channel of the own salaried sales force. If this additional value of EUR 570 million were taken into account, the value of the enterprise would be as high as approx. EUR 4.35 billion.
Some 80 percent of the total group embedded value of EUR 3.779 billion is attributable to the Austrian insurance business, and the remaining portion to the CEE segment. Compared to 2004, the Vienna Insurance Group was able to increase the group embedded value for 2005 by EUR 1.613 billion (including the proceeds from the capital increase of December 2005 in the amount of approx. EUR 900 million). It should be noted in this connection that this rise could be achieved in spite of the increase in the actuarial reserve in life insurance by which the Vienna Insurance Group already fully took into account the application of the new Austrian mortality tables.
The value of the new business written in 2005, in the amount of EUR 74.8 million, which represents the earnings power of the life and health insurance lines and is included in the group embedded value, constitutes a noticeable increase over 2004.
Renowned consultants Deloitte & Touche LLP London have reviewed and fully confirmed the group embedded value of the Vienna Insurance Group.
Wiener Städtische Allgemeine Versicherung AG A-1010 Vienna, Schottenring 30 ISIN: AT0000908504
end of announcement euro adhoc 04.05.2006 07:28:47
Further inquiry note:
Mag. Barbara Hagen-Grötschnig
Wiener Städtische Unternehmenskommunikation
Tel.: +43 (0)50 350-21027
Fax: +43 (0)50 350 99-21027
E-Mail: b.hagen@staedtische.co.at
Branche: Insurance
ISIN: AT0000908504
WKN: A0ET17
Index: ATX Prime, ATX, WBI
Börsen: Wiener Börse AG / official market