euro adhoc: Generali Holding Vienna AG / Quarterly or Semiannual Financial Statements / Generali Vienna Group: Powerful growth in the CEECs (E)

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H1 2003: Growth in premium income, reduced burden of claims and costs. Expansion driven by Central and Eastern European markets. Life insurance portfolios grow by 27 per cent. Same dividend expected as for 2002.

The Generali Vienna Group, which operates in Austria, Hungary, the Czech Republic, Slovakia, Poland, Slovenia, Croatia and Romania, continued to grow during the first half of 2003. The group’s premium income from primary insurance business (preliminary figures) grew by 2.2 per cent to a total of EUR 1,319.4 million. Premium growth was above all driven by Central and Eastern Europe (the CEECs), where premium income increased by an impressive 13.1 per cent to EUR 297.3 million despite relatively rapid depreciation of virtually all the CEEC currencies. Including reinsurance business, the Generali Vienna Group recorded first-half premium income of EUR 1,400.7 million.

Group CEO Dietrich Karner summed up developments as follows: "Our group’s growth during the first half was above all driven by our subsidiaries in Central and Eastern Europe, where more dynamic economic growth generated pleasing increases in premium income." The CEECs now accounted for 22.5 per cent of the group’s aggregate premium income from primary insurance business. Karner expects the group’s consolidated full-year premium income to increase to EUR 2.6 billion in 2003.

In the absence of any significant change in the state of the capital markets in the period up to the end of this year, Generali expects its Austrian insurance subsidiaries to post significantly improved results. Results in Central and Eastern Europe should be as expected. The group’s projected consolidated profit for the year should permit the same distribution to shareholders for 2003 as for last year.

Powerful growth in non-life insurance lines
The Generali Vienna Group achieved powerful growth in the non-life insurance segment: First-half premium income from primary insurance business in the property/casualty segment increased by 6.8 per cent to EUR 929.2 million, and premium income from health insurance business grew by 3.3 per cent to EUR 84.8 million. In the life insurance segment, the Generali Vienna Group concentrated on regular premium business. Because of growing awareness of the need for private pension insurance and willing acceptance of Austria’s new state-subsidized pension and savings format, it proved possible to achieve growth of 8.9 per cent in premium income in that sector, which totalled EUR 258.0 million. Premium income from primary insurance business in the life insurance segment as a whole (Austria and the CEECs) fell by 9.9 per cent to EUR 305.4 million as the cutback in profit shares dented single-premium business.

Notable growth in life insurance portfolios
On 30 June 2003, the ten companies in the Generali Holding Vienna Group that provide life insurance services had total capital insured of EUR 21,838.2 million. That translates into an increase of 27.1 per cent compared with the previous year. The CEECs in particular gained considerably in importance, among other things because of portfolios taken over in Poland (Zurich Financial Services) and in Slovenia and Slovakia. Their share of total capital insured increased from nearly 17 per cent to 32.5 per cent (EUR 7,115.5 million).

Falling burden of claims and costs
Claims and benefit outpayments during the first six months of 2003 totalled EUR 882 million. A temporary 21.6 per cent fall-off in benefit outpayments in the life insurance segment led to an 8.5 per cent reduction in the overall burden of claims and benefits. The group was able to sustain the same non-life claims record as in the first half of 2002.
At the same time, it proved possible to cut the group-members’ aggregate first-half costs by 3.1 per cent to EUR 291.8 million.

Investments grew by EUR 120 million
The group’s consolidated investments grew by EUR 119.8 million or 1.5 per cent to EUR 8.4 billion during the first half of 2003. Current investment income (interest, rents, dividends, distributed fund earnings) was virtually static on the year at EUR 220.4 million. Here too, the unusually hefty depreciation of the CEECs currencies, including in particular the currencies of Hungary, Poland and the Czech Republic, had a significant impact.

Outlook: Success as a profit-orientated financial services provider During the second half of 2003, Generali will continue to focus closely on improving its underwriting results. Karner: "We are striving for underwriting profits and are therefore concentrating on our core insurance segment, which is being supplemented by alliances with members of the banking industry and the activities of our own Generali Bank."

Since July 2003, Generali Bank has been meeting all its customers’ needs with a full range of banking services in the current account, saving, investment, securities and loan segments. The bank offers excellent value for money. Karner: "Generali Bank is giving another powerful boost to our strong position in the market as a profit-orientated provider of a comprehensive line of financial services."

Further inquiry note:
Generali Holding Vienna AG
Mag. Christine Rohrer
Tel.: (++43-1) 534 01-2446
Fax: (++43-1) 534 01-1593
Tel: 534 01 0
FAX: 534 01 1593

Emittent: Generali Holding Vienna AG Landskrongasse 1-3 AT-1010 Wien Tel: 534 01 0 FAX: 534 01 1593 Email: WWW: ISIN: AT0000661350 WKN: 066135 Indizes: ATX, ATX Prime, WBI Börsen: official dealing Wiener Börse AG; free trade Berliner

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Wertpapierbörse, Bayerische Börse, Hamburger Wertpapierbörse, Baden-Württembergische Wertpapierbörse, Frankfurter Wertpapierbörse Branche: Insurance
Sprache: Englisch