Group Annual Report 2020 VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
Annual Financial Report 2020 | Vienna Insurance Group
Protecting
what
matters.
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
3
CONSOLIDATED FINANCIAL STATEMENTS 2020
Notes to the consolidated financial statements
Additional disclosures in accordance with the
Austrian Insurance Supervision Act (VAG)
Corporate governance report
Supervisory Board report
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162
177
Auditor’s report
Declaration by the Managing Board
Supervisory Board report
Annual financial statements
Our goal was to make the Group Annual Report as easy to read and as clear as
possible. For this reason we have not used phrasing such as “he/she”, “his/her”,
etc. It should be understood that the text always refers to women and men equally
without discrimination.
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Declaration by the Managing Board
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Auditor’s report
ANNUAL FINANCIAL STATEMENTS IN
ACCORDANCE WITH UGB
Annual Financial Statements 2020
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206
206
208
210
223
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229
230
Balance sheet
Income statement
Notes to the financial statements for 2020
Proposed appropriation of profits
Service
List of abbreviations
Notice – Address
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SERVICE INFORMATION
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Management report
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MANAGEMENT REPORT TO THE
ANNUAL FINANCIAL STATEMENTS IN
ACCORDANCE WITH UGB
Company profile
Management report 2020
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VIG Holding business development
Risk report
Internal control and risk management
system in the accounting process
Disclosures in accordance with § 243a
and § 243(3)(3) UGB
Disclosures on outsourcing in accordance
with § 156(1)(1) in conjunction with
§ 109 VAG
Outlook
Business development and economic position
Economic environment
Legal environment
Group business development and fi nancial
performance indicators
Branch offi ces
Business development and fi nancial performance
indicators by segment
Business development by balance sheet unit
Other mandatory disclosures
Research and development
Holdings, purchase and sale of own shares
Internal control and risk management system in
the accounting process
Capital, share, voting and control rights and
associated agreements
Consolidated non-fi nancial report
Corporate governance
Outsourcing disclosures
Expected development and risks of the Group
Signifi cant risks and uncertainties
Expected development – Outlook for 2021
Group management report
Contents
Consolidated fi nancial statements
Consolidated balance sheet
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated shareholders’ equity
Consolidated cash flow statement
GROUP MANAGEMENT REPORT 2020
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Annual Financial Report 2020
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
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Group
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report
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Annual Financial Report 2020
Business development and economic position
ECONOMIC ENVIRONMENT
The COVID-19 pandemic was unquestionably the dominan
t
topic in 2020, and not just for the economy. Massive, repeated
measures to contain the spread of the virus had a dramatic
effect on growth. The International Monetary Fund (IMF) esti-
mates that global GDP dropped sharply by -3.5% in 2020.
The COVID-19 pandemic also affected, and continues to
affect Central and Eastern Europe. Consumption and in-
vestment decreased significantly in 2020, and foreign trade
recorded an overall drop in the double-digit range. Do-
mestic and cross-border demand also suffered consider-
ably, especially in the 2
nd
quarter of 2020. Although the
plunge in economic output due to containment measures
in the spring of 2020 was unprecedented, the subsequent
recovery was just as unique in terms of scale.
The large share of industrial production and exports in
Central and Eastern Europe was the main reason for the
sharp decline in the spring. Containment measures im-
posed later in the year against the COVID-19 pandemic had
a significantly smaller effect, with industrial production in
particular proving to be highly resistant during the second
wave of infections. This was primarily because foreign
demand remained stable and global value chains were not
disrupted again.
According to preliminary estimates by Erste Group analysts,
the Serbian economy recorded the smallest economic
downturn (real GDP in 2020: -1.0%). This positive result
was due to the imposition of relatively short-term contain-
ment measures and massive political support aimed at
dampening the effects of the crisis. Croatia, which is highly
dependent on tourism, was at the other end of the scale,
recording the largest drop in GDP in the region (real GDP in
2020: -8.5%). Austria was also one of the weaker countries
in terms of growth due to the effects on tourism (real GDP
in 2020: -7.2%). Overall, Central and Eastern Europe is
expected to show a sharp -4.5% decline in growth in 2020.
Even though unemployment rates rose in the region, they
remain moderate compared to many Western European
markets. Government programmes and robust use of short-
time work helped in this case. The simultaneous increase in
expenditures and drop in revenues naturally left their mark
on government budgets. Regional currencies also wea-
kened during the year. The Hungarian forint, in particular,
came close to its historic lows. In spite of the currency
effects, inflation was not affected, which gave regional
central banks leeway to provide support. Hungary, Serbia
and Romania reduced their interest rates and other coun-
tries may follow. The most dramatic interest rate reduction
was undoubtedly the 200 basis point reduction by the
Czech National Bank.
LEGAL ENVIRONMENT
COVID-19 LEGISLATION
Both European and national legislators enacted many
pieces
of legislation and regulation to manage or mitigate the effects
of the COVID-19 pandemic since its outbreak in Europe at the
beginning of 2020. This also had significant effects on VIG
Holding and the Group. In Austria, for example, company law
was changed to allow board meetings to be held without the
physical presence of participants, and the deadlines for
holding general meetings and preparing annual financial
statements were extended. Reporting deadlines were also
extended in Austrian insurance supervisory law and for judicial
and administrative proceedings. Legal changes with respect
to customer areas, workplaces and events, and the lockdown
restrictions also had major effects on VIG Holding and its
Group companies.
SUSTAINABLE FINANCE
The European Commission aims to make Europe the first
climate-neutral continent in the world by 2050 under its
“European Green Deal” initiative. This political goal will be-
come legally binding on all Member States and therefore
indirectly applicable to VIG Holding and the Group under
the first European Climate Law.
A number of directly applicable European regulations were
adopted in 2019 and 2020 to achieve this goal, in particular
the so-called “Taxonomy Regulation” and “Disclosure Re-
gulation”. The first creates a system for classifying envi-
ronmentally sustainable activities and represents a mini-
mum standard for classifying VIG Holding and Group invest-
ments starting as of 1 January 2022. The second applies to
Group companies that offer insurance-based investment
products and includes pre-contractual and periodic
information duties to make disclosures at both the company
G
roup management report
2020
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
7
and product levels with respect to sustainability risks and
the adverse sustainability impacts of investments for all life
insurance policies concluded on or after 10 March 2021.
DIGITAL RESILIENCE
Regulating the digital security of the financial sector was
also a focus of attention at the European level during the
reporting period. In September 2020, the European Com-
mission published a legislative proposal for a Digital Oper-
ational Resilience Act (DORA) that is aimed at requiring
financial market participants to implement all the security
measures needed to mitigate cyberattacks and other risks.
Based on current information, it is not expected to be
applicable before 2023.
BREXIT
31 December 2020 was the last day of the transition period
after the withdrawal of the United Kingdom of Great Britain
and Northern Ireland from the European Union that took
place on 31 January 2020. A Trade and Cooperation
Agreement was concluded to govern the future relationship
between the United Kingdom of Great Britain and Northern
Ireland and the European Union, but there are still questions
that need to be clarified, particularly in the area of financial
services. With respect to direct insurance, the loss of the
freedom to provide services means the possibilities for
offering and providing reciprocal services are now very
limited. Some countries have therefore adopted transitional
legislation. With respect to reinsurance, it remains to be
seen whether the European Commission will issue a
decision on the equivalence of supervisory regimes and
therefore whether reinsurance companies with registered
offices in the United Kingdom are to be treated the same as
those with registered offices in the European Union.
GROUP BUSINESS DEVELOPMENT AND FINANCIAL
PERFORMANCE INDICATORS
GENERAL INFORMATION
The around 50 VIG insurance companies operate in the
following reporting segments: Austria, Czech Republic, Slo-
vakia, Poland, Romania, Baltic states, Hungary, Bulgaria,
Turkey/Georgia, Remaining CEE, Other Markets and Cent-
ral Functions. These twelve segments are explained in the
segment reporting section.
The Remaining CEE segment includes the countries of
Albania incl. Kosovo (a branch of an Albanian company is
located in Kosovo), Bosnia-Herzegovina, Croatia, Moldova,
North Macedonia, Serbia and Ukraine.
The Montenegro and Belarus markets were not included in
the scope of consolidation in 2020 due to immateriality.
More information on the scope of consolidation and consol-
idation methods is provided on page 68 of the notes to the
consolidated financial statements. The notes to the con-
solidated financial statements provide detailed information
on changes in the scope of consolidation starting on page
69.
VIG Insurance Group operates with more than one com-
pany and brand in most of its markets. The market pre-
sence of each company in a country is also aimed at dif-
ferent target groups. Their product portfolios differ accord-
ingly. Use of this multi-brand strategy does not mean, how-
ever, that potential synergies remain unexploited. Structural
efficiency and the cost-effective use of resources are exam-
ined regularly. Back offices that perform administrative tasks
for more than one company are already being used suc-
cessfully in many countries. Specific country responsibilities
also exist at Managing Board level to ensure uniform man-
agement of each country. Mergers of insurance companies
are considered if the additional synergies that can be
achieved outweigh the benefits of a diversified market pre-
sence.
To improve readability, company names have been short-
ened throughout the entire report. A list of full company
names is provided starting on page 236. In order to avoid
duplicate information, reference will be made below to ap-
propriate information in the notes. Changes in significant
balance sheet and income statement items are presented
in both the segment reporting and the notes to the financial
statements. Additional disclosures in the management re-
port below are intended to explain these data in more detail.
8
Annual Financial Report 2020
FINANCIAL PERFORMANCE INDICATORS
The key financial performance indicators that form t
he basis
for assessing the business development are presented below.
KEY FIGURES FROM THE CONSOLIDATED INCOME STATEMENT
2020
2019
∆ in %
∆ absolute
in EUR millions
Premiums written – gross 10,428.5
10,399.4
0.3%
29.0
Net earned premiums –
retention
9,336.6
9,317.9
0.2%
18.7
Expenses for claims and
insurance benefits – retention -7,030.6 -7,262.7 -3.2% 232.2
Acquisition and administrative
expenses
-2,328.5 -2,293.2 1.5%
-35.3
Financial result excl. result
from shares in at equity
consolidated companies 624.8
986.8
-36.7% -362.0
Result from shares in at equity
consolidated companies -28.5 24.1
-218.4% -52.6
Other income and expenses -228.0 -251.2 -9.3% 23.3
Result before taxes 345.9
521.6
-33.7%
-175.7
Premium volume
A detailed disclosure of premium development is included
in Note 15. Premiums written – gross in the notes to the
consolidated financial statements.
VIG Insurance Group wrote EUR 10,428.5 million in premi-
ums in 2020, thereby keeping premiums stable at the pre-
vious year level with a slight increase of 0.3% (2019:
EUR 10,399.4 million). It retained EUR 9,415.8 million of the
gross premiums written (2019: EUR 9,420.7 million).
EUR 1,012.6 million was ceded to reinsurance companies
(2019: EUR 978.7 million).
The other property and casualty (+4.7%) and health insur-
ance (+1.4%) lines of business recorded particularly good
premium increases in 2020. Premiums growth was especially
strong in the Austria (+2.2%), Poland (+5.7%) and Romania
(+5.5%) segments. In the Remaining CEE segment, Croatia
(+4.0%), and Serbia (+5.5%) showed particularly dynamic
premium gains. Overall, the Group generated 60.2% of its
premiums outside Austria in 2020.
Net earned premiums rose 0.2%, from EUR 9,317.9 million
in 2019 to EUR 9,336.6 million in 2020. Net reinsurance
cessions were EUR 1,005.8 million (2019: EUR 944.7 mil-
lion).
Expenses for claims and insurance benefits
A detailed disclosure of expenses for claims and insurance
benefits is included in Note 19. Expenses for claims and
insurance benefits – retention in the notes to the consolida-
ted financial statements.
Group expenses for claims and insurance benefits less rein-
surers’ share were EUR 7,030.6 million in 2020, represent-
ing a year-on-year decrease of 3.2% (2019: EUR 7,262.7
million).
Acquisition and administrative expenses
A detailed disclosure of acquisition and administrative ex-
penses is included in Note 20. Acquisition and admini-
strative expenses in the notes to the consolidated financial
statements.
Acquisition and administrative expenses for all consol-
idated VIG companies increased 1.5% year-on-year to
EUR 2,328.5 million in 2020 (2019: EUR 2,293.2 million).
This was mainly due to an increase in commissions and
operating expenses.
Financial result
A detailed disclosure of the financial result (excluding shares
in at equity consolidated companies) is included in Note 16.
Financial result excl. result from shares in at equity con-
solidated companies in the notes to the consolidated finan-
cial statements.
The financial result (incl. the result from shares in at equity
consolidated companies) was EUR 596.3 million in 2020.
The 41.0% drop compared to the same period in the pre-
vious year was due to COVID-19-related impairments and
the change in consolidation method of the non-profit soci-
eties starting as of 31 July 2019.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
9
Result before taxes
The Group result before taxes was EUR 345.9 million in
2020 (2019: EUR 521.6 million). The 33.7% decrease in
profits was mainly due to a decrease in the financial result.
It also takes into account goodwill impairments totalling
EUR 118.1 million that were performed in the first half of
2020 in Bulgaria, Croatia and Georgia. This impairment was
the result from the event-related goodwill review in con-
nection with COVID-19.
Investments
A brief presentation of the investments is included in the
notes to the consolidated financial statements starting on
page 80.
BREAKDOWN OF INVESTMENTS 2020
Total investments (including cash and cash equivalents) were
EUR 36,646.3 million as of 31 December 2020. This was
higher than the previous year value of EUR 35,899.1 million
as of 31 December 2019.
The investments include all property, all shares in at equity
consolidated companies and all financial instruments,
using the look-through approach for consolidated special
funds, as well as other fund investments allocated to the
asset classes. This does not include investments for
unit-linked and index-linked life insurance, which decreased
7.6% in 2020, from EUR 8,620.3 million in 2019 to
EUR 7,968.0 million, mainly due to an increase in policy
expirations in Austria.
Shareholders’ equity
Shareholders’ equity increased 1.8% to EUR 5,285.8 million
in 2020 (2019: EUR 5,190.7 million). This development was
primarily due to the positive perfornance of the available for
sale financial instruments recognised directly in equity and re-
invested profits. Shareholders’ equity was negatively affected
by exchange rate changes affecting subsidiaries accounted
for in foreign currencies. The shareholders’ equity attributable
to shareholders increased from EUR 5,074.1 million in 2019
to EUR 5,162.7 million in 2020 for the reasons indicated
above.
Underwriting provisions
A detailed disclosure of underwriting provisions is included
in Note 10. Underwriting provisions – gross in the notes to
the consolidated financial statements.
Underwriting provisions (excluding underwriting provisions
for unit-linked and index-linked life insurance) were
EUR 32,230.1 million as of 31 December 2020, repre-
senting an increase of 1.1% compared to the previous year
(2019: EUR 31,886.1 million).
Cash flow
The cash flow from operating activities decreased in 2020,
falling from EUR 1,298.8 million in 2019 to EUR 310.6 million
in 2020. This was primarily due to an increase in expirations
of unit-linked and index-linked life insurance policies.
Financial instruments for unit-linked and index-linked life
insurance were sold for the same reason, causing the cash
flow from investing activities to increase from EUR -886.0 mil-
lion in 2019 to EUR 98.6 million in 2020. Financing activities
produced a cash flow of EUR -123.6 million in 2020 (2019:
EUR -240.3 million). The positive development year-on-year
was mainly due to the fact that the non-profit societies made
large loan repayments in the first seven months of the
previous year. The Group had cash and cash equivalents of
EUR 1,745.1 million at the end of 2020 (2019: EUR 1,443.4
million). The amount of interest and dividends included was
EUR 754.5 million in 2020 (2019: EUR 822.3 million).
Property 7.1%
(7.0%)
Loans 7.0%
(6.7%)
Other Investments 7.5%
(7.3%)
Shares 4.2% (4.5%)
Bonds 72.7%
(73.0%)
Affiliated companies
1.5% (1.5%)
2019 values in parentheses
10
Annual Financial Report 2020
Earnings per share
E
arnings per share is a key figure equal to the result for the
period (less non-controlling interests) divided by the aver-
age number of shares outstanding. The number of shares
remained unchanged compared to the previous year.
Earnings per share were EUR 1.81 in 2020 (2019: EUR 2.59).
This therefore represented a decrease of 30.1% compared
to the previous year.
Return on equity (RoE)
Return on equity (RoE) measures the profitability of the
Group by expressing the result before taxes as a ratio of the
capital employed. This ratio is calculated by dividing the re-
sult before taxes and non-controlling interests by the aver-
age shareholders’ equity. Shareholders’ equity adjusted for
a provision for unrealised gains and losses is used for this
purpose.
The Group earned a return on equity before taxes of 7.9%
in 2020 (2019: 10.5%).
Return on Equity 31.12.2020
31.12.2019
31.12.2018
in EUR millions
Shareholders' equity 5,285.8
5,190.7
5,835.7
Unrealised gains and losses
recognised in equity
-906.6 -764.3 -370.1
Adjusted shareholders’ equity 4,379.1
4,426.4
5,465.6
Average adjusted shareholders’
equity 4,402.8
4,946.0
Result before taxes 345.9
521.6
RoE in % 7.9
10.5
Combined ratio significantly below 100%
The combined ratio is calculated as the sum of all under-
writing income and expenses, and net payments for claims
and insurance benefits, including the net change in under-
writing provisions, divided by net earned premiums in the
property and casualty balance sheet unit.
The Group combined ratio improved to 95.0% in 2020, pri-
marily due to the positive development in the Austria and
Czech Republic segments (2019: 95.4%).
Combined ratio 2020
2019
in
EUR millions
Net earned premiums – retention 5,358.8
5,220.4
Expenses for claims and insurance benefits –
retention
-3,367.4 -3,325.0
Acquisition and administrative expenses,
including other underwriting income and
expenses -1,724.6 -1,653.7
Total expenses -5,092.0 -4,978.7
Combined ratio in % 95.0
95.4
BRANCH OFFICES
VIG insurance companies have branch offices in Germany,
France, Italy, Kosovo, Slovenia, the Baltic countries of Esto-
nia, Latvia and Lithuania, and the Northern European coun-
tries of Sweden, Norway and Denmark. Information on ex-
isting branch offices and any significant changes compared
to the previous year are discussed in more detail for the
applicable regional segments in the section below. A list of
the addresses of the insurance companies and branch of-
fices is also provided in the Group Annual Report 2020 on
page 206.
BUSINESS DEVELOPMENT AND FINANCIAL
P
ERFORMANCE INDICATORS BY SEGMENT
Developments in the segments Austria, Czech Republic,
Slovakia, Poland, Romania, Baltic states, Hungary, Bulgaria,
Turkey/Georgia, Remaining CEE, Other Markets and Central
Function are explained below. The discussion focuses
on presenting business developments in these segments
and outlines areas of change in the various insurance
markets. A detailed presentation of the consolidated income
statement by regional segments and premiums written
by regional segments and lines of business is provided on
page 77 in the notes to the consolidated financial
statements and in Note 15. Premiums written – gross on
page 131.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
11
PREMIUMS WRITTEN BY SEGMENT
2020
2019
∆ in %
∆ absolute
in EUR millions
Austria 4,030.7
3,943.3
2.2%
87.4
Czech Republic 1,732.4
1,745.8
-0.8%
-13.4
Slovakia 729.5
798.9
-8.7%
-69.3
Poland 1,196.2
1,132.0
5.7%
64.3
Romania 493.8
468.2
5.5%
25.6
Baltic states 492.9
500.3
-1.5%
-7.4
Hungary 287.8
289.5
-0.6%
-1.8
Bulgaria 199.6
223.9
-10.8%
-24.3
Turkey/Georgia 251.7
234.9
7.1%
16.8
Remaining CEE
1
439.6
446.9
-1.6%
-7.3
Other Markets
2
280.0
380.4
-26.4%
-100.4
Central Functions
3
1,736.5
1,623.5
7.0%
113.0
Consolidation -1,442.3
-1,388.2
3.9%
-54.1
Total 10,428.5
10,399.4
0.3%
29.0
1
Remaining CEE: Albania incl. Kosovo, Bosnia-Herzegovina, Croatia, Moldova, North Macedonia,
Serbia, Ukraine
2
Other Markets: Germany, Liechtenstein
3
Central Functions: VIG Holding, VIG Re, Wiener Re, VIG Fund, non-profit societies, corporate IT
service providers and intermediate holding companies
RESULT BEFORE TAXES BY SEGMENT
2020
2019
∆ in %
∆ absolute
in EUR millions
Austria 178.7
207.3
-13.8%
-28.6
Czech Republic 192.1
172.5
11.4%
19.6
Slovakia 51.4
48.9
5.1%
2.5
Poland 22.6
69.2
-67.4%
-46.7
Romania 14.2
-101.8
n/a
116.1
Baltic states 9.5
7.7
24.1%
1.8
Hungary 8.4
8.7
-2.6%
-0.2
Bulgaria -36.7
15.8
n/a
-52.5
Turkey/Georgia -0.9
6.7
n/a
-7.5
Remaining CEE
1
-15.7
27.1
n/a
-42.7
Other Markets
2
26.7
22.6
18.5%
4.2
Central Functions
3
-107.6
36.5
n/a
-144.0
Consolidation 3.0
0.7
> 100%
2.3
Total 345.9
521.6
-33.7%
-175.7
1
Remaining CEE: Albania incl. Kosovo, Bosnia-Herzegovina, Croatia, Moldova, North Macedonia,
Serbia, Ukraine
2
Other Markets: Germany, Liechtenstein
3
Central Functions: VIG Holding, VIG Re, Wiener Re, VIG Fund, non-profit societies, corporate IT
service providers and intermediate holding companies
AUSTRIA
AUSTRIAN INSURANCE MARKET
The top 5 insurance groups in the country generated
around 72% of the premium volume in Austria in the 1
st
to
3
rd
quarters of 2020. The two largest insurance groups ge-
nerated around 45%.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The Austrian insurance companies generated a total pre-
mium volume of EUR 13.9 billion in the first three quarters
of 2020. Premiums rose strongly at the beginning of 2020,
recording an increase of 4.1% in the 1
st
quarter of 2020
according to the Austrian Insurance Association (VVO). In
the second and third quarters of 2020, the sharp economic
downturn caused by the COVID-19 pandemic also had
an effect on the insurance industry. This led to a moderate
year-on-year increase of 2.0% being recorded for the
1
st
to 3
rd
quarters of 2020. The increase was due to growth
in property and casualty insurance (+2.7%) and health in-
surance (+3.9%). Life insurance recorded its fifth con-
secutive year of losses with a slight decrease of 0.3%.
Motor own damage insurance, which recorded a year-on-
year increase of 5.0%, was the main driver of growth in
property and casualty insurance. The positive change was
due to an increase in the number of policies and a change in
+3.9%
+2.7%
Source: Austrian Insurance Association
EUR 13.9 bn
EUR 8.1 bn
-0.3%
9M 2020 figures
+2.0%
Life
Property and
casualty
Total Health
EUR 1.8 bn
EUR 4.0 bn
12
Annual Financial Report 2020
prices. Motor third party liability recorded an increase of
0.8%. The non-motor lines of business rose 2.8%, with
travel insurance recording a sharp decline of 52.5% due to
COVID-19.
While regular premium life insurance fell 2.1% in the 1
st
to
3
rd
quarters of 2020, single premium life insurance rose.
After declining strongly in the previous four years, single pre-
mium business recorded double-digit growth (+13.5%) in
the first nine months of 2020.
Health insurance premiums recorded a year-on-year in-
crease of 3.9%.
According to Axco Global Statistics, a per capita average of
EUR 1,967 was spent on insurance in Austria in 2019. Of
this, EUR 1,356 was spent in the non-life insurance area
and EUR 611 in the life insurance area.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN AUSTRIA
VIG Insurance Group is represented by the two insurance
companies Wiener Städtische and Donau Versicherung in
Austria. s Versicherung, which was merged with Wiener
Städtische in 2018, continues to exist as a brand for banc-
assurance customers. Wiener Städtische also operates via
branches in Italy and Slovenia. VIG Holding operates out
of Austria as a reinsurer of the insurance group and as an
insurer in the cross-border corporate business. Since 2019,
it has also been active in the traditional industrial insurance
business through branch offices in the Northern European
countries of Sweden, Norway and Denmark. VIG Holding is
assigned to the Central Functions segment.
With a market share of 23.8% the VIG insurance companies
represent Austria’s largest insurance group. Together they
hold first place in the market in property and casualty and
in life insurance, and second place in health insurance.
FINANCIAL PERFORMANCE INDICATORS IN THE
AUSTRIA SEGMENT
Premium development
The insurance companies of VIG Insurance Group in Austria
wrote EUR 4,030.7 million in premiums in 2020 (2019:
EUR 3,943.3 million). This corresponds to a year-on-year
increase of 2.2%, which was primarily due to the good
performance recorded by other property and casualty
insurance. Net earned premiums were EUR 3,275.6 million
in 2020 (2019: EUR 3,226.2 million).
PREMIUMS BY LINE OF BUSINESS
Result before taxes
The Austria segment generated a result before taxes of
EUR 178.7 million in 2020 (2019: EUR 207.3 million). This
corresponds to a decrease of 13.8%, which was primarily
the result of COVID-19-related impairments.
Source: Austrian Insurance Association; as of 9M 2020
23.8%
VIG ranked 1
st
20.9%
Ranked 2
nd
15.1%
Ranked 3
rd
40.2%
Other participants
Per cent of total premium volume
Health 11.2%
(11.0%)
Other property and casualty
35.8% (35.1%)
Life – single premium
7.3% (6.9%)
MTPL
8.0% (8.1%)
Values for 2019 in parentheses
Motor own damage
7.5% (7.5%)
Life – regular premium
30.2% (31.4%)
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
13
Combined ratio
The combined ratio improved to 92.7% in 2020, mainly due
to a significant increase in reinsurance commissions (2019:
93.5%).
CZECH REPUBLIC
CZECH INSURANCE MARKET
The insurance market in the Czech Republic continued to
be dominated by the top 5 insurance groups in 2020, which
together continue to generate around 83% of total premium
volume.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The growth of the Czech insurance market continued in the
first nine months of 2020, in spite of the COVID-19 pandemic.
Premium volume rose 3.6% year-on-year (based on the
calculation method of the Czech Insurance Association ČAP)
from CZK 102.4 billion to CZK 106.1 billion. The increase
was due to growth in both the non-life and life sectors.
Premiums rose 4.4% in the non-life sector. The increase
was driven by gains in the dominant lines of business in
this sector, namely motor third party liability (+7.4%) and
motor own damage insurance (+7.0%). Both lines continue
to benefit from a growing number of newly insured vehicles
and rising prices. The non-motor lines of business recorded
a moderate increase of 1.4%.
The life insurance sector recorded year-on-year growth of
2.0% in the 1
st
to 3
rd
quarters of 2020. This sector is dom-
inated by regular premium life insurance, which generated
an increase of 2.7%, while the considerably smaller single
premium business fell strongly by 19.6%.
According to Axco Global Statistics, a per capita average of
EUR 576 was spent on insurance premiums in the Czech
Republic in 2019. EUR 383 of this amount was for non-life
insurance and EUR 193 for life insurance.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN THE CZECH REPUBLIC
VIG Insurance Group is represented by two companies,
Kooperativa and ČPP, in the Czech Republic.
The 30.7% market share made it the largest insurance
group in the Czech Republic in the 1
st
to 3
rd
quarters of 2020.
VIG Insurance Group also held 1
st
place in the life insurance
sector, and second place in the non-life sector.
The Group reinsurance company VIG Re, which has its
headquarters in Prague, is assigned to the Central Func-
tions segment.
Non-Life
Source: Czech Insurance Association
+3.6%
+4.4%
+2.0%
Total Life
9M 2020 figures
CZK 106.1 bn
CZK 34.5 bn
CZK 71.6 bn
Source: Czech Insurance Association; as of 9M 2020
10.9%
Ranked 3
rd
31.3 %
Other participants
Per cent of total premium volume
30.7
%
VIG ranked 1
st
27.1%
Ranked 2
nd
14
Annual Financial Report 2020
FINANCIAL PERFORMANCE INDICATORS IN THE
C
ZECH REPUBLIC SEGMENT
Premium development
Premiums written in the Czech Republic segment remained
almost unchanged at EUR 1,732.4 million in 2020 (2019:
EUR 1,745.8 million). The small decrease of 0.8% was
mainly due to negative exchange rate effects. After adjust-
ing for this effect, the Czech Republic segment recorded an
increase of 2.2% in premiums written. Net earned premi-
ums were EUR 1,295.5 million in 2020, representing a de-
crease of 1.3% compared to the previous year.
PREMIUMS BY LINE OF BUSINESS
Result before taxes
A result before taxes of EUR 192.1 million was recorded
in the Czech Republic segment in 2020 (2019:
EUR 172.5 million). This represents an 11.4% year-on-year
increase, which primarily resulted from an improved
underwriting result in the life insurance as well as a positive
development in the combined ratio.
Combined ratio
Due to significantly higher reinsurance commissions in the
motor lines of business, the combined ratio continued to
decline compared to the previous year to an excellent 90.7%
in 2020 (2019: 92.0%).
SLOVAKIA
SLOVAKIAN INSURANCE MARKET
The Slovakian insurance market is highly concentrated. The
two largest insurance groups had a market share of around
56% in the first three quarters of 2020. The five largest in-
surance groups even generated around 77% of the premi-
um volume.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
Premium volume was around EUR 1.9 billion in the first
three quarters of 2020, representing a year-on-year de-
crease of 3.9%. Both non-life (-2.8%) and life insurance
(-4.9%) contributed to this decline.
According to the National Bank of Slovakia (NBS), the
decrease in the non-life sector was partly due to the marine,
aviation and transport (-9.3%), health (-37.2%) and credit
and guarantee (-20.6%) lines of business. The motor lines,
on the other hand, were the growth drivers, with motor third
party liability rising 3.5% and motor own damage insurance
generating a solid gain of 5.9% in the first three quarters of
2020. In addition to the COVID-19 pandemic, volume was
also depressed by the 8% tax introduced on non-life in-
surance products (except motor third party liability insur-
ance) in the previous year.
Health
1.1% (1.0%)
Other property and casualty
28.4% (28.6%)
Life – single premium
2.0% (2.5%)
MTPL
18.0% (17.5%)
Values for 2019 in parentheses
Motor own damage
14.1% (14.1%)
Life – regular premium
36.4% (36.3%)
Source: Slovak Insurance Association
-3.9%
-2.8 %
-4.9%
Total
Non-Life Life
9M 2020 figures
EUR 1.9 bn
EUR 0.9 bn
E
UR 1.0 bn
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
15
According to NBS, the decrease in life insurance was the
result of a 14.5% drop in life insurance with profit partici-
pation and a decrease in unit-linked and index-linked life in-
surance (-8.7%) compared to the same period in the pre-
vious year.
According to Axco Global Statistics, a per capita average of
EUR 417 was spent on insurance premiums in Slovakia in
2019. EUR 232 of this amount was spent on non-life insur-
ance and EUR 185 on life insurance.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN SLOVAKIA
Two VIG insurance companies, Kooperativa and Kom-
munálna, are represented in the Slovakian insurance market.
Their market share of 29.6% puts them in first place in
Slovakia. They hold second place for non-life insurance and
first place for life insurance.
FINANCIAL PERFORMANCE INDICATORS IN THE
SLOVAKIA SEGMENT
Premium development
The VIG insurance companies in the Slovakia segment wrote
EUR 729.5 million in premiums in 2020, a decrease of 8.7%
compared to the previous year (2019: EUR 798.9 million).
This was primarily due to a decrease in premiums in the life
lines of business. Net earned premiums were EUR 597.3 mil-
lion in 2020 (2019: EUR 671.6 million).
PREMIUMS BY LINE OF BUSINESS
Result before taxes
The Slovakian companies generated a result before taxes
of EUR 51.4 million in 2020 (2019: EUR 48.9 million). Com-
pared to the previous year, this corresponds to an increase
of 5.1%, which was due to the positive development in the
combined ratio.
Combined ratio
The combined ratio for the VIG insurance companies in Slo-
vakia improved to an excellent 89.0% in 2020 (2019: 97.1%).
The improvement was mainly the result of better claims
development, which was due to fewer large losses in other
property and casualty insurance, among other things.
Source: Slovak Insurance Association; as of 9M 2020
29.6%
VIG ranked 1
st
26.3%
Ranked 2
nd
10.8%
Ranked 3
rd
33.3%
Other participants
Per cent of total premium volume
Health
2.3% (1.7%)
Other property and casualty
15.1% (13.9%)
Life – single premium
24.3% (28.4%)
MTPL
20.6% (19.1%)
Values for 2019 in parentheses
Motor own damage
14.5% (13.3%)
Life – regular premium
23.2% (23.6%)
16
Annual Financial Report 2020
POLAND
POLISH INSURANCE MARKET
The five largest insurance groups in the country generated
around 73% of the total premium volume in the first three
quarters of 2020. The three largest insurance groups con-
tributed around 59%.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The Polish insurance market recorded a slight year-on-year
decrease of 1.0% in local currency terms in the 1
st
to 3
rd
quarters of 2020. The decrease was largely due to the life
insurance line of business (-3.2%). Non-life insurance
remained stable, with an increase of 0.1%.
Premium volume in the motor lines of business, which dom-
inate the non-life business with a share of around 56%,
decreased in the first nine months of 2020. Motor third party
liability insurance fell 2.9%, and motor own damage insur-
ance recorded a decrease of 0.1%. The non-motor lines of
business, on the other hand, predominantly showed in-
creases, with fire and natural hazards insurance recording
impressive growth of 9.9%. Health insurance products in
the non-life sector fell 25.1% compared to the same period
in the previous year.
The decrease in life insurance in the 1
st
to 3
rd
quarters of 2020
was mainly the result of a sharp drop in single premium busi-
ness (-24.1%). Premiums from regular premium life insurance,
in contrast, grew 2.6%.
According to preliminary data from Axco Global Statistics,
an average of EUR 374 per capita was spent on insurance
in Poland in 2019. Out of this, EUR 282 was spent on non-
life insurance and EUR 92 on life insurance.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN POLAND
VIG Insurance Group is represented by Compensa Life and
Non-Life, InterRisk, Vienna Life and Wiener TU in the Polish
market. InterRisk also invested in the mutual insurance
association TUW “TUW” in 2019. In November 2020, VIG
Insurance Group signed a share purchase agreement with
the Dutch company Aegon N.V. to acquire its companies in
Hungary, Poland, Romania and Turkey. The acquisition will
allow VIG Insurance Group to strengthen its market position
and significantly expand its potential in the pension fund
business in Poland. The acquisition is expected to be
formally concluded in the 2
nd
half of 2021. The transaction
is subject to the approvals required under supervisory and
competition law.
VIG Insurance Group holds fourth place in the overall
market with a market share of 8.5%. In the non-life sector it
is positioned as fourth in the ranking of top insurers, and in
the life sector it is positioned as fifth.
Non-Life
Source: Financial Market Authority Poland
+0.1%
-3.2%
Total Life
9M 2020 figures
PLN 46.5 bn
PLN 15.4 bn
PLN 31.1 bn
-1.0%
Source: Financial Market Authority Poland; as of 9M 2020
8.5%
VIG ranked 4
th
12.7%
Ranked 2
nd
35.8%
Ranked 1
st
32.2%
Other participants
Per cent of total premium volume
10.8%
Ranked 3
rd
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
17
FINANCIAL PERFORMANCE INDICATORS IN THE
POLAND SEGMENT
Premium development
The Poland segment recorded total premiums written
of EUR 1,196.2 million in 2020, representing an increase
of 5.7% compared to the previous year (2019:
EUR 1,132.0 million). This increase was mainly due to
growth in other property and casualty, motor third party
liability and single premium life insurance. Net earned
premiums were EUR 926.6 million in 2020, 4.5% higher
than in the previous year (2019: EUR 886.5 million).
PREMIUMS BY LINE OF BUSINESS
Result before taxes
The result before taxes was EUR 22.6 million in 2020 (2019:
EUR 69.2 million). The decrease of 67.4% was due to
provisions for expenses arising from a change in the sur-
render terms for the repurchase of certain life insurance
products, as well as the positive effects of an asset tax
refund in the previous year.
Combined ratio
The combined ratio continued to be at a good level of 96.7%
in 2020 (2019: 94.8%).
ROMANIA
ROMANIAN INSURANCE MARKET
The top 5 insurance groups generated around 73% of the
total premium volume in Romania in the first three quarters of
2020. The two largest insurance groups generated around
40%.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The Romanian insurance market grew in the first nine months
of 2020, recording a 4.8% increase in premium volume in
local currency terms. This was primarily due to a 6.3%
increase in non-life insurance. Life insurance recorded a small
decrease (-1.3%).
The non-life sector continues to be strongly dominated by
the motor lines of business. Motor third party liability insur-
ance, which accounts for around 45% of the non-life busi-
ness, recorded year-on-year growth of 4.6%. A small in-
crease was also recorded for motor own damage insurance
(+3.0%). The non-motor lines of business also showed an
increase of 12.5%.
Health
2.2% (2.2%)
Other property and casualty
34.1% (32.9%)
Life – single premium
8.9% (7.8%)
MTPL
24.8% (24.6%)
Values for 2019 in parentheses
Motor own damage
16.0% (17.1%)
Life – regular premium
14.0% (15.4%)
Non-Life
Source: Financial Supervisory Authority ASF
+4.8%
+6.3%
-1.3%
Total Life
9M 2020 figures
RON 8.5 bn
RON 1.6 bn
RON 6.9 bn
18
Annual Financial Report 2020
In the life line of business, unit-linked and index-linked life
insurance was down 7.6% compared to the same period in
the previous year. Traditional life and annuity insurance,
which represents 63% of the life business, rose 0.8%.
According to Axco Global Statistics, the insurance density
in Romania was EUR 120 per capita in 2019. EUR 97 of this
amount was for non-life insurance and EUR 23 for life
insurance.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN ROMANIA
Three VIG insurance companies, the non-life insurer
Omniasig, composite insurer Asirom and life insurer BCR
Life, operate in the Romanian insurance market. Their mar-
ket share of 20.1% makes the VIG insurance companies the
market leader in Romania. They hold the second place for
both life insurance and non-life insurance. In November
2020, VIG Insurance Group signed a share purchase
agreement with the Dutch company Aegon N.V. to acquire
its companies in Hungary, Poland, Romania and Turkey. The
acqui-sition will allow VIG Insurance Group to significantly
expand its potential in the pension fund business in Romania.
The acquisition is expected to be formally concluded in the
2
nd
half of 2021. The transaction is subject to the approvals
required under supervisory and competition law.
FINANCIAL PERFORMANCE INDICATORS IN THE ROMANIA
SEGMENT
Premium development
The VIG insurance companies in the Romania segment
wrote EUR 493.8 million in premiums in 2020, representing
an increase of 5.5% (2019: EUR 468.2 million). In addition
to increases in the other property and casualty and health
insurance lines of business, this was primarily due to good
premium growth for motor own damage insurance. Net
earned premiums were EUR 375.9 million in 2020, 8.4%
higher than the value of EUR 346.9 million in the previous
year.
PREMIUMS BY LINE OF BUSINESS
Result before taxes
A profit of EUR 14.2 million was recorded in the Romanian
segment in 2020 (2019: loss of EUR 101.8 million). The
result of the previous year was affected by a total write-off
of goodwill in the amount of EUR 108.8 million. Adjusted for
this effect, the result doubled, due in part to an improve-
ment in the combined ratio.
Combined ratio
The combined ratio improved to 99.0% in 2020 due to tar-
geted portfolio adjustments and better claims development
(2019: 100.9%).
Source: Financial Supervisory Authority ASF; as of 9M 2020
20.1%
VIG ranked 1
st
20.0%
Ranked 2
nd
11.7%
Ranked 3
rd
48.2%
Other participants
Per cent of total premium volume
Health
2.6% (1.7%)
Other property and casualty
24.3% (24.4%)
Life – single premium
9.8% (10.3%)
MTPL
17.0% (18.3%)
Values for 2019 in parentheses
Motor own damage
36.5% (34.6%)
Life – regular premium
9.8% (10.7%)
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
19
BALTIC STATES
The Baltic states consist of the countries Estonia, Latvia and
Lithuania.
THE BALTIC INSURANCE MARKET
The insurance market in the Baltic states is characterised
by many companies that have their registered office in one
of the three countries and also operate via branches in the
other two markets. This leads to an above-average number
of market participants. The five largest insurance groups in
the Baltic states generated around 80% of the total pre-
mium volume.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The Baltic states recorded a small year-on-year decrease of
1.1% in premium volume in the first nine months of 2020.
The Lithuanian insurance market experienced moderate
growth of 0.6%, while premium volume decreased in Latvia
(-0.6%) and Estonia (-4.7%). With a 48.3% share of total
premium volume, Lithuania generated close to half the pre-
miums in the Baltic states.
Premium volume declined 3.6% in the non-life sector in the
1
st
to 3
rd
quarters of 2020. The biggest drop was recorded
by the Latvian insurance market (-4.7%), followed by Esto-
nia (-4.3%) and Lithuania (-2.5%).
The life insurance sector recorded an increase of 6.7% in
the first nine months of 2020. Within the Baltic states, Latvia
recorded the largest increase in life insurance premiums,
with a gain of 11.1%, followed by Lithuania (+8.6%). Estonia,
on the other hand recorded a drop of 6.2%.
The average per capita expenditure for insurance in Lithua-
nia was EUR 343 in 2019. EUR 257 of this amount was for
non-life insurance and EUR 86 for life insurance. Estonia’s
insurance density of EUR 373 per capita was higher than in
Lithuania. EUR 306 of this amount was spent on non-life
insurance and EUR 67 on life insurance. Latvia had the
lowest insurance density in the Baltic states, namely
EUR 292. EUR 225 was for the non-life sector and EUR 67
for the life sector.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN THE BALTIC STATES
VIG insurance companies are represented in all three Baltic
states. Compensa Life has its headquarters in Estonia and
is also represented by branches in Latvia and Lithuania.
BTA Baltic operates in Latvia and has branches in Estonia
and Lithuania. After merging in 2020, the non-life compa-
nies Compensa Non-Life and Seesam operated in Lithuania
as a single company, Compensa Non-Life. It maintains
branches in Latvia and Estonia, and operates under the
Seesam brand in Estonia.
Non-Life
Source: The Estonian National Statistics Board, Latvian Supervisory Authority,
Latvian Insurers Association, Central Bank of the Republic of Lithuania
-1.1%
-3.6%
+6.7%
Total Life
9M 2020 figures
EUR 1.5 bn
EUR 0.4 bn
EUR 1.1 bn
Source: The Estonian National Statistics Board, Latvian Supervisory Authority,
Latvian Insurers Association, Central Bank of the Republic of Lithuania; as of 9M 2020
25.0%
VIG ranked 1
st
19.2%
Ranked 2
nd
13.9% Ranked 3
rd
41.9%
Other participants
Per cent of total premium volume
20
Annual Financial Report 2020
Their market share of 25.0% makes the VIG insurance c
om-
panies the market leader in the Baltic states. They also hold
first place in the non-life sector and third place for life insur-
ance.
FINANCIAL PERFORMANCE INDICATORS IN THE
BALTIC STATES SEGMENT
Premium development
T
he Baltic VIG insurance companies generated EUR 492.9 mil-
lion in premiums written in 2020, representing a year-on-year
decrease of 1.5% (2019: EUR 500.3 million). The decrease
was mainly due to the motor lines of business. Net earned
premiums rose to EUR 393.3 million in 2020 (2019: EUR
385.2 million).
PREMIUMS BY LINE OF BUSINESS
Result before taxes
The result before taxes rose 24.1% year-on-year to
EUR 9.5 million in the Baltic states segment in 2020 (2019:
EUR 7.7 million). This development resulted primarily from
the strong improvement in the health insurance business
and an improved combined ratio.
Combined ratio
The combined ratio improved compared to the previous
year to 97.2% (2019: 97.7%).
HUNGARY
HUNGARIAN INSURANCE MARKET
The top 5 insurance groups generated around 61% of t
he
premium volume in 2019. The two largest insurance groups
generated around 30%.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
In the first nine months of 2020, the Hungarian insurance
market recorded a 4.1% increase in premiums in local cur-
rency terms. Both the non-life and life sectors contributed
to this growth.
The non-life insurance sector recorded a 5.4% increase in
the 1
st
to 3
rd
quarters of 2020. This was mainly due to good
growth in motor own damage (+9.2%) and motor third party
liability insurance (+8.1%). Both of these lines of business
benefited from an increase in rates, among other things.
The effects of the COVID-19 pandemic could be seen in
travel insurance, which fell sharply by 55.9%. After three
years of growth, health insurance also recorded a drop of
23.2% in the first nine months of 2020.
Life insurance premiums rose 2.4%. Tax-privileged pension
insurance remained popular, recording a double-digit in-
Health
12.1% (10.9%)
Other property and casualty
26.3% (27.0%)
Life – single premium
6.7% (4.5%)
MTPL
23.1% (25.8%)
Values for 2019 in parentheses
Motor own damage
18.1% (19.5%)
Life – regular premium
13.7% (12.3%)
Non-Life
Source: National Bank of Hungary (MNB)
+5.4%
+2.4%
Total Life
9M 2020 figures
HUF 897.6 bn
HUF 380.6 bn
H
UF 517.0 bn
+4.1%
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
21
crease of 18.7% in the 1
st
to 3
rd
quarters of 2020. Unit-linked
and index-linked life insurance grew 8.6%. Single premium
life insurance, on the other hand, was down significantly
(-12.3%).
According to Axco Global Statistics, the average per capita
expenditure for insurance in Hungary was EUR 365 in 2019.
Of this EUR 203 was spent for non-life insurance and
EUR 162 for life insurance.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN HUNGARY
The VIG Insurance Group operates with the insurance
company Union Biztosító in Hungary. It had a market share
of 8.1% in 2019, which put it in sixth place in the market. It
was in sixth place for non-life insurance in 2019 and fourth
place for life insurance. In November 2020, VIG Insurance
Group signed a share purchase agreement with the Dutch
com-pany Aegon N.V. to acquire its companies in Hungary,
Poland, Romania and Turkey. The acquisition will make VIG
Insurance Group the market leader in Hungary. The acqui-
sition is expected to be formally concluded in the 2
nd
half of
2021. The transaction is subject to the approvals required
under supervisory and competition law.
FINANCIAL PERFORMANCE INDICATORS IN THE
HUNGARY SEGMENT
Premium development
In the Hungary segment, premiums written in the amount of
EUR 287.8 million were recorded in 2020 (2019: EUR
289.5 million). The slight year-on-year decrease of 0.6% was
mainly due to negative exchange rate effects. After adjusting
for these effects, the Hungary segment recorded a 7.1%
increase in premiums written. Net earned premiums were
EUR 223.6 million in 2020, 1.8% higher than the value in the
previous year (2019: EUR 219.6 million).
PREMIUMS BY LINE OF BUSINESS
Result before taxes
The Hungary segment recorded a result before taxes of
EUR 8.4 million in 2020 (2019: EUR 8.7 million). The de-
crease compared to the previous year was primarily due to
the negative currency development in Hungary.
Combined ratio
The combined ratio improved over the previous year to
97.0%, mainly due to the growth in the motor lines of busi-
ness (2019: 97.6%).
Source: Hungarian Insurers Association (MABISZ); as of 2019
8.1%
VIG ranked 6
th
11.0%
Ranked 3
rd
15.5%
Ranked 1
st
31.1%
Other participants
Per cent of total premium volume
10.1%
Ranked 4
th
14.7%
Ranked 2
nd
9.5%
Ranked 5
th
Health
4.4% (6.3%)
Other property and casualty
20.6% (20.7%)
Life – single premium
22.2% (20.2%)
MTPL
15.1% (15.9%)
Values for 2019 in parentheses
Motor own damage
7.3% (6.5%)
Life – regular premium
30.4% (30.4%)
22
Annual Financial Report 2020
BULGARIA
BULGARIAN INSURANCE MARKET
The top 5 insurance groups generated around 57% of t
he
total premium volume in Bulgaria in the first three quarters
of 2020. The two largest insurance groups generated
around 27%.
MARKET GROWTH IN THE 1
ST
TO 3
RD
QUARTERS OF 2020
COMPARED TO THE PREVIOUS YEAR
The Bulgarian insurance market recorded a small year-on-
year decline of 0.9% in local currency terms in the first three
quarters of 2020. Around 85% of the total premium volume
in the Bulgarian insurance market is generated by the non-
life sector, which grew 1.7% in the first nine months of 2020.
Premium volume in the life line of business fell 13.3%.
Motor third party liability insurance generated around 46%
of the premium volume in the non-life sector. It grew 0.4%
year-on-year in the 1
st
to 3
rd
quarters of 2020, contributing
mainly to the growth in the non-life sector. Motor own dam-
age insurance recorded a decrease of 0.1%. The non-
motor lines of business recorded an increase of 5.8%.
The drop in life insurance was due, among other things, to
sharp declines in traditional life and annuity insurance
(-14.0%) and health insurance products in the life sector
(-35.9%).
Unit-linked and index-linked life insurance, on the other
hand, increased 5.0%.
An average of EUR 27 per capita was spent on life insur-
ance in Bulgaria in 2019. Around seven times as much,
EUR 186, was spent on non-life insurance. According to
Axco Global Statistics, this corresponds to a total per capita
premium of EUR 213 per year for insurance services.
MARKET SHARES OF THE MAJOR INSURANCE GROUPS
VIG COMPANIES IN BULGARIA
The three insurance companies Bulstrad Life, Bulstra
d Non-
Life and Nova are represented in the Bulgarian insurance
market. Together they have a market share of 14.0%. That
makes the VIG insurance companies the leading insurance
group in Bulgaria. They hold second place in both the non-
life and life sectors. The PAC Doverie pension fund also be-
longs to VIG Insurance Group.
FINANCIAL PERFORMANCE INDICATORS IN THE
BULGARIA SEGMENT
Premium development
E
UR 199.6 million in premiums were written in the Bulgaria
segment in 2020, representing a year-on-year decrease of
10.8% (2019: EUR 223.9 million). This development was
primarily due to the decline in premiums in health insurance.
Net earned premiums were EUR 145.3 million in 2020,
5.6% higher than the previous year.
Non-Life
Source: Bulgarian Financial Supervision Commission (FSC)
+1.7%
-13.3%
Total Life
9M 2020 figures
BGN 2.2 bn
BGN 0.3 bn
B
GN 1.8 bn
-0.9%
Source: Bulgarian Financial Supervision Commission (FSC); as of 9M 2020
14.0%
VIG ranked 1
st
12.7%
Ranked 2
nd
11.3%
Ranked 3
rd
62.0%
Other participants
Per cent of total premium volume
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
23
PREMIUMS BY LINE OF BUSINESS
Result before taxes
A loss of EUR 36.7 million was recorded in the Bulgaria
segment in 2020 (2019: profit before taxes of EUR 15.8 mil-
lion). This was primarily the result of a goodwill impairment of
EUR 59.8 million performed in the first half of 2020.
Combined ratio
The combined ratio improved in 2020 to 91.2%, mainly due
to better claims development (2019: 95.8%).
TURKEY/GEORGIA
Turkey
The Turkish insurance market recorded double-digit growth of
22.4% in local currency terms in the 1
st
to 3
rd
quarters of 2020.
Premium volume rose 17.0% in the non-life sector, while the
life sector recorded an even larger increase of 52.4%.
The non-life sector continues to be dominated by the motor
lines of business, which contributed 45.8% of the premium
volume. Motor third party liability insurance rose 10.5% in the
1
st
to 3
rd
quarters of 2020, while motor own damage insurance
increased 10.9% compared to the same period in the
previous year. The non-motor lines of business grew 23.0%.
The VIG non-life insurance company Ray Sigorta operates in
Turkey. With a market share of 1.9%, it achieved 16
th
place
in the Turkish insurance market. In November 2020, VIG In-
surance Group signed a share purchase agreement with the
Dutch company Aegon N.V. to acquire its companies in
Hungary, Poland, Romania and Turkey. The acquisition
allows VIG Insurance Group to enter the life insurance busi-
ness in Turkey. The acquisition is expected to be formally
concluded in the 2
nd
half of 2021. The transaction is subject
to the approvals required under supervisory and compe-
tition law.
Georgia
The Georgian insurance market grew in the 1
st
to 3
rd
quar-
ters of 2020, recording a 6.5% increase in local currency
terms. Both the non-life (+6.2%) and life insurance (+10.2%)
lines of business contributed to this growth. In the non-life
segment, health insurance, which represents 41.2% of the
total premium volume and is one of the most important lines
of business in Georgia, recorded an impressive increase of
16.7%. While motor own damage insurance recorded mod-
erate growth of 3.0%, motor third party liability insurance,
which only applies to foreign vehicles in Georgia, declined
29.3%. The planned law that would also make motor third
party liability insurance compulsory for domestic vehicles
was postponed indefinitely. Furthermore, only a fraction of
all vehicles in Georgia have motor third party liability insur-
ance coverage. The non-motor lines of business (not in-
cluding health insurance) grew 5.2% year-on-year.
VIG Insurance Group is represented by two companies in
Georgia, GPIH and IRAO. They jointly occupy the second
place in the market, with a market share of 26.3%.
FINANCIAL PERFORMANCE INDICATORS IN THE
TURKEY/GEORGIA SEGMENT
Premium development
The Turkey/Georgia segment recorded total premiums writ-
ten of EUR 251.7 million in 2020 (2019: EUR 234.9 million).
The increase of 7.1% compared to the previous year
was mainly due to double-digit growth in both other
property and casualty insurance and health insurance. Net
earned premiums were EUR 113.0 million in 2020 (2019:
EUR 112.4 million), an increase of 0.6% compared to the
previous year.
Health
7.8% (18.0%)
Other property and casualty
26.3% (22.5%)
Life – single premium
4.0% (4.8%)
MTPL
16.5% (15.1%)
Values for 2019 in parentheses
Motor own damage
30.6% (27.1%)
Life – regular premium
14.8% (12.5%)
24
Annual Financial Report 2020
PREMIUMS BY LINE OF BUSINESS
R
esult before taxes
Due to the goodwill impairment of EUR 12.5 million per-
formed in Georgia in the first half of 2020, the Turkey/Georgia
segment recorded a loss of EUR 0.9 million in 2020 (2019:
profit before taxes of EUR 6.7 million).
Combined ratio
The combined ratio improved to 95.4% in 2020, primarily
as the result of a better claims development in Turkey
(2019: 96.5%).
REMAINING CEE
The Remaining CEE segment includes the countries of
A
lbania incl. Kosovo, Bosnia-Herzegovina, Croatia, Moldo-
va, North Macedonia, Serbia and Ukraine. The Remaining
CEE markets generated 4.3% of Group premiums in 2020.
The companies in Montenegro and Belarus were not in-
cluded in the scope of consolidation.
Albania including Kosovo
After almost six years of growth, premiums fell 6.3% in
Albania in local currency terms in the 1
st
to 3
rd
quarters of
2020. The Albanian insurance market continues to be
dominated by the non-life sector, which represents 93.2%
of the market. Premiums declined 6.1% in this sector in the
first nine months of 2020. While motor own damage in-
surance remained stable with a small increase of 0.5%, the
motor third party liability line of business fell 6.9%. The non-
motor lines of business were also down, recording a year-
on-year decrease of 5.3%. The life insurance sector re-
corded an 8.5% year-on-year decrease in premium volume
in the 1
st
to 3
rd
quarters of 2020. Premium volume in Kosovo
declined 2.1% year-on-year in the 1
st
to 3
rd
quarters of 2020.
VIG Insurance Group operates in the Albanian insurance
market with Sigma Interalbanian and Intersig. It occupies
second place in the market, with a market share of 21.9%.
Sigma Interalbanian is also represented by a branch in
Kosovo.
Bosnia-Herzegovina
Premiums decreased 1.5% in local currency terms in
Bosnia-Herzegovina in the first three quarters of 2020. Non-
life insurance decreased 1.3% and life insurance fell 2.1%.
The changes in the motor lines of business, which dominate
the non-life sector, were mixed, with motor own damage
declining slightly by 1.5%, while motor third party liability
rose 1.2%.
VIG Insurance Group is represented by Wiener Osiguranje,
which has its headquarters in Banja Luka in the Serbian
Republika Srpska in Bosnia-Herzegovina, and by Vienna
osiguranje, which is headquartered in Sarajevo. The market
share was 8.4% based on data for the 1
st
to 3
rd
quarters of
2020, which puts the VIG insurance companies in fifth place
in the market.
Croatia
The Croatian insurance market recorded a small decrease
of 1.4% in local currency terms in the first three quarters of
2020. Non-life premium volume rose 4.3% year-on-year.
Motor third party liability insurance (+11.3%) and fire insur-
ance (+7.3%) played a major role in this increase. Motor
own damage insurance also recorded an increase of 3.2%.
Health insurance premium volume rose 4.4%. Life insur-
ance fell significantly (-15.4%) in the 1
st
to 3
rd
quarters of
2020, mainly due to decreases in index-linked and unit-
linked products and traditional life insurance. Annuity
insurance, on the other hand, recorded a gain of 17.2%.
Health
12.6% (12.2%)
MTPL
18.3% (21.0%)
Values for 2019 in parentheses
Motor own damage
16.8% (19.4%)
Other property and casualty
52.3% (47.4%)
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
25
The VIG insurance company Wiener Osiguranje operates
in Croatia. Its market share of 9.8% in the 1
st
to 3
rd
quarters
of 2020 put it in fourth place in the Croatian insurance
market.
Moldova
Premium volume in the Moldovan insurance market de-
clined 13.0% in local currency terms in the 1
st
to 3
rd
quarters
of 2020. The non-life sector, whose 93.4% share dominates
the overall portfolio, recorded a 13.9% year-on-year de-
crease. Life insurance recorded an increase of 1.5%. The
non-motor lines of business in particular declined sharply in
the first nine months of 2020 (-27.9%). Premium volume
was down 7.6% for motor third party liability and 5.8% for
motor own damage insurance.
The VIG insurance company Donaris operates in Moldova.
Its market share is 10.7%, which puts it in fifth place in the
market. It also holds fifth place in the non-life sector.
North Macedonia
Premiums in the North Macedonia insurance market
declined 5.2% year-on-year in local currency terms in the
first three quarters of 2020. Non-life insurance dominates
the overall market with a share of 84.3%. It recorded a de-
crease of 5.4% in the first nine months of 2020, due to de-
clines in both motor third party liability (-11.5%) and motor
own damage insurance (-2.6%). Premium volume in the
non-motor lines of business, on the other hand, rose slightly
by 2.1%. Life insurance was unable to continue the growth
recorded in previous years and decreased a moderate
4.3% in the first nine months of 2020.
The VIG insurance companies Makedonija Osiguruvanje,
Winner Non-Life and Winner Life together hold a market
share of 19.6%. That makes the VIG companies the leading
insurance group in North Macedonia.
Serbia
Premium volume for the insurance companies operating in
Serbia rose 2.2% based on the local currency in the first three
quarters of 2020. This growth was due to the positive
performance achieved in both the life sector (+2.1%) and
non-life sector (+2.2%), which represents around 78% of
the overall portfolio. The increase in non-life insurance was
mainly due to the motor lines of business. Motor third party
liability insurance grew 2.5% and motor own damage
increased 6.4% in the 1
st
to 3
rd
quarters of 2020. The non-
motor lines of business also increased their premium
volume slightly (+0.8%) compared to the same period in the
previous year. Health insurance also achieved double-digit
growth of 19.5%.
The VIG insurance company Wiener Städtische Osiguranje
operates in Serbia. It holds fourth place in the market, with
a market share of 11.8%. It is in fourth place in the non-life
sector and second place in the life sector.
Ukraine
In the 1
st
to 3
rd
quarters of 2020, the Ukrainian insurance
market recorded a small year-on-year decrease of 2.3% in
local currency terms. The Ukrainian insurance market is
strongly dominated by the non-life sector, which represents
around 88% of the market. It recorded a decrease of 3.6%
in the first three quarters of 2020, mainly due to the non-
motor lines of business (-11.4%). Increases were recorded,
on the other hand, for motor third party liability (+8.0%) and
motor own damage insurance (+9.3%). Life insurance
premium volume also rose 8.3% in the first nine months of
2020. At 12%, however, the share of total premiums gen-
erated by life insurance remains modest.
Following the merger of Globus and UIG, the VIG non-life
insurance companies Kniazha and UIG and life insurance
company Kniazha Life were operate in the Ukraine. The
VIG insurance companies hold third place in the overall
market, with a market share of 6.8%. They are in second
place in the non-life sector and eighth place in the life
sector.
26
Annual Financial Report 2020
FINANCIAL PERFORMANCE INDICATORS IN THE
R
EMAINING CEE SEGMENT
Premium development
The VIG insurance companies in the Remaining CEE
segment wrote EUR 439.6 million in premiums in 2020 (2019:
EUR 446.9 million). The decrease of 1.6% year-on-year was
mainly due to the decline in premiums in the motor lines of
business in Ukraine. Croatia and Serbia, on the other hand,
recorded an increase in premiums. Net earned premiums
were EUR 318.6 million in 2020 (2019: EUR 328.8 million), a
decrease of 3.1% compared to the previous year.
PREMIUMS BY LINE OF BUSINESS
Result before taxes
A loss of EUR 15.7 million was recorded in the Remaining
CEE segment in 2020 (2019: profit before taxes of
EUR 27.1 million). This was primarily the result of a goodwill
impairment of EUR 45.0 million performed in Croatia in the
first half of 2020.
Combined ratio
The combined ratio improved to 92.6% in Ukraine, Serbia
and Kosovo in 2020, mainly due to an improved claims de-
velopment (2019: 93.9%).
OTHER MARKETS
The Other Markets segment includes Germany and Liecht-
enstein. The segment generated 2.8% of Group premiums
in 2020.
Germany
According to preliminary data from the German Insurance
Association (GDV), the German insurance industry recorded
a 1.5% year-on-year increase in premium volume in 2020.
The increase was predominantly from property and casualty
insurance, where premium volumes rose 2.1%. Life insur-
ance (not including pension funds), on the other hand, fell
slightly by 0.1% compared to the same period in the
previous year. This was mainly due to a decline in regular
premiums, which recorded a decrease of 0.8%. Single pre-
mium products, on the other hand, recorded an increase of
1.2%. Private health insurance recorded an increase of
3.8%.
The VIG insurance companies InterRisk Non-Life and
InterRisk Life operate in Germany. The InterRisk companies
distribute exclusively through around 10,000 independent
sales partners. InterRisk Non-Life specialises in accident
and liability insurance and selected property insurance
products. InterRisk Life focuses on retirement provision and
occupational disability solutions, as well as protection for
surviving dependants. The VIG companies continue to
operate successfully in the German market as profitable
niche providers.
Liechtenstein
20 life and 16 non-life insurance companies were operating
in Liechtenstein at the end of 2020. The life insurance
companies mainly operate in the area of unit-linked and
equity-linked life insurance. Liechtenstein offers insurance
companies direct access to the markets in countries in the
European economic area and Switzerland. The internat-
ionally operating non-life insurance companies have be-
come much more important in previous years. According to
forecasts, the insurance companies achieved a premium vol-
Health
6.6% (6.5%)
Other property and casualty
26.7% (26.4%)
Life – single premium
13.6% (13.8%)
MTPL
23.4% (23.9%)
Values for 2019 in parentheses
Motor own damage
11.8% (11.8%)
Life – regular premium
17.9% (17.6%)
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
27
ume of CHF 5.5 billion in financial year 2020. CHF 3.0 billion
of this was from the non-life lines of business, and CHF
2.5 billion from the life insurance companies.
The VIG insurance company Vienna-Life operates in Liecht-
enstein. Vienna-Life mainly offers unit-linked and index-
linked life insurance.
FINANCIAL PERFORMANCE INDICATORS IN THE OTHER
MARKETS SEGMENT
Premium development
The Other Markets segment recorded total premiums writ-
ten of EUR 280.0 million in 2020 (2019: EUR 380.4 million),
representing a decrease of 26.4% compared to the pre-
vious year. This was due to a decrease in single premium
life insurance in Liechtenstein. Net earned premiums were
EUR 230.9 million in 2020 (2019: EUR 332.3 million), a de-
cline of 30.5% compared to the previous year.
PREMIUMS BY LINE OF BUSINESS
Result before taxes
In 2020, the result before taxes increased by 18.5% to
EUR 26.7 million in Liechtenstein due to the absence of
one-off effects in the financial result (2019: EUR 22.6 million).
Combined ratio
In 2020 the combined ratio was an excellent 81.1% in the
Other Markets segment (2019: 82.4%).
CENTRAL FUNCTIONS
The Central Functions segment includes VIG Holding
(including the branches in Northern Europe), VIG Re
(including the branches in Germany and France), Wiener Re,
the VIG Fund, non-profit societies, corporate IT service
providers and intermediate holding companies. VIG Holding
primarily focuses on managerial tasks for the insurance
group. It also operates as the reinsurer for the insurance
group and in the international corporate business.
The reinsurance company VIG Re was formed in Prague in
2008 and is a successful reinsurance provider for both VIG
insurance companies and external partners. It has estab-
lished itself as an important company in the CEE region and
follows a conservative underwriting and investment strategy.
Standard & Poor’s affirmed VIG Re’s A+ rating with stable
outlook in the autumn of 2020.
FINANCIAL PERFORMANCE INDICATORS IN THE CENTRAL
FUNCTIONS SEGMENT
Premiums written in the Central Functions segment
rose by 7.0% in 2020 to EUR 1,736.5 million (2019:
EUR 1,623.5 million). In addition to an increase in
premiums from the entry into new business areas
(Western Europe) in active reinsurance generated by
the insurance company VIG Re, an increase in corporate
and large customer business was also recorded in VIG
Holding.
A loss of EUR 107.6 million was recorded in the Central
Functions segment in 2020 (2019: profit before taxes of
EUR 36.5 million). This was due to the change in the con-
solidation method of the non-profit societies as of the
reporting date of 31 July 2019, and an increase in
amortisation caused by a reduction in the useful life of
software.
Other property and casualty
47,7% (33.9%)
Life – single premium
21.0% (43.6%)
Values for 2019 in parentheses
Life – regular premium
31.3% (22.5%)
28
Annual Financial Report 2020
BUSINESS DEVELOPMENT BY BALANCE SHEET UNIT
Further information on business development by balance sheet
units is provided in the additional disclosures in accordance
with the Austrian Insurance Supervision Act (VAG) in the notes
to the consolidated financial statements starting on page 159.
Other mandatory disclosures
RESEARCH AND DEVELOPMENT
Although VIG companies do not perform any research
activities as defined in § 243 (3) (2) UGB, they contribute their
expertise to the development of insurance-specific software
models. VIG Holding and – for projects – the VIG companies
also cooperate with Digital Impact Labs Leipzig, Plug & Play
and an start-up initiative (investment and corporate building)
that is located in Germany and jointly funded with other
insurance companies in order to identify technological
developments in the market more quickly and internalise them
if necessary. viesure was also established for this purpose as
an internal “innovation hub” focusing mainly on Austria.
HOLDINGS, PURCHASE AND SALE OF OWN SHARES
Detailed information on § 243 (3)(3) UGB is available in
Note 8. Consolidated shareholders’ equity starting on page
119 of the notes to the consolidated financial statements.
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
IN THE ACCOUNTING PROCESS
Preparation of the consolidated financial statements includes
all activities required for presentation and disclosure of the net
assets, financial position and results of operations of the
Group in accordance with the provisions of the law and the
IFRS. The consolidated financial statements consist of the
balance sheet, income statement, statement of comprehen-
sive income, statement of changes in equity, cash flow state-
ment, segment reporting and the notes to the consolidated
financial statements, which disclose significant accounting
policies and explanatory notes.
The financial statement process includes the aggregation of
all data from accounting and upstream processes for the
annual financial statements.
The internal control system is implemented in the Group
accounting process in accordance with the five elementary
components of the COSO (Committee of Sponsoring Or-
ganisations of the Treadway Commission) framework model
for internal control.
Control environment
The organisational structure consists of the local account-
ing departments of the individual companies and the Group
accounting department at the VIG Holding headquarters in
Vienna. The accounting departments of the VIG companies
prepare both local GAAP and IFRS financial statements and
then send the IFRS figures to the Group accounting depart-
ment.
The IFRS financial statements are prepared in accordance
with uniform Group accounting policies. The Group fully ap-
plies the rules of IFRS 4 with respect to the valuation of in-
surance policies. Accordingly, the values recognised under
applicable national law are carried over to the IFRS con-
solidated financial statements.
Standardised software is used to prepare the consolidated
financial statements. VIG companies mainly use this soft-
ware to report their data, most of which is imported into the
system as an upload or directly entered on site. The Group
accounting department consolidates the data and prepares
the consolidated financial statements.
Risk assessment
The annual financial statement process has been docu-
mented in order to identify risks in the accounting process
and eliminate them as far as possible. The documentation
covers the entire process all the way from data entry by the
employees of VIG companies and automatic and manual
controls and analyses during the consolidation process, to
publication of the final annual report.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
29
Control measures
IFRS accounting policies that apply across the Group are
set down in an accounting guideline (IFRS interpretation)
that is to be applied for all companies included in the con-
solidated financial statements. The goal is to ensure uniform
implementation of the IFRS across the Group. The guideline
is reviewed each year and updated or amended when
necessary, and is sent to the responsible people in the local
reporting departments together with additional information
on Group-wide reporting requirements each time before the
financial statements are prepared. The subsidiaries are
responsible for compliance with the Group-wide accounting
policies and for proper and timely performance of their ac-
counting-related processes.
The finance and accounting unit in the Group parent com-
pany perform both automatic (using validations) and manual
checks (performance analyses and plausibility checks) of
the financial statement data that is received. Additional
checks in the form of control calculations and reconciliation
of intragroup transactions – in particular reinsurance and
financing balances – are performed to identify and, if neces-
sary, correct or eliminate any differences.
In addition, an earnings reconciliation statement is prepared,
the accuracy of individual parts of the consolidated financial
statements is checked, and a plausibility check is per-
formed for the consolidated financial statements as a whole
to ensure that the presentation is complete and correct.
The accounting employees also work closely with the
Planning and Controlling department (e.g. variance analyses),
primarily with respect to performance analyses, when the
financial statements are prepared. The data are also regularly
provided to the Managing Board for review and checking.
In order to ensure that the annual report is completed cor-
rectly and on time by the publication deadline, strict dead-
lines are set for the quarterly and annual financial state-
ments and the VIG companies are informed of these dead-
lines at the end of the 3
rd
quarter at the latest for the coming
financial year. In this way, the department preparing the
consolidated financial statements ensures in advance that
the VIG companies align their processes with the deadlines
and can therefore send their data on time.
Information and communication
The intensive collaboration with other areas of the Company,
in particular Controlling, generates a lively exchange of infor-
mation and communications.
In addition to the annual report at the end of each financial
year, a half-year report was published in accordance with
IAS 34 and statutory provisions.
The Investor Relations department is responsible for
reporting to VIG Holding shareholders. This takes place
both in personal meetings and via the Company website.
Shareholders and other interested parties are provided with
access to annual and interim reports, and to regularly up-
dated information on key figures, share prices, the financial
calendar, ad hoc news and other relevant topics.
Monitoring
The Group accounting department is responsible for
preparing the Group annual report. Quarterly reports are
provided to the Managing Board and Supervisory Board to
ensure regular monitoring of the internal control system.
Risks are continuously monitored by internal cross-depart-
mental Group controls (e.g. Group accounting department,
Controlling).
The internal audit department also performs quality
assurance. It performs independent, objective audit proce-
dures to examine the structure and effectiveness of internal
control systems and the value and optimisation potential of
operational processes. The internal audit department helps
the organisation achieve its objectives by systematically
evaluating the effectiveness of risk management, the control
system and the governance process, including all relevant
key functions within the Company, and providing appro-
priate recommendations for improvement.
Group-wide guidelines exist in order to standardise the
handling of significant risks throughout the Group, and also
provide a tool for risk monitoring. Local management is
responsible for implementing these guidelines in the indi-
vidual VIG companies.
The auditor takes the internal control system into account
during the financial statement audit to the extent that it
30
Annual Financial Report 2020
is relevant to preparation of the consolidated financial state-
ments. The auditor also assesses the effectiveness of the
risk management system in accordance with Rule 83 of the
Austrian Corporate Governance Code.
CAPITAL, SHARE, VOTING AND CONTROL RIGHTS AND
ASSOCIATED AGREEMENTS
The Company has share capital of EUR 132,887,468.20. It
is divided into 128,000,000 no-par value ordinary bearer
shares with voting rights, with each share representing
an equal portion of the share capital. The number of shares
issued remains unchanged since the previous financial
year.
Further information on the anticipatory resolutions and
authorisations of the Managing Board in general meetings
in accordance with § 267 (3a) in conjunction with § 243a (1)
UGB is provided in Note 8. Consolidated shareholders’
equity starting on page 119 of the notes to the consolidated
financial statements.
CONSOLIDATED NON-FINANCIAL REPORT
VIG Holding is publishing a separate consolidated non-
financial report for financial year 2020 in accordance with
§ 267a of the Austrian Commercial Code (Unternehmens-
gesetzbuch – UGB). It is available in printed form and online
on the VIG Insurance Group website (www.vig.com) in the
“Corporate Responsibility” menu section under “Downloads”.
CORPORATE GOVERNANCE
VIG Holding is committed to application and compliance
with the January 2021 version of the Austrian Code of Cor-
porate Governance and publishes a consolidated corporate
governance report on the website at www.vig.com under
“Investor Relations”.
OUTSOURCING DISCLOSURES
The outsourcing disclosures required under § 156 (1)(1) in
conjunction with § 109 VAG are discussed in more detail
below.
VIG Holding
A resolution was adopted allowing Group-internal and ex-
ternal service providers to provide IT services for VIG
Holding. Outsourcing agreements that had been approved
by the supervisory authority existed in 2020 with IBM
Austria (Internationale Büromaschinen Ges. m.b.H.) and the
internal Group IT system provider twinformatics GmbH,
both headquartered in Austria. twinformatics GmbH has
also assumed full responsibility for all IT services for the
Austrian VIG insurance companies and concludes any
sub-outsourcing required for this purpose while observing
statutory and regulatory requirements and after consulting
with the VIG insurance companies. In addition to these
outsourcing agreements, VIG Holding has not outsourced
any critical or important functions or business activities.
VIG Insurance Group
Outsourcing took place in the following areas, in particular,
in the Group:
• IT (in particular the operation and maintenance of
operating modules, computing centre operation,
application development services, data storage)
• Claims handling
The four governance functions were individually outsourced
by the operating insurance companies of the Group, in
particular the internal audit and actuarial functions and
related activities.
While governance functions in VIG Insurance Group were
predominantly outsourced to other Group companies, criti-
cal or important activities in the IT and claims handling areas
were outsourced both inside and outside the Group.
The notification of local supervisory authorities about the
outsourcing of critical or important functions or activities or
the approval of such outsourcing by these authorities was
done by the companies concerned in accordance with ap-
plicable national legal requirements.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
31
Expected development and risks of the Group
SIGNIFICANT RISKS AND UNCERTAINTIES
The risk management system is firmly anchored in the
management culture of the Company and is based on a
clearly defined, conservative risk policy, extensive risk ex-
pertise, a developed set of risk management tools and risk-
based Managing Board decisions.
The detailed risk report for VIG Insurance Group is provided
in the notes to the consolidated financial statements start-
ing on page 82. For information on the financial instruments
used, please see the notes to the consolidated financial
statements (Principles of significant accounting policies)
and the risk report starting on page 82.
EXPECTED DEVELOPMENT – OUTLOOK FOR 2021
ECONOMIC OUTLOOK
Subject to considerable uncertainty, and taking into ac-
count the extension of containment measures in the 1
st
quarter of 2021, on the one hand, and the hoped-for effects
of the vaccination campaign on the other, the IMF expects
a global recovery of 5.5% in 2021, with the developed
economies expected to grow 4.3% and the emerging mar-
kets by 6.3%. With respect to the eurozone, Erste Group
expects growth of 4.0% in 2021. In Austria, Erste Group
analysts see another recession in the 1
st
quarter of 2021. A
recovery is not expected to start until the 2
nd
quarter of 2021.
Based on these forecasts, Erste Group reduced its GDP
forecast for 2021 slightly downwards from 3.4% to 3.0%. It
expects GDP growth to increase to 3.4% in 2022. In spite
of the gradual opening of the economy, unemployment is
expected to rise (5.6%), partly due to the phase-out of
short-time work schemes.
Central and Eastern Europe is expected to record average
regional growth of 3.8% in 2021, naturally including support
from base effects. In spite of this recovery, wealth losses
due to the COVID-19 pandemic are not expected to be re-
covered until 2022 at best. The Erste Group scenario fore-
casts GDP growth ranging from 5.0% in Serbia to 3.3% in
the Czech Republic. Inflationary trends should be visible in
the region, as everywhere else, but should initially be limited
to temporary effects and remain within central bank
tolerances in all markets. Central and Eastern Europe is
expected to record overall inflation of 2.6%, with the lowest
rate in Slovenia (0.8%), while Hungary is expected to be at
the upper end with 3.7%. The increase in the un-
employment rate expected for Central and Eastern Europe
in 2021 (5.7%) should contribute to the moderate infla-
tionary pressure before the employment situation improves
in 2022.
OUTLOOK FOR VIG INSURANCE GROUP
As a market leader in Central and Eastern Europe,
VIG Insurance Group with its more than 25,000 employees
is in an excellent position to take advantage of the
opportunities available in this region and the long-term
growth options they offer. It remains committed to its prov-
en business strategy of profitable growth. Based on the
values of diversity, customer proximity and responsibility,
VIG insurance companies want to use their successful
management principles to strengthen and further increase
their market shares. This includes both organic growth and
growth by acquisitions, particularly if an opportunity arises
to strategically expand the existing portfolio or to take
advantage of economies of scale. The goal is to increase
market share to a minimum of 10% in Poland, Hungary,
Croatia and Serbia in the medium term. This goal was
already achieved in Serbia in 2016. In November 2020, VIG
Insurance Group signed a share purchase agreement with
the Dutch company Aegon N.V. to acquire its companies in
Hungary, Poland, Romania and Turkey for EUR 830 million.
The transaction includes insurance companies, pension
funds and asset management and service companies. The
acquisition will make VIG Insurance Group the market
leader in Hungary for the first time, giving it a market share
of more than 19%. It will also enter the life insurance
business in Turkey, and with the acquisition of the pension
fund companies in Hungary, Poland and Romania it will
strengthen its activities in the area of retirement provisions.
The acquisition will increase the customer base by
4.5 million. The transaction is subject to the necessary
regulatory and competition approvals and is expected to be
formally concluded in the 2
nd
half of 2021.
The strategic measures and initiatives set by the work pro-
gramme Agenda 2020 – business model optimisation, en-
suring future viability and organisation and cooperation –
contributed to the solid performance achieved in 2020. The
next strategic programme for the period until 2025, which
is currently being prepared, will continue to focus on ef-
32
Annual Financial Report 2020
ficiency and synergy potentials. It will be presented in the
2
nd
quarter of 2021.
Based on the long-term capital planning of the Group and
current interest rate situation, the Managing Board initiated
measures to optimise the capital of the Group, focusing on
increasing investments in socially and environmentally sus-
tainable projects. In the 1
st
half of 2021 a senior sustain-
ability bond with a volume of EUR 500 million depending on
market conditions will be issued. In addition, a subordinated
bond with a volume of EUR 300 million was placed as a
restricted tier 1 instrument with the principal shareholder of
Vienna Insurance Group, Wiener Städtische Versicherungs-
verein.
Under its dividend policy, which foresees a distribution in
the range of 30 to 50% of Group net profits, the dividend
per share will continue to be aligned with the Company’s
performance.
Due to the fact that there is still no foreseeable end to the
COVID-19 pandemic, estimates of business development
for the financial year 2021 are still highly uncertain. Although
VIG Insurance Group has been able to navigate very well
through this exceptional period so far and sees itself in the
position to manage its operating business well, adverse
effects due to economic developments have to be
expected based on the current situation. Taking this and
current parameters into account, VIG Insurance Group
expects premium volume to remain stable at the level of
2020 and profit before taxes to be in the range of EUR 450
to 500 million. As the closing has not yet taken place, the
Aegon companies are not included in the outlook for 2021.
The combined ratio is expected to remain at a sustainable
level of around 95%. In accordance with its dividend policy,
the Managing Board of Vienna Insurance Group will
propose a dividend of EUR 0.75 for the financial year 2020.
This corresponds to a dividend payout ratio of 41.5%.
Vienna, 17 March 2021
The Managing Board:
Elisabeth Stadler
General Manager (CEO),
Chairwoman of the
Managing Board
Liane Hirner
CFO, Member of the
Managing Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
Grou
p management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
33
Consolidated
financial
statements
CONSOLIDATED FINANCIAL STATEMENTS IN
ACCORDANCE WITH INTERNATIONAL FINANCIAL
REPORTING STANDARDS (IFRS) 31.12.2020
Reporting period 1.1.2020–31.12.2020
Balance sheet as of previous reporting date
31.12.2019
Income statement as of previous reporting period
1.1.2019–31.12.2019
Currency EUR
34
Annual Financial Report 2020
CONSOLIDATED BALANCE SHEET
Assets Notes 31.12.2020
31.12.2019
in EUR ‘000
Intangible assets 1, A 1,733,077
1,939,579
Right-of-Use Assets 185,354
Investments 2, B 34,901,186
34,455,740
Property 2,507,413
2,414,258
Owner-occupied property 477,469
Investment property 2,029,944
1,925,557
Shares in at equity consolidated companies 291,561
Financial assets 32,102,212
31,720,206
Financial investments for unit-linked and index-linked life insurance 3, C 7,968,039
8,620,327
Reinsurers’ share in underwriting provisions 4, D 1,396,492
1,283,434
Receivables 5, E 1,699,159
1,717,349
Tax receivables and advance payments out of income tax F 275,041
Deferred tax assets 6, F 136,728
Other assets 7, G 387,845
Cash and cash equivalents 1,745,147
1,443,358
Total 50,428,068
50,344,924
Liabilities and shareholdersʾ equity Notes 31.12.2020
31.12.2019
in EUR '000
Shareholders' equity 8 5,285,766
5,190,693
Share capital and reserves 5,162,738
5,074,114
Other non-controlling interests 123,028
Subordinated liabilities 9, K 1,463,909
1,464,597
Underwriting provisions 10, H 32,230,055
31,886,076
Underwriting provisions for unit-linked and index-linked life insurance 11, I 7,617,216
8,115,999
Non-underwriting provisions 12, J 876,809
Liabilities 13, K 2,254,306
2,094,572
Tax liabilities out of income tax F 290,998
Deferred tax liabilities 6, F 267,870
Other liabilities 141,139
Total 50,428,068
50,344,924
The references (numbers and letters) shown for individual items in the consolidated balance sheet and consolidated income
statement refer, among other things, to detailed disclosures for those items in the notes to the consolidated financial
statements. The numbers refer to the detailed disclosures in the “Notes to the consolidated balance sheet” starting on page
103. The letters refer to the explanatory text in the section titled “Accounting policies” starting on page 54.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
35
CONSOLIDATED INCOME STATEMENT
Consolidated income statement Notes 2020
2019
in EUR '000
Net earned premiums – retention L 9,336,585
9,317,929
Premiums written – retention 9,415,844
9,420,712
Premiums written – gross 15 10,428,454
10,399,407
Premiums written – reinsurers´ share -1,012,610
-978,695
Change in unearned premiums – retention -79,259
-102,783
Change in unearned premiums – gross -86,110
-136,790
Change in unearned premiums – reinsurers´ share 6,851
Financial result excl. result from shares in at equity consolidated companies 16 624,791
Income from investments 1,263,789
1,593,201
Expenses for investments and interest expenses -638,998
-606,435
Result from shares in at equity consolidated companies 17 -28,510
Other income 18 145,661
Expenses for claims and insurance benefits – retention 19, M -7,030,569
-7,262,744
Acquisition and administrative expenses 20, N -2,328,479
-2,293,226
Other expenses 18 -373,617
-444,433
Result before taxes 345,862
Taxes 21 -103,194
-108,481
Result of the period 242,668
thereof attributable to shareholders
thereof other non-controlling interests
thereof non-controlling interests in non-profit societies 0
Earnings per share
*
(in EUR) 8 1.81
Result of the period (carryforward) 242,668
*The undiluted earnings per share equals the diluted earnings per share (in EUR).
36
Annual Financial Report 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Consolidated statement of comprehensive income 2020
2019
in EUR '000
Result of the period (carryforward) 242,668
Other comprehensive income (OCI)
Items that will not be reclassified to profit and loss in subsequent periods 9,409
-58,322
+/- Underwriting gains and losses from provisions for employee benefits 15,951
-106,988
+/- Deferred profit participation -3,555
+/- Deferred taxes -2,987
Items that will be reclassified to profit or loss in subsequent periods 20,960
+/- Exchange rate changes through equity -109,582
+/- Unrealised gains and losses from financial assets available for sale 297,778
+/- Cash flow hedge reserve -32
-452
+/- Share of other reserves of at equity consolidated companies 1,167
-1,394
+/- Deferred mathematical reserve -17,300
-112,952
+/- Deferred profit participation -116,017
-361,614
+/- Deferred taxes -35,054
-109,635
Total OCI 30,369
Total profit 273,037
thereof attributable to shareholders 262,003
thereof other non-controlling interests 11,034
thereof non-controlling interests in non-profit societies 0
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
37
CONSOLIDATED SHAREHOLDERS’ EQUITY
Development Share
capital
Capital
reserves
Retained
earnings
Other reserves Subtotal
*
Non-controlling interests Total
Currency
reserve
Others
Other
Non-profit
societies
in EUR '000
As of 1 January 2019 132,887
2,109,003
2,245,569
-142,711
4,547,473
1,180,511
5,835,696
Changes in scope of conso-
lidation/ownership interests
-22,081
-22,081
-2,138
-1,242,012
-1,266,231
Other comprehensive income 331,277
Other comprehensive income
excluding currency changes 335,822
-870
Currency change 9,623
-18
Result of the period 331,277
Dividend payment -128,000
-128,000
-8,831
-5,742
-142,573
As of 31 December 2019 132,887
2,109,003
2,426,765
-133,088
5,074,114
5,190,693
As of 1 January 2020 132,887
2,109,003
2,426,765
-133,088
5,074,114
5,190,693
Changes in scope of conso-
lidation/ownership interests
-26,179
-26,179
-22,575
Other comprehensive income 231,513
-108,080
Other comprehensive income
excluding currency changes 138,570
Currency change -108,080
-108,080
-1,502
-109,582
Result of the period 231,513
Dividend payment -147,200
-147,200
-8,189
-155,389
As of 31 December 2020 132,887
2,109,003
2,484,899
-241,168
5,162,738
5,285,766
*The above subtotal equals the equity attributable to shareholders and other capital providers of the parent company.
38
Annual Financial Report 2020
Composition of other reserves 31.12.2020
Unrealised gains
and losses
Cash flow hedge
reserve
Underwriting
gains and losses
from provisions
for employee
benefits
Share of other
reserves of at
equity
consolidated
companies
Currency reserve
Total
in EUR '000
Gross 3,112,919
5
-420,744
-52
-243,849
2,448,279
+/- Exchange rate changes from financial
assets available for sale 11,443
11,443
+/- Deferred mathematical reserve -750,782
-750,782
+/- Deferred profit participation -1,207,189
0
130,356
0
0
-1,076,833
+/- Deferred taxes -259,774
0
71,529
0
0
-188,245
+/- Other non-controlling interests -14,159
0
3,540
25
2,681
-7,913
Net 892,458
5
-215,319
-27
-241,168
435,949
Composition of other reserves 31.12.2019
Unrealised gains
and losses
Cash flow hedge
reserve
Underwriting
gains and losses
from provisions
for employee
benefits
Share of other
reserves of at
equity
consolidated
companies
Currency reserve
Total
in EUR '000
Gross 2,818,621
37
-436,695
-1,219
-134,267
2,246,477
+/- Exchange rate changes from financial
assets available for sale
7,963
7,963
+/- Deferred mathematical reserve -733,482
-733,482
+/- Deferred profit participation -1,091,172
0
133,911
0
0
-957,261
+/- Deferred taxes -224,720
0
74,516
0
0
-150,204
+/- Other non-controlling interests -12,889
0
3,630
46
1,179
-8,034
Net 764,321
37
-224,638
-1,173
-133,088
405,459
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
39
CONSOLIDATED CASH FLOW STATEMENT
Change in cash and cash equivalents 2020
2019
in EUR '000
Result of the period 242,668
Change in underwriting provisions net -496,340
Change in underwriting receivables and liabilities (incl. deposits on assumed reinsurance business) -38,154
Change in other receivables and other liabilities (excl. leases) 76,321
Change in financial assets recognised at fair value through profit and loss (incl. held for trading) -14,756
-14,292
Gain/loss from disposal of investments -132,379
-211,826
Appreciation/depreciation of investments 129,354
Change in provisions for pensions and similar obligations and provisions for other employee benefits -2,311
Change in deferred taxes -95,263
-4,081
Change in intangible assets 286,510
Change in right-of-use assets and lease receivables and liabilities 65
Change in other balance sheet items -55,569
Other cash-neutral income and expenses
1
-251,350
Cash flow from operating activities 310,620
1,298,764
Payments for the acquisition of subsidiaries -8,895
-68,631
Payments for the acquisition of at equity consolidated companies 0
-153
Cash inflow from the sale of available for sale financial assets 2,699,733
2,946,231
Payments for the acquisition of available for sale finanical assets -3,360,990
-3,420,012
Cash inflow from disposals/repayments of held to maturity financial assets 425,385
Payments for the acquisition of held to maturity financial assets -156,934
-64,117
Cash inflow from the sale of property 7,783
Payments for the acquisition of property -152,911
-387,667
Cash inflow for the sale of intangible assets 4,606
Payments for the acquisition of intangible assets -117,462
-170,239
Change in financial investments for unit-linked and index-linked life insurance 695,280
Change of loans -102,570
-19,252
Change in other investments (excl. deposits on assumed reinsurance business) 165,623
-159,864
Cash flow from investing activities 98,648
-886,004
Cash outflows from subordinated liabilities -64,518
-64,917
Dividend payments -155,389
-142,573
Cash inflow from other financing activities 153,239
Cash outflow from other financing activities -23,682
-130,335
Cash outflows from lease liabilities -33,282
-33,615
Cash flow from financing activities -123,632
-240,298
Change in cash and cash equivalents 285,636
Cash and cash equivalents at beginning of period
2
1,443,358
1,347,279
Change in cash and cash equivalents 285,636
Changes in scope of consolidation 30,603
-77,478
Effects of foreign currency exchange differences on cash and cash equivalents -14,450
Cash and cash equivalents at end of period
2
1,745,147
1,443,358
1
The non-cash income and expenses are primarily exchange rate changes.
2
The amount of cash and cash equivalents at the beginning and the end of period correlates with position cash and cash equivalents on the asset side and consists of cash on hand and overnight deposits.
40
Annual Financial Report 2020
Additional information statement of consolidated cash flows 2020
2019
in EUR '000
Received interest
1
707,750
766,045
Received dividends
1
46,777
56,300
Interest paid
2
70,424
85,923
Income taxes paid
1
210,520
73,458
Expected cash flow from reclassified securities 6,086
7,562
Effective interest rate of reclassified securities 3.80%
4.60%
1
Income tax payments, received dividends and received interest are included in the cash flow from operating activities.
2
Interest paid result primarily liabilities from financing activities.
Reconciliation of liabilities from financing activities 31.12.2020
Subordinated liabilities
(including interest)
1
Liabilities to financial
institutions
Lease liabilities
Financing liabilities
2
in EUR '000
Book value as of 31.12. of the previous year 1,496,971
215,418
199,332
74,539
Cash changes -64,518
103,795
-33,282
25,762
Cash inflows 0
124,739
0
28,500
Payments 0
-16,803
-33,282
-889
Interest paid -64,518
-4,141
0
-1,849
Non-cash changes 63,908
6,054
23,712
1,903
Additions 64,614
6,055
26,415
2,303
Disposals 0
0
-247
0
Measurement changes 0
0
-16
-387
Exchange rate differences -706
-1
-2,440
-13
Book value as of 31.12. 1,496,361
325,267
189,762
102,204
1
The interest payable for subordinated liabilities is included in other liabilities.
2
Contains lease liabilities, derivative liabilities from financing liabilities and other financing liabilities
Reconciliation of liabilities from financing activities 31.12.2019
Subordinated
liabilities
(including
interest)
1
Liabilities to
financial
institutions
Liabilities from
public funding
Lease liabilities
Financing
liabilities
2
in EUR '000
Book value as of 31.12. of the previous year 1,490,839
1,230,601
105,143
1,520,242
Cash changes -64,917
-10,602
2,695
-33,615
8,714
Cash inflows 0
81,663
4,344
0
45,135
Payments -350
-81,766
-1,621
-33,615
-26,925
Interest paid -64,567
-10,499
-28
0
-9,496
Non-cash changes 71,049
-1,004,581
-107,838
232,947
-1,454,417
Additions 64,490
10,628
218
317,485
13,526
Disposals 0
0
-180
-32
-16,432
Changes in scope of consolidation 6,000
-1,015,209
-107,876
-84,487
-1,420,785
Reclassifications 301
0
0
0
-31,077
Measurement changes 0
0
0
0
342
Exchange rate differences 258
0
0
-19
9
Book value as of 31.12. 1,496,971
215,418
0
199,332
74,539
1
The interest payable for subordinated liabilities is included in other liabilities.
2
Contains lease liabilities, derivative liabilities from financing liabilities and other financing liabilities
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
41
PRINCIPLES OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL INFORMATION
Eastern Europe with its registered office located at Schottenring 30, 1010 Vienna . As the ultimate parent company, Wiener
PRINCIPLES OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied during preparation of the consolidated financial statements are presented in the
section titled “Accounting policies“ starting on page 54. The policies described were applied consistently during the
reporting periods presented in these financial statements. The consolidated financial statements were prepared in
accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, and the
applicable provisions of § 245a (1) of the Austrian Commercial Code (Unternehmensgesetzbuch – UGB) and Chapter 7 of
the Austria n Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG). Preparing consolidated financial statements
in accordance with the IFRS requires that estimates be made and that the Managing Board makes assumptions in
connection with the accounting policies. Areas with greater leeway for discretion, highly complex areas, or areas involving
assumptions and estimates that are of critical importance to the consolidated financial statements are listed in the notes on
page 48.
Amounts were rounded to improve readability and, where not indicated otherwise, are shown in thousands of euros (EUR
‘000). Calculations, however, are done using exact amounts, including digits not shown, which may lead to rounding
differences.
Accounting for non-profit societies
Effective 1 August 2019, the portion of the profits of the non-profit societies not attributable to shareholders is no longer
included in the financial result and, therefore, also not in the result before taxes. Deconsolidation of the non-profit societies
had no effect on profit or loss. Due to the change to the at equity method to be applied under IAS 28 as of
31 December 2019, the balance sheet already showed no investments (including land disposals with a book value of
EUR 3,861,525,000 as of 31 July 2019), financing liabilities, or the special “non-controlling interests in non-profit societies”
item under equity for the non-profit societies.
Changes in accounting policies
Except for the following changes, the accounting policies indicated have been applied consistently in all of the periods
shown in these consolidated financial statements. Unless otherwise indicated, the standards that are applicable for the first
time, if relevant, have no or no material effect on the financial statements.
Standards applicable that are used for the first time in the Group Annual Report
Amendments to IFRS 16 Rent reductions in connection with COVID-19
Amendments to IAS 1 and IAS 8 Standardisation and clarification of the definition of materiality
Amendments to IFRS 9, IAS 39 and IFRS 7 IBOR Reform Phase 1
Amendments to various standards Changes of the references to the framework concept in the IFRS standard
Amendments to IFRS 3 Definition of a business operation
Notes to the consolidated financial statements
42
Annual Financial Report 2020
The following standards have already been endorsed by the European Union or are currently in the endorsement process.
Mandatory application, however, is not provided for until a future date.
New standards and changes to current reporting standards Applicable as of
1
Those already adopted by the EU
IFRS 9 Financial instruments 1.1.2018
2
Amendments to IFRS 9 Prepayment features with negative compensation 1.1.2019
2
Amendments to IFRS 4 Deferral of first-time application of IFRS 9 immediately
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16
IBOR Reform Phase 2 1.1.2021
Those which are not or not yet adopted by the EU
IFRS 14 Regulatory Deferral Accounts
EU decided this standard shall not be
transferred into EU law
IFRS 17 Insurance contracts 1.1.2023
Amendments to IFRS 10 and IAS 28
Sale or contribution of assets between an investor and its associated
company or joint venture
First-time application deferred for an
indefinite period
Amendments to IFRS 3 Changes of the references to the framework concept in IFRS Standards 1.1.2022
Amendments to IAS 1 Classification of liabilities as current or non-current 1.1.2022
3
IAS 37 Onerous contracts: costs of contract performance 1.1.2022
All IFRS Annual improvements (Cycle 2018–2020) 1.1.2022
IAS 16 Income before qualified use 1.1.2022
Amendments to IAS 1 and IFRS Practice Statement 2 Definition of materiality in connection with accounting policies 1.1.2023
Amendmends to IAS 8
Definition of accounting estimates and distinguishing them from changes
in accounting policies
1.1.2023
1
The VIG-insurance group is not planning early adoption of the provisions listed in the table.
2
First-time application for insurance companies can be delayed to 1 January 2023.
3
The IASB has published an exposure draft that proposes a deferral to 1 January 2023.
Unless indicated otherwise, either no material effects from the standards listed in the two tables are expected, or the
amendments are not relevant.
IFRS 9 FINANCIAL INSTRUMENTS
The International Accounting Standards Board (IASB) issued the final version of IFRS 9 Financial instruments (IFRS 9) in July 2014.
The standard supersedes IAS 39 “Financial instruments: measurement” (IAS 39), which was previously applicable. Although the
new IFRS 9 standard came into effect on 1 January 2018, companies whose activities are predominantly in the insurance business
are permitted to use the optional exemption from IFRS 9 until IFRS 17 Insurance contracts (IFRS 17) comes into effect.
On 25 June 2020, the IASB issued “Extension of the temporary exemption from applying IFRS 9 (Amendments to
International Financial Reporting Standard (IFRS) 4 Insurance contracts)”. The European Union subsequently adopted the
amendment to IFRS 4 Insurance contracts (IFRS 4) to defer IFRS 9 for insurance groups into EU law under Regulation (EC)
No. 2020/2097. These changes are mainly aimed at preventing potential accounting mismatches between IFRS 17 and
IFRS 9 and providing for simultaneous first-time application of both standards in 2023.
A company’s activities are predominantly in the insurance business if the share of the book value of all liabilities connected
with the insurance business exceeds 90%, or the share is between 80% and 90% and the insurance group does not
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
43
engage in a significant activity unconnected with the insurance business. VIG Insurance Group performed the required
calculations on the basis of 31 December 2015 and satisfies the criteria for deferral of IFRS 4 with a result of more than
90%. IFRS 9 will therefore be applied at the same time as IFRS 17 in VIG Insurance Group. For associated companies
and joint ventures that have applied IFRS 9 since 1 January 2018, VIG Insurance Group has chosen in accordance with
IFRS 4 to include them in the consolidated financial statements without adjustment. IFRS 4 does not require regular
evaluation of the predominant business activity unless there is a change in the entity’s business activities. If the deferral
is used, the change to IFRS 4 requires additional notes disclosures to be published during the period until application
of IFRS 9.
IFRS 9 includes requirements for the recognition, measurement and derecognition of financial instruments, and for hedge
accounting, and supersedes IAS 39, which was previously relevant in these areas. The revision primarily concerns the classi-
fication and recognition of financial instruments. Financial assets are to be classified and measured in only two groups in the
future – at amortised cost and at fair value.
Classification and measurement depends on the business model and contractual cash flows (SPPI criterion). The new
provisions also concern the accounting for impairment of financial assets. In addition to incurred losses (incurred loss model),
expected losses are also recognised (expected credit loss model). Simplifications exist for trade receivables and lease
receivables. New requirements were also provided for hedge accounting. The objective is to orient hedge accounting more
to the economic risk management of the entity in the future.
When IFRS 9 is applied, the previous classification for “Financial assets available for sale“ is no longer needed. In this
category, fair value changes were recognised directly in equity in other comprehensive income. Unrealised gains and losses
are primarily recognised in other comprehensive income and, in the case of disposals, reclassified to profit or loss. IFRS 9
makes a distinction between equity and debt instruments in the fair value measurement class. Equity instruments held for
trading are measured at fair value through profit or loss for the period. For equity instruments that are not held for trading,
the irrevocable choice to perform measurement through other comprehensive income can be used at the time of first
application. Unlike debt instruments, equity instruments measured through other comprehensive income cannot be
included in the profit for the period and are therefore presented in a separate item under equity. In the case of debt
instruments (e.g. bonds, loans), the provisions in IAS 39 “Financial instruments available for sale“ apply analogously. Upon
first-time application of IFRS 9, it can be assumed that the new classification rules and the new impairment model (ECL
model (entry of risk provisions)) will lead to fluctuations in the profit or loss for the period. Accounting mismatches can also
occur with IFRS 17.
VIG Insurance Group already uses a central subledger (tool) for the measurement of financial instruments. This tool allows
the processes associated with the recognition and measurement of financial instruments to be optimised and streamlined.
More than 95% of investments relevant to IFRS 9 are currently managed in this tool. This will allow consistent application
of IFRS 9, incl. calculation of ECL, in the future. The standard-compliant implementation of IFRS 9 is carried out in the
context of VIG Group guidelines (classification and measurement, impairment and hedge accounting).
VIG Insurance Group expects the changeover to IFRS 9 to have effects due to the new impairment model and potential
accounting mismatches with IFRS 17. The classification of financial assets based on the SPPI criteria (Solely Payments of
Principal and Interest) has already been implemented.
44
Annual Financial Report 2020
Fair value 31.12.2020 31.12.2019 Fair value changes
Financial assets SPPI
Other
*
SPPI
Other
*
SPPI
Other
*
in EUR '000
Loans 2,370,223
510,006
2,177,866
544,263
-3,581
638
Bank deposits 766,408
0
973,247
0
0
0
Other financial assets 24,443,927
4,634,034
24,175,017
4,427,075
143,284
33,307
Bonds 24,443,927
1,431,886
24,175,017
1,449,893
143,284
8,593
Shares and other participations and
other non-fixed-interest securities 0
683,331
0
687,972
0
-1,136
Investment funds 0
2,485,878
0
2,254,413
0
21,285
Derivatives 0
32,939
0
34,797
0
4,565
Financial investments for unit-linked and
index-linked life insurance 87,206
7,880,833
91,964
8,528,363
0
74,753
Non-underwriting receivables 682,934
800
712,649
954
0
0
Cash and cash equivalents 1,745,147
0
1,443,358
0
0
0
*Financial instruments that satisfy the SPPI criteria (“SPPI pass”), but are held for trading or managed based on fair value, are to be reported under “Other”, not under SPPI.
Book values 31.12.2020
SPPI financial assets rating categories AAA
AA
A
BBB
BB and lower
No rating
Total
in EUR '000
Loans and bank deposits 40,427
354,954
896,490
908,563
406,118
300,721
2,907,273
Other financial assets 2,227,059
7,485,316
8,276,283
5,209,386
682,505
177,324
24,057,873
Financial investments for unit-linked and
index-linked life insurance 0
7,510
19,125
29,207
23,048
8,316
87,206
Non-underwriting receivables 321
3,528
16,543
760
13,949
647,858
682,959
Cash and cash equivalents 70
13,513
1,138,667
290,614
110,025
192,258
1,745,147
Book values 31.12.2019
SPPI financial assets rating categories AAA
AA
A
BBB
BB and lower
No rating
Total
in EUR '000
Loans and bank deposits 50,784
382,768
799,572
1,009,734
471,724
221,928
2,936,510
Other financial assets 2,195,120
7,663,175
8,580,015
4,496,988
681,046
151,974
23,768,318
Financial investments for unit-linked and
index-linked life insurance
0
5,857
22,475
31,381
31,308
942
91,964
Non-underwriting receivables 400
3,581
14,171
1,054
17,892
676,174
713,272
Cash and cash equivalents 1,798
6,644
686,069
389,726
150,758
208,363
1,443,358
SPPI financial assets with a significant risk of default 31.12.2020 31.12.2019
Book value
Fair value
Book value
Fair value
in EUR '000
Loans and bank deposits 441,798
449,144
482,328
494,767
Other financial assets 753,846
763,384
738,373
746,982
Financial investments for unit-linked and index-linked life insurance 22,960
22,960
31,349
31,349
Non-underwriting receivables 55,646
55,646
84,265
84,265
Cash and cash equivalents 154,999
154,999
207,873
207,873
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45
IFRS 17 INSURANCE CONTRACTS
The International Accounting Standards Board (IASB) issued the final accounting standard for insurance contracts, IFRS
17, on 25 June 2020. During finalisation of IFRS 17, the date of first-time application was deferred two years from 1 January
2021 to 1 January 2023. In addition, the Board decided to align the effective date of first-time application of IFRS 9 for
insurance companies with IFRS 17. The deferral of first-time application of IFRS 17 resulted in the comparative period also
being deferred two years from 1 January 2020 to 1 January 2022.
IFRS 4, which is still currently valid, is to be applied until IFRS 17 enters into effect. IFRS 4 allows local accounting practices
to be used for insurance contracts in the consolidated balance sheet. The IASB imposes uniform accounting policies for
insurance contracts for the first time in IFRS 17. In addition to applying IFRS 4, VIG Insurance Group also plans to change
its accounting in accordance with IFRS 17 in financial year 2022 for comparative periods that will be published in financial
year 2023 as a result of first-time application of IFRS 17.
IFRS 17 provides three measurement models for measuring insurance contracts:
• Measurement is performed, as a rule, using the general measurement model (GMM) based on a prospective method.
The model is based on the concept of contract fulfilment and uses current assumptions. When the GMM is used for
measurement, future cash inflows and outflows are discounted and a risk adjustment applied. First-time measurement
of insurance contracts results in either a profit margin (contractual service margin – CSM) that is distributed over the
term of the contract, or a loss component that is recognised immediately in the income statement. There are a number
of exceptions and special provisions for the GMM that concern groups of investment contracts with discretionary
participation features and reinsurance cessions as well as the two other measurement models below.
• A simpler measurement model – the premium allocation approach (PAA) – may be used for short-term contracts and
low volatility insurance contracts. The simplified approach used by the PAA is similar to the unearned premium model
currently used to account for property and casualty insurance, but with the difference that the loss reserve is also
accounted for using an expected present value and a risk adjustment.
• There is a mandatory measurement model for contracts that are eligible for profit participation and unit-linked and
index-linked life insurance – the variable fee approach (VFA). Measurement is, as a rule, performed according to the
GMM, but the CSM is, in addition, variable in the VFA due to the profit participation.
Measurement units are determined using the following steps:
• Portfolio: Insurance contracts are combined into portfolios
• Group: Portfolios are divided into groups
• Groups are divided according to underwriting year (annual cohorts). Concerning the adoption of IFRS 17 into EU law,
the use of underwriting years is currently still under discussion at EFRAG, primarily with respect to life insurance policies
eligible for profit participation for insurance companies in European Member States.
For initial recognition, IFRS 17 requires insurance contracts to be combined into portfolios that comprise all insurance
contracts that are subject to similar risks and managed together.
46
Annual Financial Report 2020
Each portfolio must be divided into at least the following groups:
• onerous contracts,
• contracts that have no significant possibility of becoming onerous and
• other contracts.
In summary, the most significant changes in the accounting of insurance contracts are:
• the use of current assumptions for measuring underwriting provisions,
• introduction of CSM for the unrealised future profits of a group of insurance contracts that is distributed over the term of
the contract,
• introduction of a risk adjustment to take account of the uncertainty in the cash flows from insurance contracts,
• elimination of savings components (investment component) as income,
• introduction of an OCI (other comprehensive income) option to allow offsetting to eliminate accounting mismatches be-
tween the asset and liabilities side that could occur, for example, with life insurance policies eligible for profit partici-
pation, and
• fair value measurement of cash flows (discounting).
A new central subledger for measuring insurance contracts is being introduced and adjusted to VIG Insurance Group
requirements as part of the Group-wide IFRS 17 programme. The introduction of a central subledger should ensure trans-
parency and help reduce complexity by streamlining IT processes. In addition, a Group-wide survey of selected VIG insur-
ance companies was conducted in 2020 and used to determine a uniform procedure for the formation of portfolios in
accordance with IFRS 17 in the future. Due to final publication of the IFRS 17 standard, almost all of the methodology
working papers could also be finalised.
As a result of existing uncertainties concerning adoption into EU law, and ongoing technical implementation, the effects on
individual balance sheet and income statement items cannot currently be quantified.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
47
FOREIGN CURRENCY TRANSLATION
Foreign currency transactions
The separate financial statements of each subsidiary are prepared in the currency that generally prevails for the ordinary
business activities of the company (functional currency). Within VIG Insurance Group, the functional currency is generally
the local currency. Transactions not concluded in the functional currency are, as a rule, recognised using the mean rate of
exchange on the date of the transaction.
Monetary assets and liabilities in foreign currency existing on the balance sheet date are translated to euros using the mean
rate of exchange on the balance sheet date.
Any resulting foreign currency gains and losses are recognised through profit
or loss during the reporting period.
Translation of separate financial statements in foreign currencies
These consolidated financial statements present assets, liabilities, income and expenses in euros, the reporting currency of
VIG Holding.
All assets and liabilities reported in the separate financial statements are translated to euros using the mean rate of exchange
on the balance sheet date. Items in the income statement are translated using the average month-end mean rate of
exchange during the reporting period. In the statement of cash flows, the mean rate of exchange on the balance sheet date
is used for changes in balance sheet items and the mean rate of exchange at the end of the period is used for changes in
income statement items.
Unless otherwise indicated, all of the financial information presented in euros has been commercially rounded. Currency
translation differences, including those that result from accounting using the equity method, are recognised directly in equity.
Currency End-of-period exchange rate Average exchange rate
31.12.2020
31.12.2019
2020
2019
1 EUR
≙
Albanian lek ALL 123.7000
121.7700
123.7683
122.9982
Bosnian convertible marka BAM 1.9558
1.9558
1.9558
1.9558
Bulgarian lev BGN 1.9558
1.9558
1.9558
1.9558
Georgian lari GEL 4.0233
3.2095
3.5587
3.1585
Croatian kuna HRK 7.5519
7.4395
7.5384
7.4180
Macedonian denar MKD 61.6940
61.4855
61.6742
61.5052
Moldovan leu MDL 21.1266
19.2605
19.7436
19.6742
Turkish new lira TRY 9.1131
6.6843
8.0547
6.3578
Polish zloty PLN 4.5597
4.2568
4.4431
4.2976
Romanian leu RON 4.8683
4.7830
4.8383
4.7453
Swiss franc CHF 1.0802
1.0854
1.0705
1.1124
Serbian dinar RSD 117.5802
117.5931
117.5780
117.8592
Czech koruna CZK 26.2420
25.4080
26.4551
25.6704
Ukraine hryvnia UAH 34.7396
26.4220
30.8013
28.6605
Hungarian forint HUF 363.8900
330.5348
351.2494
325.2985
48
Annual Financial Report 2020
ESTIMATES AND DISCRETIONARY DECISIONS
Preparation of the IFRS consolidated financial statements requires that the Managing Board makes discretionary
assessments and specifies assumptions regarding future developments which could have a material effect on the
recognition and value of assets and liabilities, the disclosure of other obligations on the balance sheet date and the reporting
of income and expenses during the financial year. The book values of the items on the balance sheet date are shown in the
consolidated balance sheet on page 34 or the corresponding disclosures in the notes. Sensitivity analyses for assets and
liabilities from insurance operations are presented in the risk report starting on page 96.
Estimation uncertainties Discretionary decisions
Underwriting provisions Details on page 63 Method of consolidation
Details on page 50
and starting page 68
Non-underwriting provisions
Details on page 48
and starting page 66
Materiality Details on page 50
Financial instruments recognised at fair value not based
on stock market prices or other marked prices (Level 3)
Details on page 48
and starting page 141
Impairment of goodwill Details on page 49
Valuation allowances for receivables and other
(accumulated) impairment losses
Details on page 49
and page 61
Amortisation method for intangible assets with specific
useful lives
Details on page 49
Value of deferred tax assets Details on page 49
Non-underwriting provisions
The non-underwriting provisions are essentially provisions for pensions and similar obligations.
PROVISIONS FOR PENSIONS AND SIMILAR OBLIGATIONS
The present value of an obligation depends on a large number of factors based on actuarial assumptions. The assumptions
used to calculate the net liability (or assets) for obligations include a discount rate. Every change to these assumptions has
an effect on the book value of the obligation.
VIG Insurance Group calculates the appropriate discount rate at a minimum at the end of each year. This is the rate used
to calculate the present value of the future expected cash outflows needed to satisfy the obligation. VIG Insurance Group
determines the discount rate using the interest rate on top quality industrial bonds that are denominated in the currency in
which the benefits will be paid and have maturities matching those of the obligations.
Other important assumptions used to calculate obligations are based on market conditions. Further information on
sensitivity analyses is provided in Note 12. Non-underwriting provisions starting on page 127. Details on the underlying
assumptions can be found in the section titled “Accounting policies” for specific items in the consolidated financial
statements – Provisions for pensions and similar obligations on page 66.
Financial instruments recognised at fair value
Suitable valuation methods are used to calculate the fair value of financial instruments that are not traded in active markets.
The assumptions used are based on market data available on the balance sheet date. To determine the fair value of many
financial assets that are not traded in active markets, VIG Insurance Group uses present value methods based on appropriate
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
49
interest rate models. Note 22. Financial instruments and fair value measurement hierarchy on page 141 provides further
information on the valuation process. Information on the impairment of financial assets is provided on page 60.
Impairment of goodwill
VIG Insurance Group tests goodwill for impairment at least once a year in accordance with the method explained on page
54 in the section titled “Impairment of non-financial assets”. Estimates in this area primarily concern the projected earnings
of the CGUs that the calculations are based on, and specific parameters, in particular the growth rates and discount rates.
Sensitivities
Additional impairment needed
Cash flows
Discount rate
Cash flows and
discount rate
-10%
+1%p
-10% and +1%p
in EUR millions
Slovakia 6.9
8.5
58.7
Baltic states 34.5
Albania incl. Kosovo 1.3
Reducing growth rates by 1 percentage point would not increase the impairment required.
In connection with the global COVID-19 pandemic, there were several triggers leading to an unscheduled impairment test
of intangible assets at half-year 2020. In the first step, VIG Insurance Group checked all CGU groups for a surplus of value
in use over the carrying amounts. For CGU groups that include goodwill and show a surplus that is too small or a deficit,
additional plan updates were performed at the local level. For all other CGU groups, the plan amendment was performed
at the Group level. This resulted in goodwill impairments of EUR 119,282,000 on 30 June 2020.
Valuation allowances for receivables
The collectability of receivables is based on experience and is therefore subject to estimation uncertainty. Information on
the recognition of potential impairment losses is provided on page 61.
Amortisation period for intangible assets with specific useful lives
The use of software held as intangible assets is expected to end before originally planned. This is due to a faster than
planned changeover to new IT systems. The shortening of the useful life increases the amortisation expense in the income
statement by around EUR 43.6 million per year in financial years 2020 and 2021 compared to financial year 2019.
Value of deferred tax assets
Income taxes must be estimated for each tax jurisdiction in which VIG Insurance Group operates. The current income tax
expected for each taxable entity must be calculated and the temporary differences due to differences between the tax and
IFRS treatment of certain balance sheet items must be assessed. If temporary differences exist, as a rule they lead to the
recognition of deferred tax assets and liabilities in the financial statements based on the tax rate for each country.
The amount of the expected current and deferred tax liability or asset reflects the best estimate taking into account tax
uncertainties and, consequently, under application of IFRIC 23.
The Managing Board must make assessments and, taking into account tax uncertainties, judgements when calculating
current and latent taxes. Deferred tax assets are only recognised to the extent that it is probable they can be utilised. The
utilisation of deferred tax assets depends on the likelihood of achieving sufficient taxable income of a particular tax type for
50
Annual Financial Report 2020
a particular tax jurisdiction, while taking into account any statutory restrictions concerning maximum loss carryforward
periods. VIG Insurance Group considers the following factors when assessing the probability of being able to utilise deferred
tax assets in the future:
• past results of operations,
• operating plans,
• loss carryforward periods,
• tax planning strategies and
• existing deferred tax liabilities.
Information on the existing group agreement for Austrian companies and some foreign companies is provided on page 62.
If actual events diverge from the estimates or the estimates must be adjusted in future periods, this could have an adverse
effect on net assets, financial position and results of operations. If the assessment of the recoverability of deferred tax assets
changes, the book value must be reduced or increased and the change recognised in the income statement or charged or
credited to equity, depending on the treatment used when the deferred tax asset was originally recognised. Further
information can be found in the section titled “Accounting policies” for specific items in the consolidated financial statements
– Taxes starting on page 61 and in Note 6. Deferred taxes on page 117.
Method of consolidation
Discretionary decisions by the Managing Board primarily concern determining the scope of consolidation for fully
consolidated companies and at equity consolidated companies. It should be noted that other discretionary decisions could
also have material effects on the net assets and results of operations of VIG Insurance Group.
Companies that were of material importance at the time of first consolidation continue to be included in the scope of
consolidation. In addition, two companies that offer special services or receive most of their revenues from outside the
Group are included in the consolidated financial statements using full consolidation. Companies that, due to their business
activities, have revenues that are primarily generated and charged within the Group and do not generate any significant
profits or losses, are not included in the scope of consolidation unless they have cross-border operations.
Thresholds calculated based on previous quarterly financial statements and the latest annual financial statements are used
to determine the current scope of consolidation.
Materiality
Under IAS 1.31, only material information is to be presented in the financial statements, even if a standard specifies certain
requirements or minimum requirements. The IASB’s aim with regard to this paragraph, in conjunction with a Practice
Statement published thereon, was to create the foundation for clear, understandable financial reporting based on the most
important information.
Discretionary leeway exists when deciding whether information concerns material or immaterial disclosures. The Managing
Board of the VIG Holding introduced the use of a threshold for determining the materiality of notes disclosures in this Annual
Report. If the threshold is not exceeded, information is only published in the Annual Report if the information is judged
during the approval process based on qualitative criteria to be material for the financial statement reader.
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51
INFORMATION CONCERNING THE COVID-19 PANDEMIC
GOING CONCERN
The financial statements were prepared on a going concern basis in accordance with IAS 1.25 and IAS 1.26. The Managing
Board made this assessment in spite of the ongoing COVID-19 pandemic primarily based on VIG Insurance Group’s solid
capital resources, positive result before taxes and risk-averse investment.
Risks related to the COVID-19 pandemic
A further lengthening or worsening of the COVID-19 pandemic, and the potential impacts this could have on capital markets
and the insurance business, could have a negative effect on the net assets, financial position and results of operations of
VIG Insurance Group. This includes, in particular, risks related to possible fluctuations on bond and capital markets that
were also observed in the early phase of the COVID-19 pandemic. If the COVID-19 pandemic continues or worsens again,
there are also risks on a smaller scale of an increase in claims and reduction of premium volume.
INSURANCE BUSINESS
Premium development
The insurance business is subject to seasonal and economic effects. Most of the premiums are generated in the 1
st
half of
the year, with new policies in the property lines of business in the eastern countries of VIG Insurance Group mostly already
concluded at the beginning of the year. A decrease in new business was observed in the motor lines of business and travel
insurance. This decrease is related to the lockdown and travel restrictions due to the COVID-19 pandemic. An increased
need for health insurance was identified in some countries in the 1
st
half of the year which is assumed to have a connection
to the COVID-19 pandemic. It is not assumed, however, that this level of new business can be maintained in the future. In
the Group, policyholders hardly made use of any deferrals or premium waivers.
Claims and cost development
The improvement in the claims ratio was mainly due to the lockdown and travel restrictions and the resulting positive effects
in many countries. The decrease in claim payments in financial year 2020, mainly in the motor lines of business, was
generally also supported by a disproportionately large increase in the reinsurance no-claims commission. The decrease in
claim payments also led to a reduction in the included claims handling costs.
Underwriting provisions
In the area of reserves for incurred but not reported (IBNR) claims, additional reserves were included due to an increase in
expected late claim notifications and uncertainty about future developments. The Group subsidiaries had additional
provisions of around EUR 72.5 million, primarily for the motor, health and travel insurance lines of business. The adequacy
of the underwriting provisions is checked in detail each year as part of the liability adequacy test during preparation of the
consolidated financial statements. The comparison of the best estimate (after reinsurance) calculated based on the Solvency
II principles with the IFRS provisions (after reinsurance) showed a significant surplus. As before, the IFRS provisions can
therefore be considered adequate. Detailed information is available on page 88 in the risk report.
52
Annual Financial Report 2020
INTANGIBLE ASSETS
The Group tests intangible assets for impairment at least once a year in accordance with the method explained in the
section “Impairment of non-financial assets” on page 54. Estimates in this area primarily concern the projected earnings of
the CGUs that the calculations are based on, and specific parameters, in particular the growth rates and discount rates. In
connection with the global COVID-19 pandemic, several triggers emerged leading to an unscheduled impairment test of
intangible assets at half-year 2020. In the first step, the Group checked all CGU groups for a surplus of value in use over
the carrying amounts. For CGU groups that include goodwill and show a surplus that is too small or a deficit, additional
plan updates were performed at the local level. Due to the uncertainties caused by the COVID-19 pandemic, (multiple)
scenarios were calculated for the multi-year plans and stored with their probabilities of occurrence at the Group level. These
modified multi-year plans were used to calculate an expected value for the CGU groups. For all other CGU groups, a plan
amendment was performed at the Group level. The values recorded in the 1
st
half of 2020 are shown on page 55.
LEASES
Lease liabilities are measured by discounting the future lease payments by the interest rate implicit in the lease at the
beginning of the lease term. If the discount rate cannot be determined, the incremental borrowing rate is used. The
incremental borrowing rate consists of the country-specific benchmark rate and an individual credit spread. The country-
specific benchmark rate is based on the currency, the credit spread on the credit quality and country risks. Both parameters
are determined for equivalent terms. Since VIG Insurance Group has primarily concluded long-term leases in the area of
real estate, the benchmark rates for periods up to 30 years were determined. Due to the effects of the COVID-19 pandemic
on financial markets and classification of the COVID-19 pandemic as a triggering event, the incremental borrowing rate
used for measuring newly concluded or modified lease liabilities was updated for 2020.
In addition, VIG Insurance Group waived around EUR 6.5 million for operating leases. Deferrals were only used to an
insignificant extent in the Group, with around EUR 1.9 million granted, thereof EUR 0.2 million were received in the current
financial year.
INVESTMENTS
Market risk and capital market scenario analysis
The market risks, including associated discussions, are presented in the risk report starting on page 88, and the change in
fair value and resulting effect on assets, including associated discussions, is provided starting on page 89.
Financial result
In Note 16. Financial result excl. result from shares in at equity consolidated companies starting on page 132, around
EUR 68.5 million in impairments of available for sale financial assets are recognised in the income statement for financial
year 2020. Due to the turbulence on capital markets, it is impossible to quantify the impairments that are directly due to the
effects of the COVID-19 pandemic.
In spite of the recommendations by supervisory authorities in some countries that financial service providers either defer or
suspend dividends due to the COVID-19 pandemic, no material effects on the Group were identified.
Result from shares in at equity consolidated companies
VIG Insurance Group holds shares in the company Österreichisches Verkehrsbüro AG, which is accounted for using the
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
53
equity method. Due to the current order situation in connection with the COVID-19 pandemic, around EUR 29 million in
impairment was recognised for these shares.
OTHER INFORMATION
Loans
Based on the data provided for overdue loans, there is no observable effect.
Receivables
Due to the COVID-19 pandemic, around EUR 6.3 million in impairments were recognised for underwriting receivables that
were no longer considered recoverable or collectible at the end of the year. The amounts that were deferred after agreement
between the insurance companies and policyholders were not classified as past due.
Group subsidiary dividends
Due to the COVID-19 pandemic and uncertainty about future economic developments, national supervisory authorities in
some countries where VIG Insurance Group operates recommended that dividends be deferred or suspended until the
effects of the COVID-19 pandemic can be better estimated. This had no effect on the cash and cash equivalents available
to VIG Insurance Group as a whole or the consolidated cash flow statement.
Government grants
There are many government initiatives in all of the countries where the Group operates that are aimed at boosting their
domestic economies again. The Group has only made use of government grants to a very small extent. These grants
concern, among other things, compensation for short-time work for companies operating in the hotel industry, childcare
allowance and reduced taxes on low salaries. Although applications were submitted and approved for some grants, they
have no material effect on net assets, financial position or results of operations.
Government grants 1.1.-31.12.2020
in EUR '000
Government – through Income Statement 990
Grants related to income – shown separately 4
Grants related to income – deducted from the related expense 986
Value of deferred taxes
A test performed at the Group level in coordination with the local companies indicated that the deferred tax assets shown
in this annual report continue to show no impairment.
Non-underwriting provisions
No significant amounts were recognised for provisions in the Group.
Contingent receivables and liabilities
No significant changes to contingent receivables and liabilities were found.
Related parties
Dividend payments were deferred at the end of the first half of the year. This outstanding receivable was owed by at equity
consolidated companies and was settled in 2020.
54
Annual Financial Report 2020
ACCOUNTING POLICIES
INTANGIBLE ASSETS (A)
Goodwill
Goodwill is accounted for in the functional currency of each entity. Goodwill is measured at cost less accumulated
impairment losses. In the case of participations in associated companies, goodwill is included in the adjusted book value
of the participation.
Other intangible assets
Purchased intangible assets are recognised on the balance sheet at cost less accumulated amortisation and impairment losses.
No intangible assets were created by the companies in the scope of consolidation. The corporate asset, SAP, essentially
consists of a bundle of purchased software modules that are prepared by in-house and third-party development work for
future use. With regular monitoring and assessment of the project, this ensures the recognition criteria for capitalising these
expenses are met. With the exception of trademarks, all intangible assets have a finite useful life. The intangible assets are
therefore amortised over their period of use. The useful lives of significant intangible assets are as follows:
Average useful life in years from
to
Software 3
11
Software is amortised using the straight-line method. Software components are also examined on an event-driven basis to
see whether they can still be used. If there is a high probability that certain IT systems or programme sections can no longer
be used or no longer be fully used, a write-down must be made. Further information is provided in the notes to the
consolidated balance sheet 1. Intangible assets starting on page 103.
Trademarks with unlimited useful lives were identified as part of the purchase price allocation during acquisition of the
companies Asirom, BTA Baltic and Seesam in previous years. The unlimited useful life results from the fact that there is no
foreseeable end to their economic life. The fair value of the trademarks was determined during first-time consolidation using
the relief-from-royalty method. A “tax amortisation benefit” was taken into account in the relief-from-royalty method. The
Asirom trademark had a book value of EUR 13,874,000 (EUR 16,564,000), the BTA Baltic trademark had a book value of
EUR 37,000,000 (EUR 37,000,000) and the Seesam trademark had a book value of EUR 7,700,000 (EUR 10,500,000) on
31 December 2020.
Impairment of non-financial assets
The subsidiaries are combined into cash-generating units (CGU groups) at the geographical country level for testing goodwill.
The CGU groups used for impairment testing essentially correspond to the VIG Insurance Group operating segments. The
trademarks were also individually tested for impairment using the relief-from-royalty method.
As a rule, the value in use calculated using the discounted cash flow method is used as the recoverable amount for the
CGU group. In cases where the value in use is less than book value, fair value less selling costs is also calculated. Fair value
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less cost of disposal is calculated using trailing stock exchange multipliers for the property and casualty and health lines of
business in all regions and for the life business outside Austria. For the life business in Austria the Market Consistent
Embedded Value is used.
To calculate value in use, the cash flows available to shareholders of five planning years and the following perpetual annuity
are discounted. All subsidiaries prepare detailed plans in local currency for three years that are submitted in supervisory
board meetings and centrally checked for plausibility as part of the planning and control process. Currencies are translated
to euros using the exchange rate on the 31 December reporting date for the financial year. Extrapolation of the plans for a
further two years and the perpetual annuity is performed using key parameter projections (combined ratios, premium growth,
financial income) based on their past values and expected future market changes. The predicted cash flows for the
perpetual annuity are assumed to continue forever.
All of the underwriting business assets are assigned to the CGU groups. In addition to goodwill and trademarks, these also
include all insurance portfolios and customer bases, investments, receivables and other assets. Underwriting provisions
and current liabilities are deducted from the book values. Assets held at the Group level but used by the operating
companies are allocated to the CGU groups in the form of corporate assets. The cash flows of the CGU groups are
accordingly adjusted for amortisation of the allocated corporate assets.
To calculate the discount rates, the capital asset pricing model (CAPM) is used to calculate a cost of equity capital. This is
done by adding country-specific inflation differentials, risk premiums and sector-specific market risk to the risk-free interest
rate (equal to the yield on German government bonds on the reporting date calculated using the Svensson method). The
base rate before inflation differentials was -0.14% (0.34%). The market risk of 8.39% (7.66%) was multiplied by a beta factor
of 0.95 (0.83) that was calculated based on a specified peer group.
The long-term growth rates are calculated during the financial year based on the compound annual growth rate (CAGR)
assuming that insurance penetration in the countries concerned starting in 2013 will converge in 50–70 years consistent
with the current situation in Germany. An inflation adjustment equal to half of the inflation included in the cost of equity was
added to the CAGR.
Impairment and recoverable amounts for CGU groups 2020 2019
at the end of the first half of 2020 Impairment
Recoverable amount
Impairment
Recoverable amount
in EUR
millions
Romania
108.8
243.0
Bulgaria 59.8
194.9
Georgia
*
13.3
13.2
Croatia 45.0
70.2
*The impairment was EUR 12.5 million as of 31 December 2020 after adjusting for exchange rate effects.
Impairment of non-financial assets is recognised in other non-underwriting expenses in the income statement.
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Annual Financial Report 2020
CGU groups Discount rates Country risks Long-term growth rate
2020
2019
2020
2019
2020
2019
in %
Austria 8.19
7.11
0.38
0.39
1.50
1.50
Czech Republic 8.86
7.38
0.59
0.60
4.25–5.79
4.01–4.92
Slovakia 8.63
7.56
0.82
0.84
5.32–5.53
5.16–5.17
Poland 9.16
8.77
0.82
0.84
5.20–6.65
5.48–6.52
Romania 10.95
9.68
2.13
2.17
5.84–7.97
5.71–7.64
Baltic states 8.81
7.74
1.00
1.02
4.94–6.39
4.87–5.92
Hungary 11.34
10.10
2.13
2.17
6.21–6.55
6.19–6.25
Bulgaria 9.84
8.86
1.55
1.88
6.12–6.98
6.17–6.83
Georgia 12.10
10.77
2.91
2.96
6.69
6.54
Turkey 22.72
20.62
5.33
4.44
9.88
9.83
Germany 7.81
6.72
0.00
0.00
1.50
1.50
Liechtenstein 7.81
6.72
0.00
0.00
1.50
1.50
Albania incl. Kosovo 12.30
11.22
4.36
4.44
6.48
6.41
Bosnia-Herzegovina 14.16
12.74
6.30
6.42
5.38–7.49
5.23–7.19
Croatia 10.33
9.09
2.42
2.96
5.13–7.06
4.86–6.25
Moldova 17.69
16.20
6.30
6.42
9.11
9.31
North Macedonia 11.48
10.41
3.49
3.55
5.98
5.90
Serbia 12.24
11.03
3.49
3.55
5.72–7.51
5.64–7.24
Ukraine 17.75
17.30
6.30
7.39
8.59–12.35
8.49–12.27
Central Functions 8.19–12.24
7.11–11.03
0.38–3.49
0.39–3.55
1.50–7.51
1.50–7.24
INVESTMENTS (B)
General information
In accordance with the relevant IFRS requirements, some VIG Insurance Group assets and liabilities are carried at fair value
in the consolidated financial statements. This concerns a significant portion of investments. VIG Insurance Group assigns
all financial instruments measured at fair value, and assets and financial liabilities not measured at fair value – whose fair
values are to be published in the notes to the financial statements – to one of the levels of the IFRS 13 measurement
hierarchy. As a result of the decentralised organisational structure of VIG Insurance Group, the individual subsidiaries are
responsible for this fair value categorisation. This takes account, in particular, of local knowledge of the quality of the
individual fair values and any input parameters needed for model valuation.
Fair values are determined using the following hierarchy specified in IFRS 13:
• The determination of fair value for financial assets and liabilities is generally based on price quotations in active markets
for identical assets or liabilities (Level 1).
• If a financial instrument is not listed and no market price quotations are available in active markets, fair value is
determined using market price quotations for similar assets or market price quotations in inactive markets (Level 2).
Standard valuation models with inputs that are observable in the market are used for Level 2 measurements. These
models are primarily used for illiquid bonds (present value method) and structured securities.
• The fair value of certain financial instruments, in particular bonds from countries without active capital markets, and
property, is determined using valuation models with input factors that are generally unobservable in the market. These
models use, for example, transactions in inactive markets, expert reports and the structure of cash flows (Level 3).
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The table below lists the methods used and most important input factors for Levels 2 and 3. The calculated fair values can
be used for recurring and non-recurring measurements.
Pricing method Used for Fair Value Input parameters
Level 2 Observable
Present value method
Bonds; borrower's note loans; loans; securitised
liabilities and subordinated liabilities
Theoretical price Issuer, sector and rating-dependent yield curves
Libor market model present
value method
Bonds and borrower's note loans with other embedded
derivates
Theoretical price
Money market and swap curves; implied volatility surface;
cap & floor volatilities; issuer, sector and rating-
dependent yield curves
Present value method Currency futures contracts Theoretical price
Exchange rates; money market curves for the currencies
concerned
Present value method Interest rate/currency swaps Theoretical price
Exchange rates; money market and swap curves for the
currencies concerned
Option pricing models Stock options Theoretical price
Share prices on the valuation date; implied volatilities;
yield curve
Level 3 (Un-)observable
Option pricing models Stock options Theoretical price Share prices on the valuation date; volatilities; yield curve
Market value method Real estate Appraisal value
Real estate-specific income and expense parameters;
capitalisation rate; data on comparable transactions
Discounted cash flow-model Real estate Appraisal value
Real estate-specific income and expense parameters;
discount rate; indexes
Multiples approach Shares Theoretical price
Company-specific earnings figures; typical industry
multipliers
Discounted cash flow-model Shares Theoretical price Company-specific earnings figures; discount rate
Share of capital Shares Book value
Company-specific equity according to separate financial
statements
Amortised cost
Fixed income instruments (illiquid bonds, policy loans,
loans) with no observable input data for comparable
assets
Book value Cost-price; redemption price; effective yield
For further information, please see Note 22. Financial instruments and fair value measurement hierarchy on page 141.
The following table presents the relationships between balance-sheet items and classes of financial instruments according
to IFRS 7, incl. the basis of the measurements:
Balance sheet items, IAS 39 Categories and classes of financial instruments according to IFRS 7 Measurement method
Financial assets
Loans and other investments At amortised costs
Financial assets held to maturity At amortised costs
Financial assets available for sale At fair value
Financial assets recognised at fair value through profit and loss
*
At fair value
Financial investments for unit-linked and index-linked life insurance At fair value
Financial liabilities
Subordinated liabilities (other liabilities) At amortised costs
Liabilities to financial institutions (other liabilities) At amortised costs
Financing liabilities (other liabilities) At amortised costs
Derivative liabilities (other liabilities) At fair value
*Including held for trading
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Annual Financial Report 2020
Property
Both owner-occupied and investment properties are reported under property. Property that is both self-used and investment
property is divided. For small amounts that do not exceed the 20% limit, the entire property is reported in the larger category
(80:20 rule).
Costs incurred in later periods are only capitalised if they lead to a significant increase in future opportunities for use of the
building (e.g. through building expansion or new building construction).
Owner-occupied and investment buildings are both depreciated using the straight-line method over the expected useful
life. The following average useful lives are assumed when determining depreciation rates:
Average useful life in years from
to
Buildings 20
50
OWNER-OCCUPIED PROPERTY
Owner-occupied property is measured at cost minus accumulated depreciation and impairment losses. Cost comprises all
costs incurred in putting the asset into its present location in its present condition.
INVESTMENT PROPERTY
Investment property consists of property that are held to earn rental income or for capital appreciation and not for the
provision of services, administrative purposes or for sale in the ordinary course of business. Investment property is measured
at cost minus accumulated depreciation and impairment.
IMPAIRMENT OF PROPERTY
Property appraisals are performed at regular intervals for owner-occupied property and investment property by sworn and
judicially certified building construction and property appraisers. Fair value is calculated using the capitalised earnings
method or market comparisons. Unless leased, the asset value method is generally only used for undeveloped land. The
discounted cash flow method is used in exceptional cases.
If the fair value is below the book value (cost minus accumulated depreciation and write-downs), the asset is impaired. In
this case, the book value is written down to fair value through profit or loss. The method used to test for impairment is also
used to test for a reversal of impairment. On each balance sheet date, a test is performed for indications that a reversal of
impairment has taken place. The book value after the reversal may not exceed the book value that would have existed
(taking into account amortisation or depreciation) if no impairment had been recognised.
Both impairments and reversals of impairments are reported in the financial result in the income statement and are shown
starting on page 132. The fair values and level hierarchy according to IFRS 13 are shown in Note 22. Financial instruments
and fair value measurement hierarchy starting on page 141.
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Financial assets
Financial assets are divided into the following categories in accordance with the requirements of IAS 39:
• Loans and other investments, other receivables,
• Financial assets held to maturity,
• Financial assets available for sale,
• Financial assets recognised at fair value through profit and loss and
• Financial assets held for trading.
On initial recognition, the corresponding financial assets are measured at cost, which equals fair value at the time of acqui-
sition. For subsequent measurement of financial assets, two measurement methods are used.
LOANS AND OTHER INVESTMENTS, OTHER RECEIVABLES AND FINANCIAL ASSETS HELD TO MATURITY
Loans and other investments, other receivables and financial assets held to maturity
are subsequently measured at amortised
cost. The amortised cost is determined using the effective interest rate of the asset in question. A write-down is recognised
in profit or loss in the case of permanent impairment.
The current income recorded in the income statement is essentially interest income.
FINANCIAL ASSETS AVAILABLE FOR SALE
These financial assets are non-derivative financial assets that are designated as available for sale and are not classified as loans
and other investments, other receivables, held-to-maturity
financial assets or financial assets at fair value through profit or loss.
Financial assets available for sale are measured at fair value. Fluctuations in value are to be recognised in other comprehensive
income and are reported in equity in other reserves. This does not include impairment, which is recognised in profit and loss.
Further information on the calculation of impairment for financial assets is provided on page 60.
Upon disposal, the cumulative gains and losses recognised in other reserves in previous periods are transferred to the result
for the period (recycling).
Spot transactions are accounted for at the settlement date.
FINANCIAL ASSETS RECOGNISED AT FAIR VALUE THROUGH PROFIT AND LOSS
Changes in fair value are recognised in profit or loss. The financial assets assigned to this category are predominantly
structured financial assets (“hybrid financial instruments”) that VIG Insurance Group has elected under IAS 39.11A and IAS
39.12 to assign to the category of “Financial assets at fair value through profit or loss”. Structured financial assets are
assigned to this category if the derivatives embedded in the host contract (as a rule securities or loans) are not closely
related to the host contract so that otherwise the requirement under IAS 39 of isolating them from the host contract and
measuring them separately at fair value would apply.
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Annual Financial Report 2020
AMENDMENTS TO IAS 39 AND IFRS 7 RECLASSIFICATION OF FINANCIAL ASSETS
The IASB published amendments to IAS 39 and IFRS 7 in October 2008. The adjusted version of IAS 39 permits reclassi-
fication of non-derivative financial assets (except for financial instruments that were measured using the fair value option upon
initial recognition) in the “held-for-trading” and “available-for-sale” categories.
The amendments to IAS 39 and IFRS 7 went into effect retroactively to 1 July 2008 and were applied prospectively from the
time of reclassification. Reclassifications performed in VIG Insurance Group before 1 November 2008 used fair values as of
1 July 2008. Further details are provided on page 110 and page 112.
Derecognition of financial assets is performed when contractual rights to their cash flows expire.
IMPAIRMENT OF FINANCIAL ASSETS
On each balance sheet date, the book values of financial assets not measured at fair value through profit or loss are
tested for objective evidence of impairment. Such evidence could be, for example, the debtor experiencing significant
financial difficulties, a high probability of insolvency proceedings against the debtor, the loss of an active market for the
financial asset, a significant change in the technological, economic, legal or market environment of the issuer, or a
permanent decrease in the fair value of the financial asset below amortised cost. The Managing Board has considerable
discretion when quantifying the influence of information that could affect the creditworthiness, rating and/or earning
power of a debtor.
Any impairment losses due to fair value lying below the book value are recognised in profit or loss. If any changes to the fair
value of available for sale financial assets were previously recognised directly in equity, these changes must be eliminated
from equity and recognised in profit or loss on the income statement. As a rule, impairment of equity instruments is to be
recognised if the average fair value during the last six months was consistently less than 80% of the historical cost of
acquisition and/or if the fair value as of the reporting date is less than 50% of the historical cost of acquisition.
FINANCIAL INSTRUMENTS FOR UNIT-LINKED AND INDEX-LINKED LIFE INSURANCE (C)
Financial instruments for unit-linked and index-linked life insurance provide cover for unit-linked and index-linked life
insurance underwriting provisions. The survival and surrender payments for these policies are linked to the performance of
the associated financial assets for unit-linked and index-linked life insurance. The income from these financial instruments
are also credited in full to the policyholders. As a result, policyholders bear the risk associated with the performance of the
financial instruments for unit-linked and index-linked life insurance.
These financial instruments are held in separate cover funds, and managed separately from the other financial assets of
VIG Insurance Group. Since the changes in value of the financial instruments for unit-linked and index-linked life insurance
are occasionally equal to the changes in value of the underwriting provisions, these financial instruments are valued in
accordance with the requirements of IAS 39.9b. Financial instruments for unit-linked and index-linked life insurance are
therefore measured at fair value, and changes in value are recognised in the income statement.
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REINSURERS’ SHARE IN UNDERWRITING PROVISIONS (D)
The reinsurers’ share in underwriting provisions is measured in accordance with contractual provisions.
The credit quality of each counterparty is taken into account when the reinsurers’ share is measured. As a result of the good
credit quality of VIG Insurance Group’s reinsurers, no valuation allowances were needed for reinsurers’ shares as of the
31 December 2020 and 31 December 2019 balance sheet dates.
Information on the selection of reinsurers is provided in the section titled “Financial instruments and risk management” starting
on page 79.
RECEIVABLES (E)
The receivables shown in the balance sheet relate in particular to the following receivables:
• Receivables from direct insurance business
– from policyholders
– from insurance intermediaries
– from insurance companies
• Receivables from reinsurance business
• Other receivables
As a rule, receivables are reported at cost less impairment losses for losses already incurred but not yet known (e.g. death
that is not yet known). Impairment is necessary if there is material evidence of financial difficulties, such as default or delay
in payment and the items therefore cannot be considered collectable or not fully collectable. In the case of receivables from
policyholders, expected impairment losses from non-collectable premium receivables are shown on the liabilities side of the
balance sheet under “Other underwriting provisions” (provisions for cancellations) or deducted from the premium receivable
using a valuation allowance. The amounts included are shown in Note 5. Receivables on page 116.
TAXES (F)
Income tax expenses comprise actual taxes and deferred taxes. The income tax associated with transactions recognised
directly in equity is also recognised directly in equity. The actual taxes for the individual VIG Insurance Group companies are
calculated using the company’s taxable income and the tax rate applicable in the country in question.
Deferred taxes are calculated using the balance sheet liability method for all temporary differences between the asset and liability
values recognised in the IFRS consolidated financial statements and the individual company tax bases for these assets and
liabilities. Under IAS 12.47, deferred taxes are measured using the tax rates applicable at the time of realisation. In addition, any
probable tax benefits realisable from existing loss carryforwards are included in the calculation. Exceptions to this deferral
calculation are differences from non-tax-deductible goodwill and any deferred tax differences linked to participations.
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Annual Financial Report 2020
Deferred tax assets are not recognised if it is not probable that the tax benefits they contain can be realised. Deferred taxes
are calculated using the following tax rates:
Tax rates 31.12.2020
31.12.2019
in %
Albania 15.0
15.0
Bosnia-Herzegovina 10.0
10.0
Bulgaria 10.0
10.0
Germany
1
30.0
30.0
Estonia
2
0.0
0.0
Georgia
3
15.0
15.0
Kosovo
4
10.0
10.0
Croatia 18.0
18.0
Latvia 0.0
0.0
Liechtenstein 12.5
12.5
Lithuania 15.0
15.0
Moldova 12.0
12.0
North Macedonia 10.0
10.0
Austria 25.0
25.0
Poland 19.0
19.0
Romania 16.0
16.0
Serbia 15.0
15.0
Slovakia 21.0
21.0
Czech Republic 19.0
19.0
Turkey
5
20.0
22.0
Ukraine 18.0
18.0
Hungary 11.3
11.3
1
The tax rate shown here is a flat tax rate. The tax rate is between 15,825% and 31,715%, depending on the registered office and activities of the company.
2
The reinvested profits of locally domiciled companies are not subject to corporate income tax. Profit distributions by the companies are subject to a tax rate of 14% to 20%.
3
As a rule, the reinvested profits of locally domiciled companies will not be subject to corporate income tax starting 1 January 2023. The planned implementation date was postponed from 1 January 2019 to 1
January 2023.
4
Insurance companies will no longer be subject to a 5% corporate income tax on their gross premiums. Retained earnings have been subject to a 10% corporate income tax since August 2019.
5
As of 1 January 2021, a corporate income tax of 20% applies for current taxes.
Group taxation
With Wiener Städtische Versicherungsverein as the parent company there is a corporate group of companies within the
meaning of § 9 of the Austrian Corporate Income Tax Act (KStG). The taxable earnings of group members are attributed to
the head of the tax group. The head of the tax group has entered into agreements with each group member governing the
allocation of positive and negative tax amounts for the purpose of allocating corporate income tax charges according to
origin. If a group member earns positive income, 25% is allocated to the head of the tax group. In case of negative income,
the group member receives lump-sum compensation equal to 22.5% of the tax loss. Since the tax allocation is 25% in the
case of positive income, the group member should provide 10% of the tax benefit from group taxation resulting from
inclusion of that group member in the group. Cash settlement of tax benefits is performed for a period of three years.
OTHER ASSETS (G)
Other assets are measured at cost less cumulative depreciation and impairment losses. Depreciation is performed using
the straight-line method over the expected useful life of the asset.
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UNDERWRITING PROVISIONS (H)
Classification of insurance policies
Contracts under which an insurance company assumes a significant insurance risk from another party (the policyholder),
by agreeing to provide compensation to the policyholder if a specified uncertain future event (the insured event) negatively
affects the policyholder are treated as insurance policies for the purposes of IFRS. A distinction is made between insurance
risk and financial risk. Financial risk is the risk of a possible future change in specific interest rates, securities prices, price
indices, interest rate indices, credit ratings, credit indices, or some other variable, provided that the variable is not specific
to one counterparty in the case of a non-financial variable. In many cases, particularly in the life insurance area, insurance
policies as defined in IFRS also transfer financial risk.
Policies under which only an insignificant insurance risk is transferred from the policyholder to the insurance company are
treated as financial instruments (“financial insurance policies”) for IFRS reporting purposes. Such policies exist only to a
minor extent in the personal insurance area.
Both insurance contracts and financial insurance policies can have contract terms that qualify as discretionary participation
in net income (“profit participation”, “profit-dependent premium refund”). Contractual rights are considered discretionary
participation in net income if in addition to guaranteed benefits the policyholder also receives additional payments that are
likely to constitute a significant portion of the total contractual payments and are contractually based on:
• the profit from a certain portfolio of policies or a certain type of policy, or
• the realised and/or unrealised investment income from a certain portfolio of assets held by the insurance company, or
• the profit or loss of the company, investment fund, or business unit (e.g. balance sheet unit) holding the contract.
Policies with discretionary net income participation exist in all VIG Insurance Group countries, primarily in the life insurance
balance sheet unit, and to a secondary extent in the property and casualty and health insurance areas as well, and are
treated as insurance policies in accordance with IFRS 4. The net income participation in life insurance usually exists in the
form of participation in the net income or net interest income of the balance sheet unit in question calculated according to
national accounting requirements. Net income or profit participation amounts that have already been allocated or committed
to policyholders are reported in the mathematical reserve. Amounts reported in the local annual financial statements which
have been committed or allocated to policyholders in the future by means of net income participation are reported in the
balance sheet in the provision for performance-based premium refunds.
In addition, the profit-related portion resulting from IFRS measurement differences as compared to local measurement
requirements (deferred profit participation) is also reported in the provision for profit-related premium refunds. This primarily
concerns Austrian and German policies that are eligible for profit participation, as the profit participation in these countries
is governed by regulations. Deferred profit participation is not recognised in balance sheets in other countries, since policy-
holder participation is at the sole discretion of the company concerned. The rate used for calculating deferred profit parti-
cipation is 80% of the difference between the value recognised in the local financial statements and the value recognised
in the IFRS financial statements.
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Annual Financial Report 2020
As permitted by IFRS 4, the option to present unrealised gains and losses with the same effects on balance sheet
measurements of underwriting provisions, capitalised acquisition costs and purchased insurance portfolios as realised gains
and losses has been applied (shadow accounting). The first step is to allocate unrealised gains on available-for-sale financial
instruments to a deferred mathematical reserve to serve as security for contractually agreed insurance payments. The
policyholder’s share of the surplus from the remaining unrealised gains is then allocated to a provision for deferred profit
participation. Any remaining asset balance is reported as deferred policyholder profit participation resulting from measure-
ment differences. This deferred item is only recognised if it is highly probable, at company level, that the item can be satisfied
by future profits in which the policyholders participate.
RECOGNITION AND ACCOUNTING METHODS FOR INSURANCE POLICIES
Based on the election provided in IFRS 4, the values recognised in the consolidated financial statements prepared in
accordance with applicable national law are carried over to the IFRS consolidated financial statements. The national
provisions are only carried over, however, if they satisfy the minimum requirements of IFRS 4. Equalisation and catastrophe
provisions are therefore not recognised. In principle, accounting rules were not changed to differ from national accounting
requirements, except when parameters used to calculate underwriting provisions did not lead to adequate funding for future
provisions. In such cases, VIG Insurance Group uses its own parameters, which are consistent with these principles. In
individual cases, the provisions formed locally by an insurance company for outstanding claims are adjusted in the
consolidated financial statements based on the corresponding analysis. Detailed information on the valuation of underwriting
items is available in the remarks for each item.
ADEQUACY TEST FOR LIABILITIES ARISING FROM INSURANCE POLICIES
Liabilities from insurance policies are tested at each balance sheet date for adequacy of the provisions recognised in the
financial statements.
If the value calculated based on up-to-date estimates of current valuation parameters, taking into account all future cash
flows associated with the insurance policies, is higher than the provisions formed for liabilities from insurance policies, an
increase in the provisions is recognised in profit or loss to eliminate the shortfall.
Provision for unearned premiums
Under the current version of IFRS 4, figures in annual financial statements prepared in accordance with national require-
ments may be used for the presentation of figures relating to insurance policies in the consolidated financial statements. In
Austria, a cost discount of 15% (15%) is used when calculating unearned premiums in the property and casualty balance
sheet unit (10% for motor third party liability insurance (10%)), corresponding to EUR 29,766,000 (EUR 28,312,000).
Acquisition expenses in excess of this figure are not capitalised in Austria. For foreign companies in the property and
casualty balance sheet unit a portion of the acquisition expenses is generally recognised in the same proportion as the ratio
of net earned premiums to written premiums. To ensure uniform presentation, these capitalised acquisition costs are also
shown in the consolidated financial statements as a reduction in the provision for unearned premiums: EUR 360,904,000
(EUR 355,679,000).
Mathematical reserve
Life insurance mathematical reserves are calculated using the prospective method as the actuarial present value of
obligations (including declared and allocated profit shares and an administrative cost reserve) minus the present value of all
future premiums received. The calculation is based on such factors as expected mortality, costs and the discount rate.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
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The mathematical reserve and related premium rate are essentially calculated using the same basis, which is applied
uniformly for the entire rate and during the entire term of the policy. The appropriateness of the calculation basis is reviewed
each year in accordance with IFRS 4 and applicable national accounting requirements. Please refer to the section titled
“Adequacy test for liabilities arising from insurance policies“ on page 64. For information on the use of shadow accounting,
please see page 64. Basically, the official mortality tables of each country are used for the life balance sheet unit. If current
mortality expectations differ to the benefit of policyholders from the calculation used for the rate, leading to a corresponding
insufficiency in the mathematical reserves, the reserves are increased appropriately in connection with the adequacy test of
insurance liabilities.
In the life insurance balance sheet unit acquisition costs are taken into account through zillmerisation or another actuarial
method as a reduction of mathematical reserves. The resulting negative mathematical reserves are either set to zero in
accordance with national requirements or reported in the mathematical reserve item in the consolidated financial statements.
The following average discount rates are used to calculate mathematical reserves:
As of 31 December 2020: 1.85%
As of 31 December 2019: 1.96%
In Austria, the average discount rate for life insurance was 1.71% during the reporting period (1.79%).
In addition, the share of unrealised gains and losses from available-for-sale financial instruments serving as security for
contractual obligations is shown in the mathematical reserve as part of the shadow accounting performed according to
IFRS 4. Further information is provided in the section titled “Classification of insurance policies“ beginning on page 63.
In the health insurance balance sheet unit, mathematical reserves are also calculated according to the prospective method
as the difference between the actuarial present value of future policy payments minus the present value of future premiums.
The loss frequencies used to calculate the mathematical reserve derive primarily from analyses conducted on the Group’s
own insurance portfolio. As a rule, the mortality tables used correspond to published mortality tables. The following discount
rates are used for the great majority of transactions when calculating mathematical reserves:
As of 31 December 2020: 2.39%
As of 31 December 2019: 2.41%
Provision for outstanding claims
National insurance law and national regulations (in Austria, the Austrian Insurance Supervision Act (VAG)) require VIG
Insurance Group companies to form provisions for outstanding claims. The provisions are calculated for payment obligations
arising from claims, which have occurred up to the balance sheet date but whose basis or size has not yet been established,
as well as all related claims settlement expenses expected to be incurred after the balance sheet date, and, as a rule, are
formed at the individual policy level. These policy-level provisions are marked up by a flat-rate allowance for unexpected
additional losses. Except for the provisions for pension obligations, no discounting is performed. Insurance losses that have
occurred up to the balance sheet date but were not known at the time that the balance sheet was prepared (“IBNR”), and
losses that have occurred but have not been reported in the correct amount (“IBNER”), are to be included in the provision
(incurred but not reported claims provisions and provisions for as yet unidentified large losses). Separate provisions for claims
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Annual Financial Report 2020
settlement expenses are formed for internally incurred expenses attributable to claims settlement under the allocation
according to origin principle. Collectable recourse claims are deducted from the provision. Where necessary, actuarial
estimation methods are used to calculate the provisions. The methods are applied consistently, with both the methods and
calculation parameters tested continuously for adequacy and adjusted if necessary. The provisions are affected by eco-
nomic factors (e.g. inflation rate) and by legal and regulatory developments, which may be subject to change over time.
Provision for profit-unrelated premium refunds
The provisions for profit-unrelated premium refunds relate, in particular, to the property and casualty and health balance
sheet units, and pertain to premium refunds in certain insurance classes that are contractually guaranteed to policyholders
in the event that there are no claims or a low level of claims. These provisions are formed at the individual policy level. Since
the provisions are predominantly short-term provisions, no discounting has been performed.
Provision for profit-related premium refunds
Profit shares that were dedicated to policyholders in local business plans, but have not been allocated or committed to
individual policyholders as of the balance sheet date, are shown in the provision for profit-related premium refunds
(“discretionary net income participation”). In addition, both the portion realised through profit and loss and the portion
realised directly in equity that results from measurement differences between IFRS and local measurement requirements
(“deferred profit participation”) are reported in this item. Please see the section titled “Classification of insurance
policies“ starting on page 63.
Other underwriting provisions
The other underwriting provisions item primarily includes provisions for cancellations. Cancellation provisions are formed for
the cancellation of premiums that have been written but not yet paid by the policyholder, and therefore represent a liabilities-
side allowance for receivables from policyholders. These provisions are formed based on the application of certain per-
centage rates to overdue premium receivables.
UNDERWRITING PROVISIONS FOR UNIT-LINKED AND INDEX-LINKED LIFE INSURANCE (I)
Underwriting provisions for unit-linked and index-linked life insurance represent obligations to policyholders that are linked to
the performance and income of the corresponding financial instruments. The measurement of these provisions corresponds
to the measurement of the financial instruments for unit-linked and index-linked life insurance, and is based on the fair value
of the investment unit or index serving as a reference.
NON-UNDERWRITING PROVISIONS (J)
Provisions for pensions and similar obligations
PENSION OBLIGATIONS
Pension obligations are based on individual contractual obligations and collective agreements. The obligations are defined
benefit obligations. The plans are based on average salary and/or the number of years of service with the company.
These obligations are accounted for in accordance with IAS 19. The present value of the defined benefit obligation (DBO)
is calculated. Calculation of the DBO is performed using the projected unit credit method. In this method future payments
calculated based on realistic assumptions are accrued linearly over the period in which the beneficiary acquires these
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entitlements. The necessary provision amount is calculated for the relevant balance sheet date using actuarial reports that
have been provided for 31 December 2019 and 31 December 2020.
The calculations are based on the following assumptions:
Pension assumptions 31.12.2020
31.12.2019
Interest rate 0.75%
0.75%
Pension increases 2.00%
2.00%
Salary increases 2.00%
2.00%
Employee turnover rate (age-dependent) 0%–4%
0%–4%
Retirement age, women (transitional arrangement) 62+
62+
Retirement age, men (transitional arrangement) 62+
62+
Life expectancy (for employees, in accordance with) (AVÖ 2018-P)
(AVÖ 2018-P)
The weighted average length of the DBO for pensions was 16.36 years in financial year 2020 (16.47 years). A portion of
the direct pension obligations are administered as an occupational group insurance plan following conclusion of an
insurance contract in accordance with § 93–98 VAG.
(SUBORDINATED) LIABILITIES (K)
As a rule, liabilities are measured at amortised cost. This also applies to liabilities arising from financial insurance policies. The
fair value of financial liabilities is shown in 22. Financial instruments and fair value measurement hierarchy starting on page 141.
NET EARNED PREMIUMS (L)
As a rule, unearned premiums (provision for unearned premiums) are determined on a pro rata basis over time. No deferral
of unit-linked and index-linked life insurance premiums is performed, since the full amount of the premiums written in the
reporting period is included in the calculation of the underwriting provisions for unit-linked and index-linked life insurance.
EXPENSES FOR CLAIMS AND INSURANCE BENEFITS (M)
All payments to policyholders arising from loss events, claims settlement expenses directly related to loss events, and
internal costs attributable to claims settlement under the allocation according to origin principle, are shown as expenses for
claims and insurance benefits. Expenses for loss prevention are also reported in this item. Expenses for claims and
insurance benefits are reduced by the income gained from using existing contractual and statutory avenues of recourse
(this applies in particular to property and casualty insurance). Changes in the underwriting provisions are also reported in
expenses for claims and insurance benefits.
ACQUISITION AND ADMINISTRATIVE EXPENSES (N)
The acquisition and administrative expenses item is broken down into acquisition expenses, administrative expenses less
reinsurance commissions and profit commissions for reinsurance cessions. It therefore includes VIG Insurance Group
personnel and materials expenses allocated according to the origin principle.
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Annual Financial Report 2020
SCOPE AND METHODS OF CONSOLIDATION
The consolidated financial statements include a total of 78 Austrian and 87 foreign companies.
Full consolidation of a subsidiary begins when control is gained and ends when control is lost. 64 domestic companies and
69 foreign companies are included in the consolidated financial statements using this consolidation method.
Associated companies are companies over which the VIG Holding has directly or indirectly a significant influence but does
not exercise control. These companies are accounted for at equity. These consolidated financial statements include 14
Austrian and 18 foreign companies accounted for at equity. 115 companies that have no material effect on the net assets,
financial position and results of operations when considered individually or in aggregate have essentially been measured at
fair value.
The materiality or immateriality of subsidiaries, associated companies and joint arrangements for the consolidated financial
statements is checked using a variety of thresholds defined at the VIG Holding level. Qualitative assessment criteria are also
used. Profit before taxes or total assets, for example, could be checked for this purpose. If a company does not satisfy any
size criteria, a second step is performed to check whether the companies that are not included are material when taken as
a whole. If this is not the case, these companies are not included in the scope of consolidation.
Fully controlled investment funds (“special funds”) were fully consolidated in accordance with the requirements of IFRS 10.
These consolidated institutional funds are not separate corporate entities and therefore not structured entities as defined in
IFRS 12. They are investment funds that have not been designed for public capital markets.
Due to a lack of control, mutual funds are not consolidated, even if a majority of shares are held. The ability of subsidiaries
to transfer funds (in the form of dividends) to parent companies can be restricted by corporate law and regulations.
BUSINESS COMBINATIONS (IFRS 3)
Business combinations are recognised using the purchase method. Goodwill is recognised as the value of the consideration
transferred and all non-controlling interests in the acquired company less the identifiable assets acquired and liabilities
assumed. In any business combination, present non-controlling interests that entitle holders to a proportionate share of the
entity’s net assets in the event of a liquidation can be measured either at fair value or as part of the identifiable net assets.
Unless another IFRS provides a different measurement method, all other components of non-controlling interests are
measured at the corresponding share of the identifiable net assets. If the consideration is less than the net assets of the
acquired subsidiary measured at fair value, the difference is checked again and recognised directly in the income statement.
As a rule, the fair values calculated in accordance with IFRS 13 of all assets (incl. goodwill and other intangible assets) and
liabilities are allocated to the country to which the purchased company is assigned.
Deferred tax assets acquired during a business combination and arising under IAS 12.66 et seqq. on the acquisition date
are tested for impairment in accordance with IAS 12.37.
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VIG Insurance Group considers the reported goodwill to reflect the value of the ability to make use of the insurance-specific
expertise of the employees of the acquired companies. When a market is entered, it represents the ability to offer insurance
products in a country and take advantage of the opportunities that exist there. In countries where VIG Insurance Group is
already represented by one or more companies, the goodwill also represents the possibility of making use of potential
synergies.
All company acquisitions were performed with cash and cash equivalents. A list of companies that are fully consolidated
and included at equity is provided on page 150 in Note 26. Affiliated companies and participations.
CHANGES IN THE SCOPE OF CONSOLIDATION
During the reporting period from 1 January 2020 to 31 December 2020, the Group acquired control of the following
subsidiaries and included the following companies in the consolidated financial statements:
Expansion of the scope of consolidation
*
Acquisition/formation
Interest
First-time
consolidation
Method
Date
in %
Date
Bohemia Servis Finance a.s., Žatec 2020
100.00
1.11.2020
consolidated at equity
Bohemika HYPO s.r.o., Žatec 2020
100.00
1.11.2020
consolidated at equity
DV Immoholding GmbH, Vienna 2019
100.00
1.1.2020
full consolidation
DVIB alpha GmbH, Vienna 2019
100.00
1.1.2020
full consolidation
Global Assistance Baltic SIA, Riga 2020
100.00
8.12.2020
full consolidation
Global Partner ČR, a.s., Prague 2020
65.00
22.12.2020
consolidated at equity
SIA “Alauksta 13/15”, Riga 2020
100.00
23.11.2020
full consolidation
SIA “Artilērijas 35”, Riga 2020
100.00
23.11.2020
full consolidation
SIA “Ģertrūdes 121”, Riga 2020
100.00
23.11.2020
full consolidation
SMARDAN 5 DEVELOPMENT S.R.L., Bucharest 2020
100.00
9.12.2020
full consolidation
VIG Home, s.r.o., Bratislava 2020
100.00
1.10.2020
full consolidation
WSVA Liegenschaftbesitz GmbH, Vienna 2019
100.00
1.1.2020
full consolidation
WSVB Liegenschaftbesitz GmbH, Vienna 2019
100.00
1.1.2020
full consolidation
WSVC Liegenschaftbesitz GmbH, Vienna 2020
100.00
19.6.2020
full consolidation
*Unless indicated otherwise, no goodwill exists.
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Annual Financial Report 2020
Companies acquired during the reporting period, but not yet consolidated (no subject to closing at 31 December 2020) Interest acquired
in %
AEGON Hungary Holding B.V. 100.00
AEGON Hungary Holding II B.V. 100.00
AEGON Poland/Romania Holding B.V. 100.00
AEGON Turkey Holding B.V. 100.00
AEGON Magyarország Általános Biztosító Zrt. 100.00
Help24 Assistance Kft. 100.00
Aegon Magyarország Pénztárszolgáltató Zrt. 100.00
AEGON Magyarország Közvetítő és Marketing Zrt. 100.00
AEGON Magyarország Befektetési Alapkezelő Zrt. 100.00
Aegon Towarzystwo Ubezpieczeń na Życie S.A. 100.00
Aegon Powszechne Towarzystwo Emerytalne S.A. 100.00
Aegon Otwarty Fundusz Emerytalny 100.00
Aegon Services sp. z o.o. 100.00
Profitowi.pl S.A. 100.00
AEGON Ubezpieczenia Majątkowe (Polish Branch of Hungarian Composite Insurance) 100.00
Aegon Pensii – Societate de Administrare a Fondurilor de Pensii Private S.A. 100.00
AEGON Towarzystwo Ubezpieczeń na Życie S.A. Varsovia Sucursala Floresti (Romanian Branch of Polish Life Insurance) 100.00
Aegon Emeklilik ve Hayat A.S. 100.00
On 29 November 2020, VIG reached agreement with Aegon N.V. to acquire its insurance business in Hungary, Poland,
Romania and Turkey. As a result, Aegon’s insurance companies in the non-life and life sectors, pension funds and asset
management and service companies will be acquired in these countries. The purchase price is EUR 830 million. The
transaction is subject to the approvals required under supervisory and competition law. The closing is expected to take
place in the 2
nd
half of 2021. Due to the lack of closing for the transaction and lack of control over the companies, they had
not yet been added to the scope of consolidation as of the balance sheet date.
Founded companies Interest
Established
in %
Date
Global Assistance Baltic SIA, Riga 100.00
8.12.2020
Global Partner ČR, a.s., Prague 65.00
22.12.2020
SIA “Alauksta 13/15”, Riga 100.00
23.11.2020
SIA “Artilērijas 35”, Riga 100.00
23.11.2020
SIA “Ģertrūdes 121”, Riga 100.00
23.11.2020
SMARDAN 5 DEVELOPMENT S.R.L., Bucharest 100.00
9.12.2020
WSVC Liegenschaftbesitz GmbH, Vienna 100.00
19.6.2020
Change in significant minority interests Change
Change of interest
Change of non-
controlling interests
Date
in %
in EUR '000
Asirom 30.9.2020
0.02
-19
BTA Baltic 31.12.2020
9.17
-9,459
Kniazha Life 31.12.2020
2.01
-43
Komunálna 30.6.2020
0.92
-604
Omniasig 31.3.2020
0.04
-33
SIA "Urban Space", Riga 31.12.2020
9.17
-42
VIG Fund 31.12.2020
0.10
-177
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Effect of changes in the scope of consolidation
Balance sheet Additions
in EUR '000
Investments 32,240
Shares in at equity consolidated companies 141
Receivables (incl. tax receivables and advance payments out of income tax) 91
Cash and cash equivalents 31,049
Liabilities (incl. tax liabilities out of income tax) 7,655
The figures shown in the table above reflect the actual dates of first consolidation, as indicated in the section titled “Changes
in the scope of consolidation“ on page 69.
Contribution to result before taxes in reporting period Additions
in EUR '000
Financial result excl. result from shares in at equity consolidated companies 558
Other expenses -4
Result before taxes 554
Inclusion of the first-time consolidated companies retroactively to 1 January 2020 would not cause any material changes
in balance sheet items. Inclusion of the first-time consolidated companies retroactively to 1 January 2020 would reduce the
Group result before taxes and non-controlling interests by 0.01% (not including any consolidation effects).
Including the new companies in the scope of consolidation did not change the number of employees.
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Annual Financial Report 2020
SEGMENT REPORTING
DETERMINATION OF REPORTABLE SEGMENTS
The segments were determined in accordance with IFRS 8 Operating segments based on internal reporting to the principal
decision-maker. The individual markets, in which VIG Insurance Group operates, were identified as the operating segments.
The VIG Holding Managing Board, as principal decision-maker, regularly evaluates earning power based on these segments
and decides on the allocation of resources to them. The focus on countries is also reflected in the country responsibilities
of the members of the VIG Holding Managing Board.
The countries Estonia, Latvia and Lithuania are combined in the Baltic States operating segment, and Albania and Kosovo
are combined in the Albania incl. Kosovo operating segment when reporting to the Managing Board. The countries of
Turkey and Georgia are also combined into one reporting segment.
The reportable segments were determined using the aggregation criteria in IFRS 8.12 and IFRS 8.14 and the quantitative
thresholds defined in IFRS 8.13.
The following were identified as reportable segments:
• Austria (incl. the Wiener Städtische branches in Slovenia and Italy),
• Czech Republic,
• Slovakia,
• Poland,
• Romania,
• Baltic states,
• Hungary,
• Bulgaria,
• Turkey/Georgia,
• Remaining CEE,
• Other Markets and
• Central Functions (incl. the VIG Holding branches in Sweden, Norway and Denmark and VIG Re branches in Germany
and France).
The Remaining CEE segment includes the countries of Albania incl. Kosovo (a branch of an Albanian company is located
in Kosovo), Bosnia-Herzegovina, Croatia, Moldova, North Macedonia, Serbia and Ukraine. The segment was aggregated
in accordance with the aggregation criteria in IFRS 8.14 and was not reported in an “all other segments” in accordance
with IFRS 8.16 in spite of falling below the thresholds. This segment is presented separately because of VIG Insurance
Group’s focus on the CEE region.
The Managing Board believes it is important to provide information by separately publishing financial information for Romania,
the Baltic states, Hungary, Bulgaria and Turkey/Georgia in the segment reports, even though they fall below the thresholds.
VIG Insurance Group’s focus on the CEE region and the strong growth recorded in individual countries led to this decision.
The Other Markets reportable segment corresponds to the “All other segments” category in IFRS 8.16, and includes
Germany and Lichtenstein.
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Companies with management and coordination functions for VIG Insurance Group that cross regional boundaries are
included in the “Central Functions” segment.
BASIS OF THE REVENUES OF THE REPORTABLE SEGMENTS
Reportable segments (excl. Central Functions)
The scope of business operations includes private and corporate customer insurance business. The range of products
includes, among other things, motor third party liability and own damage, accident, third party liability, fire and natural
hazards, and travel insurance.
A large number of life and health insurance products are offered for individuals and groups. These include, for example,
supplementary health insurance, nursing care insurance, endowment insurance, term life insurance and investment-
oriented products. In accordance with the cornerstones of VIG Insurance Group, products are sold through all distribution
channels in all markets. This means that insurance products are distributed, among others, by sales employees, banks,
brokers and agents.
Central Functions
The segment includes VIG Holding, VIG Re, Wiener Re, VIG Fund, corporate IT service providers and intermediate holding
companies.
VIG Holding primarily focuses on managerial tasks for VIG Insurance Group. It also operates as a reinsurer within
VIG Insurance Group and in the international corporate business. The Group’s own reinsurance company, VIG Re, is
a successful provider of reinsurance products for both insurance companies of VIG Insurance Group and for external
partners.
Information on major customers
VIG Insurance Group does not depend to a great extent on one single customer, as defined in IFRS 8.34. The 10 largest
customer groups are responsible for 2.2% of the premiums written by the Group. Corporate customers that are under
common control according to the information available to VIG Insurance Group are combined into customer groups.
GENERAL INFORMATION ON SEGMENT REPORTING
Like transactions with third parties, transfer prices between reportable segments are determined using market prices.
Intragroup transactions between segments are eliminated in the consolidation column. The only exceptions are dividends
and intercompany profits, which are eliminated in each segment.
PERFORMANCE MEASUREMENT FOR REPORTABLE SEGMENTS
A variety of performance indicators are used to determine the financial performance of the reportable segments. The IFRS
contribution to earnings is used as an indicator in all cases. In the interests of comparability, the income statement by
segments is appropriately reconciled with the consolidated income statement and only the main items are presented. The
same applies to the balance statement by segments and consolidated balance sheet.
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Annual Financial Report 2020
CONSOLIDATED BALANCE SHEET BY SEGMENT
Assets Austria Czech Republic Slovakia
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Intangible assets 497,293
455,579
487,109
505,065
126,749
123,905
Right-of-Use Assets 75,523
80,466
57,583
63,343
6,837
7,372
Investments 23,655,203
23,572,424
2,937,473
3,088,224
1,603,118
1,455,389
Financial investments for unit-linked and index-linked life insurance 4,918,309
5,484,384
418,286
389,107
180,756
193,217
Reinsurers' share in underwriting provisions 487,996
400,137
149,599
134,935
40,573
31,904
Receivables 559,737
559,902
166,645
169,866
47,231
62,780
Tax receivables and advance payments out of income tax 18,024
18,451
37,735
9,548
135
103
Deferred tax assets 4,871
6,014
85,389
2,081
6,065
7,156
Other assets 102,357
111,248
160,467
158,364
9,150
11,149
Cash and cash equivalents 451,307
656,000
144,332
125,717
87,218
78,331
Total 30,770,620
31,344,605
4,644,618
4,646,250
2,107,832
1,971,306
Assets Poland Romania Baltic states
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Intangible assets 158,164
187,378
20,845
23,662
135,652
145,113
Right-of-Use Assets 5,466
10,230
3,642
4,074
8,872
11,399
Investments 1,431,462
1,299,029
754,751
710,867
697,135
639,017
Financial investments for unit-linked and index-linked life insurance 680,712
726,043
109,020
137,358
101,210
80,617
Reinsurers' share in underwriting provisions 121,345
180,855
47,214
42,187
44,839
50,972
Receivables 212,916
240,505
192,185
178,100
92,650
85,109
Tax receivables and advance payments out of income tax 4,291
493
0
0
549
430
Deferred tax assets 0
920
4,992
10,304
32
544
Other assets 7,710
10,302
4,625
3,683
18,910
16,116
Cash and cash equivalents 24,680
24,949
21,379
14,889
73,230
50,291
Total 2,646,746
2,680,704
1,158,653
1,125,124
1,173,079
1,079,608
Assets Hungary Bulgaria Turkey/Georgia
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Intangible assets 27,062
26,013
126,405
185,830
2,533
16,707
Right-of-Use Assets 2,820
4,023
2,555
2,801
605
741
Investments 162,639
172,437
248,030
208,984
96,334
102,883
Financial investments for unit-linked and index-linked life insurance 518,110
481,705
14,950
11,269
0
0
Reinsurers' share in underwriting provisions 14,757
13,061
22,041
22,459
91,236
86,928
Receivables 31,351
34,566
45,269
45,505
86,031
77,786
Tax receivables and advance payments out of income tax 36
27
0
20
4,517
2,266
Deferred tax assets 1,025
1,730
232
1,018
804
2,053
Other assets 11,031
11,754
6,132
6,049
1,135
1,511
Cash and cash equivalents 1,575
6,768
41,808
44,863
24,780
23,226
Total 770,406
752,084
507,422
528,798
307,975
314,101
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Liabilities and shareholdersʾ equity Austria Czech Republic Slovakia
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Subordinated liabilities 342,950
342,950
20,959
21,647
0
0
Underwriting provisions 22,446,551
22,552,573
2,792,390
2,828,728
1,281,092
1,230,371
Underwriting provisions for unit-linked and index-linked life insurance 4,744,433
5,194,598
249,729
202,422
191,127
202,686
Non-underwriting provisions 649,509
683,171
10,038
7,966
3,288
3,148
Liabilities 679,644
693,724
414,588
429,340
102,332
115,885
Tax liabilities out of income tax 255,222
205,976
20,479
32,908
2,012
127
Deferred tax liabilities 188,113
187,189
5,700
9,231
25,605
18,243
Other liabilities 73,880
85,413
3,300
2,469
3,257
4,283
Subtotal 29,380,302
29,945,594
3,517,183
3,534,711
1,608,713
1,574,743
Liabilities and shareholdersʾ equity Poland Romania Baltic states
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Subordinated liabilities 0
0
0
0
0
0
Underwriting provisions 1,275,020
1,244,133
660,413
628,367
666,167
616,364
Underwriting provisions for unit-linked and index-linked life insurance 671,126
697,588
107,690
136,259
101,215
80,617
Non-underwriting provisions 11,996
6,683
42,631
40,847
2,677
1,212
Liabilities 154,361
194,663
94,931
83,160
91,774
77,136
Tax liabilities out of income tax 1,715
323
1,415
384
836
331
Deferred tax liabilities 22,458
23,658
911
0
2,202
2,924
Other liabilities 16,299
15,911
8,542
8,822
4,759
1,693
Subtotal 2,152,975
2,182,959
916,533
897,839
869,630
780,277
Liabilities and shareholdersʾ equity Hungary Bulgaria Turkey/Georgia
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Subordinated liabilities 0
0
0
0
0
0
Underwriting provisions 174,913
171,265
250,467
229,538
232,695
224,138
Underwriting provisions for unit-linked and index-linked life insurance 515,028
477,765
14,254
10,761
0
0
Non-underwriting provisions 772
1,370
4,804
6,734
11,419
11,305
Liabilities 39,500
46,821
31,873
28,935
44,044
39,618
Tax liabilities out of income tax 333
304
211
356
3,467
2,273
Deferred tax liabilities 275
408
937
765
188
6
Other liabilities 3,577
2,313
21
198
566
771
Subtotal 734,398
700,246
302,567
277,287
292,379
278,111
76
Annual Financial Report 2020
Assets Remaining CEE Other Markets Central Functions Total
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Intangible assets 42,740
89,630
1,963
1,583
106,562
179,114
1,733,077
1,939,579
Right-of-Use Assets 9,855
9,505
44
47
11,552
3,655
185,354
197,656
Investments 1,093,226
1,067,904
726,665
694,777
1,495,150
1,443,805
34,901,186
34,455,740
Financial investments for unit-linked
and index-linked life insurance 33,708
56,452
986,176
1,055,178
6,802
4,997
7,968,039
8,620,327
Reinsurers' share in underwriting
provisions
16,503
18,677
4,953
5,391
355,436
295,928
1,396,492
1,283,434
Receivables 87,696
90,506
15,128
15,805
162,320
156,919
1,699,159
1,717,349
Tax receivables and advance payments
out of income tax 400
226
25
385
209,329
194,896
275,041
226,845
Deferred tax assets 2,176
2,034
246
977
30,896
33,894
136,728
68,725
Other assets 14,514
15,910
5,844
5,238
45,970
40,587
387,845
391,911
Cash and cash equivalents 30,254
26,301
63,990
50,208
780,594
341,815
1,745,147
1,443,358
Total 1,331,072
1,377,145
1,805,034
1,829,589
3,204,611
2,695,610
50,428,068
50,344,924
Liabilities and shareholdersʾ equity Remaining CEE Other Markets Central Functions Total
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Subordinated liabilities 0
0
0
0
1,100,000
1,100,000
1,463,909
1,464,597
Underwriting provisions 1,095,516
969,551
701,821
663,264
653,010
527,784
32,230,055
31,886,076
Underwriting provisions for unit-linked
and index-linked life insurance 33,707
56,452
982,106
1,051,854
6,801
4,997
7,617,216
8,115,999
Non-underwriting provisions 7,420
7,351
13,060
12,686
119,195
149,086
876,809
931,559
Liabilities 41,804
47,712
34,675
33,806
524,780
303,772
2,254,306
2,094,572
Tax liabilities out of income tax 931
1,132
414
636
3,963
6,139
290,998
250,889
Deferred tax liabilities 2,563
5,361
1,095
377
17,823
14,040
267,870
262,202
Other liabilities 18,217
19,383
1
2
8,720
7,079
141,139
148,337
Subtotal 1,200,158
1,106,942
1,733,172
1,762,625
2,434,292
2,112,897
45,142,302
45,154,231
Shareholders' equity 5,285,766
5,190,693
Total 50,428,068
50,344,924
Intrasegment transactions have been eliminated from the amounts indicated for each segment. As a result, the segment assets
and liabilities cannot be netted to determine the segment shareholders’ equity.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
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CONSOLIDATED INCOME STATEMENT BY SEGMENT
Austria Czech Republic Slovakia Poland
2020
2019
2020
2019
2020
2019
2020
2019
in EUR '000
Premiums written – gross 4,030,707
3,943,276
1,732,393
1,745,827
729,520
798,860
1,196,236
1,131,979
Net earned premiums – retention 3,275,613
3,226,195
1,295,519
1,312,764
597,269
671,617
926,588
886,524
Financial result excl. result from
shares in at equity consolidated
companies 536,365
738,945
64,848
70,763
36,413
49,550
36,136
30,759
Income from investments 841,131
982,570
128,835
113,005
45,684
53,595
50,040
47,083
Expenses for investments and
interest expenses -304,766
-243,625
-63,987
-42,242
-9,271
-4,045
-13,904
-16,324
Result from shares in at equity
consolidated companies -30,960
20,393
832
1,419
0
0
0
0
Other income 17,982
37,047
28,835
44,906
5,171
23,478
7,220
25,044
Expenses for claims and insurance
benefits – retention -2,958,391
-3,116,818
-824,507
-789,706
-433,926
-530,468
-670,009
-623,610
Acquisition and administrative
expenses -636,020
-654,843
-343,718
-361,077
-124,229
-139,861
-224,283
-216,726
Other expenses -25,862
-43,592
-29,737
-106,619
-29,304
-25,432
-53,100
-32,788
Result before taxes 178,727
207,327
192,072
172,450
51,394
48,884
22,552
69,203
Taxes -19,040
-23,354
-39,896
-33,538
-15,184
-13,728
-11,506
-12,352
Result of the period 159,687
183,973
152,176
138,912
36,210
35,156
11,046
56,851
Romania Baltic states Hungary Bulgaria
2020
2019
2020
2019
2020
2019
2020
2019
in EUR '000
Premiums written – gross 493,804
468,237
492,915
500,284
287,750
289,520
199,640
223,905
Net earned premiums – retention 375,929
346,889
393,316
385,234
223,551
219,627
145,333
137,683
Financial result excl. result from
shares in at equity consolidated
companies 18,986
13,497
9,432
11,373
3,349
4,865
12,261
11,674
Income from investments 27,057
23,646
13,087
13,847
4,749
7,235
28,863
26,426
Expenses for investments and
interest expenses
-8,071
-10,149
-3,655
-2,474
-1,400
-2,370
-16,602
-14,752
Result from shares in at equity
consolidated companies 0
0
0
0
0
0
0
0
Other income 9,639
13,475
5,169
2,914
11,074
9,178
5,003
1,107
Expenses for claims and insurance
benefits – retention
-249,660
-235,789
-278,906
-268,088
-167,167
-164,561
-77,940
-78,531
Acquisition and administrative
expenses -116,363
-106,784
-100,372
-102,968
-39,176
-42,034
-53,553
-50,332
Other expenses -24,296
-133,118
-19,141
-20,810
-23,187
-18,410
-67,826
-5,838
Result before taxes 14,235
-101,830
9,498
7,655
8,444
8,665
-36,722
15,763
Taxes -5,780
-7,334
-2,084
-1,305
-2,740
-2,460
-2,951
-2,216
Result of the period 8,455
-109,164
7,414
6,350
5,704
6,205
-39,673
13,547
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Annual Financial Report 2020
Turkey/Georgia Remaining CEE Other Markets
2020
2019
2020
2019
2020
2019
in EUR '000
Premiums written – gross 251,652
234,902
439,610
446,910
279,997
380,402
Net earned premiums – retention 113,001
112,366
318,551
328,817
230,878
332,312
Financial result excl. result from shares
in at equity consolidated companies 8,368
7,873
47,482
37,591
17,202
16,601
Income from investments 10,565
15,757
44,830
46,354
20,086
21,641
Expenses for investments and interest
expenses
-2,197
-7,884
2,652
-8,763
-2,884
-5,040
Result from shares in at equity
consolidated companies 0
0
0
0
0
0
Other income 11,185
6,084
7,095
8,023
3,821
3,876
Expenses for claims and insurance
benefits – retention
-77,338
-80,997
-222,985
-222,262
-174,277
-273,295
Acquisition and administrative expenses -30,084
-31,199
-102,946
-109,641
-21,954
-29,280
Other expenses -26,015
-7,466
-62,847
-15,462
-28,942
-27,653
Result before taxes -883
6,661
-15,650
27,066
26,728
22,561
Taxes -3,110
-1,532
-5,405
-6,021
-8,200
-8,076
Result of the period -3,993
5,129
-21,055
21,045
18,528
14,485
Central Functions Consolidation Total
2020
2019
2020
2019
2020
2019
in EUR '000
Premiums written – gross 1,736,522
1,623,491
-1,442,292
-1,388,186
10,428,454
10,399,407
Net earned premiums – retention 1,425,685
1,351,456
15,352
6,445
9,336,585
9,317,929
Financial result excl. result from shares
in at equity consolidated companies -162,897
-2,808
-3,154
-3,917
624,791
986,766
Income from investments 113,470
316,492
-64,608
-74,450
1,263,789
1,593,201
Expenses for investments and interest
expenses
-276,367
-319,300
61,454
70,533
-638,998
-606,435
Result from shares in at equity
consolidated companies 1,618
2,262
0
0
-28,510
24,074
Other income 34,880
19,685
-1,413
-1,614
145,661
193,203
Expenses for claims and insurance
benefits – retention
-870,404
-878,363
-25,059
-256
-7,030,569
-7,262,744
Acquisition and administrative expenses -523,947
-443,077
-11,834
-5,404
-2,328,479
-2,293,226
Other expenses -12,502
-12,694
29,142
5,449
-373,617
-444,433
Result before taxes -107,567
36,461
3,034
703
345,862
521,569
Taxes 12,702
3,435
0
0
-103,194
-108,481
Result of the period -94,865
39,896
3,034
703
242,668
413,088
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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
FINANCIAL INSTRUMENTS (INCL. PROPERTY AND OTHER INVESTMENTS)
The Group invests in fixed-income securities (bonds, loans/credits), shares, property, participations and other investments,
taking into account the overall risk position and the investment strategy provided for this purpose.
The investment strategy is laid down in the investment guidelines for each of the insurance companies. Compliance is
continuously monitored by the Asset Management and Asset Risk Management departments and by the Internal Audit
department on a sample basis. Investment guidelines are laid down centrally and must be followed by all Group companies.
When determining exposure volumes and limits as part of establishing the strategic orientation of investments, the risk
inherent in the specified categories and market risks are of fundamental importance.
The investment strategy principles may be summarised as follows:
• VIG Insurance Group practices a conservative investment policy designed for the long term.
• VIG Insurance Group focuses on its asset mix as a way to ensure that cash flows match its long-term liability profile and
to create sustainable increases in value through the use of correlation and diversification effects of the individual asset
classes.
• Investment management depends on the asset class in question or on the objective within asset classes and is
performed internally or by an outside manager.
• The currency profile of the investments should match as closely as possible the obligations to policyholders and other
liabilities (currency matching).
• Risk management for securities is aimed at providing a transparent view of the risk exposure arising from price, interest-
rate and currency fluctuations as they affect profitability and the value of investments, and at limiting these risks. Risks
are limited by a limit system at position level and by a value-at-risk limit system for risk exposure at the portfolio level.
• Market developments are monitored continuously and the structure of the portfolio is actively managed, if necessary.
The investment portfolio (with the look-through approach applied to consolidated institutional funds) includes holdings of
around 72.66% (73.05%) in bonds and around 7.01% (6.73%) in loans. The share in equities is around 4.25% (4.46%), in
property around 7.12% (6.97%), in participations around 1.50% (1.50%) and in other around 7.46% (7.29%), in all cases
based on the book value of the total investment portfolio.
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Annual Financial Report 2020
Composition of investments (book values) 31.12.2020
31.12.2019
in EUR '000
Property 2,507,413
2,414,258
Shares in at equity consolidated companies 291,561
321,276
Loans 2,566,884
2,416,108
Loans 1,647,782
1,461,846
Reclassified loans 136,308
139,584
Bonds classified as loans 782,794
814,678
Other financial assets 28,685,004
28,244,801
Financial assets held to maturity - bonds 2,163,435
2,195,001
Financial assets reclassified as held to maturity - bonds 293,003
568,700
Financial assets available for sale 25,983,431
25,148,103
Bonds 22,895,705
22,300,441
Shares and other participations
1
672,285
666,017
Investment funds 2,415,441
2,181,645
Financial assets recognised at fair value through profit and loss
2
245,135
332,997
Bonds 130,713
203,477
Shares and other non-fixed-interest securities 11,046
21,955
Investment funds 70,437
72,768
Derivatives 32,939
34,797
Other investments 850,324
1,059,297
Bank deposits 766,408
973,247
Deposits on assumed reinsurance business 83,900
86,032
Other 16
18
Total 34,901,186
34,455,740
1
Includes shares in non-consolidated subsidiaries and other participations amounting to EUR 257,779,000 (EUR 217,494,000)
2
Including held for trading
Property
The portfolio had a book value of EUR 2,507.4 million as of 31 December 2020 (fair value: EUR 4,190.9 million) and a book
value of EUR 2,414.3 million as of 31 December 2019 (fair value: EUR 3,863.1 million).
The portfolio of directly held assets and assets held in the form of participations is used primarily to create highly inflation-
resistant long-term positions for the insurance business, and to create hidden reserves. The property portfolio represents
7.12% (6.97%) of the total investment portfolio.
The following table shows the investments as of 31 December 2020 and 31 December 2019, broken down by type of use
for the Austria and Central Functions segments and the totals for all other segments.
Use of property in % of the property portfolio 31.12.2020
31.12.2019
Austria 65.98
64.91
Owner-occupied 7.26
7.76
Investment property 58.72
57.15
Central Functions 19.59
20.21
Owner-occupied 1.36
0.96
Investment property 18.23
19.25
Other segments 14.43
14.88
Owner-occupied 10.43
11.52
Investment property 4.00
3.36
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Shares in at equity consolidated companies
Shares in at equity consolidated companies had a book value of EUR 291.6 million as of 31 December 2020 and a book
value of EUR 321.3 million as of 31 December 2019. Shares in at equity consolidated companies therefore represented
0.84% (0.93%) of the book value of the total investment portfolio as of 31 December 2020.
Loans
Loans had a book value of EUR 2,566.9 million as of 31 December 2020 and a book value of EUR 2,416.1 million as of
31 December 2019. Investments in loans are less important in the CEE region. A portfolio analysis and maturity structure
of loans are presented in Note 2.3. Loans and other investments starting on page 109.
Bonds
Bonds represented 72.66% (73.05%) of total investments as of 31 December 2020. VIG Insurance Group manages its
bond portfolio using estimates of changes in interest rates, spreads and credit quality, taking into account limits related to
individual issuers, credit quality, maturities, countries, currencies and issue volume. In the investment model, the bonds
serve primarily to ensure stable earnings over the long term. Derivative products are only used to reduce risks or make
efficient portfolio management easier. Relevant investment guidelines expressly govern the use of derivatives for bond
portfolios managed by third parties such as investment funds.
Shares
As of 31 December 2020, share investments (including those contained in the funds) represented 4.25% (4.46%) of the
book value of the total investment portfolio. In accordance with the investment guidelines for Austria, management is carried
out using a top-down approach, subject to the constraint that diversification be used to minimise the market risk of the
shares. The overall proportion of shares is very small for companies of VIG Insurance Group in the CEE region.
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Annual Financial Report 2020
RISK MANAGEMENT
VIG Insurance Group’s core competence is dealing professionally with risk. The insurance business consists of consciously
assuming diverse risks and managing them profitably. One of the primary responsibilities of risk management is to ensure
that the obligations assumed under insurance policies can be satisfied at all times.
In general, all insurance companies are responsible for managing their own risks. The corporate Risk Management
department of VIG Holding provides guidelines in all major areas for these companies. The requirements set in the invest-
ments and reinsurance areas are particularly strict.
The primary requirement for effective risk management is a risk management system that is consistent throughout the
Group and a risk policy and risk strategy set by management. The objective of such risk management is not complete
avoidance of risk but rather a conscious acceptance of desired risks and the implementation of measures to monitor and
possibly even reduce existing risks based on economic factors. The risk-return ratio is therefore a key measure that must
be optimised in order to guarantee adequate security for the policyholder and the insurer itself while giving due consideration
to the need to create value.
Risk management responsibilities in VIG Holding are bundled together in independent organisational units and by a well-
established risk and control culture, each individual employee contributes to successful management of risk. Transparent,
verifiable decisions and processes within a company are very important aspects of its risk culture.
Risk strategy
The strategic orientation of the Company is based on a business strategy, capital strategy and a comprehensive risk strategy.
The risk strategy specifies appropriate risk management measures for significant risks and is based on the following princi-
ples that are applicable Group-wide:
ACCEPTED RISKS
• A sustainable portion of all risks that have a direct connection to the insurance business that is conducted are accepted
(underwriting risks, market risks).
RISKS THAT ARE NOT ACCEPTED
• Risks from the insurance business are not accepted if they cannot be adequately measured. This includes, in particular,
the areas of third party liability insurance for genetic engineering and atomic energy.
• With respect to investments, risks are not accepted if insufficient know-how is available to measure the risks, e.g.
weather derivatives or forward transactions for foodstuffs, or if they could generate potentially unlimited losses.
RISKS ACCEPTED WITH RESTRICTIONS
• Operational risks must be avoided as far as possible, but have to be accepted to a certain extent as they cannot be
fully excluded, or the costs for avoiding them exceed the expected losses.
• A conservative approach is used for investments.
RISK-MINIMISING MEASURES
• Establish functional risk governance by maintaining and promoting a high level of risk awareness.
• Reinsurance is a key instrument for hedging against large losses (tail risks), particularly in the property and casualty
area.
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• Limit market risk taking into account underwriting obligations.
• Observe and act in accordance with the prudent businessman rule in connection with investments.
Organisation of the risk management system
The risk management system is well integrated into VIG Holding’s organisational structure. The following chart shows the
units that play an important role in the risk management system.
MANAGING BOARD
The Managing Board as a whole is responsible for the risk management system, in particular for the following areas:
• Set up and promote the risk management system
• Define and communicate the risk strategy, including risk tolerances and risk appetite
• Approve corporate risk management guidelines
• Take the risk situation into account in strategic decisions
Both the Enterprise Risk Management and Asset Risk Management units have reported directly to Managing Board Member
Liane Hirner since the beginning of 2020.
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Annual Financial Report 2020
RISK COMMITTEE
The VIG Holding Managing Board established the Risk Committee to ensure regular discussions of current matters relating
to risk management across functional areas within the organisation and an exchange of information on the risk situation
between the members of the committee and the Managing Board. The Risk Committee meetings take place at least
quarterly and are chaired by the Managing Board member responsible for this area. The Risk Committee reports to the
Managing Board after its meetings.
ENTERPRISE RISK MANAGEMENT
The department has been reporting to Managing Board Member Liane Hirner since the beginning of 2020. The head of the
department performs the risk management function required under Solvency II at the Group and solo level.
The main responsibilities of the department include determining the Group’s overall risk profile and calculating solvency. The
department provides a Group-wide risk aggregation solution for this purpose with extensive reporting and partial modelling
approaches for calculating solvency capital. Calculation of the solvency capital requirement during the year, analysis of risk-
bearing capacity using proprietary analysis tools and reviewing the internal control system are other important activities
performed by the department.
The department also assists the Managing Board with updating the corporate risk strategy, improvements to the risk
organisation and further corporate risk management topics.
ASSET-RISK MANAGEMENT
The department has been reporting to Managing Board Member Liane Hirner since the beginning of 2020. The primary
responsibility of the department is to analyse, assess and monitor risks associated with investments, in particular with
respect to the VIG Insurance Group’s solvency result and financial result. For this purpose, the department specifies Group-
wide requirements for risk assessment and implements a central system for investment management and risk monitoring.
The department is also responsible for maintaining an internal rating approach for banks.
ASSET MANAGEMENT
The department has been reporting to Managing Board Member Gerhard Lahner since the beginning of 2020. One of the
main responsibilities of the department is to define a strategic orientation for the investments of each insurance company
and for VIG Insurance Group as a whole, and to specify an investment strategy and investment process aimed at ensuring
that current income is as high as possible, but also as secure as possible, while simultaneously taking advantage of
opportunities to increase the value of investments. Guidelines and limits are used to manage investments. Regular reports
are also provided for investments, limits and income.
ACTUARIAL DEPARTMENT
The department has been reporting to Managing Board Member Gabor Lehel since the beginning of 2020. The head of the
department performs the Actuarial function required by Solvency II. The department is therefore responsible, in particular,
for the duties related to the Actuarial function. The Actuarial department also calculates the embedded value for the life and
health insurance businesses and prepares profitability analyses and company valuations. The department also assists
actuarial collaboration and functional networking.
GROUP REINSURANCE
The department reports to Managing Board member Peter Höfinger. The department coordinates and assists all companies
in VIG Insurance Group and their reinsurance departments with reinsurance matters in the non-life business (property and
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
85
casualty, third party liability and accident insurance) by preparing and applying guidelines. The department also administers
Group-wide reinsurance programmes in the non-life lines of business. The primary objective is to create a safety net to
provide continuous protection for all of the companies in VIG Insurance Group against the negative effects of catastrophes,
individual large losses and negative changes in entire insurance portfolios.
PLANNING AND CONTROLLING
The department is an important part of the integrated risk management approach. It was the responsibility of Managing
Board Member Elisabeth Stadler up to the end of the financial year and has been the responsibility of Managing Board
Member Hartwig Löger since the beginning of 2021. The department coordinates business planning over a 3-year horizon.
The standardised reports include key figure and variance analyses for planning, forecasts and ongoing performance of
VIG Holding and other insurance companies. Regular monthly premium reports, quarterly reports for each company
(aggregated at the country and VIG Insurance Group level) and cost reports are prepared.
GROUP IT
The department has reported to Peter Thirring since the beginning of 2020. The department is responsible for IT manage-
ment at the VIG Insurance Group level (IT strategy, IT governance, IT security, IT Group projects, etc.), for assisting
companies in VIG Insurance Group with large IT projects, and for developing Group-wide guidelines and common standards.
The Austrian business organisation assists Group IT with this by providing outside IT and telephony services.
ASSET LIABILITY MANAGEMENT
The department reports to Gerhard Lahner and was established during the financial year just ended. The observation,
measurement and optimisation of future cash flows on the asset and liabilities sides are the main responsibilities of the
Asset Liability Management unit. It is also responsible for the exchange of knowledge and improvements in the Group in
this area.
INTERNAL AUDIT
The department reports to the Managing Board. Managing Board Chairwoman Elisabeth Stadler is the contact person in
the Managing Board. The Internal Audit department systematically monitors operating and business processes, the internal
control system of all operational business areas, including compliance with legal requirements, and the functionality and
adequacy of risk management. It operates continuously and reports directly to the Managing Board. The head of the
department performs the Internal Audit function required by Solvency II.
Risk management processes
Many risk management processes have been established in the individual departments of the risk management system to
cover the entire risk management cycle from risk identification to risk assessment, risk control and risk monitoring. These
processes are governed by a number of internal guidelines. This ensures that VIG Insurance Group’s risk exposure is
appropriately recorded and taken into account when business decisions are made.
RISK IDENTIFICATION
The risk management process begins with the identification of risks. This is performed using a standardised process that
is supplemented by ad hoc analyses. A comprehensive reporting process ensures that newly identified risks and the effects
of extraordinary events are appropriately included in the risk profile.
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RISK ASSESSMENT
A number of assessment methods are used to assess identified risks. Assessment is primarily based on internal models
and the standard model and is performed annually and during the year. If the standard formula is used for assessment, an
appropriateness check is also performed. The total risk is determined by aggregating the assessed risks, taking into account
diversification effects between the risks. The results of the own risk and solvency assessment, the embedded value for the
life and health insurance businesses, findings from the S&P capital model and value-at-risk calculations for the investments
area are also taken into account in the risk assessment.
RISK CONTROL
The risk strategy, planning, reinsurance programme, risk budgets and risk-bearing capacity are the most important elements
of risk control. The Managing Board reviews the risk strategy each year and makes any modifications needed. The
Enterprise Risk Management department assists the Managing Board with this.
The Group Controlling department is responsible for performance of an annual planning process and subsequently for monitoring
day-to-day business development of the insurance companies of VIG Insurance Group. Regular reports are used for this purpose,
including variance analyses and forecast accounts for the financial year. The planning horizon is three years. The planning data is
used in Own Risk & Solvency Assessment (ORSA) and forms a starting basis for calculating future expected solvency.
The Group Reinsurance department coordinates the Group-wide reinsurance programme and manages the annual renewal
process for natural catastrophe coverage. The Enterprise Risk Management department assists the Reinsurance depart-
ment in validating the external natural catastrophe models used and evaluating the effectiveness of reinsurance coverage
using the internal non-life model.
The Asset Risk Management department specifies quarterly risk budgets for investments. These budgets are then also
used to limit the value-at-risk for the investments.
RISK MONITORING
The solvency corridor defined at the Group level and the Group-wide limit system for risk-bearing capacity form the basis
for continuous monitoring of the solvency situation of the Group and subsidiaries.
Compliance with the securities guidelines, risk budgets and key figures is also continuously checked and monitored.
Monitoring is performed by means of periodic fair value measurements, value-at-risk calculations and detailed sensitivity
analyses and stress tests and determining the solvency capital requirement during the year.
Liquidity risk is managed and monitored by matching the investment portfolio to insurance obligations. Operational and
strategic risks which might be caused by deficiencies or errors in business processes, controls and projects, or changes in
the business environment, are also continuously monitored by the internal control system.
Periodic risk monitoring is documented, for example, in the quarterly reports provided to the Managing Board following the
meetings of the Risk Committee and forms the starting point for any further analyses or corrective control measures.
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Risk categories
Because of its activities, VIG Insurance Group is exposed to a large number of financial and non-financial risks. The overall
risk of VIG Insurance Group can be divided into the following risk categories:
MARKET RISK
Market risk is the risk of losses due to changes in market prices. Changes in value occur, for example, due to changes in
yield curves, share prices, exchange rates and the value of land and buildings and participations.
CREDIT RISK
Credit risk quantifies the potential loss due to a deterioration of the situation of a counterparty against which claims exist.
UNDERWRITING RISKS
VIG Insurance Group’s core business consists of the transfer of risk from policyholders to the insurance company.
Underwriting risks in the areas of life insurance, health insurance and non-life insurance are primarily the result of
changes in insurance-specific parameters, such as loss frequency, loss amount or mortality, as well as lapse rates and
lapse costs.
OPERATIONAL RISKS
Operational risks may result from deficiencies or errors in business processes, controls or projects caused by technology,
staff, organisation or external factors.
REPUTATION RISK
Reputation risk is the risk of negative changes in business due to damage to a company’s reputation.
LIQUIDITY RISK
This category includes the risk of VIG Insurance Group not having sufficient assets that can be liquidated at short notice to
satisfy its payment obligations.
STRATEGIC RISKS
Strategic risks can arise due to changes in the economic environment, case law, or the regulatory environment.
Managing significant risks
In addition to the risks in the property and casualty balance sheet unit and real estate investments that are modelled using
the partial internal model, the following risks must be noted due to their great importance for VIG Insurance Group:
• the interest rate risk as part of market risk, which primarily results from sales of long-term guarantee products,
• the asset credit quality and default risk inherent in investments, which can be assigned to credit risk and indirectly to
market risk, and
• life insurance lapse risk, which can occur due to an increase in cancellation rates.
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MARKET RISK
VIG Insurance Group is exposed to market risk, that is, the risk of suffering losses as a result of changes to market parameters.
Interest rates, issuer spreads and share prices are the most relevant parameters for market risk. Ignoring investments held for
the account of and at the risk of policyholders, investments in insurance business consist largely of fixed-income securities.
The majority of these securities are denominated in euros and Czech koruna. Consequently, interest rate fluctuations and
exchange rate changes in these currencies primarily have an effect on the value of these financial assets.
The management of investments is aimed at providing coverage for insured risks that is appropriate for the insurance
business and the maturities of liabilities.
Market risk affecting earnings is controlled by calculating value-at-risk for securities (whose changes in value affect the
financial result) at regular intervals and comparing it to the limit relative to the risk budget. Value-at-risk is determined using
a variance/covariance calculation. Thereby the variances and covariances are estimated statistically from market data. The
risk budget is determined using the hidden reserves of securities, which are taken into account based on liquidity. Default
risk is calculated using credit value-at-risk and included in this analysis.
Depending on the purpose of the application, VIG Holding performs value-at-risk calculations for different sub-portfolios for
VIG Insurance Group. Confidence levels vary between 95.0% and 99.5%, and the holding period varies from 20 to 250
days. Due to the nature of the portfolio, interest rate and spread components make the largest contributions to value-at-
risk. As a plausibility check of the calculations, the value-at-risk for the most important sub-portfolios is determined using
both the parametric method described above and the historical calculation method.
The following table shows the value-at-risk (at a 99% confidence level) for financial assets that are measured as available
for sale or recognised at fair value through profit or loss (incl. held for trading). The increase in the value-at-risk compared
to the previous year was mainly due to the general increase in capital market volatility caused by the COVID-19 pandemic,
even though volatility was already settling again in the second half of 2020.
Value-at-Risk 31.12.2020
31.12.2019
in EUR mill
ions
10-day holding period 603.4
256.3
20-day holding period 853.3
362.4
60-day holding period 1,478.0
627.7
Market risk is divided into interest rate, spread, share price, currency, real estate and concentration risk. Interest rates,
spreads and share prices are the most relevant parameters for market risk.
Interest rate risk
The main source of interest rate risk is the sizeable portfolio of policies with guaranteed minimum interest rates, which
includes pension and endowment insurance, and the resulting investments. For existing life insurance policies, VIG
Insurance Group guarantees a minimum interest rate averaging around 1.85% p.a. (1.96% p.a.). If interest rates fall below
the guaranteed average minimum rate for a longer duration of time, VIG Insurance Group could find itself forced in the future
to use its capital to subsidise reserves for these products and consequently increase them through profit or loss as a result
of the adequacy test.
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The embedded value in life and health insurance consists of the adjusted net assets at market value (ANAV) and the value
of the insurance portfolio (VIF). VIF is the present value of future profits (SPVFP), reduced by a risk margin. The SPVFP
was EUR 2,683,234,000 as of 31 December 2020. A 100 basis point drop in the yield curve would reduce the SPVFP to
EUR 1,314,852,000 which means the IFRS reserves are also adequate in this scenario. See also the embedded value
sensitivity analysis on page 96.
Spread risk
Spread risk arises from all assets and liabilities whose values depend on changes in the size of credit spreads over the
riskless yield curve. Duration and the creditworthiness of the debtor are the main factors determining the amount of spread
risk. Diversification and a uniform limit system for investments in fixed-interest instruments are used to limit this risk at the
portfolio level.
Share price risk
Among other things, share investments include participations in a number of Austrian companies and equity positions in
other companies whose shares trade primarily on the Vienna Stock Exchange or stock exchanges in the Eurozone or CEE
region. A deterioration of the current economic situation could result in the share portfolio losing value.
Shares serve to increase earnings over the long term, provide diversification and compensate for long-term erosion in value
due to inflation. VIG Insurance Group assesses share price risk by considering diversification within the overall portfolio and
correlation with other securities exposed to price risk. Risk diversification within the share portfolio is mainly achieved by
geographic diversification primarily in the home markets of the Group and in the Eurozone. Share investments are
predominantly made by the Austrian companies.
Currency risk
To diversify its portfolio, the investment area also makes use of international capital markets and, to a very small extent,
foreign currencies. The high degree of involvement in the CEE region results in currency risks at the VIG Insurance Group
level in spite of matching local currency investments made at the local level.
Concentration risk
Internal guidelines and limit system are used to keep concentrations within the desired safety margin. Consultation across
business lines provides for a comprehensive view of all significant risks.
CAPITAL MARKET SCENARIO ANALYSIS
This analysis is carried out for all insurance companies in VIG Insurance Group in order to check the risk-bearing capacity
of the investments.
The sensitivity shocks for the individual asset classes show the ranges of market value reductions for the most important
risk factors (credit risk, interest rate risk, liquidity risk) and the resulting effects on the net fair value of assets minus liabilities.
The scenarios combine these individual shocks to illustrate different capital market possibilities.
Scenarios 1 and 2 strongly reduce the fair value of shares, bonds and property at the same time. They show two different
combinations of market value reductions over the main asset classes.
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Scenario 3 shows a credit shock affecting stock and bond markets, scenario 4 is based on a shock to equity securities
(including property), and scenario 5 shows an interest rate shock that has a large effect on the value of bonds and property.
All of the scenario calculations were performed using a ceteris paribus approach.
The following table shows the stress parameters and the effects on IFRS capital of each scenario on the respective dates
(not including deferred taxes, deferred profit participation or deferred mathematical reserve).
Reduction in market value Scenario 0
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
of shares 0%
-20%
-10%
-20%
-20%
0%
of bonds 0%
-5%
-3%
-5%
0%
-5%
of property 0%
-5%
-10%
0%
-10%
-10%
Market value of assets less liabilities (in EUR millions) 7,675.2
5,503.3
6,111.4
5,718.0
6,847.1
5,687.5
In every scenario, the fair value of the assets is significantly higher than the value of the liabilities after stress.
CREDIT RISK FROM INVESTMENTS
When managing risks related to credit quality, a distinction must be made between liquid and tradable risks (e.g. exchange-
listed bonds) and bilateral risks, such as, for example, time deposits, OTC derivatives, loans, private placements and securities
accounts/depositories. The risk is monitored by means of ratings and limited by diversification limits at the portfolio level.
Consideration is only given to those issuers or contracting parties whose credit quality or reliability can be assessed by
VIG Insurance Group, whether on the basis of analyses performed by the Group, credit assessments/ratings from recognised
sources, provision of security (e.g. guarantor’s liability) or the possibility of recourse to reliable mechanisms for safeguarding
investments.
Under the investment guidelines, bond investments (which represent the largest share of investments) are made almost entirely
in the investment grade range. The goal is to achieve the greatest possible diversification among individual issuers, to avoid
accumulation risks, to ensure good average creditworthiness, to control foreign currency effects and to make the majority of
investments in mid to long-term maturities in order to reflect the maturity profile of the liabilities as efficiently as possible.
The book values of the investments as of 31 December 2020 are shown on page 80. Information on the securities and their
ratings is provided in Note 2.4. Other financial assets starting on page 111.
Use of ratings
The “second best rating” method specified under Solvency II is used as a rating method. The latest (issue or issuer) rating
from each of the three major rating agencies is used to determine the second best rating.
If the latest rating is an issuer rating, and this rating cannot be directly used due to a difference in quality of the security (e.g.
senior unsecured debt rating and a lower tier 2 bond), the rating is adjusted downwards appropriately. The adjustment is
one notch down for lower tier 2 bonds and two notches down for upper tier 2 or tier 1 bonds.
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This results in up to three valid ratings for each bond. These ratings are then ranked according to increasing probability of
default and the rating with the second-lowest probability of default taken as the “second best rating”. If the ratings in first
and second place have the same probability of default, these two ratings are the “second best rating”. In cases where a
rating has only been assigned by one rating agency, due to a lack of other information, this rating is used as the “second
best rating”.
CREDIT RISK FROM REINSURANCE
VIG Insurance Group cedes a portion of assumed risks to reinsurance companies. This transfer of risk to reinsurers does
not, however, relieve VIG Insurance Group of its obligations to policyholders. VIG Insurance Group is exposed to the risk of
reinsurer insolvency. VIG Holding therefore designs its reinsurance programme carefully and monitors reinsurer rating
changes for VIG Insurance Group.
UNDERWRITING RISKS
Underwriting risks are divided into life insurance, non-life insurance and health insurance (incl. accident insurance) and are
managed by the Actuarial department, a team of actuaries. This department subjects all insurance solutions to in-depth
actuarial analysis covering all lines of insurance business (life, health as well as property and casualty).
The Actuarial function in the Actuarial department coordinates the Group-wide determination of underwriting provisions to
prepare the economic balance sheet in accordance with Solvency II.
Life underwriting risk and health underwriting risk similar to life
Life underwriting risk includes lapse risk, cost risk, disability risk, morbidity risk, longevity risk, mortality risk, disaster risk
and audit risk. The main risks in this area are lapse risk and cost risk, as well as biometric risks, such as life expectancy,
occupational disability, illness and the need for nursing care.
To account for these underwriting risks, VIG Insurance Group has formed provisions for future insurance payments.
VIG Insurance Group calculates its underwriting provisions using recognised actuarial methods and assumptions. These
assumptions include estimates of the long-term interest rate trend, returns on investments, the allocation of investments
between equities, interest-bearing instruments and other categories, net income participations, mortality and morbidity
rates, lapse rates and future costs. The companies of VIG Insurance Group monitor actual experience relating to these
assumptions and adjust their long-term assumptions where changes of a long-term nature occur.
To minimise lapse risk, VIG Insurance Group uses an effective complaint management department, qualified advisors and
customer loyalty programmes to increase customer satisfaction and avoid cancellations. Policyholder cancellation
behaviour is continuously monitored so that targeted measures can be taken if unfavourable changes occur.
The companies of VIG Insurance Group use regular analyses, targeted product design and detailed underwriting guidelines
to address these risks. A variety of reinsurance contracts also exist that help to reduce the general level of risk. A broadly
diversified product portfolio in all life and composite companies and a well-mixed customer base in the CEE region minimise
risk concentrations.
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Annual Financial Report 2020
Non-life underwriting risk and health underwriting risk similar to non-life
Risk in the non-life sector is divided into premium risk, reserve risk, lapse risk and catastrophe risk. Property and casualty
underwriting risks are primarily managed using actuarial models for setting rates and monitoring the progress of claims, as
well as requirements for the assumption of insurance risks.
Health underwriting risk is primarily concentrated in the Austrian companies. In the CEE markets, motor third party liability
has a high volume compared to the other lines of business. This risk concentration was consciously accepted in order to
enter these markets. VIG’s strong market position and above-average growth prospects in the CEE region will help growth
in the other lines of business, thereby reducing the concentration in motor third party liability.
The environmental catastrophes that have been becoming increasingly common in recent years, such as floods, mudslides,
landslides and storms may have been brought about by general climate change. The number of claims caused in this way
may continue to rise in the future.
VIG Insurance Group forms provisions for claims and claims settlement expenses and regularly monitors them in order
to effectively cover the risk associated with the insurance business. This risk is also significantly reduced by ceding
reinsurance.
LIQUIDITY RISK
Efficient asset liability management can be used to prevent liquidity shortages. Investments and obligations are analysed
regularly to identify liquidity needs. These analyses, together with clear investment requirements (limit systems) and a con-
servative investment policy, help to appropriately manage liquidity risk. Group Treasury is responsible for the ongoing
monitoring of cash flows and quarterly reporting on the development of liquidity. The reports include the cash flows from
operating activities, investing activities and financing activities. The department evaluates and analyses the data.
To ensure that every company continues to have adequate liquidity in the future, VIG Holding guidelines specify liquidity
management standards that must be observed Group-wide by every company. Among other things, these standards re-
quire a regular examination of current and future cash inflows and outflows.
OTHER RISKS
Business activities result in other risks that are assessed and managed as part of risk management. These include, in
particular, operational risks, as well as reputation risks and strategic risks.
In addition, a comprehensive internal control system (ICS) ensures that adequate risk control infrastructure has been set up
for operational risks and is regularly checked for appropriateness and effectiveness. The ICS itself is comprised of all
measures and control activities used to minimise risks – particularly for the areas of accounting and compliance, but also
for other operational risks. It extends from specially established processes, organisational units such as accounting and
controlling, all the way to guidelines, regulations and individual controls within processes, such as automated audits or use
of the “four-eyes” principle.
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Aspects of the legal tax framework affecting earnings
Changes to tax law may negatively affect the attractiveness of certain products that currently enjoy tax advantages. For
example, the introduction of laws to reduce the tax advantages of the VIG Insurance Group’s retirement benefit products
or other life insurance products could considerably diminish their attractiveness.
Regulatory environment
VIG Insurance Group is subject to domestic and foreign (insurance) supervisory regulations. These regulations govern such
matters as:
• Capital requirements of insurance companies and groups
• Admissibility of investments as security for underwriting provisions
• Licences of the different insurance companies of VIG Insurance Group
• Marketing activities and the sale of insurance policies and
• Cancellation rights of policyholders
Changes to the statutory framework may make restructuring necessary, thus resulting in increased costs.
Developments in Central and Eastern Europe
The expansion and development of business operations in the countries of Central and Eastern Europe is a core component
of VIG Holding’s strategy. It has a very strong presence in these countries through its subsidiaries. The prescribed risk
guidelines ensure consistent risk management in all CEE countries in the Group.
Concentration risk
Concentration risk is due to the strategic partnership with Erste Group Bank and VIG Insurance Group consciously accepts
this risk. Exposure is regularly assessed and monitored by the risk management processes that have been established.
Risks due to mergers and acquisitions
In the past, VIG Holding acquired directly and indirectly a number of companies in Central and Eastern Europe or acquired
participations in these companies. Mergers of subsidiaries are considered if the synergies that can be achieved outweigh
the benefits of multiple market presences. Mergers and acquisitions often bring challenges in terms of corporate manage-
ment and financing, such as:
• the need to integrate the infrastructure of the acquired or merged company, including management information
systems, and risk management and controlling systems,
• handling unsettled matters of a legal or regulatory nature and associated legal and compliance risks resulting from the
merger or acquisition,
• integration of marketing, customer support and product ranges, and
• integration of different corporate and management cultures.
When performing mergers, a number of additional risks must be taken into account in the strategy, in particular process
and organisational risks.
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Annual Financial Report 2020
Sustainability risks
Events or changes in conditions in the environmental or social areas could potentially have a negative effect on
VIG Insurance Group’s net assets, financial position and results of operations, as well as its reputation. These include,
among other things, climate change, potentially stricter requirements for sustainability in the environmental protection area,
political measures to promote sustainable investments and stricter requirements with respect to a sustainable social
environment (labour law standards, occupational safety and working conditions, compensation, etc.). VIG Insurance Group
implicitly includes sustainability risks in its regular risk management processes (e.g. ORSA).
Risks related to the COVID-19 pandemic
Information on the risks related to the existing COVID-19 pandemic is provided on page 51.
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Portfolio changes in the life line of business
Portfolio changes in the
life line of business
Endowment insurance
excl. risk insurance
Risk insurance Annuity insurance
No. of policies
Amt. insured
No. of policies
Amt. insured
No. of policies
Amt. insured
Quantity
in EUR '000
Quantit
y
in EUR '000
Quantity
in EUR '000
As of 31.12.2019 1,952,726
23,117,872
1,973,935
103,501,504
531,894
11,927,310
Exchange rate differences -93,993
-987,995
-1,180
As of 1.1.2020 1,952,726
23,023,879
1,973,935
102,513,509
531,894
11,926,130
Additions 94,448
1,398,448
507,723
11,488,563
23,435
717,793
New business 94,448
1,294,573
507,723
10,289,875
23,435
597,083
Increases 103,875
1,198,688
120,710
Changes 40,642
462,860
13,179
43,941,390
4,545
231,517
Changes in additions 77,855
1,265,044
76,658
47,082,601
11,647
731,472
Changes in disposals -37,213
-802,184
-63,479
-3,141,211
-7,102
-499,955
Disposals due to maturity -87,837
-1,364,779
-90,279
-2,359,676
-19,481
-261,588
Due to expiration -66,583
-1,232,655
-85,447
-2,258,547
-18,261
-234,332
Due to death -21,254
-132,124
-4,832
-101,129
-1,220
-27,256
Premature disposals -74,239
-1,063,051
-282,542
-4,026,010
-20,215
-456,557
Due to non-redemption -2,390
-224,093
-24,011
-1,125,044
-478
-24,899
Due to lapse without payment -11,240
-389,689
-158,531
-1,771,708
-1,757
-62,523
Due to surrender -59,710
-396,968
-97,752
-1,000,373
-17,979
-263,756
Due to waiver of premium -899
-52,301
-2,248
-128,885
-1
-105,379
As of 31.12.2020 1,925,740
22,457,357
2,122,016
151,557,776
520,178
12,157,295
Portfolio changes in the
life line of business
Unit- and index-linked insurance Government sponsored pension plans Total
No. of policies
Amt. insured
No. of policies
Amt. insured
No. of policies
Amt. insured
Quantity
in EUR '000
Qu
antity
in EUR '000
Quantity
in EUR '000
As of 31.12.2019 1,946,666
18,890,782
484,033
9,676,032
6,889,254
167,113,500
Exchange rate differences -397,475
-23,157
-1,503,800
As of 1.1.2020 1,946,666
18,493,307
484,033
9,652,875
6,889,254
165,609,700
Additions 135,860
1,989,254
17,393
568,736
778,859
16,162,794
New business 135,860
1,868,297
17,393
285,124
778,859
14,334,952
Increases 120,957
283,612
1,827,842
Changes -17,771
-487,154
9,992
-60,304
50,587
44,088,309
Changes in additions 20,703
459,842
18,919
186,214
205,782
49,725,173
Changes in disposals -38,474
-946,996
-8,927
-246,518
-155,195
-5,636,864
Disposals due to maturity -39,527
-595,552
-2,215
-38,073
-239,339
-4,619,668
Due to expiration -35,290
-547,562
-1,384
-28,864
-206,965
-4,301,960
Due to death -4,237
-47,990
-831
-9,209
-32,374
-317,708
Premature disposals -159,310
-1,520,867
-23,147
-468,781
-559,453
-7,535,266
Due to non-redemption -23,819
-147,412
-334
-11,610
-51,032
-1,533,058
Due to lapse without payment -54,727
-620,223
-1,047
-3,403
-227,302
-2,847,546
Due to surrender -74,779
-550,504
-21,766
-280,256
-271,986
-2,491,857
Due to waiver of premium -5,985
-202,728
0
-173,512
-9,133
-662,805
As of 31.12.2020 1,865,918
17,878,988
486,056
9,654,453
6,919,908
213,705,869
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EMBEDDED VALUE SENSITIVITY ANALYSES FOR THE LIFE AND HEALTH INSURANCE BUSINESSES
The following table shows the sensitivities for changes in the assumptions used to calculate the embedded value for the life
and health insurance businesses and value of new business as of 31 December 2020:
Embedded value for the life and health insurance business
Austria/
Germany
Change
CEE
Change
Total
Change
in EUR '000
in %
in EUR '000
in %
in
EUR '000
in %
Base value 1,190,649
2,037,765
3,228,414
Increase in yield curve 1% 1,014,181
85.2
43,083
2.1
1,057,264
32.7
Decrease in yield curve 1% -1,607,224
-135.0
-77,168
-3.8
-1,684,392
-52.2
Decrease in share and property values 10% as of the
reporting date
-143,660
-12.1
-9,452
-0.5
-153,112
-4.7
Increase in share and property volatility 25% -47,085
-4.0
-6,587
-0.3
-53,672
-1.7
Increase in yield curve volatility 25% -123,005
-10.3
-9,970
-0.5
-132,975
-4.1
Decrease in administrative expenses 10% 121,874
10.2
44,871
2.2
166,746
5.2
Decrease in lapse rates 10% -102,198
-8.6
33,219
1.6
-68,979
-2.1
Decrease in mortality 5% for endowment and risk insurance 1,344
0.1
28,289
1.4
29,633
0.9
Decrease in mortality 5% for annuities -72,760
-6.1
-403
0.0
-73,163
-2.3
No volatility adjustment -126,134
-10.6
-6,514
-0.3
-132,647
-4.1
Value of new business Austria/
Germany
Change
CEE
Change
Total
Change
in EUR '000
in %
in EUR '000
in %
in EUR '000
in %
Base value 20,317
48,489
68,806
Increase in yield curve 1% 21,035
103.5
1,051
2.2
22,086
32.1
Decrease in yield curve 1% -46,418
-228.5
-2,359
-4.9
-48,776
-70.9
Decrease in administrative expenses 10% 5,083
25.0
4,156
8.6
9,239
13.4
Decrease in lapse rates 10% 2,136
10.5
4,672
9.6
6,807
9.9
Decrease in mortality 5% for endowment and risk insurance 1,751
8.6
4,083
8.4
5,834
8.5
Decrease in mortality 5% for annuities -2,931
-14.4
90
0.2
-2,840
-4.1
No volatility adjustment -240
-1.2
-498
-1.0
-738
-1.1
The sensitivities are based on the same management rules and policyholder behaviour as the base case. Each sensitivity
is calculated separately. If two events occur simultaneously, the effect is not necessarily equal to the sum of the individual
sensitivities.
Provisions in the property and casualty line of business
GENERAL INFORMATION
If claims are asserted by or against policyholders, all amounts that a company in the property and casualty line of business
pays or expects to have to pay to the claimant are referred to as losses, and the costs of investigating, adjusting and
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
97
processing these claims are referred to as “claims settlement expenses”. The companies in VIG Insurance Group have
formed provisions by lines of business, extent of cover and year to pay for losses and claims settlement expenses due to
claims under property and casualty insurance policies.
Losses and claims settlement expenses can be divided into two categories: reserves for known but still outstanding claims,
and reserves for claims that have been incurred but have not yet been reported, or the correct amount has not been
reported (“IBNR”, “IBNER”). Provisions for outstanding claims are based on estimates of future payments, including claims
settlement expenses, for these claims. These estimates are made on a case-by-case basis in accordance with facts and
circumstances ascertainable at the time the provision is formed.
The estimates reflect the well-founded judgement of the companies of VIG Insurance Group adjusters based on general
practices for forming insurance provisions and a knowledge of the nature and value of each type of claim. These provisions
are adjusted regularly during normal processing and represent the expected eventual costs necessary to finally settle all
pending reported claims, taking into account inflation, interest rates and other social and economic factors that could affect
the amount of provisions that are required.
Historical developments in distribution patterns and claims payments, the level of reported and still outstanding claims and
the nature of the extent of cover are also taken into account. In addition, court decisions and economic conditions can also
affect the estimate of provisions and the eventual size of claims.
IBNR and IBNER provisions are formed to offset the expected costs of losses that have been incurred but not yet reported
to the individual insurance companies. These provisions, just like the provisions for reported claims, are formed to pay the
expected costs, including claims settlement expenses, necessary to finally settle these claims. Because, by definition, the
extent of these losses is still unknown when the provisions are formed, VIG Insurance Group calculates its IBNR and IBNER
provisions based on historical claims experience, adjusted for current developments in claims-related factors. These
provisions are based on estimates made using actuarial and statistical forecasts of the expected costs to finally settle these
claims. The analyses are based on the facts and circumstances known at the time and on expectations regarding changes
in legal and/or economic factors that determine the level of loss, such as case law, the inflation rate and labour costs. These
provisions are regularly reviewed and revised once additional information is known and claims are actually reported. The
time needed to learn of these claims and settle them is an important factor that must be taken into account when forming
provisions.
Claims which are easy to settle, such as property damage under motor insurance, are reported within a few days or weeks
and are normally settled within a year.
More complicated claims, such as personal injury under motor or general liability insurance, typically require longer
settlement times (on average four to six years, in some cases considerably longer). Difficult claims, where settlement regu-
larly depends on the results of often protracted litigation, also lead to substantially longer settlement times, especially in the
liability, casualty, building and professional liability lines of business.
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Annual Financial Report 2020
The final costs of the claims and claims settlement expenses depend on a number of variable circumstances. Between the
time a claim is reported and final settlement, changing circumstances may require that the provisions that were formed be
revised upwards or downwards. For example, changes in the law, the outcome of litigation and changes in medical costs,
costs for materials for car and house repair and hourly wage rates, loss frequency and loss amount can have a substantial
effect on the costs of claims. These factors may result in actual developments differing from expectations — sometimes
substantially. Loss reserve estimates are regularly reviewed and updated, using the most recent information available to the
Managing Board.
Any changes to provision estimates are reflected in the operating result. The conservative policy toward provisions of
VIG Insurance Group is shown, for example, by the fact that liquidation of loss reserves has generally led to a profit. Based
on VIG Insurance Group’s internal procedures and the information currently available to it, management believes that the
VIG Insurance Group’s provisions in the property and casualty insurance area are adequate. However, forming loss reserves
is by nature an uncertain process and therefore no guarantee can be given that in the end losses will not differ from initial
estimates.
CHANGES IN CLAIMS PAYMENTS AND GROSS LOSS RESERVE
The following tables show claims payments for individual years of occurrence and VIG Insurance Group’s direct loss reserves
at the end of each year indicated. The provisions reflect the amount of expected losses, based on claims that occurred in
the current and all previous loss years and had not yet been paid as of the balance sheet date, including IBNR and IBNER.
Interpreting the information contained in this table requires caution, because each amount contains the effects of all changes
from the previous periods. The circumstances and trends that affected liability in the past could possibly recur in the future
and therefore no conclusions can be drawn from the information given in this table as to future results.
Claim payments for each year of occurrence on the applicable balance sheet date (gross)
Year of occurrence
Calender year
≤2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
in EUR '000
2011 and before 2,672,864
994,377
307,794
246,850
165,872
142,674
96,075
95,690
65,360
63,737
2012 1,711,639
775,993
194,023
93,221
84,701
44,606
28,075
24,448
17,780
2013 1,811,908
705,274
179,122
130,960
70,628
36,587
26,229
14,666
2014 1,545,509
773,664
192,081
101,832
54,209
66,232
24,281
2015 1,565,072
734,971
212,354
91,806
60,484
33,766
2016 1,619,590
806,055
204,162
108,102
79,211
2017 1,827,020
885,844
237,052
111,119
2018 1,816,053
877,898
237,846
2019 2,069,673
870,191
2020 1,925,211
Total 2,672,864
2,706,016
2,895,695
2,691,656
2,776,951
2,904,977
3,158,570
3,212,426
3,535,478
3,377,808
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Loss reserve for each year of occurrence on the applicable balance sheet date (gross)
Year of occurrence
Calender year
≤2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
in EUR '000
2011 and before 3,695,707
2,202,494
1,477,389
1,182,075
959,669
836,048
750,736
650,818
627,058
596,244
2012 1,602,011
767,831
440,116
286,807
212,221
169,230
142,029
109,382
99,906
2013 1,695,511
789,978
480,548
280,509
197,735
154,313
109,965
99,632
2014 1,749,247
813,249
468,519
313,557
234,036
158,058
131,716
2015 1,687,291
787,903
467,615
299,946
216,863
173,143
2016 1,757,426
803,864
497,502
329,162
262,292
2017 1,903,463
863,161
512,025
345,528
2018 1,999,997
957,118
571,423
2019 2,156,013
949,167
2020 2,387,581
Total 3,695,707
3,804,505
3,940,731
4,161,416
4,227,564
4,342,626
4,606,200
4,841,802
5,175,644
5,616,632
Reinsurance
VIG Insurance Group limits its potential liability arising from the insurance business by passing on, to the extent necessary,
a portion of the assumed risks to the international reinsurance market. Some of the risks of insurance companies are
reinsured within VIG Insurance Group and these risks are in turn ceded to reinsurers at the Group level.
REINSURANCE GUIDELINES
The reinsurance guidelines are jointly determined each year by the corporate Reinsurance department and the member of
the Managing Board responsible for reinsurance during the development of the reinsurance strategy for the next financial
year. They require each insurance company to provide, in consultation with the corporate Reinsurance department,
reinsurance coverage that is appropriate for its local company. These guidelines govern the following points.
Reinsurance is a prerequisite for the acceptance of insurance coverage
Underwriting departments may only make a binding commitment to insure a risk if sufficient reinsurance coverage has
already been assured.
Retention
It is Group-wide policy that no more than EUR 50.0 million for the first two natural disaster events and EUR 20.0 million for
each additional event can be placed at risk on a PML (probable maximum loss) basis. The maximum Group-wide retention
per individual loss is less than EUR 15.0 million.
Selection of reinsurers – diversification
VIG Holding and its subsidiaries divide their reinsurance coverage among many different international reinsurance compa-
nies that VIG Holding feels have appropriate credit quality, so as to minimise the risk arising from one reinsurer’s inability to
pay (credit risk). The monetary limit per reinsurer is set individually for each subsidiary.
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Annual Financial Report 2020
Selection of reinsurers – ratings
For lines of business where claims settlement takes a long time, in particular for motor third party liability, general liability
and aviation, VIG Insurance Group uses reinsurers with outstanding ratings (at least a Standard & Poor’s rating of A,
preferably a rating of AA or higher), which in all likelihood will also continue to exist over the long term. For lines of business
with claims that are settled quickly (for example, natural catastrophes, fire, technology, transportation, storm, burglary,
household, water pipes, motor own damage), where the number of reinsurers is greater, the preferred rating is Standard &
Poor’s A or higher. Only in a few cases – and for limited periods of time – are reinsurers with lower ratings accepted.
Design of reinsurance programmes
If it can be justified economically, any subsidiary can purchase reinsurance coverage individually from external reinsurers. If
individual reinsurance policies can only be purchased by a subsidiary at uneconomical terms, VIG Insurance Group strives,
as far as possible, to jointly place reinsurance contracts covering risks from natural catastrophes, property lines of business,
casualty, transport, aviation and motor liability. If necessary, intra-Group assumptions of reinsurance are also passed on as
retrocession in the reinsurance market for safety reasons. The guidelines for Wiener Städtische reinsurance coverage are
presented below. Retentions for all other insurance companies are below those of Wiener Städtische.
REINSURANCE COVERAGE USING THE EXAMPLE OF WIENER STÄDTISCHE
Natural catastrophes
Wiener Städtische provides insurance for damage caused by natural catastrophes such as storms, hail, flooding or earth-
quakes. Wiener Städtische AG uses reinsurance coverage to limit its retention for natural disasters to EUR 15.0 million for
the first loss event and EUR 5.0 million for each additional event.
Private customer business
The private customer business consists of essentially stable insurance portfolios having calculable results that are characterised
above all by a stable claims frequency. Thus, such recurrent claims are only reinsured in exposed lines of business, for example
storm insurance, with a targeted use of proportional reinsurance to reduce the effects on the retention. The effects on the retention
of the small number of expected major losses are covered by non-proportional reinsurance. Even in this operating segment,
Wiener Städtische’s maximum net loss is between EUR 1.0 million and EUR 2.0 million, depending on the line of business.
Management and control
LIQUIDITY MANAGEMENT
VIG Insurance Group manages its liquidity using guidelines approved by the Managing Board of VIG Holding. As a rule,
VIG Holding and each subsidiary are responsible for their own liquidity planning. As the parent company, VIG Holding is
responsible for allocating capital for VIG Insurance Group as a whole. This allows capital to be efficiently distributed within
VIG Insurance Group. It also allows VIG Holding to ensure that the target levels of liquidity and capital resources are available
both at the VIG Insurance Group level and in the individual operating units.
Most of the liquidity for day-to-day operations comes from premiums received from primary insurance, regular income from invest-
ments and proceeds from the sale of investments. These inflows are offset by payments for property and casualty insurance claims,
and benefit payments for life and health insurance. The remaining net liquidity is used to cover acquisition and operating costs.
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The maturity pattern of the insurance business provides a natural liquidity buffer. Unlike the premiums received,
VIG Insurance Group guarantees insurance coverage for a certain period of time, and no cash outflow occurs during this
period until an insured event occurs. The liquidity buffer is invested during this period and generates investment income. A
portion is held in the form of liquid investments to ensure that it can be quickly converted into cash to pay claims. In addition,
the bond portfolio, in particular, is structured so that the proceeds from maturing bonds are received on the dates it is
anticipated they will be needed. External influence factors, such as capital market developments and the interest rate level,
affect the liquidity situation by improving or restricting the ability to sell the investment portfolio at market value.
The time, frequency and size of insured claims are also important for the liquidity situation of property and casualty insurance.
The number of policy extensions also plays a role.
The liquidity needs for life insurance are generally affected by the difference between actual mortality experience and the
assumptions used to calculate underwriting provisions. Market returns or minimum interest rates and the behaviour of life
insurance customers, such as the number of policies surrendered or terminated, also have an effect on liquidity needs.
CAPITAL MANAGEMENT
In the interests of our shareholders and insurance customers, our goal is to ensure that VIG Holding has adequate capital
resources at all times and that all operating insurance companies fulfil their respective minimum regulatory capital
requirements. Due to its successful business strategy, VIG Holding has traditionally had very good capital resources.
Maintaining this good capital base in the future is also important to us, both to allow us to take advantage of profitable
growth opportunities and to cushion the effects of large loss events.
Standard & Poor’s rating
VIG Holding also places great importance on permanently maintaining a strong credit rating with Standard & Poor’s (S&P).
VIG Holding is regularly rated by S&P. S&P has its own capital model for assessing the relationship between the risk capital
required by a company and the capital resources available to it. In November 2020, S&P affirmed VIG Holding’s A+ rating
with a “stable” outlook.
The subordinated bonds issued in 2013 (EUR 500 million, tier 2, first call date 9 October 2023), 2015 (EUR 400 million, tier
2, first call date 2 March 2026) and 2017 (EUR 200 million, tier 2, first call date 13 April 2027) have been rated A- by S&P.
According to the S&P publication of 25 November 2020, the Group’s capital resources exceed the requirements for the
AAA level. This means that VIG Holding has a very good credit rating when compared to similar insurance companies, and
outstanding capital resources. When performing regular capital planning, VIG Holding takes account of the effects on its
rating, with the goal of strengthening it over the long term.
Active capital management
VIG Holding uses the criteria above to monitor its capital positions and takes appropriate measures to further improve its
capital structure and strengthen its capital and solvency situation over the long term. VIG Holding has set itself a goal of
holding the solvency ratio at the current level in all of the insurance companies in the Group in spite of planned growth. A
solvency corridor of 170% to 230% at the Solvency II Group level has been specified by VIG Holding.
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Annual Financial Report 2020
Capital management focuses on subordinated long-term liabilities with equity-like characteristics. VIG Group Treasury
continuously monitors capital market developments, with particular attention to developments concerning bonds with
equity-like characteristics from the European insurance sector. New capital instruments developing in the capital market for
insurance companies are examined for applicability to VIG Holding.
Capital resources
As of 31 December 2020, share capital of EUR 132,887,468.20 was registered in the commercial register, divided into
128,000,000 no-par value bearer ordinary shares with voting rights. VIG Holding held no own shares on 31 December 2020
(2019: none). In addition, VIG Holding can, according to the authorisation by the shareholders, increase its shareholders’
equity by issuing common or preferred shares. The individual authorisations are listed in Note 8. Consolidated shareholders’
equity starting on page 119.
VIG Insurance Group had an auditor-reviewed solvency ratio defined based on Solvency II of 238.1% as of 31 December
2020 (31 December 2019: 209.7%).
Long-term debt financing
VIG Insurance Group had subordinated bonds with a wide range of maturities outstanding as of 31 December 2020.
Detailed information on the VIG Insurance Group bond programme is provided in Note 9. Subordinated liabilities starting
on page 122. As shown by the maturities, VIG Insurance Group’s focus is on subordinated liabilities that are eligible capital.
General capital market conditions and other circumstances that affect the financial services sector as a whole or
VIG Insurance Group in particular could have an adverse effect on the cost and availability of debt financing. The goal,
therefore, is to actively manage the capital structure to keep refinancing risks as low as possible.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
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NOTES TO THE CONSOLIDATED BALANCE SHEET – ASSETS
1. INTANGIBLE ASSETS
Composition 31.12.2020
31.12.2019
in EUR '000
Goodwill 1,237,316
1,382,535
Purchased insurance portfolios 19,491
38,191
Other intangible assets 476,270
518,853
Purchased software 401,463
423,377
Other 74,807
95,476
Total 1,733,077
1,939,579
1.1. Goodwill
Development goodwill 2020
2019
in EUR '000
Acquisition costs 1,906,993
1,899,957
Cumulative impairment as of 31.12. -524,458
-424,751
Book value as of 31.12. of the previous year 1,382,535
1,475,206
Exchange rate differences -26,972
3,667
Book value as of 1.1. 1,355,563
1,478,873
Additions 1,809
12,483
Impairments -120,056
-108,821
Book value as of 31.12. 1,237,316
1,382,535
Cumulative impairment as of 31.12. 628,303
524,458
Acquisition costs 1,865,619
1,906,993
In connection with the global COVID-19 pandemic in the 1
st
half of 2020 there were several triggers for an unscheduled
impairment test of goodwill. The resulting impairments mainly affect the CGU groups Bulgaria (EUR 59,800,000), Croatia
(EUR 45,017,000) and Georgia (EUR 12,518,000) and are primarily the result of a higher cost of equity due to the increase
in uncertainty caused by the COVID-19 pandemic and the underlying scenario analyses that simulated the potential effects
of COVID-19 on macroeconomic data.
The impairments in the previous year concerned the Romania CGU group.
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Annual Financial Report 2020
Goodwill of CGU units (book values) 31.12.2020
31.12.2019
in EUR '000
Austria 301,716
301,716
Czech Republic 430,094
444,212
Slovakia 111,257
111,257
Poland 144,136
154,447
Baltic states 75,481
75,301
Hungary 14,118
15,543
Bulgaria 124,354
184,154
Georgia 0
13,879
Albania incl. Kosovo 13,097
13,307
Croatia 0
45,615
North Macedonia 12,538
12,579
Central Functions 10,525
10,525
Total 1,237,316
1,382,535
Please see the section titled “Impairment of non-financial assets” on page 54 for information on the assumptions used for
impairment testing.
1.2. Other intangible assets
Development purchased software 2020
2019
in EUR '000
Acquisition costs 1,225,688
1,116,067
Cumulative valuation as of 31.12. of the previous year -802,311
-753,229
Book value as of 31.12. of the previous year 423,377
362,838
Exchange rate differences -4,188
161
Book value as of 1.1. 419,189
362,999
Reclassifications -637
-5,061
Additions 109,904
125,991
Disposals -3,146
-5,729
Changes in scope of consolidation 0
1,144
Scheduled depreciation -123,847
-55,967
Impairments 0
0
Book value as of 31.12. 401,463
423,377
Cumulative valuation as of 31.12. 917,226
802,311
Acquisition costs 1,318,689
1,225,688
Information on the shortening of useful lives for software reported under other intangible assets is provided in the section
titled “Estimates and discretionary decisions“ on page 48.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
105
2. INVESTMENTS
Composition 31.12.2020
31.12.2019
in EUR '000
Property 2,507,413
2,414,258
Owner-occupied property 477,469
488,701
Investment property 2,029,944
1,925,557
Shares in at equity consolidated companies 291,561
321,276
Financial assets 32,102,212
31,720,206
Loans and other investments 3,417,208
3,475,405
Other financial assets 28,685,004
28,244,801
Total 34,901,186
34,455,740
2.1. Property
Owner-occupied property
Development 2020
2019
in EUR '000
Acquisition costs 757,958
698,852
Cumulative valuation as of 31.12. of the previous year -269,257
-239,871
Book value as of 31.12. of the previous year 488,701
458,981
Exchange rate differences -8,123
195
Book value as of 1.1. 480,578
459,176
Reclassifications 926
41,786
Additions 16,570
15,278
Disposals -2,544
-1,310
Changes in scope of consolidation 0
-10,027
Appreciation 43
71
Scheduled depreciation -16,811
-15,787
Impairments -1,293
-486
Book value as of 31.12. 477,469
488,701
Cumulative valuation as of 31.12. 281,311
269,257
Acquisition costs 758,780
757,958
The impairment is primarily due to fair value lying below book value of property, as shown by appraisal reports.
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Annual Financial Report 2020
Investment property
Development 2020
2019*
in EUR '000
Acquisition costs 2,702,204
7,952,624
Cumulative valuation as of 31.12. of the previous year -776,647
-2,445,939
Book value as of 31.12. of the previous year 1,925,557
5,506,685
Exchange rate differences -2,990
523
Book value as of 1.1. 1,922,567
5,575,168
Reclassifications -969
-41,736
Additions 136,342
304,429
Disposals -2,942
-56,114
Changes in scope of consolidation 28,510
-3,755,688
Appreciation 246
11,253
Scheduled depreciation -51,452
-108,111
Impairments -2,358
-3,644
Book value as of 31.12. 2,029,944
1,925,557
Cumulative valuation as of 31.12. 827,675
776,647
Acquisition costs 2,857,619
2,702,204
Rental income 132,849
396,891
From investment property 132,849
396,891
Operating expenses for rented investment property 31,617
115,294
Operating expenses for vacant investment property 6,623
7,365
Operating expenses for building rights 0
519
*Includes right-of-use asset for building rights
The changes in the scope of consolidation are mainly due to first-time inclusion of DVIB alpha GmbH (EUR 7,922,000),
VIG Home, s.r.o. (EUR +9.651,000), WSVA Liegenschaftsbesitz GmbH (EUR +10.078,000) and WSVB Liegenschaftsbesitz
GmbH (EUR +821,000).
The impairment is primarily due to fair value lying below book value of property, as shown by appraisal reports.
Use of property
Detail property 31.12.2020
31.12.2019
in EUR '000
Owner-occupied property 477,469
488,701
self-used 470,289
477,768
rented (operating lease) 7,180
10,933
Investment property excl. RoU-asset for building-rights 2,029,944
1,925,557
self-used 1,537
3,005
rented (operating lease) 2,028,407
1,922,552
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2.2. Shares in at equity consolidated companies
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 321,276
221,312
Exchange rate differences -10
0
Book value as of 1.1. 321,266
221,312
Retrospective adjustment due to application of new standards 0
-3,181
Additions 6,471
0
Disposals 0
-5,000
Changes in scope of consolidation 393
153
Additions due to loss of control of previously fully consolidated companies 0
99,836
Impairments -29,000
0
Share of changes in OCI 1,167
-1,394
Pro rata result of the period of shares in at equity consolidated companies 2,285
26,448
Dividend payment -11,021
-16,898
Book value as of 31.12. 291,561
321,276
thereof segment Austria 150,862
183,232
thereof segment Czech Republic 28,331
25,739
thereof segment Poland 143
153
thereof segment Central Functions 112,225
112,152
The impairments of EUR 29,000,000 in the current financial year concern Österreichisches Verkehrsbüro AG. The company
suffered considerably under the restrictions imposed during the COVID-19 pandemic. The increase in legal the uncertainty
this caused led to an increase in its cost of capital and deterioration in multi-year planning. Österreichisches Verkehrsbüro
AG was valued using an earnings-based discounted cash flow method.
The additions due to loss of control of previously fully consolidated companies item in the previous year concerns the
change to the consolidation method used for the non-profit societies.
Associated companies are measured at equity.
Development of material shares in
at equity consolidated companies
2020
Beteiligungs- und
Wohnungs-
anlagen GmbH
Gewista-Werbe-
gesellschaft
m.b.H.
Österreichisches
Verkehrsbüro AG
Erste Heimstätte
GmbH
VBV - Betriebliche
Altersvorsorge AG
in EUR '000
Book value as of 31.12. of the previous year 31,126
34,860
55,164
48,433
54,233
Book value as of 1.1. 31,126
34,860
55,164
48,433
54,233
Additions 0
0
0
0
4,267
Impairments 0
0
-29,000
0
0
Share of changes in OCI 0
0
-417
0
1,638
Pro rata result of the period of shares in at equity consolidated
companies 4,013
3,735
-15,435
0
7,526
Dividend payment -1,721
-4,154
0
0
-1,773
Book value as of 31.12. 33,418
34,441
10,312
48,433
65,891
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Annual Financial Report 2020
Material shares in at equity consolidated companies 2020
Beteiligungs- und
Wohnungs-
anlagen GmbH
Gewista-Werbe-
gesellschaft
m.b.H.
Österreichisches
Verkehrsbüro AG
Erste Heimstätte
GmbH
VBV - Betriebliche
Altersvorsorge AG
*
in EUR '000
Group interest in % 25.00%
33.00%
36.58%
99.77%
25.32%
Income 0
80,308
223,800
89,586
73,702
Expenses -191
-70,401
-269,927
-40,155
-38,939
Financial result 14,531
2,542
-9,447
-50,924
5,295
Taxes 1,712
-1,130
13,354
-73
-9,265
Result of the period 16,052
11,319
-42,220
-1,566
30,793
Parent company minority interest 0
0
25
0
0
Adjustment item due to protective provisions of the Austrian
Non-Profit Housing Act (Wohnungsgemeinnützigkeitsgesetz –
WGG)
0
0
0
1,566
0
Result of the period less non-controlling interests 16,052
11,319
-42,195
0
30,793
thereof non-controlling interests 361
7,745
-950
0
693
thereof shares of at equity consolidated companies held by
shareholders
15,691
0
-41,270
0
30,100
Share of result 4,013
3,735
-15,435
0
7,526
Fixed assets 340,336
121,892
336,521
919,748
377,064
Current assets (incl. other assets) 28,268
452
77,641
29,612
12,478,542
Borrowings -234,931
-17,978
-373,555
-666,088
-12,595,373
Net assets 133,673
104,366
40,607
283,272
260,233
thereof non-controlling interests 3,008
104,366
914
79,556
5,855
thereof shares of at equity consolidated companies held by
shareholders 130,665
0
39,693
203,716
254,378
Share of net assets 33,418
34,441
14,852
282,629
65,891
Impairments 0
0
-4,540
0
0
Adjustment item due to protective provisions of the Austrian
Non-Profit Housing Act (Wohnungsgemeinnützigkeitsgesetz –
WGG) 0
0
0
-234,196
0
Book value of shares in at equity consolidated companies 33,418
34,441
10,312
48,433
65,891
*
Participation percentage: Q1 2020: 23.71%, starting with Q3 2020: 25.32%
Materiality is generally determined based on the amount of the at equity book value.
Beteiligungs- und Immobilien GmbH and Beteiligungs- und Wohnungsanlagen GmbH were included in the consolidated
financial statements with a different balance sheet date (30 September).
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
109
2.3. Loans and other investments
Composition of loans and other investments 31.12.2020
31.12.2019
in EUR '000
Loans 1,647,782
1,461,846
Reclassified loans 136,308
139,584
Bonds classified as loans 782,794
814,678
Total loans 2,566,884
2,416,108
Other investments 850,324
1,059,297
thereof bank deposits 766,408
973,247
thereof deposits on assumed reinsurance business 83,900
86,032
Total 3,417,208
3,475,405
Composition of total loans 31.12.2020
31.12.2019
in EUR '000
Loans 1,647,782
1,461,846
Loans to non-consolidated affiliated companies 76,886
65,779
Loans to participations 36,664
32,016
Mortgage loan 518,760
547,857
Policy loans and prepayments 18,621
20,278
Other loans 996,851
795,916
to public authorities 200,509
194,314
to financial institutions 159,628
164,675
to other commercial borrowers 518,209
435,739
to private persons and others 118,505
1,188
Reclassified loans 136,308
139,584
Bonds classified as loans 782,794
814,678
to public authorities 109,945
110,071
to financial institutions 638,656
668,645
to other commercial borrowers 34,193
35,962
Total 2,566,884
2,416,108
Public sector borrowers include national, state and local authorities. The loans included under other loans are generally
loans that are not secured by insurance policies.
Collateral was provided for around 48.64% of the total loans reported.
110
Annual Financial Report 2020
Development of total loans 2020
2019
in EUR '000
Acquisition costs 2,449,880
2,486,253
Cumulative valuation as of 31.12. of the previous year -33,772
-30,989
Book value as of 31.12. of the previous year 2,416,108
2,455,264
Exchange rate differences -2,853
-170
Book value as of 1.1. 2,413,255
2,455,094
Additions 3,782,491
1,721,177
Disposals -3,629,063
-1,690,309
Changes in scope of consolidation 156
-66,840
Appreciation 68
43
Impairments -23
-3,057
Book value as of 31.12. 2,566,884
2,416,108
Cumulative valuation as of 31.12. 7,522
33,772
Acquisition costs 2,574,406
2,449,880
Maturity structure of loans 31.12.2020
31.12.2019
in EUR '
000
Loans 1,647,782
1,461,846
up to one year 130,471
34,843
more than one year up to five years 472,675
443,462
more than five years up to ten years 271,829
259,694
more than ten years 772,807
723,847
Bonds classified as loans 782,794
814,678
up to one year 28,664
45,164
more than one year up to five years 395,188
305,499
more than five years up to ten years 161,943
267,658
more than ten years 196,999
196,357
Financial assets in the “Financial assets available for sale” category that were reclassified as loans in 2008 had a fair value
of EUR 1,037,036,000 as of the reclassification date.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
111
2.4. Other financial assets
Development Held to maturity (incl. reclassified) Available for sale Recognised at fair value through profit
and loss
*
2020
2019
2020
2019
2020
2019
in EUR '000
Acquisition costs 2,766,187
2,937,383
Cumulative valuation as of 31.12. of the
previous year
-2,486
-1,382
Book value as of 31.12. of the previous
year 2,763,701
2,936,001
25,148,103
23,481,693
332,997
327,585
Exchange rate differences -79,580
27,618
-111,320
-1,509
-8,275
525
Book value as of 1.1. 2,684,121
2,963,619
25,036,783
23,480,184
324,722
328,110
Reclassifications 0
0
-6
-5,646
-51,352
-20,528
Additions 153,580
60,613
3,366,777
3,424,353
191,772
313,741
Disposals/repayments -425,388
-260,531
-2,713,913
-2,848,101
-177,909
-303,948
Changes in scope of consolidation 44,125
0
-42,324
31,218
-46,084
128
Changes in value recognised in profit and
loss 0
0
6,689
195
4,009
15,494
Changes recognised directly in equity 0
0
397,925
1,087,225
0
0
Impairments 0
0
-68,500
-21,325
-23
0
Book value as of 31.12. 2,456,438
2,763,701
25,983,431
25,148,103
245,135
332,997
Cumulative valuation as of 31.12. 1,401
2,486
Acquisition costs 2,457,839
2,766,187
*Including held for trading
The changes recognised directly in equity for the “Financial assets available for sale” category were mainly due to the effect
of the yield curve on fixed-interest securities.
The reclassifications shown for the “Recognised at fair value through profit and loss (incl. held for trading)” category are
reclassifications from and to financial instruments for unit-linked and index-linked life insurance.
Composition government bonds
1
(book values)
Held to maturity (incl. reclassified) Available for sale Recognised at fair value through profit
and loss
2
31.12.2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
31.12.2019
in %
Austria 0.73
0.65
13.50
13.44
0.00
0.00
Germany 0.13
0.12
1.31
1.49
52.38
24.51
Czech Republic 64.50
69.31
6.39
5.82
0.00
0.00
Slovakia 3.46
3.35
6.82
7.71
0.00
0.00
Poland 17.65
12.26
13.57
13.28
44.84
75.06
Romania 0.03
0.11
5.46
5.28
1.69
0.00
Other countries 13.50
14.20
52.95
52.98
1.09
0.43
1
Government bonds also include bonds issued by supranational organisations, government agencies, federal or constituent states and municipal bonds.
2
Including held for trading
112
Annual Financial Report 2020
Financial assets held to maturity
Composition Amortised cost Fair value
Financial assets held to maturity 31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Financial assets held to maturity 2,163,435
2,195,001
2,479,845
2,472,357
Government bonds 1,891,483
1,922,748
2,152,108
2,130,871
Covered bonds 214,205
206,930
267,285
271,484
Corporate bonds 45,628
50,766
47,592
55,310
Bonds from banks 10,192
14,557
10,751
14,692
Subordinated bonds 1,927
0
2,109
0
Financial assets reclassified as held to maturity 293,003
568,700
369,550
648,635
Government bonds 277,464
552,572
352,601
631,230
Covered bonds 2,012
2,098
2,233
2,260
Bonds from banks 13,527
14,030
14,716
15,145
Maturity structure Amortised cost Fair value
Financial assets held to maturity 31.12.2020
31.12.2019
31.12.2020
31.12.2019
in EUR '000
Financial assets held to maturity 2,163,435
2,195,001
2,479,845
2,472,357
up to one year 126,916
162,579
129,242
164,876
more than one year up to five years 783,974
694,185
842,647
759,296
more than five years up to ten years 705,266
619,859
760,378
695,164
more than ten years 547,279
718,378
747,578
853,021
Financial assets reclassified as held to maturity 293,003
568,700
369,550
648,635
up to one year 5,720
266,679
5,882
271,551
more than one year up to five years 154,423
163,032
167,213
177,555
more than five years up to ten years 0
2,098
0
2,260
more than ten years 132,860
136,891
196,455
197,269
Rating categories Amortised cost
Financial assets held to maturity (incl. reclassified) 31.12.2020
31.12.2019
in EUR '000
AAA 82,351
64,997
AA 1,628,490
1,965,661
A 516,380
451,115
BBB 83,143
162,413
BB and lower 128,000
102,750
No rating 18,074
16,765
Total 2,456,438
2,763,701
Financial assets in the “Financial assets held to maturity” category that were reclassified from the “Financial assets available
for sale” category in 2008 had a fair value of EUR 1,393,784,000 as of the reclassification date. VIG Insurance Group made
use of the provisions on “Reclassification of financial assets” in IAS 39.50 et seqq. due to financial market developments in
the 2
nd
half of 2008. Since the required information is not available and the cost to obtain the information would be
excessively high, it would not be possible to determine the book values if reclassification had not been performed.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
113
Financial assets available for sale
Composition Fair value
Financial assets available for sale 31.12.2020
31.12.2019
in EUR '000
Bonds 22,895,705
22,300,441
Government bonds 11,107,686
10,699,611
Covered bonds 1,444,081
1,473,214
Corporate bonds 5,995,755
5,658,518
Bonds from banks 3,520,687
3,606,210
Subordinated bonds 827,496
862,888
Shares and other participations
*
672,285
666,017
Investment funds 2,415,441
2,181,645
Equity funds 1,054,435
1,039,065
Pension funds 1,027,247
812,627
Alternative funds 9,022
10,135
Real estate funds 96,387
88,476
Balanced funds 228,350
231,342
Total 25,983,431
25,148,103
*Includes shares in non-consolidated subsidiaries and other participations amounting to EUR 257,779,000 (EUR 217,494,000)
Unrealised gains and losses 31.12.2020 31.12.2019
Financial assets available for sale Fair value
Unrealised
gains
Unrealised
losses
Fair value
Unrealised
gains
Unrealised
losses
in EUR '000
Bonds 22,895,705
2,800,566
-31,810
22,300,441
2,593,329
-52,161
Shares and other participations 672,285
132,830
-11,841
666,017
107,787
-20,271
Investment funds 2,415,441
258,357
-35,183
2,181,645
230,442
-40,505
Total 25,983,431
3,191,753
-78,834
25,148,103
2,931,558
-112,937
In the case of the “Financial assets available for sale” category, the balance sheet value equals fair value. Unrealised gains
and losses represent the difference between amortised cost and fair value.
114
Annual Financial Report 2020
Impairments 31.12.2020 31.12.2019
Financial assets available for sale Gross book value
Impairment
Net book value
Gross book value
Impairment
Net book value
in EUR '000
Bonds 22,910,578
14,873
22,895,705
22,309,470
9,029
22,300,441
not adjusted 22,895,645
0
22,895,645
22,300,438
0
22,300,438
adjusted 14,933
14,873
60
9,032
9,029
3
Shares
*
486,100
71,594
414,506
485,484
36,961
448,523
not adjusted 291,525
0
291,525
382,023
0
382,023
adjusted 194,575
71,594
122,981
103,461
36,961
66,500
Investment funds 2,479,584
64,143
2,415,441
2,230,276
48,631
2,181,645
not adjusted 2,329,235
0
2,329,235
2,135,880
0
2,135,880
adjusted 150,349
64,143
86,206
94,396
48,631
45,765
Total 25,876,262
150,610
25,725,652
25,025,230
94,621
24,930,609
*Not including impairment of shares in affiliated companies and other participations
Maturity structure Fair value
Financial assets available for sale 31.12.2020
31.12.2019
in EUR '000
no maturity 3,192,840
2,938,675
up to one year 1,553,962
1,044,476
more than one year up to five years 7,272,358
6,810,127
more than five years up to ten years 8,260,812
8,680,671
more than ten years 5,703,459
5,674,154
Total 25,983,431
25,148,103
Rating categories Fair value
Fixed-interest financial assets available for sale 31.12.2020
31.12.2019
in EUR '000
AAA 2,277,967
2,187,356
AA 6,022,531
5,856,128
A 8,373,395
8,733,258
BBB 5,407,591
4,660,993
BB and lower 641,667
727,385
No rating 172,554
135,321
Total 22,895,705
22,300,441
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
115
3. FINANCIAL INSTRUMENTS FOR UNIT-LINKED AND INDEX-LINKED LIFE INSURANCE (C)
Composition 31.12.2020 31.12.2019
Unit-linked
Index-linked
Total
Total
in EUR '000
Investment funds 6,502,389
0
6,502,389
6,465,516
Bonds 0
1,369,406
1,369,406
2,053,153
Shares 0
794
794
1,195
Bank deposits 64,958
14,054
79,012
91,022
Deposit receivables 8,242
0
8,242
8,500
Net of receivables and liabilities 8,196
0
8,196
941
Total 6,583,785
1,384,254
7,968,039
8,620,327
Maturity structure 31.12.2020
31.12.2019
in EUR '000
no maturity 6,551,943
6,526,937
up to one year 445,691
691,873
more than one year up to five years 530,027
975,529
more than five years up to ten years 427,050
385,384
more than ten years 13,328
40,604
Total 7,968,039
8,620,327
4. REINSURERS’ SHARE IN UNDERWRITING PROVISIONS
Development Book value
as of 1.1.
Exchange rate
differences
Additions
Amount
used/released
Book value as of
31.12.2020
in EUR '000
Provision for unearned premiums 207,809
-20,370
132,080
-128,292
191,227
Mathematical reserve 31,603
-10
13,274
-31,420
13,447
Provision for outstanding claims 1,026,005
-25,353
895,215
-723,321
1,172,546
Provision for profit-unrelated premium refunds 14,857
-224
14,323
-14,590
14,366
Other underwriting provisions 3,160
-256
4,973
-2,971
4,906
Total 1,283,434
-46,213
1,059,865
-900,594
1,396,492
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 696,553
726,635
more than one year up to five years 405,903
329,763
more than five years up to ten years 160,805
119,934
more than ten years 133,231
107,102
Total 1,396,492
1,283,434
116
Annual Financial Report 2020
5. RECEIVABLES
Composition 31.12.2020
31.12.2019
in EUR '000
Underwriting 1,015,400
1,003,123
Receivables from direct insurance business 810,381
790,293
from policyholders 622,939
624,956
from insurance intermediaries 131,571
127,731
from insurance companies 55,871
37,606
Receivables from reinsurance business 205,019
212,830
Non-underwriting 683,759
714,226
Other receivables 683,759
714,226
Total 1,699,159
1,717,349
Composition of other receivables 31.12.2020
31.12.2019
in EUR '000
Receivables from finance lease 48,600
49,231
Receivables from recourse claims 35,155
27,787
Pro rata and outstanding interest and rent 360,564
381,464
Receivables from tax authority (excl. income tax) and from fees of all kinds 41,868
46,100
Receivables from sales of investments 10,884
8,750
Receivables from property management 13,844
15,244
Receivables from third party claims settlement 16,851
27,060
Receivables from green card deposits and surety 59,898
63,777
Receivables from pre-payments 16,918
21,174
Other receivables 79,177
73,639
thereof receivables from charges for services 24,579
21,503
thereof receivables from charges for pensions 16,221
10,975
Total 683,759
714,226
Maturity structure 31.12.2020 31.12.2019
Premium
receivables due
Non-underwriting
Total
Total
in EUR '000
up to one year 263,059
613,724
876,783
858,338
more than one year up to five years 14,053
40,889
54,942
60,839
more than five years up to ten years 0
11,999
11,999
45,302
more than ten years 0
17,147
17,147
29,446
Subtotal 277,112
683,759
960,871
993,925
Premium receivables not yet due 423,987
418,698
Receivables from reinsurance business 205,019
212,830
Other underwriting receivables 109,282
91,896
Total 1,699,159
1,717,349
The gross receivables are offset by impairments (directly reducing the asset item) of EUR 86,725,000 (EUR 91,040,000)
and provisions for cancellations of EUR 21,057,000 (EUR 12,628,000).
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
117
Ageing analysis 31.12.2020
Overdue receivables 1–60 days
overdue
61–90 days
overdue
91–120 days
overdue
more than 120
days overdue
Total
in EUR '000
Premium receivables 164,674
62,199
20,928
45,974
293,775
not adjusted 61,681
34,072
13,101
22,217
131,071
adjusted 102,993
28,127
7,827
23,757
162,704
Non-underwriting receivables 9,093
9,758
3,609
25,321
47,781
not adjusted 6,855
9,167
1,479
15,665
33,166
adjusted 2,238
591
2,130
9,656
14,615
Ageing analysis 31.12.2019
Overdue receivables
1–60 days
overdue
61–90 days
overdue
91–120 days
overdue
more than 120
days overdue
Total
in EUR '000
Premium receivables 162,651
57,440
14,797
64,446
299,334
not adjusted 68,771
30,398
6,475
39,503
145,147
adjusted 93,880
27,042
8,322
24,943
154,187
Non-underwriting receivables 5,305
8,737
2,216
26,023
42,281
not adjusted 4,380
8,557
2,147
14,502
29,586
adjusted 925
180
69
11,521
12,695
6. DEFERRED TAXES
The deferred tax assets and liabilities reported relate to temporary differences in the balance sheet items listed in the table
below. (The differences were measured using the applicable tax rates.) It should be noted that deferred taxes, as far as
permissible, are offset at the taxpayer level, and, accordingly, the different balances are shown either as assets or liabilities
on the balance sheet.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the
extent that it is probable that the deferred tax assets can be used. Deferred tax assets are examined each balance sheet
date and reduced to the extent that it is no longer probable that the associated tax benefits can be realised.
118
Annual Financial Report 2020
Composition 31.12.2020 31.12.2019
Assets
Liabilities
Assets
Liabilities
in EUR '000
Intangible assets 13,715
21,742
7,886
16,315
Right-of-Use Assets 0
60,577
0
65,353
Investments
1
104,452
403,115
98,089
358,554
Receivables and other assets
2
39,480
42,016
41,794
28,065
Accumulated losses carried forward 41,771
0
42,364
0
Tax-exempt reserves 0
10,975
0
11,288
Underwriting provisions
3
221,233
144,104
131,429
168,943
Non-underwriting provisions 102,972
2,408
103,614
1,924
Liabilities and other liabilities
4
92,345
27,301
93,094
30,689
Sum before valuation allowance 615,968
712,238
518,270
681,131
Valuation allowance for DTA -34,872
-30,616
Total before netting 581,096
712,238
487,654
681,131
Netting -444,368
-444,368
-418,929
-418,929
Net balance 136,728
267,870
68,725
262,202
1
Including financial investments for unit-linked and index-linked life insurance
2
Including cash and cash equivalents
3
Including reinsurers' share in underwriting provisions as well as underwriting provisions for unit-linked and index-linked life insurance
4
Including subordinated liabilities
Deferred tax assets from seven-year amortisation of participations to going concern value were recognised in the amount
of EUR 23,004,000 (EUR 15,477,000). Deferred tax liabilities and deferred tax assets of consolidated taxable entities in the
tax group collected by the same tax authority were netted, resulting in a deferred tax liability of EUR 161,610,000
(EUR 148,358,000). In accordance with IAS 12.39, deferred tax liabilities were not reported for temporary differences from
interests in subsidiaries and associated companies since they would not be reversed in the foreseeable future. The
difference between the book value for tax purposes and the IFRS shareholders' equity is EUR 2,053,406,000
(EUR 2,043,083,000). Deferred taxes for undistributed subsidiary profits of EUR 14,404,000 (EUR 20,146,000) were also
not reported, because a decision to distribute the profits had not yet been made.
EUR 31,149,000 (EUR 29,368,000) in deferred taxes on loss carry-forwards was not recognised.
7. OTHER ASSETS
Composition 31.12.2020
31.12.2019
in EUR '000
Tangible assets
*
and inventories 117,335
128,950
Prepayments for projects 0
58
Other assets 36,905
47,548
Asset-side accruals 233,605
215,355
Total 387,845
391,911
*Amount of reported balance sheet value leased as of 31.12.2020: 7.49% (7.44%)
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
119
NOTES TO THE CONSOLIDATED BALANCE SHEET – LIABILITIES AND SHAREHOLDERS’ EQUITY
8. CONSOLIDATED SHAREHOLDERS’ EQUITY
The
share capital
and
other capital reserves
items include contributions to share capital made by VIG Holding shareholders.
Other capital reserves report the share of contributions paid that is in excess of the share capital. The capital reserves are
reduced by external costs directly related to corporate actions affecting equity after taking tax effects into account.
Retained earnings
are the earnings that subsidiaries have earned since joining VIG Insurance Group. These are reduced by
the dividends distributed by the VIG Holding. Amounts resulting from changes in the scope of consolidation are also
recognised here. If changes are made to accounting policies, the adjustments for earlier periods that are not included in the
financial statements are recognised in the opening balance sheet value of retained earnings for the earliest period presented.
Other reserves
consist of unrealised gains and losses from the measurement of available for sale financial instruments, and
actuarial gains and losses that are recognised in comprehensive income in accordance with IAS 19. Unrealised gains and
losses from the at equity measurement of associated companies, and translation differences resulting from currency
translation for foreign subsidiaries are also reported in other reserves.
Non-controlling interests
are also shown as part of shareholders’ equity. These consist of shares held by third parties in the
equity of consolidated subsidiaries that are not directly or indirectly fully owned by VIG Holding.
Earnings per share
Under IAS 33.10, basic earnings per share are to be calculated by dividing profit or loss attributable to common
shareholders of the parent entity (the numerator) by the weighted average number of common shares outstanding (the
denominator) during the period.
Earnings per share 2020
2019
Result of the period EUR '000 242,668
413,088
Other non-controlling interests in net result of the period EUR '000 -11,155
-13,698
Non-controlling interests in the result of the period of non-profit societies EUR '000 0
-68,113
Result of the period less non-controlling interests EUR '000 231,513
331,277
Number of shares at closing date units 128,000,000
128,000,000
Earnings per share
*
EUR 1.81
2.59
*The undiluted earnings per share equals the diluted earnings per share (in EUR).
Since there were no potential dilution effects in either the current or previous reporting period, the basic earnings per share
equals the diluted earnings per share.
Detailed information on capital management is provided on page 101.
120
Annual Financial Report 2020
Consolidated shareholders’ equity
SHARE CAPITAL AND VOTING RIGHTS
The Company has share capital of EUR 132,887,468.20. It is divided into 128,000,000 no-par value ordinary bearer shares
with voting rights, with each share representing an equal portion of the share capital. The number of shares issued remains
unchanged.
The Managing Board is not aware of any restrictions on voting rights or the transfer of shares. Employees who hold shares
exercise their voting rights without a proxy during General Meetings.
The Managing Board must have at least three and no more than eight members. The Supervisory Board has at least three
and at most ten members (shareholder representatives). Wiener Städtische Versicherungsverein, which directly and
indirectly holds around 72.47% (71.54%) of the share capital, has the right to appoint up to one third of the members of
the Supervisory Board if, and so long as, it holds 50% or less of the Company’s voting shares. General Meeting resolutions
are adopted by a simple majority, unless a different majority is required by law or the articles of association.
No shares have special rights of control. See the section indicated above for information on the rights of the shareholder
Wiener Städtische Versicherungsverein.
As of the balance sheet date, the Company was not party to any material agreements that would come into effect, change
or terminate if control of the Company were to change due to a takeover bid, in particular, no agreements that would affect
participations held in insurance companies. Existing agreements that would come into effect if control of the Company were
to change due to a takeover bid relate to participations held in other (non-insurance) companies.
No compensation agreements exist between the Company and its Managing Board members, Supervisory Board members
or employees covering the case of a public takeover bid.
ANTICIPATORY RESOLUTIONS
The Managing Board is authorised to increase the share capital of the Company by a nominal amount of
EUR 66,443,734.10 by issuing 64,000,000 no-par value bearer or registered shares in one or more tranches on or before
11 May 2022 against cash or in-kind contributions. The terms of the shares, the exclusion of shareholder pre-emption rights,
and other terms and conditions of the share issue are decided by the Managing Board, subject to Supervisory Board
approval. Preferred shares without voting rights may also be issued, with rights equivalent to those of existing preferred
shares. The issue prices of common and preferred shares may differ.
The General Meeting of 12 May 2017 authorised the Managing Board to issue, subject to Supervisory Board approval, one
or more tranches of bearer convertible bonds with a total nominal value of up to EUR 2,000,000,000.00 on or before
11 May 2022, with or without exclusion of shareholder pre-emptive rights, and to grant the holders of convertible bonds
conversion rights for up to 30,000,000 no-par value bearer shares with voting rights in accordance with the convertible
bond terms set by the Managing Board.
The share capital has consequently been raised in accordance with § 159(2) no. 1 of the Austrian Stock Corporation Act
(AktG) by a contingent capital increase of up to EUR 31,145,500.36 through the issue of up to 30,000,000 no-par value
bearer shares with voting rights. The contingent capital increase will only be implemented to the extent that holders of
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
121
convertible bonds issued on the basis of the General Meeting resolution of 12 May 2017 exercise the subscription or
exchange rights they were granted. The Managing Board has not adopted any resolutions to date concerning the issuance
of convertible bonds based on the authorisation granted on 12 May 2017.
The General Meeting of 12 May 2017 further authorised the Managing Board to issue, subject to Supervisory Board
approval, one or more tranches of bearer income bonds with a total nominal value of up to EUR 2,000,000,000.00 on or
before 11 May 2022, with or without exclusion of shareholder pre-emptive rights. The Managing Board has not adopted
any resolutions to date regarding the issuance of income bonds based on this authorisation.
The General Meeting of 24 May 2019 authorised the Managing Board to acquire the Company’s own no-par value bearer
shares in accordance with § 65 (1) nos. 4 and 8 and (1a) and (1b) AktG to the maximum extent permissible by law during
a period of 30 months following the date the General Meeting resolution was adopted. The amount paid upon repurchase
of the Company’s own shares may not be more than a maximum of 50% below, or more than a maximum of 10% above,
the average unweighted stock exchange closing price on the ten stock exchange trading days preceding the repurchase.
The Managing Board may choose to make the purchase on the stock exchange, through a public offer or in any other
legally permissible and expedient manner.
The General Meeting of 24 May 2019 also authorised the Managing Board to use own shares
for issuing shares to employees and senior management of the Company or to employees, senior management
and managing board members of companies affiliated with the Company;
for servicing convertible bonds issued based on the resolution adopted by the General Meeting of 12 May 2017;
for sales in accordance with § 65 (1b) AktG on the stock market or through a public offer. The Managing Board is
also authorised for a period of a maximum of five years after adoption of the resolution to dispose of the acquired
own shares in some other way without or with partial or full exclusion of shareholder pre-emptive rights. The written
report on the reasons for exclusion of shareholder pre-emptive rights was submitted to the General Meeting.
The Managing Board has not made use of these authorisations to date. The Company held none of its own shares on the
balance sheet date.
Payout 2020 for the financial year 2019 Per share
Total
in EUR
Ordinary shares 1.15
147,200,000
Proposed appropriation of profits
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe (VIG Holding) ended financial year 2020 with a net retained
profit of EUR 239,230,814.01. The following appropriation of profits will be proposed in the Annual General Meeting:
The 128 million shares shall receive a dividend of EUR 0.75 per share. The payment date for this dividend will be 27 May
2021, the record date 26 May 2021, and the ex-dividend date 25 May 2021.
A total of EUR 96,000,000.00 will therefore be distributed. The net retained profit of EUR 143,230,814.01 remaining for
financial year 2020 after distribution of the dividend is to be carried forward.
122
Annual Financial Report 2020
9. SUBORDINATED LIABILITIES
Subordinated liabilities of the Group
Issuing company Issue date
Outstanding volume
Maturity
Interest
Fair value
in EUR '000
in years
in %
in
EUR '000
VIG Holding
9.10.2013
500,000
30
1
First 10 years: 5.5%
p.a.; thereafter variable
571,410
VIG Holding
2.3.2015
400,000
31
2
First 11 years: 3.75%
p.a.; thereafter variable
447,552
VIG Holding
13.4.2017
200,000
30
3
First 10 years: 3.75%
p.a.; thereafter variable
222,674
Donau Versicherung 15.4. + 21.5.2004
9,500
unlimited
4
4.95% p.a.
10,940
Donau Versicherung 1.7.1999
1,500
unlimited
5
4.95% p.a.
1,523
Wiener Städtische 1.3.1999
12,000
unlimited
6
4.90% p.a.
13,475
Wiener Städtische 2.7.2001
16,100
unlimited
7
6.10% p.a.
18,428
Wiener Städtische 15.11.2003
19,150
unlimited
8
4.95% p.a.
21,388
Wiener Städtische 30.6.2006
34,700
unlimited
9
4.75% p.a.
38,143
Wiener Städtische 11.5.2017
250,000
10
10
3.50% p.a.
270,235
Kooperativa (Czech Republic) 22.12.2010
20,959
unlimited
11
5.05% p.a.
21,035
Total
1,463,909
1,636,803
1
The right to ordinary and extraordinary cancellation by the holder is excluded. Regular cancellation by the issuer is first allowed effective 9 October 2023.
2
The right to ordinary and extraordinary cancellation by the holder is excluded. Regular cancellation by the issuer is first allowed effective 2 March 2026.
3
The right to ordinary and extraordinary cancellation by the holder is excluded. Regular cancellation by the issuer is first allowed after 10 years.
4
Due to the call, the supplementary capital will be repaid in full in 2025.
5
Due to the call, the supplementary capital will be repaid in full in 2025.
6
This can only be cancelled subject to not less than 5 years’ notice, unless Austrian insurance regulators agree to repayment being made early. Due to cancellations, EUR 3,750,000 will be repaid starting with
2021 and EUR 8,250,000 will be repaid starting with 2025.
7
This can only be cancelled subject to not less than 5 years’ notice, unless Austrian insurance regulators agree to repayment being made early. Due to cancellations, EUR 16,100,000 will be repaid starting
with 2024.
8
This can only be cancelled subject to not less than 5 years’ notice, unless Austrian insurance regulators agree to repayment being made early. Due to cancellations, EUR 19,150,000 will be repaid between
2021 and 2024.
9
This can only be cancelled subject to not less than 5 years' notice, unless Austrian insurance regulators agree to repayment being made early. Due to cancellations, EUR 34,700,000 will be repaid starting
with 2024.
10
The right to ordinary and extraordinary cancellation by the holder is excluded. No provision has been made for regular cancellation by the issuer.
11
Due to the call, the supplementary capital will be repaid in full in 2024.
VIG Holding subordinated liabilities
Interest on supplementary capital bonds is only paid out to the extent that the interest is covered by the company’s national
annual profit. The interest is, however, always included as an expense.
On 9 October 2013 the Company issued a subordinated bond with a total nominal value of EUR 500,000,000.00 and a
term of 30 years. VIG Holding can call the bond in full for the first time on 9 October 2023 and on each following coupon
date. The subordinated bond bears interest at a fixed rate of 5.50% p.a. during the first ten years of its term and variable
interest after that. The subordinate bond satisfies the tier 2 requirements of Solvency II. The bonds are traded on the Vienna
Stock Exchange.
On 2 March 2015 the Company issued a subordinated bond with a total nominal value of EUR 400,000,000.00 and a term
of 31 years. VIG Holding can call the bond in full for the first time on 2 March 2026 and on each following coupon date. The
subordinated bond bears interest at a fixed rate of 3.75% p.a. during the first eleven years of its term and variable interest
after that. The subordinate bond satisfies the tier 2 requirements of Solvency II. The bond is listed on the Luxembourg Stock
Exchange.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
123
The EUR 200,000,000.00 subordinated bond was privately placed with international institutional investors. The subordinat-
ed bond has a term of 30 years and VIG Holding can call it for the first time after ten years. It satisfies the tier 2 requirements
of Solvency II and qualifies as capital based on the requirements of the S&P rating agency. The subordinated bond bears
interest at a fixed rate of 3.75 % p.a. during the first ten years of its term and variable interest after that. Inclusion for trading
in the Third Market of the Vienna Stock Exchange took place on 13 April 2017.
10. UNDERWRITING PROVISIONS – GROSS
Composition 31.12.2020
31.12.2019
in EUR '000
Provision for unearned premiums 1,711,489
1,707,175
Mathematical reserve 22,243,792
22,497,943
Guaranteed policy benefits 20,805,425
21,034,685
Allocated and committed profit shares 687,585
729,776
Deferred mathematical reserve 750,782
733,482
Provision for outstanding claims 6,345,913
5,839,838
Provision for premium refunds 1,871,416
1,792,151
Profit-related premium refunds 317,907
351,412
Profit-unrelated premium-refunds 75,966
71,105
Deferred profit participation recognised through profit and loss
*
400,710
412,373
Deferred profit participation recognised directly in equity
*
1,076,833
957,261
Other underwriting provisions 57,445
48,969
Total 32,230,055
31,886,076
*The deferred profit participation is solely due to the profit-related premium refunds.
10.1. Provision for unearned premiums
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 1,707,175
1,502,697
Exchange rate differences -80,651
-1,329
Book value as of 1.1. 1,626,524
1,501,368
Additions 1,355,349
1,403,136
Amount used/released -1,270,384
-1,278,058
Changes in scope of consolidation 0
80,729
Book value as of 31.12. 1,711,489
1,707,175
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 1,490,466
1,511,601
more than one year up to five years 193,417
168,335
more than five years up to ten years 20,349
20,245
more than ten years 7,257
6,994
Total 1,711,489
1,707,175
124
Annual Financial Report 2020
10.2. Mathematical reserve
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 22,497,943
22,106,049
Exchange rate differences -71,958
17,560
Book value as of 1.1. 22,425,985
22,123,609
Additions 2,353,715
2,316,162
Amount used/released -2,536,377
-1,977,366
Transfer from provisions for premium refunds 469
35,538
Book value as of 31.12. 22,243,792
22,497,943
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 1,828,753
1,892,253
more than one year up to five years 5,493,625
5,489,988
more than five years up to ten years 4,035,723
4,454,134
more than ten years 10,885,691
10,661,568
Total 22,243,792
22,497,943
10.3. Provision for outstanding claims
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 5,839,838
5,439,941
Exchange rate differences -128,728
2,212
Book value as of 1.1. 5,711,110
5,442,153
Changes in scope of consolidation 0
153,507
Additions of provision for outstanding claims 4,571,281
4,729,151
for claims paid occurred in the reporting period 3,948,762
4,188,356
for claims paid occurred in previous periods 622,519
540,795
Use/release of provision -3,936,424
-4,484,590
for claims paid occurred in the reporting period -2,226,119
-1,681,198
for claims paid occurred in previous periods -1,710,305
-2,803,392
Other changes -54
-383
Book value as of 31.12. 6,345,913
5,839,838
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 2,830,510
2,613,910
more than one year up to five years 2,011,015
1,891,060
more than five years up to ten years 832,439
721,052
more than ten years 671,949
613,816
Total 6,345,913
5,839,838
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
125
EUR 119,215,000 (EUR 170,426,000) in recourse claims was deducted from the provision for outstanding claims. A
detailed presentation of the change in gross loss reserve for the property and casualty line of business is provided on
page 99.
10.4. Provision for premium refunds
Development 2020
2019
in EUR '000
Provision for premium refunds
Book value as of 31.12. of the previous year 422,517
424,013
Exchange rate differences -3,260
131
Book value as of 1.1. 419,257
424,144
Additions 54,127
117,766
Amount used/released -79,042
-83,855
Transfer to mathematical reserve -469
-35,538
Book value as of 31.12. 393,873
422,517
Deferred profit participation
Book value as of 31.12. of the previous year 1,369,634
962,184
Book value as of 1.1. 1,369,634
962,184
Unrealised gains and losses on financial assets available for sale 116,017
361,614
Underwriting gains and losses from provisions for employee benefits 3,555
-29,861
Revaluations recognised through profit and loss -11,663
75,697
Book value as of 31.12. 1,477,543
1,369,634
Provision for premium refunds incl. deferred profit participation 1,871,416
1,792,151
Maturity structure for profit-related premium refunds incl. deferred profit participation 31.12.2020
31.12.2019
in EUR '000
up to one year 186,066
161,339
more than one year up to five years 491,776
478,219
more than five years up to ten years 319,750
314,200
more than ten years 797,858
767,288
Total 1,795,450
1,721,046
Maturity structure for profit-unrelated premium refunds 31.12.2020
31.12.2019
in EUR '000
up to one year 59,954
59,725
more than one year up to five years 1,738
1,824
more than five years up to ten years 2,266
1,713
more than ten years 12,008
7,843
Total 75,966
71,105
126
Annual Financial Report 2020
10.5. Other underwriting provisions
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 48,969
71,025
Exchange rate differences -1,197
-509
Book value as of 1.1. 47,772
70,516
Additions 19,276
13,408
Amount used/released -9,603
-34,955
Book value as of 31.12. 57,445
48,969
Other underwriting provisions are primarily a provision for guaranteed interest for the PAC Doverie in Bulgaria and the
provision for cancellations.
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 21,257
14,612
more than one year up to five years 3,713
5,119
more than five years up to ten years 1,454
2,084
more than ten years 31,021
27,154
Total 57,445
48,969
11. UNDERWRITING PROVISIONS FOR UNIT-LINKED AND INDEX-LINKED LIFE INSURANCE
Composition 31.12.2020
31.12.2019
in EUR '000
Unit-linked life insurance 6,349,808
6,240,935
Index-linked life insurance 1,267,408
1,875,064
Total 7,617,216
8,115,999
Development 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 8,115,999
7,609,406
Exchange rate differences -97,029
28,545
Book value as of 1.1. 8,018,970
7,637,951
Additions 932,438
1,364,571
Amount used/released -1,334,192
-886,523
Book value as of 31.12. 7,617,216
8,115,999
Maturity structure 31.12.2020
31.12.2019
in EUR '000
up to one year 584,911
801,276
more than one year up to five years 1,948,796
1,859,532
more than five years up to ten years 1,196,511
1,265,590
more than ten years 3,886,998
4,189,601
Total 7,617,216
8,115,999
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
127
12. NON-UNDERWRITING PROVISIONS
Composition 31.12.2020
31.12.2019
in EUR '000
Provisions for pensions and similar obligations 590,947
611,114
Provision for pension obligations 485,620
506,360
Provision for severance obligations 105,327
104,754
Provisions for other employee benefits 55,072
69,515
Other non-underwriting provisions 230,790
250,930
Total 876,809
931,559
Provision for pension obligations
Development of DBO 2020
2019
in EUR '000
Present value of the obligations (DBO) as of 31.12. of the previous year 920,002
854,166
Exchange rate differences -22
3
Present value of obligations (DBO) as of 1.1. 919,980
854,169
Current service costs 15,979
13,731
Past service costs 5
0
Interest expense 6,808
12,245
Remeasurement -14,318
99,598
Actuarial gain/loss demographic 777
1,174
Actuarial gain/loss financial 242
102,503
Experience adjustment -15,337
-4,079
Settlement payments -2,949
-36
Benefits paid -31,336
-31,399
Changes in scope of consolidation 0
-28,306
Present value of the obligations (DBO) as of 31.12. 894,169
920,002
thereof active personnel 300,181
341,490
thereof DBO retirees 593,988
578,512
Development of plan assets 2020
2019
in EUR '000
Plan assets as of 31.12. of the previous year 413,642
427,954
Plan assets as of 1.1. 413,642
427,954
Interest income 3,060
6,249
Remeasurement 3,114
523
Net return on assets 3,114
523
Contributions 16,110
14,031
Settlement payments -72
0
Benefits paid -27,305
-27,893
Changes in scope of consolidation 0
-7,222
Plan assets as of 31.12. 408,549
413,642
128
Annual Financial Report 2020
Development provision 2020
2019
in EUR '000
Book value as of 31.12. of the previous year 506,360
426,212
Exchange rate differences -22
3
Book value as of 1.1. 506,338
426,215
Current service costs 15,979
13,731
Past service costs 5
0
Interest expense 3,748
5,996
Remeasurement -17,432
99,075
Net return on assets -3,114
-523
Actuarial gain/loss demographic 777
1,174
Actuarial gain/loss financial 242
102,503
Experience adjustment -15,337
-4,079
Contributions -16,110
-14,031
Settlement payments -2,877
-36
Benefits paid -4,031
-3,506
Changes in scope of consolidation 0
-21,084
Book value as of 31.12. 485,620
506,360
ADDITIONAL INFORMATION FOR THE AUSTRIAN COMPANIES
The plan assets consist of the following:
Structure of financial investments in the mathematical reserve for occupational group insurance 31.12.2020
31.12.2019
in %
Wiener Städtische and VIG Holding 100.00
100.00
Fixed-interest securities 95.55
88.33
Loans 1.53
1.57
Bank deposits 1.07
8.26
Shares, supplementary capital, profit participation rights, participation capital 1.86
1.84
Donau Versicherung 100.00
100.00
Fixed-interest securities 85.26
98.06
Bank deposits 14.74
0.00
Shares, supplementary capital, profit participation rights, participation capital 0.00
1.94
The asset allocation of the mathematical reserve for occupational group insurance is structured according to the maturity
of the liabilities. Pension contributions are expected to be EUR 11,476,000 in financial year 2021 (ACTUAL in 2020:
EUR 16,110,000 incl. transfers).
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
129
Pension sensitivity analysis Variation
DBO
Change
in %
in EUR '000
in %
Base parameters 882,290
Interest rate +0.5
815,421
-7.58
-0.5
958,372
8.62
Future salary increases +0.5
892,348
1.14
-0.5
872,729
-1.08
Future pension increases +0.5
945,560
7.17
-0.5
824,977
-6.50
Employee turnover +2.5
839,091
-4.90
-2.5
887,054
0.54
Mortality +5.0
864,746
-1.99
-5.0
899,331
1.93
Parameter variations were calculated. Mortality is increased or decreased proportionally.
Pension cash flow Expected payments
year(s)
in EUR
'000
1 32,901
2 33,803
3 34,107
4 34,151
5 34,318
6–10 171,588
11–15 165,537
16–20 150,392
21–30 237,402
31–40 149,265
41+ 88,619
13. LIABILITIES
Composition 31.12.2020
31.12.2019
in EUR '000
Underwriting 1,083,646
1,108,477
Liabilities from direct business 890,430
836,074
to policyholders 522,515
538,894
to insurance intermediaries 248,045
232,177
to insurance companies 118,362
63,776
arising from financial insurance policies 1,508
1,227
Liabilities from reinsurance business 153,668
208,747
Deposits from ceded reinsurance business 39,548
63,656
Non-underwriting 1,170,660
986,095
Liabilities to financial institutions 325,267
215,418
Other liabilities 845,393
770,677
Total 2,254,306
2,094,572
130
Annual Financial Report 2020
Composition of other liabilities 31.12.2020
31.12.2019
in EUR '000
Tax liabilities (excl. income taxes), levies and fees 90,896
90,154
Liabilities for social security 19,382
19,241
Property management, building contract and property transfer liabilities 16,423
11,137
Personnel-related liabilities 143,992
114,539
Liabilities for unpaid incoming invoices 114,167
109,957
Interest payable for subordinated liabilities 32,452
32,374
Lease liabilities 189,762
199,332
Liabilities from sureties 46,183
36,495
Financing liabilities
*
104,314
75,850
Other liabilities 87,822
81,598
Total 845,393
770,677
*Includes derivative liabilities and other financing liabilities
Maturity structure 31.12.2020 31.12.2019
Underwriting
Non-underwriting
Total
Total
in EUR '000
up to one year 1,030,399
731,756
1,762,155
1,732,461
more than one year up to five years 40,552
236,693
277,245
117,476
more than five years up to ten years 9,263
72,214
81,477
115,930
more than ten years 3,432
129,997
133,429
128,705
Total 1,083,646
1,170,660
2,254,306
2,094,572
14. CONTINGENT LIABILITIES AND RECEIVABLES
Litigation relating to coverage
In their capacity as insurance companies, the Group companies are involved in a number of court proceedings as
defendants or have been threatened with litigation. In addition, there are proceedings, in which the Group companies are
not involved as parties, but may be affected by the outcome of such lawsuits due to agreements with other insurers
concerning participation in claims. In the opinion of the Group, adequate provisions proportionate to the amount in dispute
have been established for all claims in accordance with the law.
Off-balance sheet commitments 31.12.2020
31.12.2019
in EUR
'000
Liabilities and assumed liabilities 750
750
Guarantee bond 13,504
0
The off-balance sheet commitments are primarily related to loans of participations and guarantee bonds creating an
obligation to provide funds.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
131
NOTES TO THE CONSOLIDATED INCOME STATEMENT
15. PREMIUMS WRITTEN – GROSS
Composition 2020
Motor own
damage
insurance
(Casco)
Motor third
party liability
insurance
Other property
and casualty
insurance
Life insurance
– regular
premium
Life insurance
– single
premium
Health
insurance
Total
in EUR '000
Austria 302,792
324,088
1,442,407
1,215,779
293,740
451,901
4,030,707
Czech Republic 244,265
311,892
492,354
630,899
34,685
18,298
1,732,393
Slovakia 105,648
150,282
110,312
168,980
177,187
17,111
729,520
Poland 190,967
297,169
407,732
168,103
106,357
25,908
1,196,236
Romania 180,441
84,061
119,761
48,482
48,235
12,824
493,804
Baltic states 89,221
113,671
129,745
67,660
32,950
59,668
492,915
Hungary 20,964
43,430
59,196
87,406
63,974
12,780
287,750
Bulgaria 61,074
32,962
52,447
29,605
8,043
15,509
199,640
Turkey/Georgia 42,267
45,984
131,531
0
0
31,870
251,652
Remaining CEE 51,732
103,021
117,456
78,836
59,699
28,866
439,610
Other Markets 0
0
133,525
87,526
58,946
0
279,997
Central Functions 0
0
1,682,277
26,009
0
28,236
1,736,522
Consolidation -1,442,292
Total 1,289,371
1,506,560
4,878,743
2,609,285
883,816
702,971
10,428,454
Composition 2019
Motor own
damage
insurance
(Casco)
Motor third
party liability
insurance
Other property
and casualty
insurance
Life insurance
– regular
premium
Life insurance
– single
premium
Health
insurance
Total
in EUR '000
Austria 295,254
319,378
1,384,503
1,238,776
271,928
433,437
3,943,276
Czech Republic 246,636
305,630
498,543
633,737
44,527
16,754
1,745,827
Slovakia 106,251
152,870
110,927
188,411
226,454
13,947
798,860
Poland 193,203
278,425
372,367
174,443
88,650
24,891
1,131,979
Romania 161,828
85,827
114,062
50,189
48,315
8,016
468,237
Baltic states 97,615
129,186
135,206
61,517
22,513
54,247
500,284
Hungary 18,692
46,184
59,932
87,982
58,502
18,228
289,520
Bulgaria 60,637
33,894
50,352
27,910
10,791
40,321
223,905
Turkey/Georgia 45,530
49,329
111,470
0
0
28,573
234,902
Remaining CEE 52,883
106,717
117,949
78,548
61,859
28,954
446,910
Other Markets 0
0
128,891
85,614
165,897
0
380,402
Central Functions 0
0
1,574,685
22,925
0
25,881
1,623,491
Consolidation -1,388,186
Total 1,278,529
1,507,440
4,658,887
2,650,052
999,436
693,249
10,399,407
132
Annual Financial Report 2020
16. FINANCIAL RESULT EXCL. RESULT FROM SHARES IN AT EQUITY CONSOLIDATED COMPANIES
Composition 2020
Austria
Czech
Republic
Slovakia
Poland
Romania
Baltic states
Hungary
in EUR
'000
Current income 685,403
75,914
40,323
23,704
20,957
11,008
3,656
Appreciation 677
4,844
986
4,052
98
1,442
0
thereof reversal in impairment 43
0
0
0
0
0
0
Gains from disposal 103,936
26,201
3,050
14,798
1,514
493
878
Other income 51,115
21,876
1,325
7,486
4,488
144
215
Total income 841,131
128,835
45,684
50,040
27,057
13,087
4,749
Depreciation 103,060
6,214
6,815
2,955
2,838
1,435
240
thereof impairment 57,745
2,280
2,213
1
1,180
0
174
Exchange rate differences -842
709
58
-3,352
-836
22
121
Losses from disposal 5,400
26,718
576
3,350
212
254
199
Interest expenses 55,866
5,555
106
2,941
4,055
957
247
Interest expenses for personnel provisions 3,824
0
0
0
0
0
0
Interest expenses for liabilities to financial
institutions 2,140
0
0
0
0
0
0
Interest expenses for financing liabilities 1,502
0
0
0
0
1
0
Interest expenses for subordinate liabilities 36,104
1,050
0
520
108
769
0
Interest expenses for lease liabilities 1,624
1,156
56
184
53
114
71
Other interest expenses 10,672
3,349
50
2,237
3,894
73
176
Other expenses 141,282
24,791
1,716
8,010
1,802
987
593
Managed portfolio fees 4,437
788
156
2,463
823
0
53
Asset management expenses 53,601
2,917
1,295
4,316
979
800
540
Other expenses 83,244
21,086
265
1,231
0
187
0
Total expenses 304,766
63,987
9,271
13,904
8,071
3,655
1,400
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
133
Composition 2020
Bulgaria
Turkey/Georgia
Remaining
CEE
Other Markets
Central
Functions
Consolidation
Total
in EUR '000
Current income 3,939
10,520
35,864
19,190
88,058
-64,608
953,928
Appreciation 1,420
0
122
50
7,015
0
20,706
thereof reversal in impairment 0
0
19
50
6,934
0
7,046
Gains from disposal 962
21
8,216
347
14,317
0
174,733
Other income 22,542
24
628
499
4,080
0
114,422
Total income 28,863
10,565
44,830
20,086
113,470
-64,608
1,263,789
Depreciation 2,309
77
1,959
1,530
20,628
0
150,060
thereof impairment 51
0
558
1,080
6,915
0
72,197
Exchange rate differences 244
-861
-7,959
8
35,899
-557
22,654
Losses from disposal 320
0
143
229
4,953
0
42,354
Interest expenses 420
1,824
784
148
83,052
-60,897
95,058
Interest expenses for personnel provisions 0
0
0
0
478
0
4,302
Interest expenses for liabilities to financial
institutions 0
0
0
0
3,192
0
5,332
Interest expenses for financing liabilities 139
59
0
0
26,452
-25,848
2,305
Interest expenses for subordinate liabilities 160
0
0
0
50,066
-23,059
65,718
Interest expenses for lease liabilities 42
91
440
0
237
-434
3,634
Other interest expenses 79
1,674
344
148
2,627
-11,556
13,767
Other expenses 13,309
1,157
2,421
969
131,835
0
328,872
Managed portfolio fees 254
0
391
0
0
0
9,365
Asset management expenses 12,947
695
1,373
906
124,857
0
205,226
Other expenses 108
462
657
63
6,978
0
114,281
Total expenses 16,602
2,197
-2,652
2,884
276,367
-61,454
638,998
Information on operating expenses for investment property is provided in Note 2.1. Property on page 105.
134
Annual Financial Report 2020
Composition 2019
Austria
Czech
Republic
Slovakia
Poland
Romania
Baltic states
Hungary
in EUR '000
Current income 743,222
82,399
45,281
26,435
21,082
8,760
4,542
Appreciation 8,464
5,336
739
5,381
315
1,174
0
thereof reversal in impairment 383
0
0
7
0
0
0
Gains from disposal 176,473
15,876
6,284
7,625
1,646
3,753
1,316
Other income 54,411
9,394
1,291
7,642
603
160
1,377
Total income 982,570
113,005
53,595
47,083
23,646
13,847
7,235
Depreciation 57,116
11,221
1,430
2,710
4,752
513
256
thereof impairment 13,979
6,701
0
0
3,075
34
215
Exchange rate differences 59
960
-15
-81
-1,566
-19
146
Losses from disposal 6,268
10,186
159
593
2
65
648
Interest expenses 59,689
8,443
1,134
4,322
5,169
982
205
Interest expenses for personnel provisions 6,613
0
0
0
0
0
0
Interest expenses for liabilities to financial
institutions 1,811
0
0
0
0
0
0
Interest expenses for financing liabilities 1,404
0
0
0
0
0
0
Interest expenses for subordinate liabilities 35,997
1,082
0
526
109
770
0
Interest expenses for lease liabilities 2,006
1,377
92
224
57
162
86
Other interest expenses 11,858
5,984
1,042
3,572
5,003
50
119
Other expenses 120,493
11,432
1,337
8,780
1,792
933
1,115
Managed portfolio fees 4,623
1,815
119
1,806
678
52
416
Asset management expenses 53,815
2,081
1,217
3,936
877
714
699
Other expenses 62,055
7,536
1
3,038
237
167
0
Total expenses 243,625
42,242
4,045
16,324
10,149
2,474
2,370
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
135
Composition 2019
Bulgaria
Turkey/Georgia
Remaining
CEE
Other Markets
Central
Functions
Consolidation
Total
in EUR '000
Current income 3,760
15,421
41,610
19,919
278,602
-74,450
1,216,583
Appreciation 885
0
653
24
11,922
0
34,893
thereof reversal in impairment 0
0
568
24
10,580
0
11,562
Gains from disposal 568
0
3,547
1,216
21,970
0
240,274
Other income 21,213
336
544
482
3,998
0
101,451
Total income 26,426
15,757
46,354
21,641
316,492
-74,450
1,593,201
Depreciation 1,223
104
2,474
3,718
75,202
-92
160,627
thereof impairment 0
0
1,253
534
2,721
0
28,512
Exchange rate differences -48
-284
3,207
46
2,858
126
5,389
Losses from disposal 239
3,648
160
181
6,299
0
28,448
Interest expenses 453
3,281
976
169
101,623
-70,447
115,999
Interest expenses for personnel provisions 0
0
0
0
841
0
7,454
Interest expenses for liabilities to financial
institutions 0
0
0
0
8,539
0
10,350
Interest expenses for financing liabilities 142
65
0
0
37,826
-27,473
11,964
Interest expenses for subordinate liabilities 160
0
0
0
49,934
-23,224
65,354
Interest expenses for lease liabilities 53
98
600
2
1,064
-686
5,135
Other interest expenses 98
3,118
376
167
3,419
-19,064
15,742
Other expenses 12,885
1,135
1,946
926
133,318
-120
295,972
Managed portfolio fees 226
0
412
0
220
0
10,367
Asset management expenses 12,566
1,007
1,102
897
131,902
0
210,813
Other expenses 93
128
432
29
1,196
-120
74,792
Total expenses 14,752
7,884
8,763
5,040
319,300
-70,533
606,435
136
Annual Financial Report 2020
Composition 2020 2019
Income Current
income
Appreciation
Gains from
disposal
Current
income
Appreciation
Gains from
disposal
in EUR '000
Property 103,732
289
2,388
284,323
11,324
15,531
Loans 79,564
68
46,503
95,333
43
1,118
Loans 41,667
68
332
40,586
43
1,020
Reclassified loans 7,276
0
0
8,266
0
41
Bonds classified as loans 30,621
0
46,171
46,481
0
57
Financial assets held to maturity - bonds 68,171
0
0
73,722
0
2
Financial assets reclassified as held to
maturity - bonds 20,570
0
1
27,443
0
0
Financial assets available for sale 629,024
6,689
96,259
651,872
195
214,511
Bonds 553,159
6,689
62,980
574,808
195
51,811
Shares and other participations 32,538
0
15,548
29,102
0
137,242
thereof participations 16,076
542
9,153
1,788
Investment funds 43,327
0
17,731
47,962
0
25,458
Financial assets recognised at fair value
through profit and loss
*
3,549
13,660
29,051
5,648
23,331
7,706
Bonds 2,770
2,614
57
4,356
6,712
289
Shares and other non-fixed-interest
securities 211
1,950
2,306
492
2,323
1,490
Investment funds 494
4,837
1,067
676
4,637
1,270
Derivatives 74
4,259
25,621
124
9,659
4,657
Other investments 19,740
0
531
29,998
0
1,406
Unit-linked and index-linked life insurance 29,578
0
0
48,244
0
0
Total 953,928
20,706
174,733
1,216,583
34,893
240,274
*Including held for trading
EUR 99,442,000 (EUR 105,309,000) for financial assets available for sale was reclassified from shareholders’ equity to the
income statement in the current reporting period.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
137
Composition 2020 2019
Expenses Depreciation
Exchange rate
differences
Losses from
disposal
Depreciation
Exchange rate
differences
Losses from
disposal
in EUR '000
Property 71,914
0
92
128,028
0
2,122
Loans 23
-748
305
3,057
804
611
Loans 23
-325
305
3,057
991
70
Reclassified loans 0
0
0
0
0
541
Bonds classified as loans 0
-423
0
0
-187
0
Financial assets held to maturity - bonds 0
-1,239
4
0
1,168
0
Financial assets reclassified as held to
maturity - bonds 0
-323
0
0
-187
0
Financial assets available for sale 68,501
-4,700
10,997
21,325
39
11,073
Bonds 9,079
-5,880
2,967
0
-523
1,014
Shares and other participations 43,911
15
484
11,310
115
3,803
thereof participations 807
308
5,111
3,767
Investment funds 15,511
1,165
7,546
10,015
447
6,256
Financial assets recognised at fair value
through profit and loss
*
9,622
827
30,567
8,217
837
12,757
Bonds 5,032
-7
417
1,590
-15
172
Shares and other non-fixed-interest
securities 884
9
2,943
1,802
-7
305
Investment funds 3,677
-197
1,624
3,469
-33
383
Derivatives 29
1,022
25,583
1,356
892
11,897
Other investments 0
28,837
389
0
2,728
1,885
Total 150,060
22,654
42,354
160,627
5,389
28,448
*Including held for trading
Interest expenses and other expenses result from items on the liabilities side of the balance sheet or from business
operations and therefore cannot be directly allocated to an investment class.
17. RESULT FROM SHARES IN AT EQUITY CONSOLIDATED COMPANIES
Composition 2020
2019
in EUR '000
Income 490
24,074
Current result 490
24,074
Expenses -29,000
0
Depreciation -29,000
0
thereof impairment -29,000
0
Total -28,510
24,074
138
Annual Financial Report 2020
18. OTHER INCOME AND EXPENSES
Composition 2020
2019
in EUR '000
Other income 145,661
193,203
Underwriting 80,850
117,570
Non-underwriting 64,811
75,633
Other expenses 373,617
444,433
Underwriting 203,588
266,487
Non-underwriting 170,029
177,946
Details of other income 2020
2019
in EUR '000
Other income 145,661
193,203
thereof compensation for services performed 11,650
12,637
thereof release of other provisions 5,056
15,267
thereof fees of all kinds 22,925
40,185
thereof exchange rate gains 50,317
20,584
thereof income related to leases 286
8,415
thereof reversal of allowances for receivables and receipt of payment for written-off receivables 13,216
36,059
thereof commission income 3,300
0
thereof interest not from investments 3,127
0
Details of other expenses 2020
2019
in EUR '000
Other expenses 373,617
444,433
thereof creation of allowances for receivables and receivable write-offs 44,839
59,268
thereof write-downs of insurance portfolio and customer base 33,617
15,034
thereof brokering expenses 1,387
2,198
thereof underwriting taxes 43,342
38,054
thereof exchange rate losses 21,529
19,078
thereof expenses related to leases 31,898
30,473
thereof other contributions and fees 14,381
11,257
thereof expenses for government-imposed contributions 24,055
40,714
thereof impairment of goodwill and trademarks
*
124,437
111,321
*The impairment in the current reporting year concern the CGU group Bulgaria, Croatia, Georgia and Asirom and Seesam trademark. The impairments in the previous year concern the CGU group of Romania
and the Seesam trademark.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
139
19. EXPENSES FOR CLAIMS AND INSURANCE BENEFITS – RETENTION
Composition 2020
2019
in EUR '000
Expenses for claims and insurance benefits – gross 7,688,410
7,764,264
Payments for claims and insurance benefits 7,657,038
7,282,818
Changes in the provision for outstanding claims 633,520
307,945
Change in mathematical reserve -707,301
-208
Change in other underwriting provisions 8,343
-23,798
Expenses for profit-related and profit-unrelated premium refunds 96,810
197,507
Expenses for claims and insurance benefits – reinsurers´ share -657,841
-501,520
Payments for claims and insurance benefits -470,632
-452,658
Changes in the provision for outstanding claims -158,933
-36,265
Change in mathematical reserve 98
3,065
Change in other underwriting provisions -2,002
-745
Expenses for profit-unrelated premium refunds -26,372
-14,917
Expenses for claims and insurance benefits – retention 7,030,569
7,262,744
Payments for claims and insurance benefits 7,186,406
6,830,160
Changes in the provision for outstanding claims 474,587
271,680
Change in mathematical reserve -707,203
2,857
Change in other underwriting provisions 6,341
-24,543
Expenses for profit-related and profit-unrelated premium refunds 70,438
182,590
20. ACQUISITION AND ADMINISTRATIVE EXPENSES
Composition 2020
2019
in EUR '000
Acquisition expenses 2,046,899
2,019,325
Commission expenses
*
1,426,524
1,411,039
Pro rata personnel expenses 370,464
356,741
Pro rata material expenses 249,911
251,545
Administrative expenses 446,504
436,257
Pro rata personnel expenses 213,450
217,655
Pro rata material expenses 233,054
218,602
Reinsurance commissions -164,924
-162,356
Total 2,328,479
2,293,226
*Includes commissions of EUR 1,324,483,000 (EUR 1,315,958,000) for direct insurance business
140
Annual Financial Report 2020
21. TAXES
Composition 2020
2019
in EUR '000
Actual taxes 201,011
114,404
from the current period 233,519
108,062
from previous periods -32,508
6,342
Deferred taxes -97,817
-5,923
Change of deferred taxes in the current year -103,928
23,180
Deferred taxes due to temporary differences relating to other periods 8,108
-32,572
Deferred taxes due to loss carry forwards relating to other periods -1,997
3,469
Total 103,194
108,481
Reconciliation 2020
2019
in E
UR '000
Expected tax rate in % 25.0%
25.0%
Result before taxes 345,862
521,569
Expected tax expenses 86,466
130,392
Adjusted for tax effects due to:
Different local tax rate -24,352
-23,144
Change of tax rates 1,483
354
Non-deductible expenses 111,835
84,629
Income not subject to tax -76,579
-82,906
Taxes from previous years -26,397
-22,760
Non-recognition/reduction of deferred tax assets due to temporary differences 2,803
-260
Non-recognition/reduction of deferred tax assets due to loss carry forwards 8,703
6,986
Effects due to group taxation/profit transfers -4,063
5,452
Tax effects due to deferred profit participation 16,997
2,647
Others 6,298
7,091
Effective tax expenses 103,194
108,481
Effective tax rate in % 29.8%
20.8%
The income tax rate of the parent company VIG Holding is used as the Group tax rate.
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ADDITIONAL DISCLOSURES
22. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT HIERARCHY
Information on the nature and extent of risks arising from financial instruments is provided in the section titled “Financial
instruments and risk management“ on page 79.
Fair values and book values of financial instruments and investments
Fair values and book values of financial instruments and investments 31.12.2020
Book value
Level 1
Level 2
Level 3
Fair value
in EUR '000
Property 2,507,413
0
63,132
4,127,729
4,190,861
Owner-occupied property 477,469
0
27,210
769,443
796,653
Investment property 2,029,944
0
35,922
3,358,286
3,394,208
Shares in at equity consolidated companies 291,561
Loans 2,566,884
162,320
2,615,357
102,552
2,880,229
Loans 1,647,782
76,214
1,610,950
85,860
1,773,024
Reclassified loans 136,308
59,988
97,855
5,000
162,843
Bonds classified as loans 782,794
26,118
906,552
11,692
944,362
Other financial assets 28,685,004
23,919,022
4,424,592
734,347
29,077,961
Financial assets held to maturity 2,163,435
1,924,912
544,108
10,825
2,479,845
Financial assets reclassified as held to maturity 293,003
352,601
16,949
0
369,550
Financial assets available for sale 25,983,431
21,517,902
3,806,396
659,133
25,983,431
Financial assets recognised at fair value through profit and loss
*
245,135
123,607
57,139
64,389
245,135
Other investments 850,324
850,324
Financial investments for unit-linked and index-linked life insurance 7,968,039
7,968,039
7,968,039
Subordinated liabilities 1,463,909
1,615,767
21,036
1,636,803
Liabilities to financial institutions 325,267
325,267
*Including held for trading
Fair values and book values of financial instruments and investments 31.12.2019
Book value
Level 1
Level 2
Level 3
Fair value
in EUR '000
Property 2,414,258
0
62,027
3,801,084
3,863,111
Owner-occupied property 488,701
0
25,815
771,602
797,417
Investment property excl. RoU-asset for building-rights 1,925,557
0
36,212
3,029,482
3,065,694
Shares in at equity consolidated companies 321,276
Loans 2,416,108
157,229
2,504,730
60,170
2,722,129
Loans 1,461,846
0
1,520,534
49,716
1,570,250
Reclassified loans 139,584
61,764
108,264
0
170,028
Bonds classified as loans 814,678
95,465
875,932
10,454
981,851
Other financial assets 28,244,801
23,908,755
3,947,383
745,954
28,602,092
Financial assets held to maturity 2,195,001
2,065,196
384,538
22,623
2,472,357
Financial assets reclassified as held to maturity 568,700
631,230
17,405
0
648,635
Financial assets available for sale 25,148,103
21,011,483
3,476,413
660,207
25,148,103
Financial assets recognised at fair value through profit and loss
*
332,997
200,846
69,027
63,124
332,997
Other investments 1,059,297
1,059,297
Financial investments for unit-linked and index-linked life insurance 8,620,327
8,620,327
8,620,327
Subordinated liabilities 1,464,597
0
1,663,318
21,317
1,684,635
Liabilities to financial institutions 215,418
215,418
*Including held for trading
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Annual Financial Report 2020
Property (fair values) 31.12.2020
31.12.2019
in EUR '000
Owner-occupied property 796,653
797,417
evaluated by an independent expert 310,809
301,833
evaluated by an internal expert 485,844
495,584
Investment property 3,394,208
3,065,694
evaluated by an independent expert
*
810,888
916,420
evaluated by an internal expert 2,583,320
2,149,274
*This corresponds to 23.89% (29.89%) of the fair value of investment property.
Measurement process
The measurement process aims to determine the fair value of financial assets using price quotations that are publicly
available in active markets or valuations based on recognised economic models using observable inputs. If public price
quotations and observable market data are not available for an investment, the investment is generally measured using
valuation reports prepared by appraisers (e.g. expert reports). The organisational units responsible for appraisal of
investments are independent of the units that assume the risk exposure of the investments, thereby ensuring separation of
functions and responsibilities.
As a rule, the aim is to use the same price within VIG Insurance Group to value a particular security on each valuation date.
In practice, however, situations occur when the cost of process compliance would be inappropriate. For example, the local
provisions in some countries (in which VIG Insurance Group operates) require the insurance companies there to use prices
on the local stock exchange to value certain investments. In this case, if the same security is held by other companies in
VIG Insurance Group, these companies might use another price source for valuation.
Institutional funds are another example where uniform valuation can only be achieved at an inordinately high cost. The
Austrian companies hold varying amounts of institutional funds that are required under the IFRS to be included in the
consolidated financial statements. However, the valuation logic of an institutional fund requires the fund value (NAV) on a
particular date to be calculated using the (in general, closing) prices on the previous day. In this case, a security that is both
held in an institutional fund and directly held will be valued using different prices.
The following items are measured at fair value:
• Financial assets available for sale,
• Financial assets recognised at fair value through profit and loss (incl. held for trading),
• Derivative financial instruments (assets/liabilities), and
• Financial instruments for unit-linked and index-linked life insurance.
Balance sheet items that are not reported at fair value are subject to a non-recurring measurement at fair value. These items
are measured at fair value when events occur that indicate that the book value might no longer be recoverable (impairment).
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The following items are not reported at fair value:
• Financial assets held to maturity,
• Shares in at equity consolidated companies,
• Property (owner-occupied and investment property),
• Loans, and
• Receivables.
REAL ESTATE VALUATION
The following valuation methods are used to calculate the fair value of property in VIG Insurance Group:
• capitalised earnings method,
• discounted cash flow method and
• asset value method (only for property and to determine maintenance expenses).
Each time valuation is performed, the methods are verified which allow the fair value of a property to be calculated.
VIG Insurance Group mainly uses the capitalised earnings method. In rare cases, the asset value method or discounted
cash flow method is also used, provided it can be used to determine the highest and best use value for the property type.
Capitalised earnings method
In this method, the value of a property is determined by using an appropriate interest rate to capitalise expected or received
future gross profits over the expected useful life. The net operating income is calculated by deducting actual operating,
maintenance and administrative expenses (management expenses). An allowance for lost rental income and any liquidation
proceeds and costs are also taken into account. The rate used to calculate capitalised earnings is based on the achievable
return on investment. Net operating income minus the return on the land is capitalised at this rate over the remaining useful
life to calculate the capitalised earnings value of the physical facilities. This is added to the land value to calculate the total
capitalised earnings value of the property. The method for calculating land value is described in more detail under the asset
value method.
Discounted cash flow method
The discounted cash flow method is a valuation method that discounts cash flows during the forecast phase (phase I) back
to the valuation date. Discounting is performed using a rate for a comparable risky investment with property- and market-
specific premiums. The gross profit for the year plus vacancy rental (at current market rent) minus non-allocable manage-
ment costs equals the net operating income for the year. The method allows precise analysis of the individual years of the
initial forecast phase so that investments and vacancies can be assigned to individual years and accounted for in advance.
In phase II, the proceeds from a fictitious disposal at the end of the forecast phase (max. 10 years) are calculated by
capitalising future cash flows. The rate used for this calculation is the rate for a comparably risky investment plus market-
and property-specific premiums, less the expected increase in value.
Asset value method
The asset value method is comprised of the land value, building value, the value of outdoor facilities and the value of existing
annexes and represents a market-oriented method. This method is, as a rule, used to determine the value of undeveloped
property.
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Annual Financial Report 2020
Land value is generally calculated using the residual value method, with a premium or discount for overuse/underuse applied
since 2018 instead of a development discount. A simplified usable area study or an estimate of development possibilities
based on developments in the vicinity is used to determine whether overuse or underuse exists. This calculation is used in
both the capitalised earnings method and asset value method.
OTHER DISCLOSURES ABOUT THE VALUATION PROCESS
The use of different pricing models and assumptions can lead to differing results for fair value. Changes in the estimates
and assumptions used to determine the fair value of assets in cases where no market price quotations are available may
necessitate a write-up or write-down of the book value of the assets in question and recognition of the corresponding
income or expense in the income statement.
Certain investments whose fair value is normally not measured repeatedly are measured a single time at fair value when
events or changes in circumstances indicate that the book value might no longer be recoverable. If financial assets are
measured at fair value when impairment is recognised or fair value minus selling costs is used as a measurement basis in
accordance with IFRS 5, a disclosure to this effect is included in Note 16. Financial result excl. result from shares in at equity
consolidated companies starting on page 132 or Note 18. Other income and expenses on page 138.
Reclassification of financial instruments
The companies in VIG Insurance Group regularly review the validity of the last fair value classification performed on each
valuation date. A reclassification is performed, for example, if needed inputs are no longer directly observable in the market.
Reclassifications between Level 1 and 2 primarily occur if liquidity, trading frequency or trading activity of the particular
financial instrument once again, or no longer allows one to conclude that an active market exists. For example, the market
maker for a security changes frequently, with corresponding changes on liquidity. A similar example is when shares are
included in (or removed from) an index that acts as a benchmark for many funds. The classification can also change in this
case. As a result of the decentralised organisation of VIG Insurance Group, the classifications are generally reviewed by the
local companies at the end of the period. Any reclassifications are presented as if they had taken place at the end of the
period.
Sensitivities
With respect to the value of shares measured using a Level 3 method (multiples approach), VIG Insurance Group assumes
that alternative inputs and alternative methods do not lead to significant changes in value.
The spread assumption is the critical factor for the changes in value of Level 3 measured bonds in the “Financial instruments
available for sale” category and the sensitivity to this factor is of particular interest as a result. Due to the COVID-19 crisis,
the spreads have increased up to 120 basis points compared to the measurement for 31 December 2019.
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The most important bonds measured using a level 3 method in the “Financial instruments available for sale” category are
held by the Austrian, Czech and Polish companies and show the following sensitivities:
Financial assets available for sale – loans Fair Value
in EUR '000
Fair value at 31.12.2020 292,349
Spread +50bp -3,558
Effect on the statement of comprehensive income -3,558
The following sensitivities result from calculations using the Solvency II partial internal model:
Property Fair Value
in EUR '000
Fair value at 31.12.2020 3,799,023
Rental income -5% 3,662,118
Rental income +5% 3,942,403
Capitalisation rate -50bp 4,039,238
Capitalisation rate +50bp 3,600,033
Land prices -5% 3,766,835
Land prices +5% 3,838,594
Since property is measured at cost, negative sensitivities would only affect profit or loss if property value fell below book
value. Other comprehensive income was therefore unaffected.
Measurement hierarchy – financial instruments measured at fair value
Measurement hierarchy 31.12.2020 31.12.2019
Financial instruments recognised at fair value Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
in EUR '000
Financial assets
Financial assets available for sale 21,517,902
3,806,396
659,133
21,011,483
3,476,413
660,207
Bonds 18,893,447
3,709,909
292,349
18,569,199
3,387,820
343,422
Shares and other participations 372,249
3,636
296,400
391,778
4,507
269,732
Investment funds 2,252,206
92,851
70,384
2,050,506
84,086
47,053
Financial investments for
unit- and index-linked life insurance 7,968,039
8,620,327
The unrealised effect on the result (net profit or loss) from level 3 financial instruments that are still in the portfolio and whose
fair value is recognised in profit or loss was EUR -625,000 during the reporting year (EUR 2,864,000).
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Unobservable input factors
Asset class Measurement methods Unobservable input factors Range
Property Market value Capitalisation rate 0.88%–7.50%
Rental income EUR 3,000–EUR 3,765,000
Land prices EUR 0–EUR 8,000
Discounted Cash flow Capitalisation rate 3.55%–8.11%
Rental income EUR 96,000–EUR 6,275,000
Building rights Capitalisation rate 3.0%–4.0%
Rental income EUR 76,000–EUR 1,652,000
Land prices EUR 250–EUR 500
Construction interest actually paid 0.2%–5.7%
Financial assets available for sale Present value method Spreads -0.09%–4.13%
Reconciliation of financial instruments
Development 2020 2019
Financial assets available for sale Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
in EUR '000
Fair value at 31.12 of the previous year 21,011,483
3,476,413
660,207
19,451,543
3,396,763
633,387
Exchange rate differences -102,154
-5,287
-3,879
-3,260
1,707
44
Fair value at 1.1. 20,909,329
3,471,126
656,328
19,448,283
3,398,470
633,431
Reclassification between securities categories 0
0
-6
-5,646
0
0
Reclassification to Level 36,688
135,265
44,850
14,698
56,361
7,855
Reclassification from Level -130,840
-56,090
-29,873
-46,430
-15,374
-17,110
Additions 2,751,042
518,759
96,976
2,947,006
282,522
194,825
Disposals -2,327,967
-320,465
-65,481
-2,456,288
-343,821
-47,992
Changes in scope of consolidation 0
0
-42,324
135,562
0
-104,344
Changes in value recognised in profit and loss 6,689
0
0
195
0
0
Changes recognised directly in equity 332,084
58,483
7,358
986,115
98,422
2,688
Impairments -59,123
-682
-8,695
-12,012
-167
-9,146
Fair value at 31.12. 21,517,902
3,806,396
659,133
21,011,483
3,476,413
660,207
For information on the effects of changes in value recognised in profit or loss, please refer to Note 16. Financial result excl.
result from shares in at equity consolidated companies on page 132.
Development of financial liabilities assigned to Level 3 Subordinated liabilities
2020
2019
in EUR '000
Fair value at 31.12 of the previous year 21,317
21,119
Exchange rate differences -674
262
Fair value at 1.1. 20,643
21,381
Reclassification to Level 3 0
0
Reclassification from Level 3 0
0
Changes in value recognised in profit and loss 393
-64
Changes recognised directly in equity 0
0
Fair value at 31.12. 21,036
21,317
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23. NUMBER OF EMPLOYEES AND PERSONNEL EXPENSES
Number of employees 2020
2019
Number
Field staff 13,450
13,667
Office staff 12,230
12,069
Total 25,680
25,736
The employee figures shown are average values based on full-time equivalents.
Personnel expenses 2020
2019
in EUR '000
Wages and salaries 594,092
593,731
Expenses for severance benefits and payments to company pension plans 7,908
7,686
Expenses for retirement provisions 13,690
27,565
Mandatory social security contributions and expenses 162,082
160,533
Other social security expenses 21,108
21,883
Total 798,880
811,398
thereof field staff 361,418
351,328
thereof office staff 437,462
460,070
Supervisory board and managing board remuneration (gross) 2020
2019
in EUR '000
Remuneration paid to Supervisory Board members 578
506
Total payments to former members of the Managing Board or their survivors 1,149
790
Provision for future pension and severance obligations of Managing Board members 3,546
3,288
Provision for other future long-term claims of Managing Board members 5,772
4,957
Remuneration paid to active Managing Board members 6,279
5,480
Total 17,324
15,021
Remuneration for Managing Board members
Managing Board remuneration takes into account the importance of the Group and the responsibility that goes with it, the
economic situation of the Company, and the appropriateness of the remuneration in the market environment.
The variable portion of the remuneration emphasises the need for sustainability and achieving it fully depends critically on
an analysis of the sustainable performance of the Company that extends beyond a single reporting year.
The performance-related remuneration is limited. The maximum performance-related remuneration that the Managing
Board can receive by achieving the traditional targets in financial year 2020 is around 30% to around 40% of total
remuneration. Special bonus remuneration can also be earned for appropriate target achievement, and remuneration for
overachievement in certain target areas. In total, the members of the Managing Board can earn variable remuneration equal
to a maximum of around 45% to 50% of their total remuneration in this way.
Large parts of performance-related remuneration are only paid after a delay. The delay for financial year 2020 extends to
2024. The deferred portions are awarded based on the sustainable performance of the Group.
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Annual Financial Report 2020
The Managing Board is not entitled to performance-related remuneration if performance fails to meet certain thresholds.
Even if the targets are fully met in a given financial year, because of the focus on sustainability, the full variable remuneration
is only awarded if the Group also achieves sustainable performance in the three following years.
Managing Board remuneration does not include stock options or similar instruments.
Members of the Company’s Managing Board who are active as of 31 December 2019 are entitled to funded defined benefit
pensions – based, among other things, on the length of service in VIG Insurance Group – equal to a maximum of 40% of
the measurement base if they remain in the Managing Board until age 65. The measurement base is equal to their standard
fixed remuneration. This pension amount can be increased in individual cases if work continues past the maximum pension
age, since a pension is not drawn during this period.
Starting as of 1 January 2020, newly appointed members of the Managing Board can be granted entitlements to defined
benefit pensions (alternatively entitlements to defined contribution pensions). As a rule, entitlements require at least one
reappointment, and are granted in stages, so that the maximum entitlement of 40% of fixed remuneration cannot be
reached until age 65 after at least 10 years of service as a member of the Managing Board. If a member of the Managing
Board has previously served in other positions in the Group for at least 5 years, an entitlement can already be granted at
the beginning of the term of office.
Pensions are normally received (regardless of the initial appointment date) only if a Managing Board member’s position is
not extended and the member is not at fault for the lack of extension, or the Managing Board Member retires due to illness
or age.
The provisions of the Austrian Employee and Employment Provisions Act (Mitarbeiter- und Selbstständigen-Vorsorgegesetz)
(“new severance”) apply to the contracts of the Managing Board members.
Only the contracts for Managing Board members who have been active in the Group for a long time provide for a severance
payment structured in accordance with the provisions of the Austrian Employee Act (Angestelltengesetz), in the version
prior to 2003, in combination with applicable industry-specific provisions. This allows these Managing Board Members to
receive a severance payment equal to two to twelve months’ remuneration, depending on the period of service, with a
supplement of 50% if the member retires or leaves after a long-term illness. A Managing Board Member who leaves by their
own choice, without agreement with the Company, before retirement is possible, or leaves due to their own fault, is not
entitled to severance payment.
Managing Board Members are provided with a company car for both business and personal use. The members of the
Managing Board received EUR 6,279,000 (EUR 5,480,000) from the Company during the reporting period for their services.
The members of the Managing Board received EUR 719,000 (EUR 556,000) from subsidiaries during the reporting period.
Former members of the Managing Board received EUR 1,149,000 (EUR 790,000).
The Managing Board had eight members until 30 June 2020 and seven members starting 1 July 2020.
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24. AUDITING FEES AND AUDITING SERVICES
Composition 2020
2019
in EUR '000
Audit of consolidated financial statements 251
251
Audit of parent company financial statements 56
56
Other audit services 392
369
Tax advisory fees 21
119
Fees for auditrelated services 479
664
Total 1,199
1,459
25. BODIES OF THE COMPANY
Supervisory Board
Chairman Günter Geyer
1st Deputy Chairman Rudolf Ertl
2nd Deputy Chairwoman/Chairman Maria Kubitschek (until 25 September 2020)
Georg Riedl (since 5 October 2020)
Members Martina Dobringer
Gerhard Fabisch
Peter Mihók
Heinz Öhler
Georg Riedl (until 4 October 2020)
Gabriele Semmelrock-Werzer
Katarina Slezáková (since 25 September 2020)
Gertrude Tumpel-Gugerell
Managing Board
Chairwoman Elisabeth Stadler
Members Franz Fuchs (until 30 June 2020)
Liane Hirner
Peter Höfinger
Gerhard Lahner
Gábor Lehel
Hartwig Löger (since 1 January 2021)
Harald Riener
Peter Thirring
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Annual Financial Report 2020
26. AFFILIATED COMPANIES AND PARTICIPATIONS
Company name, registered office Country of domicile
Equity interest
2020
1)
Equity interest
2019
1)
Equity 2020
2)
Equity 2019
2)
in %
in %
in EUR '000
in EUR '000
Fully consolidated companies
"BULSTRAD LIFE VIENNA INSURANCE GROUP" JOINT STOCK COMPANY,
Sofia
Bulgaria
100.00
100.00
30,111
23,405
"Compensa Vienna Insurance Group", ADB, Vilnius Lithuania 100.00
100.00
88,220
34,892
"Grüner Baum" Errichtungs- und Verwaltungsges.m.b.H., Vienna Austria 100.00
100.00
39,953
39,949
Anděl Investment Praha s.r.o., Prague Czech Republic 100.00
100.00
23,498
27,237
Anif-Residenz GmbH & Co KG, Vienna Austria 100.00
100.00
14,901
14,868
arithmetica Consulting GmbH, Vienna Austria 100.00
100.00
358
-13
Asigurarea Românească - ASIROM Vienna Insurance Group S.A.,
Bucharest
Romania
99.72
99.70
85,031
86,455
ATBIH GmbH, Vienna Austria 100.00
100.00
182,488
161,487
BCR Asigurări de Viaţă Vienna Insurance Group S.A., Bucharest Romania 93.98
93.98
47,537
48,037
Blizzard Real Sp. z o.o., Warsaw Poland 100.00
100.00
2,925
5,143
BTA Baltic Insurance Company AAS, Riga Latvia 100.00
90.83
71,897
65,536
Bulgarski Imoti Asistans EOOD, Sofia Bulgaria 100.00
100.00
-543
-571
Businesspark Brunn Entwicklungs GmbH, Vienna Austria 100.00
100.00
34,433
33,936
CAL ICAL "Globus", Kiev Ukraine 100.00
100.00
0
4,447
Camelot Informatik und Consulting Gesellschaft m.b.H., Vienna Austria 95.00
95.00
1,202
1,093
CAPITOL, akciová spoločnosť, Bratislava Slovakia 100.00
100.00
1,242
1,220
CENTER Hotelbetriebs GmbH, Vienna Austria 80.00
80.00
-1,042
-442
Central Point Insurance IT-Solutions GmbH, Vienna Austria 100.00
100.00
-24,296
16,900
Česká podnikatelská pojišťovna, a.s., Vienna Insurance Group, Prague Czech Republic 100.00
100.00
129,748
106,337
Compania de Asigurări "DONARIS VIENNA INSURANCE GROUP" Societate
pe Actiuni, Chișinău
Moldova
99.99
99.99
4,837
4,829
Compensa Life Vienna Insurance Group SE, Tallinn Estonia 100.00
100.00
51,483
45,259
Compensa Towarzystwo Ubezpieczeń Na Życie S.A. Vienna Insurance
Group, Warsaw
Poland
99.97
99.97
72,226
71,350
Compensa Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group,
Warsaw
Poland
99.94
99.94
140,163
118,251
CP Solutions a.s., Prague Czech Republic 100.00
100.00
12,027
12,247
DBLV Immobesitz GmbH, Vienna Austria 100.00
100.00
27
26
DBLV Immobesitz GmbH & Co KG, Vienna Austria 100.00
100.00
3,075
2,337
DBR-Liegenschaften GmbH & Co KG, Stuttgart Germany 100.00
100.00
9,674
9,174
DBR-Liegenschaften Verwaltungs GmbH, Stuttgart Germany 100.00
100.00
19
20
Deutschmeisterplatz 2 Objektverwaltung GmbH, Vienna Austria 100.00
100.00
3,043
3,015
Donau Brokerline Versicherungs-Service GmbH, Vienna Austria 100.00
100.00
95,792
95,082
DONAU Versicherung AG Vienna Insurance Group, Vienna Austria 100.00
100.00
104,360
100,454
DVIB alpha GmbH, Vienna Austria 100.00
100.00
8,377
8,298
DVIB GmbH, Vienna Austria 100.00
100.00
94,041
93,709
DV Immoholding GmbH, Vienna Austria 100.00
100.00
8,315
8,319
ELVP Beteiligungen GmbH, Vienna Austria 100.00
100.00
23,322
23,318
Floridsdorf am Spitz 4 Immobilienverwertungs GmbH, Vienna Austria 100.00
100.00
18,672
18,708
Gesundheitspark Wien-Oberlaa Gesellschaft m.b.H., Vienna Austria 100.00
100.00
29,826
30,231
Global Assistance Baltic SIA, Riga Latvia 100.00
300
Insurance Company Nova Ins EAD, Sofia Bulgaria 100.00
100.00
5,110
5,090
Insurance Company Vienna osiguranje d.d., Vienna Insurance Group,
Sarajevo
Bosnia-Herzegovina
100.00
100.00
9,921
9,670
INSURANCE JOINT-STOCK COMPANY "BULSTRAD VIENNA INSURANCE
GROUP", Sofia
Bulgaria
100.00
100.00
59,540
50,732
InterRisk Lebensversicherungs-AG Vienna Insurance Group,
Wiesbaden
Germany
100.00
100.00
23,518
23,518
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
151
Company name, registered office Country of domicile
Equity interest
2020
1)
Equity interest
2019
1)
Equity 2020
2)
Equity 2019
2)
InterRisk Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group,
Warsaw
Poland
100.00
100.00
112,131
100,159
InterRisk Versicherungs-AG Vienna Insurance Group, Wiesbaden Germany 100.00
100.00
53,770
54,270
INTERSIG VIENNA INSURANCE GROUP Sh.A., Tirana Albania 89.98
89.98
6,085
5,447
Joint Stock Company Insurance Company GPI Holding, Tbilisi Georgia 90.00
90.00
12,291
14,632
Joint Stock Company International Insurance Company IRAO, Tbilisi Georgia 100.00
100.00
3,640
4,289
Joint Stock Insurance Company WINNER-Vienna Insurance Group,
Skopje
North Macedonia
100.00
100.00
7,138
6,605
Kaiserstraße 113 GmbH, Vienna Austria 100.00
100.00
2,637
2,536
KÁLVIN TOWER Ingatlanfejlesztési és Beruházási Korlátolt Felelősségű
Társaság, Budapest
Hungary
100.00
100.00
2,499
2,738
KAPITOL, a.s., Brno Czech Republic 100.00
100.00
2,318
3,828
KOMUNÁLNA poisťovňa, a.s. Vienna Insurance Group, Bratislava Slovakia 100.00
100.00
76,662
70,097
KOOPERATIVA poisťovňa, a.s. Vienna Insurance Group, Bratislava Slovakia 98.47
98.47
408,100
372,351
Kooperativa pojišťovna, a.s., Vienna Insurance Group, Prague Czech Republic 97.28
97.28
754,598
773,635
LD Vermögensverwaltung GmbH, Vienna Austria 100.00
100.00
74
73
Limited Liability Company "UIG Consulting", Kiev Ukraine 100.00
100.00
2,005
7,352
LVP Holding GmbH, Vienna Austria 100.00
100.00
591,192
654,028
MAP-WSV Beteiligungen GmbH, Vienna Austria 100.00
100.00
220,778
187,153
MC EINS Investment GmbH, Vienna Austria 100.00
100.00
19,096
17,873
MH 54 Immobilienanlage GmbH, Vienna Austria 100.00
100.00
26,402
26,431
Nußdorfer Straße 90-92 Projektentwicklung GmbH & Co KG, Vienna Austria 100.00
100.00
39,213
38,882
OMNIASIG VIENNA INSURANCE GROUP S.A., Bucharest Romania 99.54
99.50
149,566
135,599
Palais Hansen Immobilienentwicklung GmbH, Vienna Austria 56.55
56.55
17,200
18,764
Passat Real Sp. z o.o., Warsaw Poland 100.00
100.00
-1,390
-241
Pension Assurance Company Doverie AD, Sofia Bulgaria 92.58
92.58
29,183
27,582
PFG Holding GmbH, Vienna Austria 89.23
89.23
77,316
124,315
PFG Liegenschaftsbewirtschaftungs GmbH & Co KG, Vienna Austria 92.88
92.88
7,446
17,042
Porzellangasse 4 Liegenschaftsverwaltung GmbH & Co KG, Vienna Austria 100.00
100.00
13,005
12,009
PRIVATE JOINT-STOCK COMPANY "INSURANCE COMPANY "KNIAZHA
LIFE VIENNA INSURANCE GROUP", Kiev
Ukraine
99.81
97.80
2,743
2,251
Private Joint-Stock Company "Insurance company" Ukrainian insurance
group", Kiev
Ukraine
100.00
100.00
17,594
20,657
PRIVATE JOINT-STOCK COMPANY "UKRAINIAN INSURANCE COMPANY
"KNIAZHA VIENNA INSURANCE GROUP", Kiev
Ukraine
99.99
99.99
8,481
7,940
PROGRESS Beteiligungsges.m.b.H., Vienna Austria 70.00
70.00
17,973
18,659
Projektbau GesmbH, Vienna Austria 100.00
100.00
15,358
15,553
Projektbau Holding GmbH, Vienna Austria 90.00
90.00
14,186
7,988
Rathstraße 8 Liegenschaftsverwertungs GmbH, Vienna Austria 100.00
100.00
1,498
1,401
Ray Sigorta A.Ş., Istanbul Turkey 94.96
94.96
37,079
39,219
Schulring 21 Bürohaus Errichtungs- und Vermietungs GmbH & Co KG,
Vienna
Austria
100.00
100.00
7,736
7,736
SECURIA majetkovosprávna a podielová s.r.o., Bratislava Slovakia 100.00
100.00
7,160
7,198
Senioren Residenz Fultererpark Errichtungs- und Verwaltungs GmbH,
Vienna
Austria
100.00
100.00
-6,409
-6,171
Senioren Residenz Veldidenapark Errichtungs- und Verwaltungs GmbH,
Innsbruck
Austria
66.70
66.70
8,268
8,430
SIA “Alauksta 13/15”, Riga Latvia 100.00
3
SIA “Artilērijas 35”, Riga Latvia 100.00
3
SIA “Ģertrūdes 121”, Riga Latvia 100.00
3
SIA "Urban Space", Riga Latvia 100.00
100.00
456
470
Sigma Interalbanian Vienna Insurance Group Sh.a, Tirana Albania 89.05
89.05
14,918
13,481
SMARDAN 5 DEVELOPMENT S.R.L., Bucharest Romania 100.00
-8
Stock Company for Insurance and Reinsurance MAKEDONIJA Skopje -
Vienna Insurance Group, Skopje
North Macedonia
94.26
94.26
25,925
25,624
SVZ GmbH, Vienna Austria 100.00
100.00
162,664
161,771
152
Annual Financial Report 2020
Company name, registered office Country of domicile
Equity interest
2020
1)
Equity interest
2019
1)
Equity 2020
2)
Equity 2019
2)
SVZD GmbH, Vienna Austria 100.00
100.00
60,408
63,081
SVZI GmbH, Vienna Austria 100.00
100.00
158,700
157,019
T 125 GmbH, Vienna Austria 100.00
100.00
8,875
9,210
TBI BULGARIA EAD in liquidation, Sofia Bulgaria 100.00
100.00
40,437
40,501
TECHBASE Science Park Vienna GmbH, Vienna Austria 100.00
100.00
18,033
18,125
twinformatics GmbH, Vienna Austria 100.00
100.00
2,546
1,957
UNION Vienna Insurance Group Biztosító Zrt., Budapest Hungary 98.64
98.64
50,254
53,484
Untere Donaulände 40 GmbH & Co KG, Vienna Austria 100.00
100.00
11,341
11,254
Vienibas Gatve Investments OÜ, Tallinn Estonia 100.00
100.00
-102
-109
Vienibas Gatve Properties SIA, Riga Latvia 100.00
100.00
1,631
1,602
Vienna-Life Lebensversicherung AG Vienna Insurance Group, Bendern Liechtenstein 100.00
100.00
9,163
8,684
Vienna Life Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance
Group, Warsaw
Poland
100.00
100.00
4,167
3,575
VIG-AT Beteiligungen GmbH, Vienna Austria 100.00
100.00
314,222
333,751
VIG-CZ Real Estate GmbH, Vienna Austria 100.00
100.00
140,059
140,026
VIG FUND, a.s., Prague (Consolidated Financial Statements)
3
Czech Republic 100.00
100.00
194,236
196,827
VIG Home, s.r.o., Bratislava Slovakia 100.00
8,006
V.I.G. ND, a.s., Prague Czech Republic 100.00
100.00
90,566
93,792
VIG Offices 1, s.r.o., Bratislava Slovakia 100.00
100.00
30,121
30,332
VIG Properties Bulgaria AD, Sofia Bulgaria 99.97
99.97
3,746
3,880
VIG RE zajišťovna, a.s., Prague Czech Republic 100.00
100.00
180,831
178,936
VIG REAL ESTATE DOO, Belgrade Serbia 100.00
100.00
10,462
10,626
VIG Services Ukraine, LLC, Kiev Ukraine 100.00
100.00
1,461
39
VITEC Vienna Information Technology Consulting GmbH, Vienna Austria 51.00
51.00
504
589
WGPV Holding GmbH, Vienna Austria 100.00
100.00
107,980
108,441
WIBG Holding GmbH & Co KG, Vienna Austria 100.00
100.00
78,898
77,212
WIBG Projektentwicklungs GmbH & Co KG, Vienna Austria 100.00
100.00
79,044
76,635
Wiener Osiguranje Vienna Insurance Group ad, Banja Luka Bosnia-Herzegovina 100.00
100.00
9,088
9,330
Wiener osiguranje Vienna Insurance Group dioničko društvo za
osiguranje, Zagreb
Croatia
97.82
97.82
107,483
113,778
"WIENER RE" akcionarsko društvo za reosiguranje, Belgrade Serbia 100.00
100.00
7,569
7,139
WIENER STÄDTISCHE OSIGURANJE akcionarsko drustvo za osiguranje,
Belgrade
Serbia
100.00
100.00
62,421
62,819
WIENER STÄDTISCHE VERSICHERUNG AG Vienna Insurance Group,
Vienna
Austria
97.75
97.75
545,874
539,292
Wiener TU S.A. Vienna Insurance Group, Warsaw Poland 100.00
100.00
44,171
35,240
WIENER VEREIN BESTATTUNGS- UND VERSICHERUNGSSERVICE-
GESELLSCHAFT M.B.H., Vienna
Austria
100.00
100.00
1,896
1,245
WILA GmbH, Vienna Austria 100.00
100.00
15,790
8,794
WINO GmbH, Vienna Austria 100.00
100.00
18,300
14,244
WNH Liegenschaftsbesitz GmbH, Vienna Austria 100.00
100.00
4,969
4,383
WSBV Beteiligungsverwaltung GmbH & Co KG, Vienna Austria 100.00
100.00
11,294
9,453
WSV Beta Immoholding GmbH, Vienna Austria 100.00
100.00
45,987
41,300
WSVA Liegenschaftbesitz GmbH, Vienna Austria 100.00
100.00
10,468
10,358
WSVB Liegenschaftbesitz GmbH, Vienna Austria 100.00
100.00
29,150
28,894
WSVC Liegenschaftbesitz GmbH, Vienna Austria 100.00
16,298
WSV Immoholding GmbH, Vienna Austria 100.00
100.00
399,183
356,423
WSV Triesterstraße 91 Besitz GmbH & Co KG, Vienna Austria 100.00
100.00
79,710
78,023
WSV Vermögensverwaltung GmbH, Vienna Austria 100.00
100.00
4,568
4,412
WWG Beteiligungen GmbH, Vienna Austria 87.07
87.07
91,785
88,606
1
The share in equity equals the share in voting rights before non-controlling interests.
2
The capital value shown corresponds to the latest local annual financial statements available.
3
In addition to the parent company, the consolidated financial statements of VIG FUND, a.s., Prague, also include the following companies: Atrium Tower Sp.z.o.o, Warsaw, EUROPEUM Business Center s.r.o,
Bratislava, HUN BM Korlátolt Felelősségű Társaság, Budapest, KKB Real Estate SIA, Riga and SK BM s.r.o., Bratislava.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
153
Company name, registered office Country of domicile
Equity interest
2020
1)
Equity interest
2019
1)
Equity 2020
2)
Equity 2019
2)
in %
in %
in
EUR '000
in EUR '000
At equity consolidated companies
"Schwarzatal" Gemeinnützige Wohnungs- und
Siedlungsanlagen-GmbH, Vienna
Austria
100.00
100.00
158,289
149,695
AB Modřice, a.s., Prague Czech Republic 100.00
100.00
374
388
AIS Servis, s.r.o., Brno Czech Republic 100.00
100.00
2,384
2,418
Alpenländische Gemeinnützige WohnbauGmbH, Innsbruck Austria 94.84
94.84
212,947
198,680
Beteiligungs- und Immobilien GmbH, Linz Austria 25.00
25.00
18,651
18,642
Beteiligungs- und Wohnungsanlagen GmbH, Linz Austria 25.00
25.00
133,673
211,593
Bohemia Servis Finance a.s., Žatec Czech Republic 100.00
357
Bohemika HYPO s.r.o., Žatec Czech Republic 100.00
-1
ČPP servis, s.r.o., Prague Czech Republic 100.00
100.00
1,581
115
CROWN-WSF spol. s.r.o., Prague Czech Republic 30.00
30.00
8,224
9,451
EGW Erste gemeinnützige Wohnungsgesellschaft mbH, Vienna Austria 99.77
99.77
289,207
300,881
ERSTE d.o.o. - za upravljanje obveznim i dobrovljnim
mirovinskim fondovima, Zagreb
Croatia
25.30
25.30
14,470
14,414
FinServis Plus, s.r.o., Prague Czech Republic 100.00
100.00
81
24
Gemeinnützige Industrie-Wohnungsaktiengesellschaft,
Leonding
Austria
55.00
55.00
317,753
302,072
Gemeinnützige Mürz-Ybbs Siedlungsanlagen-GmbH,
Kapfenberg
Austria
99.92
99.92
142,197
134,869
Gewista-Werbegesellschaft m.b.H., Vienna Austria 33.00
33.00
104,366
105,637
GLOBAL ASSISTANCE, a.s., Prague Czech Republic 100.00
100.00
5,408
5,600
Global Expert, s.r.o., Pardubice Czech Republic 100.00
100.00
461
430
Global Partner ČR, a.s., Prague Czech Republic 65.00
76
HOTELY SRNÍ, a.s., Prague Czech Republic 100.00
100.00
12,971
13,498
Main Point Karlín II., a.s., Prague Czech Republic 100.00
100.00
1,497
367
NEUE HEIMAT Oberösterreich Gemeinnützige Wohnungs- und
SiedlungsgesmbH, Linz
Austria
99.82
99.82
198,070
183,568
Neuland gemeinnützige Wohnbau-Gesellschaft m.b.H., Vienna Austria 61.00
61.00
108,101
107,674
Pražská softwarová s.r.o., Prague Czech Republic 100.00
100.00
124
73
Österreichisches Verkehrsbüro Aktiengesellschaft, Vienna
(Consolidated Financial Statements)
Austria
36.58
36.58
40,607
84,423
S - budovy, a.s., Prague Czech Republic 100.00
100.00
2,895
2,989
Sanatorium Astoria, a.s., Karlsbad Czech Republic 100.00
100.00
4,295
5,103
SOZIALBAU gemeinnützige Wohnungsaktiengesellschaft,
Vienna
Austria
54.17
54.17
337,194
329,640
SURPMO, a.s., Prague Czech Republic 100.00
100.00
782
628
Towarzystwo Ubezpieczeń Wzajemnych „TUW", Warsaw Poland 52.16
52.16
62,278
62,204
Urbanbau Gemeinnützige Bau-, Wohnungs- und
Stadterneuerungsgesellschaft m.b.H., Vienna
Austria
51.46
51.46
137,346
131,588
VBV - Betriebliche Altersvorsorge AG, Vienna
(Consolidated Financial Statements)
Austria
25.32
23.71
260,233
254,506
1
The share in equity equals the share in voting rights before non-controlling interests.
2
The capital value shown corresponds to the latest local annual financial statements available.
154
Annual Financial Report 2020
Company name, registered office Country of domicile Equity interest 2020
1)
in %
Non-consolidated companies
" Assistance Company " Ukrainian Assistance Service" LLC, Kiev Ukraine 100.00
"Eisenhof" Gemeinnützige Wohnungsgesellschaft m.b.H., Vienna Austria 20.13
"JAHORINA AUTO" d.o.o., Banja Luka Bosnia-Herzegovina 100.00
"Neue Heimat" Stadterneuerungsgesellschaft m.b.H., Linz Austria 79.51
Akcionarsko družstvo za životno osiguranje Wiener Städtische Podgorica, Vienna Insurance Group, Podgorica Montenegro (Rep.) 100.00
ALBA Services GmbH, Vienna Austria 48.87
Amadi GmbH, Wiesbaden Germany 100.00
AQUILA Hausmanagement GmbH, Vienna Austria 97.75
AREALIS Liegenschaftsmanagement GmbH, Vienna Austria 48.87
Autosig SRL, Bucharest Romania 99.54
B&A Insurance Consulting s.r.o., Moravská Ostrava Czech Republic 48.45
BEESAFE SPÓŁKA Z OGRANICZONA ODPOWIEDZIALNOSCIA, Warsaw Poland 99.99
Benefia Ubezpieczenia Spolka z ograniczona odpowiedzialnoscia, Warsaw Poland 99.94
Brunn N68 Sanierungs GmbH, Vienna Austria 48.87
Bulstrad Trudova Meditzina EOOD, Sofia Bulgaria 100.00
CAPITOL CONSULTANCY SERVICES S.R.L., Bucharest Romania 99.15
CAPITOL INTERMEDIAR DE PRODUSE DE LEASING S.R.L., Bucharest Romania 99.15
CARPLUS Versicherungsvermittlungsagentur GmbH, Vienna Austria 97.75
CLAIM EXPERT SERVICES S.R.L., Bucharest Romania 99.15
Compensa Dystrybucja Sp. z o. o., Warsaw Poland 99.98
DELOIS s. r. o., Bratislava Slovakia 98.47
DV Asset Management EAD, Sofia Bulgaria 100.00
DV CONSULTING EOOD, Sofia Bulgaria 100.00
DV Invest EAD, Sofia Bulgaria 100.00
DVS Donau-Versicherung Vermittlungs- und Service-Gesellschaft m.b.H., Vienna Austria 100.00
EBS Wohnungsgesellschaft mbH Linz, Linz Austria 24.44
EBV-Leasing Gesellschaft m.b.H., Vienna Austria 47.90
EGW Datenverarbeitungs-Gesellschaft m.b.H., Vienna Austria 71.92
EGW Liegenschaftsverwertungs GmbH, Vienna Austria 71.92
EGW-NOE Erste gemeinnützige Wohnungsgesellschaft mbH, Wiener Neustadt Austria 71.92
ERSTE Biztosítási Alkusz Kft, Budapest Hungary 98.64
European Insurance & Reinsurance Brokers Ltd., London United Kingdom 100.00
EXPERTA Schadenregulierungs-Gesellschaft mbH, Vienna Austria 99.44
Finanzpartner GmbH, Vienna Austria 48.87
Foreign limited liability company "InterInvestUchastie", Minsk Belarus 100.00
GELUP GmbH, Vienna Austria 32.58
GGVier Projekt-GmbH, Vienna Austria 53.76
Glamas Beteiligungsverwaltungs GmbH & Co "Beta" KG, Vienna Austria 28.51
Global Assistance Polska Sp.z.o.o., Warsaw Poland 99.99
GLOBAL ASSISTANCE SERVICES s.r.o., Prague Czech Republic 100.00
GLOBAL ASSISTANCE SERVICES SRL, Bucharest Romania 99.21
GLOBAL ASSISTANCE SLOVAKIA s.r.o., Bratislava Slovakia 99.22
Global Services Bulgaria JSC, Sofia Bulgaria 100.00
Hausservice Objektbewirtschaftungs GmbH, Vienna Austria 20.72
Hotel Voltino in Liquidation, Zagreb Croatia 97.82
HORIZONT Personal-, Team- und Organisationsentwicklung GmbH, Vienna Austria 98.29
Immodat GmbH, Vienna Austria 20.72
IMOVE Immobilienverwertung- und -verwaltungs GmbH, Vienna Austria 20.72
INSHIFT GmbH & Co. KG, Köln Germany 23.53
InterRisk Informatik GmbH, Wiesbaden Germany 100.00
ITIS Sp.z.o.o., Warsaw Poland 49.01
Joint Stock Company "Curatio", Tbilisi Georgia 90.00
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
155
Company name, registered office Country of domicile Equity interest 2020
1)
Joint Stock Insurance Company WINNER LIFE - Vienna Insurance Group, Skopje North Macedonia 100.00
Kitzbüheler Bestattung WV GmbH, Kitzbühel Austria 97.75
KUPALA Belarusian-Austrian Closed Joint Stock Insurance Company, Minsk Belarus 98.26
KWC Campus Errichtungsgesellschaft m.b.H., Klagenfurt Austria 48.87
Lead Equities II. Auslandsbeteiligungs AG, Vienna Austria 21.59
Lead Equities II.Private Equity Mittelstandsfinanzierungs AG, Vienna Austria 21.59
LiSciV Muthgasse GmbH & Co KG, Vienna Austria 28.51
Money & More Pénzügyi Tanácsadó Zártkörűen Működő Részvéntársaság, Budapest Hungary 98.64
PFG Liegenschaftsbewirtschaftungs GmbH, Vienna Austria 73.69
POLISA - ŻYCIE Ubezpieczenia Sp.z.o.o., Warsaw Poland 99.97
Privat Joint-stock company "OWN SERVICE", Kiev Ukraine 100.00
Projektbau Planung Projektmanagement Bauleitung GesmbH, Vienna Austria 54.51
Renaissance Hotel Realbesitz GmbH, Vienna Austria 40.00
Risk Consult Bulgaria EOOD, Sofia Bulgaria 51.00
Risk Consult Polska Sp.z.o.o., Warsaw Poland 68.15
RISK CONSULT Sicherheits- und Risiko- Managementberatung Gesellschaft m.b.H., Vienna Austria 51.00
Risk Expert Risk ve Hasar Danismanlik Hizmetleri Limited Sirketi, Istanbul Turkey 64.19
Risk Experts Risiko Engineering GmbH, Vienna Austria 12.24
Risk Experts s.r.o., Bratislava Slovakia 51.00
Risk Logics Risikoberatung GmbH, Vienna Austria 51.00
Rößlergasse Bauteil Drei GmbH, Vienna Austria 100.00
Rößlergasse Bauteil Zwei GmbH, Vienna Austria 97.75
samavu s.r.o, Bratislava Slovakia 98.47
SB Liegenschaftsverwertungs GmbH, Vienna Austria 40.26
S.C. CLUB A.RO S.R.L., Bucharest Romania 99.72
S.C. Risk Consult & Engineering Romania S.R.L., Bucharest Romania 51.00
S.C. SOCIETATEA TRAINING IN ASIGURARI S.R.L., Bucharest Romania 99.15
serviceline contact center dienstleistungs-GmbH, Vienna Austria 97.75
S.O.S.- EXPERT d.o.o. za poslovanje nekretninama, Zagreb Croatia 100.00
Senioren Residenzen gemeinnützige Betriebsgesellschaft mbH, Vienna Austria 97.75
Slovexperta, s.r.o., Žilina Slovakia 98.70
Soleta Beteiligungsverwaltungs GmbH, Vienna Austria 28.51
Sparkassen-Versicherungsservice Gesellschaft m.b.H., Vienna Austria 97.75
Spółdzielnia Usługowa VIG EKSPERT W WARSZAWIE, Warsaw Poland 99.97
TAUROS Capital Investment GmbH & Co KG, Vienna Austria 19.55
TAUROS Capital Management GmbH, Vienna Austria 24.93
TBI Info OOD, Sofia Bulgaria 20.00
TGMZ TGMZ Team Gesund Medizin Zentren GmbH, Vienna Austria 39.10
TOGETHER GmbH, Vienna Austria 24.71
twinfaktor GmbH, Vienna Austria 74.16
UAB "Compensa Life Distribution", Vilnius Lithuania 100.00
UNION-Erted Ellatasszervezö Korlatold Felelössegü Tarsasag, Budapest Hungary 89.69
Versicherungsbüro Dr. Ignaz Fiala Gesellschaft m.b.H., Vienna Austria 47.90
Vienna Insurance Group Polska Spółka z organiczoną odpowiedzialnością, Warsaw Poland 99.99
Vienna International Underwriters GmbH, Vienna Austria 100.00
viesure innovation center GmbH, Vienna Austria 98.87
VIG Asset Management, a.s., Prague Czech Republic 100.00
VIG AM Services GmbH, Vienna Austria 100.00
VIG Management Service SRL, Bucharest Romania 99.15
VIG Offices, s.r.o., Bratislava Slovakia 98.47
VIG POLSKA REAL ESTATE SPÓŁKA Z OGRANICZONA ODPOWIEDZIALNOSCIA, Warsaw Poland 99.97
VIG Services Bulgaria EOOD, Sofia Bulgaria 100.00
VIG Services Shqiperi Sh.p.K., Tirana Albania 89.52
VIG ZP, s. r. o., Bratislava Slovakia 99.22
156
Annual Financial Report 2020
Company name, registered office Country of domicile Equity interest 2020
1)
VIG/C-QUADRAT TOWARZYSTWO FUNDUSZY INVESTYCYJNYCH SPÓŁKA AKCYJNA, Warsaw Poland 39.99
VIVECA Beteiligungen GmbH, Vienna Austria 100.00
VÖB Direkt Versicherungsagentur GmbH, Graz Austria 48.87
WAG Wohnungsanlagen Gesellschaft m.b.H., Linz Austria 24.44
Wien 3420 Aspern Development AG, Vienna Austria 23.92
Wiener Städtische Donau Leasing GmbH, Vienna Austria 97.75
Wiener Verein Bestattungsbetriebe GmbH, Kramsach Austria 97.75
WOFIN Wohnungsfinanzierungs GmbH, Vienna Austria 20.72
WSBV Beteiligungsverwaltung GmbH, Vienna Austria 97.75
1
The share in equity equals the share in voting rights before non-controlling interests.
Merged companies Country of domicile Mererger date Absorbing company
"Compensa Services" SIA, Riga Latvia 1.7.2020 "Compensa Vienna Insurance Group", ADB, Vilnius
AB "Compensa Services", Vilnius Lithuania 1.7.2020 "Compensa Vienna Insurance Group", ADB, Vilnius
Seesam Insurance AS, Tallinn Estonia 1.7.2020 "Compensa Vienna Insurance Group", ADB, Vilnius
Please see the section titled “Scope and methods of consolidation“ starting on page 68 for information on changes in the
scope of consolidation.
The information required under § 265(2) no. 4 of the Austrian Corporation Code (UGB) is provided in the overview of partici-
pations in the separate financial statements.
27. RELATED PARTIES
Related parties
Related parties are the affiliated companies, joint ventures and associated companies listed in Note 26. Affiliated companies
and participations starting on page 150. In addition, the members of the Managing Board and Supervisory Board
of VIG Holding also qualify as related parties. Wiener Städtische Versicherungsverein directly and indirectly holds around
72.47% (around 71.54%), and therefore a majority of the voting rights of VIG Holding. Based on this controlling interest, it
and the members of its managing board and supervisory board are therefore also related parties.
Remuneration for Supervisory Board and Managing Board members and notes on the remuneration plan for Managing
Board members are provided in Note 23. Number of employees and personnel expenses starting on page 147.
Members of the Managing Board and Supervisory Board did not receive any advances or loans and had no loans
outstanding during the reporting periods. There were also no guarantees outstanding for members of the Managing Board
or Supervisory Board during the reporting periods.
Transactions with related companies
Transactions with non-consolidated affiliated and associated companies mainly relate to financing and charges for services.
Transactions with Wiener Städtische Versicherungsverein
Wiener Städtische Versicherungsverein is VIG Holding’s principal shareholder. It has the legal form of a mutual insurance
association that has spun off its insurance operations under the Austrian Insurance Supervision Act (VAG) and consequently
has no insurance business operations. Due to the outsourcing to Wiener Städtische Versicherung AG that took place at
that time, its only responsibilities are those as a majority shareholder of VIG Holding, so that intercompany charges within
VIG Insurance Group are of minor importance. They are based on service agreements between VIG Insurance Group and
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
157
Wiener Städtische Versicherungsverein for intercompany charges for internal audit services, finance and accounting,
provision of staff and office leases based on the arm’s length principle.
Open items with related companies 31.12.2020
31.12.2019
in EUR '000
Loans 163,279
156,210
Associated companies 101,375
95,057
Subsidiaries not included in the consolidated financial statements 61,904
61,153
Receivables 227,592
211,134
Parent company 208,982
195,433
Associated companies 5,012
3,931
Subsidiaries not included in the consolidated financial statements 13,598
11,770
Liabilities 272,252
230,544
Parent company 255,508
206,347
Associated companies 1,989
2,548
Subsidiaries not included in the consolidated financial statements 14,755
21,649
Transactions with related companies 2020
2019
in EUR '000
Loans 19,447
21,233
Associated companies 11,131
14,660
Subsidiaries not included in the consolidated financial statements 8,316
6,573
Receivables 71,281
70,372
Parent company 45,414
26,344
Associated companies 9,307
3,410
Subsidiaries not included in the consolidated financial statements 16,560
40,618
Liabilities 225,298
183,006
Parent company 55,127
21,623
Associated companies 47,254
47,167
Subsidiaries not included in the consolidated financial statements 122,917
114,216
The transactions do not include changes in open items resulting from a change in the scope of consolidation.
Open items with related persons 31.12.2020
31.12.2019
in EUR '000
Loans 0
12
Receivables 126
32
Liabilities 81
118
Transactions with related parties 2020
2019
in EUR '000
Loans 12
0
Receivables 505
153
Liabilities 1,494
1,228
The related party items in the income statement do not exceed EUR 2,000,000 and primarily consist of Payments to
Supervisory Board members.
158
Annual Financial Report 2020
28. LEASES
The interest expenses for leases recognised in the reporting period are shown in Note 16. Financial result excl. result from
shares in at equity consolidated companies starting on page 132.
28.1. Lessee
The significant cash outflows for leases from lessees amount to a total of EUR 48,800,000 (EUR 53,515,000).
28.2. Lessor – operating leases
Maturity analysis of undiscounted lease payments 31.12.2020
31.12.2019
in EUR '000
up to one year 107,547
106,710
one to two years 102,266
99,447
two to three years 94,751
94,176
three to four years 88,510
86,529
four to five years 81,078
79,302
more than five years 2,088,127
2,209,319
Total 2,562,279
2,675,483
Lease income 2020
2019
in EUR '000
Fixed lease income 107,714
249,266
Lease income of variable lease payments 16,836
45,589
Total 124,550
294,855
29. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
Vienna Insurance Group plans to issue a senior sustainability bond and strengthen its capital structure
Based on the current interest rate situation and long-term capital planning of the Group, the Managing Board has initiated
measures to issue a senior sustainability bond, with a focus on increasing investments in socially and environmentally
sustainable projects.
Depending on market conditions, the senior sustainability bond will be issued in the 1
st
half of 2021 with a volume of
EUR 500 million. The structuring and issue date have not yet been finalised. The details of the issue and the sustainability
bond framework, incl. a second party opinion from an independent rating agency, will be published during the course of
the issue.
Given its existing debt capacity and the current favourable environment, a subordinated bond with a volume of
EUR 300 million was also placed as a restricted tier 1 instrument with the principal shareholder of Vienna Insurance Group,
Wiener Städtische Versicherungsverein.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
159
ADDITIONAL DISCLOSURES IN ACCORDANCE WITH THE AUSTRIAN INSURANCE SUPERVISION ACT (VAG)
PROFIT PARTICIPATION IN AUSTRIA
Life insurance
Under the FMA regulation of 6 October 2015 on profit participation in the life insurance sector (LV-GBV), the expenses for
profit-related premium refunds and policyholder profit participation plus any direct credits must be at least 85% of the
measurement basis. The measurement basis within the meaning of § 4(1) LV-GBV is calculated as follows for life insurance
policies eligible for profit participation:
Measurement basis 2020
2019
in EUR '000
Net earned premiums – retention 817,649
854,768
Income and expenses from investments and interest expenses 309,369
417,847
Expenses for claims and insurance benefits – retention -974,159
-1,053,896
Acquisition and administrative expenses -130,053
-134,268
Other underwriting and non-underwriting income and expenses 3,362
-2,295
Taxes on income 934
1,489
Total 27,102
83,645
Health insurance
According to § 1 of the FMA regulation on profit participation in the health insurance sector (KV-GBV) of 15 October 2015,
the regulation is applicable to policies whose actuarial bases were submitted after 30 June 2007 and whose terms provide
for profit participation. The expenses for profit-related premium refunds plus any direct credits have to be at least 85% of
the measurement basis for the health insurance policies concerned. The measurement basis within the meaning of § 3(1)
KV-GBV is calculated as follows for health insurance policies eligible for profit participation:
Measurement basis 2020
2019
in EUR '
000
Net earned premiums – retention 8,482
8,320
Income and expenses from investments and interest expenses 806
830
Expenses for claims and insurance benefits – retention -8,583
-7,577
Acquisition and administrative expenses -1,026
-990
Other underwriting and non-underwriting income and expenses 19
-27
Taxes on income -97
-478
Total -399
78
160
Annual Financial Report 2020
PREMIUMS PER BALANCE SHEET UNIT (INCL. CONSOLIDATION EFFECTS)
Property and Casualty insurance
Premiums written – gross 2020
2019
in EUR '000
Direct business 6,033,384
5,881,023
Casualty insurance 432,980
429,607
Health insurance 120,115
121,712
Motor own damage insurance (Casco) 1,289,371
1,278,529
Rail vehicle own-damage 3,333
3,288
Aircraft own-damage insurance 6,070
6,258
Sea, lake and river shipping own-damage insurance 13,079
13,685
Transport insurance 56,919
54,875
Fire and natural hazards insurance 1,136,903
1,077,116
Other property 617,018
551,566
Third party liability insurance for self-propelled land vehicles 1,506,560
1,507,440
Carrier insurance 23,734
22,460
Aircraft liability insurance 5,926
6,690
Sea, lake and river shipping liability insurance 3,942
4,037
General liability insurance 516,297
489,710
Credit insurance 4,255
2,251
Guarantee insurance 48,264
48,719
Insurance for miscellaneous financial losses 105,297
99,380
Legal expenses insurance 61,377
60,680
Assistance insurance, travel health insurance 81,944
103,020
Indirect business 361,477
334,464
Marine, aviation and transport insurance 15,900
14,122
Other insurance 317,099
294,461
Health insurance 28,478
25,881
Total 6,394,861
6,215,487
A portion of the net earned premiums of EUR 0,000 (EUR 802,000) from indirect property and casualty insurance business
was deferred one year before being recognised in the income statement.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
161
Life insurance
Premiums written – gross 2020
2019
in
EUR '000
Regular premium - direct business 2,575,974
2,625,257
Single-premium - direct business 880,005
993,954
Direct business 3,455,979
3,619,211
thereof policies with profit participation 1,402,808
1,504,455
thereof policies without profit participation 473,434
456,643
thereof unit-linked life insurance portfolio 1,560,736
1,618,067
thereof index-linked life insurance portfolio 19,001
40,046
Indirect business 23,752
23,311
Total 3,479,731
3,642,522
Financial instruments for unit-linked and index-linked life insurance are shown in the respective separate financial statements.
Of the EUR 384,000 (EUR 456,000) in net earned premiums from indirect life insurance business, EUR 345,000 (EUR 343,000)
was deferred for one year before being shown in the income statement.
Health insurance
Premiums written – gross 2020
2019
in EUR '000
Direct business 553,862
541,398
KEY FIGURES PER BALANCE SHEET UNIT
2020 2019
Property/
Casualty
Life
Health
Total
Property/
Casualty
Life
Health
Total
in %
Cost ratio 32.18
18.59
16.27
26.25
31.68
19.78
15.48
26.21
Claims ratio 62.84
63.69
Combined ratio 95.02
95.37
162
Annual Financial Report 2020
Transparency and stakeholder trust are important to us.
Observance of and compliance with the provisions of the
Austrian Code of Corporate Governance therefore play an
important role.
The Austrian Code of Corporate Governance was intro-
duced in 2002 and is regularly updated according to
legislation and current trends. It is the standard for proper
corporate governance and control in Austria. Provisions of
the Code contribute to strengthening the trust in the
Austrian capital market. The report that companies are
required to publish on compliance with these provisions
requires a high level of transparency.
VIG Holding is committed to application and compliance
with the January 2021 version of the Austrian Code of Cor-
porate Governance. § 243c UGB and § 267b UGB (Con-
solidated Corporate Governance Report) were also applied
when preparing this report.
The Austrian Code of Corporate Governance is available
to the public both on the VIG Insurance Group website
at www.vig.com/ir and the website of the Austrian Working
Group for Corporate Governance at www.corporate-
governance.at.
VIG Holding sees corporate governance as a continuously
changing process that responds to new conditions and
current trends for the benefit of the insurance group as well
as for its stakeholders. The goal of all corporate governance
measures is to ensure responsible corporate management
aimed at long-term growth while simultaneously maintaining
effective corporate control.
The Managing Board, Supervisory Board and employees
consider observance of and compliance with the rules of
the Austrian Code of Corporate Governance to be highly
important for the practical implementation of corporate
governance. All information on the members, procedures
and remuneration of the Managing Board and Supervisory
Board are clearly organised and presented below.
The rules of the Austrian Code of Corporate Governance
are divided into the following three categories:
• Rules based on mandatory legal requirements (“Legal
Requirement”)
• Rules that must be observed. Non-compliance with
these rules must be declared and explained in order to
comply with the Code (“Comply or Explain”)
• Non-compliance with rules which are merely recom-
mendations do not need to be disclosed or explained
(“Recommendation”)
All of the rules of the Austrian Code of Corporate Gover-
nance were observed.
The Group’s scope of consolidation also includes capital
market-oriented subsidiaries that are required by the legal
systems applicable to them to prepare and publish corporate
governance reports. These include: Ray Sigorta (Turkey) and
Makedonija Osiguruvanje (North Macedonia). The corporate
governance reports can be accessed through their respective
company websites: www.raysigorta.com.tr (About > Investor
Relations), www.insumak.mk (website link: https://www.insu-
mak.mk/about-us/financial-reports/?lang=en as an integral
part of the annual report). Reference is made to the
information in this regard.
The shareholder structure is available at www.vig.com/
shareholder-structure.
MEMBERS OF THE MANAGING BOARD AND THEIR
RESPONSIBILITIES
The VIG Holding Managing Board had the following seven
members as of 31 December 2020:
• Elisabeth Stadler (General Manager, Chairwoman of the
Managing Board)
• Liane Hirner
• Peter Höfinger
• Gerhard Lahner
• Gábor Lehel
• Harald Riener
• Peter Thirring
Corporate governance report
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
163
Changes during and after the end of the financial year:
Hartwig Löger was appointed to the VIG Holding Managing Board starting 1 January 2021.
Deputy General Manager Franz Fuchs left his position on the Managing Board at the end of his term of office on 30 June
2020.
Further information on the members of the Managing Board, including their employment history, is presented below.
Elisabeth Stadler
General Manager (CEO),
Chairwoman of the Managing Board
Year of birth: 1961
Date first
appointed: 1 January 2016
End of current term of office:
30
June 2023
Elisabeth Stadler
studied actuarial mathematics at the Vienna Technical University and
began her career in the Austrian insurance industry as a Managing Board Member and
Chairwoman. In May 2014, she was awarded the professional title of professor by Federal
Minister Gabriele Heinisch-Hosek for her merits for the insurance industry. She held the
position of General Manager at Donau Versicherung from September 2014 to March 2016,
and has been CEO of VIG Holding since 2016.
Areas of responsibility:
Management of the VIG Group, Strategy, General Secretariat and
Legal, Corporate Social Responsibility, Affiliated companies department, European Affairs,
Group Communications & Marketing, Group Sponsoring, Bancassurance and international
partnerships, Human Resources
Country responsibilities:
Austria, Czech Republic
Supervisory board positions or comparable positions in other Austrian and foreign
companies outside the Group:
OMV Aktiengesellschaft, voestalpine AG, Institute of
Science and Technology Austria, Austrian Red Cross
Elisabeth Stadler is also active in the Supervisory Boards of significant
*
Vienna Insurance
Group companies: Wiener Städtische (Austria), Donau Versicherung (Austria), Kooperativa
(Czech Republic), ČPP (Czech Republic), Compensa Non-Life (Poland), InterRisk (Poland),
VIG Re (Czech Republic).
*All companies that contribute at least 2% of written premiums and at least 2% of profit before taxes are considered to be “significant”.
164
Annual Financial Report 2020
Liane Hirner, CFO
Year of birth: 1968
Date first appointed: 1
February 2018
End of current term of office:
31 January 2023
Liane Hirner
studied business administration in Graz. Before joining VIG Insurance Group,
she worked at PwC Austria’s audit department where she started in 1993, and when she
left, Liane Hirner was partner in the insurance area. In addition to her work as an auditor,
Liane Hirner has also been involved in many professional associations, such as the IFRS
Working Group of the Austrian Insurance Association and the Insurance Working Party of
Accountancy Europe in Brussels. Liane Hirner was appointed to the VIG Holding Managing
Board on 1 February 2018. She assumed the position of CFO on 1 July 2018. In 2019,
EIOPA appointed Liane Hirner as a new member of the Insurance & Reinsurance Stake-
holder Group (IRSG).
Areas of responsibility:
Finance and accounting, Enterprise Risk Management, Asset-Risk
Management, Data Management & Processes
Country responsibilities:
Germany, Liechtenstein, Belarus
Peter Höfinger
Year of birth: 1971
Date first appointed: 1 January 2009
End of current term of office:
30
June 2023
Peter Höfinger
studied law at the University of Vienna and University of Louvain-la-Neuve
(Belgium). Peter Höfinger has been a member of the VIG Holding Managing Board since
1 January 2009. Prior to that, he was a director of the Managing Board at Donau
Versicherung, responsible for sales and marketing. He joined this company in 2003. Previ-
ously, he held positions as managing board chairman and managing board member out-
side the insurance group in Hungary, the Czech Republic and Poland.
Areas of responsibility:
Corporate and large customer business, Vienna International
Underwriters (VIU), Group Reinsurance
Country responsibilities:
Albania, Baltic states, Bulgaria, Kosovo, Montenegro, Nordics,
Serbia
Peter Höfinger is also active in the Supervisory Boards of significant
*
Vienna Insurance
Group companies: VIG Re (Czech Republic).
*All companies that contribute at least 2% of written premiums and at least 2% of profit before taxes are considered to be “significant”.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
165
Gerhard Lahner
Year of birth: 1977
Date first appointed: 1 January 2020
End of current term of office:
30
June 2023
Gerhard Lahner
studied business administration at the Vienna University of Economics and
Business and has held a variety of positions for VIG Insurance Group since 2002. He was
a member of the Managing Boards of Austrian insurance companies Donau Versicherung
and Wiener Städtische and Czech companies Kooperativa and ČPP. Gerhard Lahner was
also a substitute member of the VIG Holding Managing Board from 1 January 2019 to
31 December 2019.
Areas of responsibility
: Asset Management, Asset Liability Management, Group Treasury
Supervisory board positions or comparable positions in other Austrian and foreign
companies outside the Group:
Wien 3420 Aspern Development AG, Wiener Börse AG,
msg life AG
Gerhard Lahner is also active in the Supervisory Boards of significant
*
Vienna Insurance
Group companies: Kooperativa (Czech Republic), ČPP (Czech Republic), VIG Re (Czech
Republic).
Gábor Lehel
Year of birth: 1977
Date first appointed: 1 January 2020
End of current term of office:
30
June 2023
Gábor Lehel
studied business administration with a major in finance in Tatabánya and
Budapest (Hungary). He joined VIG Insurance Group in 2003, where he worked in
Controlling and as head of the General Secretariat at VIG Holding before being appointed
to the Managing Board of the Hungarian insurance company UNION Biztosító in 2008. He
was General Manager of UNION Biztosító from mid-2011 to 31 December 2019. From
1 January 2016 to 31 December 2019, he was also a substitute member of the Managing
Board of VIG Holding.
Areas of responsibility
: Actuarial Department, Personal Insurance
Country responsibilities
: Bosnia-Herzegovina, Croatia, North Macedonia, Hungary
Gábor Lehel is also active in the Supervisory Boards of significant
*
Vienna Insurance Group
companies: Kooperativa (Slovakia).
*All companies that contribute at least 2% of written premiums and at least 2% of profit before taxes are considered to be “significant”.
166
Annual Financial Report 2020
Hartwig Löger
Year of birth: 1965
Date first appointed: 1 January 2021
End of current term of office:
30 June 2023
Hartwig Löger
began his career in the insurance industry in the brokerage business in
1985. After completing his studies in insurance management at the Vienna University of
Economics and Business, he joined Allianz as sales manager in Styria in 1989. From 1997
to 2002, he was head of sales at DONAU Versicherung. This was followed by a number of
senior management positions in the UNIQA Group, most recently as CEO of UNIQA
Österreich AG until the end of November 2017. Hartwig Löger was the Minister of Finance
for Austria from December 2017 to June 2019. He worked for VIG Insurance Group under
an advisory agreement with Wiener Städtische Versicherungsverein, the principal share-
holder of VIG Holding, from July 2019 to December 2020.
Areas of responsibility
: Group Development and Strategy, Planning and Controlling
Supervisory board positions or comparable positions in other Austrian and foreign
companies outside the Group:
Managing Partner of V.I.P. Consulting Löger KG (ending)
Harald Riener
Year of birth: 1969
Date first appointed: 1 Janu
ary 2020
End of current term of office:
30 June 2023
Harald Riener
studied social and economic sciences at the Vienna University of Economics
and Business and joined the insurance group in 1998, where he worked in the marketing
area for Donau Versicherung and Wiener Städtische until 2001. After working for a media
publishing company, he returned to the insurance group in 2006 as Marketing Manager of
VIG Holding. He became a member of the Managing Board in Croatia in 2010, and was
appointed CEO in 2012. From 2014 to 2019, Harald Riener was a member of the Managing
Board of Donau Versicherung where he was responsible for distribution and marketing.
Areas of responsibility
: Sales Initiatives Customers & SME, Assistance
Country responsibilities
: Moldova, Poland, Romania, Ukraine
Harald Riener is also active in the Supervisory Boards of significant
*
VIG Group companies:
Omniasig (Romania), Compensa Non-Life (Poland), Interrisk (Poland).
*All companies that contribute at least 2% of written premiums and at least 2% of profit before taxes are considered to be “significant”.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
167
Peter Thirring
Year of birth: 1957
Date first appointed: 1 July 2018
End of current term of office:
30
June 2023
Peter Thirring
studied law at the University of Vienna. He has used his more than 30 years
of insurance experience in the Generali insurance group. He was General Manager of
Donau Versicherung from March 2016 to the end of June 2018. Peter Thirring was
appointed to the VIG Holding Managing Board on 1 July 2018.
Areas of responsibility:
Motor and Property Insurance, External Incoming Reinsurance,
Group IT, Business Organisation
Country responsibilities:
Georgia, Slovakia, Turkey
Peter Thirring is also active in the Supervisory Boards of significant
*
Vienna Insurance Group
companies: Kooperativa (Slovakia), Donau Versicherung (Austria), Wiener Städtische (Aus-
tria), VIG Re (Czech Republic).
The
Managing Board
as a whole is responsible for Group Compliance, Internal Audit and Investor Relations.
The curriculum vitae of the members of the Managing Board are available on the website at www.vig.com/management.
*All companies that contribute at least 2% of written premiums and at least 2% of profit before taxes are considered to be “significant”.
MEMBERS OF THE SUPERVISORY BOARD
The Supervisory Board had the following ten members as
of 31 December 2020:
Günter Geyer
Chairman
Year of birth: 1943
Date first appointed: 2014
End of current term of office: 2024
Günter Geyer joined Wiener Städtische in 1974 and was
appointed to the Managing Board in 1988. In 2001, he be-
came General Manager and Chairman of the Managing
Board of Wiener Städtische. The insurance group’s entry
into the CEE market, with the establishment of the Kooper-
ativa insurance companies in Bratislava and Prague and
expansion into other CEE countries to become a major
international insurance group, began under his leadership.
Günter Geyer received many national and international
awards for his involvement in these countries. For example,
he received an honorary doctorate degree from the Uni-
versity of Economics in Bratislava for his contribution to the
development of the insurance industry in the Republic of
Slovakia. Günter Geyer resigned from his position as Chair-
man of the Managing Board of VIG Holding on 31 May 2012.
He has held the position of Chairman of the Supervisory
Board of Wiener Städtische since 2009 and Chairman of
the Supervisory Board of VIG Holding since 2014. He was
also the Chairman of the Managing Board of Wiener
Städtische Wechselseitiger Versicherungsverein, the prin-
cipal shareholder of Vienna Insurance Group AG Wiener
Versicherung Gruppe, until the end of 2020. He has been
Chairman of the Supervisory Board of Wiener Städtische
Wechselseitiger Versicherungsverein since January 2021.
Rudolf Ertl
1
st
Deputy Chairman
Year of birth: 1946
Date first appointed: 2014
End of current term of office: 2024
Rudolf Ertl is Doctor of Laws and has been with the
insurance group since 1972. He was a Member of the
Managing Board of Wiener Städtische until the end of 2008
and a Member of the Managing Board of Donau
Versicherung until June 2009. He was a Member of the
Managing Board of Wiener Städtische Wechselseitiger Ver-
168
Annual Financial Report 2020
sicherungsverein, the principal shareholder of VIG Holding,
until the end of 2020 and has been a Member of the
Supervisory Board of Wiener Städtische Wechselseitiger
Versicherungsverein since January 2021. The insurance
expertise he has accumulated over many years, and his
knowledge of the CEE region make Rudolf Ertl a major
asset to the Company as 1
st
Deputy Chairman of the Super-
visory Board.
Georg Riedl
2
st
Deputy Chairman
Year of birth: 1959
Date first appointed: 2014
End of current term of office: 2024
After completing his legal studies at the University of Vienna,
Georg Riedl has worked as an independent lawyer since
1991. His areas of expertise include company and tax law,
mergers & acquisitions, as well as private foundation law
and contract law, at which his activities cover national and
international transactions.
Martina Dobringer
Year of birth: 1947
Date first appointed: 2011
End of current term of office: 2024
Martina Dobringer held various management positions in
the Coface group starting in 1989 and brings her extensive
knowledge of the international insurance industry with her.
As Chairwoman of the Managing Board of Coface Central
Europe Holding AG, she laid the cornerstone for Coface’s
successful expansion into this region. From 2001 to 2011,
she was General Manager and Chairwoman of the Man-
aging Board of Coface Austria Holding AG. In 2011, she
was awarded the Grand Decoration of Honour in Silver for
Services to the Republic of Austria, and in 2006 she became
the first Austrian businesswoman to receive the highest
French honour (“Chevalier dans l’ordre de la Légion”).
Gerhard Fabisch
Year of birth: 1960
Date first appointed: 2017
End of current term of office: 2024
Gerhard Fabisch studied business administration and
economics. He joined the Steiermärkische Bank und
Sparkassen AG in 1985 and was made a member of the
Managing Board in 2001 and Chairman of the Managing
Board in 2004. Steiermärkische Bank und Sparkassen AG
has a number of affiliated companies abroad, including in
Croatia, Serbia and Bosnia-Herzegovina. Gerhard Fabisch
is a member of the Board of Directors of ESBG (European
Savings and Retail Banking Group) and WSBI (World
Savings Banks Institute). He has been President of the
Austrian Sparkassenverband since 2014.
Peter Mihók
Year of birth: 1948
Date first appointed: 2019
End of current term of office: 2024
Since 1992, Peter Mihók has been Chairman of the Slovakian
Chamber of Trade and Industry, Chairman of the World
Chambers Federation of the International Chamber of
Commerce in Paris and advisor in the EU Economic and
Social Committee in Brussels, among other things. He
studied at the University of Economics in Bratislava and
received a Ph.D. degree in the area of East-West economic
relations and an honorary doctorate from the University of
Economics in Bratislava. In addition to numerous other
awards, he received the Grand Decoration of Honour in Gold
for Services Rendered to the Republic of Austria in 2013 from
Heinz Fischer, the President of Austria at that time.
Heinz Öhler
Year of birth: 1945
Date first appointed: 2002
End of current term of office: 2024
Heinz Öhler joined the Tiroler Gebietskrankenkasse in 1970,
where he initially held a position as head of the Finance
Department and later held an executive position until 2011.
In this position he managed country-wide projects and
represented regional health insurance funds in a variety of
ministerial committees, among other things. In March 2007,
he was awarded the Grand Decoration of Honour in Gold
for Services to the Republic of Austria for his work related
to Austrian social security. He has held many positions in
the sports world, including being appointed as a Member
of the Tyrolean State Sports Council in November 2016.
Gabriele Semmelrock-Werzer
Year of birth: 1958
Date first appointed: 2017
End of current term of office: 2024
After holding positions at the Austrian branches of Chase
Manhattan Bank AG and Crèdit Lyonnais AG, Gabriele
Semmelrock-Werzer worked for Erste Group Bank AG in a
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variety of areas starting in 1995. She headed the Group
Investor Relations department from 1999 to 2010, and in
addition to international communications also actively as-
sisted the expansion of the Erste Group into the CEE region
and spent time in Prague and Bucharest. Since 2011, she
has been Chairwoman of the Managing Board of Kärntner
Sparkasse AG, which also holds a 70% interest in Spar-
kasse d.d. in Slovenia.
Katarína Slezáková
Year of birth: 1976
Date first appointed: 2020
End of current term of office: 2024
Katarína Slezáková graduated from the Faculty of Business
Management at the University of Economics in Bratislava
and has many years of experience in marketing and
communications for technology and industrial companies
(e.g. Siemens IT Solutions and Services Slovakia, Siemens
s.r.o. Slovakia, Siemens AG Österreich, Medirex a.s.).
Katarína Slezáková is currently the Head of Marketing for
CzechToll and SkyToll, two companies in the Czech Repub-
lic and Slovakia that are leaders in the area of intelligent
transport information systems.
Gertrude Tumpel-Gugerell
Year of birth: 1952
Date first appointed: 2012
End of current term of office: 2024
Gertrude Tumpel-Gugerell was Vice Governor of the National
Bank of Austria (OeNB) from 1998 to 2003 and member of
the Board of Directors from 1997 to 2003. She also has many
years of international experience, at the European level in
particular. She was the Austrian Vice Governor to the
International Monetary Fund and a member of the Economic
and Financial Committee – the most important economic
policy advisory committee of the European Union. Gertrude
Tumpel-Gugerell was responsible for the Economics and
Financial Markets divisions at the National Bank of Austria.
From 2003 to 2011, she was a member of the Executive
Board of the European Central Bank.
The curriculum vitae of the members of the Supervisory Board
are available on the website at www.vig.com/supervisory-board.
Changes during the reporting year
Maria Kubitschek (year of birth: 1962) was a Member and
2
nd
Deputy Chairwoman of the Supervisory Board from
1 January 2020 to 25 September 2020 in the financial year
2020. She left the Supervisory Board on 25 September
2020.
Katarína Slezáková was elected to the Supervisory Board
on 25 September 2020.
SUPERVISORY BOARD INDEPENDENCE
In accordance with Rule 53 of the Austrian Code of
Corporate Governance, the Supervisory Board of VIG
Holding has established the following criteria defining inde-
pendence:
• The Supervisory Board Member has not been a Member
of the Managing Board or a senior manager of the Com-
pany or subsidiary of the Company in the last five years.
• The Supervisory Board member does not have a business
relationship with the Company or a subsidiary of the
Company that is of such significant scope for the Super-
visory Board member that it affects his or her activities on
the Supervisory Board to the detriment of the Company.
This also applies to business relationships with companies
in which the Supervisory Board Member has a
considerable economic interest. The approval of individual
transactions by the Supervisory Board in accordance with
§ 95 (5) (12) of the Austrian Stock Corporation Act (AktG) or
§ 15 (2) (l) of the Articles of Association does not
automatically lead to a classification of non-independence.
For the purpose of clarification, it is expressly noted that
purchase or existence of insurance policies with the
Company has no adverse effect on independence.
• The Supervisory Board Member has not been an auditor
of the Company’s financial statements, or held an owner-
ship interest in or been an employee of the auditing com-
pany executing such audits in the last three years.
• The Supervisory Board Member is not a member of the
Managing Board of another company that has a member of
the Company’s Managing Board on its Supervisory Board.
• The Supervisory Board Member is not a close family
member (direct descendant, spouse, partner, parent,
uncle, aunt, brother, sister, niece, nephew) of a Member
of the Managing Board or individuals holding one of the
positions described above.
The Supervisory Board as a whole is considered to be in-
dependent if at least 50% of the members elected by the
Annual General Meeting satisfy the criteria above for the
independence of a Supervisory Board Member.
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Annual Financial Report 2020
Each Member of the Supervisory Board has declared
whether they can be considered independent based on the
criteria specified by the Supervisory Board. Peter Mihók has
stated that he is not independent based on the indepen-
dence criteria specified by the Supervisory Board. All other
Supervisory Board Members were independent based on
the criteria indicated.
No Supervisory Board Member holds more than 10% of the
Company’s shares.
The following Supervisory Board Members exercised super-
visory mandates or comparable positions in other Austrian or
foreign listed companies as of 31 December 2020:
Georg Riedl
AT & S Austria Technologie & Systemtechnik Aktiengesell-
schaft
Gertrude Tumpel-Gugerell
AT & S Austria Technologie & Systemtechnik Aktiengesell-
schaft
Commerzbank AG
OMV Aktiengesellschaft
PROCEDURES FOLLOWED BY THE MANAGING BOARD AND BY
THE SUPERVISORY BOARD AND ITS COMMITTEES
Managing Board
The Managing Board manages the business of the Company
under the leadership of its Chairperson and within the
constraints of the law, articles of association, procedural rules
of the Managing Board and procedural rules of the Super-
visory Board.
The Managing Board meets when needed (generally each
week or every two weeks) to discuss current business
developments and makes the necessary decisions and
resolutions during these meetings. The Managing Board
Members continuously exchange information with each other
and the heads of various departments.
Supervisory Board
The Supervisory Board performs all activities defined under
the law, articles of association and the procedural rules of
the Supervisory Board. In order to ensure effectiveness and
efficiency of its activities and procedures, the Supervisory
Board examines its procedures regularly, but at least once
a year in the form of a self-evaluation. The Supervisory
Board’s evaluation of its activities in 2020 found that its or-
ganisational structure and procedures were satisfactory in
terms of efficiency and in compliance with the law. It found
no need for change or desire for change in the practices
followed to date.
The Supervisory Board and its committees, Chairpersons
and Deputy Chairpersons continuously monitor and
regularly examine Company management as well as the
activities of the Managing Board in terms of managing and
monitoring the Group. Detailed presentations and discus-
sions during meetings of the Supervisory Board and its
committees are used for this purpose, as are thorough and,
in some cases, in-depth discussions with the members of
the Managing Board who provide detailed explanations and
supporting documentation relating to the management and
financial position of the Company and the Group. Strategy,
business development (overall and in individual regions), risk
management, the internal control system, internal audit
activities, the compliance function, actuarial function and
reinsurance – at the VIG Holding level as well as at Group
level – are also discussed during these meetings.
The Supervisory Board and the Audit Committee also
directly engage with the financial statements auditor and the
consolidated financial statements auditor in order to
familiarise themselves with the accounting process and
audit progress, and to inquire whether the audit has
produced any important findings. Provision was made for
exchanges between the Members of the Audit Committee
and the (consolidated) financial statements auditor in such
meetings without the presence of the Managing Board, but
no Member of the Audit Committee took advantage of this
opportunity during the reporting year. During the meetings
about annual and consolidated financial statements, the
audit reports are discussed with the audit managers both in
the Audit Committee and in the entire Supervisory Board.
The Audit Committee examined the Company’s Solvency
and Financial Condition Report (SFCR) and reported its
findings to the Supervisory Board. The Supervisory Board
found no grounds for objection.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
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The internal audit department provides quarterly reports to
the Audit Committee. If necessary, the head of internal audit
provides detailed explanations of individual issues and audit
focal points. The head of internal audit also submits the
annual audit plan to the Audit Committee for approval. The
Managing Board explains the organisation and effective-
ness of the internal control system, internal audit and the
risk management system to the Audit Committee at least
once a year, and provides the Audit Committee with a
written report on this subject so that it can confirm the
efficiency of the systems. The Audit Committee also
examines the report and assessment of the functioning of
the risk management system prepared by the (consolidated)
financial statements auditor and reports its findings to the
Supervisory Board.
Due to the current situation in connection with COVID-19,
the Audit Committee also dealt with the report on the ad
hoc ORSA 2020 and reported on this to the Supervisory
Board in 2020.
The Audit Committee and Supervisory Board as a whole
also received the 2020 sustainability report (consolidated
non-financial report) from the Managing Board, and
reviewed and carefully examined it.
At least once a year, the Managing Board presents the
Supervisory Board with the measures to be taken by the
VIG companies in order to prevent corruption, and the
Supervisory Board discusses those.
When preparing the nomination to the Annual General
Meeting regarding the election of a new Supervisory Board
Member, the latter takes the professional and personal
requirements set by law and the Austrian Corporate
Governance Code into account which a Supervisory Board
Member must satisfy and observe.
The Audit Committee and Supervisory Board also strictly
ensure that all of the requirements and conditions provided
for under the law and Austrian Code of Corporate Gover-
nance are fully satisfied when preparing the general
meeting proposal on selection of the (consolidated) finan-
cial statements auditor. As a public-interest entity, the spe-
cial additional rules for external and internal rotation appli-
cable to insurance companies and the special tendering
process are observed. In addition, after the audit of the
consolidated financial statements has been completed, the
Supervisory Board is provided with a list showing the total
audit expenses of all Group companies. This list provides
a separate breakdown of expenses relating to the con-
solidated financial statements auditor and the members of
the network to which the consolidated financial statements
auditor pertains. The same goes for other financial state-
ments auditors who work for the Group.
The Supervisory Board established five committees to
increase its efficiency and to address complex matters:
Committee for Urgent Matters (Working Committee), Audit
Committee (Accounts Committee), Committee for Managing
Board Matters (Personnel Committee), Strategy Committee
and Nomination Committee.
The Supervisory Board also dealt with IT security issues in
financial year 2020.
The Supervisory Board also dealt with the topic of remu-
neration policy. The Managing Board and Supervisory Board
prepared a remuneration report for financial year 2020.
During the reporting period, the Nomination Committee and
Supervisory Board also dealt with the appointment of a new
member of the Managing Board. In 2020 the Supervisory
Board appointed Hartwig Löger to the Managing Board
starting 1 January 2021.
SUPERVISORY BOARD COMMITTEES
COMMITTEE FOR URGENT MATTERS (WORKING COMMITTEE)
The Committee for Urgent Matters (Working Committee)
decides on matters that require approval of the Supervisory
Board, but cannot be deferred to the next ordinary Super-
visory Board meeting because of particular urgency.
Günter Geyer (Chairman)
Substitute: Gertrude Tumpel-Gugerell
Rudolf Ertl
Substitute: Martina Dobringer
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Annual Financial Report 2020
Georg Riedl
Substitute: Martina Dobringer
AUDIT COMMITTEE (ACCOUNTS COMMITTEE)
The Audit Committee (Accounts Committee) is responsible
for the duties assigned to it by law and is, in particular,
responsible for the duties assigned in § 92 (4a)(4) of the
Austrian Stock Corporation Act (AktG), § 123 (9) of the
Austrian Insurance Supervision Act (VAG) and Regulation
(EU) No. 537/2014, namely:
1. to monitor the accounting process and provide recom-
mendations or suggestions to ensure its reliability;
2. to monitor the effectiveness of the Company’s internal
control system and the internal audit function and risk
management system;
3. to monitor the audit of the financial statements and
consolidated financial statements taking into account
findings and conclusions in reports published by the
supervisory authority for financial statement auditors in
accordance with § 4 (2)(12) of the Austrian Auditor
Supervision Act (APAG);
4. to check and monitor the independence of the financial
statement auditor (consolidated financial statement
auditor), in particular with respect to the additional
services provided for the audited company; Art. 5 of
Regulation (EU) No. 537/2014 and § 271a (6) UGB apply;
5. to report the results of the financial statement audit to the
Supervisory Board and explain how the financial state-
ment audit has contributed to the reliability of the financial
reports and the role of the Audit Committee in this;
6. to audit the annual financial statements and prepare their
approval, examine the proposal for appropriation of profits,
the management report, the solvency and financial con-
dition report and corporate governance report, and pre-
sent a report on the results of the audit to the Supervisory
Board;
7. to audit the consolidated financial statements and Group
management report, the solvency and financial condition
report at Group level and the corporate governance report
at consolidated level, and report the results of the audit to
the Supervisory Board;
8. to perform the procedure to elect the financial statement
auditor (consolidated financial statement auditor) taking
into account the appropriateness of the fees in
accordance with Art. 4 of Regulation (EU) No. 537/2014
and the rotation periods in Art. 17 of Regulation (EU)
No. 537/2014, and recommend appointment of a
financial statements auditor (consolidated financial
statements auditor) to the Supervisory Board in accor-
dance with Art. 16 of Regulation (EU) No. 537/2014.
Furthermore, in a meeting (another meeting, in addition to
the meeting required by law), the Audit Committee
(Accounts Committee) specifies how the two-way com-
munication between the (consolidated) financial statements
auditor and the Audit Committee (Accounts Committee)
has to take place, while making provision for exchanges to
take place between the Audit Committee (Accounts
Committee) and the (consolidated) financial statements
auditor without the presence of the Managing Board.
Members of the Audit Committee are experienced financial
experts with knowledge and practical experience in finance,
accounting and reporting that satisfy the requirements of
the Company.
Chairwoman:
Gertrude Tumpel-Gugerell
Deputy Chairwoman:
Martina Dobringer
Other members:
Rudolf Ertl
Günter Geyer
Peter Mihók
Georg Riedl
Katarína Slezáková
If a member is unable to attend, Gabriele Semmelrock-
Werzer will attend the meeting, and if she is also unable to
attend, Heinz Öhler will attend. If Gertrude Tumpel-Gugerell
is unable to attend, the meeting will be chaired by Martina
Dobringer.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
173
COMMITTEE FOR MANAGING BOARD MATTERS (PERSONNEL
COMMITTEE)
The Committee for Managing Board Matters (Personnel
Committee) deals with personnel matters of the Managing
Board. The Committee for Managing Board Matters
therefore decides on employment contract terms with
Members of the Managing Board and their remuneration
and examines remuneration policies at regular intervals.
Günter Geyer (Chairman)
Rudolf Ertl
Georg Riedl
STRATEGY COMMITTEE
The Strategy Committee cooperates with the Managing
Board and, when appropriate, with experts that it consults
in order to prepare fundamental decisions that will sub-
sequently be decided upon by the entire Supervisory Board.
Günter Geyer (Chairman)
Substitute: Gertrude Tumpel-Gugerell
Rudolf Ertl
Substitute: Martina Dobringer
Georg Riedl
Substitute: Gabriele Semmelrock-Werzer
Peter Mihók
Substitute: Katarína Slezáková
NOMINATION COMMITTEE
The Nomination Committee submits proposals to the Su-
pervisory Board for filling positions that become available on
the Managing Board and handles issues of successor
planning.
Günter Geyer (Chairman)
Rudolf Ertl
Georg Riedl
Martina Dobringer
The Supervisory Board gave its consent to VIG Holding
and other companies in VIG Insurance Group that allowed
them to use the legal services of Georg Riedl, Supervisory
Board Member, and engage him or his law firm to act as a
representative and provide advisory services on a project-
related basis under normal market terms. Georg Riedl
provided consultancy services as a lawyer, for which he
received total (net) fees of EUR 5,337.50 plus cash
expenses and 20% value added tax in financial year 2020
(of which EUR 5,337.50 plus cash expenses and 20% VAT
were for VIG Holding). Supervisory Board Members
Gerhard Fabisch and Gabriele Semmelrock-Werzer are
members of the managing boards of companies with which
distribution agreements were concluded under normal
market and industry terms and conditions. The Company
did not enter into any other agreements with Supervisory
Board Members in 2020 that would have required the
approval of the Supervisory Board.
NUMBER OF MEETINGS OF THE SUPERVISORY BOARD AND ITS
COMMITTEES IN THE FINANCIAL YEAR 2020
One Annual General Meeting and five Supervisory Board
meetings distributed across the financial year were held in
2020. Five meetings of the Audit Committee were also
held. The meetings of the Supervisory Board and Audit
Committee were held without the physical presence of
the participants in accordance with § 1 of the Austrian Cor-
porate COVID-19 Act (COVID-19-GesG). The Annual
General Meeting was held as a virtual Annual General
Meeting on the basis of § 1 (2) COVID-19-GesG and the
COVID-19-GesV. The financial statements and consol-
idated financial statements auditor, KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
(KPMG), attended three Audit Committee meetings and
the Supervisory Board meeting in 2020 that addressed the
audit of the 2019 annual financial statements and the 2019
consolidated financial statements as well as formal
approval of the 2019 annual financial statements, and also
attended the Annual General Meeting. Five meetings of the
Committee for Managing Board Matters (Personnel
Committee) were held in 2020. The Nomination Committee
held one meeting in 2020. The Committee for Urgent
Matters (Working Committee) held three meetings in
2020. The Strategy Committee did not meet in 2020.
Strategic matters were handled by the Supervisory Board
as a whole.
No Member of the Supervisory Board attended less than
half of the Supervisory Board meetings.
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Annual Financial Report 2020
MANAGING BOARD AND SUPERVISORY BOARD
REMUNERATION
The Company remuneration guidelines are based on the
provisions of Solvency II and include standards intended to
prevent the remuneration rules from creating incentives to
assume excessive risk and to avoid conflicts of interest to
the extent possible. The Company guidelines include
further provisions for key positions – in particular variable
remuneration for these positions – that are generally aimed
at promoting sustainability and careful dealing with risks.
Corresponding Group guidelines apply to all insurance and
reinsurance companies within the insurance group and
therefore apply to all significant subsidiaries included in the
consolidation scope.
Remuneration policy for Managing Board Members of the
Company
Managing Board remuneration takes into account the
importance of the Group and the responsibility that goes with
it, the economic situation of the Company, and the appro-
priateness of the remuneration in the market environment.
The remuneration policy includes, in particular, detailed
provisions concerning the relationships between the
remuneration components, the provision of a company
pension and other details. It also outlines situations in which
deviations from the provisions of the remuneration policy
are permitted.
In addition to specifying the maximum amount of variable
remuneration in relation to fixed remuneration, it also
specifies – in accordance with statutory requirements – the
relationship between fixed remuneration, contractual
bonuses and any special remuneration included in total
remuneration.
The remuneration policy describes in detail the provisions
concerning Managing Board bonuses that are aimed at
ensuring the sustainability of company performance.
The remuneration policy also stipulates that Managing
Board members with terms of office beginning in 2020 may
only be granted an entitlement to a company pension
starting at the beginning of their term of office if they have
already held positions in the Group for at least 5 years and
that the maximum amount of the entitlement granted
depends on the length of time the position is held.
A variety of fringe benefits provided to Managing Board
members, such as anniversary bonuses, company cars and
insurance, are also described in detail.
Detailed information for financial year 2020 will be available
in the remuneration report, which will be published on the
Company website by the legally required deadline.
Remuneration policy for Supervisory Board Members
The remuneration policy specifies the remuneration to be
received by the members of the Supervisory Board,
including their objectives and principles, and is to be
approved by the Annual General Meeting.
Detailed information for financial year 2020 will be available
in the remuneration report, which will be published on the
Company website by the legally required deadline.
Supervisory Board remuneration does not include stock
options or similar instruments.
DIVERSITY CONCEPT
With around 50 insurance companies and more than
25,000 employees in Austria and Central and Eastern
Europe, VIG Insurance Group combines many countries,
languages and cultural backgrounds. Diversity is a key
priority in its HR strategy.
VIG Insurance Group follows a bottom-up approach with
respect to diversity management for the Company’s boards.
By applying diversity management to all personnel, the insur-
ance group expects to generate corresponding diversity in the
candidate pool for internal successor planning in the long term.
For VIG Insurance Group, diversity reflects both the
similarities and the differences it encounters in the Group,
its markets and its partners as well as customers. Diversity
management is based on genuine appreciation and open
acceptance of diversity, and makes conscious use of this
diversity. VIG companies include this understanding of
diversity in the VIG Code of Business Ethics:
“We do not
tolerate any kind of discrimination. We are committed to
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
175
promoting equal opportunities with regard to the employ-
ment and promotion of staff, regardless of their faith, religion,
gender, beliefs, ethnicity, nationality, sexual orientation, age,
skin colour, disability or civil status.”
Group and VIG Holding level
The diversity concept focuses on the criteria of gender,
generations and internationality at the Group and VIG
Holding level, and refined and developed measures for the
following criteria:
•
Gender
: Ensure equal gender treatment in all areas
(career and development options, benefits and income,
etc.)
•
Generations
: Use mixed-age teams and take the various
phases of life to develop full potential into account.
Generation-appropriate offers and support in the various
phases of life, learn from one another, healthy work, fair
recruitment
•
Internationality
: Group-wide exchange of know-how
(local expertise), collaborative learning, use of the
internal Group job market and ensuring an appropriate
mix of people from different countries within VIG Holding
The criteria of gender, generations and internationality are
also taken into account when new Supervisory Board
Members are proposed for election at General Meetings.
VIG Insurance Group has relied on the concept of local
entrepreneurship for decades, thereby also promoting a
very internationally diverse “community” of Group Managing
Board Members and CEOs.
The topic of diversity is a key element in Group-wide
management development training programmes, in terms
of content as well as the participants and lecturers.
Level of the VIG insurance companies
Based on the principle of local entrepreneurship, the VIG
insurance companies choose their own priorities against
the background of priorities set for diversity at VIG Holding
and at Group level.
Diversity Advisor
As Diversity Advisor, Angela Fleischlig-Tangl advises both
VIG Holding and local VIG companies on matters related to
diversity management.
MEASURES TO PROMOTE WOMEN IN MANAGING BOARD,
SUPERVISORY BOARD AND MANAGEMENT POSITIONS
Appreciation of diversity and, therefore, removing barriers in
women’s careers is one of the key elements of the HR
strategy at VIG Insurance Group. Gender is one of the three
priorities of the diversity concept at both VIG Insurance
Group and VIG Holding level.
Nomination procedures for Group-wide training
programmes for management, high potentials and experts
are also required to have as balanced a gender
representation as possible, with the local human resources
department bearing ultimate responsibility.
Female Supervisory Board Members
Women hold 21.8% of the positions on the Supervisory
Boards of the fully consolidated VIG insurance companies
across Europe (as of 31 December 2020) and 40.0% of the
Supervisory Board positions in VIG Holding.
Female Managing Board Members
Women hold 25.4% of the positions on the Managing
Boards of the fully consolidated VIG insurance companies
and 23.7% of the Chairpersons are women. Elisabeth
Stadler is the Chairwoman of the VIG Group.
Females in management positions
Including distribution, women hold 45.9% of the
management positions at the level directly below the
managing board of fully consolidated VIG insurance
companies across Europe (not including distribution:
52.1%).
GENERATIONS AND INTERNATIONALITY
The average age of all Managing Board Members of the fully
consolidated insurance companies is 49.5 years (as of 31
December 2020), and the average age of Supervisory
Board Members is 56.7 years. 21 different nationalities
(based on citizenship) are represented in the Managing
Boards of the fully consolidated VIG insurance companies,
and 19 different nationalities in the Supervisory Boards.
Further information is available in the Employees section of
the Sustainability Report.
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Annual Financial Report 2020
EXTERNAL EVALUATION REPORT
C-Rule 62 of the Austrian Code of Corporate Governance
provides voluntary external evaluation of compliance with the
C-Rules of the Code at least every three years. VIG Holding
had this evaluation performed for the 2020 consolidated cor-
porate governance report. All of the evaluations came to the
conclusion that all requirements in the Code had been
observed. The summarised information on these evaluations
is available on the website of VIG Insurance Group.
Vienna, 17 March 2021
The Managing Board:
Elisabeth Stadler
General Manager (CEO),
Chairwoman of the
Managing Board
Liane Hirner
CFO, Member of the
Managing Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
177
The Supervisory Board and its com-
mittees, Chair and Deputy Chairs
periodically and repeatedly moni-
tored in detail the management of
the Company and the activities of
the Managing Board in connection
with its management and mon-
itoring of the Group. This purpose
was served by detailed presenta-
tions and discussions during meet-
ings of the Supervisory Board and
its committees as well as by detailed discussions on indi-
vidual topics with Managing Board members who provided
comprehensive explanations and evidence relating to man-
agement, the financial position of the Company and that of
the Group. Among other things, strategy, business develop-
ment (overall and in individual regions), risk management,
the internal control system, internal audit activities, the com-
pliance function, actuarial function and reinsurance, both at
VIG Holding and Group level, and other important topics for
the Company and the Group were discussed at these
meetings.
In accordance with the Solvency II requirements, starting in
2016 non-financial aspects must be part of the perfor-
mance expectations for variable remuneration of Managing
Board Members. VIG Holding is committed to social re-
sponsibility and the importance of having employees drive
forward performance, innovation and expertise. Goal fulfil-
ment for Managing Board Members also depended on both
financial and non-financial criteria in the 2020 reporting year.
Detailed information on the principles underlying the
remuneration system is available in the remuneration policy
and 2020 remuneration report. Detailed information for
financial year 2020 will be available in the remuneration report,
which will be published on the Company website by the
legally required deadline. Please refer to the remuneration
policy and 2020 remuneration report for this information.
The Supervisory Board has formed five committees from its
Members. Information on the responsibilities and composi-
tion of these committees is available on the Company’s web-
site and in the 2020 consolidated corporate governance
report.
One Annual General Meeting and five Supervisory Board
meetings distributed across the financial year were held in
2020. Five meetings of the Audit Committee (Accounts
Committee) were also held. The meetings of the Super-
visory Board and Audit Committee were held without the
physical presence of the participants in accordance with § 1
of the Austrian Corporate COVID-19 Act (COVID-19-GesG).
The Annual General Meeting was held as a virtual Annual
General Meeting on the basis of § 1 (2) COVID-19-GesG
and the COVID-19-GesV. The financial statements and
consolidated financial statements auditor, KPMG Austria
GmbH Wirtschaftsprüfungs- und Steuerberatungsgesell-
schaft, company number FN 269873y (KPMG), attended
three Audit Committee meetings and the Supervisory Board
meeting in 2020 that addressed the audit of the 2019 an-
nual financial statements and the 2019 consolidated finan-
cial statements as well as formal approval of the 2019
annual financial statements, and also attended the Annual
General Meeting. KPMG also informed the Audit Committee
about the planning and procedure used to audit the finan-
cial statements and consolidated financial statements. Five
meetings of the Committee for Managing Board Matters
(Personnel Committee) were held in 2020. The Nomination
Committee held one meeting in 2020. The Committee
for Urgent Matters (Working Committee) held three
meetings. The Strategy Committee did not meet in 2020.
Strategic matters were handled by the Supervisory Board
as a whole.
No agenda items were discussed in Supervisory Board
meetings in 2020 without the participation of members of
the Managing Board.
No Member of the Supervisory Board attended less than
half of the Supervisory Board meetings. In order to ensure
the effectiveness and efficiency of its activities and proce-
dures, the Supervisory Board performed a self-evaluation of
its procedures. The Supervisory Board’s evaluation of its
activities found that its organisational structure and proce-
dures were satisfactory in terms of efficiency and in compli-
ance with the law. It found no need for change or desire for
change in the practices followed to date.
Acting upon the proposal and motion of the Supervisory
Board, the general meeting of 24 May 2019 selected KPMG
to be the financial statements auditor and consolidated
financial statements auditor for financial year 2020, and
KPMG consequently performed these duties in financial
year 2020.
Supervisory Board report
178
Annual Financial Report 2020
The Audit Committee mainly dealt with the following topics
in 2020:
During one meeting of the Audit Committee, the members
of the committee consulted with the (consolidated) financial
statements auditor on specification of two-way communi-
cations and audit planning.
By inspecting relevant documents, meeting with the Mana-
ging Board and discussions with the (consolidated) financial
statements auditor, the Audit Committee was able to
monitor the accounting process and the procedure used for
auditing the financial statements and consolidated financial
statements, and found no facts or circumstances providing
grounds for objection. The Audit Committee also reviewed
the possibilities of providing recommendations or sugges-
tions to ensure the reliability of the accounting process and,
based on the comprehensive information and documents
obtained by the Audit Committee during its review, found
that the processes that had been established were adequate.
The Audit Committee also reviewed and monitored the
independence of the auditor of the financial statements and
consolidated financial statements, and after reviewing suit-
able documents and supporting records submitted to the
Committee, particularly with respect to the appropriateness
of the fee and the additional services provided to the Com-
pany, was satisfied with the auditor’s independent status.
While reviewing and monitoring the independence of the fi-
nancial statements auditor and consolidated financial
statements auditor, the Audit Committee did not find any
circumstances that would raise doubts about its indepen-
dence and impartiality.
The Audit Committee also monitored the effectiveness of
the internal control system, internal audit and the risk man-
agement system by obtaining descriptions of the processes
and organisation of these systems from the Managing
Board, the (consolidated) financial statements auditor and
the individuals directly responsible for these areas. Due to
the current situation in connection with COVID-19, the Audit
Committee also dealt with the report on the ad hoc ORSA
2020 and reported on this to the Supervisory Board in 2020.
The Audit Committee reported on these monitoring activi-
ties to the Supervisory Board and stated that no deficien-
cies had been identified. The Supervisory Board was also
given the opportunity during Supervisory Board meetings to
verify the functional adequacy of the existing control and
auditing systems. In addition, the audit plan and the quar-
terly reports prepared by the internal audit department were
debated by the Audit Committee and the Supervisory Board
and discussed with the head of the internal audit depart-
ment and the Group internal audit department.
The Audit Committee examined the Company’s Solvency
and Financial Condition Report (SFCR) and reported its
findings to the Supervisory Board. The Supervisory Board
found no grounds for objection.
In 2020, the Audit Committee also dealt with the selection
of the financial statements and consolidated financial state-
ments auditor for financial year 2021. It was determined that
there were no grounds for exclusion of KPMG or circum-
stances that would give rise to concerns about impartiality,
and that sufficient protective measures had been taken to
ensure an independent and impartial audit. The Audit Com-
mittee reported to the Supervisory Board on the insights of
these evaluations and proposed to the Supervisory Board
and subsequently to the general meeting that KPMG be
selected as auditor of the financial statements and consol-
idated financial statements. The General Meeting selected
KPMG as auditor of the financial statements and consoli-
dated financial statements for 2021.
The Audit Committee also received the 2020 annual financial
statements, management report, 2020 consolidated cor-
porate governance report and 2020 sustainability report
(consolidated non-financial report) from the Managing Board,
and reviewed and carefully examined them. The Managing
Board’s proposal for appropriation of profits was also re-
viewed with respect to capital adequacy and its effects on
the solvency and financial position of the Company during
the course of this examination. The Audit Committee also
examined the 2020 consolidated financial statements and
Group management report. In addition, the auditor’s reports
prepared by (consolidated) financial statements auditor
KPMG for the 2020 annual financial statements and man-
agement report and the 2020 consolidated financial state-
ments and Group management report were reviewed by the
Audit Committee and examined. As a result of this exam-
ination, a unanimous resolution was adopted to recom-
mend to the Supervisory Board that the annual financial
statements be accepted. The Supervisory Board found no
grounds for objection.
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The (consolidated) financial statements auditor provided the
Audit Committee with an additional report in accordance
with Art. 11 of Regulation (EU) No. 537/2014 on specific
requirements regarding statutory audit of public-interest
entities that explained the results of the financial statements
audit and consolidated financial statements audit. This
additional report prepared by the financial statements
auditor was also provided to the Supervisory Board.
The audit results and all resolutions adopted by the Audit
Committee were reported to the Supervisory Board in its next
meeting, along with an explanation of how the financial state-
ment audit had contributed to the reliability of the financial
reporting and what role the Audit Committee had played.
The Supervisory Board also dealt with IT security issues in
financial year 2020.
The Supervisory Board also dealt with the topic of
remuneration policy. The Managing Board and Supervisory
Board prepared a remuneration report for financial year 2020.
During the reporting period, the Nomination Committee and
Supervisory Board also dealt with the appointment of a new
member of the Managing Board. In 2020, the Supervisory
Board appointed Hartwig Löger to the Managing Board
starting 1 January 2021.
The 2020 annual financial statements together with the
management report and 2020 consolidated corporate gov-
ernance report, the 2020 consolidated financial statements
together with the Group management report, and the Man-
aging Board’s proposal for appropriation of profits were
taken up and examined in detail by the Supervisory Board.
The appropriation of profits proposal was checked, in par-
ticular, to ensure that it was reasonable when capital re-
quirements were taken into account. The proposal complies
with applicable legal requirements and proactively considers
the macroeconomic and financial situation and its impact
on the company's solvency and financial position in light
of the COVID-19 pandemic. The proposal is in line with the
continuously pursued prudent and sustainable capital
planning to ensure a solid solvency and liquidity position in
the long term.
The Supervisory Board also dealt with sustainability issues.
Topics such as the further integration of social and ecolog-
ical aspects into the core business as well as environmental
and employee issues and the importance of diversity and
the Group's social commitment were covered. The
Supervisory Board also received the 2020 sustainability
report (consolidated non-financial report) from the
Managing Board, and reviewed and carefully examined it.
As a result of this examination, it found that the 2020
sustainability report (consolidated non-financial report) had
been prepared properly and was appropriate. The
Supervisory Board found no grounds for objection.
In addition, the auditor’s reports prepared by (consolidated)
financial statements auditor KPMG for the 2020 annual
financial statements and management report and the 2020
consolidated financial statements and Group management
report were reviewed by the Supervisory Board and exam-
ined. KPMG’s audit of the 2020 annual financial statements
and management report and the 2020 consolidated finan-
cial statements and Group management report did not lead
to any reservations. KPMG determined that the annual fi-
nancial statements comply with statutory requirements and
give a true and fair view of the net assets and financial posi-
tion of the Company as of 31 December 2020, and of the
results of operations of the Company for financial year 2020
in accordance with Austrian generally accepted accounting
principles. The management report is consistent with the
annual financial statements. The disclosures pursuant to
§ 243a UGB (Austrian Commercial Code) are appropriate.
KPMG further determined that the consolidated financial
statements also comply with statutory requirements and
give a true and fair view of the net assets and financial po-
sition of the Group as of 31 December 2020, and of the
results of operations and cash flows of the Group for
financial year 2020 in accordance with the IFRS as adopted
by the EU and § 138 of the Austrian Insurance Supervision
Act (VAG) in combination with § 245a of the Austrian Com-
mercial Code (UGB). The Group management report is
consistent with the consolidated financial statements. KPMG
also reviewed the 2020 sustainability report (consolidated
non-financial report) and determined in accordance with
§ 269 (3) UGB that the 2020 consolidated corporate
governance report had been prepared.
The final results of the review by the Supervisory Board did
not provide any basis for reservation either. The Supervisory
Board stated that it had nothing to add to the auditor’s
reports for the financial statements and consolidated finan-
cial statements.
180
Annual Financial Report 2020
After thorough examination, the Supervisory Board there-
fore adopted a unanimous resolution to approve the 2020
annual financial statements prepared by the Managing
Board, not to raise any objections to the management
report, the 2020 consolidated financial statements and
Group management report, the 2020 consolidated
corporate governance report and the 2020 sustainability
report (consolidated non-financial report) and to agree with
the Managing Board proposal for appropriation of profits.
The 2020 annual financial statements have therefore been
approved in accordance with § 96 (4) AktG (Austrian Stock
Corporation Act).
The Supervisory Board proposes to the General Meeting
that it approves the Managing Board’s proposal for appro-
priation of profits and formally approves the actions of the
Managing Board and Supervisory Board.
Vienna, April 2021
The Supervisory Board:
Günter Geyer (Chairman)
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181
DECLARATION BY THE MANAGING BOARD
We declare to the best of our knowledge that the consolidated financial statements prepared in accordance with applicable
accounting standards give a true and fair view of the Group’s net assets, financial position and results of operations, that
the Group management report presents the business development, result and position of the Group so as to give a true
and fair view of its net assets, financial position and results of operations, and that the Group management report provides
a description of the principal risks and uncertainties to which the Group is exposed.
The declaration for the annual financial statements of VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe is
issued in the Annual Report of this company.
The consolidated financial statements for financial year 2020 were approved for publication by a resolution of the Managing
Board on 17 March 2021.
Vienna, 17 March 2021
Elisabeth Stadler
General Manager (CEO),
Chairwoman of the Managing
Board
Liane Hirner
CFO, Member of the Managing
Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
Managing Board areas of responsibility:
Elisabeth Stadler:
Management of the VIG Group, Strategy, General Secretariat and Legal, Corporate Social Responsibility, Affiliated companies
department, European Affairs, Group Communications & Marketing, Group Sponsoring, Bancassurance and international
partnerships, Human Resources; Country responsibilities: Austria, Czech Republic
Liane Hirner:
Finance and accounting, Enterprise Risk Management, Asset-Risk Management, Data Management & Processes; Country
responsibilities: Germany, Liechtenstein, Belarus
Peter Höfinger:
Corporate and large customer business, Vienna International Underwriters (VIU), Group Reinsurance; Country responsibilities: Albania,
Baltic states, Bulgaria, Kosovo, Montenegro, Nordics, Serbia
Gerhard Lahner:
Asset Management, Asset Liability Management, Group Treasury
Gábor Lehel:
Actuarial Department, Personal Insurance; Country responsibilities: Bosnia-Herzegovina, Croatia, North Macedonia, Hungary
Hartwig Löger
Group Development and Strategy, Planning and Controlling
Harald Riener:
Sales Initiatives Customers & SME, Assistance; Country responsibilities: Moldova, Poland, Romania, Ukraine
Peter Thirring:
Motor and Property Insurance, External Incoming Reinsurance, Group IT, Business Organisation; Country responsibilities: Georgia,
Slovakia, Turkey
The
Managing Board as a whole
is responsible for Group Compliance, Internal Audit and Investor Relations.
182
Annual Financial Report 2020
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Audit Opinion
We have audited the consolidated financial statements of
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe, Vienna, Austria,
and its subsidiaries ("the Group"), which comprise the Consolidated Balance Sheet as at 31 December 2020, the
Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Shareholders’
Equity, the Consolidated Cash Flow Statement for the year then ended, and the Notes to the Consolidated Financial
Statements.
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position
of the Group as at 31 December 2020, and its consolidated financial performance and consolidated cash flows for the year
then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, the additional
requirements pursuant to Section 245a UGB (Austrian Commercial Code) as well as other legal or regulatory requirements.
Basis for our Opinion
We conducted our audit in accordance with the EU Regulation 537/2014 ("AP Regulation") and Austrian Standards on
Auditing. These standards require the audit to be conducted in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the "Auditor’s Responsibilities" section of our report. We
are independent of the audited Group in accordance with Austrian company law and professional regulations, and we have
fulfilled our other responsibilities under those relevant ethical requirements. We believe that the audit evidence we have
obtained up to the date of the auditor’s report is sufficient and appropriate to provide a basis for our audit opinion on this
date.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, however, we do not provide a separate opinion thereon.
We have identified the following key audit matters:
• Recoverability of goodwill
• Liability Adequacy Test – “LAT”
RECOVERABILITY OF GOODWILL
Refer to notes 1.1. Goodwill on page 103, Impairment of goodwill on page 49 and Intangible Assets (A) on page 54
Risk for the Consolidated Financial Statements
The recoverability of goodwill recognized in the Consolidated Financial Statements of the Vienna Insurance Group
amounting to EUR 1,237.3 million, is monitored separately at country level. At least once a year and in case of a triggering
Auditor’s
r
eport
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
183
event on an ad hoc basis Vienna Insurance Group performs a recoverability test (the so-called impairment test) of the
recorded goodwill amounts.
The impairment test of goodwill is complex and based on discretionary factors. Those factors include in particular the
expected future cash flows of the individual countries (taking into account the development of future premiums, budgeted
combined ratios and financial income), which are primarily based on past experience as well as on the management’s
assessment of the expected market environment and the effects of the Covid 19 pandemic on the future business
development. Other factors are the assumed long-term growth rate as well as the underlying region-specific costs of capital.
Our Response
We have carried out the following main audit procedures in connection with the recoverability of goodwill:
• We have assessed the appropriateness of key assumptions, of discretionary decisions and of the valuation method
applied for the impairment testing.
• We have reconciled the expected future cash flows used in the calculation with the strategic business planning
approved by the management.
• Furthermore, we have dealt with the key planning assumptions, in particular the effects of the Covid 19 pandemic on
the future business development and reconciled the assumptions regarding the market development with general and
sector-specific market expectations.
• We have analysed the consistency of planning data using information from prior periods.
• Given that minor changes in the applied cost of capital rate significantly impact the recoverable amount of the cash
generating units, we have, together with our valuation specialists, assessed the determination of the applied cost of
capital rate and comprehended the derivation of the underlying parameters.
• By means of our own sensitivity analysis we have determined whether the tested book values are still sufficiently
covered by the recoverable amounts in case of possible changes in the assumptions within a realistic range.
• Additionally, we have assessed whether the disclosures in the notes with respect to the recoverability of goodwill are
appropriate.
LIABILITY ADEQUACY TEST – “LAT”
Refer to notes pages 64ff, 95 to 96
Risk for the Consolidated Financial Statements
With life and health insurance, Vienna Insurance Group holds a significant amount of long-term contracts for which
premiums have been calculated using a high discount rate. As these interest rates are also used to measure the liabilities
from insurance contracts, there is – due to the persistently low interest rates in the market – a risk that the insurance liabilities
are not adequately measured.
At each balance sheet date Vienna Insurance Group uses current estimates of future cash flows from insurance contracts
to determine whether the insurance liabilities are adequately accounted for in the balance sheet.
To ensure this, future cash flows from existing policies are calculated on a best estimate basis using actuarial methods. For
life and health insurance the cash flow model used for this purpose is also used to calculate the Market Consistent
Embedded Value (“MCEV”). The MCEV is determined according to the “Market Consistent Embedded Value Principles”
published by the CFO Forum in June 2008 and last amended in April 2016.
184
Annual Financial Report 2020
The performance of the liability adequacy test is complex, and its underlying assumptions are based on a large number of
estimates and discretionary factors.
Our Response
We involved our actuarial specialist as part of the audit team and carried out the following main audit procedures in
connection with the liability adequacy test:
• We have examined the appropriateness of key assumptions and discretionary decisions as well as the calculation
models and methods applied.
• In order to assess the appropriateness of the assumptions and methods used, we gained an understanding of the
methodology in discussions with the actuaries of Vienna Insurance Group and analysed the assumptions used as well
as the resulting cash flows.
• In particular, we assessed whether the applied methodology was consistent with the “Market Consistent Embedded
Value Principles” published by the CFO Forum in June 2008 and last amended in April 2016.
• In addition, we assessed the appropriateness of the implementation of the methodology within the models, analysed
the consistency of assumptions used on the basis of information from prior periods, and examined the completeness of
the modeled portfolio.
• Furthermore, we critically dealt with the sensitivity analysis prepared by the company.
Other Information
Management is responsible for other information. Other information is all information provided in the annual report, other
than the consolidated financial statements, the group management report and the auditor’s report.
Our opinion on the consolidated financial statements does not cover other information and we do not provide any kind of
assurance thereon.
In conjunction with our audit, it is our responsibility to read this other information and to assess whether, based on
knowledge gained during our audit, it contains any material inconsistencies with the consolidated financial statements or
any apparent material misstatement of fact. If we conclude that there is a material misstatement of fact in other information,
we must report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the EU, the additional requirements pursuant to
Section 245a UGB (Austrian Commercial Code) as well as other legal or regulatory requirements and for such internal
controls as management determines are necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
Management is also responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting, unless management either intents to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The audit committee is responsible for overseeing the Group’s financial reporting process.
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185
Auditor’s Responsibilities
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement – whether due to fraud or error – and to issue an auditor’s report that includes our audit opinion.
Reasonable assurance represents a high level of assurance, but provides no guarantee that an audit conducted in
accordance with the AP Regulation and Austrian Standards on Auditing (and therefore ISAs), will always detect a material
misstatement, if any. Misstatements may result from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with the AP Regulation and Austrian Standards on Auditing, we exercise professional
judgment and maintain professional skepticism throughout the audit.
Moreover:
• We identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud
or error, we design and perform audit procedures responsive to those risks and obtain sufficient and appropriate audit
evidence to serve as a basis for our audit opinion. The risk of not detecting material misstatements resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations or override of internal control.
• We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
internal control.
• We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• We conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our audit report to the respective note in the consolidated financial statements. If such
disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• We evaluate the overall presentation, structure and content of the consolidated financial statements, including the
notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner
that achieves fair presentation.
• We obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
• We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our
audit as well as significant findings, including any significant deficiencies in internal control that we identify during our
audit.
• We communicate to the audit committee that we have complied with the relevant professional requirements in respect
of our independence, that we will report any relationships and other events that could reasonably affect our
independence and, where appropriate, the related safeguards.
• From the matters communicated with the audit committee, we determine those matters that were of most significance
in the audit i.e. key audit matters. We describe these key audit matters in our auditor’s report unless laws or other legal
regulations preclude public disclosure about the matter or when in very rare cases, we determine that a matter should
not be included in our audit report because the negative consequences of doing so would reasonably be expected to
outweigh the public benefits of such communication.
186
Annual Financial Report 2020
REPORT ON OTHER LEGAL REQUIREMENTS
Group Management Report
In accordance with Austrian company law, the group management report is to be audited as to whether it is consistent with
the consolidated financial statements and prepared in accordance with legal requirements.
Management is responsible for the preparation of the group management report in accordance with Austrian company law
and other legal or regulatory requirements.
We have conducted our audit in accordance with generally accepted standards on the audit of group management reports
as applied in Austria.
Opinion
In our opinion, the group management report is consistent with the consolidated financial statements and has been
prepared in accordance with legal requirements. The disclosures pursuant to Section 243a UGB (Austrian Commercial
Code) are appropriate.
Statement
Based on our knowledge gained in the course of the audit of the consolidated financial statements and our understanding
of the Group and its environment, we did not note any material misstatements in the group management report.
Additional Information in accordance with Article 10 AP Regulation
We were elected as auditors at the Annual General Meeting on 24 May 2019 and were appointed by the supervisory board
on 24 June 2019 to audit the financial statements of Company for the financial year ending on that date.
In addition, during the Annual General Meeting on 25 September 2020, we have been elected as auditors for the following
financial year and appointed by the supervisory board on 22 October 2020.
We have been auditors of the Company, without interruption, since the consolidated financial statements at 31 December
2013.
We declare that our opinion expressed in the "Report on the Consolidated Financial Statements" section of our report is
consistent with our additional report to the Audit Committee, in accordance with Article 11 AP Regulation.
We declare that we have not provided any prohibited non-audit services (Article 5 Paragraph 1 AP Regulation) and that we
have ensured our independence throughout the course of the audit, from the audited Group.
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187
Engagement Partner
The engagement partner is Mr Thomas Smrekar.
Vienna, 17 March 2021
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed by:
Thomas Smrekar
Wirtschaftsprüfer
(Austrian Chartered Accountant)
This report is a translation of the original report in German, which is solely valid. The consolidated financial statements
together with our auditor's opinion may only be published if the consolidated financial statements and the group
management report are identical with the audited version attached to this report. Section 281 Paragraph 2 UGB (Austrian
Commercial Code) applies.
188
Annual Financial Report 2020
Gr
oup management report | Consolidated financial statements | Management report | Separate financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
189
Management
report
to the Annual financial statements
in accordance with the Austrian
Commercial Code (
UGB)
190
Annual Financial Report 2020
PROTECTING WHAT MATTERS
30 years ago, the former Wiener Städtische Versicherung
AG laid the cornerstone for a successful expansion into
Central and Eastern Europe (CEE). VIG Insurance Group
now operates in 30 countries. Its market share of around
18 % makes it the leading insurance group in Central and
Eastern Europe. The Group is one of the top 5 in a large
number of the countries in this region, and is even market
leader in 7 markets.
VIG Insurance Group differs in two important ways from
other international insurance groups: its local multi-brand
strategy and local entrepreneurship. These create diversity
in the Group and increase risk diversification. Local
decisions are made by local management, and strategic
considerations are collectively implemented in the Group.
VIG Insurance Group also stands for stability, conservative
investments and sustainability, with innovation playing an
important role in maintaining and further expanding its
leading position in the CEE region.
This sustainable long-term business orientation of the
Group is seen as a reason for the success of its 30-year
expansion strategy. The Group also feels that its diversity
gives it a clear competitive advantage, as shown during the
COVID-19 pandemic.
As the holding company for the Group insurance
companies, VIG Holding uses these approaches and
objectives to achieve the best possible benefits for its
investors, customers, employees, society and the
environment, as expressed by the motto: “Protecting what
matters”.
ORGANISATION AND OBJECTIVES
VIG Holding uses a number of control units, e.g. Risk
Management, Asset Management, Planning and
Controlling, and Strategy, to maintain close contact with the
Group companies and acts as an interface and promoter
for the implementation of local entrepreneurship.
The focus is on maintaining an intensive collaborative
exchange between all 50 Group companies and their
around 25,000 employees in 30 countries that allows both
the interests of the individual companies and the Group as
a whole to be pursued. In addition to international
collaboration, profitability and sustainable growth are also
important objectives for VIG Holding and the Group as a
whole. To achieve these objectives, a clear sustainability
strategy based on the five areas of core business,
customers, employees, society and the environment is
used with a regional focus on Central and Eastern Europe,
with the aim of further expanding the Group’s leading
position in the insurance market in the CEE region.
The combination of these strategies has paid off even in
difficult times, with VIG Insurance Group managing to
increase its premium volume to around EUR 10.4 billion and
improve its combined ratio to 95.0 % in spite of the COVID-
19 pandemic.
STRONG CAPITAL RESOURCES
Another important asset of VIG Insurance Group is its
strong capital base, which helps drive sustainable profitable
growth. The VIG Insurance Group solvency ratio of 238 %
and VIG Holding solvency rate of 397 % at the end of 2020
show that their solvency is stable in turbulent times. This
large capital buffer can be used to invest in the organic
growth of VIG Insurance Group and to acquire other
companies.
In addition, VIG Holding once again received an A+ rating
with stable outlook from the internationally recognised
rating agency Standard & Poor’s (S&P) and continues to be
the best-rated company in the Austrian ATX equities index.
S&P based its decision on the Group’s leading market
position in the CEE region, its multi-brand strategy,
established distribution network and broad geographical
and product-related diversification. As in the previous year,
the rating agency also feels that VIG Holding has a very
strong financial risk profile and the Group has excellent
capital resources.
Company profile
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
191
VIG HOLDING BUSINESS DEVELOPMENT
Premiums written, net earned premiums, expenses for claims and insurance benefits, administrative expenses and
reinsurance balance had the following breakdown for property and casualty insurance in 2020 (and in the same period in
2019):
2020
2019
Direct business
Indirect business
Total
Direct business
Indirect business
Total
in EUR '000
Premiums written 132,753
1,012,385
1,145,138
98,276
1,001,750
1,100,026
Net earned premiums 129,610
999,029
1,128,639
99,738
989,784
1,089,522
Expenses for claims and insurance
benefits 111,982
576,530
688,512
86,664
616,490
703,154
Administrative expenses 13,983
398,674
412,657
11,196
345,389
356,585
Reinsurance balance -282
-10.752
-11.034
978
-16.710
-15.732
The reinsurance balance is composed of net earned reinsurance premiums, effective reinsurance claims and reinsurance
commissions.
FINANCIAL PERFORMANCE INDICATORS
Premium income
VIG Holding generated a total premium volume of
EUR 1,145.14 million in 2020, representing a year-on-year
increase of 4.1 %. Direct premiums written (corporate
business) increased 35.08 % year-on-year to EUR 132.75
million. Premium income from indirect business (assumed
reinsurance) was EUR 1,012.39 million, 1.1 % higher than
the previous year.
VIG Holding retained EUR 1,073.20 million (2019:
EUR 1,042.81 million) of the premiums written. EUR 71.94
million was ceded to reinsurers in 2020 (2019: EUR 57.21
million). Gross earned premiums were EUR 1,128.64 million
(2019: EUR 1,089.52 million). Net earned premiums
increased EUR 25.33 million to EUR 1,058.58 million.
Expenses for claims and insurance benefits
Gross expenses for claims and insurance benefits were
EUR 688.51 million in 2020 (2019: EUR 703.15 million).
EUR 111.98 million of this amount was attributable to
corporate business (2019: EUR 86.66 million), EUR 25.32
million more than the previous year.
The gross claims ratio for direct business declined from
85.5 % to 85.4 %. Expenses for claims and insurance
benefits for assumed reinsurance fell 6.5 % to EUR 576.53
million. The gross claims ratio for indirect business was
57.7 % (2019: 62.3 %). After deducting reinsurance of
55.87 million (2019: EUR 38.78 million), expenses for claims
and insurance benefits were EUR 632.65 million (2019:
EUR 664.37 million).
Administrative expenses
Administrative expenses were EUR 412.66 million in 2020,
or 15.7 % higher than the previous year (2019: EUR 356.59
million). This change was primarily due to an increase in
commissions for indirect business. EUR 13.98 million of the
administrative expenses were for the corporate business
and EUR 398.67 million for the reinsurance business. After
reinsurance commissions for ceded reinsurance business,
EUR 409.50 million in administrative expenses remained for
VIG Holding. This was an increase of EUR 54.67 million
compared to the previous year.
Management report 2020
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Combined ratio
VIG Holding’s combined ratio was 98.5 % in 2020 (2019:
98.8 %), and 96.3 % for direct business (corporate business)
(2019: 97.0 %). This ratio is calculated as the sum of all
underwriting expenses and income plus net payments for
claims and insurance benefits, including the net change in
underwriting provisions, divided by net earned premiums for
property and casualty insurance.
Financial result
VIG Holding had a financial result of EUR 22.68 million
(2019: EUR 186.20 million). Impairment of shares in
affiliated companies was EUR 173.67 million (2019:
EUR 145.47 million). The decrease was partly due to lower
accounting profits compared to the previous year from the
disposal in the area of participations.
2020
2019
in EUR '000
Land and buildings 11,102
8,483
Investments in affiliated companies
and participations
194,888
295,970
Other investments 3,318
26,322
Total income (net) 209,308
330,775
Other investment and interest income 11,673
18,442
Expenses for asset management -90.146
-92.057
Interest expenses -72.488
-70.061
Other investment expenses -35.668
-899
Investment profit according to
income statement 22,679
186,200
Result from ordinary activities
VIG Holding earned a result from ordinary activities of
EUR 61.38 million in 2020 (2019: EUR 202.52 million). This
decrease was mainly due to the smaller financial result.
Investments
Investments, including liquid assets, were EUR 5,675.59
million as of 31 December 2020 (2019: EUR 5,364.37
million).
Deposits were EUR 1,025.96 million in 2020 (2019:
EUR 1,114.3 million). 76.7 % (2019: 81.0 %) of the
investments at the end of 2020 were participations, 9.9 %
(2019: 10.1 %) were bonds (including pension funds), 1.1 %
(2019: 1.9 %) were loans, 2.2 % (2019: 2.2 %) were land
and buildings, and 10.1 % (2019: 4.8 %) were bank
balances and cash on hand.
Detailed information is provided on pages 212 and 213 of
the annual financial statements.
BREAKDOWN OF INVESTMENTS IN 2020
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VIG Holding acquires Aegon N.V. companies
On 29 November 2020, VIG Holding signed a purchase
agreement with the Dutch company Aegon N.V. to acquire
its companies in Hungary, Poland, Romania and Turkey. In
addition to the insurance companies, which generated a
premium volume of around EUR 600 million in 2019, the
acquisition also includes pension funds with around EUR 5
billion in assets under management and asset management
and service companies. The acquisition expands VIG
Insurance Group’s market position in the CEE region and
adds 4.5 million customers to its customer base. The
companies being acquired have around 1,650 employees
and generated around EUR 50 million in net profits in 2019.
The purchase price is EUR 830 million. The transaction is
subject to the approvals required under supervisory and
competition law. The acquisition of the Aegon N.V.
companies is expected to be formally concluded in the 2
nd
half of 2021. Due to the lack of closing for the purchase
transaction and lack of control over the companies, they
had not yet been added to the scope of consolidation as of
the balance sheet date.
Underwriting provisions
Underwriting provisions were EUR 1308.74 million as of 31
December 2020 (2019: EUR 1,244.14 million). This
corresponds to a year-on-year increase of 5.2 %, which was
primarily due to provisions for outstanding claims arising
from direct business. The reinsurers’ share was
EUR 124.02 million (2019: EUR 80.36 million).
Solvency ratio
VIG Holding’s solvency ratio of 397 % is high due to an
outstanding endowment of capital resources combined
with a low capital requirement, and also includes its function
as a holding company in the Group.
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NON-FINANCIAL PERFORMANCE INDICATORS
For the 2020 reporting year, VIG Holding is publishing its
fourth sustainability report that addresses the corporate
social responsibility (CSR) strategy for the Group. This
strategy and much more information on CSR in the Group
companies can be read in this report, which is available
for download free of charge at www.vig.com/
Nachhaltigkeitsberichte. A few examples of the VIG
Holding’s own initiatives are presented below.
Social involvement – Example: Social Active Day
Since 2011, VIG Insurance Group employees have been
allowed to use one day per year to volunteer for a good
cause. The Social Active Day initiative was brought to life by
VIG Holding’s principal shareholder Wiener Städtische
Versicherungsverein. A wide variety of activities are
performed, ranging from renovation work in social aid
organisations and nursing care facilities, collecting food,
serving soup, helping in social supermarkets, working with
socially disadvantaged people and people in need, all the
way to accompanying elderly people on trips. The COVID-
19 pandemic, however, also changed a few things for
Social Active Day in 2020. Popular activities, such as visiting
retirement homes, were not possible due to measures
taken against the pandemic. VIG companies tried to
continue the initiative, however, in spite of the difficult
conditions. In Austria, for example, employees could divide
the time available for the Social Active Day into multiple
periods. That allowed employees to provide shorter forms
of assistance, such as shopping for vulnerable individuals.
72 VIG Holdings employees took part in this Group-wide
initiative in 2020.
Cultural involvement – Example: Gustav Mahler Youth
Orchestra
VIG Holding considers art and culture as an important
contribution to the quality of life in a society and wants to
give artists greater freedom to develop artistically. VIG
Holding has therefore provided support for the Gustav
Mahler Youth Orchestra for many years. It is considered the
best youth orchestra in the world and is a place of learning
that helps talented young European orchestra musicians
play music together.
It stands for music without borders, for dedication and
enthusiasm, and offers highly talented musicians up to the
age of 26 the opportunity to work together with the great
conductors and soloists of our time. This promotes cross-
border cultural exchange, mutual understanding and equal
opportunity. The orchestra was seriously affected by the
COVID-19 pandemic in 2020, and a number of projects had
to be cancelled. But at least some of the musicians who
passed the auditions for 2020 were able to perform. A CD
is even going to be produced for the special project that
took place in the summer of 2020 in spite of the COVID-19
pandemic. VIG Holding has been a main sponsor of the
Gustav Mahler Youth Orchestra for many years and
continued its support in the 2020 reporting period.
VIG Holding promotes peace – Example: Children’s Peace
Image of the Year
The Global Peace Photo Award (formerly the Alfred Fried
Photography Award) was launched in 2013 to honour
photographers from around the world each year for
photographs showing the many aspects and interpretations
of peace and beauty on our earth. There is a separate
international photo competition for young participants up to
14 years of age, the “Children’s Peace Image of the Year”.
The young participants are given the opportunity to give free
rein to their creativity and use their photographs to express
what peace looks like to them. In previous years, the
competition was combined with the VIG Kids Camp, which
could not be offered in 2020 due to the COVID-19
pandemic. The children of employees of VIG insurance
companies were nevertheless once again informed that the
Children’s Peace Image of the Year competition was taking
place and were encouraged to participate. The photo
competition offers a prize of EUR 1,000 and continued to
receive support from VIG Holding in 2020.
Employees
VIG Holding offers many attractive prospects and
development opportunities for its employees. It offers a
broad range of training and advanced training courses, the
opportunity to gather international experience by
participating in mobility programs, and an attractive working
environment. Expert careers are another development
option offered to employees as an alternative to
management careers.
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In addition, a new diversity concept was developed in 2017
that focuses on the criteria of gender, internationality and
generations. More information on this concept is available
in the Corporate Governance Report. Flexible working
hours, a company cafeteria, company kindergarten and
internal company sports and health programmes and other
medical services increase the attractiveness of the work
environment. 2020 was particularly challenging due to the
COVID-19 pandemic and also led to some changes for
employees.
Since March 2020, the motto has been “home office before
office” and many employees have been working primarily
from home since then. This allowed us to minimise the risk
of infection. The transition to home offices represented a
major change in the way we work. Human Resources
quickly developed measures to help employees better cope
with this new work situation. A variety of online seminars
provided opportunities for employees to think about the
new form of working and discuss it with their fellow
employees. They could learn technical information about
communication tools and gain know-how with respect to
decentralised collaboration, teamwork and the work/life
balance.
VIG Holding’s presence at career events (which
predominantly took place virtually during the reporting
period), Internet career webpages and its candidate
management service once again received an award in the
BEST RECRUITERS study for 2020. For the fourth time in
a row, VIG Holding was named “Best Recruiter” for the
insurance companies in 2020/21 and received an overall
10
th
place among the 500 companies studied in Austria. In
addition, “Forbes” magazine ranked VIG Insurance Group
as one of the World’s 750 Best Employers. It is also the only
Austrian financial services provider in the list. The ranking
included companies in a total of 58 countries. The Group
was included in the list of “Financial Times Diversity Leaders
2021”, which is reserved for companies with outstanding
achievements in the area of diversity and inclusion in the
workplace.
In 2020, VIG Holding also received first place in Austria in
the 2019 Gender Diversity Index ranking by the Boston
Consulting Group.
The current human resources strategy has three main
objectives: VIG Insurance Group should be seen as a
diverse, innovative, learning organisation, empowering
managers to create a positive working environment and
support employees with future challenges, and an
appropriate feedback culture should exist. These objectives
are pursued using strategic HR partnerships, a value-driven
working environment, and management and employees
who are fit for the future.
There were an average of 296 employees, including
Managing Board members, in 2020.
Research and development
Although VIG companies do not perform any research
activities as defined in § 243 (3) (2) UGB, they contribute
their expertise to the development of insurance-specific
software models. VIG Holding and – for projects – the VIG
companies also cooperate with Digital Impact Labs Leipzig,
Plug & Play and an (investment and corporate building)
start-up initiative that is located in Germany and jointly
funded with other insurance companies in order to identify
technological developments in the market more quickly and
internalise them if necessary. viesure was also established
for this purpose as an internal “innovation hub” focusing
mainly on Austria.
Other Information
VIG Holding established three branch offices in financial
year 2019, extending the business operations of the VIG
Insurance Group into Northern Europe. The Group therefore
operates branches located in Copenhagen, Oslo and
Stockholm.
Please see the notes to the financial statements (I.
Summary of significant accounting policies) for information
on the financial instruments used.
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Annual Financial Report 2020
RISK REPORT
The risk management system is well integrated into VIG Holding’s organisational structure. The following chart shows the
units that play an important role in the risk management system.
The Managing Board as a whole is responsible for the risk
management system, in particular for the following areas:
• Set up and promote the risk management system
• Define and communicate the risk strategy, including risk
tolerances and risk appetite
• Approve corporate risk management guidelines
• Take the risk situation into account in strategic decisions
Both the Enterprise Risk Management and Asset Risk
Management units have reported directly to Managing
Board member Liane Hirner since the beginning of 2020.
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RISK COMMITTEE
The VIG Holding Managing Board established the Risk
Committee to ensure regular discussions of current matters
relating to risk management across functional areas within
the organisation and an exchange of information on the risk
situation between the members of the committee and the
Managing Board. The Risk Committee meetings take place
at least quarterly and are chaired by Managing Board
member responsible for this area. The Risk Committee
reports to the Managing Board after its meetings.
ENTERPRISE RISK MANAGEMENT
The department has reported to Managing Board member
Liane Hirner since the beginning of 2020. The head of the
department performs the risk management function
required under Solvency II at the Group and solo level.
The main responsibilities of the department include
determining the overall risk profile of the Group and VIG
Holding and calculating solvency. The department provides
a Group-wide risk aggregation solution for this purpose with
extensive reporting and partial modelling approaches for
calculating solvency capital. Calculation of the solvency
capital requirement during the year, analysis of risk-bearing
capacity using proprietary analysis tools and reviewing the
internal control system are other important activities
performed by the department.
The department also assists the Managing Board with
updating the corporate risk strategy, improvements to the
risk organisation and further corporate risk management
topics.
ASSET-RISK MANAGEMENT
The department has reported to Managing Board member
Liane Hirner since the beginning of 2020. The primary
responsibility of the department is to analyse, assess and
monitor risks associated with investments, in particular with
respect to the VIG Insurance Group’s solvency result and
financial result. For this purpose, the department specifies
Group-wide requirements for risk assessment and
implements a central system for investment management
and risk monitoring. The department is also responsible for
maintaining an internal rating approach for banks.
ASSET MANAGEMENT
The department has reported to Managing Board member
Gerhard Lahner since the beginning of 2020. One of the
main responsibilities of the department is to define a
strategic orientation for the investments of each insurance
company and for VIG Insurance Group as a whole, and to
specify an investment strategy and investment process
aimed at ensuring that current income is as high as possible,
but also as secure as possible, while simultaneously taking
advantage of opportunities to increase the value of
investments. Guidelines and limits are used to manage
investments. Regular reports are also provided for
investments, limits and income.
ACTUARIAL DEPARTMENT
The department has reported to Managing Board member
Gábor Lehel since the beginning of 2020. The head of the
department performs the Actuarial function required by
Solvency II. The department is therefore responsible, in
particular, for the duties related to the Actuarial function.
The Actuarial department also calculates the embedded
value for the life and health insurance businesses and
prepares profitability analyses and company valuations. The
department assists actuarial collaboration and functional
networking.
GROUP REINSURANCE
The department reports to Managing Board member Peter
Höfinger. The department coordinates and assists all
companies in VIG Insurance Group and their reinsurance
departments with reinsurance matters in the non-life
business (property and casualty, third party liability and
accident insurance) by preparing and applying guidelines.
The department also administers Group-wide reinsurance
programmes in the non-life lines of business. The primary
objective is to create a safety net to provide continuous
protection for all of the companies in VIG Insurance Group
against the negative effects of catastrophes, individual large
losses and negative changes in entire insurance portfolios.
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Annual Financial Report 2020
PLANNING AND CONTROLLING
The department is an important part of the integrated risk
management approach. It was the responsibility of
Managing Board Chairwoman Elisabeth Stadler up to the
end of the financial year and has been the responsibility of
Managing Board member Hartwig Löger since the
beginning of 2021. The department coordinates business
planning over a 3-year horizon. The standardised reports
include key figure and variance analyses for planning,
forecasts and ongoing performance of VIG Holding and
other insurance companies. Regular monthly premium
reports, quarterly reports for each company (aggregated at
the country and Vienna Insurance Group level) and cost
reports are prepared.
GROUP IT
The department has reported to Managing Board member
Peter Thirring since the beginning of 2020. The department
is responsible for IT management at the VIG Insurance
Group level (IT strategy, IT governance, IT security, IT Group
projects, etc.), for assisting companies in VIG Insurance
Group with large IT projects, and for developing Group-
wide guidelines and common standards. The Austrian
business organisation assists Group IT with this by
providing outside IT and telephony services.
ASSET LIABILITY MANAGEMENT
The department reports to Gerhard Lahner and was
established during the financial year just ended. The
observation, measurement and optimisation of future cash
flows on the asset and liabilities sides are the main
responsibilities of the Asset Liability Management unit. It is
also responsible for the exchange of knowledge and
improvements in the Group in this area.
CORPORATE AND LARGE CUSTOMER BUSINESS
The department reports to Managing Board member Peter
Höfinger and underwrites insurance contracts for large
Austrian and international customers. The department also
assists subsidiaries with resources and know-how. The aim
is to achieve a uniform underwriting philosophy and
approach in all Vienna Insurance Group companies that
perform such business.
INTERNAL AUDIT
The department reports to the Managing Board. Managing
Board Chairwoman Elisabeth Stadler is the contact person
in the Managing Board. The Internal Audit department
systematically monitors operating and business processes,
the internal control system of all operational business areas,
including compliance with legal requirements, and the
functionality and adequacy of risk management. The
Internal Audit department operates continuously and
reports directly to the Managing Board. The head of the
department performs the Internal Audit function required by
Solvency II.
VIG Holding’s overall risk can be divided into the following risk
categories:
Market risk
: Market risk is the risk of losses due to changes
in market prices. Changes in value occur, for example, due
to changes in yield curves, share prices, exchange rates
and the value of real estate and participations.
Credit risk:
Credit risk quantifies the potential loss due to a
deterioration of the situation of a counterparty against which
claims exist.
Liquidity risk:
This category includes risks of the Vienna
Insurance Group not being able to satisfy its payment
obligations by liquidating assets at short notice.
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Underwriting risks:
The core business of the Vienna
Insurance Group consists of the transfer of risk from policy
holders to the insurance company. Underwriting risks in the
areas of reinsurance and non-life insurance are primarily the
result of changes in insurance-specific parameters, such as
loss frequency, loss amount, lapse rates and lapse costs.
Reputation risks:
Reputation risk is the risk of negative
changes in business due to damage to a company’s
reputation.
Operational risks:
Operational risks may result from
deficiencies or errors in business processes, controls or
projects caused by technology, staff, organisation or
external factors.
Strategic risks:
Strategic risks can arise due to changes in
the economic environment, case law, or the regulatory
environment. Established risk management processes are
used to regularly identify, analyse, evaluate, report, control
and monitor all the risks to which VIG Holding is exposed.
The risk control measures used are avoidance, reduction,
diversification, transfer and acceptance of risks and
opportunities. A Group-wide unified internal control system
also helps to ensure compliance with the guidelines and
requirements resulting from risk management. VIG Holding
is primarily exposed to market risk due to its activities as an
insurance holding company. A conservative investment
policy is used to limit other market risk due to investments.
Market risk is monitored using fair value measurement,
value-at-risk (VaR) calculations, sensitivity analysis and
stress tests.
Market risk is by far VIG Holding’s most important risk
exposure, in particular the equity and currency risk resulting
from its primary activity, holding participations in insurance
companies.
VIG Holding is also exposed to underwriting risks as a result
of its international corporate business and reinsurance
business. Appropriate underwriting provisions are
determined using recognised actuarial methods and
assumptions and managed by means of guidelines
concerning the assumption of insurance risks. VIG Holding
also limits the potential liability from its insurance
business/active reinsurance business by ceding part of the
risk it has assumed to the external reinsurance market
through the Group reinsurance company VIG Re.
With respect to credit risk, consideration is only given to
those issuers or contracting parties whose credit quality or
reliability can be assessed by VIG Holding, whether on the
basis of an in-house analysis, credit assessments/ ratings
from recognised sources, provision of security or the
possibility of recourse to reliable mechanisms for
safeguarding investments. Operational and strategic risks
which might be caused by deficiencies or errors in business
processes, controls and projects, or changes in the
business environment, are also continuously monitored.
Limits are used to keep concentrations within the desired
margin of safety.
Investments
VIG Holding’s investments consist primarily of participations
and deposits. Additional investments are mainly made in
fixed-interest securities (bonds, loans) and real estate, and
only to a small extent in shares and other investments. VIG
Holding aligns its investments to its liability profile and aims
to achieve sustainable increases in value in accordance with
VIG Insurance Group investment guidelines, which are
based on a long-term conservative investment policy.
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Annual Financial Report 2020
Use of forward exchange transactions
VIG Holding uses forward exchange transactions and
currency swaps to hedge expected dividend payments in
the most important currencies, CZK and PLN, and planned
distributions of Company earnings in the same currencies
for the current financial year.
The expected and planned amounts are checked regularly
and used to make any needed adjustments to the hedge
amounts.
Risks related to the coronavirus pandemic
A further lengthening or worsening of the coronavirus
pandemic, and the effects this could have on capital
markets and the insurance business, could have a negative
effect on the net assets, financial position and results of
operations of VIG Insurance Group.
These include, in particular, risks related to possible
fluctuations in bond and capital markets that were also
observed in the early phase of the coronavirus pandemic. If
the coronavirus pandemic continues or worsens again,
there are also risks on a smaller scale of an increase in
claims and reduction of premium volume.
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
IN THE ACCOUNTING PROCESS
General structure and organisation
The internal control and risk management system (ICS)
plays an important role in VIG Holding and is firmly anchored
in the organisational structural and process organisation of
the Company. Responsibilities are clearly defined in the ICS
by ICS Group guidelines and extend from the overall
responsibility of the Managing Board to establish an
effective control system and appropriate risk management,
to the responsibility of middle management to ensure
adequate risk control infrastructure in the various areas, all
the way to the individual employees, who are expected to
perform their work responsibly and pro-actively report
and/or remedy potential risks, deficiencies and sources of
errors.
The ICS itself is comprised of all measures and control
activities used to minimise risks – particularly for the areas
of accounting and compliance, but also for other
operational risks. It extends from specially established
processes, organisational units such as accounting and
controlling, all the way to guidelines, regulations and
individual controls within processes, such as automated
audits or use of the “four-eyes” principle.
Important control elements in the accounting process
The documentation for the annual financial statement
preparation process includes the important elements of the
internal control and risk management system that are
present in the accounting process.
The controls documented there are used during the
process to ensure that potential errors whose occurrence
cannot be completely ruled out in spite of the many
additional functional and technical controls in existing IT
systems (e.g. SAP) are identified and corrected at an early
stage in the reporting process.
This allows the following objectives of the annual financial
statement process to be achieved:
• Completeness: all transactions during the reporting
period are recorded in full.
• Existence: all reported assets and liabilities exist on the
balance sheet date.
• Accuracy: all transactions recorded in the financial
statements apply to the same period as the financial
statements.
• Measurement: all asset, liability, income and expense
items were recognised at fair value in accordance with
accounting requirements.
• Ownership: proper presentation of rights and
obligations.
• Presentation: all financial statement items are correctly
presented and disclosed.
The financial statement process includes the aggregation of
all data from accounting and upstream processes for the
annual financial statements. The financial statements are
submitted to the appropriate area head for review and
further consultation with the Managing Board. The
Managing Board provides final approval of the financial
statements. The auditor takes the internal control system
into account during the financial statement audit to the
extent that it is relevant to preparation of the annual financial
statements.
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Effectiveness and controls
To ensure the effectiveness of the internal control system,
VIG Holding established an annual evaluation and
documentation process for the ICS with the professional
assistance of external auditors. This process identifies,
analyses, assesses, documents and reports risks and
controls existing for VIG Holding to the Managing Board,
particularly those in the areas of accounting and
compliance.
Optimisation measures are introduced into the control
environment based on the findings, and their
implementation is also monitored and reported by the
responsible units. The results of this process are also used
later by the internal audit department as a basis for its
subsequent audit of the accounting process and the control
environment established there.
DISCLOSURES IN ACCORDANCE WITH § 243A AND
§ 243(3)(3) UGB
Detailed information on the disclosures in accordance with
§ 243a and § 243(3)(3) UGB is available in the notes to the
financial statements on page 219.
DISCLOSURES ON OUTSOURCING IN ACCORDANCE WITH
§ 156(1)(1) IN CONJUNCTION WITH § 109 VAG
A resolution was adopted allowing Group-internal and
external service providers to provide IT services for VIG
Holding. Outsourcing agreements that had been approved
by the supervisory authority existed in 2020 with IBM
Austria (Internationale Büromaschinen Ges. m.b.H.) and the
internal Group IT system provider twinformatics GmbH,
both headquartered in Austria. twinformatics GmbH has
also assumed full responsibility for all IT services for the
Austrian VIG insurance companies and concludes any sub-
outsourcing required for this purpose while observing
statutory and regulatory requirements and after consulting
with the VIG insurance companies. In addition to these
outsourcing agreements, VIG Holding has not outsourced
any critical or important functions or business activities.
OUTLOOK
Economic outlook
Subject to considerable uncertainty, and taking into
account the extension of containment measures in the 1
st
quarter of 2021, on the one hand, and the hoped-for effects
of the vaccination campaign on the other, the IMF expects
a global recovery of 5.5 % in 2021, with the developed
economies expected to grow 4.3 % and the emerging
markets by 6.3 %. With respect to the eurozone, Erste
Group expects growth of 4.0 % in 2021. In Austria, Erste
Group analysts see another recession in the 1
st
quarter of
2021. A recovery is not expected to start until the 2
nd
quarter of 2021. Based on these forecasts, Erste Group
reduced its GDP forecast for 2021 slightly downwards from
3.4 % to 3.0 %. It expects GDP growth to increase to 3.4 %
in 2022. In spite of the gradual opening of the economy,
unemployment is expected to rise (5.6 %), partly due the
phase-out of short-time work schemes.
Central and Eastern Europe is expected to record average
regional growth of 3.6 % in 2021, naturally including support
from base effects. In spite of this recovery, wealth losses
due to the COVID-19 pandemic are not expected to be
recovered until 2022 at best. The Erste Group scenario
forecasts GDP growth rates ranging from 6.0 % in Slovakia
to 2.7 % in Romania. Inflationary trends should continue to
weaken in the region and remain comfortably within central
bank tolerance intervals in all markets. Central and Eastern
Europe is expected to record overall inflation of 2.3 %, with
the lowest rate in Croatia (0.8 %), while Hungary is expected
to be at the upper end with 3.3 %. The increase in the
unemployment rate expected for Central and Eastern
Europe in 2021 (6.1 %) should contribute to the moderate
inflationary pressure before the employment situation
improves in 2022.
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Annual Financial Report 2020
Outlook for VIG Insurance Group
As a market leader in Central and Eastern Europe, VIG
Insurance Group with its more than 25,000 employees is in
an excellent position to take advantage of the opportunities
available in this region and the long-term growth options
they offer. It remains committed to its proven business
strategy of profitable growth. Based on the values of
diversity, customer proximity and responsibility, VIG
insurance companies want to use their successful
management principles to strengthen and further increase
their market shares. This includes both organic growth and
growth by acquisitions, particularly if an opportunity arises
to strategically expand the existing portfolio or take
advantage of economies of scale. The goal is to increase
market share to a minimum of 10 % in Poland, Hungary,
Croatia and Serbia in the medium term. This goal was
already achieved in one of these countries, Serbia, in 2016.
In November 2020, VIG Insurance Group signed a purchase
agreement with the Dutch company Aegon N.V. to acquire
its companies in Hungary, Poland, Romania and Turkey for
EUR 830 million. The transaction includes insurance
companies, pension funds and asset management and
service companies. The acquisition will give VIG Insurance
Group a market share of more than 19 %, making it the
market leader in Hungary for the first time. It will also enter
the life insurance business in Turkey, and acquisition of the
pension fund companies in Hungary, Poland and Romania
will strengthen its activities in the area of retirement
provisions. The acquisition will increase our customer base
by 4.5 million. The transaction is subject to the approvals
required under supervisory and competition law and is
expected to be formally concluded in the 2
nd
half of 2021.
The strategic measures and initiatives set by the Agenda
2020 work programme – business model optimisation,
ensuring future viability and organisation and cooperation –
contributed to the solid performance achieved in 2020. The
next strategic programme for the period until 2025 is
currently being prepared and will continue to focus on
efficiency and potential synergies. It will be presented in the
2
nd
quarter of 2021.
Based on the current interest rate situation and long-term
capital planning of the Group, the Managing Board initiated
measures to optimise the capital of the Group, focusing on
increasing investments in socially and environmentally
sustainable projects. Depending on market conditions, a
senior sustainability bond will be issued in the 1
st
half of the
year with a volume EUR 500 million. A subordinated bond
with a volume of EUR 300 million was also placed as a
restricted tier 1 instrument with the principal shareholder of
Vienna Insurance Group, Wiener Städtische
Versicherungsverein.
Under its dividend policy, which foresees a distribution in
the range of 30 to 50 % of Group net profits, the dividend
per share will continue to be aligned with the Company’s
performance.
Due to the fact that there is still no foreseeable end to the
COVID-19 pandemic, estimates of business development
for financial year 2021 are still highly uncertain. Although
VIG Insurance Group has so far managed very well during
this exceptional period and is in a position to continue
managing its operations well, negative effects due to
economic developments have to be expected based on the
current situation. Taking this and current parameters into
account, VIG Insurance Group expects premium volume to
remain stable at the level of 2020 and profit before taxes to
be in the range of EUR 450 to 500 million. As the closing
has not yet taken place, the Aegon companies are not
included in the outlook for 2021. The combined ratio is
expected to remain at a sustainable level of around 95 %. In
accordance with its dividend policy, the Managing Board of
Vienna Insurance Group will propose a dividend of
EUR 0.75 for financial year 2020. This corresponds to a
dividend payout ratio of 41.5 %.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
203
Outlook for VIG Holding
VIG Holding has set a goal for financial year 2021 of
increasing its premium volume from international
reinsurance and cross-border corporate business. VIG
Holding will also work with the insurance companies to
further focus the strategic priorities and optimise processes
and earning power.
Appropriate measures will be implemented and coordinated
to achieve these goals.
In addition, the Group’s attractiveness as an employer with
an international background will be increased and
sustainable business operations for people and the
environment will be further expanded.
Vienna, 17 March 2021
The Managing Board:
Pr Elisabeth Stadler
General Manager, Chairwoman of
the Managing Board
Liane Hirner
CFO, Member of the Managing
Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
204
Annual Financial Report 2020
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
205
Annual
financial
statements
in accordance with
the Austrian
Commercial Code (UGB)
206
Annual Financial Report 2020
BALANCE SHEET AS OF 31 DECEMBER 2020
Assets 31.12.2020
31.12.2019
in EUR
in EUR '000
A. Intangible assets 16,058,938.05
17,439
I. Other intangible assets 16,058,938.05
17,439
B. Investments 6,136,576,683.64
6,275,709
I. Land and buildings 125,069,948.90
117,122
II. Investments in affiliated companies and participations 4,763,484,192.75
4,795,028
1. Shares in affiliated companies 4,328,867,121.56
4,318,956
2. Bonds and other securities of affiliated companies and loans to affiliated companies 409,700,000.00
451,856
3. Participations 24,417,071.19
24,216
4. Bonds and other securities of and loans to companies in which an ownership interest is held 500,000.00
0
III. Other investments 222,066,186.15
249,233
1. Shares and other non-fixed-interest securities 128,085,163.70
120,378
2. Bonds and other fixed-interest securities 80,890,936.00
70,700
3. Mortgage receivables 2,178,000.01
2,252
4. Other loans 912,086.44
903
5. Bank deposits 10,000,000.00
55,000
IV. Deposits on assumed reinsurance business 1,025,956,355.84
1,114,326
C. Receivables 214,795,081.02
196,987
I. Receivables from direct insurance business 19,596,788.50
7,742
1. from policyholders 6,998,356.53
2,927
2. from insurance intermediaries 82,158.93
82
3. from insurance companies 12,516,273.04
4,733
II. Receivables from reinsurance business 39,757,559.21
55,958
III. Other receivables 155,440,733.31
133,287
D. Pro rata interest 7,400,821.44
7,213
E. Other assets 566,868,214.83
204,341
I. Tangible assets (not incl. land and buildings) 1,898,428.14
1,351
II. Current bank balances and cash on hand 564,969,786.69
202,989
III. Other assets 0.00
1
F.Deferred charges 5,618,198.00
1,239
Total ASSETS 6,947,317,936.98
6,702,928
Annual
financial statements
2
020
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
207
BALANCE SHEET AS OF 31 DECEMBER 2020
Liabilities and shareholders' equity 31.12.2020
31.12.2019
in EUR
in EUR '000
A. Shareholders' equity 3,440,911,068.45
3,502,631
I. Share capital
Par value 132,887,468.20
132,887
II. Capital reserves
Committed reserves 2,267,232,422.07
2,267,232
III. Retained earnings
Free reserves 756,715,354.17
756,716
IV. Risk reserve 44,845,010.00
44,845
V. Net retained profits 239,230,814.01
300,951
of which brought forward 153,750,530.64
105,117
B. Subordinated liabilities 1,100,000,000.00
1,100,000
I. Supplementary capital bond 1,100,000,000.00
1,100,000
C. Underwriting provisions – retention 1,308,738,101.53
1,244,140
I. Unearned premiums 114,010,884.07
100,447
1. Gross 118,049,618.59
102,607
2. Reinsurers' share -4,038,734.52
-2.160
II. Provision for outstanding claims 1,177,741,466.46
1,129,041
1. Gross 1,297,726,300.63
1,207,240
2. Reinsurers' share -119,984,834.17
-78.199
VI. Equalisation provision 14,753,751.00
12,745
III. Other underwriting provisions 2,232,000.00
1,907
1. Gross 2,232,000.00
1,907
D. Non-underwriting provisions 167,630,434.60
183,909
I. Provision for severance pay 845,502.00
667
II. Provision for pensions 56,554,922.00
52,130
III. Tax provisions 3,500,357.14
3,500
IV. Other provisions 106,729,653.46
127,612
E. Other liabilities 928,233,548.71
671,545
I. Liabilities from direct insurance business 112,485,230.89
54,111
1. to policyholders 31,894,725.45
22,389
2. to insurance intermediaries 777,008.52
495
3. to insurance companies 79,813,496.92
31,227
II. Liabilities from reinsurance business 18,387,948.88
6,709
III. Liabilities to financial institutions 192,751,122.65
75,101
IV. Other liabilities 604,609,246.29
535,624
F.Deferred charges 1,804,783.69
703
Total LIABILITIES AND SHAREHOLDERS' EQUITY 6,947,317,936.98
6,702,928
208
Annual Financial Report 2020
INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY 2020 TO 31 DECEMBER 2020
Underwriting account 2020
2019
in EUR
in EUR '000
1. Net earned premiums 1,058,581,502.49
1,033,253
Premiums written 1,073,201,430.21
1,042,813
Gross 1,145,138,175.96
1,100,026
Ceded reinsurance premiums -71,936,745.75
-57.213
Change in unearned premiums -14,619,927.72
-9.560
Gross -16,498,608.46
-10.505
Reinsurers' share 1,878,680.74
945
2. Investment income from underwriting business 11,364,339.98
18,047
3. Other underwriting income 453,568.47
66
4. Expenses for claims and insurance benefits -632,645,934.97
-664.372
Payments for claims and insurance benefits -561,102,495.02
-646.150
Gross -573,924,698.61
-686.058
Reinsurers' share 12,822,203.59
39,908
Change in provision for outstanding claims -71,543,439.95
-18.222
Gross -114,586,831.26
-17.096
Reinsurers' share 43,043,391.31
-1.126
5. Increase in underwriting provisions -325,125.00
-432
Other underwriting provisions -325,125.00
-432
Gross -325,125.00
-432
6. Administrative expenses -409,499,172.27
-354.831
Acquisition expenses -410,403,963.09
-355.333
Other administrative expenses -2,253,630.34
-1.252
Reinsurance commissions and profit commissions from reinsurance cessions 3,158,421.16
1,754
7. Other underwriting expenses -866,937.32
-851
8. Change in the equalisation provision -2,008,257.00
3,151
Underwriting result 25,053,984.38
34,031
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
209
INCOME STATEMENT FOR THE FINANCIAL YEAR FROM 1 JANUARY 2020 TO 31 DECEMBER 2020
2020
2019
in EUR
in EUR '000
Underwriting result 25,053,984.38
34,031
Non-underwriting account:
1. Income from investments and interest income 432,011,642.11
501,586
Income from participations 315,881,564.06
304,085
Income from land and buildings 13,415,052.06
12,575
Income from other investments 26,434,024.64
27,024
Income from appreciations 53,297,627.49
72,408
Income from the disposal of investments 11,310,126.78
67,052
Other investment and interest income 11,673,247.08
18,442
2. Expenses for investments and interest expenses -409,333,368.08
-315.386
Expenses for asset management -90,146,195.10
-92.057
Depreciation of investments -208,435,395.85
-149.560
Interest expenses -72,487,824.65
-70.061
Losses from the disposal of investments -2,595,580.64
-2.809
Other investment expenses -35,668,371.84
-899
3. Investment income transferred to the underwriting account -11,364,339.98
-18.047
4. Other non-underwriting income 30,571,470.73
6,269
5. Other non-underwriting expenses -5,555,008.00
-5.936
6. Result from ordinary activities 61,384,381.16
202,517
8. Taxes on income 24,095,902.21
20,317
8. Profit for the period 85,480,283.37
222,834
9. Transfer to reserves 0.00
-27.000
Transfer to free reserves 0.00
-27.000
10. Profit for the year 85,480,283.37
195,834
11. Retained profits brought forward 153,750,530.64
105,117
Net retained profits 239,230,814.01
300,951
210
Annual Financial Report 2020
NOTES TO THE FINANCIAL STATEMENTS FOR 2020
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The annual financial statements as of 31 December 2020
were prepared in accordance with the accounting
provisions of the Austrian Commercial Code (UGB) and the
special provisions of the Austrian Insurance Supervision Act
(VAG), as amended, and in
accordance with Austrian
generally accepted accounting principles
and the general
standard of presenting a true and fair view of the net assets,
financial position and results of operations of the Company.
Measurement was performed assuming the Company
would continue as a going concern.
The measurement methods that were previously used were
also used in financial year 2020.
The
precautionary principle
was satisfied in that only profits
that had been realised as of the balance sheet date were
reported and all identifiable risks and impending losses
were recorded in the balance sheet.
Figures are generally shown in thousands of euros
(EUR '000). Calculation differences may arise when
rounded amounts are summed automatically. Figures from
the previous year are indicated as such or shown in
parentheses.
Intangible assets
were reported at cost less amortisation
based on a useful life of three to ten years.
Land
is measured at cost,
buildings
at cost less
depreciation and any write-downs. As a rule, repair costs
for residential buildings are spread over 15 years starting as
of 2016.
Equities
and other non-fixed interest
securities
and
shares
in affiliated companies
are valued according to the strict
lower-of-cost-or-market principle (strenges Niederstwert-
prinzip). Bonds, other fixed-income securities and
participations
are valued using the less strict lower-of-cost-
or-market principle (gemildertes Niederstwertprinzip)
provided for in § 149(1) VAG.
Valuation using the less strict lower-of-cost-or-market
principle resulted in write-downs of EUR 24 (EUR 0) not
being performed.
The Company takes into account the overall risk position of
the Company and the investment strategy provided for this
purpose when making investments in fixed-interest
securities, real estate, participations and shares. The risk
inherent in the specified categories and the market were
taken into account when determining exposure volumes
and limits.
The investment strategy is laid down in the form of
investment guidelines that are continuously monitored for
compliance by the corporate risk controlling and internal
audit departments. The corporate risk controlling
department reports regularly to the tactical and strategic
investment committee. The internal audit department
reports regularly to the Managing Board.
As a rule, investments are generally low-risk. The strategic
investment committee decides on potential high-risk
investments based on the inherent risk of each individual
investment after performing a full analysis of all related risks
and liquidity at risk, and considering all assets currently in
the portfolio and the effects of the individual investments on
the overall risk position. All known financial risks are
assessed regularly and specific limits or reserves are used
to limit exposure. Security price risk is reviewed periodically
using value-at-risk and stress tests. Default risk is measured
using both internal and external rating systems.
An important goal of investment and liquidity planning is to
maintain adequate amounts of liquid, value-protected
financial investments. Liquidity planning therefore takes into
account the trend in insurance benefits and the majority of
investment income is generally reinvested.
Eight forward exchange transactions in the CZK and PLN
currencies with terms limited to 19/05/2021 existed as of
the 31 December 2020 balance sheet date. The
transactions are being used to hedge future dividends in
foreign currency. A provision for expected losses in the
amount of EUR 1,069,000 (EUR 613,000) was formed for
the five forward exchange transactions whose market
values were negative as of the reporting date.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
211
The remaining four forward exchange transactions had a
positive market value of EUR 515,000 on the reporting date
(EUR 26,000).
Amounts denominated in
foreign currencies
are translated
to euros using the appropriate mean rate of exchange.
As a rule,
mortgage receivables and other loans
, including
those to affiliated companies and companies in which a
participation is held, are measured at the nominal value of
the outstanding receivables. Discounts deducted from loan
principal are spread over the term of the loan and shown
under deferred income.
Specific valuation allowances of adequate size are formed
for doubtful
receivables
and deducted from their nominal
values.
Tangible assets
(not including land and buildings) are
measured at cost less accumulated depreciation. Low-cost
assets are fully written off in the year of purchase.
Unearned premiums
were essentially calculated by
prorating over time after applying a deduction for expenses
(15 %) of EUR 1,524,000 (EUR 969,000).
The
provision for outstanding claims
for direct business is
calculated for claims reported by the balance sheet date by
individually assessing claims that have not yet been settled
and adding lump-sum safety margins for large unexpected
losses. Lump-sum provisions based on past experience are
formed for claims incurred but not reported. Recourse
claims of EUR 783,000 (EUR 9,322,000) were included.
In
indirect business
, provisions for outstanding claims are
primarily based on reports from ceding companies as of the
31 December 2020 balance sheet date. The reported
amounts were increased where this was considered
necessary in light of past experience.
The
underwriting items for assumed reinsurance business
and associated retrocessions are included immediately in
the annual financial statements.
The equalisation provision is calculated in accordance with
the directive of the Austrian Federal Minister of Finance,
BGBl. (Federal Gazette) No. 315/2015. The calculation has
been performed for direct and indirect business combined
since financial year 2016.
The
provisions for severance pay, pensions, and
anniversary bonuses
are based on the pension insurance
calculation principles of the Actuarial Association of Austria
(AVÖ), AVÖ 2018-P (Employees), assuming a wage growth
rate of 2.00 % (2.00 %) and a discount rate of 0.97 %
(1.28 %) p.a. for the severance provision, 1.68 % (2.06 %)
for the pension provision and 1.21 % (1.51 %) for the
anniversary bonus provision. The discount rate used was
based on the 7-year average interest rate as published by
the German Bundesbank. The severance pay, pension and
anniversary bonus obligations were valued using the
projected unit credit method. The retirement age used to
calculate the provisions for anniversary bonuses and
severance pay is the statutory minimum retirement age as
stipulated in the Austrian General Social Security Act (ASVG)
(2004 reform), subject to a maximum age of 62 years. The
retirement age used to calculate the provision for pensions
is based on each individual agreement, or the statutory
minimum retirement age as stipulated in the Austrian
General Social Security Act (ASVG) (2004 reform). The
following percentages were used for employee turnover
based on age: <31 4.0 %, 31–35 2.0 %, 36–40 2.0 %, 41–
50 1.5 %, 51–55 0.5 % and 56–65 0 %. The severance
entitlement used to calculate the provision for severance
obligations is based on each individual agreement or on the
collective agreement. The following percentages were used
for employee turnover based on age: <30 5.5 %, 30–39
2.0 %, 40–50 1.5 %, 51–59 1.0 % and 60–65 0.5 %.
EUR 3,108,000 (EUR 3,211,000) in provisions have been
formed for direct pension obligations. A portion of the direct
benefits equal to EUR 252,000 (EUR 250,000) will be
administered as an occupational group insurance plan after
an insurance contract has been concluded in accordance
with §§ 93-98 VAG, so that the provision will equal the
overall obligation less the outsourced plan assets.
212
Annual Financial Report 2020
The severance pay provision required under Austrian
commercial law for 2020 was EUR 2,520,000 (EUR 2,432,000).
The amount earmarked for satisfying the outsourced
severance pay obligations that was held by the outside
insurance company was EUR 1,675,000 (EUR 1,765,000).
The difference of EUR 846,000 (EUR 667,000) between the
size of the severance pay provisions to be formed under
Austrian commercial law and the deposit held by the
outside insurance company is reported under provisions for
severance pay in the balance sheet.
II. NOTES TO THE BALANCE SHEET
The book values of intangible assets, land and buildings, investments in affiliated companies and ownership interests have
changed as follows:
Intangible assets
Land and
buildings
Shares in
affiliated
companies
Bonds and other
securities of
affiliated
companies and
loans to affiliated
companies
Participations
Bonds and other
securities of and
loans to
companies in
which an
ownership interest
is held
in EUR '000
As of 31 December 2019 17,438
117,122
4,318,955
451,856
24,216
0
Additions 2,738
12,562
205,224
0
2,292
500
Disposals 0
392
74,318
12,530
2,091
0
Appreciation 0
0
52,679
374
0
0
Depreciation 4,117
4,222
173,673
30,000
0
0
As of 31 December 2020 16,059
125,070
4,328,867
409,700
24,417
500
Intangible assets
with a value of EUR 827,000 (EUR 20,000)
were acquired from affiliated companies during the financial
year. The value of developed and undeveloped properties
was EUR 30,134,000 (EUR 29,895,000) as of 31 Decem-
ber 2020. The
carrying amount of self-used property
was
EUR 22,501,000 (EUR 19,677,000). The following com-
pany was merged in financial year 2020: SEESAM
INSURANCE AS into Compensa Vienna Insurance Group,
akcine draudimo bendrove. The book values of the
absorbed company were transferred to the book values of
the absorbing company.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
213
The investments have the following carrying amounts and fair values:
Items under § 144 Abs. 2 VAG Book Value
Fair value
Book Value
Fair value
2020
2020
2019
2019
in EUR '000
Land and buildings 125,070
561,474
117,122
543,850
thereof appraisal reports 2016 1,880
2,890
1,888
2,890
thereof appraisal reports 2017 301
2,420
49,750
116,970
thereof appraisal reports 2018 15,511
147,350
13,886
147,350
thereof appraisal reports 2019 40,149
219,200
51,598
276,640
thereof appraisal reports 2020 67,229
189,614
0
0
Shares in affiliated companies 4,328,867
8,448,271
4,318,955
9,055,970
Bonds and other securities of affiliated companies and loans to affiliated companies 409,700
514,241
451,856
565,040
Participations 24,417
28,297
24,216
27,340
Bonds and other securities of and loans to companies in which an ownership
interest is held
500
553
0
0
Shares and other non-fixed-interest securities 128,086
136,274
120,378
127,586
Bonds and other fixed-interest securities 80,891
92,340
70,700
80,025
Mortgage receivables 2,178
2,396
2,252
2,445
Other loans 912
1,371
903
1,142
Bank balances 10,000
10,000
55,000
55,000
Deposits receivables 1,025,956
1,025,956
1,114,326
1,114,326
Total 6,136,577
10,821,173
6,275,708
11,572,724
Hidden reserves fell by EUR 612,420,000 to a total of
EUR 4,684,596,000 (EUR 5,297,016,000).
The fair values of
land and buildings
were determined in
accordance with the recommendations of the Austrian
Association of Insurance Companies. The values are based
on appraisal reports.
The fair values of
shares in affiliated companies
and shares
in companies in which a participation is held correspond to
available market values. If no such value exists, the
purchase price is used as the fair value, if necessary
reduced by any write-downs, or a proportionate share of
the publicly reported equity capital, whichever is greater.
To test for impairment, the individual book values are first
compared with the fair value or a proportionate share of the
equity capital of the affiliated company. The fair values of
shares in affiliated companies are either based on valuation
reports obtained from external parties or internal valuations.
Stock exchange values were used as far as possible for the
fair value of
shares and other non-fixed interest securities,
and of bonds and other fixed interest securities
(including
those from affiliated companies). The Company uses
purchased software to calculate the fair value of securities
that do not have public market or stock market values
based on discounted cash flows.
The remaining investments were valued at their nominal
values, reduced by write-downs where necessary.
Recognised mathematical models (discounted cash flows)
were used to calculate the market values of
mortgage loans
and
other loans
.
214
Annual Financial Report 2020
The
other loans
not secured by insurance contracts are
loans of EUR 912,000 (EUR 898,000) to the Republic of
Austria and loans of EUR 0 (EUR 5,000) to other borrowers.
The other loans do not include any loans (EUR 0) with
remaining terms of up to one year.
The
subordinated liabilities
balance sheet item consists of the bonds listed in the table below, which were issued in the form
of securities.
Name 2020
2019
in EUR '000
Supplementary capital bond 2013 - 2043 500,000
500,000
Supplementary capital bond 2015 - 2046 400,000
400,000
Supplementary capital bond 2017 - 2047 200,000
200,000
Total 1,100,000
1,100,000
The following balance sheet items are attributable to affiliated companies and companies in which a participation is held:
Affiliated companies
Companies in which an ownership
interest is held
2020
2019
2020
2019
in EUR '000
Mortgage receivables 2,178
2,252
0
0
Deposits receivables 1,025,956
1,114,326
0
0
Receivables from direct insurance business 224
2,820
0
0
Receivables from reinsurance business 15,724
33,664
0
0
Other receivables 143,895
118,958
8
0
Liabilities from direct insurance business 2,348
1,443
0
0
Liabilities from reinsurance business 14,296
2,141
0
0
Other liabilities 532,646
498,310
0
0
The change in the
personnel provision
was recognised in
personnel expenses. The interest expenses for personnel
provisions of EUR 4,917,000 (EUR 4,663,000) are reported
under investment and interest expenses.
The
other provisions
of EUR 106,730,000 (EUR 127,612,000)
mainly consist of IT provisions of EUR 79,655,000
(EUR 93,792,000), provisions for unused vacation time of
EUR 2,516,000 (EUR 1,861,000), provisions for variable salary
components of EUR 8,550,000 (EUR 7,579,000), provisions
for customer support and marketing of EUR 489,000
(EUR 874,000) and provisions for anniversary bonuses of
EUR 1,088,000 (EUR 929,000).
The amount shown under
other liabilities
includes
EUR 7,000 (EUR 5,000) in tax liabilities and EUR 552,000
(EUR 485,000) in social security liabilities.
The following disclosures are provided for
off-balance
sheet contingent liabilities
: Letters of comfort totalling
EUR 75,000,000 (EUR 0) and liability undertakings of
EUR 44,103,000 (EUR 44,103,000) have been issued for
affiliated companies in connection with borrowing.
VIG Holding issued a guarantee to its subsidiary Wiener
Städtische Versicherung AG Vienna Insurance Group in
December 2019 that obligates it to subscribe to up to
EUR 350,000,000 in deeply subordinated bonds upon
demand by Wiener Städtische. The guarantee has a term
of 10 years.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
215
Liabilities arising from the use of off-balance sheet tangible assets
were EUR 2,186,000 (EUR 2,057,000) for the following
financial year and EUR 11,608,000 (EUR 10,919,000) for the following five years.
III. NOTES TO THE INCOME STATEMENT
Premiums written, net earned premiums, expenses for insurance claims and benefits, administrative expenses and reinsurance
balance had the following breakdown for property and casualty insurance in 2020:
Gross Premiums written
Net earned
premiums
Expenses for
claims and
insurance
benefits
Administrative
expenses
Reinsurance
balance
in EUR '000
Direct business
Fire and fire business interruption insurance 110,568
108,528
99,916
11,294
8,208
Liability insurance 3,449
3,181
715
665
-1.515
Marine, aviation and transport insurance 1,954
1,615
1,125
312
-413
Other non-life insurance 16,782
16,286
10,226
1,712
-6.562
Total direct business 132,753
129,610
111,982
13,983
-282
(Previous year values) 98,276
99,738
86,664
11,196
978
Indirect business
Marine, aviation and transport insurance 0
0
8
-1
7
Other insurance 1,012,385
999,029
576,522
398,675
-10.759
Total indirect business 1,012,385
999,029
576,530
398,674
-10.752
(Previous year values) 1,001,750
989,784
616,490
345,389
-16.710
Total direct and indirect business 1,145,138
1,128,639
688,512
412,657
-11.034
(Previous year values) 1,100,026
1,089,522
703,154
356,585
-15.732
The
reinsurance balance
is composed of net earned
reinsurance premiums, effective reinsurance claims and
reinsurance commissions.
The run-off result for property and casualty insurance was
EUR 15,912,000 (EUR 13,751,000) for financial year 2020.
The result from
indirect business
was EUR 35,190,000
(EUR 45,951,000). The net earned premiums of
EUR 999,029,000 (EUR 989,784,000) from indirect
business were included immediately in the income
statement.
Of the income from participations, land and buildings and other investments shown in the income statement, affiliated companies
accounted for the following amounts:
2020
2019
in EUR '000
Income from participations 313,837
302,402
Income from other investments 22,324
23,525
Income from land and buildings 672
929
216
Annual Financial Report 2020
The funds in the portfolio distributed EUR 2,029,000
(EUR 1,754,000) during the financial year.
The deposit interest income for indirect business was
transferred to the underwriting account.
Losses on disposals of investments
were EUR 2,596,000
(EUR 2,809,000) in financial year 2020.
The expenses for insurance claims and benefits, administrative expenses, other underwriting expenses and investment expenses
include:
2020
2019
in EUR '000
Wages and salaries 30,807
25,876
Expenses for severance benefits and payments to company pension plans 664
368
Expenses for retirement provisions 1,814
2,864
Expenses for statutory social contributions and income-related contribution and mandatory contributions 6,020
4,935
Other social security expenses 126
245
Commissions
of EUR 9,678,000 (EUR 8,334,000) were
incurred for direct business in financial year 2020.
A summary of
auditing fees
is provided in the notes to the
consolidated financial statements of VIENNA INSURANCE
GROUP AG Wiener Versicherung Gruppe, Vienna.
Deferred profit taxes of EUR 0 (EUR 0) were recognised due
to temporary differences between earnings under commer-
cial law and taxable earnings. A tax rate of 22.5 % was
chosen for deferred taxes based on the provisions of the
tax allocation agreement with the parent company.
Deferred taxes
31.12.2020
31.12.2019
in EUR '000
Shares in affiliated companies 33,257
48,119
investments 1,161
-681
Tangible assets (not incl. land and buildings) and inventories 43
20
Valuation reserve -20.533
-21.100
subordinated liabilities 4,501
4,694
Underwriting provision – retention 78,442
74,497
Long-term personnel provisions 35,323
32,004
other provisions 69,156
79,514
Temporary differences 201,350
217,067
Not subject to tax -201.350
-217.067
Total differences 0
0
Resulting deferred taxes as at 31 December (22.5 %) 0
0
Deferred taxes changed as follows:
As of 1 January 0
4,387
Changes recognised in the income statement 0
-4.387
As of 31 December 0
0
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
217
IV. SIGNIFICANT PARTICIPATIONS
Company
Direct interest
in capital (%)
Equity capital
(EUR '000)
Share of
Capital (EUR
'000)
Result of the
year
(EUR '000)
Share of profit
for the year
(EUR '000)
Last annual
financial
statements
Affiliated companies
ASIGURAREA ROMANEASCA
-
ASIROM VIENNA
INSURANCE GROUP S.A., Bucharest 88.70
85,031
75,422
-2,433
-2,158
2020
ATBIH GmbH, Vienna 68.97
182,488
125,862
21,001
14,484
2020
BCR Asigurari de Viata Vienna Insurance Group S.A.,
Bucharest 93.98
47,537
44,675
6,198
5,825
2020
BTA Baltic Insurance Company AAS, Riga 100.00
71,897
71,897
12,603
12,603
2020
Beesafe Spolka z O
granziczona Odpowiedzialnoscia,
Warsaw * 80.00
Compania de Asigurari
"DONARIS VIENNA INSURANCE
GROUP" Societate pe Actiuni, Chisinau 99.99
4,837
4,837
465
465
2020
Compensa Life Vienna Insurance Group SE, Tallinn 100.00
51,483
51,483
3,385
3,385
2020
Compensa Towarzystwo Ubezpieczen Na Zycie Spolka
Akcyjna Vienna Insurance Group, Warsaw
84.14
72,226
60,771
4,277
3,599
2020
Compensa Towarzystwo Ubezpieczen Spolka Akcyjna
Vienna Insurance Group, Warsaw 70.67
140,163
99,053
25,048
17,701
2020
Compensa Vienna Insurance Group, akcine draudimo
bendrove, Vilnius
100.00
88,220
88,220
2,077
2,077
2020
DONAU Versicherung AG Vienna Insurance Group, Vienna 74.24
104,360
77,477
8,406
6,241
2020
ELVP Beteiligungen GmbH, Vienna 100.00
23,322
23,322
4
4
2020
Foreign limited liability company "InterInvestUchastie",
Minsk
99.95
206
206
-4
-4
2019
GLOBAL ASSISTANCE SERVICES SRL, Bucharest 40.00
1
0
-75
-30
2019
GLOBAL ASSISTANCE SERVICES s.r.o., Prague 100.00
229
229
26
26
2019
GLOBAL ASSISTANCE SLOVAKIA s.r.o., Bratislava 40.00
41
17
17
7
2019
GLOBAL ASSISTANCE, a.s., Prague 60.00
4,931
2,959
2,132
1,279
2019
Global Assistance Polska Spolka z ograniczona
odpowiedzialnoscia, Warsaw 40.00
136
54
-198
-79
2019
INSHIFT GmbH & Co. KG, Cologne * 23.53
INSURANCE JOINT-STOCK COMPANY "BULSTRAD VIENNA
INSURANCE GROUP", Sofia 14.20
59,540
8,455
7,767
1,103
2020
INTERSIG VIENNA INSURANCE GROUP Sh.A., Tirana 89.98
6,085
5,475
723
651
2020
Insurance Company Vienna osiguranje d.d., Vienna
Insurance Group, Sarajewo 100.00
9,921
9,921
148
148
2020
Stock Company for Insurance and Reinsurance
MAKEDONIJA Skopje Vienna Insurance Group, Skopje 94.26
25,925
24,437
885
834
2020
InterRisk Towarzystwo Ubezpieczen Spolka Akcyjna Vienna
Insurance Group, Warsaw 100.00
112,131
112,131
15,151
15,151
2020
In
terRisk
Versicherungs
-
AG Vienna Insurance Group,
Wiesbaden 100.00
53,770
53,770
14,500
14,500
2020
Joint Stock Insurance Company WINNER LIFE - Vienna
Insurance Group Skopje, Skopje 100.00
3,919
3,919
137
137
2019
KOMUNALNA poistovna, a.s. Vienna Insurance Group,
Bratislava 100.00
76,662
76,662
2,251
2,251
2020
KOOPERATIVA poist'ovna, a.s. Vienna Insurance Group,
Bratislava 94.37
408,100
385,124
38,546
36,376
2020
KUPALA Belarusian-Austrian Closed Joint Stock Insurance
Company, Minsk 52.34
8,162
4,272
1,668
873
2019
* wurde im Geschäftsjahr 2020 neu gegründet
218
Annual Financial Report 2020
Company
Direct interest
in capital (%)
Equity capital
(EUR '000)
Share of
Capital (EUR
'000)
Result of the
year
(EUR '000)
Share of profit
for the year
(EUR '000)
Last an
nual
financial
statements
Affiliated companies
Kooperativa, pojist'ovna, a.s. Vienna Insurance Group,
Prague 95.84
754,598
723,207
121,284
116,239
2020
LVP Holding GmbH, Vienna 100.00
591,192
591,192
-22,836
-22,836
2020
OMNIASIG VIENNA INSURANCE GROUP S.A., Bucharest 99.54
149,566
148,878
6,886
6,854
2020
Private Joint-Stock Company "Insurance company"
Ukrainian insurance group", Kiev 6.90
17,594
1,214
2,123
146
2020
PRIVATE JOINT-STOCK COMPANY "UKRAINIAN
INSURANCE COMPANY "KNIAZHA VIENNA INSURANCE
GROUP", Kiev 90.56
8,481
7,680
2,735
2,477
2020
Private Joint-Stock Company "INSURANCE COMPANY
"KNIAZHA LIFE VIENNA INSURANCE GROUP", Kiev 97.94
2,743
2,686
440
431
2020
RISK CONSULT Sicherheits- und Risiko-
Managementberatung Gesellschaft m.b.H., Vienna 41.00
678
278
381
156
2019
Ray Sigorta Anonim Sirketi, Istanbul 12.67
37,079
4,698
7,315
927
2020
SIA "Global Assistance Baltic", Riga 33.33
300
100
0
0
2020
SIGMA INTERALBANIAN VIENNA INSURANCE GROUP
Sh.A., Tirana
89.05
14,918
13,284
1,561
1,390
2020
TBI BULGARIA EAD in Liquidation, Sofia 100.00
40,437
40,437
-64
-64
2020
UNION Vienna Insurance Group Biztositó Zrt., Budapest 98.64
50,254
49,571
7,216
7,118
2020
VIG Asset Management, a.s., Prague 100.00
597
597
94
94
2019
VIG Management Service SRL, Bucharest 52.08
8,087
4,212
137
71
2019
VIG Properties Bulgaria AD, Sofia 99.97
3,746
3,745
15
15
2020
VIG RE zajist'ovna, a.s., Prague 55.00
180,831
99,457
16,770
9,224
2020
VIG Services Ukraine, LLC, Kiev 6.98
1,461
102
-62
-4
2020
VIG-CZ Real Estate GmbH, Vienna 90.00
140,059
126,053
33
30
2020
Vienna Insurance Group Polska Spolka z ograniczona
odpowiedzialnoscia, Warsaw 51.43
18,639
9,586
48
25
2019
Vienna International Underwriters GmbH, Vienna 100.00
360
360
50
50
2019
Vienna Life Towarzystwo Ubezpieczen na Zycie S.A.
Vienna Insurance Group, Warsaw
100.00
4,167
4,167
-12,619
-12,619
2020
Vienna-Life Lebensversicherung AG Vienna Insurance
Group, Bendern 100.00
9,163
9,163
487
487
2020
WIENER STÄDTISCHE OSIGURANJE akcionarsko drustvo
za osiguranje Beograd, Belgrad
100.00
62,421
62,421
10,261
10,261
2020
WIENER STÄDTISCHE VERSICHERUNG AG Vienna
Insurance Group, Vienna 90.82
545,874
495,763
86,582
78,634
2020
Joint Stock Insurance Company WINNER-Vienna Insurance
Group, Skopje 100.00
7,138
7,138
555
555
2020
Wiener Osiguranje Vienna Insurance Group ad, Banja Luka
100.00
9,088
9,088
115
115
2020
Akcionarsko drustvo za zivotno osiguranje Wiener
Städtische Podgorica, Vienna Insurance Group, Podgorica 100.00
5,659
5,659
432
432
2019
Wiener Towarzystwo Ubezpiezen Spolka Akcyjna Vienna
Insurance Group, Warsaw 100.00
44,171
44,171
8,609
8,609
2020
Wiener osiguranje Vienna Insurance Group dionicko
drustvo za osiguranje, Zagreb 97.82
107,483
105,140
5,309
5,193
2020
twinformatics GmbH, Vienna 20.00
2,546
509
589
118
2020
Participations
Wiener Börse AG, Vienna 8.50
30,669
2,607
18,801
1,598
2019
Erste Asset Management GmbH, Vienna 0.76
107,701
819
44,284
337
2019
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
219
V. OTHER DISCLOSURES
The Company has total share capital of
EUR 132,887,468.20. It is divided into 128,000,000 no-par
value bearer shares with voting rights, with each share
representing an equal portion of the share capital. The
number of shares issued remains unchanged since the
previous financial year.
The Managing Board is not aware of any restrictions on
voting rights or the transfer of shares.
Wiener Städtische Versicherungsverein holds (directly or
indirectly) approximately 72.47 % of the share capital.
No shares have special rights of control. See the following
paragraph for information on the rights of the shareholder
Wiener Städtische Versicherungsverein.
The Managing Board must have at least three and no more
than eight members. The Supervisory Board has between
three and ten members (shareholder representatives). The
shareholder Wiener Städtische Versicherungsverein has the
right to appoint up to one third of the members of the
Supervisory Board if, and so long as, it holds 50 % or less
of the Company’s voting shares. General Meeting
resolutions are adopted by a simple majority, unless a
different majority is mandatory by law or the articles of
association.
Employees who hold shares exercise their voting rights
without a proxy during General Meetings.
The Managing Board is authorised to increase the share
capital of the Company by a nominal amount of
EUR 66,443,734.10 by issuing 64,000,000 no-par value
bearer or registered shares in one or more tranches on or
before 11 May 2022 against cash or in-kind contributions.
The terms of the shares, the exclusion of shareholder pre-
emption rights, and other terms and conditions of the share
issue are decided by the Managing Board, subject to
Supervisory Board approval. Preferred shares without
voting rights may also be issued, with rights equivalent to
those of existing preferred shares. The issue prices of
common and preferred shares may differ.
The General Meeting of 12 May 2017 authorised the
Managing Board to issue, subject to Supervisory Board
approval, one or more tranches of bearer convertible bonds
with a total nominal value of up to EUR 2,000,000,000.00
on or before 11 May 2022, with or without exclusion of
shareholder pre-emptive rights, and to grant the holders of
convertible bonds conversion rights for up to 30,000,000
no-par value bearer shares with voting rights in accordance
with the convertible bond terms set by the Managing Board.
The share capital has consequently been raised in
accordance with § 159(2) no. 1 of the Austrian Stock
Corporation Act (AktG) by a contingent capital increase of
up to EUR 31,145,500.36, through the issue of up to
30,000,000 no-par value bearer shares with voting rights.
The contingent capital increase will only be implemented to
the extent that holders of convertible bonds issued on the
basis of the General Meeting resolution of 12 May 2017
exercise the subscription or exchange rights they were
granted.
The Managing Board has not adopted any resolutions to
date concerning the issuance of convertible bonds based
on the authorisation granted on 12 May 2017.
The General Meeting of 12 May 2017 further authorised the
Managing Board to issue, subject to Supervisory Board
approval, one or more tranches of bearer income bonds
with a total nominal value of up to EUR 2,000,000,000.00
on or before 11 May 2022, with or without exclusion of
shareholder pre-emptive rights. The Managing Board has
not adopted any resolutions to date regarding the issuance
of income bonds based on this authorisation.
The General Meeting of 24 May 2019 authorised the
Managing Board to acquire the Company’s own no-par
value bearer shares in accordance with § 65(1) no. 4 and 8
and (1a) and (1b) AktG to the maximum extent permissible
by law during a period of 30 months following the date the
General Meeting resolution was adopted.
220
Annual Financial Report 2020
The amount paid upon repurchase of the Company’s own
shares may not be more than a maximum of 50 % below,
or more than a maximum of 10 % above, the average
unweighted stock exchange closing price on the ten stock
exchange trading days preceding the repurchase.
The Managing Board may choose to make the purchase on
the stock exchange, through a public offer or in any other
legally permissible and expedient manner.
The General Meeting of 24 May 2019 also authorised the
Managing Board to use own shares
– for issuing shares to employees and senior manage-
ment of the Company or to employees, senior
management and managing board members of
companies affiliated with the Company;
– for servicing convertible bonds issued based on the
resolution adopted by the General Meeting of 12 May
2017;
– for sales in accordance with § 65 (1b) AktG on the
stock market or through a public offer. The Managing
Board is also authorised for a period of at most five
years after adoption of the resolution to dispose of the
acquired own shares in some other way without or with
partial or full exclusion of shareholder pre-emptive
rights. The written report on the reasons for exclusion
of shareholder pre-emptive rights was submitted to the
General Meeting.
The Managing Board has not made use of this authorisation
to date. The Company held no own shares as of 31
December 2020.
As of the balance sheet date, the Company was not party
to any material agreements that would come into effect,
change or terminate if control of the Company were to
change due to a takeover bid, in particular, no agreements
that would affect participations held in insurance companies.
Existing agreements that would come into effect if control
of the Company were to change due to a takeover bid relate
to participations held in other (non-insurance) companies.
No compensation agreements exist between the Company
and its Managing Board members, Supervisory Board
members or employees covering the case of a public
takeover bid.
On 9 October 2013 the Company issued a subordinated
bond with a nominal value of EUR 500,000,000.00 and a
maturity of 30 years. The Company can call the bond in full
for the first time on 9 October 2023 and on each following
coupon date.
The subordinated bond bears interest at a fixed rate of 5.5 %
p.a. during the first ten years of its term and variable interest
after that. The subordinate bond satisfies the tier 2
requirements of Solvency II. The bonds are traded on the
Vienna Stock Exchange.
On 2 March 2015 the Company issued a subordinated
bond with a nominal value of EUR 400,000,000.00 and a
maturity of 31 years. The Company can call the bond in full
for the first time on 2 March 2026 and on each following
coupon date. The subordinated bond bears interest at a
fixed rate of 3.75 % p.a. during the first eleven years of its
term and variable interest after that. The subordinate bond
satisfies the tier 2 requirements of Solvency II. The bond is
listed on the Luxembourg Stock Exchange.
A EUR 200,000,000.00 subordinated bond with a term of
30 years was privately placed with international institutional
investors on 6 April 2017. The subordinated bond can be
called for the first time after 10 years by VIG Holding and
satisfies the tier 2 requirements of Solvency II. Inclusion for
trading in the Third Market of the Vienna Stock Exchange
took place on 13 April 2017.
The interest rate is 3.75 % p.a. until 13 April 2027, after
which the bond pays variable interest.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
221
D THE SUPERVISORY BOARD HAD THE FOLLOWING
MEMBERS IN FINANCIAL YEAR 2020:
Chairman:
Günter Geyer
1
st
Deputy Chairman:
Rudolf Ertl
2
nd
Deputy Chairperson:
Maria Kubitschek (until 25 September 2020)
Georg Riedl (since 5 October 2020)
Members:
Martina Dobringer
Gerhard Fabisch
Peter Mihók
Heinz Öhler
Georg Riedl (until 4 October 2020)
Gabriele Semmelrock-Werzer
Katarína Slezáková (since 25 September 2020)
Gertrude Tumpel-Gugerell
THE MANAGING BOARD HAS THE FOLLOWING MEMBERS:
Chairwoman:
Elisabeth Stadler
Members:
Franz Fuchs (until 30 June 2020)
Liane Hirner
Peter Höfinger
Gerhard Lahner
Gábor Lehel
Hartwig Löger (since 1 January 2021)
Harald Riener
Peter Thirring
There was
an average of 296 (274) employees, including
Managing Board members
. These employees were
employed in the insurance business and resulted in
personnel expenses of EUR 39,431,000 (EUR 34,289,000).
There were no loans outstanding to
members of the
Managing Board
or members of the Supervisory Board as
of 31 December 2020 (EUR 0).
No
guarantees were outstanding for members of the
Managing Board
or Supervisory Board as of 31 December
2020.
In 2020, the total expenses for severance pay and pensions
of EUR 2,479,000 (EUR 3,233,000) included severance pay
and pension expenses of EUR 2,369,000 (EUR 2,315,000)
for members of the Managing Board and senior manage-
ment in accordance with § 80(1) of the Austrian Stock
Corporation Act (AktG).
The Managing Board manages the Company and is also
responsible for management of the Group.
In some cases, responsibility is also assumed for additional
duties in affiliated or related companies.
The members of the Managing Board received
EUR 6,279,000 (EUR 5,480,000) from the Company during
the reporting period for their services. Managing Board
members are provided with a company car for both
business and personal use.
The ratio of the fixed and variable income of all VIG Holding
employees versus the Managing Board as a whole was 1
to 11.5 in 2020.
Former members of the Managing Board received
EUR 1,149,000 (EUR 790,000).
The
members of the Supervisory Board
received
EUR 578,000 (EUR 506,000) in compensation for their
services to the Company in 2020.
222
Annual Financial Report 2020
The Company is a group member within the meaning of §
9 of the Austrian Corporate Income Tax Act (KStG) of the
Wiener Städtische Versicherungsverein, Vienna, group of
companies.
The taxable earnings of group members are attributed to
the head of the tax group.
The head of the tax group has entered into agreements with
each group member governing the allocation of positive
and negative tax amounts for the purpose of allocating
corporate income tax charges according to origin. If positive
income is attributed to the parent company, the tax
allocation equals 25 % of the positive income. If negative
income is attributed to the parent company, the negative
tax allocation equals 22.5 % of the current tax loss.
A receivable of EUR 118,520,000 (EUR 93,495,000) is
owed by the parent company.
The Company is included in the consolidated financial
statements prepared by Wiener Städtische Versicherungs-
verein, which has its registered office in Vienna. The
consolidated financial statements have been disclosed and
are available for inspection at the business premises of this
Company located at Schottenring 30, 1010 Vienna.
VI. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
Vienna Insurance Group plans to issue a senior sustainability
bond and strengthen its capital structure
Based on the current interest rate situation and long-term
capital planning of the Group, the Managing Board has
initiated measures to issue a senior sustainability bond, with
a focus on increasing investments in socially and environ-
mentally sustainable projects.
Depending on market conditions, the senior sustainability
bond will be issued in the 1
st
half of 2021 with a volume of
EUR 500 million. The structuring and issue date have not
yet been finalised. The details of the issue and the
sustainability bond framework, incl. a second party opinion
from an independent rating agency, will be published during
the course of the issue.
Given its existing debt capacity and the current favourable
environment, a subordinated bond with a volume of
EUR 300 million was also placed as a restricted tier 1
instrument with the principal shareholder of Vienna
Insurance Group, Wiener Städtische Versicherungsverein.
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
223
PROPOSED APPROPRIATION OF PROFITS
VIENNA INSURANCE GROUP AG Wiener Versicherung
Gruppe (VIG Holding) ended financial year 2020 with net
retained profits of EUR 239,230,814.01. The following
appropriation of profits will be proposed in the Annual
General Meeting:
The 128 million shares shall receive a dividend of EUR 0.75
per share. The payment date for this dividend will be 27 May
2021, the record date 26 May 2021, and the ex-dividend
date 25 May 2021.
A total of EUR 96,000,000.00 will therefore be distributed.
The net retained profits of EUR 143,230,814.01 remaining
for financial year 2020 after distribution of the dividend is to
be carried forward.
Vienna, 17 March 2021
The Managing Board:
Elisabeth Stadler
General Manager, Chairwoman of
the Managing Board
Liane Hirner
CFO, Member of the Managing
Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
224
Annual Financial Report 2020
AUDITOR'S REPORT
REPORT ON THE FINANCIAL STATEMENTS
Audit Opinion
We have audited the financial statements of
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe,
Vienna, Austria,
which comprise the Balance Sheet as at 31 December
2020, the Income Statement for the year then ended, and
the Notes.
In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as
at 31 December 2020 and its financial performance for the
year then ended, in accordance with Austrian Generally
Accepted Accounting Principles and other legal or regula-
tory requirements for insurance companies.
Basis for our Opinion
We conducted our audit in accordance with Regulation (EU)
537/2014 ("AP Regulation") and Austrian Standards on
Auditing. These standards require the audit to be
conducted in accordance with International Standards on
Auditing (ISAs). Our responsibilities under those standards
are further described in the "Auditor’s Responsibilities"
section of our report. We are independent of the Company,
in accordance with Austrian company law and professional
regulations, and we have fulfilled our other responsibilities
under those relevant ethical requirements. We believe that
the audit evidence we have obtained up to the date of the
auditor’s report is sufficient and appropriate to provide a
basis for our audit opinion on this date.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements. These matters were addressed in the
context of our audit of the financial statements as a whole,
however, we do not provide a separate opinion thereon.
Recoverability of investments in affiliated insurance
companies
Refer to notes chapter “I. Summary of significant account-
ing policies”, “II. Notes to the balance sheet” and “IV. Signifi-
cant participations”
Risk for the Financial Statements
Investments in affiliated insurance companies represent a
significant part of Vienna Insurance Group AG assets.
In previous years certain investments in affiliated insurance
companies were written down due to sustained impair-
ments. For the financial year it has to be verified whether
any changes in market, economic or legal conditions
require a reversal of impairments or additional write downs.
To assess the recoverability or value recovery, the book
values are compared with the proportionate equity and fair
values of the companies. The determination of the fair
values is complex and based on discretionary factors.
Those factors include in particular the expected future cash
flows of the subsidiary, which are primarily based on past
experience as well as on the management's assessment of
the expected market environment and the effects of the
Covid 19 pandemic on the future business development.
Other factors are the assumed long-term growth rate as
well as the underlying region-specific costs of capital.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
225
Our response
We have carried out the following main audit procedures in
connection with the recoverability of investments in affiliated
insurance companies:
– We have compared the respective book values with the
proportionate equity of the companies.
– We have assessed the appropriateness of key
assumptions, of discretionary decisions and of the
valuation method applied for investments in affiliated
companies.
– We have reconciled the expected future cash flows
used in the calculation with the strategic business
planning approved by the management.
– Furthermore, we have dealt with the key planning
assumptions, in particular the effects of the Covid 19
pandemic on the future business development and
reconciled the assumptions regarding the market
development with general and sector-specific market
expectations.
– We have analyzed the consistency of planning data
using information from prior periods.
– Given that minor changes in the applied cost of capital
rate significantly impact the determined fair value, we
have, together with our valuation specialists, assessed
the determination of the applied cost of capital rate and
comprehended the derivation of the underlying
parameters.
Other Information
Management is responsible for other information. Other
information is all information provided in the annual report,
other than the financial statements, the management report
and the auditor’s report.
Our opinion on the financial statements does not cover
other information and we do not provide any kind of
assurance thereon.
In conjunction with our audit, it is our responsibility to read
this other information and to assess whether, based on
knowledge gained during our audit, it contains any material
inconsistencies with the financial statements or any
apparent material misstatement of fact. If we conclude that
there is a material misstatement of fact in other information,
we must report that fact. We have nothing to report in this
regard.
Responsibilities of Management Audit Committee for the
Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance with
Austrian Generally Accepted Accounting Principles and
other legal or regulatory requirements for insurance
companies and for such internal controls as management
determines are necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error.
Management is also responsible for assessing the
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting, unless
management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do
so.
226
Annual Financial Report 2020
The audit committee is responsible for overseeing the
Company’s financial reporting process.
Auditor’s Responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement – whether due to fraud or error – and
to issue an auditor’s report that includes our audit opinion.
Reasonable assurance represents a high level of assurance,
but provides no guarantee that an audit conducted in
accordance with AP Regulation and Austrian Standards on
Auditing (and therefore ISAs), will always detect a material
misstatement, if any. Misstatements may result from fraud
or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with AP Regulation and
Austrian Standards on Auditing, we exercise professional
judgment and maintain professional skepticism throughout
the audit.
Moreover:
– We identify and assess the risks of material
misstatements in the financial statements, whether due
to fraud or error, we design and perform audit
procedures responsive to those risks and obtain
sufficient and appropriate audit evidence to serve as a
basis for our audit opinion. The risk of not detecting
material misstatements resulting from fraud is higher
than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresen-
tations or the override of internal control.
– We obtain an understanding of internal control relevant
to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the entity's internal control.
– We evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
– We conclude on the appropriateness of management’s
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a
material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our audit report to the
respective note in the financial statements. If such
disclosures are not appropriate, we will modify our audit
opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the
Company to cease to continue as a going concern.
– We evaluate the overall presentation, structure and
content of the financial statements, including the notes,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
227
– We communicate with the audit committee regarding,
amongst other matters, the planned scope and timing
of our audit as well as significant findings, including any
significant deficiencies in internal control that we identify
during our audit.
– We communicate to the audit committee that we have
complied with the relevant professional requirements in
respect of our independence, that we will report any
relationships and other events that could reasonably
affect our independence and, where appropriate, the
related safeguards.
– From the matters communicated with the audit
committee, we determine those matters that were of
most significance in the audit i.e. key audit matters. We
describe these key audit matters in our auditor’s report
unless laws or other legal regulations preclude public
disclosure about the matter or when in very rare cases,
we determine that a matter should not be included in
our audit report because the negative consequences of
doing so would reasonably be expected to outweigh
the public benefits of such communication.
REPORT ON OTHER LEGAL REQUIREMENTS
Management Report
In accordance with Austrian company law, the management
report is to be audited as to whether it is consistent with the
financial statements and prepared in accordance with legal
requirements.
Management is responsible for the preparation of the
management report in accordance with Austrian company
law and other legal or regulatory requirements for insurance
companies.
We have conducted our audit in accordance with generally
accepted standards on the audit of management reports as
applied in Austria.
Opinion
In our opinion, the management report is consistent with the
financial statements and has been prepared in accordance
with legal requirements. The disclosures pursuant to
Section 243a UGB are appropriate.
Statement
Based on our knowledge gained in the course of the audit of
the financial statements and our understanding of the
Company and its environment, we did not note any material
misstatements in the management report.
228
Annual Financial Report 2020
Additional Information in accordance with Article 10 AP
Regulation
We were elected as auditors at the Annual General Meeting
on 24 May 2019 and were appointed by the supervisory
board on 24 June 2019 to audit the financial statements of
Company for the financial year ending on that date.
In addition, during the Annual General Meeting on 25
September 2020, we have been elected as auditors for the
following financial year and appointed by the supervisory
board on 22 October 2020.
We have been auditors of the Company, without
interruption, since the consolidated financial statements at
31 December 2013.
We declare that our opinion expressed in the "Report on the
Financial Statements" section of our report is consistent
with our additional report to the audit committee, in
accordance with Article 11 AP Regulation.
We declare that we have not provided any prohibited non-
audit services (Article 5 Paragraph 1 AP Regulation) and
that we have ensured our independence throughout the
course of the audit, from the audited Company.
Engagement Partner
The engagement partner is Mr Thomas Smrekar.
Vienna, 17 March 2021
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed by:
Thomas Smrekar
Wirtschaftsprüfer
(Austrian Chartered Accountant)
This report is a translation of the original report in German, which is solely valid. The financial statements, together with our
auditor's opinion, may only be published if the financial statements and the management report are identical with the audited
version attached to this report. Section 281 Paragraph 2 UGB (Austrian Commercial Code) applies.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
229
DECLARATION BY THE MANAGING BOARD
We declare to the best of our knowledge that the annual
financial statements of VIENNA INSURANCE GROUP AG
Wiener Versicherung Gruppe prepared in accordance with
the requirements of Austrian commercial law and the
Austrian Insurance Supervision Act (VAG) give a true and
fair view of the Company’s net assets, financial position and
results of operations, the management report presents the
business development, performance and position of the
Company so as to give a true and fair view of its net assets,
financial position and results of operations, and the
management report provides a description of the principal
risks and uncertainties to which the Company is exposed.
Vienna, 17 March 2021
The Managing Board:
Elisabeth Stadler
General Manager, Chairwoman of
the Managing Board
Liane Hirner
CFO, Member of the Managing
Board
Peter Höfinger
Member of the Managing Board
Gerhard Lahner
Member of the Managing Board
Gábor Lehel
Member of the Managing Board
Hartwig Löger
Member of the Managing Board
Harald Riener
Member of the Managing Board
Peter Thirring
Member of the Managing Board
230
Annual Financial Report 2020
SUPERVISORY BOARD REPORT
The Supervisory Board and its committees, Chair and
Deputy Chairs periodically and repeatedly monitored in
detail the management of the Company and the activities of
the Managing Board in connection with its management
and monitoring of the Group. This purpose was served by
detailed presentations and discussions during meetings of
the Supervisory Board and its committees as well as by
detailed discussions on individual topics with Managing
Board members who provided comprehensive expla-
nations and evidence relating to management, the financial
position of the Company and that of the Group. Among
other things, strategy, business development (overall and in
individual regions), risk management, the internal control
system, internal audit activities, the compliance function,
actuarial function and reinsurance, both at VIG Holding and
Group level, and other important topics for the Company
and the Group were discussed at these meetings.
In accordance with the Solvency II requirements, starting in
2016 non-financial aspects must be part of the
performance expectations for variable remuneration of
Managing Board members. VIG Holding is committed to
social responsibility and the importance of having
employees drive forward performance, innovation and
expertise. Goal fulfilment for Managing Board members
also depended on both financial and non-financial criteria in
the 2020 reporting year. Detailed information on the
principles underlying the remuneration system is available in
the remuneration policy and 2020 remuneration report.
Detailed information for financial year 2020 will be available
in the remuneration report, which will be published on the
Company website by the legally required deadline. Please
refer to the remuneration policy and 2020 remuneration
report for this information.
The Supervisory Board has formed five committees from its
members. Information on the responsibilities and
composition of these committees is available on the
Company’s website and in the 2020 consolidated corporate
governance report.
One Annual General Meeting and five Supervisory Board
meetings distributed across the financial year were held in
2020. Five meetings of the Audit Committee (Accounts
Committee) were also held. The meetings of the Super-
visory Board and Audit Committee were held without the
physical presence of the participants in accordance with §
1 of the Austrian Corporate COVID-19 Act (COVID-19-
GesG). The Annual General Meeting was held as a virtual
Annual General Meeting on the basis of § 1 (2) COVID-19-
GesG and the COVID-19-GesV. The financial statements
and consolidated financial statements auditor, KPMG
Austria GmbH Wirtschaftsprüfungs- und Steuerberatungs-
gesellschaft, company number FN 269873y (KPMG),
attended three Audit Committee meetings and the
Supervisory Board meeting in 2020 that addressed the
audit of the 2019 annual financial statements and the 2019
consolidated financial statements as well as formal approval
of the 2019 annual financial statements, and also attended
the Annual General Meeting. KPMG also informed the Audit
Committee about the planning and procedure used to audit
the financial statements and consolidated financial
statements. Five meetings of the Committee for Managing
Board Matters (Personnel Committee) were held in 2020.
The Nomination Committee held one meeting in 2020. The
Committee for Urgent Matters (Working Committee) held
three meetings. The Strategy Committee did not meet in
2020. Strategic matters were handled by the Supervisory
Board as a whole.
No agenda items were discussed in Supervisory Board
meetings in 2020 without the participation of members of
the Managing Board.
No member of the Supervisory Board attended less than half
of the Supervisory Board meetings. In order to ensure the
effectiveness and efficiency of its activities and procedures,
the Supervisory Board performed a self-evaluation of its
procedures. The Supervisory Board’s evaluation of its
activities found that its organisational structure and
procedures were satisfactory in terms of efficiency and in
compliance with the law. It found no need for change or
desire for change in the practices followed to date.
Acting upon the proposal and motion of the Supervisory
Board, the General Meeting of 24 May 2019 selected
KPMG to be the financial statements auditor and
consolidated financial statements auditor for financial year
2020, and KPMG consequently performed these duties in
financial year 2020.
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
231
The Audit Committee mainly dealt with the following topics
in 2020:
During one meeting of the Audit Committee, the members
of the committee consulted with the (consolidated) financial
statements auditor on specification of two-way
communications and audit planning.
By inspecting relevant documents, meeting with the
Managing Board and discussions with the (consolidated)
financial statements auditor, the Audit Committee was able
to monitor the accounting process and the procedure used
for auditing the financial statements and consolidated
financial statements, and found no facts or circumstances
providing grounds for objection. The Audit Committee also
reviewed the possibilities of providing recommendations or
suggestions to ensure the reliability of the accounting
process and, based on the comprehensive information and
documents obtained by the Audit Committee during its
review, found that the processes that had been established
were adequate. The Audit Committee also reviewed and
monitored the independence of the auditor of the financial
statements and consolidated financial statements, and after
reviewing suitable documents and supporting records
submitted to the Committee, particularly with respect to the
appropriateness of the fee and the additional services
provided to the Company, was satisfied with the auditor’s
independent status. While reviewing and monitoring the
independence of the financial statements auditor and
consolidated financial statements auditor, the Audit
Committee did not find any circumstances that would raise
doubts about its independence and impartiality.
The Audit Committee also monitored the effectiveness of
the internal control system, internal audit and the risk
management system by obtaining descriptions of the
processes and organisation of these systems from the
Managing Board, the (consolidated) financial statements
auditor and the individuals directly responsible for these
areas. Due to the current situation in connection with
COVID-19, the Audit Committee also dealt with the report
on the ad hoc ORSA 2020 and reported on this to the
Supervisory Board in 2020. The Audit Committee reported
on these monitoring activities to the Supervisory Board and
stated that no deficiencies had been identified. The
Supervisory Board was also given the opportunity during
Supervisory Board meetings to verify the functional
adequacy of the existing control and auditing systems. In
addition, the audit plan and the quarterly reports prepared
by the internal audit department were debated by the Audit
Committee and the Supervisory Board and discussed with
the head of the internal audit department and the Group
internal audit department.
The Audit Committee examined the Company’s Solvency
and Financial Condition Report (SFCR) and reported its
findings to the Supervisory Board. The Supervisory Board
found no grounds for objection.
In 2020, the Audit Committee also dealt with the selection
of the financial statements and consolidated financial
statements auditor for financial year 2021. It was
determined that there were no grounds for exclusion of
KPMG or circumstances that would give rise to concerns
about impartiality, and that sufficient protective measures
had been taken to ensure an independent and impartial
audit. The Audit Committee reported to the Supervisory
Board on the insights of these evaluations and proposed to
the Supervisory Board and subsequently to the general
meeting that KPMG be selected as auditor of the financial
statements and consolidated financial statements. The
General Meeting selected KPMG as auditor of the financial
statements and consolidated financial statements for 2021.
The Audit Committee also received the 2020 annual
financial statements, management report, 2020
consolidated corporate governance report and 2020
sustainability report (consolidated non-financial report) from
the Managing Board, and reviewed and carefully examined
them. The Managing Board’s proposal for appropriation of
profits was also reviewed with respect to capital adequacy
and its effects on the solvency and financial position of the
Company during the course of this examination. The Audit
Committee also examined the 2020 consolidated financial
statements and Group management report. In addition, the
auditor’s reports prepared by (consolidated) financial
statements auditor KPMG for the 2020 annual financial
statements and management report and the 2020
consolidated financial statements and Group management
report were reviewed by the Audit Committee and
examined. As a result of this examination, a unanimous
resolution was adopted to recommend to the Supervisory
Board that the annual financial statements be accepted.
The Supervisory Board found no grounds for objection.
232
Annual Financial Report 2020
The (consolidated) financial statements auditor provided the
Audit Committee with an additional report in accordance
with Art. 11 of Regulation (EU) No. 537/2014 on specific
requirements regarding statutory audit of public-interest
entities that explained the results of the financial statements
audit and consolidated financial statements audit. This
additional report prepared by the financial statements
auditor was also provided to the Supervisory Board.
The audit results and all resolutions adopted by the Audit
Committee were reported to the Supervisory Board in its
next meeting, along with an explanation of how the financial
statement audit had contributed to the reliability of the
financial reporting and what role the Audit Committee had
played. The Supervisory Board also dealt with IT security
issues in financial year 2020.
The Supervisory Board also dealt with the topic of
remuneration policy. The Managing Board and Supervisory
Board prepared a remuneration report for financial year
2020.
During the reporting period, the Nomination Committee and
Supervisory Board also dealt with the appointment of a new
member of the Managing Board. In 2020, the Supervisory
Board appointed Hartwig Löger to the Managing Board
starting 1 January 2021.
The 2020 annual financial statements together with the
management report and 2020 consolidated corporate
governance report, the 2020 consolidated financial
statements together with the Group management report,
and the Managing Board’s proposal for appropriation of
profits were taken up and examined in detail by the
Supervisory Board. The appropriation of profits proposal
was checked, in particular, to ensure that it was reasonable
when capital requirements were taken into account. The
proposal complies with applicable legal requirements and
proactively considers the macroeconomic and financial
situation and its impact on the company's solvency and
financial position in light of the COVID-19 pandemic. The
proposal is in line with the continuously pursued prudent
and sustainable capital planning to ensure a solid solvency
and liquidity position in the long term.
The Supervisory Board also dealt with sustainability issues.
Topics such as the further integration of social and
ecological aspects into the core business as well as
environmental and employee issues and the importance of
diversity and the Group's social commitment were covered.
The Supervisory Board also received the 2020 sustainability
report (consolidated non-financial report) from the
Managing Board, and reviewed and carefully examined it.
As a result of this examination, it found that the 2020
sustainability report (consolidated non-financial report) had
been prepared properly and was appropriate. The
Supervisory Board found no grounds for objection.
In addition, the auditor’s reports prepared by (consolidated)
financial statements auditor KPMG for the 2020 annual
financial statements and management report and the 2020
consolidated financial statements and Group management
report were reviewed by the Supervisory Board and
examined. KPMG’s audit of the 2020 annual financial
statements and management report and the 2020
consolidated financial statements and Group management
report did not lead to any reservations. KPMG determined
that the annual financial statements comply with statutory
requirements and give a true and fair view of the net assets
and financial position of the Company as of
31 December 2020, and of the results of operations of the
Company for financial year 2020 in accordance with
Austrian generally accepted accounting principles. The
management report is consistent with the annual financial
statements. The disclosures pursuant to § 243a UGB
(Austrian Commercial Code) are appropriate. KPMG further
determined that the consolidated financial statements also
comply with statutory requirements and give a true and fair
view of the net assets and financial position of the Group as
of 31 December 2020, and of the results of operations and
cash flows of the Group for financial year 2020 in
accordance with the IFRS as adopted by the EU and § 138
of the Austrian Insurance Supervision Act (VAG) in
combination with § 245a of the Austrian Commercial Code
(UGB). The Group management report is consistent with
the consolidated financial statements. KPMG also reviewed
the 2020 sustainability report (consolidated non-financial
report) and determined in accordance with § 269 (3) UGB
that the 2020 consolidated corporate governance report
had been prepared.
The final results of the review by the Supervisory Board did
not provide any basis for reservation either. The Supervisory
Board stated that it had nothing to add to the auditor’s
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
233
reports for the financial statements and consolidated
financial statements.
After thorough examination, the Supervisory Board
therefore adopted a unanimous resolution to approve the
2020 annual financial statements prepared by the
Managing Board, not to raise any objections to the
management report, the 2020 consolidated financial
statements and Group management report, the 2020
consolidated corporate governance report and the 2020
sustainability report (consolidated non-financial report) and
to agree with the Managing Board proposal for
appropriation of profits.
The 2020 annual financial statements have therefore been
approved in accordance with § 96 (4) AktG (Austrian Stock
Corporation Act).
The Supervisory Board proposes to the General Meeting
that it approves the Managing Board’s proposal for
appropriation of profits and formally approves the actions of
the Managing Board and Supervisory Board.
Vienna, April 2021
The Supervisory Board:
Günter Geyer (Chairman)
234
Annual Financial Report 2020
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VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
235
Service
information
236
Annual Financial Report 2020
LIST OF ABBREVIATIONS
Abbreviation Full company name
Alpenländische Heimstätte GmbH Alpenländische Heimstätte, gemeinnützige Wohnungsbau- und Siedlungsgesellschaft m.b.H., Innsbruck
Asirom Asigurarea Românească - ASIROM Vienna Insurance Group S.A., Bucharest
BCR Life BCR Asigurări de Viaţă Vienna Insurance Group S.A., Bucharest
BTA Baltic BTA Baltic Insurance Company AAS, Riga
Bulstrad Life BULSTRAD LIFE VIENNA INSURANCE GROUP JOINT STOCK COMPANY, Sofia
Bulstrad Non-Life INSURANCE JOINT-STOCK COMPANY "BULSTRAD VIENNA INSURANCE GROUP", Sofia
Compensa Life (Estonia)
1
Compensa Life Vienna Insurance Group SE, Tallinn
Compensa Life (Poland)
1)
Compensa Towarzystwo Ubezpieczeń Na Życie S.A. Vienna Insurance Group, Warsaw
Compensa Non-Life (Lithuania)
1
"Compensa Vienna Insurance Group", ADB, Vilnius
Compensa Non-Life (Poland)
1
Compensa Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group, Warsaw
ČPP Česká podnikatelská pojišťovna, a.s., Vienna Insurance Group, Prague
Donaris Compania de Asigurări "DONARIS VIENNA INSURANCE GROUP" Societate pe Actiuni, Chișinău
Donau Versicherung DONAU Versicherung AG Vienna Insurance Group, Vienna
Erste Group Erste Group Bank AG, Vienna
Erste Heimstätte GmbH Erste gemeinnützige Wohnungsgesellschaft Heimstätte Gesellschaft m.b.H., Vienna
Gemeinnützige Industrie-Wohnungsaktiengesellschaft Gemeinnützige Industrie-Wohnungsaktiengesellschaft, Leonding
Gemeinnützige Mürz-Ybbs Siedlungsanlagen-GmbH Gemeinnützige Mürz-Ybbs Siedlungsanlagen-GmbH, Kapfenberg
Gewista-Werbegesellschaft m.b.H. Gewista-Werbegesellschaft m.b.H., Vienna
GPIH Joint Stock Company Insurance Company GPI Holding, Tbilisi
InterRisk InterRisk Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group, Warsaw
InterRisk Life InterRisk Lebensversicherungs-AG Vienna Insurance Group, Wiesbaden
InterRisk Non-Life InterRisk Versicherungs-AG Vienna Insurance Group, Wiesbaden
Intersig INTERSIG VIENNA INSURANCE GROUP Sh.A., Tirana
IRAO Joint Stock Company International Insurance Company IRAO, Tbilisi
Kniazha
PRIVATE JOINT-STOCK COMPANY "UKRAINIAN INSURANCE COMPANY "KNIAZHA VIENNA INSURANCE GROUP",
Kiev
Kniazha Life PRIVATE JOINT-STOCK COMPANY "INSURANCE COMPANY "KNIAZHA LIFE VIENNA INSURANCE GROUP", Kiev
Komunálna KOMUNÁLNA poisťovňa, a.s. Vienna Insurance Group, Bratislava
Kooperativa (Slovakia)
1
KOOPERATIVA poisťovňa, a.s. Vienna Insurance Group, Bratislava
Kooperativa (Czech Republic)
1
Kooperativa pojišťovna, a.s., Vienna Insurance Group, Prague
Health Health insurance
Life Life insurance
Makedonija Osiguruvanje Stock Company for Insurance and Reinsurance MAKEDONIJA Skopje - Vienna Insurance Group, Skopje
n/a not applicable
Neue Heimat Oberösterreich GmbH NEUE HEIMAT Oberösterreich Gemeinnützige Wohnungs- und SiedlungsgesmbH, Linz
Neuland GmbH Neuland gemeinnützige Wohnbau-Gesellschaft m.b.H., Vienna
Nova Insurance Company Nova Ins EAD, Sofia
Omniasig OMNIASIG VIENNA INSURANCE GROUP S.A., Bucharest
Österreichisches Verkehrsbüro
Österreichisches Verkehrsbüro Aktiengesellschaft, Vienna
(Consolidated Financial Statements)
PAC Doverie Pension Assurance Company Doverie AD, Sofia
PČS Pojišťovna České spořitelny, a.s.,Vienna Insurance Group, Pardubice
Ray Sigorta Ray Sigorta A.Ş., Istanbul
s Versicherung Sparkassen Versicherung AG Vienna Insurance Group, Vienna
Property/Casualty Property and casualty insurance
Schwarzatal GmbH "Schwarzatal" Gemeinnützige Wohnungs- und Siedlungsanlagen-GmbH, Vienna
Seesam Seesam Insurance AS, Tallinn
Sigma Interalbanian Sigma Interalbanian Vienna Insurance Group Sh.a, Tirana
Sozialbau AG SOZIALBAU gemeinnützige Wohnungsaktiengesellschaft, Vienna
TUW "TUW" Towarzystwo Ubezpieczeń Wzajemnych „TUW", Warsaw
UIG Private Joint-Stock Company "Insurance company" Ukrainian insurance group", Kiev
Service information
Group management report | Consolidated financial statements | Management report | Annual financial statements | Service information
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
237
Abbreviation Full company name
Union Biztosító UNION Vienna Insurance Group Biztosító Zrt., Budapest
Urbanbau GmbH Urbanbau Gemeinnützige Bau-, Wohnungs- und Stadterneuerungsgesellschaft m.b.H., Vienna
VBV - Betriebliche Altersvorsorge AG
VBV - Betriebliche Altersvorsorge AG, Vienna
(Consolidated Financial Statements)
Vienna International Underwriters or VIU Vienna International Underwriters GmbH, Vienna
Vienna Life (Poland)
1
Vienna Life Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group, Warsaw
Vienna osiguranje (Bosnia and Herzegowina)
1
Insurance Company Vienna osiguranje d.d., Vienna Insurance Group, Sarajevo
Vienna-Life (Liechtenstein)
1
Vienna-Life Lebensversicherung AG Vienna Insurance Group, Bendern
viesure viesure innovation center GmbH, Vienna
VIG Fund VIG FUND, a.s., Prague (Consolidated Financial Statements)
VIG Insurance Group
2
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe, Vienna
VIG Holding
3
VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe, Vienna
VIG Re VIG RE zajišťovna, a.s., Prague
Wiener Osiguranje (Croatia)
1
Wiener osiguranje Vienna Insurance Group dioničko društvo za osiguranje, Zagreb
Wiener Osiguranje (Bosnia and Herzegowina)
1
Wiener Osiguranje Vienna Insurance Group ad, Banja Luka
Wiener Re "WIENER RE" akcionarsko društvo za reosiguranje, Belgrade
Wiener Städtische WIENER STÄDTISCHE VERSICHERUNG AG Vienna Insurance Group, Vienna
Wiener Städtische Osiguranje (Serbia)
1
WIENER STÄDTISCHE OSIGURANJE akcionarsko drustvo za osiguranje, Belgrade
Wiener Städtische Wechselseitiger Versicherungsverein - Vermögensverwaltung - Vienna Insurance Group,
Vienna
Wiener TU (formerly Gothaer TU) Wiener TU S.A. Vienna Insurance Group, Warsaw
Winner Life Joint Stock Insurance Company WINNER LIFE - Vienna Insurance Group, Skopje
Winner Non-Life Joint Stock Insurance Company WINNER-Vienna Insurance Group, Skopje
WOFIN GmbH WOFIN Wohnungsfinanzierungs GmbH, Vienna
WWG Beteiligungen GmbH WWG Beteiligungen GmbH, Vienna
1
Country names in parentheses are added if there is more than one company with the same abbreviated name and it is not clear from the context which one is intended. The context is assumed to be clear,
for example, if the name is used in a description of activities taking place within a country.
2
Used when referring to consolidated VIG group companies.
3
Used when referring to the individual company.
238
Annual Financial Report 2020
NOTICE
This Annual Financial Report includes forward-looking
statements based on current assumptions and estimates
that were made by the management of VIENNA INSURANCE
GROUP AG Wiener Versicherung Gruppe to the best of its
knowledge. Disclosures using the words “expected”,
“target” or similar formulations are an indication of such
forward-looking statements. Forecasts related to the future
development of the Company are estimates made on the
basis of information available as of the date the Group
Annual Report went to press. Actual results may differ from
the forecasts if the assumptions underlying the forecast
prove to be wrong or if unexpectedly large risks occur.
Calculation differences may arise when rounded amounts
and percentages are summed automatically.
The Annual Financial Report was prepared with great care
to ensure that all information is complete and accurate. The
possibility of rounding, typesetting or printing errors,
however, cannot be ruled out completely.
Our goal was to make the Annual Financial Report as easy
to read and as clear as possible. For this reason we have
not used phrasing such as “he/she”, “his/her”, etc. It should
be understood that the text always refers to women and
men equally without discrimination.
ADDRESS
VIENNA INSURANCE GROUP AG
Wiener Versicherung Gruppe
Phone: +43 (0) 50 390 22000
WEBSITE – ONLINE REPORT
The Annual Financial Report is available in German and
English on our Internet website (www.vig.com) under
Investor Relations and can also be downloaded in both
languages as a PDF file.
Service tip
Online Group Annual Report
The VIG Insurance Group website provides an online
version of the Group Annual R
eport that is optimised for
both the Internet and mobile devices. All sections may be
downloaded in PDF for
m. You can also download the most
important tables as Excel files.
Other features such as links
within the report and a comparison with the previous year
create transparency and take you directly to the information
being sought. The online version of the
report also allows
you to perform a full-text search quickly and eas
ily. The
search results are presented on an overview page, sorted
by relevance. The term being searched for is highlighted in
colour on this page and on the page in the report.
In case of doubt, the German version is authoritative.
Editorial deadline: 15 March 2021
Group Annual Report 2020 VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe
Annual
Financial Report 2020