Group Annual Report 2023

Download overview


Affiliated companies

The parent company and its subsidiaries are considered to be affiliated companies if the parent company is able to exert control over the business policies of the subsidiary. Examples of this are where the parent company can affect variable returns from the subsidiary, a controlling agreement exists or it is possible to appoint the majority of the Members of the Managing Board or other executive bodies of the subsidiary.

Asset and liability management (ALM)

ALM refers to taking both assets and liabilities into account when implementing strategic decisions in order to achieve optimal company results. ALM is therefore needed for determining and managing the risk capital required, matching assets and liabilities (duration, cash flow and income matching) as well as optimising investments and reinsurance.

Austrian Commercial Code (UGB)

The Austrian Commercial Code (UGB) includes commercial law provisions applicable companies. These include company law, accounting regulations, special civil law provisions and regulations on corporate transactions.

Baltic states

The Baltic states consist of the countries Estonia, Latvia and Lithuania.

Business operating result

The business operating result is included as a subtotal in the income statement in order to show the operating financial performance of the Group. The business operating result is before taxes and excludes the items “Impairments of intangible assets” and “Reversal of impairments of intangible assets”.

Cash flow statement or cash flow

The cash flow statement presents the changes in cash and cash equivalents during a financial year, broken down into the three areas of ordinary activities, investing activities, and financing activities. The aim is to provide information on the financial strength of the company.

Central and Eastern Europe (CEE) and CEE markets

The VIG 25 strategic programme distinguishes between CEE markets and special markets in the country portfolio. The 20 CEE markets include: Albania, Austria, Croatia, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Estonia,

Hungary, Kosovo, Latvia, Lithuania, Moldova, Montenegro, North Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine. Note that differences may exist between this definition and the definition of CEE used by other companies, financial institutions (e.g. IMF, OECD, WIFO, IHS), etc. There are branch offices in some countries that are managed by companies assigned to other reportable segments.

Combined ratio (net), net combined ratio

The net combined ratio is calculated by dividing insurance service expenses net (after deduction of reinsurance) by insurance service revenue net in the property and casualty insurance.


The financial statements of the parent company and those of the subsidiaries are combined when the consolidated financial statements are prepared. During this process, intragroup equity interests, interim results, receivables and payables and income and expenses are eliminated.

Contractual Service Margin (CSM)

The contractual service margin (CSM) is a component of the asset or liability for the group of insurance contracts that represents the unearned profit a subsidiary will recognise as it provides services in the future. In each period, an amount of the CSM for a group of insurance contracts is recognised in profit and loss as insurance service revenue to reflect the insurance contract services provided under the group of insurance contracts in that period.

Corporate Sustainability Due Diligence Directive (CSDDD)

The Corporate Sustainability Due Diligence Directive (CSDDD) is intended to oblige EU and non-EU companies to carry out due diligence with regard to the environment and human rights in their operations, subsidiaries and along the value chains. It is currently being negotiated between the EU institutions.

Corporate Sustainability Reporting Directive (CSRD) & European Sustainability Reporting Standards (ESRS)

The Corporate Sustainability Reporting Directive (CSRD) is an EU directive on sustainability reporting and the further development of the Non-Financial Reporting Directive (NFRD). In addition to the directive itself, detailed specifications for the content of reporting have also been developed. These are described in the European Sustainability Reporting Standards (ESRS).

Derivative financial instruments (derivatives)

Derivatives are financial instruments whose value depends on the price of an underlying asset. Derivatives can be classified systematically according to the nature of the underlying assets (interest rates, share prices, currency rates or commodity prices). Options, futures, forwards and swaps are examples of derivative financial instruments.

Earnings per share (undiluted/diluted)

The ratio of consolidated profit for the year divided by the average number of shares issued. The diluted earnings per share include convertible securities that have been exercised, or are still available for exercise, in the calculation of the number of shares and profit for the year. The convertible securities consist of convertible bonds and stock options.

Environmental Social Governance (ESG)

ESG stands for the Environment, Social and (responsible) Governance sustainability criteria. The term describes the degree to which a company takes these factors into account, as well as an investment approach that can be used to select potential investments.

Equity method

This method is used to recognise interests in associated companies that do not meet the criteria for full consolidation. The carrying amount generally corresponds to the Group’s share of the shareholders’ equity of these companies or subgroups. As part of ongoing measurement, the carrying amount is adjusted for the pro rata changes in shareholders’ equity. The pro rata annual results are added to the Group result and any profit distributions paid are deducted.

European Financial Reporting Advisory Group (EFRAG)

The European Financial Reporting Advisory Group (EFRAG) is a private association founded with the support of the European Commission. EFRAG is responsible both for influencing the development of IFRS standards from a European perspective and for developing drafts for EU standards on sustainability reporting.

Fair value

The value of a financial instrument that is observable on the market or can be calculated using a theoretical price model taking into account price-determining factors.

Fair Value Approach (FVA)

The fair value approach is a simplified method of determining the CSM and/or loss components for groups of insurance contracts at the transition date. The CSM or the loss component of the liability for remaining coverage (LRC) at the transition date is determined as the difference between the fair value of the group of insurance contracts and the fulfilment cash flows measured at that date.

Fulfilment Cash Flows (FCF)

The fulfilment cash flow comprises unbiased and probability-weighted estimates of future cash flows, discounted to present value to reflect the time value of money and financial risks, plus a risk adjustment for non-financial risks.

Full Retrospective Approach (FRA)

This is the application of accounting rules as if they had always applied in the past. Under the full retrospective approach of IFRS 17, the respective regulations of the PAA, VFA or GMM are applied to calculate the underwriting liabilities.

General Data Protection Regulation (GDPR)

Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data has been in force since 25 May 2018 and is directly applicable within the European Union. The GDPR standardised the rules for the processing of personal data by private-sector companies and public bodies throughout the EU. The primary objectives of the GDPR are data security and the strengthening of the fundamental rights and freedoms of natural persons. In Austria, the GDPR was implemented by the Austrian Data Protection Amendment Act 2018 (Datenschutz-Anpassungsgesetz 2018), which extensively amended the Data Protection Act 2000 (Datenschutzgesetz 2000).

General Measurement Model (GMM)

With the general measurement model, the basic model of IFRS 17, profit is recognised as part of liability for remaining coverage (LRC) at inception. The profit margin is shown in the income statement over the term of the contract. This profit margin is referred to as the “contractual service margin” (CSM). The general measurement model is applicable to all types of contracts unless otherwise stated.

Gross domestic product (GDP)

GDP is a measure of the economic output of a country. All goods and services produced or provided within a country (by citizens or foreigners) during a specified period, are evaluated at current prices (market prices) or constant prices (prices in a certain base year). By using a constant price level in the calculations, price increases can be eliminated so that the figures presented over time are independent of inflation. GDP at constant prices is also known as real GDP.

Gross written premiums based on IFRS 17

Gross written premiums comprise the set premiums plus policyholder collateral payments, but not including insurance and fire service taxes reduced by premiums cancelled during the financial year.


In insurance terminology, “gross/net” means before or after deduction of reinsurance (“net” is also referred to as “for own account” or “retention”). In connection with income from participations, the term “net” is used when the corresponding expenses (e.g. depreciation or losses from disposal) have already been deducted from the income. The (net) income from participations therefore shows the result from these interests.

Insurance density

Annual per capita insurance premiums, used as an indicator for the state of development of a country’s insurance sector.

Insurance Distribution Directive (IDD)

Directive 2016/97/EU, also referred to as the Insurance Distribution Directive, has been applicable within the European Union since 1 October 2018. The IDD affects all aspects of the insurance business, including the recruiting of insurance distributors entailing training and advanced training, product development, the advisory process including wide-ranging duties to provide information, the distribution of standardised information sheets, the handling of conflicts of interest and compensation.

Insurance finance result

The insurance finance result comprises changes in the book value of the group of insurance contracts. These changes arise from the effect of the time value of money and of the financial risk, excluding any such changes for groups of insurance contracts with direct participation features that would adjust the CSM but do not do so because the groups of contracts are onerous. These are included in insurance service expenses.

Insurance service revenue – issued business

The insurance service revenue depicts the provision of services arising from a group of insurance contracts at an amount that reflects the consideration to which it is expected to be entitled in exchange for those services.

Insurance supervisisory authority

The Austrian insurance supervisory authority is a part of the Austrian Financial Market Authority (FMA) that was established as an independent authority in April 2002. Its supervision extends to private-sector insurance companies with registered offices in Austria.

International Accounting Standards (IAS)

IAS are international accounting standards – see also International Financial Reporting Standards.

International Financial Reporting Standards (IFRS)

The IFRS are international finanacial reporting standards. Since 2002, the term IFRS has been used for the overall frameworks of standards adopted by the International Accounting Standards Board (IASB). Standards that were previously adopted, however, are still cited as IAS.

Investment result

The investment result is the sum of all changes in financial instruments recognised in the income statement.

Liability for Incurred Claims (LIC)

For the non-life business, the liability for incurred claims (LIC) is a major component of the recognition of insurance contracts. Here, the ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques. The main assumption underlying these techniques is the use of past claims development experiences to project future claims development and hence ultimate claims costs.

Liability for Remaining Coverage (LRC)

For a group of contracts that is not onerous at initial recognition, the liability for remaining coverage is measured as: the premiums, if any, received at initial recognition, minus any insurance acquisition costs at that date, plus or minus any amount arising from the derecognition at that date of the asset recognised for insurance acquisition costs and any other asset or liability previously recognised for cash flows prior to the recognition of the group of insurance contracts.

Market capitalisation (stock market value)

This equals the value of a stock corporation calculated by multiplying the current stock exchange price by the total number of shares issued.


Nordics includes the countries of Denmark, Norway, Sweden and Finland. VIG Holding is represented by branches in Denmark, Norway and Sweden. The EU freedom to provide services allows customers to also be served in Finland. Note that differences may exist between this definition and the definition of Nordics or Northern Europe used by other companies, financial institutions (e.g. IMF, OECD, WIFO, IHS), etc.

Operating Return on Equity (Operating RoE)

Operating return on equity measures the profitability of the Insurance Group. This ratio is calculated by dividing the business operating result by the average shareholders’ equity. For this purpose, shareholders’ equity is adjusted by the reserve for unrealised gains and losses is used.

Organic growth

Organic growth is the growth of a company resulting from the company’s own financial strength. Such growth is therefore not the result of purchasing other companies.

Own Risk and Solvency Assessment (ORSA)

Under Article 45 of Directive 2009/138/EC, every insurance company must perform the Own Risk and Solvency Assessment (ORSA) as part of its risk management system.


Agreed fee paid in exchange for the assumption of risk by an insurance company.

Premium Allocation Approach (PAA)

The premium allocation approach (PAA) makes it easier to calculate the liability for remaining coverage (LRC) than the general measurement model. This model can be used for short-term insurance contracts and insurance contracts with similar measurement results compared to the GMM.

Present value

The present value of future cash flows, calculated by discounting future cash flows at a certain interest rate.

Present Value of Future Cash Flows (PVFCF)

Future cash flows are estimated considering a range of scenarios which have commercial substance and give a good representation of possible outcomes. The cash flows from each scenario are probability-weighted and discounted using current assumptions.

Price-earnings ratio (PE ratio)

A financial ratio for evaluating shares. The PE ratio is the ratio of the share price to the earnings per share in a reference period, or to the expected earnings per share in a future period. If the reference period is defined as one year, the PE ratio is the end-of-year price divided by the earnings per share in that year.


A rating is an evaluation on a scale of the creditworthiness of a debtor (countries, companies, etc.) often carried out by a specialised rating agency. Also see Standard and Poor’s.


Reinsurance is when an insurance company insures a portion of its risk with another insurance company.

Risk Adjustment (RA)

The risk adjustment for non-financial risks represents the compensation required for bearing the uncertainty about the amount and timing of the cash flows of groups of insurance contracts and covers insurance risk, lapse risk and expense risk. The risk adjustment therefore reflects an amount that an insurance company would pay to remove the uncertainty about whether future cash flows will exceed the best estimate.

Risk management (RM)

The RM tasks consist of identifying, evaluating, analysing and managing the company’s opportunities and risks.

Risk-bearing portfolio

The risk-bearing portfolio summarises cash and cash equivalents, financial assets, investments in associates, investment property as well as owner-occupied property.

Single premium

A single premium is a special type of premium payment for life insurance in which a self-chosen amount is paid as a single premium at the beginning of the policy.

Solvency II

Solvency II is a legal directive applicable in Europe for the capital adequacy of insurance companies. It concerns methods for risk-based management of the overall solvency of insurance companies and also includes qualitative elements (e.g. internal risk management).

Special Markets

There is a distinction between special markets that are reportable segments under IFRS 8 and special markets according to the country portfolio for the VIG 25 strategic programme. The ten special markets according to the country portfolio include: Denmark, Germany, Liechtenstein, Italy, Norway, Türkiye, Georgia, Belarus, France and Sweden. The Special Markets reportable segment includes Germany, Georgia, Liechtenstein and Türkiye. There are branch offices in some countries that are managed by companies assigned to other reportable segments.

Standard & Poor’s (S&P)

Standard & Poor’s (S&P) is an internationally recognised rating agency. It analyses and evaluates companies, countries and bonds, among other things. It uses its own rating scale, which ranges from AAA for the highest category to CC for the lowest when rating the financial strength of insurance companies. The ratings can be modified by adding a plus or minus sign.

Stress test

Stress tests are a special form of scenario analysis. The aim is to arrive at a quantitative statement of the potential losses incurred by portfolios in the event of extreme market fluctuations.

Taxonomy, EU taxonomy for sustainable economic activities

The EU Taxonomy Regulation is a classification system that defines criteria for determining when an economic activity is considered environmentally sustainable.

Total capital investment portfolio

The total capital investment portfolio comprises the balance sheet items cash and cash equivalents, financial assets, investments in associates and investment property. It therefore includes those balance sheet items the gains and losses of which are recognised in profit or loss in the total capital investment result excluding the insurance finance result.

Total capital investment result

In addition to the investment result, the total capital investment result also includes the insurance finance result, income and expenses from investment property and the result from associated consolidated companies.

Underlying assets (UA)

Portfolio of assets that determines the amounts to be paid to a policyholder.


In the insurance industry, underwriting refers to the review and assessment of insurance risks, the determination of conditions (premiums, deductibles, limits, etc.) and coverage and ultimately the decision in favour of or against the acceptance of risks in return for said premiums.

Unit- and index-linked life insurance

Insurance where investments in financial instruments is made at the policyholder’s risk. The financial instruments in this area are measured at fair value and the underwriting liabilities are recognised using the Variable Fee Approach.

Value at Risk (VaR)

The VaR concept is a method for determining risk. It is used to calculate the loss that will, with a certain probability, not be exceeded within a certain period of time.

Variable Fee Approach (VFA)

For all contracts in the life business that are eligible for direct profit participation, the Variable Fee Approach (VFA) measurement model is applied. Initial recognition takes place in accordance with the General Measurement Model (GMM). In subsequent measurement, however, the VFA differs from the General Measurement Model (GMM) in that the Contractual Service Margin (CSM) can be adjusted by the profit participation.

VIG or VIG Insurance Group

As a rule, this term refers to all consolidated VIG (insurance) companies. If a statement refers exclusively to the activities of the Holding, the term VIG Holding is used.


Volatility refers to fluctuations in securities prices, exchange rates and interest rates.