Strategic measures and initiatives

We have developed a strategic work programme to ensure that VIG remains a strong and successful player in the Central and Eastern European insurance market in the future. For this reason, 2016 was dominated by an analysis of VIG’s 25 markets. Vienna Insurance Group concentrates in this work programme on profitably using market potential as well as on areas that ensure future viability, optimise its business model in terms of cost-efficiency and effectiveness, and promote cooperation and organisation within the Group. Initiatives were defined in these three main areas for implementation by 2020.

A summary and description of selected focal points is presented below.

Strategic thrust of the agenda 2020 (graphic)

Strengthening the market position

Vienna Insurance Group aims to strengthen its market share by organic growth and further acquisitions that improve its market position and complement its existing portfolio. Vienna Insurance Group has identified four markets where it aims to increase its market share to at least 10% in the medium term: Serbia, Croatia, Hungary and Poland. This goal was already achieved in Serbia in 2016 when official approval was provided for acquisition of the AXA companies. The Group also made acquisitions in Romania and the Baltic states in 2016.

Purchase of the AXA companies in Serbia concluded

Vienna Insurance Group signed a purchase agreement to acquire the non-life insurer AXA Neživotno Osiguranje a.d.o. Beograd and life insurer AXA Životno Osiguranje a.d.o. Beograd (AXA Serbia) at the beginning of July 2016. The acquisition was concluded on 30 November 2016 after official approval was received, thereby increasing VIG’s market share in Serbia to around 11.5%. The acquired companies will now be integrated into the existing company Wiener Städtische Osiguranje.

Purchase of the AXA company in Romania

At the beginning of August 2016, Vienna Insurance Group signed an agreement to acquire the Romanian life insurance company AXA Life Insurance S.A. (AXA Life), thereby confirming its leading position in the Romanian insurance market. The buyers are the two Romanian VIG Group companies BCR Life and Omniasig. The acquisition is subject to approval by the local authorities.

Acquisition of BTA Baltic concluded

Vienna Insurance Group has acquired a majority interest in BTA Baltic Insurance Company AAS (BTA Baltic), which has its registered office in Latvia and branches in Lithuania and Estonia. The transaction was concluded on 24 August 2016 after final official approval was received for the sales agreement that was signed in December 2015. The acquisition of BTA Baltic makes Vienna Insurance Group the leading insurance group in the Baltics.

Ensuring future viability

Vienna Insurance Group’s measures in this strategic area ensure that the Group remains fit for future opportunities and challenges and can optimally exploit potential to ensure the long-term success of the Company.

Insurance of the future

The aim of this initiative is to explore future changes in people’s lifestyle and habits and the effects of demographic and economic change on the insurance industry.

Vienna Insurance Group has entered into a partnership with Versicherungsforen Leipzig’s Insurance Innovation Lab to examine areas related to insurtechs, future automotive trends, such as self-driving vehicles or sensor networking, and artificial intelligence. How to design life insurance as an attractive instrument for future provision is also examined. The focus is on supplementing the primary service of risk coverage with additional value added.


Aside from automating processes, the main focus is on using digitisation for products and services. In 2016, VIG began screening the around 50 companies in the Group for digital innovations, products and services, with the aim of making these innovative ideas transferable to all Group companies – including, if possible, across country borders. VIG Holding is acting as a digital hub to support and coordinate activities in the Group and prepare a uniform digitisation strategy with the Group companies.


VIG views the expansion of assistance services as a major opportunity to create a competitive advantage for the Company, and is already operating in-house assistance companies in the Czech Republic, Slovakia and Bulgaria.

Another milestone was achieved in 2016 during this internalisation by successful implementation of a greenfield project in Poland, which established itself as the most modern motor assistance centre in the Polish market. In 2017, work also began on establishing a separate assistance centre in Romania.

Expanding lines of business

There are three areas where VIG aims to expand its business activities: health insurance, bank insurance and reinsurance.

Health insurance

Based on market size, VIG presence, the structure of the public healthcare system and parameters for the private health insurance market, in addition to Austria five markets were identified where efforts will be made to expand health insurance. These are Poland, Romania, Bulgaria, Hungary and Turkey. Vienna Insurance Group will develop concrete business plans with local management in these five target countries to expand the portfolio in this segment.


The Group company VIG Re, which is headquartered in Prague, has established itself as one of the leading reinsurers in the CEE region in the last few years. It operates in 31 countries and recorded a premium volume of around EUR 370 million in 2016. VIG Re is now planning its next international initiatives, namely a gradual expansion of its business in Germany and controlled entry into the market in Western Europe, with a focus on France, Belgium, Luxembourg and Switzerland. VIG Re aims to position itself in these expanded markets as a niche player for special customer and market segments. The target group was therefore defined as locally and regionally oriented direct insurers.

Bank insurance

Life insurance traditionally dominates the range of insurance products sold through banks. VIG feels a great deal of potential still exists to offer further insurance solutions to bank customers and plans to ramp up sales of health and property and casualty products. A project group is being formed with bank insurance partner Erste Group. The aim of the project is to optimise products, distribution and profits for the banks and insurance companies in all countries where Erste Group and VIG cooperate. The focus is on customer needs and requirements, easily understandable products and integration into the bank’s digitisation initiative. This also includes organisational and structural considerations on the insurance side that will improve communications and service for customers and banking partners.

Optimising our business model

In addition to issues concerned with ensuring future viability, we are also implementing cost efficiency measures at the same time. These optimisation measures play a major role in the planned reduction of the combined ratio. This includes creating cost benefits by merging back-office functions and companies in the Group when long-term benefits due to potential synergies clearly outweigh the benefits of a diversified market presence.


Vienna Insurance Group works continuously on optimising processes in the area of claims management to make them more efficient and thus reduce expenses. In 2016, a project aimed at reducing insurance fraud was started or continued in Austria, the Czech Republic and Poland. The model tested in these three countries will now be transferred to other companies.

Closed file review

In addition to fighting fraud, Vienna Insurance Group also began a project for analysing the claims handling process in 2016. The goal of the analysis is to ensure a uniform group procedure for identifying and preventing unjustified overpayments due to weak points in the claims process.

Other measures

Name of Polish life insurer Skandia changed to Vienna Life

The name of the Polish life insurance company Skandia, which was acquired in May 2014, was changed to “Vienna Life Towarzystwo Ubezpieczeń na Życie SA Vienna Insurance Group” in October of the current year.

Name of Ukrainian life insurer Jupiter changed to Kniazha Life

The name of the Ukrainian life insurance company Jupiter was changed to “Private Joint-Stock Company "Insurance Company "Kniazha Life Vienna Insurance Group" in September of the current year.

Call-in and repayment of supplementary capital bonds

In December 2016, VIG informed the market that it was calling in two supplementary capital bonds. As the issuer, VIG repaid around EUR 256 million on the first ordinary call-in date effective 12 January 2017. A new bond in the amount of EUR 400 million was issued in 2015 based on the callability of the two supplementary capital bonds mentioned. Due to the careful long-term financial planning of the Group, the call therefore had no negative effects on the Group’s rating and hardly any effect on solvency. Instead, VIG provided proof of its reliability as a bond issuer.