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Austrian property rates softening: Generali


VIENNA, Austria— Rates are softening in Austria's commercial property insurance market, while liability rates are more stable, according to Luciano Cirinà, chairman of Generali Vienna Group, a unit of Assicurazioni General S.p.A.

"There is a trend toward softening of the [Austrian] market," Mr. Cirinà said Friday. "The main line where we see this is industrial fire. It is the one which is more prone to these cyclical trends, while on the liability side there is much more stability," he said.

Austria typically does not have the price fluctuations of, for instance, the German market, he noted.

Reporting financial results for the first half of the year, Generali Vienna Group said Friday its consolidated profit rose to € 123.6 million ($168.8 million), up 60.6% from the previous year six-month period. There was a particularly strong increase in earnings from Generali Versicherung AG, Vienna -- Austria's second-largest insurer -- whose profit more than doubled from €26.2 million ($35.8 million) to €61 million ($83.3 million).

Earnings of the group's members in Central and Eastern Europe also rose significantly, increasing from €22.9 million ($31.3 million) to €45 million ($61.4 million). The main reasons for these positive developments included, not least, concentration on profitable lines of business and expansion into new market segments and sales channels.

Claims and benefit costs incurred by the group during the first half of 2007 increased by 10.4% from the previous year, with total payments of €1.23 billion ($1.68 million). Among other things, the increase was due to damage caused by winter storm Kyrill in January, which cost Generali Versicherung in Austria approximately €42 million ($57.3 million).

In the second half of year, Generali Vienna Group's activities will include preparations for the transfer of its existing activities in Central and Eastern Europe to the newly created joint venture between Italy's Assicurazioni Generali and the PPF Group, based in Prague.

"The formalities are being carried out now, so I expect within the year it will be completed," Mr. Cirinà said.