VIG profit jumps amid tax woes

Vienna Insurance Group (VIG) reported increased profit today (Thurs).The company announced net profit had risen by 9.2 per cent from the first six months of 2009 to 194.4 million Euros during the same period this year. Profit before taxes jumped by 11 per cent to 255.6 million Euros, it added. Analysts had expected profit before taxes to rise by just 6.5 to 8.3 per cent year on year.VIG, which is listed on the Vienna Stock Exchange (WBAG), is active in several countries in Central and Eastern Europe (CEE).Its head Günter Geyer caused controversy recently by warning that customers would have to bear the brunt if the bank tax planned by the Austrian government coalition also affected insurers.”Eighty per cent of the money managed by insurance companies belongs to the customers. If the government issues a tax affecting insurance companies, it needs to be aware such a tax will mainly affect the firms’ customers,” he said.The government – formed by the Social Democrats (SPÖ) and the conservative People’s Party (ÖVP) – said earlier this year it wanted to rake in an extra 500 million Euros every year from 2011 with the planned levy.SPÖ Chancellor Werner Faymann said banks must do their bit in reducing state debt and the budget deficit – which reached 3.5 per cent in 2009 – after being supported with around six billion Euros in government money last year.Faymann and ÖVP Finance Minister Josef Pröll have remained tight-lipped on whether the levy will also affect insurance companies operating in Austria.