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Eastern Europe markets still expanding, Austrian insurer said

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Markets in eastern Europe continue to expand, the Vienna Insurance Group (VIG) said Wednesday, noting its strong performance in the region last year despite the economic crisis.

“Unlike in western Europe, people in these countries have a stronger desire to improve their lifestyle,” VIG chairman Guenter Geyer told journalists. “Not everyone has fulfilled their wish to buy a car or a motorbike yet,” he added. “Despite all the negative predictions voiced by numerous Nobel prize winners on eastern European markets, we have seen a good result,” Geyer added.

VIG, which has branches all over the region, reported 8.02 billion euros (10.82 billion dollars) in sales last year, 49.1 percent of which came from eastern Europe. Group profit before tax amounted to 441.2 million euros, according to the company’s annual report published Wednesday. Again, eastern Europe accounted for 40 percent of this result. Countries in the region, with the notable exception of Poland, saw their economies contract last year, prompting a hike in unemployment and the introduction of strict austerity measures.

But VIG sales in central and eastern Europe totalled 3.93 billion euros in 2009, up 0.2 percent compared to the previous year. “People there have a different approach to the word ‘crisis,'” noted Geyer” They compare it to the situation they saw 20 years ago (after the fall of communism) and we’re not at that stage,” he added. Given this, VIG predicted further growth in 2010, despite Europe’s uncertain economic future, and forecast profit before tax to jump by over 10 percent, in part due to restructuring within the company.

Vienna, March 31, 2010 (AFP)