Strong business in emerging European markets helped second-quarter pretax profit at Vienna Insurance Group rise 7.8 percent to 150.3 million euros ($187.6 million), it said, beating market expectations as premiums grew by nearly a fifth. Analysts polled by Reuters had on average expected profit before tax of 143 million. Gross premiums grew 19.3 percent to 2.54 billion euros, also ahead of market expectations. Its first-half combined ratio - which measures costs and claims as a percentage of premiums - fell to 96.6 percent despite bad weather, especially hail and heavy rainfall in Austria, it said on Wednesday. It maintained its 2012 outlook, saying it would focus "on strengthening organic growth by promoting business with existing companies. This will, however, not exclude the possibility of acquisitions rounding off the portfolio." The group has focused on growth markets in emerging Europe and makes half its profit is central and eastern Europe. Profit in its central and eastern Europe operations advanced nearly 14 percent in the first half. It did not give specific profit guidance, saying only it maintained its goal of growing faster than the market while keeping volatility as low as possible. Its government bond exposure to peripheral euro zone countries represents only around 0.2 percent of its total investments. Vienna trades at 9.6 times 12-month forward earnings, a premium to peers such as Generali, Zurich Financial , Axa and Allianz, according to Thomson Reuters StarMine, which ranks analyst estimates by previous accuracy. Reuters
