Vienna Insurance Company

The Vienna Insurance Company is a joint foundation of the First Hungarian General Insurance Company (EMÁBIT) and Viennese business circles. Initially it was engaged in elementary and cargo insurance, later it was extended to accident and motor insurance. In principle, its area of operation covered the provinces of the Habsburg Monarchy beyond the Lusatian border, but in practice it also sold insurance extensively in Hungary, relying on EMÁBIT's infrastructure and network of agents. After the dissolution of the Monarchy in 1925, the company was merged into Phőnix Biztosító, also based in Vienna.

The EMÁBIT group had three Vienna-based members, Securitas Reinsurance Company, founded in 1865, and two twin companies, Vienna Insurance Company and Vienna Life and Annuity Insurance Company, founded in 1881. Of the latter two companies, the Vienna Insurance Company was engaged in property and casualty insurance. EMÁBIT started selling insurance in Austria as early as 1858. It established management agencies in Vienna, Trieste and Prague. As an indication of its initial international orientation, in 1865 it opened a branch in Alexandria, Egypt, which continued to operate successfully until the First World War. However, in contrast to the rapid domestic growth of the early years, the volume of foreign business did not live up to the high initial expectations, and the company's operations became increasingly focused on Hungary. This ultimately led to the reorganisation of the activities in the Austrian provinces. The establishment of the two Vienna subsidiaries was directly prompted by the realisation that the Austrian clientele was expressly reluctant to insure their lives and assets with a Hungarian company, especially one with a Hungarian name. By early 1881, this climate of rejection had intensified to such an extent that it forced the management of EMÁBIT to change its previous strategy. That the move was not part of a well thought-out strategy is best demonstrated by the fact that less than two years earlier the company had bought its own houses in Vienna and Prague for its head offices. The Vienna Insurance Company eventually took over both houses and the entire portfolio of policies in Austria, including the territory of the present Czech Republic, from the parent company.

Modern apartment building on the site of the Vienna Insurance Company headquarters. Vienna, Kolingasse 6.The Vienna Insurance Company was directly organised by EMÁBIT, no bank was involved in its establishment and no syndicate was organised. The share capital of HUF 4 million was subscribed by only 18 shareholders in the form of 20 000 shares of HUF 200 each. The company's shares were immediately listed not only on the Vienna Stock Exchange but also on the Budapest Stock Exchange. The chairman of the insurance company was one of Vienna's most prominent entrepreneurs, the knight Ede Pál Schoeller. Schoeller was known in the 1880s primarily as a railway entrepreneur (Wittmansdorf-Ebenfurt Railway, 1883), but his business activities also extended to the manufacture of arms and metal goods, and for decades he was president of the Vienna commodity exchange and, in parallel, of the Austrian Chamber of Commerce and Industry. In addition to Schoeller, the Viennese business circles were represented on the board of the insurance company by the vice-president, Count Géza Batthyány, and later by Baron Fedor Nikolics, as well as by two members of the board of directors. EMÁBIT was represented on the board by CEO Henrik Lévay and Deputy CEO Vilmos Ormody, and EMÁBIT officials sat on the company's supervisory board. From 1892, Zsigmond Nyitrai, a former senior official of the parent company, was also appointed CEO. Nyitrai had strong business connections in Vienna, and in the 1860s he headed EMÁBIT's Vienna general agency. He later moved to Budapest and spent several decades as an official in the parent company, heading the reinsurance department in 1877. This may also have played a role in his appointment as CEO, as the parent company did not take profits from its Vienna subsidiaries through dividends in the usual way, but primarily through reinsurance. This was also the case in the post-founding news, according to which EMÁBIT received 25% from the direct business of Wiener Versicherung. Nyitrai moved to Vienna after thirty years of service, where he became a member of the board of both companies and CEO of the asset insurer. He remained in operational management until 1914 and a member of the board of directors until his death in January 1918.

The creation of the two Vienna-based companies was not part of a clear segment strategy. This is clearly demonstrated by the fact that after the Viennese took over and bought the Vienna and Prague offices, organisation and business portfolio of EMÁBIT, they immediately opened a branch in Hungary. In the Austrian provinces, however, the parent company continued to sell life insurance. The structure of the group had not become simpler, but more complex. Despite the Monarchy-wide scope of business, Wiener Versicherungsosító never really became a large company, with a balance sheet total of less than 10% of that of the parent company.

After the First World War and the dissolution of the Austrian-Hungarian Monarchy, the group had to rethink its operations. In the majority of the successor states, EMÁBIT subsidiaries were retained with the involvement of a local majority owner. However, in contrast to the Yugoslav, Czechoslovak and Romanian markets, EMÁBIT decided to withdraw from Austria. Its stake was bought in 1924 by the parent company of Vienna-based Phönix, Münchener Rückversicherungs AG, which merged Vienna Insurance with Phönix Insurance the following year. Interestingly, in these few years after the World War, one of the most important figures in the history of Hungarian finance, Dr. Sándor Popovics, was a shareholder and member of the board of directors. Popovics was governor of the Austro-Hungarian Bank between 1909 and 1918, and then Minister of Finance in the third Wekerle government (1918).

Sources

Jenő Csury Jr. - Imre Marosi 1931: The History of Hungarian Insurance. Hungarian Hungarian insurance.

Sándor Mihók, then Jakab Ambruster, G. Sándor Nagy, later Mihály Della Vedella (ed.) 1873-1944/45. Hungarian Compass Financial Yearbook. Budapest.

EMÁBIT (Ormody Vilmos) 1908: The jubilee album of the First Hungarian General Insurance Company: 1857-1907. Budapest.

Gábor Tamás 2019a: Managerial dominance? Organizational evolution and career paths of officials in an insurance company. Kövér György - Pogány Ágnes - Weisz Boglárka (eds.): Manor - Company. Hungarian Economic History Yearbook 2019. (3.) 287-324.

Gábor Tamás 2019b: The development of the insurance market in Hungary from the mid-19th century to the First World War. Insurance and Risk (6.) 1. 14-49.

No name 1881: Vienna Insurance Company. Economic column. The Hon.7 June 1881.

Untitled 1881: The Hon's private telegraph books. Vienna. The Hon. 14 June 1881.

László Markó (editor): New Hungarian Biographical Dictionary I-VI. Budapest, 2001-2007 (Popovics Sándor ÚMÉL V. 434.)

Founded on 15 July 1881.

Date of cessation: 1925

Founders: joint foundation of the First Hungarian General Insurance Company and Viennese business circles

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Main activity: insurance

Main products are not set

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Author: by Gábor Tamás