In 2000, private insurance companies achieved a premium growth similar to their successful performance in the previous year. All insurance categories once again recorded a boost in their sales. Life insurance continues to be the sector's main engine. At a growth rate of one eighth, the share of premium revenues from life insurance was pushed up to almost 41 percent. Similar to 1999, the framework within which the private insurance business operated in 2000 was characterised by the great demand evinced by private households for capital-funded life insurance products, the still noticeable gap in yield between life insurance products and alternative investments in the bond market, stagnation in the health insurance business and brisk competition in property-liability insurance. In spite of excellent sales, a substantial increase in payments for property-liability insurance claims has had a negative impact on the profitability of private insurance companies, a trend further aggravated by another consequence of the tax reform package: retroactively for 2000, allocations to the equalisation reserve were deductible from the profit at a rate of only 50 percent. Reserves for pending cases and other technical reserves are tax-deductible at just 80 percent, all of which affects the insurers' earnings position. The underwriting result for property-liability insurance continued its declining trend from ATS –5.4 billion (1999) to ATS –8.2 billion (2000), in spite of the growth in premiums. The loss is reflected in the result on ordinary activities for the industry in general, reducing it by ATS 2 billion down to ATS 3.03 billion (2000). Considering these circumstances, Austrian insurers need to concentrate even more on their asset/liability management. The yield from actuarial investments in property-liability insurance indicates that insurers gained in earning power in 2000. It still remains to be seen whether their liquidity is at risk in the event of accumulated losses. Generally and interestingly, the Austrian insurance industry was able to continue its excellent investment performance of 1999. At 7.3 percent, the yield of actuarial investments in life insurance was kept constant, in spite of an increase in the exposure to stock markets and their general decline in valuation. Nevertheless, the positive gap against the secondary market yield for Austrian federal bonds slipped by 1.2 percentage points.