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9 March 2018

Unaudited financial results of the Sava Re Group and Sava Re, d.d. for 2017

Pursuant to the Rules of the Ljubljana Stock Exchange, d.d., Ljubljana and the Market in Financial Instruments Act, Sava Re, d.d., Dunajska 56, 1000 Ljubljana hereby announces the following:

The performance of the Sava Re Group was marked by premium growth in all markets where it is present. Profits are within the planned range although impacted by some large claims. These were offset by better cost efficiency and synergy gains following the merger of the Group’s insurance companies based in Slovenia and Croatia.

In 2017 the Sava Re Group wrote €517.2 million in gross premiums, an increase of 5.5% over 2016 and 4.7% more than planned. In Slovenia, gross non-life insurance premiums grew by 5.7%, while gross life insurance premiums rose by 3.7%. The Sava Re Group achieved a high, nearly 10% premium growth in international markets, both in non-life and life insurance business. Gross premiums written relating to the reinsurance segment grew by 3.8%.

The Sava Re Group closed 2017 with a net profit of €31.1 million euro and a 10.1% return on equity. Net profit for the year declined by 5.5% compared to the previous year, largely as the result of a number of weather-related claims that impacted both insurance and reinsurance operations, with gross claims paid increasing by 14.9% and net claims incurred by 10.3%. The profit of Zavarovalnica Sava was impacted by storm losses (of about €11.9 million in total), while the reinsurance portfolio performed somewhat poorer than in 2016 due to major international claims, most notably claims relating to hurricane losses in the Caribbean and the USA of €4 million, and a major loss event in Russia of €3.8 million.

The Sava Re Group succeeded in delivering a net profit within the set target range despite increased claims, mainly thanks to better cost control and by realising synergy gains following the successful merger of the Group’s EU-based insurers in the first full post-merger year. The net expense ratio for the year declined by 1.3% from 34.0 to 32.7%. In 2017 the Group’s combined ratio, excluding the effect of exchange differences, stood at 95.5%, deteriorating by 0.9 percentage points as a result of higher claims.

The return on the investment portfolio was better than planned, despite the rather unfavourable conditions in financial markets. In asset management activities, the Sava Re Group gives priority to security and liquidity to ensure that obligations arising out of insurance contracts can be met in an appropriate manner.

In 2017 the Group’s equity increased by € 6.4% to €316.1 million as at 31 December 2017. Technical provisions of the Group totalled €1,127 million as at 31 December 2017, up 1.6%. In view of its robust financial position, in 2017 the Sava Re Group repaid a major part (€ 24 million) of the subordinate loan taken in 2006 and 2007 to finance its expansion abroad.

Also last year, rating agencies affirmed the financial strength and capital adequacy of the Sava Re Group. In July 2017, after its regular annual rating review, the Standard & Poor's rating agency affirmed Sava Re's existing “A–” (excellent) issuer credit and financial strength ratings but revised the outlook from “stable” to “positive”.

In 2017 the Sava Re Group members put greater emphasis on developing new products and new sales channels in line with the adopted medium-term strategy – Group members focused on digitising their operations and placing the client at the centre of services and ways of working. The Group’s medium-term focus also includes the growth and development of health insurance products that Zavarovalnica Sava launched in December 2017. In line with its strategy, the Sava Re Group entered the assistance market in 2017, which gives its members further room to unlock synergy benefits related to organising assistance in conjunction with its motor, health and home owners insurance business. With a view to expanding its pension insurance activities, Sava Re signed a deal to acquire 100% of the Macedonia-based NLB Nov penziski fond in 2017, thus gaining a foothold in the Macedonian pension insurance market. Expansion and growth remain a key part of Sava Re’s strategic focus. 

We attach the unaudited financial results of the Sava Re Group and Sava Re, d.d. for 2017 and the presentation of results prepared for today’s press conference. The audited consolidated annual report will be published on 5 April 2018, in accordance with the Company’s financial calendar. 

This announcement will be available on the Company’s website at www.sava-re.si, at least five years from the date of the announcement.

Unaudited financial results of the Sava Re Group and Sava Re, d.d. for 2017

Press conference presentation