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22 November 2019

High premium growth, results on target

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, Ljubljana, makes the following announcement: 

At its regular meeting yesterday, the Sava Re supervisory board was presented with the unaudited financial results of the Sava Insurance Group and Sava Re for the nine months to 30 September 2019. 

In the first three quarters of 2019, the Sava Insurance Group generated a net profit of EUR 37.7 million, driven by high premium growth and improved cost-efficiency.

Gross premiums written up 9.5%; net profit on target

The Sava Insurance Group wrote EUR 471.1 million in non-life premiums, up by 9.5% year on year. The growth in gross premiums written was contributed by Slovenian non-life insurance business (10.9% growth), non-Slovenian non-life insurance business (20.3% growth), reinsurance business (3.6% growth), non-Slovenian life insurance business (7.4% growth) and Slovenian life insurance (0.4% growth). Thus, in the first three quarters of the year, the Group wrote 84.9% of its full-year premium target for 2019.

In the period 1–9/2019, the Sava Insurance Group achieved a net profit of EUR 37.7 million, representing 87.6% of the Group’s annual target for 2019 and a 29.3% increase year on year. The annualised return on equity was 13.6%. 

Better cost-efficiency

The Group’s performance was also bolstered by better cost-efficiency, with a 1.5-point year-on-year improvement in the expense ratio of insurance business, primarily reflecting faster growth in premiums over expenses.

Larger claims burden

The net incurred loss ratio was somewhat larger than planned, mainly due to the impact of higher net claims incurred by the Group’s non-life insurers. Primary insurance saw an increased claims burden in Croatia, where claims rose in motor third-party liability and in motor casco business, as well as owing to the integration of the Ergo non-life insurer into the Group.

Subordinated bond issue to support the Group’s expansion and optimisation of capital

In addition to achieving significant organic growth, the Sava Insurance Group remains committed to its strategy of acquisitions-based growth. After Zavarovalnica Sava acquired the insurers ERGO Osiguranje d.d. and ERGO Životno Osiguranje d.d., Croatia, in February this year, Sava Re purchased 85% of Sava Infond, so that the members of the Sava Insurance Group now hold 100% of the voting rights in Sava Infond. In August, a deal was signed to purchase the Slovenia-based medical centre “Diagnostični center Bled, d.o.o.”

In October 2019, Sava Re issued subordinated bonds worth a total of EUR 75 million, with a scheduled maturity of 2039 and an early recall option for 7 November 2029. The capital raised is Tier 2 eligible and Solvency II compliant. This successful issuance will provide the Group even more flexibility to pursue growth. 

The documents “Unaudited financial report of the Sava Insurance Group and financial statements of Sava Re d.d. for the nine months to 30 September 2019” and “Investor presentation” are attached below. 

Financial report 1-9 2019

Presentation for investors 1-9 2019