Sava Re Insurance Saw Record Profit in 2018

By , 11 Mar 2019, 16:15 PM Business
Sava Re Insurance Saw Record Profit in 2018

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STA, 8 March 2019 - Sava Re, Slovenia's second largest insurance group, generated a record profit of EUR 43m in 2018, an increase of 38.3% on the year before as gross written premiums rose by 5.6% to EUR 546.3m.


The core company Sava Re saw its profit increase by 27% to EUR 41.87m, while gross written premiums decreased by a percent to EUR 151.6m.

Releasing the results on the web site of the Ljubljana Stock Exchange, the company said that 2018 saw a relatively low incidence of large claims, which was reflected in the group's improved performance.

"Profitability was also supported by the synergies from the merger of four insurers now under the unified brand of Zavarovalnica Sava and the better performance of the group's non-EU-based members," the release said.

Chairman Marko Jazbec told the press that 2018 was a "record year and a very successful for the entire group," with both plans for 2018 and results from 2017 having being exceeded.

Jazbec added that the management was especially proud of the record group profit, and the "exceptionally high return on equity, amounting to 13.1%."

The growth in group premium was generated by expansion in non-life insurance business in Slovenia (up 10.9%) and outside it (12.5%) and a 17.8% growth in life insurance business abroad.

The volume of collected gross premiums in the group, which also has subsidiaries in Croatia, Serbia, Montenegro, Kosovo and North Macedonia, last year exceeded the planned by 5.1%.

The reinsurance segment saw 7.2% less in gross written premium as a result of strict underwriting discipline and selective underwriting.

As anticipated, there was a drop of 2.9% in gross life insurance premiums written owing to a large number of policy maturities.

"When it comes to reinsurance on the global market, we were relatively conservative from the aspect of assuming new risks, so we recorded a drop in premium, which is partly also a result of the fluctuation of the US dollar compared to other currencies," said Jazbec.

Operating revenue of the group was up by 9.8% last year, which in addition to the growth of gross premiums by the existing companies was also a result of the operations of the new companies included in the group in 2018.

The group finalised three takeovers last year: the North Macedonia-based pension company NLB Nov Penziski Fond, which was renamed Sava Penzisko Društvo; the Serbia-based insurer Energoprojekt Garant, which was merged with Sava Re's Serbian non-life insurer at the year end; and the Slovenia-based assistance service provider TBS Team 24.

Sava Re has also signed agreements on the acquisition of three further companies; the transaction involving two Croatian ERGO companies was finalised in February and the one involving KBM Infond slated for closing later this year.

Investors on the Ljubljana Stock Exchange have responded to the record results, with the Sava Re share adding 2.35% to EUR 17.40 around noon.

The dividend proposal from the management and supervisory boards will be known in April, when the AGM will be called.

Jazbec said that "dividends will certainly not be lower than last year," when Sava Re paid out a total of EUR 12.4m in dividends to its shareholders, or 80 cents per share.

Regarding the plans for 2019, Jazbec reiterated that net profit was expected to increase by another 10%, while collected premiums were planned to exceed EUR 555m.

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