Triglav Sees 3% Fall in H1 Net Profit, Down to € 33.5 million Y/Y

By , 19 Aug 2020, 11:40 AM Business

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STA, 18 August 2020 - Slovenia's leading insurance group, Triglav, has reported EUR 33.5 million in net profit for the first half of 2020, a 3% decrease year-on-year. The group posted a total of EUR 673.4 million in consolidated gross written premium, up 7% compared to the same period in 2019, said insurer Zavarovalnica Triglav on Tuesday.

The group's net revenue earned from insurance premiums increased by 7% to EUR 523.1 million. The group generated EUR 40.6 million in profit before tax, 3% down year-on-year.

Net underwriting expenses amounted to EUR 338.3 million, up 2% compared to the first half of 2019. Average premium growth was meanwhile 4% in Slovenia and 8% in markets abroad. Growth was recorded in all three insurance segments; 17% increase in health insurance, 6% in non-life insurance and 3% in life and pension insurance.

"In the first half of the year, premium income recorded growth, whereas the generated profit was adversely affected by the deteriorating situation in global financial markets and partly by major CAT and other one-off events. The pandemic has radically changed the way we do business and we have adapted effectively to this situation," said chairman Andrej Slapar as quoted in the unaudited report.

Profit before tax from underwriting activities amounted to EUR 34.6 million, 3% up year-on-year, and the part earned from financial investments totalled EUR 5.3 million, a decrease of 17% year-on-year.

"Broken down by insurance segment, 85% of total profit (vs. 89% last year) was generated by the non-life insurance segment. In addition to good results from premium income, it was influenced by lower rates of return on investment and the creation of additional provisions."

The pandemic and its financial ramifications prompted a lower return on Triglav's investment portfolio worth EUR 3.3 billion. "Its value decreased by 5% in the first quarter of 2020, and at the end of the second quarter it returned to approximately the same value as at the end of 2019."

The volume of assets under management in the group's mutual funds decreased by 4% to EUR 979.4 million compared to the 2019 year-end, while discretionary mandate assets stayed roughly level at EUR 82.5 million.

Meanwhile, the consolidated gross written premium of Zavarovalnica Triglav grew by 4% to EUR 399.9 million and net revenue from premiums increased by 2% to EUR 283.2 million.

Profit before tax was down by 4% to EUR 31.6 million and net profit decreased by 4% as well to EUR 26.4 million. Net underwriting expenses were up by 3% to EUR 187.8 million.

Owing to the precarious situation in the financial markets, triggered by the pandemic, the group cannot make any sure projections on profit figures at the end of the year. According to Slapar, the profit before tax was planned between EUR 95 million and 105 million and based on the April assessment the annual profit before tax will likely decline by 10-25% compared to the planned figures.

The annual written premium and the combined ratio of the group are meanwhile forecast to be within the planned figures - around EUR 1.2 billion and below 95%, respectively.

Zavarovalnica Triglav supervisors also appointed Andrej Andoljšek chief supervisor today.

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