STA, 20 November 2020 - Insurance group Sava Re, Slovenia's second largest, reported a net profit of EUR 47.6 million for the nine months to the end of September, an increase of 26.4% year-on-year, as gross premiums written rose by 12.4% to EUR 527.1 million.

The unaudited financial report, filed with the Ljubljana Stock Exchange, shows the group's operating revenue rising by 16.4% year-on-year to EUR 489.5 million.

The growth in profit, operating revenue and gross premiums is attributed in great part to the acquisition of life insurer Vita, consolidated in the group accounts as of 31 May 2020.

The acquisition contributed EUR 9.9 million to the increase in profit, and without this effect group net profit would have broadly been at the same level as in the same period last year.

Since its inclusion in the group Vita generated a profit of EUR 2.9 million and in addition EUR 7 million was one-off income from the excess of the fair value of the net assets acquired over the purchase price.

Growth in operating revenue was driven mainly by the inclusion of Vita, expansion of freedom of services business written by the insurer in EU member states, and greater volumes of Slovenian non-life business and international reinsurance business.

The inclusion of Vita contributed EUR 28 million to the growth in gross premiums written, with additional contribution from the insurance business written with various companies in the EU. Excluding that business, the growth in gross premiums written would have been 9.5%.

The net expense ratio improved by 1.6 percentage points y/y, also as the result of the integration of Vita, which operates at an even more favourable expense ratio compared to other group members.

Improved expense ratios were also achieved in the reinsurance and Slovenian non-life segments, mainly because income grew faster than expenses due to both the fixed nature of certain expenses and certain cost optimisation measures adopted to mitigate the negative impacts of Covid-19 on the group's operations.

Profitability was also supported by a more favourable claims experience thanks to a lower loss rate in motor business and the absence of catastrophic loss events.

Despite the profitability, the insurer will not pay out dividends and the shareholders' meeting to take a decision on that was cancelled a few days ago due to increased risks detected relating to potential additional negative impact of the Covid-19 pandemic on the operations.

"After the reporting date, Sava Re was informed of new circumstances that had arisen in certain EU insurance markets and in the United Kingdom related to potential additional adverse effects of the Covid-19 pandemic on the operations," the company's release reads

Based on current detailed analyses of its insurance exposure, the group has concluded that Covid-related business interruption claims are not covered under its policies written directly under freedom of services rules in the EU.

"Regarding its exposure under reinsurance contracts, there may be coverage in some cases. In line with preliminary estimates, in the last quarter of 2020, the group will most likely set a provision of up to EUR 10 million for potential legal expenses and reinsurance claims in this regard," it said.

Even with this provision for Covid claims, the management expects - in the absence of any major loss events - that the group will achieve its full-year 2020 plan, that is more than EUR 50 million in net profit and an operating revenue of up to EUR 640 million.

STA, 17 April 2020 - The insurance group Sava has adjusted its expected net profit for this year as a result of the crisis, saying on Friday it is likely to be about 15% to 20% lower than the initially planned EUR 45 million.

Sava originally projected this year's profit to miss last year's record mark of EUR 50.2 million by 10%. While it generated EUR 584.9 million in operating revenue last year, the plan for this year had been set at EUR 610 million.

The changed circumstances, which include an expected 6-8% drop in GDP, lockdown measures that could remain in place until the end of May and a major decrease in car insurance revenue, are likely to impact profit by 15-20% and revenue by 5-7%, the company said.

The assessed impact on the solvency ratio, initially expected to stand at 203% at the end of the year, is 10 to 15 percentage points.

STA, 28 February 2020 - The insurance group Sava collected EUR 599.3 million in gross premiums last year, which is 9.7% more than in 2018, while its net profit was up 16.7% to EUR 50.2 million, show the unaudited financial results released by the parent company Sava Re on Friday.

The report says that the gross premium growth was contributed mainly by the Slovenian non-life insurance business, which was up 12.2%, and the non-life insurance business in foreign countries (+20.3%).

Sava Re noted that part of this came from an acquisition in Croatia, with the group member Zavarovalnica Sava acquiring outright stakes in the insurers Ergo Osiguranje and Ergo Životno Osiguranje.

The group's operating revenue was up by 10.1% last year to EUR 584.9 million, while pre-tax profit increased by almost 10% to EUR 60.7 million.

Return on equity also increased by 0.8 of a percentage point compared to 2018 to 13.8%.

The management of the reinsurer Sava Re, the parent company in the group, will present last year's results in detail at a press conference today.

Invest in Slovenia: Meet the Companies in the Benchmark Investment Index, the SBI TOP

STA, 27 December 2019 - Bank NLB and Belgian KBC, NLB's former owner, have sold their life insurance company NLB Vita to the country's second biggest insurer Sava Re. The sale means that NLB has met the last of several conditions upon which the European Commission approved the 2013 bailout.

The cost of the deal, signed on Friday, has not been disclosed, but the business paper Finance recently reported that NLB and KBC expected to get between EUR 20 million and EUR 30 million.

Established by NLB and KBC in 2002, NLB Vita is the largest life insurance company in Slovenia, holding 14.8% of the market.

The sale is to be completed by the end of the first half of 2020, pending regulatory approval and suspensive conditions, said a press release issued by NLB and Sava Re.

"This will be the final step on our way to meeting all of the obligations imposed by the European Commission and a vital milestone, because we will be able to do business and show our full competitive potential," NLB chairman Blaž Brodnjak was cited as saying in the press release.

"We believe we have found the right strategic partner for NLB Vita, one to continue its story of success," Brodnjak said.

Sava Insurance Group chairman Marko Jazbec believes that the combination of knowledge and experience from KBC and NLB in NLB Vita provide a solid foundation for future development of a strong partnership with Sava in banking insurance.

He sees the acquisition as a key step for Sava to solidify its position in the life insurance market in Slovenia. "The share of life insurance premiums in terms of GDP is lower in Slovenia than in other, more developed European markets, therefore we see potential for development and organic growth for the future."

STA, 22 November 2019 - The insurance group Sava reported on Friday a net profit of EUR 37.7 million for the first nine months of the year, a 29.3% year-on-year increase driven by high premium growth and improved cost-efficiency. Operating revenue was up 8.7% to EUR 427.5 million.

The group wrote EUR 471.1 million in non-life premiums, up 9.5% year on year, mostly on account of 10.9% growth in gross premiums written in the non-life insurance business in Slovenia and 20.3% growth in the non-life insurance business outside of Slovenia.

More moderate growth figures were recorded for the reinsurance business (3.6%), life insurance outside of Slovenia (7.4%) and life insurance in Slovenia (0.4%).

In the first three quarters of the year, Sava wrote 84.9% of its full-year premium target for 2019.

The company added the group's performance had also been 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.

Net claims incurred increased by 21% to almost EUR 287 million. "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, the business reports says.

Sava said that in addition to achieving significant organic growth, it remained committed to its strategy of acquisitions-based growth.

In October 2019, Sava issued subordinated bonds worth a total of EUR 75 million, with a scheduled maturity of 2039. It said this would provide the group even more flexibility to pursue growth.

The total assets of the Sava group, which has a 2,500-strong workforce, stood at EUR 1.84 billion at the end of September, 8.1% more than at the end of 2018.

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.

You can find all our stories about business in Slovenia here

Decline in profits due to payouts related to natural disasters.