Pursuant to the Rules of the Ljubljana Stock Exchange, d.d., Ljubljana and the Market in Financial Instruments Act, Pozavarovalnica Sava d.d. ("Sava Reinsurance Company"), Dunajska 56, 1000 Ljubljana, hereby announces the following: 

In its regular session earlier today, the supervisory board of Sava Reinsurance Company was presented with the unaudited financial results of the Sava Re Group and Sava Reinsurance Company for the first half of 2016. 

In the first half of 2016 the Sava Re Group increased gross premiums written by 1.5 percent or € 280.8 million. Premium growth was mainly contributed by Slovenian non-life insurance business (2.4 percent growth) and non-Slovenian life insurance business (14.8 percent growth). Reinsurance premiums declined by 1.3 percent. Growth in gross premiums written was largest in Croatia (22.3 percent) and on the Macedonian market (9.2 percent). To date the Group wrote 57.6 percent of total Group premiums planned for the year 2016. 

In the first six months of 2016, the Sava Re Group generated a net profit of € 14.3 million, which is a 16.2 percent decline year-on-year; however, the management estimates that the Group's annual target can still be reached. Compared to the first quarter of 2016, the profit of the reinsurance segment improved, while the decline in the half-year profit was due to a lower profit of the Slovenian non-life insurance segment as a result of a slightly weaker performance of motor insurance business and the establishment of certain technical provisions. This is reflected in a less favourable incurred loss ratio compared to both last year's and the one planned. There was also a minor year-on-year decline in profits generated by the international non-life insurance business and Slovenian life insurance business. 

On the other hand, both the expense ratio and the return on the investment portfolio for the first half of 2016 were better than planned for the full year 2016. Furthermore, despite the challenging conditions in the financial markets, the return on the investment portfolio dropped by only 0.1 percentage points. 

Another important event in the second quarter of 2016 was the Standard & Poor's affirmation of the A- ratings on Sava Reinsurance Company. The outlook is stable. 

The most important project that the Sava Re Group is working on in 2016 is, however, the merger of the Group's four EU-based insurers. The project is running according to schedule with the aim that as of 2 November 2016, the insurers will be operating as a single entity. 

Attached hereto is the Unaudited Financial Report of the Sava Re Group and Financial Statements of Pozavarovalnica Sava d.d. for the Six Months to 30 June 2016.

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