In accordance with the Ljubljana Stock Exchange Rules and the applicable legislation, ZAVAROVALNICA TRIGLAV d.d., Ljubljana, hereby publishes the following notice:
 

On 28 March 2013, the Supervisory Board of Zavarovalnica Triglav d.d. at its regular third session of the year took note of the Audited Annual Report of Zavarovalnica Triglav for 2012 and the Audited Annual Report of the Triglav Group for 2012. The Supervisory Board will decide on approving both annual reports after examining them.

The profits of the Triglav Group and Zavarovalnica Triglav d.d. earned in 2012 were higher than the year before.  Net profit of the Triglav Group in 2012 amounted to EUR 73.2 million and was 54% higher than in 2011, whilst net profit of the parent company totalled EUR 50.4 million and was 15% lower than the year before. The returns of equity of both the Triglav Group and Zavarovalnica Triglav d.d. in 2012 were again higher than expected. At the Group level the return was 13.8% or 4.2 percentage points higher than in 2011, which is even more than the level of return on equity targeted by 2015 (i.e. 12%). In Zavarovalnica Triglav alone return on equity improved by 1.1 percentage point to 10.7% and was closer to the targeted level than in 2011.

In 2012 the Triglav Group posted a total of EUR 936.3 million in insurance and co-insurance premium (5% less than in 2011), of which the controlling company charged EUR 647.6 million (index 93).

Profit growth was primarily due to good results in the core business of insurance, as shown in a better combined ratio. The combined ratio – a measure of profitability in core insurance operations – improved over 2011 to 89.6% at the level of the Triglav Group (vs. 90.1% in 2011) and to 81.4% at the level of Zavarovalnica Triglav (vs. 83% in 2011).

Several factors led to a decrease in total written premium: reduced demand for certain insurance products, new bankruptcies of companies, lower purchasing power of households, higher unemployment rate, diminished scope of bank lending, measures for keeping good and loyal clients by means of a new client loyalty programme, repricing to match competition as well as measures to improve insurance technical results in individual non-life insurance classes. Increased competitiveness in the motor vehicle insurance market resulted in the adjustments of insurance terms and conditions and reduced the volume of written premium from car insurance. This premium was under additional pressure due to a systematic insurance portfolio selection and intense measures taken to mitigate poorer insurance technical results in non-life insurance, which helped improve the claims ratio.

As a result of greater cost effectiveness, gross operating costs of Zavarovalnica Triglav in 2012 decreased by 2% over 2011. Consolidated gross operating costs were 5% higher than the year before, primarily as a result of including new non-insurance companies in the Triglav Group.

As it is closely intertwined with financial markets, the Group could not entirely avoid the influence of the financial and economic crisis, since financial investments represent a major part of its total assets. Despite the relatively conservative investment policy of the Triglav Group, the value of certain investments decreased and led to lower net profits. Owing to significant or long-term decreases in the value of investments, permanent impairment of financial assets reached EUR 43.7 million.

The business results for 2012 prove that the overall business strategy is correct. The strategy includes a clear vision, based on the focus on the stability and profitability of operations, functioning an effective shield against the increasingly uncertain external environment.

Information contained in this notice will be published on the website of Zavarovalnica Triglav at www.triglav.eu as of 28 March 2013 and will remain available on the Company's public website for a period of at least five years.