SAVA RE, d. d., Ljubljana
Q1 2020 results: 15.1% premium growth despite restricted underwriting in March
Pursuant to the rules of the Ljubljana Stock Exchange d.d., Ljubljana, and the Market in Financial Instruments Act, Sava Re d.d., Dunajska 56, Ljubljana, makes the following announcement:
At its regular meeting yesterday, the Sava Re supervisory board was presented with the unaudited financial results of the Sava Insurance Group and Sava Re for the period January–March 2020.
In 1–3/2020, the Sava Insurance Group generated nearly EUR 149.0 million in operating revenue and a net profit of EUR 10.3 million. Return on equity was 10.6%. Operating revenue of the Sava Insurance Group reached 24.4% of the full-year 2020 target, and the net profit 22.9% of the target.
Gross premiums written up 15.1% and operating revenue up 16.2%
Gross premium growth was mainly contributed by the reinsurance business (22.6%), the Slovenian non-life insurance business (16.7%) and the non-life insurance business from abroad (11.0%). This growth was also contributed by business written under the freedom of services regime, which the Slovenian non-life insurer generated in cooperation with various EU partners. In addition, it is due to a modified timing of premium accounting for a major client, as well as the acquisition of ERGO Osiguranje and ERGO Životno Osiguranje in Croatia, which had not been part of the consolidated accounts in the first quarter of 2019.
Group operating revenue increased by 16.2% in the first quarter. In addition to the aforementioned premium growth, this was also supported by the acquisition of the fund management company Sava Infond, which had not been included in the first quarter 2019 accounts.
Net profit almost one-quarter of 2020 target
The Sava Insurance Group made a net profit of EUR 10.3 million in the first quarter of 2019, a 5.6% year-on-year decline and 22.9% of the 2020 target. The moderate decline in the Group’s net profit was chiefly due to the lower result of the reinsurance segment owing to increased net claims incurred, reflecting business growth and a rise in the number of claims reported. However, profit was also lower because of a more modest investment result, partly reflecting the adverse developments in financial markets related to the early effects of Covid-19 and partly expenses for subordinated debt.
The net expense ratio improved by 1.5 p.p. year on year, mainly because revenues grew faster than expenses given the relatively fixed nature of certain expenses, but the improvement is also the result of measures to contain costs taken by the Group to ease the negative financial impact of Covid-19 on operations.
Assessed impact of COVID-19 reflects high business and capital resilience of Group
On 17 April 2020, the Sava Insurance Group posted a preliminary impact analysis of the pandemic on its website and through the Seonet system of the Ljubljana Stock Exchange. The analysis revealed that the Group remains in a strong position despite the new circumstances, allowing further smooth performance of its obligations. Since posting the analysis, there have been no significant negative movements in financial markets or in the Group’s operations. By the end of August 2020, the Sava Insurance Group is planning to prepare an updated financial plan for the period 2020–2022, taking into account impacts associated with the Covid-19 outbreak on business projections, along with impacts of the NLB Vita acquisition, if completed by then.
The documents “Unaudited financial report of the Sava Insurance Group and financial statements of Sava Re d.d. for the period January–March 2019” and “Presentation of results 1–3/2020” are attached below.
This announcement will also be available on the Company’s website, at www.sava-re.si, at least five years from the date of this announcement.
Sava Re d.d.