6 November 2020
Cancellation of notice of 37th general meeting due to new circumstances and increased coronavirus-related risks
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:
The management board, with the consent of the supervisory board, hereby cancels the 37th general meeting of shareholders of Sava Re d.d. scheduled for Monday, 16 November 2020, at 1pm.
In the notice of the 37th general meeting, the Company assessed its ability to pay dividends in respect of the 2019 profit based on the revised annual plan for 2020 and the revised strategic plan for 2020–2022. Both plans were also based on the business development in 2020 and included the effects of and estimated risks from the first wave of Covid-19 on the operations of the Sava Insurance Group (hereinafter: the Group). In addition, stress scenarios were analysed to assess capital adequacy. Based on legal advice obtained since the onset of the pandemic relating to the matters discussed in the following paragraph, it has not been necessary, to date, to recognise any consequences of additional pandemic-related risks in the Company’s planning or strategic documents, or stress scenarios.
After the general meeting had been called, some days ago Sava Re was informed of and faced with new circumstances that had arisen in certain EU insurance markets and in the United Kingdom that are in contrast to previously obtained legal advice. These primarily include legal and regulatory practices and other material facts related to potential additional adverse effects of the Covid-19 pandemic on the operations of the insurer Zavarovalnica Sava and the reinsurer Sava Re. These new circumstances primarily relate to Covid-19–related claims on policies written in the Irish market (under the freedom of services rules) and reinsurance contracts written in the United Kingdom for business interruption coverage as part of property policies, which under new court and regulatory practices may potentially have an adverse effect on the Group’s business results and solvency position.
In this regard, Sava Re has also been called upon by the Slovenian Insurance Supervision Agency to reconsider its position relating to the assessment of risks in the above markets, as well as any impacts on its solvency position.
In line with the Group’s risk management policy, the Company immediately started assessing the likelihood and severity of such risks occurring. This will take some time.
The companies Zavarovalnica Sava and Sava Re have started compiling additional information to assess their exposure to these new risks and the likelihood of these risks being realised and to calculate any potential impact on the separate and consolidated results and the solvency position of the companies and the Group. The Company will assess the size and likelihood of potential claims in the 2020 annual report and the following quarterly financial reports.
Accordingly, the Company’s management and supervisory boards, with all due care, believe that at the moment it is in the best interest of Sava Re, the Group and its policyholders that the general meeting be cancelled and dividend payments in respect of 2019 be temporarily suspended.
The business results for the first nine months of 2020 to be released on 19 November 2020 are favourable and consistent with published plans. Any potential effects that may arise from the new risks have neither materialised yet nor impacted the results of the first nine months of 2020, but they could affect future results.
Sava Re will take a position on dividend payments when publishing audited financial statements for 2020.
The Company’s management thanks all its shareholders for their understanding.
The cancellation of the notice of the 37th general meeting of Sava Re d.d. was published in the daily newspaper Delo issued on Friday, 6 November 2020. As from 6 November 2020, the notice on the cancellation of the 37th general meeting will be posted on the website of the Ljubljana Stock Exchange, via the SEOnet information system (http://seonet.ljse.si), on the AJPES website (http://www.ajpes.si) and on the Company’s official website (http://www.sava-re.si).
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