5 March 2021

Unaudited FY 2020 results: Sava Insurance Group generates exceptional €56.4m in net profit despite significantly increased risk from potential additional negative impacts of pandemic on Group operations

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, 1000 Ljubljana, makes the following announcement:

In its regular session yesterday, the Sava Re supervisory board was presented with the unaudited financial results of the Sava Insurance Group and Sava Re for 2020.

In 2020, the Sava Insurance Group generated EUR 674.9 million in operating revenue, up 15.5% year on year. The net profit was EUR 56.4 million, a 12.3% increase over the previous year and better than planned. Return on equity was 13.3% and is 1.3 p.p. above the target return set in the strategy for 2020–2022.

Gross premium growth of 13.6%

In 2020, the Group wrote EUR 679.7 million in gross premiums, an increase of 13.6% over the previous year. The growth in gross premiums written was contributed by Slovenian life business (53% growth), mostly attributable to the acquisition of Vita, Slovenian non-life insurance business (8% growth), reinsurance business (18% growth), non-Slovenian life insurance business (9% growth), whereas non-Slovenian non-life premiums shrank by 6% year on year.

Better cost-efficiency

The net expense ratio improved by 2.1 p.p. year on year, which was primarily driven by the inclusion of Vita in the Group but also by growth in most other operating segments and measures to contain costs taken by the Group to ease the negative financial impact of Covid-19 on operations.

Lower loss frequency in motor business and deteriorated claims experience in reinsurance and FoS business

Gross claims paid in the Slovenian non-life segment declined significantly, primarily in motor insurance, reflecting a lower claims frequency. On the other hand, there were more claims in the reinsurance segment and significantly more major losses, many also related to the Covid-19 pandemic. The 2020 result was impacted by Covid-19–related claims, amounting to EUR 10.8 million. The increase in net claims incurred in FoS business is also related to the pandemic. The Group set aside claims provisions for potential legal expenses and claims because of the uncertainties surrounding new court and regulatory practices regarding non-life business interruption coverage of pandemic-related claims written in the Republic of Ireland and Great Britain. In this regard, the Group reserved EUR 6.4 million at the end of 2020.

Despite the difficult conditions during the year, the Group’s incurred loss ratio remained at the 2019 level.

Positive effect of Vita acquisition on Group profitability

In 2020, the Group made a net profit of EUR 56.4 million, an increase of 12.3% over the previous year. The increase was driven by good results in the life and non-life insurance segments, partly offset by the challenging claims experience in international reinsurance business. Higher profitability was also driven by the acquisition of Vita, which generated EUR 9.9 million in one-off income from the excess of the fair value of the net assets acquired over the purchase price.

Impact of 2020 events on parent’s unaudited result

The year 2020 was also special regarding dividends from insurance companies. Sava Re paid no dividends in 2020, nor did it receive any from its subsidiaries following regulators’ recommendations to retain profits. In addition, the parent Sava Re, which transacts reinsurance business, was hit by a large volume of Covid-19–related claims. Consequently, whilst the Sava Insurance Group achieved record results, the parent company ended 2020 with an unaudited negative result of EUR 11.0 million. Nevertheless, the capital strength of its major subsidiaries rose because of the profits generated in 2019 and 2020, which will allow dividend payments to the parent once restrictions on dividend distributions are lifted and Covid-19–related claims risk declines. Although the retention of dividends by its subsidiaries had a negative impact on the profit of the parent, it had no effect on Sava Re’s solvency position, which remains at a high level. The supervisory board will decide on the proposal for the appropriation of Sava Re’s profit when considering the unaudited results for 2020, taking into account the recommendations of the Insurance Supervision Agency.

Portfolio structure resilient to financial market volatility

The return on the investment portfolio for the year was 1.6%, which is 0.2 p.p. above the plan. The portfolio of predominantly highly rated government and corporate bonds continues to show resilience in the face of financial market volatility. The key goal of the Group’s investment policy is to maintain low volatility and a high level of security of assets intended for covering obligations arising from insurance contracts, as well as to ensure high liquidity and risk diversification.

Strategy focus

The Group is also making good progress in its strategy and is evolving into a customer-centric, modern, digital, community-minded and sustainability-oriented insurance group. In 2020, the Sava Insurance Group stepped up its projects for developing digital solutions to provide its customers with faster and easier access to its services. In 2020, the Group placed special attention on investment opportunities in environmental and sustainability-oriented projects.

In 2020, Standard & Poor’s and AM Best reaffirmed the Sava Insurance Group’s “A”-ratings with a stable outlook, which reflect the Group’s strong capital position and make it easier for the Group to obtain business in international reinsurance markets.


The documents “Unaudited financial statements for 2020” and “Presentation of unaudited results for 2020” are attached.



Unaudited financial statements for 2020

Presentation of unaudited results for 2020


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