BEING THERE
FOR EACH OTHER.
WITH A HEART
FOR THE WORLD.

ANNUAL REPORT

of the Sava Insurance Group and Sava Re d.d.

2023

Marko Jazbec, predsednik uprave

Dear Shareholders, Business Partners and Employees,

The financial year 2023 was another trying year that brought completely new challenges for the Sava Insurance Group. The war in Ukraine led to a surge in inflation. In addition, Slovenia and other countries in which the Group operates were hit by severe storms and floods during the summer, resulting in significant damage to property. We focused our efforts on fast-track claims handling to fulfil our “Never Alone” promise, offering policyholders the necessary support and assistance. First and foremost, we stood by our customers on the ground by simplifying the reporting and claims handling processes. Then, we provided an extra day of volunteering leave and financial support to the worst-affected areas. The loss events resulted in claims totalling EUR 88 million, with a lower impact on the Group’s result due to adequate reinsurance protection.

The Group achieved strong organic growth across all segments and markets, bringing our business volume to EUR 910 million, which is almost a 15% increase year on year.

Despite the significant impact of these claims, particularly on Zavarovalnica Sava, the Group exceeded its profit guidance. The Group’s other operating segments performed better than planned. Sava Re’s business in international reinsurance markets contributed significantly to the above-target performance. The market growth in reinsurance prices over the last few years, the restructuring of the reinsurance portfolio to improve profitability and the absence of major claims were the driving forces behind the strong outperformance of the profit target. In addition, the investment result played a significant role in exceeding the plan. Due to rising interest rates, the Group’s investment return was 2.1%, 0.6 percentage points higher than planned. The Group’s companies that manage financial assets also closed 2023 well ahead of target. This performance was driven by both capital market movements and increased inflows into the funds. All this helped to mitigate the negative impact of the storm and flood losses.

The Group achieved strong organic growth across all segments and markets, bringing our business volume to EUR 910 million, which is almost a 15% increase year on year. I am confident that we will exceed the EUR 1 billion threshold by the end of the strategy period. We are pleased that our Group companies are vastly improving their market position and expanding their product range and sales channels. Our strong organic growth is supporting us to operate more cost-effectively. The Group’s revenue growth also demonstrates its ability to respond to external circumstances by adjusting pricing, thus ensuring stable performance.

In terms of organisational structure, sustainability was being progressively integrated into the Group companies’ operations in 2023 and is now increasingly taken into account in day-to-day activities.

The customer solutions and processes put in place during the last strategy period helped speed up claims handling, which has already resulted in faster settlement of storm and flood claims. Continuing our customer-centric approach and optimising our business processes are both focus areas that will maintain momentum in the 2023–2027 strategy period. These focus areas will drive further improvements in our business – particularly in streamlining our business processes and enhancing our relationship with customers at all points of the customer journey.

In the non-life business, we further developed our product range in line with the needs and wishes of our customers. We offered products with strong sustainability credentials, products targeted at specific policyholder segments, and products promoting online sales and bancassurance. In the life and pension business, our focus over the past year was to expand the life risk insurance ecosystem by adding more customer services, developing additional health coverage options, and upgrading unit-linked life insurance and bancassurance products.

In 2023, an independent institution verified our carbon footprint calculation for the previous year. This calculation provides the basis for setting more precise milestones on our way towards our strategic target of reducing our carbon footprint by 55% in scope 1 and 2 emissions by 2030. An important measure taken was relocating the head offices of six Slovenian companies and one Macedonian insurance company to new, more energy-efficient premises, which has already helped to reduce our carbon footprint for 2023. Last year, we began systematically collecting and processing data across our value chains (insurance portfolio, investment portfolio and suppliers) to identify the necessary actions to achieve our sustainability goals. In terms of organisational structure, sustainability was being progressively integrated into the Group companies’ operations in 2023 and is now increasingly taken into account in day-to-day activities. Our employees are actively developing a culture of sustainability to set an example for the wider community. This involves organising a number of volunteer activities as part of the Heart for the World initiative. In 2023, our employees dedicated more than 5,000 hours to corporate volunteerism.

Another important milestone in 2023 was the successful transition to the new IFRS 17 and IFRS 9 accounting standards, which required a substantial effort from our employees and involved restructuring some IT systems, processes and organisation over the past few years. I believe the transition has been successful, and I am confident that the data collected at the end of the project will help us better monitor our business and respond more quickly to emerging risks.

To sum up, 2023 posed a particular challenge for the Group due to the unprecedented scale of the summer floods that affected a considerable part of Slovenia. I am proud that the Group demonstrated these three qualities in such circumstances:

Heart – our loss adjusters, agents and other colleagues gave their “all” to ensure that the policyholders affected were able to get their claims paid as quickly as possible.

Flexibility – although the structure of an insurance company is complex, some processes at Zavarovalnica Sava were streamlined in response to the massive flood damage.

Business line diversification – the Group ended the year with a solid performance despite the significant impact of flood claims on the business result. In particular, reinsurance in international reinsurance markets performed significantly better than planned in 2023. In addition to external influences, this is due to the hard work of our reinsurance team to improve the portfolio towards profitability over the last few years.

Many thanks to all our colleagues for their contributions and efforts in 2023. We have shown that by working together, we can overcome major challenges and accomplish ambitious goals.

 
Marko Jazbec

Marko Jazbec

Chairman of the Management Board

 

 

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