Sava Re Group premiums up 4.4% and pre-tax profit of EUR 6.6 million
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 (also the "Company") makes the following announcement:
In its regular session yesterday, the supervisory board of Sava Re, d.d. was presented with the unaudited financial results of the Sava Re Group and Sava Re, d.d. for the first quarter of 2018.
In the first quarter of 2018, the Sava Re Group produced high premium growth both in Slovenia and in its international markets. Gross premiums written rose by 4.4% year on year to EUR 167.0 million. Premium growth came from non-life insurance in Slovenia (5.8% growth), non-life insurance abroad (20.5% growth), life insurance abroad (19.3% growth) and reinsurance business (1.4% growth). In line with expectations, there was a decline in gross life insurance premiums written of 8.9% as the result of a substantial amount of policy maturities. Thus in the first quarter, the Group wrote 32.1% of the target premium income for the full year 2018.
The Sava Re Group generated a pre-tax profit of EUR 6.6 million in the first quarter of 2018. While this is 42% below the year-on-year figure, the Group believes that the impacts of adverse claims development in its international markets and interim movements in expenses will be offset by the end of the year. The net incurred loss ratio (excluding exchange differences) increased as the result of two large loss events in international markets, many minor events in Slovenia as well as the movement in claims provisions. In this regard, it needs to be noted that in the same period last year, the synergy benefits from the merger of Zavarovalnica Maribor and Zavarovalnica Tilia had a positive effect on some components of claims provisions. The net expense ratio increased owing mainly to acquisition costs incurred in the reinsurance segment relating to increased premiums for proportional reinsurance business, which require higher commission payments, but also due to movements in marketing expenses and planned IT development costs related to the non-life segment in Slovenia. We expect to achieve the target profit for 2018, despite the weaker first quarter result.
The Sava Re Group continued implementing its growth strategy in the first quarter of 2018. On 31 January 2018, the Slovenian-based assistance service provider TBS Team 24 was integrated in the Sava Re Group, followed by the integration of the Macedonian-based pension fund NLB Nov penziski fond and the Serbian-based insurer Energoprojekt Garant on 31 March 2018. The new Group members will be contributing to income and profitability from the second quarter onwards. In April, Zavarovalnica Sava, d.d., as the acquirer, and Ergo Austria International AG and Ergo Versicherung Aktiengesellschaft, as the sellers, signed a contract for 100% of the shares in the companies ERGO osiguranje, d.d. and Ergo životno osiguranje, d.d.
The documents Unaudited financial report of the Sava Re Group and financial statements of Sava Re, d.d. for the three months to 31 March 2018 and the Presentation for Investors are attached.