First quarter 2019 results of Sava Insurance Group in line with plan
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:
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 the first quarter of 2019.
The growth in profit was driven by a benign claims development and improved cost efficiency. The Group continues its growth strategy, also through acquisitions – realised acquisition activities have a positive effect on the Group’s performance.
Growth in operating revenues
In the first quarter of 2019, the Sava Insurance Group posted a high 7.2% growth in operating revenues. This growth was driven by higher net premiums earned by existing insurance companies (6.7%) and also by the revenues of the new Group members acquired during 2018. Gross premiums written rose by 2.8% year on year to EUR 171.6 million. The growth in gross premiums written was contributed by reinsurance business (6.5% growth), non-Slovenian non-life insurance (12.3% growth) and Slovenian life business (2.6% growth), while Slovenian non-life gross premiums and non-Slovenian life business remained at about the same level year on year. Thus, in the first quarter of the year, the Group wrote 30.8% of the premiums planned for 2019.
Net profit in line with plan
In the first quarter of the year, the Sava Insurance Group delivered a net profit of EUR 10.9 million, accounting for 25.4% of the planned profit for the full year 2019. The annualised return on equity was 12.2%.
Better cost efficiency and favourable combined ratio
These results mainly reflect a relatively benign claims environment for the reinsurance business and the Slovenian non-life insurance business, while the new Group members acquired in 2018 also contributed to net profit. In addition, the expense ratio improved year on year due to lower acquisition costs in the reinsurance segment and increased cost efficiency across all segments, as operating expenses rose slower than net premiums earned.
A favourable combined ratio of 93.0% was achieved in the first quarter, reflecting improvements in both the expense and loss ratios.
Acquisitions complementary to the adopted strategy
In addition to posting strong organic growth, the Sava Insurance Group continues its strategy regarding acquisitions-based growth. On 27 February 2019, Zavarovalnica Sava satisfied all suspensive conditions, becoming the sole owner of the companies ERGO Osiguranje d.d. and ERGO Životno Osiguranje d.d. The acquisition of the asset manager KBM Infond, Družba d.o.o. is still underway and is expected to be completed in the second quarter of the year.
The documents “Unaudited financial report of the Sava Insurance Group and financial statements of Sava Re d.d. for the three months to 31 March 2019” and “Investor presentation” are attached.