Sava Insurance Group generates net profit of EUR 22.6 million in 1H2019, results on target
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 half of 2019.
Profits grew driven by strong premium growth, better cost efficiency, higher net investment income, and a low incidence of large losses in Slovenia. The business acquisitions completed will enable the Group to strengthen its market position as an insurer and bolster its asset management operations.
Premium growth of 9.1%
Gross premiums written totalled EUR 336.8 million, up 9.1% year on year. The growth in gross premiums written was contributed by Slovenian non-life insurance business (9.5% growth), non-Slovenian non-life insurance (18.2% growth), reinsurance business (6.6% growth), Slovenian life insurance business (1.5% growth) and non-Slovenian life insurance (8.2% growth). Thus, in the first half of the year, the Group wrote 60.7% of the premiums planned for 2019.
Better cost efficiency and relatively benign claims environment
Performance was driven by the Group’s better cost efficiency, with a 1.8% year-on-year improvement in the cost ratio of insurance business in the first half of the year, primarily reflecting faster premium growth compared to expenses. Additionally, the first half of the year was marked by a low incidence of large losses in Slovenia – unlike one year earlier, when Slovenia was hit by severe hailstorm losses – which strongly contributed to the improved net loss ratio in 2019.
Net profit on target
In the first half of the year, the Sava Insurance Group delivered a net profit of EUR 22.6 million, up 59.3%, accounting for 52.5% of the planned profit for the full year 2019. The annualised return on equity was 12.5%.
Improved market position through acquisitions
In addition to executing on its organic growth strategy, the Sava Insurance Group continues to make good progress on its strategy of acquisitions-based growth. After Zavarovalnica Sava acquired the insurers ERGO Osiguranje d.d. and ERGO Životno Osiguranje d.d., Croatia, in February this year, Sava Re purchased 85% of Sava Infond, so that the members of the Sava Insurance Group now hold 100% of the voting rights in the company. Furthermore, Sava Re has signed an agreement to acquire the health service provider Diagnostični Center Bled d.o.o., with a view to obtaining an equity interest through ZTSR d.o.o.
The documents “Unaudited financial report of the Sava Insurance Group and financial statements of Sava Re d.d. for the six months to 30 June 2019” and “Investor presentation” are attached.