Sava Re,d.d · LJSE:POSR
Sava Re,d.d — Sava Re — Debt Investor Presentation (October 2019)
37 slides from Sava Re,d.d's debt investor presentation, October 2019
Slide 1: Sava Insurance Group Tier 2 Investor Presentation
Sava Insurance Group Tier 2 Investor Presentation a October 2019
Slide 2: Disclaimer
Disclaimer IMPORTANT: YOU ARE ADVISED TO READ THE FOLLOWING CAREFULLY BEFORE READING, ACCESSING OR MAKING ANY OTHER USE OF THE MATERIALS THAT FOLLOW. This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, pub
Slide 3: Contents
Contents • Overview of Sava Insurance Group • Solvency position & Capital management policy • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 4: Sava Insurance Group
Sava Insurance Group • Slovenia-based Sava Re has carried on reinsurance business for over forty years and at present is a global reinsurer. • As a medium-sized company, we offer reinsurance services to domestic and foreign insurers and reinsurers worldwide. • In 1998 we entered the primary insuranc
Slide 5: Business Profile
Business Profile Sava Insurance Group GPW and market shares (insurance) 2018 by country Reinsurance operations in more than 100 countries Slovenia: GPW: €378.4m Total market share: 16.0% Serbia: 1 composite ins. company GPW: €22.5m 1 reinsurance company Total market share: 2.6% 1 pension ins. compan
Slide 6: Market position in Slovenia and Adria region
Market position in Slovenia and Adria region SAVA INSURANCE REINSURANCE NON-LIFE LIFE PENSION GPW 2018 CHANGE MARKET GROUP OPERATIONS OPERATIONS OPERATIONS OPERATIONS (€ million) 2018/ SHARE (as per 30 June 2019) (as per 30 June 2019) (as per 30 June 2019) 2017 2018** SLOVENIA Sava Re Zavarovalnica
Slide 7: Sava Insurance Group growth through acquisitions
Sava Insurance Group growth through acquisitions v 1998 2006 - 2009 2013 2015 2016 2018 2019 Entry into Entry into insurance Acquisition of Entry into Merger of EU- • Entry into North • Acquisition of Slovenian direct markets of: Zavarovalnica Slovenian pension Macedonian pension two Croatian based
Slide 8: Long term profitability and safety of operations
Long term profitability and safety of operations v 8 Sava Insurance Group • Solvency position • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 9: Financial strength
Financial strength v 9 Sava Insurance Group • Solvency position • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 10: Contents
Contents • Overview of Sava Insurance Group • Solvency position & Capital management policy • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 11: Capital adequacy
Capital adequacy Overcapitalisation Additional engagement of / return of capital over 230% € million Appropriate 31/12/2017 (audited) 31/12/2018 (audited) capitalisation Potential reallocation of capital Eligible own funds 451.4 471.9 200-230% Solvency capital requirement (SCR) 205.0 216.7 Optimal/t
Slide 12: Dividend policy
Dividend policy v Sava Re aims to ensure that its shareholders see a 10% growth in dividends but that the dividend distribution does not exceed 40% of the Group’s net profit in the period 2017–2019. When designing any dividend proposal, the company will take into account: 1. the estimated excess of
Slide 13: Capital adequacy of Sava Insurance Group
Capital adequacy of Sava Insurance Group v According to the Group‘s risk strategy, a solvency ratio of 140% is still considered adequate, albeit suboptimal, while the optimal level of capitalisation starts at 170%. This demonstrates that the group is well capitalised, also by its own criteria. 13 Sa
Slide 14: Eligible own funds
Eligible own funds Adjustments to IFRS equity for the Solvency II valuation of the balance sheet € million 31/12/2017 31/12/2018 IFRS equity 315.0 339.7 Difference in the valuation of assets -133.9 -135.2 Difference in the valuation of technical provisions 299.7 301.8 v Difference in the valuation o
Slide 15: Quality of eligible own funds to meet SCR
Quality of eligible own funds to meet SCR € million 31/12/2017 31/12/2018 Group Solvency Capital Requirement (SCR) 205.0 216.7 Eligible own funds to meet the Group SCR 451.4 471.9 Of which tier 1 451.4 471.9 Of which tier 2 0.0 0.0 Of which tier 3 0.0 0.0 v Group solvency ratio 220% 218% Minimum cap
Slide 16: Solvency Capital Requirement (SCR) of Sava Insurance Group
Solvency Capital Requirement (SCR) of Sava Insurance Group Group solvency capital requirement € million 31/12/2017 31/12/2018 Solvency capital requirement at Group level 205.0 216.7 Undiversified SCR by risk module* Capital requirements of other financial sectors 5.3 5.5 Capital requirements of othe
Slide 17: SCR split for market risk & Sensitivities of the solvency ratio
SCR split for market risk & Sensitivities of the solvency ratio Market risk by sub-modules € million 31/12/2017 31/12/2018 Market risk 51.7 60.4 Diversification -18.3 -20.6 Sum of risk components (excluding diversification) 70.0 81.0 Interest rate risk 1.8 5.7 Equity risk 11.1 12.6 Property risk 14.
Slide 18: Contents
Contents • Overview of Sava Insurance Group • Solvency position & Capital management policy • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 19: Key figures – Sava Insurance Group
Key figures ̶ Sava Insurance Group € million 1-12/2017 1-12/2018 1-6/2018 1-6/2019 Gross premiums written 517.2 546.3 308.6 336.8 Net expense ratio* 32.6% 33.1% 33.2% 31.4% Net combined ratio** (excluding FX differences) 95.6% 92.9% 97.3% 94.6% Return on financial portfolio (excluding FX differences
Slide 20: Breakdown of the consolidated GPW
Breakdown of the consolidated GPW Gross premiums written by segment 400.0 299.8 300.0 270.4 € million 193.2 200.0 176.4 96.2 89.3 80.9 78.5 100.0 52.8 56.3 60.5 68.1 35.3 41.8 38.8 39.4 7.1 8.4 3.9 4.2 2.1 2.2 1.4 1.9 0.0 v Reinsurance Non-life Slovenia Non-life international Life Slovenia Life inte
Slide 21: Consolidated profit before tax by segment
Consolidated profit before tax by segment v 21 Sava Insurance Group • Solvency position • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 22: Investment portfolio and assets under management (AUM)
Investment portfolio and assets under management (AUM) v *Financial investments + investment property + cash (excluding UL) 22 Sava Insurance Group • Solvency position • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 23: Group investment portfolio
€ 1,019.5m € 1,008.4m € 1,019.7m Group investment portfolio € million 31/12/2017 31/12/2018 30/6/2019 Investment portfolio 1,084.2 1,082.8 1,097.7 Government bonds 52.3% 50.9% 47.4% Corporate bonds 36.4% 34.1% 35.0% Rating Cash and cash equivalents 2.8% 4.9% 6.3% breakdown of Deposits & CDs 2.0% 2.6
Slide 24: Contents
Contents • Overview of Sava Insurance Group • Solvency position & Capital management policy • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 25: Tier 2 transaction summary (1)
Tier 2 transaction summary (1) Solvency II compliant Tier 2 subordinated debt 20-NC-10 callable structure Redeemable in whole at par upon Gross-Up, Tax, Regulatory, Accounting or Rating Event Expected issue rating: BBB+ (S&P) vRationale Capital optimization: optimize capital mix and increase total c
Slide 26: Tier 2 transaction summary (2)
Tier 2 transaction summary (2) Key Investment Highlights Strong capitalization levels with Solvency II ratio at 218% (as of 31.12.2018) Top 3 player in the Adria region Diversified business mix vSolid growth prospects in the region Resilient financial performance Conservative investment portfolio 26
Slide 27: Proposed Tier 2 transaction terms (1)
Proposed Tier 2 transaction terms (high level overview of key terms) (1) Issuer Sava Re d.d. Notes Dated callable subordinated Tier 2 Bonds (the "Bonds") Issuer Rating A by S&P and A by A.M. Best (both stable outlook) Expected Issue BBB+ by S&P Rating Final Maturity [●] 2039 (the "Scheduled Maturity
Slide 28: Proposed Tier 2 transaction terms (2)
Proposed Tier 2 transaction terms (high level overview of key terms) (2) Compulsory A "Compulsory Deferral Event" will have occurred with respect to the date on which any payment of interest and/or Arrears of Interest on the Bonds is scheduled to be paid under Deferral Event the Terms and Conditions
Slide 29: Proposed Tier 2 transaction terms (3)
Proposed Tier 2 transaction terms (high level overview of key terms) (3) Conditions to (i) no Insolvency Event has occurred and is continuing on such date and the payment of the Redemption Amount or the purchase would not result in, or accelerate, the Redemption and occurrence of an Insolvency Event
Slide 30: Contents
Contents • Overview of Sava Insurance Group • Solvency position & Capital management policy • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 31: Shareholders and share capital
Shareholders and share capital 30/6/2019 Share capital (€ million) 71.9 Market capitalisation (€ million) 287.6 Shareholders as at 30 June 2019 Trading symbol POSR Number of shares 17,219,662 Number of own shares* 1,721,966 Number of shareholders 4,151 * In April 2016, the management board fully exh
Slide 32: Sava Insurance Group companies
Sava Insurance Group companies v 32 Sava Insurance Group • Solvency position • H1 2019 results • Tier 2 transaction terms • Appendix
Slide 33: Strong credit ratings
Strong credit ratings S&P AM Best Financial Strength Rating: Financial Strength Rating: 2005: BBB+ (Stable) → 2019: A (Stable) 2012: A- (Stable) → 2018: A (Stable) v -profitable growth and solid earnings -strong operating performance driven by solid -expanding Sava Insurance Group activities technic
Slide 34: Economic indicators Slovenia
Economic indicators Slovenia v Credit ratings of Republic of Slovenia: S&P: A+ (positive outlook), Moody‘s: Baa1 (stable outlook), Fitch: A- (stable outlook) Competitiveness rankings of Republic of Slovenia: World Bank: 35., IMD: 37., WEF: 35. General government surplus in 2017: 0.1% of GDP. Source:
Slide 35: Market indicators for the Adria region
Market indicators for the Adria region Insurance premiums Breakdown of insurance premiums 2018 v Insurance density (GPW per capita) Source: Slovenia: UMAR and Slovensko zavarovalno združenje; Croatia: Hrvatska gospodarska komora and Hrvatski ured za osiguranje; Serbia: MMF World Economic Outlook and
Slide 36: Macroeconomic overview of key markets
Macroeconomic overview of key markets INSURANCE MARKETS Slovenia Serbia Croatia North Macedonia Montenegro Credit ratings (S&P / Moody's / Fitch) AA-/Baa1/A BB/BB/Ba3 BBB-/BBB-/Ba2 BB-/BB+/nr B+/nr/B1 GDP growth 4.4% 4.0% 2.8% 2.3% 4.1% GDP per capita (EUR) 21,782 5,746 12,201 5,121 7,388 Inflation
Slide 37: Contact Details
Contact Details For more information, please contact Marko Jazbec Chairman of the Management Board +386 1 47 50 200 Marko.Jazbec@sava-re.si v Polona Pirš Zupančič Member of the Management Board +386 1 47 50 200 Polona.PirsZupancic@sava-re.si Blaž Garbajs Portfolio manager +386 1 47 50 252 Blaz.Garba