Slide 1: Sava Insurance Group 1Q 2020 results
Sava Insurance Group a 1Q 2020 results 1 June 2020 Presenting: Q&A part: Mrs. Polona Pirš Mrs. Polona Pirš Zupančič, Zupančič, Mrs. Mateja Member of the Member of the Živec, Management Management Head of Asset Board Board Management
Slide 2: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 3: Highlights of 1Q 2020
Highlights of 1Q 2020 Growth in GPW of 15.1% Growth in operating revenue of 16.2% Net profit of €10.3 million (cca. 23% of the lower limit planned for 2020) v ROE of 10.6% Net combined ratio (excl. FX) of 93.3% in line with target Completed acquisition of Diagnostic Centre Bled through ZTSR joint ve
Slide 4: Key figures – Sava Insurance Group
Key figures ̶ Sava Insurance Group Change € million 1-3/2019 1-3/2020 Plan 2020 2020/2019 Group Operating revenues 128.2 149.0 > 610 16.2% Gross premiums written 171.6 197.5 > 620 15.1% Net expense ratio* 31.9% 30.4% 33 ̶ 34% -1.5 p.p. Return on financial portfolio* 1.8% 1.4% 1.3% -0.4 p.p. Net prof
Slide 5: Breakdown of consolidated revenue
Breakdown of consolidated revenue growth/decline compared to the previous period v • Earned premiums • Premiums from • Revenue from resolving • Other technical income annuities TBS Team 24 assistance • Other income • Income from managing cases • In life business, also income from asset pension funds
Slide 6: Breakdown of consolidated GPW
Breakdown of consolidated GPW Growth/ decline compared to the previous period v Consolidated gross premiums written by class of insurance 6 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency • Plan 2020 and impact of COVID-19
Slide 7: Consolidated profit before tax by segment
Consolidated profit before tax by segment v 7 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency • Plan 2020 and impact of COVID-19
Slide 8: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 9: Results by operating segment – reinsurance
Results by operating segment – reinsurance • Growth in non-proportional and • Deterioration in underwriting result due to • Investment result excluding FX differences proportional reinsurance premiums mainly increased claims burden from business growth, similar as in the same period last year v on A
Slide 10: Results by operating segment – non-life Slovenia
Results by operating segment – non-life Slovenia • Larger volume (up €8.4 million) mainly in • Stronger technical result mainly due to higher • Higher expenses from change in fair value and property insurance due to different premiums loss on disposal of investments in the FVTPL v underwriting dynam
Slide 11: Results by operating segment – non-life international
Results by operating segment – non-life international • Increase in motor insurance premiums in Croatia, • Stronger technical result mainly due to higher • Investment result flat year on year which is solely due to the acquisition of ERGO premiums v Osiguranje (included in the Group on 31 March 2019
Slide 12: Results by operating segment – life Slovenia
Results by operating segment – life Slovenia • Premiums from new business insufficient • Net expense ratio up 1.9 p.p. due to growth in • Higher expenses from change in fair value and to fully offset lost premiums relating to operating costs with premiums being lower as loss on disposal of investmen
Slide 13: Results by operating segment – life international
Results by operating segment – life international • High growth in Croatia (partially from inclusion of • Significantly improved expense ratio as a • Increase mainly due to other investment ERGO Životno Osiguranje in the Group as of 31 result of high premium growth, which income of Croatian branch v
Slide 14: Results by operating segment – pension business
Results by operating segment – pension business • More policyholders opting for pension • Growth in other (technical) income despite • Increase in operating costs entirely due to annuities upon retirement lower assets in pension savings funds amortisation of a list of customers, which was v• Loss du
Slide 15: Results by operating segment – other
Results by operating segment – other v 15 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency • Plan 2020 and impact of COVID-19
Slide 16: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 17: Investment portfolio and AuM
Investment portfolio and AuM v 17 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency • Plan 2020 and impact of COVID-19
Slide 18: Structure of the investment portfolio
Structure of the investment portfolio 31/12/2019 31/3/2020 Investment portfolio (€ million) 1,157.8 1,137.9 Government bonds 46.6% 42.3% Corporate bonds 34.1% 34.8% Cash and cash equivalents 6.5% 8.9% Deposits & CDs 4.0% 4.1% Mutual funds 3.0% 2.9% Infrastructure funds 1.7% 1.9% vShares 1.4% 1.5% In
Slide 19: Net inv. income of and return on the investment portfolio
Net inv. income of and return on the investment portfolio Difference € million 1-3/2019 1-3/2020 20 - 19 Net investment income relating to the investment portfolio 6.4 2.2 -4.3 Net inv. income of the investment portfolio, excl. FX 5.0 3.2 -1.8 Return on the investment portfolio, excl. FX and SD cost
Slide 20: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 21: Shareholders and share trading
Shareholders and share trading Share capital (€ million) 31 March 2020 71.9 Market capitalisation (€ million) 248.0 Book value per share Trading symbol Number of shares POSR 17,219,662 €24.36 Number of own shares Number of shareholders 1,721,966 4,104 31 Mar 20 / 31 Dec 2019: -1,9% Sava Re share pri
Slide 22: Dividend policy
Dividend policy Sava Re has set itself the goal of increasing its dividend by an average of 10% per year over the period 2020−2022, thus distributing from 35% to 45% of the net profit of the Sava Insurance Group each year. On 31 March 2020, Sava Re received a letter from the Slovenian Insurance Supe
Slide 23: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 24: Capital adequacy
Capital adequacy Strategy 2017 - 2019 € million 31 Dec 2018 (audited) Eligible own funds 471.9 Solvency capital requirement (SCR) 216.7 Solvency ratio 218% v € million 31 Dec 2019 (audited) Eligible own funds 522.0 Solvency capital requirement (SCR) 237.7 Solvency ratio 220% The Sava Insurance Group
Slide 25: Solvency position and capital management
Solvency position and capital management RISK PROFILE 31 DEC 2019 • 9.7 p.p. growth in solvency capital requirement (SCR) in 2019 • Main risks at 31 Dec 2019 are still non-life insurance and market risk: • Non-life risk increased during 2019 due to premium growth • Market risk increased due to portf
Slide 26: Solvency position and capital management
Solvency position and capital management • Optimal Group solvency range for Originally planned solvency projection 2020–2022 (as per risk strategy) is 180–220% • Originally planned solvency ratio for 2020 at 203%, including expected risk profile changes: • Moderate increase in market risk • Increase
Slide 27: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • Plan 2020 and assessed impact of COVID-19
Slide 28: 2020 targets (consolidated)
2020 targets (consolidated) Realizirano Actual Realizirano Actual 2020 2018 2018 2019 2019 plan Skupina Group Poslovni prihodki Operating revenues €536.8 536,8 million mio € €584.2 584,2million mio € > €610 million Čisti poslovni Profit or loss, izid net of tax €43.043,0 million mio € 50.2 50,2milli
Slide 29: Assessed impact of COVID-19 on 2020 performance reflects high Group resilience
Assessed impact of COVID-19 on 2020 performance reflects high Group resilience Basic assumptions of the assessment: • 6- to 8-percent drop in GDP 2020 (UMAR prediction) • The period until the end of May: direct impact on insurance underwriting and contacts with customers but with a lighter claims bu
Slide 30: Thank you for your attention.
Thank you for your attention.
Slide 31: Disclaimer
Disclaimer Forward-looking statements This document may contain forward-looking statements relating to Sava Reʾs expectations, plans or goals, which are based on assumptions made by Sava Re management. By their nature, forward-looking statements involve risk and uncertainty. As a result, actual deve
Slide 32: Appendix
Appendix
Slide 33: Group exposure by region
Group exposure by region Higher exposure to Slovenia in 1Q 2020 due to higher cash and cash equivalents, however still in line with investment policy. Lower exposure to EU member states as the result of Brexit. On the other hand, larger exposure to non-EU members. v EU members 33 Appendix
Slide 34: Group exposure to Slovenia
Group exposure to Slovenia € million 31/12/2019 31/3/2020 Change Type of investment Amount Structure Amount Structure in p.p. Deposits 28.9 2.3% 28.0 2.3% 0.0 Government bonds 95.9 7.6% 91.2 7.5% -0.1 Corporate bonds 32.1 2.5% 32.4 2.7% 0.1 Shares 16.9 1.3% 14.4 1.2% -0.1 Mutal funds 2.8 0.2% 1.9 0.
Slide 35: Group exposure by industry
Group exposure by industry Lower exposure to government securities resulting from maturity of government securities. Larger exposure to banking sector resulting from issuing subordinated debt in 2019. 60% of received funds have been invested in short-term investments (cash, cash equivalents and depo
Slide 36: Maintaining a good rating profile in 1Q 2020 despite Covid-19 impacts
Maintaining a good rating profile in 1Q 2020 despite Covid-19 impacts Investment grade assets represent 75.4% of fixed income investments which is 2.9 p.p. lower than at the end of 2019. The share of AAA and AA-rated categories declined reflecting maturities of government bonds and the downgrading o