Sava Re,d.d · LJSE:POSR
Sava Re,d.d — Sava Insurance Group — H1 2020 Earnings Presentation
34 slides from Sava Re,d.d's earnings presentation, Aug 20, 2020
Slide 1: Sava Insurance Group 1H 2020 results
Sava Insurance Group a 1H 2020 results 20 August 2020
Slide 2: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 3: Highlights 1H 2020
Highlights 1H 2020 Growth in operating revenue of 16.6% Net profit of €32.2 million, including €6.8 million positive effect of difference between fair value of net assets acquired and the cost of Vita ROE of 14.3% Emergency situation due to Covid-19 pandemic with large impacts on lives and global v
Slide 4: Inclusion of Vita into the Group on 31 May 2020
Inclusion of Vita into the Group on 31 May 2020 v 4 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 5: Key figures – Sava Insurance Group
Key figures ̶ Sava Insurance Group Original 2020 Change € million 1–6/2019 1–6/2020** plan 2020/2019 Group Operating revenue 269.6 314.2 > 610 16.6% Gross premiums written, (re)insurance part 334.9 372.3 > 620 11.2% Net expense ratio, including operating revenue* 31.0% 30.0% 33 ̶ 34% -1.0 p.p. Retur
Slide 6: Breakdown of consolidated revenue
Breakdown of consolidated revenue Growth/decline Without Without compared to the Vita FOS and Vita previous year 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
Slide 7: Breakdown of consolidated GPW
Breakdown of consolidated GPW Growth/ decline Without Without compared to the Vita FOS and Vita previous year v Consolidated gross premiums written by class of insurance 7 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 8: Consolidated profit before tax by segment
Consolidated profit before tax by segment v 8 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 9: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 10: Results by operating segment – reinsurance
Results by operating segment – reinsurance • Investment result excluding FX differences • Growth in non-proportional and proportional • Deterioration in underwriting result due to similar as in the same period last year reinsurance premiums mainly on Asian markets increased claims burden from more l
Slide 11: Results by operating segment – non-life Slovenia
Results by operating segment – non-life Slovenia • Larger volume of FOS business (up €16.4 • Stronger technical result mainly due to favorable • In 2019 one-off positive effect from the million) claims burden and also higher premiums revaluation of the investment in Sava Infond in v • Larger volume
Slide 12: Results by operating segment – non-life international
Results by operating segment – non-life international • Decrease in assistance business due to drastic drop • Stronger technical result mainly due to lower • Investment result flat year on year in sales of travel insurance as a result of measures claims frequency on motor insurance; €3.5 v taken to
Slide 13: Results by operating segment – life Slovenia
Results by operating segment – life Slovenia • Net expense ratio down due to the inclusion of • Higher return influenced by the inclusion of Vita • Inclusion of Vita in the group as at 31 May Vita which operates at a lower expense ratio (higher interest income and higher gains on 2020 (€7.3 million
Slide 14: Results by operating segment – life international
Results by operating segment – life international • High growth, mostly in Serbia resulting from • Significantly improved expense ratio as a • Increase mainly due to other investment v improved efficiency of own sales network • 5% growth in annual premiums despite the Covid- result of high premium g
Slide 15: Results by operating segment – pension business
Results by operating segment – pension business • Fewer policyholders opting for pension • Growth in other technical and other income of • Reduction of operating expenses in the Slovenian annuities upon retirement the North Macedonian pension company pension company, while they were higher in the v
Slide 16: Results by operating segment – other
Results by operating segment – other v 16 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 17: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 18: Investment portfolio and AuM
Investment portfolio and AuM v 18 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 19: Structure of the investment portfolio
Structure of the investment portfolio 31/12/2019 30/6/2020 Investment portfolio (€ million) 1,157.8 1,495.1 Corporate bonds 34.1% 42.2% Government bonds 46.6% 40.9% Cash and cash equivalents 6.5% 6.2% Shares 1.5% 2.5% Mutual funds 3.0% 2.4% Infrastructure funds 1.7% 1.6% vDeposits & CDs 4.0% 1.4% In
Slide 20: Net inv. income of and return on the investment portfolio
Net inv. income of and return on the investment portfolio € million 1–6/2019 1–6/2020 Difference Net investment income relating to the investment portfolio 12.9 6.3 -6.5 Net inv. income of the investment portfolio, excl. FX 12.2 8.1 -4.1 Return on investment portfolio, excl. FX and SD cost 2.3% 1.5%
Slide 21: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 22: Shareholders and share trading
Shareholders and share trading Share capital (€ million) 30/6/2020 71.9 Market capitalisation (€ million) 273.8 Book value per share Trading symbol Number of shares POSR 17,219,662 €26.74 Number of own shares Number of shareholders 1,721,966 4,218 30 Jun 20 / 31 Dec 19: +7.7% Sava Re share price per
Slide 23: 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 24: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 25: Capital adequacy
Capital adequacy € 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 Groupʾs Solvency and finan
Slide 26: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 27: 2020 targets (consolidated)
2020 targets (consolidated) Actual Actual Original Revised 2018 2019 2020 plan 2020 plan Group Operating revenue €536.8 million €584.2 million > €610 million > €640 million Profit or loss, net of tax €43.0 million €50.2 million > €45 million > €50 million Return on equity (ROE) 13.1% 13.8% > 11% > 1
Slide 28: Thank you for your attention.
Thank you for your attention.
Slide 29: 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 30: Appendix
Appendix
Slide 31: Group exposure by region
Group exposure by region Higher exposure to Slovenia in 1–6/2020 due to the acquisition of Vita (portfolio), however still in line with investment policy. Lower exposure to EU member states as a result of Brexit. On the other hand, larger exposure to non-EU members. Higher exposure to Other countrie
Slide 32: Group exposure to Slovenia
Group exposure to Slovenia € million 31/12/2019 30/6/2020 Change Type of investment Amount Structure Amount Structure in p.p. Deposits 28.9 2.3% 4.0 0.3% -2.0 Government bonds 95.9 7.6% 159.0 10.2% 2.6 Corporate bonds 32.1 2.5% 22.1 1.4% -1.1 Shares 16.9 1.3% 17.6 1.1% -0.2 Mutal funds 2.8 0.2% 1.9
Slide 33: Group exposure by industry
Group exposure by industry Lower exposure to government securities resulting from maturity of government securities. Lower exposure to banking sector resulting from change in portfolio structure due to the acquisition of Vita (short-term invested cash, cash equivalents and deposits decreased). v Gov
Slide 34: Maintaining a good rating profile in 1H 2020 despite Covid-19
Maintaining a good rating profile in 1H 2020 despite developing situation with Covid-19 (ratings lowering) Investment grade assets represent 82.9% of fixed income investments which is 4.6 p.p. higher than at the end of 2019. The share of AAA and AA-rated categories declined reflecting maturities of