Sava Re,d.d · LJSE:POSR
Sava Re,d.d — Sava Re — H1 2019 Earnings Presentation
32 slides from Sava Re,d.d's earnings presentation, Sep 3, 2019
Slide 1: Sava Insurance Group 1H 2019 results
Sava Insurance Group a 1H 2019 results 3 September 2019
Slide 2: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 3: Highlights 1H 2019
Highlights 1H 2019 Growth in GPW of 9.1 %; growth in total income of 7.6 % Net profit of €22.6 m, which is 52.5 % of net profit planned for 2019, and ROE of 12.5 % Net combined ratio (excl. FX) of 94.6 % just above upper end of planned range (93.6–94.1%) In June 2019, Sava Re acquires 85% of asset m
Slide 4: Key figures – Sava Insurance Group
Key figures ̶ Sava Insurance Group Change € million 1-6/2018 1-6/2019 Plan 2019 2019/2018 Gross premiums written 308.6 336.8 > 555 9.1% Net expense ratio* 33.2% 31.4% 32.4 ̶ 33.0% -1.8 p.p. Net combined ratio** (excluding FX differences) 97.3% 94.6% 93.6 ̶ 94.1% -2.7 p.p. Return on financial portfol
Slide 5: Consolidated profit before tax by segment
Consolidated profit before tax by segment v 5 Group performance • Segment reporting • Investment structure and return • POSR share • Solvency position • Plan 2019
Slide 6: Breakdown of the consolidated GPW
Breakdown of the consolidated GPW Growth/ decline compared to the previous period v Consolidated gross premiums written by class of insurance 6 Group performance • Segment reporting • Investment structure and return • POSR share • Solvency position • Plan 2019
Slide 7: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 8: Results by operating segment – reinsurance
Results by operating segment – reinsurance • Growth of non-proportional reinsurance • Poorer technical result due to weaker • Income from partial repayment of business premiums mainly on Asian markets development of premiums and claims of older bonds impaired in the past (+ €0.4 million) v (organic
Slide 9: Results by operating segment – non-life Slovenia
Results by operating segment – non-life Slovenia • Larger volume of motor business (increased • Fewer larger claims in 2019 • One-off income from reevaluation of investment v number of policies and higher average premium with individuals) and property • Lower operating costs in Sava Infond in the am
Slide 10: Results by operating segment – non-life international
Results by operating segment – non-life international • Inclusion of the non-life insurer ERGO in Croatia • Higher net claims incurred by Croatian and Serbian into the Group (from 1 April 2019); 11.0% non-life insurance companies due to increased loss v growth if ERGO is excluded burden and some lar
Slide 11: Results by operating segment – life Slovenia
Results by operating segment – life Slovenia • Premiums from new business more than • Net expense ratio stays approx. the same • Lower interest income due to lower interest rates sufficient to fully compensate for lost • Favorable development of technical result in capital markets and lower capital
Slide 12: Results by operating segment – life international
Results by operating segment – life international • High growth in the Serbian life insurer • Significantly improved expense ratio as a • Lower expenses from negative exchange rate v (+34%, increased productivity of sales result of high premium growth with decline differences in Croatia network) and
Slide 13: Results by operating segment – pension business
Results by operating segment – pension business • Inclusion of company based in North v• More policyholders opting for pension annuities upon retirement • Inclusion of company based in North Macedonia into the consolidated accounts Macedonia into the consolidated accounts from 31 March 2018 from 31
Slide 14: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 15: Structure of the investment portfolio
Structure of the investment portfolio 31/12/2018 30/6/2019 Investment portfolio (€ million) 1,082.8 1,097.7 Government bonds 50.9% 47.4% Corporate bonds 34.1% 35.0% Cash and cash equivalents 4.9% 6.3% Deposits & CDs 2.6% 3.5% Mutal Funds 3.0% 2.9% vInvestment property 1.9% 1.9% Shares 1.4% 1.5% Infr
Slide 16: Net inv. income of and return on the investment portfolio
Net inv. income of and return on the investment portfolio Absolute change € million 1H 2018 1H 2019 2019 - 2018 Net investment income relating to the investment portfolio 10.1 12.9 2.8 Net investment income of the investment portfolio, excluding FX differences 10.3 12.2 1.9 Return on the investment
Slide 17: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 18: Sava Re performance vs. SBI TOP benchmark
Shareholders and share trading Share capital (€ million) 30/6/2019 71.9 Market capitalisation (€ million) 287.6 Book value per share Trading symbol Number of shares POSR 17,219,662 €23.27 Number of own shares Number of shareholders 1,721,966 4,151 1H 2019 / 1H 2018: up 14.4% Sava Re share price perf
Slide 19: Dividend policy
Dividend policy 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 el
Slide 20: Dividend policy
Dividend policy v The 2019 dividend yield was calculated using the average market share price in the reporting period (January 1 2019 – June 30 2019). 20 Group performance • Segment reporting • Investment structure and return • POSR share • Solvency position • Plan 2019
Slide 21: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 22: Capital adequacy
Capital adequacy € million 31 Dec 2017 (audited) Eligible own funds 451.4 Solvency capital requirement (SCR) 205.0 Solvency ratio 220 % v € million 31 Dec 2018 (audited) Eligible own funds 471.9 Solvency capital requirement (SCR) 216.7 Solvency ratio 218 % The Sava Re Group‘s Solvency and financial
Slide 23: Contents
Contents • Sava Insurance Group – Performance • Sava Insurance Group – Segment reporting • Sava Insurance Group – Investment structure and return • Sava Insurance Group – POSR share and dividend policy • Sava Insurance Group – Solvency position • Sava Insurance Group – Plan 2019
Slide 24: Plan 2019 – main targets (consolidated)
Plan 2019 – main targets (consolidated) € million 2017 2018 2019 plan Group Operating revenues 492.4 540.5 > 4.5% growth at least €43 m; > 10% growth Profit or loss, net of tax 31.1 43.0 based on 2018 estimate Return on equity 10.1% 13.1% > 12% v Return on investments* 2.0% 1.7% 1.7% Re/insurance pa
Slide 25: Consolidated gross premiums written and revenues of non-insurance companies
Consolidated gross premiums written and revenues of non-insurance companies Planned growth/decline in 2019 (on 2018 estimate) +2% 350,0 300,0 250,0 200,0 +12% v 150,0 -4% +6% 100,0 +13% +2% +15% 50,0 0,0 € million Reinsurance Non-life Slovenia Life Slovenia Non-life Life international Pension busine
Slide 26: Thank you for your attention.
Thank you for your attention.
Slide 27: Disclaimer
Disclaimer Forward-looking statements This document may contain forward-looking statements relating to Sava Re’s 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 28: Annex
Annex
Slide 29: Group exposure by region
Group exposure by region Lower exposure to Slovenia in 1H 2019 is in line with investment policy; larger exposure to EU member states. v 29 Appendix
Slide 30: Group exposure to Slovenia
Group exposure to Slovenia (€ million) 31/12/2018 30/6/2019 Change Type of investment Amount Structure Amount Structure Deposits 0.9 0.1% 12.8 1.1% 1.0% Government bonds 155.3 13.3% 94.2 8.0% -5.3% Corporate bonds 23.4 2.0% 28.3 2.4% 0.4% Shares 15.1 1.3% 15.8 1.4% 0.1% Mutal funds 0.7 0.1% 2.5 0.2%
Slide 31: Group exposure by industry
Group exposure by industry Lower exposure to government securities resulting from maturity of government securities. Larger exposure to banking sector is short-term based on increased allocation to cash and cash equivalents. v 31 Appendix
Slide 32: Group rating profile
Group rating profile Maintaining a good rating profile in 1H 2019 Investment grade assets represent 79.8% of fixed income investments and are lower compared to the end of 2018. The A-rated category declined reflecting maturities of government bonds. Increase in the percentage of BBB group is due to