Sava Re,d.d · LJSE:POSR

Sava Re,d.d — Investor Presentation (September 2019)

49 slides from Sava Re,d.d's investor presentation, Sep 11, 2019

  1. Slide 1: Sava Insurance Group presentation

    Sava Insurance Group presentation a 11 September 2019

  2. Slide 2: Contents

    Contents • Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-2019

  3. Slide 3: 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

  4. Slide 4: Sava Insurance Group companies at 30 June 2019

    Sava Insurance Group companies at 30 June 2019 Insurance business Insurance business Reinsurance Pension business Other business Slovenia International Sava Re 100% Zavarovalnica Sava 100% Sava neživotno osiguranje 100% Sava pokojninska družba 75% TBS Team 24 Slovenia Slovenia (C) Serbia (NL) Sloven

  5. Slide 5: Business segments - balance between value & growth

    Business segments - balance between value & growth Business segments 15,0% International insurance business New segments 10,0% Growth Slovenian insurance business v 5,0% Reinsurance 0,0% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% Profitability Sava Insurance Group has diversification benefits coming from fou

  6. Slide 6: Equity story full outline

    Equity story full outline 1 Strong #3 market position in the region as demonstrated by the market shares • Slovenia: 16% • Adria region: 9%* 7 Experienced management with clear vision and 2 Unique positioning to capture expected growth of measurable business objectives in-place Adria region insuranc

  7. Slide 7: Sava Insurance Group growth through acquisitions

    Sava Insurance Group growth through acquisitions 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 GPW - reinsurance GPW - direct insurance v 1998 2006 - 2009 2013 2015 2016 2018 2019 Entry into Entry into insurance Acquisition of Entry into Mer

  8. Slide 8: Sava Insurance Group history - Consolidated net result & ROE

    Sava Insurance Group history - Consolidated net result & ROE 50,0 13,1% 14,0% 45,0 11,9% 12,0% 43,0 11,3% 12,0% 40,0 10,1% 33,4 32,9 31,1 10,0% 35,0 30,5 30,0 7,4% 7,6% 8,0% 25,0 € million 6,0% 20,0 15,6 15,0 11,8 4,0% v 10,0 2,0% 5,0 0,0 0,0% 2012 2013 2014 2015 2016 2017 2018 Net result ROE A.M. B

  9. Slide 9: The management board

    The management board Marko Jazbec Jošt Dolničar Srečko Čebron Polona Pirš Zupančič Chairman Member Member Member • Marko Jazbec took up the leadership of • Jošt Dolničar has been with Sava • Srečko Čebron has been a Member of the • Polona Pirš Zupančič became a member of Sava Re in May 2017. He has

  10. Slide 10: POSR share price vs book value

    POSR share price vs book value Movement in POSR market and book value 25,0 12,0 POSR share price (€) & SBITOP (rebased) 21,95 10,0 20,0 20,40 18,81 16,46 17,38 POSR transactions in € million 8,0 15,0 15,80 14,23 15,98 13,22 15,30 v 6,0 12,95 10,0 4,0 8,14 5,0 2,0 0,0 0,0 31.12.2013 31.12.2014 31.12.

  11. Slide 11: Ownership structure

    Ownership structure (€ million) 31/12/2018 Ownership structure at 31/12/2018 Share capital 71,9 Market capitalisation 263,5 Trading symbol POSR No. of shares 17.219.662 SDH; 18% No. of treasury shares 1.721.966 Other; 31% No. of shareholders 4.073 Republic of Slovenia; 10% v EBRD; Modra 6% zavaroval

  12. Slide 12: Dividend policy

    Dividend policy The objective of Sava Re is to ensure that its shareholders see a 10% growth in dividends but do not get more than 40% of the Group's net profit in the period 2017–2019. Special dividend as % of profit Proposed dividend growth Regular dividend as % of profit 19/18: +19% 7,0% 28,1% 29

  13. Slide 13: Capital adequacy

    Capital adequacy (€ million) 31 December 2018 (audited) Eligible own funds 471,9 vSolvency capital requirement (SCR) 216,7 Solvency ratio 218% The Sava Insurance Group‘s Solvency and financial condition report 2018 (Group SFCR) is posted on the Sava Re website and that of the Ljubljana stock exchang

  14. Slide 14: Contents

    Contents • Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-2019

  15. Slide 15: Slovenian insurance business - non-life

    Slovenian insurance business - non-life (non consolidated) Split of GPW 2018 by class of insurance Split of GPW 2018 by sales channel 0,6% 0,1% Land vehicles casco Non-exclusive agencies 13,4% 0,7% 32,3% Own sales force and tied agents Motor liability 11,4% 8,0% 32,5% Exclusive agencies Fire and nat

  16. Slide 16: Slovenian insurance business - life

    Slovenian insurance business - life (non consolidated) Split of GPW 2018 by class of insurance Split of GPW 2018 by sales channel 0,1% Non-exclusive agencies Unit-linked insurance 1,7% 44,6% Exclusive agencies 42,6% 22,7% € 79m Endowment € 79m Own sales force and tied agents 57,4% Banks 30,8% Broker

  17. Slide 17: Sava Reinsurance Company (non consolidated)

    Sava Reinsurance Company (non consolidated) Gross premium written and ROE Combined ratio (excluding FX differences) 200,0 14,00% 120,00% 13,7% 95,2% 96,4% 13,50% 100,00% 92,4% 90,3% 87,8% 93,6% 90,8% 150,0 85,6% 78,8% 13,00% 80,00% 12,3% 12,50% 100,0 60,00% 11,7% 12,00% 147,4 151,6 40,00% 153,2 11,5

  18. Slide 18: Adria region insurance business - non-life

    Adria region insurance business - non-life (non consolidated) Split of GPW 2018 by class of insurance Split of GPW 2018 by sales channel Own sales force and tied agents 13,4% Motor liability 1,0% 5,2% Exclusive agencies 4,9% Land vehicles casco 2,8% Brokers 5,6% Other damage to property 7,1% € 68m €

  19. Slide 19: Adria region insurance business - life

    Adria region insurance business – life (non consolidated) Split of GPW 2018 by class of insurance Split of GPW 2018 by sales channel 2,7% Own sales force and tied agents 0,2% 7,7% Endowment Banks € 8m 13,7% € 8m 75,9% Non-exclusive agencies Unit-linked insurance 99,8% Brokers v Gross premiums writte

  20. Slide 20: Pension business (non consolidated)

    Pension business (non consolidated) Assets of pension funds Income from fund management 700,0 638,2 6,0 € million 572,7 € million 600,0 492,5 5,0 135,6 500,0 129,6 4,0 400,0 121,4 3,0 300,0 4,6 5,1 502,6 2,0 4,4 200,0 443,0 371,1 100,0 1,0 0,0 0,0 2016 2017 2018 2016 2017 2018 v North Macedonian pen

  21. Slide 21: Assistance business (non consolidated)

    Assistance business (non consolidated) Number of solved cases by type of assistance 80.000 75.532 69.723 67.161 70.000 62.030 60.000 50.000 40.000 30.000 20.000 10.000 1.214 1.525 3.917 4.284 0 Roadside assistance Medical assistance Home assistance Total v 2017 2018 Income from solved assistance cas

  22. Slide 22: Contents

    Contents • Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-2019

  23. Slide 23: Highlights of 2018

    Highlights of 2018 Premium growth of 6%, growth in operating revenues of 10% Record profit of €43 million and 13,1% return on equity (lower end of target range exceeded by 2,1 p.p.) Benign year in terms of claims – combined ratio of 92,9% at a record low v Improved credit ratings by Standard & Poor'

  24. Slide 24: Record profit

    Record profit Gross result Net result Plan achieved €55,3 m €43,0 m 18/17: 38,6% growth 18/17: 38,3% growth Composition of the net result 30,5 + 9,3% 33,4 - 1,3% 32,9 - 5,5% 31,1 + 38,3% 43,0 €37 – 39 m 60,0 0,2 v 50,0 12,4 1,4 0,2 0,6 0,7 40,0 10,7 8,6 0,4 8,8 10,9 10,5 30,0 14,5 13,7 13,5 12,1 20,

  25. Slide 25: Growth in consolidated gross premiums written

    Growth in consolidated gross premiums written Consolidated gross premiums written Plan achieved €546,3 m 18/17: 5,6% growth 468,2 + 3,9% 486,3 + 0,8% 490,2 + 5,5% 517,2 + 5,6% 546,3 > 520 600,0 2,1 +4,7% 2,2 1,4 500,0 1,1 78,5 7,1 +17,8% 76,5 8,0 5,9 80,9 8,3 v 400,0 82,8 5,2 80,2 79,0 6,5 -2,9% 68,

  26. Slide 26: Strong growth in GPW in all insurance markets

    Strong growth in GPW in all insurance markets Insurance and pension companies Reinsurance company Slovenia Insurance company Premiums: €378,4 m 18/17: + 7,7% Serbia Pension company Premiums: €22,5 m Pension fund inflows: €11,5 m 18/17: + 23,4% 18/17: + 4,6% v Global markets Kosovo (Sava Re reinsuran

  27. Slide 27: Higher operating revenues reflecting expanded non-insurance activities

    Higher operating revenues reflecting expanded non-insurance activities Operating revenues €540,5 m 18/17: 9,8% growth 451,9 + 4,3% 471,5 + 2,4% 482,8 + 2,0% 492,4 + 9,8% 540,5 600,0 v 500,0 3,6 6,0 2,5 6,5 400,0 300,0 527,9 471,5 480,3 488,8 451,9 200,0 100,0 0,0 € million 2014 2015 2016 2017 2018 2

  28. Slide 28: Record low combined ratio

    Record low combined ratio Net combined ratio* Plan achieved 92,9% 18/17: - 2,7 p.p. 95,1% 0,0 p.p. 95,1% - 0,4 p.p. 94,7% + 0,9 p.p. 95,6% - 2,7 p.p. 92,9% 94,0–94,5% 96,0% v 95,0% 94,0% 93,0% 92,0% 91,0% 90,0% 2014 2015 2016 2017 2018 2018 plan *Excluding the effect of exchange differences. Net com

  29. Slide 29: Best ROE in 10 years

    Best ROE in 10 years Equity ROE Plan achieved €340,2 m 13,1% 18/17: 7,6% growth 18/17: + 3,0 p.p. 400,0 271,5 286,4 297,0 15,0% + 5,5% + 3,7% + 6,4% 316,1 + 7,6% 340,2 350,0 14,0% v 300,0 13,1% 13,0% 250,0 12,0% > 11% 12,0% 200,0 11,9% 11,3% 11,0% 150,0 10,1% 10,0% 100,0 50,0 9,0% 0,0 8,0% 2014 2015

  30. Slide 30: Assets structure

    Assets structure Assets €1.705,9 m 18/17: - 0,1% Structural shift 2018/2017 in p.p. 2017 2018 -2,0 -1,0 0,0 1,0 2,0 3,0 Financial investments and investment property 1.053,5 1.028,7 Fin. inv. and inv. property -1,4 vAssets of policyholders who bear the inv. risk 227,2 204,8 Assets of policyholders -

  31. Slide 31: Growth in assets under management

    Growth in assets under management Assets under management €1.925,8 m 18/17: + 33,6% 1.191,4 + 13,6% 1.353,3 + 3,8% 1.405,2 + 2,6% 1.441,1 + 33,6% 1.925,8 2.000,0 1.800,0 204,8 v1.600,0 1.400,0 638,2 224,2 227,2 1.200,0 214,2 202,9 121,4 129,6 111,4 1.000,0 800,0 600,0 988,5 1.027,7 1.059,7 1.084,2 1

  32. Slide 32: Changes in investment portfolio structure

    Changes in investment portfolio structure Investment portfolio €1.082,8 m 18/17: - 0,1% 2017 2018 Structural shift 2018/2017 in p.p. Investment portfolio (€ million) 1.084,2 1.082,8 -3,0 -2,0 -1,0 0,0 1,0 2,0 3,0 Government bonds 52,3% 50,9% Government bonds -1,4 vCorporate bonds 36,4% 34,1% Corpora

  33. Slide 33: Investment portfolio return impacted by low interest rates

    Investment portfolio return impacted by low interest rates Investment portfolio return* Plan achieved 1,7% 18/17: - 0,3 p.p. 26,9 - 12,0% 23,7 - 2,5% 23,1 - 6,3% 21,7 - 17,3% 17,9 30,0 4,0% 3,5% v 25,0 3,0% 20,0 2,8% 2,4% 2,5% 2,2% 15,0 2,0% 2,0% 1,7% 1,7% 1,5% 10,0 1,0% 5,0 0,5% 0,0 0,0% 2014 2015

  34. Slide 34: Contents

    Contents • Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-2019

  35. Slide 35: Key targets of the 2019 plan

    Key targets of the 2019 plan Insurance business Client focus, digitisation of operations, development of innovative services and insurance products, assistance services in connection with insurance products, preparing for implementation of IFRS 9 and 17 Reinsurance business Growth especially in Lati

  36. Slide 36: Key performance indicators of the 2019 Group plan

    Key performance indicators of the 2019 Group plan € million 2017 2018 2019 plan Group Operating revenues 492,4 540,5 > 4,5% growth > €43 m; > 10% growth based on Profit or loss, net of tax 31,1 43,0 2018 estimate Return on equity 10,1% 13,1% > 12% vReturn on investments* 2,0% 1,7% 1,7% Re/insurance

  37. Slide 37: Consolidated gross premiums written and revenue of non-insurance companies

    Consolidated gross premiums written and revenue of non-insurance companies Planned growth/decline in 2019 350,0 +2% (based on 2018 estimate) 300,0 250,0 200,0 +12% 150,0 v -4% +6% 100,0 +13% +15% 50,0 +2% 0,0 € million Reinsurance Non-life Slovenia Life Slovenia Non-life Life international Pension b

  38. Slide 38: Contents

    Contents • Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-2019

  39. Slide 39: #NEVER ALONE

    # NEVER ALONE WE ARE CREATING A MODERN, DIGITAL, SOCIALLY- AND SUSTAINABLE-ORIENTED INSURANCE GROUP.

  40. Slide 40: Scope of strategy on the group level

    Scope of strategy on the group level SAVA INSURANCE GROUP INTEGRAL RISK MANAGEMENT v INSURANCE REINSURANCE ASSET CAPITAL GROWTH OPERATIONS OPERATIONS MANAGEMENT AND USE BUSINESS SUPPORT ACTIVITIES Long-term focus 40 Overview • Profile of business pillars • 2018 results • 2019 plan • Strategy 2017-20

  41. Slide 41: Chief directions for the period 2017–2019

    Chief directions for the period 2017–2019 1. Digitalisation and technological modernisation of operations to place the client in the centre 2. Growth through acquisitions v 3. Seeking opportunities in environmental/sustainable-oriented investment projects 4. Closing the gap between intrinsic value a

  42. Slide 42: Key targets as per risk strategy

    Key targets as per risk strategy Return on equity: 10,4% (+/-0,5 p.p.) Solvency ratio: between 170% and 230% (between the lower limit of the optimal range and the upper limit of the adequate range of capital) v Combined ratio, non-life: < 95% Combined ratio, reinsurance < 93% Profitability of new li

  43. Slide 43: Gross premiums written by operating segment

    Gross premiums written by operating segment STRUCTURE GOALS: 2016 Long-term focus Insurance Other* operations, (5%) Adria region (12% Insurance v GPW) operations, Adria region Reinsurance Insurance Insurance (20% GPW) operations operations, operations, (19% GPW) Slovenia Slovenia (69% GPW) (55% GPW)

  44. Slide 44: Synergistic effects in the EU

    Synergistic effects in the EU Realisation of synergies by year 2017 2018 Planned: €2,2 m Planned: €4,4 m Achieved: €6,5 m Achieved: €8,4 m 5,00 4,7 4,00 Savings in 2019 3,0 and beyond 3,00 each year: 2,0 2,0 2,0 > € 6 million v 2,00 1,0 1,00 0,00 2017 2018 2019 -1,00 -0,6 -0,7 -0,8 -2,00 € million c

  45. Slide 45: Thank you for your attention.

    Thank you for your attention.

  46. Slide 46: Appendices

    Appendices

  47. Slide 47: Economic indicators Slovenia

    Economic indicators Slovenia GDP Unemployment Import & export - current account 50.000 45.948 6,0 38.837 40.357 43.000 11,0 balance 15,0 13,1 13,1 40.000 36.076 36.239 37.615 4,0 12,0 12,3 4,9 11,2 4,5 10,1 9,7 9,5 7,2 7,3 30.000 2,0 8,9 9,0 8,2 5,8 3,0 3,1 10,0 8,0 5,5 2,3 6,6 6,0 4,4 4,5 20.000 0,

  48. Slide 48: Markets indicators

    Markets indicators Insurance premiums Breakdown of insurance premiums 2018 +8% 2.500 2.344 100,0% 2.177 23,8% 16,8% 3,2% 17,5% 80,0% 30,2% 31,8% 2.000 +10% 1.500 1.350 +10% 60,0% 1.231 96,8% 1.000 766 844 +10% 40,0% 69,8% 76,2% 83,2% 82,5% 68,2% +7% +6% 500 146 161 20,0% 87 94 82 87 0 0,0% Slovenia

  49. Slide 49: 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

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