Sava Re,d.d · LJSE:POSR
Sava Re,d.d — Sava Re — 1–9/2020 Earnings Presentation
37 slides from Sava Re,d.d's earnings presentation, Nov 20, 2020
Slide 1: Sava Insurance Group 1–9/2020 results
Sava Insurance Group a 1–9/2020 results 20 November 2020
Slide 2: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 3: Highlights 1–9/2020
Highlights 1–9/2020 Growth in operating revenue of 16.4% Net profit of €47.6 million, including €7.0 million positive effect of difference between fair value of net assets acquired and the cost of Vita ROE of 14.8% Net combined ratio (excluding FX differences) of 92.4% in line with target v Emergenc
Slide 4: Assessment of exposure to increased Covid-19–related risks
Assessment of exposure to increased Covid-19–related risks After the reporting date, Sava Re was informed of new circumstances that had arisen in certain EU insurance markets and in the United Kingdom related to potential additional adverse effects of the Covid-19 pandemic on the operations of Zavar
Slide 5: Inclusion of Vita into the Group on 31 May 2020
Inclusion of Vita into the Group on 31 May 2020 v 5 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 6: Key figures – Sava Insurance Group
Key figures ̶ Sava Insurance Group 2020 revised Change € million, except % 1–9/2019 1–9/2020 plan 2020/2019 Group Operating revenue 420.4 489.5 > 640 16.4% Gross premiums written, (re)insurance part 468.5 527.1 > 640 12.5% Net expense ratio, including operating revenue* 30.7% 29.1% 32 ̶ 33% -1.6 p.p
Slide 7: 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 8: Growth in consolidated GPW of 12.4%
Growth in consolidated GPW of 12.4% v 8 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 9: 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 9 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 10: Growth in profit before tax of 19.7%
Growth in profit before tax of 19.7% v 10 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 11: Consolidated profit before tax by segment
Consolidated profit before tax by segment v 11 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 12: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 13: Results by operating segment – reinsurance
Results by operating segment – reinsurance • Growth in non-proportional and proportional • Deterioration in underwriting result due to • Investment result excluding FX differences reinsurance premiums mainly in Asian markets increased claims burden from more larger similar as in the same period last
Slide 14: Results by operating segment – non-life Slovenia
Results by operating segment – non-life Slovenia • Larger volume of FOS business (up €15.1 • Stronger technical result mainly due to high • In 2019 one-off positive effect from the million) growth in net premiums earned and favourable revaluation of the investment in Sava Infond in v • Larger volume
Slide 15: Results by operating segment – non-life international
Results by operating segment – non-life international • Decrease as a result of measures taken to curb the • Stronger technical result mainly due to higher • Higher investment result due to changes in fair v Covid-19 pandemic in assistance business, motor and property insurance sales net premiums ea
Slide 16: 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 2020 (€26.6 million in GPW), excluding Vita v reduction in GPW of 5% • 9% decline in annual premiums (e
Slide 17: 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 portfolio growth and v improved efficiency of own sales network and sales channel diversification result of high premium growth and fl
Slide 18: Results by operating segment – pension business
Results by operating segment – pension business v • Loss due to goodwill impairment and setting of • Growth in other technical and other income of provisions for failure to achieve the guaranteed the North Macedonian pension company return by the Slovenian pension company (more assets in pension sav
Slide 19: Results by operating segment – other
Results by operating segment – other v 19 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 20: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 21: Investment portfolio and AuM
Investment portfolio and AuM v 21 Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 22: Structure of the investment portfolio
Structure of the investment portfolio 31/12/2019 30/9/2020 Investment portfolio (€ million) 1,157.8 1,527.1 Corporate bonds 34.1% 41.6% Government bonds 46.6% 39.7% Cash and cash equivalents 6.5% 8.1% Shares 1.5% 2.4% Mutual funds 3.0% 2.4% Infrastructure funds 1.7% 1.6% vDeposits & CDs 4.0% 1.4% In
Slide 23: Net inv. income of and return on the investment portfolio
Net inv. income of and return on the investment portfolio € million 1–9/2019 1–9/2020 Difference Net investment income relating to the investment portfolio 16.3 11.8 -4.5 Net inv. income of the investment portfolio, excl. FX 14.3 15.0 0.7 Return on investment portfolio, excl. FX and SD cost 1.8% 1.7
Slide 24: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 25: Shareholders and share trading
Shareholders and share trading Share capital (€ million) 30/9/2020 71.9 Market capitalisation (€ million) 287,6 Book value per share Trading symbol Number of shares POSR 17,219,662 €28.28 Number of own shares Number of shareholders 1,721,966 4,248 30 Sep 20 / 31 Dec 19: +13.9% Sava Re share price pe
Slide 26: Dividend policy
Dividend policy Dividend policy: Increasing dividend by an average of 10% per year; distributing from 35% to 45% of v the net profit of the Sava Insurance Group. • In August Slovenian Insurance Supervision Agency called upon insurance, reinsurance and pension companies to temporarily suspend dividen
Slide 27: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 28: Capital adequacy
Capital adequacy € million 31 Dec 2019 (audited) Overcapitalised • Additional engagement of / over 250% return of capital Eligible own funds 522.0 Solvency capital requirement (SCR) 237.7 Acceptable level of excess capital • Potential reallocation of Solvency ratio 220% capital 220–250% v € million
Slide 29: Contents
Contents • Group results • Segment reporting • Financial investments • POSR share and dividend policy • Solvency position • 2020 plan
Slide 30: 2020 targets (consolidated)
2020 targets (consolidated) Actual Actual Revised 2018 2019 2020 plan Group Operating revenue €536.8 million €584.2 million > €640 million Profit or loss, net of tax €43.0 million €50.2 million > €50 million Return on equity (ROE) 13.1% 13.8% > 12% vInvestment return* 1.7% 1.9% 1.4% (Re)insurance pa
Slide 31: Thank you for your attention.
Thank you for your attention.
Slide 32: 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 33: Appendix
Appendix
Slide 34: Group exposure by region
Group exposure by region Higher exposure to Slovenia in 1–9/2020 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 USA resulting
Slide 35: Group exposure to Slovenia
Group exposure to Slovenia € million 31/12/2019 30/9/2020 Change Type of investment Amount Structure Amount Structure in p.p. Deposits 28.9 2.3% 4.0 0.2% -2.0 Government bonds 95.9 7.6% 152.2 9.5% 1.9 Corporate bonds 32.1 2.5% 20.7 1.3% -1.3 Shares 16.9 1.3% 16.9 1.1% -0.3 Mutal funds 2.8 0.2% 2.0 0
Slide 36: 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 deposits decreased). v Government * Includes direct i
Slide 37: Maintaining a good rating profile despite Covid-19 developments
Maintaining a good rating profile despite Covid-19 developments Investment grade assets represent 80.4% of fixed income investments, which is 2.1 p.p. higher than at the end of 2019. The share of AAA-rated categories declined reflecting maturities of government bonds and the downgrading of ratings d