Pozavarovalnica Sava dd : 2013 – year of transformation for the Sava Re Group: preliminary 2013 results 2013, 2014 plan and strategic objectives for 2014-2018

Monday, 10/03/2014

Pursuant to the Rules of the Ljubljana Stock Exchange, d.d., Ljubljana and the Market in Financial Instruments Act, Pozavarovalnica Sava d.d., Dunajska 56, 1000 Ljubljana ("Sava Reinsurance Company"), hereby announces the following: 

By gaining 100% ownership of Zavarovalnica Maribor, the Sava Re Group underwent a significant transformation and became the second largest insurance group in the region. Thus the Group achieved an important strategic goal - gaining a strong position in a developed insurance market and establishing a business model well balanced between Slovenian operations and operations in global reinsurance markets. These are the two segments where we expect the largest cash-flows to strengthen the Group and support its dividend policy, while we see significant premium growth potential in Western Balkan insurance markets due to their underdevelopment. 

In 2013, the Sava Re Group wrote € 386,7 million in premiums, an increase of 43% over 2012. The unaudited net profit was € 13,6 million, which is 15,4 % more than in 2012. Had results not been impacted by impairment losses on subordinated bank bonds, the Group would have exceeded its profit target; however, even with these impairment losses included, the profits generated surpassed those of 2012. Another positive impact (€ 7,7 million) come from the revaluation of the Sava Reinsurance Company's pre-acquisition minority share in Zavarovalnica Maribor. 

The unaudited net profit of Sava Reinsurance Company for 2013 totalled € 14,8 million, which is 53,7 % more than in 2012 and close to the planned target. From these, Sava Reinsurance Company will, in 2014 for the first time, pay dividends in the amount of 30 % of 2013 profits, in accordance with the approved dividend policy (approximately 32 % of the consolidated profit). 

The Group is planning a 15 % premium growth for 2014, which will mainly reflect the fact that Zavarovalnica will be included in the consolidated financial statements for the full year. Premium growth in the Slovenian insurance market is expected to remain low, while larger growth is envisaged in our non-Slovenian insurance markets. The Group is planning a 9,6 % return on equity for 2014. 

In the medium term, premium volume is to exceed half a billion euro and return on equity the 11 % mark. In this period, growth will mainly be driven through controlling costs (especially in Slovenian insurance operations) and enhancing underwriting and claims processes. We are also planning a stable net income from investments. The key goals in the first three years of the plan period will be the integration of the Slovenian insurance market and growth outside Slovenia. Thereafter, the Group will seek growth opportunities in the region. 

The presentation attached hereto includes preliminary figures for 2013, a financial plan for 2014 and Group strategic directions for the 2014-2018 period. 

This announcement will be available on the Company's website at www.sava-re.si, at least five years from the date of this announcement.

• Sava Re Group - Estimated Results 2013, Plan 2014 and Strategic Target 2014-2018 [.pdf, 591 kB]