Pozavarovalnica Sava dd : Sava Re Group Annual Plan 2018 Forecasts High Profit Growth

Pursuant to the Rules of the Ljubljana Stock Exchange, d.d. Ljubljana and the Market in Financial Instruments Act, Sava Re, d.d., Dunajska 56, 1000 Ljubljana hereby announces the following:

2018 Annual Plan

Based on the strategic orientation of Sava Re, d.d. published on 23 November 2017, the Sava Re Group (the 'Group') has drawn up an annual plan for 2018 with ambitious targets for the next year. Gross premiums written are planned to grow by 2.8 percent, the target profit range is set 20 percent above the estimated 2017 profit and return on equity is to rise to over 11 percent.

Regarding insurance operations, the plan addresses in particular activities driving the digital shift, activities to put the client at the centre and the introduction of ancillary services, primarily home assistance. Slovenian non-life business is planned to grow by 2 percent, while life insurance premiums are planned to drop by 5 percent due to a large number of upcoming maturities. At the end of 2017, Zavarovalnica Sava launched its health products, which are anticipated to develop into a major operating segment of the Group. The Group's non-life insurers outside Slovenia are planning an 11 percent growth and life insurers expect to see premiums grow by 13 percent.

Reinsurance operations are planning a 7 percent premium growth in 2018 and a steady entry into new markets, with a continued dedication to portfolio diversification and accumulation control.

For the Slovenian pension segment, the Group is planning a 4 percent growth in life cycle assets. Contributions made by individuals are also planned to increase (in addition to employer contributions). Outside Slovenia, the Group will integrate the Macedonian pension insurer into the Group once the acquisition process is finalised. This acquisition will be a significant step towards implementing the Group's strategic plan to grow the share of pension business in the Group.

The Group's 2018 investment return, still restrained by the low interest rate environment, is planned at approximately 1.7 percent. Based on investment portfolio modelling results, the Group is planning to increase its target allocation to environmental, sustainable and socially responsible investments to account for up to 2 percent of the total investment portfolio (excluding investments of policyholders who bear the investment risk).

The company realises that despite its good business results, indicators relating to the POSR share are yet to achieve the levels of its peer companies abroad (while Group performance indicators do not deviate significantly). Based on a valuation carried out for the purpose of the squeeze-out of minority shareholders of Zavarovalnica Sava announced on 8 August 2017, KPMG conducted a valuation of the entire Group to determine the gap between the market and the intrinsic value of the Group. The value does not materially depart from the value obtained through an analysis on the basis of performance indicators, as also published by Alta and NLB.

The dividend policy, as defined in the strategy for the 2017-2019 period, provides for an annual growth in dividends up to a payout of 40 percent of the Group's net profit for the year.

Estimated Result for 2017

On the basis of the result for the nine months to 30 September 2017 and given the subsequent events up until this announcement, the Group has prepared a profit estimate for the year of approximately € 31 million. Although the Group incurred some large claims in December 2017, the forecast remains at the lower end of the planned profit range for 2017, as especially for Slovenian insurance operations, certain indicators exceeded estimates and claims development for past years is better than expected. We estimate that the Group's gross premiums written will be better than planned, exceeding € 505 million.

A presentation of the 2018 annual plan is attached to this announcement.