Pozavarovalnica Sava dd : Sava Re Group Posts Growth in Third Quarter, Profit Affected by Large Losses

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 (also the 'Company') hereby announces the following:

In its regular session earlier today, the supervisory board of Sava Re, d.d. was presented with the unaudited financial results of the Sava Re Group and Sava Re, d.d. for the first three quarters of 2017.

In the first three quarters of the year, the Sava Re Group grew gross premiums written by 4.8 per cent, while the third quarter was impacted by a number of large losses.

The largest absolute contribution to growth in gross premiums written came from the Slovenian non-life segment (relative year-on-year growth of 5.3 per cent), mainly related to a larger volume of motor insurance business. This is followed by international non-life insurance business (relative growth of 10.2 per cent year on year). In international insurance markets, the largest growth was generated in Croatia and Montenegro, while the growth in Serbia is also favourable. There was also an increase in Slovenian life insurance business (relative year-on-year growth of 4.8 per cent). The largest relative premium growth was posted in international life insurance, of 11.6 per cent, and in all markets where the Group is present, members' premium growth exceeded the average market growth. Against the background of the soft market conditions prevailing in international reinsurance markets, reinsurance operations produced no growth.

In the first nine months of 2017, the Sava Re Group generated a net profit of € 20.9 million, a year-on-year drop of 7.5 per cent. In the third quarter, the Group experienced an above-average number of claims - both in the reinsurance segment (American storm and a large property loss in Russia) and in the Slovenian non-life insurance operations (a number of hail storms). It is expected that the American storm losses will push up reinsurance prices in international reinsurance markets in the January 2018 renewals, as the leading catastrophe reinsurers incurred huge storm-related losses. Although these losses have a negative effect on the current results, they are expected to have a positive impact on the future results of reinsurance operations. The net profit for the period was further eroded by a higher corporate tax rate.

While the net incurred loss ratio (excluding exchange differences) for the first nine months of 2017 has remained on the year-on-year level, it is slightly poorer than planned. The net expense ratio improved marginally and is better than planned. The expense ratio improved as a result of premium growth and optimised operations of Zavarovalnica Sava after the merger. The return on investments, excluding exchange differences, is lower than the year-on-year figure but above the target return.

Attached hereto is the document 'Unaudited Financial Report of the Sava Re Group and Financial Statements of Sava Re, d.d. for the Nine Months to 30 September 2017'.

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