Natural events, exchange rate differences and moral damages affected the H1 2020 CO Group profit by more than EUR 13 million

10 August 2020 — Andrei Victor
For the first six months of 2020, CROATIA osiguranje Group reported GWP of HRK 1,867 million (~EUR 247 million), about 6% lower than last year. The combined ratio from the Group's regular operations is 91.8% and is almost one percentage point better than last year.

"The business operations of Croatia osiguranje in the first part of the year were burdened by one-time earthquake costs, consequences of frost and hail, negative exchange rate differences and the decision of the Supreme Court of the Republic of Croatia to increase the orientation criteria and amounts for non-pecuniary damages. The mentioned facts negatively affected the result before taxes by more than HRK 100 million (~EUR 13.3 million)", according to the ADRIS Grupa representatives - CROATIA's osiguranje shareholder.

Despite this, in the first six months in 2020, the CROATIA osiguranje Group made a net profit of HRK 204 million (~EUR 27 million), which is 2% less when compared to the same reporting period last year.

On the Croatian market, Croatia osiguranje continues to hold a leading position with a total share of 28.6%. The total gross premium written amounted to HRK 1,584 million (~EUR 204.8 million), which is 5% less compared to the first six months of last year, "primarily due to the decline in the life insurance market, but also targeted optimization and the removal of the unprofitable part of the portfolio".

Overall, the total revenues of the ADRIS Grupa amounted to HRK 2.31 billion, which is 17% less than the revenues generated in the same period last year. Revenues from the sale of goods and services amount to HRK 1.91 billion and are 22% lower than last year. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) amounts to HRK 271 million. The consolidated net loss amounts to HRK 45 million primarily due to significantly reduced business activities of the Group's tourism division.

"The business challenges caused by the coronavirus pandemic, and consequently the global economic crisis, require a rapid adjustment of business operations to new circumstances. Thus, at the beginning of the crisis, ADRIS has already taken numerous measures and activities in all its companies. From a short-term perspective, the emphasis has been put on liquidity and cost optimization, with the aim of the long-term sustainability of the system".

Exchange rate for calculations: 1 EUR = 7.558818 Kuna - HRK (June 30th, 2020), according to the Croatian Central Bank

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