SAVA Re Group ended the first half of 2013 with an after-tax net profit of EUR 19.2 million, 86% up y-o-y. The consolidated profit includes a fair value revaluation of the former 48.68% stake in Zavarovalnica MARIBOR of EUR 7.7 million. Zavarovalnica MARIBOR became part of the Sava Re Group in May 2013, thus the company was consolidated for only two months. Before that, Zavarovalnica MARIBOR was included in the consolidated financial statements using the equity method.

Gross premiums written by the SAVA Re Group in 1H2013 amounted to EUR 190 million up 19.9% y-o-y. The increase was due to consolidation of Zavarovalnica MARIBOR, which had an effect of EUR 42.5 million on the consolidated financial statements. In the first half of 2013, the Group realised 45.5% of the budgeted annual consolidated gross premiums written.

Consolidated gross claims paid increased by EUR 23.8 million, mostly due to Zavarovalnica Maribor's consolidation which had an effect of EUR 24.4 million. There was also an increase in claims from reinsurance business, following the November 2012 flood losses in Slovenia. Almost all non-Slovenian Group companies recorded a decline in gross claims paid, which indicates improved claims handling and liquidation processes.

The consolidated net investment income of EUR 18.2 million increased by EUR 9.4 million y-o-y. This increase includes the fair value revaluation of the former stake in Zavarovalnica MARIBOR. Excluding the fair-value revaluation of the former stake, the consolidation under the equity method as well as the consolidated income for May and June relating to Zavarovalnica MARIBOR, the net investment income would total EUR 6 million, an improvement of 8.5% y-o-y.

The parent company SAVA Re recorded a net profit of EUR 9.1 million, double as compared with the previous years' results, while the GWP volume decreased by 8%, to EUR 87 million. The decline in reinsurance premiums from Slovenian cedents is due to lower-quota share participations, while foreign-sourced premiums shrank both as a result of cancellations of treaties that did not meet profitability criteria and due to a smaller amount of business offered following the S&P rating downgrade.

The weather-related events of the 2012 winter determined a 10.5% increase in the gross reinsurance claims. However, as emphasized in the company's interim statement, since claims provisions had already been set aside for this purpose, these claim payments did not affect the profit figure. The net incurred loss ratio improved because of the better performance of foreign-sourced business.

The net investment income of Sava Reinsurance Company totalled EUR 5.8 million, which is about triple the amount y-o-y. The increase is due to dividend payments from subsidiaries.

After the successful completion of the capital increase, the purchase of the remaining shares of Zavarovalnica MARIBOR and following the annual rating review, in July 2013 S&P estimated a stable outlook for the existing "BBB+" ratings and removed the ratings from CreditWatch with negative implications.

The full interim report published by SAVA Re Group is available here.