Sava Insurance Group, 1Q 2019: profit increase due to lower claims expenses and improved cost efficiency

The Sava Insurance Group delivered a net profit of EUR 10.9 million in 1Q2019, accounting for 25.4% of the 2019 planned profit. The annualized RoE was 12.2%. A benign claims development and improved cost efficiency were the main drivers of the profit increase.

The Group continues its growth strategy, also through acquisitions - realized acquisition activities have a positive effect on the Group's performance.

The Sava Insurance Group posted a high 7.2% growth in operating revenues. This growth was driven by higher net premiums earned by existing insurance companies (6.7%) and also by the revenues of the new Group members acquired during 2018. GWP rose by 2.8% y-o-y to EUR 171.6 million. The growth in GWP was contributed by reinsurance business (6.5% growth), non-Slovenian non-life insurance (12.3% growth) and Slovenian life business (2.6% growth), while Slovenian non-life gross premiums and non-Slovenian life business remained at about the same level year on year. Thus, 1Q2019, the Group wrote 30.8% of the premiums planned for 2019.

A favorable combined ratio of 93.0% was achieved in the first quarter, reflecting improvements in both the expense and loss ratios. The results also reflect a relatively benign claims environment for the reinsurance business and the Slovenian non-life insurance business, while the new Group members acquired in 2018 also contributed to net profit. In addition, the expense ratio improved year on year due to lower acquisition costs in the reinsurance segment and increased cost efficiency across all segments, as operating expenses rose slower than net premiums earned.

Acquisitions complementary to the adopted strategy

In addition to posting strong organic growth, the Sava Insurance Group continues its strategy regarding acquisitions-based growth. On 27 February 2019, Zavarovalnica Sava satisfied all suspensive conditions, becoming the sole owner of the companies ERGO Osiguranje d.d. and ERGO Zivotno Osiguranje d.d. The acquisition of the asset manager KBM Infond, Druzba d.o.o. is still underway and is expected to be completed in the second quarter of the year.

Get the full versions of the Sava Insurance Group's Quarterly report and Q1 results presentation for investors



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