TRIGLAV, 1H2015: Foreign subsidiaries pushed up the Group's premium production

27 August 2015 — Daniela GHETU
The foreign subsidiaries of the TRIGLAV Group had a determinant contribution to the 4% positive y-o-y GWP evolution reported by the Group, to EUR 507.8 million. Thus, while the Slovenian mother company TRIGLAV, booked 1% less y-o-y or EUR 333.9 million in GWP, in the other five Adriatic countries where the Group is active, all subsidiaries saw premium growth compared to the corresponding period of the previous year, whith the highest growth rate in Serbia.

The Group ended the first half of 2015 with a net profit of EUR 53.6 million, which was 5% less than in the corresponding period last year, whilst the combined ratio improved and stood at 93.6%. The TRIGLAV Group continues to maintain a high level of financial stability, as confirmed by two "A-" credit ratings with a positive medium-term outlook assigned by the established credit rating agencies.

"We are satisfied with our performance in the first half of 2015. Our performance results confirm that the TRIGLAV Group has been achieving its strategic objectives. We expect that until the end of 2015 the conditions in the insurance markets will remain challenging and that exceptional investment returns on capital markets will not be possible at least in the short run. In the insurance business, we will continue to take an aggressive market approach and to develop customer-oriented products and services, while constantly striving to raise the efficiency of our operations. Apart from that, we continue to improve our position in the pension and health insurance markets as important strategic segments of our operations. At the Group level, we will continue with prudent ownership consolidation of the Group's subsidiaries, while streamlining asset management and continuing to disinvest shareholdings in the companies whose business is incompatible with the Group's Strategy," commented Andrej SLAPAR, President of the Management Board of Zavarovalnica TRIGLAV.

On Slovenia, non-life premium, representing almost 73% of total written premium, decreased by 2%, whilst premium generated by life insurance grew by 5%. Written premium of TRIGLAV, Zdravstvena zavarovalnica was 1% higher compared to the same period of 2014.

Outside Slovenia, the highest premium growth of 39% was recorded in the Serbian market, the premium in the Macedonian market grew by 13%, while the premiums in Croatia and Montenegro went up by 7% and 5% respectively. In Bosnia and Herzegovina, a 9% growth was recorded by the insurer in Sarajevo, whereas the Banja Luka insurance company recorded a 2% increase in premium. The non-Slovenian subsidiaries of the Group accounted for 17.2% of the GWP.

Profit affected by lower return on financial investments

The TRIGLAV Group ended the first half of 2015 with a net profit of EUR 53.6 million, which was 5% less than in the respective period last year, whilst the net profit of Zavarovalnica TRIGLAV as the parent company amounted to EUR 39.9 million, representing a 7% decrease over 2014. The Group's performance was significantly affected by the return on financial investments. In 2014, the situation on capital markets resulted in an extraordinarily high return, whereas the situation in the first six months of 2015 changed as expected. Compared to the same period last year, the Group's return on financial investments went down by 27%.

Solid profitability of core insurance operations

The combined ratio of the TRIGLAV Group - a measure of profitability in core insurance operations − reached 93.6% as at 30 June 2015. Compared to the corresponding period of 2014, the ratio has improved, i.e. decreased by 2.1 pp. This was also the result of the fact that no extraordinary loss events occurred in the first six months of 2015, unlike in the respective period of 2014. The combined ratio of the parent company also improved as it decreased by as many as 5.4 pp to 89.0% compared to 2014.

A high level of financial stability

The TRIGLAV Group's financial stability continued to remain high, as confirmed by the "A-" credit ratings assigned by the credit rating agencies Standard & Poor's and A.M. Best. Following its latest regular revision in 2015, Standard & Poor's revised the Group's medium-term outlook to positive, which matches the one assigned by A.M. Best. As at the reporting date, the high level of financial stability of the Group is reflected in insurance technical provisions of EUR 2,659.2 million and the total equity capital amounting to EUR 665.7 million. Both indicators represent a guarantee and a basis for balanced operations and long-term safety of policyholders.

High dividend payments

This year, Zavarovalnica TRIGLAV allocated as much as 67% of the net profit of the TRIGLAV Group (owners of the controlling company) for the 2014 dividend payments. Thus, the dividend amount deviates from the existing dividend policy of Zavarovalnica TRIGLAV, which otherwise remains unchanged. The high dividend payout for 2014 was in line with maintaining a strong capital base and solvency position of the TRIGLAV Group, as after the dividend payments for 2014 the Group had sufficient capital surplus required to achieve the target "A"-rating and to continue to realise its other strategic objectives.

The full text of the TRIGLAV's interim report is available here.

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