TRIGLAV Group: 22% profit growth in first-half 2012, to EUR 41.6 million

4 September 2012 — Daniela GHETU
triglavIn the first six months of 2012, the TRIGLAV Group earned a total of EUR 523.6 million in insurance and co-insurance premium and recorded a 22.1% profit growth, up to EUR 41.6 million. The disclosed net profit of Zavarovalnica TRIGLAV as the controlling company was EUR 25.0 million. Zavarovalnica TRIGLAV will participate in the capital increase of ABANKA subject to the fulfilment of conditions precedent.

In the first half of 2012, the net profit of the TRIGLAV Group amounted to EUR 41,6 million or 22% more than last year. The Group achieved such interim results by consistently realising its strategic guidelines, focused on its core insurance business.

The Group's combined ratio in non-life insurance, showing the profitability of the core insurance operations, improved by 1.0 percentage points and reached 88.0%. The TRIGLAV Group's profits from non-life insurance, as its core business, rose from EUR 38.3 million to EUR 40.7 million.

In the first six months of 2012, the TRIGLAV Group posted a total of EUR 523.6 million in gross insurance and co-insurance premium or 5% less than in the respective period of 2011. Total premiums dropped due to a decrease in demand for some insurance products caused by lower economic activity, decline in exports and imports, new bankruptcies, reduced purchasing power of households, higher unemployment, reduction of bank lending, etc. Increased competition in the motor vehicle insurance market and the consequent adjustments to the terms and conditions reduced the volume of written premiums for car insurance. An additional loss of planned premium income resulted from the insurance portfolio selection and the intense measures taken to mitigate poorer insurance technical results in non-life insurance, manifested in a higher claims ratio for both the parent company and the Group.

The controlling company's share in the Group's total gross written premium amounted to EUR 373.2 million or 6% less in nominal terms compared to the same period of 2011.

Net profit of Zavarovalnica TRIGLAV in the first half of 2012 totalled EUR 25 million or 18% less than in the corresponding period last year. The decrease in profit was mainly due to permanent impairment of assets in the amount of EUR 32.3 million as well as loss arising from Greek securities holdings, owing to the effect of the unilateral write-off of the Greek government debt totalling EUR 10.2 million.

Zavarovalnica TRIGLAV continues to record profit growth in non-life insurance as its core business, with profits rising from EUR 35.0 million in the first half of 2011 to EUR 39.5 million in the first six months of 2012. Zavarovalnica TRIGLAV's combined ratio in non-life insurance improved by as much as 2.9 percentage points, reaching 80.8%.

Profit generated in the first half was also affected by individual mass loss events (the largest were the bora wind storms around Nova Gorica and Ajdov??ina in February), which caused EUR 5.1 million of damage. Claims settled in crop and fruit insurance amounted to approximately EUR 3 million due to the spring frost in early April which reduced crop output, especially in fruit growing and to a lesser extent also in viticulture. In the area of Ljubljana a hailstorm in June caused around EUR 2 million of damage.

Business results of the TRIGLAV Group are heavily influenced by the situation on capital markets, as diverse financial investments represent the majority of the Company's total assets. Despite a relatively conservative investment policy of Zavarovalnica TRIGLAV and the TRIGLAV Group, the global financial crisis and the current situation on capital markets negatively affected the value of some of the investments. A lower value of portfolio investments was primarily reflected in the decrease of the Company's share capital and net profit. As a consequence financial assets were permanently impaired by EUR 32.8 million in the first half of 2012. Profit was also adversely affected by loss arising from Greek securities holdings, owing to the effect of unilateral write-off of the Greek government debt in the amount of EUR 10.2 million.

The Supervisory Board approved Zavarovalnica TRIGLAV's participation in the first round of the capital increase of ABANKA Vipa d.d., with amount equalling to Zavarovalnica TRIGLAV's relative stake in ABANKA's equity, i.e. 25.61% or 1,829,285 shares of EUR 7 per share totalling EUR 12,804,995.00.

The resolution shall take effect subject to the fulfilment of the conditions precedent, namely:
  • Zavarovalnica TRIGLAV d.d. and other state-related companies as a whole as at the subscription date do not exceed the takeover threshold according to the Takeover Act (ZPre-1);
  • before the subscription, Zavarovalnica TRIGLAV d.d. may exercise voting rights attached to Abanka Vipa shares in its ownership; 
  • the combined share of voting rights attached to ABANKA Vipa d.d. held by its state-related share owners after the additional capital is raised is less than 1/3 of total voting rights attached to its shares; 
  • the total number of 7,142,858 ABANKA Vipa shares, subject to the raising of its capital, has been subscribed and paid in.

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