Triglav Group’s total business reached EUR 1,39 billion while GWP increased to EUR 1,28 billion, both indicators seeing a 12% y-o-y growth in the first 9 months of 2023. The group expects business volume to reach EUR 1.6 billion and earnings before tax between EUR 100 million and EUR 120 million in 2024.
The Triglav Group is financially stable and adequately liquid with a strong capital base. As 30 September 2023, the Group's balance sheet total increased by 10% relative to 31 December 2022 to EUR 4.3 billion, while total equity amounted to EUR 842.0 million (index 94).
The Group's total business volume reached EUR 1,390.1 million (index 112) and gross written premium, which accounted for 92% of total business volume, increased to EUR 1,282.8 million (index 112). In the Slovenian market, premium grew by 11%, in the international market by 25% and in other markets of the Adria region by 6%. Other income totaled EUR 107.4 million (index 115).
The Group's nine-month earnings before tax were EUR -11.8 million, down from EUR 33.6 million for 9M2022.
The insurance operating result was negative and amounted to EUR –33.9 million (9M 2022: EUR 25.7 million). The life and pension insurance segment performed well, while the non-life and health insurance segments recorded a loss due to the increased frequency and severity of claims and the price regulation of supplemental health insurance. Insurance revenue increased by 12% to EUR 1,088.9 million, claims incurred by 61% to EUR 1,009.6 million and acquisition costs, administrative costs and non-attributable costs by 15% to EUR 262.5 million.
Uroš Ivanc, a Management Board member of Zavarovalnica Triglav, explained: "Since last year, high inflation and inflation expectations have had a strong impact on our costs and claims. We have responded by taking numerous measures related to claim settlement and management and optimizing operating expenses. We have also adjusted premiums and premium rates, a measure always with a delayed impact on the income side. Its impact is partly visible in this year's insurance revenue, but its full effect will only be seen next year."
Backed by a favorable trend in the financial markets and the implementation of the Group's outlined investment policy, net investment result amounted to EUR 14.9 million (9M 2022: EUR –7.2 million). The annualized return on financial instruments of the Group (excluding unit-linked life insurance contract investments) was 1.5% in the first nine months of 2023 (9M 2022: 0.2%).
The result of non-insurance operations reached EUR 7.2 million, mainly due to the good result of the asset management activity.
This year's business was significantly impacted by natural disasters, which caused CAT claims estimated at EUR 184.4 million gross at Group level and, taking into account reinsurance protection, they are estimated at EUR 55.1 million. Uroš Ivanc, a Management Board member of Zavarovalnica Triglav, added: "According to current estimates, hailstorms with strong wind and the August storms and floods in Slovenia resulted in EUR 166.3 million in gross claims. Most of the Group's other markets have also been affected by such natural disasters. The largest claims were recorded in Croatia (EUR 4.4 million) and Serbia (EUR 4.2 million). Estimated reinsurance CAT claims amounted to EUR 9.1 million."
Other comprehensive income was positive and amounted to EUR 15.8 million (9M 2022: EUR –61.3 million).
Through active investment management, the Group maintained an investment portfolio composition comparable to the balance as at 31 December 2022. The bulk (54.3%) of the investment portfolio was accounted for by bonds invested in developed markets, most of which have a high credit rating. As at the reporting date, sustainable fixed-income investments reached EUR 231.1 million, representing an 10% share of the bond portfolio (index 104 relative to 31 December 2022). The total portfolio (including investment property, investments in associates, unit-linked life insurance contract investments and financial instruments from financial contracts) as at 30 September 2023 was worth EUR 3,333.4 million, up by 2% relative to the 2022 year-end.
Performance in 9m 2023 by segment
The non-life insurance segment: Total business volume amounted to EUR 974.8 million (index 115) and insurance revenue to EUR 869.3 million (index 115). Under pressure from CAT claims volume and inflation, claims incurred rose by 76% to EUR 821.8 million, while acquisition and administrative costs including non-attributable costs grew by 18% to EUR 210.5 million. The combined ratio in non-life insurance increased to 102.7% (9M 2022: 97.3%), driven by the deterioration in the claims ratio. The nine-month earnings before tax were EUR –12.6 million (9M 2022: EUR 23.4 million).
The life and pension insurance segment: Total business volume increased by 11% to EUR 223.2 million. New business margin stood at 13.7% (2.5 percentage points more than last year), CSM grew by 27% to EUR 215.3 million and CSM of new contracts was 11.6% (13.3% last year). Profit before tax amounted to EUR 21.4 million.
The health insurance segment: Total business volume amounted to EUR 157.2 million (index 103), with complementary insurance premium recording a high 37% growth and supplemental insurance premium remaining at last year's level. Claim incurred rose by 22% to EUR 168.5 million, while the combined ratio deteriorated by 17.7 percentage points year-on-year to 118.0%. This segment recorded earnings before tax of EUR –28.5 million.
Asset management and other non-insurance operations: The total business volume of the Group's non-insurance companies amounted to EUR 35.0 million (index 88), down year-on-year due to last year's high realized gains on the sale of investment property. Income from mutual fund management and discretionary mandate services was up 4% year-on-year. This segment recorded earnings before tax of EUR 6.9 million. Earnings before tax of non-insurance operations were EUR 7.2 million.
Other highlights
Dividend. On 6 June 2023, the regular General Meeting of Shareholders adopted the proposal of the Management Board and the Supervisory Board to pay a dividend of EUR 2.50 gross per share, i.e. EUR 56.8 million in total (just over 50% of the consolidated net profit for 2022).
The Supervisory Board. New members were appointed to Zavarovalnica Triglav's Supervisory Board; see the Company's website for more information.
The Management Board. Blaž Jakič began his five-year term of office as a Management Board member of Zavarovalnica Triglav on 2 March 2023. On 29 November 2023, the Supervisory Board appointed Andrej Slapar as the President of the Management Board for a new five-year term of office. He has served as the President of the Management Board since May 2013; his new five-year term of office will commence on 13 November 2024. The Supervisory Board agreed with the President of the Management Board's proposal and reappointed Uroš Ivanc and Tadej Čoroli as Management Board members. They served as Management Board members since July 2014; the new five-year term of office of Uroš Ivanc will commence on 16 July 2024 and that of Tadej Čoroli on 31 July 2024.
Andrej Andoljšek, Chairman of the Supervisory Board of Zavarovalnica Triglav, said: "The Supervisory Board acknowledge the cooperation and mutual trust between the Supervisory Board and the Management Board. On behalf of the Supervisory Board, I wish the Management Board every success in implementing the Triglav Group's strategic guidelines."
Triglav Group business plan for 2024
The Group expects a moderate macroeconomic environment in 2024 and its performance will depend on the financial market trend, the impact of the termination of supplemental health insurance, reinsurance coverage and the market potential of the markets in which the Group operates. The Group's total business volume is planned at around EUR 1.6 billion and its earnings before tax between EUR 100 million and EUR 120 million in 2024. In addition, the Group will aim to ensure a high level of profitability of the insurance business by reaching a combined ratio of around 95% in non-life and health insurance.
Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "In 2024, we expect our operations to normalise in line with our strategy. The improvement will be seen in both the claims and expense parts of the combined ratio and in the generated operating profit. The termination of supplemental health insurance has been taken into account in the planned business volume of the health insurance segment, in which we will continue to develop and offer complementary insurance products."
The Group will consistently implement its strategic guidelines. By continuing its digital transformation and developing service-oriented business ecosystems, the Group will continue to pursue its main strategic objective – an outstanding and uniform client experience. As the leading insurance and financial group in Slovenia and the Adria region, the Group will further strengthen its market position, while seeking opportunities directly according to the principle of free movement of services and through partnerships. It will strive for cost optimization and effectiveness (productivity gains, automation, digitalization and centralization), effective risk management, financial stability and retaining high credit ratings from recognized rating agencies. The dividend policy remains unchanged, as does the aim of making the ZVTG share a profitable, safe and stable investment for investors. With respect to sustainable development, the Group will pursue its ambitions in line with its Sustainable Development Policy.
