Triglav Group, Q1 2023: increasing business volume, but lower profitability due to the difficult economic context

31 May 2023 — Daniela GHETU
In Q1 2023, the Triglav Group increased its total business volume to EUR 484.6 million (+9% y-o-y) and generated EUR 18.5 million in profit before tax (-37% y-o-y). Results were affected by the more challenging business conditions accompanied by the effects of inflation, higher claim intensity, a lower health insurance result and the effects of methodological decisions in the transition to IFRS 17 and IFRS 9 accounting standards.

The Group, which has maintained its financial strength and a dominant market position, continues to implement strategic development activities related to a strong client focus, digital transformation and sustainability ambitions. The Management Board and the Supervisory Board will propose to this year's regular General Meeting of Shareholders to be held on 6 June 2023 to pay a dividend of EUR 2.50 gross per share.

In Q1 2023, the Triglav Group posted a profit before tax of EUR 18.5 million, down by 37% relative to the same period last year (the parent company: EUR 8.3 million; index 50). The Group's net profit amounted to EUR 16.1 million, a 39% decrease relative to the same period last year (the parent company: EUR 6.8 million; index 46).

Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "In the challenging business environment in the first quarter of this year, we maintained our financial strength, a strong market position and performed well under the given circumstances. Our robust business model and well-diversified product range enabled us to effectively increase the total business volume and achieve a sound investment result amid the favorable situation on the financial markets. At the same time, the Group's year-on-year results were affected by increased expenses and greater claim intensity in the non-life and health insurance segments due to inflation, a lower health insurance result as well as the effects of the selected methodological approaches in the transition to IFRS 17."

The bulk of the Group's profit before tax (EUR 14.8 million, index 62) was generated by its insurance operations, of which EUR 11.0 million by the non-life insurance segment and EUR 4.2 million by the life insurance segment. The result of the health insurance segment was negative at EUR -0.4 million due to the specificities of this segment on the income side and the management of additional provisions from the time of the pandemic, in addition to higher claims. Profit from underwriting activities (in all three insurance segments) reached EUR 9.2 million, its 51% decrease being the result of high growth in non-life and health insurance claims incurred. Profit from financial investments rose year-on-year by 8% to EUR 5.6 million. The profit before tax of non-insurance operations totaled EUR 3.7 million (index 68). Its year-on-year decline is the result of its increase last year due to the profit from the sale of investment property in the amount of EUR 5.2 million.

The Group's other comprehensive income amounted to EUR 8.1 million (Q1 2022: EUR -13.2 million). Its level was primarily influenced by the fact that the increase in the bond portfolio value due to the reduction in interest rates was higher than the change in the value of liabilities.

With regard to the annual profit, Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "Our planned annual profit at Group level (initially planned profit of EUR 95-110 million) was affected by the announced abolition of supplemental health insurance and, above all, the Decree of the Government of the Republic of Slovenia on setting the maximum price of supplemental health insurance premium adopted in April this year, especially its duration. We estimate that, mainly due to its effects and loss-making, this year's planned profit before tax of the Triglav Group may decrease by around 25-40%. The impact increases with the duration of the Decree. At Triglav, we work to protect the interests of our policyholders, Company shareholders and other stakeholders."

The Triglav Group strategy to 2025 and its sustainability orientation. By continuing its digital transformation and developing service-oriented business ecosystems, the Group pursues its main strategic objective - an outstanding and uniform client experience across all channels, all processes, all services, products and companies. Its transformation is based on the unified management of client experience and digital business. The Group pursues its set sustainable development ambitions in the environmental, social and governance areas by 2025, systematically implementing them in both strategic activities, its own processes, its relationship with the social environment and in corporate governance. In 2023, Zavarovalnica Triglav and Triglav Skladi have become signatories to the United Nations Principles for Responsible Investing (PRI). In addition, preparations are underway for reporting under the Sustainable Finance Disclosure Regulation (SFDR) in asset management.

More details are available on the Group's website, in the Investor Relations section.