Ljubljana - The insurance group Sava saw its half-year net profit reduced by a third year-on-year to EUR 28.9 million as operating revenue remained level at EUR 364.2 million. The company said the drop was mainly due the frequency of vehicle insurance claims returning to pre-pandemic levels.

In a regulatory filing posted with the Ljubljana Stock Exchange on Wednesday, the company also said that high inflation had pushed up the cost of settling claims, and provisions for future claims. In addition, the group suffered large weather-related losses and other major claims.

However, it also noted that compared to 2019, the pre-pandemic and pre-inflation year, the half-year net profit rose by 28.2%.

The group's combined ratio of 92.3% remained within the target range, helped by the strong performance in the reinsurance segment, which improved its results by EUR 4.3 million in the second quarter, driven by higher premiums, favourable claims development and effective reinsurance protection.

The group wrote gross premiums of EUR 433 million in the first half of the year, which marks an increase of 4.5% on the same period a year ago. The most substantial growth was in the non-life segment, in Slovenia premiums rose by 4.9% and abroad by 16.3%.

The growth in gross premiums was mainly driven by the car insurance segment, where more policies were sold, and average premiums were higher. Gross premiums also strengthened in the reinsurance segment, up by 5.2%, with a full 16.8% increase in the non-proportional business.

The net expense ratio rose slightly to 28.5%, mainly due to higher acquisition costs for life insurance business, the payment of a cost-of-living bonus, IT costs and other price rises.

The investment portfolio totalled EUR 1.47 billion, generating an investment return of 1.4%. "The higher required yields in financial markets resulted in a reduced value of and return on the investment portfolio year-on-year," the release reads.