Insurer group Sava ups net profit 12.3% to EUR 56.4m last year

Ljubljana – The insurance group Sava generated EUR 674.9 million in operating revenue last year, up 15.5% compared to 2019, while net profit increased by 12.3% to EUR 56.4 million, which was also above plans, show the unaudited results announced on Friday.

The report says that the group generated an exceptional EUR 56.4 million in net profit “despite significantly increased risk from potential additional negative impacts of the pandemic on the group’s operations”.

It adds that the increase was driven by good results in the life and non-life insurance segments, partly offset by the challenging claims experience in international reinsurance business.

The higher profitability was also driven by the acquisition of the life insurer Vita, consolidated in the group accounts as of 31 May 2020. Vita generated EUR 9.9 million in one-off income.

Pre-tax profit was up by 11.5% to EUR 67.7 million, including EUR 41 million from reinsurance and non-life insurance.

In 2020, the group collected EUR 679.7 million in gross insurance premiums, an increase of 13.6% over the year before, mostly owing to a 53% growth in gross premiums from life insurance in Slovenia.

The group’s return on equity last year was 13.3%, which is 1.3 percentage points above the target return set in the strategy for 2020-2022.

While the group achieved a record result, the core company, the reinsurer Sava Re recorded an increase in damage payouts related to the Covid-19 pandemic.

It did not pay out dividends last year and it did not receive any from the subsidiaries, as supervisors proposed that profits be retained. For this reason, the company generated a EUR 11 million loss in 2020, CEO Marko Jazbec told the press.

He added that the company had to create additional provisions for certain reinsurance contracts, in particular in the UK and South Africa. “The structure of last year’s group profit is specific due to the impact of Covid-19 on international markets.”

Gross damages in the property segment in Slovenia were down significantly last year, mostly on the account of car insurance. On the other hand, payouts in the reinsurance segment related to Covid-19 affected the bottom line by almost EUR 11 million.

For 2021, the Sava group plans revenue to the tune of EUR 685 million, more than EUR 53 million in net profit, return on equity above 11.5% and more than EUR 685 million in gross insurance premiums, Jazbec said.

A relatively moderate and low growth is expected in the reinsurance segment, while a drop is expected in the property insurance segment in Slovenia.

A high growth is expected in life insurance in Slovenia as the operation of Vita will be included in the books for the entire year, while organic growth in production is also expected, Jazbec concluded.