Sava Re,d.d · LJSE:POSR
Sava Re,d.d — Sava Re — Investor Presentation (February 2018)
47 slides from Sava Re,d.d's investor presentation, Feb 7, 2018
Slide 1: Sava Re Group Presentation
SAVA RE GROUP PRESENTATION a 7. FEBRUAR 2018
Slide 2: Contents
CONTENTS • Overview • Sava Re Group Results • Estimate 2017 and Plan 2018 • Strategy 2017-2019 • 1-9/2017 Results and Investment portfolio
Slide 3: Contents
CONTENTS • Overview • Business profile • Historical performance • Management team • Shareholders and share trading • Capital adequacy • Dividend policy • Market indicators
Slide 4: Business Profile
BUSINESS PROFILE Sava Re Group GPW and market shares 2016 by country Breakdown of 2016 consolidated GPW by segments, Slovenia: € m and % total GPW: €335,0m ∑ = € 490,2m Serbia: Total market share: GPW: €16,1m 6,5 16,8% 55,1 Total market share: 2,2% 1% 1 composite ins. company 1 non-life & 1 life ins
Slide 5: Sava Re Group Structure at December 2017
SAVA RE GROUP STRUCTURE AT 31 DECEMBER 2017 Sava Re Insurance business Slovenia Insurance business International Other business 100,0 % 100,0 % Sava neživotno osiguranje 100,0 % Sava pokojninska družba Zavarovalnica Sava (C) Serbia (NL) Slovenia (PI) 100,0 % Sava životno osiguranje Illyria Hospital
Slide 6: Business Segments - Balance Between Value & Growth
BUSINESS SEGMENTS - BALANCE BETWEEN VALUE & GROWTH VALUE 1. Domestic insurance market (69% GPW) VALUE GROWTH W Balkan Reinsurance insurance 2. (19% GPW) market 3. (12% GPW) Sava Re Group has diversification benefits coming from three segments: Non-Life, Reinsurance, Life and from the geographical sp
Slide 7: Equity Story Full Outline
EQUITY STORY FULL OUTLINE 1 Strong #2 market position in the region as demonstrated by the market shares • Slovenia: 17% • Adria region: 9% 7 Experienced management with clear vision and 2 Unique positioning to capture expected growth measurable business objectives in-place of Western Balkan insuran
Slide 8: Sava Re History - Consolidated Gross Premium Written Development
SAVA RE HISTORY - CONSOLIDATED GROSS PREMIUM WRITTEN DEVELOPMENT Capital 1973-1997: increase • developing reinsurance business • growth on international reinsurance markets IPO • beginnings of stepping into insurance business >505m 1997-2017: growth through acquisitions and transformation from an re
Slide 9: Sava Re History - Consolidated Net Result & ROE
SAVA RE HISTORY – CONSOLIDATED NET RESULT & ROE 40,0 33,4 20,0% 15,4% 32,9 14,0% 30,5 >31,0 30,0 11,9% 12,0% 11,3% 15,0% 20,8 >10,0% 20,0 8,3% 7,4% 7,6% 15,6 10,0% 7,0% 12,9 11,8 6,2 3,5% 2,7% 10,0 5,7 5,5 4,1 5,0% 0,0 0,0% € million 2004 2005 2006 2007 -4,9% 2008 2009 2010 2011 2012 2013 2014 2015
Slide 10: The Management Board
THE MANAGEMENT BOARD Marko Jazbec Jošt Dolničar Srečko Čebron Polona Pirš Zupančič Chairman Member Member Member • Marko Jazbec took up the leadership of • Jošt Dolničar has been with Sava • Srečko Čebron has been a Member of the • Polona Pirš Zupančič became a member of Sava Re in May 2017. He has
Slide 11: Shareholders and Share Trading
SHAREHOLDERS AND SHARE TRADING (€ million) 30/9/2016 Book value per share on 30/9/2017 Share capital 71,9 Market capitalization 272,1 19,83 € Trading Symbol Number of shares POSR 17.219.662 3Q 2017/3Q 2016: up +3,8 % Number of treasury shares 1.721.966 Number of shareholders*** 4.088 Movement of POS
Slide 12: Capital Adequacy
CAPITAL ADEQUACY Overcapitalisation Additional engagement / (over 230 %) return of capital Appropriate As at 31 December 2016 capitalisation (€ million) Potential reallocation of (audited) (200 % – 230 %) capital Eligible own funds 423,4 Target capitalisation Optimisation of the investment and under
Slide 13: Dividend Policy
DIVIDEND POLICY Sava Re aims at generating a 10 % growth in dividends over the 2017–2019 period for its shareholders, but no more than 40 % of the net profit of the Sava Re Group. In preparing its dividend proposal, the company will consider: • the estimated surplus of eligible own funds over the so
Slide 14: Markets Indicators
MARKETS INDICATORS Insurance penetration 2.500 5,0% 6,0% 2.000 5,0% 4,0% 1.500 € million 2,6% 2,6% 2,0% 3,0% 1.000 1.991 1,5% 1,4% 2,0% 500 1.168 723 1,0% 80 142 84 0 0,0% Slovenia Croatia Montenegro Serbia Macedonia Kosovo GPW 2016 GPW/GDP 2016 Insurance density (GPW per capita) 941 948 1.000 EUR 5
Slide 15: Markets Indicators
MARKETS INDICATORS Insurance premiums +1% 2.500 1.975 1.991 +2% 2.000 € million 1.500 1.146 1.168 +8% +5% +4% +4% 1.000 671 723 500 135 142 81 84 77 80 0 Slovenia Croatia Serbia Macedonia Kosovo Montenegro 2015 2016 Breakdown of insurance premiums 2016 100,0% 26,0% 14,8% 3,1% 17,1% 80,0% 27,2% 33,4%
Slide 16: Sava Re Group Results
CONTENTS • Sava Re Group Results
Slide 17: Slovenian Insurance Business - Non-Life
SLOVENIAN INSURANCE BUSINESS 1. VALUE BUSINESS - NON-LIFE (NON CONSOLIDATED) Split of GPW 2016 by class of insurance Split of GPW 2016 by sales channel 1,9% 0,1% Land vehicles casco Own sales force and tied agents 14,1% 0,4% 40,0% Non-exclusive agencies 29,6% Motor liability 8,1% 8,6% Exclusive agen
Slide 18: Slovenian Insurance Business - Life
SLOVENIAN INSURANCE BUSINESS 1. VALUE BUSINESS - LIFE (NON CONSOLIDATED) Split of GPW 2016 by class of insurance Split of GPW 2016 by sales channel 0,3% Exclusive agencies Endowment 3,1% Own sales force and tied agents 39,8% 17,8% 55,4% € € Unit-linked insurance Non-exclusive agencies 79,0m 79,0m 60
Slide 19: Sava Reinsurance Company
SAVA REINSURANCE COMPANY 2. VALUE BUSINESS (NON CONSOLIDATED) Gross premium written and ROE Combined ratio (excluding FX differences) 200,0 14,0% 120,0% 12,3% 98,1% 96,7% 93,6% 12,0% 100,0% 88,9% 92,4% 82,7% 85,6% 88,3% 150,0 8,9% 10,0% 78,6% 80,0% 6,2% 8,0% 100,0 60,0% 6,0% 152,0 147,4 131,3 4,0% 4
Slide 20: Western Balkan Insurance Business - Non-Life
WESTERN BALKAN INSURANCE BUSINESS 3. GROWTH POTENTIAL - NON-LIFE (NON CONSOLIDATED) Split of GPW 2016 by class of insurance Split of GPW 2016 by sales channel 0,1% Own sales force and tied agents 11,2% Motor liability 4,7% 1,7% 6,8% Exclusive agencies Land vehicles casco 6,1% 3,0% Brokers € Fire and
Slide 21: Western Balkan Insurance Business - Life
WESTERN BALKAN INSURANCE BUSINESS 3. GROWTH POTENTIAL - LIFE (NON CONSOLIDATED) Split of GPW 2016 by class of insurance Split of GPW 2016 by sales channel 0,1% Own sales force and tied agents 0,3% 2,0% 9,7% Banks Endowment € 6,5m € 6,5m Non-exclusive agencies 15,3% 72,9% Unit-linked insurance Broker
Slide 22: Estimate 2017 and Plan 2018
CONTENTS • Estimate 2017 and Plan 2018
Slide 23: Plan 2018 - Main Targets (Consolidated)
PLAN 2018 - MAIN TARGETS (CONSOLIDATED) 2016 Plan 2017 Estimate 2017** Plan 2018 Gross premiums written € 490,2 million € 494 million > € 505 million > € 520 million Net combined ratio* 94,6% 94,6 % >95% 94,0%-94,5% (reinsurance + non-life) Net incurred loss ratio* 58,2% 59,4% >60% 59,4%-59,9% (rein
Slide 24: Link to the Estimate 2017 and Plan 2018 Presentation
LINK TO THE ESTIMATE 2017 AND PLAN 2018 PRESENTATION (CLICK) a
Slide 25: Strategy 2017-2019
CONTENTS • Strategy 2017-2019
Slide 26: #Never Alone
# NEVER ALONE WE ARE CREATING A MODERN, DIGITAL, SOCIALLY- AND SUSTAINABLE-ORIENTED INSURANCE GROUP.
Slide 27: Scope of Strategy on the Group Level
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT INSURANCE REINSURANCE ASSET CAPITAL GROWTH OPERATIONS OPERATIONS MANAGEMENT AND USE BUSINESS SUPPORT ACTIVITIES Long-term focus 27 STRATEGY 2017-2019 7. februar 2018
Slide 28: Chief Directions for the Period 2017-2019
CHIEF DIRECTIONS FOR THE PERIOD 2017–2019 1. Digitalisation and technological modernisation of operations to place the client in the centre 2. Growth through acquisitions 3. Seeking opportunities in environmental/sustainable-oriented investment projects 4. Closing the gap between intrinsic value and
Slide 29: Key Targets
KEY TARGETS AS PER RISK STRATEGY Return on equity: 10,4% (+/-0,5 p.p.) Solvency ratio: between 170% and 230% (between the lower limit of the optimal range and the upper limit of the adequate range of capital) Combined ratio, non-life: < 95% Combined ratio, reinsurance < 93% Profitability of new life
Slide 30: Synergistic Effects in the EU
SYNERGISTIC EFFECTS IN THE EU Realisation of synergies by year 5,00 4,7 4,00 Savings in 2019 3,0 and beyond 3,00 each year: 2,0 2,0 2,0 > € 6 million 2,00 1,0 1,00 0,00 2017 2018 2019 -1,00 -0,6 -0,7 -0,8 -2,00 € million cost synergy product synergy one-off expenses for the realisation of synergies
Slide 31: Link to the Presentation on Strategy 2017-2019
LINK TO THE PRESENTATION ON STRATEGY 2017-2019 (CLICK) a
Slide 32: 1-9/2017 Results and Investment Portfolio
CONTENTS • 1-9/2017 Results and Investment portfolio
Slide 33: Results Sava Re Group
RESULTS SAVA RE GROUP Change € million 1-9/2016 1-9/2017 Plan 2017 Actual/plan 2017/2016 Gross premiums written (€ million) 390,5 409,2 494,3 4,8% 82,8% Net expense ratio 32,4% 32,0% 32,6% -0,4 p.p. -0,6 p.p. Net combined ratio* 96,3% 94,5% 94,6% -1,8 p.p. -0,1 p.p. Net combined ratio* (excluding fo
Slide 34: Structure of the Investment Portfolio
STRUCTURE OF THE INVESTMENT PORTFOLIO € 1.059,7m € 1.073,3m 100% 0,8% 0,6% 3,2% 1,6% 1,6% 90% 1,6% 80% 34,8% 37,2% 70% 60% 0,7% 1,5% 50% 40% 30% 56,2% 49,6% 20% 10% 2,3% 2,2% 0% 2,0% 4,2% dec. 16 sept. 17 Cash and cash equivalents Deposits Government bonds Investment property Corporate bonds Shares
Slide 35: Sava Re Group Exposure by Region
SAVA RE GROUP EXPOSURE BY REGION Structural shift sept.17/dec.16 in 8,3% 11,6% percentage points 8,9% 9,1% Other 3,3 51,7% 54,1% Non-EU members 0,2 EU members 2,4 31,1% 25,3% Slovenia -5,8 dec. 16 sept. 17 -6,0 -4,0 -2,0 0,0 2,0 4,0 Slovenia EU members Non-EU members Other 35 1-9/2017 RESULTS AND IN
Slide 36: Sava Re Group Exposure to Slovenia
SAVA RE GROUP EXPOSURE TO SLOVENIA (€ million) 31/12/2016 30/09/2017 Change Type of investment Amount As % of total Amount As % of total Deposits 3,1 0,3% 2,6 0,2% -0,1% Government bonds 256,8 24,2% 193,4 18,0% -6,2% Corporate bonds 34,2 3,2% 25,7 2,4% -0,8% Shares 16,3 1,5% 16,5 1,5% 0,0% Mutual fu
Slide 37: Sava Re Group Exposure by Industry
SAVA RE GROUP EXPOSURE BY INDUSTRY • The reduced exposure to government securities is largely due to disposals and maturities of government securities, and the Company's tactical decision to sell part of the bond investments owing to the favourable market conditions. • Increased exposure to the fina
Slide 38: Sava Re Group Rating Profile
SAVA RE GROUP RATING PROFILE Maintaining a good rating profile in 1–9/2017 • A share of 84,0 % of fixed-income investments is investment grade. • The share of 'A'-rated investments declined because of maturities and disposals; reinvestments have been mostly in 'AA' and 'BBB'-rated assets. 6,5% 6,9%
Slide 39: Investment Income by Type
INVESTMENT INCOME BY TYPE Absolute change (€ million) 1-9/2016 1-9/2017 2017-2016 Income Interest income 16,0 14,1 -1,9 Change in fair value and losses on disposal of FVPL assets 0,7 0,1 -0,6 Gains on disposal of other IFRS asset categories 1,7 2,0 0,3 Income from associate companies 0,0 0,0 0,0 Inc
Slide 40: Investment Expenses by Type
INVESTMENT EXPENSES BY TYPE Absolute change (€ million) 1-9/2016 1-9/2017 2017-2016 Expenses Interest expenses 0,6 0,7 0,1 Change in fair value and losses on disposal of FVPL assets 0,5 0,1 -0,5 Losses on disposal of other IFRS asset categories 0,4 0,4 0,0 Expenses for associate companies 0,0 0,0 0,
Slide 41: Net Investment Income and Return on the Investment Portfolio
NET INV. INCOME OF AND RETURN ON THE INVESTMENT PORTFOLIO 2015 2016 1-9/2016 1-9/2017 Absolute change Net investment income relating to financial 26,6 24,6 17,65 11,20 -6,45 investments Net investment income relating to the investment 0,4 0,0 0,15 0,18 0,03 property Net investment income relating to
Slide 42: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (€) 31 Dec 2015 31 Dec 2016 30 Sep 2017 ASSETS 1.607.281.060 1.671.189.179 1.718.078.266 Intangible assets 30.465.315 25.508.583 23.305.746 Property and equipment 47.217.311 51.887.127 45.821.501 Deferred tax assets 2.371.857 2.326.063 2.020.072 Investmen
Slide 43: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT (€) 2015 2016 1-9/2017 Net earned premiums 447.559.605 458.101.526 350.613.615 Income from investments in associates 942.560 0 0 Investment income 39.577.855 33.136.242 20.832.708 Net unrealised gains on investments of life insurance policyholders who bear the 26.631.78
Slide 44: Statement of Financial Position - Sava Re, d.d.
STATEMENT OF FINANCIAL POSITION – SAVA RE, D.D. (€) 31 Dec 2015 31 Dec 2016 30 Sep 2017 ASSETS 570.886.710 568.147.764 586.540.003 Intangible assets 666.490 832.567 817.433 Property and equipment 2.455.343 7.753.202 2.460.034 Deferred tax assets 2.285.448 1.373.436 1.080.452 Investment property 2.99
Slide 45: Income Statement - Sava Re, d.d.
INCOME STATEMENT – SAVA RE, D.D. (€) 2015 2016 1-9/2017 Net earned premiums 125.479.297 133.428.875 95.139.764 Income from investments in subsidiaries and associates 13.004.219 26.308.516 26.036.830 Investment income 18.675.409 12.880.066 6.413.266 Other technical income 9.809.545 9.263.194 4.217.27
Slide 46: Link to the 1-9/2017 Results Report
LINK TO THE 1-9/2017 RESULTS REPORT (CLICK) a
Slide 47: Thank You for Your Attention!
THANK YOU FOR YOUR ATTENTION! a