In the reporting period, as expected, the Triglav Group operated under challenging market conditions and in a record-low interest rate environment on international financial markets. The Group booked approximately the same amount of gross written premium from insurance and co-insurance contracts as in the same period last year (EUR 507 million). Taking into account the sale of its Czech subsidiary in 2015, the Triglav Group recorded an almost 2% premium growth in the first six months of 2016. In Slovenia, the insurance premium of Zavarovalnica Triglav was 1% lower compared to the respective period of 2015, whilst that of Triglav, Zdravstvena zavarovalnica and that of Skupna pokojninska družba increased by 3% and 4% respectively. In other five countries of the Adria region, all insurance subsidiaries of the Group recorded premium growth. The Triglav Group (93.4%) and the parent company (87.6%) improved their combined ratio, which clearly shows good performance of the core business.
Compared to the corresponding period of 2015, gross claims paid by the Triglav Group were up by 1% to EUR 301.1 million, while those of the parent company grew by 2%, totalling EUR 198.1 million. In 2016, the Group's performance was affected by some mass loss events, of which the largest damage was caused in Slovenia and Croatia due to frost.
By consistently implementing its business policy measures, the Triglav Group ended the first six months of 2016 with a net profit of EUR 34.2 million (the parent company: EUR 29.6 million) and generated a profit before tax of EUR 43.2 million (the parent company: EUR 36.8 million). Low returns on investments and record-low interest rate environment on financial markets had a material impact on the Group’s performance and business results. In the reporting period, the Group’s return on investment was 39% lower than in the preceding year, whilst that of the parent company was 20% lower.
Andrej Slapar, President of the Management Board of Zavarovalnica Triglav d.d., said: “In line with its strategic guidelines, the Triglav Group has consistently maintained its financial stability, high capital adequacy and profitability in 2016, as confirmed by high credit ratings by two credit rating agencies and especially by S&P Global Ratings, the established credit rating agency, which raised the Triglav Group's credit rating by one notch from “A–” to “A”. This year we have operated under the conditions of record-low, even negative interest rates in international financial markets. In the first half of 2016, they were affected by the uncertain situation, weak economic growth worldwide, low inflationary expectations and further uncertainty connected to Brexit. A rapid improvement in the situation on financial markets, and consequently a major change in the return on our investments, is not expected. In line with its strategic guideline, the Group will remain focused on the insurance business, which recorded solid results in H1 2016. Taking into account the business conditions anticipated until the end of the year, it is estimated that the Group’s annual profit before tax will be within the planned range.”