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Triglav Group Investor Presentation

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Insurance Supervision Agency’s Call

On 31 March 2020, the Insurance Supervision Agency called upon the insurance companies to suspend the payout of dividends from accumulated profit until 1 October 2020 and not to undertake any irrevocable commitment to pay out dividends. In respect thereof, the Management Board and the Supervisory Board of Zavarovalnica Triglav will propose to the regular annual General Meeting of Shareholders of Zavarovalnica Triglav that accumulated profit, which amounted to EUR 60,543,475 as at 31 December 2019, remain undistributed.
 

The Company is not changing its dividend policy, which in a balanced way seeks to ensure the financial stability of Triglav Group, implement its growth and development strategy, and pay out attractive dividends to its shareholders. However, the Company understands the call of the regulator, which is responsible for the financial stability of the Slovene insurance sector, especially in a situation of great uncertainty caused by the pandemic. The call takes into account the recommendations and actions of EU regulators and authorities (EIOPA and IAIS) to ensure the solvency and capital adequacy of insurance companies in the EU.
 

Business Operations during the Coronavirus Epidemic

President of the Management Board Andrej Slapar: “Our Group has faced this year’s overall challenging conditions financially sound, as confirmed by good results in 2019. Our mission is to create a secure future for all our stakeholders; thus, in the face of the epidemic, we have taken priority measures to protect the health of our employees, clients, partners and other stakeholders. Business continues as usual; in providing our services, we use solutions that we have implemented throughout recent years in strategic development processes, particularly the introduction of an omnichannel sales approach to clients and digital solutions for remote and paperless operations. The implementation of our strategy, to which we remain committed, will be constantly adapted to the respective business conditions. Risks are carefully and comprehensively managed during the current epidemic and financial market conditions, while the impact of the crisis on this year’s business volume and results will depend on its duration, among other things.” More information available in announcement. and presentation for investors.
 

Triglav Posts Good Results for 2019

At its session held on 30 March 2020, the Supervisory Board of Zavarovalnica Triglav approved the audited Annual Report of Triglav Group and the parent company for 2019. The Group, which has a high credit rating of “A”, maintains financial stability and a strong capital base in its 120th year in business. Last year, it performed well, generating EUR 100.9 million in profit before tax (index 104), 10.9% return on equity and EUR 1,184 million in written premium (index 111). The favourable results were driven by growth in business volume, underwriting discipline and higher rates of return on investment. Total written premium was 11% higher compared to the previous year (EUR 1,184.2 million), and premium growth was achieved in all three insurance segments and in all markets. The performance of the claims segment in 2019 was as expected. The combined ratio of the Group remained at favourable 91.5%. By pursuing the goal of cost-effectiveness, the Group reduced the proportion of insurance business operating expenses in gross written premium by 1.3 percentage point to 23.2% in 2019.  With its eleven insurance companies, the Group holds a dominant position in the Adria region; furthermore, it became the leading Slovene mutual fund manager at the end of 2019. The volume of assets under management in mutual funds rose by 68% to EUR 1 billion. The Group comprehensively manages risks, maintains conservative and stable reinsurance protection, and prudently manages provisions and capital. The Group's capital adequacy as at the 2019 year-end increased by 7 percentage points to 223% over the previous year. Its target range set by the Group’s capital management policy in accordance with Solvency II methodology is between 200% and 250%. The Group is well prepared to face the difficult economic situation caused by the epidemic both at global and regional levels.  More information available in 2019 annual report and investor presentation .

 

Triglav Group Remains Financially Stable

Triglav Group’s capital adequacy was 223% as at the 2019 year-end (compared with 216% in 2018) and was therefore within the target range in accordance with Triglav Group's capital management policy.
 

The Group's risk profile as at the 2019 year-end shows that the Group reduced its exposure to market risks last year (by 3 percentage points to 32%), as well as maintained and strengthened its underwriting discipline with respect to the underwriting risks, which represented as much as 49% of the risk profile. As part of a somewhat conservative investment policy and active capital management, the Group improved the credit quality of bond investments in its investment portfolio (increasing high quality government bonds and reducing corporate bonds) and extended the duration of the investment portfolio in order to match it to the duration of its liabilities as much as possible. By applying such management approach, the Group reduced interest rate risks and spread risks, to which only assets are exposed, as liabilities are valued based on the risk-free interest rate term structure.
 

In the context of the regular own risk and solvency assessment (ORSA) process, the Group conducted stress scenarios, i.e. sensitivity tests, in 2019 and took their findings into account when determining existing and future capital needs. The stress tests tested the sensitivity of capital adequacy to extreme changes in specific parameters, including the situation on the financial markets. According to the results, the Group would remain adequately capitalised even after stressful events.
 

In the current conditions, the Group comprehensively manages increased risks associated with the current situation. Due to the many unknowns, it is not yet possible to fully assess the effects of the pandemic. Nevertheless, the Group assesses that its insurance and investment portfolios are sufficiently resilient and that the capital position is appropriate to cope with the increased risks arising from the COVID-19 pandemic situation and the financial markets.
 

More information available in Solvency and financial condition report of Triglav Group for 2019 and investor presentation