S&P reaffirms high “A” credit ratings with a stable medium-term outlook

Following its regular annual revision on 5 September 2022, S&P Global Ratings reaffirmed the “A” Credit Rating and Financial Strength Rating with a stable medium-term outlook of Triglav Group and thereby of its parent company and its subsidiary Pozavarovalnica Triglav Re. In its report, S&P again assessed the business risk profile of Triglav Group as strong and its financial risk profile as very strong.

The high ratings reflect the Group’s very strong capitalisation and its stable, strong earnings, supported by underwriting discipline, sound reinsurance protection and economies of scale and other advantages of its dominant market position in the region and Slovenia. The “A” credit rating exclusively reflects the Group's stand-alone credit risk profile.

More information available in public announcement and S&P full report.

H1 2022: Growth in business volume and stable business results despite a challenging economic situation

PROFIT BEFORE TAX. The Triglav Group generated profit before tax of EUR 57.5 million, up by 2% relative to last year. The majority of the profit, i.e. EUR 53.3 million, which stems from underwriting activities, rose by 9%. Profit from financial investments was negative (EUR –4.1 million), whereas profit from non-insurance operations grew to EUR 8.3 million (compared to EUR 3.5 million in H1 2021). Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: “In addition to the consequences of the COVID-19 pandemic, this year has been marked by a worsening macroeconomic situation with high growth in general inflation and an unfavourable situation in international financial markets. The Triglav Group was able to deal with the situation effectively thanks to its team of over 5,200 employees. The good half-year results confirm the robustness of our business model and the resilience of our underwriting activities and the Group’s solvency position in the face of a deteriorating economic situation. We estimate that 2022 annual profit will be within the initially planned range; however, it should be recognised that the risks related to the realisation of target annual profit have increased significantly due to negative influences from the business environment.”

UNDERWRITING ACTIVITIES. The Triglav Group’s total revenue increased by 11% to EUR 861.2 million year-on-year, of which gross written premium (EUR 797.2 million) rose by 9%. Written premium growth was recorded in all three insurance segments (the highest growth of 11% was achieved in non-life insurance) and in all insurance markets. The increased premium volume resulted in a 15% increase in gross claims paid (EUR 398.1 million), which increased following the end of last year’s pandemic-related restrictions, higher prices of materials and services and major CAT events that occurred mostly in the second quarter (an estimated EUR 21.6 million). The combined ratio in non-life and health insurance reached a favourable 89.5% (compared to 89.6% in H1 2021) primarily as a result of the improved expense ratio due to higher net premium income and lower expenses for bonuses and discounts.

Gross operating expenses increased by 11% to EUR 181.6 million compared to the year before. Insurance technical provisions amounted to EU 3,221.2 million as at 30 June 2022, up by 1% relative to 31 December 2021. Uroš Ivanc, Management Board Member of Zavarovalnica Triglav, said: “As always, we focused on cost-effectiveness. Due to the economic situation, certain costs increased, among them mainly acquisition costs, costs of materials and energy and depreciation due to investment in information technology. We continued with traditionally prudent and conservative reserving. In the first half of last year, due to the uncertainties related to the pandemic, we formed them particularly carefully in the non-life and health insurance segments, which – by returning to long-established provisioning practices this year – had a positive effect on growth in profit before tax from underwriting activities. In the life and pension insurance segment, due to this year’s rising interest rates, we released the part of provisions which were intended to cover future investment guarantees.”

INVESTMENT PORTFOLIO AND CLIENTS’ ASSETS UNDER MANAGEMENT. The unfavourable situation in the financial markets and the impairment of Russian bonds resulted in a negative return of EUR 3,267.5 million on the Triglav Group’s extensive portfolio (EUR –40.4 million). In the first half of the year, the Group did not significantly change the composition of its high-quality and globally diversified investment portfolio. In line with its strategic ambitions in sustainability, the Group increased the volume of sustainable fixed-income investments this year as well, i.e. by 8% to EUR 220.4 million, accounting for 10% of the bond portfolio (compared to 8% as at 31 December 2021).

With regard to the management of clients’ assets in mutual funds and discretionary mandate assets, management fee income increased due to net inflows (it is part of other income in the Triglav Group’s total revenue), whereas negative trends in the financial markets resulted in a 12% decrease in the value of clients’ assets under management relative to the 2021 year-end (EUR 1,360.5 million).

FINANCIAL POSITION. Through appropriate capital and risk management, the Triglav Group maintained a good capital position within the target range of 200–250%. Total equity amounted to EUR 739.9 million, down by 21% relative to 31 December 2021 as a result of the decrease in the fair value reserve due to the rise in interest rates and this year’s high dividend payout. Higher interest rates have a positive effect on the Group’s operations in the long run; however, their rapid growth reduces capital in the short term and increases risks affecting the guaranteed return in pension insurance. The parent company’s market capitalisation as at 30 June 2022 was EUR 813.9 million, down by 3% relative to 31 December 2021 (in the same period, the Ljubljana Stock Exchange index and the European insurance sector index declined by 11%).

More information available in public announcement, report in investor presentation.

The 47th General Meeting of Shareholders of Zavarovalnica Triglav

On 24 May 2022, at the 47th General Meeting of Shareholders of Zavarovalnica Triglav the shareholders passed the Management Board’s and the Supervisory Board’s proposal to allocate EUR 84.1 million for dividend payment or EUR 3.70 gross per share. This represents 74% of the Company’s consolidated net profit for 2021 and a 9% dividend yield. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: “I thank the shareholders for their trust. The Triglav Group is financially stable and achieves the set results, and we are pleased that on this basis we are able to pay an attractive dividend to the shareholders. The dividend is exceptionally higher, because in addition to the dividend policy it also takes into account the aspects and circumstances of the past two years.”

The General Meeting of Shareholders appointed the audit firm Deloitte revizija d.o.o., Ljubljana the auditor of Zavarovalnica Triglav for the 2022, 2023 and 2024 financial years.

More information available in Notice on the Resolutions of the 47th AGM.


Commitment to Sustainability (ESG)

Triglav Group defined its strategic sustainable ambitions to 2025, more information available here.
In 2022 Triglav continues to integrate sustainable development factors into its operations and participates in select international initiatives in the field of sustainable development and information. Triglav became a signatory to the United Nations Principles for Sustainable Insurance (UN PSI), joined the United Nations Environment Programme Finance Initiative (UNEP FI) and the Partnership for Carbon Accounting Financials (PCAF), and uses GRI and SASB sustainability standards in its reporting. For the second year in a row, Triglav has reported to CDP, an international non-profit organisation, with respect to climate change.

Triglav’s Capital Markets Day 2022

On 25 January 2022, Triglav Group hosted its Capital Markets Day 2022. At this virtual event Triglav’s management presented updated strategy till 2025 with insight into the development activities and ambitions. More information available in the presentation.

Revised strategy to 2025

With a revised strategy, the Group continues to carry out development activities with the aim of pursuing its digital transformation and developing service-oriented business models and ecosystems. The operations of the Triglav Group, the leading insurance-financial group in the Adria region, are planned to remain profitable and safe. In the strategy period, a 10% return on equity (ROE) is planned and in 2025 total revenue is projected to exceed EUR 1.6 billion. By being committed to business sustainability, the Group remains a development-oriented environment for its employees, connected with its partners, and a stable, safe and profitable investment for investors. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "We have started the 2022 financial year with a revised strategy to 2025. With it, we have set ambitious strategic guidelines and objectives, which have been upgraded in terms of development, thereby following our mission of building a safer future for all our stakeholders.” More information in Strategy of Triglav Group.

Reports and announcements

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Plan
Summary of Triglav Group business plan for 2022
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Calendar of presentations for investors