S&P reaffirms high “A” credit ratings with a stable medium-term outlook
Following its regular annual revision on 13 September 2021, S&P Global Ratings (hereinafter: S&P or the agency) reaffirmed the “A” Long-Term 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.
Strong half-year results of Triglav Group, annual profit guidance at H1 2021 confirmed
PROFITABLE OPERATIONS. Triglav Group earned a consolidated profit of EUR 56.2 million before tax in the first half of 2021, which is 39% more than in the same period last year and 35% more than in the year before that (in the corresponding period in the year before the COVID-19 pandemic). Profit from non-life insurance rose by 23% to EUR 42.6 million, while profit from life and pension insurance and health insurance amounted to EUR 5.0 million and EUR 5.2 million respectively. The operating profit of the Group's non-insurance members reached EUR 3.5 million. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: “Triglav Group is focused on the set strategic guidelines and, as a team of over 5,300 employees, we are strongly committed to our sustainable orientation. We are satisfied with the results achieved in the first half of the year. The underwriting results are very good and the management of clients’ assets is successful, while the result from the return on investment is lower, which is expected due to the interest rate situation. Taking this into account and the business conditions anticipated until the end of the year, we estimate that we will achieve the planned annual profit of EUR 85–95 million.”
UNDERWRITING ACTIVITIES. Backed by its underwriting discipline, Triglav Group achieved a 9% increase in consolidated gross written premium compared to the same period last year (EUR 731.1 million). Premium growth was recorded in all markets and in all three insurance segments. In Slovenia it stood at 7% (4 percentage points above the market) and in markets outside Slovenia it was 16%. Non-life insurance premium increased by 10%, life and pension insurance premium by 9% and health insurance premium by 1% relative to the corresponding period last year.
Gross claims paid totalled EUR 347.6 million, up by 5% compared to the same period last year and by 4% compared to the year before that. Their growth resulted from portfolio growth in all insurance segments over the last few years and the claims paid for which adequate provisions were already made by the Group at the end of last year (especially claims related to the earthquakes in Croatia). In contrast to the first quarter, major CAT events were observed in the second quarter, with an estimated value of EUR 6 million. The Group’s combined ratio in non-life and health insurance was favourable, standing at 89.6% as a result of an improved claims ratio. As at 30 June 2021, the Group allocated EUR 3,221.3 million to gross insurance technical provisions, up by 6% relative to the 2020 year-end. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "When creating insurance technical provisions, we take into account the expected situation with due caution. Despite the growth in gross claims paid in the first six months of 2021, we observed a lower frequency of claims in specific insurance classes due to occasional restrictions related to the COVID-19 pandemic. We expect full normalisation of the business environment, thus in some insurance classes, such as health and motor vehicle insurance, we formed additional provisions, whereas in life insurance we formed fewer provisions than in the first half of last year.”
THE INVESTMENT PORTFOLIO AND A HIGHER VOLUME OF ASSETS UNDER MANAGEMENT. Also this year, low interest rates are affecting the rates of return on Triglav Group's extensive investment portfolio worth EUR 3,557.6 million, as bond investments comprise the majority of investments (71%). The Group did not make any significant changes to investing and the structure of the entire portfolio. This year's situation in the capital markets and net inflows had a positive effect on the management of clients' assets in mutual funds and discretionary mandate assets, which the Group carries out via Triglav Skladi. Assets reached EUR 1,392 million, an increase of 20% compared to the 2020 year-end.
SUSTAINABILITY. Triglav Group follows its adopted commitment to sustainability (ESG), which outlines its development guidelines and the integration of sustainability into its business model. The monitoring of sustainable risks and opportunities is included in asset management and in the range of insurance-investment products and services; in addition, the share of sustainable investment classes has been increasing in line with the European Green Deal’s goal of a climate neutral Europe. With respect to the insurance business, the Group provides products designed to actively manage risks related to climate change, the more efficient use of energy and its production from renewable sources and sustainable mobility.
More information available in public announcement, H1 2021 Report and investor presentation.
46th General Meeting of Shareholders of Zavarovalnica Triglav
Today, at the 46th General Meeting of Shareholders of Zavarovalnica Triglav d.d., the shareholders passed the proposal of the Management Board and the Supervisory Board that part of accumulated profit in the amount of EUR 38,649,751.60 be used for dividend payment. This represents 53% of the Company's consolidated net profit for 2020 and a 5% dividend yield. The dividend of EUR 1.70 gross per share will be paid to the shareholders appearing in the share register as at 9 June 2021.
Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: “I thank the shareholders for their trust. We are aware of the importance of a dividend payout for our shareholders, and we aim to implement a sustainable and attractive dividend policy as planned. In deciding on the use of accumulated profit this year, the General Meeting of Shareholders considered the proposal of the Management Board and the Supervisory Board, which is in line with the dividend policy and which we also justified to the regulator based on stress tests. These show that Triglav Group will maintain its financial stability in the persisting situation of great uncertainty despite paying out a dividend in said amount.”
The shareholders also took note of the Annual Report of Triglav Group and Zavarovalnica Triglav for 2020, granted a discharge to both the Management Board and the Supervisory Board of Zavarovalnica Triglav, and approved the proposed amendments to the Company’s articles of association as a result of amended legislation and some substantive amendments. The existing member Andrej Andoljšek and the new members Tomaž Benčina, Branko Bračko, Jure Valjavec and Peter Kavčič were appointed members of the Supervisory Board.
Commitment to Sustainability (ESG)
By pursuing its mission to build a safer future, Triglav Group is realising its sustainability goals. As at the 2020 year-end, the Group’s sustainability efforts were upgraded by adopting a formal document entitled “The Triglav Group’s commitment to sustainability”, which comprehensively sets out the directions of the Group’s development in the environmental, social and governance areas (ESG).
Triglav Group 2021 plan
In view of the selected probable scenario of business conditions in 2021, Triglav Group plans to increase its consolidated gross written premium to EUR 1.2–1.3 billion and its profit before tax to EUR 85–95 million. The Group’s combined ratio is planned at below 95%, which is in the lower (favourable) end of the range of its average target strategic value of around 95%.
More information available in public announcement and plan.