9M 2022 and Outlook: Increased business volume, profit before tax at last year’s level

PROFIT BEFORE TAX. In the first nine months of 2022, the Triglav Group posted a profit before tax of EUR 89.2 million, down by 3% relative to the corresponding period last year. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: “At Triglav, we also feel the impact of the deteriorating environment with high inflation growth and the unfavourable situation in the international financial markets, which primarily affects our claims segment, expenses and investment returns. However, we are effectively dealing with the challenging situation, thanks to a team of more than 5,200 employees. Our robust business model allowed us to maintain our financial strength with capital adequacy within the target range, increase the business volume and generate a profit before tax close to that earned in the same period last year.”

The Group estimates that its target annual profit will be achieved, but given the current situation, there are risks related to the realisation of target annual profit within the originally planned range. “Negative factors from the business environment are significantly strengthening, and their further development by the end of the year cannot be assessed with an adequate degree of reliability,” stressed Andrej Slapar.

UNDERWRITING ACTIVITIES. The Triglav Group’s total revenue increased by 10% to EUR 1,241.1 million compared to the same period last year, while the volume of gross written premium rose by 9% to EUR 1,147.7 million. Premium increased in all three insurance segments and in all insurance markets. Premium growth in Slovenia was 6%, which is 1 percentage point above the market growth rate, outside of Slovenia in the markets of the Adria region it reached 12% and in international markets it stood at 19%. Other insurance income grew by 21% to EUR 46.1 million and the Group’s other income increased by 35% to EUR 47.3 million, which primarily included income from asset management and the sale of investment property.

The claims experience was more intense than in the comparable period last year. Gross claims paid rose by 16% to EUR 604.0 million. They were not only influenced by the increased volume of the insurance portfolio, but also by the end of restrictions due to the pandemic, higher prices of materials and services due to inflation and the increased frequency of major CAT events. They are estimated at EUR 29.4 million, with the majority (EUR 21.1 million) being claims in Slovenia due to hailstorms. Nevertheless, the combined ratio in non-life and health insurance was very favourable, standing at 89.5%, and similar to the same period last year, which is a result of the favourable development of claims provisions created in past periods, especially prudently during the pandemic.

Gross operating expenses increased by 10% to EUR 269.1 million relative to the corresponding period last year. Uroš Ivanc, a member of Management Board of Zavarovalnica Triglav, explained: “So far, the growth of expenses has been equal to the growth of total revenue, which allowed us to effectively keep the expense ratios at a level comparable to last year.” Expenses increased mainly due to inflation (e.g. costs of materials and services), increased business volume (e.g. acquisition costs due to a higher number of insurance contracts) and the implementation of strategic activities (e.g. depreciation due to investment in information technology).

Insurance technical provisions amounted to EUR 3,199.9 million as at 30 September 2022, similar as at 31 December 2021. “We are appropriately coordinating reserving with the dynamics of business and the nature of default risks. This year’s favourable development of claims provisions created in past years has effectively compensated for the growth of claims and expenses which primarily resulted from the higher activity of the population and the economy, increased inflation rate and other impacts from the environment,” said Uroš Ivanc.

INVESTMENT PORTFOLIO AND ASSETS UNDER MANAGEMENT. The Triglav Group’s total investment portfolio, including investment property and investments in associates, decreased by 11% to EUR 3,266.9 million relative to the 2021 year-end due to the situation on the financial markets. Portfolio returns were negative. The portfolio’s conservative structure did not change significantly, and the emphasis remains on high-quality and globally diversified investments. The volume of clients’ assets managed in mutual funds and discretionary mandate assets decreased also by 11% to EUR 1,362.4 million.

OUTLOOK. Expectations for the coming year are marked by a very high degree of uncertainty in the business environment, which stems from the further development of the geopolitical situation, the situation in the energy markets, the macroeconomic situation and the epidemic. In 2023, the Triglav Group anticipates the economic situation to become even more challenging, in which it will continue to operate safely and profitably.

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


AM Best affirms the credit rating of “A” with a stable medium-term outlook

Following its regular annual revision, the AM Best credit rating agency re-affirmed the Financial Strength Rating of “A” (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of both Zavarovalnica Triglav d.d. and Pozavarovalnica Triglav Re d.d. Both credit ratings have a stable medium-term outlook, which reflects the agency's expectations that the Triglav Group will maintain strong operating performance in the medium term, a very strong balance sheet and its dominant market position in Slovenia and the broader region.

AM Best rated all individual elements of the overall credit rating as high as the year before and substantiated them in a similar way.

More information available in public announcement and AM Best press Release.


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.

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.

 

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Notification of transactions in ZVTG shares
29/11/2022
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