Impact assessment of supplemental health insurance in Slovenia on Triglav Group's operations

With the adoption of the Decree of the Government of the Republic of Slovenia on setting the maximum price of supplemental health insurance premium (hereinafter: the Decree) in April this year and in the face of uncertainty as to when this type of insurance will be abolished by law, the bases used by the Group in drawing up the 2023 business plan are changing. In the current situation in which the Decree is in effect, the Group supports the abolition of the existing supplemental health insurance system as soon as possible. Based on likely scenarios and in the wake of uncertainty, it is estimated that the Group's planned profit before tax for 2023 (initially planned between EUR 95 and 110 million) may decrease by around 25–40% due to the loss in the health insurance segment resulting from the Decree. The amount of supplemental health insurance loss increases with the duration of the Decree. The Group will take all the necessary steps to protect the interests of its policyholders, Company shareholders and other stakeholders, along with dialogue with the Slovenian Government and the Insurance Supervision Agency.

In accordance with the Ljubljana Stock Exchange Rules and the applicable legislation, ZAVAROVALNICA TRIGLAV d.d., Ljubljana is hereby publishing the following notice:

The Triglav Group published its 2023 business plan in November 2022, which was developed on the bases and assumptions known at that time. These have changed since then due to the adoption of the Decree of the Government of the Republic of Slovenia on setting the maximum price of supplemental health insurance premium of 14 April 2023. The Decree introduced the immediate regulation of supplemental health insurance prices, obliging the Group to continue implementing supplemental health insurance until it is abolished with the adoption of amendments to the Healthcare and Health Insurance Act. The Decree will be in force until the end of 2023, but it is expected that, even before its expiration on 1 September 2023, the aforementioned Act will be amended in such a way as to abolish the existing supplemental health insurance system. The Group supports the amendment of said Act to take place as soon as possible, because the premium amount, which is determined by the Decree, is not sufficient to cover supplemental health insurance claims. 

Based on the information available at this time, the Triglav Group has developed likely scenarios and assessed the impact of this situation on its operations and position in 2023. This does not yet include the effects of the adjustment of the Group's business model. In addition, the uncertainty surrounding the trend of costs and claims from supplemental health insurance was taken into account, as well as the fact that the provisions formed during the COVID-19 pandemic pursuant to the PKP5 Act will soon run out. In the event that supplemental health insurance will be abolished by law as of 1 September 2023, the Group assesses that the loss from health insurance will manifest as a reduction in this year's profit before tax (planned between EUR 95 and 110 million) by around 25%. If supplemental health insurance is not abolished by law this year and the Decree continues to apply until the end of 2023, it is likely that due to the loss from health insurance the decrease in profit for 2023 will be higher and stand at around 40%.

The Group will take all the necessary steps to protect the interests of its policyholders, Company shareholders and other stakeholders, along with dialogue with the Slovenian Government and the Insurance Supervision Agency. The Triglav Group, the largest insurance and financial group in the Adria region, remains financially strong with strong capitalisation. Moreover, the Group is carefully monitoring the situation in the business environment and its impact on the Group's operations and position, and it will continue to transparently provide information on the situation as it develops.

This information will be published on the website of Zavarovalnica Triglav d.d. at www.triglav.eu as of 9 May 2023 and will remain available on the Company’s public website for a period of at least five years.