Slovenia domiciled reinsurance firm Sava Re has grown its operating revenue by 16.6% over the first half of 2020, due to expansion of its freedom of services (FoS) business and growth in reinsurance business.
During H1, the Sava Insurance Group generated almost €314.2 million in operating revenue (51.5% of the original full-year target) and a net profit of €32.2 million (71.5% of its annual target).
These results were also supported by one-off income of €6.8 million relating to the excess of the fair value of the net assets acquired over the cost of the investment in Vita, which the company acquired earlier this year.
Through this acquisition, Sava Re doubled its market share in the Slovenian life insurance market.
Without the addition of Vita, the group’s net profit would total €24.5 million, up 8.4% year on year, and 54.4% of the original full-year 2020 target.
Growth was, however, offset by a slump in economic activity due to the COVID-19 pandemic, which affected performance in most operating segments of the Sava Insurance Group.
The half-year non-life gross premiums written in Slovenia, excluding FoS business and non-life business of Vita, grew by 4% year on year, whereas Slovenian life business, in which some maturities of existing policies were anticipated, saw a 4% drop in premiums.
There was also a 2% drop in the group’s non-Slovenian non-life premiums and operating revenues of assistance business also saw a decline.
Additionally, COVID-19 had a major impact on the financial markets, eroding the value of assets under management in pension companies and in the fund management company.
The firm’s net expense ratio improved by 1 percentage point year-on-year, mainly due to the better expense ratio for reinsurance operations, the integration of Vita, and cost-cutting measures taken to ease the strain of the pandemic.
Profitability improved as the result of both a better expense ratio and a more favourable claims experience in Slovenia thanks to a lower loss rate in motor business.
