AMONG GOOD PEOPLE

ANNUAL REPORT

of the Sava Insurance Group and Sava Re d.d. for

September

AM BEST

September

ANNUAL REPORT 2022 BUSINESS REPORT SUSTAINABILITY REPORT FINANCIAL STATEMENTS WITH NOTES APPENDICES

ANNUAL REPORT

Insurance is about connecting. Connecting individuals and companies to ensure security and quality of life, putting them first and making services more accessible to them through digital tools. Through reinsurance, we connect insurance companies in Slovenia and abroad. Many of them have placed their trust in us for decades.

Declaration of the management board

To the best of our knowledge and in accordance with the International Financial Reporting Standards, the consolidated and separate financial statements give a true and fair view of the financial position and profit or loss of the Sava Insurance Group and Sava Re d.d. The business report gives a fair view of the development and performance of the Group and the Company, and their financial position, including a description of the principal risks to which the consolidated companies are exposed.

Ljubljana, 15 March 2023

Chairman of the Management Board

Polona Pirš Zupančič, Member of the Management Board

Peter Skvarča, Member of the Management Board

Key figures

Sava Insurance Group			Sava Insurance Group
EUR, except percentages	2022	2021	EUR, except percentages	2022	2021
Total of all operating segments			Life
Operating revenue	753,642,004	732,714,051	Gross premiums written	172,175,270	178,707,830
Year-on-year change	2.9%	7.6%	Year-on-year change	-3.7%	37.2%
Profit or loss, net of tax	68,242,586	76,167,178	Net expense ratio	22.4%	21.4%
Year-on-year change	-10.4%	35.1%	Profit or loss before tax	18,530,692	16,761,225
Comprehensive income	-68,768,647	57,585,415	Year-on-year change	10.6%	-38.6%
Year-on-year change	-219.4%	-24.0%	Total of all operating segments	31 December 2022	31 December 2021
Return on revenue*	9.1%	10.4%	Total assets	2,534,002,659	2,658,322,359
Net expense ratio, including operating revenue/**	29.3%	29.0%	Change on 31 December of prior year	-4.7%	7.7%
Return on equity	14.9%	15.8%	Shareholders' equity	411,951,369	504,077,018
Return on equity, excluding the fair value reserve	13.5%	16.9%	Change on 31 December of prior year	-18.3%	9.5%
Earnings or loss per share	4.39	4.91	Net technical provisions	1,683,693,589	1,703,916,399
Return on the investment portfolio/*	1.3%	1.8%	Change on 31 December of prior year	-1.2%	6.5%
Reinsurance + non-life			Book value per share	26.58	32.53
Gross premiums written	598,502,723	546,925,838	Number of employees (full-time equivalent basis)	2,704.3	2,698.9
Year-on-year change	9.4%	0.1%	Solvency ratio under Solvency II rules	177–187% 1	198%
Net incurred loss ratio*	58.3%	55.5%	For definitions of items and ratios, please refer to the appended glossary.
Net expense ratio	31.5%	31.6%	* Excluding the effect of exchange differences.
Net combined ratio*	90.7%	88.1%	Excluding subordinated debt expenses. * Excluding the amortisation charge for a customer list.
Profit or loss before tax	60,064,163	72,204,759
Year-on-year change	-16.8%	75.8%

	Declaration of the management board	5
	Key figures	7
	BUSINESS REPORT	9
1	Letter from the chairman of the management board	10
2	Profile of Sava Re and the Sava Insurance Group	12
3	Shareholders and share trading	23
4	Report of the supervisory board	28
5	Corporate governance statement	38
6	Mission, vision, strategic focus and goals	51
7	Business environment	58
8	Review of operations of the Sava Insurance Group and Save Re	66
9	Financial position of the Sava Insurance Group and Sava Re	89
10	Human resources management	98
11	Risk management	116
12	Internal auditing in the Sava Insurance Group	125
13	Development of information support	126

SUSTAINABILITY REPORT	127
14 Sustainability report	128
FINANCIAL STATEMENTS WITH NOTES	161
15 Auditor's report	163
16 Financial statements	168
17 Notes to the financial statements	181
18 Significant events after the reporting date	397

APPENDICES (unaudited)	398
Appendix A – Sava Re performance indicators	399
Appendix B – Financial statements of the Sava Insurance Group pursuant to requirements of the Insurance Supervision Agency	405
Appendix C – Financial statements of Sava Re pursuant to requirements of the Insurance Supervision Agency	417
Appendix C2 – Glossary of selected terms and calculation methods for indicators	424
Appendix D – GRI index	427

BUSINESS REPORT

Business is about people. It is about building relationships based on trust and taking responsibility. We are honoured by your trust and belief in our story. It is your trust that drives us, so that we do not rest at any goal we achieve, but always reach for the next one.

1 Letter from the chairman of the management board2

Dear Shareholders, Business Partners and Employees,

The previous financial year was marked by rising geopolitical tensions and tightening global economic conditions. While the Covid-19 pandemic began to loosen its grip, Russia's war of aggression against Ukraine began in February 2022. This led to an increase in energy prices and pushed up inflation, resulting in a higher key interest rate and higher required yields in financial markets, and it presented the Sava Insurance Group with new challenges. Although our business with Russia had not been substantial, and the sanctions, therefore, did not have a significant impact on the results, inflation began to be reflected in the increased value of claims, as well as in higher labour, information technology and other costs. At half year, it was clear that the insurance industry could no longer delay the much-needed adjustment of its pricing policy.

An advanced risk governance framework, timely action, capital strength and customer focus across all stages of the sales and post-sales process enabled the Sava

Insurance Group to achieve virtually all the goals set in its 2022 business plan. The Group generated a net profit of EUR 68.2 million, which is 13.7% above the plan, achieving a remarkable 14.9% return on equity. At EUR 774.1 million, the Group increased its business volume in terms of gross premiums written by 6.1%, mainly driven by its non-life and reinsurance business. In 2022, the Group continued to strengthen its business in foreign markets, achieving strong premium and profit growth. As expected, the Group's combined ratio increased as the pandemic subsided. At 90.7%, it was much better than planned. This was largely due to cost efficiency, as costs grew more slowly than premiums. Financial investments suffered from unfavourable conditions in the financial markets in 2022; consequently, the return on the investment portfolio, at 1.3%, was below target and lower than the previous year. Sava Re's capital strength and solvency were reaffirmed last year with an "A" credit rating from S&P Global Ratings and AM Best.

In 2022, the Group continued to strengthen its business in foreign markets, achieving strong premium and profit growth. As expected, the Group's combined ratio increased as the pandemic subsided. At 90.7%, it was much better than planned.

In 2022, the Group continued to make solid progress

in its development strategy of digital transformation and customer-centric business processes. Its key development activities were focused on the consolidation of customer support processes at contact centres and the introduction of centralised multi-channel solutions across several Sava Insurance Group companies. We enhanced our digital and self-care solutions for customers and improved the user experience. The SavaNet portal, which currently includes data from Zavarovalnica Sava, Sava Pokojninska and Sava Infond, has undergone several improvements based on customer requests and ideas. While implementing advanced technologies, we continued to develop and introduce machine learning into various work processes to reduce process time and improve our customers' experience. We expanded and upgraded our product range in view of our customers' needs and expectations. In non-life insurance, we offered products with strong sustainability credentials, as well as products targeted at individual policyholder segments and products that promote online sales and bancassurance. As part of the expansion of the Group's life insurance product range, in 2022 the Group focused on further developing and improving protection policies and unit-linked life products, with which it entered the Serbian market. In international markets, we successfully expanded our bancassurance business by establishing a new collaboration and by strengthening business with banking partners.

Sustainability has become an integral part of our dai-

ly operations and decision-making. At the end of the year, the Group thus adopted a sustainable development policy, which governs the sustainability management system and underlines the principles of responsible management in all business areas. In addition to developing products with a sustainability component, we are reinforcing this aspect of our business operations in other areas as well. We developed the guidelines for the responsible underwriting of environmental, social and governance risks in non-life insurance, which were implemented in several Group companies during the year. We increased our sustainability investments to EUR 218 million in 2022, representing 14.9% of the total investment portfolio. We updated the sustainable investment policy by integrating a sustainability risk management perspective into the investment process and by more consistently integrating the principles of the UN Global Compact into the investment process. We paid particular attention to the many legislative developments in the context of the European Union's efforts to achieve carbon neutrality by 2050, and implemented the activities necessary to meet the requirements in a timely manner.

In the Sava Insurance Group, we recognise our responsibility to our employees and the wider community. We have made it a strategic goal for the Group to be recognised by our stakeholders as a socially responsible and attractive employer in the region. The members of the Sava Insurance Group therefore have strong links with their local environment. We support local communities through sponsorships, donations and prevention projects, and our employees have embraced corporate volunteering by taking part in our Heart for the World initiative. In 2022, the initiative thus resulted in numerous activities throughout the Group that promote our corporate responsibility towards our natural and social environment.

At the end of 2022, the Sava Insurance Group successfully completed the strategic period in all areas of its business. I would like to take this opportunity to thank our employees, shareholders, customers and other stakeholders for their support and trust. With the new 2023–2027 strategy, adopted at the end of 2022, we continue to implement our mission and vision. Through commitment and constant progress, we ensure security and quality of life. We are building a customer-centric, flexible and sustainability-oriented insurance group. A big thank you to all our colleagues who have helped us achieve our goals so far. We believe that among good people the ambitious goals we have set ourselves for the new strategy period can be achieved.

Marko Jazbec

Chairman of the Management Board of Sava Re d.d.

In 2022, the Group continued to make solid progress in its development strategy of digital transformation and customer-centric business processes.

2 Profile of Sava Re and the Sava Insurance Group

2.1 Sava Re company profile3

Company name	Sava Re, d.d.
Business address	Dunajska 56, 1000 Ljubljana, Slovenia
Telephone (switchboard)	+386 1 47 50 200
Facsimile	+386 1 47 50 264
Email	[email protected]
Website	www.sava-re.si
ID number	5063825
Tax identification number	SI17986141
LEI code	549300P6F1BDSFSW5T72
Share capital	EUR 71,856,376
Shares	17,219,662 no-par-value shares

Company name	Sava Re, d.d.
Business address
	Dunajska 56, 1000 Ljubljana, Slovenia
Telephone (switchboard)	+386 1 47 50 200
Facsimile	+386 1 47 50 264
Email	[email protected]
Website	www.sava-re.si
ID number	5063825
Tax identification number	SI17986141
LEI code	549300P6F1BDSFSW5T72
Share capital	EUR 71,856,376
Shares	17,219,662 no-par-value shares
Management and supervisory bodies	MANAGEMENT BOARD Marko Jazbec (chairman)	Polona Pirš Zupančič Peter Skvarča
		SUPERVISORY BOARD Davor Ivan Gjivoje, jr. (chairman) Keith William Morris (deputy chairman) Klemen Babnik Matej Gomboši Edita Rituper (employee representative) Andrej Gorazd Kunstek (employee representative)
Date of entry into court register	10 December 1990, Ljubljana District Court
Certified auditor	Deloitte Revizija d.o.o., Dunajska cesta 165, 1000 Ljubljana, Slovenia
Largest shareholder and holding	Slovenski Državni Holding d.d. (Slovenian Sovereign Holding) 17.7% (no-par-value shares: 3,043,883)
Credit ratings: S&P Global Ratings AM Best	A /stable/; September 2022 A /stable/; September 2022
Investor relations contact	[email protected]
The Company has no branches

2.2 Significant events in 2022

• The year 2022 was marked by a tense geopolitical situation. In February 2022, Russia launched a war of aggression against Ukraine, which has now lasted a year. In early 2022, the Sava Insurance Group examined the impact of the war in Ukraine on its operations and assessed that, due to the small volume of business with and low investment exposure to Russia and Ukraine, the changed circumstances would not have a material impact on its business result. The Sava Insurance Group (through Sava Re) had written reinsurance contracts with Russian and Ukrainian partners the annual premium volume of which accounted for only 0.1% of the Group's total operating revenue for 2022. All contracts contain sanctions clauses. In the event of sanctions imposed by the European Union or the United Nations, such clauses limit the obligations of Sava Re under relevant contracts if such obligations are contrary to the applicable sanctions. In addition, the reinsurance contracts written exclude coverage related to war.

The credit and currency exposure of the Group's financial investments to Russia, Ukraine and Belarus was negligible at 31 December 2022. Russia's military aggression against Ukraine impacted capital markets and caused energy prices and inflation to rise. In response to inflation, central banks promptly adjusted monetary policy by raising key interest rates to levels last seen 15 years ago. In terms of inflation, the risk of a decline in profitability of non-life insurance business in 2022 was significantly higher, reflecting the increase in average claims, which was mainly seen in motor and property insurance. In the first phase, the greatest impact was felt in the Slovenian market. Zavarovalnica Sava responded by increasing premium rates and adjusting products that showed signs of claims inflation. Technical provisions also went up, depending on the estimated effects. The other markets in which the Group operates and in the reinsurance segment also experienced inflationary pressures.

Further uncertainty was added by increased tensions
over Taiwan and the difficulties of the economy in
China, where it seems increasingly likely that the
property bubble is about to burst, while the econo
my is also impacted by the country's zero-tolerance
for Covid-19. Section 17.7 "Risk management" de
tails the risks arising from adverse macroeconomic
and geopolitical conditions.
• Jošt Dolničar, who was appointed chairman of the
management board of Zavarovalnica Sava on 30
December 2021, was granted a licence to perform

this function by the Insurance Supervision Agency on 3 May 2022. His term as a member of the management board of Sava Re ended on 4 May 2022, and he assumed the chairmanship of the management board of Zavarovalnica Sava on 5 May 2022 for a five-year term of office. In December 2022, the supervisory board of Sava Re appointed David Benedek as an additional member of the management board. David Benedek has been appointed for a five-year term, beginning on the next business day following receipt of the Insurance Supervision Agency's decision to issue a licence to David Benedek to act as a member of the management board. At the time of writing, this decision has not yet been issued.

In May 2022, the 38th general meeting of shareholders was held⁴.
In May 2022, the High Court in Dublin ruled in favour of Zavarovalnica Sava, confirming that its business interruption and loss of licence policy wording does not provide cover for losses arising from the Covid-19 pandemic.
In September 2022, the rating agencies S&P Global Ratings and AM Best affirmed the "A" ratings of Sava Re and Zavarovalnica Sava. The outlook was stable.
In December 2022, the Sava Insurance Group's new strategy for 2023–2027 and the business plan for the financial year 2023 were released.

2.3 Significant events after the reporting date

On 15 January 2023, a new five-year term of office for Polona Pirš Zupančič, a member of the management board of Sava Re, was entered in the register of companies.
At the beginning of 2023, Zavarovalnica Sava and Sava Infond sold two properties in Maribor,

which were classified as available for sale at the reporting date. The sale value of the properties was EUR 4.2 million. This sale will have no impact on the consolidated income statement of the Sava Insurance Group for 2023. sale of G2I (GBR). Sava Re's ownership of the company will cease after the transfer of the shareholding becomes effective in the English register of companies.

• In March 2023, an agreement was signed for the

2.4 Sava Re rating profile

Sava Re is rated by two rating agencies, S&P Global Ratings and AM Best.

Financial strength ratings of Sava Re

Agency	Rating5	Outlook	Latest review
S&P Global Ratings	A	stable	September 2022: existing rating affirmed
AM Best	A	stable	September 2022: existing rating affirmed

⁵ The credit rating agency S&P Global Ratings uses the following scale for assessing financial strength: AAA (extremely strong), AA (very strong), A (strong), BBB (adequate), BB (less vulnerable), B (more vulnerable), CCC (currently vulnerable), CC (highly vulnerable), R (under regulatory supervision), SD (selectively defaulted), D (defaulted), NR (not rated). Plus (+) or minus (-) following the credit rating from AA to CCC indicates the relative ranking within the major credit categories. AM Best uses the following categories to assess financial strength: A++, A+ (superior), A, A- (excellent), B++, B+ (good), B, B- (fair), C++, C+ (marginal), C, C- (weak), D (poor), E (under regulatory supervision), F (in liquidation), S (suspended).

2.5 Profile of the Sava Insurance Group6

Sava Re, the parent company of the Sava Insurance Group, transacts reinsurance business. The insurance part of the Group is composed of eight insurers based in Slovenia and in the countries of the Adriatic region: the composite insurer Zavarovalnica Sava (SVN); the non-life insurers Sava Neživotno Osiguranje (SRB), Sava Osiguruvanje (MKD), Illyria (RKS) and Sava Osiguranje (MNE); and the life insurers Vita (SVN), Sava Životno Osiguranje (SRB) and Illyria Life (RKS). In addition to these (re)insurers, the Group consists of:

Sava Pokojninska (SVN): a Slovenian pension company;
Sava Penzisko Društvo (MKD): a pension fund manager based in North Macedonia managing secondand third-pillar pension funds;
Sava Infond (SVN): a subsidiary managing investment funds;
TBS Team 24 (SVN): a company providing assistance services relating to motor, health and homeowners insurance;
DCB (SVN): an associate company carrying on hospital activities;
G2I (GBR): an associate company marketing online motor polices.

The Group keeps expanding, diversifying into areas related to its existing business. We strengthen and refine our product range and have evolved into a comprehensive service provider.

Reinsurance: With over 40 years of experience in international reinsurance, Sava Re provides a full range of reinsurance coverages. Building a globally diversified portfolio, we now conduct business in over one hundred reinsurance markets worldwide. Our guiding principle is to build long-term relationships with our clients and partners that allow creating stability throughout all economic cycles.
Insurance, Slovenia: In Slovenia, the insurance business is conducted through Zavarovalnica Sava and Vita. Zavarovalnica Sava concentrates on developing new products and improving existing ones, with a strong emphasis on customer focus. The company offers a wide range of non-life and life insurance coverages. Products are sold through internal and external sales channels. Vita joined the Sava Insurance Group in 2020, making it the second-largest insurance group in Slovenia in terms of market share. Vita is the largest life insurance company in Slovenia operating on a bancassurance model. It

	sells its policies exclusively through branches of the
	bank NLB d.d., where customers are served by high
	ly qualified financial advisors. The company mainly
	writes unit-linked life insurance policies.
•	Insurance, international: The Sava Insurance Group
	operates through subsidiaries and branches in the
	markets of Croatia, Serbia, Montenegro, North
	Macedonia and Kosovo. Motor third-party liability
	and motor own damage (casco) account for a sig
	nificant part of non-life insurance business written
	in these markets, and there is a rising trend in prop
	erty, health and other business. The Group offers
	life insurance in the markets of Croatia, Serbia and
	Kosovo.
•	Pensions: The Sava Insurance Group offers pension
	insurance in Slovenia and North Macedonia. In the
	Slovenian market, Sava Pokojninska offers a com

prehensive range of supplementary pension insurance: it manages pension fund assets and distributes supplementary pension annuity payments. The company in North Macedonia manages mandatory and voluntary pension funds.
Asset management: Sava Infond manages client assets in 19 sub-funds of the Infond umbrella fund and provides portfolio management services to Group companies.
Assistance services: The assistance services of TBS Team 24 complement the core insurance business in all the markets in which we operate. The company is the leading assistance provider in southeastern Europe, offering its policyholders roadside, home and travel medical assistance, as well as other assistance services.

Company names of Sava Insurance Group members

	Official long name	Short name in this document
	Zavarovalna skupina Sava	Sava Insurance Group
1	Pozavarovalnica Sava d.d. / Sava Reinsurance Company d.d.	Sava Re
2		Zavarovalnica Sava (SVN)
	ZAVAROVALNICA SAVA, zavarovalna družba, d.d.	Zavarovalnica Sava, Slovenian part (in tables)
	SAVA OSIGURANJE, d.d. – Croatian branch office	Zavarovalnica Sava, Croatian part (in tables)
3	SAVA NEŽIVOTNO OSIGURANJE AKCIONARSKO DRUŠTVO ZA OSIGURANJE BEOGRAD	Sava Neživotno Osiguranje (SRB)
4	KOMPANIA E SIGURIMEVE " ILLYRIA " SH.A.	Illyria (RKS)
5	SAVA osiguruvanje a.d. Skopje	Sava Osiguruvanje (MKD)
6	AKCIONARSKO DRUŠTVO SAVA OSIGURANJE PODGORICA	Sava Osiguranje (MNE)
7	Kompania për Sigurimin e Jetës " Illyria – Life " SH.A.	Illyria Life (RKS)
8	"SAVA ŽIVOTNO OSIGURANJE" akcionarsko društvo za osiguranje, Beograd	Sava Životno Osiguranje (SRB)
9	Društvo sa ograničenom odgovornošću – SAVA CAR – Podgorica	Sava Car (MNE)
10	ZS Svetovanje, storitve zavarovalnega zastopanja, d.o.o.	ZS Svetovanje (SVN)
11	ASISTIM, klicni center, storitvene dejavnosti in vrednotenje, d.o.o.	ASISTIM (SVN)
12	DRUŠTVO ZA ZASTUPANJE U OSIGURANJU "SAVA AGENT" D.O.O. - Podgorica	Sava Agent (MNE)
13	Društvo za tehničko ispituvanje i analiza na motorni vozila SAVA STEJŠN DOOEL Skopje	Sava Station (MKD)
14	Sava pokojninska družba, d.d.	Sava Pokojninska (SVN)
15	TBS TEAM 24 podjetje za storitvene dejavnosti in trgovino d.o.o.	TBS Team 24 (SVN)
16	Društvo za upravuvanje so zadolžitelni i dobovolin penzisko fondovi SAVA PENZISKO DRUŠTVO A.D Skopje	Sava Penzisko Društvo (MKD)
17	Got2Insure Ltd	G2I (GBR)
18	SAVA INFOND, družba za upravljanje, d.o.o.	Sava Infond (SVN)
19	SO poslovno savjetovanje d.o.o.	SO Poslovno Savjetovanje (HRV)
20	Diagnostični center Bled d.o.o.	DCB (SVN)
21	Vita, življenjska zavarovalnica, d.d.	Vita (SVN)
22	PRIVREDNO DRUŠTVO ZA TEHNIČKI PREGLED I REGISTRACIJU SAVA CAR DOO BEOGRAD	Sava Car (SRB)

2.7 General information on Group companies as at 31 December 20229

As at 31 December 2022, the Sava Insurance Group had the following members:

	Sava Re	Zavarovalnica Sava (SVN)	Sava Neživotno Osiguranje (SRB)	Illyria (RKS)	Sava Osiguruvanje (MKD)
Registered office	Dunajska cesta 56, 1001 Ljubljana, Slovenia	Ulica Eve Lovše 7, 2000 Maribor, Slovenia	Bulevar vojvode Mišića 51, 11040 Belgrade, Serbia	Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo	Zagrebska br. 28A, 1000 Skopje, North Macedonia
ID number	5063825000	5063400000	17407813	810483769	4778529
Main activity	reinsurance	insurance	non-life insurance	non-life insurance	non-life insurance
Share capital (EUR)	71,856,376	68,417,377	6,314,464	7,228,040	3,820,077
Book value of combined equity interest of all Group members (EUR)		68,417,377	6,314,464	7,228,040	3,585,524
% equity share / voting rights held by Group members		Sava Re: 100.0%	Sava Re: 100.0%	Sava Re: 100.0%	Sava Re: 93.86%
Governing bodies	management board	management board	management board	managing director	board of directors
	Marko Jazbec (chair), Polona Pirš Zupančič, Peter Skvarča	Jošt Dolničar (chair), Uroš Lorenčič, Primož Močivnik, Robert Ciglarič, Miha Pahulje	Bojan Mijailović (chair), Aleksandar Ašanin	Shpend Balija	executive director: Melita Gugulovska non-executive directors of the company: Rok Moljk (chair), Peter Skvarča, Milan Viršek, Sašo Tonevski, Nenad Jovanović
	supervisory board	supervisory board	supervisory board	board of directors
	Davor Ivan Gjivoje Jr (chair), Keith William Morris, Klemen Babnik, Matej Gomboši, Edita Rituper, Andrej Gorazd Kunstek	Marko Jazbec (chair), Pavel Gojkovič, Polona Pirš Zupančič, Peter Skvarča, Aleš Perko, Branko Beranič	Peter Skvarča (chair), Nebojša Šćekić, Josif Jusković	Marko Jazbec (chair), Rok Moljk, Andreja Rahne, Milan Viršek, Ilirijana Dželadini

	Sava Osiguranje (MNE)	Illyria Life (RKS)	Sava Životno Osiguranje (SRB)	Sava Car (MNE)	ZS Svetovanje (SVN)
Registered office	Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro	Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo	Bulevar vojvode Mišića 51, 11040 Belgrade, Serbia	Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro	Ulica Eve Lovše 7, 2000 Maribor, Slovenia
ID number	02303388	810793837	20482443	02806380	2154170000
Main activity	non-life insurance	life insurance	life insurance	technical testing and analysis	insurance agency
Share capital (EUR)	4,033,303	3,285,893	4,326,664	485,000	327,263
Book value of combined equity interest of all Group members (EUR)	4,033,303	3,285,893	4,326,664	485,000	327,263
% equity share / voting rights held by Group members	Sava Re: 100.0%	Sava Re: 100.0%	Sava Re: 100.0%	Sava Osiguranje (MNE): 100.0%	Zavarovalnica Sava: 100.0%
Governing bodies	board of directors	managing director	management board	Sava Osiguranje (MNE): 100.0%	Zavarovalnica Sava: 100.0%
	executive director: Melita Gugulovska non-executive directors of the company: Rok Moljk (chair), Peter Skvarča, Milan Viršek, Sašo Tonevski, Nenad Jovanović	Albin Podvorica deputy managing director: Mehmeti Fisnik	Miloš Brusin (chair), Ana Bojanić	Siniša Mićunović	Aljaž Kos
		board of directors	supervisory board
		Marko Jazbec (chair), Andreja Rahne, Rok Moljk, Milan Viršek, Ilirijana Dželadini	Polona Pirš Zupančič (chair), Pavel Gojkovič, Uroš Ćamilović

	Sava Agent (MNE)	Sava Station (MKD)	Sava Pokojninska (SVN)	TBS Team 24 (SVN)	Sava Penzisko Društvo (MKD)
Registered office	Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro	Zagrebska br. 28A, 1000 Skopje, North Macedonia	Ulica Eve Lovše 7, 2000 Maribor, Slovenia	Ljubljanska ulica 42, 2000 Maribor, Slovenia	Majka Tereza 1, 1000 Skopje, North Macedonia
ID number	02699893	7005350	1550411000	5946948000	5989434
Main activity	insurance agency	technical testing and analysis	pension fund	provision of assistance services	fund management activities
Share capital (EUR)	10,000	199,821	6,301,109	8,902	2,110,791
Book value of combined equity interest of all Group members (EUR)	10,000	199,821	6,301,109	7,789	2,110,791
% equity share / voting rights held by Group members	Sava Osiguranje (MNE): 100.0%	Sava Osiguruvanje (MKD): 100.0%	Sava Re: 100.0%	Sava Re: 87.5%	Sava Re: 100.0%
Governing bodies	executive director	managing director	management board	managing director	management board
	Snežana Milović	Ilija Nikolovski	Andrej Plos (chair), Igor Pšunder	Edvard Hojnik	Petar Taleski (chair), Marija Gjorgjievska, Kosta Ivanovski
			supervisory board	holder of procuration	supervisory board
			Jošt Dolničar (chair), Rok Moljk, Hermina Kastelec, Pavel Gojkovič, Irena Šela, Tomaž Šalamon, Uroš Krajnc	Aleksandra Tkalčič	Pavel Gojkovič (chair), Rok Moljk, Peter Skvarča, Erol Hasan

	Vita (SVN)	DCB (SVN)	G2I (GBR)	Sava Infond (SVN)	SO Poslovno Savjetovanje (HRV)
Registered office	Trg republike 3, 1000 Ljubljana, Slovenia	Pod Skalo 4, 4260 Bled, Slovenia	First Floor Ridgeland House 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom	Ulica Eve Lovše 7, 2000 Maribor, Slovenia	R. Frangeša Mihanovica 9, 10000 Zagreb, Croatia
ID number	1834665000	5690366000	10735938	5822416000	02467143
Main activity	life insurance	hospital activities	insurance agency	fund management activities	business and other management consultancy activities
Share capital (EUR)	7,043,900	379,123	152,958	1,460,524	3,884,285
Book value of combined equity interest of all Group members (EUR)	7,043,900	189,562	26,768	1,460,524	3,884,285
% equity share / voting rights held by Group members	Sava Re: 100.0%	Sava Re: 40.1%/50.0%	Sava Re: 17.5%/25.0%	Sava Re: 84.00%/84.85% Zavarovalnica Sava: 15.00%/15.15%	Zavarovalnica Sava: 100.0%
Governing bodies	management board	managing director	board of directors	management board	managing director
	Irena Prelog (chair), Tine Pust	Zvonko Novina, Robert Cugelj	Graham Moreton Smith (chair and non executive member), Robert Paul Marjoram (executive member), Lisa Maire Dunne (executive member), Nicholas Tsimekis (executive member), Justin James Davis (executive member), Robert Anthony Katzaros (executive member)	Jožica Palčič (chair), Samo Stonič	Vedran Sokačič
	supervisory board	supervisory board		supervisory board
	Marko Jazbec (chair), Pavel Gojkovič, Andreja Rahne, Jure Košir	Jošt Dolničar (chair), Blaž Jakič, Jaka Kirn, Milan Marinič, Polonca Jug Mauko		Polona Pirš Zupančič (chair), Nada Zidar, Jure Košir, Primož Močivnik, Miha Pahulje

	Vita (SVN)	DCB (SVN)	G2I (GBR)	Sava Infond (SVN)	SO Poslovno Savjetovanje (HRV)
Registered office	Trg republike 3, 1000 Ljubljana, Slovenia	Pod Skalo 4, 4260 Bled, Slovenia	First Floor Ridgeland House 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom	Ulica Eve Lovše 7, 2000 Maribor, Slovenia	R. Frangeša Mihanovica 9, 10000 Zagreb, Croatia
ID number	1834665000	5690366000	10735938	5822416000	02467143
Main activity	life insurance	hospital activities	insurance agency	fund management activities	business and other management consultancy activities
Share capital (EUR)	7,043,900	379,123	152,958	1,460,524	3,884,285
Book value of combined equity interest of all Group members (EUR)	7,043,900	189,562	26,768	1,460,524	3,884,285
% equity share / voting rights held by Group members	Sava Re: 100.0%	Sava Re: 40.1%/50.0%	Sava Re: 17.5%/25.0%	Sava Re: 84.00%/84.85% Zavarovalnica Sava: 15.00%/15.15%	Zavarovalnica Sava: 100.0%
Governing bodies	management board	managing director	board of directors	management board	managing director
	Irena Prelog (chair), Tine Pust	Zvonko Novina, Robert Cugelj	Graham Moreton Smith (chair and non executive member), Robert Paul Marjoram (executive member), Lisa Maire Dunne (executive member), Nicholas Tsimekis (executive member), Justin James Davis (executive member), Robert Anthony Katzaros (executive member)	Jožica Palčič (chair), Samo Stonič	Vedran Sokačič
	supervisory board	supervisory board		supervisory board
	Marko Jazbec (chair), Pavel Gojkovič, Andreja Rahne, Jure Košir	Jošt Dolničar (chair), Blaž Jakič, Jaka Kirn, Milan Marinič, Polonca Jug Mauko		Polona Pirš Zupančič (chair), Nada Zidar, Jure Košir, Primož Močivnik, Miha Pahulje

The management of all Sava Insurance Group members is local.¹⁰

2.8 Changes to the organisation11

There were no major changes in the Group's organisation in 2022, but the Kosovo company S Estate was successfully divested in the first quarter of 2022, the vehicle inspection company Sava Car (MNE) established the vehicle inspection company Sava Car (SRB) in Serbia in August 2022 to strengthen sales channels and Ornatus KC was renamed ASISTIM at the end of 2022.

3 Shareholders and share trading

Driven by the uncertain economic situation and the developments in financial market, the Sava Re share price fell by 19.7% from EUR 27.9 to EUR 22.4 in 2022. During this period, it reached a high of EUR 30.4 and a low of 2022, by 1.1%. The Ljubljana Stock Exchange index (SBI-TOP) also declined over the period, by 16.9%.

EUR 20.1. In 2022, the average price was EUR 25.3. The SXIP (STOXX Europe 600 Insurance) also fell in In 2022, turnover in Sava Re shares was EUR 17.9 million (2021: EUR 22.9 million). Average daily turnover was EUR 71,859, compared to EUR 91,863 in 2021.

Basic details about the POSR share

	31 Dec 2022	31 Dec 2021
Share capital	71,856,376	71,856,376
Number of shares	17,219,662	17,219,662
Ticker symbol	POSR	POSR
Number of shareholders	4,316	4,274
Type of share	ordinary
Listing	Ljubljana Stock Exchange, prime market
Number of own shares	1,721,966	1,721,966
Consolidated book value per share (EUR)	26.58	32.53
Market capitalisation at end of period (EUR)	347,148,390	432,385,718
	2022	2021
Consolidated net earnings per share (EUR)	4.39	4.91
Share price at end of period (EUR)	22.40	27.90
Average share price during reporting period (EUR)	25.26	25.13
Period low (EUR)	20.10	18.50
Period high (EUR)	30.40	29.80
Turnover during the period (EUR)	17,892,849	22,873,820
Average daily trade volume (EUR)	71,859	91,863

Shareholders

Sava Re shareholder structure as at 31 December 2022

Type of investor	Domestic investors	International investors
Insurance and pension companies	18.2%	0.0%
Other financial institutions*	18.0%	15.6%
Republic of Slovenia	13.9%	0.0%
Natural persons	11.1%	0.2%
Investment funds and mutual funds	2.5%	0.0%
Other commercial companies	2.9%	1.0%
Banks	0.0%	16.6%
Total	66.6%	33.4%

* The other financial institutions item includes Slovenian Sovereign Holding with a stake of 17.7%.

The composition of shareholders remained largely unchanged in of 2022. Domestic ownership increased by 0.2 p.p. to 66.6%.

Fiduciary accounts with banks, attorneys and other financial institutions altogether account for 24.6% of all POSR shares.

Composition of Sava Re share capital

Ten largest shareholders and qualifying shareholders under the Slovenian Takeover Act as at 31 December 202212

	Shareholder	Number of shares	% of share capital	% voting rights
1	Slovenian Sovereign Holding	3,043,883	17.7%	19.6%
2	InterCapital Securities Ltd. – fiduciary account	2,538,773	14.7%	16.4%
3	Republic of Slovenia	2,392,436	13.9%	15.4%
4	European Bank for Reconstruction and Development (EBRD)	1,071,429	6.2%	6.9%
5	Raiffeisen Bank Austria d.d. – fiduciary account	795,206	4.6%	5.1%
6	Modra Zavarovalnica d.d.	714,285	4.1%	4.6%
7	Hrvatska Poštanska Banka – fiduciary account	380,190	2.2%	2.5%
8	Guaranteed civil servants' sub-fund	320,346	1.9%	2.1%
9	Kapitalska Družba d.d. – SODPZ	238,109	1.4%	1.5%
10	OTP Banka d.d. – fiduciary account	204,364	1.2%	1.3%
	Total	11,699,021	67.9%	75.5%
	Sava Re d.d., own shares*	1,721,966	10.0%	-

* Own shares carry no voting rights.

** Pursuant to Article 235a of the Slovenian Companies Act (ZGD-1), in April 2022 Sava Re started the process of identifying shareholders who are registered with intermediaries as holders of shares and who are not themselves intermediaries (hereinafter referred to as: ultimate shareholders). According to the information received, Adris grupa d.d. held 3,278,049 POSR shares on 26 April 2022.

In 2022, the 10 largest shareholders held a combined share of 67.9% of the share capital and 75.5% of voting rights, largely unchanged from the previous year.

As at 31 December 2022, the top five largest shareholders of Sava Re, exceeded the 5% threshold (qualifying holding under Article 77 of the Slovenian Takeover Act, ZPre-1).

In 2022, the chairman of the management board of Sava Re, Marko Jazbec, increased his holding of Sava Re shares by 1,135 to 11,500 shares. Peter Skvarča, a member of the management board, also increased his holding of Sava Re shares in 2022, by 350 to 1,200 shares. At the end of 2022, the members of the management and supervisory boards together held 19,348 shares, representing 0.112% of the share capital.

POSR shares held by members of the supervisory and management boards as at 31 December 2022

	Number of shares	% of share capital
Marko Jazbec	11,500	0.067%
Polona Pirš Zupančič	3,748	0.022%
Peter Skvarča	1,200	0.007%
Total management board	16,448	0.096%
Andrej Gorazd Kunstek	2,900	0.017%
Total supervisory board	2,900	0.017%
Total management and supervisory boards	19,348	0.112%

All Sava Re shares are ordinary registered shares with no par value; all were issued in book-entry form and are of the same class.

The shares give their holders the following rights:

the right to participate in the Company's management, with one share carrying one vote in the general meeting;
the right to a proportionate part of the Company's profit (dividend);
the right to a corresponding part of the remaining

assets upon the liquidation or bankruptcy of the Company.

Pursuant to the Sava Re articles of association and the applicable legislation, current Sava Re shareholders also hold pre-emptive rights entitling them to take up shares in proportion to their existing shareholding in any future stock offering; their pre-emptive rights can only be excluded under a resolution to increase share capital adopted by the general meeting by a majority of at least three quarters of the share capital represented.

Share transfer restrictions

All Sava Re shares are freely transferable.

Holders of securities carrying special control rights

Sava Re has issued no securities carrying special control rights.

Own shares

In line with the authorisation granted at the 28th general meeting of shareholders (held on 23 April 2014), the Company started repurchasing its shares in July 2014. The authorisation to acquire own shares was valid for three years from the date of the general meeting resolution. The authorisation was valid for the acquisition

of up to 1,721,966 own shares of the Company, representing 10% of the Company's share capital. The Company initially acquired its own shares only on the regulated market for financial instruments, but after the announcement of the share-repurchase programme in November 2014, the Company repurchased its own shares both on and off the regulated market for financial instruments, in line with the authorisation given to the management board by the general meeting. The management board's most recent repurchase of own shares to fill the quota was performed on 11 April 2016. new general meeting authorisation to purchase own shares. Dividend At the 38th general meeting of shareholders held on 23 June 2022, the shareholders adopted the proposal of the management and supervisory boards to use EUR 23,246,544.00 of the distributable profits to pay a dividend of EUR 1.50 per share. They were paid on 12 July 2022 to the shareholders entered in the share register as at 11 July 2022.

From 1 January 2022 to 31 December 2022, Sava Re did not buy back or sell any own shares. The total number of own shares as at 31 December 2022 was 1,721,966, representing 10% less one share of all issued shares.

The Company's management board does not have a

Contingent capital

The Company had no contingent capital as at 31 December 2022.

Details on dividends13

EUR, except percentages	For 2016	For 2017	For 2018	For 2019	For 2020	For 2021
Amount of dividend payment	12,398,158	12,398,157	14,722,811	0	13,173,042	23,246,544
Dividend/share	0.80	0.80	0.95	0.00	0.85	1.50
Dividend yield	5.0%	4.8%	5.6%	-	3.4%	5.9%

3.1 Responsibility to investors14

Our investors (i.e. our shareholders) and analysts are important stakeholders of Sava Re, and the Company maintains transparent, professional and comprehensive relationships with them.

As a Ljubljana Stock Exchange first listing company, we respect the principle of equal treatment and public information. Our communications follow recommendations for uniform informing of all shareholders, and through public announcements we make it possible to provide simultaneous and transparent information in line with the financial calendar. In so doing, we build trust among our shareholders and other potential investors in the Company and its POSR share. Key information is published in accordance with the financial calendar on the Company's website and via the Ljubljana Stock Exchange SEOnet system. In 2022, there were 60 public notifications in both Slovenian and English.

In addition, Sava Re communicates in compliance with the Slovenian Financial Instruments Market Act (ZTFI-1), the Companies' Act (ZGD-1), the aforementioned

recommendations of the Ljubljana Stock Exchange for listed companies, the Corporate Governance Code for Listed Companies, the rules of procedure of the supervisory board and the Company's internal communication rules.

The objective of the Company is to set up an open communication channel with investors. We want to achieve awareness of the real value of the Sava Re and Sava Insurance Group brand and consequently everything that investing in the POSR share entails. In 2022, we continued our efforts to improve the liquidity of the POSR share. Our responsibility to investors is reflected in our cooperation and in setting up a twoway relationship using various communication tools. In 2022, we carried out activities that we adjusted to current restrictions and recommended measures: • We attended investor and analyst conferences in person and via videoconference, and participated

in webcasts organised by the Ljubljana Stock Exchange. We strengthened our brand among international institutional investors through presentations

at investment conferences, maintaining a focus on long-term investors.

We participated twice in the Trade on the Stock Exchange event, where we introduced ourselves to prospective investors, highlighted the importance of good investing and contributed as a sponsor to the Ljubljana Stock Exchange event.
We responded via email and conference calls to requests by investors.
We extended the agreement on the provision of market-making services for the Sava Re share with the stock exchange member Interkapital Vrijednosni Papiri d.o.o. until 2024.
Following the announcement of our unaudited results, we held a press conference, at which we presented the Group's activities in the past year and informed the public about our plans for the future.
All shareholders, Slovenian and foreign, received our annual letter to shareholders by direct mail and were invited to the annual general meeting, where they could exercise their voting rights regarding Company matters.

• After each earnings announcement, we send an email newsletter to investors, shareholders and other members of the financial community who have subscribed to our investor communications to inform them of the press release.

We also keep investors, shareholders and other members of the financial community informed in a timely and regular manner on our official website www.sava-re.si, where we have an Investors section. It contains all the essential information on the POSR share price performance, key indicators, dividends, financial reports, analysis and a financial calendar. The website also features a calendar of past investment conferences as well as the material presented at these events. Also announced are the events we will be attending in the coming year.

We are available to investors, shareholders and analysts at the office of the management board and compliance at the phone number +386 1 47 50 200 and via email for investor relations at [email protected].

4 Report of the supervisory board15

The supervisory board of Sava Re d.d. (the Company or Sava Re) has prepared the following report in accordance with Article 282 of the Slovenian Companies Act.

In 2022, the supervisory board monitored the Company's operations and oversaw its management in a responsible manner. It periodically examined reports on various and select aspects of the business, passed appropriate resolutions and monitored their implementation. Individual issues were addressed in more detail by the relevant supervisory board committees, and, on the basis of their findings, the supervisory board adopted appropriate resolutions and recommendations.

The supervisory board acted within the framework of the powers and responsibilities conferred upon it by law, the Company's articles of association, and its rules of procedure.

COMPOSITION OF THE SUPERVISORY BOARD

The composition of the supervisory board changed in 2022. Mateja Živec completed her term of office on 31 December 2021, having resigned as a member of the supervisory board. In her place, the Sava Re workers' council appointed Edita Rituper for a term of office spanning from 1 January 2022 to 12 June 2023.

In 2022, the composition of the supervisory board was as follows: Davor Ivan Gjivoje Jr (chair), Keith William Morris (deputy chair), Klemen Babnik, Matej Gomboši, Andrej Gorazd Kunstek and Edita Rituper.

The size and composition of the supervisory board allow for effective discussion and the adoption of sound resolutions based on the broad range of expertise and experience provided by its members.

OPERATION OF THE SUPERVISORY BOARD

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In its work and decision-making, the supervisory board is guided by the goals of the Company and the Sava Insurance Group as a whole. During meetings, the members express their opinions and positions and seek to reconcile any differences.

The supervisory board notes that the reports prepared by the management board for the supervisory board's own use, and that of its committees, were appropriate for a thorough examination of issues and that they complied with both the relevant laws and internal regulations. Meeting materials were provided in a timely manner, allowing the members sufficient time to prepare themselves for the consideration of agenda items. The Company's professional staff assisted in the conduct of the meetings and organised other supporting activities.

The supervisory board held 11 sessions during 2022, two of which were held by correspondence. All members attended all meetings convened during the two terms of office. Most of the meetings were held at the Company's head office. A member of the supervisory board who is unable to attend a session in person for legitimate reasons may attend by means of a video conference.

The members of the management board and the secretary of the supervisory board also participated in the discussions, whereas other professional staff assisted in certain agenda items.

During the year, the supervisory board discussed select and relevant aspects of the operations and activities of the Company and the Sava Insurance Group within its powers under Slovenian law and the Company's articles of association.

The major issues to which the supervisory board members paid particular attention in 2022 are outlined below:

Business plans of the Company and the Sava Insurance Group

At the end of 2022, the supervisory board considered the Strategy of the Sava Insurance Group for 2023– 2027 and the Business Plan of the Sava Insurance Group for 2023, and it gave its consent to both planning documents.

Financial reports – annual report

The supervisory board reviewed the unaudited financial statements of the Group and the Company for 2021, and it adopted the audited annual report of the Group and the Company for 2021, including the auditor's report and opinion on the 2021 annual report, and the supervisory board's own report on its activities in 2021.

Financial reports – interim reports

The supervisory board also periodically reviewed other select financial reports in 2022, in particular the unaudited financial reports of the Sava Insurance Group with the financial statements of Sava Re d.d. for January–March 2022, January–June 2022 and January– September 2022.

Investment

The supervisory board monitored asset management periodically and as part of the review of the annual report and interim financial reports of the Company and the Group.

Reinsurance operations and claims experience

The supervisory board was informed of the Company's reinsurance programme for the current year. Throughout 2022, the board was regularly updated by the management board on major loss events in the domestic and global markets, and on potential claims that could have a material impact on the Company.

Supervision of subsidiaries

In addition to overseeing the operations of Sava Re as the parent company of the Sava Insurance Group, the supervisory board actively monitored the performance of the Group's subsidiaries to the extent permitted by law.

Risk management system

Risk management function

The supervisory board monitored risk management periodically and as part of its review of the annual report and interim financial reports of the Company and the Group.

It took note of the risk report for the last quarter of 2021 and the risk reports for the first, second and third quarters of 2022. In March, it took note of the Joint Sava Insurance Group Own Risk and Solvency Assessment (ORSA) Report for 2022. The report covered select and relevant information on the own risk and solvency assessment of Zavarovalnica Sava d.d., Sava Re d.d. (the parent company) and the Sava Insurance Group.

At the end of 2022, the supervisory board approved the Risk Strategy of the Sava Insurance Group for 2023–2027.

Actuarial matters

In 2022, the supervisory board considered the actuarial function report of Sava Re d.d. for 2021, and it took note of the Sava Insurance Group non-life actuarial function report for 2021 and the Sava Insurance Group life actuarial function report for 2021.

Compliance monitoring

In 2022, the supervisory board of Sava Re took note of the annual report of the compliance function holder for 2021 and the annual work plan for 2022. It also took note of the compliance function holder's half-yearly report for the period from 1 January to 30 June 2022.

Internal audit

In 2022, the supervisory board oversaw the activities of the Company's internal audit department in accordance with its statutory powers. It also reviewed the internal audit report for the period from 31 October to 31 December 2021, and the annual report on internal auditing for 2021, including a quality assurance and improvement programme of the Company's internal audit department, and it drew up an opinion on the annual report, which was presented to the Company's general meeting of shareholders. It also considered quarterly internal audit reports for the periods ending on 31 March 2022, 30 June 2022 and 30 September 2022. In addition, it monitored the quarterly reports of the internal audit department on internal auditing of the Sava Insurance Group (Group Internal Audit). All reports prepared by the Company's internal audit department were presented by the head of the department.

The supervisory board considers the reports prepared by the internal audit to have been independent and objective, and that the internal auditor's recommendations and findings have been taken into account by the management board. It notes that the internal audit's reviews, based on their available resources, have not revealed any significant irregularities in the Company's operations. The supervisory board also notes that the internal audit department continuously monitors the development of the internal audit departments of Group subsidiaries, providing them with professional support. In addition, it also monitors the operations of these companies and has not detected any major irreg-

ularities.

At the end of 2022, the supervisory board considered and approved the strategic plan of the internal audit department for 2023–2027 and the annual work plan

of the internal audit department for 2023.

In accordance with the International Standards on Internal Auditing, the supervisory board approved the proposed bonus for the head of the internal audit department relating to her individual performance in 2021.

Joint statement of key function holders

The supervisory board took note of the joint statement of all key function holders of the Group and the Company for 2021, including the opinion that all key risk areas were adequately managed and their functions were aligned to ensure complete coverage of the risks to which the Company and the Group were exposed.

Solvency II policies

In 2022, the supervisory board also took note of the update on the periodic review of Solvency II policies, discussing individual policies and giving its consent to the proposed amendments.

Calling and holding the general meeting of shareholders

The supervisory board, together with the management board, called the Company's general meeting of shareholders once in 2022, for 23 June 2022.

Preparing election proposals for the general meeting

In 2022, the supervisory board prepared a proposal for the general meeting on the appointment of an audit firm for the next three years, based on the recommendation of the audit committee, which carried out a selection process. The proposal for the appointment of the external auditor was approved by the annual general meeting in 2022.

Personnel matters

Succession planning

In 2022, the supervisory board took note of the periodic report on succession planning for the members of the management bodies of Sava Insurance Group companies.

Nomination procedures

In the spring of 2022, the Sava Re supervisory board, assisted by the relevant committees, undertook a nomination process for the reappointment of Polona Pirš Zupančič, member of the management board, and it unanimously voted to reappoint her for another term. The new five-year term as a member of the management board of Sava Re started on 15 January 2023.

In the autumn of 2022, the supervisory board of Sava Re, with the expert support of the relevant committees and an external human resources expert, carried out a nomination procedure, which resulted in the appointment of David Benedek as the fourth member of the management board. David Benedek was appointed for a term of five years, commencing on the next business day following receipt of the Insurance Supervision Agency's decision to grant David Benedek a licence to act as a member of the management board.

Remuneration of members of management and supervisory bodies

Remuneration policy and remuneration report In accordance with the Slovenian Companies Act, in 2022 the management and supervisory boards submitted to the Sava Re general meeting of shareholders the Remuneration Policy for Members of Management and Supervisory Bodies of Sava Re d.d. and the Directors' Remuneration Report of Sava Re d.d. for the Financial Year 2021. The general meeting approved the 2021 directors' remuneration report. The consultative resolution to approve the remuneration policy was not approved, with additional (and routine) revisions still required at the time. The Company will, therefore, again submit a revised and completed policy to the shareholders for consideration at the next ordinary general meeting of Sava Re in 2023.

Variable remuneration of the management board in 2021

In 2022, the supervisory board adopted a resolution on the payment of variable remuneration to the members of the management board for business and individual performance in 2021, in accordance with the internal methodology for determining the variable remuneration of the management board members.

Payment of the retained portion of variable remuneration to management board members

In accordance with the applicable internal rules for determining the variable remuneration of the management board members, in 2022, the supervisory board approved the payment of the retained portion of the variable pay for the previous financial years to Jošt Dolničar (at the end of his 2018–2022 term of office), Marko Jazbec (at the end of his 2017–2022 term of office), and Polona Pirš Zupančič (at the end of her 2018–2023 term of office).

Adoption of internal regulations

In April and August 2022, the supervisory board approved the amendments to the Act on the Management Board. In September 2022, it took note of the information on the revision of the Sustainable Investment Policy of the Sava Insurance Group. In December 2022, it confirmed the Sustainable Development Policy of the Sava Insurance Group.

Consideration of additional reports

Benchmark analyses

The supervisory board took note of benchmark analyses for 2021, specifically on the performance of insurance groups in Slovenia and on reinsurance markets. It also discussed the benchmark analysis on solvency and financial position reports in the insurance industry for 2021.

Impact of inflation on claims

Because of the expected rebound of motor claim frequency back up to pre-pandemic levels, combined with rising inflation, pushing up claim amounts and claims provisions, the supervisory board was presented with periodic reports in 2022 on the impact of claims inflation on the non-life portfolio and on the measures taken to limit this impact on the performance of the Group's largest insurance subsidiary.

Information security

The supervisory board took note of the management board's report on cyber risk management.

Monitoring corporate finance projects

The management board kept the supervisory board informed of developments in corporate finance projects.

Monitoring other projects

The supervisory board took note of the management board's report on the implementation of IFRS 17 and IFRS 9 and the preliminary calculations under the new accounting standards and the transition arrangements for moving to these new standards.

Overseeing the work of supervisory board committees

In March 2022, the supervisory board considered the 2021 risk committee report and the 2021 audit committee report. It also assessed the quality of the work of the two committees. At each meeting, it monitored the committee' activities through reports and meeting minutes.

Correspondence with market regulators

As part of the periodic risk reports, the supervisory board reviewed reports on correspondence between the Company and the Insurance Supervision Agency, other market regulators, and inspection authorities.

Strengthening supervisory board best practices

In line with best practice, the members of the supervisory board complete questionnaires upon taking office and annually thereafter, including a declaration that they have no conflicts of interest. In 2022, all the members of the supervisory board and its committees declared themselves to be independent. The declarations were noted by the supervisory board. The Company publishes the declarations of the supervisory board on its website.

In accordance with good practice, in 2022 the supervisory board evaluated its composition, its functioning, and the work of its individual members, and the supervisory board as a whole, including its cooperation with the management board.

OPERATION OF SUPERVISORY BOARD COMMITTEES

AUDIT COMMITTEE

In accordance with statutory requirements, the Company's supervisory board has established an audit committee to deal with accounting, financial and auditing matters.

Terms of reference

The duties and powers of the audit committee of the supervisory board are laid down by the Slovenian Companies Act, its rules of procedure and those of the supervisory board, and other autonomous legal acts (e.g., recommendations for audit committees).

Composition in 2022

The term of office of each audit committee member is limited by the term of office of the supervisory board.

In 2022, the audit committee comprised the following members: Matej Gomboši (chair), Andrej Gorazd Kunstek, Katarina Sitar Šuštar (external member) and Dragan Martinović (external member).

Operation in 2022

The audit committee met a total of 12 times in 2022. All the members attended all the sessions.

The main responsibilities of the audit committee in 2022 are set out below.

Overseeing the integrity of financial information

The audit committee monitored the integrity of financial information. The committee focused mainly on overseeing the financial reporting processes. In this respect, it made recommendations and suggestions on materials for supervisory board meetings to adhere as much as possible to relevant professional standards and appropriate reporting principles, such as completeness, transparency and consistency of reporting.

Monitoring the efficiency and effectiveness of internal controls and internal audit

The audit committee monitored the efficiency and effectiveness of internal controls and internal audit activities based on the annual and quarterly internal audit reports, and it assessed the adequacy of the strategic internal audit plan and the annual internal audit work plan. In addition, it monitored the quarterly reports of the internal audit department on internal auditing of the EU-based Group companies (Group Internal Audit). It also reviewed the quality assurance and improvement programme of the Company's internal audit department and the department's self-assessment for 2021. It considered the proposal for individual-performance-based pay for the head of the internal audit department for 2021. The audit committee also conducted an interview with the head of the internal audit department, in accordance with the International Standards for the Professional Practice of Internal Auditing.

Overseeing the risk governance framework

In line with the Company's corporate governance system (the supervisory board having established a separate risk committee), the audit committee oversaw the effectiveness and efficiency of the risk management framework by taking note of the minutes of the work and findings of the risk committee of the Sava Re supervisory board.

The audit committee also took note of the report on the regular annual review of the Solvency II policies for 2022.

Monitoring the statutory audit of separate and consolidated financial statements

Statutory audit of financial statements

During 2022, the audit committee met several times with the selected external auditor, monitored the audit of the separate and consolidated financial statements and took note of the post-audit management letter and the additional auditor's report in relation to the audit of the financial statements for the year ended 31 December 2021 (KPMG). It also took note of the results of the auditor's review of compliance with the

ESEF Directive (KPMG) and the findings of the review of the absolute level of net assets as required by the local regulators of Brazil and Argentina (KPMG).

Assessing the quality of the external auditor In accordance with the internal methodology for assessing the quality of the external auditor, the audit committee carried out a quality assessment process of the external auditor of the 2021 annual report (KPMG).

Independence of the auditor of the Company's annual report

The audit committee took note of the internal policy on ensuring the independence of the external auditor, which was adopted by the management board at the committee's initiative. Based on quarterly management board reports on non-audit services provided by the audit firms, the audit committee assessed the independence of the auditor of the annual report of the Company and the Group. It also noted the report on the recruitment of the members of the Group's auditor's team. For the purpose of monitoring the independence of the external auditor, the audit committee reviewed and approved the proposed:

contract with the external auditor for the review of the directors' remuneration report for 2021 (KPMG),
contract for the review of the solvency and financial conditions report for the financial years 2022– 2024 (Deloitte),
contract for the review of the remuneration report for the financial years 2022–2024 (Deloitte),
contract for the performance of agreed-upon procedures for the financial years 2022–2024 (auditor's report on Sava Re's net assets exceeding the absolute minimum amount set by the local regulators (Brazil and Argentina) (Deloitte)).

Selection procedure for the auditor of the Company's annual report

The audit committee, assisted by an internal committee, conducted a selection process and prepared a report to the supervisory board on which audit firm to propose to the Sava Re general meeting for the audit of the financial statements for the financial years 2022–2024.

Preparation of the contract between the auditor and the Company

The audit committee reviewed the proposed contract with the new external auditor for the audit of the financial statements for the financial years 2022–2024 (i.e., Deloitte) and proposed to the supervisory board that the contract be signed.

Setting audit focus areas

The audit committee took note of the 2022 audit plan (Deloitte) and, among other things, participated in setting the audit focus areas. In December 2022, it also took note of the external auditor's report following the pre-audit of the 2022 financial statements (Deloitte).

In October 2022, the audit committee submitted a completed questionnaire to the Agency for Public Oversight of Auditing regarding the assessment of the functioning of audit committees as part of the requirement to monitor the development of the market for the provision of statutory audit services to public interest entities. The questionnaire was prepared by the Committee of European Auditing Oversight Bodies (CEAOB), of which the agency is a member.

Performing other tasks

In 2022, the audit committee also performed other tasks: it prepared a report on its work in 2021 for the supervisory board. It took note of the periodic management report on the progress of the IFRS 17 and IFRS 9 project and the preliminary financial statements in accordance with the new standards. It also took note of a progress report on the strategic goals set in IT transformation and digitalisation, and customer-centricity. The audit committee quarterly reviewed in detail the management board's reports on correspondence with the Insurance Supervision Agency, other market regulators and inspection authorities. It also confirmed its work plan for 2023.

Further strengthening audit committee best practices

The audit committee carried out a self-assessment of the quality of its work and reported to the supervisory board. The committee in turn took note of the assessment of the quality of its work carried out by the supervisory board in 2022. It also took note of the information on the fit and proper assessment of its members and on the assessment of the competence of the audit committee as a whole, both of which were carried out in 2022, in accordance with the internal fit and proper policy for relevant personnel. All the members of the audit committee signed an annual declaration of their independence, which was also noted by the supervisory board.

Conclusions

The chair of the audit committee reported regularly to the supervisory board on the work and positions of the audit committee. The supervisory board regularly reviewed the minutes of the committee's meetings.

The supervisory board is of the opinion that the audit committee thoroughly considered relevant issues within its terms of reference and provided the supervisory board with professional assistance in the form of opinions and proposals.

The supervisory board also believes that the composition of the audit committee is appropriate and that the members have the professional and personal qualities to maintain a high level of quality and independence in their work.

Furthermore, the supervisory board is of the opinion that the audit committee received appropriate support in carrying out its work.

RISK COMMITTEE

The supervisory board believes that identifying and managing risk is an essential part of good governance and has therefore set up a risk committee to monitor risk developments and provide advice and support to the supervisory board on risk-related matters.