Pozavarovalnica Sava

Earnings Release • Mar 8, 2024

2023 unaudited results Sava Insurance Group

7 March 2024

CONTENTS

• Group results Segment reporting
• Financial investments

GROUP RESULTS

Highlights 2023

Sava Insurance Group / 2023 unaudited results / Group results 4

Net profit of €64.7m (2022: €46.9m)

Lower result before reinsurance: impact of summer storms mitigated by reinsurance protection

Higher result after reinsurance: growth in insurance revenue due to the adjustment of prices to reflect claims inflation, which was depressing the insurance service result in 2022, and organic growth

Better investment result: investment at higher interest rates and positive impact from change in the fair value of FVTPL investments (negative impact in 2022)

Growth in gross written premiums of 14.3%

strongest growth in motor business, reflecting more policies sold and higher average premiums and in the life segment due to improved sales of both life risk and unit-linked life policies

In the summer of 2023, Slovenia and the wider region were hit by a wave of storms and floods with a significant impact on profit of €27.4m

Profit target exceeded

Sava Insurance Group / 2023 unaudited results / Group results 5

Net profit

Profit before tax €79.6m

Target return on equity exceeded

Sava Insurance Group / 2023 unaudited results / Group results 6

Growth in contractual service margin (CSM)

Sava Insurance Group / 2023 unaudited results / Group results 7

Contractual service margin (CSM) €155.3m

Business volume exceeds target due to continued strong growth

Sava Insurance Group / 2023 unaudited results / Group results 8

Business volume €910.1m

Market shares

Sava Insurance Group / 2023 unaudited results / Group results 9

Slovenia Insurance Pensions Asset management	20.6% 10.2%** 13.1%	North Macedonia Insurance Pensions	8.8% 44.2%
Croatia Insurance	1.1%	Montenegro Insurance	17.3%
Serbia Insurance	3.6%*	Kosovo Insurance	14.8%

* 1–9/2023 as data for the full year 2022 have not yet been published. ** 1–12/2022 as more recent data not available.

Sava Re operates in more than 110 reinsurance markets worldwide. It has a very small share of the global reinsurance market.

Combined ratio within target range

Sava Insurance Group / 2023 unaudited results / Group results 10

Combined ratio 93.1% 2023/2022: +0.5 p.p.

Under the new accounting standard (IFRS 17) and the new combined ratio calculation method

Under the previous accounting standard (IFRS 4)

Impact of natural catastrophe claims

Sava Insurance Group / 2023 unaudited results / Group results 11

Natural catastrophe claims €45.6m 2023/2022: +61.0%

Includes net claims affecting the (re)insurance portfolios of the Group companies resulting from natural perils (such as windstorm, flood, earthquake and hail).

Strong growth in assets under management

Sava Insurance Group / 2023 unaudited results / Group results 12

Investment portfolio €1,503.3m 2023/2022: +6.2% Assets under management €2,411.8m 2023/2022: +20.2 p.p.

Sava Insurance Group / 2023 unaudited results / Group results 13

2.1%

Solid solvency position

Sava Insurance Group / 2023 unaudited results / Group results 14

	2022	2023	Difference 2023/2022
Environmental aspect
employee (in tonnes) CO2 emissions per	1 60	1 45	-9 4%
of Number claims reported online	288 45 ,	67 981 ,	+50 1%
31/12 Group's integrated ESG investments at as	9% 14	16 9%	+2 0 p.p.
Social aspect
31/12 (full-time basis) Number of employees equivalent at as	2 704 3 ,	2 744 8 ,	5% +1
Employees involved annual performance appraisal in interviews % as	49 5%	47 9%	-1 6 p.p.
31/12 of all employees Women % at as as	9% 57	59 9%	+2 0 p.p.
Employee turnover rate	16 9%	1% 17	+0 2 p.p.
of Number the workplace injuries in	9	8	1% -11
hours of employee training Average	24 6	22 5	5% -8
for (no . of hours) the World volunteering Heart – corporate	5 439 ,	5 114 ,	0% -6
Governance aspect
bodies Women in % management as	23 9%	27 7%	+3 8 p.p.
of bodies in supervisory Group companies % Women as	21 8%	19 7%	-2 1 p.p.

Select sustainability performance indicators

Sava Insurance Group / 2023 unaudited results / Group results 15

od 100 % do 150 % We build long-term corporate social responsibility in continuous dialogue with our stakeholders, supporting global sustainability goals, with a particular focus on climate change, the health and well-being of our customers and employees.

The 2022 CO² emissions figure is audited and therefore differs from the figure published in the 2022 annual report.

Book value per share and POSR share price performance

Sava Insurance Group / 2023 unaudited results / Group results 16

Book value per share €37.79 2023/2022: +10.2%

Share price at 31/12/2023 €28.00 2023/2022: +25.0%

More information on POSR share performance and returns is available at: https://www.sava-re.si/en-si/investor-relations/our-share/

Dividend policy

Sava Insurance Group / 2023 unaudited results / Group results 17

Dividend policy: distribution of between 35% and 45% of the net profit of the Sava Insurance Group.

• The audited annual report, including the proposed dividend, will be published on 5 April 2024. The general meeting of shareholders will be held on 27 May 2024.

SEGMENT REPORTING

Non-life EU: insurance service result up driven by premium growth

Sava Insurance Group / 2023 unaudited results / Segment reporting 19

• Growth mainly in personal motor, driven by inflation-adjusted price increases and increased policy numbers

-

Life EU: higher profit due to improved financial market developments

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• Sales stronger than last year

• Business mix shifts towards life risk products with a

higher share of premiums included in insurance

revenue than savings products

• Insurance service revenue higher reflecting shift in business mix (more risk policies without an investment component, which is not included in insurance revenue)
• Slightly higher incurred claims driven by higher mortality and accident frequency

• In 2022: adverse impact of change in fair value of FVTPL investments due to financial market movements
• Higher interest income in 2023

Reinsurance: improved revenue mix

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• Price increases in line with reinsurance market developments and organic business volume growth
• Positive shift in premium mix towards more profitable non-proportional business, up 19.4%

-

Non-life non-EU: strong premium growth

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• Growth in motor, health and property, driven by both organic growth and price increases

Life non-EU: strong revenue growth

Sava Insurance Group / 2023 unaudited results / Segment reporting 23

Pensions and asset management: robust growth in net fund inflows

conditions (negative impact in 2022)

• Closer cooperation with distributors and sales campaigns for mutual funds
• Pension funds in Macedonia: impact of increase in average salary

"Other" segment: higher profits from healthcare and assistance services

FINANCIAL INVESTMENTS

€ m	2022	2023	Difference
effective income interest Interest at rate	15 4	20 6	5 2
Change fair value of in FVTPL assets	-11 8	3 0	14 7
Gains/losses disposal of assets on	-0 4	-0 8	-0 4
(ECL) Change expected credit losses in	0 3	0 3	0 0
income/expenses Other from investments	5 2	7 2	2 0
investment income Net	8 8	30 2	21 4
of Rate return	6% 0	1% 2	+1 5 p.p.

Net investment income of and rate of return on the investment portfolio

Sava Insurance Group / 2023 unaudited results / Financial investments 27

• Higher interest income due to (re)investment in higher yielding investments
• Positive contribution from FVTPL portfolio driven by favourable equity and debt market performance

Composition of the investment portfolio

• Safe and liquid portfolio maintained by investing in top-rated
• government and corporate bonds
• Reduced exposure to equities
• Increased focus on providing liquidity without impacting the bottom

• Q4 reinvestment yield around 3.5% and 3.3% for the full year 2023

€m	31/12/2022	31/12/2023	Difference
Fixed-rate investments	173 6 1 ,	302 1 4 ,	128 8
bonds Government	734 5	818 8	84 3
bonds Corporate	420 3	458 0	37 7
& Deposits CDs	18 8	25 6	6 8
Shares and funds	0 47	40 3	-6 7
Shares	24 9	21 8	-3 1
Mutual funds	22 2	18 6	-3 6
Alternative investments	93 1	96 1	3 0
Infrastructure funds	53 9	3 57	3 5
Real funds estate	16 5	13 9	-2 6
Investment property	22 8	24 9	2 1
Cash and cash equivalents	78 3	39 8	-38 5
Other	23 1	24 6	1 5	line
Total portfolio investment	1 415 2 ,	1 503 3 ,	88 1

Classification of investments by accounting category

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• The increase in FVOCI investments was driven by the reinvestment of funds from the sale of FVTPL equity investments.

Secure and stable investment portfolio

Sava Insurance Group / 2023 unaudited results / Financial investments 30

For more information: ir@sava-re.si

Thank you.

Glossary of selected terms and computation methods for indicators

Sava Insurance Group / 2023 unaudited results / Glossary 32

Assets under management. Assets of pension companies' pension funds, assets of mutual funds managed by the Group's asset management company and assets of policyholders who bear the investment risk.

Book value per share. Ratio of total equity to the weighted average number of shares outstanding.

Business volume. Gross premiums written and revenue of non-insurance services.

Combined ratio. The sum of the loss ratio and the expense ratio. The Group's ratio is calculated for the reinsurance and non-life insurance operating segments. Sava Re's ratio does not include expenses arising from holding activities. For the transition to IFRS 17, the Group has retained the existing net/net methodology for calculating the combined ratio. During 2023, in line with the approach of other comparable insurance companies, the Group decided to change its methodology to a net/gross calculation of the combined ratio, which is also consistent with the presentation of the income statement in accordance with IFRS 17. The revised methodology has been applied for the first time in this year's annual report. Under the new methodology, the net reinsurance expenses are included in the numerator, while the denominator includes insurance service revenue net of the deductible reinsurance portion. Calculations using the new methodology slightly deteriorate the combined ratio, but the previous year's combined ratio is also restated for comparison.

CSM. The contractual service margin is an estimate of the unearned profit on groups of insurance contracts that has not been recognised in the income statement at a reporting date because it relates to future services.

Dividend yield. Ratio of dividend per share to the rolling average price per share in the 12-month period.

Expense ratio. Attributable expenses plus non-attributable expenses plus net operating income or expenses plus net other income or expenses plus net impairment losses and reversals of impairment losses on non-financial assets as a percentage of insurance revenue. The Group's ratio is calculated for the reinsurance and non-life insurance operating segments. Sava Re's ratio does not include expenses arising from holding activities.

Gross premiums written. The total premiums on all policies written or renewed during a given period, regardless of what portions have been earned.

Investment portfolio. It consists of financial investments, investments in associates, investment property, and cash and cash equivalents. It does not include investments of policyholders who bear the investment risk.

Loss ratio. Insurance service expenses, excluding operating expenses, plus net result from reinsurance contracts held as a percentage of insurance revenue. The Group's ratio is calculated for the reinsurance and non-life insurance operating segments.

Net contractual service margin. Contractual service margin, net of reinsurance.

Net investment income of the investment portfolio. The investment result plus the share of profit or loss of subsidiaries and associates. Calculated excluding returns on life insurance policies where policyholders bear the investment risk, the impact of exchange differences and expenses on subordinate debt.

Return on equity (ROE). Net profit for the period as a percentage of average equity during the period, excluding accumulated other comprehensive income.

Return on the investment portfolio. The ratio of net investment income from the investment portfolio to average invested assets. The investment portfolio position includes the following items of the statement of financial position: investment property; investments in associates and subsidiaries; financial investments, excluding unit-linked assets; and cash and cash equivalents other than those relating to unit-linked life insurance contracts. The average balance is calculated based on the figures as at the reporting date and as at the end of the previous year.

Solvency ratio. The ratio of eligible own funds to the solvency capital requirement, expressed as a percentage. A solvency ratio in excess of 100% indicates that the firm has sufficient resources to meet the solvency capital requirement.

Total share return. Ratio of the share price at the end of the period, including the dividend, to the share price at the end of the previous period.