1–6/2023 unaudited results Sava Insurance Group

25 August 2023

Disclaimer

FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements relating to Sava Reʾs expectations, plans or goals, which are based on assumptions made by Sava Re management. By their nature, forward-looking statements involve risk and uncertainty. As a result, actual developments, in particular performance, may differ materially from expectations, plans and goals set out in this document; therefore, persons should not rely on forward-looking statements.

DUTY TO UPDATE

Sava Re assumes no obligation to adjust any forward-looking statements or other information contained in this document to future events or developments.

Group results
Segment reporting
Financial investments
POSR share and dividend policy
Solvency position

GROUP RESULTS

Highlights 1–6/2023

Growth in gross written premiums of 11.6% – strongest growth in the motor business, reflecting more policies sold and higher average premiums; growth also in the reinsurance segment, driven by higher rates in global reinsurance markets, and the capture of new business opportunities

Net profit of €40.0 million (1–6/2022: €11.1 million)

Better insurance service result for non-life, EU: in 1–6/2022 high inflationary pressures on claims (especially motor insurance): result normalised this year

Better insurance service result for reinsurance: higher insurance revenue, different claims structure (major claims covered by reinsurance) and a lower impact of inflation than in the previous year

Better investment result: in 1–6/2022, a significant negative impact of financial market developments on the net investment return from fair value losses on FVTPL investments

After 1–6/2023, Slovenia and the wider region was hit by a wave of storms and floods, which is expected to significantly impact Q3 earnings: impact estimated at €30–35 million

Subject to no additional catastrophic events, the full year profit target has been reduced by around 25%: estimated at approximately €40 million









31/12/2022	30/6/2023	31/12/P2023

million € % , except	1–6/2022	1–6/2023	plan 2023	Change 2023/2022
volume Business	443 3	495 1	800 >	11 7%
premiums written Gross	433 0	483 3		6% 11
Insurance revenue	286 6	328 4		6% 14
Profit of , net tax	11 1	40 0	53 >	260 4%
equity* Return on	1% 4	3% 13	5% 9 >	+9 2 p.p.
Combined (non life reinsurance) and ratio -	96 7%	89 9%	95% <	-6 8 p.p.
the portfolio* Return investment on	0 2%	2 2%	1 5% >	+2 0 p.p.
	31/12/2022	30/6/2023	31/12/P2023
Equity	524 8	543 6		3 6%
contractual (CSM) Net service margin	130 5	141 2		8 1%
Total portfolio investment	1 416 7 ,	1 457 3 ,		9% 2
for benefit of the policyholders who bear the risk investment Assets	498 8	2 547		9 7%
funds Assets in pension savings company	1 013 3 ,	1 102 4 ,		8 8%
under fund Assets management at management company	494 4	575 7		4% 16
from liabilites and insurance reinsurance Net contracts	1 419 6 ,	1 483 1 ,		5% 4

Key figures

* Return on equity excludes accumulated other comprehensive income/loss. Investment portfolio return excludes subordinated debt expense.

Business volume up 11.7%

Sava Insurance Group / Group results 7 / ³¹

Gross premiums written by class of insurance

Operating segments driving growth in business volume

Breakdown of profit before tax by segment

Operating segments driving growth in profit before tax

Contractual service margin (CSM)

SEGMENT REPORTING

Non-life EU

Sava Insurance Group / Segment reporting 13 / ³¹

Life EU

Sava Insurance Group / Segment reporting 14 / ³¹

• Higher sales of single premium policies in 1–6/2022 – optimism in financial markets before the start of the war in Ukraine

Higher Insurance revenue due to change in business mix: more protection business (without investment components; these are excluded from insurance revenue)
Slightly higher incurred claims because of higher mortality and more accidents

• Fair value losses on FVTPL investments in 1–6/2022 due to financial market conditions

Reinsurance

Sava Insurance Group / Segment reporting 15 / ³¹

Positive price developments in reinsurance markets
Organic growth in business volume
Non-proportional reinsurance rates up more than 30%, mainly in the EU

Higher insurance revenue due to growth in nonproportional business
Changed composition of major claims, which triggered the Group's reinsurance protection to a greater extent and were therefore ceded to reinsurers
Impact of inflation on incurred claims in 1–6/2022

Non-life non-EU

Sava Insurance Group / Segment reporting 16 / ³¹

• Organic growth, especially in motor, health and property

Life non-EU

Sava Insurance Group / Segment reporting 17 / ³¹

• Increased sales through insurers' own distribution networks as well as through agents and banks

Higher insurance revenue reflecting portfolio growth
Lower incurred claims increased mortality due to Covid-19 in Serbia in 1–6/2022

• Higher interest revenue due to portfolio growth and higher reinvestment rates

Pensions and asset management

• Negative impact in 1–6/2022 from change in fair value of FVTPL investments and provisioning for non-achievement of guaranteed returns due to adverse financial market movements

• Positive net inflows in all companies and more favourable financial market trends

"Other" segment

FINANCIAL INVESTMENTS

Investment portfolio and AuM

± x.y% – growth/decline compared to the end of the previous year.

million €	1–6/2022	1–6/2023	Difference
income Interest	7 4	9 3	8 1
fair of Change value in FVTPL assets	-8 8	1 8	10 6
Gains/losses disposal of assets on	-0 3	-0 1	0 2
(ECL) Change expected credit losses in	0 3	0 2	-0 1
income/expenses Other from investments	3 1	4 5	3 1
investment income Net	1 7	15 6	13 9
of Rate return	0 2%	2 2%	+2 0 p.p.

Net investment income and rate of return on the investment portfolio

Positive contribution from FVTPL portfolio driven by favourable performance of equity investments
Higher interest revenue due to (re)investment in higher yielding investments

million €	31/12/2022	30/6/2023	Difference
Fixed income investments	9 1 174 ,	214 3 1 ,	39 4
bonds Government	734 9	744 3	9 4
bonds Corporate	421 4	8 445	24 5
& Deposits CDs	18 7	24 1	5 5
Shares and funds	0 47	42 6	-4 5
Shares	24 9	24 6	-0 3
Mutual funds	22 2	18 0	2 -4
Alternative investments	93 1	94 6	1 4
Infrastructure funds	53 9	56 5	2 6
Real funds estate	16 5	15 4	-1 1
Investment property	22 8	22 7	-0 1
Cash and cash equivalents	78 6	81 7	3 1
Other	23 1	24 1	1 1
Total portfolio investment	1 416 7 ,	1 457 3 ,	40 6

Asset allocation

Maintaining a safe and liquid portfolio by investing in top-rated
government and corporate bonds
Reducing exposure to equities
Reinvestment yield for 1–6/2023 of approximately 3.2%

Classification of financial assets

Secure and stable investment portfolio

Sava Insurance Group / Financial investments 25 / ³¹

POSR SHARE AND DIVIDEND POLICY

Shareholders and share trading

* Custody account.

Sava Insurance Group / POSR share and dividend policy

	30/6/2023
Share capital (€ million)	71.9
Market capitalisation (€ million)	376.6
Trading symbol	POSR
No. of shares	17,219,662
No. of own shares	1,721,966
No. of shareholders	4,412

* Higher book value of share as a result of higher equity following transition to IFRS 17 and IFRS 9.

Dividend policy

• On 5 June 2023, the general meeting of shareholders approved the dividend proposal of €24,796,313.60 or €1.60 gross per share. The dividend was paid on 21 June 2023 to shareholders registered in the share register on 20 June 2023.

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

SOLVENCY POSITION

Capital adequacy

For more information: [email protected]

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