Pozavarovalnica Sava

Investor Presentation • Nov 24, 2017

STRATEGIC PLAN of the SAVA RE GROUP for the period 2017—2019

#NEVER ALONE

WE ARE CREATING A MODERN, DIGITAL, SOCIALLY -AND SUSTAINABLE-ORIENTED INSURANCE GROUP.

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DIGITALISATION AND TECHNOLOGICAL MODERNISATION of operations to place the client in the centre

GROWTH THROUGH ACQUISITIONS

SEEKING OPPORTUNITIES

in environmental/sustainable-oriented investment projects

CLOSING THE GAP

between intrinsic value and market price of shares

AS PER RISK STRATEGY DIRECTION

• RETURN ON EQUITY 10.4% (+/- 0.5 p.p.)
  • SOLVENCY RATIO: between 170% and 230% (between the lower limit of the optimal range and the upper limit of the adequate range of capital)
• COMBINED RATIO, non-life: < 95% COMBINED RATIO, reinsurance: < 93%
• PROFITABILITY OF NEW LIFE POLICIES:

  • 5% Slovenia

  • 2.5% other markets

STRUCTURE : GOALS

*The "other" item includes health, assistance and pension business

STRUCTURE : GOALS

€ 490 million € 514 million

Structural change: 2019 plan vs. 2016 (p.p.) SCOPE OF STRATEGY ON THE GROUP LEVEL

INTEGRAL RISK MANAGEMENT

INSURANCE OPERATIONS

BUSINESS SUPPORT ACTIVITIES

Long-term focus

INSURANCE OPERATIONS CLIENT IN THE CENTRE

CLIENT : GOALS

NEEDS	Developing products tailored to client's needs (e.g. assistance services in addition to insurance)
ACCESSIBILITY	Multi-channel approach (clients opt fortheir favoured channel)
SATISFACTION	Measuring client satisfaction using acknowledged methods
TRANSPARENCY	Providing clients with an insight into the processing of business
PERCEPTION	Strengthening brand recognition

DIGITALISATION : GOALS

ONLINE Setting up online policy sales and claims reporting

COMPREHENSIVE

Setting up a new service centre with a comprehensive customer relationship management tool (CRM)

INNOVATION

Developing innovative services and IT-supported products

CONNECTION

Providing additional support to clients (assistance companies and call centres for home, motor and medical assistance and other services)

GROWTH : GOALS

3-year growth (plan 2019 / 2016)

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SLOVENIA STRUCTURE : GOALS

€ 336 million € 332 million

-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0

INTERNATIONAL STRUCTURE : GOALS

SYNERGIES : GOALS

beyond each year: > € 6 million

PENSION : GOALS

GROWTH	Strengthening market share in Slovenia with organic growth: the aim is to increase the market share in terms of the number of insured persons per p.p.
M&A	Seeking opportunities for companies / portfolios in Slovenia and the Balkans
SALES	Expansion of sales channels (bancassurance and the Internet) and enhanced communication with policyholders
SYNERGY	Use of marketing and sales synergies in the group
ANNUITIES	Increase in market share in annuity business, also through the acquisition of polic holders from y other pension companies

SCOPE OF STRATEGY ON THE GROUP LEVEL

INTEGRAL RISK MANAGEMENT

REINSURANCE OPERATIONS

BUSINESS SUPPORT ACTIVITIES

Long-term focus

PARTNERS : GOALS

TRUST

Nurturing long-term partnerships

NEW MARKETS

Gradual entry into new markets

PROFITABILITY

Writing reinsurance contracts that ensure the achievement of the target rate of return in the long term

GROWTH : GOALS

Premiums by UWY and premium growth by region, incl. growth rate (extra-group)

3-year growth (2019 plan vs. 2016)

SCOPE OF STRATEGY ON THE GROUP LEVEL

INTEGRAL RISK MANAGEMENT

ASSET MANAGEMENT

BUSINESS SUPPORT ACTIVITIES

Long-term focus

MANAGEMENT : GOALS

HIGH SECURITY

Ensuring funds to meet all obligations arising out of insurance contracts

LIQUIDITY

Maintaining sucient liquidity forthe timely settlement of obligations underinsurance contracts as well as other obligations

DIVERSIFICATION

Ensuring diversification of investments by class, industry, region and issuer, in orderto maintain a set level of risk

ALM

Pursuing optimal asset and liability matching, especially in life insurance registers

MANAGEMENT : CILJI

RATE OF RETURN	Maintaining a rate of return of around 2% despite low interest rates
STRUCTURE	Increase in the proportion of investment property and alternative investments (infrastructure projects) in place of government bonds
OPTIMISATION	Improved portfolio optimisation model with an emphasis on proper calibration and a link to the capital model
MACHINE LEARNING	Development of an internal predictive model for active management and tactical decision making
ESG	Focus on environmentally and socially responsible investments while maintaining target return

SCOPE OF STRATEGY ON THE GROUP LEVEL

INTEGRAL RISK MANAGEMENT

CAPITAL GROWTH AND USE

BUSINESS SUPPORT ACTIVITIES

Long-term focus

USE OF CAPITAL : GOALS

REGION
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PENSIONS

START-UPS

ANCILLARY SERVICES

HEALTH BUSINESS

OTHER EU MARKETS

Strengthening the position in the Western Balkan markets (e.g. Serbia, Croatia)

Strengthening the position in Slovenia; entering foreign markets

Companies that could take the client-insurer relation to a higher level

Companies associated with the provision of health services, health insurers, medical centres

Looking for growth opportunities through newly established companies that innovative solutions / customer service o er

Entering other emerging EU markets