Pozavarovalnica Sava

Investor Presentation • Aug 21, 2020

of the SAVA INSURANCE GROUP 2020–2022

REASONS FOR THE REVISION OF THE 2020–2022 STRATEGIC PLAN

The strategy of the Sava Insurance Group for 2020–2022 has remained unchanged in terms of substance, but the financial plan for 2020–2022 has been changed to reflect the below impacts on the Group's operations.

Acquisition of NLB Vita d.d.

•Vita was included in the 2020 plan of the Sava Insurance Group as of 31 May 2020.

Impacts of Covid-19 on the operations of Group companies

• The Slovenian Institute of Macroeconomic Analysis and Development (IMAD) predicts a 7.6% decline in GDP (initial forecast: 1.5% growth) and 4.5% growth in 2021. Similar declines in GDP in 2020 are also expected in other countries where the Sava Insurance Group

- operates.

• The Group's non-life insurers will see a slight decline in gross premiums in 2020 due to a slowdown in economic activity in certain sectors, while the Group's life insurers are still expecting gross premiums to grow, although more modestly compared to the originally planned. The Group's reinsurer will also see a decline in the expected business growth, as cooling is expected of the majority of economies abroad where it operates. The Group's assistance business will be under the negative impact of the decline in the tourism and travel industry. On the other hand, the loss rate in the loss frequency of the motor insurance class has decreased. Covid-19 has had a strong impact also on financial markets, which in turn reduced the value of assets under management in the segment "Pension and asset management companies".

We are building a customer-centric, modern, digital, community-minded and sustainable INSURANCE GROUP.

#NeverAlone

Through commitment and constant progress, we ensure SECURITY AND QUALITY OF LIFE.

OUR MISSION

We are building a customercentric, modern, digital, community-minded and sustainable insurance Group.

OUR VISION

We grow relationships with our colleagues in a responsible, frank and respectful manner. We exceed customer expectations through our ongoing effort to make improvements and strengthen relationships. We are active in relation to the environment (e.g., owners and the social environment).

OUR VALUES

KEY TARGETS FOR 2020–2022

GROWTH IN REVENUES* > 5% annually

RETURN ON INVESTMENT

(EXCL. COST OF SUBORDINATED DEBT) > 1.5%

COMBINED RATIO (NON-LIFE + REINSURANCE)

< 95%

SOLVENCY RATIO 180–220%

HITTING THE TOTAL REVENUES MARK

of €720 m by 2022

RETURN ON EQUITY > 12%

* Included growth for 2021 and 2022.

KEY STRATEGIC FOCUS AREAS

PILLARS OF OPERATIONS

PILLARS OF OPERATIONS

KEY STRATEGIC FOCUS AREAS

DIGITAL TRANSFORMATION & PLACING THE CUSTOMER AT THE CENTRE

IT TRANSFORMATION ACQUISITIONS-BASED GROWTH

KEY GROUP STRATEGIC FOCUS AREAS 2020–2022

DIGITAL TRANSFORMATION AND PLACING THE CUSTOMER AT THE CENTRE

AREAS OF DIGITAL TRANSFORMATION

•IFRS 17 •IFRS 9

• Omni-channel approach
• Web
• •Inovative products
• New sales channels
• Business process modelling tools
• Sales process development
• Business intelligence

CUSTOMER AT THE CENTRE

OPTIMISATION REGULATORY

• Core reinsurance business IT solution • Core insurance business IT solution • Document management system

DIGITAL TRANSFORMATION & CUSTOMER RELATIONSHIP MANAGEMENT WITH CHANGES AT DIFFERENT BUSINESS LEVELS

CUSTOMER AT THE CENTRE

Switching between different channels of communication/buying and using different social networks

• • Strengthening the Sava brand & the promise #NeverAlone
• • Emphasis on synergies within the Group
• • Redirection from product view to customer view

CUSTOMER LIFE CYCLE CUSTOMERS/PEOPLE SIMPLICITY OF CUSTOMER EXPERIENCE THROUGH SMOOTHER PROCESSES

NeverAlone IN THE CUSTOMER EXPERIENCE

OMNI-CHANNEL EVERYWHERE AND ANYTIME

DIGITAL TRANSFORMATION OF THE USER EXPERIENCE AND DATA-DRIVEN SERVICES

CUSTOMER-CENTRICITY FROM THE CUSTOMER EXPERIENCE PERSPECTIVE

IT TRANSFORMATION

IT FOCUS AREAS 2020–2022

SHARED SERVICES/ SOLUTIONS & THEIR CONSOLIDATION

INTEGRATED DATA & QUALITY MANAGEMENT/ BUSINESS REPORTING

INTERNAL & EXTERNAL DIGITALISATION

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TARGET TIME	REQUIRED CAPACITY
Up to 7 years	Capacity to gradually re-engineer the applications in terms of technology and generations
Up to 2 years	Capacity to integrate an elaborate core business solution in a particular company (up to two at the same time)
Up to 14 months	Capacity to introduce major process synergies arising out of the Group level
Up to 4 months	Capacity to computerise ownership control over and management of an acquired company
Up to 3 months	Capacity to develop a complex market product
Up to 45 days	Capacity to analyse in detail and to make IT decisions regarding new initiatives
Up to 5 days	80% of upgrades to processes, products or new services are chiefly configurable by qualified users
24/7	Implementation of active defence of the Company's cyberspace
Ongoing task	Adequacy and organisation of expert IT staff and IT processes for providing IT support to strategic objectives
Ongoing task	IT management with a view to achieving value-added inputs in IT

IT STRATEGY HIGHLIGHTS 2020–2022

SUPPORTIVE ACTIVITIES

Proactive management and development of human resources IT governance with focus on the customer & company added value

SECONDARY DIRECTION

Regular support and updating for existing IT solutions depending on business requirements Major upgrade of system IT infrastructure and solutions Upgrading IT cyber security by setting up a 24/7 security operations centre

PRIMARY DIRECTION

Gradual replacement/upgrading of the core business New version of the sales module covering business partners Expanded and enhanced data warehouse & business intelligence, holistic management of data and data quality External and internal digitalisation to place the customer at the centre

ACQUISITIONS-BASED GROWTH

ACQUISITIONS-BASED GROWTH

	GOALS
ADRIATIC REGION INSURERS	Strengthening market shares in existing markets (Serbia, Croatia)
NEW EU MARKET INSURERS	Entry into new markets
PENSION COMPANIES	Strengthening market position in existing markets to achieve economies of scale
HEALTH BUSINESS	Comprehensive range of health services in Slovenia; expanding to other markets where the Group is present
SUPPORTIVE ACTIVITIES	Companies that could take the customer-insurer relationship to a higher level
ASSET MANAGERS	Achieving economies of scale; keeping pace with the development of capital markets in the region
SUSTAINABILITY PROJECTS	Improving energy efficiency, development of renewable sources, advancing quality of life & promoting social cohesion

KEY DEVELOPMENT AREAS

PILLARS OF BUSINESS OPERATIONS

PILLARS OF BUSINESS OPERATIONS

INTEGRAL RISK MANAGEMENT

SUPPORTING ACTIVITIES

INSURANCE & PENSIONS	REINSURANCE BUSINESS	OTHER ACTIVITIES
Slovenia non-life Slovenia life	Extra-Group Group	Sale of mutual fund units
Adria non-life		Health business
Adria life		Other
FoS business*
Assistance and other supportive activities
Pensions

Insurance company portfolios

Management of mutual fund assets

Pension portfolios

Organic growth Acquisitions Dividend policy

OTHER ACTIVITIES

ASSET MANAGEMENT

CAPITAL GROWTH & USE

* FoS business. Freedom of Services business. Business written within the European Economic Area based on the freedom of services right to provide services on a cross-border basis.

Selection of sales channel depending on product and market group

Developing customertailored products (price, duration)

Predictive behaviour

• Animal insurance
• Motor insurance
• Tourist trip cancellation insurance
• Legal assistance
• Moped insurance
• Bike and cyclist insurance
• Young driver insurance
• Home insurance
• Payment card insurance

NON-LIFE INSURANCE BUSINESS CUSTOMER LIFE CYCLE

Using customer life cycle analysis and predictive analytics in product development and marketing

SLOVENIA

Average annual growth in gross premiums written > 2%*

Average combined ratio (CR) < 94%

ADRIATIC REGION

Average annual growth in gross premiums written > 4%

Average combined ratio (CR) < 97%

NON-LIFE INSURANCE BUSINESS

* Included growth for 2021 and 2022.

%

• Supplementary health
• Best Doctors
• Accident
• Unit-linked
• Key 5

Upgrading investment activities by adding investment options and services

Focus on capital-light products with minimum financial guarantees

• Critical illness
• Term life
• Annuity
• Junior student grant
• Travel insurance with assistance abroad

LIFE BUSINESS (INSURANCE OF THE PERSON) CUSTOMER LIFE CYCLE

Using customer life cycle analysis and predictive analytics in product development and marketing

Linking insurance policies to customer lifestyles

Simple accident & health policies tailored to customer needs

Personalised offers depending on major customer life events

Linking life products and assistance services

LIFE BUSINESS

LIFE BUSINESS

SLOVENIA

Planned gross premiums written 2022 > €140 m Growth in gross premiums written in 2022 vs. 2019 > 80%

ADRIATIC REGION

Planned gross premiums written in 2022 > €11 m Growth in gross premiums written in 2022 vs. 2019 > 25%

ASSISTANCE SERVICES

DEVELOPMENT OF NEW SERVICES and taking over tourist

assistance services in the Croatian branch office

DIGITALISATION OF OPERATIONS, development of applications for assistance services for legal persons, testing the adequacy of the web concept for B2B operations

Focus on the development of LIFESTYLE ASSISTANCE

SPREADING THE PARTNER NETWORK to new markets

Support for insurance company activities placing the customer at the centre through quality assistance services

PENSIONS: DEVELOPMENT ACTIVITIES AND OBJECTIVES

DEVELOPMENT OF OWN SALES CHANNELS and sales support

IMPROVING THE PRODUCT MIX

by introducing life-cycle funds in the Adriatic region

DEVELOPMENT OF SERVICES in

cooperation with technological, innovative and specialist partners

Further development of SALES SUPPORT APPLICATIONS

Compound annual growth rate for assets under management > 9%

REINSURANCE BUSINESS

REINSURANCE BUSINESS

MODERATE GROWTH IN QUALITY BUSINESS depending on the situation in individual markets

APPROPRIATE FURTHER PORTFOLIO DIVERSIFICATION,

by region and partner

Focus on PROFITABILITY AND LOW PORTFOLIO VOLATILITY

EXTRA-GROUP BUSINESS

Average annual growth in gross premiums written > 3% Average combined ratio (CR) < 96%

OTHER ACTIVITIES

MUTUAL FUNDS

DEVELOPMENT OF EXISTING AND INTRODUCTION OF NEW

SALES CHANNELS, bank channels,

the Group's own sales network in Slovenia

CENTRALISATION OF ASSET MANAGEMENT, starting in Slovenia

CONSOLIDATION OF PRODUCT RANGE of mutual funds

Growth in assets under management in 2022 > 4 %

ASSET MANAGEMENT

ASSET MANAGEMENT RISK PROFILE

	GOALS
HIGH SECURITY	Ensuring funds to meet all obligations arising out of insurance contracts
LIQUIDITY	Maintaining sufficient liquidity for the timely settlement of obligations under insurance contracts as well as other obligations
DIVERSIFICATION	Ensuring diversification of investments by class, industry, region and issuer in order to maintain a set level of risk
ASSET-LIABILITY MANAGEMENT	Pursuing optimal asset-liability matching, especially in life insurance registers

ASSET MANAGEMENT RATE OF RETURN

	GOALS
RATE OF RETURN	Maintaining return on investment above 1.5% as low interest rates are likely to persist
STRUCTURE	Investments in bonds, deposits and cash to account for > 80% of the portfolio Ensuring that investment grade assets account for > 75%
SUSTAINABILITY ASPECT	(comprising mainly infrastructure investments and green bonds) to account for > 5% of the portfolio by the end of the strategy period
IT SUPPORT	Implementing a new IT solution (straight-through processing, IFRS 9, ALM, planning)

Focus on environmentally and socially responsible investments while maintaining target returns; ESG investments (comprising mainly infrastructure investments and green bonds) to account for > 5% of the portfolio by the

CAPITAL GROWTH AND USE

GROWTH DRIVERS

Average return on revenues

The circle size relates to operating revenues.

Sava Re has set itself the goal of increasing its dividend by an average of 10% per year over the period 2020–2022, thus distributing from 35% to 45% approximately of the net profit of the Sava Insurance Group each year.

DIVIDEND POLICY

The Company will prepare its dividend proposal taking into account the following:

• The estimated surplus of eligible own funds over the solvency capital requirement under Solvency II
• The Group's own risk and solvency assessment
• The capital models of the rating agencies S&P and AM Best
• The approved annual and strategic plans of the Group and the Company
• New development projects requiring additional capital
• •Any other relevant circumstances affecting the financial situation of the Company

CAPITAL USE AND OPTIMAL CAPITAL POSITION

FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements relating to Sava Re's 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 the 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.

DISCLAIMER