Pozavarovalnica Sava

Investor Presentation • Jun 1, 2023

1–3/2023 unaudited results Sava Insurance Group

31 May 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.

CONTENTS

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

GROUP RESULTS

Highlights 1–3/2023

Growth in gross written premiums of 9.8% – 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 €20.1 million (1–3/2022: €8.2 million)

Better insurance service result for non-life, EU: high inflationary pressures on claims (especially in motor insurance) in Q1 2022, this impact has been reduced due to price increases in mid-2022

Better insurance service result for reinsurance: higher insurance revenue, more major claims born by reinsurers and a lower impact of inflation than in the previous year

Better investment result: in Q1 2022, a significant negative impact of financial market developments on the net investment return from fair value losses on FVTPL investments

New management board member David Benedek started his five-year term of office on 22 March 2023

Key figures

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

million € % , except	1–3/2022	1–3/2023	plan 2023	Change 2023/2022
volume Business	236 8	260 2	800 >	9% 9
premiums written Gross	231 7	254 4		8% 9
Insurance revenue	136 9	153 2		9% 11
Profit of , net tax	8 2	20 1	53 >	144 3%
equity* Return on	5 9%	13 4%	9 5% >	+7 5 p.p.
(non reinsurance) Combined -life and ratio	0% 94	4% 88	95% <	-5 6 p.p.
portfolio* the investment Return on	0 2%	2 2%	5% 1 >	+2 0 p.p.
	31/12/2022	31/3/2023	31/12/P2023
Shareholders' equity	521 2	552 5		6 0%
(CSM) Contractual service margin	137 3	147 0		1% 7
Total portfolio investment	1 416 7 ,	1 448 9 ,		3% 2
for benefit of the policyholders who bear the risk investment Assets	498 8	523 0		9% 4
funds in pension savings Assets company	1 013 3 ,	1 061 0 ,		7% 4
under fund Assets management at management company	494 4	540 5		3% 9

Business volume

Sava Insurance Group / Group results 7 / ³¹

Consolidated gross premiums written by class of insurance

Growth in business volume of 9.9%

Breakdown of profit before tax by segment

Profit before tax higher by 147.6%

Sava Insurance Group / Group results 10 / ³¹

Contractual service margin (CSM) by operating segment

SEGMENT REPORTING

Non-life EU

• Growth mainly in the motor personal lines segment due to price increases (adjusted for inflation) and upswing in the number of policies sold

• Favourable claims development in old U/W years
• Positive impact from increase in the discount curve on incurred claims

• Fair value losses on FVTPL investments in Q1 2022 due to financial market turbulence
• Larger investment portfolio and reinvestment at higher interest rates
• Higher insurance finance expenses due to increase in discount curves

Life EU

Sava Insurance Group / Segment reporting 14 / ³¹

• Higher sales of single premium policies in Q1 2022 – positive 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

• Negative impact from change in fair value of FVTPL investments in Q1 2022 due to financial market turbulence

Reinsurance

Sava Insurance Group / Segment reporting 15 / ³¹

• Positive price developments in reinsurance markets
• New business opportunities captured
• Non-proportional reinsurance rates up more than 20%, 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
• Inflationary impact in Q1 2022

• Negative impact from change in fair value of FVTPL investments in Q1 2022 due to financial market turbulence
• Higher interest revenue in Q1 2023

Non-life non-EU

Sava Insurance Group / Segment reporting 16 / ³¹

and property

Life non-EU

Sava Insurance Group / Segment reporting 17 / ³¹

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

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

Pensions and asset management

• Negative impact in Q1 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

FINANCIAL INVESTMENTS

Investment portfolio and AuM

Net investment income of and return on the investment portfolio

Q1 highlights

• Positive contribution from FVTPL portfolio due to the favourable movement of equity investments in Q1
• No impact from developments in the US banking market and the Swiss bank Credit Suisse
• Higher interest revenue due to (re)investment in higher-yielding assets

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

Asset allocation

Q1 highlights

• No significant impact from IFRS 9 on the investment portfolio

• Increased focus on portfolio security and liquidity

• Positive impact from calmer bond markets reflected in higher bond investment values

• Positive impact from equity markets on equity and mutual fund positions – positions are reduced through sales of investments

• Reinvestment return of around 2.9% in Q1

million €	31/12/2022	31/3/2023	Difference
Fixed income investments	9 1 174 ,	204 1 4 ,	29 5
bonds Government	734 9	771 1	36 2
bonds Corporate	421 4	415 5	9 -5
& Deposits CDs	18 7	17 8	-0 9
Shares and funds	0 47	44 1	-3 0
Shares	24 9	25 7	0 8
Mutual funds	22 2	18 4	-3 8
Alternative investments	93 1	92 9	-0 2
Infrastructure funds	53 9	2 54	0 4
Real funds estate	16 5	16 0	-0 5
Investment property	22 8	22 7	-0 1
Cash and cash equivalents	78 6	83 8	5 3
Other	23 1	23 6	0 6
Total portfolio investment	1 416 7 ,	1 448 9 ,	32 2

-

Classification of financial assets

Q1 highlights

• No major effects in Q1
• Growth in share of FVOCI assets as a result of more favourable developments in the bond markets, which affected the value of bond investments

Comparison with IAS 39

• IFRS 9 AC portfolio combines IAS 39 LR and HTM portfolios
• The AC bond investment balance is reduced by ECL
• Shares and funds (including alternative) classified as AFS under IAS 39 are classified as at FVTPL under IFRS 9 – greater impact on the income statement
• FVTPL investments also include bond investments that do not pass the SPPI test

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

	31/3/2023
Share capital (€ million)	71.9
Market capitalisation (€ million)	393.6
Trading symbol	POSR
No. of shares	17,219,662
No. of own shares	1,721,966
No. of shareholders	4,314

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

Dividend policy

28 / ³¹ Sava Insurance Group / POSR share and dividend policy

* The 2023 dividend yield depends on the share price movement in the period between the date the dividend is declared and the ex-dividend date.

• Proposed dividend payout in 2023 in respect of the 2022 profit: proposed dividend payment of €24,796,313.60, or €1.60 gross per share. The general meeting of shareholders is scheduled to be held on 5 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: ir@sava-re.si

Thank you.