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.
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT INSURANCE OPERATIONS REINSURANCE OPERATIONS ASSET MANAGEMENT CAPITAL GROWTH AND USE BUSINESS SUPPORT ACTIVITIES Long-term focus
CHIEF DIRECTIONS FOR THE PERIOD 2017 2019 1 2 3 4 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
KEY TARGETS DIRECTION AS PER RISK STRATEGY 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
GROSS PREMIUMS WRITTEN BY OPERATING SEGMENT STRUCTURE : GOALS 2016 Long-term focus 19% 12% Reinsurance operations Insurance operations, Western Balkans 20% 20% 69% Insurance operations, Slovenia 55% Other* 5% *The "other" item includes health, assistance and pension business
GROSS PREMIUMS WRITTEN BY OPERATING SEGMENT STRUCTURE : GOALS Gross premiums written by operating segment Structural change: 2019 plan vs. 2016 (p.p.) 490 million 514 million 100.0% 90.0% 80.0% 70.0% 60.0% 1.3% 1.7% 16.3% 12.7% 11.2% 14.3% Life international Life Slovenija Non-life international Life international -3.6 0.4 Life Slovenija 50.0% 40.0% 52.2% 50.4% Non-life Slovenia Non-life international 3.1 30.0% 20.0% 10.0% 0.0% 18.9% 20.8% Reinsurance -1.7 Reinsurance Non-life Slovenia 1.9 2016 Plan 2019-4.0-3.0-2.0-1.0 0.0 1.0 2.0 3.0 4.0
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT INSURANCE OPERATIONS BUSINESS SUPPORT ACTIVITIES Long-term focus
INSURANCE OPERATIONS CLIENT IN THE CENTRE CLIENT : GOALS NEEDS ACCESSIBILITY SATISFACTION Developing products tailored to client's needs (e.g. assistance services in addition to insurance) Multi-channel approach (clients opt for their favoured channel) Measuring client satisfaction using acknowledged methods TRANSPARENCY Providing clients with an insight into the processing of business PERCEPTION Strengthening brand recognition
INSURANCE OPERATIONS DIGITALISATION DIGITALISATION : GOALS ONLINE Setting up online policy sales and claims reporting COMPREHENSIVE INNOVATION CONNECTION Setting up a new service centre with a comprehensive customer relationship management tool (CRM) Developing innovative services and IT-supported products Providing additional support to clients (assistance companies and call centres for home, motor and medical assistance and other services)
INSURANCE OPERATIONS ORGANIC GROWTH 350.0 GROWTH : GOALS Premiums and growth plan 2019 vs. 2016 by insurance market -1% 25.0 3-year growth (plan 2019 / 2016) 3-300.0 20.0 +20% +34% +23% -3% +37% 250.0 15.0 200.0 10.0 150.0 100.0 336.1 332.2 5.0 0.0 16.1 19.3 million Slovenia million Serbia Croatia Macedonia Montenegro Kosovo 12.3 16.5 12.2 15.0 11.7 11.3 8.8 12.1 2016 Plan 2019
INSURANCE OPERATIONS STRUCTURAL MOVEMENTS STRUCTURE : GOALS SLOVENIA GPW by class of business Structural change: 2019 plan vs 2016 (p.p.) 336 million 332 million 100.0 % 90.0 % 80.0 % 4.9% 19.2% 17.4% 5.6% Personal insurance Life insurance Personal insurance 0.7 70.0 % 60.0 % 50.0 % 33.5% 33.8% Other non-life insurance -1.8 Life insurance 40.0 % 30.0 % 20.0 % 42.4% 43.2% Motor insurance Other non-life insurance 0.3 10.0 % 0.0 % Motor insurance 0.9 2016 Plan 2019-2.0-1.5-1.0-0.5 0.0 0.5 1.0
INSURANCE OPERATIONS STRUCTURAL MOVEMENTS STRUCTURE : GOALS INTERNATIONAL GPW by class of business Structural change: 2019 plan vs. 2016 (p.p.) 61 million 74 million 100.0 % 90.0 % 80.0 % 70.0 % 60.0 % 4.2% 4.6% 10.4% 11.8% 21.7% 25.3% Personal insurance Life insurance Other non-life insurance Personal insurance Life insurance 0.4 1.4 50.0 % 40.0 % 30.0 % 20.0 % 63.7% 58.3% Motor insurance Other non-life insurance 3.6 10.0 % 0.0 % -5.3 Motor insurance 2016 Plan 2019-6.0-4.0-2.0 0.0 2.0 4.0 6.0
INSURANCE OPERATIONS SYNERGISTIC EFFECTS IN THE EU SYNERGIES : GOALS 5.00 4.00 3.00 2.00 Realisation of synergies by year 2017 2018 2019 Savings in 2019 and beyond each year: > 6 million 1.00 0.00 1.0 2.0 3.0 2.0 4.7 2.0-1.00-2.00-0.8-0.6-0.7 million cost synergy product synergy one-off expenses for the realisation of synergies
INSURANCE OPERATIONS PENSION INSURANCE PENSION : GOALS GROWTH M&A SALES SYNERGY 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. Seeking opportunities for companies / portfolios in Slovenia and the Balkans Expansion of sales channels (bancassurance and the Internet) and enhanced communication with policyholders Use of marketing and sales synergies in the group ANNUITIES Increase in market share in annuity business, also through the acquisition of policyholders from other pension companies
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT REINSURANCE OPERATIONS BUSINESS SUPPORT ACTIVITIES Long-term focus
REINSURANCE OPERATIONS LONG-TERM PARTNER 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
REINSURANCE OPERATIONS ORGANIC GROWTH GROWTH : GOALS Premiums by UWY and premium growth by region, incl. growth rate (extra-group) 3-year growth (2019 plan vs. 2016) 60.0 +9% +15% 50.0 40.0 30.0 +7% +10% +385% +1% +44% +122% +21% 20.0 10.0 0.0 46.4 50.6 25.0 28.8 5.4 5.8 4.6 5.1 0.9 4.4 4.0 4.0 2.4 3.5 0.9 2.0 1.9 2.3 Asia EU members Non-EU members Russia and CIS Australia and Oceania Middle East Africa Latin America Other EPI 2016 Plan 2019
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT ASSET MANAGEMENT BUSINESS SUPPORT ACTIVITIES Long-term focus
ASSET MANAGEMENT RISK PROFILE MANAGEMENT : GOALS HIGH SECURITY LIQUIDITY DIVERSIFICATION ALM Ensuring funds to meet all obligations arising out of insurance contracts Maintaining sufficient liquidity for the timely settlement of obligations under insurance contracts as well as other obligations Ensuring diversification of investments by class, industry, region and issuer, in order to maintain a set level of risk Pursuing optimal asset and liability matching, especially in life insurance registers
ASSET MANAGEMENT PROFITABILITY MANAGEMENT : CILJI RATE OF RETURN STRUCTURE OPTIMISATION MACHINE LEARNING ESG Maintaining a rate of return of around 2% despite low interest rates Increase in the proportion of investment property and alternative investments (infrastructure projects) in place of government bonds Improved portfolio optimisation model with an emphasis on proper calibration and a link to the capital model Development of an internal predictive model for active management and tactical decision making Focus on environmentally and socially responsible investments while maintaining target return
SCOPE OF STRATEGY ON THE GROUP LEVEL SAVA RE GROUP INTEGRAL RISK MANAGEMENT CAPITAL GROWTH AND USE BUSINESS SUPPORT ACTIVITIES Long-term focus
CAPITAL GROWTH AND USE USE OF CAPITAL : GOALS REGION PENSIONS ANCILLARY SERVICES HEALTH BUSINESS START-UPS 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 offer innovative solutions / customer service Entering other emerging EU markets