Pozavarovalnica Sava, d. d.

Analyst MeetingBusiness Results of

Sava Reinsurance Company FIRST QUARTER 2011

Maj 2011

Major events

Recapitalisation of the subsidiary company Sava životno osiguranje

EVENTS IN THE FIRST QUARTER 2011

EVENTS AFTER THE REPORTING DATE

On 3 March 2011, Mateja Treven starts her five-year term of office as Member of the Management Board

Request by the Securities Market Agency relating to a potential takerover bid for POSR shares

Election of Supervisory Board member in regular annual meeting

Claim from designers of Sava Re’s former logo

Decision on the recapitalisation of the subsidiary company Sava Tabak adopted

Decision on the recapitalisation of the subsidiary company Velebit usluge adopted

1

1Q 2011 results versus 2011 plan

2

KEY FEATURES OF FIRST QUARTER 2011 RESULTS:• Gross premiums written of over 25% of budgeted premium; premium volume shrank year-on-year as a result of both the strategy of lowering Sava's dependence on the Slovenian market and of increased selectivity in reinsurance underwriting in European markets (focus on profitable business)• Favourable movement in combined ratio (good results on both the domestic and foreign-sourced portfolio)• Ordinary first quarter movements in unearned premiums• Negative impact from impairment losses on equities (EUR 0,9m)

Sava Reinsurance Company 1-3 2010 1-3 2011 Plan 2011Index

2011/2010Realised as % of plan

Gross premiums written (EUR) 45.881.750 42.775.732 138.093.827 93,2 31%Net profit/loss for the period (EUR) 848.536 735.728 4.731.783 86,7 16%Net combined ratio 100,9% 96,4% 99,1% 95,5 97%

31.12.2010 31.3.2011 31.12.2011Shareholders' equity (EUR) 152.197.999 156.907.882 156.015.965 103,1 101%

Key items of the income statement3

Drop in premiums planned to decrease Slovenian premium

Effect of capital gains in prior year

Effect of movements in the US dollar

Sava Reinsurance Company

1-3 2010 1-3 2011Index

2011/2010(EUR)

  1 2 4=2/1

Net earned premiums 27.723.953 27.023.454 97,5

Investment income 2.435.079 1.845.030 75,8

Other technical income 1.494.729 601.904 40,3

Net claims incurred 18.567.674 16.706.460 90,0

Net operating expenses 9.400.033 9.333.787 99,3

Investment expenses 1.394.064 1.424.973 102,2

Other technical expenses 810.467 567.199 70,0

Net profit/loss for the period 848.537 735.728 86,7

Favourable claims development

Gross expenses in line with premium income; negative impact from deferred acquisition costs

Effect of impairment losses on investments of EUR 0,9m strongest in the first quarter

Effect of movements in the US dollar

Premiums earned and claims incurred4

Sava Re (EUR) 1-3 2010 1-3 2011 Index 2011/2010

Gross premiums written 45.881.750 42.775.732 93,2

Net premiums written 37.850.546 35.153.367 92,9

Change in net unearned premiums -10.126.593 -8.129.913 80,3

Net premiums earned 27.723.953 27.023.454 97,5

Sava Re (EUR) 1-3 2010 1-3 2011 Index 2011/2010

Gross claims paid 20.276.371 16.894.017 83,3Net claims paid 16.512.284 16.556.554 100,3

Change in the net claims provision 2.055.390 149.906 7,3

Net claims incurred 18.567.674 16.706.460 90,0

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

Slovenia International

25,0 20,923,918,8

65,872,3

mill

ion

EUR

Gross premiums written

1-3 2010

1-3 2011

Plan 2011

-4,2%

36,4% of plan realised

-9,8%

26,0% of plan realised

0,05,0

10,015,020,025,030,035,040,045,050,0

Slovenija Tujina

13,5

6,89,8

7,1

46,1

39,5

mill

ion

EUR

Gross claims paid

1-3 2010

1-3 2011

Plan 2011

-27,4% 4,5%

21,2% of plan realised

18,0% of plan realised

The gross claims provision grew by 2,2%, of this 17,9% relates to the reinsurers' share,

which explains the low figure for the change in the net claims provision.

Reinsurance business: Domestic premium5

2009 2010Aircraft hull 0,2% 0,1%Liability 3,4% 3,6%Credit 1,1% 0,9%Marine hull 1,1% 1,3%Motor casco 24,2% 25,5%MTPL 27,8% 26,6%Accident and life 9,6% 9,4%Non-life 32,6% 32,5%Total 100,0% 100,0%

Gross premiums written EUR 85m EUR 71m

1,7% 7,5%

90,9%

2009

Facultative XL Proportional

1,7% 8,6%

89,7%

2010

Facultative XL Proportional

Reinsurance business: Foreign-sourced premium

6

2009 2010Aircraft hull 1,0% 0,6%Liability 1,5% 1,3%Credit 0,1% 0,1%Marine hull 6,4% 7,2%Motor casco 4,5% 4,0%MTPL 5,3% 5,2%Accident and life 5,4% 4,9%Non-life 75,9% 76,7%Total 100,0% 100,0%

Gross premiums written EUR 62m EUR 71m

1,2%17,9%

80,9%

2009

Facultative XL Proportional

2,6%19,7%

77,7%

2010

Facultative XL Proportional

Key ratios for reinsurance business – complete portfolio

7

The gross incurred loss ratio includes apart from claims and premiums, the change in unearned premiums and in the claims provision. The gross expense ratio includes apart from commissions and premiums, the change in deferred acquisition costs and in unearned premiums (excluding administrative expenses).Net ratios include the effects of Sava Re's reinsurance coverage (showing the net account).

68,8%

107,3%

74,6%59,1% 56,3% 63,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

2007 2008 2009 2010 1Q 2010 1Q 2011

gross incurred loss ratio

23,6%

24,8%

23,2%22,7%

24,7%

26,5%

20,0%21,0%22,0%23,0%24,0%25,0%26,0%27,0%

2007 2008 2009 2010 1Q 2010 1Q 2011

gross expense ratio

67,6% 72,5% 75,8%66,2% 67,0%

61,8%

0,0%

20,0%

40,0%

60,0%

80,0%

2007 2008 2009 2010 1Q 2010 1Q 2011

Net incurred loss ratio

25,4%

27,1%

24,5% 24,9%

28,7% 29,1%

22,0%

24,0%

26,0%

28,0%

30,0%

2007 2008 2009 2010 1Q 2010 1Q 2011

Net expense ratio

1Q Results: Operating expenses8

(v EUR) 1-3 2010 1-3 2011 Index 2011/2010

       NET DEFERRED ACQUISITION COSTS 7.967.927 7.870.623 98,8

Acquisition costs including change in deferred acquisition costs 8.091.181 8.226.430 101,7

Gross deferred acquisition costs 10.393.979 9.478.164 91,2 Gross change in deferred acquisition costs

-2.302.798 -1.251.734 54,4

Income from reinsurance commission and reinsurance contract profit participation - 123.254 -355.807 288,7

       

ADMINISTRATIVE EXPENSES 1.432.106 1.463.164 102,2

Depreciation of operating assets 40.289 51.311 127,4

Labour costs 959.224 1.114.913 116,2

Costs of services by natural persons not performing business, incl. contributions 8.392 15.606 186,0

Other operating expenses 424.201 281.334 66,3       

NET OPERATING EXPENSES 9.400.033 9.333.787 99,3

1Q Results: Investment structure9

(EUR) 31 Dec 2010 31 Mar 2011  

Deposits and CDs 73.003.230 57.295.598

Bonds 108.879.179 117.674.363

Shares 9.350.409 9.847.772

Mutual funds 16.172.633 14.814.302  

Strategic shares 106.236.355 108.046.939  

Other 6.863.251 6.462.501  

Total 320.505.056 314.141.476  

18,2%

37,5%

3,1%4,7%

2,1%

34,4%

Portfolio split at 31 Mar 2011Deposits and money market instruments

Bonds

Shares

Mutual funds

Other

Strategic shares

22,8%

34,0%

2,9%5,0%

2,1%

33,1%

Portfolio split at 31 Mar 2010

1Q Results: Net investment income10

(EUR) 1-3 2010 1-3 2011 Index 2011/2010

Investment income 2.435.079 1.845.030 75,8

Investment expenses 1.394.064 1.424.973 102,2

Net investment income 1.041.015 420.057 40,4

Comprehensive income 2.202.720 769.555 34,9

Impairment losses on quoted equities already valued at fair value through the fair value reserve

300,9

311,1

316,6

320,5

314,11,4%

0,7%

1,2%

0,8%

0,5%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

290,0

295,0

300,0

305,0

310,0

315,0

320,0

325,0

31.3.2010 30.6.2010 30.9.2010 31.12.2010 31.3.2011

Invested assets (million EUR) Net investment income

Impacts on the investment portfolio: - Settlement of consideration for Zav. Illyria of EUR 8,5m. - Cash flows from reinsurance operations of EUR 1,8m and fair-value revaluation of investments amounting to EUR 0,3m.

Impact:- Impairment losses on the equity portfolio

1Q Results: Statement of financial position11

EQUITY AND LIABILITIES(31 Mar 2011) = EUR 423,7m

Structure 31 Dec 2010

Structure 31 Dec 2011

Equity 37,3% 37,0%

Technical provisions 41,6% 44,4%

Liabilities from operating activities

7,6% 7,1%

Other 13,5% 11,5%

EQUITY (31 Mar 2011) = EUR 156,9m 31 Dec 2010 31 Dec 2011 Index

Share capital 39.069.099 39.069.099 100,0

Share premium 33.003.752 33.003.752 100,0

Profit reserves 83.238.204 82.930.429 99,6

Fair value reserve -2.767.816 -2.733.989 98,8

Net profit/loss for the period 3.596.862 1.043.503 29,0

TR = EUR 188,2m 31 Dec 2010 31 Mar 2011 Index

Unearned premiums 41.861.443 53.300.709 127,3

Claims provision 131.492.898 134.337.924 102,2

Other TP 587.633 598.564 101,9

(EUR) 1-3 2010 1-3 2011

Available solvency margin 44.104.994 43.879.681

Required solvency margin 18.876.638 20.471.591

Surplus of available over required 25.228.356 23.408.090