Pozavarovalnica Sava, d. d.

Analyst MeetingPresentation of Business Results

Sava Reinsurance CompanyJanuary–September 2011

November 2011

Major eventsSIGNIFICANT EVENTS DURING THE REPORTING PERIOD

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

Sava Reinsurance Company and AtaHolding OJSC of Azerbaijan signed a memorandum of co-operation regarding the establishment of a life insurance company in Azerbaijan.

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In October 2011, Standard & Poor's reaffirmed their »A–« Rating for Sava Reinsurance Company.

In July the controlling company recapitalised its subsidiary Sava osiguruvanje, Macedonia, with EUR 2,5m. The resolution was entered in the court register in September 2011.

In August, the controlling company recapitalised its subsidiary Sava životno osiguranje with EUR 0,4m. The resolution was entered in the court register in September 2011.

1–9/2001 results versus plan

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Sava Reinsurance Company 1-9 2010 1-9 2011 Plan 2011Index

2011/2010Realised as % of plan

Gross premiums written (EUR) 113.390.047 110.933.925 138.093.827 97,8 80,3%

Net profit/loss for the period (EUR)

1.594.678 7.092.030 4.731.783 444,7 149,9%

Net combined ratio 101,3% 93,3% 99,1% 92,0 94,1%

  31.12.2010 30.9.2011 31.12.2011    

Shareholders' equity (EUR) 156.138.327 160.552.919 156.015.965 102,8 102,9%

Benign claims

environment

Planned drop in premium volume;

reducing exposure to the Slovenian insurance

market

Dividends of

Zavarovalnica Maribor

and Zavarovalni

ca Tilia

1.6

4.7

7.1

1.7

4.4

1.1%

3.1%

4.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

3Q 2010 Plan 2011 3Q 2011

mill

ion

EUR

Net profit Comprehensive income ROE

Major items of the income statement

5

(EUR)Three quarters

2010Three quarters

2011Index 11/10

Net earned premiums 92.527.581 92.265.324 99,7

Net claims incurred 65.084.043 57.893.474 89,0

Operating expenses 28.691.252 28.180.704 98,2

Other technical income 2.286.362 1.181.013 51,7

Other technical expenses 1.894.594 1.334.627 70,4

Technical result -854.947 6.037.532 906,2

Income from investments in affiliates 345.038 4.540.448 1.315,9

Investment income 7.253.756 6.186.996 85,3

Expenses for investments in affiliates 0 2.549.076  

Expenses for financial assets and liabilities 4.684.447 4.993.462 106,6

Net investment income 2.914.347 3.184.906 109,3

Other income 21.256 1.779 8,4

Other expenses 158 62 39,2

Result of other items (12 + 13 + 14) 21.098 1.717 8,1

Profit/loss before tax 2.080.498 9.224.155 443,4

Tax on profit 485.817 2.132.125 438,9

Net profit for the period 1.594.680 7.092.030 444,7 Note: Investment income includes deposits with cedants.

Benign claims environment

Lower commission rates

Dividends of ZM and Zavarovalnica Tilia of EUR 4,5m

Result of exchange rate movements

Impairment losses of EUR 5,4m

Impairment of Sava Tabak of EUR 2,5m

1–9/2011 results: premiums, claims, combined ratio

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0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Slovenia International

58.854.655.4 55.6

65.872.3

mill

ion

EUR

Gross premiums written

1-9 2010

1-9 2011

Plan 2011

-5,8%

84,2% of plan realised

1,8%

76,8% of plan realised

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Slovenia International

34.8

22.2

27.423.6

46.1

39.5

mill

ion

EUR

Gross claims paid

1-9 2010

1-9 2011

Plan 2011

-21,1% 6,2%

59,5% of plan realised

59,6% of plan realised

54.3 57.462.8

64.465.7

54.143.4 41.6

97.4%108.7%

96.6%103.3%

87.7%99.8%

83.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2005 2006 2007 2008 2009 2010 3Qs 2010 3Qs 2011

mill

ion

EU

R

Domestic portfolio

Net premiums written Net combined ratio

20.528.7

34.4

49.556.0

67.1

52.0 52.6

83.5%

64.7%

103.8%96.5% 94.2%

93.3% 91.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2005 2006 2007 2008 2009 2010 3Qs 2010 3Qs 2011

mill

ion

EU

RInternational portfolio

Net premiums written Net combined ratio

1–9/2011 results: operating expenses

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(EUR) 1-9 2010 1-9 2011Index

2011/2010

NET OPERATING EXPENSES 28.691.251 28.180.704 98,2

Acquisition costs including change in deferred acquisition costs

25.551.845 25.069.069 98,1

Acquisition costs 25.125.441 24.980.097 99,4

Change in deferred acquisition costs

426.404 88.973 20,9

Other operating expenses 4.530.585 4.578.978 101,1

Income from reinsurance commission and reinsurance contract profit participation

-1.391.179 -1.467.344 105,5

Gross expense ratio 26,2% 26,6% 101,9

Net expense ratio 31,0% 30,5% 98,5

1–9/2011 results: investment structure

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(EUR) 31.12.2010 30.9.2011  

Deposits and CDs 73.003.230 54.980.459

Bonds 108.879.179 121.253.305

Shares 9.350.409 9.044.993

Mutual funds 16.172.633 7.999.139

Strategic shares 106.236.355 117.030.606

Other 6.863.251 9.471.001

Total* 320.505.056 319.779.503

  

  

*The investment structure does not include deposits with cedants of EUR 7.6m.

Recapitalisation of Zavarovalnica Maribor of EUR 5.9m; other recapitalisations of EUR 5.2m and impairments of Sava

osiguruvanje, Macedonia, of EUR 2.5m

Change in the STRUCTURE of the investment portfolio

Reducing volatility of return and derisking the investment portfolio

17.2%

37.9%

2.8%2.5%

3.0%

36.6%

Structure at 30.9.2011Deposits and money market instruments

Bonds

Shares

Mutual funds

Other

Strategic shares

22.8%

34.0%

2.9%5.0%

2.1%

33.1%

Structure at 31.12.2010

1–9/2011 results: investment return & income9

(EUR) 1-9 2010 1-9 2011 Index 2011/2010

Investment income 9.710.720 10.637.536 109,5

Investment expenses 7.282.878 7.542.538 103,6

Net investment income* 2.427.842 3.094.999 127,5

*The net investment income does not include interest income from deposits with cedants of EUR 120.000 for 3Q 2010 and EUR 90,000 for 3Q 2011.

Impacts on INVESTED ASSETS and the INVESTMENT RETURN:

- Settlement of consideration for Zavarovalnica Illyria of EUR 8.5m - Net cash flows from reinsurance operations of EUR 10.7m

- Impairment of goodwill of Sava osiguruvanje, Macedonia of EUR 2.5m

- Impairment of other investments of EUR 5.4m

- Dividend income of EUR 4.7m

300.9

311.1

316.6

320.5

314.1

309.8

319.81.4%

0.7%

1.2%

0.8%

0.5%

-0.02%

1.3%

-0.2%

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 30.6.2011 30.9.2011

Invested assets (million EUR) Investment return

1–9/2011 results: statement of fin. position

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EQUITY AND LIABILITIES (30 .9.2011) = EUR 422.9m

Structure 31.12.2010

Structure 31.12.2011

Equity 37,3% 38,0%

Technical provisions 41,6% 44,6%

Liabilities from operating activities

7,6% 6,0%

Financial liabilities 8,1% 8,1%

Other liabilities from operating activities

5,3% 3,4% EQUITY (30.9.2011) = EUR 160,6m

31.12.2010 30.9.2011 Index

Share capital 39.069.099 39.069.099 100,0Share premium 33.003.752 33.003.752 100,0Profit reserves 83.238.204 82.994.634 99,7Fair value reserve -2.767.816 -5.445.255 196,7Net profit for the period 3.596.862 7.335.600 203,9

TP = EUR 188,6m 31.12.2010 30.9.2011 Index

Unearned premiums 41.861.443 45.776.823 109,4

Provision for outstanding claims

131.492.898 142.256.220 108,2

Other TP 587.633 598.780 101,9

(EUR) 1-9 2010 1-9 2011

Available capital 42.276.241 33.834.199

Required kapital 20.300.831 21.140.440

Excess of available over required capital*

21.975.410 12.702.759

208,2% 160,1%*estimate until end of 2011: EUR 19.503.024 (193%)

Thank you for your attention.

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