A.M. Best Affirms Ratings of Pozavarovalnica Sava d.d.

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Pozavarovalnica Sava d.d. (Sava Re) (Slovenia), the operating holding company of the Sava Re Group. The outlook for both ratings is stable.

The ratings of Sava Re reflect its strong consolidated risk-adjusted capitalisation, good operating performance and solid business profile in Slovenia’s insurance market. A partly offsetting rating factor is Sava Re’s exposure to the challenging operating market conditions in Slovenia and the West Balkan region.

Sava Re’s consolidated risk-adjusted capitalisation is expected to remain strong in 2015, supported by solid earnings retention and a cautious growth strategy.

The Sava Re Group reported a pre-tax profit of EUR 22 million for the first six months of 2015 compared with EUR 16 million in the same period in 2014, due to a rise in premium income and solid investment earnings. The group’s focus on underwriting discipline and cost efficiencies arising from the integration of Zavarovalnica Maribor d.d. (Maribor) continues to support technical profit, as demonstrated by a combined ratio of 97.0% for the first half of 2015 (first half of 2014: 98.4%). Technical performance has been tempered in the period due to the effect of the depreciating Euro relative to its main international operating currencies, subsequently resulting in a higher claims experience. However, overall earnings have benefited from a rise in investment earnings owing to the group’s higher (currency-adjusted) asset base. In the absence of a major loss event in the remaining quarter of 2015, A.M. Best expects Sava Re’s net earnings in 2015 to be on par with the EUR 30 million forecasted by the group for the full year.

On 15 October 2015, Sava Re announced the merger of its four EU-based subsidiaries, partly with the objective to optimise operational synergies under the forthcoming Solvency II directive. The restructuring is expected to be completed by the end of 2016, with Sava Re benefiting from an anticipated EUR 6 million per annum of cost synergies. Although A.M. Best does not have an immediate concern regarding the reorganisation of Sava Re’s group operations, some integration risks exist.

The Sava Re Group has a strong business profile in its core market with a 17% market share in 2014. The group also benefits from its leading profile within the West Balkans markets and a developing position in the international reinsurance markets. Growth in premium volumes is expected to be modest in 2015. This reflects the challenging economic and insurance conditions in Slovenia and the highly competitive international reinsurance markets.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151020006488/en/

A.M. Best Company
Nicola Gaisford, +(44) 20 7397 0306
Financial Analyst
[email protected]
or
Deniese Imoukhuede, +(44) 20 7397 0277
Associate Director, Analytics
[email protected]
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Micron offers Taiwan workers up to 68-month bonuses as strike threat looms
• KeyBanc Starts Oiln (OLN) at Overweight
• Share buyback programme – week 37