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Audited Annual Report of the Sava Insurance Group and Sava Re d.d.for 2023
Ljubljana, 15 March 2024
2
3
Declaration of the management board
To the best of our knowledge and in accordance with the International Financial Reporting Standards, Slovenian laws, the Solvency II Directive, and the international sustainability reporting standards of the Global Reporting Initiative (GRI), the consolidated and separate financial statements give a true and fair representation of the financial position and profit or loss of the Sava Insurance Group and Sava Re d.d.1 The business report provides a fair view of the development and performance of the Group and the Company, and their financial position, including a description of the principal risks to which the consolidated companies are exposed.
Marko Jazbec, Chairman of the Management Board
Polona Pirš Zupančič, Member of the Management Board
Peter Skvarča, Member of the Management Board
David Benedek, Member of the Management Board
Ljubljana, 15 March 2024
1 GRI 2-2, 2-3.
4
Key figures
EUR
2023
2022
Change
Index
Business volume
910,113,382
795,535,596
114,577,786
114.4
Insurance revenue
697,562,811
608,987,793
88,575,018
114.5
Insurance service result
83,477,762
76,073,417
7,404,345
109.7
Finance result
18,097,793
1,511,878
16,585,915
-
Net profit
64,657,172
46,923,441
17,733,731
137.8
31 December 2023
31 December 2022
Change
Index
Equity
585,663,613
531,463,677
54,199,936
110.2
Net contractual service margin (CSM)
149,351,142
129,365,490
19,985,652
115.4
Investment portfolio position
1,503,282,095
1,415,231,399
88,050,696
106.2
Total assets
2,568,546,136
2,312,140,248
256,405,888
111.1
Assets under management
2,411,800,065
2,006,528,479
405,271,586
120.2
2023
2022
Change
Index
Combined ratio
93.1%
92.6%
+0.5 p.p.
-
Return on equity (ROE)
10.8%
8.3%
+2.5 p.p.
-
Return on investment portfolio
2.1%
0.6%
+1.5 p.p.
-
Solvency ratio
188%–194%
183%
-
-
For definitions and calculations, please refer to the appended glossary.
The key figures for 2023 with comparative data for 2022 have been prepared in accordance with IFRS 17 and IFRS 9, which entered into force on 1 January 2023. The methodologies and estimated impact of the transition to the new standards are presented in the notes to the financial statement of the annual report.
5
Contents
Business report...................................................................................................................8
1 Letter from the chairman of the management board..................................................10
2 Profile of Sava Re and the Sava Insurance Group........................................................12
2.1 Sava Re company profile........................................................................................................12
2.2 Significant events in 2023......................................................................................................13
2.3 Significant events after the reporting date............................................................................13
2.4 Sava Re rating profile.............................................................................................................13
2.5 Profile of the Sava Insurance Group......................................................................................13
2.6 Composition of the Sava Insurance Group.............................................................................15
2.7 General information on Group companies as at 31 December 2023....................................16
2.8 Changes in Group composition..............................................................................................20
3 Shareholders and share trading..................................................................................20
3.1 Responsibility to investors.....................................................................................................24
4 Report of the supervisory board.................................................................................26
5 Corporate governance statement...............................................................................40
5.1 Corporate governance policy.................................................................................................40
5.2 Statement of compliance with the Slovenian Corporate Governance Code for Listed Companies.............................................................................................................................40
5.3 Governing bodies of Sava Re..................................................................................................42
5.4 Internal control and risk management systems relating to financial reporting.....................54
5.5 External audit.........................................................................................................................55
5.6 Disclosures in accordance with Article 70(6) of the Companies Act......................................55
5.7 Governance of Sava Insurance Group members....................................................................57
6 Mission, vision, strategic focus and goals...................................................................58
6.1 Our purpose...........................................................................................................................58
6.2 Strategic focus of the Sava Insurance Group.........................................................................59
6.3 Business plan of the Sava Insurance Group for 2024.............................................................60
6.4 Goals achieved in 2023..........................................................................................................61
7 Business environment................................................................................................64
8 Review of operations of the Sava Insurance Group and Sava Re.................................70
8.1 Sava Insurance Group............................................................................................................70
8.2 Sava Re...................................................................................................................................93
9 Human resource management.................................................................................100
9.1 Strategic guidelines for human resource management.......................................................100
9.2 Key activities in human resource management...................................................................100
9.3 Employer brand development and management................................................................100
9.4 Recruitment and staffing levels...........................................................................................101
9.5 Employee training and development...................................................................................107
9.6 Employee management and motivation..............................................................................108
10 Risk management.....................................................................................................112
10.1 Risk management system....................................................................................................112
10.2 Material risks of the Sava Insurance Group.........................................................................116
11 Internal auditing in the Sava Insurance Group..........................................................121
12 Information technology............................................................................................122
Sustainability report.......................................................................................................124
13 Sustainability report.................................................................................................126
13.1 Sustainable Development Strategy of the Sava Insurance Group for 2023–2027...............127
6
Relations with stakeholders............................................................................................................129
13.2 Economic aspect..................................................................................................................132
13.3 Social aspect.........................................................................................................................145
13.4 Responsibility to the community.........................................................................................151
13.5 Environmental aspect..........................................................................................................154
13.6 Sava Insurance Group sustainability performance indicators..............................................158
Financial statements with notes......................................................................................159
14 Auditor’s report........................................................................................................162
15 Financial statements................................................................................................171
15.1 Statement of financial position............................................................................................171
15.2 Income statement................................................................................................................172
15.3 Statement of other comprehensive income........................................................................173
15.4 Cash flow statement............................................................................................................174
15.5 Statement of changes in equity for 2023.............................................................................175
15.6 Statement of changes in equity for 2022.............................................................................176
16 Notes to the financial statements.............................................................................177
16.1 Basic details..........................................................................................................................177
16.2 Business combinations and overview of Group companies.................................................178
16.3 Consolidation principles.......................................................................................................182
16.4 Significant accounting policies.............................................................................................183
16.5 Standards and interpretations issued but not yet effective, and new standards and interpretations.....................................................................................................................226
16.6 Transition to the new standards IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments”........................................................................................................................228
16.7 Risk management.................................................................................................................241
16.8 Notes to the financial statements........................................................................................303
16.9 Contingent assets and liabilities...........................................................................................390
16.10 Related party disclosures.....................................................................................................390
17 Significant events after the reporting date...............................................................396
Appendices (unaudited)..................................................................................................398
Appendix A – Glossary of selected terms and calculation methodologies for indicators..400
Appendix B – GRI index...................................................................................................401
Appendix C – Disclosures required by Disclosures Delegated Regulation 2021/2178.......404
Appendix D – Disclosures required by Disclosures Delegated Regulation 2021/2178 (non-life insurance and reinsurance).................................................................................408
Appendix E – Discount rates............................................................................................409
Appendix F – Fund assets not included in the consolidated financial statements of the Sava Insurance Group.......................................................................................................410
7
8
Business report
9
10
1 Letter from the chairman of the management board 2
Dear Shareholders, Business Partners and Employees,
The financial year 2023 was another trying year that brought completely new challenges for the Sava Insurance Group. The war in Ukraine led to a surge in inflation. In addition, Slovenia and other countries in which the Group operates were hit by severe storms and floods during the summer, resulting in significant damage to property. We focused our efforts on fast-track claims handling to fulfil our “Never Alone” promise, offering policyholders the necessary support and assistance. First and foremost, we stood by our customers on the ground by simplifying the reporting and claims handling processes. Then, we provided an extra day of volunteering leave and financial support to the worst-affected areas. The loss events resulted in claims totalling EUR 88 million, with a lower impact on the Group’s result due to adequate reinsurance protection.
Despite the significant impact of these claims, particularly on Zavarovalnica Sava, the Group exceeded its profit guidance. The Group’s other operating segments performed better than planned. Sava Re’s business in international reinsurance markets contributed significantly to the above-target performance. The market growth in reinsurance prices over the last few years, the restructuring of the reinsurance portfolio to improve profitability and the absence of major claims were the driving forces behind the strong outperformance of the profit target. In addition, the investment result played a significant role in exceeding the plan. Due to rising interest rates, the Group’s investment return was 2.1%, 0.6 percentage points higher than planned. The Group’s companies that manage financial assets also closed 2023 well ahead of target. This performance was driven by both capital market movements and increased inflows into the funds. All this helped to mitigate the negative impact of the storm and flood losses.
The Group achieved strong organic growth across all segments and markets, bringing our business volume to EUR 910 million, which is almost a 15% increase year on year. I am confident that we will exceed the EUR 1 billion threshold by the end of the strategy period. We are pleased that our Group companies are vastly improving their market position and expanding their product range and sales channels. Our strong organic growth is supporting us to operate more cost-effectively. The Group’s revenue growth also demonstrates its ability to respond to external circumstances by adjusting pricing, thus ensuring stable performance.
The customer solutions and processes put in place during the last strategy period helped speed up claims handling, which has already resulted in faster settlement of storm and flood claims. Continuing our customer-centric approach and optimising our business processes are both focus areas that will maintain momentum in the 2023–2027 strategy period. These focus areas will drive further improvements in our business – particularly in streamlining our business processes and enhancing our relationship with customers at all points of the customer journey.
In the non-life business, we further developed our product range in line with the needs and wishes of our customers. We offered products with strong sustainability credentials, products targeted at specific policyholder segments, and products promoting online sales and bancassurance. In the life and pension business, our focus over the past year was to expand the life risk insurance ecosystem by adding more customer services, developing additional health coverage options, and upgrading unit-linked life insurance and bancassurance products.
In 2023, an independent institution verified our carbon footprint calculation for the previous year. This calculation provides the basis for setting more precise milestones on our way towards our strategic target of reducing our carbon footprint by 55% in scope 1 and 2 emissions by 2030. An important measure taken was relocating the head offices of six Slovenian companies and one Macedonian insurance company to new, more energy-efficient premises, which has already helped to reduce our carbon footprint for 2023. Last year, we began systematically collecting and processing data across our
2 GRI 2-22.
11
value chains (insurance portfolio, investment portfolio and suppliers) to identify the necessary actions to achieve our sustainability goals. In terms of organisational structure, sustainability was being progressively integrated into the Group companies’ operations in 2023 and is now increasingly taken into account in day-to-day activities. Our employees are actively developing a culture of sustainability to set an example for the wider community. This involves organising a number of volunteer activities as part of the Heart for the World initiative. In 2023, our employees dedicated more than 5,000 hours to corporate volunteerism.
Another important milestone in 2023 was the successful transition to the new IFRS 17 and IFRS 9 accounting standards, which required a substantial effort from our employees and involved restructuring some IT systems, processes and organisation over the past few years. I believe the transition has been successful, and I am confident that the data collected at the end of the project will help us better monitor our business and respond more quickly to emerging risks.
To sum up, 2023 posed a particular challenge for the Group due to the unprecedented scale of the summer floods that affected a considerable part of Slovenia. I am proud that the Group demonstrated these three qualities in such circumstances:
Heart – our loss adjusters, agents and other colleagues gave their “all” to ensure that the policyholders affected were able to get their claims paid as quickly as possible.
Flexibility – although the structure of an insurance company is complex, some processes at Zavarovalnica Sava were streamlined in response to the massive flood damage.
Business line diversification – the Group ended the year with a solid performance despite the significant impact of flood claims on the business result. In particular, reinsurance in international reinsurance markets performed significantly better than planned in 2023. In addition to external influences, this is due to the hard work of our reinsurance team to improve the portfolio towards profitability over the last few years.
Many thanks to all our colleagues for their contributions and efforts in 2023. We have shown that by working together, we can overcome major challenges and accomplish ambitious goals.
Marko Jazbec
Chairman of the Management Board of Sava Re d.d.
12
2 Profile of Sava Re and the Sava Insurance Group
2.1 Sava Re company profile 3
3 GRI 2-1, 2-3.
Company name
Sava Re d.d.
Business address
Dunajska 56
1000 Ljubljana
Slovenia
Telephone (switchboard)
+386 1 47 50 200
Facsimile
+386 1 47 50 264
Email
info@sava-re.si
Website
www.sava-re.si
ID number
5063825
Tax identification number
SI17986141
LEI code
549300P6F1BDSFSW5T72
Share capital
EUR 71,856,376
Shares
17,219,662 no-par-value shares
Management and supervisory bodies
MANAGEMENT BOARD
Marko Jazbec (chairman)
Polona Pirš Zupančič
Peter Skvarča
David Benedek
SUPERVISORY BOARD
Davor Ivan Gjivoje Jr (chairman)
Keith William Morris (deputy chairman)
Klemen Babnik
Matej Gomboši
Edita Rituper (employee representative)
Blaž Garbajs (employee representative)
Date of entry into court register
10 December 1990, Ljubljana District Court
Certified auditor
Deloitte Revizija d.o.o.
Dunajska Cesta 165
1000 Ljubljana
Slovenia
Largest shareholder and holding
Slovenski Državni Holding d.d. (Slovenian Sovereign Holding) and the Republic of Slovenia – together 31.6% (no-par-value shares: 5,436,319)
Credit ratings:
S&P Global Ratings
AM Best
A /stable/, September 2023
A /stable/, September 2023
Investor relations contact
ir@sava-re.si
The Company has no branches.
13
2.2 Significant events in 2023
Major loss events
In the summer of 2023, Slovenia and certain other countries in which the Group is present were hit by a wave of storms and floods that caused significant property damage. The gross claims resulting from these events amounted to EUR 88.3 million. Taking into account reinsurance protection, the net impact of these events on the Group’s result was EUR 27.4 million.
Changes to the management and supervisory boards
Changes in the composition of the management and supervisory boards are described in section 5.3 “Governing bodies of Sava Re”.
Other significant events
•In June 2023, the 39th general meeting of shareholders was held 4.
•In September 2023, the rating agencies S&P Global Ratings and AM Best reaffirmed the “A” ratings of Sava Re and Zavarovalnica Sava. The outlook was stable.
2.3 Significant events after the reporting date
•On 22 February 2024, Sava Re signed a contract to acquire a 2.5% stake in TBS Team 24. Upon completion of the transaction, Sava Re held a 90% stake in the company as at 27 February 2024.
2.4 Sava Re rating profile
“A” ratings affirmed with stable outlook
Sava Re is rated by two rating agencies, S&P Global Ratings and AM Best.
Financial strength ratings of Sava Re
Agency
Rating 5
Outlook
Latest review
S&P Global Ratings
A
stable
September 2023: existing rating affirmed
AM Best
A
stable
September 2023: existing rating affirmed
2.5 Profile of the Sava Insurance Group 6
The Group is one of the leading insurance groups based in the Adriatic region, with a presence in six countries of the region. Pozavarovalnica Sava d.d. (Sava Re) is the parent company of the Sava Insurance Group and a reinsurance company headquartered in Ljubljana, Slovenia. The Group operates in the insurance and asset management sectors, and also engages in secondary activities. It continuously improves the quality and integrity of the services it provides:
•Reinsurance: Sava Re is one of the largest reinsurance companies based in southeastern Europe, serving more than 450 partners in over 110 reinsurance markets worldwide and building a globally diversified reinsurance portfolio.
4 For more information, see sections 3 “Shareholders and share trading” and 5.3.1 “General meeting of shareholders”.
5 The credit rating agency S&P Global Ratings uses the following scale for assessing financial strength: AAA (extremely strong), AA (very strong), A (strong), BBB (adequate), BB (less vulnerable), B (more vulnerable), CCC (currently vulnerable), CC (highly vulnerable), R (under regulatory supervision), SD (selectively defaulted), D (defaulted), NR (not rated). Plus (+) or minus (-) following the credit rating from AA to CCC indicates the relative ranking within the major credit categories.
AM Best uses the following categories to assess financial strength: A++, A+ (superior), A, A- (excellent), B++, B+ (good), B, B- (fair), C++, C+ (marginal), C, C- (weak), D (poor), E (under regulatory supervision), F (in liquidation), S (suspended).
6 GRI 2-6, 2-2.
14
•Insurance, Slovenia: in Slovenia, the insurance business is conducted through Zavarovalnica Sava and Vita. Zavarovalnica Sava offers a wide range of non-life and life insurance policies. It markets its products through its own distribution network and external channels, always focusing on the needs of its customers. Vita is a life insurance company in Slovenia operating on a bancassurance model. It operates exclusively through the branches of NLB d.d. Its product mix is dominated by unit-linked life insurance.
•Insurance, international: the Sava Insurance Group operates through subsidiaries and branches in the markets of Croatia, Serbia, Montenegro, North Macedonia and Kosovo. Motor insurance business accounts for a significant portion of the non-life insurance business written in these markets, but there is an increasing trend towards all other non-life business, including health insurance. The Group offers life insurance in the markets of Croatia, Serbia and Kosovo.
•Pensions: the Sava Insurance Group offers pension insurance in Slovenia and North Macedonia. In the Slovenian market, Sava Pokojninska provides a comprehensive range of supplementary pension insurance, as it manages pension fund assets and distributes pension annuity payments. The Group’s pension company in North Macedonia manages both mandatory and voluntary pension funds.
•Asset management: Sava Infond manages client assets in 19 sub-funds of the Infond umbrella fund and provides portfolio management services to Group companies.
•Assistance services: the TBS Team 24’s assistance services supplement the Group’s core business in all the markets where the Group has a presence through companies. The company is the leading assistance provider in southeastern Europe, offering its policyholders roadside, home and travel medical assistance, as well as other assistance services.
The Group is also successfully expanding its activities in other areas, in particular the hospital and healthcare activities in Slovenia, which are carried out through the associated company DCB (SVN). In 2023, having established Vita S Holding, the Group was preparing to enter the North Macedonian healthcare market. In 2023, the Group expanded its activities to include the development of comprehensive IT solutions in Serbia.
15
2.6 Composition of the Sava Insurance Group 7
Composition of the Sava Insurance Group as at 31 December 2023 8
7 GRI 2-1, 2-2.
8 The percentages in the diagram refer to shareholdings of Sava Re or other controlling companies. The shareholdings provided for Sava Infond and DCB differ from the voting rights held by these companies. Section 2.7 “General information on Group companies as at 31 December 2023“ provides disclosures about all Group companies, including equity stakes and voting rights.
16
2.7 General information on Group companies as at 31 December 2023 9
As at 31 December 2023, the Sava Insurance Group had the following members:
Sava Re
Zavarovalnica Sava (SVN)
Sava Neživotno Osiguranje (SRB)
Illyria (RKS)
Registered office
Dunajska Cesta 56, 1001 Ljubljana, Slovenia
Ulica Eve Lovše 7, 2000 Maribor, Slovenia
Bulevar Vojvode Mišića 51, 11040 Belgrade, Serbia
Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo
ID number
5063825000
5063400000
17407813
810483769
Main activity
reinsurance
insurance
non-life insurance
non-life insurance
Share capital (EUR)
71,856,376
68,417,377
6,314,464
7,228,040
Book value of combined equity interest of all Group members (EUR)
68,417,377
6,314,464
7,228,040
% equity share / voting rights held by Group members
Sava Re: 100.0%
Sava Re: 100.0%
Sava Re: 100.0%
Governing bodies
management board
management board
management board
managing director
Marko Jazbec (chair), Polona Pirš Zupančič, Peter Skvarča, David Benedek
Jošt Dolničar (chair), Uroš Lorenčič, Primož Močivnik, Robert Ciglarič
Bojan Mijailović (chair), Aleksandar Ašanin
Shpend Balija
supervisory board
supervisory board
supervisory board
board of directors
Davor Ivan Gjivoje Jr (chair), Keith William Morris, Klemen Babnik, Matej Gomboši, Edita Rituper, Blaž Garbajs
Marko Jazbec (chair), Pavel Gojkovič, Polona Pirš Zupančič, Peter Skvarča, Aleš Perko, Branko Beranič
Peter Skvarča (chair), Nebojša Šćekić, Josif Jusković
Marko Jazbec (chair), Rok Moljk, Andreja Rahne, Milan Viršek, Ilirijana Dželadini
9 GRI 2-1, 2-6, 2-9, 2-2.
17
Sava Osiguruvanje (MKD)
Sava Osiguranje (MNE)
Illyria Life (RKS)
Sava Životno Osiguranje (SRB)
Registered office
Železnička 41, Opština Centar, PF 133, 1000 Skopje, North Macedonia
Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro
Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo
Bulevar Vojvode Mišića 51, 11040 Belgrade, Serbia
ID number
4778529
02303388
810793837
20482443
Main activity
non-life insurance
non-life insurance
life insurance
life insurance
Share capital (EUR)
3,820,077
4,033,303
3,285,893
4,326,664
Book value of combined equity interest of all Group members (EUR)
3,585,524
4,033,303
3,285,893
4,326,664
% equity share / voting rights held by Group members
Sava Re: 93.86%
Sava Re: 100.0%
Sava Re: 100.0%
Sava Re: 100.0%
Governing bodies
board of directors
board of directors
managing director
management board
managing director: Melita Gugulovska, executive director: Kristian Leskov
non-executive directors of the company: Rok Moljk (chair), Peter Skvarča, Milan Viršek, Sašo Tonevski, Nenad Jovanović
executive director: Nebojša Šćekić non-executive directors of the company: Marko Jazbec (chair), Milan Viršek, Zvonko Peković
Albin Podvorica deputy managing director: Mehmeti Fisnik
Miloš Brusin (chair), Ana Bojanić
board of directors
supervisory board
Marko Jazbec (chair), Andreja Rahne, Rok Moljk, Milan Viršek, Ilirijana Dželadini
Polona Pirš Zupančič (chair), Pavel Gojkovič, Uroš Ćamilović
18
Sava Car (MNE)
ZS Svetovanje (SVN)
Sava Agent (MNE)
Sava Station (MKD)
Registered office
Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro
Ulica Eve Lovše 7, 2000 Maribor, Slovenia
Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro
Železnička 41, Opština Centar, 1000 Skopje, North Macedonia
ID number
02806380
2154170000
02699893
7005350
Main activity
technical testing and analysis
insurance agency
insurance agency
technical testing and analysis
Share capital (EUR)
485,000
327,263
10,000
199,821
Book value of combined equity interest of all Group members (EUR)
485,000
327,263
10,000
199,821
% equity share / voting rights held by Group members
Sava Osiguranje (MNE): 100.0%
Zavarovalnica Sava: 100.0%
Sava Osiguranje (MNE): 100.0%
Sava Osiguruvanje (MKD): 100.0%
Governing bodies
executive director
managing director
executive director
managing director
Siniša Mićunović
Aljaž Kos
Snežana Milović
Aleksandar Mihajloski
Sava Pokojninska (SVN)
TBS Team 24 (SVN)
Sava Penzisko Društvo (MKD)
Vita (SVN)
Registered office
Ulica Eve Lovše 7, 2000 Maribor, Slovenia
Ulica Eve Lovše 7, 2000 Maribor, Slovenia
Majka Tereza 1, 1000 Skopje, North Macedonia
Trg Republike 3, 1000 Ljubljana, Slovenia
ID number
1550411000
5946948000
5989434
1834665000
Main activity
pension fund
provision of assistance services
fund management activities
life insurance
Share capital (EUR)
6,301,109
8,902
2,110,791
7,043,900
Book value of combined equity interest of all Group members (EUR)
6,301,109
7,789
2,110,791
7,043,900
% equity share / voting rights held by Group members
Sava Re: 100.0%
Sava Re: 87.5%
Sava Re: 100.0%
Sava Re: 100.0%
Governing bodies
management board
managing director
management board
management board
Andrej Plos (chair), Igor Pšunder
Edvard Hojnik
Snežana Stankovič (chair), Petar Taleski, Tatjana Bojkovska
Barbara Smolnikar (chair), Irena Prelog, Tine Pust
supervisory board
holder of procuration
supervisory board
supervisory board
David Benedek (chair), Rok Moljk, Hermina Kastelec, Pavel Gojkovič, Irena Šela, Tomaž Šalamon, Uroš Krajnc
Aleksandra Tkalčič
Pavel Gojkovič (chair), Rok Moljk, Peter Skvarča, Erol Hasan
David Benedek (chair), Pavel Gojkovič, Andreja Rahne, Jure Košir
19
DCB (SVN)
Vita S Holding (MKD)
Sava Infond (SVN)
ASP (SRB)
Registered office
Pod Skalo 4, 4260 Bled, Slovenia
Ul. Dimche Mirchev 20, Opština Centar, 1000 Skopje, North Macedonia
Ulica Eve Lovše 7, 2000 Maribor, Slovenia
Bulevar Kralja Aleksandra 17, 11000 Belgrade, Serbia
ID number
5690366000
7690088
5822416000
17077295
Main activity
hospital activities
non-specialised wholesale trade
fund management activities
computer programming
Share capital (EUR)
379,123
1,320,026
1,460,524
1,129
Book value of combined equity interest of all Group members (EUR)
189,562
1,056,021
1,460,524
1,129
% equity share / voting rights held by Group members
Sava Re: 40.1%/50.0%
Sava Re: 80%
Sava Re: 84.00%/84.85%
Sava Re: 100%
Zavarovalnica Sava: 15.00%/15.15%
Governing bodies
managing director
managing director
management board
managing director
Zvonko Novina, Robert Cugelj
Iskra Kostova, Suzana Jovanova
Jožica Palčič (chair), Samo Stonič, Jure Dubravica
Ivana Ivetić
supervisory board
supervisory board
supervisory board
Blaž Jakič (chair), David Benedek (deputy chair), Jaka Kirn, Milan Marinič, Polonca Jug Mauko, Matej Narat
David Benedek (chair), Zvonko Novina, Snežana Stanković, Simon Trpeski, Nebojša Mojsoski
David Benedek (chair), Polona Pirš Zupančič, Jure Košir, Uroš Lorenčič
Sava Car (SRB)
Registered office
Braće Jerkovića 108A, Belgrade, Serbia
ID number
21822302
Main activity
technical testing and analysis
Share capital (EUR)
100,000
Book value of combined equity interest of all Group members (EUR)
100,000
% equity share / voting rights held by Group members
Sava Car (MNE): 100%
Governing bodies
managing director
Nemanja Parapid
The management of all Sava Insurance Group members is local.10
10 GRI 202-02.
20
2.8 Changes in Group composition 11
In 2023, Sava Re established Vita S Holding (MKD), a healthcare company based in North Macedonia, and acquired ASP (SRB), a Serbian company providing development and maintenance services for core IT systems. In 2023, Sava Re sold G2I (GBR) and the Croatian company SO Poslovno Savjetovanje ceased operations.
3 Shareholders and share trading
Sava Re’s share price rose by 25.0% from EUR 22.4 to EUR 28.0 in 2023. During this period, it reached a high of EUR 28.0 and a low of EUR 22.1. In 2023, the average price was EUR 24.6. Considering the dividend payout of EUR 1.60 per share (representing a dividend yield of 6.5%), the return on the share in 2023 was 32.1%.
The SXIP (STOXX Europe 600 Insurance) also rose in 2023, by 8.8%. The Ljubljana Stock Exchange index (SBITOP) also increased over the period. It gained 19.8%.
POSR share price performance from 1 January 2023 to 31 December 2023 compared to the SBITOP Index and the STOXX Europe 600 Insurance Index in % (31 December 2022 = 100)
In 2023, turnover in Sava Re shares was EUR 15.8 million (2022: EUR 17.9 million). The average daily turnover in 2023 was EUR 66,114, compared to EUR 71,859 in 2022.
11 GRI 2-6.
21
Basic details about the POSR share
31 December 2023
31 December 2022
Share capital (EUR)
71,856,376
71,856,376
Number of shares
17,219,662
17,219,662
Ticker symbol
POSR
POSR
Number of shareholders
4,376
4,316
Type of share
ordinary
Listing
Ljubljana Stock Exchange, prime market
Number of treasury shares
1,721,966
1,721,966
Consolidated book value per share (EUR)
37.79
34.29
Market capitalisation, closing rate at (EUR)
433,935,488
347,148,390
2023
2022
Consolidated earnings per share (EUR)
4.16
3.01
Share price at end of period (EUR)
28.00
22.40
Average share price during reporting period (EUR)
24.56
25.26
Period low (EUR)
22.10
20.10
Period high (EUR)
28.00
30.40
Turnover during the period (EUR)
15,801,226
17,892,849
Average daily trade volume (EUR)
66,114
71,859
Shareholders
Sava Re shareholder structure as at 31 December 2023
Type of investor
Domestic investors
International investors
Insurance and pension companies
17.9%
0.0%
Other financial institutions*
18.0%
19.6%
Republic of Slovenia
13.9%
0.0%
Natural persons
11.5%
0.2%
Investment funds and mutual funds
2.4%
0.0%
Other commercial companies
2.6%
1.0%
Banks
0.0%
13.0%
Total
66.3%
33.7%
* The other financial institutions item includes Slovenian Sovereign Holding with a stake of 17.7%.
The composition of shareholders remained largely unchanged in 2023. International ownership increased by 0.3 percentage points to 33.7%.
Fiduciary accounts with banks, attorneys and other financial institutions altogether account for 25.7% of all POSR shares.
22
Composition of Sava Re share capital
Ten largest shareholders and qualifying shareholders under the Slovenian Takeover Act as at 31 December 2023 12
Shareholder
Number of shares
% of share capital
% voting rights
1
InterCapital Securities Ltd. – fiduciary account
3,295,534
19.1%
21.3%
2
Slovenian Sovereign Holding
3,043,883
17.7%
19.6%
3
Republic of Slovenia
2,392,436
13.9%
15.4%
4
European Bank for Reconstruction and Development (EBRD)
1,071,429
6.2%
6.9%
5
Modra Zavarovalnica d.d.
714,285
4.1%
4.6%
6
OTP Banka d.d. – fiduciary account
434,529
2.5%
2.8%
7
Hrvatska Poštanska Banka – fiduciary account
380,190
2.2%
2.5%
8
Guaranteed civil servants’ sub-fund
320,346
1.9%
2.1%
9
Kapitalska Družba d.d. – SODPZ
238,109
1.4%
1.5%
10
Modri Zajamčeni Podsklad (guaranteed sub-fund)
168,150
1.0%
1.1%
Total
12,058,891
70.0%
77.8%
Sava Re d.d., treasury shares*
1,721,966
10.0%
-
* Treasury shares carry no voting rights.
** Pursuant to Article 235a of the Slovenian Companies Act (ZGD-1), Sava Re started the process of identifying shareholders who are registered with intermediaries as holders of shares and who are not themselves intermediaries (ultimate shareholders). The process was last carried out on 2 October 2023. According to the information received, on that date, Croatia Osiguranje d.d. held 2,439,852 POSR shares, and Adris Grupa d.d. held 838,197 POSR shares.
In 2023, the combined equity share of the ten largest shareholders increased from 67.9% to 70.0% and their share of voting rights from 75.5% to 77.8%.
As at 31 December 2023, the top four largest shareholders of Sava Re exceeded the 5% threshold (qualifying holding under Article 77 of the Slovenian Takeover Act, ZPre-1).
In 2023, the chairman of the management board of Sava Re, Marko Jazbec, increased his holding of Sava Re shares by 500 to 12,000 shares. In 2023, purchases were also made by management board member Polona Pirš Zupančič, who acquired 570 shares and now holds 4,318 shares, and management board member David Benedek, who acquired 400 shares and now holds 1,200 shares. At the end of 2023, members of the management and supervisory boards together held 18,718 shares, representing 0.11% of the share capital.
POSR shares held by members of supervisory and management boards as at 31 December 2023
Number of shares
% of share capital
Marko Jazbec
12,000
0.070%
Polona Pirš Zupančič
4,318
0.025%
Peter Skvarča
1,200
0.007%
David Benedek
1,200
0.007%
Total management board
18,718
0.109%
Total management and supervisory boards
18,718
0.109%
All Sava Re shares are ordinary registered shares with no par value; all were issued in book-entry form and are of the same class.
12 Source: Central securities register KDD d.d.
23
The shares confer the following rights on their holders:
•the right to participate in the Company’s management, with one share carrying one vote in the general meeting;
•the right to a proportionate part of the Company’s profit (dividend);
•the right to a corresponding part of the remaining assets upon the liquidation or bankruptcy of the Company.
Pursuant to the Sava Re articles of association and the applicable legislation, current Sava Re shareholders also hold pre-emptive rights entitling them to take up shares in proportion to their existing shareholding in any future stock offering; their pre-emptive rights can only be excluded under a resolution to increase share capital adopted by the general meeting by a majority of at least three quarters of the share capital represented.
Share transfer restrictions
All Sava Re shares are freely transferable.
Holders of securities carrying special control rights
Sava Re has issued no securities carrying special control rights.
Treasury shares
In line with the authorisation granted at the 28th general meeting of shareholders (held on 23 April 2014), the Company started repurchasing its shares in July 2014. The authorisation to acquire treasury shares was valid for three years from the date of the general meeting resolution. The authorisation was valid for the acquisition of up to 1,721,966 treasury shares of the Company, representing 10% of the Company’s share capital. The Company initially acquired its treasury shares only on the regulated market for financial instruments. However, after the announcement of the share-repurchase programme in November 2014, the Company repurchased its treasury shares both on and off the regulated market for financial instruments, in line with the authorisation given to the management board by the general meeting. The management board’s most recent repurchase of treasury shares to fill the quota was performed on 11 April 2016.
From 1 January 2023 to 31 December 2023, Sava Re did not buy back or sell any treasury shares. The total number of treasury shares as at 31 December 2023 was 1,721,966, representing 10% less one share of all issued shares.
The Company’s management board does not have a new general meeting authorisation to purchase treasury shares.
Dividend
At the 39th general meeting of shareholders held on 5 June 2023, the shareholders adopted the proposal of the management and supervisory boards to use EUR 24,796,313.60 of the distributable profits to pay a dividend of EUR 1.60 per share. The dividend was paid on 21 June 2023 to shareholders registered in the share register on 20 June 2023.
24
Details of dividends paid each year in respect of the previous financial year 13
EUR, except percentages
2018
2019
2020
2021
2022
2023
Amount of dividend payment
12,398,157
14,722,811
0
13,173,042
23,246,544
24,796,314
Dividend/share
0.80
0.95
0.00
0.85
1.50
1.60
Dividend yield
4.8%
5.6%
-
3.4%
5.9%
6.5%
Contingent capital
The Company had no contingent capital as at 31 December 2023.
3.1 Responsibility to investors 14
Sava Re’s investors (shareholders) and analysts are important stakeholders, with whom Sava Re maintains transparent, professional and comprehensive relationships.
As a Ljubljana Stock Exchange first listing company, Sava Re respects the principle of equal treatment and informing of all members of the public. Sava Re communications follow recommendations for uniform information to all shareholders, and through public announcements Sava Re enables simultaneous and transparent information to be provided in line with the financial calendar. In this way, the Company builds confidence among shareholders and potential investors in the POSR share. Key information is published in accordance with the financial calendar on the Company’s website and via the Ljubljana Stock Exchange SEOnet system. In 2023, Sava Re issued 50 public announcements in both the Slovenian and English language.
Sava Re communicates in compliance with the Slovenian Financial Instruments Market Act (ZTFI-1), the Companies Act (ZGD-1), the aforementioned recommendations of the Ljubljana Stock Exchange for listed companies, the Corporate Governance Code for Listed Companies, the rules of procedure of the supervisory board and the Company’s internal communication rules.
The Company aims to set up an open communication channel with investors. It seeks to raise awareness of the real value of the Sava Re and Sava Insurance Group brand and, consequently, of everything that investing in POSR shares entails. In 2023, Sava Re continued its efforts to improve the liquidity of the POSR share. Responsibility towards investors is reflected in cooperation and building a two-way relationship through various communication tools.
In 2023, Sava Re reached out to investors through investor and analyst conferences, webcasts organised by the Ljubljana Stock Exchange, a press conference on the occasion of the announcement of unaudited results, a letter to shareholders, an invitation to the general meeting of shareholders, an email newsletter and through similar means. It also sponsored the Ljubljana Stock Exchange’s capital market development and financial literacy project.
Sava Re also uses its official website www.sava-re.si/en-si/, in particular the Investors subpage, to provide timely and uniform information to investors, shareholders and other members of the financial community. The subpage contains all the essential information on the POSR share price development, key indicators, dividends, financial reports, analyses and a financial calendar. A calendar of past investment conferences is also available on the website, together with the material presented at each event. Also presented are the events Sava Re will attend in the coming year.
13 Current year dividend distributions from distributable profits of the previous year. The dividend yield was calculated as the ratio of the dividend per share to the rolling average share price in the 12-month period.
14 GRI 2-29, 2-15.
25
Investors, shareholders and analysts can contact Sava Re’s office of the management board and of compliance by phone at +386 1 47 50 200 and by email at investor relations ir@sava-re.si.
26
4 Report of the supervisory board 15
The supervisory board of Sava Re d.d. (the Company or Sava Re) has prepared the following report in accordance with Article 282 of the Slovenian Companies Act (ZGD-1).
In 2023, the supervisory board monitored the Company’s operations and oversaw its management in a responsible manner. It periodically examined reports on various and select aspects of the business, passed appropriate resolutions, and monitored their implementation. Individual issues were addressed in more detail by the relevant supervisory board committees, and, on the basis of the supervisory board committee findings, the supervisory board also adopted appropriate resolutions and recommendations.
The supervisory board acted within the framework of the powers and responsibilities conferred upon it by legal and regulatory provisions, the Slovenian Corporate Governance Code for Listed Companies, the Company’s articles of association, and its rules of procedure.
COMPOSITION OF THE SUPERVISORY BOARD
The composition of the supervisory board changed in 2023. The term of office of Andrej Gorazd Kunstek and Edita Rituper, members of the supervisory board, employee representatives, expired on 12 June 2023. The works council reappointed Edita Rituper for a four-year term of office, and Blaž Garbajs was appointed as the second employee representative, his first term of office on the supervisory board. Both the appointed members began their new terms of office on 13 June 2023.
In 2023, the supervisory board comprised the following members: Davor Ivan Gjivoje Jr (Chairman), Keith William Morris (Deputy Chairman), Klemen Babnik, Matej Gomboši, Andrej Gorazd Kunstek (until 12 June 2023), Edita Rituper and Blaž Garbajs (from 13 June 2023).
The size and composition of the supervisory board allowed for effective discussion and the adoption of sound resolutions based on the broad range of expertise and experience provided by its members.
OPERATION OF THE SUPERVISORY BOARD
In its work and decision-making, the supervisory board is guided by the goals of the Company and the Sava Insurance Group as a whole. During sessions, the members expressed their opinions and positions and sought to reconcile any differences.
The supervisory board notes that the reports prepared by the management board for the supervisory board’s own use, and that of its committees, were appropriate for a careful examination of issues, and that they complied with both the relevant laws and internal regulations. Session materials were provided in a timely manner, allowing the members sufficient time to prepare themselves for the consideration of agenda items. The Company’s professional staff assisted in the conduct of the sessions and organised other supporting activities.
The supervisory board held ten sessions during 2023, one of which was held by correspondence. All members attended all sessions convened during their term of office. Most of the sessions were held at the Company’s head office. The number/intensity of sessions in 2023 were driven by the transition to IFRS 17, as well as by the strategically important development of the Company’s next five-year plan.
The members of the management board and the secretary of the supervisory board also participated in the discussions, whereas other professional staff assisted in certain agenda items.
During the year, the supervisory board discussed select and relevant aspects of the operations and activities of the Company and the Sava Insurance Group within its powers under Slovenian law and the Company’s articles of association.
15 GRI 2-10.
27
The major issues to which the supervisory board members paid particular attention in 2023 are, in particular, outlined below.
Business plans of the Company and the Sava Insurance Group
In late 2023, the supervisory board considered and approved the Business Plan of the Sava Insurance Group and Sava Re d.d. for 2024.
Financial reports – annual report
The supervisory board reviewed the unaudited financial statements of the Group and the Company for 2022, and it adopted the audited annual report of the Group and the Company for 2022, including the auditor’s report and opinion on the 2022 annual report, and the supervisory board’s own report on its activities in 2022.
Financial reports – interim reports
The supervisory board also periodically reviewed other select financial reports in 2023, in particular the statements of results of the Sava Insurance Group with the financial statements of Sava Re d.d. for January–March 2023 and January–September 2023, and the unaudited financial report for January–June 2023.
Investment
The supervisory board monitored asset management periodically and as part of its review of the annual report and interim financial reports of the Company and the Group.
Reinsurance operations and claims experience
The supervisory board was informed of the Company’s reinsurance programme for the current year. Throughout 2023, the supervisory board was regularly updated by the management board on major loss events in the domestic and global markets, and on potential claims that could have a material impact on the Company. Following the floods in Slovenia (and the wider region) in August, the supervisory board took note of the report on the reinsurance protection covering the Group and non-Group portfolio.
Supervision of subsidiaries
In addition to overseeing the operations of Sava Re as the parent company of the Sava Insurance Group, the supervisory board actively monitored the performance of the Group’s subsidiaries to the extent permitted by law.
Risk management system
Risk management function
The supervisory board monitored risk management periodically and as part of its review of the annual report and interim financial reports of the Company and the Group.
It took note of the risk report for the last quarter of 2022 and the risk reports for the first, second and third quarters of 2023. In March, it took note of the Own Risk and Solvency Assessment (ORSA) Report of Sava Re d.d. and the Sava Insurance Group for 2023. The report covered select and relevant information on the own risk and solvency assessment of Sava Re d.d. (the parent company) and the Sava Insurance Group.
At the end of 2023, the supervisory board approved the Risk Strategy of the Sava Insurance Group for 2023–2027.
28
Actuarial matters
In 2023, the supervisory board considered the actuarial function report of Sava Re d.d. for 2022, and it took note of the Sava Insurance Group non-life actuarial function report for 2022 and the Sava Insurance Group life actuarial function report for 2022.
Granting authorisation to new key function holders
Following the surrender of authorisation of the holder of both the actuarial function at the level of Sava Re and the non-life actuarial function at the level of the Sava Insurance Group, the supervisory board gave its consent to the management board in May 2023 to grant mandates to two new actuarial function holders, namely the holder of the non-life actuarial function at the level of the Sava Insurance Group and the holder of the actuarial function at the level of Sava Re.
Compliance monitoring
In 2023, the supervisory board of Sava Re took note of the annual report of the compliance function holder for 2022 and his annual work plan for 2023. It also took note of the compliance function holder’s half-yearly report for the period from 1 January to 30 June 2023.
Internal audit
In 2023, the supervisory board oversaw the activities of the Company’s internal audit department in accordance with its statutory powers. It also reviewed the internal audit report for the period from 31 October to 31 December 2022 and the annual report on internal auditing for 2022, including a quality assurance and improvement programme of the Company’s internal audit department, and drew up an opinion on the annual report, which was presented to the Company’s general meeting of shareholders. It also considered quarterly internal audit reports for the periods ending on 31 March 2023, 30 June 2023 and 30 September 2023. In addition, it monitored the quarterly reports of the internal audit department on internal auditing of the Sava Insurance Group (Group Internal Audit). All reports prepared by the Company’s internal audit department were presented by the head of the department.
The supervisory board is of the opinion that the internal audit reports are independent and objective and that the internal auditor’s recommendations and findings have been taken into account by the management board. It notes that the internal audit’s reviews, based on their available resources, have not revealed any significant irregularities in the Company’s operations. The supervisory board also notes that the internal audit department continuously monitors the development of the internal audit departments of Group subsidiaries, providing them with appropriate support. In addition, it also monitors the operations of these companies and has not detected any major irregularities.
At the end of 2023, the supervisory board considered and approved the annual work plan of the internal audit department for 2024.
In accordance with the International Standards on Internal Auditing, the supervisory board approved the proposed bonus for the head of the internal audit department relating to her individual performance in 2022.
Joint statement of key function holders
The supervisory board took note of the joint statement of all key function holders of the Group and the Company for 2022, including the opinion that all key risk areas were effectively managed and their functions were aligned to ensure ample coverage of the risks to which the Company and the Group were exposed.
Solvency II policies
In 2023, the supervisory board also took note of the update on the periodic review of Solvency II policies, discussing individual policies and giving its consent to the proposed amendments.
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Personnel matters
Succession planning
In 2023, the supervisory board considered the management board’s regular report on succession planning and approved the Policy on Human Resource Development and Succession Planning of the Sava Insurance Group.
Appointment of supervisory board committees
With the expiry of his term of office on the supervisory board, Andrej Gorazd Kunstek also concluded his term of office on two supervisory board committees. To replace Mr. Kunstek’s positions, the supervisory board appointed Edita Rituper as a new member of the nominations and remuneration committee and Blaž Garbajs as a new member of the audit committee. Both took up their positions on the supervisory board committees on 13 June 2023. At the end of December, the supervisory board also appointed Blaž Garbajs as an additional member of the nominations and remuneration committee.
Remuneration of members of management and supervisory bodies
Variable remuneration of the management board in 2022
In 2023, the supervisory board adopted a resolution on the payment of variable remuneration to the members of the management board for business and individual performance in 2022, in accordance with the internal methodology for determining the variable remuneration of the management board members.
Methodology for determining the variable pay of a management board member
In March, the supervisory board adopted amendments to the methodology for determining the variable pay of a management board member, effective for 2023. In December, it reviewed the methodology again and adopted amendments with effect from 2024.
Remuneration policy and remuneration report
In accordance with the Slovenian Companies Act, in 2023 the management and supervisory boards submitted to the Sava Re general meeting of shareholders the Remuneration Policy for Members of Management and Supervisory Bodies of Sava Re d.d. and the Directors’ Remuneration Report of Sava Re d.d. for 2022. The general meeting approved the 2022 directors’ remuneration report. The advisory vote to approve the remuneration policy was not carried. The Company will again submit a revised policy to the shareholders for consideration at the next ordinary general meeting of Sava Re in 2024.
Goals of the management board for determining the variable remuneration for 2024
In late 2023, the supervisory board approved the management board’s goals for 2024 for determining the variable remuneration of a management board member.
Start of the nomination process for the appointment of a supervisory board member
In December, the supervisory board adopted a resolution to start the nomination process for the appointment of a supervisory board member with a four-year term commencing on 9 March 2025.
Adoption of internal regulations
In March and August 2023, the supervisory board approved amendments to the act on the management board relating to the Company’s internal organisation. In March, it also took note of the information on the revision of the Sustainable Investment Policy of the Sava Insurance Group.
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Calling and holding the general meeting of shareholders
The supervisory board, together with the management board, called the Company’s general meeting of shareholders once in 2023, for 5 June 2023.
Consideration of additional reports
Benchmark analyses
The supervisory board discussed in depth the analysis of solvency and financial position reports of various other companies in the insurance industry for 2022.
Impact of inflation on claims
Because of the expected rebound of motor claim frequency back up to pre-pandemic levels, combined with rising inflation, pushing up claim amounts and claims provisions, the supervisory board was presented with periodic reports in 2023 on the impact of claims inflation on the non-life portfolio and on the measures taken to limit this impact on the performance of the Group’s motor insurance subsidiary.
Report on the activities of the works council
In March 2023, the supervisory board considered the works council’s report on the state of employee participation in management for 2022.
Monitoring corporate finance projects
The management board kept the supervisory board informed of developments in corporate finance projects.
Monitoring other projects
The supervisory board took note of the management board’s report on the implementation of IFRS 17 and IFRS 9, the preliminary calculations under the new accounting standards, and the state of the transition to these new standards.
Overseeing the work of supervisory board committees
In March 2023, the supervisory board considered the 2022 risk committee report and the 2022 audit committee report. It also assessed the quality of the work of the two committees. At each session, it monitored the committees’ activities through reports and session minutes.
Correspondence with market regulators
As part of the periodic risk reports, the supervisory board reviewed reports on correspondence between the Company and the Insurance Supervision Agency, other market regulators and inspection services. The supervisory board was regularly updated on the status of the periodic review launched by the Insurance Supervision Agency in October 2022. The supervisory board was informed of the results and conclusions of this review at the end of March 2023.
Strengthening supervisory board best practices
In line with best practice, the members of the supervisory board complete questionnaires upon taking office and annually thereafter, including a declaration that they have no conflicts of interest. In 2023, all the members of the supervisory board and its committees declared themselves to be independent. The declarations were noted by the supervisory board. The Company publishes the declarations of the supervisory board on its website.
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In accordance with good practice, in 2023 the supervisory board evaluated its composition, its functioning, and the work of its individual members, and the supervisory board as a whole, including its cooperation with the management board. It carried out a self-assessment with positive results, and it included an action plan to continuously improve the board’s operation.
OPERATION OF SUPERVISORY BOARD COMMITTEES
AUDIT COMMITTEE
In accordance with statutory requirements,the Company’s supervisory board has established an audit committee to deal with accounting, financial and auditing matters.
Terms of reference
The duties and powers of the audit committee of the supervisory board are laid down by the Slovenian Companies Act, its rules of procedure and those of the supervisory board, and other autonomous legal acts (e.g., recommendations for audit committees).
Composition in 2023
The term of office of each audit committee member is limited by the term of office of the supervisory board.
In 2023, the audit committee comprised the following members: Matej Gomboši (chairman), Andrej Gorazd Kunstek (until 12 June 2023), Blaž Garbajs (from 13 June 2023), Katarina Sitar Šuštar (external member) and Dragan Martinović (external member).
Operation in 2023
The audit committee met nine times in 2023. All sessions were held at the Company’s head office, and all members attended all sessions convened during their term of office.
The main activities of the audit committee in 2023 are outlined below.
Overseeing the integrity of financial information
The audit committee monitored the integrity of financial information. The main focus was on monitoring the financial reporting processes, in particular the transition to the new reporting standard IFRS 17. In this respect, it made recommendations and suggestions on materials for supervisory board sessions to ensure compliance with relevant professional standards and adherence to appropriate reporting principles, such as completeness, transparency, and consistency of reporting.
Monitoring the efficiency and effectiveness of internal controls and internal audit
The audit committee monitored the efficiency and effectiveness of internal controls and internal audit activities based on the annual and quarterly internal audit reports, and it assessed the adequacy of the annual internal audit work plan. In addition, it monitored the quarterly reports of the internal audit department on internal auditing of Group companies (Group Internal Audit). The committee used these reports to keep up to date with and monitor information systems security activities to ensure business continuity and defence against cyberattacks. It also reviewed the quality assurance and improvement programme of the Company’s internal audit department and the department’s self-assessment for 2022. It discussed the proposed bonus for the director of internal audit for her individual-performance-based pay for 2022. The audit committee carried out an interview with the head of the internal audit department without the presence of the members of management and the
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minute taker, in accordance with the internal audit standards and the recommendations for the work of audit committees issued by the Slovenian Directors Association. The audit committee also took note of information on the selection process for the provider of the internal audit quality assessment to be carried out in all Group companies in 2024.
Overseeing the operation of the risk management system
In line with the Company’s corporate governance system (the supervisory board having established a separate risk committee), the audit committee took note of the effectiveness and efficiency of the risk management framework by reviewing the minutes of the work and findings of the risk committee of the Sava Re supervisory board.
The audit committee also took note of the report on the regular annual review of the Solvency II policies for 2023. It took note of the amendments to the Internal Audit Policy of the Sava Insurance Group and Sava Re d.d. and gave a favourable opinion on the proposed amendments.
The audit committee also took note of the reports of other key function holders of Sava Re and the Sava Insurance Group for 2022.
Monitoring the statutory audit of separate and consolidated financial statements
In 2022, a contract was signed with Deloitte Revizija d.o.o., Dunajska Cesta 165, 1000 Ljubljana (Deloitte) to audit the financial statements for the period from 2022 to 2024. Deloitte has also audited the financial statements of Sava Re and the Sava Insurance Group for 2022 and 2023. In 2022 and 2023, the Group’s subsidiary companies were audited by the local audit staff of the same auditing firm.
Statutory audit of financial statements
During 2023, the audit committee met several times with the selected external auditor, monitored the audit of the separate and consolidated financial statements and took note of the post-audit management letter and the additional auditor’s report in relation to the audit of the financial statements for the year ended 31 December 2022. It also took note of the results of the auditor’s review of compliance with the ESEF Directive and the findings of the review of the absolute level of net assets as required by the local regulators in the relevant markets. The committee also took note of a number of other reports by the Company and the external auditor relating to the audit of the financial statements.
Setting audit focus areas
The audit committee took note of the 2023 audit plan and, among other things, participated in setting the audit focus areas. In December 2023, it also took note of the external auditor’s report and the management letter following the pre-audit of the 2023 financial statements. Together with the external auditor, the audit committee reviewed and followed up on information security findings and measures and the effectiveness of information system controls.
Selection procedure for the auditor of the Company’s annual report
At the general meeting of shareholders of Sava Re in 2022, Deloitte was elected to audit the financial statements for the period 2022–2024. In 2023, there was no need for the audit committee to conduct a selection process for a candidate firm to be the auditor of the Company’s annual report.
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Preparation of the contract between the auditor and the Company
In 2022, a contract was signed with Deloitte to audit the financial statements for the period from 2022 to 2024. However, in 2023 there was no need for the audit committee to consider the proposal for the contract with the external auditor or any annex thereto.
Assessing the quality of the external auditor
In accordance with the internal methodology for assessing the quality of the external auditor, the audit committee carried out a quality assessment of the external auditor of the 2022 annual report and assessed the quality of the service provided in auditing the annual report of the Sava Insurance Group and Sava Re d.d.
Independence of the auditor of the Company’s annual report
Based on quarterly management board reports on non-audit services provided by the audit firms, the audit committee assessed the independence of the auditor of the annual report of the Company and the Group. It also took note of the report on the recruitment of the Group auditor’s team members or the granting of mandates to the Group auditor’s team members in corporate bodies or other key functions in individual companies of the Sava Insurance Group. The audit committee also carried out a separate interview with the external auditor without the presence of management.
External oversight of the auditor’s work
The audit committee took note of the letter of notification of the audit firm Deloitte on the requests received from the market regulators in relation to the submission of reports, namely from (1) the Insurance Supervision Agency (ISA) for the submission of the additional report to the audit committee for 2022 and (2) the Agency for Public Oversight of Auditing (APOA) for the submission of the reports issued based on the requirements of the resolution on the additional audit review of insurance companies and the additional auditor’s report for 2022.
Cooperation with the market regulators
In 2023, the audit committee took note of information on the completion of the Insurance Supervision Agency’s review of operations that started in 2022. It also took detailed note of the quarterly management board reports on the Company’s correspondence with the Insurance Supervision Agency, other market regulators and inspection services.
Performing other tasks
In 2023, the audit committee also performed other tasks. It prepared a report on its work in 2022 for the supervisory board. In the context of corporate oversight, the committee took note of the report on implementing the whistleblower protection system in a work-related context at Sava Re, presented by the compliance function holder. It also confirmed its work plan for 2024, including the attached timetable.
Further strengthening audit committee best practices
The audit committee carried out a self-assessment of the quality of its work, which was then presented to the supervisory board. The committee in turn took note of the assessment of the quality of its work carried out by the supervisory board in 2023. It also took note of information on the fit and proper assessment of its members and the assessment of its own competence as a collective body, both of
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which were conducted in 2023. All the audit committee members signed an annual declaration of their independence, which was also presented to the supervisory board.
Conclusions
The chairman of the audit committee reported regularly to the supervisory board on the work and positions of the audit committee. The supervisory board regularly reviewed the minutes of the committee’s sessions.
The supervisory board is of the opinion that the audit committee thoroughly considered relevant issues within its terms of reference, taking into account the fact that the board established a separate risk committee. It provided the supervisory board with high quality professional assistance in the form of opinions and proposals.
The supervisory board also believes that the composition of the audit committee is appropriate and that the members have the professional and personal qualities to maintain a high level of quality and independence in their work.
Furthermore, the supervisory board is of the opinion that the audit committee received appropriate support in carrying out its work.
RISK COMMITTEE
The supervisory board believes that identifying and managing risk is a central part of good governance and has therefore set up a risk committee to monitor risk developments and provide advice and support to the supervisory board on risk-related matters.
Terms of reference
The risk committee performs its duties in accordance with the resolutions of the supervisory board, the Solvency II Directive, its rules of procedure, the rules of procedure of the supervisory board, the Insurance Act, the Slovenian Corporate Governance Code for Listed Companies, and other applicable risk management regulations.
Composition in 2023
The term of office of each member of the risk committee is limited by the term of office of the supervisory board.
In 2023, the risk committee comprised the following members: Keith William Morris (chairman), Davor Ivan Gjivoje Jr, Slaven Mićković (external member, deputy chairman) and Janez Komelj (external member).
Operation in 2023
The risk committee met six times in 2023. All members attended almost all the sessions convened (one member was excused from one session).
The main activities of the risk committee in 2023 are outlined below.
Overseeing the operation of the risk management system
The risk committee focused on overseeing the risk management system, primarily in terms of its reliability, effectiveness, and efficiency. It assessed the adequacy of the risk management system in place.
The risk committee reviewed in depth all risk management documents submitted to it, brought to its attention, or approved by the supervisory board, including:
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•the quarterly risk reports of the Sava Insurance Group and Sava Re for the periods ending on 31 December 2022, 31 March 2023, 30 June 2023, and 30 September 2023;
•the own risk and solvency assessment (ORSA) report of Sava Re and the Sava Insurance Group for 2023;
•annual reports on the capital adequacy calculations under Solvency II and solvency and financial condition reports of the Company and the Group for 2022 (Company SFCR and Group SFCR);
•proposed amendments to the risk strategy of the Sava Insurance Group for 2023–2027.
The risk committee also took note of the report on the regular annual review of the Solvency II policies for 2023. It took note of the amendments to the Capital Management Policy of the Sava Insurance Group and Sava Re d.d. and the Own Risk and Solvency Assessment Policy of the Sava Insurance Group and Sava Re d.d., and it gave a favourable opinion on the proposed amendments.
It discussed the analysis of solvency and financial position reports in the insurance industry for 2022.
Performing other tasks
The risk committee also performed other tasks in 2023: It prepared a report on its work in 2022 for the supervisory board. As reinsurance is one of the areas of the risk management system by which a reinsurance company covers part of the assumed risks in excess of its retentions according to its tables of retention limits, the risk committee also reviewed the Company’s reinsurance programme for 2023. During the supervisory board sessions, the committee took note of the report on reinsurance protection covering the Group and non-Group portfolio and the follow-up report on claims inflation for the non-life business of Zavarovalnica Sava. The committee also took note of the 2023 credit rating reports issued by S&P Global Ratings and AM Best. It also took note of the audit committee’s work (audit committee minutes) to ensure mutual information and insight into the work of the other, and that key areas are adequately monitored through the complementary work of the two committees.
Further strengthening risk committee best practices
The risk committee carried out a self-assessment of the quality of its work, which was then presented to the supervisory board. The committee in turn took note of the assessment of the quality of its work carried out by the supervisory board in 2023. It also took note of the information on the fit and proper assessment of its members and the assessment of its own competence as a collective body, both of which were conducted in 2023. All the risk committee members signed an annual declaration of their independence, which was also noted by the supervisory board.
Conclusions
The chairman of the risk committee reported regularly to the supervisory board on the committee’s work. The supervisory board regularly reviewed the minutes of the committee’s sessions.
The supervisory board believes that the composition of the risk committee is appropriate and that the members have the professional and personal qualities to perform its duties with quality and independence.
The supervisory board also considers that the risk committee received appropriate support to carry out its work.
NOMINATIONS AND REMUNERATION COMMITTEE
In accordance with the Slovenian Corporate Governance Code for Listed Companies, the supervisory board has established a nominations and remuneration committee as a permanent special committee to make proposals on the selection criteria and the selection of candidates for the management and supervisory boards, prepare proposals on the remuneration of the management and supervisory
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boards, and assist the supervisory board in other areas where, amongst other possible tasks, conflicts of interest may arise among the members of the supervisory board.
Terms of reference
The nominations and remuneration committee operates in accordance with the resolutions of the supervisory board, the Solvency II Directive, the rules of procedure of the supervisory board, the Insurance Act, and the Slovenian Corporate Governance Code for Listed Companies.
Composition in 2023
The term of office of each committee member is limited by the term of office of the supervisory board.
In 2023, the nominations and remuneration committee comprised the following members: Klemen Babnik (chairman), Davor Ivan Gjivoje Jr, Keith William Morris, Matej Gomboši, Andrej Gorazd Kunstek (until 12 June 2023), Edita Rituper (from 13 June 2023) and Blaž Garbajs (from 14 December 2023).
Operation in 2023
The nominations and remuneration committee met four times in 2023. All the members attended all committee sessions.
The main activities of the nominations and remuneration committee in 2023 are outlined below.
Succession planning
In 2023, the nominations and remuneration committee considered the management board’s regular report on succession planning and approved the Policy on Human Resource Development and Succession Planning of the Sava Insurance Group.
Act on the management board
The nominations and remuneration committee considered the proposed amendments to the act on the management board and recommended that the supervisory board approve them.
Remuneration of members of management and supervisory bodies
Variable remuneration of the management board in 2022
In accordance with the internal methodology for determining the variable pay of a management board member, the nominations and remuneration committee assessed the management board’s performance in 2022. This assessment served as the basis for the supervisory board’s resolution on the payment of variable remuneration to management board members for their business and individual performance in 2022.
Methodology for determining the variable pay of a management board member
The nominations and remuneration committee considered the proposed amendments to the methodology for determining the variable pay of a management board member for 2023 and 2024 and recommended that the supervisory board approve them.
Remuneration policy and remuneration report
The nominations and remuneration committee considered the proposed Directors’ Remuneration Report of Sava Re d.d. for 2022 (Article 294b of ZGD-1) and the proposed Remuneration Policy for Members of Management and Supervisory Bodies of the Sava Insurance Group (Article 294a of ZGD-1), which the management and supervisory boards then submitted to the 39th general meeting for approval. The remuneration policy was not approved by the general meeting. At the end of 2023, the committee again reviewed the proposed amendments to the Remuneration Policy for Members of Management and Supervisory Bodies of the Sava Insurance Group (Article 294a of ZGD-1) and
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recommended that the supervisory board resubmit the policy for approval to the general meeting to be convened in 2024.
Goals of the management board for determining the variable remuneration for 2024
At the end of 2023, after extensive discussion, the nominations and remuneration committee proposed that the supervisory board approve the proposed goals of the management board for 2024.
Performing other tasks
The chairman of the nominations and remuneration committee reported regularly to the supervisory board on the work of the committee. The supervisory board regularly reviewed the minutes of the committee’s sessions.
FIT AND PROPER COMMITTEE
In accordance with the law and the Company’s fit and proper policy, the management and supervisory boards have appointed a dedicated fit and proper committee for the fit and proper assessment of the management board and the supervisory board, including all its committees, and the members of these bodies.
Terms of reference
The fit and proper committee operates in accordance with the resolutions of the supervisory board, the Solvency II Directive, the rules of procedure of the supervisory board, the Insurance Act, the Slovenian Corporate Governance Code for Listed Companies, and the recommendations of the Insurance Supervision Agency.
Composition in 2023
The term of office of each committee member is limited by the term of office of the supervisory board.
In 2023, the fit and proper committee comprised the following members: Keith William Morris (chairman), Klemen Babnik, Rok Saje (compliance officer) and Klara Hauko (director of human resource management).
Operation in 2023
The fit and proper committee met two times in 2023. All the members attended both sessions.
The main activities of the fit and proper committee in 2023 are outlined below.
In March 2023, the committee carried out a fit and proper assessment of the candidates for the position of a member of the supervisory board of Sava Re representing the interests of employees. At the same time, it carried out a regular annual fit and proper assessment of all incumbent members of the management board and the supervisory board, including its committees. It also conducted its periodic fit and proper assessment of the aforementioned management and supervisory boards as collective bodies.
When changes were made to the membership of the supervisory board’s committees, the fit and proper committee reassessed the fitness and suitability of the new members to also serve as members of the individual committees. It also reassessed the competence of each committee as a collective body in its new composition.
Performing other tasks
The chairman of the fit and proper committee reported regularly to the supervisory board on the committee’s work. The supervisory board regularly reviewed the minutes of the committee’s sessions.
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CONCLUDING FINDINGS
The year 2023 was marked by a challenging global geopolitical and economic situation, and in August Slovenia (and the wider nearby region) were hit by flooding on an unprecedented scale. This presented the Sava Insurance Group with new challenges. The supervisory board notes that the advanced risk management system, timely actions, capital strength and customer focus of the Company enabled the Sava Insurance Group to achieve virtually all the goals set in its plan for the 2023 financial year, despite the aforementioned loss events and despite the difficult business environment. This assessment of the supervisory board is also based on the report of the independent auditor on the financial statements of Sava Re d.d. and the Sava Insurance Group for 2023, and those of the key function holders of the Company’s risk control system.
As of 2023, the Sava Insurance Group made the transition to the new accounting standards IFRS 17 and IFRS 9. The standards have been successfully introduced into regular reporting processes at all levels.
In 2023, the Sava Insurance Group entered the 2023–2027 strategy period with a new strategy that strategically builds upon and further strengthens the previous strategy period.
In 2024, the supervisory board will also pay particular attention to overseeing the management of risks arising from business operations, taking into account the challenging geopolitical situation. In 2024, in addition to its day-to-day responsibilities, it will also focus in particular on monitoring the implementation of the 2024 business plan and the five-year strategy.
Equally so, the supervisory board will continue to give its steadfast support to the management board, within the scope of its responsibilities, possibilities, and defined powers.
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ANNUAL REPORT 2023
The Company’s management board submitted the audited Annual Report of the Sava Insurance Group and Sava Re d.d. for 2023 for approval to the supervisory board. The audit committee of the supervisory board has reviewed the unaudited and the audited annual reports of the Sava Insurance Group and Sava Re d.d. for the year ended 31 December 2023, including the auditor’s pre-audit report to the management, the auditor’s letter to the management on the audit, and the additional auditor’s report to the audit committee on the audit of the financial statements as at 31 December 2023, prepared in accordance with Article 11 of Regulation (EU) No 537/2014, together with the committee’s opinion thereon. In accordance with its powers, the supervisory board examined the audited annual report at its session on 4 April 2024.
The supervisory board notes that the annual report for 2023 is clear and extensive, and complies with the content and disclosure requirements of the Companies Act, International Financial Reporting Standards and Insurance Act with its implementing regulations.
The supervisory board has also noted the opinion of the auditor Deloitte Revizija d.o.o., Dunajska Cesta 165, 1000 Ljubljana, which audited the 2023 annual report of the Sava Insurance Group and Sava Re d.d. and carried out audit reviews in all of the Group’s subsidiary companies. The supervisory board agrees with the positive opinion of the authorised auditor Deloitte, who finds that the consolidated and separate financial statements provide, in all material respects, a fair view of the financial position of the Sava Insurance Group and Sava Re d.d. as at 31 December 2023, and their profit or loss, other comprehensive income and cash flows for the year then ended, in accordance with International Financial Reporting Standards, as adopted by the European Union.
Based on its review of the 2023 annual report, and based on the opinion of the external auditor and the opinion of the audit committee, the supervisory board is of the opinion that the annual report gives a true and fair opinion of the assets and liabilities, financial position, profit or loss, and cash flows of the Sava Insurance Group and Sava Re d.d.
The supervisory board hereby approves the audited Annual Report of the Sava Insurance Group and Sava Re d.d. for 2023 as submitted by the management board.
DETERMINATION OF AND PROPOSAL FOR APPROPRIATION OF DISTRIBUTABLE PROFIT OF SAVA RE
The supervisory board has also reviewed the management board’s proposal for the appropriation of the distributable profit as at 31 December 2023, subject to final approval by the general meeting of shareholders of Sava Re. The supervisory board of Sava Re d.d. gives its consent to the management board’s proposal to the general meeting regarding the appropriation of the distributable profit as at 31 December 2023 of EUR 57,546,609.84; EUR 27,120,968.00 to be appropriated for dividends, and the remaining part of the distributable profit of EUR 30,425,641.84 to be left unallocated as retained earnings. Thus, the proposed gross dividend per share is EUR 1.75.
The supervisory board proposes that the general meeting of shareholders grant discharge to the management board for the financial year 2023.
Davor Ivan Gjivoje, Jr.
Chairman of the Supervisory Board of Sava Re d.d.
Ljubljana, 4 April 2024
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5 Corporate governance statement 16
Sava Re issues this corporate governance statement to publicly disclose information on the nature, structure and effectiveness of the Company’s internal governance and control system. It aims to increase transparency, accountability and trust among all the Company’s stakeholders, including shareholders, employees and the general public. The Company prepares this statement in accordance with Article 70(5) of the Slovenian Companies Act (ZGD-1) and the recommendations of the Slovenian Corporate Governance Code for Listed Companies. The statement is a special section of the business report as part of the annual report for 2023. It covers the period from 1 January 2023 to 31 December 2023, with additional disclosure of significant events occurring after this period up to the date of its publication. The statement is available in electronic form for at least five years from the date of its publication on the website of the Ljubljana Stock Exchange d.d. in its SEOnet information system (http://seonet.ljse.si) and on the Company’s official website (http://www.sava-re.si).
5.1 Corporate governance policy
In December 2023, with the consent of the Company’s supervisory board, the Sava Re management board adopted the revised Corporate Governance Policy of the Sava Insurance Group and the revised Corporate Governance Policy of Sava Re d.d. The documents set out the main subsidiary governance principles for the Sava Insurance Group and the governance rules for Sava Re, taking into account the goals, mission, vision and values of the Group. The policies represent a commitment to future action.
The Corporate Governance Policy of Sava Re d.d. is available through the Ljubljana Stock Exchange SEOnet information system and from the Company’s website.
5.2 Statement of compliance with the Slovenian Corporate Governance Code for Listed Companies
As a public limited company, Sava Re’s reference code in 2023 was the Slovenian Corporate Governance Code for Listed Companies adopted by the Ljubljana Stock Exchange and the Slovenian Directors’ Association on 9 December 2021. It is available in Slovenian and English from the Ljubljana Stock Exchange website.
The management and supervisory boards of Sava Re hereby state that Sava Re operates in compliance with the Code, with individual deviations that are disclosed and explained below.
5.2.1 Corporate governance statement
Recommendation 5.6: External assessment of adequacy of corporate governance statement
The Company has yet to ensure an external assessment of the adequacy of the corporate governance statement. It intends to carry out an external assessment of the corporate governance statement in the current strategy period.
16 GRI 2-23.
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5.2.2 Remuneration policy and remuneration report for members of management and supervisory bodies 17
Recommendation 6.1: Designing a remuneration policy
A remuneration policy and a remuneration report for members of management and supervisory bodies were presented to the 39th general meeting of shareholders of Sava Re (held on 5 June 2023). As the remuneration policy was not approved at the general meeting, an amended policy will be considered at the next general meeting in 2024 (scheduled for 27 May 2024).
5.2.3 Relationship between the Company and shareholders – Relations with shareholders
Recommendation 10.1: Holding general meetings by electronic means
The Company has not yet provided for the possibility of attending and voting at the general meeting by electronic means without physical presence. It intends to amend its internal rules (articles of association and rules of procedure for the general meeting) during the current strategy period.
5.2.4 Supervisory board
Recommendation 14.6: Duties of the supervisory board – Supervisory board members’ access to the archives after the end of their term of office
In 2024, the Company will amend the rules of procedure of the supervisory board to include a provision on the access of members to the supervisory board’s archives after the end of their term of office.
Recommendation 16.4: Evaluation of the supervisory board
The supervisory board does not perform periodic external assessments of its evaluation. The Company intends to perform periodic external assessments of the supervisory board’s evaluation during the current strategy period.
Recommendation 18.4: Supervisory board committees – Term of office of an external member of a committee not tied to the term of office of the supervisory board
In the Company, the terms of office of all committee members are tied to the term of office of the supervisory board. For practical reasons, given the complexity of fit and proper assessment procedures upon the appointment of new committee members and upon their reappointment, the terms of office of external committee members are tied to the terms of office of the supervisory board.
5.2.5 Transparency in operations – Public disclosure of significant information
Recommendation 32.7: Public disclosure of the rules of procedure of management bodies
The Company has published the rules of procedure of both the general meeting and the supervisory board on its website but not those of the management board, as they are an internal procedural document.
17 GRI 2-19, 2-20.
42
5.3 Governing bodies of Sava Re 18
Management system
Sava Re has a two-tier management system with a management board that conducts the business and a supervisory board that oversees operations. The governing bodies – the general meeting, and the supervisory and management boards – act in compliance with laws, regulations, the articles of association and internal rules. The Company’s articles of association and the rules of procedure of both the general meeting and the supervisory board are posted on the Company’s website.
The risk management system is a cornerstone of strong governance. The management board ensures the effectiveness of this system. Rules of the risk management systems and own risk and solvency assessment rules are set out in detail in the Company’s internal regulations.
The Company has certain functions integrated into its organisational structure and decision-making processes. These are the risk management function, internal audit function, actuarial function and compliance function, defined by applicable law as the key functions of the governance system (key functions). They are integrated in order to strengthen the three lines-of-defence framework in the Company’s control system. Rules governing individual key functions are set out in detail in the Company’s internal regulations.
5.3.1 General meeting of shareholders
The general meeting of shareholders is the supreme body of the Company through which shareholders exercise their rights in Company matters. The terms of reference of the general meeting are governed by its rules of procedure, which are posted on the Company’s website.
Convening the general meeting
The general meeting of shareholders, through which the shareholders of Sava Re exercise their rights in the affairs of the Company, is convened at least once a year, but not later than by the end of August. The general meeting may be convened in other cases as provided by law, the Company’s articles of association, and whenever this is in the interest of the Company. As a rule, the general meeting is convened by the management board. In the cases stipulated by law, it may be convened by the supervisory board or shareholders.
The Company publishes general meeting notices through the SEOnet system provided by the Ljubljana Stock Exchange and through its website (www.ljse.si), on the AJPES website (www.ajpes.si) and on the Company’s official website (www.sava-re.si), as well as in printed form in one daily newspaper as provided for in the articles of association (in Delo or Dnevnik) or in the Official Gazette of the Republic of Slovenia.
Participation in the general meeting
To attend the general meeting and exercise their voting rights, shareholders must send the Company a registration form no later than by the end of the fourth day prior to the general meeting and must be registered holders of shares listed in the central register of book-entry securities at the end of the seventh day prior to the general meeting.
The conditions of participation or exercise of voting rights at the general meeting must be set out in detail in the notice of the general meeting.
18 GRI 2-9.
43
Adoption of resolutions
General meeting resolutions are adopted by a majority of votes cast (simple majority), unless a larger majority or other requirements are stipulated by law or the articles of association.
Exercise of voting rights
Shareholders may exercise their voting rights in the general meeting according to their share of the Company’s share capital. Each no-par-value share with voting rights carries one vote. Voting rights can be exercised by proxy based on a written proxy form, or through financial organisations or shareholder associations.
Treasury shares carry no voting rights.
The general meeting in 2023
The general meeting of shareholders was convened once in 2023.
In accordance with the Company’s 2023 financial calendar, the 39th general meeting of shareholders was held on 5 June 2023. Among other things, the general meeting was presented with the annual report for 2022, including the auditor’s opinion and the written report of the supervisory board to the annual report, and the annual report on internal auditing for 2022 with the opinion of the supervisory board thereto. The general meeting received the management board’s report on treasury shares. At the 39th general meeting, the shareholders adopted the management and supervisory boards’ proposal to use EUR 24,796,313.60 of the distributable profits for dividends. The dividend was EUR 1.60 gross per share, payable on 21 June 2023 to shareholders of record on 20 June 2023. The shareholders granted discharge to the management and supervisory boards for 2022. At the 39th general meeting, the shareholders approved the Directors’ Remuneration Report of Sava Re d.d. for the Financial Year 2022, whereas the advisory vote on the resolution to approve the Remuneration Policy for Members of Management and Supervisory Bodies of Sava Re d.d. was not carried. Although the remuneration policy is valid and consistent with the law, it is not fully aligned with the recommendations of the shareholder Slovenian Sovereign Holding (SSH) published on 4 May 2023. The Company will put a revised remuneration policy to a vote at the next annual general meeting of Sava Re. The remuneration report and the remuneration policy were also published on the Company’s website immediately after the 39th general meeting and will remain publicly available for at least ten years. No legal actions to challenge any general meeting resolutions were announced at the general meeting.
5.3.2 Supervisory board
The supervisory board oversees the Company’s conduct of business and appoints members of the management board.
In accordance with the Company’s articles of association and applicable law, the supervisory board is composed of six members, of which four (shareholder representatives) are elected by the Company’s general meeting, and two (employee representatives) are elected by the works council, which informs the general meeting of its decision. Supervisory board members are appointed for a term of up to four years and may be re-elected. The supervisory board members elect a chair and deputy chair from among their number.
The supervisory board is composed in such a manner as to ensure responsible oversight and decision-making in the best interest of the Company. Its composition takes account of diversity in terms of technical knowledge, experience and skills, and the way members complement each other so as to form a homogeneous team, which also ensures a sound and prudent oversight of the Company’s affairs. In 2023, the Company sought to align the composition of the supervisory board with the
44
Company’s policy on the diversity of the management and supervisory boards. The Company’s policy on diversity of the management and supervisory boards is posted on the Company’s website.
In 2023, the gender balance on the supervisory board was 16.67% women and 83.33% men. The implementation of the policy on diversity of the supervisory board in 2023 is detailed below.
Terms of reference and operation of the supervisory board
The supervisory board must comply with the applicable legislation, particularly the Slovenian Companies Act and the Insurance Act, the Company’s articles of association and the supervisory board’s rules of procedure. In accordance with the law, the supervisory board must be convened at least on a quarterly basis, generally after the end of each quarter of the financial year, and more frequently if necessary. The terms of reference of the supervisory board are governed by the Rules of Procedure of the Supervisory Board of Sava Re d.d., which are posted on the Company’s website.
Remunerations, compensation and other benefits
The supervisory board members are entitled to remuneration for performing their function, attendance fees and reimbursement of expenses. The remuneration must not be directly linked to the Company’s performance, as demonstrated by its financial statements. The amount of the above remuneration was set by resolution of the general meeting and is also regulated by the Remuneration Policy for Members of Management and Supervisory Bodies of Sava Re d.d., which was submitted for approval to the 39th general meeting (held on 5 June 2023). For more details on the remuneration policy, please refer to the section “The general meeting in 2023”.
The remuneration of supervisory board members in 2023 is disclosed in more detail in section 16.10 “Related party disclosures” in the notes to the financial statements and in more detail in the Directors’ Remuneration Report for 2023, which will be submitted as a separate document to the general meeting.
Commitment to identify the existence of any conflict of interest
Before taking office and afterwards periodically (annually) and upon each change, each supervisory board member signs and submits to the supervisory board a statement of their independence, thereby taking a position with respect to individual conflicts of interest, in accordance with the criteria set out in the Code. The statements of independence of the members of the Company’s supervisory board are posted on the Company’s website.
POSR holdings of supervisory board members
Supervisory board members report any acquisition or disposal of Company shares to the Company and relevant organisations, and Sava Re posts this information.
Details on POSR shares held by supervisory board members as at 31 December 2023 are provided in section 3 “Shareholders and share trading”.
The supervisory board in 2023
In 2023, the supervisory board comprised the following members: Davor Ivan Gjivoje Jr (Chairman), Keith William Morris (Deputy Chairman), Klemen Babnik, Matej Gomboši, Andrej Gorazd Kunstek (until 12 June 2023), Edita Rituper and Blaž Garbajs (from 13 June 2023).
5.3.3 Supervisory board committees
Pursuant to legislation, the Code and best practice, the supervisory board appoints one or more committees, tasking them with specific areas, the preparation of draft resolutions of the supervisory board, the implementation of resolutions of the supervisory board and other tasks requiring specialist expertise, thereby providing the board with professional support.
45
The Company has established the following supervisory board committees:
•the audit committee,
•the risk committee,
•the nominations and remuneration committee,
•the fit and proper committee.
Audit committee
The main tasks of the audit committee are to:
•oversee the integrity of financial information;
•monitor the efficiency and effectiveness of internal controls, the operation of the internal audit department and risk management systems;
•monitor the statutory audit of independent and consolidated financial statements;
•perform other tasks assigned by a valid resolution of the supervisory board, in line with statutory requirements and best practices of comparable companies or insurance groups.
In 2023, the audit committee comprised the following members: Matej Gomboši (chairman), Andrej Gorazd Kunstek (until 12 June 2023), Blaž Garbajs (from 13 June 2023), Katarina Sitar Šuštar (external member) and Dragan Martinović (external member).
Risk committee
The main tasks of the risk committee are to:
•assess the impact of various types of risk on economic and regulatory capital;
•assess the Group’s overall risk governance framework, including the risk management policy, and the risk strategy, and monitor operational risks;
•assess the appropriateness and adequacy of risk management documents to be approved by the supervisory board;
•perform other tasks assigned by a resolution of the supervisory board, in line with statutory requirements and best practices of comparable companies or insurance groups.
In 2023, the risk committee comprised the following members: Keith William Morris (chairman), Davor Ivan Gjivoje Jr, Slaven Mićković (external member) and Janez Komelj (external member).
Nominations and remuneration committee
The main tasks of the nominations and remuneration committee are to:
•draft proposals for the supervisory board regarding the criteria for membership of the management board, and consider and draft proposals concerning nominations to be decided by the supervisory board;
•preliminarily consider the proposal of the chair of the management board regarding the composition of the management board and the Company’s governance, and draw up proposals for the supervisory board;
•carry out the nomination process for candidates for membership of the supervisory board who are shareholder representatives;
•provide support in drawing up and implementing a system for remuneration, reimbursements and other benefits for management board members.
46
In 2023, the nominations and remuneration committee comprised the following members: Klemen Babnik (chairman), Davor Ivan Gjivoje Jr, Keith William Morris, Matej Gomboši, Andrej Gorazd Kunstek (until 12 June 2023), Edita Rituper (from 13 June 2023) and Blaž Garbajs (from 14 December 2023).
Fit and proper committee
The main tasks of the fit and proper committee are to:
•carry out procedures for assessing the competence of the supervisory board, supervisory board committees and the management board as collective bodies, and conduct fit and proper assessments of individual members of these bodies;
•at the request of the Company’s works council, carry out a fit and proper assessment of any employee representative on the supervisory board elected by the works council.
In 2023, the fit and proper committee comprised the following members: Keith William Morris (chairman), Klemen Babnik, Rok Saje (compliance officer) and Klara Hauko (director of human resource management).
47
Composition of the supervisory board in 2023
Full name
Davor Ivan Gjivoje Jr
Keith William Morris
Klemen Babnik
Matej Gomboši
Edita Rituper
Blaž Garbajs
Andrej Gorazd Kunstek
Function
chair
deputy chair
member
member
member
member (from 13 June 2023)
member (until 12 June 2023)
Employment
Networld Inc. / DGG Holdings Ltd., 36 Cattano Ave. Fl. 5. Ste. 3, Morristown, NJ 07960, USA
retiree
Ministry of Finance of the Republic of Slovenia, Župančičeva Ulica 3, 1000, Ljubljana, Slovenia
Financial Administration of the Republic of Slovenia, Šmartinska Cesta 55, 1000 Ljubljana, Slovenia
Sava Re d.d., Dunajska Cesta 56, 1000 Ljubljana, Slovenia
Sava Re d.d., Dunajska Cesta 56, 1000 Ljubljana, Slovenia
Sava Re d.d., Dunajska Cesta 56, 1000 Ljubljana, Slovenia
First appointed
7 March 2017
15 July 2013
17 July 2021
17 July 2021
1 January 2022
13 June 2023
23 January 2013
End of term of office
8 March 2025
17 July 2025
17 July 2025
17 July 2025
13 June 2027
13 June 2027
12 June 2023
Representative of shareholders/employees
of shareholders
of shareholders
of shareholders
of shareholders
of employees
of employees
of employees
Attendance at sessions
10/10
10/10
10/10
10/10
10/10
5/5
5/5
Gender
M
M
M
M
F
M
M
Nationality
American
British
Slovenian
Slovenian
Slovenian
Slovenian
Slovenian
Year of birth
1968
1948
1983
1975
1966
1980
1974
Education
B.A. in political science, master of science in economics
B.Sc. in management sciences, specialised in finance and marketing
university graduated lawyer
doctoral degree in computing and informatics
university graduated economist
university graduated economist
university graduated economist, master of science in economics
Professional profile
strategic management, business administration, management of equity investments, risk management, insurance business
strategic management, business administration, banking and insurance business, risk management
business administration, leadership, corporate governance, general legal affairs, compliance monitoring
business administration, governance, information technology, digitalisation, audit
insurance business, governance, corporate governance, sustainable development
finance, corporate finance, insurance business, governance
insurance and reinsurance business, actuarial affairs, governance
Independence under the Code
YES
YES
YES
YES
YES
YES
YES
Memberships in committees and functions
•risk committee, member
•nominations and remuneration committee, member
•risk committee, chair
•nominations and remuneration committee, member
•fit and proper committee, chair
•nominations and remuneration committee, chair
•fit and proper committee, member
•audit committee, chair
•nominations and remuneration committee, member
•nominations and remuneration committee, member (from 13 June 2023)
•audit committee, member
(from 13 June 2023)
•nominations and remuneration committee, member (from 14 December 202 3)
•audit committee, member (until 12 June 2023)
•nominations and remuneration committee, member (until 12 June 2023)
48
Full name
Davor Ivan Gjivoje Jr
Keith William Morris
Klemen Babnik
Matej Gomboši
Edita Rituper
Blaž Garbajs
Andrej Gorazd Kunstek
Attendance of committee sessions
•risk committee: 6/6
•nominations and remuneration committee: 3/3
•risk committee: 6/6
•nominations and remuneration committee: 3/3
•fit and proper committee: 2/2
•nominations and remuneration committee: 3/3
•fit and proper committee: 2/2
•audit committee: 9/9
•nominations and remuneration committee: 3/3
•nominations and remuneration committee: 2/3
•audit committee: 4/9
•nominations and remuneration committee: 0/3
•audit committee: 5/9
•nominations and remuneration committee: 1/3
Notes on memberships of management or supervisory bodies of third parties
Networld Inc. / DGG Holdings Ltd., 36 Cattano Ave. Fl. 5. Ste. 3, Morristown, NJ 07960, USA – chief executive officer
Adria Lines Dover, Delaware, USA – chief executive officer
Sava d.d., Dunajska 152, 1000 Ljubljana, Slovenia – chair of the supervisory board
Sava Turizem d.d., Dunajska 152, 1000 Ljubljana, Slovenia – chair of the supervisory board
HMS Victory Preservation Endowment Fund Ltd, HM Naval Base (PP66) Portsmouth Hampshire PO1 3NH, UK – chair of the board of directors
Sava d.d., Dunajska 152, 1000 Ljubljana, Slovenia – member of the supervisory board
Sava Turizem d.d., Dunajska 152, 1000 Ljubljana, Slovenia –
member of the supervisory board
Imark, Matej Gomboši, Inštitut za Svetovanje in Informatiko, s.p., Panonska Ulica 101, Beltinci, 9231 Beltinci, Slovenia – founder
/
/
/
* Blaž Garbajs is also a member of the audit committee of the associate company Diagnostic Centre Bled, and this committee also serves as the audit committee for two of the associate’s subsidiaries.
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External member of supervisory board committees in 2023
Full name
Katarina Sitar Šuštar
Dragan Martinović
Slaven Mićković
Janez Komelj
Rok Saje
Klara Hauko
Supervisory board committee
audit committee
audit committee
risk committee
risk committee
fit and proper committee
fit and proper committee
First appointed
17 July 2021
17 July 2021
17 July 2021
17 July 2021
17 July 2021
17 July 2021
End of term of office
17 July 2025
17 July 2025
17 July 2025
17 July 2025
17 July 2025
17 July 2025
Attendance at sessions
9/9
9/9
6/6
6/6
2/2
2/2
Gender
F
M
M
M
M
F
Nationality
Slovenian
Slovenian
Slovenian
Slovenian
Slovenian
Slovenian
Year of birth
1971
1959
1958
1954
1977
1972
Education
university graduated economist, MBA
university graduated economist
master of mathematical sciences, doctor of science in economics
master of economics, master of computer science, doctor of science in economics
university graduated lawyer
university graduated economist, MBA, master of occupational psychology and organisation
Professional profile
audit, accounting, finance, taxation, banking and insurance, corporate governance, certified auditor
audit, accounting, finance, taxation, commercial trade, certified auditor
banking, modelling, risk management
insurance operations, actuarial affairs, risk management
insurance operations, general legal affairs, insurance law, compliance
human resources management and development, work organisation
Employment
University of Ljubljana, Faculty of Economics, Kardeljeva Ploščad 17, 1000 Ljubljana, Slovenia
UHY Revizija in Svetovanje d.o.o., Vurnikova 2, 1000 Ljubljana, Slovenia
Ministry of Labour, Family, Social Affairs and Equal Opportunities, Štukljeva Cesta 44, 1000 Ljubljana, Slovenia
retiree
Sava Re d.d., Dunajska Cesta 56, 1000 Ljubljana, Slovenia
Sava Re d.d., Dunajska Cesta 56, 1000 Ljubljana, Slovenia
Notes on memberships of management or supervisory bodies of third parties
Flat, Katarina Sitar Šuštar, s.p., Zaprice 6b, 1241 Kamnik, Slovenia – founder
Shramba d.o.o.,
Vilharjeva Cesta 27, 1000 Ljubljana, Slovenia – founder and managing director
UHY Revizija in Svetovanje d.o.o., Vurnikova 2, 1000 Ljubljana, Slovenia – founder and holder of procuration
SM, Poslovno Svetovanje, Slaven Mićković, s.p., Avčinova 12, 1000 Ljubljana, Slovenia – founder
/
/
/
The operation of the supervisory board and its committees in 2023 is detailed in section 4 “Report of the supervisory board”.
5.3.4 Management board
The management board runs the Company and represents it in public and legal matters. It is composed of at least two but no more than five members, of whom one is the chair. The chair and members of the management board are appointed by the supervisory board for a period of five years. Such appointments are renewable without limitations. The chair and all members of the management board are in regular employment on a full-time basis. The exact number of management board members and
50
the areas for which they are responsible is laid down by the supervisory board in the Act on the Management Board of Sava Re d.d.
The management board is composed in a manner to ensure responsible oversight and decision-making in the best interest of the Company. The management board’s composition takes account of the diversification of technical knowledge, experience and skills, and the way members complement each other so as to form a homogenous team and ensure sound and prudent conduct of the Company’s business. In 2023, the Company sought to align the composition of the management board with the Company’s policy on diversity of the management and supervisory boards.
The Company’s policy on diversity of the management and supervisory boards is posted on the Company’s website.
In 2023, the gender balance on the management board was 33.33% women and 66.67% men until 21 March 2023, and 25% women and 75% men from 22 March 2023. The implementation of the policy on diversity of the management board in 2023 is detailed below.
Terms of reference and operation of the management board
The management board operates in accordance with the applicable legislation, particularly the Slovenian Companies Act and the Insurance Act, as well as with the articles of association and the act on the management board and its rules of procedure. Terms of reference and operation of the management board are defined in more detail in the Rules of Procedure of the Management Board of Sava Re d.d.
Delimitation of competencies between the management and supervisory bodies is described in greater detail in the Corporate Governance Policy of Sava Re d.d., which is posted on the Company’s website.
Remunerations, compensation and other benefits
The remuneration of the management board members consists of a fixed and a variable component. The variable component of the salary of a management board member is composed of (1) business-performance-based pay, (2) individual-performance-based pay linked to the annual goals of each management board member and (3) team-performance-based pay relating to joint goals of the management board. The variable component must not be determined so as to allow the rewarding of behaviour that encourages the exposure of the Company to uncontrolled risk. Remuneration, reimbursements and other benefits of management board members are set out in the employment contract made between the Company and each management board member. The methodology used to establish both the variable pay and the amount of the bonus of each management board member is adopted by the supervisory board. Sava Re prepared an update of its remuneration policy in 2023. For more details on the remuneration policy, please refer to the section “The general meeting in 2023”.
The remuneration of the members of the management board in 2023 is disclosed in more detail in section 16.10 “Related party disclosures” in the notes to the financial statements and in more detail in the Directors’ Remuneration Report for 2023, which will be submitted as a separate document to the general meeting.
Share ownership
The management board members report any acquisition or disposal of the Sava Re shares to the Company and to the relevant institutions, which is then published by Sava Re.
Details on POSR shares held by management board members as at 31 December 2023 are provided in section 3 “Shareholders and share trading”.
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The management board in 2023
In 2023, the management board comprised the following members: Marko Jazbec (chairman), Polona Pirš Zupančič, Peter Skvarča and David Benedek (the latter from 22 March 2023).
The average age of the members of the management board is 50.38 years. All the members of the management board are citizens of the Republic of Slovenia.19
19 GRI 202-02.
52
Composition of the management board in 2023
Full name
Marko Jazbec
Polona Pirš Zupančič
Peter Skvarča
David Benedek
Function
chairman
member
member
member (from 22 March 2023)
Work area at management board level
•coordination of work of the management board
•general, HR, organisational and legal affairs
•public relations
•compliance
•internal audit
•management of strategic investments in Slovenia-based insurance companies (from 22 March 2023)
•information technology
•sustainable development
•corporate finance
•strategic planning and controlling
•accounting
•investor relations
•capital and risk management
•actuarial affairs
•development of reinsurance and reinsurance underwriting, Group and non-Group
•reinsurance protection (retrocession), Group and non-Group
•development of reinsurance processes and technology
•reinsurance technical accounting
•management of strategic investments in non-Slovenian subsidiaries
•financial operations and asset management
•management of strategic investments in pension companies and asset management companies (AMCs)
•management of strategic investments in healthcare companies
•managing overarching cooperation with commercial banks or banking groups at Group level
First appointed
12 May 2017
14 January 2018
19 June 2020
22 March 2023
End of term of office
13 May 2027
15 January 2028
19 June 2025
22 March 2028
Gender
M
F
M
M
Nationality
Slovenian
Slovenian
Slovenian
Slovenian
Year of birth
1970
1975
1975
1973
Education
university graduated economist
university graduated economist, master of science in economics
university graduate in political sciences / international relations, master’s degree in European integration
university graduated economist, master of science in economics
Professional profile
banking, insurance business, finance, strategic management, corporate governance, business administration
insurance and reinsurance business, corporate governance, controlling, accounting, risk management, actuarial affairs, corporate governance, business administration
insurance and reinsurance business, corporate governance, business administration
banking, insurance business, finance, corporate governance, business administration
Notes on memberships of management or supervisory bodies of third parties
Slovenian Insurance Association, GIZ, Železna Cesta 14, 1000 Ljubljana, Slovenia – member of the association’s council
/
Tennis Association of Slovenia, Šmartinska 152, 1000 Ljubljana, Slovenia – member of the board of directors
/
Notes on memberships of management or supervisory bodies of related parties
Illyria sh.a., Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo – chair of the board of directors
Illyria Life sh.a., Sheshi Nëna Terezë 33, 10000 Pristina, Kosovo – chair of the board of directors
Sava Osiguranje a.d., Ulica Svetlane Kane Radević br. 1, 81000 Podgorica, Montenegro – chair of the board of directors
Sava Životno Osiguranje a.d.o., Bulevar Vojvode Mišića 51, 11000 Belgrade, Serbia – chair of the supervisory board
Sava Infond, Družba za Upravljanje, d.o.o., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – chair of the supervisory board (until 15 August 2023), deputy chair of the supervisory board (from 16 August 2023)
Sava Osiguruvanje, a.d., Železnička 41, Opština Centar, PF 133, 1000 Skopje, North Macedonia – non-executive member of the board of directors
Sava Penzisko Društvo a.d., Ulica Majka Tereza 1, 1000 Skopje, North Macedonia – supervisory board member
Zavarovalnica Sava d.d., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – member of the supervisory board
Sava Pokojninska Družba d.d., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – chair of the supervisory board (from 28 June 2023)
DCB d.o.o., Pod Skalo 4, 4260 Bled, Slovenia – deputy chair of the supervisory board (from 30 June 2023)
Sava Infond, Družba za Upravljanje, d.o.o., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – member of the supervisory board (from 3 June 2023), chair of the
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Full name
Marko Jazbec
Polona Pirš Zupančič
Peter Skvarča
David Benedek
Zavarovalnica Sava d.d., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – chair of the supervisory board
Vita, Življenjska Zavarovalnica, d.d., Trg Republike 3, 1001 Ljubljana, Slovenia – chair of the supervisory board (until 7 June 2023)
Zavarovalnica Sava d.d., Ulica Eve Lovše 7, 2000 Maribor, Slovenia – deputy chair of the supervisory board
Sava Neživotno Osiguranje a.d., Bulevar Vojvode Mišića 51, 11000 Belgrade, Serbia – chair of the board of directors
supervisory board (from 16 August 2023)
Vita, Življenjska Zavarovalnica, d.d., Trg Republike 3, 1001 Ljubljana, Slovenia – chair of the supervisory board (from 7 June 2023)
Vita S Holding d.o.o., Skopje, Ul. Dimche Mirchev 20, Center Municipality, 1000 Skopje, North Macedonia – chair of the supervisory board (from 14 September 2023)
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5.4 Internal control and risk management systems relating to financial reporting 20
Internal controls comprise a system of guidelines and processes designed and implemented by Sava Re at all levels to manage risks associated with, among other things, financial reporting, for both Sava Re and the Sava Insurance Group. These controls work to guarantee the efficiency and effectiveness of operations, the reliability of financial reporting and compliance with applicable external and internal regulations.
Apart from the Slovenian Companies Act (ZGD-1), Sava Re is governed by the Slovenian Insurance Act (ZZavar-1), which provides that insurance companies must put in place and maintain an appropriate internal control and risk management system. Relevant implementing regulations based on the Insurance Act are issued by the Insurance Supervision Agency and strictly complied with by the Company.
Financial controls are closely linked to information technology controls, which aim, among other things, to limit and control access to the network, information and applications, and to control the completeness and accuracy of data input and processing. The latter is established at the Group and parent company level through compliance with the information security policy and the enforcement of security policies.
Internal controls applicable to financial reporting on a consolidated basis are set out in the internal accounting rules and the Sava Insurance Group Financial Control Rules.
Internal controls, which are mainly preventive and detective in nature, include regular checks on account balances, reconciliation of subsidiary records with general ledger balances, built-in system controls (access restrictions, segregation of duties, limit systems and authorisations), automation of reporting and transfers between systems, additional manual controls on reporting and checks on consolidation packages. Reporting consistency is achieved through the use of a uniform data reporting system.
Internal controls include the four-eye principle, information transfer (including with subsidiaries), regular review and monitoring of transactions, department meetings, ongoing monitoring of announced regulatory changes, regular training and mentoring.
The valuation of assets and liabilities arising from insurance and reinsurance contracts follows the four-eyes principle, while the calculations are based on the valuation methodology for insurance and reinsurance contracts in accordance with IFRS 17. In addition, for consolidation purposes, additional internal controls are in place to review the consolidation processes for manual data entry and internal controls over items where adjustments are made to the Group, as well as controls over all the procedures carried out for the Group (e.g. consolidation adjustments). Members of the Group submit the financial information required for the preparation of the consolidated financial statements in reporting packages, prepared in accordance with International Financial Reporting Standards (IFRS) and the parent company’s guidelines, within the time limits set out in the Company’s financial calendar. In addition, Group members submit their separate financial statements, which constitutes an additional control measure. By unifying information systems and applications that support consolidation, planning and reporting, the exchange and control of financial data between subsidiaries and the parent company is becoming ever more efficient. Whether necessary information system controls have been put in place and function adequately is verified, on an annual basis, by relevant experts as part of the regular annual auditing of financial statements.
20 GRI 3-3.
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A system of internal controls is also in place for other important business processes. Effective risk management requires that companies ensure a functioning and established internal control system. The systematic internal controls of companies ensure the achievement of its objectives in terms of the efficiency and effectiveness of its operations, the reliability, timeliness and transparency of internal and external reporting, and compliance with applicable laws, legal provisions and internal regulations. All major business processes have been specified, including details on control points and the persons responsible for each control. Basic controls are carried out by reviewing documents received or by an automatic or manual control procedure of processed data.
Sava Re complies with all rules and regulations on handling confidential data and inside information, allocating investments and prohibiting trading based on inside information.
Other entities authorised by Sava Re to provide individual services must do so in compliance with the law, implementing regulations, service contracts, internal rules and work instructions in force at Sava Re.
The risk management department monitors improvements in the internal control environment and keeps track of internal controls in the internal control register, which is linked to the risk register. In accordance with the Insurance Act, Sava Re has its own internal audit department, which provides assurance and advice to the management board on how to increase added value and improve the efficiency and effectiveness of operations. The internal audit department assists the Company in achieving its goals by systematically and methodically assessing the effectiveness and efficiency of the governance, risk management and internal control systems and making recommendations for their improvement. The internal audit also reports on its findings to the management board, the audit committee and the supervisory board.
5.5 External audit
In 2022, a contract was signed with Deloitte Revizija d.o.o., Dunajska 165, 1000 Ljubljana, for the audit of the financial statements for the period 2022–2024.
Deloitte has also audited the financial statements of Sava Re and the Sava Insurance Group for 2022 and 2023. In 2022 and 2023, the Group’s subsidiary companies were audited by the local audit staff of the same auditing firm.
5.6 Disclosures in accordance with Article 70(6) of the Companies Act 21
Sava Re is subject to the Slovenian Takeovers Act (ZPre-1).
The composition of Sava Re’s share capital, the list of qualified shareholders under the Slovenian Takeovers Act as at 31 December 2023, the rights and obligations attached to the shares, the restrictions on share transfer and the absence or existence of shares carrying special control rights are presented in section 3 “Shareholders and share trading”.
Employee share scheme
Sava Re has no employee share scheme.
Restrictions of voting rights
Sava Re has adopted no restrictions on voting rights.
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Shareholders’ agreements restricting transferability of shares and voting rights
Sava Re is not aware of any such agreements between shareholders.
Rules on appointment or removal of members of management or supervisory bodies and on amendments to the articles of association
Company rules on appointment or removal of management board members
Under the Sava Re articles of association, the chair and the members of the management board are appointed by the supervisory board for a period of five years. Such appointments are renewable without limitation. To be appointed as a member of the management board, natural persons must have full legal capacity and meet the requirements set down by law and the Company’s internal rules. The process and criteria for the selection of candidates for members of the management board and the process of periodic fit and proper assessments of individual members, as well as the assessment of the competence of the management board as a collective body, are clearly set out in the Company’s fit and proper policy for relevant persons.
The management board as a whole and its individual members may be removed from office by the supervisory board for reasons prescribed by law.
Company rules on appointment and removal of supervisory board members
Under the Sava Re articles of association, the supervisory board is composed of six members, of which four (shareholder representatives) are elected by the Company’s general meeting, and two (employee representatives) are elected by the works council, which subsequently informs the general meeting of its decision. Shareholder representatives of the supervisory board are elected by the general meeting by a majority of votes present. The term of office of supervisory board members is four years and is renewable. To be appointed as a member of the supervisory board, natural persons must have full legal capacity and meet the requirements set down by law and the Company’s internal rules. The process and criteria for selecting candidates for membership of the supervisory board and for drafting proposals for general meeting resolutions on the appointment of supervisory board members, including the process of periodic fit and proper assessments of individual members, as well as the assessment of the competence of the supervisory board as a collective body, are clearly set out in the Company’s fit and proper policy for relevant persons.
Supervisory board members who are shareholder representatives may be removed from office by the general meeting for reasons prescribed by law, by a resolution passed by a majority of at least three quarters of the share capital represented.
Company rules on amendments to its articles of association
The Sava Re articles of association do not contain special provisions governing their amendment. Under the applicable legislation, they may be amended by resolution of the general meeting by a majority of at least three quarters of the share capital represented.
Powers of the management board (increase in share capital, acquisition of treasury shares)
The management board has no authorisation to increase the share capital.
The Company’s management board has no authorisation to purchase treasury shares.
With the additional treasury share repurchases in April 2016, the management board fully exhausted the general meeting authorisation granted in 2014 to purchase treasury shares up to 10% minus one share of the share capital.
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Important agreements that become effective, change or terminate after a public takeover bid results in a control change
Sava Re limits its exposure by reinsuring its own account (retrocession). As is customary in the industry, retrocession contracts contain provisions governing contract termination in cases involving significant changes in ownership or control of the counterparty.
Agreements between an entity and members of its management or supervisory bodies on compensation in case of (i) resignation, (ii) dismissal without cause or (iii) termination of employment relationship due to any bid specified in the law governing takeovers
Management board members are not entitled to severance pay in case of resignation.
A management board member is entitled to severance pay if recalled for other economic or business reasons (major change in shareholder structure, reorganisation, launch of a new product, major change in the Company’s business and such like) and the employment relationship with a company of the Sava Insurance Group is terminated.
A management board member is also entitled to severance pay in the event of termination of their office by mutual consent, in which case there must be no grounds of fault for their removal from office, in conjunction with the termination of their employment relationship with a company of the Sava Insurance Group.
A management board member is also entitled to severance pay upon retirement.
5.7 Governance of Sava Insurance Group members 22
The parent company’s management and supervisory bodies are the Group’s bodies responsible for the proper governance and supervision of the entire Group and for setting up a governance framework appropriate to the structure, business and risks of the Sava Insurance Group as a whole and of its individual members.
The parent company fully exercises its governance function by setting the business strategy from the top down, taking into account both the Group as a whole and its individual members. For optimal capital allocation and resilience against unforeseen events, capital allocation and capital adequacy are managed on the Group level following the top-down principle. As part of its risk strategy, the Group sets the risk appetite at the Group level and the level of its members.
The Group has set up a systematic approach to risk management, including risk management at the level of individual companies, appropriate monitoring of the risks of individual companies by the parent company and risk management at the Group level. The latter takes into account any interaction between the risks of individual Group companies, in particular risk concentration and other material risks associated with the operation of the Group.
Management or supervisory bodies of Sava Insurance Group subsidiaries individually pursue the same values and corporate governance policies as the parent company, unless otherwise required by law, the local regulator or based on the principle of proportionality. Therefore, the management or supervisory bodies of each Sava Insurance Group subsidiary, as part of their responsibility for the governance of their company with regard to the implementation of the Group’s policies, consider the need for any adjustments to local legislation as well as any other necessary adjustments and, in accordance with the procedures set out in the Group’s policies, determine their adjustments to these policies, ensuring that the subsidiary complies with applicable laws, implementing regulations and the rules of sound and prudent operation.
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The governance of the Sava Insurance Group is described in more detail in the Corporate Governance Policy of Sava Re d.d. posted on the Company’s website.
Ljubljana, 15 March 2024
Ljubljana, 4 April 2024
Sava Re Management Board
Sava Re Supervisory Board
Marko Jazbec, Chairman
Davor Ivan Gjivoje Jr, Chairman
Polona Pirš Zupančič, Member
Peter Skvarča, Member
David Benedek, Member
6 Mission, vision, strategic focus and goals
6.1 Our purpose 23
Through a positive climate, good business culture, continuous training and investments in employees, we contribute to the ongoing development of insurance and ancillary products and to more optimal business processes. We are developing a Group-specific corporate culture that will be reflected in the quality of services and in the loyalty of our employees to their company and the Group.
By definition, insurance is the provision of economic security through the spreading of financial risk, which is why the industry is tightly intertwined with the larger overall economy. Within this system, Sava Re has a responsibility to support activities that contribute to improving the social environment. Sustainable development is an area to which the Company is increasingly committed. Special attention is given to the exchange of knowledge, ongoing training of employees and external stakeholders, and the utilisation of synergies among Sava Insurance Group companies. The social responsibility demonstrated reflects the values on which we intend to focus more in the future.
We are working to become a recognised provider of comprehensive insurance and reinsurance services in our target markets, to create a climate of trust and loyalty among our stakeholders and to be recognised as a company that communicates fairly and transparently. We strive to meet the expectations of our shareholders and achieve an adequate return on equity, to raise awareness about the organisation’s values and to integrate these into core business policies and the way people conduct themselves.
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Our mission
Through commitment and constant progress, we ensure security and quality of life.
Our vision
We are building a customer-centric, flexible and sustainability-oriented insurance group.
Our values
We build relationships with care, integrity and respect.
We exceed customer expectations through our ongoing effort to make improvements and strengthen relationships.
We are active in relation to our natural and social environment.
6.2 Strategic focus of the Sava Insurance Group
The strategy of the Sava Insurance Group sets out strategic goals in two ways, based on its three key focus areas in the 2023–2027 strategy period and based on the Group’s key pillars of business operations.
Key Group pillars:
For the 2023–2027 period, the Group has adopted a strategy that will drive the Group forward on three key priorities:
•The Group will take the customer-at-the-centre approach to the next level by always ensuring that customers, their wishes and their needs are central to the way business is done. To this end, the Group has set itself three objectives. The first objective is customer-oriented communication, which is achieved by integrating all communication channels through a centralised customer relationship management system. The second objective is to establish a hybrid sales model that will allow the sales network to focus on more complex types of insurance and on advising customers. The third objective is to set up self-care platforms, such as customer portals, websites, and mobile applications, which will improve customer service during sales, claims handling and other services.
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•The Group has two key objectives in optimising its business processes: to speed up and simplify customer service and internal processes. This will also help achieve cost efficiency, which will play a more important role in the next strategy period than in the past, given the changed macroeconomic environment. To achieve this strategic priority, the Group will undertake a comprehensive review of its processes to identify opportunities for improvement. Processes will then be redesigned, and any other necessary changes will be made to align the organisation with these new processes.
•The Group will pursue sustainability in all key areas: environmental, social and governance. It will continue to support global sustainability trends and focus on goals related to climate change and caring for the health and well-being of its customers, employees and the wider community.
Long-term strategic targets:
•Over a five-year period, we will achieve a return on equity (excluding the fair value reserve) of between 9.5% and 10.5%.
•Over the 2023–2027 period, the solvency ratio at the Sava Insurance Group level will be between 170% and 210% (within the optimal capitalisation range).
•Non-life (re)insurance operations will achieve an underwriting combined ratio not exceeding 95%.
•The return on the Group’s investment portfolio, net of subordinated debt expenses, will increase to reach 2.2% in 2027.
6.3 Business plan of the Sava Insurance Group for 2024
The Sava Insurance Group has set the following financial targets for 2024.
Major targets for 2024
2024 plan
Business volume*
> EUR 925 million
Business volume growth*
> 5%
Return on equity
> 10.5%
Profit, net of tax
> EUR 70 million
Solvency ratio
170%–210%
Combined ratio
< 95%
Return on investment portfolio
2.2%
* Gross premiums written are taken into account for (re)insurance companies and operating revenue for non-insurance companies.
Planned growth in business volume for 2024
2024 plan
Non-life, EU
> 6%
Life, EU
> 2%
Reinsurance
> 1%
Non-life, non-EU
> 8%
Life, non-EU
> 10%
Asset management
> 5%
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6.4 Goals achieved in 2023 24
6.4.1 Targets achieved in 2023
Planned profit achieved
Achievement of targets in 2023
EUR million
2023
2023 plan
As % of plan
Business volume
910.1
> 800
113.8%
Business volume growth
14.4%
> 4%
✓
Return on equity
10.8%
> 9.5%
✓
Profit, net of tax
64.7
> 53
22.1%
Solvency ratio
188%–194%
170%–210%
✓
Combined ratio
93.1%
< 95%
✓
Return on investment portfolio
2.1%
> 1.5%
✓
The Sava Insurance Group achieved all its financial targets in 2023. It increased its business volume to EUR 910.1 million, 13.8% ahead of plan. All operating segments exceeded their targets. The net profit was EUR 64.7 million, which translates into an above-target return on equity. The combined ratio deteriorated compared to last year due to the summer storms in Slovenia and other markets in which the Group operates, but it remained within the target range. The Group’s active management of its investment portfolio also resulted in a return well above the lower end of the target range. The reinsurance segment and the net investment result were the main contributors to the above-target performance.
6.4.2 Achievement of strategic targets
Goals achieved in the Group’s strategic focus areas
Customer at the centre
The main customer-centricity activities focused on consolidating customer support processes in call centres and introducing multichannel solutions in several companies of the Sava Insurance Group, with an emphasis on managing processes involving a large number of organisational units and additional interconnected communication channels.
We enhanced our digital and self-service solutions for customers, especially those dedicated to online sales, and optimised the user experience.
We launched a technology- and design-focused transformation of Zavarovalnica Sava’s website on a target digital customer experience management platform, making possible a simplified roll-out of this solution to other Group companies.
At Zavarovalnica Sava, we implemented a solution to automate digital communication and used it to launch additional e-communication campaigns, increasing the share of electronic communication to 13.2%.
Process optimisation
By optimising business processes and, at the same time, planning the IT solutions on which business processes are implemented, we have standardised internal procedures for preparing functional specifications, adapted the way we manage change, and implemented activities to improve our
24 GRI 3-3, 201-01.
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employees’ skills required for better-quality process optimisation (full-day workshops, individual training, mentoring and presentations at internal conferences).
The most visible optimisations were implemented in automated claims reporting, the procurement process, automated mass task allocation and extended internal use of the electronic central population register (eCRP of Slovenia).
For the changeover of the core business system in the Slovenian insurance segment, we continued the inventory and simultaneous changes of processes related to product configuration, sales, register of persons, investment accounts, reinsurance, commissions, receipt and control of quotes, bookkeeping and claims.
Sustainable development
We have further enhanced the sustainability of the Group’s business in line with our sustainable development strategy. We pay particular attention to reducing the carbon intensity of our operations – through investments in energy efficiency and the digitalisation of processes. By increasing the share of ESG investments in our portfolio and responsible (re)insurance underwriting, we are also bringing sustainability into the value chain and focusing on sustainable elements in our range of products. We support global sustainability trends and focus on goals related to climate change and caring for the health and well-being of our customers, employees and the wider community.
Achievement of strategic goals by key business pillar
Non-life insurance
In the financial year 2023, we continued to successfully pursue the product development and upgrading planned for the strategy period. In terms of products with a strong sustainability component, we expanded our micromobility and solar power products to the non-EU markets while responding to additional market requirements by modifying some of our products (personal accident, health and assistance insurance). At the Group level, we further strengthened our cooperation with banks, launched credit protection insurance to cover borrowers in the event of their inability to repay a loan due to accidental death, loss of employment, illness and similar risks, and successfully prepared the technical basis for redesigning non-life policies for micro, small and medium-sized companies. We successfully addressed the challenges associated with the development of claims inflation, and we began to work more broadly on changes and adjustments to non-life underwriting rules in light of the emerging reality of increasingly extreme climate change. We responded in good time to the increased reporting standards associated with the EU Taxonomy on sustainability and, following the successful acquisition of ASP.ins, prepared a more concrete roadmap for the development of software solutions for 2024.
Life insurance and pensions
In the life and pensions segment, in the past year the Group focused on accelerating the increase in the number of policyholders covered by the life risk insurance ecosystem, which provides customers with pay-as-you-live life insurance while giving them access to a wide range of benefits and services from selected contractual partners. We paid particular attention to developing and enhancing a wide range of additional coverages for health risks, such as critical illness treatment abroad and access to a second opinion, and we further expanded our range of products with new critical illness cover packages. The existing group accident and health insurance packages were redesigned, the unit-linked life insurance products were adapted to the new accounting standards, the selection of bancassurance products was expanded, cooperation was strengthened and new banking partners were gained. In addition, cooperation between the North Macedonian pension company and the new banking partner was established. In process development, the underwriting process in the non-EU markets was
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overhauled, while in the domestic market the product development and management control processes were upgraded in line with the requirements of the Insurance Distribution Directive.
Reinsurance
One of the key strategic focus areas is the appropriate diversification of the reinsurance portfolio, geographically, within individual markets, by classes of insurance and form of reinsurance cover. Sava Re systematically followed this approach when renewing its contracts in 2023. Developments in 2023 remained strongly linked to the geopolitical and macroeconomic picture of the global economy: the situation in the Middle East (Israel and Gaza), the war in Ukraine and the related volatility in global energy markets. The situation was further exacerbated by more severe natural catastrophes (storms, floods, fires, etc.) and other loss events, which led the reinsurance industry to further tighten reinsurance conditions, in terms of both pricing and content (stricter conditions in reinsurance contracts). The main focus was on portfolio restructuring by form of reinsurance, with a shift from proportional business to non-proportional business, thereby achieving a more appropriate portfolio diversification. There was also a strong strategic focus on a more appropriate geographic diversification, where Sava Re made some significant changes. We reduced concentrations in individual major markets, sought opportunities in markets where Sava Re did not have a strong presence and reduced exposures on individual treaties. This trend is expected to continue in 2024, and, with the measures already introduced and implemented, Sava Re will achieve a better-balanced reinsurance portfolio, in line with the key strategic focus of achieving the required profitability and low volatility of the portfolio.
Asset management
Sava Infond continued to digitalise its business in 2023, maintaining its position in key sales channels and recording positive net inflows into its fund of funds.
Assistance services
In 2023, TBS Team 24 achieved record performance and outstanding operating results. The company efficiently introduced the automatic transfer of case data to non-EU companies and, in cooperation with Zavarovalnica Sava, set up digital reporting of assistance cases. This innovation is key to achieving the company’s goal of becoming a digitally focused assistance company.
During the year, TBS Team 24 also expanded its services with the introduction of e-Call services in partnership with some of the world’s leading car manufacturers. Together with our partners and our continued investment in digital technologies, the company remains committed to achieving high quality and customer satisfaction standards.
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7 Business environment
Global economic developments 25
Despite a moderation, high inflation, stagnant euro area economic activity and persistent geopolitical tensions remained at the forefront of 2023. The euro area has been stagnating since the third quarter of 2022, and this is projected to continue until mid-2024. The slowdown is the result of several factors, including tight monetary policy and lower savings surpluses, as well as external factors, such as the general weakness of the global industrial cycle and the energy shock in the region. The expected level of gross domestic product (GDP) is below the pre-pandemic trend and business sentiment in Europe is weaker, with some of the negative sentiment stemming from a deterioration in the economic outlook for Germany.
Inflation in euro area countries was set to fall from a peak of 10.6% in 2023 to 2.9% at year end. The decline in inflation rates in the euro area and elsewhere in the developed world was mainly due to central banks’ restrictive monetary policies. Although inflation is not yet at the European Central Bank’s target level, the declining trend in inflation suggests that no further rate hikes are expected, and the market is already pricing in an interest rate cut in 2024. Similar to the euro area, inflation in the US fell from a peak of 9.1% to 3.4% in December 2023. In addition to high inflation, risks to future economic growth include a possible slowdown in the Chinese economy and geopolitical tensions, notably Russia’s ongoing military aggression against Ukraine and the war in the Middle East.
A positive factor for future economic growth is the robustness of the US economy, which grew by 3.3% in the fourth quarter despite high interest rate hikes, with consumer spending (as a result of savings during the pandemic) and ample fiscal support being the key drivers of growth. US households and businesses are in a strong financial position, so the likelihood of more serious financial problems is diminished.
The year 2023 was better than expected in terms of returns at year-end 2022. Both shares and bonds closed in positive territory. The European STOXX 600 Index rose by 12.7%, the US S&P 500 Index by 20.3%, and the MSCI ACWI Global Equity Index by 16.3% for the year, all in euro terms. European and US government bond yields also fell in 2023, contributing to the positive performance of government bond indices. As interest rates normalise, the starting point for expected returns on shares and bonds will be historical averages. Higher yields made bonds an attractive asset class again, especially compared with domestic bank deposits, where yields are still very low.
25 Source: Eurostat, U.S. Bureau of Labor Statistics in Bloomberg 2023, data for the period from 30 December 2022 to 29 December 2023.
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Economic developments in markets in which the Sava Insurance Group operates
Markets in the region were affected by the same factors as mentioned above. In all markets, economic growth continued in 2023 and inflation, while still high, eased slightly compared to the previous year. In most markets, economic growth in 2024 is estimated to be similar to or slightly higher than in 2023, and average inflation growth rates are expected to moderate.
Overview of the main macroeconomic indicators for the countries in which the Sava Insurance Group operates 26
GDP
Average rate of inflation
Unemployment rate
(real growth in %)
(%)
(%)
2020
2021
2022
E2023
P2024
2020
2021
2022
E2023
P2024
2020
2021
2022
E2023
P2024
Slovenia
-4.2%
8.2%
2.5%
1.6%
2.8%
-0.1%
1.9%
8.8%
7.6%
3.9%
5.0%
4.7%
4.0%
3.6%
3.5%
Croatia
-8.5%
13.1%
6.2%
2.7%
2.6%
0.0%
2.7%
10.7%
8.6%
4.2%
9.0%
8.1%
6.8%
6.3%
5.9%
Serbia
-0.9%
7.6%
2.3%
2.0%
3.0%
1.6%
4.1%
12.0%
12.4%
5.3%
9.7%
11.0%
9.4%
9.1%
9.0%
North Macedonia
-4.7%
3.9%
2.1%
2.5%
3.2%
1.2%
3.2%
14.2%
10.0%
4.3%
16.4%
15.4%
14.4%
14.3%
14.1%
Kosovo
-5.3%
10.7%
3.5%
3.8%
4.0%
0.2%
3.3%
11.7%
4.7%
3.1%
26.0%
20.8%
n/a
n/a
n/a
Montenegro
-15.3%
13.0%
6.1%
4.5%
3.7%
-0.2%
2.4%
13.1%
8.3%
4.3%
17.9%
16.6%
14.7%
n/a
n/a
Impact of the business environment on the operations of the Sava Insurance Group
After 2022, the impact of claims inflation on the Group’s business in 2022 increased as the inflation rate rose sharply, and the Group’s insurers responded by increasing their premium rates, reducing the impact of claims inflation on the Group’s business in 2023. Continued high inflation increased the expenses of Group companies.
In the summer, Slovenia and some other countries in which the Group operates were hit by a wave of storms and floods that caused significant damage to property. The gross claims resulting from these events totalled EUR 88.3 million in 2023 and, taking into account our reinsurance protection, the impact of these events on the Group’s result was EUR 27.4 million. The largest impact on the financial performance was reported by Zavarovalnica Sava (EUR 26.4 million).
The finance result of insurance companies and the performance of pension and asset management companies benefited from favourable developments in the financial markets, which increased interest income, assets under management and fund inflows.
Markets in which the Sava Insurance Group operates
Sava Re, the parent company of the Sava Insurance Group, transacts the reinsurance business in over 100 countries worldwide 27. The following section contains a description of the international non-life insurance market and insurance markets in which the Sava Insurance Group operates.
Global non-life reinsurance markets 28
The year 2023 saw a challenging international environment, with both the start of the Israel–Hamas war and the ongoing war in Ukraine, with the associated volatility in global energy markets. Non-life claims showed an upward trend, driven by higher replacement costs compared to the pre-pandemic period. While the pressure on the cost of construction materials generally eased during the year, higher salary and financing costs came to the fore as a result of increased inflation rates in the international environment and restrictive monetary policies by central banks. At the same time, insured losses from natural catastrophes have been on the rise, exceeding USD 100 billion in 2023 for the fourth consecutive year, with climate change and intensive urbanisation in exposed areas cited as key factors in the increased frequency and magnitude. Challenging market conditions have led to a
26 Source: IMAD, Economic Mirror, No. 1/2024, International Monetary Fund, World Economic Outlook, October 2023, www.statista.com.
27 GRI 2-6.
28 Source: Sigma, Nos. 6/2023 and 3/2023, https://www.swissre.com/institute/research/sigma-research.html.
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sharp increase in non-life reinsurance prices in 2023, and the global outlook is for continued but less pronounced price increases in the future. Increased geopolitical and macroeconomic instability weakens growth prospects but reinforces the key role of insurance in risk transfer. In this context, the closing of the insurance gap, price increases and higher investment returns in a higher interest rate environment are positive factors that improve expected profitability.
Insurance markets
All insurance markets in which Sava Insurance Group operates grew in 2023, and most of the Group’s insurers maintained or increased their market shares compared to 2022.
Overview of the main indicators of the trends in the insurance markets in which the Sava Insurance Group operates
Growth/decline in premiums
Premiums per capita
Premiums as % of GDP
(%)
(EUR)
(%)
2020
2021
2022
2023
2020
2021
2022
2023
2020
2021
2022
E2023
Slovenia*29
2.0%
2.5%
7.0%
9.0%
1,208.9
1,236.4
1,320.7
1,432.3
5.4%
5.0%
4.9%
4.8%
Croatia**30
-2.3%
10.7%
8.0%
7.8%
345.1
392.8
427.8
449.1
2.7%
2.6%
2.5%
2.3%
Serbia***31
2.5%
8.7%
12.4%
16.5%
134.6
147.8
167.9
200.2
2.1%
2.0%
2.0%
1.9%
North Macedonia 32
-5.2%
15.7%
10.0%
12.3%
78.5
90.9
113.5
127.4
1.5%
1.6%
1.6%
1.6%
Kosovo 33
-0.2%
15.4%
14.2%
9.2%
56.3
65.3
75.9
82.9
1.5%
1.6%
1.5%
1.5%
Montenegro 34
-1.1%
5.5%
9.6%
10.3%
150.6
159.4
174.1
188.7
2.2%
2.0%
1.8%
1.8%
* The above premium figures exclude the premiums of the Croatian branches of Zavarovalnica Sava and Generali.
** For 2023, gross premiums written are no longer available, so premiums paid are shown. For the 2023/2022 premium growth, the premiums paid in 2022 are also taken into account for comparability. Premium figures exclude the premiums of the Austrian and Italian branches of Euroherc.
*** The 2023 estimate is based on premium growth in the first nine months of 2023.
Slovenia: in 2023, the Slovenian insurance market consisted of 12 domestic insurance companies, 6 foreign branches and 2 reinsurance companies, which are all members of the Slovenian Insurance Association (SIA). In 2023, the non-life insurance business accounted for 72.5% of total insurance premiums and life insurance for 27.5%. In 2023, gross premiums written in the Slovenian insurance market grew by 9.0% (non-life premiums by 9.6% and life premiums by 7.6%). The Sava Insurance Group operates in the market with two insurance companies, Zavarovalnica Sava and Vita. Together, the two insurers ranked second among Slovenian insurers in 2023, with a market share of 20.6%.
29 Source for premiums: Slovenian Insurance Association; source for GDP: IMAD, Economic Mirror, No. 1/2024; source for population: Statistical Office of the Republic of Slovenia.
30 Source for premiums: Croatian Insurance Bureau; source for GDP and population: 2020–2022: Croatian National Bank, 2023: International Monetary Fund.
31 Source for premiums: National Bank of Serbia; source for GDP and population: Statistical Office of the Republic of Serbia; GDP 2023: International Monetary Fund.
32 Source for premiums: Insurance Supervision Agency, North Macedonia; source for GDP 2020–2022: National Bank of the Republic of North Macedonia; source for GDP 2023: International Monetary Fund; source for population: State Statistical Office, North Macedonia.
33 Source for premiums: Central Bank of the Republic of Kosovo; source for GDP 2020–2022 and population: Kosovo Agency of Statistics; GDP 2023: International Monetary Fund.
34 Source for premiums: Insurance Supervision Agency, Montenegro; source for GDP 2020–2022 and population: Statistical Office, Montenegro; GDP 2023: International Monetary Fund.
67
* Premium figures exclude the premiums of the Croatian branches of Zavarovalnica Sava and Generali.
Two reinsurance companies are domiciled in Slovenia and are members of the Slovenian Insurance Association. The following table shows the market shares of the two reinsurance companies in the Slovenian market.
EUR
2023
2022
Gross premiums written
Market share
Gross premiums written
Market share
Sava Re
215,914,974
40.3%
199,405,329
44.3%
Triglav Re
319,389,312
59.7%
250,292,376
55.7%
Total
535,304,286
100.0%
449,697,705
100.0%
Croatia: at the end of 2023, the Croatian insurance market consisted of 14 domestic insurers and 2 foreign branches. In 2023, the non-life insurance business accounted for 81.2% of total insurance premiums and life insurance for 18.8%. In 2023, premiums paid (data on gross premiums written are no longer collected by the insurance bureau as of 2023) in the Croatian insurance market grew by 7.8% (non-life premiums grew by 14.6% and life premiums fell by 14.2%). The Sava Insurance Group operates on the market through a branch of Zavarovalnica Sava, which sells non-life and life insurance in Croatia. In 2023, it ranked 13th among all companies operating in the Croatian insurance market, with a market share of 1.1%.
* For 2023, gross premiums written are no longer available, so premiums paid are shown. Premium figures exclude the premiums of the Austrian and Italian branches of Euroherc.
Serbia: the Serbian insurance market in 2023 consisted of 16 insurance companies. The non-life insurance business accounted for 81.5% of total insurance premiums in the first nine months of 2023 and life insurance for 18.5%. In the first nine months of 2023, gross premiums written in the Serbian insurance market grew by 16.5% (non-life premiums by 19.3% and life premiums by 6.3%). The Sava Insurance Group is present on the market with the non-life insurance company Sava Neživotno Osiguranje (SRB) and the life insurance company Sava Životno Osiguranje (SRB). Together, the two insurers ranked 10th among all insurers on the market in the first nine months of 2023, with a market share of 3.6%.
68
North Macedonia: the North Macedonian insurance market in 2023 consisted of 17 insurance companies. In 2023, the non-life insurance business accounted for 82.7% of total insurance premiums and life insurance for 17.3%. In 2023, gross premiums in the North Macedonian insurance market grew by 12.3% (non-life premiums by 12.9% and life premiums by 9.4%). The Sava Insurance Group is present on the market with its non-life insurance company, which ranked sixth among all insurers on the market in 2023, with a market share of 8.8%.
Montenegro: the Montenegrin insurance market in 2023 consisted of 9 insurance companies. In 2023, the non-life insurance business accounted for 80.2% of total insurance premiums and life insurance for 19.8%. In 2023, gross premiums written in the Montenegrin insurance market grew by 10.3% (non-life premiums by 10.3% and life premiums by 10.5%). The Sava Insurance Group is present on the market with the non-life insurance company Sava Osiguranje (MNE), which ranked second among all insurers on the market in 2023, with a market share of 17.3%.
Kosovo: in 2023, the Kosovo insurance market consisted of 14 insurance companies. In 2023, the non-life insurance business accounted for 95.5% of total insurance premiums and life insurance for 4.5%. In 2023, gross premiums written in the Kosovo insurance market grew by 9.2% (non-life premiums by 9.5% and life premiums by 3.5%). The Sava Insurance Group is present on the market with the non-life insurance company Illyria (RKS) and the life insurance company Illyria Life (RKS). Together, the two insurers ranked first among all insurers on the market in 2023, with a market share of 14.8%.
69
70
8 Review of operations of the Sava Insurance Group and Sava Re 35
8.1 Sava Insurance Group
8.1.1 Business volume
Business volume grew by 14.4% to EUR 910.1 million in 2023, mainly driven by growth in non-life and life gross premiums written. In non-life insurance, this growth was generated by higher prices and organic business growth, and in life insurance by strong sales of new policies and additional payments made to existing policies. Business volume increased in all segments.
EUR
2023
2022
Change
Index
Business volume
910,113,382
795,535,596
114,577,786
114.4
Business volume by segment
Gross written premiums increased by 14.3% to EUR 884.6 million in 2023.
Gross premiums written by class of business
EUR
2023
2022
Amount
Share
Amount
Share
Property
201,173,345
22.7%
190,850,080
24.7%
Land motor vehicles
192,694,694
21.8%
153,629,655
19.8%
Motor vehicle liability
166,180,679
18.8%
137,553,032
17.8%
Accident, health and assistance
89,833,560
10.2%
75,076,200
9.7%
General liability
24,729,085
2.8%
23,368,600
3.0%
Marine, suretyship and goods in transit
17,488,998
2.0%
14,817,533
1.9%
Other insurance
3,212,344
0.4%
2,832,415
0.4%
Total non-life
695,312,704
78.6%
598,127,515
77.3%
Unit-linked life
121,013,982
13.7%
109,918,305
14.2%
Traditional life
68,235,616
7.7%
66,088,471
8.5%
Total life
189,249,598
21.4%
176,006,776
22.7%
Total
884,562,302
100.0%
774,134,291
100.0%
35 A glossary of selected insurance terms and calculation methods for ratios is appended to this annual report.
71
8.1.2 Business and performance
Summary of the consolidated income statement
EUR
2023
2022
Change
Index
Insurance revenue
697,562,811
608,987,793
88,575,018
114.5
Insurance service expenses
-657,125,518
-537,510,550
-119,614,968
122.3
Claims incurred
-465,474,154
-368,309,774
-97,164,380
126.4
Operating expenses
-189,565,020
-165,031,036
-24,533,984
114.9
Onerous contracts
-2,086,344
-4,169,740
2,083,396
50.0
Insurance service result before reinsurance
40,437,293
71,477,243
-31,039,950
56.6
Reinsurance service result
43,040,469
4,596,174
38,444,295
936.4
Insurance service result
83,477,762
76,073,417
7,404,345
109.7
Net investment result
27,923,277
6,536,061
21,387,216
427.2
Net insurance finance result
-13,304,198
-9,140,857
-4,163,341
145.5
Net exchange gains
1,192,505
1,836,939
-644,434
64.9
Finance result
15,811,584
-767,857
16,579,441
-
Non-insurance revenue
25,551,080
21,404,517
4,146,563
119.4
Other expenses
-51,014,545
-44,382,684
-6,631,861
114.9
Income from investments in subsidiaries and associates
2,286,209
2,279,735
6,474
100.3
Net other operating income
3,501,264
3,894,917
-393,653
89.9
Profit before tax
79,613,353
58,502,045
21,111,308
136.1
Income tax expense
-14,956,182
-11,578,604
-3,377,578
129.2
Net profit
64,657,171
46,923,441
17,733,730
137.8
2023
2022
Change
Index
Combined ratio
93.1%
92.6%
+0.5 p.p.
-
Loss ratio
64.5%
64.4%
+0.1 p.p.
-
Expense ratio
28.6%
28.2%
+0.4 p.p.
-
Return on investment portfolio
2.1%
0.6%
+1.5 p.p.
-
Return on equity
10.8%
8.3%
+2.5 p.p.
-
Insurance service result
The insurance service result before reinsurance was EUR 31.0 million lower than in the previous year, reflecting the high volume of claims related to the summer extreme weather events. Reinsurance protection significantly mitigated the impact of these claims on the insurance service result, and the Group also significantly increased its insurance revenue, both of which contributed to a stronger insurance service result than in the previous year. It is also important to note that the insurance service result in 2022 was impacted by inflation and the resulting increase in claims incurred.
Insurance revenue grew by EUR 88.6 million, driven by premium growth, particularly in the non-life business, where it increased by EUR 72.3 million due to price increases resulting from claims inflation and due to organic growth. In the reinsurance segment, revenue was up EUR 11.2 million due to a change in its composition towards the more profitable non-proportional business. In the life segment, revenue increased by EUR 4.9 million due to growth in gross premiums and a shift in the portfolio composition towards life risk insurance products. These products have a higher share of premiums counted as insurance revenue compared to those with a savings component.
72
Insurance revenue by segment
Claims incurred increased by EUR 97.2 million in 2023. The non-life business accounted for the majority of the increase, at EUR 82.9 million, mainly due to the extreme summer weather events that affected Slovenia, Croatia and Serbia.
Claims incurred by segment
Claims incurred by class of business
EUR
2023
2022
Amount
Share
Amount
Share
Property
166,525,223
35.8%
119,448,121
32.4%
Land motor vehicles
140,695,828
30.2%
101,518,032
27.6%
Motor vehicle liability
85,356,588
18.3%
81,936,483
22.2%
Accident, health and assistance
44,048,404
9.5%
34,379,109
9.3%
General liability
6,716,482
1.4%
15,697,709
4.3%
Other insurance
4,577,072
1.0%
2,313,336
0.6%
Total non-life
447,919,597
96.2%
355,292,790
96.5%
Total life
17,554,557
3.8%
13,016,984
3.5%
Total
465,474,154
100.0%
368,309,774
100.0%
454.4
61.5
92.8
0.3
526.7
66.4
104.0
0.4
0.0
100.0
200.0
300.0
400.0
500.0
600.0
Non-life
Life
Reinsurance
Pensions and AM
2022
2023
€m
73
Operating expenses increased by EUR 24.5 million in 2023. Acquisition costs were up EUR 12.1 million due to higher sales, while administrative costs increased by EUR 12.4 million, particularly due to higher business volume and general price increases driven by inflation.
Operating expenses by segment
Expenses for onerous contracts decreased significantly (by EUR 2.1 million, or 50.0%). In 2022, the life business incurred more of these expenses as part of the portfolio moved from profitable to unprofitable following the update of mortality assumptions. However, in 2023, the trend was reversed due to the improved profitability of the non-life business.
The reinsurance service result for 2023 showed a higher surplus due to the difference in the volume of claims between the two years that triggered the reinsurance protection. In 2023, the amounts recovered from reinsurance were significantly higher than in the previous year because of the severe summer weather events.
Finance result and investment return
EUR
2023
2022
Change
Index
Net investment result
27,923,277
6,536,061
21,387,216
427.2
Net insurance finance result
-13,304,198
-9,140,857
-4,163,341
145.5
Net exchange gains
1,192,505
1,836,939
-644,434
64.9
Finance result
15,811,584
-767,857
16,579,441
-
2023
2022
Change
Index
Return on investment portfolio
2.1%
0.6%
+1.5 p.p.
-
The net investment result was EUR 27.9 million, up EUR 21.4 million from the previous year. Consequently, the return on the investment portfolio was also higher, at 2.1%. The result improved mainly due to higher interest income from investing at higher interest rates and the net increase in the fair value of FVTPL investments.
74
Income and expenses relating to investment portfolio
EUR
2023
2022
Change
Interest income at effective interest rate
20,603,022
15,437,863
5,165,159
Change in fair value of FVTPL assets
9,487,368
10,274,947
-787,579
Gains on disposal of FVTPL assets
138,529
362,779
-224,250
Gains on disposal of other IFRS asset categories
67,299
1,307,558
-1,240,259
Income from dividends and shares – other investments
1,090,425
1,312,273
-221,848
Movement in expected credit losses (ECL)
1,028,500
1,356,121
-327,621
Other income
4,637,235
4,840,772
-203,537
Income relating to investment portfolio
37,052,378
34,892,313
2,160,065
Change in fair value of FVTPL assets
6,526,739
22,054,962
-15,528,223
Losses on disposal of FVTPL assets
164,670
358,481
-193,811
Losses on disposal of other IFRS asset categories
880,674
1,715,175
-834,501
Impairment losses on other investments
216
0
216
Movement in expected credit losses (ECL)
738,818
1,027,660
-288,842
Other expenses
817,984
3,199,974
-2,381,990
Expenses relating to investment portfolio
9,129,101
28,356,252
-19,227,151
Net investment result
27,923,277
6,536,061
21,387,216
Net income and expenses from subsidiaries and associates
2,286,209
2,279,735
6,474
Net investment income relating to the investment portfolio
30,209,486
8,815,796
21,393,690
Return on investment portfolio
2.1%
0.6%
1.5 p.p.
The net insurance finance result decreased by EUR 4.2 million due to higher discount rates, which reflect the increase in market interest rates.
Net other operating expenses
Non-insurance revenue increased by EUR 4.1 million to EUR 25.6 million. The major part of this revenue originated from asset management (EUR 19.6 million), where revenue increased by EUR 1.6 million due to more assets under management in pension funds and in funds of a mutual fund management company. The remainder (EUR 6.0 million) was mainly generated by assistance services, where revenue increased by EUR 2.5 million as a result of a higher volume of assistance cases and inflation-adjusted price increases.
Other operating expenses amounted to EUR 51.0 million, up EUR 6.6 million. These expenses included non-attributable expenses (EUR 29.4 million) and expenses of non-insurance companies (EUR 21.6 million). The rise in personnel costs, an increase in the volume of assistance cases due to higher claims volume and inflation, and increased IT service costs were the main reasons for this.
Net profit
Net profit increased by EUR 21.1 million to EUR 79.6 million in 2023. This increase was primarily due to the improved finance result driven by favourable financial markets and partly due to the insurance service result explained earlier. All operating segments ended 2023 with higher profits before tax than in 2022. In absolute terms, the non-life business saw the largest increase, up EUR 10.1 million, followed by the life business, which improved by EUR 5.7 million, the reinsurance business by EUR 2.3 million, pensions and assets under management by EUR 2.6 million and the “other” segment by EUR 0.3 million.
75
Composition of profit or loss before tax
Composition of profit or loss before tax by segment
In line with growth in profit before tax, the net profit also increased by EUR 17.7 million. As a result, the return on equity was higher, at 10.8%.
Combined ratio
2023
2022
Change
Combined ratio
93.1%
92.6%
+0.5 p.p.
Loss ratio
64.6%
64.4%
+0.2 p.p.
Expense ratio
28.6%
28.2%
+0.4 p.p.
The combined ratio deteriorated due to both the loss and expense ratios. The level of the loss ratio was a result of an increased claims experience in the non-EU markets caused by extreme weather events during the summer, some larger claims and claims inflation, and a major loss event in the reinsurance segment in early 2023. The movement in the expense ratio was primarily attributable to the extraordinary income in 2022. Without factoring this in, the expense ratio for 2022 would have been 28.5%.
76
8.1.2.1 Non-life segment
+19.9%Gross premiums written
+48.1%Profit before tax
EUR
2023
2022
Change
Index
Gross premiums written
572,614,385
477,626,640
94,987,745
119.9
EU
474,543,582
397,063,411
77,480,171
119.5
Non-EU
98,070,803
80,563,229
17,507,574
121.7
Insurance service result
39,492,006
33,769,867
5,722,140
116.9
EU
32,526,322
27,765,359
4,760,963
117.1
Non-EU
6,965,685
6,004,508
961,176
116.0
Finance result
7,192,077
40,659
7,151,418
-
EU
4,735,833
-1,521,324
6,257,157
-
Non-EU
2,456,244
1,561,983
894,261
157.3
Net other operating income/expenses
-15,568,022
-12,802,482
-2,765,540
121.6
EU
-11,934,216
-11,181,301
-752,915
106.7
Non-EU
-3,633,807
-1,621,181
-2,012,625
224.1
Profit before tax
31,112,307
21,008,044
10,104,264
148.1
EU
25,324,185
15,062,734
10,261,451
168.1
Non-EU
5,788,122
5,945,310
-157,188
97.4
Combined ratio
95.4%
95.4%
+0.0 p.p.
-
EU
95.3%
95.6%
-0.3 p.p.
-
Non-EU
96.1%
93.9%
+2.2 p.p.
-
Gross premiums written
Unconsolidated gross premiums written – non-life
EUR
2023
2022
Change
Index
Slovenia
457,932,561
381,780,244
76,152,317
119.9
Croatia
17,140,681
15,458,348
1,682,333
110.9
EU
475,073,243
397,238,592
77,834,650
119.6
Serbia
39,541,716
29,625,362
9,916,355
133.5
Montenegro
20,670,382
17,392,666
3,277,715
118.8
North Macedonia
20,451,548
17,432,536
3,019,012
117.3
Kosovo
17,436,254
16,134,131
1,302,124
108.1
Non-EU
98,099,900
80,584,694
17,515,206
121.7
Total non-life
573,173,143
477,823,287
95,349,856
120.0
Gross written premiums of the non-life segment increased by EUR 95.0 million, or 19.9%. Growth was achieved in all markets, with a 19.5% increase in the EU markets and a 21.7% increase in the non-EU markets. The motor insurance market saw the highest nominal growth across all markets, primarily due to an increase in the price of insurance services in response to the rise in the price of car repair services. In addition, this growth was driven by the acquisition of new policyholders and an upswing in the number of policies sold. In the EU markets, motor insurance experienced the strongest growth in the personal lines segment. In the non-EU markets, in addition to motor premiums, health (up 50.3%) and property (up 18.0%) insurance premiums increased significantly.
77
As a result, the share of motor insurance in the composition of gross premiums by class of business increased in 2023 compared to 2022.
Gross non-life insurance premiums by class of business
Insurance service result
EUR
2023
2022
Change
Index
Insurance revenue
526,708,126
454,382,860
72,325,266
115.9
EU
436,996,472
380,796,268
56,200,204
114.8
Non-EU
89,711,654
73,586,592
16,125,062
121.9
Insurance service expenses
-529,588,320
-425,530,465
-104,057,855
124.5
Claims incurred
-376,489,416
-293,595,276
-82,894,140
128.2
EU
-324,341,925
-255,758,019
-68,583,906
126.8
Non-EU
-52,147,491
-37,837,257
-14,310,234
137.8
Operating expenses
-150,333,728
-129,728,534
-20,605,194
115.9
EU
-118,758,015
-102,624,831
-16,133,184
115.7
Non-EU
-31,575,713
-27,103,703
-4,472,010
116.5
Onerous contracts
-2,765,176
-2,206,655
-558,521
125.3
EU
-2,856,770
-2,185,670
-671,100
130.7
Non-EU
91,594
-20,985
112,579
-436.5
Insurance service result before reinsurance
-2,880,194
28,852,395
-31,732,589
-10.0
EU
-8,960,238
20,227,748
-29,187,986
-44.3
Non-EU
6,080,044
8,624,647
-2,544,603
70.5
Reinsurance service result
42,372,200
4,917,472
37,454,729
861.7
EU
41,486,560
7,537,611
33,948,949
550.4
Non-EU
885,641
-2,620,139
3,505,779
-33.8
Insurance service result
39,492,006
33,769,867
5,722,140
116.9
EU
32,526,322
27,765,359
4,760,963
117.1
Non-EU
6,965,685
6,004,508
961,176
116.0
The insurance service result before reinsurance was EUR 31.7 million lower than in the previous year due to claims events related to summer storms and floods. Reinsurance protection significantly reduced the impact of these large claims on the insurance service result. This result was EUR 5.7 million higher compared to the figure from the previous year. The main reason for this was the increase in insurance revenue, which rose by EUR 72.3 million as a result of growth in gross premiums described earlier. The Group’s revenue grew both in its EU markets (EUR 56.2 million) and in its non-EU markets
78
(EUR 16.1 million). It is important to note that in 2022 the insurance service result was impacted by claims inflation and the resulting increase in claims incurred.
Insurance service expenses were up EUR 104.1 million, by EUR 85.4 million in the EU markets and EUR 18.7 million in the non-EU markets. The level of claims incurred was mainly affected by loss events resulting from summer storms and floods. These adverse weather events had the greatest impact on land motor vehicle insurance and property insurance. Operating expenses rose by EUR 20.6 million due to growth in the insurance portfolio, inflationary increases in labour and other costs, and an increase in the statutory fire brigade charge. Expenses for onerous contracts were up EUR 0.6 million due to deterioration in the combined ratio in the property segment resulting from the increased frequency of adverse weather events.
Furthermore, the insurance service result was impacted by an improved reinsurance service result. The volume of claims reinsured in 2023 was significantly higher than in the previous year due to summer storms and floods.
Finance result and investment return
EUR
2023
2022
Change
Index
Net investment result
10,976,899
1,400,265
9,576,634
783.9
EU
7,882,690
-562,285
8,444,975
-1,401.9
Non-EU
3,094,209
1,962,550
1,131,659
157.7
Net insurance finance result
-3,699,927
-1,309,186
-2,390,740
282.6
EU
-3,070,764
-930,698
-2,140,067
329.9
Non-EU
-629,162
-378,489
-250,674
166.2
Net exchange losses
-88,650
-50,420
-38,230
175.8
EU
-79,847
-28,341
-51,506
281.7
Non-EU
-8,803
-22,079
13,276
39.9
Finance result
7,188,323
40,659
7,147,664
17,679.7
EU
4,732,079
-1,521,324
6,253,403
-311.1
Non-EU
2,456,244
1,561,983
894,261
157.3
2023
2022
Change
Index
Return on investment portfolio
1.8%
0.2%
+1.6 p.p.
-
EU
1.5%
-0.1%
+1.6 p.p.
-
Non-EU
3.4%
2.3%
+1.1 p.p.
-
The finance result was up EUR 7.1 million due to an improved net investment result. The latter increased by EUR 9.6 million year on year due to the more favourable conditions in financial markets. In 2022, the result was impacted by negative revaluation of equity securities at fair value through profit or loss, whereas in 2023 these securities had a positive impact, mainly due to higher interest income. The net insurance finance result decreased by EUR 2.4 million due to higher discount rates on insurance contracts resulting from the increase in market interest rates. The return on the investment portfolio improved by 1.6 percentage points to 1.8%.
Net other operating expenses
Net other operating expenses mainly comprise non-attributable operating expenses and income not related to the insurance business. In 2023, these net expenses increased by EUR 2.8 million. The majority of the increase in the non-EU markets, which totalled EUR 2.0 million, was attributable to a one-time event that occurred in 2022 with one of the insurers. At that time, the Group received a one-off income as a result of a court case related to a previous major accident that was settled in the insurer’s favour. The remaining EUR 0.8 million mainly relates to higher non-attributable expenses.
79
Profit before tax
Profit before tax increased by EUR 10.1 million to EUR 31.1 million in 2023. As previously stated, the increase was primarily due to the improved finance and insurance service results.
Combined ratio
2023
2022
Change
Combined ratio
95.4%
95.4%
+0.0 p.p.
EU
95.3%
95.6%
-0.3 p.p.
Non-EU
96.1%
93.9%
+2.2 p.p.
Loss ratio
64.0%
64.0%
-0.0 p.p.
EU
65.4%
65.8%
-0.4 p.p.
Non-EU
57.0%
55.0%
+2.0 p.p.
Expense ratio
31.5%
31.3%
+0.2 p.p.
EU
29.9%
29.9%
+0.0 p.p.
Non-EU
39.1%
38.9%
+0.2 p.p.
The combined ratio remained at the same level as last year, at 95.4%. The combined ratio improved by 0.3 percentage points in the EU markets but deteriorated by 2.2 percentage points in the non-EU markets. The improvement in the EU markets was driven by a better loss ratio resulting from higher insurance revenue and a more favourable reinsurance service result from the effective reinsurance cover of the storm and flood claims. The decline in the non-EU markets was due to a higher loss ratio caused by claims from the summer storms, some large individual claims, and increased average claims due to claims inflation. The expense ratio remained unchanged. In the non-EU markets, it outperformed in 2022 as a result of the aforementioned extraordinary income with one of the insurers. Without factoring in this one-off income, the expense ratio in the non-EU markets for 2022 would have been 40.7%.
8.1.2.2 Life segment
+38.3%Gross profit
EUR
2023
2022
Change
Index
Gross premiums written
185,767,542
172,175,270
13,592,272
107.9
EU
174,441,547
162,202,436
12,239,110
107.5
Non-EU
11,325,996
9,972,834
1,353,162
113.6
Insurance service result
20,434,704
19,487,106
947,598
104.9
EU
18,724,682
18,842,269
-117,587
99.4
Non-EU
1,710,022
644,837
1,065,185
265.2
Finance result
6,369,936
1,176,784
5,193,153
541.3
EU
5,799,629
719,483
5,080,146
806.1
Non-EU
570,307
457,300
113,007
124.7
Net other operating expenses
-6,181,819
-5,748,157
-433,662
107.5
EU
-5,669,054
-5,715,108
46,054
99.2
Non-EU
-512,766
-33,050
-479,716
1,551.5
Profit before tax
20,622,821
14,915,732
5,707,089
138.3
EU
18,855,257
13,846,644
5,008,613
136.2
Non-EU
1,767,563
1,069,088
698,476
165.3
31 December 2023
31 December 2022
Change
Index
Contractual service margin (CSM)
141,629,289
124,608,539
17,020,750
113.7
EU
132,599,225
115,335,766
17,263,459
115.0
Non-EU
9,030,064
9,272,773
-242,709
97.4
80
Gross premiums written
Unconsolidated gross premiums written – life
EUR
2023
2022
Change
Index
Slovenia
172,197,851
160,155,233
12,042,619
107.5
Croatia
2,243,695
2,047,204
196,491
109.6
EU
174,441,547
162,202,436
12,239,110
107.5
Serbia
7,062,615
5,615,038
1,447,577
125.8
Kosovo
4,263,381
4,357,796
-94,415
97.8
Non-EU
11,325,996
9,972,834
1,353,162
113.6
Total life
185,767,542
172,175,270
13,592,272
107.9
Gross written premiums of the EU-based life insurers increased by 7.5% year on year due to higher sales of both life risk and unit-linked insurance products. The non-EU life insurers managed to increase gross written premiums by a remarkable 13.6%. In addition to maintaining the existing portfolio, sales of life risk and unit-linked insurance products, which had not been sold in the previous year, also increased.
Composition of consolidated gross life insurance premiums by class of business
The rise in the share of unit-linked insurance was a result of the increased sales of unit-linked policies in Slovenia and the maturing of traditional life savings policies, which are no longer available for purchase in Slovenia.
81
Insurance service result
EUR
2023
2022
Change
Index
Insurance revenue
66,403,513
61,496,184
4,907,329
108.0
EU
59,872,919
56,462,308
3,410,611
106.0
Non-EU
6,530,594
5,033,876
1,496,718
129.7
Insurance service expenses
-45,730,102
-41,518,952
-4,211,150
110.1
Claims incurred
-17,469,137
-12,950,460
-4,518,677
134.9
EU
-15,502,210
-11,447,246
-4,054,964
135.4
Non-EU
-1,966,927
-1,503,214
-463,713
130.8
Operating expenses
-28,800,168
-26,502,721
-2,297,447
108.7
EU
-25,752,177
-23,970,652
-1,781,525
107.4
Non-EU
-3,047,991
-2,532,069
-515,922
120.4
Onerous contracts
539,203
-2,065,771
2,604,974
-26.1
EU
344,857
-1,712,015
2,056,872
-20.1
Non-EU
194,346
-353,756
548,102
-54.9
Reinsurance service result
-238,707
-490,126
251,419
48.7
Insurance service result
20,434,704
19,487,106
947,598
104.9
EU
18,724,682
18,842,269
-117,587
99.4
Non-EU
1,710,022
644,837
1,065,185
265.2
The insurance service result improved by EUR 0.9 million. In the non-EU markets, the result increased due to portfolio growth and lower-than-expected realised claims, whereas in the EU markets it decreased by EUR 0.1 million due to a higher volume of claims incurred.
Insurance revenue grew by 6.0% in the EU markets due to increased sales and a shift in premium composition towards life risk insurance products. These products have a higher share of premiums counted as insurance revenue compared to those with a savings component. The Group’s insurance revenue outside the EU increased by 29.7% due to higher sales in the Serbian market and updates to actuarial models and assumptions.
Insurance service expenses rose by 10.1%, mainly as a result of an increase in claims incurred. The latter increased due to the higher volume of business and a slight rise in claims from riders and death benefits on existing policies (e.g. accidental disability and critical illness). This was mainly due to the more favourable claims experience during the Covid-19 pandemic, but, after all restrictions were lifted, population activity increased, leading to an increase in accidents. Operating expenses also increased due to both higher acquisition costs resulting from increased sales and higher administrative costs resulting mainly from inflationary increases in personnel costs, and depreciation and amortisation costs (the start of amortisation of intangible assets related to major projects and depreciation of new premises). The rise in insurance service expenses was slightly offset by a positive change in expenses for onerous contracts of EUR 2.6 million, resulting from the improved expected profitability of the portfolio.
82
Finance result and investment return
EUR
2023
2022
Change
Index
Net investment result
10,059,429
4,460,089
5,599,340
225.5
EU
9,103,691
3,709,640
5,394,050
245.4
Non-EU
955,738
750,448
205,290
127.4
Net insurance finance result
-3,702,612
-3,242,471
-460,141
114.2
EU
-3,302,541
-2,974,900
-327,641
111.0
Non-EU
-400,071
-267,571
-132,500
149.5
Net exchange gains/losses
13,120
-40,834
53,954
-32.1
EU
-1,520
-15,257
13,737
10.0
Non-EU
14,640
-25,577
40,217
-57.2
Finance result
6,369,936
1,176,784
5,193,153
541.3
EU
5,799,629
719,483
5,080,146
806.1
Non-EU
570,307
457,300
113,007
124.7
2023
2022
Change
Index
Return on investment portfolio
2.0%
0.8%
+1.2 p.p.
-
EU
1.9%
0.7%
+1.2 p.p.
-
Non-EU
2.9%
2.4%
+0.5 p.p.
-
The finance result was up EUR 5.2 million, mainly due to the improved net investment result, which was EUR 5.6 million higher in 2023 because of more favourable conditions in financial markets. In 2022, the result was impacted by negative revaluation of equity securities at fair value through profit or loss, whereas in 2023 these securities had a positive impact, mainly due to higher interest income. The return on the investment portfolio increased to 2.0%, in line with the improved net investment result.
On the other hand, the more favourable financial market conditions had a negative impact on the net insurance finance result, which decreased by EUR 0.5 million due to the rise in discount rates.
Net other operating expenses
Net other operating expenses increased by EUR 0.4 million as a result of the updated methodology for calculating the insurance service result for the non-EU insurers in 2023. Non-attributable expenses also increased due to inflation.
Profit before tax
The increase in profit before tax of 38.3% was primarily attributable to the improved finance result in the EU markets from the previous year. Meanwhile, the increase in the non-EU markets was mainly a reflection of the improved insurance service result.
Contractual service margin
31 December 2023
31 December 2022
Change
Index
Contractual service margin (CSM)
141,629,289
124,608,539
17,020,750
113.7
EU
132,599,225
115,335,766
17,263,459
115.0
Non-EU
9,030,064
9,272,773
-242,709
97.4
The 13.7% growth in the contractual service margin was achieved through new business written, maintaining the profitability of the life insurance portfolio. The expected higher future profits were also driven by positive developments in financial markets, which boosted the value of unit-linked life insurance assets and, consequently, the future income from managing these assets. The CMS also increased due to additional single-premium payments to existing policies. The CSM on new business
83
written was EUR 23.3 million, exceeding its release to profit (EUR 17.2 million) by 35.6%, which reflects strong sales and increased profitability.
8.1.2.3 Reinsurance segment 36
+12.1%Insurance revenue
EUR
2023
2022
Change
Index
Gross premiums written
122,966,992
120,876,083
2,090,909
101.7
Insurance service result
23,442,000
22,651,373
790,626
103.5
Finance result
1,581,486
-898,616
2,480,102
-
Net other operating expenses
-2,422,611
-965,742
-1,456,869
250.9
Profit before tax
20,699,290
18,369,768
2,329,522
112.7
Combined ratio
81.6%
79.2%
+2.4 p.p.
-
31 December 2023
31 December 2022
Change
Index
Contractual service margin (CSM)
5,455,348
4,671,184
784,164
116.8
Gross premiums written
Gross written premiums grew by EUR 2.1 million, the most important being the positive shift in premium composition towards more profitable non-proportional contracts. The premiums for these contracts increased by 19.4%. This growth in gross written premiums was achieved through both rate increases in line with global reinsurance market developments and organic volume growth.
Insurance service result 37
EUR
2023
2022
Change
Index
Insurance revenue
104,029,407
92,799,955
11,229,632
112.1
Insurance service expenses
-81,494,383
-70,317,410
-11,176,973
115.9
Claims incurred
-71,430,181
-61,697,514
-9,732,667
115.8
Operating expenses
-10,318,051
-8,703,623
-1,614,428
118.5
Onerous contracts
253,849
83,727
170,122
303.2
Reinsurance service result
906,976
168,828
738,147
537.2
Insurance service result
23,442,000
22,651,373
790,626
103.5
The insurance service result improved by EUR 0.8 million due to increased insurance revenue and a more favourable reinsurance service result.
Insurance revenue increased by EUR 11.2 million as a result of improved premium composition towards non-proportional reinsurance because these premiums are recognised more quickly in revenue.
Insurance service expenses rose by EUR 11.2 million, with claims incurred accounting for EUR 9.7 million. This increase was mainly due to a major loss event earlier in the year. Operating expenses were up EUR 1.6 million, primarily due to acquisition costs and partly due to inflation.
The reinsurance service result improved by EUR 0.7 million. Revenue from reinsurance contracts held increased by EUR 3.0 million (recoverable income from a major loss event in 2023), whereas expenses for reinsurance contracts held rose by EUR 2.3 million as a result of the increased volume of reinsurance protection and higher prices.
36 Unconsolidated data are presented in more detail in section 8.2 “Sava Re”.
37 GRI 201-02.
84
Finance result and investment return
EUR
2023
2022
Change
Index
Net investment result
5,521,148
1,545,065
3,976,083
357.3
Net insurance finance result
-5,210,186
-4,386,386
-823,799
118.8
Net exchange gains
1,270,540
1,942,705
-672,165
65.4
Finance result
1,581,486
-898,616
2,480,102
-
2023
2022
Change
Index
Return on investment portfolio
2.1%
0.6%
+1.5 p.p.
-
The finance result improved as a result of a stronger net investment result, which increased by EUR 4.0 million in 2023 due to higher interest income (reinvestment at higher interest rates) and positive revaluation of equity investments at fair value through profit or loss. As a result, the return on the investment portfolio was also higher, at 2.1%.
The net insurance finance result was lower in 2023 due to higher discount rates, reflecting the changed situation in financial markets.
Net other operating expenses
Net other operating expenses rose by EUR 0.9 million, mainly driven by higher non-attributable expenses resulting from inflation and development activities.
Profit before tax
Profit before tax increased by EUR 2.3 million as a result of the improved insurance service and net investment results.
Combined ratio
2023
2022
Change
Combined ratio
81.6%
79.2%
+2.4 p.p.
Loss ratio
67.5%
66.2%
+1.3 p.p.
Expense ratio
14.1%
13.0%
+1.1 p.p.
The combined ratio remained at a very favourable level but increased due to both the loss ratio (impacted by a major loss event at the beginning of the year) and the expense ratio (impacted by higher acquisition and other operating expenses).
Contractual service margin
As at 31 December 2023, the contractual service margin totalled EUR 5.5 million. In 2023, the CSM increased by EUR 0.8 million, or 16.8%. The newly recognised CSM was EUR 5.4 million lower than the CSM released, reflecting a higher volume of recognised non-proportional reinsurance contracts in 2023. The level of CSM was mainly positively impacted by onerous contracts that became profitable during the reporting period (EUR 1.8 million) as a result of the positive development of the proportional portfolio for the previous underwriting years.
85
8.1.2.4 Pensions and asset management segment
+9.0%Asset management revenue
EUR
2023
2022
Change
Index
Business volume
22,802,778
21,434,886
1,367,892
106.4
Asset management revenue
19,589,410
17,978,588
1,610,822
109.0
Gross premiums written (annuities)
3,213,368
3,456,298
-242,930
93.0
Insurance revenue
421,765
308,794
112,971
136.6
Claims incurred
-85,420
-66,524
-18,896
128.4
Operating expenses
-13,483,703
-11,977,899
-1,505,805
112.6
Finance result of investments and insurance contracts
674,344
-1,072,171
1,746,515
-
Net other operating income/expenses
399,810
-302,421
702,231
-132.2
Profit before tax
7,516,206
4,868,367
2,647,838
154.4
Cost-to-income ratio (CIR)
67.0%
65.2%
+1.8 p.p.
-
EUR
31 December 2023
31 December 2022
Change
Index
Assets under management
1,803,264,665
1,507,752,304
295,512,361
119.6
Business volume increased by EUR 1.4 million due to higher asset management revenue. This increase was mainly driven by management fee income, although there was also a rise in income from entry fees.
Insurance revenue was up EUR 0.1 million due to more profitable new business written and gains from exceeding guaranteed returns on annuity accounts.
Claims incurred were slightly higher, which was in line with growth in the part of the portfolio relating to annuities.
Operating expenses rose by EUR 1.5 million due to the inflationary effects, which led to higher service and personnel costs. As a result, the cost-to-income ratio, which excludes one-off income, increased by 1.8 percentage points.
The finance result improved by EUR 1.7 million due to a positive revaluation of equity investments at fair value through profit or loss of EUR 2.2 million. On the other hand, finance expenses for insurance contracts increased by EUR 0.5 million due to higher discount rates. The rate of investment return was also higher, at 2.7%.
Net other operating income/expenses improved by EUR 0.7 million as a result of the sale of a property and the release of provisions for non-achievement of guaranteed returns.
Profit before tax was up EUR 2.6 million, primarily due to higher asset management revenue and an improved investment result driven by favourable financial market conditions.
Assets under management rose by EUR 295.5 million. The main reasons for this increase were the high net inflows into the funds and the 10.2% return achieved. Assets under management increased for all companies in this segment.
86
Performance of funds under management (accumulation part; pensions and asset management segment)
EUR
2023
2022
Index
Opening balance of fund assets
1,507,752,304
1,541,670,574
97.8
Fund inflows
195,800,605
171,692,469
114.0
Fund outflows
-50,622,078
-59,758,943
84.7
Asset transfers
-15,184,025
-13,798,074
110.0
Net investment income of funds
168,060,395
-128,126,162
-
Entry and exit charges
-2,585,551
-2,397,556
107.8
Exchange differences and fair value reserve
43,015
-1,530,006
-
Closing balance of fund assets
1,803,264,665
1,507,752,304
119.6
Index in relation to period start
119.6
97.8
Funds under management at period end (accumulation part; pensions and asset management segment)
EUR
31 December 2023
31 December 2022
Sava Pokojninska
179,443,359
165,831,325.5
Sava Penzisko Društvo
995,217,064
847,491,761.5
Sava Infond
628,604,242
494,429,217.2
Total
1,803,264,665
1,507,752,304
8.1.2.5“Other” segment
+44.5%Income
EUR
2023
2022
Change
Index
Income
8,270,833
5,722,565
2,548,268
144.5
Expenses
-8,608,103
-6,382,431
-2,225,671
134.9
Profit or loss before tax
-337,270
-659,866
322,597
-
Revenue grew by EUR 2.5 million due to higher business volumes in assistance and healthcare services. In 2022, revenue also included the one-time sale of a subsidiary. Without factoring this in, revenue growth in 2023 would have been EUR 1 million higher.
Expenses were up EUR 2.2 million due to higher business volumes and inflationary pressures. Expenses of this segment in both periods also included subordinated debt expenses of EUR 2.9 million.
The loss of the segment decreased by EUR 0.3 million due to higher profits from assistance and healthcare services.
8.1.3 Financial position
The following are explanations of assets and liabilities that are relevant to the understanding of the Group’s financial position.
EUR
31 December 2023
31 December 2022
Change
Index
Equity
585,663,613
531,463,677
54,199,936
110.2
Contractual service margin (CSM)
155,307,485
136,396,088
18,911,397
113.9
Risk adjustment
90,366,848
94,005,064
-3,638,216
96.1
Investment portfolio position
1,503,282,095
1,415,231,399
88,050,696
106.2
Total assets
2,568,546,136
2,312,140,248
256,405,888
111.1
Assets under management
2,411,800,064
2,006,528,480
405,271,584
120.2
87
8.1.3.1 Equity and solvency
Equity amounted to EUR 585.7 million, up EUR 54.2 million compared to the end of 2022. The increase in the profit for 2023 and a positive change in other comprehensive income were the primary reasons for the overall increase, while the decrease was mainly due to the dividend payouts.
Thus, the Group’s estimated solvency position as at 31 December 2023 shows that the Group is well capitalised, with a solvency ratio of between 188% and 194% (31 December 2022: 183%). The Group thus has a solvency ratio well above the regulatory requirement of 100% and is well capitalised according to its internal criteria, which define an optimal solvency ratio between 170% and 210%.
8.1.3.2 Contractual service margin
The contractual service margin (CSM) is an estimate of future profits from insurance contracts that relate to future periods and have not yet been recognised in profit or loss. As at 31 December 2023, it totalled EUR 155.3 million (net of reinsurance, EUR 149.4 million). The majority of the contractual service margin (EUR 141.6 million, or 91.2% of the total CSM) arose from the life business, followed by the non-life business with EUR 6.3 million (4.1%) and the reinsurance business with EUR 5.5 million (3.5%), with the remainder attributable to the pensions business (EUR 1.9 million, or 1.2%). In 2023, the contractual service margin increased by EUR 18.9 million, or 13.9%. In the life business, the increase was EUR 17.0 million, or 13.7%. The newly written contracts had a slightly higher contractual service margin than the amount released to profit or loss (specifically, the newly recognised CSM was EUR 46.7 million, whereas the release was EUR 44.9 million). In the life segment, the newly recognised CSM exceeded the release by EUR 6.1 million, and in the reinsurance segment the newly recognised CSM was EUR 5.4 million lower than the release due to the volume of non-proportional reinsurance contracts recognised in 2023. The increase in the contractual service margin was also positively affected by the change in future cash flow assumptions of EUR 15.4 million (primarily in the life segment) due to improved financial market conditions and additional single-premium payments to existing policies. The remainder of the change related to interest and foreign exchange differences.
Movement in the contractual service margin
8.1.3.3 Risk adjustment
As at 31 December 2023, the risk adjustment was EUR 90.4 million, down EUR 3.6 million compared to the previous year. Around two-thirds of the risk adjustment (EUR 55.8 million) stems from liabilities for claims incurred, mainly in the non-life business (EUR 39.0 million), followed by reinsurance (EUR 16.3 million) and the non-life business (EUR 0.6 million). This part of the risk adjustment decreased by EUR 4.3 million, or 7.1%.
The other part of the risk adjustment (EUR 34.5 million) relates to liabilities for remaining coverage and arises from the life business (EUR 31.1 million), followed by the reinsurance (EUR 1.9 million) and
88
non-life (EUR 1.3 million) business, with the remainder attributable to pensions (EUR 0.2 million). This part of the risk adjustment increased by EUR 0.7 million, or 1.9%, due to portfolio growth.
8.1.3.4 Investment portfolio
The investment portfolio of the Sava Insurance Group is made up of financial investments, investment property, financial investments in associates and joint ventures, and cash and cash equivalents.
Investment portfolio position
EUR
31 December 2023
31 December 2022
Change
Index
Deposits and CDs
25,616,171
18,848,261
6,767,910
135.9
Government bonds
818,836,368
721,024,386
97,811,982
113.6
Corporate bonds
457,974,606
433,777,269
24,197,337
105.6
Shares
21,754,273
24,883,924
-3,129,651
87.4
Mutual funds
18,564,549
22,157,732
-3,593,182
83.8
Infrastructure funds
57,339,858
53,856,376
3,483,482
106.5
Real estate funds
13,888,193
16,497,061
-2,608,868
84.2
Loans granted
754,141
1,194,821
-440,680
63.1
Total financial investments
1,414,728,159
1,292,239,830
122,488,329
109.5
Financial investments in associates
23,834,619
21,856,109
1,978,510
109.1
Investment property
24,890,278
22,795,759
2,094,519
109.2
Cash and cash equivalents
39,829,039
78,339,699
-38,510,660
50.8
Total investment portfolio
1,503,282,095
1,415,231,397
88,050,699
106.2
The investment portfolio increased by EUR 88.0 million compared to year-end 2022. The major change in the value of investments was mainly in government and corporate bonds, as available funds from operations and investment maturities and disposals were invested mainly in these types of assets. The level of cash and cash equivalents decreased by almost half as cash was invested in higher-yielding assets. The value of shares and mutual funds fell slightly as a result of the disposals.
89
Composition of the investment portfolio
EUR
31 December 2023
Share as at 31 December 2023
31 December 2022
Share as at 31 December 2022
Change
in share (p.p.)
Fixed-rate financial investments
1,302,427,145
86.6%
1,173,649,916
82.9%
3.7
Infrastructure funds
57,339,858
3.8%
53,856,376
3.8%
0.0
Cash and cash equivalents
39,827,379
2.6%
78,339,699
5.5%
-2.9
Property
24,890,278
1.7%
22,795,759
1.6%
0.0
Financial investments in associates
23,834,619
1.6%
21,856,109
1.5%
0.0
Shares
21,754,273
1.4%
24,883,924
1.8%
-0.3
Mutual funds
18,564,549
1.2%
22,157,732
1.6%
-0.3
Real estate funds
13,888,193
0.9%
16,497,061
1.2%
-0.2
Loans granted
754,141
0.1%
1,194,821
0.1%
0.0
Total
1,503,280,435
100.0%
1,415,231,397
100.0%
0.0
Composition of fixed-rate investments
EUR
31 December 2023
Share as at 31 December 2023
31 December 2022
Share as at 31 December 2022
Change
in share (p.p.)
Government bonds
760,045,073
50.6%
679,225,272
48.0%
2.6
Regular corporate bonds
374,739,651
24.9%
373,372,829
26.4%
-1.5
Government-guaranteed bonds
59,038,019
3.9%
55,047,777
3.9%
0.0
Covered bonds
52,439,089
3.5%
14,476,732
1.0%
2.5
Subordinated bonds
30,549,141
2.0%
32,679,047
2.3%
-0.3
Deposits
25,616,171
1.7%
18,848,260
1.3%
0.4
Total
1,302,427,144
86.6%
1,173,649,918
82.9%
3.7
8.1.3.5 Assets under management
EUR
31 December 2023
31 December 2022
Change
Index
Assets held in pension company savings funds
1,174,660,423
1,013,323,087
161,337,336
115.9
Assets under management with a fund management company
628,604,242
494,429,217
134,175,025
127.1
Assets held for the benefit of policyholders who bear the investment risk
608,535,399
498,776,176
109,759,223
122.0
Assets under management
2,411,800,064
2,006,528,480
405,271,584
120.2
Assets under management amounted to EUR 2,411.8 million, up 20.2%. This growth was driven both by an increase in fund returns resulting from favourable developments in financial markets and by positive net inflows into all three types of funds (pension funds, funds of a mutual fund management company and unit-linked funds).
8.1.3.6 Financing sources and their maturity
As at 31 December 2023, the Sava Insurance Group held EUR 585.7 million in shareholders’ equity and EUR 75.0 million in subordinated liabilities. In October 2019, the parent company issued subordinated bonds with a scheduled maturity in 2039 and an early recall option for 7 November 2029. The bond is admitted to trading on the regulated market of the Luxembourg Stock Exchange. As at 31 December 2023, the market price of the bond was 77.717% and the market value EUR 58,702,709 (31 December 2022: the market price was 74.499% and the market value EUR 56,290,346).
90
8.1.4 Income statement by segment
Income statement by segment
EUR
Non-life, EU
Non-life, non-EU
Life, EU
Life, non-EU
Reinsurance
Pensions and asset management
Other
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Insurance revenue
436,996,472
380,796,268
89,711,654
73,586,592
59,872,919
56,462,308
6,530,594
5,033,876
104,029,407
92,799,955
421,765
308,794
0
0
697,562,811
608,987,793
Insurance service expenses
-445,956,710
-360,568,520
-83,631,610
-64,961,945
-40,909,530
-37,129,913
-4,820,572
-4,389,039
-81,494,383
-70,317,410
-312,713
-143,723
0
0
-657,125,518
-537,510,550
Claims incurred
-324,341,925
-255,758,019
-52,147,491
-37,837,257
-15,502,210
-11,447,246
-1,966,927
-1,503,214
-71,430,181
-61,697,514
-85,420
-66,524
0
0
-465,474,154
-368,309,774
Operating expenses
-118,758,015
-102,624,831
-31,575,713
-27,103,703
-25,752,177
-23,970,652
-3,047,991
-2,532,069
-10,318,051
-8,703,623
-113,073
-96,158
0
0
-189,565,020
-165,031,036
Onerous contracts
-2,856,770
-2,185,670
91,594
-20,985
344,857
-1,712,015
194,346
-353,756
253,849
83,727
-114,220
18,959
0
0
-2,086,344
-4,169,740
Insurance service result before reinsurance
-8,960,238
20,227,748
6,080,044
8,624,647
18,963,389
19,332,395
1,710,022
644,837
22,535,024
22,482,545
109,052
165,071
0
0
40,437,293
71,477,243
Reinsurance service result
41,486,560
7,537,611
885,641
-2,620,139
-238,707
-490,126
0
0
906,976
168,828
0
0
0
0
43,040,469
4,596,174
Insurance service result
32,526,322
27,765,359
6,965,685
6,004,508
18,724,682
18,842,269
1,710,022
644,837
23,442,000
22,651,373
109,052
165,071
0
0
83,477,762
76,073,417
0
0
0
0
0
0
0
0
0
0
0
0
Net investment result
7,882,690
-562,285
3,094,209
1,962,550
9,103,691
3,709,640
955,738
750,448
5,521,148
1,545,065
1,365,801
-869,358
0
0
27,923,277
6,536,061
Net insurance finance income or expenses
-3,070,764
-930,698
-629,162
-378,489
-3,302,541
-2,974,900
-400,071
-267,571
-5,210,202
-4,386,386
-691,457
-202,813
0
0
-13,304,198
-9,140,857
Net exchange gains/losses
-79,847
-28,341
-8,803
-22,079
-1,520
-15,257
14,640
-25,577
1,270,540
1,942,705
-2,505
-14,512
0
0
1,192,505
1,836,939
Finance result
4,732,079
-1,521,324
2,456,244
1,561,983
5,799,629
719,483
570,307
457,300
1,581,486
-898,616
671,839
-1,086,683
0
0
15,811,584
-767,857
0
0
0
0
0
0
0
0
0
0
0
0
Non-insurance revenue
0
0
0
3,212
0
0
0
0
0
0
19,589,410
17,978,588
5,806,493
3,422,717
25,395,903
21,404,517
Other expenses
-16,349,800
-14,842,893
-6,237,092
-5,742,288
-5,161,413
-5,092,506
-492,069
-418,355
-3,693,151
-2,908,447
-13,370,630
-11,881,741
-5,710,391
-3,496,453
-51,014,545
-44,382,684
Income from investments in subsidiaries and associates
3,754
0
0
0
0
0
0
0
0
0
0
0
2,282,455
2,279,735
2,286,209
2,279,735
Net other operating income/expenses
4,411,830
3,661,593
2,603,285
4,117,895
-507,641
-622,602
-20,696
385,306
-631,045
-474,542
516,535
-306,868
-2,715,827
-2,865,865
3,656,441
3,894,917
Profit or loss before tax
25,324,185
15,062,734
5,788,122
5,945,310
18,855,257
13,846,644
1,767,563
1,069,088
20,699,290
18,369,768
7,516,206
4,868,367
-337,270
-659,866
79,613,354
58,502,045
Income tax expense
-14,956,182
-11,578,604
Net profit or loss for the period
64,657,172
46,923,441
91
Restated income statement
The income statement, which is used for the presentation of the operating analysis in the business report, has been restated to present certain categories more clearly and to shorten the line items, as shown in the following table.
EUR
Income statement
Income statement (restated)
2023
2022
2023
2022
Revenue from insurance services
697,562,811
608,987,793
Insurance revenue
697,562,811
608,987,793
Expenses from insurance services
-657,125,518
-537,510,550
Insurance service expenses
-657,125,518
-537,510,550
Net result from insurance contracts
40,437,293
71,477,243
Insurance service result before reinsurance
40,437,293
71,477,243
Revenue from reinsurance contracts held
86,112,246
43,335,084
Expenses for reinsurance contracts held
-43,071,777
-38,738,910
Net result from reinsurance contracts held
43,040,469
4,596,174
Reinsurance service result
43,040,469
4,596,174
Result from insurance contracts
83,477,762
76,073,417
Insurance service result
83,477,762
76,073,417
Net investment result
78,424,741
-53,182,881
Net investment result
27,923,277
6,536,061
Finance result from insurance contracts
-62,000,579
52,044,359
Finance result from reinsurance contracts
-612,578
370,665
Net insurance finance result
-62,613,157
52,415,024
Net insurance finance result
-13,304,198
-9,140,857
Net exchange gains/losses
1,192,505
1,836,939
Net insurance and finance result
15,811,584
-767,857
Finance result
15,811,584
-767,857
Asset management revenue
19,589,410
17,981,800
Non-insurance revenue
25,551,080
21,404,517
Non-attributable operating expenses
-29,432,276
-26,979,168
Other expenses
-51,014,545
-44,382,684
Net impairment losses and reversals of impairment losses on non-financial assets
231,724
79,737
Finance costs
-3,114,997
-3,021,150
Share of profit or loss of investments accounted for using equity method
2,169,860
1,285,731
Income from investments in subsidiaries and associates
2,286,209
2,279,735
Net income and expenses from subsidiaries and associates
116,348
994,004
Gains or losses on disposal of discontinued operations
353,684
0
Net other operating income and expenses
-9,589,746
-7,144,469
Net other operating income/expenses
3,501,264
3,894,917
Profit before tax
79,613,353
58,502,045
Profit before tax
79,613,354
58,502,045
Income tax expense
-14,956,182
-11,578,604
Income tax expense
-14,956,182
-11,578,604
Net profit or loss for the period
64,657,171
46,923,441
Net profit or loss for the period
64,657,171
46,923,441
The following reclassifications were made:
•Exchange differences on investments and insurance liabilities are reclassified from the net investment result and net insurance finance result to net exchange gains.
•Returns on life insurance policies where policyholders bear the investment risk are reclassified from the net investment result to the net insurance finance result.
•Asset management revenue and income from other Group companies, which are included in net other operating income and expenses, are reported together as non-insurance revenue.
92
•Non-attributable expenses and operating expenses of non-insurance companies, which are included in net other operating income and expenses, are collectively reported as other expenses.
•The share of profit or loss of investments accounted for using the equity method and net income and expenses from subsidiaries and associates are combined under income from investments in subsidiaries and associates.
•Gains or losses on disposal of discontinued operations are included in net other operating income.
93
8.2 Sava Re
8.2.1 Gross premiums written
Gross written premiums increased by 8.3% to EUR 215.9 million in 2023.
Gross premiums written
EUR
2023
2022
Change
Index
Non-Group
122,966,992
120,876,083
2,090,909
101.7
Group
92,947,982
78,529,246
14,418,736
118.4
Total
215,914,974
199,405,329
16,509,645
108.3
Non-Group gross written premiums grew by EUR 2.1 million, the most important being the positive shift in premium composition towards more profitable non-proportional contracts. The premiums for these contracts increased by 19.4%. This growth in gross written premiums was achieved through both price increases in line with global reinsurance market developments and organic volume growth.
Group gross written premiums increased by EUR 14.4 million (18.4%) as a result of premium growth in the Slovenian market.
Gross premiums written by class of business
Gross premiums written by form of reinsurance
94
8.2.2 Business and performance
EUR
2023
2022
Change
Index
Insurance revenue
167,804,126
150,760,655
17,043,471
111.3
Insurance service expenses
-174,490,918
-132,523,250
-41,967,667
131.7
Claims incurred
-162,708,295
-122,849,828
-39,858,467
132.4
Operating expenses
-12,027,831
-9,991,521
-2,036,310
120.4
Onerous contracts
245,208
318,099
-72,891
77.1
Reinsurance service result
43,669,147
9,867,581
33,801,564
442.6
Insurance service result
36,982,356
28,104,988
8,877,368
131.6
Net investment result
7,827,977
1,813,210
6,014,767
431.7
Net insurance finance result
-6,815,712
-4,876,551
-1,939,161
139.8
Net exchange gains
1,293,761
1,820,272
-526,511
71.1
Finance result
2,306,026
-1,243,070
3,549,095
-185.5
Other expenses
-13,805,508
-11,803,863
-2,001,645
117.0
Income from investments in subsidiaries and associates
30,755,010
51,728,827
-20,973,817
59.5
Net other operating expenses
-2,648,673
-2,854,982
206,309
92.8
Profit or loss before tax
53,589,208
63,931,896
-10,342,688
83.8
Income tax expense
-4,114,406
-2,580,945
-1,533,461
159.4
Net profit or loss for the period
49,474,802
61,350,951
-11,876,149
80.6
2023
2022
Change
Index
Combined ratio
80.8%
84.2%
-3.4 p.p.
-
Loss ratio
70.8%
74.7%
-3.9 p.p.
-
Expense ratio
10.0%
9.5%
+0.5 p.p.
-
Investment return
2.2%
0.5%
+1.7 p.p.
-
Return on equity
11.6%
15.5%
-3.9 p.p.
-
Insurance service result
The insurance service result was up EUR 8.9 million, mainly due to the improved performance of the Group business (an increase of EUR 8.1 million). The insurance service result for the non-Group business was higher by EUR 0.8 million as a result of a more favourable performance of inward and outward business.
Insurance revenue increased by EUR 17.0 million (11.3%) due to growth in both the non-Group and Group business.
Insurance service expenses 38 rose by EUR 42.0 million, mainly as a result of an increase in claims incurred.
Claims incurred
EUR
2023
2022
Change
Index
Non-Group
71,430,180
61,697,514
9,732,666
115.8
Group
91,278,115
61,152,314
30,125,801
149.3
Total
162,708,295
122,849,828
39,858,466
132.4
Claims incurred rose by EUR 39.9 million. The higher level of claims incurred for the non-Group business were mainly the result of a major loss event at the beginning of the year, whereas for the
38 GRI 201-02.
95
Group business they were the result of summer storms in Slovenia and other countries in which the Group operates. Operating expenses increased by EUR 2.0 million in 2023, primarily due to higher acquisition costs for the non-Group business.
The reinsurance service result was stronger compared to 2022 for both the non-Group and Group business. This was the result of a different mix of claims that triggered the Group’s reinsurance protection to a greater extent and were ceded to reinsurers.
The combined ratio improved due to a more favourable loss ratio. The improved loss ratio was a reflection of the stronger ratio for the Group business. The movement in the expense ratio was mainly driven by higher acquisition and other operating expenses.
Combined, loss and expense ratios
2023
2022
Change
Combined ratio
80.8%
84.2%
-3.4 p.p.
Loss ratio
70.8%
74.7%
-3.9 p.p.
Expense ratio
10.0%
9.5%
+0.5 p.p.
Finance result and investment return
EUR
2023
2022
Change
Index
Net investment result
7,827,977
1,813,210
6,014,767
431.7
Net insurance finance result
-6,815,712
-4,876,551
-1,939,161
139.8
Net exchange gains
1,293,761
1,820,272
-526,511
71.1
Finance result
2,306,026
-1,243,070
3,549,096
-
The finance result improved on the back of a stronger net investment result.
The net investment result increased by EUR 6.0 million compared to 2022 due to higher interest income (reinvestment at better interest rates) and positive revaluation of equity investments at fair value through profit or loss. The return on the investment portfolio was 5.6%.
Investment return and net investment income relating to the Sava Re investment portfolio
EUR
2023
2022
Change
Index
Income from financial investments
11,074,476
10,444,556
629,919
106.0
Expenses for financial investments
3,246,499
8,631,346
-5,384,848
37.6
Net investment result
7,827,977
1,813,210
6,014,767
431.7
Net income and expenses from subsidiaries and associates
30,755,010
51,728,827
-20,973,817
59.5
Net investment income relating to the investment portfolio
38,582,987
53,542,037
-14,959,050
72.1
2023
2022
Change
Index
Investment return
2.2%
0.5%
+1.7 p.p.
-
Return on investment portfolio
5.6%
7.8%
-2.2 p.p.
-
96
Income, expenses, and net investment income relating to the Sava Re investment portfolio
EUR
2023
2022
Change
Interest income at effective interest rate
4,735,050
2,688,043
2,047,007
Gain on change in fair value of FVTPL assets
3,903,887
4,129,770
-225,883
Gains on disposal of FVTPL assets
9,388
77,683
-68,295
Gains on disposal of other IFRS asset categories
12,456
1,163,032
-1,150,576
Income from dividends and shares – other investments
217,967
458,074
-240,108
Movement in expected credit losses (ECL)
89,921
153,926
-64,006
Other income
1,097,797
1,120,444
-22,648
Other income from alternative funds
1,008,011
653,583
354,428
Total income from the investment portfolio
11,074,475
10,444,556
629,919
Loss on change in fair value of FVTPL assets
2,692,105
7,232,854
-4,540,749
Losses on disposal of FVTPL assets
158,893
69,230
89,663
Losses on disposal of other IFRS asset categories
132,904
965,345
-832,441
Movement in expected credit losses (ECL)
35,495
132,103
-96,608
Other expenses
227,101
231,814
-4,713
Total expenses for the investment portfolio
3,246,498
8,631,346
-5,384,848
Net investment result
7,827,977
1,813,210
6,014,767
Net income and expenses from subsidiaries and associates
30,755,010
51,728,827
-20,973,817
Net investment income relating to the investment portfolio
38,582,988
53,542,037
-14,959,049
Return on investment portfolio
5.6%
7.8%
-2.2 p.p.
The result of investments in subsidiaries and associates was EUR 30.8 million, down EUR 21.0 million compared to 2022 due to lower dividends received from subsidiaries. In 2023, there were no impairment losses on subsidiaries, whereas in 2022 an impairment loss of EUR 1.2 million was recognised in subsidiaries.
The net insurance finance result was down EUR 1.9 million as a result of higher discount rates.
Profit or loss for the period
Profit before tax decreased by EUR 10.3 million compared to 2022. Excluding dividends received from subsidiaries, the result would have been EUR 10.9 million higher. In line with the decline in profit before tax, the net profit for the period also decreased by EUR 11.9 million. As a result, the return on equity was lower, at 11.6%.
8.2.3 Financial position
The following are explanations of assets and liabilities that are relevant to the understanding of the Company’s financial position.
EUR
31 December 2023
31 December 2022
Change
Index
Equity
430,897,178
401,675,656
29,221,521
107.3
Contractual service margin (CSM)
9,521,208
8,401,764
1,119,444
113.3
Risk adjustment
30,691,156
34,695,702
-4,004,546
88.5
Investment portfolio position
699,468,206
679,014,491
20,453,715
103.0
Total assets
813,954,323
754,248,344
59,705,979
107.9
97
8.2.3.1 Equity and solvency
Equity amounted to EUR 430.9 million, up EUR 29.2 million compared to the end of 2022. The increase in the profit for 2023 and a positive change in other comprehensive income were the primary reasons for the overall increase, partly decreased by dividend payouts.
Thus, Sava Re’s audited solvency position as at 31 December 2023 shows that the Company is well capitalised, with a solvency ratio of 289% (31 December 2022: 266%). The Company thus has a solvency ratio well above the regulatory requirement of 100% and is well capitalised according to its internal criteria, which define an optimal solvency ratio above 200%.
8.2.3.2 Contractual service margin
As at 31 December 2023, the contractual service margin totalled EUR 9.5 million (net of reinsurance, EUR 5.1 million). In 2023, it increased by EUR 1.1 million, or 13.3%. The newly recognised CSM was EUR 15.7 million lower than the CSM released, reflecting a higher volume of recognised non-proportional reinsurance contracts in 2023. The increase in the contractual service margin was also positively impacted by the change in future cash flow assumptions of EUR 16.0 million.
Movement in the contractual service margin
8.2.3.3 Risk adjustment
As at 31 December 2023, the risk adjustment was EUR 30.7 million, down EUR 4.0 million compared to the previous year. The majority of the risk adjustment (EUR 26.8 million) arises from liabilities for claims incurred and decreased by EUR 4.4 million. The other part of the risk adjustment (EUR 3.9 million) relates to liabilities for remaining coverage and increased by EUR 0.4 million due to portfolio growth.
8.2.3.4 Investment portfolio
The investment portfolio is made up of financial investments in subsidiaries, financial investments in associates and joint ventures, investment property, and cash and cash equivalents.
The Sava Re investment portfolio totalled EUR 699.5 million as at 31 December 2023 (31 December 2022: EUR 679.0 million).
98
Sava Re investment portfolio by asset class
EUR
31 December 2023
31 December 2022
Change
Index
Deposits and CDs
1,021,347
0
1,021,347
-
Government bonds
229,591,819
214,198,680
15,393,139
107.2
Government bonds (excl. gvmt-guaranteed bonds)
211,054,563
198,953,856
12,100,707
106.1
Government-guaranteed bonds
18,537,256
15,244,825
3,292,432
121.6
Corporate bonds
88,089,961
73,992,930
14,097,031
119.1
Regular corporate bonds
72,416,318
66,695,422
5,720,896
108.6
Covered bonds
11,353,007
2,021,505
9,331,503
561.6
Subordinated bonds
4,320,636
5,276,003
-955,367
81.9
Shares
3,538,972
7,080,606
-3,541,633
50.0
Mutual funds
4,458,315
3,933,982
524,333
113.3
Infrastructure funds
21,084,448
18,843,871
2,240,577
111.9
Real estate funds
3,884,428
4,584,214
-699,785
84.7
Loans granted
2,714,904
1,796,693
918,212
151.1
Total financial investments
354,384,196
324,430,976
29,953,220
109.2
Investments in subsidiaries and associates
325,241,793
322,935,793
2,306,000
100.7
Investment property
7,582,168
7,721,693
-139,525
98.2
Cash and cash equivalents
12,260,049
23,926,029
-11,665,980
51.2
Total investment portfolio
699,468,206
679,014,491
20,453,715
103.0
The investment portfolio increased by EUR 20.5 million, or 3.0 percentage points, compared to year-end 2022. The major change in the value of investments was mainly in government and corporate bonds, as available funds from operations and investment maturities and disposals were invested mainly in these types of assets. The level of cash and cash equivalents decreased by almost half as cash was invested in higher-yielding assets. The value of shares and mutual funds fell slightly as a result of the disposals.
Composition of the investment portfolio
31 December 2023
31 December 2022
Change in composition in p.p.
Investments in subsidiaries and associates
46.5%
47.6%
-1.1
Fixed-rate financial investments
45.6%
42.4%
3.1
Infrastructure funds
3.0%
2.8%
0.2
Cash and cash equivalents
1.8%
3.5%
-1.8
Shares and mutual funds
1.1%
1.6%
-0.5
Property
1.1%
1.1%
-0.1
Real estate funds
0.6%
0.7%
-0.1
Other*
0.4%
0.3%
0.1
Total
100.0%
100.0%
* The “other” item includes loans granted.
The largest share of the investment portfolio at year-end 2023 were financial investments in subsidiaries and associates, which accounted for 46.5%. Fixed-rate investments followed closely behind at 45.6%. Cash decreased by 1.8 percentage points, while fixed-rate investments increased by 3.1 percentage points, mainly due to the investment of surplus cash in this asset type. Sales resulted in a slight decrease in investments in shares and mutual funds.
99
Composition of fixed-rate investments as part of the investment portfolio
EUR
31 December 2023
Share as at 31 December 2023
31 December 2022
Share as at 31 December 2022
Change in composition in p.p.
Government bonds
211,054,563
30.2%
198,953,856
29.3%
0.9
Regular corporate bonds
72,416,318
10.4%
66,695,422
9.8%
0.5
Government-guaranteed bonds
18,537,256
2.7%
15,244,825
2.2%
0.4
Covered bonds
4,320,636
0.6%
5,276,003
0.8%
-0.2
Subordinated bonds
11,353,007
1.6%
2,021,505
0.3%
1.3
Deposits and CDs
1,021,347
0.1%
0
0.0%
0.1
Total
318,703,128
45.6%
288,191,610
42.4%
3.1
There were no major changes in the composition of fixed-rate investments at the end of 2023 compared to year-end 2022.
8.2.3.5 Other investments of Sava Re in the insurance industry
As at 31 December 2023, in addition to its investments in subsidiaries, Sava Re held investments in other companies in the insurance industry.
Other investments of Sava Re in the insurance industry
Holding (%)as at 31 December 2023
Slovenia
Zavarovalnica Triglav d.d.
0.07%
EU and other international
Bosna Reosiguranje d.d., Sarajevo, Bosnia and Herzegovina
0.51%
Dunav Re a.d.o., Belgrade, Serbia
0.93%
8.2.3.6 Financing sources and their maturity
As at 31 December 2023, Sava Re held EUR 430.9 million in equity capital and EUR 75.0 million in subordinated liabilities. In October 2019, it issued subordinated bonds with a scheduled maturity date of 2039 and with an early recall option for 7 November 2029. The bond is admitted to trading on the regulated market of the Luxembourg Stock Exchange. As at 31 December 2023, the market price of the bond was 77.717% and the market value EUR 58,702,709 (31 December 2022: the market price was 74.499% and the market value EUR 56,290,346).
100
9 Human resource management 39
In the Sava Insurance Group, we are aware of our responsibility to our employees and, therefore, strive to closely follow our objectives in strategic human resource management.
Sava Insurance Group employs 3,009 people.
9.1 Strategic guidelines for human resource management 40
At the Sava Insurance Group, we have set five priorities in human resource management for the 2023–2027 strategy period:
1.Attracting and retaining the best talent: we justify the trust of our employees and take care of the image and reputation of the Sava Insurance Group in the labour market.
2.Development orientation: we ensure continuous identification and targeted development of employees’ potential.
3.Performance management: we enable the development of a high-performing culture in which successful employees are supported, rewarded, encouraged to improve and managed effectively.
4.Sustainable operations: we promote a culture based on values, with a focus on diversity, inclusion, well-being and sustainable business.
5.Digitalisation and optimisation: we adapt the organisation, processes, positions and ways of working towards the future of business.
9.2 Key activities in human resource management 41
In 2023, our human resource management focused on the following objectives and activities:
planning and implementing the communication strategy in line with the employer’s promise and image;
establishing a system for regularly monitoring employee satisfaction;
drafting a policy on human resource development and succession planning;
maintaining good climate and commitment among employees, transparent communication and good relationships with internal clients;
analysing and planning the digitalisation of human resource processes.
9.3 Employer brand development and management
Our aim is to attract and retain the best people in the Group, and to achieve this we systematically manage the external and internal image of our companies as employers.
We carefully plan and implement activities to build the external image of the Sava Insurance Group as a group of attractive employers. To this end, we worked with colleagues from Group companies in 2023 to produce and publish an employer video, update the career pages on the companies’ websites and strengthen communication through social networks, internal ambassadors, and appearances at corporate events and career fairs.
39 GRI 2-7.
40 GRI 3-3.
41 GRI 3-3.
101
The companies of the Sava Insurance Group ensure regular internal communication with their employees in a uniform manner. Some companies are also in the process of updating their internal employee portal. Different processes and communication channels allow us to ensure two-way and transparent communication between the employer and the employees. We foster a good climate and commitment among our employees through various events and benefits at the Group, company and organisational unit levels.
9.4 Recruitment and staffing levels
Recruitment is based on timely identification of needs, careful planning and the recruitment of skilled and motivated people, ensuring that they receive induction and training to enable them to integrate quickly into their workplace. We develop and train our employees in line with the needs of the Company and the Group, and strive to create a productive and motivating working environment.
The following shows the number and structure of employees in the parent company, Sava Re, and in total for the entire Sava Insurance Group, according to various criteria.
In addition to its core reinsurance business, Sava Re also manages the Sava Insurance Group. The diagram shows the organisational chart of Sava Re.
Organisational chart of Sava Re as at 31 December 2023 42
42 GRI 2-9.
102
9.4.1 Number of employees as at year end 43
Employees by Group market as at year end
* Zavarovalnica Sava and its Croatian branch are also included.
The companies of the Sava Insurance Group are present in Slovenia, Croatia, Serbia, Montenegro, North Macedonia and Kosovo.
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Number of employees as at year end
3,009
2,952
160
147
Full-time equivalent as at year end
2,744.8
2,704.3
144.1
133.3
The number of employees in Sava Re and the Sava Insurance Group increased in 2023 compared to the previous year. The changes mainly concern sales support and IT.
New staff was recruited due to increased workload, redeployment within the Group, departures and maternity leave.
Number of employees by type of employment (part-time, full-time) as at year end 44
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Type of employment
Number
Share
Number
Share
Number
Share
Number
Share
Part-time
375
12.5%
306
10.4%
29
18.1%
24
16.3%
Full-time
2,634
87.5%
2,646
89.6%
131
81.9%
123
83.7%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The majority of Sava Insurance Group employees are in full-time employment. Part-time employees included those recognised as disabled, those who exercised the right to child-care leave, agents in first employment, and employees in split employment in the Group.
43 GRI 2-7.
44 GRI 2-7.
103
Number of employees by type of contract as at year end 45
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Type of employment
Number
Share
Number
Share
Number
Share
Number
Share
Fixed-term contract
513
17.0%
485
16.4%
2
1.3%
2
1.4%
Contract of indefinite duration
2,496
83.0%
2,467
83.6%
158
98.8%
145
98.6%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The most common type of employment in the Sava Insurance Group is a contract of indefinite duration. Fixed-term contracts are most commonly used to cover the needs of employees who are absent for long periods or due to temporary increases in workload.
Employees covered by collective bargaining agreements as at year end 46
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Employees covered by the collective bargaining system
Number
Share
Number
Share
Number
Share
Number
Share
Employees covered by the collective bargaining agreement
2,865
95.2%
2,819
95.5%
137
85.6%
125
85.0%
Employees not covered by the collective bargaining agreement
144
4.8%
133
4.5%
23
14.4%
22
15.0%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The majority of employees are covered by the collective bargaining system. The members of management and senior management are outside the collective bargaining system.
Employees by level of education as at year end 47
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Level of formal education
Number
Share
Number
Share
Number
Share
Number
Share
Primary and lower secondary education
6
0.2%
7
0.2%
0
0.0%
0
0.0%
Secondary education
1,187
39.4%
1,175
39.8%
13
8.1%
13
8.8%
Higher education
302
10.0%
304
10.3%
4
2.5%
4
2.7%
University education
1,369
45.5%
1,322
44.8%
122
76.3%
110
74.8%
Master’s degree or doctorate
145
4.8%
144
4.9%
21
13.1%
20
13.6%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The structure of employees by level of education did not change significantly in 2023 compared to the previous year. At the Group level, the percentage of employees with primary education remains very low, while the percentage of employees with secondary education is mainly related to insurance sales. The majority of employees have at least a university degree.
The Group’s activity requires and relies on highly qualified staff, who are encouraged to take part in further training and participate in various formal education programmes.
45 GRI 2-7.
46 GRI 2-30.
47 GRI 2-7.
104
Employees by age group as at year end 48
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Age group
Number
Share
Number
Share
Number
Share
Number
Share
From 20 to 25
147
4.9%
140
4.7%
0
0.0%
3
2.0%
From 26 to 30
217
7.2%
202
6.8%
21
13.1%
13
8.8%
From 31 to 35
402
13.4%
382
12.9%
24
15.0%
23
15.6%
From 36 to 40
427
14.2%
427
14.5%
23
14.4%
18
12.2%
From 41 to 45
567
18.8%
568
19.2%
29
18.1%
28
19.0%
From 46 to 50
473
15.7%
454
15.4%
27
16.9%
29
19.7%
From 51 to 55
378
12.6%
390
13.2%
20
12.5%
16
10.9%
Over 56
398
13.2%
389
13.2%
16
10.0%
17
11.6%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The composition of Sava Insurance Group employees by age group in 2023 was similar to previous years.
Employees by gender as at year end 49
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Gender
Number
Share
Number
Share
Number
Share
Number
Share
Women
1,803
59.9%
1,709
57.9%
101
63.1%
93
63.3%
Men
1,206
40.1%
1,243
42.1%
59
36.9%
54
36.7%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
The composition of Sava Insurance Group employees by gender has been higher for women than for men for several years. Both women and men are represented in all business areas and at all levels of management.
The base salary of women is the same as the base salary of men in all employee categories 50.
Employees by years of service in company as at year end 51
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Years of service
Number
Share
Number
Share
Number
Share
Number
Share
From 0 to 5 years
1,352
44.9%
1,108
37.5%
90
56.3%
78
53.1%
From 6 to 10 years
517
17.2%
554
18.8%
24
15.0%
24
16.3%
From 11 to 15 years
406
13.5%
478
16.2%
22
13.8%
24
16.3%
From 16 to 20 years
359
11.9%
364
12.3%
9
5.6%
8
5.4%
From 21 to 30 years
298
9.9%
341
11.6%
12
7.5%
11
7.5%
Over 30 years
77
2.6%
107
3.6%
3
1.9%
2
1.4%
Total
3,009
100.0%
2,952
100.0%
160
100.0%
147
100.0%
In terms of years of service, most of Sava Re’s employees are in the first and second groups, which is largely due to increased recruitment in the last decade. The percentage of employees with up to 30 years of service in the company decreased compared to the previous year.
Members of management body by gender
Sava Insurance Group
Sava Re
Members of management body by gender
Number
Share
Number
Share
Number of men in management body
34
72.3%
3
75.0%
Number of women in management body
13
27.7%
1
25.0%
Total
47
100.0%
4
100%
48 GRI 2-7.
49 GRI 2-7, 405-01.
50 GRI 405-02.
51 Service in the company or Group.
105
The Sava Insurance Group employs 47 members of management. The majority, 72.3%, are men.
Employees at management levels 1 and 2 by gender
Sava Insurance Group
Sava Re
Employees by gender
Number
Share
Number
Share
Number of men at management levels 1 and 2
149
55.6%
16
59.3%
Number of women at management levels 1 and 2
119
44.4%
11
40.7%
Total
268
100.0%
27
100%
The management of Sava Re consists of four members, the chairman and three members of the management board. The Sava Insurance Group has a balanced composition of employees at management levels 1 and 2. Sava Re has a slightly lower percentage of women at management levels 1 and 2.
The management board of Sava Re, as defined in the Company’s internal regulations on work organisation and job classification, also includes three authorised representatives of the management board who are not authorised to conduct the business.
Absenteeism rate 52
Absenteeism is calculated as the number of working days lost due to absences divided by the product of the average number of employees multiplied by the average number of working days during the year. The following table shows the absenteeism rate by company in 2023 relative to 2022. The absenteeism rate in Sava Insurance Group companies remained largely the same as in the previous year.
Absenteeism rate 53
Sava Insurance Group
Sava Re
2023
2022
Difference
2023
2022
Difference
Average number of working days lost
1,361
1,504
-143
157
114
43
Average number of employees
2,988
2,926
62
154
143
11
Average number of working days per year
241
252
-11
249
260
-11
Absenteeism rate (%)
0.19%
0.20%
-0.01%
0.41%
0.31%
0.10%
Work-related injuries 54
Work-related injuries
Sava Insurance Group
Sava Re
2023
2022
Index
2023
2022
Index
Number of injuries
8
9
88.9
0
0
-
Number of working days lost
357
123
290.4
0
0
-
Number of working hours lost
2,858
639
447.3
0
0
-
The number of injuries in the Sava Insurance Group continued to be low in 2023. The number of working days and hours lost increased in 2023 compared to 2022 because employees were absent for several months due to an occupational injury.
52 GRI 403-02.
53 GRI 403-02.
54 GRI 401-2.
106
Employee turnover rate 55
Employee turnover rate
Sava Insurance Group
Sava Re
2023
2022
Difference
2023
2022
Difference
Number of employees who left
506
490
16
9
15
-6
Number of employees as at previous year end
2,952
2,903
49
147
142
5
Employee turnover rate
17.1%
16.9%
0.3%
6.1%
10.6%
-4.4%
The employee turnover rate is measured as the ratio of the number of employees who left during the year to the total number of employees as at the year end. The employee turnover rate remained roughly the same across the Group.
Overview of employee arrivals and departures by gender in current year
Sava Insurance Group
Sava Re
Arrivals
Departures
Arrivals
Departures
Gender
Number
Share
Number
Share
Number
Share
Number
Share
Women
377
67.0%
287
56.7%
12
54.5%
4
44.4%
Men
186
33.0%
219
43.3%
10
45.5%
5
55.6%
Total
563
100.0%
506
100.0%
22
100.0%
9
100.0%
The number of arrivals in the Sava Insurance Group in 2023 was higher than the number of departures. There were more women than men among the new arrivals. The gender ratio for employees who left remained similar.
Overview of employee arrivals and departures by age in current year
Sava Insurance Group
Sava Re
Arrivals
Departures
Arrivals
Departures
Age group
Number
Share
Number
Share
Number
Share
Number
Share
From 20 to 25
108
19.2%
63
12.5%
0
0.0%
0
0.0%
From 26 to 30
107
19.0%
53
10.5%
7
31.8%
0
0.0%
From 31 to 35
91
16.2%
80
15.8%
3
13.6%
1
11.1%
From 36 to 40
79
14.0%
60
11.9%
6
27.3%
0
0.0%
From 41 to 45
78
13.9%
73
14.4%
2
9.1%
1
11.1%
From 46 to 50
38
6.7%
42
8.3%
2
9.1%
3
33.3%
From 51 to 55
30
5.3%
39
7.7%
2
9.1%
2
22.2%
Over 56
32
5.7%
96
19.0%
0
0.0%
2
22.2%
Total
563
100.0%
506
100.0%
22
100.0%
9
100.0%
Parental leave 56
Employees on parental leave
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Gender
Number
Share
Number
Share
Number
Share
Number
Share
Women
81
4.5%
90
5.3%
5
5.0%
5
5.4%
Men
10
0.8%
8
0.6%
3
5.1%
3
5.6%
Total
91
3.0%
98
3.3%
8
5.0%
8
5.4%
At the Sava Insurance Group level, 91 employees took parental leave the previous year. Of these, 81 were women and 10 were men.
55 GRI 401-01, 2-7.
56 GRI 401-03.
107
Employees who returned from parental leave
Sava Insurance Group
Sava Re
2023
2022
2023
2022
Gender
Number
Share
Number
Share
Number
Share
Number
Share
Women
38
2.1%
40
2.3%
4
4.0%
1
1.1%
Men
10
0.8%
7
0.6%
5
8.5%
3
5.6%
Total
48
1.6%
47
1.6%
9
5.6%
4
2.7%
At the Sava Insurance Group level, 48 employees – 38 women and 10 men – returned to work from parental leave in 2023.
9.5 Employee training and development 57
9.5.1 Types and scope of training
We are aware that the personal and professional development of each employee is a prerequisite for the development and attainment of goals at the level of the individual, the company and the entire Sava Insurance Group.
We provide professional and personal development opportunities for our employees by:
•engaging in work and projects in a culturally diverse international environment;
•promoting and integrating a wide range of education and training programmes that are relevant to the needs of the workplace and the business, taking into account the individual’s personal and career development;
•encouraging intergenerational cooperation between young talents and experienced employees;
•identifying promising professional and managerial talent and involving them in targeted development programmes.
We promote the development and transfer of knowledge and skills throughout the Sava Insurance Group. To achieve this, we hold expert meetings for representatives of all companies at events or professional conferences, providing an opportunity to share knowledge and skills and to inform each other of results and plans. In 2023, we held internal conferences for data protection, compliance, human resources, procurement, sustainability, reinsurance, internal audit, actuarial and risk management, finance, controlling and accounting, and IT.
We also hosted an international strategic conference at the Group level, which brought together members of the management and other key personnel from across the Sava Insurance Group, and an Adriatic region conference for non-Slovenian subsidiaries, aimed at members of the management of these companies. The main objective was to address specific issues, problems and opportunities in the non-EU markets.
In 2023, Zavarovalnica Sava received the Top Investor in Education certificate, which is awarded to companies that systematically invest in the education and training of their employees and exceed the national average in at least two out of three selection criteria. We were also nominated as a finalist in the Golden Thread and Štajerska Region Employer of the Year 2023 awards, placing us among the best employers in Slovenia.
57 GRI 3-3.
108
Key data on employee training 58
Sava Insurance Group
Sava Re
2023
2022
Index
2023
2022
Index
Hours of training
55,144
57,139
96.5
3,024
2,184
138.5
Number of training participants
2,451
2,326
105.4
113
93
121.5
Our aim is to keep the number of training participants and the number of training hours per employee at the same level throughout the Sava Insurance Group.
We place great emphasis on internal training, delivered by internal or external providers who tailor the programme to our needs.
Number of training hours by type of training 59
Sava Insurance Group
Sava Re
2023
2022
Index
2023
2022
Index
Number of internal education/training hours
39,205
45,762
85.7
1,112
240
463.3
Number of external education/training hours
15,939
11,377
140.1
1,912
1,944
98.4
Total education/training hours
55,144
57,139
96.5
3,024
2,184
138.5
Average hours of employee training by gender 60
Year 2023
Sava Insurance Group
Sava Re
Gender
Number
Hours of training
Average
Number
Hours of training
Average
Women
1,487
32,018
21.5
84
1,688
20.1
Men
964
23,126
24.0
29
1,336
46.1
Total
2,451
55,144
22.5
113
3,024
26.8
Both men and women are involved in education and training programmes.
9.5.2 Succession planning
In 2023, we have redefined our policy on human resource development and succession planning. Our aim is to place greater emphasis on systematically identifying and securing succession, particularly for key professional and management roles.
Group companies are establishing a process to identify deputies and potential successors for management board members and directors reporting directly to the board, as well as other key management and professional staff.
9.6 Employee management and motivation 61
At the Sava Insurance Group, we foster an environment in which our employees can develop and achieve their potential. We continuously invest in the development of leadership competencies and effective collaboration. We encourage employee motivation and commitment to achieving common
58 GRI 404-01.
59 GRI 404-01.
60 GRI 404-01.
61 GRI 3-3.
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goals. We recognise and reward good performance. We revamp and adapt our processes in order to provide for effective work organisation and engagement of employees in various projects.
At the Sava Insurance Group, we build and promote a culture of improvement and innovation. The companies have established formal and informal systems for making proposals for improvement and innovation.
9.6.1 Leader development
In all the companies, leaders are the key people who have a significant impact on creating a positive climate, employee engagement, satisfaction and loyalty. It is therefore very important that we invest in their development and strengthen their leadership competencies. Companies organise various forms of development programmes and group and individual coaching sessions for leaders.
For the first time, we organised a “Leader as Coach” training in 2023 for a group of high-potential employees from most Group companies.
9.6.2 Employee benefits 62
The Sava Insurance Group offers numerous benefits to our employees:
•flexible working hours and working from home,
•preventive health and well-being activities,
•various sports activities,
•events for employees (e.g. group and departmental team-building events and pre-New Year’s Eve social events),
•small gifts for personal holidays, work anniversaries and other occasions (e.g. Women’s Day),
•parent-friendly benefits to help parents balance work and family life,
•various group insurance schemes and more affordable personal insurance,
•more accessible holiday facilities.
In addition, we offer other benefits to create and encourage team building, a motivating and positive working atmosphere, work-life balance and general well-being in the workplace.
In 2023, we held the second Sava Insurance Group Sports Games, bringing together employees from all Group companies and countries. The games have become an annual event where employees from different companies meet, make new friends, nurture old friendships and get together in an informal setting.
9.6.3 Annual performance appraisal interviews 63
Employees involved in annual performance appraisal interviews
Year 2023
Sava Insurance Group
Sava Re
Employees involved in annual performance appraisal interviews
Number
Share
Number
Share
Women
824
45.7%
86
85.1%
Men
616
51.1%
52
88.1%
Total
1,440
47.9%
138
86.3%
62 GRI 3-3.
63 GRI 404-03.
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We encourage our employees to pursue the goals that relate to the Company’s strategy, which in effect implies that each employee contributes to the attainment of common goals. We regularly review employee progress, which allows us to promptly evaluate performance and coordinate our efforts in the process towards achieving our goals.
9.6.4 Health and safety at work 64
Our goal is to ensure that our employees feel safe both inside and outside the workplace, which is why occupational safety and health is one of the priorities of the Sava Insurance Group, involving all employees, the management, the human resource department, the accredited occupational health provider and the relevant external professional service. Each year, Group companies carry out various health promotion activities.
9.6.5 Health promotion activities
Throughout the Sava Insurance Group, companies take all the necessary measures for occupational safety, health and fire protection, as required by law and internal regulations. Our companies promptly refer their employees to pre-recruitment and periodical work-related medical examinations as well as to new and periodic training in occupational safety and health, and fire safety.
In 2023, most companies offered employees the opportunity to participate in health days, such as group sports events (hiking, cycling, Nordic walking, skiing and the like), lectures (healthy eating, stress management and healthy lifestyle) or similar individual activities of their choice.
During the year, companies also offer their employees various team sports activities (e.g. volleyball or basketball), short active breaks or more beneficial individual sports activities (e.g. yoga, active exercise or fitness). Some companies also offer their employees healthy snacks or fruit at work.
9.6.6 Ensuring inviolability of individuals and protection of personal dignity
In 2023, we have established a policy on ensuring the inviolability of individuals and the protection of personal dignity at the Group level. Ensuring the inviolability and protection of the personal dignity of employees and others involved in work and business processes is one of the Group’s key priorities, and we strive to provide and maintain a safe workplace in which no one is exposed to violence (in particular sexual violence), harassment (in particular sexual harassment), discrimination and bullying.
The inviolability and protection of personal dignity are guaranteed by mechanisms and measures that provide for a clear, transparent, swift and predefined procedure for detecting and sanctioning undesirable conduct, independent decision-making, professionalism, autonomy and independence of the arbitration board, decision-making at a level outside the Sava Insurance Group, and the strictly protected principle of confidentiality of reporting persons and infringers.
As in the previous year, there were no reports of harassment, bullying or other form of violence in the workplace in 2023.
64 GRI 403-1, 3-3.
111
9.6.7 Socially responsible projects and activities 65
Corporate volunteerism has been a tradition in all Sava Insurance Group companies, because we believe that by doing so, we do much good in our local communities and give something back to society. In 2023, we organised various events in Slovenian companies, such as planting trees in the Karst region, helping at the zoo and animal shelters, working with the elderly and other vulnerable groups, and collecting clothes and supplies for those in need. Each employee can choose one event and dedicate one day to volunteering activities held by a company. For more information on corporate volunteerism, see section 13 “Sustainability report”.
9.6.8 Other activities 66
Employees at the Sava Insurance Group can join representative labour bodies in their respective companies. Employee representatives are regularly informed of important changes and involved in their implementation, as required by law.
Group developments are presented to employees on the intranet portal of each company or on the Sava Insurance Group intranet portal.
We encourage employee interaction through various formal and informal meetings. We are committed to a culture in which we communicate in a transparent manner and value mutual respect. Zavarovalnica Sava also received the Family-Friendly Company certificate, awarded by the Ekvilib Institute.
65 GRI 413-01, 3-3.
66 GRI 3-3.
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10 Risk management 67
We present the risk and capital management systems and the significant risks to which the Sava Insurance Group is exposed. Qualitative and quantitative treatment of risk exposures is presented in section 16.7 “Risk management”. These areas will be presented in more detail also in the Solvency and Financial Condition Report of Sava Re as at 31 December 2023, which will be posted on Sava Re’s website on 5 April 2024, and in the Solvency and Financial Condition Report of the Sava Insurance Group as at 31 December 2023, which will be published on the Sava Re website on 17 May 2024.
10.1 Risk management system
The Sava Insurance Group management is aware that risk management is key to achieving operational and strategic objectives and to ensuring the long-term solvency of the Group. Therefore, the Group is continuously upgrading its risk management system at both the company and Group level.
The risk management system is based on Solvency II requirements, but additionally takes into account the legal specifics of non-insurance companies. The risk management system in these companies is adapted according to the business activities of each of them and the scope of these activities and risks to which a company is exposed. Good practices from Sava Re’s risk management model and the organisation of risk management are also transferred to other Group companies.
The Sava Insurance Group has implemented a risk strategy that defines the Group’s risk appetite and policies that cover the entire risk management framework, its own risk and solvency assessments and risk management for each risk category.
Risk management is integrated into all stages of business management and consists of the following key elements:
•the risk strategy,
•risk management processes within the first and second lines of defence,
•the own risk and solvency assessment (ORSA) process.
As part of our systematic approach to risk management, we focus on:
•establishing a clear risk appetite within the framework of the risk strategy and, on this basis, setting operational limits;
•developing our own risk assessment models and improving the ORSA;
•integrating the ORSA and the risk strategy into business planning and strategy setting;
•integrating risk management processes into business processes;
•systematically improving the internal control environment, adapting processes to new activities and monitoring the occurrence of adverse events;
•establishing appropriate risk management standards in all Group companies, depending on the scope, nature and complexity of the business and the associated risks.
10.1.1 Organisation of risk management
The efficient functioning of the risk management system is primarily the responsibility of the Sava Re management board and the management board of each individual subsidiary. To ensure effective risk management, the Group uses a three-lines-of-defence model, which clearly segregates responsibilities and tasks among the lines of defence. The first line of defence consists of all organisational units with
67 GRI 2-23, 3-3.
113
operational responsibilities. The second line of defence consists of three key functions and the risk management committee, if set up in the company. The third line of defence consists of the internal audit function.
The Group’s risk management system is presented in the following diagram.
The Group’s risk management system has been set up on a top-down principle, taking into account the specificities of each company. The management board of each company plays a key role and bears ultimate responsibility for the effectiveness of the risk management processes in place and their alignment with the Group’s standards and the applicable laws.
The supervisory board of each company also plays an important role by reviewing and approving all key risk-related documents. A risk committee has been set up within the supervisory board of the parent company to provide relevant expertise and support in the risk management process in the company and in the Group.
Under the second line of defence, the company and the Group have three key functions in place: the actuarial function, risk management function and compliance function. In addition, the Group’s large members have a risk management committee in place. Each company ensures the independence of the key functions, which are organised as management support services and report directly to the management board.
The risk management function of each individual company is mainly responsible for setting up effective risk management processes and for the coordination of risk management processes already in place at the company or Group level. It is involved in identifying, assessing, monitoring, managing and reporting on risks. It is also involved in the preparation of the risk strategy and the setting of risk tolerance limits. The risk management function regularly monitors and reports on risks at all levels. It also provides decision-making support to the management board.
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The main tasks of the actuarial function in the risk management system are to provide an opinion on the underwriting policy, to provide an opinion on the adequacy of reinsurance arrangements, and to independently verify and challenge the calculation of liabilities and assets from (re)insurance contracts, including the assumptions, methods and professional judgement used. The actuarial function of each company works in cooperation with the Group’s actuarial function.
The main tasks of the compliance function in relation to the risk management system are the identification, management and reporting of non-compliance, including the monitoring of the legal environment, the analysis of existing processes in relation to their compliance with internal and external regulations and any changes to regulations.
The third line of defence is provided by the internal audit function, whose responsibilities are defined in section 11 “Internal auditing in the Sava Insurance Group”.
10.1.2 Risk and capital management strategies
The Group seeks to operate in compliance with its business strategy and meet the key strategic objectives while maintaining an adequate capital level. The risk strategy is prepared in line and in parallel with the strategic plan. The Group has adopted the Sava Insurance Group Risk Strategy for 2023–2027, which defines the risk appetite by operating segment, a set of key indicators and their limits, and a set of operational indicators for ongoing monitoring. Each Group company sets its own risk strategy, risk tolerance limits and operational limits based on the Group’s risk appetite.
The key indicators for monitoring and measuring compliance with risk appetite are:
•the solvency ratio,
•the profitability of the operating segments, including their acceptable level of volatility (tolerance),
•investment and liquidity indicators.
The Group manages its capital to ensure that each Group company has sufficient funds available, on an ongoing basis, to meet its obligations and regulatory capital requirements. The composition of own funds held to ensure capital adequacy must comply with regulatory requirements.
The solvency ratio is the most important indicator of the risk strategy in relation to capital management. The Group’s solvency requirement is designed to meet regulatory and rating agency requirements while maintaining sufficient surplus capital to cover the potential capital needs of the subsidiaries in the event of a major stress scenario materialising in any of them.
10.1.3 Risk management processes
The main risk management processes are identifying, assessing (measuring) and monitoring risks, determining appropriate actions to manage them and reporting on them. Risk management processes are inherently connected with and incorporated into the basic processes conducted at both the company and Group level. They take place in all three lines of defence of the risk management system and are integrated into the decision-making system, so that all important business and strategic decisions are also evaluated from a risk perspective.
Risk identification
As part of the risk identification process, each Group company identifies the risks to which it is exposed. The key risks, which are compiled in each company’s risk register and form the company’s risk profile, are regularly reviewed, and new risks are added as necessary. Risk identification at the Group level is conducted in the same way. Risk identification in the individual Group companies and at the Group
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level is both a top-down and a bottom-up process. The top-down approach is mainly used for strategic risks, such as reputational risk and regulatory risk, and to identify emerging risks. Bottom-up risk identification takes place in individual organisational units and with risk owners (first line of defence).
Risk identification is essentially ongoing, but is particularly important during business planning and for all major projects and business initiatives, such as new product launches, investments in a new asset class, acquisitions and others.
Risk assessment (measurement)
The Group has regular risk assessment (measurement) processes in place for all the risks to which individual companies or the Group are exposed. Risks are measured using both qualitative and quantitative methods, which are constantly being refined.
Different approaches and models are used to measure each risk, depending on their suitability:
•the Solvency II standard formula,
•own risk and solvency assessment (ORSA),
•stress testing and scenario analysis,
•qualitative risk assessment in the risk register,
•various risk measures that facilitate the measurement and monitoring of the current risk profile.
Risk monitoring
Risk monitoring is conducted at several levels: in each organisational unit, the risk management department, the risk management committee and at the level of the management board, the risk committee of the supervisory board (in Sava Re) and the supervisory board of each Group company. In addition, the risk profile of each Group company is monitored at the Group level with regard to its impact on the Group’s risk profile.
In order to monitor risks and compliance with the risk strategy on a regular basis, each Group company defines a basic set of risk measures for each risk category to monitor the current risk profile and capital position of the Group and each Group company. In addition, risk management measures are monitored and controlled. Adverse events and the implementation of relevant corrective measures to prevent the recurrence of an individual event are also monitored.
Risk management
Risk management takes into account the cost-benefit aspect of each action and any recommendations made by the risk management committee and key functions. If there is a need to adopt a new measure to limit a specific risk, the company concerned will carry out an analysis of this measure, taking into account the aspect of cost-effectiveness in its decision-making process.
Each Group company considers the impact of its business strategy on its risk profile and capital position as part of its business planning. When decisions are made during the year that have a significant impact on the risk profile but were not assessed for risk in the business planning process, the company concerned assesses the impact of these decisions on its own and the Group’s risk profile, checks compliance with its risk appetite and takes the necessary action.
Risk reporting
A regular risk reporting system is in place in the larger Group companies and at the Group level. Risk owners report to the risk management function on specific risk categories, such as a predefined set of relevant risk measures and additional qualitative information. On this basis, the risk management function, in collaboration with the risk owners, prepares a risk report covering the overall risk profile of each company. The report is discussed at all levels and is shared with the Group’s risk management
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function. Relevant risk information is also monitored at Group level and reported in the Group’s risk report.
10.1.4 Own risk and solvency assessment (ORSA)
ORSA is a process that runs in parallel with business planning. It aims to understand the risk profile and analyse the impact of changes in the risk profile over the next three years on capital adequacy. The analysis takes into account both the standard Solvency II formula and the own risk assessment and impact analysis of various stress tests and scenarios.
The ORSA assesses all significant measurable and unmeasurable risks that could affect the performance of an individual Group company or the Group as a whole. Sustainability risks, in particular climate change risks, including climate scenarios, are also addressed and assessed.
The ORSA is embedded in the decision-making process and ensures that key decisions and the business strategy are made in light of the risks and associated capital requirements. The results of the ORSA are used to review the alignment of the business strategy with the risk strategy. This links business strategy, the risks taken and the resulting capital required, and capital management.
The company’s management board, risk management committee and specialist staff from different areas are actively involved in the entire ORSA process.
10.2 Material risks of the Sava Insurance Group
The Group and its individual companies classify all identified risks into the following key risk categories – underwriting risks, financial risks (comprising market risk, liquidity risk, credit risk and the risk of failure to achieve guaranteed returns), operational risks and strategic risks.
In addition, the Group and its companies monitor emerging risks that may affect any of the above risk categories. As part of the identification of these risks, sustainability risks are also identified and assessed, which in the Sava Insurance Group mainly affect market and underwriting risks. They are discussed in the strategic risks section of this report.
Individual risks are described in detail in the notes to the financial statements of the Sava Insurance Group and Sava Re in section 16.7 “Risk management”.
In the following, we describe each risk category and the risks within each category.
10.2.1 Underwriting risks
Underwriting risk arises from insurance transactions, the primary purpose of which is to assume risk from insureds (underwriting) and to perform (re)insurance contracts and transactions that are directly related to (re)insurance transactions. It relates to the risks covered under (re)insurance contracts and related processes and arises from uncertainty as to the occurrence, extent and timing of obligations.
In addition to the risks assumed directly by the Group’s direct insurers, Sava Re assumes underwriting risk from cedants outside the Group (accepted reinsurance). Sava Re retains a portion of the assumed risks (Group and non-Group) and retrocedes the portion that exceeds its own capacity.
Underwriting risks are broadly divided into non-life underwriting risks, life underwriting risks and health underwriting risks (which include accident (re)insurance). The Group and Sava Re are exposed to all three categories of risks.
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10.2.1.1 Non-life underwriting risks
Non-life underwriting risks are further subdivided into premium risk, risk of insufficient liabilities and assets from (re)insurance contracts, lapse risk and catastrophe risk.
Premium risk: this is the risk that premiums written are insufficient to meet the obligations arising from (re)insurance contracts. This risk depends on many factors, such as inadequate assessment of market developments, inadequate assessment of claims development, use of inadequate statistics, deliberately insufficient premiums for certain classes of business that are expected to be offset by other classes of business, or inadequate assessment of external macroeconomic factors that may change significantly during the term of a contract; in certain classes of business, there is also inadequate assessment of environmental factors, including climate change. This includes underwriting process risk, price risk and the risk of unexpected increase in claims.
Given the Group’s portfolio structure, the largest contributors to premium risk include motor vehicle and property (re)insurance (fire and other damage to property, including related business interruption insurance).
The Group seeks to mitigate underwriting process risk by restricting authorisations for mass underwriting, ensuring additional training for underwriters and agents, providing understandable, clear and detailed instructions, and setting appropriate underwriting limits that are consistent with the business strategy, the risk strategy and the reinsurance programme. We also pay particular attention to offering products to appropriate target clients (to avoid mis-selling and adverse selection), accepting reinsurance from trusted cedants, and ensuring that appropriate limits are in place for exposure concentrations by geographic location and homogeneous risk groups, thereby maintaining favourable risk diversification.
Risk of insufficient liabilities and assets from (re)insurance contracts: this is the risk that the liabilities and assets from (re)insurance contracts are either (i) insufficient to meet the obligations arising from (re)insurance contracts due to inadequate methods, inappropriate, incomplete and inaccurate data, inefficient procedures and controls, inadequate expert judgement, or (ii) misstated, resulting in unreliable information about the financial position of the company or the Group. This includes the risk of data availability and accuracy, the risk of using inappropriate methods or assumptions, the risk of calculation errors, and the risk that the complexity of the tools used in the process may lead to misleading results. Sustainability risks, including those related to climate change, are also considered when assessing the adequacy of provisions.
As with premium risk, the majority of the risk of insufficient liabilities and assets from (re)insurance contracts arises from the motor and property business, where liabilities and assets from (re)insurance contracts are structurally the largest due to the Group’s traditional focus on such business.
The Group manages the risk of insufficient liabilities and assets from (re)insurance contracts through robust processes and effective controls for their calculation under both IFRS and Solvency II regulations. In addition, each year we back-test the adequacy of the (re)insurance contract liabilities and assets established in previous years, which is used to identify any major causes of inadequate (re)insurance contract liabilities and to apply the lessons learned to the setting of these liabilities in the future.
Lapse risk: this is the risk of loss or adverse change in the value of insurance liabilities resulting from changes in the level or volatility of lapse rates. The Group and Sava Re are not materially exposed to this type of risk. This risk is mitigated primarily by maintaining good relationships with policyholders and cedants and by closely monitoring market conditions.
Catastrophe risk: this is the risk of a catastrophic event occurring; such events are rare, but their financial impact is too great to be covered by otherwise adequate premiums and provisions alone.
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Catastrophe risk may materialise in the case of extreme events or a large number of catastrophic events over a short period. The risk also includes an excessive geographical accumulation of risk. The Group’s portfolio is relatively well diversified geographically, with a slightly higher concentration of risks in Slovenia, which is further addressed through the reinsurance programme. This risk is managed by means of a well-designed underwriting process, by controlling risk concentration for products covering larger property against natural catastrophes and fire, by geographical diversification, and by adequate retrocession protection against natural and man-made catastrophes.
Sustainability risks: These also include climate change risks, which have recently become more and more relevant and are therefore receiving more attention at both the Group and company level. We carry out qualitative assessments, exposure analyses and longer-term scenario analyses, and we monitor the progress of their modelling. The knowledge gained in this area is then applied in setting insurance premiums, determining liabilities and assets from (re)insurance contracts and arranging sufficient reinsurance protection to keep risks within the risk appetite. Other underwriting risks, such as economic environment risk and policyholder behaviour risk, may be relevant, but their impact is already indirectly reflected in the non-life underwriting risk above.
10.2.1.2 Life underwriting risks
We divide life underwriting risks into biometric risks, life expenses risk and life lapse risk.
Biometric risks: among these, mortality risk, which is the most significant risk for the Group, is the risk that the actual mortality of insured persons will turn out to be higher than that projected in the mortality tables used for premium pricing. It depends on the use of relevant statistics and the identification of insured persons whose health or lifestyle may increase their mortality risk. The procedures used to manage this risk include the consistent application of underwriting protocols, detailing deviations from the normal mortality risk, regular monitoring of exposures and the adequacy of the mortality tables used, and appropriate reinsurance protection.
Life expense risk: this is the risk that the actual cost of servicing life insurance contracts will be higher than that assumed in pricing. The level of risk depends on the use of appropriate statistics and an increase in the actual cost of servicing life insurance contracts. The Group manages the life insurance expense risk by periodically monitoring the expenses incurred in servicing life insurance contracts, monitoring the macroeconomic situation (e.g., inflation) and appropriately planning of these expenses for the coming years.
Life lapse risk: this is the risk of a (low or high) increase in lapse rates (rate of early contract termination) due to surrenders, conversions to paid-up status or premium default. The level of risk depends on the use of appropriate statistics, the identification of lapses for various reasons in an underwriting year and the economic situation, which may also affect policyholder behaviour. The level of risk also depends on the competitive insurance products available in the market and the advice provided by insurance intermediaries and financial advisers. The Group manages this risk mainly by monitoring the number and percentage of policy lapses on a quarterly basis, by restricting surrenders where insurer approval is required and by systematically preventing insurance rearrangements by intermediaries.
Sustainability risks: these also include climate change risks, which have become increasingly relevant in recent years and can affect life insurance in a number of ways, including an increase in cancellations and surrenders, an increase in biometric risks (especially mortality and morbidity) and other impacts. We therefore take sustainability and climate change factors into account, among other things, when setting insurance premiums and making assumptions for the calculation of liabilities and assets from (re)insurance contracts.
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Life insurance risks also include other biometric risks (longevity risk and disability and morbidity risk), revision risk and life-catastrophe risk. These risks are minor for the Group and are therefore not discussed in detail.
10.2.1.3 Health underwriting risk
Health underwriting risks are divided into risks arising from health insurance pursued on a similar technical basis to non-life insurance (NSLT health insurance) and health insurance pursued on a similar technical basis to life insurance (SLT health insurance).
The Group manages NSLT-health underwriting risks using techniques similar to those used in non-life insurance, namely prudent underwriting, control of risk concentrations in accident and health products and appropriate reinsurance protection. SLT health insurance is very similar to life insurance; therefore, the Group manages the risks arising from SLT health insurance using similar techniques as for life insurance.
10.2.2 Financial risks
In their financial operations, individual Group companies are exposed to financial risks arising from their investment and underwriting portfolios relating to market, liquidity, credit risk and the risk of failure to realise guaranteed returns on the life insurance business.
10.2.2.1 Market risk
As part of the management of market risk, the Group assesses interest rate risk, investment property risk, equity risk and currency risk.
Interest rate risk: this is the risk that the Group or a company will be exposed to losses resulting from fluctuations in interest rates. When interest rates change, the risk may materialise as a result of a decrease in the value of investments or an increase in liabilities. We try to avoid this by carrying out sensitivity analyses and by matching assets and liabilities, i.e., cash-flow matching.
Investment property risk: this is the risk of a change in the fair value of investment property owned directly or indirectly by the Group or a company. In addition to investment property, real-estate funds are also exposed to this risk.
Equity price risk: this is the risk that the value of investments will decrease due to fluctuations in equity markets. Shares as well as equity and mixed mutual funds are exposed to this risk. The Group manages the equity risk by diversifying this part of the investment portfolio across different capital markets and through a limit system that limits overexposure to the equity portfolio.
Currency risk: this is the risk that changes in exchange rates will reduce the value of assets denominated in foreign currencies or increase the value of liabilities denominated in foreign currencies. The Group and its companies manage currency risk through each company’s efforts to optimise the currency matching of assets and liability.
10.2.2.2 Liquidity risk
This is the risk that, owing to unexpected or unexpectedly high obligations, a company will not be able to meet all its financial obligations. The liquidity risk assumed by each Group company is monitored by regularly measuring and monitoring defined liquidity indicators. One of the indicators is the maturity matching of financial assets and liabilities. Liquidity requirements are met by allocating funds to money market instruments in a percentage consistent with the estimated normal current liquidity
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requirement. In order to cover the estimated liquidity buffer, a company ensures that at least 20% of its portfolio investments are invested in highly liquid assets.
10.2.2.3 Credit risk
This is the risk that an issuer of securities or other counterparty will default on its obligations. In the context of credit risk, each company and the Group address the excessive concentration of risk in a particular region, industry or issuer. Assets exposed to credit risk include financial investments (deposits, bonds, loans granted, bond and convertible mutual funds, and cash and cash equivalents) and other receivables.
10.2.2.4 Risk of failure to realise guaranteed returns
The Group is exposed to the risk of failing to achieve the guaranteed return, specifically with investment contracts and with traditional and unit-linked life insurance business.
10.2.3 Operational risks
This is the risk of loss arising from inadequate or failed internal processes, human behaviour, systems or external events. To manage operational risks effectively, the Group companies have processes in place to identify, measure, monitor, manage and report on such risks.
10.2.4 Strategic risks
The Group companies and the Group are exposed to various internal and external strategic risks that may have a negative impact on earnings or capital adequacy. Strategic risks also include reputational, project and sustainability risks as well as emerging risks. To prevent these risks from materialising, the Group companies mainly carry out preventive activities and have processes in place to identify, measure, monitor, manage and report on strategic risks to ensure that they are managed effectively.
Strategic risks are also managed by continually monitoring the realisation of short- and long-term goals of Group companies and by monitoring upcoming regulatory changes and market developments.
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11 Internal auditing in the Sava Insurance Group
The objective of internal auditing is to provide assurance and advice to the management board in order to add value and improve the effectiveness and efficiency of operations. Internal audit assists the Company in achieving its goals by systematically and methodically assessing the effectiveness and efficiency of the governance, risk management and internal control systems and making recommendations for their improvement.
The Company’s internal audit function is carried out by an independent organisational unit, the internal audit department (IAD), which reports to the management board and is functionally and organisationally separate from other units of the Company. This ensures the autonomy and independence of its work.
In accordance with the Slovenian Insurance Act and under an outsourcing agreement, Sava Re d.d. performs the key function of internal audit for the companies Zavarovalnica Sava d.d., Vita, Življenjska Zavarovalnica, d.d., Sava Pokojninska Družba d.d. and Sava Infond, Družba za Upravljanje, d.o.o. for an indefinite period.
In 2023, Sava Re’s internal audit conducted audits and performed other tasks in accordance with its annual work plan.
Based on all the tests performed and the methodologies applied in the various audit areas, the internal audit department is of the opinion that Sava Re’s internal controls are adequate and their reliability is good. It is also of the opinion that Sava Re’s governance has proven to be appropriate and is being continuously improved to achieve key business goals, and that risks are well managed in terms of efficiency and economy of operations. However, there is still room for improvement in the way the system operates. The audit engagements revealed individual irregularities and weaknesses, to which the IAD drew attention and recommended corrective actions to improve control procedures, corporate governance and risk management. The IAD’s recommendations were actively implemented by those responsible. The aim is to improve the effectiveness of internal controls and the regularity of operations.
The standard audits also focused on the potential for fraud and the exposure or potential vulnerability of IT support to the business. They also looked at the use of ethical and sustainable behaviour. In areas subject to internal audit, internal control systems are in place and functioning to prevent fraud. The audits also made recommendations to improve the IT system.
The IAD reports quarterly to the management board, the audit committee and the supervisory board on completed audit engagements, the effectiveness and efficiency of control systems, corporate governance, risk management, identified breaches and irregularities and the status of recommendations. It has also prepared an annual report on its activities in 2023, which is part of the materials for the general meeting of shareholders.
An external quality assessment of the internal audit at Sava Re (conducted on a five-year basis) was conducted by Deloitte Revizija d.o.o. in 2019. The assessment of the IAD’s operation confirmed that the internal audit complies with the International Standards for the Professional Practice of Internal Auditing, the Code of Ethics of Internal Auditors and the Code of Internal Auditing Principles. In 2024, external quality assessments of internal audit functions are planned for all Sava Insurance Group companies.
As a result of the progress made, the IAD issued its second and improved overall opinion for the Company and the Group in 2023. Activities related to the implementation of the new software to support the overall internal audit process at the Sava Insurance Group level were further refined, and the software support was replaced. Improvements were also made to the Group Internal Audit in virtually all of the Group companies. The IAD regularly monitors the development and quality of the
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internal audit departments in the Group’s subsidiaries and provides them with the necessary professional support.
12 Information technology
In 2023, we adopted a new strategy and plans to implement the new strategy covering the period 2023–2027. We continued our practice of conducting IT process maturity audits, combined with independent external peer reviews of operational performance, architecture and the implementation of system and solution configurations. We use feedback and insights to make improvements. These are then put into operation. Accordingly, we streamlined IT change management, IT architecture, internal controls and risk processes, and we improved the planning and monitoring of IT costs and investments.
In developing business applications, we maintained existing solutions in line with companies’ business and regulatory requirements. We continued the project to replace the core IT solution for insurance and entered the final phase of the project to replace the core IT solution for reinsurance. At the Group level, we increased the number of shared solutions and the use of a common central data centre.
In business intelligence, we provided ongoing business support, upgraded existing solutions and completed the IFRS 17 regulatory reporting project. In line with the strategic priorities for the 2023–2027 strategy period, we upgraded the consolidated data warehouse solution by expanding the scope of data sources and reports.
The infrastructure team supported operations by upgrading technical and service capabilities to implement the strategy (implementation of new core business solutions and digitalisation). We continued our mission of continuous improvement and optimisation by configuring server and network systems and improving the monitoring of critical services. The system software and hardware infrastructure was upgraded in line with the business plan, the amortisation cycle, day-to-day service requirements and planned IT development projects, with more time spent on the architectural design of the various concepts.
In the area of information security, we upgraded sensors and controls in the 24/7 security operations centre and continued to test and deploy new security solutions. We run regular exercises to protect against social engineering attacks and train key personnel how to respond to a crisis in the event of a cyber-attack.
In terms of business continuity, we carried out all planned preventive and control activities, taking into account the increased use of hybrid work.
We take sustainability into account when planning new investments, by reducing the size of applications and centralising the use of shared infrastructure (in-house and cloud). Our business solutions enable hybrid access (remote or from home) for both customers and employees, reducing the need for transport.
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Sustainability report
125
126
13 Sustainability report
About the report 68
In accordance with the GRI Standards, the 2023 sustainability report of the Sava Insurance Group analyses economic, social and environmental aspects.
Key topics of Sava Insurance Group sustainability reporting 69
Economic aspects (GRI 200)
Economic performance
Market presence
Indirect economic impacts
Procurement practices
Prevention of corruption
Tax
Social aspects (GRI 400)
Recruitment and staffing levels
Employee training and development
Diversity and equal opportunities
Employee management and motivation
Health and safety at work
Customer relations / responsibility to consumers
Human rights
Relations with suppliers
Local community
Marketing and labelling
Customer privacy
Compliance
Environmental aspects (GRI 300)
Waste disposal policy
Energy
Supplier assessment
Emissions
Sustainability reporting is integrated into individual sections of the annual report. Disclosures are specially indicated with interactive references. This section provides disclosures and business impacts not covered by other sections of the annual report. In addition to general disclosures and in accordance with prescribed principles, it provides disclosures on the economic, social and environmental aspects that are of vital importance for the Group and relate directly to the Group’s strategy.
Disclosures in accordance with the GRI standard refer to all Group companies wherever possible and, if not, to the parent company and its EU-based subsidiaries.
No statements or information from the previous report have changed on account of new findings, and the report therefore contains no corrections 70.
Sava Re did not seek external assurance of the sustainability report in 2023 71.
Non-financial statement
By providing non-financial information in accordance with the GRI standards, the Annual Report of the Sava Insurance Group and Sava Re d.d. for 2023 complies with (i) Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups or NFRD (Non-Financial Reporting Directive), (ii) Regulation (EU) 2020/852 of the European Parliament
68 GRI 3-1.
69 GRI 3-2.
70 GRI 2-4, 3-2.
71 GRI 2-5.
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and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 in conjunction with Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation, and (iii) the Slovenian Companies Act.
13.1 Sustainable Development Strategy of the Sava Insurance Group for 2023–2027
We have been integrating sustainable development into the Sava Insurance Group strategy since 2017; since then we have given increasing attention to it as environmental, social and governance risks (ESG risks) significantly impact the insurance industry while offering new opportunities in the development of operations.
In December 2022, we adopted the Sustainable Development Strategy of the Sava Insurance Group for 2023–2027, which outlines sustainable development as one of the three key pillars of the Group’s further development.
The Sava Insurance Group’s objectives and sustainable development strategy are rooted in its values, mission and vision. Our goal for the strategy period was for stakeholders to recognise the Group as:
•a socially responsible insurance and reinsurance company, and a socially responsible and trustworthy partner,
•a socially responsible asset and equity manager,
•a socially responsible and attractive employer,
•an organisation that is socially responsible to the wider community.
The following principles guide us in the implementation of the Group’s key sustainable development policies:
Focus on the United Nations global sustainable development goal – good health and well-being: we promote healthy lifestyles and general well-being at all stages of life, both by providing appropriate insurance, financial products, healthcare and other services, and by caring for the health of our employees and society at large.
Focus on the United Nations global sustainable development goal – climate change: we are taking action to combat climate change and its impacts.
International commitment to the United Nations Global Compact: it is based on ten principles of responsible business management, particularly in terms of human rights, labour standards, climate and anti-corruption.
International commitment to the United Nations Principles of Responsible Investment (UN PRI): it guides investors to make responsible investment decisions.
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13.1.1 Implementation of the sustainable development strategy in 2023
At the Sava Insurance Group, we have set the following sustainable strategic objectives for 2023–2027, taking into account ESG criteria 72 and gradually and systematically integrating them into the Group’s decision-making processes:
•reducing the carbon intensity of its own operations and investment portfolio;
•guaranteeing responsible (re)insurance underwriting in accordance with the guidelines adopted by the Sava Insurance Group and the taxonomy standards;
•ensuring sustainability in the value chain and processes by increasing the share of ESG investments in the portfolio, and by further digitalisation and paperless business processes;
•improving customer satisfaction;
•having satisfied and committed employees and strengthening the culture of sustainability.
Throughout 2023, intensive preparations were also made at the Group level for the new regulation on CSRD sustainability reporting and ESRB standards.
The Group was preparing for the introduction and implementation of legal requirements according to these legal acts:
•Regulation (EU) 2019/2088 of 27 November 2019 on sustainability‐related disclosures in the financial services sector or SFDR (Sustainable Finance Disclosure Regulation) – in June 2023, information on the consideration of the principal adverse impacts of investment decisions on sustainability factors was published on Sava Re’s website at the Group level, while at the level of the individual company concerned this information was published on the websites of subsidiaries that meet the criteria of a financial market participant as set out in Article 2 of SFDR. The financial and financial-insurance products offered by the Group to its customers also include appropriate pre-contractual disclosures;
•Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, or the Taxonomy – the Group already reported in accordance with the Taxonomy for 2021 and 2022, based on available data and an estimate of revenue from Taxonomy-eligible activities. In 2023, we carried out activities to ensure the quality and relevance of the data required for disclosures of revenue from Taxonomy-aligned activities, and these disclosures will be published for the first time in 2024 for the year 2023;
•Directive (EU) 2022/2464 of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting or CSRD (Corporate Sustainability Reporting Directive) – the Group has accelerated preparations for the disclosure requirements under the new European Sustainability Reporting Standards (ESRS), in particular by organising and participating in external training sessions to ensure that we are adequately prepared for the 2025 reporting on 2024. In 2022 and 2023, training was provided to the top management of the subsidiaries, as well as to business line managers and all potential authors of reports.
In addition to closely following and complying with legal requirements on sustainable development, we also draw your attention to the following developments:
1.In January 2023, we revised the Sustainability Investment Policy of the Sava Insurance Group, which governs the Group’s approach to environmental, social and governance considerations in investment decisions and the management of sustainability risks. This policy, which was adopted on 30 June 2020, sets out the Group’s commitment to responsible and sustainable
72 ESG (Environmental, Social, Governance) criteria refer to socially responsible behaviour that is generally considered to meet three criteria: environmental and social criteria, and responsible corporate governance.
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investment practices and ensures that the Group complies with applicable laws and regulations governing investments.
2.In 2023, the carbon footprint measurements of the Sava Insurance Group for 2022 were verified for the first time, focusing on data from its own activities (scope 1 and scope 2 emissions). The carbon footprint of the Sava Insurance Group’s operations in 2022 is the baseline or benchmark against which the Group’s carbon footprint and the effectiveness of emission reduction measures in the coming years will be compared. At the same time, we plan to expand the scope of the data in the coming years.
3.We continued to expand our sustainable products into the non-EU markets – micromobility insurance and solar panel insurance.
4.In 2023, a questionnaire was developed and validated in line with the requirements of European standards to verify the suppliers’ sustainability. Data will be collected at the Group level from existing and new suppliers.
5.In November 2023, we held a sustainability conference for representatives of our subsidiaries and business line managers, focusing on European sustainability legislation, the challenges and opportunities it presents, and the Group’s strategic goals.
6.As part of the Heart for the World initiative, all subsidiaries have organised a number of corporate volunteering campaigns. At the Group level, Heart for the World is becoming an important initiative aimed at encouraging employees to act responsibly towards nature and society.
The activities carried out are described in the following sections.
Relations with stakeholders 73
In terms of sustainable development, cooperation with stakeholders is also of key and strategic importance for the Sava Insurance Group. It is important that we identify the most important stakeholder groups and understand their views on dealings with us.
At the end of 2022, we surveyed the Sava Insurance Group’s stakeholders on key sustainability areas to identify those in which the Group has a significant economic, environmental and social impact and which significantly impact our business and stakeholder relationships.
In addition to the parent company, ten Group companies and one subsidiary carried out stakeholder surveys.
We surveyed stakeholder groups that we identify as key:
•suppliers,
•customers,
•employees,
•external sales network,
•reinsurers (Sava Re),
•shareholders (Sava Re).
We analysed the responses of more than 1,000 Group employees and 900 stakeholders from other groups. Their views are presented in a matrix of key topics for the Group.
73 GRI 2-23, 2-29, 3-1, 2-12, 2-13, 2-14, 2-15, 2-17, 2-18.
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Topics and aspects in terms of their importance for stakeholders and the Sava Insurance Group
No.
Y-axis: Assessment by stakeholders
Score
X-axis: Assessment by Group employees
Score
1
Human rights
9.30
Employee health and satisfaction
9.59
2
Diversity and equal opportunities
9.23
Diversity and equal opportunities
9.43
3
Employee health and satisfaction
9.22
Employee training and development
9.26
4
Employee training and development
9.08
Human rights
9.24
5
Long-term stability and profitability
9.07
Cyber threats
9.09
6
Cyber threats
9.02
Customer focus
9.07
7
Ethics and compliance with the law
8.95
Long-term stability and profitability
9.07
8
Protection of personal data
8.93
Ethics and compliance with the law
8.99
9
Customer focus
8.85
Protection of personal data
8.95
10
Innovative products and digital transformation
8.71
Innovative products and digital transformation
8.82
11
Extreme events
8.59
Extreme events
8.49
12
Demographic change
8.36
Demographic change
8.38
13
Environmental and climate change risks
8.23
Involvement in the local environment
8.23
14
Involvement in the local environment
7.92
Environmental and climate change risks
8.11
15
Sustainability investment policy
7.73
Sustainability investment policy
7.91
The following section of the report outlines the most important stakeholder groups and forms of engagement with them.
13.1.2 Types of stakeholder involvement
We cultivate responsible and sincere relations with all our stakeholders. In doing so, we follow the recommendations and rules of public reporting, the code of ethics and internal rules.
Types and objectives of stakeholder involvement
Stakeholders
Type of involvement
Objectives
The most important activities in 2023
Sava Insurance Group employees
•Employee participation (works council and unions)
•Internal formal events (strategic conferences, professional and educational events)
•Internal informal events
•Internal training / consultations
•Management by objectives (annual performance appraisal interviews)
•Internal web and print media
•Thinking out of the box
•Electronic mail
•Social networks
•Personal contact
•Opinion polls / questionnaires
•Sports societies
•Corporate volunteerism
•Information, awareness
•Stimulating ideas to improve the work environment and business processes
•Two-way communication
•Culture building, improving relations and fostering a good organisational climate
•Pursuing the CO 2 reduction target
•Building on the Never Alone employer brand in internal communication
•Informing all employees of pressing ESG issues by email
•Ongoing dialogue with employee and trade union representatives
•Events, conferences, lectures
•Departmental meetings
•Addresses by the chairman of the management board of Sava Re to all employees of the Group by email
•Development of the Heart for the World initiative in terms of corporate volunteerism, education, and awareness-raising on environmental and social issues – 5,114 hours of volunteering
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Stakeholders
Type of involvement
Objectives
The most important activities in 2023
Customers include:
•the insured
•policyholders
•injured parties
•cedants
•investors in mutual and pension funds
•One-to-one counselling
•Meetings
•Compliments and complaints
•Websites, blogs
•Contact centre
•Market communication through different channels
•Expert meetings / conferences
•Events
•Social networks
•Service quality
•Customer focus
•Information
•Quick problem solving
•Customer-friendly attitude
•Identifying actual market needs
•Modern sales channels
•Strengthening of the Sava Insurance Group brand with the slogan “Among good people”
•Year-long and ongoing communication of sales representatives with customers
•Interactive chats – on web pages
•Electronic monthly publications (Sava Infond sent to over 26,000 addresses)
•Direct mail
•Presentation brochure for cedants twice a year
•Social media notifications
External sales network consisting of:
•insurance agencies
•insurance intermediaries
•banks
•business partners, e.g. roadworthiness testing centres, tourist agencies
•Regular contacts
•Professional training
•Meetings/events
•Product and offer expertise
•Keeping up to date with developments in business processes
•Keeping up to date with developments in laws and regulations governing the business
•Building genuine partnerships
•Ongoing communication of specialist services with representatives of the external sales network
Suppliers
(services and materials)
•Tenders
•Invitations to participation
•Questionnaires
•Meetings
•Presentations
•Selection of the most appropriate supplier in accordance with the criteria
•Environmentally friendly materials
•Paperless operation
•Digitisation of operations
•Payment reliability
•Honouring agreements
•Delivery of waste disposal certificates
•Supporting local economy
•Pursuing sustainability in the value chain
•Standing invitations to tender and supplier selections
Shareholders and prospective investors in POSR shares
•At least once a year at the general meeting of shareholders
•Regularly through public notifications (SEOnet of the Ljubljana Stock Exchange)
•Regularly on the website (www.sava-re.si)
•At least once a year in the letter to shareholders
•Regularly via email (ir@sava-
re.si)
•Regularly in individual meetings and through conference calls
•Regularly at investment conferences at home and abroad
•Equal access to information
•Clear dividend policy and yields
•In-depth information on business operations, annual plan and strategic policy
•Sustainable operations
•Regular and transparent communication with shareholders and investors, participation in 7 events in 2023
•25 SEOnet announcements in 2023
Regulators
•Regular and extraordinary reporting to the Insurance Supervision Agency (ISA) and Securities Market Agency (SMA)
•Regular and extraordinary reporting to the Slovenian Competition Protection Agency (CPA)
•Compliance with legislation
•Business transparency
•Security of policyholders
•Compliance
•Consistent tracking of changes in legislations, regulatory measures and recommendations, and meetings
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Stakeholders
Type of involvement
Objectives
The most important activities in 2023
Credit rating agencies
•Regular annual review of the financial position, operations and business results
•Improved credit rating
•AM Best confirmed the credit rating “A” (stable)
•S&P confirmed the credit rating “A” (stable)
Media
•Regularly through press releases
•At least once a year at the press conference
•Periodically through interviews
•Regularly through answers to journalists’ questions
•Providing information to the general public
•Regular and transparent information on business operations
•Strengthening the positive, realistic image of the Company/Group
•Maintaining regular and positive relationships
•In 2023, Sava Re had 1,801 mentions in the media, Zavarovalnica Sava 2,176 mentions, and the Sava Insurance Group 418 mentions
•Responsive and timely communication with the media
Communities
•Direct contact with local decision-makers
•Support to non-profit organisations through sponsorships and donations
•Support for preventive actions
•Employee assistance
•Involving companies/employees in local communities and society at large
•Co-financing projects important for the local community
•Enhancing security through preventive actions
•Infrastructure investments
•Awareness raising among the population
•Section “Sponsorship, donations and preventive actions”
•Section “Responsibility to the community”
13.2 Economic aspect 74
Economic performance, defined by the strategic goals in all areas and reported more extensively in the financial part of the report, is the key performance indicator for the operations of the Sava Insurance Group. This is achieved through timely risk identification and management. We believe that both financial and non-financial risks have an impact on the economic performance of companies.
Distributed economic value of the Sava Insurance Group
EUR million
2023
2022
Index 2023/2022
Other economic impacts
Economic value generated*
867.6
729.9
118.9
Economic value distributed
827.4
705.2
117.3
Insurance service expenses, net of costs, and expenses for reinsurance contracts held
510.6
411.2
124.2
Investment expenses
30.8
49.2
62.6
Other expenses
5.5
0.4
1,287.0
Operating expenses**
137.7
114.6
120.2
Dividend payouts
24.9
23.4
106.7
Income tax expense
15.0
11.6
129.2
Investments in the social community (prevention, donations, sponsorships)
4.2
5.1
81.5
Employee payments, allowances and benefits
98.7
89.7
110.0
Economic value retained
40.1
24.6
163.1
* Economic value generated = total income less net investment income from life policies where policyholders bear the investment risk.
** Operating expenses = attributable expenses, non-attributable expenses and expenses of non-insurance companies, excluding personnel costs, sponsorship, prevention and donations.
74 GRI 3-3, 201-01.
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13.2.1 Sponsorship, donations and preventive actions 75
As a sustainability-oriented partner, Sava Insurance Group also strengthens its social responsibility to the wider community through sponsorship and donation projects. Prevention activities encourage stakeholders to identify different risks, thus contributing to the safety of health, life and property.
For more, refer to section 13.4 “Responsibility to the community”.
13.2.2 Sustainability guidelines for investment 76
13.2.2.1 Responsible financial investment management 77
When managing its investment portfolio, the Sava Insurance Group is committed to sustainability by:
•ensuring that the Group’s investment portfolios are in line with the Sustainability Investment Policy of the Sava Insurance Group;
•reducing the carbon footprint of investments;
•increasing the share of ESG-compliant investments in the entire portfolio;
•increasing the alignment of investments with the EU Taxonomy.
13.2.2.1.1 Compliance of investments with the Sustainability Investment Policy of the Sava Insurance Group
The integration of environmental, social and governance (ESG) considerations into the investment process is described in the Sustainability Investment Policy of the Sava Insurance Group. This policy defines:
•guidelines on how not to finance economic activities at issue (e.g. production of alcohol, tobacco and coal for heating, adult industry, etc.). Compliance is reviewed at the time of investment and at least twice a year thereafter;
•adherence to international principles for responsible investment;
•consideration of the UN Global Compact principles in the investment process.
The UN PRI promotes the integration of ESG considerations into investment decision-making processes, and its signatories are committed to adhering to the UN PRI’s six core principles and reporting on their progress. The Group will report publicly on its compliance with the UN PRIs for the first time in 2024.
The UN Global Compact addresses human and labour rights, the natural environment and anti-corruption. At the Group level, we are committed to incorporating such principles and guidelines into our investment process, and in the future, as more detailed information becomes available, we will define the criteria for excluding such investments from our portfolio.
The investment portfolio includes all financial investments, investment property, and cash and cash equivalents, but excludes investments in subsidiaries and associates, and mutual funds covering unit-linked life insurance liabilities where the investment risk is borne by the policyholders.
The investment portfolio for which compliance with the sustainability investment policy is verified (the investment portfolio captured) includes all financial investments with the exception of deposits, loans and government securities. Also excluded are investment property, investments in subsidiaries and
75 GRI 201-01, 203-02.
76 GRI 3-3, 203-01.
77 GRI 3-3, 201-01.
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associates, cash and cash equivalents, and mutual funds covering unit-linked life insurance liabilities where the investment risk is borne by the policyholders.
Value of investments not aligned with the sustainability policy as at 31 December 2023
EUR
Value of non-aligned investments
Total
Non-life
4,707,095
298,725,406
Traditional life
21,400,954
255,163,668
UL with guaranteed NAVPS
0
18,871,571
Investment portfolio captured
26,108,049
572,760,644
As % of portfolio captured
4.6%
100.0%
As % of investment portfolio
1.7%
36.6%
Number of investments not aligned with the sustainability policy as at 31 December 2023
Number of non-aligned investments
Total
Non-life
3
294
Traditional life
16
318
UL with guaranteed NAVPS
0
33
Investment portfolio captured
19
645
The tables show that as at 31 December 2023, the Group had 19 investments in its investment portfolio with a carrying amount of EUR 26.1 million that are not aligned with the Sustainability Investment Policy of the Sava Insurance Group, representing 1.7% of the Group’s investment portfolio and respecting the defined tolerance of 3% of the investment portfolio.
We also focus on the risks associated with greenhouse gas (GHG) emissions. The first step in this effort is to stop investing in economic activities such as the production of coal for heating and shale oil.
In 2023, key performance indicators to measure GHG emissions in the investment portfolio were established and measured for the first time. We have analysed the investment portfolio in such a way as to identify the companies that contribute most to GHG emissions. The measurements made are limited by the coverage of GHG emissions data in investee companies and range from 20% to 24%, depending on the indicator. In the future, the Group will work to establish further measures to reduce or mitigate the GHG emissions in the investment portfolio and to meet the targets set out in the sustainable development strategy.
13.2.2.1.2 Share of ESG investments
ESG investments include bonds issued to finance green and environmental projects (green bonds) and sustainability bonds issued to fund the green and social sustainability objectives of issuers. ESG investing also covers mutual funds that adhere to ESG principles and alternative funds that clearly adhere to ESG principles, including by signing the UN PRIs.
We prioritise investments that are in line with ESG principles.
The Group’s ESG investments have increased by EUR 43 million from EUR 211.8 million at the end of 2022 to EUR 254.8 million at year-end 2023, or from 14.9% of the portfolio at the end of 2022 to 16.9% of the portfolio at year-end 2023.
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Compliance with sustainability criteria is also emphasised in infrastructure investments, real estate funds and other alternative investments, since non-compliance with the ESG guidelines generally constitutes an exclusion criterion for participation in these types of investments. The managers of such investments in the Group’s portfolios comply with at least one industry sustainability standard (e.g. UN PRI – United Nations Principles of Responsible Investment, GRESB – Global ESG Benchmark for Real Estate or TCFD – Task Force on Climate-Related Financial Disclosures) and report in accordance with that standard.
ESG investments as at 31 December 2023
EUR
Uncalled commitment
Called up already
Total
Total investments called up or already made as % of the Group’s total investment portfolio
Infrastructure funds
3,467,053
51,231,961
54,699,014
3.4%
Real estate funds
0
14,625,508
14,625,508
1.0%
Direct infrastructure projects
0
338,858
338,858
0.0%
Private debt funds
444,447
4,555,553
5,000,000
0.3%
ESG (green and sustainable) bonds
0
172,893,245
172,893,245
11.5%
Bond mutual funds
0
6,494,309
6,494,309
0.4%
ETFs
0
4,626,781
4,626,781
0.3%
Total
3,911,499
254,766,215
258,677,714
16.9%
13.2.2.2 Regulation on sustainability-related disclosures in the financial services sector
Regulation(EU) 2019/2188 78 (SFDR) requires financial market participants to publicly disclose their sustainable management policies. It also requires disclosure of how sustainability risks are integrated into investment decisions and how the company addresses the principal adverse impacts of its investment decisions on sustainability factors.
In line with the SFDR requirements for these disclosures, Group subsidiaries and associates that met the criteria of a financial market participant in 2023 updated their pre-contractual disclosures in financial products accordingly and defined their approach to the principal adverse impacts of their investment decisions. In accordance with Article 4(3) of SFDR, which applies to companies with an average annual number of employees of more than 500, Zavarovalnica Sava published information on its due diligence policies regarding the principal adverse impacts of investment decisions on sustainability factors (the Principal Adverse Impact Statement – PAI) on its website.
13.2.2.3 EU Taxonomy
In 2020, Regulation (EU) 2020/852 79 was adopted as the regulatory framework for promoting sustainable investments, better known as the EU Taxonomy. The regulation aims to promote transparency of sustainability disclosures for financial market participants and the rest of the business community.
The EU Taxonomy is a classification system that helps companies and investors identify “environmentally sustainable” economic activities and make sustainable investment decisions. Environmentally sustainable activities are those that make a significant contribution to at least one of the EU’s six environmental objectives, without significantly harming the other five, are carried out in
78 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector.
79 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088.
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compliance with minimum safeguards and meet technical screening criteria. An economic activity that meets the above requirements is considered to be Taxonomy-aligned.
The EU’s environmental objectives are:
•climate change mitigation,
•climate change adaptation,
•the sustainable use and protection of water and marine resources,
•the transition to a circular economy,
•pollution prevention and control,
•the protection of healthy ecosystems.
13.2.2.3.1 From EU Taxonomy eligibility of the investment portfolio to its EU Taxonomy alignment
The Group has already disclosed in its 2021 and 2022 annual reports the proportion of exposure to EU Taxonomy-eligible economic activities, as required by Delegated Regulation 2021/2178 80 on disclosures.
Economic activity is considered to be eligible if it is identified by the Climate Delegated Regulation 81 and, in the future, by the Environmental Delegated Regulation 82 as having a high potential to contribute to at least one environmental objective, regardless of whether it meets the technical criteria set out in these regulations.
However, from 2024, financial undertakings are required to disclose the proportion of exposure to EU Taxonomy-aligned economic activities, and a range of other sustainable investment information, in line with Article 8 of the EU Taxonomy, and the Group is following this requirement.
An economic activity that meets the above requirements is considered to be Taxonomy-aligned.
The content and presentation of the information that companies are required to disclose on environmentally sustainable economic activities and the methodology for fulfilling these disclosure obligations are set out in the Disclosures Delegated Regulation. In this respect, the Group discloses below one of its key performance indicators, the proportion of EU Taxonomy-aligned investments, which is the weighted average of the value of all investments aligned with this Taxonomy over the so-called captured assets.
The investment portfolio consists of the following items in the statement of financial position: financial investments, investment property and cash. However, exposures to central government units, central banks and supranational issuers are excluded from the covered assets in accordance with Article 7 of Delegated Regulation 2021/2178. They relate to portfolios covering non-life insurance liabilities, traditional life insurance liabilities, life insurance liabilities where the investment risk is borne by the policyholders, and the company’s own funds. In 2023, the assets covered amounted to 98.24% of the total amount of assets under management.
80 Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation (OJ L 443/2021 of 10 December 2021) – Disclosures Delegated Regulation.
81 Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives – Climate Change Delegated Regulation.
82 Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to the sustainable use and protection of water and marine resources, to the transition to a circular economy, to pollution prevention and control, or to the protection and restoration of biodiversity and ecosystems and for determining whether that economic activity causes no significant harm to any of the other environmental objectives and amending Commission Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities – Environmental Delegated Regulation.
137
For investments in mutual funds, exchange-traded funds (ETFs) and alternative funds (infrastructure funds, real-estate funds and private debt funds), the Group implemented a look-through approach to ensure that the EU Taxonomy alignment is calculated for each investment in these funds. The look-through approach was applied to level 1 investments in the fund. The Group did not apply the look-through approach to 5.9% of all funds as information on the breakdown of the funds into individual investments was not available.
The alignment of investments with the EU Taxonomy in 2023, based on revenue, was 1.57% of the assets covered or EUR 21.0 million. Meanwhile, the alignment of investments with the EU Taxonomy, based on capital expenditure, was 2.87% of the assets covered or EUR 38.2 million.
Information on the alignment of investments with the EU Taxonomy is provided by an external data provider, Moody’s Analytics, which relies exclusively on data obtained directly from companies and does not use estimated data.
Detailed information at the investment portfolio level is presented below in relation to the requirements of the EU Taxonomy as defined in template 2 of annex X to the Disclosures Delegated Regulation. The remaining disclosures required by the Disclosures Delegated Regulation are set out in appendix C to the annual report. It was not possible to obtain the information required by annex XII to the Disclosures Delegated Regulation. Sava Re will disclose the data from annex XII in subsequent reporting periods when they become available.
The proportion of the insurance or reinsurance undertaking’s investments that are directed at funding, or are associated with, Taxonomy-aligned activities in relation to total investments
Sava Insurance Group
The weighted average value of all the investments of insurance or reinsurance undertakings that are directed at funding, or are associated with Taxonomy-aligned economic activities relative to the value of total assets covered by the KPI (%)
The weighted average value of all the investments of insurance or reinsurance undertakings that are directed at funding, or are associated with Taxonomy-aligned economic activities, with following weights for investments in undertakings per below (EUR):
Turnover-based:
1.57%
20,965,625
Capital expenditures-based:
2.87%
38,238,940
The percentage of assets covered by the KPI relative to total investments of insurance or reinsurance undertakings (total AuM). Excluding investments in sovereign entities.
The monetary value of assets covered by the KPI (EUR). Excluding investments in sovereign entities.
Coverage ratio:
98.24%
1,331,208,352
138
The proportion of the insurance or reinsurance undertaking’s investments that are directed at funding, or are associated with, Taxonomy-aligned activities in relation to total investments
Sava Re
The weighted average value of all the investments of insurance or reinsurance undertakings that are directed at funding, or are associated with Taxonomy-aligned economic activities relative to the value of total assets covered by the KPI (%)
The weighted average value of all the investments of insurance or reinsurance undertakings that are directed at funding, or are associated with Taxonomy-aligned economic activities, with following weights for investments in undertakings per below (EUR):
Turnover-based:
3.37%
4,867,511
Capital expenditures-based:
5.34%
7,718,052
The percentage of assets covered by the KPI relative to total investments of insurance or reinsurance undertakings (total AuM). Excluding investments in sovereign entities.
The monetary value of assets covered by the KPI (EUR). Excluding investments in sovereign entities.
Coverage ratio:
30.62%
144,634,594
13.2.2.3.2 Restrictions
The low percentage of alignment is due to the discrepancy between the investments included in the numerator and denominator of the KPI. The numerator, unlike the denominator, does not include exposures to companies not subject to the requirements of Articles 19a and 29a of the Accounting Directive (2013/34/EU) and exposures to derivatives, but consequently includes a smaller number of investments than the denominator.
The calculation is also limited by the low coverage of the investment portfolio with data on the alignment of companies with the EU Taxonomy. The limited database of companies for which the external provider provides data is one of the reasons for this. In addition to large companies that are already subject to Taxonomy-alignment reporting, the investment portfolio also includes small and medium-sized companies that are not yet subject to such reporting. In view of the above, it is reasonable to expect that data coverage will improve as regulatory requirements are extended to more companies and information on the alignment of investments with the EU Taxonomy becomes more relevant.
13.2.3 Risks and opportunities arising from climate change 83
Climate change poses a serious risk to society and the economy and has a significant impact on the activities of insurance and reinsurance companies, affecting the ability of policyholders to take out insurance, and the underwriting, operating and investing activities of insurers.
The Sava Insurance Group and Sava Re are directly and indirectly exposed to climate change risks as a result of their operations, so it is crucial to monitor and manage these risks. The Group and the Company monitor climate change risks, including physical and transition risks. Physical risks are those that arise from the physical effects of climate change. Transition risks are those that arise from the transition to a low-carbon and climate-resilient economy.
Physical risks are extremely important, as the harmful effects of global warming on natural and human systems are already visible today. Without further international climate action, the average global temperature will continue to rise, and so will the unpredictability of damage associated with the risk of natural disasters. This may result in higher underwriting risk and, consequently, the need to change
83 GRI 3-3, 201-02.
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business strategies. Also significant is transition risk, which relates to potential material negative impact on the value of investments and other significant effects on business operations.
Both transition risk and physical risks are and will continue to be of great importance to the Group and its companies, so they are subject to constant Group-level monitoring. Climate risks are also addressed (qualitatively and quantitatively) in the own risk and solvency assessment (ORSA).
In terms of physical risks from natural catastrophes, 2023 was a more turbulent year for the Sava Insurance Group than the previous year, as Slovenia and several other countries where the Group operates were hit by a series of storms and floods that caused significant damage to property. The gross claims resulting from these events amounted to EUR 88.3 million in 2023 and, taking into account our reinsurance protection, the impact of these events on the Group’s result was EUR 27.4 million. Zavarovalnica Sava, which was affected by five loss events exceeding EUR 1 million during the year, and Sava Neživotno Osiguranje, Belgrade, which was affected by two such loss events, had the most significant impact on the business result in relation to the aforementioned events.
In the non-Group reinsurance portfolio, Sava Re suffered five loss events for which its share of the loss exceeded EUR 1 million. More severe natural catastrophes have further tightened reinsurance conditions, which can make it more difficult to underwrite reinsurance.
Investments in sustainable development and preventive activities (renewables and awareness-raising among policyholders) will continue to be factors that will have a significant impact on the scope and scale of losses due to natural disasters.
13.2.3.1 Product development and underwriting 84
Ecological (increasing pressure on the environment due to population growth, pollution from waste and other ecological issues), climate (greenhouse gas emissions and extreme weather events) and social changes (introduction of new technologies, changes in legislation, demographic trends and population migration) are shaping a new landscape for the development of new products and underwriting. This leads to:
•new opportunities in the development of innovative products and services,
•preparations for the transformation of underwriting rules for new and unfamiliar risks (e.g. climate change and related less common or unusual weather-related natural disasters), further supported by the significant adverse weather events in Slovenia in 2023.
Sustainability factors in products
In 2023, we continued to expand some of the Sava Insurance Group’s products with a strong sustainability component. In addition to the solar panel insurance already marketed by the Slovenian part of the Sava Insurance Group, subsidiaries in Serbia, Montenegro and North Macedonia also started to develop such products in 2023.
Insurance companies operating in markets subject to European regulation carry out ongoing assessments of compliance with sustainability factors for each new or renewed insurance product. Their findings are set out in separate documents dealing with the oversight and governance arrangements for these products.
In line with the criteria already developed to identify sustainability factors, when developing new insurance products or modifying existing ones, insurers operating in markets subject to European regulation assess whether each new or modified insurance product meets any of the sustainability factors. They also assess their direct or indirect impact on the environment, society, employee issues and respect for human rights. For each new or modified insurance product, the product approval
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process must identify the target market and the group of compatible customers. The target market must be identified by taking into account the characteristics, risk profile, complexity and nature of the insurance product, and its sustainability factors.
Development of financial products
The Taxonomy and SFDR have standardised the criteria for the entire European market. Sustainability factors in financial products are clear and prevent greenwashing. The Sava Insurance Group keeps track of regulations and implements them in a timely manner (relevant disclosures, adoption of relevant policies, etc.).
Responsible insurance and reinsurance underwriting
As the Group’s insurers and reinsurer, we recognise the importance of environmental risks, and we are committed to adopting and introducing internal regulations that will contribute to responsible underwriting of environmental, social and governance risks in non-life insurance.
In accordance with the Sava Insurance Group Guidelines for Responsible Underwriting Environmental, Social and Governance Risks in Non-Life Insurance Business, adopted in 2022, our main focus in 2023 was to find ways to improve the monitoring and reporting system in relation to these guidelines. In this respect, we have taken some steps to increase automation in this area while making the purpose of the guidelines more transparent to help stakeholders better understand environmental, social and governance risks.
Group companies have prepared reports in accordance with these guidelines, which also include information on cases requiring special attention in the underwriting process. These are cases defined in the guidelines as “potentially high or imminent risk”. We found a total of 899 such cases in the Group, while the share of the premium related to these cases represents around 0.33% of the total non-life premium. In this respect, companies in an underwriting environment also monitor the profile of such policyholders to the extent possible, meaning that if they perceive that the policyholders’ system for managing risks is ineffective, they will refuse to underwrite those risks.
In addition to the insurance business, the guidelines have also been taken into account in the reinsurance business, together with any necessary conforming changes.
In reinsurance, based on the above guidelines, we monitored transactions exposed to ESG criteria at the time of reinsurance underwriting, in particular for the non-Group facultative reinsurance. In the non-Group treaty reinsurance, we have been looking for new reinsurance opportunities that would have a positive impact on sustainability.
Providing adequate data
Given the increasing complexity of the decision-making process with regard to ESG criteria, we have continued to establish an appropriate data collection system within the Group in order to introduce the guidelines for responsible insurance portfolio management and to ensure the provision of relevant data in accordance with existing and emerging regulations. We have also taken steps to standardise the way we report and monitor the impact of the introduction of ESG criteria. The Group also follows the Taxonomy reporting commitment, where disclosures are linked to the proportion of Taxonomy eligibility.
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13.2.3.2 Taxonomy-aligned non-life insurance activities
The Sava Insurance Group offers the following insurance coverages:
Consolidated gross premiums written as a percentage of premiums by class of business*
EUR
Gross premiums written
2023
2022
Index
Share
1
Medical expense insurance
17,820,110
12,802,027
139.20
2.56%
2
Income protection insurance**
0
3,230,277
0.00
0.00%
3
Workers’ compensation insurance
17,028,861
23,805,490
71.53
2.45%
4
Motor vehicle liability insurance
165,750,692
137,553,034
120.50
23.81%
5
Other motor vehicle insurance
93,518,266
73,431,760
127.35
13.43%
6
Marine, aviation and transport insurance
7,053,876
15,063,293
46.83
1.01%
7
Fire and other damage to property insurance
151,519,399
182,211,159
83.16
21.77%
8
Assistance
31,405,947
24,906,233
126.10
4.51%
9
Total (1–8)
484,097,150
473,003,272
102.35
69.54%
10
Other non-life
212,042,985
38,568,918
549.78
30.46%
11
Total non-life
696,140,135
511,572,190
136.08
100%
12
Life insurance
189,518,285
176,006,776
107.68
13
Total
885,658,420
687,578,966
128.81
* Data on gross premiums written of Group insurers for the non-Group business (item 9). The above data in the table for 2023 do not include the portion of the premium that refers to risk coverage that is not directly related to climate change (points 10.1 and 10.2 of annex II to the Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021), while taking into account the substantive compliance with the technical criteria of the said Delegated Regulation in relation to Taxonomy alignment. The data in the table on the premium (item 9) related to climate change mitigation activities (do no significant harm (DNSH) within the scope of the above points of the Delegated Regulation) cover the estimated value of the portion of the premium.
** The data in the table related to the activity under item 2 of the table (income protection insurance) take into account the clarification of the European Commission of 21 December 2023 (Draft Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets – third Commission Notice), which foresees the entry of zero value in cases where it is not possible to capture certain data.
The remaining disclosures required by the Disclosures Delegated Regulation are set out in appendix D to the annual report. It was not possible to obtain the information required by annex XII to the Disclosures Delegated Regulation. Sava Re will disclose the data from annex XII in subsequent reporting periods when they become available.
13.2.4 Relations with suppliers and the procurement policy 85
Group companies coordinated the procurement policy and made it more uniform, which involves strategic priorities and principles governing a transparent procurement process. The sustainability objectives of the procurement process are:
•the establishment and maintenance of partnerships with suppliers (which are our existing or potential policyholders); therefore, we prefer to locate suppliers from the local environment;
•the definition of additional criteria for the selection of suppliers that take into account environmental and social aspects, and the definition of criteria to be met by local suppliers.
Internal regulations prescribe the inclusion of an anti-corruption clause in all purchase agreements.86 When ordering, taking over and paying for goods, we follow the four-eyes principle, which ensures a high degree of individual control over the business procurement process. At Sava Re, we assess the
85 GRI 2-6, 204-1.
86 GRI 205-1.
142
risk inherent in procurement on a quarterly basis 87. In 2023, a new questionnaire was developed and validated in line with the requirements of European standards to verify the suppliers’ sustainability.88 The questionnaire will be sent to existing and new suppliers of Group companies with an expected annual turnover of at least EUR 5,000 including VAT via a proprietary application for completion in 2024. The general terms and conditions of business cooperation, which were renewed in 2023 and generally constitute an integral part of every purchase, also emphasise the concern for the company’s sustainable development. Mechanisms for monitoring suppliers’ sustainability are also included in the updated internal regulations governing the business procurement process in all Group companies. Suppliers’ sustainability was also one of the main topics at the procurement conference, attended by procurement officers of all Group companies.
Group companies’ suppliers are mainly providers of consulting services, IT maintenance and upgrade services, office supplies, small tools, computer hardware and software, and company cars.
All Group companies are required to partner with local suppliers by the very nature of the business and the need to establish long-term partnerships in their own communities. The local market of any Group member is the entire country in which its head office is situated 89.
To a lesser extent, some of the purchases are also made outside their home country (in particular for goods and services that cannot be sourced in their home country or are offered at non-competitive prices). In the case of producers or service providers from other countries, business relationships are established through local agents or representatives. Frequently, looking for suppliers in foreign markets is not reasonable because companies can make purchases under better conditions and with less risk with local suppliers.
One of the objectives of the Group’s procurement policy is the collaboration of companies in joint procurement. This most often involves companies registered in the same country. IT solutions are generally purchased and developed at the Group level. Joint procurement optimises the procurement process, reduces costs and mitigates risks in the products or services purchased. At the same time, we facilitate the sharing of expertise, experience and best practices between Group companies.
The Sava Insurance Group ensures a competitive and transparent supplier selection process by sending requests for quotations to a number of potential suppliers and by increasing the responsibility and authority for decision-making regarding the selection of suppliers based on the estimated value of the goods. Special attention is paid to the development of quality criteria, mutual cooperation, creation of synergy and price competitiveness (rebate scales and similar), all of which are considered an appropriate basis on which to assess suppliers.
The Company’s or Group’s procurement policy is also governed by several other internal regulations which set out procedures and instructions. These include the fleet management policy, the rules on procurement, use and maintenance of company vehicles, the rules on the use of information technology assets, and similar.
Sava Re and all Group companies settle their obligations to suppliers within agreed deadlines.
13.2.5 Financial assistance received from the government 90
Zavarovalnica Sava was reimbursed by the government for the salaries paid to its employees for their short-term absences of up to three days.
87 GRI 205-1.
88 GRI 414-1.
89 GRI 204-01.
90 GRI 201-04.
143
Illyria Life (RKS) received financial assistance from the Treasury of the Republic of Kosovo and a government grant to support operations totalling EUR 3,946.47.
13.2.6 Definition of other government incentives
In 2023, Sava Re was again granted a partial 30% exemption from the payment of employer’s contributions for employees who reached the age of 60 and the exemption from the payment of the employer’s share of social security contributions on employment contracts concluded for an indefinite period. These refunds totalled EUR 5,944 (2022: EUR 9,326).
Sava Re also set up a collective voluntary supplementary pension insurance scheme funded by the employer and has a contract in place on the accession to the pension company’s pension scheme, registered in the pension scheme register at the Financial Administration of the Republic of Slovenia. Based on these contracts, the Company pays a voluntary supplementary pension insurance premium for those employees who have joined the pension scheme and are thus entitled to a reduced income tax base for the amount of the voluntary supplementary pension insurance premium paid in the tax year for its employees to the pension scheme provider. The total value of this tax relief was EUR 214,326 (2022: EUR 201,720).
Subsidiaries exercise incentives or reliefs in accordance with local legislation (employment of the disabled, inclusion of employees in the pension schemes, etc.).
13.2.7 Tax 91
The Tax Policy of the Sava Insurance Group was developed and adopted in 2023.
The Group is committed to sustainability-oriented operations in accordance with legislation and its own commitments. The tax policy was adopted to define the implementation of a policy of tax compliance with legal tax frameworks, tax ethics, tax principles and best tax practices in the tax jurisdictions in which the Group operates.
The Group’s tax policy provides a framework for tax governance that ensures that the Group’s conduct in tax matters is guided by clear principles, values and rules that enable each employee and each Group company to make appropriate decisions in compliance with tax laws. Therefore, the fundamental purpose of the policy is to set expectations and responsibilities within the Group to ensure that its tax practices are socially responsible.
The primary objective of the Group’s tax policy is to ensure compliance with the applicable tax regulations in all jurisdictions in which the Group operates, in accordance with the activities carried out in each jurisdiction. This principal objective of respecting and complying with tax rules must be aligned with the principles of corporate governance and the operation of Group companies. The Group’s tax policy promotes responsible tax behaviour, which means taking into account the Group’s business interests and the development of the community in which it is involved, thus ensuring the application of best tax practices.
The tax policy sets out the Group’s tax ethics, tax principles and general rules for tax governance. The basic principle of the Group’s code of ethics is to act honestly, ethically and in accordance with the law, the company’s internal regulations and corporate governance guidelines. In line with this basic principle, which is reflected in all of the Group’s established tax principles:
•we file tax returns and tax accounts diligently and on time, comply with reporting requirements and pay all taxes due on time in accordance with applicable tax regulations;
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•we seek to maximise the use of tax exemptions, tax reliefs and tax deductions, avoid double taxation and claim other tax benefits, all within the framework of legally permissible and consistent tax optimisation and planning;
•we aim to prevent and manage tax risks related to the Group’s strategic focus areas. We structure our business models to maximise the Group’s business objectives;
•we are committed to an arm’s length pricing policy for all related party transactions;
•we aim to strengthen our relationship with the tax authorities based on respect for the law, reliability, professionalism, cooperation, reciprocity and good faith, without provoking unnecessary tax disputes that may arise with the tax authorities when defending a corporate interest in the interpretation of the applicable legal provisions;
•we reject all forms of tax evasion and unfair tax practices;
•we aim to be recognised by our stakeholders as a responsible and community-minded organisation, particularly in line with our sustainable development strategy. This extends to our tax philosophy. Taxes provide for public health services and education. They provide for security as well as the construction and maintenance of public infrastructure. Taxes are a tool for progress and development, forging relationships between the wider community and businesses.
The following table shows the amount of taxes and contributions assessed or paid by type and by tax jurisdiction in which the Sava Insurance Group operates.
2023 (EUR)
Tax jurisdiction / type of tax
Slovenia
Croatia
Montenegr o
North Macedonia
Kosovo
Serbia
Total
Corporate income tax paid
11,243,747
0
778,206
530,887
349,506
29,994
12,932,340
Taxes on emoluments paid to natural persons (employer contributions and taxes)
6,886,789
625,145
73,803
132,584
0
48,501
7,766,822
Taxes and contributions withheld and paid on behalf of employees
17,824,106
782,248
332,151
1,453,580
582,849
1,351,002
22,325,936
Value added tax
6,114,255
189,215
215,596
46,125
1,706,408
271,064
8,542,663
Insurance premium tax
39,762,200
1,839,792
1,576,344
0
304,433
1,552,878
45,035,647
Fire brigade charge
5,624,925
23,958
27,383
318,714
0
0
5,994,980
Financial services tax
64,924
0
0
0
0
0
64,924
Fee for use of building land
333,954
0
14,268
0
0
10,029
358,251
Other charges
7,380
262,919
10,440
0
0
3,910
284,649
Total
87,862,280
3,723,277
3,028,191
2,481,890
2,943,196
3,267,378
103,306,212
2022 (EUR)
Tax jurisdiction / type of tax
Slovenia
Croatia
Montenegr o
North Macedonia
Kosovo
Serbia
Total
Corporate income tax paid
17,134,075
0
340,540
133,326
229,398
121,759
17,959,098
Taxes on emoluments paid to natural persons (employer contributions and taxes)
7,380,457
579,275
59,026
112,485
0
24,833
8,156,076
Taxes and contributions withheld and paid on behalf of employees
19,787,061
707,956
904,225
1,300,861
429,810
1,138,422
24,268,335
Value added tax
6,057,261
103,427
153,301
53,197
1,506,804
132,679
8,006,669
Insurance premium tax
32,171,006
1,530,713
1,348,363
0
286,990
1,263,202
36,600,274
Fire brigade charge
3,475,964
23,716
40,473
291,857
0
0
3,832,010
Financial services tax
90,511
0
16,944
0
0
0
107,455
Fee for use of building land
303,328
0
668
0
0
7,240
311,236
Other charges
12,586
205,153
11,390
0
0
60,250
289,379
Total
86,412,249
3,150,240
2,874,930
1,891,726
2,453,002
2,748,385
99,530,532
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13.3 Social aspect
13.3.1 Responsibility to employees 92
At the Sava Insurance Group, we are aware of our responsibility to our employees and have made it a fundamental goal of our sustainable development strategy to act in such a way that we are recognised by our stakeholders as a socially responsible and attractive employer in the region.
In section 9 “Human resource management”, we report in detail on matters related to employees or HR affairs.
13.3.2 Responsibility to consumers 93
To manage the process of providing services, all companies have in place rules, protocols or instructions that have a pivotal role in ensuring quality and, in turn, customer satisfaction: for underwriting, claims settlement, instigation of recourse proceedings and complaints resolution. In accordance with applicable regulations, there is also a description of the procedures for providing information on insurance products or services.
At the Sava Insurance Group, we strive to meet our customers’ expectations with our products and services, and this is reflected in the awards and commendations. Here are some of the most notable:
Sava Infond
Four Sava Infond funds received a total of six awards as the best fund in their category at the Moje Finance magazine awards for the best mutual funds marketed in Slovenia. In addition, Damjan Kovačič received the title “Best-performing Fund Manager in Slovenia” for his excellent management of the Infond Družbeno Odgovorni (Socially Responsible) Fund, an equity sub-fund.
Sava Penzisko Društvo (MKD)
In 2023, the company was awarded the European title of “Small Pension Fund” by Investment & Pensions Europe and the title of “Best Pension Company in North Macedonia 2023” by World Finance.
Zavarovalnica Sava
The SavaFit incentive programme, through which the insurance company strengthens its concern for the health of its policyholders by motivating them to be physically active through discounts on insurance premiums and benefits offered by selected partners, was awarded the silver plaque “Best Innovation of the Podravje Region 2023”.
13.3.3 Customer in the centre and digitalisation of operations 94
In 2023, we focused on optimising e-commerce customer service and introducing new central services for customer data management. We expanded our existing services to include a centralised consent management service and continued the development of a centralised authorisation management service.
We supported ongoing customer communication campaigns with a communication campaign management solution and an automated e-communication solution, giving us both a better overview
92 GRI 3-3.
93 GRI 3-3.
94 GRI 3-3.
146
of overall customer communication and greater control over communication at key moments in the policy and investment lifecycles.
13.3.4 Customer communication and information 95
13.3.4.1 Customer communication and information in pre-contractual disclosures in the distribution of financial products
Important milestones in communicating information to customers were Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (SFDR) and Regulation (EU) 2020/852 on technical standards (Taxonomy), which regulates the assessment of sustainable investments. The SFDR requires financial market participants and financial advisors offering financial products to publish written policies on the integration of sustainability risks and to ensure the transparency of such integration.
In accordance with the SFDR, the financial service providers of the Sava Insurance Group (Zavarovalnica Sava and Vita, Sava Pokojninska and Sava Infond) provide detailed information on investment decisions and their impact on sustainability in the context of customer communication and information on their websites and in the pre-contractual disclosures of their financial products.
13.3.4.2 Customer information about sustainability factors in insurance products
In accordance with adopted regulations, the sustainability factors of the insurance products offered by the financial service providers of the Sava Insurance Group are presented in a comprehensive and transparent manner. This enables financial service providers to provide relevant information to the distributors of their products, who in turn communicate this information to existing and potential customers of the Sava Insurance Group as part of their business activities.
As part of the amendments to Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, which regulate the inclusion of sustainability factors and sustainability risks and preferences in the requirements for product supervision and governance, and in the business rules and investment advice for investment insurance products, the insurance companies of the Sava Insurance Group in the relevant markets (Slovenia and Croatia) take sustainability factors and objectives into account in the processes of development or approval of an insurance product, determination of its target market, distribution method, governance and supervision. These insurance companies regularly publish documents on their websites detailing the sustainability factors of their products.
13.3.5 Compliance 96
The Sava Insurance Group is obligated to comply with extensive legal and regulatory requirements as well as voluntary obligations. More than 3,000 employees working in Group companies are obliged to abide by these rules. The compliance function ensures that this commitment is implemented in practice, namely by creating rules, raising awareness, monitoring compliance with the rules and upholding integrity.
13.3.5.1 Organisation of the compliance function
Like the Sava Insurance Group, the compliance function is also decentralised. Each company has its own key compliance function holder, and these are overseen by the Sava Insurance Group compliance
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96 GRI 2-27.
147
function holder. Roles, responsibilities and minimum standards are defined by the Sava Insurance Group’s compliance policy. Function holders in each company are responsible for monitoring the legal situation, making recommendations for the adoption of relevant measures, identifying and assessing compliance risks, adopting measures to prevent violation of the rules, providing advice to employees, and monitoring existing processes and potential compliance incidents. The Group-level function holder provides recommendations to function holders in subsidiaries, and assists and monitors them in fulfilling their obligations.
13.3.5.2 Exchange of information within the Sava Insurance Group
To ensure compliance across the Group and continuous improvement of the compliance system, all compliance function holders normally meet once a year.
External experts are also invited as speakers, and together they discuss topics, such as a comprehensive overview of the compliance management system, international standards and best practices with a focus on the role of compliance function holders and providers, characteristic compliance risk areas, how to perform compliance reviews and fulfil other duties of the compliance function holder, the EU Whistleblower Protection Directive and its effects on a company’s business, other relevant EU and local regulations, and similar.
Each month, compliance function holders in all non-Slovenian subsidiaries report to the Group-level function holder on new or amended regulations that affect the business operations of the relevant company. The list contains the name of the regulation, a brief description of essential changes affecting the company’s business, a list of processes affected by these changes, the time limit for implementing the changes, the persons responsible for implementing the changes and, where relevant, the estimated costs involved.
The reporting system established at the Group level facilitates the respective business function holders in managing risks associated with redesigning the business processes that were introduced due to amended legal regulations.
In 2024, the compliance function will continue to provide guidance and oversight in the implementation of EU sustainability regulations, including the Corporate Sustainability Reporting Directive (CSRD) with the European Sustainability Reporting Standards (ESRS), the Sustainable Finance Disclosure Regulation (SFDR), the Non-Financial Reporting Directive (NFRD), the EU Taxonomy Regulation, and the Corporate Sustainability Due Diligence Directive (CS3D).
13.3.5.3 Outsourced transactions
The Sava Insurance Group companies may outsource a function or activity that is critical or important for a company’s business so that it is performed better and/or more efficiently. This entails certain risks, such as dependence on external service providers and similar. Group companies are therefore very careful when outsourcing, taking into account all legal requirements and recommendations by local regulators. The outsourcing policy of the Sava Insurance Group sets out the minimum outsourcing standards for Group and non-Group contracts.
13.3.6 Complaint resolution
When handling complaints submitted by policyholders (and other beneficiaries of insurance contracts), individual companies that are insurance or pension companies follow the rules and procedures for resolving complaints that comply with local laws and the guidelines of the European Insurance and Occupational Pensions Authority (EIOPA), whereas the asset management company complies with the guidelines of the European Securities and Markets Authority (ESMA) in addition to the applicable laws and regulations in this area.
148
In accordance with the Sava Insurance Group Governance Rules, complaints addressed at Sava Re but relating to subsidiaries’ operations are recorded with Sava Re. After complaints have been examined, they are submitted to subsidiaries for resolution. The Group governance department of Sava Re maintains an internal online register of such complaints. Three complaints were lodged in 2023.
All subsidiaries also have internal rules, prescribed procedures and instructions for monitoring and handling complaints in accordance with applicable laws.
13.3.7 Fair business practices 97
The values and principles of ethical conduct are defined in the Code of Ethics of the Sava Insurance Group (the code of ethics), which was also adopted by the Group’s subsidiaries. The general principles of the code of ethics are the core values of the Sava Insurance Group, which are binding on all our employees and include, among others, business compliance, protection of reputation, respect for the dignity and integrity of the individual, protection of trade secrets and other confidential information, honest and fair business practices, respect for market rules, professionalism and care for employees, equal information to all shareholders, transparency and integrity of information, avoidance of conflicts of interest, sustainability orientation and respect for human rights. Employees who become aware of violations of the code of ethics or other binding rules must report them to the compliance function holder. No violations of the code of ethics were observed in 2023.
The insurers also comply with the provisions of the adopted Insurance Code to ensure business development, a professional underwriting process and professional conduct. The (re)insurance companies operate in accordance with market principles, market competition based on loyalty and integrity, and insurance economics and business ethics, with the aim of providing customers with high-quality (re)insurance protection.
Sava Re has also signed the Slovenian Corporate Integrity Guidelines, which commits the Company to creating a work environment based on a culture of corporate integrity, zero tolerance for illegal and unethical conduct of its employees, and compliance with legislation, rules and values, as well as on the highest ethical standards.
Sava Re uses the revised Slovenian Corporate Governance Code for Listed Companies, which came into effect on 1 January 2022, as its reference code.
At the end of 2017, Sava Re also adopted a policy on the diversity of the management and supervisory boards of Sava Re, which governs, among other issues, the gender- and age-balance of all board members.98 Sava Re has integrated respect for human rights in its operations in accordance with the applicable legislation and follows the proposed National Action Plan of the Republic of Slovenia on Business and Human Rights.
With the Policy on Ensuring the Inviolability of the Person and Protection of Personal Dignity in the Sava Insurance Group, we publicly declare that ensuring the inviolability and protection of the personal dignity of employees and other persons involved in work and business processes is one of our key priorities, and we strive to provide and maintain a safe workplace in which no one is exposed to violence (in particular sexual violence), harassment (in particular sexual harassment), discrimination and bullying. Every employee working for an employer has the right to equal treatment, dignity and personal integrity in the workplace. The Act on the Procedure for Dealing with Violations of the Rights to Inviolability of the Person and Personal Dignity in the Sava Insurance Group establishes a protocol for identifying and resolving such risks 99. In 2023, Sava Re recorded no such cases.
97 GRI 2-15, 2-23, 3-3, 205-1, 205-3.
98 GRI 405-1.
99 GRI 3-3.
149
With the adoption of the Slovenian Reporting Persons Protection Act (ZZPri), which entered into force on 22 February 2023, Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law was transposed into the Slovenian law. Sava Re has defined the internal reporting procedure under ZZPri in the Policy for the Establishment of an Internal Reporting Procedure Pursuant to the Act on the Protection of Reporting Persons in the Sava Insurance Group. The policy applies to Sava Re and serves as a reference document for its subsidiaries. Most of the subsidiaries have already integrated the Group’s internal regulations into their operations, while some have done so only partially or in different ways due to different local legislation (e.g. North Macedonia and Montenegro). Sava Re employees were informed of the adoption of the policy and the rules. Both internal regulations were presented to them in a webinar, a recording of which is available to them on the Company’s intranet.
Sava Re follows the principles and guidelines of the rules on the management of conflicts of interest. The rules aim to mitigate the effects of conflicts of interest and manage conflicts of interest that may arise in the performance of the duties and tasks of individuals in the Company by establishing and implementing procedures and measures to be applied when a conflict of interest arises.100
Fraud prevention and detection systems are in place in all Group companies. In this regard, we continuously update the Group’s system and procedures, in particular by raising awareness, building knowledge and complying with standards of ethical conduct.
13.3.8 Anti-corruption 101
In accordance with the provisions of the Slovenian Corporate Integrity Guidelines, the Sava Insurance Group procurement policy and internal regulations of the Slovenia-based Group members, all contracts establishing legal relations must include an anti-corruption clause, general terms and conditions of business cooperation, and provisions regarding confidential data and protection of personal data.
Sava Re’s rules on the management of conflicts of interest set out the procedures and rules relating to receiving gifts, entertainment and hospitality. A detailed and transparent gift policy reduces the risk of unfounded allegations and the spread of distrust regarding employee integrity in the discharge of their duties.
The Sava Insurance Group did not record any corruption cases in 2023.102
13.3.9 Protection of personal data 103
At the Sava Insurance Group, we are aware of the wider social implications of the irresponsible handling of personal data, and we take particular account of trends in artificial intelligence or machine learning, smart devices and other modern digital technologies. In line with our commitment to high ethical standards, we focus our attention on this area in close connection with the provision of cyber security and go beyond the minimum requirements of the law. The companies strive to ensure open, transparent and straightforward communication with individuals whose data they process, including through user experience planning.
In 2021, Sava Re set up a support function for privacy and personal data protection and adopted the Privacy and Personal Data Protection Policy of the Sava Insurance Group. In particular, the policy
100 GRI 2-23.
101 GRI 3-3, 205-01.
102 GRI 205-03.
103 GRI 3-3, 205-01.
150
strengthens the role and competencies of data protection officers (DPOs) and integrates privacy as an important concern into all relevant business and support processes.
The Sava Insurance Group companies have in place internal regulations that define the procedures and measures for the protection of personal data and the management of risks that the processing of personal data in business and support processes poses to the rights of individuals. The data are protected through technical and organisational measures designed to ensure their confidentiality, integrity and availability, and risk minimisation mechanisms are built into the processing operations.
Due to the adoption of new legislation in the Republic of Slovenia, the Slovenia-based companies also focused their personal data protection activities in 2023 on adapting to these changes. In 2023, Sava Insurance Group subsidiaries continued to digitalise the management of personal data protection and strengthened cooperation between relevant stakeholders to sustainably manage the privacy of the Group’s employees, customers and business partners.
The Sava Insurance Group did not identify any major incidents in personal data protection in 2023.
13.3.9.1 Cyber security 104
The Sava Insurance Group pays very close attention to cyber security, for which we continuously strengthen internal system controls with IT and organisational solutions while training and educating our employees in the area of information security.
Information security is part of section 12 “Information technology”.
13.3.10 Respect for human rights 105
The Sustainable Development Policy of the Sava Insurance Group requires the Group companies to ensure respect for human rights in accordance with international conventions and applicable legislation, in particular:
•in corporate governance, by adopting and implementing rules on the diversity of management and supervisory bodies;
•in human resource management, by adopting and implementing internal rules to ensure the dignity and integrity of the individual and the prevention and elimination of psychosocial risks in the workplace;
•in the procurement of goods and services, by assessing suppliers or contractors using appropriately designed questionnaires, checking their references and requiring contractual commitments from suppliers to respect labour and social rights and fundamental freedoms;
•in non-life underwriting, by adhering to the Sava Insurance Group’s guidelines for responsible non-life underwriting of environmental, social and governance risks;
•by implementing the principles of the UN Global Compact;
•in relation to customers who are individuals, by adopting and implementing internal rules on respect for privacy, the protection of personal data and consumer rights.
13.3.11 Contributions to political parties 106
In accordance with the adopted code of ethics and the rules on sponsorship and donations, Sava Re and Group subsidiaries do not finance political parties.
104 GRI 3-3.
105 GRI 3-3.
106 GRI 415-01.
151
13.4 Responsibility to the community
As members of the Sava Insurance Group, we forge strong ties with the community in which we operate and establish partnerships with community stakeholders. We support our communities through projects in which we provide financial and volunteer support to institutions, and we are actively involved in social activities and actions.
Our Group’s business network is extensive, with individual companies in constant contact with their customers and the environment, as they are best placed to identify the needs and potential of their local communities.
Certain members of our Group are the co-founders of the Network for Social Responsibility of Slovenia and members of the Partnership for National Strategy and Social Responsibility.107
Our efforts in the area of corporate social responsibility are also reflected in the awards received by Zavarovalnica Sava:
•the You’ve Got This! (Maš to!) project, dedicated to raising awareness and providing mental health care for young people, was awarded the gold plaque for the best innovation of the Podravje region in 2023 and the bronze plaque for innovation by the Chamber of Commerce and Industry of Slovenia;
•the insurance company also received two awards for excellent ideas and perfect execution of the project for the Tava, thank you for everything! (Tava, hvala za vse!) campaign, namely the silver award from the Slovenian Advertising Festival (SOF) and the bronze WEBSI award.
As the largest Group company, Zavarovalnica Sava carries out the highest number of activities related to socially responsible projects in the Group. These are mostly long-term projects, such as the Call of Loneliness (Klic osamljenosti) and You’ve Got This! (Maš to!) initiatives, which raise awareness about the importance of mental health. In 2023, they also developed the SavaFit incentive programme to encourage their policyholders to be physically active in their free time. To encourage more physical activity, they offer a pay-as-you-go payment scheme and additional benefits from selected partners. The programme was awarded the silver plaque “Best Innovation of the Podravje Region 2023”. It is also used as a platform for charity programmes involving policyholders.
13.4.1 Sponsorships and donations by substance 108
The Sava Insurance Group takes care and responsibility for the people and the environment in which it operates, thus strengthening its visibility as a sustainable partner. Giving back to the community through sponsorship and donations is governed by rules. Sava Re’s rules are published on its website.
107 GRI 2-28.
108 GRI 3-3, 203-02.
152
Sponsorships and donations by substance
Purpose (EUR)
2023
2022
Index
Humanitarian
47,420
138,292
34.3
Cultural
137,731
172,302
79.9
Sports
2,922,675
3,257,279
89.7
Education, training
67,981
74,690
91.0
Scientific
500
383
130.5
Social security
7,600
7,731
98.3
Disability
2,693
4,357
61.8
Health
40,226
27,673
145.4
Other*
522,829
606,035
86.3
Total
3,749,655
4,288,742
87.4
* Other costs for sponsoring activities other than sport, donations for protection against disasters, and donations for other purposes in the public interest.
At the Group level, we sponsor and support the ABA League. Each company allocates its sponsorships and donations according to its financial plan and the opportunities or needs it sees in the local market.
As the largest member of the Group, Zavarovalnica Sava follows the principle of promoting healthy lifestyles when selecting sponsorship and donation projects. The funding is given to associations and organisations that develop talent and have a positive impact on the environment and the public, including through support for preventive actions.
The most notable sponsorships by Zavarovalnica Sava in 2023:
•sports: main sponsor of Maribor Football Club, sponsor of Croatian Academic Rowing Club Mladost, Koper Handball Club and Maribor Handball Club, main sponsor of the Golden Fox (Zlata Lisica) World Cup, main sponsor and partner of Tennis Slovenia, main sponsor of Nova KBM Branik Volleyball Club, and main sponsor of the Novo Mesto Half Marathon;
•culture: main sponsor of the Ljubljana Festival and sponsor of the Lent Festival, main sponsor of Kino Šiška Centre for Urban Culture, main sponsor of the Slovenian Youth Theatre, and main supporter of Rog Centre Creative Hub;
•care for vulnerable groups: the Committed to Steps (Predani korakom) project in cooperation with the Soča University Rehabilitation Institute, and sponsorship of the Mladi Zmaji Public Institute, which provides mental health support to young people, and other humanitarian organisations.
In 2023, a year marked by numerous natural catastrophes in most countries of the region, in particular widespread flooding and storms, many Group companies donated funds for reconstruction, adapted processes and ensured timely claims payments as a sign of solidarity.
Last year, Group companies also responded to the impact of the wars by providing financial support to facilitate the integration of young people from Ukraine.
In cooperation with the Ljubljana Stock Exchange, Sava Re supported the organisation of the Days of the Slovenian Capital Market, an event aimed at increasing financial literacy among companies and retail investors.
Sava Re also refrained from purchasing business gifts in 2023. We donated the money that would otherwise have been spent on business gifts to organisations suggested and selected by employees. The 3rd Floor Heroes organisation received the largest share of this funding.
153
13.4.2 Preventive action projects 109
Raising awareness among policyholders and the wider community about the importance of protecting property and general health, and the efforts to do so are an important part of the preventive actions of the Sava Insurance Group companies. Through prevention, we avoid and reduce claims while helping policyholders and the wider community to protect their health and property. To this end, the insurance companies create special funds for such projects in accordance with local legislation.
Resources allocated to prevention
EUR
2023
2022
Index
Zavarovalnica Sava
228,250
305,200
74.8
Sava Osiguranje (MNE)
134,371
381,043
35.3
Sava Neživotno Osiguranje (SRB)
65,580
153,576
42.7
Total funds returned to the community
428,201
839,819
50.9
The three insurers focus their prevention efforts mainly on preventing fire risks and improving road safety. To this end, a network of roadworthiness testing centres is established in Montenegro and North Macedonia.
13.4.3 Corporate volunteerism – Heart for the World initiative 110
Volunteerism in the form of employee commitment is an important value of the Sava Insurance Group and is united under the common name Heart for the World. To ensure the efficient and transparent implementation of activities, the Group has established a team of coordinators who manage the implementation of activities in their communities according to the interests and wishes of employees and liaise with various philanthropic and environmental organisations in their area. Volunteerism is about acting responsibly towards the environment, people and animals.
Annual employee surveys form the basis for planning activities, and all Group employees contribute many hours of corporate volunteering to organised events. In 2023, various volunteer activities were also carried out throughout the year, ranging from socialising with the elderly and people with special needs, caring for animals, cleaning up the environment, tending lawns and planting trees, to blood donor days, collecting aid for socially disadvantaged groups and similar.
The Heart for the World Working Group also places great importance on raising awareness of pressing environmental and social issues among all employees by organising training sessions and sending out emails on important global days (e.g. Human Rights Day or World Water Day).
In 2023, a team of coordinators in six countries organised 71 events involving around a third of all employees. This amounted to a total of 5,114 hours of volunteering.
13.4.4 Commitments to external initiatives 111
The Sava Insurance Group is involved in initiatives that promote ethical conduct and sustainable business practices. We comply with the fundamental standard of professional business conduct as laid down by the Insurance Code of the Slovenian Insurance Association. We follow the recommendations of the Ljubljana Stock Exchange for listed companies on disclosure of information and have signed the Slovenian Corporate Integrity Guidelines.
109 GRI 203-02, 413-01.
110 GRI 3-3, 413-01.
111 GRI 2-28.
154
Sava Re’s code of reference is the Slovenian Corporate Governance Code for Listed Companies.
13.4.5 Membership in associations 112
Sava Re is active in several professional associations: Slovenian Insurance Association, Slovenian Directors’ Association, British-Slovenian Chamber of Commerce, Chamber of Commerce of Dolenjska and Bela Krajina, Maritime Law Association of Slovenia, Sors (meeting of insurance and reinsurance companies), Slovenian Institute of Auditors, Slovenian Association of Actuaries, CFA Institute and European Institute of Compliance and Ethics (EISEP).
Since 2021, the Sava Insurance Group has been committed to the UN Global Compact and the UN Principles for Responsible Investment.
As of 2022, Sava Re is also a member of the Slovenian Green Network.
All subsidiaries are members of relevant associations and proactively contribute to the development of the industry and other social actions.
13.5 Environmental aspect 113
Climate change and related weather events have a profound impact on the global and local (re)insurance industry. Environmental problems bring new and unexpected risks to the insurance sector. The Group is aware that this requires urgent action, both in operational and strategic terms.
13.5.1 Waste disposal policy 114
Sava Re has a waste separation system in place, which is constantly being improved. The Company also strives to reduce waste. We cannot yet measure the volume of waste by type, as waste is collected for the entire building, which accommodates a number of other legal entities.
At the new office building in Maribor, where six Slovenian companies of the Group are based, municipal waste is collected and disposed of separately according to the categories defined by regulations as waste collected by public waste collection services. Such waste is collected by the public service provider in a manner defined by regulations.
All Group companies are digitalising processes and going paperless to reduce waste.
At the Group level, we separate waste as required by local utility companies and in accordance with regulations. Group companies have widely organised the collection of electronic waste. Most companies have already introduced separate waste collection methods, most commonly used for paper, plastic packaging, biowaste and glass – where this is a systemic possibility.
13.5.2 Energy consumption 115 and energy efficiency investments
Energy consumption and energy efficiency are environmental and economic concerns.
The Sava Insurance Group remains committed to sustainability also in investing and investment maintenance. The Group is constantly looking for ways to reduce energy consumption, including by
112 GRI 2-28.
113 GRI 3-3.
114 GRI 3-3, 306-02.
115 GRI 302-01.
155
investing in new energy efficiency solutions. Investment decisions are also always assessed from an energy efficiency perspective.
The most important investment is the new office building of Zavarovalnica Sava in Maribor, where Sava Infond, Sava Pokojninska, TBS Team 24, ZS Svetovanje and Asistim have also moved their offices. The office building was designed and built in line with the Group’s strategic sustainability guidelines and has an energy rating “A”. It is equipped with a central control system that allows efficient management of modern devices, thus ensuring the efficient use of energy resources. The functional design of space and access, together with the modern IT infrastructure, allows employees to work in a well-organised environment, while the building’s accessible location and ample parking provide an excellent user experience for visitors. An important addition to the new building is a 52.2 kW solar power plant, which contributed around 16% of the green energy in 2023. To ensure and promote sustainable mobility, the site includes charging stations for electric vehicles, a bike shed and a park in the immediate vicinity of the building, which is open to all visitors. An additional 66.6 kW solar power plant is planned for the building in early 2024. The installation of a solar power plant on canopies will increase the share of green energy to around 35% of total electricity consumption.
To reduce greenhouse gas emissions, we installed another 166.6 kW solar power plant in Slovenia to supply green energy to the insurance company’s sales and claims centre.
Group companies are striving to improve the energy efficiency of their business premises while meeting demands to improve the customer experience and working conditions for employees. Investments include, for example, the installation of LED lighting, other more energy-efficient devices and heating and cooling systems for business premises, the implementation of green energy measures, the purchase of hybrid and electric vehicles, investment in charging infrastructure, investment in e-documentation systems, and the use of a central control system at strategic locations aimed at managing energy-intensive devices to continuously optimise energy use.
The vast majority of Zavarovalnica Sava employees have the option of car sharing for business travel, which is particularly useful in urban areas or in larger Slovenian cities.
To achieve energy efficiency, we are implementing a number of measures at the Company level in line with the adopted action plan, such as homeworking, manual energy accounting, employee training on efficient energy use, and measures relating to the Company’s fleet and business travel.
Average fuel consumption is taken into account when purchasing new vehicles for the Group. The type of vehicles purchased also depends on the availability of a network of charging stations in the countries in which we operate.
13.5.3 Carbon footprint of the Sava Insurance Group for 2023 116
The calculation of the carbon footprint for 2023 includes all companies of the Sava Insurance Group on a consolidated basis.
The carbon footprint calculation includes:
•direct emissions from the use of fossil fuels for space heating and power generators, fuel combustion in vehicles owned or controlled by the company, and fugitive refrigerant gases (scope 1 emissions);
•indirect emissions from the consumption of electricity and district heating (scope 2 emissions);
•indirect emissions from the purchase of paper and water, waste water management, and business travel by means not owned or controlled by the company (scope 3 emissions).
116 GRI 3-3, 305-1, 305-2, 305-3.
156
The carbon footprint of the Sava Insurance Group in 2023 is calculated using the location-based method and amounts to 3,984 tonnes of CO 2 equivalent (tCO 2 e). This means 1.45 t CO 2 equivalent per employee or 70.5 kg CO 2 equivalent per square metre of office space.
Compared to the reference year 2022, the Sava Insurance Group’s carbon footprint in 2023 was 6% lower, emissions per employee were 9% lower, and emissions per unit area of office space were 4% lower. The main contributors to this reduction were lower emissions from electricity consumption and heating, while emissions from business travel increased.
Scope 1 emissions in 2023 accounted for 1,070 tCO 2 e (27% of the carbon footprint), scope 2 emissions 2,595 tCO 2 e (65% of the carbon footprint) and scope 3 emissions 318 tCO 2 e (8% of the carbon footprint). The largest source of greenhouse gas emissions was electricity consumption (42%), followed by heating (30%) and business travel (27%).
The 2023 carbon footprint calculation is the third calculation at the level of the entire Sava Insurance Group, with the 2022 carbon footprint calculation serving as a baseline or benchmark against which to compare the carbon footprint and the effectiveness of emission reduction measures in the coming years. The Group is continuously working to improve the quality of the data collected on energy consumption and the scope of emission-generating activities. In addition, we are gradually expanding the range of emission sources that Group companies include in their reporting. In 2023, emission sources were added, such as office paper purchases, water purchases and waste water management.
Percentage of emissions
157
Distribution of sources by emission volume in all companies
Greenhouse gas emissions by scope
2023
2022
Index 2023/2022
Number of employees
2,744
2,704
101.5
Floor area of business premises
56,488
59,032
95.7
SCOPE
2023
(tCO 2 e)
2022
benchmark
(tCO 2 e)
Index 2023/2022
1.
Direct emissions from activities – scope 1
1,070.66
1,256.96
85.2
1.1
Combustion of fossil fuels for space heating
258.01
359.77
71.71
1.2
Business travel using vehicles owned or controlled by the company
798.75
821.58
97.2
1.3
Combustion of fossil fuels to power generators
0.82
5.45
15.0
1.4
Fugitive refrigerant gases
13.08
70.16
18.6
2.
Indirect emissions – scope 2
2,595.10
2,842.35
91.3
2.1
Electricity consumption (for electrical and electronic equipment, lighting, space heating and cooling)
1,665.11
1,794.69
92.8
2.2
District heating consumption for space heating
929.99
1,047.66
88.88
3.
Indirect emissions – scope 3
318.64
148.01
215.3
3.1
Paper consumption
49.97
3.2
Water consumption
2.48
3.3
Waste water management
2.83
3.4
Business travel using vehicles not owned by the company
263.36
148.01
177.9
3.4.1
Motor vehicles
88.32
76.08
116.09
3.4.2
Aircraft
173.47
70.82
244.9
3.4.3
Public passenger transport – bus and rail
0.74
0.31
238.7
3.4.4
Taxi, shuttle
0.83
0.80
103.7
TOTAL
3,984.4
4,247.32
92.3
The carbon footprint data for 2022 were revised and may differ from the publicly available data in the 2022 annual report. The data for 2023 were verified and cover all locations where Group companies conduct their business operations.
158
13.6 Sava Insurance Group sustainability performance indicators
Select Sava Insurance Group sustainability performance indicators
2023
2022
Index 2023/2022
Environmental aspect
CO 2 emissions per employee (in tonnes)
1.45
1.60
90.6
Number of claims reported online
67,981
45,288
150.1
Percentage of ESG-integrated investments as at 31 December
16.9%
14.9%
113.4
Social aspect
Percentage of employees involved in annual performance appraisal interviews
47.9%
49.5%
96.7
Women as a percentage of all employees as at 31 December
59.9%
57.9%
103.4
Employee turnover rate
17.1%
16.9%
101.3
Number of injuries in the workplace
8
9
88.8
Average hours of training per employee
22.5
24.6
91.5
Heart for the World – corporate volunteering (hours)
5,114
5,439
94.0
Governance aspect
Percentage of women in management positions
27.7%
23.9%
115.9
Percentage of women on Group companies’ supervisory boards
19.7%
21.8%
90.3
Economic value generated (EUR million)
867.6
729.9
118.9
Economic value distributed (EUR million)
827.4
705.2
117.3
Economic value retained (EUR million)
40.1
24.6
163.1
The carbon footprint data for 2022 were revised and may differ from the publicly available data in the 2022 annual report. The data for 2023 were verified and cover all locations where Group companies conduct their business operations.
Select Sava Re sustainability performance indicators
2023
2022
Index 2023/2022
Environmental aspect
CO 2 emissions per employee (in tonnes)
1.99
1.66
119.9
Annual electricity consumption per employee (kWh/employee)
1,297
1,485
87.34
Social aspect
Percentage of employees involved in annual performance appraisal interviews
86.3%
100%
86.3
Women as a percentage of all employees as at 31 December
63.1%
63.3%
99.7
Employee turnover rate
6.1%
10.5%
58.0
Number of injuries in the workplace
0
0
100
Average hours of training per employee
26.8
23.5
114.0
Governance aspect
Percentage of women in management positions
25%
33.3%
75
Percentage of women on supervisory boards
17%
17%
100
Percentage of independent members on Sava Re’s supervisory board
100%
100%
100
The carbon footprint data for 2022 were revised and may differ from the publicly available data in the 2022 annual report. The data for 2023 were verified.
159
Financial statements with notes
160
161
STATEMENT OF MANAGEMENT’S RESPONSIBILITY
The management board of Sava Re d.d. hereby approves the financial statements of the Sava Insurance Group and Sava Re for the year ended 31 December 2023, and the accompanying appendices to the financial statements, accounting policies and notes to the financial statements. The management board confirms that the financial statements, including the notes, have been prepared on a going concern basis regarding the operations of the Company and the Group and that they comply with Slovenian law and the International Financial Reporting Standards as adopted by the EU. The financial statements have been prepared using relevant judgements, estimates and assumptions, including actuarial judgements, which apply the methods most suited to the Company and the Group under given circumstances, based on which we can give the below assurances.
The management board members ensure that to the best of their knowledge:
1)the financial statements and the accompanying notes have been drawn up in accordance with the reporting principles adopted by the Company and the Group and give a true and fair view of the assets and liabilities, financial position, profit and loss of the Company and the Group;
2)the business report includes a fair presentation of the development and results of operations of the Company and the Group, and their financial position, including a description of the significant risks and opportunities that Sava Re and the Sava Insurance Group are exposed to.
Furthermore, the management board is responsible for keeping appropriate records that at all times present, in understandable detail, the financial position of the Company and the Group, for adopting appropriate measures to protect assets, and for preventing and detecting fraud and other irregularities.
The tax authorities may, at any time within five years of the end of the year in which the tax was assessed, review the operations of the Company, which could result in additional tax obligations, default interest or penalties related to corporate income tax or other taxes or levies. The Company’s management board is not aware of any circumstances that may give rise to any such significant liability.
Marko Jazbec, Chairman of the Management Board
Polona Pirš Zupančič, Member of the Management Board
Peter Skvarča, Member of the Management Board
David Benedek, Member of the Management Board
Ljubljana, 15 March 2024
162
14 Auditor’s report
163
164
165
166
167
168
169
170
171
15 Financial statements
The financial statements of the Sava Insurance Group and Sava Re d.d for 2023
15.1 Statement of financial position
EUR
Note
Sava Insurance Group
Sava Re
31 December 2023
31 December 2022(restated)
1 January 2022(restated)
31 December 2023
31 December 2022(restated)
1 January 2022(restated)
ASSETS
Intangible assets and goodwill
16.8.1
65,148,831
65,895,292
62,609,877
4,674,935
4,068,384
3,194,031
Property, plant and equipment
16.8.2
59,686,798
62,435,626
56,332,556
2,675,158
2,553,945
2,464,213
Investment property
16.8.5.
24,890,278
22,795,759
14,280,600
7,582,168
7,721,693
7,899,693
Right-of-use assets
16.8.3
8,573,398
7,425,676
7,384,816
277,158
320,124
204,879
Investments in subsidiaries
16.8.6
0
0
0
305,666,793
303,360,793
304,554,991
Investments in associates and joint ventures
16.8.6
23,834,620
21,856,109
20,479,729
19,575,000
19,575,000
19,575,000
Investments in associates accounted for using equity method
16.8.6
23,834,620
21,856,109
20,479,729
0
0
0
Investments in associates measured at cost
16.8.6
0
0
0
19,575,000
19,575,000
19,575,000
Deferred tax assets
16.8.4
6,584,400
17,065
397,297
5,087,420
3,032,250
2,710,122
Financial investments measured at
16.8.7
2,012,532,633
1,776,132,075
1,987,024,393
354,384,196
324,430,975
319,625,036
– Fair value through other comprehensive income
1,276,147,045
1,155,401,907
1,322,371,668
311,285,620
280,840,335
271,786,710
– Amortised cost
76,303,166
64,428,280
62,376,074
5,811,776
3,871,964
5,323,531
– Fair value through profit or loss
660,082,422
556,301,888
602,276,651
37,286,800
39,718,676
42,514,795
Investment contract assets
16.8.8
180,628,137
166,374,119
168,020,989
0
0
0
Insurance contract assets
16.8.9
9,607,288
7,138,340
14,379,062
5,095,344
3,071,631
3,063,438
Reinsurance contract assets
16.8.9
107,481,560
68,133,642
64,246,006
95,762,621
61,224,914
56,068,497
Current tax assets
16.8.17
444,616
3,412,855
330,518
0
49,594
0
Trade and other receivables
16.8.17
14,271,358
12,282,973
8,098,004
198,366
213,229
262,226
Non-current assets held for sale
16.8.20
259,649
991,803
770,544
0
0
0
Cash and cash equivalents
16.8.19
50,559,964
93,223,631
88,643,990
12,260,049
23,926,029
28,806,817
Other assets
16.8.18
4,042,606
4,025,283
4,038,117
715,114
699,783
746,045
Total assets
2,568,546,136
2,312,140,248
2,497,036,498
813,954,322
754,248,344
749,174,988
LIABILITIES
Subordinated liabilities
16.8.29
74,987,535
74,924,356
74,863,524
74,987,535
74,924,356
74,863,524
Deferred tax liabilities
16.8.4
3,436,591
2,811,300
17,864,866
0
0
0
Insurance contract liabilities
16.8.9
1,651,022,247
1,484,315,158
1,621,102,825
295,752,723
272,414,051
291,446,906
Reinsurance contract liabilities
16.8.9
1,642,043
1,051,614
1,376,802
446,848
320,044
766,545
Investment contract liabilities
16.8.8
180,437,695
166,197,363
167,844,906
0
0
0
Provisions
16.8.30
8,074,255
7,973,454
8,918,059
419,660
392,640
421,865
Lease liability
16.8.3
8,844,737
7,657,186
7,640,477
280,366
320,490
203,730
Other financial liabilities
16.8.31
737,085
548,576
561,728
0
0
0
Current tax liabilities
16.8.32
9,930,830
1,554,992
2,996,533
6,319,991
45,414
394,752
Other liabilities
16.8.33
43,769,505
33,642,572
40,329,687
4,850,021
4,155,693
6,368,946
Total liabilities
1,982,882,523
1,780,676,571
1,943,499,407
383,057,144
352,572,688
374,466,268
EQUITY
Share capital
16.8.23
71,856,376
71,856,376
71,856,376
71,856,376
71,856,376
71,856,376
Capital reserves
16.8.22
42,702,320
42,702,320
42,702,320
54,239,757
54,239,757
54,239,757
Profit reserves
16.8.23
281,693,666
256,945,591
229,008,079
281,959,459
257,222,058
229,238,622
Treasury shares
16.8.24
-24,938,709
-24,938,709
-24,938,709
-24,938,709
-24,938,709
-24,938,709
Accumulated other comprehensive income
16.8.25
-28,195,652
-45,138,332
1,511,123
-9,766,315
-14,296,729
-3,159,258
Retained earnings
16.8.27
205,041,879
214,047,218
236,218,747
32,809,209
24,225,388
47,471,932
Net profit or loss for the period
16.8.26
39,702,056
18,712,745
0
24,737,401
33,367,515
0
Foreign currency translation reserve
16.8.27
-3,049,094
-3,256,083
-3,244,024
0
0
0
Equity attributable to owners of the controlling company
584,812,842
530,931,126
553,113,912
430,897,178
401,675,656
374,708,720
Non-controlling interests in equity
16.8.28
850,771
532,551
423,179
0
0
0
Total equity
585,663,613
531,463,677
553,537,091
430,897,178
401,675,656
374,708,720
Total liabilities and equity
2,568,546,136
2,312,140,248
2,497,036,498
813,954,322
754,248,344
749,174,988
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
172
15.2 Income statement 117
EUR
Note
Sava Insurance Group
Sava Re
1–12/2023
1–12/2022
1–12/2023
1–12/2022
(restated)
(restated)
Insurance revenue
16.8.35
697,562,811
608,987,793
167,804,126
150,760,655
Insurance service expenses
16.8.35
-657,125,518
-537,510,550
-174,490,918
-132,523,250
Insurance service result from insurance contracts issued
40,437,293
71,477,243
-6,686,792
18,237,405
Revenue from reinsurance contracts held
16.8.35
86,112,246
43,335,084
73,904,850
39,440,417
Expenses from reinsurance contracts held
16.8.35
-43,071,777
-38,738,910
-30,235,703
-29,572,834
Net result from reinsurance contracts held
43,040,469
4,596,174
43,669,147
9,867,583
Insurance service result
83,477,762
76,073,417
36,982,355
28,104,988
Interest income
16.8.37
21,119,902
15,874,573
4,735,050
2,688,043
Dividend income
16.8.37
1,099,061
1,317,305
217,967
458,074
Income or expenses from financial investments measured at FVTPL
16.8.37
58,342,472
-72,848,689
1,211,782
-3,103,084
Gains and losses arising from the derecognition of financial investments measured at FVOCI
16.8.37
-821,329
-429,390
-120,448
197,687
Net impairment losses and reversals of impairment losses on financial investments
16.8.37
343,794
350,981
54,426
21,823
Net other investment income or expenses
16.8.37
-1,659,159
2,552,339
-3,754,391
2,977,155
Net investment result
78,424,741
-53,182,881
2,344,386
3,239,698
Finance result from insurance contracts
16.8.16
-62,000,579
52,044,359
736,264
-4,749,017
Finance result from reinsurance contracts
1.8.16
-612,578
370,665
-774,623
266,249
Net insurance finance income or expenses
-62,613,157
52,415,024
-38,359
-4,482,768
Net insurance and finance result
15,811,584
-767,857
2,306,027
-1,243,070
Asset management revenue
19,589,410
17,981,800
0
0
Non-attributable operating expenses
16.8.38
-29,432,276
-26,979,168
-13,805,508
-11,803,863
Net impairment losses and reversals of impairment losses on non-financial assets
231,724
79,737
0
5,353
Finance costs
16.8.29
-3,114,997
-3,021,150
-2,882,998
-2,875,317
Share of profit or loss of investments accounted for using equity method
16.8.6
2,169,860
1,285,731
0
0
Net income and expenses from subsidiaries and associates
16.8.39
116,348
994,004
30,755,010
51,728,827
Gains or losses on disposal of discontinued operations
16.8.20
353,684
0
0
0
Net other operating income and expenses
16.8.40
-9,589,746
-7,144,469
234,323
14,978
Profit or loss before tax
79,613,353
58,502,045
53,589,209
63,931,896
Income tax expense
16.8.41
-14,956,182
-11,578,604
-4,114,407
-2,580,945
Net profit or loss for the period
64,657,171
46,923,441
49,474,802
61,350,951
Net profit or loss attributable to non-controlling interests
192,367
227,260
0
0
Net profit or loss attributable to owners of the controlling company
16.8.26
64,464,804
46,696,181
49,474,802
61,350,951
Earnings per share (basic and diluted)
16.8.26
4.16
3.01
0
0
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
117 GRI 2-6.
173
15.3 Statement of other comprehensive income
EUR
Note
Sava Insurance Group
Sava Re
1–12/2023
1–12/2022
1–12/2023
1–12/2022
PROFIT OR LOSS FOR THE PERIOD, NET OF TAX
64,657,171
46,923,441
49,474,802
61,350,951
OTHER COMPREHENSIVE INCOME, NET OF TAX
16.8.25
17,146,991
-45,681,294
4,530,414
-11,137,470
a) Items that will not be reclassified subsequently to profit or loss
818,871
1,252,055
26,439
55,903
Net gains or losses on investments in equity instruments at FVOCI
1,042,213
-1,429,715
0
0
Other items that will not be reclassified subsequently to profit or loss
16.8.30
-196,565
2,383,572
27,063
55,903
Tax on items that will not be reclassified subsequently to profit or loss
16.8.41
-26,777
298,198
-624
0
b) Items that may be reclassified subsequently to profit or loss
16,328,120
-46,933,349
4,503,975
-11,193,373
Finance income or expenses from insurance contracts
16.8.16
-33,063,968
108,200,503
-6,255,975
16,477,039
Finance income or expenses from reinsurance contracts
16.8.16
1,378,743
-5,079,988
1,304,240
-4,949,438
Fair value gain or loss on investments in debt instruments measured at FVTOCI
16.8.7
50,742,502
-160,617,807
9,952,809
-25,259,425
Tax on items that may be reclassified subsequently to profit or loss
16.8.41
-2,935,470
10,576,386
-497,099
2,538,451
Net gains or losses from translation of financial statements
206,313
-12,443
0
0
COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
81,804,162
1,242,147
54,005,216
50,213,481
Comprehensive income, attributable to owners of the controlling company
81,614,473
1,023,481
54,005,216
50,213,481
Comprehensive income, attributable to non-controlling interests
189,689
218,666
0
0
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
174
15.4 Cash flow statement
Sava Insurance Group
Sava Re
EUR
Note
1–12/2023
1–12/2022
1–12/2023
1–12/2022
A.
Cash flows from operating activities
a)
Items of the income statement
7,726,211
120,318,151
16,384,524
12,491,604
Net profit or loss for the period
16.8.26
64,657,171
46,923,441
49,474,802
61,350,951
Adjustments for:
-56,930,960
73,394,710
-33,090,278
-48,859,347
– Depreciation and amortisation expense
9,990,892
7,008,930
738,774
620,939
– Depreciation of right-of-use assets
16.8.3
1,716,035
2,600,227
82,608
78,843
– Finance expenses
53,158,033
160,356,858
5,903,268
10,366,968
– Finance income
-130,692,979
-102,142,261
-40,894,811
-59,410,161
– Gains or losses on the disposal of property, plant and equipment assets
-855,957
-842,517
-28,323
-75,958
– Gains or losses of investments accounted for using equity method
16.8.6
-2,169,860
-1,285,731
0
0
– Gains or losses on the disposal of subsidiaries and associates
16.8.6
-116,348
-994,004
-112,595
-994,004
– Gains or losses on disposal of discontinued operations
46,651
-545,041
0
0
– Increase or decrease in provisions
-122,242
-152,014
106,404
22,068
– Net exchange differences
-2,841,367
-2,188,341
-3,000,010
-2,048,987
– Income tax expense
16.8.41
14,956,182
11,578,604
4,114,407
2,580,945
b)
Changes in operating cash flow items
90,618,113
-57,664,482
-11,218,791
-14,548,609
Net change in insurance and reinsurance contracts
100,504,161
-29,988,304
-10,313,260
-14,715,858
Change in other receivables and other assets
-17,184,956
3,906,065
1,586,660
2,173,788
Change in other liabilities
20,055,151
-14,441,431
-2,147,977
-1,242,983
Corporate income tax paid
-12,756,243
-17,140,812
-344,214
-763,556
c)
Net cash from/used in operating activities (a + b)
98,344,324
62,653,669
5,165,733
-2,057,005
B.
Cash flows from investing activities
a)
Cash receipts from investing activities
373,072,106
370,492,199
134,050,429
130,113,034
Interest received classified as investing activities
20,214,734
20,853,312
4,030,654
3,679,026
Cash receipts from dividends and participation in the profit of others
399,271
1,255,293
30,860,382
52,381,099
Proceeds from sale of intangible assets
0
21,137
0
0
Proceeds from sale of property, plant and equipment assets
4,150,446
5,382,570
42,155
107,892
Proceeds from disposal of investment property
0
482,648
0
0
Proceeds from disposal of non-current assets held for sale
885,018
1,055,039
0
0
Proceeds from disposal of financial investments
347,422,637
341,442,200
99,117,238
73,945,017
Proceeds from disposal of subsidiaries and other companies
16.8.6
112,596
1,000,000
112,595
1,000,000
Other proceeds from disposal of financial investments
347,310,041
340,442,200
99,004,643
72,945,017
b)
Cash disbursements in investing activities
-486,542,321
-402,286,776
-123,198,731
-106,765,838
Purchase of intangible assets
-4,683,220
-5,515,155
-967,769
-1,120,721
Purchase of property, plant and equipment
-4,885,865
-14,852,976
-363,031
-318,237
Purchase of investment property
-2,612,918
-9,186,766
-10,045
0
Purchase of financial investments
-474,360,318
-372,731,879
-121,857,886
-105,326,880
Purchase of subsidiaries or other companies
-1,993,500
0
-1,993,500
0
Other disbursements to acquire financial investments
-472,366,818
-372,731,879
-119,864,386
-105,326,880
c)
Net cash from/used in investing activities (a + b)
-113,470,215
-31,794,577
10,851,698
23,347,196
C.
Cash flows from financing activities
a)
Cash receipts from financing activities
2,633,769
2,210,319
0
0
Proceeds from paid-in capital
263,999
10,478
0
0
Proceeds from borrowing
2,369,770
2,199,841
0
0
b)
Cash disbursements in financing activities
-30,171,545
-28,489,770
-27,683,411
-26,170,979
Interest paid
-3,051,818
-2,919,213
-2,807,331
-2,847,665
Repayments of loans and borrowings
-2,188,659
-2,213,557
0
0
Repayments of lease liabilities
0
0
-79,765
-76,770
Dividends and other profit participations paid
16.8.27
-24,931,068
-23,357,000
-24,796,315
-23,246,544
c)
Net cash from/used in financing activities (a + b)
-27,537,776
-26,279,451
-27,683,411
-26,170,979
C2.
Closing balance of cash and cash equivalents
50,559,964
93,223,631
12,260,049
23,926,029
x)
Increase or decrease in cash and cash equivalents for the period (Ac + Bc + Cc)
-42,663,667
4,579,641
-11,665,980
-4,880,788
y)
Opening balance of cash and cash equivalents
16.8.19
93,223,631
88,643,990
23,926,029
28,806,817
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
175
15.5 Statement of changes in equity for 2023
Sava Insurance Group
EUR
I. Share capital
II. Capital reserves
III. Profit reserves
IV. Accumulated other comprehensive income
V. Retained earnings
VI. Net profit or loss for the period
VII. Foreign currency translation reserve
VIII. Equity attributable to owners of the controlling company
IX. Non-controlling interests in equity
Total
Legal reserves and reserves provided for in the articles of association
Capital redemption reserve
Treasury shares
Other profit reserves
(12 + 13)
1
2.
4
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Closing balance in previous financial year
71,856,376
42,702,320
12,150,797
24,938,709
-24,938,709
219,856,085
-45,138,332
214,047,218
18,712,745
-3,256,083
530,931,126
532,551
531,463,677
Equity (start of period)
71,856,376
42,702,320
12,150,797
24,938,709
-24,938,709
219,856,085
-45,138,332
214,047,218
18,712,745
-3,256,083
530,931,126
532,551
531,463,677
Comprehensive income for the period, net of tax
0
0
0
0
0
0
16,942,680
0
64,464,804
206,989
81,614,473
189,689
81,804,162
Net profit or loss for the period
0
0
0
0
0
0
0
0
64,464,804
0
64,464,804
192,367
64,657,171
Other comprehensive income
0
0
0
0
0
0
16,942,680
0
0
206,989
17,149,669
-2,678
17,146,991
Dividends paid
0
0
0
0
0
0
0
-24,795,600
0
0
-24,795,600
-135,468
-24,931,068
Allocation of net profit to profit reserve
0
0
25,347
0
0
24,722,728
0
14,673
-24,762,748
0
0
0
0
Transfer of profit
0
0
0
0
0
0
0
18,712,745
-18,712,745
0
0
0
0
Acquisition and disposal of subsidiary
0
0
0
0
0
0
0
0
0
0
0
263,999
263,999
Other
0
0
0
0
0
0
0
-2,937,157
0
0
-2,937,157
0
-2,937,157
Equity (end of period)
71,856,376
42,702,320
12,176,144
24,938,709
-24,938,709
244,578,813
-28,195,652
205,041,879
39,702,056
-3,049,094
584,812,842
850,771
585,663,613
Sava Re
EUR
I. Share capital
II. Capital reserves
III. Profit reserves
IV. Accumulated other comprehensive income
V. Retained earnings
VI. Net profit or loss for the period
VII. Foreign currency translation reserve
VIII. Equity attributable to owners of the controlling company
IX. Non-controlling interests in equity
Total
Legal reserves and reserves provided for in the articles of association
Capital redemption reserve
Treasury shares
Other profit reserves
(12 + 13)
1
2.
4
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Closing balance in previous financial year
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
217,296,824
-14,296,729
24,225,388
33,367,515
0
401,675,656
0
401,675,656
Equity (start of period)
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
217,296,824
-14,296,729
24,225,388
33,367,515
0
401,675,656
0
401,675,656
Comprehensive income for the period, net of tax
0
0
0
0
0
0
4,530,414
0
49,474,802
0
54,005,216
0
54,005,216
Net profit or loss for the period
0
0
0
0
0
0
0
0
49,474,802
0
49,474,802
0
49,474,802
Other comprehensive income
0
0
0
0
0
0
4,530,414
0
0
0
4,530,414
0
4,530,414
Dividends paid
0
0
0
0
0
0
0
-24,796,314
0
0
-24,796,314
0
-24,796,314
Allocation of net profit to profit reserve
0
0
0
0
0
24,737,401
0
0
-24,737,401
0
0
0
0
Transfer of profit
0
0
0
0
0
0
0
33,367,515
-33,367,515
0
0
0
0
Other
0
0
0
0
0
0
0
12,620
0
0
12,620
0
12,620
Equity (end of period)
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
242,034,225
-9,766,315
32,809,209
24,737,401
0
430,897,178
0
430,897,178
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
176
15.6 Statement of changes in equity for 2022
Sava Insurance Group
EUR
I. Share capital
II. Capital reserves
III. Profit reserves
IV. Accumulated other comprehensive income
V. Retained earnings
VI. Net profit or loss for the period
VII. Translation differences
VIII. Equity attributable to owners of the controlling company
IX. Non-controlling interests in equity
Total
Legal reserves and reserves provided for in the articles of association
Capital redemption reserve
Treasury shares
Other profit reserves
(13 + 14)
1
2
4
5
6
7
8
9
10
11
12
13
14
Closing balance in previous financial year
71,856,376
42,702,320
12,150,797
24,938,709
-24,938,709
191,918,573
22,547,759
116,166,406
49,623,843
-3,256,354
503,709,720
367,298
504,077,018
Prior-period restatements
0
0
0
0
0
0
0
-1,908,279
0
0
-1,908,279
0
-1,908,279
Impact of transition to IFRS 9
0
0
0
0
0
0
-9,549,903
11,162,972
0
0
1,613,069
0
1,613,069
Impact of transition to IFRS 17
0
0
0
0
0
0
-11,486,736
61,173,806
0
12,330
49,699,400
55,883
49,755,283
Equity (start of period)
71,856,376
42,702,320
12,150,797
24,938,709
-24,938,709
191,918,573
1,511,120
186,594,905
49,623,843
-3,244,024
553,113,910
423,181
553,537,091
Comprehensive income for the period, net of tax
0
0
0
0
0
0
-46,649,452
988,811
46,696,181
-12,059
1,023,481
218,666
1,242,147
Net profit or loss for the period
0
0
0
0
0
0
0
0
46,696,181
0
46,696,181
227,260
46,923,441
Other comprehensive income
0
0
0
0
0
0
-46,649,452
988,811
0
-12,059
-45,672,700
-8,594
-45,681,294
Dividends paid
0
0
0
0
0
0
0
-23,246,544
0
0
-23,246,544
-110,460
-23,357,004
Allocation of net profit to profit reserve
0
0
0
0
0
27,937,512
0
45,924
-27,983,436
0
0
0
0
Transfer of profit
0
0
0
0
0
0
0
49,623,843
-49,623,843
0
0
0
0
Other
0
0
0
0
0
0
0
40,279
0
0
40,279
1,164
41,443
Equity (end of period)
71,856,376
42,702,320
12,150,797
24,938,709
-24,938,709
219,856,085
-45,138,332
214,047,218
18,712,745
-3,256,083
530,931,126
532,551
531,463,677
Sava Re
EUR
I. Share capital
II. Capital reserves
III. Profit reserves
IV. Accumulated other comprehensive income
V. Retained earnings
VI. Net profit or loss for the period
VII. Foreign currency translation reserve
VIII. Equity attributable to owners of the controlling company
IX. Non-controlling interests in equity
Total
Legal reserves and reserves provided for in the articles of association
Capital redemption reserve
Treasury shares
Other profit reserves
(13 + 14)
1
2.
4
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Closing balance in previous financial year
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
189,313,388
3,716,228
10,633,662
26,420,064
0
371,166,000
0
371,166,000
Impact of transition to IFRS 9
0
0
0
0
0
0
-3,270,615
4,387,132
0
0
1,116,517
0
1,116,517
Impact of transition to IFRS 17
0
0
0
0
0
0
-3,604,872
6,031,074
0
0
2,426,202
0
2,426,202
Equity (start of period)
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
189,313,388
-3,159,259
21,051,868
26,420,064
0
374,708,719
0
374,708,719
Comprehensive income for the period, net of tax
0
0
0
0
0
0
-11,137,470
0
61,350,951
0
50,213,481
0
50,213,481
Net profit or loss for the period
0
0
0
0
0
0
0
0
61,350,951
0
61,350,951
0
61,350,951
Other comprehensive income
0
0
0
0
0
0
-11,137,470
0
0
0
-11,137,470
0
-11,137,470
Dividends paid
0
0
0
0
0
0
0
-23,246,544
0
0
-23,246,544
0
-23,246,544
Allocation of net profit to profit reserve
0
0
0
0
0
27,983,436
0
0
-27,983,436
0
0
0
0
Transfer of profit
0
0
0
0
0
0
0
26,420,064
-26,420,064
0
0
0
0
Equity (end of period)
71,856,376
54,239,757
14,986,525
24,938,709
-24,938,709
217,296,824
-14,296,729
24,225,388
33,367,515
0
401,675,656
0
401,675,656
The notes to the financial statements in sections 16.4 to 16.10 form an integral part of these financial statements and should be read in conjunction with them.
177
16 Notes to the financial statements
16.1 Basic details
Reporting company
Sava Re d.d. (hereinafter also the Company) is the parent of the Sava Insurance Group (hereinafter also the Group). The Company was established under the Foundations of the Life and Non-Life Insurance System Act, and was entered in the company register kept by the Ljubljana Basic Court, Ljubljana Unit (now Ljubljana District Court), on 10 December 1990. Its legal predecessor, Pozavarovalna Skupnost Sava, was established in 1977.
Business address of the controlling company
Dunajska cesta 56, Ljubljana, Slovenia
Name of reporting entity
Pozavarovalnica Sava, d.d. (Sava Reinsurance Company d.d., Sava Re d.d.)
Legal form of entity
delniška družba (public limited company)
Domicile of entity
Slovenia
Address of entity’s registered office
Slovenia
Country of incorporation
Slovenia
Principal place of business
Slovenia
Description of nature of entity’s operations and principal activities
reinsurance
Name of parent entity
Pozavarovalnica Sava, d.d. (Sava Reinsurance Company d.d., Sava Re d.d.)
Name of ultimate parent of group
Pozavarovalnica Sava, d.d. (Sava Reinsurance Company d.d., Sava Re d.d.)
Explanation of change in name of reporting entity or other means of identification from end of preceding reporting period
no changes in 2023
Description of nature of financial statements
financial statements of the Sava Insurance Group and Sava Re d.d for 2023
Date of end of reporting period
31 December 2023
Period covered by financial statements
1 January 2023 – 31 December 2023
Description of presentation currency
euro
Level of rounding used in financial statements
rounded to the nearest whole number
The Group transacts reinsurance business (13.5% of the business volume), non-life insurance business (62.9% of the business volume), life insurance business (20.4% of the business volume), pension business and asset management (2.5% of the business volume) and other non-insurance business (0.7% of the business volume)118.
The number of staff employed by the Group on the last day of 2023 was 2,744.8 (31 December 2022): 2,704.3 employees). The statistics on employees in regular employment by various criteria are given in section 9 “Human resources management”.
As at 31 December 2023, the Company employed 144.1 people (31 December 2022: 133.3 employees). The statistics on employees in regular employment by various criteria are given in section 9 “Human resources management”.
118 Data for 2023.
178
The bodies of the Company are the general meeting, the supervisory board and the management board.
The Company’s largest shareholders are Slovenian Sovereign Holding (Slovenski državni holding) and the Republic of Slovenia (which is the founder and sole shareholder of Slovenian Sovereign Holding), which together hold 31.6% of the shares. InterCapital Securities Ltd. holds 19.1% of the shares in a fiduciary account. The largest ultimate beneficial owners of the shares registered through the mentioned fiduciary account are Croatia Osiguranje d.d. (14.2%) and Adris Grupa d.d. (4.9%).
The table “Ten largest shareholders and the list of holders of qualified holdings pursuant to the Takeovers Act as at 31 December 2023” (section 3 “Shareholders and share trading”) is followed by an additional note on the share of voting rights in Sava Re (section 3 “Shareholders and share trading”).
It is the responsibility of the Company’s management board to prepare the annual report and authorise it for issue to the supervisory board. The audited annual report is then approved by the Company’s supervisory board. If the annual report is not approved by the supervisory board, or if the management and supervisory boards leave the decision about its approval (authorisation for issue) to the general meeting of shareholders, the general meeting also decides on the approval (authorisation for issue) of the annual report.
The general meeting has the power to amend the annual report after it has been approved by the Company’s management board; however, it must be re-audited by the external auditor within two weeks after its approval by the general meeting.
16.2 Business combinations and overview of Group companies 119
The following tables show the fair values of the net assets and liabilities of the acquiree ASP d.o.o. acquired in the business combination.
Company acquired in 2023
EUR
ASP
30 September 2023
Intangible assets and goodwill
1,354,199
Property, plant and equipment
12,254
Current tax assets
9,064
Trade and other receivables
132,935
Cash and cash equivalents
53,335
A. Total assets
1,561,788
Deferred tax liabilities
244,200
Other liabilities
67,588
B. Total liabilities
311,788
Fair value of net assets acquired (A - B)
1,250,000
Non-controlling interests in equity
0
Goodwill
0
Fair value of investment as at 30 September 2023
1,250,000
EUR
ASP
Acquisition of stake
1,250,000
Net cash and cash equivalents acquired in the business combination
53,335
Net cash relating to the business combination
1,196,665
119 GRI 2-6, 2-2.
179
Having met all suspensive conditions of the sales and purchase agreement of 20 January 2023, Sava Re finalised the acquisition of 100% of the shares of ASP d.o.o. on 18 August 2023. The company is a provider of key IT applications in the Sava Insurance Group.
The described transaction represents a business combination, included in the financial statements using the acquisition method. The first-time consolidation of the company ASP took place on 30 September 2023. On that date, all the assets and liabilities of the company acquired were valued at their fair value. The cost less accumulated depreciation method was used to determine the fair value of property, plant and equipment assets. Other assets and liabilities were included at their carrying amounts as reported in the original financial statements of ASP as at 30 September 2023, as these were a reasonable approximation of fair value.
The goodwill arising on the acquisition of ASP was fully allocated to intangible assets (EUR 1,354,199) and deferred tax liabilities (EUR 244,200) based on the appraised value.
Other changes in 2023
In April 2023, Sava Re finalised the sale of its ownership interest in G2I, an associated company marketing online motor policies. The effect of the sale on the consolidated financial statements was a gain of EUR 112,594.
In August 2023, Sava Re established Vita S Holding d.o.o., based in Skopje, North Macedonia, in which it holds an 80% stake. As at 31 December 2023, the balance of the investment was EUR 1,056,000. The company was established to provide a platform for Sava Re to develop healthcare services in North Macedonia. The date of first-time inclusion of the company in the financial statements is 30 September 2023.
In December, the company SO Poslovno Savjetovanje d.o.o. ceased trading. The company was summarily wound up and struck off the register of companies on 22 December 2023. As from the strike off, the company has not been included in the consolidated financial statements. The exclusion of the company had no impact on the consolidated financial statements.
Changes in 2022
The Company did not make any acquisitions or purchases of other companies in 2022, but S Estate was successfully sold in the first quarter of 2022. Sava Car (MNE) established the vehicle inspection service Sava Car (SRB) in Serbia in August 2022 in order to strengthen its sales channels, and at the end of 2022 Ornatus KC was renamed ASISTIM.
The tables below show individual items of the statement of financial position and the income statement based on the separate financial statements of subsidiaries and associates prepared in accordance with IFRSs, together with the parent company’s share of voting rights.
180
Subsidiaries as at 31 December 2023
EUR
Activity
Country of incorporation
Assets
Liabilities
Equity as at 31 December 2023
Profit or loss for 2023
Total income
Share of voting rights (%)
Zavarovalnica Sava
insurance
Slovenia
1,070,662,541
822,568,735
248,093,806
26,313,921
590,454,064
100.00%
Sava Neživotno Osiguranje (SRB)
insurance
Serbia
36,984,172
24,941,666
12,042,506
1,177,260
43,994,910
100.00%
Illyria
insurance
Kosovo
27,071,632
16,550,901
10,520,731
1,025,462
18,836,128
100.00%
Sava Osiguruvanje (MKD)
insurance
North Macedonia
24,383,956
15,850,119
8,533,837
-40,791
22,129,006
93.86%
Sava Osiguranje (MNE)
insurance
Montenegro
32,096,784
19,774,812
12,321,972
3,585,668
21,627,386
100.00%
Illyria Life
insurance
Kosovo
18,144,263
11,204,276
6,939,987
1,074,443
2,989,118
100.00%
Sava Životno Osiguranje (SRB)
insurance
Serbia
16,083,286
8,693,789
7,389,497
640,302
4,901,309
100.00%
Sava Car (MNE)
technical research and analysis
Montenegro
1,692,500
898,736
793,764
64,878
1,004,399
100.00%
ZM Svetovanje
consulting and marketing of insurances of the person
Slovenia
194,125
86,286
107,839
-24,251
769,117
100.00%
Asistim (former Ornatus KC)
ZS call centre
Slovenia
108,529
50,256
58,273
13,730
611,660
100.00%
Sava Agent
insurance agency
Montenegro
2,195,357
1,842,616
352,741
150,720
899,415
100.00%
Sava Station
technical research and analysis
North Macedonia
383,778
41,260
342,518
116,353
258,370
93.86%
Sava Pokojninska
pension fund
Slovenia
215,013,455
206,735,828
8,277,627
506,936
3,339,857
100.00%
TBS Team 24
organisation of assistance services and customer service
Slovenia
5,986,410
4,455,392
1,531,018
1,516,776
23,041,366
87.50%
Sava Penzisko Društvo
pension fund management
North Macedonia
12,907,901
602,331
12,305,570
2,247,309
5,923,762
100.00%
Sava Infond
fund management activities
Slovenia
11,338,888
1,926,327
9,412,561
4,144,562
13,248,955
100.00%
Vita
insurance
Slovenia
724,798,357
648,173,670
76,624,687
8,980,780
33,121,987
100.00%
Sava Car (SRB)
technical research and analysis
Serbia
52,352
16,036
36,316
-45,646
202,756
100.00%
ASP (SRB)
maintenance services for core IT systems
Serbia
306,636
82,122
224,514
86,564
287,881
100.00%
Vita S Holding (MKD)
North Macedonia
1,307,325
234
1,307,091
-10,941
0
80.00%
If the new companies had been part of the Group since 1 January 2023, total revenue and net profit for 2023 would have totalled EUR 788,480,228 and EUR 51,591,512, respectively.
181
Subsidiaries as at 31 December 2022
EUR
Activity
Country of incorporation
Assets
Liabilities
Equity as at 31 December 2022
Profit or loss for 2022
Total income
Share of voting rights (%)
Zavarovalnica Sava
insurance
Slovenia
759,592,290
357,916,633
401,675,657
21,235,385
501,357,038
100.00%
Sava Neživotno Osiguranje (SRB)
insurance
Serbia
30,955,215
19,303,907
11,651,308
1,226,162
30,822,465
100.00%
Illyria
insurance
Kosovo
23,469,413
14,036,535
9,432,878
1,157,003
14,820,413
100.00%
Sava Osiguruvanje (MKD)
insurance
North Macedonia
20,637,323
11,624,291
9,013,032
1,724,769
17,561,340
93.86%
Sava Osiguranje (MNE)
insurance
Montenegro
28,827,128
18,913,556
9,913,572
2,115,961
15,087,547
100.00%
Illyria Life
insurance
Kosovo
15,978,290
9,970,436
6,007,854
780,239
2,642,941
100.00%
Sava Životno Osiguranje (SRB)
insurance
Serbia
13,440,297
5,989,804
7,450,493
603,939
3,751,693
100.00%
Sava Car (MNE)
technical research and analysis
Montenegro
1,896,441
941,191
955,250
186,544
1,053,892
100.00%
ZM Svetovanje
consulting and marketing of insurances of the person
Slovenia
231,930
101,383
130,547
-21,870
932,598
100.00%
Asistim (former Ornatus KC)
ZS call centre
Slovenia
95,074
50,530
44,544
24,614
517,040
100.00%
Sava Agent
insurance agency
Montenegro
2,233,523
1,724,474
509,049
139,321
844,453
100.00%
Sava Station
technical research and analysis
North Macedonia
265,543
39,237
226,306
47,739
290,008
93.86%
Sava Pokojninska
pension fund
Slovenia
195,761,299
188,667,015
7,094,284
-621,261
2,748,734
100.00%
TBS Team 24
organisation of assistance services and customer service
Slovenia
4,386,768
3,411,534
975,234
960,992
15,960,076
87.50%
Sava Penzisko Društvo
pension fund management
North Macedonia
11,563,696
402,604
11,161,092
1,964,443
5,162,796
100.00%
SO Poslovno Savjetovanje d.o.o.
business consulting
Croatia
4,917,431
8,374
4,909,057
-7,916
7,315
100.00%
Sava Infond
fund management activities
Slovenia
10,329,678
1,035,019
9,294,659
3,290,258
11,766,747
100.00%
Vita
insurance
Slovenia
639,196,168
561,819,030
77,377,138
11,362,075
29,511,662
100.00%
Sava Car (SRB)
technical research and analysis
Serbia
87,338
5,389
81,949
-18,097
20,238
100.00%
182
Overview of companies with non-controlling interests
EUR
Sava Osiguruvanje
Sava Station
TBS Team 24
Vita S Holding*
2023
2022
2023
2022
2023
2022
2023
Non-controlling interest as % of equity
6.14%
6.14%
6.14%
6.14%
12.50%
12.50%
20.00%
Proportion of non-controlling interest voting rights, in %
0.92%
0.92%
0.92%
0.92%
12.50%
12.50%
20.00%
Statement of profit or loss and other comprehensive income
Income
22,129,006
17,561,340
258,370
290,008
23,041,366
15,960,076
0
Net profit for the year
-40,791
1,724,769
116,353
47,739
1,516,776
960,992
-10,941
- Of non-controlling interest
-2,503
105,845
7,140
2,930
189,597
120,124
-2,188
Other comprehensive income
283,570
285,839
13,919
10,845
49,087
60,208
263,606
- Of non-controlling interest
17,402
17,541
854
666
6,136
7,526
52,721
Total comprehensive income
242,779
2,010,608
130,272
58,584
1,565,863
1,021,200
252,665
- Of non-controlling interest
14,899
123,386
7,994
3,595
195,733
127,650
50,533
Dividends to non-controlling interests
14,630
0
0
0
120,124
110,460
0
Statement of financial position
Assets
24,383,956
20,637,323
383,778
265,543
5,986,410
4,386,768
1,307,325
Liabilities
15,850,119
11,624,291
41,260
39,237
4,455,392
3,411,534
234
Equity
8,533,837
9,013,032
342,518
226,306
1,531,018
975,234
1,307,091
* The company was acquired in 2023.
16.3 Consolidation principles
The parent company prepared both separate and consolidated financial statements as at 31 December 2023.
The consolidated financial statements include Sava Re as the parent and all its subsidiaries, i.e. companies in which Sava Re holds, directly or indirectly, more than half of the voting rights and has the power to control their financial and operating policies so as to obtain benefits from their activities.
The consolidated financial statements of the Sava Insurance Group include all companies directly or indirectly controlled by Sava Re, which controls a company if and only if it has all the following elements:
•power over the company (directs the relevant activities that significantly affect the company’s returns),
•exposure, or rights, to variable returns from its involvement with the company, and
•the ability to use its power over the company to affect the amount of its returns.
The Group’s consolidated financial statements also include associate companies in which the members of the Sava Insurance Group (parent and subsidiaries) hold, directly or indirectly, between 20% and 50% of all voting rights. If they hold less than 20%, they can still have significant influence, provided such influence can be demonstrated.
All subsidiaries in the Sava Insurance Group are fully consolidated. The Group does not apply the exemption to exclude any of its companies from full consolidation. Interests in associates and joint ventures are accounted for in the consolidated financial statements using the equity method.
The financial year of the Group is the same as the calendar year.
Subsidiaries are fully consolidated as of the date of obtaining control and are deconsolidated as of the date that such control is lost.
Subsidiaries that manage pension funds (except Slovenia-based Sava Pokojninska Družba) and management companies that manage the funds’ assets are consolidated without the funds as under
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law such fund assets are separate from the assets of the company that manages them. Accordingly, these funds are not included in the consolidated financial statements.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Subsequently, goodwill is measured at cost less any impairment losses. The non-controlling interest is measured at the current proportionate share of the equity interests in the acquiree’s recognised net assets.
When acquiring a non-controlling interest in a subsidiary (when the Group already holds a controlling interest), the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. The Group recognises any difference between the amount by which the non-controlling interests are adjusted, and the fair value of the consideration paid directly in equity, and attributes it to the owners of the parent. The difference between cost and the carrying amount of the non-controlling interest is accounted for in equity under capital reserves.
Profits earned and losses made by subsidiaries are included in the Group’s income statement. Intra-Group transactions (receivables and liabilities, expenses and income between the consolidated companies) have been eliminated.
All companies within the Group apply uniform accounting policies. If the accounting policies of a subsidiary differ from the accounting policies applied by the Group, appropriate adjustments are made to the financial statements of such subsidiary prior to the compilation of the consolidated financial statements to ensure compliance with the accounting policies of the Group.
16.4 Significant accounting policies
Significant accounting policies applied in the preparation of the consolidated and separate financial statements are set out below. In 2023, the Group applied the same accounting policies as in 2022. The Group and the Company have applied for the first time the new standards IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments” in the reporting. The impact of the first application is described in more detail in section 16.6 – Transition to the new standards IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments”.
16.4.1 Statement of compliance
The consolidated and separate financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), and interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as adopted by the European Union. They have also been prepared in accordance with applicable Slovenian legislation (the Companies Act – ZGD-1). The “Sava Insurance Group financial control rules” lay down accounting policies that must be followed by subsidiaries when reporting for consolidation purposes. The “Rules on accounting and accounting policies of Sava Re d.d.” set down in detail the accounting policies of the Company.
Interested parties can obtain information on the financial condition and results of operations of the Sava Insurance Group by consulting the annual report. Annual reports are available on Sava Re’s website and at its registered office.
In selecting and applying accounting policies, as well as in preparing the financial statements, the management board of the parent company aims at providing understandable, relevant, reliable and comparable accounting information.
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The Company’s management board approved the audited financial statements on 15 March 2024.
16.4.2 Measurement basis
The financial statements have been prepared based on the going-concern assumption, which is further described in section 16.7.1.5 “Risk assessment and going concern assumption”.
The financial statements have been prepared on the historic cost basis, except for financial assets, including policyholder assets, which are valued on both the fair value and amortised cost basis.
16.4.3 Presentation currency, translation of transactions and items
The financial statements are presented in euros (EUR) without cents. For ease of presentation, some figures in the notes to the financial statements are rounded to million euro. The euro is the functional and presentation currency of Sava Re. The financial statements of the subsidiaries that have a functional currency different from the presentation currency are translated into euros as described below. Rounding of values may result in insignificant differences in the table totals.
All balances as at 31 December 2023 whose original value is in a foreign currency have been translated into euro at the rates of the European Central Bank (ECB) reference rate list published by the Bank of Slovenia as at 31 December 2023. Amounts in the income statements have been translated using the average exchange rate. Balances as at 31 December 2022 and 31 December 2023 have been translated at the applicable daily or monthly ECB exchange rate for each currency. If the Bank of Slovenia does not publish the exchange rate for a particular currency, the exchange rate published on Bloomberg is used. Foreign exchange differences arising on settlement of transactions and on translation of monetary assets and liabilities are recognised in the income statement. Exchange rate differences associated with non-monetary items, such as equity securities carried at fair value through profit or loss, are also recognised in the income statement, while exchange rate differences associated with equity securities classified as available for sale are recognised in the fair value reserve. Since equity items in the statement of financial position as at 31 December 2023 are translated using the exchange rates of the ECB on that day and since interim movements are translated using the average exchange rates of the ECB, any differences arising therefrom are disclosed in the equity item translation reserve.
In the consolidated financial statements, exchange rate differences resulting from the translation of a net investment in a foreign subsidiary are recognised in the equity item translation reserve.
In measuring insurance contracts under IFRS 17, an individual group of insurance contracts that generates cash flows in a foreign currency, including the contractual service margin, is treated as a monetary item. The Company and the Group have endorsed the single currency denomination approach, which means that a single currency is determined for the calculation of the contractual service margin based on the prevailing currency of cash flows. The dominant or principal currency for a contract may be determined in the underwriting process or may be determined on the basis of the prevailing cash flows of the contracts included in a group of contracts, for example, portfolios of contracts from specific foreign markets.
16.4.4 Use of major accounting estimates, sources of uncertainty
Assumptions and other sources of uncertainty relate to estimates that require management to make complex, subjective and comprehensive judgements. The most important areas that involve significant management judgement are presented below.
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•The source of uncertainty and significant risk in the measurement of insurance and reinsurance contracts is discussed in section 16.4.21.7 “Measurement of (re)insurance contracts issued”:
Estimates of future cash flows are based on deterministic forecasting models.
The adjustment of the expected cash flows for the time value of money and the financial risks associated with those cash flows is calculated using current discount rates determined using a bottom-up approach.
The Group and the Company use deterministic and stochastic models to calculate value at risk and tail value at risk, when calculating risk adjustments for non-financial risk.
•The need for impairment of goodwill is assessed using the accounting policy under section 16.4.7 “Goodwill” and note 16.8.1.
•The method for determining the need for impairment of investments in subsidiaries and associates is set out in accounting policy 16.4.13 “Investments in subsidiaries and associates” and in note 16.8.6.
•Financial investments, investment contract assets and assets held for the benefit of policyholders who bear the investment risk: The classification, recognition, measurement and derecognition, impairment of investments and fair value measurement are based on the accounting policy set out in section 16.4.14 “Financial investments”. Movement in investments and their classification are shown in note 16.8.7, whereas the associated income and expenses are shown in note 16.8.37.
Other areas of management judgement:
•The determination of the fair value of land and buildings for the purpose of impairment testing is disclosed in section 16.4.8.
•The determination of the fair value of investment property for the purpose of impairment testing is disclosed in section 16.4.12, and the fair value of investment property is disclosed in section 16.8.34.
•Intangible assets are tested for impairment at least annually. If there is any indication of impairment, the recoverable amount of the intangible asset is reviewed.
•Deferred tax assets and liabilities are recognised if Group entities plan to realise a profit in their medium-term projections. For details, see section 16.4.11; deferred tax assets and liabilities are presented in note 16.8.4.
•Receivables are impaired in line with the accounting policy set out in section 17.4.16 “Receivables”.
•The actuarial assumptions used in the calculation of employee benefits for severance pay upon retirement and jubilee benefits are described in section 16.4.19 “Other provisions”, and the sensitivity analysis of the assumptions used is presented in note 16.8.30 “Other provisions”.
•The valuation of non-current assets held for sale is set out in section 16.4.10.
16.4.5 Cash flow statement
The cash flow statement has been prepared using the indirect method. The cash flow statement has been prepared as the sum of all cash flows of all Group companies less any intra-Group cash flows. Cash flows from operating activities have been prepared based on data from the 2023 statement of financial position and income statement, with appropriate adjustments for items that do not constitute cash flows. Cash flows from financing and investing activities are shown based on actual receipts and disbursements. Items relating to changes in net current assets are shown net.
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16.4.6 Intangible assets
Intangible assets, except goodwill, are stated at cost, including any expenses directly attributable to preparing them for their intended use, less accumulated amortisation and any impairment losses. Amortisation is calculated for each item separately, on a straight-line basis. Intangible assets are first amortised upon their availability for use.
Intangible assets include computer software and software-related licences (which typically have a useful life of between 5 and 7 years). In case of recognition of a specific intangible asset (such as a customer list or contractual customer relationships), the useful life is determined for each such asset separately.
Intangible assets are tested for impairment at least annually. If there is any indication of impairment, the recoverable amount of the intangible asset is reviewed. The recoverable amount is the net value in use estimated using future cash flows. Value in use is determined based on management’s assessment.
If the recoverable amount exceeds or is equal to the carrying amount, the asset is not impaired. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount.
16.4.7 Goodwill
Goodwill arises on the acquisition of subsidiaries. In acquisitions, goodwill relates to the excess of the cost of the business combination over the acquirer’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired company. If the excess is negative (a gain on a bargain purchase), it is recognised directly in the income statement. The recoverable amount of the cash-generating unit so calculated is compared against its carrying amount, including goodwill belonging to such unit. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs of disposal and value in use. Goodwill is not amortised.
Method of calculating value in use
Value in use for each cash-generating unit is calculated using the discounted cash flow method (DCF method). The budget projections of each acquired company representing a cash-generating unit and the estimate of the long-term results achievable are used as a starting point. Value in use is determined by reference to free cash flows discounted at an appropriate discount rate.
The discount rate is determined as the cost of equity (COE), using the capital asset pricing model (CAPM). It is based on the interest rate on risk-free securities, equity premium, and insurance business prospects applying the beta factor. Added is a country risk premium and a size premium.
The elements of the discount rate have been taken from:
•The risk-free rate of return is based on the yield to maturity of 30-year German government bonds (source: Bloomberg).
•The equity risk premium has been taken from the publication of KPMG “Equity market risk premium,” Research Summary, December 2023.
•Tax rates included in the discount rate calculation are the applicable tax rates in individual countries where companies operate.
•Beta for individual industries has been calculated with reference to comparable companies of the same industry of MSCI Small Cap Europe (source: Bloomberg).
•The country risk premiums have been calculated as the difference between the yield to maturity of German long-term government bonds and a comparable local bond issued (source: Bloomberg).
•Size premium: CRSP Deciles Study, Duff & Phelps, December 2022.
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The bases for the testing of value in use are prepared in several phases: In phase one, the Company prepares five-year projections of performance results for each company as part of the regular planning process unified Group-wide. These strategic plans are approved by the parent company and confirmed by the relevant governance body. For insurance, pension and mutual fund management companies, it is additionally assessed whether the capital required for an insurance company to operate under local regulations would be fully engaged.
Premium growth and profitability was planned for foreign insurance companies in five-year projections in view of the low insurance penetration rates. Insurance penetration is expected to increase markedly due to the expected convergence of their countries’ macroeconomic indicators towards levels common in western European countries. Western Balkan markets, which have a relatively low penetration rate, are expected to see a faster growth in gross premiums than in expected GDP.
The profitability of pension companies is expected to grow, driven by increased contributions to pension funds as the result of demographic trends and at relatively fixed operating costs.
To estimate the residual value used in the calculation of the estimated value of equity, the calculation considers normalised cash flow in the last year of the forecast made using the Gordon growth model. The valuations used a long-term growth rate (g) of the risk-free rate of return (2.3%) to estimate the residual value beyond the projection period.
A cash-generating unit consists of an individual company. Movement in goodwill is discussed in detail in section 16.8.1.
Goodwill of associate companies is included in their respective carrying amount. Any impairment losses on their goodwill are treated as impairment losses on investments in associate companies.
Section 16.8.1 sets out the main assumptions for cash flow projections with a calculation of value in use.
16.4.8 Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost, including cost directly attributable to the acquisition of the asset. Subsequently, the cost model is applied: assets are carried at cost, less accumulated depreciation and any impairment losses.
Items of property, plant and equipment are first depreciated upon their availability for use. Depreciation is calculated for each item separately, on a straight-line basis. Depreciation rates are determined so as to allow the cost of property, plant and equipment assets to be allocated over their estimated useful lives.
Depreciation rates of property, plant and equipment assets
An assessment is made annually to determine whether there is any indication of impairment. If any such indication exists, an estimate of the recoverable amount of the asset is made. The recoverable amount is the higher of the value in use and fair value less costs to sell. If the recoverable amount exceeds or is equal to the carrying amount, the asset is not impaired. Value in use is assessed in terms of a cash-generating unit, with a company as a whole constituting a cash-generating unit.
Depreciation group
Rate
Land
0.0%
Buildings
1.3–2.0%
Transportation means
15.5–20.0%
Computer equipment
33.33%
Office and other furniture
10.0–12.5%
Other equipment
6.7–20.0%
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Gains and losses on the disposal of items of property, plant and equipment, calculated as the difference between sales proceeds and carrying amounts, are included in profit or loss. The costs of property, plant and equipment maintenance and repairs are recognised in profit or loss as incurred.
The cost of major repairs and replacement of part of an item of property, plant and equipment is recognised in the carrying amount of the asset, if it is probable that future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. Replaced parts are derecognised.
Investments in property, plant and equipment assets that increase future economic benefits are recognised in their carrying amount.
16.4.9 Right-of-use assets and lease liability
At inception of a contract, an assessment is made whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group reassesses whether a contract is, or contains, a lease only if the terms and conditions of the contract are changed.
At the commencement date of the lease, an asset acquired under a lease is recognised as a right-of-use asset and a lease liability. Short-term leases (of up to 12 months) and low-value leases (the cost of an asset is less than EUR 5000) are exempt from recognition as right-of-use assets and lease liabilities. Short-term and low-value leases are treated by the Group companies as lease expenses, which are recognised in the income statement and classified within operating activities in the cash flow statement.
Right-of-use assets are measured applying a cost model. On initial recognition at the commencement date of the lease, the cost of a right-of-use asset comprises the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date of the lease, any initial direct costs incurred by the lessee, and an estimate of the costs to be incurred by the lessee in dismantling and removing the underlying asset. On subsequent measurement, the initial cost of a right-of-use asset is reduced by any accumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability.
Right-of-use assets are depreciated on a straight-line basis over the lease term. If, by the end of the lease term, the lease transfers the ownership of the underlying asset to the lessee, or if the value of the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee depreciates the right-of-use asset from the commencement date until the end of the useful life of the underlying asset. Otherwise, the lessee depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee uses the lessee’s incremental borrowing rate. After initial recognition, the lease liability is measured by increasing the carrying amount to reflect interest on the lease liability and by reducing the carrying amount to reflect the lease payments made. Right-of-use assets and lease liability are recognised net of taxes.
The lessee’s incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The incremental borrowing rate is determined based on the yield to maturity of unsecured bonds given the credit rating of Sava
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Re and the maturity profile (1–30 years). To this is added a country risk premium as the difference between the credit rating of each country and that of Sava Re, which already includes the country risk of Slovenia.
The lease term is the non-cancellable period for which a lessee has the right to use an underlying asset. The lease term includes periods covered by an option to extend the lease, if the lessee is reasonably certain to exercise that option, and periods covered by an option to terminate the lease, if the lessee is reasonably certain not to exercise that option.
For leases of indefinite duration and leases with an extension option, the lease term is either contractually fixed or estimated based on the Group’s past experience and strategic priorities.
Right-of-use assets and lease liability are presented as two separate line items in the statement of financial position. In the income statement, the depreciation charge is a component of operating expenses or expenses, whereas interest expense is a component of finance costs. In the statement of cash flows, cash payments for the principal portion of the lease liability are classified within financing activities, and cash payments for the interest portion within operating activities.
A lease modification is deemed a separate lease only if it involves the addition of the right to use one or more underlying assets at a price that would apply if the additional asset were leased on a stand-alone basis. The existing liability is remeasured by taking into account the new level of the consideration for the lease, when the new asset is added, the total consideration is spread evenly over all the related underlying assets, taking into account the new lease term, and remeasuring the lease liability using the new discount rate in effect at the time of the modification.
On the other side, an adjustment is made to the right-of-use asset based on the difference between the remeasured liability and the liability before the modification. If the carrying amount of the latter is zero and there is a further reduction in the measurement of the lease liability, any remaining amount of the remeasurement is recognised in profit or loss.
16.4.10 Non-current assets held for sale
A non-current asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, its sale must be highly probable, and it must be available for immediate sale in its present condition. There must be a management commitment to sell the asset, and the sale should be completed within one year. Such assets are measured at the lower of the assets’ carrying amount or fair value less costs to sell. Non-current assets are tested for impairment at least annually. If there is any indication of impairment, the recoverable amount of the non-current asset is reviewed.
16.4.11 Deferred tax assets and liabilities
Deferred tax assets and liabilities are amounts of income taxes expected to be recoverable or payable, respectively, in future periods depending on taxable temporary differences. Temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base.
Deferred tax assets and liabilities are established from:
•temporary non-deductible impairment losses on investments in portfolio securities,
•established allowances for receivables,
•unused tax losses,
•provisions for employees and actuarial gains/losses resulting from their calculation,
•revaluation of investments to fair value,
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•the effect of changes in interest rates on the calculation of insurance and reinsurance liabilities.
Deferred tax liabilities are created for fair value adjustments and on initial recognition of intangible assets (customer lists or contractual relationships with customers) on acquisition of a new company. Deferred tax liabilities have also been created for the comparative year 2022 as a result of the transition to the new accounting standards IFRS 17 and IFRS 9.
Deferred tax assets and liabilities of a Group company are offset only if they relate to income taxes levied by the same taxation authority and the company has a legally enforceable right to set off current tax assets against current tax liabilities. In the consolidated financial statements, deferred tax assets and liabilities are offset depending on the jurisdiction.
A deferred tax asset is recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised.
16.4.12 Investment property
Investment property comprises assets not used directly for carrying out business activities but held to earn rent or to realise capital gains at disposal. Investment property is accounted for using the cost model and straight-line depreciation. Investment property is depreciated at the rate of 1.3–2.0%. The basis for calculating the depreciation rate is the estimated useful life. All leases where the Group companies act as lessors are cancellable operating leases. Lease payments (rentals) received are recognised as income on a straight-line basis over the lease term. A cash-generating unit consists of an individual property. An assessment is made annually as to whether there is an indication of impairment of investment property. If any such indication exists, an estimate of the recoverable amount of the asset is made. The recoverable amount is the higher of the value in use and the net selling price less costs to sell. If the recoverable amount exceeds or is equal to the carrying amount, the asset is not impaired.
16.4.13 Investments in subsidiaries and associates
Investments in subsidiaries are measured at cost, less any impairment losses. Subsidiaries are entities in which the Company holds more than 50% of voting rights and which the Company controls, i.e. has the power to control their financial and operating policies so as to obtain benefits from their activities. Subsidiaries are included in the consolidated financial statements using the full consolidation method.
Associates are entities in which the Company holds between 20% and 50% of voting rights or over which the Company has significant influence. Associates are accounted for using the equity method.
Impairment
Impairment testing in Group companies and associates is carried out at least on an annual basis. Pursuant to IAS 36, the controlling company, when reviewing whether there are indications that an asset may be impaired, considers external (changes in market or legal environment, interest rates, elements of the discount rate, capitalisation) as well as internal sources of information (business volume, manner of use of asset, actual versus budgeted performance results, decline in expected cash flows and such like).
If impairment is necessary, an impairment test is carried out for each individual investment by calculating the recoverable amount of the cash-generating unit based on the value in use. Cash flow projections used in these calculations are based on the business plans approved by the management for the period until and including 2028. The discount rate used is based on market rates adjusted to
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reflect company-specific risks. The recoverable amount of each cash-generating unit so calculated was compared to its carrying amount.
Main assumptions for cash flow projections with calculations of value in use
Discounted cash flow projections are based on the Group companies’ business plans covering a 5-year period (business plans for individual companies for the period 2024−2028).
Growth in premiums earned by insurance companies reflects the growth expected in their insurance markets, as well as the characteristics of their portfolios (a small share of non-motor business). In all their markets, insurance penetration is relatively low. However, insurance penetration is expected to increase due to the expected convergence of their countries’ macroeconomic indicators towards EU levels. Social inflation is also expected to rise, i.e. claims made against insurance companies are expected to become more frequent and higher. Costs are expected to lag slightly behind premiums owing to expected business process optimisation in subsidiaries. Business process optimisation will thus contribute to the growth in net profits.
Growth in pension companies’ revenues is due to increased contributions to pension funds as a result of demographic trends, at relatively fixed operating costs, which may lead to greater profitability.
The discount rate is determined as the cost of equity (COE), using the capital asset pricing model (CAPM). It is based on the risk-free interest rate and equity premium, as well as prospects for the relevant business. Added is a country risk premium and a size premium.
Assessments as to whether there is any indication of impairment of investments in subsidiaries are made using the same model as for goodwill. See section 16.4.7 “Goodwill” for more information on the assumptions used.
16.4.14 Financial investments
Financial investments and financial liabilities are classified, recognised and measured in accordance with IFRS 9 “Financial Instruments”, as further described as follows.
16.4.14.1 Classification
In accordance with IFRS 9, the Group and the Company classify financial assets on the basis of both their business models for managing the financial assets and the contractual cash flow characteristics of their financial asset. On initial recognition, a financial asset is classified into one of the following measurement categories:
•at amortised cost (AC),
•at fair value through other comprehensive income (FVOCI), and
•at fair value through profit or loss (FVTPL).
The business model for managing financial assets reflects the management of a group of financial assets to achieve certain objectives. The management of such a group of financial assets is based on:
•the nature of the company’s liabilities backed by an investment portfolio;
•how the performance of a business model and the financial assets held within that business model are evaluated and reported to the key management personnel;
•the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way in which those risks are managed; and
•how managers of the business are compensated.
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The business model is determined based on a consideration of the main factors mentioned above that influence the purpose of achieving the asset management objectives.
The following business models are defined:
•a business model whose objective is to hold assets in order to collect contractual cash flows (the hold-to-collect model),
•a business model whose objective is to both collect contractual cash flows and sell financial assets (the hold-to-collect-and-sell model), and
•other business models.
For the purpose of classifying financial assets in terms of their contractual cash flow characteristics (the SPPI test), the principal amount represents the fair value of the financial asset at initial recognition. For the purpose of classifying financial assets in terms of their contractual cash flow characteristics (the SPPI test), interest consists of consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.
A financial asset is measured at amortised cost (AC) if both of the following conditions are met:
•the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and
•the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset is measured at fair value through other comprehensive income (FVOCI) if both of the following conditions are met:
•the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
•the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset is measured at fair value through profit or loss (FVTPL) if:
•it is a debt instrument and does not fall into one of the above measurement categories (AC/FVOCI);
•it is an equity instrument and is not designated for measurement at fair value through other comprehensive income (FVOCI option);
•it eliminates or significantly reduces an “accounting mismatch”;
•it is a derivative.
Assets measured at amortised cost in accordance with IFRS 9 are deposits with a maturity of more than three months, loans and debt securities classified as hold to collect at the date of transition to IFRS 9 that the Group and the Company will hold to maturity.
Upon adoption of IFRS 9, the Group and the Company classify debt instruments into the hold to collect and sell business model. The classification of an investment in this business model is subject to the SPPI test, which confirms that the contractual cash flows are solely payments of principal and interest.
It follows from the above that the Group and the Company have the majority of their debt securities classified as financial assets measured at fair value through other comprehensive income (FVOCI).
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Under IFRS 9, equity instruments are classified as at fair value through profit or loss, but the option to measure at fair value through other comprehensive income (FVOCI) exists for shares and participations in accordance with the standard. The Group companies have equity instruments classified mainly in the fair value through profit or loss (FVTPL) group.
Other types of investments, such as units in collective investment undertakings, ETFs, alternative funds, etc. are classified as measured at fair value through profit or loss (FVTPL) under IFRS 9.
Classification of financial liabilities
The Group and the Company classify financial liabilities as subsequently measured at amortised cost. The Group and the Company do not have any financial liabilities that are irrevocably designated as at fair value through profit or loss at initial recognition as this results in more relevant information because it eliminates or significantly reduces a measurement or recognition inconsistency (accounting mismatch) that would otherwise arise from measuring assets or liabilities or recognising the related gains and losses on different bases.
16.4.14.2 Recognition, measurement and derecognition
Initial recognition
The Group and the Company recognise a financial asset or a financial liability in their statements of financial position when, and only when, the Group and the Company become party to the contractual provisions of the financial instrument. When the Group and the Company first recognise a financial asset, it is classified and measured in accordance with the Group’s and the Company’s accounting policies.
A regular way purchase or sale of a financial asset is recognised and derecognised using trade date accounting.
Except for trade receivables, at initial recognition, the Group and the Company measure a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
After initial recognition, the Group and the Company measure a financial asset at:
•amortised cost,
•fair value through other comprehensive income, or
•fair value through profit or loss.
The Group and the Company apply the impairment requirements of the standard to financial assets that are measured at amortised cost and financial assets that are measured at fair value through other comprehensive income.
After initial recognition, the Group and the Company measure a financial liability at:
•amortised cost, or
•fair value through profit or loss.
Amortised cost measurement
Financial assets measured at amortised cost are measured at amortised cost using the effective interest method. They are stated at the principal amount outstanding, plus any unpaid interest and fees, less any impairment. Interest income is calculated using the effective interest method. This is
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calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:
a.purchased or originated credit-impaired financial assets. For those financial assets, the Group and the Company apply the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition;
b.financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For these financial assets, the Group and the Company apply the effective interest rate to the amortised cost of the financial asset in subsequent reporting periods.
The effective interest rate is determined at the time of purchase of the investment. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability.
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with the accounting policies, the Group and the Company recalculate the gross carrying amount of the financial asset and recognise a modification gain or loss in profit or loss.
The Group and the Company directly reduce the gross carrying amount of a financial asset when they have no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. A write-off constitutes a derecognition event.
Derecognition
The Group and the Company derecognise a financial asset when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred and the transfer qualifies for derecognition in accordance with the Group’s and the Company’s accounting policies. On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.
The Group and the Company remove a financial liability (or part of a financial liability) from their statements of financial position when, and only when, it is extinguished, i.e. the contractual obligation is discharged, cancelled or expires. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
16.4.14.3 Impairment of financial investments
General approach
The Group and the Company apply the expected credit loss concept under IFRS 9, which is based on the recognition and measurement of an allowance for expected credit losses for financial assets measured at amortised cost or fair value through other comprehensive income (bonds, deposits, loans granted). In the case of a financial asset measured at fair value through other comprehensive income, an allowance for expected credit losses is recognised in other comprehensive income and does not result in a reduction in the carrying amount of the financial asset in the statement of financial position.
The Group and the Company determine the expected credit loss by recognising and measuring a loss allowance for expected credit losses, which is calculated based on the classification into one of three stages:
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Stage 1: for assets for which credit risk has not increased significantly since initial recognition, expected 12-month credit losses are calculated.
Stage 2: for assets for which credit risk has increased significantly since initial recognition, lifetime expected credit losses are calculated.
Stage 3: for assets that are credit-impaired or in default, where the lifetime expected credit loss is calculated and considers the appropriate probability of default as well as expected cash flows stemming from proceeds from sale, etc., but at the net carrying amount (the gross carrying amount less any impairment loss).
At each investment valuation, the Group and the Company perform a classification into stages based on the information obtained on the change in the credit risk of each issuer. In order to assess significant increases in credit risk, the Group and the Company regularly monitor and analyse any changes in external credit ratings obtained from external credit assessment institutions (ECAIs). The first measure of increased credit risk since initial recognition used by the Group and the Company is a three-notch downgrade and reclassification of the investment from investment grade to speculative grade.
In addition, the Group and the Company use an internal model to assess external credit ratings or use internal credit ratings to identify increased credit risk, monitor the zero-volatility spread (Z-spread) of investments and other available qualitative information when an external credit rating is not available.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group and the Company measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. For assets for which credit risk has increased significantly since initial recognition, lifetime expected credit losses are calculated.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument.
Expected credit losses are determined based on historical data on recoverability, expected macroeconomic trends and certain other factors that indicate the expected solvency of a debtor. The main input parameters for determining credit losses are the probability of default (PD), the loss given default (LGD) and the exposure at default (EAD). The expected credit loss is the product of the expected probability of default, the expected loss given default and the expected exposure at the time of default.
The Company and the Group obtain the PD parameter from Moody’s rating reports, where long-term averages of default rates and transition matrices from initial to final rating over a given period can be obtained. The reports are separate for corporate and government bonds, and the data is updated once a year. The underlying data have been adjusted based on expectations for the economic situation, thus achieving the forward-looking approach required by the standard.
The standard provides no guidance on how to determine the loss given default (LGD) or the recovery rate (RR), which is why the Group and the Company follow established practice and use data provided by credit rating agencies annually calculated based on historical data. Such reports contain a section on corporate and one on government bonds. Due to ease of access and the comprehensive presentation of default rates in reports, the Group’s and the Company’s methodology has focused on the credit rating agency Moody’s, while comparative information can also be obtained from the reports prepared by S&P Global Ratings.
Definition of default
In determining counterparty default risk, the Group and the Company consider criteria such as that at least one of the rating agencies assesses that the issuer or a specific issue of financial instruments is in default (excluding technical default, i.e. default by the borrower) or 30 days past due for bonds and 90 days past due for loans with respect to the payment of principal or interest.
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Write-off
The Group and the Company write off an asset if there is no reasonable expectation that the financial asset will be recovered, in whole or in part. A write-off is treated as a derecognition event.
16.4.14.4 Gains and losses
Any gain and loss arising from a change in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss in the period in which it arises.
Dividends are recognised in profit or loss only when:
•the entity’s right to receive payment of the dividend is established;
•it is probable that the economic benefits associated with the dividend will flow to the entity, and
•the amount of the dividend can be measured reliably.
At initial recognition, the Group and the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is neither held for trading nor contingent consideration recognised in other comprehensive income. If an entity makes this election, it recognises in profit or loss dividends from that investment.
A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the financial asset is derecognised, reclassified, through the amortisation process or in order to recognise impairment gains or losses.
The Group and the Company recognise a gain or loss on a financial liability that is designated as at fair value through profit or loss as follows:
•the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income; and
•the remaining amount of change in the fair value of the liability is presented in profit or loss unless the treatment of the effects of changes in the liability’s credit risk may create or enlarge an accounting mismatch in profit or loss.
A gain or loss on a financial asset measured at fair value through other comprehensive income is recognised in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognised or reclassified. When a financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. Interest calculated using the effective interest method is recognised in profit or loss.
16.4.14.5 Determination of fair values
The Group and the Company measure all financial instruments at fair value, except for deposits, shares not quoted in any regulated market that do not represent a significant portion of the investment portfolio, loans (assuming that their carrying amount is a reasonable approximation of fair value) and financial instruments measured at amortised cost. The fair value of investment property, and land and buildings used in business operations and the fair value of financial instruments measured at amortised cost are set out in note 16.8.34.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is
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based on the presumption that the transaction to sell the asset or transfer the liability takes place either (i) in the principal market for the asset or liability, or (ii) in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Group and the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Valuation techniques are used that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
On the valuation date, the fair value of a financial investment is established by determining the price in the principal market based on:
•for stock exchanges: the quoted closing price on the stock exchange on the valuation date or on the last trading day of the stock exchange on which the investment is listed;
•for the OTC market: the quoted CBBT closing bid price or, if unavailable, the Bloomberg BVAL bid price, which may not be more than 15 days old.
•the price calculated based on an internal valuation model or yield curve valuation.
For the valuation, the Group and the Company use the closing price on the stock exchange or the published BID bid price for debt investments (according to the defined Bloomberg methodology) as the unadjusted quoted price, while the BVAL bid price calculated on the basis of the internal valuation model or the yield curve valuation do not represent unadjusted quoted prices.
The BVAL bid price (based on the defined Bloomberg methodology) represents a price that is not quoted but calculated based on directly and indirectly observable market inputs. When calculating the price using a valuation model, the Group and the Company first use directly and indirectly observable market inputs. If these are not available, the Group and the Company determine the price of a financial investment using a model with unobservable inputs, as defined in IFRS 13.86 to IFRS 13.90.
To assess the quality of the BVAL rate, the Company uses the BVAL Score, the number of direct observations and the proportion and age of quotes.
Assets and liabilities measured or disclosed at fair value in the financial statements are measured and presented in accordance with the IFRS 13 fair-value hierarchy that categorises the inputs of valuation techniques used to measure fair value into three levels.
Assets and liabilities are classified based primarily on the availability of market information, which is determined by the relative levels of trading identical or similar instruments in the market, with a focus on information that represents actual market activity or binding quotations of brokers or dealers.
Investments measured or disclosed at fair value are presented in accordance with the levels of fair value, which categorises the inputs used to measure fair value into the following three levels of the fair value hierarchy:
•Level 1: financial investments for which fair value is determined based on quoted prices (unadjusted) in active markets for identical financial assets that the Company can access at the measurement date. This level includes the prices of debt investments with CBBT prices and those BVAL prices that are composed exclusively of direct observations with at least 90% binding quotes and where at least 3 binding quotes must not be more than one day old.
•Level 2: financial investments whose fair value is determined using data that are directly or indirectly observable other than quoted prices included within level 1. Pursuant to IFRS 13.82, level 2 data may include:
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•quoted prices for similar financial investments in active markets,
•quoted prices for identical or similar financial investments in markets that are not active,
•inputs other than quoted prices that are observable for financial investments,
•market-corroborated inputs.
This level includes BVAL prices of debt investments that consist of at least 90% direct observations, where market inputs are used for a directly or indirectly identical or similar asset, and where at least 3 quotes must be no more than 15 days old.
•Level 3: financial investments for which observable market data is not available. Fair value is thus determined based on valuation techniques using inputs that are not directly or indirectly observable in the market. The Company classifies securities valued using an internal model that does not take into account level 2 inputs into this level.
This level includes BVAL prices of debt investments that do not meet the criteria for level 1 or level 2 and for which the inputs for the model-based valuation are not readily and objectively determinable and available to the company.
The Group and the Company classify as level-3 investments their investments in alternative funds, such as real-estate funds, infrastructure funds, private debt funds, private equity funds and similar. There are no market prices available for such investments; therefore, valuation based on available market data is not possible.
In accordance with IFRS 13.97 and accounting policies, the Group and the Company categorise within the fair value hierarchy also those financial investments that are not measured at fair value in the statement of financial position but for which the fair value is disclosed.
The policy for determining when transfers between levels of the fair value hierarchy are deemed to have occurred is disclosed and is fully complied with. The policy on the timing of recognising transfers is the same for transfers into the levels and out of the levels. Examples of policies include: (a) the date of the event or change in circumstances that caused the transfer; (b) the beginning of the reporting period; (c) the end of the reporting period. The Group and the Company review quarterly the categorisation of investments into the three levels of the fair value hierarchy. To this end, they apply the rules for determining the fair value set out under note 16.8.34. If the conditions for classification change, financial investments are reclassified into the relevant level.
The following table shows the classification of financial investments according to the inputs used and market activity.
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Determination of fair values
Asset class / principal market
Level 1
Level 2
Level 3
Debt securities
OTC market
•Debt securities measured based on the CBBT price in an active market.
•Debt securities valued at the BVAL price if no CBBT price exists and which have a BVAL price composed exclusively of direct observations, with at least 90% of firm quotes, with at least 3 firm quotes no more than one day old.
•Debt securities measured based on the CBBT price in an inactive market.
•Debt securities valued at the BVAL price if no CBBT price is available and where the BVAL price consists of at least 90% direct observations, with at least 3 quotes no more than 15 days old.
•Debt securities measured using an internal model based on level 2 inputs.
• Debt securities measured using an internal model that does not consider level 2 inputs.
• Debt securities measured using BVAL prices, if no CBBT price is available and the BVAL price does not meet the criteria for level 1 or 2 and for which the inputs for the model-based valuation are not readily and objectively determinable and available to the company.
Stock exchange
•Debt securities measured based on stock exchange prices in an active market.
•Debt securities measured based on stock exchange prices in an inactive market.
•Debt securities measured using an internal model based on level 2 inputs.
•Debt securities measured using an internal model that does not consider level 2 inputs.
Quoted portfolio shares
Stock exchange
•Shares measured based on prices in an active market.
•Shares measured based on prices in an inactive market.
•Shares with unavailable market prices measured using an internal model based on level 2 inputs.
•Shares are measured using an internal model that does not consider level 2 inputs.
Mutual funds
•Mutual funds measured at the quoted unit value on the measurement date.
Alternative funds
•The fair value is determined based on the valuation of individual projects for which discounted cash flow methods are used.
Deposits with a maturity of more than 3 months and loans
•Measured at amortised cost.
16.4.15 Investment contract assets and liabilities
Contracts of homogeneous groups are classified as investment contracts if they bear significant financial risk and are accounted for in accordance with IFRS 9. Investment contract assets and liabilities only include the investment contract assets and liabilities of the company Sava Pokojninska, which manages pension funds. Investment contract assets comprise the assets supporting the liability funds “My Life-Cycle Funds” for the transaction of voluntary supplementary pension business. Valuation is described in section 16.4.14 “Financial investments”. Classification and valuation of assets is presented in detail in note 16.8.8. Investment contract liabilities are liabilities arising out of pension insurance business under group and individual plans for voluntary supplementary pension insurance, for which the administrator maintains personal accounts for pension plan members. These are liabilities relating to the voluntary supplementary pension life liability fund for premiums paid, guaranteed returns and additional liabilities to cover the difference between the actual return and the guaranteed return. Investment contract liabilities are presented in note 16.8.8.
Sava Pokojninska initially recognises investment property assets in respect of pension fund business under investment contract assets using the cost model, plus any transaction costs. The following
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measurements are made using the fair value model due to regulatory requirements and the fact that these are pension fund assets. An assessment is made annually as to whether there is an indication of impairment of investment property. If such indications exist, the process of assessing the value is initiated. At least every three years, appraisals are carried out by certified real estate appraisers licensed by the Slovenian Institute of Auditors. The amounts of investment property in investment contract assets are not adjusted for consolidation purposes.
16.4.16 Receivables
16.4.16.1 Recognition of receivables
Initial recognition of receivables is based on invoices or other credible documents (e.g. interest statement). Receivables comprise receivables from accrued interest receivable, prepayments receivable and other receivables that can be allocated to individual debtors. In the statement of financial position, receivables are stated at amortised cost. Depending on the significance of each type of receivable in the companies’ financial statements, an allowance is recognised for expected credit losses based on the debtor’s expected future solvency in accordance with IFRS 9. Impairment is recognised using a simplified approach where the loss allowance is measured as an amount equal to the lifetime expected credit losses. The Group companies do not recognise impairment losses on current receivables and on receivables that are regularly paid by the debtor.
The Group companies have pledged no receivables as security.
16.4.16.2 Receivables write-offs
Write-offs of receivables require appropriate supporting documents, such as a court decision, bankruptcy order or other document evidencing that the company has lost its legal title, or in cases where it is evident that collection is not meaningful due to excessive costs of the proceedings.
16.4.17 Other assets
Other assets consist of capitalised short-term accruals and deferrals, namely short-term deferred costs.
16.4.18 Cash and cash equivalents
The statement of financial position and cash flow item “cash and cash equivalents” comprises:
•cash, including cash in hand, cash in bank accounts of commercial banks and other financial institutions, and overnight deposits, and
•cash equivalents, including demand deposits and deposits with an original maturity of up to three months.
16.4.19 Equity
Equity consists of:
•share capital, i.e. the par value of paid-up ordinary shares expressed in euro;
•capital reserves comprise amounts paid up in excess of the par value of shares;
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•profit reserves comprise reserves provided for in the articles of association, legal reserves, the capital redemption reserve and other profit reserves;
•treasury shares acquired in line with a share repurchase programme published on the Company’s website, at https://www.sava-re.si/en-si/investor-relations/our-share/;
•accumulated other comprehensive income – revaluation of investments, changes in interest rates used to calculate insurance and reinsurance contract liabilities, and actuarial gains and losses on provisions for employees;
•retained earnings;
•net profit or loss for the year;
•foreign currency translation reserve;
•non-controlling interest.
Reserves provided for in the articles of association are used:
•cover the net loss that cannot be covered (in full) out of retained earnings and other profit reserves, or when these two sources of funds are insufficient to cover the net loss in full (an instrument of additional protection of tied-up capital);
•to increase share capital;
•to regulate the dividend policy.
Pursuant to the Companies Act, the Company’s management board has the power to allocate up to half of the net profit to other reserves.
16.4.20 Subordinated liabilities
Subordinated liabilities of the Group and the Company represent a long-term liability of the Group and the Company in the form of a subordinated bond to be used for general corporate purposes of the Sava Insurance Group and to optimise its capital structure and are valued at amortised cost. Details are set out in note 16.8.29.
16.4.21 Insurance contracts
16.4.21.1 Description of products
The Group issues the following types of insurance contracts:
•Non-participating life insurance contracts measured using the general approach, which include:
-fixed and decreasing term life insurance contracts purchased with a single premium or instalments and
-endowment policies.
•Direct participating life insurance contracts comprising:
-Life insurance contracts linked to units of mutual funds or internal funds, in some cases with an interest-rate guarantee, measured using the variable fee approach.
-Hybrid life insurance contracts, part of which is linked to units of mutual funds, measured using the variable fee approach, and part of which is an endowment insurance contract with an interest-rate guarantee, which in some cases is valued separately using the general approach.
•Life insurance contracts with indirect or discretionary participation features, which include:
-Endowment life insurance contracts or whole life insurance contracts with guaranteed sums assured and participation features. The cash flows of these insurance contracts
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depend on the performance of the life insurance portfolio and/or the returns on the underlying items, where the underlying items are not specified in the insurance contract. The Group measures these contracts using the modified general approach.
•Investment contracts with discretionary participation features
-These contracts entitle the policyholder to additional amounts based on the performance of the underlying items. These amounts are at the discretion of the Group and are expected to represent a significant proportion of the distributions. Such contracts are measured using the modified general approach.
•Immediate annuities in accordance with ZPIZ-2, which include:
-annuities with a guaranteed interest rate and, in some cases, a guaranteed annuity payout period, measured using the modified general approach.
•Non-life insurance contracts, which include:
-motor, property, miscellaneous financial loss, liability, marine and aircraft, goods in transit, credit, suretyship, accident and supplementary health insurance, with multi-year accident, credit, suretyship, construction and erection contracts of EU-based companies measured using the general approach and all other contracts measured using the premium allocation approach.
•Reinsurance contracts issued, including:
-quota share, surplus, excess of loss and stop loss reinsurance covers. Reinsurance contracts issued are primarily measured using the general approach, and partly the premium allocation approach.
The Group and the Company also have reinsurance contracts that transfer the assumed risks to reinsurers with the aim of reducing risk. These include quota share, surplus, excess of loss and stop loss reinsurance covers. These contracts are measured using the general approach for reinsurance contracts.
16.4.21.2 Classification of insurance contracts
The Group and the Company apply IFRS 17 to:
•insurance contracts issued, including reinsurance contracts issued,
•reinsurance contracts held by the Group and the Company, and
•investment contracts with discretionary participation features.
All references in IFRS 17 to insurance contracts issued also apply to reinsurance contracts issued, to insurance contracts acquired by the Group and the Company in a transfer of insurance contracts or a business combination, and to reinsurance contracts held by the Group and the Company (unless it is specifically stated that a particular section applies only to (re)insurance contracts issued).
A contract is deemed an insurance contract if the issuer accepts significant insurance risk from another party by agreeing to compensate the other party if it is adversely affected by a specified uncertain future event (an insured event).
A contract that transfers significant insurance risk from the Group or the Company to a reinsurance company is a reinsurance contract held by the Group or the Company.
In the following, the Company’s and the Group’s inward reinsurance contracts are referred to as insurance contracts and the outward reinsurance contracts are referred to as reinsurance contracts. They are presented in the same way in the financial statements.
The Group also issues insurance contracts with direct participation features for which, at the inception of cover:
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•the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
•the Group expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items;
•The Group expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in the fair value of the underlying items.
An investment contract with discretionary participation features is a financial instrument that provides a particular investor with the contractual right to receive, as a supplement to an amount not subject to the discretion of a Group company, additional amounts:
•that are expected to be a significant portion of the total contractual benefits;
•the timing or amount of which are contractually at the discretion of the issuer; and
•that are contractually based on:
-the returns on a specified pool of contracts or a specified type of contract;
-realised and/or unrealised investment returns on a specified pool of assets held by a Group company; or
-the profit or loss of the Group company issuing the contract.
Insurance risk is significant if, and only if, the insured event could cause the issuer having to pay additional amounts that are significant in any single scenario, excluding scenarios that have no commercial substance (i.e., no discernible effect on the economics of the transaction), even if the insured event is extremely unlikely or if the expected (i.e., probability-weighted) present value of the contingent cash flows is a small proportion of the expected present value of the remaining cash flows from the insurance contract. Underwriting risk is considered significant to the Group and the Company if the Group and the Company bear at least 5% of the additional payouts in the event of an insured event.
The assessment of whether the above conditions and criteria are met for an insurance contract, an insurance contract with direct participation features or an investment contract with discretionary participation features is made on a contract by contract basis at the time the contract is concluded. In doing so, the Group and the Company take into account all their substantive rights and obligations under the contract.
16.4.21.3 Combination of contracts and distinct elements of a contract
A set or series of insurance contracts with the same or a related counterparty may achieve, or be designed to achieve, a common commercial effect. In order to report the substance of such contracts, it may be necessary to treat the set or series of contracts as a whole. For example, if the rights or obligations in one contract do nothing other than entirely negate the rights or obligations in another contract entered into at the same time with the same counterparty, the combined effect is that no rights or obligations exist. The Group and the Company have identified some contracts that should be measured together.
An insurance contract may contain, in addition to the insurance component, one or more components that would be within the scope of another standard if they were separate contracts. These components include:
•an investment component,
•a service component,
•embedded derivatives.
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The Group and the Company separate the above components from a host insurance contract if they are distinct from the contract, applying the relevant other IFRSs to the measurement of the separate component.
The Group and the Company have not identified any identifiable derivatives, investment components or service components.
An investment component exists if an insurance contract requires the Group or the Company to repay an amount to a policyholder in all circumstances, regardless of whether an insured event occurs.
An investment component is distinct from a host insurance contract if, and only if, both of the following conditions are met:
•the investment component and the insurance component are not highly interrelated;
•a contract with similar terms and conditions is or could be sold separately in the same market or jurisdiction by the Group or the Company issuing the insurance contract or by third parties. In making this determination, the Company and the Group take into account all information reasonably available in making this determination.
An investment component and an insurance component are highly interrelated if, and only if:
•the company is unable to measure one component without considering the other. If the value of one component varies with the value of the other, the Group and the Company apply IFRS 17 to account for the combined investment and insurance component; or
•the policyholder is unable to benefit from one component unless the other is also present. If the lapse or maturity of one component in a contract causes the lapse or maturity of the other, the Company applies IFRS 17 to account for the combined investment component and insurance component.
The Group and the Company issue contracts with an investment component. Examples include certain life insurance policies that pay a surrender value, annuities with a guaranteed payout period and reinsurance contracts with a sliding-scale or profit commission. The investment and insurance components of such contracts are closely related because the Group and the Company cannot measure the insurance contract without considering the investment component and vice versa. Therefore the investment component is not distinct.
The service component refers to the transfer of goods or services that are not insurance-related and, as such, are not dependent on the occurrence of an insured peril (occurrence of a claim). A service component is distinct if the policyholder can benefit from the good or service either on its own or together with other resources readily available (sold separately or already owned by the policyholder).
A good or service other than an insurance contract service that is promised to the policyholder is not distinct if:
•the cash flows and risks associated with the good or service are highly interrelated with the cash flows and risks associated with the insurance components in the contract; and
•the entity provides a significant service in integrating the good or service with the insurance components.
The Group issues contracts that include derivatives, but these instruments are closely related to the host insurance contract and are therefore measured using IFRS 17. Examples of such derivatives include:
•life insurance contracts with a guaranteed minimum return in the event of the insured’s death: These contracts have an option for payment of a guaranteed amount to the policyholder in the
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event of the insured’s death. As the payment of the guaranteed amount is contingent on an insured event (death) and represents a loss to the contract holder, the guarantee itself meets the definition of an insurance contract. The payment of the guaranteed amount is therefore not distinct and the entire contract is measured using IFRS 17.
•Savings-linked life insurance contracts include a surrender option, where the policyholder is paid a fixed surrender value set at the time the contract is made. This option is closely related to the host insurance contract because the insurance cover ceases on surrender and therefore the contract as a whole is measured using IFRS 17.
•Some direct participation contracts contain an option where the surrender value varies with changes in the underlying items, but the value of the option is closely related to the value of the insurance contract and therefore the whole contract is measured using IFRS 17.
The Group and the Company also consider whether a single insurance contract should be split into multiple insurance components to be treated as separate contracts to reflect the substance of the transaction.
In determining whether the components of an insurance contract should be recognised and measured separately, the Group and the Company consider whether there is interdependence between the different risks covered, whether the components of an insurance contract extinguish independently of each other and whether the components can be priced and sold separately.
When the Group and the Company enter into one legal contract with different insurance components that operate independently of each other, the insurance components are recognised and measured separately using IFRS 17. The Group has identified non-life insurance contracts where the insurance components are distinguishable by homogeneous risk groups if they meet the conditions for distinguishing the components of insurance contracts. The Group has also identified life insurance contracts where the insurance components may be separated according to different insurance and economic risks if the insurance contract as a whole does not present the economic impact in a credible way.
16.4.21.4 Level of aggregation of insurance contracts
Portfolios of insurance contracts comprise contracts subject to similar risks and managed together. Contracts within the same product line, as defined for management purposes, are expected to be subject to similar risks and are therefore grouped together in a single portfolio. Where contracts are issued by different Group companies, they are managed separately by each company and are therefore grouped into different portfolios. If the Group and the Company consider that the legal form of insurance contracts does not reflect their economic substance, homogeneous groups of risks arising from those insurance contracts are considered in the construction of portfolios.
Individual portfolios are divided into groups of insurance contracts according to their profitability and the year in which the contract was written. Contracts issued more than one year apart should not be included in the same group of insurance contracts.
Portfolios are categorised by profitability as:
•a group of contracts that are onerous upon initial recognition (unprofitable);
•a group of contracts that, on initial recognition, are highly unlikely to become onerous subsequently, if any; and
•a group of the remaining contracts, if any.
The determination of whether a contract or group of contracts is onerous is based on expectations at the date of initial recognition. The Group determines the appropriate level at which reasonable and
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supportable information is available to assess whether contracts are onerous at initial recognition and whether it is probable that contracts that are not onerous at initial recognition will become onerous subsequently. In the absence of such information, the Group assesses each contract individually.
Insurance contracts are classified into groups of insurance contracts on initial recognition and are not subsequently reassessed.
Reinsurance contracts are divided into segments in the same way as insurance contracts, except that a reinsurance contract cannot be unprofitable (in which case there is a net gain or net loss on initial recognition). In identifying groups of reinsurance contracts, the Group and the Company apply the rule that each reinsurance contract issued or held is a separate portfolio because of the different characteristics of the individual reinsurance contracts.
For contracts that are measured using the premium allocation approach (PAA), the Group and the Company determine that the contracts are not onerous unless facts and circumstances indicate otherwise. If the facts and circumstances indicate that certain contracts are onerous on initial recognition, the Group performs a quantitative assessment. If the assessment indicates that such contracts are onerous, the Group classifies such contracts as onerous and increases the liability for remaining coverage by the amount of the identified loss, which is recognised immediately in profit or loss.
All IFRS 17 measurements are made at the level of groups of insurance contracts.
16.4.21.5 Initial recognition
Insurance contracts
The Group recognises a group of insurance contracts it issues from the earliest of the following:
•the beginning of the coverage period of the group of contracts;
•the date when the first payment from a policyholder in the group becomes due; and
•for a group of onerous contracts, when the group becomes onerous.
A group of insurance contracts is recognised upon recognition of the first contract that is part of the group. An insurance contract is included in a group of insurance contracts based on portfolio, annual cohort and profitability when it meets the recognition criteria in paragraph 1 of this section.
Reinsurance contracts
Reinsurance contracts held by the Group and the Company are recognised on the earlier of the following dates:
•the beginning of the coverage period of a group of reinsurance contracts held by the Group or the Company; and
•the date on which the underlying group of onerous insurance contracts is recognised if, on or before that date, a related reinsurance contract from the group of reinsurance contracts held by the Group and the Company has been entered into.
Notwithstanding the above provision, the recognition is delayed for a reinsurance contract that provides proportionate coverage until the date on which any underlying insurance contract is initially recognised if that date is later than the beginning of the coverage period of the reinsurance contract.
Insurance and reinsurance contracts acquired in a transfer of contracts or a business combination are recognised on the date of the transaction.
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16.4.21.6 Contract boundary
A group of insurance contracts is measured by including all future cash flows that are within the boundary of the insurance contracts in the group.
In determining which cash flows are within the contractual boundary, the Group and the Company consider the substantive rights and obligations arising under the insurance contracts, laws and regulations.
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Group or the company can compel the policyholder to pay the premiums or in which the Group or the Company have a substantive obligation to provide services to the policyholder under the insurance contract.
Cash flows are within the boundary of a reinsurance contract if the contract holder can require the reinsurer to provide cover and other services or if there is a material obligation on the contract holder to pay a reinsurance premium to the reinsurer.
Liabilities or assets that are outside the boundary of recognised insurance contracts and relate to future contracts are shown separately in the statement of financial position.
In estimating the expected future cash flows, the Group and the Company use their judgement about the future behaviour of policyholders in exercising the options available to them, including the potential for surrender values to be paid.
The Group and the Company assess the contractual boundary at initial recognition and at each subsequent reporting date to incorporate the effect of changes in circumstances on the substantive rights and obligations.
16.4.21.7 Measurement of (re)insurance contracts issued
All IFRS 17 measurements are made at the level of groups of insurance contracts.
The basic method of measuring insurance and reinsurance contracts under IFRS 17 is the general measurement model or building block approach (BBA). The standard also permits the use of a simplified measurement approach in some cases called the premium allocation approach (PAA). The standard requires the mandatory use of the variable fee approach (VFA) in the case of a group of insurance contracts with direct participation features and when the application criteria specified in the standard are met. Reinsurance contracts cannot be valued using the variable fee approach. The Group companies use all of the above approaches to value insurance and reinsurance contracts. The Company uses the general measurement model and, to a lesser extent, the premium allocation approach.
A description of the different measurement approaches is given in the following.
16.4.21.7.1 Measurement of insurance and reinsurance contracts issued using the BBA and VFA approaches
16.4.21.7.2 Initial measurement by BBA and VFA
On initial recognition, a group of insurance contracts is measured as the sum of:
•fulfilment cash flows, which comprise:
-estimates of future cash flows,
-an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows,
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-a risk adjustment for non-financial risk (RA),
•the contractual service margin (CSM).
Estimates of future cash flows
Estimates of expected cash flows represent an explicit, unbiased and probability-weighted estimate of future cash flows adjusted for the time value of money and associated financial risks. They include cash flows attributable to the fulfilment of existing insurance contracts and also expectations about the future behaviour of the insured persons.
Estimates of future cash flows reflect conditions existing at the measurement date, including assumptions at that date about the future.
Estimates of future cash flows are primarily determined using deterministic forecasting models, with stochastic techniques used additionally to model future cash flows for certain groups of contracts. The estimates of future cash flows are used to determine the expected value, or probability-weighted mean of the full range of possible outcomes, considering all reasonable and supportable information available at the reporting date. Potential impacts related to sustainability and climate change are also appropriately considered when estimating future cash flows.
Cash flows within the insurance contract boundary are those that relate directly to the fulfilment of the contract, including cash flows for which the entity has discretion over the amount or timing.
Cash flows within the contract boundary of an insurance contract include:
•premiums and any additional cash flows arising from those premiums,
•claims incurred but not yet settled, whether reported or not, including expected recoveries (subrogation recoveries) and bonuses and commissions paid by the Group or the Company (e.g., no-claim bonuses, sliding-scale commissions and profit commissions),
•payments to (or on behalf of) a policyholder arising from derivatives, such as options and guarantees embedded in the contract, to the extent that such options and guarantees are not separated from the insurance contract,
•directly attributable costs, including:
-an allocation of insurance acquisition cash flows attributable to the portfolio,
-policy administration and maintenance costs,
-claim handling costs,
-an allocation of fixed and variable overheads,
-other costs directly chargeable to the policyholder,
•transaction-based taxes that arise directly from existing insurance contracts.
For contracts with investment activities or direct participation contracts, cash flows also include:
•payments to (or on behalf of) a policyholder that vary depending on returns on underlying items,
•costs incurred for:
-performing investment activity, to the extent the Group performs that activity to enhance benefits from insurance coverage for policyholders,
-providing investment-return service to policyholders of insurance contracts without direct participation features;
-providing investment-related service to policyholders of insurance contracts with direct participation features,
Cash flows within the contract boundary include both fixed and variable administrative expenses that are directly attributable to the fulfilment of insurance contracts. Expenses that cannot be directly
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allocated to an insurance policy are allocated to groups of insurance contracts using methods that are systematic, rational and consistently applied to all expenses that have similar characteristics. Expenses that are not attributable to or not strictly necessary for the fulfilment of insurance contracts are directly recognised in the income statement outside the insurance service result when incurred.
Adjustment to reflect the time value of money and financial risks – discount rates
Estimates of expected cash flows are adjusted for the time value of money and the financial risk associated with those cash flows, using a risk-free interest rate curve plus a liquidity premium to discount future cash flows.
Appropriate discount rates are calculated using the bottom-up approach. A risk-free interest rate in the form of a swap curve plus a liquidity premium is used as the discount rate in estimating future cash flows. The liquidity premium is determined on the basis of yield data for AAA-rated covered bonds and a multiple of the liquidity premium. The multiple of the liquidity premium is determined by taking into account the characteristics of the groups of insurance contracts. Cash flows that vary based on the returns on the contractually defined set of assets are discounted using risk-neutral measurement techniques. Discount interest rates are set at each balance sheet date.
The Company and the Group have chosen to disaggregate finance income and expenses from insurance and reinsurance contracts between the income statement and the statement of other comprehensive income.
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation the Group and the Company require for bearing the uncertainty related to the amount and timing of the cash flows that arise from non-financial risk as they fulfil the contractual agreements. The risks covered by the risk adjustment for non-financial risk are insurance risk (including climate change risk) and other non-financial risks such as lapse risk and expense risk.
The risk adjustment for non-financial risk is thus the compensation that the Group and the Company would require to make them indifferent between:
•fulfilling a liability that has a range of possible outcomes arising from non-financial risk, and
•fulfilling a liability that will generate fixed cash flows with the same expected present value as the insurance contracts.
The Group and the Company assess the risk adjustment for non-financial risk using the confidence level technique (VaR and TVaR) to determine the maximum possible loss at a given confidence interval. The Group and the Company take into account a confidence interval of 75% to 85% for VaR and 40% for TVaR.
Changes in the risk adjustment for non-financial risk are fully reflected in the income statement.
Contractual service margin (CSM)
The contractual service margin (CSM) represents the unearned profit arising from insurance contracts that the Group and the Company will recognise as they provide insurance services under these contracts in the future. The contractual service margin is recognised when the net present value of future cash flows is positive (inflows are expected to exceed outflows) and is determined as the excess of cash inflows over cash outflows, less an adjustment for non-financial risk. A contractual service margin is established to prevent the recognition of a profit before it is realised and is released over the life of the insurance contract.
In the case of a transfer of insurance contracts or a business combination, the calculation uses the consideration received or paid at the acquisition date as a proxy for the premiums received.
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Loss component
For identified future losses arising out of insurance contracts, when the net present value of future cash flows is negative (more outflows than inflows are expected), the loss is recognised in the current period. For onerous (non-profitable) groups of contracts, the loss component is shown in the liability for remaining coverage, while the loss is shown immediately in the income statement.
16.4.21.7.3 Subsequent measurement
The carrying amount of a group of insurance contracts at the end of each reporting period is the sum of:
•the liability for remaining coverage comprising:
•the fulfilment cash flows relating to future services allocated to a group of insurance contracts at that date;
•the contractual service margin of a group of insurance contracts at that date; and
•the liability for incurred claims, which includes fulfilment cash flows in respect of past services allocated to a group of insurance contracts at that date.
When calculating assets and liabilities under insurance contracts on the balance sheet date, the company uses current estimates of future cash flows, current discount rates and current estimates of the risk adjustment for non-financial risk. Changes in these components affect the following items:
Change in assumptions
Impact
Changes related to future service
Change in CSM
Changes related to current or past service
Change in the insurance service result for the financial year
The effects of the time value of money, financial risk and changes thereof on estimated future cash flows
Change in finance income or expense and change in other comprehensive income
After initial recognition, the contractual service margin for each group of insurance contracts is remeasured on the balance sheet date.
Insurance contracts without direct participation features measured using the BBA
For insurance contracts without direct participation features, the carrying amount of the contractual service margin of a group of contracts on measurement at the reporting date equals the carrying amount at the start of the reporting period adjusted for:
•the effect of any new contracts added to the group;
•interest accreted on the carrying amount of the contractual service margin during the reporting period;
•the changes in the fulfilment cash flows relating to future service, except to the extent that:
-such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, resulting in a loss; or
-such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage;
•the effect of any currency exchange differences on the contractual service margin; and
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•the amount recognised as insurance revenue due to the transfer of insurance contract services during the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period.
The changes in fulfilment cash flows relating to future service consist of:
•adjustments arising from premiums received in the period relating to future service, and related cash flows, such as insurance acquisition cash flows and premium-based taxes, measured at the discount rates at which the group of contracts is recognised;
•changes in estimates of the present value of the future cash flows in the liability for remaining coverage (experience and assumptions), measured at specified discount rates at the time the contract is recognised;
•differences between the investment component expected to become payable during the period and the investment component that actually becomes payable in the period,
•differences between the policyholder loan expected to become repayable in the period and the policyholder loan that actually becomes repayable during the period, and
•changes in the risk adjustment for non-financial risk that relate to future service.
The amount of the contractual service margin for a group of insurance contracts is recognised in profit or loss in each period to reflect the insurance contract services provided under the group of insurance contracts during that period. The amount is determined by:
•identifying the coverage units in the group. The number of coverage units in a group is the quantity of insurance contract services provided by the contracts in the group, determined by considering for each contract the quantity of the benefits provided under a contract and its expected coverage period,
•allocating the contractual service margin at the end of the period (before recognising any amounts in profit or loss to reflect the insurance contract services provided in the period) equally to each coverage unit provided in the current period and expected to be provided in the future,
•recognising in profit or loss the amount allocated to coverage units provided during the period.
The present value of changes in fulfilment cash flows for the purpose of calculating the contractual service margin is measured using locked-in discount rates at the time of recognition. In some cases, these discount rates are averaged when contracts are recognised over successive reporting periods.
Insurance contracts with direct participation features measured using the VFA
Insurance contracts with direct participation features are insurance contracts that, in addition to providing insurance cover, also provide the policyholder with investment services provided by the Group.
For insurance contracts with direct participation features, the carrying amount of the contractual service margin of a group of contracts at the end of the reporting period equals the carrying amount at the beginning of the reporting period adjusted by the amounts set out below.
•the effect of any new contracts added to the group;
•the change in the amount of the entity’s share of the fair value of the underlying items, except to the extent that:
-the decrease in the amount of the entity’s share of the fair value of the underlying items exceeds the carrying amount of the contractual service margin, giving rise to a loss; or
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-the increase in the amount of the entity’s share of the fair value of the underlying items reverses the amount referred to in the previous paragraph,
•the changes in the fulfilment cash flows relating to future service, except to the extent that:
-such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, resulting in a loss; or
-such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage,
•the effect of any currency exchange differences arising on the contractual service margin; and
•the amount recognised as insurance revenue because of the transfer of insurance contract services in the period.
16.4.21.7.4 Measurement of insurance contracts using the premium allocation approach (PAA)
The majority of non-life business is measured using the premium allocation approach when the coverage period of a group of contracts is less than 12 months or the simplification is expected to be a reasonable approximation of the valuation results under the building block approach.
The criterion in the preceding paragraph is not met if, at the inception of a group of contracts, significant variability is expected in the fulfilment cash flows that would affect the measurement of the liability for remaining coverage during the period until a claim is incurred.
Upon initial recognition, the carrying amount of the liability for remaining coverage is:
•the premiums, if any, received at initial recognition;
•minus any insurance acquisition cash flows at that date, unless the entity elects to recognise the payments as an expense; and
•plus or minus any amount arising from the derecognition of assets or liabilities at that date.
The carrying amount of the liability at the end of each subsequent reporting period is the carrying amount at the beginning of the reporting period:
•plus the premiums received during the period;
•minus any insurance acquisition cash flows; unless the entity chooses to recognise these payments as an expense,
•plus any amounts relating to the amortisation of insurance acquisition cash flows recognised as an expense in the reporting period, unless the entity chooses to recognise these payments as an expense, and
•minus the amount recognised as insurance revenue for providing coverage during that period.
If, at any time during the coverage period, facts and circumstances indicate that a group of insurance contracts is onerous, to the extent that the fulfilment cash flows exceed the carrying amount, the Group and the Company recognise a loss in profit or loss and increase the liability for remaining coverage.
If the PAA is used, the Group and the Company make no adjustments for the time value of money and the effect of financial risk, as the period between the premium due date and the provision of insurance services is expected to be no more than one year.
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16.4.21.7.5 Measurement of the liability for incurred claims
Liability for incurred claims represents the expected cash flows for claims and related costs that have already been incurred and have not yet been paid. The liability for incurred claims includes claims incurred but not yet reported (IBNR) and claims reported but not yet settled (RBNS). Even when the liability for remaining coverage is measured using the PAA, the liabilities for claims incurred are valued using the general measurement approach (BBA) and the future cash flows are adjusted for the time value of money and the effect of financial risk.
16.4.21.8 Measurement of reinsurance contracts held by the Group and the Company
The valuation methods for reinsurance contracts held by the Group and the Company (referred to in this section as reinsurance contracts) are the same as for insurance contracts, using consistent assumptions in the valuation of insurance and reinsurance contracts covering those insurance contracts, to the extent possible. In this case, the future cash flows in the valuation of reinsurance contracts are increased by a cash flow representing the effect of the reinsurer default risk, including the effects of collateral and litigation losses.
The risk adjustment for non-financial risk for reinsurance contracts represents the amount of risk being transferred from the insurer to the reinsurer.
In the valuation of reinsurance contracts, the unearned profit represented by the contractual service margin is replaced by the net gain or loss on the purchase of reinsurance. The net gain or loss on the initial recognition of reinsurance contracts is measured at:
•the fulfilment cash flows,
•the amount derecognised at that date of any asset or liability previously recognised for cash flows related to the group of reinsurance contracts,
•any cash flows arising from reinsurance contracts in a group of reinsurance contracts at that date,
•income recognised in the income statement as a result of the recognition of the reinsurance loss-recovery (LR) component of the asset for remaining coverage which mitigates the creation of a loss component for the liability for remaining coverage on the gross part.
If the net cost of purchasing reinsurance coverage relates to events that occurred before the purchase of the group of reinsurance contracts, the Group and the Company recognise this cost immediately as an expense in profit or loss.
The contractual service margin at the end of each reporting period for a group of reinsurance contracts is determined as the contractual service margin at the beginning of the reporting period, adjusted for:
•the effect of any new reinsurance contracts added to the group of reinsurance contracts,
•accrued interest on the amount of the CSM,
•income recognised in the income statement as a result of the recognition of the reinsurance loss-recovery (LR) component of the asset for remaining coverage,
•any reversals of the loss-recovery component to the extent that those reversals are not part of the change in fulfilment cash flows of a group of reinsurance contracts,
•changes in fulfilment cash flows for the remaining coverage, unless the change relates to a change in cash flows that do not change the CSM of the insurance contracts or, in the case of the PAA on direct business, affect the creation of a loss component of the liability for remaining coverage,
•the effect of foreign exchange differences on the CSM,
•the amount recognised in profit or loss because of services received in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period of the group of reinsurance contracts.
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Changes in fulfilment cash flows resulting from changes in the reinsurer's default risk are unrelated to future service and consequently do not adjust the CSM.
The Group and the Company adjust the contractual service margin of a group of reinsurance contracts and, consequently, recognise revenue when they recognise an onerous group of insurance contracts underlying the reinsurance contracts or when they add onerous insurance contracts underlying the reinsurance contracts to the group (this is the so-called loss-recovery component of an asset for remaining coverage of a group of reinsurance contracts). This adjustment is made only if the reinsurance contract has already been written at the time the loss component of the liability for remaining coverage on the onerous insurance contracts is recognised.
The amount of this adjustment is equal to the product of the recognised loss on the gross business and the share of the claims covered by that reinsurance contract on the insurance contracts from which that loss arises.
The Group and the Company establish (or adjust) a loss-recovery component of the asset for remaining coverage for a group of reinsurance contracts depicting the recovery of losses recognised in accordance with the above paragraphs. The loss-recovery component determines the amounts that are recognised in profit or loss as reversals of recoveries of losses from reinsurance contracts and are consequently excluded from the premiums paid to the reinsurer.
The loss-recovery component is adjusted to reflect changes in the loss component of an onerous group of underlying insurance contracts. The carrying amount of the loss-recovery component must not exceed the portion of the carrying amount of the loss component of the onerous group of underlying insurance contracts that the Company expects to recover from the group of reinsurance contracts.
The PAA approach may also be used to measure reinsurance contracts if:
•the Company reasonably expects that such simplification would result in a measurement of the liability for remaining coverage for the group of reinsurance contracts that is not materially different from the measurement under the BBA approach, or
•the coverage period of each contract in the group of reinsurance contracts is one year or less.
The criterion in the first bullet point above is not met if, at the inception of a group of reinsurance contracts, the Group and the Company expect significant variability in the fulfilment cash flows that would affect the measurement of the liability for remaining coverage during the period before a claim is incurred.
If the PAA approach is used, the carrying amount of the asset is adjusted for the remaining coverage in the event that a loss recovery component is created.
16.4.21.9 Presentation of insurance and reinsurance contracts
Insurance revenue comprises the provision of services, during the reporting period, arising from a group of insurance contracts, specifically for an amount that reflects the consideration to which the Group and the Company expect to be entitled in exchange for the services provided. Insurance service expenses represent incurred claims, expenses and other expenses related to insurance services incurred in the reporting period. Neither insurance revenue nor insurance service expenses include an investment component.
The total amount of insurance revenue for each group of insurance contracts is equal to the premiums paid, adjusted for a financing effect and excluding any investment components.
The allocation of insurance revenue by period is determined by the amount of insurance services provided during the reporting period, which includes:
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•the expected insurance service expenses for each reporting period, net of any adjustment for non-financial risk and amounts allocated to the loss component of the liability for remaining coverage;
•the risk adjustment for non-financial risk, excluding any amounts allocated to the loss component of the liability for remaining coverage;
•the contractual service margin;
•amounts related to income tax that are specifically chargeable to the policyholder;
•amounts related to policy acquisition costs.
When the Group and the Company provide insurance services during a period, they reduce the liability for the remaining coverage and recognise insurance revenue during the period. The reduction in the liability for remaining coverage does not include changes that are not related to the provision of insurance services, such as:
•changes resulting from cash inflows from premiums received;
•changes that relate to investment components in the period,
•amounts relating to transaction-based taxes collected on behalf of third parties;
•finance income or expenses from insurance contracts,
•acquisition costs,
•derecognition of liabilities transferred to a third party;
•changes in the loss component of the liability for remaining coverage.
Consequently, insurance revenue for the period can also be analysed as the sum total of the changes in the liability for remaining coverage during the period that relates to services for which the Group and the Company expect to receive consideration. Those changes are:
•insurance service expenses incurred during the period (measured at the amounts expected at the beginning of the period), excluding:
-amounts allocated to the loss component of the liability for remaining coverage;
-repayments of investment components,
-amounts relating to transaction-based taxes collected on behalf of third parties (such as premium taxes, value added taxes and goods and services taxes);
-policy acquisition expenses; and
-the amount related to the risk adjustment for non-financial risk;
•the change in the risk adjustment for non-financial risk, excluding:
-changes included in finance income or expenses from insurance contracts;
-changes that adjust the contractual service margin because they relate to future service; and
-amounts allocated to the loss component of the liability for remaining coverage;
•the amount of the contractual service margin recognised in profit or loss;
•other amounts, if any, for example, experience adjustments for premium receipts other than those that relate to future service.
Insurance revenue related to insurance acquisition cash flows are determined by allocating the portion of the premiums that relate to recovering those cash flows to each reporting period in a systematic way on the basis of the passage of time. The same amount is recognised as insurance service expenses.
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If the simplified premium allocation approach (PAA) is used to measure liabilities for future coverage, the insurance revenue is the amount of the expected premiums, excluding any investment component relating to the reporting period. Premiums are allocated by period evenly over the duration of the cover or, in the case of unevenly spread risk, over the expected period of incurrence of the insurance service expense (decrease in the amount of insurance cover for credit insurance, increase in the amount of insurance cover for construction and erection insurance and reinsurance contracts).
Finance income or expenses from insurance and reinsurance contracts comprise:
•the effect of the time value of money and changes in the time value of money; and
•the effect of financial risk and changes in financial risk.
For all its groups of insurance contracts without direct participation features, the companies allocate finance income and expense between profit or loss and the statement of other comprehensive income (OCI). The companies include in profit or loss an amount determined by a systematic allocation of the expected total finance income or expenses from insurance contracts over the duration of the group of insurance contracts. A systematic allocation is an allocation of the total expected finance income or expenses of a group of insurance contracts over the duration of the group that:
•is based on characteristics of the contracts, without reference to factors that do not affect the cash flows expected to arise under the contracts,
•results in the amounts recognised in other comprehensive income over the duration of the group of contracts totalling zero. The cumulative amount recognised in other comprehensive income at any date is the difference between the carrying amount of the group of contracts and the amount that the group would be measured at when applying the systematic allocation.
For groups of insurance contracts without direct participation features for which changes in assumptions that relate to financial risk do not have a substantial effect on the amounts paid to the policyholder, the systematic allocation is determined using the discount rates at the date of initial recognition of the group of insurance contracts, or at the date of loss in the case of the PAA approach.
For groups of insurance contracts without direct participation features for which changes in assumptions that relate to financial risk have a substantial effect on the amounts paid to the policyholders:
•a systematic allocation for the finance income or expenses arising from the estimates of future cash flows is determined by using a rate that allocates the remaining diluted expected financial income or expense over the remaining term of the group of contracts at constant rates;
•a systematic allocation for the finance income or expenses arising from the risk adjustment for non-financial risk, is determined using an allocation consistent with that used for the allocation for the finance income or expenses arising from the future cash flows;
•a systematic allocation for the finance income or expenses arising from the contractual service margin is determined:
-for insurance contracts without direct participation features, using discount rates determined at the date of initial recognition of the group of insurance contracts; and
-for insurance contracts with direct participation features, using an allocation consistent with that used for the allocation for the finance income or expenses arising from the future cash flows.
For groups of insurance contracts with direct participation features for which the company holds the underlying items, the company disaggregates insurance finance income or expenses between the statement of profit or loss and other comprehensive income for the period to include in profit or loss an amount that eliminates accounting mismatches with income or expenses included in profit or loss
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on the underlying items held (the financial expenses or income from insurance contracts included in profit or loss exactly matches the income or expense included in profit or loss for the underlying items, resulting in the net of the separately presented items being nil). The company includes in other comprehensive income the difference between the finance income or expenses from insurance contracts measured on the basis set out above and the total insurance finance income or expenses for the period.
16.4.22 Other provisions
Employee benefits include severance pay upon retirement and jubilee benefits. Provisions for employee benefits are the net present value of the Group’s future liabilities proportionate to the years of service in the Group (the projected unit credit method). Pursuant to IAS 19 “Employee benefits” actuarial gains and losses arising on re-measurement of net liabilities for severance pay upon retirement are recognised in other comprehensive income.
These provisions are calculated based on personal data of employees: date of birth, date of commencement of employment in the Group, anticipated retirement and salary. For each Group company, the amounts of severance pay upon retirement and jubilee benefits are in accordance with local legislations, employment contracts and other applicable regulations. Expected pay-outs also include tax liabilities where payments exceed statutory non-taxable amounts.
The probability of an employee staying with the Group includes both the probability of death and the probability of termination of employment relationship. Assumptions relating to future increases in salaries, severance pay upon retirement and jubilee benefits, as well as those relating to employee turnover depend on developments in individual markets and individual Group companies. The same term structure of risk-free interest rates is used for discounting as that in the capital adequacy calculation under Solvency II.
16.4.23 Other financial liabilities
Other financial liabilities mainly include unpaid dividends payable from previous years and current interest and loan liabilities.
16.4.24 Current tax liabilities
Current tax liabilities are recognised at the amount of the current tax liability for the financial year not yet paid.
16.4.25 Other liabilities
Liabilities are initially recognised at amounts recorded in the relevant documents. Subsequently, they are increased or decreased in line with documents, and reduced through payments.
Other liabilities include amounts due to employees and suppliers and other current liabilities (accrued expenses).
16.4.26 Investment income and expenses
The Company discloses investment income and expenses by type of income and expense:
•income from dividends and participating interests,
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•interest income and expenses,
•income or expenses from financial investments measured at FVTPL,
•gains and losses arising from the derecognition of financial investments measured at FVOCI
•exchange differences arising on financial investments, and
•other finance income and expenses (including income and expenses from investment property).
16.4.27 Other operating income and expenses
Other operating income includes income:
•from foreign exchange gains, excluding foreign exchange gains on (re)insurance contracts and investment transactions,
•from the sale of fixed assets,
•from the sale of green cards (international motor insurance certificates),
•from claims settled on behalf of other Group companies,
•from sales by non-insurance companies (including asset management, such as entry and exit fee income),
•from other services.
This income is recognised in the income statement at the time services are completed or invoices issued.
Revenue is measured based on the consideration to which the Group and Company are expected to be entitled under their contracts with customers. Amounts collected on behalf of third parties are excluded.
Revenue is recognised when the customer has taken control of the goods or has received the benefits from the services rendered. Sales revenue does not include any charges paid upon purchase or sale. It is included in “other income” in the income statement and relates either to the pensions and asset management or the “other” operating segments. This revenue is not multi-year in nature, is recognised on an accrual basis in the financial year and presented under note 16.8.40.
Other operating expenses include:
•allowances for other receivables,
•impairment losses on property, plant and equipment and intangible assets.
•non-attributable expenses and
•other expenses.
Other expenses are recognised in the income statement at the time the service is rendered.
16.4.28 Income tax expense
Income tax expense for the year comprises current and deferred tax. Current income tax is presented in the income statement, except for the portion relating to the items presented in equity; deferred tax for these items is also presented in equity. Current tax is payable on the taxable profit for the year using the tax rates enacted by the date of the statement of financial position, as well as on any adjustments to tax liabilities of prior periods. Deferred tax is recognised using the statement of financial position method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The deferred tax amount is based on the expected manner of recovery or settlement of the carrying
219
amount of assets and liabilities, using the tax rates effective on the date of the statement of financial position. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Group income tax expense has been determined in accordance with the requirements of each member’s local legislation.
16.4.29 Information about reportable operating segments
Operating segments as disclosed and monitored were determined based on the different activities carried out in the Group. Segments were formed through the aggregation of operations of companies that generate revenue and expenses, including revenue and expenses arising from intra-group transactions, based on similar services provided by companies (features of insurance products, market networks, and the circumstances in which companies operate).
The operating segments are reinsurance (reinsurance business), non-life (non-life insurance business, broken down into EU and non-EU), life (life insurance business, broken down into EU and non-EU), pensions and asset management (pension insurance business in Slovenia and North Macedonia, and fund management) and the “other” segment (assistance services associated with motor, homeowners and health insurance business). In the following, more detail is provided on how the companies are included in operating segments.
The performance of these segments is monitored using a variety of indicators, with IFRS net profit being a common performance indicator for all segments. The management board monitors performance by segment to the level of insurance and reinsurance service results, net investment income and aggregated business results, amounts of assets, equity and insurance and reinsurance contract liabilities on a quarterly basis.
The operations of the Sava Insurance Group are organised into the following operating segments: reinsurance, non-life (insurance), life (insurance), pensions and asset management, and the “other” segment. The non-life and life segments are further subdivided geographically into EU and non-EU.
The following companies are included in the individual operating segments:
•reinsurance: Sava Re (non-Group business);
•non-life, EU: Zavarovalnica Sava (the Slovenian and Croatian part of non-life insurance business), Vita (non-life insurance business);
•non-life, non-EU: Sava Neživotno Osiguranje (SRB), Illyria (RKS), Sava Osiguranje (MNE), Sava Osiguruvanje (MKD), Sava Car (MNE), Sava Agent (MNE), Sava Station (MKD), Sava Car (SRB);
•life, EU: Zavarovalnica Sava (the Slovenian and Croatian part of life insurance business), Vita (life insurance business), ZS Svetovanje (SVN), ASISTIM (SVN);
•life, non-EU: Sava Životno Osiguranje (SRB), Illyria Life (RKS);
•pensions and asset management: Sava Pokojninska (SVN), Sava Penzisko Društvo (MKD), Sava Infond (SVN);
•other: TBS Team 24 (SVN), ASP (SRB) and Vita S Holding (MKD); DCB (SVN) and G2I (GBR) using the equity method. This operating segment also includes expenses on subordinate debt. The company S Estate was sold on 1 March 2022 and G2I (GBR) in mid-2023. Since then, they are no longer included in the consolidated statements.
The following reallocations were made in the consolidated income statement:
•The effects of reinsurance (retrocessions) relating to business with subsidiaries (Sava Re, as the parent company, reinsures the major part of the subsidiaries’ business) are transferred
220
from the reinsurance segment to other operating segments. In the segment reporting information, income and expenses from reinsurance ceded are allocated to the segments from which they originate. The same applies to finance expenses and recoveries from reinsurance contracts.
•Operating expenses of the reinsurance segment are reduced by the portion of expenses attributable to the administration of the Sava Insurance Group. Sava Re operates as a virtual holding company; hence, a part of its expenses relates to the administration of the Group. Such expenses relating to the reinsurance segment are allocated to other segments based on each subsidiary’s revenue. Operating expenses associated with reinsurance business within the Group are also reallocated to other segments. In this way, 75.6% of operating expenses were allocated to the segments in 2023 (2022: 74.7%). In addition, there were reallocations of operating expenses of the company TBS Team 24 (SVN) associated with the companies conducting business in the Slovenian or international non-life segments from the “other” segment to these two segments.
•Investment income and expenses are reallocated from the reinsurance segment to the non-life insurance and life insurance segments using the key for the allocation of liabilities for incurred claims and liabilities for remaining coverage.
•Subordinated debt expenses are shown under the “other” segment.
•The proceeds from the sale of S Estate (RKS) and G2I have been included in the “other” segment.
The following reclassifications were made in the consolidated statement of financial position:
•Goodwill was attributed to the segment where it arose.
•The balance of financial investments is transferred from the reinsurance segment to the non-life and life segments using the key for the allocation of liabilities for incurred claims and liabilities for remaining coverage.
•Reinsurance contract assets and liabilities are reallocated to other segments in the same way as described in the first paragraph (point) of the description of reallocations in the income statement.
•Subordinated liabilities are shown in the “other” segment.
221
Statement of financial position items by operating segment as at 31 December 2023
EUR
Reinsurance
Non-life, EU
Non-life, non-EU
Life, EU
Life, non-EU
Pensions and asset management
Other
Total
31 December 2023
31 December 2023
31 December 2023
31 December 2023
31 December 2023
31 December 2023
31 December 2023
31 December 2023
ASSETS
Intangible assets and goodwill
4,674,935
13,627,701
9,325,953
4,428,761
233,499
28,757,254
4,100,728
65,148,831
Property, plant and equipment
2,675,158
38,886,005
11,321,042
5,249,059
1,060,243
417,230
78,061
59,686,798
Investment property
7,582,167
11,730,934
5,544,277
32,900
0
0
0
24,890,278
Right-of-use assets
209,205
3,915,031
3,133,713
1,116,305
154,707
44,437
0
8,573,398
Investments in associates and joint ventures
0
0
0
0
0
0
23,834,620
23,834,620
Investments in associates accounted for using equity method
0
0
0
0
0
0
23,834,620
23,834,620
Deferred tax assets
5,087,419
3,548,166
0
-1,299,657
0
-751,528
0
6,584,400
Financial investments measured at
237,893,483
535,119,866
89,686,313
1,066,267,612
30,860,472
52,704,887
0
2,012,532,633
Fair value through other comprehensive income
210,351,892
460,487,600
63,847,713
492,306,747
18,524,902
30,628,191
0
1,276,147,045
Amortised cost
2,344,960
4,409,489
21,772,816
20,466,505
12,300,659
15,008,737
0
76,303,166
Fair value through profit or loss
25,196,630
70,222,777
4,065,785
553,494,360
34,911
7,067,959
0
660,082,422
Investment contract assets
0
0
0
0
0
180,628,137
0
180,628,137
Insurance contract assets
4,966,239
3,686,689
16,211
753,959
184,190
0
0
9,607,288
Reinsurance contract assets
24,595,405
77,665,255
4,949,262
271,639
0
0
0
107,481,560
Current tax assets
0
0
435,426
0
1,683
0
7,507
444,616
Trade and other receivables
123,348
3,389,546
5,599,934
563,570
573,186
1,199,140
2,822,634
14,271,358
Non-current assets held for sale
0
191,021
68,628
0
0
0
0
259,649
Cash and cash equivalents
8,284,753
17,871,533
4,004,142
14,774,669
753,814
2,670,941
2,200,112
50,559,964
Other assets
715,114
1,235,294
419,561
394,674
41,483
763,264
473,216
4,042,606
Total assets
296,807,225
710,867,041
134,504,462
1,092,553,491
33,863,277
266,433,762
33,516,878
2,568,546,136
LIABILITIES
Subordinated liabilities
0
0
0
0
0
0
74,987,535
74,987,535
Deferred tax liabilities
0
54,689
578,579
86,516
696,551
1,784,777
235,479
3,436,591
Insurance contract liabilities
163,562,295
463,154,147
64,660,233
917,651,804
17,396,207
24,597,561
0
1,651,022,247
Reinsurance contract liabilities
287,726
103,984
942,342
307,990
0
0
0
1,642,043
Investment contract liabilities
0
0
0
0
0
180,437,695
0
180,437,695
Provisions
419,660
5,619,443
308,683
1,186,602
16,617
462,626
60,624
8,074,255
Lease liability
210,798
4,096,675
3,212,030
1,116,412
156,186
52,636
0
8,844,737
Other financial liabilities
0
7,154
728,545
0
1,386
0
0
737,085
Current tax liabilities
6,319,991
116,825
670,658
2,363,508
27,152
276,482
156,214
9,930,830
Other liabilities
4,718,067
22,980,315
5,664,583
3,154,137
1,374,904
1,739,401
4,138,098
43,769,505
Total liabilities
175,518,538
496,133,232
76,765,653
925,866,969
19,669,003
209,351,177
79,577,950
1,982,882,523
Total equity
585,663,613
Total liabilities and equity
2,568,546,136
222
Statement of financial position items by operating segment as at 31 December 2022
EUR
Reinsurance
Non-life, EU
Non-life, non-EU
Life, EU
Life, non-EU
Pensions and asset management
Other
Total
31 December 2022
31 December 2022
31 December 2022
31 December 2022
31 December 2022
31 December 2022
31 December 2022
31 December 2022
ASSETS
Intangible assets and goodwill
4,068,385
16,900,619
9,245,044
2,874,285
118,787
29,879,226
2,808,946
65,895,292
Property, plant and equipment
2,553,946
40,929,091
12,634,139
4,872,184
1,058,434
340,235
47,597
62,435,626
Investment property
7,721,692
11,839,443
3,200,383
34,241
0
0
0
22,795,759
Right-of-use assets
248,062
4,551,855
2,256,173
221,030
24,397
121,639
2,520
7,425,676
Investments in associates and joint ventures
0
0
0
0
0
0
21,856,109
21,856,109
Investments in associates accounted for using equity method
0
0
0
0
0
0
21,856,109
21,856,109
Deferred tax assets
0
-203,681
0
220,746
0
0
0
17,065
Financial investments measured at
223,493,038
456,926,123
78,380,246
950,571,091
25,289,938
41,471,640
0
1,776,132,075
Fair value through other comprehensive income
194,080,958
384,326,920
57,536,477
481,149,244
16,691,460
21,616,848
0
1,155,401,907
Amortised cost
1,963,606
2,166,142
17,023,580
21,168,516
8,615,831
13,490,605
0
64,428,280
Fair value through profit or loss
27,448,474
70,433,062
3,820,188
448,253,331
-17,354
6,364,187
0
556,301,888
Investment contract assets
0
0
0
0
0
166,374,119
0
166,374,119
Insurance contract assets
2,945,467
3,959,721
136,537
13,293
83,322
0
0
7,138,340
Reinsurance contract assets
22,018,612
43,582,758
2,291,047
241,224
0
0
0
68,133,642
Current tax assets
49,594
3,302,945
342,733
-284,100
1,683
0
0
3,412,855
Trade and other receivables
-113,541
3,758,200
2,806,668
2,023,980
609,725
972,915
2,225,026
12,282,973
Non-current assets held for sale
0
380,282
160,636
0
0
450,885
0
991,803
Cash and cash equivalents
11,655,827
40,864,333
4,424,791
26,894,444
1,884,243
7,001,632
498,361
93,223,631
Other assets
699,783
1,336,963
510,869
289,128
36,029
588,623
563,888
4,025,283
Total assets
275,340,865
628,128,653
116,389,266
987,971,545
29,106,558
247,200,914
28,002,447
2,312,140,248
LIABILITIES
Subordinated liabilities
0
0
0
0
0
0
74,924,356
74,924,356
Deferred tax liabilities
-3,032,251
-1,554,331
336,866
4,342,765
342,266
2,375,985
0
2,811,300
Insurance contract liabilities
168,897,801
405,704,423
55,550,665
819,181,500
14,335,729
20,645,040
0
1,484,315,158
Reinsurance contract liabilities
111,680
79,071
518,136
342,728
0
0
0
1,051,614
Investment contract liabilities
0
0
0
0
0
166,197,363
0
166,197,363
Provisions
392,640
5,489,589
240,037
1,155,805
11,838
625,968
57,577
7,973,454
Lease liability
246,929
4,738,721
2,283,198
221,029
28,680
131,014
7,615
7,657,186
Other financial liabilities
0
-6
547,997
0
585
0
0
548,576
Current tax liabilities
45,414
0
842,323
448,202
26,762
159,258
33,033
1,554,992
Other liabilities
1,054,118
20,889,215
3,046,611
2,855,696
1,076,482
1,407,138
3,313,309
33,642,572
Total liabilities
167,716,331
435,346,682
63,365,833
828,547,725
15,822,342
191,541,766
78,335,890
1,780,676,571
Total equity
531,463,677
Total liabilities and equity
2,312,140,248
223
Income statement items by operating segment for 2023
EUR
Reinsurance
Non-life, EU
Non-life, non-EU
Life, EU
Life, non-EU
Pensions and asset management
Other
Total
2023
2023
2023
2023
2023
2023
2023
2023
Insurance revenue
104,029,407
436,996,472
89,711,654
59,872,919
6,530,594
421,765
0
697,562,811
Insurance service expenses
-81,494,383
-445,956,710
-83,631,610
-40,909,530
-4,820,572
-312,713
0
-657,125,518
– Claims incurred
-71,430,181
-324,341,925
-52,147,491
-15,502,210
-1,966,927
-85,420
0
-465,474,154
– Operating expenses
-10,318,051
-118,758,015
-31,575,713
-25,752,177
-3,047,991
-113,073
0
-189,565,020
– Unprofitable contracts
253,849
-2,856,770
91,594
344,857
194,346
-114,220
0
-2,086,344
Result before reinsurance
-8,960,238
6,080,044
18,963,389
1,710,022
22,535,024
109,052
0
40,437,293
Reinsurance service result
906,976
41,486,560
885,641
-238,707
0
0
0
43,040,469
Insurance service result
23,442,000
32,526,322
6,965,685
18,724,682
1,710,022
109,052
0
83,477,762
0
0
0
0
0
0
Net investment result
5,521,148
7,882,690
3,094,209
9,103,691
955,738
1,365,801
0
27,923,277
Finance result from insurance contracts
-5,210,202
-3,070,764
-629,162
-3,302,541
-400,071
-691,457
0
-13,304,198
Net foreign exchange gains/losses
1,270,540
-79,847
-8,803
-1,520
14,640
-2,505
0
1,192,505
Finance result
1,581,486
4,732,079
2,456,244
5,799,629
570,307
671,839
0
15,811,584
0
0
0
0
0
0
Income from non-insurance activities
0
0
0
0
0
19,589,410
5,806,493
25,395,903
Other expenses
-3,693,151
-16,349,800
-6,237,092
-5,161,413
-492,069
-13,370,630
-5,710,391
-51,014,545
Income from investments in subsidiaries and associates
0
3,754
0
0
0
0
2,282,455
2,286,209
Net other operating income or expenses
-631,045
4,411,830
2,603,285
-507,641
-20,696
516,535
-2,715,827
3,656,441
Profit or loss before tax
20,699,290
25,324,185
5,788,122
18,855,257
1,767,563
7,516,206
-337,270
79,613,354
Income tax expense
-14,956,182
Net profit or loss for the period
64,657,172
224
Income statement items by operating segment for 2022
EUR
Reinsurance
Non-life, EU
Non-life, non-EU
Life, EU
Life, non-EU
Pensions and asset management
Other
Total
2022
2022
2022
2022
2022
2022
2022
2022
Insurance revenue
92,799,955
380,796,268
73,586,592
56,462,308
5,033,876
308,794
0
608,987,793
Insurance service expenses
-70,317,410
-360,568,520
-64,961,945
-37,129,913
-4,389,039
-143,723
0
-537,510,550
– Claims incurred
-61,697,514
-255,758,019
-37,837,257
-11,447,246
-1,503,214
-66,524
0
-368,309,774
– Operating expenses
-8,703,623
-102,624,831
-27,103,703
-23,970,652
-2,532,069
-96,158
0
-165,031,036
– Unprofitable contracts
83,727
-2,185,670
-20,985
-1,712,015
-353,756
18,959
0
-4,169,740
Result before reinsurance
20,227,748
8,624,647
19,332,395
644,837
22,482,545
165,071
0
71,477,243
Reinsurance service result
168,828
7,537,611
-2,620,139
-490,126
0
0
0
4,596,174
Insurance service result
22,651,373
27,765,359
6,004,508
18,842,269
644,837
165,071
0
76,073,417
0
0
0
0
0
0
Net investment result
1,545,065
-562,285
1,962,550
3,709,640
750,448
-869,358
0
6,536,061
Finance result from insurance contracts
-4,386,386
-930,698
-378,489
-2,974,900
-267,571
-202,813
0
-9,140,857
Net foreign exchange gains/losses
1,942,705
-28,341
-22,079
-15,257
-25,577
-14,512
0
1,836,939
Finance result
-898,616
-1,521,324
1,561,983
719,483
457,300
-1,086,683
0
-767,857
0
0
0
0
0
0
Income from non-insurance activities
0
0
3,212
0
0
17,978,588
3,422,717
21,404,517
Other expenses
-2,908,447
-14,842,893
-5,742,288
-5,092,506
-418,355
-11,881,741
-3,496,453
-44,382,684
Income from investments in subsidiaries and associates
0
0
0
0
0
0
2,279,735
2,279,735
Net other operating income or expenses
-474,542
3,661,593
4,117,895
-622,602
385,306
-306,868
-2,865,865
3,894,917
Profit or loss before tax
18,369,768
15,062,734
5,945,310
13,846,644
1,069,088
4,868,367
-659,866
58,502,045
Income tax expense
-11,578,604
Net profit or loss for the period
46,923,441
225
Inter-segment business – inter-segment consolidation eliminations
EUR
Reinsurance
Non-life
Life
Pensions
Other
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Insurance service result before reinsurance
29,221,815
4,245,142
346,830
90,102
-233,171
-923,311
-
-
-
-
Net result from reinsurance contracts held
-
-
-32,466,249
-5,409,109
341,809
86,137
-
-
-
-
Net investment income/expenses
-72,248
-63,801
-289,315
-82,232
-
-
-
-39,951
-
-
Net insurance finance income or expenses
1,073,695
832,641
-1,157,607
-883,906
776,640
-2,514,324
-
-
-
-
Other operating income and expenses
-30,661,000
-50,822,064
1,226,967
2,045,152
-1,336,470
-1,224,152
703,688
522,560
-1,601,219
-1,447,894
Cost of intangible and property, plant and equipment assets by operating segment
EUR
Reinsurance
Non-life insurance
Life insurance
Pensions
Other
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Investments in intangible assets
973,700
1,118,179
1,892,653
4,278,034
367,356
249,925
97,047
275,363
1,357,106
8,537
4,687,862
5,930,038
Investments in property, plant and equipment
424,457
605,833
3,390,832
11,707,585
770,292
2,489,402
251,666
14,736
54,136
35,419
4,891,383
14,852,975
226
16.5 Standards and interpretations issued but not yet effective, and new standards and interpretations
The accounting policies adopted by the Group and the Company in preparing their financial statements are consistent with those of the previous financial year, except for the following new or amended IFRSs adopted for annual periods beginning on or after 1 January 2023. The impact of the adoption of IFRS 17 and IFRS 9 is described in section 16.6 “Transition to the new standards IFRS 17 and IFRS 9”.
New and amended IFRS Accounting Standards that are effective for the current year
In the current year, the Group and the Company have applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) and adopted by the EU that are mandatorily effective for reporting period that begins on or after 1 January 2023. The adoption of these amendments has not had any material impact to the financial statements of the Group or the Company, except for the impact of the new standard IFRS 17 “Insurance Contracts”. For more information on the impact of this standard on the performance of the Group and the Company, refer to section 16.6 “Transition to the new standards IFRS 17 and IFRS 9”
New standard IFRS 17 “Insurance Contracts”, including the June 2020 and December 2021 amendments to IFRS 17
•IFRS 17 “Insurance Contracts” issued by IASB on 18 May 2017. The new standard requires insurance liabilities to be measured at a current fulfilment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4 “Insurance Contracts” and related interpretations while applied. Amendments to IFRS 17 “Insurance Contracts” issued by IASB on 25 June 2020 defer the date of initial application of IFRS 17 by two years to annual periods beginning on or after 1 January 2023. Additionally, the amendments issued on 25 June 2020 introduce simplifications and clarifications of some requirements in the Standard and provide additional reliefs when applying IFRS 17 for the first time.
•Amendments to IFRS 17 “Insurance contracts” – Initial Application of IFRS 17 and IFRS 9 – Comparative Information issued by IASB on 9 December 2021. It is a narrow-scope amendment to the transition requirements of IFRS 17 for entities that first apply IFRS 17 and IFRS 9 at the same time.
Amendments to IAS 1 “Presentation of Financial Statements” – Disclosure of Accounting Policies
Disclosure of Accounting Policies issued by IASB on 12 February 2021. The amendments require entities to disclose their material information on accounting policies rather than their significant accounting policies. They provide guidance and examples to help preparers decide which accounting policies to disclose in their financial statements.
Amendments to IAS 8 – Definition of Accounting Estimates
Definition of Accounting Estimates issued by IASB on 12 February 2021. The amendments focus on accounting estimates and provide guidance on how to distinguish between accounting policies and accounting estimates.
Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amendments to IAS 12 “Income Taxes” – Deferred Tax related to Assets and Liabilities arising from a Single Transaction issued by IASB on 6 May 2021. According to amendments, the initial recognition
227
exemption does not apply to transactions in which both deductible and taxable temporary differences arise on initial recognition that result in the recognition of equal deferred tax assets and liabilities.
Amendments to IAS 12 – International Tax Reform — Pillar Two Model Rules
Amendments to IAS 12 “Income Taxes” – International Tax Reform — Pillar Two Model Rules issued by IASB on 23 May 2023. The amendments introduced a temporary exception to the accounting for deferred taxes arising from jurisdictions implementing the global tax rules and disclosure requirements about company’s exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect.
The exception in the amendments to IAS 12 for an entity not to recognise and disclose information about deferred tax assets and liabilities under the IASB’s Pillar 2 relating to income taxes applies immediately after the amendments are issued and retrospectively in accordance with IAS 8. The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023.
At Group level, a task force has been set up in 2023 to implement the new tax legislation 120. The task force has been set up to study the changes and will be responsible for their implementation. As the legislation introduces significant changes, we estimate that it will have an impact on the Group’s operations, but it is not yet possible to quantify the impact on individual items in the financial statements.
New and revised IFRS Accounting Standards in issue and adopted by the EU but not yet effective
At the date of authorisation of these financial statements, the Group and the Company have not applied the following revised IFRS Accounting Standards that have been issued by IASB and adopted by EU but are not yet effective:
Amendments to IFRS 16 “Leases” – Lease Liability in a Sale and Leaseback
Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2024). Amendments to IFRS 16 require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognising in profit or loss any gain or loss relating to the partial or full termination of a lease.
New standards and amendments to the existing standards issued by the IASB but not yet adopted by the EU
At present, IFRSs as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not adopted by the EU as at the date of this report:
Amendments to IAS 1 “Presentation of Financial Statements”
Classification of Liabilities as Current or Non-Current with Covenants (effective date determined by IASB: 1 January 2024). The amendments clarify how conditions with which an entity must comply within 12 months after the reporting period affect the classification of a liability.
Amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments: notes
Supplier Finance Arrangements issued by IASB on 25 May 2023 (effective date determined by IASB: 1 January 2024). Amendments add disclosure requirements and “signposts” within existing disclosure
120 In Slovenia, the Minimum Tax Act was adopted at the end of 2023 under the IASB’s Pillar 2.
228
requirements to provide qualitative and quantitative information about supplier finance arrangements.
Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates”
Lack of Exchangeability issued by IASB on 15 August 2023 (effective date determined by IASB: 1 January 2025). Amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.
IFRS 14 “Regulatory Deferral Accounts”
Effective for annual accounting periods beginning on or after 1 January 2016. The European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard. This standard is intended to allow entities that are first-time adopters of IFRS, and that currently recognise regulatory deferral accounts in accordance with their previous GAAP, to continue to do so upon transition to IFRS.
Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture. The effective date has been deferred indefinitely until the research project on the equity method has been concluded. The amendments address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or joint venture the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business.
The Group and the Company do not expect that the adoption of the above new standards and amendments to the existing standards during the period of initial application will have a material impact on the financial statements of the Group or the Company.
Hedge accounting for a portfolio of financial assets and liabilities the principles of which have not been adopted by the EU remains unregulated.
Management assesses that the application of hedge accounting to a portfolio of financial assets or liabilities pursuant to IAS 39 “Financial Instruments: Recognition and Measurement” will not have had a significant impact the financial statements of the Group and the Company, if it had been applied at the balance sheet date.
16.6 Transition to the new standards IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments”
On 25 June 2020, the International Accounting Standards Board (Board) issued the final version of the accounting standard for insurance contracts IFRS 17. When IFRS 17 was finalised, the effective date was deferred by two years, from 1 January 2021 to 1 January 2023. The Board also decided to align the effective date of IFRS 9 with that of IFRS 17 for insurance companies. As a result of the deferral of the effective date of IFRS 17, the beginning of the comparative period has also been deferred by two years, from 1 January 2020 to 1 January 2022. IFRS 4 allowed the use of local accounting practices for insurance contracts in the consolidated financial statements. With IFRS 17, the Board has introduced, for the first time, common accounting guidance for insurance contracts. The Group and the Company have applied IFRS 17 for the first time for the purpose of preparing the financial statements for the 2023 financial year and the comparative information for 2022, taking into account the transitional provision in IFRS 17.C3(a).
At the same time, IFRS 9 “Financial Instruments”, which supersedes IAS 39, entered into force for the Group and the Company on 1 January 2023. For IFRS 9, the date of the first application was set as 1
229
January 2018, but the Group and the Company exercised the option to temporarily exempt the implementation of the standard until 1 January 2023.
The Group and the Company have not preliminarily adopted any other standard, interpretation or amendment that has been issued but has not yet entered into force.
The adoption of IFRS 17 and IFRS 9 has a significant impact on the consolidated and separate financial statements. The effect of the transition to the new standards is recognised in retained earnings. The adoption of IFRS 17 and IFRS 9 has also led to significant changes in other equity items, notably the accumulated other comprehensive income, which is the fair value reserve under IAS 39.
The following illustrates the main impact of the adoption of IFRS 9 and IFRS 17 by comparing the restated statement of financial position of the Group and of the Company as at 1 January 2022 with the audited statement of financial position of the Group and the Company as at 31 December 2021.
230
Impact of transition to IFRS 17 and IFRS 9
Sava Insurance Group
EUR
31 December 2021(published)(1)
IFRS 17 restatement effect(2)
IFRS 9 restatement effect(3)
Transition impact(4 = 2 + 3)
Other restatements and reallocations(5)
1 January 2022(restated)(6 = 1 + 4 + 5)
ASSETS
Intangible assets and goodwill
67,306,775
-4,696,898
0
-4,696,898
0
62,609,877
Deferred acquisition costs
4,697,567
-4,697,567
0
-4,697,567
0
0
Other intangible assets and goodwill
62,609,208
669
0
669
0
62,609,877
Property, plant and equipment
56,337,174
-4,618
0
-4,618
0
56,332,556
Investment property
14,281,192
-592
0
-592
0
14,280,600
Right-of-use assets
7,386,426
-1,610
0
-1,610
0
7,384,816
Investments in associates accounted for using equity method
20,479,729
0
0
0
0
20,479,729
Deferred tax assets
5,487,403
7,935,939
1,005,913
8,941,852
0
14,429,255
Financial investments
1,990,128,035
-9,610,337
6,506,695
-3,103,642
0
1,987,024,393
Insurance contract assets
172,836,349
-4,815,360
0
-4,815,360
0
168,020,989
Reinsurance contract assets
0
14,379,062
0
14,379,062
0
14,379,062
Reinsurance contract assets
57,767,056
6,478,950
0
6,478,950
0
64,246,006
Receivables
149,610,352
-141,512,348
0
-141,512,348
0
8,098,004
Receivables arising out of primary insurance business
128,544,723
-128,544,723
0
-128,544,723
0
0
Receivables arising out of reinsurance and co-insurance business
9,077,165
-9,077,165
0
-9,077,165
0
0
Trade and other receivables
11,988,464
-3,890,460
0
-3,890,460
0
8,098,004
Current tax liabilities
330,518
0
0
0
0
330,518
Non-current assets held for sale
770,544
0
0
0
0
770,544
Cash and cash equivalents
88,647,678
-3,688
0
-3,688
0
88,643,990
Other assets
4,380,387
-342,270
0
-342,270
0
4,038,117
Deferred acquisition costs
22,572,741
-22,572,741
0
-22,572,741
0
0
Total assets
2,658,322,359
-154,766,510
7,512,608
-147,253,903
0
2,511,068,456
LIABILITIES
Subordinated liabilities
74,863,524
0
0
0
0
74,863,524
Deferred tax liabilities
11,387,395
12,678,415
5,922,735
18,601,150
1,908,279
31,896,824
Insurance contract liabilities
1,761,683,455
-140,580,630
0
-140,580,630
0
1,621,102,825
Reinsurance contract liabilities
1,376,802
0
1,376,802
0
1,376,802
Investment contract liabilities
172,660,266
-4,815,360
0
-4,815,360
0
167,844,906
Provisions
9,018,106
-100,047
0
-100,047
0
8,918,059
Lease liability
7,224,138
416,339
0
416,339
0
7,640,477
Liabilities
52,363,619
-51,778,695
-23,196
-51,801,891
0
561,728
Liabilities from primary insurance business
41,669,619
-41,669,619
0
-41,669,619
0
0
Liabilities from reinsurance and co-insurance business
10,109,076
-10,109,076
0
-10,109,076
0
0
Other operating and financial liabilities
584,924
0
-23,196
-23,196
0
561,728
Current tax liabilities
3,004,684
-8,151
0
-8,151
0
2,996,533
Other liabilities
62,040,155
-21,710,467
0
-21,710,467
0
40,329,687
Total liabilities
2,154,245,342
-204,521,794
5,899,539
-198,622,255
1,908,279
1,957,531,366
EQUITY
Share capital
71,856,376
0
0
0
0
71,856,376
Capital reserves
42,702,320
0
0
0
0
42,702,320
Profit reserves
229,008,079
0
0
0
0
229,008,079
Treasury shares
-24,938,709
0
0
0
0
-24,938,709
Accumulated other comprehensive income
22,547,759
-11,486,736
-9,549,903
-21,036,639
0
1,511,120
Retained earnings
116,166,406
61,173,806
11,162,972
72,336,778
-1,908,279
186,594,905
Net profit or loss for the period
49,623,843
0
0
0
0
49,623,843
Foreign currency translation reserve
-3,256,354
12,330
0
12,330
0
-3,244,024
Equity attributable to owners of the controlling company
503,709,720
49,699,400
1,613,069
51,312,469
-1,908,279
553,113,910
Non-controlling interests in equity
367,298
55,883
0
55,883
0
423,181
Total equity
504,077,018
49,755,283
1,613,069
51,368,352
-1,908,279
553,537,091
Total liabilities and equity
2,658,322,359
-154,766,511
7,512,608
-147,253,903
0
2,511,068,456
231
Sava Re
EUR
31 December 2021(published)(1)
IFRS 17 restatement effect(2)
IFRS 9 restatement effect(3)
Total restatement effect(4 = 2 + 3)
1 January 2022(restated)(5 = 1 + 4)
ASSETS
Intangible assets and goodwill
3,194,031
0
0
0
3,194,031
Property, plant and equipment
2,464,213
0
0
0
2,464,213
Investment property
7,899,693
0
0
0
7,899,693
Right-of-use assets
204,879
0
0
0
204,879
Investments in associates accounted for using equity method
304,554,991
0
0
0
304,554,991
Investments in subsidiaries
19,575,000
0
0
0
19,575,000
Deferred tax assets
3,688,957
2,774,231
-73,544
2,700,688
6,389,645
Financial investments
327,784,595
-9,610,337
1,450,778
-8,159,558
319,625,037
Investment contract assets
0
0
0
Insurance contract assets
3,063,438
0
3,063,438
3,063,438
Reinsurance contract assets
48,486,444
7,582,052
0
7,582,052
56,068,497
Receivables
79,803,172
-79,540,948
0
-79,540,948
262,226
Receivables arising out of primary insurance business
74,410,185
-74,410,185
0
-74,410,185
0
Receivables arising out of reinsurance and co-insurance business
5,125,596
-5,125,596
0
-5,125,596
0
Trade and other receivables
267,390
-5,166
0
-5,166
262,226
Current tax assets
0
0
0
0
0
Non-current assets held for sale
0
0
0
0
0
Cash and cash equivalents
28,806,817
0
0
0
28,806,817
Other assets
746,809
0
-764
-764
746,043
Deferred acquisition costs
4,869,156
-4,869,156
0
-4,869,156
0
Total assets
832,078,758
-80,600,719
1,376,471
-79,224,248
752,854,509
LIABILITIES
Subordinated liabilities
74,863,524
0
0
0
74,863,524
Deferred tax liabilities
76,227
3,343,343
259,954
3,603,297
3,679,523
Insurance contract liabilities
331,812,724
-40,365,818
0
-40,365,818
291,446,906
Reinsurance contract liabilities
0
766,545
0
766,545
766,545
Investment contract liabilities
0
0
0
0
0
Provisions
421,865
0
0
0
421,865
Lease liability
203,730
0
0
0
203,730
Liabilities
46,148,843
-46,148,843
0
-46,148,843
0
Liabilities from primary insurance business
39,556,034
-39,556,034
0
-39,556,034
0
Liabilities from reinsurance and co-insurance business
6,592,809
-6,592,809
0
-6,592,809
0
Current tax liabilities
394,752
0
0
0
394,752
Other liabilities
6,991,093
-622,148
0
-622,148
6,368,945
Total liabilities
460,912,758
-83,026,921
259,954
-82,766,967
378,145,790
EQUITY
Share capital
71,856,376
0
0
0
71,856,376
Capital reserves
54,239,757
0
0
0
54,239,757
Profit reserves
229,238,622
0
0
0
229,238,622
Treasury shares
-24,938,709
0
0
0
-24,938,709
Accumulated other comprehensive income
3,716,228
-3,604,872
-3,270,615
-6,875,487
-3,159,259
Retained earnings
10,633,662
6,031,074
4,387,132
10,418,206
21,051,868
Net profit or loss for the period
26,420,064
0
0
0
26,420,064
Foreign currency translation reserve
0
0
0
0
0
Equity attributable to owners of the controlling company
371,166,000
2,426,202
1,116,517
3,542,719
374,708,719
Non-controlling interests in equity
0
0
0
0
0
Total equity
371,166,000
2,426,202
1,116,517
3,542,719
374,708,719
Total liabilities and equity
832,078,758
-80,600,719
1,376,471
-79,224,248
752,854,509
In the following, we describe the most significant changes in the statement of financial position of the Group and the Company:
•A decrease in long-term deferred acquisition costs and insurance and reinsurance receivables and liabilities, which have been reclassified to insurance and reinsurance contract assets.
•Technical provisions have been replaced by the items insurance and reinsurance contract assets. The valuation of insurance and reinsurance contract assets is mainly affected by:
232
a.the use of the best estimate of assumptions instead of a conservative estimate of assumptions (positive impact);
b.discounting all of the Group’s liabilities using a risk-free interest rate plus a liquidity premium (positive effect);
c.recognition of expected future profits for portfolios valued using the BBA and VFA approaches in the CSM (negative effect).
•The change in the amount of investments is due to the transition to IFRS 17, in particular to the reclassification of deposits from cedants and part of the investment contract assets, and to the change in the valuation model for equity investments.
•Deferred taxes are accounted for and calculated based on the afore-mentioned changes.
•Other restatements and allocations represent the correction of an incorrectly accounted deferred tax liability on the allocation of the purchase price from the 2019 acquisition of Sava Penzisko Društvo (MKD).
•The effects of the afore-mentioned changes are reflected in the changes in Group and Company equity.
Presentation of the transition impact on accumulated other comprehensive income and retained earnings
EUR
Group
Sava Re
Accumulated other comprehensive income
Accumulated other comprehensive income
Closing balance as at 31 December 2021 (audited)
22,547,759
3,716,228
Reclassification of debt instruments from available-for-sale to amortised cost
-14,081,754
-4,277,279
Recognition of expected credit losses under IFRS 9 for debt financial assets at FVOCI
2,000,157
239,484
Deferred tax relating to the application of IFRS 9
2,531,694
767,180
Recognition of changes in interest rates in insurance and reinsurance contracts
-15,428,942
-4,450,459
Deferred tax relating to the application of IFRS 17
3,942,206
845,587
Opening balance under the new standards (1 January 2022)
1,511,120
-3,159,259
Retained earnings of previous years
Closing balance as at 31 December 2021 (audited)
116,166,406
10,633,662
Impact of initial application of IFRS 17
74,482,491
7,445,770
Deferred tax relating to the application of IFRS 17
-13,308,685
-1,414,696
Recognition of ECL under IFRS 9, including those measured at FVOCI
13,964,533
5,487,813
Deferred tax relating to the application of IFRS 9
-2,801,561
-1,100,681
Opening balance under the new standards (1 January 2022)
188,503,184
21,051,868
Prior-period restatements*
-1,908,279
0
Opening balance under new standards, including prior-period restatements (1 January 2022)
186,594,905
21,051,868
* Adjustment to calculated deferred tax on the acquisition of Sava Penzisko (2019).
EUR
Group
Sava Re
Total change in equity (net of tax) resulting from adoption of new standards
Accumulated other comprehensive income
-9,549,903
-3,270,615
Retained earnings of previous years
11,162,972
4,387,132
Total change in equity resulting from adoption of IFRS 9
1,613,069
1,116,517
Accumulated other comprehensive income on insurance and reinsurance contracts
-11,486,736
-3,604,872
Retained earnings of previous years
61,173,806
6,031,074
Foreign currency translation reserve
12,330
0
Non-controlling interests in equity
55,883
0
Total change in equity resulting from adoption of IFRS 17
49,755,283
2,426,202
16.6.1 Transition to IFRS 17 “Insurance Contracts”
The Group and the Company have performed an assessment of each group of contracts to determine the possible transitional approaches provided by the standard. As required, a fully retrospective approach has been adopted, unless this was considered impracticable for the group of contracts under
233
consideration. In all other cases, either the modified retrospective approach or the fair value approach has been adopted instead.
Full retrospective approach
At the transition date of 1 January 2022, the Group and the Company:
•identified, recognised and measured each group of insurance contracts, as if IFRS 17 had always applied,
•identified, recognised and measured all assets for insurance acquisition cash flows, as if IFRS 17 had always applied,
•derecognised any existing balances that would not exist had IFRS 17 always applied and
•recognised any resulting net difference in equity.
Contracts measured under the modified retrospective approach
The Group assessed historical information available and determined that all reasonable and supportable information necessary for applying the full retrospective approach were not available for all groups of insurance contracts issued before the transition date. The Group elected to apply the modified retrospective approach for some groups of contracts, depending on the entity in the Group, its portfolios, years of initial recognition of a group of contracts and the measurement method, which was intended to achieve the closest possible outcome to the full retrospective application maximising the use of available information.
The Group and the Company applied modifications in the following areas:
•estimation of expected future cash flows and risk adjustment for non-financial risk as at the date of initial recognition,
•determination of the CSM for direct participating contracts and other insurance contracts,
•determination of finance income or expenses from insurance contracts,
Expected cash flows
The Group and the Company estimated the cash flows at the date of initial recognition by estimating these cash flows at the date of transition, adjusted by actual cash flows that were known to have occurred between then and the date of initial recognition. These also included cash flows from contracts that had ceased to exist by the date of transition.
Discount rates
In case of business without direct participation features the Group and the Company had reasonable and supportable information to determine discount rates according to IFRS 17 requirements from 31 December 2003 on. For incurred claims before 31 December 2003, discount rates as at 31 December 2003 were used. On the other hand, in case of business with direct participation features (VFA method) only discount rates from 31 December 2021 were used, in accordance with the requirements of the standard.
Risk adjustment for non-financial risk
The Group estimated the amount of risk adjustment for non-financial risk at the date of transition. The cash flows for past risk adjustment releases were estimated by assuming that these releases are proportionate to coverage units for a given period. Specifically, past risk adjustment releases for a given period were estimated by multiplying the coverage unit for the given period with the ratio between the risk adjustment release and the expected coverage unit of the first projection period following the transition date. This has been performed on the level of a group of contracts.
234
Insurance acquisition cash flows
The Group and the Company allocated the insurance acquisition cash flows that occurred during the period from the initial recognition date until the transition date using a systematic and rational allocation method between groups of insurance contracts recognised until the transition date. No insurance acquisition cash flows were allocated to groups that are expected to be recognised after the transition date according to accepted methodology for IFRS 17 measurement.
CSM and loss component
For the business without direct participation features, the CSM at transition date was determined by first estimating the CSM at initial recognition and then decreasing this amount according to the share of service provided during the period until transition (i.e., in the same way as in case of the full retrospective approach).
If there was a loss component estimated at the date of initial recognition, then the Group and the Company determined the amounts allocated to the loss component before the date of transition using a systematic basis of allocation in the same way as in the case of the full retrospective approach.
In the case of VFA, the Group calculated the CSM or loss component at a transition date as a result of the total underlying items value minus present value of future cash flows minus/plus adjustments for amounts charged and paid to policyholder before transition, the release for risk adjustment for non-financial risk and insurance acquisition cash flows paid before the transition. If such amount results in CSM, it is adjusted for an amount of the contractual service margin that relates to services provided before that date. If a loss component is calculated, it is adjusted to nil and LRC excluding loss component is increased by the same amount at a transition date.
For groups of contracts, measured under PAA, a modified retrospective approach was applied, because LRC was estimated at a transition date. In case of onerous groups of contracts measured under PAA, LRC was adjusted for a loss component, estimated at a transition date.
Reinsurance contracts held
For a group of reinsurance contracts held that was purchased before or at the same time the underlying insurance contracts were issued, the Group determines the loss-recovery component of the asset for remaining coverage at the transition by multiplying the loss component of the liability for remaining coverage for the underlying insurance contracts at the transition date with the percentage of claims for the group of underlying onerous insurance contracts that the Group expects to recover from the group of reinsurance contracts held.
Where the Group and the Company did not have reasonable and supportable information to determine the loss-recovery component of the asset for remaining coverage, the Group and the Company did not identify such loss-recovery component.
Insurance revenue
For those groups of contracts for which coverage has expired at the transition date, there is no revenue recognised after the date of transition, except in case of experience adjustments due to subsequent payments or refunds of premiums or change in premium receivables. If there is still coverage remaining after the date of transition, revenue for such groups is recognised.
For groups of contracts, other than direct participating contracts, that were determined to be onerous at the date of transition, the loss component was estimated at the transition date.
For direct participating contracts with remaining coverage that at transition date were determined to have been onerous on initial recognition, the Group does not track any loss component. Revenue is recognised in the same way as for other non-onerous groups of contracts. Subsequent increase in the Group’s share of the fair value of the underlying items will create a CSM, which would then be allocated to the period and included in the determination of the period’s revenue.
235
Finance income or expenses from insurance contracts
The Group and the Company have elected a disaggregated presentation of finance income or expenses from insurance contracts for all portfolios. The cumulative amount recognised in OCI at the date of transition was estimated as:
•In case of BBA, OCI was calculated in the same way as in case of full retrospective method.
•For those direct participating contracts for which the Group holds the underlying items and are measured applying VFA, the opening cumulative amount of OCI at transition date was set to correspond to the amount of the underlying items at transition date.
•For non-life insurance and reinsurance contracts issued, accounted applying the PAA, the cumulative amount of OCI in case of LIC was calculated as a difference in LIC applying current and locked-in discount rate at the date of transition.
Accounting estimates made in interim financial statements
The Group and the Company chose the annual reporting accounting policy choice therefore interim financial statement do not influence the determination of CSM or loss component at the transition date.
Contracts measured applying the fair value approach
The Group concluded that reasonable and supportable information for application of the modified retrospective approach was not available for all insurance contracts issued before the date of transition, depending on the entity in the Group, and therefore applied the fair value approach for those contracts. Also, the Company applied the fair value approach for some reinsurance contracts issued, covering underlying contracts in the Group. The Group and the Company used reasonable and supportable information available at the transition date to:
•identify groups of insurance contracts,
•determine whether an insurance contract meets the definition of an insurance contract with direct participation features,
•identify discretionary cash flows for insurance contracts without direct participation features.
Level of aggregation
The Group included contracts into groups of contracts issued within one year apart.
Measurement at the transition date
In applying the fair value approach at the transition date, the CSM or loss component of the LRC was estimated as the difference between the fair value and the fulfilment cash flows of the group of contracts as of that date. In determining fair value, the requirements of IFRS 13 Fair Value Measurement were followed, except for that standard’s requirement in relation to demand features (that fair value cannot be less than the amount repayable on demand). This is because it would contradict the IFRS 17 requirement to incorporate cash flows on a probability-weighted basis.
Discount rates
The Group used discount rates as at the date of transition for fair value approach.
Insurance acquisition cash flows
The Group included all insurance acquisition cash flows paid before the transition in the measurement of the groups of insurance contracts recognised at the transition date, except for the contracts that already ceased before transition date. Consequently, no assets for insurance acquisition cash flows at
236
the transition date were recognized. Additionally, it was assumed that all acquisition costs were already amortised until the transition date due to lack of reasonable and supportable information.
Finance income or expenses from insurance contracts
The Group and the Company chose to disaggregate the presentation of finance income or expenses from insurance contracts and determined the cumulative amount recognised in OCI as follows:
•for those direct participating contracts for which the Group holds the underlying items and are measured applying VFA, the opening cumulative amount of OCI at transition date was set to correspond to the amount of the underlying items at transition date, and
•nil for all other contracts.
Reinsurance contracts held
For a group of reinsurance contracts held the Group determines the loss-recovery component of the asset for remaining coverage at transition by multiplying the loss component of the liability for remaining coverage for the underlying insurance contracts at the transition date with the percentage of claims for the group of underlying onerous insurance contracts that the Group expects to recover from the group of reinsurance contracts held.
Where the Group and the Company did not have reasonable and supportable information to determine the loss-recovery component of the asset for remaining coverage, the Group and the Company did not identify such loss-recovery component.
Acquired insurance contracts
The Group chose to classify as a liability for incurred claims the liability for settlement of claims incurred before a group of insurance contracts was acquired in a portfolio transfer or a business combination within the scope of IFRS 3 Business Combinations.
The effect of groups of insurance contracts measured at the transition date applying the modified retrospective approach or the fair value approach on the contractual service margin and insurance revenue in subsequent periods is shown in note 16.8.10 Movement in liabilities for remaining coverage (LRC) and liabilities for incurred claims (LIC) – insurance contracts issued and note 16.8.12 Movement in individual components of insurance contracts.
16.6.2 Transition to IFRS 9 “Financial Instruments”
The Group and the Company adopted IFRS 9 from 1 January 2023 and have prepared comparative financial statements for the 2022 financial year. The Group and the Company have used the “classification overlay approach” described below to prepare comparative data for 2022.
At the date of initial application, the Group and the Company:
•assessed whether a financial asset meets the conditions for classification, considering the selected business model and contractual cash flow characteristics, based on the facts and circumstances existing at that date. The resulting classification was applied retrospectively irrespective of the entity’s business model in prior reporting periods;
•designated all financial assets that are measured at fair value through profit or loss;
•designated investments in equity instruments as measured at fair value through other comprehensive income;
•designated financial liabilities measured at fair value through profit or loss;
•assessed whether a financial asset is in a low credit risk category.
237
Such assessment or designation was made on the basis of the facts and circumstances existing at the date of initial application. That classification was applied retrospectively.
Assets measured at amortised cost in accordance with IFRS 9 are deposits with a maturity of more than three months, loans and debt securities classified as hold to collect at the date of transition to IFRS 9 that the Group and the Company will hold to maturity.
Under IAS 39, the Group and the Company classified most of their financial assets in the form of debt securities as available for sale (AFS). These financial assets have been classified in accordance with IFRS 9 into one of the following groups: at fair value through other comprehensive income or at fair value through profit or loss. Under IFRS 9, the Group and the Company may classify debt securities in the fair value through other comprehensive income (FVOCI) measurement category provided that the contractual cash flows are solely repayment of principal and interest (pass the SPPI test).
Most of the equity instruments that were classified as available for sale (AFS) under IAS 39 are classified as at fair value through profit or loss (FVTPL), while there is an option to designate shares and participations at fair value through other comprehensive income (FVOCI) under the standard. Other types of investments, such as units in collective investment undertakings, ETFs, alternative funds, etc. which were classified as available-for-sale (AFS) under IAS 39, were reclassified to the fair value through profit or loss (FVTPL) measurement category.
238
Reclassification of financial investments and presentation of the effect on the Sava Insurance Group
39 MRS
Subsequent measurement
IFRS 9
Financial assets (EUR)
Category
Amount
Reclassification
ECL
Other
Amount
Category
Deposit and CD
LR
18,561,698
-
-343,151
-
18,218,547
AC
Loans granted*
LR
126,161
-
-
-
-
Loans granted
LR
1,548,376
-
-29,833
-
1,518,543
AC
Cedants
LR
9,610,337
-
-
-
-
Total LR/AC
LR
29,846,572
0
-372,983
0
19,737,091
AC
HTM financial investments
HTM
40,023,124
-40,023,124
-
-
-
– Reclassified to debt investments at AC
HTM
-
-40,023,124
-56,343
-
-
Debt instruments at AC (from HTM)
-
40,023,124
-56,343
-
39,966,781
AC
Effect of IFRS 17 (Financial Contracts)
-
-
-
-
-3,349,096
AC
ECL effect in Group
-
-
-26,048
-
-26,048
AC
Total HTM/AC
HTM
40,023,124
0
-82,391
0
36,591,638
AC
AFS financial investments
1,368,432,673
-1,368,432,673
-
-
-
– Reclassified to debt investments at FVOCI
-
-1,233,810,051
-1,844,004
1,844,004
-
– Reclassified to debt investments at FVTPL
-
-7,502,546
-
-
-
– Reclassified to equity investments at FVTPL
-
-105,745,268
-
-
-
– Reclassified to equity investments at FVOCI (option)
-
-21,374,809
-
-
-
Total AFS
AFS
1,368,432,673
-1,368,432,674
-1,844,004
1,844,004
0
Debt instruments at FVOCI (from AFS)
-
1,233,810,051
-
-
1,233,810,051
FVOCI
Equity instruments at FVOCI (option) (from AFS)
-
21,374,809
-
-
21,374,809
FVOCI
Effect of IFRS 17 (Financial Contracts)
-
-
-
-
6,304,614
FVOCI
Total FVOCI
0
1,255,184,860
0
0
1,261,489,474
FVOCI
Equity instruments at FVTPL (from AFS)
-
105,745,268
-
-
105,745,268
FVTPL
Effect of change in model valuation
-
-
-
-
1,858,910
FVTPL
Effect of IFRS 17 (Financial Contracts)
-
-
-
-
2,314,904
FVTPL
Debt instruments at FVTPL (from FVOCI)
-
7,502,546
-
-
7,502,546
FVTPL
Financial assets at FVTPL (designated)
34,386,074
-34,386,074
-
-
-
FVTPL
Financial assets at FVTPL (mandatory)
-
34,386,074
-
-
34,386,074
FVTPL
Total FVPL/FVTPL
34,386,074
113,247,814
0
0
151,807,703
FVTPL
Total financial investments under IAS 39
1,472,688,443
0
-2,299,379
1,844,004
1,469,625,906
Assets held for the benefit of policyholders who bear the investment risk
Investments in deposits at amortised cost
LR
2,008,600
-
-38,593
-
1,970,007
AC
HTM financial investments
HTM
4,078,892
-4,078,892
-
-
-
239
* The value refers to loans that are treated as liabilities after the transition to IFRS 17.
Expected credit losses (ECL)
EUR
Balance of impairment allowance under IAS 39
Reclassification
ECL under IFRS 9 as at 1 January 2022
Loans and credits granted from LR / Loans, credits granted at AC
0
411,576
411,576
HTM debt securities under IAS 39 / AC debt instruments under MSRP 9
0
83,943
83,943
AFS debt securities under IAS 39 / FVOCI debt instruments under MSRP 9
439,496
2,000,158
2,439,654
Total
439,496
2,495,677
2,935,173
39 MRS
Subsequent measurement
IFRS 9
Financial assets (EUR)
Category
Amount
Reclassification
ECL
Other
Amount
Category
Reclassified to debt investments at AC
HTM
-
-4,078,892
-1,551
-
-
Debt instruments at AC (from HTM)
-
4,078,892
-1,551
-
4,077,341
AC
Total HTM/AC
HTM
4,078,892
0
-1,551
0
4,077,341
AC
AFS financial investments
62,859,271
-62,859,271
-
-
-
– Reclassified to debt investments at FVOCI
-
-60,882,191
-156,154
156,154
-
– Reclassified to equity investments at FVTPL
-
-1,977,080
-
-
-
Total AFS
AFS
62,859,271
-62,859,271
-156,154
156,154
0
Debt instruments at FVOCI (from AFS)
-
60,882,191
-
-
60,882,191
FVOCI
Equity instruments at FVOCI (from AFS)
-
1,977,080
-
-
1,977,080
Total FVOCI
0
62,859,271
0
0
62,859,271
FVOCI
Financial assets at FVTPL (designated)
448,492,829
-448,492,829
-
-
-
FVTPL
Financial assets at FVTPL (mandatory)
-
448,492,829
-
-
448,491,870
FVTPL
Total FVPL/FVTPL
448,492,829
0
0
0
448,491,870
FVTPL
Total assets held for the benefit of policyholders who bear the inv. risk
517,439,592
0
-196,298
156,154
517,398,488
Total financial investments under IFRS 9
1,990,128,035
0
-2,495,677
2,000,158
1,987,024,394
Cash and cash equivalents
LR
88,647,678
-
-
-
88,643,990
AC
Total cash and cash equivalents
28,806,817
0
0
0
28,806,817
Total financial assets
2,018,934,852
0
-2,495,677
2,000,158
2,015,831,211
HTM financial liabilities
HTM_L
-74,863,524
74,863,524
-
-
-
Reclassified to: AC financial liabilities
-
74,863,524
-
-
-
AC financial liabilities (from HTM)
-
-74,863,524
-
-
-74,863,524
AC_L
Total HTM_l/AC_L
HTM_L
-74,863,524
0
0
0
-74,863,524
AC_L
Total financial liabilities
-74,863,524
0
0
0
-74,863,524
240
Reclassification of financial investments and presentation of impact on Sava Re
Financial assets (EUR)
39 MRS
Reclassification
Subsequent measurement
IFRS 9
Category
Amount
ECL
Other
Amount
Category
Deposits from cedants
LR
9,610,337
-
-
-
-
Loans granted
LR
2,572,973
-
-49,419
-
2,523,554
AC
Total LR/AC
LR
12,183,310
0
-49,419
0
2,523,554
AC
HTM financial investments
HTM
2,816,979
-2,816,979
– Reclassified to debt investments at AC
HTM
-
-2,816,979
-17,001
-
-
Debt instruments at AC (from HTM)
-
2,816,979
-17,001
-
2,799,977
AC
Total HTM/AC
HTM
2,816,979
0
-17,001
0
2,799,977
AC
AFS financial investments
303,501,261
-303,501,261
-
-
-
– Reclassified to debt investments at FVOCI
-
-271,786,710
-239,484
239,484
-
– Reclassified to equity investments at FVTPL
-
-31,714,551
-
-
-
Total AFS
AFS
303,501,261
-303,501,261
-239,484
239,484
0
Debt instruments at FVOCI (from AFS)
-
271,786,710
-
-
271,786,710
FVOCI
Total FVOCI
0
271,786,710
0
0
271,786,710
FVOCI
Equity instruments at FVTPL (from AFS)
-
31,714,551
-
-
31,714,551
FVTPL
Effect of change in model valuation
-
-
-
1,517,200
FVTPL
Financial assets at FVTPL (designated)
FVTPL
9,283,045
-9,283,045
-
-
FVTPL
Financial assets at FVTPL (mandatory)
FVTPL
-
9,283,045
-
-
9,283,045
FVTPL
Total FVPL/FVTPL
FVTPL
9,283,045
31,714,551
0
0
42,514,796
FVTPL
Total financial investments
327,784,595
0
-305,905
239,484
319,625,038
Cash and cash equivalents
LR
28,806,817
-
-
-
28,806,817
AC
Total cash and cash equivalents
28,806,817
0
0
0
28,806,817
Total financial assets
356,591,412
0
-305,905
239,484
348,431,855
HTM financial liabilities
HTM_L
-74,863,524
74,863,524
-
-
-
– Reclassified to financial liabilities at AC
-
74,863,524
-
-
-
AC financial liabilities (from HTM)
-
-74,863,524
-
-
-74,863,524
AC_L
Total HTM_l/AC_L
HTM_L
-74,863,524
0
0
0
-74,863,524
AC_L
Total financial liabilities
-74,863,524
0
0
0
-74,863,524
Expected credit losses (ECL)
EUR
Balance of impairment allowance under IAS 39
Reclassification
ECL under IFRS 9 as at 1 January 2022
Loans and credits granted from LR / loans and credits granted at AC
0
49,419
49,419
HTM debt securities under IAS 39 / AC debt instruments under MSRP 9
0
17,001
17,001
AFS debt securities under IAS 39 / FVOCI debt instruments under MSRP 9
439,496
239,484
678,981
Total
439,496
305,905
745,401
241
Equity instruments classified as FVOCI
The Group has elected to designate certain equity securities to be measured at fair value through other comprehensive income (FVOCI). These instruments are not held for trading, and at initial recognition the Group has made an irrevocable election to designate them to this category.
The cumulative gains and losses recognised in accumulated other comprehensive income are reclassified to retained earnings on disposal of such instruments.
The Group has elected to reclassify to other comprehensive income the changes in the fair value of equity securities held for the long term for strategic purposes. These investments are not expected to be sold in the short to medium term. Previously, these investments were classified as available for sale. As a result, assets with a fair value of EUR 21,374,809 were reclassified from available-for-sale financial assets to financial assets at FVOCI. As a result of the reversal of the permanent impairment of available-for-sale equity investments, EUR 735,670 of the fair value reserve was reclassified to retained earnings on 1 January 2022.
For a detailed overview of securities classified as FVOCI, see section 16.8.7, table “Equity securities classified as FVOCI”.
16.7 Risk management 121
The main risk categories that the Group is exposed to are:
•insolvency risk,
•underwriting risks (non-life underwriting risks, life underwriting risks, health underwriting risks),
•financial risks (market risks, liquidity risks, credit risks, risk of failure to realise interest-rate guarantees),
•operational risk, and
•strategic risk.
The following table shows a summary of risks in 2023.
Risk profile of Sava Insurance Group and Sava Re
Risks
Summary of risks in 2023
Risk described in section
Insolvency risk
The Group and the Company ensure an adequate level of excess capital. During 2023, the Group’s capital adequacy in accordance with the Solvency II standard formula remained within the target capital range as defined in the risk strategy and well above regulatory requirements. Throughout 2023, Sava Re’s capital adequacy was consistently assessed to be above the optimal level of the solvency ratio as defined in the risk strategy and significantly above regulatory requirements.
16.7.2
Underwriting risks
In terms of capital requirements, the Group’s most significant risks include non-life, life, and health underwriting risks. These risks are managed appropriately and remain at similar levels to last year. In non-life insurance business, the premium and reserve risk decreased slightly and the catastrophe risk increased slightly. The risk of claims inflation continues to be a concern for non-life insurance business. Sava Re is mainly exposed to non-life underwriting risks, which remained unchanged compared to 2022.
16.7.3
Financial risks
The Group and the Company ensure the appropriate management of financial risks. Exposure to these risks is actively monitored and managed, and appropriate diversification of the investment portfolio and management of assets and liabilities is ensured. Financial risks did not increase further in 2023 compared to 2022. The investment policy
16.7.4
121 GRI 3-3.
242
Risks
Summary of risks in 2023
Risk described in section
was adapted to the changed circumstances. The Group and the Company maintain a sufficient level of highly liquid investments.
Operational risks
The Group and the Company actively manage operational risks by continuously improving the internal control environment and processes. Operational risks increased slightly compared to the previous year, mainly due to a slight increase in risks related to data privacy and security and operational risks related to the adoption of the new accounting standard IFRS 17.
16.7.5.
Strategic risks
Strategic risks are an important risk category for the Group and Sava Re due to the uncertain geopolitical environment and the associated unpredictability. The risks are at a similar level compared to last year. The strategic risks section also discusses sustainability risk and climate change risk. The Group and the Company strive to limit the risks sufficiently and to respond and adapt effectively to changes in the environment.
16.7.6
The following is an overview of risks in terms of the potential volatility of business results and the resulting impact on the financial statements of the Group and the Company. Sensitivity analyses are included for each risk group, showing the impact on profit or loss and accumulated other comprehensive income (AOCI).
The potential impact of an extreme internal or external risk materialising and its impact on the Group’s and the Company’s solvency position will be addressed in the Solvency and Financial Condition Report of the Sava Insurance Group for 2023, which will be posted on the Sava Re website on 17 May 2024, and in the Solvency and Financial Condition Report of Sava Re d.d. for 2023, which will be posted on the Company’s website on 5 April 2024.
16.7.1 Key challenges and associated risks
16.7.1.1 Geopolitical uncertainty and the macroeconomic environment
The uncertain geopolitical situation continued in 2023. The war between Russia and Ukraine continued, and later in the year the military conflict between Israel and Hamas began. The Sava Insurance Group and Sava Re reviewed their exposures at the outbreak of the military conflict and found that there were no material exposures in the region. Tensions between China and Taiwan intensified in 2023. Increasing cooperation between Russia, Iran and North Korea also poses a threat to global stability. Mounting trade restrictions on the strategic positioning of imports and exports of key minerals and rare metals could lead to high price volatility and congestion in supply chains in the future. These frictions also affect the free movement of goods and international trade. Elections will be held in no fewer than 40 countries around the world next year, and the results and changes in the ruling political parties could further influence the geopolitical situation.
From a stock market perspective, 2023 was a good year for equities and bonds, outperforming expectations. The US economy proved resilient, avoiding a recession despite high interest rate hikes and even achieving better-than-expected economic growth of 2.9% in the third quarter 122. In Europe, there was no GDP growth 123, while Slovenia achieved 1.6% GDP growth in 2023, and the other countries where the Group is present had slightly higher growth 124. At the same time, strong deflation was observed in 2023. In the eurozone, the US and other developed countries, inflation is falling as a result of central banks’ rather restrictive monetary policies. The downturn heralds the likely end of interest rate hikes. Forecasts for 2024 currently point to a further decline in inflation. Corporate bond
122 https://tradingeconomics.com/united-states/gdp-growth-annual
123 https://tradingeconomics.com/euro-area/gdp-growth-annual
124 Source: UMAR, Economic Mirror, No. 1/2024, IMF, World Economic Outlook, October 2023, www.statista.com.
243
spreads have narrowed in 2023, and companies are expected to start refinancing and issuing new debt at lower costs in 2024. Uncertainty about economic growth in Europe is relatively high.
The Group and the Company monitor potential systemic risks with a view to taking timely action. They reduce their exposure to such risks by, among other things, ensuring adequate diversification of the investment portfolio and a sufficient percentage of highly liquid assets to meet extraordinary liquidity needs. The impact of individual scenarios and events is also considered as part of the own risk and solvency assessment (ORSA). The basis for conducting the 2024 ORSA (which was reported to the regulator in March 2024) is the business plan of Sava Re and the Sava Insurance Group for 2024 confirmed in December 2023, and the financial projections for 2025 and 2026. The capital adequacy projections in the 2024 ORSA confirmed that, over the entire strategy period, the solvency position was compliant with both statutory provisions and the Group’s and the Company’s internal rules, ensuring continuous and adequate liquidity. Scenario analyses showed that both the Sava Insurance Group and Sava Re have a robust solvency ratio resilient to various adverse scenarios as the solvency remains well above the regulatory level even if a scenario materialises.
16.7.1.2 Challenges for the insurance industry
Claims inflation
The impacts of claims inflation were diminishing in 2023. The risk of a decline in the profitability of the non-life insurance business due to claims inflation in motor and property insurance was regularly monitored and the impact analysed. The necessary measures have been taken to maintain an appropriate level of profitability in the insurance business, in particular through repeated adjustments to premium rates. On the other hand, the assets and liabilities of (re)insurance contracts have been adjusted to take account of future inflation. The impact of claims inflation was also monitored on a quarterly basis through the periodic risk reports.
Zavarovalnica Sava maintained its profitability through rate increases, largely offsetting the effect of the increase in average claims. At the end of the year, no significant additional upward pressure on prices from claims inflation was observed in Slovenia.
In the non-EU companies, a significant impact of claims inflation was seen somewhat later, in the first half of 2023, while no major impact was seen in the second half of the year. The Sava Insurance Group continues to monitor and analyse the impact on its subsidiaries and is taking the necessary measures to mitigate it.
Claims inflation was also reflected in the reinsurance markets, where we saw an increase in sums insured in 2023, with an increase in retentions. In both the domestic and international reinsurance markets, other factors (including increased loss frequency in some markets, macroeconomic conditions, geopolitical conflicts and the prevailing hard market) influenced the renewal of reinsurance treaties in 2023, further tightening conditions and thus making the renewal of reinsurance protection more challenging. Despite the difficult environment, the Group obtained adequate reinsurance protection in 2023.
In the renewal of its accepted business in 2023, Sava Re continued to focus on appropriate portfolio diversification and adjustments to the pricing and terms of reinsurance treaties (war risk exclusions, sanctions clauses, specific exclusions and limits of cover). It also continued its efforts to reduce the discrepancies between reinsurance accepted and retrocessional cover.
In the period ahead, trends in the renewal of reinsurance programmes at 1 January 2024 suggest a gradual stabilisation of the market, which will have a moderating effect on rates and expectations in the reinsurance markets.
244
Natural catastrophes in 2023
During the summer months, Slovenia and certain other countries in which the Group has a presence were hit by a wave of storms and floods that caused significant property damage. The gross claims resulting from these events totalled EUR 88.3 million in 2023. Taking into account reinsurance protection, the impact of these events on the Group’s profit was EUR 27.4 million. Zavarovalnica Sava had the largest impact on profit (EUR 26.4 million).
As expected, these events have had an impact on the renewal of reinsurance protection, in particular on the price of reinsurance, changes to individual reinsurance programmes, the willingness of partners to renew shares and also the willingness of the reinsurance markets to renew a particular type of reinsurance protection. All this resulted in an increased risk of obtaining adequate reinsurance protection, to which Sava Re responded by securing adequate reinsurance protection for the next financial year.
16.7.1.3 Climate change and transition to sustainable business
Climate change is a significant sustainability risk for the Sava Insurance Group and Sava Re, as it has a direct and indirect impact on their business activities, and monitoring and managing this risk is crucial for the Group’s long-term performance. Climate change is a serious risk for society and the economy, and for the business of insurance and reinsurance companies.
The Group monitors climate risk, including physical and transition risks. Physical risks are those that arise from the physical effects of climate change. Transition risks are those that arise from the transition to a low-carbon and climate-resilient economy.
Given its activity, physical risks are extremely important for the Group, and the harmful effects of global warming on natural and human systems are already visible today. The Group and the Company consider the risk of an increase in the severity and frequency of extreme weather events and natural catastrophes due to climate change to be a key physical risk. Without further international action on climate change, average global temperatures will continue to rise, potentially increasing underwriting risk through greater loss unpredictability or exposure to natural catastrophes. Monitoring the development of such events will therefore be very important in the future.
Also significant for the Group is transition risk, which relates to potential material negative impact on the value of investments and other significant effects on its business operations.
Transition and physical risks are, and will continue to be, extremely important for the Group’s companies, so they are subject to constant Group-level monitoring. Climate risk was also analysed (qualitatively and quantitatively) in the ORSA.
There is a high level of awareness within the Group that there are many challenges and risks associated with the Group’s transition to sustainable business. Monitoring and reporting on risks related to sustainable development and social responsibility has been established. There is also a strong focus on effective and meaningful implementation of sustainability legislation.
16.7.1.4 Cyber risk
Cyber risks were among the key operational risks in 2023. Monitoring and managing these risks will become increasingly important for the Sava Insurance Group. The realisation of cyber risks can lead to a complete disruption of operations and high financial losses, while also affecting the Group’s reputation. Therefore, additional risk mitigation measures are being planned and implemented at Group level, in addition to those already in place. These include the establishment of an information security team, the development of a cyber incident response plan, the integration of a multifactor user authentication system and the establishment of a database protection system. Major cyber risks identified include ransomware, malware, social engineering, data breaches and theft, and denial of
245
service. Security threats and incidents are also regularly monitored through the Security Operations Centre (SOC).
In 2023, the Sava Insurance Group has taken an active approach to planning activities to comply with the new DORA 125 regulation for all companies in the Group. The legislation, which comes into force on 17 January 2025, sets new network and information security requirements for financial institutions. Activities will be led at Group level by a formally established project team and include ICT risk management, ICT incident reporting, digital operational resilience testing, third-party ICT risk management and the establishment of information sharing processes.
16.7.1.5 Risk assessment and the going-concern assumption
Despite the challenging environment, the Sava Insurance Group exceeded its planned profit for 2023. The impact of events (mainly catastrophe claims and claims inflation) on the solvency ratio was also monitored quarterly throughout 2023, at both Group and company level. Estimates show that their solvency ratios in 2023 were significantly above the regulatory requirement and in line with internal criteria. For both the Sava Insurance Group and Sava Re, risks are continuously identified, monitored, analysed and managed, and the necessary decisions and adjustments are made.
A possible deterioration of the macroeconomic and geopolitical situation may have an adverse impact on the assets and liabilities of the Sava Insurance Group and Sava Re also in 2024.This may have a direct or indirect impact on the Group’s and the Company’s business. The solvency of the Sava Insurance Group and Sava Re may also be affected, but it is not expected to be compromised given their strong capitalisation. Liquidity risk is well managed in both the Group and Sava Re, and no significant increase in liquidity risk is expected over the next 12 months. For Sava Re, the going concern assumption continues to apply, based on the expected cash flow from the core business and the composition of the investment portfolio, which can provide sufficient liquidity for a prolonged period of stress.
16.7.2 Capital adequacy and capital management in the Sava Insurance Group and Sava Re
At the Group and Sava Re level, the standard formula is used to calculate the capital requirements in accordance with the Solvency II legislation. The solvency capital requirement (SCR) is fully calculated once a year, whereas the eligible own funds supporting the Group’s solvency requirements are assessed quarterly and the solvency position is assessed during the year. Thus, on a quarterly basis, the solvency position is shown as an interval within which the solvency ratio is estimated to lie in the relevant quarter. Capital adequacy as at 31 December 2022 was assessed under the previous accounting standards (IFRS 4), whereas the assessment as at 31 December 2023 was based on IFRS 17. This had no significant impact on the solvency ratio.
The Group’s estimated solvency position as at 31 December 2023 shows that the Group is well capitalised, with an expected solvency ratio of between 188% and 194% (31 December 2022: 183%). The Group’s eligible own funds to cover the solvency capital requirement (SCR) amounted to EUR 566.0 million at 31 December 2022 and are estimated to have been higher at year-end, mainly due to the strong performance in 2023 and the positive change in the accumulated other comprehensive income. The Group’s solvency capital requirement (SCR) was EUR 310.1 million as at 31 December 2022 and is estimated to have increased in 2023, mainly as a result of an increase in non-life and health underwriting risk and a lower adjustment to the SCR for the loss absorbency of deferred taxes.
The assessments carried out indicate that the Group’s solvency as at 31 December 2023 remains at a high level, well above the regulatory requirement.
125 Digital Operational Resilience Act.
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At the Sava Insurance Group level, in addition to ensuring regulatory capital adequacy, it is important to manage capital in such a way that it meets the requirements of credit rating agencies for “A” ratings, and that the Group remains solvent and is able to meet its obligations even if stress scenarios materialise. To this end, the risk strategy of the Sava Insurance Group for 2023–2027, which defines the Group’s risk appetite, defines the levels of required solvency ratios, as listed below.
Solvency ratio levels of the Group in line with internal rules defined by the risk strategy
Overcapitalisation> 250%
Acceptable capitalisation 210%–250%
Optimal capitalisation 170%–210%
Suboptimal capitalisation 150%–170%
Warning capital level 100%–150%
Additional engagement or return of capital
Seeking ways to restructure capital use
No action required
Potential capital restructuring
Measures to safeguard Group solvency
247
The estimated solvency ratio of the Sava Insurance Group at the end of 2023 is therefore also in line with the internal criteria and is at the level of optimal capitalisation, as shown in the following graph. The graph shows the Group’s solvency ratio ranges by quarter compared to the lower and upper limits of the optimal level of the solvency ratio under internal criteria.
Capital adequacy of the Sava Insurance Group as at 31 December 2022 and in 2023
The Company’s solvency position as at 31 December 2023 shows that it is well capitalised, with a solvency ratio of 289% (31 December 2022: 266%). The amount of own funds eligible to cover the solvency capital requirement (SCR) as at 31 December 2023 was EUR 653.2 million (31 December 2022: EUR 569.2 million). The increase is mainly due to the strong operating performance in 2023 and the increase in the value of participations. The Company’s solvency capital requirement as at 31 December 2023 was EUR 225.9 million (31 December 2022: EUR 213.8 million) and increased mainly due to the increase in market risks.
Throughout 2023, the Company’s capital adequacy was consistently assessed to be have been above the lower bound of the solvency ratio defined in the risk strategy (more than 200%) and significantly above regulatory requirements.
The following graph shows the solvency ratio ranges of the Company in 2023, the audited solvency ratio as at 31 December 2023 and the compliance with the required lower bound of the solvency ratio according to the internal criteria.
248
Capital adequacy of Save Re as at 31 December 2022 and 31 December 2023
Based on the preceding charts, the Company believes that insolvency risk is low. The scenarios conducted under ORSA 2024 also demonstrated the robustness of the Group’s and the Company’s solvency position.
The annual calculation of capital adequacy will be discussed in more detail in the Solvency and Financial Condition Report of the Sava Insurance Group and the Solvency and Financial Condition Report of Sava Re d.d.
16.7.3 Underwriting risks
The Group and the Company are exposed to non-life, life and health underwriting risks. Accepted life reinsurance business of non-Group cedants, including accident reinsurance business, is classified as health underwriting risk. Due to its one-year duration and according to the nature of its coverage, this life reinsurance business is comparable to accepted accident reinsurance business.
First, we present underwriting risks arising out of non-life business. This is followed by risks arising out of life and health insurance business.
16.7.3.1 Non-life underwriting risks
The Group’s exposure to non-life underwriting risk, measured by the volume of consolidated gross non-life premiums, is shown in the graph below.
249
Gross premiums written by class of insurance (non-life insurance)
The breakdown of the Group’s gross non-life premiums did not change significantly in 2023.
The Group’s largest premium volume is generated in Slovenia and the Adriatic region, where its direct insurance subsidiaries operate; exposure to Slovenia is predominant. Premiums are higher in 2023, and the share of the largest classes of insurance increased further in 2023. The Company’s other exposures are relatively well diversified globally.
The Group’s exposure to non-life measured by net (re)insurance contract liabilities is disclosed in note 16.8.9 “Insurance and reinsurance contract assets and liabilities”.
As the Group as a whole has an adequate retrocession programme in place, it is not significantly exposed to the risk of a sharp increase in net claims, even in the event of catastrophe losses. More likely is an increase in net claims due to a mass of small adverse developments (an increase in claims or expenses or decrease in premiums) that would affect the net combined ratio.
The Company’s exposure to non-life underwriting risk, measured by the volume of gross non-life premiums, is shown in the following graph, by class of insurance.
250
Gross premiums of Sava Re by class of insurance (non-life reinsurance)
The breakdown of the Company’s gross non-life (re)insurance premiums did not change significantly in 2023.
The Company’s exposure to non-life underwriting risk measured by net (re)insurance contract liabilities is disclosed in note 16.8.9 “Insurance and reinsurance contract assets and liabilities”.
The Group and the Company manage non-life underwriting risks by:
•established underwriting processes, comprising procedures and an authorisation system for the underwriting of (re)insurance contracts with higher sums insured, and a process for the underwriting of (re)insurance contracts in accordance with internal underwriting guidelines for facultative underwriting for high exposures;
•underwriting limits;
•geographical diversification;
•an appropriate actuarial pricing policy applied in product design and controlling; and
•an appropriate reinsurance programme.
The following sections describe risk management in more detail for each of the non-life underwriting risks.
Premium risk
The Group’s and the Company’s premium risk is assessed as moderate and slightly decreased compared to 2022. Uncertainties include claims inflation, which is somewhat lower in 2023 than in 2022 but remains high, and the increased frequency and severity of natural catastrophes. In the future, it will remain necessary to closely review the adequacy of the assumptions used and to react swiftly by adjusting premium rates to ensure that the Group achieves its planned results.
Most accepted non-life (re)insurance contracts are renewed annually. This allows insurers to adjust conditions and rates on an ongoing basis to reflect any adverse developments in the claims experience of entire classes of business and major policyholders. In response to rising inflation, the Group has
251
already taken steps to increase premium rates for motor and property insurance. Due to deteriorating macroeconomic conditions and the increased severity of natural catastrophes in recent years, reinsurance premium rates increased further in 2023, which has been beneficial for the management of premium risk in reinsurance underwriting.
The Group mitigates price risk by conducting detailed market analyses, monitoring the business environment (media, competitors, customers) and regulatory requirements, and monitoring historical claims trends (for the entire insurance market) and projections. In the case of obligatory proportional reinsurance treaties, Sava Re follows the fortune of its ceding companies, while with non-proportional and facultative contracts, the decision on assuming a risk is on Sava Re. It follows from the foregoing that in order to manage this risk, it is essential to review the practices of existing and future ceding companies and to analyse developments by market and class of insurance. Consequently, coverage may only be granted by following internal underwriting guidelines, and performance must be consistent with the target combined ratios, based on available information, prices set and other relevant contractual provisions. The suitability of pricing is verified through modelling and other detailed profitability reviews.
Another underwriting process risk is PML error, the inaccurate assessment of the probable maximum loss (PML). In order to mitigate this risk, the Group has in place guidelines for PML assessment, requirements that PML assessments are a team exercise, and ensures that the reinsurance programme covers PML error.
The Group mitigates claims risk through in-depth assessments of underwriting process risk, by restricting the authorisations in the underwriting process, and by developing IT support that allows an accurate overview of claims accumulation. For accepted reinsurance, this risk, too, can be managed by means of special clauses in proportional reinsurance contracts, which limit the reinsurer’s share of unexpected claims, and by not accepting unlimited layers under non-proportional contracts. Also central to reducing this risk is the annual testing of the appropriateness of reinsurance protection using a variety of stress tests and scenarios, and setting appropriate retentions. Retention levels and reinsurance protection for individual risks remained similar to the previous year in 2023.
Risk of insufficient insurance contract liabilities
The risk that the Group or the Company has insufficient insurance contract liabilities is assessed as medium and is slightly lower compared to 2022, as the level of insurance contract liabilities for all major portfolios has already been appropriately adjusted in 2022 for past and expected future inflation. Compared to the previous year, the inflation outlook for 2023 has also moderated somewhat. The risk is managed through the measures described below.
Insurance contract liabilities may be inadequate due to inaccurate actuarial estimates or unexpected adverse claims developments. This may be the result of new types of losses that are not excluded in cedants’ insurance conditions and for which no insurance contract liabilities have yet been established, which is common in liability insurance, but may also be due to changes in court practice. All the lessons learned from claims experience are then used to determine insurance contract liabilities in the future.
The adjustment of the assumptions for setting insurance contract liabilities in 2023 was affected by the change in the forecast of the expected future claims inflation and the higher severity of natural catastrophes, whereas the run-off analyses of the liability for incurred claims previously set show positive results in 2022 (below).
Based on records and understanding of the process of calculating the insurance contract liabilities, potential risks are identified and described, such as the risks relating to:
•data availability and accuracy,
•adequacy of methods and assumptions used,
•calculation errors,
252
•process support in the IT system and tools.
Controls are put in place for the mitigation of each identified risk. These controls ensure data quality and mitigate the risks associated with the calculation of insurance contract liabilities. The design and operational effectiveness of the controls are reviewed at least annually and whenever there is a significant change in the process or in the methods and models used to calculate insurance contract liabilities.
Such controls include:
•the reconciliation of technical items with the Company’s accounting records,
•peer review of actuarial methods and assumptions,
•defined change management controls for IT tools used in the process,
•actuarial review and approval of the level of insurance contract liabilities.
The process by which insurance contract liabilities are calculated is subject to periodic approval. Where substantial changes have been made to the process, the methodology or models used in the calculation of insurance contract liabilities, a validation is carried out in accordance with the reporting schedule.
Back-testing of adequacy of insurance contract liabilities in 2023
The Group establishes the liability for remaining coverage separately for each group of insurance contracts. In addition to the basic amount of liability for remaining coverage, Group companies establish a loss component if a contract is unprofitable (described in the accounting policies for insurance contracts).
The adequacy of the level of the liability for incurred claims is assessed using run-off analysis. This can only be applied to past years – the further back in time, the more precise the results. As the liabilities for incurred claims are calculated using consistent actuarial methods, we can conclude from historical differences between originally estimated and subsequently established liabilities at various balance sheet dates that the liabilities as at 31 December 2023 are adequate.
The Group companies record and analyse data on liabilities for incurred claims by accident year. The following tables show, for each accident year represented by a column, the development of the estimated ultimate claims (gross, net) of each accident year in relation to the subsequent claims development. The values in the tables, except for the last row, are not discounted.
The data in the following tables are only presented from the transition to the new accounting standard onwards, because the data are insufficient for previous years because of the application of the premium allocation approach on a large part of the non-life portfolio and the fair value transition on certain parts of the portfolio measured using the general measurement model.
All amounts included in the following tables whose original value is in a foreign currency have been translated into euro at the rates of the European Central Bank (ECB) reference rate list published by the Bank of Slovenia as at 31 December of the relevant year. On the other hand, all cash flow amounts included in the tables below that are originally denominated in foreign currencies have been translated into euro using the average exchange rate for the year.
The actual claims development by accident year shows that the run-off of gross and net liabilities is predominantly positive. On the basis of the above, it can be concluded that the level of both the gross and net liabilities for incurred claims as at 31 December 2023 for accident years up to and including 2023 is adequate to cover the expected ultimate liabilities.
253
Development of estimated ultimate non-life claims of the Sava Insurance Group
(EUR thousand)
Year ended 31 December
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Estimates of cumulative gross claims
/
At end of accident year
500,689,696
617,042,478
/
Re-estimated as of 1 year later
230,203,088
448,781,487
/
Re-estimated as of 2 years later
145,496,372
213,530,184
/
Re-estimated as of 3 years later
113,899,060
136,746,105
/
Re-estimated as of 4 years later
57,209,581
109,242,100
/
Re-estimated as of 5 years later
36,001,013
53,606,089
/
Re-estimated as of 6 years later
25,915,715
36,125,255
/
Re-estimated as of 7 years later
18,097,114
25,247,364
/
Re-estimated as of 8 years later
8,460,995
16,303,107
/
Re-estimated as of 9 years later
8,155,280
/
Cumulative gross claims paid by reporting date
2,116,604
7,737,146
9,236,733
14,941,662
44,423,306
73,878,548
90,140,998
148,658,528
354,986,526
333,324,882
/
Gross liabilities for accident years 2014–2023
6,038,677
8,565,961
16,010,631
21,183,593
9,182,783
35,363,552
46,605,108
64,871,656
93,794,961
283,717,596
585,334,517
Gross liabilities for prior accident years
50,274,000
Effect of discounting
-54,982,307
Gross liabilities for incurred claims included in the statement of financial position
580,626,209
254
Development of estimated ultimate non-life claims of Sava Re
(EUR thousand)
Year ended 31 December
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Estimates of cumulative gross claims
/
At end of accident year
169,061,145
212,673,761
/
Re-estimated as of 1 year later
146,929,663
147,952,242
/
Re-estimated as of 2 years later
139,395,365
142,244,502
/
Re-estimated as of 3 years later
87,849,200
133,882,140
/
Re-estimated as of 4 years later
46,513,996
83,888,748
/
Re-estimated as of 5 years later
22,627,306
44,500,791
/
Re-estimated as of 6 years later
15,006,426
23,307,159
/
Re-estimated as of 7 years later
11,049,935
16,680,787
/
Re-estimated as of 8 years later
4,304,617
10,490,659
/
Re-estimated as of 9 years later
4,427,627
/
Cumulative gross claims paid by reporting date
1,886,243
6,148,395
8,877,032
13,232,488
44,681,445
70,342,897
109,453,203
102,773,167
91,756,916
48,891,504
/
Gross liabilities for accident years 2014–2023
2,541,384
4,342,263
7,803,755
10,074,671
-180,653
13,545,851
24,428,937
39,471,335
56,195,326
163,782,257
322,005,126
Gross liabilities for prior accident years
30,363,197
Effect of discounting
-24,923,864
Gross liabilities for incurred claims included in the statement of financial position
327,444,460
255
Development of estimated ultimate insurance and reinsurance claims of the Sava Insurance Group
(EUR thousand)
Year ended 31 December
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Estimates of cumulative net claims
/
At end of accident year
451,674,080
511,082,147
/
Re-estimated as of 1 year later
201,176,093
399,223,599
/
Re-estimated as of 2 years later
127,707,372
196,059,983
/
Re-estimated as of 3 years later
108,871,233
117,790,838
/
Re-estimated as of 4 years later
52,841,279
103,146,740
/
Re-estimated as of 5 years later
31,937,374
49,572,590
/
Re-estimated as of 6 years later
23,707,304
31,558,767
/
Re-estimated as of 7 years later
16,774,637
20,988,946
/
Re-estimated as of 8 years later
8,093,105
14,851,180
/
Re-estimated as of 9 years later
7,719,231
/
Cumulative net claims paid by reporting date
2,066,574
6,894,765
8,475,047
13,550,319
40,807,862
68,501,220
75,495,582
139,686,636
312,693,928
297,719,286
/
Net liabilities for accident years 2014–2023
5,652,657
7,956,415
12,513,899
18,008,448
8,764,728
34,645,521
42,295,256
56,373,347
86,529,671
213,362,861
486,102,803
Net liabilities for prior accident years
35,369,838
Effect of discounting
-51,268,299
Net liabilities for incurred claims included in the statement of financial position
470,204,342
256
Development of estimated ultimate insurance and reinsurance claims of Sava Re
(EUR thousand)
Year ended 31 December
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Estimates of cumulative net claims
/
At end of accident year
132,617,573
127,557,006
/
Re-estimated as of 1 year later
121,436,721
113,579,157
/
Re-estimated as of 2 years later
124,993,433
126,385,345
/
Re-estimated as of 3 years later
83,429,967
118,347,871
/
Re-estimated as of 4 years later
42,960,816
78,306,760
/
Re-estimated as of 5 years later
19,811,338
40,806,960
/
Re-estimated as of 6 years later
13,240,849
19,901,084
/
Re-estimated as of 7 years later
10,178,062
12,767,671
/
Re-estimated as of 8 years later
4,050,048
9,491,264
/
Re-estimated as of 9 years later
4,103,058
/
Cumulative net claims paid by reporting date
1,882,142
5,362,550
8,318,561
12,307,466
41,102,498
65,035,220
97,504,951
96,635,426
62,726,195
25,672,840
/
Net liabilities for accident years 2014–2023
2,220,916
4,128,714
4,449,110
7,593,618
-295,538
13,271,539
20,842,920
29,749,918
50,852,962
101,884,167
234,698,327
Net liabilities for prior accident years
15,778,780
Effect of discounting
-21,643,141
Net liabilities for incurred claims included in the statement of financial position
228,833,966
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Lapse risk
The lapse risk in 2023 for both Sava Re and the Group is assessed as low and comparable to the previous year.
It is estimated that lapse risk is less important for the Group, as the vast majority of non-life insurance policies is written for one year and cannot be terminated early without the insurer’s consent (except in case of premium default or if the subject-matter of the insurance policy is no longer owned by the policyholder or has been destroyed due to a loss event). The majority of accepted reinsurance contracts is also written for a period of one year. This risk is mitigated primarily by maintaining good relationships with policyholders and cedants and by closely analysing market conditions.
Catastrophe risk
We assess the Group’s catastrophe risk in 2023 to be moderate and (given the size of the insurance portfolios) slightly higher than in the previous year because of the increasing severity of natural catastrophes. We also rate the same risk for Sava Re as moderate.
The Group manages catastrophe risk by means of a well-designed underwriting process, by controlling risk concentration for products covering larger complexes against natural catastrophes and fire, by geographical diversification, and by adequate retrocession protection against natural and man-made catastrophes. In managing these risks, due consideration is given to the fact that maximum net aggregate losses in any one year are affected by both the maximum net claim arising from a single catastrophe event and the frequency of such events.
An appropriate reinsurance programme is important for managing the underwriting risk to which the Group is exposed. The Group uses retrocession treaties to ensure adequate risk diversification. The reinsurance programme is set up to reduce exposure to potential single large losses or the effect of a large number of single losses arising from the same loss event. The Group considers its reinsurance programme (including proportional and non-proportional reinsurance) to be appropriate in view of the risks to which it is exposed. Net retention limits set by the Group are only rarely applied. The Group also concludes co-insurance and reciprocal contracts with other reinsurers to further disperse risks.
We consider natural catastrophe risk to be the most significant catastrophe risk to which non-life insurance is exposed. Sava Re has the highest exposure to natural catastrophes in Slovenia, whereas exposures elsewhere are relatively well-diversified globally.
The table below shows the Company’s gross natural catastrophe exposures for 10 countries with the highest exposures as at 31 December 2023 and 31 December 2022.
258
The largest gross exposure of Sava Re to natural catastrophes by country (EUR thousand)126
Country
31 December 2023
Country
31 December 2022
Slovenia
472,942,000
Slovenia
492,219,081
China
48,183,550
China
52,183,589
Greece
36,075,000
Croatia
38,643,718
Taiwan
32,530,091
India
34,664,109
Vietnam
30,842,603
Greece
32,579,445
Germany
30,300,050
Philippines
32,408,102
India
30,298,091
Taiwan
31,840,502
Austria
29,726,240
Romania
31,686,845
Serbia
29,543,248
Vietnam
30,226,968
Romania
28,616,100
Turkey
29,791,873
Total
769,056,973
Total
806,244,233
Exposure to Slovenia decreased by EUR 19.3 million compared to the previous year, with no other major changes compared to the previous year. Countries with the highest gross exposure in 2023 also include Germany, Austria and Serbia.
At the Group level, as shown in the table above, exposure to natural catastrophes is higher in regions where the Group companies write non-life insurance. Thus, the largest gross aggregate exposure to natural catastrophes is concentrated in Slovenia, and the Group has a reinsurance programme to cover catastrophe risks (detailed below), thereby transferring a portion of the risk to reinsurers. The following table shows the gross aggregate exposure in Slovenia by peril.
Gross aggregate exposure to individual natural catastrophes by country (sums insured)
EUR thousand 127
2023
2022
Flood
15,060,648
12,891,510
Earthquake
18,566,047
15,159,157
Storm and hail
56,534,206
53,163,175
The Group’s primary insurance business and separately accepted non-Group reinsurance business is protected against natural catastrophes based on non-proportional catastrophe excess-of-loss coverages for own account. Even prior to the operation of the non-proportional protection, the portfolio of earthquake (re)insurance business of the Group’s cedants is protected by a quota share retrocession treaty. This means that if a major event occurs, the Group will suffer a loss equal, at most, to the amount of the priority of the catastrophe excess-of-loss cover plus a reinstatement premium. In this way, the maximum net exposure of a portfolio to a catastrophe event is limited by the retention up to the capacity of the reinsurance cover. If the Group makes additional use of the coverage, it is subject to provisions concerning reinstatements, meaning that it needs to purchase protection for the remaining period of cover. This is a common instrument available in the international reinsurance market at a price that is usually lower than the original cover due to the shorter coverage period.
Sensitivity analysis for non-life underwriting risks
For non-life insurance, we have assumed a change in the gross claims ratio and restated the impact on profit or loss and AOCI 128. The effects shown in the following tables are net of income tax. The calculation of effects for the Sava Insurance Group and Sava Re are shown separately.
126 For exposure, in countries where modelled exposure data is available, PML assumptions (250 year events) are used, but where this data is not available, the sum insured is used as the maximum exposure.
127 The data compiled are as at 30 June of each year.
128 Effect on accumulated other comprehensive income.
259
Sensitivity analysis as at 31 December 2023
Sava Insurance Group
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net 129
Gross
Net
Gross loss ratio
+10%
-62,157,036
-52,020,629
-79,090
-83,065
Gross loss ratio
-10%
55,574,989
45,515,666
79,171
83,145
Sensitivity analysis as at 31 December 2022
Sava Insurance Group
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net
Gross
Net
Gross loss ratio
+10%
-49,199,635
-44,681,935
465,357
392,791
Gross loss ratio
-10%
44,819,055
40,311,208
-465,357
-392,791
Most of the effect of a change in the gross loss ratio is reflected in the income statement, while the direct effect of this type of sensitivity analysis on equity is small. The effect on profit or loss as at 31 December 2023 is higher than as at 31 December 2022 as a result of portfolio growth.
Sensitivity analysis as at 31 December 2023
Sava Re
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net
Gross
Net
Gross loss ratio
+10%
-21,261,342
-12,615,739
39,956
34,039
Gross loss ratio
-10%
21,064,541
12,418,939
-39,956
-34,039
Sensitivity analysis as at 31 December 2022
Sava Re
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net
Gross
Net
Gross loss ratio
+10%
-16,687,588
-12,807,618
361,530
289,911
Gross loss ratio
-10%
16,472,585
12,592,616
-361,530
-289,911
Most of the effect of a change in the gross loss ratio is reflected in the income statement, the direct effect of this type of sensitivity analysis on AOCI is small. The effect as at 31 December 2023 on profit or loss has remained at the same level as at 31 December 2022.
Assessed risk exposure in 2023 compared to 2022
The Group’s non-life underwriting risk is assessed as moderate. In 2023, the premium risk remains at a similar level to 2022, while the reserve risk slightly decreased in 2023 and the catastrophe risk slightly increased compared to 2022. We believe that the risks to which the Sava Insurance Group and Sava Re are exposed are adequately managed.
According to our assessment, the likelihood that the non-life underwriting risk would seriously compromise the Group’s or the Company’s financial stability is estimated as low.
16.7.3.2 Life underwriting risk
The main life underwriting risks relevant for Sava Re and the Group are the mortality risk, life expense risk and lapse risk (which includes terminations due to surrenders, changes to paid-up status and defaults).
The Group is moderately exposed to life underwriting risk. The Group’s main exposure to life underwriting risk is in the EU. The following chart shows the structure of the Group’s gross life insurance premiums by class of business.
129 The effect on profit or loss is shown before reinsurance (gross) and after reinsurance (net).
260
Gross premiums by class of insurance (life insurance)
The Company’s exposure to life underwriting risk is low. In 2023, gross reinsurance premiums for traditional life insurance amounted to EUR 1,242 thousand (2022: EUR 1,202 thousand) and gross unit-linked life insurance premiums were EUR 86 thousand (2022: EUR 95 thousand).
The Group’s and the Company’s exposure to life underwriting risk measured by net (re)insurance contract liabilities is disclosed in note 16.8.9 “Insurance and reinsurance contract assets and liabilities”.
Life underwriting risks are also managed by periodically monitoring the life portfolio composition, exposures, premium payment patterns, lapse rates and expenses incurred, as well as by analysing the appropriateness of the modelling of the expected mortality and morbidity, and lapse rates. The information so obtained allows for timely action in the case of adverse developments in these indicators.
The Group additionally manages life underwriting risk by strictly following underwriting and risk assessment procedures. These specify the criteria and terms of approving risk acceptance. At given premium rates, risk assumption depends on the age at entry and the requested sum insured. The Group accepts a risk if the health of the insured, as a measure of the quality of the risk, meets the criteria set out in the medical underwriting table. An additional factor in the assumption of risks is lifestyle, including leisure activities and occupation. The Group has in place an appropriate reinsurance programme in order to limit the impact of underwriting risk (death and additional risks); covers are generally on a proportional basis. The retention of insurance companies does not exceed EUR 100,000.
There is no significant concentration of life underwriting risk at the Group level, as the portfolio is well-diversified in terms of the age of the insured persons, the remaining period of insurance, exposures (of sums insured and sums at risk), and premium payment schedule. The portfolio is also diversified in terms of the percentage of policies lapsed in a period, expenses, and mortality and morbidity rates by product.
261
Sensitivity analysis for life underwriting risks
For life insurance, we have assumed a change in the assumptions for mortality rates, morbidity and disability rates, longevity rates, expenses and lapse rates. The change in assumptions for longevity rates also takes into account the annuities of Sava Pokojninska Družba. We have restated the effect on profit or loss and AOCI 128. The effects shown in the following tables are net of income tax.
Sensitivity analysis as at 31 December 2023
Sava Insurance Group
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net
Gross
Net
Mortality rates
+10%
-240,381
-240,381
-4,544
-5,063
Mortality rates
-10%
158,663
158,663
21,676
22,541
Morbidity and disability rates
+10%
-49,745
-49,745
425,013
425,011
Morbidity and disability rates
-10%
32,577
32,577
-425,531
-425,529
Longevity rates
+10%
152,901
152,901
-38,642
-38,642
Longevity rates
-10%
-179,618
-179,618
42,602
42,602
Expenses
+10%
-568,313
-568,313
538,662
538,662
Expenses
-10%
355,294
355,294
-585,923
-585,923
Lapse rates
+10%
147,704
147,704
-1,663,994
-1,693,872
Lapse rates
-10%
-173,660
-173,660
1,902,940
1,936,301
Sensitivity analysis as at 31 December 2022
Sava Insurance Group
EUR
Profit or loss
AOCI
Change in assumptions
Gross
Net
Gross
Net
Mortality rates
+10%
-300,785
-300,785
116,185
114,888
Mortality rates
-10%
221,403
221,403
-128,136
-126,826
Morbidity and disability rates
+10%
-56,640
-56,640
483,965
483,962
Morbidity and disability rates
-10%
41,754
41,754
-484,263
-484,260
Longevity rates
+10%
209,636
209,636
-75,813
-75,813
Longevity rates
-10%
-218,430
-218,430
57,039
57,039
Expenses
+10%
-432,469
-432,469
724,327
724,327
Expenses
-10%
285,202
285,202
-712,643
-712,643
Lapse rates
+10%
63,757
63,757
-1,619,506
-1,663,104
Lapse rates
-10%
-85,636
-85,636
1,835,820
1,884,046
Based on the sensitivity analysis performed, it can be concluded that the sensitivities performed do not have a material impact on profit or loss. The direct effect on AOCI as at 31 December 2023 is greatest for the change in the lapse rate.
Assessed risk exposure in 2023 compared to 2022
We estimate the Group’s life underwriting risk as moderate and well managed, remaining at a similar level to 2022.
16.7.3.3 Health underwriting risk
Most of the exposure to health underwriting risk relates to accident insurance classified as NSLT health insurance, but the exposure to SLT health insurance is very small.
NSLT health underwriting risks are, inherently, very similar to non-life underwriting risks and are therefore discussed in greater detail in section 16.7.3.1 “Non-life underwriting risks”. The Group
262
manages NSLT-health underwriting risks through similar techniques, i.e. by means of a well-designed underwriting process, control of risk concentration for accident and health insurance products, and adequate reinsurance protection.
SLT health underwriting risks are very similar in nature to life underwriting risks, and are therefore managed by the Group using similar techniques. These are discussed in more detail in section 16.7.3.2 “Life underwriting risks”. These insurances were taken into account in our sensitivity analysis for life underwriting risks.
Assessed risk exposure in 2023 compared to 2022
We consider the Group’s and the Company’s exposure to health underwriting risk in 2023 small and comparable to 2022.
16.7.4 Financial risks 130
The Company’s financial operations expose it to financial risks arising from its investment portfolio, including market, liquidity and credit risks.
The value of the investment portfolio includes the following balance sheet items: financial investments, investment property, investments in associates and subsidiaries, and cash and cash equivalents. As at 31 December 2023, the carrying amount of this investment portfolio stood at EUR 2,111.8 million (31 December 2022: EUR 1,914.0 million).
A more detailed presentation of the portfolio’s carrying amount is shown in the following table, separately for the investment portfolio supporting non-life and traditional life insurance liabilities (investments other than investments supporting direct participating contracts) and the investment portfolio supporting unit-linked life insurance liabilities (investments supporting direct participating contracts).
Value and composition of the investment portfolio in terms of financial risk assumption as at 31 December 2023
Sava Insurance Group
EUR
Investments other than investments supporting direct participating contracts
Investments supporting direct participating contracts
Total
Deposits and CDs
25,616,171
0
25,616,171
Government bonds
819,083,092
32,439,945
851,523,037
Corporate bonds
457,727,881
20,560,202
478,288,083
Shares (excluding strategic shares)
21,754,273
0
21,754,273
Mutual funds
18,564,549
544,804,326
563,368,876
Bond and money market
13,293,605
47,248,244
60,541,849
Mixed
0
113,793,106
113,793,106
Equity funds
5,270,945
383,762,976
389,033,921
Infrastructure funds
57,339,858
0
57,339,858
Real estate funds
13,888,193
0
13,888,193
Loans granted and other investments
754,140
0
754,140
Financial investments
1,414,728,158
597,804,473
2,012,532,631
Financial investments in associates
23,834,620
0
23,834,620
Investment property
24,890,276
0
24,890,276
Cash and cash equivalents
39,829,039
10,730,924
50,559,963
Investment portfolio
1,503,282,093
608,535,398
2,111,817,490
130 With regard to financial risks, we disclose other financial risks in addition to the financial risks identified in IFRS 7.
263
Value and composition of the investment portfolio in terms of financial risk assumption as at 31 December 2022
Sava Insurance Group
EUR
Investments other than investments supporting direct participating contracts
Investments supporting direct participating contracts
Total
Deposits and CDs
18,848,260
0
18,848,260
Government bonds
734,273,049
30,417,030
764,690,079
Corporate bonds
420,528,608
20,369,770
440,898,378
Shares (excluding strategic shares)
24,883,922
0
24,883,922
Mutual funds
22,157,732
433,105,447
455,263,179
Bond and money market
14,095,023
43,558,846
57,653,869
Mixed
0
92,506,399
92,506,399
Equity funds
8,062,709
297,040,201
305,102,910
Infrastructure funds
53,856,376
0
53,856,376
Real estate funds
16,497,061
0
16,497,061
Loans granted and other investments
1,194,821
0
1,194,821
Financial investments
1,292,239,830
483,892,247
1,776,132,077
Financial investments in associates
21,856,109
0
21,856,109
Investment property
22,795,760
0
22,795,760
Cash and cash equivalents
78,339,699
14,883,930
93,223,629
Investment portfolio
1,415,231,398
498,776,177
1,914,007,575
As at 31 December 2023, the Company’s investment portfolio totalled EUR 699.5 million (31 December 2022: EUR 679.0 million), with an increase of EUR 20.5 million compared to the end of 2022, as explained in section 8.2.3 “Financial position” of this annual report.
Value and composition of the investment portfolio in terms of financial risk assumption
Sava Re
Type of investment
31 December 2023
As % of total 31 December 2023
31 December 2022
As % of total 31 December 2022
Absolute
difference
% change (p.p.)
Deposits and CDs
1,021,347
0.1%
0
0%
1,021,347
0.1
Government bonds
229,591,819
32.8%
214,198,680
31.50%
15,393,139
1.3
Corporate bonds
88,089,961
12.6%
73,992,930
10.90%
14,097,031
1.7
Shares (excluding strategic shares)
3,538,972
0.5%
7,080,606
1.00%
-3,541,634
-0.5
Mutual funds
4,458,315
0.6%
3,933,982
0.60%
524,333
0.0
Bond funds
2,397,194
0.3%
2,246,501
0.30%
150,693
0.0
Equity funds
2,061,121
0.3%
1,687,481
0.20%
373,640
0.1
Infrastructure funds
21,084,448
3.0%
18,843,871
2.80%
2,240,577
0.2
Real estate funds
3,884,428
0.6%
4,584,214
0.70%
-699,786
-0.1
Loans granted
2,714,904
0.4%
1,796,693
0.30%
918,211
0.1
Financial investments
354,384,196
50.7%
324,430,976
47.80%
29,953,220
2.9
Financial investments in Group companies
325,241,793
46.5%
322,935,793
47.60%
2,306,000
-1.1
Investment property
7,582,168
1.1%
7,721,693
1.10%
-139,525
0.0
Cash and cash equivalents
12,260,049
1.8%
23,926,029
3.50%
-11,665,980
-1.7
Total financial investments exposed to financial risk
699,468,206
100.0%
679,014,492
100.0%
20,453,715
/
264
16.7.4.1 Market risk
As part of the management of market risk, the Group and the Company assess interest rate risk, property price risk, equity price risk and currency risk. The following table shows the Group’s investments exposed to market risk (investment portfolio excluding cash and cash equivalents).
Group financial investments exposed to market risk
Sava Insurance Group
Type of investment
31 December 2023
As % of total
31 December 2023
31 December 2022
As % of total
31 December 2022
Absolute change
% change (p.p.)
Deposits and CDs
25,616,171
1.2%
18,848,260
1.0%
6,767,911
0.2
Government bonds
819,083,092
39.7%
734,273,049
40.3%
84,810,043
-0.6
Corporate bonds
457,727,881
22.2%
420,528,608
23.1%
37,199,273
-0.9
Shares (excluding strategic shares)
21,754,273
1.1%
24,883,922
1.4%
-3,129,649
-0.3
Mutual funds (excluding underlying financial investments)
18,564,549
0.9%
22,157,732
1.2%
-3,593,183
-0.3
Bond and money market
13,293,605
0.6%
14,095,023
0.8%
-801,418
-0.2
Mixed
0
0.0%
0
0.0%
0
0.0
Equity funds
5,270,945
0.3%
8,062,709
0.4%
-2,791,764
-0.1
Infrastructure funds
57,339,858
2.8%
53,856,376
3.0%
3,483,482
-0.2
Real estate funds
13,888,193
0.7%
16,497,061
0.9%
-2,608,868
-0.2
Loans granted and other investments
754,140
0.0%
1,194,821
0.1%
-440,681
-0.1
Investments of contracts with
direct participation
597,804,473
29.0%
483,892,247
26.6%
113,912,226
2.4
Financial investments
2,012,532,631
97.6%
1,776,132,077
97.5%
236,400,554
0.1
Financial investments in associates
23,834,620
1.2%
21,856,109
1.2%
1,978,511
0.0
Investment property
24,890,276
1.2%
22,795,761
1.3%
2,094,515
-0.1
Investment portfolio
2,061,257,527
100.0%
1,820,783,947
100.0%
240,473,580
0.0
Investment portfolio excluding investments in associates
2,037,422,907
1,798,927,838
The value of the Group’s investments portfolio exposed to market risk increased by EUR 240.5 million in 2023 compared to year-end 2022, which is explained in section 8.1.3.4 “Investment portfolio” of the business report part (first part of the annual report). The following table shows the Group’s and the Company’s investments exposed to market risk (investment portfolio excluding cash and cash equivalents).
Sava Re financial investments exposed to market risk
Sava Re
Type of investment
31 December 2023
As % of total 31 December 2023
31 December 2022
As % of total 31 December 2022
Absolute change
% change (p.p.)
Deposits and CDs
1,021,347
0.1%
0
0.0%
1,021,347
0.1
Government bonds
229,591,819
33.4%
214,198,680
32.7%
15,393,139
0.7
Corporate bonds
88,089,961
12.8%
73,992,930
11.3%
14,097,031
1.5
Shares (excluding strategic shares)
3,538,972
0.5%
7,080,606
1.1%
-3,541,634
-0.6
Mutual funds
4,458,315
0.6%
3,933,982
0.6%
524,333
0.0
Bond and money market
2,397,194
0.3%
2,246,501
0.3%
150,693
0.0
Equity funds
2,061,121
0.3%
1,687,481
0.3%
373,640
0.0
Infrastructure funds
21,084,448
3.1%
18,843,871
2.9%
2,240,577
0.2
Real estate funds
3,884,428
0.6%
4,584,214
0.7%
-699,786
-0.1
Loans granted
2,714,904
0.4%
1,796,693
0.3%
918,211
0.1
Financial investments
354,384,196
51.6%
324,430,976
49.5%
29,953,220
2.07
Financial investments in associates
325,241,793
47.3%
322,935,793
49.3%
2,306,000
-2.0
Investment property
7,582,168
1.1%
7,721,693
1.2%
-139,525
-0.1
Investment portfolio
687,208,157
100.0%
655,088,462
100.0%
32,119,694
0.0
265
The value of the Company’s financial investments exposed to market risk decreased by EUR 140 thousand in 2023 compared to year-end 2022, which is explained in section 8.2.3.4 “Investment portfolio” of the business report part (first part of the annual report).
16.7.4.1.1 Interest rate risk
Interest rate risk is measured through sensitivity analysis, which measures the change in value of interest rate sensitive investments and the change in value of insurance contract liabilities when interest rates change by 1 p.p. or 100 basis points.
The interest rate sensitive portion of the Group’s and the Company’s investment portfolio includes government and corporate bonds, deposits, loans, bond and mixed mutual funds covering non-life and traditional life insurance and reinsurance contract liabilities, including insurance contract liabilities of direct participating contracts.
On the liabilities side, all liabilities arising from (re)insurance contracts are included in line with the IFRS 17 valuation. In the table, assets and liabilities relating to non-life and traditional life insurance business are shown together, whereas assets and liabilities relating to life insurance where policyholders bear the investment risk are shown separately under direct participating contracts.
The Group’s investment portfolio, excluding investments in direct participating contracts, also includes variable-rate investments. These investments are linked to a 3-month EURIBOR and therefore the Company has not recorded the effects of the benchmark reform (IBOR), which provides for the substitution of certain interest rate benchmarks. It holds no other variable-rate investments. The Group does not have any variable-rate liabilities.
Interest rate sensitive investments and liabilities from the Group’s insurance and reinsurance contracts
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Financial investments
Investments other than investments supporting direct participating contracts, of which
1,315,373,623
1,188,938,775
– Fixed-income investments
1,314,567,547
1,182,673,414
– Variable-rate investments
806,076
6,265,361
Investments supporting direct participating contracts*, of which
159,707,518
140,505,540
– Fixed-income investments
159,707,518
140,505,540
– Variable-rate investments
0
0
Financial liabilities
0
-56,290,346
Total financial investments
1,475,081,141
1,273,153,969
Insurance and reinsurance contracts
(Re)insurance contract liabilities (other than for direct participating contracts)
1,065,741,226
1,006,526,331
(Re)insurance contract assets (other than for direct participating contracts)
-115,630,856
-75,271,982
Direct participating contracts
586,910,698
478,840,441
Total insurance and reinsurance contracts
1,537,021,068
1,410,094,790
* Includes interest rate sensitive investments. These are debt securities and interest rate sensitive investments in bond and mixed mutual funds underlying participating contracts.
The total value of the Group’s interest rate sensitive investments at 31 December 2023 was EUR 1,475.1 million (31 December 2022: EUR 1,273.2 million). The value of interest rate sensitive liabilities at 31 December 2023 was EUR 1,537.0 million (31 December 2022: EUR 1,410.1 million).
The value of investments other than investments supporting direct participating contracts (31 December 2023: EUR 1,315.4 million; 31 December 2022: EUR 1,188.9 million) is significantly above insurance and reinsurance contract liabilities (31 December 2023: EUR 950.1 million; 31 December 2022: EUR 931.3 million), due to interest rate sensitive investments of the Group companies’ own funds, which are not immediately intended to cover insurance and reinsurance liabilities. The higher value of (re)insurance contract assets in relation to (re)insurance contract liabilities also affects the higher sensitivity of insurance contract assets. In managing these
266
investments, Group companies ensure that the maturities of the investments match those of the liabilities.
The lower value of the investments underlying direct participating contracts compared to the corresponding liabilities is due to the fact that only interest rate sensitive investments (bonds, bond mutual funds) with a total value of EUR 159.7 million are shown among the investments underlying direct participating contracts (31 December 2022: EUR 140.5 million), whereas all the assets and liabilities relating to direct participating contracts are interest rate sensitive.
For Sava Re, the table shows total reinsurance contract assets and liabilities. The Company’s investment portfolio supporting contracts other than direct participating contracts also includes variable-rate investments. These investments are linked to a 3-month EURIBOR and therefore the Company has not recorded the effects of the benchmark reform (IBOR), which provides for the substitution of certain interest rate benchmarks. It holds no other variable-rate investments. The Company does not have any variable-rate liabilities.
Interest rate sensitive investments supporting and liabilities arising from reinsurance contracts of Save Re
Sava Re
EUR
31 December 2023
31 December 2022
Financial investments
Investments other than investments supporting direct participating contracts, of which
322,793,879
291,928,359
– Fixed-income investments
322,290,081
291,927,867
– Variable-rate investments
503,797
492
Investments supporting direct participating contracts, of which
0
0
– Fixed-income investments
0
0
– Variable-rate investments
0
0
Financial liabilities
-58,702,709
-56,290,346
Total financial investments
264,091,170
235,638,013
Insurance and reinsurance contracts
Insurance and reinsurance contract liabilities (other than for direct participating contracts)
296,199,571
272,734,094
Insurance and reinsurance contract assets
-100,857,965
-64,296,545
Total insurance and reinsurance contracts
195,341,606
208,437,549
The total value of the Company’s interest rate sensitive investments at 31 December 2023 was EUR 264.1 million (31 December 2022: EUR 235.6 million). The value of interest rate sensitive liabilities and assets at 31 December 2023 was EUR 195.3 million (31 December 2022: EUR 208.4 million).
The value of interest rate sensitive investments (31 December 2023: EUR 322.8 million; 31 December 2022: EUR 291.9 million) is significantly above the value of insurance and reinsurance contract assets and liabilities (31 December 2023: EUR 195.3 million; 31 December 2022: EUR 208.4 million), due to interest rate sensitive investments of the Company’s own funds, which are not immediately intended to cover insurance and reinsurance liabilities. The excess of investments over liabilities increases the Company’s sensitivity to changes in interest rates. In managing these investments, the Company ensures that the maturities of the investments match those of the liabilities.
Sensitivity analysis of the Group’s interest rate risk
The sensitivity analysis for interest rate risk shows separately the impact on profit or loss and AOCI in the event of a 100 basis point increase or decrease in interest rates, on a pre-tax basis. The total impact of both the contract value and the related investments of this portfolio is already presented under “Direct participating contracts and investments supporting direct participating contracts”. The impact of a change in interest rates on an insurer’s profit or loss or AOCI depends on the IFRS category of each interest rate sensitive investment. In accordance with the accounting policies adopted by the Group companies, the majority of the changes in value of the items are recognised in AOCI with only a minor impact on profit or loss.
267
Results of sensitivity analysis of interest rate risk sensitive investments
Sava Insurance Group
EUR
Profit or loss
AOCI
Increase(+100 bps)
Decrease(-100 bps)
Increase(+100 bps)
Decrease(-100 bps)
31 December 2023
Insurance and reinsurance contracts (other than direct participating contracts)
346,437
-395,100
24,637,677
-28,600,218
Financial investments (other than those supporting direct participating contracts)
-750,810
806,026
-39,299,988
42,529,399
Direct participating contracts and investments supporting direct participating contracts
82,634
-132,489
-130,533
136,910
-321,738
278,438
-14,792,844
14,066,091
31 December 2022 (restated)
Insurance and reinsurance contracts (other than direct participating contracts)
346,118
-397,261
28,355,647
-31,508,205
Financial investments (other than those supporting direct participating contracts)
-998,031
912,825
-46,408,432
42,747,965
Direct participating contracts and investments supporting direct participating contracts
-99,175
91,240
-108,573
114,447
-751,088
606,804
-18,161,358
11,354,207
As can be seen from the results, an increase in interest rates has a negative effect, while a decrease in interest rates has a positive effect, mainly on the Company’s AOCI.
Interest rate risk was slightly lower in 2023 compared to the previous year, mainly due to the shorter duration of interest rate sensitive investments.
The average maturity of bonds and deposits of non-life business was 3.6 years at year-end 2023 (31 December 2022: 3.2 years), while the expected maturity of non-life liabilities was 2.2 years (31 December 2022: 2.1 years).
The average maturity of bonds and deposits supporting the life business was 4.0 years at year-end 2023 (31 December 2022: 4.6 years), and the expected maturity of life insurance liabilities was 7.5 years (31 December 2022: 7.5 years).
Sensitivity analysis of Sava Re’s interest rate risk
The following table shows the results of the sensitivity analysis for Sava Re.
Results of sensitivity analysis of interest rate risk sensitive investments
Sava Re
EUR
Profit or loss
AOCI 128
Increase(+100 bps)
Decrease(-100 bps)
Increase(+100 bps)
Decrease(-100 bps)
31 December 2023
Insurance and reinsurance contracts
0
0
4,157,916
-4,639,531
Financial investments
-263,249
273,031
-7,766,939
7,166,405
-263,249
273,031
-3,609,023
2,526,874
31 December 2022 (restated)
Insurance and reinsurance contracts
0
0
4,018,749
-4,478,846
Financial investments
-267,618
284,609
-7,668,485
8,099,557
-267,618
284,609
-3,649,736
3,620,711
As can be seen from the results, an increase in interest rates has a negative effect, while a decrease in interest rates has a positive effect, mainly on the Company’s AOCI.
Overall interest rate sensitivity decreased slightly compared to the previous year, whereas the expected volatility of market interest rates remained elevated due to macroeconomic conditions. There was no impact on the income statement for insurance and reinsurance contracts. This is because no new reinsurance contracts were recognised in the last month.
268
We estimate that the interest rate risk remained at about the same level as the previous year.
16.7.4.1.2 Risk of change in the market value of property investments
The Group and the Company are exposed to the risk of change in the market value of property investments as part of the risks affecting the investment portfolio. In addition to investment property, real estate funds shown as alternative investments under financial investments are also exposed to this risk.
The following two tables show the value of investment property and real estate funds of the Group and Sava Re.
Investment property
Sava Insurance Group
EUR
31 December 2023
As % of total
31 December 2023
31 December 2022
As % of total
31 December 2022
Absolute change
% change (p.p.)
Investment property
24,890,276
1.67%
22,795,761
1.70%
2,094,515
0.0
Real estate funds
13,888,193
0.93%
16,497,061
1.20%
-2,608,868
-0.3
Total
38,778,469
2.60%
39,292,822
2.9%
-514,353
0.0
Sava Re
EUR
31 December 2023
As % of total 31 December 2023
31 December 2022
As % of total 31 December 2022
Absolute change
% change (p.p.)
Investment property
7,582,168
1.1%
7,721,693
1.10%
-139,525
0.0
Real estate funds
3,884,428
0.6%
4,584,214
0.70%
-699,786
-0.1
Total
11,466,596
1.6%
12,305,907
1.8%
-839,311
-0.2
As at 31 December 2023, the value of the Group’s investments exposed to investment property price risk was EUR 38.8 million (31 December 2022: EUR 39.3 million), a decrease of EUR 0.5 million compared to the previous period. As at 31 December 2023, the value of the Company’s investments exposed to investment property price risk was EUR 11.5 million (31 December 2022: EUR 12.3 million), a decrease of EUR 0.8 million compared to the previous period.
The risk was assessed through a sensitivity analysis to a 15% decrease in the value of the investments. The result is shown in the following two tables, separately for the Group and Sava Re.
Result of sensitivity analysis of real estate investments
Sava Insurance Group
EUR
Profit or loss
AOCI
Increase(+15%)
Decrease(-15%)
Increase(+15%)
Decrease(-15%)
31 December 2023
Investment property
3,733,541
-3,733,541
0
0
Real estate funds
2,083,229
-2,083,229
0
0
5,816,770
-5,816,770
0
0
31 December 2022 (restated)
Investment property
3,419,364
-3,419,364
0
0
Real estate funds
2,474,559
-2,474,559
0
0
5,893,923
-5,893,923
0
0
269
Result of sensitivity analysis of real estate investments
Sava Re
Profit or loss
AOCI
Profit or loss
AOCI
EUR
Profit or loss
AOCI
Increase(+15%)
Decrease(-15%)
Increase(+15%)
Decrease(-15%)
31 December 2023
Investment property
1,137,325
-1,137,325
0
0
Real estate funds
582,664
-582,664
0
0
1,719,989
-1,719,989
0
0
31 December 2022 (restated)
Investment property
1,158,254
-1,158,254
0
0
Real estate funds
687,632
-687,632
0
0
1,845,886
-1,845,886
0
0
The selected shock would reduce the value of the Group’s investments sensitive to investment property risk by EUR 5.8 million (31 December 2022: EUR 5.9 million), and the value of the Company’s investments exposed to investment property risk would decrease by EUR 1.8 million (31 December 2022: EUR 1.8 million). The investment property price risk has not changed significantly compared to the previous year.
16.7.4.1.3 Equity price risk
Assets exposed to the risk include shares, equity and mixed mutual funds (the sensitivity analysis takes into account half of the value), alternative funds (infrastructure) and ETFs.
Unlike the bond portfolio, which moves inversely to interest rates, the value of equities and mutual funds changes linearly with stock prices. Equity price risk is measured by a sensitivity analysis, i.e., the change in the value of such investments in case of a 20% change.
Equity investments and direct participating contracts included in the sensitivity analysis
Sava Insurance Group
EUR
31 December 2023
As % of total
31 December 2023
31 December 2022
As % of total
31 December 2022
Absolute change 31 December 2023 - 31 December 2022
% change (p.p.)
Financial investments
Shares
21,754,273
1.1%
24,883,922
1.4%
-3,129,649
-0.3
of which Slovenian shares
5,593,016
0.3%
9,844,715
0.5%
-4,251,699
-0.2
Equity and mixed mutual funds
5,270,865
0.3%
8,062,709
0.4%
-2,791,844
-0.1
Infrastructure funds
57,339,858
2.8%
53,856,376
3.0%
3,483,482
-0.2
Investments supporting direct participating contracts*
440,659,529
21.4%
343,293,401
18.9%
97,366,128
2.5
Total financial investments
525,024,525
25.5%
430,096,408
23.6%
94,928,117
1.9
Insurance and reinsurance contracts
Direct participating contracts
586,910,698
478,840,441
108,070,257
Total insurance and reinsurance contracts
586,910,698
478,840,441
108,070,257
* Includes investments exposed to equity price risk in equity and mixed mutual funds supporting direct participating contracts.
270
Equity investments included in the sensitivity analysis
Sava Re
EUR
31 December 2023
As % of total portfolio as at 31 December 2023
31 December 2022
As % of total portfolio as at 31 December 2022
Absolute change 31 December 2023 - 31 December 2022
% change (p.p.)
Shares
3,538,972
0.5%
7,080,606
1.10%
-3,541,634
-0.6
of which Slovenian shares
3,298,739
0.5%
6,892,061
1.10%
-3,593,322
-0.6
Equity mutual funds
2,061,121
0.3%
1,687,481
0.30%
373,640
0.0
Infrastructure funds
21,084,448
3.1%
18,843,871
2.90%
2,240,577
0.2
Total
26,684,541
3.88%
27,611,958
4.2%
-927,417
-0.4
The Company’s assets exposed to equity price risk include equities, equity and mutual funds, and infrastructure funds. Investments in subsidiaries and associates are disclosed in section 16.7.4.1.4 “Risk of change in value of investments in subsidiaries and associates of the Sava Insurance Group and Sava Re”.
Results of sensitivity analysis of equity investments
Sava Insurance Group
EUR
Profit or loss
AOCI
Increase
(+20%)
Decrease
(-20%)
Increase
(+20%)
Decrease
(-20%)
31 December 2023
Financial investments (other than those supporting direct participating contracts)
13,679,021
-13,679,021
3,193,978
-3,193,978
Direct participating contracts and investments supporting direct participating contracts
21,714
-60,490
0
0
13,700,735
-13,739,511
3,193,978
-3,193,978
31 December 2022 (restated)
Financial investments (other than those supporting direct participating contracts)
14,373,066
-14,373,066
2,987,535
-2,987,535
Direct participating contracts and investments supporting direct participating contracts
88,013
-104,133
0
0
14,461,079
-14,477,199
2,987,535
-2,987,535
Thus, a 20% fall in equity prices would reduce the value of investments other than direct participating contracts by EUR 16.9 million (31 December 2022: EUR 17.4 million). The Sava Insurance Group’s exposure to equity price risk remained at approximately the same level in 2023 compared to the end of 2022.
Results of sensitivity analysis of equity investments
Sava Re
EUR
Profit or loss
AOCI
Increase
(+20%)
Decrease
(-20%)
Increase
(+20%)
Decrease
(-20%)
31 December 2023
Financial instruments
5,336,908
-5,336,908
5,336,908
-5,336,908
0
0
31 December 2022 (restated)
Financial instruments
5,522,392
-5,522,392
5,522,392
-5,522,392
0
0
A 20% change in the value of the equity securities would decrease the value of the investments by EUR 5.3 million (31 December 2022: EUR 5.5 million).
The equity price risk of the Group’s and the Company’s equity securities remained at approximately the same level in 2023 as in 2022.
271
16.7.4.1.4 Risk of change in value of investments in subsidiaries and associates of the Sava Insurance Group and Sava Re
With regard to the risk associated with their financial investments in associates, the Sava Insurance Group and Sava Re are mainly exposed to the risk of a decline in the value of these investments. As at 31 December 2023, the Group’s total exposure to the risk of financial investments in associates was EUR 23.8 million (31 December 2022: EUR 21.9 million).
The following table shows the sensitivity of investments in associates to changes in value. The analysis only includes the associated company Diagnostic Centre Bled.
Results of sensitivity analysis of the Sava Insurance Group’s investments in associates
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Value
Post-stress value
Change in value
Value
Post-stress value
Change in value
Decrease in value of 10%
23,834,620
21,451,158
-2,383,462
21,856,109
19,670,498
-2,185,611
Decrease in value of 20%
23,834,620
19,067,696
-4,766,924
21,856,109
17,484,887
-4,371,222
Regarding the risk related to its investments in subsidiaries and associates, Sava Re is especially exposed to the risk of a decline in the value of these investments and to concentration risk. In 2023, the Company’s largest exposure among investments in subsidiaries and associates was from its investment in Zavarovalnica Sava, which accounted for 37.9% as at 31 December 2023 (31 December 2022: 38.2%) of the total value of its investments in subsidiaries and associates. As at 31 December 2023, the Company’s total exposure to the risk related to investments in subsidiaries and associates was EUR 325.2 million (31 December 2022: EUR 322.9 million).
The following table shows the sensitivity of investments in subsidiaries and associates to changes in value.
Results of the sensitivity analysis of investments in subsidiaries and associates of Sava Re
Sava Re
EUR
31 December 2023
31 December 2022
Value
Post-stress value
Change in value
Value
Post-stress value
Change in value
Decrease in value of 10%
325,241,793
292,717,614
-32,524,179
322,935,793
290,642,214
-32,293,579
Decrease in value of 20%
325,241,793
260,193,435
-65,048,359
322,935,793
258,348,635
-64,587,159
Value decrease of largest subsidiary of 10%
123,364,958
111,028,462
-12,336,496
123,364,958
111,028,462
-12,336,496
Value decrease of largest subsidiary of 20%
123,364,958
98,691,967
-24,672,992
123,364,958
98,691,967
-24,672,992
The Company’s exposure to the risk related to investments in subsidiaries and associates was at a similar level in 2023 as in 2022. Taking account of all the impacts, we believe that the risk related to participations remained moderate due to their active management.
The Sava Insurance Group and Sava Re manage the risk related to their investments in subsidiaries and associates through active management of the companies, comprising:
•a governance system (management and supervision) and clear segregation of responsibilities at all levels,
•risk management policies,
•systematic risk management with a three-lines-of-defence framework (detailed in section 10 “Risk management”),
•the setting of business and risk management strategies from the top down, taking into account both the Group as a whole as well as its individual members,
•a comprehensive system of monitoring operations, reporting on business results and risks at all levels.
272
16.7.4.1.5 Currency risk
As at 31 December 2023, the Sava Insurance Group recorded 8.3% of liabilities nominated in a foreign currency (2022: 10.7%).
The Sava Insurance Group manages currency risk through the efforts of each company to optimise asset-liability currency matching. Based on the market situation, individual companies assess the ability of currency matching in the primary currency, and, if this is not possible, the transaction currency is used for matching.
The following table shows the currency (mis)match for the Sava Insurance Group for the five currencies that account for the largest portion of its liabilities.
Transaction currency (mis)match as at 31 December 2023 (all amounts translated to euros)
Sava Insurance Group
EUR
Euro (EUR)
US dollar (USD)
Korean won (KRW)
Macedonian denar (MKD)
Serbian dinar (RSD)
Other
Total
Financial investments and cash
1,343,270,392
44,029,051
14,006,703
18,804,267
25,429,025
57,742,657
1,503,282,095
Financial liabilities
-74,987,535
0
0
0
0
0
-74,987,535
0
Insurance and reinsurance contract assets
107,111,477
2,439,525
88,730
100,186
3,446,017
3,901,107
117,087,042
Insurance and reinsurance contract liabilities
-914,467,838
-42,171,929
-14,550,070
-12,234,485
-21,897,715
-60,428,938
-1,065,750,976
0
Other assets
312,115,253
7,762,500
0
10,032,698
9,239,395
489,947
339,639,793
Other liabilities
-825,972,622
-79,293
0
-11,208,304
-3,575,024
-59,066
-840,894,309
Currency mismatch
11,979,854
454,638
5,494,361
12,641,698
1,645,706
32,216,257
Currency matching ratio
98.4%
Direct participating contracts
-586,910,697
0
0
0
0
0
-586,914,306
Investments supporting direct participating contracts
607,667,203
858,516
0
0
0
9,680
608,535,399
273
Transaction currency (mis)match as at 31 December 2022 (all amounts translated to euros)
Sava Insurance Group
EUR
Euro (EUR)
US dollar (USD)
Korean won (KRW)
Macedonian denar (MKD)
Serbian dinar (RSD)
Other
Total
Financial investments and cash
1,260,327,187
45,054,700
18,050,266
16,812,760
21,698,149
53,288,337
1,415,231,398
Financial liabilities
-74,924,356
0
0
0
0
0
-74,924,356
Insurance and reinsurance contract assets
67,133,351
2,630,004
30,262
0
1,987,189
3,491,178
75,271,985
Insurance and reinsurance contract liabilities
-829,403,926
-44,578,266
-15,330,910
-10,687,947
-16,500,514
-90,024,771
-1,006,526,334
Other assets
298,223,324
5,507,267
0
11,990,350
6,593,818
545,933
322,860,692
Other liabilities
-746,252,584
-51,085
0
-2,889,598
-2,654,942
-911
-751,849,120
Currency mismatch
8,562,621
2,749,618
15,225,565
11,123,699
32,700,234
70,361,736
Currency matching ratio
96.1%
Direct participating contracts
-478,840,440
0
0
0
0
0
-478,840,440
Investments supporting direct participating contracts
498,013,107
761,512
0
0
0
1,556
498,776,175
The Sava Insurance Group manages a high level of currency matching by monitoring matching of assets and liabilities at the level of individual companies and the portfolio. The Group manages the matching of currencies used by the Group companies in accordance with local accounting standards and regulations, which results in a slightly higher mismatch at Group level.
274
Impact of a 10-percent increase or decrease in the exchange rate as at 31 December 2023 (all amounts translated into euros)
Sava Insurance Group
EUR
Profit or loss
AOCI
Effect of 10% strengthening
Effect of 10% weakening
Effect of 10% strengthening
Effect of 10% weakening
US dollar (USD)
Insurance and reinsurance contracts
-3,971,210
3,971,210
-50,638
50,638
Financial investments
4,402,905
-4,402,905
0
0
431,695
-431,695
-50,638
50,638
Korean won (KRW)
Insurance and reinsurance contracts
-1,446,134
1,446,134
-14,493
14,493
Financial investments
1,400,670
-1,400,670
0
0
-45,464
45,464
-14,493
14,493
Serbian dinar (RSD)
Insurance and reinsurance contracts
-1,819,069
1,819,069
7,962
-7,962
Financial investments
2,542,903
-2,542,903
0
0
723,834
-723,834
7,962
-7,962
Macedonian denar (MKD)
Insurance and reinsurance contracts
-1,208,244
1,208,244
-5,185
5,185
Financial investments
1,880,427
-1,880,427
0
0
672,182
-672,182
-5,185
5,185
Other
Insurance and reinsurance contracts
-5,630,485
5,630,485
-54,372
54,372
Financial investments
5,774,266
-5,774,266
0
0
Direct participating contracts and
investments supporting direct participating contracts
-188,646
176,531
0
0
-44,865
32,750
-54,372
54,372
Impact of a 10-percent increase or decrease in the exchange rate as at 31 December 2022 (all amounts translated into euros)
Sava Insurance Group
EUR
Profit or loss
AOCI
Effect of 10% strengthening
Effect of 10% weakening
Effect of 10% strengthening
Effect of 10% weakening
US dollar (USD)
Insurance and reinsurance contracts
-4,189,323
4,189,323
-163,164
163,164
Financial investments
4,505,470
-4,505,470
0
0
316,146
-316,146
-163,164
163,164
Korean won (KRW)
Insurance and reinsurance contracts
-1,530,065
1,530,065
-38,072
38,072
Financial investments
1,805,027
-1,805,027
0
0
274,962
-274,962
-38,072
38,072
Serbian dinar (RSD)
Insurance and reinsurance contracts
-1,438,097
1,438,097
-6,231
6,231
Financial investments
2,169,815
-2,169,815
0
0
731,718
-731,718
-6,231
6,231
Macedonian denar (MKD)
Insurance and reinsurance contracts
-1,048,640
1,048,640
-20,154
20,154
Financial investments
1,681,276
-1,681,276
0
0
632,636
-632,636
-20,154
20,154
Other
Insurance and reinsurance contracts
-8,481,494
8,481,494
-238,667
238,667
Financial investments
5,328,834
-5,328,834
0
0
Direct participating contracts and
investments supporting direct participating contracts
27,256
-32,263
0
0
-3,125,404
3,120,397
-238,667
238,667
275
Sava Re is the Sava Insurance Group member with the largest exposure to currency risk.
As at 31 December 2023, the Company’s liabilities denominated in foreign currencies accounted for 14.0% (2022: 15.4%) of the Company’s total liabilities. As the proportion of international business is rising (as is the number of different currencies), Sava Re has put in place rules on currency matching, which define the conditions and method of currency matching. To mitigate currency risk, assets and liabilities in foreign currencies are actively matched. The currency matching rules lay down the criteria as to when the Company should start currency matching by accounting currency 131. Based on the market situation, the Company assesses the ability of currency matching in the primary currency, and if this is not possible, the transaction currency is to be used for matching.132
The currency mismatch of assets and liabilities is monitored by individual accounting currency. The following table showes the currency mismatch for the five currencies that account for the largest share of liabilities.
Transaction currency (mis)match as at 31 December 2023 (all amounts translated to euros)
Sava Re
EUR
Euro (EUR)
US dollar (USD)
Korean won (KRW)
Chinese yuan (CNY)
Indian rupee (INR)
Other
Total
Financial investments and cash
595,859,090
38,288,843
14,006,703
9,305,018
5,721,095
36,287,456
699,468,206
Financial liabilities
-74,987,535
0
0
0
0
0
-74,987,535
Insurance and reinsurance contract assets
94,515,178
2,439,525
88,730
447,814
244,989
3,121,729
100,857,965
Insurance and reinsurance contract liabilities
-182,553,431
-42,167,875
-14,550,070
-9,958,235
-7,437,358
-39,532,600
-296,199,571
Other assets
13,623,626
4,525
0
0
0
0
13,628,151
Other liabilities
-442,764,537
0
0
0
0
-2,679
-442,767,216
Currency mismatch
1,434,982
454,638
205,403
1,471,274
126,094
3,692,391
Currency matching ratio
99.5%
131 The accounting currency is the local currency used in the accounting documentation. Reinsurance contracts may be accounted for in various accounting currencies. Generally, this is the currency of liabilities and receivables due from cedants, and hence also the reinsurer.
132 The transaction currency is the currency in which reinsurance contract transactions are processed.
276
Transaction currency (mis)match as at 31 December 2022 (all amounts translated to euros)
Sava Re
EUR
Euro (EUR)
US dollar (USD)
Korean won (KRW)
Chinese yuan (CNY)
Indian rupee (INR)
Other
Total
Financial investments and cash
575,036,552
38,567,392
18,050,266
8,321,462
5,882,185
33,156,633
679,014,490
Financial liabilities
-74,924,356
0
0
0
0
0
-74,924,356
Insurance and reinsurance contract assets
59,534,851
2,630,004
30,262
244,344
62,758
1,794,326
64,296,545
Insurance and reinsurance contract liabilities
-156,060,611
-44,826,248
-15,330,910
-7,939,249
-6,866,522
-41,710,554
-272,734,094
Other assets
10,937,310
0
0
0
0
0
10,937,310
Other liabilities
-406,583,489
-6,405
0
0
0
0
-406,589,894
Currency mismatch
3,635,256
2,749,618
626,557
921,580
6,759,595
14,692,606
Currency matching ratio
98.1%
In the management of currency risk (ALM aspect), Sava Re directly matches all the more liquid currencies. Other currencies are matched based on their correlation with the euro or the US dollar.
Impact of a 10-percent increase or decrease in the exchange rate as at 31 December 2023 (all amounts translated into euros)
Sava Re
EUR
Profit or loss
AOCI
Effect of 10% strengthening
Effect of 10% weakening
Effect of 10% strengthening
Effect of 10% weakening
US dollar (USD)
Insurance and reinsurance contracts
-3,972,835
3,972,835
-50,525
50,525
Financial investments
3,828,884
-3,828,884
0
0
-143,951
143,951
-50,525
50,525
Korean won (KRW)
Insurance and reinsurance contracts
-1,446,134
1,446,134
-14,493
14,493
Financial investments
1,400,670
-1,400,670
0
0
-45,464
45,464
-14,493
14,493
Chinese yuan (CNY)
Insurance and reinsurance contracts
-951,042
951,042
21,596
-21,596
Financial investments
930,502
-930,502
0
0
-20,540
20,540
21,596
-21,596
Indian rupee (INR)
0
0
Insurance and reinsurance contracts
-719,237
719,237
3,512
-3,512
Financial investments
572,110
-572,110
0
0
-147,127
147,127
3,512
-3,512
Other
Insurance and reinsurance contracts
-3,641,087
3,641,087
-64,439
64,439
Financial investments
3,628,746
-3,628,746
0
0
-12,341
12,341
-64,439
64,439
277
Impact of a 10-percent increase or decrease in the exchange rate as at 31 December 2022 (all amounts translated into euros)
Sava Re
EUR
Profit or loss
AOCI
Effect of 10% strengthening
Effect of 10% weakening
Effect of 10% strengthening
Effect of 10% weakening
US dollar (USD)
Insurance and reinsurance contracts
-4,219,624
4,219,624
-162,735
162,735
Financial investments
3,856,099
-3,856,099
0
0
-363,525
363,525
-162,735
162,735
Korean won (KRW)
0
0
Insurance and reinsurance contracts
-1,530,065
1,530,065
-38,072
38,072
Financial investments
1,805,027
-1,805,027
0
0
274,962
-274,962
-38,072
38,072
Chinese yuan (CNY)
Insurance and reinsurance contracts
-769,491
769,491
15,754
-15,754
Financial investments
832,146
-832,146
0
0
62,656
-62,656
15,754
-15,754
Indian rupee (INR)
Insurance and reinsurance contracts
-680,376
680,376
-5,053
5,053
Financial investments
588,218
-588,218
0
0
-92,158
92,158
-5,053
5,053
Other
Insurance and reinsurance contracts
-3,991,623
3,991,623
-80,713
80,713
Financial investments
3,315,663
-3,315,663
0
0
-675,960
675,960
-80,713
80,713
16.7.4.2 Liquidity risk
The Group companies manage liquidity risk in line with the guidelines laid down in the Sava Insurance Group’s liquidity risk management policy. Each Group member carefully plans and monitors the realisation of cash flows (cash inflows and outflows) and, in the event of liquidity problems, informs the parent company, which assesses the situation and provides the necessary funds to ensure liquidity.
Liquidity risk is monitored and managed by the Group companies in accordance with the size and complexity of their operations, with particular attention paid to liquidity risk management in the EU-based insurance companies due to their importance to the Group’s operations.
The Group monitors and manages liquidity risk:
•with clearly defined procedures and rules for the daily planning and liquidity management of each Group company,
•by carefully planning, monitoring, analysing and reporting on realised cash flows,
•by maintaining an adequate level of highly liquid assets,
•through a system of intercompany liquidity lines of credit within the Group,
•through long-term planning and appropriate matching of asset and liability maturities.
The Group companies generally meet their short-term liquidity needs by allocating funds to money market instruments in proportion to their estimated normal day-to-day liquidity requirements.
The adequacy of the assessed liquidity needs at the individual company level is regularly reviewed and analysed by monitoring and analysing realised operating cash flows and comparing them with medium-term cash flow projections.
278
Additional liquidity is provided to the Group companies through a system of intercompany liquidity lines of credit established within the Group companies and by maintaining an appropriate level of highly liquid investments. The Group’s risk strategy requires its EU-based insurance companies to hold at least 20% of their investment portfolio in highly liquid financial assets.
The Group companies prepare monthly reports on the cash flows generated by their core business, which are sent to the parent company together with explanations of significant inflows or outflows and deviations.
The Group’s management is informed of liquidity risks through regular reports which include, as a minimum, a comparison of realised and projected cash flows from the core business and the value and proportion of highly liquid investments in the portfolio.
As at 31 December 2023, highly liquid investments of the Sava Insurance Group represented 44.5% (31 December 2022: 43.0%) of the total investment portfolio, which demonstrates the high liquidity of the portfolio and its consistency with the risk strategy.
We consider the Sava Insurance Group’s liquidity risk to be largely unchanged from 2022 and low.
Insurance liabilities payable on demand
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Amount payable on demand
Carrying amount
Amount payable on demand
Carrying amount
Life – insurance contracts issued without direct participation
2,722,670
13,633,667
2,099,155
11,103,685
Insurance contracts issued with direct participation
517,421,856
586,910,697
416,314,739
478,840,439
Contracts issued with indirect participation
241,511,538
358,163,058
251,720,145
364,121,528
Total
761,656,064
958,707,422
670,134,039
854,065,652
The surrender value, being the amount payable on demand, is the highest in the group of direct participating contracts, which also has the highest carrying amount. The increase in amounts payable on demand compared to the previous year is mainly due to an increase in the volume of direct participating contracts, as a result of portfolio growth and financial market developments.
279
The following two tables show the values of financial investments on the basis of undiscounted cash flows.
Maturity analysis of financial investments and cash and cash equivalents
Sava Insurance Group
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Financial investments measured at fair value through profit or loss
114,587,332
2,686,757
1,726,306
1,442,417
2,734,225
764,548
22,705,242
95,576,983
127,636,477
Financial investments measured at amortised cost
74,776,353
28,287,735
7,304,922
15,475,996
6,787,865
5,808,577
24,190,317
0
87,855,412
Financial investments measured at fair value through other comprehensive income
1,225,364,473
262,344,328
225,229,656
242,274,174
136,530,084
144,302,234
332,062,823
15,969,890
1,358,713,188
Cash and cash equivalents
39,829,039
39,829,039
0
0
0
0
0
0
39,829,039
Investments supporting direct participating contracts
608,535,398
22,686,684
7,860,727
6,253,938
5,880,288
3,169,538
24,717,738
544,804,326
615,373,237
Total
2,063,092,594
355,834,543
242,121,610
265,446,524
151,932,462
154,044,896
403,676,119
656,351,200
2,229,407,354
Sava Insurance Group
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Financial investments measured at fair value through profit or loss
122,378,486
3,089,623
1,352,122
1,791,671
1,507,782
2,799,590
25,053,276
100,113,761
135,707,825
Financial investments measured at amortised cost
62,325,228
13,626,989
16,885,042
2,910,243
11,877,501
5,008,761
22,635,496
0
72,944,033
Financial investments measured at fair value through other comprehensive income
1,107,536,116
188,994,586
142,478,911
183,014,527
191,411,646
116,142,061
452,348,748
14,927,677
1,289,318,156
Cash and cash equivalents
78,339,699
78,339,699
0
0
0
0
0
0
78,339,699
Investments supporting direct participating contracts
498,776,177
17,419,990
1,509,810
1,506,810
3,060
3,060
1,709,120
333,522,219
355,674,069
Total
1,869,355,706
301,470,887
162,225,886
189,223,251
204,799,988
123,953,472
501,746,640
448,563,657
1,931,983,781
The following two tables show insurance and reinsurance contract assets and liabilities on the basis of discounted cash flows.
280
Maturity analysis of insurance liabilities
Sava Insurance Group
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Insurance contract liabilities (other than for participating contracts)
1,064,109,744
474,068,555
145,461,430
92,150,282
60,319,930
47,493,806
244,615,741
0
1,064,109,744
Insurance contract assets (other than for participating contracts)
-9,605,486
-6,718,928
726,297
-395,315
-1,217,307
-1,221,771
-778,462
0
-9,605,486
Participating contracts
586,910,697
15,487,299
13,907,928
16,963,764
24,029,368
25,181,637
491,340,702
0
586,910,697
Total insurance contracts
1,641,414,955
482,836,925
160,095,656
108,718,731
83,131,992
71,453,672
735,177,980
0
1,641,414,955
Reinsurance contract liabilities
1,642,044
2,653,349
-865,452
-188,938
-28,915
12,152
59,848
0
1,642,044
Reinsurance contract assets
-107,481,558
-75,799,217
-17,702,959
-9,349,710
-2,586,260
-647,629
-1,395,783
0
-107,481,558
Total reinsurance contracts
-105,839,514
-73,145,868
-18,568,411
-9,538,648
-2,615,175
-635,477
-1,335,934
0
-105,839,514
Total insurance liabilities
1,535,575,441
409,691,057
141,527,245
99,180,083
80,516,816
70,818,194
733,842,046
0
1,535,575,441
Sava Insurance Group
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Insurance contract liabilities (other than for participating contracts)
1,005,474,718
413,873,860
144,695,165
86,781,016
62,105,280
44,941,060
253,078,337
0
1,005,474,718
Insurance contract assets (other than for participating contracts)
-7,138,341
-7,820,778
1,015,519
475,393
54,667
-129,629
-733,514
0
-7,138,341
Participating contracts
478,840,440
10,328,289
11,465,862
13,662,764
15,557,307
22,206,957
405,619,260
0
478,840,440
Total insurance contracts
1,477,176,817
416,381,371
157,176,546
100,919,173
77,717,255
67,018,387
657,964,084
0
1,477,176,817
Reinsurance contract liabilities
1,051,614
1,015,826
78,110
-28,746
-79,291
3,643
62,072
0
1,051,614
Reinsurance contract assets
-68,133,645
-29,862,851
-20,852,286
-7,573,412
-2,990,393
-1,539,831
-5,314,873
0
-68,133,645
Total reinsurance contracts
-67,082,031
-28,847,024
-20,774,175
-7,602,158
-3,069,684
-1,536,188
-5,252,801
0
-67,082,031
Total insurance liabilities
1,410,094,786
387,534,347
136,402,371
93,317,015
74,647,571
65,482,199
652,711,283
0
1,410,094,786
281
Maturity analysis of other liabilities
Sava Insurance Group
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Subordinated liabilities
74,987,535
0
0
0
0
0
74,987,535
0
74,987,535
Other provisions
8,074,255
1,543,811
177,514
61,270
31,533
1,789,475
4,378,040
92,612
8,074,255
Other financial liabilities
737,085
737,085
0
0
0
0
0
0
737,085
Investment contract liabilities
180,437,695
80,324,218
1,417,236
1,550,345
1,865,798
2,460,961
92,819,137
0
180,437,695
Liabilities from operating activities
23,136,124
18,569,124
5,370
3,538
3,538
3,538
1,799,135
2,751,881
23,136,124
Other liabilities
42,845,539
41,652,245
0
2,067,951
0
0
0
-874,785
42,845,535
Total
330,218,233
142,826,484
1,600,120
3,683,104
1,900,869
4,253,974
173,983,847
1,969,708
330,218,228
Sava Insurance Group
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Subordinated liabilities
74,924,356
0
0
0
0
0
74,924,356
0
74,924,356
Other provisions
7,973,454
1,952,902
1,789,152
3,573,897
48,498
26,432
582,573
0
7,973,454
Other financial liabilities
548,576
548,581
0
0
0
0
0
-7
548,574
Investment contract liabilities
166,197,363
79,023,431
952,066
1,592,421
1,728,492
2,106,754
80,794,199
0
166,197,363
Liabilities from operating activities
13,176,941
8,157,730
3,557,652
0
7,785
0
1,626,315
-172,541
13,176,941
Other liabilities
33,353,137
32,532,864
221,150
398,776
346,934
0
40,948
-187,536
33,353,136
Total
296,173,827
122,215,508
6,520,020
5,565,094
2,131,709
2,133,186
157,968,391
-360,084
296,173,824
282
Sava Re manages liquidity risk in accordance with the guidelines laid down in the liquidity risk management policy of the Sava Insurance Group and Sava Re.
The Company monitors and manages liquidity risk:
•with clearly defined procedures and rules for the daily planning and liquidity management of each Group company,
•by carefully planning, monitoring, analysing and reporting on realised cash flows,
•by maintaining an adequate level of highly liquid assets,
•through a system of intercompany liquidity lines of credit within the Group,
•through long-term planning and appropriate matching of asset and liability maturities.
The Company manages liquidity risk by ensuring funds in the amount of the estimated liquidity requirement. This consists of an assessment of normal day-to-day liquidity needs and a liquidity buffer, and it is provided by allocating assets to money market instruments.
The Company makes the normal current liquidity assessment based on the projected cash flow analysis in the period of up to one year included in the monthly and weekly plans, which take into account the planned investment maturity dynamics as well as other inflows and outflows from operating activities. To this end, historical data from previous monthly and weekly liquidity plans and projections regarding future operations are used. The liquidity reserve is then calculated on the basis of an assessment of the maximum weekly outflows based on historical data.
Additional liquidity is provided to Sava Re through a system of intercompany liquidity lines of credit established within the Group companies and by maintaining an appropriate level of highly liquid investments. The Company’s risk strategy requires that at least 20% of the investment portfolio be invested in highly liquid financial assets.
Management is informed of liquidity risks through regular reports which include, as a minimum, a comparison of realised and projected cash flows from the core business and the value and proportion of highly liquid investments in the portfolio.
The Company held EUR 192.0 million or 52% (31 December 2022: EUR 185.1 million or 52.1%) of highly liquid investments.
The Company’s liabilities with up to 1 year’s maturity at the end of 2023 exceeded short-term assets. Taking into consideration expected operating income and a high share of liquid investments, we estimate the Company’s liquidity position as appropriate.
Based on the above, we estimate that the liquidity risk of the Company is well managed and did not change significantly compared to year-end 2022.
In the following tables, the values of financial investments are shown on the basis of undiscounted cash flows, whereas (re)insurance contract assets and liabilities are shown on the basis of discounted cash flows.
283
Maturity analysis of financial investments and cash and cash equivalents
Sava Re
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Financial investments measured at fair value through profit or loss
37,286,800
186,300
186,300
186,300
186,300
186,300
7,748,409
32,966,164
41,646,073
Financial investments measured at amortised cost
5,811,776
406,400
339,486
3,326,176
1,153,403
82,046
1,968,593
0
7,276,104
Financial investments measured at fair value through other comprehensive income
311,285,620
81,249,862
84,720,879
71,499,122
27,509,728
23,533,266
48,274,645
0
336,787,501
Cash and cash equivalents
12,260,049
12,260,049
0
0
0
0
0
0
12,260,049
Total
366,644,245
94,102,611
85,246,665
75,011,598
28,849,431
23,801,612
57,991,647
32,966,164
397,969,727
Sava Re
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Financial investments measured at fair value through profit or loss
39,718,676
1,523,900
186,400
186,400
186,400
186,400
7,320,506
34,442,673
44,032,679
Financial investments measured at amortised cost
3,871,965
564,866
301,672
213,669
2,200,358
1,097,485
134,315
0
4,512,365
Financial investments measured at fair value through other comprehensive income
280,840,335
77,428,888
46,197,857
54,768,379
46,679,482
20,546,997
67,552,054
0
313,173,657
Cash and cash equivalents
23,926,029
23,926,029
0
0
0
0
0
0
23,926,029
Total
348,357,005
103,443,684
46,685,929
55,168,448
49,066,240
21,830,882
75,006,875
34,442,673
385,644,729
Maturity analysis of insurance liabilities
Sava Re
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Insurance contract liabilities
295,752,723
160,511,367
71,517,218
31,455,296
13,263,165
5,434,969
13,570,708
0
295,752,723
Insurance contract assets
-5,095,344
-8,420,440
1,722,355
1,058,942
405,773
110,555
27,471
0
-5,095,344
Total insurance contracts
290,657,379
152,090,928
73,239,573
32,514,238
13,668,938
5,545,524
13,598,179
0
290,657,379
Reinsurance contract liabilities
446,848
1,548,940
-853,818
-204,205
-44,069
0
0
0
446,848
Reinsurance contract assets
-95,762,621
-66,803,641
-16,272,578
-8,898,097
-2,286,338
-513,655
-988,312
0
-95,762,621
Total reinsurance contracts
-95,315,773
-65,254,701
-17,126,396
-9,102,302
-2,330,407
-513,655
-988,312
0
-95,315,773
Total insurance liabilities
195,341,606
86,836,227
56,113,177
23,411,936
11,338,531
5,031,869
12,609,868
0
195,341,606
284
Sava Re
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Insurance contract liabilities
272,414,051
133,056,229
72,843,218
31,721,798
14,199,439
6,027,470
14,565,898
0
272,414,051
Insurance contract assets
-3,071,631
-6,161,575
1,660,701
913,810
375,558
122,640
17,235
0
-3,071,631
Total insurance contracts
269,342,420
126,894,653
74,503,919
32,635,607
14,574,997
6,150,110
14,583,133
0
269,342,420
Reinsurance contract liabilities
320,044
418,130
58,851
-49,160
-96,926
-10,852
0
0
320,044
Reinsurance contract assets
-61,224,914
-25,185,819
-20,194,495
-7,225,375
-2,537,356
-1,336,254
-4,745,616
0
-61,224,914
Total reinsurance contracts
-60,904,871
-24,767,689
-20,135,643
-7,274,535
-2,634,282
-1,347,106
-4,745,616
0
-60,904,871
Total insurance liabilities
208,437,549
102,126,964
54,368,276
25,361,072
11,940,715
4,803,004
9,837,518
0
208,437,549
Maturity analysis of other liabilities
Sava Re
EUR
Carrying amount as at 31 December 2023
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2023
Subordinated liabilities
74,987,535
2,812,500
2,812,500
2,812,500
2,812,500
2,812,500
77,812,500
91,875,000
Other provisions
419,660
18,121
18,457
44,740
14,538
25,043
298,761
0
419,660
Other financial liabilities
0
0
0
0
0
0
0
0
0
Investment contract liabilities
0
0
0
0
0
0
0
0
0
Liabilities from operating activities
6,319,991
6,319,991
0
0
0
0
0
0
6,319,991
Other liabilities
5,130,387
5,130,387
0
0
0
0
0
0
5,130,387
Total
86,857,573
14,280,999
2,830,957
2,857,240
2,827,038
2,837,543
78,111,261
0
103,745,038
Sava Re
EUR
Carrying amount as at 31 December 2022
Up to 1 year
1–2 years
2–3 years
3–4 years
4–5 years
Over 5 years
No specified maturity
Total as at 31 December 2022
Subordinated liabilities
74,924,356
2,812,500
2,812,500
2,812,500
2,812,500
2,812,500
80,625,000
94,687,500
Other provisions
392,640
23,207
13,448
24,585
39,875
17,256
274,268
0
392,640
Other financial liabilities
0
0
0
0
0
0
0
0
0
Investment contract liabilities
0
0
0
0
0
0
0
0
0
Liabilities from operating activities
45,414
45,414
0
0
0
0
0
0
45,414
Other liabilities
4,476,183
4,476,183
0
0
0
0
0
0
4,223,827
Total
79,838,593
7,357,304
2,825,948
2,837,085
2,852,375
2,829,756
80,899,268
0
99,601,737
285
16.7.4.3 Credit risk
Assets exposed to credit risk include financial investments (deposit investments, bonds, loans granted, deposits with cedants, bond and convertible mutual funds, and cash and cash equivalents), receivables due from reinsurers and other receivables.
Exposure of assets to credit risk of the Group
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Type of asset
Amount
Amount
Fixed-rate investments
1,420,034,999
1,334,655,954
Debt instruments
1,369,475,036
1,241,432,325
Cash and cash equivalents
50,559,963
93,223,629
Reinsurance contract assets
107,481,560
68,133,642
Current tax assets
444,616
3,412,855
Trade and other receivables
14,271,358
12,282,973
Total exposure
1,542,232,533
1,418,485,424
Exposure of assets to credit risk of Sava Re
Sava Re
EUR
31 December 2023
31 December 2022
Type of asset
Amount
Amount
Fixed-rate investments
336,075,275
316,160,834
Debt instruments
323,815,226
292,234,805
Cash and cash equivalents
12,260,049
23,926,029
Reinsurance contract assets
95,762,621
61,224,914
Current tax assets
0
49,594
Trade and other receivables
198,366
213,228
Total exposure
432,036,262
377,648,571
Credit risk due to issuer default
As at 31 December 2023, the Group was exposed to credit risk in the amount of EUR 1,542.2 million (31 December 2022: EUR 1,395.8 million).
As at 31 December 2023, the Company was exposed to credit risk in the amount of EUR 432.0 million (31 December 2022: EUR 377.4 million).
Credit risk for investments is estimated based on two factors:
•credit ratings used in determining credit risk for fixed-rate investments 133 and cash assets 134;
•performance indicators for other investments.
Below we set out an assessment of credit risk for fixed-rate investments.
133 Included are government bonds, corporate bonds, deposits and loans granted, deposits with cedants, bond and convertible mutual funds, and private debt fund investments.
134 This includes cash and demand deposits.
286
Fixed-rate investments by issuer credit rating
Sava Insurance Group
EUR
31 December 2023
31 December 2022
% change (p.p.)
Based on S&P/Fitch ratings
Amount
As % of total
Amount
As % of total
AAA
336,369,733
24.6%
272,546,840
22.0%
2.6
AA
287,122,315
21.0%
230,124,711
18.5%
2.5
A
348,730,591
25.5%
322,414,303
26.0%
-0.5
BBB
248,860,893
18.2%
261,402,855
21.1%
-2.9
BB
64,149,305
4.7%
56,794,372
4.6%
0.1
B
16,755,540
1.2%
14,975,341
1.2%
0.0
Not rated
67,486,659
4.9%
83,173,903
6.7%
-1.8
Total
1,369,475,036
100.0%
1,241,432,325
100.0%
0.00
Cash and cash equivalents by credit rating
Sava Insurance Group
EUR
31 December 2023
31 December 2022
% change (p.p.)
Based on S&P/Fitch ratings
Amount
As % of total
Amount
As % of total
A
416
0.0%
124
0.0%
0.0
BBB
20,365,890
40.3%
47,017,059
50.4%
-0.1
BB
143,830
0.3%
291,663
0.3%
0.0
Not rated
30,049,828
59.4%
45,914,783
49.3%
0.1
Total
50,559,963
100.0%
93,223,629
100.0%
0.0
As regards management of credit risk, the objective pursued by the Group determines that the share of debt instruments and cash and cash-equivalents accounts for at least 75% of the investment portfolio value. As at 31 December 2023, these assets represented 93.6% of the investment portfolio (31 December 2022: 90.1%).
As at 31 December 2023, fixed-rate investments rated “A” or better accounted for 71.1% of the total fixed-rate portfolio (31 December 2022: 66.5%). The share of the best-rated investments increased somewhat in 2022 compared with the previous year. Fixed-rate investments with no credit rating available accounted for 4.9% of fixed-rate investments (previous year: 6.9%).
The composition of cash and cash equivalents reflects the banking system in the region where the Group has a presence through subsidiaries.
Fixed-rate investments by issuer credit rating*
Sava Re
EUR
31 December 2023
31 December 2022
% change (p.p.)
Based on S&P/Fitch ratings
Amount
As % of total
Amount
As % of total
AAA
122,374,700
37.8%
123,438,923
42.2%
-4.4
AA
96,935,351
29.9%
75,239,126
25.7%
4.2
A
66,661,733
20.6%
53,222,345
18.2%
2.4
BBB
28,882,802
8.9%
29,847,230
10.2%
-1.3
BB
0
0.0%
997,504
0.3%
-0.3
B
721,149
0.2%
405,253
0.1%
0.1
Not rated
8,239,491
2.5%
9,084,422
3.1%
-0.6
Total
323,815,226
100.0%
292,234,805
100.0%
Cash and cash equivalents by credit rating
Sava Re
EUR
31 December 2023
31 December 2022
% change (p.p.)
Based on S&P/Fitch ratings
Amount
As % of total
Amount
As % of total
A
416
0.0%
124
0.0%
0.0
BBB
7,682,651
62.7%
14,877,410
62.2%
0.5
Not rated
4,576,983
37.3%
9,048,495
37.8%
-0.5
Total
12,260,049
100.0%
23,926,029
100.0%
287
In terms of credit risk management, the Company aims to have a substantial portion of its debt investments rated “A-” or better. As at 31 December 2023, fixed-rate debt investments rated “A” or better represented 88.3% (31 December 2022: 86.1%) of total debt investments. The Company regularly monitors its exposure to individual issuers and any changes in their creditworthiness in order to be prepared to respond in a timely manner to any adverse developments in the financial markets or an increase in risk associated with an issuer.
The Company mitigates the credit risk of its other investments through a high degree of diversification and by investing in liquid securities.
The investment portfolios of the Sava Insurance Group and the Company are well diversified in accordance with local law and Group internal rules in order to avoid high concentration in a particular type of investment, high concentration with a particular counterparty or economic sector, or other potential forms of concentration.
The composition of cash and cash equivalents reflects the banking system in the region in which we operate.
Concentration of financial investments by industry
Sava Insurance Group
EUR
31 December 2023
31 December 2022
% change (p.p.)
Industry
Amount
As % of total
Amount
As % of total
Government
859,201,655
55.7%
772,241,781
52.9%
2.8
Banks
157,992,535
10.2%
166,396,360
11.4%
-1.2
– Cash and cash equivalents
50,531,494
3.3%
93,181,947
6.4%
-3.1
– Other
107,461,041
7.0%
73,214,413
5.0%
2.0
Utilities
143,832,627
9.3%
134,239,893
9.2%
0.1
Other financial institutions
109,418,846
7.1%
108,418,552
7.4%
-0.3
Consumables
100,956,361
6.5%
104,447,548
7.2%
-0.6
Manufacturing
63,031,354
4.1%
53,856,376
3.7%
0.4
Infrastructure
57,339,858
3.7%
52,054,299
3.6%
0.2
Property
51,405,309
3.3%
69,096,975
4.7%
-1.4
Total
1,543,178,544
100.0%
1,460,751,783
100.0%
The Group’s largest exposure by asset class is to government bonds (31 December 2023: Germany 10.3%, 31 December 2022: Slovenia 7.6%).
Concentration of financial investments by industry
Sava Re
EUR
31 December 2023
31 December 2022
% change (p.p.)
Industry
Amount
As % of total
Amount
As % of total
Government
231,494,236
61.9%
215,684,088
60.6%
1.3
Banks
33,816,689
9.0%
38,872,331
10.9%
-1.9
– Cash and cash equivalents
12,260,049
3.3%
23,926,029
6.7%
-3.4
– Other
21,556,640
5.8%
14,946,302
4.2%
1.6
Other financial institutions
29,439,519
7.9%
16,341,290
4.6%
3.3
Utilities
21,084,448
5.6%
25,175,956
7.1%
-1.4
Infrastructure
20,604,910
5.5%
18,843,871
5.3%
0.2
Consumables
18,328,796
4.9%
17,488,204
4.9%
0.0
Investment property
13,898,550
3.7%
15,149,931
4.3%
-0.5
Manufacturing
5,559,207
1.5%
8,523,027
2.4%
-0.9
Total
374,226,354
100.0%
356,078,698
100.0%
The Company’s largest exposure by asset class is also to government bonds (31 December 2023: Germany 12.9%; 31 December 2022: Germany 10.5%).
288
Concentration of financial investments by region
Sava Insurance Group
EUR
31 December 2023
31 December 2022
% change (p.p.)
Region
Amount
As % of total
Amount
As % of total
Slovenia
193,373,933
12.5%
228,540,299
15.6%
-3.1
Europe, EU Member States
918,335,348
59.5%
836,128,026
57.2%
2.3
Europe, non-EU members
187,016,915
12.1%
164,626,362
11.3%
0.8
United States
182,803,079
11.8%
168,553,859
11.5%
0.3
Rest of the world
61,649,269
4.0%
62,903,237
4.3%
-0.3
Total
1,543,178,544
100.0%
1,460,751,783
100.0%
The Group’s largest exposure by region is to the EU member states (31 December 2023: 59.5%, 31 December 2022: 57.2%). This is followed by the exposure to Slovenia-based issuers (31 December 2023: 12.5%; 31 December 2022: 15.6%) and the exposure to non-EU issuers (31 December 2022: 12.1%; 31 December 2021: 11.3%). The distribution of exposure to other regions did not change significantly compared to the end of 2022.
Concentration of financial investments by region
Sava Re
EUR
31 December 2023
31 December 2022
% change (p.p.)
Region
Amount
As % of total
Amount
As % of total
Slovenia
45,642,526
12.2%
56,453,808
15.9%
-3.7
Europe, EU Member States
229,660,282
61.4%
199,723,569
56.1%
5.3
Europe, non-EU members
13,877,950
3.7%
19,320,306
5.4%
-1.7
United States
47,354,483
12.7%
43,759,704
12.3%
0.4
Rest of the world
37,691,114
10.1%
36,821,312
10.3%
-0.2
Total
374,226,354
100.0%
356,078,698
100.0%
The largest exposure of the Company is to EU Member States (31 December 2023: 61.4%, 31 December 2022: 56.1%). This is followed by the exposure to Slovenia-based issuers (31 December 2023: 12.2%; 31 December 2022: 15.9%) and exposure to issuers based in the United States (31 December 2023: 12.7%; 31 December 2022: 12.3%).
Exposure to Slovenia by type of asset
Sava Insurance Group
EUR
31 December 2023
31 December 2022
% change (p.p.)
Type of investment
Amount
As % of total
Amount
As % of total
Government bonds
105,036,038
6.8%
103,325,597
7.1%
-0.3
Cash and cash equivalents
39,944,537
2.6%
77,128,062
5.3%
-2.7
Investment property
19,346,001
1.3%
19,595,377
1.3%
-0.1
Corporate bonds
14,666,100
1.0%
13,094,074
0.9%
0.1
Shares
5,593,016
0.4%
9,844,715
0.7%
-0.3
Mutual funds
3,428,351
0.2%
3,265,204
0.2%
0.0
Deposits and CDs
3,067,028
0.2%
0
0.0%
0.2
Infrastructure funds
1,641,000
0.1%
1,260,856
0.1%
0.0
Loans granted
651,862
0.0%
1,026,414
0.1%
0.0
Total
193,373,933
12.5%
228,540,299
15.6%
-3.1
The Group’s exposure to Slovenia decreased by 3.1 p.p. in 2023. As at 31 December 2023, investments in government bonds represented the largest exposure to Slovenia, the same as at 31 December 2022. They accounted for 6.8% of the total portfolio, down by 0.3 p.p. compared to the previous year.
As at 31 December 2023, the Group’s exposure to the ten largest issuers was EUR 569.4 million, representing 36.9% of financial investments (31 December 2022: EUR 485.9 million; 33.3%). The Group’s largest exposure to a single issuer is to Germany.
289
Exposure to Slovenia by type of asset
Sava Re
EUR
31 December 2023
31 December 2022
% change (p.p.)
Type of investment
Amount
As % of total
Amount
As % of total
Government bonds
13,590,744
3.6%
12,354,165
3.5%
0.2
Cash and cash equivalents
10,426,394
2.8%
22,551,153
6.3%
-3.5
Investment property
7,582,109
2.0%
7,721,693
2.2%
-0.1
Corporate bonds
5,411,620
1.4%
3,962,278
1.1%
0.3
Shares
3,298,739
0.9%
6,892,061
1.9%
-1.1
Loans granted
2,670,572
0.7%
1,711,601
0.5%
0.2
Infrastructure funds
1,641,000
0.4%
1,260,856
0.4%
0.1
Deposits and CDs
1,021,347
0.3%
0
0.0%
0.3
Total
45,642,526
12.2%
56,453,808
15.9%
-3.7
At the year end, the exposure of the Company to Slovenia-based issuers was EUR 45.6 million, representing 12.2% of financial investments (31 December 2022: EUR 56.4 million; 15.9%). Compared to 31 December 2022, the share of such investments decreased by 3.7 p.p., chiefly due to the lower balance of cash and cash equivalents and equity investments.
As at 31 December 2023, the Company’s exposure to the ten largest issuers was EUR 154.5 million, representing 41.3% of financial investments (31 December 2022: EUR 150.5 million; 42.3%). The largest single issuer of securities to which the Company is exposed is Germany. As at 31 December 2023, the exposure totalled EUR 48.3 million or 12.9% of financial investments (31 December 2022: EUR 38.5 million; 10.8%).
We assess that in 2023, the Sava Insurance Group companies – by maintaining a large percentage of highly-rated investments, diversification of investments by industry and geography and reducing concentration – managed credit risk well, maintaining it on the same level as in 2022.
Expected credit losses (ECL)
The Group monitors credit risk by monitoring the calculated expected credit losses, which measure the potential for an investment to be impaired or reduced in value due to the credit risk of the issuer. The expected credit loss of an investment is measured according to its stage, which is reviewed on a monthly basis. The majority of the investments for which the Company measures and monitors expected credit losses (bonds, loans, deposits) are classified as stage 1, meaning that the Company has not experienced a significant increase in credit risk since the date the investment was recognised. For the value of investments exposed to credit risk, changes in the fair value of interest on FVOCI investments, changes in the amortised cost of AC investments, and changes in accrued interest and exchange rate differences are recorded in the table under “Other changes”.
290
Gross carrying amount of financial assets exposed to credit risk
Sava Insurance Group
EUR
2023
2022
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Balance as at 1 January
1,198,111,917
7,344,968
0
1,205,456,885
1,350,271,713
14,467,493
0
1,364,739,206
Opening balance – without transfer
0
0
0
0
0
0
0
0
New financial assets acquired
360,584,373
0
0
360,584,373
258,062,215
0
0
258,062,215
Financial assets derecognised
-249,219,268
-2,245,105
0
-251,464,373
-240,670,820
-2,391,185
0
-243,062,005
Transfer to stage 1
0
0
0
0
0
0
0
0
Transfer to stage 2
0
0
0
0
-392,357
392,357
0
0
Transfer to stage 3
0
0
0
0
0
0
0
0
Change in business models and risk parameters
-73,523
0
0
-73,523
-850,631
0
0
-850,631
Other changes
21,943,498
692,025
0
22,635,522
-168,321,046
-5,123,697
0
-173,444,743
Exchange differences
-51,057
0
0
-51,057
12,837
0
0
12,837
Balance as at 31 December
1,331,295,939
5,791,888
0
1,337,087,827
1,198,111,911
7,344,968
0
1,205,456,879
Total change in expected credit losses (ECL) for AC and FVOCI investments
Sava Insurance Group
EUR
2023
2022
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Balance as at 1 January
-1,539,951
-604,682
0
-2,144,633
0
0
0
0
Opening balance – without transfer
0
0
0
0
-1,347,048
-1,148,867
0
-2,495,915
Transfer to stage 1
0
0
0
0
0
0
0
0
Transfer to stage 2
0
0
0
0
339
-339
0
0
Transfer to stage 3
0
0
0
0
0
0
0
0
Change in contractual cash flows
0
0
0
0
0
0
0
0
Resulting from new acquisitions of financial assets
-600,119
0
0
-600,119
-585,599
0
0
-585,599
Eliminated on sale or maturity of financial assets
573,026
2,145
0
575,171
552,740
547,907
0
1,100,647
Other changes
117,232
252,034
0
369,266
-160,389
-3,383
0
-163,772
Exchange differences
164
0
0
164
10
0
0
10
Balance as at 31 December
-1,449,648
-350,503
0
-1,800,151
-1,539,947
-604,682
0
-2,144,629
Gross carrying amount of financial assets exposed to credit risk
Sava Re
EUR
2023
2022
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Balance as at 1 January
283,353,365
1,402,758
0
284,756,123
275,409,135
1,767,528
0
277,176,663
New financial assets acquired
118,305,237
0
0
118,305,237
100,226,328
0
0
100,226,328
Financial assets derecognised
-92,262,078
-1,000,000
0
-93,262,078
-68,469,935
0
0
-68,469,935
Transfer to stage 1
0
0
0
0
0
0
0
0
Transfer to stage 2
0
0
0
0
0
0
0
0
Transfer to stage 3
0
0
0
0
0
0
0
0
Change in business models and risk parameters
0
0
0
0
0
0
0
0
Other changes
7,029,370
318,391
7,347,760
-23,812,163
-364,770
0
-24,176,933
Balance as at 31 December
316,425,894
721,149
0
317,147,043
283,353,365
1,402,758
0
284,756,123
291
Total change in expected credit losses (ECL) for AC and FVOCI investments
Sava Re
EUR
2023
2022
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Balance as at 1 January
-103,893
-180,023
0
-283,916
-141,047
-164,859
0
-305,905
Transfer to stage 1
0
0
0
0
0
0
0
0
Transfer to stage 2
0
0
0
0
0
0
0
0
Transfer to stage 3
0
0
0
0
0
0
0
0
Change in contractual cash flows
0
0
0
0
24,232
-15,165
0
9,067
Resulting from new acquisitions of financial assets
-30,519
0
0
-30,519
-65,093
0
0
-65,093
Eliminated on sale or maturity of financial assets
16,528
0
0
16,528
90,477
0
0
90,477
Other changes
68,913
0
0
68,913
-12,461
0
0
-12,461
Balance as at 31 December
-48,971
-180,023
0
-228,994
-103,893
-180,023
0
-283,916
The main input parameters for determining credit losses are the probability of default (PD), the loss given default (LGD) and the exposure at default (EAD). The probability of default is modelled as a function of historical average default probabilities over time, a systematic risk factor and a correlation parameter. The value of a systematic risk or economic condition factor reflects the position in the economic cycle over a period of time. The Company determines the business cycle index based on the deviation of GDP growth in the OECD area from its long-term trend. Mathematical operations can be used to obtain the long-term trend and the cyclical component (deviations from trend) from nominal GDP.
In addition to the baseline scenario, a downside and an upside scenario were used in the sensitivity analysis, after which the expected credit losses were recalculated.
Assumptions used in the sensitivity analysis
31 December 2023
31 December 2022
Downside
Baseline
Upside
Downside
Baseline
Upside
Change in GDP
5.0%
5.7%
10.7%
2.6%
6.8%
15.0%
Economic cycle index
-0.97
-0.74
0.40
-1.43
-0.82
-
Correlation factor
0.01
-
0.04
0.02
0.02
0.02
Average change in default rate
0.4%
0.0%
-0.4%
0.4%
0.0%
-0.4%
Sensitivity analysis of expected credit loss (ECL)
Sava Insurance Group
31 December 2023
31 December 2022
Downside
Baseline
Upside
Downside
Baseline
Upside
Investments for which expected credit loss (ECL) is calculated
1,338,671,336
1,338,671,336
1,338,671,336
1,205,643,710
1,205,643,710
1,205,643,710
Expected credit loss
-2,267,606
-1,800,154
-1,305,340
-2,647,327
-2,144,634
-1,660,630
% of stage 2 investments
19.6%
19.5%
20.1%
28.1%
28.2%
28.2%
Sensitivity analysis of the change in expected credit loss (ECL)
Sava Re
31 December 2023
31 December 2022
Downside
Baseline
Upside
Downside
Baseline
Upside
Investments for which expected credit loss (ECL) is calculated
317,097,396
317,097,396
317,097,396
284,712,300
284,712,300
284,712,300
Expected credit loss
-286,791
-228,994
-169,812
-344,741
-283,916
-222,912
% of stage 2 investments
54.7%
54.7%
56.1%
62.6%
63.4%
63.8%
For the purpose of sensitivity testing of the ECL level, a stress scenario has been prepared where the average default rate is shocked by around 40 basis points. Such a change in the probability of default would reduce the estimated long-term expected economic activity (change in GDP) by around 0.7 p.p. in the downside scenario and by 5 p.p. in the upside scenario. A change in these assumptions would
292
increase the Group’s ECLs from EUR -1.8 million to EUR -2.3 million in 2023 in the case of deterioration and from EUR -1.8 million to EUR -1.3 million in the case of improvement. The Group has 6 stage 2 investments in its portfolio, representing 19.5% of the total ECL at 31 December 2023 (31 December 2022: 28.2%).
In Sava Re, in case of a deterioration of the situation, the ECL would increase from EUR -0.2 million to EUR -0.3 million, and in case of an improvement of the situation, the provision would decrease from EUR -0.2 million to EUR 0.2 million. The Company has 1 stage 2 investment in its portfolio, representing 54.7% of the total ECL as at 31 December 2023 (31 December 2022: 62.4%).
Credit risk with respect to reinsurers
The Group is also exposed to credit risk in relation to its reinsurance programme. As a rule, subsidiaries conclude reinsurance contracts directly with the parent company. Exceptionally, if so required by local regulations, they buy reinsurance from providers of assistance services and local reinsurers. In such cases, local reinsurers transfer the risks to Sava Re, thus reducing the effective credit risk exposure relating to reinsurers below the one correctly shown according to accounting rules.
Reinsurance programmes are mostly placed with first-class reinsurers with an appropriate credit rating (at least “A-” according to S&P Global Ratings for long-term business and at least “BBB+” for short-term business). Thus, more than 90% of the Sava Insurance Group’s credit risk exposure to reinsurers at the end of 2023 (2022: at least 90%) related to reinsurers rated “BBB” or better. When classifying reinsurers by credit rating group, we considered the credit rating of each individual reinsurer, also where the reinsurer is part of a group. Often such reinsurers are unrated subsidiaries, while the parent company has a credit rating. We consider such a treatment conservative, as ordinarily a parent company takes action if a subsidiary gets into trouble.
As at 31 December 2023, the total exposure of the Sava Insurance Group to credit risk relating to reinsurers was EUR 107.5 million (31 December 2022: EUR 68.1 million) and relates to reinsurance contract assets (including receivables due from reinsurers). At 31 December 2023, the credit risk exposure relating to reinsurers represented 4.2% of total assets (31 December 2022: 2.9%).
Exposure of the Sava Insurance Group to reinsurers by credit rating
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Rated by S&P / AM Best
Amount
As % of total
Amount
As % of total
(A++ or A+)/(AAA or AA)
9,217,251
8.6%
7,833,945
11.5%
A / (A or A-)
85,004,406
79.1%
49,126,424
72.1%
BBB / (B++ or B+)
5,091,721
4.7%
4,947,880
7.3%
Less than BBB / less than B+
929,745
0.9%
2,780,351
4.1%
Not rated
7,238,436
6.7%
3,445,045
5.1%
Total
107,481,558
100.0%
68,133,645
100.0%
The Company’s reinsurance programmes are mostly placed with first-class reinsurers with an appropriate credit rating (at least “A-” according to S&P Global Ratings for long-term business, and at least “BBB+” for short-term business). We consider this risk to be low, particularly as the investment portfolio is adequately diversified. See details in the following table. Thus, more than 95% of the credit risk exposure to reinsurers at the end of 2023 (2022: slightly less than 95%) related to reinsurers rated “BBB” or better.
As at 31 December 2023, the total exposure of the Company to credit risk from reinsurers was EUR 95.8 million (31 December 2022: EUR 61.2 million) and relates to reinsurance contract assets (including receivables due from reinsurers). The Company’s total credit risk exposure to retrocessionaires was 3.6% of total assets in 2023 (31 December 2022: 2.5%).
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Sava Re’s exposure to reinsurers by credit rating
Sava Re
EUR
31 December 2023
31 December 2022
Rated by S&P / AM Best
Amount
As % of total
Amount
As % of total
(A++ or A+)/(AAA or AA)
8,313,572
8.7%
7,007,250
11.5%
A / (A or A-)
82,329,114
86.0%
47,386,736
77.4%
BBB / (B++ or B+)
2,865,505
3.0%
3,504,453
5.7%
Less than BBB / less than B+
929,745
1.0%
2,780,351
4.5%
Not rated
1,324,684
1.4%
546,124
0.9%
Total
95,762,621
61,224,914
Counterparty default risk
The following tables show the Group’s and the Company’s share of total receivables by type and maturity.
294
Receivables ageing analysis as at 31 December 2023
Sava Insurance Group
EUR
31 December 2023
Not past due
Past due up to 30 days
Past due from 31 to 60 days
Past due from 61 to 90 days
Past due from 91 to 180 days
Past due from 181 days to 1 year
Past due over 1 year
Total
Gross amount
Allowance
Receivables
Current tax assets
444,616
0
444,616
437,109
0
0
0
0
0
7,507
444,616
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
4,533,434
-1,148,176
3,385,258
1,551,247
1,712,619
36,470
10,302
15,459
2,887
56,274
3,385,258
Receivables arising out of investments
728,130
-166,900
561,230
368,526
174,693
0
0
0
0
18,011
561,230
Trade and other receivables
12,422,002
-2,097,132
10,324,870
10,009,539
217,384
29,101
25,669
14,550
8,962
19,665
10,324,870
Trade and other receivables
17,683,566
-3,412,208
14,271,358
11,929,312
2,104,696
65,571
35,971
30,009
11,849
93,950
14,271,358
Total
18,128,182
-3,412,208
14,715,974
12,366,421
2,104,696
65,571
35,971
30,009
11,849
101,457
14,715,974
Receivables ageing analysis as at 31 December 2022
Sava Insurance Group
EUR
31 December 2022
Not past due
Past due up to 30 days
Past due from 31 to 60 days
Past due from 61 to 90 days
Past due from 91 to 180 days
Past due from 181 days to 1 year
Past due over 1 year
Total
Gross amount
Allowance
Receivables
Current tax assets
3,412,855
0
3,412,855
3,412,855
0
0
0
0
0
0
3,412,855
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
4,466,344
-2,170,209
2,296,135
1,095,158
1,122,348
29,222
7,588
24,560
5,707
11,552
2,296,135
Receivables arising out of investments
2,203,462
-163,322
2,040,140
1,875,273
146,595
0
0
0
0
18,272
2,040,140
Trade and other receivables
10,777,938
-2,831,240
7,946,698
7,397,929
369,700
102,005
11,845
22,707
5,619
36,893
7,946,698
Trade and other receivables
17,447,744
-5,164,771
12,282,973
10,368,360
1,638,643
131,227
19,433
47,267
11,326
66,717
12,282,973
Total
20,860,599
-5,164,771
15,695,828
13,781,215
1,638,643
131,227
19,433
47,267
11,326
66,717
15,695,828
The Group assessed its receivables for impairment. Allowances were established for receivables that needed to be impaired. Receivables are discussed in greater detail in note 16.8.17 “Receivables”.
295
Receivables ageing analysis as at 31 December 2023
Sava Re
EUR
31 December 2023
Not past due
Past due up to 30 days
Past due from 31 to 60 days
Past due from 61 to 90 days
Past due from 91 to 180 days
Past due from 181 days to 1 year
Past due over 1 year
Total
Gross amount
Allowance
Receivables
Receivables arising out of investments
34,478
0
34,478
34,478
0
0
0
0
0
0
34,478
Trade and other receivables
504,923
-341,035
163,888
163,888
0
0
0
0
0
0
163,888
Trade and other receivables
539,401
-341,035
198,366
198,366
0
0
0
0
0
0
198,366
Total
539,401
-341,035
198,366
198,366
0
0
0
0
0
0
198,366
Receivables ageing analysis as at 31 December 2022
Sava Re
EUR
31 December 2022
Not past due
Past due up to 30 days
Past due from 31 to 60 days
Past due from 61 to 90 days
Past due from 91 to 180 days
Past due from 181 days to 1 year
Past due over 1 year
Total
Gross amount
Allowance
Receivables
Current tax assets
49,594
0
49,594
49,594
0
0
0
0
0
0
49,594
Receivables arising out of investments
15,889
0
15,889
15,889
0
0
0
0
0
0
15,889
Trade and other receivables
538,374
-341,035
197,340
197,339
0
0
0
0
0
0
197,339
Trade and other receivables
554,263
-341,035
213,228
213,228
0
0
0
0
0
0
213,228
Total
603,857
-341,035
262,823
262,822
0
0
0
0
0
0
262,822
Sava Re assessed its receivables for impairment. Allowances were established for receivables that needed to be impaired. Receivables are discussed in greater detail in note 16.8.17 “Receivables”.
296
Investment contracts
The Group’s investment contracts include a group of life cycle funds called MY Life-cycle Funds (Slovenian: MOJI skladi življenjskega cikla), relating to supplementary pension business of the company Sava Pokojninska in the accumulation phase. Investment contract liabilities are not included in the consolidated insurance and reinsurance contract liabilities, and are, therefore, not included in the presentation of underwriting risk. Investment contract assets are not included in the consolidated financial investments item, and are, therefore, not included in the presentation of investment portfolio risk.
As regards investment contract assets and liabilities, the Group is exposed to the risk of not achieving the interest-rate guarantees in one of the long-term business funds with an interest-rate guarantee (the MGF 135 fund). The interest-rate guarantee on the MGF is 60% of the average annual interest rate on government securities with a maturity of over one year. Liabilities relating to the MGF comprise paid-in premiums, guaranteed return and amounts in excess of the guaranteed return, provided the company achieves it.
In years when the return in excess of guaranteed return is realised, liabilities to the members of the MGF for assets in excess of guaranteed levels of assets are increased; if, however, realised return is below the guaranteed level, this part of liabilities decreases until the provision is fully exhausted. The described control of guaranteed return is carried out at the level of individual members’ accounts. In the event that individual provisions of any account are not sufficient to cover the guaranteed assets, the company is required to make provisions for the difference, up to a maximum of 20% of equity.
The risk of failing to realise interest-rate guarantees is managed primarily through appropriate management of policyholder assets and liabilities, an appropriate investment strategy, an adequate level of the company’s equity and provisioning. The Group tests its risk exposure arising out of interest-rate guarantees through stress tests and scenarios as part of the own risk and solvency assessment. We estimate that the risk of additional payments made in order to achieve the interest-rate guarantees decreased in 2023 relative to 2022, due to favourable capital market conditions.
The value of fund assets of the North Macedonian pension company Sava Penzisko Društvo (two funds: a mandatory and a voluntary fund) is not included in the statement of financial position of the company as these are funds under management (similar treatment as for fund management companies). The role of the North Macedonian pension company is solely to manage the assets; the funds have no interest-rate guarantees. Consequently, the company is not exposed to the risk to which investment contracts are exposed, i.e. failure to realise the interest-rate guarantees.
We estimate that the risk of failure to achieve interest-rate guarantees is medium and slightly decreased in 2023 compared to the previous year due to the favourable financial market conditions.
16.7.5 Operational risks
Operational risk is the risk of loss arising from inadequate or failed internal processes, people or systems, or from external events.
Operational risks are not among the main risks faced by the Sava Insurance Group and Sava Re, but they are nevertheless actively monitored and managed at both levels. The assessment of operational risks in the Group companies and at Group level is mainly based on qualitative assessment of the likelihood and financial severity within the risk register. Through regular assessments, the Group
135 Moj zajamčeni sklad (My Guaranteed Fund).
297
companies gain insight into the actual level of their exposure to such risks and take the necessary measures to mitigate them.
According to the qualitative assessment, the exposure of the Sava Insurance Group and Sava Re to operational risk is medium.
The key operational risks of the Sava Insurance Group in 2023, ranked according to their rating in the risk register (from highest to lowest) are set out below. Risks that increased in 2023 are marked as such:
•the risk of personal data breaches by the EU-based companies (increased due to the implementation of the new Data Protection Act (ZVOP-2)),
•the risk of intentional or unintentional leakage of confidential information,
•the risk of data loss due to a compromised or non-functioning IT system (slightly increased),
•the risk of cyberattack,
•the risks associated with subsidiaries reporting to the parent,
•the risk of inadequate provision of external IT services (in-house or commercial cloud services),
•the risk of errors in the consolidated calculations for the Group (increased due to the implementation of the new accounting standard IFRS 17).
The key operational risks of the Company in 2023, ranked according to their rating in the risk register (from highest to lowest), are set out below. Risks that increased in 2023 are marked as such:
•the risk of personal data breaches (increased due to the implementation of the new Data Protection Act (ZVOP-2)),
•the risk of intentional or unintentional leakage of confidential information,
•the risk of cyberattack,
•the risk of inadequate IT support for reinsurance,
•the risk of inadequate provision of external IT services (in-house or commercial cloud services),
•the risk of data loss due to a compromised or non-functioning IT system (slightly increased),
•the risk related to the sanctions clause,
•the risk of incorrect calculation input data, miscalculations or errors in Sava Re’s internal or external reports (related to Solvency II) (increased due to the transition to the new accounting standard IFRS 17),
•risk of misstatements in reports to the management or supervisory boards (increased due to the implementation of the new accounting standard IFRS 17).
To manage operational risks effectively, the Group companies have processes in place to identify, measure, monitor, manage and report on such risks. Operational risk management processes have also been set up at the Group level and are defined in the operational risk management policy.
The main measures of operational risk management at the individual company and Group levels include:
•maintaining an effective business processes management system and a system of internal controls,
•maintaining records of and monitoring incidents,
•awareness-raising and training of all employees on their role in the implementation of the internal control system and management of operational risks,
•implementing appropriate policies as regards information security,
•having in place a business continuity plan for all critical processes (to minimise the risk of unpreparedness for incidents and external events and any resulting business interruption),
•monitoring operational risk indicators at Group level for all Group companies (indicators are defined in the risk strategy and are also used to indirectly measure reputational risk),
298
•having in place IT-supported processes and controls in the key areas of business of every Group company,
•awareness-raising and training of all employees.
The Group and the Company estimate the exposure to operational risk to be moderate in 2023, with a slight increase compared to 2022. At Group and company level, risks have increased mainly due to higher assessed risks related to legal and regulatory compliance (including the risk of personal data breaches and the risk that IT plans do not comply with legal or regulatory requirements) and risks related to the management and implementation of processes (including the risk of data loss and the risk of misstatements in reports to the management and supervisory boards, or the risk of errors in consolidated calculations at Group level).
16.7.6 Strategic risks
The Sava Insurance Group and Sava Re are exposed to various internal and external strategic risks that may have a negative impact on income or capital adequacy. Strategic risks are by nature very diverse, difficult to quantify and heavily dependent on various (including external) factors.
At Group and individual company level, strategic risks are qualitatively assessed in the risk register by assessing the frequency and potential financial severity of each event. In addition, the EU-based (re)insurance companies seek to assess key strategic risks through qualitative analysis of various scenarios. Combining the two types of analysis provides a picture of the status and changing exposure to these risks.
The key strategic risks of the Sava Insurance Group in 2023, ranked according to their rating in the risk register (from highest to lowest), are set out below. Risks that increased in 2023 are marked as such:
•the risk of deteriorating macroeconomic conditions or changes in capital markets affecting the Group’s profitability or causing the investment portfolio to underperform,
•the risk that the Group will fall behind the market in terms of digitalisation and innovation (increased risk),
•the risk of increased competition in the markets in which the Group has a presence,
•the risk of changes in legal and regulatory practices and the resulting impact on the Group’s operations,
•the risk that IT support is not adequate in terms of content, funding or priorities to enable the Group to achieve its strategic objectives.
In 2023, the risk of a deterioration in macroeconomic conditions and the resulting impact on the Group’s profitability was still high. The macroeconomic situation was more favourable in 2023, but the geopolitical situation remained uncertain (escalating tensions between Russia and NATO, the outbreak of war between Israel and Hamas). These conflicts pose a major risk of humanitarian crises and disruptions to trade and the flow of raw materials. Energy and climate change continued to dominate talks between countries. In 2023, we saw increased government borrowing and credit rating downgrades, as well as an increase in cyberattacks. The situation is expected to remain uncertain. The Group has already taken the necessary measures to mitigate the impact of these risks and will continue to monitor the situation and take appropriate action.
In 2023, the project for the transition to the new accounting standards IFRS 17 and IFRS 9 was completed at the Group level, and an information security strategy was adopted to establish a high level of cyber resilience for the Sava Insurance Group. The Group will continue to monitor legislative changes to limit regulatory risk, as well as competition in the markets in which it operates and factors affecting the performance of its individual companies.
299
The key strategic risks of the Company in 2023, ranked according to their rating in the risk register (from highest to lowest), are set out below. Risks that increased in 2023 are marked as such:
•the risk of deteriorating macroeconomic and geopolitical conditions, which may make it more difficult to underwrite reinsurance or to achieve the projected returns on the investment portfolio,
•the risk of negative changes in legislation related to the underwriting of reinsurance business,
•the risk related to changes in legal and regulatory practices and the resulting impact on the Company’s operations or insurance underwriting,
•the risk of making the wrong decision on new strategic investments (increased by uncertain macroeconomic conditions).
Similar to the level of the Sava Insurance Group, the assessment of the risks associated with the deterioration of the macroeconomic situation at Sava Re remained at a high level. The high risk ratings have been maintained due to the ongoing uncertain geopolitical situation, notably the war in Ukraine, tensions between Russia and the West, and the outbreak of war between Israel and Hamas. The significant natural catastrophes that occurred during the summer months (such as storms, floods and wildfires), combined with other loss events, also had an impact on reinsurance rates, putting pressure on retention levels and making it more difficult to obtain adequate reinsurance protection. We also expect these risks to remain high in the coming year. Sava Re will endeavour to ensure that the amounts of cover and premiums in reinsurance contracts adequately reflect the effects of claims inflation and loss experience, and that the Company obtains the best possible retrocession cover under the circumstances.
The Group companies mitigate individual strategic risks primarily through preventive measures, and each has various processes in place to ensure that it can properly identify, measure, monitor, manage, control and report strategic risks to ensure that they are effectively managed. In addition to the relevant organisational units in the Group companies, strategic risks are identified and managed by governance bodies, risk management committees, risk management functions and the key function holders of the risk management system. The identification of the Group’s strategic risks is also the responsibility of the Group’s risk management committee. Strategic risks are also managed by continually monitoring the achievement of the Group companies’ short- and long-term goals and by monitoring regulatory changes in the pipeline and market developments.
The Group recognises that reputation is important to the achievement of its business goals and long-term strategic plans. To this end, its companies have put in place procedures to mitigate reputational risk, such as the establishment of fit and proper procedures applicable to employees in key positions, the systematic operation of a compliance monitoring function, business continuity planning, stress and scenario testing, and contingency and response planning in the event of a risk materialising. Operational indicators, which also indirectly measure reputational risk, have been monitored at the level of all Group companies since 2023. Toward ensuring the Group’s good reputation, each and every employee is responsible for improving the quality of services delivered and overall customer satisfaction.
The Group estimates that its exposure to strategic risks was moderate in 2023, at the same level as in 2022.
16.7.6.1 Emerging risks
To ensure successful long-term business operations, it is extremely important for the Sava Insurance Group and Sava Re to anticipate and identify new risks. Both try to keep abreast of trends, technological developments and events that may shape future risk development. As their occurrence is difficult to predict with certainty, information is sought from external sources and an attempt is
300
made to identify those that could have a significant impact on the business in future periods. In 2023, a survey was conducted in all Group companies to assess emerging risks and, based on the responses, a weighted risk assessment was prepared at Group level. The assessors in each Group company rated the risks in terms of materiality for the strategic period (up to 2027) and for the longer term (beyond 2027).
At the level of the Sava Insurance Group and Sava Re, the highest assessed risks up to 2027 were the macroeconomic risk, the physical climate risk (extreme weather conditions) and the financial stability risk. However, these risks were also highlighted as important beyond 2027 at the level of Sava Re. At Group level, in addition to the risk of climate change, the risk of a major cyberattack and the risk related to artificial intelligence were highlighted as the main risks beyond 2027. The Group and the Company will consider the risks in terms of their potential impact on the business and analyse the possible responses and actions to be taken.
16.7.6.2 Sustainability risk and climate change risk
Climate change risks
The Group monitors both physical and transition risks related to climate change risk.
Physical risks, in the form of increased exposure to natural catastrophes and weather-related losses, are most evident in the insurers’ business models. In terms of natural catastrophes, the year 2023 was much more turbulent for the Sava Insurance Group than the previous year, as Slovenia was hit by the most extensive floods in its history.
Investments in sustainable development and preventive activities (renewables, awareness-raising among policyholders) will continue to be factors that will have a significant impact on the scope and scale of losses due to natural catastrophes.
The Group companies are exposed to transition risk associated with the shift to more sustainable business operations, and the Group manages this risk by regularly monitoring changes in sustainability legislation and adapting its business accordingly, including by offering more sustainable products and by actively learning about new customer needs. The Group has implemented its guidelines for responsible underwriting of environmental, social, and governance risks in non-life insurance, which guide the Group companies in the underwriting of risks and Sava Re in the reinsurance of facultative risks. At the Group level, the Sustainable Investment Policy of Sava Insurance Group was updated this year, which, among other things, defines the activities in which the Sava Insurance Company will no longer invest (industries identified as non-sustainable). In this way, the Group manages the risks associated with the transition to sustainable business on the investment side.
Climate change risks are included in the risk register and periodically assessed against other risks. They are linked to the basic risk categories they affect (market, insurance, credit, strategic and operational risks). The main climate risks for the Sava Insurance Group are:
•the risk of an increase in the frequency and/or severity of extreme weather events and natural catastrophes due to climate change (physical risk – non-life underwriting risk),
•the risk of reduced availability and the risk of excessive prices of reinsurance/retrocession due to increased frequency, severity and interconnectedness of natural catastrophes (physical risk – strategic risk),
•the risk of loss of income/premiums and poor portfolio diversification due to (re)insurance underwriting restrictions (physical risk – strategic risk),
•the risk of non-life underwriting strategy and/or rules not taking account of climate change impacts (transition risk – strategic risk).
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Climate change risks are also assessed periodically in Sava Re. The key climate risks are:
•the risk of claims increasing due to a higher frequency and concentration of extreme weather events and natural catastrophes (heat waves, landslides, floods, wildfires, storms, hail) (physical risk – non-life underwriting risk),
•the risk of reduced availability and unaffordable retrocession prices due to increased frequency, severity and interconnectedness of natural catastrophes (physical risk – strategic risk),
•the risk of an increase in the cost of capital due to an increase in the frequency and severity of extreme weather events (physical risk – liquidity risk).
The Group and the Company recognise the importance of the impact of climate change on long-term business performance, and therefore they have included a qualitative and quantitative assessment of climate change risks in the ORSA. The qualitative assessment covers the likelihood and severity of these risks over the long term. The materiality of physical and transition risk exposures was analysed as the basis for the quantitative scenarios in the investment and non-life insurance portfolios, where qualitative analysis indicated that the Group and the Company could experience the greatest impact from climate change.
Taking into account the exposure analysis, three scenarios were constructed, one in the investment portfolio and two in the insurance portfolio. The investment portfolio was tested for the potential adverse impact of the transition to a carbon-free society. Non-life insurance business can be significantly affected by the physical effects of climate change, so the impact of an increase in the frequency and severity of natural catastrophes was tested in the short and long term, focusing on floods (as analyses show that Slovenia is most exposed to this risk in the long term) and hailstorms (indicating that more of these types of events can be expected and that they will be more severe). The short-term scenario also included a European flood scenario, whereas the long-term scenario took into account the increased severity of natural catastrophes due to the effects of climate change, in addition to the increased frequency. The scenarios were based on the investment and insurance portfolios in the 2024 business plan.
The robustness of the solvency position of the Group and Sava Re means that both the Group and Sava Re will remain solvent even if such scenarios materialise. But it is essential to monitor developments and assess the implications of both transition and physical risks to enable timely responses and measures. To this end, the ORSA also identifies actions for the future, including improving preparedness and appropriate technology for responding to and handling claims in the event of an increase in the frequency of natural catastrophes, monitoring the impact and making timely adjustments to premium rates and policy conditions, reducing the concentration of risks in certain areas where necessary, improving modelling capabilities and analysing the effects of climate change, participating in industry and scientific initiatives, and raising public awareness of potential risks and promoting preventive measures among policyholders.
Other sustainability risks
In addition to climate change, the Group and Sava Re also monitor other sustainability risks. These are included in the risk register and periodically assessed against other risks. The key sustainability risks of the Company and the Group in 2023, ranked according to their rating in the risk register (from highest to lowest), are set out below:
•the risk of sustainability-related changes in legislation and their impact on business operations,
•reputational risk (including the risk of being accused of greenwashing, which has increased due to the uncertainty over the definition of green advertising itself; in 2023, the Group prepared for the first time a sustainability-related disclosure (Statement of Main Adverse Impacts) in its annual report, in line with the requirements of the SFDR; therefore, there is a potential for inadequate or insufficient reporting),
302
•the risk of opportunity losses for Group companies due to compliance with the restrictions imposed by sustainability policies and other regulations,
•the risk of higher costs due to adapting policies or operations to be environmentally friendly (in line with SFDR, CSRD and other regulations),
•the risk of inadequate or untimely implementation on and reporting in line with sustainability-related legislation.
The Group and the Company estimate that some of the above risks will increase over the strategy period, mainly due to the increased scope and complexity of the new sustainability legislation.
In addition to the above, the Group and the Company monitor other risks that have been assessed as low:
•the risk of social and/or financial inequality between the sexes in the Group,
•the risk of inconsistency or inadequacy of internal rules and policies regarding the Principles of Responsible Investment (PRI),
•the risk of a non-existent or inadequate whistleblowing protocol, and
•the risk of changes in sustainability legislation affecting the operations of Group companies and the underwriting of reinsurance business.
In 2023, the Group and the Company included three new sustainability risks in their regular assessment:
•the risk of failing to meet strategic goals,
•the risk of failing to identify new opportunities for sustainable development, and
•the risk of not recognising changes in the environment (with stakeholders) due to the implementation of new legislation and strategies.
Individual companies also monitor other risks relevant to their particular business.
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16.8 Notes to the financial statements
16.8.1 Intangible assets
Movement in cost and accumulated amortisation / impairment losses of intangible assets
Sava Insurance Group
EUR
Software
Goodwill
Other intangible assets
Intangible assets in progress
Total
Cost
31 December 2022
19,008,519
40,877,792
35,013,365
13,315,699
108,215,375
Additions
729,733
-
1,969,375
1,988,754
4,687,862
Transfer to use
11,177,792
-
-
-11,177,792
0
Disposals
-333,078
-
-727,347
-17,243
-1,077,668
Reductions – subsidiaries – disposal
2,961
-
-
-
2,961
Exchange differences
-2,845
-
-4,697
-280
-7,822
31 December 2023
30,583,082
40,877,792
36,250,696
4,109,138
111,820,708
Accumulated amortisation and impairment losses
31 December 2022
12,977,943
8,444,979
20,897,161
-
42,320,083
Additions
3,527,113
-
1,107,129
-
4,634,242
Disposals
-282,264
-
-
-
-282,264
Reductions – subsidiaries – disposal
2,996
-
-
-
2,996
Exchange differences
-2,166
-
-1,014
-
-3,180
31 December 2023
16,223,622
8,444,979
22,003,276
0
46,671,877
Carrying amount as at 31 December 2022
6,030,576
32,432,813
14,116,204
13,315,699
65,895,292
Carrying amount as at 31 December 2023
14,359,460
32,432,813
14,247,420
4,109,138
65,148,831
Sava Insurance Group
EUR
Software
Goodwill
Other intangible assets
Intangible assets in progress
Total
Cost
31 December 2021
17,087,942
40,877,792
34,524,529
9,915,405
102,405,668
Additions
907,178
-
500,930
4,521,930
5,930,038
Transfer to use
1,121,623
-
-
-1,121,623
0
Disposals
-107,235
-
-1,502
-
-108,737
Exchange differences
-989
-
-10,592
-13
-11,594
31 December 2022
19,008,519
40,877,792
35,013,365
13,315,699
108,215,375
Accumulated amortisation and impairment losses
31 December 2021
11,583,410
8,444,979
19,767,402
-
39,795,791
Additions
1,502,273
-
1,131,250
-
2,633,523
Disposals
-106,067
-
-
-
-106,067
Exchange differences
-1,673
-
-1,491
-
-3,164
31 December 2022
12,977,943
8,444,979
20,897,161
-
42,320,083
Carrying amount as at 31 December 2021
5,504,532
32,432,813
14,757,127
9,915,405
62,609,877
Carrying amount as at 31 December 2022
6,030,576
32,432,812
14,116,204
13,315,699
65,895,292
304
Sava Re
EUR
Software
Other intangible assets
Intangible assets in progress
Total
Cost
31 December 2022
3,017,251
41,911
2,803,082
5,862,244
Additions
53,569
10,059
910,072
973,700
Transfer to use
867,459
-
-867,459
0
Disposals
-
-6,623
-
-6,623
31 December 2023
3,938,279
45,347
2,845,695
6,829,321
Accumulated amortisation and impairment losses
31 December 2022
1,793,860
-
-
1,793,860
Additions
360,526
-
-
360,526
31 December 2023
2,154,386
0
0
2,154,386
Carrying amount as at 31 December 2022
1,223,391
41,911
2,803,082
4,068,384
Carrying amount as at 31 December 2023
1,783,893
45,347
2,845,695
4,674,935
Sava Re
EUR
Software
Other intangible assets
Intangible assets in progress
Total
Cost
31 December 2021
2,569,361
34,715
2,141,491
4,745,568
Additions
40,777
8,698
1,068,704
1,118,179
Transfer to use
407,113
-
-407,113
0
Disposals
-
-1,502
-
-1,502
31 December 2022
3,017,251
41,911
2,803,082
5,862,245
Accumulated amortisation and impairment losses
31 December 2021
1,551,538
-
-
1,551,538
Additions
242,323
-
-
242,323
31 December 2022
1,793,861
0
0
1,793,861
Carrying amount as at 31 December 2021
1,017,824
34,715
2,141,491
3,194,031
Carrying amount as at 31 December 2022
1,223,391
41,911
2,803,082
4,068,384
The Group’s other intangible assets consist mainly of the assessed value of a customer list of EUR 8,135,290 (2022: EUR 8,537,034) and contractual customer relationships of EUR 3,520,000 (2022: EUR 4,160,000).
Assets in progress relate to new IT solutions acquired, in particular to prepare for the implementation of the new accounting standards IFRS 17 and IFRS 9, and to support the core business of Zavarovalnica Sava and Sava Re. The majority of these IT solutions were put into operation in 2023.
Movement in goodwill
Movement in goodwill in 2023
Sava Insurance Group
EUR
Total amount carried forward as at 31 December 2022
32,432,813
Balance as at 31 December 2023
32,432,813
Sava Neživotno Osiguranje (SRB)
4,565,229
Sava Osiguranje (MNE)
3,648,534
Zavarovalnica Sava
4,761,733
Sava Agent
2,718
TBS Team 24
2,787,676
Sava Penzisko Društvo
1,666,838
Sava Infond
15,000,085
305
Movement in goodwill in 2022
Sava Insurance Group
EUR
Total amount carried forward as at 31 December 2021
32,432,813
Balance as at 31 December 2022
32,432,813
Sava Neživotno Osiguranje (SRB)
4,565,229
Sava Osiguranje (MNE)
3,648,534
Zavarovalnica Sava
4,761,733
Sava Agent
2,718
TBS Team 24
2,787,676
Sava Penzisko Društvo
1,666,838
Sava Infond
15,000,085
Goodwill impairment testing
In the impairment testing of goodwill arising out of the acquired companies listed in the table at the beginning of this section (except for Zavarovalnica Sava), the recoverable amount of each cash-generating unit as at 31 December 2023 exceeded the carrying amount including goodwill belonging to the unit for all companies. The assumptions used to calculate the recoverable amount are described below. For Zavarovalnica Sava, where the estimated value exceeded the carrying amount by a very large margin, an impairment test was performed to determine whether there were any indications of impairment. As no indications were found, no valuation was necessary.
The cash flows are derived from the strategic plans of the companies constituting the cash-generating units. The companies’ plans have been approved by the parent company and adopted by the companies’ governing bodies. The supervisory board of Sava Re d.d. adopted the business plan of the Sava Insurance Group for 2024 on 13 December 2023. The business plans of the Group companies were prepared on the basis of the following key strategic directions:
•premium growth in relation to past performance, expected GDP growth and the level of development of the insurance sector in Slovenia and abroad,
•growth in assets under management of the pension and mutual fund management company in relation to the macroeconomic environment, demographic trends, projected trends in inflows and outflows, and returns in relation to expected developments in the financial markets,
•growth in assistance services revenue in relation to the macroeconomic environment, the market conditions and the expected demand for assistance services,
•improved cost effectiveness in all companies,
•a target combined ratio in line with the specifics of the Slovenian and non-Slovenian non-life segments,
•a target new business margin for life insurance, and
•a return on investments in relation to the expected developments in financial markets.
The valuations used a long-term growth rate (g) of the risk-free rate of return (2.3%) to estimate the residual value beyond the projection period.
The discount rate methodology is explained in section 16.4.7 “Goodwill”
Assumptions used in goodwill impairment testing in 2023
Sava Neživotno Osiguranje (SRB)
Sava Osiguranje (MNE)
Sava Penzisko
(MKD)
Sava Infond
(SVN)
TBS Team 24
(SVN)
Discount rate (%)
12.2
13.2
11.9
10.8
10.2
Long-term growth rate (%)
2.3
2.3
2.3
2.3
2.3
306
16.8.2 Property, plant and equipment
Movement in cost and accumulated depreciation / impairment losses of property, plant and equipment assets
Sava Insurance Group
EUR
Land
Buildings
Equipment
Other items of property, plant and equipment
In progress
Total
Cost
31 December 2022
5,216,520
63,859,517
27,035,610
521,439
57,768
96,690,854
Additions – acquisition of subsidiary
-
-
4,530
-
-
4,530
Additions
-
993,277
1,156,387
94,224
2,647,495
4,891,383
Reclassification
-
100,000
-
-
-
100,000
Transfer to use
-
200,038
2,196,210
7,791
-2,404,039
0
Disposals
-271,157
-4,695,392
-3,778,635
-84,504
-
-8,829,688
Exchange differences
-
-1,538
-1,735
-105
1
-3,377
31 December 2023
4,945,363
60,455,902
26,612,367
538,845
301,225
92,853,702
Accumulated depreciation and impairment losses
31 December 2022
-
14,956,675
19,106,449
192,104
-
34,255,228
Additions
-
1,725,218
3,069,783
43,250
-
4,838,251
Reclassification
-
29,224
-
-
-
29,224
Disposals
-
-2,386,950
-3,477,805
-88,920
-
-5,953,675
Exchange differences
-
-921
-1,201
-2
-
-2,124
31 December 2023
-
14,323,246
18,697,226
146,432
-
33,166,904
Carrying amount as at 31 December 2022
5,216,520
48,902,842
7,929,161
329,335
57,768
62,435,626
Carrying amount as at 31 December 2023
4,945,363
46,132,656
7,915,141
392,413
301,225
59,686,798
Sava Insurance Group
EUR
Land
Buildings
Equipment
Other items of property, plant and equipment
In progress
Total
Cost
31 December 2021
5,577,582
56,065,061
25,704,208
589,920
9,460,483
97,397,254
Additions
-
106,390
1,316,012
213,018
13,217,555
14,852,975
Reclassification
-112,267
-8,195,699
-442,409
-15,945
-
-8,766,320
Transfer to use
433,464
19,171,538
3,015,267
-
-22,620,269
0
Disposals
-676,883
-3,289,830
-2,558,369
-265,669
-
-6,790,751
Reductions – subsidiaries – disposal
-5,376
-
-
-
-
-5,376
Exchange differences
-
2,057
901
115
-1
3,072
31 December 2022
5,216,520
63,859,517
27,035,610
521,439
57,768
96,690,854
Accumulated depreciation and impairment losses
31 December 2021
-
22,099,361
18,779,073
186,264
-
41,064,698
Additions
-
1,010,884
3,054,865
34,560
-
4,100,309
Reclassification
-
-7,537,181
-495,875
-16,081
-
-8,049,137
Disposals
-
-616,422
-2,232,056
-12,641
-
-2,861,119
Exchange differences
-
33
442
2
-
477
31 December 2022
0
14,956,675
19,106,449
192,104
-
34,255,228
Carrying amount as at 31 December 2021
5,577,582
33,965,700
6,925,135
403,656
9,460,483
56,332,556
Carrying amount as at 31 December 2022
5,216,520
48,902,842
7,929,161
329,335
57,768
62,435,626
307
Sava Re
EUR
Land
Buildings
Equipment
Other items of property, plant and equipment
In progress
Total
Cost
31 December 2022
151,373
2,449,707
1,538,295
274,193
-
4,413,567
Additions
-
0
424,457
-
-
424,457
Disposals
-
0
-207,382
-
-
-207,382
31 December 2023
151,373
2,449,707
1,755,371
274,193
0
4,630,643
Accumulated depreciation and impairment losses
31 December 2022
-
823,917
992,621
43,084
-
1,859,622
Additions
-
33,311
194,674
10,287
-
238,273
Disposals
-
0
-142,410
-
-
-142,410
31 December 2023
0
857,228
1,044,885
53,371
0
1,955,484
Carrying amount as at 31 December 2022
151,373
1,625,790
545,674
231,109
0
2,553,945
Carrying amount as at 31 December 2023
151,373
1,592,478
710,486
220,822
0
2,675,158
Sava Re
EUR
Land
Buildings
Equipment
Other items of property, plant and equipment
In progress
Total
Cost
31 December 2021
151,373
2,417,757
1,492,149
314,359
10,554
4,386,192
Additions
-
-
366,711
207,242
31,880
605,833
Reclassification
-
31,950
1,360
-
-
33,310
Transfer to use
-
-
42,434
-
-42,434
0
Disposals
-
-
-364,359
-247,408
-
-611,768
31 December 2022
151,373
2,449,707
1,538,295
274,193
0
4,413,567
Accumulated depreciation and impairment losses
31 December 2021
-
787,359
1,086,070
48,551
-
1,921,980
Additions
-
33,150
185,554
7,174
-
225,878
Reclassification
-
3,408
1,128
-
-
4,536
Disposals
-
0
-280,131
-12,641
-
-292,772
31 December 2022
0
823,917
992,621
43,084
0
1,859,622
Carrying amount as at 31 December 2021
151,373
1,630,398
406,079
265,808
10,554
2,464,212
Carrying amount as at 31 December 2022
151,373
1,625,790
545,674
231,109
0
2,553,945
Property, plant and equipment assets are unencumbered by third-party rights.
16.8.3 Right-of-use assets and liabilities
Movement in cost and accumulated amortisation / impairment losses of right-of-use assets
Sava Insurance Group
EUR
Land and buildings
Motor vehicles
Computers and IT equipment
Total
As at 31 December 2022
7,035,677
328,038
61,961
7,425,676
Depreciation of right-of-use assets
-1,610,826
-82,046
-23,163
-1,716,035
Change in right of use
2,232,598
649,726
-
2,882,324
New contracts
654,028
84,640
-
738,668
Derecognition of right-of-use assets
-524,464
-232,771
-
-757,235
As at 31 December 2023
7,787,013
747,587
38,798
8,573,398
308
Sava Insurance Group
EUR
Land and buildings
Motor vehicles
Computers and IT equipment
Total
As at 31 December 2021
6,967,008
405,669
12,139
7,384,816
Depreciation of right-of-use assets
-1,901,647
-204,825
-19,221
-2,125,693
Change in right of use
369,421
79,545
-
448,966
New contracts
2,115,345
197,997
69,043
2,382,385
Derecognition of right-of-use assets
-514,450
-150,348
-
-664,798
As at 31 December 2022
7,035,677
328,038
61,961
7,425,676
Sava Re
EUR
Land and buildings
Total
As at 31 December 2022
320,124
320,124
Depreciation of right-of-use assets
-82,608
-82,608
Change in right of use
20,501
20,501
New contracts
19,141
19,141
Derecognition of right-of-use assets
-
-
As at 31 December 2023
277,158
277,158
Sava Re
EUR
Land and buildings
Total
As at 31 December 2021
204,879
204,879
Depreciation of right-of-use assets
-74,135
-74,135
Change in right of use
193,899
193,899
Derecognition of right-of-use assets
-4,519
-4,519
As at 31 December 2022
320,124
320,124
The amounts recognised in the income statement related to leases are shown in the table below.
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Depreciation/amortisation
1,716,035
2,125,693
82,608
74,135
Land and buildings
1,610,826
1,901,647
82,608
74,135
Motor vehicles
82,046
204,825
-
-
Computers and IT equipment
23,163
19,221
-
-
Interest on lease liabilities
239,055
150,489
7,318
1,985
Costs associated with short-term leases
209,629
194,057
-
-
Costs associated with low value leases
44,138
45,119
-
-
Total
2,208,857
2,515,358
89,926
76,120
Cash flow from leases
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Cash flow from leases
2,579,753
2,265,303
87,084
78,444
Movement in short- and long-term lease liabilities 136
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Lease liability – maturity up to 1 year
2,493,988
2,541,330
87,347
78,425
Lease liability – maturity over 1 year
6,350,749
5,115,859
193,017
242,063
Total
8,844,737
7,657,189
280,364
320,488
136 The disclosure also includes long-term liabilities under finance lease contracts.
309
Sava Insurance Group
Sava Re
EUR
Short-term
Long-term
Short-term
Long-term
31 December 2022
2,541,330
5,115,859
78,425
242,063
New leases
-
3,528,246
-
39,642
Repayments
-
-2,579,753
-
-87,084
Interest attribution
-
239,055
-
7,318
Transfer to current liabilities
-47,342
47,342
8,922
-8,922
31 December 2023
2,493,988
6,350,749
87,347
193,017
Sava Insurance Group
Sava Re
EUR
Short-term
Long-term
Short-term
Long-term
31 December 2021
2,672,117
4,984,539
74,982
128,746
New leases
-
2,376,921
-
193,218
Repayments
-
-2,265,303
-
-78,444
Interest attribution
-
150,489
-
1985
Transfer to current liabilities
-130,787
-130,787
3,443
-3,443
31 December 2022
2,541,330
5,115,859
78,425
242,063
Lease terms range from 1 to 10 years for land and buildings (one contract for up to 24 years), 1 to 6 years for cars and 6 years for hardware and IT equipment. For leases with an indefinite term, the Group has set the lease term at 5 years.
Group companies also act as lessors. The majority of these leases relate to land and buildings as disclosed in note 16.8.5 “Investment property”.
16.8.4 Deferred tax assets and liabilities
Sava Insurance Group
EUR
Offset value as at 31 December 2022
Included in income statement
Included in other comprehensive income
Other
Exchange differences
Offset value as at 31 December 2023
Deferred tax assets
Deferred tax liabilities
Insurance contracts
-13,611,691
-139,380
3,544,920
0
134
-10,206,017
461,803
-10,667,820
Reinsurance contracts
-535,725
-
777,881
0
-5
242,151
469,735
-227,584
Financial investments
19,449,192
-306,284
-7,282,489
1,242,466
471
13,103,356
17,905,300
-4,801,944
Short-term operating receivables
275,515
382,962
-
-
-
658,477
658,477
-
Provisions for jubilee benefits and severance pay
(retirement)
524,352
19,008
-26,777
-4,931
29
511,681
760,918
-249,237
Provision for tax losses
1,963,749
-1,662,098
9,013
-358,314
-
-47,650
750
-48,400
Deferred tax liabilities due to transition to the new standards
-10,859,627
-130,553
15,205
9,859,690
1,096
-1,114,189
68,954
-1,183,143
Total
-2,794,235
-1,836,345
-2,962,247
10,738,911
1,725
3,147,809
20,325,937
-17,178,128
310
Sava Insurance Group
EUR
Offset value as at 31 December 2021
Included in income statement
Included in other comprehensiv e income
Other
Exchange differences
Offset value as at 31 December 2022
Deferred tax assets
Deferred tax liabilities
Insurance contracts
6,979,667
-
-20,591,643
-
285
-13,611,691
42,541
-13,654,232
Reinsurance contracts
-3,037,462
-
2,501,738
-
-1
-535,725
330,892
-866,617
Financial investments
-9,836,697
150,188
29,105,184
8,251
1,635
19,449,192
24,649,815
-5,200,623
Short-term operating receivables
275,515
-
-
-
-
275,515
275,515
-
Provisions for jubilee benefits and severance pay (retirement)
814,037
-128,140
-161,325
-231
11
524,352
555,828
-31,476
Provision for tax losses
2,505,994
-542,245
-
-
-
1,963,749
2,003,136
-39,387
Deferred tax liabilities due to transition to the new standards
-15,091,022
-1,321,463
-
5,553,117
-259
-10,859,627
657,440
-11,517,067
Total
-17,389,968
-1,841,660
10,874,585
5,561,137
1,671
-2,794,235
28,515,167
-31,309,402
Sava Re
EUR
Offset value as at 31 December 2022
Included in income statement
Included in other comprehensive income
Other
Offset value as at 31 December 2023
Deferred tax assets
Deferred tax liabilities
Insurance contracts
-1,685,669
0
1,096,411
-
-589,258
112,237
-701,496
Reinsurance contracts
270,415
0
-148,746
-
121,669
125,792
-4,123
Financial investments
5,148,067
30,796
-1,444,764
1,100,681
4,834,780
4,965,493
-130,712
Short-term operating receivables
275,515
382,962
-
-
658,477
658,477
-
Provisions for jubilee benefits and severance pay (retirement)
53,332
9,045
-624
-
61,753
66,327
-4,575
Provision for tax losses
1,644,072
-1,644,072
-
-
-
-
-
Deferred tax liabilities due to transition to the new standards
-2,673,481
0
-
2,673,481
-
-
-
Total
3,032,251
-1,221,269
-497,723
3,774,162
5,087,421
5,928,327
-840,907
Sava Re
EUR
Netted value as at 31 December 2021
Included in income statement
Included in other comprehensive income
Offset value as at 31 December 2022
Deferred tax assets
Deferred tax liabilities
Insurance contracts
1,433,097
-
-3,118,766
-1,685,669
-
-1,685,669
Reinsurance contracts
-587,509
-
857,924
270,415
270,415
-
Financial investments
838,809
-490,034
4,799,292
5,148,067
6,381,266
-1,233,199
Short-term operating receivables
275,515
0
-
275,515
275,515
-
Provisions for jubilee benefits and severance pay (retirement)
53,777
-446
-
53,332
57,283
-3,951
Provision for tax losses
2,111,130
-467,058
-
1,644,072
1,644,072
-
Deferred tax liabilities due to transition to the new standards
-1,414,696
-1,258,785
-
-2,673,481
-
-2,673,481
Total
2,710,123
-2,216,322
2,538,450
3,032,251
8,628,550
-5,596,300
In 2023, deferred tax assets and liabilities were accounted for using tax rates that the management believes will be used to tax the differences. Tax has been accounted for at the statutory rates applicable to each Group company. The tax rate applicable to most Group companies (Slovenia) is 19%, valid until 31 December 2023. Deferred tax assets and liabilities are restated at the new rate of 22% effective from 1 January 2024 (2022: 19%), and 9%–18% for other companies (Croatia 18%, Serbia 15%, Kosovo and North Macedonia 10%, Montenegro – a progressive scale of 9%–15% applies). The following table shows the restatement to the new tax rate for the Slovenia-based companies.
311
EUR
Slovenia-based companies of the Sava Insurance Group
Sava Re
Restatement at new tax rate (22%)
Restatement at new tax rate (22%)
Included in income statement
Included in other comprehensive income
Included in income statement
Included in other comprehensive income
Insurance contracts
-
-1,301,630
-
-80,354
Reinsurance contracts
-
28,897
-
16,591
Financial investments
242,001
-147,789
212,012
446,270
Short-term operating receivables
89,792
-
89,792
-
Provisions for jubilee benefits and severance pay (retirement)
99,271
26,023
9,045
-624
16.8.5 Investment property
Movement in cost and accumulated depreciation of investment property
Sava Insurance Group
EUR
Land
Buildings
Equipment
In progress
Total
Cost
31 December 2022
2,649,470
21,866,752
538,765
-
25,054,987
Additions
-
2,425,330
-
193,322
2,618,652
Transfer to use
-
177,278
16,044
-193,322
0
Disposals
-28,650
-
-
-
-28,650
Exchange differences
40
-6,351
-
-
-6,311
31 December 2023
2,620,860
24,463,009
554,809
0
27,638,678
Accumulated depreciation and impairment losses
31 December 2022
28,610
2,138,903
91,715
-
2,259,228
Additions
-
426,567
91,832
-
518,399
Disposals
-28,650
0
0
-
-28,650
Exchange differences
40
-618
1
-
-577
31 December 2023
0
2,564,852
183,548
0
2,748,400
Carrying amount as at 31 December 2022
2,620,860
19,727,849
447,050
0
22,795,759
Carrying amount as at 31 December 2023
2,620,860
21,898,157
371,261
0
24,890,278
Sava Insurance Group
EUR
Land
Buildings
Equipment
In progress
Total
Cost
31 December 2021
2,158,279
13,920,291
186,075
-
16,264,645
Additions
-
-
-
9,135,430
9,135,430
Reclassification
-
14,285
-15,459
-
-1,174
Transfer to use
756,622
8,006,050
372,758
-9,135,430
0
Disposals
-266,147
-76,841
-4,593
-
-347,581
Exchange differences
716
2,967
-16
-
3,667
31 December 2022
2,649,470
21,866,752
538,765
0
25,054,987
Accumulated depreciation and impairment losses
31 December 2021
28,640
1,863,547
91,858
-
1,984,045
Additions
-
319,549
19,768
-
339,317
Reclassification
-
-34,069
-15,331
-
-49,400
Disposals
-
-10,711
-4,580
-
-15,291
Exchange differences
-30
587
-
-
557
31 December 2022
28,610
2,138,903
91,715
0
2,259,228
Carrying amount as at 31 December 2021
2,129,639
12,056,744
94,217
0
14,280,600
Carrying amount as at 31 December 2022
2,620,860
19,727,848
447,050
0
22,795,759
312
Sava Re
EUR
Land
Buildings
Equipment
Total
Cost
31 December 2022
1,497,711
7,026,356
82,446
8,606,513
Additions
-
10,045
-
10,045
31 December 2023
1,497,711
7,036,401
82,446
8,616,558
Accumulated depreciation and impairment losses
31 December 2022
-
858,194
26,626
884,820
Additions
-
141,642
7,928
149,570
31 December 2023
0
999,836
34,554
1,034,390
Carrying amount as at 31 December 2022
1,497,711
6,168,162
55,820
7,721,693
Carrying amount as at 31 December 2023
1,497,711
6,036,565
47,892
7,582,168
Sava Re
EUR
Land
Buildings
Equipment
Total
Cost
31 December 2021
1,497,711
7,058,306
83,822
8,639,839
Reclassification
-
-31,950
-1,376
-33,326
31 December 2022
1,497,711
7,026,356
82,446
8,606,513
Accumulated depreciation and impairment losses
31 December 2021
-
720,320
19,825
740,145
Additions
-
141,282
7,929
149,211
Reclassification
-
-3,408
-1,128
-4,536
31 December 2022
0
858,194
26,626
884,820
Carrying amount as at 31 December 2021
1,497,711
6,337,985
63,997
7,899,693
Carrying amount as at 31 December 2022
1,497,711
6,168,162
55,820
7,721,693
The Group generated income of EUR 1,444,937 million from the lease of its investment property in 2023 (2022: EUR 1,368,236). Maintenance costs associated with investment property are either included in the rent or charged to the lessee. Costs covered by the Group in 2023 totalled EUR 110,340 (2022: EUR 202,919). We estimate that the Group will continue to lease its investment property in 2024 and over the next five-year period in a similar scope as in 2023 and generate a similar amount of lease income.
In 2023, the Group generated income of EUR 867,573 by leasing out its investment property (2022: EUR 829,030). Maintenance costs associated with investment property are either included in rent or charged to the lessees in a proportionate amount.
The investment properties are unencumbered by any third-party rights.
The fair values of investment property are presented in note 16.8.34 “Fair values of assets and liabilities”.
16.8.6 Investments in subsidiaries and associates
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Investments in subsidiaries
0
0
305,666,793
303,360,793
Investments in associates
23,834,620
21,856,109
19,575,000
19,575,000
Total
23,834,620
21,856,109
325,241,793
322,935,793
313
Investments in subsidiaries
Sava Re
EUR
31 December 2022
Acquisition/
31 December 2023
recapitalisation
Holding
Value
Value
Holding
Value
Zavarovalnica Sava
100.00%
123,364,958
0
100.00%
123,364,958
Sava Neživotno Osiguranje (SRB)
100.00%
16,143,299
0
100.00%
16,143,299
Illyria
100.00%
9,563,104
0
100.00%
9,563,104
Sava Osiguruvanje (MKD)
93.89%
8,905,868
0
93.89%
8,905,868
Sava Osiguranje (MNE)
100.00%
15,373,019
0
100.00%
15,373,019
Illyria Life
100.00%
4,035,893
0
100.00%
4,035,893
Sava Životno Osiguranje (SRB)
100.00%
5,142,278
0
100.00%
5,142,278
Sava Pokojninska
100.00%
6,417,800
0
100.00%
6,417,800
TBS Team 24
78.50%
3,326,504
0
78.50%
3,326,504
Sava Penzisko Društvo
100.00%
19,714,494
0
100.00%
19,714,494
Sava Infond
85.00%
24,583,778
0
85.00%
24,583,778
Vita
100.00%
66,789,797
0
100.00%
66,789,797
ASP (SRB)
100.00%
0
1,250,000
100.00%
1,250,000
Vita S Holding (MKD)
80.00%
0
1,056,000
80.00%
1,056,000
Total
303,360,793
2,306,002
305,666,793
Sava Re
EUR
31 December 2021
Impairments
Disposal/decrease
31 December 2022
(-)
(-)
Holding
Value
Value
Value
Holding
Value
Zavarovalnica Sava
100.00%
123,364,958
0
0
100.00%
123,364,958
Sava Neživotno Osiguranje (SRB)
100.00%
16,143,299
0
0
100.00%
16,143,299
Illyria
100.00%
9,563,104
0
0
100.00%
9,563,104
Sava Osiguruvanje (MKD)
93.86%
10,094,070
-1,188,202
0
93.89%
8,905,868
Sava Osiguranje (MNE)
100.00%
15,373,019
0
0
100.00%
15,373,019
Illyria Life
100.00%
4,035,893
0
0
100.00%
4,035,893
Sava Životno Osiguranje (SRB)
100.00%
5,142,278
0
0
100.00%
5,142,278
S Estate
100.00%
5,996
0
-5,996
100.00%
0
Sava Pokojninska
100.00%
6,417,800
0
0
100.00%
6,417,800
TBS Team 24
78.50%
3,326,504
0
0
78.50%
3,326,504
Sava Penzisko Društvo
100.00%
19,714,494
0
0
100.00%
19,714,494
Sava Infond
85.00%
24,583,778
0
0
85.00%
24,583,778
Vita
100.00%
66,789,797
0
0
100.00%
66,789,797
Total
304,554,991
-1,188,202
-5,996
303,360,793
Investments in associates
Sava Insurance Group
EUR
31 December 2022
Attributed profit or loss
31 December 2023
Holding
Value
Holding
Value
Share of voting rights (%)
DCB
50.00%
21,856,109
1,978,512
50.00%
23,834,621
50.00%
Total
21,856,109
1,978,512
23,834,620
Sava Insurance Group
EUR
31 December 2021
Attributed profit or loss
31 December 2022
Holding
Value
Holding
Value
Share of voting rights (%)
DCB
50.00%
20,479,729
1,376,380
50.00%
21,856,109
50.00%
G2I
17.50%
0
-90,649
17.50%
0
25.00%
Total
20,479,729
1,285,731
21,856,109
314
Sava Re
EUR
31 December 2022
31 December 2023
Holding
Value
Holding
Value
Share of voting rights (%)
DCB
50.00%
19,575,000
50.00%
19,575,000
50.00%
Total
19,575,000
19,575,000
Sava Re
EUR
31 December 2021
31 December 2022
Holding
Value
Holding
Value
Share of voting rights (%)
DCB
50.00%
19,575,000
50.00%
19,575,000
50.00%
G2I
17.50%
0
17.50%
0
25.00%
Total
19,575,000
19,575,000
Sava Insurance Group
EUR
31 December 2023
31 December 2022
DCB
Value of assets
53,009,611
46,338,747
Liabilities
20,190,187
17,455,813
Equity
32,819,424
28,882,934
Income
30,401,886
30,423,226
Profit or loss
3,957,023
2,752,760
Part of the profit or loss attributable to the Group
1,978,512
1,376,380
G2I
Value of assets
1,250,937
Liabilities
1,127,753
Equity
123,184
Income
3,373,482
Profit or loss
-517,993
Part of the profit or loss attributable to the Group
-90,649
In 2023, the Sava Insurance Group sold its associate G2I. It realised a gain on the sale of EUR 112,595.
The assumptions used in the valuation are described in more detail in 16.4.13 “Investments in subsidiaries and associates”.
315
16.8.7 Financial investments
The financial investments of the Sava Insurance Group amounting to EUR 2,012.5 million as at 31 December 2023 (31 December 2022: EUR 1,776.1 million) include, in addition to investments supporting non-life and traditional life insurance liabilities, investments supporting unit-linked life insurance liabilities and own funds.
Sava Insurance Group
EUR
Measured at amortised cost
Measured at fair value through profit or loss
Measured at fair value through other comprehensive income
Total
31 December 2023
Debt instruments
76,303,166
19,701,111
1,260,177,155
1,356,181,432
Deposits and CDs
25,616,171
-
-
25,616,171
Government bonds
37,676,521
2,105,477
811,741,040
851,523,038
Corporate bonds
12,256,335
17,595,634
448,436,115
478,288,084
Loans granted
754,139
-
-
754,139
Equity instruments
0
569,153,261
15,969,890
585,123,151
Shares
-
5,784,383
15,969,890
21,754,273
Mutual funds
-
563,368,878
-
563,368,878
Investments in infrastructure funds
-
57,339,858
-
57,339,858
Investments in real-estate funds
-
13,888,192
-
13,888,192
Total
76,303,166
660,082,422
1,276,147,045
2,012,532,633
Sava Insurance Group
EUR
Measured at amortised cost
Measured at fair value through profit or loss
Measured at fair value through other comprehensive income
Total
31 December 2022
Debt instruments
64,428,280
20,729,025
1,140,474,230
1,225,631,535
Deposits and CDs
18,848,261
-
-
18,848,261
Government bonds
32,143,970
253,420
729,392,990
761,790,380
Corporate bonds
12,241,228
20,475,605
411,081,240
443,798,073
Loans granted
1,194,821
-
-
1,194,821
Equity instruments
0
465,219,427
14,927,677
480,147,104
Shares
-
9,956,247
14,927,677
24,883,924
Mutual funds
-
455,263,180
-
455,263,180
Investments in infrastructure funds
-
53,856,375
-
53,856,375
Investments in real-estate funds
-
16,497,061
-
16,497,061
Total
64,428,280
556,301,888
1,155,401,907
1,776,132,075
316
Sava Re
EUR
Measured at amortised cost
Measured at fair value through profit or loss
Measured at fair value through other comprehensive income
Total
31 December 2023
Debt instruments
5,811,776
4,320,636
311,285,620
321,418,032
Deposits and CDs
1,021,347
-
-
1,021,347
Government bonds
2,075,525
-
227,516,295
229,591,819
Corporate bonds
-
4,320,636
83,769,325
88,089,961
Loans granted
2,714,904
-
-
2,714,904
Equity instruments
0
7,997,287
0
7,997,287
Shares
-
3,538,972
-
3,538,972
Mutual funds
-
4,458,315
-
4,458,315
Investments in infrastructure funds
-
21,084,448
-
21,084,448
Investments in real-estate funds
-
3,884,428
-
3,884,428
Total
5,811,776
37,286,800
311,285,620
354,384,196
Sava Re
EUR
Measured at amortised cost
Measured at fair value through profit or loss
Measured at fair value through other comprehensive income
Total
31 December 2022
Debt instruments
3,871,964
5,276,003
280,840,335
289,988,303
Deposits and CDs
-
-
-
0
Government bonds
2,075,272
-
212,123,409
214,198,680
Corporate bonds
-
5,276,003
68,716,927
73,992,930
Loans granted
1,796,693
-
-
1,796,693
Equity instruments
0
11,014,588
0
11,014,588
Shares
-
7,080,606
-
7,080,606
Mutual funds
-
3,933,982
-
3,933,982
Investments in infrastructure funds
-
18,843,871
-
18,843,871
Investments in real-estate funds
-
4,584,214
-
4,584,214
Total
3,871,964
39,718,676
280,840,335
324,430,976
The Sava Insurance Group held 1.6% of financial investments constituting subordinated instruments for the issuer (31 December 2022: 1.9%). The total value of these investments was EUR 31.1 million (31 December 2022: EUR 33.4 million).
Sava Re held 1.2% of financial investments that constitute subordinated instruments for the issuer (31 December 2022: 1.6%). The total value of these investments was EUR 4.3 million (31 December 2022: EUR 5.3 million).
The Group measures its investments in subordinated debt instruments through profit or loss or through accumulated other comprehensive income.
Equity instruments classified as FVOCI
EUR
31 December 2023
31 December 2022
1 January 2022
AENA S.M.E. SA
640,811
458,057
542,014
AMGEN INC.
591,418
558,719
450,377
AUTOROUTES DU SUD DE LA FRANCE
0
0
737,055
BAE SYSTEMS PLC
0
0
576,638
Bouygues
323,867
266,156
298,903
BP P.L.C.
0
0
276,076
CISCO SYSTEMS, INC.
499,028
487,522
610,273
DANONE
512,981
430,369
477,226
317
EUR
31 December 2023
31 December 2022
1 January 2022
Deutsche Telekom AG
1,050,525
900,215
787,290
Enbridge Inc.
0
0
249,080
ENGIE
0
0
639,378
ESSILORLUXOTTICA
668,288
622,656
689,043
Fortum Oyj
381,430
453,861
788,270
Fresenius SE & Co. KGaA
374,229
349,965
471,953
GALP ENERGIA, SGPS, S.A.
649,485
613,943
414,813
GlaxoSmithKline PLC
344,824
334,937
494,461
Haleon PLC
95,605
95,338
0
Iberdrola SA
430,311
396,234
377,383
INTERNATIONAL BUSINESS MACHINES CORPORATION
0
0
458,388
Johnson & Johnson
417,170
487,088
443,901
KELLANOVA
508,756
671,590
571,504
WK Kellogg Co
29,883
0
0
Koninklijke Ahold Delhaize N.V.
774,024
798,571
896,607
KRKA, tovarna zdravil, d.d., Novo mesto
759,880
635,536
815,144
LEGAL & GENERAL GROUP PLC
394,846
384,421
484,390
LVMH MOET HENNESSY LOUIS VUITTON
0
0
738,632
Naturgy Energy Group SA
870,804
784,046
923,375
Neste Oyj
0
0
294,978
OMV Aktiengesellschaft
276,004
333,814
346,653
Österreichische Post AG
709,067
637,510
819,655
PFIZER INC.
303,246
559,143
911,904
PPL Corp
0
0
523,835
RECKITT BENCKISER GROUP PLC
364,223
378,873
441,288
RECORDATI INDUSTRIA CHIMICA E FARMACEUTICA S.P.A. IN BREVE RECORDATI S.P.A.
460,711
365,606
533,078
Siemens Aktiengesellschaft
608,823
464,500
547,052
TELENOR ASA
316,580
265,892
424,253
TELIA COMPANY AB
226,088
233,717
336,983
Veolia Environement, Paris
706,146
593,400
797,629
WW Grainger Inc
894,685
622,170
545,492
Zurich Insurance Group AG
786,153
743,829
639,836
Total
15,969,890
14,927,677
21,374,809
Due to the spin-off process of the company Kellanova (formerly Kellogg Company), the Group recorded an investment in WK Kellogg Co in 2023. This transaction did not result in any additional cost to the Group. In 2023, the Group did not dispose of any equity instruments measured at FVOCI.
Due to the spin-off process of the company GlaxoSmithKline PLC, the Group recorded an investment in Haleon PLC in 2022. This transaction did not result in any additional cost to the Company. In 2022, the Group disposed of equity instruments with a total fair value of EUR 5,011,460 and realised a net gain on disposal of EUR 988,811 EUR. The gain was transferred from accumulated other comprehensive income to retained earnings. The disposals were made to mitigate the increased risk in the financial markets due to the start of the war in Ukraine.
Amounts recognised in profit or loss and other comprehensive income
EUR
2023
2022
Dividends from equity investments held at FVOCI recognised in the income statement item other income
556,769
558,722
– Related to investments derecognised during the reporting period
0
55,272
– Related to investments held at the end of the reporting period
556,769
503,450
318
Movement in financial investments
Sava Insurance Group
EUR
FVOCI
AC
FVTPL
Total
Opening balance as at 1 January 2023
1,155,401,907
64,428,280
556,301,888
1,776,132,075
New acquisitions
330,815,055
29,287,786
114,620,739
474,723,581
Maturity
-233,057,388
-17,167,481
-2,750,000
-252,974,869
Interest inflows
-17,089,575
-2,196,521
-817,975
-20,104,070
Disposal
-26,257,105
-345,705
-66,132,897
-92,735,707
Change in fair value – in equity
52,182,266
0
0
52,182,266
Change in fair value – in equity (ECL)
-397,551
0
0
-397,551
Change in fair value – from equity to IS – disposals
-821,328
0
0
-821,328
Change in fair value through profit or loss
87,110
0
58,343,186
58,430,296
Change in amortised cost, exchange differences
14,910,432
2,362,126
518,389
17,790,948
Change in ECL through profit or loss
397,053
-53,287
0
343,766
Exchange differences (opening balance)
-23,831
-12,032
-908
-36,772
Opening balance as at 31 December 2023
1,276,147,045
76,303,166
660,082,422
2,012,532,633
Sava Insurance Group
EUR
FVOCI
AC
FVTPL
Total
Opening balance as at 1 January 2022
1,322,371,668
62,376,074
602,276,651
1,987,024,393
New acquisitions
234,283,388
24,021,164
108,985,305
367,289,857
Transfer between asset classes
-6,431,384
5,831,331
0
-600,053
Maturity
-182,917,666
-25,197,518
-1,221,985
-209,337,169
Interest inflows
-17,981,541
-1,885,445
-1,047,308
-20,914,294
Disposal
-49,043,768
-3,954
-80,976,599
-130,024,321
Change in fair value – in equity
-160,709,425
0
0
-160,709,425
Change in fair value – in equity (ECL)
-374,458
0
0
-374,458
Change in fair value – from equity to IS – disposals
556,947
0
85
557,032
Change in fair value through profit or loss
0
0
-72,045,780
-72,045,780
Change in amortised cost, exchange differences
15,246,024
-661,426
333,268
14,917,865
Change in ECL through profit or loss
382,386
-47,784
0
334,602
Exchange differences (opening balance)
19,736
-4,163
-1,748
13,825
Opening balance as at 31 December 2022
1,155,401,907
64,428,280
556,301,888
1,776,132,075
Sava Re
EUR
FVOCI
AC
FVTPL
Total
Opening balance as at 1 January 2023
280,840,335
3,871,964
39,718,676
324,430,976
New acquisitions
116,005,237
2,300,000
2,567,159
120,872,396
Maturity
-74,806,557
-409,349
-1,250,000
-76,465,906
Interest inflows
-3,528,659
-211,984
-275,258
-4,015,901
Disposal
-18,046,171
0
-4,519,826
-22,565,997
Change in fair value – in equity
10,013,555
0
0
10,013,555
Change in fair value – in equity (ECL)
-60,746
0
0
-60,746
Change in fair value – from equity to IS – disposals
-120,448
0
0
-120,448
Change in fair value through profit or loss
0
0
1,211,782
1,211,782
Change in amortised cost, exchange differences
928,825
266,968
-165,733
1,030,060
Change in ECL through profit or loss
60,250
-5,824
0
54,426
Opening balance as at 31 December 2023
311,285,620
5,811,776
37,286,800
354,384,196
319
Sava Re
EUR
FVOCI
AC
FVTPL
Total
Opening balance as at 1 January 2022
271,786,710
5,323,531
42,514,795
319,625,037
New acquisitions
99,226,328
1,000,000
3,659,075
103,885,404
Maturity
-44,745,137
-2,459,349
0
-47,204,486
Interest inflows
-3,128,881
-266,495
-293,134
-3,688,510
Disposal
-21,265,449
0
-3,606,403
-24,871,852
Change in fair value – in equity
-25,260,034
0
0
-25,260,034
Change in fair value – in equity (ECL)
608
0
0
608
Change in fair value – from equity to IS – disposals
197,687
0
0
197,687
Change in fair value through profit or loss
0
0
-3,103,084
-3,103,084
Change in amortised cost, exchange differences
4,029,276
252,442
547,427
4,829,145
Change in ECL through profit or loss
-774
21,835
0
21,061
Opening balance as at 31 December 2022
280,840,335
3,871,964
39,718,676
324,430,976
Loans of the parent granted to Group companies
EUR
31 December 2023
31 December 2022
Sava Osiguruvanje, Skopje (MKD)
1,311,052
0
Sava Pokojninska (SVN)
1,030,575
1,030,575
Total
2,341,627
1,030,575
The Group companies have pledged securities of EUR 0.6 million (31 December 2022: EUR 0.7 million).
The fair values of financial investments are shown in note 16.8.34.
16.8.8 Investment contract assets and liabilities
Investment contract assets and liabilities relate to the management of pension funds at the subsidiary Sava Pokojninska. The Group held EUR 180.6 million (2022: 166.4 million) of investment contract assets and EUR 180.4 million (2022: EUR 166.2 million) of investment contract liabilities. Its investment contracts include a group of lifecycle funds called MOJI Skladi Življenjskega Cikla (MY lifecycle funds), which relate to the supplementary pension business of the Sava Pokojninska in the accumulation phase. The risks associated with investment contract liabilities are discussed in detail in section 16.4.14 “Financial investments”.
320
Investment contract assets
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Financial investments
173,199,975
149,105,965
Investment property
593,000
593,000
Receivables
38,152
1,863,355
Cash and cash equivalents
6,797,572
14,815,315
Internal relation
-561
-3,516
Total
180,628,137
166,374,119
Sava Insurance Group
EUR
Measured at amortised cost
Measured at fair
value through
profit or loss
Total
31 December 2023
Debt instruments
94,321,242
37,710,007
132,031,249
Government bonds
50,169,820
18,376,896
68,546,716
Corporate bonds
44,151,422
19,333,110
63,484,532
Equity instruments
0
35,973,949
35,973,949
Investments in infrastructure funds
0
1,914,064
1,914,064
Investments in real-estate funds
0
3,280,713
3,280,713
Total financial investments
94,321,242
78,878,733
173,199,975
Cash, cash equivalents and receivables
6,797,572
0
6,797,572
Investment property
0
593,000
593,000
Receivables
37,590
0
37,590
Total investment contract assets
101,156,405
79,471,733
180,628,137
Sava Insurance Group
EUR
Measured at amortised cost
Measured at fair
value through
profit or loss
Total
31 December 2022
Debt instruments
83,197,007
33,412,414
116,609,421
Government bonds
41,027,854
6,561,439
47,589,293
Corporate bonds
42,169,153
26,850,976
69,020,129
Equity instruments
0
26,634,985
26,634,985
Investments in infrastructure funds
0
1,992,155
1,992,155
Investments in real-estate funds
0
3,869,404
3,869,404
Total financial investments
83,197,007
65,908,958
149,105,965
Cash, cash equivalents and receivables
14,815,315
0
14,815,315
Investment property
0
593,000
593,000
Receivables
1,859,839
0
1,859,839
Total investment contract assets
99,872,161
66,501,958
166,374,119
321
Investment contract assets by level of the fair value hierarchy
Sava Insurance Group
EUR
Carrying amount
Fair value
Difference between FV and CA
31 December 2023
Level 1
Level 2
Level 3
Total fair value
Investment contract assets measured at fair value
79,471,733
70,072,510
3,611,446
5,787,777
79,471,733
0
At FVTPL
79,471,733
70,072,510
3,611,446
5,787,777
79,471,733
0
Mandatorily measured at fair value through profit or loss, not held for trading
79,471,733
70,072,510
3,611,446
5,787,777
79,471,733
0
Debt instruments
37,710,007
34,098,561
3,611,446
0
37,710,007
0
Equity instruments
35,973,949
35,973,949
0
0
35,973,949
0
Investments in infrastructure funds
1,914,064
0
0
1,914,064
1,914,064
0
Investments in real-estate funds
3,280,713
0
0
3,280,713
3,280,713
0
Investment property
593,000
0
0
593,000
593,000
0
Investment contract assets not measured at fair value
101,156,405
86,463,519
6,049,579
6,835,162
99,348,260
-1,808,144
Investments measured at amortised cost
101,156,405
86,463,519
6,049,579
6,835,162
99,348,260
-1,808,144
Debt instruments
94,321,242
86,463,519
6,049,579
0
92,513,098
-1,808,144
Cash and cash equivalents
6,797,572
0
0
6,797,572
6,797,572
0
Receivables
37,590
0
0
37,590
37,590
0
Total investment contract assets
180,628,137
156,536,030
9,661,024
12,622,939
178,819,993
-1,808,144
Sava Insurance Group
EUR
Carrying amount
Fair value
Difference between FV and CA
31 December 2022
Level 1
Level 2
Level 3
Total fair value
Investment contract assets measured at fair value
66,501,958
55,824,819
4,222,580
6,454,559
66,501,958
0
FVTPL
66,501,958
55,824,819
4,222,580
6,454,559
66,501,958
0
Mandatorily measured at fair value through profit or loss, not held for trading
66,501,958
55,824,819
4,222,580
6,454,559
66,501,958
0
Debt instruments
33,412,414
29,189,834
4,222,580
0
33,412,414
0
Equity instruments
26,634,985
26,634,985
0
0
26,634,985
0
Investments in infrastructure funds
1,992,155
0
0
1,992,155
1,992,155
0
Investments in real-estate funds
3,869,404
0
0
3,869,404
3,869,404
0
Investment property
593,000
0
0
593,000
593,000
0
Investment contract assets not measured at fair value
99,872,161
72,269,907
4,047,226
16,675,154
92,992,287
-6,879,874
Investments measured at amortised cost
99,872,161
72,269,907
4,047,226
16,675,154
92,992,287
-6,879,874
Debt instruments
83,197,007
72,269,907
4,047,226
0
76,317,133
-6,879,874
Cash and cash equivalents
14,815,315
0
0
14,815,315
14,815,315
0
Receivables
1,859,839
0
0
1,859,839
1,859,839
0
Total investment contract assets
166,374,119
128,094,726
8,269,806
23,129,713
159,494,245
-6,879,874
The fair value of investment property as at 31 December 2023 stood at EUR 593,000 (2022: EUR 593,000).
322
Investment contract liabilities
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Net liabilities to pension policyholders
179,443,359
165,831,325
Other liabilities
1,185,340
546,309
TOTAL IN BALANCE SHEET – LONG-TERM BUSINESS FUNDS OF VOLUNTARY PENSION INSURANCE
180,628,699
166,377,635
Inter-company transactions between company and life insurance liability fund
-191,004
-180,272
TOTAL IN BALANCE SHEET
180,437,695
166,197,363
Movement in financial investments
Sava Insurance Group
EUR
Debt instruments
Equity instruments
Investments in infrastructure funds
Investments in real-estate funds
Total
Balance as at 1 January 2023
116,609,421
26,634,985
1,992,155
3,869,404
149,105,965
New acquisitions
26,951,166
7,343,516
83,739
0
34,378,421
Maturity
-12,250,000
0
0
0
-12,250,000
Disposal
-962,459
-2,562,553
-196,095
0
-3,721,107
Coupon payments
-2,615,309
0
0
0
-2,615,309
Accrued interest
3,129,844
0
0
0
3,129,844
Revaluation (through profit or loss)
1,496,341
4,769,727
34,733
-588,691
5,712,110
Income/expenses upon sale
-299,503
-5,801
-468
0
-305,772
Recognition/reversal of ECL allowance
17,205
0
0
0
17,205
Exchange differences
-45,457
-205,925
0
0
-251,382
Balance as at 31 December 2023
132,031,249
35,973,949
1,914,064
3,280,713
173,199,975
Sava Insurance Group
EUR
Debt instruments
Equity instruments
Investments in infrastructure funds
Investments in real-estate funds
Total
Balance as at 1 January 2022
117,099,239
25,571,612
666,260
2,699,832
142,670,851
New acquisitions
51,899,001
7,824,866
1,286,841
1,000,000
59,723,867
Maturity
-9,731,947
0
0
0
-9,731,947
Disposal
-35,696,093
-2,796,788
0
0
-38,492,881
Coupon payments
-2,522,534
0
0
0
-2,522,534
Accrued interest
2,590,651
0
0
0
2,590,651
Revaluation (through profit or loss)
-7,363,436
-4,253,434
39,054
169,571
-11,616,870
Income/expenses upon sale
106,591
-4,248
0
0
102,343
Recognition/reversal of ECL allowance
-17,924
0
0
0
-17,924
Exchange differences
245,873
292,977
0
0
538,850
Balance as at 31 December 2022
116,609,421
26,634,985
1,992,155
3,869,404
149,105,965
323
Movement in investments, and income and expenses relating to investment contract assets measured at fair value – level 3
Sava Insurance Group
EUR
Debt instruments
Investments in infrastructure funds
Investments in real-estate funds
Investment property
31 December 2023
31 December 2022
31 December 2023
31 December 2022
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Opening balance
0
795,498
1,992,155
666,260
3,869,404
2,699,832
593,000
506,000
Additions
0
4,502
83,739
1,344,536
0
1,058,238
0
0
Disposals
0
0
-196,563
0
0
0
0
0
Maturity
0
-800,000
0
0
0
0
0
0
Revaluation to fair value
0
0
34,733
-18,641
-588,691
111,334
0
87,000
Reclassification s into levels
0
0
0
0
0
0
0
0
Closing balance
0
0
1,914,064
1,992,155
3,280,713
3,869,404
593,000
593,000
Income
0
0
126,668
103,335
73,749
227,809
227,809
0
Expenses
0
0
-468
-6,587
-588,691
0
0
0
The pension company eliminates inter-company transactions of the joint balance sheet; therefore, liabilities to pension policyholders exceed investment contract liabilities. Internal transactions between the group of My-Life-cycle long-term business funds and the pension company were eliminated in the balance sheet. These include entry charges and management fees for the current month, which may be recognised upon conversion or when credited to personal accounts.
Liabilities in the balance sheet of the long-term liability fund of the voluntary supplementary pension insurance are mostly long-term. These are liabilities relating to the voluntary supplementary pension life liability fund for premiums paid, guaranteed return and the return in excess of guaranteed return (provisions).
The table below shows income and expenses relating to investment contracts in 2023.
324
Net investment income for the financial period (EUR)
Investment contracts
Finance income
9,405,019
Dividend income
357,517
Interest income
3,138,400
Gains on disposal of financial investments
4,062
Gains on change in fair value
5,729,316
Other finance income
175,722
Income from investment property
58,981
Rental income
58,981
Gains on change in fair value
0
Financial expenses
-521,234
Losses on disposals
-309,833
Losses from fair value changes
0
Other finance expenses
-211,401
Expenses relating to investment property
-6,633
Expenses arising from management and renting
-6,633
Expenses relating to management of life insurance business fund
-1,890,768
Asset management commission
-1,718,330
Expenses relating to custodian bank
-29,212
Audit-related expenses
-25,144
Expenses relating to communication with life insurance business fund members
-38,387
Brokerage expenses for purchase and sale of securities
-3,652
Other expenses charged against the life ins. liability fund under applicable rules
-76,044
Transfer of cash from supplementary pension scheme
0
Net claims incurred
0
Change in mathematical provision
0
Expenses factored in policies
0
Net profit/loss attributable to policyholders
7,045,364
Profit or loss realised from investment contract assets is fully recognised in investment contract liabilities.
16.8.9(Re)insurance contract assets and liabilities
Sava Insurance Group
31 December 2023
31 December 2022
EUR
NON-LIFE
LIFE
TOTAL
NON-LIFE
LIFE
TOTAL
Insurance contract assets
-8,669,139
-938,149
-9,607,288
-7,041,725
-96,615
-7,138,340
Reinsurance contract assets
-107,239,429
-242,131
-107,481,560
-67,933,085
-200,557
-68,133,642
Insurance contract liabilities
691,376,675
959,645,572
1,651,022,247
630,152,889
854,162,269
1,484,315,158
Reinsurance contract liabilities
1,484,470
157,573
1,642,043
896,359
155,255
1,051,614
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Insurance and reinsurance contract assets
Insurance and reinsurance contract liabilities
Net (re)insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-8,180,369
172,238,904
164,058,535
Insurance contracts measured using the PAA
-488,770
519,137,770
518,649,000
Total insurance contracts
-8,669,139
691,376,674
682,707,535
Reinsurance contracts not measured using the PAA
-101,443,611
542,115
-100,901,496
Reinsurance contracts measured using the PAA
-5,795,817
942,355
-4,853,462
Total reinsurance contracts
-107,239,428
1,484,470
-105,754,958
325
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Insurance and reinsurance contract assets
Insurance and reinsurance contract liabilities
Net (re)insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-6,794,128
176,533,741
169,739,613
Insurance contracts measured using the PAA
-247,598
453,619,153
453,371,555
Total insurance contracts
-7,041,726
630,152,894
623,111,168
Reinsurance contracts not measured using the PAA
-64,683,059
381,053
-64,302,006
Reinsurance contracts measured using the PAA
-3,250,028
515,306
-2,734,722
Total reinsurance contracts
-67,933,087
896,359
-67,036,728
Sava Insurance Group as at 31 December 2023 – life
EUR
Insurance and reinsurance contract assets
Insurance and reinsurance contract liabilities
Net (re)insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-938,150
959,645,573
958,707,423
Total insurance contracts
-938,150
959,645,573
958,707,423
Reinsurance contracts not measured using the PAA
-242,131
157,573
-84,558
Total reinsurance contracts
-242,131
157,573
-84,558
Sava Insurance Group as at 31 December 2022 – life
EUR
Insurance and reinsurance contract assets
Insurance and reinsurance contract liabilities
Net (re)insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-96,616
854,162,269
854,065,653
Total insurance contracts
-96,616
854,162,269
854,065,653
Reinsurance contracts not measured using the PAA
-200,558
155,256
-45,302
Total reinsurance contracts
-200,558
155,256
-45,302
Sava Re as at 31 December 2023
EUR
Insurance and reinsurance contract assets
Insurance and reinsurance contract liabilities
Net (re)insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-5,081,479
256,344,343
251,262,865
Insurance contracts measured using the PAA
-13,866
39,408,380
39,394,514
Total insurance contracts
-5,095,344
295,752,723
290,657,379
Reinsurance contracts not measured using the PAA
-95,762,621
446,848
-95,315,773
Total reinsurance contracts
-95,762,621
446,848
-95,315,773
Sava Re as at 31 December 2022
EUR
Insurance contract assets
Insurance contract liabilities
Net insurance contract assets/liabilities
Insurance contracts not measured using the PAA
-3,055,560
256,661,771
253,606,211
Insurance contracts measured using the PAA
-16,071
15,752,280
15,736,209
Total insurance contracts
-3,071,631
272,414,051
269,342,420
Reinsurance contracts not measured using the PAA
-61,224,914
320,044
-60,904,871
Total reinsurance contracts
-61,224,914
320,044
-60,904,871
326
16.8.10 Movement in liabilities for remaining coverage (LRC) and liabilities for incurred claims (LIC) – insurance contracts issued
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total LIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-10,900,401
58,500
-10,841,901
3,916,518
-116,342
-
3,800,176
-7,041,725
Liabilities
84,621,519
8,103,257
92,724,776
202,662,508
295,095,593
39,670,013
537,428,114
630,152,890
Opening balance – net assets/liabilities
73,721,118
8,161,757
81,882,875
206,579,026
294,979,251
39,670,013
541,228,290
623,111,165
Changes in the statement of profit or loss and other comprehensive income
0
Insurance contract revenue, of which
-630,737,528
0
-630,737,528
0
0
0
0
-630,737,528
Contracts under the fair value approach
-1,245,399
-
-1,245,399
-
-
-
0
-1,245,399
Other contracts
-629,492,129
-
-629,492,129
-
-
-
0
-629,492,129
Insurance service expenses
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-7,831,867
-7,831,867
107,915,043
471,354,715
15,504,532
594,774,290
586,942,423
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-27,639,687
-31,465,007
-18,406,018
-77,510,712
-77,510,712
Incurred claims
0
-7,831,867
-7,831,867
80,275,356
439,889,708
-2,901,486
517,263,578
509,431,711
Amortisation of insurance acquisition cash flows
91,307,797
-
91,307,797
-
-
-
0
91,307,797
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
10,343,192
10,343,192
-
-
-
0
10,343,192
Insurance service operating expenses
91,307,797
10,343,192
101,650,989
0
0
0
0
101,650,989
Total insurance service expenses
91,307,797
2,511,325
93,819,122
80,275,356
439,889,708
-2,901,486
517,263,578
611,082,700
Investment components excluded from insurance revenue and insurance service expenses
-3,397,537
-
-3,397,537
3,397,536
-
-
3,397,536
-1
Insurance service result
-542,827,268
2,511,325
-540,315,943
83,672,892
439,889,708
-2,901,486
520,661,114
-19,654,829
Net finance income or expenses from insurance contracts
-675,189
53,401
-621,788
8,395,539
11,589,813
1,396,140
21,381,492
20,759,704
Effect of movement in exchange rates
2,877,834
-29,765
2,848,069
-9,454,413
15,842
1,804
-9,436,767
-6,588,698
Foreign currency translation differences
15,400
-366
15,034
0
-14,973
-724
-15,697
-663
Total changes in the statement of profit or loss and other comprehensive income
-540,609,223
2,534,595
-538,074,628
82,614,018
451,480,390
-1,504,266
532,590,142
-5,484,486
Cash flows
Premiums received for insurance contracts issued
654,120,672
-
654,120,672
-
-
0
654,120,672
Claims incurred and insurance service expenses paid
-
-
0
-78,866,700
-414,325,539
-
-493,192,239
-493,192,239
Insurance acquisition cash flows
-95,817,422
-
-95,817,422
-
-
0
-95,817,422
Total cash flows
558,303,250
0
558,303,250
-78,866,700
-414,325,539
0
-493,192,239
65,111,011
Other movements
-30,151
-
-30,151
-
-
-
0
-30,151
Assets
-14,482,936
46,591
-14,436,345
5,219,756
482,366
65,084
5,767,206
-8,669,139
Liabilities
105,867,928
10,649,761
116,517,689
205,106,588
331,651,736
38,100,663
574,858,987
691,376,676
Closing balance – net assets/liabilities
91,384,992
10,696,352
102,081,344
210,326,344
332,134,102
38,165,747
580,626,193
682,707,537
327
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total LIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-12,776,466
768
-12,775,698
5,483,709
-149,681
4,425
5,338,453
-7,437,245
Liabilities
87,289,500
5,976,536
93,266,036
206,083,233
299,910,996
38,091,765
544,085,994
637,352,030
Opening balance – net assets/liabilities
74,513,034
5,977,304
80,490,338
211,566,942
299,761,315
38,096,190
549,424,447
629,914,785
Changes in the statement of profit or loss and other comprehensive income
0
Insurance contract revenue, of which
-547,182,811
0
-547,182,811
0
0
0
0
-547,182,811
Contracts under the fair value approach
-619,266
-
-619,266
-
-
-
0
-619,266
Other contracts
-546,563,545
-
-546,563,545
-
-
-
0
-546,563,545
Insurance service expenses
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-8,721,999
-8,721,999
100,097,568
367,061,696
16,220,258
483,379,522
474,657,523
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-33,202,936
-24,193,704
-12,269,399
-69,666,039
-69,666,039
Incurred claims
0
-8,721,999
-8,721,999
66,894,632
342,867,992
3,950,859
413,713,483
404,991,484
Amortisation of insurance acquisition cash flows
80,011,463
-
80,011,463
-
-
-
0
80,011,463
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
10,844,930
10,844,930
-
-
-
0
10,844,930
Insurance service operating expenses
80,011,463
10,844,930
90,856,393
0
0
0
0
90,856,393
Total insurance service expenses
80,011,463
2,122,931
82,134,394
66,894,632
342,867,992
3,950,859
413,713,483
495,847,877
Investment components excluded from insurance revenue and insurance service expenses
-4,194,280
-
-4,194,280
4,194,281
-
-
4,194,281
1
Insurance service result
-471,365,628
2,122,931
-469,242,697
71,088,913
342,867,992
3,950,859
417,907,764
-51,334,933
Net finance income or expenses from insurance contracts
815,237
36,994
852,231
-3,146,293
-21,721,978
-2,388,334
-27,256,605
-26,404,374
Effect of movement in exchange rates
9,231
24,362
33,593
-388,206
97,318
10,772
-280,116
-246,523
Foreign currency translation differences
-27,476
166
-27,310
-1
3,406
526
3,931
-23,379
Total changes in the statement of profit or loss and other comprehensive income
-470,568,636
2,184,453
-468,384,183
67,554,413
321,246,738
1,573,823
390,374,974
-78,009,209
Cash flows
0
0
0
Premiums received for insurance contracts issued
552,130,710
-
552,130,710
-
-
0
552,130,710
Claims incurred and insurance service expenses paid
-
-
0
-72,542,329
-326,028,802
-
-398,571,131
-398,571,131
Insurance acquisition cash flows
-82,386,780
-
-82,386,780
-
-
0
-82,386,780
Total cash flows
469,743,930
0
469,743,930
-72,542,329
-326,028,802
0
-398,571,131
71,172,799
Other movements
32,792
-
32,792
-
-
-
0
32,792
Assets
-10,900,401
58,500
-10,841,901
3,916,518
-116,342
-
3,800,176
-7,041,725
Liabilities
84,621,519
8,103,257
92,724,776
202,662,508
295,095,593
39,670,013
537,428,114
630,152,890
Closing balance – net assets/liabilities
73,721,118
8,161,757
81,882,875
206,579,026
294,979,251
39,670,013
541,228,290
623,111,165
328
Sava Insurance Group as at 31 December 2023 – life
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Total LIC
Excluding loss component
Loss component
Assets
-324,596
17,079
-307,517
210,902
210,902
-96,615
Liabilities
826,454,221
4,298,640
830,752,861
23,409,407
23,409,407
854,162,268
Opening balance – net assets/liabilities
826,129,625
4,315,719
830,445,344
23,620,309
23,620,309
854,065,653
Changes in the statement of profit or loss and other comprehensive income
Insurance contract revenue, of which
-66,825,275
0
-66,825,275
0
0
-66,825,275
Contracts under the modified retrospective approach
-32,967,889
-
-32,967,889
-
0
-32,967,889
Contracts under the fair value approach
-11,028,948
-
-11,028,948
-
0
-11,028,948
Other contracts
-22,828,438
-
-22,828,438
-
0
-22,828,438
Insurance service expenses
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-398,513
-398,513
38,509,225
38,509,225
38,110,712
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-1,599,207
-1,599,207
-1,599,207
Incurred claims
0
-398,513
-398,513
36,910,018
36,910,018
36,511,505
Amortisation of insurance acquisition cash flows
9,557,778
-
9,557,778
-
0
9,557,778
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
-26,471
-26,471
-
0
-26,471
Insurance service operating expenses
9,557,778
-26,471
9,531,307
0
0
9,531,307
Total insurance service expenses
9,557,778
-424,984
9,132,794
36,910,018
36,910,018
46,042,812
Investment components excluded from insurance revenue and insurance service expenses
-110,271,436
-
-110,271,436
110,271,437
110,271,437
1
Insurance service result
-167,538,933
-424,984
-167,963,917
147,181,455
147,181,455
-20,782,462
Net finance income or expenses from insurance contracts
80,593,806
23,844
80,617,650
305,183
305,183
80,922,833
Effect of movement in exchange rates
-6,965
-804
-7,769
-20,437
-20,437
-28,206
Foreign currency translation differences
908
-329
579
-993
-993
-414
Total changes in the statement of profit or loss and other comprehensive income
-86,951,184
-402,273
-87,353,457
147,465,208
147,465,208
60,111,751
Cash flows
Premiums received for insurance contracts issued
194,809,673
-
194,809,673
0
194,809,673
Claims incurred and insurance service expenses paid
-
-
0
-133,937,909
-133,937,909
-133,937,909
Insurance acquisition cash flows
-16,332,938
-
-16,332,938
0
-16,332,938
Total cash flows
178,476,735
0
178,476,735
-133,937,909
-133,937,909
44,538,826
Other movements
11,541,230
-
11,541,230
-11,550,035
-11,550,035
-8,805
Assets
-8,827,605
49,229
-8,778,376
7,840,226
7,840,226
-938,150
Liabilities
938,024,007
3,864,217
941,888,224
17,757,347
17,757,347
959,645,571
Closing balance – net assets/liabilities
929,196,402
3,913,446
933,109,848
25,597,573
25,597,573
958,707,421
329
Sava Insurance Group as at 31 December 2022 – life
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Total LIC
Excluding loss component
Loss component
Assets
-13,293,626
24,000
-13,269,626
6,327,810
6,327,810
-6,941,816
Liabilities
963,671,184
2,232,364
965,903,548
17,847,246
17,847,246
983,750,794
Opening balance – net assets/liabilities
950,377,558
2,256,364
952,633,922
24,175,056
24,175,056
976,808,978
Changes in the statement of profit or loss and other comprehensive income
Insurance contract revenue, of which
-61,804,984
0
-61,804,984
0
0
-61,804,984
Contracts under the modified retrospective approach
-36,876,538
-
-36,876,538
-
0
-36,876,538
Contracts under the fair value approach
-1,627,658
-
-1,627,658
-
0
-1,627,658
Other contracts
-23,300,788
-
-23,300,788
-
0
-23,300,788
Insurance service expenses
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-752,184
-752,184
34,504,072
34,504,072
33,751,888
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-3,623,010
-3,623,010
-3,623,010
Incurred claims
0
-752,184
-752,184
30,881,062
30,881,062
30,128,878
Amortisation of insurance acquisition cash flows
8,734,800
-
8,734,800
-
0
8,734,800
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
2,798,995
2,798,995
-
0
2,798,995
Insurance service operating expenses
8,734,800
2,798,995
11,533,795
0
0
11,533,795
Total insurance service expenses
8,734,800
2,046,811
10,781,611
30,881,062
30,881,062
41,662,673
Investment components excluded from insurance revenue and insurance service expenses
-116,760,299
-
-116,760,299
116,760,294
116,760,294
-5
Insurance service result
-169,830,483
2,046,811
-167,783,672
147,641,356
147,641,356
-20,142,316
Net finance income or expenses from insurance contracts
-132,335,244
12,595
-132,322,649
-425,961
-425,961
-132,748,610
Effect of movement in exchange rates
10,001
-759
9,242
-9,721
-9,721
-479
Foreign currency translation differences
-822,472
708
-821,764
270
270
-821,494
Total changes in the statement of profit or loss and other comprehensive income
-302,978,198
2,059,355
-300,918,843
147,205,944
147,205,944
-153,712,899
Cash flows
0
0
Premiums received for insurance contracts issued
180,750,118
-
180,750,118
0
180,750,118
Claims incurred and insurance service expenses paid
-
-
0
-135,175,500
-135,175,500
-135,175,500
Insurance acquisition cash flows
-14,842,731
-
-14,842,731
0
-14,842,731
Total cash flows
165,907,387
0
165,907,387
-135,175,500
-135,175,500
30,733,887
Other movements
12,822,874
-
12,822,874
-12,874,191
-12,874,191
235,683
Assets
-324,596
17,079
-307,517
210,902
210,902
-96,615
Liabilities
826,454,221
4,298,640
830,752,861
23,409,407
23,409,407
854,162,268
Closing balance – net assets/liabilities
826,129,625
4,315,719
830,445,344
23,620,309
23,620,309
854,065,653
330
Sava Re as at 31 December 2023
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total LIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-6,804,219
2,656
-6,801,563
3,729,932
0
0
3,729,932
-3,071,631
Liabilities
-22,943,613
532,067
-22,411,546
278,014,090
15,324,400
1,487,107
294,825,597
272,414,051
Opening balance – net assets/liabilities
-29,747,832
534,724
-29,213,108
281,744,022
15,324,400
1,487,107
298,555,528
269,342,420
Changes in the statement of profit or loss and other comprehensive income
0
Insurance contract revenue, of which
-167,804,126
0
-167,804,126
0
-167,804,126
Contracts under the modified retrospective approach
-426,267
-426,267
0
-426,267
Contracts under the fair value approach
-344,090
-344,090
0
-344,090
Other contracts
-167,033,770
-167,033,770
0
-167,033,770
Insurance service expenses
0
47,480,784
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-8,129,082
-8,129,082
146,195,647
44,621,041
1,524,219
192,340,907
184,211,825
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-29,353,101
2,859,743
-183,052
-26,676,410
-26,676,410
Incurred claims
0
-8,129,082
-8,129,082
116,842,546
47,480,784
1,341,166
165,664,497
157,535,415
Amortisation of insurance acquisition cash flows
9,071,629
-
9,071,629
-
-
-
0
9,071,629
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
7,883,873
7,883,873
-
-
-
0
7,883,873
Insurance service operating expenses
9,071,629
7,883,873
16,955,503
0
0
0
0
16,955,503
Total insurance service expenses
9,071,629
-245,208
8,826,421
116,842,546
47,480,784
1,341,166
165,664,497
174,490,918
Investment components excluded from insurance revenue and insurance service expenses
-6,427,138
-
-6,427,138
6,418,482
8,656
-
6,427,138
-2
Insurance service result
-165,159,635
-245,208
-165,404,843
123,261,028
47,489,440
1,341,166
172,091,634
6,686,791
Net finance income or expenses from insurance contracts
254,982
48,770
303,752
11,068,670
766,380
63,538
11,898,588
12,202,340
Effect of movement in exchange rates
2,877,226
-29,503
2,847,723
-9,540,392
8,053
1,985
-9,530,353
-6,682,630
Total changes in the statement of profit or loss and other comprehensive income
-162,027,427
-225,941
-162,253,368
124,789,306
48,263,874
1,406,689
174,459,869
12,206,501
Cash flows
0
0
0
Premiums received for insurance contracts issued
162,887,532
-
162,887,532
-
-
-
0
162,887,532
Claims incurred and insurance service expenses paid
-
-
0
-120,063,682
-25,507,274
-
-145,570,956
-145,570,956
Insurance acquisition cash flows
-8,208,119
-
-8,208,119
-
-
-
0
-8,208,119
Total cash flows
154,679,414
0
154,679,414
-120,063,682
-25,507,274
0
-145,570,956
9,108,458
Assets
-9,456,970
17,249
-9,439,721
4,344,377
-
-
4,344,377
-5,095,344
Liabilities
-27,638,875
291,534
-27,347,342
282,125,269
38,081,000
2,893,796
323,100,065
295,752,723
Closing balance – net assets/liabilities
-37,095,845
308,783
-36,787,063
286,469,646
38,081,000
2,893,796
327,444,442
290,657,379
331
Sava Re as at 31 December 2022
EUR
Liability for remaining coverage – LRC
Liability for incurred claims – LIC
Total
Total LRC
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total LIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-8,294,473
768
-8,293,705
5,191,907
35,986
2,375
5,230,268
-3,063,438
Liabilities
-16,334,711
794,881
-15,539,830
290,779,555
14,794,305
1,412,877
306,986,737
291,446,906
Opening balance – net assets/liabilities
-24,629,184
795,649
-23,833,536
295,971,462
14,830,291
1,415,252
312,217,005
288,383,469
Changes in the statement of profit or loss and other comprehensive income
0
Insurance contract revenue, of which
-150,760,734
0
-150,760,734
0
-150,760,734
Contracts under the modified retrospective approach
-15,031,862
-
-15,031,862
0
-15,031,862
Contracts under the fair value approach
-591,401
-
-591,401
0
-591,401
Other contracts
-135,137,471
-
-135,137,471
0
-135,137,471
Insurance service expenses
0
6,053,136
Incurred claims (excluding investment components) and other incurred insurance service expenses
-
-8,898,334
-8,898,334
147,003,163
5,044,928
279,542
152,327,633
143,429,299
Changes related to past services (changes in fulfilment cash flows related to the liability for incurred claims)
-
-
0
-27,761,777
1,008,208
-35,097
-26,788,666
-26,788,666
Incurred claims
0
-8,898,334
-8,898,334
119,241,387
6,053,136
244,445
125,538,968
116,640,633
Amortisation of insurance acquisition cash flows
7,302,382
-
7,302,382
-
-
-
0
7,302,382
Changes related to future services (recognition/reversal of losses on onerous groups of contracts)
-
8,580,314
8,580,314
-
-
-
0
8,580,314
Insurance service operating expenses
7,302,382
8,580,314
15,882,696
0
0
0
0
15,882,696
Total insurance service expenses
7,302,382
-318,020
6,984,361
119,241,387
6,053,136
244,445
125,538,968
132,523,329
Investment components excluded from insurance revenue and insurance service expenses
-7,229,643
-
-7,229,643
7,140,735
88,908
-
7,229,643
-2
Insurance service result
-150,687,996
-318,020
-151,006,016
126,382,122
6,142,045
244,445
132,768,611
-18,237,405
Net finance income or expenses from insurance contracts
-501,340
35,304
-466,036
-8,905,207
-2,190,959
-168,439
-11,264,605
-11,730,640
Effect of movement in exchange rates
11,170
21,791
32,961
-8,684
-17,508
-4,150
-30,342
2,619
Total changes in the statement of profit or loss and other comprehensive income
-151,178,166
-260,925
-151,439,091
117,468,231
3,933,578
71,855
121,473,664
-29,965,427
Cash flows
0
0
0
Premiums received for insurance contracts issued
153,163,416
-
153,163,416
-
-
-
0
153,163,416
Claims incurred and insurance service expenses paid
-
-
0
-131,695,671
-3,439,469
-
-135,135,140
-135,135,140
Insurance acquisition cash flows
-7,103,897
-
-7,103,897
-
-
-
0
-7,103,897
Total cash flows
146,059,518
0
146,059,518
-131,695,671
-3,439,469
0
-135,135,140
10,924,378
Assets
-6,804,219
2,656
-6,801,563
3,729,932
0
0
3,729,932
-3,071,631
Liabilities
-22,943,613
532,067
-22,411,546
278,014,090
15,324,400
1,487,107
294,825,597
272,414,051
Closing balance – net assets/liabilities
-29,747,832
534,724
-29,213,108
281,744,022
15,324,400
1,487,107
298,555,528
269,342,420
332
16.8.11 Movement in assets for remaining coverage (ARC) and assets for incurred claims (AIC) – reinsurance contracts
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Reinsurance contracts measured using the PAA
Total AIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-981,794
-67,934
-1,049,728
-63,755,094
-2,782,668
-345,594
-66,883,356
-67,933,084
Liabilities
2,280,268
-10,105
2,270,163
-245,023
-1,121,196
-7,585
-1,373,804
896,359
Opening balance – net assets/liabilities
1,298,474
-78,039
1,220,435
-64,000,117
-3,903,864
-353,179
-68,257,160
-67,036,725
Changes in the statement of profit or loss and other comprehensive income
Allocation of reinsurers’ shares of premiums
Amounts recoverable from insurance contracts ceded to reinsurers
42,824,596
0
42,824,596
0
0
0
0
42,824,596
Reinsurers’ shares of insurance service expenses
Reinsurers’ share of incurred claims
-
-
0
-82,239,382
-7,141,789
-113,410
-89,494,581
-89,494,581
Reinsurers’ share of operating expenses
-
-
0
-
-
-
0
0
Changes in reinsurers’ share of liability for incurred claims
-
-
0
4,335,519
-787,589
108,257
3,656,187
3,656,187
Changes in reinsurance loss-recovery component relating to onerous underlying contracts
-
-39,497
-39,497
-
-
-
0
-39,497
Total amounts recovered from reinsurers
0
-39,497
-39,497
-77,903,863
-7,929,378
-5,153
-85,838,394
-85,877,891
Reinsurance investment components
7,509,865
-
7,509,865
-2,863,312
-4,646,553
-
-7,509,865
0
Result from reinsurance contracts held
50,334,461
-39,497
50,294,964
-80,767,175
-12,575,931
-5,153
-93,348,259
-43,053,295
Net finance income or expenses from reinsurance contracts
-334,056
-
-334,056
-2,006,286
-182,765
-23,335
-2,212,386
-2,546,442
Finance effects from credit risk
1,255,566
-
1,255,566
306,177
91,023
-
397,200
1,652,766
Effect of movement in exchange rates
2,300
-
2,300
47,996
-
-
47,996
50,296
Foreign currency translation differences
-5,842
148
-5,694
-3
5,549
268
5,814
120
Total changes in the statement of profit or loss and other comprehensive income
51,252,429
-39,349
51,213,080
-82,419,291
-12,662,124
-28,220
-95,109,635
-43,896,555
Cash flows
Premiums received for insurance contracts issued
-47,770,461
-
-47,770,461
-
-
-
0
-47,770,461
Recovered claims and insurance service expenses
-
-
0
42,401,318
10,543,667
-
52,944,985
52,944,985
Total cash flows
-47,770,461
0
-47,770,461
42,401,318
10,543,667
0
52,944,985
5,174,524
Other movements
3,797
-
3,797
-
-
-
0
3,797
Assets
-128,434
-117,386
-245,820
-102,985,870
-3,639,001
-368,737
-106,993,608
-107,239,428
Liabilities
4,912,673
-2
4,912,671
-1,032,220
-2,383,320
-12,662
-3,428,202
1,484,469
Closing balance – net assets/liabilities
4,784,239
-117,388
4,666,851
-104,018,090
-6,022,321
-381,399
-110,421,810
-105,754,959
333
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Reinsurance contracts measured using the PAA
Total AIC
Excluding loss component
Loss component
Present value of future cash flows
Adjustment for non-financial risk
Assets
-1,330,270
-118,836
-1,449,106
-59,010,346
-3,177,539
-541,277
-62,729,162
-64,178,268
Liabilities
2,197,050
-4,027
2,193,023
-186,386
-882,192
-1,226
-1,069,804
1,123,219
Opening balance – net assets/liabilities
866,780
-122,863
743,917
-59,196,732
-4,059,731
-542,503
-63,798,966
-63,055,049
Changes in the statement of profit or loss and other comprehensive income
Allocation of reinsurers’ shares of premiums
Amounts recoverable from insurance contracts ceded to reinsurers
38,433,907
0
38,433,907
0
0
0
0
38,433,907
Reinsurers’ shares of insurance service expenses
Reinsurers’ share of incurred claims
-
-
0
-41,919,763
-2,897,525
-47,554
-44,864,842
-44,864,842
Changes in reinsurers’ share of liability for incurred claims
-
-
0
907,781
531,152
221,315
1,660,248
1,660,248
Changes in reinsurance loss-recovery component relating to onerous underlying contracts
-
44,934
44,934
-
-
-
0
44,934
Total amounts recovered from reinsurers
0
44,934
44,934
-41,011,982
-2,366,373
173,761
-43,204,594
-43,159,660
Reinsurance investment components
2,174,249
-
2,174,249
1,749,215
-3,923,464
-
-2,174,249
0
Result from reinsurance contracts held
40,608,156
44,934
40,653,090
-39,262,767
-6,289,837
173,761
-45,378,843
-4,725,753
Net finance income or expenses from reinsurance contracts
112,870
-
112,870
4,432,886
142,169
15,882
4,590,937
4,703,807
Finance effects from credit risk
360,420
-
360,420
60,717
8,542
-
69,259
429,679
Effect of movement in exchange rates
17,516
-
17,516
-261,418
-
-
-261,418
-243,902
Foreign currency translation differences
27,395
-110
27,285
4
-3,659
-319
-3,974
23,311
Total changes in the statement of profit or loss and other comprehensive income
41,126,357
44,824
41,171,181
-35,030,578
-6,142,785
189,324
-40,984,039
187,142
Cash flows
Premiums received for insurance contracts issued
-40,669,237
-
-40,669,237
-
-
-
0
-40,669,237
Recovered claims and insurance service expenses
-
-
0
30,227,193
6,298,652
-
36,525,845
36,525,845
Total cash flows
-40,669,237
0
-40,669,237
30,227,193
6,298,652
0
36,525,845
-4,143,392
Other movements
-25,426
-
-25,426
-
-
-
-25,426
Assets
-981,794
-67,934
-1,049,728
-63,755,094
-2,782,668
-345,594
-66,883,356
-67,933,084
Liabilities
2,280,268
-10,105
2,270,163
-245,023
-1,121,196
-7,585
-1,373,804
896,359
Closing balance – net assets/liabilities
1,298,474
-78,039
1,220,435
-64,000,117
-3,903,864
-353,179
-68,257,160
-67,036,725
334
Sava Insurance Group as at 31 December 2023 – life
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Total AIC
Excluding loss component
Assets
-200,557
-200,557
-
0
-200,557
Liabilities
183,175
183,175
-27,920
-27,920
155,255
Opening balance – net assets/liabilities
-17,382
-17,382
-27,920
-27,920
-45,302
Changes in the statement of profit or loss and other comprehensive income
Allocation of reinsurers’ shares of premiums
Amounts recoverable from insurance contracts ceded to reinsurers
247,180
247,180
0
0
247,180
Reinsurers’ shares of insurance service expenses
Reinsurers’ share of incurred claims
-
0
-124,349
-124,349
-124,349
Changes in reinsurers’ share of liability for incurred claims
-
0
-110,000
-110,000
-110,000
Total amounts recovered from reinsurers
0
0
-234,349
-234,349
-234,349
Result from reinsurance contracts held
247,180
247,180
-234,349
-234,349
12,831
Net finance income or expenses from reinsurance contracts
76,797
76,797
297
297
77,094
Finance effects from credit risk
-
0
-
0
0
Effect of movement in exchange rates
-
0
-
0
0
Foreign currency translation differences
-3
-3
-
0
-3
Total changes in the statement of profit or loss and other comprehensive income
323,974
323,974
-234,052
-234,052
89,922
Cash flows
Premiums received for insurance contracts issued
-268,815
-268,815
-
0
-268,815
Recovered claims and insurance service expenses
-
0
139,637
139,637
139,637
Total cash flows
-268,815
-268,815
139,637
139,637
-129,178
Assets
-128,969
-128,969
-113,162
-113,162
-242,131
Liabilities
166,746
166,746
-9,173
-9,173
157,573
Closing balance – net assets/liabilities
37,777
37,777
-122,335
-122,335
-84,558
335
Sava Insurance Group as at 31 December 2022 – life
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Total AIC
Excluding loss component
Assets
-67,739
-67,739
-
0
-67,739
Liabilities
253,582
253,582
-
0
253,582
Opening balance – net assets/liabilities
185,843
185,843
0
0
185,843
Changes in the statement of profit or loss and other comprehensive income
Allocation of reinsurers’ shares of premiums
Amounts recoverable from insurance contracts ceded to reinsurers
305,007
305,007
0
0
305,007
Reinsurers’ shares of insurance service expenses
Reinsurers’ share of incurred claims
-
0
-147,432
-147,432
-147,432
Changes in reinsurers’ share of liability for incurred claims
-
0
-27,999
-27,999
-27,999
Total amounts recovered from reinsurers
0
0
-175,431
-175,431
-175,431
Result from reinsurance contracts held
305,007
305,007
-175,431
-175,431
129,576
Net finance income or expenses from reinsurance contracts
-203,646
-203,646
80
80
-203,566
Effect of movement in exchange rates
2
2
-
0
2
Foreign currency translation differences
-2
-2
-2
-2
-4
Total changes in the statement of profit or loss and other comprehensive income
101,361
101,361
-175,353
-175,353
-73,992
Cash flows
Premiums received for insurance contracts issued
-304,586
-304,586
-
0
-304,586
Recovered claims and insurance service expenses
-
0
147,433
147,433
147,433
Total cash flows
-304,586
-304,586
147,433
147,433
-157,153
Other movements
-
0
-
0
Assets
-200,557
-200,557
-
0
-200,557
Liabilities
183,175
183,175
-27,920
-27,920
155,255
Closing balance – net assets/liabilities
-17,382
-17,382
-27,920
-27,920
-45,302
336
Sava Re as at 31 December 2023
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Total AIC
Excluding loss component
Assets
-602,359
-602,359
-60,622,555
-60,622,555
-61,224,914
Liabilities
559,021
559,021
-238,978
-238,978
320,044
Opening balance – net assets/liabilities
-43,338
-43,338
-60,861,532
-60,861,532
-60,904,871
Changes in the statement of profit or loss and other comprehensive income
0
Allocation of reinsurers’ shares of premiums
0
Amounts recoverable from insurance contracts ceded to reinsurers
30,235,703
30,235,703
0
0
30,235,703
Reinsurers’ shares of insurance service expenses
Recoveries of incurred claims
-
0
-77,958,868
-77,958,868
-77,958,868
Changes in amounts recoverable arising from changes in liability for incurred claims
-
0
4,054,018
4,054,018
4,054,018
Total amounts recovered from reinsurers
0
0
-73,904,850
-73,904,850
-73,904,850
Reinsurance investment components
2,863,312
2,863,312
-2,863,312
-2,863,312
0
Result from reinsurance contracts held
33,099,015
33,099,015
-76,768,162
-76,768,162
-43,669,147
Net finance income or expenses from reinsurance contracts
-267,763
-267,763
-1,929,864
-1,929,864
-2,197,627
Finance effects from credit risk
1,350,574
1,350,574
267,140
267,140
1,617,714
Effect of movement in exchange rates
2,300
2,300
47,997
47,997
50,297
Total changes in the statement of profit or loss and other comprehensive income
34,184,127
34,184,127
-78,382,891
-78,382,891
-44,198,763
Cash flows
Premiums received for insurance contracts issued
-30,846,126
-30,846,126
-
0
-30,846,126
Recovered claims and insurance service expenses
-
0
40,633,988
40,633,988
40,633,988
Total cash flows
-30,846,126
-30,846,126
40,633,988
40,633,988
9,787,861
Assets
1,849,407
1,849,407
-97,612,028
-97,612,028
-95,762,621
Liabilities
1,445,256
1,445,256
-998,408
-998,408
446,848
Closing balance – net assets/liabilities
3,294,663
3,294,663
-98,610,435
-98,610,435
-95,315,773
337
Sava Re as at 31 December 2022
EUR
Assets for remaining coverage – ARC
Assets for incurred claims – AIC
Total
Total ARC
Reinsurance contracts not measured using the PAA
Total AIC
Excluding loss component
Assets
-1,577,227
-1,577,227
-54,491,270
-54,491,270
-56,068,497
Liabilities
947,441
947,441
-180,896
-180,896
766,545
Opening balance – net assets/liabilities
-629,786
-629,786
-54,672,166
-54,672,166
-55,301,952
Changes in the statement of profit or loss and other comprehensive income
0
Allocation of reinsurers’ shares of premiums
0
Amounts recoverable from insurance contracts ceded to reinsurers
29,572,834
29,572,834
0
0
29,572,834
Reinsurers’ shares of insurance service expenses
Recoveries of incurred claims
-
0
-40,069,392
-40,069,392
-40,069,392
Changes in amounts recoverable arising from changes in liability for incurred claims
-
0
628,975
628,975
628,975
Total amounts recovered from reinsurers
0
0
-39,440,417
-39,440,417
-39,440,417
Reinsurance investment components
-1,749,215
-1,749,215
1,749,215
1,749,215
-0
Result from reinsurance contracts held
27,823,619
27,823,619
-37,691,201
-37,691,201
-9,867,583
Net finance income or expenses from reinsurance contracts
104,041
104,041
4,344,640
4,344,640
4,448,681
Finance effects from credit risk
433,637
433,637
44,773
44,773
478,410
Effect of movement in exchange rates
17,516
17,516
-261,419
-261,419
-243,902
Total changes in the statement of profit or loss and other comprehensive income
28,378,813
28,378,813
-33,563,207
-33,563,207
-5,184,394
Cash flows
Premiums received for insurance contracts issued
-27,792,365
-27,792,365
-
0
-27,792,365
Recovered claims and insurance service expenses
-
0
27,373,840
27,373,840
27,373,840
Total cash flows
-27,792,365
-27,792,365
27,373,840
27,373,840
-418,525
Assets
-602,359
-602,359
-60,622,555
-60,622,555
-61,224,914
Liabilities
559,021
559,021
-238,978
-238,978
320,044
Closing balance – net assets/liabilities
-43,338
-43,338
-60,861,532
-60,861,532
-60,904,871
338
16.8.12 Movement in individual components of insurance contracts
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts measured using the PAA
Total insurance contracts
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-11,982,626
1,390,322
-
3,798,176
3,798,176
-6,794,128
-247,597
-7,041,725
Liabilities
147,889,212
21,917,386
316,216
6,410,925
6,727,141
176,533,739
453,619,151
630,152,890
Opening balance – net assets/liabilities
135,906,586
23,307,708
316,216
10,209,101
10,525,317
169,739,611
453,371,554
623,111,165
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-32,267,932
11,238,939
171,700
27,897,612
28,069,312
7,040,319
-512,811,476
-505,771,157
Changes in estimates that adjust the contractual service margin
1,880,224
222,384
171,341
-835,202
-663,861
1,438,747
0
1,438,747
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
-1,734,317
16,361
359
6,469,617
6,469,976
4,752,020
0
4,752,020
Effects of contracts initially recognised in the period
-32,413,839
11,000,194
-
22,263,197
22,263,197
849,552
0
849,552
Effects of contracts measured using the PAA
0
-512,811,476
-512,811,476
Changes that relate to current service
24,323,239
-3,431,319
-392,991
-27,068,080
-27,461,071
-6,569,151
0
-6,569,151
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-392,991
-27,068,080
-27,461,071
-27,461,071
0
-27,461,071
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-3,431,319
-
-
-
-3,431,319
0
-3,431,319
Experience adjustment
24,323,239
-
-
-
-
24,323,239
0
24,323,239
Changes that relate to past service
-16,248,072
-11,391,615
0
0
0
-27,639,687
520,325,169
492,685,482
Changes in fulfilment cash flows relating to incurred claims
-16,248,072
-11,391,615
-
-
-
-27,639,687
520,325,169
492,685,482
Insurance service result
-24,192,765
-3,583,995
-221,291
829,532
608,241
-27,168,519
7,513,693
-19,654,826
Net finance income or expenses from insurance contracts
5,118,653
1,509,774
4,572
1,140,752
1,145,324
7,773,751
12,985,953
20,759,704
Effect of movement in exchange rates
-5,148,587
-935,077
-
-523,345
-523,345
-6,607,009
18,311
-6,588,698
Foreign currency translation differences
-
-
-
-2
-2
-2
-665
-667
Total changes in the statement of profit or loss and other comprehensive income
-24,222,699
-3,009,298
-216,719
1,446,937
1,230,218
-26,001,779
20,517,292
-5,484,487
Cash flows
Premiums received for insurance contracts issued
108,957,590
-
-
-
-
108,957,590
545,163,082
654,120,672
Claims incurred and insurance service expenses paid
-78,866,700
-
-
-
-
-78,866,700
-414,325,539
-493,192,239
Insurance acquisition cash flows
-9,770,186
-
-
-
-
-9,770,186
-86,047,236
-95,817,422
Total cash flows
20,320,704
0
0
0
0
20,320,704
44,790,307
65,111,011
Other movements
-
-
-
-
-
0
-30,151
-30,151
Assets
-14,016,607
1,011,471
-
4,824,767
4,824,767
-8,180,369
-488,770
-8,669,139
Liabilities
146,021,198
19,286,939
99,497
6,831,271
6,930,768
172,238,905
519,137,772
691,376,677
Closing balance – net assets/liabilities
132,004,591
20,298,410
99,497
11,656,038
11,755,535
164,058,536
518,649,002
682,707,538
339
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts measured using the PAA
Total insurance contracts
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-12,675,106
1,451,502
-
3,988,873
3,988,873
-7,234,731
-202,514
-7,437,245
Liabilities
157,695,709
20,137,664
491,947
7,632,607
8,124,554
185,957,927
451,394,103
637,352,030
Opening balance – net assets/liabilities
145,020,603
21,589,166
491,947
11,621,480
12,113,427
178,723,196
451,191,589
629,914,785
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-24,444,489
11,651,889
-71,213
20,946,400
20,875,187
8,082,587
-441,334,136
-433,251,549
Changes in estimates that adjust the contractual service margin
-38,531
187,562
-220,396
2,737,377
2,516,981
2,666,012
0
2,666,012
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
-1,919,205
-226,195
149,183
4,051,374
4,200,557
2,055,157
0
2,055,157
Effects of contracts initially recognised in the period
-22,486,753
11,690,522
-
14,157,649
14,157,649
3,361,418
0
3,361,418
Effects of contracts measured using the PAA
0
-441,334,136
-441,334,136
Changes that relate to current service
21,308,066
-3,223,478
-113,604
-22,614,510
-22,728,114
-4,643,526
0
-4,643,526
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-113,604
-22,614,510
-22,728,114
-22,728,114
0
-22,728,114
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-3,223,478
-
-
-
-3,223,478
0
-3,223,478
Experience adjustment
21,308,066
-
-
-
-
21,308,066
0
21,308,066
Changes that relate to past service
-26,690,239
-6,512,697
0
0
0
-33,202,936
419,763,075
386,560,139
Changes in fulfilment cash flows relating to incurred claims
-26,690,239
-6,512,697
-
-
-
-33,202,936
419,763,075
386,560,139
Insurance service result
-29,826,662
1,915,714
-184,817
-1,668,110
-1,852,927
-29,763,875
-21,571,061
-51,334,936
Net finance income or expenses from insurance contracts
-2,389,610
-280,500
9,086
366,963
376,049
-2,294,061
-24,110,312
-26,404,373
Effect of movement in exchange rates
-330,299
83,330
-
-111,230
-111,230
-358,199
111,676
-246,523
Foreign currency translation differences
-1
-2
-
-2
-2
-5
-23,374
-23,379
Total changes in the statement of profit or loss and other comprehensive income
-32,546,572
1,718,542
-175,731
-1,412,379
-1,588,110
-32,416,140
-45,593,071
-78,009,211
Cash flows
Premiums received for insurance contracts issued
105,048,250
-
-
-
-
105,048,250
447,082,460
552,130,710
Claims incurred and insurance service expenses paid
-72,542,329
-
-
-
-
-72,542,329
-326,028,802
-398,571,131
Insurance acquisition cash flows
-9,073,366
-
-
-
-
-9,073,366
-73,313,414
-82,386,780
Total cash flows
23,432,555
0
0
0
0
23,432,555
47,740,244
71,172,799
Other movements
-
-
-
-
-
0
32,792
32,792
Assets
-11,982,626
1,390,322
-
3,798,176
3,798,176
-6,794,128
-247,597
-7,041,725
Liabilities
147,889,212
21,917,386
316,216
6,410,925
6,727,141
176,533,739
453,619,151
630,152,890
Closing balance – net assets/liabilities
135,906,586
23,307,708
316,216
10,209,101
10,525,317
169,739,611
453,371,554
623,111,165
340
Sava Insurance Group as at 31 December 2023 – life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-1,440,104
224,654
733,776
1,083
383,975
1,118,834
-96,616
-96,616
Liabilities
698,607,643
30,802,689
70,803,096
911,525
53,037,313
124,751,934
854,162,266
854,162,266
Opening balance – net assets/liabilities
697,167,539
31,027,343
71,536,872
912,608
53,421,288
125,870,768
854,065,650
854,065,650
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-43,363,111
3,834,523
4,973,937
2,405,702
26,541,583
33,921,222
-5,607,366
-5,607,366
Changes in estimates that adjust the contractual service margin
-15,525,170
382,206
3,770,294
2,211,365
3,117,281
9,098,940
-6,044,024
-6,044,024
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
-435,515
-50,691
103,854
194,337
107,779
405,970
-80,236
-80,236
Effects of contracts initially recognised in the period
-27,402,426
3,503,008
1,099,789
-
23,316,523
24,416,312
516,894
516,894
Changes that relate to current service
7,970,550
-4,137,020
-9,992,513
-1,085,171
-6,331,735
-17,409,419
-13,575,889
-13,575,889
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-9,992,513
-1,085,171
-6,331,735
-17,409,419
-17,409,419
-17,409,419
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-4,137,020
-
-
-
-
-4,137,020
-4,137,020
Experience adjustment
7,970,550
-
-
-
-
-
7,970,550
7,970,550
Changes that relate to past service
-1,361,258
-237,949
0
0
0
0
-1,599,207
-1,599,207
Changes in fulfilment cash flows relating to incurred claims
-1,361,258
-237,949
-
-
-
-
-1,599,207
-1,599,207
Insurance service result
-36,753,819
-540,446
-5,018,576
1,320,531
20,209,848
16,511,803
-20,782,462
-20,782,462
Net finance income or expenses from insurance contracts
78,325,727
1,416,935
697,427
-42,656
525,401
1,180,172
80,922,834
80,922,834
Effect of movement in exchange rates
-21,581
-964
-2,382
0
-3,279
-5,661
-28,206
-28,206
Foreign currency translation differences
4,892
-177
-326
0
-4,803
-5,129
-414
-414
Total changes in the statement of profit or loss and other comprehensive income
41,555,219
875,348
-4,323,857
1,277,875
20,727,167
17,681,185
60,111,752
60,111,752
Cash flows
Premiums received for insurance contracts issued
194,809,673
-
-
-
-
-
194,809,673
194,809,673
Claims incurred and insurance service expenses paid
-133,937,909
-
-
-
-
-
-133,937,909
-133,937,909
Insurance acquisition cash flows
-16,332,938
-
-
-
-
-
-16,332,938
-16,332,938
Total cash flows
44,538,826
0
0
0
0
0
44,538,826
44,538,826
Other movements
-8,805
-
-
-
-
-
-8,805
-8,805
Assets
-53,393,210
10,505,548
21,670,306
2,538
20,276,668
41,949,512
-938,150
-938,150
Liabilities
836,645,989
21,397,143
45,542,709
2,187,945
53,871,787
101,602,441
959,645,573
959,645,573
Closing balance – net assets/liabilities
783,252,779
31,902,691
67,213,015
2,190,483
74,148,455
143,551,953
958,707,423
958,707,423
341
Sava Insurance Group as at 31 December 2022 – life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-58,575,161
10,714,284
32,171,902
10,495
8,736,665
40,919,062
-6,941,815
-6,941,815
Liabilities
889,171,403
18,516,710
47,458,680
854,109
27,749,890
76,062,679
983,750,792
983,750,792
Opening balance – net assets/liabilities
830,596,242
29,230,994
79,630,582
864,604
36,486,555
116,981,741
976,808,977
976,808,977
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-20,294,544
8,574,434
-1,245,868
-915,387
19,123,209
16,961,954
5,241,844
5,241,844
Changes in estimates that adjust the contractual service margin
6,895,448
4,524,364
-1,837,514
-1,272,523
-5,009,688
-8,119,725
3,300,087
3,300,087
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
885,102
55,477
29,985
357,136
12,344
399,465
1,340,044
1,340,044
Effects of contracts initially recognised in the period
-28,075,094
3,994,593
561,661
-
24,120,553
24,682,214
601,713
601,713
Changes that relate to current service
-2,726,847
-3,314,887
-11,084,537
-121,730
-4,513,148
-15,719,415
-21,761,149
-21,761,149
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-11,084,537
-121,730
-4,513,148
-15,719,415
-15,719,415
-15,719,415
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-3,314,887
-
-
-
-
-3,314,887
-3,314,887
Experience adjustment
-2,726,847
-
-
-
-
-
-2,726,847
-2,726,847
Changes that relate to past service
-3,334,925
-288,085
0
0
0
0
-3,623,010
-3,623,010
Changes in fulfilment cash flows relating to incurred claims
-3,334,925
-288,085
-
-
-
-
-3,623,010
-3,623,010
Insurance service result
-26,356,316
4,971,462
-12,330,405
-1,037,117
14,610,061
1,242,539
-20,142,315
-20,142,315
Net finance income or expenses from insurance contracts
-137,227,605
-3,173,902
4,241,281
1,085,120
2,326,498
7,652,899
-132,748,608
-132,748,608
Effect of movement in exchange rates
13,193
-2,310
-8,307
-
-3,056
-11,363
-480
-480
Foreign currency translation differences
-827,545
1,099
3,721
1
1,230
4,952
-821,494
-821,494
Total changes in the statement of profit or loss and other comprehensive income
-164,398,273
1,796,349
-8,093,710
48,004
16,934,733
8,889,027
-153,712,897
-153,712,897
Cash flows
Premiums received for insurance contracts issued
180,750,118
-
-
-
-
-
180,750,118
180,750,118
Claims incurred and insurance service expenses paid
-135,173,500
-
-
-
-
-
-135,173,500
-135,173,500
Insurance acquisition cash flows
-14,842,731
-
-
-
-
-
-14,842,731
-14,842,731
Total cash flows
30,733,887
0
0
0
0
0
30,733,887
30,733,887
Other movements
235,683
-
-
-
-
-
235,683
235,683
Assets
-1,440,104
224,654
733,776
1,083
383,975
1,118,834
-96,616
-96,616
Liabilities
698,607,643
30,802,689
70,803,096
911,525
53,037,313
124,751,934
854,162,266
854,162,266
Closing balance – net assets/liabilities
697,167,539
31,027,343
71,536,872
912,608
53,421,288
125,870,768
854,065,650
854,065,650
342
Sava Re as at 31 December 2023
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts measured using the PAA
Total insurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-4,902,477
1,118,175
23
-
728,718
728,742
-3,055,560
-16,071
-3,071,631
Liabilities
216,898,328
32,090,420
544,685
131,582
6,996,756
7,673,022
256,661,771
15,752,280
272,414,051
Opening balance – net assets/liabilities
211,995,851
33,208,596
544,708
131,582
7,725,474
8,401,764
253,606,211
15,736,209
269,342,420
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-52,521,291
16,030,102
-47,498
401,890
43,526,054
43,880,446
7,389,256
-9,972,681
-2,583,425
Changes in estimates that adjust the contractual service margin
-7,499,084
-104,539
-69,815
401,890
8,837,867
9,169,941
1,566,319
0
1,566,319
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
-1,875,104
-21,671
22,318
0.03
6,826,073
6,848,391
4,951,615
0
4,951,615
Effects of contracts initially recognised in the period
-43,147,103
16,156,312
-
-
27,862,113
27,862,113
871,322
0
871,322
Effects of contracts measured using the PAA
-
-
-
-
-
-
0
-9,972,681
-9,972,681
Changes that relate to current service
38,564,349
-5,362,284
-197,088
-417,817
-42,968,137
-43,583,041
-10,380,976
0
-10,380,976
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-197,088
-417,817
-42,968,137
-43,583,041
-43,583,041
0
-43,583,041
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-5,362,284
-
-
-
0
-5,362,284
0
-5,362,284
Experience adjustment
38,564,349
(0.00)
-
-
-
0
38,564,349
0
38,564,349
Changes that relate to past service
-12,142,948
-17,210,153
0
0
0
0
-29,353,101
49,004,293
19,651,192
Changes in fulfilment cash flows relating to incurred claims
-12,142,948
-17,210,153
-
-
-
0
-29,353,101
49,004,293
19,651,192
Insurance service result
-26,099,889
-6,542,336
-244,585
-15,927
557,917
297,404
-32,344,821
39,031,612
6,686,791
Net finance income or expenses from insurance contracts
7,944,769
2,082,193
-2,290
2,219
1,345,531
1,345,460
11,372,422
829,918
12,202,340
Effect of movement in exchange rates
-5,218,155
-951,093
-
-75
-523,345
-523,420
-6,692,669
10,038
-6,682,630
Total changes in the statement of profit or loss and other comprehensive income
-23,373,276
-5,411,236
-246,875
-13,783
1,380,103
1,119,444
-27,665,067
39,871,569
12,206,501
Cash flows
Premiums received for insurance contracts issued
153,462,566
-
-
-
-
0
153,462,566
9,424,967
162,887,532
Claims incurred and insurance service expenses paid
-120,063,682
-
-
-
-
0
-120,063,682
-25,507,274
-145,570,956
Insurance acquisition cash flows
-8,077,162
-
-
-
-
0
-8,077,162
-130,957
-8,208,119
Total cash flows
25,321,721
0
0
0
0
0
25,321,721
-16,213,264
9,108,458
Assets
-7,068,622
673,921
-
-
1,313,223
1,313,223
-5,081,479
-13,866
-5,095,344
Liabilities
221,012,919
27,123,439
297,833
117,799
7,792,353
8,207,985
256,344,343
39,408,380
295,752,723
Closing balance – net assets/liabilities
213,944,297
27,797,360
297,833
117,799
9,105,576
9,521,208
251,262,865
39,394,514
290,657,379
343
Sava Re as at 31 December 2022
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total insurance contracts not measured using the PAA
Total insurance contracts measured using the PAA
Total insurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-4,348,362
1,200,884
-
-
733,682
733,682
-2,413,796
-649,642
-3,063,438
Liabilities
236,905,166
29,677,243
3,178,028
191,511
4,851,790
8,221,328
274,803,738
16,643,169
291,446,906
Opening balance – net assets/liabilities
232,556,804
30,878,127
3,178,028
191,511
5,585,472
8,955,010
272,389,942
15,993,527
288,383,469
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
-47,972,792
15,801,002
7,643,826
358,681
32,024,472
40,026,979
7,855,188
-7,447,982
407,206
Changes in estimates that adjust the contractual service margin
-14,562,375
-160,780
7,626,668
355,233
9,636,844
17,618,746
2,895,591
0
2,895,591
Changes in estimates that do not adjust the contractual service margin (recognition/reversals of losses on onerous contracts)
-2,434,376
-273,423
17,157
3,448
4,218,841
4,239,446
1,531,646
0
1,531,646
Effects of contracts initially recognised in the period
-30,976,041
16,235,205
-
-
18,168,787
18,168,787
3,427,951
0
3,427,951
Effects of contracts measured using the PAA
-
-
-
-
-
-
0
-7,447,982
-7,447,982
Changes that relate to current service
46,231,846
-2,686,213
-10,262,110
-421,306
-30,094,550
-40,777,966
2,767,667
0
2,767,667
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
-10,262,110
-421,306
-30,094,550
-40,777,966
-40,777,966
0
-40,777,966
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-2,686,213
-
-
-
0
-2,686,213
0
-2,686,213
Experience adjustment
46,231,846
-
-
-
-
0
46,231,846
0
46,231,846
Changes that relate to past service
-17,786,380
-9,975,397
0
0
0
0
-27,761,777
6,349,498
-21,412,279
Changes in fulfilment cash flows relating to incurred claims
-17,786,380
-9,975,397
-
-
-
0
-27,761,777
6,349,498
-21,412,279
Insurance service result
-19,527,326
3,139,392
-2,618,284
-62,625
1,929,922
-750,987
-17,138,921
-1,098,484
-18,237,405
Net finance income or expenses from insurance contracts
-8,710,197
-970,057
-15,035
2,736
321,310
309,010
-9,371,243
-2,359,397
-11,730,640
Effect of movement in exchange rates
-25,091
161,133
-
-39
-111,230
-111,269
24,773
-22,154
2,619
Total changes in the statement of profit or loss and other comprehensive income
-28,262,614
2,330,469
-2,633,320
-59,929
2,140,002
-553,246
-26,485,392
-3,480,035
-29,965,427
Cash flows
Premiums received for insurance contracts issued
146,422,654
-
-
-
-
0
146,422,654
6,740,762
153,163,416
Claims incurred and insurance service expenses paid
-131,695,671
-
-
-
-
0
-131,695,671
-3,439,469
-135,135,140
Insurance acquisition cash flows
-7,025,322
-
-
-
-
0
-7,025,322
-78,576
-7,103,897
Total cash flows
7,701,661
0
0
0
0
0
7,701,661
3,222,717
10,924,378
Assets
-4,902,477
1,118,175
23
0
728,718
728,742
-3,055,560
-16,071
-3,071,631
Liabilities
216,898,328
32,090,420
544,685
131,582
6,996,756
7,673,022
256,661,771
15,752,280
272,414,051
Closing balance – net assets/liabilities
211,995,851
33,208,596
544,708
131,582
7,725,474
8,401,764
253,606,211
15,736,209
269,342,420
344
16.8.13 Movement in individual components of reinsurance contracts
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts measured using the PAA
Total reinsurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-53,912,524
-4,879,702
-
-
-5,890,831
-5,890,831
-64,683,057
-3,250,028
-67,933,085
Liabilities
512,972
-40,081
-
-
-91,838
-91,838
381,053
515,306
896,359
Opening balance – net assets/liabilities
-53,399,552
-4,919,783
0
0
-5,982,669
-5,982,669
-64,302,004
-2,734,722
-67,036,726
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
21,944,374
-4,486,142
-13,600
-20,262
-17,411,785
-17,445,647
12,585
6,576,428
6,589,013
Changes in estimates that adjust the contractual service margin
5,095,447
295,229
-13,039
-20,262
-5,264,631
-5,297,932
92,744
0
92,744
Changes in estimates relating to recognition of and reversals of losses on onerous underlying contracts
-
-
-
-
-2,692
-2,692
-2,692
0
-2,692
Changes in recoveries of losses on onerous underlying contracts that adjust the contractual service margin
-
-
-561
-
-76,907
-77,468
-77,468
0
-77,468
Effects of contracts initially recognised in the period
16,848,927
-4,781,371
-
-
-12,067,555
-12,067,555
1
0
1
Effects of contracts measured using the PAA
0
6,576,428
6,576,428
Changes that relate to current service
-65,042,513
241,262
13,607
30,909
18,747,624
18,792,140
-46,009,111
0
-46,009,111
Amount of the contractual service margin recognised in profit or loss
-
-
13,607
30,909
18,747,624
18,792,140
18,792,140
18,792,140
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
241,262
-
-
-
-
241,262
241,262
Experience adjustment
-65,042,513
-
-
-
-
-
-65,042,513
-65,042,513
Changes that relate to past service
6,150,485
-1,814,966
0
0
0
0
4,335,519
-7,968,712
-3,633,193
Changes in fulfilment cash flows relating to incurred claims
6,150,485
-1,814,966
-
-
-
-
4,335,519
-7,968,712
-3,633,193
Result from reinsurance contracts held
-36,947,654
-6,059,846
7
10,647
1,335,839
1,346,493
-41,661,007
-1,392,284
-43,053,291
Net finance income or expenses from reinsurance contracts
-1,614,282
-333,868
4
251
-392,446
-392,191
-2,340,341
-206,100
-2,546,441
Finance effects from credit risk
1,561,743
-
-
-
-
0
1,561,743
91,023
1,652,766
Effect of movement in exchange rates
36,258
6,545
-
-
7,493
7,493
50,296
0
50,296
Foreign currency translation differences
2.00
-3
1
-1
-2
-2
-3
121
118
Total changes in the statement of profit or loss and other comprehensive income
-36,963,933
-6,387,172
12
10,897
950,884
961,793
-42,389,312
-1,507,240
-43,896,552
Cash flows
Premiums received for insurance contracts issued
-36,611,496
-
-
-
-
-
-36,611,496
-11,158,965
-47,770,461
Recovered claims and insurance service expenses
42,401,318
-
-
-
-
-
42,401,318
10,543,667
52,944,985
Total cash flows
5,789,822
0
0
0
0
0
5,789,822
-615,298
5,174,524
Other movements
-
-
-
-
-
-
0
3,797
3,797
Assets
-85,862,361
-11,203,130
12
10,897
-4,389,028
-4,378,119
-101,443,610
-5,795,817
-107,239,427
Liabilities
1,288,698
-103,825
0
0
-642,757
-642,757
542,116
942,354
1,484,470
Closing balance – net assets/liabilities
-84,573,663
-11,306,955
12
10,897
-5,031,785
-5,020,876
-100,901,494
-4,853,463
-105,754,957
345
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts measured using the PAA
Total reinsurance contracts
Contracts under the modified retrospective approach
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
-50,829,073
-5,399,611
-239,309
-
-4,238,660
-4,477,969
-60,706,653
-3,471,613
-64,178,266
Liabilities
1,032,032
-91,279
-6,853
-
-49,581
-56,434
884,319
238,901
1,123,220
Opening balance – net assets/liabilities
-49,797,041
-5,490,890
-246,162
0
-4,288,241
-4,534,403
-59,822,334
-3,232,712
-63,055,046
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
20,558,265
-4,648,747
-175,969
104,044
-19,314,808
-19,386,733
-3,477,215
4,088,926
611,711
Changes in estimates that adjust the contractual service margin
4,960,399
442,621
-175,971
104,044
-8,749,604
-8,821,531
-3,418,511
0
-3,418,511
Changes in estimates relating to recognition of and reversals of losses on onerous underlying contracts
-
-
-
-
-5,111
-5,111
-5,111
0
-5,111
Changes in recoveries of losses on onerous underlying contracts that adjust the contractual service margin
-
-
2
-
-53,593
-53,591
-53,591
0
-53,591
Effects of contracts initially recognised in the period
15,597,866
-5,091,368
-
-
-10,506,500
-10,506,500
-2
0
-2
Effects of contracts measured using the PAA
0
4,088,926
4,088,926
Changes that relate to current service
-24,576,997
2,572,595
420,904
-104,045
17,589,599
17,906,458
-4,097,944
0
-4,097,944
Amount of the contractual service margin recognised in profit or loss
-
-
420,904
-104,045
17,589,599
17,906,458
17,906,458
17,906,458
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
2,572,595
-
-
-
-
2,572,595
2,572,595
Experience adjustment
-24,576,997
-
-
-
-
-
-24,576,997
-24,576,997
Changes that relate to past service
-1,262,454
2,170,235
0
0
0
0
907,781
-2,147,304
-1,239,523
Changes in fulfilment cash flows relating to incurred claims
-1,262,454
2,170,235
-
-
-
-
907,781
-2,147,304
-1,239,523
Result from reinsurance contracts held
-5,281,186
94,083
244,935
-1
-1,725,209
-1,480,275
-6,667,378
1,941,622
-4,725,756
Net finance income or expenses from reinsurance contracts
4,036,753
478,844
1,227
-
28,931
30,158
4,545,755
158,051
4,703,806
Finance effects from credit risk
421,137
-
-
-
-
-
421,137
8,542
429,679
Effect of movement in exchange rates
-243,929
-1,824
-
-
1,851
1,851
-243,902
0
-243,902
Foreign currency translation differences
4
4
0
1
-1
-
8
23,303
23,311
Total changes in the statement of profit or loss and other comprehensive income
-1,067,221
571,107
246,162
0
-1,694,428
-1,448,266
-1,944,380
2,131,518
187,138
Cash flows
Premiums received for insurance contracts issued
-32,762,483
-
-
-
-
-
-32,762,483
-7,906,754
-40,669,237
Recovered claims and insurance service expenses
30,227,193
-
-
-
-
-
30,227,193
6,298,652
36,525,845
Total cash flows
-2,535,290
0
0
0
0
0
-2,535,290
-1,608,102
-4,143,392
Other movements
-
-
-
-
-
-
0
-25,426
-25,426
Assets
-53,912,524
-4,879,702
-
-
-5,890,831
-5,890,831
-64,683,057
-3,250,028
-67,933,085
Liabilities
512,972
-40,081
-
-
-91,838
-91,838
381,053
515,306
896,359
Closing balance – net assets/liabilities
-53,399,552
-4,919,783
0
0
-5,982,669
-5,982,669
-64,302,004
-2,734,722
-67,036,726
346
Sava Insurance Group as at 31 December 2023 – life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
635,238
52,261
-
-888,056
-888,056
-200,557
-200,557
Liabilities
323,386
-8,258
-159,873
-
-159,873
155,255
155,255
Opening balance – net assets/liabilities
958,624
44,003
-159,873
-888,056
-1,047,929
-45,302
-45,302
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
21,330
-3,703
-17,627
0
-17,627
0
0
Changes in estimates that adjust the contractual service margin
3,339
-3,236
-102
-
-102
1
1
Effects of contracts initially recognised in the period
17,991
-467
-17,525
-
-17,525
-1
-1
Changes that relate to current service
-1,110
-4,148
128,089
0
128,089
122,831
122,831
Amount of the contractual service margin recognised in profit or loss
-
-
128,089
-
128,089
128,089
128,089
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-4,148
-
-
-
-4,148
-4,148
Experience adjustment
-1,110
-
-
-
-
-1,110
-1,110
Changes that relate to past service
-110,000
0
0
0
0
-110,000
-110,000
Changes in fulfilment cash flows relating to incurred claims
-110,000
-
-
-
-
-110,000
-110,000
Result from reinsurance contracts held
-89,780
-7,851
110,462
0
110,462
12,831
12,831
Net finance income or expenses from reinsurance contracts
71,043
4,050
2,001
-
2,001
77,094
77,094
Finance effects from credit risk
-
-
-
-
-
0
0
Effect of movement in exchange rates
-
-
-
-
-
0
0
Foreign currency translation differences
-2
-1
-1
-
-1
-4
-4
Total changes in the statement of profit or loss and other comprehensive income
-18,739
-3,802
112,462
0
112,462
89,921
89,921
Cash flows
Premiums received for insurance contracts issued
-268,815
-
-
-
-
-268,815
-268,815
Recovered claims and insurance service expenses
139,637
-
-
-
-
139,637
139,637
Reinsurance acquisition cash flows
-
-
-
-
-
0
0
Total cash flows
-129,178
0
0
0
0
-129,178
-129,178
Other movements
-
-
-
-
-
0
0
Assets
489,865
46,922
109,137
-888,056
-778,919
-242,132
-242,132
Liabilities
320,842
-6,721
-156,548
0
-156,548
157,573
157,573
Closing balance – net assets/liabilities
810,707
40,201
-47,411
-888,056
-935,467
-84,559
-84,559
347
Sava Insurance Group as at 31 December 2022 – life
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts
Contracts under the fair value approach
Other contracts
Total contractual service margin
Assets
912,114
-
-
-979,853
-979,853
-67,739
-67,739
Liabilities
283,683
-24,550
-5,551
-
-5,551
253,582
253,582
Opening balance – net assets/liabilities
1,195,797
-24,550
-5,551
-979,853
-985,404
185,843
185,843
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
121,592
79,698
-175,826
-25,464
-201,290
0
0
Changes in estimates that adjust the contractual service margin
121,592
79,696
-175,826
-25,464
-201,290
-2
-2
Effects of contracts initially recognised in the period
-
2
-
-
0
2
2
Changes that relate to current service
18,592
3,087
21,479
114,417
135,896
157,575
157,575
Amount of the contractual service margin recognised in profit or loss
-
-
21,479
114,417
135,896
135,896
135,896
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
3,087
-
-
0
3,087
3,087
Experience adjustment
18,592
-
-
-
0
18,592
18,592
Changes that relate to past service
-27,999
0
0
0
0
-27,999
-27,999
Changes in fulfilment cash flows relating to incurred claims
-27,999
-
-
-
0
-27,999
-27,999
Result from reinsurance contracts held
112,185
82,785
-154,347
88,953
-65,394
129,576
129,576
Net finance income or expenses from reinsurance contracts
-192,202
-14,232
26
2,842
2,868
-203,566
-203,566
Effect of movement in exchange rates
-
-
-
2
2
2
2
Foreign currency translation differences
-3
0
-1
0
-1
-4
-4
Total changes in the statement of profit or loss and other comprehensive income
-80,020
68,553
-154,322
91,797
-62,525
-73,992
-73,992
Cash flows
Premiums received for insurance contracts issued
-304,586
-
-
-
0
-304,586
-304,586
Recovered claims and insurance service expenses
147,433
-
-
-
0
147,433
147,433
Total cash flows
-157,153
0
0
0
0
-157,153
-157,153
Assets
635,238
52,261
-
-888,056
-888,056
-200,557
-200,557
Liabilities
323,386
-8,258
-159,873
-
-159,873
155,255
155,255
Closing balance – net assets/liabilities
958,624
44,003
-159,873
-888,056
-1,047,929
-45,302
-45,302
348
Sava Re as at 31 December 2023
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts
Other contracts
Total contractual service margin
Assets
-51,254,588
-4,449,816
-5,520,510
-5,520,510
-61,224,914
-61,224,914
Liabilities
451,963
-40,081
-91,838
-91,838
320,044
320,044
Opening balance – net assets/liabilities
-50,802,625
-4,489,897
-5,612,348
-5,612,348
-60,904,871
-60,904,871
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
18,029,294
-3,869,768
-14,066,786
-14,066,786
92,740
92,740
Changes in estimates that adjust the contractual service margin
3,873,154
320,134
-4,100,549
-4,100,549
92,740
92,740
Effects of contracts initially recognised in the period
14,156,140
-4,189,902
-9,966,238
-9,966,238
0
0
Changes that relate to current service
-63,349,903
-58,786
15,592,785
15,592,785
-47,815,904
-47,815,904
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
15,592,785
15,592,785
15,592,785
15,592,785
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
-58,786
-
0
-58,786
-58,786
Experience adjustment
-63,349,903
-
-
0
-63,349,903
-63,349,903
Changes that relate to past service
6,148,125
-2,094,108
0
0
4,054,018
4,054,018
Changes in fulfilment cash flows relating to incurred claims
6,148,125
-2,094,108
-
0
4,054,018
4,054,018
Result from reinsurance contracts held
-39,172,483
-6,022,662
1,525,999
1,525,999
-43,669,147
-43,669,147
Net finance income or expenses from reinsurance contracts
-1,573,989
-304,691
-318,947
-318,947
-2,197,627
-2,197,627
Finance effects from credit risk
1,617,714
-
-
0
1,617,714
1,617,714
Effect of movement in exchange rates
36,259
6,546
7,492
7,492
50,297
50,297
Total changes in the statement of profit or loss and other comprehensive income
-39,092,500
-6,320,807
1,214,544
1,214,544
-44,198,763
-44,198,763
Cash flows
Premiums received for insurance contracts issued
-30,846,126
-
-
0
-30,846,126
-30,846,126
Recovered claims and insurance service expenses
40,633,988
-
-
0
40,633,988
40,633,988
Reinsurance acquisition cash flows
-
-
-
0
0
0
Total cash flows
9,787,861
0
0
0
9,787,861
9,787,861
Assets
-81,217,678
-10,728,485
-3,816,458
-3,816,458
-95,762,621
-95,762,621
Liabilities
1,110,414
-82,220
-581,346
-581,346
446,848
446,848
Closing balance – net assets/liabilities
-80,107,264
-10,810,704
-4,397,804
-4,397,804
-95,315,773
-95,315,773
349
Sava Re as at 31 December 2022
EUR
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
Total reinsurance contracts not measured using the PAA
Total reinsurance contracts
Other contracts
Total contractual service margin
Assets
-47,104,536
-4,836,710
-4,127,250
-4,127,250
-56,068,497
-56,068,497
Liabilities
903,860
-87,733
-49,581
-49,581
766,545
766,545
Opening balance – net assets/liabilities
-46,200,677
-4,924,443
-4,176,831
-4,176,831
-55,301,952
-55,301,952
Changes in the statement of profit or loss and other comprehensive income
Changes that relate to future services
18,108,161
-4,086,131
-17,440,538
-17,440,538
-3,418,508
-3,418,508
Changes in estimates that adjust the contractual service margin
4,947,211
410,609
-8,776,329
-8,776,329
-3,418,508
-3,418,508
Effects of contracts initially recognised in the period
13,160,950
-4,496,740
-8,664,210
-8,664,210
0
0
Changes that relate to current service
-25,147,040
2,088,829
15,980,161
15,980,161
-7,078,050
-7,078,050
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
-
-
15,980,161
15,980,161
15,980,161
15,980,161
Change in the risk adjustment for non-financial risk that does not relate to future service or past service
-
2,088,829
-
0
2,088,829
2,088,829
Experience adjustment
-25,147,040
-
-
0
-25,147,040
-25,147,040
Changes that relate to past service
-1,342,777
1,971,752
0
0
628,975
628,975
Changes in fulfilment cash flows relating to incurred claims
-1,342,777
1,971,752
-
0
628,975
628,975
Result from reinsurance contracts held
-8,381,656
-25,549
-1,460,378
-1,460,378
-9,867,583
-9,867,583
Net finance income or expenses from reinsurance contracts
3,963,752
461,920
23,010
23,010
4,448,681
4,448,681
Finance effects from credit risk
478,410
-
-
0
478,410
478,410
Effect of movement in exchange rates
-243,929
-1,824
1,851
1,851
-243,902
-243,902
Total changes in the statement of profit or loss and other comprehensive income
-4,183,423
434,546
-1,435,517
-1,435,517
-5,184,394
-5,184,394
Cash flows
Premiums received for insurance contracts issued
-27,792,365
-
-
0
-27,792,365
-27,792,365
Recovered claims and insurance service expenses
27,373,840
-
-
0
27,373,840
27,373,840
Total cash flows
-418,525
0
0
0
-418,525
-418,525
Assets
-51,254,588
-4,449,816
-5,520,510
-5,520,510
-61,224,914
-61,224,914
Liabilities
451,963
-40,081
-91,838
-91,838
320,044
320,044
Closing balance – net assets/liabilities
-50,802,625
-4,489,897
-5,612,348
-5,612,348
-60,904,871
-60,904,871
350
16.8.14 Effects of (re)insurance contracts initially recognised in the period (BBA, VFA)
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
58,429,069
9,031,430
Insurance acquisition cash flows
9,890,577
825,696
Present value of expected cash outflows
68,319,646
9,857,126
Present value of expected cash inflows
-99,784,470
-10,806,141
Adjustment for non-financial risk
9,201,628
1,798,567
Contractual service margin
22,263,196
-
Total at initial recognition
0
849,552
EUR
Contracts issued
Contracts recognised without loss recovery
Contracts recognised with loss recovery
Reinsurance contracts
Premiums
-16,354,885
-463,225
Present value of expected cash outflows
-16,354,885
-463,225
Present value of expected cash inflows
32,733,889
933,147
Adjustment for non-financial risk
-4,640,800
-140,570
Contractual service margin
-11,738,204
-329,352
Loss component
-
-116,259
Total at initial recognition
0
-116,259
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
46,751,437
23,825,323
Insurance acquisition cash flows
7,857,908
1,799,354
Present value of expected cash outflows
54,609,345
25,624,677
Present value of expected cash inflows
-75,507,081
-27,213,692
Adjustment for non-financial risk
6,740,087
4,950,435
Contractual service margin
14,157,649
-
Total at initial recognition
0
3,361,420
EUR
Contracts issued
Contracts recognised without loss recovery
Contracts recognised with loss recovery
Reinsurance contracts
Premiums
-17,436,355
-383,448
Present value of expected cash outflows
-17,436,355
-383,448
Present value of expected cash inflows
32,696,651
721,018
Adjustment for non-financial risk
-4,980,392
-110,976
Contractual service margin
-10,279,904
-226,595
Loss component
-
-84,899
Total at initial recognition
0
-84,900
351
Sava Insurance Group as at 31 December 2023 – life
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
110,423,889
10,913,234
Insurance acquisition cash flows
15,221,421
1,995,572
Present value of expected cash outflows
125,645,310
12,908,806
Present value of expected cash inflows
-153,393,135
-12,563,406
Adjustment for non-financial risk
3,331,512
171,495
Contractual service margin
24,416,313
-
Total at initial recognition
0
516,895
EUR
Contracts issued
Contracts recognised without loss recovery
Reinsurance contracts
Premiums
-4,472
Present value of expected cash outflows
-4,472
Present value of expected cash inflows
22,463
Adjustment for non-financial risk
-466
Contractual service margin
-17,525
Loss component
-
Total at initial recognition
0
Sava Insurance Group as at 31 December 2022 – life
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
110,947,434
10,232,167
Insurance acquisition cash flows
15,844,912
1,352,017
Present value of expected cash outflows
126,792,346
11,584,184
Present value of expected cash inflows
-155,322,932
-11,128,693
Adjustment for non-financial risk
3,848,372
146,223
Contractual service margin
24,682,214
-
Total at initial recognition
0
601,714
Expected cash flows in this disclosure include only contractually determined periodic premiums, single premiums and additional payments received in the year of contract recognition. Incurred claims and other insurance service expenses include only outflows for surrender arising from contractually determined periodic premiums and lump-sum and additional payments received in the year of recognition.
The expected cash inflows and expected cash outflows presented in this note do not include all expected cash inflows. Higher inflows correspond to higher outflows, and therefore the net effect is negligible.
352
Sava Re as at 31 December 2023
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
95,883,706
8,805,356
Insurance acquisition cash flows
8,092,629
754,107
Present value of expected cash outflows
103,976,335
9,559,462
Present value of expected cash inflows
-146,247,516
-10,435,385
Adjustment for non-financial risk
14,409,067
1,747,244
Contractual service margin
27,862,113
-
Total at initial recognition
0
871,322
EUR
Contracts issued
Contracts recognised without loss recovery
Reinsurance contracts
Premiums
-14,671,209
Present value of expected cash outflows
-14,671,209
Present value of expected cash inflows
28,827,349
Adjustment for non-financial risk
-4,189,902
Contractual service margin
-9,966,238
Total at initial recognition
0
Sava Re as at 31 December 2022
EUR
Contracts issued
Profitable
Onerous
Insurance contracts
Claims incurred and other insurance service expenses
79,965,238
23,880,015
Insurance acquisition cash flows
6,030,085
1,778,463
Present value of expected cash outflows
85,995,322
25,658,478
Present value of expected cash inflows
-115,427,349
-27,202,492
Adjustment for non-financial risk
11,263,240
4,971,965
Contractual service margin
18,168,787
-
Total at initial recognition
0
3,427,951
EUR
Contracts issued
Contracts recognised without loss recovery
Reinsurance contracts
Premiums
-15,636,975
Present value of expected cash outflows
-15,636,975
Present value of expected cash inflows
28,797,925
Adjustment for non-financial risk
-4,496,740
Contractual service margin
-8,664,210
Total at initial recognition
0
16.8.15 Expected CSM release
Sava Insurance Group as at 31 December 2023 – non-life
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
7,202,399
1,101,693
769,903
589,566
470,039
1,245,255
376,679
11,755,534
Reinsurance contracts
-4,953,681
-42,413
-19,438
-5,203
-141
-
-
-5,020,876
Total
2,248,718
1,059,280
750,465
584,363
469,898
1,245,255
376,679
6,734,658
353
Sava Insurance Group as at 31 December 2022 – non-life
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
6,463,174
1,085,274
723,750
523,157
384,961
1,004,938
340,062
10,525,316
Reinsurance contracts
-5,573,662
-366,477
-23,004
-15,413
-4,006
-105
-
-5,982,667
Total
889,512
718,797
700,746
507,744
380,955
1,004,833
340,062
4,542,649
Sava Insurance Group as at 31 December 2023 – life
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
16,976,214
14,992,610
13,302,312
11,824,815
10,518,420
38,006,640
37,930,942
143,551,953
Reinsurance contracts
-111,396
-100,800
-91,077
-80,639
-71,402
-255,648
-224,502
-935,464
Total
16,864,818
14,891,810
13,211,235
11,744,176
10,447,018
37,750,992
37,706,440
142,616,489
Sava Insurance Group as at 31 December 2022 – life
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
15,012,296
13,253,567
11,792,672
10,524,042
9,380,061
33,481,826
32,426,305
125,870,769
Reinsurance contracts
-117,519
-109,273
-97,803
-89,063
-79,069
-286,627
-268,574
-1,047,928
Total
14,894,777
13,144,294
11,694,869
10,434,979
9,300,992
33,195,199
32,157,731
124,822,841
Sava Re as at 31 December 2023
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
9,168,508
197,371
107,473
10,836
8,628
23,697
4,695
9,521,208
Reinsurance contracts
-4,397,804
-
-
-
-
-
-
-4,397,804
Total
4,770,704
197,371
107,473
10,836
8,628
23,697
4,695
5,123,404
Sava Re as at 31 December 2022
EUR
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–10 years
> 10 years
Total
Insurance contracts
7,871,130
235,518
137,057
120,530
8,276
23,160
6,093
8,401,764
Reinsurance contracts
-5,271,105
-341,244
-
-
-
-
-
-5,612,348
Total
2,600,025
-105,725
137,057
120,530
8,276
23,160
6,093
2,789,415
354
16.8.16 Finance income or expenses from (re)insurance contracts
Sava Insurance Group as at 31 December 2023
Non-life
Life
Total
Net finance income or expenses from insurance contracts
Changes in the fair value of the portfolio of insurance contracts with direct participation features
-
-58,425,631
-58,425,631
Accrued interest at locked-in interest rate
-8,379,535
-4,928,374
-13,307,909
Changes in interest rates and other financial assumptions
-12,551,570
-17,578,877
-30,130,447
Foreign exchange gains/losses
6,729,958
29,446
6,759,404
Foreign currency translation differences
30,814
9,219
40,033
Total net finance income or expenses from insurance contracts
-14,170,333
-80,894,217
-95,064,550
Net finance income or expenses from reinsurance contracts
Accrued interest at locked-in interest rate
1,094,834
-186
1,094,648
Changes in interest rates and other financial assumptions
1,455,775
-76,905
1,378,870
Foreign exchange gains/losses
-50,670
-
-50,670
Foreign currency translation differences
-3,917
3
-3,914
Net finance income or expenses from reinsurance contracts
2,496,022
-77,088
2,418,934
Finance effects from credit risk
-1,652,765
-
-1,652,765
Total net finance income or expenses from reinsurance contracts
843,257
-77,088
766,169
Total
-13,327,076
-80,971,305
-94,298,381
Amounts recognised in profit or loss
-2,231,823
-60,381,331
-62,613,154
Amounts recognised in other comprehensive income
-11,095,253
-20,589,972
-31,685,225
Finance income or expenses from insurance contracts
Net finance income or expenses from insurance contracts
-14,170,332
-80,894,215
-95,064,547
Recognised in profit or loss
-1,619,434
-60,381,145
-62,000,579
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
-12,440,453
-20,520,975
-32,961,428
Effects of exchange rate differences in other comprehensive income
-141,259
-1,314
-142,573
Foreign currency translation differences
30,814
9,219
40,033
Net finance income or expenses from reinsurance contracts
843,256
-77,088
766,168
Recognised in profit or loss
-612,389
-186
-612,575
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
1,459,189
-76,905
1,382,284
Effects of exchange rate differences in other comprehensive income
373
-
373
Foreign currency translation differences
-3,917
3
-3,914
355
Sava Insurance Group as at 31 December 2022
Non-life
Life
Total
Net finance income or expenses from insurance contracts
Changes in the fair value of the portfolio of insurance contracts with direct participation features
-
67,796,261
67,796,261
Accrued interest at locked-in interest rate
-5,818,135
5,475,482
-342,653
Changes in interest rates and other financial assumptions
32,087,278
60,308,260
92,395,538
Foreign exchange gains/losses
414,549
-2,204
412,345
Foreign currency translation differences
-9,413
-7,214
-16,627
Total net finance income or expenses from insurance contracts
26,674,279
133,570,585
160,244,864
Net finance income or expenses from reinsurance contracts
Accrued interest at locked-in interest rate
558,687
880
559,567
Changes in interest rates and other financial assumptions
-5,282,632
202,685
-5,079,947
Foreign exchange gains/losses
238,612
-2
238,610
Foreign currency translation differences
2,115
4
2,119
Net finance income or expenses from reinsurance contracts
-4,483,218
203,567
-4,279,651
Finance effects from credit risk
-429,681
-
-429,681
Total net finance income or expenses from reinsurance contracts
-4,912,899
203,567
-4,709,332
Total
21,761,380
133,774,152
155,535,532
Recognised in
Amounts recognised in profit or loss
-5,052,118
57,467,142
52,415,024
Amounts recognised in other comprehensive income
26,813,504
76,307,010
103,120,514
Finance income or expenses from insurance contracts
Net finance income or expenses from insurance contracts
26,674,278
133,570,585
160,244,863
Recognised in profit or loss
-5,421,905
57,466,264
52,044,359
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
32,273,622
76,108,852
108,382,474
Effects of exchange rate differences in other comprehensive income
-168,026
2,683
-165,343
Foreign currency translation differences
-9,413
-7,214
-16,627
Net finance income or expenses from reinsurance contracts
-4,912,892
203,567
-4,709,325
Recognised in profit or loss
369,787
878
370,665
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
-5,290,084
202,685
-5,087,399
Effects of exchange rate differences in other comprehensive income
5,290
-
5,290
Foreign currency translation differences
2,115
4
2,119
Sava Re as at 31 December 2023
Non-life
Total
BBA + PAA
C0020
C0040
Net finance income or expenses from insurance contracts
Accrued interest at locked-in interest rate
-6,091,760
-6,091,760
Changes in interest rates and other financial assumptions
-6,255,974
-6,255,974
Foreign exchange gains/losses
6,828,024
6,828,024
Total net finance income or expenses from insurance contracts
-5,519,710
-5,519,710
Net finance income or expenses from reinsurance contracts
Accrued interest at locked-in interest rate
893,761
893,761
Changes in interest rates and other financial assumptions
1,304,240
1,304,240
Foreign exchange gains/losses
-50,670
-50,670
Net finance income or expenses from reinsurance contracts
2,147,330
2,147,330
Finance effects from credit risk
-1,617,714
-1,617,714
Total net finance income or expenses from reinsurance contracts
529,617
529,617
Total
-4,990,094
-4,990,094
Recognised in
Amounts recognised in profit or loss
-38,359
-38,359
Amounts recognised in other comprehensive income
-4,951,735
-4,951,735
Finance income or expenses from insurance contracts
Net finance income or expenses from insurance contracts
-5,519,710
-5,519,710
Recognised in profit or loss
736,264
736,264
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
-6,110,581
-6,110,581
Effects of exchange rate differences in other comprehensive income
-145,394
-145,394
Net finance income or expenses from reinsurance contracts
529,617
529,617
Recognised in profit or loss
-774,623
-774,623
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
1,303,867
1,303,867
Effects of exchange rate differences in other comprehensive income
373
373
356
Sava Re as at 31 December 2022
Non-life
Total
BBA + PAA
Net finance income or expenses from insurance contracts
Accrued interest at locked-in interest rate
-4,904,187
-4,904,187
Changes in interest rates and other financial assumptions
16,477,038
16,477,038
Foreign exchange gains/losses
155,170
155,170
Total net finance income or expenses from insurance contracts
11,728,022
11,728,022
Net finance income or expenses from reinsurance contracts
Accrued interest at locked-in interest rate
506,046
506,046
Changes in interest rates and other financial assumptions
-4,949,437
-4,949,437
Foreign exchange gains/losses
238,612
238,612
Net finance income or expenses from reinsurance contracts
-4,204,779
-4,204,779
Finance effects from credit risk
-478,410
-478,410
Total net finance income or expenses from reinsurance contracts
-4,683,189
-4,683,189
Total
7,044,833
7,044,833
Recognised in
Amounts recognised in profit or loss
-4,482,768
-4,482,768
Amounts recognised in other comprehensive income
11,527,601
11,527,601
Finance income or expenses from insurance contracts
Net finance income or expenses from insurance contracts
11,728,022
11,728,022
Recognised in profit or loss
-4,749,017
-4,749,017
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
16,634,827
16,634,827
Effects of exchange rate differences in other comprehensive income
-157,789
-157,789
Net finance income or expenses from reinsurance contracts
-4,683,189
-4,683,189
Recognised in profit or loss
266,249
266,249
Recognised in other comprehensive income (excluding the effect of exchange rate differences)
-4,954,727
-4,954,727
Effects of exchange rate differences in other comprehensive income
5,290
5,290
16.8.17 Receivables
Receivables by type
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Gross amount
Allowance
Receivables
Gross amount
Allowance
Receivables
Current tax assets
444,616
0
444,616
3,412,855
0
3,412,855
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
4,533,434
-1,148,176
3,385,258
4,466,344
-2,170,209
2,296,135
Receivables from financing
728,130
-166,900
561,230
2,203,462
-163,322
2,040,140
Trade and other receivables
12,422,002
-2,097,132
10,324,870
10,777,938
-2,831,240
7,946,698
Trade and other receivables
17,683,566
-3,412,208
14,271,358
17,447,744
-5,164,771
12,282,973
Total
18,128,182
-3,412,208
14,715,974
20,860,599
-5,164,771
15,695,828
Sava Re
EUR
31 December 2023
31 December 2022
Gross amount
Allowance
Receivables
Gross amount
Allowance
Receivables
Current tax assets
0
0
0
49,594
0
49,594
Receivables from financing
34,478
0
34,478
15,889
-
15,889
Trade and other receivables
504,923
-341,035
163,888
538,374
-341,035
197,340
Trade and other receivables
539,401
-341,035
198,366
554,263
-341,035
213,228
Total
539,401
-341,035
198,366
603,857
-341,035
262,823
357
Receivables from financing mainly relate to payments to the guarantee fund for Green Cards of the Republic of Kosovo, interest on late payment of premiums and advances from policyholders.
Trade and other receivables
EUR
Sava Insurance Group
Sava Re
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Receivables for advances for intangible assets
251,931
73,725
-
-
Short-term trade receivables
7,298,183
5,573,273
124,581
90,041
Short-term receivables due from government and other institutions
350,798
471,883
24,716
81,786
Short-term receivables due from employees
51,503
45,641
1,655
1,515
Receivables arising out of advances for property, plant and equipment
90,492
190
-
-
Other current receivables
2,281,963
1,781,986
12,935
23,998
Trade and other receivables
10,324,870
7,946,698
163,888
197,340
Net receivables ageing analysis
Sava Insurance Group
EUR
Not past due
Past due up to 180 days
Past due from 180 days to 1 year
Past due over 1 year
Total
31 December 2023
Current tax assets
437,109
0
0
7,507
444,616
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
1,551,247
1,774,850
2,887
56,274
3,385,258
Receivables from financing
368,526
174,693
0
18,011
561,230
Trade and other receivables
10,009,539
286,704
8,962
19,665
10,324,870
Trade and other receivables
11,929,312
2,236,247
11,849
93,950
14,271,358
Total
12,366,421
2,236,247
11,849
101,457
14,715,974
Sava Insurance Group
EUR
Not past due
Past due up to 180 days
Past due from 180 days to 1 year
Past due over 1 year
Total
31 December 2022
Current tax assets
3,412,855
0
0
0
3,412,855
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
1,095,158
1,183,718
5,707
11,552
2,296,135
Receivables from financing
1,875,273
146,595
-
18,272
2,040,140
Trade and other receivables
7,397,929
506,257
5,619
36,893
7,946,698
Trade and other receivables
10,368,360
1,836,570
11,326
66,717
12,282,973
Total
13,781,215
1,836,570
11,326
66,717
15,695,828
Sava Re
EUR
Not past due
Total
31 December 2023
Receivables from financing
34,478
34,478
Trade and other receivables
163,888
163,888
Trade and other receivables
198,366
198,366
Total
198,366
198,366
Sava Re
EUR
Not past due
Total
31 December 2022
Current tax assets
49,594
49,594
Receivables from financing
15,889
15,889
Trade and other receivables
197,339
197,339
Trade and other receivables
213,228
213,228
Total
262,822
262,822
358
Movement in allowance for receivables
Sava Insurance Group
EUR
31 December 2022
Additions
Reversals
Write-off
Exchange differences
31 December 2023
31 December 2023
Current tax assets
0
0
0
0
0
0
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
-2,170,209
-51,960
1,066,400
7,419
174
-1,148,176
Receivables from financing
-163,322
-3,608
0
0
30
-166,900
Trade and other receivables
-2,831,240
-40,828
616,826
156,912
1,198
-2,097,132
Trade and other receivables
-5,164,771
-96,396
1,683,226
164,331
1,402
-3,412,208
Total
-5,164,771
-96,396
1,683,226
164,331
1,402
-3,412,208
Sava Insurance Group
EUR
31 December 2021
Additions
Reversals
Write-off
Exchange differences
31 December 2022
31 December 2022
Current tax assets
0
0
0
0
0
0
Other short-term receivables arising out of insurance business (outside the scope of IFRS 17)
-2,198,522
-78,421
103,752
4,298
-1,316
-2,170,209
Receivables from financing
-163,501
0
7
0
172
-163,322
Trade and other receivables
-2,855,983
-92,056
102,021
16,451
-1,673
-2,831,240
Trade and other receivables
-5,218,006
-170,477
205,780
20,749
-2,817
-5,164,771
Total
-5,218,006
-170,477
205,780
20,749
-2,817
-5,164,771
Sava Re
EUR
31 December 2022
31 December 2023
31 December 2023
Trade and other receivables
-341,035
-341,035
Trade and other receivables
-341,035
-341,035
Total
-341,035
-341,035
Sava Re
EUR
31 December 2021
31 December 2022
31 December 2022
Trade and other receivables
-341,035
-341,035
Trade and other receivables
-341,035
-341,035
Total
-341,035
-341,035
16.8.18 Other assets
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Inventories
147,794
155,299
-
-
Other short-term deferred costs (expenses) and accrued revenue
3,894,812
3,869,984
715,114
699,783
Total
4,042,606
4,025,283
715,114
699,783
The Group’s inventories consist of strict record forms and are not subject to pledging.
Other current deferred costs (expenses) and accrued revenue consist of prepaid costs for services (maintenance, development, user fees and electronic media costs).
359
16.8.19 Cash and cash equivalents
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Cash in hand
28,611
24,051
-
-
Cash in bank accounts
29,138,100
56,250,164
9,110,049
15,846,029
Call and overnight deposits, and deposits of up to 3 months
21,393,253
36,949,416
3,150,000
8,080,000
Total
50,559,964
93,223,631
12,260,049
23,926,030
The decrease in cash and cash equivalents is mainly due to the reinvestment in higher yielding asset classes.
16.8.20 Non-current assets held for sale
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Balance as at 1 January
991,803
770,544
Additions
0
352,271
Reclassification
-70,776
428,674
Disposal
-616,927
-559,686
Impairment
-44,451
0
Balance as at 31 December
259,649
991,803
Office premises partially disposed of in 2023 and 2022 were reclassified to non-current assets held for sale in 2022.
16.8.21 Share capital
As at 31 December 2023, the parent’s share capital was divided into 17,219,662 shares (the same as at 31 December 2022). All shares are ordinary registered shares of the same class. Their holders are entitled to participate in the Company’s control and profits (dividends). Each share carries one vote in general meeting and entitles the bearer to a proportionate share of the dividend distribution.
Shares are recorded in the Central Securities Clearing Corporation (KDD) under the POSR ticker symbol.
As at year-end 2023, the Company’s shareholders’ register listed 4,376 shareholders (31 December 2022: 4,316 shareholders). The Company’s shares are listed in the prime market of the Ljubljana Stock Exchange.
16.8.22 Capital reserves
Movement in capital reserves
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
As at 1 January
42,702,320
42,702,320
54,239,757
54,239,757
As at 31 December
42,702,320
42,702,320
54,239,757
54,239,757
360
16.8.23 Profit reserves
Sava Re
31 December 2022
EUR
31 December 2023
31 December 2022
31 December 2023
Legal reserves and reserves provided for by the articles of association
12,176,144
12,150,797
14,986,525
14,986,525
Capital redemption reserve
24,938,709
24,938,709
24,938,709
24,938,709
Credit risk equalisation reserve
-
-
-
-
Catastrophe equalisation reserve
1,225,068
11,225,068
-
10,000,000
Other profit reserves
243,353,745
208,631,017
242,034,225
207,296,824
Total
281,693,666
256,945,591
281,959,459
257,222,058
In 2023, the Company reallocated EUR 10 million from the catastrophe equalisation reserve to other profit reserves.
Profit reserves are retained from previous years’ profits, primarily to offset potential future losses. In accordance with ZGD-1, the management board, when adopting the 2023 annual report, allocated half of the net profit of EUR 24.7 million to “other profit reserves” (2022: EUR 27.9 million).
16.8.24 Treasury shares
As at 31 December 2023, the Company held a total of 1,721,966 own shares (2022: 1,721,966) traded on the Ljubljana Stock Exchange under the ticker symbol “POSR” (accounting for 10% less one share of the issued shares) for a value of EUR 24,938,709 (2022: EUR 24,938,709).
Treasury shares are a contra account of equity. Treasury shares are not pledged.
16.8.25 Accumulated other comprehensive income
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Accumulated other comprehensive income from financial investments
-76,271,988
-120,775,659
-11,603,021
-20,111,066
Accumulated other comprehensive income on insurance contracts
46,400,360
74,431,742
2,089,191
7,248,755
Accumulated other comprehensive income on reinsurance contracts
-194,443
-887,877
-431,371
-1,586,865
Other reserves
1,870,419
2,093,462
178,886
152,447
Total
-28,195,652
-45,138,332
-9,766,315
-14,296,729
The movement in accumulated other comprehensive income from insurance and reinsurance contracts is described in section 16.6 “Transition to the new standards IFRS 17 and IFRS 9” and in note 16.8.16 “Finance income or expenses from (re)insurance contracts”. Other reserves comprise actuarial gains and losses arising from recognising provisions for retirement benefits. Movements are shown in section 16.8.30 “Other provisions”.
16.8.26 Profit or loss for the period
The net consolidated profit for 2023 totalled EUR 64.7 million (2022: EUR 46.9 million).
The Company ended the 2023 financial year with a net profit of EUR 49.5 million (2022: EUR 61.4 million).
361
Earnings or loss per share
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Net profit or loss for the period
64,657,171
46,923,441
49,474,802
61,350,951
Net profit or loss attributable to owners of the controlling company
64,464,804
46,696,181
0
0
Weighted average number of shares outstanding
15,497,696
15,497,696
15,497,696
15,497,696
Earnings or loss per share
4.16
3.01
-
-
The Company’s earnings per share for the financial year 2023 were EUR 3.19 (2022: EUR 3.96).
Comprehensive income per share
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Comprehensive income for the period
81,804,162
1,242,147
54,005,839
50,213,481
Comprehensive income for the owners of the controlling company
81,614,473
1,023,481
0
0
Weighted average number of shares outstanding
15,497,696
15,497,696
15,497,696
15,497,696
Comprehensive income per share
5.27
0.07
-
-
The Company’s comprehensive income per share for the financial year 2023 was EUR 3.48 (2022: EUR 3.24).
The weighted number of shares takes into account the annual average calculated on the basis of monthly averages of ordinary shares less the number of treasury shares. The weighted average number of shares outstanding in the financial period was 15,497,696 and the same as in 2022. The parent does not have potentially dilutive capital instruments, which is why basic earnings per share equal diluted earnings per share.
16.8.27 Retained earnings
The Company’s retained earnings as at 31 December 2023 grew by EUR 8.6 million from 31 December 2022 (2022: increase of EUR 26.4 million).
In 2023, the Company paid out EUR 24,796,314 in dividends (2022: EUR 23,246,544). The distributable profit for 2023 totals EUR 57.5 million (2022: EUR 41.8 million).
Statement of distributable profit or loss
Sava Re
EUR
2023
2022
Net profit or loss for the period
49,474,802.34
55,966,871.71
Profit or loss for the year under applicable standards
49,474,802.34
55,966,871.71
Retained earnings
32,809,208.67
13,807,182.07
Carry-forward of the previous year
16,994,304.32
13,807,182.07
Impact of the transition to the new standards
15,814,904.35
Additions to other reserves as per resolution of the management and supervisory boards
-24,737,401.17
-27,983,435.86
Distributable profit to be allocated by the general meeting
57,546,609.84
41,790,617.92
To shareholders
not yet published
24,796,313.60
To be carried forward to the next year
0
16,994,304.32
The difference of EUR 15,814,904.35 between the profit carried forward from the previous year and the total amount of retained earnings at the end of 2023 represents the impact of the transition to the new accounting standards. Specifically, EUR 6,031,074.26 relates to the impact of the transition due to the adoption of IFRS 17, EUR 4,387,131.59 relates to the impact of the adoption of IFRS 9 and EUR 5,396,698.50 represents the difference between the 2022 net profit determined under the old standards and the 2022 net profit determined under the new standards.
362
The Group recorded the decrease in retained earnings of EUR 2,937,157 in 2023 under “Other” due to the subsequent calculation of the actual tax liability resulting from the transition to the new accounting standards (EUR 53,217) and the subsequent inclusion of the transition of reinsurance contracts relating to the Group companies domiciled outside Slovenia (EUR 2,883,940).
The translation reserve relates to exchange differences arising from the translation or consolidation of the financial statements of subsidiaries. In 2023, translation differences amounted to EUR 3,049,094 (2022: EUR 3,256,083). Translation differences mainly relate to the change in the value of the Serbian dinar and the Macedonian denar and, in 2022, the Croatian kuna.
16.8.28 Non-controlling interests in equity
Non-controlling interests in equity
Sava Insurance Group
EUR
31 December 2023
31 December 2022
Sava Osiguruvanje (MKD)
442,431
462,173
Sava Station
8,742
1,670
TBS Team 24
138,181
68,708
Vita S Holding (MKD)
261,417
0
Total
850,771
532,551
16.8.29 Subordinated liabilities
In October 2019, Sava Re issued subordinated bonds with a scheduled maturity of 2039, ISIN code XS2063427574 and with an early recall option for 7 November 2029.
The total issue size is EUR 75.0 million. Until the early recall option of the bond, the annual interest rate is fixed at 3.75% and the coupon is payable annually. If the issuer does not exercise the early recall option, the annual interest rate after the date of the early recall will be 4.683% over the three-month Euribor, with coupons payable quarterly.
The bond is admitted to trading on the regulated market of the Luxembourg Stock Exchange. As at 31 December 2023, the market price of the bond was 77.717% and the market value EUR 58,702,709 (31 December 2022: price 74.499% and market value EUR 56,290,346). The book value of the bond as at 31 December 2023 was EUR 74,987,535 (31 December 2022: EUR 74,924,356).
The effective interest rate on the bond issued (calculated from the early recall option) is 3.86%.
Sava Re
EUR
31 December 2022
Increase
Decrease
31 December 2023
Subordinated bond
74,924,356
2,875,679
-2,812,500
74,987,535
The increase includes accrued interest until the end of 2023 and amortisation of issuance costs until maturity. The decrease represents interest paid (coupon).
16.8.30 Other provisions
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Provision for severance pay upon retirement
4,660,639
4,244,938
270,203
266,392
Provision for jubilee benefits
2,688,742
2,648,899
149,457
126,248
Other provisions
724,874
1,079,617
-
-
Total
8,074,255
7,973,454
419,660
392,640
Movement in the provision for severance pay upon retirement and jubilee benefits
363
Sava Insurance Group
Sava Re
EUR
Provision for severance pay upon retirement
Provision for jubilee benefits
Total
Provision for severance pay upon retirement
Provision for jubilee benefits
Total
Balance as at 31 December 2022
4,244,938
2,648,899
6,893,837
266,392
126,248
392,640
Interest expense (IS)
135,247
85,644
220,891
8,608
4,164
12,772
Current service cost (IS)
327,284
269,498
596,782
31,569
19,947
51,516
Past service cost (IS)
62,514
22,299
84,813
-
-
0
Payout of benefits (-)
-300,920
-295,900
-596,820
-9,302
-9,716
-19,018
Actuarial losses (IS)
7,160
-41,639
-34,479
-
8,813
8,813
Actuarial losses (SFP)
184,499
-
184,499
-27,064
-
-27,064
Additions – acquisition of subsidiary
-
-
0
-
-
0
Exchange differences
-83
-59
-142
-
-
0
Balance as at 31 December 2023
4,660,639
2,688,742
7,349,381
270,203
149,457
419,660
Sava Insurance Group
Sava Re
EUR
Provision for severance pay upon retirement
Provision for jubilee benefits
Total
Provision for severance pay upon retirement
Provision for jubilee benefits
Total
Balance as at 31 December 2021
4,954,165
2,976,448
7,930,616
295,760
126,105
421,864
Interest expense (IS 137)
120,050
67,432
187,482
-1,730
-855
-2,585
Current service cost (IS)
303,743
255,154
558,897
28,266
15,495
43,761
Past service cost (IS)
3,736
19,867
23,603
-
14,064
14,064
Payout of benefits (-)
-171,197
-260,007
-431,204
-
-11,835
-11,835
Actuarial losses (IS)
-4,650
-409,871
-414,521
-
-16,726
-16,726
Actuarial losses (SFP 138)
-960,947
-
-960,947
-55,904
-
-55,904
Exchange differences
38
-124
-86
-
-
0
Balance as at 31 December 2022
4,244,938
2,648,899
6,893,837
266,392
126,248
392,640
The main assumptions used in the calculation of provisions for jubilee benefits and severance pay upon retirement are as follows: The interest rate curves used for discounting are those published by EIOPA for the calculation of capital adequacy. The expected increase in salaries and jubilee benefits is calculated using real growth based on historical data for individual companies (Sava Re: 0.8%) and long-term inflation of 2.5%. The expected early departure rates used vary by age group and are based on the historical departure rates of each company (Sava Re: 3.1% under 35 years, 3.9% between 35 and 45 years, 5.3% over 45 years). Expected mortality is determined on the basis of the population mortality tables of the country of incorporation of each Group company.
Below we provide a sensitivity analysis of the provision for severance pay upon retirement and the provision for jubilee benefits.
137 Income statement or IS for short.
138 Statement of financial position or SFP for short.
364
Sava Insurance Group
Provision for severance pay upon retirement
Provision for jubilee benefits
Impact on the level of provisions (EUR)
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Decrease in discount rate of 1%
501,220
456,051
218,070
214,049
Increase in discount rate of 1%
-424,964
-387,196
-190,105
-186,735
Decrease in real income growth of 0.5%
-222,041
-196,066
-85,735
-85,090
Increase in real income growth of 0.5%
238,993
210,276
90,870
89,990
Decrease in staff turnover of 10%
170,790
152,777
79,575
77,227
Increase in staff turnover of 10%
-160,718
-144,684
-75,777
-73,859
Decrease in mortality rate of 10%
33,696
30,399
11,570
11,564
Increase in mortality rate of 10%
-33,359
-30,099
-11,480
-11,469
Sava Re
Provision for severance pay upon retirement
Provision for jubilee benefits
Impact on the level of provisions (EUR)
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Decrease in discount rate of 1%
32,755
32,369
11,520
9,474
Increase in discount rate of 1%
-27,872
-27,498
-10,083
-8,314
Decrease in real income growth of 0.5%
-14,808
-14,738
0
0
Increase in real income growth of 0.5%
16,160
16,032
0
0
Decrease in staff turnover of 10%
17,805
16,194
5,422
4,405
Increase in staff turnover of 10%
-16,461
-15,037
-5,113
-4,168
Decrease in mortality rate of 10%
2,192
2,137
351
290
Increase in mortality rate of 10%
-2,168
-2,115
-349
-289
Sava Insurance Group
EUR
31 December 2022
Additions
Uses and reversals
Exchange differences
31 December 2023
Other provisions
1,079,617
144,103
-498,766
-80
724,874
Total
1,079,617
144,103
-498,766
-80
724,874
Sava Insurance Group
EUR
31 December 2021
Additions
Uses and reversals
Exchange differences
31 December 2022
Other provisions
982,884
407,978
-310,088
-1,157
1,079,617
Total
982,884
407,978
-310,088
-1,157
1,079,617
Other provisions include provisions for the guarantee fund.
16.8.31 Other financial liabilities
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Other financial liabilities
737,085
548,576
-
-
Other financial liabilities relate to a loan payable to a subsidiary in Serbia with a maturity of up to one year.
365
16.8.32 Current tax liabilities
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Current income tax liabilities
9,930,830
1,554,992
6,319,991
45,414
Current tax liabilities recognised in accordance with tax legislation at the end of the financial year are settled by the Group companies within the statutory period of less than one year.
16.8.33 Other liabilities
Other liabilities by maturity
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Other liabilities
30,896,035
23,044,216
2,898,366
2,266,787
Short-term provisions (deferred income and accrued expenses)
12,873,471
10,598,356
1,951,655
1,888,906
Other liabilities
43,769,505
33,642,572
4,850,021
4,155,693
Other liabilities include liabilities that are settled by the companies within the financial year, so all such liabilities are classified as liabilities with a maturity of up to one year.
Other liabilities and short-term provisions (deferred income and accrued expenses) are unsecured.
Other liabilities
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Current liabilities due to employees
4,530,558
4,107,379
685,475
637,853
Diverse other current liabilities for insurance business outside the scope of IFRS 17
11,405,144
10,376,366
0
252,356
Short-term trade liabilities
14,620,197
8,533,190
1,900,391
1,370,173
Diverse other current liabilities
340,136
27,281
312,500
6,405
Total
30,896,035
23,044,216
2,898,365
2,266,788
Diverse other current liabilities arising from insurance business outside IFRS 17 relate mainly to payables to insurance intermediaries for commissions.
Diverse other current liabilities are liabilities arising from the settlement of financial investments.
Current accrued costs (expenses) and deferred revenue
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Accrued costs and expenses due to Group companies
87,433
3,610
-
-
Accrued costs and expenses due to other companies
9,448,306
8,153,827
1,569,772
1,586,407
Other accrued costs (expenses) and deferred revenue
3,337,732
2,440,919
381,884
302,499
Total
12,873,471
10,598,356
1,951,655
1,888,906
Short-term provisions include accrued charges for unused vacation and severance payments to employees.
366
Other accrued costs (expenses) and deferred revenue consist mainly of provisions for employee bonuses and the share of premiums paid into a damage prevention fund under the Montenegrin Insurance Act.
Change in short-term provisions
Sava Insurance Group
EUR
31 December 2022
Additions
Uses
Exchange differences
31 December 2023
Short-term accrued expenses
8,157,437
33,961,425
-32,582,797
-326
9,535,739
Other accrued costs (expenses) and deferred revenue
2,440,920
3,039,028
-2,141,058
-1,158
3,337,732
Total
10,598,357
37,000,453
-34,723,855
-1,484
12,873,471
Sava Insurance Group
EUR
31 December 2021
Additions
Uses
Reversals
Exchange differences
31 December 2022
Short-term accrued expenses
7,585,339
28,386,811
-27,790,521
-23,913
-279
8,157,437
Other accrued costs (expenses) and deferred revenue
3,568,468
2,589,947
-3,717,503
0
8
2,440,920
Total
11,153,807
30,976,758
-31,508,024
-23,913
-271
10,598,356
Sava Re
EUR
31 December 2022
Additions
Uses
31 December 2023
Short-term accrued expenses
1,586,407
1,874,080
-1,890,715
1,569,772
Other accrued costs (expenses) and deferred revenue
302,499
79,385
0
381,884
Total
1,888,906
1,953,465
-1,890,715
1,951,655
Sava Re
EUR
31 December 2021
Additions
Uses
31 December 2022
Short-term accrued expenses
1,733,454
1,266,332
-1,413,379
1,586,407
Other accrued costs (expenses) and deferred revenue
251,207
51,292
0
302,499
Total
1,984,661
1,317,624
-1,413,379
1,888,906
367
16.8.34 Fair values of assets and liabilities
Financial assets by level of the fair value hierarchy
Sava Insurance Group
EUR
31 December 2023
Carrying amount
Fair value
Difference between FV and CA
Level 1
Level 2
Level 3
Total fair value
Investments measured at fair value
1,936,229,467
1,746,868,840
117,886,785
71,473,842
1,936,229,467
0
Investments measured at fair value through profit or loss
660,082,422
569,956,001
18,652,579
71,473,842
660,082,422
0
Mandatorily measured at fair value through profit or loss, not held for trading
660,082,422
569,956,001
18,652,579
71,473,842
660,082,422
0
Debt instruments
19,701,111
5,568,931
14,132,180
0
19,701,111
0
Equity instruments
569,153,261
564,387,070
4,520,399
245,792
569,153,261
0
Investments in infrastructure funds
57,339,858
0
0
57,339,858
57,339,858
0
Investments in real-estate funds
13,888,192
0
0
13,888,192
13,888,192
0
Investments measured at fair value through other comprehensive income
1,276,147,045
1,176,912,839
99,234,206
0
1,276,147,045
0
Debt instruments
1,260,177,155
1,160,942,949
99,234,206
0
1,260,177,155
0
Equity instruments
15,969,890
15,969,890
0
0
15,969,890
0
Investments not measured at fair value
76,303,166
39,689,221
8,640,004
26,896,788
75,226,013
-1,077,153
Investments measured at amortised cost
76,303,166
39,689,221
8,640,004
26,896,788
75,226,013
-1,077,153
Debt instruments (bonds)
49,932,856
39,689,221
8,640,004
0
48,329,225
-1,603,631
Deposits and CDs
25,616,171
0
0
26,105,652
26,105,652
489,481
Loans granted
754,139
0
0
791,136
791,136
36,997
Sava Insurance Group
EUR
31 December 2022
Carrying amount
Fair value
Difference between FV and CA
Level 1
Level 2
Level 3
Total fair value
Investments measured at fair value
1,711,703,795
1,507,454,812
126,429,460
77,819,523
1,711,703,795
0
Investments measured at fair value through profit or loss
556,301,888
464,243,069
15,096,866
76,961,953
556,301,888
0
Mandatorily measured at fair value through profit or loss, not held for trading
556,301,888
464,243,069
15,096,866
76,961,953
556,301,888
0
Debt instruments
20,729,025
5,590,271
8,787,606
6,351,148
20,729,025
0
Equity instruments
465,219,427
458,652,798
6,309,260
257,369
465,219,427
0
Investments in infrastructure funds
53,856,375
0
0
53,856,375
53,856,375
0
Investments in real-estate funds
16,497,061
0
0
16,497,061
16,497,061
0
Investments measured at fair value through other comprehensive income
1,155,401,907
1,043,211,743
111,332,594
857,570
1,155,401,907
0
Debt instruments
1,140,474,230
1,028,284,066
111,332,594
857,570
1,140,474,230
0
Equity instruments
14,927,677
14,927,677
0
0
14,927,677
0
Investments not measured at fair value
64,428,280
35,495,150
6,379,072
20,525,245
62,399,467
-2,028,813
Investments measured at amortised cost
64,428,280
35,495,150
6,379,072
20,525,245
62,399,467
-2,028,813
Debt instruments (bonds)
44,385,198
35,495,150
6,379,072
0
41,874,222
-2,510,976
Deposits and CDs
18,848,261
0
0
19,276,121
19,276,121
427,860
Loans granted
1,194,821
0
0
1,249,124
1,249,124
54,303
Sava Re
EUR
31 December 2023
Carrying amount
Fair value
Difference between FV and CA
Level 1
Level 2
Level 3
Total fair value
Investments measured at fair value
348,572,420
290,130,414
33,473,129
24,968,877
348,572,420
0
Investments measured at fair value through profit or loss
37,286,800
5,030,865
7,287,059
24,968,877
37,286,800
0
Mandatorily measured at fair value through profit or loss, not held for trading
37,286,800
5,030,865
7,287,059
24,968,877
37,286,800
0
Debt instruments
4,320,636
0
4,320,636
0
4,320,636
0
Equity instruments
7,997,287
5,030,865
2,966,422
0
7,997,287
0
Investments in infrastructure funds
21,084,448
0
0
21,084,448
21,084,448
0
Investments in real-estate funds
3,884,428
0
0
3,884,428
3,884,428
0
Investments measured at fair value through other
comprehensive income
311,285,620
285,099,550
26,186,070
0
311,285,620
0
Debt instruments
311,285,620
285,099,550
26,186,070
0
311,285,620
0
Investments not measured at fair value
5,811,776
2,167,835
0
3,785,768
5,953,603
141,827
Investments measured at amortised cost
5,811,776
2,167,835
0
3,785,768
5,953,603
141,827
Debt instruments (bonds)
2,075,525
2,167,835
0
0
2,167,835
92,311
Deposits and CDs
1,021,347
0
0
1,041,806
1,041,806
20,458
Loans granted
2,714,904
0
0
2,743,962
2,743,962
29,058
368
Sava Re
EUR
31 December 2022
Carrying amount
Fair value
Difference between FV and CA
Level 1
Level 2
Level 3
Total fair value
Investments measured at fair value
320,559,011
261,449,355
32,265,422
26,844,235
320,559,012
0
Investments measured at fair value through profit or loss
39,718,676
5,856,230
7,441,495
26,420,951
39,718,676
0
Mandatorily measured at fair value through profit or loss, not held for trading
39,718,676
5,856,230
7,441,495
26,420,951
39,718,676
0
Debt instruments
5,276,003
0
2,283,137
2,992,866
5,276,003
0
Equity instruments
11,014,588
5,856,230
5,158,358
0
11,014,588
0
Investments in infrastructure funds
18,843,871
0
0
18,843,871
18,843,871
0
Investments in real-estate funds
4,584,214
0
0
4,584,214
4,584,214
0
Investments measured at fair value through other
comprehensive income
280,840,335
255,593,125
24,823,927
423,283
280,840,335
0
Debt instruments
280,840,335
255,593,125
24,823,927
423,283
280,840,335
0
Investments not measured at fair value
3,871,964
2,216,867
0
1,840,393
4,057,260
185,296
Investments measured at amortised cost
3,871,964
2,216,867
0
1,840,393
4,057,260
185,296
Debt instruments (bonds)
2,075,272
2,216,867
0
0
2,216,867
141,595
Loans granted
1,796,693
0
0
1,840,393
1,840,393
43,700
As at 31 December 2023, a large proportion of the debt securities portfolio is valued at the CBBT bid price, which represents the unadjusted quoted price and thus meets the criteria for a tier 1 classification. Mutual funds and listed equity securities that meet the criteria of an active market, as well as debt securities valued at BVAL bid prices that meet the relevant price quality criteria, are also classified into this level.
As at 31 December 2023, level 1 investments represented 88.8% (31 December 2022: 87%) of the value of financial investments measured at fair value.
Debt securities for which no CBBT bid price exists at the classification date, but a BVAL bid price of lower quality is available, are classified into Level 2. We classify into the same Level investments valued based on an internal model that uses directly and indirectly observable market inputs, such as the risk-free interest rate curve, yield of similar financial instruments, and credit and liquidity risk premiums. Equity securities valued using stock exchange prices that meet the criteria for a non-functioning market are also classified into this Level.
The Group classifies into Level 3 shares measured at cost, loans granted measured at amortised cost and investments in alternative funds, such as real-estate funds, infrastructure funds, private debt funds, private equity funds and the like. There are no market prices available for such investments; therefore, valuation based on available market data is not possible.
The Group classifies into Level 3 its investments in alternative funds, such as real-estate funds, infrastructure funds, private debt funds, private equity funds and similar. Alternative funds are valued by fund managers in the form of fund unit values or as the value of invested assets, being the best approximation of fair value. Assets are valued based on material non-public information on assets invested in funds. The Group has only limited access to input data as used by fund managers, which is why the Group does not carry out own valuations nor is it possible for the Group to run sensitivity analyses.
In order to value fund assets, managers of such funds generally use methods that comply with International Private Equity and Venture Capital Valuation standards, such as discounting of cash flows and the multiples method.
Valuation techniques for all items described above are defined in accounting policies. The method is described for investment property in section 16.4.12 “Investment property”, for investments in subsidiaries and associates in section 16.4.13 “Investments in subsidiaries and associates” and for financial investments in section 16.4.14 “Financial investments”.
369
The fair value of the Company’s investment property as at 31 December 2023 was EUR 10,007,145 (2022: EUR 9,997,159), that of the Group at EUR 28,591,968 (2022: 25,680,767). The Company and the Group classify investment property as level 3 assets.
Movements in level 3 financial assets measured at fair value
Sava Insurance Group
EUR
Debt instruments
Equity instruments
Investments in infrastructure funds
Investments in real-estate funds
31 December 2023
31 December 2023
31 December 2023
31 December 2023
Opening balance
7,208,718
257,367
53,856,375
16,497,061
Exchange differences
1
25
2
-1
Additions
0
0
4,230,418
0
Disposals
-587,952
-11,600
-2,004,341
0
Maturity
-1,313,725
0
0
0
Revaluation to fair value
696,363
0
1,257,404
-2,608,868
Reclassification into other levels (from L3 to L2 or L1)
-6,003,405
0
0
0
Closing balance
0
245,792
57,339,858
13,888,192
Income
0
750
2,046,833
287,511
Unrealised gains/losses
23,483
0
1,567,201
-2,192,884
Sava Re
EUR
Debt instruments
Equity instruments
Investments in infrastructure funds
Investments in real-estate funds
31 December 2023
31 December 2023
31 December 2023
31 December 2023
Opening balance
3,416,149
0
18,843,871
4,584,214
Exchange differences
1
-1
Additions
0
0
2,567,159
0
Maturity
-1,313,725
0
-711,560
0
Revaluation to fair value
297,701
0
384,977
-699,785
Reclassification into other levels (from L3 to L2 or L1)
-2,400,124
0
0
0
Closing balance
0
0
21,084,449
3,884,428
Income
0
0
921,507
86,504
Unrealised gains/losses
0
0
606,629
-699,785
370
Reclassification of assets and financial liabilities between levels
Sava Insurance Group
EUR
Level 1
Level 2
Level 3
31 December 2023
Investments measured at fair value through profit or loss
768,164
4,303,737
-5,071,901
Mandatorily measured at fair value through profit or loss, not held for trading
768,164
4,303,737
-5,071,901
Debt instruments
195,614
4,876,287
-5,071,901
Debt securities reclassified from level 2 into level 1
195,614
-195,614
0
Debt securities reclassified from level 3 into level 2
5,071,901
-5,071,901
Equity instruments
572,550
-572,550
0
Equity instruments reclassified from level 2 into level 1
572,550
-572,550
0
Investments measured at fair value through other comprehensive income
5,979,413
-5,047,910
-931,503
Debt instruments
5,979,413
-5,047,910
-931,503
Reclassification from level 1 into level 2
-2,526,398
2,526,398
0
Reclassification from level 2 into level 1
8,505,811
-8,505,811
0
Reclassification from level 3 into level 2
0
931,503
-931,503
The Group adopted a new fair value hierarchy methodology for investments with effect from 1 October 2023. The data presented are based on the new methodology for the comparative period. The differences from the previous classification presented in the 2022 annual report are due to a transfer of EUR 2.5 million of investments from level 1 into level 2, a transfer of EUR 9.3 million from level 2 into level 1 and a transfer of EUR 6.0 million of investments from level 3 into level 2.
Sava Re
EUR
Level 1
Level 2
Level 3
31 December 2023
Investments measured at fair value through profit or loss
572,550
1,341,375
-1,913,925
Mandatorily measured at fair value through profit or loss, not held for trading
572,550
1,341,375
-1,913,925
Debt instruments
0
1,913,925
-1,913,925
Debt securities reclassified from level 3 into level 2
0
1,913,925
-1,913,925
Equity instruments
572,550
-572,550
0
Equity instruments reclassified from level 2 into level 1
572,550
-572,550
0
Investments measured at fair value through other comprehensive income
-118,777
604,976
-486,199
Debt instruments
-118,777
604,976
-486,199
Reclassification from level 1 into level 2
-118,777
118,777
0
Reclassification from level 3 into level 2
0
486,199
-486,199
The Company adopted a new fair value hierarchy methodology for investments with effect from 1 October 2023. The data presented are based on the new methodology for the comparative period. The differences from the previous classification presented in the 2022 annual report are due to a transfer of EUR 0.1 million of investments from level 1 into level 2, a transfer of EUR 0.6 million from level 2 into level 1 and a transfer of EUR 2.4 million of investments from level 3 into level 2.
16.8.35 Insurance revenue and insurance service expenses
Sava Insurance Group
31 December 2023
31 December 2022
EUR
Non-life
Life
Total
Non-life
Life
Total
Insurance revenue
-630,737,533
-66,825,278
-697,562,811
-547,182,815
-61,804,978
-608,987,793
Amounts recoverable from insurance contracts ceded to reinsurers
42,824,599
247,178
43,071,777
38,433,905
305,005
38,738,910
Total insurance service expenses
611,082,703
46,042,815
657,125,518
495,847,875
41,662,675
537,510,550
Total amounts recovered from reinsurers
-85,877,898
-234,348
-86,112,246
-43,159,652
-175,432
-43,335,084
371
16.8.35.1 Analysis of insurance revenue (contracts for which the PAA as not been applied)
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
107,140,544
Expected insurance claims, benefits and expenses
59,831,277
Release of the risk adjustment for non-financial risk for risk expired
9,989,677
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
27,461,070
Other amounts (e.g. experience adjustments for premium receipts)
9,858,520
Refund of insurance acquisition cash flows
10,785,511
Total
117,926,055
Insurance contracts measured using the premium allocation approach
512,811,476
Insurance revenue
630,737,531
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
96,720,351
Expected insurance claims, benefits and expenses
58,325,598
Release of the risk adjustment for non-financial risk for risk expired
9,827,462
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
22,728,114
Other amounts (e.g. experience adjustments for premium receipts)
5,839,177
Refund of insurance acquisition cash flows
9,128,324
Total
105,848,675
Insurance contracts measured using the premium allocation approach
441,334,138
Insurance revenue
547,182,813
Sava Insurance Group as at 31 December 2023 – life
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
57,267,502
Expected insurance claims, benefits and expenses
35,847,950
Release of the risk adjustment for non-financial risk for risk expired
4,468,442
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
17,409,416
Other amounts (e.g. experience adjustments for premium receipts)
-458,306
Refund of insurance acquisition cash flows
9,557,779
Total
66,825,281
Insurance contracts measured using the premium allocation approach
Insurance revenue
66,825,281
Sava Insurance Group as at 31 December 2022 – life
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
53,070,176
Expected insurance claims, benefits and expenses
34,198,162
Release of the risk adjustment for non-financial risk for risk expired
3,546,349
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
15,719,413
Other amounts (e.g. experience adjustments for premium receipts)
-393,748
Refund of insurance acquisition cash flows
8,734,799
Total
61,804,975
Insurance contracts measured using the premium allocation approach
Insurance revenue
61,804,975
372
Sava Re as at 31 December 2023
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
148,942,159
Expected insurance claims, benefits and expenses
90,884,369
Release of the risk adjustment for non-financial risk for risk expired
14,358,334
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
43,583,041
Other amounts (e.g. experience adjustments for premium receipts)
116,415
Refund of insurance acquisition cash flows
8,889,287
Total
157,831,445
Insurance contracts measured using the premium allocation approach
9,972,681
Insurance revenue
167,804,126
Sava Re as at 31 December 2022
EUR
Total
Insurance contracts not measured using the premium allocation approach (PAA)
Amounts relating to changes in the liability for remaining coverage
136,062,288
Expected insurance claims, benefits and expenses
86,444,668
Release of the risk adjustment for non-financial risk for risk expired
13,790,481
Amount of the contractual service margin recognised in profit or loss to reflect the transfer of services
40,777,966
Other amounts (e.g. experience adjustments for premium receipts)
-4,950,828
Refund of insurance acquisition cash flows
7,250,465
Total
143,312,753
Insurance contracts measured using the premium allocation approach
7,447,982
Insurance revenue
150,760,734
16.8.35.2 Insurance service expenses
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total
Insurance service expenses
-76,067,916
-371,851,682
-447,919,598
Insurance service operating expenses
-14,689,617
-148,473,487
-163,163,104
Acquisition costs
-10,785,511
-80,522,287
-91,307,798
Losses on onerous contracts
303,334
-2,814,659
-2,511,325
Administrative expenses
-4,207,440
-65,136,541
-69,343,981
Insurance service expenses
-90,757,533
-520,325,169
-611,082,702
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total
Insurance service expenses
-62,918,772
-292,374,019
-355,292,791
Insurance service operating expenses
-13,166,027
-127,389,059
-140,555,086
Acquisition costs
-9,128,324
-70,883,140
-80,011,464
Losses on onerous contracts
-61,844
-2,061,085
-2,122,929
Administrative expenses
-3,975,859
-54,444,834
-58,420,693
Insurance service expenses
-76,084,799
-419,763,078
-495,847,877
373
Sava Insurance Group as at 31 December 2023 – life
EUR
Insurance contracts not measured using the PAA
Total
Insurance service expenses
-17,554,556
-17,554,556
Insurance service operating expenses
-28,488,257
-28,488,257
Acquisition costs
-9,557,779
-9,557,779
Losses on onerous contracts
424,984
424,984
Administrative expenses
-19,355,462
-19,355,462
Insurance service expenses
-46,042,813
-46,042,813
Sava Insurance Group as at 31 December 2022 – life
EUR
Insurance contracts not measured using the PAA
Total
Insurance service expenses
-13,016,982
-13,016,982
Insurance service operating expenses
-28,645,689
-28,645,689
Acquisition costs
-8,734,799
-8,734,799
Losses on onerous contracts
-2,046,810
-2,046,810
Administrative expenses
-17,864,080
-17,864,080
Insurance service expenses
-41,662,671
-41,662,671
Sava Re as at 31 December 2023
EUR
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total
Insurance service expenses
-114,069,334
-48,638,961
-162,708,295
Insurance service operating expenses
-11,417,291
-365,332
-11,782,623
Acquisition costs
-8,889,287
-182,343
-9,071,629
Losses on onerous contracts
245,208
-
245,208
Administrative expenses
-2,773,212
-182,989
-2,956,202
Insurance service expenses
-125,486,624
-49,004,293
-174,490,918
Sava Re as at 31 December 2022
EUR
Insurance contracts not measured using the PAA
Insurance contracts measured using the PAA
Total
Insurance service expenses
-116,726,011
-6,123,817
-122,849,828
Insurance service operating expenses
-9,447,821
-225,680
-9,673,501
Acquisition costs
-7,250,465
-51,917
-7,302,382
Losses on onerous contracts
318,020
-
318,020
Administrative expenses
-2,515,376
-173,764
-2,689,139
Insurance service expenses
-126,173,831
-6,349,498
-132,523,329
16.8.36 Reinsurance revenue and reinsurance service expenses
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-42,824,599
Contracts not measured using the premium allocation approach (PAA)
-36,248,168
Contracts measured using the premium allocation approach (PAA)
-6,576,428
Reinsurers’ share of claims, of which:
85,877,893
Contracts not measured using the premium allocation approach (PAA)
77,909,179
Contracts measured using the premium allocation approach (PAA)
7,968,712
Net reinsurance revenue / service expenses
43,053,294
374
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-38,433,905
Contracts not measured using the premium allocation approach (PAA)
-34,344,981
Contracts measured using the premium allocation approach (PAA)
-4,088,926
Reinsurers’ share of claims, of which:
43,159,658
Contracts not measured using the premium allocation approach (PAA)
41,012,356
Contracts measured using the premium allocation approach (PAA)
2,147,304
Net reinsurance revenue / service expenses
4,725,753
Sava Insurance Group as at 31 December 2023 – life
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-247,179
Contracts not measured using the premium allocation approach (PAA)
-247,180
Reinsurers’ share of claims, of which:
234,348
Contracts not measured using the premium allocation approach (PAA)
234,349
Net reinsurance revenue / service expenses
-12,831
Sava Insurance Group as at 31 December 2022 – life
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-305,005
Contracts not measured using the premium allocation approach (PAA)
-305,007
Reinsurers’ share of claims, of which:
175,432
Contracts not measured using the premium allocation approach (PAA)
175,431
Net reinsurance revenue / service expenses
-129,573
Sava Re as at 31 December 2023
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-30,235,703
Contracts not measured using the premium allocation approach (PAA)
-30,235,703
Reinsurers’ share of claims, of which:
73,904,850
Contracts not measured using the premium allocation approach (PAA)
73,904,850
Net reinsurance revenue / service expenses
43,669,147
Sava Re as at 31 December 2022
EUR
Total
Reinsurers’ share of insurance revenue, of which:
-29,572,834
Contracts not measured using the premium allocation approach (PAA)
-29,572,834
Reinsurers’ share of claims, of which:
39,440,417
Contracts not measured using the premium allocation approach (PAA)
39,440,417
Net reinsurance revenue / service expenses
9,867,583
Sava Insurance Group as at 31 December 2023 – non-life
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-18,608,747
Changes in the risk adjustment for non-financial risk
-4,805,562
Finance income/expenses recognised in profit or loss
-19,410,291
Allocation of reinsurers’ shares of premiums
-42,824,600
Reinsurers’ share of claims and other insurance expenses in the period
89,494,581
Changes in amounts recoverable arising from changes in liability for incurred claims
-3,656,185
Changes in fulfilment cash flows which relate to onerous underlying contracts
39,496
Reinsurers’ shares of insurance service expenses
85,877,892
Net reinsurance revenue / service expenses
43,053,292
375
Sava Insurance Group as at 31 December 2022 – non-life
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-16,925,397
Changes in the risk adjustment for non-financial risk
-4,008,143
Finance income/expenses recognised in profit or loss
-17,500,365
Allocation of reinsurers’ shares of premiums
-38,433,905
Reinsurers’ share of claims and other insurance expenses in the period
44,864,842
Changes in amounts recoverable arising from changes in liability for incurred claims
-1,660,252
Changes in fulfilment cash flows which relate to onerous underlying contracts
-44,935
Reinsurers’ shares of insurance service expenses
43,159,655
Net reinsurance revenue / service expenses
4,725,750
Sava Insurance Group as at 31 December 2023 – life
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-138,846
Changes in the risk adjustment for non-financial risk
4,148
Finance income/expenses recognised in profit or loss
-112,479
Allocation of reinsurers’ shares of premiums
-247,177
Reinsurers’ share of claims and other insurance expenses in the period
124,348
Changes in amounts recoverable arising from changes in liability for incurred claims
110,000
Reinsurers’ shares of insurance service expenses
234,348
Net reinsurance revenue / service expenses
-12,829
Sava Insurance Group as at 31 December 2022 – life
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-173,151
Changes in the risk adjustment for non-financial risk
-3,087
Finance income/expenses recognised in profit or loss
-128,766
Allocation of reinsurers’ shares of premiums
-305,004
Reinsurers’ share of claims and other insurance expenses in the period
147,432
Changes in amounts recoverable arising from changes in liability for incurred claims
27,999
Changes in fulfilment cash flows which relate to onerous underlying contracts
-
Reinsurers’ shares of insurance service expenses
175,431
Net reinsurance revenue / service expenses
-129,573
Sava Re as at 31 December 2023
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-9,717,955
Changes in the risk adjustment for non-financial risk
-4,227,733
Net loss/gain recognised in profit or loss
-16,290,016
Allocation of reinsurers’ shares of premiums
-30,235,703
Reinsurers’ share of claims and other insurance expenses in the period
77,958,868
Changes in amounts recoverable arising from changes in liability for incurred claims
-4,054,018
Reinsurers’ shares of insurance service expenses
73,904,850
Net reinsurance revenue / service expenses
43,669,147
376
Sava Re as at 31 December 2022
EUR
Total
Reinsurers’ shares of insurance revenue
Expected recovery for insurance service expenses incurred in the period
-10,522,803
Changes in the risk adjustment for non-financial risk
-3,419,272
Net income/expenses recognised in profit or loss
-15,630,759
Allocation of reinsurers’ shares of premiums
-29,572,834
Reinsurers’ share of claims and other insurance expenses in the period
40,069,392
Changes in amounts recoverable arising from changes in liability for incurred claims
-628,975
Reinsurers’ shares of insurance service expenses
39,440,417
Net reinsurance revenue / service expenses
9,867,583
377
16.8.37 Investment income and expenses
Investment income by IFRS categories
Investment income by IFRS categories for 2023
Sava Insurance Group
EUR
Interest income
Change in fair value of FVTPL investments
Gains on disposal of FVTPL investments
Gains on disposal of investments of other IFRS categories
Income from dividends and shares of other investments
Exchange gains
Change in expected credit losses (ECL)
Diverse other income
Total
Investments measured at amortised cost
2,640,198
0
0
0
0
1,518,696
524,179
0
4,683,073
Debt instruments
1,718,644
0
0
0
0
30,787
15,999
0
1,765,430
Cash and cash equivalents
119,718
0
0
0
0
1,452,543
0
0
1,572,261
Deposits and CDs
738,694
0
0
0
0
35,366
484,259
0
1,258,319
Loans
63,142
0
0
0
0
0
23,921
0
87,063
Investments measured at fair value through profit or loss
809,053
106,098,756
487,591
0
434,362
977,080
5,194
2,340,151
111,152,187
Mandatorily measured at fair value through profit or loss, not held for trading
809,053
106,098,756
487,591
0
434,362
977,080
5,194
2,340,151
111,152,187
Debt instruments
809,053
1,852,682
1,293
0
0
0
5,194
0
2,668,222
Equity instruments
0
104,246,074
486,298
0
434,362
977,080
0
0
106,143,814
Investments in infrastructure funds
0
0
0
0
0
0
0
2,046,833
2,046,833
Investments in real-estate funds
0
0
0
0
0
0
0
293,318
293,318
Investments measured at fair value through other comprehensive income
18,465,996
0
0
67,299
664,699
6,768,940
555,405
56,855
26,579,194
Debt instruments
18,465,996
0
0
67,299
0
6,768,940
555,405
7,268
25,864,908
Equity instruments
0
0
0
0
664,699
0
0
49,577
714,276
Other investments
0
0
0
0
0
0
0
10
10
Investment property
0
0
0
0
0
0
0
1,444,938
1,444,938
Investment property
0
0
0
0
0
0
0
1,444,938
1,444,938
Total investment income
21,915,247
106,098,756
487,591
67,299
1,099,061
9,264,716
1,084,778
3,841,944
143,859,392
378
Investment income by IFRS categories for 2022
Sava Insurance Group
EUR
Interest income
Change in fair value of FVTPL investments
Gains on disposal of FVTPL investments
Gains on disposal of investments of other IFRS categories
Income from dividends and shares of other investments
Exchange gains
Change in expected credit losses (ECL)
Diverse other income
Total
Investments measured at amortised cost
2,050,389
0
0
0
0
2,135,335
437,580
0
4,623,304
Debt instruments
1,660,574
0
0
0
0
30,443
23,995
0
1,715,012
Cash and cash equivalents
17,149
0
0
0
0
2,099,670
0
0
2,116,819
Deposits and CDs
305,831
0
0
0
0
5,153
369,269
0
680,253
Loans
66,835
0
0
0
0
69
44,316
0
111,220
Investments measured at fair value through profit or loss
1,001,716
80,421,855
624,295
0
1,164,434
1,655,395
2,940
2,163,885
87,034,520
Mandatorily measured at fair value through profit or loss, not held for trading
1,001,716
80,421,855
624,295
0
1,164,434
1,655,395
2,940
2,163,885
87,034,520
Debt instruments
1,001,716
-128,249
164,578
0
0
8,425
2,940
0
1,049,410
Equity instruments
0
80,388,284
459,717
0
1,164,434
1,646,970
0
45,469
83,704,874
Investments in infrastructure funds
0
0
0
0
0
0
0
1,925,727
1,925,727
Investments in real-estate funds
0
161,820
0
0
0
0
0
192,688
354,508
Investments measured at fair value through other comprehensive income
13,789,533
0
0
1,307,558
152,871
12,474,113
973,087
191,230
28,888,392
Debt instruments
13,789,533
0
0
1,307,558
0
12,474,113
973,087
147,791
28,692,082
Equity instruments
0
0
0
0
152,871
0
0
49,263
202,134
Other investments
0
0
0
0
0
0
0
-5,824
-5,824
Investment property
0
0
0
0
0
0
0
1,518,594
1,518,594
Investment property
0
0
0
0
0
0
0
1,518,594
1,518,594
Total investment income
16,841,638
80,421,855
624,295
1,307,558
1,317,305
16,264,843
1,413,607
3,873,709
122,064,810
379
Investment income by IFRS categories for 2023
Sava Re
EUR
Interest income
Change in fair value of FVTPL investments
Gains on disposal of FVTPL investments
Gains on disposal of investments of other IFRS categories
Income from dividends and shares of other investments
Exchange gains
Change in expected credit losses (ECL)
Diverse other income
Total
Investments measured at amortised cost
279,456
0
0
0
0
1,413,257
18,130
0
1,710,843
Debt instruments
102,760
0
0
0
0
0
2
0
102,763
Cash and cash equivalents
12,488
0
0
0
0
1,413,257
0
0
1,425,745
Deposits and CDs
41,806
0
0
0
0
0
2,940
0
44,746
Loans
122,402
0
0
0
0
0
15,188
0
137,590
Investments measured at fair value through profit or loss
230,222
3,903,887
9,388
0
217,967
672,816
0
1,008,011
6,042,291
Mandatorily measured at fair value through profit or loss, not held for trading
230,222
3,903,887
9,388
0
217,967
672,816
0
1,008,011
6,042,291
Debt instruments
230,222
433,741
0
0
0
0
0
0
663,964
Equity instruments
0
3,470,146
9,388
217,967
672,816
0
0
4,370,316
Investments in infrastructure funds
0
0
0
0
0
0
0
921,507
921,507
Investments in real-estate funds
0
0
0
0
0
0
0
86,504
86,504
Investments measured at fair value through other comprehensive income
4,455,595
0
0
12,456
0
6,521,397
71,790
0
11,061,238
Debt instruments
4,455,595
0
0
12,456
6,521,397
71,790
0
11,061,238
Investment property
0
0
0
0
0
0
0
867,573
867,573
Investment property
0
0
0
0
0
0
0
867,573
867,573
Total investment income
4,965,273
3,903,887
9,388
12,456
217,967
8,607,469
89,921
1,875,584
19,681,945
380
Investment income by IFRS categories for 2022
Sava Re
EUR
Interest income
Change in fair value of FVTPL investments
Gains on disposal of FVTPL investments
Gains on disposal of investments of other IFRS categories
Income from dividends and shares of other investments
Exchange gains
Change in expected credit losses (ECL)
Diverse other income
Total
Investments measured at amortised cost
252,454
0
0
0
0
1,882,163
57,206
0
2,191,824
Debt instruments
134,215
0
0
0
0
0
19,374
0
153,589
Cash and cash equivalents
12
0
0
0
0
1,882,163
0
0
1,882,175
Deposits and CDs
0
0
0
0
0
0
0
0
0
Loans
118,227
0
0
0
0
0
37,832
0
156,060
Investments measured at fair value through profit or loss
291,402
4,129,770
77,683
0
458,074
1,000,711
0
653,583
6,611,224
Mandatorily measured at fair value through profit or loss, not held for trading
291,402
4,129,770
77,683
0
458,074
1,000,711
0
653,583
6,611,224
Debt instruments
291,402
222,031
54,611
0
0
0
0
0
568,044
Equity instruments
0
3,907,740
23,072
0
458,074
1,000,711
0
0
5,389,597
Investments in infrastructure funds
0
0
0
0
0
0
0
602,302
602,302
Investments in real-estate funds
0
0
0
0
0
0
0
51,281
51,281
Investments measured at fair value through other comprehensive income
2,435,600
0
0
1,163,032
0
11,763,230
96,720
0
15,458,583
Debt instruments
2,435,600
1,163,032
11,763,230
96,720
0
15,458,583
Investment property
0
0
0
0
0
0
0
829,030
829,030
Investment property
0
0
0
0
0
0
0
829,030
829,030
Total investment income
2,979,457
4,129,770
77,683
1,163,032
458,074
14,646,105
153,926
1,482,613
25,090,661
381
Investment expenses by IFRS category
Investment expenses by IFRS category for 2023
Sava Insurance Group
EUR
Interest expenses
Change in fair value of FVTPL investments
Losses on disposal of FVTPL investments
Losses on disposal of investments of other IFRS categories
Exchange losses
Change in expected credit losses (ECL)
Other
Total
Investments measured at amortised cost
767
0
0
0
3,259,089
582,666
5,590
3,848,112
Debt instruments
0
0
0
0
41,720
24,860
880
67,460
Cash and cash equivalents
0
0
0
0
3,168,264
0
0
3,168,264
Deposits and CDs
767
0
0
0
49,105
550,833
4,710
605,415
Loans granted
0
0
0
0
0
6,973
0
6,973
Investments measured at fair value through profit or loss
0
47,756,284
406,002
0
1,333,568
0
14,603
49,510,457
Mandatorily measured at fair value through profit or loss, not held for trading
0
47,756,284
406,002
0
1,333,568
0
14,603
49,510,457
Debt instruments
0
387,857
16,669
0
0
0
0
404,526
Equity instruments
0
46,952,443
389,333
0
1,333,568
0
14,603
48,689,947
Investments in real-estate funds
0
415,984
0
0
0
0
0
415,984
Investments measured at fair value through other comprehensive income
0
0
0
888,628
10,221,916
158,318
128,471
11,397,333
Debt instruments
0
0
0
888,628
10,221,916
158,318
18,394
11,287,256
Other investments
0
0
0
0
0
0
110,077
110,077
Receivables
0
0
0
0
0
0
136,182
136,182
Other investments
0
0
0
0
0
0
136,182
136,182
Investment property
0
0
0
0
0
0
542,567
542,567
Investment property
0
0
0
0
0
0
542,567
542,567
Total investment expenses
767
47,756,284
406,002
888,628
14,814,573
740,984
827,413
65,434,651
382
Investment expenses by IFRS category for 2022
Sava Insurance Group
EUR
Interest expenses
Change in fair value of FVTPL investments
Losses on disposal of FVTPL investments
Losses on disposal of investments of other IFRS categories
Exchange losses
Change in expected credit losses (ECL)
Other
Total
Investments measured at amortised cost
187,526
0
0
0
2,586,018
501,356
2,356,989
5,631,889
Debt instruments
0
0
0
0
14,804
33,280
2,353,629
2,401,713
Cash and cash equivalents
174,572
0
0
0
2,544,928
0
0
2,719,500
Deposits and CDs
12,954
0
0
0
1,193
413,401
3,360
430,908
Loans granted
0
0
0
0
25,093
54,675
0
79,768
Investments measured at fair value through profit or loss
0
153,270,544
966,247
0
1,184,095
0
1,845
155,422,731
Mandatorily measured at fair value through profit or loss, not held for trading
0
153,270,544
966,247
0
1,184,095
0
1,845
155,422,731
Debt instruments
0
6,430,158
150,594
0
6,548
0
0
6,587,300
Equity instruments
0
146,838,256
815,653
0
1,177,547
0
1,845
148,833,301
Investments in real-estate funds
0
2,130
0
0
0
0
0
2,130
Investments measured at fair value through other comprehensive income
0
0
0
1,736,948
11,217,701
561,270
155,258
13,671,177
Debt instruments
0
0
0
1,736,948
11,217,701
561,270
41,279
13,557,198
Other investments
0
0
0
0
0
0
113,979
113,979
Investment property
0
0
0
0
0
0
521,894
521,894
Investment property
0
0
0
0
0
0
521,894
521,894
Total investment expenses
187,526
153,270,544
966,247
1,736,948
14,987,814
1,062,626
3,035,986
175,247,691
Investment expenses by IFRS category for 2023
Sava Re
EUR
Interest expenses
Change in fair value of FVTPL investments
Losses on disposal of FVTPL investments
Losses on disposal of investments of other IFRS categories
Exchange losses
Change in expected credit losses (ECL)
Other
Total
Investments measured at amortised cost
0
0
0
0
3,124,503
23,954
0
3,148,457
Debt instruments
0
0
0
0
0
10
0
10
Cash and cash equivalents
0
0
0
0
3,124,503
0
0
3,124,503
Deposits and CDs
0
0
0
0
0
23,399
0
23,399
Loans granted
0
0
0
0
0
545
0
545
Investments measured at fair value through profit or loss
0
2,692,105
158,893
0
919,266
0
0
3,770,264
Mandatorily measured at fair value through profit or loss, not held for trading
0
2,692,105
158,893
0
919,266
0
0
3,770,264
Debt instruments
0
78,616
15,456
0
0
0
0
94,072
Equity instruments
0
2,613,489
143,437
0
919,266
0
0
3,676,192
Investments measured at fair value through other comprehensive income
0
0
0
132,904
10,047,293
11,541
6,905
10,198,643
Debt instruments
0
0
0
132,904
10,047,293
11,541
6,905
10,198,643
Investment property
0
0
0
0
0
0
220,196
220,196
Investment property
0
0
0
0
0
0
220,196
220,196
Total investment expenses
0
2,692,105
158,893
132,904
14,091,062
35,495
227,101
17,337,560
383
Investment expenses by IFRS category for 2022
Sava Re
EUR
Interest expenses
Change in fair value of FVTPL investments
Losses on disposal of FVTPL investments
Losses on disposal of investments of other IFRS categories
Exchange losses
Change in expected credit losses (ECL)
Other
Total
Investments measured at amortised cost
31,738
0
0
0
2,299,036
34,609
0
2,365,383
Debt instruments
0
0
0
0
0
2,496
0
2,496
Cash and cash equivalents
31,738
0
0
0
2,299,036
0
0
2,330,774
Loans granted
0
0
0
0
0
32,113
0
32,113
Investments measured at fair value through profit or loss
0
7,232,854
69,230
0
753,139
0
0
8,055,223
Mandatorily measured at fair value through profit or loss, not held for trading
0
7,232,854
69,230
0
753,139
0
0
8,055,223
Debt instruments
0
1,619,214
14,909
0
0
0
0
1,634,123
Equity instruments
0
5,613,640
54,321
0
753,139
0
0
6,421,101
Investments measured at fair value through other comprehensive income
0
0
0
965,345
10,167,440
97,494
2,115
11,232,394
Debt instruments
965,345
10,167,440
97,494
2,115
11,232,394
Investment property
0
0
0
0
0
0
197,962
197,962
Investment property
0
0
0
0
0
0
197,962
197,962
Total investment expenses
31,738
7,232,854
69,230
965,345
13,219,615
132,103
200,077
21,850,963
384
Investment income and expenses by source of funds
The Group records investment income and expenses separately by source of funds, i.e. separately for own fund assets, non-life insurance register assets and life insurance register assets. Own fund investments support the Group’s equity; non-life insurance register assets support (re)insurance contract liabilities relating to non-life business, whereas life insurance register assets support (re)insurance contract liabilities relating to life insurance business.
Investment income – non-life insurance business
Sava Insurance Group
Sava Re
EUR
Liability fund
Liability fund
Liability fund
Liability fund
2023
2022
2023
2022
Interest income
8,393,085
5,715,377
4,091,965
2,607,145
Change in fair value
8,083,070
8,956,377
3,828,337
3,944,088
Gains on disposal of investments
42,381
1,385,397
21,844
1,218,385
Income from dividends and shares – other investments
377,731
624,515
197,197
442,578
Exchange gains
9,092,627
15,787,403
8,605,716
14,644,119
Change in expected credit losses (ECL)
569,613
372,522
84,298
64,565
Diverse other income
3,662,301
3,544,010
1,865,515
1,472,242
Total investment income – liability fund
30,220,808
36,385,601
18,694,872
24,393,121
Capital fund
Capital fund
Capital fund
Capital fund
2023
2022
2023
2022
Interest income
2,469,129
728,762
873,308
372,312
Change in fair value
362,758
384,637
75,550
185,683
Gains on disposal of investments
10,798
61,486
0
22,330
Income from dividends and shares – other investments
21,520
15,497
20,770
15,497
Exchange gains
1,813
3,577
1,754
1,986
Change in expected credit losses (ECL)
73,818
151,603
5,622
89,361
Diverse other income
119,970
83,101
10,069
10,372
Total investment income – capital fund
3,059,806
1,428,663
987,073
697,540
Total investment income – non-life business
33,280,614
37,814,264
19,681,945
25,090,661
Investment income – life insurance business
Sava Insurance Group
EUR
Assets supporting life business
Assets supporting life business
2023
2022
Interest income
8,917,868
9,174,166
Change in fair value
97,489,188
70,728,654
Gains on disposal of investments
466,971
441,209
Income from dividends and shares – other investments
699,810
675,691
Exchange gains
111,507
424,328
Change in expected credit losses (ECL)
349,494
801,947
Diverse other income
59,673
106,127
Total investment income – life insurance liability fund
108,094,511
82,352,122
Capital fund
Capital fund
2023
2022
Interest income
2,135,165
1,223,333
Change in fair value
163,740
352,187
Gains on disposal of investments
34,740
43,761
Income from dividends and shares – other investments
0
1,602
Exchange gains
58,769
49,535
Change in expected credit losses (ECL)
91,853
87,535
Diverse other income
0
140,471
Total investment income – capital fund
2,484,267
1,898,424
Total investment income – life business
110,578,778
84,250,546
385
Expenses for financial assets and liabilities – non-life business
Sava Insurance Group
Sava Re
EUR
Liability fund
Liability fund
Liability fund
Liability fund
2023
2022
2023
2022
Interest expenses
767
78,340
0
5,012
Change in fair value
5,740,499
15,437,933
2,665,061
6,835,627
Losses on disposal of investments
469,967
1,271,573
276,341
1,026,523
Exchange losses
14,589,799
14,547,581
14,089,188
13,217,805
Change in expected credit losses (ECL)
522,246
553,991
31,242
66,866
Other
549,575
471,861
222,052
195,388
Total investment expenses – liability fund
21,872,853
32,361,279
17,283,884
21,347,221
Capital fund
Capital fund
Capital fund
Capital fund
2,023
2,022
2023
2022
Interest expenses
0
41,765
0
26,726
Change in fair value
79,524
1,478,385
27,044
397,227
Losses on disposal of investments
16,315
87,220
15,456
8,052
Exchange losses
2,039
4,275
1,875
1,811
Change in expected credit losses (ECL)
37,295
113,946
4,253
65,237
Other
13,112
61,953
5,049
4,689
Total investment expenses – capital fund
148,285
1,787,544
53,677
503,741
Total investment expenses – non-life business
22,021,138
34,148,823
17,337,560
21,850,962
Expenses for financial assets and liabilities – life business
Sava Insurance Group
EUR
Assets supporting life business
Assets supporting life business
2023
2022
Interest expenses
0
53,694
Change in fair value
41,866,122
132,341,697
Losses on disposal of investments
572,783
788,149
Exchange losses
146,908
198,983
Change in expected credit losses (ECL)
25,109
219,766
Other
255,806
145,570
Total investment expenses – life insurance liability fund
42,866,728
133,747,859
Capital fund
Capital fund
2,023
2,022
Interest expenses
0
13,727
Change in fair value
70,139
4,012,529
Losses on disposal of investments
235,565
556,253
Exchange losses
75,827
236,975
Change in expected credit losses (ECL)
156,334
174,923
Other
8,920
2,356,602
Total investment expenses – capital fund
546,785
7,351,009
Total investment expenses – life business
43,413,513
141,098,868
Net investment income from non-life and life business
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Non-life insurance
11,259,476
3,665,441
2,344,384
3,239,699
Life insurance
67,165,265
-56,848,322
0
0
Total
78,424,741
-53,182,881
2,344,384
3,239,699
386
The Group’s investment return for 2023 was EUR 78.4 million and includes the return on investments supporting the liabilities of life insurance policyholders who bear the investment risk (direct participating contracts).
The return on the investments supporting the liabilities of life policyholders who bear the investment risk in 2023 was EUR 56.0 million (31 December 2022: EUR -60.9 million. The majority of the return relates to the change in the fair value of unit-linked life insurance mutual funds (31 December 2023: EUR 55.4 million, 31 December 2022: EUR -61.1 million). The majority of this return has no impact on profit or loss, as accordingly finance expenses on unit-linked life insurance contracts have also been recognised.
The return on the Group’s investments for 2023, net of exchange differences and net of the return on investments supporting the liabilities of life policyholders who bear the investment risk, is EUR 27.9 million. The largest part of this is interest income of EUR 21.9 million, reflecting financial conditions that allow for high-yield investments.
The net investment income of Sava Re in 2023 was EUR 2.3 million (2022: EUR 3.2 million). The net investment income was lower in 2023, mainly due to negative exchange differences. Excluding exchange differences, the 2023 return of EUR 7.8 million is higher than the 2022 return of EUR 1.8 million, mainly due to higher interest income and fair value gains on investments at fair value through profit or loss.
16.8.38 Operating expenses
The Group monitors operating expenses by nature. Compared to 2022, these expenses rose by 11.9%, or EUR 17.7 million, (2022: EUR 8.4 million).
The Company’s operating expenses increased by 17.2% or by EUR 2.8 million (2022: EUR -1.1 million).
Operating expenses by nature
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Acquisition costs (commissions)
84,253,993
78,674,766
34,982,281
44,149,728
Depreciation/amortisation of operating assets
11,645,260
9,274,469
671,812
543,794
Personnel costs
98,735,179
89,732,838
11,305,985
9,969,809
- Salaries and wages
74,381,931
65,912,267
8,807,034
7,727,933
- Social and pension insurance costs
10,665,861
9,534,333
1,457,342
1,283,969
- Other personnel costs
13,687,387
14,286,238
1,041,610
957,907
Costs of services by natural persons not performing business Total including taxes and contributions
1,210,564
975,695
469,080
327,662
Other operating expenses
55,806,322
49,671,531
6,321,946
5,173,291
Total
251,651,318
228,329,299
53,751,104
60,164,284
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Attributable expenses
200,636,773
183,946,615
39,945,596
48,360,421
Non-attributable expenses
29,432,276
26,979,168
13,805,508
11,803,863
Expenses of non-insurance companies
21,582,269
17,403,516
0
0
Total
251,651,318
228,329,299
53,751,104
60,164,284
387
The main items of other operating expenses, excluding audit expenses, are as follows.
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Other operating expenses
54,951,844
48,824,840
6,051,684
4,975,130
Cost of materials
1,952,616
1,579,458
66,464
59,664
Energy costs
2,281,062
2,010,370
138,347
115,384
Lease expenses
4,704,807
3,838,023
1,083,886
902,154
Employee reimbursements and training costs
1,820,193
1,474,085
414,330
242,586
Cost of other services
15,741,976
13,242,214
891,023
681,841
Transaction costs
2,581,785
2,481,845
276,763
260,141
Costs of intellectual and personal services
12,931,395
11,053,127
2,253,531
1,987,393
Insurance premiums
489,718
420,146
171,571
162,757
Cost of advertising, promotion and entertainment
7,735,539
8,669,014
214,010
169,877
Provisions for pensions and other provisions
1,449,206
1,041,039
130,900
109,118
Cost of donations, sponsorship, membership fees
3,263,547
3,015,519
410,858
284,215
Total
54,951,844
48,824,840
6,051,684
4,975,130
Audit fees
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Audit of annual report
709,774
709,487
217,017
145,594
Other assurance services
144,705
137,203
53,245
52,567
Total
854,479
846,690
270,262
198,161
The cost of auditing the annual report includes audit costs incurred by each Group company, and additionally for the Company, in addition to the cost of auditing the separate financial statements, the cost of auditing the consolidated financial statements of the Sava Insurance Group. Other audit services relate to assurance services for reports drawn up by the Company and the Group under Solvency II requirements, and for other reports for which the auditor provides assurance services (related parties report, ESEF compliance report, reporting to the Insurance Supervision Agency, remuneration report, approval of financial statements for foreign regulators and similar).
16.8.39 Income and expenses relating to investments in subsidiaries and associates
In 2023, the Group generated income from profit distributions of associates of EUR 2,169,860 (2022: EUR 1,285,731).
No impairment losses on goodwill were recognised in 2022 or 2023.
In 2023, the Company recognised EUR 30.6 million (2022: EUR 51.9 million) of dividend income and profit distributions. There were no impairment losses on shares in subsidiaries in 2023 (2022: EUR 1.2 million of impairment losses on shares in the subsidiary Sava Osiguruvanje (MKD).
388
16.8.40 Other operating income and expenses
Other operating income and expenses
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Penalties and damages received
497,291
591,142
18,169
580
Operating income from revaluation
77,611
397,089
0
0
Revenue from other services
4,772,343
4,800,360
489,410
592,836
Operating revenue
9,147,731
4,166,143
0
0
Insurance revenue outside the scope of IFRS 17
2,441,442
2,793,845
0
0
Other income
16,936,418
12,748,579
507,579
593,416
Net exchange differences
-4,743
-457,016
-4,997
-457,013
Operating expenses from revaluation
-119,356
-119,319
0
0
Expenses for other services
-4,819,796
-1,913,197
-268,260
-121,426
Expenses of non-insurance companies
-21,582,269
-17,403,516
0
0
Other expenses
-26,526,164
-19,893,048
-273,257
-578,439
Net other operating income and expenses
-9,589,746
-7,144,469
234,322
14,977
Income from other services comprises gains on the disposal of items of property, plant and equipment, extraordinary interest income and income from the use of holiday facilities.
Operating income mainly includes income from assistance services.
Expenses for other services include allowances for and impairment losses on other receivables, indirect operating expenses relating to investment property, expenses due to impairment losses on property, plant and equipment assets for own use and other extraordinary expenses.
16.8.41 Income tax expense
Tax expense recognised in the income statement
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Income tax expense
13,119,837
9,736,944
2,893,138
364,624
Deferred tax expense
1,836,345
1,841,660
1,221,269
2,216,322
Total tax expense recognised in the income statement
14,956,182
11,578,604
4,114,406
2,580,945
Tax expense recognised in other comprehensive income – items that will not be reclassified to profit or loss
Sava Insurance Group
2023
2022
EUR
Before taxes
Tax
After taxes
Before taxes
Tax
After taxes
Other revaluation surpluses
-845,648
26,777
-818,871
-953,857
-298,198
-1,252,055
Total
-845,648
26,777
-818,871
-953,857
-298,198
-1,252,055
Sava Re
2023
2022
EUR
Before taxes
Tax
After taxes
Before taxes
Tax
After taxes
Other revaluation surpluses
-27,063
624
-26,439
55,903
0
55,903
Total
-27,063
624
-26,439
55,903
0
55,903
389
Tax expense recognised in other comprehensive income – items that will be reclassified to profit or loss
Sava Insurance Group
2023
2022
EUR
Before taxes
Tax
After taxes
Before taxes
Tax
After taxes
Net gains/losses on financial instruments at FVOCI
-50,080,928
7,282,958
-42,797,970
160,519,724
-28,666,296
131,853,428
Finance income or expenses from insurance contracts
33,063,968
-5,032,586
28,031,382
-108,200,503
20,569,657
-87,630,846
Net finance income or expenses from reinsurance contracts
-1,378,743
685,098
-693,645
5,079,988
-2,479,747
2,600,241
Realised net gains/losses on financial investments at FVOCI
-661,574
-
-661,574
1,077,839
-
1,077,839
Other comprehensive income
-19,057,277
2,935,470
-16,121,807
58,477,048
-10,576,386
47,900,662
Sava Re
2023
2022
EUR
Before taxes
Tax
After taxes
Before taxes
Tax
After taxes
Net gains/losses on financial instruments at FVOCI
-9,832,360
1,444,764
-8,387,596
25,259,425
-4,799,291
20,460,134
Finance income or expenses from insurance contracts
3,038,396
-1,096,411
1,941,985
-7,194,951
3,118,767
-4,076,184
Net finance income or expenses from reinsurance contracts
-1,304,240
148,746
-1,155,494
4,949,438
-857,926
4,091,512
Realised net gains/losses on financial investments at FVOCI
-120,448
0
-120,448
0
0
0
Other comprehensive income
-8,218,652
497,099
-7,721,553
23,013,912
-2,538,450
20,475,462
Tax rate reconciliation
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Profit or loss before tax
79,613,353
58,502,045
53,589,208
63,931,896
Income tax expense at statutory tax rate (local)
21,521,834
22,441,898
10,181,950
12,147,060
Adjustment to actual rates
-1,187,948
-805,830
0
0
Tax effect of income deductible for tax purposes
-6,333,947
-10,474,264
-5,878,076
-9,955,777
Tax effect of expenses not tax deductible
1,478,267
-301,910
94,737
-440,525
Tax effect of income that increases tax base
389,626
688,915
292,976
497,643
Tax relief
-3,104,414
-807,470
-1,798,449
-620,846
Temporarily unrecognised deferred tax
322,597
-1,005,105
0
0
Other
1,870,167
1,842,370
1,221,269
953,391
Total income tax expense in the income statement
14,956,182
11,578,604
4,114,406
2,580,945
Effective tax rate
18.79%
19.79%
7.68%
4.04%
390
16.9 Contingent assets and liabilities
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Outstanding recourse receivables
35,689,636
30,003,944
-
-
Receivables from the cancellation of subordinated financial instruments
37,960,300
37,960,300
10,038,000
10,038,000
Other potential receivables
1,870,961
1,891,582
225,565
244,026
Contingent assets
75,520,897
69,855,826
10,263,565
10,282,026
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Guarantees issued
11,446,639
12,398,533
3,106,691
4,372,752
Civil claims (lawsuits)
0
60,908
-
-
Contingent liabilities
11,446,639
12,459,441
3,106,691
4,372,752
For 2023 and 2022, the Group and the Company recognised contingent assets equal to their cancelled subordinated instruments, in respect of which they continue to take action to protect their interests. In December 2016, claims were filed against the issuing banks of the subordinated financial instruments held by the Group and the Company prior to their cancellation.
Securities given mostly represent potential liabilities arising from investments in alternative funds. At the time of signing the subscription, which represents a commitment to make future payments into the alternative fund, the Company recognises the amount of the commitment as a contingent liability, which is then reduced by the amount drawn at each call.
16.10 Related party disclosures
The Group makes separate disclosures for the following groups of related parties:
•owners and related enterprises,
•key management personnel: management board, supervisory board including its committees, and employees not subject to the tariff section of the collective agreement,
•subsidiary companies,
•associates.
Owners and related enterprises
The Group’s largest shareholder is Slovenian Sovereign Holding and the Republic of Slovenia with a 31.6% stake. The ultimate beneficial owner of Slovenian Sovereign Holding is the Republic of Slovenia.
Remuneration of management board members in 2023
EUR
Gross salary – fixed amount
Gross salary – variable amount
Benefits in kind – insurance premiums
Benefits in kind – use of company car
Total
Marko Jazbec
217,800
62,816
421
3,862
284,899
Polona Pirš Zupančič
195,586
139,706
5,486
8,120
348,898
Peter Skvarča
194,850
53,460
5,426
3,842
257,578
David Benedek
153,235
0
2,726
5,596
161,557
Total
761,471
255,982
14,059
21,419
1,052,931
391
Remuneration of management board members in 2022
EUR
Gross salary – fixed amount
Gross salary – variable amount
Benefits in kind – insurance premiums
Benefits in kind – use of company car
Total
Marko Jazbec
210,586
155,623
426
3,281
369,916
Jošt Dolničar
62,625
140,082
1,750
1,010
205,467
Polona Pirš Zupančič
179,400
53,460
5,442
9,012
247,314
Peter Skvarča
179,400
53,460
5,451
4,696
243,007
Total
632,011
402,625
13,069
17,999
1,065,705
Liabilities to management board members based on gross remuneration
EUR
31 December 2023
31 December 2022
Marko Jazbec
18,000
18,000
Polona Pirš Zupančič
16,200
14,850
Peter Skvarča
16,200
14,850
David Benedek
16,200
Total
66,600
47,700
In 2023, EUR 86,246 was paid to Polona Pirš Zupančič, a member of the management board of Sava Re, in respect of deferred remuneration for 2021, 2020, 2019 and 2018.
As at 31 December 2023, the Company disclosed liabilities for potential payment of the variable part of pay of management board members in respect of 2021 and 2022 subject to certain conditions in the amount of EUR 136,763.
As at 31 December 2023, the Company had no receivables due from the management board members. Management board members are not remunerated for their functions in subsidiary companies. They have other entitlements under employment contracts, i.e. an allowance for annual leave of EUR 1,800, severance pay upon retirement and contributions to voluntary supplementary pension insurance. The management board members are not entitled to jubilee benefits for 10, 20 or 30 years of service.
392
Remuneration of the supervisory board and its committees in 2023
EUR
Attendance fees
Remuneratio n for performing the function
Reimbursemen t of expenses and training
Benefits in kind – insurance premium s
Total
Supervisory board members
Davor Ivan Gjivoje Jr
chairman
2,695
19,500
77,922
84
100,201
Keith William Morris
deputy chairman
2,695
14,300
6,679
84
23,758
Klemen Babnik
member
2,695
13,000
186
84
15,965
Matej Gomboši
member
2,695
13,000
2,353
84
18,132
Gorazd Andrej Kunstek(until 12 June 2023)
member
1,375
5,850
0
0
7,225
Edita Rituper
member
2,695
13,000
0
84
15,779
Blaž Garbajs (from 13 June 2023)
member
1,320
7,150
0
84
8,554
Total supervisory board members
16,170
85,800
87,140
504
189,614
Audit committee members
Matej Gomboši
chairman
1,980
4,875
2,161
0
9,016
Gorazd Andrej Kunstek(until 12 June 2023)
member
1,100
1,462
0
0
2,562
Blaž Garbajs (from 13 June 2023)
member
880
1,787
0
0
2,667
Katarina Sitar Šuštar
external member
0
7,725
179
0
7,904
Dragan Martinović
external member
0
6,825
0
0
6,825
Total audit committee members
3,960
22,674
2,340
0
28,974
Members of the nominations and remuneration committee
Klemen Babnik
chairman
660
4,875
57
0
5,592
Davor Ivan Gjivoje Jr
member
660
3,250
23,854
0
27,764
Keith William Morris
member
660
3,250
2,045
0
5,955
Matej Gomboši
member
660
3,250
720
0
4,630
Gorazd Andrej Kunstek(until 12 June 2023)
alternate member
440
1,462
0
0
1,902
Edita Rituper (from 13 June 2023)
member
220
1,787
0
0
2,007
Blaž Garbajs (from 14 December 2023)
member
0
157
0
0
157
Total nominations committee members
3,300
18,031
26,676
0
48,007
Members of the risk committee
Keith William Morris
chairman
1,320
4,875
4,089
0
10,284
Davor Ivan Gjivoje Jr
member
1,320
3,250
47,707
0
52,277
Slaven Mićković
external member
0
11,996
0
0
11,996
Janez Komelj
external member
0
3,914
0
0
3,914
Total risk committee members
2,640
24,035
51,796
0
78,471
Members of the fit & proper committee
Keith William Morris
chairman
440
4,875
1,363
0
6,678
Klemen Babnik
member
440
3,250
38
0
3,728
Rok Saje
external member
440
3,250
0
0
3,690
Klara Hauko
external member
440
3,250
0
0
3,690
Total members of the fit & proper committee
1,760
14,625
1,401
0
17,786
393
Remuneration of the supervisory board and its committees in 2022
EUR
Attendance fees
Remuneration for performing the function
Reimbursement of expenses and training
Benefits in kind – insurance premiums
Total
Supervisory board members
Davor Ivan Gjivoje Jr
chairman
2,915
19,500
38,248
81
60,744
Keith William Morris
deputy chairman
2,915
14,300
4,909
81
22,206
Klemen Babnik
member
2,915
13,000
47
81
16,043
Matej Gomboši
member
2,915
13,000
1,559
81
17,555
Gorazd Andrej Kunstek
member
2,915
13,000
244
81
16,240
Edita Rituper
member
2,915
13,000
0
81
15,996
Total supervisory board members
17,490
85,800
45,007
488
148,785
Audit committee members
Matej Gomboši
chairman
2,596
4,875
1,735
0
9,206
Gorazd Andrej Kunstek
member
2,596
3,250
271
0
6,117
Katarina Sitar Šuštar
external member
0
10,625
107
0
10,731
Dragan Martinović
external member
0
6,851
0
0
6,851
Total audit committee members
5,192
25,600
2,113
0
32,905
Members of the nominations and remuneration committee
Klemen Babnik
chairman
1,100
4,875
22
0
5,997
Davor Ivan Gjivoje Jr
member
1,100
3,250
25,258
0
29,608
Keith William Morris
member
1,100
3,250
2,316
0
6,666
Matej Gomboši
member
1,100
3,250
735
0
5,085
Gorazd Andrej Kunstek
member
1,100
3,250
115
0
4,465
Edita Rituper
member
440
0
0
0
440
Total nominations committee members
5,940
17,875
28,446
0
52,261
Members of the risk committee
Keith William Morris
chairman
1,540
4,875
3,242
0
9,657
Davor Ivan Gjivoje Jr
member
1,540
3,250
25,258
0
30,048
Janez Komelj
external member
0
6,254
0
0
6,254
Total risk committee members
3,080
14,379
28,500
0
45,959
Members of the fit & proper committee
Keith William Morris
chairman
660
4,875
1,389
0
6,924
Klemen Babnik
member
660
3,250
13
0
3,923
Rok Saje
external member
660
3,250
0
0
3,910
Klara Hauko
external member
660
3,250
0
0
3,910
Total members of the fit & proper committee
2,640
14,625
1,403
0
18,668
394
As at 31 December 2023, the Company had no receivables due from the supervisory board members and had no liabilities due to any members of the supervisory board or its committees based on gross remuneration.
Employee remuneration not subject to the tariff section of the collective agreement for 2023
EUR
Gross salary – fixed amount
Gross salary – variable amount
Benefits in kind and other benefits
Total
Individual employment contracts
2,696,157
661,025
162,408
3,519,590
Employee remuneration not subject to the tariff section of the collective agreement for 2022
EUR
Gross salary – fixed amount
Gross salary – variable amount
Benefits in kind and other benefits
Total
Individual employment contracts
2,238,140
746,322
137,366
3,121,829
Average gross salary in Group companies
The average gross salary of Group companies is calculated as the sum of all costs of gross salaries of Group companies (income statement item “personnel costs”) multiplied by the number of months, divided by the total average number of employees based on the hours worked in all Group companies.
Sava Insurance Group
EUR
2023
2022
Average monthly gross salary
2,998
2,768
Subsidiaries
Investments in and amounts due from Group companies
Sava Re
EUR
31 December 2023
31 December 2022
Loans granted to Group companies
gross
2,341,628
1,030,575
Other short-term receivables
gross
75,017
51,397
Total
2,416,645
1,081,972
Liabilities to Group companies
Sava Re
EUR
31 December 2023
31 December 2022
Other current liabilities
183,074
156,624
Liabilities to Group companies by maturity
EUR
Contractual maturity
31 December 2023
Over 5 years
from 1 to 5
Up to 1 year
Total
Other current liabilities
0
0
183,074
183,074
EUR
Contractual maturity
31 December 2022
Over 5 years
from 1 to 5
Up to 1 year
Total
Other current liabilities
0
0
156,624
156,624
Income and expenses relating to Group companies
Sava Re
395
EUR
2023
2022
Insurance revenue
63,774,722
57,960,701
Insurance service expenses
-92,996,538
-62,205,842
Finance result from insurance contracts
-1,073,693
-832,641
Other operating expenses
-465,061
-333,877
Dividend income
30,642,415
51,923,025
Interest income
71,052
62,605
Total
-47,103
46,573,972
Associate companies
No material income or expenses from operations with associates are recorded in 2023 and 2022.
Majority state-owned companies
Disclosures relating to state-owned companies are prepared for state-owned companies that are monthly updated on the website of SSH – Equity Investments.
Receivables due from the state and majority state-owned companies
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Interests in companies
2,543,434
3,418,761
2,543,434
3,418,761
Debt securities and loans
61,574,140
61,717,733
15,504,669
14,304,654
Receivables due from policyholders
1,058,180
457,256
0
0
Total
65,175,755
65,593,750
18,048,104
17,723,415
Liabilities to majority state-owned companies
Sava Insurance Group
Sava Re
EUR
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Liabilities for shares in claims
3,070
0
0
0
Total
3,070
0
0
0
396
Income and expenses relating to majority state-owned companies
Sava Insurance Group
Sava Re
EUR
2023
2022
2023
2022
Dividend income
90,000
294,171
90,000
290,832
Interest income at effective interest rate
1,186,857
1,350,977
254,769
261,117
Other investment income
3,962
702,964
3,835
36,832
Other investment expenses
-72,572
-473,200
-72,218
-473,200
Gross premiums written
6,230,252
12,173,456
0
0
Gross claims payments
-3,007,147
-3,348,982
0
0
Total
4,431,352
10,699,386
276,386
115,580
Characteristics of loans granted to subsidiaries
Sava Re
Borrower
Principal
Type of loan
Maturity
Interest rate
Sava Pokojninska (SVN)
1,500,000
subordinated
28 June 2027
6.00%
Sava Osiguruvanje (MKD)
1,300,000
Ordinary
20 October 2038
4.31%
Total
2,800,000
17 Significant events after the reporting date
On 22 February 2024, Sava Re signed a contract for the acquisition of 2.5% of the company TBS Team 24. Upon completion of the transaction on 27 February 2024, Sava Re held a 90% stake in the company.
397
Appendices(unaudited)
398
399
Appendix A – Glossary of selected terms and calculation methodologies for indicators
Adriatic region. Southeast European countries along the Adriatic Sea.
Assets under management. Assets of pension companies’ pension funds, assets of mutual funds managed by the Group’s asset management company and assets of policyholders who bear the investment risk.
Book value per share. Ratio of total equity to the weighted average number of shares outstanding.
Business volume. Gross premiums written and revenue of non-insurance services.
Combined ratio. The sum of the loss ratio and the expense ratio. The Group’s ratio is calculated for the reinsurance and non-life insurance operating segments. Sava Re’s ratio does not include expenses arising from holding activities.
For the transition to IFRS 17, the Group has retained the existing net/net methodology for calculating the combined ratio. During 2023, in line with the approach of other comparable insurance companies, the Group decided to change its methodology to a net/gross calculation of the combined ratio, which is also consistent with the presentation of the income statement in accordance with IFRS 17. The revised methodology has been applied for the first time in this year’s annual report. Under the new methodology, the net reinsurance expenses are included in the numerator, while the denominator includes insurance service revenue net of the deductible reinsurance portion. Calculations using the new methodology slightly deteriorate the combined ratio, but the previous year’s combined ratio is also restated for comparison.
Contractual service margin (CSM). An estimate of the unearned profit on groups of insurance contracts that has not been recognised in the income statement at a reporting date because it relates to future services.
Cost-to-income ratio (CIR). Expense ratio for the pensions and asset management segment. It is calculated as the ratio of revenue to expenses.
Dividend yield. Ratio of dividend per share to the rolling average price per share in the 12-month period.
Emerging risks. New or previously identified risks that arise in new or unknown circumstances and whose impact is not fully known.
Euro Interbank Offered Rate (EURIBOR). This is the average reference interest rate at which banks in the euro area lend money to each other.
Exchange traded fund (ETF). Closed-end investment fund.
Expense ratio. Attributable expenses plus non-attributable expenses plus net operating income or expenses plus net other income or expenses plus net impairment losses and reversals of impairment losses on non-financial assets as a percentage of insurance revenue. The Group’s ratio is calculated for the reinsurance and non-life insurance operating segments. Sava Re’s ratio does not include expenses arising from holding activities.
FVTPL investments. Financial investments measured at fair value through profit or loss.
Gross premiums written. The total premiums on all policies written or renewed during a given period, regardless of what portions have been earned.
Highly liquid assets. These include L1A assets (ECB methodology), investments in US treasuries, investments in sovereign and supranational issuers with a credit rating of at least “AA+”, and cash and cash equivalents.
Interbank Offered Rate (IBOR). This is the average reference interest rate at which banks lend money to each other (e.g. LIBOR, EURIBOR, etc.).
Investment portfolio. It consists of financial investments, investments in associates, investment property, and cash and cash equivalents. It does not include investments of policyholders who bear the investment risk.
Loss ratio. Insurance service expenses, excluding operating expenses, plus net result from reinsurance contracts held as a percentage of insurance revenue. The Group’s ratio is calculated for the reinsurance and non-life insurance operating segments.
Net contractual service margin. Contractual service margin, net of reinsurance.
Net earnings or loss per share. Ratio of net profit or loss attributable to equity holders of the controlling company as a percentage of the weighted average number of shares outstanding. The Company and the Group have no potentially dilutive ordinary shares, therefore basic earnings per share equal diluted earnings per share.
Net investment income of the investment portfolio. The investment result plus the share of profit or loss of subsidiaries and associates. Calculated excluding returns on life insurance policies where policyholders bear the investment risk, the impact of exchange differences and expenses on subordinate debt.
NSLT – health business. Health insurance business pursued on a similar technical basis as non-life insurance.
ORSA (Own Risk and Solvency Assessment). Own assessment of the risks associated with a company’s or the Group’s business and strategic plan, and assessment of the adequacy of own funds to cover them.
Return on equity. Net profit for the period as a percentage of average equity during the period, excluding accumulated other comprehensive income.
Return on the investment portfolio. The ratio of net investment income from the investment portfolio to average invested assets. The investment portfolio position includes the following items of the statement of financial position: investment property; investments in associates and subsidiaries; financial investments, excluding unit-linked assets; and cash and cash equivalents other than those relating to unit-linked life insurance contracts. The average amount is calculated based on figures as at the reporting date and as at the end of the prior year.
SCR. Solvency capital requirement.
SLT – health business. Health insurance pursued on a similar technical basis as life insurance.
Solvency ratio. The ratio of eligible own funds as a percentage of the SCR. A solvency ratio in excess of 100% indicates that the firm has sufficient resources to meet the solvency capital requirement.
Total share return. Ratio of the share price at the end of the period, including the dividend, to the share price at the end of the previous period.
Ultimate loss. Total loss after all claims have been paid. Before the final settlement, the estimate of the ultimate loss includes reported claims and provisions for claims incurred but not reported (IBNR).
400
Appendix B – GRI index 139
GRI 1 used
GRI 1: Foundation 2021
GRI 1: Foundation 2021
GRI 1-07 Publication of GRI list
Appendix D
GRI 2: General disclosures
The organization and its reporting practices
GRI 2-1
Organizational details
2.3, 2.7, 2.6
Sava Re
GRI 2-2
Entities included in the organization’s sustainability reporting
2.5, 2.6, 2.7, 13, 16.2
Sava Insurance Group
GRI 2-3
Reporting period, frequency and contact point
2.3, 13
Sava Insurance Group
GRI 2-4
Restatements of information
13
Sava Insurance Group. The report does not include corrected statements.
GRI 2-5
External assurance
13
/
Activities and workers
GRI 2-6
Activities, value chain and other business relationships
2.5, 2.7, 2.8, 7, 15.2, 16.2, 13
Sava Insurance Group
GRI 2-7
Employees
9, 9.4
Sava Insurance Group
Governance
GRI 2-9
Governance structure and composition
2.7, 5.3, 9.4
Sava Insurance Group
GRI 2-10
Nomination and selection of the highest governance body
4
Sava Re
GRI 2-12
Role of the highest governance body in overseeing the management of impacts
13
Sava Insurance Group
GRI 2-13
Delegation of responsibility for managing impacts
13
Sava Insurance Group
GRI 2-14
Role of the highest governance body in overseeing the management of impacts
13
Sava Insurance Group
GRI 2-15
Conflicts of interest
13
Sava Insurance Group
GRI 2-17
Collective knowledge of the highest governance body
13
GRI 2-18
Evaluation of the performance of the highest governance body
13
Sava Insurance Group
GRI 2-19
Remuneration policies
5.2.2
Sava Re
GRI 2-20
Process to determine remuneration
5.2.2
Sava Re
Strategy, policies and practices
GRI 2-22
Statement on sustainable development strategy
1
Sava Re
GRI 2-23
Policy commitments
5, 6.1, 10, 13
Sava Insurance Group
GRI 2-27
Compliance with laws and regulations
13
Sava Insurance Group
GRI 2-28
Membership associations
13
Sava Re
GRI 2-29
Approach to stakeholder engagement
3.1, 13
Sava Insurance Group
GRI 2-30
Collective bargaining agreements
9.4
Sava Insurance Group
Stakeholder engagement
GRI 2-29
Approach to stakeholder engagement
3.1, 13
Sava Insurance Group
GRI 2-30
Collective bargaining agreements
9
GRI 3: Material Topics 2021
Disclosures on material topics
GRI 3-3
Management of material topics
5.4, 5.7, 6.4, 9, 10 13, 16.5
Sava Insurance Group
GRI 3-1
Process to determine material topics
13
Sava Insurance Group. The materiality matrix has been prepared in cooperation with the stakeholders of the Sava Insurance Group.
GRI 3-2
List of material topics
13
Sava Insurance Group
ECONOMIC IMPACTS
GRI 201: Economic performance
GRI 3-3
Management of material topics
5.4, 6.2, 9, 13
Sava Insurance Group
201-01
Direct economic value generated and distributed
6.2, 13
Sava Insurance Group
139 GRI 1-07.
401
GRI 1 used
GRI 1: Foundation 2021
201-02
Financial implications and other risks and opportunities due to climate change
8.1, 8.2, 13
Sava Insurance Group
201-03
Defined benefit plan obligations
13
Sava Insurance Group
201-04
Financial assistance received from government
5.6, 13
Sava Insurance Group
GRI 202: Market presence
GRI 3-3
Management of material topics
13
Sava Insurance Group
202-02
Proportion of senior management hired from the local community
2.7, 5.3.4
Sava Insurance Group
GRI 203: Indirect economic impacts
GRI 3-3
Management of material topics
13
Sava Insurance Group
203-01
Infrastructure investments and services supported
13
Sava Insurance Group
203-02
Major indirect economic impacts
13
Sava Insurance Group
GRI 204: Procurement practices
GRI 3-3
Management of material topics
13
Sava Insurance Group
204-01
Proportion of spending on local suppliers
13
Sava Insurance Group. Proportion not disclosed.
GRI 205: Prevention of corruption
GRI 3-3
Management of material topics
13
Sava Insurance Group
205-01
Operations assessed for risks related to corruption
13
Sava Insurance Group
205-03
Confirmed incidents of corruption and actions taken
13
Sava Insurance Group
GRI 207: Tax
207
Tax
13
Sava Insurance Group
ENVIRONMENTAL STANDARDS
GRI 302: Energy
GRI 3-3
Management of material topics
13
Sava Insurance Group
302-01
Energy consumption within the organization
13
Sava Insurance Group
GRI 305: Emissions
GRI 3-3
Management of material topics
13
Sava Insurance Group
305-01
direct GHG emissions
13
Sava Insurance Group
305-02
indirect GHG emissions
13
Sava Insurance Group
305-03
other indirect GHG emissions
13
Sava Insurance Group
GRI 306: Effluents and waste
GRI 3-3
Management of material topics
13
Sava Insurance Group
306-02
Waste by type and disposal method
13
Sava Insurance Group
GRI 308: Supplier environmental assessment
GRI 3-3
Management of material topics
13
Sava Insurance Group
308-01
New suppliers that were screened using environmental criteria
13
Sava Re. Proportion not disclosed.
SOCIAL IMPACTS
GRI 401: Recruitment
GRI 3-3
Management of material topics
9
Sava Insurance Group
401-01
Employment and fluctuation
9
Sava Insurance Group
401-02
Work-related injuries
9.4
401-03
Parental leave
9.4
GRI 403: Health and safety at work
GRI 3-3
Management of material topics
9
Sava Insurance Group
403-01
Occupational health and safety management system
9
Sava Insurance Group
403-02
Lost days
9.4
Sava Insurance Group
GRI 404: Education and training
GRI 3-3
Management of material topics
9.5
Sava Insurance Group
404-01
Average hours of training per year per employee
9.5, 9.6
Sava Insurance Group
404-03
Percentage of employees receiving regular performance and career development reviews
9.6
Sava Insurance Group
GRI 405: Diversity and equal opportunities
GRI 3-3
Management of material topics
9
Sava Insurance Group
405-01
Diversity of governance bodies and employees
5.3, 9.4, 13
Sava Insurance Group
402
GRI 1 used
GRI 1: Foundation 2021
405-02
Basic salary factor of women is the same as that of men in all employee categories
9.4
Sava Re
GRI 413: Local communities
GRI 3-3
Management of material topics
13
Sava Insurance Group
413-01
Operations with local community engagement, impact assessments, and development programs
9.6, 13
Sava Insurance Group
GRI 414: Assessment of supplier in terms of impact on society
GRI 3-3
Management of material topics
13
Sava Insurance Group
414-01
New suppliers that were screened using social criteria
13
Sava Insurance Group
GRI 415: Contributions to political parties
405-01
Contributions to political parties
13
Sava Insurance Group
GRI 417: Marketing and labelling
GRI 3-3
Management of material topics
13
Sava Insurance Group
417-01
Requirements for product and service information and labelling
13
Sava Insurance Group
GRI 419: Compliance
GRI 3-3
Management of material topics
13
Sava Insurance Group
GRI 2-27
Compliance with laws and regulations
13
Sava Insurance Group
403
Appendix C – Disclosures required by Disclosures Delegated Regulation 2021/2178
Sava Insurance Group
Additional, complementary disclosures: breakdown of denominator of the KPI
Sava Insurance Group
The percentage of derivatives relative to total assets covered by the KPI:
The value in monetary amounts of derivatives:
0.01%
81,019
The proportion of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
32.46%
432,115,097
For financial undertakings:
7.00%
93,147,414
The proportion of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
31.77%
422,952,649
For financial undertakings:
6.28%
83,557,954
The proportion of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
16.61%
221,050,822
For financial undertakings:
8.14%
108,328,136
The proportion of exposures to other counterparties over total assets covered by the KPI:
Value of exposures to other counterparties:
35.80%
476,566,883
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Value of insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
8.07%
107,450,260
The value of all the investments that are funding economic activities that are not Taxonomy-eligible relative to the value of total assets covered by the KPI:
Value of all the investments that are funding economic activities that are not Taxonomy-eligible:
28.51%
379,497,374
The value of all the investments that are funding Taxonomy-eligible economic activities, but not Taxonomy-aligned relative to the value of total assets covered by the KPI:
Value of all the investments that are funding Taxonomy-eligible economic activities, but not Taxonomy-aligned:
13.63%
181,393,036
404
Additional, complementary disclosures: breakdown of numerator of the KPI
Sava Insurance Group
The proportion of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
Turnover-based:
1.57%
20,940,563
Capital expenditures-based:
2.87%
38,223,676
For financial undertakings:
Turnover-based:
0.00%
25,061
Capital expenditures-based:
0.00%
15,265
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Value of insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Turnover-based:
85.61%
17,948,718
Capital expenditures-based:
76.80%
29,367,153
The proportion of Taxonomy-aligned exposures to other counterparties in over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to other counterparties over total assets covered by the KPI:
Turnover-based:
0%
0.00
Capital expenditures-based:
0%
0.00
Breakdown of the numerator of the KPI per environmental objective
Sava Insurance Group
(1) Climate change mitigation
Turnover:
92.76%
Capital expenditures:
96.46%
Transitional activities
Turnover:
8.53%
Capital expenditures:
4.66%
Enabling activities
Turnover:
0.00%
Capital expenditures:
0.00%
(2) Climate change adaptation
Turnover:
0.75%
Capital expenditures:
0.37%
Enabling activities
Turnover:
0.00%
Capital expenditures:
0.00%
405
Sava Re
Additional, complementary disclosures: breakdown of denominator of the KPI
Sava Re
The percentage of derivatives relative to total assets covered by the KPI:
The value in monetary amounts of derivatives:
0.02%
24,886
The proportion of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
14.79%
21,385,441
For financial undertakings:
3.25%
4,698,321
The proportion of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings from non-EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
13.74%
19,873,297
For financial undertakings:
1.96%
2,841,908
The proportion of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
13.24%
19,149,915
For financial undertakings:
21.68%
31,355,237
The proportion of exposures to other counterparties over total assets covered by the KPI:
Value of exposures to other counterparties:
47.05%
68,045,680
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Value of insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
12.03%
17,404,067
The value of all the investments that are funding economic activities that are not Taxonomy-eligible relative to the value of total assets covered by the KPI:
Value of all the investments that are funding economic activities that are not Taxonomy-eligible:
24.12%
34,882,288
The value of all the investments that are funding Taxonomy-eligible economic activities, but not Taxonomy-aligned relative to the value of total assets covered by the KPI:
Value of all the investments that are funding Taxonomy-eligible economic activities, but not Taxonomy-aligned:
7.06%
10,204,781
406
Additional, complementary disclosures: breakdown of numerator of the KPI
Sava Re
The proportion of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-financial undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
Turnover-based:
3.36%
4,866,905
Capital expenditures-based:
5.34%
7,717,797
For financial undertakings:
Turnover-based:
0.00%
606
Capital expenditures-based:
0.00%
255
The proportion of the insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Value of insurance or reinsurance undertaking’s investments other than investments held in respect of life insurance contracts where the investment risk is borne by the policy holders, that are directed at funding, or are associated with, Taxonomy-aligned economic activities:
Turnover-based:
100%
4,867,511
Capital expenditures-based:
100%
7,718,052
The proportion of Taxonomy-aligned exposures to other counterparties in over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to other counterparties over total assets covered by the KPI:
Turnover-based:
0%
0
Capital expenditures-based:
0%
0
Breakdown of the numerator of the KPI per environmental objective
Sava Re
(1) Climate change mitigation
Turnover:
99.32%
Capital expenditures:
99.85%
Transitional activities
Turnover:
7.67%
Capital expenditures:
2.45%
Enabling activities
Turnover:
0.00%
Capital expenditures:
0.00%
(2) Climate change adaptation
Turnover:
0.00%
Capital expenditures:
0.03%
Enabling activities
Turnover:
0.00%
Capital expenditures:
0.00%
407
Appendix D – Disclosures required by Disclosures Delegated Regulation 2021/2178 (non-life insurance and reinsurance)
Substantial contribution to climate change adaptation
DNSH (Do No Significant Harm)
Economic activities (1)
Absolute premiums, year t (2)
Proportion of premiums, year t (3)
Proportion of premiums, year t – 1 (4)
Climate change mitigation (5)
Water and marine resources (6)
Circular economy (7)
Pollution (8)
Biodiversity and ecosystems (9)
Minimum safeguards (10)
Currency
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
A.1 Non-life insurance and reinsurance underwriting Taxonomy-aligned activities (environmentally sustainable)
484,097,150
69.54%
91.60%
-
-
-
-
-
-
A.1.1. Of which reinsured
93,201,092
13.39%
0.00%
-
-
-
-
-
-
A.1.2. Of which stemming from reinsurance activity
63,110,317
9.07%
0.00%
-
-
-
-
-
-
A.1.2.1. Of which reinsured (retrocession)
11,604,573
1.67%
0.00%
-
-
-
-
-
-
A.2. Non-life insurance and reinsurance underwriting Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
4,162,083
0.60%
0.40%
B. Non-life insurance and reinsurance underwriting Taxonomy-non-eligible activities
207,880,902
29.86%
8.00%
Total (A.1 + A.2 + B)
696,140,135
100%
100.00%
408
Appendix E – Discount rates
The following two tables show the term structures of interest rates for the most important currencies and insurance and reinsurance contract portfolios for the Group and the Company, respectively. These structures are used to calculate the adjustment that reflects the time value of money and financial risks (for the calculation of discount rates).
Time structure of interest rates to be measured under IFRS 17 for non-life and life insurance without a savings component, using the BBA and PAA methods
Time structure of interest rates to be measured under IFRS 17 for life insurance with a savings component, using the BBA and VFA methods
Currency
EUR
USD
MKD
RSD
Currency
EUR
RSD
Measurem ent date / year
31 Decemb er 2023
31 Decemb er 2022
31 Decemb er 2023
31 Decemb er 2022
31 Decemb er 2023
31 Decemb er 2022
31 Decemb er 2023
31 Decemb er 2022
Measurem ent date / year
31 Decemb er 2023
31 Decemb er 2022
31 Decemb er 2023
31 Decemb er 2022
1
3.54%
3.49%
4.91%
5.26%
3.54%
3.49%
5.84%
5.94%
1
3.64%
3.65%
6.16%
6.34%
2
2.99%
3.63%
4.32%
4.86%
2.99%
3.63%
5.93%
6.78%
2
3.14%
3.79%
6.37%
7.26%
3
2.80%
3.55%
4.00%
4.54%
2.80%
3.55%
6.31%
7.53%
3
2.97%
3.73%
6.84%
8.11%
4
2.74%
3.52%
3.85%
4.39%
2.74%
3.52%
6.61%
8.05%
4
2.93%
3.71%
7.19%
8.70%
5
2.73%
3.52%
3.78%
4.32%
2.73%
3.52%
6.83%
8.26%
5
2.93%
3.72%
7.44%
8.93%
6
2.74%
3.50%
3.76%
4.23%
2.74%
3.50%
7.05%
8.36%
6
2.95%
3.70%
7.69%
9.05%
7
2.76%
3.48%
3.77%
4.21%
2.76%
3.48%
7.28%
8.42%
7
2.97%
3.69%
7.95%
9.12%
8
2.78%
3.49%
3.78%
4.19%
2.78%
3.49%
7.50%
8.48%
8
3.00%
3.69%
8.19%
9.19%
9
2.81%
3.49%
3.81%
4.19%
2.81%
3.49%
7.66%
8.54%
9
3.03%
3.70%
8.36%
9.26%
10
2.84%
3.52%
3.84%
4.26%
2.84%
3.52%
7.78%
8.62%
10
3.06%
3.73%
8.50%
9.34%
15
2.92%
3.44%
3.96%
4.28%
2.92%
3.44%
7.83%
8.51%
15
3.15%
3.66%
8.53%
9.20%
20
2.87%
3.19%
3.99%
4.21%
2.87%
3.19%
7.51%
8.07%
20
3.10%
3.41%
8.13%
8.68%
25
2.88%
3.10%
3.89%
3.98%
2.88%
3.10%
7.13%
7.60%
25
3.10%
3.30%
7.67%
8.13%
30
2.92%
3.09%
3.81%
3.81%
2.92%
3.09%
6.79%
7.19%
30
3.12%
3.27%
7.25%
7.65%
35
2.97%
3.10%
3.76%
3.61%
2.97%
3.10%
6.50%
6.85%
35
3.15%
3.27%
6.90%
7.24%
40
3.02%
3.13%
3.72%
3.43%
3.02%
3.13%
6.27%
6.57%
40
3.17%
3.27%
6.62%
6.92%
45
3.06%
3.16%
3.70%
3.31%
3.06%
3.16%
6.07%
6.34%
45
3.20%
3.29%
6.39%
6.65%
50
3.09%
3.18%
3.67%
3.26%
3.09%
3.18%
5.92%
6.16%
50
3.22%
3.30%
6.20%
6.44%
Time structure of interest rates to be measured under IFRS 17 for the reinsurance assumed and ceded, using the BBA and PAA methods
Currency
EUR
USD
KRW
CNY
INR
Measurement date / year
31 December 2023
31 December 2022
31 December 2023
31 December 2022
31 December 2023
31 December 2022
31 December 2023
31 December 2022
31 December 2023
31 December 2022
1
3.54%
3.49%
4.91%
5.26%
3.69%
4.43%
1.73%
2.15%
8.25%
8.05%
2
2.99%
3.63%
4.32%
4.86%
3.59%
4.22%
2.06%
2.37%
8.52%
8.27%
3
2.80%
3.55%
4.00%
4.54%
3.50%
4.13%
2.29%
2.64%
8.62%
8.48%
4
2.74%
3.52%
3.85%
4.39%
3.50%
4.08%
2.49%
2.84%
8.69%
8.61%
5
2.73%
3.52%
3.78%
4.32%
3.48%
4.02%
2.65%
2.99%
8.73%
8.69%
6
2.74%
3.50%
3.76%
4.23%
3.47%
3.98%
2.75%
3.11%
8.77%
8.75%
7
2.76%
3.48%
3.77%
4.21%
3.47%
3.96%
2.82%
3.21%
8.82%
8.79%
8
2.78%
3.49%
3.78%
4.19%
3.48%
3.95%
2.89%
3.29%
8.87%
8.83%
9
2.81%
3.49%
3.81%
4.19%
3.49%
3.94%
2.94%
3.37%
8.93%
8.87%
10
2.84%
3.52%
3.84%
4.26%
3.49%
3.92%
3.00%
3.43%
8.97%
8.90%
15
2.92%
3.44%
3.96%
4.28%
3.47%
3.76%
3.26%
3.66%
8.80%
8.72%
20
2.87%
3.19%
3.99%
4.21%
3.50%
3.68%
3.46%
3.80%
8.42%
8.34%
25
2.88%
3.10%
3.89%
3.98%
3.52%
3.65%
3.61%
3.91%
8.03%
7.97%
30
2.92%
3.09%
3.81%
3.81%
3.52%
3.63%
3.72%
3.99%
7.70%
7.65%
35
2.97%
3.10%
3.76%
3.61%
3.52%
3.61%
3.82%
4.05%
7.43%
7.38%
40
3.02%
3.13%
3.72%
3.43%
3.52%
3.60%
3.89%
4.10%
7.21%
7.17%
45
3.06%
3.16%
3.70%
3.31%
3.52%
3.58%
3.96%
4.14%
7.03%
6.99%
50
3.09%
3.18%
3.67%
3.26%
3.51%
3.57%
4.01%
4.17%
6.88%
6.84%
409
Appendix F – Fund assets not included in the consolidated financial statements of the Sava Insurance Group
Name and type of fund
Sava Insurance Group company managing the fund
Net asset value as at 31 December 2023
Infond Umbrella Fund
Sava Infond, Družba za Upravljanje d.o.o.
628,604,240
Infond Dividendni, equity sub-fund of developed markets
Sava Infond, Družba za Upravljanje d.o.o.
9,279,123
Infond Družbeno Odgovorni, equity sub-fund of developed markets
Sava Infond, Družba za Upravljanje d.o.o.
22,158,465
Infond Evropa, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
11,102,974
Infond Globalni Defenzivni, mixed sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
30,941,939
Infond Globalni Delniški, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
65,297,706
Infond Globalni Fleksibilni, mixed flexible subfund
Sava Infond, Družba za Upravljanje d.o.o.
20,611,534
Infond Globalni Uravnoteženi, mixed sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
75,748,265
Infond Kitajska, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
3,091,732
Infond Kratkoročne Obveznice – EUR, bond sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
26,155,268
Infond Megatrendi, equity sub-fund of developed markets
Sava Infond, Družba za Upravljanje d.o.o.
2,650,642
Infond Naložbeni Cilj 2040, target date fund
Sava Infond, Družba za Upravljanje d.o.o.
3,892,070
Infond Obvezniški – EUR, bond sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
8,502,518
Infond Razviti trgi, equity sub-fund of developed markets
Sava Infond, Družba za Upravljanje d.o.o.
95,102,387
Infond Select, equity sub-fund of developed markets
Sava Infond, Družba za Upravljanje d.o.o.
17,419,170
Infond Surovine in Energija, bond sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
10,651,108
Infond Tehnologija, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
145,396,112
Infond Trgi v Razvoju, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
28,602,571
Infond ZDA, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
15,029,303
Infond Zdravstvo, equity sub-fund
Sava Infond, Družba za Upravljanje d.o.o.
36,971,353
Sava Penziski Fond Mandatory Fund
Sava Penzisko Društvo a.d.
966,588,349
Sava Penzija Plus Voluntary Fund
Sava Penzisko Društvo a.d.
28,628,715