Sava Re 1Q18: Positive GWP dynamic spoiled by combined ratio, albeit it should smooth out till year end.
Sava RE Group reported 4.4% YoY growth of GWP will growth present in all segments but life in Slovenia, where past policies are maturing. GWP of EUR 167m is in-line with our expectations. However combined ratio increased from 94.6% to 98.8% (FX adjusted) as cost had a special one-off dynamic that should smoothen throughout the year, while claims part was spoiled by two world events (Shanghai – shipping accident, Africa – brick melting plant). Again this could smoothen out through the year. Consequently profit halved to EUR 4.6m and fell short of our EUR 10.8m expectations. However management remains confident that they will reach not only their goal of above EUR 520m GWP but also profit range of EUR 37 to 39m. Please note we are expecting profit of EUR 35.9m. Therefore for now estimates for 2018 remain unchanged as well as our target price EUR 23.9. This positive view is confirmed by recent hefty price Generali paid for Sava RE competitor Adriatic Slovenica.
Pozavarovalnica Sava dd (or Sava Reinsurance Plc), also known as Sava Re dd, is a Slovenia-based reinsurance undertaking. It operates as a parent company of Sava Re Group, which comprises direct insurance and pension undertakings. The Company's activities are divided into four segments: Reinsurance operations, Non-life insurance operations, Life insurance operations and Other business segment. The Reinsurance operations segment comprises treaty and facultative arrangements for intra-group clients and insurance and reinsurance partners worldwide. The Non-life insurance operations segment supports local markets with non-life insurance products and customer oriented services. The Life insurance operations segment is focused on life protection and saving products, including pension schemes. The Other business segment comprises operations of the Company's non-insurance subsidiaries. Sava Re Group operates through subsidiaries in Slovenia, Croatia, Serbia, Macedonia, Montenegro and Kosovo.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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