Zavarovalnica Triglav 2017: Strong GWP growth continues, but bottom line lighter due to CAT claims.

GWP grew 6.8% YoY with growth broad based from segment and country perspective. Non-life up 7%, Health insurance premiums up 13% and life up 3% YoY in 2017. However claims are also higher especially related to CAT events which amounted to EUR 33.5m and are 22% above 10 year average. Consequently EBT stood at EUR 84.4m while profit at EUR 69.7m, both down 11.3% and 15.3% respectively. While this is slightly below our expectations its entirely due to CAT events while results are also in-line with Triglav 2017 guidance. Note 2018 guidance is EBT at  EUR 80-90m with continued growth of GWP. While share price performed well it reached our target price, however we also still believe appropriate valuation of Triglav Group is around P/B 1 (book at EUR 32.98), ROE moving around 10%. While we will adjust our valuations only after annual reports of Triglav and Sava RE are known (scheduled for the beginning of April), we will till then also stick with our buy recommendation based on the book value above and expected continuation of their dividend level offering attractive dividend yield.