Objectives achieved by the Triglav Group in 2013
The Triglav Group continued to implement its strategy, placing focus on the core insurance business, profitability and safety of operations. Despite a difficult economic and market situation, the Group generated net profit totalling EUR 69.9 million, and surpassed the 2013 budgeted level by as much as 27%. It managed to keep high financial stability achieved by prudent management of business and financial risks, as confirmed by credit rating agencies Standard & Poor’s and A.M. Best, which both upgraded the credit ratings of Zavarovalnica Triglav and Pozavarovalnica Triglav Re to »A-«. These ratings were assigned a stable medium-term outlook and reflect their supportive risk-adjusted capitalisation, good operating performance and strong competitive position of the Triglav Group within the Slovene market (see also Section 5.8 Credit rating of the Triglav Group and Zavarovalnica Triglav for more details).
The trends related to the economic crisis persist and continue to decrease the total written premium. Total written premium of the Triglav Group decreased by 4% compared to 2012 and was 4% below the budgeted level. Falling purchasing power of households resulted in lower insurance density, accompanied by a high unemployment rate, a decline in activities of economic entities, lower demand for some insurance products and extremely fierce competition. A drop in total written premium can also be attributed to a redefined marketing and sales policy, the purpose of which was to maintain and sustain the portfolio, as well as the result of measures for improving the insurance technical result of individual non-life insurance classes. Intensive management of the non-life insurance portfolio led to a favourable combined ratio. Therefore, the combined ratio of the Triglav Group – a measure of profitability in core insurance operations – reached 91.0%, exceeding the budgeted level by 3.7 percentage points. Return on equity of the Triglav Group and of Zavarovalnica Triglav in 2013 was 12% and 9.6% respectively.
Gross claims paid were 3% lower than planned and 2% higher than the preceding year. The profit level was also affected by individual mass loss events. The biggest damage was caused by an ice and snow storm in January affecting the entire Slovenia. The flood events in Central and Eastern Europe at the end of May and in the beginning of June impacted the business results of Triglav Pojišt'ovna and Pozavarovalnica Triglav Re (for details see Section 7 .2 Environmental impact on the performance of the Triglav Group).
The Company’s business results are heavily influenced by the situation on capital markets, as diverse financial investments represent the majority of the Company’s total assets. The global financial crisis caused market slumps. Despite a conservative investment policy of the Triglav Group, the value of some portfolio investments decreased, mainly resulting in a lower net operating profit. Financial assets were permanently impaired by EUR 28.1 million. The Company regularly met liquidity requirements and managed its investment portfolio in adherence to the principles of security, liquidity and profitability. Return on financial investments decreased by 3% over 2012, mainly as a result of a lower return on long-term business fund backing unit-linked life insurance.
The value of Zavarovalnica Triglav’s share (bearing the ticker symbol ZVTG), which is listed on the Ljubljana Stock Exchange, was marked by the exchange rate growth and increased liquidity. The closing price of the share had increased by 15% since the end of 2012 and equalled EUR 19 at the end of 2013. The ZVTG share was the second most traded equity on the Ljubljana Stock Exchange, accounting for 16% of total trading volume. The average daily turnover in 2013 was more than twice as high as the 2012 average. Apart from that, the share of international investors increased by almost 7 percentage points to 16.6% – for more information see Section 5. Share capital and shareholders of Zavarovalnica Triglav.
The total equity of the Triglav Group as at 31 December 2013 reached EUR 590.5 million, which was 3% more than as at the 2012 year-end. The portion of equity in the balance sheet total increased by 0.8 percentage point compared to 31 December 2012, reaching 19.2 % (for more information see Section 9.1 Equity and liabilities).
 GRI G4-9