Plans of the Triglav Group for 2014

The Triglav Group business plan for 2014 was produced on the basis of strategic starting points and objectives of the Group for the period 2013–2017. By doing so, market potentials and circumstances in the insurance markets covered by the Group were taken into account as well as forecasts of respective macroeconomic trends in those markets for 2014.

The starting points of the plan are focusing on the core insurance business, achieving the highest possible profitability and safety of operations. The economic and financial crisis will have an impact on the core business – insurance operations, exposing the Company to the risks of lower demand for some insurance products, policyholders defaulting on the payment of premiums and risks related to the selection of underwriting risks.

The crisis, among others, will be reflected in a lower economic activity, reduction in exports and imports, new corporate bankruptcies, reduced purchasing power of households, higher unemployment rate, lower bank crediting, etc.

Financial highlights of the Triglav Group business plan for 2014

2014 plan

Gross written premium from insurance and co-insurance contracts

EUR 902.1 million

Gross claims settled

EUR 668.5 million

Profit/loss before tax

EUR 75.9 million

Net profit or loss

EUR 65.6 million

Equity as at 31 Dec.

EUR 606.1 million

Combined ratio in non-life insurance


Net profit/loss: Net profit of the Triglav Group is planned at EUR 65.6 million, whereas net profit before tax will amount to EUR 75.9 million. Bearing in mind the poor economic situation of markets, on which the Triglav Group operates, the Group has set itself very ambitious objectives. The combined ratio – a ratio between total non-life insurance expenses and net premium earned – will reach 96.3%.

The basic objective of the Triglav Group’s insurance subsidiaries for 2014 is an on-going improvement of profit and loss arising from their core business and combined ratio. The budgeted combined ratios of all insurance subsidiaries are planned to be lower than 100% by the end of the strategic period.

Premium trends: Sales activities in 2014 will be even more focused on clients and on developing and increasing the efficiency of internal and external sales network. In the marketing approach, emphasis will be placed on the quality, simplicity, transparency and a high standard of services, supplemented with a penetrating market strategy. Despite a tight economic situation, the Triglav Group plans to book EUR 902.1 million in consolidated gross written premium or approximately the same as in 2013. The parent company, Zavarovalnica Triglav, plans a lower premium compared to 2013, which predominantly results from a high number of maturities due to the aging of the portfolio and due to surrenders, foreseen measures for retaining solid and loyal clients with client loyalty programmes, price adjustments to match competition as well as measures to improve the insurance technical result of individual non-life insurance classes.

Loss events: In 2014, a slightly increased number of loss events is planned, which will require regular adjustments to the reinsurance protection programme. Due to the developments in recent years and the ever more frequent mass catastrophe claims (hail, floods, storms, etc.), the Company expects an increased number of loss events. According to the plan, consolidated gross claims paid by the Triglav Group will amount to EUR 668.5 million. Due to an increased number of loss events, more expensive reinsurance protection and smaller volume of premiums, the claims ratio is expected to decrease to 67.5%. Technological, process and organisational improvements will be continually made to the claim settlement procedure, in line with the strategic objectives. By enhancing professionalism of employees and contracted partners, the Company will ensure a correct execution, quality and speedy completion time of loss adjustment procedures.

Cost management: According to anticipations, gross operating expenses will remain at a level approximately equal to 2013, aiming at keeping the share of operating costs in gross written premium round the 2013 year-end level. Due to large IT investments, a high growth in depreciation is planned. The cost reduction measures will be predominantly focused on those types of costs that are not directly related to insurance acquisition.

Investment: The Group plans a restrictive policy of investments in real property, equipment and intangible assets, primarily aimed at strategic projects in IT and general affairs as well as most urgent maintenance.

Financial investments: Adequate levels of investment security and liquidity will remain at the forefront of the Triglav Group’s investment guidelines. These will be followed by the criterion of profitability. In view of an uncertain economic situation it is estimated that the uncertain outcome of the debt crisis and its effect on the Company’s exposure to financial risks will continue to present the greatest risk. The credit risk (counterparty’s default risk) of government securities remains high as well as the risk of changes in credit spreads.

Risk management: The main goal in risk management is to set up an economic capital model for the asset and liability management of Zavarovalnica Triglav. The target model will ensure that risk exposure is within the limits of the defined appetite and profitability within the strategic objectives and that the Company will have sufficient capital to ensure compliance with the requirements of credit rating agencies as well as those of Solvency I and Solvency II at any time.

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