Triglav Group's financial report for H1 2024

In accordance with the Ljubljana Stock Exchange Rules and the applicable legislation, ZAVAROVALNICA TRIGLAV d.d., Ljubljana is hereby publishing the following notice:

The Triglav Group delivered a strong performance in the first half of 2024. The Group's total business volume of EUR 942.9 million was down by 2% year-on-year; however, when factoring in the effect of the shortfall in supplemental health insurance premium, it recorded a 9% growth. The Group's earnings before tax stood at EUR 89.5 million (H1 2023: EUR 12.1 million) and its net earnings amounted to EUR 75.4 million (H1 2023: EUR 11.4 million).  While all the Group's business segments performed well, the insurance business of the Non-Life segment contributed the most to these strong results. The Group's claims performance was relatively favourable in the first half of the year, with estimated claims from CAT events not significantly deviating from the levels of previous years. At the half-year point, the Group assesses that it will exceed its planned annual earnings before tax, projecting a range of EUR 130 - 150 million. The Group continues to maintain its financial stability and capitalisation at adequate levels this year, consistently pursuing its strategy towards growth, development and sustainable ambitions, while striving to be a stable, safe and profitable investment for investors.

TRIGLAV GROUP'S EARNINGS

In the first half of 2024, the Group's earnings before tax stood at EUR 89.5 million (H1 2023: EUR 12.1 million) and its net earnings amounted to EUR 75.4 million (H1 2023: EUR 11.4 million). Zavarovalnica Triglav, the Group's parent company, generated earnings before tax of EUR 63.4 million (H1 2023: EUR 29.1 million) and net earnings of EUR 53.8 million (H1 2023: EUR 24.6 million). Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, said: "Following a year marked by one-off events that adversely impacted our results, we anticipated that our business operations would normalise this year in line with our strategy. We are pleased that, at the halfway mark, this expectation has proven accurate, with positive outcomes in the first half of the year, as the second quarter was as promising as the first quarter. All business segments contributed to the Group's strong half-year results, with the insurance business of the Non-Life segment having the greatest impact."

The Group generated over two-thirds of its half-year earnings before tax, totalling EUR 62.1 million, from its insurance business. The Non-Life segment alone accounted for EUR 52.2 million (H1 2023: EUR 20.3 million). This was driven by higher client insurance coverage and, in international markets, by increased sales based on the principle of freedom of services (FOS business), with the additional impact of past increases in premium rates and a range of underwriting measures. The insurance business of the Life segment generated earnings of EUR 9.8 million (H1 2023: EUR 5.6 million), while the Health segment, after last year's loss, returned to profitability this year. The result from investment activities reached EUR 20.8 million (H1 2023: EUR 14.0 million), predominantly driven by higher interest income. The result from non-insurance operations amounted to EUR 6.6 million (H1 2023: EUR 4.3 million) and mainly stemmed from the management of clients' assets in mutual funds and discretionary mandate assets.

With respect to the Group's operations until the end of the year, Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, added: "We have planned to generate earnings before tax of the Triglav Group of EUR 100–120 million in 2024. At the half year, we estimate that we will exceed it, projecting a range of EUR 130 - 150 million. This estimate considers the expected business environment through year-end, with CAT claims remaining the most uncertain factor, typically being more intense in the second and third quarters of the year. We have ambitious goals and all our Triglav employees are working hard to achieve them, for which I would like to extend my sincere gratitude."

TRIGLAV GROUP'S FINANCIAL HIGHLIGHTS IN THE FIRST HALF OF 2024

The Group's total business volume amounted to EUR 942.9 million, down by 2% year-on-year; however, when factoring in the effect of the shortfall in supplemental health insurance premium, it recorded a 9% growth. Apart from Slovenia, where the business volume was affected by the aforementioned factor, the Group's written premium increased in most other markets in the Adria region, achieving an overall growth of 7%, and experienced a 16% growth in the wider international environment. In terms of the geographical structure of written premium, the Group effectively continued to strengthen the share of premium written in the markets outside of Slovenia, which increased to 20.6% (H1 2023: 18.6%); the share in Slovenia decreased to 57.9% (H1 2023: 63.3%), while the share in international insurance and reinsurance reached 21.6% (H1 2023: 18.1%).

The Group's claims performance was relatively favourable in the first half of the year. Claims incurred at Group level in the total amount of EUR 287.3 million fell by 34% year-on-year, having declined in all three insurance segments, but most markedly in the Health segment. This was mainly due to the termination of supplemental health insurance this year. In the reporting period, the estimated value of CAT claims was EUR 10.0 million, which is consistent with the levels observed in previous years. The Group's operating expenses, including other attributable insurance service expenses, increased by 4% to EUR 214.6 million. In line with the Group's activities, labour costs accounted for the largest share, standing at 45%, while acquisition costs recorded the highest growth (18%). The latter is the result of increased business volume in the markets outside of the Adria region and sales through external sales channels.

The combined ratio of the Non-Life and Health segments stood at a favourable 90.6% (H1 2023: 102.0%) in the first half of 2024. The new business margin of the Life segment reached 14.1% (H1 2023: 13.1%). Other comprehensive income amounted to EUR 3.8 million (H1 2023: EUR 9.3 million). Annualised return on equity was 17.3% (H1 2023: 2.6%), primarily due to a higher net earnings. Uroš Ivanc, a Management Board member of Zavarovalnica Triglav, said: "Our indicators have improved markedly compared to the past period. The combined ratio of the Non-Life and Health segments is favourable, mainly driven by a lower claims ratio as a result of increased business volume and numerous implemented underwriting and risk management measures."

The Group's total assets under management as at 30 June 2024 amounted to EUR 5,329.3 million, up by 10% relative to 31 December 2023. Of these, the Group companies managed own funds, unit-linked insurance assets and financial investments from financial contracts in the total amount of EUR 3,572.1 million (up by 5% relative to the 2023 year-end). The structure of this portfolio is comparable to the balance as at 31 December 2023. The rate of return on Group investments (excluding unit-linked insurance assets) rose by 1.1 percentage points year-on-year to 3.0%.

The Group remains financially stable and maintains liquidity and capitalisation at adequate levels. This is confirmed by the high "A" credit rating with a stable medium-term outlook assigned this year by the S&P rating agency. Uroš Ivanc, a Management Board member of Zavarovalnica Triglav, said: "We carefully manage the risks to which we are exposed. In line with our ongoing efforts to effectively manage the Group's capital, we successfully issued a new subordinated bond in early July."

The Group is continuing its efforts to rationalise and optimise its operations this year. Andrej Slapar, President of the Management Board of Zavarovalnica Triglav, added: "Following last year's regulation of supplemental health insurance prices in Slovenia and the subsequent discontinuation of these products this year, we have begun the process of merging the subsidiary health insurance company with the parent company. In early July, we accepted the compensation offered in accordance with the relevant government decree."

The Group consistently adheres to its strategic guidelines. This year, the Group is again focusing on its clients by developing insurance products, digitalising and automating claims and other processes, and prudently deploying artificial intelligence. As an insurance and finance group, it has been actively promoting financial literacy and raising public awareness about risk exposure both at home and on the road. This year, it has further educated clients on natural disaster risk assessments, covering floods, earthquakes, hail and lightning. In its operations, the Group adheres to its commitment to sustainability, which is reflected in every aspect of its activities, including efforts to reduce its carbon footprint and to promote equality and transparency.

This information will be published on the website of Zavarovalnica Triglav d.d. at www.triglav.eu as of 22 August 2024 and will remain available on the Company’s public website for a period of at least ten years.