November 18 (SeeNews) - Slovenia's biggest insurer, Zavarovalnica Triglav [LJE:ZVTG], said on Friday its consolidated net profit fell 34% year-on-year to 53.6 million euro ($56.9 million) in the first nine months of 2016, affected by weather-related events.
The group’s gross written premiums from insurance and co-insurance contracts in the first nine months edged up 0.3% to 720.7 million euro, Triglav said in a filing with the Ljubljana Stock Exchange.
However, taking into account the sale of the Czech subsidiary in 2015, the group recorded a 2% premium growth, Triglav noted.
"In contrast to 2015, in 2016 the core insurance business has been affected by mass loss events, the largest being the summer storms with hail and the April frost and local flooding in Slovenia. Mass loss events totalled 19 million euro in the reporting period, the latter in particular affected the increase of the Group’s combined ratio to 95.0% in the reporting period, which is in line with the long-term target strategic average value of the combined ratio", Triglav explained.
The company's gross written premiums in the non-life sector rose 1% on the year to 478.5 million euro, while premiums in the life insurance branch dropped 2% to 157.5 million euro, primarily due to high sums paid out on the maturity of insurance policies. Health insurance premiums increased 4% to 84.7 million euro.
A total of 82.7% of consolidated gross written premium was charged in the Slovene insurance market, which was 0.1 percentage point less than in the corresponding period of 2015.
In Slovenia, the insurance premium of Zavarovalnica Triglav was 1% lower compared to 2015, whilst that of Triglav, Zdravstvena zavarovalnica and that of Skupna pokojninska druzba increased by 4%.
In terms of results abroad, Triglav Osiguranje Belgrade saw an increase of premium by 22%, whilst Triglav Osiguranje Zagreb saw an 11% premium growth and Triglav Osiguranje, Sarajevo a 10% growth. Lovcen Osiguranje and Lovcen zivotna osiguranja experienced a 2% premium growth. Lower premium was recorded in Triglav Osiguruvanje, Skopje and Triglav Osiguranje, Banja Luka - by 1% and by 3% respectively.
Return on financial investments of the group decreased by 21% over the respective period of 2015, primarily as the result of lower net gains on the sale of financial assets.
"The international financial markets were affected by the uncertainty, the weak global economic growth, low inflationary expectations and the effects related to the Brexit, resulting in the unfavourable environment of record-low or even zero interest rates and a high volatility of stock markets. A rapid improvement of the conditions in the financial markets is not expected", Triglav said.
Triglav employed 5,052 at the end of September, down 6% from a year earlier. Triglav Group held a 37% market share in the Slovene insurance market as at the reporting date.
($=0.943511 euro)