Ljubljana, 24 May (STA) - Net profit at insurance group Sava Re halved to EUR 4.6m and pre-tax profit dropped by 42% to EUR 6.6m in January-March compared to the same period last year. The group collected EUR 167m in gross premiums, a yearly increase of 4.4%, show unaudited results released on Thursday.
The group attributed the drop to adverse developments in claims in its international markets and seasonal costs fluctuations, but believes they will be offset by the end of the year.
Despite the lacklustre result in the first quarter, the management believes it will meet its end-year goals.
The group's premium rose on account of non-life insurance in Slovenia, which increased by 5.8%, non-life insurance abroad (20.5%), life insurance abroad (19.3%) and reinsurance (1.4%).
On the other hand, there was an expected decline in gross life insurance premiums (-8.9%), because a significant number of policies matured.
According to the report, Sava Re wrote 32.1% of the target premium for this year.
On the other hand, gross paid claims rose by 11% to EUR 90.4m. Two major events abroad and several minor events in Slovenia contributed to the increase in claims, as well as movements in provisions for outstanding claims.
In the same period last year, parts of the group's provisions for outstanding claims benefited from synergies created with the merger of affiliated insurance companies Zavarovalnica Maribor and Tilia.
Sava Re, Slovenia's second largest insurance group, continued to implement its growth strategy through takeovers. In January, the group integrated the Slovenian assistance service provider TBS Team 24, and acquired the Macedonian pension fund NLB Nov penziski fond and the Serbian insurer Energoprojekt Garant in March.
New members of the group will contribute "to income and profitability from the second quarter onwards", the group said in the report.
Additionally, Sava Re signed in April a contract on the acquisition of Croatian insurers Ergo Osiguranje and Ergo Životno Osiguranje with insurers Ergo Austria International and Ergo Versicherung Aktiengesellschaft.