• Despite the COVID-19 pandemic, the operations of the Triglav Group and its parent company were successful and profitable.
• Strategic development activities were carried out actively and systematically in accordance with the Triglav Group’s strategy. 
• The Group is financially sound, its capital adequacy is within the target range and the “A” credit rating has a stable medium-term outlook.
• The Group is the leader in both the Adria region, where it has increased its market share, and the Slovene insurance market.
• Premium growth was achieved in most insurance markets and the value of assets under management was increased.

Financial highlights of the Triglav Group

Financial highlights of Zavarovalnica Triglav

Other economic and environmental, social and governance (ESG) aspects of the Triglav Group's operations

Download section Triglav Group and Zavarovalnica Triglav in 2020

Dear Shareholders, Business Partners and Colleagues,

The Triglav Group's operations in 2020 were marked by the COVID-19 pandemic and the persisting low interest rate environment. In this situation, we demonstrated our resilience, maintaining our financial strength and proving our ability to adapt effectively to changes. The situation in the business environment and the capital markets had a negative impact on our profit, but we are nevertheless satisfied with the business results, as they are close to the originally planned. The difficult year behind us confirms that our strategy is well set out and that we are developing into a modern, innovative and dynamic insurance and financial group, which firmly remains the leader both in Slovenia and the wider region.

In view of the already implemented strategic projects and based on the planned projects, business continuity, reliability and client focus were ensured in all markets. We further increased our market share in the largest, Slovenian market by 0.4 percentage point to 36.5%. We are especially pleased that clients rated our work with the highest satisfaction scores to date. We are aware that employees are the main foundation of our success, thus for several years we have been strategically transforming our organisation and culture to be even more cooperative and agile. The results of our efforts are already visible. The team of over 5,300 employees in all seven markets is distinguished by diversity, appropriate stability and cooperation. We are proud that the measurements confirmed this increased satisfaction not only with clients but also with employees.

• “During the COVID-19 pandemic and the low interest rate environment in 2020, the Triglav Group demonstrated its resilience and financial strength.”

In the difficult year of 2020, we pursued our strategic commitment to the long-term and stable profitability of the Group's operations. The Group generated a profit before tax of EUR 90.9 million and achieved an 8.9% return on equity. The result is lower than originally planned and the one achieved the year before, but it is in line with the published interim estimate. It was positively influenced by our underwriting discipline, increased business volume and prudent cost management. On the other hand, the result was affected by the situation in the financial markets (a further decrease in interest income and increase in expenses due to the long-term servicing of investment guarantees), major CAT events (hail storms in three markets and the Zagreb earthquake) and an increase in insurance technical provisions due to the current business conditions. The value of the investment portfolio, which continues to be managed conservatively, grew by 5% to EUR 3,496 million. Its composition was not significantly changed. Through active investment, the shares of individual investment grades were adjusted, thus maintaining the appropriate diversification and security of the entire portfolio. 

The Group with the high, “A” credit rating

During the year, the Group assessed the impact of the situation on its operations according to different scenarios and regularly reported thereon. These assessments showed that the Group’s insurance and investment portfolios are sufficiently resilient and that its capital position is appropriate to effectively cope with any increased risks due to the COVID-19 pandemic. Through comprehensive risk management and prudent capital management, the Group ensured not only an optimal composition of the capital but also its cost-effectiveness. The Group’s strong financial stability, capital adequacy and profitability were confirmed by the credit rating agencies S&P Global Ratings and AM Best, which re-affirmed the Group’s “A” credit rating with a stable medium-term outlook. This is one of our strategic objectives, which ensures an appropriate competitive position of the Group in insurance, reinsurance and financial markets, as it reflects our financial strength and sound performance. 

Good results in insurance and asset management

The volume of written premium rose by 4% to EUR 1,234 million, thus fulfilling the plans, although most countries in the region were marked by the decline in GDP, shrinking insurance markets and fierce competition. Non-life insurance premium increased by 4% and health insurance premium by 11%, while life and pension insurance premium remained at the same level as in the preceding year. Premium growth was recorded in most insurance markets. Growth stood at 3% in the Slovenian market, thus being at the level of market movements, and 4% in markets outside Slovenia. 

• “The situation in the business environment and the capital markets had a negative impact on our profit, but we are nevertheless satisfied with our business results.”

We strategically ensure geographical and product diversification of the total written premium and use an omni-channel approach to our clients. We are gradually increasing the share of premium written in markets outside Slovenia (standing at 18.2% in 2020). In addition to non-life insurance, the share of other insurance classes that are part of our offering is being strengthened (the share of non-life insurance at the Group level decreased to 65.5%). Two-thirds of written premium come from retail clients and the rest from corporate clients, whose share increased by 1.4 percentage points. In addition to major CAT events, the claims experience was affected by the pandemic. The total volume of gross claims paid was 3% lower than in 2019. In addition, we expect that a certain part of claims not incurred in 2020 due to decreased economic activity or other restrictions of the policyholders’ movement will be paid in 2021. For this purpose, appropriate insurance technical provisions were formed. The Group’s combined ratio was 91.2%, which is in the lower end of its average target strategic value range. Compared to the preceding year, it is lower by 0.3 percentage point due to an improvement in both the claims ratio and the expense ratio. 

We are also satisfied with the results of the asset management business. The volume of own insurance portfolio grew by 6% to EUR 2,995 million and the volume of clients' assets in mutual funds and discretionary mandate assets increased by 5% to EUR 1,156 million. Discretionary mandate services are provided by Triglav Skladi, which also manages the investment portfolios of the Group's clients within the framework of unit-linked life insurance and guarantee funds backing supplemental voluntary pension insurance. Following the takeover of the ALTA mutual fund manager, we effectively carried out all integration procedures and brought together 110,000 clients under a single brand. With a 32.9% share in the Slovenian mutual fund market at the end of the year, we are one of the leading asset managers. 

Client focus and development remain at the forefront

The new situation gave additional impetus to the overall digital business transformation of the Group. We have effectively adapted to the changed environment and the behaviour of our clients. Among the achievements that stand out are the upgraded remote business and the consistent implementation of the measures taken to curb the spread of infection and protect the health of employees, clients and other stakeholders. We upgraded and launched new products and assistance services, improved the handling of claims and introduced artificial intelligence in some processes. Furthermore, we strengthened digital sales, communication and distribution channels and tools. By enhancing our digital presence and promoting the use of online and mobile platforms, we have increased the average premium per employee, achieved higher cost-effectiveness and improved user experience by simplifying procedures for our clients. 

We continued to consolidate our own sales network as our most important sales channel, where 73.3% of premium is written. In accordance with the omni-channel approach, our own sales network was supplemented with the external sales network, which contributed to premium growth in individual markets. In 2020, in line with the planned geographical diversification of operations, Zavarovalnica Triglav provided cross-border insurance services in more than 15 EU Member States. Long-term partnerships were expanded from Greece and Italy to the Norwegian and Dutch insurance markets. These forms of business, which are otherwise marginal in terms of premium volume, are considered important in terms of development.

Implementation of the dividend policy

In accordance with the positions of the Slovenian insurance regulator, Zavarovalnica Triglav’s shareholders approved the proposal of the Management Board and the Supervisory Board that the accumulated profit for 2019 remain undistributed. The dividend policy remained unchanged. In its implementation, depending on the circumstances, we take into account the prudent management of the Triglav Group's capital and its financial stability, the need to reinvest profit in the implementation of the growth and development strategy, and the payment of appealing dividends to the shareholders. When the business conditions will normalise, we will be able to continue to implement it by paying dividends.

Commitment to sustainability (ESG)

By pursuing our mission to build a safer future, we are realising our sustainability goals.  At the end of 2020, the Triglav Group's commitment to sustainability was adopted on these principles as a formal document that sets out the direction of the Group’s development in the environmental, social and governance areas (ESG). We committed ourselves, through our activities, to reduce uncertainty in the environment, provide our clients with financial and other security, and create sustainable value for our shareholders and other stakeholders. When designing insurance products, providing services and managing its own portfolios and clients' assets, the Group considers the fundamental aspects of sustainable operations. 

We will remember the previous year as one of the most difficult ever. The pandemic has brought both business and personal challenges and affected us all. We thank our clients for their loyalty, our shareholders for their trust, our employees for their dedication and effort, and all our partners for their constructive cooperation. 

Andrej Slapar
President of the Management Board of Zavarovalnica Triglav

Financial highlights of the Triglav Group business plan for 2021 (EUR million)

Download section Strategy and plans of the Triglav Group

• The redesign of products and assistance services and the way we process loss events were adapted to market needs, which also resulted from the effects of the pandemic.
• Numerous innovations in business digitalisation ensured business continuity and smooth remote business.
• Important changes were introduced to the marketing, sales and after-sales processes.
• A high level of client satisfaction was achieved and user experience was improved with an omni-channel sales approach.
• The i.triglav web platform and the triglav.si and triglav.eu websites were redesigned. 
• Our business transformation focused on the even more efficient operation of support functions, which was also achieved through changes in internal organisation. 
• The revised minimum business standards were implemented in all key and support areas of Zavarovalnica Triglav’s subsidiaries.
• The new system for effective and close cooperation in the management of the Group's assets is now operational.

In 2020, in accordance with the plans from the development phase, the largest range of new solutions so far was put into business practice and numerous business processes were upgraded, which had a positive impact on operations in difficult conditions. Client focus and development of related services was fully integrated with the implementation of the second strategic guideline, i.e. developing cooperative and agile organisation and culture. The set objectives were fulfilled by making progress in both areas, with several objectives even being exceeded. The Company is especially proud of the high satisfaction of its clients and employees, which will also be a challenge in the future.  

Digital sales and communication channels and distribution channels and tools were significantly strengthened. New digital solutions and services that are always available and easy to use include: 

• the redesigned i.triglav web office for retail clients (design upgrade, adaptive design for mobile devices and additional functionalities: remote signing, video identification, additional security mechanisms, claim reporting, simple and fast notification of clients about their claim settlement procedure and the option of confirming all issued documents);
• the automated notification of all clients who have opted to receive information about reported claims electronically (to ensure quick responses and notification via selected communication channels);
• redesigned websites triglav.si and triglav.eu (design upgrade, adaptive design for mobile devices, upgraded underwriting procedures and new functionalities);
• the upgraded process of taking out life insurance (adaptive design for mobile devices, more transparent and simpler), which includes a simplified way of signing documents remotely;
• the completely redesigned Drajv mobile application (revamped image, expanded functionalities: display of current speed and speed limit on a given road section and immediate warning of driving errors, the option of automatic recording of journeys, etc. (the visibility of the products and services available online is enhanced by advanced technological services such as Triglav vreme (Triglav Weather) and Vse bo v redu (Everything Will Be Alright); 
• remote inspection of the subject insured by capturing images for the purposes of taking out insurance or assessing damage (added functionality for capturing and storing images in back office information systems);
• video identification and verification of the identity of the insured person (the procedure is primarily intended for taking out life insurance); 
• remote signing of documents;
• inclusion of a dynamic questionnaire on the state of health in underwriting applications for life insurance (by digitalising insurance underwriting, the average time from making an insurance offer to underwriting has been shortened); 
• digitalisation of printing documents on insurance policies taken out via the bank sales network;
• IT support to sales staff when reporting clients’ claims;
• development of the Smart Locator service in assistance insurance for locating the victims (for easy determination of the exact location of the client in need of help using a smartphone).

The widespread use of digital channels and new communication tools has enabled the Company to carefully monitor the quality of the user experience and client satisfaction. This was made possible by increasing the scope of interaction points between the Group and clients and the data provided by clients as a response to the services used. 

The findings of client satisfaction measurements and analyses, which were submitted to a wide range of business functions, were included in the improvements of internal processes and services. This particularly applies to the information provided by the Net Promoter Score (NPS) methodology to improve communication and client relationships. The highest scores ever were measured since the start of measurements using this method; the scores rose to above-average levels. The results of other analyses of measured client satisfaction also improved significantly.

Download section Development and marketing activities

• The COVID-19 pandemic resulted in the contraction of most insurance markets (with the exception of the Slovenian and Serbian insurance markets) and the fall in GDP of the countries where the Triglav Group operates.
• Premium growth was recorded in most insurance markets of the Group and in the non-life and health insurance segments.
• The Group maintained its leading market position in Slovenia, Montenegro and North Macedonia. Its market share improved in Bosnia and Herzegovina, Slovenia, Croatia and Serbia. 
• Unlike the year before, the year 2020 was less favourable in terms of major CAT events.
• Premium growth was higher than the growth in operating expenses of the insurance business. 
• Low interest rates continued to reduce rates of return on investment.

Net profit before tax in EUR million

* Interim estimate: a 10–25% decline in the planned profit before tax

Consolidated gross written premium of the Triglav Group by segment

Consolidated insurance, coinsurance and reinsurance premiums of the Triglav Group by market  

Combined ratio of the Triglav Group

The structure of investments of the Triglav Group as at 31 December 2020

Download section Operations of the Triglav Group and Zavarovalnica Triglav

• Zavarovalnica Triglav is the third largest listed company in Slovenia, and its share is one of the most liquid shares on the Ljubljana Stock Exchange.
• The General Meeting of Shareholders decided to keep the accumulated profit for 2019 undistributed as called upon by the Slovenian insurance sector regulator.  
• The Triglav Group was again assigned the high credit rating of “A” with a stable medium-term outlook. 
• There were no significant changes in the shareholder structure of Zavarovalnica Triglav in 2020.

Key figures relating to the share of Zavarovalnica Triglav

Top ten shareholders of Zavarovalnica Triglav as at 31 December 2020 and their stakes

Dividend payments in 2016–2020

The free float shareholder structure of Zavarovalnica Triglav by the country of origin of shareholder/subscriber in the share register as at 31 December 2020

Information for shareholders:

Zavarovalnica Triglav, d.d., Ljubljana
Miklošičeva cesta 19, 1000 Ljubljana
Ms Helena Ulaga Kitek, Head of Investor Relations
Telephone: +386 (1) 47 47 331
Email: investor.relations@triglav.si

Download section The share and shareholders of Zavarovalnica Triglav

• Despite the uncertainties brought about by the COVID-19 pandemic, the Triglav Group was adequately capitalised and liquid, which is also reflected in the reaffirmed “A” credit rating.
• In the reporting year, the Triglav Group showed a sufficient degree of preparedness and adaptability to an extraordinary situation, as during the pandemic no material operational risk was realised.
• Increased market risks in insurance segments were actively managed by pursuing optimal matching of assets and liabilities, prudent risk-taking and ensuring appropriate diversification of exposures. 

Risk management process

The capital management strategic objectives and the dividend policy criteria

Capital adequacy of the Triglav Group and Zavarovalnica Triglav

Download section Risk management

Solvency and Financial Condition Report Zavarovalnica Triglav, d.d. 2020

Solvency and Financial Condition Report Triglav Group 2020

• The Triglav Group’s commitment to sustainability was adopted. 
• Sustainability aspects have been incorporated into asset management. The new Triglav Zeleni sub-fund invests in socially and environmentally responsible projects and companies. 
• Compared to the preceding year, the Triglav Group’s organisational vitality improved by 0.12 percentage point. A survey showed that the Triglav Group responds appropriately to changes in the environment.
• The spread of COVID-19 was limited with a number of measures designed to protect the health of clients and employees, including those working from home. Preventive activities in health were also strengthened. 
• For more accessible remote business, the Triglav Group enabled its clients to digitally sign and conclude some insurance policies via video identification, as well as simplified asset management and claim settlement processes with mobile applications. 
• Electricity consumption was reduced by 9% at the Triglav Group and by 10% at Zavarovalnica Triglav.

The Triglav Group understands sustainable development as the realisation of its mission by building quality and long-term relationships with key stakeholders. Therefore, its business performance has been assessed also in terms of sustainability aspects for many years. 

At the end of 2020, the Triglav Group's commitment to sustainability was adopted as the main document that sets the direction of the Group’s development in the environmental, social and governance areas (Environment, Social, Governance – ESG). In addition, the process of creating central holders and responsibilities for the comprehensive development and implementation of sustainable principles in the Group's operations continued. 

In its commitment to sustainability, the Group committed itself, through its activities, to reduce uncertainty in the environment, provide its clients with financial and other security, and create sustainable value for its shareholders and other stakeholders. When designing insurance products, providing services and managing its own portfolios and clients' assets, the Group considers fundamental aspects of sustainable operations.

The Triglav Group's commitment to sustainability

Which of our projects means the most to you

Presentation of key ESG factors and main SDGs at the Triglav Group

Mobile appraisal units and services

Extreme weather conditions, especially severe hail and heavy storms, cause mass damage to vehicles. For a simple and fast appraisal near your home, mobile appraisal units with a light tunnel are set up, such as the ones set up in Ljubljana and Trzin in early August. You can report a claim before actually visiting us by using different channels, the Triglav asistenca mobile application or calling the toll-free number. Clients are encouraged to report damage to vehicles and real property remotely. A new, electronic module for reporting claims was introduced for agents.

Digital workshops and remote consultation with experts

Remote consultation with experts was provided at the Triglav Lab digital laboratory. Among the most visited were workshops with health specialists, who advised on how to improve health and what to do in case of an illness, and answered questions. There was particular interest in digital workshops led by Associate Professor Dr Nataša Tul Mandić, an obstetrics and gynaecology specialist from the Postojna Maternity Hospital. With her help, expectant mothers overcame many insecurities and were better prepared for childbirth and child care.

Digital signs for the safety of pedestrians

Pedestrians are most exposed to traffic risks. The innovative COPS@zebra warning signs alert pedestrians to an oncoming vehicle and its speed. The majority of surveyed pedestrians felt safer because of the installed sign. The measured speeds showed that most drivers slowed down at crossings where these signs were installed. In August 2020, additional test signs were installed at the pedestrian crossing in Maribor at the intersection of Ljubljanska ulica, Šilihova ulica and Trg Miloša Zidanška. The project will continue; in 2021, another 12 dangerous pedestrian crossings will be equipped in cooperation with the COPS systems company.

Download section Sustainable development and the ESG aspects at the Triglav Group