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Milorad Bosnić, President of the Executive Board of Sava non-life insurance

A Partnership Insured with Security

Our company has an adequate level of technical reserves. On the last day of last year, this amounted to 2.3 billion dinars, which is the same as the gross premium invoiced for the same year. The available solvency margin is 4.4 times higher than legally prescribed, which shows that we are a company that has a very high level of capital adequacy. Moreover, our decades-long positive experience in the Serbian insurance market is one of our advantages we always emphasize.

Mr. Milorad Bosnić, President of the Executive Board of Sava non-life insurance speaks for Profit magazine.

1.Sava Re Group posted a record profit in 2018. Which portion of business success belongs to Sava non-life insurance, and which segments achieved the biggest growth?

Based on the non-audited financial statements published by the Sava Re Group, a record profit of 43 million euros was posted in 2018. Furthermore, the Group also achieved a significant growth in total premium. Therefore, in 2018 this amounted to 546.3 million euros, which is around 5.6% more compared to 2017. Our contribution to the success of the Group is constantly growing even though our involvement in the realized gross premium and the results of the Group is relatively not very high. The reason for this is that Sava Re Group is getting the biggest part of its income from the Slovenian market. Compared to the market of the whole region where Sava Re Group does business, I want to point out that the Companies in Serbia have the highest growth of gross premium invoiced in the entire Group in 2018 (including companies from the EU). In relation to 2017, that growth has amounted to over 23%, and more importantly for us is the fact that our growth was well above the growth of the Serbian market, which showed growth of about 8 percent. It is my pleasure to point out that Sava non-life insurance also made a record profit after tax of over 1 million euros in 2018, as well as an insurance premium of over 19 million euros. Here, I especially want to emphasize that we have achieved the biggest growth in property insurance, over 36% compared to the last year, which is our most important strategic objective in the coming period.

2.The insurance market is consolidating, not only in Serbia, but also throughout the region. Insurers change their strategies and leave certain markets to focus on others. In that sense, what is Sava non-life insurance’s strategy concerning doing business in Serbia?

In local markets in the region, there are a number of insurance companies and several groups for insurance and reinsurance which we can expect, due to a tighter regulatory environment, increasing the number of acquisitions and similar transactions with the aim of better positioning and improving insurance offers.

At the end of last year and in the first quarter of this year, Sava Re Group successfully completed three acquisitions: the pension fund NLB New Pension Fund from Northern Macedonia is now the Sava pension fund, Energoprojekt Garant from Serbia merged with our company, and we purchased TBS Team 24 from Slovenia.

Furthermore, a few years ago, our group bought the portfolio of AS insurance, which operated in the Serbian market. Based on the previously mentioned acquisition by the Sava Re Group, it is easy to see that the Serbian insurance market is strategically very important for further development.

If there is an adequate opportunity for a new acquisitions in the Serbian market, I am sure that our Group will be very active in pursuing them in order to continue growth and to increase market share.

In addition to new acquisitions for the coming period, we also emphasize organic growth through our two existing companies in Serbia that operate in the Sava Re Group. These are Sava non-life and life insurance, both of great importance.

3.How do business and the investment environment in our country affect the development of the insurance market?

The improving business and investment environment, as well as the work on improving legal security significantly influence the development of investment activities. The presence of a stable business environment, which has been available on the market for a number of years, is extremely important for investors. We emphasize the positive role our regulator, the National Bank of Serbia (NBS) has had through its activities and measures in strengthening the stable development of the Serbian financial market.

A very low reference interest rate, which now stands at 3 percent, a low inflation of around 2% per year, as well as the forecast of 3.5% GDP growth in 2019 are the parameters which we expect to positively influence the overall investment environment.

Our expectations are that the NBS will continue to contribute to fostering sustainable economic growth, as well as maintaining the stability of the insurance market.

From the point of view of the insurer, a developed insurance sector is the basis for the further development not only of the economy, but also the protection of property of the country, companies, and citizens.

4.How developed is the insurance business in Serbia compared to the region, and how high is our consumption (premium per citizen) in relation to the EU?

In addition to all the positive macroeconomic measures and forecasts, insurance development in our country is held back by long-term obstacles and problems such as a low standard of living and people who lack the understanding of the advantages and benefits they can have from insurance, can affect the amount of premiums which per capita in Serbia is about EUR 102 per annum. In neighboring Croatia, the insurance premium per capita is EUR 290, while in Slovenia it is over EUR 1,020 annually.

In our country, the share of the insurance premium amounts to 2.1% in gross domestic product, while in the countries of the European Union this is as high as 7.4%.

However, there is no doubt that the Serbian insurance market has great potential for even greater growth. We believe that the gradual economic growth will improve the living standard and that this will lead to greater engagement with, and the necessary activities of all participants in, the insurance market. This will lead to a reduction of the influence of numerous obstacles, resulting in the quicker development of insurance.

5.Since clients consider quality of service very important when they are deciding on an insurance company, what does your company do to guarantee quality?

We are aware that our policyholders primarily expect from us reliability and quality in terms of settling any assumed obligation. Based on all indicators used to measure the stability of insurance companies, we are in the positive. Our company has an adequate level of technical reserves. On the last day of last year, this amounted to 2.3 billion dinars, which is the same as the gross premium invoiced for the same year. The available solvency margin is 4.4 times higher than legally prescribed, which shows that we are a company that has a very high level of capital adequacy.

Also, out of all of the parameters which form the basis for measuring quality of service, I want to point out our high-quality and easily accessible offers of almost all types of insurance, and the speed in processing and paying out damages, represent our greatest competitive advantage. We assess the availability of our products using two aspects: The number of types of insurance we offer to the policyholders, and the amount of premium we charge. Moreover, our decades-long positive experience in the Serbian insurance market is one of our advantages we always emphasize.

6.Sava non-life insurance from the very beginning has worked on incorporating new technologies. You recently introduced a new system of insurance sales via an Internet shop. Which types of travel insurance are available to users of this system, and did the new system prove to be more effective than traditional methods of purchase?

In accordance with the growth strategy and the implementation of plans for the digitalization of business processes, we have created a new online sales channel for the Travel medical insurance and Travel insurance packages. Our portfolio is experiencing constant growth due to the Travel medical insurance premium. In the last year, we sold about 106,000 policies of travel insurance.

The number of the policyholders is increasing every year in the segment of online sales, thereby confirming that clients want a quick and easy service that is more effective both for them and for the insurance companies. Although traditional communication approaches are increasingly becoming an afterthought, they must not be left behind because there are generations of people that are accustomed to them and traditional forms of communication that remain a significant market share and potential for insurance in Serbia.

7.You pay a lot of attention to socially responsible business practices. How do you choose what you support, that is, what are your guiding principles?

Last year we supported several major projects in the field of sports and culture, and we helped with the realization of several humanitarian causes.

As a member of Sava Re Group, and taking part in corporate social responsibility, we elected World Water Day on the 22nd of March to be Sava Re Group’s Day. Members of Sava Re Group observe the day by taking part in a number of humanitarian and environmental events. This year, we observed Sava Re Group’s Day through the organization of the Sava insurance Family race. This race was a gift from Sava insurance to all Belgrade families who wanted to spend one active day in the countryside, along the river. Employees from Sava non-life insurance and Sava life insurance and their families participated in the race.

In accordance with our objectives and beliefs and as an active participant in activities and events of corporate social responsibility, it is with great pleasure that I can point out that Sava non-life insurance managed to obtain a Social Responsibility Management Systems Requirements certificate IQNet SR 10. Only a dozen of companies in Serbia have won this certificate so far and it is an honor to have Sava non-life insurance joining such esteemed company in this segment.

8.What will be the focus of Sava non-life insurance this year?

Last year we began to sell insurance online more intensively, which will continue this year with the intent to enable policyholders to acquire insurance policies for as many types of insurance as possible through this sales channel. We will enhance and simplifyseveral of our products and insurance packages for citizen clients over the course of 2019.

We will put an emphasis on the offer and sale of property insurance, primarily on fire insurance, certain types of transport insurance, and general liability insurance.

In addition, insurance offerings and the conclusion of policies of voluntary medical insurance through banks, is and will be the focus of our cooperation with the banking sector.

9.What are the long-term, the primary, and the strategic plans of Sava non-life insurance in the following period?

In the long term, in addition to the continuing growth of the portfolio with insurance as the primary goal, we are aiming our attention in the period ahead at the expansion of business in the banking sales market and strengthening cooperation with brokerage houses.

Strategically, the key objectives of the Sava Re Group are the digitization and technological modernization of the operation in order to put the client at the center of our services and work, with special emphasis on an Internet presence and mobile applications. The development of Sava non-life insurance will focus on innovative services and products supported by new technologies.

Sava Re supports our company’s business in every way possible, by providing support through the improvement of business processes, transmission of knowledge, providing the most modern means for the work including the latest software used in insurance, and setting up the highest European standards in business.