Croatia Osiguranje looking to get a bigger chunk of the regional market.
Leading Croatian insurance company Croatia Osiguranje (CO), majority-owned by the Rovinj Adris Group, has strengthened its ownership position in the Slovenian insurance company Sava Re after it acquired an additional 4.4 percent stake. The company has ambitions to expand its presence in the region and it has recorded positive trends in its operations, but it still lags behind its Slovenian competitors, reports tportal.hr on March 17, 2016.
After a thorough restructuring at CO that ensued when Adris Group took over in 2014 and the initial losses related to it, there have been positive developments in the first full year under Adris. CO has recorded the premium growth of 3.3 percent to 356.11 million euros while the paid claims fell eight percent compared to previous year. It generated 14.2 million euros in net profit (group level) and return on equity (ROE) of 4.7 percent.
On the Croatian market, CO has maintained a leading position with 24.45 percent of market share due to a strong growth of 40 percent in life insurance premiums. Meanwhile, premiums in the non-life insurance segment fell by 6.2 percent.
The new majority owner of Croatia Osiguranje has announced the expansion on the regional market, and among the main targets are the leading Slovenian insurers, Triglav, and Sava Re. In the latter, CO already has a minority share; on Tuesday it bought additional 4.4 percent and it now owns a 14.17 percent stake.
iCapital analysis shows that, despite better business results under Adris, CO is still lagging behind the Slovenian competition. Triglav insurance premiums rose by 3.5 percent last year, reaching 919.1 million euros, which means that Triglav is the region’s biggest insurer. The Group generated a net profit growth of 3.7 percent, reaching 88.7 million euro. In addition, the company has the highest return on equity of 12.8 percent.
Sava Re last year increased the total premium by 3.9 percent to 486.3 million euros, although the damages paid increased by 12 percent. The net profit jumped by 9.3 percent to 33.4 million euros, with a return on equity of 6.9 percent.
iCapital analysts conclude that the Slovenian insurers surpassed Croatia Osiguranje in the context of growth and profitability in recent years. However, the past year might be an indicator of the change in this trend because of the restructuring implemented at CO that has already shown first results.