Sava Insurance Group

The stable outlook on Sava's core operating entities reflects our expectation that the group's management will continue to implement its strategy of solid operating performance and profitable growth, while further diversifying premiums and solidifying its income streams. Despite increased natural catastrophe claims and moderating macroeconomic conditions, we expect Sava to sustain a strong balance sheet with at least very strong capitalization and strong and stable earnings over the next two years, enabling it to continue developing its domestic and foreign operations. We could lower the rating in the next two years if Sava's competitive position weakened because of significantly eroded volumes or prolonged loss of profitability, triggered for example by external conditions that also derailed macroeconomic development in Slovenia. We

...Strong growth in 2023 will limit the impact of inflation. We expect insurance revenue growth to jump to 10%-15% in 2023 before normalizing at 4%-7%. In our view, higher growth in 2023 will be on the back of Sava's non-life business, mainly in Slovenia where--in accordance with its solid underwriting controls--the company continues to actively adjust prices to reflect higher inflation. It is also benefiting from increased prices in international reinsurance in 2023, while passing these higher costs on through price increases in its non-life property lines. Beyond 2023, we expect further price increases due to still-expected relatively high inflation and further property insurance price increases after more frequent and severe natural catastrophes in Slovenia this year. We believe that some growth will also come from new risks being added to the portfolio. We think Sava will protect its strong competitive position in Slovenia and gradually further expand its presence in its target markets...

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