The ratings on Slovenia-based reinsurer Pozavarovalnica Sava, d.d. (Sava Re) reflect the company's strong capitalization, strong competitive position in Slovenia, and conservative investment profile. These positive factors are offset, however, by Sava Re's lack of sustainable competitive advantages on the international portfolio and modest underwriting profitability. Capitalization is strong, reflecting extremely strong capital adequacy (in the 'AAA' range), highly conservative reinsurance protection, strong quality of capital, and good reserving. The net risk-adjusted capital base is small in absolute terms, however, at Slovenian tolar 27.8 billion in 2005. Sava Re's competitive position is driven by its dominant position in Slovenia and good niche positions in the countries of the former Yugoslavia. Sava Re is largely dependent on one market, however, with
