Another dynamic and highly competitive year is behind the insurance company and the AS Group. In addition to economic growth, low interest rates and a demanding investment environment, the year was marked by a new consolidation of shares in the Slovenian insurance market. The company business operations are stable, the last business year was successful.
We have maintained a good and stable credit rating. We have made important steps in the further development and organization of the insurance company, which will stimulate the development of insurance and other services for our clients. Following the acquisition of KD Skladi two years ago, the AS Group today provides, in addition to comprehensive insurance protection, asset management implemented by the best asset managers in Slovenia.
We ended 2017 with a net profit of EUR 11.4 million and achieved a 11.9 percent return on equity thus achieving the planned business results. In the Management Board, we estimate that our results are comparable to the best in the industry last year, as we managed to consolidate our position in the Slovenian and Croatian insurance markets.
We posted a total of EUR 303.8 million of gross insurance premium; we grew in all three core activities of our business and exceeded the planned sales results. We continue to increase our capital adequacy in accordance with the requirements of the Solvency II Directive. Unlike the past two years, when we had a negative outcome in the area of supplementary health insurance, we again performed positively in all three key insurance areas.
Nearly every year, natural disasters affect Slovenia. For the insurance company this means a high claim frequency rate. Last year, in both the east and west of the country, where the intensity of mass loss events was greatest, we were dealing with the aftermath of windstorms and hailstorms. The greatest increase in claims was recorded in fire and natural disaster insurance (by 25%), general liability insurance (by 19%) and assistance insurance (by 9%). The total gross claims paid went up by 2.8 %, while the insured persons were paid out EUR 223.4 million in damages and benefits.
The cost of medical services has been growing unceasingly, while the Ministry of Health has failed to curb uncontrolled spending and to adjust legislation. The proposals made by insurance companies, which seek to establish a financially efficient, long-term sustainable and solidarity healthcare system, were deliberately overlooked. For this reason, we incorporated the responses to the negative reform policy into our development strategy and business plan for 2018.
The new five-year strategy may be the most important step we made in the past year. It combines modern trends and ambitious however feasible plans. We will invest even more energy into development, flexible ways of selling and information solutions, without forgetting our traditional sales channels, customers and partners.
On this path we will be assisted by the new European Insurance Distribution Directive, which will come into effect in Slovenian legislation in October. The Directive brings a higher level of protection of policyholders, in particular regarding the information disclosed to consumers in accordance with their best interests.
The interplay of interactions across all communication channels is becoming increasingly complex, but at the same time it leads to the complete personalization of integrated solutions provided to the client. The insurance company keeps a systematic analysis of big data; on the other hand, the key solutions have been concentrated in the personal digital portal of each policyholder, opening up new dimensions of our cooperation in the future.
Digitization has the effect of a snowball. Our task is to continuously design and improve simple, effective and safe solutions for information, for the purchase of insurance and assistance services and for asset management. This provides safety to customers, stability and increase in profitability to companies. This year we will therefore witness an accelerated optimization of connections between people, processes and technologies.
Aware that a good user experience in insurance procedures, asset management and claim settlement is most appreciated by the customers, and building on considerations on our development, we know that investment in new knowledge and skills is our best decision. This offers, not least, answers to address the challenges of sustainable development.
Our success in the past year in realizing the expectations of our clients and the environment in the past year is shown by their trust returned to us. The insurance company and the AS Group are becoming increasingly recognizable and respected. We are proud of the recognition of the profession, the growing confidence of the public and, in particular, the best organizational energy in the industry.
Sincere thanks to everyone among the employees and thank you for your trust.
Gabrijel Škof, President of the Management Board
|Gross written premium (in EUR million)||303.8||298.8|
|Gross claims paid (in EUR million)||223.4||217.2|
|Combined ratio (other insurance)||95.8%||94.4%|
|Combined ratio (health insurance)||97.4%||102.2%|
|Profit before tax (in EUR million)||13.5||11.0|
|Net profit (in EUR million)||11.4||11.9|
|Return on equity||11.9%||12.1%|
|Return on investment||5.8%||6.0%|
|Financial investments, cash and cash equivalents (in EUR million)||674.8||644.8|
|Gros liabilities from insurance contracts (in EUR million)||574.2||554.5|
|Number of employees||1,076||1,140|
|Book value of equity (in EUR million)||96.9||95.9|
|Book value of shares (in EUR million)||9.40||9.31|
|Credit rating||BBB - stable (Fitch Ratings)||BBB - stable (Fitch Ratings)|
The written premium totalled EUR 303.8 million, which represents an increase of 1.7% compared to the previous year. Premium from the non-life insurance segment accounted for the bulk of total written premium, followed by premium from the health, life and pension insurance.
The operation of the company was viable on all three fields of insurance. The net economic result of 11.4 million euros is a consequence of viable operation of life insurances (2.1 million euros), property insurances (6.7 million) and health insurances in the amount of 2.6 million euros. The reason the 2017 net economic result was lower compared to the previous periods, is the lower net result from investing activities (without the effects of insurances with investment risk), surplus of other expenses over revenue, lower technical account of property insurances and increased tax liability.
The net return on equity in 2017 was 11.9 per cent.
On 31 December 2016, the balance sheet total of the insurance company was 758 million euros, an increase of 3.4 per cent compared to the previous year. The reason for the increase is predominantly in the growth of value of assets of insured persons assuming the investment risk. At the end of 2017, the majority of assets (64.4 %) were constituted by life insurance assets, 34.6 % of assets were used in property insurance assets, whereas the rest was used for health insurance assets.
We supplement the wide array of modern insurances and additional services we offer our clients with innovative financial and insurance products and consultancy, allowing tailored insurances, quality insurance protection and quick assistance, particularly when resolving damage. To simplify the use of our services, we have developed numerous sales and service channels and linked them with internal processes in the insurance company and the AS Group. We strive for an excellent customer experience from all customer interactions with the insurance company.
We monitor customer experience through numerous studies:
AS Self Care Portal is the quickest and most practical way to connect with the insurance company. On the portal you can review your policies, verify payments and arrange your insurances. Additionally, you can file a claim or monitor its resolution and there is an increasing number of insurances you can take out online.
98 % of clients consider our employees professional and kind.
We offer our clients a direct, quick and quality response. There are a number of ways to reach us:
In 2018, the online point Wiz (www.wiz.si) became the main digital location of AS for selling simple, transparent and modern insurances. It is developing rapidly and allows introduction of new offers and tools for taking out insurances, at the moment Wiz Avto, Wiz Zdravje, Wiz Kolo and the new WIZ Kuža, WIZ Tujina, WIZ Smučar are available.
The network of contracting car services My AS Service, the insured people and victims are offered quick damage assessment on the spot, without having to travel to the insurance company, a quick and quality repair service using original parts and a replacement vehicle to be used free of charge during repairs, and if necessary, an affordable car rental for the remaining period while repairs are performed. Clients can select the My AS Service in the network of 78 car services of all brands and selected bodywork shops across Slovenia.
We offer Roadside Assistance to everyone filing a claim (insured people and victims) after a traffic accident. To file a claim and receive the benefit, report the harmful event using the 080 88 48 number, or fromabroad +386 5 66 28 500.
The AS Foundation has been on its primary mission since 1995 (back then under the name Ajda, later as the KD Foundation) and by assigning financial funds it supports talented young individuals in various fields, mainly musicians in their university studies. In 2017, there were 7 young individuals who, with the help of the Foundation, were obtaining knowledge at the best universities across the entire world.
In 2012, the company acquired a rich collection of artworks, which have been exhibited since 2014 in the AS Gallery, at the company headquarters at Dunajska 63 in Ljubljana. We have also organised a total of 14 exhibitions at the gallery, mainly exhibitions by domestic artists. The quality of the selection is reflected in the growing number of gallery visitors and the public response.
The insurance company promotes sport and continuously focuses on development of insurance for athletes of all categories. Since 1993 we have been the official insurance company of the national Olympic team (Team Slovenia) and in 2017, the Zdravje AS clinic in Ljubljana became the reference clinic for Olympians. We support the Football Association of Slovenia, the Handball Federation of Slovenia and we have supported the best Slovenian sailor, Vasilij Žbogar for 18 years. We are also proud to cooperate with the Alpine Association of Slovenia, offering the Association and its 50+ thousand members affordable insurance. Also related to sport is the company KD Skladi, a long-time supporter of the Slovenian Chess Federation who in 2017 became the general sponsor of our women’s sailing team: Tine Mrak and Veronike Macarol 470 Slovenian sailing team.
We are sponsors of the Auditorium Portorož and the Koper Theatre (since its establishment in 2002) and the Škocjanske jame Park. We have incorporated various events in collaboration with the Volčji Potok Arboretum and Lipica Stud Farm, which promote the protection of natural and cultural heritage and combine recognition of locations.
In healthcare, in our role as general sponsor we supported for the 15th consecutive time the selection of the best and most prominent Slovenian physicians, “My Physician”, supporting the reputation of the healthcare profession. We have rewarded blood donors through our Regional Red Cross Federation in Izola and Koper since 1995.
A responsible attitude towards the environment is a continuous practice of the insurance company and its employees. AS is lowering the carbon footprint using various means, mainly with investments in energy restoration of commercial facilities, premises and purchases of vehicles that are ecologically more appropriate. We pay special attention to saving electrical energy, water, paper and separation of hazardous waste. We have managed to cut the latter in half with the digitalisation of operation. We separate all waste from the working environment in all of our units.
In our mutual relations, we stem from our values and reflect these outwards.