Business News

Sava Re Group Profit Falls Even as Core Company Performs Better

Ljubljana, 30 March (STA) - Reinsurance group Sava Re said Friday its profit fell by over a quarter in 2001 on gross premium revenues that were virtually flat, but the core company Pozavarovalnica Sava increased net profit by a fifth to EUR 8.6m.

The core company posted gross premiums of EUR 140.3m, down 1.8% year-on-year, Pozavarovalnica Sava boss Zvonko Ivanušič told the press.

This is the result of the decision to reduce dependence on the domestic market (which now accounts for just EUR 66m in premiums) in order to free up capital for expansion abroad.

Premiums collected abroad rose 4% to EUR 74m on the back of strong growth in Asia, in particular China and South Korea, which already accounts for 38% of foreign premiums, according to Ivanušič.

The Sava Re group, which includes subsidiaries in Croatia, Kosovo, Montenegro, Macedonia and Serbia, did not perform as well as the parent company, noted Ivanušič.

Gross premium revenues edged 0.3% lower to EUR 258.4m whereas net profit dropped 26.3% to EUR 4.1m.

Ivanušič attributes the poorer performance to a "cleaning of balance sheets" in the subsidiaries, as several major claims were impaired and real estate values reassessed.

Group premiums are expected to rise to EUR 340m this year and plans for the year include expansion to Latin America, Australia and the Republic of South Africa, said Ivanušič.

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