A certain decrease in the solvency ratio is expected but should remain at levels significantly higher than the regulatory ones and the solvency of the Company should in no way be called into question.

Croatia Osiguranje published an announcement on the implications of the Covid-19 situation on their operations. The Company has identified the following key areas that could be affected by adverse economic conditions:

• volatility of comprehensive income from investments, as a result of developments on the financial markets
• increased credit risk and increased impairment of insurance receivables,
• increased number of life insurance policy surrender.

Based on currently available information, the Company cannot reliably estimate the amount of potential losses that would result from the direct impact of COVID-19. However, as part of its own risk and solvency assessment (ORSA) process, a series of stress tests, sensitivity analysis and scenarios were conducted, and it is estimated that these analyses covered the risks that could have a significant impact on the Company also in the case of COVID-19.

Although, based on analysis performed in the ORSA process, a certain decrease in the solvency ratio is expected, the same ratio should remain at levels significantly higher than the regulatory ones and the solvency of the Company should in no way be called into question.