As Triglav published their 2020 business plan, we are bringing you key takes from it.
According to the report the company is targeting the following:
EBT between EUR 95m and 105m (2019 plan: between EUR 90m and 100m).
The planned profit is based on the assumptions of the projected performance of the Group’s insurance and asset management business, taking into account the anticipated conditions in the financial markets which will affect the rates of return on investments of the Group.
Premium targeted at around EUR 1.2bn (2019 Plan: Around EUR 1.1bn)
The growth of consolidated GWP is also planned for 2020. Through consistent implementation of development activities, the Group will adapt to the competitive situation and achievement of the set strategic objectives. Quality, simplicity and integrity of services tailored to the clients’ needs and expectations are the main drivers of all activities. These will continue to include the development of services and sales processes, which are based on innovative and advanced technologies, the improvement and upgrading of omni-channel client communication, and the enhancement of sales channels efficiency.
The Group’s combined ratio below 95%.
At the Group level, the combined ratio of below 95% is planned, which is in the lower end of the range of its average target strategic value of around 95%.
Gross operating expenses
As the volume of business continues to grow, so will the Group’s cost effectiveness, because the planned growth of expenses is lower than the planned growth of premium. They will be affected by higher insurance acquisition costs (fees and commissions, marketing campaigns, advertising, labour costs of the agent network) and higher depreciation of property, plant and equipment resulting from high past and future planned investments in information technology and strategic projects. Furthermore, gross operating expenses will be affected by the streamlining measures, which will be predominantly focused on the types of costs not directly related to insurance acquisition.
Profit from financial investments
Given the expected continuation of low interest rates, the Group plans a further decline in returns on investment, excluding unit-linked assets. The main elements of the investment policy thus remain unchanged and include ensuring adequate security, liquidity and diversification of investments while achieving adequate profitability. The objective of the Group’s investment policy is to maintain a high credit rating of the entire portfolio. The investment portfolio structure remains relatively conservative. Bonds and other fixed-rate investments, which are mostly invested in the euro area, will continue to account for the bulk.