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.

With the year coming to an end, we decide to present you with a YTD share price performance of CROBEX constituents and how much do individual components impact movement of the index.

This year has definitely been a solid year for the Croatian equity market, which can be observed when looking at the performance of the main index of Zagreb Stock Exchange which noted a 14.8% YTD increase. It is worth noting that this year CROBEX breached 2,000 points for the first time since March 2017, ending yesterday’s trading at 2,009.24 points.

The latest composition of CROBEX includes 15 components of which 12 have observed a share price increase YTD. Out of those, one company observed a triple-digit growth, while seven companies observed a double-digit growth. To be specific, Optima Telekom leads the list with a share price increase of 326% YTD.  To read more about Optima’s share price increase click here. Next come Ericsson NT and Podravka whose share price increased 39.1% and 25.6% YTD, respectively. Končar and Adris preferred follow with an increase of 21.5% and 19.4%. On the flip side, since the beginning of the year, Đuro Đaković and Dalekovod have observed a share price decrease.  

Share Price Performace YTD of CROBEX Components

However, since these companies have different weights in the index, it makes more sense to look at their impact on CROBEX based on their weights. It is also important to mention that CROBEX started 2019 with 19 components and after the revision in March 2019 three companies were excluded from the index (Ingra, Kraš, Viktor Lenac and Jadran).

In 2019, 13 constituents had a positive impact on the movement of CROBEX. Ericsson NT had the highest impact with 55.4 points. Next come Končar and Podravka with 50.9 and 38.1 points, respectively. On the flip side, Atlantska Plovnidba and Đuro Đaković had a negative impact of -13.2 points and -8 points, respectively. It is worth noting that Kraš’ had a relatively insignificant impact on the main index of 0.8 points. Such an impact could be attributed to the fact that Kraš was excluded from the index prior to the surge of the share price .

Impact of Each Individual Component on CROBEX Movement YTD

Fitch Ratings reconfirmed the Company’s long-term rating, at the level of the one awarded in 2018, namely ‘BBB’, stable outlook.

Transelectrica published a document on the Bucharest Stock Exchange announcing that the international credit rating agency Fitch Ratings reconfirmed the Company’s long-term rating, at the level of the one awarded in 2018, namely ‘BBB’, stable outlook.

The credit rating opinion conveys the sound business profile of Transelectrica as transmission & system operator with revenues supported by the regulated asset base (RAB), and by the prudent responsible approach in performing operational activities.

It is noteworthy that such qualification is a notch above the sovereign one (BBB-/stable).