By Nevena Krasteva
Triglav Group Management Board member
What lies behind Triglav’s better-than-expected financial results in 2021?
The year 2021 was challenging as it was marked by the ongoing COVID-19 pandemic, fierce competition and the unfavourable situation in the capital markets in terms of interest income.
Under these circumstances, it was essential that we took a disciplined approach to underwriting risks, while continuing to focus on clients. In this way, we managed to increase business volume and achieve good results, which stem from underwriting activities and the management of clients’ assets in mutual funds and discretionary mandates. Along with premium growth, the results were positively influenced by the relatively lower frequency of claims and the favourable development of claims provisions formed in past years, which were managed in a conservative and prudent manner also in 2021.
We focused on developing client-friendly products and services, digitalising backoffice and claims processes, expanding digital sales and upgrading the digital office. Specifically, this means that the concept of full flexibility was taken into account in redesigning home insurance, in addition to launching new modular insurance products. We continued to connect traditional distribution channels with new technological solutions, which enabled us to further transform the traditional sales method into a hybrid one. Furthermore, we maintained a high level of accessibility of our services while expanding communication channels.
The client relationship management information system was upgraded, while the functionalities of the i.triglav digital office and online applications intended for clients in both core activities were expanded. In order to further grow our business in the region, we entered into new strategic partnerships. We also continued with the centralisation of asset management. Last but not least, I would like to add that we maintained and further strengthened the sustainability orientation in our operations. Sustainability is integrated into the Triglav Group’s operations and expressed in our mission of building a safer future.
What key indicators are you targeting in 2022?
Based on strategic starting points and last year’s macroeconomic forecasts for 2022, the Triglav Group plans a profit before tax of 120–130 million euro and an increase in total written premium to more than 1.4 billion euro; however, due to the growth of the insurance portfolio and other factors, we also expect an increased volume of claims paid. The combined ratio is expected to remain favourable below 93%. Due to the low interest rates at which our investments were reinvested in the previous financial year, we anticipated a further decline in rates of return on investment, excluding unit-linked assets. We estimate that the planned annual profit will be achieved; however, it should be stressed that the risks related to the realisation of target profit increased significantly due to negative influences from the business environment.
This year, as expected, we have faced a challenging situation, which has become even more severe. In addition to the consequences of the COVID-19 pandemic, these are marked by a worsening macroeconomic situation with high growth in general inflation and an unfavourable situation in international financial markets. Under such circumstances, the importance of the robustness of our business model and the resilience of the Triglav Group’s underwriting activities and the solvency position is confirmed. By ensuring an amount of capital that adequately exceeds the set level of underwritten risks in accordance with the strategic guidelines, we will strive to maintain high credit ratings, which reflect the high level of the Group’s financial stability and security.
In the beginning of this financial year Triglav revised its strategy for 2025. What objectives has the Group set forth in the new strategy?
In its revised strategy for 2025, the Triglav Group maintained its key guidelines and upgraded it in terms of development activities, focusing even more on its sustainable development ambitions –environmental, social and governance factors – than before. This enables us to create a long-term stable basis for the Group’s profitable and safe operations, promoting the transition to a sustainable society and reducing its impact on climate change, while remaining a development-oriented environment for its employees, maintaining ties with its partners and representing a stable, safe and profitable investment for investors.
Our efforts during this strategy period will be focused on creating an outstanding client experience that is
consistent across all channels, processes and products. We will develop a client-tailored range of insurance and financial services, gradually transitioning from an insurance-oriented business model to a service-oriented business model and ecosystems so as to address even more effectively various but interrelated client needs. The Group will continue with its digital transformation process with the aim of becoming the leading digitalised insurance and financial group in the Adriatic region. In order to achieve the set goals, we will continue to strengthen the highly effective and service-oriented organisational culture, which is co-created by more than 5,200 healthy, satisfied and dedicated employees of the Triglav Group. In terms of financial indicators, our goal is for the Group’s total revenue to exceed 1.6 billion euro in 2025, and to achieve a 10% return on equity in the strategy period.
The Triglav Group has been digitally upgrading its products and expanding the scope of its services into areas such sustainable mobility and pet health. What new products do you have in the pipeline?
Products and services are designed by developing business ecosystems that help expand the Group’s market presence and create new sales opportunities. The Group’s main long-term competitive advantage is the upgrading of insurance and financial products with assistance and related services, which are provided via a partner network. In this way, a comprehensive solution to clients’ needs is ensured in addition to their financial security. The main building blocks of all our ecosystems are assistance services expanded by related services, which are supported by advanced information and digital solutions.
We build ecosystems in five key areas: care for people’s health, care for small animals’ health, safe and sustainable mobility, carefree and safe living, and financial services. We bring together all these areas in the redesigned Triglav komplet bonus programme, which upgrades our relationship with policyholders and rewards client loyalty, while being an opportunity for cooperation with new clients. With respect to care for people’s health, last year we included new healthcare partners in the well-developed business ecosystem, upgraded existing partnerships and expanded the range of services available, thereby continuing to provide comprehensive medical treatment to policyholders. In a similar way as with our healthcare partners, we entered into partnerships with providers of home, car, computer, micromobility and small animal assistance. We are also constantly strengthening and upgrading these partnerships. An example of this would be the progress made in the insurance of electronic devices, targeting clients in the partner sales network during the purchasing process. The digital ecosystem formed by Triglav Skladi’s digital platforms is also being further developed in terms of asset management.
Triglav Group last year entered into strategic partnerships aiming to diversify its operations geographically. Could you share more details about your plans regarding this?
The Group currently operates in seven markets and six countries. Furthermore, it operates in the wider international environment through partnerships with foreign insurance brokerage and agency companies as well as reinsurers. The markets of Southeast Europe are our natural markets, as we have a historical connection with them, we understand the needs of policyholders there, and as the leading insurance and financial group in the region, we play an active role in the development of markets. In the markets where we hold a high market share and the leading position (Slovenia, Montenegro and North Macedonia), we are pursuing a consolidation strategy, whereas on the remaining markets (Croatia, Serbia, Bosnia and Herzegovina) we are strengthening our position.
We enter the markets where we are not directly present and strengthen our presence through contractual partnerships as an insurance provider that plays its part in developing a full range of products and services. Our presence in this segment in 2020 included cross-border services in more than 15 EU member states. In addition to business partnerships in Greece, Italy, Norway and Netherlands, new operations were launched in Poland and Denmark last year. Although these forms of business are insignificant in terms of premium volume, they are considered important in terms of development.