The global economic and financial crisis brought greater uncertainty to financial markets and made the core insurance business more difficult. Despite lower demand for some insurance products and the challenging economic situation, a great majority of the set objectives were achieved.
However, the economic crisis lead to sales results below the planned levels. Investors were more reluctant to assume risk, which was reflected in a smaller demand and lower premiums for unit-linked life insurance products. The reduced volume of bank lending directly reduced total written premium on credit insurance. Moreover, difficulties experienced in some branches of the Slovene economy, especially the construction industry, also helped decrease the demand for certain insurance products.
The performance of the Company was also influenced by other factors:
- growing price competition in the market and the amendments to the terms and conditions of insurance introduced in 2010 decreased the total written premium on motor-vehicle insurance;
- high and repetitive claims made over recent years required more stringent terms and conditions for agricultural insurance, which is the main reason less premium was generated in this insurance class.
Business measures taken yielded high realisation degree of the planned profits, despite unfavourable business conditions. These included cost-cutting, selection of the existing portfolio, greater attention to pricing and risk assumption, redesigning of the exiting insurance products and the development of new ones. Favourable weather conditions also helped towards good results. The combined ratio, which shows the profitability of core insurance operations, reached 90.1% – the most favourable level in the history of the Triglav Group.
Zavarovalnica Triglav's business results are heavily influenced by the situation on the capital markets, as diverse financial investments represent the majority of the Company's total assets. Despite the relatively conservative investment policy of Zavarovalnica Triglav, the global financial crisis and the situation on the capital markets had a negative impact on the value of certain investments which reflected foremost in the decrease of the share capital and profit. In 2011 financial assets were permanently impaired by EUR 63.2 million. Zavarovalnica Triglav regularly met liquidity requirements and managed its investment portfolio in adherence to the principles of security, liquidity and profitability.
On 21 November 2011, the credit rating agency Standard & Poor's confirmed Zavarovalnica Triglav and the Triglav Group the »A« long-term rating and financial strength rating with a negative outlook for the fourth consecutive time – for more information see Section Credit rating of Zavarovalnica Triglav.
The confirmation of the credit rating means that the Triglav Group met one of its major strategy objectives: under unfavourable conditions in the economy and on capital markets the Group shall retain the recognition of its financial strength, good performance and strategy implementation.