President of the Management Board on the business year of 2017

Dear policyholders and business partners, honourable shareholder, distinguished co-workers,
Another dynamic and highly competitive year is behind the insurance company and the AS Group. In addition to economic growth, low interest rates and a demanding investment environment, the year was marked by a new consolidation of shares in the Slovenian insurance market. The company business operations are stable, the last business year was successful.
We can be satisfied. 
We have maintained a good and stable credit rating. We have made important steps in the further development and organization of the insurance company, which will stimulate the development of insurance and other services for our clients. Following the acquisition of KD Skladi two years ago, the AS Group today provides, in addition to comprehensive insurance protection, asset management implemented by the best asset managers in Slovenia.
We ended 2017 with a net profit of EUR 11.4 million and achieved a 11.9 percent return on equity thus achieving the planned business results. In the Management Board, we estimate that our results are comparable to the best in the industry last year, as we managed to consolidate our position in the Slovenian and Croatian insurance markets. 
Where are we?
We posted a total of EUR 303.8 million of gross insurance premium; we grew in all three core activities of our business and exceeded the planned sales results. We continue to increase our capital adequacy in accordance with the requirements of the Solvency II Directive. Unlike the past two years, when we had a negative outcome in the area of supplementary health insurance, we again performed positively in all three key insurance areas.
Nearly every year, natural disasters affect Slovenia. For the insurance company this means a high claim frequency rate. Last year, in both the east and west of the country, where the intensity of mass loss events was greatest, we were dealing with the aftermath of windstorms and hailstorms. The greatest increase in claims was recorded in fire and natural disaster insurance (by 25%), general liability insurance (by 19%) and assistance insurance (by 9%). The total gross claims paid went up by 2.8 %, while the insured persons were paid out EUR 223.4 million in damages and benefits.
The cost of medical services has been growing unceasingly, while the Ministry of Health has failed to curb uncontrolled spending and to adjust legislation. The proposals made by insurance companies, which seek to establish a financially efficient, long-term sustainable and solidarity healthcare system, were deliberately overlooked. For this reason, we incorporated the responses to the negative reform policy into our development strategy and business plan for 2018.
New dimensions of safety incorporated in the new strategy
The new five-year strategy may be the most important step we made in the past year. It combines modern trends and ambitious however feasible plans. We will invest even more energy into development, flexible ways of selling and information solutions, without forgetting our traditional sales channels, customers and partners.
On this path we will be assisted by the new European Insurance Distribution Directive, which will come into effect in Slovenian legislation in October. The Directive brings a higher level of protection of policyholders, in particular regarding the information disclosed to consumers in accordance with their best interests.
The interplay of interactions across all communication channels is becoming increasingly complex, but at the same time it leads to the complete personalization of integrated solutions provided to the client. The insurance company keeps a systematic analysis of big data; on the other hand, the key solutions have been concentrated in the personal digital portal of each policyholder, opening up new dimensions of our cooperation in the future.
What counts most?
Digitization has the effect of a snowball. Our task is to continuously design and improve simple, effective and safe solutions for information, for the purchase of insurance and assistance services and for asset management. This provides safety to customers, stability and increase in profitability to companies. This year we will therefore witness an accelerated optimization of connections between people, processes and technologies.
Aware that a good user experience in insurance procedures, asset management and claim settlement is most appreciated by the customers, and building on considerations on our development, we know that investment in new knowledge and skills is our best decision. This offers, not least, answers to address the challenges of sustainable development.
Our success in the past year in realizing the expectations of our clients and the environment in the past year is shown by their trust returned to us. The insurance company and the AS Group are becoming increasingly recognizable and respected. We are proud of the recognition of the profession, the growing confidence of the public and, in particular, the best organizational energy in the industry. 
Sincere thanks to everyone among the employees and thank you for your trust.
Gabrijel Škof,
President of the Management Board