President of the Management Board on the business year of 2018
Dear policyholders and business partners, honourable shareholder, distinguished co-workers,
In 2018, the Insurance Company AS and the AS Group continued their operations in line with the set strategy,
fulfilled key business goals and operated successfully despite the slowdown in the growth of economic activity in
Slovenia and the international environment.
The most important event of the year is the beginning of the sale of the Company when on 23 May the long-term
owner of the KD Group Insurance Company concluded the contract for the sale of the Company Adriatic Slovenica
d. d. with Generali CEE Holding, BV, which is part of the International Generali Group. The sales process was
completed after the end of the financial year 2018, and we became part of the reputable international Generali
Group on 13 February 2019.
The business year was also marked by adapting to European directives, in which we recognized new opportunities
for clients and an increased confidence in the Insurance Company. An important milestone of the past year was
the adjustment of the business to the GDPR, the new European Regulation on the protection of personal data
providing individuals with more rights and more freedom in decision-making. IDD, the new Directive on the
distribution of insurance products, effective from 1 October 2018, provides greater transparency in the
development, sales of insurance and customer information while strengthening consumer protection.
Results and Trends
The most important goals, namely sustainable and profitable operations, better balance of the insurance offer, risk
segmentation, risk management to strengthen capital adequacy and maintenance of the credit rating, were
successfully achieved. We ended 2018 with a net profit of EUR 8.9 million and recorded a 9.2% return on equity.
Adriatic Slovenica generated a positive operating result in all three areas of operations, 79% of gross profits of the
company in non-life insurance, 16% in health insurance and 5% in life insurance.
The results confirm a successful implementation of the adopted strategy. We posted a total of EUR 300.4 million
of gross insurance premiums (excluding pension funds inflows) and recorded growth in the most important non-life
insurance products. The most visible sales results were achieved by Croatia's branch office (almost 40% growth)
and the Wiz website, which increased sales by 30% in key insurance products Wiz Car, Wiz Health and Wiz Abroad.
By doing this, we have consolidated our position in the insurance market, since we are comparable to the best in
the industry by both market share and reputation. The safety and efficiency of operations are also evidenced by
the improvement of the credit rating to BBB+ received by the Company in mid-February 2019 with the entry into
the Generali Group.
The Company paid a total of EUR 221 million in damages and benefits. This is 2.4 million less than the year before,
which was achieved through the consistent implementation of the strategy, orientation towards more profitable
segments with better risk selection. Nonetheless, we recorded a 38% increase in goods transport claims, a 9%
increase in fire and natural disasters insurance, and a 2% increase in motor third party liability claims, just to
highlight the most important classes of insurance. We also note that in the last decade in Slovenia, mass
environmental disasters, windstorms, hailstorms and floods have increased significantly. Nevertheless, in the field
of natural disasters, 2018 was fairly lenient.
Successes and Opportunities
New insurance and assistance products are better in all respects than before, however we are trying to recognize
new opportunities to increase confidence in the Company. We tailor our offer to our customers' needs and social
needs. We are also proud of our achievements: Life Insurance Moj življenjski kasko (My Comprehensive Life
Insurance), Migimigi Vitality Programme and the reward for the BEST risk life insurance won in all categories. We
received the Family-Friendly Enterprise full certificate and were awarded the highest organizational energy in the
financial industry award for the third consecutive year.
The Company KD Skladi, which has been an important part of the Group for three years now, has again won a
number of awards for quality asset management and our colleague Primož Cencelj received the flattering title of
the best manager. The first purchases of office buildings were carried out within the framework of Adriatic Value
Fund, the first alternative real estate investment fund in Slovenia. In this way, we have successfully added funds
for institutional investors to the sub-funds for retail investors managed within the framework of the KD Umbrella
We strive for long-term sustainable health care and financial security for the elderly, as we estimate that, due to
negative demographic trends, the conditions in the area of healthcare and financial security of the population will
be further aggravated. Systemic changes, a more stimulating tax policy for pension savings and a comprehensive
reform of the health system will be necessary. We are always ready to provide professional support and to cocreate
solutions in the areas that are important in providing a greater security for all of us, for a better future for
In order to succeed in the market, different ideas need to be heard and taken into account
We invest a lot of energy into development, flexible selling methods and new information ecosystems, while also
preserving the appreciated traditional sales channels and direct customer advising. We are actively offering them
opportunities for digital collaboration, while at the same time giving them enough time to become acquainted with
new technologies. Thus, the next step - the introduction of even more digital solutions into the everyday life of the
insurance company - does not represent a barrier any more, but an advantage. However, regardless of the
changes, indisputable quality remains the basis of everything. We strive every day for our customers and business
partners to recommend us to their friends for the high quality offer and professional and friendly services.
Nowadays, a single professionally qualified individual is not enough. It is important that we act as in a sports team,
where success is achieved by the team and could not be achieved by an individual without the team support. In the
AS Group, we managed to link competencies and experience into one interdisciplinary team, where motivated
individuals act as team players on their way to a common goal. We are therefore convinced that the set objectives
will be successfully implemented in 2019. I sincerely thank the colleagues, our clients and business partners for
their trust and the Shareholder for the support in the implementation of the strategy.