Sava announced in late August that it had sustained around EUR100mn in gross claims from storms that struck Slovenia in July and August.
After reinsurance recoveries, these losses will have a EUR30mn-EUR35mn negative impact on Sava’s 2023 full-year result, the company said.
Sources told this publication that the insurer had initially communicated a low expected loss figure to its reinsurers immediately after the early August flooding, which it increased by around 10 times a few weeks later.
Combined with ceded losses from the country’s largest carrier, which could reach EUR110mn-EUR160mn, reinsurers are facing EUR200mn+ of losses from Slovenian events this year. The floods continue a trend for secondary perils to feature highly in this year’s cat loss record.
The Slovenian government has estimated that the July-August floods have caused EUR4.7bn in economic damage, of which EUR350mn is insured. The flooding is the worst to strike Slovenia since it declared independence from Yugoslavia in 1991.
Sources said Sava buys an XoL cat programme with a vertical limit of around EUR100mn, with one pre-paid reinstatement.
The carrier disclosed in its most recent annual report that it bought a cat XoL programme for 2022 that attached at EUR5mn for losses on the group’s primary business and at EUR3mn for losses on business written by its reinsurance arm, Sava Re.
Sava Re also reinsures a portion of the group’s primary business.
It is common practice for cedants to return to the market for a backup cover in the event the reinstatement is called into play, to provide earnings protection.
Cedants typically offer participation on backups to reinsurers of the loss-affected segments of their programme, in a bid to offer some payback through the additional premium.
Sava is the second-largest insurer in Slovenia and wrote EUR381.6mn in Slovenian non-life gross premium in 2022.
The country’s largest insurer is Triglav, in which two state-owned investment funds hold a 62% stake.
Triglav has estimated that its losses from extreme weather events over the course of this year, which include the July and August floods, will hit EUR150mn-EUR200mn. After reinsurance recoveries, this will have a negative impact on its pre-tax profit of EU40mn and EUR50mn, it said.
