Sava Re meets growing regulatory demands with SimCorp’s ESG investing solution
Sava Re is the largest reinsurance company in Central and Eastern Europe, actively providing services to more than 350 partners across a broad spectrum of over 100 reinsurance markets throughout the globe. The group is one of the leading reinsurance groups in the region, with a presence in six countries of the Adriatic region.
The commitment to sustainability has always been very important for Sava Re. In 2017 the company released their first sustainability report and enacted their first sustainability strategy. Since then, Sava Re has been gradually incorporating sustainability into every part of their operations and value chain.
The organization has made the development of ESG-compliant investments a priority for their last strategic period, which ended in 2022. Looking forward, the company has set even more ambitious goals for its investment. Sava Re is planning to increase the ESG compliant share of investment in the portfolio to over 20% by the end of 2027, while at the same time decreasing carbon footprint in the investments as much as possible, with the goal to decarbonize it entirely.
The business case
While it is true that increasing the share of sustainable investments within portfolios may be a challenge, the complexity of complying with increasingly stringent regulations and pursuing multiple goals is really what makes the job so much more challenging.
Regulatory demands such as EU taxonomy and SFDR are driving the need to adopt sustainable practices. What began as a regulatory obligation for Sava Re quickly developed into an integral part of the company's narrative, as well as the group’s. It was realized that complying with sustainability-related regulations was not only beneficial for meeting regulatory requirements, but also provided a unique opportunity as well as the need for risk management.
Investing responsibly with regards to ESG criteria to meet the sustainability objectives required reliable data. Without reliable data, it can be difficult to identify suitable investment opportunities. Further, it is important to set the appropriate criteria for investment. Being too selective when choosing where to invest may limit the available options, while being too lenient could mean that the company doesn’t strictly adhere to sustainability practices.
The need for sustainability and compliance within organizations is becoming increasingly pronounced, requiring enhanced data management and manipulation capabilities. To ensure that these needs are met in the future, it was essential for Sava Re to have a centralized solution capable of responding to changing requirements. This demanded an innovative approach to sustainability, which went beyond the standard regulations and goals.
The field of sustainability is developing rapidly, both in terms of regulatory requirements and client expectations. To stay ahead of these changes, Sava RE was determined to have a solution that can respond to evolving needs and adapt as new regulations emerge.
An in-house solution only worked until a certain point, after which Sava Re was determined to find a solution that fit their criteria. It was important to find a solution that could integrate with existing IT investments solutions. It had to be both functional and flexible, preferably also easy to understand and use. It would be beneficial for the solution to be centralized to cover all aspects of ESG regulation. Additionally, it was important that the solution was maintained and developed over time to account for any new regulations that may come into force. Furthermore, being able to import data from external sources would also be a key consideration in choosing the right solution.
Since Sava Re already used SimCorp Dimension as a front-to-back IT solution for its investments and our ESG solution covered the criteria, it was an easy choice to make.
The business benefits
When Sava Re decided to purchase the IT solution for their investment portfolio, it was always with the view of having a long-term collaborative partnership rather than just a straightforward transaction. SimCorp’s ongoing efforts to improve its products and services, as well as having the focus on understanding the needs of Sava Re, reinforced their confidence in SimCorp as a reliable and trustworthy partner.
Now Sava Re is managing ESG funds and investments of the insurance companies which cover the technical reserves of the insurance contracts, as well as their own funds, on SimCorp Dimension.
With SimCorp’s ESG investing solution incorporated into their operations, Sava Re can measure and monitor key ESG metrics such as carbon footprint, emissions to water, board gender diversity, etc., to ensure compliance with the SFDR and EU Taxonomy reporting requirements across all its investments. The ESG investing solution also enables Sava Re to proactively vet potential investments against ESG requirements and its internal ESG targets and objectives contributing to its commitment towards sustainable investment practices. Additionally, having a dedicated team at SimCorp that keeps up to date on changes in the regulatory field is crucial for ensuring smooth and efficient operation of the system.
"Sava Re was confident that SimCorp was the ideal partner, as the company had a dedicated team ready to provide any support and assistance Sava Re required and was committed to keeping up with any changes in the regulatory landscape and to implementing these changes seamlessly."
- Marko Jazbec, Chairman of the Management Board of Sava Re
Sava Re is in the process of innovating and developing functionalities to incorporate ESG standards into all key areas of operations in the front office, compliance, and middle office. By leveraging the data for day-to-day business processes, they will be able to make better decisions within the front office for buying investments, ensure regulatory alignment with sustainability criteria, and use the data for regulatory and internal reporting in middle office.
As regulations related to ESG standards continue to develop and evolve, the company recognizes the importance of staying up to date on these changes and implementing solutions to ensure compliance. Sava Re finds it especially beneficial to have a partner who will monitor regulation in this area and integrate new solutions to cover regulatory requirements for future compliance.
Sava Re noted that the process of importing data and conducting the necessary calculations has so far been structured in a logical and intuitive manner. Sava Re is also actively working towards incorporating data warehouse and reporting processes into their daily routine next year, to enable efficient data processing and analysis. This will enable the organization to accelerate decision making capabilities while simultaneously freeing up resources that can be utilized elsewhere.
Company name: Pozavarovalnica Sava d.d. / Sava Reinsurance Company d.d.
Short company name: Sava Re d.d.
Headquarters: Ljubljana, Slovenia
Number of employees:Sava Re – 131.3 / Sava Insurance Group – 2700
About Sava Re
Pozavarovalnica Sava d.d. (Sava Re) is a reinsurance company headquartered in Ljubljana, Slovenia, and is the operating holding company of the Sava Insurance Group. Sava Re is the largest reinsurance company domiciled in Central and Eastern Europe, servicing more than 350 partners in over one hundred reinsurance markets worldwide, and the Group is one of the leading insurance groups in the region, with a presence in six countries of the Adriatic region.