ZVTG

Zavarovalnica Triglav

€58.6 1.3B market cap December 24, 2024

Zavarovalnica Triglav ZVTG BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

Price€58.6

Market Cap1.3B

2 BUSINESS

Dominant regional insurer at fair value with 16% margin of safety. 4.8% dividend yield attractive. Following 2023 CAT events, 2024 showed strong recovery (ROE 14%, combined ratio 91%). Collect dividends, would add only below EUR 50.

3 MOAT NARROW

Regional Dominance (HIGH): 40.8% Slovenia, 20.6% Adria - #1 in both markets. Brand/Trust (HIGH): 124+ years of operations, government backing, A-rated. Regulatory Barriers (MODERATE): Insurance licensing creates barrier to entry. Scale Advantages (MODERATE): Cost spread across largest customer base

4 MANAGEMENT

CEO: Andrej Slapar

Exceptionally stable leadership team with deep institutional knowledge. CFO Tadej Coroli since 2014. Dividend ~50% of FCF, increasing (EUR 2.80 proposed, +60% YoY). Retained earnings ~40% maintaining 225% solvency buffer. Modest regional acquisitions ~10%. Professional management despite government

5 ECONOMICS

7.6% Op Margin

14% ROIC

14% ROE

9.8x P/E

0.136B FCF

Net Cash Debt/EBITDA

6 VALUATION

FCF Yield10.2%

DCF Range49 - 84

At fair value

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Catastrophe event recurrence (floods, storms like 2023)	HIGH	-	-
Government control interference (political appointments, restructuring)	MED	-	-

8 KLARMAN LENS

Downside Case

Catastrophe event recurrence (floods, storms like 2023)

Why Market Right

Slovenia/Balkans exposed to climate CAT events (2023 combined ratio hit 101; 6%, ROE collapsed to 1

Catalysts

80 dividend payment June 2025 (95% probability, priced in); Continued earnings recovery 2025 (70% probability)

9 VERDICT HOLD

B+ Quality Fortress - net cash position

Strong Buy€49

Buy€56

Fair Value€84

Strong Buy below 49, Accumulate below 56

10 MACRO RESILIENCE -8

Neutral Required MoS: 27%

Monetary

Geopolitical

-1

Technology

Demographic

Climate

-5

Regulatory

-2

Governance

-2

Market

Key Exposures

Climate CAT Events -6 Balkans floods destroyed 2023 earnings. Climate change increases frequency and severity of CAT events. Historical actuarial models breaking.
Government Control -5 62.56% state ownership through pension and sovereign funds. Political interference risk real even if historically benign.
Illiquidity Opportunity +1 Ljubljana Stock Exchange neglect by international investors creates mispricing opportunity. But illiquidity is double-edged.

ZVTG faces concentrated climate risk (-6) from demonstrated Balkans CAT vulnerability. Government control (-5 combined regulatory/governance) adds governance discount. The ultrathink correctly questions whether minority shareholders in a government-controlled entity have real ownership. Total score -8 requires 27% margin of safety. At EUR 58.60 near fair value, insufficient buffer for CAT recurrence and governance risks. HOLD existing position for dividends (4.8% yield) but add only below EUR 50 where climate and governance risks are fully compensated.

🧠 ULTRATHINK Deep Philosophical Analysis

ZVTG - Ultrathink Analysis

The Real Question

We're not asking "is Triglav a solid insurer?" The 40.8% Slovenian market share, 124-year history, and 225% solvency ratio answer that. The real question is: When you own 7% of your portfolio in a government-controlled insurer trading on an illiquid Balkan exchange, are you a contrarian genius—or a hostage to ownership inertia?

The market sees Triglav as either emerging markets value play or dividend income generator. Neither frame addresses the governance question. The deeper question: If the government controls 62.56% and you control nothing, why is this investment fundamentally different from lending your capital to the Slovenian state at their chosen terms?

Hidden Assumptions

Assumption 1: Government ownership is benign. Slovenia holds 62.56% through pension and sovereign wealth funds. The assumption is that the government acts as a passive financial investor. But governments are political entities. What happens when unemployment rises and Triglav is pressured to maintain staff? When election approaches and dividend policy becomes campaign issue? The assumption that ownership is benign ignores that governments optimize for votes, not returns.

Assumption 2: 14% ROE reflects normalized earnings. 2024 ROE of 14% approaches Buffett quality. The assumption is this represents the new normal after 2023's CAT event recovery. But examine the history: 2020 was 8%, 2021 was 9.5%, 2022 was negative. 14% may be the exception, not the rule. The assumption that 14% is normal ignores that normalized ROE is probably 10-11%.

Assumption 3: Regional dominance equals moat. 40.8% market share in Slovenia sounds dominant. The assumption is that dominance persists. But Slovenia's insurance market is €3.6 billion—a rounding error for major European insurers. If Allianz or Generali decided to compete aggressively, could Triglav defend? The assumption that regional dominance is durable ignores that small markets attract small competitors.

Assumption 4: Illiquidity is a minor inconvenience. Ljubljana Stock Exchange trades with wide spreads and thin volume. The assumption is that this matters little for long-term investors. But illiquidity creates asymmetric risk: you can always decide to sell, but you cannot control the price. When you need to exit, the market may not accommodate. The assumption that illiquidity is minor ignores that it transforms investment into entrapment.

The Contrarian View

For the bears to be right, we need to believe:

CAT events become more frequent — Climate change increases flood and storm damage in Balkans.
Government interference begins — Political pressure forces suboptimal decisions.
ROE reverts to 10% — 2024 was the anomaly, normalized returns are mediocre.
Illiquidity traps capital — Exit becomes impossible at reasonable prices.

The probability of CAT frequency increase? Perhaps 40% over 10 years. Government interference? 25%. ROE reversion? 50%. Combined base case is "decent, not great" with governance discount permanently applied.

Simplest Thesis

Triglav dominates insurance in a small, well-run country—and your return depends on whether the government remains content to receive dividends rather than exert control.

Why This Opportunity Exists

The opportunity is modest—fair value for a minority stake in a government-controlled entity.

At €58.60, Triglav offers ~16% margin of safety to €70 fair value:

Illiquidity discount — Ljubljana Stock Exchange deters most international investors.
Size neglect — €1.3B market cap is too small for institutional mandates.
Geographic obscurity — Slovenia doesn't appear on most investment screens.
Language barrier — Limited English-language coverage and analysis.

These structural factors may persist indefinitely. The question is whether 16% margin of safety compensates for governance risk and illiquidity.

What Would Change My Mind

Stock drops to €50 — 30% margin of safety compensates for structural risks.
Government signals privatization — Sale of state stake would unlock value.
ROE stabilizes at 12%+ — Multiple years of above-10% returns confirm quality.
Dividend growth continues — 60% increase sustained suggests shareholder alignment.
Regional expansion succeeds — Adria growth diversifies beyond Slovenia.

Some possible within 12-24 months. Current position of 7.19% is appropriate to HOLD, not expand.

The Soul of This Business

Strip away the market share, the government ownership, the Ljubljana listing. What is Triglav at its core?

Triglav is trust institutionalized. For 124 years, Slovenians have paid premiums knowing that when disaster strikes, Triglav will be there. The 2023 floods tested this trust—and Triglav paid. The brand isn't just a logo; it's generational memory of promises kept. When a farmer insures their crops, they're not buying a contract—they're buying the same promise their grandfather relied upon.

The soul is in the claim payment. Somewhere in Slovenia, a family whose home flooded is rebuilding because Triglav honored its commitment. This is what insurance is supposed to be: not financial engineering, not investment portfolio, but the transfer of catastrophic risk from those who cannot bear it to an institution that can.

But here's the uncomfortable truth: trust belongs to the trustee. The government controls Triglav. Minority shareholders benefit from trust they did not build and cannot protect. The 124 years of brand equity, the 40.8% market share, the generational loyalty—all of it belongs to the majority owner. You participate in the dividends, but you don't control the destiny.

At €50, you buy this participation at prices where governance risk is fully compensated.

At €58.60, you hold a position that's fairly valued for what it is: minority ownership in a government-controlled entity with modest returns and limited exit options.

The trust is real. The control is not.

The dividends flow. The margin of safety is modest.

Executive Summary

Investment Thesis (3 Sentences)

Zavarovalnica Triglav is the dominant insurer in Slovenia (40.8% market share) and the Adria region (20.6%), operating as a quasi-regulated oligopoly with 124+ years of operating history. Following a CAT-event-impacted 2023, the company has demonstrated strong recovery with ROE returning to 14%, combined ratio improving to 91%, and a 60% dividend increase. The stock trades at 10.5x earnings with a 4.8% yield, offering reasonable value for a quality regional insurer, though government control (62.56%) and illiquidity present governance and exit risks.

Key Metrics Dashboard

Metric	Value	Assessment
Price	€58.60	-
P/E (TTM)	10.49x	Reasonable
P/B	1.49x	Fair
Dividend Yield	4.78%	Attractive
ROE (2024)	14.0%	Near Buffett threshold
Combined Ratio	91.0%	Excellent
Credit Rating	A (S&P, AM Best)	Investment Grade
Beta	0.42	Defensive

Decision & Sizing

Decision	Rationale
HOLD (Currently Owned at 7.19%)	Fair value range, no compelling reason to add or sell
Position Size	Appropriate - no change recommended

Primary Catalyst & Timeline

Catalyst: Continued dividend growth as 2025 guidance suggests maintaining upper-end profitability
Timeline: Ex-dividend June 16, 2025 (€2.80/share proposed)

PHASE 0: Opportunity Identification (Klarman)

Why Does This Opportunity Exist?

Opportunity Source	Present?	Notes
Forced selling	No	-
Complexity/stigma	Partial	Ljubljana Stock Exchange is illiquid and off most investors' radar
Institutional constraints	Yes	Too small for large funds, no ADR, limited analyst coverage
Temporary operational problem	Resolved	2023 CAT events now in rearview
Market overreaction	No	Stock up +46% YTD, market has recognized recovery
Neglect	Yes	Minimal English-language analyst coverage

Assessment: The opportunity existed primarily due to (1) illiquidity/neglect from the Ljubljana Stock Exchange being off the beaten path, and (2) temporary CAT event impact in 2023. The market has now largely recognized the recovery (stock +46% YTD), reducing the opportunity.

PHASE 1: Risk Analysis (Inversion Thinking)

"All I want to know is where I'm going to die, so I'll never go there." - Munger

Top 3 Ways This Investment Could Fail

1. Government Control Risk (Probability: 20% | Impact: -30%)

Risk: State holds 62.56% through ZPIZ (34.47%) and SDH (28.09%)
Mechanism: Political interference in underwriting, dividend policy, or strategic decisions
Historical Evidence: No major interference to date, but political changes could alter dynamics
Mitigation: Long history of professional management; government has financial incentive in dividends
Expected Loss: 20% × 30% = 6%

2. Catastrophe Event Recurrence (Probability: 25% | Impact: -40%)

Risk: Slovenia/Balkans exposed to floods, storms (as seen in 2023)
Mechanism: Large claims → combined ratio >100% → earnings destruction → dividend cut
Historical Evidence: 2023 combined ratio hit 101.6%, ROE collapsed to 1.8%
Mitigation: Reinsurance program, ~225% solvency ratio provides buffer
Expected Loss: 25% × 40% = 10%

3. Liquidity/Exit Risk (Probability: 15% | Impact: -25%)

Risk: Ljubljana Stock Exchange is illiquid; large sales could move price significantly
Mechanism: Need to sell → price impact → realized loss below NAV
Current Position: 7.19% of portfolio = manageable but not trivial
Mitigation: Long holding period assumed; patient exit over time
Expected Loss: 15% × 25% = 3.75%

Bear Case Summary (Short Thesis)

"Triglav is a government-controlled insurer in an illiquid market, exposed to Balkans geopolitical risk and climate catastrophes. With 62% state ownership, minority shareholders have limited influence. The 2024 recovery is the aberration; normalized ROE is closer to 8-10%, not 14%. At 1.5x book, you're paying full price for a mediocre insurer with governance discount deserved."

Inversion Questions

Question	Answer
How could this lose 50%+ permanently?	Major CAT + political interference + forced nationalization or dilutive capital raise
Non-price sell triggers?	Government signals intent to restructure; management materially increases risk appetite; combined ratio >100% for 2 consecutive years
3-sentence bear case?	See above
Can I state bear case better than bears?	Yes - the bear case is real but manageable given solvency levels

PHASE 2: Financial Analysis

Return Metrics

ROE Analysis (5-Year)

Year	ROE	Assessment
2024	14.0%	Near Buffett 15% threshold
2023	1.8%	CAT event impact
2022	-0.7%	CAT + IFRS transition
2021	~9.5%	Normal
2020	~8.0%	COVID impact

Normalized ROE: ~10-11% (excluding CAT events and best years)

DuPont Decomposition (2024E):

Net Profit Margin: ~7.6% (€131M / €1,720M)
Asset Turnover: 0.42x (€1,720M / €4,099M assets)
Equity Multiplier: 4.6x (€4,099M / €891M equity)
ROE = 7.6% × 0.42 × 4.6 = 14.7% ✓ Confirms reported 14%

Owner Earnings Calculation (2024E)

Net Earnings:                    €131.4M
+ Depreciation/Amortization:     ~€15M (estimated)
- Maintenance CapEx:             ~€10M (estimated)
= Owner Earnings:                ~€136M

Owner Earnings per Share = €136M / 22.71M = €5.99

Valuation Trinity

1. Liquidation Value (Floor)

For an insurer, liquidation value is complex due to policy liabilities.

Tangible Book Value = Total Equity - Goodwill/Intangibles
                    = €891M - ~€50M = ~€841M
Tangible Book Value per Share = €841M / 22.71M = €37.03

Current Price €58.60 vs TBV €37.03 = 1.58x P/TBV

Assessment: Trading at premium to tangible book - not a net-net opportunity.

2. Going Concern Value (DCF Conservative)

Assumptions:

Owner Earnings Year 0: €136M
Growth Years 1-5: 3% (inflation + modest growth)
Growth Years 6-10: 2% (mature market)
Terminal Growth: 1.5%
Discount Rate: 10% (EUR equity + small country risk)

DCF Value (10-year):
Year 1-5: €136M growing at 3% = €140, €144, €149, €153, €158
Year 6-10: Growing at 2% = €161, €164, €167, €171, €174
Terminal Value = €174 × 1.015 / (0.10 - 0.015) = €2,077M
PV of Cash Flows + Terminal = ~€1,100M + €801M = €1,901M

Intrinsic Value = €1,901M / 22.71M = €83.70 per share

Margin of Safety: (€83.70 - €58.60) / €83.70 = 30%

3. Private Market Value (What Would a Buyer Pay?)

European insurance M&A typically occurs at:

1.0-1.5x book for average insurers
1.5-2.0x book for market leaders with clean balance sheets

Triglav has:

Regional dominance (40.8% Slovenia)
Clean balance sheet (225% solvency)
A-rated by S&P and AM Best

Private Market Multiple: 1.6-1.8x book value reasonable

PMV = €39.24 BVPS × 1.7 = €66.71 per share

Current Price vs PMV: €58.60 / €66.71 = 12% discount

4. Relative Valuation

Metric	ZVTG	European Insurers Avg
P/E	10.5x	9-12x
P/B	1.49x	1.0-1.5x
Dividend Yield	4.8%	4-6%
Combined Ratio	91%	94-98%

Assessment: Trading in line with peers on P/E, slight premium on P/B justified by superior combined ratio.

Valuation Summary

Method	Value/Share	vs €58.60	MOS
Tangible Book Value	€37.03	+58% premium	n/a
DCF (Conservative)	€83.70	-30% discount	30%
Private Market Value	€66.71	-12% discount	12%
Owner Earnings × 10	€59.90	-2% discount	2%
Owner Earnings × 12	€71.88	-18% discount	18%

Intrinsic Value Estimate: €68-72 per share (weighted average of methods) Current Margin of Safety: ~15-18% (moderate)

PHASE 3: Moat Analysis

Moat Sources

Moat Type	Strength	Evidence
Regional Dominance	HIGH	40.8% Slovenia, 20.6% Adria - #1 in both
Scale Advantages	MODERATE	Cost spread across largest customer base in region
Brand/Trust	HIGH	124+ years of operations, government backing
Regulatory Barriers	MODERATE	Insurance licensing creates barrier to entry
Switching Costs	LOW-MODERATE	Policies annual but relationships sticky

Moat Durability Assessment

Threat	Severity (1-5)	Timeline	Company Mitigation
Technology disruption (InsurTech)	2	5-10 years	Investing in digital; local market protected
Regulatory change	2	Ongoing	Government ownership = alignment
New entrants	2	Low probability	Dominant share makes entry unattractive
Customer power shift	3	Gradual	Price comparison sites increasing pressure
Climate/CAT events	4	Recurring	Reinsurance + solvency buffers

10-Year Moat Trajectory: Stable (neither widening nor narrowing materially)

Moat Rating: MODERATE

Dominant regional position is real but:

Not a "Coca-Cola" level brand moat
Insurance is inherently competitive on price
Geographic concentration = undiversified

PHASE 4: Management & Incentive Analysis

Executive Team

Name	Position	Tenure	Assessment
Andrej Slapar	CEO	2013 (11+ years)	Long tenure, stable
Tadej Coroli	CFO	2014 (10+ years)	Continuity
Marica Makoter	Corporate Officer	2011 (13+ years)	Institutional knowledge

Tenure Assessment: Exceptionally stable leadership team with deep institutional knowledge.

Capital Allocation Track Record

Use of FCF	% (Est.)	Assessment
Dividends	~50%	Increasing (€2.80 proposed, +60% YoY)
Retained Earnings	~40%	Maintaining solvency buffer
M&A	~10%	Modest regional acquisitions

Dividend Policy: Balanced between shareholder returns and growth - appropriate for mature market leader.

Insider Activity

Limited visibility on Ljubljana Stock Exchange - no Form 4 equivalent readily available.

Government Ownership Considerations

Risks:

Political appointment of supervisory board members
Pressure to maintain employment regardless of efficiency
Strategic decisions may favor national interest over shareholders

Mitigants:

Professional management team with long tenure
Listed company with minority shareholders = some discipline
Government benefits from dividends (pension fund is largest holder)
No evidence of value-destructive interference historically

PHASE 5: Catalyst Analysis

Potential Catalysts

Catalyst	Type	Timeline	Probability	Impact
€2.80 dividend payment	Internal	June 2025	95%	Modest (priced in)
Continued earnings recovery	Operational	2025	70%	Moderate
EU green/sustainable insurance tailwinds	External	2-5 years	50%	Moderate
Regional consolidation (acquirer or acquiree)	External	Uncertain	20%	High
Privatization of government stake	External	Low probability	10%	High

No Catalyst Assessment

Currently no strong near-term catalyst beyond dividend. The story is already largely reflected in price (+46% YTD).

Implication: Larger margin of safety required or accept that this is a dividend-income holding, not a deep-value opportunity.

PHASE 6: Decision Synthesis

Graham's 7 Criteria Assessment

#	Criterion	Test	ZVTG	Pass?
1	Adequate Size	Sales > €100M	€1,720M GWP	✅
2	Financial Condition	Solvency strong	225% solvency	✅
3	Earnings Stability	Positive 10 years	2022-2023 losses	❌
4	Dividend Record	20+ years	~20 years	✅
5	Earnings Growth	33% over 10 years	Volatile	⚠️
6	Moderate P/E	P/E < 15	10.5x	✅
7	Moderate P/B	P/B < 1.5 or P/E × P/B < 22.5	10.5 × 1.49 = 15.6	✅

Graham Quality: 5/7 passed - acceptable but not "defensive grade"

Buffett Quality Criteria

Criterion	Assessment	Pass?
Explain in one sentence	"Largest insurer in Slovenia/Balkans"	✅
ROE consistently > 15%?	Normalized ~10-11%, exceptional years hit 14%	❌
Management skin in game?	Government ownership, limited personal stake visible	⚠️
Identifiable moat?	Regional dominance + brand	✅
Consistent FCF?	Volatile due to CAT events	⚠️

Buffett Quality: 2.5/5 - Mediocre

Megatrend Resilience Score

Megatrend	Score	Notes
China Tech Superiority	+1	Immune - local market
Europe Degrowth	-1	Slovenia tied to EU economy
American Protectionism	0	Neutral - no US exposure
AI/Automation	0	Claims processing may benefit
Demographics/Aging	+1	Life insurance demand
Fiscal Crisis	0	Neutral
Energy Transition	0	Neutral

Total Score: +1 | Tier: T3 (Adaptable)

Expected Return with Probability Tree

Scenario	Probability	5-Year Return	Weighted
Bull (normalized ROE 14%+, multiple expansion)	20%	+80%	+16%
Base (normalized ROE 10-12%, dividends reinvested)	50%	+40%	+20%
Bear (CAT events, combined ratio >100%)	25%	-10%	-2.5%
Disaster (government interference, forced sale)	5%	-50%	-2.5%
Expected	100%		+31%

5-Year Expected Return: +31% (~5.5% annualized + 5% dividend = ~10.5% total return)

Position Sizing

Current position: 7.19% of portfolio

Assessment: Position size is appropriate given:

Moderate moat (not T1)
Illiquidity risk
Government control discount warranted
Already up +25% - not adding at current levels

Recommendation: HOLD at current size

Price Targets & Recommendation

┌─────────────────────────────────────────────────────────────────┐
│                     INVESTMENT RECOMMENDATION                    │
├─────────────────────────────────────────────────────────────────┤
│ Company: Zavarovalnica Triglav       Ticker: ZVTG               │
│ Current Price: €58.60     Date: December 24, 2024               │
├─────────────────────────────────────────────────────────────────┤
│ VALUATION SUMMARY                                                │
│ ┌─────────────────────────┬─────────────┬─────────────────────┐ │
│ │ Method                  │ Value/Share │ vs Current Price    │ │
│ ├─────────────────────────┼─────────────┼─────────────────────┤ │
│ │ Tangible Book Value     │ €37.03      │ +58% premium        │ │
│ │ DCF (Conservative)      │ €83.70      │ 30% MOS             │ │
│ │ Private Market Value    │ €66.71      │ 12% MOS             │ │
│ │ Owner Earnings (10x)    │ €59.90      │ 2% MOS              │ │
│ │ Owner Earnings (12x)    │ €71.88      │ 18% MOS             │ │
│ └─────────────────────────┴─────────────┴─────────────────────┘ │
│                                                                  │
│ INTRINSIC VALUE ESTIMATE: €70 (rounded weighted average)        │
│ CURRENT MARGIN OF SAFETY: 16%                                   │
├─────────────────────────────────────────────────────────────────┤
│ RECOMMENDATION:  [ ] BUY  [x] HOLD  [ ] SELL  [ ] WAIT          │
├─────────────────────────────────────────────────────────────────┤
│ BUY PRICE (Strong):         €49.00 (30% below IV)               │
│ ACCUMULATE PRICE:           €56.00 (20% below IV)               │
│ FAIR VALUE:                 €70.00 (Intrinsic Value)            │
│ TAKE PROFITS PRICE:         €84.00 (20% above IV)               │
│ SELL PRICE:                 €105.00 (50% above IV)              │
├─────────────────────────────────────────────────────────────────┤
│ POSITION SIZE: 7.19% (current) - maintain, no change            │
│ CATALYST: Dividend payment June 2025; continued earnings growth │
│ PRIMARY RISK: CAT events + government control                   │
│ SELL TRIGGER: Combined ratio >100% for 2 years; government      │
│               signals restructuring; dividend cut >30%          │
└─────────────────────────────────────────────────────────────────┘

Explicit Sell Triggers

Thesis Break: Government announces material change to ownership structure or dividend policy
Moat Erosion: Market share falls below 35% in Slovenia
Management Failure: CEO replaced by political appointee with no insurance experience
Valuation: Price exceeds €105 (50% above fair value)
Financial: Combined ratio >100% for 2 consecutive years

What I Will NOT Sell On

Single CAT event (reinsurance covers)
Short-term price drops without fundamental change
Market volatility in Ljubljana Stock Exchange
Macro concerns about Eurozone (Slovenia is well-integrated)

Monitoring Metrics

Metric	Current	Warning	Action if Breached
Combined Ratio	91%	>98%	Watch closely
ROE	14%	<8%	Review thesis
Solvency Ratio	225%	<180%	Concern
Dividend/Share	€2.80	<€2.00	Review thesis
Market Share (Slovenia)	40.8%	<35%	Moat erosion signal

Psychology Check

Bias	Check	Status
Social proof	Am I holding because it's in portfolio?	⚠️ Slight risk
Commitment/consistency	Am I ignoring negatives?	No - acknowledging mediocre quality
Excessive self-regard	Overconfident in analysis?	Acknowledged limited data sources
Endowment effect	Holding because I own it?	Possibly - but position size is reasonable

Munger's Final Test

Circle of Competence: Can explain - regional insurer with dominant market share
Variant Perception: Market correctly values this as moderate-quality insurer; no edge
Humility Check: If CAT events become more frequent due to climate change, thesis is damaged
Inversion Final: If -50% tomorrow, would add cautiously but not aggressive (moderate conviction)

Sources Used & Data Extracted

Web Sources Consulted

Source	Data Extracted
StockAnalysis.com	Price, P/E, EPS, dividend, market cap
MarketScreener.com	Forecasts, analyst ratings, ownership
Triglav Investor Relations	2024 results, guidance, dividend policy
Triglav Annual Report 2023	Financial highlights, combined ratio, ROE
AM Best (via Morningstar)	Credit ratings
Wikipedia	Market share, history, ownership

Data Limitations

Ljubljana Stock Exchange: Not covered by AlphaVantage or EODHD APIs
SEC Filings: Not available (Slovenian company)
Detailed Annual Reports: Would require manual PDF download from Triglav IR
Insider Transactions: Not readily available for LJSE

Data Validation

Metric	Primary Source	Cross-Check	Consistent?
ROE 14%	Triglav IR	AM Best, MarketScreener	Yes
Combined Ratio 91%	Triglav IR	Annual Report	Yes
P/E 10.49x	StockAnalysis	MarketScreener	Yes
Market Share 40.8%	Triglav IR	Wikipedia	Yes

Conclusion

Zavarovalnica Triglav is a moderate-quality regional insurer with dominant market position but several structural constraints (government control, illiquidity, CAT exposure). The current price of €58.60 represents fair value with a modest 16% margin of safety - not compelling for new purchases but appropriate to hold for income and modest appreciation.

Final Verdict: HOLD at current allocation. Collect dividends (4.8% yield). Would consider adding only below €50.

Analysis completed December 24, 2024