Who is the Baloise Group? What milestones have we achieved over the past few years to allow us to become the successful insurance company that we are today? What do we stand for, and what are our ambitions? In our equity story we answer these questions and highlight the many good reasons for investing in Baloise.
The Baloise Group is a Basel-based insurance company with more than 150 years’ experience; it provides prevention, pension, assistance and insurance solutions in its core markets of Switzerland, Belgium, Luxembourg and Germany.
With its combination of insurance and banking services, Baloise has established a unique business model in Switzerland and is the first Swiss insurer to offer its customers an real omnichannel solution. Through targeted strategic acquisitions and exceptionally strong organic growth, Baloise has considerably improved on its market positions in Belgium (top 5) and Luxembourg (top 3). In Germany, Baloise has successfully merged companies, streamlined structures and reduced costs.
The last Investor Day in October 2016 saw Baloise communicate its five-year “Simply Safe” corporate strategy aimed at leveraging core business and further expanding its business model at the same time. In addition, the “Simply Safe” strategy pursues the aim of transforming Baloise’s corporate culture in order to meet changing customer needs in terms of security and services in the digital age.
As an insurance and pension company, Baloise is fundamentally sustainable because it contributes daily to the functioning of companies, economies and communities. As a result, sustainability plays an essential role both in Baloise’s value management and the “Simply Safe” strategy.
This ties in with Baloise’s strong conviction that only satisfied employees can inspire customers, who in turn form the basis of an attractive investment from a shareholder’s point of view. Baloise built on this in 2017 by launching its “Simply Safe” strategy in pursuit of future growth; it designated the following three strategic ambitions for the years leading up to 2021:
- Employees: Top 10% of employers in the sector
- Customers: One million additional customers
- Shareholders: CHF 2 billion cash flow
2021: What do we want to achieve?
One million additional customers
Baloise is becoming the first choice for people who want to feel ‘simply safe’. An even stronger focus on customer needs, tailored omni-channel communication and innovative products and services in the areas of insurance, assistance and pensions will help Baloise to attract an additional one million customers through 2021. This corresponds to a 30 per cent increase over 2016.
Reasons for investing in Baloise
In order to enable it to continually offer shareholders added value and achieve its financial ambitions, Baloise developed the “ECCO” value management system based on the four key factors of Baloise’s total shareholder return: “Earnings”, “Cash”, “Capital” and “Optionality”.
Strong operating performance and one of the most profitable non-life portfolios in Europe
Baloise has a strong position in its attractive core markets and a marked diversification of earnings across its operating segments Non-Life, Life, and Asset Management & Banking. Thanks to its industry-leading target customer management, Baloise boasts one of the most profitable portfolios in Europe in the context of non-life business. It is well-positioned in the life insurance sector as regards the challenges of the current low-interest-rate environment, while the Asset Management & Banking division continues to deliver stable and reliable contributions.
Strong and well-diversified operating cash generation
Operating cash generation is a core element within the Baloise value management system. Baloise is known for its attractive and reliable payout policy with dividends and share buy-backs. Baloise has not cut dividends since 2003, either maintaining these at a stable level or increasing dividends from one year to the next; it has also run several share buy-back programmes. In one of its most important strategic ambitions, Baloise wants to achieve a total cash flow of CHF 2 billion for the holding company between the years 2017 and 2021. This will ensure an attractive and reliable dividend policy and will improve Baloise’s ability to invest in future growth.
Baloise Cash Radar
Why is cash a strategic focus and how do you generate value from cash?
Strong capitalisation, conservatively managed investment portfolio and high financial flexibility
Strong capitalisation, excellent risk management as well as a conservative and forward-looking investment policy have allowed Baloise to safely navigate the financial crises of recent decades. This high degree of capitalisation makes the company resilient to unfavourable market conditions and offers a great degree of financial flexibility. This flexibility enables Baloise to invest in future growth, to benefit from market opportunities, and to continue with the attractive and reliable payout policy offered to its shareholders.
Full innovation pipeline and well positioned for the digital age
In the context of its “Simply Safe” strategy, Baloise has taken on a leading role in the areas of innovation and digitalisation, and has now even received multiple awards for this. It enters into partnerships with promising fintechs and insurtechs, invests in innovative start-ups, and tests and develops new concepts while optimising existing ones. Here, Baloise focuses on developing ecosystems like “Home” and “Mobility” in addition to its existing insurance activities. This, combined with a high degree of agility and Baloise’s cutting-edge IT systems as well as fully digitised processes in different areas, offers Baloise a competitive advantage on its competitors in an uncertain environment. Moreover, this creates the necessary basis for effectively accommodating changing customer requirements in the age of digitalisation.