Basel, Baloise has confirmed that it is well on track for success by posting a strong set of results for the first six months of 2013. It increased its total volume of business by more than 5 per cent to reach CHF 5,455 million and the company generated strong growth in its target segments. The insurance business proved highly profitable and defied the storm and flood damage in Germany and Switzerland to deliver a solid combined ratio of 94.5 per cent. Baloise doubled its EBIT in the life insurance sector. The company's equity, which remains practically unchanged at CHF 4,555 million, reflects its financial strength and reliability.
The key performance indicators for the first half of 2013* are as follows:
- Total business volume: CHF 5,455 million
(30 June 2012: CHF 5,190 million; up 5.1 per cent)
- Profit for the period (attributable to the shareholders): CHF 245 million
(30 June 2012: CHF 219 million; up 11.8 per cent)
- Equity: CHF 4,555 million
(31 December 2012, adjusted: CHF 4,641 million; down 1.9 per cent)
- Solvency ratio of: 260 per cent
(31 December 2012: 277 per cent)
- Combined ratio (net): 94.5 per cent
(30 June 2012: 92.6 per cent)
- New business margin (life) 17.3 per cent
(30 June 2012: 7.1 per cent)
Martin Strobel, the CEO of the Baloise Group, says: "I am proud of our excellent results in the life and non-life business. We are focusing on risk-conscious target customers and potential partners. Our innovative safety modules are in great demand and are generating measurable customer success. Our core insurance business is performing well and is highly profitable, putting us firmly on track to achieve our financial targets."
Summary: The Baloise Group raised its profit for the first half of 2013 by an encouraging 11.8 per cent to CHF 245 million. All business divisions and all regional units contributed to this profit. The excellent operational profitability of the non-life business is reflected in the combined ratio of 94.5 per cent net (H1 2012: 92.6 per cent), which increased mainly because of the floods in Germany and the storms in Switzerland. The margin on new life insurance business rose to 17.3 per cent (H1 2012: 7.1 per cent). The banking business also performed well in the first six months of 2013, raising earnings by 12.7 per cent to reach CHF 41 million. There was solid growth in the total volume of business, which rose by 4.2 per cent in local-currency terms to CHF 5,455 million or by 5.1 per cent in Swiss francs.
Balance sheet: Baloise has a strong balance sheet. Its consolidated equity of CHF 4,555 million remained virtually stable, only declining by 1.9 per cent compared to year-end 2012. This was despite the rising interest rates, which had a negative impact on the valuation reserves of fixed-income securities. The Group's solvency ratio of 260 per cent remained strong compared with 277 per cent at 31 December 2012. This puts Baloise well within the requirements and in the "green zone" of the Swiss Solvency Test (SST).
Investments: Baloise achieved impressive gains on its investments, generating net income of CHF 955.6 million, which was just below the figure of CHF 991.4 million reported for the first half of 2012. The net return on insurance investments changed only marginally, falling to 1.7 per cent from its prior-year level of 1.8 per cent. Further investments were made in shares that satisfy our quality criteria and that offer long-term prospects of high dividend payout.
Business units: Basler Switzerland consolidated its strong market position by delivering an excellent set of operating results and solid growth, both in the life and non-life business. Storm damage had a negative impact on the combined ratio, but at 86.7 per cent gross (up five percentage points) this was still very good. All business divisions and national Baloise companies contributed to the profit for the period. Although Germany was heavily affected by flood and storm damage, there was still an increase in EBIT.
Outlook: We anticipate that our measures for increasing growth and profitability will continue to be effective. The successful and highly profitable insurance business will remain our core focus. We aim to achieve a combined ratio of between 93 per cent and 96 per cent in our non-life business, while in our life insurance we are looking to attain a new business margin in excess of 10 per cent. As far as our operational profitability is concerned, we plan to achieve a return on equity of between 8 and 12 per cent. This operational strength will facilitate our practice of paying consistent, attractive dividends.