Basel, Baloise increased its total business volume by an outstanding 7.8 per cent to CHF 9,009 million in 2013 and continued to improve its already strong profitability. Its insurance business achieved a solid combined ratio of 94.9 per cent despite the high cost of large and Nat Cat claims. Income from its life insurance business grew by almost 50 per cent. Equity remained virtually unchanged at CHF 4.9 billion, thereby maintaining a very strong capital base. Baloise will ask the Annual General Meeting to raise its dividend by 5.6 per cent to CHF 4.75 per share.
The key performance indicators for the 2013 financial* year are as follows:
- Total business volume CHF 9,009 million
(31 December 2012: CHF 8,358 million; up 7.8 per cent)
- Profit for the period (attributable to shareholders) CHF 453 million
(31 December 2012: CHF 437 million; up 3.7 per cent)
- Equity CHF 4,906 million
(31 December 2012: CHF 4,873 million; up 0.7 per cent)
- Solvency ratio 267 per cent
(31 December 2012: 277 per cent)
- Combined ratio (net) 94.9 per cent
(31 December 2012: 94.1 per cent)
- New business margin (life) 13.5 per cent
(31 December 2012: 8.9 per cent)
*Key figures can be found at the end of this page, and further information is contained in the annual report.
Martin Strobel, the Chief Executive Officer (CEO) of the Baloise Group, commented: "This further set of strong results once again demonstrates that we have a sound business model. As a result of our systematic focus on target customers and target partners, we now have one of the most profitable insurance portfolios in Europe. The Baloise Safety World enables us to offer a skilful combination of insurance and innovative safety and security solutions, and this provides us with a unique product range that ticks all the boxes for our risk-conscious customers."
Summary: Baloise generated outstanding growth in 2013 and combined this with impressively strong profitability. Its profit of CHF 453 million underscored the solidity of its insurance operations. The total business volume, which includes unit-linked life insurance, increased by an outstanding 7.8 per cent to CHF 9,009 million (2012: CHF 8,358 million). Strong growth came from both unit-linked products (10.1 per cent) and conventional life business (10.6 per cent). Premiums earned from non-life insurance also performed well, rising by 3.7 per cent year on year. Although the cost of large and Nat Cat claims increased to 3.9 percentage points, the net combined ratio was a robust 94.9 per cent, which underlined the strong profitability of the Company's non-life business. Earnings before interest and tax (EBIT) from property insurance rose by approximately 4 per cent to CHF 366 million on the back of higher gains on investments. EBIT from life insurance operations jumped by almost 50 per cent to CHF 261 million owing to strong volume growth, the optimised business mix and slightly higher interest rates. The banking division managed to improve on its impressive prior-year results in a continuing low-interest-rate environment.
Balance sheet: The high reliability of Baloise's business model was illustrated by its totally sound balance sheet and capitalisation: its consolidated equity of CHF 4,906 million remained virtually unchanged on the high prior-year figure. The solvency ratio amounted to an impressive 267 per cent. It was 10 percentage points lower year on year owing to the strong growth in business volumes. The economic capital ratio determined under the Swiss Solvency Test (SST) remained comfortably within the green zone.
Investments: Baloise's investments generated net income of CHF 1,907 million, which was just below the corresponding prior-year figure of CHF 1,948 million. They once again yielded good gains, achieving a net return of 3.1 per cent (2012: 3.3 per cent). Recurring income remained virtually unchanged year on year at CHF 1,765 million despite persistently low interest rates (2012: CHF 1,782 million). Baloise invested further in equities that meet its quality criteria and offer the prospect of consistently high dividend payments.
Business units: Business in Switzerland grew strongly in life insurance and achieved an impressive increase in premium volumes in non-life insurance as well, while once again proving to be a reliable and valuable source of income for the Baloise Group. The Company's operational optimisation initiatives and its sharp focus on attractive segments enabled its business in Germany to return to a successful trajectory. In Belgium, Baloise Insurance improved the profitability of the business that it had acquired in previous years. Baloise strengthened its position in the lucrative Luxembourg market by way of an acquisition, increasing its market share to more than 10 per cent in 2014.
Outlook: By continuing to develop and refine its solid insurance operations, Baloise is once again firmly on track to meet its targets of a combined ratio of between 93 per cent and 96 per cent, a new business margin in excess of 10 per cent and a return on equity of between 8 per cent and 12 per cent. It will continue to pay attractive dividends in future, thus remaining an interesting and reliable investment for its shareholders.