Letter to shareholders | Annual Results 2020

Andreas Burckhardt and Gert De Winter
March 30, 2021
Letter to shareholders on the 2020 Annual Results.

Dear shareholders

Andreas Burckhardt und Gert De Winter
Dr Andreas Burckhardt, Chairman of the Board of Directors (right), and Gert De Winter, Group CEO (left), with a view from the 7th floor of the Group headquarters at Baloise Park.

Baloise achieved good results in 2020, reporting a profit attributable to shareholders of CHF 434.3 million. It was especially encouraging in light of the fact that the prior year’s result wa boosted by just under CHF 150 million due to one-off tax-related positive effects. The outbreak of the Covid-19 pandemic in the first quarter and the measures subsequently introduced throughout Europe to contain the virus were extremely challenging for us as an insurer in 2020. However, even during this period Baloise proved itself to be a strong and reliable partner, particularly for our customers, our shareholders and our employees. Despite the difficult situation, we met our obligations towards these stakeholder groups quickly and accommodatingly. We paid out around CHF 178 million to our policyholders for Covid-related costs incurred in 2020.

The majority of the expenses arose as a result of business closures ordered by the authorities, particularly in the hospitality sector. Baloise thereby played a role in supporting the economy and the affected businesses. The Covid-19 pandemic is the largest gross loss event to hit the Baloise Group since 1980. The gross combined ratio increased by 3.4 percentage points to 91.7 per cent as a result.

Despite the circumstances, Baloise is proving to be stable and resilient. We have been operating cautiously and with a focus on the long term for many years. Thanks to the hedging of our risks, the net combined ratio, i.e. the ratio after reinsurance payments received, rose only slightly from the prior year to 91.2 per cent. In total, the net cost of Covid-related claims amounted to around CHF 72 million.

The volume of life business fell slightly, but the profit contribution remained stable. The decline in business volume was expected, partly because in the prior year we had benefited from a competitor leaving the comprehensive insurance market and partly because of the continuing intentionally cautious approach to the volume of traditional life insurance business taken on. Earnings in the life business amounted to CHF 282.2 million. The massive falls in share prices in the equity markets in March were counteracted by positive effects in technical reserves. This meant that the year ended with a slight increase compared to 2019.

2021 will be the final year of our ‘Simply Safe’ strategic phase. Since 2017, Baloise has managed to sign up 738,000 additional customers and transfer CHF 1,744 million in cash to the holding company, and we have already achieved our target of being in the top 10 per cent of most attractive employers in the European financial sector. We are on track to achieve our goals by the end of the year, despite the difficult environment. It is still impossible to predict how quickly the European economy will recover in 2021. However, we believe that Baloise is sufficiently robust to overcome these challenges and enjoy lasting success.

We are confident of our long-term strategy.

Next strategic phase four-year phase to 2025

On Investor Day last autumn, the Company outlined its plans for the next four-year phase of the strategy up to 2025, which will be called ‘Simply Safe: Season 2’. The current strategic direction will continue and be pursued even more vigorously. The three strategic targets are retained, but are now even more ambitious. We want to be among the top 5 per cent of employers in Europe in 2025, to attract 1.5 million new customers in four years and to increase cash generation by 25 per cent compared to the first strategic phase. Baloise will approach this next strategic phase under a new strategic leadership. Dr Thomas von Planta, a member of the Board of Directors since 2017, will be nominated as the new Chairman of the Board of Directors at the Annual General Meeting on 30 April, replacing Dr Andreas Burckhardt who is retiring. Together with the Board of Directors and the Corporate Executive Committee, Dr Planta will continue to lead Baloise on its current path of success and drive forward the launch of the next strategic phase. The strategic phase starting in 2022 will also have the additional goal of expanding the Mobility and Home ecosystems. The aim in future is to generate income not only from the core insurance business, but also from insurance-related services that will be bundled into so-called ecosystems. Another important pillar alongside the core insurance business and the ecosystems is the expansion of services for third parties in the investment business. As well as strengthening its core business, Baloise expanded its ecosystems in 2020. Within the mobility ecosystem, the ‘aboDeinauto’ service was launched in Germany in autumn. This is the first car subscription service to focus specifically on used vehicles and enables subscribers to use their chosen car simply and flexibly for a fixed monthly fee.

Baloise also invested in the Berlin start-up ‘Ben Fleet Services’ (Ben), an online platform for vehicle fleet management services. ‘Ben’ was founded last year by ‘Energie Baden-Württemberg’ (EnBW) and ‘Bridgemaker’, a service provider that specialises in business start-ups. Within the Home ecosystem, the  company invested in ‘Houzy’, a Swiss platform that offers digital solutions for home owners. Property owners can use the platform to obtain valuations, plan and calculate the cost of renovations or optimise energy efficiency in a property. The platform opens up an additional service area within the Home ecosystem. The equity investment in ‘Houzy’ was the fourth alliance within the Home ecosystem last year, following on from Keypoint, Batmaid and ImmoPass. Keypoint is a digital assistant that makes the work of property management companies in Belgium easier. ImmoPass is also based in Belgium and provides services in the area of technical property inspection that can be used both by property management companies and potential buyers. Batmaid digitalises the provision of cleaning services for private individuals in Switzerland and takes the hassle out of finding domestic cleaners.

‘Simply Safe: Season 2’ marks the start of Baloise’s new strategic phase and underlines the sustainability of its strategic ambitions. The course that it has been pursuing since 2016 will be continued in a focused way with more ambitious targets. We are confident of our long-term strategy. This also includes our sustainable dividend policy –despite the current difficult circumstances. The Board of Directors is proposing an unchanged dividend of CHF 6.40 to this year’s Annual General Meeting.

Basel, March 2021

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Operating performance

Review of operating performance.

Annual Results

Publications for download.


Strategic embedding of our ecosystems.