Swiss Insurance Firm Baloise: Not Good, Lower Profits

Swiss Insurance Firm Baloise: Not Good, Lower Profits

Tue, Mar 26th 2024

Baloise grapples with declining profits and storm-induced losses, refocusing on core operations to try and pull through.

KEYSTONE/Christian Beutler

Baloise claim they will present a new strategy in September. The Group made less profit last year, but is increasing its dividend by 30 cents to CHF 7.70 per share.

Baloise’s profit attributable to shareholders fell by 3.3% to CHF 239.6 million under the newly introduced accounting rules (IFRS 17/9), as was reported on Tuesday. Analysts had expected a higher profit.

Compared to the previous year, higher profits in Belgium and Germany largely offset the decline in Switzerland, according to the press release. In Switzerland, however, natural hazards and major losses due to the severe storms in Ticino and Jura had a significant impact on the account, amounting to a good CHF 200 million.

Life Insurance Profit Down 30%

Despite high storm-related expenses, the combined ratio improved by 0.9% points to 92.0% and the operating profit in the non-life business increased by more than a third.

It should be noted that the build-up of reserves in the previous year had depressed the result by 120 million. Of this amount, 79 million was released again.

In life insurance, on the other hand, operating profit fell by a good 30%. Baloise attributes this to the impact of currency effects and lower real estate valuations. As a result, the profit contribution from the newly introduced service margin (CSM) was lower than in the previous year. Group EBIT fell by 6.0% to 344.4 million.

Focus on Core Business

Baloise is changing its direction before the end of the strategy program in 2025. Investments in ecosystems will be halted and the focus will be placed on the core business.

Former Switzerland CEO Müller sees the best growth and earnings potential in the core business. “Where possible and sensible, we are bringing the partnerships from the former ecosystems closer to the core business and improving their profitability,”.

As a result of the realignment, Baloise is revising its target of acquiring around 1.5 million new customers between 2022 and 2025. On the other hand, the Group is maintaining its other targets and is on course to achieve its cash target of €2 billion.

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