Baloise closed the first six months of 2024 with a profit attributable to shareholders of CHF 219.8 million, which was up on the figure for the first half of 2023 of CHF 205.7 million. The rise was primarily due to increased profit contributions from Germany and Belgium as well as to larger contributions from the life business. Our resilience and reliability benefited our customers who were hit by heavy storms and the related flooding in June. The storms primarily affected Switzerland and resulted in a high volume of claims of around CHF 80 million net. Overall, this increased the adverse impact on profit before borrowing costs and taxes by around CHF 30 million. The volume of premiums in the non-life business continued to grow, rising by a very healthy 4.6 per cent. The business volume in the life business fell by 4.8 per cent, owing to the smaller volume of premiums written in the Swiss group life business and in the Belgian life insurance business. Our partially autonomous collective foundation Perspectiva in Switzerland maintained its strong growth trajectory of previous years and now has almost 23,000 beneficiaries. In line with the trend of recent years, the volume in the comprehensive BVG insurance contract business is falling.
Business performance was encouraging in the first half of 2024, irrespective of the aforementioned storms. We demonstrated reliability to our customers and, with these results, have laid the foundations for our investors that will allow a continued good level of cash remittance and thus enable us to maintain our attractive dividend policy.
Implementation of our refocused strategy
Back in the autumn of last year, we put operational excellence measures in place to be able to adapt to the rapidly changing conditions. The pandemic, conflicts in Europe and the Middle East, more volatility in terms of adverse weather events, inflation (requiring adjustments to our premiums) and interest-rate movements all have an influence on our strategy. We therefore reviewed our strategic direction and halted new investment in our ecosystems during the first half of 2024. In addition, we conducted an extensive strategic analysis, adjusted our targets and took steps to boost our profitability. We are ending the current Simply Safe Season 2 strategic phase and launching our refocused strategy with immediate effect. The focus is now on technical profitability, cost efficiency, growth in the target segments and the productivity of capital employed. We believe that Baloise has substantial potential for growth, earnings and cost savings in our existing markets.
«By pursuing our refocused strategy, we will create lasting value for all stakeholders.»
Strengthening of core business; new financial targets
The insurance business is rooted in the principle of risk-sharing, the strengths of which are demonstrated when individuals are at most need of protection. When storms in Switzerland caused significant loss and damage in mid-2024, we showed once again that our core business continues to be built on the confidence that we will keep the promises we have made to our customers. The refocusing of our strategy is aimed not only at maintaining our financial success but also at ensuring we remain a source of reliability and stability for our customers, employees and investors. To this end, we have set ourselves the following financial targets:
- return on equity of between 12 per cent and 15 per cent
- reliable and strong cash remittance of more than CHF 2 billion in the period 2024–2027
- higher payout rate of around 80 per cent for our shareholders in the form of dividends supplemented by share buy-back programmes.
We have successfully adapted to new conditions on many occasions during our Company’s more than 160-year history. By pursuing our refocused strategy, we will create lasting value for all stakeholders. We are also laying the foundations for further growth. Again and again, we have demonstrated that we have the capabilities needed to do this and to run our core business profitably. This can particularly be seen from the excellent profitability that our non-life portfolio has been achieving for years. We firmly believe in our refocused strategy and in the earnings power of our business, enabling us to maintain our reliable dividend policy at an attractive level.
Confidence in our reliability and stability is just as important to our customers as it is to our investors and employees. By focusing firmly on our strengths, we are making sure that this remains the case for the long term.
Basel, September 2024
Dr Thomas von Planta
Chairman of the Board of Directors
Michael Müller
Group CEO