• Profit attributable to shareholders for the first half of 2022 amounted to CHF 287.1 million (H1 2021: CHF 302.3 million). Compared with the prior-year period, our strong operational profitability faced headwinds arising from unfavourable developments in the capital markets and one major storm event.
• At CHF 5,443.6 million, the total volume of business was down year on year (H1 2021: CHF 5,885.3 million). This decline was mainly driven by currency effects, a restrictive underwriting policy in the traditional life insurance business and lower investment-type premiums.
• Gross premiums written in the non-life business amounted to CHF 2,587.1 million. This equated to an increase of 2.3 per cent (H1 2021: CHF 2,617.3 million) in local currency terms. Earnings before interest and tax (EBIT) was on a par with the prior-year period at CHF 162.1 million (H1 2021: CHF 166.2 million).
• Net claims incurred were slightly lower than in the prior-year period, resulting in a solid net combined ratio of 91.9 per cent (H1 2021: 92.3 per cent).
• Gross premiums written in the life business fell as a result of the selective underwriting policy in the Swiss group life business and came to CHF 2,069.8 million (H1 2021: CHF 2,220.8 million). The life business contributed a very healthy EBIT of CHF 178.5 million to the group’s earnings in the reporting period (H1 2021: CHF 194.6 million). More favourable interest-rate conditions meant that the new business margin in the life business increased a little to 50.1 per cent (H1 2021: 47.6 per cent). The interest margin stood at 111 basis points (FY 2021: 108 basis points).
• Asset management delivered a net return on insurance assets of 0.9 per cent, which is slightly lower than in the prior-year-period (H1 2021: 1.1 per cent). Net new assets in the business with external customers amounted to CHF 712.8 million in the first half of 2022, a year-on-year increase of 41 per cent.
• Baloise’s capitalisation remained robust with an SST ratio in the range of 230 per cent. At CHF 5,021.0 million, consolidated equity was much lower at the end of the first half of 2022 than it had been at the end of 2021 (31 December 2021: CHF 7,299.9 million). This decline was mainly attributable to the significant rise in interest rates in the first half of 2022, which resulted in a lower valuation of financial assets.
• In the field of sustainability, Baloise focused on a comprehensive expansion of emissions-related data base in line with the Greenhouse Gas Protocol. In addition, it further developed the integration of ESG criteria into underwriting, product management and asset management. After launching our Baloise Active Ownership Strategy in 2021, we published the 2021 Active Ownership Report in the first half of 2022. In addition, Baloise successfully issued another green bond in July.
• Progress in the ecosystems: In the first half of 2022, we continued to work on expanding our ecosystems and developing related services. For example, we intensified the collaboration with UBS mortgage platform key4 and with Houzy, a platform for residential property owners. 

Profit

Baloise delivered solid results for the first half of 2022. Operational profitability remained high, but faced headwinds from volatile capital markets, the depreciation of the euro against the Swiss franc and a severe winter storm event that primarily caused damage in Belgium. Despite the challenging overall market conditions, we continued to perform at a consistently high level, achieving CHF 287.1 million in profit attributable to shareholders (H1 2021: CHF 302.3 million). The main performance drivers alongside our operational strength were increases in real estate valuations and profit on claims reserves. All national Baloise companies generated positive profit contributions. EBIT was down by 3.2 per cent year on year at CHF 353.8 million (H1 2021: CHF 365.5 million). The figure for the prior-year period had been boosted significantly by exceptionally strong performance in the financial markets.

Business volume 

Following robust growth in the prior-year period, the volume of business fell by 7.5 per cent in the first half of 2022 to CHF 5,443.6 million (H1 2021: CHF 5,885.3 million). This was attributable to lower levels of investment-type premiums written and a restrictive underwriting policy in the traditional life insurance business in Switzerland. The depreciation of the euro against the Swiss franc was an additional drag on business volume. In local currency terms, the decrease was more moderate (4.9 per cent). 
Adjusted for currency effects, all business units achieved healthy growth in the attractive non-life business. 

Capitalisation and equity

Despite the challenging environment, Baloise’s capitalisation remained strong in the first half of the year. As at 30 June 2022, the Swiss Solvency Test (SST) ratio was around 230 per cent. This means that Baloise’s capital strength has improved in the year to date (1 January 2022: 220 per cent). 
On 15 June 2022, Standard & Poor’s (S&P) confirmed its rating of A+ for the Baloise Group. 
Consolidated equity declined in line with expectations in the first half of 2022 due to the sharp rise in interest rates, standing at CHF 5,021.0 million at 30 June 2022 (31 December 2021: CHF 7,299.9 million). Substantial interest-rate increases in the first half of 2022 led to downward adjustments to the valuation of fixed-income investments. In recent years, equity had grown continuously as a result of falling interest rates. This effect was inverted in the first half of 2022 as interest rates were raised. 
 

Non-life division: solid growth in all markets (adjusted for currency effects) and improved profitability 

Adjusted for currency effects, the volume of premiums in the non-life business increased by 2.3 per cent in the first half of 2022. Translated into Swiss francs, the volume of premiums fell slightly (down by 1.2 per cent) to CHF 2,587.1 million (H1 2021: CHF 2,617.3 million). All national Baloise companies contributed to this stable organic growth.
The premium volume in Switzerland amounted to CHF 1,086.5 million, up by a solid 1.8 per cent compared with the prior-year period (H1 2021: CHF 1,067.2 million). 
The non-life business in Germany achieved very healthy growth of 6 per cent in its premium volume in local currency terms. In Swiss francs, the figure was on a par with the prior-year period at CHF 517.9 million (H1 2021: CHF 518.3 million).
The Belgian business recorded slight growth of 0.6 per cent year on year in local currency terms. This translated to a fall in premium volume of 5.2 per cent in Swiss francs, to CHF 859.4 million (H1 2021: CHF 906.5 million).
Business in Luxembourg grew by an encouraging 2.2 per cent in local currency terms. Translated to Swiss francs, this meant a fall in premium volume of 3.7 per cent to CHF 87.1 million (H1 2021: CHF 90.4 million).
EBIT in the non-life business was on a par with the prior-year period at CHF 162.1 million (H1 2021: CHF 166.2 million). This was despite the fact that EBIT was impacted by a winter storm this year that mainly caused damage in Belgium. 

Nevertheless, profitability in the non-life business remained very strong, which highlights the high quality of Baloise’s non-life portfolio. The net combined ratio here stood at 91.9 per cent compared with 92.3 per cent in the first half of 2021. This gain in margin of 0.4 percentage points was attributable to improvements in claims settlements and lower net claims incurred relative to the prior-year period.
Baloise’s portfolio in Switzerland is the most profitable with an excellent net combined ratio of 88.7 per cent. The normalisation in the incidence of large claims in connection with adverse weather events produced a favourable year-on-year effect here (H1 2021: 91.2 per cent). 
In Germany, Baloise was able to improve its net combined ratio to a very good level of 91.0 per cent (H1 2021: 92.7 per cent). On 15 August 2022, it was announced that the run-off portfolio for hospital liability insurance that forms part of the German business is in the process of being sold. No new business has been taken on in this portfolio since 2018. The sale encompasses the entire hospital liability insurance portfolio of Basler Sachversicherungs-AG in Germany, with reserves of around EUR 200 million. The sale is expected to be closed in the second half of 2022.
The net combined ratio of the Belgian business was adversely affected by a winter storm, amongst other factors, resulting in a rise of 1.4 percentage points to 93.9 per cent (H1 2021: 92.5 per cent).
In Luxembourg, the net combined ratio improved significantly to 91.7 per cent (H1 2021: 96.7 per cent). In the prior-year period, higher losses on claims reserves had weighed on the margin in the non-life business. The ratio can thus be considered to have normalised again in the first half of 2022.

Life division: very strong profit contribution

The life insurance business was also robust despite turbulent financial market conditions in the first half of the year. The volume of business in the segment fell to CHF 2,856.6 million (H1 2021: CHF 3,268.0 million), mainly due to lower volumes in the Swiss group life insurance business and lower investment-type premiums. 
Gross premiums written in the traditional life business declined by 6.8 per cent to CHF 2,069.8 million (H1 2021: CHF 2,220.8 million) due to the selective underwriting policy. In local currency terms, the decrease was 5.9 per cent. 
Gross premiums in the Swiss business amounted to CHF 1,726.9 million, down by a total of 8.1 per cent compared with the prior-year period (H1 2021: CHF 1,879.4 million) as a result of the aforementioned effects in the group life business. The Perspectiva collective foundation recorded strong growth. Around 360 new company agreements covering more than 800 employees were concluded in the reporting period. This constitutes a significant improvement on the foundation’s already very positive performance in 2021.
Adjusted for currency effects, the German life business reported encouraging growth with a 2.5 per cent increase in gross premiums written. Translated into Swiss francs, gross premiums reduced by 3.3 per cent to CHF 192.7 million (H1 2021: CHF 199.3 million).
The Belgian business reported strong growth in gross premiums written. In local currency terms, the increase was 16.9 per cent. In Swiss francs, gross premiums went up by 10.2 per cent to reach CHF 101.5 million (H1 2021: CHF 92.1 million).
Gross premiums written in Luxembourg increased by 3.2 per cent in local currency terms, which equated to a slight drop of 2.6 per cent in Swiss francs, to CHF 48.7 million (H1 2021: CHF 50.0 million).
Following strong growth in the business with investment-type premiums in the prior-year period thanks to upbeat capital market conditions, the first half of 2022 saw pressure on sales of these products due to weakness in the markets in connection with geopolitical tensions, inflation and fears of recession. At CHF 786.8 million, the volume of investment-type premiums was significantly down year on year (H1 2021: CHF 1,047.2 million). 
EBIT attributable to the life business was boosted by higher interest rates and came to a very healthy CHF 178.5 million in the first half of the year (H1 2021: CHF 194.6 million). In the prior-year period, the strong performance of the capital markets had a positive effect on EBIT. Market volatility and lower levels of realised gains on investments led to a fall in earnings. The business mix in the life business continued to improve as part of measures to optimise the core business.  

The interest margin improved slightly compared with the end of 2021, rising by 3 basis points to 111 basis points (2021: 108 basis points).
More favourable interest-rate conditions meant that the new business margin in the life business increased a little to 50.1 per cent (H1 2021: 47.6 per cent). 

Geopolitical uncertainty and concerns about inflation shaped the macroeconomic environment and market conditions in the first half of 2022. The central banks phased out their long-standing asset purchase programmes and started to raise interest rates. In response, yields in the bond markets soared. After spending the past three years firmly in negative territory, yields on ten-year Swiss government bonds climbed above 1 per cent in the first half of 2022. The associated higher financing costs and uncertainty triggered double-digit percentage losses in the equity markets and caused corporate bond spreads to widen again.

Insurance assets: solid investment yield in a volatile market environment

The gains on the investment of insurance assets amounted to CHF 544.3 million, which was below the figure for the prior-year period of CHF 649.2 million. Current income stabilised significantly as a result of further reallocations from bonds to private debt and was down only slightly year on year at CHF 548.3 million (H1 2021: CHF 556.7 million).
At CHF 179.5 million, the gains recognised in the income statement were at a similar level to the prior-year period (H1 2021: CHF 177.2 million). Gains on the valuation of properties were CHF 63.0 million higher than in the first half of 2021, amounting to CHF 154.2 million. Impairment losses were up by CHF 65.9 million year on year and were mainly attributable to adverse equity market movements.
Higher currency hedging costs and the depreciation of the euro against the Swiss franc caused an additional year-on-year reduction in profit of CHF 39.2 million.
The return on insurance investments dropped from 1.1 per cent in the prior-year period to 0.9 per cent in the first half of 2022. Unrealised gains fell by CHF 4.5 billion due to significantly higher interest rates and the correction in the equity markets. The rate of return on insurance assets according to IFRS – which includes unrealised net gains and losses on investments but excludes gains and losses on held-to-maturity debt instruments – was minus 6.8 per cent, representing a decrease on the 0.4 per cent rate of return according to IFRS in H1 2021.

Stable returns despite lower investment volumes

As at 30 June 2022, the total assets under the management of Baloise Asset Management stood at CHF 57.6 billion, a decrease of 12.3 per cent in the year to date (31 December 2021: CHF 65.7 billion). This reduction was primarily due to rising interest rates and the resulting lower value of the bond portfolio in respect of insurance assets. However, income from fees remained on a par with the prior-year period. 

Business with external customers continued to grow

Net new assets in the business with external customers amounted to CHF 712.8 million in the first half of 2022, a year-on-year increase of 41 per cent. Assets under management declined by 6.1 per cent, from CHF 13.4 billion to CHF 12.7 billion, owing to market conditions. 
Baloise continues to pursue its strategy for external customers with a focus on selling flagship investment strategies. Two bond strategies, one low-carbon equity strategy and one private market strategy for debt finance of infrastructure were launched for institutional investors. Mixed funds in the retail segment weathered the challenging capital market conditions well in accordance with their risk profiles. 
The further growth of asset management mandates at Baloise Bank SoBa also contributed to net new assets. Personal advice and customised investment strategies helped to further expand the volume of business in spite of high levels of stock market volatility. In the reporting period, the business saw a 14 per cent increase in asset management mandates and investment advice mandates and the volume of managed assets grew by CHF 184.8 million in the first half of 2022.
The real-estate asset class contributed to the positive performance of business with external customers. In the first half of the 2021/2022 financial year, the Baloise Swiss Property Fund (BSPF), which has been listed on the SIX Swiss Exchange since November 2021, reported an increase in rental income (gross earnings). The fund portfolio was further diversified through a transaction in the healthcare sector.
Following the successful placement of Baloise Holding’s first green bond in the previous financial year, another green bond was issued in July of the current year for the purpose of financing properties that have been awarded sustainability certificates. In this context, Baloise also published its first green bond report, which shows that the greenhouse gas emissions of the properties being (re)financed with the capital from the green bond placements are 606 tonnes of CO2 equivalents per year lower than those of a comparable reference portfolio at the time of reporting, thanks to the properties’ energy efficiency specifications. 

Ongoing development of the investment process for sustainable investing

Baloise Asset Management is a key contributor to the sustainability strategy of the Baloise Group. In the reporting period, strong emphasis was placed on the ongoing development of the investment methodology, with the aim of adapting the Baloise Responsible Investment Policy (RI Policy) to our growing ambitions in the field of sustainability and ensuring that it complies with Swiss and European regulatory requirements. In 2021, we adopted the Baloise active ownership strategy, which helps us to harness our financial strength in order to better manage ESG risk at the companies in which we are invested and to achieve positive change at the same time. In the first half of 2022, we published our first report on activities in this area, the 2021 Baloise Active Ownership Report. Over the course of the current year, active ownership activities will be further intensified. Public policy engagement will also remain an important aspect, for example in the form of our renewed participation in the Paris Agreement Capital Transition Assessment (PACTA) in Switzerland.

The expansion of the Home and Mobility ecosystems was driven forward at a rapid pace in the reporting period. 
The strategic partnership with UBS in the Home ecosystem was intensified. Mortgages for owner-occupied properties are being offered across Switzerland via the UBS mortgage platform key4 in collaboration with general agents of Baloise. In addition, customers can use this platform to obtain advice from Baloise on their insurance needs.
The partnership with Houzy, a platform for residential property owners, also grew closer in the first half of 2022. Baloise acts as the exclusive insurance partner for this collaboration. As a new offering, Baloise now provides a home insurance check via this rapidly growing platform. The goal of the check is to show customers what insurance products they would need as potential property buyers or home owners. It also gives users an initial indication of likely premium costs and offers them the option to contact Baloise for advice. Moreover, Baloise customers benefit from access to exclusive deals within the Home and Mobility ecosystems.
In March, Baloise Germany announced that it was investing in the start-up firm independesk in order to be involved in the development of viable solutions for topics such as hybrid working and desk sharing, which are highly relevant for employers. Taking out an account with independesk enables companies to implement customised hybrid work strategies. For example, employees are allocated a monthly personal independesk budget that they can use to access workspaces in their area. Employers can keep an eye on things at all times and can see exactly who is working where. They can also manage their own workspaces on this platform, making them available to their own employees or potentially renting them out to other independesk users by the hour or by the day. The benefits are obvious: employers do not need to have a dedicated workplace for each employee and employees have the freedom to choose where they want to work on any given day, allowing them to shorten their commute. This takes traffic off the road and thus reduces carbon emissions.

In March, we announced the addition of MOBIKO to our Mobility ecosystem. The Munich-based company provides a digital platform that allows employers to manage the travel needs of their employees, who receive a flexible monthly travel budget that they can use according to their individual requirements. Employers receive a digital tool for managing employee travel that automatically ensures compliance with tax regulations, while also promoting sustainable travel choices. This allows companies to make an active impact on their CO2 emissions and reduce corporate travel costs. 
For employees, MOBIKO means that they have global access to any available mode of transport or travel service – both for travelling to and from work and during their leisure time. This includes the use of subscription models for cars as well as bicycle leasing. The costs are conveniently invoiced through an app.

Baloise’s digital insurer FRIDAY expanded its existing home contents insurance product for apartments in France in March 2022 to include additional target groups such as owners and tenants of houses and non-occupying owners (propriétaires non occupants, PNO). In Germany, FRIDAY is marketing its home contents insurance products and running a campaign focused on electric-powered transport (helping owners of electric vehicles to earn a premium by selling their emission allowances). In addition, it launched a personal liability insurance product that is initially being offered through the Check24 price comparison platform, before being rolled out for direct marketing and for marketing via brokers. The market environment in the automotive sector, however, remains challenging due to price pressures and supply chain disruption.

An overview of the innovative projects launched at Baloise since the start of Simply Safe can be found here: www.baloise.com/innovationen. 

Outlook

Following the successful completion of the Simply Safe strategic programme, Baloise has made an energetic start to the Simply Safe: Season 2 phase, which runs from 2022 to 2025. The figures for the first six months show that Baloise is on track. 
The targets that we have set ourselves for 2025 are very ambitious. By 2025, we are aiming to be in the top 5 per cent of the best companies to work for in Europe, to have gained 1.5 million new customers and generated CHF 2 billion in cash, 60–80 per cent of which we intend to distribute as dividends. 
One measure that we are taking in order to help achieve the goals of this strategic phase is the ‘oneBaloise’ rebranding project, which is currently in the final stages of preparation with a view to being launched at the end of October 2022. From this point onwards, all national Baloise companies will operate under Baloise as a single brand name and the brand identity will have been comprehensively updated in order to showcase Baloise’s unique culture even more clearly and consistently for our stakeholders.

• Thursday, 25th August 2022, 9.30 a.m. – 10.30 a.m. CET
• Dial-in number: +41 43 210 57 19
• Conference call ID: 517 965 204#
• Link to Microsoft Teams Call

• Thursday, 25th August 2022, 11.00 a.m. – 12.30 a.m. CET
• Dial-in number: +41 (0) 58 310 50 00
• Link to Webcast