Half-year financial results in brief

• Profit attributable to shareholders for the first half of 2024 improved by 6.9 per cent to CHF 219.8 million (H1 2023: CHF 205.7 million).
   
• The volume of business stood at CHF 5,293.0 million (H1 2023: CHF 5,339.9 million), which was down by 0.9 per cent year on year as a result of unfavourable currency effects. Adjusted for currency effects, we achieved modest growth of 0.3 per cent.
   
• The volume of premiums in the non-life business continued to grow, rising by a very healthy 4.6 per cent when adjusted for currency effects. Including currency effects, gross premiums written advanced by 3.2 per cent to CHF 2,715.9 million (H1 2023: CHF 2,632.5 million).
   
• Despite the high volume of claims resulting from storms in Switzerland, the Group’s combined ratio came to 90.4 per cent, underlining the excellent underlying quality of the portfolio. The combined ratio had stood at 92.0 per cent as at the end of 2023 and at 87.3 per cent as at the end of the first half of 2023.
   
• Profit before borrowing costs and taxes (EBIT) in the non-life business decreased to CHF 123.2 million (H1 2023: CHF 158.2 million) as a result of higher claims incurred.
   
• The level of gross premiums in the life business reflected the continuing trend towards semi-autonomous occupational pension solutions. This trend saw gross premiums in the life business decline by 5.1 per cent year on year to CHF 2,162.1 million (H1 2023: CHF 2,277.9 million). The Perspectiva collective foundation registered good growth. It now has 5,100 companies signed up and almost 23,000 beneficiaries.
   
• Profit before borrowing costs and taxes (EBIT) in the life business improved by 39.5 per cent to CHF 145.5 million (H1 2023: CHF 104.3 million) mainly as a result of higher discount rates and an increase in net financial income.
   
• As at 30 June 2024, the total assets under management (AuM) of Baloise Asset Management stood at CHF 58.3 billion, a rise of 0.7 per cent compared with the end of the prior year (31 December 2023: CHF 57.9 billion). The Asset Management & Banking segment contributed EBIT of CHF 41.8 million.
   
• We are confirming Baloise’s capitalisation at a consistently high level and estimate an SST ratio of around 210 per cent as at 30 June 2024 (1 January 2024: 207 per cent). In June 2024, Standard & Poor’s confirmed its rating of A+ for the Baloise Group.
   
• The equity attributable to shareholders swelled by 8.1 per cent to CHF 3,511.9 million (31 December 2023: CHF 3,250.0 million). The contractual service margin (CSM) improved considerably, coming to CHF 4,265.0 million after taxes as at 30 June 2024 (31 December 2023: CHF 3,921.0 million). Comprehensive equity thus went up by 8.5 per cent to CHF 7,776.9 million (31 December 2023: CHF 7,170.9 million).
   
• We proved our ability to achieve a strong level of cash remittance once again in 2024 and are maintaining our attractive dividend policy. Thanks to the optimisation of a Belgian run-off life insurance portfolio in the prior year, we are expecting a one-off cash remittance of CHF 62 million in 2024. This amount, combined with cash remittance from operations, means that Baloise anticipates a high level of cash remittance of more than CHF 500 million this year.
   

Overview of key figures as at 30 June 2024
 

Solid volume of premiums on a par with the prior-year period; increase in profit attributable to shareholders 

The profit attributable to shareholders for the first six months of 2024 was up by 6.9 per cent year on year at CHF 219.8 million (H1 2023: CHF 205.7 million). The substantial increase was mainly due to higher profit contributions from Germany and Belgium and larger contributions from the life business. At the level of profit before borrowing costs and taxes (EBIT), a rise in claims incurred from large claims and natural disaster claims compared with the first half of the previous year was offset by higher earnings in the life business and an improvement in gains or losses on investments in the non-life business. The Group’s EBIT thus went up by 1.8 per cent to CHF 271.9 million (H1 2023: CHF 267.2 million).

The Group’s volume of premiums came to CHF 4,878.0 million, which was on a par with the prior-year period (H1 2023: CHF 4,910.4 million). The slight decline of 0.7 per cent was caused by the ongoing shift in occupational pensions in traditional life business towards semi-autonomous solutions. This decline was offset by healthy growth in the non-life business. Combined with the investment-type premiums (calculated in accordance with IFRS 9), this resulted in a business volume for the Group of CHF 5,293.0 million in the first half of 2024. This equated to a small decrease of 0.9 per cent compared to the prior-year period (H1 2023: CHF 5,339.9 million). Adjusted for currency effects, we achieved modest growth of 0.3 per cent.


Early summer storms weigh on non-life business – ongoing profitable growth and a strong combined ratio

In the last few days of June, heavy storms, and the related flooding in Switzerland in particular, led to an exceptionally high level of claims. Whereas the volume of claims incurred from large claims and natural disaster claims had not been unusually elevated in the first six months of 2023, the claims incurred from the storm events in June came to around CHF 80 million (net) and depressed earnings. This increased the adverse impact from large claims and natural disaster claims on the Group’s EBIT by around CHF 30 million compared with the first half of the previous year.

Nonetheless, we can present a solid set of results and encouraging growth for the first half of 2024 in this business. All our national subsidiaries achieved positive price effects. We grew our market share in both Swiss francs and local currency terms, with the German business notably advancing by 6.1 per cent in Swiss francs and by 8.7 per cent in local currency terms to CHF 553.8 million. In absolute terms, Baloise’s Switzerland business made the biggest contribution to the volume of premiums in the non-life business with very strong growth of 4.3 per cent to CHF 1,153.7 million. Luxembourg registered very good growth once again, growing by 4.8 per cent in Swiss francs and 7.3 per cent in local currency terms to CHF 95.6 million. In Belgium, we stepped up our focus on profitability in a number of sectors, especially motor vehicle insurance. Adjusted for currency effects, we generated growth of 2.6 per cent to CHF 878.6 million.
All in all, Baloise increased its gross premiums written in the non-life business by just over 3.2 per cent in Swiss francs and by 4.6 per cent in local currency terms to CHF 2,715.9 million (H1 2023: CHF 2,632.5 million).

Despite the high level of expenses as a result of the storms, Baloise achieved a strong combined ratio in line with its target range. At 90.4 per cent, the combined ratio was 3.1 percentage points above the ratio in the very good prior-year period, which had not been impacted by an exceptionally high level of claims incurred. The claims incurred ultimately led to lower profit before borrowing costs and taxes (EBIT) in the non-life business of CHF 123.2 million (H1 2023: CHF 158.2 million).

The net gains on investments in the non-life business made up to some extent for the elevated level of claims incurred, coming to CHF 109.0 million in the first half of 2024 (H1 2023: CHF 62.1 million). Current income advanced by CHF 11.6 million to stand at CHF 106.9 million. The gains recognised in the income statement amounted to CHF 17.3 million, up by CHF 36.6 million on the prior-year period. An investment loss of CHF 36.3 million was recognised in other comprehensive income (OCI) as a result of the rise in interest rates in the eurozone and currency derivatives used in hedge accounting. Overall, the (non-annualised) investment performance of the non-life business stood at 0.8 per cent (H1 2023: 1.9 per cent).


Strong profit contribution from the life business

The business volume in the life business fell by 4.8 per cent to CHF 2,577.1 million (H1 2023: CHF 2,707.4 million), owing to the smaller volume of premiums written in the Swiss group life business and in the Belgian life insurance business. As a result, premiums in the life business dropped by 5.1 per cent to CHF 2,162.1 million overall (H1 2023: CHF 2,277.9 million), predominantly due to business in Switzerland and Belgium. Adjusted for currency effects, the decrease was 4.5 per cent.
Business in the individual life division in Switzerland was also down, having benefited from the launch of a tranche product in the prior-year period. Overall, the Swiss life business saw a reduction of 7.8 per cent to CHF 1,588.6 million that was attributable to a reduced volume of group life business (H1 2023: CHF 1,722.9 million). The first half of 2024 was very positive for the Perspectiva collective foundation, by contrast, which notched up an investment performance of 5.6 per cent. The collective foundation continued on its strong growth trajectory of previous years and now has 5,100 companies signed up and almost 23,000 beneficiaries. In the first half of 2024, the foundation assets saw very encouraging growth of around CHF 200 million to stand at CHF 1.76 billion (31 December 2023: CHF 1.56 billion).

In Germany and Luxembourg, the volume of premiums (in local currency terms) climbed by 6 per cent to CHF 256.6 million (H1 2023: CHF 248.1 million) and by 26.0 per cent to CHF 100.6 million (H1 2023: CHF 81.9 million), respectively. Translated into Swiss francs, the increases were 3.4 per cent and 22.9 per cent. The volume of premiums in the Belgian life business fell by a modest 1.5 per cent to CHF 216.3 million in local currency terms.

Investment-type premiums calculated in accordance with IFRS 9 amounting to CHF 415.0 million were written in the first half of 2024 (H1 2023: CHF 429.5 million). This represented a decline of 3.4 per cent in Swiss francs and 1.1 per cent in local currency terms. Our business unit in Luxembourg made the biggest contribution to investment-type premiums at CHF 381.4 million.

EBIT in the life business was very pleasing in the first six months of 2024. The profit contribution soared by 39.5 per cent to CHF 145.5 million (H1 2023: CHF 104.3 million) as a result of higher discount rates for measuring obligations in the life business. The increase in discount rates was attributable to updated assumptions used to calculate the yield curve. The updates led to a substantial increase in the contractual service margin (CSM). The CSM before taxes grew by taxes by 9.4 per cent to CHF 5,323.9 million. In turn, this meant that a larger amount was released from the CSM, resulting in higher EBIT for the segment. The improvement in net financial income also played a part.

Gains or losses on investments in the life segment amounted to a net gain of CHF 176.8 million. Current income deteriorated slightly by CHF 22.4 million to CHF 455.2 million, owing to a smaller investment portfolio. The positive effects from currency and equity market movements were outweighed by the negative change in the fair value of bonds as a result of the rise in interest rates in the eurozone and the increased cost of currency hedging. The negative change in fair value reported in the income statement came to CHF 226.5 million. The (non-annualised) investment performance of the life business stood at 0.3 per cent in the first half of 2024 (2.7 per cent in the prior-year period).
The new business margin in the life business was 5.7 per cent in the first half of 2024 (H1 2023: 6.7 per cent).
The interest rate margin (before policyholder participation) improved slightly to a solid 141 basis points (31 December 2023: 137 basis points). This increase was the result of a slight drop in the average guarantees.


Asset Management & Banking

Following a strong rise in the prior year, EBIT in Asset Management & Banking was slightly lower year on year at CHF 41.8 million (H1 2023: CHF 43.4 million). EBIT continued to be influenced by the increase in third-party assets in the asset management business. In Banking, by contrast, the interest rate margin normalised following a strong rise in the prior year.

As at 30 June 2024, the total assets under management (AuM) of Baloise Asset Management stood at CHF 58.3 billion, a rise of 0.7 per cent compared with the end of the prior year (31 December 2023: CHF 57.9 billion).


Solid expansion of business with third parties

Assets under management in business with third parties increased from CHF 15.0 billion to CHF 16.2 billion, with net new assets contributing CHF 0.7 billion. Net new assets related to a number of items, including the continued growth of the asset management business of Baloise Bank Ltd and of the semi-autonomous collective foundation Perspectiva. Positive trends in private assets and real estate were also a key factor.


Robust level of comprehensive equity, high capitalisation and confirmation of A+ rating

The equity attributable to shareholders stood at CHF 3,511.9 million as at 30 June 2024 (31 December 2023: CHF 3,250.0 million). The contractual service margin (CSM) after taxes came to CHF 4,265.0 million as at 30 June 2024, which was 8.8 per cent higher than at the end of 2023 (31 December 2023: CHF 3,921.0 million).

Comprehensive equity amounted to CHF 7,776.9 million (31 December 2023: CHF 7,170.9 million). It comprises the sum of the contractual service margin after taxes and the equity attributable to shareholders.
Our comfortable capital adequacy was once again confirmed by S&P Global Ratings in June 2024, when it reaffirmed its rating of A+ for the Baloise Group. In its credit rating report, S&P rated Baloise’s capital strength as ‘excellent’ and underlined its very good market positions, strong technical performance and continued high level of capitalisation. The complete report is available at www.baloise.com/ratings.
In the Swiss Solvency Test (SST), we expect a ratio of around 210 per cent as at 30 June 2024 (1 January 2024: 207 per cent).

The investor update media information, including the strategic outlook and the new financial targets, can be found by following this link.

The corresponding presentation can be downloaded here.

In today’s investor update starting at 10.00am, the Company will explain the future strategic direction of Baloise. Interested investors and journalists can register for the webcast using the following link: live video webcast.

For journalists, there will be a short Q&A session for questions about the half-year financial results at 8.30am. Interested parties can join via a video webcast or dial in by telephone.

• Dial-in number: +41 (0)58 310 5000
  Link to video webcast

Further information

• Further information on the financial results for the first half of 2024, including the half-year report, is published at www.baloise.com

• Financial supplement
   

Important dates 

• Wednesday, 20 November 2024: Q3 2024 interim statement
   
• Tuesday, 25 March 2025: Annual financial results for 2024