In the 2013 financial year the Helvetia Group increased its profit by 9.2% to CHF 363.8 million. Business volume rose by 6.3% (in original currency) to CHF 7,476.8 million. Helvetia remains well capitalised with equity of CHF 4,131 million and Solvency I of 218%. A 2.9% higher dividend of CHF 17.50 per share will be proposed to the Shareholders’ Meeting.
Key figures for the 2013 financial year at a glance:
Earnings after tax: CHF 363.8 million(2012: CHF 333.1 million; +9.2%1)
Business volume: CHF 7,476.8 million(2012: CHF 6,978.5 million; +6.3% in original currency)
Proposed dividend: CHF 17.50 per share(2012: CHF 17.00 per share)
Other key figures and comments are provided in the notes.
The Helvetia Group was once again able to increase its business volume by 6.3% (in original currency, in CHF: 7.1%) in the 2013 financial year. This was primarily driven by the Swiss home market, which improved by 9.9% over the previous year. Germany, Austria and France also recorded positive growth rates, although the growth in France was acquisition-driven. The annual earnings of CHF 363.8 million is 9.2% above the previous year (2012: CHF 333.1 million), a significant improvement.
Well-diversified profitability Both the segments – life and non-life – rose strongly and made important contributions to the overall result with CHF 152.9 million and CHF 191.7 million respectively. Profitability is supported by a broad geographical base: besides the robust Swiss home market, profit growth in the foreign markets was also impressive. The earnings contribution from abroad rose overall, despite continued challenging conditions in some southern European markets, such as Italy and Spain. In the non-life business, the combined ratio fell to 93.6%2, thanks primarily to lower claims ratios. All country markets achieved a combined ratio of fewer than 100%, even though Helvetia had to pay out a number of claims for losses from severe weather events. This success is due to solid portfolio quality, a strong focus on a disciplined underwriting strategy and tailored reinsurance structures. In the life business, the new business margin was at a pleasing 1.6% and therefore above the previous year (0.9%). The rise is predominantly due to the increase in interest rates for new investments. However, the persistently low interest rate environment remains a challenge.
Pleasing development of the premium volume Overall, the development of the Helvetia Group’s business activities was pleasing. In the life area, business volume rose by 8.2% in original currency (in CHF: 8.7%) to CHF 4,731.1 million (previous year: CHF 4,351.2 million). Almost all country markets were able to post considerable improvements in certain areas. The increase in volume was driven by the Swiss home market, which continued to build on its strong market position with growth of 12.3%. The German and Austrian markets also posted dynamic growth with significant increases of 16.3% and 11.9% respectively (in CHF: 18.7 and 14.2%). Spain also recorded growth of 1.6% (in CHF: 3.7%), despite the continued difficult economic environment. Only Italy's volume remained below the previous year's level, which is due to the deliberate adjustment of the sales agreement with Banco di Desio. On the product side, key drivers were Group Life business, as well as unit- and index-linked life insurance products in the Individual Life business. Helvetia is targeting growth in line with its corporate strategy for these capital-efficient, modern products. Their proportion on the overall premium volume of Individual Life rose to 28% (2012: 21%).
The Non-Life business recorded a premium volume of CHF 2,550.9 million (previous year: CHF 2,412.4 million). The growth rate compared to the previous year of 4.3% in original currency (in CHF: 5.7%) was also extremely positive. The Gan Eurocourtage transport portfolio, which Helvetia acquired in France in 2012, provided important stimulus for growth. The markets in Switzerland and Austria were able to stay on their growth path in comparison to the previous year. The volumes in Italy and Spain continued to decline due to the ongoing difficult business situation, although the decline has slowed (from 4.1% the previous year to 2.4% and from 4.8% to 2.5% respectively, always in original currency). Portfolio optimisation in Germany and Italy also had the expected impact on premium development.
Extremely good investment results and continued strong capitalisation With earnings of CHF 1,212.3 million, financial assets and investment properties once again made an important contribution to the overall result. Current income of CHF 985.7 million exceeded the result posted the previous year by CHF 25.8 million. The rise is due to the increase in the investment volume to CHF 37.4 billion. Despite persistently low interest rates, the direct yield only fell by 0.1 percentage points to 2.7%. This moderate decline reflects the successful implementation of the policy to gradually reduce the duration gap between interest-bearing assets and liabilities from the life insurance business over the past few years.
This impressive business development allowed Helvetia to continue to enhance its robust capital position. This is reflected in the continued outstanding Solvency I of 218% and a ratio between 150 and 200% pursuant to the Swiss Solvency Test for the first half of 2013. Equity rose by 2.0% to CHF 4,131.2 million compared to the previous year. The increased profitability also led to a rise in the equity ratio from 9.1 to 9.3%. The outstanding capitalisation and the good earnings position induced Standard & Poor’s to upgrade Helvetia’s rating from „A-“ to „A“ in May 2013. The attractive dividend policy will remain in place: a 2.9% higher dividend of CHF 17.50 per share will be proposed to the Shareholders’ Meeting.
Stefan Loacker, CEO of Helvetia Group, is delighted with the 2013 financial year: „The impressive annual result underlines the successful development of the Helvetia Group. The broad-based growth and the increase in profit show that we are on the right path with our Helvetia 2015+ strategy.“
A media conference in German will take place today at 09:00. This will be followed by an analysts' conference and a conference call in English at 11:30.