Key data for the first half of 2014 at a glance:
Please see the Notes for other key data, including comments
- Earnings after tax: CHF 196.9 million(first half 2013: CHF 179.4 million; +9.8 per cent)
- Business volume: CHF4,821.7 million(first half 2013: CHF 4,775.0 million; +1.3 per cent in original currency)
- Solvency I ratio: 238 per cent(2013: 218 per cent)
- Combined ratio (net): 93.6 per cent(2013: 94.9 per cent)
- Equity: CHF 4,382.6 million (2013: CHF 4,131.2 million)
Helvetia Group can look back on a strong first half of the year in 2014 with earnings of CHF 196.9 million, an increase of 9.8 per cent over the previous year. The premium volume grew by 1.3 per cent to CHF 4,821.7 million. The capital base remains at a high level with a Solvency I ratio of 238 per cent (2013: 218 per cent).
Strong rise in profits
The main driver for the increase in earnings for the period at Group level was the result of the non-life business,which increased by 37.5 per cent to CHF 103.1 million, based on solid technical results and a good investment result. Earnings are broadly based geographically. In addition to the usual strong earnings in the home market of Switzerland, almost all the foreign markets contributed to the increased earnings and improved their share of the overall result. The combined ratio improved to 93.6 per cent thanks to a lower level of storm claims than in the previous year. All the markets have a combined ratio of below 100 per cent.
The result in life insurance was CHF 71.9 million, slightly above the same period of the previous year (+0.9 per cent). The solid technical performance was able to compensate for the weaker investment result due to the development of interest rates.The good results made it possible to further strengthen reserves, particularly in Switzerland and Germany, due to the continued low interest rates.
Sustainable growth strategy
At CHF 4,821.7 million, the business volume was up slightly over the first half of the previous year (CHF 4,775.0 million).The growth driver was the more profitable non-life business, which increased by 2.8 per cent.After the portfolio restructuring last year, the German business recorded a solid increase of 3.4 per cent. Helvetia was also able to achieve a significant increase of 2.8 per cent in our home market of Switzerland. Spain and Italy are also seeing the first rays of hope after the weak growth in recent years resulting from the recession: the Spanish unit again realised slight growth of 1.2 per cent and the Italian country market profited from the acquisition of Chiara Assicurazioni.
In the life business, Helvetia managed to keep the business volume stable. Helvetia achieved double-digit growth in this area in Germany, Italy and Austria. In Switzerland, the volume decreased due to the slight decline in the occupational pension business and the fact that a tranche product in the individual life business was only partially reported by the end of June. In Spain, the premium volume followed the market trend and was likewise lower than in the first half of 2013.
Solid capital ratios
Earnings from the Group’s financial assets and investment property amounted to CHF 582.1 million, compared to CHF 594.4 million in the first half of 2013. Higher investment volumes resulted in an increase in the direct income to CHF 510.1 million, CHF 8.8 million more than in the previous year. The direct yield remained largely stable at an annualised 2.7 per cent (previous year: 2.8 per cent).
Helvetia further improved its robust capital position thanks to its overall convincing performance. This can be seen in our outstanding Solvency I ratio of 238 per cent.Despite the payment of an attractive dividend, equity increased from CHF 4,131.2 at the end of 2013 to CHF 4,382.6 million. Return on equity increased from 9.3 per cent to 9.4 per cent due to increased profitability.
Joining forces with Nationale Suisse
Helvetia also announced key strategic steps in the first half of 2014, including the acquisition of Basler Austria. The transaction, which was completed in late August, makes Helvetia one of the top 10 Austrian insurance companies.A landmark decision was made in July this year: Helvetia and Nationale Suisse reached an agreement to form a new insurance group together. This union will create a strong Swiss insurance group with outstanding prospects. The new group will take a leading position in the home market. International growth potential exists owing to attractive positions in selected European markets and expertise in the area of specialty lines.
The takeover of Nationale Suisse is proceeding according to plan. A public purchase and exchange offer for the acquisition of its shares has been extended to the shareholders of Nationale Suisse.The offer period started on 26 August 2014 and continues until 19 September 2014. The Board of Directors and the Executive Management of Helvetia are convinced of the strategic and economic success of this acquisition and recommend that Helvetia shareholders support this offer. Shareholders, customers and employees will receive lasting benefits from the much stronger position in the home market and the further improvement in opportunities abroad. The Board of Directors of Nationale Suisse also recommends that the company’s shareholders accept Helvetia’s offer.
Stefan Loacker, CEO of the Helvetia Group, is pleased with the 2014 interim financial statements and the planned union with Nationale Suisse: “The impressive 2014 interim results underscore Helvetia Group’s successful performance. Profitable growth and a solid capital base create the best foundation to form a unique insurance group with Nationale Suisse with excellent prospects for success.”