Key data for the 2014 financial year at a glance:
Please see the Notes for other key data, including comments.
- Underlying earningsUnderlying earnings* after taxes: CHF 422 million (2013: CHF 364 million; +15.9%
- IFRS result after tax: CHF 393 million (2013: CHF 364 million; +8.1%)
- Business volume: CHF 7,767 million (2013: CHF 7,477 million; +4.4% in original currency)
- Solvency I ratio: 216% (2013: 218%)
- Combined ratio (net): 93.1% (2013: 93.6%)
- Equity excluding preferred securities: CHF 4,963 million (2013: CHF 3,831 million)
- Requested dividend distribution: CHF 18.00 per share (2013: 17.50 per share)
Helvetia produced a very good performance in 2014 and successfully completed the acquisitions of Nationale Suisse and Basler Austria. Helvetia’s IFRS result for the period has been significantly distorted by temporary special effects following the acquisitions. Helvetia is therefore focusing on its “underlying earnings” until the end of the 2017 financial year, which eliminates these temporary effects and therefore reflects the operating performance of the new Helvetia Group.
The Helvetia Group substantially increased its underlying earnings by 15.9% in 2014 to CHF 421.7 million (previous year: CHF 363.8 million). CHF 22.1 million is attributable on a pro rata basis to the acquired companies Basler Austria and Nationale Suisse for the 2014 financial year.
The improvement stems from the non-life business and is based on an increase in underlying earnings of 33.2% to CHF 255.4 million (previous year: CHF 191.7 million). This is due to an organically improved technical result, also boosted by the two acquisitions. The net combined ratio improved to 93.1% (previous year: 93.6%). This allowed Helvetia again to surpass its target of a combined ratio of between 94-96%. In addition to the typically strong Swiss domestic market with a combined ratio of 85.4% (previous year: 84.7%), all European national markets achieved a combined ratio of less than 100% and overall an increased profit contribution.
The underlying earnings in the life business of CHF 151.2 million remained largely stable (previous year: CHF 152.9 million) in a difficult capital market environment, while the result from “other activities” also declined as a result of capital market conditions.
The annual result for 2014 under IFRS of CHF 393.3 million with an increase of 8.1% is also considerably higher than in the previous year. The IFRS annual result was significantly influenced by acquisition effects and includes integration costs of CHF 84.9 million, depreciation on intangible assets and additional scheduled depreciation due to the revaluation of interest-bearing securities of CHF 83.1 million and valuation gains in the amount of CHF 108.9 million on Nationale Suisse shares, which were already held by Helvetia prior to the acquisition.
Acquisitions bring dynamic growth
The Helvetia Group’s business volume grew 4.4% in 2014 in original currency to CHF 7,766.6 million (previous year: CHF 7,476.8 million). The two companies acquired in 2014, Nationale Suisse and Basler Austria, made their first contribution to growth in the amount of CHF 328.1 million. The consolidation of the new companies was carried out at the end of 2014 on a pro rata basis and will fully materialise in the 2015 financial year. The business volume grew organically by 0.3% (in original currency). Both the life and non-life businesses benefited from the acquisitions. Helvetia is now one of the top 3 leading all-lines insurers in Switzerland. Helvetia is one of the top 10 insurance companies in Austria. The acquisition of Nationale Suisse also enabled Helvetia to expand its position in other European markets.
Integrations on schedule
The integrations of Basler Austria and Nationale Suisse are progressing as scheduled. The leadership, target organisations and a harmonised product range have been defined in all national markets for the “new Helvetia.” The acquired company in Austria now operates under the brand name “Helvetia.” The new sales organisation has already begun selling the standardised range of life insurance products. As part of the integration of Nationale Suisse, the joint commercial launch of the extended branch network under the name Helvetia is planned in Switzerland for 1 May 2015; the German, Spanish and Italian national markets will follow gradually in the second half of 2015. The strategic review process initiated by Nationale Suisse in Belgium has been completed with the sale of Nationale Suisse Belgium.
Solid investment returns and strong capitalisation
The successful course of business and the acquisitions of Nationale Suisse and Basler Austria have increased the Helvetia Group’s investment assets to CHF 48.0 billion (previous year: CHF 39.6 billion). In 2014 Helvetia generated current income of CHF 993 million, corresponding to a direct return of 2.5%. The decline of 0.2 percentage points against the previous year is largely due to falling interest rates, which resulted in lower returns for new investments. Despite this, the performance of fixed-interest securities reached a peak, generating returns of 10%. Shares generated returns of 12.2%. Including the permanent contribution from property assets, the overall performance amounted to an attractive 7.7% and generated value of CHF 2.95 billion. Of this, CHF 1.28 billion (previous year: 1.16 billion) was reported in the income statement, while CHF 1.68 billion remained in equity as unrealised gains.
Helvetia also has a very good capital position following the two acquisitions. This is also reflected in the strong Solvency I ratio of 216% (previous year: 218%). The SST ratio is between 150-200%. Equity excluding preferred securities increased to CHF 4,963.1 million, inter alia due to the capital increase in connection with the purchase and exchange offer for Nationale Suisse (previous year: CHF 3,831.2 million). Standard & Poor’s confirmed Helvetia’s ‘A’ rating following the completion of the acquisition of Nationale Suisse at the end of October 2014 and considered it to have a stable outlook. The attractive dividend policy is continuing and a proposal has been made to the Shareholders’ Meeting for a 2.9% increase in the dividend to CHF 18.00 per share.
Stefan Loacker, CEO of the Helvetia Group, is delighted at the strong performance in the 2014 reporting year, stating “the Helvetia Group can look back at a strategically and operationally successful financial year. The integration of Nationale Suisse and Basler Austria is well on track. The “new Helvetia” vision is very quickly becoming a reality: top 3 in Switzerland, a strong position in Europe, supplemented by international speciality markets. This creates further growth opportunities in the medium and long-term, in addition to substantial scale and scope effects and an improved risk profile. The newly formed insurance group therefore has the best foundations for sustainable, solid further development.”
- A media conference in German will take place today at 09:00. This will be followed by an analysts' conference with conference call in English at 11:30.
- The analysts' conference can be followed on the internet at www.helvetia.com/en. A web replay of the analysts' conference will be available on www.helvetia.com/en from 16:00 today.
- The shareholders' letter, the preprint of the annual report and Powerpoint presentation for the media and analysts' conference can be downloaded from www.helvetia.com/infokit-en infokit immediately.
- The most important key figures are provided in the enclosed fact sheet.