Helvetia benefits from the Caser takeover and positions itself as the best partner for financial security with its new strategy
25.03.2021 | Media releases
The most important details about the 2020 financial year at a glance:
Successful, value-enhancing acquisition of Caser in Spain
Good business performance in the second half of the year
Sustainable dividend
Successful conclusion to the helvetia 20.20 strategy
"2020 was shaped by the extremely successful acquisition in Spain, which is already making a very pleasing contribution to the Group financial statements. With Caser, we have once again been able to deliver on what we promised", explains Philipp Gmür, Group CEO of Helvetia, with respect to the 2020 annual result. "In the first half of the year, in particular, COVID-19 left its mark on the investment result and the claims ratio. The good business performance in the second half of the year demonstrates the robustness of the core business."
Pleasing contribution of Caser to Helvetia's annual result
The IFRS result after tax in 2020 stood at CHF 281.7 million (2019: 538.1 million). During the first half of the year, the pandemic led to major distortions in the capital markets, which weakened the investment results in the life and non-life business. Thanks to the participation in the upswing in the second half of the year, this could be partially offset. The acquisition of Caser, which further optimised Helvetia's diversification, paid off. With a pro rata IFRS result after tax of CHF 54.3 million, Caser made a pleasing contribution to Helvetia's success in 2020.
The net claims burden from COVID-19 for the entire Helvetia Group amounted to CHF 97.5 million. The technical results of the non-life and life segments remained at a solid level during the 2020 financial year. The non-life business generated an IFRS result after tax of CHF 258.5 million (2019: CHF 398.5 million). At CHF 167.1 million (2019: CHF 224.4 million), the earnings of the life business proved pleasingly robust despite the impact of the pandemic on the investment result. The result for other activities in 2020 stood at CHF -143.9 million (2019: CHF -84.7 million).
Solid combined ratio despite the negative impact of COVID-19
In the non-life business, the net combined ratio stood at 94.0% and was thus up on the previous year (2019: 92.3%). Thanks to the good quality of the portfolio and the positive influence of the Caser takeover, the ratio proved to be very solid despite claims relating to COVID-19 and higher costs in connection with projects. The burden owing to COVID-19 stood at 2.3 percentage points. A lower burden from major claims due to natural catastrophes as well as a lower claims frequency in individual business lines as a result of the lockdown had a positive impact.
Robust new business margin in the life business
In the life business, the new business margin declined by 0.2 percentage points relative to the prior year and stood at 2.6% (2019: 2.9%). It thus continued to meet the strategic targets. The slight decline was primarily driven by lower interest rates as well as adjusted cost assumptions. In contrast, the new business margin also benefited from, among other things, adjusted risk discount rates and a further improvement in the new business mix.
Growth in the attractive non-life business
The business volume amounted to CHF 9,713.6 million (2019: CHF 9,454.1 million). The growth can largely by attributed to the acquisition of Caser. Based on a pro rata consolidation, Caser contributed CHF 715.3 million to the volume.
The Group's non-life business was a strong growth driver with an increase of 18.6% in original currency, with organic growth making a pleasing contribution of 8.2% in original currency. In the life business, the business volume developed very well with capital-efficient, investment-linked products in individual life in Europe (+16.2% in original currency) despite the difficult market environment thanks to the Caser acquisition and significant growth in regular premiums. Owing to a one-time strategic decision in the Swiss group life business, a currency-adjusted volume decrease of 9.4% was recorded for life insurance. With the introduction of a new tariff on 1 January 2020, Helvetia has strengthened the future profitability of Swiss group life.
Helvetia now also reports income from fee and commission business. In 2020, this amounted to CHF 225.9 million and increased significantly thanks to the acquisition of Caser and its non-insurance activities.
Participation in the upswing on the equity markets in the second half of the year
During the first half of the year, the pandemic led to major distortions in the capital markets, meaning that the overall investment result of CHF 1,431.8 million fell short of the prior-year figure (2019: CHF 2,834.7 million) despite the higher equity markets supporting a marked recovery during the final six months of 2020. The direct yield declined slightly from 1.9% to 1.7% compared to the previous year. The overall performance stood at 2.7% (previous year: 5.9%).
Unchanged dividend proposed to the Shareholders' Meeting
For the 2020 financial year, the Board of Directors proposes a dividend unchanged against the previous year of CHF 5.00 per share, corresponding to an attractive dividend yield of 5.4%. Caser made a significant contribution to the dividend. The acquisition of Caser strengthened operating cash production, which increased considerably in 2020 to CHF 319.0 million (2019: CHF 279.3 million), allowing Helvetia to ensure the payment of an attractive and sustainable dividend. All members of the Board of Directors are standing for re-election by the Shareholders' Meeting.
Well positioned for the future thanks to successful helvetia 20.20 strategy
The helvetia 20.20 strategy came to a conclusion at the end of 2020. The strategy has enabled Helvetia to strengthen its core business, develop new business models and make targeted use of innovation. Helvetia achieved its goals for the strategy period, including from a financial perspective. It is thus superbly positioned for the future in all segments. In Switzerland, Helvetia was able to assert successfully its top-3 position as an all-lines insurer. Smile developed to become the most important online provider, achieving average annual growth over the past strategy period of 5.3% and now has a premium volume of CHF 100 million and more than 150,000 customers. MoneyPark established itself as a leading independent specialist for mortgages with completed and managed mortgages totalling CHF 27 billion. The Europe business grew strongly, improving its profitability at the same time. In all European country markets, Helvetia was able to position itself promisingly. One milestone here was the acquisition of the Spanish insurer Caser. In the Specialty Markets segment, Helvetia also established an outstanding starting position in selected niches. The expansion of active reinsurance was pushed ahead with vigorously. In France, Helvetia holds a strong number two position on the market as a focused transport insurance specialist. In the area of technical insurance as well as in the transport and art business, Helvetia was also the number one in Switzerland in 2020.
Clear objective for the future: best partner for financial security
With the helvetia 20.25 strategy, Helvetia aims to be the best partner for financial security and to set standards in the areas of customer convenience and customer access. Four strategic priorities have been defined to achieve this vision: customer convenience, a right offering, profitable growth in the core business and the utilisation of new opportunities.
As part of these priorities, Helvetia will pursue the following objectives for the three segments: In Switzerland, it will position itself as a leading Swiss all-lines insurer. The insurance group will further develop the Europe business to become a second pillar of the Group. In the international speciality business, Helvetia will generate targeted growth through the underwriting of new risks in attractive niches.
Ambitious financial objectives
"With our new helvetia 20.25 strategy, we will build on our strengths and vigorously develop Helvetia further to become a European financial services provider for insurance and pension provision", explains Philipp Gmür. "The financial objectives up to 2025 underline our ambition with respect to the quality of our results and growth as well as in terms of our operational efficiency, capital base and the ability to pay dividends."
Watch the video with Group CEO Philipp Gmür:
Key figures
Successful, value-enhancing acquisition of Caser in Spain
- Caser records strong growth in its premium volume in the non-life business and for risk life insurance.
- In the second half of the year, Caser makes a pleasing pro rata profit contribution of CHF 54.3 million thanks to its strong technical development. This has a positive impact on the Group's combined ratio, also due to the fact that Caser is not exposed to a significant burden from COVID-19 in the non-life business.
- Caser makes a substantial dividend contribution.
Good business performance in the second half of the year
- In 2020, Helvetia increases its business volume by 4.5% (in original currency) to CHF 9,713.6 million. This development is driven by the non-life business, which in 2020 records pleasing premium growth of 18.6% in original currency and advances both organically and thanks to the acquisition of Caser.
- Thanks to a robust technical development in the life and non-life business, Helvetia generates a solid IFRS result after tax of CHF 281.7 million (2019: CHF 538.1 million) despite the pandemic and the collapse on the equity markets during the first half of the year.
- Primarily due to the negative impact of COVID-19 and projects, the net combined ratio at Group level stands at 94.0%. This is compensated by positive lockdown effects in some business lines.
- Helvetia's capital position remains at a very good level. According to current estimates, the SST ratio as at 1 January 2021 is in excess of 180%.
Sustainable dividend
- Operating cash production increases significantly to CHF 319.0 million (2019: CHF 279.3 million).
- With a proposed dividend of CHF 5.00 per share, Helvetia offers an attractive dividend yield of 5.4%.
Successful conclusion to the helvetia 20.20 strategy
- During the past strategy period, Helvetia succeeded as planned in strengthening its core business, developing new business models and making targeted use of innovation.
- Examples here include the development of Smile to become the leading online insurer in Switzerland and MoneyPark as the leading independent specialist for mortgages.
- Helvetia also achieved its defined financial objectives over the strategy period.
"2020 was shaped by the extremely successful acquisition in Spain, which is already making a very pleasing contribution to the Group financial statements. With Caser, we have once again been able to deliver on what we promised", explains Philipp Gmür, Group CEO of Helvetia, with respect to the 2020 annual result. "In the first half of the year, in particular, COVID-19 left its mark on the investment result and the claims ratio. The good business performance in the second half of the year demonstrates the robustness of the core business."
Pleasing contribution of Caser to Helvetia's annual result
The IFRS result after tax in 2020 stood at CHF 281.7 million (2019: 538.1 million). During the first half of the year, the pandemic led to major distortions in the capital markets, which weakened the investment results in the life and non-life business. Thanks to the participation in the upswing in the second half of the year, this could be partially offset. The acquisition of Caser, which further optimised Helvetia's diversification, paid off. With a pro rata IFRS result after tax of CHF 54.3 million, Caser made a pleasing contribution to Helvetia's success in 2020.
The net claims burden from COVID-19 for the entire Helvetia Group amounted to CHF 97.5 million. The technical results of the non-life and life segments remained at a solid level during the 2020 financial year. The non-life business generated an IFRS result after tax of CHF 258.5 million (2019: CHF 398.5 million). At CHF 167.1 million (2019: CHF 224.4 million), the earnings of the life business proved pleasingly robust despite the impact of the pandemic on the investment result. The result for other activities in 2020 stood at CHF -143.9 million (2019: CHF -84.7 million).
Solid combined ratio despite the negative impact of COVID-19
In the non-life business, the net combined ratio stood at 94.0% and was thus up on the previous year (2019: 92.3%). Thanks to the good quality of the portfolio and the positive influence of the Caser takeover, the ratio proved to be very solid despite claims relating to COVID-19 and higher costs in connection with projects. The burden owing to COVID-19 stood at 2.3 percentage points. A lower burden from major claims due to natural catastrophes as well as a lower claims frequency in individual business lines as a result of the lockdown had a positive impact.
Robust new business margin in the life business
In the life business, the new business margin declined by 0.2 percentage points relative to the prior year and stood at 2.6% (2019: 2.9%). It thus continued to meet the strategic targets. The slight decline was primarily driven by lower interest rates as well as adjusted cost assumptions. In contrast, the new business margin also benefited from, among other things, adjusted risk discount rates and a further improvement in the new business mix.
Growth in the attractive non-life business
The business volume amounted to CHF 9,713.6 million (2019: CHF 9,454.1 million). The growth can largely by attributed to the acquisition of Caser. Based on a pro rata consolidation, Caser contributed CHF 715.3 million to the volume.
The Group's non-life business was a strong growth driver with an increase of 18.6% in original currency, with organic growth making a pleasing contribution of 8.2% in original currency. In the life business, the business volume developed very well with capital-efficient, investment-linked products in individual life in Europe (+16.2% in original currency) despite the difficult market environment thanks to the Caser acquisition and significant growth in regular premiums. Owing to a one-time strategic decision in the Swiss group life business, a currency-adjusted volume decrease of 9.4% was recorded for life insurance. With the introduction of a new tariff on 1 January 2020, Helvetia has strengthened the future profitability of Swiss group life.
Helvetia now also reports income from fee and commission business. In 2020, this amounted to CHF 225.9 million and increased significantly thanks to the acquisition of Caser and its non-insurance activities.
Participation in the upswing on the equity markets in the second half of the year
During the first half of the year, the pandemic led to major distortions in the capital markets, meaning that the overall investment result of CHF 1,431.8 million fell short of the prior-year figure (2019: CHF 2,834.7 million) despite the higher equity markets supporting a marked recovery during the final six months of 2020. The direct yield declined slightly from 1.9% to 1.7% compared to the previous year. The overall performance stood at 2.7% (previous year: 5.9%).
Unchanged dividend proposed to the Shareholders' Meeting
For the 2020 financial year, the Board of Directors proposes a dividend unchanged against the previous year of CHF 5.00 per share, corresponding to an attractive dividend yield of 5.4%. Caser made a significant contribution to the dividend. The acquisition of Caser strengthened operating cash production, which increased considerably in 2020 to CHF 319.0 million (2019: CHF 279.3 million), allowing Helvetia to ensure the payment of an attractive and sustainable dividend. All members of the Board of Directors are standing for re-election by the Shareholders' Meeting.
Well positioned for the future thanks to successful helvetia 20.20 strategy
The helvetia 20.20 strategy came to a conclusion at the end of 2020. The strategy has enabled Helvetia to strengthen its core business, develop new business models and make targeted use of innovation. Helvetia achieved its goals for the strategy period, including from a financial perspective. It is thus superbly positioned for the future in all segments. In Switzerland, Helvetia was able to assert successfully its top-3 position as an all-lines insurer. Smile developed to become the most important online provider, achieving average annual growth over the past strategy period of 5.3% and now has a premium volume of CHF 100 million and more than 150,000 customers. MoneyPark established itself as a leading independent specialist for mortgages with completed and managed mortgages totalling CHF 27 billion. The Europe business grew strongly, improving its profitability at the same time. In all European country markets, Helvetia was able to position itself promisingly. One milestone here was the acquisition of the Spanish insurer Caser. In the Specialty Markets segment, Helvetia also established an outstanding starting position in selected niches. The expansion of active reinsurance was pushed ahead with vigorously. In France, Helvetia holds a strong number two position on the market as a focused transport insurance specialist. In the area of technical insurance as well as in the transport and art business, Helvetia was also the number one in Switzerland in 2020.
Clear objective for the future: best partner for financial security
With the helvetia 20.25 strategy, Helvetia aims to be the best partner for financial security and to set standards in the areas of customer convenience and customer access. Four strategic priorities have been defined to achieve this vision: customer convenience, a right offering, profitable growth in the core business and the utilisation of new opportunities.
As part of these priorities, Helvetia will pursue the following objectives for the three segments: In Switzerland, it will position itself as a leading Swiss all-lines insurer. The insurance group will further develop the Europe business to become a second pillar of the Group. In the international speciality business, Helvetia will generate targeted growth through the underwriting of new risks in attractive niches.
Ambitious financial objectives
"With our new helvetia 20.25 strategy, we will build on our strengths and vigorously develop Helvetia further to become a European financial services provider for insurance and pension provision", explains Philipp Gmür. "The financial objectives up to 2025 underline our ambition with respect to the quality of our results and growth as well as in terms of our operational efficiency, capital base and the ability to pay dividends."
Watch the video with Group CEO Philipp Gmür:
Key figures
Contact information
Analysts
Susanne Tengler
Head of Investor Relations
Phone: +41 58 280 57 79
investor.relations@helvetia.ch
Susanne Tengler
Head of Investor Relations
Phone: +41 58 280 57 79
investor.relations@helvetia.ch