Solid result and disciplined growth – measures to improve technical profitability show initial effects

05.09.2024 | Ad hoc announcement pursuant to Art. 53 LR

Overview of key details of the 2024 half-year financial statements:

Underlying earnings at the prior-year level

Helvetia generated underlying earnings in the first half of 2024 of CHF 285.2 million (first half of 2023: CHF 289.7 million). All business areas and segments delivered solid results. Relative to the prior-year period, a higher net claims burden from natural catastrophes – especially in Switzerland – impacted the result.
The performance in Switzerland was offset by an increase in profitability in the Speciality Markets segment, fee business as well as in the non-life business of the Spain, Germany and Italy country markets. In the life business, the contractual service margin (CSM) and thus the expected future profits rose.
The Group's IFRS net income stood at CHF 258.6 million and thus on level of the prior-year period (first half of 2023: CHF 257.8 million).

High resilience unchanged through diversified business base

Helvetia benefited from its diversified business base in what was in some ways a challenging market environment. The S&P Global Ratings (S&P) rating agency recently confirmed its "A+" rating for Helvetia.
Helvetia's resilience is also reflected in its capitalisation, which remains excellent. The SST ratio was estimated to be around 300% at the end of June 2024.

Major growth in non-life business

Helvetia successfully continued on its selective growth path with a focus on profitable and capital-efficient business fields and increased its business volume by 4.7% to CHF 6,927.2 million on a currency-adjusted basis.
Non-life business was key growth driver.
The fee business again posted strong development in the first half of 2024. Fee and commission income increased to CHF 210.7 million (first half of 2023: CHF 194.4 million). This growth can mainly be attributed to the expansion of the non-insurance business around health and elderly care services of Caser in Spain. The fee business contributed more than 5% to IFRS net income.
Helvetia is currently conducting a review of its Group strategy. The results will be presented at the Capital Markets Day in December.

"Helvetia posted a solid result in the first half of 2024 at the very good level of the previous year. This was made possible through the commitment of our staff as well as measures taken to strengthen underlying technical profitability. They showed initial positive effects and expanded the robust basis on which to implement the ambition to distribute sustainable dividend growth", says Fabian Rupprecht, Group CEO of Helvetia, about the 2024 interim financial statements.

In the first half of 2024, Helvetia generated underlying earnings of CHF 285.2 million, almost in line with the prior-year period (first half of 2023: CHF 289.7 million). Despite challenging market conditions in some cases, all business areas and segments reported solid profitability. Underlying earnings in non-life business were influenced by a higher net natural catastrophe claims burden in the first half of 2024 relative to the previous year – especially in Switzerland. By contrast, measures aimed at strengthening the underlying technical profitability yielded their first positive effects. The Spain, Germany and Italy country markets as well as the Specialty Markets segment increased their underlying earnings in the non-life business. Internal Group Reinsurance, which contributes to the performance of the non-life business with reinsurance cover, also generated a much higher result than in the prior-year period.

Life business also posted solid underlying earnings. The result was supported by the stable CSM release.

The IFRS net income in the first half of the year stood at CHF 258.6 million (first half of 2023: CHF 257.8 million). In addition to the underlying earnings, more beneficial non-operational effects relative to the previous year positively impacted the result. These included, in particular, the non-recurrence of an impairment in connection with the intermediary and advisory business in Switzerland in the prior-year period.

Continuation of focussed growth path – non-life business as driver
In keeping with its strategy, Helvetia successfully continued its selective and disciplined growth with a focus on profitable and capital-efficient business fields in the first half of 2024. The business volume amounted to CHF 6,927.2 million (first half of 2023: CHF 6,687.0 million). At constant exchange rates, this represents an increase of 4.7%. Measured in Swiss francs, growth was impacted by exchange rate developments and stood at 3.6%. Insurance revenue, which reflects the share of business earned during the reporting period, stood at CHF 4,544.4 million (first half of 2023: CHF 4,293.6 million).

Non-life business proved the primary growth driver with currency-adjusted business volume growth of 6.4% to CHF 4,407.7 million. In this business area, Helvetia posted an increase in all segments. Rate increases contributed significantly to growth. At the same time, Helvetia wrote business selectively in individual business lines in the first half of 2024 to further optimise the portfolio composition and profitability.

In life business, the business volume stood at CHF 2,529.3 million, thus growing on a currency-adjusted basis by 2.3% (first half of 2023: CHF 2,486.7 million). All three segments – Switzerland, Europe and Specialty Markets – posted growth relative to the previous year. In life insurance, Helvetia continues to pursue a strategy that focuses on capital-efficient business such as pure risk products.

Measures to improve technical profitability show initial results
The Group's combined ratio stood at 95.4% (first half of 2023: 94.0%). The increase is, on the one hand, due to the higher net claims burden from natural catastrophes relative to the prior-year period, especially due to the flooding and severe weather events experienced in Switzerland at the end of June 2024. On the other hand, Helvetia registered a major claim in the France market unit as well as lower gains from the development of prior-year claims. Meanwhile, the current year claims ratio improved. Measures aimed at boosting technical profitability thus yielded their first positive effects, while the portfolio benefited once more from its diversification.

New business in life insurance remains profitable
New business in life developed profitably. Helvetia increased its new business volume with a new business margin of 4.9% (first half of 2023: 5.6%). The new business margin was thus unchanged in the strategic target range of 4% to 6%.

The contractual service margin (CSM) in the life business as at 30 June 2024 rose relative to the end of 2023 to CHF 4,467.1 million (31 December 2023: CHF 4,030.8 million). The profitable new business written during the reporting period and the expected inforce return slightly outweighed the CSM release. Positive operating and economic variances also made a positive contribution to the increase.

Capitalisation remains excellent
Helvetia continues to have outstanding capitalisation. The SST ratio was estimated to be around 300% at the end of June 2024. The S&P Global Ratings (S&P) rating agency confirmed its "A+" rating for Helvetia in July 2024.

Strong fee business and operational efficiency
Helvetia continued the successful implementation of its strategy in the first half of 2024. Besides the abovementioned technical profitability, the development of the fee business and increase in operational efficiency are key. The targeted development of the fee business enabled Helvetia to grow again in the first half of 2024 and to achieve profitable new growth opportunities especially through the expansion of non-insurance business in connection with the health and elderly care services of Caser in Spain. They contributed more than five percent to the Group's IFRS net income. The enhancement of operational efficiency remained a priority. The target in this area was achieved in 2023. Cost efficiency in non-life business improved again in the first half of 2024 as shown by a further reduction in the administration cost ratio.

Strengthening governance through a new corporate structure
As announced at the 2023 annual financial statements, Helvetia will present the new strategy at the Capital Markets Day on 12 December 2024. In May, it was also announced that Helvetia would alter its corporate structure at the start of July and thus strengthen its position and governance into an integrated international insurance company.

Key figures

Contact information

Analysts
Philipp Schüpbach
Head of Investor Relations
Phone: +41 58 280 59 23
investor.relations@helvetia.ch

Media
Jonas Grossniklaus
Head of Corporate Communications
Phone: +41 58 280 50 33
media.relations@helvetia.ch

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Ad hoc announcement (PDF)

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About the Helvetia Group

Helvetia Group, with its headquarters in St.Gallen, has grown since 1858 to become a successful insurance group with over 13,800 employees and more than 7.2 million customers. It has been enabling its customers to seize opportunities and minimise risks for all that time – Helvetia is there for them when it matters. Helvetia is the best partner and is present everywhere that protection needs arise, with insurance, pension and investment solutions from a single source as well as simple products and processes. The insurance group knows the business, from mobile phone insurance and insurance cover for the Gotthard Base Tunnel to the long-term investment of customer assets. Helvetia develops and opens up new business models with enthusiasm and drives forward its own business in a powerful and future-oriented manner. It acts with foresight and responsibility in everything it does: for the benefit of its shareholders, customers and employees as well as its partners, society and the environment.
Helvetia is the leading all-lines insurer in Switzerland. With Helvetia Seguros and Caser, the Spain segment is the second pillar of the Group. With the GIAM (German, Italian and Austrian Markets) segment, the company has firmly established market positions in European countries for above-average growth. In the Specialty Markets segment, Helvetia offers tailored special insurance and reinsurance cover worldwide. With a business volume of CHF 11.3 billion, Helvetia generated underlying earnings of CHF 372.5 million and an IFRS net income of CHF 301.3 million in the 2023 financial year. The shares of Helvetia Holding Ltd are traded on SIX Swiss Exchange.

Disclaimer

This document was prepared by Helvetia Group and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Group. The German version of this document is decisive and binding. Versions of the document in other languages are made available purely for information purposes. Although all reasonable effort has been made to ensure that the facts stated herein are correct and the opinions contained herein are fair and reasonable, where any information and statistics are quoted from any external source such information or statistics should not be interpreted as having been adopted or endorsed as accurate by Helvetia Group. Neither Helvetia Group nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained in this document are as up to date as is reasonably possible but may be subject to revision in the future. Neither Helvetia Group nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document.
This document may contain projections or other forward-looking statements related to Helvetia Group which by their very nature involve inherent risks and uncertainties, both general and specific, and there is a risk that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include: (1) changes in general economic conditions, in particular in the markets in which we operate; (2) the performance of financial markets; (3) changes in interest rates; (4) changes in currency exchange rates; (5) changes in laws and regulations, including accounting policies or practices; (6) risks associated with implementing our business strategies; (7) the frequency, magnitude and general development of insured events; (8) mortality and morbidity rates; (9) policy renewal and lapse rates as well as (10), the realisation of economies of scale as well as synergies. We caution you that the foregoing list of important factors is not exhaustive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties. All forward-looking statements are based on information available to Helvetia Group on the date of its publication and Helvetia Group assumes no obligation to update such statements unless otherwise required by applicable law.