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

"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.