Baloise lifts profit by 60.6% in 2024

By Aidan Gregory

March 25 - (The Insurer) - Baloise increased its profits by 60.6% in 2024 as the Swiss insurer’s refocusing strategy gathered momentum.

In its annual results on Tuesday, Baloise reported a profit attributable to shareholders of 384.8 million Swiss francs ($394.7 million) for 2024, up from 239.4 million Swiss francs in 2023. The insurer’s combined ratio last year was 92.9%, an improvement from 94.6% in 2023.

Baloise’s business volume was almost flat at 8.6 billion Swiss francs.

Excluding the impact of a 92 million Swiss franc charge due to the sale of digital P&C insurer Friday to Allianz in October, Baloise made a return on equity of 13.9%, up from 7.2% in 2023.

Following the improvement of its results in 2024, Baloise has increased its dividend by 0.40 Swiss francs to 8.10 Swiss francs per share. The company has also said it will buy back 100 million Swiss francs of stock, lifting its cash payout ratio to 83% in 2024, up from 72% in 2023.

The 161-year-old Swiss insurer is under pressure after Cevian Capital built a 9.4% stake in the company in September, days before its investor day. The Swedish activist hedge fund is due to join Baloise’s board of directors at the next annual general meeting on April 25.

At its investor day in September, Baloise launched a refocusing strategy, which is intended to improve profitability and shareholder returns.

The strategy involves selling unprofitable or non-core assets such as Friday, reversing its previous strategy of investing in startups, and doubling down on profitable lines of business where it can compete at scale, such as its home market of Switzerland.

Baloise has set new financial targets of a return on equity of 12% to 15% and a payout ratio of at least 80% over the next three years.

The presence of an activist shareholder and the company’s underperformance in 2023 has led to Baloise becoming the subject of takeover speculation. According to a report by Bloomberg News last week, Baloise has explored a combination with Helvetia, a rival Swiss insurer.

Allianz, Zurich Insurance and Axa have also examined possible bids for all or parts of the Swiss insurer, according to reports last year.