Baloise announces major boost to profit
Switzerland’s fourth largest life-insurer, Baloise, more than doubled its net profit in 2004 to SFr222 million ($184 million) from SFr91.4 million the previous year.
The company said that the strong performance was mainly due to the business at its non-life insurance operations.
Net profit at the unit almost quadrupled last year to SFr184.1 million, compared with SFr34.1 million in 2003.
“We are pleased with the massive progress that has been made… The non-life business achieved an excellent performance,” CEO Frank Schnewlin said in a company statement.
“2004 was a stepping stone. We will continue to enhance our profit over the coming years, with the objective of achieving a return on equity of at least ten per cent in Swiss francs by 2006,” he added.
Baloise’s net combined ratio – a key profitability gauge in non-life insurance – improved by 5.7 percentage points to a record low of 97.5 per cent.
The fact that the ratio dropped below 100 per cent shows that Baloise is now profitable in its non-life underwriting business.
Positive surprise
“It looks very good, a real positive surprise. [The high combined ratio] was a real problem for Baloise…we all know there’s not a lot of money to be made in life insurance,” commented René Locher, an analyst at Kepler Equities.
Baloise’s life insurance unit generated a net profit of SFr54.6 million (compared with SFr34.1 million in 2003).
The company said this was due to its “strategy of only accepting profitable new business”.
Baloise said it planned to raise its dividend to SFr1.1 per share from SFr0.60.
In its outlook the company said that barring unforeseen events it intended to increase pforit “markedly” in 2005.
It added that the group would continue exöploiting lucrative customer segments with a view to achieving above-average growth.
The country’s biggest life insurer, Swiss Life, on Wednesday reported that its 2004 net profit had more than doubled as it had investment gains from selling bonds and boosted premiums.
swissinfo with agencies
In 2004, premium income at Baloise was SFr7 billion, a decline of 4.8 per cent compared with 2003.
Net profit last year was SFr222 million, an increase of 143 per cent over 2003.
Capital and reserves rose 5 per cent to SFr3.5 billion.
Baloise is active in both life and non-life insurance.
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