Helvetia's Profit Remains Stable in the First Half of the Year Despite Growth
Helvetia's results for the first half of 2024 were constrained by storm-related damage, causing net profit to stagnate despite an increase in business volume. The company aims to improve its technical profitability.
In the first half of 2024, Helvetia increased its business volume (Underlying Earnings) by 3.6 percent to 6.93 billion Swiss francs. Adjusted for currency fluctuations, the increase was 4.7 percent.
The non-life business was the primary driver of growth, with a currency-adjusted increase of 6.4 percent to 4.41 billion francs.
Net profit under IFRS rose slightly by 0.3 percent to 259 million francs, according to the insurance group’s report on Thursday. The return on equity for the first half of the year was 13.4 percent, at the upper end of the targeted range of 11 to 14 percent.
Solid Results
The company reported solid results across all business areas and segments. However, a higher net loss from natural catastrophes, particularly in Switzerland, impacted the results compared to the previous year. More favorable non-operational effects also contributed positively compared to the prior year.
Efforts to bolster underlying technical profitability have shown already yielded positive results. The market in Spain, Germany, and Italy, along with the Specialty Markets segment, have all reported increased underlying earnings in the non-life business. Notably, in Spain, Helvetia′s acquisition of Caser has further contributed to this positive trend.
Increased Loss Ratio
The group's combined ratio rose to 95.4 percent from 94.0 percent in the previous year, due to higher net losses from natural catastrophes. Notable events included the flooding and storm incidents in Switzerland at the end of June 2024, a major loss in the French market unit, and lower profits from the settlement of prior year claims. Despite these challenges, there was an improvement in the loss ratio from claums for the period.
The new business in the life insurance sector developed profitably, with new business volume increasing at a margin of 4.9 percent (compared to 5.6 percent the previous year). The margin remains within the strategic target range of 4 to 6 percent.
Strategt Review in December
Helvetia aims to enhance its fee-based business and operational efficiency. The ongoing strategic program, which runs until 2025, has been confirmed but is under review. An update will be provided at the Investor Day in December. The commitment to sustainably increasing dividends has been reaffirmed.
