"Helvetia reported a robust result for 2023. It did so in a challenging market characterised by an accumulation of natural events. I would like to thank all of our employees for the contribution they made to this result last year as well as for the great commitment they demonstrated towards our customers, especially in the face of the aforementioned serious weather events", says Fabian Rupprecht, Group CEO of Helvetia, on the 2023 annual financial statements. He adds: "At the same time, last year also showed how important the excellent management of our core business is. We are continuing to place a clear focus on this aspect so as to enable us to strengthen our technical profitability against the backdrop of a challenging market environment."
Helvetia has been reporting in accordance with the IFRS 17 and IFRS 9 accounting standards since 2023. All prior-year figures are presented on a comparative basis.
Helvetia generated underlying earnings of CHF 372.5 million in 2023 (2022: CHF 492.9 million). A focus has been placed on this key figure for the first time in the 2023 annual results. It shows how the insurance business is performing, irrespective of financial market volatility or other non-operating influences. In 2023, underlying earnings were influenced by extraordinarily high claims from natural catastrophes and large claims events in the non-life business in Switzerland and Europe. In life insurance, Helvetia posted a solid result that slightly exceeded that of the previous year. The result was supported by the CSM release.
IFRS net income stood at CHF 301.3 million (2022: CHF 480.2 million). Unlike in 2022, neither the contribution made to IFRS net income by Sa Nostra Vida (CHF 20.4 million) nor the one-time profit of CHF 87.2 million from the sale of this company at the end of 2022 were included in 2023. The better performance of the capital markets relative to the previous year had a compensating effect on the result.
Continuation of focussed growth path – non-life business as driver
In keeping with its strategy, Helvetia successfully continued on its growth path with a focus on profitable and capital-efficient business fields during the past financial year. The business volume amounted to CHF 11,311.3 million (2022: CHF 10,729.3 million). At constant exchange rates, this represents an increase of 7.2%. In Swiss francs, the business volume grew by 5.4%. Insurance revenue, which reflects the share of business earned during the reporting period, stood at CHF 8,609.5 million (2022: CHF 8,146.6 million).
The non-life business was a strong growth driver and posted an increase of 10.8% on a currency-adjusted basis to CHF 7,117.1 million. In this business area, Helvetia recorded an increase in all segments and lines of business. The strongest growth was recorded by the Specialty Markets segment, which has a cyclical character and last year benefited from an advantageous market environment. The growth achieved by Switzerland, Spain and Austria in particular, was also above the market level. Helvetia was thus able to further expand its market shares in its profitable core business for the third time in succession. Price increases contributed significantly to the premium growth in the Europe and Specialty Markets segments.
In the life business, the business volume amounted to CHF 4,205.3 million (+1.7% on a currency-adjusted basis). 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 focusses on the investment-linked business and pure risk products.
Non-life: natural and large claims events weigh on the combined ratio
The Group's combined ratio amounted to 97.4% (2022: 94.3%). The claims ratio increased considerably relative to the previous year. This development was driven by the extraordinarily high claims burden from natural catastrophes and large claims events during the third quarter. Switzerland, Italy and Germany were hit hardest. As already communicated in November 2023, the net claims burden from natural and large claims events stood at CHF 215.6 million (before tax) in the third quarter of 2023 alone and was therefore around one and a half times as high as in the whole of 2022. An accumulation of mid-sized claims within the usual range of volatility and inflation effects were also noticeable to a lesser extent in individual lines of business. Meanwhile, the cost ratio remained stable at the prior-year level.
Life insurance: new business develops profitably
New business in the life business developed profitably. The new business margin rose to 5.1% (2022: 4.5%). This was due to growth with reinsurance solutions for biometric risks and the positive effects from higher interest rates on new business in the Europe segment.
The contractual service margin (CSM) in the life business as at the end of 2023 rose slightly relative to the end of the prior year to CHF 4,030.8 million (31 December 2022: CHF 3,942.4 million). The new business written and the expected inforce return slightly outweighed the CSM release.
Capitalisation remains excellent
Helvetia continues to have outstanding capitalisation. The estimated SST ratio was over 280% as at 1 January 2024. The S Global Ratings (S) rating agency confirmed its "A+" rating for Helvetia in March 2024.
Higher dividend again
The Board of Directors will propose to the Annual General Meeting that the dividend for the 2023 financial year be increased by CHF 0.40 to CHF 6.30 per share based on Helvetia's profitable growth, resilient result and strong capitalisation. Helvetia will thus continue the attractive dividend policy of recent years.
Helvetia is reaffirming its attractive dividend policy with the creation of free deployable funds at Holding company level. During the course of 2024, Helvetia is planning to transfer CHF 375 million in free capital from the Group's subsidiaries to Helvetia Holding. The Holding company will thus have more free funds available, increasing the Group's financial flexibility.
At the ordinary Annual General Meeting on 24 May 2024, all members of the Board of Directors, including the Chair, will stand for re-election.
Successful implementation of the helvetia 20.25 strategy
Helvetia continued to implement its helvetia 20.25 strategy as planned last year. In addition to the emphasis placed on profitable growth described above, the seizing of new opportunities represents a further focus area. The fee business performed well once more in the 2023 financial year, with fee and commission income increasing to CHF 390.5 million (2022: CHF 350.9 million). This growth can chiefly be attributed to the expansion of the non-insurance business in the area of health and care for the elderly at Caser in Spain. Alongside organic growth, supplementary acquisitions also contributed to the higher fee income. In the 2023 financial year, the fee business contributed more than 5% of the Group's IFRS net income.
Capital Markets Day in December
"After starting at Helvetia, I got to know many strengths that we were also able to build on last year. Our employees identify strongly with the company. This is a key factor in being able to provide our customers with an optimum service. On this basis, we are continuing to work on the systematic implementation of our helvetia 20.25 strategy and the achievement of our strategic financial targets. At the same time, the Board of Directors and the Executive Management are conducting a review of the strategy that will enable us to serve our customers, partners, employees, shareholders and other stakeholders even better in the future", says Fabian Rupprecht. The result of the strategy review will be presented on 12 December 2024 as part of a Capital Markets Day.
Video message from CEO Fabian Rupprecht
Cautionary note
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.
