• Underlying Earnings: Increased by 42% to CHF529 million.
• Dividend Proposal: Increase of 6% to CHF6.70 per share.
• SST Ratio: Estimated at about 290% at the start of the year.
• Business Volume Growth: 3.1% currency adjusted.
• Non-Life Volume Growth: 5.7% currency adjusted.
• Combined Ratio: Reduced from 97.7% to 95%.
• Fee Business Growth: 7% growth, contributing 7% of the group's IFRS net income.
• IFRS Net Income: Increased by 67% to CHF502 million.
• Non-Life Current Investment Income: Up 22% year on year.
• New Business Volume in Life: CHF2.8 billion, up 4% on the prior year.
• New Business Margin in Life: 4.7%.
• Free Deployable Funds: CHF378 million.
• Dividend Yield: 4.5% based on the 2024 closing share price.

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Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Helvetia Holding AG (XSWX:HELN) reported a 42% increase in underlying earnings to CHF529 million, surpassing previous guidance.
• The company proposed a 6% dividend increase to CHF6.70, supported by strong free deployable funds.
• Diversification across regions helped offset challenges in Switzerland and Austria due to severe weather events.
• Non-life business showed strong growth with a 5.7% increase in volume, supported by effective rate adjustments.
• The fee business grew by 7%, contributing over 7% to the group's IFRS net income, surpassing the 5% target set for 2025.

Negative Points

• Switzerland and Austria faced challenges due to flooding and severe weather events, impacting results.
• Volume growth in specialty markets was lower due to disciplined cycle management.
• The combined ratio, although improved, remains above the target range, indicating room for further efficiency.
• Life business volume declined by 1% due to the non-repeat of a large contract in Spain.
• The cost ratio improvement was less than expected, partly due to business mix and higher acquisition costs in embedded insurance.

Q & A Highlights

Q: On the fee result, should we expect margin expansion to continue, with costs rising more slowly than fee and commission income? What lines will drive this? A: Annelis Luscher Hammerli, CFO: The fee result is driven by various businesses, including health and elderly care in Spain and asset management in Switzerland. While we aim to sustainably maximize profitability, I wouldn't expect such margin expansion every year. However, we are optimistic about maintaining current margins, particularly in the mortgage business.

Q: Can you explain the jump in life cash remittance and its sustainability going forward? A: Annelis Luscher Hammerli, CFO: The increase in life cash remittance is mainly due to a change in capital management strategy, focusing on repatriating excess cash to the parent company. This is not primarily driven by market conditions but by our strategic approach to manage cash more effectively.

Q: How sustainable is the positive investment performance in non-life, and what are your thoughts on potential disposals in Europe? A: Annelis Luscher Hammerli, CFO: The investment performance is due to growth in USD liabilities and high-yielding investments, not a change in asset allocation. Its sustainability depends on volume growth and interest rates. Fabian Rupprecht, CEO: We don't comment on rumors, but any potential disposals would focus on maintaining EPS targets and avoiding dilution.

Q: Can you clarify the cash remittance and free deployable cash strategy? A: Annelis Luscher Hammerli, CFO: Our strategy is to maintain free deployable funds at a level covering one year's dividend. Cash remittances from subsidiaries will support increasing dividends and cover group costs, with any excess used for organic growth.

Q: Are there any updates on businesses not meeting hurdle rates, and is the improvement in the combined ratio sustainable? A: Fabian Rupprecht, CEO: It's too early for significant changes in businesses not meeting hurdle rates. We have plans to address these over 3-4 years. The combined ratio improvement is promising, but we recommend focusing on our guidance of a 2% improvement over the next three years.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.