ST. GALLEN, Switzerland, Sept. 16, 2004 (PRIMEZONE) -- The Europe-wide active Helvetia Patria Group reports a profit of CHF 73.7 million for the first half-year 2004 (prior-year: CHF 26.8 million). Life and non-life business have both contributed to this favourable outcome. With the shareholders' equity remaining virtually the same the return on the equity increased from 11.7 per cent to 13.8 percentage points. Premium income amounts to CHF 3.07 billion.
The underwriting result improved by 194 per cent to reach CHF 94.8 million while the profit before taxes stands at CHF 100.6 million (+164 per cent). The non-life business is the Group's most important earnings pillar with an operating profit contribution of CHF 74 million. The life business managed to return to a gainful course after suffering a loss in the prior-year's period and now reports a profit of CHF 20.1 million. The non-underwriting result adds CHF 5.8 million to the overall result.
Profitability precedes growth
The first six months 2004 saw a premium income of CHF 3.07 billion which implies a decrease by 12 per cent on the first half of 2003. The non-life business gained from the strong growth (+7.5 per cent) but was unable to compensate for the decline in the life insurance sector (-24.2 per cent). About 58 per cent of the premiums are generated in Switzerland and 42 per cent abroad. The share of the non-life activities could be increased to 46 percentage points while the life sector contributes 54 per cent to the Group's overall premium volume.
Pleasing growth in the non-life business
The underwriting account of the non-life business was mainly characterized by a pleasing growth rate in the premium income which amounted to CHF 1.4 billion at 30.06.2004. Due to a lower loss burden and thanks to a strict cost management the combined claims-/expense ratio improved from 100.6 percent to excellent 99.0 percentage points. The equalisation reserves were endowed by CHF 28.6 million following the legal requirements.
Difficult life business
The premium volume of the life business reported a decline by 24 per cent on the prior-year's period and amounted to CHF 1.7 billion. Responsible for this decline was mainly the Swiss business with both its sectors - individual life insurance and group insurance - suffering substantial losses. There are two reasons for this development: The low interest rate level which makes long-term insurance products not very attractive and our continuously cautious underwriting policy in the business with occupational benefits plans.
Low interest rates influence the investment strategy
The low interest rate had also an influence on our investment strategy. Maturing fixed-interest-rate securities had to be invested in low interest-bearing bonds which contributed to the drop in current income. Within the scope of our risk management we partially hedged the equity and the currency positions. As of mid-year 2004 we had assets under management in the amount of just below CHF 26 billion and produced a performance of 2 per cent.
Unchanged shareholders' equity
The shareholders' equity of Helvetia Patria Group remained practically unchanged during the period under review and stood at CHF 1.15 billion at mid-year despite the fact that the own funds were charged with CHF 44.5 million as the result of a change in the Swiss accounting standard Swiss GAAP ARR. Furthermore, the bonds are carrying CHF 133 million in unrealised gains that are not included in the shareholders' equity.
An optimistic outlook for the future!
Strengthening the operating profitability will be a priority in the second half year as well. The focus on our core businesses - risk and provident insurance - gives Helvetia Patria a clear profile in the markets with above-average growth rates. Profitability and quality, however, of our insurance portfolio will always take precedence. On condition that the loss burden remains in a normal range we are convinced to achieve a pleasing result for the whole year as well.
Please note:
- A telephone conference in English takes place today at 10 am. Please dial the phone number +41 91 610 56 00 if you are interested in participating. Questions are also welcome in German and French. - The Shareholders' Letter and the up-to-date company presentation are immediately available on the Internet: www.helvetiapatria.com - The most important key figures are attached: http://www.newsbox.ch/public/1617/att/1440_mediainformation.pdf
Helvetia Patria Group
The Helvetia Patria is a Europe-wide active insurance service provider with core competencies in risk management (life and non-life insurance business, reinsurance) as well as in private pensions. The Group is active in Central and Southern Europe through its regional offices, subsidiaries and associated companies. The Group headquarters are located in St.Gallen/Switzerland while the headquarters for Switzerland are in Basle. Just under 4'800 employees are providing services to more than two million customers in six European countries. About 2'200 employees are working for the insurer in Switzerland. The Group generated a premium volume of over CHF 5.3 billion in 2003. The registered shares of Helvetia Patria Holding are part of the Swiss performance Index (SPI) and are traded at the Swiss Stock Exchange (SWX) under the symbol HEPN.