Nationale Suisse posts encouraging rise in annual profit and excellent premium growth in 2010
In the 2010 financial year the Nationale Suisse Group achieved a very good result in a challenging marketplace. The insurer also improved premium growth in strategically central areas.
2010 key figures at a glance:
- Marked increase in annual profit of 20.6 % to CHF 92.1 million
- Excellent currency-adjusted gross premium growth of 7.8 % in a competitive market
- High strategy-compliant organic growth in specialty lines of 32.5 % (currency-adjusted)
- Combined ratio improves from 97.3 % to 96.6 % thanks to a lower claims ratio
- Further strengthening of equity capital and increase in the solvency 1 ratio to 183.8 %
- Strategy on track
- Proposed 20 % dividend increase to CHF 1.50
These figures include Group Life Switzerland, which was sold on 1 January 2011.
Very encouraging consolidated result
In the 2010 financial year, Nationale Suisse Group posted an annual profit of CHF 92.1 million, compared with CHF 76.4 million in the previous year. This equates to a 20.6 % increase and a very pleasing net profit, even from a long-term perspective.
"We performed extremely well in an intensely competitive market and in spite of the appreciation of the Swiss franc against the euro in the 2010 financial year. We have significant growth potential, which we will continue to exploit through the consistent implementation of our strategy," said CEO Hans Künzle. "Our priority is still the achievement of above-average growth in specialty lines and a targeted differentation of classical private and corporate client segments."
Strategy on track: high premium growth
In 2010 Nationale Suisse increased gross written premiums by 4.8 % to CHF 1780.8 million (prior year CHF 1698.5 million). In original currencies, thus excluding the negative effects of the weak euro, gross premium growth at Group level reached an excellent 7.8 %.
The high premium growth was, for the most part, attributable to the strategically important specialty lines, where premium growth proceeded as planned in 2010, at an above-average rate to CHF 489.6 million (+26.8 %). In original currencies, premiums even jumped by as much as 32.5 %. Accordingly, the share of specialty lines premiums in the total volume once again increased sharply in 2010.
Our differentiation by selected target groups and "Schlagkraft Schweiz" business model made considerable advances. As a result, Nationale Suisse considerably improved both quality and efficiency in Switzerland, by far our most important market. This resulted in key successes in the private and corporate client segments. The customer service centres, in operation since March 2010, and the intensive training of the sales force played a big part in this success.
Strong earnings growth and improved combined ratio
The underwriting result in non-life business rose markedly in the reporting year by CHF 10.1 million to CHF 24.3 million. The combined ratio improved accordingly from 97.3 % to 96.6 % – and would have been better still had it not been for higher investment in competitiveness and future growth. Life business posted a big pre-tax rise in profits of 124.9 % to CHF 28.5 million. Investment income made a key contribution to this positive result.
Investment result marked by movements in interest rates and exchange rates
Interest rate and exchange rate movements had a tangible effect on the investment result of Nationale Suisse in 2010. Nevertheless net earnings on capital investments rose by 20.5 % to CHF 264.1, which brought capital investment returns to the extremely high level of 4.1 % (prior year 3.5 %).
Solid risk-bearing capacity
Equity capital rose again from CHF 728.6 million to CHF 746.5 million. The solvency 1 ratio also improved from 181.0 % to 183.8 % and will rise significantly in the first quarter of 2011 due to the sale of the Group life business. On an international basis, the ratio is therefore at a good level. The return on equity stands at a good 12.5 %, compared to 11.5 % in 2009.
Unchanged payout ratio and attractive dividend yield
Based on the highly encouraging Group profit for the year, together with the CHF 38 million profit reported by the parent company, the Board of Directors will propose to the Annual General Meeting payment of a dividend of CHF 1.50 per share, an increase of 20 % over 2009. The payout ratio will therefore remain unchanged at 36 %. This equates to an attractive dividend yield of 4.6 %.
Elections to the Board of Directors and consultative vote on the compensation report
At the next Annual General Meeting Balz Hösly and Peter A. Kaemmerer will stand for reelection to the Board of Directors. Balz Hösly is a partner in the law firm MME Partners, Zurich / Zug. Peter A. Kaemmerer was previously a Board member at the Landesbank Baden-Württemberg LBBW. He is leaving LBBW in spring 2011 and will become President of DKSH Japan. The Board will also propose the election of a new member, Hans-Jörg Vetter, Chairman of the Board of Managing Directors at LBBW. At the same time, the articles of association are to be amended and the term of office for all Directors reduced from four to three years.
The Board of Directors will also put the compensation report to the Annual General Meeting for a consultative vote. It contains the basic principles governing the compensation of the Board of Directors and Executive Board, as well as the reporting on compensation in 2010.
Cautiously optimistic outlook
The economic climate remains unstable. However, developments over the first few months of 2011 make Nationale Suisse cautiously optimistic about the entire year. By focusing on selected target groups and introducing tailored insurance solutions, primarily in the Swiss market, it will continue to pursue its differentiation strategy. Unit-linked life products that will help to preserve capital and the Credit Life business are underpinning growth in individual life business in Switzerland. Distribution capacities will be expanded further in specialty lines. For example, the sales office opened in Miami in December 2010 will target the Latin American market and provide additional engineering business for Basel through its regional presence.
New member proposed by the Board of Directors to the Annual General Meeting for election to the Board:
Banker, born in 1952, German citizen
Over a long career, Hans-Jörg Vetter has held many management positions, including Board member at the Bank für Gemeinwirtschaft AG (BFG) from 1990 to 1995, personally liable partner at M.M. Warburg & Co. KG a. A. in Hamburg from 1995-1997, Vice-Chairman of the Board of Managing Directors at Landesbank Hessen-Thüringen from 1997-2000, Chairman of the Board of Managing Directors at Bankgesellschaft Berlin AG and Landesbank Berlin Holding AG from 2002-2009, and since 2009 Chairman of the Board of Managing Directors at Landesbank Baden-Württemberg.
The annual report 2010 and the financial report 2010 can be accessed via the following link:
Nationale Suisse is an innovative, international and independent Swiss insurance group providing first-rate risk and pension solutions in non-life and life business as well as a growing number of tailored specialty lines products. Consolidated gross premiums came to CHF 1.8 billion (2010). The Group comprises the parent company and about 20 subsidiaries with focused product lines in Switzerland, Italy, Spain, Germany, Belgium, Liechtenstein, Malaysia and Latin America.
The headquarters of Swiss National Insurance Company Ltd is in Basel. Nationale Suisse is listed on the SIX Swiss Exchange (NATN). On 31 December 2010, the Group employed 1,948 staff (full-time equivalents).
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Disclaimer and exclusion of liability
This press release is intended to inform the general public about particular events and developments related to the business performance of the company. The information contained does not constitute a solicitation, an offer or a recommendation for transactions concerning financial instruments or other products of Nationale Suisse or any other type of legal transaction. This press release may contain forward-looking statements. While these forward-looking statements reflect the outlook and expectations of Nationale Suisse, a number of risks, uncertainties and other important factors can lead to actual developments and results significantly deviating from the expectations of Nationale Suisse. Attention is furthermore explicitly drawn to the fact that statements and projections contained in this press release by nature may be selective. Nationale Suisse neither implicitly nor explicitly makes representation or provides warranty for the correctness and completeness of statements and projections contained in this press release. Neither Nationale Suisse nor its directors, officers and members of its management assume liability for damages or losses which may directly or indirectly arise from the use of information contained in this press release. Unless in cases in which it is obliged to do so by mandatory legislation, Nationale Suisse is under no obligation to revise or change its forward-looking statements to take account of new information, future events or for any other reason.
Updated information will be available on our website www.nationalesuisse.ch as of the date of publication. This may include further details and projections concerning the business performance of Nationale Suisse.
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