Aug. 29 (Bloomberg) -- Baloise Holding AG, Switzerland’s third-biggest insurer, said first-half profit climbed 12 percent after non-life sales increased.
Net income rose to 244.8 million francs ($265 million), from 218.3 million francs in the year-earlier period, the Basel-based company said in a statement today.
Baloise reduced its return-on-equity goal earlier this year as low interest rates put pressure on investment returns. The 150-year-old insurer said it will also cut about 400 jobs by the end of 2017 as it targets annual savings of 40 million euros ($53 million) in Germany from 2015. Baloise reported more than 50 million francs of claims in the first half, mainly relating to floods in central Europe in June.
“Even though the German business unit was heavily affected by flood and storm damage, it still managed to increase operating profit,” Dominik Studer, an analyst at J. Safra Sarasin, wrote in a report today. “We appreciate the measures taken to cut costs in Germany and expect a positive restructuring effects to become effective from 2014 onwards.”
Baloise shares advanced 2.1 percent to 99.75 francs at 9:44 a.m. in Zurich trading, bringing this year’s gain to 27 percent and valuing the company at 4.9 billion francs. That compares with a 12 percent increase for the 30-company Bloomberg Europe 500 Insurance Index.
“Our core insurance business is performing well and is highly profitable, putting us firmly on track to achieve our financial targets,” Chief Executive Officer Martin Strobel said in the statement.
The flood losses resulted in the insurer’s combined ratio, which shows spending on claims and costs as a percentage of premiums, worsening to 94.5 percent from 92.6 percent. A ratio above 100 percent means a loss from underwriting.
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