Helvetia Raises Dividend After Net Jumps 18% on Investments

Helvetia Holding AG, Switzerland’s fourth-biggest insurer, increased its dividend after full-year profit climbed 18 percent on higher investment income and non-life earnings.

The payout will be boosted to 17 Swiss francs ($18) a share, from 16 francs in 2011, the St. Gallen, Switzerland-based company said today in a statement. Net income rose to 339.6 million francs from 288.2 million francs a year earlier, compared with the 335.3 million-franc average estimate of six analysts surveyed by Bloomberg.

Helvetia, which generates more than half of its revenue in Switzerland, last year took over the transport portfolio of Groupama SA’s Gan Eurocourtage, making it France’s second-biggest transport insurer. Investment income increased 34 percent to 1.18 billion francs in 2012, the insurer said.

The dividend “should please the market,” said Stefan Schuermann, a Zurich-based analyst with Vontobel Holding AG. “Helvetia announced a solid set of full-year results.”

Helvetia closed at 397 francs in Zurich, little changed on the day. The shares have increased 15 percent this year, giving the company a market value of 3.4 billion francs.

Operating profit in non-life, the insurer’s biggest unit, climbed 33 percent to 180.6 million francs, Helvetia said. The company’s property and casualty combined ratio improved to 93.5 percent from 95.6 percent the year earlier.

Demanding Environment

“Our 2012 year-end result shows that we have effectively managed the challenges of a demanding market environment,” said Chief Executive Officer Stefan Loacker. “The acquisitions support our growth and our confidence that we will profitably serve our existing markets in the long term, too.”

The company in November completed its purchase of SEV Versicherungen and said it will buy a 51 percent stake in Chiara Assicurazioni SpA from Italy’s Banco di Desio e della Brianza SpA for 17 million euros ($22 million), while raising its stake in Chiara Vita SpA to 100 percent from 70 percent for 22.5 million euros.

Helvetia said its ratio under the Swiss Solvency Test, which was introduced in January 2011, was “within the range 150 percent to 200 percent” for the second quarter of last year. The new rules require insurers to provide a mark-to-market valuation of assets and liabilities taking into account their investments.

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