Baloise Raises Dividend After Boosting Profit on Life Sales

Baloise Holding AG, the 151-year-old Swiss insurer, raised its dividend for the first time in six years after full-year profit climbed on sales of life insurance policies.

The insurer rose as much as 1.7 percent in Swiss trading after increasing the dividend to 4.75 francs a share from 4.50 francs. Analysts surveyed by Bloomberg predicted no change.

“Baloise presents a solid underlying result,” Stefan Schuermann, a Zurich-based analyst with Vontobel, who has a hold rating on the stock, wrote in a note to investors. “The sound solvency position and solid balance sheet allowed for an increase in the dividend.”

Switzerland’s third-biggest insurer posted 2013 net income of 453 million Swiss francs ($514 million), up from 437 million francs a year before. Operating profit at its life insurance unit rose 48 percent to 261.1 million francs, driven by higher sales to business customers in Switzerland and unit-linked sales through its Luxembourg unit, the Basel, Switzerland-based company said today.

Baloise advanced 1.4 percent to 110.60 francs by 9:29 a.m. in Swiss trading, trimming the loss this year to 2.5 percent.

Baloise said its economic capital ratio under the Swiss solvency test, which requires insurers to provide mark-to-market valuations of assets and liabilities taking into account their investments, was “in the green zone,” meaning above 100 percent.

“I’m very proud to raise the dividend,” Chief Executive Officer Martin Strobel told journalists on a conference call. “We want to be a company for our investors that pays an attractive and sustainable, reliable dividend.”

Baloise reduced its return-on-equity goal last year amid low interest rates and said in January its German unit reached an agreement to cut 400 jobs by the end of 2017 to reduce costs.

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