ST. GALLEN, Switzerland, April 5, 2006 (PRIMEZONE) -- The Helvetia Patria Group, which is active throughout Europe, has reported after-tax profit of CHF 301.9 million for 2005 (2004: CHF 222.6 million). In addition to investment business, non-life business delivered the largest contribution to this improved result, accounting for CHF 262.5 million (+ 80.2 per cent) of Group profit before tax. Consolidated shareholders' equity rose by 21.6 per cent to CHF 2,480.8 million (2004: CHF 2,040.7 million). Based on this excellent result, a dividend increase of 63.6 per cent or CHF 3.50 to CHF 9.00 per share will be proposed to the Annual General Meeting of Shareholders.
Pre-tax earnings rose year-on-year by 40.1 per cent to CHF 420.2 million, of which CHF 262.5 million was accounted for by non-life business and CHF 139.9 million by life business. Thanks to the positive trend in the international financial markets, investment performance was excellent with a return of 5.5 per cent.
As part of the changeover to International Financial Reporting Standards (IFRS), the full results of our most important country markets were published for the first time. Switzerland accounted for CHF 220.4 million or 52.5 per cent of combined profit before tax, followed by Spain with CHF 62.6 million or 14.9 per cent, and Germany with CHF 31.7 million or 7.5 per cent.
On track for growth!
The increase in profit was accompanied by an equally gratifying rise in premiums, which were up by CHF 313.9 million or 6.5 per cent versus the previous year to CHF 5,176 million. This growth is mainly due to life business, where volume was up by 12.0 per cent.
Erich Walser, Chairman of the Board and CEO, commented on the results as follows:
"Last year Helvetia Patria recorded its best ever results, increasing both financial and operating earnings. This underscores the effectiveness of measures implemented in recent years to improve profitability. Despite severe weather losses in Switzerland in the year under review, we have succeeded in enhancing our earnings power even further: a testament to the good quality of the company's profits.
Excellent quality of non-life portfolio
In the year under review non-life business produced a very good underwriting performance, growing by 0.6 per cent to CHF 2,368.6 million. Despite severe weather-related claims in Switzerland, the net combined claims/expense ratio rose by 3.8 percentage points to an excellent 94.0 per cent thanks to a relatively low level of losses in most other countries, coupled with positive underwriting performance in Switzerland during the other months of 2005. This good result reflects the excellent quality of the non-life portfolio on the one hand, and the effects of continued strict cost discipline in all business units on the other.
Comments Erich Walser: "I'm proud that we were able to prove our capabilities and commitment to clients in Switzerland after the floods of August last year. Within a very short period, we handled some 4,700 claims for a gross total of CHF 157.3 million. Yet thanks to our cautious reinsurance policy, only CHF 23.0 million remained on our own books."
Strong life business
In the year under review premium volume -- including unit-linked life insurances -- amounted to CHF 2,790.2 million (2004: CHF 2,491.3 million). This high growth rate was primarily generated by Switzerland, Germany, Italy and Spain, where group life business and fund products were the key drivers.
For 2005 Helvetia Patria passed on 94 per cent of income from occupational pension business in Switzerland to its policyholders, thereby exceeding the prescribed legal quota of 90 per cent.
Good investment business
In 2005, the funds under management of Helvetia Patria rose by some CHF 1,717.6 million to CHF 27.8 billion. Net gains and losses from financial investments trebled year-on-year to CHF 506.9 million. While investment performance recorded an outstanding return of 5.5 per cent, the direct yield dipped slightly from 3.3 per cent to 3.2 per cent due to ongoing low interest rates.
Outstanding return on equity
In the year under review shareholders' equity rose by 21.6 per cent or CHF 0.44 billion to CHF 2.48 billion, while return on equity improved from 12.7 per cent to an excellent 13.4 per cent, thereby exceeding the strategic benchmark of 10 per cent. The main drivers of this growth were net profit for the year and the good performance of the stock markets, particularly in equities. Group solvency increased year-on-year by 27 per cent to 242 per cent at year-end 2005.
Changes in the Board of Directors
Dr. Marguerite Florio, member of the board of Patria Genossenschaft and member of the board of Helvetia Patria Holding since 2001, will not be standing for re-election at the 2006 Annual General Meeting of Shareholders. Dr Hans-Jurg Bernet (from 1.9.2006) and Prof. Dr. Christoph Lechner will be nominated as new members of the board at the Annual General Meeting of Shareholders.
Proposal for an additional increase in dividend
Due to the positive results for the year, the Board of Directors will propose to the Annual General Meeting of Shareholders another increase in dividend of CHF 9.00 per share (+ CHF 3.50 per share or + 63.6 per cent), thus continuing the reliable, sustained dividend policy pursued by the Group in recent years.
"Last year Helvetia Patria performed extremely well, with a marked increase in earnings, targeted growth in business volume and an above-average share price rise of 64.1 per cent," says Erich Walser. "Added to this, we are an economic factor not to be underestimated. Among other things, we are sponsors of Swiss-Ski and last year paid more than CHF 55.6 million in direct taxes. We are planning to equip all our business units with the Group-wide brand "helvetia" over the next 15 months with a view to enhancing our brand identity and strengthening our future market profile. This optimised visual identity will improve our positioning and differentiate us effectively from our competitors."
The new logo is available at:
http://www.primezone.com/newsroom/prs/?pkgid=2510
The good results reflect a solid operating performance in all business units and provide the basis for the continued successful development of Helvetia Patria. The Group will continue to pursue its strategic goal of sustained earnings power -- coupled with healthy growth -- in the current financial year.
Note
-- An analysts' meeting and media conference will be held today
at 09:00 and 11:00 respectively in German.
-- The Shareholders' Letter and an up-to-date corporate
presentation can be downloaded with immediate effect from
http://www.helvetiapatria.com.
-- Key figures are listed in the Annex.
Helvetia Patria Group
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. Helvetia Patria provides with 4'600 employees 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 5.1 billion in 2005 and a net profit of CHF 302 million. 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.
Cautionary statement regarding forward-looking information
This document is made by Helvetia Patria Group and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Patria Group. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Helvetia Patria Group. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Helvetia Patria Group as being accurate. Neither Helvetia Patria Group nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up to date as is reasonably possible and may be subject to revision in the future. Neither Helvetia Patria Group nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document. This document may contain projections or other forward-looking statements related to Helvetia Patria Group which by their very nature, involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (1) changes in general economic conditions, in particular in the markets in which we operate; (2) the performance of financial markets; (3) changes in interest rates; (4) changes in currency exchange rates; (5) changes in laws and regulations, including accounting policies or practices; (6) risks associated with implementing our business strategies; (7) the frequency, magnitude and general development of insured claim events; (8) the mortality and morbidity experience; (9) policy renewal and lapse rates. We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties. All forward-looking statements are based on information available to Helvetia Patria Group on the date of its posting and Helvetia Patria Group assumes no obligation to update such statements unless otherwise required by applicable law. The purpose of this document is to inform Helvetia Patria Group's shareholders and the public of Helvetia Patria Group's business activities for the year ended December 31, 2005. This document does not constitute an offer or a solicitation to exchange, buy or subscribe for securities and it does not constitute an offering circular within the meaning of Art. 652a of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of SWX Swiss Exchange. Should Helvetia Patria Group make in the future one or more capital increases, investors should make their decision to buy or to subscribe for new shares or other securities solely based on the relevant offering circular.
This document is also available in German, French and Italian. The German version is binding.