Swiss insurer Baloise targets higher shareholder returns after Cevian move
Adds shares, paragraph 6
By Oliver Hirt
ZURICH, Sept 12 (Reuters) -Swiss insurer Baloise BALN.S said on Thursday it plans to boost return on equity, cut jobs and will consider share buybacks after activist investor Cevian Capital this week revealed it had become its biggest stakeholder.
Baloise said in a statement that its new targets include a return on equity of 12% to 15%, cash remittance of more than 2 billion Swiss francs ($2.34 billion) in the period 2024-2027, and a higher cash payout ratio of 80% or more.
"Following careful analysis of our business activities, we have identified substantial potential for raising efficiency along with related cost savings and opportunities for growth in all our business units," CEO Michael Mueller said.
"To unlock as much of this potential as possible, we are launching our refocusing strategy in which the emphasis is on the performance of our core business and its ability to generate value."
The company said it will look into launching an initial share buy-back programme next spring.
Baloise shares were up by almost 2% in early trade.
Baloise said it wanted to improve cost efficiency by lowering its expense ratio in non-life business by 2-3 percentage points and thus would cut 250 jobs across the firm.
The company currently employs around 8,000 people at its headquarters in Basel and across subsidiaries in Belgium, Germany and Luxembourg.
Cevian revealed its 9.4% holding in Baloise on Monday, prompting demands from shareholders that the Swiss insurer should shake up its portfolio and boost returns.
Cevian declined to comment on Baloise's new strategy.
Baloise was setting out its future plans as it reported that profit attributable to shareholders for the first half of 2024 rose by 6.9% to nearly 220 million francs.
Still, business volume dipped by 0.9% year-on-year to 5.29 billion francs due to unfavourable currency effects, it added.
($1 = 0.8533 Swiss francs)
Writing by Dave Graham; Editing by Rachel More, Sherry Jacob-Phillips and Tomasz Janowski
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