Cevian activist presses Swiss insurer Baloise for strategy reset

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Cevian Capital, Europe’s largest dedicated activist investor, is pushing for a strategic review of Swiss insurance group Baloise after building what it said was a more than 9% stake to become the company’s biggest investor.

The move by Swede Cevian – who has previously run major campaigns at other European insurance groups, including London-listed Aviva – raises the temperature for Baloise ahead of a day of strategy later this week.

Baloise, which has a market value of nearly $9 billion and sells general and life insurance products alongside banking and other services, is one of Switzerland’s top 10 insurers, accounting for almost half of its revenue. It also has operations in other European countries, including a small German unit, which contributed 15% of its revenue last year.

Cevian now owns about 9.4 percent of Baloise, making it its largest shareholder based on the latest disclosures, according to the activist. UBS has a last stated stake of 9.3 percent, including that previously held by Credit Suisse, according to Bloomberg data.

Cevian partner Robert Schuchna said Baloise “has the opportunity to become a top performing Swiss insurer. We believe there is significant value potential in the company.”

Baloise said it does not comment on the relationship with individual shareholders, but “looks forward to September 12 when we will explain the strategic direction of Baloise at our investor update.”

Cevian wants Baloise’s management to refocus the group on countries where it is strongest and has a high market share and direct more of its cash generation to shareholder returns and invest domestically, according to people familiar with its thinking.

This week’s capital markets day is seen by Cevian as a last chance to review the strategy, otherwise governance improvements would be essential, including adding more insurance expertise to the board, these people added.

Baloise has had a difficult run in recent years relative to his peers. Its share price valuation has fallen over the past half-decade, while those of larger rivals Swiss Life, Zurich and Axa have risen. The return on equity of 7% in 2023 and 2024 was also followed by the peers.

Earlier this year, Baloise abandoned a start-up investment strategy that saw it invest about SFr50 million ($59.3 million) a year in new ventures with the hope of achieving revenue of SFr 350 million from these innovations by 2025. Investments included Batmaid, a cleaning services business, and Parcandi, which shows users local parking spaces.

The strengthening of Cevian’s stake comes after Baloise’s shareholders voted earlier this year to remove a critical safeguard against shareholder unrest. This was a long-standing rule whereby investors had voting rights limited to 2%, regardless of the size of their shareholding.

Investment firm zCapital has pushed to change the rule and has been backed by two major proxy firms ISS and Glass Lewis, whose recommendations are influential to passive investors.