Swiss insurer Baloise targets higher returns for shareholders after Cevian move

Swiss insurer Baloise said on Thursday it plans to boost return on equity and will consider buying back shares after activist investor Cevian Capital revealed this week that it owns more than 9% of the company’s shares, making it the largest stakeholder. of it.

Baloise said in a statement that its new targets include a return on equity of 12 percent to 15 percent, cash payout of more than 2 billion Swiss francs ($2.34 billion) from 2024 to 2027 and a higher cash payment of 80% or more.

“After a careful review of our business activities, we have identified substantial potential for increased efficiencies, along with related cost savings and growth opportunities across all of our business units,” said CEO Michael Mueller.

“To unlock as much of this potential as possible, we are launching our reorientation strategy where the focus is on the performance of our core business and its ability to generate value.”

The company said it would consider launching an initial share buyback program next spring.

Cevian disclosed its substantial holding in Baloise on Monday, prompting calls from shareholders for the Swiss insurer to shake up its portfolio and boost yields.

Baloise outlined its future plans, reporting that profit attributable to shareholders for the first half of 2024 rose by 6.9% to almost 220 million francs.

However, turnover fell 0.9 percent year-on-year to 5.29 billion francs due to unfavorable currency effects, it added.

($1 = 0.8533 Swiss francs)

(Writing by Dave Graham; Editing by Rachel More and Sherry Jacob-Phillips)

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Carriers