Baloise Shareholders Approve Dividend Hike Amid Profit Surge

Baloise Holding Ltd’s shareholders have endorsed a CHF 8.10 per share dividend for fiscal year 2024, a CHF 0.40 increase from the prior year, signaling confidence in the Swiss insurer’s financial resilience. The decision, approved at the company’s AGM on April 25, 2025, follows a strong year marked by a 60.6% jump in net profit to CHF 384.8 million, driven by improved underwriting performance and strategic cost discipline.

A Dividend Boost Rooted in Strong Fundamentals

The dividend increase reflects Baloise’s robust financial health. The non-life business, which accounts for the bulk of its operations, saw its combined ratio improve to 92.9% in 2024 from 94.6% in 2023, indicating better claims efficiency. Meanwhile, return on equity (ROE) rose to 13.9%, nearly doubling from 2023’s 7.2%. These metrics, coupled with a CHF 565 million cash remittance (up 14.6% year-on-year), have positioned the insurer to meet its CHF 2 billion cash remittance target for 2024–2027.

The dividend forms part of a broader shareholder-friendly strategy. Alongside the payout, Baloise plans a CHF 100 million share buyback, pushing the total cash return to shareholders to 83% of profit, up from 72% in 2023. This emphasis on capital returns aligns with Baloise’s refocusing strategy, which prioritizes sustainable growth, cost control, and value creation.

Strategic Moves Bolster Long-Term Outlook

The dividend approval comes amid significant strategic shifts. The proposed merger with Helvetia, set for final approval at an extraordinary general meeting on May 23, aims to create Switzerland’s second-largest insurer and a top-tier player in European markets. Once completed, the merger is expected to reduce costs, diversify product offerings, and strengthen Baloise’s balance sheet.

Financial metrics underscore the merger’s potential. Baloise’s comprehensive equity rose to CHF 7.6 billion (CHF 167 per share) by end-2024, while its Swiss Solvency Test (SST) ratio is projected to exceed 200% as of January 1, 2025—a level that signals ample capital buffers. S&P Global Ratings’ reaffirmation of Baloise’s A+ credit rating further validates its financial strength.

Risks and Considerations for Investors

While the dividend hike and merger are positive signs, investors should monitor execution risks. The Helvetia merger’s success hinges on seamless integration, regulatory approvals, and maintaining customer retention. Additionally, Baloise’s reliance on the Swiss market—where it derives most of its revenue—could expose it to local economic downturns.

Conclusion: A Solid Bet for Income Investors

Baloise’s dividend increase and strategic moves make it an attractive option for income-focused investors. With a dividend yield of ~2.1% (based on recent stock prices), robust financial metrics, and a total payout ratio of 83%, the insurer balances shareholder returns with capital preservation. The merger with Helvetia adds further credibility, as does its A+ credit rating and SST ratio above 200%.

The CHF 8.10 dividend is not merely a reward for past performance but a testament to Baloise’s confidence in its future trajectory. With a cash remittance target of CHF 2 billion over four years and a shareholder policy prioritizing returns, Baloise appears poised to deliver steady value. For investors seeking stable dividends and exposure to a consolidating European insurance sector, Baloise’s stock offers compelling upside—provided the Helvetia merger proceeds smoothly.

As Baloise CEO Dr. Thomas von Planta stated in his AGM address, the dividend hike reflects “the fruits of disciplined execution.” For shareholders, this means more than just a payout—it’s a vote of confidence in Baloise’s ability to navigate an evolving market and reward investors for years to come.