Interim Management Statement

    

Interim Management Statement

Interim report
 
Baloise confirms strong growth and soundness
 

* Strong growth, especially in traditional life insurance and occupational
pensions
* Sound operating business

* Further reduction in investment exposure

* Share buy-back launched

* Strong insurance and bank balance sheets

* Unchanged dividend of CHF 4.50 targeted


 
Basel, 18 November 2008. Baloise continues to report operating success and
remains on a growth track: business volume up 2.6% in the first nine months. The
third quarter saw an increase of 5.8%. The consolidated solvency margin remains
above 200%, documenting the Group's solid condition.
 
Strong business volume growth
Total business volume (IFRS gross premiums and unit-linked life insurance) for
the first three quarters, despite unfavourable currency effects, was CHF 6,446
million (previous year: CHF 6,283 million), a 2.6% increase. Third-quarter
business volume was up sharply by 7.2% to CHF 1,478 million (previous year: CHF
1,397 million).
 
In the nonlife sector, the business volume grew by 2.3% to CHF 2,738 million in
the first nine months (previous year: CHF 2,678 million). The Luxembourg and
Austria business units saw especially strong growth at 5.3% and 9.5%
respectively. In the third quarter the nonlife sector posted a volume of CHF 614
million (previous year: CHF 604 million), representing a 1.6% gain. Claims
incurred in the nonlife sector declined compared to the previous year due to the
high quality of the insurance portfolio and the absence of natural disasters.
 
In a difficult environment, the life insurance sector achieved a business
volume of CHF 3,708 million in the period ending 30 September 2008 (previous
year: CHF 3,606 million). Traditional life insurance, which has witnessed a rise
in demand in light of the financial crisis, accounted for the greatest part of
the 2.8% growth. Consequently, unit-linked life insurance saw only a minor
increase of 0.5%. Demand in the Swiss group life business was very strong,
especially in the crisis-wracked third quarter. The business volume in this
segment grew 6.5% in the first nine months. From July to September the life
business volume was CHF 864 million (previous year: CHF 793 million), an
increase of 8.9%. Bucking the trend of the first two quarters, the volume of
unit-linked life insurance grew 21.2%.
 
Also during the third quarter, Baloise Bank SoBa gained new customers and
achieved a positive net new money inflow.
 
Further reduction in investment exposure
The Baloise Group's investment strategy is built on diversification and
investing only in instruments with inherent value that can be fully assessed.
Baloise responded to the market turmoil by further reducing exposure to the
financial markets since the middle of the year.
 
Net share exposure was reduced to 5.7% as at 31 October 2008. This includes
listed shares (2.2%) and alternative financial investments with share exposure.
Since the close of the first half, share prices have declined further, although
the losses have been somewhat offset by gains from hedging instruments.
 
Baloise's investments in fixed-income securities have high borrower quality. 
To date, necessary impairments on fixed-investment securities total less than
0.5% of the value of this investment category.
 
The stable real estate portfolio with its recurring investment income has
proven to be a major income support during the present crisis.
 
Currency risk on fixed-income and alternative investments has largely been
hedged against.
 
Nevertheless, investments remain subject to volatility in the share, interest
rate and currency markets.
 
Baloise is not making use of the option of reclassification with retroactive
effect to 1 July 2008 announced by the International Accounting Standards Board
on 13 October 2008 (IAS39 Amendments).
 
Share buy-back launched
On 29 September 2008 Baloise launched the share buy-back programme announced in
March. Under this programme up to two million shares (up to 4% of outstanding
shares) will be acquired on the first trading line. The buy-back should be
completed by 30 April 2009. By 31 October 2008, 249,570 shares had been
repurchased on the first trading line at an average price of CHF 63.7. The
current status of the buy-back programme can be found at www.baloise.com under
Investor Relations/Baloise share/Share buy-back programme.
 
Strong insurance and bank balance sheets
With an eye on the capital markets, Chairman of the Board of Directors and CEO
Rolf Schäuble said, "We were aware that 2008 would be characterized by volatile
financial markets. Distortions of such severity could, however, not be
anticipated. No one will be able to avoid the consequences. Nevertheless we are
coping well with the financial market crisis. The massive fluctuations among
shares, interest rates and currencies make any reasonable forecast of our profit
for the year impossible today. That said, based on present knowledge, we are
assuming that we will also achieve a positive result in the second half. We are
financially solid and have a strong balance sheet on both the insurance and the
bank side. Our consolidated solvency remained above 200% as at 30 September
2008. We continue to work with determination to carry out our strategic
priorities. We intend to propose a dividend of CHF 4.50 per share, unchanged
from the previous year."
 
Key figures: see attached pdf
 

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Interim reporting obligation
The Baloise Group does not publish quarterly reports. In accordance with the
Directive on the Requirements for Maintaining Listing on the SWX
"EU-Compatible" Segment (DMEU), Baloise is required to publish interim
management reports. The figures in this interim report have not been audited.
The next interim report in the first half of 2009 will be published on 12 May
2009.
 
Legal notice pertaining to forward-looking statements
This statement prepared by Baloise may not be copied or altered by a recipient
for another party, offered or sold to such a party or otherwise distributed
without the consent of Baloise. This document is selective by nature and is
intended to provide an overview of Baloise's fields of business. Neither
Baloise, its executives, management, employees or consultants nor any other
person warrants or guarantees the accuracy or completeness of the information
contained in this report. Neither Baloise, its executives, managers, employees
or consultants nor any other person is liable for any losses incurred directly
or indirectly through use of this report. This report may contain forecasts or
other forward-looking assertions about Baloise that involve risks and
uncertainties. The reader is advised that such assertions are merely forecasts
that may diverge materially from actual results or events. All forward-looking
assertions are based on information available to Baloise on the date of their
first publication in Switzerland. Except as prescribed by applicable law,
Baloise assumes no obligation to update such assertions. This report does not
constitute an offer or invitation to subscribe or acquire Baloise shares.
 

------------------------------------------------
Baloise Group Head Office: Aeschengraben 21, CH-4002 Basel
Website: www.baloise.com (http://www.baloise.com/)
email: [e-mail] / [e-mail]
 
Investor Relations: Phone  [phone]           Fax [phone]
Media Relations:    Phone  [phone]           Fax [phone]
 

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Headquartered in Basel (Switzerland) and with operations in continental Europe,
the Baloise Group is a solution provider in the fields of insurance and
pensions. The Group's strategic focus is on sustainable, profitable growth in
selected target segments. Its markets are Switzerland, Germany, Belgium,
Luxembourg, Austria, Croatia and Serbia. The Baloise Group employs some 8,600
people. Bâloise Holding registered shares are included in the Swiss Market
Index (SMI).
 

Interim report (incl. key figures):
http://marco3.newsbox.ch/publish/baloise/18_131/Baloise_Zwischenmitteilung_18_11_08_e.pdf


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