Dr. Thomas von Planta and Gert De Winter
March 29, 2022
Letter to shareholders on the 2021 Annual Results.
Dear shareholders
Dr Thomas von Planta, Chairman of the Board of Directors (right), and Gert De Winter, Group CEO (left), with a view from the first floor of the Group headquarters at Baloise Park.

Baloise achieved strong results in 2021, reporting a profit attributable to shareholders of CHF 588.4 million, and is in an excellent position for the start of Simply Safe: Season 2. All operating segments and units contributed to this improved result. In the life insurance business, we also benefited from rising interest rates. The result affirms the success of our business model, which is based on sustainable value creation. Insurance is all about managing risk. What sets Baloise apart is that we aim for and achieve sustainable success for everyone: customers, employees and shareholders. Our stakeholders can rely on this stability, especially in difficult times.
The ongoing measures to tackle the coronavirus pandemic continued to put a strain on employees and customers in 2021. Much of the past year was marked by extreme weather events in Europe. Hailstorms, strong winds, heavy rain and the associated flooding took their toll on those affected, who included our customers in Belgium, Germany, Luxembourg and Switzerland. The exceptional weather events were also very challenging for many of our employees who were there by our customers' side, ready to support them during this stressful time. The record storm damage reduced profit by CHF 121 million, making it the biggest ever loss event in the history of Baloise. But we still achieved a strong set of figures even in this difficult environment. This once again illustrates the stability and resilience of our balance sheet, the effectiveness of our risk management and the performance of our employees, who deserve our very special thanks.

Goals as drivers of the transformation

At the close of last year, we successfully completed Simply Safe: Season 1 and transitioned smoothly to the next strategic phase: Simply Safe: Season 2. Building on what we have achieved so far, we are aiming for more growth and to be an important part of people's lives as a service provider. The three strategic targets have been retained and are now even more ambitious. By 2025, we are aiming to be in the top 5 per cent of the best companies to work for in Europe, to have gained 1.5 million new customers and to have generated CHF 2 billion in cash. The experience gained from Simply Safe: Season 1 has shown that ambitious targets accelerate Baloise's transformation. During our strategic journey, the Company has gained a lot of momentum, enabling us to operate sustainably and effectively for all stakeholders. In this context, we are also monitoring the conflict in Ukraine and its potential implications very carefully. In the short term, what is happening there will not impact on our business, as Baloise does not operate in Ukraine or Russia and has only a small investment exposure to Russia. What remains unclear at this stage is how the conflict will affect economies in Europe, and thus our customers, over the medium term.

"Ambitious goals accelerate the transformation"
The rollout of the global vaccination campaign against coronavirus that began in spring 2021 was reflected in a positive response from the markets. The Baloise share price stood at CHF 168.80 on 8 March 2021, following a strong performance in the first four years of Simply Safe: Season 1, but came under increasing pressure over the course of the year.
In 2021, we also embedded sustainability even more deeply within our business processes. The Baloise value creation model has been the basis of our value generation for all stakeholders since 2018. While excellent progress has been made in the area of responsible investment, we are now also turning our attention to underwriting. The question of which risks we are able and willing to insure in future not only affects the stability of Baloise but can also help to nudge the behaviour of our customers towards acting in a more sustainable way. The challenges we face in this regard will become even greater in future. This is one reason why the Board of Directors is adapting and reorganising its committee structure. Changes include transforming the Chairman's Committee into a Strategy and Governance Committee in order to address the strategic topics that will be relevant going forward.

A sustainable approach in policymaking

However, more sustainability is also required in policymaking to strengthen the stability of national economies and to ensure an equitable society. In Switzerland, we are once again facing attempts to place the funding of pensions on a sustainable footing. For years, there has been generational cross-subsidisation where those currently in work are funding the pensions of those who have retired because too much has been promised and current returns are too low. Parameters set by the state such as the conversion rate, minimum returns and the inflexible retirement age are partly to blame. Today's contribution payers are bearing the ever-increasing burden of successive failures to implement the necessary reforms. This makes it all the more important that efforts to reform the pension system should succeed.
Arming ourselves against future large risks is also important. Insurance can be part of the solution here. The coronavirus pandemic has shown that we can rely on the support of the state in a crisis. However, it is not sustainable always to turn to the state - and thus ultimately to taxpayers - after a crisis has already happened. Insurance companies have the specialist expertise required to identify, assess and prevent risks and to deal with large-scale loss events. The industry brought this expertise to bear when it came to covering losses from future pandemics with pandemic insurance. Unfortunately, policymakers currently rely on mitigating damage after the event, using taxpayers' money. Government and business should work together to develop solutions for preventing major risks. We are prepared to contribute our know-how and to play our part for society.
As Simply Safe: Season 1 comes to an end, Baloise is starting the next phase of its Simply Safe strategic journey with a strong set of results. Stability, reliability, growth, innovation and sustainable value creation combined with a motivated workforce and a focus on customers and services are what set us apart. We will continue with this approach in the future. And you, our shareholders, should also be able to continue reaping the benefit in future. The Annual General Meeting will therefore be asked to approve an increase in the dividend of CHF 0.60 to CHF 7.00 this year.

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Operating performance

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Strategic embedding of our ecosystems.

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Baloise Holding AG published this content on 29 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2022 05:03:13 UTC.