(Updates with analyst comment in fourth paragraph.)
Aug. 30 (Bloomberg) -- Baloise Holding AG, Switzerland’s third-biggest insurer, said first-half profit fell 3.4 percent because of the weakening euro against the Swiss franc.
Net income dropped to 203.3 million Swiss francs ($249 million) from 210.4 million francs a year earlier, the Basel, Switzerland-based company said today in an e-mailed statement.
Baloise is forecasting it’ll add 100 million francs to 120 million francs to full-year results, Chief Executive Officer Martin Strobel said on a conference call. The company reiterated its target for a return on equity of 15 percent. Premium volume in Swiss francs decreased 1.2 percent because of the weak euro and total business volume dropped 15 percent.
“The results were lacking overall because of the foreign exchange impact,” said Stefan Schuermann, a Zurich-based analyst with Vontobel. “The impact was more than expected.”
The weakening euro against the Swiss franc was the “biggest external” factor weighing on the results, Chief Financial Officer German Egloff said on a conference call.
Baloise generates almost 35 percent of its business volume in Germany, Belgium and Luxembourg.
The company’s spending on claims and other costs as a percentage of premiums, also known as the combined ratio, worsened to 93 percent from 90.2 percent a year earlier after higher large claims above 3 million francs.
Net investment income declined 19 percent as the Swiss franc gained against the euro, the company said. Baloise, which held about 919 million francs in sovereign debts from Greece, Ireland, Italy, Portugal and Spain, had no impairments on sovereign bonds in the first half.
Strobel said he expects claims of about 50 million francs from the hail storms in Switzerland in July and August for the second half.
--Editors: Paul Verschuur, Steve Bailey
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