Helvetia expects exceptionally high claims expenses from severe weather and major events in the third quarter of 2023
Helvetia registered an above-average number of intense severe weather events in the second half of 2023. Storms, hailstorms and heavy rainfall led to considerable damage, mainly in the market units of Switzerland, Italy and Germany. As the leading insurer, Helvetia was also affected by a major fire in Switzerland at the beginning of July 2023 and recorded other smaller natural and major loss events in several market units. As part of its half-year 2023 reporting, Helvetia estimated and communicated the net claims amount of the severe weather events in Switzerland and Italy in July to be in the mid double-digit million range. Helvetia estimated the net claims expenses for the major fire in the low double-digit millions. Due to the above-average number of intensive claims events in recent months, Helvetia currently expects a total net claims burden from natural catastrophes and major loss events of around CHF 200 million in the third quarter of 2023. This means that the claims amount from natural and major loss events in the third quarter alone was around one and a half times higher than in 2022 as a whole.
Continued strong capitalisation
Covering the financial risks arising from natural catastrophes and major loss events is part of an insurance company’s core business. Helvetia remains a reliable partner for customers and shareholders, even in the current challenging market environment. The Group’s capitalisation remains strong, with an estimated SST ratio of around 300 percent at the end of September 2023. Helvetia’s diversified business setup also contributes to its high level of resilience. Helvetia is sticking to its proven dividend policy and confirms its ambition to pay out more than CHF 1.65 billion in dividends for the financial years 2021 to 2025.
Helvetia Asset Management is planning a second capital increase for the Helvetia (CH) Swiss Property Fund in order to acquire a real estate portfolio
In line with the growth strategy of the Helvetia (CH) Swiss Property Fund, Helvetia Asset Management Ltd is assessing the acquisition of eight high-quality properties from the portfolio of Helvetia Swiss Life Insurance Company Ltd, with a value of CHF 229.5 million. On 26 January 2023, in accordance with Art. 63 para. 4 CISA, FINMA granted an authorized exemption for this transaction from the ban on acquisition and assignment pursuant to Art. 63 para. 2 CISA.
To finance the acquisition of the properties, the fund manager is planning to issue new units worth around CHF 170 million on 28 March 2023. With the purchase of the real estate portfolio, existing and new investors in the Helvetia (CH) Swiss Property Fund will have the opportunity to participate in the growth of a profitable investment instrument. The portfolio to be acquired comprises eight Core/Core plus properties in seven cantons and is characterized by good property and locational quality with high revenue and value stability, tailored to the fund’s investment strategy. The Helvetia (CH) Swiss Property Fund is thus continuing to grow in line with its communicated strategy while focusing on quality.
The Helvetia (CH) Swiss Property Fund is a contractual investment fund of the real estate fund category for qualified investors in accordance with Art. 10 para. 3 and 3ter CISA, and was launched on 3 June 2020. As at 30 September 2022, the fund’s real estate portfolio comprised 39 properties with a market value of CHF 862.8 million. After the capital increase, the market value of the real estate portfolio will be approximately CHF 1.1 billion. The fund will thus meet the requirements for being listed on SIX Swiss Exchange. This target, declared prior to the fund’s launch, is probably planned subsequent to a further capital increase.
The exact conditions of the planned capital increase will be published in good time.
Helvetia Asset Management postpones subscription period for first issue of Helvetia Swiss Property Fund
Helvetia Asset Management AG is postponing the subscription period for the first issue of the Helvetia (CH) Swiss Property Fund.
As communicated in the media release of 9 March 2020, the subscription period should have started today.
The reason for the postponement is the currently challenging investment environment due to COVID-19. As a result of this postponement, the launch of the real estate fund – originally scheduled for mid-April – will also take place at a later date.
The Helvetia (CH) Swiss Property Fund will invest directly in real estate assets in Switzerland, mainly in large and mid-sized towns and cities and their conurbations. Investment will focus on residential properties, supplemented by commercial and mixed-use properties. Helvetia Asset Management AG will inform about the new schedule for launching the Helvetia (CH) Swiss Property Funds at the End of April 2020.