Ladies and gentlemen, welcome to the Half Year Results 2021 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Mr. Philippe Kumher, Group CEO. Please go ahead, sir.
Thank you, madam. Ladies and gentlemen, welcome to our half year conference of Helvetia Group. I would like to welcome you all on the phone. If I say I, then I mean, of course, We I'm joined by Amelie Slusher, our Group Financial Officer and Susan Tengler, our Head of Investor Relations and of course by Jonas Grozniklaus, our Head of Media Relations for Switzerland. I would like to start with the highlights on slide number 3.
As you see on this slide, We were successful in profitably growing our business. We have A business volume which grew by 21%, driven of course by the Gasser acquisition. However, there is more than 5% in original currency of organic growth, Which means that we were successfully growing all our business segments, Switzerland, Europe and Specialty Markets. Annalise will come back to that later on. We could also grow our Fee and commission income by more than 125% in original currency, Driven of course by the fee income of Gasf in Spain, but also due to a favorable Development in Switzerland.
The net income after tax is at 262,000,000 Which we think is a very good number for the 1st 6 months of this year. The Casa acquisition is paying off pretty well. We have a business volume, which we can report out of Casa Of €920,000,000, Gasior is for the first time, of course, consolidated in our half year statement of 20 21. Gasior's IFRS net income contribution lies at CHF 32,000,000. That means Cancer is delivering according to plan and its development is and remains very pleasing.
We successfully started into our new strategy period, Helvetia 2025, Which means that we have, for instance, an ongoing strong growth of more than 12% In our online insurer, Smile in Switzerland, which means that we could successfully expand our Online bank distribution in Italy and which means, for instance, that we could expand our health and care ecosystem in Spain by integrating a new small hospital. Fulfilling our purpose is one of the main issues and topics we are talking about with our Employees and of course, our clients. When we were setting forth this purpose last year, We did not think about all those NatCats we would have to cope with within the last few months. Life is full of risks and opportunities, and we are there when it matters. And we are happy to say that A record amount of around 50,000 claims notifications could be handled within the last It means fulfilling our purpose is at stake And we are happy to report that Helvetia is able to really fulfill this Purpose to be there when it really matters to help our clients also in different times.
With that, I would like to hand over to Annalise, our CFO, which is Explaining the financial figures, I will then come back for a couple of Comments regarding our strategy 2025, and we are rounding up this conference with a Q and A session. Annalise, please go ahead.
Ladies and gentlemen, a warm welcome also from my side. Within the next 15 minutes, I will give you more detailed information on our financial performance in the first half of twenty twenty one. We will use a simplified presentation for this conference. The full slide deck with additional information is available for download on our website. I would like to start with Slide 5, where we have summarized the key figures of Helvetia's performance in the first Half year of 2021.
Evertzka can look back on a successful business development in the first half of twenty twenty one. A quick look on the key performance indicators shows that Hervetsia's core business is in a good shape And that Helvetsia was able to generate profitable growth. The group's business volume increased by 21 percent in original currency to around CHF 7,000,000,000. Around 3 quarters of the growth was due to the acquisition of the Spanish insurance company, Castor, in the previous year. This transaction, as you may remember, was completed at The end of June 2020.
The business of Kastel is therefore now included in the income statement of Helvetia Group And was not included in half year twenty twenty. Also organically, Helvetia posted a growth of 5 point 2% in original currency. Overall, the group's Non Life business was a pleasingly strong growth driver with an increase of 31.5 percent in original currency. In addition to the positive impact of the acquisition of Castel, Which accounted for around 2 thirds of the growth in Non Life, HealthFairja also recorded a successful organic increase of 9.9% in original currency. In line with its strategy, Erfertia expanded the Non Life business In all the county markets and in the area of specialty markets.
In the life business, Herveta increased its Business volume by 8.7 percent in original currency. In addition to Castor, which made a significant contribution to this growth, The main drivers were investment linked solutions that increased significantly in both Switzerland and Europe. Efresia generated an IFRS net profit after tax of CHF262 1,000,000 in the first half of twenty twenty one. A good business development with solid technical results in the Non Life and Life business was supported By substantially higher investment results following the favorable development of capital markets. Ulster also made a substantial profit contribution in the amount of CHF 32,000,000.
With 94.5%, the net combined ratio improved compared to the prior year despite higher claims from natural catastrophes, Mainly because of non recurring COVID-nineteen claims in the prior year and the positive one off effect in Switzerland. I will give you more details in a moment. Worth mentioning is also very solid capitalization. As of 30th June, 2021, Hefezia estimates its asset ratio to be above 220%. On the next slide, I would like to provide you with additional information on the net income after tax.
Slide 6 gives you an overview of the IFRS result after tax of the individual segments and business areas. The IFRS result after tax increased to CHF262 1,000,000 in the first half of twenty twenty one. The Switzerland, Europe and Specialty Markets segments and both the Life and Non Life Business divisions were able to increase their results. In Switzerland, a significantly better result of CHF177 1,000,000 was recorded compared to the This year after the first half of twenty twenty have been affected by the effects of the pandemic. In both the Life and Non Life business areas, the investment results were stronger, thanks to the participation In non life, the technical result increased mainly due to nonrecurring COVID-nineteen loss in the prior year and the positive one off effect attributable to an adjustment of reserves.
These two effects compensated for an increase in claims from natural catastrophes and higher costs primarily related to the growing B2B2C Business and Projects. In the live business, the higher gains on investments were only partially offset by higher for reserve strengthening and policyholder participation. The absence of positive special effects In the previous year, in connection with the introduction of a new tariff in Group Life was also compensated for by the investment gains. In the Europe segment, the IFRS result of the taxes increased to CHF 100,000,000 in the first half of twenty twenty one. The development was positively influenced in both the Life and Non Life business areas by Castor.
Karlser contributed a profit of CHF 32,000,000 to the segment result. In addition, the non Life and Life businesses also Solid technical results. Overall, all country markets increased their results with Italy's results staying close to the previous The IFRS results after taxes for the Specialty Markets segment amounted to CHF 37,000,000, A significant increase compared to the first half of twenty twenty. The growth was driven in particular by strong capital market development, Which led to the pleasing investment results. The segment's technical result also increased compared to the same period of the previous year, thanks In the corporate segment, The IFRS result after tax of minus CHF51 1,000,000 was slightly below the IFRS Result after tax of minus CHF 40,000,000 in the first half of twenty twenty.
The decrease was primarily due to Higher financing costs resulting from the issuance of a hybrid bond in June 2020 to partly finance the Caser acquisition. Partially compensating effects resulted from an improvement in the technical result of group reinsurance, Which was impacted by COVID-nineteen claims in the previous year and non recurring costs related to the Casa acquisition of last year. Let's turn to Slide 7 with the growth in business volume. In the first Half of twenty twenty one, Hervega Group achieved a business volume of roughly CHF 7,000,000,000. This equates to a currency adjusted increase of 21% over the previous year.
Around 3 quarters organically by 5.2 percent in original currency. Overall, the group's non life business was a Please enlist strong growth driver. In addition to the positive influence of the acquisition, which accounted for around 2 thirds of The growth in non life, HealthAsia also recorded a successful organic development here. In Switzerland, Helvetia grew its business volume by 0.6% in original currency. The Non Life business volume increased by 13.5% in original currency.
This was driven in particular by Significant growth in the B2B2C business and that online endurer smile and supported by pleasing growth rates Also in the traditional non Life business, the Life business grew by 9.2% In the Individual Life business, driven by a strong performance of investment linked solutions. In the Group Life business, the business volume declined as expected following the strategic decision at the beginning of 2020 to strengthen future profitability. However, the business volume declined to a significantly lesser extent than in the same period of the previous year. Business volume of the Europe segment grew by 65.1% in original currency, driven by Castor. In the Non Life business of the Europe segment, Herveta was able to grow not only thanks to the acquisition of Castor, But also organically in all country markets.
Growth was above market level in most countries. In Life Insurance, a significant part of the growth also came from Castor, but organic growth with the insurance linked solutions should also be emphasized. The business volume of the Specialty Markets segment also developed positively, which is primarily due to the development of New business lines in line with the strategy and to a lesser extent due to favorable price effects. The fee business also developed positively. Group fee and commission income rose by 127.1 percent in original currency to CHF166,000,000.
The strong growth is because Castel contributed a fee volume of CHF 100,000,000 in the first half of twenty twenty one. Let's move on Slide 8 to the net combined ratio. With 94.5%, the net combined ratio improved by 1.4 percentage points compared In comparison with the first half of twenty twenty, the claims ratio improved By 2.1 percentage points, primarily as a result of nonrecurring COVID-nineteen losses In the previous year and the positive one off effect in Switzerland related to a periodic review of the level of reserves. These positive effects were partly offset by a substantial increase in the nat cat ratio because of an exceptional amount of claims from storms in June 2021, of which about 2 thirds affected Switzerland. Furthermore, HealthAsia recognized Normalization of claims frequencies in individual lines of business after a reduction in the prior year during the lockdown period.
The cost ratio increased by 0.7 percentage points. The main reasons are firstly higher costs in Switzerland, mainly due to the growing B2B2C business, which by its nature has a higher acquisition cost ratio and secondly, an increase in the position cost ratio related to Castor due to its strong bank distribution channel. On Slide 9, we will now have a closer look at the Life business. The IFRS result of the Life Business division increased significantly to CHF 122,000,000 compared to the same period of last year. After the capital market fluctuations in the wake of the COVID-nineteen pandemic affected the gains and losses on investment in the first half of twenty twenty, The Life business benefited from a good performance of the Capital Markets in the reporting period.
The acquisition of Castel also contributed To the increasing results, the acquisition had a particularly positive effect on the technical development. Thus, the margin after cost remains stable despite the absence of positive special effects in the risk result in the previous year. The significant increase in gains and losses from investments due to the good stock market development was partially offset By higher expenses for reserve strengthening and for policyholder participation. New business also developed favorably. The new business margin excluding Qatar rose to 3%.
Let's now have a look on Slide 10 On group level, the interest margin excluding cost increase compared to the first half of twenty twenty, Thanks to a higher margin in Switzerland. The increase of the interest margin in Switzerland was attributable to the following reasons. First, the yield slightly increased compared to the prior year period because of an extraordinary impact Resulting from the decrease of the Group Life portfolio following the introduction of a new tariff in the prior year. And second, at the same time, the average technical rate further declined due to additional reserve strengthening And the continued replacement of maturing insurance contracts with high guaranteed rates by modern capital light products. In Europe, excluding Carcept, the interest margin slightly decreased.
This was due to a strong decline of the yield compared to the average Technical rate. The reduction of the yield is related to the low interest rate environment. Simultaneously, Healthesa was able to further decrease the average technical rate in Europe by strengthening reserves and replacing old contracts With higher guarantees by new contracts with lower guarantees. Overall, our ongoing focus On modern capital light products supported by reserve strengthening is benefiting the group's interest margin. On the next slide, I will share some details on our investment results.
At CHF 461,000,000, The current income was pretty much stable at prior year's level, thanks to the additional income from the portfolio of the acquired company, Kasser. The direct yield, however, slightly decreased to a not annualized 0.8% as the acquired portfolio of Kassel has a lower yield Due to acquisition accounting effects, realized and book gains and losses amounted to CHF 411 1,000,000, A substantial increase compared to the first half of twenty twenty, predominantly due to the participation on the strong performance of equity markets in the first half of twenty twenty one, whereas the prior year had been impacted by the equity market crash following the pandemic. Unrealized gains and losses recorded in equity decreased by CHF725,000,000 due to a decline in the value of bonds following increasing interest rates. Group investment performance was at 0.3%. With regard to new and reinvestment of maturing funds, The direct yields slightly decreased.
The reason for this was a higher share of bonds on new and reinvestments compared to the prior year period. Relative to other asset classes, yields on bonds are lower. Nevertheless, they account for the largest share of investments. On that note, I will now hand over to Philippe Meurer again.
Thank you, Annalise. Now let me give some comments on our strategy Helvetia 2025. You might remember that back in March, we announced a couple of key figures We want to pursue within the next 5 years. In June, we were Giving you some more insights when we had our Capital Markets Day in Zurich. I would like to give some comments now on where we stand with our strategy, Helvetia 2025.
We were thinking please, I'm referring to Slide number 13. We were Thinking a lot about our reason why, about our purpose in our management team last year. Life is full of risks and opportunities, and we are there when it matters. And we then We're setting forth a new vision for our company. We want to be the best partner for financial security and set And in order to do so, we were setting forth Four different strategic priorities, such as customer convenience, Which means we want to be present whenever business, I.
E. Insurance needs might arise. We want to have the right offering for our clients, which means that we have to think From the client side, more outside in than inside out, we want, of course, to keep Our backbone, our insurance business in profitable shape by profitably growing Our core business, and we want to make use of new opportunities. Now where are we standing as of The end of June 2021. Referring to slide number 14, I would like to make a couple of comments.
First, talking about customer convenience. Mile, our leading online insurance platform in Switzerland is still growing very strongly. We have a growth rate of around 12%. And in the meantime, we have more than 160,000 customers. A second point I would like to mention is our recent acquisition of FairCheck in Austria, which is a Very small but fine company, which helps us in processing our claims And which helps to have more convenience in our claims processing.
FairCheck is not only offering its services for Helvetia, the new owner now, but also for other competitors. We want We want really to make sure that we are investing a reasonable amount of our new Projects and project costs in customer convenience. That's Key in order to keep our not only purpose and what we are promising To our clients, but also to make sure that we are keeping our backbone, our Non life and life insurance business in best shape. 2nd, the right offering. We came to the conclusion that it's not enough going forward only to offer, let's say, the core product Premiums against claim settling, so to say, but we have to offer A whole variety of additional services around our core products.
That's why we were launching New Ecosystem Atlanta back in June 2021, Providing new comprehensive services for our SME clients, helping them to lower their work with The whole administration, for instance, they have to cope with. We have a cooperation with New institute for young entrepreneurs. And together with them, we want to launch This Atlanta ecosystem within the next 1 or 2 years. In Germany, we were launching a new motor product around Electro Mobile, in the meantime, we have some 300 contracts and we really successfully Launched this new kind of motor insurance policy. The third point, The profitable growth.
We were successful in expanding our banking corporations in Italy with new means, Which means digital channels. Together with Citibank and the platform YOLO, We now can serve our clients not only on a personal basis, but more and more also on a And of course, our growth initiatives in the Actae Free Insurance portfolio are Well underway, we launched 5 different growth initiatives some 3 years ago and all of them are Coming forward at a very pleasing level. We also want to make use of new opportunities. Let me give you 2 or 3 examples. We were successfully expanding our health and care ecosystem in Spain with the acquisition of a new clinic by our Grupo of the Dallas Barque.
We, 2nd, successfully growed our B2B2C business in Switzerland. We have recently announced a cooperation with Polestar. If you are The Polestar website and if you want to make the configuration of Your new car with Polestar, then by default, you come to the Helvetia insurance coverage, I. E, we make really use of new means also in the motor business and of new opportunities. And then of course, our Helvetia venture funds.
Maybe you remember that we were reserving like €50,000,000 for our Helvetia venture fund. In the meantime, we were investing between €35,000,000 €40,000,000
And the
recent acquisitions the funds made is, for instance, Faren, which is like the Car Revolution solution, so to say, in Switzerland, a motor A system which helps you rent your cars And Coinscrapp Finance, which is a microfinance tool in Spain. Let me summarize, ladies and gentlemen. Helvetia was really successful within the 1st 6 months of this in successfully growing the core business, in Expanding the fee business in a good investment performance, And we are very happy to report that we have a very successful and dynamic start Into our new strategy period 2025. And with that, I would now like to Hand over to Susan for the questions. Annalise and I, we are ready to answer
We will now begin the question and answer The first question comes from Thomas Bateman from Berenberg. Please go ahead.
Hi, good morning. Thanks for taking my question and congratulations on the good results. Three questions for me, if possible. Can you give any more Details or indication of the level of claims you expect to incur for the floods in July. Question number 2 is just on the guidance for the Non Life division for the combined ratio of minus 2.4% this year.
Obviously, running a little bit higher than that for the first half. I guess, can you just give me some color on what your thoughts would be where So we'd likely end the year. And finally, really lovely growth across all your veins. But This is from specifically Swiss Sound Life. How's it staying where is that sort of 13% And what should we expect going forward?
And any color on sort of where that's really coming from would be very helpful. Thank you.
Thank you, Thomas. Frankly, it was pretty tough to understand you. I don't know whether the line, The telephone line is in good shape. As I understand Standish, for the 3rd question deals with the July slots.
Yes, that's correct.
I
will then ask Annalise to answer this question. The second question deals with The combined ratio guidance for the year, I will ask Anelis to answer this question as well. And the third question, could you please remember it? We couldn't understand you, sorry.
Apologies. I hope this is a little bit better. Basically, I'm just asking you about the sustainability of the growth in Switzerland and how much do you expect to grow in Switzerland going forward in the Novo Nordisk division?
Okay. So, Annalise, please go forward with answering The 2 first questions and I'll then take the 3rd one.
Yes, of course. So the first question about the July floods. Maybe to put that in context, the June Nat Cat events This cost us around CHF 70,000,000 on a net basis. And the July slots, we expect them in the middle two digit €1,000,000 On a net basis, so I hope you could understand me. And On the combined ratio, so we have communicated in the strategy a combined ratio range Of 92% to 94% on group level.
Of course, this is still our goal. We have to be, let's say, a bit careful in this year, 2021, as we have In the last 10 to 50 years, depending a bit on the country, but we still hold our Goal to reach 92% to 94%.
Thank you, Annalise. Then I would like to answer the 3rd question Regarding our growth in Non Life in Switzerland. Of course, we are Very happy with the development within the 1st 6 months, which stands at the growth rate of more than 13%. Now, it is widely spread. It's property, it's motor, it's liability, it's accident health, it's transport and the art.
And We do not give any guidance with respect to the growth rate we really are looking for. But of course, we want a dynamic growth. What is hard to predict is Whether the online channels are growing as dynamically as they used to within the last few years, We hope so, of course. There are there is a certain development Into the direction of the online growth rates, however, the market in Switzerland is pretty much consolidated. So There are there is not so much fantasy in the growth rates.
But of course, our ambition is to grow at least above the market, And we want to pursue a dynamic growth also in the future. And we think that given our different sales channels we have, the agents, the brokers, The B2B2C and many access points, we are well prepared to realize pleasing growth rates also in the future.
So far, there are no
more questions. We have now A last minute registration for Mr. Rene Laucher from Stifel. Please go ahead.
Yes. Thank you very much and Good morning, all. I have a couple of questions, if I may. So, yes, the first one, Again, on this non live market, I mean, it's when we are looking at the motor business, Like here in Switzerland, we have seen last year new registration, minus 18%. And then Philippe, you just mentioned one of your start up, their thought and our core evolution here in Switzerland.
So I'm really struggling to understand how you can still grow your motor business. First of all, it's competitive, lower It's much more about sharing. And nevertheless, insurance companies are still Able to grow, yes, the business volume here. And then Let me see. Yes, on the investment income on Slide 11, I mean, just For my understanding, I would have thought that The current income yield of 0.8%, I was expecting a little bit higher Yield here because I thought to myself, you are adding now with Taser quite a decent portfolio Of BBB rated bonds, which should have higher yield, but it's not reflected in the current Current income, so well, I guess it's my fault, but just if you can shed some more light on this development.
Then is it the net income of EUR262,000,000 I guess you have Quite a few one offs in there, right? You had a strong investment result. Then you had this one off In Non life Business Switzerland, so I was just wondering a little bit what is sustainable Run rate going forward. And then in addition to that, if I split The EUR 2.62 in Qatar and the old Helfades, yes, I mean, Kaffir is performing very well, but the EUR 230,000,000 Oostar, Oostar, Oostar, this is a little bit below my expectations. So I stop here and perhaps a few follow-up questions afterwards.
Thank you.
Thank you, Rene. So To summarize your questions, I hope we properly understood them. The first one deals with the motor business in Switzerland and where the growth comes from. The second is dealing with The comments you would like to have on our current income. And the third one is The question about the sustainability of our net profit, right?
So I would I just start with answering the first question and then hand over to Annalise. Now what where does The growth comes from we have like 1 third of the growth related to New cars being newly
Registered.
Registered in Switzerland. And 2 thirds is Just due to the fact that you had another insurance policy with a competitor and now They came over to Helvetia. So it's like onethree to twothree. Now talking about the future and about Car sharing and other platforms. It's hard to predict what the impact It's on our motor business, of course.
For Helvetia, it's important to be present Where this business might happen in the future, that's why, for instance, we are investing in far and that's why we are You know, cooperating with Polestar, that's why we are investing in B2B2C platforms. That's why we are Making sure that our agents are close to the clients and so on. So it's hard to predict how the future looks like. We want to make sure that we are being part of the future, Notwithstanding what it looks like. The second question and the third one now, please, Annalise.
Yes. So the second one on our investment income of 0.8%. Just one remark here. This is not annualized. This is on the half year basis.
What is important to know this here is the acquisition effect. We are now being affected by because cost is included in these numbers. And when acquiring a company, assets as well as liabilities are accounted for At the market rates at the time of acquisition, what does this mean? This means that The June 2020 rates of, let's say, Spanish government bonds, Which are dominating the caustic portfolio were of great importance To the effect we then have on the investment income. And As you probably know, the Spanish government bond rates were around 0.4% in June 2020.
So this is, yes, the height of the Investment income is strongly influenced by acquisition accounting effects. Now on your
Can I quickly, because I remember when you did the HealthFaircia acquisition, it took about 2 to 3 years until this acquisition effect vanished? Will this also be the case with the Cashier acquisition. This is just 1 year and then you're done.
No. No, it's as you would buy. It is as we have bought a complete portfolio of assets to the rates, Which were market rates in June 2020. So then you have the normal runoff of this portfolio until the bonds All right. Maturity and then reinvested and so on.
So it's really as if the whole portfolio was valued at mark Market, the whole portfolio of car sales was valued at mark to market in June 2020.
Okay. Thank you.
And regarding your third Question on the sustainability of the result. So yes, 32,000,000 Where are the effects from the cost of contribution and The focus, of course, on the whole portfolio of Alvestia is on profitability Now and also in the future, of course, and as you know, also on cost efficiency regarding The cost base, mainly in Switzerland, but also in our European countries. Regarding the results, we make no further guidance than that.
That's fine. That's fine. Just a follow-up question, if I may quickly. In previous years, You have always provided the slide with other activities, which amounted to a minus 55,000,000 Just here, is this kind of a normal run rate? Or is it too high, too low?
So that will be one question and then the last one. Always interested in the dividend. And if you go to Slide 36, I was surprised to see that the remittance ratio in 2020 is at 113%. Let me just throw my arm. I'm struggling a little bit to understand how can the remittance rate should be
Okay. Rene, I'm not sure whether I properly understood your questions because you are referring to slides And numbers, which might not be the same as I have in front of me. So One is dealing with our net dividend capacity, right?
Yes. Now on Slide 36, so that's in the large Desk you have provided, there you can see the remittance ratio is at 113% In 2020, where I'm struggling a bit to understand how can it be above 100%. So that's the first one. And the second one It's a round rate for other activities. But I mean more than happy to discuss that afterwards with the IR department.
Let me start with Some words to the corporate results of the minus €51,000,000 €51,000,000 There, a lot of different effects are in there. So these are financing costs of our Hybrid instruments, so they are pretty stable, let's say. They were Not stable compared to last year because we issued a new hybrid bond, which partly financed the acquisition of Castel. Then we have also in there nonrecurring costs related to the acquisition of Castor. They were in there in the prior year, not in there.
Now group reinsurance flows in there and also quite A lot of volatility out of FX effects, which we have on group level, But which are partly offset then in the segment results. So It's difficult to say how it will develop as it's a collection of different effects, but It depends strongly on the assets developments and, of course, on the claims we have on group reinsurance. Other aspects of this composition are more stable.
Thank you. The second question, Annalise, is on slide number 36, IE 42. Yes. Rene would have would like to have some comments on our cash Production and the remittance ratio, I. E, If I understand you correctly, the impact on our dividend capacity.
Yes. So let's if we imagine what full year 2020 has been, it has been An exceptional year also for Helvetica in the sense that the first half of twenty twenty Was negative in net profit, slightly negative. And then for the rest of 2020, we could catch up. Nevertheless, we left the dividend payment stable according to our strategy, Which, of course, then can lead to the maintenance ratios higher than 100% for this exceptional year.
Okay. That's fine. Thank you very much.
Now To sum this up, Rene, as you well know, we have a strong balance sheet. We have a very strong Core business, which of course, as you commented, had to cope with the NatCap During the first half of the year, which we could pretty well cope with, And our dividend capacity is still intact. We promised an increase of the dividend payouts within the for the next strategy period. And we still stick, of course, to this promise.
Yes. That's very helpful. Thank you.
The next question comes from Jimmy Fan from UBS. Please go ahead.
Hi, it's Jimmy Fan from UBS. Thank you for taking my questions. I have 2, please. My first question is about reserves movements in Non Life, you mentioned on Slide 8.1, there is a positive wealth reserves impact in Switzerland. Could you Give a bit more color on that, please.
And my second question is about catastrophic reinsurance. Given that your reinsurance form has kicked in already for the June and also the July August events, Could you give a bit more details on your position in terms of your aggregate cover? And also, Do you have to pay more reinstatement later on if How the events happen? Thank you.
Okay. Thanks. If I understood it Properly, the first question deals with the reserves and the reserve releases In Switzerland, during the first half of the year, Annalise, if you might comment on that, please?
Yes, sure. So in Switzerland, we had a positive one off effect From reserve releases, they stem from a periodic review we do on the level of reserves And led to this positive one off effect.
Then the second question is about The recoveries and the effect of the nat caps in the first half of the year. I mean, we are monitoring the cat risks on the group level. And if you ask how we do model them, we for Nat Cat, we have Used for quite some time, cat vendor models to access the exposure on gross basis And to buy then the required insurance and reinsurance capacity. And In addition, larger risk exposures are partly reinsured via facultative reinsurance contracts. And we are targeting a net retention for Of roughly €35,000,000 per event.
You see this information in the financial reports, I think which we are publishing by the end of the year.
And just a follow-up on my first question about the reserves release. Could you give a bit more details in terms of which lines of business is it coming from?
No, I'm sorry. We do not give additional information on the exact The lines of business which are affected.
Last year, we reported a reserve strengthening in the country market Switzerland related To health and accident because of the interest rate development. And of course, the release We now are reporting is not related to this Reserve strengthening, which is still last year. It's in due course of a regular review of our Reserve reserving levels, we are releasing or strengthening in 1 or the other business line According to our estimates.
Thank you.
We have a follow-up question from Mr. Thomas Bateman from Berenberg. Please go ahead.
Thank you for taking my follow-up. I hope you can hear me better this time. I just wonder if you could give any more color on the contribution of Catheter I think it is a reasonable result, but I think you mentioned in the past an annual run rate of around €70,000,000 or so. So maybe we're a little bit behind that. Is that in line with your expectations for $32,000,000 or should we expect a bit of a pickup in the second half of twenty twenty one?
And just the second question is on the new 2025 future plan. When can we expect to Get disclosure on the percentage of fee income in relation to IFRS profits And on the expense savings measures. Thank you.
The line is I don't know. It does not Really allow us to properly understand your questions. We think that we could understand the first question. Annalise, I ask you to answer it. And then please, after Annalise's comments, please come up again with Second question.
Annalise?
Yes. So I understood the first question regarding the profit contribution from Sir, where we estimated in the full year disclosure, a profit contribution of around €70,000,000 And now what we show is €32,000,000 We expect that to be completely in line with
the €70,000,000 Why is that?
There are some seasonality effects, €1,000,000,000, why start there are some seasonality effects, of course, in the half year results on the first Firstly. And secondly, also, if you imagine the life In the first half year in Spain, then the first two to three months were still much affected by lockdown effects. This also means or by restrictions, of course, due to the corona restrictions. And this affected the non insurance business of Castel, which now from month to month is taking up Speed, like it would in a non restricted world. So we They think that the cost contribution is very strong and stable and according to our expectations.
Thank you.
As we said, I think we did not understand it. At least I didn't. I'm sorry. Could you repeat?
Can I try? It's your new strategic plan, how about year 2025, you have targets for Percentage of IFRS profit, I mean, the fee income and the expense saving measures. And I'm just wondering when we can we expect to see disclosure On those particular financial targets.
Yes. So our cost target of Reducing our cost by €100,000,000 we will, for the first time, Show a tracking on that in the full year 'twenty one figures. And we will also then show The second aspect of the fee so the second aspect of the fee goals are not only the fee volume, but The profit out of fees, we will show in full year 'twenty one.
Okay. Thank you very much.
Okay. If there are no more questions, I would like to thank you very much for your attention In Helvetia, and once again, we are Very pleased about our results on the first half of the year. We could successfully expand our business, Be it the core business, be it the fee business, we have a very good investment performance within the first Half of the year and we are sure that we are well on track In order to fulfill our financial targets, we were setting forth for the strategy period 2025, and thus we are positive as of today with regard to the second half of the year. If you have any questions, please do not hesitate to contact us by either telephone or mail Whatsoever, I wish you a good week and stay healthy. Bye bye.
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