Nationale Suisse records an increase in profits for the first half of 2012 with sustained premium growth and a constantly high solvency 1 ratio

5 september 2012 Nationale Suisse / Nationale Suisse records an increase in profits for the first half of 2012 with sustained premium growth and a constantly high solvency 1 ratio . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement. Nationale Suisse achieved a pleasing increase in profits during the first half of 2012. The insurance group defied the still highly challenging environment to record sustained, purely organic premium growth. This was largely driven by the Non-life Switzerland segment. At the same time, Nationale Suisse also boasts an excellent combined ratio for its non-life business, and also improved its already high solvency 1 ratio once more. Nationale Suisse remains cautiously optimistic about the 2012 financial year. Key figures from the 2012 semi-annual result at a glance: * Increase in consolidated profit of 7.4 % to CHF 56.8 million * Sustained, purely organic growth in gross premiums of 3.4 % at constant exchange rates * Handsome premium growth for Specialty Lines of 14.6 % (not including the Credit Life business, which is dependent on the state of the economy) * Excellent combined ratio of 91.5 % (94.7 % for the first half of 2011) * Increase in equity of 2.7 % to CHF 816.7 million compared with the end of 2011 * High annualised return on equity of 14.2 % (15.9 % for the first half of 2011) * Solvency 1 ratio on a constantly very solid level of 249.4 % (234.4 % as of the end of 2011) All figures have been adjusted to reflect the one-off effects of applying the revised IFRS standard IAS 19 earlier than required. Increased profits and constantly high solvency 1 ratio During the first half of 2012, Nationale Suisse made a profit of CHF 56.8 million, an increase of 7.4 % on the previous year. "We achieved this increase despite the economic environment, which continues to prove extremely challenging", confirmed CEO Hans Künzle. "We felt the effects of the European debt crisis in foreign markets in particular, but this did not stop us recording a sustained and purely organic growth in gross premiums at Group level." At constant exchange rates, premiums increased by 3.4 % to CHF 909.9 million (previous year: CHF 894.3 million). Equity increased by 2.7 % to CHF 816.7 million as of 30 June 2012 compared with the end of 2011. The solvency 1 ratio thereby reached a consistently very solid level of 249.4 %, despite the impact of the revised standard IAS 19, which was applied earlier than required. Early application of IAS 19 revised and adjustments to the rules relating to the pension fund The semi-annual results for 2012 were influenced by two particular factors. First, the revised IFRS standard IAS 19 has already been implemented for the 2012 financial year. The adjustments to the previous periods thereby resulted in a CHF 119.5 million decrease in consolidated equity to CHF 795.0 million, as of 31 December 2011. In addition, adjustments to the previous period led to higher pension costs, which reduced half-year profits for 2011 by CHF 1.0 million to CHF 53.0 million. Secondly, the rules relating to the pension fund of Nationale Suisse in Switzerland were changed, which meant a one-off increase of CHF 6.8 million (after taxes) in half-yearly profits for 2012. Without this one-off effect, profits for continuing operations increased by 6.8 % to CHF 50.0 million. Strong non-life premium growth driven by the Non-life Switzerland segment At constant exchange rates, the strong 6.7 % growth in gross non-life premiums across the Group as a whole during the first half of 2012 can be explained by the impressive 9.4 % increase in business underwritten by Swiss non-life units. If we do not take into account the Credit Life business, which depends on the state of the economy, the Specialty Lines made a decisive contribution to growth across the Group, recording handsome double-digit growth of 14.6 % (+4.1 % if Credit Life is included). In the semi-annual results for 2012 the HNWI (High Net Worth Individuals) business was reclassified from the HNWI/Art Specialty Line to the target group business, which affected the contribution made by Specialty Lines premiums to the overall volume accordingly. This contribution increased from 30.6 % (adjusted in terms of HNWI) to the current level of 30.8 %. Excellent combined ratio for non-life business During the first half of 2012 Nationale Suisse was able to reduce the combined ratio within the non-life business to an excellent 91.5 % (previous year: 94.7 %) thanks to a persistently low claims burden and significantly lower costs. The claims ratio for the Group fell by 0.6 percentage points to 60.0 %, which can be partly explained by last year's portfolio restructuring in Belgium. It even proved possible to reduce the cost ratio by 2.6 percentage points to 31.5 %. This is mainly attributable to the positive one-off effects of the changes to the rules relating to the Nationale Suisse pension fund in Switzerland, as well as the impact of measures for improving the efficiency of customer service and sales within the Swiss business. Product-related realignment within the life business as a result of historically low interest rates The deliberately selective policy of underwriting conventional single-premium business with guaranteed interest rates and the reduction in Credit Life business dictated by its dependence on prevailing economic conditions saw life premiums decrease by 14.5 % to CHF 118.6 million during the first half of 2012 at constant exchange rates. National Suisse will be looking to realign the life business given the historically low interest rates. Central to this new approach are attractive, less capital-intensive products - particularly where target groups are concerned. With this realignment, Nationale Suisse intends to return to profitable growth within the life segment. Strong investment result not affected by one-off effects - record-low interest rates leave their mark In spite of the debt and financial crisis in the eurozone, a process of continuously aligning the portfolio around investments with good credit quality has delivered strong investment results when one-off effects are discounted. At CHF 83.2 million, net investment income was 10.9 % lower than in the first half of 2011. The annualised return on investment was 3.4 % during the reporting period (previous year: 3.6 %). This figure is clearly influenced by record-low interest rates. The proportion of fixed-income investments was reduced by 1.4 percentage points to 69.0 % during the first half of 2012. As part of the process of shifting investments from the financial sector to other private borrowers, the above- average quality of the bond portfolio and a high level of marketability were maintained. The exposure to the GIIPS countries, already significantly reduced, was decreased even further. This largely consists of Italian sovereign debt held in the investment portfolio of the Italian life business. The policy of accumulating quality securities with high dividend returns saw the share component rise from 3.1 % to 4.9 % (4.2 % after hedging). Outlook: positive from an actuarial perspective, with low interest rates complicating investments The uncertainty generated by how the periphery of the eurozone is developing will probably continue to have a negative impact on the economic environment, with insurance markets remaining under pressure. This will keep actuarial considerations, particularly risk selection, focusing on target groups and pricing as well as an awareness of costs at the top of the agenda. The severe weather conditions at the start of July 2012 resulted in gross losses of around CHF 8 million for Nationale Suisse in Switzerland. CEO Hans Künzle made the following comments: "We are feeling positive, however, about actuarial business for the 2012 financial year as a whole. The investment climate remains tough, with record-low interest rates continuing to eat away at returns on investments. Despite these challenging conditions, we are cautiously optimistic about the 2012 financial year." The interim report for the first half of 2012 is available at: www.nationalesuisse.com/semi-annual-report Brief profile Nationale Suisse is an innovative, international and independent Swiss insurance group providing first-rate risk and pension solutions in non-life and life business as well as a growing number of tailored specialty lines products. Consolidated gross premiums came to CHF 1.5 billion in 2011. The Group comprises the parent company and about 20 subsidiaries and branch offices for focused product lines in Switzerland, Italy, Spain, Germany, Belgium, Liechtenstein, Malaysia, Latin America and Turkey. The headquarters of Swiss National Insurance Company Ltd are in Basel. Nationale Suisse is listed on the SIX Swiss Exchange (NATN). As of 30 June 2012, the Group employed 1 877 staff (full-time equivalents). Information Remo Meier Nationale Suisse Investor Relations Steinengraben 41 Phone +41 61 275 22 45 4003 Basel Fax     +41 61 275 22 21 Switzerland remo.meier@nationalesuisse.com www.nationalesuisse.com/investor- relations Christina Hartmann Nationale Suisse Media Relations Steinengraben 41 Phone +41 61 275 23 40 4003 Basel Fax     +41 61 275 22 21   Switzerland christina.hartmann@nationalesuisse.com  www.nationalesuisse.com/media- relations Key dates Publication of Annual Report 2012 27.03.2013 Media conference to announce financial results at Widder Hotel, Zurich       27.03.2013 Financial analysts' conference at Widder 27.03.2013 Hotel, Zurich 06.05.2013 Annual General Meeting, Basel Disclaimer and exclusion of liability The purpose of this press release is to inform the public about certain events or developments arising from the company's business.  The information published in this article is not an advertisement, offer or recommendation to engage in transactions involving securities or other products of Nationale Suisse or any other type of transaction. This press release may contain certain forward- looking statements.  Even if these forward-looking statements reflect the opinion and expectations of Nationale Suisse, a number of risks, uncertainties and other important factors may lead to actual developments and results differing strongly from the expectations of Nationale Suisse. It is pointed out expressly that the statements and projections contained in this press release are selective in nature. Nationale Suisse provides no guarantee, either explicitly or implicitly, regarding the accuracy and completeness of the statements and forecasts published in this press release.  Neither Nationale Suisse nor its executive bodies or senior managers accept any liability for any damage or losses arising directly or indirectly from the use of this press release.  Unless otherwise provided by applicable binding law Nationale Suisse is under no obligation to update or amend the statements contained in this press release, be it in response to new information, future events or any other reasons. Updated post-publication information is available on our website www.nationalesuisse.com. You may find further details and forecasts about the business of Nationale Suisse there. 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