New Turmoil for Baloise Leadership
Since Cevian Capital became a major shareholder of Baloise, pressure on the company has intensified. The question remains: Will the new strategy be sufficient to turn the tide, or will more drastic measures, such as divesting its banking and German businesses, be necessary? One thing is certain—unsettled times lie ahead for Baloise.
The Basel-based insurance company is facing significant upheaval. The Swedish financial investor Cevian Capital has increased its stake in Baloise to 9.4% and is expected to secure a seat on the board of directors soon.
It’s clear that this investment comes with high expectations. «Cevian has a reputation for taking a very rigorous approach to pursuing its interests,» said Daniel Bosshard, Deputy Head of Financial Analysis at LUKB.
Falling Behind Competitors
In response, the insurer has set ambitious targets. Its new «refocusing strategy» emphasizes operational efficiency and cost savings, including planned workforce reductions. Furthermore, Baloise has sold Friday, its digital insurance arm.
The critical question is whether these measures will be enough. Over recent years, Baloise has struggled compared to its peers. Unlike Swiss Life, Zurich, and AXA, its stock price has not experienced comparable growth.
New Strategy Falls Short
Cevian previously described the strategy overhaul as a «last chance.» Is the influential investor satisfied with the changes?
«For Cevian, the new strategy is inadequate,» stated Bosshard bluntly. He anticipates significant shareholder proposals for the leadership at the upcoming annual general meeting this spring.
Bosshard sees potential benefits from Cevian’s assertive approach. «It’s bringing energy to a company that, while solid, has been flying under the radar without a compelling growth story.»
Capital Inefficiencies in Banking
Injecting energy could involve divesting less efficient operations, such as Baloise Bank, which primarily handles the increasingly unprofitable mortgage business.
«The competitive pressure is immense, and the bank ties up significant capital due to regulatory requirements—capital that Baloise could deploy more profitably elsewhere,» explained Bosshard. He suggests the bank might shift its focus to commission and fee income or asset management, areas with growth potential. «It’s clear that the current setup isn’t performing well. The question is whether Baloise should retain the bank at all.»
German Business in Question
Another concern is Baloise’s German operations, where it ranks only 29th in the market. «That places it in the ‘also-ran’ category within a highly competitive, low-margin environment. As it stands, this segment isn’t adding value. I could see it being sold,» said Bosshard.
He remains curious about the future of this longstanding company. «Perhaps it could become an exciting turnaround story.» He predicts that 2025 will be a transition year, with refinements to the strategy and potentially more concrete ideas or initiatives emerging during the year.
Cevian Capital declined to comment. Baloise remains cautious about the speculation, stating that at its investor update last fall, it emphasized that both the German operations and the banking business are integral parts of its new strategy.
