Switzerland Welcomes a New Major Insurance Group

In a significant development for the Swiss insurance sector, Helvetia and Baloise have announced their merger, creating the second-largest insurance group in Switzerland. This move follows the country's history of major mergers, reminiscent of the union between UBS and Credit Suisse.

The newly formed entity, named Helvetia Baloise Holding AG, will command a market share of approximately 20 percent and an impressive business volume of 20 billion Swiss francs (around 21.5 billion euros). This merger not only positions the new company as a major player in the industry but also establishes it as the largest employer within the Swiss insurance landscape, as reported by both companies.

Despite this substantial merger, Zurich Insurance Group remains the largest insurance provider in Switzerland, boasting premium volumes nearing 60 billion euros. In comparison, the largest European insurance companies, such as AXA (France), Allianz (Germany), and Generali (Italy), report premium volumes ranging from 85 to 106 billion euros.

Thomas von Planta, currently the chairman of Baloise, will assume the same role in the new company, while Fabian Rupprecht, the CEO of Helvetia, will lead the merged organization.

The merger is structured such that Baloise will be absorbed into Helvetia, with a share exchange ratio of 1.0119 Helvetia shares for each Baloise share. Presently, Helvetia's market capitalization is about 8.5 billion euros, while Baloise's stands at approximately 7.5 billion euros. Speculation regarding this merger had been rife for weeks, particularly following the entry of Swedish financial investor Cevian Capital into Baloise in 2024, which raised questions about Baloise's strategic direction and prompted discussions about exiting the German market.

The news of the merger was positively received on the stock market, leading to a 4.5 percent increase in Helvetia shares and a 3.5 percent rise in Baloise shares. The merger aims to realize economic synergies, with the new company expected to employ around 22,000 staff members. Both companies anticipate annual pre-tax savings of approximately 350 million Swiss francs, in addition to existing efficiency programs. However, the integration process is projected to incur costs between 500 and 600 million Swiss francs, mainly until 2028, which may involve job reductions, although specific figures have yet to be disclosed.

The headquarters of the new group will be located in Basel, while the current Helvetia office in St. Gallen will continue to serve as a significant operational site. The extraordinary general meetings for shareholders from both companies to approve the merger are scheduled for May 23. The largest shareholder of Helvetia, the Patria Cooperative, has already expressed support for the merger. The completion of the merger is anticipated in the fourth quarter of 2025.

Both Helvetia and Baloise have rich histories; Helvetia was established in 1858 in St. Gallen and expanded into Germany by 1862. The company also acquired the historic Austrian insurer 'Der Anker.' Baloise traces its roots back to the Basler Versicherungs-Gesellschaft, founded in 1863, and has operated in four countries under Baloise Holding AG. At the peak of its geographical expansion around 1938, it was present in 51 countries worldwide.

Analyst Georg Marti from ZKB commented on the merger, stating that while it aligns with recent market speculations, the newly formed group is set to become a formidable competitor, benefitting shareholders with improved financial metrics.