Activist investor Cevian Capital has raised its shareholding in Switzerland-based insurance company Baloise, reported the Financial Times.
As the largest investor in Baloise, Cevian now holds around 9.4% of the company, boosting its ability to drive changes at the Swiss insurer.
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Earlier this year, Cevian’s stake in Baloise was 3.12%, which jumped to 5.11% by June.
With a market valuation of approximately $9bn, Baloise offers life and general insurance solutions, as well as banking and other services.
The company is said to be among the top ten insurers in Switzerland, a market that contributes around half of its revenue.
Additionally, Baloise operates in several other European countries, including a minor division in Germany that accounted for 15% of its revenue last year.
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By GlobalDataCevian partner Robert Schuchna, as reported by Reuters, said: “Baloise has the opportunity to become a top-performing Swiss insurer. We believe there is significant value potential in the company.”
Baloise stated that it would not discuss its relationships with specific shareholders but expressed anticipation for 12 September, when the company plans to outline its strategic direction during the investor update.
People familiar with Cevian’s approach told FT that the investment company is urging Baloise’s management to concentrate on countries where the company has a strong presence and high market share.
Cevian also advocates for allocating a greater portion of the company’s cash flow towards shareholder returns and investment in its home market.
It views this week’s capital markets day as a final opportunity to revise the strategy.
If no changes are made, the activist believes that governance improvements will be necessary, such as enhancing the board with additional insurance expertise, they added.
In recent years, Baloise has faced challenges compared to its peers.
While the share prices of larger competitors such as Swiss Life, Zurich, and AXA have increased, Baloise’s valuation has declined over the past five years.
Additionally, its return on equity was 7% in both 2023 and 2024, falling short of its peers.
Earlier this year, Baloise introduced three parametric insurance policies aimed at offering automatic compensation for travel-related issues.
