Customers Simple, cross-channel access and services Personal, reliable and competent partner Strong capitalisation
T riads are at the heart of Helvetia’s new brand image. In terms of content, focus is placed on the brand promise “simple. clear. helvetia”.
How has the partnership developed and what are you particularly proud of? In 2005, following the crisis after the failure to win any medals at the World Ski Championships in Bormio, Helvetia had the courage and the confidence to commit to Swiss-Ski as a sponsor. This has paid off for both sides! Today, (almost) everyone in snow sport knows Helvetia – and this is true far beyond Switzerland’s borders. And our athletes repay this commitment with great results and numerous medals. It is thus a real win-win situation.
In addition to these new working forms, we also provide our employees with codes of conduct for interacting with customers. These show how we actually implement our brand promise in performing our daily work and how we can measure and manage the provision of a good service at the customer interface.
Thanks to the new freedom of service product, SMEs with an international value chain can hedge both Swiss and European risks with a single policy. Helvetia thus closes the product gap between national solutions and complex international programmes comprising several policies.
Draws up analyses and expert opinions, IAS 19 calculations. Assumes the technical administration of pension funds. Comprehensive consultation and services for occupational pension fund foundations.
In the current low-interest rate environment, there is also a great need for better return opportunities in the area of pension products. Effective immediately, Helvetia is therefore making available its own investment expertise with its own funds. Customers gain access to investment products that until now had only been available to institutional investors, allowing them to benefit from Helvetia’s 160 years of experience.
Total CH Total * includes loss in Corporate of CHF 42 million
How exactly do your customers benefit? Regular, guaranteed payments offer our customers planning security when financing an early retirement or serve as add- itional income after their gainful employment. Thanks to a selection of diversified investment strategies, there is also the opportunity to participate in market developments and thus to further increase the guaranteed payments. Our customers ultimately benefit from professional investment management and an alternative to a classic retirement pension that is attractive from a tax perspective, as the income taxation is far more favourable than is the case with pension taxation.
 around 43,000 customers  leading position in Switzerland, support of global expansion of our Swiss customers, international presence, several foreign branches
More product information helvetia 20.20 Strengthening of core business 38Helvetia company brochure 2018
Helvetia joined the United Nations Global Compact at the start of 2018. Our decisions in the area of investment management, the insurance business and with respect to our procurement activities are thus based even more systematically on environmental, social and governance criteria. We have also improved the credibility and transparency of our reporting. Helvetia has become carbon neutral. We have also grown closer together with our environment as a company, employer and location partner.
With this commitment, Helvetia is contributing to ensuring the preservation and availability of artwork. As an art insurer, Helvetia has also set itself the objective of preserving works for future generations. These digitalisation projects are linked to restoration and
Helvetia is supporting four Swiss museums in digitising selected works. In doing so, it is ensuring that the artworks are preserved in digital form, while this presentation form is also opening up new presentation formats.
Cautionary note regarding forward-looking information This document was produced by Helvetia Group and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Group. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Helvetia Group. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Helvetia Group as being accurate. Neither Helvetia Group nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up-to-date as is reasonably possible and may be subject to revision in the future. Neither Helvetia Group nor any of its directors, officers, employees or advisors nor any other person make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document.
2 Based on the earnings per share (including interest on preferred securities through profit and loss) divided by the average shareholder capital (equity before preferred securities).
Dividend payment: CHF 23.00 per share 1 Based on IFRS / previous years based on underlying earnings 2 Proposal to the Shareholders‘ Meeting
1.3 Cross-holdings There are no cross-holdings that exceed 5 % of the capital or voting rights.
The members of the Board of Directors of Helvetia Holding AG are identical to the Boards of Directors of the two subsidiaries, Helvetia Schweizerische Versicherungsgesellschaft AG and Helvetia Schweizerische Lebensversicherungsgesellschaft AG. All the members of the Board of Directors have experience and knowledge of a wide variety of fields. They have the requisite expertise to represent their personal opinion in discussions with the Executive Management. Since the Helvetia Group conducts a significant proportion of its business abroad, the Board of Directors also includes members who have extensive international experience. Members of the Board of Directors should possess strong personal values (including integrity), specialised financial, business and insurance knowledge, experience in strategic
The Board of Directors of Helvetia Holding AG As at: 31.12.2018
Appointments at listed companies Member of the Board of Directors of St. Galler Kantonalbank, St. Gallen
Professional background, exercising operational executive functions Since 1983 law firm Lenz & Staehelin, Geneva; partner from 1988 – 2017; senior counsel since 2018
Professional background 2001 – 2003 Strategic Assistant to the CEO of Continental Europe at Zurich Financial Services; 2003 – 2009 Various management functions at Zurich Global Corporate Spain, Barcelona; 2010 – 2017 Member of the Executive Management in various roles (2010 – 2012 Head Commercial Business & Brokers, 2012 – 2016 Head Agents & Personal Lines Distribution, 2016 – 2017 Head Commercial Customers) Zurich Switzerland; Member of the Executive Management in his current role since 1 April 2017
5. Compensation, shares and loans 5.1 Contents and method for determining compensation and participation programmes According to the VegüV, the Board of Directors is also in charge of general compensation issues and compensation models. It is supported in its work by the NCC, which provides advice to the Board of Directors at least once a year in the decision -making process in accordance with the internal organisational regulations and has final decision -making power in some areas. The fixed compensation of the members of the Executive Management is determined individually using a system applied by Kienbaum AG, a consulting firm specialising in compensation issues for insurers and financial services providers, and takes account of the function and responsibility assumed by each Executive Management member as well as the compensation paid by the Group’s competitors. Kienbaum AG was not entrusted with any further mandates by Helvetia. Members of the Executive Management do not participate in meetings of the Board of Directors in which discussions are held on issues relating to compensation and corresponding decisions are made.
The first section of the compensation report of the Helvetia Group sets out the general principles, main components and criteria regarding the compensation concept and participation rights as well as the loan and credit terms and conditions for members of the Board of Directors (BoD) and the Executive Management (EM) on Group level and the teams in the respective market units. It provides an overview of the philosophy, guiding principles and processes pertaining to the compensation paid by Helvetia that apply to all operational and executive levels. The application of the general principles in the financial year and the specific payments as well as the relevant information for the vote on compensation are then – unless explicitly mentioned – only presented in a second and third part for the BoD and the EM, which must be reported pursuant to the “Ordinance Against Excessive Compensation in Swiss Listed Companies” (VegüV) of 20 November 2013 (as at: 1 January 2014). All sections comply with the “Swiss Code of Best Practice for Corporate Governance” issued by economiesuisse in 2002 and updated in 2016, the Corporate Governance Guidelines (RLCG) of SIX Swiss Exchange of 20 March 2018, Circular 2010 / 1 “Compensation Systems” by the Swiss Financial Market Supervisory Authority FINMA of 22 September 2016, the Swiss Code of Obligations and the Ordinance Against Excessive Compensation in Swiss Listed Companies (VegüV) of 20 November 2013, which entered into force on 1 January 2014.
Results-based compensation component (reference value 20 % of fixed compensation): This compensation component based on the annual result is multiplied by the percentage of target achievement, which also applies for establishing the results -based variable compensation for all employees in Switzerland. The resulting amount is paid out to the EM member in cash. The amount of the results-based compensation is based on the operating result and the achievement of the budget goals for the relevant financial year with a special consideration of developments in Switzerland.
– Employer contributions to pension funds with respect to the fixed compensation 2 097 722 1 626 331
Financial report Compensation report paid to the EM (see also the explanations to Art. 5.2 from page 31 in the chapter on “Corporate governance”).
During the first half of 2018, catastrophe claims in Germany increased the combined ratios of the insurance companies. In contrast, Italy and Spain benefited from improved results in the motor vehicle insurance business. According to the SIA, the loss burden in Switzerland is likely to be lower than in the previous year due to fewer storms in 2018 on the whole.5
– The portfolio quality in the non-life business remains very good. This is reflected in the form of a net combined ratio of 91.0 %. In the Swiss country market, this figure improved to 82.7 %; better net combined ratios were also recorded in the Europe and Specialty Markets segments, which recorded figures of 95.1 % and 96.2 %, respectively.
– In the life business, new business developed solidly: the new business margin was 1.7 % – In 2018, Helvetia generated operating cash production of CHF 289.8 million. Both the non-life and life insurance businesses contributed to the increase of 7.0 %.
The IFRS result after tax for the 2018 financial year was CHF 431.0 million. Although this exceeded the 2017 IFRS profit for the period of CHF 402.9 million, it fell below the underlying earnings of CHF 502.4 million generated in the prior year. The net profits no longer include any acquisition effects from the takeovers completed in 2014 apart from the ongoing bond amortisations from the acquisition of Nationale Suisse of CHF 16.4 million (after tax and policyholder participation). To allow for a better assessment of the operating performance, Helvetia compares the 2018 IFRS net profits with the underlying earnings2 generated in financial year 2017, which has been adjusted for all acquisition effects.
Helvetia posted an encouraging increase in premium volume for the non-life business. Despite much improved technical results and a very good combined ratio, the annual result for 2018 lagged behind the 2017 figure. The reason for this was a lower investment result due to the very weak performance of the equity markets.
Traditional insurance solutions CHF 1,045.1 million, – 3.2 % in OC
The IFRS result after tax for other activities stood at CHF – 48.9 million in financial year 2018 (underlying earnings in financial year 2017: CHF −54.2 million). The following factors made a contribution: Positive consolidation effects from the funds allocated to this segment Higher costs primarily due to investments in the new brand presence 57Helvetia Financial Report 2018
Investment structure in the 2018 financial year Share in % | in CHF million
In financial year 2018, Helvetia generated non-life premiums in Switzerland of CHF 1,471.8 million (financial year 2017: CHF 1,464.9 million).
– Higher pension fund contributions – Higher distribution costs due to opening up of new distribution channels 61Helvetia Financial Report 2018
Better technical result due to higher volume and, to a lesser extent, thanks to an improved technical performance
The Specialty Markets segment also developed well during the past financial year. In addition to the premium growth, the positive earnings growth is also worthy of special mention.
Net cost ratio 2018 Net cost ratio 2017 66 Helvetia Financial Report 2018
Purchase of investments in subsidiaries, net of cash and cash equivalents – 3.7 – 60.0
IFRS 15 governs the recognition of revenue from contracts with customers. The Standard includes exceptions for insurance contracts, financial instruments and leases. The Helvetia Group generates income from contracts with customers within the scope of IFRS 15. This primarily comprises income originating from the intermediary and advisory business. The adoption of IFRS 15 has no material impact on the consolidated financial statements.
2.3.2 Associates Associates of Helvetia Group are accounted for using the equity method if significant influence is exercised by Helvetia Group. The book value of all investments is tested for impairment if there is objective and substantial evidence for impairment at the balance sheet date. Associates of Helvetia Group are listed together with the fully consolidated subsidiaries from the table in section 18.3 (from page 179).
Profit or loss before tax 401.7 426.0 149.3 130.0 43.8 13.4 – 46.9 – 56.0 0.0 0.0 547.9 513.4
Income investments with market risk for the policyholder – 50.1 38.2 – 170.5 121.3 – – 4.9 – – – – 215.7 159.5
Total revenues from external customers 5 558.7 5 954.3 2 849.9 2 990.5 974.7 844.3 – 233.0 – 94.5 – 0.5 – 0.3 9 149.8 9 694.3
Claims incurred including claims handling costs (non-life) – 417.1 – 356.7 – 316.2 – 299.2 – 244.1 – 218.9 – 200.5 – 198.8 1.5 1.3 – 1 176.4 – 1 072.3
Profit or loss for the period 147.9 173.4 332.0 290.0 – 48.9 – 60.5 0.0 0.0 431.0 402.9
Profit or loss before tax 183.8 209.7 417.4 372.8 – 53.3 – 69.1 0.0 0.0 547.9 513.4
Impairment of tangible and intangible assets affecting income – – – 1.2 – 0.3 – 2.5 – – – – 3.7 – 0.3
Financial report Foreign currency translation 4.1 Exchange rates The Swiss franc, euro, US dollar and British pound are the functional currencies in the individual business units of Helvetia Group. The following exchange rates apply to the translation of these financial statements and foreign currency transactions: Exchange rate at reporting date 31.12.2018 31.12.2017
Stress tests show that reasonable change in key assumptions used to determine the recoverable amount of the individual cash generating units could result in the carrying value exceeding the recoverable amount of the units “Italy non-life” and “Intermediary and advisory business”. With other assumptions unchanged, – the applied discount rates for the “Italy non-life” unit would have to increase by 0.4 % or free cash flows fall by 4 %, – the applied discount rates for the “Intermediary and advisory business” unit would have to increase by 1.0 % or free cash flows fall by 20 %, for the estimated recoverable amount to equal the carrying value.
Financial report Investments 7.4 Investments in associates Dividend income from associates totalled CHF 1.2 million (previous year: CHF 1.1 million). The gain from the disposal of the investment in the associated company fvv-Vorarlberger Versicherungsmakler GmbH, Götzis, was CHF 0.1 million in the previous year.
Total financial assets at amortised cost 11 489.7 11 596.1 11 489.7 11 596.1 12 487.2 12 745.7 182.0 284.0 12 303.2 12 461.7 2.0 –
Investments with market risk for the policyholder 3 332.2 3 579.3 3 188.8 3 217.0 3 332.2 3 579.3 2 814.6 3 044.0 517.6 535.2 – 0.1
Total equity- and equity-index instruments 1 375.1 667.1 620.3 2 662.5 2 867.3 108.4 87.8
Total derivatives for hedge accounting 648.2 – – 648.2 470.8 10.0 28.6 7.7.3 Derivatives for hedge accounting
Unearned premium reserve for insurance contracts life 194.4 202.5 4.3 5.0 190.1 197.5
Reserves for non-life insurance contracts 6 163.5 6 174.8 394.9 424.5 5 768.6 5 750.3
Actuarial reserves for investment contracts with descretionary participation features 2 718.5 2 725.1 – – 2 718.5 2 725.1
Total financial liabilities at fair value 1 155.9 1 181.9 1 155.9 1 181.9 1 155.9 1 181.9
Foreign currency translation differences – 66.6 163.1 – – – 66.6 163.1
Total that will not be reclassified to income 8.1 94.2 – 3.4 – 19.6 4.7 74.6 10.5 Deferred tax assets and liabilities
Weighted average number of shares outstanding 9 892 916 9 894 493
At the reporting date there was a loan from Helvetia Schweizerische Versicherungsgesellschaft AG to Patria Genossenschaft of CHF 12.0 million (previous year: CHF 16 million) that will be fully amortised in 2021 at the latest. The interest rate is 0.75 %.
Members of the Board of Directors have no claim to employee conditions. At the reporting date, a mortgage loan had been granted to Jean-René Fournier for CHF 765,000 (previous year: CHF 765,000). In the reporting year, the loan, a fixed mortgage at normal customer conditions, had an interest rate of 1.57 % (previous year: 1.57 %).
When policyholders reach retirement age they may choose to have the retirement capital paid out as a lump sum or converted into a pension. The conversion of the mandatory savings component is carried out at the government-mandated BVG conversion rate, while the conversion rate on the extra -mandatory savings component is determined by Helvetia Group. After conversion, the pensions and any resulting survivors’ benefits are guaranteed for life.
Loans (LAR) incl. money market instruments 1 372.4 2 437.3 3 479.4 1 685.2 206.9 9 181.2
Total reserves for insurance and investment contracts (gross) 7 044.0 12 464.9 7 805.9 16 241.5 1 321.0 44 877.3
Germany (Govt) AAA 802.8 720.9 – – – – – – 81.9 –
Helvetia Compagnia Svizzera d'Assicurazioni S.A., Rappresentanza Generale e Direzione per l'Italia, Milan 1 Non-life 100.00 full EUR
 Reconciling the underlying data used to calculate the life reserves with the sub systems using random samples.
In summary, we have audited the claims reserves as follows:  Inclusion of actuaries as part of the audit team.