Group profit for the period per share in CHF 43.0 40.9 5.1 % 179
Helvetia can already show first successes in the integration of Nationale Suisse and Basler Austria: the future management structures, target organisations, processes and the harmonised product range for the “new Helvetia”
Helvetia”. The company acquired in Austria is now also using the brand name “Helvetia”. The new business organisation has already started to sell the unified product range in life insurance there. The joint sales launch of the extended network of offices under the Helvetia brand in Switzerland is planned as of 1 May 2015 as part of the integration of Nationale Suisse; the country markets of
Successful business performance and the acquisitions of Nationale Suisse and Basler Austria have increased Helvetia Group’s investment assets to CHF 48.0 billion (previous year: CHF 39.6 billion).
In 2014, Helvetia generated current investment income of CHF 993 million. This is equivalent to a direct yield of 2.5 %1. Including the contribution of real estate, the overall performance was an attractive 7.7 %1 and generated a contribution of CHF 2.95 billion, of which CHF 1.28 billion was reported in the income statement (previous year: CHF 1.16 billion).
Solvency I ratio, which was around 216 % (previous year: 218 %). We believe that the SST ratio as of the end of 2014 will remain within the target range of 150 to 200 % even after the acquisitions.
The “new Helvetia” from the merger will generate a premium volume of around CHF 9 billion and have a profit potential of more than CHF
through the expansion of our own sales network, the addition of direct sales through smile.direct as an independent brand and through strategic partnerships with both companies´ long-standing partners.
17.9.2014 Shareholders approve capital increase and elect five new members to the Board of Directors 22.9.2014 Interim result for the public purchase and exchange offer for the takeover of Nationale Suisse (81.22 %)
– The “Active Reinsurance” market unit will continue to work on the focused development of its global business model.
Our corporate governance principles Helvetia considers good corporate governance very important. It is systematically geared to the Group’s strategy and positioning and integrated into day-to-day work. Read more about this on page 59.
Europe and “Specialty Markets” provide the best possible optimal use of the proven strengths of both companies and offer the most favourable conditions for healthy further development.
Nationale Suisse and Basler Austria including synergies and without transaction effects such as restructuring costs and the amortisation of intangible assets and fair value adjustments) of 15.9 %. The main driver was again the profitable non-life business which impressed with an increase of 33.2 %. The increased result was due to an organically better technical result, supported by the acquisition of Nationale Suisse and
Despite the planned decline in business volume in the life business, it was still able to almost maintain its absolute profit contribution. This result is pleasing, especially in view of adverse factors, including the continued sustained low interest rate and the increase in reserves required because of this. In addition, the equity markets no longer experienced the boost they had in 2013. We will continue to focus on the capitalefficient non-traditional life insurance in new business, whereby we particularly want to further develop our state-of-the-art life insurance products.
Helvetia Nordic Trophy, the biggest Swiss competition for young skiers in cross-country skiing, ski jumping and Nordic combined. The contract with the Swiss-Ski Federation runs until the end of the 2016/2017 season. As of the winter season 2014/2015, Helvetia is also the new premium sponsor of cross-country skiing trails in Switzerland and of Romandie Ski de Fond. This continuity in skiing sponsorship means we are laying the basis for successful sportsmen and sportswomen to strengthen identification with the Helvetia brand through their dynamism and enthusiasm.
Our product development and sales activities are consistently guided by the customer life cycle. As a quality provider, however, we also differentiate ourselves by being highly service oriented. That is why efficient claims handling is also one of the reasons for our success. We achieve a high level of customer loyalty through quick, personal and competent customer care. Our long-term- oriented business model requires prudent underwriting policies. Sound investment and risk management ensure that we can cover our customers’ insurance coverage at all times.
Profitability and efficiency The profitability of the life business is determined by the development of technical risk and events on the financial markets. Share price and interest rate trends influence insurance demand and determine the achievable investment returns and policy benefits guaranteed over the long term.
Helvetia in recent years. Also in financial year 2014, the net combined ratio was 93.1 %, which is a reflection of portfolio quality.
Group structure 1 Helvetia Holding AG, listed on the SIX Swiss
For detailed information about the CR organisation, refer to content/en/about -us/commitment/corporate responsibility /organisational- management.html
Corporate responsibility For Helvetia, corporate responsibility has always meant taking responsibility for the community.
Successful Shareholders’ Meetings in 2014 Helvetia Group once again presented a very good annual result to the 1,630 shareholders with voting rights attending the Shareholders’
In these capital models, the IFRS equity forms the basis for establishing the available capital.
Capital management process Helvetia applies an integrated approach to capital management. At the strategic level, the capitalisation and the risk profile of business units are managed in terms of profitability and growth potential and therefore of the strategic Group targets. Capital is managed integrally in accordance with a defined capitalisation target under the Swiss Solvency Test, Solvency I and Standard
Prudent investment strategy and timely risk management The investment strategy is defined in detail and implemented as part of the annual adaptation of the investment approach. Adjustments are made to take advantage of new opportunities arising from short-term market developments, while remaining within the tactical bandwidths established by the management. The investment strategy is always supported by timely risk management. The objective of the risk-controlling measures is to protect the balance sheet and the income statement from excessive losses in value.
The reconstitution of the Board of Directors, taking account of the members elected at the 2014 Extraordinary Shareholders’ Meeting, is scheduled for following the re-election at the 2015 Shareholders’ Meeting.
Four appointments, in particular President of the Board of Directors of Patria Genossenschaft,
Bachelor’s degree in economics from the University of Freiburg (lic. oec. publ.), Swiss, Sion, 1957
Doctorate in law (University of Zurich), lawyer, specialist lawyer SAV, law of inheritance, mediator SAV,
Professional background, exercising operational executive functions 1987 – 1999 various managerial positions in international and national business of the
Three appointments, particularly President of the Board of Directors of the regional marketing agency, Greater Zurich Area AG, Zurich, and President of the Board of Directors of
Directors, Mr Erich Walser, died unexpectedly on 30 December 2014. Until the end of the 2015
Directors as well as their acceptance of new board or similar mandates (the Nomination and
Company profile Corporate governance be found here. Interested parties may also register online to receive the latest information on the company directly and to request particular publications.
Each member of the Board of Directors receives the same basic fixed remuneration determined in advance, except for the Chairman whose higher fixed remuneration takes into account his greater involvement in management and operational activities. The vice chairmen, the members of the committees and the chairmen of committees also
Executive Management, his or her deferred claim lapses as follows: cancellation of all claims for the year in which notice of termination was given, cancellation of one half of the claims for the first preceding year and no cancellation of any claims from the second preceding year. This concept establishes a direct link between the members of Executive Management and the long-term development of the company in two ways: positive or negative share price trends over the three-year period and the possibility that the number of allocated shares can be reduced retroactively.
Total fixed salaries paid out 4 755 224 4 461 206
The Board of Directors shall apply for approval from the Shareholders’ Meeting for variable compensation for the Board of Directors in the total amount of CHF 419,000 for the concluded financial year 2014.
The global reinsurance market came under pressure due to the further increased traditional and alternative capacities. The low interest rate environment meant that more alternative capital was added to the reinsurance sector. 2014 was therefore characterised by overcapacity.
Commensurate with the fall in interest rates, bonds achieved significant increase in value, which reached double-digit percentages in bonds with longer maturities. The uncomfortable downside of this performance strength is that the new inflow of funds had to be invested at increasingly low rates of return, putting pressure on the current income.
The equity markets performed inconsistently and remained vulnerable throughout the entire year, regularly alternating between periods of recovery and setbacks. Geopolitical risks in the wake of the Ukrainian crisis, economic concerns in Europe or the fear of a renewed flare-up of the debt crisis caused stock prices to fall time after time. While the American and Swiss equity markets concluded the year with attractive gains of 12.6 % and 9.5 %, respectively, the majority of the European markets were lethargic and scarcely made any headway.
Helvetia is therefore putting emphasis on socalled “underlying earnings”, which eliminates these temporary effects and therefore reflects the operating performance of the new Helvetia
Business volume: stable business development at Group level, very good performance in
As a result of the lower interest rate environment, new business profitability in all countries was below the previous year’s level.
Combined ratio: the net combined ratio again beats the Group target range of 94 – 96 %
Austria. The planned amortisation of intangible assets and further planned write-downs due to the revaluation of interest-bearing securities, which were to be carried out in within the scope of the acquisition accounting according to IFRS, also had a major effect on earnings.
Current income of CHF 993 million was recorded in the reporting year. This corresponds to a direct yield of 2.5 %6. The decline of 0.2 percentage points compared with the previous year was within expectations. It is mainly due to the drop in interest rates, which led to constantly falling yields for new investments. As a result, the performance of fixed-income securities reached a peak of 10.0 %. Equities generated returns of 12.2 %. Including the ongoing contribution of real estate, the investment performance amounted to an attractive 7.7 %6 and generated a contribution of CHF 2.95 billion. Of this, CHF 1.28 billion was reported in the income statement, while
The non-life business in Germany likewise achieved an organic increase in premiums of the prion year 2.5 % (in OC). The portfolio restructuring of the prior year and the resulting adjustments to premiums had positive impacts in the form of premium growth, mainly in the motor vehicle and residential building lines.
(previous year: 97.9 %). The increase was due to a higher claims ratio resulting from large and late claims.
At CHF 507.3 million, the non-life business premium volumes were 6.2 % (in OC) above those of the previous year (financial year 2013: CHF 484.3 million). Including the pro rata contribution from Nationale Suisse, the largest insurance line, motor vehicle insurance, recorded growth of 1.9 % (in OC). The property (+5.7 %
Suisse, the transport sector also reported significant growth (+32.3 % [in OC]).
Provisions and other commitments 182 Employee benefits 187 Share-based payments 188 Related party transactions 191 Risk management
Earnings per share: Basic earnings per share (in CHF) 11.5 42.98 40.89
This item now includes all financial assets for which the market risk lies entirely with the policyholder. It may include investments for which the default risk is assumed by
If a market value in an active market is not available, the fair value is determined using valuation methods. Such methods are considerably influenced by assumptions, which can lead to varying fair value estimates. Financial instruments for which the model assumptions are based on observable market data are allocated to the “Level 2”
The cash flows used for the forecast are based on the rental income that can be earned in the long term.
The risk and cost portions of premiums from policyholders are recognised in the income statement and recorded in the item “Other income”. The policyholder’s deposit is directly credited or debited with the investment portion of the premium.
If insurance contracts contain both an insurance and a deposit component, unbundling is carried out if the rights and obligations resulting from the deposit component cannot be fully reflected without a separate valuation of the deposit component.
Helvetia Holding AG shares allocated prospectively over three years. The objective is to promote a longer-term business perspective. This payment is recognised proportionally in the income statement every year until ownership to the shares is transferred.
In life business, Helvetia Group offers products in the areas of life insurance and old-age and pension insurance. The non-life business provides property, motor vehicle, liability, transport, health and accident insurance. Units without any technical business which can be directly classed in the “life” or “non-life” business are presented in the respective segment.
of which transactions between geographical segments 86.7 71.9 67.3 60.3 40.0 27.5
Financial report Segment information 3.3 Additional information by segment: Switzerland Germany Italy in CHF million of which investments in associates 38.1 0.1 – – – –
Impairment of tangible and intangible assets affecting income – – – – – 27.1 –
The foreign exchange results in the consolidated income statement in reporting year 2014 show a loss of CHF 40.4 million (previous year’s loss: CHF 3.3 million). The foreign exchange gain from financial investments is included in “Gains and losses on
Book value as of 31 December 8.2 2.6 475.0 344.9 58.5 20.6 of which assets under finance lease – – 38.1 40.1 – –
Helvetia Group’s “Other intangible assets” mainly comprise long-term sales agreements, the value of the acquired insurance business (present value of future payment flows from the acquisition of long-term insurance or investment contracts), and purchased and internally developed software.
The applied discount rate must increase by 1.31 % – with other unchanged assumptions –, before the estimated recoverable amount is equal to the book value.
Investment result from Group financial assets and investment property1 1 275.4 1 156.8
Not based on market data reclassified Level 1 reclassified Level 2 reclassified Level 3
In the reporting period, CHF 106.7 million of investments were transferred from “Level 1”
Helvetia Group classifies financial liabilities according to their origin as financial liabilities from financing activities, financial liabilities from insurance business and other financial liabilities. Helvetia Group applies the usual financial covenants to its financial liabilities, but these are not expected to have any material impact on the contractual conditions (e.g. due date, interest rate, collateral, currency).
Loss reserves for insurance contracts non-life 9.3.1 4 863.9 3 121.6 432.1 299.5 4 431.8 2 822.1
Accumulated claims paid as of 31 December – 2 068.8 – 1 860.2
In the Swiss life business, the actuarial reserves increased by CHF 115.7 million due to changes to local actuarial assumptions, in particular assumptions regarding mortality, expected claims for disability and the maximum interest rate for reserves, within the framework of the standard periodic review.
Due from / due to insurance companies 557.3 441.4 293.9 246.3
The treasury stock decreased by 17,967 shares in the reporting year. Therefore the number of treasury shares is now 26,288. The treasury shares that were granted to Helvetia
The first termination date on which Helvetia has the right, but not the obligation, to repay the bond is 30 November 2015. After this date the bond will earn a floating interest rate based on the three-month CHF LIBOR rate plus 359.6 basis points.
is converted into a specific number of shares that are prospectively allocated to the Executive Management member for three years hence. The conversion price per share is calculated as described in section 14.2. For the 2014 financial year, LTC shares to the value of CHF 1.9 million were allocated (previous year: CHF 1.8 million). For the Executive Management of the Group this is subject to approval by the Shareholders’ Meeting.
This section sets out the links to related companies and persons.
(retrospective risks). The Group addresses prospective and retrospective risks with actuarial controls, adequate reserves and diversification. Despite the balancing of risks through diversification, individual risk clusters (e.g. in the form of individual large risks)
However, for contracts with a participation feature, it is permitted to offset other valuation differences on the local balance sheet (in particular for investments) before deferred profit participation at Group level.
If, in the portfolios exposed to longevity, fewer policyholders die than expected or if policyholders live longer than expected, this could result in losses for the shareholders.
The small size of the active reinsurance portfolio allows for detailed tracking of customer relations and a strict risk and engagement control of the business underw ritten.
The foreign currency exposure is largely hedged by forward contracts. More information can be found in tables 7.6.1 “Derivative financial assets” (page 156) and 8.3.1 “Derivative liabilities” (page 162).
As a “reasonable possible change” of the risk factors for the sensitivity analysis, each symmetric interval is defined that covers a range of possible changes in exchange rates that could occur over a year with a probability between 10 % and 90 %. Sensitivities are shown for the limits of the selected intervals that satisfy these conditions.
As there are no financial instruments netted on the balance sheet at Helvetia, the table shows the extent to which set-off agreements for financial instruments exist, even if no netting takes place on the balance sheet. The set-off agreements are ISDA and Swiss
Credit quality of debt instruments, loans and derivative financial instruments by sector
Seville, increased from 98.97 % to 98.99 % due to gradual acquisition.
Helvetia Schweizerische Versicherungsgesellschaft AG, Rückversicherung, St Gall2 Other 100.00 full CHF
As statutory auditors, we have audited the consolidated financial statements given on pages 108 to 222 of Helvetia Holding AG, which comprise the income statement, statement of comprehensive income, balance sheet, statement of equity, cash flow statement and notes for the financial year ended 31 December 2014.
In accordance with article 728a, paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.
On the balance sheet date, the shareholder pool comprised the following shareholders: – Patria Genossenschaft, Basel, with 30.12 %
Committee meets at least once a quarter and is chaired by the Head of Risk & Capital
Capital Management department, which reports to the CFO and exercises the Group’s risk monitoring function, ensures the necessary risk transparency by, among other things, preparing a quarterly risk and capital report.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor ’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Embedded value as of 31 December 2 979.3 2 922.6 in %
Return on equity (ROE) Ratio of result to equity: based on the earnings per share
Run-off portfolio An insurance portfolio that is being wound up, i.e. no new contracts are concluded for this portfolio and no existing contracts from this portfolio are extended.
Helvetia Versicherungen St. Alban-Anlage 26 CH-4002 Basel Tel. +41 58 280 10 00 (24h) www.helvetia.ch info@helvetia.ch
Important dates 24 April 2015 Ordinary Shareholders’ Meeting in St Gall 31 August 2015 Publication of half-year financial results for 2015 14 March 2016 Publication of financial results 2015
Market capitalisation at the reporting date in CHF million 3 110.7 2 552.6 2 998.2 3 872.2 4 687.6 in CHF million
Helvetia can already show first successes in the integration of Nationale Suisse and Basler Austria: the future management structures, target organisations, processes and the harmonised product range for the „new Helvetia“ have been defined in all the country markets. The sales launch with an expanded network of offices under the Helvetia brand will take place in Switzerland on 1 May 2015 and gradually in Germany, Spain and Italy from mid-2015. The acquired Basler Austria now operates under the brand name, Helvetia. The new sales organisation has been launched with the sale of the consolidated product range in life insurance.