Helvetia achieved important successes with its integra- tion measures in the 2015 financial year. The integration of Nationale Suisse and Basler Austria has largely been finalised. All important milestones have been reached, including the full takeover, mergers of the legal units in Switzerland, Austria and Spain, and the launch of joint sales with an integrated product range under a single brand. The legal mergers in the European market units should be completed by the end of 2016; the life units in Italy will be merged in 2017. Helvetia has already achieved synergies of CHF 45 million. Based on its strengths, Helvetia is setting new objectives for the next period: The helvetia 20.20 strategy places an even greater emphasis on customers. It makes the company more digital, more agile and more valuable.
Uwe Bartsch, Integration Project Head for Helvetia Switzerland, discuss the progress made.
It is also important to manage such a project with agility and flexibility, since the project manager cannot plan all topics and activities. The decisive factor here was the great commitment of the sub- project managers, all of whom worked very independently. At the same time a simple project structure is needed, with clearly defined responsibilities and objectives for the sub-project managers.
The encouraging growth reported during the strategy period is mostly reflected in the profitable non-life business where premiums rose by 68 % in currency-adjusted terms. All country markets made a positive contribution to this increase. Growth was also boosted sharply by the acquisition of Nationale Suisse, following which non-life premium volume grew by 35 % in the 2015 financial year alone.
The Helvetia Group is becoming more modern, more digital and more agile
In the Specialty Markets area, Helvetia offers tailor-made cover in the specialty lines marine / transport, art and technical insurance. With its Specialty Markets area, Helvetia not only has a local presence in Switzerland, France and the
Principality of Liechtenstein, but also in Turkey and Miami for Latin America as well as in Singapore and Malaysia. Its active reinsurance business is also assigned to this market area. The reinsurance business focuses on the well-diversified nonlife business. In this niche area, Helvetia stands out thanks to its sustainable and long-standing business relationships and strict underwriting policy.
“Best-selling” tranches Last year, Helvetia once again issued two single- premium investment tranches that were only available for a limited period. Thanks to innovative guarantee mechanisms combined with attractive investment strategies, this product category was able to continue its success story in a difficult market environment with persistently low interest rates.
The average number of Helvetia shares traded each day in 2015 was 16,802 shares per day, which is around 8 % more than in the previous year. Compared to the previous year, the structure of the types of investors has shifted slightly from banks and insurance companies to other institutional investors and private individuals.
Business and masters degrees at the Universities of Sussex and New York, Swiss and German citizenship, Zurich, 1951
Good corporate governance can only be truly effective if it is constantly aligned to the Group’s strategy and positioning. For more information, please refer to pages 14 et seq.
Company profile Corporate governance ments and the quality of the services it has performed, both in its entirety and within each committee, and – where necessary – identifies any improvements that may be required. The composition of the Board of Directors is shown on pages 47 to 52. None of the members of the Board of Directors holds any executive function. With the exception of Hans Künzle (CEO of Nationale Suisse until 31 December 2014 and a Board member from 1 January 2015), no Board member belonged to the Executive Management of the Helvetia Group or any of its Group companies in the financial years preceding the reporting period. No member of the Board of Directors has any significant business relationships with Helvetia other than as a policyholder.
a) The Strategy and Governance Committee (SGC) prepares the resolutions to be passed by the Board of Directors in the event of a change or redefinition of strategy, monitors the strategic risks within the framework of the defined strategy and the related measures, deals with mergers, acquisitions and disposals of companies or major portfolios, and prepares the required resolutions by the full Board of Directors. It also ensures good corporate governance within the Helvetia Group, assumes duties and powers that have been assigned to the SGC by the Board of Directors, deals with issues entrusted to it by the Chairman that are not reserved for the full Board of Directors in accordance with the law, the articles of incorporation or Group regulations, and discusses important and urgent issues. The SGC convenes as often as business requires. In order to deal with specific issues, it may call on internal or external specialists to attend its meetings, which is regularly the case. The CEO participates in an advisory capacity. In 2015, the SGC had three meetings, all of 3.3 Cross-involvements See section 3.2.
– Employer contributions to pension funds with respect to the variable compensation (incl. AHV / IV / EO) 322 695 276 471 1 Total bonus amount based on personal and results-based target achievement 2 Special bonus “Nationale Suisse Project” 3 Comprises the value of the deferred shares allocated as part of the LTC
4. Approval of the total amount of variable compensation for the Group Executive Management for the past financial year 2015 The variable compensation components of the Group Executive Management and their calculation were described in para. 2 and the amounts were disclosed in section II. The resulting differences between 2014 and 2015 arose from changes in the extent of target achievement and the basic salaries while the calculation, the number of members of the Group Executive Management and the reference figures did not change.
Thanks to proactive communication, we are able to address problems together.
unternehmen/spanische-assekuranzschafft -2015-den-turnaround staged a turnaround in the past financial year and for the first time in four years generated growth of 2.4 %5. This was mainly due to gains in motor vehicle insurance, which generated estimated premium growth of 1.7 %. According to projections of the Swiss Insurance Association (SVV), premium i ncome in the non-life insurance business in Switzerland increased by 0.5 %6 in 2015. Europe was mainly untouched by major storms and natural catastrophes in 2015. In Germany, the Elon and Niklas storms led to considerable weather -related claims, which will be reflected in the combined ratios of European insurers. In addition, the low interest rate environment in the non-life business also had an unfavourable impact on the profitability of insurers, although to a lesser extent than in the life business. The life insurance business in the past financial year was once again dominated by conditions in the capital markets. The greatest challenge to life insurers in 2015 was the low interest rate environment, while Swiss insurers were also faced with the introduction of negative interest rates. The turmoil in the financial markets also increased the demand for yield-oriented financial investments. In most continental European markets, growth in the life business slowed or even entered negative territory. For example, market growth in Italy fell from around 30 % in 2014 to an estimated 12 % in the year under review. In contrast, the life insurance business in Spain even showed signs of recovery with premium growth of 1.7 %. The growth was mainly driven by risk life insurance, which posted gains of 7.4 %7. Premium growth is expected to stagnate in the Swiss life insurance business. The global reinsurance market remained an open market in 2015 and was characterised by overcapacity. The consolidation phase that took effect in the previous year did not result in significant easing.
By segment, the Switzerland market area generated the greatest growth with an increase of CHF 583.9 million or 13.4 %. The Europe segment was also able to generate growth of 5.1 % (in OC). However, expressed in CHF, the business volume declined by 7.7 % due to the negative exchange rate effects of the Swiss National Bank scrapping the euro peg in January 2015. Helvetia also generated a significantly higher volume in the Specialty Markets segment compared to the previous year, largely due to the initial consolidation of the Nationale Suisse businesses (+CHF 125.4 million or 28.7 % [in OC]).
Business development Investments net asset value as of the end of 2014, without accounting for the value in force of the insurance portfolio or the solvency costs. In view of the planned sale at the beginning of 2015, the life business of Nationale Suisse in Belgium was also not included. As at 1 January 2015, the portfolios of the former Nationale Suisse and Basler Austria were modelled and included with all components in the 2015 embedded value. In addition, all burial insurance policies in Spain are now allocated to the life business, which is consistent with the practice of the IFRS and the various solvency metrics. All of these adjustments increased the embedded value as at 1 January 2015 by CHF 208.8 million compared to 31 December 2014. The analysis of the changes shows that these mainly derive from economic factors, as the decision by the Swiss National Bank to scrap the euro floor resulted in a sharp decline in investment yields and negative exchange rate differences for the EU units. Dividend payments in the first half of the year also reduced the shareholder value of the life insurance portfolio. In contrast, operating profit improved due to more favourable cost assumptions and a positive contribution by new business.
Corporate In addition to the financing companies and the holding company, the Corporate segment also includes the Corporate Centre and Group reinsurance. This segment’s underlying earnings of CHF − 67.8 million was below the previous year’s figure of CHF − 3.1 million. The decrease in earnings was the result of a weaker result from Group reinsurance, currency losses related to the scrapping of the euro peg in January 2015 and financing costs for debt instruments in connection with the acquisition of Nationale Suisse, which were taken into account for an entire year for the first time in 2015. In addition, Nationale Suisse did not pay a dividend in financial year 2015 due to the full takeover. The profit for the period reported in accordance with IFRS was CHF − 77.7 million (financial year 2014: CHF 83.1 million).
Summary of significant accounting policies 127 Segment information 139 Foreign currency translation 140 Property and equipment
Claims incurred including claims handling costs (non-life) – 2 388.6 – 1 933.1
Earnings per share: Basic earnings per share (in CHF) 11.5 28.98 42.98
Total that will not be reclassified to income – 108.9 – 128.1
Total liabilities and equity 54 144.8 55 068.9 1 Change in presentation (see section 2.3 on page 114)
For non-monetary financial assets classified as available-for-sale investments, such as shares and shares in investment funds, the unrealised foreign currency result is recognised in equity without affecting the income statement until the financial instrument is sold. However, for monetary financial assets such as bonds and loans, the unrealised foreign currency result is immediately recognised in the income statement.
2.12.3 Impairment of financial assets 2.13 Financial derivatives 2.14 Net investment hedge
2.17 Income taxes 2.18 Receivables 2.19 Accrued financial assets 2.20 Cash and cash equivalents 2.21 Treasury shares 2.22 Non-technical provisions and contingent liabilities
Share of profit or loss of associates 0.4 0.9 0.5 0.1 of which transactions between geographical segments 92.1 79.3 276.5 162.1
of which technical provisions (gross) 31 342.5 30 429.9 8 997.4 9 835.1 1 312.0 1 350.9
Change in the scope of consolidation – 786.2 – 0.8 224.6 – 0.8 1 010.8
Investment result from financial assets and investment property 1 184.5 1 475.9
Realised and book gains and losses on financial assets designated as at fair value through profit or loss 84.7 285.1
were transferred from “Level 1” to “Level 2” as there was no longer an active market for these assets.
Total derivatives for hedge accounting 239.2 – – 239.2 497.2 1.1 23.1 1 At fair value through profit and loss (held for trading)
Change in the scope of conslidation – 0.1 – 1.0 1.2 – 1.0 1.3
The 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
Unearned premium reserve for insurance contracts life 211.2 217.2 5.3 6.5 205.9 210.7
Change in the scope of consolidation – 111.4 2 895.3 – 61.5
Foreign currency translation differences – 427.1 – 76.4 – 32.4 – 4.5
The Liability Adequacy Test (LAT) for non-life business resulted in an additional increase in loss reserves of CHF 39.5 million as of 31 December 2015 (previous year: CHF 48.6 million).
< 1 month 2–3 months 4–6 months > 6 months in CHF million
Weighted average number of shares outstanding 9 875 077 8 853 822
The Group investments included in the plan assets are set out in section 13.3.8 (page 184). There are other funded defined benefit plans in place in Germany.
Reporting, Head of Actuarial Life, Head of Portfolio Strategy and Risk Management and
The small size of the active reinsurance portfolio allows for detailed tracking of customer relations and strict risk and exposure control of the underwritten business. An actuarial department specialising in reinsurance handles price and reserve calculations.
Risks arising from clusters, accumulations and trend changes 16.3 Insurance technical risks life
If later developments are better than expected, profits accrue which are partially returned to the customer in the form of a participation feature. The following two important exceptions apply to the guaranteed bases: firstly, no interest guarantees exist for the unit-linked insurance policies. However, there may be some products that guarantee the payment of a minimum survival benefit. Secondly, in Switzerland, premiums for insurance policies for disability pensions are not guaranteed for policies underwritten since mid-1997, and may be adjusted.
If, in the portfolios exposed to greater mortality, more policyholders die than expected, shareholders may suffer losses once the buffer of profit participation has been exhausted. The analyses carried out show that this risk can be considered very low. However, an increase in mortality rate in these portfolios, which have to be increased due to high interest rate guarantees, has a small impact on the amount of the increase in reserves.
Available-for-sale investments (AFS) 1 154.5 5 278.1 7 235.3 8 783.6 1 286.9 23 738.4
Goodwill and other intangible assets 867.5 309.4 0.0 – 1 176.9
– Since the beginning of the reporting period, 4IP European Real Estate Fund of Funds,
– On 13 June 2014, the share capital of Helvetia Assurances S.A., Paris, was increased to EUR 94.4 million.
CHF 52.00 in cash and offered 0.068 registered shares of Helvetia Holding AG per
The following overview shows the assets and liabilities at fair value acquired as part of the acquisitions.
Helvetia Swiss Insurance Company in Liechtenstein Ltd, Vaduz Non-life 100.00 full CHF 5.0
On 31 December 2015, Helvetia Holding AG and its subsidiaries held 47,951 shares
CHF 1.3 billion vis-à-vis the bond creditors of Helvetia Schweizerische Versicherungsgesellschaft AG. This is associated with (i) the subordinated bond issued in September 2015 as well as (ii) a subordinated bond issued in October 2014 in the amount of
There were no material events after the reporting date that would have an impact on the carrying values of the reported assets or liabilities or that would need to be disclosed here.
The purpose of this document is to inform Helvetia Group’s shareholders and the public of Helvetia Group’s business activities for the year ended 31 December 2015. This document does not constitute an offer or a solicitation to exchange, buy or subscribe for securities and it does not constitute an offering circular within the meaning of Art. 652a of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of SIX Swiss Exchange. Should Helvetia Group make in the future one or more capital increases, investors should make their decision to buy or to subscribe for new shares or other securities solely based on the relevant offering circular.
Imprint The Annual Report 2015 of Helvetia Group is available in English and German.
In operational terms too, Helvetia posted a convincing business performance in 2015, supported by the successful acquisitions of the previous year.
Market capitalisation at the reporting date in CHF million 5 628.9 4 687.6 20.1 %
Helvetia achieved important successes with its integra- tion measures in the 2015 financial year. The integration of Nationale Suisse and Basler Austria has largely been finalised. All important milestones have been reached, including the full takeover, mergers of the legal units in Switzerland and Austria, the launch of joint sales with an integrated product range under a single brand. Regulatory approval has now also been granted in Spain. The legal mergers in the European market units should be completed by the end of 2016; the life units in Italy will be merged in 2017. Helvetia has already achieved synergies of CHF 45 million. Based on its strengths, Helvetia is setting new objectives for the next period: The helvetia 20.20 strategy places an even greater emphasis on customers. It makes the company more digital, more agile and thus more valuable.