Our world is called “Safety World” because everything we do is centered around safety. In this, we deliberately go beyond the role of traditional insurance companies. Because we help ensure that nothing goes wrong in the first place. And if it does, we are right there. Quickly and professionally.
To in sp ire e m plo yees, customers, partners and shareholders
Baloise focuses on markets, customers, distribution channels and products with high value creation potential. Our preferred customers are private individuals, small and medium-sized businesses with favourable risk and income profiles, as well as selected industrial customers.
SHAREHOLDER STRUCTURE As a public company with a wide shareholder base, Baloise is a part of the Swiss Market Index (SMI). Therefore, the free f loat relevant to the SMI calculation amounts to 100 %. Due to the capital reduction, Baloise dropped below the reportable limit of 3 % of voting rights on 24 July 2008. On 10 October
OVERVIEW The healthy insurance business proved to be a major contributor to Baloise Group income in 2008, whilst the out-ofcontrol capital markets caused depreciation on financial assets in the amount of CHF 925.1 million and thus had a massively negative impact on the investment result. There were chief ly two decisive factors which enabled Baloise to perform so soundly, even in this historical year of crisis. On the one hand, our consistent focus on operating excellence and concentrating sales on profitable target customers produced this excellent technical performance. On the other hand, our risk management system, which has been enhanced during the last few years, was able to keep the enormous pressure on investment performance in check.
Cash and cash equivalents 1,640.0 1,300.9 – 20.7 1 Excluding assets for the account and at the risk of life insurance policyholders.
BASLER VERSICHERUNGEN Thanks to an impeccable operational performance in the core insurance business, the largest business unit in the Baloise Group was able to affirm its superb operational profitability in one of the most challenging years in its history. It generated a profit before taxes and borrowing costs of CHF 235.8 million (previous year: CHF 402.9 million). The result is indeed well below the record result of the previous year, which, however, was achieved under considerably more favourable circumstances. Various negative factors characterised 2008, in particular disastrous financial markets, interest rates and currencies. In this context, we rate what we have achieved as an excellent performance. Business volume reached CHF 3,867.2 million (previous year: CHF 3,742.7 mil lion). The increase of 3.3 % is above the Swiss market average. Growth accelerated in particular in our target segments. Particularly encouraging is the growth in life insurance, a clear signal of customer confidence in the high degree of safety provided by our company.
Baloise Austria was able to maintain the growth momentum of the last few years, thanks to targeted investment in its sales organisation. The merger of Basler Osiguranja and Osiguranje Zagreb in Croatia is successfully on track.
It’s a Friday afternoon on the lake promenade in Ascona. Grandparents are strolling along the waterfront with their grandchildren; a white Rolls Royce decked out with f lowers rolls slowly across the cobblestones. Late summer at its best. However, this idyll is deceptive. Large quantities of driftwood have been washed ashore, evidence of the violent storms that raged in the valleys just a few days before. Rainfall of up to 350 litres per square metre caused the rivers to rise menacingly within a short space of time.
Trust gives stability. We experience trust when someone is there to support us, even in difficult times. Obstacles are overcome, crises mastered and what is almost impossible is made possible.
In 2008, a standardised succession planning and talent identification process was conducted for the first time across the Group. A total of 67 key positions within the Group and a further 110 local key positions were discussed at “roundtable” meetings involving local management, the Corporate Executive Committee and the Chairman of the Board of Directors. This process enabled the identification of the strengths and the development needs of the 177 incumbents, 154 succession candidates and 70 talented individuals from the Group (approx. 5 % of all staff). As part of this process, 10 actual internal succession decisions have been made relating to 2008 / 2009, some of which have already been implemented. This process will be repeated every year. It shows the strength in depth of internal talent and warrants the time invested by the Group CEO and the Chairman of the Board of Directors.
BALOISE ENCOURAGES INTERNAL MOBILITY With the Group Talent Management System, we support internal mobility within the Group. To this end, guidelines and a procedural concept for internal postings were introduced in 2008. Basically, employees at any function level can work in another international subsidiary. In this respect, the focus is always on individual suitability and an appropriate challenge in the target location. In this system both parties, the employees and Baloise, benefit: on the one hand, talented employees can specifically hone their skills, gain an insight into other Group companies and job functions, extend their networks and further their personal development. On the other, we can make cross-border use of the employee’s know-how.
BUSINESS TRAVEL BY RAIL Baloise Switzerland employees are to use public transport when travelling on business. For this purpose, they receive an SBB half-fare travel-card from their employer. Reimbursement of costs incurred when privately owned cars are used for business travel is restricted to the equivalent of half the cost of a rail ticket for the same route. Concomitantly, the rent for parking spaces on company premises will be matched to market prices and at head office will be increased to CHF 200.
Group solvency at 196 % is still a good indicator of the Group’s financial strength.
At Baloise Life (Liechtenstein) AG, which creates innovative life products, teams of actuaries, risk managers and investors work together on product development. In October 2008, Baloise was the first company to launch a variable annuity product called “RentaSafe” in Switzerland.
Shareholder structure As of 31 December 2008, a total of 17,157 shareholders were registered in the Baloise share register. Compared to the previous year, the number of registered shareholders increased by 26.9 %. More detailed information about the shareholder structure as of 31 December 2008 can be found in the section, “Significant shareholders” of the Annual Report on page 120.
Division of authority and responsibilities between the Board of Directors and the Corporate Executive Committee The division of authority and responsibilities between the Board of Directors and the Corporate Executive Committee is governed primarily by organisational regulations and investment policies. Both documents are reviewed on an ongoing basis and updated as changing circumstances require. In 2008, the wording of the rules in respect of the auditors (§28) was amended to comply with statutory regulations.
Members of the Board of Directors receive the minutes of Corporate Executive Committee meetings for their perusal. The Chairman of the Board of Directors and the Lead Director may attend meetings of the Corporate Executive Committee at any time.
Rolf Schäuble (1944, CH, Dr. oec. HSG) obtained his doctorate (Dr. oec. HSG) after reading Economics at the University of St. Gallen. From 1975 and 1993 he held various posts within the Zurich Insurance Group in Zurich, most recently as a member of the Group Executive Board. In 1993, Dr Rolf Schäuble joined the Board of Directors of Bâloise-Holding and was appointed Chairman in 1994. From 1996 until 2002, he was also Managing Director and Chief Executive Officer of the Baloise Group. Between 2002 and December 2007, he served solely as Chairman of the Board of Directors. From 6 December 2007 until 31 December 2008, he again served simultaneously as Chief Executive Officer. Dr Rolf Schäuble is also President of the Statistische Volkswirtschaftliche Gesellschaft (Society of Economics and Statistics) in Basel.
As a rule, the Committee holds three meetings a year. In the reporting year, it assessed the suitability of an external consultant for conducting a benchmark survey in an additional meeting.
5.7. Pension facilities Pension solutions / pension scheme Baloise provides several pension solutions that are designed differently to suit country-specific circumstances. There are different pension benefit facilities available in Switzerland for the employees of the insurance company and the bank.
Since 2006 members of the Board of Directors have been paid out 25 % of their annual remuneration in shares that are blocked for a period of three years. Similar to the Share Subscription Plan for management, members of the Corporate Executive Committee are also granted a 10 % discount on the market price. Members of the Corporate Executive Committee do not participate in any Employee Share Ownership Plan that is linked to achieving specific performance targets.
The following remuneration was distributed to the nine non-executive members of the Board in the reporting period: VORABDRUCK
Total Board of Directors (not including Chairman) 1,125,000 750,000 –/– 1,875,000 1,406,444 468,556
Due to contractual obligations (basic salary, incentives) CHF 3.6 million plus employer contributions were paid into the pension scheme for a former member of the Corporate Executive Committee during the reporting year.
Total Chairman of the Board of Directors and members of the Corporate Executive Committee
Prior to the start of the annual audit, the Audit Committee reviews its scope and proposes areas requiring special consideration. The Audit Committee then assesses the independence of the external auditors. It proposes to the Board of Directors that the external auditors be elected by the Annual General Meeting and makes recommendations as to the auditors’ fees. The Audit Committee reviews the external auditors’ fees annually. It also reviews the appropriateness of services provided by the external auditors outside the scope of their normal auditing activities. There is a written directive stipulating that material non-audit-related services require Group Internal Audit’s prior approval.
at individual meetings with analysts, investors and media representatives: ongoing cultivation of relationships with analysts, investors and the media.
Investor Relations Dr Carsten Stolz Head of Financial Relations Aeschengraben 21 CH-4002 Basel
Return on bonds (1st projected annual return – long-term return) 3.6 – 3.8 3.2 – 3.3
Cash and cash equivalents Cash and cash equivalents include cash in banks as well as cash equivalents such as call and time deposits or money market instruments, if these have an original maturity of less than 90 days.
Share / corporate capital as of in % 1 in % 1 Currency in million
Reduction through cancellation of treasury shares as per AGM resolution – 143.6 – 429.0
2 Depreciation of the Baloise share to fair value as of 31 December 2007.
Business volume The business volume includes premium income from the nonlife and life insurance business and from unit-linked life insurance policies during the reporting period. Due to the underlying accounting standards of the Baloise Group, the latter may not be disclosed as income in the consolidated financial statements.
Group life business Insurance policies taken out by companies or their Employee Benefit Units on behalf of their employees as part of their company pension plans.
New business margin Value of new business divided by the annual premium equivalent (APE).