In an exceptionally difficult year for the financial services sector, the Baloise posted earnings of CHF 404 million thanks to a first-class underwriting result.
In a move designed to optimize capital and reserves, the Baloise reduced the nominal value of its shares from CHF 9 to
CHF 1 last year and repaid CHF 343 million in all to its shareholders. The tradability of its shares was improved by means of a 1:10 split in nominal value.
With the appointment of Frank Schnewlin as CEO of the Baloise Group, the Board of
Holding registered shares are included in the Swiss Market Index (SMI) and are traded on virt-x under the ticker symbol
Total assets under management 58,012.0 55,645.1 - 4.1 in CHF m
Equity capital per share as of 12.31. in CHF 130.02* 97.36 - 25.1
Price-earnings ratio 15.9 20.1 * adjusted after 1:10 split of July 24, 2001
Number of staff of which Switzerland 3,835 3,944 2.8 of which other countries 4,590 4,679 1.9 1 adjusted for degree of employment in CHF m *Based on ARR accounting principles
The Baloise Group has successfully weathered an eventful 2001 to present you with another solid and, all in all, gratifying financial statement. Weak stock markets meant that it was impossible to match the previous year’s record result, but with net earnings of CHF 404 million – the third best result in its history – the Baloise still ranks as one of the most profitable financial service providers. This is mainly thanks to the healthy insurance business and the Group’s forward-looking approach to asset management. Despite the stock-market related contraction, the Baloise still has an excellent equity capitalization.
We also managed to boost premium income by 5.4 percent (in local currency) in the largely stagnant non-life market. Further, carefully-targeted streamlining of sales and administration processes once more resulted in an attractive combined ratio. The non-life sector again made a substantial contribution to our consolidated net profit.
The Baloise adopted a proactive approach to the difficult financial markets. Because we put long-term value added ahead of short-term earnings, we were deliberately cautious in relation to capital gains on shares. During the first half of the year, we proceeded with a planned and systematic reduction of our high equity weighting. In the second half of the year, we largely halted sales of equities in response to the “black autumn” and refrained from realizing further gains.
This will enable us to act at a more favorable time.
Important landmarks have been reached on the road to implementing our all-in-one financial services strategy. In Switzerland and Belgium, the merger of our insurance and banking operations is now well advanced. New private banking branches advise and assist individual clients from all over Switzerland using integrated financial services. The finance portal “balfolio.com” also offers advice on asset investment and securities trading.
In the Belgian market, under the brand name “Mercator”, we offer a wide range of services as an integrated insurance and banking group. In Germany,
With the creation of the asset management business unit, the centralization of the Group’s asset management is now far advanced and has passed its acid test. Our own investment funds, launched in the early part of 2001, complete our existing range of offerings.
With a view to continuing our growth strategy, we strengthened the Corporate Executive Committee with the appointment of Frank Schnewlin as our new
Dallo, Wolfgang Drunk and Martin Wenk. Urs Berger will remain in charge of Swiss operations. It is pleasing to achieve such a blend of continuity and innovation. This will allow me to concentrate fully on my duties as Chairman of the Board of Directors in future. Carl M. Meyer, our long-standing Chief Financial Officer, retired at the end of 2001. I would like to thank him for his sterling efforts.
The Baloise’s shares were not left unscathed by the sharp falls on the stock markets and lost around 14 percent of their value during the course of the year. However, lined up against the relevant indices and the other SMI-listed primary insurers, our stocks’ performance proved to be the best. Shortly before the end of the year, the Dutch-based Strategic Money Management Company B.V.
Services Group. At the beginning of 2002, the BZ Group increased its stake in the
Baloise to 20 percent, which is not surprising in light of our impressive performance.
The Board of Directors and the Corporate Executive Committee would like to thank all employees for their exemplary work. We are also grateful to our customers, investors and business partners whose trust has motivated us time and again to achieve outstanding results.
Whatever fate may have in store: we shape our destiny with our own hands.
Visible results last year of the growth strategy’s implementation include the opening of four new private banking branches belonging to Baloise
Bank SoBa in Switzerland, the merging of our Belgian business units with the insurance and banking group Mercator, and the systematic refocusing of Deutscher Ring as a life insurance and pension specialist.
Although the operational implementation of our strategy can differ considerably from one country to another, the thrust of all Group companies is based on a number of common strategic denominators: Trust in the integrity, competence and security of Baloise as a partner for toprate financial services has to be earned anew on a day-to-day basis. Brand value and corporate identity in all the markets we operate in are therefore given consistently high priority.
Existing insurance and pension plan holders are given preferential treatment when new products are launched.
The existing range of asset building instruments is to be consistently expanded while observing the following rule: financial products that cannot be provided better and at lower cost within the Group are bought in.
Baloise invests considerable resources in staff training and building up expertise among the various local distribution organizations. We try to optimize the combination of personal client relations and online services.
Management corporate unit, which also manages the Group companies’ security portfolios and is responsible for the strategy, investment structure and selection of securities for the investment funds managed by Baloise Fund Invest.
A solid basis of trust between ourselves and our customers and brokers is of foremost importance to us. As part of this basis, we need to be recognized as a dynamic company with strong roots in the local markets. On the operational level, the strategy must therefore be implemented flexibly and with sufficient sensitivity for local market conditions.
As a leading life and non-life insurer, Baloise maintains an impressive portfolio of long-term customers. We do not just present them with an attractive array of financial products to choose from. Our key focus is on offering comprehensive advisory services in insurance, pension and asset building matters with a carefully balanced mix of personal contact and online options.
Baloise’s insurance and pension business is supplemented by the banking products of Baloise Bank SoBa and Baloise’s own investment funds. The result is a range of truly integrated financial services. In the past year, we added four new private banking branches, one each in Basel, Bern, St. Gallen and Zurich, to the three existing ones in the canton of Solothurn. Around 50 specialists look after the needs of individuals from the upper income and asset sectors. The roughly 1,000-strong Baloise sales staff in Switzerland can refer their clients to
For a financial service relationship to be truly beneficial for customers,
Baloise Bank SoBa offers tailor-made, long-term financial planning that takes into account every aspect of insurance, provision for the future and asset building.
In Belgium, insurance and pension products are distributed through independent professional brokers. They provide customer service and settle assignments directly with the financial service providers. Recently, however, competition has
We actively support our brokers in their competition with banks. The acquisition of HBK-Spaarbank in mid 2000 has enhanced our range of pension provision and asset formation products. By merging the bank with our insurance company in autumn 2001, we have become a market force with a single brand and corporate identity using the well-established and catchy name “Mercator”. The product range has been streamlined and processes have become smoother. Our partners on the market appreciate a wide choice of products from a single source, which considerably reduces the organizational and administrative workload. Moreover, with our newly-acquired banking staff we can provide our brokers with even more comprehensive support.
To enhance the quality of their advisory services, our roughly 1,000 customer advisors in Germany have all been equipped with v.i.v.a., a visual, interactive life insurance and pension assistant. Designed as a virtual library of notebookbased multimedia presentation and product modules, v.i.v.a. is currently being used in contacts with around 175,000 clients. The aim is to achieve a sustained improvement in the quality of customer services and in the retention rate, the emphasis being on customized solutions and proactive, lifelong client relations.
Deutscher Ring concentrates on life insurance and pension solutions for individuals in the lower and middle income segments.
Let me! Let me! There are phases in life when we want to accomplish everything on our own.
Call on March 26: self-employed man, good income, homeowner, some savings, neither time nor know-how to manage his finances himself. Is looking for professional support. Meeting: March 28, 4:30 pm.
“It’s good that you’re not looking for quick-fire solutions. Before we come up with some suggestions, we would like to go over a number of issues with you. We would, for instance, like to know something about your mid- and long-term targets in life, your professional and family circumstances. In that way we’ll gain as detailed a picture as possible of your financial situation and possibilities, present and future. As you can see, we are not rushing you into signing a contract. Our approach is to offer you competent and comprehensive advice and to support you not just in the present instance, but over a long period of time.
Within the framework of the masterplan, you will be able to decide for yourself what pension products and investment instruments you prefer.
In 2001, the financial services industry had to pass some tough tests of strength. Against this background, the Baloise Group posted organic premium growth of 7.8 percent (in local currency), after adjustment for the special effect arising from the purchase of a life portfolio, as well as changes in the scope of consolidation. The impressive underwriting result forms the basis for the consolidated net profit after tax and minority interests of CHF 404 million. Despite the reduction in unrealized gains caused by the massive price falls on the stock markets, the
As a result of the sale of the entire policy portfolio of Bâloise España at the end of September 2001, the latter’s results only had an impact on the Group’s accounts for the first nine months of the year. Moreover, in drawing comparisons with the previous year it needs to be remembered that Amazon Kaskoversicherung
(taken over on October 1, 2000), Mercator Bank in Belgium and Baloise Bank SoBa in Switzerland have now been included in the scope of consolidation for a full year for the first time. In 2000, the integration of the Sarasura collective foundation had a one-off impact on premium volumes to the amount of CHF 400 million.
In 2001 the Baloise Group reported one of the best results in its history, with net earnings of CHF 404 million. Even so, the result fell short of the previous year’s record figure by 36.3 percent. Because of the worldwide downturn on the capital markets, the Group has deliberately held back from realizing capital gains on shares. In the first half of the year, it began to progressively reduce its equity holdings as planned, but in light of the decidedly less than satisfactory perfor-
4.0 billion. Compared with the previous year, this represents an increase of 9.3 percent (again in local currencies and adjusted for special effects) which is largely attributable to brisk demand in the individual life business. The non-life sector also made further gains, despite the stagnant state of the market as a whole. With a premium volume of CHF 2.6 billion, the year-back result was surpassed by 5.4 percent (organic and in local currency). The combined ratio (claims incurred, plus expenses, plus dividends to policyholders, as a percentage of premium income)
Despite major investments in the expansion of the private banking sector, the banking business in Switzerland made a significant contribution to earnings.
All market units are benefiting from the expertise of the new business unit
The previous year’s tax expense having been reduced by special effects, the tax burden was once again within the long-term average at 22.4 percent. At the same time, current tax came to CHF 93 million under local law, while deferred tax in accordance with IAS amounted to CHF 24 million.
Baloise Switzerland is in excellent shape, as can be seen from its performance figures for 2001, which are impressive in every respect. Premium volume advanced organically by 13.9 percent in the life sector and by 3.2 percent in the non-life sector. The result for insurance operations set a new record. The planned structures and processes for one-stop financial services were set up, and the strong position in the Swiss market was further consolidated.
During the year under review, the Baloise continued to give high priority to the swift and systematic expansion of its sales structures. In parallel with further expansion of existing electronic sales channels and the preparation of standardized,
With four new private banking branches, the launch of the finance portal balfolio. com and the introduction of the Baloise Fund Invest range of funds, the
In the non-life sector, premium volume rose by 3.2 percent from CHF 1,100 million to CHF 1,135 million. This growth, which is once again above the market average, is partly attributable to a further increase in policy numbers in the automobile and property insurance business. It is also partly due to the drive to improve service to existing customers, which is increasingly paying off. In addition, the introduction of more attractive hybrid products offering sector-specific, comprehensive insurance solutions for small and medium-sized businesses gave fresh impetus to corporate business.
In the non-life business, the drive to improve services to existing customers is clearly paying off.
Baloise Bank SoBa’s customers are entitled to personal advice and provided online access to the entire range of products and services.
In fiscal 2001, the Baloise was largely spared the consequences of natural disasters or other major loss events. Despite an expensive liability case, the loss ratio was slightly lower overall. In general, while the number of claims declined, costs per claim increased.
Thanks to the lower loss ratio, continuing strict cost management, an underwriting policy geared to risk and extremely careful management of the policy portfolio, it proved possible to improve the combined ratio (gross) to 98.7 percent. This once again puts the Baloise in a leading position by comparison with the
Single-premium business and annual premiums for individual life policies were some of the real growth drivers during the year under review. Annuity insurance policies in particular enjoyed brisk demand, which was further boosted by the introduction of new premium rates.
Internet banking service. Baloise Bank SoBa’s full-service banking business in the canton of Solothurn has undergone further restructuring and streamlining.
In light of the unfavorable stock market conditions, with income from brokerage fees and fund sales in decline, Baloise Bank SoBa posted a result in accordance to expectations with a contribution to profits (before tax) of CHF 22 million.
For the German insurance sector, 2001 was dominated by a largely stagnant economy, correspondingly low increases in real incomes, and pension reform decisions with key implications for future tax and social welfare policy. The market was characterized by a further intensification of premium-rate competition.
have only been granted for 2002. As a result, the 2001 life business was marked by something of a wait-and-see attitude on the part of many potential customers.
Deutscher Ring and the Baloise branch in Bad Homburg, have made clear progress in the implementation of their market strategies. Major parts of Deutscher Ring’s non-life portfolio were transferred to the Baloise branch so that, since April 1, 2002, the whole of the Group’s automobile and commercial property insurance business in Germany has been handled from Bad Homburg. With a view to these switches, the necessary adjustments to the processes and infrastructure were made during the year under review.
Gross premium income CHF m 1,784.9 1,737.7 - 2.6 of which life CHF m 1,100.0 1,019.3 - 7.3 of which non-life CHF m 684.9 718.4 4.9
impetus. By contrast, the non-life sector experienced noticeable growth, thanks mainly to a modest increase in premiums for automobile insurance policies.
In the non-life business, the overall result before tax remained virtually constant in comparison with the previous year and once again made a substantial contribution to the Group result. In the life sector, the pretax profit is down slightly because of the unsatisfactory trend on the financial markets.
Fiscal 2001 saw the Baloise branch in Bad Homburg move significantly closer to its growth targets. The non-life business posted double-digit growth rates in all segments other than accident insurance, leading to a rise in premiums totaling 19.7 percent (in local currency). The loss ratio also edged upwards, but was kept within reasonable limits thanks to targeted measures to restructure individual policy portfolios.
The new government-backed private pension is naturally of major importance at the Baloise branch in Bad Homburg. By developing an attractive product, efficient management and targeted support for sales, the Baloise is systematically preparing to exploit this opportunity to expand its portfolio. The
In Belgian life business, traditional insurance products in particular experienced a distinct rise in demand.
HBK-Spaarbank (taken over in 2000) and Mercator & Noordstar were rebranded. Both now operate under the well established and easily remembered umbrella brand name “Mercator”.
Gross premium income CHF m 693.9 726.8 4.7 of which life CHF m 140.4 163.7 16.6 of which non-life CHF m 553.5 563.1 1.7
Mercator Insurance was able to up its premium income, under difficult market conditions, by 3.9 percent in the non-life sector (local currency) and 5.8 percent in the life sector, as a result of the continuing involvement of brokers in the company’s processes and thanks to over-the-counter sales of its own products in banks.
The advantages of integrating banking and insurance have already begun to show. Mercator Bank is now selling insurance products over the counter in its branches and, at the same time, has made its banking products available to a wider circle of customers through the established sales channels of Mercator
The medium-term outlook in the Austrian financial services sector improved markedly.
Bâloise Assurances continued to benefit from the favorable business and tax environment in Luxembourg’s internationally oriented finance and insurance markets.
In the life business, it increased its premiums by a higher-than-average 47.9 percent (in local currency) and was again able to push up its market share. Another indication of this extraordinary sales performance is the massive rise in sales of unit-linked products. Under IAS rules, by far the greater proportion of the premiums generated by these products are in the nature of investments and are therefore not recorded as insurance premiums.
In the non-life sector, premium income rose by 6.1 percent (in local currency ), partly because of an increase in automobile insurance premiums. The gratifying premium development was accompanied by a continuing low loss ratio.
Gross premium income CHF m 501.1 454.3 - 9.3 of which life CHF m 44.7 38.8 - 13.2 of which non-life CHF m 437.2 415.5 - 5.0
In many respects, the Austrian financial services market has overcome its stagnation and is once again showing clear growth trends. After declining for three years, earnings also appear to be recovering slightly, which definitely improves the medium-term outlook.
The Baloise in Austria raised its non-life premium income by 2.2 percent
(in local currency) and has reported a very positive claims result. By contrast, premium development in the life sector fell back slightly as a result of a delay in the launch of a new pension product.
At the end of September 2001, the Group sold the entire policy portfolio of Bâloise
Over the past financial year, the Baloise achieved a performance of -1.2 percent on its investment portfolio. The causes lie predominantly in the declining prices on all major international stock markets since the beginning of 2001.
Already before the low point on the stock markets in September 2001, the equity component had been lowered to slightly more than 20 percent. At the end of the year, it stood at 19.8 percent. The equity investments of the Baloise underwent a decline in value of 21.1 percent.
Other short-term capital investments, cash and cash equivalents 1,391.1 1,583.4 13.8 in CHF m
At 5.6 percent, investment property turned in as strong a performance as ever. The proportion of investments accounted for by investment property was increased to around 10 percent.
Against the background of consistently low loan losses, mortgages and loans also generated a stable return of 4.5 percent.
The biggest challenges are posed by the major customer risks insured, by an accumulation of risks in the event of natural disasters and by exchange rate, interest rate and counterparty risks in relation to investments.
In fiscal 2001, the main objectives were to integrate the banks acquired in 2000 into the risk management system and improve the asset liability management for life insurance policies.
Consistent streamlining of its equity structure enabled the Baloise to pay back roughly CHF 1.2 billion to its shareholders over the past five years.
Over the period under review, the Baloise invested roughly CHF 230 million in strategic IT projects and in running and maintaining its IT
Deutscher Ring equipped its customer advisors with integrated links to its back office systems from their laptops, enabling them to generate policies on site with customers. In conjunction with the newly introduced electronic document management, this led to a significant increase in efficiency.
This and other initiatives to improve operating efficiency were accompanied by numerous IT projects at Group level – including first and foremost the development of a standard asset management solution to be introduced in 2002.
software and Group-wide coordinated purchasing of hardware and software also gave rise to considerable synergies.
The “buy-before-make” strategy we have been systematically applying for some years again led to intensive cooperation with external software vendors and developers. The number of IT staff employed throughout the Group rose to more than 600.
In Belgium, the Baloise subsidiary Mercator & Noordstar officially changed its name to the more easily communicable Mercator in November 2001, with HBK-Spaarbank (acquired the year before) assuming the name Mercator Bank.
Mercator was already a well-established brand in the Flemish market; the new visual identity meant that the brand recognition was again considerably enhanced.
A convincing market identity must go hand in hand with widely accepted business practice. As a major company we share responsibility for economic, social and ecological developments. In the mid-1990s, the Baloise launched its environment -related activities, which have been consistently expanded ever since.
Baloise Switzerland published for the first time an environmental report containing the company’s environmental mission statement and its environmental targets.
Woods”, the Baloise supports a project for the sustainable development of tropical rain forests.
Another example of the Baloise’s environmental focus is the construction of buildings with minimal energy consumption. In Stäfa (Switzerland), three apartment blocks – with a total of 22 apartments – that meet these minimum energy standards are being built under our guidance. They are scheduled for completion by mid-2002.
We, too, know this and realize how important it is to have someone who at least looks after the tangible values.
We also expect this level of service from our partners. That’s why we market a lot of Mercator’s products and services. This partnership offers us numerous advantages and makes our work a lot more straightforward. If, for example, you wanted to put your savings in an investment fund, your money would actually be managed by Mercator or even by its parent company in
Best of luck with your essay. And don’t forget to visit our website. Or Mercator’s. Nowadays, we handle most of our admin with Mercator through the Internet.
Daddy, you were already in bed when I came home yesterday. Need to write an essay about your job by tomorrow! Could you brief me during breakfast? Merci –
“Why is it you always come with these requests at the very last moment? But we can talk about that another time. I have to be off in twenty minutes, so we don’t have much time. You can click into the Internet afterwards if you need more details.
As you know, I work as a customer advisor at a medium-sized brokerage firm. We sell insurance products of all sorts, from motor policies to pensions. We also offer clients ways to invest money at favorable conditions, thus helping them to save efficiently. It’s almost like a combination of insurance and banking. The difference is that we’re not the ones who manage peoples accounts or pay for a car repair after an accident. Our partners look after that side of the business. The Mercator
What we mean by “market”? Well, our main activity is advising individuals and small companies in all their insurance and money matters, and suggesting appropriate products and services. For instance, I might be sitting opposite a young photographer who wants to open a studio of her own and would like to learn from us what forms of insurance coverage would be best suited to her enterprise. Or a customer who has inherited some money calls us because he needs advice on how to invest this money safely while paying as little tax as possible. Or maybe somebody whose car insurance we organized simply needs our help after an accident.
Jean-Marc Rapp, Lausanne 2004 * also CEO and Managing Director until February 28, 2002
Corporate Executive Commitee * since March 1, 2002 1 ad interim
The more I think about it, the more I like the line of solutions you suggest. I hope my husband will agree. I’ll discuss the whole matter with him as soon as possible.
“Darling, we really have to take these insurance and pension matters in hand now. In two months time, I’ll stop working at the hospital and who knows how many days we’ll have left then before the baby arrives. And there’s still the problem of my parents’ house.
I had a talk with this Mr. W. yesterday. You know, the financial advisor from the Baloise I told you about. He made some helpful recommendations for our pension arrangements. And he also came up with options that should help us realize our dream as soon and with as little risk as possible. Yes, of course I told him about it. How could he possibly give us useful advice if he doesn’t know what we really want?
Dad left me. All this can be streamlined and – what’s the word – optimized. For tax reasons too. This would pay off all the more if we bought that house. And at the end of the day, there’d be much less paperwork for us.
Of course you can go on with your stock exchange trades! The point is that we have to coordinate our money matters somehow. This mix of personal advice and services on the one hand and various online services on the other, all from the one source, sounded persuasive. That’s why I would like us to go round to the private banking branch of Baloise Bank SoBa in the next few days and have another talk with W. The specialists there can give us in-depth advice and work out a coherent financial plan tailored to our needs. I know it would cost something, but we would not be stuck with any obligations. I think this is one reason why those guys go
Before taking aim, we have to grasp the prevailing conditions. Yet sometimes, when the moment is right, we can dispense with analytical thinking and rely on our intuition.
Switzerland. The focus is on business risks, companies’ reputations and corporate responsibility. As a value-oriented company, the Baloise
The decisive factor is the transparency of the arrangements in line with the principle “comply or explain”.
The shares are unitary shares (no preference or voting right shares). The registered shares are subject to transfer restrictions: under paragraph 5 of the Articles of
As a value-oriented company, the Baloise recognizes the importance of corporate governance.
The company has not issued any options on registered shares. However, third parties have issued numerous options on our shares.
The apportionment of powers and duties between the Board of Directors and the
The Board of Directors consists of twelve members who – with the exception of the Chairman (until February 28, 2002) – do not exercise any executive powers in the company. Board members’ terms of office are staggered in such a way that one third stand for re-election each year. Members are elected for a threeyear term of office, the rules specify an age limit of 70 and the average age is
The Board of Directors has set up a number of Board Committees. The
Chairman’s Committee, consisting of the Chairman, Vice Chairman and two further members, engages in preliminary discussion of important business, particularly where issues relating to strategy or personnel are involved. Once a year, the
Chairman’s Committee meets as the Investment Committee and defines the strategic asset allocation for investment operations.
Directors and the Corporate Executive Committee. At its meeting in March 2002, the Board of Directors decided to set up an Audit Committee.
In 2001, the Board of Directors held six meetings and additional meetings were held by the Committees.
The Compensation Committee lays down the compensation for the Board of Directors and the Corporate Executive Committee.
Committee consists of a fixed basic salary, plus an incentive dependent on the achievement of corporate and personal targets. 50 percent of the incentive is granted in the form of options on Baloise registered shares; for the remaining 50 percent a choice is offered (cash compensation, further options or Baloise registered shares). The options are issued by independent third parties under the usual market conditions and are listed on the stock exchange. From the time they are allocated, they are subject to a two-year lock-in period. If within the freely available part of his incentive (50 percent) a member of the Corporate Executive Committee decides to take shares, these will be acquired from the company at market value and will be subject to a three-year lock-in period from the time of issue.
As of December 31, 2001, the total shareholding of the members of the
Up to eight weeks ahead of the General Meeting, shareholders eligible under the law and the Articles of Incorporation can request that items be included on the agenda for debate. The company publishes this time limit in advance. Over the next four years, the General Meeting will take place on the following dates: Tuesday, May 14, 2002; Friday, May 16, 2003; Friday, May 14, 2004; Wednesday,
Shareholders who do not attend the General Meeting in person may issue powers of attorney to the independent proxy, representatives of the executive bodies or other shareholders to exercise their voting rights. However, no shareholder may command more than 20 percent of the votes represented at the
General Meeting. Participation is open to shareholders entered with voting rights in the share register on the reference date. The reference date is a few days before the meeting and will be announced in the invitation.
The dividend is adjusted each year to the annual result of the Baloise
This basic stance is a clear reflection of our partnership-based approach. It enables the Baloise to promote an understanding of its aims, strategy and business operations and to ensure a high level of information available on the company.
At special events and road shows we engage in dialogue with investors and media representatives.
The statutory auditors and the auditors of the consolidated financial statements are appointed by the General Meeting for a one-year term of office.
By regularly providing comprehensive and open information, the Baloise is able to promote understanding for its goals and strategy.
The strength of a relationship is not revealed by any magnificence of gesture, but by a sense of proportion and a feeling for the right balance of intensity, distance and proximity.
Looking forward to our meeting. Denise and the children are fine. Job-wise, I definitely need a change of scenery.
Wherever I call, I meet with great interest. And you know yourself that once you’ve got a foot in the door, you can prove your worth by offering your customer in-depth advice and sound financial coverage. We certainly have the corresponding products and services. What people need is someone who knows his way round this field and can offer not just general, but to-the-point advice.
Pythagoras mused about the sound made by the stars and planets. He said this sound was so deafening that we no longer heard it. The noises of our communication age, apparently, have not yet reached that level. That is why we must shout to be heard. Or else have a partner who understands us even when we whisper.
Baloise’s share price was not spared in the overall market downturn, dropping by 14 percent in the course of the year. Yet benchmarked against the Swiss
The stock market year 2001 was marked by high volatility and thus high risks for investors. The Baloise Group systematically reduced its overweighted share holdings in the first half of the year. After that, in view of the radically changed situation on the stock markets, we curtailed the selling and thus the realization of capital gains to avoid long-term loss of value. Under these circumstances, the net earnings figure of CHF 404 million – the third highest in the history of the Baloise – is a very gratifying result.
Shortly before the end of the year, the Dutch firm Strategic Money
Zurich Financial Services. In early 2002, the Swiss BZ Group raised its stake in the
Baloise to 20.1 percent – not surprising in view of Baloise’s strong performance.
Swiss Market Index (SMI) 163 2 adjusted after 1:10 split of July 24, 2001
Net earnings per Bâloise-Holding share1 CHF 4.3 6.1 9.1 11.2 7.3
Number of shares entitled to dividend Shares 61,285,680 58,620,000 58,620,000 56,704,000 55,307,150
Daily volume traded shares CHF m 20 40 23 24.5 15.4
Ratio, market capitalization/consolidated capital and reserves Percent 115.3 157.4 98.2 136.9 157.2
All figures as per calendar year or December 31, respectively 1 See Notes to the Consolidated Financial Statements, section 25 5 Adjusted due to share split 2 Number of shares ranking for dividend at December 31 6 Additional free put options 3 Average of beginning and year-end values 7 Based on ARR accounting principles 4 To be proposed to the Annual General Meeting
55Annual Report 2001 | Bâloise-Holding in by external equity providers and dividends paid to shareholders. The Baloise
Group’s IRR for 2001 amounts to -21.2 percent, reflecting the negative overall trend on the capital markets.
Total Share of Significant shareholders at March 31, 2001 holding voting rights
Claims incurred including processing costs (non-life) 15 - 1,727.9 - 1,785.0
Earnings per share (identical values for “basic” and “diluted”) 25 11.25 7.31 in CHF
In accordance with the accounting policies of the Baloise Group, investment-type premiums are not included in gross premiums and policy fees.
Present value of profits from insurance contracts acquired 12 – –
Cash flow from investing activities (net) - 2,968.6 - 851.8 of which from joint ventures 58.3 66.1 in CHF m
Cash flow from financing activities (net) 1,401.9 - 538.8 of which from joint ventures 1.7 - 50.0
Less movement on: Policyholder surplus – – – 183.6 – 183.6
Deferred acquisition costs charged to equity – – – 150.3 – 150.3
Movement on unrealized gains and losses on investments (net) – – – - 399.8 – - 399.8
Consolidated net profit for the year – – – – 634.4 634.4
Share capital Capital reserves treasury stock and losses (net) profit and reserves
Movement on unrealized gains and losses on investments (gross) – – – - 2,845.1 – - 2,845.1
Movement on unrealized gains and losses on investments (net) – – – - 1,969.0 – - 1,969.0
Premiums written and policy fees for own account 3,851.4 3,819.1 1,532.1 1,520.5
Claims and benefits paid (life) - 1,795.3 - 1,961.8 - 856.3 - 826.2
Surplus and profit allocations to policyholders - 284.5 - 107.5 - 578.6 - 55.5
Net profit/loss by region 432.8 364.7 29.3 34.3 in CHF m
Liabilities by geographical segment 28,925.5 28,482.8 15,036.5 14,440.1 of which technical provisions 19,858.4 20,907.4 12,724.1 12,186.4
Cash flow from investing activities (net) - 1,382.4 17.1 - 209.1 - 84.0
Change in unearned premiums reserves for own account 15.6 7.2 – –
Premiums earned and policy fees for own account 2,460.0 2,419.3 4,018.5 4,013.2
Income from other services 21.3 1.7 33.9 27.4 of which between business segments - 202.7 - 39.4 95.5 - 24.1 of which income from associates 2.0 1.8 5.8 3.5
Claims incurred including processing costs (non-life) - 1,846.5 - 1,794.2 – –
Surplus and profit allocations to policyholders - 54.3 - 13.3 - 858.4 - 164.3
Administrative and other operating expenses - 567.2 - 515.0 - 393.5 - 347.1
Amortization of intangible assets and depreciation of tangible non-current assets - 40.7 - 52.4 - 37.9 - 33.7
Net profit/loss by business segment 450.2 229.3 257.1 236.7 in CHF m
In the Annual Report 2000, three reinsurance contracts were registered under nonlife instead of life. In the 2001 statement, these contracts have been allocated to life. Since this transfer has no influence at all on the equity or the net profit of the
Group and only marginal influence on the segment results, no restatement of the previous year’s figures has been drawn up.
Acquisition of real estate, equipment and furnishings and intangible assets for own use 30.3 28.1 - 10.2 13.3 in CHF m
Information as for the segment reports. This means that, in line with IAS requirements, Group-internal transactions between the segments are not eliminated. The previous year’s figures of the technical income statement have been adjusted accordingly.
Total underwriting result for own account - 154.4 - 179.7 - 1,530.8 - 864.0
Realized gains and losses on investments (net) 389.5 222.0 475.2 - 71.4
Other non-technical income and expenses - 62.0 - 30.8 - 214.5 - 146.7
Embedded value at January 1 4,949.5 of which value of insurance in force 1,334.0 of which adjusted capital and reserves 3,615.5
Sale of fund units incl. fund units for unit-linked life insurance 834.0 691.4 in CHF m
The Baloise Group operates solely in Europe. It comprises 13 insurance companies, which provide almost all types of life and non-life insurance. The holding company is Bâloise-Holding, a Swiss stock corporation (Aktiengesellschaft) which has its registered office in Basel, Switzerland. The shares of Bâloise-Holding are quoted on SWX Swiss Exchange. Its subsidiaries operate in Switzerland, Germany,
The consolidated financial statements of the Baloise Group are prepared on a historical cost basis, taking into account adjustments resulting from regular reassessments of the fair market value of certain investments, and are established in accordance with the International Accounting Standards (IAS), which comply with Swiss legal requirements. As the International Accounting Standards do not currently contain any insurance-specific guidelines, insurance business has been valued on the basis of the US “Generally Accepted Accounting
Valuation, and IAS 40 – Investment Property (introduced on January 1, 2001), have had the following consequences for the Baloise Group: IAS 39 – Financial Instruments: Statement and Valuation. The standard regulates in detail the way in which financial instruments are to be accounted for.
As a result of the introduction of these two new standards, a gross sum of CHF 926.0 m from unrealized gains and losses has been reallocated to
Accumulated profit. After taking into account the amortization of acquisition costs, policyholder bonuses and deferred tax, the net sum reallocated comes to
Less part of: Shares of deferred acquisition costs in CHF m
Baloise Group has over 50 percent of the voting rights, whether directly or indirectly, or exercises control over it. All intragroup transactions and profits and losses arising therefrom are eliminated.
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity which is subject to joint control. Deutscher
Ring Beteiligungsholding is a joint venture in which the Baloise Group has a direct 65 percent interest. The remaining 35 percent are held by Deutscher Ring Krankenversicherungsverein, a mutual insurance company. The contractual arrangements are such that the majority shareholder does not have overall control. These companies are consolidated on a proportionate basis, therefore the Baloise Group reports only its share of assets, liabilities, income and expenses.
Foreign currency translation: The financial statements of all business units which were not originally prepared in CHF have been translated at year-end rates (for balance sheet figures excluding goodwill) or at average rates for the year
(for the income statement). The total exchange differences arising are taken directly to equity.
The business activities of the Baloise Group include the issuing of insurance policies, as a result of which the Group incurs financial liabilities and assumes guarantees. To ensure that it is in a position to meet its financial liabilities, the Baloise
The following criteria are used to classify financial assets: Financial assets which were acquired with the purpose of realizing a short-term gain by taking advantage of fluctuations in market price are shown under the Held for trading heading. Financial assets which are held for an indefinite period of time and may be sold at any time to improve liquidity or to react to changes in market conditions are shown as Available for sale. Financial assets with a fixed maturity date are shown under the heading Held to maturity, provided the Baloise Group has the opportunity and intention of holding them until their maturity date. Investments are classified under one of these headings when they are first recorded in the books. The classification is then reviewed at year-end to ensure that it is still appropriate.
Loans, policy loans and similar financial assets issued by the Baloise
Group are shown under the heading Originated by the Group, unless they are held in the trading portfolio.
An adjustment is made for impairment if the present value of expected future cash flows discounted at the financial instrument’s original effective interest rate, including the effect of any hedging transactions, is lower than the book value and this situation is not expected to be temporary.
Changes in the value of financial assets under Held for trading are recognized as realized book profits/losses in the income statement in the period in which they arise. Financial assets under Available for sale are revalued at their market value, and unrealized gains and losses are taken to equity. In the case of monetary assets classified as Available for sale, any foreign currency revaluation is credited to income. For life insurance companies, deductions are made from the unrealized gains and losses in view of those amounts which will be used in future to amortize acquisition costs and to pay bonuses and dividends to policyholders.
Interest income from fixed-interest investments which have been written down is recognized when it is received.
Investment property is shown at fair market value. The fair value of holdings is derived principally from future cash flows, using mathematical calculations based on similar transactions. In exceptional cases, external valuation reports are obtained.
All derivatives are recorded in the balance sheet at their market value.
When the contract is concluded, the derivative is classified either as a hedging instrument against the market value of an asset or a liability (fair value hedge), as a hedge against future transactions (cash flow hedge) or as a trading instrument.
Derivatives which do not fulfill IAS requirements for hedging transactions are treated as trading instruments, even if they have a hedging function according to the
Company acquisitions are accounted for using the purchase method. Under this method, the purchase price is compared on the date of acquisition with the fair values of the assets and liabilities acquired, and the balance is accounted for as goodwill. Goodwill acquired before 1995 was directly offset against equity. Goodwill relating to subsidiaries which do not prepare their financial statements in
lease and disclosed as a tangible non-current asset. Each lease payment comprises a depreciation expense for the asset and a finance expense. The depreciation expense is deducted from the liability for the leased asset, which is shown under
Financial Accounting Standards: FAS 60, FAS 97 and FAS 120. The accounting principles (e.g. in respect of interest or mortality) vary depending on the country, product and year of acquisition and take country-specific empirical values into consideration. Unearned premiums and provisions for final policyholder bonuses are included in the actuarial reserve.
Financial assets classified as Available for sale are stated at market value. Changes in the value of these investments are treated as unrealized gains and losses and taken to equity. Amounts relating to the future amortization of acquisition costs and future policyholder bonuses are deducted from these unrealized
gains and losses. Local statutory regulations and the provisions set out in contracts and company byelaws are authoritative in determining the share of policyholder bonuses. Companies operating in Germany and Austria are required to use approximately 90 percent of the unrealized gains and losses arising from investments available for sale for the policyholder bonuses. The transfer between accounts has no effect on the income statement.
Gross premiums written and policy fees are recognized in the fiscal year in which they fall due. They include the amount required to cover the insurance risk and any loading. Any part of the premium which relates to future fiscal years is deferred under the contract and is included in the unearned premiums reserves in the balance sheet, together with any provisions for premium shortfalls relating to the fiscal year. Premiums which do relate to the fiscal year are referred to as premiums earned. This figure comprises premiums written and the change in the unearned premiums reserves.
Provisions for claims outstanding and provisions for the associated claims processing costs are set up for all losses which have occurred before the end of the fiscal year, whether or not these have been notified to the Baloise
The whole process of projecting the future can never entirely eliminate the uncertainties inherent in future developments. Therefore future developments may well be different to those projected. The provisions established in a particular year are systematically reviewed, which means that variances can be controlled.
Payments made during the fiscal year and the change in the relevant provisions combine to give the figure referred to in the income statement as Surplus and profit allocations to policyholders.
Deferred acquisition costs: All administrative costs which are directly attributable to the acquisition of new insurance contracts and the renewal of existing contracts are deferred. Then they are charged to the income statement over the expected term of the insurance contract. The deferred costs are constantly reviewed for recoverability. The calculations take into account the actuarial principles and allocated investment income.
Receivables and payables from deposit accounting contracts are recognized mainly using the interest method. The effective interest rate is calculated on the basis of cash flows which have already occurred or are expected in the future. Otherwise, the insurance coverage financed by the deposit is amortized over the expected term of the deposit. Deposits are included in Investments and deposits arising from reinsurance business, while liabilities are included in
Own shares (treasury stock) held by Bâloise-Holding or by its subsidiaries are shown at cost in the consolidated financial statements as a deduction from Capital and reserves. The shares are not restated at their current market value. When the shares are sold, the difference between cost and selling price is adjusted under
The convertible loan issued by Baloise Finance Jersey, which confers the right to subscribe for shares in a non-Group company, consists of a liability and an embedded option. When the loan is issued, the market value of the embedded option is determined and shown separately as a derivative financial instrument.
Financial (non-technical) provisions are recognized when the Baloise has a present obligation (legal or de facto), when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate can be made of the amount of the obligation. The amount of the provision is based on the best estimate of possible outcomes. If no reliable estimate can be made of the liability, it is disclosed as a contingent liability.
The provision for deferred tax in the consolidated financial statements is calculated under the liability method, i.e. based on current or future expected tax rates.
(such as wages), benefits due in the long term (such as anniversary payments) and benefits upon termination of employment (such as severance pay and benefits from redundancy schemes).
Because of the amounts involved, the following benefits can be particularly significant: Postemployment benefits: The main retirement benefits are pensions and insurance contributions assumed by the employer. The benefits are paid when the employee ceases to be employed and are financed during the period in which the employee is working. The retirement pensions in the Baloise Group are predominantly defined benefit plans. The present value of the defined benefit obligation is discounted using the Projected Unit Credit Method (accrued benefit method pro-rated on service). Plan assets which match the benefits payable are only recognized if they are brought into an entity which is legally separate from the employer, e.g. a pension fund. The plan assets are stated at market value. If a difference arises between the assets and liabilities when IAS 19 is used, this is shown as an asset or liability in the consolidated balance sheet. An asset is only recognized to the extent that the Baloise controls a resource which may be used to reduce future contributions or improve future benefits, but this resource cannot be returned to the employer.
Shares: The Baloise Employee Trust set up in 1989 gives the employees of various Group companies the opportunity, subject to the rules issued by the
Other liabilities are recognized and stated at amortized cost, which is generally the same as nominal value.
Fixed-interest securities: The fair value is generally based on quoted prices. If quoted prices are not available, the price is determined by independent valuations or by comparing the market prices of similar financial instruments.
Mortgage loans, policy loans and other loans: The fair values are determined by discounting the cash flows, using the current interest rate applied by the
Other financial assets: The fair value is generally a quoted market price.
Liabilities from banking business and loans: The fair values are determined by discounting the cash flows, using the current interest rate payable by the
Baloise Group for similar financial instruments with similar periods of time to maturity.
The carrying values of assets are reviewed on a regular basis for recoverability. An impairment loss arises if the recoverable amount of an asset is less than its carrying amount. The recoverable amount is the higher of an asset’s net selling price
(the estimated amount obtainable from the sale of an asset less incremental costs directly attributable to the disposal of the asset) and an asset’s value in use (the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life). The estimated future cash flows are based on reasonable assumptions about the economic conditions that will exist over the remaining useful life of the asset and on cash flow projections and budgets/forecasts approved by the Corporate Executive Committee. Permanent diminutions in value are recognized in the income statement.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to set off the recognized amounts and the Baloise Group intends to realize the asset and settle the liability simultaneously.
Exchange differences arising from transactions in foreign currencies included in the consolidated income statement resulted in a loss of CHF 27.7 m in the 2001 fiscal year (2000: loss of CHF 26.8 m). This also comprises a foreign exchange loss of CHF 57.0 million resulting from monetary investments classified as Available for sale.
The Baloise Group acquired the following participating interests in the year 2000: 67 percent in HBK-Spaarbank (now called Mercator Bank) in Antwerp on July 1, 2000, a holding subsequently increased to 100 percent by public tender offer; 100 percent of Baloise Bank SoBa in Solothurn (Switzerland) on July 1, 2000; and the remaining 75 percent of Amazon Insurance in Antwerp on October 1, 2000.
The insurance portfolio of the Spanish Group company Bâloise (España) Seguros y
Reaseguros was taken over by the Fortis Group per September 30, 2001. The gross premiums for the first nine months of 2001 came to CHF 72.7 million (2000, 12 months: CHF 107.0 million). The insurance portfolio was sold at intrinsic value. The guarantees granted to the buyer are fully covered by reinsurance contracts. The intention is to liquidate the company.
Baloise Bank SoBa, an all-purpose bank operating in Switzerland, Mercator Bank in Belgium, which is involved in all types of savings business, principally financing real estate and small and medium-sized enterprises, and Deutscher Ring Bausparkasse in Germany, predominantly active in traditional real estate financing.
Non-life Life Elimination Total in CHF m 6.1.2 Gross premiums by geographical and business segments 2001
Total (net) 2,154.4 2,081.2 of which from associates 14.6 21.3 in CHF m
Realized losses on disposal and book losses: Held to maturity – – – – –
Originated by the Group – – – - 83.4 - 83.4
Impairment of value accounted for in the income statement - 0.7 - 31.4 - 4.7 - 99.3 - 136.1
Reinstatement of original value accounted for in the income statement1 0.9 40.1 – 101.6 142.6
Cumulative impairment of value accounted for in the income statement (net) 3.5 93.9 – 397.8 495.2 in CHF m 1 Upon disposal of financial instruments, any impairment in value recognized in the income statements of former periods is registered as reinstatement of original value in the income statement. The difference between the original purchase value and the income from sale is recorded as profit or loss.
Derivatives held for cash flow hedges - 9.1 23.5 14.4 - 4.6 - 19.0
1 The adjustment results from the application of IAS 39 & 40 and the separate statement of alternative financial assets.
Movement on unrealized gains and losses on real estate - 673.5 –
Movement on unrealized gains and losses on associates 36.9 - 46.2
Roland Rechtsschutz Versicherungs AG, Cologne 15.4 19.2 0.9 8.8 25.0% 25.0%
Present value of profits from insurance Other Negative contracts intangible goodwill goodwill acquired assets Total
Impairment of value accounted for in income statement – – – – –
The estimated amounts for goodwill amortization for the years 2002 to 2007 vary between CHF 5 m and CHF 15 m.
Additions arising from changes in composition of consolidated Group – – – –
Reinstatement of original value accounted for in income statement – – –
Accumulated depreciation and write-downs - 39.7 - 53.9 - 93.6 of which assets under finance leases 0.2 11.3 11.5 in CHF m 13.3 Other tangible non-current assets: 2000
Written off in the year under review - 171.6 - 199.4 - 62.0 - 60.4 - 233.6 - 259.8
The provision for final policyholder bonuses is included in the actuarial reserve.
Policyholder bonuses credited and provision for future policyholder bonuses 4,768.6 4,197.7 0.3 0.1 4,768.3 4,197.6
Total investments and deposits arising from reinsurance business – – 558.9 584.1 – –
Basically, no reinsurance is ceded to any company that does not have at least an A rating (S&P).
Indirect gross premiums earned 70.8 – - 16.0 54.8 in CHF m
Redemption date April 7, 2006 April 7, 2008 Sept. 28, 2005
Amounts used charged against the provision – - 0.8 - 0.8
The expected average tax rate of the Baloise Group came to 23.6 percent both in 2000 and 2001. These rates correspond to the weighted average of the tax rates of those countries in which the Baloise Group operates.
The reasons for the difference between tax on income calculated on the basis of these rates and the actual tax expense are set out in the table above.
Benefits from occupational benefit plans comprise all amounts provided for current employees and pensioners. The following table aggregates pension plans under “pensions” and shows other benefits (such as subsidized mortgages) under
In countries in which pension plans are effected by means of separate funds into which contributions are made, it is possible that funding surpluses may arise, as evidenced in the table above. Such surpluses are only capitalized and recognized as assets to the extent that they represent future cost savings to the Baloise Group.
The plan assets include shares in Bâloise-Holding which had a market value of CHF 183.8 m at December 2001 and CHF 264.4 m at December 2000. The plan assets do not include property leased to the Baloise Group.
Increase due to changes in composition of consolidated Group 12.3 –
(2000: CHF 85). The 2000 figures have been adjusted at a rate of 1:10 as a result of the share split on July 24, 2001.
Expenses of the Baloise Group in CHF m 1.4 1.6 23.5 Equity benefits: share participation scheme
The Bâloise-Holding registered shares are fully paid up and have a nominal value of CHF 0.1 (2000: CHF 10). A total of 83,000 shares at December 31, 2000 (before split) and 560,000 at December 31, 2001 (after split) were held by Group companies. Entry in the share register is limited to 2 percent of voting rights for individuals and bodies corporate. In the course of its normal investment business, the
The Bâloise-Holding Annual General Meeting of May 11, 2001 decided to repurchase 139,685 Bâloise-Holding shares at a price of CHF 2,100 per share.
For this purpose, a put option for each share was issued free of charge. By the destruction of the 139,685 registered shares repurchased for a total of CHF 293.2 m, the share capital was reduced by CHF 1.4 m. Then, in accordance with a decision of the Annual General Meeting of May 11, 2001, the nominal value of the shares was reduced by CHF 9 to CHF 1 through repayment to the shareholders, and a 1:10 split was effected. Since then, the share capital of CHF 5.5 m has been made up of 55,307,150 shares with a nominal value of CHF 0.1 each.
General Meeting. At the Annual General Meeting on May 14, 2002, a dividend of
CHF 2.40 per share (2000: CHF 24) will be proposed for the 2001 fiscal year, a total figure of CHF 132.7 m (2000: CHF 136.1 m). The proposed dividend has not been included in the consolidated financial statements for the 2001 fiscal year. It will be charged to accumulated profit following the adoption of the resolution at the 2002
Baloise Group which carry out insurance business are subject to certain supervisory restrictions relating to dividend payments.
Change in share of unrealized gains and losses in equity - 40.4 - 27.4
Increase/decrease due to changes in share of investment held - 58.1 18.1
Increase/decrease due to changes in composition of consolidated Group – –
In the course of its ordinary business activities, the Baloise Group conducts transactions with associated companies and with members of the Board of Directors and the Corporate Executive Committee of Bâloise-Holding. Deutscher Ring
Krankenversicherungsverein, a mutual insurance company, is not included in the consolidation of the Baloise Group, yet is linked with Deutscher Ring Lebensversicherung and Deutscher Ring Sachversicherung through an organization agreement and is therefore considered to be a related party. These transactions are not material to the Baloise Group either individually or in aggregate and are conducted at market conditions.
In 1998, the Baloise Group implemented comprehensive, Group-wide risk management at all levels to control these risks. This involves both the active operational management of individual and portfolio risks on the finance and insurance side, and the development of general risk-based business management systems. Not only does this provide security for shareholders and clients; it also leads to a positive rating on the capital market. By benchmarking all activities based on their contribution to value added (measured by the return on riskadjusted capital), it is possible to focus on the most profitable segments.
Cash equivalents 13.6 17.9 in CHF m 30.1 Derivatives: fair value hedges
Interest rate instruments: Forward exchange transactions – – – – – –
249.9 (2000: CHF 327.9 m). Other net currency positions, whether assets or liabilities, are of little amount. Foreign currency positions are hedged only to a minor extent, with the exception of one USD 120 m position.
Credit risk grows as the concentration of counterparties in a single line of business or geographical area increases. Economic developments which affect entire lines of business or geographical areas can put at risk the debt-paying ability of a whole group of otherwise independent counterparties. For this reason, the
Due in Due in Due in < 1 year 1–5 years > 5 years Total
Liabilities without fixed due date – – – - 36,671.7 in CHF m 30.7.2 Liquidity risk at December 31, 2001
Liabilities from banking business and loans - 5,583.0 - 2,838.9 - 1,275.3 - 9,697.2
Liabilities from banking business and loans 10,048.9 9,697.2 10,094.6 9,719.4 in CHF m
Executive Committee since the last balance sheet date that could have a significant impact on the consolidated annual accounts 2001. This also applies with reference to the civil action in connection with the minority stake in Tirrena, Rome, that was sold in 1990. In a first-instance ruling by a judge sitting alone, in Rome, the Baloise was ordered to pay around CHF 70 m. The Baloise has appealed and considers a corresponding cash flow unlikely, and hence provisions have been set aside for the legal costs only.
of which own share of joint venture capital commitments – –
Switzerland Principal activity in % inclusion1 Currency in millions in millions
Deutscher Ring Bausparkasse AG, Hamburg Banking 100.00 F/P DEM 1,205.0 –
Belgium Principal activity in % inclusion1 Currency in millions in millions
Antwerp Real Estate N.V., Antwerp Other 84.00 F BEF 226.3 –
Basler Versicherungs-Aktiengesellschaft Life and in Österreich, Vienna Non-life 100.00 F ATS 5,668.8 808.5
Basler Zivotno osiguranje d.d., Zagreb Life 97.00 F HRK 18.1 1.6
As auditors of the Group, we have audited the consolidated financial statements
Board of Directors. Our responsibility is to express an opinion on the financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.
Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
The holdings have been rounded to the nearest percent. Additional information about the participating interests of Bâloise-Holding is given on pages 140 to 142.
(SMM), announced that it had acquired a block of 11,600,000 registered shares
(20.97 percent) in Bâloise-Holding. On the same day, Zurich Financial Services announced that it had reduced its investment in Bâloise-Holding to 6.13 percent
(consisting of 0.14 percent in shares and 5.99 percent in options).
In July 2000, the BZ Group had disclosed a 10 percent stake. BZ Group was entered in the share register in 2000 as a shareholder with the statutory 2 percent of voting rights. At the time of that entry, 2 percent corresponded to 117,240 registered shares. In fiscal 2000 and fiscal 2001, Bâloise-Holding performed capital reduc-
Shareholders March 31, 2001 March 31, 2001 March 31, 2002 March 31, 2002
At March 31,2002, warranty obligations amounted to CHF 279.4 m (prior year: CHF 788.5 m). Of these, CHF 204.0 m relates to the warranty in respect of the convertible bond issued by Baloise Finance (Jersey) Ltd. The securities needed for hedging are recognized as other investments.
Bâloise-Holding is jointly and severally liable for value-added tax payable with all the companies in the tax group set up by the Baloise Insurance
7. Buyback, Capital Reduction, Reduction of Nominal Value, and Share Split
The General Meeting of May 11, 2001 decided to reduce the share capital by
In the following, based on a further resolution by the General Meeting of
Bâloise-Holding share capital of CHF 5.5 m has been made up of 55,307,150 shares with a nominal value of CHF 0.1 each.
Dividend distribution required by Articles of Incorporation - 2,835,200 - 276,536
As statutory auditors, we have audited the accounting records and the financial statements (income statement, balance sheet and notes to the financial statements, pages 144 to 148)1 of Bâloise-Holding for the period of April 1, 2001 to
Our audit was conducted in accordance with auditing standards promulgated by the Swiss auditing profession, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the accounting principles used, significant estimates made and the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the accounting records and financial statements and the proposed appropriation of available earnings comply with Swiss law and the