A n n u a l R e p o r t
Post-tax profit per Helvetia Patria Holding share (CHF) 1.) 16.8 25.6 - 34.4%
Investments at market value (CHF million) 23 529.3 24087.7 - 2.3%
The Helvetia Patria Group is able to report a successful underwriting business year despite of the adverse conditions. The international financial markets experienced massive slumps and the competitive pressure in the insurance industry is relentlessly continuing but we managed to increase our underwriting result by 6.2 per cent on the previous year to CHF 99.2 million. The pleasing performance can be mainly credited to our circumspect business policy as well as to a further improvement of the cost efficiencies in our country markets, with Switzerland worth being mentioned in particular.
Pleasing underwriting result. Steeply lower investment performance. Progress in the cost management. Unchanged dividend distribution recommended.
The investment performance experienced with the amount of CHF 736.2 million
Despite the fact that we had steadily reduced our equity quota already before the terror attacks in the US on September 11, we were unable to completely avoid the slump at the international financial markets. Ordinary income saw a slight advance in the last year resulting also in an increased direct return of our capital investment for the first time in several years.
The very satisfactory course of the underwriting activities is not reflected in the
8.75 per share unchanged. This translates into a payout ratio of 57.4 per cent of the
The current business should see a slight improvement of the economic environment.
Today, he is the head of one of Germany’s top-selling Helvetia off ices.
P o r t r a i t othing but a small office and a tiny portfolio, taken on from an uncle, who wanted to retire. Insurances. Whoever wants to start out, needs a fixed income to have room to pedal. And now, look around.
Reliability is not only for Joachim Kieninger, but also for any self-employed person the number one recipe for success. Alone by itself, however, it is not enough for success for any self-employed person, even for Joachim Kieninger. You need more, you need a personality convincing the customers of your reliability.
Success breeds success. Like so often, easy guiding principles stand the longest test of time, that’s true for Joachim Kieninger, too.
Stones, Stairs”. At every turn Helvetia. “This is my territory, my hunting ground”, says Kieninger, “that’s where the six hundred to eight hundred new policies are coming from every year, with three thousand customers and twice the number of current policies ...” Oh, there is a woman on the pavement waving to him and asking whether Kieninger could briefly stop at the car park. Of course, he can; if a customer has a problem, it becomes a Helvetia solution in no time.
The art is, to get the customer enthusiastic about signing the contract right there, otherwise it will be forgotten and will float down the Neckar. How to force good luck? By making the pluses and minuses very clear and bringing them to light in the ready-made contracts. – Maxi, mini or midi variations, three concrete versions, prepared by the office, so that the customer can choose between three great solutions and pick the most suitable for him or her, without a moment’s hesitation, like it is the case if you are really convinced of doing the right thing.
Claimants reporting smaller damages get a check immediately, no red tape. Working until nine or ten at night? Of course,
Saturday and Sunday are also good days if there is a lot to catch up on. And what does Isolde Kieninger, his wife, think about that? The same as he does, of course, since she is part of the business too. A joy shared is a joy doubled.
Kieninger for all insurance needs. And that’s exactly what happened. Polte founded the Kabeltec GmbH to commission and mass-produce special cables and control cabinets for large robot systems. The company is growing and so is the amount insured. Cable with a value of Euro 3 million are insured with
Kieninger’s quick visit today is just purely out of friendship, but Polte shouts from afar, “Oh hi, I am glad you are here.” He wants to make an appointment for a meeting with Kieninger before he leaves again for Singapore.
Fifteen years ago, Waltraud Kloss opened up a fashion boutique. When Frank decided to set up a coffee shop upstairs, there was no question about who to call for insurance policies.
Frank and the agent from Helvetia Insurances knew each other from common sponsoring activities. Sales are steadily increasing and the boutique is taking up more space in this old-fashioned house with many hidden corners. It is thus difficult to see what’s going on in the various rooms and, although it’s against God’s will, shoplifting is a problem – unfortunately not an insurable one. But even without that, the premium amounts for various policies are adding up every month: burglary, vandalism, water and storm damages, business interruption, business liability and life insurance of his wife and their children.
of the Group Executive Board. At the same time, Dr. Marguerite Florio and Olivier
Prof. Dr. Silvio Borner and Olivier Vodoz expire at the date of the 2002 Shareholders’
Meeting. All three have offered to be candidates for a further three-year term of office.
The Executive Board of the Helvetia Patria Group (as of April 2002)
The Board of Directors recommends as his successor Peter Wagner. After his long career as CEO of Danzas and member of the managing Board of the Deutsche Post he is currently Chairman of the Board of the Vontobel Holding.
The top management of the country markets in Switzerland, Germany and France remained unchanged whereas the following subsidiaries abroad underwent management changes: Our Austrian insurance company Der
ANKER elected Gerhard Jeidler, Magister, as an additional member to the Executive
At mid-year, Dr. Claudio Rampin was appointed as a member of the top management of our Italian subsidiary. Dr. Orazio
We are extending our warmest thanks to both gentlemen for their important contributions and their strong commitment.
Silvio Borner, Basel Deputy 1941 1983 2002 • Prof. Dr. oec.; President Patria Genossenschaft; Swiss Chairman
Ueli Forster, St. Gallen Deputy 1939 1984 2002 • •• lic. oec. HSG; Board Chairman Forster Rohner AG, Chairman St. Gallen, President economiesuisse, Member Advisory Council Swiss National Bank; Swiss
Erich Walser, Rehetobel Delegate of 1947 2001 2004 • • lic. oec. HSG, lic. iur.; MoB Allreal Holding; Swiss the Board
Marguerite Florio, Lausanne Member 1944 2001 2003 • Dr. iur.; Lawyer, Deputy President Patria Genossenschaft; Swiss
Pierin Vincenz, St. Gallen Member 1956 2000 2003 • Dr. oec. HSG; Chairman of the Raiffeisen Group, St. Gallen; Swiss
Hans-Dieter Vontobel, Marthalen 2.) Member 1944 1981 2004 • Dr. iur; Swiss
The Board’s understanding of corporate governance includes all principles and rules covering the organization, the behaviour and the transparency of the corporation. The entire set of rules is geared to protect the shareholders’ interests and are meant to guarantee a sustainable corporate development as well as to strive for a balance between governance and control. The company policy of the Helvetia Patria Group describes it as follows: The corporate governance and control of the
The following is a list of the most important responsibilities of the Board of Directors. It has been established by the Swiss stock law, which stipulates that those duties can neither be suspended nor transferred, as well as by the Articles of Association and by the internal rules of the Helvetia Patria Holding: importance to its members being individuals with strengths of character (such as integrity ), with particular specialist and industry knowledge, strategic and operative experience, visionary thinking as well as with social competence (such as team spirit and learning capability).
Member is three years and the terms are graduated appropriately. Re-election is possible. The term of office of a Board Member ends with the annual Shareholders’ Meeting of that calendar year in which he or she turns seventy years old.
The Board of Directors as well as its committees constitutes a quorum if the majority of the members are present. The resolutions are adopted by a majority vote.
We strive to achieve adequate profitability for our co-operative members and shareholders and we have frank and lasting relationships with all our investors.
We work with flexible and transparent structures in order to keep our costs at a competitive level and to be able to continue our development as a solid, efficient and highly profitable group.
We cultivate our relations with investors by taking into account the expectations of the public and the media.
Setting up the Annual Report, preparing the Shareholders’ Meeting and executing its resolutions
Management. Since Helvetia Patria’s foreign activities play an important role, some of the
Helvetia Patria Group in Switzerland may take advantage of an additional profit-sharing program – besides receiving their fixed salary. There are in some cases similar regulations abroad. The field organization has different terms and conditions. Besides enhancing the customer- and performanceoriented focus as well as motivating the personnel, the main purposes of the variable compensation are honouring individual performance and enabling the participation in the company’s results. It is divided into a performance-linked and a results-linked portion. The variable compensation can either be drawn in cash, in options to purchase registered Helvetia Patria Holding shares with a three-year period of nonnegotiability or in a combination of both. All shares for the exercise of the options are put in safekeeping in a blocked securities deposit so that profit dilution does not take place at the time the options are exercised. By the end of 2001 the following options have been issued: Exercise terms for employee options Issuing Number of Exercise Exercise year options price (CHF) Maturity ratio
Determining fixed and variable remuneration for all members of the management
Periodically reviewing the measures taken to retain and promote top management
Taking part in the strategic development of the investment policy, the overall tactics and the investor relations are just a few of the duties assumed by the Investment Committee. It supervises the investment strategy and annual tactics. The committee discusses and decides upon the five-year investment strategy in the country markets and approves fundamental investment guidelines. Furthermore, it determines the annual investment plan and the fundamental characteristics of the relevant risk management.
The Investment Committee also decides upon the funds for individual investments exceeding a certain limit. The committee meets as often as the affairs require but at least twice a year. The Chief Financial Officer takes part in the meetings in an advisory capacity.
(without the Delegate of the Board who does not get any director’s or attendance fee)
158 800.00 in options at the same terms as the employees (please see previous table).
Patria Holding registered shares as well as a total of 6 001 options to purchase 2 398 registered shares.
The auditing company Ernst & Young served in 2001 as the external statutory auditors for the seventh year. Its mandate has to be renewed by the Shareholders’ Meeting on a yearly basis. The auditors have examined the consolidated financial statements of the Helvetia Patria Group for the correct use of the
Swiss GAAP/FER accounting principles and for the compliance with the provisions of the
Swiss law. They have confirmed that the consolidated financial statements of 2001 give a true and fair view of the financial position, the results of operation and the cash flows.
Besides the external statutory auditors, who report directly to the Shareholders’
President as well as to the Audit Committee of the Board of Directors.
Report on corporate governance and control in the business year 2001
The Board of Directors worked in detail and consulted with the management on a wide range of issues in six meetings and in written and oral reports from the management: the market development, the economic situation of the company, business trends, the corporate policy as well as other fundamental issues of corporate planning and development. The Chairman and the Board Members had regular discussions with the CEO – also outside of Board meetings – about important questions on the corporate policy and development and they are otherwise in direct contact with the company as well. To protect the interests of the minority investors after the reduction of the nominal value, the Board of
Meeting to reduce the required threshold amount of the shares’ nominal value for bringing an item on the Meetings’ agenda by 20 per cent, from CHF 1 million to CHF
We systematically record our environmental pollution in the corporate ecological balance sheet and strive to continuously reduce our environmental impact. Based on the results we will take those measures that are worth the effort environmentally and economically. The ecological balance sheet takes on the role of a performance measure by checking whether the measures undertaken really result in an actual reduction of the environmental pollution.
behaviour is ecologically exemplary. We want to increase the awareness for ecological issues at the workplace with “energy saving weeks” and an information campaign.
We motivate and support our employees when they implement the environmentally friendly measures.
The total Group personnel number decreased compared to last year’s; the completed reorganisation in Switzerland, in particular, resulted in a reduction of the personnel. The workforce in Germany has slightly increased as a consequence of our conscious decision to build up the sales organization. The efforts made during the past years to create and use more efficient procedures as well as to give innovative IT-solutions a strong push have resulted in a lower number of employees needed in Austria. The acquisition of
Norwich Union Helvetia in Italy as well as the planned expansion in the claims department led to a slight increase of the personnel.
Española to meet the demands of the positive development. France’s workforce remained the same compared to the previous year with business experiencing a very positive development. This occurred despite the centralization of business procedures and the introduction of the 35-hour workweek.
The success of the business is no longer solely based on achieving solid operating results but increasingly depends also on the continuous knowledge expansion by the employees, as well as the knowledge transfer within the corporation. This development influences the recruitment, support and development of the employees within the personnel management as well.
Switzerland for the years 2002–2004 and will create the conditions enabling us to successfully meet current and future challenges.
Within this framework, we put the target-setting process and the annual review session into the centre of our last year’s attention.
Last but not least, preparation for the campaign “Fit + well 02” were under way in 2001. Health and well-being issues at the workplace and also in the private life are the topics of this campaign. A broad range of events offers an opportunity to the employees to get informed about health-related questions or to take action themselves. More and more employees are dealing with the problem of striking an individual balance between career, family and community
1.) Based on 6 597 192 Helvetia Patria Holding shares (2000: 1649 298) 2.) Based on 6 597 192 Helvetia Patria Holding shares minus own holdings 3.) Based on year-end price
Consolidated shareholders’ equity before appropriation of profit (CHF million) 1519.7 2 661.8
After the strong market advance in the previous year the course of the holding share in 2001 was impeded by the intensely negative stock market trends world-wide which also took a turn for the worse after the terror attacks on September 11 in the US. It is true that our share was also caught in the whirlpool of negative events and lost about 39 per cent of its value compared to the previous year but the share’s development was as good as in step with other listed insurers.
The Swiss Performance Insurance Index, which includes all insurance shares listed on the Swiss stock market, lost almost 39 per cent during the year under review and thus fell back to the level of mid-March 2000.
40.00) to make the registered shares more appealing to small investors. The additionally initiated reduction of capital by maximum 5 per cent of the outstanding shares, using the equivalent of up to CHF 140 million should result in denser earnings thus increasing the important ratio of reported earnings per share.
Holding is provided in the tables included in this section. The shareholder structure will change due to the withdrawal of the Alte
The share registers shows the following holdings in excess of the five per cent maximum stipulated by the Articles of Association: The Board of Directors will recommend to the Shareholders’ Meeting to leave the dividend of CHF 8.75 per share unchanged despite the lower net profit on the previous year. This translates into a payout ratio of 57.4 per cent of the Group profit. The Helvetia Patria Holding thus adheres to its continuing dividend policy; its shares therefore provide an attractive dividend yield on the basis of the year-end price and the recommended dividend amount. We are also con-
Rega and defrosts a pack of hot dogs. There is no doubt that he would be able to record the exact statistical data for every broken leg, heart attack, climbing accident and avalanche. But he is a helicopter pilot and in charge of this base in Untervaz, and this for already more than a quarter of a century. He takes off day-in day-out, sometimes ten times during his shift, and also often at night. It is very easy at night to overlook obstacles when you are out to find people having stumbled or fallen and to rescue them from the jagged Grisons mountains, out of woods, crevasses, cracked ice or from vehicles which got stuck in ravines after fateful rides on mountainous roads.
Nothing is on so far, except for some coffee. Luggauer and his team-mates, the emergency doctor and the medic, skim through a daily paper ... but yesterday’s missions didn’t make it
Radons while snow boarding. At 2 a.m. in the middle of the night, another emergency call came in, this time from the police for a car accident close to the restaurant Mövenpick Heidiland, but Luggauer kept his helicopter on the ground because fog was coming up from the lowland. After all, there are also ambulances that reach an accident scene fairly quickly, especially on motorways.
Alpine Club. To find the best routes to ever changing destinations in all kind of weather conditions, to locate a flat surface in difficult terrain for putting his machine into the wind, to stay alert to changes which might hinder the takeoff: that’s what makes him tick and of course the satisfaction of doing a generally well-appreciated work.
The helicopter – the prima donna among the rescue angels. Always ready to show sensitive reactions to all kind of conditions such as wind, gusts, too much altitude. She needs constant pampering, demands non-stop care and maintenance.
Prima donne are easily indisposed and need round o’clock attention: into the hangar for tightening or loosening the screws, for greasing and lubricating, and out again for the flight. The moment she feels a bit neglected, she threatens to turn into a pile of parts, and believe me, a copter has many more than you care to know. Such a prima donna can be really capricious, sulking at moment’s notice. Once, the tail rotor got stuck and Luggauer had to manually disengage the main rotor to keep the cabin from spinning: Gliding forward at a speed of 120 km/h, then throttling off the speed, he adjusts the cyclic of the rotor with the stick and uses the pitch to land as gently as possible. Not hitting the ground with the tail is the tricky part; after that, being on terra firma feels really good even if the knees have a slight jelly feeling.
Flying rescue missions in the mountains requires the strongest machines. Landing on flat surfaces makes good use of the ground effect. An air cushion is building up which allows landing at a reduced power. But a rescue must also succeed on the Bianco Ridge without the help of the ground effect, 4000 metres above sea level. Only the Augusta A
Luggauer will think twice about taking off and might postpone it until tomorrow. To go higher than the Bianco Ridge is out of the question, anyway. Regulations prohibit flying to higher altitudes: you need masks since climbing so quickly causes oxygen starvation to your brain: you get tired, nod off without even realising it.
An element of risk remains, says Hans Luggauer, and has cables, in particular, in mind. The Air Traffic Department of the Air Force supplies new maps every two years and the
Rega is exceptionally conscientious in updating the thick red marks on the maps showing cables criss-crossing the landscape. But all of a sudden, without spotting a pylon, a block or a house, you encounter a transport-cable, and it takes an instant for it to get tangled in the rotor. A couple of years ago, the Rega section in the Ticino suffered its only deadly accident for that reason.
Now of all times, when the hot dogs are almost done in the microwave, the telephone rings. Arosa, head trauma, responsive: those three key words are enough to make the Rega
The series of two-digit profit growth from year to year since 1996 was interrupted in 2000 by the bear market, the worst since the seventies. Group profit after taxation stood at CHF 100.6 million and decreased by 37.6 per cent on the previous year.
High realized market profits could not prevent the result from the investments activities – before deduction of underwriting interest – to turn out significantly lower due to the stock-market-related depreciations and hedging transactions. The underwriting interest allocated to life underwriting as well as the funds for the policyholders’ dividend reserves decreased accordingly. The effects on the actual dividends distributed in 2001 to the policyholders as well as on the Group result were of limited scale only thanks to the following provisions: the above-requirement high level of the past allocations to the policyholders ’ reserves and the use of special underwriting reserves which had been established in former years to counterbalance adverse business conditions. The continuously high level of reserves for dividends to policyholders is also prove for the undiminished capability of the Group to have its terms and conditions stand their ground within the market.
managed to improve their operating results thanks to the positive underwriting trends.
(accounting period 2000) significantly receded by 37.6 per cent as a result of the selective underwriting policy and the sale of a minority interest in Canada.
the direct business in the non-life sector showed an improvement as well.
linked policies. Germany’s premium volume was unable to follow the market development. We made a conscious decision not to participate in the asset-eroding race and thus are not offering one of the higher levels of policyholders’ dividends as promised by other insurers.
Gross premiums from direct life business Change 2001 2000 Change in original in CHFmillion in CHFmillion in CHF currency cyholders’ dividends, especially in Switzerland. The actuarial trends (mortality, invalidity ) remained also below last year’s level. On the other hand, the steps taken on the cost front bore impressing fruits, in the Swiss business in particular. We were able to reduce the overall expense ratio from 22.4 per cent to 19.6 per cent. Spain saw an improvement of its underwriting results, whereas all other country markets reported them to have backed off only slightly below or maintained last year’s levels.
The year under review was more or less spared natural disasters in contrast to last year’s hard hit and the assumed reinsurance made again a profit compared to the underwriting year 1999. The optimization programs that we have implemented forged ahead and apply to the reorganization of the motor vehicle insurance sectors in Switzerland, Austria and Spain as well as to the efforts made to reduce costs (especially in
Previsión Española managed also to improve their underwriting results. Germany remained on its high level. Helvetia CVN
experienced a slight decline of its underwriting result on the previous year.
The global economy experienced last year a setback that the international finance specialists did not expect to happen to that extent. Disillusionment set in correspondingly about the profit potential of the listed shares and the reactions at the stock exchanges. Although the stock markets recuperated after the terror attacks on September 11 in the United States, the massive loss, which had already occurred before the assaults, remained by year’s end. The last twelve months were for Switzerland one of
Significantly lower investment performance due to the adverse market trend. Selectively reduced equity allocation.
Bank in tow – reacted swiftly and unequivocally to the darkening economic horizon by specifically increasing the money supply with the result of decreasing short-term interest rates. Since the yield of long-term bonds did not follow suit, the interest rate curve became significantly steeper. As it had already occurred so often in the past, the
Swiss Franc played again the role of a safehaven currency during this period of higher political and economic insecurity and appreciated in value versus all main currencies.
We have reduced the risk for further capital loss in the investment portfolio through additional share divestitures and comprehensive hedging measures as a response to this far-reaching shock to world politics. We made a conscious decision not to speculate on a short-term market recovery and thus put our complete emphasis on securing the long-term soundness of the Helvetia Patria. Our investment allocation has considerably changed as a consequence of our measures taken as well as of the significant decrease in value of the remaining
Investment income by asset type (without value adjustments and readjustments as recorded in the books) Ordinary Ordinary Realized Realized income income profits (losses) profits (losses) Change on invest- on invest2001 2000 in ordinary ments 2001 ments 2000 in CHF million in CHF million income in CHF million in CHF million
Investments in affiliates and associated companies 3.5 1.0 350% 36.0 35.9
central banks slightly raise the interest rates again once the economies pick up. The Helvetia Patria will step into the near future with a lower equity allocation. The valuation margins for stocks have suffered. A fast return to the high profits realized on investment disposals of the past equity-boom years appears to be far off. The valuation reserves in our real estate, however, have increased thanks to the overall improvement of the real estate market but also as a result of our sound investment policy and conservative valuation approaches.
The market trends at most of the international financial markets took a significantly negative turn despite a slight recovery of the stock markets in the fourth quarter of 2001.
Group gained slightly last year. Since the asset values declined compared to the previous year, the direct rate of return on our investments increased for the first time in years.
Various economic indicators are pointing to a light recovery in the current year. The US
economy in particular seems to improve relatively fast and to act as support for the other economies. Unfortunately, the stock markets don’t seem to follow suit, yet. There are, however, some opportunities coming up for investing in companies with good profit prospects. The situation on the interest rate front should remain more or less quiet within
Investments by asset type Balance-sheet Balance-sheet in CHFmillion in CHFmillion Change
Be aware, any liability is denied. That’s how it is these days. But you can live with it, even the longer the better. You just need to take charge of your destiny. You will always find a gap between two warning signs or you might be able to read a favourable wording into the sign. Keep dogs on a lead. We are pretty sure that your solicitors find a way to sue the grandma due to the fact that the lead was either too long or the tram’s doors closed too fast. What are you waiting for? Go; sue, while you can! You might not have done anything right, but there is almost always a way to detect a minimal neglect by a third party.
Why didn’t anybody warn you: Caution, hot tea could be hot? Burn your tongue. You could demand five million for example. That’s how much you need to live happily ever after.
We had started the Project Dynamo in the previous year and have completed it as planned in April 2001. The new management structure draws upon leaner procedures and highly focussed department-crossing support functions. Expansion stimuli have been triggered and the cost reduction of CHF 60 million that we had aimed for has been largely achieved already in 2001. As a result of the favourable premium growth rate with costs being reduced at the same time we achieved a considerable improvement of our expense ratios and thus eliminated a former shortcoming. All Swiss employees attended an event, held under the motto “Towards new shores” in September 2001, to mark the conclusion of the project.
Switzerland amounted to CHF 2 704.7 million, an increase of 11.3 per cent on the previous year. The non-life business achieved a growth rate of 0.8 per cent, while the life business managed to attain an advance of 14.2 per cent. The proportion of total business accounted for by life insurance continued to increase and reached 80.3 per cent.
The achieved expansion is exceeding our goals set for last year for the two sectors, the life and the non-life business.
Swi tze r land 24.5% Motor vehicle 12.0% Liability 4.5% Transport 59.0% Property
Our collaboration with the Raiffeisen Banks has generated a premium volume of CHF 41 million in the last business year. This amounts to 6 per cent of the total volume of the individual life policies and the percentage doubled on the previous year. The broadened range of products as well as the improved support played significant roles.
This co-operation of two independent providers of financial services will be carefully further developed and offers a substantial potential for integrated investment and pension planning.
Group-life insurance reported an advance of 11.4 per cent with a growth rate of 12.2 per cent in the periodic-premium policies and exceeded our expectations. Risk trends are painting a varied picture. The individual life sector reported a better risk result in the disability insurance. The group life sector, however, saw the death risk increase on the previous year and disability takes an unfavourable path for the first time in three years with new disability cases strongly increasing.
The funds’ available resources were reduced by CHF 92.5 million with the amount of
We thus have put into action what we have promised to the customers for the past years: We are using the high level of funds available in the policyholders’ dividend reserve in favour of our customers to adjust for the volatility in the financial markets.
The premium volume in the non-life business amounted to CHF 533.7 million in 2001, an increase of 0.8 per cent on the previous year. We have again refused to join the aggressive price war and have therefore lost some contracts.
For us as a private insurer of provident services the introduction of risk-adjusted target-group rates increasingly becomes the focus of our attention.
In addition to it, we have seen premium increases in the industrial and transport sectors of our corporate business. Those rises are the result of the current market developments as well as of our restructuring efforts.
No spectacular major damages 2001 was for us a year without spectacular major damages and the overall claims trend took thus a smooth course. The number of claims did indeed increase in various segments as a result of new business, the overall claims ratio, however, remained slightly below the prior-year level.
While the market reported a minor growth rate during the year under review, our premium income was declining in this sector.
Sales of newly launched products, such as fund-linked life insurance, and sales of new, government sponsored pension plan products (Riester contracts) have both started, but our expectations have not yet being fully met.
Life 27.1% Motor vehicle 93.2 13.4% Liability 7.0% Accident / health 40.7% Property
Gross premiums in 2001 from direct non-life business in Germany (in EUR million)
As far as the life business is concerned, we expect the trend to experience a positive turnaround on the output and premium front despite of the difficult market environment.
The continuously declining interest-rate level as well as the steep downturn at the international financial markets forced therefore the insurers to reduce the amount of policyholders ’ dividends across the board. On the other hand, we are foreseeing substantial business impulses coming from the sales of the tax-beneficial Riester pension products and we are positive about achieving a considerable growth rate by offering attractive products. Additional stimuli for the life business are expected to come from the new subsidiary helvetia-e.com that offers its services solely on the internet.
We have launched a quality and service offensive based on the results of a customer survey. Developing and implementing a variety of measures should further improve customer satisfaction and support and should additionally strengthen our competitive position in the market.
As the industrialized countries’ economies experienced significant weakening during the past year so did the Austrian one. The rather optimistic predictions were far from happening. The inflation rate increased again slightly. A high level of concentration already characterizes the Austrian insurance market. Additional activities to further increase concentration are slowing whereas cross-border co-operations are accelerating.
The sales organization is going through a period of change. It used to be dominated by employed personnel. Nowadays, the number of independent agents and brokers is dramatically increasing. Larger brokers are joining forces; smaller brokers are looking for pool solutions. Banks and other financial consultants are competing with the traditional insurance agents for the marketing of life insurance policies.
The premium growth of our Austrian subsidiary Der ANKER took a pleasing course with the periodic-premium life insurance policies being the main contributor to this
10.1% Accident / health 14.7% Liability 37.4% Motor vehicle 36.0% Property 1.8% Transport development. Two opposite factors characterized the non-life business of the past year.
Der ANKER will focus in the future on the private client business with special emphasis on the upper middle class and small businesses. The implementation of the new strategy is in full swing and first successes are already being noticed. Net claims paid have steeply declined, helped also along by the lack of large natural disasters. The life business managed to continue the favourable trend of the past years. The ANKER saw its periodic-premium life business growing stronger than the single-premium sector – in contrast with the overall market. This is also a good guarantee for a steady growth in the future since this business segment shows less volatility. Innovative products played a decisive role in this success. Many potential customers decided to wait and see in this sector as a result of the unsolved tax situation and the announced reform of the occu-
The management and the employees in Austria know how to adapt to the changing market conditions and to find innovative and customer-friendly solutions. This ability as well as a modern strategy and IT-solutions, that are up to the tasks, are guarantors for a positive development in the future.
A: Sometimes I feel like living on a soccer ball.The world is getting so small.
(“Blue” shoots a fast ball into the left corner of the net, but the “Red’s” goalie saves it.)
B: Having a good sense for what’s coming is all you need. (Goal kick to way over the middle.)
B: Yes and no. My lucky streak started already before the
A: I see a 1:0 coming. (A Red defender kicks the ball away.)
Genoa were on strike and the rest of the goods got stuck there for six weeks.
Chiasso, an axle break caused the lorry to tip over.The girls from the area brought the traffic to a standstill when they stormed the container for the silk.
B: Not at all. (Corner.) But exciting. Multicargo covers all eventualities, if you want to have a cushy job as an importer and exporter. Go and check the internet on www. helvetia.fr34
They used to limit their activities to the life insurance business for the most part, but they are now expanding also into the non-life sector and are becoming more serious competitors for the traditional insurance intermediaries.
Union Vita has a co-operation contract with an Italian mortgage bank. We managed to also transfer this promising agreement and did already further develop and expand it. This acquisition helped Helvetia to strengthen its presence on the Italian insurance market and to substantially broaden its co-operation with bank partners. The Helvetia Vita reports a good growth rate for the traditional life insurance sector. Sales of fund- and index-linked products, however, experienced a decline as a result of the globally adverse trends at the stock markets.
Successful acquisition of a life-insurer. Pleasing growth in the non-life business. Lower amount of net claims paid.
been mostly compensated by the dynamic expansion of the group policies.
The overall growth rate in the non-life business amounted to 0.1 per cent. The unfavourable underwriting results of the motor vehicle sector in the last years were broadly improved by rate increases. Premium rises as well as other measures to improve the profitability have resulted in a noticeable recovery of this sector’s results. We are also confident for the years to come that this trend will continue.
The Spanish economy maintained well compared to most other European countries during the past business year but was not able to fully avoid the trends of the global economy.
The local financial markets, in particular, have suffered as a result of the sharp correction at the international stock markets. The insurance industry with its large investment portfolios was especially hard hit by the bear market.
After the very high growth rate of almost 40 per cent in the year 2000, the life business saw in 2001 an increase of 0.8 per cent.
Although the Spanish insurance market has experienced growth rates above the European average for the past years we consider this stagnation as a mere breather in a still expanding market. The decline of the fundlinked policies, which played a vital role in the year 2000’s large premium advance, has
Helvetia France managed again to remarkably maintain its position. With its strong reputation of being a leading specialist in the transport insurance business the Helvetia
Besides having a very good claims ratio compared to the competition we were also able to further reduce the expense ratio thus achieving again a very pleasing overall result.
Euro and the introduction of the 35-hour workweek were successfully implemented.
The strictly profit-oriented concept will enable a sustainable future growth in this specialised niche business.
ness procedures and structures as well as taking specific measures to ameliorate the profitability are helping to firmly stay on course.
We expect that the life business will return to its growth rates of the previous years after stagnating in 2001 and will play a bigger role in the personal provident planning process of a large portion of the population. Strengthening the co-operation as well as using the synergies will be – besides implementing the strategy – the two biggest challenges that our two Helvetia Patria subsidiaries are facing.
think I would not have told her about our baggage insurance from Helvetia Austria.
F i n a n c i a l r e v i e w
Net interest income assigned to non-life activities 127 888 134 331 - 4.8%
Change in reserves for claims outstanding Gross - 78 321 - 102179
L i f e u n d e r w r i t i n g
Income from investments in affiliates and associated companies 3 483 974 257.6%
Expenditure on investments and interest costs - 1571107 - 1013 271 55.1%
C o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s f o r t h e H e l v e t i a P a t r i a G r o u p
B a l a n c e s h e e t in CHF thousand inCHF thousand
Total liabilities and shareholders’ equity 25 407 551 25 996 206 - 2.3%
C o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s f o r t h e H e l v e t i a P a t r i a G r o u p in CHF thousand inCHF thousand
Total Income not affecting the flow of funds 1896506 1868106 1.5%
Other income not affecting the flow of funds - 20916 - 19 137
Total Income not affecting the flow of funds - 86554 - 71 087 21.8%
Increase in investments for unit-linked life insurance policies - 117666 - 108 392
Decrease in receivable deposits for assumed insurance business 14895 32 633
Total cash flow from investments - 2 024070 - 2 092 752 - 3.3%
Total cash flow from financing activities - 64076 82 775 - 177.4%
Cash and cash equivalents at December 31 130244 212 519 - 38.7%
C a s h f l o w s t a t e m e n t
Leipziger Bausparkasse AG, Oberursel, as well as in the Hestia Insurance S.A., Sopot, have been sold in 2001.
Foreign currency revenue and expenditure in the accounts of individual Group companies 1. Accounting principles
Helvetia Patria Group have been compiled in accordance with the consolidation and valuation principles specified below, and are in accordance with the Swiss GAAP/FER.
Helvetia Patria Group contain the annual accounts at December 31, 2001, of Helvetia
Assets and liabilities, income and expenditure for all these companies are fully consolidated.
A n n e x t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s o f t h e H e l v e t i a P a t r i a G r o u p are recorded at the actual rates ruling on the day they occur; foreign currency balance sheet positions for such companies are translated at the rate ruling on the balance sheet date. The resulting foreign currency exchange differences are shown in the profit and loss accounts.
The consolidated financial statements for 2000 and 2001 of the Helvetia Patria Group have been compiled using standardised valuation principles based on Swiss GAAP
Consolidated subsidiaries of Helvetia Patria Group Company’s capital Holding Company in million at 31.12.2001
Helvetia Vita Compagnia Italo Svizzera di Assicurazioni sulla Vita S.p.A., Milan (EUR) 13.4 100.00%
Helvetia CVN, Compañía Española de Seguros y Reaseguros, Madrid (ESP) 3059.7 97.18%
254.5 million) was charged to the life underwriting profit and loss account for resultslinked and non-results-linked dividend to be distributed to policyholders.
Groupwide expenditure on commissions and personnel is as follows: 4.1 Investments
Real estate is shown at market value, based on its capitalised rental income at the interest rates applied in the countries and markets concerned. Deferred taxes are shown on the balance sheet under “Provisions for taxes”.
Shareholdings, other non-fixed interest rate securities and investment funds are shown at market value. Deferred taxes are shown on the balance sheet under
Fixed interest rate securities are shown at their amortised cost, with the difference between their purchase and redemption price spread over the remaining duration. Supplementary depreciation is effected to cover additional credit risks.
market value of real estate as stated on the consolidated balance sheet compares with a total book value of CHF 3.4 billion (2000: CHF 3.4 billion) based on individual company accounts.
The market value of fixed-interest rate securities, which are shown at amortised cost,
Balance Changes to Value Value Balance sheet value Currency scope of con- readjust- adjust- Revaluation sheet value in CHF million at 1.1.2001 movements solidation Additions Disposals ments ments changes at 31.12. 01
Fixed-term deposits and similar 756.3 - 3.9 3 348.7 - 3 076.3 1024.8
The assignment of the underwriting reserves to life and non-life business is listed in detail in the table on page 50.
Securities with a book value of CHF 231.7 million (2000: CHF 203.2 million) were deposited with banks on the balance sheet date in connection with option transactions.
Securities with a book value of CHF 250.8 million (2000: CHF 597.3 million) were
Life underwriting reserves Reserves for unearned premiums 146.2 139.7 146.0 140.5
Reserves for benefits outstanding 84.0 79.9 108.2 103.7 Reserves for unit-linked life insurance policies 464.8 464.8 356.8 356.8
These consolidated financial statements are the responsibility of the Board of Directors.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.
H e l v e t i a P a t r i a G r o u p
P r o f i t a n d l o s s a c c o u n t
Total shareholders’ equity before appropriation of profit 602 148 607 681 - 0.9%
P r o p o s a l f o r t h e a p p r o p r i a t i o n o f t h e n e t p r o f i t in CHF thousand inCHF thousand
Europa Beteiligungsgesellschaft AG, Oberursel, and Hestia Insurance S.A., Sopot, have been sold in 2001.
A total of 9 168 Helvetia Patria Holding registered shares were purchased within the
Helvetia Patria Group in 2001 at an average price of CHF 393 and a total of 2 912 Helvetia Patria Holding registered shares were sold within the Helvetia Patria Group in 2001 at an average price of CHF 395. All transactions were effected at market values.
The Helvetia Patria Holding has undertaken to secure the 2% convertible bond, issued by
5. Shareholders owning more than five per cent of share capital
As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement and notes pages 52/53) of Helvetia Patria Holding for the year ended 31 December, 2001.
In our opinion, the accounting records and financial statements and the proposed appropriation of available earnings comply with Swiss law and the company’s articles of incorporation.
R e p o r t o f t h e S t a t u t o r y A u d i t o r s
T o t a l b u s i n e s s
N o n - l i f e b u s i n e s s
Net change in actuarial reserves 1135.2 855.6 1 080.0 1 128.6 954.4 701.0
Net expenditure on results-linked and non-results-linked policyholders’ dividends 145.8 254.5 305.0 303.8 268.4 252.7
Profit from life underwriting activities 17.8 59.1 43.8 28.2 20.1 6.0
Milan 5 Helvetia Beteiligungen-subsidiaries 3 Helvetia Europe-subsidiaries Helvetia Versicherungen-regional offices outside Switzerland
• Benchmark index An index used as a point of reference to measure the performance of a particular portfolio.
• Claim Amount paid by the insurer to the insuree in non-life insurance if the insured event occurs.
• Claims ratio The ratio of claims incurred (including changes to equalisation reserves) to net premiums earned.
Additions to and withdrawals from the equalisation reserve are based on mathematical models stipulated by the relevant supervisory authorities.
• Fixed-interest-rate securities Securities (such as bonds) on which a fixed and constant interest is paid for their entire duration.
• Net expenditure on claims/ benefits Total of all claims/benefits paid in the course of the year and changes to reserves for claims outstanding in non-life business, plus reserves for claims outstanding in life business, less the portion of such claims assumed by reinsurers.
• Gross premiums The premiums written in the year under review before deduction of premiums ceded to reinsurers.
• Indirect business Companies involved in direct business – the original insurer – will often not wish to bear the entire risk alone, but will prefer to pass on some of it to a reinsurer. Like most companies active in the direct insurance business, Helvetia Patria also acts as a reinsurer, and assumes part of the risk from other original insurers. These reinsurance transactions are known as indirect business.
• Net claims/benefits paid The total of all insurance claims/benefits paid in the year under review, with due
• Premium Amount paid by an insuree to an insurer for the protection and benefits provided.
• Premium reimbursement Some insurance policies provide that part of the premium may be returned to the client as
• Return on equity (excluding revaluation reserve) Profit/loss after taxation and minority interests as a proportion of shareholders’ equity as shown on the consolidated balance sheet, excluding changes to the revaluation reserve.
• Return on equity (including revaluation reserve) Profit/loss after taxation and minority interests as a proportion of shareholders’ equity as shown on the consolidated balance sheet, including changes to the revaluation reserve.
• Solvability ratio Ratio of solvability (see above) to shareholders ’ equity as shown on the balance sheet.
• Total benefits Sum of all the benefits insured (used in particular in the life insurance business).
• The track through the institutions Theory of the New Left in the sixties according to which change doesn’t come through revolutions but from changes from within, i.e. those wanting change should become members of the authorities.
• Hawelka One of the last big literati’s – and artists’
coffeehouses in Vienna’s first district. Since 1939. It became famous for being one of the settings in Carol Reed’s film classic The
• Stick and Pitch The two “control levers” of a helicopter increase or decrease the angle of the large rotor blades. The stick or “cyclic” controls side to side and forward and back motions whereas the collective pitch determines up and down movements.
• Reinsurance premium Amount paid by an insurer to a reinsurer in exchange for the latter’s assumption of part of a policy’s risk.
• Reserves for claims outstanding Since not all claims will be settled by the end of the financial year in which they arise, provisions must be made on the balance sheet for the amounts these claims (or claims likely to be incurred but not yet received) may require. This item is known as the reserves for claims outstanding.
Changes to the reserves for claims outstanding are shown in the profit and loss account.
Helvetia Assicurazioni Fabio de Puppi Via G. B. Cassinis 21 IT-20139 Milano
Helvetia schweizerische Lebens- Prof. Dr. Wolfram Wrabetz Berliner Strasse 56-58 DE-60311 Frankfurt a.M.
Helvetia Life Compagnia Italo Dott. Franco Armeni Via G.B. Cassinis 21 IT-20139 Milano
G r o u p h e a d o f f i c e
G r o u p E x e c u t i v e B o a r d
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Broker Centers Switzerland 1211 Genève Bd Georges Favon 18 022 809 11 22
H e a d o f f i c e f o r S w i t z e r l a n d
E x e c u t i v e M a n a g e m e n t S w i t z e r l a n d
H e l v e t i a P a t r i a V e r s i c h e r u n g e n r e g i o n a l o f f i c e s i n S w i t z e r l a n d
Helvetia Patria Group and Helvetia Patria Holding, together with the associated annexes)
Strokes of good luck: stone Bilderwelten e-mail from Vienna: stone Bilderwelten
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