Consolidated profit per share basic 3 in CHF 8.64 9.14 5.8
Consolidated profit per share diluted 3 in CHF 8.57 8.89 3.7
Who WE ARE: Headquartered in Basel, Switzerland, Baloise Group is a European provider of insurance and pension solutions. In Switzerland Baloise operates as a focused financial services provider, combining insurance and banking. Its other markets are Germany, Austria, Belgium, Luxembourg, Liechtenstein, Croatia and Serbia. Its sales network includes its own sales organisation, brokers and other partners. Its innovative pension product business for private customers throughout Europe is driven by the Baloise competence centres in Luxembourg and Liechtenstein. Bâloise Holding Ltd shares are quoted in the main segment of the SIX Swiss Exchange. Baloise Group has approximately 8,800 employees.
WhAT WE STAnd FoR: We want people to feel safe. To play our part in this respect, we created the “Safety World.” Everything we do is aimed at safety. As such, we consciously go further than other insurance companies: we combine insurance with smart prevention. In this way, we help to ensure that losses do not occur in the first place. Should something happen nevertheless, then we’re right there. Fast and capable as always.
BAloISE Baloise key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover
ShAREholdER InFoRmATIon Letter to the shareholders “Strategic continuity generates safety” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Baloise share gains significantly compared to reference indices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
BuSInESS dEvElopmEnT Group: higher profit and solid growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SuSTAInABlE BuSInESS mAnAGEmEnT Human Resources: the employees form the basis of our success. We are preparing them for the future. . . . . . . . . . . 38 Ecology: long-term protection of the environment . . . . . . . . . . 42 Risk management: our risk management counts among the best 15 percent in Europe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Heidi Bächli, neurosurgeon, Heidelberg, Germany A woman in the fast lane. She loves complex challenges, which she faces in great safety – not least because she can rely wholeheartedly on an experienced team.
Well prepared. You can only deliver exceptional performance if you prepare carefully. Three exceptional experts speak about their own very personal preparation methods.
Good preparation minimises risk and increases safety. Baloise is also guided by this insight. We want people to feel safe. We think ahead and provide our customers with essential information and solutions. So that they are optimally prepared to shape their lives successfully.
How fast and how light can you go is the theme of your speed climbing. Is that also true for the preparation time?
That is extremely important. You have to have dreams. I have so many ideas that I might never realise, that are at present not realistic at all. Goals that I might never achieve myself. But perhaps someone else will – because of what I have done.
Because you pave the way. Yes. If someone had said five years ago that I would climb the north face of the Eiger in less than three hours, no one would have thought it possible. Now we know it’s possible. The way is paved for everyone else. Now I’m trying to do that in the Himalaya range.
“ The preparation phase is actually the most interesting part. The hike itself is after all just the realisation of your plan. For me, the goal is not the summit – the goal is trying to reach it.”
The Swiss national Ueli Steck is one of the best climbers in the world. He has solo-climbed the three big north faces in the Alps in record time.
Ascent of Gasherbrum II (8,035 m) in the Karakorum range, Pakistan
First ascent of the north face of Tengkampoche (6,500 m), Nepal
Iam in the hospital at 7:15 a.m. at the latest. First I go into the office and put on my white coat. Sometimes I get a call immediately and need to go somewhere. So I have to be ready. I check my e-mails and then it’s usually time for the morning meeting where we talk about the night before. Afterwards we call up the surgery plan and I might go directly to the operating theatre. Or I do whatever else has to be done, dictating letters for example. Besides that I always have consultation time on Tuesdays. Originally I studied sport and biology and wanted to be a teacher. I completed that degree. But when I was sitting my state exams there was a surplus of teachers, and so I began to study medicine on the side as it were. That’s really typical for me; I love doing several things at the same time. While studying medicine I actually wanted to do neurology. But when I came across neurosurgery as part of an internship, I liked it so much that I stuck with it. Later I specialised in paediatric surgery. I’m not a creature of habit. I try to avoid that. Only then do you have the necessary respect for the job you do. If it becomes a routine you could become careless. The only thing I do routinely is have a good breakfast – because I never know when I’ll get to eat something again during the day. During an operation I sometimes work eight to ten hours at a stretch.
I’m concentrating so hard that I don’t feel hungry or thirsty. It takes training to bear up to that physically. Sometimes I am a bit tired afterwards. But when I then see how grateful the children are because they could be relieved of their suffering – then I know what I do it all for.
The preparation always depends on the kind of operation. When the operation is elective I can plan it. I scarcely have to prepare for routine surgery. The main work beforehand is always with the parents. We have to discuss why the operation is necessary, what we want to achieve, and explain the risks. And then of course it depends on the type of illness the child has. If it is a rare tumour, for example, or a complicated brain operation, then I might also consult colleagues from other specialist fields – in very rare cases even in the USA. It goes without saying that there are no long discussions in emergency situations. I look at the images, make a diagnosis and then it’s off
For me it always has to be a proper challenge – I really like that. It’s probably in my nature. I am very impulsive and need a certain hustle and bustle. At the same time you have to be very patient when performing neurological surgery. It might be that you find yourself sitting in front of a giant microscope for hours making preparations in millimetre steps. And that’s only possible if you enjoy it. My former boss once said that I wouldn’t like it if it was too easy. He was probably right. That’s perhaps why I chose the most difficult of all fields.
“ You always have to be ready for action as a neurosurgeon. In an emergency situation, there’s no time for long discussions. You have to have your knowledge at the ready.”
Heidi Bächli has headed the paediatric neurosurgery unit at the renowned University Clinic Heidelberg, Germany, since the middle of March 2010. She specialises in spasticity operations on children with cerebral palsy. Before that she worked for 15 years at the University Children’s Hospital in Basel where she was able to develop the paediatric neurosurgery unit. She continues to provide consultant support there and commutes to Switzerland twice a month for this purpose.
Then he shows us his treasures: there’s hardly enough wall space for all the medals and certificates in the small room. That’s maybe why he carries his Olympic success in Athens as a circular tattoo on his left upper arm. We arrange for him to send us a list with all the prizes he has won up to now – that’s around 300 awards from all over the world, from his participation in the world championships, European championships and the Paralympic Games. These experiences give him the strength to go calmly into competitions, appear strong and believe in himself.
“ Details are very important when you want to optimise athletic performance. It costs too much not to be well prepared.”
Mihovil Španja gets out an advertisement from the Paralympic Committee. It shows him in a calm, strong pose. He translates the text for us. The message is: He was told that it would take hard work and discipline to become a professional athlete – no one told him his handicap could be a problem. Then the punchline: “What we don’t have makes us stronger.” His illness was not just the trigger for his career, it is still a strong driver. Mihovil Španja likes to demonstrate what you can achieve with discipline and the right attitude: Currently he is preparing for the European championship in Berlin and the Paralympics in London in the summer of 2012. If he wins the gold medal there, he wants to end his professional career. We don’t have a lot of time left in Dubrovnik. We take a quick spin on the city wall. At last the sun comes through.
2010 Double world champion in 400 m freestyle and 100 m breaststroke, as well as twice runner-up in 100 m backstroke and 200 m medley at the world championship, Eindhoven, Netherlands 2009 Double world champion in 200 m medley and 100 m backstroke, as well as double world champion in 100 m breaststroke and 100 m medley, Rio de Janeiro, Brazil
We can present you a good result for Baloise Group’s 2010 fiscal year. Consolidated profit for the period increased by 3.7 % to CHF 436.7 million compared to the previous year. Profits before tax, which best reflect the success of our core business, rose by 8.0 % to CHF 607.2 million. The second pillar, on which our good performance is based, is business growth. In Switzerland, our domestic market, and in the majority of our foreign markets, our good positioning and convincing solutions for our customers enabled us to grow faster than the market average. Moreover, thanks to our prudent and systematic risk management, we have a strong and flexible balance sheet. All this is not to be taken for granted in times of record-low interest rates and unfavourable foreign exchange rates, to which our business reacts nervously. Our result sees us on track to reach our strategic goal of becoming one of the most profitable and fastest growing insurers in Europe by 2012.
Year after year, the Board of Directors and the Corporate Executive Committee strive to meet shareholders’ high expectations. We are therefore pleased that we were able to outperform important Baloise financial targets in 2010. As such, the return on equity increased to 10.4 %, whilst earnings per share rose by 3.7 % to CHF 8.89. Thanks to our good result and sound condition, we are able to propose a continued attractive gross dividend of CHF 4.50 to the Annual General Meeting.
Dr rolf Schäuble, Chairman of the Board of Directors (right), and Dr Martin Strobel, CEo of Baloise Group (left)
Safety is offered to our shareholders not only via the profitability of the capital they entrust to us or by way of a reliable dividend, but also because of the way we push ahead and expand the company. At the forefront is organic growth, be it through innovations such the variable pensions offered by Baloise Life or the enhancement of existing insurance products with prevention components. Acquisitions of companies or portfolios are only options for us if they harmonise with our business model, create value in the medium term and fit in with the Baloise culture. Recently we underwent cautious expansion: at the beginning of 2010 in Luxembourg with Fortis Luxemburg IARD and at the start of 2011 in Belgium with Avéro. In Germany we can quickly push ahead with the separation of Deutscher Ring companies following the conclusion of the framework agreement with the staff representatives. Thus we can lay the foundations for further growth in this important market with a more efficient unit.
In the coming years as well, we anticipate volatile financial markets and uncertain economic development. Our forecasts are therefore conservative.
Building on our efficient and profitable core business we aim – as before – to achieve a return on equity over the insurance cycle of 15 % and to continue to steadily increase earnings per share. In the nonlife business, we aim to continue to keep the combined ratio appreciably below 100 %. We want to sustainably increase profitability by CHF 200 million by 2012 by means of our strategic programme “Baloise 2012.”
The tense economic situation and low interest rates, as well as high market uncertainties, put financial stocks under pressure, mainly in the second quarter of 2010. The Baloise share was also unable to evade this trend and closed at CHF 75.55 on 30 June 2010, 12.2 % lower than at the start of the year. In the same period the Swiss Market Index lost 6.4 % in value and also the European Insurance Industry Index was quoted 7.7 % lower after the first half-year.
Above all, the Baloise share more than compensated for the deficit of the first half-year by regaining value so strongly in the last quarter in comparison to the reference indices and closed the stock market year 2010 at CHF 91.00. This resulted in a price performance of 5.8 % seen over the whole year. This was significantly above that of the Swiss Market Index, which lost 1.7 % compared to the previous year and above the European Insurance Industry Index, which gained 1.6 %.
The share buy-back programme, which started in September 2008, was continued in 2010 and extended to 30 April 2011. A maximum of 2,000,000 registered shares will be bought back. This equates to a proportion of at most 4 % of outstanding shares. By the end of December 2010, a total of 1,597,961 shares had been purchased at an average price of CHF 77.53. The share buy-back programme has thus been 79.9 % completed as of 31 December 2010.
The current status of this ongoing share buy-back programme can be viewed at: www.baloise.com → Investor relations → Baloise share → Share buy-back programme
Closing at CHF 91.00 the Baloise share * achieved a performance of 5.8 % in 2010. Thus significantly outperforming the reference indices. The dividend yield proposed to the General Annual Meeting amounts to 4.9 %. Baloise thus remains a shareholderfriendly investment.
Consolidated profit per share diluted in CHF 12.90 15.15 7.32 8.57 8.89
Number of shares issued in units 55,307,150 54,000,000 50,000,000 50,000,000 50,000,000
./. Number of treasury shares in units 1,849,548 3,997,308 1,566,985 2,282,790 2,800,239
Number of shares in circulation in units 53,457,602 50,002,692 48,433,015 47,717,210 47,199,761
GErMANY Baloise operates in Germany with the brands “Basler Germany ”, “Deutscher Ring Sach” and “Deutscher Ring Leben” all under one management. The Baloise portfolio includes insurance and pension solutions in the areas of indemnity, accident and life insurances for private individuals, small and medium-sized enterprises and selected industrial clients. As far as sales are concerned, Baloise concentrates on using its own insurance sales force and brokers. Deutscher Ring Leben and Deutscher Ring Sach specialise in private pension solutions.
Sales are generated by its own insurance sales force, via the sales partners OVB and ZEUS as well as through brokers using Moneymaxx brand products.
BElGIUM Baloise is represented on the Belgian market by the brand “Mercator, ” which includes Avéro business as of 2011. Mercator sees itself as a partner for professional brokers. The company provides a broad range of life and nonlife insurance products for private individuals as well as small and medium-sized enterprises. The acquisition of Nateus announced in mid-March 2011 will make Mercator one of the leading insurers in Belgium.
Baloise focuses on markets, customers, sales channels and products with a high degree of added value. We target private individuals, small and medium-sized enterprises with a positive risk and earnings profile as well as selected industrial companies as customers.
AUSTrIA In Austria “Basler Versicherungen” provides insurance and pension solutions to private customers as well as to small and medium-sized enterprises. The company’s own sales force is mainly responsible for marketing of these products.
Combined ratio (gross) in percent 110.9 110.2 lIEChTENSTEIN Baloise Life, founded in Balzers in 2007, develops innovative pension solutions and tailor-made life insurance products for private customers across Europe. It markets these via national Baloise companies as well as via third party partners.
Our brand promise is “Making you safer.” Everything we do is geared towards safety. We combine insurance with smart prevention solutions and thus help to ensure that damage does not occur in the first place.
Strength Baloise is a strong partner. Strong in terms of growth, returns and results. We can be relied on when it really counts, because our strength means we are a partner people can depend on.
BrAND VAlUES Swiss Baloise is proud of its Swiss origins. Since 1863. This means we combine reliability, humanism, solidity, tradition, financial strength and independence.
Innovative Our innovative drive gives us the necessary competitive edge. This is evident from our systematic, comprehensive focus on safety as well as our customer management. We create an environment that fosters innovation in every area.
Partnership Commitment to partnership is one of our biggest emotional strengths. It is based on recognising and creating added value. We work to nurture and deepen our relationships with all our stakeholders. So that we are always able to generate enthusiasm.
oVErVIEW Baloise was able to increase its profit by 3.7 % to CHF 436.7 million in 2010 (previous year: CHF 421.0 million). In operating terms the result is even more impressive: profit before borrowing costs and taxes grew by 8.0 % to CHF 607.2 million (previous year: CHF 562.1 million). In so doing, numerous market environment challenges had to be mastered, notably the sharp fall in the value of the euro against the Swiss franc, low interest rates and the increase in major claims. Innovative products and the targeted implementation of the brand promise “Making you safer” led to above-average growth in insurance premiums. The strategic programme “Baloise 2012” is on track and made a net contribution to earnings of CHF 92 million. This was attributable primarily to enhanced business processes in Switzerland and Belgium, various growth initiatives and benefits due to company separations in Germany. The “Baloise 2012” programme encompasses around 100 measures intended to sustainably increase Baloise Group profitability by CHF 200 million by 2012.
The brand positioning with the promise “Making you safer” was further reinforced in all business units. Preventive services feature increasingly in classic insurance products such as motor vehicle, household and transport insurances. The consequences are remarkable: the positioning generates higher product density among target customers, above- average numbers of new clients, a higher level of customer loyalty and a greater readiness to recommend the company to other people. For the last-mentioned consequence, Baloise Austria won the “Recommender Award” for the company with the highest ratio of customer recommendations.
The scope of consolidation of Baloise Group was expanded to include “Fortis Luxembourg IARD S.A.,” the acquisition of which was concluded on 7 January 2010. As from this date, it has been fully consolidated as “Bâloise Assurances IARD S.A.”. In the first quarter of 2010, both Croatian nonlife and life units of Baloise Group were merged with the insurer “Basler osiguranje Zagreb d.d.” acquired in 2007. As far as the deconsolidation due to the loss of control of the German “OVB Holding AG” is concerned, we refer you to the detailed description provided on page 68 of the 2010 Financial Report.
NoNlIFE DIVISIoN: hIGh ProFITABIlITY Thanks to the high quality of the insurance portfolio, growth and various recoverability and efficiency enhancement mea- sures, the nonlife division (indemnity and personal loss insurance ) performed impressively. With profit before borrowing costs and taxes amounting to CHF 380.3 million (previous year: CHF 382.6 million), the division continued to be the backbone of Baloise Group in income terms, due primarily to lower costs and an exceptional combined ratio despite major claims and storm losses. This amounted to a gross ratio of 92.2 % (previous year: 91.2 %). The net value (after deducting reinsurance) was 95.2 % (previous year: 94.4 %). The efficiency enhancement measures resulted in a significant decline in the expense ratio to a gross level of 30.7 % (previous year: 32.0 %) and net level of 31.9 % (previous year: 33.4 %). Business volume (identical to IFRS premium income in this division) amounted to CHF 3,044.9 million (previous year: CHF 3,136.4 million). This equates in Swiss francs to a decline of 2.9 % due to the exchange rate; in local currencies attractive growth of 2.2 % was achieved.
The embedded value of the life business decreased from CHF 2,625.8 million to CHF 2,573.5 million, which equates to a return on embedded value of – 2.3 % (in local currencies
+ 2.9 %). A reduction of CHF 567.8 million stems – after considering liquidity premiums – from changes in the economic environment as well as the weaker euro. Operative earnings contributed CHF 533.0 million to embedded value. The value of new business amounts to CHF 58.9 million. The new business margin increased to 11.8 % (previous year: 9.3 %).
BANKING DIVISIoN: hIGh ProFITABIlITY The banking division generated a profit before borrowing costs and taxes of CHF 67.9 million (previous year: CHF 61.0 million ). The growth of 11.3 % is attributable to the pleasing developments at Baloise Bank SoBa, Baloise Asset Management and Baloise Fund Invest. Thanks to the good quality of its portfolio and efficient business processes, Baloise Bank SoBa generated a profit in accordance with local accounting methods of CHF 21.2 million, equating to an increase of 2.2 % over that of the previous year. Customer deposits rose by CHF 280.1 million or 6.6 % to total inventories of CHF 4,515.9 million.
Cash and cash equivalents 2,488.8 1,862.2 – 25.2 1 Excluding assets for the account and at the risk of life insurance policyholders.
Equity positions were cautiously increased in the nonlife business. The investment categories hedge funds and private equity generated good results in local currencies; the currency risk was hedged to an extent of at least 60 %. Gross impairment on equity-type financial investments amounted to CHF 98.2 million. A unique feature of the properties directly held was their strong value and income stability. No net impairment was necessary on mortgage bonds.
Baloise’s German business generated a profit before borrowing costs and taxes of CHF 118.7 million in 2010 (previous year: CHF 91.2 million). Positive one-off effects of the separation of Deutscher Ring and cost improvements were able to offset the negative impact of major and elementary claims as well as of interest rate development. A positive impact on business development was attributable to the further re- inforcement of the Safety World: product density among target customers and the number of new clients grew significantly while customer loyalty with Safety World contact improved considerably.
The separation of Deutscher Ring is progressing according to schedule; the business plan with anticipated synergy benefits of EUR 20 to 25 million per year continues to be valid. At the end of November 2010, an outline agreement with a redundancy plan was concluded with the executive works council. Currently the first divisions are being separated in both personnel and operational terms.
Mercator generated a profit before borrowing costs and taxes of CHF 142.9 million (previous year: CHF 54.4 million). The striking rise is due primarily to business process optimisation, the extremely good income position of the nonlife business and the high level of income generated via capital investments. Growth was again very impresssive. Business volume totalled CHF 798.1 million (previous year: CHF 820.5 million). Adjusted to take account of the negative exchange rate of the euro, this equates to growth in local currency of 6.2 %. The nonlife business grew in local currency by 5.2 % and amounted to CHF 558.3 million. The excellent gross combined ratio of the nonlife business of 94.0 % (previous year: 98.1) underlines its operational profitability. Life insurance business volume amounted to CHF 239.8 million, a rise in local currency of 8.5 %. The investment-type life insurance products experienced particularly strong growth with a plus of 18.1 %. In the Safety World sector, Mercator focused on small and medium-sized companies, for which it introduced targeted damage prevention. At the beginning of 2011, Mercator bolstered its market position by purchasing the insurer Avéro. The acquisition of Nateus announced in mid-March 2011 will make Mercator one of the leading insurers in Belgium.
Bâloise Luxembourg achieved an excellent result with profit before borrowing costs and taxes of CHF 14.3 million (previous year: CHF 6.0 million). Fortis Luxembourg IARD S.A. (henceforth Bâloise Assurance IARD S.A.) acquired on 7 January 2010, significantly reinforced the company’s market position and added additional strength to the already strong growth dynamics. The business volume of Bâloise Luxemburg totalled CHF 1,269.9 million (previous year: CHF 962.0 million ), an increase in local currency of 44.1 %. The main impetus came from the acquisition as well as from investmenttype life insurance products that are sold in the euro zone. Nonlife business volume amounted to CHF 81.7 million (previous year: CHF 55.1 million), to which Bâloise Assurance IARD contributed CHF 26.4 million. Adjusted to take account of the acquisition, nonlife growth stood at an excellent 9.4 % in local currency. The gross combined ratio amounted to an outstanding 81.4 % (previous year: 91.6 %) thanks to an 11.2 % improvement in the loss ratio. Business volume in the life insurance division rose to CHF 1,188.2 million (previous year: CHF 906.9 million). The growth in local currency of 43.0 % is attributable to the development in unit-linked products. In the domestic market too, Bâloise Luxembourg enjoyed growth in local currency of 6.8 % in the classic life insurance sector.
The business units Mercator in Belgium and Bâloise in Luxembourg reported very high growth dynamics above the market average and were thus able to strengthen their market positions significantly.
AUSTrIA: STroNG GroWTh Basler Austria saw a continuation of the strong growth of previous years while investing further in the expansion of its sales activities. The company was able to attract more new sales agencies than expected. Business volume amounted to CHF 161.9 million (previous year: CHF 162.5 million); this equates to growth in local currency of 8.7 % as compared with overall market growth of around 1 %. The nonlife division achieved a business volume of CHF 121.3 million (previous year: CHF 120.0 million), an increase in local currency of 10.4 %. The combined ratio improved significantly thanks to optimisation and the absence of major claims and storm damage to a gross level of 97.5 % (previous year: 106.6 %). The expense ratio also declined due to targeted cost cuts. Business volume of CHF 40.5 million (previous year: CHF 42.5 million ) was generated by life insurance activities, a plus in local currency of 4.0 %. Investment-type life insurance policies made an above-average contribution to this.
45.1 % (2009: 45.7 %) of all employees are women. Baloise employs 244 (2009: 248) apprentices, trainees and interns throughout the Group.
34.1 % (2009: 50.0 %) of those who left the company did so of their own accord.
As an employer, Baloise is guided by the following principles: →→ We are an attractive and forward-looking employer.
→→ We invest long-term in the skills and career development of our employees.
PrEFErrED EMPloYEr In 2008, Baloise mapped out a Talent Strategy with the aim of becoming one of the best employers in our branch. On that occasion we introduced the Group-wide “Talent Finder.” Since then, our staff recruiting has become considerably more efficient. By means of this web-based Talent Management System, we were able to recruit more high-quality candidates and reduce both the costs and the time spent on staffing. Thanks to this new concept, we were able to create a talent pipeline for the first time, with more than 10,000 (previous year: 3,500) potential candidates. This corporate talent pool has already enabled us to fill around 20 % (previous year: 10 %) of new job vacancies efficiently and inexpensively. We maintain regular contact with many of these external talents, in order to win
In 2010 the Talent Finder was prepared for its introduction in the Serbian unit, the most recent addition to the Baloise Group. This was necessary because of our growth targets and the introduction of new products. The cost-savings effect is very rapidly noticeable especially in small units with strong growth that have to recruit intensively. The system could be introduced in Serbia at minimal cost, thanks to the good preparatory work of the Croatian colleagues, where the Talent Finder has been in action since 2009.
More than 60 % of employees throughout the Group are subject to annual target agreements and performance reviews. The amount of variable remuneration for executives is directly linked to individual performance. In 2010 we introduced a uniform, variable remuneration policy and system in all countries. The aim of the new system is to encourage performance -orientation. In addition, we also now count risk aspects, value creation and strategy implementation besides the business result as criteria for the level of executive remuneration. Besides that, development and follow-up plans were integrated into the mangement system. The elements of the remuneration guidelines are: →→ Competitiveness in the market →→ Consideration of company and individual performance →→ Fairness and transparency →→ Sustainability
2. Studying “best practice:” “best practice” companies within and outside our sector are analysed as part of each activity module.
The knowledge transfer and networking of the participants is fostered during an annual meeting; this took place for the first time in Jesteburg, Germany, in June 2010. There strategies, brand positioning and the necessary skills were deepened.
An open advanced-training format for all employees, under the name “Extended Knowledge Conference – ekc” was offered in Basel for the first time in 2010. Here, external speakers, who also train the management in important skills as part of the SLP, gave lectures on specific topics. The topic “Implementation – how to realise things successfully” kicked off the seminar. Further “Extended Knowledge Conference – ekc” are planned for 2011.
STroNG ADAPTABIlITY AND FlExIBIlITY Many parts of the Group underwent change in 2010. At present, the two largest changes concern Germany, and involve the merging of Basler Germany with Deutscher Ring Leben und Sach and the Group area Switzerland with the “Leader” initiative.
We carried out the integration of Fortis in Luxembourg in 2010. The aim was to ensure the transfer of the Fortis employees and their knowledge to Baloise, thereby retaining as many members of staff as possible. The same goal was set regarding the independent marketing of Fortis. The integration was planned in detail and formulated bit by bit in co- operation with employees and agencies. In retrospect, it can be established that both the cultural integration as well as the knowledge transfer has been largely successful and that the organisation is well prepared for the future.
ExCEllENT lEADErShIP AND MANAGEMENT SKIllS Baloise systematically identifies and develops talented executives since 2008. In a three-stage process, “round table” meetings, involving local management, the Corporate Executive Committee and the Chairman of the Board of Directors, were held in 2010 to discuss the strengths and skill enhancement needs of 231 (2009: 231) incumbents in key positions, 288 (2009: 280) succession candidates and 271 (2009: 183) talented individuals from the Group. Overall, as in 2009, we could promote more internal employees to key positions than we had to recruit staff to fill these, also in 2010. Individual skill enhancement plans with specific action to be taken have been agreed with all people identified.
Business units in each country perform the internal talent identification and development process. Taking Croatia as an example, we can see that such a structured approach supports staff retention and focused advancement even in markets that were hit badly by the economic crisis in 2010. We were able to retain many important talents there despite reorganisation of the unit and systematically train them for future challenges.
Our efforts in talent management were also externally acknowledged in 2010. A survey of the University of Innsbruck and Transformation Management AG sees Baloise among the top ten companies in Germany, Austria and Switzerland with regard to talent management. Baloise holds second place in its home market Switzerland, as well as in the finance segment.
BAloISE ENCoUrAGES INTErNAl MoBIlITY In 2008, we launched the new Group Talent Management System, thus laying the process and system-related foundations to enable us to efficiently facilitate mobility within the Group. By merging our performance management, talent identification and development planning in 2010, we have created the framework to further promote internal mobility and thus further development and internal promotion. This way, the internal prospects are even higher for employees with good performance and potential. We take the view that this will significantly reduce the number of cancellations by employees.
DIVErSITY AND PArTNErShIP WITh EMPloYEES In order to be able to understand our target groups, it is necessary to cultivate a diverse employee structure. 45.1 % (2009: 45.7 %) of employees and 16.7 % (2009: 17.0 %) of executives are women. Baloise does not tolerate any form of discrimination. The management of our business units and those responsible for HR matters ensure this maxim is followed; they are supported in this by the internal Compliance Network.
Baloise promotes its employees solely on the basis of their performance, their potential and their identification with corporate values.
In recent years, we have implemented an overall concept in Switzerland. It includes e. g. a guideline on burn-out, mobbing, alcohol at the workplace, concepts to deal with absences, an internal case management, training programmes for stress management, total annual work time, ergonomic furniture, sports, in-house offers for back / neck massage, physical and mental deep relaxation, drink timer, Intranet advice regarding nutrition and preventative medical care.
Baloise has also invested a great deal in expanding corporate health management for companies in other countries in past years. A survey on demographic change and its implications is currently being conducted in Belgium.
In Germany, health management was embedded in the HR strategy in the Hamburg office as well as in Bad Homburg. The aim is to raise the health awareness of the employees and promote a healthy work-life balance. In 2010 campaigns on the topics “skin screening,” “healthy diet” and measures regarding pandemics and the protection of non-smokers were carried out. In addition, Basler Germany established three places in a crèche and assigned them internally to its em- ployees. The company thus enables a better compatibility of job and family, as well as strengthening the employee bond to the company.
BAloISE DIAloGUES WITh EMPloYEE rEPrESENTATIVES Baloise respects the right of every employee to be or become a member of an employee representation body. We maintain a direct, transparent and constructive dialogue with all employee representatives and committees.
In 1995 Baloise signed the UNEP* Insurance Industry Declaration. In our environmental mission statement, we commit ourselves, amongst other things, to continuously reduce our direct impact on the environment by planning, building and managing corporate real estate, in order to save resources. The same principles and criteria apply to the procurement of equipment and materials.
SAVING Co2 BY TrAIN Employees are encouraged to use the train for travelling on business wherever possible. The train tickets for domestic and international travel are ordered through the Swiss Railways’ ordering portal “SBB Businesstravel” and printed out at the workplace. Waiting times at the ticket counter and timeconsuming expense claims are eliminated. As part of its service, the SSB also evaluates the rail travel with regard to CO2 emissions. In 2010, 1,936,000 passenger kilometres were covered by train on business in Switzerland. This means that 100,000 litres of fuel were saved compared to road transport. The CO2 emissions of 222 tonnes that were avoided is equal to to the CO2 emissions generated by about 100 minergy detached houses in one year.
MAKING BETTEr USE oF ThE lIMITED AVAIlABlE SPACE The open-plan offices were extensively refurbished in the main building in Basel. Adjustments were made to the floor plan and workplaces to meet the demands of the modern working world. New open-space offices were created in the cell office area; only a few single offices remain. The floor plan was transferred to the other two Group headquarter buildings. Because the existing space is used more efficiently, an additional 400 workplaces have been created at Group headquarters whilst energy consumption remains almost unchanged. We can now let over 8,000 m2 office space – this is equivalent to a mediumsized office building with 8 storeys.
43Sustainable business management Ecology on target. The environmental changes as well as the rising energy prices and costs oblige and motivate us as a responsible company that uses resources efficiently.
2008 absolute 2009 absolute 2010 absolute relative Unit + / – %
Electricity consumption 27,187,936 KWh 27,591,295 KWh 23,506,845 KWh 5,037 kWh / employee – 14.8
Heating consumption 14,813,880 KWh 14,991,052 KWh 13,194,068 KWh 92 kWh / m2 – 12.0
Types of refuse 50.00 % paper / cardboard 40.00 % misc. waste / refuse
Business travel 18.36 million km 23.46 million km 16.01 million km 3,430 km / employee – 31.8
Mode of transport 20.80 % km by air 41.20 % km by road 38.00 % km by public transport * The Deutscher Ring group no longer contains the figures of Deutscher Ring Kranken. Thereby reducing the absolute values of the energy and material flows significantly.
As an integral component of Baloise strategic management, risk management makes a major contribution to the Group’s positioning. As a European insurance company with Swiss roots, we possess a strong balance sheet and a high degree of operational earning power which have been optimised in relation to risks taken on the one hand and earnings opportunities on the other.
Risk Management at Baloise is both risk and value management. Our risk model is based on innovative standards, meaning that we can always keep our “making you safer” promise.
In 2010, Standard & Poor’s again awarded the Enterprise Risk Management of Baloise the very good rating “strong.” We are therefore among the best 15 % of all European insurers.
Our risk management is a uniform strategic and operational system that applies throughout the Group and has the following subsections: →→ Risk map: this forms the backbone of risk considerations and defines basic risk issues, such as underwriting and market risks as well as operational business risks.
→→ Risk measurement: This identifies, quantifies and models the risks in all business and financial processes.
→→ Strategic Risk Management: its task is to simultaneously optimise the risks taken by the Group and its earnings opportunities.
Baloise models are based on the concept of economic risk capital – currently the most advanced market standard. To do this, a target capital figure is derived, solely on the basis of risk calculation considerations – irrespective of financial accounting treatment or capital adequacy regulations as per Solvency I – to enable the company to remain solvent, even in adverse circumstances, and to meet its obligations to policyholders at any time. We constantly compare this target capital figure with existing capital, i. e. actual capital.
In addition to this integrated risk model, we use the risk map to identify, describe and assess specific risks in relation to their likely impact on business results. Our corporate database of specific risks, which includes detailed descriptions of risks, their incorporation in the risk map and early warning indicators, is generated from this standard process. On the quantitative side, this description is complemented by the measurement of risks in respect of their likely financial impact on the company’s balance sheet. Each risk is recorded together with a description of risk-minimising action to be taken. The database is updated twice a year.
rISK ProCESSES “Group-wide Risk Management Standards” lay mandatory foundations for risk processes. This set of rules specifies mandatory methods, rules and caps / floors across the Group. These standards determine how different risk issues are assessed, managed and reported. A system of risk limits, which function as early warning indicators, reduces the risks taken.
In order to comprehensively limit risk at an aggregated level, the Group uses a system of limits based on economic risk capital. This system tracks the Group’s and individual business units’ risk capital in real time. We also monitor individual, issue-specific risks, using limits, as illustrated in the following examples: →→ The underwriting risks are based on underwriting guidelines. Local underwriters base their decisions on these. Risk calculation-related deductible analyses go hand in hand with key reinsurance policies.
→→ Business environment risks and operational and strategic risks are individually recorded using standard procedures and we assess their impact on capital.
Results targets for individual business units, which take their specific risk situation into account, are a key element of this control system. These specifications are included in the target agreements with local management.
oUr ProFESSIoNAl rISK MANAGEMENT SYSTEM ProVED ITS WorTh IN 2010 The effectiveness and usefulness of Baloise’s risk strategy principles were demonstrated in 2010. Group solvency at 224 % is an excellent indicator of the Group’s financial strength.
→→ Our investment policy regarding shares remained very conservative in 2010. The net proportion of investments in shares was 5.8 % on 31 December 2010.
→→ Currency risks on fixed-interest and alternative financial investments were hedged to a considerable extent.
→→ The Group’s net combined risk of 95.2 % verifies our very good actuarial practice in the non-life business. Risk Management will continue to make rapid advances in the next few years, and make Baloise a company with a superior risk strategy and positioning.
This chapter mirrors the structure of the SIX Corporate Governance Guidelines (29 October 2008 version), in order to provide more transparency and thus better comparability with previous years, as well as with other companies. The Swiss Code of Best Practice has also been taken into account, in particular Appendix 1 published in 2007, with its recommendations on compensation. Baloise publishes an actual Compensation Report as item 5 of the Corporate Governance Report, which also complies with the guidelines contained in the circular 2010 / 1 of the the Swiss financial market supervisory authority FINMA.
→→ Segment reporting by region and business segments are contained in the notes to the Consolidated Annual Financial Statements in the Financial Report from page 69 onwards.
→→ The operational Group management structure is presented on page 58 of the Annual Report.
shareholders As a public company with a broad shareholder base, Bâloise Holding is part of the Swiss Market Index SMIM (SMI Mid) and the Swiss Leader Index (SLI).
The reports made to the issuer and the SIX Swiss Exchange AG Disclosure Office during the fiscal year according to Article 20 BEHG (Federal Act on Stock Exchanges and Securities Trading) and published on their electronic publishing platform, can be viewed using the search function on www.sixexchange -regulation.com/obligations/disclosure/major_shareholders_de.
treasury shares As of 31 December 2010, Bâloise Holding held 2,138,121 treasury shares (4.28 %).
cross holdings Cross holdings involving capital ownership or voting rights do not exist.
2. cAPItAl structure dividend policy Bâloise Holding pursues a policy of paying steady, profit-based dividends. Conventional cash dividends are supplemented with other distribution instruments such as share buy-backs and options. Essentially, around one-third of annual profits are paid out, while taking the Group’s internal financing requirements into account.
share buy-back programme The share buy-back programme, which started in September 2008, was continued in 2010 and extended to 30 April 2011. A maximum of 2,000,000 registered shares will be bought back. This equates to a proportion of at most 4 % of outstanding shares. By the end of December 2010, a total of 1,597,961 shares had been purchased at an average price of CHF 77.53. The share buy-back programme has thus been completed to 79.9 % as of 31 December 2010.
The share capital of Bâloise Holding amounts to CHF 5.0 million since 29 April 2008. It is divided into 50,000,000 registered shares with a face value of CHF 0.10, bearing an entitlement to a dividend.
www.baloise.com → Responsibility → Corporate Governance → Rules and regulations contingent capital The 2004 Annual General Meeting (§ 3 of the Articles of Incorporation ) created contingent capital. This capital enables share capital to be increased by a maximum of 5,530,715 registered shares each with a face value of CHF 0.10. This equates to a maximum nominal share capital increase of CHF 553,071.50
Contingent capital serves to hedge possible option or conversion rights, which are granted in conjunction with bonds or similar debentures. Shareholders do not have subscription rights. The respective holders of option and conversion rights are entitled to subscribe for the new registered shares. The Board of Directors can restrict or exclude shareholders ’ pre-emptive subscription rights when issuing optional and convertible bonds on international capital markets. More detailed information about the structure of this contingent capital can be found in § 3 of the Bâloise Holding Articles of Incorporation.
www.baloise.com → Responsibility → Corporate Governance → Rules and regulations other financing instruments No participation or bonus certificates exist.
consolidated equity of the Baloise group On 31 December 2010, consolidated equity of the Baloise Group amounted to CHF 4,133.5 million. Details about trends in 2009 and 2010 can be found on pages 8 and 9 of the Financial Report in the consolidated statement of changes in equity. Full details on 2008 can be found in the consolidated statement of changes in equity on page 8 of the Financial Report 2009.
outstanding bonds Bâloise Holding and other Group companies have issued bonds on the open market. At the end of 2010, a total of six bonds issued by Bâloise Holding and other Group companies were outstanding on the open market. Details on the outstanding bonds can be found on page 101 and on the Internet.
www.baloise.com → Investor relations → Bonds rating Standard & Poor’s Ratings Services rated the financial strength of Baloise Insurance Ltd unchanged at an “A-”rating with a stable outlook. This reflects the strong capitalisation, a high degree of financial flexibility, the strong competitive positioning, as well as the excellent earning power of the Baloise Group’s business model. Group-wide risk management is rated as “strong”.
www.baloise.com → Investor relations → Rating 3. BoArd of dIrectors Only the Chairman of the Board of Directors, Dr Rolf Schäuble, holds an executive post. All other members of the Board of Directors are independent and non-executive. In the three fiscal years preceding the reporting period, they were not appointed to an executive post within any Group company and do not maintain any substantial business relationships with the Baloise Group.
The following persons were re-elected in the fiscal year: →→ Dr Georg F. Krayer for a three-year term of office →→ Werner Kummer for a three-year term of office →→ Prof. Dr Gertrud Höhler for a one-year term of office as a result of having reached the regulatory age limit at the 2011 Annual General Meeting.
Michael Becker (1948, D, Dr iur.) has been a member of the Board of Directors since 2010. He studied law in Hamburg and Tübingen and took over the position Head of Accounting and Controlling at Merck KGaA, Darmstadt in 1998. Since 2000, he has been a member of the management board and personally liable partner of Merck KGaA and, since 2002, a member of the Board of Directors and personally liable partner of E. Merck KG, Darmstadt that holds 70 % of the Merck KGaA shares. He is an independent, non-executive director.
Klaus Jenny (1942, CH, Dr oec. HSG) has been a member of the Board of Directors since 2003. He studied economics at the University of St. Gallen, obtaining his doctorate (Dr oec.). In 1987 Dr Klaus Jenny became a member of the General Directorate of the Schweizerische Kreditanstalt and a member of the Executive Board of Credit Suisse Group and his last post was CEO of the “Credit Suisse Private Banking” business unit. He has been an independent financial advisor to businesses and private individuals since 1999. He is a member of the Board of Directors of Clariant AG, of Maus Frères S.A., of Edmond de Rothschild Holding S.A., of the Banque Privée Edmond de Rothschild S.A., of Téléverbier S.A. and various other (non-listed) companies. Dr Klaus Jenny is an inde- pendent, non-executive director.
hansjörg frei, gertrud höhler, Klaus Jenny, Werner Kummer, eveline saupper vorabdruck
As a rule, committees appointed by the Board of Directors consist of four members, who are elected annually by the Board. The Chairman and the Vice-Chairman of the Board of Directors are ex-officio members of the Chairman’s Committee. The Chairman of the Board of Directors may not be a member of the Audit Committee. The key duties of these committees are governed by the organisational regulations and by the written regulations applying to each committee.
www.baloise.com → Responsibility → Corporate Governance → Rules and regulations duties of the committees The Chairman’s Committee provides advice on key business transactions, in particular on important strategic and personnel decisions. In this respect the Chairman’s Committee also acts as the Nomination Committee. Furthermore, it acts as the Investment Committee, approving the Group’s investment policy and property investments for the Group’s own use at Head Office.
The Compensation Committee specifies the structure and the amount of compensation paid to members of the Board of Directors as well as the salaries of the members of the Corporate Executive Committee. As part of the incentive plan it specifies higher-ranking corporate objectives and their attainment. It approves compensation policies for Corporate Executive Committee members and monitors their correct application. The Chairman of the Board of Directors is not a member of this committee.
division of authority and responsibilities between the Board of directors and the corporate executive committee The division of authority and responsibilities between the Board of Directors and the Corporate Executive Committee is governed primarily by organisational regulations and investment policies. Both documents are reviewed on an ongoing basis and updated as changing circumstances require.
Members of the Board of Directors receive the minutes of Corporate Executive Committee meetings for their perusal. The Chairman of the Board of Directors may attend meetings of the Corporate Executive Committee at any time.
56 Corporate Governance Corporate Governance Report including Compensation Report 4. Corporate exeCutive Committee martin Strobel (1966, D / CH, Dr rer. pol.) studied computer science, business management and business information systems at the Universities of Kaiserslautern, Windsor (Canada) and Bamberg, prior to obtaining his doctorate (Dr rer. pol.). From 1993 to 1999 he held various posts at Boston Consulting Group, Dusseldorf, dealing with strategic IT management issues in the banking and insurance sector. He joined the Baloise Group in 1999. Initially he was Head of IT at Basler Switzerland, with responsibility for major cross-business projects in the insurance and banking divisions within the Baloise Group. He was a member of the Corporate Executive Committee from 2003 to 2008, with responsibility for the Corporate Division Switzerland. With effect from 1 January 2009, Dr Martin Strobel took over as Chief Executive Officer.
German egloff (1958, CH, lic. oec. HSG) graduated in business economics from the University of St Gallen. From 1985 onwards, he held various management posts at Winterthur Insurance, Switzerland. In 1997, as a member of the Executive Board, he assumed responsibility for individual nonlife insurance products, which also included the management of Wincare and (as Chairman of the Board of Directors) of Sancare. From 1998 to 2002, German Egloff was Chief Financial Officer of Winterthur Switzerland and a member of the Board of Directors of Wincare, becoming its Chairman in 2000. From 2002 to 2004, he was Chief Financial Officer at Zurich Financial Services Switzerland. His area of responsibility included finance, human resources, IT, logistics and procurement. German Egloff has been a member of the Corporate Executive Committee (Head of the Corporate Division Finance) since 1 December 2004, with responsibility for Investor Relations, Financial Management and Financial Accounting & Corporate Finance as well as, most recently, also for Corporate IT. The appointed actuary of the Baloise’s Swiss business likewise reports to German Egloff.
olav Noack (1967, D / CH, Dr oec.) graduated in business economics and political science from the university of St Gallen (Dr oec.). From 1995 to 2002, he was employed by McKinsey, Switzerland and USA, as a consultant to various insurers in the life and health insurance sectors and also in the nonlife business. Dr Olav Noack was responsible for the realignment of the Life Insurance division at UBS from 2002 until 2007. As Head of Life Insurance, he developed UBS product offerings for various countries. Most recently, he was responsible for unit trust products, all life insurance companies as well as third party business at Barclays Wealth. Since 1 February 2009, Dr Olav Noack has been a member of the Corporate Executive Committee, and the CEO of the Corporate Division Switzerland.
Further information on the members of the Corporate Executive Committee can be found on the Internet.
With the exception of Dr Martin Strobel and Martin Wenk, none of the members of the Corporate Executive Committee serve on the boards of Directors of non-Baloise Group companies.
Baloise life (liechtenstein ) Annemie D’Hulster regional Management Peter Zutter Martin Kampik
5.1. compensation committee of the Board of directors In accordance with the Swiss Code of Best Practice, the Board of Directors formed the Compensation Committee in 2001. This committee deals with the compensation policy, particularly at the highest corporate level. Amongst other things, the Compensation Committee makes sure that
5.2. remuneration policy Principles The company’s success depends strongly on the skills and the performance of its employees. Therefore, it is vital to attract and develop well-qualified, competent and highly motivated employees and executives and retain them within the company. Baloise’s remuneration policy and system are derived from these superordinate principles.
→→ Sustainanbility – high comformity of management and shareholder interests, long-term commitment, higher proportion of restricted shares.
5.3. remuneration system of Baloise new Performance Management as of 1 January 2011 As of the 2011 fiscal year a new Performance Management System will be applied that places the short-term variable remuneration on a new footing. This new Performance Management System is a dual system that has two distinctly separate instruments: →→ assesses and evaluates the individual performance.
The individually determined value is based on the superior ’s overall assessment which considers the criteria performance, management and conduct. In contrast to performance remuneration, there is no contractual claim to the payout or the amount of a possible paymount from the Performance Pool.
function value system To ensure in-house comparability, Baloise applies a function value system for senior executive managers in the Group and employees in Switzerland. The requirements of the holder of a certain function / position with regard to skills, knowledge and experience are evaluated and weighted in the process. Similarly weighted positions are grouped in function levels. The allocation to a certain function level is key to the identification of the applicable salary range, ancillary pay and vorabdruck
61Corporate�Governance Corporate�Governance�Report including�Compensation�Report other employment contract components, as well as the specific management level to which the individual belongs.
The goal of this remuneration system is, on the one hand, to promote a performance culture in the Baloise Group and, on the other, to facilitate the retention of qualified and management personnel within the organisation. The remuneration philosophy of Baloise aims to pay basic salaries geared to market. Furthermore, the variable remuneration components are designed so that in a very good year – with regard to individual performance and the success of the company – incentive payments above the market average are also possible, just as they can fall below the market average in a weak year.
62 Corporate�Governance Corporate�Governance�Report including�Compensation�Report share units) in the form of shares, which are blocked for three years in the sense of a deferred payment. For the members of the Corporate Executive Committees, shares as a proportion of variable remuneration amount to about 75 % and the value of the restricted shares they hold is about three-times their basic salary. This means that important elements of the new standard required by the regulatory authorities are already being fulfilled.
Basic salary The basic salary represents the compensation appropriate to the tasks and responsibility of the position and the employee’s skills and compentence required to reach the business targets. Baloise aims to achieve an average position in the market when determining the basic salary. This is realised on the grounds of local business and market requirements. Basic salaries are checked regularly and adjusted if necessary, based on the individual performance, the position in the salary range as well as the company performance The principle “same pay for the same qualification and tasks” applies when determining the basic salary. Fairness of internal pay and the Baloise Code of Conduct are also taken into account. Internal and external fairness in pay are supported by clear and market-oriented salary structures.
In principle, all employees at function levels 1 to 5 are entitled to incentives. The regulations governing incentives for function level 1 apply to the executive Chairman of the Board of Directors. Regulations adapted to local employment and remuneration markets are applied to foreign business units.
At a 100 % level of attainment, incentives have the following values (target incentive): →→ FL 1: 54 % of basic salary →→ FL 2: 38 % of basic salary →→ FL 3: 30 % of basic salary →→ FL 4: 22 % of basic salary →→ FL 5: 14 % of basic salary
Besides individual attainment of objectives, company performance has an influence on the incentive amount. The Compensation Committee defines a factor based on the annual results (operational performance management, OPM), which is determined on the basis of total shareholder value, profit trends, growth and market trends. This is multiplied with the result of individual performance. The OPM factor can lie between 0.8 und 1.3 for members of the Corporate Executive Committee and function levels 2 and 3. It ranges between 0.9 to 1.2 for function levels 4 and 5.
The incentive will change significantly with the introduction of the new Performance Management Sysem as of 1 January 2011 and its weighting will be reduced on its transfer into the new performance remuneration.
All six members of the Corporate Executive Committee have a twelve-month notice period. In addition, they are – as are six other members of the executive management – entitled to a severance payment amounting to one annual salary (including variable remuneration), in the event that their employment contract is terminated within twelve months after a change of control due to a takeover or merger or a merger of employers (under certain circumstances also those of employees). The notice period for the Chairman of the Board of Directors is six months. No change of control clause exists.
→→ must be authorised by Compensation Committee for employees belonging to the function levels 1 to 3 regardless of the amount; →→ for other positions that exceed CHF 200,000 in individual cases must also be authorised by the Compensation Committee.
→→ Performance quota and performance share units for function levels 1 to 3 in the Group (compare section 5.8.)
The foundation is managed by a board that is predominantly independent of the Corporate Executive Committee. Peter Schwager (Chairman) and Dr Heinrich Koller (solicitor) function as independent members of the foundation council; the third member is Andreas Burki (Deputy Head of Legal and Taxes Baloise).
share subscription scheme Since January 2003, persons in all Group companies in Switzerland entitled to incentives can subscribe for shares at a preferential price – and since 2008 also the members of executive management in the foreign companies – taking their due incentive into account. The subscription date is always 1 June; on this day, ownership of the shares is transferred to the employee without further vesting conditions, however, they may not be sold during a blocking period of three years. The subscription price is specified by the Corporate Executive Committee each year and is published in advance on the intranet. On 19 April 2010, the Corporate Executive Committee decided that the subscription price for the report ing period be based on the volume-weighted stock average from 4 to 18 May 2010 (previous year: decision dated 20 April 2009; stock average from 6 to 11 May 2009). A discount of 10 % is granted on the stock average thus calculated, therefore the subscription price in the reporting period amounted to CHF 73.05 (2009: CHF 79.49). The shares required for the Share Subscription Scheme are purchased on the market.
Performance quota The performance quota is a flexible, discretionary instrument available to the Compensation Committee of the Board of Directors. This instrument allows the participants to engage in the success of the company and increases compensation variability. The performance quota was introduced in 2007 vorabdruck
The composition of the index can be subject to changes. Due to company mergers, for example, companies can drop out of the index, others may be newly included in the index. The composition of the index at the point in time when the respective PSU are issued is key to determining the perfor- mance factor, adjusted by the companies that are no longer included in the index. Companies that have meanwhile been newly included in the index are not considered for plans that are already running.
In principle, a PSU grants the right to subscribe for a share. This is the case when Baloise share performance corresponds to the mean of the peer group; in this case the performance factor is 1.0. The programme participants receive more shares for their PSU, if Baloise shares have performed better than the peer group. The factor reaches the maximum of 1.5, when Baloise shares have performed in the uppermost quartile of peer group company performance. The factor is 0.5, if performance is in the lowest quartile of peer group company performance. If Baloise share performance is in both middle quartiles, the
performance factor is calculated using a linear scale. The performance factor is defined for the entire period ending, based on stock exchange closing prices on the last trading day of the respective performance period.
PSU allocated in 2007 were converted into shares as of 1 January 2010. At the end of the performance period on 31 December 2009, the performance of the Baloise share held the 13th rank of 31 companies within the reference group (STOXX Europe 600 Insurance Index), in other words, it was in the 2nd quartile. The performance factor was thus 1.182 and the 35,673 outstanding PSU were converted into 42,169 shares (market price on 31 December 2009: CHF 86.05, market value CHF 3.6 million) The shares required for the conversion into PSU were bought on the market, half of these shares remain blocked for a further three years.
→→ It is forward-looking, sound, can be calculated and is reasonably priced.
The Chairman of the Board of Directors and the members of the Corporate Executive Committee are insured in the pension scheme of Baloise Insurance Ltd. The same terms apply to them as to all other insured office staff.
5.10. remuneration to members of the Board of directors (not including chairman) See tables on pages 71 and 72.
The members of the Board of Directors receive a lump sum payment with the exception of the Chairmans. The amount has remained unchanged since 2008.
Since 2006 members of the Board of Directors have been paid out 25 % of their annual remuneration in shares that are blocked for a period of three years. As with the Share Subscription Plan for management, members of the Corporate Executive Committee are also granted a 10 % discount on the market price. Members of the Board of Directors do not participate in any Employee Share Ownership Plan that is linked to the attainment of specific performance targets.
Due to contractual obligations, a one-off payment of CHF 80,000 was paid to a former member of the Board of Directors connnected to his previous governing body activities in the company.
The Compensation Committee of the Board of Directors determines the type and the scope of compensation for the Chairman of the Board of Directors and members of the Corporate Executive Committee. This consists of a basic salary and an incentive component tied to the attainment of individual and company performance targets. The target
69Corporate�Governance Corporate�Governance�Report including�Compensation�Report incentive is 54 % of basic salary and can rise to a maximum of 70 % for outstanding performance. The Compensation Committee also has the option of considering company results as part of the OPM factor (operational performance management) of at least 0.8 and a maximum of 1.3 (compare: 5.3. ”Baloise remuneration system: basic salary and incentive”).
In 2009, the Baloise Group performed well in a demanding market environment. Impairments of investments, low interest rates and the generally higher claims tendency in recessionary phases dampened business performance. The Compensation Committee determined 1.0 as the OPM factor for the 2009 fiscal year taking these aspects into consideration. This factor was applied to the incentives listed in the table on page 74 and paid out in 2010.
In order to strengthen the commonality of interests with the shareholders, the Chairman of the Board of Directors and members of the Corporate Executive Committee must draw at least 50 % of their incentive component as shares (see 5.7 “Share Subscription Plan and Employee Share Ownership Plan”). These obligatory salaries mean that a significant proportion of the remuneration is paid out with a deferred effect as the individual’s responsibility and total remuneration increases.
Performance targets are determined using a multilevel process and approved for the coming year by the Compensation Committee. The Group result, the combined ratio and the business volume serve as objective criteria. Individual targets focus closely on the objectives for the particular areas of responsibility of the respective Corporate Executive Committee members. The weighting of these individual targets in relation to the whole target catalogue can be different for each Corporate Executive Committee member and lies between a quarter and two thirds. Individual targets are set in consultation with the respective supervising managers and likewise subject to approval by the Compensation Committee. Baloise cannot disclose further details or quantification regarding the individual targets or their degree of attainment due to competitive reasons.
In the reporting period, CHF 0.6 million resulting from the conversion of PSU were paid to a former member of the Corporate Executive Committee in the form of 7,047 shares. Half of these shares remains blocked for a further three years.
70 Corporate�Governance Corporate�Governance�Report including�Compensation�Report the variable components, amongst other things, will be determined at the beginning of the year rather than in spring. This will make it possible to show the total remuneration that was awarded in the respective year in the remuneration tables of the compensation report, even if some parts are only paid out at a later date (compliance with the so-called accrual principle ).
The effective figures of the variable components awarded for the 2010 fiscal year (payment in June 2011) had not been determined at the time of printing this compensation report. In the sense of a indication, it can however be said that they will be in a similar range as in 2009.
5.12. Amounts of the total remuneration and the variable payments Compliant with the circular 10 / 1 of the Federal Financial Supervisory Authority on remuneration systems, Baloise publishes the sums of the total remuneration and the variable payments in the table on page 76 for the first time and gives details regarding the amount of outstanding deferred remuneration as well as service entry and departure compensation paid.
The variable remuneration elements awarded for the 2010 fiscal year (outpayment in June 2011) had not been determined when this Compensation Report went to print. For this reason, the details given in this table on “Other variable remuneration elements” including the number of beneficiaries and the split between cash payment and shares / prospective entitlements are based on estimates and experience values from previous years. With the new Performance Management System introduced on 1 January 2011, it will be possible to comply with the Accrual Principle for the first time in the 2011 fiscal year.
72 Corporate�Governance Corporate�Governance�Report including�Compensation�Report reMunerAtIon to the MeMBers of the BoArd of dIrectors 2010 remuneration 2010 remuneration for additional functions remuneration 2010 total 2010 of which: in cash 2010 of which: in shares
chf In % of total remuneration chf chf chf chf number of
� � � � � � � � � � �
total corporate executive committee explanation to the table: compare pages 74 and 75 vorabdruck
reMunerAtIon to the chAIrMAn of the BoArd of dIrectors And the MeMBers of the corPorAte executIve coMMIttee 2010
CEO�Baloise�Group � � � � � � � � � � � � � � � �
chf In % of total remuneration chf chf number of shares chf number of shares
Head�of�Corporate�Division�Finance � � � � � � � � � � � � � � � �
share from converted Psu (2010, page 75) �The�PSU�allocated�in�2007�were�converted�into�shares�as�of�1�January�2010.�At�the�end�of�the�performance� period�on�31�December�2009,�the�performance�of�the�Baloise�share�held�the�13th�rank�of�31�companies�within�the�reference�group�(STOXX�Europe�600�� Insurance�Index),�in�other�words,�it�was�in�the�2nd�quartile.�The�performance�factor�was�thus�1.182�and�the�35,673�outstanding�PSU�were�converted� into�42,169�shares�(market�price�on�31�December�2009:�CHF�86.05,�market�value�CHF�3.6�million)�Half�of�these�shares�remains�restricted�for�three� years�yet.
non-cash benefits��Basis:�all�elements�of�remuneration�in�compliance�with�the�Swiss�salary�certificate.�Besides�gifts�for�length�of�service,�there�are� relocation�expenses�contained�in�the�table�for�new�members�of�the�Corporate�Executive�Committee�(relates�only�to�2009,�page�73),�refunds�of�travel� and�accommodation�expenses�and�non-cash�benefits�(use�of�a�company�car)�of�a�member�of�the�Corporate�Executive�Committee�with�a�secondary� residence�abroad.�Also�sub-totalled�under�non-cash�benefits�is�the�compensation�paid�to�Dr�O.�Noack�in�2009�for�waiving�certain�claims�against�his� former�employer.� Pension provisions �Employer�contributions�to�the�pension�scheme.�Also�contained�in�the�tables:�maintenance�of�invalidity�protection�in�the�home� country�of�a�member�of�the�Corporate�Executive�Committee�with�a�secondary�residence�abroad,�and�non-recurrent�deposits�for�the�benefit�of�� Dr�O.�Noack�for�waiving�certain�claims�against�his�former�employer�(relates�only�to�2009,�page�73).���
total pool �Sum�of�all�variable�remuneration�that�a�finanical�institute�pays�for�a�fiscal�year,�independent�of�form,�of�a�contractual�warranty,�of�the�time� of�allocation�and�payment�as�well�as�any�conditions�and�constraints�set.�Service�entry�and�departure�compensation�paid�in�the�respective�fiscal�year� are�assigned�to�the�total�pool.� service entry compensation �A�one-off�payment�agreed�when�an�employment�contract�is�concluded.�Facultative�compensation�for�forfeited�claims� to�remuneration�from�a�previous�employer�is�also�counted�as�compensation�for�service�entry.� departure compensation �Payment�agreed�regarding�the�termination�of�an�employment�contract.
dr rolf schäuble dr georg f. Krayer dr Michael Becker dr Andreas Burckhardt dr hansjörg frei
Head�of�Corporate�Division� Corporate�Center other members of the corporate executive committee total corporate executive committee explanatory notes to table: credits and loans��No�loans�and�credits�that�are�not�market�standard�have�been�granted�to� a)�former�members�of�the�Board�of�Directors�and�the�Corporate�Executive�Committee, b)�to�individuals�or�companies�related�to�the�Chairman�of�the�Board�of�Directors�or�members�of�the�Corporate�Executive�Board�� (related�individuals:�spouse,�civil�partner,�children�under�18�years,�companies�belonging�to�or�controlled�by�members�of�the�Board� of�Directors�legal�or�natural�persons�who�act�as�a�fiduciary�for�them). Mortgages��Mortgages�up�to�CHF�1�million�are�granted�on�employee�terms:�1�%�below�the�interest�rate�for�customers�on�variable� mortgages,�preferential�interest�rate�for�fixed�mortgages.� loans pertaining to the share ownership Plan��Loans�to�fund�leveraged�Share�Ownership�Plan�(compare�5.7.�Share�Ownership�Plan�and� Employee�Share�Ownership�Plan).�Interest�is�charged�on�the�loans�at�prevailing�interest�rates�(2010:�3�%)�over�a�term�of�three�years.� A�loan�of�CHF�4.1�million�to�a�former�member�of�the�Corporate�Executive�Committee�still�exists�from�the�Share�Ownership�Plan. other loans There�are�no�policy�loans.
explanatory notes to table: shareholdings Including�shares�held�by�related�individuals�(spouse,�civil�partner,�children�under�18�years,�companies�belonging� to�or�controlled�by�Board�members,�or�legal�or�natural�persons�that�act�as�fiduciaries�for�them). freely available shares��Shares�held�in�personal�custody�accounts. restricted shares �Shares�subscribed�for�through�share-based�remuneration�schemes�are�subject�to�a�three-year�blocking�period.� According�to�§�20�of�the�Articles�of�Incorporation,�each�member�of�the�Board�of�Directors�must�deposit�1,000�shares�with�the�company�� for�the�term�of�his�/�her�office�(qualifying�shares).
statutory quorums The Annual General Meeting has a quorum, irrespective of the number of shareholders and proxy votes present, subject to the obligatory cases as prescribed by law (§ 17 of the Articles of Incorporation).
A waiver of statutory voting right restrictions requires a quorum of at least three-quarters of the votes represented at the Annual General Meeting, which at the same time must also total at least one third of all shares issued by the company. This qualified majority also applies to other cases specified in § 17 paragraph 3 a – h of the Articles of Incorporation. Otherwise resolutions are adopted by a simple majority of share-based votes cast, subject to mandatory statutory provisions (§ 17 of the Articles of Incorporation).
convening the Annual general Meeting As a rule, the Annual General Meeting is held in April, but no later than six months after the end of the fiscal year. The Bâloise Holding fiscal year ends on 31 December. At least 20 days’ notice of an Annual General Meeting is given. Every registered shareholder receives a personal invitation and an agenda. The invitation and the agenda are published in the Swiss Official Gazette of Commerce, in various newspapers and on the Internet.
Inclusion of agenda items One or more shareholders, who together represent shares with a face value of at least CHF 100,000 may apply under article 699 section 3 of the Swiss Code of Obligations to have items placed on the agenda. Such applications must be submitted in writing to the Board of Directors no later than six weeks before the regular Annual General Meeting, detailing the motions to be put to the Annual General Meeting (§ 14 of the Articles of Incorporation).
entry in the share register Shareholders, who are registered with an entitlement to vote in the share register on the cut-off date (a few days prior to the Annual General Meeting) specified by the Board of Directors in the invitation, are entitled to vote at the Annual General Meeting (§ 16 of the Articles of Incorporation).
The admissibility of nominee registrations, with reference to possible percentage clauses, and registration requirements are governed by § 5 of the Articles of Incorporation. Procedures and requirements for revoking and restricting transferability are governed by the provisions of § 5 and § 17.
www.baloise.com → Responsibility → Corporate Governance → Rules and regulations www.baloise.com → Investor relations → IR agenda.
81Corporate�Governance Corporate�Governance�Report including�Compensation�Report 7. chAnge of control And defensIve ActIon Upon acquiring 33 % of all Baloise shares, shareholders or groups of shareholders acting in concert are obliged to submit a takeover bid to all remaining shareholders. Bâloise Holding has not opted to modify or waive this rule. There is neither a statutory opting-out nor opting-up clause, as specified in the Federal Stock Exchanges and Securities Trading Act (Stock Exchange Act).
8. AudItors The auditors are appointed annually by the Annual General Meeting. PricewaterhouseCoopers AG (PwC) and its pre- decessor Schweizerische Treuhandgesellschaft / STG-Coop- ers & Lybrand have been the auditors of Bâloise Holding Ltd since 1962. Mr Martin Frei has been the Auditor in Charge since 2007. The rotation of the auditor in charge takes place every seven years compliant with article 730a section 2 of the Swiss Code of Obligations. PwC has audited nearly all Group companies since 2005.
The Audit Committee evaluates the performance of the external auditors and their cooperation with Group Internal Audit, Risk Management and Compliance. The Audit Committee primarily discusses ongoing audits and audit reports, important results and any issues arising from the audit with the external auditors.
→→ Competence of the audit team →→ Technical and industry knowledge →→ Understanding of corporate strategy →→ Complete independence whilst performing the audit →→ Corporate culture of the auditor (shared core values) →→ Timely reporting →→ Appropriateness of fees →→ Compliance with respective statutory, professional and ethical standards →→ Uniform auditing methodology
The Audit Committee reviews the appropriateness of auditing services performed by external auditors, which are not related to the auditing activities, based on the following criteria: →→ Compatibility of the service with the mandate as statutory auditors (independence)
9. InforMAtIon PolIcy Information principles The Baloise Group provides comprehensive, transparent information to shareholders, potential investors, employees, clients and the general public on a regular basis. All registered shareholders receive a summary of the Annual Report once a year and a shareholder’s letter with the half-year accounts, which comments on business development. The Annual Report and the Financial Report are sent to the shareholders upon request. All publications are made available to the general public at the same time. All investors enjoy equal information rights. To provide general access to our meetings with financial analysts, we use technologies such as webcasts, podcasts and telephone conferences.
→→ Baloise maintains good relationships with analysts, investors and the media.
→→ Full details about individual Baloise events are available at www.baloise.com.
www.baloise.com → Investor relations → IR agenda document availability Media releases, disclosures, presentations, annual reports, financial reports and half-year reports and other documents are publicly available on the Internet at www.baloise.com. All documents can be obtained from the Investor Relations department or ordered on the Internet.
www.baloise.com → Media relations → Media kits contact The contact details for Corporate Governance and Investor Relations are listed on the inside cover of the Annual Report.
Premiums earned and policy fees (net) 6,519.1 6,672.3 6,750.6 6,651.2 6,686.1
Realised gains and losses on investments 2 702.8 597.5 – 1,680.1 435.6 501.6
Results from investments in associates 62.0 10.2 8.5 1.4 – 0.5 expenses
Claims and benefits paid (gross) – 5,325.0 – 5,597.9 – 5,676.7 – 5,383.4 – 5,212.9
Change in technical reserves (gross) – 1,080.8 – 840.2 583.4 – 968.3 – 1,393.2
Profit before borrowing costs and taxes 941.4 1,042.9 579.9 562.1 607.2
Gross premiums written and policy fees 6,716.5 6,868.4 6,953.9 6,859.8 6,859.8
Financial assets of an equity nature 10,902.3 12,144.0 7,551.8 9,486.1 9,844.2
Financial assets of a debt nature 24,523.3 24,433.3 23,115.6 26,502.7 25,840.5 in CHF million equity and liabilities equity liabilities
Business volume 2009 group switzerland germany Belgium luxembourg other units 2 in CHF million subtotal of iFrs gross premiums written 1 6,859.8 3,897.8 1,882.5 700.9 107.7 243.0
Business volume 2010 group switzerland germany Belgium luxembourg other units 2 in CHF million subtotal of iFrs gross premiums written 1 6,859.8 4,076.9 1,731.6 668.7 133.1 231.1 1 Premiums written and policy fees (gross). 2 Other units: Austria, Croatia, Serbia and Baloise Life Liechtenstein.
ComBined ratio gross 2009 group switzerland germany Belgium luxembourg other units 1 as a percentage of premiums earned
ComBined ratio gross 2010 group switzerland germany Belgium luxembourg other units 1 as a percentage of premiums earned 1 Other units: Austria, Croatia and Serbia.
Change in unearned premium reserves – 18.3 – 5.5 0.0 0.0
Change in loss reserve / actuarial reserves 1 16.6 – 56.2 – 726.1 – 966.9
In the 2010 fiscal year, premium income was depressed due to Swiss franc / euro exchange rate performance, as compared to the same period in the previous year.
92 Financial Information Banking activities result From BanKing aCtivities in CHF million
Total interest expenses – 94.2 – 83.0 net interest income 100.3 99.2
Total operating expenses – 93.8 – 83.6 gross result 65.0 76.4
Risk-weighted assets: banking activities 3,378.2 3,429.4 asset alloCation in CHF million
Change in unrealised gains and losses on equity investment PerFormanCe 2010 1
Change in unrealised gains and losses on equity 1 Excluding assets for the account and at the risk of life insurance policyholders.
Current inCome, insuranCe 1 2009 2010 nonlife life total nonlife life total in CHF million
realised gains and losses, insuranCe 1 2009 2010 nonlife life total nonlife life total in CHF million
Liabilities to third parties 0.0 0.0 total equity and liabilities 2,162.7 2,140.2
Notes Bâloise Holding 1. aCCounting standards The annual accounts of Bâloise Holding are produced in accordance with the regulations of the Swiss Code of Obligations.
receivables Receivables are stated at face value net of necessary im- pairments.
loans to group companies Loans are valued at face value, factoring in requisite depreciation. Individual value adjustments are conducted according to the prudence principle for all identifiable risks.
other financial assets Marketable securities are recognised either at their purchase price or at fair value, with the lower of the two being applied.
99Bâloise Holding Notes Bâloise Holding notes to the inCome statement 2. interest and seCurities inCome in CHF million
Other interest receivables 4.3 2.8 total interest and securities income 9.6 11.9 3. other inCome in CHF million
Other income 7.3 6.8 total other income 9.3 8.8 4. administrative eXPenses in CHF million
Other administrative expenses – 20.4 – 18.9 total administrative expenses – 49.8 – 51.4 5. interest eXPenses in CHF million
Depreciation on treasury shares – 0.3 – 0.0 total depreciation – 0.3 – 0.0 7. other eXPenses in CHF million
For additional information on participations held directly by Bâloise Holding see pages 144 and 145 of the 2010 Financial Report.
102 Bâloise Holding Notes Bâloise Holding 12. Changes in eQuity in CHF million share capital
Bank of New York Mellon N.V. 1 <2.0 0.0 2.2 0.0
State of New Jersey Common Pension Fund 2.0 2.0 0.0 0.0 1 Custodian nominees who hold shares in trust for third parties are added to the free float pursuant to the SIX Exchange regulations. Such shareholder groups are not subject to registration pursuant to stock exchange law.
14. Contingent liaBilities As of 31 December 2010, the guarantee liabilities amount to CHF 164.9 million (previous year: CHF 128.6 million).
Bâloise Holding assumes the unrestricted obligation to ensure the Landesbank Baden-Wurttemberg that the Partner in Life S.A., Contern (Luxembourg) will be managed and financially equipped so that it is able to meet all its obligations towards the bank in due time whilst the loans amounting to EUR 40 million granted by the bank including interest, costs and commissions are not fully repaid.
15. Payments in aCCordanCe with or (swiss Code oF oBligations) artiCles 663BBis and 663C Information on remuneration to the Board of Directors or persons fully or partially entrusted with management duties by the Board of Directors is stated in the Baloise Group’s Consolidated Annual Financial Statements.
Appropriation of retained earnings as proposed by the Board of Directors vorabdruck
actuarial reserves Actuarial reserves refer to provisions for current insur- ance policies in the life insurance segment.
annual premium equivalent (aPe) The annual premium equivalent is the insurance industry standard for measuring the volume of new life insur- ance business. It is calculated as the sum of all annual premiums from new business and 10 % of single premiums of the reporting period.
assets managed for third parties Assets held in trust for customers and partners.
Claims incurred Claims incurred comprises insurance claims paid out during the fiscal year, reserves formed in connection with unsettled claims, the dissolution of reserves for claims that no longer have to be settled or do not have to be paid in full, the costs of processing claims, as well as the performance of related provisions.
deferred tax assets and liabilities Probable future tax expenses and tax relief, resulting from temporary differences between the reported value of assets and liabilities, as disclosed in the consolidated financial statements, and their tax value. The calculation is based on country-specific tax rates.
embedded value (mCev) The Market Consistent Embedded Value (MCEV) mea- sures the value of a life portfolio for the shareholder on the balance sheet date. See also separate MCEV report.
gross In the annual report of an insurance company, “gross” stands for a balance sheet or income statement item before the deduction of of reinsurance.
investment-type life insurance Life insurance policies where policyholders invest their savings for their own account and at their own risk.
investment-type premiums Premium income from life insurance policies where insurance companies invest the policyholder’s savings for the latter’s own account and at the latter’s own risk. In accordance with the International Accounting Standards applied by the Baloise Group, the savings that are part of this premium income may not be disclosed as income in the income statement.
loss ratio The ratio of claims incurred to premiums, expressed in percent.
Profit after taxes Profit after taxes is the final consolidated sum of all earnings and expenses, less borrowing costs, as well as current and deferred income taxes. Profit after taxes in- cludes the proportion of minority interests in the result.
Profit-sharing ratio Index expressing the profit-sharing / premium ratio. Profit sharing is a rebate granted to policyholders in the nonlife business due to profitable business.
net In the annual report of an insurance company “net” stands for a balance sheet or income statement item after the deduction of reinsurance.
Premiums earned The proportion of the policy premium allocated to the risk covered by an insurer during the fiscal year, i. e. premium less change in unearned premium reserves.
segment Financial reporting at the Baloise Group is carried out in accordance with International Financial Accounting Standards (IFRS), which requires similar transactions and business activities to be grouped and presented together. The bundled business activities are presented in “segments,” by geographic regions and business segments.
share buy-back programme Procedure approved by the Board of Directors under which the company itself may repurchase outstanding shares. In Switzerland, these buy-backs are carried out through a separate trading line.
shares issued Total number of shares that a company has issued. The total number of shares issued, multiplied by their face value is the nominal share capital of the company.
sli The Swiss Leader Index comprises the 30 largest and most liquid securities in the Swiss equity market.
scoring Scoring stands for statistical analyses, whereby risk estimates based on experience values are derived from data collected. Insurers apply scoring in order to tariff equitably.
unrealised gains and losses (charged to equity) Unrealised gains and losses are gains or losses charged to equity, which are not recognised in profit or loss and result from the valuation of assets. These are charged to equity after deducting deferred tax assets and liabilities and deferred policyholders’ dividends (life insurance business). These gains or losses are only transferred to the income statement upon disposal of the underlying asset or upon impairment (impairment loss).
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The 2010 Financial Report contains the audited 2010 annual financial statements with detailed information. It is available in German and in English. The German version is binding.
availaBility and ordering The 2010 Annual Report and the 2010 Financial Report are available on the Internet at www.baloise.com/annualreport as of 22 March 2011.
inFormation For shareholders and FinanCial analysts You can find detailed information and data on the Baloise share, the IR agenda, the latest presentations and how to contact Investor Relations on the Internet at www.baloise. com/ investors. The information is available in German and English.
Publisher Baloise, Corporate Communications Concept, design Eclat, Erlenbach (ZH) Photography Christian Grund and Stephan Knecht, Zurich Publishing system Multimedia Solutions AG, Zurich Printing UD Print AG, Lucerne
We would like to express special thanks to Dr Heidi Bächli, Ueli Steck and Mihovil Španja for their valuable support.
note on Forward-looKing statements This publication is intended to provide an overview of Baloise’s business performance. It contains forward-looking statements including forecasts of future events, plans, goals, business developments and results based on the current expectations and assumptions of Baloise management. These forward-looking statements should be used with due caution as they contain both known and unknown risks. They also contain uncertainties and may be affected adversely by other factors. In consequence, business performance, results, plans and goals could differ materially from those presented explicitly or implicitly in these forward-looking statements. Influencing factors include (i) changes in the overall state of the economy, especially in key markets; (ii) financial market performance; (iii) competitive factors; (iv) changes in interest rates; (v) changes in exchange rates; (vi) changes in the statutory and regulatory framework including accounting standards; (vii) frequency and magnitude of claims and development of claims history; (viii) mortality and morbidity rates; (ix) renewals and maturity of insurance policies; (x) legal disputes and administrative proceedings; (xi) departure of key employees; (xii) negative publicity and media reports.
22.3.2011 Annual results: media conference telephone conference financial analysts 29.4.2011 Bâloise Holding Ltd Annual General Meeting 30.8.2011 Half-year results: telephone conference media / financial analysts 21.3.2012 Annual results: media conference telephone conference financial analysts 27.4.2012 Bâloise Holding Ltd Annual General Meeting