Balance as at 31 December cHF million tax credits and losses carried forward 74.3 17.0 – – 0.0 2.3 93.7 liabilities arising from banking business and financial contracts liabilities arising from employee benefits 67.5 – 13.2 – – – 4.9 59.2 1 as a result of the transfer of the intercompany reinsurance activities of Baloise insurance Bermuda to Switzerland, tax assets of cHF 26.9 million were recognised in 2016.
Balance as at 31 December cHF million long-term equity investments 43.1 – 3.4 – – – – 0.1 39.6
Balance as at 31 December cHF million long-term equity investments 39.6 9.9 – – – 0.6 50.2 the Baloise Group reports its deferred taxes on a net basis. Deferred tax assets and liabilities are offset against each other in cases where the criteria for such offsetting have been met. this is usually the case if the tax jurisdiction, the taxable entity and the type of taxation are identical.
Baloise Group annual Report 2017 Financial Report the Baloise Group had recognised deferred tax assets on tax loss carryforwards totalling cHF 272.6 million as at 31 December 2017 (2016: cHF 195.1 million). of this total, cHF 0.5 million will expire after one year, 0.0 million after two to four years and cHF 272.1 million will expire after five years or more.
Total (net) – 875.6 – 833.6 of which: recognised as deferred tax assets 69.3 88.8 of which: recognised as deferred tax liabilities – 944.9 – 922.4 20. OTHER ASSETS
Development properties – 144.7 other assets 25.9 32.0 impairments – – 5.3
the sale of this portfolio to the Frankfurter leben Group was approved by the German Federal Financial Supervisory authority (BaFin) on 5 January 2017. the transfer was completed on 3 February 2017. the financial implications are provided in the “acquisition and disposal of companies” section in chapter 39.
in the year under review, the following events took place that satisfy the criteria for iFRS 5: on 14 December 2017, it was publicly announced that Basler lebensversicherungs-aG, based in Hamburg, and Basler Sachversicherungs -aG, based in Bad Homburg, in collaboration with SiGnal iDUna Krankenversicherung a.G., Dortmund, was selling its long-term equity investment in Deutscher Ring Bausparkasse aG to the BaWaG p.S.K. in Vienna. the reclassification of assets and liabilities affects the Banking segment in Germany.
an agreement was signed on 18 December 2017, under which Basler Beteiligungsholding GmbH is selling its long-term equity investment in RolanD Rechtsschutz Beteiligung GmbH. this reclassification affects the other activities operating segment.
purchase / sale of treasury shares – 964,595 964,595 – –
the annual General Meeting held on 28 april 2017 voted to pay a gross dividend of cHF 5.20 per share forthe 2016 financial year. this amounted to a total dividend distribution of cHF 260.0 million. excluding the treasury shares held by Bâloise Holding ltd at the time that the dividend was paid, the total distribution effectively amounted to cHF 248.5 million.
Baloise Group annual Report 2017 Financial Report 23. TECHNICAL RESERVES (GROSS)
Technical reserves (non-life) 5,986.4 6,318.8 actuarial reserves (gross) 36,813.2 38,008.1 policyholders’ dividends credited and provisions for future policyholders’ dividends (gross) 3,409.4 3,681.5
Gross Reinsurance assets Net Gross Reinsurance assets Net cHF million claims reserve 4,787.3 – – 5,082.5 – –
Gross Reinsurance assets Net Gross Reinsurance assets Net cHF million less: premiums earned during the reporting period – 3,109.7 149.8 – 2,959.9 – 3,214.4 162.6 – 3,051.8 additions arising from acquisition of policy portfolios and insurance companies
Baloise Group annual Report 2017 Financial Report 23.1.4 Claims reserve (including claims handling costs)
the relevant net reserves included in the total amounted to cHF 74.2 million at the end of 2017 (2016: cHF 81.3 million). the decrease was attributable to commutations of reserves and currency effects.
Baloise Group annual Report 2017 Financial Report 23.2.1 Maturity structure of technical reserves cHF million
Actuarial reserves from non-unit-linked life insurance contracts no determinable residual term 8,812.4 9,229.9
Balance as at 1 January 33,159.2 33,553.2 change in actuarial reserves 508.0 – 55.3 additions arising from acquisition of policy portfolios and insurance companies – –
Balance as at 1 January 2,622.7 2,727.3 interest on and change in liabilities 80.2 175.6 additions arising from acquisition of policy portfolios and insurance companies – –
Balance as at 31 December 2,727.3 3,108.1 notes to the consolidated annual financial statements
Balance as at 1 January 201.5 185.1 adjustment arising from unrealised gains and losses as at 1 January (shadow accounting) – 8.0 – 7.0 interest on and change in liability 8.6 6.2
Final policyholders’ dividends paid – 22.5 – 20.8 additions arising from acquisition of policy portfolios and insurance companies – –
Balance as at 31 December 347.6 390.7 notes to the consolidated annual financial statements
Baloise Group annual Report 2017 Financial Report 24. LIABILITIES ARISING FROM BANKING BUSINESS AND FINANCIAL CONTRACTS
Financial contracts with discretionary participation features (DpFs)1 2,317.4 2,814.2 – –
Measured at amortised cost liabilities arising from time deposits 6.1 – 6.1 –
liability for future financial lease payments (present value) 0.0 0.0 0.0 0.0
Total liabilities arising from banking business and financial contracts 20,317.7 22,696.5 – –
1 there are currently no internationally accepted mathematical methods available for determining the fair value of financial contracts with discretionary participation features (DpFs).
the other financial contracts designated as at fair value through profit or loss largely relate to the life insurance liability arising from investment-linked life insurance contracts involving little or no transfer of risk. the year-on-year change in this liability consists entirely of the funds flowing into and out of the pertinent investment portfolio, the latter’s market-related price fluctuations and exchange-rate movements.
Disposals / repayments / conversions – 242.4 – 225.0 interest expenses 38.0 34.3
the bond of cHF 225.0 million (1.0 per cent, 2012 – 2017, iSin cH0188295536) was redeemed in full on 12 october 2017.
Restructuring Other Total Restructuring Other Total cHF million addition arising from change in scope of consolidation – – – – 0.6 0.6
Unused provisions reversed through profit or loss – 1.1 – 11.0 – 12.1 – 0.8 – 15.2 – 16.0
Usage not recognised in profit or loss – 10.7 – 11.1 – 21.8 – 5.6 – 2.5 – 8.1
cHF million liabilities to policyholders 1,255.0 1,350.3 liabilities to brokers and agents 126.2 147.9 liabilities to insurance companies 167.4 186.7 other insurance liabilities 16.6 21.3
Premiums earned and policy fees (gross) 3,109.7 3,570.9 6,680.6 3,214.4 3,512.0 6,726.4
Reinsurers’ share of change in unearned premium reserves 0.2 – 0.2 1.7 – 1.7
Total premiums earned and policy fees (net) 2,959.9 3,552.4 6,512.4 3,051.8 3,491.1 6,542.9 29. INCOME FROM INVESTMENTS FOR OWN ACCOUNT AND AT OWN RISK
Financial assets of an equity nature available for sale 128.1 126.5
Recognised at fair value through profit or loss 14.6 13.1 cash and cash equivalents – 0.6 – 1.6
Held to maturity1 – – 0.3 – – 0.3 available for sale – 148.8 440.2 – – 589.0
Recognised at fair value through profit or loss – 52.6 – 6.7 474.1 533.4 carried at cost – – – 42.5 – 42.5
Recognised at fair value through profit or loss – – 8.3 – 2.9 – 22.7 – 643.4 – 677.2 carried at cost – – – – 4.6 – – 4.6
available for sale – – 108.2 – 0.3 – – – 108.5 carried at cost – – – – 10.5 – – 10.5
Total realised gains and losses on investments 59.7 43.2 356.0 13.5 – 169.3 303.1 1 currency effects relating to held-to-maturity financial assets of a debt nature are reported as realised book profits and / or realised book losses.
Baloise Group annual Report 2017 Financial Report 30.2 Realised gains and losses on investments for own account and at own risk
Held to maturity1 – – 141.2 – – 141.2 available for sale – 284.6 467.8 – – 752.4
Recognised at fair value through profit or loss – – 23.3 – 1.1 – 12.6 – 753.7 – 790.8 carried at cost – – – – 0.1 – – 0.1
available for sale – – 27.3 – – – – 27.3 carried at cost – – – – 1.5 – – 1.5
Baloise Group annual Report 2017 Financial Report 30.3 Impairment losses on financial assets recognised in profit or loss cHF million
Impairment losses on mortgages and loans recognised in profit or loss policy loans – –
Total impairment losses on financial assets recognised in profit or loss – 119.0 – 28.8 30.4 Currency gains and losses excluding exchange-rate losses on transactions involving financial instruments that are recognised at fair value through profit or loss, a currency gain of cHF 98.0 million was reported for 2017 (2016: gain of cHF 45.5 million).
a gross currency gain of cHF 116.6 million was recognised directly in equity for the reporting year (2016: loss of cHF 2.2 million). allowing for hedges of a net investment in a foreign operation (hedge accounting), a net gain of cHF 194.8 million was recognised for 2017 (2016: net loss of cHF 17.5 million).
Baloise Group annual Report 2017 Financial Report 31. INCOME FROM SERVICES RENDERED
cHF million interest income from insurance and reinsurance receivables 12.3 19.9 other interest income 1.2 0.8
Other operating income 136.8 235.0 1 opposite negative effect on earnings of cHF – 8.8 million as a result of applying the deferred gains / losses for policyholders’ dividends (note 39).
Baloise Group annual Report 2017 Financial Report 33. CLASSIFICATION OF EXPENSES
cHF million personnel expenses (excluding loss adjustment expenses) – 753.7 – 801.4
Depreciation and impairment of property, plant and equipment – 31.9 – 32.3 amortisation and impairment of intangible assets – 31.3 – 50.4 it and other equipment – 63.6 – 73.4 expenses for rent, maintenance and repairs – 43.1 – 42.7 losses arising from exchange differences in respect of assets and liabilities – 2.8 – 41.1 commission and selling expenses – 526.7 – 544.2
in 2017, the expense arising on development projects resulting from the acquisition of pax anlage aG and pax Wohnbauten aG (renamed Baloise Wohnbauten aG) was recognised for the first time. the corresponding income for this expense is recognised in other operating income (note 32).
Baloise Group annual Report 2017 Financial Report 35. GAINS OR LOSSES ON FINANCIAL CONTRACTS
Financial contracts with discretionary participation features (DpFs) – 52.7 – 49.7
Measured at amortised cost interest on loans 0.0 – 0.1 interest due – 6.7 – 9.4 interest arising from banking business – 16.3 – 12.1 interest expenses on repurchase agreements 4.7 6.8 acquisition costs in banking business – 15.7 – 19.8 expenses arising from financial contracts – 13.7 – 11.1
change in fair value of other financial contracts – 242.5 – 518.1
Total gains or losses on financial contracts – 342.9 – 613.4
Of which: gains on interest rate hedging instruments interest rate swaps: cash flow hedges, balance carried forward from cash flow hedge reserves – –
Total current and deferred income taxes – 111.7 – 117.9 36.2 Expected and current income taxes the expected average tax rate for the Baloise Group was 25.6 per cent in 2016 and 18.8 per cent in 2017. these rates correspond to the weighted average tax rates in those countries where the Baloise Group operates.
cHF million profit before taxes 645.6 649.8 expected average tax rate (per cent) 25.63 % 18.81 %
Current income taxes – 111.7 – 117.9 notes to the consolidated annual financial statements
profit for the period attributable to shareholders (cHF million) 534.8 548.0 average number of shares outstanding 46,381,359 47,641,577
the dilution of earnings was attributable to the performance Share Units (pSU) share-based payment plan and in they year 2016 the convertible bond issued by Bâloise Holding ltd.
Gains and losses arising during the reporting period – 14.8 72.7
Total hedging reserves for derivative financial instruments held as hedges of a net investment in a foreign operation – 15.3 78.1
Gains and losses reclassified to the income statement – 1.1 – 2.6
Total other comprehensive income – 103.0 316.6 notes to the consolidated annual financial statements
Baloise Group annual Report 2017 Financial Report 38.2 Income taxes on other comprehensive income cHF million
Reserves arising from reclassification of held-to-maturity financial assets 0.3 0.8 change arising from shadow accounting – 2.6 – 50.1 change arising from exchange differences 2.9 – 16.5 additions and disposals arising from change in the scope of consolidation – – 0.1
Total deferred income taxes of items to be reclassified to the income statement – 14.8 38.1
Other comprehensive income after deferred income taxes – 103.0 316.6 notes to the consolidated annual financial statements
Baloise Group annual Report 2017 Financial Report notes to the consolidated annual financial statements 39. ACQUISITION AND DISPOSAL OF COMPANIES
Goodwill / negative goodwill or proceeds from disposals – 12.7 – – 21.7 cash and cash equivalents used / received for acquisitions and disposals – – 262.6 – 37.7 cash and cash equivalents acquired / disposed of – 99.3 – –
Outflow / inflow of cash and cash equivalents – – 163.3 – 37.7 1 this includes primarily historical cumulative exchange differences.
Baloise Group annual Report 2017 Financial Report notes to the consolidated annual financial statements the purchase price for Movu aG in Switzerland was cHF 25.6 million. of this amount, cHF 18.3 million was paid in cash and cHF 7.3 million was paid in other forms of consideration. Goodwill of cHF 21.8 million was recognised in connection with the acquisition. the goodwill essentially comprises expected future income. the goodwill is not tax-deductible and is allocated to the non-life segment in Switzerland.
the purchase price for Drivolution nV in Belgium was cHF 2.0 million and was paid in cash. Goodwill of cHF 1.2 million was recognised in connection with the acquisition. it is allocated to the non-life segment in Belgium.
the acquisitions and disposals had no material effect for the year profit 2017. this table does not include purchases of real-estate companies that, according to the provisions of iFRS 3 Business combinations, do not constitute a business, which means that these purchases are classified as the acquisition of assets. that is why the outflows and inflows of cash and cash equivalents vary from the presentation in thecash flow statement. Further explanations are provided in note 6 (changes to the group of consolidated companies).
Baloise Group annual Report 2017 Financial Report notes to the consolidated annual financial statements 40. RELATED PARTY TRANSACTIONS as part of its ordinary operating activities the Baloise Group conducts transactions with associates and with members of Bâloise Holding ltd’s Board of Directors and corporate executive committee. the terms and conditions governing such transactions can be found in the Remuneration Report as part of corporate governance (page 80 to 107).
the executive management team consists of the members of Bâloise Holding ltd’s Board of Directors and corporate executive committee.
Premiums earned and policy fees Investment income Expenses Mortgages and loans Liabilities cHF million
Short-term employee benefits – 7.4 – 7.7 post-employment benefits – 1.2 – 1.3 payments under share-based payment plans – 3.6 – 3.2 19,037 shares worth cHF 2.5 million were repurchased from members of the corporate executive committee in 2017 (2016: cHF 4.2 million) under the Share participation plan (section 18.4.3).
41. REMUNERATION PAID TO THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE COMMITTEE the information to be disclosed in accordance with sections 663b (bis) and 663c of the Swiss code of obligations (oR) is contained in the Remuneration Report, which can be found on pages 80 to 107 in the part of corporate governance. the key information disclosed here includes: ▸ Remuneration paid to the members of the Board of Directors ▸ Remuneration paid to the members of the corporate executive committee ▸ loans and credit facilities granted to members of the Board of Directors and the corporate executive committee ▸ Shares held by members of the Board of Directors and the corporate executive committee
the corporate executive committee is not aware of any new circumstances having arisen since the last balance sheet date that could have a material impact on the consolidated annual financial statements for 2017.
42.1.2 Guarantees and collateral for the benefit of third parties the Baloise Group has issued guarantees and provided collateral to third parties. these include obligations – in contractually specified cases – to make capital contributions or payments to increase the amount of equity, provide funds to cover principal and interest payments when they fall due, and issue guarantees as part of its operating activities. the Baloise Group is not aware of any cases of default that could trigger such guarantee payments.
or no rating Total cHF million 31.12.2017 AAA AA A BBB Lower than BBB
or no rating Total cHF million 42.1.3 Pledged or ceded assets, securities-lending assets and collateral held
Total commitments undertaken 1,200.3 1,187.5 of which: in connection with joint ventures – –
Baloise Group annual Report 2017 Financial Report notes to the consolidated annual financial statements 43. OPERATING LEASES 43.1 The Baloise Group as a lessee the Baloise Group has entered into non-cancellable leasing arrangements to lease buildings, vehicles and operating equipment. the average residual term of its leases is between three and five years.
Leasing expenses – 3.4 – 3.3 income from sub-leases during the reporting period – –
Unterkapitel 44. CLAIM PAYMENTS RECEIVED FROM NON-GROUP INSURERS the companies in the Baloise Group received claim payments totalling cHF 0.1 million in 2017 (2016: cHF 0.1 million) from non-Group insurers in connection with insurance contracts under which the Baloise Group companies are themselves policyholders. Most of these claim payments were made for damage to buildings in Switzerland where, depending on the building’s location, mandatory insurance cover is provided by government agencies.
Unterkapitel 45. SIGNIFICANT SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES entities are defined as significant if they either individually or together contribute a significant proportion of the gross premiums, net income or total assets of the Baloise Group. other long-term equity investments may be included for qualitative reasons, e. g. they are listed on a stock exchange.
Bâloise Holding ltd, Basel Holding o Holding Holding F cHF 4.9 2,131.5 –
Baloise Wohnbauten aG, Basel other l 84.88 100.00 F cHF 1.0 366.4 –
Baloise Bank SoBa aG, Solothurn Banking B 100.00 100.00 F cHF 50.0 7,526.0 –
Haakon aG, Basel other o 74.75 74.75 F cHF 0.2 56.3 –
RolanD Rechtsschutz Beteiligung GmbH, cologne other o 60.00 60.00 F eUR 0.1 35.6 –
Merno-immo nV, antwerp other nl 100.00 100.00 F eUR 17.1 24.5 –
Baloise alternative investment Strategies limited, St. Helier (Jersey / channel islands)
1 l: life, nl: non-life, B: Banking, o: other activities / Group business. 2 Shares stated as a percentage are rounded down. 3 F: Full consolidation, e: equity-accounted investment.
47. CONSOLIDATED STRUCTURED ENTITIES the Baloise Group held one consolidated structured entity – Baloise Fund invest (lux) – at the end of the reporting year. Baloise Fund invest (lux) is a luxembourg-based firm in the legal form of an investment company with variable capital (SicaV managed by a third party). Baloise Fund invest (lux) is an umbrella fund consisting of various pools of assets and liabilities (or “sub-funds”), with each sub-fund pursuing its own investment policy. Baloise Fund invest (lux) and its sub-funds collectively constitute a legal entity. However, each sub-fund is deemed to be a separate entity as far as the legal relationship between unitholders is concerned. a sub-fund’s assets are liable to third parties only for the liabilities and obligations relating to this sub-fund.
the prime objective of Baloise Fund invest (lux) is to enable unitholders to benefit from professional management strategies based on the principle of risk diversification in line with each sub-fund’s specified investment policy. the holding of units in Baloise Fund invest (lux) does not give rise to any contractual obligations. there are no arrangements that oblige the Baloise Group to provide financial support to the consolidated entity Baloise Fund invest (lux), and no voluntary financial or other support was provided during the reporting year.
48. JOINT ARRANGEMENTS there were no joint arrangements in 2017 and in 2016.
49. EVENTS AFTER THE BALANCE SHEET DATE By the time that these consolidated annual financial statements had been completed on 21 March 2018, we had not become aware of any further events that would have a material impact on the consolidated annual financial statements as a whole.
Phone: +41 58 286 86 86 Fax: +41 58 286 86 00 www.ey.com/ch
We have audited the consolidated financial statements (pages 112 - 260) of Bâloise Holding Ltd and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at 31 December 2017, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement, the consolidated statement of changes in equity for the year then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.
Inappropriate valuation of the claims reserves non-life could result in a misstatement to the financial statements of the Group and its overall financial position. The valuation of claims reserves non-life involves a significant amount of Management’s judgement. The selection of methodology, underlying assumptions and input parameters may significantly affect the annual result and the Group’s equity position.
As part of the audit of the significant portfolios, we involved our non-life insurance actuarial specialists to independently assess the methodology and the underlying assumptions used by Management. Our assessment of the claims reserves included an independent valuation and a comparison to the Group’s financial statements.
We further assessed the operating effectiveness of selected key controls over the input parameters and the mathematical correctness of the actuarial calculations. In addition, we evaluated the required disclosures in the notes to the financial statements.
Inappropriate valuation of the life insurance technical reserves could result in a misstatement to the financial statements of the Group and its overall financial position. The valuation of technical reserves for life insurance contracts involves a significant amount of Management’s judgement. The selection of methodology, underlying assumptions and input parameters may significantly affect the annual result and the Group’s equity position.
Management discloses the valuation principles used in the recognition of technical reserves for life insurance contracts in note 5 “Management of insurance and financial risk” and note 5.5.2 “Assumptions”. The impact of various scenarios is described in note 5.4.4 “Sensitivity analysis”. We also refer to notes 3.19 and 23.2 on pages 137 to 139 and 231 to 235 of the Group’s financial statements.
We assessed and tested the design and the operating effectiveness of key controls related to the valuation of investment properties, including the controls over the review of the models and the model parameters. We engaged real estate valuation specialists to independently assess the valuation of selected investment property positions.
For a sample of equity instruments and derivative financial instruments without publically available market prices, we identified the market data input used by the Group and tested it against independent data. For complex products, we engaged our internal valuation specialists to perform an independent calculation. In addition, we evaluated the required disclosure in the notes to the financial statements.
Responsibility of the Board of Directors for the consolidated financial statements The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS and the provisions of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
A further description of our responsibilities for the audit of the consolidated financial statements is located on the website of EXPERTsuisse: report-for-public-companies. The description forms part of our auditor’s report.
Report on other legal and regulatory requirements In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.
Report of the statutory auditor this page has been left empty on purpose.
Bâloise Holding Ltd income statement of Bâloise Holding ltd ........................ 270 Balance sheet of Bâloise Holding ltd .............................. 271 notes to the financial statements of Bâloise Holding ltd . 272 appropriation of distributable profit as proposed by the Board of Directors ................................................ 281 Report of the statutory auditor to the annual General Meeting of Bâloise Holding ltd, Basel ..... 282 4 Baloise 16 Review of operating performance 36 Sustainable business management 58 corporate Governance 110 Financial Report 268 Bâloise Holding Ltd 286 General information
Equity and liabilities current liabilities liabilities to Group companies 8.5 3.4 liabilities to third parties 0.0 1.6 current interest-bearing liabilities to third parties 225.0 –
General these annual financial statements of Bâloise Holding ltd domiciled in Basel have been prepared in accordance with the provisions of Swiss accounting law (title 32 of the Swiss code of obligations). the main policies applied which are not prescribed by law are described below.
Receivables from Group companies this line item includes expenses relating to the new financial year that have been paid in advance and income from the reporting year that will not be received until a later date. it also comprises dividends approved by subsidiaries’ annual general meetings at the balance sheet date, which Bâloise Holding reports as dividends receivable. they are recognised at their nominal amount.
Receivables from third parties Receivables are recognised at their nominal amount less any impairment losses.
Long-term equity investments long-term equity investments are recognised individually at cost less any impairment losses.
Deferred income and accrued expenses this line item comprises income relating to the new financial year that has already been received, as well as expenses relating to the reporting year that will not be paid until a later date.
Provisions provisions to cover any risks that may arise are recognised in accordance with the principles of risk-based management and are charged to the income statement.
Treasury shares treasury shares are recognised at cost on the date of acquisition as deductions from equity. if the shares are subsequently sold, any gains or losses are recognised in profit or loss as financial income or expense.
cHF million income from treasury shares 13.1 6.7 interest on loans to Group companies 3.7 3.7
Realized income treasury shares 85.2 23.4 other income from interest and securities 0.0 –
Total income from interest and securities 102.0 33.8 3. ADMINISTRATIVE EXPENSES
Total administrative expenses – 40.7 – 46.6 1 Bâloise Holding ltd has no direct employees. all staff members are employed by Baloise insurance ltd, Basel.
cHF million interest on bonds – 33.0 – 30.5 other interest expenses – 0.0 –
Total receivables from Group companies 207.5 359.9 the annual general meeting of the following aGMs voted to recognise the dividends receivable for the 2017 financial year as accrued income: ▸ 7 March 2018: Baloise asset Management Schweiz aG (Basel) and Baloise asset Management international aG (Basel) ▸ 13 March 2018: Haakon aG (Basel) ▸ 21. March 2018: Basler Versicherung aG (Basel) and Basler leben aG (Basel) ▸ 22. March 2018: Baloise Bank SoBa aG (Solothurn)
Baloise asset Management Schweiz aG, Basel 100.00 100.00 cHF 1.5 1.5
Baloise Fund invest advico, Bertrange (luxembourg) 100.00 100.00 eUR 0.1 0.1
Baloise private equity partner S.à r.l., Bertrange (luxembourg) – 100.00 eUR <0.1 <0.1
Baloise Finance (Jersey) ltd, St. Helier (Jersey) 100.00 100.00 cHF 1.3 1.3 1 investments stated as a percentage are rounded down.
Balance as at 1 January 2016 2,572,720 conversion convertible bonds – 660,973
Baloise Group annual Report 2017 Bâloise Holding ltd notes to the financial statements of Bâloise Holding ltd 10. CHANGES IN EQUITY
General reserve Reserve for treasury shares Free reserves Distributable profit cHF million additions – – – – – – 0.0 change in treasury shares – – – – – 38.2 38.2 profit for the period – – – – 289.2 – 289.2 additions – – – – – – 0.0
Baloise Group annual Report 2017 Bâloise Holding ltd notes to the financial statements of Bâloise Holding ltd 11. SIGNIFICANT SHAREHOLDERS the information available to the company reveals that the following significant shareholders and shareholder groups linked by voting rights held long-term equity investments in the company within the meaning of section 663c of the Swiss code of obligations (oR) as at 31 December 2017: Total shareholding as at 31.12.2016
UBS Fund Management aG 0.0 0.0 3.3 2.0 lSV asset Management >3.0 0.0 >3.0 0.0
Bâloise Holding ltd has furthermore issued the following letter of comfort: as the owner of Baloise life (liechtenstein) aG, Bâloise Holding ltd, Basel, undertakes to ensure that its subsidiary Baloise life (liechtenstein) aG is at all times in a financial position to meet in full its liabilities to its customers arising from the contracts relating to its RentaSafe, BelRenta Safe, Rentaprotect and RentaSafe time products, especially its guarantee commitments. Since october 2012 this letter of comfort has also applied to customers with contracts relating to its Rentaprotect time, RentaSafe time (D-cHF) and Rentaprotect performance products. the maximum liability corresponds to the present value of the outstanding guaranteed insurance benefits as at 31 December 2017. as at the balance sheet date, the expected insurance benefits were fully backed by customer deposit accounts governed by individual agreements, the reinsurance contract and the collateral lodged with Baloise life (liechtenstein) aG by the reinsurer.
Bâloise Holding ltd guarantees all obligations of Baloise life ltd relating to the various tranches of the subordinated bonds, which had a total nominal value of cHF 500 million as at the balance sheet date.
Bâloise Holding ltd is jointly and severally liable for the value-added tax (Vat) owed by all companies that form part of the tax group headed by Baloise insurance ltd.
▸ remuneration paid to the members of the Board of Directors, ▸ remuneration paid to the members of the corporate executive committee, ▸ loans and credit facilities granted to members of the Board of Directors and the corporate executive committee, ▸ shares and options held by members of the Board of Directors and the corporate executive committee.
15. NET REVERSAL OF HIDDEN RESERVES in 2017, no hidden reserves were reversed.
16. EXEMPTIONS DUE TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS Because Bâloise Holding ltd has prepared consolidated financial statements in accordance with recognised financial reporting standards (iFRS), in accordance with statutory provisions (article 961d [1] of the Swiss code of obligations [oR]), it has dispensed with the notes on long-term interest-bearing liabilities and audit fees as well as the presentation of a cash flow statement or a management report in these annual financial statements.
17. EVENTS AFTER THE BALANCE SHEET DATE By the time that these annual financial statements had been completed on 21 March 2018, we had not become aware of any events that would have a material impact on the annual financial statements as a whole.
Baloise Group annual Report 2017 Bâloise Holding ltd proposel by the Board of Directors
the Board of Directors will propose to the annual General Meeting that the company’s distributable profit be appropriated as shown in the table below.
Profit to be carried forward 597,228.24 661,197.69 the appropriation of profit is consistent with section 30 of the articles of incorporation. each share confers the right to receive a dividend of cHF 5.60 gross or cHF 3.64 net of withholding tax.
Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
▸ actuarial reserves actuarial reserves are the reserves set aside to cover current life insurance policies.
▸ annual premium equivalent the annual premium equivalent (ape) is the insurance industry standard for measuring the volume of new life insurance business. it is calculated as the sum of the annual premiums earned from new business plus 10 per cent of the single premiums received during the reporting period.
▸ Business volume the total volume of business comprises the premium income earned from non-life and life insurance and from investment -linked life insurance policies during the reporting period. the accounting principles used by the Baloise Group do not allow premium income earned from investment-linked life insurance to be reported as revenue in the consolidated financial statements.
▸ claims reserve a reserve for claims that have not been settled by the end of the year.
▸ Deferred taxes probable future tax expenses and tax benefits arising from temporary differences between the carrying amounts of assets and liabilities recognised in the consolidated financial statements and the corresponding amounts reported for tax purposes. the pertinent calculations are based on country-specific tax rates.
▸ Fixed-income securities Securities (primarily bonds) that yield a fixed rate of interest throughout their term to maturity.
▸ Gross the gross figures shown on the balance sheet or income statement in an insurance company’s annual report are stated before deduction of reinsurance.
▸ Group life business insurance policies taken out by companies or their employee benefit units for the occupational pension plans of their entire workforce.
▸ impairment an asset write-down that is recognised in profit or loss. an impairment test is carried out to ascertain whether an asset’s carrying amount is higher than its recoverable amount. if this is the case, the asset is written down to its recoverable amount and a corresponding impairment loss is recognised in the income statement.
▸ international Financial Reporting Standards Since 2000 the Baloise Group has been preparing its consolidated financial statements in compliance with international Financial Reporting Standards (iFRS), which were previously called international accounting Standards (iaS).
▸ investment-linked life insurance life insurance policies under which policyholders invest their savings for their own account and at their own risk.
▸ net the net figures shown on the balance sheet or income statement in an insurance company’s annual report are stated after deduction of reinsurance.
▸ new business margin the value of new business divided by the annual premium equivalent (ape).
▸ performance of investments performance in this context is defined as the rates of return that Baloise generates from its investments. it constitutes the gains, losses, income and expenses recognised in the income statement plus changes in unrealised gains and losses as a percentage of the average portfolio of investments held.
▸ periodic premium periodically recurring premium income (see definition of “premium”).
▸ policyholder’s dividend an annual, non-guaranteed benefit paid to life insurance policyholders if the revenue generated by their policies is higher and / or the risks and costs associated with their policies are lower than the assumptions on which the calculation of their premiums was based.
▸ premium the amount paid by the policyholder to cover the cost of insurance.
▸ profit after taxes profit after taxes is the consolidated net result of all income and expenses, minus all borrowing costs as well as current and deferred income taxes. profit after taxes includes non-controlling interests.
▸ Reinsurance if an insurance company itself does not wish to bear the full risk arising from an insurance policy or an entire portfolio of policies, it passes on part of the risk to a reinsurance company or another direct insurer. However, the primary insurer still has to indemnify the policyholder for the full risk in all cases.
▸ Share buy-back programme procedure approved by the Board of Directors under which Baloise can repurchase its own outstanding shares. companies in Switzerland open a separate trading line in order to carry out such buy-backs.
▸ Solvency Minimum capital requirements that the regulatory authorities impose on insurance companies in order to cover their business risks (investments and claims). these requirements are usually specified at a national level and may vary from country to country.
▸ Value of new business the value added by new business transacted during the reporting period; this figure is measured at the time the policy is issued.
LUXEMBOURG Bâloise Assurances 23, rue du puits Romain Bourmicht l-8070 Bertrange info@baloise.lu www.baloise.lu
Baloise Group annual Report 2017 General information information on the Baloise Group the 2017 annual Report is published in German and english. the German version is authoritative in the event of any discrepancy. the Financial Report contains the audited 2017 annual financial statements together with detailed information.
the annual report contains all of the elements that, in accordance with section 961c of the Swiss code of obligations, make up the management report.
INFORMATION FOR MEMBERS OF THE MEDIA You will find the latest media releases, presentations, reports, images and podcasts of various Baloise events as well as media contact details at www.baloise.com/media.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS this publication is intended to provide an overview of Baloise’s operating performance. it contains forward-looking statements that include forecasts of future events, plans, goals, business developments and results and are based on Baloise’s current expectations and assumptions. these forward-looking statements should be noted with due caution because they inherently contain both known and unknown risks, are subject to uncertainty and may be adversely affected by other factors. consequently, business performance, results, plans and goals could differ substantially from those presented explicitly or implicitly in these forward-looking statements. among the influencing factors are (i) hanges in the overall state of the economy, especially in key markets; (ii) financial market performance; (iii) competitive factors; (iv) changes in interest rates; (v) exchange rate movements; (vi) changes in the statutory and regulatory framework, including accounting standards; (vii) frequency and magnitude of claims as well as trends in claims history; (viii) mortality and morbidity rates; (ix) renewal and expiry of insurance policies; (x) legal disputes and administrative proceedings; (xi) departure of key employees; and (xii) negative publicity and media reports.