The registered shares of Bâloise-Holding are fully paid up and have a nominal value of CHF 0.10 (2005: CHF 0.10). Registration in the share register with voting rights is restricted to 2% for natural and legal persons. The Baloise Group acquires and disposes of treasury shares as part of its normal investment activities and for the staff share ownership plans.
Capitalization requirements: Minimum capital (solvency) regulations pursuant to the applicable supervisory law apply to subsidiaries in the insurance business. For the 2005 and 2006 fi scal years, the subsidiaries met all applicable regulatory provisions regarding capitalization.
VORABDRUCKlegal persons. The Baloise Group acquires and disposes of treasury shares as part of its normal investment activities and for the staff
VORABDRUCK Under the share buyback program announced on March 21, 2006, 1,074,000 Bâloise-Holding shares were repurchased for a total VORABDRUCK 1,074,000 Bâloise-Holding shares were repurchased for a total value of CHF 113.8 million between May 22, 2006, and December VORABDRUCK value of CHF 113.8 million between May 22, 2006, and December 31, 2006. Moreover, Baloise Group companies sold net 112,331 VORABDRUCK 31, 2006. Moreover, Baloise Group companies sold net 112,331
Change recognized directly in equity in unrealized gains and losses on (available-for-sale)
fi nancial assets as a result of a change in fair value 1,264.7 661.1
Change in deferred income taxes recognized directly to equity –32.2 –3.8
Balance as of December 31 664.5 780.6 in CHF million 1 See comments to section 11.
Policyholders’ dividends credited and provision for future policyholders’ dividends (gross) 4,457.2 4,650.5
FINANCIAL REPORT 2006 3.2 –10.5–10.5 cation of held-to-maturity fi nancial assets cation of held-to-maturity fi nancial assets cation of held-to-maturity fi 1
Addition as a result of reclassifi cation of investment propertiesAddition as a result of reclassifi cation of investment propertiesAddition as a result of reclassifi
Balance as of December 31VORABDRUCK Balance as of December 31 in CHF millionVORABDRUCK in CHF million
Provision for policyholders’ dividends and profi t sharing 48.6 0.0 48.6 54.1 0.0 54.1
23.1.2 Unearned premiums Gross Reinsurance assets Net Gross Reinsurance assets Net
In addition to the actual unearned premiums, this item also comprises aging reserves from health insurance, pipline premiums and any provisions for anticipated losses required based on the LAT.
Reversals / new provisions recognized in income 11.8 0.0 11.8 20.9 –/– 20.9
23.1.2 Unearned premiums23.1.2 Unearned premiums Reinsurance assets Net Grossassets Net Grossassets Net Gross Reinsurance Reinsurance
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCKNo determinable residual term 539.1 –122.3 416.8 802.8 –126.1 676.7
VORABDRUCKNo determinable residual term 539.1 –122.3 416.8 802.8 –126.1 676.7No determinable residual term 539.1 –122.3 416.8 802.8 –126.1 676.7
All maturity data is based on assumptions. The item “No determinable residual term” contains in particular aging provisions and
Additions / disposals from changes in the scope of consolidation –/– –/–
Loss reserves as of December 31 (gross) 5,207.4 5,330.2 in CHF million
The corresponding reserves, contained in the overall amount, came to CHF 226.5 million at the end of 2006 and CHF 256.8 million
Reinsurers’ share including redemptions and, since a large part of these provisions are denominated in foreign currencies, to exchange rate effects.
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK424.0 334.5
VORABDRUCK Special attention is paid to cases of environmental damage caused by deposits, waste, asbestos and generally substances which harm
VORABDRUCK by deposits, waste, asbestos and generally substances which harm humans and the natural environment.VORABDRUCK humans and the natural environment.
Policyholders’ dividends credited and provision for future policyholders’ dividends 4,457.2 4,650.5
The item “No determinable residual term” includes in particular deferred as well as current annuity.
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK17.1
Additions from the acquisition of policy portfolios or insurance companies 0.8 –/–
Additions from the acquisition of insurance portfolios or companies 477.0 –/–
Balance as of December 31 1,640.6 1,933.3 in CHF million 23.2.4 Provisions for terminal policyholders’ dividends 2005 2006
Adjustment from unrealized gains and losses as of January 1 (shadow accounting) –27.2 –51.9
Terminal policyholders’ dividends, which are only paid upon the contract’s expiry, are fi nanced and accrued over the life of the policy in proportion to the profi ts attributable to the contract.
Terminal policyholders’ dividends, which are only paid upon the contract’s expiry, are fi accrued over the life of the policy in proportion to the profi
VORABDRUCK 23.2.4 Provisions for terminal policyholders’ dividends23.2.4 Provisions for terminal policyholders’ dividends
Adjustment from unrealized gains and losses as of January 1 (shadow accounting)
VORABDRUCK Adjustment from unrealized gains and losses as of January 1 (shadow accounting)
Interest and change in liabilityVORABDRUCK Interest and change in liabilityVORABDRUCK VORABDRUCK
Policyholders’ dividends credited for periods of less than one year 134.6 141.9
Adjustment from unrealized gains and losses as of January 1 –444.7 –763.8
Adjustment from unrealized gains and losses as of December 31 (shadow accounting) 763.8 791.2
Policyholders’ dividends credited and provisions for future policyholders’ dividends as of December 31 4,457.2 4,650.5 in CHF million 24. Liabilities from banking business and financial contracts
Policyholders’ dividends credited and provisions for future policyholders’ dividends as of December 31 4,457.2 4,650.5 in CHF million
Measured at amortized cost VORABDRUCK Measured at amortized cost VORABDRUCK VORABDRUCK
Balance as of December 31 1,084.1 895.4 in CHF million 25. Reconciliation between the gross investment in finance leases and the present value of minimun lease payment
The liabilities from the banking business measured at amortized cost are composed primarily of customers’ savings and bank deposits and mortgage bond loans for refi nancing mortgages secured by property liens.
Total minimum lease payments 231.3 197.0VORABDRUCK Total minimum lease payments 231.3 197.0
The fi nancial provisions for restructuring contain primarily amounts for the reorganization of companies in Switzerland acquired in previous years.
Premiums earned and policy fees (gross) 3,051.4 3,783.7 6,835.1 3,055.2 3,651.4 6,706.6
Reinsurers’ share of change in unearned premiums –9.6 –/– –9.6 10.8 –/– 10.8
Total premiums earned and policy fees for own account 2,867.9 3,769.9 6,637.8 2,887.5 3,631.6 6,519.1 in CHF million
Income from investment properties comprises primarily rental income. Income from fi nancial assets of an equity nature contains predominantly dividend income, income from fi nancial assets of a debt nature primarily interest income and net income from writeups /amortization owing to the application of the actual interest method. Income from mortgages and loans as well as cash and cash equivalents is mostly interest income.
Recognized at fair value through profi t and loss 6.7 0.0
FINANCIAL REPORT 2006 nancial assets of an equity nature contains predominantly dividend income, income from fi nancial assets of a predominantly dividend income, income from fi nancial assets of a predominantly dividend income, income from fi debt nature primarily interest income and net income from writeups /amortization owing to the application of the actual interest method. Income from mortgages and loans as well as cash and cash equivalents is mostly interest income.
in CHF millionVORABDRUCK in CHF million 1 Excluding income from associatesVORABDRUCK 1 Excluding income from associates
Total realized capital gains and losses on investments1 –58.8 574.2 175.5 15.7 –157.2 549.4 in CHF million 1 Excluding investments in associates.
Reversals of an impairment loss recognized in incomeVORABDRUCK Reversals of an impairment loss recognized in incomeVORABDRUCK VORABDRUCK
This includes a foreign currency profi t of CHF 48.0 million (2005: profi t of CHF 19.3 million) incurred on monetary fi nancial assets classifi ed as available for sale.
of CHF 20.0 million (2005: profi t of CHF 299.8 million) not recognized in income. A net profi t of CHF 54.7 million (2005: net profi t of
CHF 59.8 million) remains after offsetting cash fl ow hedges (hedge accounting).
A gain of CHF 9.4 million from fair value hedging was included in the realized disposal and book 4 In case of investments of a debt nature held-to-maturity, currency effects are carried under realized 31.3 Exchange rate gains The net income from transactions in foreign currencies recognized
Income from services rendered 211.9 286.4 in CHF million 34. Classification of expenses 2005 2006
The income statement includes the expenses for the items acquisition costs, operating and administrative expenses for the insurance business, investment expense and other operating expenses.
“Other” primarily includes costs incurred in connection with distribution structures which are, in accordance with labor law, not tied to the Baloise Group.
Other operating income 74.3 144.3Other operating income 74.3 144.3Other operating income 74.3 144.3 in CHF million
On property, plant and equipmentVORABDRUCK On property, plant and equipmentVORABDRUCK VORABDRUCK
Change in value in loans from central mortgage bond institutions –/– –/–
Expenses from fi nancial contracts for the account and at the risk of third parties 16.7 32.2
The temporary differences between IFRS and fi scal values in the technical reserves were reduced in fi scal 2005. This reduction contributed greatly to the CHF 40.5 million income from deferred income tax.
Increase / reduction due to: Tax-free interest and dividend deductions –10.7 –18.2
Profi t for the period (attributable to shareholders) (in CHF million) 395.8 699.4
The diluted profi t corresponds to the basic earnings per share, because there are no option plans that could have a diluting effect.
The Baloise Group’s anticipated average tax rate came to 22.0% in 2005 and 24.2 % in 2006. These rates correspond to the weighted averages of the corporate tax rates of the countries in which the
The Swiss life unit was responsible for the material effect from the change in tax rates.
VORABDRUCK uences 1.6 7.0 uences 1.6 7.0Other infl uences 1.6 7.0Other infl
Actual income taxes 72.4 206.1VORABDRUCK Actual income taxes 72.4 206.1Actual income taxes 72.4 206.1VORABDRUCK Actual income taxes 72.4 206.1Actual income taxes 72.4 206.1 in CHF million VORABDRUCK in CHF million
Partner in Life S.A., Luxembourg, GAP Management AG, Ahrensburg, and the buyout of remaining shares of Immo Trefl es N.V., Anderlecht, which was previously consolidated proportionately.
Outfl ow of cash and cash equivalents for the acquisition 60.8 5.7Outfl ow of cash and cash equivalents for the acquisition 60.8 5.7Outfl
Directly allocable costsVORABDRUCK Directly allocable costsVORABDRUCK Equity instruments issuedVORABDRUCK Equity instruments issued
Disposal prices 2.4 in CHF million 40.2 Disposal of companies in 2006 The proportionately consolidated companies Immo Merpa N.V., Zaventem, Belgium, Pylon AG, Hamburg and the fully consolidated Basler
Immobilien GmbH, Vienna were disposed of during fi scal year 2006.Immobilien GmbH, Vienna were disposed of during fi scal year 2006.Immobilien GmbH, Vienna were disposed of during fi
Premiums earned and policy fees –/– –/– 0.3 1.0 0.0 –/– 0.3 1.0
Impairment losses on doubtful receivables –/– –/– –/– –/– –/– –/– –/– –/–
Allowances for doubtful receivables –/– –/– –/– –/– –/– –/– –/– –/–
Pay continuation, incentive claims and severance payments to executive management members who have left the Baloise amounted to CHF 0.4 million in the reporting period. CHF 0.1 million of this amount was taken from corresponding provisions set up the year before.
–0.3 –0.1 –/– –/– –/– –/– –0.3 –0.1–0.3 –0.1 –/– –/– –/– –/– –0.3 –0.1–0.3 –0.1 –/– –/– –/– –/– –0.3 –0.1
Allowances for doubtful receivablesVORABDRUCK Allowances for doubtful receivablesVORABDRUCK Other liabilitiesVORABDRUCK Other liabilities
Intangible assets and property, plant and equipment 49.8 47.2 in CHF million 43. Contingent liabilities and future commitments 43.1 Contingent liabilities 43.1.1 Legal disputes The Baloise Group and its subsidiaries are continually confronted with legal disputes, claims and litigation stemming in most cases from the normal operating activities as an insurer. Since the previous balance sheet date, the Group management is unaware of any new circumstances that could have a signifi cant infl uence on the 2006 consolidated annual fi nancial statements.
Total guarantees and payment guarantees for the benefi t of third parties 974.9 706.8 of which: For the benefi t of partners in joint ventures –/– –/–
of which: For the benefi t of joint ventures –/– –/–
VORABDRUCK The Baloise Group has provided guarantees and obligations to third
VORABDRUCK The Baloise Group has provided guarantees and obligations to third parties, associates, partnerships and joint ventures. This includes
VORABDRUCK parties, associates, partnerships and joint ventures. This includes obligations in contractually stipulated cases to make additional
VORABDRUCK obligations in contractually stipulated cases to make additional capital contributions or payments to equity, resources for covering VORABDRUCK capital contributions or payments to equity, resources for covering outstanding repayments or interest payments, or guarantees in con-VORABDRUCK outstanding repayments or interest payments, or guarantees in connection with its operating activities. The Baloise Group is unaware VORABDRUCK nection with its operating activities. The Baloise Group is unaware
in CHF million 43.2 Future liabilities 43.2.1 Capital commitments Liabilities entered into for the future acquisition of: 2005 2006
Liabilities entered into for the future acquisition of investments include private equity commitments too, which are unfi nanced commitments for direct investment in private equity or for investment in private equity funds.
44. Operating leases 44.1 Baloise Group as lessee The Baloise Group has concluded nonterminable leasing agreements for buildings, vehicles and operating equipment as a lessee. The average residual term of the leasing agreements is between three and fi ve years.
Income from subleasing in the fi scal year under review –/– –/–
Leasing income 32.3 47.1 in CHF million 45. Claim payments received from insurance companies outside the Baloise Group In fi scal 2006, the Baloise Group companies received CHF 0.3 million (2005: CHF 0.6 million) in claim payments from insurance companies outside the Group in connection with insurance contracts in which Baloise Group companies are the policyholder. The claim payments predominantly cover damage to buildings in Switzerland. In numerous locations in Switzerland, state building insurance is mandatory.
Events after the balance sheet date46. Events after the balance sheet date No further events have become known up to the completion of these consolidated annual fi nancial statements dated March 9, 2007 which would have a signifi uence on the annual fi nancial uence on the annual fi nancial uence on the annual fi statements as a whole.
VORABDRUCKwhich Baloise Group companies are the policyholder. The claim payments predominantly cover damage to buildings in Switzerland. In
46. Events after the balance sheet dateVORABDRUCK 46. Events after the balance sheet date46. Events after the balance sheet date
47. Significant subsidiaries, joint ventures and investments in associates as of December 31, 2006
Share of the Group in percent Direct share in percent Manner of inclusion2 Currency
Basler Lebens-Versicherungs-Gesellschaft, Basel Life L 100.00 100.00 F CHF 50.0 25,978.4 2,413.8
Baloise Bank SoBa, Solothurn Banking B 100.00 100.00 F CHF 50.0 5,306.7 –/–
Haakon AG, Basel Other O 74.75 74.75 F CHF 0.2 42.7 –/–
Baloise Asset Management Schweiz AG, Basel Investment management B 100.00 100.00 F CHF 1.5 24.1 –/–
Beteiligungsgesellschaft GmbH, Hamburg Holding company O 100.00 100.00 F EUR 20.5 266.3 –/–
Lebensversicherungs-AG, Hamburg Life L 100.00 100.00 F EUR 22.0 8,241.9 498.6
Deutscher Ring Bausparkasse AG, Hamburg Bank B 65.00 65.00 P EUR 12.8 495.1 –/–
Beteiligungsholding GmbH, Hamburg Holding O 65.00 65.00 P EUR 12.8 242.8 –/–
Financial Services GmbH, Hamburg Other O 65.00 100.00 P EUR 0.1 7.4 –/–
Zeus Vermittlungsgesellschaft GmbH, 1 L: Life, NL: Nonlife, B: Banking, O: Other activities / corporate business 2 F: Full consolidation, P: Proportional, E: At equity measurement
SECURITAS Gilde AG, Bremen, therefore no longer operates in the insurance business and is therefore no longer included in the above overview.
MONEYMAXX Lebensversicherung-AG, Düsseldorf, acquired in 2005, was merged with Deutscher Ring Lebensversicherungs-
Mercator Re N.V., Antwerpen Reinsurance NL 100.00 100.00 F EUR 1.2 4.7 0.0
Antwerp Real Estate N.V., Antwerpen Other O 100.00 100.00 F EUR 1.2 3.1 –/–
Merno-Immo N.V., Gent Other O 100.00 100.00 F EUR 17.1 18.3 –/–
Sogaplim N.V., Gent Other O 50.00 50.00 P EUR 4.2 19.6 –/–
Bertrange (Luxembourg) Investment management B 100.00 100.00 F EUR 0.1 7.7 –/–
Basler Versicherungs-Aktiengesellschaft in Österreich, Wien Life and Nonlife L / NL 100.00 100.00 F EUR 5.1 491.7 78.8
Basler Zivotno Osiguranje d.d., Zagreb Life L 94.00 94.00 F HRK 22.5 84.1 42.1
OVB Allfi nanzvermittlungs GmbH, Salzburg Other O 32.57 100.00 P EUR 1.0 11.1 –/–
Douglas / Isle of Man / British Isles Reinsurance NL 100.00 100.00 F CHF 31.2 298.8 –/–
St. Helier / Jersey / Channel Islands Other O 100.00 100.00 F CHF 1.3 345.6 –/–
OVB Polska Allfi nanz z.o.o., Warsaw Other O 32.57 100.00 P PLN 1.1 8.4 –/– 1 L: Life, NL: Nonlife, B: Banking, O: Other activities / corporate business 2 F: Full consolidation, P: Proportional, E: At equity measurement
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK
As auditors of the Group, we have audited the consolidated fi nancial statements (income statement, balance sheet, statement of cash fl ow, statement of changes in equity, and notes, pages 2 to 75) of the
Our audit was conducted in accordance with Swiss Auditing Standards and with the International Standards on Auditing, which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated fi free from material misstatement. We have examined on a test basis
VORABDRUCK nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
nancial statements give a true and In our opinion, the consolidated fi nancial statements give a true and In our opinion, the consolidated fiVORABDRUCK In our opinion, the consolidated fi nancial statements give a true and In our opinion, the consolidated fi fair view of the fiVORABDRUCK fair view of the fi nancial position, results of operations and the cash VORABDRUCK
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCKTax on income and capital –240,296 –1,775,000
VORABDRUCKTax on income and capital –240,296 –1,775,000Tax on income and capital –240,296 –1,775,000
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK
VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK VORABDRUCK
Unappropriated reserve VORABDRUCK Unappropriated reserve VORABDRUCK Retained earnings 138,528,132 258,091,500VORABDRUCK Retained earnings 138,528,132 258,091,500
Baloise Insurance Co. (I.O.M), Ltd, Douglas / Isle of Man 100 100 CHF 31.2
Baloise Finance (Jersey) Ltd., St. Helier / Jersey 100 100 CHF 1.4
3. Loans to Group companies Baloise Bank SoBa was given a subordinated loan of CHF 30 million.
VORABDRUCK The holdings have been rounded to the nearest percent. Additional information about the participating interests of Bâloise-Holding is VORABDRUCK information about the participating interests of Bâloise-Holding is given on pages 74 and 75.VORABDRUCK given on pages 74 and 75.
6. Treasury shares Baloise Group companies purchased a total of 291,837 shares at an average price of CHF 91 (excluding share buybacks through the second trading line). They sold 337,837 shares during the year under review, also at an average price of CHF 91, and together held 95,560
CHF 111.2 million, charged against the general reserve, at Decem8. Contingent liabilities Guarantee liabilities amounted to CHF 214.9 million at December 31, 2006 (previous year: CHF 447.6 million). During the previous year CHF 204.0 for the guarantee of the convertible bond issued by
Bâloise-Holding is jointly liable for value-added tax payable by all companies under the leadership of Basler Versicherungen subject to group taxation.
Meetings of Baloise Fund Invest Advico, Luxembourg, February 8, 2007; of Baloise Finance (Jersey) Ltd., St. Helier (Jersey), February 15, 2007; of Baloise Asset Management Schweiz AG, Basel, Baloise
February 22, 2007; and of Baloise Bank SoBa, Solothurn, March 8, 2007 (income from participating interests) for fi scal year 2006 are reported as accrued income accruals.
Bâloise-Holding Financial Report 2006 81 8. Contingent liabilities Guarantee liabilities amounted to CHF 214.9 million at December 31, 2006 (previous year: CHF 447.6 million). During the previous year CHF 204.0 for the guarantee of the convertible bond issued by
Custodian Nominees who hold shares in trust for third parties are considered as belonging to the free flVORABDRUCK Custodian Nominees who hold shares in trust for third parties are considered as belonging to the free fl Such shareholder groups are not subject to registration by stock exchange law.VORABDRUCK Such shareholder groups are not subject to registration by stock exchange law.
3.80 gross per share (CHF 2.47 after deduction of withholding tax).
FINANCIAL REPORT 2006 3.80 gross per share (CHF 2.47 after deduction of withholding tax).
Our audit was conducted in accordance with Swiss Auditing Standards, which require that an audit be planned and performed to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the fi nancial statements. We have also assessed the accounting principles used, signifi cant estimates made and the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
B Balance sheet, Bâloise-Holding 79 Balance sheet, consolidated 2 Bâloise-Holding 78 Business segments, segment reporting 38
E Earnings per share 67 Earnings, proposed appropriation to the Board of Directors 82
G General shareholders’ meeting, Bâloise-Holding 10, 76, 82, 84 Group auditor, report 76
I IFRS, accounting standards 10, 22 Income from participating interests, Bâloise-Holding 78, 81 Income statement, Bâloise-Holding 78 Income statement, consolidated 4 Income taxes 22, 36, 52, 67, 78 Insurance receivables 2, 46, 68, 70 Intangible assets 2, 6, 13, 41, 42, 68 Interest rate risk 30
VORABDRUCK Earnings per share Earnings, proposed appropriation to the Board of Directors
VORABDRUCK Earnings, proposed appropriation to the Board of Directors EmployeeVORABDRUCK Employee Employee sharesVORABDRUCK Employee shares Employees, numberVORABDRUCK Employees, number Equity change statement, consolidatedVORABDRUCK Equity change statement, consolidated Equity, unrealized gains and lossesVORABDRUCK Equity, unrealized gains and losses
L Liabilities from the banking business 21, 59, 68 Liabilities from the insurance business 3, 61 Liabilities, Bâloise-Holding 79 Liabilities, consolidated 3
Reinsurance assets and receivables 46 Related party transactions Report of the Group Auditors Report of the statutory Auditors Risk management