Ambition Helvetia Group’s ambition is to sustainably strengthen its attractive business portfolio in its current markets. We want to be one of the leading providers in our domestic market of Switzerland. We aim to gradually strengthen our position in the country markets of Italy, Germany, Spain, Austria and France and continuously increase our market share. In doing so, we place great value on a practical geographic diversification as well as achieving a harmonious balance between the profitable non-life business, the high-potential pensions business and the cyclical reinsurance business.
Group profit for the period after tax 363.8 333.1 9.2 % 76 of which investment result from Group financial assets and investment property 1 212.3 1 177.8 2.9 % 81
The combined ratio improved slightly from an already good level – despite severe weather events in some country markets. At 93.6 %, the combined ratio again beats the range set out in the
In the future, we will systematically continue the local measures for further increasing profitability. In life business, we will focus more on the further development of modern life insurance products. In France, we expect to be able to gradually generate cost synergies after completing the integration work for the transport insurance business.
Our strategic priorities Our strategic initiatives Achievement of targets in 2013 Outlook for 2014
– Marked increase in transport insurance premiums through first-time full consolidation of the Groupama transport insurance portfolio (new number two in transport insurance)
– Successful placement of tranche products in several country markets (Switzerland, Italy, Spain)
Italy In Italy, Helvetia is primarily represented in the economically interesting regions in the north of the country and focuses on retail customers and small and medium -sized businesses. Using the multi-channelling approach, Group companies sell life and non-life products through more than 400 non-exclusive agents, bank partners and exclusively through Insurance Corners in the premises of its cooperation partners such as ENI Group. Following the acquisition of a majority stake in Chiara Assicurazioni, Helvetia also has access to a banking distribution network which now comprises more than 1,000 branches.
Our product development and sales activities are consistently guided by customer needs. Our decentralised organisation means that we are able to quickly recognise and react to shifts in demand. Helvetia has optimised sales structures which are focused on the special features of the individual country markets. We generally pursue the so-called multi-channelling approach, i.e. appealing to customers through various sales channels. In addition, Helvetia works with renowned distribution partners such as Raiffeisen Switzerland, the Swiss cantonal banks and Vontobel Group, Banco di Desio, ENI Group and the daily newspaper “Der Standard” in Austria. Collaboration with these partners increases our sales reach and at the same time enables us to concentrate on our core competencies.
Targeted assistance of social and cultural projects adapted to core business
Dividend history Dividend per share (in CHF) | Dividend yield at year-end price | Payout ratio 57.7 % Other institutional investors
Capital management process Helvetia applies an integrated approach to capital management. At the strategic level, the capitalisation and the risk profile of business units are managed in terms of profitability and growth potential and therefore of the strategic Group targets. Capital is managed integrally in accordance with a defined capitalisation target under the Swiss Solvency Test, Solvency I and Standard & Poor’s, and is aligned with the corporate strategy using multi-year capital planning. At an operational level, the capital management process incorporates the financing within the Group as well as the safeguarding of adequate capitalisation of the individual legal entities of the Group. In this process, the capitalisation is closely monitored and optimised according to internally defined thresholds.
Doris Russi Schurter Law degree (lic. iur.), Lawyer (with own practice)
Professional background 1988–1990 worked in various courts, adminis­ tration and law firms; 1991–1993 Court Clerk at the High Court of Lucerne; 1993 joined Helvetia: Head of regional office in Lucerne; 2000 Mem­ ber of the Management Board, Switzerland: Head of Sales; 2003 Member of Group Execu­ tive Management in his current position with vari­ ous mandates at the Swiss subsidiaries of Helvetia Group.
– Conditional share capital was created in 2007: see section 2.3.
– As the share capital did not change in 2013, the share capital values set out in sections 2.1 to 2.3, valid from 25 July 2008, and the information on the conditional share capital, are still correct.
– Doris Russi Schurter is the Chairwoman and Jean-René Fournier the Vice Chairman of the Board of Directors of the Patria Genossenschaft, Basel, the statutory objectives of which are to promote the conclusion and execution of life insurance contracts with Helvetia in the interests of its members, and to secure and promote its independence and development by means of financial participation in Helvetia.
Every year, the Board of Directors assesses the level of compliance with these requirements and the quality of the services it has performed, both in its entirety and within each committee, and – where necessary – identifies any improvements that may be required.
Helvetia Holding AG prepares a separate compensation report in connection with the “Ordinance Against Excessive Compensation in Swiss Listed Companies” (VegüV), which includes additional information. It can be viewed at www.helvetia.com or requested as a printed version.
In contrast, the Swiss non-life market remained solid in 2013 and the German non-life business was helped by the economic recovery, with a marked ten-
The markets in which Helvetia is active generate a volume of US $ 772 billion, representing 16.7 % of the global market1.
Company profile Market environment dency towards price increases in individual lines of property insurance (e.g. motor vehicle or residential buildings) being observed. The main source of claims in 2013 was storm damage in Germany and Austria, which will be reflected in the combined ratios of European insurers. In addition, the low interest rate environment in the non-life business also had a negative impact on profitability. The life insurance business in 2013 was dominated by conditions in the capital market. The biggest problem in 2013 was once again the low interest rate environment, as investments that had been considered safe yielded very low returns. With regard to business volume, all Helvetia country markets showed renewed signs of growth. The foreseeable further cuts in statutory pension schemes will boost demand for private pension solutions. The turmoil in the financial markets has increased the demand for products with financial guarantees and yield-oriented financial investments. Many life insurance companies have therefore responded with new products to reflect this trend.
As a medium-sized, very well-capitalised market participant, Helvetia once again performed well in 2013 and sees a high potential for further value creation in the future. Our innovative products which are aligned to customer needs, our strong sales position and focus on continuously improving our operational efficiency as well as our use of capital provide a strong foundation for this assumption. Details regarding Helvetia’s business development can be found on pages 78 – 80.
Both the investment policy and the operational risk management approach will remain unchanged in the current year.
With a premium volume of CHF 129.8 million (previous year: CHF 113.7 million), our Austrian business unit closed financial year 2013 with extremely pleasing premium growth of 11.9 % in original currency (in CHF: 14.2 %). By comparison, the Austrian Insurance Association’s most recent statistics on the Austrian life insurance market shows a decrease in premiums of 0.4 %. In contrast to the market, Helvetia Austria was able to increase both its regular premium volume and its single premium business. The performance of the capital-efficient modern insurance solutions is particularly encouraging and is in line with strategy. As in the previous year, unit-linked life insurance stimul ated growth and achieved a very good increase of 35.6 % (in original currency) in regular premiums, particularly with the innovative fund savings plan. Single premium business improved by 42.2 % (in original currency). The drivers of this were one-off
Effects of changes in accounting and valuation principles1 – – – – – – 52.9 – 23.6 – 76.5 0.1 – 76.4 – – 76.4
Balance as of 1 January 2013 restated1 0.9 248.4 – 9.8 226.7 – 306.9 2 665.0 886.2 3 710.5 39.7 3 750.2 300.0 4 050.2
Depreciation / amortisation of property, equipment and intangible assets 42.6 46.7
Unrealised gains and losses on financial instruments – 277.2 – 233.2
The amendments to IAS 19 have a material impact on the recognition of employee benefits. The most important changes are the following: – Actuarial gains and losses must be recognised immediately in the statement of comprehensive income, without affecting profit or loss. The option to defer recognition of gains and losses is no longer allowed. This is expected to increase the volatility of the balance sheet and the statement of comprehensive income.
Associates of Helvetia Group are listed together with the fully consolidated subsidiaries in section 19 (from page 199).
Financial investments are derecognised no later than when the bankruptcy proceedings end or, in the case of ongoing bankruptcy proceedings, when the outstanding debt plus interest is received. If a settlement is agreed, derecognition takes place at the end of the agreed period after receipt of the payment.
2.24 Share­based payments 2.25 Other liabilities 2.26 Offsetting of assets and liabilities
Interest income from investments at fair value through profit or loss stood at CHF 35.4 million (previous year: CHF 36.0 million).
Total financial liabilities from financing activities 278.7 256.0 255.2 250.2 280.0 256.8
Reserves for insurance and investment contracts 34 927.8 33 145.1 409.1 379.4 34 518.7 32 765.7
Change in unrealised gains and losses on investments – 532.6 679.4 125.1 – 179.5 – 407.5 499.9
The shares held by the members of the Board of Directors and persons closely related to them as of 31 December 2013 are listed in the following table. The members of the Board of Directors did not take part in any option programmes. They do not participate in the employee share purchase plan.
Helvetia Group’s consistent focus on a geographically well­diversified portfolio of main­ ly small risks (private customers and SMEs) encourages risk­balancing and reduces the risk that the cost of future covered claims arising from existing contracts will be higher than expected (prospective risks). For example, a change in the net claims ratio of + / −5 percentage points would have a positive or negative effect of CHF 110.3 million (previ­ ous year: CHF 108.3 million) on the income statement (not taking deferred taxes into account). For claims already incurred there is a risk that the level of existing commitments exceeds expectations and the provisions established to cover future claim payments are insufficient (retrospective risks). The Group addresses prospective and retrospective risks with actuarial controls, adequate reserves and diversification. Despite the balancing of risks through diversification, individual risk clusters (e.g. in the form of individual large risks) or risk accumulations (e.g. via cross­portfolio exposure to natural disasters) may occur. These types of potential risks are monitored and coordinated throughout the Group and hedged via reinsurance contracts secured (see section 17.4, page 184).
Gross premiums by sector and country in the non­life business 17.2.1 Liability, accident and comprehensive insurance
Total reserves for insurance and investment contracts (net) 5 537.6 10 552.1 6 881.3 10 783.3 764.4 34 518.7 as of 31.12.2012 < 1 year 1–5 years 5–10 years > 10 years Without maturity Total in CHF million adjusted adjusted adjusted adjusted adjusted adjusted
Provision for future policyholder participation 138.2 25.9 – – 1 085.5 1 249.6
as of 31.12.2013 < 1 year 1–5 years 5–10 years > 10 years Without maturity Total in CHF million
Financial assets at fair value through profit or loss 420.9 869.9 134.7 143.2 2 756.9 4 325.6
as of 31.12.2013 CHF EUR USD Others Total in CHF million
ments. – Counterparty risks from loans and mortgages granted: the largest positions in the as­
– Counterparty risks from financial guarantees and loan commitments: detailed infor­ mation on contingent obligations can be found in section 12 (page 163).
Policy and other loans – – – – – 81.0 81.0 as of 31.12.2012 AAA AA A BBB BB and lower Not rated Total in CHF million
Policy and other loans – – – – – 94.0 94.0
On the balance sheet date, subsidiaries of Helvetia Holding AG held 44,255 registered shares of Helvetia Holding AG (previous year: 40,436).
On the balance sheet date, the shareholder pool comprised the following shareholders: – Patria Genossenschaft, Basel, with 30.1 %; – Vontobel Beteiligungen AG with 4.0 %; – Raiffeisen Switzerland with 4.0 %.
6. Additional information for companies listed on the stock exchange (transparency law)
The board of directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. 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.
Deferred acquisition costs Costs arising in connection with the conclusion of new in­ surance contracts or the extension of existing insurance contracts. Such costs are reflected as an asset in the bal­ ance sheet and are allocated across the term of the con­ tract as an expense in the income statement.
Helvetia Assurances S.A. Alain Tintelin (from 1 July 2013 Vincent Letac) 2, rue Sainte­Marie
Aarau Mitteldorfstrasse 37, 5033 Buchs AG 058 280 33 11 Kaspar Hartmann
Consolidated equity (without preferred securities) 3 208.4 3 157.6 3 377.9 3 750.2 3 831.2
Photos Board of Directors, Executive Management and individual portraits: Klaus Andorfer, Zürich
Provisions for insurance and investment contracts (net) 34 518.7 32 765.7 5.4 %
With a result of CHF 1,212.3 million, financial assets and investment property again made a valuable contribution to the overall result in the reporting year. Current income of CHF 985.7 million increased slightly by CHF 25.8 million compared to the previous year. The increase is due to the CHF 1,720.2 million rise in investment volume. Despite continuing low interest rates, the direct yield only fell by 0.1 percentage points and is now 2.7 %. This moderate decline reflects the successfully implemented policy of gradually decreasing the duration gap between the interest-bearing assets and the liabilities from the life business.
Stable shareholder base There was no change in the core shareholder base compared to the end of 2012 and the freefloat is unchanged at 61.9 %. As at 31 December 2013, the following important shareholders were registered in the share register of Helvetia Holding AG: Shareholder base as of 31 December 2013 – Patria Genossenschaft 30.1 % – Vontobel Gruppe 4.0 % – Raiffeisen Schweiz 4.0 %
Opportunities and risks firmly in view The identification, measurement and management of risk forms the very foundation of the insurance business. The more similar risks are analysed together, the more predictable later claims become. This is made possible by our experts’ daily analysis of opportunities and risks in an extremely wide range of areas, which allows us to offer our customers the right level of security at all times and to guarantee sound progress by the Company for our shareholders.