Provisions for insurance and investment contracts (net) 30 152.9 28 571.3 5.5%
All three members will stand for re-election and will be proposed for re-election by the Shareholders ‘ Meeting by the Board of Directors.
Doris Russi Schurter Lic. iur., lawyer (with her own law firm) Swiss, Lucerne, 1956
Christoph Lechner Prof. Dr oec. Swiss and German citizen, Hettlingen, 1967
Markus Isenrich lic. oec. HSG, lic. iur. Swiss, St. Gallen, 1953 Head of Human Resources and Services
Helvetia Group has been synonymous with reliable insurance services for more than 150 years. The linear continuation of the successful course of the Helvetia 2015+ strategy is founded on a combination of selected markets, profitable insurance products and a sustainable drive for growth, accompanied by actuarial discipline, an active awareness of costs and a conservative investment strategy. This is supported by a solid capital base. We are convinced that our profitable growth strategy will allow us to continue to create the biggest added value for our customers, employees and shareholders in the future.
Austria Helvetia actively sells all life, property and accident insurance lines in Austria through Helvetia Versicherungen AG, while the branch office for Austria specialises in transport insurance. With a market share of approximately 1.5%, Helvetia is close to the top 10 in the Austrian insurance market. The most important distribution channels include Helvetia‘s own sales force and independent agents who each generates around 50% of new business. A total of approximately 390 employees provide support to regional customers. Since 2010, the distribution network has been strengthened by independent but exclusive agents. The new bank and cooperation sales channel was launched at the end of 2011.
Helvetia uses the Swiss Solvency Test of the Swiss supervisory authorities as the primary tool for analysing and quantifying risk.
These objectives are defined by taking account of risk capacity and cost/benefit arguments. Therefore, as part of its capital management activities, Helvetia Group targets an interactive financial strength rating of at least “A–”.
Capital management process Helvetia applies an integrated approach to capital management. At the strategic level, the process manages an optimal level of capitalisation and the risk profile of the business units in the context of their profitability and growth potential and therefore in line with the Group’s strategic goals. The capital is managed integrally on the basis of an internally defined capitalisation target under the SST, Solvency I and Standard & Poor’s, and is brought into line with the corporate strategy with the help of multi-year capital plans. The capitalisation of the market units is regularly compared to their profitability in order to find the optimum balance between the two. At the operational level, the capital management process covers financing within the Group as well as ensuring sufficient capital in the individual legal entities of the Group, mainly on the basis of local statutory requirements. Their capitalisation is monitored closely and optimised in accordance with internally defined threshold values.
Helvetia cares for its environment Forests offer natural protection against falling rocks, landslides, avalanches and floods. Helvetia promotes the preservation and reforestation of protective forests to protect people, houses and roads against natural disasters. With the support of prominent public figures, 10,000 trees were planted in a protective forest in the Engadine in 2011. As a symbol of this commitment, all Helvetia employees in Switzerland were given a
For many years Helvetia Group has dedicated part of its profits to charitable projects to promote environmental, cultural and sports initiatives.
Helvetia also supports a number of internal and external initiatives. Memberships in national and international institutions that actively promote the protection of the environment have been part and parcel of the Group’s corporate culture for many years. For example, Helvetia is a member of the United Nations Environment Programme and Öbu, a Swiss think tank for the environment and social and management issues. In 2011 Helvetia was also a sponsoring partner of the environmental award “Der Grüne Zweig” offered by the WWF Eastern Switzerland every year.
Helvetia attaches great importance to equal opportunities for development At Helvetia, performance and commitment are honoured regardless of origin or gender. In October 2011, Helvetia held a diversity workshop where the results of an employee survey in 2010 were analysed and discussed from this perspective, e.g. mutual recognition and opportunities for professional development. After discussion of these topics, improvement measures were formulated for submission to the Executive Management Switzerland. In Switzerland, the largest business unit, 44% of the employees are women but only one in five managers is female. Groupwide this is around 18%. Helvetia’s objective is to implement a package of measures to offer women the same career opportunities as men. Currently Helvetia Switzerland already grants 20 weeks of maternity leave, one week of paternity leave and crèche facilities at the head offices in Basel and St. Gallen. The mentoring programme also helps female managers to realise their promotion goals.
1.2 Major shareholders In addition to a strong, long-term and, in view of the positive development of the Group, very successful relationship with our major pool shareholders Patria Genossenschaft (founding partner ), Raiffeisen and Vontobel (cooperation partners ), we apply an open and shareholder-friendly strategy in an effort to build up a widely diversified and satisfied shareholder base. On the balance sheet date, 8,685 shareholders were registered in the share register of Helvetia Holding. Compared to the previous year, the number of registered shareholders remained more or less constant, which underlines the attractiveness of our share even in times of financial sector turbulence. In this regard, the shareholders ’ pool is worthy of special mention.
At 8,685, the number of shareholders of Helvetia Holding remained more or less constant. ‹
3.2 Other activities and interests The following business relationships exist with companies represented by members of the Board of Directors: – In the shareholder pool, Doris Russi Schurter and Jean-René Fournier represent Patria Genossenschaft, Pierin Vincenz represents the Raiffeisen Group, and Herbert J. Scheidt represents the Vontobel Group.
c) Meeting attendance fees Board members are paid an attendance fee for every meeting. Telephone conferences are not deemed to be meetings. The compensation regulations govern the amount of the meeting attendance fees.
Not only the products and advisory services but also the language and substance of Helvetia are tailored to the special needs of our customers: easy to understand and – what is most important – a perfect fit. We blaze new trails and design intelligent solutions in dialogue with our partners. Efficient, purposeful and forward-looking.
Italy The country market Italy was particularly strongly affected by the euro crisis in 2011, but Helvetia successfully held its own in this environment. Looking back over the financial year, in which Helvetia Italy generated a total business volume of CHF 1,223.3 million, the growth trend that emerged in the 1st half of 2011 was confirmed with divergent tendencies in the life and non-life business. The growth of 2.9% in original currency (-7.4% in CHF due to exchange rate differences) was achieved through dynamic premium growth in the non-life business, mainly driven by the strong expansion of the distribution network in the last few years, to which two new major cooperation agreements have been added in the reporting year. Life volumes declined in line with lower demand due to economic conditions but were still better than the market. The country result is CHF 5.1 million lower year-on-year, mainly as a result of lower investment income but also due to the impact of an increase in the tax rate.
IFRIC 14 provides guidelines on calculating the maximum amount of the surplus of a pension fund that can be measured as an asset under IAS 19. According to IFRIC 14, the employer does not have to recognise any additional liability, unless the contributions payable in accordance with the minimum funding requirements cannot be repaid to the company.
The application of the amendments does not have any material impact on Helvetia Group’s asset, financial and income situation or its disclosure obligations. Due to the effective dates on which they enter into force, the following published sectorrelevant standards, interpretations and amendments to standards were not applied to the 2011 consolidated financial statements: 2.1 Standards applied for the first time in the reporting year
The gains and losses result from price and exchange rate fluctuations affecting investments.
Preparing the financial statements in accordance with IFRS requires Group management to make assumptions and estimates that affect the reported amounts of assets and liabilities for the ongoing financial year. All estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual figures and estimates may differ as a result. Management judgement is in particular required in the following assumptions relevant to the preparation of the financial statements.
The judgement as to whether an equity instrument classified as available-for-sale is subject to impairment depends on the existence of objective indications. One decisive criterion is a constant or considerable decrease in the value of an instrument: at Helvetia Group, instruments are considered impaired if their fair value remains below cost for longer than nine months or falls 20% or more below cost irrespective of the period of time. In addition, ratings and analyst reports can serve as an indication that a company ’s circumstances have changed with respect to technology, the market, economy or law, to such an extent that the cost can probably no longer be recovered. In these cases, the need for impairment is examined and – if justified – recorded.
Derivative financial instruments are classified as “Financial assets held for trading” and are shown in the item “Financial assets at fair value through profit or loss” or are carried as “Derivatives for hedge accounting“. The hedging strategies used by Helvetia Group for risk management purposes are described in Note 17 (from page 170). Derivatives may also be embedded in financial instruments, insurance contracts or other contracts. They are measured either together with their host contract or separately at fair value. The underlying security and derivative are measured and recognised separately if the risk characteristics of the embedded derivative are not closely related to those of the host contract. Changes in the fair value of derivatives are recognised in the income statement.
Current income on Group investments (net)1 823.0 807.1 105.4 121.0 28.4 22.7 – 17.9 – 19.5 938.9 931.3
Asset management expenses on property include all maintenance and repair costs as well as the operating expenses for property that did not generate rental income during the period. The latter amounted to CHF 1.4 million in the reporting year (previous year: CHF 1.0 million).
Financial assets by class 7.6 as of 31.12.2010 Notes Life Non-life Other and elimination Total in CHF million
Unearned premium reserve for insurance contracts non-life 811.4 799.8 15.9 15.7 795.5 784.1
Use of previously unrecognized losses carried forward – 0.7 – 1.8
In the reporting year, Patria Genossenschaft paid CHF 42.0 million (previous year: CHF 16.0 million) into the bonus reserves of Helvetia Schweizerische Lebensversicherungsgesellschaft AG. This was credited to equity without affecting profit or loss and allocated in total to “Provision for future policyholder participation” under liabil ities in accordance with its objective.
The regulatory coverage ratio under Solvency I reported at Group level is in line with the strategic objectives described above. The available capital under Solvency I as of 31 December 2011 was CHF 3,328.4 million (previous year: CHF 3,169.6 million), and the required capital was CHF 1,518.5 million (previous year: CHF 1,434.8 million). As of 31 December 2011, the available capital covered 219.2% of the required capital (previous year: 220.9%).
Fair value of plan assets as of 1 January 1 400.2 1 372.2
The Helvetia employee share purchase plan enables employees to acquire registered Helvetia Holding AG shares. With this plan employees can directly and voluntarily participate in the added value created by the Group at preferential conditions. All employees of Helvetia in Switzerland are eligible if they are in regular employment (not on notice ) and entitled to variable compensation. The number of available shares is specified by the Board of Directors, taking account of the functions of the employees concerned. All shares acquired in this manner are transferred to the ownership of the employee upon receipt and are subject to a mandatory vesting period of three years. The costs associated with the share purchase plan in 2011 were recognised in the income statement at CHF 0.7 million (previous year: CHF 0.7 million).
Herbert Scheidt and Pierin Vincenz are members of the boards of directors of Von tobel Holding AG and Helvetia Holding AG. Helvetia Group does not have any other cross ties or board mandates with the boards of directors of listed companies. With the exception of Patria Genossenschaft (the Patria cooperative society), transactions with cooperation partners are not material for Helvetia Group either as a single transaction or overall. The dividend payment of CHF 41.7 million (previous year: CHF 37.8 million) to Patria Genossenschaft and the contribution of CHF 42.0 million (previous year: CHF 16.0 million) by Patria Genossenschaft to Helvetia Schweizerische Lebensversicherungsgesellschaft AG were the only significant transactions in the reporting period.
Prospective share-based payment (LTC) acquired in the reporting year 1 053 843 1 033 192
Integrated risk management at Helvetia Group must always ensure that the main risks can be detected, recorded and assessed at an early stage, and that they can be appropriately controlled and monitored. The risks are managed in compliance with the requirements of the relevant stakeholders, and the concepts and methods of risk identification, management and analysis are also in line with these requirements.
Most of the products include a premium guarantee which means that the assumptions on mortality, disability, interest rates and expenses used to calculate the premiums are guaranteed. These fundamentals are therefore set prudently at the time the contract is underwritten. If the contract develops better than expected, profits accrue which are paid out in part to the policyholder in the form of policyholder dividends. There are two important exceptions to note with regard to the guaranteed assumptions. Firstly, there are no interest rate guarantees for unit-linked insurance, however, some products may guarantee a minimum benefit payout on maturity. Secondly, premiums in Switzerland for disability benefit policies concluded after mid-1997 are not guaranteed and may be adjusted.
Notes 17.6 “Counterparty risks” and 9 “Insurance business” provide more information about the quality of reinsurance and claims management over the past five years.
A “reasonable possible change” in the risk factors affecting the sensitivity analysis is defined as every bracket that covers a range of possible share price changes where the probability of its occurring over a period of one year is between 10% and 90%. Sensitivities are shown for the borders of the chosen bracket that meets these conditions.
– In 2011, the share capital of Helvetia Vermögens- und Grundstücksverwaltung GmbH & Co. KG, Frankfurt am Main, was increased by EUR 2.0 million.
Helvetia Schweizerische Versicherungsgesellschaft AG, St. Gallen1 Non-life 100.00 full CHF 77.5
Helvetia Compañía Suiza, Sociedad Anónima de Seguros y Reaseguros, Seville Life and non-life 98.97 full EUR 21.4
In our opinion, the consolidated financial statement for the year ended 31 December 2011 gives a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
The Board of Directors is responsible for the preparation of the financial statement 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.
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