Germany The Baloise maintains two business units in the German market. Basler Securitas in Bad Homburg offers predominantly personal and property insurance for private individuals, small and medium sized enterprises, and selected industrial clients. Deutscher Ring in Hamburg focuses on comprehensive insurance and pension solutions for private individuals. The unit’s own sales force is supplemented by partnerships with the brokerage organizations OVB
Deutscher Ring’s premium revenues were slightly above the 2004 figure, marking an end to the premium erosion prevalent in recent years.
dent insurance statistics, you are 0.92 percentage points below last year’s figure” (accident insurance); “The insurance sum of CHF 3 million is far too low for the business liability of a construction firm.”
Bieri had met this potential A customer at an information event on pensions organized by the Iranian-Swiss man’s tomer management system. Pasquale Zarra, too, believes it is a useful tool that adds transparency to his customer relations. “At the press of a button I get an overview of a client’s claim history and can see whether he pays his premiums on time. These are important factors when assessing the quality of a customer relationship.”
Deutscher Ring Deutscher Ring held its ground well and generated a substantial contribution to the consolidated earnings, a consequence of various operational improvements. Satisfactory business growth and significantly lower lapse rates are proof of the progress made in building customer loyalty and positioning the company in the market. Starting in July 2005 the acquisition of life insurer MONEYMAXX
Our agents now have to get accustomed to new ways of thinking and acting. A N D R é B R E D I M U S , C EO B â L O I S E L U X E M B O U R G
We did take account of this human factor in the planning phase, but admittedly underestimated it. Our product is more performant but also more complex than its predecessor. Now sales agents are obliged to contact their customers and ask them to fill out a short questionnaire. After working with the same price structures for thirty years, agents now have to get accustomed to new ways of thinking and acting. It was not always easy for the agents to understand the new rates, let alone explain them to their customers. Introducing the product to the agents therefore proved rather disappointing at first.
CHF 92 million (2004: CHF 84 million). Despite expansion of the sales force the combined ratio improved to 103.7%
Based on our corporate values “create value”, “foster relations” and “bring about change” we focus on implementing the corporate strategy. Human Resources supports this process with the appropriate methods and systems.
London from 1992 to 1995. She serves on the Boards of
Cologne and was awarded the Dr. rer. pol. at the University of Cologne. He is Executive Partner of Dr. Arend Oetker
The Audit Committee additionally assesses the quality of the internal control system, including risk management, and gives scrutiny to the state of compliance within the company. The Audit Committee discussed the fiscal 2005 consolidated financial statements both with management and with the external auditors. On the basis of these discussions, the Audit Committee recommended that the audited annual financial statements be incorporated into the
Boston Consulting Group, Düsseldorf, in the fields of strategic IT management in the banking and insurance sector. He joined the Baloise Group at the start of 1999, serving as head of IT at Baloise Switzerland and responsible for major crossdivision insurance and finance projects within the Baloise
With the exception of Martin Strobel and Martin Wenk, the members of the Corporate Executive Committee do not serve on the boards of companies outside the Baloise Group.
n Chairman of the Board of Directors n Corporate Executive Committee
Convocation of the Annual General Meeting The Annual General Meeting is generally held in April, but no later than six months after the end of the fiscal year.
Audit Committee met four times during the year under review, with the external auditors present each time.
March 10, 2006, recommending that the financial statements be approved by the Annual General Meeting.
German version is binding. The financial Report 2005 contains the audited 2005 annual financial statements with detailed information. It is available in German and in English.
Other disclosures 68 38. Business acquisitions 68 39. Business disposals 69 40. transactions with related companies and individuals 70 41. proportionately consolidated companies 71 42. contingent liabilities and future liabilities 71 43. operating leases 73 44. events after the balance sheet date 73 45. Significant subsidiaries, joint ventures and associated companies as of
Balance sheet 80 notes 81 proposed allocation of retained earnings 83
–1,251.4 –1,094.6 32 –475.3 –524.8 32 –806.4 –815.1 32 –75.9 –88.1
Group are prepared on a historical cost basis, taking into account adjustments resulting from regular measurement of the fair market value of financial assets and liabilities, and have been prepared in accordance with international Financial Reporting Standards (iFRS), which correspond to Swiss legal requirements. iFRS 4 regulates the accounting and disclosure of insurance and reinsurance contracts.
Basler lebens-Versicherungs-Gesellschaft, Basel and its occupational benefits foundation (Vorsorgestiftung). the new iFRS 4 essentially affects the life insurance business; its effects on nonlife business are marginal. iFRS 4 also treats the accounting and disclosure of discretionary participation features (DpF) in insurance contracts.
the provisions of this revised standard were applied as of January 1, 2004. accordingly, disclosure of minority interests is now made within equity. the portion of the Group’s annual profit attributable to minority interests is disclosed in a separate list outside of the consolidated income statement.
3.5.3 Deferred acquisition costs (DAC) the costs incurred in direct connection with the acquisition of insurance contracts and financial contracts with discretionary participation features (DpF) (e.g. commissions) are capitalized and amortized over the term of the agreements, or over the period of premium payments if shorter. the deferred acquisition costs are reviewed for recoverability and each balance sheet closing date. See also Section 3.17.3.
3.5.4 Deferred capital investment fees Direct capital investment fees (for example commissions) that arise upon the conclusion of financial contracts are capitalized and amortized against income over the term of the financing contract. impairment is tested annually.
Financial assets of a debt nature comprise securities such as bonds and other fixed-interest securities. they normally bear interest and are issued in a fixed or determinable amount.
3.9 Receivables Receivables are recognized at amortized cost (i.e. using the amortized cost method), less any valuation allowances for doubtful receivables. the amortized cost normally corresponds to the nominal value of the receivables.
impairment losses on available-for-sale financial assets of an equity nature recognized in the income statement may no longer be recognized in income retroactively. if the fair value of an available -for-sale financial asset of a debt nature increases in a subsequent reporting period and the increase is objectively traced back to an event which arose after the recognition of the impairment in the income statement, the adjustment must be reversed and the amount must be recognized in the income statement as a reversal of an impairment loss.
equity until the planned transaction occurs. if the anticipated transaction is no longer expected to occur, the cumulative gains and losses recognized in shareholders’ equity are transferred to the income statement.
n Health the Baloise Group writes health insurance only in Switzerland and
3.20 Liabilities from the banking business and financial contracts 3.20.1 With discretionary participation features (DPF) Financial contracts with discretionary participation features (DpF)
3.25.1 Income from services income from the banking segment is recognized in the period in which the service is provided.
the longevity, mortality and disability risks specific to life insurance are monitored continuously. the companies of the Baloise
currently, the Group has placed only non-proportional reinsurance programs. the Group’s maximum retention for accumulation losses is cHF 20 million. For individual claims, the maximum retention is cHF 16 million for property claims or cHF 12 million for liability claims.
When the interest rate rises, there is a risk of increased contract terminations (surrenders), which could result in liquidity problems due to benefit payments. this risk is reduced by surrender charges.
actuarial provisions excluding interest guarantee actuarial provisions with 0% interest guarantee actuarial provisions with positive interest guarantee average technical interest of positive interest guarantees
Depending on the product, the fund underlying the savings process is selected from a number of different funds after determining the policyholder’s investment profile.
the following scenarios were played out: – increase in mortality by 10%
as part of the Baloise Group’s corporate-wide risk management standards, investment planning and appropriate asset liability management ensures that maturity mismatches, and thus interest risk, are maintained at a reasonable level taking into account the organization ’s risk-bearing capacity.
the remaining net asset/liability currency balances are minor. Foreign currency management has almost completely hedged US dollar exposure in light of the associated risk and hedged about one-third of the euro exposure.
Receivables and assets from reinsurance in cHF million investments in mortgage bonds are secured by mortgage insurance, investments in debenture loans by deposit guarantee funds. Mortgage loans are secured by the corresponding real estate. lending is restricted by limits.
Germany, which operates primarily as a traditional building and loan savings bank. the other activities and corporate business segment includes primarily investment and real estate companies.
additions from change in the reporting entity structure additions from change in percentage of participation additions capitalization of acquisition costs
Total 16.2 Pension benefits pension benefits are understood to comprise all remuneration accrued for active employees and paid out to pensioners.
Discounted interest rate expected yield on plan assets expected wage and salary increases expected increase in pension benefits in percent calculating liabilities and expenses for defined benefit plans requires actuarial and other assumptions made for each company and country. the assumptions presented above are weighted averages.
16.4.3 Direct share subscriptions Since January 2003, individuals at all group companies eligible for an incentive have been able to obtain shares at a preferred price as a deduction from their variable, performance-based compensation component (incentive). the subscription price in each case is 10%
Financial RepoRt 2005 Financial RepoRt 2005 5� Bâloise-Holding Financial Report 2005 55
Total actuarial provisions – non-life in cHF million 21.2.1 Actuarial provisions by maturities 2004 (restated) �005
SWX 858858 SWX 858851 SWX 1726032 SWX 2011789 25. Financial provisions Restructuring other Total
Financial RepoRt 2005 Financial RepoRt 2005 6� Bâloise-Holding Financial Report 2005 6�
this includes a foreign currency profit of cHF 19.3 million (2004: loss of cHF 28.1 million) incurred on monetary financial assets classified as available-for-sale.
Guarantees granted in cHF million *restated compensation for members of the Board of Directors and the executive management came to cHF 8.8 million during the fiscal year
UBS Group cS Group in percent 5. Treasury Stock the companies in the Baloise Group bought a total of 379,253 shares at an average price of cHF 64 per share during the year under review, and sold 468,192 shares at an average price of cHF 66. at
as a widely held joint stock company, the Baloise is included in the Swiss Market index (SMi) and features in the SWX’s index calculations with a free float of 100%. the following table provides a current breakdown of shareholders as at December 31, 2005.
9. Personnel expenses administrative costs include cHF 1.3 million relating to personnel expenses in the year under review (2004: cHF 1.1 million).
Report 2005 contains the audited 2005 annual financial statements with detailed information. it is available in German and in english.