Corporate Executive Committee in this report, represents a significant investment in our Basel head-office site from 2015 onwards, creating some 2,000 state-of-the-art office workplaces for both Baloise and other organisations�
The twin-track business model combining banking and insurance expertise under one roof retained its considerable appeal for customers in 2014� The volumes generated by the insurance sales force grew by a further 5�5 per cent during the reporting year to CHF 2�6 billion� Baloise Bank SoBa and Basler Versicherung will be stepping up this successful collaboration in 2015 in order to make best use of their combined expertise�
BALOISE INSURANCE BELGIUM In Belgium, Baloise Insurance achieved highly encouraging growth of 56�6 per cent in its unit-linked life insurance business� It forged new banking partnerships and developed a new hybrid product combining the features of conventional and unit-linked life insurance� The total volume of business transacted was also very pleasing, growing by 12�3 per cent to CHF 1,544�9 million�
Premiums earned and policy fees (net) 6,686.1 6,630.6 6,554.6 7,044.8 7,004.5
Sub-total of IFRS gross premiums written1 1 Premiums written and policy fees (gross). 2 Other units: Austria (until 28th August 2014), Croatia and Serbia (until 11 March 2014).
WHAT SETS BALOISE APART AS AN EMPLOYER What is special about working for Baloise? The following answers to this question were made – not only from our own members of staff but also from applicants� The responses can be summarised in the following four statements: → Baloise employees are highly trusted from an early stage� They are given the responsibility they need in order to perform their roles, which is an aspect they appreciate� Baloise offers its staff something that is now a hallmark of good employers: the freedom to make their own contribution to the Company’s success�
Baloise believes that another crucial factor for its future success is the quality of its managerial staff and the way in which leadership is practised within the organisation� In 2014 the workforce in Switzerland was therefore asked to give their line managers feedback on the subject of values-based leadership� The resultant management dialogue sessions were then used to identify specific measures that could exploit the potential for improvement�
Having a diversified workforce is crucial to Baloise’s lasting success� Striking the right work/life balance is also seen as a key aspiration of the Baloise Safety World� By providing flexible and part-time working, the option of working from home, and facilities such as the Bal4Kids crèche in Basel, the Company offers a pleasant environment in which staff can develop their full potential�
AUTHENTIC, RELEVANT AND DISTINCTIVE: SPREADING THE WORD ABOUT BALOISE AS AN EMPLOYER In order to fulfil these aspirations and engage in a dialogue with potential employees, the Baloise Group’s employer branding approach focuses on the highly successful social media activities centred on the baloisejobs�com blog� The Company also maintains a presence on Facebook, Twitter, Google+, Pinterest, Xing and LinkedIn as part of its social media strategy�
This process provides a 360-degree view of our key strategic risks and how they are managed� Our strategic risk management offers the clear prospect of penetrating new business lines and optimising the risk/return profile of our existing business�
1. STRUCTURE OF THE BALOISE GROUP AND SHAREHOLDER BASE Structure of the Baloise Group Headquartered in Basel, Switzerland, Bâloise Holding is a public limited holding company that is incorporated under Swiss law and listed on the Swiss Exchange (SIX)� The Baloise Group had a market capitalisation of CHF 6,390 million as at 31 December 2014�
Effective risk management is essential for any insurance group� This is why Baloise has devoted two entire chapters to the subject of financial risk management from page 42 onwards and in the Financial Report section starting on page 120�
Corporate Governance Corporate Governance Report including Remuneration Report 5. REMUNERATION REPORT: REMUNERATION, SHARE OWNERSHIP AND LOANS GRANTED TO MEMBERS OF THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE COMMITTEE This remuneration report relates to the 2014 financial year� It describes the remuneration policies adopted and the remuneration systems in place, and it discloses the remuneration paid to the Board of Directors and the Corporate Executive Committee in 2014� The content and scope of these disclosures are determined by sections 13 to 17 of the Ordinance Against Excessive Remuneration in Listed Companies Limited by Shares (ERCO), section 663c (3) of the Swiss Code of Obligations (OR), the corporate governance information guidelines published by the SIX Swiss Exchange, the Swiss Code of Best Practice for Corporate Governance, and circular 10/1 of the Swiss Financial Market Supervisory Authority (FINMA) concerning remuneration systems�
Experience has shown, however, that the individual targets and objectives set for the members of the Corporate Executive Committee essentially equate to the successful management of their area of responsibility and, consequently, are largely identical with the Company’s targets� The target agreement and performance assessment process has therefore been simplified, and the performance-related remuneration paid to members of the Corporate Executive Committee has been discontinued since 2014� Individual performance is factored into the measurement of the performance pool�
→ Also positive non-recurring effects arising from the sale of the Company’s Austrian subsidiary and its disposal of shares in Nationale Suisse and Helvetia
The Company provides its employees in Switzerland with an attractive occupational pension solution (Pillar 2) that meets the following objectives: → It covers its insured employees’ needs in the event of old age, death or disability and mitigates the resultant financial consequences by offering an occupational pension scheme based on the principle of social partnership�
The tables on pages 78 and 79 also include for the first time (for the 2014 financial year) the contributions payable by the employer into the state-run social security schemes (up to the pensionable or insurable threshold in each case)�
Explanatory notes to the table Karin Keller-Sutter was voted in as a new member of the Board of Directors at the 2013 Annual General Meeting. Consequently, she only received a pro-rata share of the usual remuneration. Hansjörg Frei left the Board of Directors at the same time, so he only received half of the usual remuneration.
Cash payment (fixed) cash payment Share Subscription Plan Employee Share Ownership Plan Performance share units (PSUs) Total variable remuneration
Performance share units (PSUs) These have been disclosed at their value of CHF 113.95 at the grant date and measured using a Monte Carlo simulation, which calculates a present value for the payout expected at the end of the vesting period.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion�
Section 5 of the Articles of Association determines whether nominee entries are permissible, taking into account any percentage limits and entry requirements� The procedures and requirements for suspending and restricting transferability are set out in the provisions in section 5 and section 17�
Liabilities included in disposal groups classified as held for sale 21 353.9 –
Realised gains and losses on financial assets, investment property and associates – 669.4 – 1,356.8
Addition / disposal of financial contracts and liabilities from banking business 231.6 589.7
3.7.2 Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial instruments involving fixed or determinable payments. However, they do not include mortgages, loans (section 3.8) or receivables (section 3.9) that the Baloise Group can – and intends to – hold until maturity.
Alternative financial assets – such as private equity investments and hedge funds – are mainly classified as “available for sale”.
3.15.6 Non-controlling interests Non-controlling interests constitute the proportion of Group companies’ equity attributable to third parties outside the Baloise Group on the basis of their respective shareholdings.
3.17.2 Claims reserves At the end of each financial year the Baloise Group attaches great importance to setting aside sufficient reserves for all claims that have occurred by this date.
The difference between acquisition cost and redemption value is recognised in profit or loss over the term of the liability as borrowing costs under the amortised-cost method and the effective interest method.
The Baloise Group’s central risk management team forms part of Corporate Division Finance and reports to the Group Chief Risk Officer, who in turn reports to the Group CFO. It coordinates intra-Group policies, risk reporting and the technical development of suitable risk-management processes and tools. Every month, it tracks developments in the financial markets and their impact on the risk portfolio and the individual risk capacity of all the business units and the Group as a whole. The relevant risk owners and risk controllers verify the figures that have been computed and incorporate them into their management decisions.
→ 10 per cent increase in mortality A mortality increase of 10 per cent during liability adequacy testing had only a marginal effect in Germany, Belgium and Luxembourg and at Baloise Life (Liechtenstein) AG. This was true of the impact on both the income statement and on equity. A mortality increase in the Swiss life insurance business caused a lower amount to be allocated to strengthen annuity reserves, which improved profitability overall by roughly CHF 13 million (2013: by CHF 23 million). The resultant effects on equity were marginal.
FINANCIAL ASSETS OVERDUE BUT NOT IMPAIRED AT THE BALANCE SHEET DATE
Money market interest rate, volatility, price of underlying instrument, exchange rates
Investment property DCF method Discount rate 1 3.5 % – 5.5 % 3 1 The lower these key input factors, the higher the fair value of the investment property. 2 The higher these key input factors, the lower the fair value of the investment property. 3 The input factor ranges shown essentially relate to the real-estate portfolios held by the Baloise Group’s Swiss entities.
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS FOR OWN ACCOUNT AND AT OWN RISK AND CLASSIFIED AS LEVEL 3
Information on the disposal of the remaining 65 per cent shareholding in the company Barosa S.à.r.l. can be found in the line item “Disposals arising from change in the scope of consolidation”.
Not publicly listed, fixed interest rate 60.5 55.4 85.6 26.3 – – 35.5 22.5 181.6 104.2
Net actuarial liabilities under defined benefit plans – 813.6 – 1,280.8 10_FB_Kapitel_18_bis_23_en.indd 190 24.03.2015 13:13:00
18.2.11 Maturity profile The maturity profile of liabilities under pension plans differs depending on whether benefits are prospective or current entitlements. For prospective benefit entitlements, the average expected remaining service period is 10.46 years; the average present value factor for current benefit entitlements under pension commitments is 16.25 years.
Subscribed shares per participant (average) 90.3 89.7 10_FB_Kapitel_18_bis_23_en.indd 194 24.03.2015 13:13:01
Number of active PSUs as at 31 December 2013 81,737 70,741 –
Bâloise Holding Ltd issued a new bond totalling CHF 150 million (1.125 per cent, 2014 to 2024, ISIN CH0261399064) at an issue price of 100.628 per cent on 19 November 2014 (paid-up on 19 December 2014). A further bond amounting to CHF 150 million (3.5 per cent, 2007 to 2014, ISIN CH0035539334) was repaid on 19 December 2014.
31.1 Realised gains and losses on investments in 2013 for own account and at own risk
Total impairment losses on financial assets recognised in profit or loss – 45.7 – 41.1 31.4 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 loss of CHF – 77.0 million was reported for 2014 (2013: gain of CHF 26.5 million).
Financial Report Notes to the consolidated annual financial statements 11_FB_Kapitel_24_bis_Bericht_en.indd 224 24.03.2015 13:13:28
The dilution of earnings in 2013 as well as in 2014 was attributable to the Performance Share Units (PSU) sharebased payment plan and the convertible bond issued by Bâloise Holding.
Gains and losses reclassified to the income statement – 33.4 – 12.5
Change arising from shadow accounting 267.2 – 67.6 199.6 – 737.1 188.3 – 548.8
The company FIPOP S.A. was acquired in Luxembourg in 2013. Belgian company AXIS Life was sold in the first half of 2013. Also in Belgium, the companies Esplan NV and
Financial Report Notes to the consolidated annual financial statements 11_FB_Kapitel_24_bis_Bericht_en.indd 229 24.03.2015 13:13:29
Financial Report Notes to the consolidated annual financial statements 11_FB_Kapitel_24_bis_Bericht_en.indd 235 24.03.2015 13:13:30
Financial Report Notes to the consolidated annual financial statements 11_FB_Kapitel_24_bis_Bericht_en.indd 237 24.03.2015 13:13:30
REPORT OF THE STATUTORY AUDITOR ON THE FINANCIAL STATEMENTS As statutory auditor, we have audited the consolidated financial statements of Bâloise Holding Ltd, which comprise the consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement, consolidated statement of changes in equity and notes to the consolidated financial statements (pages 92 to 241), for the year ended 31 December 2014.
Appropriation of distributable profit as proposed by the Board of Directors 12_FB_Holding_en�indd 255 24�03�2015 13:13:42