Last year’s reluctant convergence has given way to sustainable relationships between the employees of Helvetia and the former Nationale Suisse. We are therefore concluding this Annual Report by addressing the coalescing of two cultures and portraying the pairs and groups that are now paving a shared way forward as a strong team. A team that appreciates the benefits – and changes – that come from something new and is able to capitalise on them.
Business development 86 Market environment 89 Helvetia Group’s performance 91 Development of business areas 96 Investments 98 Development of business segments
Our response to the question of digitisation consists of a bundle of dovetailing sub-strategies. We must consistently focus on our customers’ needs. Firstly, we have to establish and develop new digital channels to our customers and partners. Secondly, we will use digitisation to create innovative and personalised products and services for our customers. And thirdly, we will digitise our business processes more strongly and also automate them where it makes sense to do so.
We integrated Nationale Suisse and Basler Austria within a short time, impressive proof that our employees can tackle and implement change. We do not just pay lip service to our values of “trust”, “dynamism ” and “enthusiasm”! We will now take on the next changes: purposefully, resolutely and step by step.
• – Banking partners, Banco di Desio (life), Chiara Assicurazioni network (non-life) with many additional partner banks
“Certified Insurance Competence” Since the 2015 financial year, Helvetia has been part of the Cicero “Certified Insurance Competence” learning certification system, which documents the ongoing further qualification activities of Helvetia’s customer advisors. Employees commit to lifelong learning. This constantly strengthens Helvetia’s competence in advisory quality and creates added value for its customers.
In addition, bonds of CHF 225 million (coupon 0.75 %) and CHF 150 million (coupon 1.50 %) as well as a subordinated perpetual bond of CHF 400 million (coupon 3.50 %) and a subordinated bond of CHF 225 million (coupon 4.00 %) placed in 2014 are in circulation. There is also a CHF 150 million bond (coupon 1.125 %) placed in 2013 in circulation. A subordinated perpetual bond of CHF 300 million (coupon 4.75 %) placed in 2010 was repaid at the end of November 2015. Further information on our bonds can be found on our website in the “Investors / Debt information” section.
These objectives are defined in consideration of the risk-bearing capacity and cost / benefit factors. Furthermore, as part of its capital management, the Helvetia Group pursues the goal of an interactive rating of financial strength of at least “A–”.
Appointments at other companies Seven appointments at non-listed companies: President of the Board of Directors of the Aduno Holding AG, Glattbrugg; President of the Board of Directors of Investnet AG, Herisau; President of the Board of Directors of Vincenz Management AG, Niederteufen; President of the Board of Directors of Plozza Vini SA, Brusio; Member of the Board of Directors of Bergbahnen Brigels-Waltensburg- Andiast AG.
Appointments In particular, an appointment as Chairman and Member of the Board of Directors at an unlisted company and an appointment as Chairman of a Board of Trustees.
always at market conditions – there are no significant business relationships between pool members and the Helvetia Group.
b) Options The Helvetia Group has not issued any options. c) Employee options The Helvetia Group has not issued any employee options.
At the meetings, every member of the Board of Directors may ask other members and members of the Executive Management for information concerning all matters pertaining to the Group. Outside of meetings, every member of the Board of Directors
5.4 Addition of items to the agenda Shareholders with voting rights who together represent shares with a par value of at least CHF 2,000 may request the addition of items to the agenda in writing, stating the motions to be put forward, no later than 45 days before the Shareholders’ Meeting.
5.5 Registration of shares The right to attend the Shareholders’ Meeting (22 April 2016) and exercise voting rights is reserved for persons who were registered in the share register as shareholders with voting rights as of the cut-off date (12 April 2016) specified by the Board of Directors and announced in the “Schweizerischen Handelsamtsblatt”. In exceptional cases, guest tickets for the Shareholders’ Meeting may be issued, but holders of such tickets do not have any voting rights. Every share registered in the register entitles the holder to cast one vote.
The merger between Helvetia and Nationale Suisse created the basis for better supporting the new Helvetia on its path towards digital change.
Long-term investment instrument (Executive Management: calculation basis: shares; transfer of ownership in shares or in cash / Board of Directors: transfer of ownership in shares only)
The Shareholders’ Meeting therefore has the following powers in matters concerning compensation: a) As regards the general report on business performance: review of the compensation report and thus the principles and conditions under which the compensation for the members of the Board of Directors and the Group Executive Management are determined.
a) Fixed compensation Each member of the Board of Directors receives the same basic fixed salary determined in advance, except for the Chairman whose higher fixed salary takes into account his greater involvement in management and operational activities of the company. The Vice-Chairmen, members of the committees and Chairmen of the committees also receive an allowance in addition to their basic remuneration. These payments take account of the responsibility and specific functions of each of the individual Board members. The compensation for each individual Board member calculated annually in this way
Local Executive Management Boards Analogous compensation regulations apply as described previously for the Executive Management Switzerland as for the Group Executive Management. The Executive Management abroad is compensated according to the local market conditions governing the compensation systems. The local compensation systems can include fixed and variable salary components. At Group level, members of the local Executive Management abroad are also paid a results-based bonus in the form of shares, based on a reference figure of 10 % of the local basic compensation. The reference figure is also multiplied by the LTC percentage of target achievement. This Group bonus has been designed to promote a sense of belonging to the Group of the Executive Management teams abroad.
As regards fixed compensation, these total amounts refer to different time periods in comparison to the figures given in section II and in reference to financial year 2015: Shareholders’ Meeting to Shareholders ’ Meeting or 1 July to 30 June, respectively, of the year following the Shareholders’ Meeting. These figures are therefore not directly comparable. To provide the reader with a comparison, however, the amounts to be approved are compared to the figures from the same period of the previous year (the amounts approved by the Shareholders’ Meeting and actually paid out).
Growth in the non-life business slowed in the western European markets overall, despite moderate gains in Germany and France and the turnaround in Spain. The non-life business in Germany was boosted by the economic recovery and private consumption and estimates predict growth of 2.6 % compared to 20143. The Italian non-life market declined by a further 1.5 % in 2015, with motor vehicle business expected to be down by 6.5 %. In contrast, the trend in Spain4 in particular was once again positive. Following the recession in recent years, the Spanish non-life insurance market
Life: Stable business volume in a challenging environment, sustained group life business, growth in individual life business
Share of associates’ net profit recognised directly in equity 1.0 – 0.5
Cash and cash equivalents as of 31 December 1 503.0 2 090.4
Helvetia Holding AG exercises indirect or direct control over the company’s operations.
Associates of Helvetia Group are accounted for using the equity method if significant influence is exercised by Helvetia Group. The goodwill resulting from the equity valuation is recognised in “Investments in associates”. The book value of all investments is tested for impairment if there is objective and substantial evidence for impairment at the balance sheet date. Associates of Helvetia Group are listed together with the fully consolidated subsidiaries from the table in section 18 (from page 215).
The discount rates are based on a long-term, risk-free average rate plus a premium for market risk plus regional and property-related surcharges and discounts based on the current condition and location of the property in question. The discount rates applied in the reporting period are set out in section 7.5 (page 151). The portfolio is regularly reviewed on the basis of appraisal reports prepared by independent experts. All other countries use independent experts to determine market estimates at intervals of no more than three years.
Land is not depreciated. Useful life is adjusted if the pattern of consumption of the economic benefit has changed. Value-adding investments are added to the current carrying value in the period and are depreciated over the entire term if an increase in the economic benefit is expected from the investment and reliable estimates exist for the cost. Depreciation is recognised in the income statement under “Operating and administrative expenses”. Repairs and maintenance are charged to the income statement as incurred. Tangible assets are regularly tested for impairment (see section 2.11, page 119).
Financial assets are initially recognised at fair value. Directly attributable transaction costs are capitalised with the exception of financial assets at fair value through profit or loss, for which the transaction costs are charged to the income statement. Helvetia
Unearned premium reserves and actuarial reserves are calculated using local methods. Zillmerisation is not applied to actuarial reserves in any country market apart from
Claims incurred including claims handling costs (non-life) – 803.0 – 491.3 – 1 155.1 – 1 072.3
Reinsurers’ share of benefits and claims – 1.1 32.8 277.2 158.6
Share of profit or loss of associates – – – 0.0 of which transactions between geographical segments 0.5 0.6 – –
Income attributable to deposits for investment contracts – 43.7 – 73.8 – –
Realised and book gains and losses on financial assets held for trading – 58.4 – 57.0
The replacement of one or more assumptions by plausible alternatives would not have any material impact on the measurement of the “Level 3” investments.
Total past due financial assets without impairment 10.3 11.7 5.7 9.6 4.4 3.1 3.1 6.7
Total as of 31.12. < 1 year 1–5 years > 5 years 2015 2014 in CHF million
Year of loss occurrence before 2006 2006 2007 in CHF million
Estimated claims after year of loss occurence 1 828.6 2 006.0
Investments with market risk for the policyholder 2 885.6 3 134.7
As of 31 December 2015, tax assets were not recognised on losses carried forward of
In the reporting year, as in the previous year, no transfer was made to retained earnings as a consequence of disposals of owner-occupied properties transferred to investment property.
In 2015, on the first call date Helvetia repaid a subordinated perpetual bond issued in 2010 for CHF 300 million paying interest at 4.75 % as of the first proper termination date. The bond was classified as equity.
Solvency Test is risk-based. To this end, the effects of risks on the risk-bearing capital are determined by means of scenario simulations and statistical methods, and quantified taking into consideration dependencies and diversification effects in the form of a risk-based capital requirement.
13.3.2 Movement in the defined benefit obligation 13.3.3 Movement in the fair value of plan assets
Helvetia Schweizerische Lebensversicherungsgesellschaft AG and Patria Genossenschaft have an agreement for capital support which can be renewed annually under certain conditions. Under this agreement, Patria Genossenschaft undertakes to contribute regulatory capital of up to CHF 50 million to Helvetia Schweizerische Lebensversicherungsgesellschaft AG until 30 June 2016 if certain adverse scenarios should arise. The agreement is executed at normal market conditions.
Andreas von Planta (member) 660 660 1 The composition of the Board of Directors changed on 1 January 2015. 2 Joined the Helvetia Board of Directors as of 1 October 2015.
Reinsurance ensures that the individual primary insurance units have the appropriate treaty reinsurance protection and transfers the risks assumed, taking account of diversification, in the reinsurance market. This centralisation leads to the application of uniform
Group-wide, the technical risks in the non-life business are dominated by natural hazards. Except in very rare cases, the reinsurance set-up reduces the claims remaining from a natural event or individual risk in the direct business at Group level to a maximum of
A considerable amount of time may pass between the occurrence and the reporting of a claim event, in particular in the liability business. In order to cover existing liabilities that are still to be claimed by policyholders, Helvetia Group establishes incurred but not reported reserves. These are calculated using actuarial methods on the basis of many years of claims experience, taking into account current developments and existing uncertainties.
Depending on the product, premiums are paid as single or regular premiums. Most of the products include a discretionary participation feature, although some countries regulate the minimum amount of profit participation to be credited to the customer. Traditional individual life insurance accounts for 28.9 % (previous year: 31.2 %) of the gross premium volume of the life business of Helvetia Group, with 57.9 % of the premiums (previous year: 41.9 %) coming from Switzerland. Investment-linked life insurance (index and unit-linked products) generates 10.1 % (previous year: 9.7 %). 46.4 % of the premiums
Helvetia Group establishes reserves for its life insurance business to cover expected payouts. The amount of life insurance reserves depends on the interest rates applied, actuarial parameters and other influencing factors. In addition, the Liability Adequacy
Pension options with guarantees, partially also mandatory conversion rates, included in the products represent an additional risk. In particular, the high mandatory BVG
Shareholders may have to bear losses if the guaranteed interest included in premiums and reserves cannot be generated. This could happen if, for example, interest rates remain very low in the long term. To counteract such developments, both the technical interest rate for new contracts in individual insurance and the BVG minimum interest rate for new and existing contracts are adjusted to the new interest rate. At the end of 2015, the highest guaranteed interest rate in individual insurance was in Spain, where older policies still include a guaranteed minimum interest rate of up to 6 %. These guarantees are partially covered by corresponding assets and the residual risk is covered by supplementary reserves. In the other countries the maximum guaranteed return is 4.0 % in
Unearned premium reserve (gross) 1 304.6 – – – – 1 304.6
as of 31.12.2015 < 1 year 1–5 years 5–10 years > 10 years
Actuarial reserves for insurance and investment contracts with 0 % interest guarantee 464.7 0.0 538.8 2.7
As there are no financial instruments netted on the balance sheet at Helvetia, the table shows the extent to which netting agreements for financial instruments exist, even if no netting takes place on the balance sheet. The netting agreements are ISDA and Swiss
– On 28 August 2014, Helvetia purchased 100 % of Basler Versicherungs-Aktiengesellschaft, Vienna, a subsidiary of the Bâloise Group. The company generated premium volume of EUR 135.3 million in 2013, of which EUR 105.5 million was in non-life and EUR 29.8 million in the life business. The purchase price was EUR 159.3 million in cash. On 21 November 2014, the name of Basler Versicherungs-Aktiengesellschaft, Vienna, changed to Helvetia Versicherungen Österreich AG, Vienna.
Devrientgasse 4 Projektentwicklungs- und Verwertungs GmbH & Co. KG, Vienna Other 100.00 full EUR 0.0
Compagnie Européenne d’Assurance des Marchandises et des Bagages S.A., Bruxelles Non-life 100.00 full EUR 18.5
The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Profit carried forward to new account 144.3 146.3 1 2015: CHF 19.00 per registered share 2014: CHF 18.00 per registered share
As at 1 January 2014 44 255 registered shares 11.3 purchases 5 972 registered shares 2.6 sales –23 939 registered shares − 5.7
In our opinion, the financial statements for the year ended 31 December 2015 comply with Swiss law and the company’s articles of incorporation.
Embedded value after tax of which value of insurance portfolio 1 823.9 1 624.9 of which adjusted equity 1 965.1 1 855.5 of which solvency costs – 1 042.9 – 922.5 of which value of insurance portfolio 241.0 208.4 of which adjusted equity 328.9 334.0 of which solvency costs – 120.3 – 121.0 of which value of insurance portfolio 2 064.9 1 833.3 of which adjusted equity 2 294.0 2 189.5 of which solvency costs – 1 163.2 – 1 043.5 1 of which minority interests CHF 1.6 Mio. as of 31.12.2015
Group profit for the period per share according to IFRS in CHF 29.0 43.0 – 32.6 %
Consolidated equity per share in CHF 470.4 503.2 – 6.5 %
IFRS earnings of the Group after tax 309.5 393.3 – 21.3 %
Consolidated equity (without preferred securities) 4 655.3 4 963.1 – 6.2 %
Contacts Helvetia Group Susanne Tengler Investor Relations P.O. Box, CH-9011 St Gall www.helvetia.com susanne.tengler@helvetia.ch