Strong business. Profitable growth. Shareholder value.
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Strong business.
Profitable growth.
Shareholder value.
Baader Helvea Swiss Equities Conference
Bad Ragaz, Switzerland
Helvetia Group
January 2019
Disclaimer Disclaimer: NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF IT NOR THE INFORMATION CONTAINED IN IT AND ANY RELATED MATERIALS MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR DISTRIBUTED OR REDISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR TO ANY RESIDENT THEREOF This document, which has been prepared by Helvetia Group, is private and confidential and may not be copied, altered, offered, sold or otherwise distributed to anybody by the recipient without the consent of Helvetia Group. Although all reasonable effort has been made to ensure that the facts stated herein are correct and the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to and an overview of the business of Helvetia Group. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed as accurate by Helvetia Group. Neither Helvetia Group nor any of its directors, officers, employees and advisors nor any other person is liable in any way for any loss howsoever arising directly or indirectly from the use of this information. The facts and information contained in this document are as up to date as is reasonably possible and may be subject to revision in the future. Neither Helvetia Group nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document. This document may contain projections or other forward-looking statements related to Helvetia Group which, by their very nature, involve inherent risks and uncertainties, both general and specific, and there is a risk that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These include (1) changes in general economic conditions, in particular in the markets in which we operate; (2) the performance of financial markets; (3) changes in interest rates; (4) changes in currency exchange rates; (5) changes in laws and regulations, including accounting policies or practices; (6) risks associated with implementing our business strategies; (7) the frequency, magnitude and general development of insured events; (8) mortality and morbidity rates; (9) policy renewal and lapse rates; and (10) realization of synergies and scale benefits. We caution you that the foregoing list of important factors is not exhaustive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties. All forward-looking statements are based on information available to Helvetia Group on the date of its publication and Helvetia Group assumes no obligation to update such statements unless otherwise required by applicable law. This document serves for information purposes only. This document does not constitute an offer or a solicitation to sell, exchange, buy or subscribe to securities, nor does it constitute an offering circular as defined by article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus as defined by the listing rules of the SIX Swiss Exchange Ltd. Investors should make their decision to sell, buy or subscribe to securities in Helvetia Holding AG solely on the basis of the relevant offer prospectus which will be published in due course. This document is not an offer of securities for sale or purchase in the United States. The securities to which this document relates have not been and will not be registered under the United States Securities Act of 1933, as amended (the ʺSecurities Actʺ), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will not be a public offering of securities in the United States. Please note: Sums in this presentation are based on unrounded figures and may not add up due to rounding differences. Likewise, year-on-year changes are calculated on the basis of unrounded figures. 2 |
Kapiteltrenner Helvetia at a glance. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 3 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Who we are – Helvetia at a glance
Our profile
Leading Swiss all-lines insurer (Top 3) with business operations in four additional country markets in Europe and in selected
niche markets worldwide (Specialty Markets)
Active in non-life (property & casualty) and life insurance as well as in Specialty Markets (specialty insurance and reinsurance
business)
Over 5 million customers – focus on SME and private clients; 6,592 employees
Market capitalisation of CHF 5,455 million as of 31 December 2017
Our strengths
Balanced portfolio mix1) of life (53%) and non-life (47%) business
Geographic diversification (CH / Europe, through Specialty Markets also worldwide)
Omni-channel approach, strong cooperation partners
Solvent partner – strong capitalisation
Our promise
Top quality provider and solid Swiss insurance company
Strong service mentality: tailor-made solutions, fair and reliable
Sustainable and reliable dividend payments with attractive yields
Continuing long-term growth through a well balanced combination of attractive markets and profitable insurance and pension
solutions
1) In percentage of business volume 2017
4 |
Helvetia is well positioned and has an excellent
basis for the future
Switzerland
Business volume 2017: CHF 4,978 million
Stable foundation of the Group
Non-life:
Private clients & SME, #5 market position
Very good CR of 83.1% (2017)
Europe
High quality service provider
Life: Business volume 2017: CHF 2,764 million
#3 market position Profitable and expandable market positions
Successful adaptation of product portfolio to current interest environment Same customer segments (retail/SME)
Additional synergies within the Group
Specialty Markets (worldwide)
Business volume 2017: CHF 900 million
Strong positioning in selected niche markets
(top 1 CH, top 2 FR)
Good international diversification
Proven global risk diversification in active
reinsurance
5 |Our strength is a well developed sales network
with excellent partners…
(as of 30/06/2018)
Own sales force Agents Brokers Partners Direct sales/new media
CH 1,200 broker Swisscanto online@helvetia.ch
910 sales agents 1,760 agents smile.direct
agreements Raiffeisen
AT 250 sales agents 380 agents 1,200 brokers 3 partner banks Durchblicker.at
6,300 active check24.com
DE 250 agents ARAG
broker relations online@Helvetia.de
IT 790 agencies 11 worksite marketing partners with 25 branches
(4,360 sales persons) 210 brokers 28 partner banks with 3,200 branches Easy Ski
5'000 financial advisors
online@Helvetia.es
ES 1,840 agents 2,050 brokers 12 bank partners 200 intermediaries web
3 aggregators
Yacht insurance with SGI
FR1) 2'950 active Partnership with Caisse Régionale of Groupama
broker relations GAN agents network for transport insurance
1) as of 31/12/2017
6 |…which we develop into a customer-centered omni-
channel network step by step
Cross-channelling Omni-channelling
Partners
Own
Mobile sales-
force
Own Agents Brokers Partners Direct sales /
sales force new media
Online
7 |We have grown profitably on an organic basis and
through selected acquisitions over 160 years
160 years of insurance expertise
1858 start as transport insurer 1996 merger of Helvetia Insurance & Patria Mutual
1870-1970 initially, expansion strategy with small portfolios worldwide Creation of Helvetia Patria Holding AG, Listing at SIX Exchange
From 1990 focusing on 6 European core markets 2006 change of name to Helvetia Holding AG
Defferrard & Lanz
Transactions since 2008
MoneyPark (by MoneyPark)
Phenix SEV finovo
CH Nationale Suisse
(by MoneyPark)
Alba
gan
CEAT Eurocourtage
FR
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
IT Chiara Vita
Chiara
Padana Assicurazioni Assicurazioni
AT
Baloise AT
8 |Our strategy helvetia 20.20 creates value
helvetia 20.20 creates ...through transformation … and gets us fit for the Our financial targets
value... and innovation future
Volume: CHF 10 billion (ambition)
Value for customers Transformation Fit for the future
Simple, customised and personalised Strengthening of core business Agile and efficient Non-life: Net CR < 93%
insurance solutions and secure Growth Innovative and digital Life: NBM > 1%
pension solutions with a high level of Digital customer and partner Customer-centric through
convenience interaction combination of traditional strengths Synergies (pre-tax): > CHF 130 million
Greater automation and utilisation of new opportunities Return on equity: 8–11%
Value for employees New business models Dividend (5 years) > CHF 1 billion
Attractive and future-oriented Eco-system «Home», skill-based
Still personal and reliable SST ratio: 140 - 180%1)
employer M&A
Sustainable customer promises S&P rating: A
Targeted innovations / Prototyping Healthy capital base
Value for shareholders Corporate venturing
Continuous increase in profit and Corporate incubation
dividend potential Partnering
1) Range under review considering the introduction of new SST models as of 1 January 2019
9 |Our key investment highlights are:
Strong business set-up Profitable growth strategy Shareholder value
Successful all-lines insurance since Increasing underlying earnings Increased dividend per share (in CHF)
160 years (in CHF million)
Sound business mix (47% non-life,
53% life)1) 422 439 492 502 21.00 23.00
18.00 19.00
Favorable regional diversification:
strong home market and profitable
2014 2015 2016 2017 2014 2015 2016 2017
footprint in Europe
Driven by… Attractive dividend yield of 4.2%
Focusing on private individuals and strong technical results in NL
SME in all country markets Ø CR 2014-2017: 92.3% Pay-out ratio of 47% (underlying
successful handling of low rates earnings) and 59% (IFRS earnings)
helvetia 20.20: in life
Transforming the core business interest margin 2014-2017: +18 bp Switzerland, Europe and Specialty
Targeted innovations yield 2014-2017: -39 bp Markets all contributing to Group
Share of capital-light products on dividend
new business in life >70%
…and supported by a conservative
investment portfolio
1) Based on 2017 business volume
10 |Kapiteltrenner Key financials. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 11 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Solid development of volume, profit and combined
ratio
After tax profit1) Business volume Our focus
(in CHF million) (in CHF million)
Profitable growth
492 502 8,235 8,513 8,641
439
5,833
224
2015 2016 2017 HY 2018 2015 2016 2017 HY 2018
Net combined ratio (non-life) Value of new business (life) Our focus
(in %) (in CHF million)
Strong technical results
Profitability and efficiency
enhancement
49
92.1 91.6 91.8 92.7
33
23 23
2015 2016 2017 HY 2018 2015 2016 2017 HY 2018
1) 2015-2017 based on underlying earnings
12 |Strong capitalisation and sustainable dividend
strategy
Shareholders’ equity1) Solvency Our focus
(in CHF million) (as of 01/01/2018)
Financial strength
SST ratio: 212%
140-180%
4,655 4,813 5,229 4,994
0% 100% 200%
Target range4)
2015 2016 2017 HY 2018
Dividend per share Dividend yield / Pay-out ratio Our focus
(in CHF) (in %)
Sustainable dividend policy
3.8% 3.4% 3.8% 4.2%
21.00 23.00
18.00 19.00 44%2) 45%2) 44%2) 47%2)
47%3) 66%3) 58%3) 59%3)
2014 2015 2016 2017 2014 2015 2016 2017
1) Excl. preferred securities
2) Basis underlying earnings
13 | 3) Basis IFRS
4) Range under review considering the introduction of new SST models as of 1 January 2019Kapiteltrenner
Current examples
implementation.
of strategy
oder Fazit auf Farbfläche
Flexible Schriftgrösse
Arial Black 0.9 ZA
14 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019Strengthening of core business: tailor-made
customer journey along all touchpoints
360° customer view
Strengthening of core business
15 |New business models: ʺHomeʺ ecosystem –
everything from a single source
Establishing new business models
16 |Kapiteltrenner Investments. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 17 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Investments: well diversified portfolio with good
ALM and low duration gap
Portfolio by asset class Bonds
CHF 49.6 bn
Investment property
60% 14% 9% 6% 5% 2%2%2% 31/12/2016
6%
5% Mortgages
Market risk PH
Equities 1)
CHF 52.3 bn
58% 14% 10% 7% 5% 2%2%2% 31/12/2017
Loans
Alternative investments /
investment funds / derivatives
Performance by asset class 2017 Duration gap3)
Other 2)
16.2%
Efficient asset-liability
matching with a duration
gap of
0.0
4.0%
2.8%
1.9% 1.8%
Equities Bonds Investment Mortgages Total
property yield
1) Equity exposure delta-adjusted as of 31/12/2017: 5.6%
2) Money market instruments and investments in associates
18 | 3) The duration gap represents the exposure of risk-bearing capital to interest rate changesKapiteltrenner Solvency and risk sensitivities. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 19 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Well-capitalised: good SST ratio
Greatly improved SST ratio driven by the increase of risk-bearing capital
(in CHF million) 2017 2018 ∆ 18/17
Stable target capital (compensating effects)
Risk-bearing capital 6,317 7,863 1,546
Favorable developments on the capital markets which were characterised
Target capital 4,178 4,174 -4
by rising stock prices, higher risk-free interest rates and lower credit spreads
Risk margin 871 876 5 New hybrid bond (EUR 500 million) issued in spring 2017 contributed to a
Risk-bearing capital strongly improved capitalisation
5,446 6,987 1,541
– risk margin
Successful business performance moderated by expected dividend
Target capital
3,307 3,298 -9
– risk margin distribution for financial year 2017
SST ratio 165% 212% +47% pts Positive impact from FINMA-driven model and parameter adjustments
= positive effect on SST ratio = neutral effect on SST ratio = negative effect on SST ratio
20 |Solvency and risk sensitivities
Group solvency (as of 31/12/2017)
Sensitivities of solvency Equities Interest rates Credit spreads1)
-10% -50 bp +50 bp
SST -6% pts -5% pts -19% pts
Risk sensitivities2) (as of 30/06/2018; in CHF million)
Interest rate risk sensitivities Interest rate level Interest rate level
+10 bp -10 bp
Income statement 1.3 -2.7
Equity -80.7 81.8
Equity price risk sensitivities Equity price Equity price
+10% -10%
Income statement 97.4 -86.2
Foreign exchange risk EUR / CHF USD / CHF GBP / CHF
sensitivities +2% -2% +2% -2% +2% -2%
Income statement -2.5 2.6 -2.4 2.4 -1.3 1.3
1) The spread-sensitive investments are defined as interest-bearing investments with the exception of "AAA"-rated government bonds, bonds issued by multilateral development banks, mortgages,
policy loans and mortgage backed bonds. For more information on Solvency and related sensitivities please refer to the financial condition report of Helvetia Group.
21 | 2) Net of PHP and taxKapiteltrenner Shareholder structure. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 22 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Shareholder structure with long-term focus
Shareholder structure
(as of 30/06/2018) Free float by geography
Swiss investors
37.8%
Investors
based abroad
Free float
34.1% 62.2%
Patria
Mutual
65.9%
Free float by investor type
Private Other institutional
individuals 30.0% investors
45.8%
Banks and
insurers 24.2%
23 |Kapiteltrenner Appendix I. Half-year results 2018. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 24 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Key figures and highlights at a glance
Business volume Non-life +5.5% (in OC) growing in all lines of business and segments
Growth CHF 5,833 million Life +0.8% (in OC) driven by investment-linked products in
Switzerland (+19.7%) and Germany (+17.3% in OC)
$ Net income after tax Resilient result despite
Profitability CHF 224 million weak equity markets impacting investment result in non-life
and life
higher NatCat claims compared to the prior-year period
Specialty Markets +12.7%
strong technical results in France and ARI
Net combined ratio Net CR on good level although impacted by higher claims related to
92.7% storms and other weather events
Good underlying claims development reflects strong portfolio quality
New business margin Focused sale of capital-light products and revision of traditional
products resulting in higher NBM
1.4%
Strategy implementation Expansion of B2B2C business
helvetia 20.20
on track Launch of mortgage exchange Mex; new partner for "home" ecosystem
25 |Solid net income
Net income after tax
(in CHF million)
-13.4% 35% Life2)
-8 -28 9 Non-life2) 65%
-8
258 250 1,349 224
SpM3) 7%
Underlying Underlying-IFRS ∆ Non-life ∆ Life ∆ Other IFRS net income 25% CH3)
earnings accounting activities HY 2018 Europe3)
HY 2017 adjustment1)
68%
HY 2017 HY 2018
1) Amortisation of bonds acquired at market value with the acquisition of Nationale Suisse in 2014 to par
2) Share on total earnings excl. other activities
3) Share on total earnings excl. Corporate
26 |Resilient results in non-life and life impacted by
weak capital markets
(in CHF million)
Non-life Life HY 2017
-16.8%
HY 2018
-15.4%
-2 -28
177 -6 -8
1,349 147 92 78
Underlying earnings Underlying-IFRS ∆ Profit IFRS net income Underlying earnings Underlying-IFRS ∆ Profit IFRS net income
HY 2017 acc. adjustment1) HY 2018 HY 2017 acc. adjustment1) HY 2018
Other activities
n.a.
-10 9 -1
Underlying earnings ∆ Profit IFRS net income
HY 2017 HY 2018
1) Amortisation of bonds acquired at market value with the acquisition of Nationale Suisse in 2014 to par
27 |Solid results in Switzerland and Europe – Specialty
Markets with pleasing improvement
(in CHF million)
Switzerland Europe
-22.3%
-7.2%
-7
-36 -1 -3
194 59
151 55
1,349
Underlying earnings Underlying-IFRS ∆ Profit IFRS net income Underlying earnings Underlying-IFRS ∆ Profit IFRS net income
HY 2017 acc. adjustment1) HY 2018 HY 2017 acc. adjustment1) HY 2018
Specialty Markets Corporate
n.a.
+12.7%
1,349 11
14 2 16 -9 11 2
Underlying earnings ∆ Profit IFRS net income Underlying earnings ∆ Profit IFRS net income
HY 2017 HY 2018 HY 2017 HY 2018
1) Amortisation of bonds acquired at market value with the acquisition of Nationale Suisse in 2014 to par
28 |Non-life: business volume in HY 2018
(in CHF million; currency-adjusted Property thereof Motor Liability Accident / Transport / ARI Total NL
growth against HY 2017) Engineering vehicle Health Art
322 - 478 112 144 2 - 1,057
Switzerland
-3.5% - 1.3% 3.6% 4.3% 3.3% - 0.4%
393 18 426 109 113 57 - 1,099
Europe
6.7% 19.0% 10.4% 6.4% 3.3% 3.7% - 7.5%
193 10 143 44 19 39 - 439
Germany
7.4% 24.4% 18.0% 3.1% 2.9% 5.6% - 9.8%
55 5 135 31 59 5 - 285
Italy
9.3% 21.2% 4.3% 9.9% 1.4% -4.0% - 5.1%
77 1 77 12 13 9 - 187
Spain
4.3% -17.3% 12.5% 17.5% 8.7% -0.4% - 8.3%
68 2 71 23 22 4 - 187
Austria
5.5% 12.6% 6.1% 3.5% 5.7% 4.0% - 5.5%
128 118 16 1 - 184 255 585
Specialty Markets
24.3% 25.9% -15.4% -17.6% - 6.9% 12.7% 12.1%
111 111 - - - 51 - 162
Specialty Lines CH / Int.
19.6% 19.6% - - - 29.7% - 22.6%
17 6 16 1 - 133 - 167
France
69.3% n.a. -15.4% -17.6% - -0.3% - 2.2%
- - - - - - 255 255
ARI
- - - - - - 12.7% 12.7%
844 136 919 222 257 243 255 2,740
Total
4.6% 25.0% 4.8% 4.8% 3.8% 6.1% 12.7% 5.5%
29 |Non-life: overview of net combined ratios
(in %) CH Europe Specialty Markets Group
Claims ratio (net) 61.6 65.6 64.1 63.9
Cost ratio (net) 24.6 30.1 32.1 28.7
Combined ratio HY 2018 (net) 86.3 95.7 96.2 92.7
Combined ratio HY 2017 (net) 84.5 94.4 96.8 91.3
Change from HY 2017 1.8 1.3 -0.6 1.4
DE IT ES AT SpL FR ARI
(in %)
CH/Int.
Claims ratio (net) 70.0 57.6 73.1 60.1 56.6 63.0 67.4
Cost ratio (net) 29.9 34.5 24.5 29.6 38.7 32.3 29.6
Combined ratio HY 2018 (net) 99.8 92.1 97.6 89.7 95.3 95.3 97.0
Combined ratio HY 2017 (net) 95.7 92.0 96.7 92.8 94.4 98.0 97.2
Change from HY 2017 4.1 0.0 0.8 -3.1 1.0 -2.7 -0.2
30 |Life: business volume in HY 2018
(in CHF million; currency- Investment- Deposits1) Total Traditional Total Total Total
adjusted growth against linked investment- life2) individual life group life life
HY 2017)
linked
128 27 156 275 431 2,113 2,543
Switzerland
6.2% n.a. 19.7% -6.9% 1.2% 1.1% 1.1%
207 59 265 235 500 49 549
Europe
-5.6% -9.1% -6.4% 3.9% -1.8% 10.8% -0.8%
92 - 92 50 142 - 142
Germany
17.3% - 17.3% -4.7% 8.5% - 8.5%
- 59 59 140 199 13 213
Italy
- -9.1% -8.7% 11.3% 4.5% 18.4% 5.3%
11 - 11 14 26 36 61
Spain
-10.5% - -10.5% -4.6% -7.3% 8.2% 1.1%
104 - 104 30 134 - 134
Austria
-19.3% - -19.3% -6.6% -16.8% - -16.8%
335 86 421 510 931 2,162 3,093
Total
-1.2% 18.4% 2.2% -2.4% -0.4% 1.3% 0.8%
1) Not reported as premiums under IFRS
2) Incl. modern traditional and protection products
31 |Life: new business margin
Higher VNB despite increased risk discount rate
(in CHF million) HY 2017 HY 2018 ∆ 18/17
thanks to better profitability and higher new
Value of new business (VNB) 20 23 16.5% business volume
New business volume (in PVNBP) 1,643 1,715 4.4% Higher PVNBP in all life units (excl. large contracts
New business margin (NBM; in % PVNBP) 1.2% 1.4% 0.1% pts in Europe); consistent improvement of new
business mix in individual life and group life
NBM increasing following the focused sale of
capital-light products and successful revision of
traditional products
32 |Life: interest margin and guarantee buckets
Direct yields and guarantees in life business
Group (CHF) Switzerland (CHF) Europe (EUR) Guarantee buckets Group
100%
2.45%4) 2.52%4)
2.34%2) 2.23%2) 2.37%4) 90%
2.18%2) 2.32%3) 2.18%3) 2.15%3) 0.35% 0.49% 80%
0.47%
70%
0.98% 0.91% 0.89% 1.11% 60%
1.01 % 0.98%
50%
2.10%
40%
2.03% 1.90%
30%
1.36% 1.32% 1.29% 1.21% 1.17% 1.16% 20%
10%
0%
HY 2017 FY 2017 HY 2018 HY 2017 FY 2017 HY 2018 HY 2017 FY 2017 HY 2018 HY 2017 HY 2018
≤1.0%
Gross margin1) Average interest rate Helvetia has to generate in order to meet its obligations 1.0% < x ≤ 1.5%
>1.5%
1) Before legal quota; direct yield annualised
2) Not taking into account the effect of the revaluation of bonds at market value (HY 2017: -6 bp; FY 2017: -6 bp; HY 2018: -5 bp)
33 | 3) Not taking into account the effect of the revaluation of bonds at market value (HY 2017: -6 bp; FY 2017: -6 bp; HY 2018: -4 bp)
4) Not taking into account the effect of the revaluation of bonds at market value (HY 2017: -7 bp; FY 2017: -7 bp; HY 2018: -6 bp)Life: reserves
(as of 30/06/2018; in CHF billion)
0.25% interest guarantee 21% of Swiss life reserves are subject to the BVG
EU
minimum interest rate
7.7 1.00% interest guarantee
Individual
life
11.4
CH Other
29.1 6.3
Group
life 5.3 extra-mandatory
17.7 Retirement
assets
11.4 mandatory
6.1
34 |Investments: stable new and re-investment yield
Investment performance: total portfolio (yields not annualised)
Investment
(in CHF million) Equities Bonds Mortgages Other Total1)
property
Current income 50 1.9% 273 0.9% 121 1.7% 43 0.8% 20 506 1.0%
G/L -3 77 -1 0 -73 0
Investment result 47 1.8% 350 1.2% 119 1.7% 44 0.8% -54 506 1.0%
Unrealised G/L -59 --486 0 0 -4 -549
Total -12 -0.5% -136 -0.4% 119 1.7% 44 0.8% -58 -43 -0.1%
New and re-investment of maturing funds in HY 2018 (yields annualised)
Investment
Equities Bonds Mortgages Average
property
Direct yield 1.7% 1.2% 4.6% 1.2% 1.3%
Weighted by asset class in 2017 5.1% 86.1% 2.3% 6.4% 100%
1) In HY 2018 the revaluation of bonds due to the 2014 acquisitions had an impact on the yield of -3 bp (not annualised) and –5 bp (annualised), respectively
35 |Investment portfolio by IFRS category
4%
15%
50%
CHF Available for sale (AFS)
14%
52.2 bn Loans and receivables (LAR)
Investment property
Trading / Derivatives
17%
Held to maturity (HTM)
31/12/2017 30/06/2018
Hedge Acc.1)
Hedge Acc.1)
Investment
Investment
Associates
Associates
Trading /
Trading /
property
property
HTM
HTM
LAR
LAR
AFS
AFS
(in CHF million) Total Total
Shares 1,432 1,184 2,616 1,403 1,144 2,547
Investment funds 858 291 1,149 885 312 1,196
Alternative investments 143 2 145 304 2 306
Derivative financial
103 103 122 122
instruments
Interest-bearing securities 1,185 24,762 2,437 2,061 30,445 1,230 24,495 2,326 1,935 29,986
Loans 1,151 1,151 1,117 1,117
Mortgages 5,159 5,159 5,230 5,230
Money market instruments 789 789 849 849
Investment property 7,074 7,074 7,157 7,157
Associates 26 26 25 25
Total 3,721 26,239 2,437 9,159 26 7,074 48,655 3,942 25,953 2,326 9,131 25 7,157 48,535
1) Excl. investments with market risk for the policyholder
36 |Sustainable investments: MSCI ESG risk profile
Investment portfolio ESG risk profile: A rating
CHF 52.2 bn as of 30/06/2018
3%
Equities
Main asset classes in
scope for the analysis1)
30%
57% 14% 10% 7% 5%
Bonds
Alternative investments /
investment funds / derivatives
Bonds
Investment property 67%
Mortgages
6
Market risk PH
Equities
Loans (2%) Low / minor ESG risk = AAA – A
Alternative investments / investment funds / derivatives (3%) Moderate ESG risk = BBB – BB
Other2) (2%) High ESG risk = B – CCC
1) The analysis covered a multi-dimensional sustainability risk assessment on security level for all financial holdings for which an ESG rating from MSCI is provided (57% of total assets)
2) Money market instruments and investments in associates
37 |Equity walk: SST to IFRS to statutory equity
Reconciliation SST to IFRS to statutory equity
Local GAAP equity amounts to 50% of IFRS equity
(as of 01/01/2018; in CHF billion)
Investment valuation differences – i.e. unrealised
7.9 -2.7 gains and losses, which are not payable as
5.2 -3.5 0.9 dividends – reflect around 67% of IFRS equity
2.6
ʺTechnical provisions and otherʺ includes
SST risk-bearing Valuation & other Consolidated IFRS Investments Technical Consolidated local consolidation effects and valuation differences in
capital differences equity provisions and GAAP equity
other technical reserves and non-technical items such as
deferred taxes; hybrids, which are accounted as
Reconciliation opening to closing statutory equity
equity under IFRS and booked as debt under local
(in CHF billion)
GAAP, have not flown into calculation
0.4
-0.2 0.0 2.6 Local GAAP equity is net of participations (NB:
2.3
basis is a simplified, unaudited consolidation!)
Local GAAP pay-out ratio: 58%1)
Consolidated local Net income Dividends Other Consolidated local
GAAP equity as of GAAP equity as of
31/12/2016 31/12/2017
1) Approximate as fully consolidated net income is available on IFRS level only
38 |Helvetia capital management approach (1/2)
Managing capital generation
To pay out dividends, we need the following
conditions:
Do the legal entities
have free statutory Free statutory shareholder reserves that can
shareholder
reserves? be dividended out
Surplus above our minimum solvency ratio
Pay out from free
statutory Solvency ratios targets including buffers
shareholder above minimum
reserves down to buffer? Surplus above minimum tied asset ratio
level of buffer
Tax and regulatory hurdles also have to be
cleared
NB dividends are payable by legal entities, not by
individual market units or segments1)
Is the market unit Surplus above
RoE below our minimum tied asset
targets? ratio?
1) Market unit = e.g. Switzerland or Germany; legal entity = company (or branch, where regulated) such as Helvetia Swiss Insurance Company; a market unit may be made up of several legal entities
39 |Helvetia capital management approach (2/2)
What determines dividend payments
Capital distributable to shareholders is determined
This is the maximum distributable capital
predominantly by the free shareholders' reserves
we can pay. It is lower than the excess
Free distributable
solvency margin, because the limiting within statutory equity, calculated on a legal entity
shareholder
reserves factor is free distributable shareholder
reserves by legal entity basis. This depends on local
accounting rules, laws, regulations and regulatory
Free distrib- practice
utable resvs
Another limiting factor is the minimum required
solvency margin both at legal entity and group
IFRS Stat equity
equity level
Valuation Excess above
Helvetia includes additional buffers to address
differences minimum required
stat/IFRS Minimum solvency solvency margin
margin we require
volatility and uncertainty
Additional
capital
Available capital Solvency margin Solvency capital
(own funds) (free surplus) requirements
40 |Kapiteltrenner Appendix II. Additional information. oder Fazit auf Farbfläche Flexible Schriftgrösse Arial Black 0.9 ZA 41 Optional Bereichsbezeichnung | Thema/Projekt | Referent 11.01.2019
Executive Management structure
Corporate Secretary1) CEO Internal Audit1)
Christophe Niquille Philipp Gmür Simon Schneider
Support Human Resources 1)Reports to the Chairwoman
functions of the Board of Directors
Roland Bentele Corporate Centre
Members of the Executive
Corporate Management
Kaspar Hartmann
Development
Martin Tschopp
Investments Finance Actuarial IT
Ralph-Thomas Honegger Paul Norton Beat Müller Achim Baumstark
Market areas / Individual-Life Group-Life Distribution
segments Non-Life Switzerland Europe Specialty Markets
Switzerland Switzerland Switzerland
Adrian Kollegger Reto Keller Donald Desax Ralph Jeitziner Markus Gemperle David Ribeaud
Switzerland
42 |Product portfolio (1/2)
Non-life Premiums by business line (2017)
Property (incl. engineering)
CH DE IT ES AT FR LI
8%
10%
Motor vehicle
• • • • • • •
Property 34%
9% Liability
Motor vehicle • • • • • • 8% Accident / Health
Liability • • • • • • 31% Transport (incl. art)
Accident / Health • • • • • Active reinsurance
Travel •
Premiums by segment (2017)
Transport • • • • • • •
Europe
Engineering • • • • • • 22%
42%
Switzerland
Art • • • • • Specialty Markets
36%
Active reinsurance worldwide
Net combined ratio 91.8%
(2017)
43 |Product portfolio (2/2)
Life Group life
Occupational pension plans (BVG) (Switzerland only)
Individual life
Management pension scheme solutions via Helvetia Collective Foundation
CH DE IT ES AT All risks and benefits in occupational pension plans are assured and guaranteed by Helvetia Insurance.
Assumption of complete administration. Package for companies and independent charitable
Traditional organisations.
Risk insurance and savings, financial and
• • • • •
pension solutions with interest rate guarantees Kadervorsorge
from Helvetia Additional and separate pension solutions which go beyond the mandatory requirements.
Investment-linked Helvetia BVG Invest
Insurance policies with investment risk either Needs-oriented occupational pension plans with earnings prospects. Covers the risks of death and
with the policyholder, at Helvetia with • • • • • disability by means of insurance contracts with Helvetia. Assumes the complete administration.
appropriate risk hedging or with an external Investments are managed by Helvetia Investment Foundation..
partner
Risk insurance
Deposits Risk insurance and blanket risk contracts for semi-autonomous occupational pension foundations.
Investment contracts (contracts without a Assumption of complete administration.
significant insurance technical risk)
• • •
Swisscanto Foundations
As a joint venture of Helvetia Insurance and the Association of Swiss Cantonal Banks, the Swisscanto
Collective Foundations offer products and services for occupational pension plans and supplemental
provision. Savings investment via the cantonal banks; insuring against the risks of death and invalidity
with Helvetia. Sales via cantonal banks and brokers. The Swisscanto Vested Benefits Foundation
Business volume (2017) Premiums by segment manages vested benefits accounts for customers of the cantonal banks who do not operate their own
vested benefits foundation. Helvetia manages the branch offices of all three foundations.
57%
(2017) Helvetia Investment Foundation
9%
Joint investment and administration of the pension funds investment. Specialising in indexed and core
Individual life Switzerland
satellite investment products as well as real estate investments.
35%
23%
Traditional Europe
41% Helvetia Consulta AG
Investment-linked Draws up analyses and expert opinions, IAS19 calculations. Assumes the technical administration.
Comprehensive consultation and services for occupational pension funds foundations.
Deposits 77%
59%
Group life
44 |Switzerland: market positions
(as of 2017)
Life Non-life Total
1. Swiss Life 1. Axa 1. Axa
2. Axa 2. Mobiliar 2. Swiss Life
3. 3. Zurich 3.
4. Baloise 4. Allianz 4. Baloise
5. Allianz 5. 5. Zurich
45 |Europe: market positions
(as of 2017)
Germany: CHF 866 million
Non-life No. 27*
Life No. 36*
Transport No. 10*
No. 29*
Austria: CHF 551 million
Non-life No. 8
Life No. 7
Household No. 6* No. 8
Spain: CHF 453 million
Non-life (incl. health) No. 20
No. 25
Life No. 31
Burial insurance No. 11
No. 27
Italy: CHF 894 million
Non-life No. 15
Life No. 26
Accident No. 11
* As of 2016
46 |How does non-life insurance work?
(greatly simplified)
Customer Helvetia
Policy Premium
Insurance process
Claims and costs
Current claim payments Current claim payments
Premium
Provisions and future claims Investments
Combined ratio
Acquisition costs / administration costs Return
Insurance benefits Technical result Result from investments
Total gross earnings for non-life
Reinsurance
Total net earnings for non-life
47 |How does life insurance work?
(greatly simplified)
Customer Helvetia
Policy Premium
Insurance process Risk process Savings process Cost process
Risk premium Savings premium (investments) Cost premium
Risk benefits (death, disability) Risk benefits (death, disability) Return on investments Acquisition costs / administration costs
Guarantee granted to customer Guarantee granted to customer
Insurance benefits Risk result Savings result Cost result
Policyholders’ profit participation Gross profit Net profit shareholders
48 |Calendar and contact Important dates 06/03/2019 Publication of financial results 2018 03/05/2019 Ordinary Shareholders’ Meeting 2019 29/08/2019 Publication of half-year results 2019 Contact details Investor Relations Corporate Communications & PR Susanne Tengler Philipp Schüpbach Claudia Sauter Head of Investor Relations Investor Relations Manager Head of Corporate Communications & PR Helvetia Group Helvetia Group Helvetia Group Dufourstrasse 40 Dufourstrasse 40 Dufourstrasse 40 9001 St Gall (Switzerland) 9001 St Gall (Switzerland) 9001 St Gall (Switzerland) Phone: +41 (0)58 280 57 79 Phone: +41 (0)58 280 59 23 Phone: +41 (0)58 280 50 33 Email: susanne.tengler@helvetia.ch Email: philipp.schuepbach@helvetia.ch Email: media.relations@helvetia.ch 49 |
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