Investor Presentation: Issuance of Subordinated Debt

Transcription

1 Investor Presentation: Issuance of Subordinated Debt 7-8th September 2017 This presentation is to be read in conjunction with the preliminary offering memorandum dated 6 th September 2017

2 Agenda 1. Who We Are 2. 'Simply Safe' Strategy 3. Financials 4. Capital and Payout 5. Credit Considerations 6. Proposed Offering 7. Appendix 2

3 1. Who We Are

4 Baloise at a Glance Baloise Group Group financials (FY 2016) The Baloise Group is a multiline insurer with leading market positions in its four core markets Switzerland, Germany, Business volume CHF 8,911 mn New business margin 21.3% Technical reserves c. CHF 37 bn Belgium and Luxembourg Specialised financial service provider and asset manager (total EBIT CHF 684 mn Net Combined Ratio 92.2% Equity CHF 5,774 mn assets under management at : CHF 83 bn) Focus on SME and private clients Over 7,300 employees Profit CHF 535 mn Net investment yield 2.9% Return on equity 9.7% What sets us apart Basler Leben AG Industry leading know-how on selecting the right customers One of the best non-life portfolios in Europe Unique insurance and banking business model in Switzerland Competitive advantage due to high agility in IT systems Resilience through financial crises Excellent operational profitability and attractive payout policy Strong capitalisation and high financial flexibility Swiss life segment as a successful pillar of Baloise Group Business volume of CHF 2,991.4 mn in FY 2016, 69% of total business volume in Switzerland. Basler Leben AG belongs to the four largest providers of life insurance in Switzerland Launched "Perspectiva", a semi-autonomous pension solution in 2015, which is one of the fast growing collective foundations in the Swiss SME segment 4

5 Summary Group Financials Business volume In CHF mn FY 2015 vs. FY % EBIT In CHF mn H vs. H FY 2015 vs. FY 2016 H vs. H % +0.8% +37.5% 8'919 8' '624 5' H1 16 H H1 16 H1 17 Attractive volume and earnings diversification (FY 2016) Business volume (CHF 8,911 mn) EBIT (CHF 684 mn) By country By type By country By type Lux 18% B 18% 48% CH Non-Life 35% Individual Life 12% 28% Swiss Group Life % 25% D Investment-type premiums CH B Lux Rest D Total Other Banking Non-Life & AM Life 5

6 Baloise Positioning Our four key markets Belgium Antwerp Brussels Luxembourg Hamburg Germany Bad Homburg Luxembourg Switzerland Germany In CHF mn Business volume EBIT Business volume EBIT Belgium In CHF mn In CHF mn 4'566 4'307 1'316 1'316 1'414 1' '250 2' FY15 FY FY15 FY16 FY15 FY16 FY15 FY16 Luxembourg In CHF mn Business volume EBIT Business volume EBIT 1'445 1'561 1' ' Basel Solothurn Switzerland FY 15 FY FY 15 FY 16 1'382 1'489 FY 15 FY FY 15 FY 16 Life Non-life Banking & AM Other 6

7 Key Investment Highlights Profitable and well-balanced business model positioned for growth Strong positioning in four attractive core markets State-of-the-art systems and fully digitised processes in various areas Financials and capital safe and sound strong underlying business results and capital metrics Attractive and reliable returns to shareholder Conservatively managed investment portfolio Leverage ratio below market average and fully untapped hybrid capacity 7

8 2. 'Simply Safe' Strategy

9 Our Ambition Employees We want to become the employer of choice in our industry Our people are key for our new corporate strategy We will track our achievements very thoroughly Customers Attract an additional one million customers (+30%) by 2021 Focus on customer needs to become the first choice for people who want to feel "simply safe" Tailored omnichannel communication and innovative products and services Shareholders Continue to pursue an attractive dividend policy and repurchase up to three million shares Targeted cash remittance of CHF 2 billion into Baloise Holding between 2017 and 2021 Targeted capital investment in new strategic projects that will generate additional profits in existing and new areas of business 9

10 and How We Will Achieve It Leveraging the Core Business Life Reduced need for capital owing to an improved business mix Contribution to EBIT from the life business of CHF 200 million per year Non-Life Continue to harvest attractive returns from profitable core markets Introduction of innovative products and services Germany Past restructuring expected to materialise and improve profitability A combined ratio in Germany of below 100% from 2017 Capital Strong historical earnings generation Best-in-class solvency metrics Rated "A" by S&P with positive outlook Shareholder Return Cash-upstream of CHF 2 billion to the Holding company from 2017 until 2021 Ongoing share buy-back programme of up to three million shares Employees Entrepreneurial and agile evolving corporate culture An employer of choice in the industry 10

11 Going beyond Traditional Insurance Mobile Insurer Customer Journey Connected Cars Focusing on Mobility Institutional Asset Management Think Tank Insurance from a smartphone in just a few minutes Ambition to become the most popular mobile insurer in Germany by 2021 Customer journey: knowing what services customers want 'Pay how you drive' policies in Luxembourg from 2017 First platform for mobility in Belgium New asset management services for Swiss pension funds from 2017 Increase assets under management by more than CHF 5 billion by 2021 Think tank to deliver innovation Pipeline full of projects for taking the company forward 11

12 3. Financials

13 Half Year Results 2017 A leading employer in the sector Good growth in target segments and further initiatives in going beyond traditional insurance business Higher result thanks to further improved profitability in non-life and less reserve strengthenings in life The trusted choice for our customers: one million additional customers A reliable and attractive investment: CHF 2 bn cash remittance to the Holding Non-Life EBIT: CHF 261 mn Net Combined Ratio Group below 90%; Germany below 100% Net Combined Ratio 89.7% (-2.8 pts) Life EBIT: CHF 115 mn Group Growth 1.0% Non-Life -0.2% Life 2.9% Investment-type New business margin Interest rate margin 24.8% 115 bp Net Income CHF 299 mn (+33.8%) 2017 Banking & Asset Management EBIT: CHF 42 mn Capital CHF 5.9 bn Equity A outlook positive S&P in the green SST Net Investment Yield (not annualised) 1.4% (-0.3 pts)

14 Non-Life

15 Non-Life Business Volume and Business Mix Gross premiums written Business mix In CHF mn +1.9% in local currency In % of gross premiums written 2,128 +1% 2,149 34,5% 11,4% 4,6% 12,6% 33,9% 11,4% 5,2% 12,7% Motor General liability Health Accident Transport Other Active reinsurance Property 1,9% 4,9% 1,1% 4,8% 1,1% 2,0% 28,9% 29,0% HY 2016 HY

16 Non-Life Analysis of Change Net combined ratio and underlying loss ratio In % of net premiums earned Reported loss ratio 60.6% Prior year loss dev t. 2.6% Large claims -3.6% Underlying loss ratio 59.6% Reported loss ratio 57.7% Prior year loss dev t. 5.2% Large claims -1.4% Underlying loss ratio 61.5% 92.5% 2.0% -2.4% -2.5% 0.1% 89.7% 60.6% 57.7% Loss ratio 31.9% Expense ratio 32.0% Combined ratio HY 2016 Claims current accident year Large claims Prior year loss dev t. Costs Combined ratio Loss ratio incl. surplus sharing 16

17 Non-Life Margins by Country Net combined ratio Switzerland Germany Belgium Luxembourg Group In % of net premiums earned Loss ratio Expense ratio Combined ratio Change vs. HY 2016 (in pts) Loss ratio Expense ratio Germany s HY 2016 loss ratio includes 15.2 pts impact of one-off reserve strengthening Combined ratio Loss ratio incl. surplus sharing 17

18 Non-Life Investment Result Investment income and yield In CHF mn Current investment income Impairments Gains and losses through income statement On underlying On derivatives Net Net investment result HY 2016 Net investment result Fixed-income securities 1) Equities Investment property Other 2) Total before FX and investment expenses FX: gains / losses and hedging costs Investment expenses Net investment result Average investments 9,486 9,277 Net investment yield 1.3% 1.6% 1) incl. senior secured loans 2) incl. mortgages and loans 18

19 Life

20 Life Business Volume and Business Mix Technical reserves Business volume In CHF bn, gross, excl. unit-linked and investment type In CHF mn Gross premiums written 3,496 3, % 22% 20% Individual Life 38.1 Gross premiums written 2,417 2,412 Swiss Belgium & % 80% Group Luxembourg 2.9% Life Investment-type premiums 1,079 1,110 Germany Switzerland Switzerland Individual Life Group Life Annuitized & other Non-mandatory Mandatory No / time-limited guarantee Guarantee HY 2016 Policyholder reserves Individual Life 41% 59% 44% 56% 45% 55% HY 2016 Improved business mix Ambition 2021: share of products with guarantee < 45% FY 2015 FY

21 Life Volume and Value of New Business New business Margin in % APE Volume APE, in CHF mn Business mix Individual Life, in % APE Ambition 2021: share of products with guarantee < 15% Swiss Group Life Semi-autonomous solution «Perspectiva» Higher margin due to repricing, improved business mix and FY 2016 model refinements in Switzerland +17.5pts 24.8% 7.3% Individual Life Swiss Group Life % 37% % 40% 4% 70% 26% 9% 70% 21% Risk / biometry No / time-limited guarantee Guarantee # total companies HY 2016 HY 2016 HY 2016 HY 2016 CH D B Lux 1) Group CH D B Lux 1) Group 177 Margin (in % APE) -3.8% 25.5% 21.0% 11.0% 7.3% 21.5% 20.8% 62.5% 17.2% 24.8% Volume (APE) Value (MCVNB) ) excl. Baloise Life Liechtenstein FY 2014 FY 2015 FY

22 Life Earnings and Value EBIT Life Profit by sources IFRS, in CHF mn In CHF mn HY Savings result Risk result Cost result Policyholder participation Interest rate effects Savings results Risk result Cost result Policyholder participation Lower risk result due to positive one-off in HY 2016 In CHF mn HY 2016 Reserve strengthening DAC, PVFP Interest rates derivatives 64-2 Interest rate effects Interest rate effects EBIT Discretionary reserve strengthening in HY 2016 to reduce in-force guarantees HY

23 Life Average Guarantees and Interest Rate Margin Current yield and guarantees 3.0% bp 1.9% 2.8% bp 1.6% 2.7% bp 1.6% -8 bp Reserve strengthening Business mix Total Resilient interest margin due to active management of guarantees -5 bp -3 bp -8 bp Technical reserves and average guarantees Statutory basis CH Ind. Life Technical reserves 3) As at resp , in CHF bn CH Group Life CH D B Lux Group FY FY Current Yield 1) Average Guarantee 2) Average guarantees As at 1.1. resp next reporting period FY % 1.3% 1.5% 2.8% 2.9% 2.7% 1.9% FY % 1.0% 1.2% 2.4% 2.6% 2.6% 1.6% 1.6% 1.0% 1.2% 2.3% 2.6% 2.5% 1.6% FY 2015 FY ) Annualised current investment income (IFRS) in % of statutory reserves, excl. realised capital gains / losses, incl. investment costs 2) Average guarantee (statutory basis), as at 1.1. resp next reporting period 3) excl. unit-linked 23

24 Life Investment Result Investment income and yield In CHF mn Current investment income Impairments Gains and losses through income statement On underlying On derivatives Net Net investment result HY 2016 Net investment result Fixed-income securities 1) Equities Investment property Other 2) Total before FX and investment expenses FX: gains / losses and hedging costs Investment expenses Net investment result Average investments 46,653 45,962 Net investment yield 1.4% 1.7% 1) incl. senior secured loans 2) incl. mortgages and loans 24

25 Banking and Asset Management

26 Banking and Asset Management Earnings IFRS Earnings Baloise Bank Soba EBIT, in CHF mn 54 Local GAAP, in CHF mn HY 2016 Profit for the period Mortgage portfolio (FY 2016) 6,158 6,172 Asset Management Positive development in commission business and hardly any impairments in mortgage business 27 Excellent growth in wealth management mandates (+30%) Various digital projects, e.g. offering of Apple Pay as one of the first financial institutions in Switzerland. Launch of online mortgages in the second half year. Banking Positive one-off effect in 2016 due to amendment of Baloise Bank SoBa pension plan HY

27 Baloise Figures

28 Business Volume Matrix in CHF mn Switzerland Germany Belgium Luxembourg Rest Total Life 2, % % % % - - 2, % 65.8% 22.8% 8.9% 4.6% % Investment-type premiums % % % % - - 1, % 1.6% 13.3% 21.6% 87.6% % Non-life 1, % % % % % 2, % 32.6% 63.9% 69.5% 7.9% 100.0% 37.9% Total 3, % % % % % 5, % 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 28

29 Growth Matrix in % in CHF (in % in LC) Switzerland Germany Belgium Luxembourg Rest Total Life 2.5% -23.6% (-22.2%) -0.2% (1.6%) -5.5% (-3.8%) % (0.0%) Investment-type premiums 1.1% -4.2% (-2.5%) -26.9% (-25.6%) 13.7% (15.3%) % (4.3%) Non-life 0.3% 1.4% (3.2%) 2.5% (4.3%) 0.2% (2.0%) -40.4% (-40.4%) 1.0% (1.9%) Total 1.8% -6.3% (-4.7%) -5.9% (-4.3%) 11.5% -40.4% (13.1%) (-40.4%) 0.8% (1.6%) Negative growth in Germany's life business mainly due to sale of the run-off portfolio 29

30 EBIT Matrix in CHF mn (change in %) Switzerland Germany Belgium Luxembourg Rest Eliminated Total Life (78.3) (26.3) (n.a.) (116.7) (537.9) (-17.8) (152.3) Non-life (20.7) (n.a.) (-44.9) (-13.3) (14.1) (164.0) (25.3) Banking & AM (-47.7) (0.0) (n.a.) (n.a.) (1.0) (0.0) (-21.7) Other (-19.0) (-8.5) (n.a.) (n.a.) (59.5) (-3.1) (10.6) Total (31.4) (n.a.) (-20.1) (35.0) (-95.7) (n.a.) (37.5) 30

31 4. Capital and Payout

32 Capital - IFRS Total Equity Change in equity In CHF mn, incl. non-controlling interests 2017 Per share 1) Total equity at 1 January , Other comprehensive income 9 Dividends -249 Profit for the period 299 Purchase / sale of treasury shares 12 Change in non-controlling interests 48 = 2.0% = -1.6 % Total equity at 30 June , New share buy-back started April Shares to be repurchased : up to 3 mn - Expected buy-back period: 3 years - Completion rate (01.09.): 9% 1) Based on consolidated total equity (excl. non-controlling interests) and on average shares outstanding 32

33 Capital - Unrealised Capital Gains Gross and net unrealised capital gains Gross unrealised gains FY ,626 Shares 121 Alternative financial instruments Fixed-interest securities % Participations and other 176 Gross unrealised gains 1,484 Gross unrealised gains 1,484 Shares 296 Policyholders and shadow accounting -752 Alternative financial instruments 290 Deferred taxes -172 Fixed-interest securities 1,488 Currency translation differences (incl. hedges) -886 Participations and other -589 Net unrealised gains -325 Gross unrealised gains 1,484 33

34 Distribution to Shareholders Baloise's payout to shareholders Update current share buy-back programme 48% 49% 49% 49% Key features BALN shares to be repurchased Up to 3 mn Expected buy-back period April 2017 April 2020 In CHF mn % In percentage of shares issued 1) 6% Repurchase method Secondary trading line at SIX Swiss Exchange Ltd. for cancellation purposes 1) At start of share-buy-back programme (50 mn shares) Dividend payout ratio Cash dividend Share buy-back Key statistics as per 1 st September 2017 Number of shares purchased 260,350 Completion rate 9% Average price paid CHF Value of buy-back CHF 38.4 mn 34

35 5. Credit Considerations

36 Interest rates (in bp) Economic Capitalisation Swiss Solvency Test (SST) Sensitivities as of Shares % -25% 0% +25% > 140% +50% Swiss Solvency Test SST-ratio as of above 140% even in economic stress events such as if interest rates drop by 100 bp and equity markets crash by 50% SST still characterised by high model volatility. FINMA and Swiss Bereiche gemäss GwRMS insurance industry working on new standard model for Swiss Group Life with the ambition that the new model is used starting from onward > 140% > 100% > 80% > 33% Solvency II Baloise business units in the EU published their first Solvency and Financial Condition Report (SFCR) in May All SII-quotas without transitionals and without volatility adjustment 'in the green' % Standard & Poor's Rating Standard & Poor s confirmed Baloise s strong rating of A with a positive outlook, acknowledging its very healthy AAA-capitalisation, strong risk management, high operational profitability and robust competitive position in its profitable core markets 36

37 Capital Structure Development and Comparison to Peers' Average Baloise's capital structure and leverage ratio development Peers' 2 average capital structure and leverage ratio Leverage ratio (%) Senior debt [CHF bn] Hybrid [CHF bn] Tot. equity [CHF bn] Leverage ratio (%) % 0% 26% 23% 24% 20% 0% 0% 0% 0% Senior Hybrid Total equity 8% Senior 16% Hybrid Total equity 70% 74% 77% 76% 80% 76% Source: Company information 1 Leverage ratio calculated as debt divided by the sum of debt and equity 2 Peers include Helvetia, Swiss Life, Zurich, Allianz, Axa and Generali. The calculation is based on a simple unweighted average 37

38 Baloise's S&P Rating Outlook to "Positive"on Improved Capital Entity Basler Versicherung AG (Switzerland) Basler Leben AG (Switzerland) Baloise Belgium NV (Belgium) Basler Sachversicherungs-AG (Germany) Bâloise Holding AG Rating Financial Strength Rating: "A with positive outlook" Counterparty Credit Rating: "A with positive outlook" Counterparty Credit Rating: "A with positive outlook" Financial Strength Rating: "A with positive outlook" Counterparty Credit Rating: "A with positive outlook" Financial Strength Rating: "A- with positive outlook" Counterparty Credit Rating: "A- with positive outlook" Counterparty Credit Rating: "BBB+ with positive outlook" 38

39 Maturity Profile The proposed transaction serves to support and optimize Baloise capital base in the context of the ongoing share buyback and to refinance the upcoming CHF 225 mn senior redemption In CHF mn Senior Hybrid Senior bond to be refinanced First call date of proposed PerpNC5.75 First call date of proposed 30NC

40 Key Investment Highlights Profitable and well-balanced business model positioned for growth Strong positioning in four attractive core markets State-of-the art systems and fully digitised processes in various areas Financials and capital safe and sound strong underlying business results and capital metrics Attractive and reliable returns to shareholder Conservatively managed investment portfolio Leverage ratio below market average and fully untapped hybrid capacity 40

41 6. Proposed Offering

42 Summary Terms and Conditions Structure PerpNC NC10.75 Issuer Baloise Life Ltd Baloise Life Ltd Guarantor (on subordinated basis) Baloise Holding Ltd Baloise Holding Ltd Expected Rating (S&P) [BBB+] 1 [BBB+] 1 Size CHF[ ]m CHF[ ]m Status The Bonds constitute direct, subordinated and unsecured obligations of the Issuer The Bonds constitute direct, subordinated and unsecured obligations of the Issuer Tenor Interest rate Optional Deferral Mandatory Deferral Accumulation Early Redemption Perpetual, callable on [ ] 2023 ("the First Call Date") and on any interest payment date thereafter Redemption will be subject to prior FINMA approval and no Solvency event occurring [ ]% per annum until the First Call Date, payable annually in arrear. Thereafter, reset every 5 years at the Fixed Rate of Interest (5yr MS +initial margin) payable annually in arrear Optional deferral subject to a 6-month pusher on payment on or redemption of share capital or junior or parity securities made by the Issuer or the Guarantor Mandatory deferral if (i) Issuer or the Guarantor does not have appropriate funds to cover the minimum required solvency margin, (ii) Issuer is unable to pay its senior debt as they fall due, (iii) assets of the issue do not exceed liabilities, or (iv) upon FINMA request to the Issuer or the Guarantor (all constituting a Solvency Event ) Deferred interest is cumulative, paid at the earlier of (i) Compulsory Interest Payment Event (ii) redemption of the Bonds (iii) liquidation or winding-up of the Issuer (iv) the next Optional Interest Payment Date At par upon a Tax, Accounting, Rating Agency or Regulatory Event at par, subject to prior FINMA approval and no Solvency Event occurring Scheduled maturity date on [ ] 2048, callable on [ ] 2028 ("the First Call Date") and on any interest payment date thereafter Redemption will be subject to prior FINMA approval and no Solvency event occurring [ ]% per annum until the First Call Date, payable annually in arrear. Thereafter, reset every 5 years at the Fixed Rate of Interest (5yr MS +initial margin) payable annually in arrear Optional deferral subject to a 6-month pusher on payment on or redemption of share capital or junior or parity securities made by the Issuer or the Guarantor Mandatory deferral if (i) Issuer or the Guarantor does not have appropriate funds to cover the minimum required solvency margin, (ii) Issuer is unable to pay its senior debt as they fall due, (iii) assets of the issue do not exceed liabilities, or (iv) upon FINMA request to the Issuer or the Guarantor (all constituting a Solvency Event ) Deferred interest is cumulative, paid at the earlier of (i) Compulsory Interest Payment Event (ii) redemption of the Bonds (iii) liquidation or winding-up of the Issuer (iv) the next Optional Interest Payment Date Upon a Tax, Rating Agency or Regulatory Event at par, subject to prior FINMA approval and no Solvency Event occurring Denominations CHF 5k + 5k CHF 5k + 5k Listing SIX Swiss Exchange SIX Swiss Exchange Governing Law Swiss Law Swiss Law 1. S&P moved Baloise Group's rated entities onto positive outlook on 1 st September 2017 Please refer to the preliminary offering memorandum dated 6 th September 2017 for the full terms and conditions as well as further information 42

43 Structural Comparison of Proposed Offering Issuer Baloise Life Ltd Baloise Life Ltd Helvetia Schweizerische Vers. AG Helvetia Schweizerische Vers. AG Helvetia Schweizerische Vers. AG Guarantor Baloise Holding Ltd Baloise Holding Ltd Helvetia Holding AG Helvetia Holding AG Helvetia Holding AG Swiss Life Holding AG Swiss Life AG Swiss Life AG Zurich Insurance Company Ltd Swiss Life Holding AG Issue Date [ ] [ ] 2-Sep Oct Oct Mar Mar Mar-2016 Amount CHF [ ]m CHF [ ]m CHF 300m CHF 400m CHF 225m CHF 150m CHF 450m CHF 225m Issue ratings (M/S) [NR/BBB+ 1 ] [NR/BBB+ 1 ] NR / BBB+ NR / BBB+ NR / BBB+ NR / BBB+ NR / BBB+ A3 / A Tenor PerpNC NC10.75 PerpNC7 PerpNC5.5 30NC NC10.5 PerpNC5.5 PerpNC5 Coupon rate Optional deferral [ ]% until FCD, reset every 5y (5y swap + [ ]bps) thereafter At Issuer's discretion subject to dividend pusher (6m lookback) Mandatory deferral Upon Solvency Event 2 [ ]% until FCD, reset every 5y (5y swap + [ ]bps) thereafter At Issuer's discretion subject to dividend pusher (6m lookback) Upon Solvency Event % until FCD, reset every 5y (5y swap bps) thereafter At Issuer's discretion subject to dividend pusher (6m lookback) Upon Solvency Event % until FCD, reset every 5y (5y swap bps) thereafter At Issuer's discretion subject to dividend pusher (6m lookback) Upon Solvency Event % until FCD, reset every 5y (5y swap bps) thereafter At Issuer s discretion subject to dividend pusher (6m lookback) Upon Solvency Event % until FCD, reset every 5y (5y swap bps) thereafter At Issuer s discretion subject to dividend pusher (6m lookback) Upon Solvency Event % until FCD, reset every 5y (5y swap bps) thereafter At Issuer s discretion subject to dividend pusher (6m lookback) Upon Solvency Event 2 na 2.75% until FCD, reset every 5y (5y swap+332.2bps) thereafter At Issuer s discretion subject to dividend pusher (6m lookback) Upon Solvency Event 2 Deferred interest Cumulative 3 Cumulative 3 Cumulative 3 Cumulative 3 Cumulative 3 Cumulative 3 Cumulative 3 Cumulative 3 Early redemption At par upon Accounting, Capital, Regulatory or Tax Event At par upon Regulatory, Tax, Rating Agency Event At par upon Accounting, Capital, Regulatory or Tax Event At par upon Accounting, Capital, Regulatory or Tax Event At par upon Regulatory, Tax, Rating Agency Event At par upon Accounting, Regulatory, Tax, or Rating Agency Event At par upon Accounting, Regulatory, Tax, or Rating Agency Event At par upon Accounting, Capital, Regulatory or Tax Event Ranking Subordinated Subordinated Subordinated Subordinated Subordinated Subordinated Subordinated Subordinated Denomination CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k CHF 5k + 5k 1. S&P moved Baloise Group's rated entities onto positive outlook on 1 st September Solvency Event means (i) issuer does not have appropriate funds to cover required minimum solvency margin, (ii) issuer is unable to pay its senior debt, (iii) assets < (senior) liabilities, or (iv) upon FINMA request. For Zurich, additional, auditor's cannot give a confirmation pursuant to Article 725(2) of the Swiss Code of Obligations 3. Must be paid upon the earlier of (i) resumption of any discretionary distribution, (ii) repurchase or redemption of any share capital, junior or parity securities (iii) redemption or (iv) liquidation or winding up. 43

44 7. Appendix

45 Outstanding Bonds Overview Type ISIN Issuer Nominal Value [CHF mn Coupon Term Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG % Senior CH Bâloise Holding AG %

46 Investment Performance (Insurance), not annualised Current investment yield Net capital gains and losses 1.2% 0.3% Investment management costs Net investment yield Unrealised gains and losses -0.4% 1.4% -0.1% Non-Life: 1.3% Life: 1.4% Investment performance 1.0% 46

47 Split of Assets and Insurance Asset Allocation Split of total assets Insurance asset allocation In CHF mn FY 2016 Insurance assets 55,173 57,104 Non-life 9,167 9,805 Life 46,006 47,299 Banking assets 8,121 8,091 FY % 57.3% 10.8% 7.7% 11.6% 7.6% 2.4% 12.3% 7.3% 2.1% 2.2% 12.4% 6.4% Other and elimination % Group assets 62,892 64,764 Investment-linked life insurance Asset management for third parties 12,337 13,334 4,938 5,056 Total assets 80,168 83,153 Other short-term investments Alternative financial investments Shares & funds Investment property Mortgage loans Policy & other loans Fixed-interest securities 1) 1) : incl. direct investments in senior secured loans 47

48 Insurance Assets: Fixed-Interest Securities (1/3) 57.3% 57,104 Investments in fixed-interest securities in CHF mn Fixed-interest securities 31,367 Senior secured loans 1,326 Total investments 32,693 By quality and ordination excl. senior secured loans AAA AA 37% 35% Currency exposure excl. senior secured loans Other USD EUR Non-life 0% 14% 61% CHF 25% 0% 0% Not rated 10% <BBB BBB 17% A 15% Covered Life 10% 45% 45% 60% 25% Senior 0% Total 0% 10% 48% FX-risk mainly hedged 42% Sovereign & public debt Subordinated 48

49 Insurance Assets: Fixed-Interest Securities (2/3) 57.3% 57,104 Issuers of fixed-interest securities excl. senior secured loans Sovereign & public debt Financials Corporates 60% 21% 19% Switzerland By country By rating By ordination By ordination Sub- Germany ordinated 33% 10% 13% Belgium AAA 38% Senior 29% 0.3% USA RoW Central Eastern Europe 0% 8% France 7% 6% 2% 10% Netherlands 10% Other core EU Supranational 0% 0% 5% Not rated 6% < BBB BBB A 51% AA Covered 69% 2% Subordinated 99.7% Senior 49

50 Duration: Fixed-Interest Securities (3/3) 57.3% 57,104 Duration of bonds and promissory notes excl. senior secured loans Duration by classification FY 2016 Years in % Years in % Duration bonds available-for-sale (AFS) % % Duration bonds held-to-maturity (HTM) % % Duration promissory notes % % Duration portfolio % % Duration by line of business FY 2016 Years in % Years in % Duration life bonds (incl. promissory notes) % % Duration non-life bonds (incl. promissory notes) % % Duration portfolio % % 50

51 Insurance Assets: Policy Loans, Mortgages, Investment Property 11.6% 7.6% 12.4% 57,104 Policy & other loans In CHF mn Investment property In CHF mn Total investments 6,646 Total investments 7,071 By country By type Mortgages In CHF mn Germany 8% Belux 8% Commercial 32% Total investments 4,326 68% 0% Other 84% Residential Switzerland 51

52 Insurance Assets: Shares & Funds 6.4% 57,104 Shares & funds in CHF mn Regional exposure CH 38% Total investments 3,637 IFRS equity exposure Equities 4.7% Other equity classified assets 1) 1.7% Shares & funds 6.4% EU 35% 1% Other 26% Funds Equity funds Private equity 1.1% 7% Hedge funds (equity related) 0.3% Equity derivatives 2) -1.9% Real estate funds 48% 46% Other funds IFRS equity exposure 5.9% 1) e.g. bond & property funds treated as equity under IFRS 2) incl. puts and calls 52

53 Insurance Assets: Alternative Financial Investments 2.2% 57,104 Hedge funds in CHF mn Private equity in CHF mn Total investments 620 Total investments 659 By style By type By region Misc. / Cash 13% Managed futures 5% Global macro 19% 19% Equity hedged 22% 22% Relative value Venture capital Misc. 13% 17% 70% Buyout RoW 19% 37% USA EU 44% Event driven 53

54 Cautionary Statement Regarding Forward-Looking Information This presentation was produced by Bâloise Holding AG and/or its affiliates (hereafter "Baloise") with the greatest of care and to the best of its knowledge based on information available for Baloise in Switzerland on the day of its first publication. If nothing is indicated to the contrary, all figures are not audited. This presentation contains forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and Baloise might not be able to achieve the predictions, forecasts, projections and other outcomes Baloise describes or implies in this presentation. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intensions Baloise expresses in this presentation. However, neither Baloise nor any of its members of the board, directors, officers, employees, advisors or any other person make any representation or warranty as to the accuracy or completeness of the information contained in this presentation. Neither Baloise nor any of its members of the board, directors, officers, employees, advisors or any other person accept any liability for direct or indirect losses which might arise from making use of the information of this presentation. This presentation does not constitute an offer or a recommendation to subscribe for or purchase any shares or other securities of Baloise and does not release the recipient from exercising his/her own judgment, if necessary with the help of a professional advisor. Furthermore, Baloise does not intend to update these forward-looking statements except as may be required by applicable law. This document may not be copied, reproduced, altered, offered, sold or otherwise distributed to any other person either in part or in full without the prior written consent of Baloise. Copyright 2017 Bâloise Holding AG. All rights reserved. 54