Helvetia Group. Letter to Shareholders Your Swiss insurer.

Transcription

1 Helvetia Group Letter to Shareholders 2012 Your Swiss insurer.

2 Change Key share data Helvetia Holding AG Group profit for the period per share in CHF % Consolidated equity per share in CHF % Price of Helvetia registered shares at the reporting date in CHF % Market capitalisation at the reporting date % Number of shares issued in Group currency Business volume Gross premiums life % Deposits received life % Gross premiums non-life % Assumed reinsurance % Business volume % Key performance figures Result life % Result non-life % Result other activities Group profit for the period after tax % Investment result % of which investment result from Group financial assets and investment property % Key balance sheet figures Consolidated equity (without preferred securities) % Provisions for insurance and investment contracts (net) % Investments % of which Group financial assets and investment property % Ratios Return on equity 1 9.2% 8.6% Reserve to premium ratio non-life 142.0% 132.9% Combined ratio (gross) 91.0% 94.3% Combined ratio (net) 93.5% 95.6% Direct yield 2.8% 2.9% Investment performance 5.5% 3.6% Solvency I 229% 221% Employees Helvetia Group % of which Switzerland % 1 Based on the earnings per share (including interest on preferred securities through profit and loss) divided by the average shareholder capital (equity before preferred securities). Business volume Profit Equity Solvency I in %

3 Increase in profits With CHF million, Helvetia achieved a very pleasing annual result. The capital base of the Group remains strong with a Solvency I ratio of 229%. In light of the operational and strategic successes in the financial year 2012, the Board of Directors will propose to the Shareholders Meeting a dividend of CHF 17.00, which corresponds to a payout ratio of 44%. Profit Solid business portfolio Financial year 2012 The earnings power of Helvetia Group is impressive. Compared to the previous year, the annual result has risen by 18.0%. Helvetia also has a very solid balance sheet. It has continued to cope well with the challenges posed by a difficult market environment and uses its capital strength to continue on the European growth path. We almost maintained the previous year s business volume despite difficult market conditions. The non-life business produced a convincing combined ratio of 93.5% and the life business continued to achieve stable margins between current income and average interest guarantees. Following the weak performance in the previous year, foreign markets also delivered significantly higher results again. Combined ratio Successful acquisitions In 2012, Helvetia was able to finalise several acquisitions. As a result of the transport portfolio acquired from Groupama, Helvetia will be able to move up to a powerful number 2 in the transport market in France. The sales agreement with Banco di Desio in Italy was extended by ten years; non-life business was added and extended to additional partner banks. The acquisition of SEV Versicherungen in our domestic market has strengthened the individual life business and has allowed access to a new customer segment. Strong investment performance With a 2.8% yield, Helvetia s investment portfolio continued to generate stable current income despite the continuing impact of low interest rates. New money could be invested at a satisfying 2.6%, while taking into account the proven diversification and risk structure of the portfolio. Thanks to positive market developments, the total investment performance is significantly higher than in the previous year and higher than 5% for the first time in several years. Content Letter to Shareholders 4 Business development Group result 6 Business activities 8 Investments 9 Investor information 11 Consolidated income statement 14 Consolidated balance sheet 15 Helvetia Letter to Shareholders

4 Letter to Shareholders Erich Walser Chairman of the Board of Directors Stefan Loacker Chief Executive Officer Ladies and Gentlemen We are pleased that we can report to you on another year with a solid business result. Helvetia s profit for the year of CHF million was 18.0% higher in 2012 than in the previous year. Given the sustained challenging European market environment, this is an encouraging performance that reflects our company s positive portfolio quality and solid business performance. At CHF 7.0 billion, premium volume remained close to the level of the previous year. The non-life business had an impressive perform ance with excellent earnings power and the life business continued to generate stable margins between current income and average interest guarantees even in the current low interest rate environment. Alongside the Swiss home market, which is as strong as ever, our foreign markets also delivered markedly better results compared to the pre vious year. In particular, after losses in the previous year, the German country market was yet again set on a successful course, thanks to the consistent implementation of profit-enhancing measures. In the investment business, the high quality of our securities, the systematic diversification of the portfolio and the targeted hedging policy have paid off once again. Supported by the positive market performance in the second half of the year, our Group was able to generate very good investment results, which at CHF 1,177.8 million were significantly above the previous year s results. At the same time, the valuation reserve on our investments rose still further, consequently increasing our capital base. This strong capital base is reflected directly in the strong Solvency I ratio of 229%. Helvetia is also able to show a comfortable capital position under the Swiss Solvency 4 Helvetia Letter to Shareholders 2.12

5 Letter to Shareholders Test, the new Swiss solvency regime. Due to the naturally high volatility of this figure, however, coverage is subject to greater fluctuation. Helvetia s Group SST ratio lies within a range of a very solid 150% and 200%. Based on this positive overall development, the Shareholders Meeting will be asked to approve a resolution for a dividend of CHF per share, higher than for the previous year. Thanks to a payout ratio of 44%, you, as shareholders of our company, will thus directly benefit from the positive course of the company s business. Our Group made progress in the past year strategically as well. In France, Helvetia moved up to a powerful number two in the transport insurance market as a result of the portfolio acquired from Groupama Transport. The existing distribution agreement with Banco di Desio in Italy was extended by ten years and expanded to the non-life business. The interest in Chiara Vita was increased from 70% to 100% and a majority interest of 51% was acquired in Chiara Assicurazioni. In Switzerland, the acquisition of SEV Versicherungen Genossenschaft made the individual life business stronger and also opened up access to a new customer segment. With these additional acquisitions, Helvetia underlines the commitment to its growth path and the conviction that it will be able to continue to operate profitably in the long run in its existing markets. Added value, customer satisfaction and profitability are central components of the success of any listed company. The special character of the insurance business lies in the fact that our added value is based at the same time on the basic principle of solidarity. This balance between customer solidarity on the one hand and shareholder profits on the other may sometimes be perceived as an area of tension. We at Helvetia attach great importance to taking full social responsibility and to remaining successful in the long run by striking an appropriate balance. With this in mind, we would like to once again take the opportunity to express our gratitude to all of our customers, employees and shareholders for their trust and support. Erich Walser Chairman of the Board of Directors Stefan Loacker Chief Executive Officer Helvetia Letter to Shareholders

6 Business development Group result Business development Helvetia Group is pleased to present a solid performance report for the financial year Foreign markets once again made higher contributions and, thanks to these, profits increased by a strong 18.0%; financial investments delivered solid results; and business volume proved to be robust at some CHF 7.0 billion. Profit development Group result At CHF million, Helvetia s annual result improved markedly by 18.0%. In a difficult market environment, where Spain and then Italy slipped into a recession, all units delivered solid contributions. In particular the foreign markets showed significantly higher results again. Thanks to a very positive net combined ratio of 93.5%, improved compared to the previous year, the non-life business was able to increase by 33.4% to CHF million. The marked increase in earnings gained additional momentum through the financial markets, which also had a positive effect in the life insurance sector and allowed for an increase in the share of profit participation. However, low interest rates required additional increases in life insurance reserves. Thus, reported life earnings of CHF million were 10.1% lower than in the previous year. The marked improvement in earnings under «Other activities» is attributable, in addition to the better technical performance in the reinsurance business, primarily to the absence of negative foreign currency effects on the investment funds. Supported by good results and driven by the increase in unrealised profits, equity also rose by 11.5% and increased the Solvency I ratio to 229%. With this financial strength, Helvetia is well equipped to continue to cope with the ongoing difficult market environment and stay on its European growth path. Solid development of the business portfolio At CHF 6,978.5 million, the business decreased only slightly thanks to good diversification even in the midst of the prevailing economic and financial uncertainty. Performance, however, was mixed depending on the business line. This decrease is attributable to the life business, the volume of which is 3.1% below that of the previous year. This is largely attributable to the deliberate reduction in new business in the Swiss group life business and substantially lower volumes of deposits from investment contracts in Italy due to market conditions. On the other hand, the substantially higher premium volumes in the individual life business had a compensating effect. The two-digit growth rates in capital-efficient index- and unit-linked products are particularly pleasing. In the non-life business, on the other hand, premiums increased overall despite declining demand in the recessionary markets of Italy and Spain. Due to the planned onward sale of part of Business volume Growth % in original currency (OC) Gross premiums life Deposits received life Gross premiums non-life Business volume for direct insurance Assumed reinsurance Business volume Helvetia Letter to Shareholders 2.12

7 Business development Group result the accident and health insurance business portfolio arising from the acquisition of Alba and Phenix, which did not fit in our strategy, this was the only business line that had negative growth rates. Motor vehicle insurance rose by 2.4% despite the recession and portfolio cleansing in certain markets, while the second largest business line, property insurance, increased by 1.4%, liability insurance by 1.0% and transport insurance by 11.7%. In assumed reinsurance, which pursues an exclusively income-oriented policy, we reported a selective decline of 2.5%. Compared to 2011, which was characterised by strong growth in the non-life business due to the acquired companies Alba and Phenix, reported growth in the reporting year was primarily due to organic growth. Gan Eurocourtage, the transport portfolio acquired in France towards the end of the reporting year, was only reflected in the non-life growth to a negligible extent. This acquisition, together with the majority interest acquired in Italy s Chiara Assicurazioni at the end of 2012, will also be noticeable at Group level in The effect of SEV Versicherungen acquired in Switzerland on the overall growth of the life business is also marginal. However, it improved the Swiss regular individual life business in financial year 2012 by 2.4% and, due to access to a new customer segment, opens up future potential for growth. Good operating performance In the life business, Helvetia Group saw a profit of CHF million. This solid result is due to healthy risk results and a solid investment result, where margins between current income and average interest guarantees remained solid. Although the continuous low interest rate phase required additional increases in the technical reserves, the contribution to the Group result of the life business is only about 10% lower than in the previous year. The non-life business, on the other hand, increased thanks to the continued decrease in the combined ratio by 2.1% to a very encouraging 93.5% its profit by 33.4% to CHF million. While in the home market Switzerland the combined ratio, which was excellent in the previous year, improved again by 1% to 85.0%, our important German non-life business stabilised again following the high level of claims in the previous year. With a significantly improved combined ratio of 97.8%, the country market Germany once again shows a solid technical result thanks to the measures that were intro- duced promptly to enhance profitability. Reinsurance, which comes under Other activities, also contributed to the improvement of the overall result, thanks to a better technical performance. Helvetia Group s investment result taken to profit or loss rose by almost CHF 300 million to CHF 1,177.8 million. The direct yield on the investment portfolio continued to be stable with slightly increased current income despite the effect of low interest rates and dropped only slightly compared to the previous year to 2.8%. At 5.5%, the overall investment performance achieved was significantly better than in the previous year and is attributable particularly to the positive market developments in the second half of the year. Strong capital position Equity without preferred securities increased by 12.5% compared to the previous year to CHF 3,800.3 million. This was possible, with attractive dividend payments in the previous year, on the one hand thanks to the improved annual result and on the other hand due to the strong increase in unrealised investment gains in equity. These benefitted in particular from the interest rate developments and the strong demand for high-quality bonds. Accordingly, the Solvency I ratio of 229% is also higher than the previous year s already high level. The strong capitalisation is also reflected in the renewed confirmation in the fourth quarter of the A rating by Standard & Poor s. Thanks to the increased earnings power, return on equity rose from 8.6% to 9.2% despite the increase in equity. It is thus only just below the medium-term target range of 10 12%. Profit by business area Life Non-life Other activities Group profit The robust capital position was further solidified in the reporting year. Helvetia Letter to Shareholders

8 Business development Business activities The operating business areas showed a solid performance in Business activities Life business affected by low interest rates The growth in the life insurance business in 2012 was shaped by the effects of the financial crisis, in part as a result of shifts in demand and in part as a result of strategic decisions. In the Swiss market, in addition to a strong increase of 11.4% in the individual life business and 14.5% in the unit-linked business, there was an 8.9% decline in the group life business; this is attributable to the deliberate show-down in acquiring new employee benefits business due to the low interest rates. Accordingly, a net decline of only 3.8% was reported for Switzerland. Italy, as the second most important life market for Helvetia, achieved a growth of 23.1% in the traditional individual business. By contrast, demand for deposits from investment contracts fell by 41.4% as a result of uncertain market conditions. Germany had still benefitted from strong single premium products in 2011 but this no longer appeared to be the case in 2012: there was a 4.1% decline despite the continued positively performing unitlinked products. In Spain, funeral expenses insurance continued to grow and unit-linked volume increased significantly. However, this did not completely compensate for the decline in traditional life insurance driven by economic factors and resulted in a total decline of 1.7%. Austria increased its volume by 10.4% a significantly higher figure than general market growth particularly through substantially higher sales of unit-linked products. The life business continues to put in a robust performance, which is reflected in the embedded value. At CHF 2,647.5 million, this is significantly higher than in the previous year and generated a return of 16.2% (previous year: 2.8%), driven by positive economic variations. Non-life business impresses With a profit increase of over 33.4% to CHF million and 0.7% premium growth, non-life business was convincing, in spite of declining premium income on the Italian and Spanish markets, which were particularly affected by the recession. On the home market in Switzerland the accident and health business acquired as a result of the acquisition of the Alba and Phenix portfolio was sold on, as strategically planned, during the reporting year. This decline was almost completely compensated for by strong organic growth of about 3%. Thus, only a 0.8% decline in total will be reported for Switzerland. There was strong growth in Germany of 7.7% and Austria impressed with a 2.3% increase. France also performed very well with largely organic growth of 13.7%. Thanks to our high portfolio quality and a low amount of large claims and bad weather-related claims, the claims experience was positive at Group level, although the Italian and Austrian markets were affected by quite large natural events during the reporting year. Overall, the claims ratio improved by 2.3 percentage points to a good 64.8%. The decrease in the cost ratio that was achieved at Group level in the previous year, thanks to tight cost management, was at the same level in the reporting Business volume life Growth % 2012 in OC Switzerland Germany Italy Spain Austria Business volume non-life Growth % 2012 in OC Switzerland Germany Italy Spain Austria France Total Total Helvetia Letter to Shareholders 2.12

9 Business development Investments Combined ratio in % Group direct CH DE IT ES AT FR Net claims ratio 2012 Net claims ratio 2011 Net cost ratio 2012 Net cost ratio year at 28.7%. Overall, this resulted in a very positive combined ratio of 93.5% (previous year: 95.6%). Lower currency effects under Other activities The Other activities business area also comprises, in addition to Helvetia holding- and the financing companies, the Corporate Centre, the Group s investment funds and the reinsurance business. The increase in income in this area to CHF 22.1 million is attributable, in addition to better technical performance in the reinsurance business, primarily to the lack of the negative foreign currency effects on the investment funds that was reported in Investments In the past year, investment markets had a much more positive performance than expected in view of the unresolved debt crisis in Europe, the lacklustre economy and the sluggish reactions of politicians. Economic and political risks, however, were present everywhere and had an impact on market developments: after a strong start in the first quarter, the crisis following the elections in Greece and the growing problems of the Spanish banks threatened to escalate during the summer. Stock markets largely gave up the gains made in the first half of the year and the spreads on the bonds of European peripheral states rose rapidly. The situation became stable only when the European Central Bank announced that it would buy government bonds, even to an unlimited extent if necessary, in order to save the euro. This announcement is likely to have been the driving force behind the positive market developments in the last quarter. Real-time risk management The continuing uncertainty posed great challenges for risk management throughout the entire year. Our measures were focused on hedging of equity and foreign currency exposures and the monitoring of counterparty risks, in particular in the investment portfolios of our Italian and Spanish companies that were exposed to the bonds of their governments to cover business liabilities. The exposure to Spanish government bonds was further reduced to the volumes that were commercially necessary. This leaves us with about CHF 900 million Italian and CHF 180 million Spanish government bonds. Investment in other European peripheral states was practically reduced to nil. Our bond portfolio maintained its high quality in spite of extensive downgrading waves by rating agencies. As a result of the downgrading of the Republic of Italy, the portion of bonds with an A rating decreased slightly. Nevertheless, 90% of the bonds in the portfolio have an A rating and 78% have an AA rating or higher. The high quality of our portfolio is reflected in our equity as well. In 2012, unrealised market gains rose by CHF million to CHF 1,349.1 million, with interest-bearing securities making the biggest contribution by far to this result. Equities and foreign currencies remained hedged to a large degree with put options and The hedging of equity and foreign currency exposures and the monitoring of counterparty risks were the main focus of investment management in the reporting year. Helvetia Letter to Shareholders

10 Business development Investments All asset classes equities, bonds, mortgages and real estate contributed significantly to the strong result. futures. In comparison over several years, however, the hedge ratio of the EUR declined somewhat since the Swiss National Bank consistently enforced the exchange rate target of CHF 1.20 per EUR. Attractive performance With our prudent investment policy, we were able to benefit from the favourable market developments in the fourth quarter and attain investment performance for Helvetia Group, including unrealised gains, in the amount of CHF 1,857.6 million. The performance of the portfolio reached a strong 5.5%, which is significantly higher than in the previous year. Despite marked ly lower market interest rates, the direct yield of 2.8% represented a drop of only 0.1% compared to the previous year. This stability is in particular a result of the long duration of our bonds and the stable return on our real estate portfolio. Despite the low interest rate environment, it was possible to invest or reinvest money very well in 2012 with an average interest rate of 2.6%. We will continue with our tried-and-tested investment policy and proven risk management in the current financial year. Investment structure 2012 Units in % Bonds % Shares % Investment funds, alternative investments, derivatives % Mortgages % Loans % Investment property % Money market instruments, associates % Unit-linked investments % Total Investments % Performance of Group investments '011 Current income from Group financial assets Rental income from Group investment property Current income from Group investments (net) Gains and losses on Group financial assets Gains and losses on Group investment property Gains and losses on Group investments (net) Investment result from Group financial assets and investment property (net) Change in unrealised gains and losses recognised in equity Total profit from Group financial assets and investment property Average investment portfolio Direct yield 2.8% 2.9% Investment performance 5.5% 3.6% 10 Helvetia Letter to Shareholders 2.12

11 Investor information Investor information Helvetia shares performed extremely well despite difficult market conditions, trading at the end of 2012 at CHF , just below the high for the year. With a gain of 17.5%, or 23.8% including dividends, the shares held up well against the market. The debt crisis, fears of recession and the central banks determined low-interest and liquidity policies were the major features affecting stock market activity in The first quarter was buoyant with corresponding performance figures. This was of particular benefit to financial stocks. Fears about the euro then flared up again briefly in April, after which a mood of crisis took the upper hand. Most of the stock markets then had to give up the initial gains they had made and entered negative territory. Upon the announcement by the European Central Bank in the third quarter that it was ready to do whatever it took to preserve the euro, shares rocketed back. Not even an economic slowdown in China, geopolitical tensions and discussions related to the fiscal cliff in the US succeeded in slowing down the upward trend. By year-end many markets hit highs they had not seen for several years. The Swiss Market Index (SMI) closed with a gain of 14.9%. Insurance stocks also benefited from these market conditions. The European insurance index gained 34.1% and the Swiss one 23.0%. After a good start in the first quarter, Helvetia shares followed the markets down, hitting a low of CHF by mid-year. Following a strong year-end rally, Helvetia outperformed the Swiss market as a whole, gaining 17.5%. However, it somewhat underperformed industry-specific benchmarks. Helvetia share symbol HELN nominal value CHF 0.10 security number listing SIX Market trend in CHF Dividend payment CHF Dividend payment CHF Dividend payment CHF /09 04/10 08/10 12/10 04/11 08/11 12/11 04/12 08/12 12/12 02/13 Helvetia Holding AG DJ EuroStoxx Insurance Index SPI Swiss Insurance Index Helvetia Letter to Shareholders

12 Investor information Our strong balance sheet and improved consolidated profit allow us to propose an increased CHF per share dividend to the Shareholders Meeting. Stable shareholder base Compared to the end of 2011 there was no significant change in the core shareholder base. As of 31 December 2012, the following important shareholders were registered in the share register of Helvetia Holding AG: Shareholder base as of 31 December 2012 Patria Genossenschaft 30.1% Vontobel Group 4.0% Raiffeisen Switzerland 4.0% There were 9,512 registered shareholders on 31 December At the end of 2012, the employees held 1.5% of the share capital, around 0.1% of which was held by the members of the Board of Directors and Executive Management of the Helvetia Group. The majority of registered shareholders are based in Switzerland. Of the institutional shareholders excluding the above core shareholders 68.5% have their registered office in Switzerland (previous year: 60.6%) and 31.5% are based abroad (previous year: 39.4%). Shares pending registration rose slightly year-onyear, ending the year at 20.6%. The free float is unchanged at 61.9%. An annual average of 12,400 shares were traded per trading day. With a drop of some 8% compared to the trading volume on the Swiss Exchange, the volume of Helvetia shares held up well against the market. The structure of the types of investors excluding the above core shareholders has barely changed since the previous year. The structure as of 31 December 2012 was as follows: Successful Shareholders Meeting 2012 The Helvetia Group once again presented a good annual result to the 1,497 shareholders with voting rights in attending the Shareholders Meeting. The Shareholders Meeting took note of the strong operating performance in challenging market conditions and approved the annual report, financial statements and consolidated financial statements for The terms of office of members of the Board of Directors Hans-Jürg Bernet, John Martin Manser and Pierin Vincenz expired and they were reappointed for a further term in office of three years. Increase in the dividend Helvetia strives to generate an attractive return on invested capital for its shareholders and pursues an income-oriented, continuous distribution policy that allows the company to maintain its solid capital base. Despite the challenges associated with on-going low interest rates and difficult economic conditions, Helvetia achieved a good result for The Group s capital base also continues to be solid with a Solvency I figure of 229%. Our strong balance sheet and improved profitability allow the Board of Directors to propose an increase of around 6% in the dividend to the Shareholders Meeting. This is equivalent to a dividend of CHF per share. Half of each of the last two dividends was distributed from capital contribution reserves arising from share premiums paid in by shareholders. This year the Dividend history in CHF 5.9% 5.4% 4.5% 4.5% % Investor groups (excluding core shareholder base) * in % Private individuals 25.8 Banks and insurance 13.4 Other institutional investors 60.8 Payout ratio * / 51% 39% 41% 49% 44% Dividend per share Dividend yield at year-end price Proposal to the Shareholder s Meeting 12 Helvetia Letter to Shareholders 2.12

13 Investor information Shareholders Meeting will be asked to vote on a proposal to use the remaining contribution reserves in the amount CHF 122 million for the forthcoming dividend distribution. This means that no withholding or income tax will be payable on CHF of the dividend payment per share for private persons domiciled in Switzerland. Bonds in circulation The Helvetia Group placed two bonds on the Swiss capital market in Helvetia Holding has a bond with a face value of CHF 150 million and a coupon of 1.75% in circulation, which falls due for redemption in financial year In addition, there is a CHF 300 million subordinated perpetual bond issued by Helvetia Schweizerische Versicherungsgesellschaft in circulation, which pays annual interest of 4.75% for the first five years. The first termination date on which Helvetia has the right, but not the duty, to redeem the bond is 30 November Further information on our bonds can be downloaded from our website under Investor Relations / Debt information. Active capital market communication Helvetia communicates with shareholders, potential investors, financial analysts and the general public comprehensively and on a regular basis. We communicate financial results at analysts, media and telephone conferences. All publications are made publicly available at the same time. We engage in regular dialogue with our investors and visit them in the most important financial centres. In the reporting year, our road shows took us to Zurich, Frankfurt, London, Edinburgh, Dublin, Geneva and Scandinavia. In addition, we hold group and individual discussions with investors and take part in selected conferences hosted by financial institutions. All registered shareholders receive a shareholders letter with a brief overview of business operations every six months. The annual report and financial report are sent to shareholders on request. All publications and a wealth of information for shareholders, analysts and media representatives are available in the Investor Relations section at In financial year 2013, a bond of CHF 150 million will be due for redemption. Key share data Helvetia Holding AG Number of shares issued Treasury shares Shares outstanding Number of shares issued Price of Helvetia registered shares in CHF Year-end High for the year Low for the year Market capitalisation Consolidated equity per share in CHF Price- / book ratio (P / B) Profit for the period per share in CHF Price / earnings ratio (P / E) Dividend per share Payout ratio 2 44% 49% Dividend yield 1, 2 4.9% 5.4% 1 Based on year-end price 2 Proposal to the Shareholder s meeting Helvetia Letter to Shareholders

14 Financial information Consolidated income statement restated Income Gross premiums written Reinsurance premiums ceded Net premiums written Net change in unearned premium reserve Net earned premiums Current income from Group investments (net) Gains and losses on Group investments (net) Income from unit-linked investments Share of profit or loss of associates Other income Total operating income Expenses Claims incurred including claims handling costs (non-life) Claims and benefits paid (life) Change in actuarial reserves Reinsurers share of benefits and claims Policyholder dividends and bonuses Net insurance benefits and claims Acquisition costs Reinsurer s share of acquisition costs Operating and administrative expenses Interest payable Other expenses Total operating expenses Profit or loss from operating activities Financing costs Profit or loss before tax Income taxes Profit or loss for the period Attributable to: Shareholders of Helvetia Holding AG Minority interests Earnings per share: Basic earnings per share (in CHF) Diluted earnings per share (in CHF) Helvetia Letter to Shareholders 2.12

15 Financial information Consolidated balance sheet adjusted Assets Property and equipment Goodwill and other intangible assets Investments in associates Investment property Group financial assets Investments for unit-linked contracts Receivables from insurance business Deferred acquisition costs Reinsurance assets Deferred tax assets Current income tax assets Other assets Accrued investment income Cash and cash equivalents Total assets Liabilities and equity Equity of Helvetia Holding AG shareholders Minority interests Equity (without preferred securities) Preferred securities Total equity Actuarial reserves (gross) Provision for future policyholder participation Loss reserves (gross) Unearned premium reserve (gross) Financial liabilities from financing activities Financial liabilities from insurance business Other financial liabilities Liabilities from insurance business Non-actuarial provisions Employee benefit obligations Deferred tax liabilities Current income tax liabilities Other liabilities and accruals Total liabilities Total liabilities and equity Helvetia Letter to Shareholders

16 Important dates 19 April 2013 Ordinary Shareholders Meeting in St Gallen 2 September 2013 Publication of half-year financial results for March 2014 Publication of financial results 2013 Cautionary note regarding forward-looking information This document is made by Helvetia Group and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Group. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and 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 by Helvetia Group as being accurate. Neither Helvetia Group nor any of its direct ors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein 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 make 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 risks exist that predictions, forecasts, projections and other outcomes described or implied in forwardlooking 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 factors 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 claim events; (8) the mortality and morbidity experience; (9) policy renewal and lapse rates. We caution you that the foregoing list of important factors is not exclusive; 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 posting and Helvetia Group assumes no obligation to update such statements unless otherwise required by applicable law. The purpose of this document is to inform Helvetia Group s shareholders and the public of Helvetia Group s business activities for the year ended 31 December This document does not constitute an offer or a solicitation to exchange, buy or subscribe for securities and it does not constitute an offering circular within the meaning of Art. 652a of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of SIX Swiss Exchange. Should Helvetia Group make in the future one or more capital increases, investors should make their decision to buy or to subscribe for new shares or other securities solely based on the relevant offering circular. This document is also available in German and French. The German version is binding. Contacts Investor Relations Helvetia Group P.O. Box, CH St Gallen Phone Fax Share register Doris Oberhänsli P.O. Box, CH St Gallen Phone Fax doris.oberhaensli@helvetia.ch Solidarity is the best insurance in the world The principle of a functioning society is the same all over the world. It is the social tie that binds a particular human being to their personal individuality, which connects them in a close network. An insurance company s business model is based on this social tie the solidarity of its customers. Having a shared risk pool makes it possible to bear risks together, with many people joining forces via the insurance company to reduce the risk for the individual. In this year s annual report we address this natural balance in solidarity. Helvetia Letter to Shareholders 2.12