Ihre Schweizer Versicherung. Helvetia Group Helvea Swiss Equities Conference 2016 14 January 2016 Photo: Gerry Nitsch, Zurich Pipilotti Rist Aufgeweckter Rosenscheitel, 2014
Who we are Helvetia has a history of over 150 years Helvetia markets generate volume of EUR 531 billion and represent 14.8% of world market. 1) Focused on retail and SME customers More than 4.7 mn clients Business volume of about CHF 7.8 bn Strong position in home market Switzerland Specialty Markets : Engineering, Marine and Art insurance in Switzerland as well as in markets outside of Europe Strong capitalisation A -Rating Focused insurer in selected European markets 1) Source: sigma 4/2015, Swiss Re 2
Our business model With our 3 business lines we have a diversified portfolio mix 1) For the half-year 2015 2) Specialty Markets includes Marine, Engineering and Art as well as Active Reinsurance 3
Our promise To excel in growth, profitability and customer loyalty Top quality supplier and solid Swiss Insurer Benefit for customers Strong service culture: individual, personal, competent High-quality proprietary distribution network supported by renown cooperation partnerships Solid financial position reliable partner for our customers Brand promise: tailor-made, fair and reliable Reliable dividend payer generating attractive returns Benefit for shareholders State of the art risk management together with a sustainable investment policy resulting in low earnings volatility Continuous and sustained growth through a combination of operating in selected markets and a profitable product portfolio Focus on long-term investor relationships and stable core shareholders 4
Our distribution network Helvetia has optimised sales structures focused on country markets Overall focus on customer centricity We focus on the needs of private individuals as well as small- and medium-sized enterprises We consistently centre our product development and sales efforts on the needs of our customers Strong service culture Superior customer satisfaction & loyalty Focused product development Our decentralised and flexible organisation enables us to react quickly to shifts in demand Multi-channeling approach First-class distribution network Our distribution partners Strong tied agents network Successful online distribution channel smile.direct High-quality broker relations Exclusive and renown cooperation partners Strong cross-selling potential (life / non-life) 5
Our shareholder structure We gear our shareholder policy towards long-term investor relationship 4.0% Raiffeisen Switzerland 4.0% Vontobel Group Free float Pool members 30.1% Patria Mutual 61.9% 38.1% Free float 1) by investor type Free float 1) by geography Private individuals Banks and insurers 27.2% 54.9% Other institutional investors Investors based abroad 37.0% 63.0% Swiss investors 17.9% 1) As at 30/09/2015 and without dispo position 6
Active M&A strategy We have been growing organically and via selected acquisitions Switzerland 2010 2012 2014 Italy 2008 2008/12 2013 Austria 2014 France 2009 2012 7
Acquisitions of Nationale Suisse and Baloise AT After the recent acquisitions Helvetia is well positioned Switzerland Europe Specialty Markets Leading Swiss all-lines insurer Improved business mix thanks to doubling non-life business Significant cost synergies New are Credit Life, Accident / Health, the European Travel Insurance and art insurance, additional customer access through smile.direct Welcome strengthening in DE, AT, ES and IT Economies of scale, comparable business mix Cross-selling potential between life insurance and Specialty Lines 1) Top positioned as marine insurer in Switzerland and France, strong foothold in engineering Selective growth potential in Asia and South America Proven global risk diversification of active reinsurance New Helvetia with great value leverage Potential for substantial dividend increases through cost synergies (CHF 105 130 mn) and earnings increase in the non-life business 1) Marine, Engineering and Art 8
Status Integration Integration is on track - all milestones 2015 have been achieved Group-wide rebranding was completed in December 2015 Non-life product portfolios have been integrated in all country markets by end of December 2015 Legal mergers in Switzerland, Austria and Spain have been completed; the German and Italian entities will be merged according to plan in 2016 Synergies are progressing well and might exceed expectations for 2015, integration costs in line with synergies 9
Status of synergy realisation We are well on track to reach our synergy targets Target Total HY 2015 Currently achieved Achievements / Forecast FY 2015 FY 2016 FY 2017 After 2017 Synergies (p.a.) 105 to 130 15 13% 1) 10-20% 30-60% 70-100% recurring (status 2017) Integration costs -160 to -200-27 15% 1) 30-40% 10-20% 0-10% none Financing costs (p.a.) -13-7 50% -13-13 -13 recurring Amortisation of -217-30 14% -59-59 -59 none intangible assets Additional amortisation slightly -304-21 7% -43-37 -32 of bonds to par decreasing 2) Realised synergies as of 30 June 2015 (in CHF million) 15 Non-personnel costs 6 Personnel costs 9 9 As of 30 June 2015, CHF 15 million of synergies have been realised on track to reach target Efficiency gains were realised by: reduction of structural redundancies (by not replacing resigning employees) other cost savings through elimination of redundancies (e.g. in IT, marketing, logistics, corporate) Realised synergies Expected synergies 1) Integration costs amount to CHF 27 million 1) Based on the mean target value; basis half-year 10
Key figures (1/2) Key figures show a sound performance even in a challenging environment After tax profit (in CHF million) Business volume (in CHF million) Our focus Profitable growth 333 364 422 1) 6,979 7,477 7,767 HY 2015: 221 HY 2015: 5,294 2012 2013 2014 2012 2013 2014 Net combined ratio (NL) (in %) 93.7 93.6 93.1 HY 2015: 92.4 Value of new business (L) (in CHF million) 53 HY 2015: 5 29 26 Our focus Strong technical results Profitability and efficiency enhancement 2012 2013 2014 1) Underlying earnings 2012 2013 2014 11
Key figures (2/2) We provide high solvency and attractive shareholder returns Shareholders' equity 1) Solvency I Our focus (in CHF million) (in %) Financial strength 3,750 3,831 4,963 227 218 216 HY 2015: 4,391 HY 2015: 200 2012 2013 2014 Dividend (per share in CHF) 2012 2013 2014 Dividend yield / Payout ratio (in %) 4.9% 3.9% 3.8% Our focus Sustainable dividend policy 17.00 17.50 18.00 46% 43% 44% 2) 2012 2013 2014 2012 2013 2014 1) Excl. preferred securities 2) In percent of underlying earnings 12
Operational development Non-life Due to disciplined underwriting and cost control we achieve good technical results 95.6% 93.7% 93.6% 93.1% 92.4% 8.0 8.4 9.2 9.1 10.1 Disciplined underwriting strategy Selective underwriting of large risks 20.5 20.5 21.0 21.6 19.5 Portfolio optimisation if necessary 67.1 64.8 63.4 62.4 62.8 Combined Ratio < 95% on average 2011 2012 2013 2014 HY 2015 Claims ratio Acquisition cost ratio Administration cost ratio 13
Operational development Life With a good ALM we kept interest margins relatively stable in a challenging environment Switzerland (CHF) Sustainable balance sheet structure due to efficient asset-liability matching with low duration gap Limited long-term liabilities within our Swiss group pension business Individual Life: focus on modern capital light products (investment linked) or interest rate guaranteed by external partner New business with lower interest guarantees In addition: stable risk gains and improved cost margin 1) Not taking into account the effect of the revaluation of bonds at fair value (-0.07% pts) 2) Not taking into account the effect of the revaluation of bonds at fair value (-0.09% pts) 2.62% 2.51% 2.42% 1) 0.72% 0.88% 2.44 % 0.73% 0.67% 1.90% 1.78% 1.75% 2013 2014 HY 2015 Europe (EUR)* 3.32% 3.01% 0.67% 2.34 % 2.80% 2) 0.53% 2.27 % 2013 2014 HY 2015 Margin Average interest rate Helvetia has to generate in order to meet its obligations *Without Belgium 14
Asset allocation The capital market environment is a challenge for insurance companies and we are shifting the asset portfolio to higher-yield investments Current investment portfolio by asset class Trends & changes Declining share of bonds in favour of investment property and mortgages Increasing investment into USD bonds attributable to build-up of BBB corporate portfolio negative yield on CHF bonds Both US corporate and sovereign bonds yield higher than comparable CHF bonds. However, investment in US bonds causes higher hedging costs 15
Helvetia ambition 2010 2015 We are on track to reach our ambition 16
Your Swiss Insurer. Q&A
Contact details Investor Relations Susanne Tengler Head of Investor Relations Helvetia Group Dufourstr. 40 CH 9001 St. Gallen Telephone: +41 (0)58 280 57 79 Email: susanne.tengler@helvetia.ch Philipp Schüpbach Manager Investor Relations Helvetia Group Dufourstr. 40 CH 9001 St. Gallen Telephone: +41 (0)58 280 5923 Email: philipp.schuepbach@helvetia.ch 18