Your Swiss Insurer. Helvetia Group UBS Best of Switzerland Conference Paul Norton, CFO Ermatingen, 15 September 2016
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Who we are Helvetia at a glance Our profile Leading Swiss all-lines insurer (Top 3) with a second main pillar in Europe and in selected niche markets worldwide Active in non-life (property & casualty) and life insurance as well as in Specialty Markets (specialty insurance and reinsurance business) Over 4.7 mn customers focus on SME and private clients; 6,476 employees Our strengths Balanced portfolio mix 1) of life (56%) and non-life (44%) business Geographic diversification (CH / Europe, through Specialty Markets also worldwide) Multi-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 3
We have a long tradition Over 150 years of insurance expertise 1858 start as transport insurer 1870-1970 initially, expansion strategy with small portfolios worldwide From 1990 focussing on 6 European core markets 1996 merger of Helvetia & Patria Creation of Helvetia Patria Holding AG, Listing at SIX Exchange 2006 change of name to Helvetia Holding AG Active M&A Strategy Switzerland Italy Austria France 2010 2012 2014 2008 2008/12 2013 2014 2009 2012 Helvetia has grown profitably on an organic basis and through selected acquisitions to a competitive insurance group 4
One of the most important acquisitions: Nationale Suisse Significant combination benefits Significant scale benefits as a result of excellent fit of businesses major increase in Swiss non-life business volumes Improved diversification of business volumes and earnings Very good cultural and geographical fit facilitates integration Strategically compelling Top 3 all-line insurer in the highly profitable Swiss insurance market Strengthened positions in existing European markets Specialty Markets as niche platform with focus on selective international growth Value enhancing Significant cost synergies and cross-selling potential Improved dividend capacity and better leverage Strong capital position and leverage metrics consistent with S&P ʺAʺ category A value enhancing transaction through reinforcement of existing markets 5
Helvetia is well positioned Europe Profitable and expandable market positions Same customer segments (retail/sme) Additional synergies within the Group Switzerland Top 3 position in stable and profitable home market Solid foundation for Group's further development Specialty Markets Strong positioning in selected niche markets (top 1 CH, top 2 FR) Good international diversification Helvetia has an attractive portfolio to benefit from the future 6
Profit contribution We have ambitious target positionings Target positioning of helvetia 20.20 (illustration) Switzerland Switzerland: Increase in Switzerland s profit contribution through organic growth, innovation and synergies from past acquisitions Objective: Best Swiss insurer Europe Specialty Markets Europe: Further expansion in Europe and increase in profit contribution by focusing on growth, acquisitions, synergy effects and efficiency enhancements Objective: Significantly improved positioning Premium growth Size of circles= premium volumes Organic growth rates (2010-2015) and profit contributions Expected organic growth Specialty Markets: Profitable growth in current selected niche markets with growing contribution to the Group Objective: Further growth as selective niche player The combination of a growing profit contribution of Switzerland and profitable growth opportunities abroad makes Helvetia attractive 7
helvetia 20.20 focuses on the most important trends Insurance market in a state of flux: Dynamic non-life business, repositioning in life business, ongoing market consolidation and new competitors Digitisation as a strong driver: Online and mobile business, smart data, Internet of Things and automation Customer behaviour is changing: Informed, hybrid, interconnected, mobile with more individual demands 8
We build on the opportunities offered by digitisation Online business models Modern customer and partner interaction Easy and convenient access to all services on different channels More open partner structures with inclusion of partners in systems of service design and provision Smart data & analytics Increasing personalisation Services and products tailored to the needs of customers and sales partners as well as pricing, portfolio and exposure management Automation Stronger process automation Highly efficient and fast service provision Helvetia is implementing a comprehensive digitisation strategy 9
We further develop our sales network Multi-channeling approach Omni-channeling 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) Partner Our distribution partners Mobile Own salesforce Online Digitization enables the development from a multi-channel approach to a omni-channel approach 10
helvetia 20.20 makes us fit for the future Fit for the future Modern and digital Customer-centric by combining traditional strengths and new opportunities Agile und efficient Still personal and reliable Sustainable promises to customers Healthy capital base Financial targets Volume: CHF 10 billion Profitability: NL: Net CR < 93% L: NBM > 1% Costs: RoE: 8 11% Dividend: Synergies from acquisitions > CHF 130 million pre-tax Pay-out (5y) > 1 billion Capital: SST-ratio 140 180% S&P rating class A 11
«integrate» is a component of implementation Integration of Nationale Suisse and Basler Austria almost completed Enhanced operational collaboration within Helvetia Group Progressive digital transformation Targeted innovation of business models with new partnerships and corporate venturing Customer benefits: Convenience through multi-access, digital services and personalisation Product value: Use of smart data in non-life as well as modern product concepts in life business Process efficiency: Synergy benefits and further automation of operational structures Following the successful integrations Helvetia improves operational collaboration within the Group with a new corporate structure 12
New Executive Management as of 1 January 2017 General Secretary 1) Christophe Niquille CEO Philipp Gmür Internal Audit 1) Simon Schneider Support functions Human Resources Roland Bentele Corporate Centre Kaspar Hartmann 1) Reports to the Chairman of the Board of Directors Members of the Executive Management Corporate Development N. N. *Philipp Gmür * Ad interim Investments Ralph-Thomas Honegger Finance Paul Norton Actuary Beat Müller IT N. N. *Markus Gemperle Market Areas Non-life Switzerland N. N. *Hermann Sutter Individual Life Switzerland Reto Keller Group Life Switzerland Donald Desax Sales Switzerland Ralph Jeitziner Europe Markus Gemperle Specialty Markets David Ribeaud The new corporate structure strengthens integration of all market areas and support functions 13
New structure boosts strategy implementation Helvetia becomes more agile Clear, integrated organisational structure with well-focused tasks Elimination of unnecessary duplications Group management closer aligned with market developments Helvetia becomes more digital and innovative Strengthening of IT; Corporate Development as the power house Improved know-how transfer to market areas Helvetia becomes more market & customer orientated Large relevant market areas contributing to growth and profit represented in Executive Management Independent Group Actuary in order to optimise coordination between assets, liabilities and finance The new corporate structure ensures the implementation of the strategy in Switzerland, Europe and Specialty Markets in an efficient manner 14
Where we are today (1/2) After tax profit 1) (in CHF million) Business Volume (in CHF million) Our focus Profitable growth 364 422 439 238 7,477 7,767 8,235 5,544 2013 2014 2015 HY 2016 2013 2014 2015 HY 2016 Net combined ratio (NL) (in %) Value of new business (L) (in CHF million) Our focus Strong technical results Profitability and efficiency enhancement 93.6 93.5 92.1 91.9 2013 2014 2015 HY 2016 1) Basis underlying earnings 53 26 23 7 2013 2014 2015 HY 2016 15
Where we are today (2/2) Shareholders equity 1) (in CHF million) 4,963 4,655 4,843 3,831 Solvency (in %, as of 31/12/2015) SST 0% 150-200% 100% 200% Our focus Financial strength 2013 2014 2015 HY 2016 Dividend Dividend yield / Pay-out ratio Our focus (per share in CHF) (in %) Sustainable dividend policy 3.9% 3.8% 3.4% 17.50 18.00 19.00 43% 44% 2) 45% 2) 47% 3) 66% 3) 2013 2014 2015 1) Excl. preferred securities 2) Basis underlying earnings 3) Basis IFRS 2013 2014 2015 16
Non-Life: Retaining the good portfolio quality 93.7% 93.6% 93.5% 92.1% 91.9% Disciplined underwriting strategy Selective underwriting of large risks 8.4 9.2 8.7 9.0 8.9 20.5 21.0 21.9 20.4 19.3 Portfolio optimisation if necessary Combined Ratio < 95% on average 64.8 63.4 62.9 62.7 63.6 2012 1) 2013 1) 2014 2015 HY 2016 Claims ratio Acquisition cost ratio Administration cost ratio 1) Excl. active reinsurance 17
Life: Stabilisation of interest margin 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 efficient 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 2.51% 0.73% 1.78% 2014 0.67% 2.32% 1) 0.88% 0.95% 1.44% 1.42% 2015 Europe (EUR)* 3.01% 0.65% 2.37% 2) HY 2016 2.85% 1) 2.68% 2) 0.56% 2.34% 2.20% 2.12% Margin 3) Average interest rate Helvetia has to generate in order to meet its obligations 2014 2015 HY 2016 *Without Belgium 1) Not taking into account the effect of the revaluation of bonds at market value (Switzerland: -7 bp; Europe: -10 bp) 2) Not taking into account the effect of the revaluation of bonds at market value (Switzerland: -6 bp; Europe: -8 bp) 3) Before legal quota (2014 excl. acquisitions), direct yield annualised 18
Well-diversified investment portfolio Portfolio by asset class HY 2016 Other 1) Loans Equities 2) Market risk PH Mortgages FY 2015 HY 2016 3% 3% 1% 2% 3% 2% 5% 4% 6% 6% 9% 9% Alternative investments / investment funds / derivatives Performance by asset class HY 2016 4.7% Investment property 13% 13% 3.3% 1.9% 1.0% Bonds 60% 61% -2.1% Equities Bonds Investment property Mortgages Total yield CHF 47.9 bn CHF 49.5 bn 1) Money market instruments and investments in associates 2) Equity exposure delta-adjusted: 4.1% 19
Shareholder structure with long-term focus 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 28.1% 56.1% Other institutional investors Investors based abroad 35.9% 64.1% Swiss investors 15.8% 1) As of 30/06/2016 and without dispo position 20
Calendar and contact Important dates 13/03/2017 Publication of financial results 2016 28/04/2017 Ordinary Shareholders Meeting 04/09/2017 Publication of half-year results 2017 Contact details Investor Relations Susanne Tengler Head of Investor Relations Helvetia Group Dufourstrasse 40 9001 St.Gallen (Switzerland) Telephone: +41 (0)58 280 57 79 Email: susanne.tengler@helvetia.ch Philipp Schüpbach Investor Relations Manager Helvetia Group Dufourstrasse 40 9001 St.Gallen (Switzerland) Telephone: +41 (0)58 280 59 23 Email: philipp.schuepbach@helvetia.ch Corporate Communications & Brand Management Martin Nellen Head of Corporate Communications and Brand Management Helvetia Group Dufourstrasse 40 9001 St.Gallen (Switzerland) Telephone: +41 (0)58 280 50 33 Email: media.relations@helvetia.ch 21
Your Swiss Insurer. Appendix
Our market positions CHF 830.2 mn 30% Life 70% Non-Life Nr. 28 CHF 217.1 mn Niche position Nr. 2 Nr. 3 Nr. 10 CHF 4,953.4 mn 71% Life 29% Non-Life Nr. 22 CHF 435.0 mn 33% Life 67% Non-Life Nr. 29 CHF 416.1 mn 30% Life 70% Non-Life CHF 925.2 mn 46% Life 54% Non-Life Market positions of country markets as of end of 2014 (FR as of end of 2013) Premium volume of country markets for FY 2015 23
Our product portfolio (1/2) Non-Life as of 31/12/2015 CH DE IT ES AT FR LI Property Motor vehicle Liability Accident / Health Travel Transport Engineering Art Active reinsurance worldwide Premiums by business line 8% 9% 8% 7% 33% 35% Premiums by segment 18% 38% 44% Property (incl. engineering) Motor vehicle Transport (incl. art) Liability Accident / Health Active reinsurance Europe Switzerland Specialty Markets Net Combined Ratio 92.1% 24
Our product portfolio (2/2) Life as of 31/12/2015 Individual life Traditional Risk insurance and savings, financial and pension solutions with interest rate guarantees from Helvetia Investment-linked Insurance policies with investment risk either with the policyholder, at Helvetia with appropriate risk hedging or with an external partner Deposits Investment contracts (contracts without a significant insurance technical risk) CH DE IT ES AT Group life Occupational pension plans (BVG) (Switzerland only) Management pension schemee solutions via Helvetia Collective Foundation 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 organisations. Kadervorsorge Additional and separate pension solutions, which go beyond the mandatory requirements. Helvetia BVG Invest Covers the risks of death and invalidity by means of insurance contracts with Helvetia. Assumes the complete administration. Manages the investments through the Helvetia Investment Foundation. Appropriate pension plans with return opportunities. Risk insurance Risk insurance and blanket risk contracts for semi-autonomous occupational pension foundations. Assumption of complete administration. Business volume 59% Premiums by segment 21% 79% 28% 10% 3% Individual life Traditional Investment-linked Deposits Group life Switzerland Europe 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 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. Helvetia Investment Foundation Joint investment and administration of the pension funds investment. Specialising in indexed and core satellite investment products as well as real estate investments. Helvetia Consulta AG Draws up analyses and expert opinions, IAS19 calculations. Assumes the technical administration. Comprehensive consultation and services for occupational pension funds foundations. 25
How does non-life insurance work? 26
How does life insurance work? 27