Annual Report 2012

Transcription

Annual Report 2012

Helvetia Group
Solidarity is the best insurance in the world
Various European countries make up the market in which Helvetia
Group operates. Despite the cultural diversity, we can clearly
state that the principle of a functioning company is the same everywhere. It is the social ties between individuals and their needs
and intentions that are woven into a close network. Whether in
Switzerland, Germany, Italy, Spain, Austria or France, everyone
is included in this network. Networking within society has never
been as pronounced as now, while at the same time demand for
personal freedom – and individuality – has never been as great.
Helvetia Group
In the insurance business, networking is synonymous with solidar
ity. A community of solidarity makes it possible to share the
burden of risk. Many people join together through the insurance
company to reduce the risks facing the individual and provide
support to others in times of need.
Helvetia Group bases its business activity on the solidarity of
its customers. In this annual report we will take a look at our
natural networks based on solidarity.
Contact
Helvetia Group
Investor Relations
P.O. Box, CH -9001 St Gallen
Phone +41 58 280 54 49
Fax +41 58 280 55 89
www.helvetia.com
Annual Report 2012
Annual
Report
2012
Your Swiss insurer.
Contents
2012
2011
Change
More details on
page
Key share data Helvetia Holding AG
Group profit for the period per share
Consolidated equity per share
4 Letter to Shareholders
6 Main Focus: Solidarity
Business development
62 Group result
in CHF
in CHF
Price of Helvetia registered shares at the reporting date
Market capitalisation at the reporting date
in CHF
in CHF million
Number of shares issued
38.1
32.7
16.6%  157
441.3
392.0
12.6% 
92
346.5
295.0
17.5% 
80
2 998.2
2 552.6
17.5% 
43
8 652 875
8 652 875
 153
64 Business activities
Company profile
65 Investments
67 Business units
10 Board of Directors
14 Group Executive Management
80 Investor information
18 Group strategy
23 The Helvetia brand
Financial report
24 Group structure
25 Country markets
88 Consolidated financial statements Helvetia Group
201 Financial statements of Helvetia Holding AG
30 Risk and investment management
34 Corporate responsibility
Governance
212 Embedded value
216 Service
42 Corporate governance
53 Compensation report
in CHF million
in Group currency
Business volume
Gross premiums life
4 201.4
4 258.6
– 1.3% 
64
149.8
261.2
– 42.7% 
64
2 412.4
2 431.8
– 0.8% 
64
214.9
220.5
– 2.5% 
75
6 978.5
7 172.1
– 2.7% 
62
Result life
139.5
155.2
– 10.1% 
64
Result non-life
180.6
135.5
33.4% 
64
22.1
– 0.8
– 
65

62
Deposits received life
Gross premiums non-life
Assumed reinsurance
Business volume
Key performance figures
Result other activities
342.2
289.9
18.0%
Investment result
Group profit for the period after tax
1 315.3
832.9
57.9%  126
of which investment result from Group financial assets and investment property
1 177.8
878.4
34.1% 
65

63
Key balance sheet figures
Consolidated equity (without preferred securities)
3 800.3
3 377.9
12.5% Provisions for insurance and investment contracts (net)
32 786.4
30 125.5
8.8%  143
Profile
Helvetia Group has its registered office in Switzerland. In over 150 years it has grown to become
a successful international insurance group. Alongside its domestic market, Switzerland, its core
g eographic markets include Germany, Austria, Spain, Italy and France. Helvetia is active in the
life, non-life and reinsurance sectors, and approximately 5,200 employees provide services to
more than 2.7 million customers. Business volume in financial year 2012 was CHF 7.0 billion.
The registered shares of Helvetia Holding AG are traded on the SIX Swiss Exchange.
Investments
37 733.2
34 839.0
8.3% 
of which Group financial assets and investment property
35 729.2
32 978.0
8.3%
Ambition
Helvetia Group’s ambition is to sustainably strengthen its attractive business portfolio in its current
markets. We want to be one of the leading providers in our domestic market of Switzerland. We
aim to gradually strengthen our position in the country markets of Italy, Germany, Spain, Austria
and France and continuously increase our market share. In doing so, we place great value on a
practical geographic diversification as well as achieving a harmonious balance between the profit
able non-life business, the fast-growing pensions business and the cyclical reinsurance business.
Direct yield
Investment performance
66
–
Ratios
Return on equity1
9.2%
8.6%
142.0%
132.9%
–
Combined ratio (gross)
91.0%
94.3%
–
Combined ratio (net)
93.5%
95.6%

65
2.8%
2.9%

66
5.5%
3.6%

66
229%
221%

62
Reserve to premium ratio non-life
Solvency I

22
Helvetia Group
5 215
4 909
6.2% 
37
of which Switzerland
2 500
2 477
0.9% 
37
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 CHF million
in CHF million
in CHF million
in %
7 500
375
4 000
250
6 000
300
3 200
200
4 500
225
2 400
150
3 000
150
1 600
100
1 500
75
800
50
0
0
0
0
31.12.2012
Published by
Helvetia Group, St Gallen
Design implementation
YJOO Communications AG, St Gallen
Employees
1
Imprint
The Annual Report 2012 of the Helvetia Group is
available in English, German and French.
31.12.2011
Translation
RR Donnelley, Frankfurt / Main
Photos
Board of Directors, Group Executive Management:
Klaus Andorfer, Zurich
Dr. Prof. Franz Schultheis:
Leo Boesinger, St Gallen
Production (offset printing)
Schwabe AG, Basel
Copyright © 2013 by Helvetia Group, St Gallen
The German version of the Annual Report is legally
binding.
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 its
European growth path.
Increase in profits
Page 62
Solid business portfolio
Page 28
With CHF 342.2 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 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%.
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.
Profit
Combined ratio
Successful acquisitions
Page 18
Strong investment performance
Page 66
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.
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.
Strong boost to growth in 2013
Helvetia Annual Report 2012
3
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 342.2 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 prev
ious 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
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 17.00 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 solidar
ity. 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. You can read more about this in this
Annual Report. 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
5
Solidarity is the best insurance
in the world
The insurance business is caught between the principle of solidarity and the corporate obligation to add value. Solidarity is not an end in itself, but rather the communitisation of individual risks. But how does the principle of solidarity manifest itself
in insurance and what added value is generated thereby? Prof. Dr Franz Schultheis,
Professor of Sociology at the University of St Gallen, reflects below on the various
facets of solidarity.
Where do social bonds come into play in the insurance business?
Schultheis: It is the potential for people to be affected as individuals that awakens their awareness of the need for solidarity. And insurance
represents one of the various forms of solidarity.
It strengthens the social bonds between people
and only functions via interaction: people pay an
insurance premium knowing that they can benefit in the event of loss. But those who only take
and do not give back act selfishly.
Prof. Dr Franz Schultheis,
Professor of Sociology
Helvetia: Professor Schultheis, how do solidarity
and society relate?
Franz Schultheis: What makes society possible at
all? Thomas Hobbes has said that man is a wolf
to man. So in the end, man, due to his egoism, is
the enemy of mankind.
So then how can people still live side by side in
a reasonably peaceful manner?
Schultheis: It is possible to do so because there
is a social bond that is just as powerful as the
instinct of self-preservation. People have the

social need to communitise and to provide mutual
assistance. Society is only possible due to this
solidarity.
6
They respond to misuse, which is not consistent
with the principle of solidarity.
Schultheis: Let’s remember Kant’s ethical maxim:
“Act as if the maxim of your action were to become a universal law.” It is reprehensible when
someone commits insurance fraud and tells himself that it does not harm anyone. Because if
everyone committed fraud, the proven principle
of insurance business would no longer function.
Despite the solidarity underlying the insurance
business, a company must always be intent on
adding value.
Schultheis: An insurance company must think and
act in a business-like manner and handle the
money entrusted to it with prudence. It must strike
a reasonable balance between revenues and expenditures, but at the same time also achieve a
fair balance between the various stakeholders. It
is a kind of dual mandate. Insurance is there for
each individual customer that it takes care of. At
the same time, it has an obligation towards all
customers, investors and society. In this sense, it
is caught between the principle of solidarity and
entrepreneurial spirit. So long as there is a balance between profit-oriented thinking and the interests of the insured, there can be no objection.
But if the focus on profits prevails, this becomes
ethically questionable.
Thus, value creation and solidarity are not mutually exclusive extremes. What does added value
look like to the customer?
Schultheis: From the point of view of solidarity,
the question of added value is secondary. The
fact that an insurance company needs reserves is
self-evident. This could give rise to decisional
conflicts. Entrepreneurship, however, is necessary for many reasons when it comes to insurance; for example, when considering how to invest premiums on a sustainable basis. However,
this should always be secondary to the perform
ance mandate for the common good and the interests of the insured. Safety is not a “product” as
such, but rather a public asset.
You are talking about ethical responsibility.
Schultheis: An insurance company must also act
in an ethical manner. It does not operate with machines but rather with the fate of human beings.
Fate that first and foremost affects individuals.
Are solidarity and individualism mutually exclusive?
Schultheis: It is always a balancing act between
these two endeavours. Individualism, perhaps
even egocentrism, appears to be the opposite of
acting with solidarity. But to become an individual in the first place, in other words, in order to
survive after birth, one needs the solidarity of
others to a great extent. The first human experience is therefore solidarity, without which individuality could not even occur.
“The possibility of being
affected personally makes people
show solidarity.”
What does this mean when applied to an insurance company?
Schultheis: Solidarity is the best insurance
against the intricacies of life. Therefore, insurance companies are a fantastic invention of historic dimension: practically everything that can
be calculated as risk can be insured against.
Which is also necessary as the risks that we are
exposed to are considerable.
Schultheis: Every individual is always exposed to
a number of risks. We live in a society of multiple
risks. Each of us could suffer a large financial or
personal loss at any moment.
Where do you see the notion of solidarity here?
Schultheis: In the fact that people stand together
and cope with a situation together. That which
falls on many shoulders cannot crush the individual. On the other hand, that which burdens the
shoulder of only one person can destroy someone.
7
“Solidarity and added value – isn’t that a contra
diction in terms? Every company must add value for
its customers, employees and shareholders. Adding
value implies that financial value is acquired and
distributed. Solidarity, on the other hand, makes
you think of public spirit or even welfare. Yet, nevertheless, the two terms added value and solidarity
are not mutually exclusive. Because in the insurance
business there is no added value without solidarity.
And vice versa, added value makes a vital contribution to solidarity.”
Erich Walser
8
Company profile
10 Board of Directors
14 Group Executive Management
18 Group strategy
23 The Helvetia brand
24 Group structure
25 Country markets
30 Risk and investment management
34 Corporate responsibility
Company profile
› Board of Directors
Board of Directors
The Board of Directors of Helvetia Holding AG
serves as the company’s highest management
body. It is responsible for the overall management
and strategic direction of the Group, and appoints and oversees the Executive Management.
The Board of Directors currently consists of nine
members. In order to benefit from the specific expertise of the individual Board members and ensure that their know-how is incorporated in the decision-making process, various committees have
been set up. In the Strategy and Governance
Committee, the Nomination and Compensation
Committee, the Audit Committee and the Investment and Risk Committee, Helvetia has four Board
committees designed to ensure effective corporate control and supervision. The committees are
mostly concerned with preparatory work. The
areas where they have the power to make decisions are set out in Appendix I of the organisa
tional regulations: www.helvetia.com/en/gruppe/
governance.
Elections
The terms of office of the individual Board members have been coordinated to ensure that one
third of the seats are up for election or re-election
every year. The term of office of each individual
member is determined on election and may not exceed three years. Re-election is possible. Elections
and re-elections take place separately.
The terms of office of Erich Walser, Christoph
Lechner and Herbert J. Scheidt expire at the

Shareholders’ Meeting which is due to be held in
2013. All three members will stand for re-election
and will be proposed by the Board of Directors for
re-election by the Shareholders’ Meeting.
Please consult the table below for the complete
composition of the Board of Directors.
Function
Entry
Elected until
SGC
NCC
Erich Walser
Chairman
2001
2013
• • • • + +
Doris Russi Schurter
Vice-Chairwoman
2008
2014
• Hans-Jürg Bernet
Member
2006
2015
Jean-René Fournier
Member
2011
2014
Paola Ghillani
Member
2008
2014
10
AC
•
• • •
•
•
Christoph Lechner
Member
2006
2013
John Martin Manser
Member
1996
2015
Herbert J. Scheidt
Member
2011
2013
Pierin Vincenz
Member
2000
2015
SGCStrategy and Governance Committee
NCC Nomination and Compensation Committee
IRC
Investment and Risk Committee
AC
Audit Committee
IRC
• •
•
• •
•
• • •
• • Chairman
• Member
+May join meetings at own request in an advisory capacity
Company profile
Board of Directors ‹
(from left to right) Hans-Jürg Bernet,
Doris Russi Schurter, Pierin Vincenz,
Erich Walser, Jean-René Fournier
(from left to right) Christoph Lechner,
Herbert J. Scheidt, John Martin Manser,
Paola Ghillani
Erich Walser
lic. oec. HSG, lic. iur.
Swiss, Rehetobel, 1947
Doris Russi Schurter
lic. iur., lawyer (with her own law firm)
Swiss, Lucerne, 1956
Professional background, executive responsibilities Chairman of the Board of Directors, until
1978 various positions at different banks; 1979
joined Helvetia: various management positions;
1991 Chief Executive Officer of Helvetia Versicherungen; 1994 Chief Executive Officer of the
Helvetia Patria Group; 2001 Managing Director
reporting to the Board of Directors, from 12 December 2003 to 31 August 2007 Chairman of
the Board of Directors and CEO of the Helvetia
Group, in current function since 1 September
2007.
Appointments in particular Chairman of the
Sponsoring Institution of the Institute of Insurance
Economics at the University of St Gallen; ViceChairman of the board of directors of Huber +
Suhner AG, Herisau, as well as six board memberships at non-listed companies and five memberships of boards of trustees.
Professional background, executive responsibilities until 2005 Partner at KPMG Switzerland,
1994 – 2005 managing partner of KPMG Lucerne.
Appointments in particular Chairwoman of the
board of directors of Patria Genossenschaft,
B asel; Vice-Chairwoman (since 10 December

2012) of Swissgrid AG, Laufenburg; member of
the board of directors of the Cantonal Bank of
Lucerne, Lucerne, LZ Medien Holding, Lucerne
and three boards of trustees; Chairwoman of the
Arbitration Commission of the Central Switzerland Chamber of Commerce and various commitments at the University of Lucerne and the Lucerne
University of Applied Sciences.
11
Company profile
› Board of Directors
Hans-Jürg Bernet
Dr oec. HSG
Swiss, St Gallen, 1949
Paola Ghillani
Pharmacist
Swiss, Bulle, and Italian, Collecchio, 1963
Professional background, executive responsibilities 1977 joined Zurich Insurance, various management positions, including: 1993 member of
the executive board of Zurich Switzerland,
– 2005 CEO of Zurich Switzerland,
2001 2001 – 2004 member of the expanded executive
board of the ZFS Group; 2002 – 2005 ViceChairman of the SIA (Swiss Insurance Association), 2001 – 2005 member of the board of directors and Vice-Chairman of the Sponsoring Institute of Insurance Economics.
Appointments in particular member of the
board of directors of the St Gallen Cantonal
Bank and SWICA Healthcare Organisation as
well as being a member of the board at four
non-listed companies and two trusts.
Professional background, executive responsibilities At Ciba / Novartis as consumer health an
alyst and product manager as well as marketing
director for Benelux, international marketing director at Bernafon International Ltd; from 1999
to 2005 CEO of Max Havelaar Foundation,
Switze rland; currently the owner of her own company focusing on strategic planning and management consulting in Zurich.
Appointments in particular member of the International Committee of the Red Cross; member of
the management board of Migros-Genossenschaftsbund, Zurich; member of the board of
directors of Romande Energie Holding SA and
Transitec SA; several commitments as member of
expert committees for sustainable investment
funds.
Jean-René Fournier
lic. oec. publ. from the University of Freiburg
Swiss, Sion, 1957
Professional background, executive responsibilities Managerial positions with UBS; 1997 – 2009
State Council of the Canton of Valais; since 2007
representative of the Canton of Valais in the Council of States; since 2001 Chairman of the Finance
Commission of the Council of States.
Appointments in particular member of the board
of directors of Patria Genossenschaft; member
of the board of directors of Forces m otrices de
la Gougra SA, Sierre, and Grande Dixence
SA, Sion; Senior Advisor for Credit S uisse SA;
member of the board of the Swiss Trade Associa
tion and Chairman of the board of Union valaisanne
des arts et métiers.
12
Christoph Lechner
Prof. Dr oec.
Swiss and German citizen, Hettlingen, 1967
Professional background, executive responsibilities 1987 – 1995 Deutsche Bank in various positions, including: Corporate Banking and Assistant
to Management (Germany); Corporate Finance
(Singapore); 1995 – 2004 University of St Gallen,
doctorate and professorial thesis, visiting pro
fessor in the USA (Wharton and Connecticut)
and South America (IAE Argentina); since 2004
Professor for Strategic Management at the University of St Gallen and Director of the Institute for
Business Studies.
of directors of Hügli Holding AG, Steinach.
Company profile
Board of Directors ‹
John Martin Manser
MBA; Financial consultant
Swiss, Riehen, 1947
Pierin Vincenz
Dr oec. HSG
Swiss, Teufen, 1956
Professional background, executive responsibili
ties Commercial banking in Switzerland, the UK
and Brazil; 1981 treasurer at the Brazilian sub
sidiary of Ciba-Geigy; 1988 – 1990 CFO and
1990–1996 treasurer at Ciba-Geigy AG, Basel
(head office); 1996 – 2007 Head of the Novartis
Group Treasury: Novartis International AG,
B asel.
of directors of Union Bancaire Privée, G eneva;
member of the Investment Commission of the
University of Basel.
ties 1979 – 1982 Schweizerische Treuhandge
sellschaft, St Gallen; 1986 – 1990 Swiss Bank
Corporation Global Treasury at the head office
in Zurich and Deputy Director of Swiss Bank
Corporation O’Conner Services L.P. Chicago;
1991 – 1996 Hunter Douglas, Lucerne, Vice-Pres
ident and Treasurer; since 1996 Raiffeisen
Group, St Gallen: member of the executive board
and Head of the Finance department; since
1999 CEO of the Raiffeisen Group, St Gallen.
committee of the Swiss Bankers Association,
B asel; Chairman of the board of directors of the
Aduno Group, Glattbrugg; Chairman of the
board of directors of Notenstein Privatbank AG,
St Gallen; Chairman of the board of directors of
the Mortgage Bond Bank of the Swiss Mortgage
Institutions, Zurich; member of the board of direc
tors of SIX Group AG, Zurich; Chairman of the
board of directors of Plozza Vini SA, Brusio;
Chairman of the board of directors of the Spon
soring Association of the Swiss Institute for Banks
and Finance at the University of St Gallen; mem
ber of the board of directors of Pflegekinder-
Aktion Schweiz and five boards of trustees.
Herbert J. Scheidt
Commercial diploma and master degrees
from the Universities of Sussex and New York
Swiss and German citizen, Zurich, 1951
ties Various managerial positions with Deutsche
Bank in Essen, Frankfurt, New York, Milan and
Geneva; 1999 – 2000 Head of Private Banking
International and from 2001 Chief Executive Of
ficer of Deutsche Bank (Schweiz) AG; 2002 – 2011
CEO of the Vontobel Group; since May 2011
Chairman of the board of directors of Vontobel
Holding AG and Bank Vontobel AG, Zurich.
of directors of the Association of Swiss Commer
cial and Investment Banks; member of the board
of directors of SIX Group AG, Zurich; Vice-Chair
man of the board of directors of HERO AG, Len
zburg; member of the board of directors of the
Swiss Bankers Association and member of the
board of the German Council on Foreign
Relations; member of the boards of the SwissGerman Chamber of Commerce and the Zurich
Chamber of Commerce.
Secretary of the Board of Directors:
Christophe Niquille, Dr oec. HSG
13
Company profile
› Group Executive Management
Group Executive Management
The Executive Management is the highest ranking executive body of the Helvetia Group and implements the strategy adopted by the Board of
Directors. The organisation of the Executive Management is structured on the one hand, to match
the value chain and, on the other hand, to manage the operating business units. Key functions,
such as the control of financial operations, investments, group reinsurance and elements of risk
and personnel management are centralised,
making it easier to pool knowledge and resour
ces. The management structure – with international, functional responsibilities – is extremely effective, enabling rapid decision-making, enhancing
transparency and avoiding duplication. There
were no changes to the Group Executive Manage
ment in financial year 2012.
Changes to the national companies
There was also considerable continuity in the
E xecutive Management of the country markets in
the reporting year. The most important expansion
was in France, where the merger of Helvetia
France with the French portfolio of the former
Groupama Transport resulted in additions to our
management body. On 1 January 2013, the following people supplemented the Executive
Management in France: Pierre-François Breuneval,
Head of Operations and IT (formerly responsible
for IT at Groupama Transport), and Vincent Perrau,
Head of Markets and Claims (formerly re
sponsible for international business at Groupama
Transport). Vincent Letac was appointed as
D eputy CEO of the Executive Management of
Helvetia France on 1 December 2012. He will
take over from Alain Tintelin as CEO of Helvetia
France on 1 July 2013. Vincent Letac had worked
for Groupama since 1998, most recently as
Head of the Marine & Transport Division Gan
Eurocourtage. Alain Tintelin has run the company
successfully as CEO since 1993 and he will
continue to run Helvetia France during the initial
phase of the Groupama integration.
Rolf Kuhn, member of the Board of Directors
and Head of Non-Life at Helvetia Austria returned in September 2012 to the headquarters of
the Helvetia Group in St Gallen. He will take over
cross-border relating to non-life insurance pro-
14
jects in the Strategy and Operations division.
39-year-old insurance expert Thomas Neusiedler
took over his position as member of the Board of
Directors and Head of the Non-Life insurance division. Thomas Neusiedler has worked in insurance for 13 years. For the last four years he was
at Zurich Insurance in Austria as a member of its
Executive Management for the Claims / Accident
Actuarial Practice division.
Company profile
Group Executive Management ‹
Board of Directors
Erich Walser,
Chairman
Group CEO
Stefan Loacker
General
Secretariat
Internal Audit
Christophe Niquille**
Simon Schneider**
Finance
Investmens
Strategy &
Operations
Human Resources
International
Paul Norton
Ralph-Thomas
Honegger
Markus Gemperle
Markus Isenrich
Switzerland
Germany
Austria
Italy
Spain
France
Philipp Gmür*
Wolfram Wrabetz*
Burkhard
Gantenbein*
Francesco La Gioia*
Jozef Marie
Paagman*
Alain Tintelin*
Members of the Group Executive Management
Support functions
* CEOs of the country markets
**r eports to the Chairman of the Board of Directors
As at mid-March 2013
15
Company profile
› Group Executive Management
The Executive Management of Helvetia Group
(from left to right) Paul Norton, Stefan Loacker,
(from left to right) Wolfram Wrabetz, Philipp
Markus Gemperle
Gmür, Ralph-Thomas Honegger
Stefan Loacker
lic. oec. HSG; Mag. rer. soc. oec.,
Vienna University of Economics and
Business Administration
Austrian citizen, Speicher, 1969
Chief Executive Officer of Helvetia Group
(CEO)
Markus Gemperle
D r iur. HSG,
Swiss, Niederteufen, 1961
Head of Strategy & Operations (CSO)
Professional background 1986 – 1988 Legal
Counsel Claims Department, Helvetia Feuer,
St Gallen; 1988 – 1990 Academic Assistant,
Professional background 1994–1997 Rentenan-
I nstitute for Insurance Science, University of
stalt / Swiss Life: corporate planning department; St Gallen; 1990 joined Helvetia Insurance;
1997 joined Helvetia: Assistant to Head of Staff to various management functions in the Swiss nonExecutive Management, Corporate Development; life segment; 2002 Head of Corporate Centre of
Head of Staff Group Executive Management; the Helvetia Patria Group; 2004 Member of
2000 Head of Corporate Development; Member of
E xecutive Management Switzerland: Head of
Senior Management; 2002 Der ANKER, Vienna: IT; 2006 Member of Executive Management
Head of Finance and IT; member of the board of Switzerland: Head of Operations & Partners;
directors; 2005 Der ANKER, Vienna: Chief Execu- 2008 Member of Group Executive Management
tive Officer; since 1 September 2007 in current in current position, with various appointments at
position with various appointments at subsidiaries subsidiaries of the Helvetia Group in Switzerland
of the Helvetia Group outside Switzerland.
and abroad.
Appointments in particular member of the board of
the Swiss Insurance Association, Zurich.
16
Company profile
Group Executive Management ‹
Philipp Gmür
Dr iur., lawyer, LL.M.
Swiss, Lucerne, 1963
Chief Executive Officer of Helvetia Switzerland
Professional background 1988– 1990 worked in
various courts, administration and law firms;
1991– 1993 Clerk at the High Court of Lucerne;
1993 joined Helvetia: general agent in Lucerne;
2000 member of Executive Management Switz
erland: Head of Sales; 2003 member of Group
Executive Management in current position, with
various appointments at subsidiaries of the
H elvetia Group in Switzerland.
Appointments in particular Chairman of the
Campaigning Committee of the Swiss Insurance
Association; member of the board of trustees of
the pension funds of Helvetia Versicherungen;
Vice-Chairman of the Helvetia Patria Jeunesse
Foundation; Vice-Chairman of the Swisscanto
Vested Benefits Foundation and the Swisscanto
Supra Joint Foundation of the Cantonal Banks
(until 31 December 2012); member of the board
of directors of Coop Rechtsschutz AG, Aarau;
member of the board of directors of Prevo AG,
Basel, and three other boards of non-listed
companies and two boards of trustees.
Ralph-Thomas Honegger
Dr rer. pol.
Swiss, Arlesheim, 1959
Head of Investments (CIO)
Professional background 1987 joined Patria:
various management positions, including: Head
of Portfolio Strategy and Portfolio Management;
1997 Member of Executive Management Switz
erland: initially Head of Investment Clients, then
Head of Individual Life; 2002 Member of Group
Executive Management in current position, with
various terms of office at subsidiaries of the
H elvetia Group outside Switzerland.
of trustees of the pension funds of Helvetia Versicherungen; Head of the investment commission at
the Raiffeisen Pension Fund; Honorary Consul
General for Austria in Basel; member of the board
of directors of Tertianum AG, Zurich, and Allreal
Group, Zurich.
Paul Norton
B.A. History (University of Reading / UK);
Chartered Accountant
B ritish citizen, Zurich, 1961
Head of Finance at Helvetia Group (CFO)
Professional background 1983– 1992 Price
Waterhouse, London; 1992 – 1994 Revisuisse

Price Waterhouse, Zurich; 1994 – 1996 Price
Waterhouse, London; 1996 – 1999 Zurich Financial
Services (ZFS), Centre Solutions, Head of Transaction Tax and Accounting Europe; 1999 – 2002
ZFS: Head of External Reporting; 2002 – 2007
Winterthur Insurance: Head of Corporate Development and Capital Management; 2007: in current position since 1 July 2007; member of Group
Executive Management with various terms of
o ffice at subsidiaries of the Helvetia Group in
Switzerland and abroad.
Appointments in particular member of the Financial Affairs and Regulation Committee of the
Swiss Insurance Association, Zurich.
Wolfram Wrabetz
Prof. Dr iur., Certified Business Administrator
German citizen, Bad Soden, 1950
Chief Executive Officer of Helvetia Germany
Professional background various positions with
the Gerling Group; 1981 joined Helvetia Germany:
various management positions; 1995 General
Manager for Germany and Chairman of Helvetia
Leben and Helvetia International, Frankfurt /
Main, Germany; since 1998 with the Helvetia
Group in current position.
Appointments in particular member of the
Chairman’s and Professional Committees for

Private Customers and Chairman of the Legal
Committee of the German Insurance Association,
Berlin, Germany; representative of the Hesse
State Government for the insurance industry;
Honorary Consul General in Germany of the
Republic of Ecuador in Frankfurt / Main, Germany;
Vice-Chairman of the Chamber of Commerce
and Industry, Frankfurt / Main, Germany.
17
Company profile
› Group strategy
Group strategy
The Helvetia 2015+ strategy has proved its worth despite a challenging
market environment. Helvetia made further progress in the three central
strategic pillars of growth, profitability and customer loyalty.
Helvetia Group has been synonymous with reli
able insurance services for more than 150 years.
The success of the Helvetia 2015+ strategy is
based on a combination of selected markets, attractive insurance solutions and the drive for sustainable growth, accompanied by actuarial discipline, an active awareness of costs and a prudent investment strategy. This is supported by a
solid capital base. The achievements in 2012
demonstrate that our strategy has proved its
worth even in the face of a challenging market
environment.
Strategic ambition
It is the ambition of Helvetia Group to maintain its
attractive business portfolios and to grow dynamic
ally and sustainably in its existing country markets.
We want to remain a leading provider in the Swiss
home market and continue to improve our position
in foreign markets in the long run. The implementation of this ambition is based on organic growth
with innovative products and the constant expansion of our sales reach. We are actively looking for
selected acquisitions and strategic cooperation
programmes. We continue to place great emphasis
on strengthening our earnings power and strive
to increase the productivity of our operations
enhanced by Group-wide processes and systems.
18
Strategy update 2012
In the annual strategy update, significant emphasis was placed again on meeting the requirements of the changed market conditions. All
things considered, however, we are convinced
that by continuing with our profitable growth
strategy, we will be able to create the most value
for our customers, employees and shareholders.
Growth
We want to dynamically expand our market pos
itions. In light of the weak economy in the Southern European markets and low interest rates in
Germany, Austria and Switzerland, the potential
for profitable growth is currently limited. Accordingly, the business performance during financial
year 2012 reflects a differentiated picture: restricted positive growth in the non-life business,
positive momentum in the individual life insurance business and intended restraint due to interest rates in the area of single-premium policies
in occupational benefit insurance. All in all, the
Group achieved a business volume of about
CHF 7.0 billion. At the same time, growth was
stimulated in 2012 through targeted acquisitions,
which will not have a positive effect until financial year 2013.
Thanks to the acquisition of the French transport insurance portfolio of Groupama, we
climbed to the number two spot in the French
transport insurance market. The related, almost
three-fold, increase in premium volume in France
requires the development of a new marketing
strategy for further integration.
In Switzerland, Helvetia improved its market
position in individual life insurance through the
acquisition of the business of SEV Versicherungen Genossenschaft. This gives us access to SEV
Gewerkschaft des Verkehrspersonals (Transport
Workers‘ Union) with its approximately 45,000
Company Profile
Group strategy ‹
members, and thereby provides us a new inter
esting affinity group in the home market.
In Italy, we further developed multi-channel
ling sales in 2012. Helvetia acquired the remain
ing 30% minority interest in the life insurance
company Chiara Vita and so becomes its sole
shareholder. In addition, the life insurance distri
bution agreement with Banco di Desio, which
has been in effect since 2008, was extended for
ten years. Helvetia also agreed to acquire a ma
jority interest in the non-life insurance company
Chiara Assicurazioni by acquiring 51% of the
shares. This also opens up access for Helvetia in
the non-life business to the sales network of
B anco di Desio and the regional partner banks
of Chiara Assicurazioni with over 1,100 branch
es in the attractive regions of Northern and
Central

I taly. This will expand our access to
c ustomers and further strengthen our market
position in Italy.
The economic environment that remained
challenging should continue to provide good op
portunities for us to strengthen our market posi
tioning in all markets through targeted acquisi
tions. Helvetia has a solid capital base and a
wealth of experience, which make it possible for
us to seize interesting opportunities.
Profitability
We want to sustainably enhance our profitabil
ity. Despite the challenging economic environ
ment, Helvetia succeeded in generating a
pleasing annual result with an 18% increase in
profit. Helvetia’s foreign units, which once
again generated significantly higher profits
compared to the to some extent weak previous
year, contributed primarily to this positive
p erformance.
In the current macroeconomic environment,
it is primarily the low risk-free interest rates that
pose a challenge for life insurance, while the re
cessionary economic environment is reflected in
the non-life business, particularly in our South
ern European markets. Helvetia is implementing
various measures to meet these challenges. In
the life business, we are reducing the share of
traditional guarantee products in the portfolio
in the long term by means of our “product road
map”, while strategically promoting the sale of
term insurance and products with modern guar
antee concepts: these generate new business
margins in line with our objectives even in a low
interest rate environment. These measures are
accompanied by active backbook manage
ment. The objective of all these steps is to min
imise the effects of low interest rates in the
future, to reduce the necessary capital require
ment and finally to maintain or, if possible,
increase profitability.
Important measures were taken in the nonlife business as well in order to stabilise margins
in light of declining demand and a high level of
competition. For example, the “non-life margin
management” initiative was established as a
Group function in order to further develop actu
arial methods in the non-life business Groupwide. In addition to the constant optimisation of
actuarial practice, we are also implementing
various local initiatives to further lower costs.
Helvetia’s programme to improve results in
G ermany was especially successful. Thanks to
the consistent execution of a strict underwriting
policy, the German unit was back to being
profita ble in 2012 following the disappointing
result in 2011.
Business volume
in CHF million
7 000
6 500
6 000
5 500
5 000
4 500
2008 2009 2010 2011 2012
Customer loyalty
We want to improve customer benefits in line
with customer needs. Given the difficult market
environment, many customers are unsettled.
Therefore, customer loyalty is especially import
ant during these times. A number of measures
aimed at customer retention, gaining new cus
tomers and increasing customer benefits are be
ing implemented.
The “Customer Relationship Management”
(CRM) centre of competence established at
Group level made significant progress again.
The modern CRM system is already productive
in Switzerland and Spain and its introduction in
further country markets is right around the cor
ner. Internet presence was standardised and
the new claim “Helvetia – Your Swiss insurer”
was introduced in all of Helvetia’s foreign mar
kets. We are addressing the increasing import
ance of social media with our Helvetia blog,
which provides for a new type of dialogue with
existing and potential customers. Our new mar
keting campaign is described in more detail on
the pages below. The fact that our measures fo
19
Company Profile
› Group strategy
Helvetia promotes
dialogue with its
customers via its blog.
›
cusing on dialogue, quality and service are successful was again proven by independent customer surveys in 2012. In the Italian market, for
example, Helvetia was recognised as having
the highest customer satisfaction levels in motor
vehicle insurance, and Helvetia Austria was
awarded three podium finishes for its products
in an independent customer survey. According
to a broker survey, Helvetia, with its life insurance services, is among the top companies in
Germany as well. We are especially pleased
that our new internet presence was ranked
as number 1 by the Swiss business magazine
“Bilanz”, where our use of social media r eceived
positive remarks.
Group strategy Helvetia 2015+
Our strategic priorities
Strengthen our market position even further
We are confident about the geographic configuration and
growth potential of our portfolio. Innovative products, the systematic expansion of our sales network and targeted acquisitions and cooperation programmes in our existing markets form
the mainstay of our growth ambition. As we particularly want
to grow by expanding our sales reach, it is very important for
us to be able to interact with our customers via a wide variety
of channels. We will also boost the expansion of our life and
employee benefits insurance businesses in our foreign markets.
Sustainably enhance our profitability
Efficiency improvements lay the foundation for sustainably increasing our productivity. In this regard it is very important to
establish interaction between local and cross-Group measures
that target the achievement of our objectives. Both in the life
and non-life business sectors we are doing everything we can
to define and exploit the Group-wide potential for synergies. In
addition, financial optimisation is essential in a changing regulatory environment if we wish to safeguard the interests of our
shareholders.
Improve customer benefits in line with customer needs
At Helvetia, customer relationship management refers to an indepth knowledge of the needs of our insured and partners.
CRM aims to offer the best quality and to ensure a high degree
of customer retention. To reach this objective, the focus must be
on the customer in all areas and phases of life. This ensures a
high level of efficiency of sales activities and a targeted approach to customers. This process is supported by strengthening
the Helvetia brand.
20
Company Profile
Group strategy ‹
Our strategic initiatives
Our achievements 2012
Outlook 2013
–
E xpand the multi-channelling approach in
all country markets
E stablish a “European” life product develop–
ment process step by step
P ursue an active M&A strategy
–
–Organic growth at the level of market average
or higher
–Substantial expansion of the niche transport
business in France (new: number two)
–Consolidation (plus 30% in Chiara Vita) and
expansion of Bancassurance NL (51% in Chiara
Assicurazioni) strengthens sales and positioning
in Italy
–Acquisition of SEV Versicherungen in Switzerland with new Affinity Group approach
–Integration of newly acquired units and further
review of targeted acquisitions
–Repositioning of the transport business in France
–Strengthening of the Bancassurance business in
Italy in the life and non-life business
–Implementation of the Affinity Group approach
through the newly gained access to 45,000
members of SEV Versicherungen
–Industrialisation of business processes and
acceleration of Group-wide IT bundling
–Strategic management of the life business by the
new Group-wide Life Centre
–Optimisation of the financial structure in line
with the supervisory requirements (Swiss
Solvency Test / Solvency II)
–Programme to improve results in Germany on
track to increase profitability
–Foreign units’ contributions to profit increased
overall
–Adjustment of interest rate guarantees and
participation features in the life insurance
business to the capital market environment
–Ensuring new business margin through active
product portfolio management
–Consistent implementation of local measures to
ensure volumes and profitability
–Establishing the “Non-Life Margin Management”
Group initiative for Group-wide development of
actuarial methods in the non-life business
–Increasing the sales of pure risk insurance and
modern guarantee products to decrease
dependence on interest rates and increase
the profitability of the new life business
–Further optimisation of the Group-wide
reinsurance programme
–Optimisation of CRM approach in order to
manage sales processes
–Quality management of business processes
(EFQM)
–Brand campaign and Group-wide branding
concept
–CRM Group approach in the roll-out phase:
productive in Switzerland and Spain
–Brand campaign with a new claim “Your Swiss
insurer” and advertising campaign established
in all country markets
–New internet presence implemented and
Helvetia blog launched in Switzerland
–Corporate Responsibility established as a
new Group function
–Implementation of the CRM Group approach
in additional foreign markets
–Launch of the Helvetia blog in additional
country markets
–Implementation of the first phase of the
corporate responsibility strategy
21
Company Profile
› Group strategy
Helvetia wants to use its
strategy to create as
much added value as
possible for its customers,
employees and shareholders.
›
Our financial objectives
We measure the success of our strategy by longterm financial objectives – our Ambition 2015+.
When the strategy was developed about three
years ago, the financial objectives were established such that they are both ambitious yet attainable. In the current difficult macroeconomic
environment, however, attaining the individual
sub-objectives is becoming more and more challenging. This is the case especially with measurement parameters that are heavily dependent on
the development of interest rates, such as new
business margin and return on equity. Towards
the end of financial year 2012, the interest rates
on the 10-year Swiss government bonds reached
a record low of 0.5%, while they were still at
1.7% at the beginning of the strategy period.
This development implies lower attainable returns on equity, especially in view of the increase
in equity, which reflects the higher market value
of our bond portfolio. Consequently, it is to be
assumed that in the current low interest rate en
vironment, the goal of a ROE of just under 10%
is realistic. As part of our Ambition 2015+, however, we continue to strive to attain a return on
equity (ROE) of 10 – 12% in the medium term.
Financial objectives
Combined ratio (non-life)
New business margin (life)
Solvency I
Rating class
Achievement 2012
94% – 96%
93.5%
1.2% – 1.5%
0.9%
> 175%
229%
A
A
Return on equity (ROE)
temporarily slightly below 10% due to low
interest environment
10% – 12%
9.2%
Payout ratio1
30% – 50%
44%
Organic growth above the market
Improved cost efficiency
1
22
Objectives 2015+
Proposal to the Shareholders’ Meeting
Our shareholders can participate in the increased consolidated profit and strong capital
base of the Group as an increased dividend of
CHF 17.00 per share will be proposed to the
Shareholders’ Meeting. The payout ratio of 44%
is in the upper target range.
Company Profile
The Helvetia brand ‹
The Helvetia brand
The Helvetia brand is the face that the company wears for the public and the character that determines its conduct. It is the identity
that gives us the assurance to conduct our business. Our brand
promise of “tailor-made solutions”, “reliability” and “fairness” is our
compass in our daily work and gives life to the Helvetia brand.
The Helvetia brand is managed centrally, but
market campaigns are mainly handled by the
country units, which have the required local market knowledge. Helvetia further improved its image as a Swiss insurance company over the past
three years. Progress was made in all country
markets, especially on issues of quality and trust.
New “Personality and Partnership”
brand and marketing campaign implemented
With its new brand and marketing campaign, Helvetia communicates for the first time a service
promise that is identical across all markets. The focus is on the terms “personality” and “partnership”, such that customer needs and cooperation
based on trust with all stakeholders enjoy the highest priority. Helvetia promises tailor-made solutions, reliability and fairness to its customers. At
the heart of the new marketing campaign is the
dialogue triggered by the demand for bold actions
or inspiring acts in the life of our customers. The
answer to these questions is as individual as our
customers themselves whose endeavours we support with our products: “Whatever you want to do,
we are there for you.”
In 2012, the new campaign was implemented in
the European country markets. It will be implemented in the Swiss market in 2013. Impressions
regarding our new advertising campaign can be
downloaded from our website www.helvetia.
com under “Strategy”. Our brand positioning is
supported by the internationalisation of our commitment to skiing and the launch of the Helvetia
blog.
Sponsoring skiing strengthens brand
recognition
We sponsor winter sports, especially Swiss-Ski
and Nordic skiing, and have expanded the commitment that we have maintained in the Swiss
market for many years. In order to raise brand
awareness in foreign markets as well and to
strengthen its profile as a performance-oriented
quality brand, Helvetia has now signed up top
skiers, acting as their personal sponsor both in
and outside Switzerland. The international
H elvetia Ski Team includes nine athletes in alpine
skiing, cross-country skiing, ski jumping and
telemark skiing from four alpine countries.
Helvetia blog enhances the brand profile
and fosters dialogue
The new brand and marketing campaign is based
on a dialogue with our customers. This dialogue establishes trust, creates interest and builds the basis
for a solid partnership. We created the Helvetia
blog with the aim of further establishing an open organisation that promotes dialogue with its stakeholders. It was initially launched in Switzerland in
2012 at www.helvetia.ch but, starting in 2013, it
will gradually go online in the European markets as
well. The Helvetia blog documents the company’s
competences and positions Helvetia as an opinion
leader in the insurance industry. The blog facilitates
an uncomplicated, emotional introduction to the
topic of insurance and a needs-based access to
Helvetia, its products and services. It is embedded
in the company’s brand strategy and strengthens
identification with the brand.
Scanning the Quick
Response Code (QR
code) with an appropriate
smartphone application
will take you directly to
the homepage you wish
to visit.
‹
Helvetia blog
Helvetia marketing
campaign
23
Company profile
› Group structure
Group structure
Helvetia
Holding AG
St Gallen
1
Helvetia
Versicherungen
St Gallen
100 %2
Helvetia
Beteiligungen AG
St Gallen
100 %3
Helvetia
Leben
Basel
100 %2
Helvetia Holding
Suizo
Madrid
100 %3
Helvetia
Compañía Suiza
Seville
99 % 3
Helvetia
Europe
Luxemburg
100 %3
Helvetia
Versicherungen
Vienna
100 %3
Helvetia
Vita
Milan
100 %3
Helvetia
Finance
St Helier (Jersey)
100 %2
Helvetia
Rückversicherung
St Gallen
Chiara Vita
Milan
70 %
4
3
Helvetia
Headquarters
Germany
Frankfurt 4
Helvetia
Leben
Frankfurt
100 %3
Helvetia
International
Frankfurt
100 %3
Helvetia
Headquarters
Austria
Vienna 4
1 Helvetia Holding AG, listed on the SIX Swiss Exchange
3 Indirect subsidiaries of Helvetia Holding AG
24
Helvetia
Headquarters
Italy
Milan 4
Padana
Assicurazioni
Milan
100 %3
Helvetia
Headquarters
France
Paris4
Helvetia
A ssurances S.A.
Paris
100 %3
2 Direct subsidiaries of Helvetia Holding AG
4 Operational facilities of Helvetia Versicherungen, St Gallen
Group profile
Country markets ‹
Country markets
Switzerland
As one of the largest insurance compa
nies in Switzerland, Helvetia has a market share of 10%
in the life and over 5% in the non-life business. We offer
insurance services to private customers as well as small
and medium-sized enterprises, primarily through our own
sales force. This important distribution channel is supplemented by renowned distribution partners, such as Raiff
eisen, the cantonal banks and brokers. In the fourth quarter, Helvetia Switzerland successfully concluded the
a cquisition of the portfolio of SEV Versicherungen. This
acquisition has strengthened its individual life business
and given it access to a new customer segment.
Germany
In the German market Helvetia offers a wide
spectrum of claims, accident and life insurance products
to its private and corporate customers. The most import
ant distribution channels include 320 exclusive agents
and several thousand independent brokers. The broker
sales channel makes up almost two-thirds of new business. Agents and brokers on site are supported by eight
of the branch offices dispersed throughout the country. To
ensure streamlined and fast claims handling, Helvetia implemented a professional and central claims service at
the branch office in Frankfurt.
Italy Helvetia is one of the top 20 companies in the Italian insurance market. It operates as an all-line insurer primarily in the economically interesting northern regions of
the country. The Group companies sell Helvetia products
through more than 400 multi-company agents and exclusively via the Insurance Corners in the operational facilities of their cooperation partners, such as ENI Group.
Thanks to the acquisition of Chiara Assicurazioni in 2012,
which is expected to be finalised in the first quarter of
2013, Helvetia will have the opportunity to offer non-life
products within the existing network of Banco di Desio
and its partner banks as well, in addition to life products.
Spain In Spain, Helvetia offers a broad range of life
and non-life insurance products to its customers. Its customers are serviced primarily through its own sales force.
More than a quarter of the business volume is generated
by selected broker and agent relationships. Helvetia is
among the top 30 companies in the Spanish insurance
market. It generates its business volume particularly in
Andalusia and Navarre. Three additional core regions,
Catalonia, the Basque region and the Madrid Metropolitan Area, are expected to be further developed during
the current strategy period.
Austria Helvetia is among the top 12 insurance compan
ies in Austria. It serves the Austrian market through Helvetia
Versicherungen in all life and property/accident in
surance lines. With the branch office for Austria, it also
specialises in transport insurance. Half of all new business is generated by its own sales force and half by independent agents. A total of approximately 390 employees
provide support to regional customers. Since 2010, the
distribution network has been strengthened by independent but exclusive agents. The new “bank and cooperation” sales channel was launched at the beginning of
2012.
France Helvetia specialises in transport insurance in
France. In 2012 Helvetia Assurances acquired the transport insurance portfolio of Gan Eurocourtage, a subsidiary of Groupama SA, and thus climbed to the number two
spot in the French transport insurance business. This is the
second expansion step in the French market in quick succession. In addition to goods, transporter liability and ac-
cidental damage insurance, the products we offer are enhanced by maritime transport insurance as well. Transport and hull business is managed centrally from Paris
and Le Havre. A countrywide network of brokers organised through five central offices is responsible for sales.
25
“Solidarity enables people to
cope with situations that could
not be handled alone.”
Ester Neff, 37, Switzerland
Ester Neff is passionate about marathons. “I find
it exciting to test my limits. A marathon makes me
feel happy.” Her insurance protects her against any
potential misfortune. But Ester Neff does not think

of that when she is running. She is fascinated by the
sense of community. “Even though all runners are
actually competitors, there is solidarity among them.
You are never alone and will not be left high and dry
either.” No one acts recklessly or even unscrupulously.
The maxim that all runners follow is: all for one – and
one for all. “From this perspective, a marathon almost
has an ethical component.” Ester Neff experiences
this kind of solidarity from a c ohesive community time
and again. Especially during mountain ultra-marathons. “78 kilometres and 3,500 metres of ascent,
over hill and dale. Wonderful.”
Company profile
› Business activities
Business activities
Helvetia offers tailor-made insurance solutions to support its customers in
dealing with all aspects of risk and making financial provision for a secure
future. The prudent management of assets and efficient processing of claims
form the core of our business activities.
Helvetia focuses on the needs of private individuals
and small and medium-sized enterprises. As a quality provider, it is distinguished by its strong focus on
service. Aiming to meet customer’s requirements is
our priority when developing and selling products.
Processing claims efficiently also counts as one of
our most important success factors. But insurance is
primarily a matter of trust. The long-term orientation
of our business model demands that we handle the
premiums we receive with care. Solid investment
and risk management ensure that we can cover the
insurance protection taken out by our customers at
any time. The policyholders also support each other
mutually when this insurance protection is granted,
as the “Solidarity” cover story of this year’s Annual
Report shows.
Life activities
Interest rate margin life
in %
1.5
0.6
0
0.6
0.5
2009
2010
2011
0.9
0.8
1.0
2012
In today’s uncertain investment environment, we are
aware of a great need for products with a classical
guarantee with the simultaneous desire for greater
flexibility and a share of returns. This generates opportunities as well as challenges. Helvetia’s range
of products accordingly includes classical products
that cover the needs of security-conscious customer
segments and, increasingly, innovative insurance
solutions. A Group-wide centre of competence supports the country markets in the development of
new products and in the introduction of multi-market products.
Product portfolio
The service spectrum includes term insurance, traditional pension solutions as well as unit- and indexlinked products where the insured themselves to
some extent assume the investment opportunities
and risks. Helvetia directly grants most of the guarantees in the products, but reputable third parties
assume some of the risks in innovative insurance solutions. Financial products with low insurance risk
28
exposure are managed as deposits on behalf of the
insured. With a share of around 55%, company
pension schemes for SMEs represent the most important segment in the insurance business. Virtually 95% of this business is generated in Switzerland
where Helvetia has become the third-largest provider. Despite the great demand for single-premium
policies in this segment, we have been consciously
much more selective in issuing them in 2012 than
we have in the preceding strong-growth periods.
This is in view of the low prevailing interest rates
and the wish to diversify.
Under current market conditions, the demand
for individual life insurance policies is falling. To
counter this trend, we are taking advantage of existing market potential by developing limited product tranches. We were particularly successful in
Switzerland in 2012 with Helvetia Value Trend: this
generated an amount underwritten of 140 million;
and in Spain, where we succeeded in launching
unit-linked ranges of products under extremely
difficult market conditions.
Business volume life
Share in %
in CHF million
Individual life
1 595.2
37%
Group life
2 386.1
55%
Unit-linked
220.1
5%
Deposits
149.8
3%
4 351.2
100%
Total
Company profile
Business activities ‹
Net combined ratio
non-life
80
93.5
100
95.6
in %
94.1
In the non-life business, Helvetia focuses on service
quality, sustainable rates and the cultivation of new
sales channels. The acquisition of Chiara Assicu
razioni at the end of 2012, for example, opens up
Italian banks as a new distribution channel for
non-life business. The recessionary conditions, particularly in Spain and Italy, are one of the greatest
challenges. The broad scope of distribution has,
however, meant that so far we have always managed to achieve profitable growth, mostly above
average, even under difficult market conditions –
the total growth was 0.7% in financial year 2012.
Earning power and efficiency
To safeguard the quality of its portfolio, Helvetia
Group pursues a disciplined underwriting strategy
and only underwrites large corporate risks on a
selective basis. We work with reputable reinsurers
to hedge against major loss events. The rule of
thumb is that every major loss event should be expected to have a maximum impact on earnings of
1% of the premiums. The earning power is also
dependent on the composition of the portfolio,

premium and cost developments and claims ex
perience. Profitability is measured by the combined
ratio, which for Helvetia has been less than 95% on
average over the past few years. Helvetia was also
extremely successful in 2012, with a net combined
ratio of 93.5%. To secure their profitability on a
lasting basis, the country markets have recently
started to work together on best-practice concepts
to improve their underwriting and claims management methods.
91.3
Non-life activities
Product portfolio
The domestic market takes the biggest share of the
non-life business. Germany accounts for some 23%
today, followed by Italy and Spain. Italy and our
transport business in France, where we expect
noticeable growth in the volume of business in 2013
as a result of our latest acquisitions, will represent
an increasingly significant share of our non-life business in the future. Our traditional strength in property business can be seen in its above-average
share of business throughout the Group of around
38%. This is also reflected in the Group’s profitability as a result of low claims ratios.
89.1
Earning power and efficiency
The earning power of the life business is not only
determined by the risk experience, but also by
events on the financial markets. Share price and interest rate developments affect the demand for insurance cover and determine the investment income
that can be earned as well as the long-term guaranteed insurance benefits. The sustained low level of
interest rates represents today’s greatest macroeconomic challenge to investment management. In the
past, Helvetia has always generated an attractive
return on its invested capital. In spite of persistent
low interest rates in 2012, Helvetia again achieved
stable margins between current income and
average interest guarantees issued to customers,
which benefit its customers and shareholders.
60
40
20
0
2008 2009 2010 2011 2012
Reinsurance
Business volume non-life
Share in %
in CHF million
Property
918.0
Transport
172.5
7%
Motor vehicle
930.6
39%
Liability
252.3
10%
Accident / health
139.0
6%
2 412.4
100%
Total
38%
Helvetia is one of the oldest reinsurers in the world.
As a niche provider, Helvetia is characterised by excellent business relationships, a strict underwriting
policy and a considerable degree of sector diversification. The focus of its activities falls on the OECD
markets. The reinsurance segment does not pursue
any volume targets, but concentrates exclusively on
the profitability of the underwritten business. Details
on the portfolio can be found on page 75.
29
Company profile
› Risk and investment management
Risk and investment management
Management of risk, equity and investments is one of the core responsibilities
of an insurance company. It is currently subject to major regulatory supervisory
changes. Helvetia is in a good position to meet the increasing solvency
requirements being imposed both locally and internationally.
Risk management
Against the background of today’s challenging
economic environment and changing regulatory
requirements, a comprehensive risk management
system takes first priority for the Helvetia Group
and is an integral component of its corporate
governance. The primary goal of our risk man
agement is the sustained protection of the capital
base and reputation of the Helvetia Group and
its Group companies.
Risk management organisation
The organisational structure of the Helvetia
Group ensures a uniform application of Groupwide risk management standards. Roles and re
sponsibilities in the business units are aligned
with the risk management organisation of the
Risk management organisation
Risk owners
Board of Directors
(Investment and Risk, Audit, Strategy and
Governance committees)
Risk Committee
Risk and Capital Management
Specialised risk controlling units
(e.g. Group Actuarial Departments Life/Non-Life,
Asset Management)
Risk takers
Risk management at the company
units and processes
30
Internal Audit
Risk observers
Helvetia Group. This is based on a governance
model that differentiates between three basic
functions: risk owner, risk observer and risk taker.
The Board of Directors of Helvetia Holding (in
particular the Investment and Risk Committee, the
Audit Committee and the Strategy and Govern
ance Committee) and Group Executive Manage
ment are the ultimate risk owners of the Helvetia
Group. These bodies carry the core responsibil
ity for risk management and define the desired
level of risk tolerance of the Group and the indi
vidual business units.
Various risk observers evaluate the risk en
tered into by the Helvetia Group in a manner that
is independent of any operational responsibility.
The Risk Committee coordinates the cooperation
between risk observers and risk takers and advis
es the Board of Directors and Group Executive
Management in their decisions. The central risk
controlling function is “Risk and Capital Manage
ment” which is responsible for the expansion and
further development of the risk management sys
tem and the monitoring of risks and management
measures and serves as the competence centre
for the Group’s risk management. Risk and
Capital Management is supported by special
ised risk controlling functions, such as the Group
Actuarial Department and Asset Management.
The intern al statutory auditors are responsible
for the ad hoc monitoring of the efficiency of
the Group’s risk management system.
Risk takers manage and administer risks in the
operational context. They are responsible for risk
management in their respective company areas
and processes.
Company profile
Risk and investment management ‹
Risk management process
and the risk environment
The essential components of the Helvetia Group
risk management process include the identification, analysis and management of risks, the monitoring of the success, effectiveness and appropriateness of risk management measures, and reporting and communication. The risk management process ensures that there is sufficient
risk-bearing capital available at all times to meet
existing risk exposure in accordance with the selected risk tolerance.
The Helvetia Group is exposed to a wide range
of risks in the course of its business activities. These
risks must all be incorporated into the Group risk
management process. Market risks arise in relation to interest rate changes and fluctuations in the
value of equity prices, real estate and exchange
rates that influence the value of the Group’s investment portfolio. Liquidity risk refers in general to the
risk of being unable to provide for unexpected
cash outflows in a timely manner. Counterparty
risk (also known as credit risk) refers to the risk of
default or a change in the credit quality in respect
to a contractual counterparty. The actuarial risks
in the life and non-life sectors are the classic risks
borne by an insurance company and are deliberately accepted in the context of the business strategies selected. Operational risks represent the potential for losses resulting from errors or the failure
of internal processes, employees and systems or
from external events. Operational risk includes the
impact of reputational risks. Strategic risks include
the risk that business goals will not be achieved
due to insufficient orientation of our own business
activities in the market or the market environment.
Latent risks refer to a range of risks which have not
yet been realised as an actual risk but they do exist in real terms and have a considerable potential
to cause major damage. An extensive overview of
the risks arising from financial instruments and insurance contracts is provided in chapter 17 (from
page 172) of the Financial Report.
Methods of risk analysis
and risk management
The varied risk environment requires the deployment of a range of methods of risk analysis. The
Helvetia Group uses the Swiss Solvency Test (SST)
of the Swiss Financial Market Supervisory Author
ity as the primary tool to analyse and quantify
market, counterparty and insurance risks. We also use internal models to assess market risks and
insurance risks. Management and limitation of
risks are effected using hedging instruments, specific product design, reinsurance cover, limit systems (including exposure management and loss
limits), diversification strategies, process optimisation and other risk management measures.
The multiple risks involved with the business
operations are continuously monitored and limited by means of various
measures.
‹
Risk environment
Market risks
Liquidity risks
Counterparty
risks
Actuarial risks
Share price risk
Medium-term
liquidity risks
Reinsurance
Short-term
liquidity risks
Other receivables
Life (mortality, long
evity, disability, costs,
exercising of options)
Interest rate risk
Exchange rate risk
Real estate
investment risk
Long-term
liquidity risks
Investments
Non-life
(natural hazards,
major claims, base
volatility, reserve risk)
Operational
risks
Strategic risks
Latent risks
Other
31
Company profile
› Risk and investment management
Capital management
Capital management is an important cornerstone in
achieving the long-term growth targets of Helvetia,
which are focused on profitability. Capital allocation and income streams are optimised with an emphasis on the following objectives:
–ensuring compliance with regulatory supervisory
requirements at all times;
–securing the capital required to underwrite new
business;
–optimising the earning power of our equity;
–supporting strategic growth;
–optimising financial flexibility.
These objectives are defined by taking account of
risk capacity and cost/benefit arguments. Therefore, as part of its capital management activities,
the Helvetia Group targets an interactive financial
strength rating of at least “A–”.
Helvetia manages its cap
ital requirements through
the use of capital models,
such as Solvency I, the
Swiss Solvency Test and
Standard & Poor’s.
›
32
Methods of capital calculation and
capital management
Capitalisation is calculated at both Group and local levels, i.e. at the level of the individual legal entities. At the local level, country-specific regulatory
requirements and requirements relating to commercial law form the basis of the capital calculation. At
Group level, capital calculation is carried out on the
basis of the consolidated balance sheet. In this process, capital requirements are calculated according
to the capital models relevant to the Helvetia Group,
namely Solvency I, SST and Standard & Poor’s.
In these capital models, the available capital is
calculated on the basis of the IFRS equity. Depending on the model, additional capital is added and
other components such as planned dividend payments and intangible assets are deducted. Under
the Swiss Solvency Test, all assets and liabilities are
measured at market price for the calculation of the
available capital.
While the amount of capital required under Solvency I is basically calculated as a function of business volume, a risk-based calculation method is applied to calculate the capital required under the
Standard & Poor’s model and the Swiss Solvency
Test. In SST, the effects of risk on the available capital are determined with different scenario simulations and statistical methods, while dependencies
and diversification effects are quantified as a riskbased capital requirement.
Capital management process
Capital is managed using an integrated approach
on the basis of an internally defined capitalisation
target under the SST, Solvency I and Standard &
Poor’s, and is brought into line with the corporate
strategy with the help of multi-year capital plans.
The capitalisation of the market units is regularly
compared to their profitability in order to find the
optimum balance between the two. At the operational level, the capital management process covers
financing within the Group and also ensures suff
icient capital in the individual legal entities of the
Group, mainly on the basis of local statutory requirements. Their capitalisation is monitored closely and optimised in accordance with internally defined threshold values.
Solvency requirements
The regulatory supervisory requirements for risk and
capital management are currently changing drast
ically. After a multi-year introduction phase, SST was
enforced as the capital requirement standard for the
Helvetia Group and its Swiss units on 1 January
2011. The EU has a similar supervisory tool in the
form of Solvency II, which is currently in the introduction stage and is expected to be applied on 1 January 2016. Through its EU business units, the Helvetia
Group is also directly affected by Solvency II. Thanks
to its long-standing experience in risk management
and the SST, Helvetia is well prepared for the new
challenges and is dedicated to implementing the new
requirements in good time. You can find more details
about capital management on page 158 of the Notes
to the consolidated financial statements.
Company profile
Risk and investment management ‹
Investment management
The Helvetia Group pursues a sustainable investment policy that focuses on the liabilities of the insurance business and aims to generate an attractive
return over the medium and long term for its customers and shareholders, while making a reliable contribution to the Group result.
Tried-and-tested asset liability
management
Helvetia’s investment strategy is based on an asset
liability concept that has been tried and tested over
many years. The starting point is a meticulous ana
lysis of the liabilities that then forms the basis for a
strategic asset allocation which is defined for each
business unit. The strategic asset allocation must
meet the high security requirements of the insurance
business, on the one hand, and the yield expectations of the individual stakeholder groups on the
other. Asset liability management also ensures that
the Group always has sufficient capital for its strategic development projects while taking account of
the growing regulatory requirements. In addition,
the regulatory supervisory solvency requirements,
which include both the Solvency I regime and now
also the Swiss Solvency Test, must be fulfilled at all
times. The increase in solvency requirements has
gradually led to a longer duration for the interestbearing securities in the life business. The assets’
long maturities mean that the current phase of extremely low interest rates only gradually affects the
direct yield. At the same time, lowering the interest
rates guaranteed in life insurance policies compensates for this trend.
Broadly diversified investment portfolio
Helvetia has a broadly diversified investment port
folio. A balanced allocation of investments in the
portfolio is maintained between and within the in
dividual asset classes. The high degree of diversification ensures that a default by individual counterparties is quite manageable. Furthermore, Helvetia
applies quality criteria for selecting its counterparties. At year end, approximately 80% of the bond
portfolio had a minimum rating of AA or higher. In
addition, about 76.5% of the investments in interestbearing securities is made up of bonds issued by
governments and government-oriented companies
(42.9%) and by guaranteed or state-guaranteed
financial institutions (33.6%), which is above average.
Attractive, stable investment income
A skilful combination of low-risk investments such as
bonds and mortgages, which represent almost 70%
of the portfolio, with high-yielding instruments such
as real estate and equities is used to generate an attractive investment return for our customers and
shareholders with a controlled investment risk. The
interest income generated by bonds, mortgages
and real estate serves as the basis for the sustain
able stability of the investment income while the
equity investments expose the portfolio to valuation
gains over the medium term, adding attractive income potential. Helvetia’s top-quality property
portfolio provides an excellent match for the liabil
ities arising from its insurance business, not only because of the long-term stable and attractive rental
income but also because of the high degree to
which these investments retain their value.
Information on the current
investment result and new
investments can be found
on page 65.
‹
Prudent investment policy and real-time
risk management
The investment strategy is implemented and updated in line with the investment policy which is adjusted annually. In this process, opportunities that arise
are exploited within the defined tactical bandwidths and in response to short-term market developments. The investment policy is always supported by real-time risk management. The objective of
the risk-managing measures is to protect the balance sheet and the income statement against excessive valuation losses. This applies both to exposure
in foreign currencies and equities where, depending on market developments, options and futures
are used for hedging purposes. In addition, counterparty risk is subjected to on-going analysis and
controlling with the aid of various criteria, such as
ratings, credit quality and developments in interestrate spreads. To avoid cluster risks, maximum limits
based on debtor quality also apply.
The investment tactics and risk management are
geared towards safeguarding the long-term sol
vency of the Group and optimising the impact of
volatile markets on the overall result.
33
Company profile
› Corporate responsibility
Corporate responsibility
In 2012, Helvetia embedded the idea of corporate responsibility even
more deeply into the company by linking it up with the strategy process
at Group level.
Living corporate responsibility has ensured
H elvetia’s stability for more than 150 years. It
e stablishes identity and trust with employees,

customers and all other stakeholders, especially
during challenging economic times. Corporate
responsibility is, however, primarily an investment
in the company. This is what the corporate responsibility initiative launched last year is based
on. Its objective is to further strengthen corporate
responsibility and to establish a closer tie between sustainability issues and Helvetia Group’s
long-term business policy objectives. The Groupwide approach focuses on the proven three-pillar
model of sustainable development in the areas of
the economy, environment and society.
A central corporate responsibility specialist
unit was established to coordinate these areas of
responsibility on a long-term, balanced and
cross-border basis. In doing so, Helvetia set the
benchmarks for the further development of corpor
ate responsibility and created the conditions for
a comprehensive and integrated management of
its corporate responsibility services.
Core business
Sustainability as part of business understanding
characterises our claim to meet customer needs
and take into account corporate responsibility
aspects in risk and investment management.
Customer satisfaction
The key aspects of sustainability in the core business include the ability to develop long-term customer relationships. Helvetia was again perceived
as a friendly, successful, safe and truly Swiss company by its customers in 2012. To raise customer
satisfaction even higher, surveys will be conducted and measures derived from them on a regular
basis. This will contribute towards improving our
quality of services and enable more effective mar34
keting. At the same time, from the survey results we
will also draw conclusions concerning the products offered. Helvetia offers its customers a wide
range of high-quality, competitive and sustainable
solutions. Sustainable development is also actively promoted with the extension of the product
range to include insurance for photovoltaic plants
and geothermal probe drilling as well as the granting of discounts for energy-efficient motor vehicles.
Prudent investments
With its investment management Helvetia aims at
a long-term and prudent investment. The focus is
on achieving predictable returns in line with market conditions in the interest of customers and
shareholders. Proactive management and broad
diversification ensure that liabilities from policies
can be met at all times. As a result, Helvetia primarily invests in widely diversified fixed-income
investments issued by high-quality debtors and in
real estate. The investment properties portfolio of
CHF 4.9 billion is an important lever for us from
the aspect of responsibility. The Minergie ® standard is used for new buildings whenever possible.
In addition, these have to take into consideration
the priority given to retaining value over the long
term and to safeguarding the interests of current
and future generations of tenants and investors,
both from a social and an economic perspective.
For example, in a pilot study conducted by the
Swiss Federal Office for Energy the property
Zentrum Staldenbach in Pfäffikon SZ was classified as a sustainable district (based on the “Sméo”
model). In addition to sustainable construction,
emphasis was also placed on designing new public outdoor areas that can be used by people as
traffic-free meeting areas.
Company profile
Corporate responsibility ‹
Responsibility in procurement
Helvetia has a fair relationship with its suppliers
that is based on partnership and aims at longterm relationships. In order to keep emissions
caused by transportation as low as possible, procurement is generally carried out at the Helvetia
locations. At the same time, preference is given
suppliers whose operations are compatible with
Helvetia’s values and are part of our own clientele.
Environment
Helvetia is committed to the sustainable use of
natural resources and endeavours to carry out its
business activities in harmony with its environment.
Responsibility for climate and environmental protection
Sustainable management of natural resources and
a reduction in any environmental pollution that we
cause are made possible primarily through building management, procurement and our employees’ conduct. When travelling for business, visiting
customers or on their way to work, Helvetia’s employees have many opportunities to reduce environmental pollution. The means of transportation
for necessary business travel is also selected in accordance with ecological criteria. In the reporting
year, Helvetia launched targeted “bike2work campaigns”, subsidised the use of public means of
transport and promoted the use of video conferences, thereby setting the standard for sustainable
mobility. For example, the use of Swiss Federal
Railways (SBB) for business trips in the Switzerland
country market increased by 24% in Swiss francs.
In addition, over 50 employees participated in an
eco-driving training programme.
For Helvetia, corporate responsibility also
means the active commitment to initiatives and organisations for the benefit of environmental and
climate protection. These include regular reporting
in the form of Carbon Disclosure Project Reporting,
signing the UNEP Finance Initiative, membership
in the Swiss öbu network for sustainable management and in the Risk Dialogue Foundation, as well
as promoting the student NGO oikos St Gallen
founded in 1987, which deals with issues of sus-
tainable economic, social and environmental development.
Increase in commitment to protective
forests
The commitment to the sustainability of social
e nvironment was further developed in 2012.

With the protective forest initiative in Switzerland, Helvetia takes account of the fact that
extreme weather and associated damage due to
drought, storms, falling rocks, landslides and
a valanches have become more frequent as a
result of climate change. With the donation of
10,000 trees for the reforestation of the forest fire
area of Visp in Upper Valais and 10,000 trees in
eastern Bernese Oberland, two additional forest
projects were taken on in the reporting year.
Helvetia expanded its
protective forest involvement by 20,000 trees.
‹
Social responsibility
For many years Helvetia Group has dedicated
part of its profits to charitable projects to promote
environmental, cultural and sports initiatives.
Committed to society on many levels
With its diversified commitment in the areas of education, culture and community, Helvetia contributes
to a lively local economic and social environment.
Based on Group-wide priorities, the country m
arkets
add their own local touches. Thus, Helvetia also
supports the Swiss SME Day, the University of

St Gallen, the Vocational Training Academy of the
School for Economics and Law of Berlin (Berufs
akademie der Hochschule für Recht und Wirtschaft
in Berlin) and the Sir Karl Popper Schools in Vienna.
Traditionally, cultural commitment has been espec
ially important for Helvetia. Both the interest in and
the exchange of new ideas and art forms, such as
organising the Sala Helvetia in Seville, and local
events such as the German Opera Ball in Frankfurt
or the St Gallen festivals, are promoted. With
its Helvetia Patria Jeunesse foundation, Helvetia
supports projects in youth work and welfare. In
2012, the annual donation was given to the “Powerlungs for young asthmatics” association, which promotes the comprehensive training and improvement
of the well-being of young asthmatics by means of
rowing.
35
Company profile
› Corporate responsibility
For the first time, Helvetia
conducted an employee sur
vey on the topic of balanc
ing work with caring for
family members.
›
Helvetia employees and members of its Group
Executive Management are also personally
i nvolved

d uring their spare time. Helvetia
generously supports voluntary activities in sports,
politics and society that are consistent with its
mission and in accordance with its corporate
responsibility guidelines. As a leading Swiss

insurer, Helvetia continues to promote attractive
general conditions for the
insurance industry
through a responsible and continuous dialogue
with politicians, officials, scientists and those in
society.
Employees
Helvetia sees its relationship with its employees
as a long-term and fair partnership based on mu
tual trust and respect.
For employee satisfaction
As at 31 December 2012, Helvetia Group had a to
tal of 5,215 employees, of which 36% were women
and 64% men. As at 31 December 2012, the number
of part-time workers was 745. In financial year 2012,
193 apprentices and eleven university graduates
were trained within the Group as part of the Helvetia
Trainee Programme.
Helvetia strives to offer its employees an environ
ment that promotes their well-being. To that end, it fo
cuses on a positive, value-based corporate and man
agement structure, a transparent compensation sys
tem, rewarding performance and self-responsibility
and its employee health management. Work-life bal
ance is supported with flexible working time models,
by providing maternity and paternity leave and care
services for the employees’ children. Various meas
ures were implemented at country level in 2012.
Helvetia Italy, for example, was given an award for
its efforts regarding equal opportunity as part of the
“GenerAzione” project of the Italian association of
insurers.
In 2012, a survey was conducted in Switzer
land for the first time on the topic of “work &
care”, which provided information about workcare balance. The results show that about one
third of the participating employees were in the
past or are presently involved with taking care of
family members. In addition, one fifth of those
surveyed expect to provide care services to
family members in the near future. Based on the
survey results, measures will be taken in 2013 to
help the employees concerned to balance the
various care-related challenges with their work.
Preparing for the future
With systematic and proactively run personnel plan
ning and development, Helvetia also meets future de
mographic challenges. The significant influencing fac
tors range from labour shortages to loss of specialised
know-how due to retirement. Thanks to the employer
branding initiative launched in 2012, Helvetia was
able to position itself on the labour market in a uni
form manner Group-wide and to further professional
ise and strengthen its positioning. At the same time,
special emphasis is placed on internal personnel de
velopment as well. A wide variety of courses is avail
able to optimally promote employee potential. In ad
Work & care survey
2012
in %
36
Employees with current care involvement
14.0
Employees with care involvement in the past
17.0
Employees with potential care involvement in near future
18.0
Employees with no care involvement
51.0
Company profile
Corporate responsibility ‹
dition, Helvetia continues to invest in its central personnel development instruments and promotes Groupwide knowledge transfer with an intra-Group
exchange programme for skilled specialists and managers. In collaboration with internationally renowned
educational establishments, including London Business School and the University of St Gallen, strategy
and training programmes will be conducted over the
course of several days as part of the modular “International Executive Programme”, in which over 200
top performers of Helvetia Group will participate. In
addition to providing up-to-date management knowledge, these seminars will again provide members of
the Group Executive Management and managers of
the Helvetia companies in 2012 with a platform for
personalised international exchange of experience.
Helvetia Group age pyramid
in %
0 – 20
0.46
21– 30
11.90
31– 40
25.02
41– 50
33.12
51– 60
26.39
Over 60
3.11
0
5
10
15
20
25
30
35
Employees
CH DE
IT
ES
AT
FRTotal
As at 31.12.2011
2 477
750
427
523
628
104
As at 31.12.2012
2 500
765
448
526
644
332
5 215
of which men
1 700
467
255
321
393
199
3 335
800
298
193
205
251
133
1 880
of which women
4 909
37
“The possibility of being affected
personally makes people show
solidarity. There is no society
without solidarity.”
Paula Mallén, 36, and
Tomás Muriel, 27, Spain
“We would like to travel eventually”, said Paula Mallén.
The Spaniard was bitten by the travel bug as a child.
There was nothing more exciting than discovering the
world and experiencing other cultures. The only thing
that is different now is knowing that something could
always go wrong despite the best preparation. “We
are also aware of the possibility of accidents. It makes
us feel good to be insured against that.” But it is also
just as important to support fellow travellers or locals.
“Tomás and I like unspoiled areas. There you actually
have to rely on the solidarity of others.” Luckily, that has
always worked up to now. “In my experience, people
are willing to help because they know that they may
also need help sometime.”
As at the end of the year, Helvetia Group had 9,512 shareholders,
which means that 827 more investors place their trust in Helvetia every
day compared to 2011.
40
Geschäftsentwicklung
Governance
Corporate
Gruppenergebnis governance ‹
Governance
42
C orporate governance
53 Compensation report
Governance
› Corporate governance
Corporate governance
Appropriate corporate governance is one of the basic requirements for a
successful company. It sets the keynote for the business conduct and image of
Helvetia – internally as well as externally.
Helvetia wants to meet the demanding legal and
ethical expectations of its shareholders and all
other stakeholders by providing comprehensive
and transparent reporting and responsible and
value-oriented corporate governance, to the best
of its knowledge and in good faith. The main
aims here are to further strengthen confidence in
the Helvetia Group, to safeguard the interests of
our customers, and to ensure and sustainably enhance the value of the Group – also in the best
interests of the public. We successfully ensure
that the principles of good corporate governance
are consistently implemented and continually optimised throughout the Group. For the Board of
Directors, the Group Executive Management and
all employees of Helvetia, corporate governance
is a continuous process that is periodically reviewed and used to integrate new developments,
findings and requirements into daily professional
life and responsibilities. The fact that the Group
has its own Corporate Governance Officer underlines its willingness and efforts to practice
proper corporate governance. Good corporate
governance can only be truly effective if it is
c onstantly oriented to the Group’s strategy and
positioning. For more information, please refer to
pages 18 et seq.
With this strategic focus, Helvetia wants to
comply as fully as possible with the applicable
standards of the Swiss Code of Best Practice for
Corporate Governance and the SIX Swiss Exchange Corporate Governance Guidelines of
29 October 2008 including appendices. Im
portant information can also be found in the
Financial Report, Note 16 “Compensation paid
to the Board of Directors and the Group Executive Management” on pages 168 to 171. If relevant information is provided elsewhere in the
A nnual Report or in other documents, reference
is made to the location or document concerned.
42
Important documents such as the articles of
incorporation and the organisation rules with
a ppendices are also available on our website
at www.helvetia.com/en/gruppe/governance.
This website also contains plenty of additional
interesting and up-to-date information.
Helvetia Group reports in detail on the compensation paid to the members of the Board of
Directors and the Group Executive Management.
This compensation report consists of two parts,
both of which are integrated in this Annual Report. This report comprises:
–Part I “General compensation principles” on
pages 53 et seq. and
–Part II in Note 16 on pages 168 et seq. with
the relevant figures for financial year 2012.
Helvetia’s compensation principles and policy
are simple, transparent, state-of-the-art and – in
particular when compared to the principles applied by our most important competitors – wellbalanced. As in past years, these principles comply with the values in which the Helvetia Group
believes. The Board of Directors considers the
compensation policy applied by Helvetia to be
exemplary.
1. Group structure and shareholder base
1.1 Group structure
Helvetia is an internationally active Swiss allbranch insurance group that focuses primarily on
central and southern Europe. The parent company,
Helvetia Holding AG, is organised in accordance
with Swiss law. The management structure is
shown on page 15. These structures are intended
to create the best possible legal, financial, controlling and regulatory framework and to ensure
smooth, efficient and flexible business operations.
Governance
Corporate governance ‹
The legal structure of the Helvetia Group (including
investments) is shown on page 24.
Helvetia Holding AG has its head office in
St Gallen and is listed on the SIX Swiss Exchange
in Zurich: security no. / ticker 1 227 168 / HELN.
Key data for investors is given on pages 80 to 83
under “Investor information”. Helvetia Holding AG
is the only listed company within the Group.
The Group’s subsidiaries included in the scope
of consolidation are listed on pages 197 and 198.
Reports on the main subsidiaries – Helvetia
S chweizerische Versicherungsgesellschaft AG,
St Gallen (Helvetia Versicherungen) and Helvetia
Schweizerische Lebensversicherungsgesellschaft
AG, Basel (Helvetia Leben) – can be found in the
Notes on page 202.
With a combined equity stake of 38.1% in Helvetia
Holding, it comprises the following three partners:
–Patria Genossenschaft, Basel, with 30.1%;
– Vontobel Beteiligungen AG, Zurich,
with 4.0% and
– Raiffeisen Switzerland, St Gallen,
with 4.0%.
The pool agreement strengthens and promotes
Helvetia’s strategic focus on cooperation in
areas outside its core business (insurance), and
supports the activities of the Group in crucial
a reas such as sales. It unites the cooperation
partners of the Helvetia Group in their capacity
as strategically orientated, long-term investing
shareholders who are interested in the successful
development of the company. Pool members may
only sell their Helvetia shares with the consent of
1.2 Major shareholders
In addition to a strong, long-term and, in view of the other pool members, who also have a right of
the positive development of the Group, very suc- first refusal at market conditions. Beyond the
cessful relationship with our major pool share- scope of normal cooperation activities relating to
holders the Patria Genossenschaft (founding consulting and the sale of financial, insurance
partner), Raiffeisen and Vontobel (cooperation and fund management products and services –
partners), we apply an open and shareholder- in each case at market conditions – there are no
friendly strategy in an effort to build up a widely significant business relationships between pool
diversified and informed shareholder base. members and Helvetia Group.
On the balance sheet date, 9,512 shareholders
were registered in the share register of Helvetia 1.3 Cross-holdings
Holding. This renewed year-on-year increase in There are no cross-holdings that exceed 3% of
the number of registered shareholders emphasises the capital or voting rights.
the attraction of our shares, despite all the turbulence in the financial sector. In this regard, our 2. Capital structure
shareholder base is worthy of special mention:
2.1 Share capital
Helvetia Holding AG has share capital of
CHF 865,287.50, consisting of 8,652,875 registered shares with a nominal value of CHF 0.10
each. At the year-end price of CHF 346.5
per share, this equals a market capitalisation of
CHF 2,998.2 million.
Pool members Patria
Genossenschaft,
Vontobel and Raiffeisen
strengthen and promote
the successful development of Helvetia Group.
‹
43
Governance
The share capital consisting of 8,652,875 fully
paid registered shares
remained unchanged in
reporting year 2012.
›
2.2 Treasury shares
Helvetia held 40,436 treasury shares (0.47%) on
31 December 2012.
2.3 Conditional capital
The share capital can be increased by a maximum of CHF 129,793.20 by issuing a maximum
of 1,297,932 registered shares with a nominal
value of CHF 0.10 each, which must be fully paid
up. The conditions for this are set out in Art. 3bis
of the articles of incorporation.
2.4 Changes in capital
–In 2001, the share capital was reduced by
CHF 16,492,980 to CHF 65,971,920 by a reduction in the nominal share value from CHF
50.00 to CHF 40.00 and a 4-for-1 share split
to CHF 10.00 per share.
–In 2002, the share capital was reduced by
4.61% to CHF 62,930,000 by means of a
share buyback programme and the cancellation of shares amounting to CHF 3,041,920.
–In December 2004, an approved share cap
ital increase of CHF 23,598,750 was carried
out by issuing 2,359,875 registered shares
with a nominal value of CHF 10.00 each, as
a result of which the share capital increased
from CHF 62,930,000 to CHF 86,528,750.
–
Conditional share capital was created in
2007: see section 2.3.
–Helvetia celebrated its 150th anniversary in
2008. To celebrate this event and recognise
the confidence in and loyalty of the shareholders to Helvetia and at the same time to
optimise the capital structure of the company,
Helvetia reduced the nominal value of the registered shares from CHF 10.00 to CHF 0.10
and paid out the difference of CHF 9.90 to its
shareholders in the form of a nominal value
dividend.
–As the share capital did not change in 2012,
the share capital values set out in sections 2.1
to 2.3, valid from 25 July 2008, and the information on the conditional share capital are
still correct.
2.5/2.6 Shares, participation certificates
and dividend-right certificates
The share capital comprises 8,652,875 fully
paid-up registered shares with voting and dividend rights with a nominal value of CHF 0.10
each. There are no preferential rights, participation certificates or dividend-right certificates. For
more details concerning Helvetia shares, please
refer to pages 80 to 83.
2.7 Restriction on transferability and
nominee registrations
The Board of Directors may refuse to approve
registration with voting rights if an individual
would then own more than 5% of the voting rights
of the entire share capital recorded with the
Commercial Register. Here the term “individual”
also includes buyers of shares who are connected to each other either by way of capital or
votes, or by united management, or in any other
form. This restriction also applies if, for example,
shares were subscribed or acquired by means of
convertible rights that are associated with instruments issued by the company or third parties. In
the reporting year, no new exceptions were declared regarding the restriction of transferability
(for major shareholders: see section 1.2). Private
individuals who do not declare in the application
for registration that they have acquired the
shares on their own behalf (= nominees) will only
be entered in the share register for a maximum
of 3% of the total share capital. The registration
regulations are described in detail in Art. 7 of the
articles of incorporation. Any amendment by the
Shareholders’ Meeting to the statutory restriction
of transferability referred to above requires a
two-thirds majority of votes represented.
2.8 Convertible bonds and options
a) Convertible bonds
No convertible bonds have been issued since
2004.
b)Options
The Helvetia Group has not issued any options.
c)Employee options
The Helvetia Group has not issued any employee options.
44
Governance
3. Board of Directors
See also the diagram and information provided
on pages 10 to 13.
3.1 Members of the Board of Directors
The Board of Directors of the Helvetia Holding
AG consists of nine members. It is identical to the
Boards of Directors of the two subsidiaries,
H elvetia Leben and Helvetia Versicherungen.

Members of the Board of Directors are required
to have experience and knowledge of a wide
variety of fields. They should have the requisite
expertise to represent their personal opinion in
discussions with the Group Executive Management. Since the Helvetia Group conducts a
signific ant proportion of its business abroad, the
Board of Directors also includes citizens of different countries and members who have extensive
international experience. Members of the Board
D irectors should possess strong personal
of
values (including integrity), specialised financial,
business and insurance knowledge, experience
in strategic and executive management, the
ability to think in a visionary manner, social skills
and a belief in sustainability. They must also have
the necessary amount of time at their disposal for
the efficient and proper performance of a director’s term of office. As far as the independence
of the Board members is concerned, Helvetia
complies with the basic requirements of the Swiss
Code of Best Practice for Corporate Governance. For example, the Board consists only of
members whose personal and business skills
enable them to form an independent opinion and
take decisions that are in the best interests of the
company. Members of its committees are non-
executive. The members of the Compensation
Committee and the Audit Committee have either
never been members of the Group Executive
Management or have not been members of the
Group Executive Management for the past three
years or more. The members of the Compensation Committee have neither personal relationships with Helvetia nor any business relationships through the companies and organisations
represented by them; nor do they hold any crossinvolvements. The rule that members must abstain
from taking part in meetings when business is
with regard to their own interests is consistently
applied by all committees. Every year, the Board
of Directors assesses the level of compliance
with these requirements and the quality of the
services it has performed, both in its entirety and
within each committee, and – where necessary –
identifies any improvements that may be required.
The composition of the Board of Directors is
shown on pages 10 to 13.
None of the members of the Board of Directors holds any executive functions or – except for
Erich Walser (until 1 September 2007) – belonged to the Group Executive Management of
Helvetia or any of its Group companies during
the financial years preceding the reporting year.
None of the members of the Board of Directors
has any significant business relationships with
Helvetia other than as policyholders at standard
conditions.
3.2 Other activities and interests
The following business relationships exist with
companies represented by members of the Board
of Directors:
–In the shareholder pool, Doris Russi Schurter
and Jean-René Fournier represent the Patria
Genossenschaft; Pierin Vincenz represents
the Raiffeisen Group; and Herbert J. Scheidt
represents the Vontobel Group.
–Doris Russi Schurter is the Chairwoman and
Jean-René Fournier the Vice-Chairman of the
board of directors of the Patria Genossenschaft, Basel, the statutory objectives of which
are to promote the conclusion and execution
of life insurance contracts with Helvetia in the
interests of its members, and to secure and
promote its independence and development
by means of financial participation in Helvetia.
– Helvetia, the Vontobel Group and the Raiffeisen
Group are cooperation partners in the areas of
consulting and the sale of financial services.
Helvetia complies with
the Swiss Code of Best
Practice for Corporate
Governance with regard
to the independence of
its Board members.
‹
3.3 Cross-involvements
See section 3.2.
Until recently, there existed a cross-involvement
between two of Helvetia’s shareholders via a cooperation agreement between the Raiffeisen and
the Vontobel Group and the seats held by two of
the members of the Board of Directors, Pierin
Vincenz and Herbert J. Scheidt, on the board of
directors of the Vontobel Group. Pierin Vincenz
45
Governance
resigned from the board of directors of the
ontobel Group on 24 April 2012, but the coopV
eration agreement between the Raiffeisen and
the Vontobel Group continues in unchanged
form. The interests of the Raiffeisen Group on the
board of directors of the Vontobel Group are now
represented by a person who has no relationship
with H elvetia. There are no other cross-ties with
the boards of directors of listed companies.
The terms of office of the
Board members have
been coordinated to
ensure that one third of
the members are up for
election or re-election
every year.
›
3.4 Election and term of office
The ordinary tenure of office of members of the
Board of Directors is three years and ends at the
latest with the Shareholders’ Meeting in the year
in which the Board member turns 70. As none of
the serving members of the Board of Directors
will reach this statutory age limit before the 2012
Shareholders’ Meeting, all three of the members
eligible for re-election are available for re-election. Proposals for their election will be included
in the invitation to the Shareholders’ Meeting.
Any new members will complete the term of
office of retiring members. The terms of office are
coordinated in such a way as to ensure that,
every year, one third of the members of the Board
of Directors is available for election or re-
election. Re-election is possible. Every member
of the Board of Directors has to be elected by the
shareholders. For information concerning the
first-time election to the Board of Helvetia H olding
AG and the remaining term of office of the members of the Board of Directors, please refer to the
table on page 10. 3.5 Internal organisation
Good governance at Helvetia is based on the relevant legal provisions (in particular company
law and stock market legislation) and on internal
directives and regulations. The functions intended to be carried out by the Board of Directors
and the allocation of duties are set out on page
10. The Board of Directors appoints the Chairman, Vice-Chairman, the chairmen and members
of the various committees as well as the secretary
of the Board of Directors.
46
Board committees
In order to use the broad business experience
of its individual members in its decision-making
processes and to meet its supervisory reporting
obligations, the Board of Directors has formed
special committees from among its own members
to assist the Board and the Group Executive
M anagement in its management and control activities: the Strategy and Governance Committee,
the Compensation Committee, the Investment
and Risk Committee, and the Audit Committee.
The duties and powers of these committees are
described in detail in the organisational regulations, and the composition of each committee is
presented on page 10.
a)The Strategy and Governance Committee
(SGC) prepares the resolutions to be passed by
the Board of Directors in the event of a change
or redefinition of strategy, monitors the strategic
risks within the framework of the defined strate gy
and the related measures, deals with mergers,
take-overs and disposals of companies or major
portfolios, and prepares the required resolutions
by the full Board of Directors. It prepared up to
the end of 2012 the resolutions by the Shareholders’ Meeting regarding the appointment and dismissal of members of the Board of Directors, puts
forward proposals regarding personnel de
cisions and appointments and dismissals of members of the Group Executive Management,
h andles the appointment and dismissal of the
country CEOs and other members of the country
boards, and periodically reviews plans and
measures to retain and promote senior managers. These powers to take and prepare decisions
on personnel matters were delegated to the Compensation Committee on 1 January 2013. Under
these newly defined powers, the SGC secures
good corporate governance within the Helvetia
Group, assumes duties and powers that have
been assigned to the SGC by the Board of Directors, deals with issues entrusted to it by the Chairman that are not reserved for the full Board of
Directors in accordance with the law, the articles
of incorporation or Group regulations, and
discusses important and urgent issues. The SGC
convenes as often as business requires. In order
to deal with specific issues, it may call on internal
or external specialists to attend its meetings,
Governance
which is regularly the case. The CEO participates in an advisory capacity. The SGC met
three times in 2012. At one meeting, a Board
member was absent due to illness. Most of the
meetings lasted approximately half a day.
b) The Compensation Committee (CC) puts forward proposals regarding the structure of the
compensation system that applies to the members of the Board of Directors and to the salaries
and compensation of the members of Group Executive Management, and specifies the fixed and
variable salaries and compensation due to the
members of the Group Executive Management. It
approves the concept and strategy of the employee pension funds in Switzerland on behalf of the
employer and takes note of their annual financial
statements. On 1 January 2013 the CC took on
the powers involved in nominating members of
the Board of Directors and the Group Executive
Management and so will henceforth be the
N omination and Compensation Committee

(NCC). The Nomination and Compensation
Committee (NCC) convenes as often as business
requires. In order to deal with specific issues, the
Committee may call on internal or external specialists to attend its meetings, which is regularly
the case. The CEO takes part in an advisory capacity where topics that affect the Group Executive Management are concerned. In 2012, the
CC held two meetings, both of which were
a ttended by all its members. Most of the meetings lasted approximately half a day.
c) The Investment and Risk Committee (IRC) formulates the investment concept, basic guidelines
and investment strategy, proposes the strategic
bandwidths of asset allocation, approves the investment strategy and supervises the investment
activities of the Helvetia Group. It also makes investment decisions insofar as the Board of Directors has entrusted it with the corresponding
p owers, determines the most important risk strategies, the risk tolerance, risk appetite and app
licable risk limits, and monitors all non-strategic
and non-operational risks as well as the related
risk management measures and compliance with
limits. It convenes as often as business requires.
The CEO, CFO and CIO as well as the Head of
Risk Management attend the meetings in an ad-
visory capacity; in 2012, they attended all meetings. In order to deal with specific issues, the
Committee may call on internal or external specialists to attend its meetings, which is regularly
the case. The IRC met four times in 2012. At each
of two meetings, one Board member was absent.
Most of the meetings lasted approximately half a
day.
d) The Audit Committee (AC) assists the Board of
Directors in its duties with regard to overall
supervision and financial control. It examines the
accounts from the perspective of completeness,
integrity and transparency, verifies their compliance with applicable accounting standards and
external reporting requirements, assesses risk
governance and risk organisation, and monitors
the functional capacity and effectiveness of the
internal control systems (ICS). It monitors the
o perational risks and related risk management
measures, and verifies the independence and
quality of the audits by the internal and external
auditors. It ensures optimal cooperation between
internal and external control units, the AC, the
Chairman and the Group Executive Management. The AC approves the internal audit plan
and assists with the compilation of external audit
plans, examines the results of audits, comments
on them for the attention of the Board of Directors, and may, if necessary, award special audit
assignments. It also prepares the election of the
statutory auditors, and submits the necessary
proposals to the Board of Directors. It verifies
the consistency of auditing activities with any
existing consulting mandates and examines the
overall fee structure. The Chairman may, at their
own request, take part in the meetings in an advisory capacity. The CEO, CFO, representatives
of the external auditors and the head of Internal
Auditing attend its meetings in an advisory
c apacity. The attendance rate was 100% at

meetings held to discuss the financial statements.
In order to deal with specific issues, the Committee may call on internal or external specialists to
attend its meetings, which is regularly the case.
The AC met three times in 2012 with 100% of its
members attending. Most of the meetings lasted
approximately half a day.
The Compensation Committee is also reassuming
the powers involved in
nominating members of
the Board of Directors
and the Group Executive
Management.
‹
47
Governance
The Chairman of the
Board ensures good
corporate governance
and an effective internal
control system.
›
48
The Chairman heads the Board of Directors. He
calls the meetings of the Board, prepares the
agenda for the Board meetings and meetings of
the SGC and NCC, and chairs these meetings.
He prepares the Shareholders’ Meeting and the
invitation to the Shareholders’ Meeting, and also
chairs this meeting. He draws up the strategic objectives that are discussed by the Board of Directors and represents the shareholders in important
strategic projects in consultation with the CEO.
He ensures that shareholders receive timely and
correct information on the Group’s business operations and nurtures relationships with large investors. Together with the other executive bodies
of the Group, the Chairman ensures good corporate governance and an effective internal control
system. He serves as line manager to the CEO
and acts in consultation with the CEO whenever
possible. He and the CEO prepare the CEO’s annual agreement on objectives, and he assesses
the CEO’s performance every year. The Chairman may take part in important meetings of the
Group Executive Management as a guest; to this
end he receives the agenda and accompanying
documents for all meetings. He manages the
Group’s internal audit team as well as the head
of the secretariat in hierarchical as well as
p ractical terms, assesses requests for information, meetings or inspection of documents from
members of the Board of Directors as well as
their acceptance of new board or similar mand
ates (the Strategy and Governance Committee
decides on such mandates of the Chairman),
signs Commercial Register applications and
h andles other tasks delegated to him by the

Board of Directors. He may at all times inspect
any and all documents.
may also be passed by circular letter, which, however, did not happen in 2012. As a rule, all members of the Board of Directors and (in an advisory
capacity) all members of the Group Executive
Management attend its meetings. In the reporting
year, four half-day meetings were held as well as
a two-day seminar, one in the absence of one
director and two more in the absence of two

directors. All the members of the Group Executive
M anagement attended all meetings. In order to
deal with specific issues, it may call on specialists
to attend its meetings, which is regularly the case.
Members of the Board of Directors and all execut
ive bodies are obliged to abstain if business is
b eing dealt with that involves their own interests
or the interests of related parties (natural persons
or legal entities).
Full Board of Directors
The Board of Directors convenes as often as business requires, though as a rule five to six times a
year. Most of its meetings, which usually last
half a day, are held at the Group head office in
St Gallen and the executive seminar, which usually lasts two days, is generally held at the premises
of a subsidiary abroad. The Board of Directors is
quorate if the majority of its members are present.
Its resolutions are carried with a majority of the
votes of the members in attendance. Resolutions
Appendix I of the organisational regulations contains a detailed description of the division of
powers between the Board of Directors, the Board
Committees and the Group Executive Management:
www.helvetia.com/en/gruppe/governance.
3.6 Delineation of powers
The Board of Directors possesses the following
powers based on its inalienable and non-transferable duties stipulated in the provisions of
Swiss company law, the articles of incorporation
and the internal organisational regulations of the
Helvetia Group:
–overall management of the Group;
–definition of the organisational principles;
–definition of the structure and principles of accounting, financial control and financial planning;
–appointment and dismissal of members of the
Group Executive Management;
–overall supervision of the management of the
Group’s business activities;
–preparation of the Annual Report;
–preparation of the Shareholders’ Meeting;
–implementation of its resolutions; and
–approval of major legal transactions.
Governance
3.7 Information and control tools
The Board of Directors is kept up to date in a
variety of ways concerning the activities of

H elvetia, its course of business and trends in the
market. At its meetings, it requests information
concerning:
–content and outcome of matters dealt with
by the various Board Committees, including
all resolutions and proposals – all committees are required to submit copies of their
minutes without delay;
–course of business and market trends, to be
provided by the CEO and the individual national managers and division heads, as well
as the main projects, to be provided by the
persons responsible, as necessary;
–status of compliance with budget and other
annual objectives as well as strategic plan
values for several years;
–results and findings of the audits conducted
by the external and internal auditors which
are in particular discussed by the Audit
Committee and recorded in its minutes;
–the most important strategic, financial and
operational risks, any changes to them and
risk management measures that have been
taken or are planned;
–compliance with legal and regulatory provisions and internal regulations;
–
significant developments and events that
could influence the interests of stakeholders,
spontaneously on the occurrence of special
events, otherwise in a detailed annual report and a condensed interim report.
Every month, the members of the Board of
D irectors receive key data concerning the

course of business. They also periodically
receive reports on current issues relating to

g overnance as well as selected analyses and
situation reports concerning market trends,
market players and noteworthy occurrences.
The regular reports submitted to the Board of
Directors and its committees are listed in
A ppendix I of the organisational regulations:
www.helvetia.com/en/gruppe/governance.
ation concerning all matters pertaining to
the Group. Outside of meetings, every member
of the Board of Directors may ask the Group
E xecutive Management to provide information
about the general course of business or the
course of specific business cases, and / or may
inspect any business documents as required.
The Board of D
irectors also has the Internal
A udit unit at its disposal as an auditing and
s upervisory body that monitors compliance

with legal and regulatory provisions, internal
guidelines and directives systematically, purposefully and in a risk-oriented manner. It also
receives reports concerning the general development and specific activities of Helvetia in the
areas of corporate governance and compliance.
4. Group Executive Management
See also pages 14 to 17.
The Board of Directors
is kept up to date on a
regular basis concerning
the activities of Helvetia,
its course of business and
trends in the market.
‹
4.1 Members of the Group Executive
Management
The members of the Group Executive Management are presented on pages 16 and 17. The
Group Executive Management of the Helvetia
Group has been chaired by Stefan Loacker since
1 September 2007. Together with division heads
at Group level and the management boards of
the country markets, he is responsible for the
o perational management of the Group. For

f urther details, please refer to pages 14 and 15.
4.2 Other activities and interests
See pages 16 and 17.
4.3 Management contracts
There are no management contracts with external parties that have to be disclosed.
5. Co-determination rights
of shareholders
Helvetia observes the principle of equal treatment of shareholders.
At the meetings, every member of the Board of
Directors may ask other members and members
of the Group Executive Management for inform
49
Governance
At the 2012 Shareholders’
Meeting, no shareholder
represented more than
10% of the voting
rights, except for the
pool member Patria
Genossenschaft.
›
5.1 Voting right restrictions
and proxy voting
Certain restrictions on voting rights that are identical to restrictions relating to the transferability
of registered shares of Helvetia Holding AG are
described in section 2 above.
The Board of Directors specifies the rules that
govern participation in the Shareholders’ Meeting and the determination of voting rights. For
representatives of executive bodies, independent
voting rights and custody proxies (who do not
necessarily have to be shareholders themselves),
it may stipulate regulations that deviate from the
restriction of proxy voting to 10% of the share
capital.
At the 2012 Shareholders’ Meeting, no individual shareholder or group of shareholders consisting of pool members with voting rights represented more than 10% of the voting rights, except
for the Patria Genossenschaft. No specific exceptions with respect to voting right restrictions
or proxy voting were granted in the reporting
year.
Shareholders who possess voting rights but
who do not attend the Shareholders’ Meeting
may assign their voting rights to a third party
(who does not necessarily have to be a shareholder) by means of a written power of attorney.
However, he or she may only represent the voting rights of third parties if, together with his or
her own shares, they do not exceed 10% of the
total share capital. Here, too, shareholders who
are connected to each other by way of capital or
votes or by united management or in any other
form count as one shareholder.
5.2 Statutory quorum
The Shareholders’ Meeting is quorate regardless
of the number of shareholders in attendance and
votes represented by proxy. Unless stipulated
otherwise by legal provisions or the articles of
incorporation, the Shareholders’ Meeting passes
resolutions by an absolute majority of the votes
cast. In addition to the resolutions cited in Art. 704
par. 1 of the Swiss Code of Obligations, a twothirds majority of represented votes is required for
amendments to the articles of incorporation, the
premature termination of office of more than one
member of the Board of Directors, and the liquidation of the company. The exceptions for the
50
P atria Genossenschaft as individual shareholder
and for the group of pool members mentioned in
5.1 also apply here.
5.3 Convening the Shareholders’
Meeting
The Shareholders’ Meeting is convened by the
Board of Directors, or, if necessary, by the statutory auditors. Liquidators and representatives of
creditors also have the right to call a meeting.
As a rule, the Ordinary Shareholders’ Meeting is held in April/May, but at the latest within
six months after the end of the financial year.
E xtraordinary Shareholders’ Meetings are convened as necessary.
Shareholders with voting rights who together
represent at least 10% of the share capital may
request a Shareholders’ Meeting in writing, stating the items on the agenda and the motions to
be put forward. Each shareholder receives a personal invitation no later than 20 days before the
meeting, including a detailed agenda, a brief explanation of the motions to be put forward, plus
other explanations concerning significant occurrences in the reporting year. The items on the
agenda are also published in various Swiss
newspapers and in the electronic media.
5.4 Addition of items to the agenda
Shareholders with voting rights who together represent shares with the nominal value of at least
CHF 2,000 may request the addition of items to the
agenda in writing, stating the motions to be put forward, no later than 45 days before the Shareholders’ Meeting.
5.5 Registration of shares
The right to attend the Shareholders’ Meeting
(19 April 2013) and exercise voting rights is
reserved for persons who were registered in the
share register as shareholders with voting rights
as of the cut-off date (9 April 2013) specified by
the Board of Directors and announced in the
Swiss Commercial Gazette and various other
newspapers. In exceptional cases, guest tickets
for the Shareholders’ Meeting may be issued, but
holders of such tickets do not have any voting
rights. Every share registered in the register
entitles the holder to cast one vote.
Governance
6. Change in control and protection
measures
6.1 Obligation to announce takeover
bids
Art. 26 of the articles of incorporation states
that the obligation to announce a takeover bid in
accordance with Art. 32 of the Stock Exchange
Act only applies if a shareholder acquires 40%
or more of the voting rights.
6.2 Clauses regulating a change
in control
Employment contracts of Helvetia do not contain
any agreements regarding a change in control.
The practice of “golden parachutes” does not
a pply at Helvetia. Normal periods of notice

apply (maximum 12 months for members of the
Group Executive Management, 6 months for
o ther managerial staff), during which the rules
for contractual and variable salary arrangements remain applicable.
7. Statutory auditors
7.1 Duration of terms of office and
tenure of office of lead auditor
The independent auditors KPMG AG, Zurich,
have served as the auditors of Helvetia Holding
AG and its consolidated subsidiaries since 2005.
The statutory auditors’ terms of office must be renewed by the Shareholders’ Meeting every year.
The KPMG AG audit team for financial year
2012 consisted of:
–Philipp Rickert (since 2012), Swiss Certified
Accountant, Partner Audit Financial Services,
lead auditor;
–Ian Sutcliffe, Swiss Certified Accountant, Director Audit Financial Services.
7.2 Audit fees
In the reporting year, the fees charged by the auditors amounted to: CHF 2,704,455.00.
7.4 Supervision and control of audit
a) External auditors
The Audit Committee prepares the election of the
statutory auditors. It supervises and assesses
their activities, predominantly by means of the external auditors’ reports on audit results, the reporting process, decisions, for example on IFRS
issues, and statements in the local audits. Important findings are summarised in a management
letter.
b) Internal auditors
In addition to an external auditor, the Helvetia
Group has an internal auditing department that
reports directly to the Audit Committee and the
Chairman of the Board of Directors. The Head of
Internal Audit reports directly to the Chairman of
the Board of Directors. This reinforces the independence of the internal auditors.
c) External and internal auditors
Representatives of the external auditors and the
Head of Internal Audit attend meetings of the
Audit Committee in an advisory capacity. Copies
of the minutes are sent to all the members of the
Board of Directors. Reports on the activities of
the Audit Committee are provided at the meetings of the full Board of Directors. In the reporting year, three meetings were held and the external auditors attended all three meetings. Discussions between the external auditors, the Chairman of the Board of Directors, the Chairman of
the Audit Committee, the CEO and the CFO take
place annually. Meetings or an exchange of experience with specialists from the areas of Group
finance, corporate finance and risk management, legal and compliance, general secretariat
and corporate governance are held periodically.
The external and internal audit teams also liaise
frequently regarding issues such as audit planning, audits and results as well as current problems.
In reporting year 2012,
KPMG acted as the
external auditor with a
new lead auditor.
‹
7.3 Fees for additional consultancy
services
CHF 132,803.00.
These fees primarily concern services associated with legal and tax consultancy.
51
Governance
Services prior to the
Shareholders’ Meeting
can now be processed
by shareholders via the
Internet.
›
52
8. Information policy
As a rule, Helvetia provides its shareholders with
information twice a year as part of the periodic
reporting on annual and interim results in the
form of a detailed letter to the shareholders. This
letter deals with a variety of current issues,
i ncluding strategy, market positioning and

b usiness policy. Furthermore, our website (www.
helvetia.com) contains additional current and
archived information about the Helvetia Group,
on topics such as corporate governance, Group
structure and strategy, employees, sponsorship
and history as well as investor information, such
as key figures, equity story, bonds, rating, annual and interim reports and Helvetia shares including current share price trends. In addition, further
publications, media releases and important
dates can be found here. Those interested have
the opportunity to register online to receive the
latest information on the company and to request
particular publications.
Helvetia periodically meets with institutional
investors and presents the published financial results at special road shows. Our Investor Relations team will be pleased to assist with any personal enquiries (contact details are indicated at
the end of this report as well as on our homepage).
From this year, prior to the Shareholders’
Meeting shareholders will have the option of
p aperless communication with the share register
of Helvetia. Services such as ordering admission
cards, notices to Helvetia, valid granting of
p roxies, or corrections of data can be processed
online. Access is via www.shapp.ch.
Governance
Compensation report ‹
Compensation report
Helvetia’s compensation principles are simple, transparent and
geared to the long term. They take account of the interests of the
customers, employees and shareholders, and are designed to
enhance the insurance group’s sustained success.
The compensation report for the shareholders of
Helvetia Holding AG and interested third parties
consists of two parts. This section describes the

general principles and essential features and criteria
of the compensation concept and participation rights
as well as the loan terms and conditions for members
of the Board of Directors and the Group and Switzerland Executive Management teams. It provides an
overview of the philosophy, guiding principles and
processes pertaining to the compensation paid by
Helvetia that apply to all operational and management levels for performance-related pay. This represents part I of the compensation report. The application of the general principles in the financial year and
the specific compensation are set out in the Financial
Report under section 14 (page 166) “Share-based
compensation” and section 16 “Compensation paid
to the Board of Directors and the Group Executive
Management” from page 168 et seq. This represents
part II of the compensation report. Both parts comply
with the requirements of the Corporate Governance
Guidelines, the Swiss Code of Best Practice for
Corporate Governance, the FINMA (Swiss Financial
Market Supervisory Authority) Circular 2010/1 on
Remuneration Schemes and the Swiss Code of
Obligations.
General compensation principles
The Helvetia Group applies a multi-level and yet
transparent compensation system for all employees
in Switzerland as well as its governing and executive
bodies (Board of Directors and Group Executive
Management). As shown below, this system is composed of fixed and variable salary components. At
Helvetia, compensation is deliberately fixed so that:
–it is simple, transparent and comprehensible, and
fair and appropriate for the members of the Board
of Directors and Group Executive Management,
and for all managers and employees. Those who
do good work should also be paid well;
–it takes account of the responsibility carried by the
function holder, the quality of his or her work and
the effort and time involved in carrying out the
work;
–there is an appropriate relationship between the
fixed and variable salary components to ensure
that the variable compensation is not so high that
it has a negative impact on employees‘ risk tolerance and motivates them to focus on short-term
criteria only;
–it is function-appropriate and shaped to a considerable extent by individual objectives and the
overall result of the company;
Helvetia remuneration model
Board of Directors
All employees in Switzerland
Fixed component
Basic salary
– Board of Directors:
standard basic salary
(exception: Chairman of Board
of Directors) with allowances
for serving on committees and
meeting attendance fees (cash)
Variable component
Long-term salary
component
(LTC) as % of
basic salary
Long-term investment
instrument (shares)
Results-based
salary
component
as % of
basic salary
Compensation paid
in dependence of
the general business
performance (cash)
Individual
objective
attainment
as % of basic
salary
Variable salary
component based on
personal objective
attainment (cash)
– ExM and employees:
fixed salary based on individual
function (position, skills,
responsibility, etc.) incl. fringe
benefits (cash)
53
Governance
› Compensation report The Compensation
Committee reviews the
compensation concept
annually to ensure that it
is appropriate and in line
with the market.
›
–it is reasonable and competitive compared to the
salaries paid by other companies in the same labour market and business sector; and
–it is reasonable when the lowest and highest salaries within Helvetia are compared.
tion Committee uses a criteria matrix to assess the results-based objective achievement; this matrix is discussed in detail below in conjunction with the longterm salary component (LTC) that has been in force
since 2010.
The Board of Directors is in charge of general
compensation issues and compensation models.
It is supported in its work by the Compensation
Committee. The delineation of powers for
compensation questions is defined in Appendix I
of the organisational regulations: www.helvetia.
com/en/gruppe/governance.
Other compensation components
Helvetia also offers employee benefits packages,
which are attractive in a market comparison, to all
its employees and managerial staff. The employee
benefits insurance provides employees and their
dependants with the assurance that they will be
financially secure on retirement or if they should
become sick or disabled or in the event of death
in a way that employees who work for a first-class
pension provider can expect to be.
Helvetia’s compensation systems as well as the
employee benefits programmes, some of which can
be optimised at an individual level, have proved
themselves; they are correct and fair, balanced and
competitive, and the amounts that are paid can be
justified at all times.
Fixed salary components
The Compensation Committee defines the principles
on which compensation decisions are based. In the
fourth quarter of every year, the Compensation
Committee reviews the compensation concepts to ensure that they are still appropriate and in line with the
market. At the same meeting, the Compensation
Committee also determines the fixed salaries of the
members of the Group Executive Management for
the next financial year. The Board of Directors is informed of the details at the next meeting of the full
Board of Directors. Any amendments to the compensation regulations of the Board of Directors that are
discussed at this meeting must be approved by the full
Board of Directors.
The Compensation Committee uses different
documents as the basis for its review of the market re
silience and appropriateness of the fixed salary components. For example, renowned independent institutes are commissioned from time to time to prepare
comparative studies that can serve as a benchmark.
The compensation reports of comparable competitors are also analysed, and publications by different
interest groups such as “Ethos”, information obtained
from advisors specialising in personnel issues and
audits, and articles that appeared in the media also
provide an important basis for comparison.
Variable salary components
The variable salary components of the members of
the Board of Directors, Group Executive Management – and all Helvetia employees in Switzerland –
are determined by the Compensation Committee during the first quarter of every year once the key figures
for the past financial year and the individual objective attainment results are available. The Compensa-
54
1. Board of Directors
The compensation principles and individual
components of the compensation concept as well
as the procedure used for determining perform
ance-related compensation are set out in the
compensation regulations issued by the full Board
of Directors.
The compensation paid to the members of the
Board of Directors consists of the following simple
and transparent components, whereby the fixed cash
component is the largest component by far:
a) Fixed salary
All members of the Board of Directors receive the
same basic fixed salary determined in advance, except for the Chairman whose salary is higher. The
Vice-Chairman and the chairmen and members of
the committees also receive an allowance in addition
to their basic salary. This compensation takes
account of the responsibility and specific functions
of each of the individual Board members. The
compensation for each individual Board member
calculated in this way is paid out in cash. When a
director leaves the Board, compensation is paid on
a pro rata basis up to the end of the month in which
he or she leaves the Board of Directors. The fee for a
new Board member is also calculated pro rata.
Governance
b) Variable compensation
The variable compensation paid to a Board member
is calculated based on a reference value of 30% of
the fixed compensation. This reference figure is multiplied by the degree of objective attainment that applies to the LTC (for the calculation of the degree of
objective attainment, see the explanations on the LTC
below). The Board member is then allocated a prospective number of shares (deferred shares) for this
amount. The relevant share price is calculated as the
average of the stock exchange prices for Helvetia
Holding shares for five consecutive trading days from
the day on which the business result is announced.
Ownership of the resulting number of shares is transferred after three years. When a director leaves the
Board, the LTC is paid on a pro rata basis up to the
end of the month in which he or she leaves the Board
of Directors.
c) Meeting attendance fees
Board members were paid an attendance fee for
every meeting until 31 December 2012. From 1 Janua
ry 2013, this attendance fee will be reflected in a
flat one-off adjustment to the fixed compensation
and the allowance for membership of committees.
d) Expenses
The members of the Board of Directors did not receive any lump-sum expenses allowances for 2012.
From 2013, lump-sum expenses allowances will be
paid in amounts acceptable to the tax authorities.
Costs for accommodation at the place where a meeting takes place and for foreign trips are paid by the
company.
e) Shares and options
The variable compensation is paid to the members of
the Board of Directors in the form of shares (see b).
Board members do not participate in any employee
share purchase plans and also did not participate in
any previous share option programmes.
f) Severance pay, loans and discounts
No severance payments are granted. Loans are
granted at usual market conditions. Board members
also do not benefit from any discounts (premium discounts, etc.) that are offered to Helvetia employees.
2. Group Executive Management
The compensation of the members of the Group
Executive Management comprises the components
described below:
The Group Executive
Management compensation
consists of a fixed
compensation component
and a performance-based
variable compensation
component.
a) Fixed salary
The members of Group Executive Management are
paid a fixed salary in cash which is determined ‹
every year by the Compensation Committee. This
salary is determined on an individual basis in accordance with the aforementioned criteria and takes
account of the function and level of responsibility of
the individual member of Group Executive Management. It also includes all child or education allowances and anniversary bonuses.
b) Variable compensation
The definitive amount of the variable compensation
is dependent on the following three factors:
Individual objective attainment (20% of fixed compensation): This reference figure is multiplied by the degree of attainment of the personal objectives agreed
with the line manager in advance. The result of this
multiplication is paid out to the member of Group
Executive Management in cash. The individual objectives of a member of Group Executive Management
can include quantitative and / or qualitative comp
onents and depend on his or her operational respons
ibility. Compensation for individual objective attainment is due to the Group Executive Management
member regardless of the general business result.
Results-based component (reference figure: 20% of
fixed compensation): This compensation component
based on the annual result is multiplied by the degree
of objective attainment (the degree of objective
attainment can range from 0% to 125%), which in
each case also applies for establishing the resultsbased variable compensation for all employees in
Switzerland. The resulting amount is paid out to the
member of Group Executive Management in cash.
The amount of the results-based compensation is
based on the operating result and the achievement
of the budget goals set for the respective financial
year.
55
Governance
› Compensation report Part of the variable
compensation is paid in
the form of shares. These
only pass into the ownership of the members of
the Executive Management after three years.
›
Long-term results-based compensation components
(LTC; reference figure: up to no more than 40% of
fixed compensation): This forward-looking salary
component is multiplied by the degree of strategic
objective attainment. In contrast to the regular resultsbased salary component, the amount calculated in
this way is not paid out to the Executive Management
member in cash, but in the form of a deferred claim
to a certain number of shares. The relevant share
price is calculated as the average of the stock exchange prices for Helvetia Holding shares for five
consecutive trading days from the day on which the
business result is announced. This number of shares
is transferred to the ownership of the Executive Management member after three years, provided that
there were no negative developments in this period
that were triggered in the reporting year and can be
attributed to the conduct of the Executive Management member in question. If the person in question
leaves the Executive Management, his or her deferred claim lapses as follows: cancellation of all
claims for the year in which notice of termination was
given, cancellation of one half of the claims for the
first preceding year and no cancellation of any
claims from the second preceding year. This concept
establishes a direct link between the members of Executive Management and the long-term development
ositive or negative
of the company in two ways: p
share price trends over the three-year period and the
possibility that the number of allocated shares can be
reduced retroactively.
The degree to which strategic objectives have been
attained (ranging between 0 and 125%) is fixed annually during the first quarter following the end of a
financial year by the Compensation Committee of the
Board of Directors on the basis of the following criteria:
– Profit: The reference figure is the annually reported
Group profit for the period relative to the budget.
– Growth: The reference figure is the growth in business volume in the active business lines relative to
the relevant market segment achieved in the financial year.
– Risk-adjusted return: The calculation is based on the
return on equity (ROE) in the reporting year relative
56
to the important sector-relevant solvency figures.
– Shareholder value: The reference figure is the performance of Helvetia registered shares compared
with the performance of the DJ European Insurance
SXIE (index of European insurance stocks).
Compensation for Executive Management
max.
40%
20%
Reference figure 80%
of fixed component
0–
0–1
20%
Fixed component (cash)
+
12
5%
25%
0 – 100 %
Variable component
Long-term salary component
(deferred shares)
Dependent on business
performance (cash)
Individual objective
attainment (cash)
For the LTC (Executive Management Group and
Switzerland, and Board of Directors), there is an
additional restriction in that no deferred shares
are allocated if the Group as a whole reports a
loss, and/or the solvency figures are insufficient.
The final degree of objective attainment (LTC,
results-based component) as calculated by the
Compensation Committee of the Board of Directors, is multiplied by the respective target figure
(percentage of the fixed compensation). The results-based component calculated in this way and
the result of the individual objective attainment
together comprise the variable salary of the employees and the Executive Management Group
and Switzerland.
These variable compensation components (individual, results-based and LTC) are an important
feature of Helvetia’s performance culture, under
which every individual employee is compensated according to the quality and quantity of his or
her work as well as his or her responsibility and
workload and also the result achieved by the com-
Governance
pany as a whole. The variable components are
paid out in cash and only the LTC is paid in the
form of deferred shares.
c) Expenses and benefits in kind
The payment of expenses is governed by written
r

e gu
lations. The members of Group Executive
Management are entitled to a Helvetia company car
which they may also use for private purposes for a
fixed fee. The employer does not grant any other
benefits in kind.
d) Shares and options
The members of the Group Executive Management
can, on a voluntary basis, acquire the maximum number of shares available to them under the employee
share purchase plan. The same conditions apply as
for all other employees of Helvetia in Switzerland (see
section 3). They therefore also benefit from a discount
of 16.038% which is granted because these shares
are blocked for three years. There have not been any
share option programmes since 2003.
3. Helvetia employees in Switzerland:
share purchase plan
In 2005, an employee share purchase plan was introduced in Switzerland to allow employees to participate in the performance of Helvetia and thus to
strengthen their personal ties to the company. Employees can purchase registered shares of the
Helvetia Holding AG at reduced prices. The number
of available shares is specified by the Board of Directors, taking account of the financial results and the
functions of the employees concerned. The purchase
price is calculated on the basis of the average stock
market price during the five trading days following
the publication of the financial results. Participation
in this scheme is voluntary. As these shares are subject to a mandatory vesting period of three years,
they can be sold by the company at a tax-exempt discount of 16.038%. The members of the Executive
Management can also take part in this programme,
but the members of the Board of Directors may not.
The share purchase plan is not open to employees
abroad.
The share purchase
plan allows employees
to participate in the
performance of Helvetia
and thus strengthens
their personal ties to the
company.
‹
e) Severance pay and loans
No severance payments are granted. Loans are granted at usual market conditions.
f) Pension benefits
The employer’s annual contributions to pension funds
are governed by the pension fund regulations. No extraordinary benefits were paid.
Local Executive Managements
Analogous compensation regulations apply as described above for the Executive Management Switz
erland as for Group Executive Management. The
Executive Management abroad is compensated

according to the local market conditions governing
the compensation systems. The local compensation
systems can include fixed and variable salary components. At Group level, the members of the local
Executive Management abroad are also paid a

results-based bonus in the form of shares, based on
a reference figure of 10% of the local basic salary.
The reference figure is also multiplied by the LTC
degree of objective attainment. This Group bonus
has been designed to promote the sense of belonging to the Group of the Executive Management teams
abroad.
57
Governance
“Solidarity means standing up for
each other when a claim is made.
But solidarity also means being
tolerant of different ways of life.”
58
Rolf Abelmann, 37, Germany
“House building in 2010 was an unbelievably excit
ing and intense time. Many long-term decisions had
to be made within a short period of time“, said Rolf
Abelmann, General Manager of a packaging mar
ket research company. The father of two likes things
to be uncomplicated and individualised. Just like
most of his neighbours. For three years, Rolf Abel
mann has known the importance and value of good
neighbourly relations built on tolerance. “Knowing
you can count on the solidarity of your neighbours
as well as tailor-made financial insurance protection
gives you comfort.“
18% more profit in 2012 thanks to our customers, employees
and shareholders. They are the driving force and the beneficiaries of our increased earnings power.
60
Geschäftsentwicklung
Gruppenergebnis ‹
62 Group result
65 Investments
67 Business units
67 Switzerland
68 Germany
70 Italy
71 Spain
72 Austria
74 France
75 Assumed reinsurance
› Group result
Helvetia Group is pleased to present a solid performance report for
financial year 2012. 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.
Group result
Profit development
in CHF million
500
400
300
200
100
0
2008 2009 2010 2011 2012
At CHF 342.2 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 180.6 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 139.5 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 CHF million
Gross premiums life
4 258.6
– 0.8
4 201.4
149.8
261.2
0.7
2 412.4
2 431.8
Business volume for direct
insurance
– 1.8
6 763.6
6 951.6
Assumed reinsurance
– 2.5
214.9
220.5
– 1.8
6 978.5
7 172.1
Business volume
2011
– 41.4
Deposits received life
62
2012
in local currency (LC)
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 Assicura
zioni at the end of 2012, will also be noticeable at
Group level in 2013. The effect of SEV Versiche
rungen 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 139.5 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 180.6
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%.
The robust capital position was further solidified
in the reporting year.
‹
Profit by business area
2012
2011
Life
139.5
155.2
Non-life
180.6
135.5
22.1
– 0.8
342.2
289.9
in CHF million
Other activities
Group profit
63
› Business activities
Business activities
The operating business
areas showed a solid
performance in 2012.
›
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 gener
ated a return of 16.2% (previous year: 2.8%),
driven by positive economic variations. The
e mbedded value calculation is discussed in

d etail on pages 212 to 214 of the Annual Report.
Non-life business impresses
With a profit increase of over 33.4% to CHF 180.6
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
Business volume non-life
Business volume life
Growth %
Growth %
in CHF million
in CHF million
Switzerland
2012
in LC
– 0.8
795.5
7.7
556.8
Italy
– 4.1
486.4
675.4
Spain
– 4.8
276.2
– 1.7
125.6
Austria
2.3
184.6
10.4
113.7
France
13.7
112.9
– 3.1
4 351.2
0.7
2 412.4
in LC
Switzerland
– 3.8
3 182.9
Germany
– 4.1
253.6
Italy
– 2.0
Spain
Austria
Total
64
2012
Germany
Total
Investments ‹
Investments
Combined ratio
in %
0
20
Group
direct
64.8
CH
56.7
40
60
67.1
58.6
DE
67.1
80
ES
85.0
28.3
86.0
27.4
30.7
31.6
97.8
107.4
27.0
98.7
71.8
26.6
98.4
67.9
70.6
67.7
FR
93.5
95.6
71.7
70.0
AT
120
28.5
75.8
IT
100
28.7
25.0
92.9
25.0
95.0
32.9
103.5
32.0
99.7
62.0
32.2
94.2
60.5
33.1
93.6
Net claims ratio 2012
Net claims ratio 2011
Net cost ratio 2012
Net cost ratio 2011
Group level in the previous year, thanks to tight cost
management, was at the same level in the reporting
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 were reported in 2011.
Further details on the country results and their
premium, claims and cost developments will be explained in the subsequent pages.
In the past year, investment markets had a much
more positive performance than expected in view
of the unresolved debt crisis in Europe, the lack
lustre 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 679.8
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 fu-
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.
‹
65
› Investments
tures. 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.
All asset classes – equities,
bonds, mortgages and
real estate – contributed
significantly to the strong
result.
›
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 signifi-
cantly higher than in the previous year. Despite
markedly lower market interest rates, the direct yield
of 2.8% represented a drop of only 0.1 percentage
point 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 pos
sible 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
Share in %
22 526.6
59%
in CHF million
Bonds
1 580.7
4%
603.4
2%
Mortgages
3 687.0
10%
Loans
1 376.4
4%
Investment property
4 893.3
13%
Money market instruments, associates
1 110.3
3%
Unit-linked investments
1 955.5
5%
37 733.2
100%
Shares
Investment funds, alternative investments, derivatives
Total Investments
Performance of Group investments
2012
2011
Current income from Group financial assets
761.9
755.8
Rental income from Group investment property
198.0
183.1
Current income from Group investments (net)
959.9
938.9
Gains and losses on Group financial assets
180.8
– 196.5
in CHF million
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
66
37.1
136.0
217.9
– 60.5
1 177.8
878.4
679.8
292.5
1 857.6
1 170.9
34 318.3
32 284.8
Direct yield
2.8%
2.9%
5.5%
3.6%
Business units ‹
Business units
lowed by a phase of consolidation in 2012.
Nevertheless, the premium volume at CHF 3,978.4
million was almost maintained at prior-year levels
despite the onward sale of the accident / health

insurance business and a selective underwriting

policy in occupational benefits group life insurance.
All the business units of Helvetia Group posted
robust results in financial year 2012. The insurance
technical results of the units were consistently sound.
The foreign units made a significantly higher con
tribution to the consolidated result despite the current difficult economic environment in the individual
country markets, resulting in an 18% increase in
profit.
The performance of the euro had an impact
again in the reporting year. In 2012, the impact of
exchange rates again muted growth of the foreign
units when reported in Swiss francs by about 2%.
Unless otherwise stated, the growth rates provided
reflect growth in local currency, while volumes are
reported in CHF.
A Group-wide improvement in the practice of
calculating reserves to cover uncertainties in claims
development was implemented, as previously
planned, in 2012. The combined ratios reported
for financial years 2011 and 2012 were calculated
according to the new method with only a minor
impact on the key figures. See 2.3 concerning this
on page 98.
Solid life business
The life business was marked by a solid portfolio
development and good technical results. In addition to our own sales force, Raiffeisen and selected
brokers particularly contributed to the business
expansion. In the individual life business, Helvetia
Switzerland achieved a premium volume of
CHF 847.8 million and reported an 11.4% growth
compared to the previous year. With the acquisition of the portfolio of SEV Versicherungen (SEVV)
regular premiums increased by 2.4% in this business line. Thanks to the Value Trend II tranche
product, there was a further surge in growth in the
single premium business; an underwriting volume
of over CHF 140 million was generated within a
short period. Solid growth was reported also in
unit-linked insurance thanks to the Helvetia guarantee plan. In the single premium business premiums
increased overall by 21.9%, regular premiums
increased by 2.5% in total.
Switzerland
Demand for full insurance solutions in the group
life insurance business was as strong as ever in
2012. Our existing portfolio contributed to a 3.7%
growth in regular premiums. In view of the low prevailing interest rates, however, Helvetia was deliberately more selective in this line of business. This
Switzerland
The Swiss business again showed itself to be a solid
pillar of the Helvetia Group in 2012. Thus, thanks to
continued robust technical results and solid investment returns, the profit amounted to CHF 237.5 million, corresponding to an 8.9% decline primarily attributable to strengthened reserves in the life business. The strong growth of the previous year was fol-
Segment results after tax
in CHF million
Switzerland
Germany
Italy
Spain
Other
insurance units1
Corporate
Group
360
270
180
90
0
237261
31.12.2012
1
27 –18
17 5
21 24
42 41
–2 –23
342290
31.12.2011
This segment includes Austria, France and Reinsurance
67
› Business units
led to a total decrease in volume of almost 9% in
the group life business which, however, was almost
completely compensated by successful sales in the
individual life business.
Thanks to our prudent investment and under
writing policy, the technical and investment results
had a pleasing development across the board. In
light of the continued low interest rates and demographic developments, this allowed us once again
to strengthen our reserves.
Germany
Profitable non-life business
Gross premiums in the non-life business decreased
slightly by 0.8% to CHF 795.5 million compared to
the previous year as a result of the successful onward sale of the health / accident insurance portfolio acquired as part of the acquisition of Alba and
Phenix. Organic growth in ongoing business
amounted to a gratifying 2.9%. Premium volumes
increased in all business lines. Accordingly, the expected decrease in premiums from the Alba and
Phenix portfolios acquired in 2010 hardly happened. In addition, investment in the training of our
sales force and in external distribution channels
had increasingly positive effects.
The net combined ratio of Switzerland is at an
outstanding level again. At 85.0%, it was, despite
hailstorms and individual large claims, one percentage point lower than in the previous year. The cost
ratio increased slightly from 27.4% to 28.3% as a
result of the discontinuation of the accident / health
insurance business with generally lower cost ratios.
The Helvetia youth insurance for people between 14 and 25 years of age launched in April
2011 had a gratifying development as it was in
high demand and, as intended, contributed to rejuvenating Helvetia’s customer base.
Successful acquisitions
The integration of Alba and Phenix acquired in
2010 was concluded in 2012. With the acquisition
of the portfolio of SEVV, Helvetia not only had a
surge in growth in the individual life business but at
the same time, with about 45,000 members of the
“SEV Transport Workers’ Union” (Gewerkschaft des
Verkehrspersonals), also gained access to potential
in terms of cross-selling opportunities for non-life
products. The product range should be developed
and renewed both in the property and life insurance business.
Germany
With a volume of CHF 810.4 million, Helvetia
Germany had a 3.7% growth in local currency
(in CHF due to exchange rate differences: 1.4%) in
financial year 2012. It reported a solid increase in
the non-life business, while there was a decline
in the life business compared to the previous year.
In particular the German business’s contribution to
the result of CHF 26.8 million was a pleasing
development. Further cost savings, an improved
claims experience and a higher investment result
had a favourable effect. The steps we took to
reduce risk and strengthen the earnings power that
were launched in the previous year in the non-life
business are showing their first positive effects.
Growth in life business down due to
market circumstances
The trend in the life business was subdued in 2012.
Total business volume at CHF 253.6 million declined by 4.1% in local currency (in CHF: –6.3%).
This is due on the one hand to the good end-of-year
Business volume Switzerland non-life
Business volume Switzerland life
Growth %
2012
Property
1.5
378.2
Transport
7.5
27.3
Motor vehicle
5.5
281.9
Liability
0.2
105.3
– 91.2
2.8
– 0.8
795.5
in CHF million
Growth %
2012
in CHF million
Individual life
11.4
847.8
Group life
– 8.9
2 261.5
Unit-linked
14.5
73.6
– 3.8
3 182.9
Total
68
Accident/health
Total
Business units ‹
business in 2011 in the area of single premiums,
which gave rise, as expected, to a downturn in demand at the beginning of the year. On the other
hand, we took a deliberately cautious approach to
the acceptance of larger single premiums in view of
the tense capital market situation and in particular
the low interest rate for low-risk investments. Single
premiums therefore fell by 32.9%. Regular premiums, on the other hand, rose – above the stagnating
market – by 4.0% compared to the previous year.
The 4.4% increase in the area of unit-linked contracts, the most significant portfolio of the German
life business, is gratifying.
Extraordinary charges due to recent case law
and the statutorily required formation of additional
interest rate reserves due to the continued low interest rates were fully compensated for thanks to the
positive development of investment income.
Attention was paid in 2012 to the implementation of the unisex ruling of the European Court of Justice. We adjusted our products as of the reporting
date. Therefore, we still recorded growth stimuli as
of the end of the year due to the demand for old
pricing models. In May 2012, the renowned rating
agency Franke & Bornberg again gave the quality
of the conditions of the unit-linked annuity insurance
CleVesto Allcase its top rating. The sales performance of the broker distribution channel also received an award again. Due to the significant share
of around 80% of the volume of life business at Helvetia Germany, we consider the renewed number
one ranking received in the broker survey carried
out by “Versicherungsmagazin” to be particularly
pleasing and a confirmation of our consistently
good performance.
Rising premiums in the non-life business
In the non-life business, the volume of business
increased markedly by 7.7% in local currency

(in CHF: 5.3%). This corresponds to a volume of
CHF 556.8 million. All business lines contributed to
this positive development. At 15.3% the motor
vehicle business reported the largest growth despite
the first terminations in the fleet business due to restructuring. In addition to new rates, the successful
sales cooperation with ARAG SE in Germany also
contributed to this. Given the stable domestic
economy, the corporate and the transport business,
which recently received an award, also enjoyed
good growth again. Thus, in a survey by “expertennetzwerk”, independent agents chose the Helvetia
transport insurance as number 1 of the most import
ant business partners.
The long-term focus of the product range again
continued to be on managing the earnings-related
growth of Helvetia Germany in 2012. New private
products with a focus on young families were introduced to support growth in this low-risk area. Due
to our earnings-related restructuring measures and
disciplined underwriting policy, slower growth but
better profitability is expected in 2013. The first
fruits of our efforts are already reflected in the most
important profitability indicator in the non-life
business, the combined ratio, for financial year
2012.
The claims experience was marked by an intensi
ve cold period in February and very few large risk
events. At 67.1%, the net claims ratio is significantly
below the figure reported in the previous year, by a
total of 8.7 percentage points. Developments in the
cost area continue to be pleasing. The administra-
Business volume Germany non-life
Business volume Germany life
Growth %
in CHF million
Growth %
in CHF million
2012
in LC
Property
2012
in LC
5.3
272.8
Transport
13.8
50.3
15.3
139.5
Individual life
– 9.9
92.4
Motor vehicle
Group life
– 9.1
53.3
Liability
2.1
62.9
Unit-linked
4.4
107.9
Accident / health
0.0
31.3
– 4.1
253.6
7.7
556.8
Total
Total
69
› Business units
tion cost ratio was reduced by another 0.5 percentage points due to tight cost management and good
sales growth. Thanks to the growth recorded for
business lines that are subject to lower commission
rates, the acquisition cost ratio is 0.4 percentage
points below that of the previous year. The net combined ratio at 97.8% thus represents a significant improvement compared to the previous year.
Growth, profitability and customer loyalty
By continuing the 2015+ strategy period, Helvetia
is laying the foundation for long-term profitable
growth by strengthening its earnings power and
launching new products. The majority of measures
launched in the previous year to reduce risks and
strengthen earnings power due to the high burden
of claims have already been implemented. The sustainable effects of the long-term measures are expected in 2013. As regards customer loyalty, Helvetia Germany continues to do its utmost to ensure
that it receives top marks from its customers and
partners.
Italy
Italy
In view of the difficult economic climate, the result
achieved by Helvetia’s Italian business units is certainly pleasing. The changed demand behaviour of
customers is reflected both in the life and non-life
business. Compared to the heavily declining market
volumes, however, Helvetia succeeded in holding
its ground well. At CHF 1,161.8 million, the exchange-rate-adjusted business volume is 2.9% below (in CHF due to exchange rate differences:
–5.0%) the previous year. The strong increase in
profit to CHF 17.4 million compared to CHF 5.2 million in the previous year is especially gratifying.
This is attributable primarily to a better investment
result. In financial year 2012, we took further
important strategic steps with the acquisition of
majority interest in Chiara Assicurazioni and the
acquisition of the remaining 30% interest in Chiara
Vita.
Life business on track
Compared to the market, for which a double-digit
elvetia
decline is expected for financial year 2012, H
held its ground well with a reduction in v olume of
only 2.0% (in CHF: –4.2%) to CHF 675.4 million.
The premium trends thus improved slightly again
towards the first half of the year. The increase in
demand for traditional insurance solutions across
the board is reflected in the roughly 18% increase.
The successful placement of two index-linked
tranche products sold through the bank distribution
channel of Banco di Desio generated additional
growth momentum in 2012. Owing to the capital
market turbulence, the demand for insurance
solutions where the customer bears the entire investment risk is falling sharply. Accordingly, deposits
from investment contracts fell significantly by about
40%. The renewed upturn in the investment result
and cost-saving measures each contributed to a
positive overall profit trend in the life business.
Initiatives to improve profitability in the life-business
continue to be given priority.
Focus on profitability in the non-life
business
Helvetia Italy has experienced years of strong
growth. In the past three years our Italian non-life
business experienced organic growth of over 10%
thanks to the diverse distribution channels that in-
Business volume Italy non-life
Business volume Italy life
Growth %
in CHF million
Growth %
in CHF million
Individual life
23.1
504.4
Group life
– 11.9
21.2
Deposits
– 41.4
149.8
– 2.0
675.4
Total
70
2012
in LC
2012
in LC
Property
– 12.8
Transport
– 15.0
2.7
– 1.7
295.2
Motor vehicle
Liability
Accident / health
Total
79.5
6.9
39.2
– 8.0
69.8
– 4.1
486.4
Business units ‹
clude independent agents and worksite marketing
agreements with leading group companies. This
growth opens the door for measures to enhance
profitability, which is why in the current recessionary environment we aim for a slower growth in favour of portfolio quality. Due to individual agency
closings and pricing measures as well as the general economic developments, premiums declined by
4.1% (in CHF: –6.2%) to CHF 486.4 million in the
reporting year.
By contrast, the claims situation was positive.
Thanks to selective underwriting and pricing measures, at 71.7% the claims ratio is around the previous year’s level despite heavy snowfall at the beginning of the year and the earthquake in Northern
Italy. The efficient reinsurance coverage, a low

attritional loss and positive margin developments in
the pricing of motor vehicle insurance contributed
significantly to its stabilisation. Consequently, the
net combined ratio is quite stable at 98.7%. It is
only 0.3 percentage points above the previous

year’s level. This is attributable to a slight increase
in the cost ratio.
Further development of the sales network
The distribution agreement with Banco Desio, which
has been in effect since 2008, was extended for an
additional ten years. At the same time, Helvetia increased its interest in Chiara Vita from 70% to
100%. As a result of the acquisition of Chiara Assicurazioni, from 2013, Helvetia will also gain access
in the non-life business to the sales network of Banco di Desio and its partner banks with over 1,000
bank branches in Northern and Central Italy. This
will expand Helvetia’s sales capacity, with a strong
banking sales network for the sale of property insurance. The development of a specialised life sales
team planned for 2013 will complete our distribution channels. The number of agencies should also
be selectively developed after the slowdown in
growth in 2012. There is support for the aim to grow
profitably by focusing on good relationships with
customers and distribution partners as well as
measures to increase efficiency.
Spain
The insurance market remains extremely challenging as Spain’s economy continues to be in a recession. Record-high unemployment figures, declining
purchasing power and consumption place a par
ticular burden on the premium volume in the non-life
business. Compared to the overall market and in
light of these difficult conditions, Helvetia Spain did
well overall, but nevertheless reported a 3.9% decrease in premiums (in CHF due to exchange rate
differences: –6.0%). Thanks to the positive claims
experience in the non-life area and the consistent
implementation of our strategic initiatives, the net
combined ratio improved compared to the previous
year. The overall solid technical development and
the once again higher investment result, however,
did not fully compensate for the depreciation of the
property portfolio in the amount of EUR 13.7 million. The overall result in 2012 is CHF 20.7 million,
and thus 13.0% below the previous year’s result.
Spain
Life business proceeding well
Thanks to the successful launch of attractive tranche
products, unit-linked insurance solutions improved
strongly. This partially compensated for the decline
in risk and traditional life products in the individual
insurance business, which are competing with savings accounts. Thanks to our varied sales channels
and the double-digit increase in sales in funeral expenses insurance, the group business continues to
be a solid growth driver. With a total volume of
CHF 125.6 million, the life business reported only a
slight decline of 1.7% (in CHF: –3.9%) compared to
the previous year. In addition to better investment
income, the good portfolio mix, consisting of s avings
and risk products, as well as improvements in
efficiency, contributed to a positive development in
the life business. Driven by demand for solvent and
safe savings and pension solutions, we will be able
to continue to benefit from our excellent reputation
as a reliable Swiss insurance company.
Non-life business remains profitable
The Spanish non-life business is suffering particularly as a result of the country’s economic difficulties
which is reflected in the 4.8% decline in volume (in
CHF: –6.9%) to CHF 276.2 million. The decline in
purchasing power was noticeable especially in
transactions with business customers and the motor
vehicle insurance business where, besides strong
71
› Business units
Austria
competition, lower average premiums also left their
mark. The only business line that avoided the negative trend was property insurance thanks to the positive developments in private customer business and
the double-digit growth rates of our niche product
in agriculture. The claims ratio declined by 2.1% to
67.9% compared to the previous year especially as
a result of the decline in general claims frequency
and the lack of large risks, while the cost ratio remained stable despite lower premium volumes.
Overall, at 92.9% the net combined ratio is below
the previous year’s level of 95.0%.
Strategy
We spare no effort to ensure that we achieve solid
operating results even in the recessionary market
environment. In order to achieve this goal in the
long term, Helvetia Spain will launch various strategic initiatives in 2013 to support volumes and to
achieve profitability. These include the continued
expansion in economically strong sales regions, targeted cross-selling to affinity groups and improvements in sales management efficiency. In the life
business, we are aiming at particularly strong
growth in the already successful areas of funeral expenses insurance and capital-efficient, unit-linked
life products. In the non-life business, the sale of motor vehicle insurance policies should be supported
by new products and by means of an improved organisational culture with shorter reaction time when
it comes to product development.
Austria
Helvetia Austria reported growth stimuli in nearly
all business lines in financial year 2012. Contrary
to the significant slowdown in premium growth on
the Austrian insurance market, Helvetia’s volumes
rose by 5.3% in local currency (in CHF due to
exchange rate differences: 2.9%) to CHF 298.3
million. In the property / accident insurance business, Helvetia grew in line with the market. In the
life insurance business, Helvetia distinguished itself
from the generally declining market developments
with a significant increase of more than 10%. This
was due in particular to innovative insurance solutions that also successfully counteracted the market
trends in the individual life insurance business. From
a technical perspective, 2012 was not an optimal
year. On the other hand, the Austrian unit also
benefitted from higher investment income.
Counteracting general market trends with
innovation in the life business
The life insurance premium volume reported
very gratifying growth of 10.4% (in CHF: 8.0%) to
CHF 113.7 million in 2012. Helvetia thus defied the
general trend of the Austrian life insurance market
that was already significantly declining for the
second year and proved that growth is possible
with innovative products and sales dynamics even
during difficult economic times. The significant drivers of this growth were, in addition to the successful
single premium business, primarily the fund savings
plan (up 56.3%), which had already stimulated
Business volume Spain non-life
Business volume Spain life
Growth %
in CHF million
Growth %
in CHF million
Individual life
Property
Transport
2.7
120.0
– 10.5
12.9
– 7.6
104.8
– 11.4
55.2
Motor vehicle
Group life
4.1
50.1
Liability
– 11.7
19.1
Unit-linked
17.3
20.3
Accident / health
– 18.9
19.4
– 1.7
125.6
– 4.8
276.2
Total
72
2012
in LC
2012
in LC
Total
Business units ‹
growth in the previous year, as well as our pension
plan (up 16.3%), which is a product with premiums
subsidised by the government. By contrast, the
market reported the largest drops in premiums in
these areas. In the end-of-year business, the 2%
decline in the interest crediting rate to 1.75%

around the middle of December and the unisex
rates in accordance with EU standards supported
the sales activities.
For 2013, we expect a demanding environment
with increasing challenging competition. With our
new term insurance policy planned for 2013, our innovative products are expected to take account of
the trend towards individual insurance coverage as
well as the unisex guidelines. Furthermore, the unitlinked life insurance should support equity-efficient
growth with the CleVesto products.
Bad weather and major events conceal
solid development in non-life
In 2012, the non-life business grew by 2.3% (in
CHF: 0.0%) with a business volume of CHF 184.6
million. The refocused sales strategy in force for
some years now resulted in a 2.6% increase in the
property insurance business and a 4.7% increase
in the accident/health insurance business. In the
highly competitive motor vehicle insurance business
we successfully combined focus on income and restructuring measures with 2.2% growth.
The claims experience was marked by a pronounced frost period in February, local bad wea
ther in the summer and a substantial accumulation
of major claims. Consequently, the net claims ratio
rose to 70.6% compared to the previous year. By
contrast, the development of attritional losses in mo-
tor vehicle insurance, where there was a noticeable
decline in claims frequency due to the targeted focus on income, was pleasing.
Costs remained stable and the one-time restructuring provision for further process optimisation resulted in a slightly negative impact and an increase
in the cost ratio to 32.9%. Overall, this results in a
net combined ratio of 103.5% compared to 99.7%
in the previous year. The increase in portfolio quality continues to have priority in the non-life area.
With the introduction of a new factor rates in motor
vehicle insurance, the emphasis continues to be
placed on risk-appropriate pricing and sustainable
earnings power. Our growth initiatives are also focused on profitable sub-segments.
Strategy and targets
The sales and efficiency initiatives started at the beginning of 2011 paid off for the first time in 2012.
Product developments, the new momentum given to
sales productivity and the targeted inclusion of
agencies and sales force resulted in growth sig
nificantly higher than the market. This should be
supported by the structural enhancement of access
to wholesale brokers and banks. The initiatives
launched in 2011 in the information technology
area and the exploitation of cross-border synergies
have also had a positive effect. The implementation
of further potential for process optimisation will
lead to an improvement in customer service and
cost development in 2013 as well.
Business volume Austria non-life
Business volume Austria life
Growth %
in CHF million
Growth %
in CHF million
Individual life
Unit-linked
Total
2012
Property
Transport
in LC
2012
in LC
2.6
65.8
– 4.6
8.1
2.2
72.8
4.6
95.4
Motor vehicle
56.3
18.3
Liability
2.6
22.2
Accident / health
4.7
15.7
2.3
184.6
10.4
113.7
Total
73
› Business units
France
France
In France, Helvetia specialises in transport insurance and has to date provided traditional transport
and accidental damage insurance for utility ve
hicles. As a result of the acquisition of the French
transport insurance portfolio of Gan Eurocourtage,
a subsidiary of Groupama SA, which was concluded in December 2012, Helvetia has been ranked
in the French transport insurance business as a
strong number two and supplements the existing
positioning, particularly in the maritime transport
insurance business. Helvetia France concluded
financial year 2012 successfully both strategically
and operationally.
Business performance 2012
The performance of the transport insurance business depends strongly on the economic situation
and the volume of transported goods. Growth of
approximately 2% is expected for the transport insurance market for 2012. The general increase in
the transport of goods and the expansion of fleets
in the transport business, as well as yet again increasing investment rates, contributed to this development, while bankruptcies and higher pressure
on prices had a dampening effect on accidental
damage insurance. Helvetia France significantly
outperformed the overall market. It increased premium income to CHF 112.9 million, which corresponds to a 13.7% rise (in CHF due to exchange
rate differences: 11.2%). The pleasing increase is
attributable to the acquisition of the Gan Eurocourtage portfolio only to a limited extent. In 2012,
this was not assigned much importance since only
the premium income and claims in December were
taken into account in the financial statements.
Organic growth of about 9% was reported in the
established portfolio, which for the first time
surpassed 90 million euros, with growth rates of
6% in accidental damage and 13% in transport
insurance.
The level of claims remains stable with a 1.5
percentage point increase in the claims ratio compared to the previous year. The cost ratio declined
slightly such that at 94.2% the net combined ratio
is only 0.6% above the previous year’s figure. As a
result of the acquisition, we expect the combined
ratio to tend to increase due to the changed composition of the portfolio.
74
Helvetia becomes number two
The existing market position of Helvetia France will
be significantly boosted by the portfolio takeover,
thereby facilitating even more comprehensive insurance coverage for the French transport industry.
The transaction will almost triple the premium volume of this country market. In 2011, the portfolio of
Gan Eurocourtage domiciled in Le Havre included
a premium volume of about EUR 150 million. Following the acquisition of L‘Européenne d‘Assurance
Transport (CEAT) in 2009, Helvetia made the second step towards expansion in the French market
within a short period of time. In addition to stimulating growth, this acquisition will strengthen the
know-how and innovative power of our French
transport specialist.
Business volume France non-life
Growth %
2012
in CHF million
in LC
Property
– 3.2
1.7
Transport
21.0
71.2
2.6
36.4
10.8
3.6
13.7
112.9
Motor vehicle
Liability
Total
Business units ‹
Assumed reinsurance
Global insured claims from natural disasters
amounted to about USD 65 billion in 2012. Although, overall the balance of claims was better
than in the previous year, it was still above the average of the last ten years. 90% of the claims was
accounted for by the USA. In particular Hurricane
Sandy, responsible for about USD 25 billion, will
leave its mark in the 2012 financial statements of
some primary insurers and reinsurers. Noteworthy
insurance events in Europe were the winter storm
Andrea, the two earthquakes in Northern Italy and
the floods in the UK.
Pleasing 2012 annual result
Compared to the previous year, Helvetia Group’s
assumed reinsurance unit reported a 2.5% decline
in volumes to CHF 214.9 million. This is attributable
in particular to the loss of two larger business relationships, which was only partially compensated
by new business and the growth of the underlying
original business. The development of foreign exchange rates was relatively stable and had barely
any effect on the premium volume.
The burden of claims for natural disasters was
significantly lower than in the previous year thanks
to our very restrictive underwriting policy in the
USA. The burden of claims caused by the earthquakes in Northern Italy affected us marginally
with a maximum of one percent of our loss ratio.
The cost of larger individual claims was slightly
higher than in the previous year but was compensated through our effective retrocession cover. To-
gether with a normal development of the attritional loss, we significantly reduced the claims ratio
compared to 2011. Given the stable cost ratio, we
improved the combined ratio compared to the previous year. This was again significantly below the
100% mark.
Market trends in 2013
The 2013 renewal was marked by a lower number
of severe natural catastrophes, the occurrence of
additional reinsurance capacity and a record-high
equity capital base for primary and reinsurance
companies. Along with slow economic growth and
continued low interest rates, this resulted in disciplined, technical underwriting with largely stable
prices and conditions. Significant rate increases
occurred only in regions and business lines that
had a deficit in the previous year due to high claims
intensity for reinsurance.
As part of this renewal we recorded a partially
deliberate decline in volume. The majority of the
disposals are attributable to higher retentions by
assignors, increased centralisation of reinsurance
cessions by larger, international assignors and the
restructuring of programmes. In addition, we deliberately parted with business relationships that did
not meet our profitability expectations. We were
able to compensate for this with interesting new
business. This renewal did not significantly change
the composition of our portfolio either in terms of
business lines or regions.
Portfolio structure of assumed
reinsurance by insurance line
Portfolio structure of assumed
reinsurance by region
Share in %
in CHF million
Share in %
in CHF million
Europe
Property
115.3
54%
Transport
13.7
6%
137.4
64%
Motor vehicle
14.6
7%
America
38.5
18%
Liability
22.3
10%
Middle East
21.1
10%
Technical
23.9
11%
Other
17.9
8%
Other
25.1
12%
214.9
100%
214.9
100%
Total
Total
75
“There is no added value
without solidarity and there is no
solidarity without added value.”
Emilio Martin, 52, France
Emilio Martin is well versed in added value. As Man
aging Director of a French luxury shoe manufacturer,
he is constantly involved with company data. “We
have 200 employees and our activities require a sig
nificant number of deliveries on a daily basis.” And
the goods delivered are always valuable. Therefore,
Emilio Martin also needs to be able to rely on his
transport partners to do everything they can to de
liver his luxury shoes to the recipients. “As a result of
a detailed expert report and optimised allocation of
roles, the risks are better known and the claims have
decreased significantly.” The partners are a kind of
shared risk community, without which no added v alue
is generated. “When something goes wrong for
our transport company, it also affects us – and vice
versa.” Added value is only created for all partners
through collective solidarity.
The attraction of equities is that they enable people to choose
a company they are confident of in a targeted manner. With a
dividend of CHF 17.00, the Helvetia share is proving to be more
reliable and also paid higher dividends in 2012.
78
Investor information
80 Investor information
Helvetia shares performed extremely well despite difficult market conditions,
trading at the end of 2012 at CHF 346.50, 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.
Helvetia share
symbolHELN
nominal value CHF 0.10
security number 1 227 168
listingSIX
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 2012. 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 that in the third quarter 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 259.00
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.
Market trend 1.1.2010 – 28.2.2013
in CHF
450
Dividend payment
CHF 16.00
400
350
Dividend payment
CHF 14.50
Dividend payment
CHF 16.00
300
250
Helvetia Holding AG
DJ EuroStoxx Insurance Index
SMI
Swiss Insurance Index
80
02/13
12/12
08/12
04/12
12/11
08/11
04/11
12/10
08/10
04/10
12/09
200
Stable shareholder base
Compared to the end of 2011 there was no
significant change in the core shareholder base.
As at 31 December 2012, the following import
ant shareholders were registered in the share
register of Helvetia Holding AG:
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

Shareholder base as at 31 December 2012
financial statements for 2011. The terms of office
–– Patria Genossenschaft
30.1%
of members of the Board of Directors Hans-Jürg
–– Vontobel Group
4.0%
Bernet, John Martin Manser and Pierin Vincenz
–– Raiffeisen Switzerland
4.0%
expired and they were reappointed for a further
There were 9,512 registered shareholders on term in office of three years.
31 December 2012. At the end of 2012, the employees held 1.5% of the share capital, around Increase in the dividend
0.1% of which was held by the members of Helvetia strives to generate an attractive return
the Board of Directors and Group Executive on invested capital for its shareholders and purM anagement of the Helvetia Group. The major sues an income-oriented, continuous distribution
ity of registered shareholders are based in Switz policy that allows the company to maintain its solerland. Of the institutional shareholders – exclud- id capital base. Despite the challenges associating the above core shareholders – 68.5% have ed with on-going low interest rates and difficult
their registered office in Switzerland (previous economic conditions, Helvetia achieved a good
year: 60.6%) and 31.5% are based abroad (pre- result for 2012. The Group’s capital base also
vious year: 39.4%). Shares pending registration continues to be solid with a Solvency I figure of
rose slightly year-on-year, ending the year at 229%. Our strong balance sheet and improved
20.6%. The free float is unchanged at 61.9%. An profitability allow the Board of Directors to proannual average of 12,400 shares were traded pose an increase of around 6% in the dividend to
per trading day. With a drop of some 8% com- the Shareholders’ Meeting. This is equivalent to a
pared to the trading volume on the Swiss Ex- dividend of CHF 17.00 per share. Half of each of
change, the volume of Helvetia shares held up the last two dividends was distributed from cap
well against the market.
ital contribution reserves arising from share pre-
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:
Our strong balance sheet
and improved consolidated profit allow us to
propose an increased
CHF 17.00 per share dividend to the Shareholders’
Meeting.
‹
Dividend history
in CHF
5.9%
5.4%
4.5%
4.9%
4.5%
17.00
13.50
14.50
16.00
16.00
2008
2009
2010
2011
2012*
51%
39%
41%
49%
44%
Investor groups (excluding core shareholder base)
in %
Payout ratio
Private individuals
25.8
Banks and insurance
13.4
Other institutional investors
60.8
/ Dividend per share
Dividend yield at year-end price
Proposal to the Shareholder‘s Meeting
*
81
miums paid in by shareholders. This year the
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 14.00 of the dividend payment per
share for private persons domiciled in Switzerland.
In financial year 2013, a
bond of CHF 150 million
will be due for redemption.
›
Bonds in circulation
The Helvetia Group placed two bonds on the
Swiss capital market in 2010. 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 2013.
In addition, there is a CHF 300 million sub
ordinated 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 2015. 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
82
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”
s ection at www.helvetia.com.
Key share data Helvetia Holding AG
2012
2011
Treasury shares
Shares in circulation
Price of Helvetia registered shares
40 436
36 193
8 612 439
8 616 682
8 652 875
8 652 875
295.0
in CHF
Year-end
346.5
High for the year
350.0
414.5
Low for the year
259.0
244.8
2 998.2
2 552.6
441.3
392.0
Market capitalisation
in CHF million
Consolidated equity per share
in CHF
Price- / book ratio (P / B) 1
Profit for the period per share
in CHF
Price / earnings ratio (P / E) 1
Dividend per share
2
Payout ratio 2
Dividend yield 1, 2
0.8
0.8
38.1
32.7
9.1
9.0
17.00
16.00
44%
49%
4.9%
5.4%
Based on year-end price
Proposal to the Shareholders’ meeting
1
2
83
“Solidarity is the social bond between people who don’t know
each other but are exposed to a
variety of risks.”
Dijana Baumann, 35, with
Celina Baumann, 7, Austria
Celina Baumann likes to be active in her spare time
and especially enjoys dancing and swimming. She
likes to go to open-air swimming with her friends
during the summer months. The girls swap secrets,
but like to romp around madly just as much. But
things can also go wrong at any time. “As a mother,
you are always concerned about that. The girls are
exposed to many dangers in the pool. I like to see
the older children showing consideration or even
helping the younger ones.” And should anything
happen, Ms Baumann knows that at least she does
not need to worry about material damage as it is
insurable.
Financial report
Consolidated financial statements
of Helvetia Group
88 Consolidated income statement
89Consolidated statement of
comprehensive income
90 Consolidated balance sheet
92 Consolidated statement
of equity
94 Consolidated cash flow
statement
Notes to the consolidated
financial statements
96 General information
97Summary of significant
accounting policies
111
Segment information
121
Foreign currency translation
122
Property and equipment
124
Goodwill and other
intangible assets
126 Investments
139
Financial liabilities
143 Insurance business
150 Income taxes
153Equity
159 Provisions and other
commitments
161 Employee benefits
166 Share-based compensation
167 Related party transactions
168 C ompensation paid to
the Board of Directors
and the Group Executive
Management
172 Risk management
194
Events after the
reporting date
195 Scope of consolidation
199 Report of the Statutory Auditor
Financial statements of
Helvetia Holding AG
201
Income statement
201
Balance sheet
202
N otes to the financial
statements
205 Report of the Statutory Auditors
Financial report
Consolidated income statement
Notes
2012
in CHF million
2011
restated
Income
Gross premiums written
3
6 828.7
6 910.9
Reinsurance premiums ceded
– 283.8
– 298.7
Net premiums written
6 544.9
6 612.2
Net change in unearned premium reserve
Net earned premiums
28.0
– 31.6
6 572.9
6 580.6
7.1.1
959.9
938.9
7.1.3
217.9
– 60.5
Income from unit-linked investments
7.1.5
137.3
– 46.6
0.2
1.1
Share of profit or loss of associates
Other income
79.0
83.8
7 967.2
7 497.3
Claims incurred including claims handling costs (non-life)1
– 1 685.6
– 1 686.5
Claims and benefits paid (life)
– 2 803.0
– 2 868.0
Change in actuarial reserves
– 1 777.8
– 1 456.0
Total operating income
Expenses
Reinsurers’ share of benefits and claims
Policyholder dividends and bonuses
Net insurance benefits and claims
Acquisition costs
Reinsurer’s share of acquisition costs
130.8
103.3
– 107.7
– 77.5
– 6 243.3
– 5 984.7
– 747.4
– 738.8
51.0
66.3
– 385.0
– 374.6
Interest payable
– 27.7
– 30.7
Other expenses
– 176.5
– 70.5
– 7 528.9
– 7 133.0
438.3
364.3
Operating and administrative expenses
Total operating expenses
Profit or loss from operating activities
Financing costs
Profit or loss before tax
Income taxes1
10.1
Profit or loss for the period
– 9.0
– 3.5
429.3
360.8
– 87.1
– 70.9
342.2
289.9
339.6
288.2
2.6
1.7
Attributable to:
Shareholders of Helvetia Holding AG
Minority interests
Earnings per share:
Basic earnings per share (in CHF)1
11.5
38.12
32.69
Diluted earnings per share (in CHF)1
11.5
38.12
32.69
1
88
Adjustments of prior-year figures, see section 2.3 on page 98.
Consolidated financial statements of Helvetia Group 2012
Financial report
Consolidated statement
of comprehensive income
Notes
2012
in CHF million
2011
restated
342.2
289.9
679.4
292.6
Other comprehensive income
Change in unrealised gains and losses on investments
Share of associates’ net profit recognised directly in equity
0.0
0.0
Revaluation from reclassification of property and equipment
0.4
– 0.1
Change from net investment hedge
2.4
3.8
– 9.7
– 8.6
– 361.7
– 230.1
– 79.6
– 8.1
Total other comprehensive income
231.2
49.5
Comprehensive income
573.4
339.4
561.0
344.6
12.4
– 5.2
Foreign currency translation differences1
Change in liabilities for contracts with participation features
Deferred taxes
10.4
Attributable to:
Shareholders of Helvetia Holding AG
Minority interests
1
89
Financial report
Consolidated balance sheet
Notes
2012
in CHF million
2011
1.1.2011
adjusted
adjusted
Assets
Property and equipment
5
368.3
368.9
381.8
Goodwill and other intangible assets
6
336.7
284.5
303.8
7.4.1
48.5
48.7
48.4
Investment property
7.5
4 893.3
4 763.5
4 479.5
Group financial assets
7.2
30 835.9
28 214.5
27 173.1
Investments for unit-linked contracts
7.2
1 955.5
1 812.3
1 886.1
Receivables from insurance business
9.6
1 042.1
1 041.7
963.7
Deferred acquisition costs
9.5
378.3
367.4
362.6
9.1
432.0
402.8
479.1
10.5
23.4
29.4
24.9
17.9
17.7
21.6
Other assets
248.5
205.4
158.1
Accrued investment income
351.5
339.6
325.4
Cash and cash equivalents
1 565.2
1 250.5
942.0
42 497.1
39 146.9
37 550.1
Investments in associates
Reinsurance assets
Deferred tax assets1
Current income tax assets
Total assets
1
90
Financial report
Notes
2012
in CHF million
2011
1.1.2011
restated
restated
Liabilities and equity
Share capital
11.1
Capital reserves
Treasury shares
Unrealised gains and losses (net)
11.2.4
Retained earnings1
Valuation reserves for contracts with participation features
11.2.5
Equity of Helvetia Holding AG shareholders
Minority interests
Equity (without preferred securities)
Preferred securities
11.3
Total equity
0.9
0.9
0.9
248.4
316.6
385.0
– 6.9
– 9.8
– 8.4
226.7
106.1
86.9
– 306.9
– 299.8
– 296.3
2 706.0
2 473.7
2 325.2
895.4
760.9
654.1
3 760.7
3 350.0
3 148.9
39.6
27.9
32.1
3 800.3
3 377.9
3 181.0
300.0
300.0
300.0
4 100.3
3 677.9
3 481.0
24 506.4
Actuarial reserves (gross)
9.1
27 842.5
25 808.5
Provision for future policyholder participation
9.1
1 270.3
899.7
667.4
Loss reserves (gross)1
9.1
3 060.5
2 799.6
2 844.0
957.2
Unearned premium reserve (gross)
9.1
992.5
970.7
Financial liabilities from financing activities
8.1
256.0
182.3
185.4
Financial liabilities from insurance business
8.2
2 303.4
2 306.1
2 425.1
Other financial liabilities
8.3
33.5
74.7
96.0
Liabilities from insurance business
9.6
1 472.5
1 344.6
1 347.5
Non-actuarial provisions
12.1
100.7
96.7
92.1
Employee benefit obligations
13.2
273.2
265.2
263.1
Deferred tax liabilities1
10.5
564.3
491.4
474.5
51.0
41.0
59.4
Current income tax liabilities
Other liabilities and accruals
Total liabilities
Total liabilities and equity
176.4
188.5
151.0
38 396.8
35 469.0
34 069.1
42 497.1
39 146.9
37 550.1
1
91
Financial report
Consolidated statement of equity
Share capital Capital reserves Treasury shares
Notes
11.1
Unrealised
gains and
losses (net)
11.2.4
in CHF million
Balance as at 1 January 2011
Effects of changes in accounting and valuation principles1
Balance as at 1 January 2011 restated
385.0
– 6.9
–
–
–
86.9
–
0.9
385.0
– 6.9
86.9
Profit or loss for the period1
–
–
–
–
Revaluation of investments
–
–
–
280.2
–
–
–
–
–
–
–
–
–
–
–
– 240.7
Deferred taxes
–
–
–
– 20.3
–
–
–
19.2
–
–
–
19.2
Transfer from / to retained earnings
–
–
–
–
Acquisition of subsidiaries
–
–
–
–
Change in minority interests
–
–
–
0.0
Purchase of treasury shares
–
–
– 5.8
–
Sale of treasury shares
–
– 0.7
4.3
–
Share-based compensation
–
1.5
–
–
Dividends
–
– 69.2
–
–
Share capital increase
–
–
–
–
Shareholders’ contributions
–
42.0
–
–
Allocation of shareholders’ contributions
–
– 42.0
–
–
Balance as at 31 December 2011
0.9
316.6
– 8.4
106.1
Balance as at 1 January 2012 restated
106.1
0.9
316.6
– 8.4
–
–
–
–
Revaluation of investments
–
–
–
456.3
–
–
–
–
Foreign currency translation differences
–
–
–
–
–
–
–
– 337.0
Deferred taxes
–
–
–
1.6
–
–
–
120.9
–
–
–
120.9
Transfer from / to retained earnings
–
–
–
– 0.3
Change in minority interests
–
–
–
–
–
–
– 5.6
–
–
– 0.7
4.2
–
Share-based compensation
–
1.7
–
–
Dividends
–
– 69.2
–
–
–
42.0
–
–
Allocation of shareholders’ contributions
–
– 42.0
–
–
0.9
248.4
– 9.8
226.7
Balance as at 31 December 2012
See section 2.3 on page 98.
1
92
0.9
Financial report
Foreign
currency
translation
differences
Retained
earnings
Valuation
reserves for
contracts with
participation
features
Equity of
H elvetia
Holding AG
shareholders
Minority
interests
Equity
(without
preferred
securities)
11.2.5
adjusted
adjusted
– 296.3
2 301.8
Total equity
11.3
adjusted
654.1
Preferred
securities
3 125.5
adjusted
32.1
3 157.6
adjusted
300.0
3 457.6
–
23.4
–
23.4
–
23.4
–
23.4
– 296.3
2 325.2
654.1
3 148.9
32.1
3 181.0
300.0
3 481.0
–
222.4
65.8
288.2
1.7
289.9
–
289.9
–
–
31.5
311.7
– 19.2
292.5
–
292.5
3.8
–
–
3.8
–
3.8
–
3.8
– 7.3
–
–
– 7.3
– 1.3
– 8.6
–
– 8.6
–
–
–
– 240.7
10.6
– 230.1
–
– 230.1
–
–
9.2
– 11.1
3.0
– 8.1
–
– 8.1
– 3.5
–
40.7
56.4
– 6.9
49.5
–
49.5
– 3.5
222.4
106.5
344.6
– 5.2
339.4
–
339.4
–
– 6.8
0.3
– 6.5
–
– 6.5
6.5
0.0
–
0.0
–
0.0
–
0.0
–
0.0
0.0
0.0
–
0.0
0.0
0.0
–
0.0
–
–
–
– 5.8
–
– 5.8
–
– 5.8
–
–
–
3.6
–
3.6
–
3.6
–
–
–
1.5
–
1.5
–
1.5
–
– 67.1
–
– 136.3
– 2.5
– 138.8
– 6.5
– 145.3
–
–
–
–
3.5
3.5
–
3.5
–
–
–
42.0
–
42.0
–
42.0
–
–
–
– 42.0
–
– 42.0
–
– 42.0
– 299.8
2 473.7
760.9
3 350.0
27.9
3 377.9
300.0
3 677.9
– 299.8
2 473.7
760.9
3 350.0
27.9
3 377.9
300.0
3 677.9
–
314.9
24.7
339.6
2.6
342.2
–
342.2
–
–
183.6
639.9
39.9
679.8
–
679.8
2.4
–
–
2.4
–
2.4
–
2.4
– 9.5
–
–
– 9.5
– 0.2
– 9.7
–
– 9.7
–
–
–
– 337.0
– 24.7
– 361.7
–
– 361.7
–
–
– 76.0
– 74.4
– 5.2
– 79.6
–
– 79.6
– 7.1
–
107.6
221.4
9.8
231.2
–
231.2
– 7.1
314.9
132.3
561.0
12.4
573.4
–
573.4
–
– 13.1
2.2
– 11.2
–
– 11.2
11.2
0.0
0.0
– 0.4
–
– 0.4
– 0.4
– 0.8
–
– 0.8
–
–
–
– 5.6
–
– 5.6
–
– 5.6
–
–
–
3.5
–
3.5
–
3.5
–
–
–
1.7
–
1.7
–
1.7
–
– 69.1
–
– 138.3
– 0.3
– 138.6
– 11.2
– 149.8
–
–
–
42.0
–
42.0
–
42.0
–
–
–
– 42.0
–
– 42.0
–
– 42.0
– 306.9
2 706.0
895.4
3 760.7
39.6
3 800.3
300.0
4 100.3
93
Financial report
Consolidated cash flow statement
2012
in CHF million
2011
restated
Cash flow from operating activities
Profit before tax1
429.3
360.8
– 5.4
0.0
Reclassifications to investing and financing activities (affecting cash)
Realised gains and losses on property, equipment and intangible assets
Realised gains and losses on sale of affiliated and associated companies
Dividends from associates
0.0
–
– 0.5
– 0.6
Adjustments
Depreciation / amortisation of property, equipment and intangible assets
Realised gains and losses on financial instruments and investment property
Unrealised gains and losses on investments in associates
Unrealised gains and losses on investment property
Unrealised gains and losses on financial instruments
46.7
44.9
– 41.5
– 28.4
0.5
– 0.3
– 22.4
– 131.1
– 233.2
251.8
Share-based compensation for employees
1.7
1.5
Foreign currency gains and losses1
7.2
36.9
89.2
– 35.5
Deferred acquisition costs
1.1
– 9.3
Reinsurance assets
6.0
69.8
Actuarial reserves
1 777.7
1 445.8
– 35.0
– 38.4
Other income and expenses not affecting cash 2
Change in operating assets and liabilities
Provisions for future policyholder participation
44.3
3.3
Unearned premium reserve
– 22.5
32.3
Financial liabilities from insurance business
– 98.1
– 34.3
Changes in other operating assets and liabilities
108.7
– 120.9
– 160.9
– 219.8
Loss reserves1
Cash flow from investments and investment property
Purchase of investment property
Sale of investment property
Purchase of bonds
Redemption / sale of bonds
Purchase of shares, investment funds and alternative investments
Sale of shares, investment funds and alternative investments
Purchase of structured products
Sale of structured products
60.0
– 4 784.7
– 4 391.9
3 379.3
3 452.9
– 1 202.1
– 1 302.8
1 232.6
1 308.3
– 15.3
– 0.6
0.1
–
– 8 633.4
– 9 914.5
Sale of derivatives
8 526.7
10 042.2
Origination of mortgages and loans
– 516.5
– 577.2
Purchase of derivatives
Repayment of mortages and loans
Purchase of money market instruments
Repayment of money market instruments
94
149.6
449.0
384.6
– 22 773.3
– 39 941.8
22 662.4
39 772.0
Cash flow from operating activities (gross)
367.3
519.7
Income taxes paid
– 80.6
– 77.0
Cash flow from operating activities (net)
286.7
442.7
Financial report
2012
in CHF million
2011
restated
Cash flow from investing activities
Purchase of property and equipment
Sale of property and equipment
– 8.9
– 8.7
9.1
0.2
– 16.3
– 12.0
Sale of intangible assets
0.4
0.1
Sale of investments in associates
0.0
–
89.5
0.0
Purchase of intangible assets
Purchase of investments in subsidiaries, net of cash and cash equivalents
Dividends from associates
Cash flow from investing activities (net)
0.5
0.6
74.3
– 19.8
–
3.5
Cash flow from financing activities
Increase of share capital
3.5
3.6
– 5.6
– 5.8
42.0
42.0
Issuance of debt instruments
70.8
–
– 152.8
– 147.1
Dividends paid
Lease payments under finance lease
Cash flow from financing activities (net)
Effect of exchange rate differences on cash and cash equivalents
Total change in cash and cash equivalents
– 2.4
– 2.4
– 44.5
– 106.2
– 1.8
– 8.2
314.7
308.5
Cash and cash equivalents
Cash and cash equivalents as at 1 January
Change in cash and cash equivalents
Cash and cash equivalents as at 31 December
1 250.5
942.0
314.7
308.5
1 565.2
1 250.5
Composition of cash and cash equivalents
Cash
Due from banks
Other cash equivalents with a maturity of less than three months
Balance as at 31 December
0.3
0.4
1 550.8
1 242.8
14.1
7.3
1 565.2
1 250.5
761.2
752.3
51.9
50.2
6.4
7.1
Other disclosures on cash flow from operating activities:
Interest received
Dividends received
Interest paid
2
“Other income and expenses not affecting cash” primarily contains the change to interest-accruing profit participation of owners of contracts
with discretionary participation features.
1
95
Financial report
› General information
1. General information
Helvetia Group is an all-lines insurance group which operates in many life and non-life
business segments as well as in reinsurance. The holding company, Helvetia Holding
AG, with headquarters in St Gallen, is a Swiss public limited company listed on the SIX
Swiss Exchange. The Group operates through its branch offices and subsidiaries in the
insurance markets of Switzerland, Germany, Austria, Spain, Italy and France, and worldwide in the assumed reinsurance business. Parts of its investment and financing activities are managed through subsidiaries and funds in Luxembourg and Jersey. The Board
of Directors approved the consolidated financial statements and authorised them for
publication on 5 March 2013. The financial statements will be submitted to the shareholders for approval at the Shareholders’ Meeting on 19 April 2013.
96
Notes to the consolidated financial statements of Helvetia Group 2012
Financial report
Summary of significant accounting policies ‹
2. Summary of significant
accounting policies
The Consolidated financial statements of Helvetia Group were prepared in accordance
with the International Financial Reporting Standards (IFRS) and under the historical cost
convention with the exception of adjustments resulting from the IFRS requirement to recognise investments at fair value. Fair value measurement methods are explained in Note
2.6 (page 100).
2.1
tandards applied
S
for the first time in the
reporting year
The following published sector-relevant standards (IAS / IFRS), interpretations (IFRIC)
and amendments to the standards were applied by the Group for the first time in the reporting year:
–– Amendments to IFRS 7: Disclosure – derecognition of financial assets;
–– Amendments to IAS 12: Deferred taxes – recovery of underlying assets.
The adoption of these amendments did not have any material impact on Helvetia Group’s
asset, financial and income situation.
mendments to IFRS 7:
A
Disclosure – derecognition
of financial assets
The following gives certain explanations to the changes:
The amendments to IFRS 7 concern additional disclosure requirements on the transfer of
financial assets. Due to the amendment of the standard, comprehensive disclosure regarding potentially retained rights and obligations, or rights and obligations assumed
as part of the transaction, are now required upon incomplete or complete derecognition
of reclassified financial assets. This will improve transparency with regard to the impact
of such transactions on the risk exposure and, therefore, the financial position of a company.
mendments to IAS 12:
A
Deferred taxes – recovery
of underlying assets
The amendments to IAS 12 concern the fact that the estimation of deferred taxes d
epends
on whether the book value of an asset is realised through use or disposal.
The improvement to IAS 12 introduces the assumption that investment property is normally realised through disposal. This assumption can be refuted for depreciable investment property.
Helvetia refutes this assumption. Helvetia Group’s investment properties are held for
rental purposes and all of the economic benefits are used up over time rather than being realised through sale.
As previously, the tax rate for amortised acquisition costs is used to calculate the deferred taxes, and, for this reason, he amendments to IAS 12 have no effect on the tax
rate used to calculate deferred taxes on investment property.
97
Financial report
› Summary of significant accounting policies
2.2
tandards not yet ap
S
plied in the reporting
year
Due to the effective dates on which they came into force, the following published sector-relevant standards, interpretations and amendments to standards were not applied
to the 2012 consolidated financial statements:
Changes in accounting policies to be applied for annual periods beginning on / after
Amendments to IAS 1: Presentation of financial statements – presentation of OCI 1.7.2012
Amendments to IAS 19: Employee benefits
1.1.2013
IAS 28 Associates and joint ventures
1.1.2013
Amendments to IFRS 7: Disclosures netting of financial assets and financial liabilities
1.1.2013
IFRS 10 Consolidated financial statements
1.1.2013
IFRS 11 Joint arrangements
1.1.2013
IFRS 12 Disclosure of interests in other entities
1.1.2013
IFRS 13 Fair value measurement
1.1.2013
Amendments to IAS 32: Offsetting financial assets and financial liabilities 1.1.2014
IFRS 9 Financial instruments: classification and measurement, as well as the corresponding
amendments to IFRS 7
1.1.2015
The effects of IFRS 9 cannot yet be predicted.
The amendments to IAS 19 have a material impact on the recognition of employee
benefits. These cannot be quantified definitively yet. The most important changes are the
following:
–– Actuarial gains and losses must be recognised immediately in the statement of comprehensive income and the option to defer recognition of gains and losses (the “corridor” approach) is no longer allowed. This is expected to increase the volatility of
the balance sheet and the statement of comprehensive income.
–– All past service cost must be recognised in the period of the plan amendment and
can no longer be allocated over the period until the benefits become vested.
–– Net interest may in future only be determined by applying the discount rate to the
net defined benefit asset. This is expected to lead to an increased P&L charge, as the
expected return on assets is usually estimated to be higher than the discount rate.
A decrease in equity to the value of CHF 144.1 million is expected in Switzerland in
2013 in connection with the introduction of IAS 19 and the new generation tables as
well as the amendment to the pension and supplementary fund regulations.
The other recently published standards and amendments to standards are not expected to have any material impact on the financial statements.
2.3
98
Voluntary changes to
accounting and valu
ation principles
Actuarial methods derived from many years of claims experience are applied to determine the required loss reserves for non-life insurance. In the past, the inherent uncertainties associated with claims development were taken into account when calculating the
loss reserves through reserve increases based on Group-wide assumptions. The reserve
increases served primarily to cover large claims that had not yet been notified.
From 1 January 2012, Helvetia Group replaced the previous reserving methodology
for covering uncertainties in claims development by actuarially calculated reserves to
cover large claims incurred but not yet reported. This model is based on the number of
large claims observed over the last few decades and the average claim amount,
a pplying country- and sector-specific assumptions. To make the actuarial models for
these a dequate reserves more exact, the definition of large claims, in particular, was
a djusted across the Group.
The use of actuarial methods to calculate adequate reserves, which are in line with
the current process for setting up reserves, guarantees a more reliable and relevant reserving process. Earlier reporting periods have been adjusted accordingly.
Financial report
The table below summarises the effects of the amendments on the consolidated balance sheet and income statement:
Initially
reported
Adjustments
After
adjustments
Initially
reported
Adjustments
After
adjustments
in CHF million
Consolidated balance sheet
1.1.2011
31.12.2011
Assets
Reinsurance assets
479.1
–
479.1
402.8
–
402.8
Deferred tax assets
25.1
– 0.2
24.9
29.7
– 0.3
29.4
Liabilities and equity
– 296.3
–
– 296.3
– 300.2
0.4
– 299.8
Retained earnings
2 301.8
23.4
2 325.2
2 449.1
24.6
2 473.7
Loss reserves (gross)
2 868.8
– 24.8
2 844.0
2 827.0
– 27.4
2 799.6
473.3
1.2
474.5
489.3
2.1
491.4
1.8
– 1 686.5
Deferred tax liabilities
Consolidated income statement
31.12.2011
Claims incurred including claims handling costs (non-life)
– 1 688.3
Reinsurers’ share of benefits and claims
103.3
Income taxes
– 70.3
– 0.6
– 70.9
288.7
1.2
289.9
Earnings per share
103.3
31.12.2011
Basic earnings per share (in CHF)
32.55
0.14
32.69
Diluted earnings per share (in CHF)
32.55
0.14
32.69
2.4
Consolidation
principles
All the material companies included in the consolidation have the same reporting
p eriods. Smaller Group companies with different financial years prepare interim

financial statements as of the reporting date of 31 December.
2.4.1Subsidiaries
The consolidated financial statements include the financial statements of Helvetia Holding
AG, its subsidiaries and its own investment funds. Consolidation applies when Helvetia
Holding AG exercises indirect or direct control over the company’s operations. Subsidiaries
acquired during the course of the financial year are included in the consolidated financial
statements from the date on which Helvetia Group took effective control. Acquisitions of
companies are recorded using the purchase method. Intergroup transactions and balance
sheet items are eliminated.
2.4.2Associates
For corporate acquisitions, Helvetia Group carries the non-controlling interests (minority
interests) in the acquired companies at fair value.
Any changes in Helvetia Group’s percentage of shares held in a subsidiary, without losing
control, will be treated as transactions among equity investors. The adjustments of minority
interests are based on the proportional net assets of the subsidiary. Goodwill is not adjusted and no gains or losses are recognised in the income statement.
Associated companies of Helvetia Group are accounted for using the equity method if significant influence is exercised by Helvetia Group. Significant influence is assumed when the
Group controls 20% to 50% of the voting rights. The goodwill resulting from the equity valuation is recognised in “Investments in associates”. The book value of all investments is tested
for impairment if there is objective and substantial evidence for impairment at the balance
sheet date.
Associates of Helvetia Group are listed together with the fully consolidated subsidiaries in Note 19 (from page 195).
99
Financial report
100
2.5Foreign currency
translation
The reporting currency of the Helvetia Group is the Swiss franc (CHF).
2.5.1Translation of financial
statements prepared in
foreign currencies
Items included in the financial statements of those entities that do not have the Swiss franc
as their functional currency were translated using the applicable closing rate. Items in the
income statement are translated at the average exchange rates for the reporting period.
The resulting translation differences are recorded in “Foreign currency translation differences” in equity, not affecting profit or loss. Upon (partial) disposal of a subsidiary, these
currency differences, attributable to the subsidiary in question and accumulated in equity,
are released through income. The rates applied in these financial statements are given in
Note 4.1 (page 121).
2.5.2Translation of foreign
currency transactions
Foreign currency transactions in the individual entities are accounted for using the exchange rate on the date of the transaction.
The individual entities translate balance sheet items denominated in foreign currencies
as follows: monetary and non-monetary balance sheet items recorded at fair value, at closing rates, and non-monetary balance sheet items recorded at cost, at historical rates.
“Monetary items” include cash and cash equivalents, assets and liabilities for which
Helvetia Group either receives or pays a fixed or determinable amount of money.
For non-monetary items classified as available-for-sale investments, such as shares and
shares in investment funds, the unrealised foreign currency gain is recognised in equity
without affecting the income statement until the financial instrument is sold. However, for
monetary items such as bonds and loans, the unrealised foreign currency gain is immediately recognised in the income statement.
2.6Accounting estimates
and key assumptions
Preparing the financial statements in accordance with IFRS requires Group management
to make assumptions and estimates that affect the reported amounts of assets and liabil
ities for the ongoing financial year. All estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. Actual figures
and estimates may differ as a result. Management judgement is, in particular, required in
the following assumptions relevant to the preparation of the financial statements.
2.6.1
Fair value of financial assets and liabilities
The fair value of a financial instrument is the quoted market price for which an asset could
be exchanged in an active market between knowledgeable, willing parties in an arm’s
length transaction. “In an active market” means that the prices are made available regularly, either by a stock exchange, a broker or a pricing service, and that these prices represent current and regular market transactions. For financial assets, the fair value is the
quoted bid price, and for financial liabilities it is the quoted ask price. Financial instruments
measured at the prices listed on an active market belong to the “Level 1” category of valu
ation methods.
If no market value in an active market is available, the fair value is determined using
valuation methods. Such methods are considerably influenced by assumptions, which can
lead to varying fair value estimates. Financial instruments for which the model assumptions
are based on observable market data are allocated to the “Level 2” valuation category.
Financial report
This category includes comparisons with current market transactions, references to transactions with similar instruments, and option price models. This concerns the following
items, in particular:
–– Mortgages and loans: The fair value of mortgages and borrower’s note loans is determined on the basis of discounted cash flows. Mortgages are measured by applying the
current interest rates of Helvetia Group for comparable mortgages that have been
granted. The Swiss franc swap curve is used to measure borrower’s note loans.
–– Derivative financial instruments: The fair value of equity and currency options is determined using option price models (Black-Scholes option pricing), while the fair value of
forward exchange rate agreements is determined on the basis of the forward exchange
rate on the reporting date. The fair value of interest rate swaps is calculated using the
present value of future payments.
If the valuation assumptions are not based on observable market data, the financial instrument in question falls into the “Level 3” valuation category. This applies in particular to alternative investments. The fair value of private equity investments is calculated
using the discounted cash flow (DCF) method and applying the internal rate of return
(IRR).
If the range of possible fair values is very large and reliable estimates cannot be
made, the financial instrument is measured at cost, less any value adjustments (impairment).
2.6.2 Impairment of availablefor-sale investments
The judgement as to whether an equity instrument classified as available-for-sale is subject to impairment depends on the existence of objective indications. One decisive criterion is a constant or considerable decrease in the value of an instrument: at Helvetia
Group, instruments are considered impaired if their fair value remains below cost for
longer than nine months or falls 20% or more below cost irrespective of the period of
time. In addition, ratings and analyst reports can serve as an indication that a company’s circumstances have changed with respect to technology, the market, economy or
law, to such an extent that the cost can probably no longer be recovered. In these c ases,
the need for impairment is examined and – if justified – recorded.
2.6.3 F air value of investment
property
In Switzerland, investment properties are valued in accordance with the discounted cash
flow (DCF) method. The procedure is described in Note 2.12.1 (page 104).
The choice of the discount rate plays an important role in the DCF valuation method
used in Switzerland. The discount rates are based on a long-term, risk-free average rate
plus a premium for market risk plus regional and property-related surcharges and discounts based on the current condition and location of the property in question. The discount rates applied in the reporting period are set out in Note 7.5 (page 133). The portfolio is regularly reviewed and appraisal reports are prepared by independent experts.
All other countries use independent experts to determine market estimates at intervals
of three years, at the most.
2.6.4 Accounting estimates
specific to insurance
The estimated uncertainties in actuarial practice are explained in Note 2.16 (from page
106). Any material change to the parameters used for the calculation of the provisions
is documented in Notes 9.3 from page 146 (non-life business) and 9.4 on page 148 (life
business).
2.6.5 Impairment of goodwill
Capitalised goodwill is tested annually for impairment. The procedure is described
in Note 2.11 (page 103). The recoverable amount is calculated on the basis of several
assumptions, which are disclosed in Note 6 (from page 124).
101
Financial report
2.7
The current, noncurrent distinction
Assets and liabilities are classified as current if they are expected to be realised or
s ettled within twelve months after the reporting date. All other assets and liabilities are
considered to be non-current.
The following items are fundamentally classified as non-current: “Property and equipment”, “Goodwill and other intangible assets”, “Investments in associates”, “Investment
property” and “Deferred tax assets and liabilities”.
The following items are fundamentally classified as current: “Current income tax assets and liabilities”, “Accrued investment income” and “Cash and cash equivalents”.
All other items are of a mixed nature. The differentiation between the current and
non-current balances of relevant items is explained in the notes. The maturity schedule
of financial assets, financial liabilities and provisions for insurance and investment contracts is described in Note 17.5 (from page 181) as part of the risk assessment process.
2.8
roperty and
P
equipment
Property and equipment are carried at cost less accumulated depreciation and accrued
impairment. Depreciation is normally calculated using the straight-line method over the
estimated useful life as follows:
Furniture
4 – 15 years
Technical equipment
4 – 10 years
Vehicles
4 – 6 years
Computer hardware
2 – 5 years
The following rates of depreciation apply to owner-occupied property:
Supporting structure
Interior completion
1.0 – 3.5 %
1.33 – 8.0 %
Land is not depreciated. Useful life is adjusted if the pattern of consumption of the economic benefit has changed. Value-adding investments are added to the current book
value in the period and are depreciated over the entire term if an increase in the economic benefit is expected from the investment and reliable estimates exist for the cost.
Depreciation is recognised in the income statement under “Operating and administrative expenses”. Repairs and maintenance are charged to the income statement as incurred. Property and equipment are regularly tested for impairment (see Note 2.11,
page 103).
2.9
102
L easing
If a lease agreement transfers all risks and rewards incidental to the ownership to
H elvetia Group, the lease is classified and treated as a finance lease. The finance lease
agreements of Helvetia Group are limited to lessee agreements. At inception of the lease
agreement, recognition occurs at the lower of the present value of the minimum lease
payments and the fair value of the lease object. A finance lease obligation of the same
amount is recorded as a liability. Lease payments are apportioned between the finance
charge and reduction of the outstanding liability so as to achieve a constant rate of
interest on the remaining balance of the liability. The depreciation of the asset follows
the rules for depreciating property and equipment. All other lease agreements are
c lassified as operating leases. Payments – less any reductions – made under operating
lease agreements are charged to the income statement on a straight-line basis over the
term of the lease.
Financial report
2.10 G
oodwill and other
intangible assets
Acquired intangible assets are recognised at cost and amortised over their useful life. If
a portfolio of insurance contracts or investment contracts is acquired, an intangible a
sset
is recognised for an amount that equals the present value of all future gains minus the
solvency costs included in the acquired contracts. This “value in force” (VIF) is amortised
in proportion to the gross gains or gross margins over the actual term of the acquired
contracts. This term is usually between three and ten years. Helvetia has only capitalised VIF in respect of the life business. This is tested for impairment every year. The
intangible assets also include acquired distribution agreements. The value of an acquired distribution agreement equals the present value of all expected future gains. The
distribution agreements are depreciated in proportion to the expected gross gains or
gross margins over the term of the future contracts. This term is usually between five and
fifteen years. Other intangible assets also include intangible assets developed by the
company, principally internally developed software that is recorded at cost and amortised on a straight-line basis from the date on which it enters service. Depreciation is recognised in the income statement under “Operating and administrative expenses”. The
useful life is usually between three and ten years.
Intangible assets with an indefinite useful life are not amortised, but are reviewed annually for impairment (see Note 2.11, below). Goodwill is recognised as of the acquisition date and comprises the fair value purchase price plus the amount of any non-
controlling interest in the acquired company and, in a business combination achieved
in stages, the acquisition-date fair value of the acquirer’s previously held equity interest
in the acquired company, minus the net of the acquisition date amounts of the identifi
able assets, liabilities and contingent liabilities of the acquired company.
A positive balance is accounted for as goodwill. If the value of the acquired entity’s
net assets exceeds the acquisition costs at the purchase date, this surplus is immediately recognised in the income statement. Goodwill acquired in a business combination is
recognised at cost, net of accumulated impairment loss, and is tested annually for impairment. It is carried as an asset in the local currency of the acquired entity and translated at the applicable closing rate on each balance sheet date.
2.11 I mpairment of property
and equipment,
g oodwill and other
intangible assets
The book value of property and equipment or an intangible asset amortised using the
straight-line method is tested for impairment if there is evidence for impairment. Goodwill and intangible assets with an indefinite useful life are reviewed for impairment
annually in the s econd half of the year. They are also tested for impairment if there is
evidence of impairment.
An intangible asset is impaired if its carrying amount exceeds its recoverable amount.
The recoverable amount is measured as the higher of fair value less cost to sell and v alue
in use. Fair value less cost to sell is the amount obtainable from the sale of an asset at
current market conditions after deducting any direct disposal costs. Value in use is the
present value of estimated future cash flows expected to be generated from the con
tinuing use of an asset and from its disposal at the end of its useful life. For the purpose
of impairment testing, the value in use is measured under realistic conditions, with
consideration given to planned activities and their resulting cash in- and outflows. If the
recoverable amount is less than the carrying amount, the difference is charged to the
income statement as an impairment loss. This is reported in the position “Other expenses”.
A reversal of the impairment loss is recognised if there has been a change in the estimates used to determine the recoverable amount since the impairment loss was accounted for. If the new circumstances result in a decreased impairment loss, the reversal
impairment is reported up to the maximum of the historical cost and recorded in the
income statement in “Other expenses”.
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Financial report
For the purpose of impairment testing, goodwill is allocated at the time of acquisition to
those cash generating units (CGU) that are expected to benefit from the business combination. To calculate any impairment loss, the value in use of the CGU is determined
and compared to the book value. The value in use is calculated by applying the discounted cash flow (DCF) method, with future operating cash flows less necessary operating
investments (free cash flows) being included. Alternatively, the fair value less cost to sell
is used for impairment testing. If an impairment loss arises, the goodwill is adjusted accordingly. An impairment loss for goodwill cannot be reversed.
104
2.12 I nvestments
At Helvetia Group, investments include investments in associates, investment property
and financial assets (securities, derivative financial assets, loans and money market instruments). The treatment of investments in associates is described in Note 2.4.2 (page
99), under “Consolidation principles”.
2.12.1I nvestment property
The aim of the investment property portfolio is to earn rentals or achieve long-term capital appreciation. Property held for investment purposes includes both land and buildings and is carried at fair value.
Changes in fair value are recognised in the income statement. Companies in
Switzerland calculate fair value using a generally accepted discounted cash flow (DCF)
valuation method. The portfolio is regularly reviewed and appraisal reports are prepared by independent experts. All other countries use independent experts to determine
market estimates at least every three years. These estimates are updated between
valuation dates.
The DCF valuation method is a two-tier gross rental method based on the principle
that the value of a property equals the total of future earnings on the property. In the
first phase, the individual annual cash flows for a property over the next ten years are
calculated and discounted as of the valuation date. In the second phase, the unlimited
capitalised income value for the time following the first ten years is calculated and also
discounted as of the valuation date. The risk-adjusted discounted rates that are used for
the DCF valuation are based on the current condition and location of the property in
question. The cash flows used for the forecast are based on the rental income that can
be earned in the long term.
Helvetia Group does not capitalise properties where it acts as tenant in an operating lease relationship. Rental income is recognised on a straight-line basis over the lease
term.
2.12.2Financial assets
The recognition and measurement of financial assets follow the IFRS categories: “loans”
(loans and receivables, LAR), “held-to-maturity” (HTM), “at fair value through profit or
loss”, “available-for-sale” (AFS) and “derivatives for hedge accounting”.
Financial assets are initially recognised at fair value. Directly attributable transaction
costs are capitalised, except for financial assets at fair value through profit or loss, for
which the transaction costs are charged to the income statement. Helvetia Group records
all acquisitions and disposals of financial instruments at trade date. Derecognition of a financial investment occurs on expiration of the contract or at disposal if all risks and control have been transferred and if no rights to cash flows from the investment are retained.
Loans (LAR) and financial assets that the Group has the intention and ability to hold to
maturity (HTM) are carried at amortised cost (AC). LAR loans are not traded on an active
market. Helvetia Group usually generates them by directly providing funds to a debtor.
“Financial assets at fair value through profit or loss” comprise “financial assets held
for trading” and “financial assets designated as at fair value through profit or loss”. An
instrument is classified as “held for trading” if it is held with the aim of making short-term
gains from market price fluctuations and dealer margins. Upon initial recognition, financial investments are irrevocably classified as “designated as at fair value” only if they
are a component of a particular group of financial assets that, according to a documented investment strategy, are managed on a fair value basis, or their recognition as at fair
value serves to compensate for market value fluctuations of liabilities due to policyholders. The value fluctuations that result from the fair value valuation are directly recognised
Financial report
in the income statement and for Group investments are reported separately from current
income in the item “Gains and losses on Group investments (net)”.
Financial assets held for an undetermined period and which cannot be classified to
any other category are classified as “available-for-sale” (AFS). AFS investments are carried in the balance sheet at fair value. Unrealised gains and losses are recognised
directly in equity with no impact on profit or loss. Upon disposal or impairment, the gains
and losses accumulated in equity are released through income.
Interest income is recognised on an accruals basis subject to the asset’s effective rate
of interest (including “Financial assets at fair value through profit or loss”). Dividends are
recorded when a legal right arises. Depreciation and appreciation resulting from the
amortised cost method are included in interest income in the income statement. Interest
and dividend income from Group investments that are designated as “at fair value
through profit or loss” are included in the item “Current income on Group investments
(net)”.
2.12.3 I mpairment of financial
assets
The carrying amounts of financial assets that are not classified as “at fair value through
profit or loss” (LAR, HTM, AFS) are regularly reviewed for impairment. If objective and
substantial evidence indicates permanent impairment at the reporting date, the difference between cost and the recoverable amount is recognised as an impairment through
profit or loss. An equity instrument is considered impaired if its fair value falls considerably or constantly below cost (see also Note 2.6, page 100). Debt instruments are impaired or sold if it is probable that not all amounts due under the contractual terms will
be collectible. This usually happens when contractually agreed interest or redemption
payments are stopped or are in arrears, if the debtor suffers from serious financial dif
ficulties and / or if the rating falls below a specific threshold value. If, in order to avoid
impairment, new conditions are negotiated for mortgages or loans, the mortgages or
loans in question are still recognised in the balance sheet at amortised cost.
For LAR and HTM financial investments, the recoverable amount at the reporting date
is equivalent to the present value of estimated future cash flows discounted at the o riginal
interest rate. Impairments are booked using an allowance account. The impairment is
reversed through profit or loss if a subsequent event causes a decrease in the impairment loss.
For AFS financial assets, the recoverable amount at the reporting date equals the fair
value. For non-monetary AFS financial assets, such as shares and investment fund units,
any additional impairment loss after the initial impairment is immediately recognised in
the income statement. The impairment is not reversed, even if the circumstances causing
the impairment cease to apply. Valuation gains are recognised in equity until disposal.
For monetary AFS financial assets, such as bonds, the impairment is reversed through
profit or loss if the circumstances causing the impairment cease to apply.
Financial investments are derecognised at the latest when the bankruptcy proceedings end or, in the case of ongoing bankruptcy proceedings, when the outstanding debt
plus interest is received. If a settlement is agreed, derecognition takes place at the end
of the agreed period after receipt of the payment.
2.13 Financial derivatives
Derivative financial instruments are classified as “Financial assets held for trading” and
are shown in the item “Financial assets at fair value through profit or loss” or are carried as “Derivatives for hedge accounting”. The hedging strategies used by Helvetia
Group for risk management purposes are described in Note 17 (from page 172).
Derivatives may also be embedded in financial instruments, insurance contracts or
other contracts. They are measured either together with their host contract or separately at fair value. The underlying security and derivative are measured and recognised
separately if the risk characteristics of the embedded derivative are not closely related
to those of the host contract. Changes in the fair value of derivatives are recognised in
the income statement.
105
Financial report
106
2.14 Net investment hedge
For hedges of currency gains and losses on investments in subsidiaries with a foreign
reporting currency, the hedge-effective portion of the gain or loss on the valuation of the
hedging instrument is recognised in equity, while the ineffective portion is recognised
directly in the income statement.
When a net investment hedge ends, the hedge instrument continues to be recognised
in the balance sheet at fair value. All gains and losses reported in equity remain a component of equity until the company is (partially) sold. Upon the (partial) sale of the company, the unrealised gains and losses recognised in equity are transferred to the income
statement.
2.15 Financial liabilities
Financial liabilities are initially recognised at fair value. Directly attributable transaction
costs are offset, except in the case of financial liabilities at fair value through profit or
loss. After initial recognition, financial liabilities are carried at fair value or amortised
cost (AC). The financial liability is derecognised when the obligation has been discharged.
Those financial liabilities that are either held for trading or are irrevocably classified
upon initial recognition as “designated as at fair value through profit or loss” are recognised at fair value. The latter classification is given to deposits if they are associated
with investment funds or products for which the policyholder benefit is almost identical
with the investment return. For these deposits for investment contracts without a discretionary participation feature (see Note 2.16, below) only the withdrawals and allo
cations that are part of the operating result are recorded in the income statement. The
risk and cost portions of premiums from policyholders are recognised in the income statement and recorded in the item “Other income”. The policyholder’s deposit is directly
credited or debited with the investment portion of the premium.
Those financial liabilities not held for trading and also not designated as at fair v alue
through profit or loss are recognised at amortised cost. Interest expenses for financial
liabilities that are used for financing purposes are recognised in the income statement
as “Finance costs”. Depreciation and appreciation resulting from the amortised cost
method are offset against interest expenses in the income statement.
2.16 Insurance business
Direct business includes assumed primary business and business ceded to reinsurers.
Indirect business consists of assumed reinsurance business and business retroceded to
reinsurers. The actuarial items are described as “gross” before deduction of ceded
b usiness and as “net” after the deduction.
Insurance contracts as defined by IFRS comprise all products containing a significant
insurance risk. The significance is assessed at product level.
Contracts that are considered insurance products in the formal sense of the law and
mainly carry financial risk rather than any significant insurance risk are not insurance
contracts but are treated as financial instruments unless they carry a discretionary participation feature (DPF), in which case they are classified as insurance contracts. Under
IFRS, discretionary participation features are contractual benefits where, in addition to
the guaranteed benefit, the policyholder has a claim to the realised or unrealised investment returns on certain assets or to a share of the insurance company’s profit or loss.
This additional benefit must form a significant proportion of the overall contractual
benefit, and its amount or timing must be at the insurance company’s discretion.
2.16.1Non-life business
The actuarial items in non-life business are established Group-wide on the same prin
ciples. All non-life insurance products of Helvetia Group contain significant insurance
risk and are recognised as insurance contracts.
Loss reserves are set aside for all claims incurred by the end of the accounting p eriod.
The reserves also include provisions for claims incurred but not yet reported. Actuarial
methods that take account of uncertainties are applied to determine the amount of
reserves. Reserves are not discounted, except for those provisions for claims for which
there are payment arrangements.
Financial report
Reserve estimates and the assumptions on which they are based are reviewed continuously. Valuation changes are entered as profit or loss on the income statement at the
time of the change.
A Liability Adequacy Test (LAT) is carried out on every reporting date to determine
whether, taking into consideration expected future cash flows, the existing liabilities of
each business line (property, motor vehicle, liability, transport and accident / health insurance) at all Group companies are adequately covered up to the reporting date in
o rder to ensure a loss-free valuation. Expected future premium income is compared to
expected claims expenses, expected administration and acquisition costs and expected
policyholder dividends. If the expected costs exceed the expected premium income, the
loss reserves are increased.
Helvetia Group defers acquisition costs. These are calculated from the commission
that was paid and are depreciated over the term of the contracts or, if shorter, the premium payment period.
Premiums are booked at the beginning of the contract period. Earned premiums are
calculated pro rata per individual contract and recorded as income for the relevant risk
periods. Premium proportions relating to future business periods are accounted for as
unearned premium reserves. The cost of claims is assigned to the relevant period.
2.16.2Life business
The valuation and accounting principles applied locally by the life companies determine
the actuarial items in life business. The assumptions made in setting the reserves are
based on best estimate principles that, firstly, take account of the business-specific
situation, such as existing capital investments and the market situation as well as, for
example, possible yields from reinvestments, and secondly, local actuarial bases of
c alculation (e.g. interest rates, mortality). The assumptions vary according to country,
product and year of acceptance, and take account of country-specific experiences.
Unearned premium reserves and actuarial reserves are calculated using local
m ethods. Zillmerisation is not applied to actuarial reserves in any country market apart
from Germany and Austria.
All Group companies defer acquisition costs under local accounting rules. Depending on the country, either the effectively incurred acquisition costs or acquisition cost surcharges included in the premium are deferred in part.
A Liability Adequacy Test (LAT) is applied at each reporting date to examine w hether
existing reserves are sufficient to cover expected future needs. The reserve increases
that are shown by the LAT to be necessary are calculated Group-wide according to
standard principles. The LAT is based on actuarial principles using best estimate assumptions. The estimate of expected needs is calculated by using the difference between the
present value of the benefits (including expected administration costs and expected policyholder dividends) and the present value of expected gross premiums. If expected
needs exceed existing reserves (less deferred acquisition costs not included in the actuarial reserve), the actuarial reserve is increased to the required level through profit or
loss.
Policyholders with contracts containing discretionary participation features may
have the right to participate in local investment returns on capital or local company
results under statutory or contractual regulations. Provisions set up for that purpose in
accordance with local accounting principles are not changed under IFRS rules and are
included under “Provision for future policyholder participation” or under “Actuarial
reserve” in the balance sheet.
Portions of the valuation differences in relation to local accounting principles allocated to contracts containing discretionary participation features which affect either the
net income or unrealised gains in equity are also reserved under “Provision for future
policyholder participation”. The portion is equal to the percentage rate which sets the
minimum participation level of policyholders in the respective revenues under local statu
tory or contractual regulations. This participation in income is credited or debited to the
item “Provision for future policyholder participation” through profit or loss. Similarly, the
portion of unrealised gains or losses is recognised in the provisions without affecting
profit or loss.
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Financial report
The remaining gains – either through profit or loss or with no impact on the results – that
relate to contracts with a discretionary participation feature (i.e. every share for w hich
no legal or contractual obligations exist) are recorded under “Valuation reserves for
contracts with participation features” within equity.
Bonuses already assigned which accrue interest are allocated to the deposits of
p olicyholders and are contained in the balance sheet as “Financial liabilities from
insurance business”.
If insurance contracts contain both an insurance and a deposit component, unbund
ling is carried out if the rights and obligations resulting from the deposit component
c annot be fully reflected without a separate valuation of the deposit component.
Financial derivatives embedded in insurance contracts that are not closely related to
the host contract are recognised at fair value. Option pricing techniques are used to
assess embedded derivatives. Such embedded derivatives are accounted for under
“Other financial liabilities”, separate from the actuarial reserve.
Premiums, insurance benefits and costs arising from life insurance contracts are
booked as they fall due. These income and expenses are accrued or deferred so that
profit from the contracts is recognised in the appropriate period.
108
2.16.3Reinsurance
Reinsurance contracts are contracts between insurance companies. As in primary insurance business, there must be sufficient risk transfer for a transaction to be booked as a
reinsurance contract, otherwise the contract is considered a financial instrument.
The direct business transferred to reinsurance companies is called ceded reinsurance
and includes cessions from the direct life and non-life businesses. Premiums, unearned
premium reserves and premium adjustments for ceded business are recognised and
shown separately from primary business in the financial statements. The accounting rules
used for primary insurance business apply to ceded business.
Assets from ceded reinsurance business are regularly reviewed for potential impairment and uncollectibility. If there is objective and substantial evidence of permanent impairment at the balance sheet date, the difference between the carrying amount and estimated recoverable amount is recognised in the income statement as an impairment loss.
Indirect business accepted from another insurance company is called assumed re
insurance. As in primary insurance business, technical reserves are included in the
respective actuarial items on the liabilities side, and are similarly estimated using
mathematical-statistical models and the most up-to-date information available. They also
reflect uncertainties. Non-traditional insurance contracts are treated as financial instruments and are reported under “Reinsurance assets” or “Financial liabilities from
insurance business” if no significant insurance risks have been transferred. Net commission is reported directly in the income statement.
Indirect business ceded to insurance companies outside the Group is reported as
retrocession. The principles of ceded business apply in this instance.
2.17 Income taxes
Actual income tax assets and liabilities are calculated using the currently applicable tax
rates. Income tax assets and liabilities are only recognised if a reimbursement or payment is expected.
Deferred income tax assets and liabilities are calculated using the tax rate changes
enacted or substantively enacted as of the balance sheet date. Deferred taxes are recognised for all temporary differences between the IFRS carrying amounts of assets and
liabilities and the tax bases of these assets and liabilities, using the liability method.
D eferred tax assets from losses carried forward are recorded only to the extent that it is
probable that future taxable profit can be offset against the relevant losses. Deferred
tax assets and liabilities are offset when an enforceable legal right was granted by the
tax authorities in question to set off actual tax assets and liabilities.
Financial report
2.18Receivables
Receivables from insurance business and other receivables are carried at amortised cost
which is, in general, the nominal value of the receivables. Impairment is recognised in
the income statement. The impairment loss is reported under “Other expenses” in the income statement.
Impairment for receivables from insurance business is booked as individual impairment or collective impairment. If the counterparty does not meet its payment obligations
during the normal reminder procedure, the claims are impaired on the basis of the historic delinquency ratio for specific risk groups. Individual impairment is also carried out
to take account of current default risks, in the event the counterparty is overindebted or
threatened by bankruptcy, or in the event of foreclosure.
2.19Accrued investment
income
Interest income on interest-bearing financial investments and loans that must be allocated to the reporting year is accrued or deferred under financial assets.
2.20Cash and cash
equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short-term
liquid investments with a maturity of not more than three months from the date of acquisition.
2.21 Treasury shares
Treasury shares are recorded at cost, including transaction costs, and reported as a deduction from equity. In case of a sale, the difference between cost and sale price is recorded as a change in capital reserves, with no impact on profit or loss. Treasury shares
are exclusively shares of Helvetia Holding AG, St Gallen.
2.22Non-technical
provisions and
contingent liabilities
Non-technical provisions contain current obligations that will probably require an outflow of assets, but the extent of such obligations and the time they will be called have
not yet been determined exactly. Provisions are created if, on the balance sheet date
and on the basis of a past event, a current obligation exists, the probability of an outflow of assets is high and the extent of the outflow can be reliably estimated.
Any current obligations with a low probability of an outflow of assets or the extent
of which cannot be reliably estimated are reported under contingent liabilities.
2.23Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits,
ther long-term employee benefits and termination benefits.
o
Short-term employee benefits are due in full within twelve months after the end of the
reporting period. They include salaries, social security contributions, holiday and sickness pay, bonuses and non-monetary benefits for active employees. Expected expenses for entitlements that can be accumulated, such as accrued holiday and overtime
e ntitlements, are recognised as short-term liabilities at the balance sheet date.
Post-employment benefits pertain to defined contribution plans and defined benefit
plans. The amount of the employers’ contributions for defined contribution plans depends on the employee services rendered during the reporting period and is charged
directly to the income statement. For defined benefit plans, pension obligations and related expenses are calculated at each balance sheet date by a qualified actuary, using
the projected unit credit method. The actuarial assumptions applied to the calculations
consider the regulations of the respective countries and Group companies. Changes in
the assumptions or differences between the expected and actual return from the plan’s
assets are actuarial gains and losses. Actuarial gains and losses to be depreciated in
the income statement are recorded for each individual plan using the “corridor method”,
under which recognition is only required if the balance of the accumulated, unrecognised actuarial gains and losses exceeds the greater of 10% of the present value of the
defined benefit obligations and 10% of the fair value of plan assets at the end of the
previous reporting period. The portion of actuarial gains and losses outside the 10%
corridor is recognised in the income statement over the expected average remaining
working lives of the employees participating in the plans.
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Financial report
For funded benefit plans, a surplus in the plan may arise if the fair value of the plan
assets exceeds the present value of the defined benefit obligations. Portions of this
surplus are only recognised and recorded as an asset if an economic benefit in the form
of future reductions in contributions or refunds to the employer arises. There is a contribution reduction as defined by IFRS if the employer must pay lower contributions than
service cost.
Other long-term employee benefits are benefits that fall due twelve months or more
after the balance sheet date. At Helvetia Group, these consist mainly of long-service
awards and are calculated using actuarial principles. The amount recognised in the balance sheet is equal to the present value of the defined benefit obligation less any plan
assets.
Termination benefits consist, for example, of severance pay and benefits from social
schemes for redundancies. Such benefits are immediately recognised as expenses in the
income statement at the time the employment relationship is terminated.
110
2.24Share-based
compensation
Share-based compensation transactions include all compensation agreements under
which employees receive shares, options or similar equity instruments or the granting
Group company assumes obligations that depend on the price of its shares. All sharebased compensation transactions with employees are recognised at fair value.
A long-term salary component (LTC) for the Board of Directors and the Group
E xecutive M anagement was introduced as part of the variable salary. This consists of
Helvetia Holding AG shares allocated prospectively over three years. The objective is
to promote a longer-term business perspective. This compensation is recognised proportionally in the income statement every year until ownership to the shares is transferred.
Equity instruments granted to employees through employee share purchase plans
represent compensation for services already rendered for which compensation ex
penses arise in the granting company. The amount of the compensation expenses is
based on the fair value of the equity instruments at the grant date and is expensed over
the vesting period.
2.25 Other liabilities
Other liabilities are carried at amortised cost, which is generally equal to the nominal
value.
2.26Offsetting of assets
and liabilities
Assets and liabilities are netted in the balance sheet when there is a legal right to offset
the recognised amounts and only the net position has actually been reported.
Financial report
Segment information ‹
3. Segment information
The management structure of Helvetia Group is primarily based on country markets.
Each country has its own management team which is in charge of the operational management of all local business units and carries responsibility for the legal entities. With
the exception of the reinsurance business, segmentation is based on the country markets
where all service-rendering activities occur. These country markets also reflect the locations where customers of Helvetia Group reside.
The operating segments of Helvetia Group derived from this structure comprise the
country markets “Switzerland”, “Germany”, “Italy”, “Spain” and “Other insurance units”,
including Austria, France and the global reinsurance business. The “Corporate” segment
is a separate reporting segment and includes all Group activities as well as the financing companies and Helvetia Holding AG.
For additional information, Helvetia Group classifies its activities as life business, n
on-life
business and other activities.
In the life business, Helvetia Group offers various product lines, such as life insurance,
pension plans and annuities. The non-life business includes property, motor vehicle,
liability and transport insurance policies as well as health and accident insurance
coverage. Units that are not involved in any actuarial business that can be allocated
directly to the “life” or “non-life” segments are included in one of these two segments.
All other units as well as the assumed reinsurance business are included in “Other
activities”.
The accounting policies that apply to the segment reporting are the same as those described in the summary of significant accounting policies. Inter-segmental services and
transfers of assets and liabilities are made on an arm’s length basis. Investments in other
companies and investment and interest income from subsidiaries between the segments
are eliminated within the respective segment. All other inter-segmental relations and
revenues within the Group are eliminated in full.
The assignment of individual Group entities to the various regional and business areas
is explained in Note 19 (from page 195).
111
Financial report
› Segment information
3.1 Segment information
Switzerland
2012
in CHF million
Germany
2011
2012
adjusted
Italy
2011
2012
adjusted
2011
adjusted
Income
3 978.4
4 110.1
810.4
799.5
1 012.0
962.1
– 131.0
– 124.2
– 80.9
– 77.8
– 67.0
– 73.1
3 847.4
3 985.9
729.5
721.7
945.0
889.0
1.5
10.6
– 2.7
1.4
12.9
– 37.2
3 848.9
3 996.5
726.8
723.1
957.9
851.8
687.4
654.0
74.8
77.4
102.2
104.5
95.6
11.5
28.3
– 4.3
55.7
– 37.1
40.2
– 20.2
36.2
– 21.9
55.3
– 5.1
– 0.2
0.6
–
–
–
–
Other income
32.9
33.1
3.7
3.9
26.8
27.8
4 704.8
4 675.5
869.8
778.2
1 197.9
941.9
74.1
79.3
59.0
58.9
24.9
35.6
4 778.9
4 754.8
928.8
837.1
1 222.8
977.5
Net earned premiums
Current income on Group investments (net)
of which transactions between geographical segments
Total revenues from external customers
Expenses
– 436.6
– 441.7
– 367.4
– 434.8
– 357.5
– 343.7
– 2 239.2
– 2 179.4
– 119.9
– 123.9
– 235.7
– 330.4
– 1 245.2
– 1 222.9
– 164.4
– 116.3
– 325.0
– 140.7
55.5
25.5
44.8
91.3
46.4
47.3
– 69.1
– 57.4
– 26.9
– 23.6
– 6.1
2.9
– 3 934.6
– 3 875.9
– 633.8
– 607.3
– 877.9
– 764.6
– 258.4
– 253.8
– 170.9
– 168.1
– 100.1
– 99.4
16.3
19.2
22.7
30.2
10.8
11.9
– 200.3
– 199.6
– 46.5
– 46.3
– 59.7
– 59.4
Interest payable
– 22.3
– 25.0
– 3.7
– 4.0
– 2.6
– 2.6
Other expenses
– 20.4
– 28.5
– 5.3
– 7.8
– 133.5
– 12.7
– 4 419.7
– 4 363.6
– 837.5
– 803.3
– 1 163.0
– 926.8
285.1
311.9
32.3
– 25.1
34.9
15.1
Reinsurers’ share of benefits and claims1
Acquisition costs
Reinsurers’ share of acquisition costs
Financing costs
–
–
–
–
– 0.4
– 0.6
285.1
311.9
32.3
– 25.1
34.5
14.5
Income taxes1
– 47.6
– 51.2
– 5.5
7.0
– 17.1
– 9.3
237.5
260.7
26.8
– 18.1
17.4
5.2
1
112
Financial report
Other insurance units
Spain
2012
2011
2012
adjusted
Corporate
2011
2012
Elimination
2011
2012
adjusted
Total
2011
2012
adjusted
2011
adjusted
401.8
427.5
789.6
790.0
–
–
– 163.5
– 178.3
6 828.7
6 910.9
– 18.9
– 27.2
– 149.4
– 174.0
–
–
163.4
177.6
– 283.8
– 298.7
382.9
400.3
640.2
616.0
–
–
– 0.1
– 0.7
6 544.9
6 612.2
7.5
5.6
8.7
– 12.7
–
–
0.1
0.7
28.0
– 31.6
390.4
405.9
648.9
603.3
–
–
–
–
6 572.9
6 580.6
24.1
25.4
62.2
71.2
12.0
10.2
– 2.8
– 3.8
959.9
938.9
2.4
– 3.6
29.7
– 14.3
6.2
– 12.7
–
–
217.9
– 60.5
2.8
0.1
2.8
0.5
0.0
–
–
–
137.3
– 46.6
0.4
0.5
0.0
0.0
–
–
–
–
0.2
1.1
4.6
4.9
10.1
14.3
1.7
0.8
– 0.8
– 1.0
79.0
83.8
424.7
433.2
753.7
675.0
19.9
– 1.7
– 3.6
– 4.8
7 967.2
7 497.3
15.7
18.9
– 176.6
– 196.7
– 0.7
– 0.8
3.6
4.8
–
–
440.4
452.1
577.1
478.3
19.2
– 2.5
–
–
7 967.2
7 497.3
– 192.3
– 219.9
– 432.3
– 380.9
–
–
100.5
134.5
– 1 685.6
– 1 686.5
– 89.7
– 84.3
– 130.8
– 158.4
–
–
12.3
8.4
– 2 803.0
– 2 868.0
– 19.2
– 15.0
– 22.6
38.3
–
–
– 1.4
0.6
– 1 777.8
– 1 456.0
13.3
27.0
84.3
57.7
–
–
– 113.5
– 145.5
130.8
103.3
–
–
– 5.6
0.6
–
–
–
–
– 107.7
– 77.5
– 287.9
– 292.2
– 507.0
– 442.7
–
–
– 2.1
– 2.0
– 6 243.3
– 5 984.7
– 77.9
– 84.7
– 170.3
– 172.0
–
–
30.2
39.2
– 747.4
– 738.8
4.5
6.4
24.9
35.6
–
–
– 28.2
– 37.0
51.0
66.3
– 27.7
– 28.0
– 42.3
– 36.2
– 8.6
– 4.9
0.1
– 0.2
– 385.0
– 374.6
– 30.7
0.0
0.0
– 0.7
– 0.9
– 2.0
– 3.0
3.6
4.8
– 27.7
– 6.6
– 3.4
– 7.4
– 7.2
– 3.3
– 10.9
0.0
0.0
– 176.5
– 70.5
– 395.6
– 401.9
– 702.8
– 623.4
– 13.9
– 18.8
3.6
4.8
– 7 528.9
– 7 133.0
29.1
31.3
50.9
51.6
6.0
– 20.5
0.0
0.0
438.3
364.3
–
–
–
–
– 8.6
– 2.9
–
–
– 9.0
– 3.5
29.1
31.3
50.9
51.6
– 2.6
– 23.4
0.0
0.0
429.3
360.8
– 8.4
– 7.5
– 9.2
– 10.3
0.7
0.4
0.0
0.0
– 87.1
– 70.9
20.7
23.8
41.7
41.3
– 1.9
– 23.0
0.0
0.0
342.2
289.9
113
Financial report
3.2 Information by business activity
Life
2012
Non-life
2011
2012
in CHF million
2011
adjusted
Income
Net earned premiums
4 201.4
4 258.6
2 412.4
– 61.7
– 58.6
– 275.5
2 432.1
– 270.5
4 139.7
4 200.0
2 136.9
2 161.6
– 1.0
– 3.9
29.7
– 22.2
4 138.7
4 196.1
2 166.6
2 139.4
Current income on Group investments (net)
848.8
823.0
103.3
105.4
186.8
– 47.2
29.3
6.4
137.3
– 46.6
–
–
– 0.2
0.6
0.4
0.5
Other income
45.6
39.0
31.9
39.2
5 357.0
4 964.9
2 331.5
2 290.9
Expenses
–
–
– 1 545.3
– 1 617.2
– 2 796.6
– 2 862.6
–
–
– 1 782.9
– 1 457.9
–
–
28.3
26.4
144.3
180.2
Reinsurers’ share of benefits and claims1
Acquisition costs
Reinsurers’ share of acquisition costs
– 79.0
– 3.5
1.5
– 4 373.1
– 1 404.5
– 1 435.5
– 204.5
– 203.9
– 488.7
– 483.7
16.3
26.6
46.0
45.8
– 163.1
– 159.7
– 206.4
– 203.1
Interest payable
– 34.0
– 36.9
– 8.6
– 9.6
Other expenses
– 142.0
– 22.9
– 35.9
– 40.1
– 5 182.7
– 4 769.9
– 2 098.1
– 2 126.2
174.3
195.0
233.4
164.7
Financing costs
–
–
– 0.4
– 0.6
174.3
195.0
233.0
164.1
Income taxes1
– 34.8
– 39.8
– 52.4
– 28.6
139.5
155.2
180.6
135.5
1
114
– 104.2
– 4 655.4
Financial report
Other activities
2012
Elimination
2011
2012
Total
2011
2012
adjusted
2011
adjusted
411.6
412.3
– 196.7
– 192.1
6 828.7
– 142.9
– 160.9
196.3
191.3
– 283.8
6 910.9
– 298.7
268.7
251.4
– 0.4
– 0.8
6 544.9
6 612.2
– 1.1
– 6.3
0.4
0.8
28.0
– 31.6
267.6
245.1
–
–
6 572.9
6 580.6
23.9
28.4
– 16.1
– 17.9
959.9
938.9
1.8
– 19.7
–
–
217.9
– 60.5
0.0
0.0
–
–
137.3
– 46.6
–
–
–
–
0.2
1.1
7.3
10.4
– 5.8
– 4.8
79.0
83.8
300.6
264.2
– 21.9
– 22.7
7 967.2
7 497.3
– 252.7
– 205.0
112.4
135.7
– 1 685.6
– 1 686.5
– 19.5
– 14.1
13.1
8.7
– 2 803.0
– 2 868.0
6.6
1.2
– 1.5
0.7
– 1 777.8
– 1 456.0
84.5
43.9
– 126.3
– 147.2
130.8
103.3
–
–
–
–
– 107.7
– 77.5
– 181.1
– 174.0
– 2.3
– 2.1
– 6 243.3
– 5 984.7
– 91.8
– 91.8
37.6
40.6
– 747.4
– 738.8
24.1
32.2
– 35.4
– 38.3
51.0
66.3
– 15.5
– 11.6
0.0
– 0.2
– 385.0
– 374.6
– 2.2
– 3.2
17.1
19.0
– 27.7
– 30.7
– 3.5
– 11.2
4.9
3.7
– 176.5
– 70.5
– 270.0
– 259.6
21.9
22.7
– 7 528.9
– 7 133.0
30.6
4.6
0.0
0.0
438.3
364.3
– 8.6
– 2.9
–
–
– 9.0
– 3.5
22.0
1.7
0.0
0.0
429.3
360.8
0.1
– 2.5
0.0
0.0
– 87.1
– 70.9
22.1
– 0.8
0.0
0.0
342.2
289.9
115
Financial report
3.3 Additional information
by segment:
Switzerland
as at 31.12.
2012
in CHF million
Germany
2011
2012
adjusted
Italy
2011
2012
adjusted
2011
adjusted
Assets by geographical segment1
30 267.9
27 997.3
2 961.7
2 743.0
5 057.9
4 528.6
of which investments
27 754.2
25 785.3
2 523.1
2 278.1
4 053.0
3 607.9
46.3
46.7
–
–
–
–
Liabilities by geographical segment1
27 373.9
25 406.0
2 683.7
2 510.2
4 721.7
4 275.8
of which technical provisions (gross)
24 861.6
23 147.0
2 375.1
2 184.2
2 999.5
2 535.4
of which investments in associates
Cash flow from operating activities (net)
223.2
201.5
– 34.9
11.5
137.7
122.0
Cash flow from investing activities (net)
68.7
– 28.2
30.3
0.3
– 23.9
– 4.0
Cash flow from financing activities (net)
18.7
12.4
6.0
–
9.4
3.3
4.8
1.7
1.6
1.6
9.2
8.3
– 6.3
– 7.4
– 2.5
– 2.6
– 8.8
– 7.8
–
–
–
–
–
–
–
–
–
–
–
–
– 1.0
– 1.0
–
–
–
–
Acquisition of owner-occupied property, equipment and
intangible assets
Depreciation and amortisation on tangible and intangible
assets
Impairment of tangible and intangible assets affecting income
Reversal of impairment losses on property, equipment and
intangible assets affecting income
Share-based compensation transaction costs
by business activity:
Life
as at 31.12.
2012
Non-life
2011
2012
in CHF million
Assets by business activity1
35 373.8
32 708.2
6 215.0
5 416.3
Liabilities by business activity1
33 214.5
30 823.0
4 416.3
3 797.8
Acquisition of owner-occupied property, equipment and intangible assets
Depreciation and amortisation on property, equipment and intangible assets
Impairment of property, equipment and intangible assets affecting income
Reversal of impairment losses on property, equipment and
intangible assets taken through profit or loss
Share-based compensation transaction costs
1
116
2011
adjusted
2.4
0.2
88.6
10.9
– 7.1
– 8.2
– 12.9
– 12.9
–
–
– 0.6
–
–
–
–
–
– 0.5
– 0.5
– 0.5
– 0.5
Financial report
Other insurance units
Spain
2012
2011
2012
adjusted
Corporate
2011
2012
Elimination
2011
2012
adjusted
Total
2011
2012
adjusted
2011
adjusted
1 226.9
1 226.7
3 169.1
2 715.4
169.9
296.1
– 356.3
– 360.2
42 497.1
39 146.9
935.2
923.3
2 060.2
1 909.0
420.0
347.9
– 12.5
– 12.5
37 733.2
34 839.0
2.2
2.0
0.0
0.0
–
–
–
–
48.5
48.7
1 025.4
1 028.0
2 828.4
2 395.7
120.0
213.5
– 356.3
– 360.2
38 396.8
35 469.0
852.3
857.3
2 280.9
1 950.2
–
–
– 203.6
– 195.6
33 165.8
30 478.5
27.4
47.0
91.8
16.5
– 162.9
57.3
4.4
– 13.1
286.7
442.7
– 3.2
– 3.6
– 12.2
– 3.1
19.0
5.7
– 4.4
13.1
74.3
– 19.8
– 26.0
– 42.1
2.3
14.4
– 54.9
– 94.2
–
–
– 44.5
– 106.2
3.8
4.3
81.4
3.9
4.0
0.9
–
–
104.8
20.7
– 5.4
– 5.2
– 3.8
– 3.6
– 3.7
– 5.0
–
–
– 30.5
– 31.6
– 0.6
–
–
–
–
–
–
–
– 0.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 0.7
– 0.5
–
–
– 1.7
– 1.5
2011
2012
Other
activities
2012
Elimination
2011
2012
Total
adjusted
2011
adjusted
1 304.9
1 417.6
– 396.6
– 395.2
42 497.1
39 146.9
1 162.6
1 243.4
– 396.6
– 395.2
38 396.8
35 469.0
13.8
9.6
–
–
104.8
20.7
– 10.5
– 10.5
–
–
– 30.5
– 31.6
–
–
–
–
– 0.6
–
–
–
–
–
–
–
– 0.7
– 0.5
–
–
– 1.7
– 1.5
117
Financial report
3.4 Gross premiums by geography and business area
Gross
p remiums
before
e limination
2012
Gross
premiums
Elimination
2011
2012
2011
2012
Change in %
Change in %
(FX-adjusted)
2011
in CHF million
Switzerland
non-life
Switzerland
life
Total Switzerland
801.6
–
–
795.5
801.6
– 0.8
– 0.8
3 308.5
–
–
3 182.9
3 308.5
– 3.8
– 3.8
3 978.4
4 110.1
–
–
3 978.4
4 110.1
– 3.2
– 3.2
Germany
non-life
556.8
529.0
–
– 0.2
556.8
528.8
5.3
7.7
Germany
life
253.6
270.5
–
–
253.6
270.5
– 6.3
– 4.1
810.4
799.5
–
– 0.2
810.4
799.3
1.4
3.7
Total Germany
Italy
non-life
486.4
518.5
–
–
486.4
518.5
– 6.2
– 4.1
Italy
life
525.6
443.6
–
–
525.6
443.6
18.5
21.1
1 012.0
962.1
–
–
1 012.0
962.1
5.2
7.5
Total Italy
Spain
non-life
276.2
296.8
–
–
276.2
296.8
– 6.9
– 4.8
Spain
life
125.6
130.7
–
–
125.6
130.7
– 3.9
– 1.7
401.8
427.5
–
–
401.8
427.5
– 6.0
– 3.9
Total Spain
Other countries
non-life
297.5
286.1
–
–
297.5
286.1
4.0
6.3
Other countries
life
113.7
105.3
–
–
113.7
105.3
8.0
10.4
Reinsurance
378.4
398.6
– 163.5
– 178.1
214.9
220.5
– 2.5
– 2.5
Total other insurance
business
789.6
790.0
– 163.5
– 178.1
626.1
611.9
2.3
3.9
6 992.2
7 089.2
– 163.5
– 178.3
6 828.7
6 910.9
– 1.2
– 0.3
Total gross premiums
118
795.5
3 182.9
Financial report
3.5Gross premiums
by business line
Gross
premiums
Change in %
Change in %
(FX-adjusted)
2012
2011
Individual insurance
1 595.2
1 442.1
10.6
11.8
Group insurance
2 386.1
2 616.8
– 8.8
– 8.7
in CHF million
Unit-linked life insurance
Gross premiums life
220.1
199.7
10.3
11.9
4 201.4
4 258.6
– 1.3
– 0.8
Property
918.0
917.6
0.1
1.4
Transport
172.5
157.3
9.6
11.7
Motor vehicle
930.6
923.0
0.8
2.4
Liability
252.3
253.2
– 0.4
1.0
Accident / health
Gross premiums reinsurance
Total gross premiums
139.0
180.7
– 23.1
– 21.4
2 412.4
2 431.8
– 0.8
0.7
214.9
220.5
– 2.5
– 2.5
6 828.7
6 910.9
– 1.2
– 0.3
119
Financial report
3.6Gross premiums and
deposits received
In accordance with the accounting policies used, deposits from investment contracts are
not recognised in the income statement.
Business
volume
Change in %
Change in %
(FX-adjusted)
2012
2011
4 201.4
4 258.6
– 1.3
– 0.8
in CHF million
Gross premiums life
149.8
261.2
– 42.7
– 41.4
Gross premiums and deposits received life
4 351.2
4 519.8
– 3.7
– 3.1
2 412.4
2 431.8
– 0.8
0.7
214.9
220.5
– 2.5
– 2.5
6 978.5
7 172.1
– 2.7
– 1.8
Deposits received from investment contracts life
Gross premiums reinsurance
Gross premiums and deposits received
1
Currently, all deposits from investment contracts life relate to the country market Italy.
1
120
Financial report
Foreign currency translation ‹
4. Foreign currency translation
4.1
Exchange rates
The euro, Swiss franc, British pound and US dollar are the functional currencies in the
individual business units of Helvetia Group. The following exchange rates apply to the
translation of these financial statements and foreign currency transactions:
Exchange rate at reporting date
31.12.2012
31.12.2011
1 EUR
1.2068
1.2139
1 USD
0.9154
0.9351
1 GBP
1.4879
1.4532
Annual average
4.2Foreign exchange gains
and losses
2012
2011
Jan – Dec
Jan – Dec
1 EUR
1.2038
1.2310
1 USD
0.9316
0.8806
1 GBP
1.4855
1.4166
The foreign exchange results in the consolidated income statement in reporting year
2012 show a loss of CHF 11.5 million (previous year: CHF 53.5 million). The foreign exchange loss from financial investments is included in “Gains and losses on Group investments” in the consolidated income statement and amounts to CHF 4.9 million (previous
year: CHF 48.5 million), excluding foreign currency translation differences from investments at fair value through profit or loss. Other foreign currency translation gains and
losses are reported under the items “Other expenses” and “Other income”.
121
Financial report
› Property and equipment
5. Property and equipment
Owneroccupied
property
Undeveloped
land
Equipment
2012
2011
2012
2011
2012
2011
81.9
in CHF million
Acquisition costs
Balance as at 1 January
9.0
9.0
515.6
513.9
87.0
Change in scope of consolidation
–
–
12.7
–
0.4
–
Additions
–
–
1.7
0.4
6.0
7.7
Disposals
– 6.4
–
– 3.6
–
– 2.9
– 0.8
Revaluation gains on transfers to investment property
–
–
0.4
0.0
–
–
Transfer
–
–
– 1.8
2.2
–
–
–
–
– 1.4
– 7.2
– 0.3
– 1.8
Other changes
–
–
–
6.3
0.7
–
2.6
9.0
523.6
515.6
90.9
87.0
Accumulated depreciation / impairment
3.8
3.8
173.6
161.3
65.6
58.0
Depreciation
–
–
8.9
8.9
7.7
9.4
Impairment
–
–
0.6
–
–
–
Reversal of impairment losses
–
–
–
–
–
–
– 3.8
–
– 3.0
–
– 2.5
– 0.6
Transfer
–
–
– 1.0
– 0.1
–
–
–
–
– 0.5
– 2.8
– 0.2
– 1.2
Other changes
–
–
–
6.3
0.7
–
–
3.8
178.6
173.6
71.3
65.6
Disposals depreciation / impairment
Book value as at 31 December
of which assets under finance lease
Book value as at 1 January
122
2.6
5.2
345.0
342.0
19.6
–
–
40.8
42.4
–
21.4
–
5.2
5.2
342.0
352.6
21.4
23.9
Financial report
Property and equipment ‹
Property under
construction
Total
2012
2011
2012
2011
0.3
0.1
611.9
604.9
–
–
13.1
–
1.2
0.6
8.9
8.7
– 0.1
–
– 13.0
– 0.8
–
–
0.4
0.0
– 0.3
– 0.4
– 2.1
1.8
0.0
0.0
– 1.7
– 9.0
–
–
0.7
6.3
1.1
0.3
618.2
611.9
0.0
0.0
243.0
223.1
–
–
16.6
18.3
–
–
0.6
–
–
–
–
–
–
–
– 9.3
– 0.6
–
–
– 1.0
– 0.1
–
–
– 0.7
– 4.0
–
–
0.7
6.3
0.0
0.0
249.9
243.0
368.9
1.1
0.3
368.3
–
–
40.8
42.4
0.3
0.1
368.9
381.8
123
Financial report
› Goodwill and other intangible assets
6. Goodwill and other
intangible assets
Other
intangible
assets
Goodwill
Total
2012
2011
2012
2011
2012
2011
195.0
197.1
260.0
255.9
455.0
453.0
57.8
–
8.7
–
66.5
–
–
–
16.3
12.0
16.3
12.0
in CHF million
Acquisition costs
Change in the scope of consolidation
Additions
Disposals
Other changes
–
–
– 0.4
– 2.2
– 0.4
– 2.2
– 0.3
– 2.1
– 1.0
– 5.7
– 1.3
– 7.8
–
–
– 0.1
–
– 0.1
–
252.5
195.0
283.5
260.0
536.0
455.0
Accumulated amortisation / impairment
0.1
0.1
170.4
149.1
170.5
149.2
Amortisation
–
–
29.5
26.6
29.5
26.6
Impairment
–
–
–
–
–
–
Reversal of impairment losses
–
–
–
–
–
–
Disposals amortisation / impairment
Other changes
Book value as at 31 December
Book value as at 1 January
–
–
0.0
– 2.1
0.0
– 2.1
0.0
0.0
– 0.6
– 3.2
– 0.6
– 3.2
–
–
– 0.1
–
– 0.1
–
0.1
0.1
199.2
170.4
199.3
170.5
252.4
194.9
84.3
89.6
336.7
284.5
194.9
197.0
89.6
106.8
284.5
303.8
Helvetia Group’s “Other intangible assets” mainly comprise long-term sales agreements,
the value of the acquired insurance business (present value of future payment flows from
the acquisition of long-term insurance or investment contracts), and purchased and internally developed software.
In 2012, goodwill of CHF 57.8 million was recorded in connection with the acquisition of Gan Eurocourtage’s French transport insurance business. Details can be found in
Note 19 (from page 195). This goodwill primarily represents anticipated synergies and
future growth potential in the French transport insurance market and is allocated to the
“Other insurance units” segment.
124
Financial report
Goodwill and other intangible assets ‹
Goodwill is tested annually for impairment in accordance with Note 2.11 (from page
103).
In 2012, the cash generating unit “France non-life” was formed in connection with
the acquisition of Gan Eurocourtage’s French transport insurance business. This also
includes Helvetia Assurances S.A., for which a separate impairment test has been
c arried out up until now.
Similarly, Padana Assicurazioni S.p.A. is part of the new cash generating unit “Italy
non-life”.
The goodwill impairment test was based on the following growth and discount rates,
assuming cash flows in perpetuity:
as at 31.12.2012
Growth rate
in %
in %
4.4
1.0%
7.96%
in CHF million
Switzerland life
Switzerland non-life
Applied
discount rate
Goodwill
121.7
1.0%
6.65%
Helvetia Compañía Suiza S.A.
18.1
1.0%
12.83%
Chiara Vita S.p.A.
31.3
1.5%
12.20%
3.4
1.5%
14.04%
France non-life
73.5
1.0%
9.88%
as at 31.12.2011
Goodwill
Growth rate
Applied
discount rate
in %
in %
4.4
1.0%
7.95%
Italy non-life
in CHF million
Switzerland life
Switzerland non-life
121.7
1.0%
6.72%
Helvetia Compañía Suiza S.A.
18.3
1.0%
11.21%
Chiara Vita S.p.A.
31.4
1.5%
10.17%
3.4
1.5%
11.42%
15.7
1.0%
9.76%
Padana Assicurazioni S.p.A.
Helvetia Assurances S.A.
The impairment test carried out in 2012 did not result in any impairment loss. The recoverable amount was determined by calculating the value in use. This calculation required
management to make estimates of expected cash flows to be derived from the assets.
These free cash flows are usually considered for a period of three to five years and are
based on the budget approved by management and the strategic planning. The growth
rate was set by management and is based on past experience and future expectations.
The applied discount rates are pre-tax rates and relate to the risks allocated to the business units in question. Management believes that any reasonable change in any of the
key assumptions used to determine the recoverable amount of the individual segments
will not result in impairment.
125
Financial report
› Investments
7. Investments
7.1Investment income
Notes
2012
2011
7.1.1
959.9
938.9
7.1.3
217.9
– 60.5
1 177.8
878.4
137.3
– 46.6
1 315.1
831.8
0.2
1.1
1 315.3
832.9
in CHF million
Investment result from Group financial assets and investment
property
7.1.5
Investment result from financial assets and investment
property
Investment income (net)
7.1.1 Current income from investments by class
Group
investments
Unit-linked
investments
2012
2011
566.2
556.8
44.5
42.0
Investment funds
5.0
5.0
Derivative financial instruments 1
2.7
Mortgages
Loans
2012
Total
2011
2012
2011
9.6
5.7
575.8
562.5
1.3
1.4
45.8
43.4
1.1
1.8
6.1
6.8
1.7
–
–
2.7
1.7
96.2
98.1
–
–
96.2
98.1
53.7
in CHF million
Bonds
Shares
49.9
53.7
–
–
49.9
Money market instruments
4.2
4.9
–
–
4.2
4.9
Other
0.0
0.0
–
–
0.0
0.0
768.7
762.2
12.0
8.9
780.7
771.1
Current income on financial assets (gross)
Investment management expenses on financial assets
Current income on financial assets (net)
– 6.4
–
–
– 6.8
– 6.4
755.8
12.0
8.9
773.9
764.7
Rental income
261.8
252.7
–
–
261.8
252.7
Investment management expenses on property
– 63.8
– 69.6
–
–
– 63.8
– 69.6
Current income from investment property (net)
198.0
183.1
–
–
198.0
183.1
Current income from investments (net)
959.9
938.9
12.0
8.9
971.9
947.8
1
126
– 6.8
761.9
Derivatives comprise current income on derivative financial assets and derivative financial liabilities.
Financial report
Investments ‹
Asset management expenses on property include all maintenance and repair costs as
well as the operating expenses for property that did not generate rental income during
the reporting year. The latter amounted to CHF 1.5 million in the reporting year (previous year: CHF 1.4 mi