Baloise-Holding AG Annual Report 2005

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FY2005 Annual Report · Baloise-Holding AG

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“ Finding and retaining

the right customers…”

Bâloise-Holding
Annual Report 2005
Business Review

Swiss market in practice – how we stay close to customers and become trusted partners of choice page 19

Recognizing customers‘ risk profile – revolutionary pricing policy in Luxembourg page 31

Optimized claims management in Germany – for the benefit of all page 27

The essentials in brief

The Baloise Group’s net profit rose markedly by 81% to CHF

404 million (2004: CHF 223 million), equivalent to CHF 7.3

(2004: CHF 3.9) per share. All business units and lines of

operation contributed to this success. Return on equity

advanced to 10.3% (2004: 6.5%).

The non-life segment posted a profit before tax and financ-

ing costs of CHF 254 million, up by 6% (2004: CHF 239 mil-

lion). The net combined ratio (combined loss and expense

ratios) amounted to 100.0% (2004: 97.5%). It was severe-

ly burdened by the claims incurred in connection with the

major floods in 2005.

Life insurance recorded a profit before tax and borrowing

costs of CHF 151 million (2004: CHF 68 million), despite the

continuously low interest rate environment. The embed-

ded value improved to CHF 2,360 million. The value of

new business amounted to CHF 12 million, with a margin

of 5.3%.

The banking sector achieved a profit before tax and bor-

rowing costs of CHF 77 million (2004: CHF 33 million). Bal-

oise Bank SoBa increased its profit significantly.

The total business volume (including unit-linked life insur-

ance) came to CHF 7,394 million (2004: CHF 7,384 million).

The volume from non-life insurance amounted to CHF 3,055

million (2004: CHF 3,065 million). This is a reflection of

our “profit before growth” business policy. The life insur-

ance business volume rose to CHF 4,338 million (2004:

CHF 4,319 million), with the extremely low interest rates

exerting a dampening influence on growth. Unit-linked life

insurance advanced by 25%.

Investment income posted a performance of 5.0% (2004:

4.3%).

Shareholders’ equity increased by 26% to CHF 4.4 billion.

The solvency margin amounted to 309% (2004: 242%),

three times the legally required minimum.

In line with our earnings-related distribution policy, we will

propose to the Annual General Meeting a dividend of CHF

2.20 (2004: CHF 1.10) per share.

In view of ongoing operational progress and based on

our cautiously optimistic assessment of financial market

developments, we are striving for a return on equity of 15%

by 2008. The net combined ratio is to be brought to a lev-

el below 100%.

Bâloise-Holding Annual Report 2005 – Business Review

Profit/loss after tax and before minority interests 200–2005

Key figures at a glance

750

625

500

375

250

125

–125

–250

–375

–500

–625

–750

6
0
4

8
9

3
2
2

4
0
4

2
3
6
–

Income statement

Total premium income (gross)

of which: Non-life

of which: Life

Investment-type premiums

Consolidated annual profit

Balance sheet

2004
(restated)*

2005

+/– %

6,941.3

6,839.1

–1.5

3,065.1

3,055.4

–0.3

3,876.2

3,783.7

443.0

223.3

–2.4

25.1

554.4

403.5

80.7

Investments (incl. investment-type insurance)

53,543.9

56,470.1

42,825.8

44,721.1

3,497.8

4,391.3

25.5

5.5

4.4

Actuarial provisions

Shareholders’ equity

2001

2002

2003

2004

2005

in CHF million

Assets under management

Total assets under management

60,875.8

64,657.8

6.2

Indexed share price development Bâloise-Holding,

registered 200–2005

in CHF million

Ratios

120

100

2001

2002

2003

2004

2005

Bâloise-Holding, registered2

SWX SP Insurance PR INDX

Swiss Market Index

Return on equity (ROE)

On equity as shown in the balance sheet

Excl. unrealized gains/losses

Combined ratio non-life (net)

Combined ratio non-life (gross)

Actuarial reserve ratio non-life

in percent

Embedded value life insurance

Value of insurance portfolio

Adjusted equity

Solvency costs

Total

1 December 29, 2000 = 100

2 Adjusted after 1:10 split of July 24, 2001

of which: Value new business

Distributions 200–2005

in CHF million

Key share data

6.5

6.8

97.5

93.0

179.6

10.3

11.4

100.0

100.6

187.0

1,181.7

1,072.9

1,400.3

1,761.9

–445.2

–475.1

2,136.8

2,359.7

15.2

12.0

500

450

400

350

300

250

200

150

100

6
3
1

0
5

Shares issued as at 12.31. in units

55,307,150 55,307,150

Equity per share as at 12.31. in CHF

Consolidated annual profit per share in CHF

Price at year-end in CHF

63.6

3.9

79.8

7.3

52.50

76.75

Market capitalization as at 12.31. in CHF million

2,903.6

4,244.8

Price-earnings ratio

Dividend per share in CHF

1 Based on proposal to the Annual General Meeting

3
9
2

3
3
1

2
2

3
3

1
6

Number of staff

Total per 12.31.1

2001

2002

2003

2004

2005

Of which Switzerland

in CHF million

Of which other countries

13.5

1.1

10.5

2.21

7,609

3,632

3,977

7,548

3,579

3,969

Dividends paid

Nominal value repayments

Share repurchases

* The previous year’s figures have been restated in accordance with the modified IFRS regulations.
1 The mode of determining the number of employees changed in 2004. The numbers are now stated in terms of

full-time equivalents.

The Baloise in five attractive markets

n Hamburg

n Antwerp

Bad Homburg n

n Luxembourg

n Basel

n Solothurn

Vienna n

Zagreb n

Switzerland

Basler Versicherungen

Baloise Bank SoBa

1of which 253 Group

Full time
equivalents

3,2771

302

Germany

Deutscher Ring

Basler Securitas Versicherungen

1,6632

1,191

Premium volume*

3,819

–/–

1,052

1,058

Belgium

Mercator Verzekeringen

2incl. participating interests

Luxembourg

Bâloise Assurances

Austria (incl. Croatia)

Basler Versicherungen

* in CHF m

7092

658

120

286

128

The Baloise Group, headquartered in Basel, Switzerland,

operates in continental Europe. It provides insurance and

pension solutions primarily for private individuals and

Belgium
Mercator, domiciled in Antwerp, is a significant player in
the Flemish insurance market. It provides top-quality sup-

small and medium sized enterprises. The Group’s strate-

port for local professional brokers. Its wide range of per-

gic focus is on sustainable, income-oriented growth. Core

sonal and property insurance products is targeted pri-

markets are Switzerland, Germany, Belgium, Austria and

marily at private individuals and small and medium sized

Luxembourg.

enterprises.

Switzerland
Basler Switzerland, domiciled in Basel, is one of Switzer-
land’s leading insurers and the largest business unit within

Luxembourg
Bâloise Luxembourg is an established provider of life, per-
sonal and property insurance in the Grand Duchy of Luxem-

the Baloise Group. Its insurance and pension solutions for

bourg. It serves both private and business clients. It also

individuals and small and medium sized enterprises are

provides life insurance in other EU countries under the EU’s

supplemented by matching banking products and services
provided by Baloise Bank SoBa.

freedom of services regime.

Germany
The Baloise maintains two business units in the German
market. Basler Securitas in Bad Homburg offers predom-
inantly personal and property insurance for private indi-

viduals, small and medium sized enterprises, and select-
ed industrial clients. Deutscher Ring in Hamburg focuses
on comprehensive insurance and pension solutions for pri-

vate individuals. The unit’s own sales force is supplement-

ed by partnerships with the brokerage organizations OVB

and Zeus.

Austria (incl. Croatia)
Basler Austria in Vienna provides private and business cli-
ents with a wide range of insurance and pension solutions.

It is a leading insurance provider for medical practitioners.
In this market segment, Basler osiguranje has been oper-
ating successfully in Croatia for five years.

Bâloise-Holding Annual Report 2005 – Business Review

Annual Report 2005 – Business Review

Contents

Dear Shareholders

Rolf Schäuble and Frank Schnewlin present

their views on the business results

Baloise shares

Review of Business Year 2005 - The Baloise Group

Review of business year 2005

Overview

Non-life insurance

Life insurance

Banking

Shareholder’s equity, taxes

Outlook

Investments

Market Developments

Switzerland

Basler Switzerland

Baloise Bank SoBa

Sales agents and the Customer Value Model

Germany

Basler Securitas

Deutscher Ring

Claims optimization at Basler Securitas

Belgium and Luxembourg

Mercator, Belgium

Bâloise Luxembourg

PolyCare – (r)evolution in Luxembourg

Other countries

Austria and Croatia

Reinsurance, financing companies and equity holdings

Human Resources

Sustainability

Corporate Governance

Group Compliance

Corporate Governance Report

Board of Directors

Management Structure

Organization

Corporate Executive Committee

Management Information

Bâloise-Holding Annual Report 2005 – Business Review

D E A R S H A R E H O L D E R S

A successful duo:

Chairman of the Board Rolf Schäuble (left) and

CEO Frank Schnewlin look back on an excellent business year.

The Baloise raises its net profit by 81% –

despite major floods

in the following, Chairman of the Board Rolf Schäuble and Ceo frank Schnewlin express
their pleasure in another excellent business year for the Baloise Group.
Amounting to CHf 404 million, the net profit again recorded a marked increase.

Did you achieve your targets in 2005?
R o L f S C H ä u B L e : We had an excellent year. Our profit again

on equity of at least 10% by the end of 2006, a year ahead of

schedule. This is all the more remarkable in light of our solid

rose substantially. All business lines and units made a signifi-

capital structure: our shareholders’ equity grew by 26% and our

cant contribution to our earnings. The stock exchange reward-

solvency margin at 309% is three times greater than required

ed our performance: the Baloise share price increased 46.2%,

by law.

more than our benchmark indices.

f R A n k S C H n e w L i n : We have in fact exceeded our most impor-

What were the highlights of the 2005 financial year?

tant targets. We increased profit by 81% despite the CHF 68 mil-

lion impact before tax of the disastrous floods in Switzerland,

Where do you see an additional need for action?
R o L f S C H ä u B L e : As an insurance man to the bone and

Germany and Austria. We reached our goal of realizing a return

Chairman of the Baloise I am proud that we were able to

help so many of the victims of the terrible flooding so effi-

higher, enabling us to attain an even more solid financial

ciently. Although we are a business minded, exchange list-

base. We see a need for action primarily in two areas: first

ed company and must satisfy the stringent requirements

of all, we must come to an even more profound under-

of our investors, we must never forget that we also have

standing of risks and use the value-generating potential

to take charge of situations like this one for the good of

of our customer relationships with a greater precision. And

the community. The fact that we were able to do both is

secondly we must grow in those segments where our target

proof of the excellent shape our company is in. All this was

customers are to be found.

only feasible because of the outstanding work performed

by our staff and managers.

You have again substantially raised your profit.

f R A n k S C H n e w L i n : We have seen improvements through-

out our core insurance and pension business. All of our

How do you assess the quality of this result?
f R A n k S C H n e w L i n : Our profit surge of 81% is truly

business units are profitable and in excellent shape and

remarkable and is rooted in solid performance in our core

the contributions to our bottom line are evenly distribut-

business. However, we also experienced extraordinary

ed among them. We have substantially improved our self-

secondary effects: the claims from the major floods had

financing ability and our reserve ratio is also considerably

an adverse effect, while the sale of equity holdings in Bel-

Bâloise-Holding Annual Report 2005 – Business Review

D E A R S H A R E H O L D E R S

gium, the expiry of shareholder commitment agreements

similar risk-based models. We consciously take clearly

and the one-off reversal of credit risk allowances produced

identifiable risks in order to optimize our profitability and

positive effects. We will certainly continue to have such

utilize our excellent risk-bearing capacity. This provides

effects in future — they are in the very nature of our busi-

our shareholders and customers with an attractive return

ness and of the IFRS accounting rules, which do not permit

on their invested capital or premiums paid.

provisions for fluctuations. But we are striving to keep our

earnings performance as sustainable as possible.

How do you plan to generate growth in the next few years?

How would you assess your capital situation and what are

your dividend distribution policies?
R o L f S C H ä u B L e : Our shareholders’ equity has grown by

Where do you see opportunities for expansion?
f R A n k S C H n e w L i n : Organic profitable growth is a prior-

ity for us. In our core markets the focus is on growth in

business sectors with high added value, selectively sup-

26%, meaning that we were able to significantly add to our

plemented by acquisitions. Our plans include using cross-

capital base. Although we see solid financial resources

and upselling to improve penetration of our target custom-

as important for our company’s lasting prosperity, we will

er segments. This is precisely where we are focusing our

always be looking for new ways to best leverage our capital

sales efforts, which are increasingly based on measurable

in order to deliver added value — just as our shareholders

customer value.

“We assess all our

acquisitions according

to strict added-value criteria.”

R o L f S C H ä u B L e : Of course we will also utilize future

opportunities for growth through acquisition of companies

or insurance portfolios, as we did in 2005, for example, by

acquiring MONEYMAXX Lebensversicherungen in Germany

from the Dutch Aegon Group. This portfolio consists large-

ly of unit-linked insurance, putting it squarely where we are

focusing in our life insurance segment. We assess all our

rightly expect. We have a policy of income-based, continu-

acquisitions according to strict added-value criteria.

ing dividend distribution and we supplement cash divi-

dends with additional distribution methods such as share

How do you see the outlook in your insurance lines and

repurchases and options. We generally distribute one-

third of our annual net profit, taking self-financing of Group

your banking activities?
f R A n k S C H n e w L i n : Based on our solid balance sheet and

growth into account. We will request the Annual General

reserves, we see our earning power developing very well in

Meeting to double the dividend to CHF 2.20 per share.

all business segments. Thanks to our progressively refined

risk selection process and the integration of our custom-

How are you managing your capital? What do regulations

er value model in all our business units, we are continual-

such as Solvency II or the Swiss Solvency Test mean for

ly improving the quality of our insurance portfolio. This will

you?
R o L f S C H ä u B L e : For years we have been managing our

prevent any massive damage to our earning power through

price erosion. We also assess our banking business posi-

capital in accordance with the business risks incurred by

tively as we have seen a continuous increase in its earning

our insurance activities and our investments. Regulations

power in the past few years. Baloise Bank SoBa ought to,

such as Solvency II in the European Union or the Swiss Sol-

for example, attain a target return on equity of at least 10%

vency Test have the same objectives. We welcome these

in 2006.

endeavors as their implementation will enhance confi-

dence in our industry. However, these regulations also

How do you proceed in your investments with regard to

have a side that we find annoying because it needlessly

limits our freedom to do business, without offering the cli-

interest rate sensitivities?
R o L f S C H ä u B L e : We monitor interest rates and their effect

ent any appreciable advantages. The guaranteed minimum

on investments closely as part of our risk management pro-

interest in the Swiss group life insurance business or the

cedures. However, I would like to put the effect of interest

so-called unisex rate in Germany are cases in point. Our

fluctuations on the market value of bonds into perspective.

message to the regulatory bodies is: moderation, please.

Our business depends on recurring investment income, so

f R A n k S C H n e w L i n : We learned a good deal from the

we generally hold bonds to maturity. That is why we have

stock market crash of a few years ago and have made our

classified roughly 32% of our fixed-interest securities as

asset and liability management even more stable. So Sol-

“held to maturity”. This reduces the effect of market fluctu-

vency II and the Swiss Solvency Test are fundamentally

ations on our shareholders’ equity.

nothing new for us because we are already working with

D E A R S H A R E H O L D E R S

f R A n k S C H n e w L i n : As we anticipate rising interest rates

in the medium term, we have a slightly shorter duration for

our investments than for our liabilities, which enables us

to profit more quickly from interest rate hikes. This, how-

ever, requires more equity capital, so our strong balance

“ We are striving for a

return on equity of 15% by 2008.”

sheet is a key advantage. The Swiss Solvency Test will cre-

ities, for example in scoring, risk selection, claims man-

ate greater awareness in the insurance industry of asset

agement, or in managing sales based on customer value.

and liability management. In contrast to the traditional

But we haven’t yet crossed the finishing line. In 2006 and

solvency regime, the SST model incorporates correlations

in the coming years, our operational priorities will contin-

between assets and liabilities.

ue to be improving and cementing customer loyalty by pro-

viding first-class service and advice. Over time we want to

What opportunities do you see in the equity markets and

become the best in this field.

how does this influence your investment policies?
R o L f S C H ä u B L e : Historically shares have always outper-

formed other forms of investment in the long term. But the

Where is your strategic focus in future?
R o L f S C H ä u B L e : Our long-term focus is definitely on our

most recent stock market crash taught us that we need to

target of becoming and remaining one of the most profit-

take our profits during an upswing instead of losing them

able insurers, and the key lies in the exceptional quality of

in the next market correction. Accordingly we must actively

our operational business. This may not sound particular-

manage the proportion of equities in our investment port-

ly spectacular, but it is precisely what people expect from

folio.

us: predictability by providing enduring outstanding per-

f R A n k S C H n e w L i n : Because we believe that equity mar-

formance.

kets will remain an attractive place to invest and because

of our excellent risk-bearing capacity, we aim to place 10–

15% of our investment portfolio in equities. After all, equi-

ties are real assets because they are backed by enter-

prises. In addition to equities, other real assets such as

investment properties play an important role in our port-

folio. In our investment policies we have to find the right

balance between covering the claims of policyholders, cre-

ating attractive terms for our life insurance products, and

meeting the dividend expectations of our investors. Look-

ing at the strong three-year upward trend in the equity mar-

kets and the high proportion of shares in our investment

portfolio compared to the industry average, we will be

making adjustments in line with market conditions.

What do you want to achieve in 2006 and in the following

years? What are your operational priorities?
f R A n k S C H n e w L i n : We are striving for a return on equity

of 15% by 2008. This target is backed by a return on equi-

ty from business operations of at least 10% and a net com-

bined ratio of under 100%. Given that the stock market has

been steadily rising for three years already, we will actively

adjust to market our stock holdings, which are high in com-

parison with the industry average. An additional contribu-

tion to the return on equity by 2008 is expected from our

active asset and capital management. After all, we want

to become the preferred and trusted partner of our target

customers and sales partners. We are aiming for above-

average growth in the target customer segment and in

unit-linked life insurance. A great deal of groundwork has

been done in recent years. We have acquired new capabil-

Bâloise-Holding Annual Report 2005 – Business Review

D E A R S H A R E H O L D E R S

Baloise shares

46% rise clearly outperforms indices

Baloise shares posted a highly gratifying price increase of 46.2% during 2005. Performance
was 10.3 percentage points higher than that of the Swiss stock exchange’s
relevant sector index, which advanced by 35.9%. The Swiss Market index SMi rose by 33.2%.

On December 29, 2005, Baloise shares reached a three-

with the SWX SP Insurance PR INDX putting on 7.5%. One of

year peak of CHF 77.00 and went on to close the year at CHF

the reasons for this was lower interest rates, which damp-

76.75 on December 30. We regard this performance as an

ened demand for insurance stocks in the second quarter in

expression of the faith of our investors in the operational

particular. With this in mind, the performance of Baloise

progress and convincing results that we have achieved.

shares becomes all the more satisfying.

Baloise shares – and the insurance industry as a whole

The insurance sector suffered a number of heavy blows

– defied all of the negative factors of 2005, particularly

as we moved into the second half of the year. Flooding in

the devastating natural disasters around the globe. Pay-
outs totaling more than CHF 100 billion1 made 2005 the
most expensive year in the history of the global insurance

industry. The Swiss Insurance Association estimates that

Switzerland between August 20 and 24 resulted in record

insurance claims. A short time later, Hurricane Katrina in
the USA caused insured losses of around CHF 60 billion1.
These figures compare with claims of approximately CHF

August’s floods in large parts of Switzerland cost private

27 billion in the wake of the terrorist attacks of September

insurers at least CHF 1.3 billion. Furthermore, stock mar-

11, 2001 (at 2005 prices and exchange rates). The equi-

kets in 2005 were impacted by the strengthening of the

ty markets responded with great restraint to these natu-

US dollar and high energy prices. The interest differential

ral disasters. This was due to some degree to expectations

compared with Europe boosted the US currency and there-

of higher premiums. The insurance sector was nonethe-

by helped to improve the competitiveness of European

less unable to keep pace with the market as a whole dur-

exporters. In late August, the destruction caused by Hurri-

ing the third quarter, underperforming the SMI by 5.5%.

cane Katrina drove already-high oil prices even higher.

Fears of inflation and the subsequent increases in base

Baloise shares

Ticker symbol: Tk, B: BALN; R: BALZn

Nominal value: CHF 0.10

Security no.: 1.241.051

ISIN: CH0012410517

Listing: virt-x

Share type: registered shares

interest rates in the EU and Switzerland reversed the trend

during the fourth quarter. Since insurers welcome rising

interest rates, their share prices began to outperform the

market once again. As a result, the sector index advanced

by 20.6% during the last three months of the year, while

the SMI went up by 9.9%. In spite of natural disasters, the

insurance industry index thus rose by 26.4% overall during

the second half of the year, compared to the SMI’s 21.3%

advance. This trend was sustained even though interest

rates returned to a downward path.

The first half of 2005 saw Baloise shares record a perfor-

There were no significant changes to the Baloise’s

mance of 21.9% – attributable to the positive response of

share-holder base during the reporting period, and the

investors to full-year results for 2004. By comparison, the

free float remains at 100%. No single shareholder owns

SMI rose by 9.8% during the same period. Share prices in

more than 5% of the company’s shares.

the Swiss insurance sector overall were also rather weaker,

1Source: Swiss Re

D E A R S H A R E H O L D E R S

Indexed share price development Bâloise-Holding,

Significant shareholders at December , 2005

registered 200–2005

120

100

2001

2002

2003

2004

2005

Bâloise-Holding, registered2

SWX SP Insurance PR INDX

Swiss Market Index

1 December 29, 2000 = 100

2 Adjusted after 1:10 split of July 24, 2001

Chase Nominees Group

Nortrust Nominees Ltd.

Mellon Bank N. A.

Investors Bank & Trust

HSBC Overseas Nominee UK

Cominvest Asset Management

UBS Group

CS Group

in percent

Total
holding

Share of
votings rights

5.5

3.1

2.7

2.6

2.5

2.0

<2.0

2.0

0.0

2.0

0.0

<2.0

Share statistics

Net profit per share1

in CHF

Consolidated equity per share2,3 in CHF

Dividend per share in CHF

20015

7.3

97.4

2.4

2002

–11.6

56.3

0.4

2003

2004 (restated)

1.7

60.6

0.6

3.9

63.6

1.1

2005

7.3

79.8

2.25

Total shares issued in units

55,307,150

Number of shares entitled to dividend in units

55,307,150

Time-weighted number of shares entitled to dividend in units

56,087,855

55,307,150

Average number of outstanding shares1 in units

55,286,619

54,837,865

54,794,476

54,001,678

54,280,154

Daily volume traded shares in CHF million

Number of shareholders

Treasury stock in shares

15.4

9,725

21.4

11,974

23.6

15,027

24.2

16,251

26.8

14,614

560,000

702,540

414,303

1,176,237

887,879

Price at year-end in CHF

High in CHF

Low in CHF

Market capitalization in CHF million

Consolidated equity [since 2004 incl. minority interests] in CHF million

Ratio, market capitalization/consolidated equity3

Ratio, market capitalization/gross premiums

Return on equity (ROE)

On equity as shown in the balance sheet4 in percent

Excl. unrealized gains and losses4 in percent

Dividend yield in percent

Price-earnings ratio [based on price at year-end]

Pay-out ratio in percent

153.00

182.60

110.00

8,461.9

5,384.8

1.57

1.28

6.3

10.5

1.6

20.1

32.8

55.00

155.50

46.30

3,041.9

3,088.1

0.99

0.42

–15.0

–18.3

0.7

n.a.7

51.65

63.20

25.45

2,856.6

3,319.8

0.86

0.39

2.9

1.2

30.9

36.3

52.50

63.10

45.75

2,903.6

3,497.8

0.83

0.42

6.5

6.9

2.1

13.5

28.9

76.75

77.00

52.70

4,244.8

4,391.3

0.97

0.62

10.3

11.5

2.95

10.5

30.75

All figures as per calendar year, at December 31. Figures rounded up/down; calculations based on precise figures.

1 See Financial Report section 36

4 From 2004 calculated on the basis of average equity incl.

6 Adjusted due to share split

2 Average number of outstanding shares

3 Calculated on the basis of consolidated equity before

minority interests

minority interests net of the dividend sum of the previous year

5 To be proposed to the Annual General Meeting

7 Not significant

Bâloise-Holding Annual Report 2005 – Business Review

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

The Baloise Group

Strong earnings despite natural disasters

The 2005 financial year was a very successful one for the Baloise Group. Profit rose by 81% to
CHf 404 million despite a heavy claims burden due to catastrophic flooding in Switzerland, Germany
and Austria. All business units and lines made a substantial contribution to earnings.
Shareholders’ equity grew by 26% while return on equity rose to 10.3%. our capital base continued to
improve, and at 309% the solvency margin reached almost triple the legally required minimum.
investors showed confidence in Baloise shares, whose price rose by 46.2% during the course of the
year, outpacing the relevant stock market indices.

overview
The solid operating performance of all business units pro-

remained unchanged with 53% coming from Switzerland,

vided the foundation for our remarkable 81% increase

30% from the Basler Securitas and Deutscher Ring units

in profit to CHF 404 million (2004: CHF 223 million). The

in Germany, 15% from Belgium and Luxembourg and 2%

Group-wide strategic focus on operational excellence has

from Austria.

proven highly effective. Its objective is to gain higher com-

The Baloise Group’s consolidation base grew in the

petence levels than our competitions in our core insur-

second half of the year with the acquisition of MONEY-

ance and pension business and thereby achieve outstand-

MAXX Lebensversicherung AG in Düsseldorf by Deutscher

ing and sustainable profitability levels. The pillars of this

Ring Lebensversicherungs AG of Hamburg from the Dutch

strategic thrust are management of our sales force and dis-

Aegon Group on July 14, 2005.

tribution partners with a clear focus on added value, risk-

aligned products and prices, efficient claims management

and continual improvement of business processes.

non-life insurance
The non-life segment (property and casualty) achieved

Various other factors also had an impact on earnings.

a profit before tax and borrowing costs of CHF 253.6 mil-

Claims resulting from severe floods had a net adverse

lion (2004: CHF 239.2 million). The business units out-

effect of CHF 68 million on our operating income, eroding

side of Switzerland as well as strong investment income

profit from our business in Switzerland. In connnection

and cost reductions helped offset the record expense of

with the refinement of statistical methods, the actuarial

the devastating flooding in Switzerland, resulting in prof-

provisions were reinforced, in particular for losses in the

it growth of 6.0%. The extraordinarily high damage claims

personal insurance lines. The sale of non-strategic equi-

were also the reason for the rise in the combined ratio

ty holdings and expiry of shareholder agreements in Bel-

to 100.6% gross (2004: 93.0%) and 100.0% net (2004:

gium and one-off reversals of allowances all had a posi-

97.5%). With the exception of Switzerland (as a result of

tive effect.

the natural disasters) and Basler Securitas, the gross fig-

The total volume of business – including unit-linked life

ures of the other business units as compared to the previ-

products, which continued to grow – came to CHF 7,394

ous year either held steady or improved, with the Baloise

million (2004: CHF 7,384 million). Premium income in

in Luxembourg showing the strongest increase. We contin-

accordance with IFRS accounting amounted to CHF 6,839

ued to improve operational efficiency.

million (2004: CHF 6,941 million), a decline of 1.5% in CHF.

Premium income in accordance with IFRS accounting

Business volume in the non-life segment nearly equalled

came to CHF 3,055 million (2004: CHF 3,065 million). Pre-

the previous year’s level, while volume advanced slightly

mium revenues grew in Switzerland, at Deutscher Ring and

in the life insurance segment despite weak demand in spe-

especially in Austria and Luxembourg. Premium growth

cific areas. Non-life accounted for 41% of volume (2004:

was generally reined in by our “profit before growth” poli-

42%) while life insurance made up 59% (2004: 58%).

cy in writing new business. Belgium, Basler Securitas and

The country units’ shares in the total business volume

specific product segments showed negative effects result-

3 Specific implementation projects in Switzerland (pages 18 ff.), Germany (pages 27 ff.)
and Luxembourg (pages 31 ff.) are described in detail in this Business Review.

ing from intense price pressure.

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

Life insurance
The life segment achieved a profit before tax and borrow-

Stock market performance

January 1 – December 31, 2005

ing costs of CHF 150.7 million (2004: CHF 67.5 million). In

the year-on-year comparison it is important to take into

account the CHF 30 million impact on the prior year’s result

of the introduction of the “legal quote” in the Swiss group

life business. The adjustment of surpluses (policyholder

bonuses) for individual life policies in line with low inter-

est rates and strong investment income contributed to the

improved performance. In this business segment as well,

140

130

120

110

100

we only accept new insurance business that meets our ROI

1.1.2005

12.31.2005

requirements. This policy has had a positive effect on our

earnings.

The total volume of business including unit-linked life

insurance products came to CHF 4,338 million (2004: CHF

4,319 million). The main source of this slight growth was

the upward trend in unit-linked insurance products, where

volume rose by 25% on the prior year to CHF 554 million.

The life insurer MONEYMAXX, which was acquired from the

Dutch Aegon Group by Deutscher Ring, also made a sub-

SPI Index

MSCI EMU

MSCI ROW

stantial contribution to this promising business area: its

Currencies development

January 1 – December 31, 2005

volume is derived largely from unit-linked products. Pre-

mium volume in accordance with IFRS accounting came to

CHF/USD

CHF/Euro

CHF 3,784 million (2004: CHF 3,876 million), a decline of

2.4%, testimony to a continuing difficult market environ-

ment characterized by low interest rates and correspond-

ingly weakened demand for life insurance products with

a savings component. The individual life business on the

Swiss market saw a particularly steep decline while the

group life business rose to slightly above last year’s level.

1.35

1.30

1.25

1.20

1.15

1.10

1.05

1.57

1.56

1.55

1.54

1.53

1.52

Our strongest growth markets were Belgium and Austria.

1.1.2005

12.31.2005

Deutscher Ring’s premium revenues were slightly above

the 2004 figure, marking an end to the premium erosion

Euro: +1 Swiss cent

prevalent in recent years.

US dollar: +17 Swiss cents

The embedded value of the life business rose from CHF

2,137 million to CHF 2,360 million in the year under review.

Lower projected investment income (CHF -244 million) was

offset by the more positive than anticipated capital mar-

ket developments in 2005 (CHF +169 million) and reduced

surplus participation (CHF +77 million). The value of new

Interest rate development

January 1 – December 31, 2005

business amounted to CHF 12.0 million. The margin of new

business declined slightly to 5.3% (2004: 5.8%).

EUR

4.00

3.75

3.50

3.25

3.00

2.75

CHF

2.75

2.50

2.25

2.00

1.75

1.50

1.1.2005

12.31.2005

Yield on 10-year government bonds Germany in EUR

Yield on 10-year government bonds Switzerland in CHF

Bâloise-Holding Annual Report 2005 – Business Review

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

Premium income (gross) by regional segment 2005

in percent

outlook
We are striving for a return on equity of 15% by 2008. This

target is backed by a return on equity from business oper-

ations of at least 10% and a net combined ratio of under

100%. Given that the stock market has been steadily ris-

ing for three years already, we will actively adjust to market

our stock holdings, which are high in comparison with the

industry average. An additional contribution to the return

on equity by 2008 is expected from our active asset and

capital management.

We are aiming for above-average growth in the target cus-

tomer segment and in unit-linked life insurance. A lot of

groundwork has been done over the past few years, so that

Switzerland

Germany

Benelux

Other countries

Total

in CHF m

2004 (restated)

2005

+/– %

we can now boast advanced skills in areas such as sco-

3,921.3

3,819.3

2,120.9

2,110.1

743.0

156.1

736.3

173.4

–2.6

–0.5

–0.9

11.1

–.5

ring, risk selection, claims management, and distribution

on the basis of customer value. But there is still a lot to be

done. For 2006 and the years beyond, our operational prio-

rity will remain set on strengthening and expanding custo-

mer loyalty through top-of-the-range services and advice.

In this field, we want, over time, to be the best.

Banking
The banking segment achieved a profit before tax and bor-

rowing costs of CHF 77.2 million (2004: CHF 33.2 million).

The main contributor to the strong operating performance

was Baloise Bank SoBa whose profit climbed by 46.4%.

It achieved growth in all business segments while keep-

ing costs and credit risks low. Baloise Asset Management

and Baloise Fund Invest jointly made a significantly high-

er contribution of more than CHF 20 million. The one-off

effect of a CHF 29 million reversal of credit risk allowanc-

es at Deutscher Ring Bausparkasse also contributed to the

segment‘s profit. In all other respects the Bausparkasse is

developing according to plan.

Shareholders’ equity
The shareholders’ equity of the Baloise Group rose by

25.5% to a gratifying CHF 4.4 billion in the year under

review. The main sources of the upswing were the annu-

al profit and a positive trend on the capital markets, par-

ticularly in equities. The Group solvency ratio was 309%

taking banking assets into account. This gives the Baloise

Group a very solid equity base.

Taxes
Tax expenses for 2005 came to CHF 72.4 million, including

current taxes of CHF 112.9 million and deferred tax income

of CHF 40.5 million. Measured against annual profit, tax

expenses are very low. Various effects are responsible for

this circumstance, for example tax-free capital gains in

Belgium.

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

Investments

Thanks to a buoyant economic climate and a
sharp rise in company earnings, the global equity
markets put in an excellent performance. The
upsurge is reflected in our investments: The
investment result for fiscal 2005 rose by 14% to
CHf 2,654.0 million year on year.

Own capital investments by category 2005

in percent

Reduced income owing to lower reinvestment interest

2004 (restated)

2005

rates was offset by realized investment gains amounting

Fixed-interest securities

to a net CHF 353.8 million (2004: CHF 261.2 million). This

corresponds to 0.66% of the average investment total.

Derivatives

The investment operating result improved by 14% to CHF

Investment properties

2,654.0 million, the associated investment performance

Mortgage loans

in accordance with IFRS thereby coming to 5.0% (2004:

Policy and other loans

4.3%).

The Swiss Performance Index shot up by 35% year on year

while the European equity index (MSCI EMU Index) gained

over 26%. The Standard & Poor’s 500 index only managed

to generate a return of 3%. Owing to the USD’s almost 16%

rise against the CHF, however, the gain for Swiss investors

was more than 18%. The performance of emerging markets

Alternative financial assets

Other short-term capital investment,
cash and cash equivalents

40.1%

39.1%

8.0%

0.5%

10.6%

0.1%

10.7%

10.3%

18.7%

18.1%

13.7%

14.4%

3.1%

3.9%

5.2%

3.5%

shares was especially impressive: these advanced by 34%,

Own capital investments by category

or by 55% in CHF.

With the bond markets still exhibiting a demand over-

2004 (restated)

2005

+/– %

hang, yields on 10-year government bonds fell again from

Fixed-interest securities

21,023.8

21,219.7

their 2004 levels and stood at 1.97% (Switzerland) and 3.31%

4,163.6

5,716.2

0.9

37.3

(Eurozone). The European bond benchmark (Euro BIG index)

Derivatives

264.9

48.6

–81.6

benefited from this movement, returning a performance of

Investment properties

5,619.2

5,581.7

–0.7

4.96%, or 5.57% expressed in Swiss francs. The Swiss Bond

Mortgage loans

Index (SBI) also rose again year on year, advancing by 3.15%.

Policy and other loans

9,798.3

9,833.1

7,197.2

7,802.4

0.4

8.4

In the United States, however, yields on 10-year US treasuries

Alternative financial assets

1,636.1

2,122.8

29.7

rose only marginally, edging up to 4.37%.

On the currency front, the USD staged a significant recov-

Other short-term capital investments,
cash and cash equivalents

2,697.1

1,899.8

–29.6

ery while the EUR fluctuated only very slightly against the

Total

52,00.2

5,22.

CHF. As we took the strategic decision at the beginning of the

in CHF m

year to hedge the major part of our US investments out of fun-

1 Excl. investment-type insurance

damental as well as risk considerations, we were able to limit

the exchange rate risk, but were largely unable to benefit from

the unforeseen surge of the US dollar. Conversely, our deci-

sion to hedge less than half the EUR exposures also proved

right, as the EUR spent a long time moving sideways against

the CHF within a narrow band: by year-end it had advanced

against the Swiss franc by 0.5% to CHF 1.5565.

This positive currency constellation, an excellent stock-

market showing and a solid performance by the other invest-

ment categories generated further growth in the Balo-

ise Group’s equity. At the same time, the risk situation also

improved substantially. With targeted investments and

growth in market value, the share allocation rose to 10.6% in

2005, up from 8.0% a year earlier.

Bâloise-Holding Annual Report 2005 – Business Review

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

M A R K E T D E V E L O P E M E N T S

In the mortgage field we were able – despite stiff competi-

tion – to acquire new business to take the place of much of

the loans falling due. Nevertheless, the portfolio’s mortgage

allocation slipped to 18%. Overall, low interest rates and

expectations of a rate hike resulted in a further shift towards

fixed-rate mortgages. On the Swiss market, we extended our

product range for fixed-rate mortgages to include 6-10 year

terms.

In the investment properties sector, higher demand from

institutional investors pushed up the prices of residential

property while demand for commercial properties eased. The

number of properties that meet our strict yield and risk crite-

ria is dwindling. As a result, we have launched several con-

struction projects of our own. In our international organiza-

tion, the lack of suitable properties and the need to diversify

our investments prompted us to invest in European institu-

tional real estate funds.

The allocation in fixed-interest securities rose to 39%

in the year under review. We have partially immunized the

resulting slight rise in the interest exposure against a rise

in interest rates by classifying part of the bonds as “held to

maturity” and the debt instruments and registered securities

as “loans and receivables”. Under the IFRS standards, these

instruments are stated according to the amortized cost meth-

od, thus reducing the impact of possible interest rate fluctu-

ations on the income statement. To diversify further, we con-

tinued to expand our holdings of alternative financial assets

(hedge funds, private equity), bringing the total allocation to

3.9%.

2005 was a very successful year for the funds operat-

ed by Baloise Fund Invest. Led by the equity-heavy portfoli-

os, all products recorded a positive performance. As in pre-

vious years, the majority (64%) of our funds outperformed

their competitors. On March 1, 2005 we launched BFI Cap-

ital Protect (CHF), which met with great interest among the

more defensive investors. In the space of only ten months,

over CHF 40 million flowed into this new and innovative pro-

tected-capital product. The volume of assets invested in the

BFI funds leapt ahead in 2005, due in particular to a merg-

er with Aegon International (SICAV). Assets invested in these

funds more than doubled during the year, reaching CHF 1.39

billion by the end of 2005.

R E V I E W O F B U S I N E S S Y E A R 2 0 0 5 – T H E B A L O I S E G R O U P

M A R K E T D E V E L O P E M E N T S

Switzerland

The severe floods and persistent low interest
rates resulted in a decline in profit before tax and
borrowing costs for the Baloise Group’s largest
business unit to CHf 96.6 million (2004: CHf 156.1
million). Baloise Bank SoBa experienced growth in
all its business segments and achieved a sig-
nificant increase in profit by 46.4% to CHf 21.8
million.

Key figures Switzerland

Gross premium income

of which: Life

of which: Non-life

Combined ratio non-life
(gross)1

Profit/loss before tax

in CHF m

1 in percent

2004
(restated)

3,921.3

2,640.2

1,281.1

93.1

156.1

2005

3,819.3

2,532.4

1,286.9

113.3

96.6

Basler Versicherungen
By implementing various measures Basler Versicherun-

life policies was very gratifying with growth of 67.2%. Pre-

gen appreciably increased its earning power, although

mium volume in accordance with IFRS accounting shrank

the severe floods and low interest rates took their toll on

by 4.1% to CHF 2,532 million (2004: CHF 2,640 million)

net profit. Priorities included consistently focusing sales

due to weak demand for single-premium policies in the

efforts on profitable target customer segments, streamlin-

individual life business as a result of low interest rates.

ing and managing the business portfolio from the perspec-

The individual life sector experienced a decline in premi-

tive of customer value and instituting new rates in line with

ums of 13.0% although the annual premiums in this dif-

the associated risks. We continued to improve claims pro-

ficult market were slightly up on last year’s level. Single

cesses and other operating procedures through a variety of

premium income lost significant ground as a result of both

measures including the implementation of new IT systems.

lower interest rates and a one-off effect: a stamp tax cam-

The premium volume totalled CHF 3,819 million (2004: CHF

paign in the second half of 2004 was not repeated in 2005,

3,921 million), a 2.6% decline attributable mainly to the

leading to lower premium revenue. In the group life sector,

life segment. Because of low interest rates, demand for sin-

premium revenue rose by 0.6%, which means that we actu-

gle-premium policies in the individual life sector was down

ally gained market share in this shrinking comprehensive

sharply from the previous year. With a premium volume of

insurance market. Increasing demand for comprehensive

CHF 1,287 million (2004: CHF 1,281 million) the non-life

insurance helped offset the loss of several major clients.

segment saw premium growth of 0.5%, a figure in keep-

The implementation of the new Swiss regulatory require-

ing with both the sluggish market and our “profit before

ments diminished the annual profit of the life insurance

growth” business strategy. There were marked gains in

segment for 2005 as did the continuing low interest rates.

transport and accident insurance from new business in

This trend prompted us to adjust the policyholder bonuses

the target customer sector while liability and motor vehicle

for insurance products with a savings component and for

insurance also posted growth thanks in part to a success-

pensions accordingly.

ful partnership with the Swiss Touring Club. We expect the

new motor vehicle insurance rates introduced on October

1, 2005 to boost our competitiveness in the target custom-

Baloise Bank SoBa
Baloise Bank SoBa held its ground very well in a harsh-

er segments. Premium income in property insurance was

ly competitive market and exceeded our expectations.

slightly down, largely as a result of terminated contracts

Growth in all business sectors along with lower costs and

in the industrial business. Premiums for health insurance

the net reversal of allowances in the lending business led

also declined as a result of legally mandated discontin-

to a substantial increase in profit. Baloise Bank SoBa’s

uation of the birth benefit as part of the daily sickness

return on equity including the results from our Focused

allowance in group health, along with portfolio restructur-

Financial Service Provider business model rose to 9.0%.

ing pursuant to actuarial requirements. The flood-related

The bank increased its share in the private banking market

claims were reflected in the segment’s underwriting per-

and held its position in the small and mediumsized enter-

formance: the combined ratio rose to 113.3% gross (2004:

prises segment. The volume of banking products and mort-

93.1%).

gages sold by the insurance sales force rose by 24.4% year

The business volume of the life sector (including unit-

on year. Our “insurance and banking” business model has

linked products) came to CHF 2,578 million (2004: CHF

won us some 11,700 new customers over the past three

2,668 million), a decline of 3.4%. The trend in unit-linked

years including 3,400 in 2005 alone.

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

Sales agents and the Customer Value Model

“Being a trusted partner of choice”

Giving a piece of spot-on information over the phone, pointing out a case of under-insurance,
or simply a friendly word when passing a customer in the street. Daniel Bieri, Jean-Marie Dumoulin and
Pasquale Zarra are sales agents in Switzerland with a passion for turning the Baloise’s strategy
into practice and maintaining close relationships with customers. A day in their life.

To become a trusted partner of choice, it takes close acquaintance
with the customer and his requirements, commitment and regular contact.

M A N Y O T H E R S W E R E S T I L L rubbing the sleep from their

For Jean-Marie Dumoulin, such emergency operations

eyes when Jean-Marie Dumoulin returned to the Baloise

are part and parcel of the kind of customer service he

General Agency in Fribourg with a pension scheme con-

believes in. Even if in this case the manager at the engi-

tract concluded at an engineering firm in his hands. After

neering firm had simply neglected the pension scheme

Dumoulin had started up his laptop in his office at half

issue for too long. “I’ve always had this philosophy of

past five like every morning, he saw an urgent message

building up close relations with key customers and so hav-

clamouring for attention. A client of many years needed to

ing a chance to look after the whole range of his insurance

have the occupational pension scheme for his firm settled

needs. This was an instinctive approach with no back-up

– that very day. At 7 a.m. Dumoulin was at the customer’s

tools. The fact that the Baloise is now pursuing this philos-

door with a ready-to-sign contract in his briefcase.

ophy in a structured manner with its new Customer Value

Model confirms that I’ve been on the right track all along.”

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

On the road again. Close contact with customers
cannot be maintained from the office alone.

The Customer Value Model (CVM) means that from now on

depends less on a company’s products and more on the

sales agents no longer have to rely on their intuition alone

quality of the services provided by staff members. Custom-

when it comes to classifying customers by risk parameters.

er service is a key competitive advantage.

The CVM system divides a sales agent’s portfolio into seg-

For Pasquale Zarra in Chur, Canton of Grisons, custom-

ments and provides all the relevant data of the most lucra-

er service is also of prime importance. At 7.30 a.m. he is

tive customers at a glance. With the help of this tool, the

organizing the coming day at his agency. Benefits are due

sales agent can address the requirements and expecta-

for payment in four endowment policies, and in the case

tions of the individual customer groups in a more target-

of four other customer contacts he is accompanying and

ed fashion. After all, you cannot offer more than standard

supporting a new staff member. What can an experienced

products and advice without being acquainted with the

sales agent like Zarra teach a newcomer on the one-hour

real needs of any individual customer. So the customers

drive up to Arosa about what it takes to succeed in this

benefit, knowing that they are “in good company”, as the

field? “You cannot earn money on every visit. First, the

claim goes, and so does the Baloise, since satisfied clients

foundations have to be laid.”

will easily be interested in further products and services.

While Zarra is preparing his documentation in Chur,

The Customer Value Model signifies a paradigm change

Daniel Bieri picks up the phone in Ostermundigen, 300

for the Baloise and its staff, away from the previously

kilometers to the west. A customer wants to thank him for

applied product-oriented approach. Instead of differen-

the useful information sheet on accident and health insur-

tiating by customer segments, the focus is on the profit-

ance he had devised for the 75 employees of her firm. It’s

ability of customer relationships. Nowadays, market image

nothing he will get paid for, but it belongs to the added

M A R K E T D E V E L O P M E N T S

“The Customer Value Model confirms that
I’ve been

on the right track all along.”

the shop window. “This is no sales talk,” Zarra insists, just

a chance to exchange a few personal words with Celestine

and her husband Fred. The latter had considered switching

J E A N - M A R I E D U M O U L I N

to another insurer, explains Zarra on his way to the shop

where Celestine sells her husband’s glass blowing art.

value he is prepared to offer his customers. “I want cus-

“After several changes at the Baloise agency, he was left

tomers to feel that I’m there for them.” Three years earlier

without personal contact.” Now Zarra has personally taken

he had initiated contacts with a large-scale client. It took

over the portfolio.

three years before he could, a few weeks ago, celebrate the

Jean-Marie Dumoulin, together with Christian Berset, is

first contract conclusion with his staff.

sitting in the meeting room of Yvan Menétrey, the director

Shortly before 9.30, Bieri is on the motorway heading

of Ascenseurs Menétrey SA, a firm producing customized

to the south of Berne. At 10 o’clock, he is due to present

lifts. They will be going through the terms of the new busi-

an analysis to the owner of a small construction company

ness liability insurance. Dumoulin already has the lift pro-

together with suggestions not only on how the company’s

ducer’s other insurance policies in his portfolio.

insurance coverage can be optimized, but also for improve-

“Today’s target is not necessarily the conclusion of a

ments in the owner’s personal pension scheme.

contract,” says Daniel Bieri before presenting his analy-

At the same time, Pasquale Zarra is walking through the

sis to the building contractor. “Quickly done business is

historic center of Chur to meet Celestine Meyer in her store.

often quickly gone business.” The discussions last for over

Her teenage son had accidentally kicked a stone through

an hour. “Raise the waiting period to 24 months (occupa-

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

tional benefit coverage); “According to the national acci-

dent insurance statistics, you are 0.92 percentage points

below last year’s figure” (accident insurance); “The insur-

ance sum of CHF 3 million is far too low for the business lia-

bility of a construction firm.”

For Daniel Bieri, such an analysis paves the way for

negotiations. The building contractor gives him clear

instructions to sort out the problem of insufficient busi-

ness liability coverage. Next week, they are scheduled to

“

I want customers to feel that
D A N I E L B I E R I”

I’m there for them

M A R K E T D E V E L O P M E N T S

Trust is gained only by proving your
competence. Good preparation and
in-depth analysis are the key.

meet again to finalize some of the details. “He was dissat-

sales manager, Ivan De Gani, are meeting for lunch recent-

isfied with the status quo, which gives me the chance to

ly announced his intention of cancelling his insurance pol-

prove that this is a genuine partnership,” explains Bieri.

icies with the Baloise. They now want to find out the rea-

“Any risks an entrepreneur can bear himself, he should

son why.

bear himself. My job is to take care of the rest.”

Jean-Marie Dumoulin is also combining lunch and busi-

Before going for lunch at one of Chur’s hotel restau-

ness. Claude Joye, the director of the La Providence old

rants, Pasquale Zarra passes by Franco Passanantes’

people’s home in the heart of Fribourg, wants to expand

stonemason’s workshop to discuss the washbasin dam-

the up-market home and needs insurance coverage for the

age in the bathroom. The hotel owner whom Zarra and his

building phase. Other topics during lunch include supple-

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

mentary accident insurance and Joye’s private pension

assurance that I will be broaching the right subjects when

plan. For ten years now, Dumoulin has been Joye’s contact

we meet next time”. And how does CVM help him struc-

in insurance matters. “My relationship is with Mr. Dumou-

ture his work and find the right kind of clients? “It helps me

lin, not with the Baloise,” says Claude Joye. When Dumou-

avoid unproductive work processes and approach sales

lin moved on to the Baloise four years ago, he was allowed

and advice talks with clearly defined selection criteria. Tar-

to take the Joye portfolio along. “In Switzerland, personal

get customer management is also a good tool for customer

relations play a far greater role in the insurance business

retention.” However, CVM also means additional adminis-

than for example in England.”

trative work. “Here I would like to offload some of the bur-

The Customer Value Model takes this into account. With

den to have more time to spend with customers.”

its CVM, the Baloise has created an efficient target cus-

In the late afternoon, Daniel Bieri has a meeting with

“

I don‘t promise

anything

I can‘t keep

”

Robert Wälti, his General Agent, who has just received the

provisional target figures for 2006. “Turning C custom-

ers into B customers and B customers into A customers

sounds simple in theory,” says Wälti. In practice it means a

lot of hard work. They discuss the possibility of organizing

an information event on the topic of occupational pension

P A S Q U A L E Z A R R A

schemes. Getting together a list of whom to invite will, at

least, be easy thanks to CVM.

After the meeting Bieri sits down at his desk with some

tomer management system. Pasquale Zarra, too, believes

thick files in order to prepare some analyses for the coming

it is a useful tool that adds transparency to his customer

week before calling it a day at 6 o’clock. He takes particu-

relations. “At the press of a button I get an overview of a

lar pleasure in analyzing the file of a business IT specialist,

client’s claim history and can see whether he pays his pre-

an Iranian who came to Switzerland as a student and took

miums on time. These are important factors when assess-

out a household contents policy with the Baloise in 1991

ing the quality of a customer relationship.”

with an insurance sum of CHF 20,000. One single contract.

Zarra’s conversation with the hotel owner preparing to

According to CVM a C customer, whom the agency in Zurich

turn his back on the Baloise is showing progress. The hotel

was happy to transfer to him. In the meantime, the man has

owner has asked for some counter-business in return for

become a Swiss citizen, is now in management position,

staying with the Baloise. “I don’t promise anything I can’t

and has inherited a seven-digit sum. Bieri laughs out loud

keep. This much I made clear to him.” Nevertheless, he has

and is already looking forward to their meeting. An overall

arranged a follow-up meeting with the man. “This custom-

counselling session has been arranged “Nobody ever both-

er is not lost to us yet.”

ered to contact him, although his policy expired in 2001.”

3 p.m. Bieri is back in his office. Time to write up the

Bieri had met this potential A customer at an information

details of the day’s customer visits. “This gives me the

event on pensions organized by the Iranian-Swiss man’s

«T R US T E D PA R T N E R S O F O U R TA R G E T C US T O M E R S »

In 2005 Baloise Switzerland introduced the Customer Value Model (CVM) for the first time in the form of a pilot

project. CVM classifies customer relationships by value-adding criteria and generates corresponding overviews.

All insurance contracts are included in the system and together reflect the “value” of the customer in question.

Based on the portfolio value, a statement is made on the profitability and loyalty of the customer. A customers

are those with a relationship of proven value to the Baloise, B and C customers are those with fewer contracts

and/or a less longstanding relationship with the company. The Customer Value Model is supplemented by a val-

ue in terms of development potential: To what extent does the relationship have development potential and is the

customer receptive for further business with the Baloise (cross-selling)?

The Customer Value Model is one of the Baloise’s strategic tools in the Swiss market. The underlying goal is mar-

ket leadership in target customer management.

M A R K E T D E V E L O P M E N T S

employer, himself a customer of Bieri’s. After the event,

won’t find that anywhere else nowadays.” As to the oth-

the former student contacted Bieri of his own accord.

er reservations the client has raised – premium reduction

Jean-Marie Dumoulin is using the early evening hours

and changed terms of payment – “I’m sure we’ll find a way

to update his customer files and organize some forthcom-

around the problems. After all, we want to retain her as a

ing meetings when the phone rings with a customer on the

customer and stay her trusted partner of choice in all mat-

line. He has just totaled his BMW. Can Dumoulin handle the

ters of pension and insurance.”

claim? Of course he can. Customer service is everything.

Pasquale Zarra is sitting with his new colleague, Oli-

ver Mark, to work out the schedule for the next day’s field

trip to Arosa. Together, they go through the standard ques-

tions: What is the issue, who do we talk to, what is the aim

of the visit? The last meeting on the agenda is at 7 o’clock

in the evening. Mark and Zarra will be visiting a customer

who wants to turn her fixed (3a) private pension plan into a

paid-up policy. “I have the suspicion that her new employ-

er, a bank, is behind this. They want her to change to one of

their accounts.” His best trump card in the discussion will

be the rate of interest. “With the terms and conditions of

1994 in force, she is guaranteed 3.5 percent interest. She

Daniel Bieri, Jean-Marie Dumoulin and Pasquale Zarra are among the Baloise’s top sales agents in Switzerland. They are also living proof

of the excellence of the company’s internal training system. All three originally worked in different industries before making their mark in

the insurance business. They were given the opportunity to acquire a thorough knowledge of insurance matters and spend several weeks

a year undergoing further training (legal changes, new products, technical issues, etc.), which enables them to give first-class, up-to-date

advice to customers.

Pasquale Zarra (48) is an expert in overall solutions,

a certified investment fund adviser and a certified

financial planner at the Baloise. In 2005 he attend-

ed a specialist course in social security. Before join-

ing the Baloise in Chur in 1995, he was head of sales

for Ferrari at an auto dealership. He is in charge of a

portfolio worth around CHF 2.3 million, mostly made

up of private individuals.

Daniel Bieri (52) is an expert in risk management

Jean-Marie Dumoulin (55) is an expert in risk manage-

and asset/liability protection at the Berne-East Gen-

ment and asset/liability protection at the Fribourg Gen-

eral Agency in Ostermundigen and, as a corporate

eral Agency. The premium volume of his portfolio consist-

advisor, manages a portfolio worth around CHF 2.6

ing primarily (approx. 70 %) of SME clients, amounts to

million. Before joining the Baloise in 1998, Bieri

roughly CHF 4.3 million. Before switching to a competitor

worked as a sales agent instructor at another insur-

in 1980, he worked as a Baloise sales agent for 3 years.

ance company, where he was subsequently made

In 2001, Dumoulin returned to the Baloise as a corpo-

agency head in the Canton of Berne.

rate adviser.

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

Germany

with a combined CHf 145.6 million profit before
tax and borrowing costs, the Basler Securitas
and Deutscher Ring business units made a sub-
stantial contribution to the Group’s profit despite
sharp price competition in the property insurance
segment and the unfavourable environment in
the traditional life segment.

Key figures Germany

Gross premium income

of which: Life

of which: Non-life

Combined ratio non-life
(gross)1

Profit/loss before tax

in CHF m

1 in percent

2004
(restated)

2,120.9

1,059.6

1,061.3

93.5

135.9

2005

2,110.1

1,061.5

1,048.6

94.0

145.6

Basler Securitas
Basler Securitas successfully completed its integration in

Overall Deutscher Ring’s business volume including unit-

2005 resulting in more efficient business processes and

linked life insurance increased to CHF 1,196 million (2004:

an income-oriented customer portfolio. Beginning in 2006

CHF 1,106 million), a gain of 8.1% attributable to proper-

we will implement additional improvements in the sales

ty insurance, unit-linked products and MONEYMAXX. Pre-

organization, in claims processing and in operating pro-

mium revenue in accordance with IFRS accounting came to

cedures. The business unit increased its contribution to

CHF 1,053 million (2004: CHF 1,027 million).

profits significantly compared to 2004, primarily thanks

Business volume in the life segment increased by 9.4%

to the impressive result in the property insurance busi-

to CHF 982 million (2004: CHF 897 million) while the vol-

ness and excellent returns on investments. Business vol-

ume for unit-linked life products grew by 17.4% to CHF 93

ume came to CHF 1,058 million (2004: CHF 1,094 million),

million (2004: CHF 79 million). If volume from the acquisi-

a decline of 3.4% due particularly to adjustments in the

tion of MONEYMAXX in July 2005 is included the increase

business portfolio and the unfavourable economic envi-

comes to 80.7%. Deutscher Ring’s focus on this growth

ronment in the life insurance segment.

segment has proven timely. Premium revenue in accor-

The core property insurance segment shrank by 2.1%,

dance with IFRS accounting came to CHF 839 million (2004:

resulting in a premium volume of CHF 835 million (2004:

CHF 818 million), an increase of 2.5%. Thanks to innova-

CHF 853 million), a reflection of price competition particu-

tive products, new business is doing significantly better

larly in the motor vehicle and industrial insurance sectors

than the market overall, which is shrinking by about 50%.

and of our profit-oriented business policies. The combined

The segment’s earning power continued to grow.

ratio was 93.9% gross (2004: 92.9%), a very good figure.

The property insurance segment grew by 2.4% result-

Premium revenue in the life segment came to CHF 223

ing in a premium volume of CHF 214 million (2004: CHF

million (2004: CHF 242 million), a decline of 7.8%. The cru-

209 million). The gross combined ratio improved to 94.5%

cial factor in this trend was the considerable market-wide

(2004: 95.8%). Together with the better lapse rate this is

drop in demand for lump-sum life insurance products since

evidence for stronger customer loyalty in the target seg-

the new retirement income act came into force. This cre-

ment and better operational efficiency.

ated a very high demand in late 2004 before adoption of

The Bausparkasse increased its business volume both

the law, leading to a saturation of the market in 2005. The

in savings and in financing transactions and is developing

trend was further exacerbated by continuing very low inter-

in accordance with our expectations; we are anticipating

est rates.

that the break-even point will be reached in 2006.

Deutscher Ring
Deutscher Ring held its ground well and generated a sub-

stantial contribution to the consolidated earnings, a con-

sequence of various operational improvements. Satisfac-

tory business growth and significantly lower lapse rates

are proof of the progress made in building customer loy-

alty and positioning the company in the market. Starting

in July 2005 the acquisition of life insurer MONEYMAXX

brought additional business volume of CHF 63 million, pri-

marily unit-linked life insurance products.

Learning from the past and
pinpointing potential for improvement:
an organization geared to the
needs of company and clients.

Dieter Hack,
Head of Claims, Basler Securitas

Claims optimization – a major project

Assuming direct control

Many companies talk about cost-cutting and process optimization. Basler Securitas in Germany
is taking action to achieve these targets in a major project with the core objective of
enhanced customer service through more efficient claims processing. A recent visit shows
the progress that has been made.

Manfred Feldmann of Basler Securitas in Bad Homburg,

tial for improvement. The results were used to make projec-

explains: “First of all, we had to merge two companies with

tions covering the total annual number of claims. We expect

different corporate cultures.” The past years were domi-

to realize about two thirds of the total amount of poten-

nated by the incorporation of Deutscher Ring’s automobile

tial savings calculated, i.e. between seven and ten million

and commercial insurance portfolios and the integration

euro.” However, according to Manfred Feldmann, cost-cut-

of Basler and Securitas to form a new combined company.

ting is not the only goal of the exercise: “On the contrary,

The next step is now optimization. This refers specifically

the object is to optimize our organization in the interests of

to the claims handling area, where there is a substantial

customers and company. The changes in the processes and

potential for improvement. As part of a claims data analy-

structures will directly affect about 170 employees in the

sis, roughly 900 settled claims in different segments were

claims section.” Concrete improvements are possible in the

analyzed in detail. Dieter Hack, Head of Claims at Basler

routing of incoming damage claims alone. “For instance, we

Securitas, explained: “It was a representative cross-sec-

do not have a uniform telephone system. To become even

tion of all claims. We were particularly interested in how

more service-oriented, we urgently need to shorten com-

claims were processed in the past and where there is poten-

munication paths and to process claims more quickly.”

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

“

Many success factors

within the company.

already exist
”

M A N F R E D F E L D M A N N

Motivating and training staff results in better
communication and swifter claims handling.

A new way of thinking
An internal road show highlighted the potential for improve-

impact
Basler Securitas’s first internal analysis of claims data – a

ment in the field of claims processing and presented a new

common practice throughout the industry – revealed a the-

target organization. This attracted a lot of attention and

oretical savings potential of around EUR 13 million. This

awakened people’s curiosity, although in some quarters

is expressed as “lost economic opportunities” (LEO; see

it also generated fears of job cuts and structural chang-

box). Every single identified improvement approach will

es. Dealing with such a situation requires proper change

have to be realized for the entire potential to be exploited.

management to prepare employees for the full impact of

According to Hack, the associated changes will have a far-

changes at an early stage. According to Feldmann, key ele-

reaching impact: “This project will involve structural, pro-

ments in achieving the set goals are a new way of thinking

cess and content related changes. Almost every interface

among employees and a high degree of motivation: “We

within the company will be affected.” At present the claims

want to make a concerted effort to support our employees

optimization project is one of several major ongoing proj-

and train them particularly in initial claims handling, part-

ects. Others include the optimization of target-customer

ner management and the handling of dubious claims. One

management, targeting a more efficient cooperation with

must never forget that although the new business model

Deutscher Ring and the reorganization of our core non-life

was developed by experienced claims experts, its imple-

business. Many of the data and insights gained in the oth-

mentation depends on our employees’ practical know-

er projects will be incorporated in the claims optimization

ledge and skills.” Nevertheless, says the project head,

project.

there is no need to reinvent the wheel: “Many success fac-

tors already exist within the company. We just have to get

these seedlings to grow.”

M A R K E T D E V E L O P M E N T S

Action, not reaction
A recently conducted customer survey revealed a concrete

scope for improvement in direct comparison with our com-

L EO : LOS T ECO N O M I C O P P O R T U N I T I E S

petitors. Appropriate channeling of claims notifications

Cases of lost economic opportunities (LEO) play a cru-

for instance can substantially increase the quality of ser-

cial role in claims data analysis. They reflect qualita-

vice. Achieving this will require far-reaching changes in the

tive and quantitative possibilities of optimization and

structural organization, which illustrates the impact that

hence are a key factor in professionalizing claims man-

the claims optimization project is set to have within the

agement.

company.

“

We expect to realize savings of
seven to ten

million euro.

”

D I E T E R H A C K

quickly and unbureaucratically.” Of course, direct person-

al customer contact will always remain extremely impor-

tant. Manfred Feldmann concludes by emphasizing that

“field claims adjusters are the insurer’s on-the-spot eyes

and ears.” For this reason Feldmann also attaches great

importance to telephone contact: “In contrast to corre-

And what are they saying in the front line? The visit to the

spondence, when you have the customer on the line he has

Bad Homburg Service Center and meetings with employ-

to justify his claim. Thus, it is possible to clarify the prob-

ees provided some interesting insights. Marco Gottwalt,

lem in advance and act quickly if necessary.” The elemen-

who participated in the large-scale claims data analy-

tary philosophy of claims optimization: instead of reacting

sis, is of the opinion that “many processes will have to

to claims, the topic is tackled proactively. In other words:

be rethought from scratch.” Rudolf Schön, his office col-

Basler Securitas would like, as it were, to assume direct

league, underscores this: “Our task was to analyze a repre-

control of each claim. The claims optimization project

sentative sample of claims files and identify potential cost

seeks to enhance efficiency and quality of service through

savings. And there are lots. However, many of them cannot

process optimization and leaner structures. No mean tar-

be implemented straight away for technical and legal rea-

get for the coming months.

sons.” Angela Teske sees each claim as unique: “I don’t

think you can process claims by the book.” Her colleague

Jessica Kleinschmidt takes a similar view: “There are some

tragic cases that really get to you. Recently, for instance,

a young family lost the roof of their house in a storm. In

such a situation it is essential that the case is handled

Pro-active claims handling: high efficiency
and a service approach.

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

Belgium and Luxembourg

Key figures Benelux

The Benelux segment, which consists of the
flemish company Mercator and Bâloise Luxem-
bourg, generated a profit before tax and borrow-
ing costs of CHf 94.9 million (2004: CHf –135.0
million). Mercator was successful in accomplish-
ing a turnaround and realized a veritable surge in
profits. Bâloise Luxembourg doubled its profit.

Gross premium income

of which: Life

of which: Non-life

Combined ratio non-life
(gross)1

Profit/loss before tax

in CHF million

1in percent

2004
(restated)

743.0

145.5

597.5

95.6

–135.0

2005

736.3

153.5

582.8

93.5

94.9

Belgium
The Belgian company Mercator made good on the prom-

Luxembourg
The year 2005 was a successful one for Bâloise Luxem-

ise of a very positive trend that was already beginning to

bourg. It no less than doubled its previous year’s profit.

emerge at the 2005 mid-year mark. The successful com-

Substantially lower costs and lower claims incurred, very

pletion of restructuring measures and the explicit strate-

positive growth in the property insurance business and

gic concentration on its core business of insurance and

gratifying performance in the unit-linked life segment

pensions resulted in a jump in profits after the major loss

were the determining factors, resulting in a 5.3% increase

posted the previous year. Tax-free capital gains from the

in business volume to CHF 342 million. Premium revenue in

sale of equity holdings and expiring shareholder commit-

accordance with IFRS accounting grew by 3.7% to CHF 78

ment agreements had a significant impact on the gratify-

million (2004: CHF 75 million).

ing annual profit.

With a premium volume of CHF 43 million the non-life

Business volume grew only slightly, reaching CHF 758

segment posted an increase of 7.2%, nearly twice the

million (2004: CHF 752 million), an 0.7% increase, due pri-

growth rate of the overall Luxembourg market. Thanks

marily to substantial competitive pressure on the Belgian

to the absence of major claims, more efficient claim and

market, in particular in the motor vehicle insurance sec-

cost management and new products, the combined ratio

tor, and our profit-oriented policy with regard to pricing

improved sharply to 86.8% (2004: 99.2%). In the highly

and new business that is directed toward achievement of a

contested motor vehicle insurance market the new poly-

minimum margin. Premium volume under IFRS declined by

CARe product, built strictly on scoring techniques, helped

1.4% to CHF 658 million.

us achieve both a strong competitive position and efficien-

In the non-life segment Mercator posted premium reve-

cy gains.

nue of CHF 540 million (2004: CHF 557 million), a decline of

The life segment, heavily affected by ongoing low inter-

3.2%. With a gross combined ratio of 94.1% we were able

est rates, achieved a premium volume under IFRS of CHF 35

to improve on the previous year’s figure of 95.3% despite

million (2004: CHF 35 million). This stagnation is primari-

the disposal of the bank as cost bearer and the aggressive

ly attributable to the interest rate-sensitive individual life

price competition on the market. This enabled Mercator’s

insurance business. Business volume in the unit-linked life

core segment to significantly build its operating earning

segment (not counted as premiums under IFRS accounting

power within a short period of time.

rules) reached CHF 264 million. This figure surpasses our

Business volume in the life segment including unit-

expectations, exceeding even last year’s already very high

linked products grew by 11.8% to CHF 218 million (2004:

CHF 250 million. We continued to improve our market posi-

CHF 195 million). At the half-year mark the trend had still

tion in the group life sector.

been declining so we regard this as a positive course of

events, even though overall growth lagged the Belgian

market. Owing to the sale of Mercator Bank, the premium

volume generated by this distribution channel is below

the previous year’s level. Premium volume life under IFRS

rose by 7.4% to CHF 118 million. The business unit lowered

interest rate guarantees during the second half, as did the

market overall, in order to improve the profitability of the

life segment.

M A R K E T D E V E L O P M E N T S

“

Our agents now have to get

accustomed to new ways

”
of thinking and acting.

A N D R é B R E D I M U S , C E O B â L O I S E L U X E M B O U R G

Motor insurance

(R)evolution in Luxembourg

Bâloise Luxembourg’s Ceo André Bredimus and Senior Manager Claude Meyer have good reasons
to be pleased. polyCARe, the new motor insurance product, is a genuine innovation.
They now see themselves in a challenger position in their market.

Is Luxembourg a fertile ground for innovation?
A n D R é B R e D i M u S : Until recently, the Luxembourg insur-

Is polyCARe really such an innovative product?
A . B . The concept of polyCARe is a true novelty in Luxem-

ance market was pretty much set in its ways. Two companies

bourg. We insure all the vehicles of one family (cars, motor

together controlled two thirds of the market, obviously bene-

bikes, etc.) in a single contract. Customers can also opt

fiting from the recognition value that this bestowed. In addi-

to pay their premiums in monthly instalments without this

tion, prices in the past decades were laid down by the politi-

adding to their premium bill, which is a by no means negli-

cal authorities according to social criteria. For customers, it

gible competitive advantage. The other insurance compa-

hardly made any difference which insurer they opted for, giv-

nies raise their premiums by 3% in the case of half-yearly

en that price differences from one provider to another were

payment and by no less than 5% in the case of quarterly

minimal at best. Even ten years after deregulation, the situ-

payment.

ation hasn’t changed much. We have now decided to tread

new paths in our attempt to find and retain good customers.

How did polyCARe come about? From a gut feeling?
C . M . I would sooner say out of a good knowledge of the

Why did you decide to launch a new product?
C L A u D e M e y e R : Because this was the best way to distin-

market. Many people in Luxembourg are crazy about cars.

Nowhere in Europe are there more families that own more

guish ourselves from the competition. Certain insurers pre-

than one car. Besides, young people tend to live with their

fer undercutting their rivals’ prices, but this sooner or later

parents for longer now. And the parents usually pay for

takes its toll on their profitability. Nor does this, as a rule,

their offspring’s motor insurance. So you see that with our

help the company’s market share. It is not a procedure that

offer of a single family insurance covering several vehicles

would be in line with the Baloise philosophy.

we anticipate a latent customer requirement.

Bâloise-Holding Annual Report 2005 – Business Review

Finding and retaining good customers.
New approach, new products.

A great product is not automatically a profitable product…
A . B . You’re quite right. However, the most innovative thing

Were there any other surprises?
C . M . Yes. For example, it stands to reason that a car in a

about polyCARe is its rate structure. We have introduced a

locked garage is less likely to be stolen than one that is

strongly segmented and technically well founded pricing

parked in the open. We have now found out that this fac-

concept. And this is a novelty in our market. We are finally

tor is also relevant for other points of coverage, such as

basing our pricing on objective criteria. We now have a com-

hull damage or accident. The fact whether a car is kept in a

pletely new tool at our disposal. Over a period of three years,

garage also gives us some insight into the owner’s gener-

we built up a very extensive database. This has enabled us

al behavioral tendencies. Garage owners, it turns out, are

to identify roughly a dozen pricing criteria. We no longer have

often elderly people living in the country who do not use

to rely exclusively on crude data such as replacement value

their car all that often. In many ways, our rates are a simpli-

and engine capacity. And this is a true revolution. Thanks to

fied reflection of reality.

this new approach, we can rest assured that all new risks we

will be taking on with polyCARe will be priced in a proper,

There is the danger that clients will see their premiums

risk-aligned way.

surge with this new product...
A . B . This is certainly an exaggeration. At the point of pur-

All insurers dream of acquiring good customers. Have you

chase, we offer the client a favorable rate. We then have

discovered a magic recipe?
C . M . No. Not even we can work miracles! But we have the

to make up the difference over the term of the contract.

But the numbers speak for themselves. For 51% of the

edge on our rivals because we know what the good risks are.

insureds, polyCARe actually leads to a reduction in pre-

Let me give you an example, one that came as a surprise to

mium. In 25% of the cases the price remains unchanged.

us: Statistics show that cars running on diesel are more fre-

And only for 24% of the persons insured is there a premi-

quently involved in accidents than those powered by petrol.

um increase involved. But these are not the customers we

The reason behind this is probably that people who drive a lot

are keen on.

– which from a statistical point of view makes them more lia-

ble to have an accident – tend to use diesel for cost reasons.

This makes the question of whether the car to be insured runs

on diesel or petrol one of our objective pricing criteria.

“

We have to edge on our rivals

because we know
”
what the good risks are.
C L A U D E M E Y E R , H E A D N O N - L I F E B U S I N E S S B â L O I S E L U X E M B O U R G

M A R K E T D E V E L O P M E N T S

polyCARe was launched at the beginning of the year.

Can you already draw some conclusions?
C . M . It’s a bit too early for that. We have a portfolio of

around 15,000 vehicles. It will take two years for us to

have some reliable results and five years before the portfo-

lio has been thoroughly renewed. But already now we can

say that we have made progress as far as the good risks

What problems were you confronted with in connection

are concerned.

with polyCARe?
A . B . Technical problems, particularly in the software field,

Do you think you will manage to hold on to the lead you

were solved pretty quickly. The real challenge was to see

how our sales agents would react. We work together with

have over other insurers?
A . B . I am sure we will. polyCARe is much more than a short-

nine independent general agencies and 200 “agences non

lived marketing gag. It is a revolution in the way that we do

professionelles” who sell exclusively Baloise products.

business here in Luxembourg. And if we continue to update

We did take account of this human factor in the planning

and expand our statistical database, we will keep our com-

phase, but admittedly underestimated it. Our product is

petitive edge. In 2007 we are going to evaluate and fine-

more performant but also more complex than its prede-

tune the model and, if necessary, add new pricing criteria.

cessor. Now sales agents are obliged to contact their cus-

tomers and ask them to fill out a short questionnaire. After

working with the same price structures for thirty years,

What other targets are you pursuing?
A . B . We are determined to take on a challenger role in this

agents now have to get accustomed to new ways of think-

line of insurance. We aim to double the average market

ing and acting. It was not always easy for the agents to

growth, in other words to up our market position to any-

understand the new rates, let alone explain them to their

thing between 7.5 to 10%. And we will use the experience

customers. Introducing the product to the agents therefore

gained to develop further new products. For instance a

proved rather disappointing at first.

comprehensive property and household contents insur-

C . M . This brings us to another problem. The less dynam-

ance. I can’t tell you any more at this stage. But come back

ic among the agents will lose customers whose premiums

again next year…

are set to rise. To maintain their own income level, they

will have to actively acquire new customers who fit our

new model. And as we know, it is not easy changing firmly

established habits and work patterns.

Looking back, what would you do differently?
A . B . We should have invested more in communication and

P O LYC A R E , T H E C L E V E R CO N T R AC T

the motivation of our sales agents. Those who grasped

It took nine months, three full-time staff members and

the philosophy behind the new product have become con-

a budget of EUR 200,000 to plan, draft and launch

vinced of its potential, often turning into keen proponents.

polyCARe. Now Luxembourg’s vehicle owners can opt

At present, 95% of Luxembourg’s vehicle owners are not

for a revolutionary form of motor insurance. Here are

customers of the Baloise. This gives us a huge number of

some of the advantages offered by this new product:

potentially interesting clients. For the past eight months,

· polyCARe covers all the vehicles of a family in a

we’ve been on the right track. Good sales agents have real-

single contract

ized that they can count on a sales growth of up to 30%,

· polyCARe offers a choice of seven contract types

which is enormous given the fact that the average market

adjusted to customer preferences

growth at present is around 3 to 4%.

· polyCARe comprises 12 insurance modules to

And how do your competitors react?
C . M . At the moment they’re just observing us. But we can

cover the driver, his/her family, the vehicle(s),

the vehicle contents and third party liability

· polyCARe offers the possibility of monthly premi-

feel that they’re getting nervous. Our innovation is going

um payment provided at least one car has full com-

to hurt them not in the short term, but certainly in the long

prehensive insurance. There are no additional fees.

run. I believe some insurers are going to wake up simply

too late.

Bâloise-Holding Annual Report 2005 – Business Review

M A R K E T D E V E L O P M E N T S

Other countries

Key figures Austria

Austria and Croatia
Basler Austria and the Croatian business unit that it man-

ages generated sizable organic growth and higher operat-

ing income in 2005. Basler Austria’s consistent customer

orientation together with the ongoing expansion of its sales

force is evidenced in a marked 11.7% expansion in premium

Gross premium income

Of which life

Of which non-life

Combined ratio non-life
(gross)1

Profit/loss before tax

volume to CHF 128 million (2004: CHF 114 million). Growth

in CHF m

in both of its business sectors, property and life insurance,

1in percent

2004
(restated)

114.5

30.9

83.6

105.2

9.3

2005

127.9

36.3

91.6

103.7

3.8

outpaced that of the Austrian market overall. The consistent

implementation of scoring instruments in product devel-

opment and in customer value-based sales management

resulted in stable operating earning power in the core seg-

ments. The Croatian unit shored up its already strong posi-

tion with significant growth in the core medical practitioner

segment.

In the non-life insurance segment Basler Austria contin-

ued to improve its business performance compared to the

previous year with a 9.5% increase in premium volume to

CHF 92 million (2004: CHF 84 million). Despite expansion

of the sales force the combined ratio improved to 103.7%

(2004: 105.2%), resulting from ongoing cost reduction and

lower claims as this business unit continues to focus on

profitable, risk-conscious target customers.

With a 17.6% increase in premiums to a volume of CHF 36

million (2004: CHF 31 million) the life segment exceeded all

expectations, with growth resulting primarily from single-

premium policies.

Reinsurance, financing companies and equity hold-
ings
Under “Other countries” we also include reinsurance,

financing companies and equity holdings as well as activi-

ties at Group level. The profit before tax and borrowing costs

in this segment amounted to CHF 192.2 million (2004: CHF

220.4 million). The main reason for the decline in profit is

lower reinsurance earnings due to higher claims. The impact

of the run-off business was positive.

H U M A N R E S O U R C E S

Human Resources

Based on our corporate values “create value”,
“foster relations” and “bring about change” we
focus on implementing the corporate strategy.
Human Resources supports this process with the
appropriate methods and systems.

Workforce by gender

in percent

Putting the Baloise strategy into practice regularly requires

new skills of our employees. One of the key tasks of Human

Men

Women

Resources is to provide tools and methods with which

employees can develop and hone such skills. The chief

Category

Men in %

Women in %

Men in %

Women in %

responsibility, however, lies with the line managers. They

2004

2005

must ensure that their staff are properly equipped for pres-

Staff

ent and future tasks, and that the skills they have are ade-

Middle Management

quately deployed.

Senior Management

Total

All-around performance management
We have redesigned this important management pro-

The Board of Directors of Bâloise-Holding comprises eight

cess in our Individual Performance Management project.

men and two women.

Besides setting targets and measuring target attainment,

appraisals are also made of employees’ main tasks as well

as their skillset and general conduct. This gives us an all-

around view and enables us to steer an employees perfor-

PeRSonneL fiGuReS

mance from a variety of perspectives. From 2006 this new

The mode of determining the number of employees

task setting and performance assessment process, with

was changed in 2004. The numbers are now stated

electronic support, will be introduced at all our Swiss loca-

in terms of full time equivalents (FTEs). The Baloise

tions. Direct personal contact between employee and line

Group staff count as at December 31, 2005 thus

manager will still be at the heart of the process, but there

comes 7,548 (2004: 7,609).

is now a stronger focus on an employee’s skillset and the

development steps that need to be taken.

ongoing training as a basis for personnel
development
One of the characteristics of the Baloise’s corporate cul-

Staff

Switzerland

Germany

Benelux

ture is its emphasis on recruiting future senior executives

Other countries

from our own ranks wherever possible. We build on per-

Total

sonalities that can point and lead the way with natural

1of which 253 Group

authority and play a part in shaping their company’s iden-

2004

3,632

2,785

910

282

2005

3,5791

2,854

829

286

Change

–53

–81

–

tity. This is what the program launched at Deutscher Ring

Staff training expenses amounted to around CHF

for future executives focuses on most. Following a rigor-

16.7 million in 2005. Overall, employees spent

ous selection process, twelve staff members have been

15,232 days on basic and advanced training cours-

undergoing a two-year, on-the-job preparation for the chal-

es. Finally, 326 positions offered to apprentices,

lenges of senior management and project leadership since

trainees and interns throughout the Group reflect

spring 2005.

the significance that the Baloise attaches to the

education and training of young people.

Bâloise-Holding Annual Report 2005 – Business Review

H U M A N R E S O U R C E S / S U S TA I N A B I L I T Y

CO R P O R AT E G O V E R N A N C E

Personnel portfolio:
assessment of skills and potential
The focus at Basler Securitas was primarily on its senior

executives. At the German company’s Personnel Portfo-

lio Conference, a Board-level discussion was held on the

skills and potential of the individual management mem-

bers. The insights gained are serving to initiate targeted

and ongoing personnel development measures. This is a

successful example of targeted staff development poli-

cy. Other Baloise Group business units will no doubt fol-

low suit.

Sustainability

Long-term thinking and acting is in the nature of
insurance business. we can only be successful in
the long-run if we are guided not only by eco-
nomic but also by ecological and social consider-
ations.

In early 2004 the Baloise was the first among Swiss prima-

ry insurers to publish a sustainability report. In our second,

Human Resources help shape corporate culture
Accompanying change, fostering a culture of togetherness,

2005/2006 report, we measure ourselves by the promi-

ses made, report on ongoing projects and outline possible

strengthening the Baloise spirit – these were some of the

future developments. Sustainability is an integral part of

further focal points of Human Resources in 2005. Tangible

our day-to-day business.

results were produced for instance by Mercator in Belgium

Sustainability for us means responsible resource man-

and Basler Austria, who devised training concepts aimed

agement from an economic, social and ecological point of

at improving communication with clients and at fostering

view. We support society in handling its risks and thereby

collective energy within the company.

make a key contribution to economic sustainability. Sus-

Staff development at all management levels
The groupwide Management Development Programs have

the world of insurance – can only be based on trust. By

being transparent and maintaining an open dialogue with

been geared to the requirements of the corporate strategy.

stakeholders, we provide evidence of our credibility on a

tainable and successful business activities-particularly in

Participants in the Advanced Management Program – mid-

daily basis.

dle ranking managers – were given various strategic top-

ics in project form to deal with. One of the key items of

the annual Strategic Leadership Program for our top execu-

A Leader among primary insurers
The 2005/2006 Sustainability Report reflects the broad

tives required participants to work intensively on the topic

scope of our commitment to sustainability and its influ-

of customer value management.

ence on our core business, and also the Baloise’s social

responsibility and the corresponding initiatives and activ-

ities it undertakes. We have already met around 70% of

the promises made in our initial, 2003/2004 report. But

this does not mean we are resting on our laurels. We aim

to remain a leader among Swiss primary insurers in mat-

ters of sustainability. This ensures that our commitment

will not subside. The Baloise’s dedication to sustainability

has not gone unrecognized. We have been included in the

globally significant Dow Jones Sustainability Index and the

FTSE4good Index, and the Baloise stock (BALN) features

in the investment universe of Ethos, the Swiss sustainable

development investment foundation.

The Baloise’s 2005/2006 Sustainability Report
n www.baloise.com/sustainability

H U M A N R E S O U R C E S / S U S TA I N A B I L I T Y

CO R P O R AT E G O V E R N A N C E

Group Compliance

“We don’t just react to outside pressure”

As a value-oriented company, the Baloise is committed to good corporate governance.
Compliance is an important aspect in this context. Compliance for us means strategies to ensure
ethical conduct in conformity with applicable laws and regulations. The Baloise has given
systematic attention to this issue since 2002, says Peter kalberer, Group Compliance officer.

And how do you achieve this target?
Pk: We raise awareness by giving practical examples. In so-
called “dilemma games” we work our way through delicate

situations arising from everyday business practice. Staff

members discuss various possible behaviors and thereby

sharpen their perceptiveness. Doing this in the context of a

game enables an unselfconscious exchange of opinion with

regard to critical situations. This makes it easier for individ-

uals to relate to the Code of Conduct. Staff members learn

to identify tricky situations and, if in doubt, raise the issue

with a specialist. Compliance is something that concerns

everyone. Everyone is a compliance officer in their field. The

trust of clients, investors and other stakeholders is our most

precious commodity, and it depends on the daily conduct of

every single staff member.

Are there other compliance tools?
Pk: Yes, the Compliance Policy. It defines standards govern-
ing the organization and the responsibilities within the Bal-

oise Group. The Compliance Policy is the basis for group-

wide compliance reporting, our internal control tool. The

reports inform the Executive Committee and the Board of

Directors’ Audit Committee on adherence to these stan-

dards. The Executive Committee then decides on appropri-

ate measures and implements them.

Managing compliance with foresight: Peter Kalberer

How did you approach this issue in 2002?
P e T e R k A L B e R e R : Quite a lot was already being done in the

field of compliance, but the Executive Committee decided

to go a step further. Top priority was given to the establish-

ment of a Code of Conduct. First came an analysis of exist-

Do you also report directly to shareholders?
PK: Shareholders are informed on Corporate Governance

ing responsibilities such as data protection and prevention

through the Annual Report. The Baloise’s Sustainability

of money laundering, which were already being dealt with

Report provides them with further information on our corpo-

at national company level. The next step was a groupwide

rate policy, which contains important compliance aspects.

risk based analysis. Then we introduced the Code of Con-

duct, which represented the first compliance standard for

the entire Group. It took account of legal provisions as well

as requiring a day-by-day conduct of our employees in line

What will the future bring?
Pk: By industry standards, we are already a progressive
company in terms of compliance. But we must and want to

with our corporate values.

Code of Conduct sounds good.

Do the staff really abide by it?
Pk: Intensive courses and workshops were held to introduce
the Code of Conduct. Of course adherence can never be sub-

aim higher. “Action, not reaction” is our motto. We don’t just

wait until there is pressure from the outside. An example is

our introduction of software that enables us to monitor all

business relationships with regard to possible financing of

terrorism. In addition, the reporting system ensures that all

business units optimize their processes on a regular basis.

ject to complete control. But that is not the idea. The Code

This reduces the risk of incidents occurring that could cause

of Conduct is primarily intended to sharpen people’s aware-

reputational damage, and at the same time bolsters stake-

ness.

holders’ trust in the Baloise.

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E G O V E R N A N C E

Corporate Governance Report

Transparency in Management

As a value-oriented enterprise, the Baloise is committed to good corporate governance. This is for
the benefit of our shareholders, policyholders and employees. in accordance with the definition
of corporate governance in the Swiss Code of Best Practice, we strive in the shareholder’s interest to
achieve transparency and a system of checks and balances in management and control, while preserv-
ing the decision-making ability and efficiency of corporate management.

To enhance transparency and comparability with other com-

end of 2005. A total of 14,614 shareholders were record-

panies, this section follows the structure of the SWX guide-

ed in the Baloise share register on December 31, 2005. The

lines.

number of registered shareholders was 10.1% lower than in

1. Group structure and shareholders

Corporate structure
The Baloise is organized as a holding company in the form

of a joint-stock company under Swiss law. It is domiciled in

Basel and is listed on the SWX Swiss Exchange. On Decem-

the previous year.

More information on the structure of shareholders as

at December 31, 2005 can be found in the section “Balo-

ise shares” starting on page 10 of the Annual Report – Busi-

ness Review.

Treasury stock
The Baloise held 887,879 treasury shares on December 31,

ber 31, 2005 the Baloise Group had a market capitalization

2005. These shares are used in the incentive and employee

of CHF 4,244.8 million. Information on the Baloise’s shares

share ownership programs, among other things.

can be found from page 10 of the Annual Report – Business

Review. The major companies and equity holdings as at

December 31, 2005 are found in the Notes to the financial

Cross-shareholdings
There are no cross-holdings either of share capital or vot-

statements in the Financial Report starting on page 74. Oth-

ing rights.

er than Bâloise-Holding there are no exchange-listed com-

panies in the Group.

Segment reports by region and line of business are found in

the Notes to the financial statements in the Financial Report

2. Capital structure

from page 38.

The Group’s operating management structure is presented

Distribution policy
The changes in capital in recent years have been a result

on page 49 of the Annual Report – Business Review.

of our shareholder-friendly dividend policy. Since 2001 the

Shareholders
Changes in share ownership
The distribution of shareholdings and trading liquidity of

Baloise has repaid over CHF 700 million to its shareholders

through cash dividends, share repurchases and par value

repayments.

the shares remains unchanged from the previous year. As

Distributions to shareholders

before, no single shareholder holds more than 5% of regis-

tered shares.

As a widely-held public corporation, the Baloise is part

of the Swiss Market Index (SMI) and is included in the SWX’s

index calculations with 100% of shares in free float.

Shareholder structure
As at December 31, 2005 the biggest registered sharehold-

er, Chase Nominees Ltd., held 4.9% of outstanding shares,

of which 2.0% are voting shares. There were no equity hold-

ings subject to disclosure under stock exchange law at the

Year

2001

2002

2003

2004

2005

Total

Dividend
payments

Share
buybacks

Par value
repayments

136.1

132.7

22.1

33.2

60.8

293.2

–/–

49.8

–/–

Total

479.1

132.7

22.1

33.2

60.8

384.9

293.2

49.8

727.9

in CHF, at March 31 of each year before 2005, at December 31 in 2005.
In accordance with the amendment to Art. 29 of the Articles of Incorporation adopted at
the 2005 Annual General Meeting, the financial year ends on December 31.

CO R P O R AT E G O V E R N A N C E

All dividend distributions and capital operations in favor of

ture of the conditional capital can be found in Art. 3 of Bâlo-

shareholders since 1997, along with the dividend policy, are

ise-Holding’s Articles of Incorporation.

published on the Internet.

n www.baloise.com –› Profile –› Corporate Governance –›

n www.baloise.com –› Investor Relations –› Shares

Rules and Regulations

Bâloise-Holding shareholders’ equity
The following table shows changes in shareholders’ equity

other financing instruments
There are no participation certificates, bonus certificates

over the past three reporting years.

or bonds convertible to Company participation rights or

Changes in Bâloise-Holding shareholders’ equity
(before allocation of profit)

Financial year
2003/2004

Financial year
2004/2005

Financial year
2005

Share capital

General reserve

Reserve for treasury stock

Unallocated reserve

Retained earnings

5.5

11.7

14.0

515.5

41.9

Bâloise-Holding shareholders’ equity 588.6

5.5

11.7

16.7

520.8

125.0

679.7

5.5

11.7

7.9

593.2

138.5

756.8

in CHF million, at March 31 of each year before 2005, at December 31 in 2005.
In accordance with the amendment to Art. 29 of the Articles of Incorporation adopted at
the 2005 Annual General Meeting, the financial year ends on December 31.

options issued by the Company.

Baloise Group consolidated equity
The consolidated shareholders’ equity of the Baloise Group

as at December 31, 2005 totalled CHF 4,391.4 million.

Details on developments in 2005 and 2004 can be found

in the Financial Report on pages 10 to 11 in the “Consoli-

dated statement of changes in equity” in the consolidated

financial statements. All details for 2003 can be found in the

“Consolidated statement of changes in equity” on page 75

of the 2003 Annual Report.

outstanding bonds
Bâloise-Holding and other companies in the Group have

Bâloise-Holding’s share capital remains unchanged over the

issued bonds to the public. At the end of 2005 a total of

past three reporting years at CHF 5.5 million. It is divided

five bond issues from Bâloise-Holding and subsidiaries

into 55,307,150 dividend-entitled registered shares with a

were outstanding with the public. Details on the outstand-

par value of CHF 0.10. Further information on Baloise shares

ing bonds can be found in the Notes to the Annual Financial

can be found in the section “Shareholders’ participation

Statements in the Financial Report from page 61 and on the

rights” on page 45.

Internet.

n www.baloise.com –› Investor Relations –› Bonds

Authorized and conditional capital, other financing
instruments
Authorized capital
Bâloise-Holding has no authorized capital.

3. Board of Directors

Members

Conditional capital
Bâloise-Holding has conditional capital of no more than

Name

Nationality

Age

10%, whereby the share capital may be increased by a max-

Rolf Schäuble, Chairman

imum of 5,530,715 registered shares with a par value of

Georg F. Krayer, Vice-Chairman

CHF 0.10 each, for a maximum increase in nominal share

Christoph J.C. Albrecht

capital of CHF 553,072. This conditional capital was created

Andreas Burckhardt

by the Annual General Meeting of 2004 (Art. 3 of the Articles

Hansjörg Frei

of Incorporation).

Gertrud Höhler

The conditional capital is intended to secure any option

Klaus Jenny

or conversion rights granted in connection with bonds or

Werner Kummer

similar instruments. No such financing instruments have

Arend Oetker

been issued to date.

Eveline Saupper

Swiss

German

Swiss

German

Swiss

Term
began

Term
ends

1993

2008

1995

2007

1985

2006

1999

2006

2004

2007

1998

2007

2003

2006

2000

2007

1996

2008

1999

2008

Subscription rights for shareholders are excluded. The

right to purchase the new registered shares belongs to the

current holders of options and conversion rights. The Board

of Directors may restrict or exclude shareholders’ pre-emp-

tion rights for the issue of options and convertible bonds on

international capital markets. Further details on the struc-

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E G O V E R N A N C E

Only the Chairman of the Board of Directors holds an exe-

and was a member of the Executive Board (Head of Interna-

cutive position. All other members are non-executive and

tional Country Management) at Credit Suisse Financial Ser-

independent. They were not responsible for management of

vices from 2000 until his retirement in mid-2003. From 2000

any company of the Group during the three fiscal years pre-

to 2003 he was Chairman of the Swiss Insurance Associa-

ceding the period under review and have no material busi-

tion (SIA). Hansjörg Frei is a member of the Board of Direc-

ness relations with the Baloise Group.

tors of Ems-Chemie Holding AG and Chairman of the Pension

Fund of the Ems Group. Since February 2006 he has been

Rolf Schäuble, Arend Oetker and Eveline Saupper were con-

Chairman of the SVP (Swiss People’s Party) for the Canton of

firmed in office for a new three-year term in the year under

Zurich. He is an independent non-executive director.

review.

Rolf Schäuble (1944, Swiss, Dr. oec. HSG) has served on
the Board of Directors since 1993, since 1994 as Chairman.

Gertrud Höhler (1941, German, Prof. Dr. phil.) has served on
the Board of Directors since 1998. She is a business and

political consultant and was Professor of Literature and Ger-

From 1996 until February 28, 2002 he was also Managing

man at the University of Paderborn from 1976 to 1993. She

Director and CEO. Upon completing his studies in economics

studied literature and art history in Bonn, Berlin, Zurich and

he was awarded the degree of Dr. oec. at the University of

Mannheim. Gertrud Höhler served as consultant for public

St. Gallen. He held various positions at the Zurich Insurance

relations issues at Deutsche Bank AG from 1987 to 1990

Group in Zurich culminating in membership of the Group

and as Non-executive Director for Grand Metropolitan PLC,

Executive Board.

London from 1992 to 1995. She serves on the Boards of

Directors of Ciba Spezialitätenchemie AG, Basel and Georg

Georg f. krayer (1943, Swiss, Dr. iur.) has served on the
Board of Directors since 1995, as Vice-Chairman since

Fischer AG, Schaffhausen. Gertrud Höhler is an indepen-
dent non-executive director.

2004. He studied law and holds the degree of Dr. iur. He is

Chairman of the Board of Directors of Bank Sarasin & Cie AG,

Basel and was Chairman of the Swiss Bankers Association

klaus Jenny (1942, Swiss, Dr. oec. HSG) has served on
the Board of Directors since 2003. He studied economics

until 2003. He is an independent non-executive director.

and was awarded the Dr. oec. at the University of St. Gal-

Christoph J. C. Albrecht (1938, Swiss, Dr. iur.) has served on
the Board of Directors since 1985. He studied law and was

len. Klaus Jenny was a member of the General Directorate

of Schweizerische Kreditanstalt and member of the Cred-

it Suisse Group Executive Board from 1987, serving most

awarded the Dr. iur. at the University of Basel and is current-

recently as CEO of the Credit Suisse Private Banking busi-

ly a partner at the law firm of Joerin Hopf, Basel, working

ness unit. Since 1999 he has been a private financial advi-

as an attorney-at-law and a notary. Christoph J. C. Albrecht

sor for businesses and individuals. He serves on the Boards

is Chairman of the Board of Directors of Thüring AG, Basel

of Directors of Clariant AG, Maus Frères SA and several pri-

and sole member of the Board of Directors of Interhaba AG,

vate companies. Klaus Jenny is an independent non-execu-

Basel. He is an independent non-executive director.

tive director.

Andreas Burckhardt (1951, Swiss, Dr. iur.) has served on the
Board of Directors since 1999. He studied law at the Univer-

werner kummer (1947, Swiss, Dipl. Ing. ETH, MBA Insead)
has served on the Board of Directors since 2000. From

sities of Basel and Geneva and holds a Dr. iur. degree. He

1990 to 1994 he chaired the Executive Board of Schindler

worked at Fides Treuhandgesellschaft from 1982 to 1987

Aufzüge AG, joining the Schindler Group Management Com-

and was General Secretary of the Baloise Group from 1988

mittee with responsibility for the Asia Pacific region in 1978.

to 1994. He has been Director of the Basel Chamber of Com-

From 1998 to March 2004 he was CEO of Forbo Holding AG.

merce since 1994. Andreas Burckhardt is Vice President of

Werner Kummer is a self-employed business consultant,

the Swiss Association of Chambers of Commerce and Pres-

member of the Board of Directors of WMH Walter Meier Hold-

ident of the Great Council of the Canton of Basel-Stadt for

ing AG, Chairman of the Board of Directors of Gebrüder Mei-

2006/2007. He is an independent non-executive director.

er AG, Regensdorf and member of the board of the Zurich

Chamber of Commerce. He is an independent non-executive

Hansjörg frei (1941, Swiss, Dr. iur.) has served on the Board
of Directors since 2004. He studied law and was awarded

director.

the Dr. iur. at the University of Zurich. Hansjörg Frei was

employed at Winterthur from 1982, culminating as member

of the Group Executive Board for operations in Switzerland,

CO R P O R AT E G O V E R N A N C E

Arend oetker (1939, German, Dr. rer. pol.) has served on the
Board of Directors since 1996. He studied management and

principle taken by the Board of Directors unless competen-

cies have been delegated by the bylaws to the Chairman of

political science at the Universities of Hamburg, Berlin and

the Board of Directors, the Committees, the Corporate Exec-

Cologne and was awarded the Dr. rer. pol. at the Universi-

utive Committee or the CEO.

ty of Cologne. He is Executive Partner of Dr. Arend Oetker

The main functions of the Board of Directors, pursuant to

GmbH & Co. KG, Berlin as well as Chairman of the Super-

Art. 716a of the Swiss Code of Obligations and Section 1 II

visory Board of Schwartauer Werke GmbH & Co. KGaA, Bad

of the Bylaws, are the general management, overall supervi-

Schwartau, Chairman of the Board of Hero AG, Lenzburg,
member of the Supervisory Board of Degussa AG, Düssel-
dorf, member of the Supervisory and Partnership Board of

sion and financial supervision of the company and determi-

nation of its organizational structure.

n www.baloise.com –› Profile –› Corporate Governance –›

Merck KGaA, Darmstadt and Deputy Chairman of the Super-

Rules and Regulations

visory Board of KWS Saat AG, Einbeck. He is also Chairman

of the German Council on Foreign Relations. Arend Oetker is

an independent non-executive director.

eveline Saupper (1958, Swiss, Dr. iur.) has served on the
Board of Directors since 1999. She studied law at the Univer-

Committees of the Board of Directors
The work of the Board of Directors is supported by four Com-

mittees. These Committees report to the Board of Directors

and submit the necessary proposals in their respective areas

of responsibility. The Compensation Committee in particu-

sity of St. Gallen and holds a Dr. iur. degree. Today she is an

lar possesses autonomous decision-making authority.

attorney-at-law and certified tax expert. From 1983 to 1985

she worked at Peat Marwick Mitchell (now KPMG Fides), Zur-

ich and from 1985 to 1992 for Baker & McKenzie, Zurich and

overview ot the Committees

Chicago. Since 1992 she has been a partner at Homburg-

er Rechtsanwälte, Zurich. Eveline Saupper is Chairwoman of

Name

Chairman’s
Committee

Audit-
Committee

Compensation
Committee

Investment
Committee

the Board of Directors of BZ Bank AG, Freienbach and mem-

Rolf Schäuble, Chairman

ber of the Board of Directors of Intershop Holding AG, Win-

Georg F. Krayer, Vice-Chairman

terthur. She is an independent non-executive director.

Christoph J.C. Albrecht

Further information on the members of the Board of Direc-

Hansjörg Frei

Andreas Burckhardt

tors is available on the Internet.

www.baloise.com –› Profile –› Organization –›

Board of Directors

Cross-involvements
There are no cross-involvements.

Gertrud Höhler

Klaus Jenny

Werner Kummer

Arend Oetker

Eveline Saupper

C: Chairman, VC: Vice-Chairman, DC: Deputy, M: Member

election and term of office
The Board of Directors was made up of ten members at the

Each of the Committees appointed by the Board of Directors

is composed of four members, who are elected each year by

close of 2005. Members are elected by the Annual Gener-

the Board. The Chairman and Deputy Chairman of the Board

al Meeting of Shareholders for terms of three years each.

of Directors are ex officio members of the Chairman’s Com-

Terms are staggered, with one-third of members’ terms

mittee. The Chairman of the Board of Directors may not be

expiring each year unless they are re-elected. Under age

a member of the Audit Committee. The basic duties of the

restriction rules, a director’s mandate expires at the time of

Committees are governed by the Bylaws and the written reg-

the Annual General Meeting following his or her 70th birth-

ulations pertaining to each Committee.

day, at the latest. The present average age of members is

n www.baloise.com –› Profile –› Corporate Governance –›

approximately 61. Each member of the Board of Directors

Rules and Regulations

is elected – and, at the shareholders’ request, granted dis-

charge – individually.

internal organization
functions of the Board of Directors
Subject to the decision-making authority of the sharehold-

The Chairman’s Committee provides advice on particularly

important business transactions, especially important stra-

tegic and personnel decisions. It also functions as a Nomi-

nation Committee. The same members make up the Invest-

ment Committee, which approves the Group’s investment

ers at the General Meeting, the Board of Directors is the

policies and real estate investments for the Group’s own

Company’s supreme decision-making body. Decisions are in

use at Head Office.

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E G O V E R N A N C E

The Compensation Committee sets the structure and

amount of compensation to members of the Board of Direc-

2005 Board attendance:
meetings of the Board of Directors

tors and salaries of Corporate Executive Committee mem-

Name

3.23.05

5.18.05 8.31.05

12.7.05 12.8.05

bers. It formulates an incentive plan setting forth high-lev-

Rolf Schäuble, Chairman

el corporate goals and defining attainment of these goals.

Georg F. Krayer, Vice-Chairman

It approves compensation policies for Corporate Executive

Christoph J.C. Albrecht

Committee members and oversees their proper application.

Andreas Burckhardt

The Audit Committee supports the Board of Directors in

Hansjörg Frei

its general and financial oversight duties, which cannot be

Gertrud Höhler

delegated (Art. 716a, Swiss Code of Obligations), by form-

Klaus Jenny

ing its own judgement of the organizational structure and

Werner Kummer

functioning of the internal and external auditing system and

Arend Oetker

the annual and consolidated financial statements.

Eveline Saupper

The Audit Committee additionally assesses the quality

x = present; o = absent

of the internal control system, including risk management,

n www.baloise.com –› Porträt –› Corporate Governance –›

and gives scrutiny to the state of compliance within the com-

Board and Management

pany. The Audit Committee discussed the fiscal 2005 con-

solidated financial statements both with management and

In 2005, as every year, a seminar was held for members of

with the external auditors. On the basis of these discus-

the Board of Directors. This year’s topic was corporate strat-

sions, the Audit Committee recommended that the audit-

egy.

ed annual financial statements be incorporated into the

The Chairman’s Committee met five times last year,

Group’s Annual Report for the fiscal year ended December

including one two-day strategy session. The Investment

31, 2005 for submission to the Annual General Meeting. The

Committee met twice. The Audit Committee held five meet-

Board of Directors concurred with this proposal.

ings, the Compensation Committee two.

Board of Directors and Committee meetings
In accordance with the Bylaws, the full Board of Directors

regularly invited to meetings of the full Board of Directors.

Meetings of the Audit Committee are generally attended by

meets as often as business requires, but no less than four

the Chief Executive Officer, the Chief Financial Officer, the

times a year.

head of the Corporate Audit department and representa-

n www.baloise.com –› Porträt –› Corporate Governance –›

tives of the external auditors.

Members of the Corporate Executive Committee are

Rules and Regulations

In 2005 the full Board of Directors met five times. The direc-

tors’ attendance at full Board meetings can been seen in the

following table. All Committee members were present at all

Division of authorities and duties between the
Board of Directors and the Corporate executive
Committee
The division of authorities and duties between the Board of

of the additional 13 Committee meetings. Thus board atten-

Directors and the Corporate Executive Committee is primar-

dance by members of the Baloise Board of Directors is a

ily governed by the Bylaws and Investment Policies. Both

respectable 97.8%.

documents are continually reviewed and adjusted to chang-

ing circumstances as needed.

n www.baloise.com –› Porträt –› Corporate Governance –›

Rules and Regulations

Auditing and monitoring the Corporate executive
Committee
The Corporate Audit department with its ten auditors reports

directly to the Chairman of the Board of Directors. The audi-

tors are experts in underwriting, actuarial theory, finance

and information technology.

Since effective risk management is of central impor-

tance for an insurance group, a section of the Financial

Report starting on page 24 is dedicated to the management

of financial risks.

CO R P O R AT E G O V E R N A N C E

4. The Corporate executive Committee

December 1, 2004 he has served on the Corporate Executive

Committee (Head of Corporate Finance) with responsibility

The management structure of the Baloise Group is present-

for financial relations, financial management and financial

ed on page 49.

accounting, as well as corporate development and run-off

since August 31, 2005.

Changes on the Corporate executive Committee
Bruno Dallo resigned from the Corporate Executive Com-

mittee effective August 31, 2005. The Executive Committee

Martin Strobel (1966, German, Dr. rer. pol.) studied comput-
er science, business management and business information

now consists of four members. Corporate Human Resourc-

systems at the universities of Kaiserslautern, Windsor (Can-

es reports to the Chief Executive Officer. Corporate Develop-

ada) and Bamberg, completing his studies with a doctorate

ment and Run-off now report to German Egloff, CFO. Com-

(Dr. rer. pol.). From 1993 to 1999 he held various posts at

pliance reports to Thomas Sieber, head of Legal, Tax and

Boston Consulting Group, Düsseldorf, in the fields of strate-

Compliance, who in turn reports to the Chief Executive Offi-

gic IT management in the banking and insurance sector. He

cer.

joined the Baloise Group at the start of 1999, serving as head

of IT at Baloise Switzerland and responsible for major cross-

frank Schnewlin (1951, Swiss, Dr. ès. sc. écon., Master of
Science LSE, MBA Harvard) studied business management

division insurance and finance projects within the Baloise

Group. Since 2003 he has served on the Corporate Execu-

at the University of St. Gallen, graduating with a degree in

tive Committee with responsibility for the Switzerland divi-

economics (lic. oec. HSG) with specialization in insurance

sion. Martin Strobel serves on the Board of the Swiss Insur-

and risk management. He earned a Master of Science at the

ance Association (SIA) and on the Board of Prevo-System AG,

London School of Economics, Master of Business Adminis-

Basel.

tration at Harvard Business School, Boston and a doctorate

in economics (Dr. ès. sc. écon.) at the University of Lausanne.

He was a research fellow at Harvard Business School. He

Martin wenk (1957, Swiss, lic. iur) studied law at the Univer-
sity of Basel, graduating with a lic. iur. degree. From 1982 to

worked at the Institut für Versicherungswirtschaft, St. Gal-

1992 he worked for a major bank, where he occupied a num-

len and Citibank N.A., New York. He was employed at Zur-

ber of posts: after initially working as an investment advisor

ich Financial Services Group from 1983 to 2002 in various

to institutional clients, he went on to head a private banking

positions. He joined its Group Management Board in 1993

group in New York and then became a sector head in securi-

with responsibility for the Southern Europe, Asia/Pacific,

ties sales, where he primarily attended to the needs of major

Latin America, Middle East and Africa business division and

institutionals. During this period, he attended further train-

served as Head of Corporate Center and on the Executive

ing courses in Switzerland and the USA. From 1992 to 2000

Committee of the Group Management Board from November

he headed Portfolio Management Switzerland at the Balo-

2000. Frank Schnewlin has been Chief Executive Officer and

ise Group. Here he was responsible for managing the assets

Head of the International Division at the Baloise Group since

of various Baloise Group companies (in Switzerland and

March 2002. He is a board member of the Basel Chamber of

abroad), including a number of pension funds. In 2001 he was

Commerce.

appointed as member of the Corporate Executive Committee,

responsible for Asset Management, comprising Investment

German egloff (1958, Swiss, lic. oec. HSG) graduated in
management studies from the University of St. Gallen. From

Strategy and Investment Controlling, Baloise Asset Manage-

ment, Real Estate and Baloise Fund Invest. Martin Wenk is

1985 he held various management positions at Winterthur

Chairman of the Investment Commission of the Swiss Insur-

Insurance, Switzerland. He served as head of Management

ance Association SIA and serves on the boards of Unigestion

Support from 1990 to 1995, where among other things he

Holding, Geneva and HW Finanz AG, Pratteln.

was responsible for developing a management information

system. From 1997 he was responsible for individual non-

Further information on the members of the Corporate Execu-

life insurance as a member of the Executive Board, includ-

tive Committee is available on the Internet.

ing managing Wincare and serving as Chairman of the Board

With the exception of Martin Strobel and Martin Wenk, the

for Sancare. From 1998 to 2002 he was Chief Financial Offi-

members of the Corporate Executive Committee do not serve

cer of Winterthur Switzerland and member of the Administra-

on the boards of companies outside the Baloise Group.

tive Board of Wincare, serving as Chairman from 2000. From

There are no management contracts assigning manage-

2002 to 2004 he was Chief Financial Officer at Zurich Finan-

ment duties to third parties

cial Services, Switzerland, with responsibility for finance,

n www.baloise.com –› Profile –› Organization –›

human resources, IT, logistics and procurement. Since

Corporate Executive Committee

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E G O V E R N A N C E

5. Compensation, sharehodings, loans

Compensation for the entire operating management team

Chairman of the Board of Directors and Corporate
executive Committee
The Compensation Committee of the Board of Directors

consists of a base salary and an incentive based on the

establishes the amount and type of compensation for the

attainment of corporate and individual goals.

Chairman of the Board of Directors and members of the Cor-

The following section is divided into three parts:

porate Executive Committee. Compensation is composed of

n Members of the Board of Directors (other than the

a base salary plus an incentive of up to two-thirds of the

Chairman)

n Chairman of the Board of Directors

n Corporate Executive Committee

base salary based on attainment of corporate and individ-

ual goals. 50% of the incentive must be drawn in shares.

The corporate goals are developed in a multi-stage process

and approved by the Compensation Committee at the end

Members of the Board of Directors
The members of the Board of Directors other than the Chair-

of each year for the following year. The individual goals are

closely related to the accountabilities of each member of the

man receive a lump-sum cash emolument established by

Corporate Executive Committee. They are established joint-

the Board’s Compensation Committee. Beginning in 2006,

ly with the individual’s supervisor and likewise approved by

25% of directors’ annual fees will be paid in shares with a

the Compensation Committee.

vesting period of three years. As is the case for direct share

Two forms of share-based compensation are available to

subscriptions by management, the members of the Board

all individuals eligible for an incentive:

of Directors will receive a discount of 10% from the market

The shares may be subscribed directly at a preferred

price.

price 10% below the current market price.

The 2005 figures subject to disclosure pursuant to the

Or the subscription is associated with a loan which lever-

relevant directive are as follows for the nine non-executive

ages the effect of the share subscription. Repayment of the

members of the Board of Directors:

loan upon expiry of a three-year vesting period is hedged by

Compensation during the year under review

ry of the vesting period, the employee may freely dispose of

a put option financed by the sale of a call option. Upon expi-

Cash compensation

Shares granted

Options granted

Additional fees and remunerations

CHF 1,360,000

the shares remaining after repayment of the loan.

Chairman of the Board of Directors:
Rolf Schäuble

Total compensation

CHF 1,360,000

Compensation during the year under review

Shareholdings and options

Cash compensation

Shareholdings

57,520 registered shares

Shares granted

Options granted

Loans to members of governing bodies

Additional fees and remunerations

CHF 1,926,302

CHF 420,019

Mortgages and policy loans

CHF 650,000 (1 person)

Total compensation

CHF 2,346,321

1 Mortgages are granted at employee terms (1% below the client interest rate for variable-
ate mortgages; preferred interrest for fixed-rate mortgages). There are no outstanding
policy loans.

Shareholdings and options

Shareholdings

38,165 registered shares

A former member of the Board of Directors received compen-

sation of CHF 160,000.

Loans to members of governing bodies

Mortgages and policy loans

CHF 500,000

1 Mortgages are granted at employee terms (1% below the client interest rate for variable-
ate mortgages; preferred interrest for fixed-rate mortgages). There are no outstanding
policy loans.

CO R P O R AT E G O V E R N A N C E

Members of the Corporate executive Committee
Since the resignation of Bruno Dallo effective August 31,

Statutory quorums
The Annual General Meeting has a quorum regardless of the

2005 the Corporate Executive Committee has consisted of

number of shareholders and proxy votes present, subject

four members. Bruno Dallo’s compesation up to his resigna-

to the obligatory cases specified by law (Art. 17 Articles of

tion date is included in total compensation for the Corporate

Incorporation).

Executive Committee.

n www.baloise.com –› Profile –› Corporate Governance –›

Rules and Regulations

Compensation during the year under review

Cash compensation

Shares granted

Options granted

Additional fees and remunerations

Total compensation

Shareholdings and options

CHF 3,761,302

Waiver of statutory voting rights limitations requires the

CHF 1,290,852

consent of at least three-fourths of the votes represented

at the Annual General Meeting, which must also comprise

at least one-third of all shares issued by the Company. The

CHF 5,052,154

same qualified majority applies likewise in the other cases

specified in Art. 17 (3) a–h Articles of Incorporation. In other

cases, resolutions are taken by a simple majority of shares

Shareholdings

204,958 registered shares

voted (Art. 17 Articles of Incorporation), subject to manda-

Loans to members of governing bodies

n www.baloise.com –› Profile –› Corporate Governance –›

Mortgages and policy loans

CHF 1,000,000 (1 Person)

Rules and Regulations

tory provisions of law.

1 Mortgages are granted at employee terms (1% below the client interest rate for variable-
ate mortgages; preferred interrest for fixed-rate mortgages). There are no outstanding
policy loans.

Convocation of the Annual General Meeting
The Annual General Meeting is generally held in April, but

CHF 666,668 was paid to the departing member of the Cor-

no later than six months after the end of the fiscal year.

porate Executive Committee in settlement of continuing

The Articles of Incorporation (Art. 29) were amended at the

contractual obligations, pay continuation and severance. A

2005 Annual General Meeting so that the Bâloise-Holding

total of CHF 881,750 was disbursed to a former member of

fiscal year now ends on December 31. The General Meet-

the Corporate Executive Committee for incentive payments

ing is convoked at least 20 days before the assembly date.

from previous years, pay continuation and severance.

Each registered shareholder receives a personal invitation

6. Shareholders’ participation rights

with agenda. The invitation and agenda are published in the

“Schweizerisches Handelsblatt”, in various newspapers

and on the Internet. Extraordinary General Meetings are

convoked by resolution of the Annual General Meeting, the

Baloise share capital consists solely of registered shares.

Board of Directors or the external auditors. An extraordinary

There are no shares with preferred voting rights. With a

General Meeting must also be convoked by the Board of

view to maintaining a broad shareholder base and protect-

Directors, in accordance with applicable law, at the request

ing minority shareholders, no shareholder is registered with

of shareholders (Art. 11 Articles of Incorporation). Pursuant

more than 2% of voting rights, regardless of the number of

to Art. 699 (3) Swiss Code of Obligations, these sharehold-

shares held. The Board of Directors may approve exceptions

ers must represent at least 10% of the share capital.

to this rule by a two-thirds majority of all members (Art. 5 of

n www.baloise.com –› Profile –› Corporate Governance –›

the Articles of Incorporation). There are currently no excep-

Rules and Regulations

tions.

Each share conveys a right to one vote. In exercising vot-

ing rights, no shareholder may directly or indirectly combine

Agenda items
Pursuant to Art. 699 (3) Swiss Code of Obligations, one or

his own and proxy votes for a total of more than one-fifth of

more shareholders who together represent shares with a

shares entitled to vote at the Annual General Meeting. Each

par value of at least CHF 100,000 may apply for items to be

shareholder may assign the exercise of his voting right by

placed on the agenda. Such application must be submit-

a written proxy to another shareholder (Art. 16 Articles of

ted to the Board of Directors in writing with indication of the

Incorporation).

items to be addressed to the General Meeting no later than

n www.baloise.com –› Profile –›

six weeks before the regular Annual General Meeting (Art.

Corporate Governance –› Rules and Regulations

14 Articles of Incorporation).

n www.baloise.com –› Profile –› Corporate Governance –›

Rules and Regulations

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E G O V E R N A N C E

Registrations in the share register
Those shareholders entered in the share register as holding

8. Auditors

voting rights on the closing date specified in the invitation

PricewaterhouseCoopers

(PwC) or

its predecessor

from the Board of Directors, a few days before the General

Schweizerische

Treuhandgesellschaft/STG-Coopers &

Meeting, are entitled to vote at the Annual General Meeting

Lybrand have been the Baloise’s external auditors since

(Art. 16 Articles of Incorporation).

1962, elected annually by the Annual General Meeting. The

statutory auditors are chosen by the General Meeting each

Admissibility of nominee registrations, along with an in-

year. Peter Lüssi has performed auditing functions for the

-dication of percent clauses, if any, and registration con-

Baloise since 1999 and has served as Lead Auditor since

ditions are governed by Art. 5 of the Articles of Incorpo-

2002.

ration. Procedures and requirements for prohibition or

In 2004 PwC was appointed external auditor for all

restriction of transferability are governed by the provisions

Group companies in a competitive bidding process. Imple-

of Art. 5 and Art. 17.

mentation was largely complete in 2004 and concluded in

n www.baloise.com –› Profile –› Corporate Governance –›

2005. This and the comprehensive IFRS restatements (one-

Rules and Regulations

off effect) explain the 2005 rise in fees.

7. Changes of control and defence measures

Auditing fee

3,278,000

5,358,000

PricewaterhouseCoopers fees

2004

2005

Fee for audit-related activities

499,000

238,000

Shareholders or groups of shareholders acting in collu-
sion have an obligation, upon acquiring 331⁄3% of all Balo-
ise shares, to tender a takeover offer to all remaining share-

Consulting fee

Total

in CHF

holders. The Baloise has not opted to modify or waive this

1,017,000

1,076,000

,,000

,2,000

rule. There is neither a statutory opting-out nor an opting-up

The Baloise has an Audit Committee made up of indepen-

clause as specified in the Federal Act on Stock Exchanges

dent members qualified in finance and accountancy. The

and Securities Trading (SESTA).

Audit Committee met four times during the year under

There are agreements with the members of the Corpo-

review, with the external auditors present each time.

rate Executive Committee and other senior managers which,

The Audit Committee assesses the performance of the

in the event of termination by the employer (or under cer-

external auditors and their collaboration with the Inter-

tain circumstances by the employee) will trigger a severance

nal Audit group, Risk Management and Compliance. It dis-

benefit within a certain period after a change of control. The

cusses with the external auditors in particular the latters’

amount of these benefits is within the customary range for

audit work and reports along with the material results and

the market.

the most important issues arising during the audit process.

Before the start of the annual audit, the Audit Committee

reviews the scope of the examination and proposes areas

warranting special attention.

The Audit Committee thereupon investigates the inde-

pendence of the external auditors. It proposes external

auditors to the Board of Directors for election by the Annual

General Meeting and makes recommendations concerning

the auditors’ fees. The Audit Committee reviews the exter-

nal auditors’ fees annually.

The Audit Committee reviews the usefulness of the exter-

nal auditors’ services not performed in connection with

their auditing activities. There is a written instruction stip-

ulating that material services not related to auditing activi-

ties require prior approval by the Internal Audit unit.

CO R P O R AT E G O V E R N A N C E

9. information policy

Available documents
Press releases, disclosures, presentations, Annual Reports,

information principles
The Baloise Group provides comprehensive, open and regu-

Financial Reports, Semi-Annual Reports and further docu-

ments are available to the public on the Internet. All docu-

lar information to shareholders, potential investors, employ-

ments are available from the Investor Relations department

ees, clients and the general public.

or can be downloaded from the Internet.

All registered shareholders receive Annual (Business

n www.baloise.com –› Investor Relations –› Prasentations

Review) and Semi-Annual Reports providing commentary

on the course of business. The Financial Report is sent

to shareholders upon request. All publications are made

available to all shareholders simultaneously.

Contacts

All investors enjoy equal information rights. We use tech-

nologies such as webcasting and teleconferencing to open

investor Relations
Carsten Stolz

our meetings with financial analysts to the general public.

Head of Financial Relations

information occasions
The Baloise provides comprehensive information on its

business activities at

Aeschengraben 21

CH-4002 Basel

Phone +41 61 285 83 65

Fax +41 61 285 75 62

Media conferences: Earnings are presented and goals,

E-mail carsten.stolz@baloise.com

strategies and business activities explained at media

conferences (a conference on release of the annual

financial statements and an interim conference at the

Corporate Governance
Thomas Sieber

half-year mark).

Secretary to the Board of Directors

Financial analyst meetings: Financial analyst meetings

Head of Legal, Tax and Compliance

take place at the close of each year and half-year, with a

Aeschengraben 21

parallel webcast and teleconference. The events can be

CH-4002 Basel

downloaded afterwards from the Internet.

Phone +41 61 285 86 48

Annual General Meeting: Shareholders are given infor-

Fax +41 61 285 91 90

mation on the course of business at the Annual General

E-mail thomas.sieber@baloise.com

Meeting. Speeches given at the Annual General Meeting

are published on the Internet.

www.baloise.com

Road shows: Regular road shows are held at various

financial centers.

Investor conference: Key business and strategy topics

are reviewed in depth.

Individual meetings with analysts, investors and media

representatives. Relations with analysts, investors and

the media are continually cultivated.

information on Baloise shares
Information on Baloise shares can be found from page 10 of

the Annual Report – Business Review.

financial calendar
Important dates for investors, including publication dates of

the annual and semi-annual financial statements, are avail-

able on the Internet. The date and invitation to the Annual

General Meeting, date of closure of the share register and

ex-dividend date if any are also published.

n www.baloise.com –› Investor Relations –› IR Agenda

Bâloise-Holding Annual Report 2005 – Business Review

B O A R D O F D I R E C T O R S

O R G A N I Z AT I O N

organization

Board of Directors

Members

Board committees

Rolf Schäuble, Chairman, Lenzburg
Georg F. Krayer, Vice-Chairman, Basel
Christoph J.C. Albrecht, Basel
Andreas Burckhardt, Basel
Hansjörg Frei, Mönchaltorf
Gertrud Höhler, Berlin
Klaus Jenny, Zurich
Werner Kummer, Küsnacht
Arend Oetker, Berlin
Eveline Saupper, Pfäffikon SZ

Secretary to the Board of Directors
Thomas Sieber, Rheinfelden

internal Audit

Erich Benischke, Basel

Auditors

PricewaterhouseCoopers AG, Basel

Chairman’s Committee
Rolf Schäuble, Chairman
Georg F. Krayer, Vice-Chairman
Hansjörg Frei

Klaus Jenny

Audit Committee
Werner Kummer, Chairman
Christoph J.C. Albrecht, Vice-Chairman
Andreas Burckhardt

Hansjörg Frei

Compensation Committee
Georg F. Krayer, Chairman
Klaus Jenny, Vice-Chairman
Gertrud Höhler

Eveline Saupper

investment Committee
Rolf Schäuble, Chairman
Georg F. Krayer, Vice-Chairman
Hansjörg Frei

Klaus Jenny

B O A R D O F D I R E C T O R S

O R G A N I Z AT I O N

Management structure (on March 1, 2006)

Ceo
Frank Schnewlin*

Group/Regional Performance Management
Annemarie D’Hulster / Martin Kampik

Corporate Secretary
Markus von Escher

Legal, Tax and Compliance
Thomas Sieber

Corporate Communications
Thomas Kähr

Human Resources
Frank Sigl

Switzerland
Martin Strobel*

international
Frank Schnewlin*

finance
German Egloff*

Asset Management
Martin Wenk*

Private and Corporate
Customers
Franz Josef Kaltenbach

Baloise Bank SoBa
Alois Müller

Sales Management
Daniel Fluri

Information Systems
and Logistics
René Güttinger

Accounting/Controlling
Urs Bienz

Deutscher Ring Germany
Wolfgang Fauter

Financial Accounting
Michael Müller

Basler Securitas
Germany
Frank Grund

Bâloise Luxembourg
André Bredimus

Basler Austria
Lothar Mayrhofer

Mercator Belgium
Jan De Meulder

Financial Management
Stefan Nölker

Financial Relations
Carsten Stolz

Corporate Development
Thomas Wodrich

Run Off
Bruno Rappo

Investment Strategy and
Investment Controlling
Bernhard Casar

Baloise Asset Management
Reto Diezi

Baloise Fund Invest
Robert Antonietti

Real Estate
Urs Degen

* Member ot the Corporate Executive Committee

Bâloise-Holding Annual Report 2005 – Business Review

CO R P O R AT E E X E C U T I V E CO M M I T T E E

Frank Schnewlin, Chief Executive Officer

Martin Wenk, Asset Management

CO R P O R AT E E X E C U T I V E CO M M I T T E E

Bâloise-Holding Annual Report 2005 – Business Review

German Egloff, Finance

Martin Strobel, Switzerland

Management information

Contents

Consolidated income statement (five-year review)

Consolidated balance sheet

Premiums and combined ratio

Technical income statement

Gross premiums by line of business

Embedded value

Banking business

Investment performance

The previous year’s figures have been restated in ac-

cordance with the modified IFRS regulations.

The consolidated annual financial statements of

Baloise Group and the annual financial statements of

Bâloise-Holding for the 2005 financial year as well as the

reports of the Group and external auditors are contained

in the Financial Report. These annual financial statements

have been examined by PricewaterhouseCoopers AG as

Group and external auditors. PricewaterhouseCoopers

provided an unqualified opinion in its auditor’s reports of

March 10, 2006, recommending that the financial state-

ments be approved by the Annual General Meeting.

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Consolidated income statement
five-year review

2001

2002

2003

income
Premiums earned and policy fees (gross) 1

Reinsurance premiums ceded

Premiums earned and policy fees for own account

Income from capital investments

Realized gains and losses on capital investments 2

Income from services

Net income from associated companies

Other operating income

Income

expense
Claims and benefits paid (gross)

Change in actuarial provisions (gross)

Share of reinsurance in claim payments

Acquisition costs

Operating and administrative expenses for insurance business

Expense for management of capital investments

Interest expense on the insurance business

Expense from financial contracts

Other operating expenses

Expense

Borrowing costs

Pre-tax annual profit/loss

Income taxes

Consolidated annual profit/loss

Allocated to:

Shareholders

Minority interests

in CHF million

Earnigs/loss per share

Diluted

Basic

in CHF

6,642.3

–208.9

6,433.4

2,121.8

155.7

318.1

11.8

155.7

7,249.0

–203.0

7,046.0

2,021.9

–793.2

300.9

53.5

191.5

2004
(restated)

6,936.0

–211.2

6,724.8

2005

6,835.1

–197.3

6,637.8

7,371.1

–256.4

7,114.7

2,063.8

1,862.1

1,794.5

–32.7

319.0

26.4

157.7

265.2

312.2

3.7

137.1

549.4

211.9

35.5

74.3

,.5

,20.

,05.

,0.

–4,643.8

–1,824.8

–4,773.1

–2,358.2

–5,561.3

–1,645.4

–5,418.4

–1,251.4

–5,772.1

–1,094.6

160.0

–367.9

–720.8

–60.8

–111.3

–366.6

–697.6

58.2

–461.8

–740.3

–67.1

–111.7

–334.2

–703.2

78.7

–277.1

–835.6

–75.9

–98.9

–296.4

–671.1

51.6

–475.3

–806.4

–75.9

–90.1

–248.9

–612.9

189.7

–524.8

–815.1

–88.1

–78.5

–130.0

–460.6

–,.

–,.0

–,2.

–,.

–39.9

52.0

–116.9

–43.5

–.

82.7

–.

404.4

1.7

–634.5

2.9

7.31

–11.56

–42.2

22.

–125.4

91.4

6.9

1.67

–52.6

–101.5

22.

210.0

13.3

–53.4

–72.4

0.5

395.8

7.7

3.89

7.29

M A N A G E M E N T I N F O R M AT I O N

Additional information

Gross premiums written and policy fees (gross)

Investment-type premiums

Gross premiums, policy fees and investment-type premiums

in CHF million

Investments for the account and
the risk of life insurance policyholders

Combined ratio (gross)

Reserve ratio non-life

in percent

2001

2002

2003

6,632.7

248.4

6,881.1

7,274.5

253.0

7,527.5

7,374.7

261.0

7,635.7

2004
(restated)

6,941.3

443.0

7,384.3

2005

6,839.1

554.4

7,393.5

512.4

105.7

184.3

550.5

105.2

181.1

798.2

97.6

177.4

1,143.6

93.0

179.6

2,245.8

100.63

187.0

1 In accordance with the accounting principles of the Baloise Group, investment-type premiums are not included
in premiums earned and policy fees

2 Including financial liabilities held for trading (derivative financial instruments)

3 Excluding legally required interest on annuity reserves

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Consolidated balance sheet
five-year review

Assets

Property, plant and equipment

Intangible assets

Investments in associated companies

Investment properties

Financial assets of an equity nature

Financial assets of a debt nature

Mortgages and loans

Derivative financial instruments

Other assets/receivables

Deferred tax assets

Cash and cash equivalents

Total assets

in CHF m

2001

2002

2003

2004
(restated)

735.0

930.7

305.6

5,042.1

11,472.4

705.5

958.0

302.3

5,305.7

7,175.7

696.8

647.5

1,091.0

1,223.1

241.0

5,653.4

5,413.7

152.6

5,619.2

6,757.4

2005

626.3

1,162.4

174.7

5,581.7

9,839.0

21,421.6

24,899.1

32,367.0

23,208.8

22,915.1

12,163.5

12,052.4

12,459.1

16,995.5

17,635.5

19.3

212.8

292.9

264.9

3,947.9

4,093.0

4,484.1

2,516.9

567.6

889.1

529.9

679.4

905.9

695.9

999.7

698.0

48.6

2,652.3

1,022.2

450.2

5,.

,00.

5,0.

2,0.0

M A N A G E M E N T I N F O R M AT I O N

Liabilities & equity

Equity

Equity before minority interests

Minority interests

Total equity

Liabilities

Actuarial provisions (gross)

Financial liabilities

Derivative financial instruments

Other liabilities and deferrals

Deferred tax liabilities

Total liabilities

Total equity and liabilities

in CHF m

2001

2002

2003

2004
(restated)

2005

5,.

,0.

41.5

28.0

40.7

63.9

60.9

5,2.

,0.5

37,196.5

38,921.0

43,521.2

42,825.8

44,721.1

8,609.2

8,393.5

9,904.1

5,493.9

6,062.5

59.9

4,562.0

1,640.9

87.0

5,184.7

1,211.5

252.4

5,621.8

1,640.8

160.3

5,395.7

1,710.1

243.4

4,965.1

1,724.6

52,0.5

5,.

0,0.

55,55.

5,.

,00.

5,0.

2,0.0

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Premiums and combined ratio

Gross premiums 200 (restated)

Basler
Securitas

Deutscher
Ring

Total

Belgium Luxembourg

Total

Austria

Other2

Total

Group Switzerland

Germany

Benelux

Other countries

Non-life

Life

Total

in CHF million

3,065.1

1,281.1

852.7

208.6 1,061.3

557.4

3,876.2

2,640.2

241.5

818.1 1,059.6

110.2

,2. ,0.2 ,02. 2,20.

40.1

35.3

597.5

145.5

83.6

30.9

41.6

–/–

125.2

30.9

Gross premiums 2005

Group Switzerland

Germany

Benelux

Other countries

Non-life

Life

Total

in CHF million

Basler
Securitas

Deutscher
Ring

Total

Belgium Luxembourg

Total

Austria

Other2

Total

3,055.4

1,286.9

835.0

213.6 1,048.6

539.8

3,783.7

2,532.4

222.7

838.8 1,061.5

118.3

43.0

35.2

582.8

153.5

91.6

36.3

,. ,05. ,052. 2,0.

45.5

–/–

5.5

137.1

36.3

Combined ratio (gross), non-life 200 (restated)

Group Switzerland

Germany

Benelux

Other countries

Loss ratio

Expense ratio

Surplus sharing ratio

Combined ratio

as a percentage of premiums earned

Basler
Securitas

Deutscher
Ring

68.5

23.7

0.9

61.2

31.6

0.1

42.1

53.7

–/–

63.0

29.6

0.4

Total

Belgium Luxembourg

Total

Austria

Other2

57.5

35.9

0.1

64.9

30.4

0.0

56.5

42.7

–/–

64.4

31.2

0.0

65.0

40.2

–/–

05.2

18.6

12.7

1.5

Total

49.5

31.0

0.5

Combined ratio (gross), non-life 2005

Group Switzerland

Germany

Benelux

Other countries

Loss ratio

Expense ratio

Surplus sharing ratio

Combined ratio

as a percentage of premiums earned

Combined ratio non-life

Loss ratio

Expense ratio

Surplus sharing ratio

Combined ratio

as a percentage of premiums earned

* restated

Reserve ratio non-life

Acturial provision for own account

Premiums written and policy fees for own account

Reserve ratio in percent

in CHF million

1 Premiums written and policy fees (gross)
2 Group business, run-off
3 Excluding legally required interest on annuity reserves

Basler
Securitas

Deutscher
Ring

Total

Belgium Luxembourg

Total

Austria

70.5

29.7

0.4

88.4

24.1

0.8

00.

63.9

29.7

0.3

37.8

56.7

–/–

58.6

35.2

0.2

61.9

32.2

0.0

47.4

39.4

–/–

60.8

32.7

0.0

64.7

39.0

–/–

Other2

–11.3

16.5

–1.0

Gross

Total

39.2

31.4

–0.3

Net

2004*

2005

2004*

2005

63.0

29.6

0.4

70.5

29.7

0.4

00.

66.0

31.1

0.4

68.3

31.3

0.4

00.0

2004

2005

(restated)

5,204.8

5,401.7

2,897.2 2,888.9

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Technical income statement

Gross

Gross premiums written and policy fees

Changes in unearned premiums

Premiums earned and policy fees (gross)

Claims and benefits incurred (gross)

Change in actuarial provisions (gross)

Change in claim reserves / actuarial reserves1

Policyholders bonuses incurred

Technical costs

Total underwriting result (gross)

Reinsurance ceded

Reinsurance premiums ceded

Share of reinsurance in claim payments

Technical costs

Total underwriting result of business ceded

Net for own account

Premiums earned and policy fees

Claims and benefits paid

Change in claim reserves / actuarial reserves1

Policyholder bonuses incurred

Technical costs

Total underwriting result for own account

Income from capital investments (gross)

Realized gains and losses on capital investments (net)2

Expenses for management of capital investments

Other financial income and expenses

Investment result

Borrowing costs

Pre-tax annual profit

Income taxes

Annual net profit/loss

in CHF million

1 including claim processing costs
2 including financial liabilities held for sale (derivative financial instruments)

Non-life

2004

2005

2004

(restated)

Life

2005

3,080.8

3,062.9

3,876.2

3,783.6

–4.5

4.9

–/–

3,076.3

3,067.8

3,876.2

3,783.6

–1,527.8

–1,853.0

–3,887.5

–3,924.7

–409.3

–333.0

–13.0

–11.4

–910.5

–913.3

–388.0

–451.2

–469.8

–462.9

–286.8

–524.3

25.

–2.

–,20.

–,5.

–183.3

30.5

9.5

–.

191.7

10.1

–43.6

–2.0

27.8

6.4

–.

–6.4

29.5

2,893.0

2,884.2

3,832.6

3,762.6

–1,527.8

–1,853.0

–3,887.5

–3,924.7

–378.8

–13.0

–141.3

–11.4

–901.0

–903.2

257.7

–14.8

–17.2

–58.9

–/–

2.2

–60.9

–2.

282.8

65.3

–19.5

–50.3

–/–

25.

–10.8

–360.2

–451.2

–463.4

–469.3

–286.8

–494.8

–,2.

–,.0

1,358.2

1,350.7

276.0

–58.4

428.6

–68.3

–178.6

–147.3

,.2

,5.

–/–

–11.3

–/–

50.

–23.3

22.

5.2

M A N A G E M E N T I N F O R M AT I O N

Gross premiums by line of business

non-life
Accident

Health

General liability

Automobile

Transport

Property

Other

Reinsurance assumed

Gross premiums written – non-life

in CHF million

Life
Single premiums

Recurring premiums

Investment-type premiums

Gross premiums written – life

in CHF million

2004
(restated)

435.0

120.9

314.1

2005

435.6

110.3

328.9

1,026.0

1,010.3

151.8

919.7

42.4

70.9

148.9

917.3

41.5

70.1

,00.

,02.

2004
(restated)

1,679.4

2,639.8

–443.0

,.2

2005

1,637.8

2,700.3

–554.4

Change in
percent

0.1

–8.8

4.7

–1.5

–1.9

–0.3

–2.1

–1.1

–0.6

Change in
percent

–2.5

2.3

25.1

–2.4

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Embedded value

Development of embedded value
Embedded value at January

Operating profit from insurance business in force and adjusted equity and
profit from new business

Economic changes, including changes in unrealized gains and losses on investments
(equities and properties)

Dividends and capital movements

Currency translation adjustments

Embedded value at December

of which: Value of insurance business in force

of which: Adjusted equity

of which: Cost of solvency

in CHF m; all figures “after tax”

new business
Value new business in CHF million

APE1 in CHF million

Sensitivity of new business value to risk discout rate (+/– 1.0%)

Ratio new business value to APE

in percent

Sensitivities
+/– 1% change in risk discount rate

+/– 10% change in market value of equities

+/– 10% change in market value of properties

+/– 0.5% change in new money rate

in percent

1 Annual Premium Equivalent = 100% annual premium of new business + 10% single premium

2004

2005

,0.2

2,.

118.8

206.3

–5.2

46.6

–3.6

14.1

0.0

2.5

2,.

2,5.

1,181.7

1,072.9

1,400.3

1,761.9

–445.2

–475.1

2004

15.2

261.2

2005

12.0

225.4

–/– –47.1/+54.6

2004

2005

–6.9 / +8.1

–6.3/+7.3

+4.9 / –4.8

+6.3/–6.3

+5.3 / –5.3

+5.1/–5.1

+7.8 / –8.5

+4.5/–4.9

The embedded value of the life insurance business con-

Ring the embedded value consists only of the sharehold-

sists of three elements: the adjusted net asset value of the

ers’ capital.

life insurance activities, the value of insurance business

in force and the cost of solvency capital. Embedded value

The value of insurance business in force corresponds to

does not take into account any new business that will be

the earnings generated by the insurance portfolio in the

written in the future.

future. These earnings are obtained by discounting expect-

ed future cash flows arising from the existing insurance

The adjusted net asset value is based on the market value

contracts. A large number of assumptions need to be made

of investments and the statutory value of liabilities from

to calculate this value, the most important of which are

insurance operations. The unrealized gains and losses on

listed in the table below.

investments (equities and properties), which can be sub-

ject to significant fluctuations, represent a significant part

The cost of solvency is the charge for the cost of capital

of the adjusted net asset value. For the life operations of

supporting the solvency requirements of the business.

Luxembourg, Austria and Croatia and for the German com-

panies MONEYMAXX Insurance and Deutscher Pensions-

M A N A G E M E N T I N F O R M AT I O N

Geographic breakdown of embedded value
Switzerland

of which: Value of insurance business in force

of which: Adjusted equity

of which: Cost of solvency

of which: Value of insurance business in force

of which: Adjusted equity

of which: Cost of solvency

Consolidation

Embedded Value am . Dezember

in CHF m; all figures “after tax”

1 Consolidation effects are enhanced by the first-time inclusion of further Group companies such as
MONEYMAXX Versicherungen and Deutscher PensionsRing as well as the elimination of income generated outside
the life insurance segment.

new business
New business margin Switzerland in percent

Value new business in CHF million

APE in CHF million

New business margin EU in percent

Value new business in CHF m

APE in CHF million

Assumptions in percent
Group

Risk discount rate

Bond yield

Share return

Property return

Switzerland

Risk discount rate

Bond yield

Equity return

Property return

Risk discount rate

Bond yield

Equity return

Property return

2004

2005

,0.

,.2

962.7

872.9

1,175.2

1,474.0

–357.8

–372.7

219.0

260.3

–87.3

5.5

200.0

347.9

–102.4

–35.2

–60.01

2,.

2,5.

2004

11.6

103.8

3.7

2005

7.6

117.8

4.4

157.3

107.7

2004

2005

7.6

2.8 – 3.4

2.7–2.9

7.2

5.1

7.5

7.2

4.8

7.5

2.6–3.2
.

2.5.–2.7.

7.0

5.0

8.2

7.0

4.75

8.2

4.0–4.6

3.6–3.9

8.0

5.5

8.0

5.0

External review: Deloitte and Touche LLP have reviewed the choice of methodology together with the assumptions and calculations made by Baloise Group in the calculation
of the embedded value results of its Life Business at December 31, 2005. Deloitte have reported to the Baloise Group that they consider that the methodology is appropri-
ate, Baloise’s assumptions are altogether reasonable and that the embedded value results as published above have been properly compiled on the basis of methodology
and assumptions chosen. For the purpose of this report, Deloitte have performed certain checks on data provided by the Baloise Group, but have relied on financial infor-
mation underlying the Group’s financial statements.

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Banking business

Results from banking business

Total interest income

Total interest payable

Net interest income

Result from commission business and services

Result from trading business

Other income

Total income from banking business

Staff costs

Operating expenses

Total expenses related to banking business

Gross profit/loss

Losses and provisions related to credit risks

Amortization and depreciation of intangible assets and tangible noncurrent assets

Annual profit/loss before tax and minority interests

Income taxes

Minority interests

Annual net profit/loss

in CHF million

Additional information

Assets managed for third parties

Risk weighted assets banking activities

in CHF million

Asset allocation

Fixed-interest securities

Derivative financial instruments

Alternative financial assets

Investment properties

Mortgage loans

Policy loans and other loans

Other short-term investments

Total

in CHF million

200
(restated)

288.8

–185.3

0.5

29.0

34.3

2.3

2005

177.4

–78.5

53.2

–2.1

–1.6

–50.4

–66.5

–116.9

–49.8

–42.6

–92.4

52.2

5.0

–11.2

–7.9

31.7

–10.5

–23.5

–10.0

–/–

200
(restated)

2005

7,331.9

8,187.7

3,319.0

3,295.0

200
(restated)

2005

332.2

311.7

1.6

40.5

–/–

34.2

1.7

35.0

–/–

24.9

4,663.8

4,808.5

312.6

129.2

296.6

111.9

5,5.

5,50.

M A N A G E M E N T I N F O R M AT I O N

Investment performance

investment performance 2004 (restated)

Current investment income

Realized gains and losses and valuation changes
charged to income (net)

Change in unrealized gains and losses
taken to equity

Investment management costs

Operating profit

Fixed-interest
securities

756.7

82.2

Investment
properties

Mortgage loans,
policy loans and
other loans

Alternative financial
assets, derivative
financial instru-
ments and other

Total

262.7

733.6

26.9

,2.

104.4

283.9

–64.4

–47.8

–14.9

2.2

83.8

–27.7

–8.9

–6.5

50.

–/–

–12.0

–/–

–9.1

198.3

–20.6

2.2

–5.

2,20.

Average level of investments

22,0.

,2.

5,.

Performance in percent

in CHF million

investment performance 2005

Current investment income

Realized gains and losses and valuation changes
charged to income (net)

Change in unrealized gains and losses
taken to equity

Investment management costs

Operating profit

Fixed-interest
securities

692.7

113.4

Investment
properties

Mortgage loans,
policy loans and
other loans

Alternative financial
assets, derivative
financial instru-
ments and other

Total

253.1

694.7

40.6

,.5

159.0

362.8

–58.8

7.2

–116.4

–70.0

–34.3

763.4

–8.9

,20.

–/–

–12.1

2.2

–/–

–12.8

–99.6

–20.0

–.

–5.

2,5.0

Average level of investments

2,2.

5,00.5

,5.5

5,2.

Performance in percent

in CHF million

–.5

5.0

Bâloise-Holding Annual Report 2005 – Business Review

M A N A G E M E N T I N F O R M AT I O N

Current investment income
Fixed-interest securities

Derivative financial instruments

Alternative financial assets

Investment properties

Mortgage loans

Policy loans and other loans

Other short-term investments

Total current investment income

in CHF million

Realized gains and losses
Fixed-interest securities

Derivative financial instruments

Alternative financial assets

Investment properties

Mortgage loans

Policy loans and other loans

Other short-term investments

Total investment gains and losses

in CHF million

Asset allocation
Fixed-interest securities

Derivative financial instruments

Alternative financial assets

Investment properties

Mortgage loans

Policy loans and other loans

Other short-term investments

Total

in CHF million

200 (restated)

2005

Non-life

128.9

18.6

–/–

0.8

49.6

14.7

37.4

7.7

Life

550.4

56.9

–/–

1.5

208.0

192.4

337.2

11.8

Total

5.5

–/–

25.

20.

Non-life

136.3

23.1

–/–

1.5

49.9

13.2

47.6

11.2

Life

541.1

83.1

–/–

3.2

188.3

180.8

333.7

20.5

Total

0.2

–/–

2.2

25.

,5.2

,5.

22.

,50.

,.5

200 (restated)

2005

Non-life

–8.3

14.2

9.1

–5.7

–8.2

0.8

–14.7

–2.0

–14.8

Non-life

3,897.3

932.6

49.8

254.3

1,000.1

379.3

1,051.0

882.0

Life

67.9

235.1

–15.1

1.3

–14.6

–30.9

–2.1

2.1

243.7

200 (restated)

Life

16,626.7

3,001.9

172.3

1,356.7

4,286.1

4,755.1

7,154.9

1,296.9

Total

–.0

–.

–22.

–0.

–.

22.

Total

20,52.0

,.5

222.

,.0

5,2.2

5,.

,205.

2,.

Non-life

39.7

79.5

–33.5

7.6

–26.9

–1.5

–1.0

1.4

65.3

Non-life

4,418.0

1,145.7

0.4

341.1

959.0

355.4

973.0

676.0

Life

119.6

219.4

–81.7

23.9

–30.9

–16.4

1.3

–0.4

234.8

2005

Life

16,475.3

4,284.4

1.1

1,754.9

4,275.7

4,669.2

7,562.1

802.3

Total

–5.2

–5.

–.

00.

Total

20,.

5,0.

2,0.0

5,2.

5,02.

,55.

,50.

,0.0

,25.0

M A N A G E M E N T I N F O R M AT I O N

Bâloise-Holding Annual Report 2005 – Business Review

Key dates and contacts

Addresses

Switzerland
Basler Versicherungen

Aeschengraben 21

CH-4002 Basel

Phone +41 61 285 85 85

Fax +41 61 285 70 70

Austria
Basler Versicherungen

Brigittenauer Lände 50–54

A-1203 Vienna

Phone +43 1 33 160 0

Fax +43 1 33 160 200

E-mail insurance@baloise.ch

E-mail office@basler.co.at

www.baloise.ch

www.basler.co.at

Baloise Bank SoBa

Amthausplatz 4

CH-4502 Solothurn

Phone +41 32 626 02 02

Fax +41 32 623 36 92

E-mail bank@baloise.ch

www.baloise.ch

Germany
Basler Securitas Versicherungen

Basler Strasse 4, Postfach 1145

D-61281 Bad Homburg

Phone +49 61 7213 0

Fax +49 61 7213 200

E-mail info@basec.de

www.basler-securitas.de

Deutscher Ring

Versicherungsunternehmen

Ludwig-Erhard-Strasse 22

D-20459 Hamburg

Phone +49 40 3599 0

Fax +49 40 3599 2500

Belgium
Mercator Verzekeringen

Desguinlei 100

B-2018 Antwerp

Phone +32 3 247 21 11

Fax +32 3 247 27 77

E-mail info@mercator.be

www.mercator.be

Luxembourg
Bâloise Assurances

1, rue Emile Bian

L-1235 Luxembourg

Phone +352 290 190 1

Fax +352 290 591

E-mail info@baloise.lu

www.baloise.lu

Croatia
Basler osiguranje d.d.

Basler ˇzivotno osiguranje d.d.

E-mail Service@DeutscherRing.de

Ulica grada Vukovara 269 d/1

www.DeutscherRing.de

HR-10000 Zagreb

Phone +385 1 48 17 808

Fax +385 1 48 16 932

E-mail info@basler.hr

www.basler.hr

April 28, 2006
Annual General Meeting

Bâloise-Holding

September 5, 2006
Half-Year Media Conference

September 5, 2006
Meeting of Financial Analysts

March 21, 2007
Annual Media Conference

March 21, 2007
Meeting of Financial Analysts

April 27, 2007
Annual General Meeting

Bâloise-Holding

investor Relations
Carsten Stolz

Aeschengraben 21

CH-4002 Basel

Phone +41 61 285 83 65

Fax +41 61 285 75 62

E-Mail investor.relations@baloise.com

Media Relations
Philipp Senn

Aeschengraben 21

CH-4002 Basel

Phone +41 61 285 84 67

Fax +41 61 285 90 06

E-Mail media.relations@baloise.com

www.baloise.com

The Baloise

our Profile

Headquartered in Basel (Switzerland) and with operations in continen-

tal Europe, the Baloise Group is a solution provider in the fields of insur-

ance and pension for the future. The Group’s strategic focus is on sustain-

able, income-oriented growth. Core markets are Switzerland, Germany,

Belgium, Austria and Luxembourg. The Baloise Group employs a staff of

around 8,000. Bâloise-Holding registered shares are included in the Swiss

Market Index (SMI) and are traded under the symbol BALN.

our values

Create value
Value means nurturing and creating quality. We care for the value of rela-

tionships and the value to be found in change. We value ourselves and

others. We focus on the requirements of our customers, our shareholders

and our staff. We employ our time, money and human resources with great

care. Creating and adding value are our targets.

foster relations
We live in a networked world which links us to a lot of people. We care

about these relationships. We talk to others and we are prepared to listen.

We are honest, open and communicative. We are critical and able to accept

criticism. We create unambiguous mutual expectations. We stand by our

word. Together we are strong.

Bring about change
The world is changing fast. It is changing us. We change. The pressures of

a changing world are a call for action. We analyze. We decide. We intervene

and we implement. We deliver results. Changing in order to innovate and

to add value is our goal.

Baloise Group information
The Annual Report 2005 – Business Review is
published in German, English and French. The
German version is binding. The financial Report
2005 contains the audited 2005 annual financial
statements with detailed information. It is avail-
able in German and in English.

finding and ordering
The Annual Report 2005 – Business Review and
the financial Report 2005 are available on the
Internet at www.baloise.com/annualreport. They
can be ordered through the Internet or at Bâloise-
Holding, Corporate Communications, Aeschen-
graben 21, 4002 Basel.

information for shareholders and
financial analysts
You will find detailed information and data on
the Baloise stock, the IR agenda, dividends,
the latest presentations and contacts with Inves-
tor Relations on the Internet at www.baloise.
com/investors.
The information is available in German and
English.

Published by Baloise, Corporate Communications

Concept, design Primafila AG, Zurich/Munich

Text Baloise, Corporate Communications

Sigvard Wohlwend, Marie Zanetti-Abbet, Mohan Mani

Photographs Frederic Meyer

Production Boncept AG, Zurich

Printing Werner Druck AG, Basel

Bâloise-Holding

Aeschengraben 21

CH-4002 Basel