Baloise-Holding AG
Annual Report 2008

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Blue Capital Reinsurance Holdings Ltd.
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Co-Operators General Insurance Company
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Arthur J. Gallagher

Plain-text annual report

Deutsche Bank - Swiss Equities Conference Martin Strobel, Group CEO Zurich,13 May 2009 Making you safer. www.baloise.com The Baloise Group Strong Diversification of Business Volume and EBIT Belgium Life: #17 Nonlife: #11 Luxembourg Life: #5 Nonlife: #4 Liechtenstein Combined: #4 Switzerland Life: #3 Nonlife: #5 Croatia Life: #5 Nonlife: #5 Germany Deutscher Ring Life: #32 Nonlife: #69 Basler Germany Life: #61 Nonlife: #27 Austria Life: #23 Nonlife: #18 Business Volume Other1) 4% Benelux 17% Switzer- land 49% Germany 30% Serbia Life: n.m. Nonlife: n.m. EBIT Other 1) 27% Benelux 16% Switzer- land 41% Germany 16% Total Business Volume 2008: CHF 7'858 mn Total EBIT 2008: CHF 580 mn 1) Other countries (incl. Austria, Baloise Life (Liechtenstein), Croatia and Serbia) Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 2 The Journey so far Measurable success delivered Target Customer Management «Safety World» Business Volume (in CHF mn) 7,636 7,384 7,394 7,491 7,938 7,858 Combined Ratio (gross) RoE EPS (in CHF) + 1% CAGR - 1,000 bps + 600 bps + 35% CAGR 2003 2004 2005 2006 2007 2008 Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 3 9%17%15%10%7%3%88%93%90%101%93%98%71513742 Where are we going? Positioning and strategic directions Strategic Goal: To be one of Europe's most profitable and fastest growing insurers by 2012 Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 4 «Baloise 2012» Initiatives with additional sustainable profit potential identified Switzerland Belgium Germany Luxembourg Austria Croatia O p t i i m s e G r o w D e v e o p l  Group wide initiative portfolio established  Additional sustainable profit of CHF 200 mn until 2012  Management processes to ensure delivery established    Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 5 «Baloise 2012» Implementation has started Sample initiatives: Optimise:  Business process optimisation (e.g. GEPARD)  Optimisation of claims processes (e.g. closed file reviews)  Establishment of clear governance structures in Germany Grow: Develop:  Sales productivity  Pricing  Retention Management  New life solutions (e.g. VA)  Safety World  Further expansion with OVB Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 6 Financial Ambition Remains unchanged Financial ambition over the cycle  15% Return on Equity  Continuous increase of EPS  Combined ratio well below 100% Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 7 Highlights 2008 Resilient operating cash flows and strong balance sheet  Strong operational performance leads to profit of CHF 387 mn despite crisis on financial markets  0.7% growth in business volume (in CHF -1.0%), driven by nonlife growth of 2.8% (in CHF 0.8%) and growth in traditional life with gross premiums written up by 2.8% (in CHF 1.7%)  Resilient cash generation and excellent net combined ratio of 90.9% in nonlife  Solid growth in group life, launch of new VA-product in Switzerland  High recurring investment income assures the coverage of guarantees  Strong balance sheet with a high group solvency of 196%  Stable dividend of CHF 4.50 and continued share buy-backs resulting in 98% total payout ratio  Establishment of clear governance structures in Germany initiated Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 8 Business Volume Sound growth By country By line of business -59 -194 7,938 7,938 7,858 -165 7,858 2007 Switzerland Germany Benelux Other 1) 2008 2007 Nonlife Life Unit-linked 2008 in CHF mn Switzerland Germany Benelux Other 1) Total 2007 3,743 2,384 1,563 248 2008 3,867 2,325 1,369 +/- +/- LC 2) in CHF mn 3.3% -2.5% 3.3% 0.9% Nonlife Life -12.5% -9.4% Unit-linked 297 19.8% 22.8% Total 7,938 7,858 -1.0% 0.7% 1) Other countries (incl. Austria, Baloise Life (Liechtenstein), Croatia and Serbia) 2) Local currency (LC) 2007 3,191 3,678 1,069 7,938 2008 3,215 3,739 +/- +/- LC 2) 0.8% 1.7% 2.8% 2.8% 904 -15.4% -12.6% 7,858 -1.0% 0.7% Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 9 491242461 Nonlife: High operating Cash Flows Sustainable improvement of combined ratio 100% 105% 90% 97.5% 93.0% 0% 2004 100.6% 100.0% Combined Ratio (gross) Combined Ratio (net) 95.1% 93.0% 90.9% 88.1% 94.0% 90.2% 2005 1) 2006 2007 2) 2008 1) Incl. floods in Switzerland (Largest loss of Baloise Group since 1990) 2) Incl. windstorm "Kyrill" (Second largest loss of Baloise Group since 1990) Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 10 Life: Direct Yield and Guarantees Margin improved despite financial market crisis 2008 Direct yield 1) Average guaranteed rate of return Margin 1) relative to average technical reserves, excl. realisations Direct Yield: Switzerland 2,7% 0,2% 2,7% 0,2% 2,9% 0,5% 2,9% 0,6% Europe 2,5% 2,5% 2,4% 2,3% Margin Average guaranteed Rate of return CH EU Total 2.9% 2.3% 0.6% 4.4% 3.1% 1.3% 3.5% 2.6% 0.9% 4,0% 1,0% 3,9% 0,9% 4,1% 1,1% 3,0% 3,0% 3,0% 4,4% 1,3% 3,1% 2005 2006 2007 2008 2005 2006 2007 2008  High recurring investment income assures the coverage of guarantees Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 11 Asset Allocation Insurance Equity exposure reduced to 2.2% excluding banking assets and assets from investment-type premiums Shares & funds 6% (11%) Other short-term investments 2% (3%) Mortgage Loans 11% (10%) 2008 (2007) Alternative financial investments1) 3% (4%) Fixed-interest securities 48% (46%) Investment property 11% (10%) Policy & other loans 19% (16%) Equity & equity related investments In % total insurance assets Equities Hedging instruments Equities after hedging Private Equity Hedge Funds (equity related) Other 2) Equity & equity related investments 2008 4.5% -2.3% 2.2% 1.1% 0.8% 1.0% 5.1% 1) private equity & hedge funds 2) e.g. bond & property funds treated as equity under IFRS In CHF mn, % Equity & equity related investments (net) Total insurance assets 2007 13.1% 51,866 2008 5.1% 46,885 Deutsche Bank – Swiss Equities Conference www.baloise.com 13 May 2009 12 12 Bond Portfolio Diversified portfolio of good quality excluding banking assets and assets from investment-type premiums by issuer by quality by ordination Financials 53.6% AAA 64.2% subordinated 2.9% not rated 1.1%

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