ANNUAL REPORT
2020
Baloise Group
Unterkapitel Baloise Group
Annual Report 2020
Contents
BALOISE
Baloise key figures ................................................................. 4
At a glance .............................................................................. 5
Letter to shareholders ............................................................ 6
Baloise shares ........................................................................ 8
Core activities ...................................................................... 10
Strategy ................................................................................ 11
Brand .................................................................................... 13
REVIEW OF OPERATING PERFORMANCE
Overview, profit and business volume ................................. 16
Core insurance business ....................................................... 18
Asset management and banking .......................................... 20
Ecosystems & innovation ..................................................... 21
Outlook ................................................................................. 23
Consolidated income statement .......................................... 24
Consolidated balance sheet ................................................. 26
Business volume, premiums and combined ratio ............... 27
Technical income statement ................................................ 29
Gross premiums by sector .................................................... 30
Banking activities ................................................................. 31
Investment performance ...................................................... 32
SUSTAINABLE BUSINESS MANAGEMENT
Responsibility ....................................................................... 36
Responsible investment ....................................................... 62
Human resources ................................................................. 66
The environment .................................................................. 72
Risk management ................................................................. 77
Commitment to art ............................................................... 80
CORPORATE GOVERNANCE
Corporate Governance Report .............................................. 85
Appendix 1: Remuneration Report ..................................... 104
Appendix 2: Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 130
FINANCIAL REPORT
Consolidated balance sheet ............................................... 134
Consolidated income statement ........................................ 136
Consolidated statement of comprehensive income .......... 137
Consolidated cash flow statement ..................................... 138
Consolidated statement of changes in equity ................... 140
Notes to the consolidated annual financial statements .... 142
Notes to the consolidated balance sheet .......................... 218
Notes to the consolidated income statement .................... 259
Other disclosures ............................................................... 271
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 282
BÂLOISE HOLDING LTD
Income statement of Bâloise Holding Ltd .......................... 290
Balance sheet of Bâloise Holding Ltd ................................ 291
Notes to the financial statements of Bâloise Holding Ltd .. 292
Appropriation of distributable profit as proposed
by the Board of Directors ................................................... 302
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 303
GENERAL INFORMATION
Alternative Performance Measures .................................... 308
Glossary ............................................................................. 312
Addresses ........................................................................... 316
Information on the Baloise Group ...................................... 317
Financial calendar and contacts ........................................ 318
3
Baloise Group Annual Report 2020
Baloise
Baloise key figures
Baloise key figures
CHF million
Business volume
Gross non-life premiums written
Gross life premiums written
Sub-total of IFRS gross premiums written 1
Investment-type premiums
Total business volume
Operating profit (loss)
Profit / loss for the period before borrowing costs and taxes
Non-life
Life 2
Asset Management & Banking
Other activities
Consolidated profit for the period
Balance sheet
Technical provisions
Equity
Ratios (per cent)
Return on equity (RoE)
Gross non-life combined ratio
Net non-life combined ratio
New business margin (life)
Investment performance (insurance) 3
New life insurance business
Annual premium equivalent (APE)
Value of new business
Key figures on the Company’s shares
Shares issued (units)
Basic earnings per share 4 (CHF)
Diluted earnings per share 4 (CHF)
Equity per share 4 (CHF)
Closing price (CHF)
Market capitalisation (CHF million)
Dividend per share 5 (CHF)
2019
2020
Change (%)
3,542.1
4,060.3
7,602.4
1,907.5
9,509.9
398.9
274.8
91.1
– 41.0
689.5
3,802.5
3,291.3
7,093.8
1,832.7
8,926.5
302.2
282.2
79.4
– 61.0
428.3
48,333.3
48,585.0
6,715.6
6,985.7
11.1
88.3
90.4
37.3
4.7
413.5
154.0
6.4
91.7
91.2
42.7
3.0
294.5
125.9
48,800,000
48,800,000
15.02
14.99
145.3
175.00
8,540.0
6.40
9.65
9.63
155.1
157.50
7,686.0
6.40
7.3
– 18.9
– 6.7
– 3.9
– 6.1
– 24.2
2.7
– 12.8
48.8
– 37.9
0.5
4.0
–
–
–
–
–
– 28.8
– 18.2
0.0
– 35.8
– 35.8
6.7
– 10.0
– 10.0
0.0
1 Premiums written and policy fees (gross).
2 Of which deferred gains / losses from other operating segments (31 December 2019: CHF –1.8 million; 31 December 2020: CHF –3.2 million).
3 Excluding investments for the account and at the risk of life insurance policyholders.
4 Calculation is based on the profit for the period attributable to shareholders and the equity attributable to shareholders.
5 2020 based on the proposal submitted to the Annual General Meeting.
4
Baloise Group Annual Report 2020
Baloise
At a glance
At a glance
Profit (attributable
to the shareholders) of
CHF 434.3 million
Net combined ratio of
91.2 %
86 %
of employees
recommend Baloise
as an employer
Dividend of
CHF 6.40 per share
(to be proposed to the
Annual General Meeting
on 30 April 2021)
Equity of
CHF 6,985.7
million
– 3.9 %
decline in volume of
business with
investment-type
premiums
Return on equity
(RoE) of
6.4 %
New business margin
in the life business of
42.7 %
Net investment yield on
insurance assets of
2.1 %
– 18.1 %
CO2 reduction
+225,000
additional customers
Inclusion in the
FTSE4Good
Index Series
5
Baloise Group Annual Report 2020
Baloise
Letter to shareholders
Letter to shareholders
Dr Andreas Burckhardt, Chairman of the Board of Directors (right), and Gert De Winter, Group CEO (left), with a view from the 7th floor of the
Group headquarters at Baloise Park.
DEAR SHAREHOLDERS,
Baloise achieved good results in 2020, reporting a profit attri-
butable to shareholders of CHF 434.3 million. It was especially
encouraging in light of the fact that the prior year’s result was
boosted by just under CHF 150 million due to one-off tax-related
positive effects. The outbreak of the Covid-19 pandemic in the
first quarter and the measures subsequently introduced through-
out Europe to contain the virus were extremely challenging for
us as an insurer in 2020. However, even during this period Baloise
proved itself to be a strong and reliable partner, particularly for
our customers, our shareholders and our employees. Despite
the difficult situation, we met our obligations towards these
stakeholder groups quickly and accommodatingly. We paid out
around CHF 178 million to our policyholders for Covid-related
costs incurred in 2020.
The majority of the expenses arose as a result of business
closures ordered by the authorities, particularly in the hospi-
tality sector. Baloise thereby played a role in supporting the
economy and the affected businesses. The Covid-19 pandemic
is the largest gross loss event to hit the Baloise Group since
6
1980. The gross combined ratio increased by 3.4 percentage
points to 91.7 per cent as a result.
Despite the circumstances, Baloise is proving to be stable
and resilient. We have been operating cautiously and with a
focus on the long term for many years. Thanks to the hedging
of our risks, the net combined ratio, i.e. the ratio after reinsurance
payments received, rose only slightly from the prior year to
91.2 per cent. In total, the net cost of Covid-related claims
amounted to around CHF 72 million.
The volume of life business fell slightly, but the profit
contribution remained stable. The decline in business volume
was expected, partly because in the prior year we had benefited
from a competitor leaving the comprehensive insurance market
and partly because of the continuing intentionally cautious
approach to the volume of traditional life insurance business
taken on. Earnings in the life business amounted to CHF 282.2
million. The massive falls in share prices in the equity markets
in March were counteracted by positive effects in technical
reserves. This meant that the year ended with a slight increase
compared to 2019.
Baloise Group Annual Report 2020
Baloise
Letter to shareholders
Baloise also invested in the Berlin start-up ‘Ben Fleet Services’
(Ben), an online platform for vehicle fleet management services.
‘Ben’ was founded last year by ‘Energie Baden-Württemberg’
(EnBW) and ‘Bridgemaker’, a service provider that specialises
in business start-ups. Within the Home ecosystem, the company
invested in ‘Houzy’, a Swiss platform that offers digital solutions
for home owners. Property owners can use the platform to obtain
valuations, plan and calculate the cost of renovations or opti-
mise energy efficiency in a property. The platform opens up
an additional service area within the Home ecosystem. The equity
investment in ‘Houzy’ was the fourth alliance within the Home
ecosystem last year, following on from Keypoint, Batmaid and
ImmoPass. Keypoint is a digital assistant that makes the work
of property management companies in Belgium easier. ImmoPass
is also based in Belgium and provides services in the area
of technical property inspection that can be used both by
property management companies and potential buyers. Batmaid
digitalises the provision of cleaning services for private
individuals in Switzerland and takes the hassle out of finding
domestic cleaners.
‘Simply Safe: Season 2’ marks the start of Baloise’s new
strategic phase and underlines the sustainability of its strategic
ambitions. The course that it has been pursuing since 2016 will
be continued in a focused way with more ambitious targets.
We are confident of our long-term strategy. This also includes
our sustainable dividend policy – despite the current difficult
circumstances. The Board of Directors is proposing an unchanged
dividend of CHF 6.40 to this year’s Annual General Meeting.
Basel, March 2021
Dr Andreas Burckhardt
Gert De Winter
Chairman of the Board of Directors
Group CEO
2021 will be the final year of our ‘Simply Safe’ strategic phase.
Since 2017, Baloise has managed to sign up 738,000 additional
customers and transfer CHF 1,744 million in cash to the holding
company, and we have already achieved our target of being in
the top 10 per cent of most attractive employers in the European
financial sector. We are on track to achieve our goals by the end
of the year, despite the difficult environment. It is still impossible
to predict how quickly the European economy will recover in
2021. However, we believe that Baloise is sufficiently robust to
overcome these challenges and enjoy lasting success.
NEXT STRATEGIC FOUR-YEAR PHASE TO 2025
On Investor Day last autumn, the Company outlined its plans
for the next four-year phase of the strategy up to 2025, which
will be called ‘Simply Safe: Season 2’. The current strategic
direction will continue and be pursued even more vigorously.
The three strategic targets are retained, but are now even more
ambitious. We want to be among the top 5 per cent of employers
in Europe in 2025, to attract 1.5 million new customers in four
years and to increase cash generation by 25 per cent compared
to the first strategic phase.
Baloise will approach this next strategic phase under a new
strategic leadership. Dr Thomas von Planta, a member of the
Board of Directors since 2017, will be nominated as the new
Chairman of the Board of Directors at the Annual General
Meeting on 30 April, replacing Dr Andreas Burckhardt who is
retiring. Together with the Board of Directors and the Corporate
Executive Committee, Dr Planta will continue to lead Baloise on
its current path of success and drive forward the launch of the
next strategic phase.
The strategic phase starting in 2022 will also have the
additional goal of expanding the Mobility and Home ecosystems.
The aim in future is to generate income not only from the core
insurance business, but also from insurance-related services
that will be bundled into so-called ecosystems. Another impor-
tant pillar alongside the core insurance business and the eco-
systems is the expansion of services for third parties in the
investment business. As well as strengthening its core business,
Baloise expanded its ecosystems in 2020. Within the mobility
ecosystem, the ‘aboDeinauto’ service was launched in Germany
in autumn. This is the first car subscription service to focus
specifically on used vehicles and enables subscribers to use
their chosen car simply and flexibly for a fixed monthly fee.
7
Baloise Group Annual Report 2020
Baloise
Baloise shares
A turbulent trading year
Trading in 2020 was dominated by the Covid-19 pandemic and the dramatic slump in global economic
growth that followed. Having reached new all-time highs in January 2020, equity markets lost around 30 per
cent of their value at record speed in February, due to the uncertainty surrounding the Covid-19 pandemic.
They reached their lowest point at the end of March then rallied in the second quarter of 2020, thanks in no
small part to the massive fiscal and monetary policy measures taken by governments and central banks.
Encouraging news about vaccines gave the equity markets a further boost in November 2020. Baloise shares*
did not escape the effects of the pandemic unscathed, falling to a low of CHF 107.90 on 23 March. But
they too recovered and closed on 30 December 2020 at CHF 157.50. Overall, Baloise shares fell by 10 per cent
in 2020. Despite the turbulent environment, Baloise’s dividend payments to its shareholders remain
consistent and attractive. The Board of Directors is proposing a dividend for 2020 of CHF 6.40.
will continue to rise in many places, as these indicators tend to
lag behind economic activity. Despite the many growth-promot-
ing measures put in place by central banks and governments,
the severe underutilisation of global production capacity and
high unemployment means inflation rates are unlikely to rise
significantly in the coming months.
While prior years have also been shaped by expansionary
monetary policy, in 2020 the extraordinary monetary policy
measures taken to combat the Covid-19 crisis have led to expan-
sion of the central banks’ balance sheets on an unprecedented
scale. In total, the four biggest central banks (US Fed, ECB, Bank
of England, Bank of Japan) purchased more than USD 7 trillion
worth of securities in 2020. This has, for now, prevented a health
crisis from turning into a liquidity or financial crisis.
Baloise shares lost value in 2020.This was partly due to
the slump in the first quarter of 2020 and partly to the fact
that they failed to fully recover in the following months.
As at the end of the year, Baloise shares were trading at
CHF 157.50 – 10.0 per cent below the closing price of the prior
year. However, Baloise shares still outperformed the European
(STOXX Europe 600 Insurance Index, SXIP) and Swiss (Swiss
Exchange Supersector Insurance, SMINNX) insurance industry
index, which fell by 13.4 and 13.1 per cent (in Swiss franc terms)
respectively, in 2020. The Swiss Performance Index (SPI)
managed to recover from the effects of the Covid-19 pandemic
and in fact ended the year up by 3.82 per cent.
Compared with 2019, which was an excellent trading year, 2020
was very turbulent. The uncertainty surrounding the Covid-19
pandemic and its impact on the global economy were the main
reasons for the 30 per cent fall in the equity markets in the first
quarter of 2020. The US stock market volatility index (VIX) shot
up more than 80 points, hitting levels not seen since the finan-
cial crisis of 2007 / 2008. After bottoming out at the end of
March 2020, many of the world’s stock markets rallied from the
second quarter onwards. This was primarily driven by the
interventions of the central banks and governments which shored
up the economy with their expansionary policies. In addition to
the uncertainty surrounding the Covid-19 pandemic, the presi-
dential election in the USA and Brexit also caused a temporary
increase in volatility. The stock markets were boosted by
promising news on the approval of a coronavirus vaccine from
November 2020 onwards, with several indices even managing
to post a positive performance for 2020 as a whole.
While the equity markets experienced extreme volatility in
2020, global macroeconomic data weakened, reflecting a sharp
decline in economic growth. This was primarily due to the
containment measures imposed by many governments which
paralysed economic activity for a time in some areas, particularly
hospitality and tourism. The first lockdown in the second
quarter of 2020 caused a particularly sharp contraction in the
global economy, while in summer the effects of the pent-up
demand became very apparent as the lockdown restrictions
were eased. Towards the end of the fourth quarter, however,
further (partial) lockdowns of major economies due to rising
coronavirus infection rates weakened the global economy again.
Consumer and investment demand is likely to be slow in return-
ing to normal in the coming months. It is also likely that employ-
ment figures and the number of companies going out of business
8
Baloise Group Annual Report 2020
Baloise
Baloise shares
DIVIDENDS PAID TO SHAREHOLDERS
The Board of Directors of Bâloise Holding Ltd will propose to the
Annual General Meeting on 30 April 2021 that a cash dividend
of CHF 6.40 per share be paid for the 2020 financial year. This
is the same as the prior year and represents an attractive
dividend yield of 4.1 per cent of the year-end share price.
As announced at the end of 2016, Baloise has bought back
3,000,000 treasury shares over the period from April 2017 to
March 2020. The shares were bought back for the purpose of
capital reduction, using a second trading line on the Swiss stock
exchange, SIX Swiss Exchange AG. As a result of this programme,
CHF 481.2 million was returned to shareholders. Of this volume,
565,925 shares worth CHF 92.8 million in total were bought
back in 2020.
* Baloise shares = shares of Bâloise Holding Ltd.
STATISTICS ON BALOISE SHARES
Price at year-end (CHF)
High (CHF)
Low (CHF)
Market capitalisation (CHF million)
Basic earnings per share (CHF)
Diluted earnings per share (CHF)
Price / earnings (p / e) ratio 1
Price / book (p / b) ratio 1
Number of shares issued (units)
Year (CHF million)
2016
2017
2018
2019
2020
Total
Cash dividends
Share buy-backs
Total
260.0
273.3
292.8
312.3
312.3 1
1,450.7
54.8
63.3
135.1
190.0
92.8
536.0
314.8
336.6
427.9
502.3
405.1
1,986.7
All figures stated as at 31 December.
1 Proposal to the Annual General Meeting on 30 April 2021.
SHAREHOLDER STRUCTURE
The shares in Bâloise Holding Ltd are widely held and their
free float remains unchanged at 100 per cent. There were no
material changes in the Company’s shareholder base in 2020.
Further information on Baloise’s significant shareholders as
at 31 December 2020 can be found in table 15 on page 300.
31.12.2016
31.12.2017
31.12.2018
31.12.2019
31.12.2020
128.30
131.00
103.20
151.70
159.40
121.35
135.40
159.40
131.60
175.00
186.60
135.80
6,415.0
7,403.0
6,607.5
8,540.0
11.53
11.22
11.13
1.04
11.50
11.48
13.19
1.14
11.14
11.12
12.15
1.07
15.02
14.99
11.65
1.20
157.50
182.10
107.90
7,686.0
9.65
9.63
16.32
1.10
50,000,000
48,800,000
48,800,000
48,800,000
48,800,000
Minus the number of treasury shares (units)
2,499,945
1,327,993
2,218,134
3,238,607
3,750,453
Number of shares in circulation (units)
Average number of shares outstanding 2
Dividend per share 3 (CHF)
Dividend payout ratio 3
Dividend yield 3
47,500,055
47,472,007
46,581,866
45,561,393
45,049,547
46,381,359
47,641,577
46,979,421
46,219,774
45,031,594
5.20
45.1
4.1
5.60
48.7
3.7
6.00
53.9
4.4
6.40
42.6
3.7
6.40
66.3
4.1
1 Calculation is based on the profit for the period attributable to shareholders and the equity attributable to shareholders.
2 Relevant for calculation of earnings per share (see page 267 of the Financial Report).
3 2020 based on the proposal submitted to the Annual General Meeting.
BALOISE SHARES
Security symbol
Nominal value
Security number
ISIN
Exchange
Security type
INDEXED SHARE PRICE PERFORMANCE 1 BÂLOISE HOLDING
REGISTERED SHARES 2015 – 2020
BALN
CHF 0.10
1.241.051
CH0012410517
SIX Swiss Exchange
150
100
50
2015
2016
2017
2018
2019
2020
100 % registered shares
1 31 December 2014 = 100
Bâloise Holding registered shares (BALN)
SWX SP Insurance Price Index (SMINNX)
Swiss Performance Index (SPI)
9
Baloise Group Annual Report 2020
Baloise
Core activities
Our core activities
BELGIUM
Hamburg
Business volume (CHF million)
Life: 190.3
Non-life: 1,487.4
Investment-type premiums: 511.0
Employees: 1,715
Net combined ratio: 90.9 %
LUXEMBOURG
Antwerp
Brussels
Business volume (CHF million)
Life: 72.5
Non-life: 138.6
Investment-type premiums: 1,025.0
Employees: 558
Net combined ratio: 89.3 %
SWITZERLAND
Bad Homburg
Luxembourg
Business volume (CHF million)
Life: 2,648.2
Non-life: 1,368.4
Investment-type premiums: 114.2
Employees Swiss offices: 3,850 (including Baloise Bank SoBa and
Baloise Asset Management)
Net combined ratio: 88.5 %
Basel
Solothurn
Customer assets under management generated by sales force: CHF 2,433.0 million
GERMANY
Lending-business assets generated by sales force: CHF 1,280.1 million
Wealth & pensions advisory mandates: 3,212
Return on equity: 6.5 %
Employees: 386
Total assets under management: CHF 66.2 billion
Third-party assets under management: CHF 11,758.8 million
Net new third-party assets: CHF 1,244.4 million
Employees: 159
Cost / income ratio: 54.2 %
10
Business volume (CHF million)
Life: 380.2
Non-life: 776.4
Investment-type premiums: 182.5
Employees: 1,570
Net combined ratio: 94.9 %
Life
Investment-type premiums
Non-life
Baloise Group Annual Report 2020
Baloise
Strategy
New targets for the Simply Safe strategy
In 2016, Baloise launched its new strategy and targets for the period up to 2021 in the form of its Simply
Safe strategy (‘Simply Safe: Season 1’). The insurance sector is changing, and the aim of the strategy was
to allow Baloise to evolve into an innovative provider of solutions, expanding its core business and extending
beyond traditional insurance. Customer focus is at the heart of this strategy, but it’s not just about provid-
ing cover and insuring risks: Baloise is also seeking to address the wider needs of customers in a changing
society. In the next phase, Baloise aims to go even further and become an important part of people’s lives.
This ambition is based on a value-creation model that has been integrated into the next strategic phase.
With a clear focus and with three simple yet ambitious objectives in the area of employees, customers
and shareholders, Baloise is continuing its strategic journey towards future growth.
CUSTOMERS
Baloise aims to have one million new customers by 2021 – a
30 per cent increase on the 2016 figure. Baloise is becoming
the first choice for people who want to feel ‘simply safe’. An even
stronger focus on customer needs, tailored omnichannel com-
munication and innovative products and services in the areas
of insurance, assistance and pensions will help us to achieve
this growth.
SHAREHOLDERS
Baloise aims to transfer CHF 2 billion in cash to the holding
company by 2021. This will be made possible by sustained
improvements in profitability in the life insurance and banking
business coupled with innovative products in the core business
and services outside the traditional insurance business. Share-
holders benefit directly through the rigorous adherence to an
attractive and sustainable dividend policy and the repurchase
of up to three million treasury shares, which was completed in
2020, and indirectly from capital investment in new strategic
projects that will generate additional profits in existing and
new areas of business.
The Company unveiled the next phase of its strategy – ‘Simply
Safe: Season 2’ – at its Investor Day in autumn 2020. This phase
will last from 2022 to 2025 and will see Baloise building on the
goals and successes of the current strategic phase and contin-
uing to focus on its core stakeholders (customers, employees
and shareholders). At the same time, the Company is committed
to the value creation model (see page 36) that underpins its
sustainability strategy and which will be an integral part of its
future strategy. Baloise is thus expanding its stakeholder per-
spective and formulating ambitions for partners, society and
the environment, too.
▸
Chapter ‘Sustainable business management /
Responsibility’
‘SIMPLY SAFE: SEASON 1’ IS ON THE HOME STRAIGHT
The ‘Simply Safe: Season 1’ phase, launched in 2016 and begun
in 2017, focuses on three core stakeholder groups (employees,
customers and investors) and has so far achieved the hoped-for
results. The targets are ambitious, but the Company is on track
to achieve them.
EMPLOYEES
By 2021, Baloise aims to be an industry leader in terms of
employer attractiveness and be among the top 10 per cent of
employers in the European finance industry. We firmly believe
that employees are the key to implementing our corporate
strategy. Performance will be measured by a key performance
indicator that shows how frequently Baloise is recommended
as a good place to work by its employees.
11
Baloise Group Annual Report 2020
Baloise
Strategy
2020: + 225,000
Ambition by 2021: + 1,000,000
2020: top 8 %
Ambition by 2021: top 10 %
2020: CHF 424 mn
Ambition by 2021: CHF 2 bn
12
relating to cash and capital. In the non-life business, Baloise is
aiming for a combined ratio of around 90 per cent (previously:
90 to 95 per cent) to further improve profitability. In the life
business, the target is EBIT in excess of CHF 200 million annually
and a further substantial contribution to cash flows. For cash
and capital, Baloise intends to distribute 60 to 80 per cent of
cash as dividends and invest 10 to 30 per cent in innovation and
capital management.
The objective of ‘Reimagine’ and the related aim of ‘improv-
ing the customer experience’ is to make collaboration even
easier for the Company’s customers and partners. Baloise is
looking to provide a simpler and more enjoyable experience for
customers by systematically harnessing their feedback and doing
more to understand their needs. Cutting-edge data analysis and
further significant investment in digital technologies will help
it to do this. It also aims to establish the 1.5 million new cus-
tomers it will have attracted by 2025 as loyal, long-term and
profitable sources of revenue by engaging in cross-selling and
up-selling activities. Third-party business in the asset manage-
ment segment is to be increased by a minimum of CHF 10 billion
in net new assets.
‘Diversify’: Diversification of the business will be key to
long-term competitive success in the insurance market. Baloise
has therefore set itself the ambition of further unlocking the
substantial growth potential of its digital insurer FRIDAY and
generating revenue of around CHF 160 million by 2025. The Home
and Mobility ecosystems will be significantly expanded with
revenue in excess of CHF 200 million targeted for 2025. The
Company aims to reach a total value creation figure of approx-
imately CHF 1 billion for all Baloise innovations by 2025, making
this a third key pillar alongside the insurance and asset man-
agement & banking businesses.
‘Transform’ encompasses Baloise’s unique corporate culture
that has been both a resource and a driver for the ambitious
strategic realignment that began with the launch of Simply Safe.
In addition to the ambition of using agile working methods to
be a consistently innovative and effective business, Baloise
also aims to be an employer that fulfils the needs of its
employees and provides opportunities for continuous personal
and professional development.
With the new ‘Simply Safe: Season 2’ phase, Baloise intends
to become a technology-driven financial services provider and
leading provider of ecosystems that – in a rapidly changing
world – fulfils the needs of its customers in the best possible
way. Baloise wants be more than an insurance company – it
aims to be an important part of people’s lives.
‘SIMPLY SAFE: SEASON 2’ LAUNCHES IN 2022‘Simply Safe: Season 2’ marks the start of Baloise’s next stra-tegic phase and sets out the ambitions and targets of the Company for the period from 2022 to 2025. By 2025, Baloise aims to: ▸break into the top 5 per cent of companies to work for in Europe ▸attract 1.5 million new customers ▸ generate CHF 2 billion in cash The targets for ‘Simply Safe: Season 2’ are more ambitious than those of Season 1, particularly since this phase is one year shorter. Based on the insights gained from Season 1, the following four strategy areas have been defined: ▸Focus: focusing on the core insurance business ▸Reimagine: improving the customer experience ▸Diversify: moving into new business areas ▸Transform: harnessing the corporate culture and agility as key drivers of the transformation The ‘Focus’ strategy area encompasses all life and non-life initiatives in the core insurance business, as well as matters CUSTOMERSAmbition: 1 million additional customersPROGRESS MADE 2020 738,000: sum since the start of the Simply Safe strategy 1,743,000: sum since the start of the Simply Safe strategyEMPLOYEESAmbition: leading employer amongst European financialsSHAREHOLDERSAmbition: CHF 2 billion cash remittance to the holding Baloise Group Annual Report 2020
Baloise
Brand
The Baloise brand as a strategic asset
The Baloise brand is more than just marketing. It creates a link between customers and Baloise and its
services by communicating the brand promise and strengthening trust in the Company’s services.
The brand builds trust, which enables Baloise to stand out in the market and communicate its strategy
accordingly. Baloise wants to add to the trust it has already established and systematically develop
the brand as a strategic asset.
The Baloise brand has been continuously refined over many years
and today stands for safety, simplicity and partnership. Safety
is the core: it forms the basis of everything we do – of every
service and every product. Simplicity expresses our aim to
deliver an exceptional customer experience with straightforward
solutions, streamlined processes and clear communication. Our
focus on partnership is one of our greatest emotional strengths
and is predicated on value creation and mutual respect. We
nurture and deepen our relationships with all our stakeholders.
THE BRAND MAKES STRATEGY VISIBLE
In the next strategic phase, the aim is to use the brand more
consistently as a strategic asset. It will make the strategy more
visible and more tangible, internally and externally. Brand
ambitions will be defined to emphasis the strategic importance
of the Baloise brand. The ambitions will serve as a beacon for
the development of the brand and the contribution to the next
strategic phase ‘Simply Safe: Season 2’ from 2022 onwards.
They will also guide the proactive and sustainable management
of our reputation. The brand ambition will consist of internal and
external perspectives. The internal perspective aims to support
the implementation of the next strategic phase while the exter-
nal perspective exerts a kind of multiplier effect on the work of
Baloise. It is intended to influence the way that external stake-
holders perceive Baloise.
Brand promise
(what)
Brand personality
(how)
Brand essence
Brand benefit
Safety
Simplicity
Partnership
Feeling safe
made simple.
e
l
b
a
i
l
e
r
y
s
a
e
g
n
i
r
a
c
Appearance
Communication
Behaviour
Products / Services
Peace of mind
A feeling of relief,
reassurance and
security.
13
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable business management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
Review of operating
performance
OVERVIEW, PROFIT AND BUSINESS VOLUME ................ 16
CORE INSURANCE BUSINESS ........................................ 18
ASSET MANAGEMENT AND BANKING .......................... 20
ECOSYSTEMS & INNOVATION ....................................... 21
OUTLOOK ................................................................... 23
FINANCIAL INFORMATION ........................................... 24
Consolidated income statement ........................................ 24
Consolidated balance sheet .............................................. 26
Business volume, premiums and combined ratio .............. 27
Technical income statement .............................................. 29
Gross premiums by sector ................................................. 30
Banking activities ............................................................. 31
Investment performance ................................................... 32
Unterkapitel Baloise Group Annual Report 2020
Review of operating performance
Baloise successfully enters the home straight of
simply safe in 2020
As the 2020 financial year drew to a close, Baloise successfully entered the home straight of its Simply
Safe strategic phase. The Company is on track to achieve its ambitions for the 2017 to 2021 period
in spite of the challenging conditions that have arisen from the Covid-19 pandemic. The results for 2020
demonstrate that Baloise is resilient in times of crisis – thanks to its far-sighted strategy with a strong
focus on long-term success – and that the Company is meeting the demands made of it by its stakeholders.
From this solid position, Baloise is looking ahead with confidence to ‘Simply Safe: Season 2’, the next
strategic phase that will cover the period 2022 to 2025. The Company’s objectives and ambitions for this
phase were presented in detail at the Investor Day on 29 October 2020.
OVERVIEW, PROFIT AND BUSINESS VOLUME
Status of target achievement
The macroeconomic impact of the Covid-19 pandemic and
particularly the measures adopted to contain the spread of the
virus significantly affected many sectors of the economy. The
insurance industry permeates all areas of the economy and has
therefore been especially hard hit, primarily due to payouts on
claims for financial losses. Against the backdrop of this global
crisis, Baloise can nevertheless look back on a successful 2020.
The Company has helped thousands of customers in difficult
circumstances and has mitigated risks. In addition to granting
payouts for loss or damage, it also offered assistance in the
form of deferrals of invoice payments and, in some cases, even
rent waivers. The full range of services was provided to custom-
ers without restriction throughout the entire year, with rigorous
hygiene protocols being observed. As a result, the Company
was able to maintain high profit levels and generate growth in
relevant target segments, both organically and through acqui-
sitions. Baloise has thus proven its resilience in a crisis and
demonstrated that its business model with a focus on long-term
success, its strong corporate culture and its investment in
digitalisation in recent years have paid off, particularly during
this time of global challenges.
Baloise considers itself within touching distance of achieving
the three strategic goals for the phase from 2017 to 2021.
The goal of becoming one of the top 10 per cent of employ-
ers in the financial sector in Europe was already achieved in
the second half of 2020. Baloise thus managed to improve its
performance in the benchmark index by more than 20 percentage
points within just four rather than five years and now ranks
among the top 8 per cent of its peer group.
The Company also wants to attract one million additional
customers by the end of 2021. In 2020, around 225,000 new
customers were gained, bringing the total number of new
customers since 2017 to around 738,000. This figure does not
include around 500,000 customers that were added as a result
of acquisitions in Belgium in 2019.
The generation of cash is also progressing according to
schedule and came to around CHF 424 million in 2020. Since
2017, a total of CHF 1,743 million of the targeted CHF 2 billion
has been generated.
Baloise is therefore well on track to achieve its ‘Simply Safe’
targets by 2021. Based on the successes achieved in previous
years, it can now also tackle the next strategic phase ‘Simply
Safe: Season 2’ from a position of strength. This phase will start
in 2022 and was presented at the Investor Day.
Profit
Profit attributable to shareholders for 2020 amounted to
CHF 434.3 million and was therefore 37.4 per cent lower than in
the previous year (2019: CHF 694.2 million). The figure for 2019
had been boosted in part by a non-recurring tax effect of around
CHF 149 million that was not repeated in 2020. Other factors
that contributed to this decline in profit alongside the tax effect
were expenses in connection with the Covid-19 pandemic and
a fall in net financial income, as previously communicated in
the 2020 half-year financial statements. Gains on investments
came to CHF 1,270.5 million and thus fell short of the prior-year
figure by 6.3 per cent (2019: CHF 1,355.7 million). This was
attribut able to disruptions in the capital markets caused by the
Covid-19 pandemic and the resulting impairment losses on
securities and to the persistent environment of low interest rates.
16
Baloise Group Annual Report 2020
Review of operating performance
The gross expenses incurred for 2020 in connection with
Covid-19, including the necessary reserves, amounted to around
CHF 178 million. Net expenses incurred for 2020 in connection
with Covid-19 after reinsurance came to around CHF 72 million.
Payouts to cafés, bars and restaurants in Switzerland that were
forced to close temporarily as a result of government-imposed
measures to combat the spread of coronavirus accounted for
the bulk of the volume. Baloise is thus helping thousands of
business customers during this period of crisis. The majority of
the net expenses were posted in the first half of 2020.
Earnings before interest and tax (EBIT) came to CHF 602.9 mil-
lion, which represents a year-on-year decline of 16.7 per cent
(2019: CHF 723.9 million). This fall was caused to a significant
extent by lower gains on investments.
Business volume and combined ratio
The growth in the volume of business was encouraging. In 2019,
the withdrawal of a competitor from business involving com-
prehensive insurance solutions resulted in a positive non-re-
curring effect of around CHF 569 million. Against this backdrop,
the business volume for 2020 was down by 6.1 per cent year on
year at CHF 8,926.5 million (2019: CHF 9,509.9 million). In local
currency terms, the decrease was 4.2 per cent. The selective
underwriting policy in the life business further contributed to
the reduction in business volume. In its target segments,
especially in the attractive non-life business, Baloise generated
both organic growth and growth through acquisitions.
BUSINESS VOLUME
CHF million
Total business volume
Life
Non-life
Investment-type
premiums
2019
2020
+/– %
9,509.9
4,060.3
3,542.1
1,907.5
8,926.5
3,291.3
3,802.5
1,832.7
– 6.1
– 18.9
7.3
– 3.9
In the non-life business, Baloise was able to maintain profita-
bility almost on a par with the record level achieved in 2019.
The net combined ratio – including net claims incurred in con-
nection with Covid-19 – was 91.2 per cent and thus at the lower
end of the communicated target range of 90–95 per cent (2019:
90.4 per cent). All core markets contributed to this excellent
result. The achievement of such a solid performance in a year
that was severely impacted by Covid-19 demonstrates that the
portfolio is of outstanding quality and that reinsurance cover
was taken out prudently.
BUSINESS VOLUME IN 2020 (GROSS)
BY STRATEGIC BUSINESS UNIT
As a percentage
Switzerland
Germany
Belgium
Luxembourg
46.3
15.0
24.5
13.8
Equity, dividend and capitalisation: confirmation of
a dividend of CHF 6.40 requested
Consolidated equity went up by 4.0 per cent year on year to reach
CHF 6,985.7 million at the end of 2020 (31 December 2019:
CHF 6,715.6 million). In June 2020, Standard & Poor’s (S&P)
confirmed its rating of A+ for Baloise. The outlook for the German
business unit Basler Sachversicherungs-AG was upgraded from
‘stable’ to ‘positive’ by S&P in light of its improved profitability.
In the Swiss Solvency Test (SST)*, a ratio of over 180 per cent is
expected as of 1 January 2021. Baloise was thus able to reaffirm
its strong capitalisation in spite of challenging conditions.
The repurchase programme for more than three million
shares that was initiated in April 2017 reached completion in
March 2020. As a result of this programme, CHF 481.2 million
was returned to shareholders. Of this volume, 565,925 shares
worth CHF 92.8 million in total were bought back in 2020.
In light of the solid results, the Board of Directors of Bâloise
Holding Ltd intends to propose to the Annual General Meeting
on 30 April 2021 that the dividend be maintained at the same
attractive level as in 2019, at CHF 6.40 per share.
* The SST ratio will be published at the end of April 2021.
17
Baloise Group Annual Report 2020
Review of operating performance
DEVELOPMENT OF NET COMBINED RATIO
As a percentage
2020
2019
2018
2017
2016
91.2
90.4
91.7
92.3
92.2
CORE INSURANCE BUSINESS
Non-life division: healthy growth and a good combined ratio
The premium volume in the non-life business increased by
7.3 per cent to CHF 3,802.5 million (2019: CHF 3,542.1) thanks
to the inclusion of Fidea NV and the non-life portfolio of Athora
in Belgium for the first full year following their acquisition and
to encouraging organic growth in all core markets. In local
currency terms, the rate of growth came to an even more impres-
sive 10.1 per cent. After adjustment for the acquisitions in
Belgium, the growth rate in local currency was still a very good
4.3 per cent. The premium volume in Switzerland amounted to
CHF 1,368.4 million, up by a solid 1.8 per cent compared with
the previous year (2019: CHF 1,344.2 million). Translated into
Swiss francs, the volume of premiums in Germany fell by
1.7 per cent to CHF 776.4 million (2019: CHF 790.0 million). But
in local currency terms, the volume saw a healthy increase of
2.1 per cent. Belgium and Luxembourg recorded strong growth
in the volume of premiums, both in Swiss francs and in the local
currency. The Belgian business benefited significantly from
the two acquisitions. The volume of premiums there jumped by
18.9 per cent to CHF 1,487.4 million (2019: CHF 1,251.1 million),
which equated to growth of 23.6 per cent in local-currency terms
(7.5 per cent excluding the acquisitions). This shows that the
Belgian business is diversifying the portfolio at Group level and
helping to create stability. Luxembourg also delivered healthy
growth of 1.4 per cent to reach CHF 138.6 million (2019:
CHF 136.7 million). This equated to growth of 5.3 per cent in
local currency terms.
EBIT in the non-life business fell by 24.2 per cent year on
year to CHF 302.2 million (2019: CHF 398.9 million), which was
mainly attributable to lower gains on investments. Nevertheless,
profitability in the non-life business remained very strong, which
highlights the high quality of Baloise’s non-life portfolio. The
net combined ratio was maintained at a very good level of 91.2
per cent (2019: 90.4 per cent). This was mainly due to the fact
that the majority of Covid-19-related expenses were covered by
reinsurance and that the general level of claims and the number
of large claims and natural disasters was otherwise low in 2020.
All business units contributed to this very strong result.
Life business: normalisation in premium volume and a solid
profit contribution
The volume of business in the life insurance business fell by
14.1 per cent year on year to CHF 5,124.0 million (2019:
CHF 5,967.7 million). In local currency terms, the decrease was
12.7 per cent. This was mainly attributable to a selective under-
writing policy for occupational pension products and a non-re-
curring positive effect in this segment of the Swiss market the
previous year. A competitor in the group life business withdrew
PROPRIETARY INVESTMENTS BY CATEGORY 1
INVESTMENT COMPONENTS IN 2020
31.12.2019
31.12.2020
+/– %
CHF million
Investment property
Equities
Alternative financial assets
As a percentage
8,120.1
3,576.6
1,102.8
8,410.3
3,574.6
3.6
– 0.1
Fixed-income securities
Mortgage assets
911.4
– 17.4
Investment property
Fixed-income securities
34,587.6
35,092.4
Mortgage assets
11,069.3
11,250.6
Policy loans and other loans
5,743.6
5,764.3
Derivatives
469.7
493.2
Cash and cash equivalents
2,412.6
2,590.1
Total
67,082.4
68,086.8
1.5
1.6
0.4
5.0
7.4
1.5
1 Excluding investments for the account and at the risk of life insurance policyholders and
third parties.
Policy loans and other loans
Equities
Cash and cash equivalents
Alternative financial assets
Derivatives
51.5
16.5
12.4
8.5
5.3
3.8
1.3
0.7
18
Baloise Group Annual Report 2020
Review of operating performance
ASSETS HELD BY BALOISE
as at 31 December 2019
CHF million
Investments for own account and at own risk
Asset portfolio for the account and at risk
of life insurance policyholders and third parties
Total recognised assets
Third-party assets
as at 31 December 2020
CHF million
Investments for own account and at own risk
Asset portfolio for the account and at risk
of life insurance policyholders and third parties
Total recognised assets
Third-party assets
Non-life
Life
Asset
Management
and Banking
Total for the
Group
10,396.8
49,711.3
7,911.1
15,337.8
10,396.8
65,049.1
7,911.1
67,082.4
15,939.0
83,021.4
10,748.6
Non-life
Life
Asset
Management
and Banking
Total for the
Group
10,926.3
49,875.2
8,522.2
15,564.1
10,926.3
65,439.3
8,522.2
68,086.8
16,050.1
84,136.9
11,758.8
its comprehensive insurance products from the market in 2019,
which resulted in a sharp rise in business volume that was mainly
driven by single premiums. All in all, this gave the business
volume in the life insurance business an uplift of around
CHF 569 million in 2019. In 2020, the volume of premiums in the
traditional life business normalised as expected, contracting
by 18.9 per cent to CHF 3,291.3 million (2019: CHF 4,060.3 mil-
lion). For the Swiss business, this translated into a decline in
gross premiums written in the traditional life business of
22.6 per cent to CHF 2,648.2 million (2019: CHF 3,422.9 million).
In Swiss francs, the German business recorded a slight uptick
of 0.6 per cent in gross premiums written, reaching CHF 380.2 mil-
lion. In local currency terms, the rate of growth was 4.6 per cent.
Gross premiums written in Belgium grew by 4.7 per cent in Swiss
francs to CHF 190.3 million, which equated to growth of 8.8 per
cent in local currency terms. In Luxembourg, the volume of gross
premiums written in the life business contracted by 5.6 per cent
to CHF 72.5 million. This equated to a decline of 1.9 per cent in
local currency terms.
The volume of investment-type premiums dropped by 3.9
per cent year on year to CHF 1,832.7 million (2019: CHF 1,907.5 mil-
lion). This was due to persistently challenging market condi-
tions for the ‘Freedom of Service’ business. But with more than
CHF 10 billion in assets under management, Baloise is main-
taining its position as a key player in this segment.
Negative currency effects and Baloise’s market-driven decision
not to offer a tranche product in Switzerland in 2020 that had
generated a positive effect in the prior-year period also contrib-
uted to this decline.
EBIT in the life business amounted to a solid CHF 282.2 mil-
lion, thus exceeding the minimum expected profit contribution
of CHF 200 million (2019: CHF 274.8 million). Net financial income
in the life business was also adversely affected by impairment
losses. This was counteracted by positive effects in technical
reserves. The amount needed to strengthen reserves was lower
than in 2019. As a result, EBIT increased slightly.
The interest margin stood at a good level of 102 basis points
(2019: 109 basis points). The average guaranteed rate of return
in the traditional life business dropped from 1.2 per cent to
1.1 per cent due to the interest rate-related strengthening of
reserves and an improved business mix.
The new business margin in the life business was very
healthy at 42.7 per cent in 2020, representing a return to a more
normal level compared with the prior-year figure, which had
been influenced by a one-off spike in volume in the group life
business in Switzerland (2019: 37.3 per cent).
19
Baloise Group Annual Report 2020
Review of operating performance
Key figures for the national Baloise companies
2019
2020
+/– %
4,920.5
3,576.4
1,344.2
87.9
500.2
4,130.8
2,762.4
1,368.4
88.5
386.3
– 16.0
– 22.8
1.8
0.6
– 22.8
2019
2020
+/– %
1,363.5
1,339.0
573.5
790.0
90.9
20.2
562.6
776.4
94.9
20.9
– 1.8
– 1.9
– 1.7
4.0
3.5
2019
2020
+/– %
1,936.9
685.8
1,251.1
94.5
195.2
2,188.7
701.3
1,487.4
90.9
245.8
13.0
2.3
18.9
– 3.6
25.9
2019
2020
+/– %
1,267.9
1,131.1
136.7
97.7
22.7
1,236.1
1,097.5
138.6
89.3
28.9
– 2.5
– 3.0
1.4
– 8.4
27.3
KEY FIGURES FOR
SWITZERLAND
CHF million
Business volume
Of which: life
Of which: non-life
Net combined ratio (per cent)
Profit before borrowing
costs and taxes
KEY FIGURES FOR GERMANY
CHF million
Business volume
Of which: life
Of which: non-life
Net combined ratio (per cent)
Profit before borrowing costs
and taxes
KEY FIGURES FOR BELGIUM
CHF million
Business volume
Of which: life
Of which: non-life
Net combined ratio (per cent)
Profit before borrowing
costs and taxes
KEY FIGURES FOR
LUXEMBOURG
CHF million
Business volume
Of which: life
Of which: non-life
Net combined ratio (per cent)
Profit before borrowing costs
and taxes
20
ASSET MANAGEMENT AND BANKING
Following the outbreak of Covid-19 in early 2020, the ensuing
lockdowns caused economic activity to grind to a halt in an
unprecedented manner in March. In response, the financial
markets rapidly plunged into turmoil. After a crash that saw
global share prices plummet by 34 per cent within 24 trading
days, most markets quickly began to recover. Concerns in
connection with the pandemic intermittently caused volatility,
but the central banks’ policy of low interest rates and new asset
purchase programmes as well as comprehensive support
packages provided by governments boosted the stock markets
and stabilised bonds.
Insurance assets: solid investment yield in an unusual
trading year
In light of the market turmoil, gains on the investment of
insurance assets were lower than in the previous year at
CHF 1,270.5 million (2019: CHF 1,355.7 million). Current income
fell to CHF 1,101.0 million owing to the persistently low level of
interest rates (2019: CHF 1,176.5 million). This trend was miti-
gated, to an extent, by reallocating assets to private debt and
building up positions in corporate bonds at attractive credit
spreads.
At CHF 579.1 million, the capital gains recognised in the
income statement were up by CHF 5.6 million compared with
the prior year. This was attributable to high contributions from
bonds and equities. Impairment losses were up by CHF 122.5 mil-
lion year on year. This increase was mainly driven by European
equities and was linked to the disruption in the capital markets
caused by the Covid-19 pandemic.
The net gains and losses relating to currency hedging costs
and currency effects arising on unhedged currency exposures
improved by CHF 102.3 million to a gain of CHF 74.9 million owing
to lower currency hedging costs and exchange rate movements.
The gains on investments achieved for insurance assets
equated to a net return of 2.1 per cent, which was down a little
on the 2019 figure of 2.3 per cent. Unrealised gains rose by
CHF 546.2 million owing to changes in interest rates and the
narrowing of spreads. The rate of return on insurance assets
according to IFRS – which includes unrealised net gains and
losses on investments, but excludes gains and losses on
held-to-maturity debt instruments – was 3.0 per cent, repre-
senting a decrease on the 4.7 per cent rate of return according
to IFRS in 2019.
Baloise Group Annual Report 2020
Review of operating performance
Significant increase in external customers’ assets
As at 31 December 2020, the total assets under management
stood at CHF 66.2 billion, a rise of 4 per cent on the prior year.
The increase in volume was due not only to the recovery in the
financial markets in the second half-year and a strong perfor-
mance towards the end of 2020, but also to additional inflows,
which included both insurance assets and assets in business
with external customers. The latter was primarily attributable
to growth in assignments for real estate portfolio management.
On average over the year, the volume of assets under
management remained lower than in 2019 and thus generated
lower returns. Alongside the smaller average volume, other
one-off effects also contributed to the decline. Most notably,
additional non-recurring income was generated in 2019 as a
result of the capital increase of the Baloise Swiss Property Fund.
Business with external customers was once again
expanded substantially in 2020. Net new assets amounted to
CHF 1,244.4 million, a year-on-year increase of 48 per cent. The
volume of business with external customers was thus increased
significantly and further skills and expertise were accumulated.
The asset management mandates at Baloise Bank SoBa
also made a significant contribution to the rise in net new assets.
The number of asset management mandates increased to 3,212
(up by 21.4 per cent), highlighting the benefits of the bank’s
unique offering in Switzerland of insurance, banking and asset
management from a single source, and of integrating pension
and wealth management services.
The real estate segment saw strong growth. At the start of
2020, Baloise acquired two plots of land that form part of the
Giessen development in Dübendorf. Plans for the approximately
35,000 square metre site include the construction of around
500 new homes, as well as commercial units and green spaces,
by 2026. In August 2020, the Group’s new headquarters at
Baloise Park was officially opened. The complex, which com-
prises three buildings, is a striking new landmark in Basel right
by the central train station. In addition to the Group headquar-
ters, two investment properties were constructed that have
already been almost fully let.
Baloise also further underpinned its ambitions as a real
estate service provider by entering into a partnership with
Pensionskasse Basel-Stadt at the end of 2020.
In the market for liquid assets, the Baloise Global Bonds
CHF Optimized fund and the Baloise Senior Secured Loans fund
enjoyed strong demand and became the flagship portfolios in
their respective product categories. In the summer of 2020,
Baloise Asset Management invested in Zurich-based asset
manager Tolomeo Capital AG as part of a strategic partnership,
which strengthened its position as one of Switzerland’s leading
rule-based asset managers. The Group entities Baloise Asset
Management Schweiz AG and Baloise Immobilien Manage-
ment AG were merged in order to simplify the structure. They
now operate under the single name Baloise Asset Management AG.
In addition, Baloise continued to evolve its culture in order to
become an increasingly customer-oriented organisation. To this
end, employees now collaborate in self-organised cross-functional
teams with end-to-end responsibility. The aim behind this change
is to strengthen the focus on customers and increase efficiency.
Baloise Asset Management contributes to the sustainability
strategy of the Baloise Group by taking a responsible investment
approach. The Baloise Responsible Investment Policy (RI Policy)
provides a fundamental framework for the implementation of a
sustainable value creation process. In 2020, the scope of the
sustainable investment approach was expanded to all assets
managed by Baloise in products for external customers, the
Baloise Senior Secured Loans fund, the selection of third-party
funds and real estate investments.
The climate strategy and the launch of the active ownership
approach in the first quarter of 2021 mark two milestones in the
implementation of the sustainable investment strategy. The aim
of the climate strategy is to reduce risks that arise in connection
with climate change and to manage these risks prudently in the
portfolio. The active ownership approach focuses on an active
dialogue with companies on specific issues and sustainability
topics. This enables us to generate a positive environmental
and social impact with the assets we manage. In addition, the
requirements of the European regulator under the EU Action
Plan are being implemented in order to improve transparency
on the subject of sustainability for investors.
ECOSYSTEMS & INNOVATION
At the Investor Day in October 2020, Baloise presented the next
strategic phase, ‘Simply Safe: Season 2’, which covers the period
2022 to 2025. This phase will be decisive for digital advances
at Baloise. The aim is to become a technology-driven financial
services provider and a key actor within the Home and Mobility
ecosystems, making Baloise an indispensable partner to cus-
tomers in their everyday lives. In addition to its core insurance
business and its asset management and banking activities, the
Company is therefore also focusing on innovation, the third
pillar of its business model. The ambition is to reach a value
creation figure of approximately CHF 1 billion with the Baloise
innovations by 2025 and to generate additional business volume
of more than CHF 350 million in this area over the same period.
Alongside the core insurance business, the Group-wide
innovation focus will be on the Home and Mobility ecosystems,
which were further expanded in 2020. We expect the business
volume in each of these ecosystems to grow to around
CHF 100 million by 2025. The target for our digital insurance
service FRIDAY is to reach a business volume of more than
CHF 150 million in 2025.
21
Baloise Group Annual Report 2020
Review of operating performance
Home ecosystem
In Switzerland, Baloise invested in cleaning services provider
Batmaid in the first half of 2020 and established a partnership
with quitt., a leading platform facilitating hiring, payroll and social
security administration processes for domestic support workers.
It thus expanded its existing range of partnerships with Movu,
Bubblebox and Devis in the Home ecosystem.
Customers visiting the batmaid.ch website can hire properly
insured and qualified cleaning staff online within one minute. The
company’s integrated trust service registers workers and takes
care of payroll taxes on behalf of its customers. The cleaning staff
have the benefit of declared work and social insurance cover.
Quitt. is a leading provider of registration and administra-
tion services for domestic support workers in compliance with
legal requirements in Switzerland. The company takes care of
registering workers with all relevant authorities, running the
payroll and organising the necessary insurance cover, thus
guaranteeing that all domestic support workers are properly
employed and insured. To this end, quitt. collaborates with all
cantonal compensation offices and tax authorities in Switzerland
and also offers customers a pension fund solution of its own.
In September 2020, Baloise invested in the start-up Houzy,
a Zurich-based technology platform that enables owners of
houses and apartments to manage every aspect of their property
digitally in one place. Houzy intelligently connects its customers
with the right partners, whether they are buying, renovating,
maintaining or selling their property.
In Belgium, Baloise impressed customers with three new
innovations. In collaboration with the Belgian start-up Keypoint,
Baloise has developed a new digital assistant designed to
simplify the work of property managers. In a bid to address the
shortage of professional property managers in Belgium, Keypoint
has developed a digital platform that brings all relevant parties
together and helps them to carry out property management tasks.
The second innovation involved an investment by Baloise
in the Walloon start-up ImmoPass, a service provider in the field
of technical property checks. Potential buyers or property
managers can use the ImmoPass system to assess the technical
condition of their building in order to avoid unexpected reno-
vation costs.
The third investment in Belgium, towards the end of the year,
was made in Rentio – an innovative Flemish start-up that digi-
talises, centralises and automates all manner of tasks in con-
nection with lettings processes. Property management compa-
frictionless
nies,
functionalities of its online platform or app to enter into contracts,
monitor payments, exchange documents and sort out everyday
problems such as a broken radiator or a routine boiler service.
tenants can use
landlords and
the
22
In addition, Baloise used this period of widespread working
from home as an opportunity to expand the offering of its B-Tonic
health platform in Belgium in order to support the mental and
physical well-being of its employees, brokers and customers.
The platform provides tips on how to stay resilient, especially
during the pandemic, for example by eating healthily and taking
daily exercise. B-Tonic uses a combination of activities such as
the ‘Healthy in 100 days’ challenge, free health guides, webinars
and Facebook live sessions to provide useful input. This suc-
cessful concept is on track to become a firmly established part
of Baloise’s activation offers in Belgium.
Mobility ecosystem
Baloise continued to drive forward the expansion of the Mobility
ecosystem in 2020. In addition to existing investments and
partnerships, e.g. with Drivolution, Gowago and Stratos*, Baloise
launched two further initiatives in the second half of 2020.
Its subsidiary Mobly founded the mobility platform Moveasy
in collaboration with the roadside assistance company Europ
Assistance. Moveasy uses the concept of ‘mobility as a service’
and integrates more than 20 transport service providers in
Belgium with the aim of providing residents in urban areas with
sustainable and environmentally-friendly alternatives to the car
as a mode of transport, while always enabling users to keep an
eye on their travel budget.
In November 2020, Baloise announced a partnership with
TWIICE, a Swiss start-up that specialises in the development of
exoskeletons. This project enables Baloise to better integrate
the mobility needs of a specific target group, i.e. people with
musculoskeletal conditions. In line with its approach to sus-
tainability and its commitment to fulfilling its corporate social
responsibility, Baloise is taking this opportunity to shape the
future of mobility in a way that makes it open to everyone,
including those with disabilities.
At the end of the year, Baloise also announced the founda-
tion of aboDeinauto and an investment in Ben Fleet Services in
Germany. aboDeinauto is a start-up founded by Baloise with
support from Berlin-based corporate venture builder Bridge-
maker and the first car subscription service to focus specifically
on used vehicles. Its concept is based on close collaboration
with car dealers who gain the opportunity to get involved in the
rapidly growing market of car subscription services through
aboDeinauto. The monthly fee is affordably priced and the
subscription model is simple and flexible. aboDeinauto enables
customers to use a second-hand car of their choice on a monthly
subscription basis with no long-term commitment. The close
relationships with car dealers allow it to draw on a large pool of
second-hand vehicles and to offer them at particularly attractive
Baloise Group Annual Report 2020
Review of operating performance
rates. This differentiates aboDeinauto from existing car sub-
scription services in the market.
Ben Fleet Services was founded in 2019 and its digital
service platform has been revolutionising the market for fleet-
based services ever since. Its portfolio of services, which can
be used for individual vehicles or entire fleets, includes on-site
cleaning, refuelling and charging, maintenance and repairs, and
delivery and collection. The company looks after not only cars
(both conventional and electric) but also vans, buses and trains,
bicycles and e-scooters. The platform efficiently integrates these
services with existing customer systems via digital interfaces.
Its automated processes generate time and cost savings and
offer customers a high degree of flexibility.
* Formerly ‘Carhelper’.
FRIDAY
FRIDAY achieved its targets for the 2020 financial year and now
has a base of more than 100,000 customers. The outbreak of
the Covid-19 pandemic caused a dip in new vehicle registrations
in Germany, but thanks to its digital offering, FRIDAY was still
able to meet its growth targets. Gross premiums written by
FRIDAY doubled year on year to more than CHF 30 million in 2020.
This growth was accompanied by high customer satisfaction and
continuous improvement of the claims ratio. FRIDAY intends to
achieve further growth in 2021. The company’s planned market
launch in France will be an important step in this regard. FRIDAY
plans to generate a contribution of more than CHF 150 million to
total business volume by 2025.
An overview of the innovative projects launched at Baloise
since the start of Simply Safe can be found here:
www.baloise.com/innovations
OUTLOOK
The good results for 2020 show that Baloise is well on track to
achieve its targets for the Simply Safe strategic phase by 2021
despite the substantial challenges posed by the Covid-19 pandemic.
A reliably strong balance sheet, solid profitability levels and a
healthy volume of business show that Baloise is continuing to
operate in a prudent and sustainably successful way despite
challenging conditions. At the Investor Day on 29 October 2020,
the Baloise Group presented the content of ‘Simply Safe: Season
2’, the next phase of its strategy that sets out the Company’s
targets and ambitions for the period 2022 to 2025. By 2025, Baloise
is aiming to be in the top 5 per cent of the best companies to work
for in Europe, to have gained 1.5 million new customers and
generated CHF 2 billion in cash. Of this cash, it intends to distrib-
ute 60 to 80 per cent as dividends. Baloise also wants to further
exploit the substantial potential for growth of its digital insurance
enterprise FRIDAY. And in addition to the two existing pillars of
insurance and asset management & banking, it wants to establish
the Home and Mobility ecosystems – along with further innovations
– as a new third pillar of its business and reach a value creation
figure of CHF 1 billion in these new areas.
23
Baloise Group Annual Report 2020
Review of operating performance
Consolidated income statement
Consolidated income statement
FIVE-YEAR OVERVIEW
CHF million
Income
Premiums earned and policy fees (gross) 1
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Investment income
Realised gains and losses on investments 2
For own account and at own risk
For the account and at risk
of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurance share of claims incurred
Acquisition costs
Operating and administrative expenses
for insurance business
Investment management expenses 3
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses 3
Expense
2016
2017
2018
2019
2020
6,680.6
– 168.2
6,512.4
6,726.4
– 183.4
6,542.9
6,737.0
– 209.0
6,528.0
7,571.3
– 241.5
7,329.8
7,034.8
– 268.0
6,766.8
1,476.6
1,392.5
1,376.0
1,257.0
1,176.5
303.1
364.1
110.1
7.1
136.8
427.8
696.5
116.9
5.5
235.0
96.1
– 1,087.8
336.1
1,709.5
130.4
6.2
227.6
126.0
10.8
227.7
288.3
179.5
118.5
64.1
193.4
8,910.2
9,417.1
7,276.6
10,996.9
8,787.0
– 5,664.2
– 5,726.5
– 5,904.4
– 6,090.4
– 6,182.6
– 669.1
108.2
– 502.9
– 763.9
– 60.3
– 30.5
– 342.9
– 300.9
– 535.0
80.8
– 482.1
– 765.8
– 77.2
– 21.9
– 613.4
– 591.8
412.4
83.3
– 535.8
– 810.8
– 82.2
– 19.2
801.2
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 483.6
– 459.0
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 8,226.6
– 8,733.0
– 6,539.1
– 10,273.0
– 8,184.1
Profit before borrowing costs and taxes
683.6
684.1
737.5
723.9
602.9
1 In line with the accounting principles applied by the Baloise Group, investment-type insurance premiums are not included in premiums earned and policy fees.
2 Including financial liabilities held for trading purposes (derivative financial instruments).
3 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management expenses.
24
Baloise Group Annual Report 2020
Review of operating performance
Consolidated income statement
FIVE-YEAR OVERVIEW
CHF million
2016
2017
2018
2019
2020
Profit before borrowing costs and taxes
683.6
684.1
737.5
723.9
602.9
Borrowing costs
Profit before taxes
Income taxes
Profit for the period
Attributable to
Shareholders
Non-controlling interests
Earnings / loss per share
Basic (CHF)
Diluted (CHF)
ADDITIONAL INFORMATION INSURANCE
CHF million
Gross premiums written and policy fees
Investment-type premiums
Total business volume
Investments for the account and at the risk
of life insurance policyholders
Net combined ratio
Funding ratio (non-life) (per cent)
– 38.0
645.6
– 111.7
533.9
534.8
– 0.9
11.53
11.22
– 34.3
649.8
– 117.9
531.9
548.0
– 16.1
11.50
11.48
– 39.9
697.6
– 174.7
522.9
523.2
– 0.3
11.14
11.12
– 37.7
686.2
3.3
689.5
694.2
– 4.7
15.02
14.99
– 34.3
568.6
– 140.3
428.3
434.3
– 6.1
9.65
9.63
2016
2017
2018
2019
2020
6,711.6
2,199.2
8,910.8
6,741.3
2,519.5
9,260.8
6,766.2
1,912.1
8,678.2
7,602.4
1,907.5
9,509.9
7,093.8
1,832.7
8,926.5
12,001.0
14,543.8
13,640.8
15,337.8
15,564.1
92.2
188.5
92.3
193.3
91.7
179.4
90.4
179.8
91.2
174.3
25
Financial instruments with characteristics of equity
14,305.6
15,874.9
14,137.9
16,232.9
Financial instruments with characteristics of liabilities
33,766.5
35,360.1
33,775.1
36,749.0
Baloise Group Annual Report 2020
Review of operating performance
Consolidated balance sheet
Consolidated balance sheet
FIVE-YEAR OVERVIEW
as at 31.12.
CHF million
Assets
Property, plant and equipment
Intangible assets
Investments in associates
Investment property
Mortgages and loans
Derivative financial instruments
Other assets / receivables
Deferred tax assets
Cash and cash equivalents
Total assets
as at 31.12.
CHF million
Equity and liabilities
Equity
Equity before non-controlling interests
Non-controlling interests
Total equity
Liabilities
Gross technical reserves
Liabilities arising from banking business
and financial contracts
Derivative financial instruments
Other accounts payable
Deferred tax liabilities
Total liabilities
466.2
1,155.4
263.4
8,410.3
16,539.8
37,078.9
17,014.9
1,089.1
2,254.7
87.9
4,004.0
2016
2017
2018
2019
2020
349.3
836.1
160.4
6,817.5
353.3
1,002.5
138.4
7,480.3
318.3
1,041.2
221.1
7,904.0
362.8
1,034.7
387.4
8,120.1
16,354.7
16,568.6
16,396.2
16,812.9
757.3
4,024.3
69.3
800.4
3,305.1
88.8
914.8
2,036.6
73.5
1,048.1
2,184.3
97.4
3,173.3
3,551.6
4,036.1
3,988.0
80,614.3
84,523.9
80,854.8
87,017.8
88,364.5
2016
2017
2018
2019
2020
5,741.3
6,346.2
5,970.6
6,714.0
6,983.7
32.4
63.0
37.6
1.6
2.0
5,773.7
6,409.2
6,008.2
6,715.6
6,985.7
46,209.0
48,008.5
46,575.2
48,333.3
20,317.7
22,696.5
21,539.0
24,540.4
299.0
7,070.0
944.9
145.3
6,341.9
922.4
117.3
5,707.2
907.8
117.5
6,372.6
938.5
48,585.0
25,283.5
152.6
6,357.4
1,000.4
74,840.6
78,114.7
74,846.6
80,302.2
81,378.8
Total equity and liabilities
80,614.3
84,523.9
80,854.8
87,017.8
88,364.5
26
Baloise Group Annual Report 2020
Review of operating performance
Business volume, premiums and combined ratio
Business volume, premiums
and combined ratio
BUSINESS VOLUME
2019
CHF million
Non-life
Life
Sub-total of IFRS gross premiums written 1
Investment-type premiums
Total business volume
2020
CHF million
Non-life
Life
Sub-total of IFRS gross premiums written 1
Investment-type premiums
Total business volume
1 Premiums written and policy fees (gross).
Group
Switzerland
Germany
Belgium
Luxembourg
3,542.1
4,060.3
7,602.4
1,907.5
9,509.9
1,344.2
3,422.9
4,767.1
153.4
4,920.5
790.0
377.9
1,167.9
195.6
1,363.5
1,251.1
181.7
1,432.8
504.1
1,936.9
136.7
76.8
213.5
1,054.3
1,267.9
Group
Switzerland
Germany
Belgium
Luxembourg
3,802.5
3,291.3
7,093.8
1,832.7
8,926.5
1,368.4
2,648.2
4,016.7
114.2
4,130.8
776.4
380.2
1,156.6
182.5
1,339.0
1,487.4
190.3
1,677.6
511.0
2,188.7
138.6
72.5
211.1
1,025.0
1,236.1
27
Baloise Group Annual Report 2020
Review of operating performance
Business volume, premiums and combined ratio
NET COMBINED RATIO
2019
as a percentage of premiums earned
Claims ratio 1
Expense ratio
Combined ratio
2020
as a percentage of premiums earned
Claims ratio 1
Expense ratio
Combined ratio
1 Including the profit-sharing ratio.
GROSS AND NET COMBINED RATIO
as a percentage of premiums earned
Claims ratio 1
Expense ratio
Combined ratio
1 Including the profit-sharing ratio.
FUNDING RATIO (NON-LIFE)
CHF million
Technical reserve for own account 1
Premiums written and policy fees for own account
Funding ratio (per cent)
1 Not including capitalised settlement premiums.
28
Group
Switzerland
Germany
Belgium
Luxembourg
57.9
32.5
90.4
60.6
27.3
87.9
54.6
36.3
90.9
59.8
34.7
94.5
63.1
34.6
97.7
Group
Switzerland
Germany
Belgium
Luxembourg
59.6
31.6
91.2
61.5
27.0
88.5
2019
57.2
31.1
88.3
58.3
36.6
94.9
Gross
2020
61.4
30.3
91.7
58.1
32.8
90.9
2019
57.9
32.5
90.4
55.2
34.1
89.3
Net
2020
59.6
31.6
91.2
2019
2020
5,984.9
3,329.4
179.8
6,235.8
3,577.6
174.3
Baloise Group Annual Report 2020
Review of operating performance
Technical income statement
Technical income statement
CHF million
Gross
Gross premiums written and policy fees
Change in unearned premium reserves
Premiums earned and policy fees (gross)
Claims and benefits paid (gross)
Change in technical reserves (gross)
Change in claims reserve / actuarial reserves 1
Change in other technical reserves
Technical expenses
Total technical result (gross)
Ceded to reinsurers
Reinsurance premiums ceded
Claims and benefits paid
Reinsurers’ share of claims incurred
Change in other technical reserves
Technical expenses
Total technical result of ceded business
For own account
Premiums earned and policy fees
Claims and benefits paid
Change in claims reserve / actuarial reserves 1
Change in other technical reserves
Technical expenses
Total technical result for own account
Investment income (gross)
Realised gains and losses on investments 2
Investment management expenses
Other financial expenses and income
Gains or losses on investments
Profit before borrowing costs and taxes
Borrowing costs
Income taxes
Profit for the period (segment result)
1 Including change in reserve for claims handling costs.
2 Including financial liabilities held for trading purposes (derivative financial instruments).
3 Of which deferred gains / losses from other operating segments (31 December 2019: CHF –1.8 million; 31 December 2020: CHF –3.2 million).
Non-life
2019
2020
2019
Life 3
2020
3,542.1
– 31.2
3,511.0
3,802.5
– 59.1
3,743.4
4,060.3
3,291.3
–
–
4,060.3
3,291.3
– 2,184.4
– 2,338.3
– 3,906.0
– 3,844.3
183.5
– 20.1
52.4
– 51.8
– 1,186.9
66.7
– 1,116.8
– 1,159.1
– 328.2
373.2
246.7
– 1,294.1
168.8
– 136.6
– 335.2
– 856.0
– 214.9
77.9
21.4
0.1
20.6
– 94.9
– 230.0
164.7
40.3
0.3
22.5
– 2.1
– 26.6
– 38.1
6.3
8.6
2.8
1.3
– 7.6
11.5
3.3
16.5
1.3
– 5.4
3,296.1
3,513.5
4,033.7
3,253.3
– 2,106.5
– 2,173.6
– 3,899.7
– 3,832.8
204.9
– 20.0
92.7
– 51.4
– 1,178.3
69.5
– 1,096.2
– 1,136.5
– 326.9
278.2
176.6
50.8
– 30.6
– 76.2
120.7
398.9
– 0.4
– 34.2
364.3
244.7
158.5
25.2
– 29.4
– 96.8
57.6
302.2
– 0.3
– 63.2
238.7
– 1,301.7
999.9
1,925.6
– 105.7
– 1,243.3
1,576.5
274.8
– 10.3
51.8
316.3
172.1
– 120.0
– 333.9
– 861.4
942.6
459.1
– 102.0
– 156.1
1,143.6
282.2
– 10.3
– 67.6
204.3
29
2019
2020
+/– %
407.7
154.3
339.7
1,163.6
1,135.2
194.9
91.9
54.8
421.1
160.8
348.7
1,268.8
1,238.1
208.0
102.6
54.4
3,542.1
3,802.5
3.3
4.2
2.6
9.0
9.1
6.7
11.6
– 0.7
7.3
2019
2020
+/– %
3,384.1
2,583.7
2,595.0
2,529.1
– 1,907.5
– 1,832.7
4,060.3
3,291.3
– 23.3
– 2.1
– 3.9
– 18.9
Baloise Group Annual Report 2020
Review of operating performance
Gross premiums by sector
Gross premiums by sector
GROSS PREMIUMS BY SECTOR (NON-LIFE)
CHF million
Accident
Health
General liability
Motor
Property
Marine
Other
Inward reinsurance
Gross premiums written (non-life)
GROSS PREMIUMS BY SECTOR (LIFE)
CHF million
Business volume generated by single premiums
Business volume generated by periodic premiums
Investment-type premiums
Gross premiums written (life)
30
Baloise Group Annual Report 2020
Review of operating performance
Banking activities
Banking activities
PROFIT OR LOSS FROM BANKING ACTIVITIES
CHF million
Net interest income
Net fee and commission income 1
Trading profit
Other net income
Total operating income
Personnel expenses
General and administrative expenses 1
Total operating expenses
Gross profit
Net losses and impairment due to credit risk
Depreciation, amortisation and impairment of property, plant and equipment and of intangible assets
Profit before borrowing costs and taxes
Borrowing costs
Income taxes
Profit for the period (segment result)
ADDITIONAL INFORMATION
CHF million
Third-party assets
ASSET ALLOCATION
CHF million
Investment property
Equities
Alternative financial assets
Fixed-income securities
Mortgage assets
Policy loans and other loans
Derivative financial instruments
Cash and cash equivalents
Total
2019
2020
75.6
78.0
0.1
10.9
75.5
66.2
0.1
12.7
164.6
154.6
– 71.2
5.2
– 66.1
98.5
0.3
– 7.7
91.1
0.0
– 13.5
77.6
– 69.8
1.9
– 67.9
86.7
– 0.9
– 6.4
79.4
0.0
– 11.7
67.8
31.12.2019
31.12.2020
10,748.6
11,758.8
31.12.2019
31.12.2020
–
11.5
–
142.6
6,505.6
167.1
9.8
1,074.6
7,911.1
–
15.1
–
142.5
6,768.9
184.3
11.9
1,399.5
8,522.2
31
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for general and administrative expenses and net fee and
commission income.
Baloise Group Annual Report 2020
Review of operating performance
Investment performance
Investment performance
2019 1
CHF million
Current income
Realised gains and losses
and impairment losses
recognised in profit or loss (net)
Fixed-income
securities
Equities
Investment
property
Mortgage
assets, policy
loans and
other loans
Alternative
financial assets,
derivatives,
cash and cash
equivalents
Total
622.0
– 79.5
103.4
134.1
282.6
216.9
239.1
82.6
9.9
– 17.9
1,257.0
336.1
Change in unrealised gains and losses recognised directly
in equity
1,087.6
290.7
–
–
– 23.6
1,354.8
Investment management costs
Operating profit
Average investment portfolio
Performance (per cent)
– 50.4
1,579.7
– 6.1
522.1
– 12.7
486.7
– 12.8
308.9
– 7.5
– 39.0
– 89.5
2,858.4
33,193.1
3,205.6
8,012.0
16,604.6
4,068.1
65,083.5
4.8
16.3
6.1
1.9
– 1.0
4.4
1 Excluding investments for the account and at the risk of life insurance policyholders and third parties.
2020 1
CHF million
Current income
Realised gains and losses
and impairment losses
recognised in profit or loss (net)
Fixed-income
securities
Equities
Investment
property
Mortgage
assets, policy
loans and
other loans
Alternative
financial assets,
derivatives,
cash and cash
equivalents
Total
562.6
100.9
102.2
– 125.1
282.5
171.0
221.4
109.3
7.7
32.2
1,176.5
288.3
Change in unrealised gains and losses recognised directly
in equity
415.9
– 12.4
–
–
140.4
543.9
Investment management costs
Operating profit
Average investment portfolio
Performance (per cent)
– 50.2
1,029.2
– 6.5
– 41.8
– 27.5
426.0
– 14.9
315.8
– 6.7
173.6
– 105.9
1,902.7
34,840.0
3,575.6
8,265.2
16,913.9
3,989.9
67,584.6
3.0
– 1.2
5.2
1.9
4.4
2.8
1 Excluding investments for the account and at the risk of life insurance policyholders and third parties.
32
Baloise Group Annual Report 2020
Review of operating performance
Investment performance
CURRENT INCOME FROM INSURANCE 1
CHF million
Investment property
Equities
Alternative financial assets
Fixed-income securities
Mortgage assets
Policy loans and other loans
Cash and cash equivalents
Total current income
REALISED GAINS AND LOSSES IN INSURANCE 1
CHF million
Investment property
Equities
Alternative financial assets
Fixed-income securities
Mortgage assets
Policy loans and other loans
Derivative financial instruments
Total capital gains and losses
ASSET ALLOCATION IN INSURANCE 1
as at 31.12.
CHF million
Investment property
Equities
Alternative financial assets
Fixed-income securities
Mortgage assets
Policy loans and other loans
Derivative financial instruments
Cash and cash equivalents
Total
Non-life
Life
41.7
33.0
1.5
80.7
7.4
12.6
– 0.3
239.4
69.9
9.4
539.6
63.7
78.6
– 0.6
2019
Total
281.1
102.9
10.8
620.4
71.1
91.2
– 1.0
Non-life
Life
39.4
30.5
1.1
66.9
7.1
13.7
– 0.2
241.8
71.2
7.5
494.3
60.4
67.6
– 0.2
2020
Total
281.2
101.7
8.5
561.1
67.5
81.3
– 0.5
176.6
999.9
1,176.5
158.5
942.6
1,101.0
Non-life
Life
29.7
69.5
26.5
– 15.2
0.0
4.3
– 64.0
50.8
187.1
64.4
75.0
– 64.5
– 0.2
71.2
– 70.0
263.0
Non-life
Life
2019
Total
216.8
133.9
101.5
– 79.7
– 0.2
75.5
– 134.0
313.8
2019
Total
Non-life
Life
27.5
– 36.7
1.1
39.6
– 0.9
0.4
– 5.7
25.2
142.2
– 88.4
– 9.1
61.3
0.6
124.8
42.7
274.0
Non-life
Life
994.7
1,017.5
296.5
7,098.6
2,545.7
806.3
8,093.3
3,563.2
1,102.8
1,004.7
1,014.4
225.4
7,381.5
2,543.0
686.0
2020
Total
169.6
– 125.1
– 8.0
100.9
– 0.3
125.2
37.0
299.3
2020
Total
8,386.2
3,557.4
911.4
5,577.9
28,866.5
34,444.4
5,972.4
28,976.8
34,949.2
488.5
1,607.2
18.8
395.6
4,075.2
5,041.5
436.1
841.4
4,563.7
6,648.7
454.9
1,237.0
467.1
1,841.5
17.2
383.5
4,014.5
5,111.1
461.0
701.2
4,481.7
6,952.6
478.3
1,084.7
10,396.8
49,711.3
60,108.1
10,926.3
49,875.2
60,801.5
1 Excluding investments for the account and at the risk of life insurance policyholders and third parties.
33
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable business management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
Sustainable business
management
RESPONSIBILITY ......................................................... 36
Baloise value creation model ............................................ 36
Taking responsibility and creating value ........................... 37
Commitments and sustainable development goals ........... 38
ESG ratings and memberships .......................................... 40
Important foundations for value creation ........................... 41
Creating value for employees ............................................ 44
Creating value for customers ............................................. 46
Creating value for shareholders and investors ................... 50
Creating value for the environment .................................... 51
Creating value for society .................................................. 53
Creating value for partners ................................................ 59
UNEP FI Principles for Sustainable Insurance (UNEP FI PSI) 61
RESPONSIBLE INVESTMENT ......................................... 62
Investing sustainably: steady expansion of the Baloise
responsible investment strategy ........................................ 62
HUMAN RESOURCES ................................................... 66
On the way to becoming a top employer ............................ 66
THE ENVIRONMENT ..................................................... 72
Environmental mission statement ..................................... 72
Protecting the environment over the long term .................. 73
RISK MANAGEMENT .................................................... 77
Risk management is a key pillar of value creation
at Baloise ......................................................................... 77
COMMITMENT TO ART ................................................. 80
The Baloise Group’s commitment to art ............................. 80
Unterkapitel Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Baloise value creation model
Creating value – achieving sustainable development
Partners
Investors
Environment
Society
Resources
Customers
Employees
I N S URANCE
A
S
S
E
T
M
A
N
A
G
E
M
E
N
T
S
E
C
I
V
R
E
B A N KING S
Investors
Institutional and private investors and
shareholders, who invest in Baloise
Partners
Innovation partners such as start-ups,
outsourcing partners, suppliers,
brokers and agents
Environment
The direct natural environment at all
Baloise sites and the global environment
that we influence through our business
decisions and activities
Society
The communities in which we operate at
all Baloise sites, and the society of each
country in which we operate
Customers
Retail and corporate customers at all
Baloise sites
Employees
Baloise employees at all Baloise sites
Employees
Greater well-being
Customers
Increased customer satisfaction
Society
Valued member of society
Investors
Partners
36
Effects
Employees
Environment
Climate protection
Customers
Environment
Society
Partners
Responsible and successful
cooperation
Investors
Attractive, reliable and responsible
investment
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Responsibility
Taking responsibility and creating value: Baloise aligns its sustainable business management with the
Baloise value creation model (see illustration on the left). This is based on the International Integrated
Reporting Council (IIRC) model, but is specifically aligned with the Baloise business model, the aspects
that are important to the Company and its corporate values. Corporate responsibility covers a broad
range of activities and involves an equally broad range of resources – from shareholders and investors
to employees and customers, partners, society and the environment around us.
International Integrated Reporting Council (IIRC), as resources.
The newly created value benefits the aforementioned resources
as well as Baloise itself and flows back into the value creation
process as input in order to achieve long-term goals for sustain-
able development.
www.baloise.com/sustainability
www.baloise.com/strategy
www.baloise.com/corporate-governance
www.baloise.com/code-of-conduct
www.baloise.com/compliance
www.baloise.com/risk-management
STRATEGIC INTEGRATION THROUGH COMMITMENTS IN THE
AREA OF SUSTAINABILITY
At the heart of Baloise’s belief is sustainable value creation,
with a promise not to create value for certain individuals that
causes losses to others in the process. Baloise has therefore
assumed six commitments in the area of sustainability that cover
all the resources in our value creation model. During the course
of the next strategic phase ‘Simply Safe: Season 2’, which runs
until 2025, these six commitments will add to the three strategic
goals relating to employees, customers and investors. The
baseline assessment for the relevant key figures will be carried
out in 2021. Baloise will report annually on its progress in these
six areas, starting in the annual report for 2022.
STRATEGIC INTEGRATION THROUGH VALUE CREATION MODEL
Insurance companies grew out of the idea of risk sharing. The
strength of a community sharing the insurance risk is that a
community is more than the sum of its parts. No matter how
careful an individual may be, he or she is still exposed to risks
that can be better managed and mitigated by being spread –
along with cost – across the community. Of course this only
works if the community of insured persons is effectively and
efficiently organised. This is precisely where Baloise has seen
its role ever since it was founded in the 19th century: in ensuring
the sustainable functioning of this community. Responsible and
socially engaged behaviour is also an integral element of
Baloise’s Simply Safe strategy, alongside sustainable business
management that takes account of the Company’s stakeholders.
At the heart of Baloise’s value creation model is its Simple
Safe strategy, which emphasises that matters of sustainable
business management cannot be viewed in isolation from the
commercial management of a company. In its role as an insurance
and pension provider with product and service ecosystems that
cut across asset management, banking and insurance, Baloise
not only looks after individuals but also protects companies,
economies and communities and helps them to function prop-
erly – every day of the year. In doing so, it boosts economic and
social stability in the countries where it operates. Baloise must
be able to offer the sort of long-term security that cannot be
sustained by the pursuit of short-term profits alone. Through
the key parameters of corporate governance, compliance,
information security and risk management, Baloise can make
a lasting impact and, in so doing, create value for employees,
customers, society as a whole, the environment, partners and
investors. These stakeholders and the environment are described
in the value creation model, which is based on the model of the
37
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
COMMITMENTS
SUSTAINABLE DEVELOPMENT
GOALS (SDG)
1. Employees: Greater well-being
We offer our employees an inspiring and collaborative work
environment that they find motivating and that encourages their
productivity and continuous development.
2. Customers: Increased customer satisfaction
We make the lives of our customers safer and simpler. In this way,
we will increase customer satisfaction and support our customers
in their personal and professional development.
3. Society: Valued member of society
As a member of society, we are committed to social responsibility
as a good corporate citizen. We offer protection, safety and
security, and support (e.g. through taxes, sponsorships, dona-
tions and corporate citizenship) in normal times and during times
of crisis, and aim to increase the number of employees who do
voluntary work.
4. Environment: Climate protection
It is important to us that we continue to reduce our carbon emis-
sions, for the sake of the environment. From 2021, 100 per cent of
our electricity will come from renewable sources. In addition, we
will expand and intensify our responsible approach to investment.
5. Partners: Responsible and successful collaboration
It is important to us that we are the preferred partner for brokers,
agents, suppliers and business partners, such as outsourcing and
innovation partners, who share our values and with whom we can
convert synergies into mutual, measurable success.
6. Investors: Attractive, reliable and responsible investment
Baloise is an attractive, reliable and responsible investment. We
want to further increase the generation of cash from our operating
activities and pursue a transparent, balanced and value-creating
strategy for the application of funds.
38
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
SDGS AND MATERIALITY
Baloise’s value creation process is guided by the United Nations’
sustainable development goals (SDGs). The following SDGs have
been identified as material for the Company:
▸
▸
▸
▸
▸
▸
▸
▸
▸
▸
SDG 1 (no poverty)
SDG 3 (good health and well-being)
SDG 4 (quality education)
SDG 7 (affordable and clean energy)
SDG 8 (decent work and economic growth)
SDG 9 (industry, innovation and infrastructure)
SDG 10 (reduced inequalities)
SDG 12 (responsible consumption and production)
SDG 13 (climate action)
SDG 17 (partnerships for the goals)
7. Assessment of materiality by the stakeholders (employees,
customers, investors and NGOs) through a structured
stakeholder dialogue.
Steps 1–4 were completed in 2020.
The technical assessment by the internal sustainability
network in step 3 was carried out in two phases. In the first
phase, a general technical assessment was provided that had
particular relevance to the impact on the business activities of
Baloise. Then in the second phase, an assessment was carried
out using the Future-Fit Business Benchmark* that focused
heavily on the effects for the business activities of Baloise. The
sustainability experts at Baloise brought these two assessments
together and reviewed them. The materiality analysis will be
continued in 2021 and published upon completion.
MATERIALITY ASSESSMENT
In 2020, Baloise began work on a detailed materiality assessment
for the relevant aspects in the area of sustainability. This process
included the following steps:
1. Sector analysis to identify relevant sector-specific topics,
such as inclusion of the material topics of the SASB
(Sustainability Accounting Standards Board) applicable to
the insurance sector
2. Analysis of external expectations and requirements in the
market in the form of relevant regulations and financial
market demands, and on the basis of stakeholder meetings
with investors and an employee survey
3. Listing of material topics and assessment of the material-
ity of the topics identified by departments as relevant
to their area of responsibility within the internal sustaina-
bility network
4. Allocation of the relevant SDGs to the topics that are
material to Baloise
5. Assessment of materiality by the Corporate Executive
Committee
6. Assessment and review of materiality by the Board
of Directors
* The Future-Fit Business Benchmark is an open source tool that was devel-
oped by the Future-Fit Foundation in the UK and published in May 2016. This
approach shifts the focus away from today’s best practice in sustainability
management and reporting and towards the practice that will be required
tomorrow.
STAKEHOLDER DIALOGUE
Baloise still has no structured process for continuous dialogue
with stakeholders. A plan for this process will be developed in
2021. However, a dialogue with stakeholders is carried out
despite the absence of a structured process. In 2019, an
employee survey was conducted on the subject of the corporate
sustainability strategy. This survey will be repeated in 2021. In
addition, ten individual discussions with various Baloise
investors were held in 2020 on environmental, social and cor-
porate governance (ESG) topics and the general approach to
sustainability adopted by Baloise. Baloise is also an active
member of the following associations and groups where it
compares notes with other companies on sustainability-related
matters: Swiss Sustainable Finance (SSF), Swiss Business
Council for Sustainable Development (oebu), Association for
Environmental Management in Banks and Insurance Companies
(VfU), Principles for Sustainable Insurance (PSI), Principles for
Responsible Investment (PRI), collaboration with the Swiss
Insurance Association (SVV), the German Insurance Association
(GDV), Assuralia in Belgium and the Association des Compagnies
d’Assurances (ACA) in Luxembourg.
39
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
BALOISE MEMBERSHIPS
Collaboration with other companies, institutions and organisa-
tions is essential to drive sustainable development forward. That
is why we support sustainable development goal (SDG) no. 17
of the United Nations (partnerships for achieving the goals), as
we regard this as a fundamental requirement. After signing up
to the Principles of Responsible Investment (PRI) in 2018, Baloise
therefore also subscribed to the Principles of Sustainable Insur-
ance UNEP FI PSI in 2020. Since 2020, we have also been a
supporter of the Taskforce on Climate-Related Financial Disclo-
sures (TCFD) recommendations and a member of Swiss Sustain-
able Finance. As a member of the Swiss Insurance Association
(SVV), we work on standards relating to sustainability for the
entire Swiss insurance sector, act jointly on matters relating to
regulation and share expertise relating to responsible investment
and risk management. In 2020 we were actively involved in
preparing the sector reporting on the subject of sustainability
for the SVV.
BALOISE ESG RATINGS
Explanations of our current ESG ratings are part of transparent
sustainability communication. Data was actively supplied for the
following providers of ratings in 2020:
▸ MSCI
▸
▸
▸
▸
Sustainalytics
SAM Score (Dow Jones Sustainability Index)
ISS
FTSE Russell (FTSE4Good Index Series)
By publicising measures implemented such as the introduction
of our sustainability governance, the broadening and deepening
of our responsible investment approach and the renewal and
expansion of our strategy for information security, we were able
to improve our Sustainalytics rating by five points in 2020 from
31 (high risk) to 26 (medium risk). Our inclusion in the FTSE4Good
index in 2020 also represents progress. Baloise is not involved
in any controversies in the areas of environment (E), social
responsibility (S) and governance (G).
Baloise has set itself the goal of continuously improving its
ESG ratings. The Company will carry on using the information
from its ESG ratings to continuously improve its sustainability
activities. This is in line with our corporate strategy.
Baloise ESG ratings as at December 2020:
40
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
IMPORTANT FOUNDATIONS FOR VALUE CREATION
Baloise thinks and acts on a long-term basis and prioritises high
ethical standards in its management of the Company (corporate
governance). It takes thorough and professional action to protect
itself against new types of risk, such as cyber risk, and takes
account of sustainability-related risks and climate risks in its
strategic risk management (risk management), monitors com-
pliance with laws and norms (compliance), and establishes a
strategy for information security and an associated information
security governance framework (information security).
Based on these four important foundations of business
practice, Baloise can draw on all the resources at its disposal
to generate an impact and thereby create lasting value for
its stakeholders.
SUSTAINABILITY GOVERNANCE
Since 2019, Baloise has been maintaining a sustainability
network that includes representatives of all departments of
Baloise that have an influence on this topic within the Group or
are impacted by it. This working group has the necessary
expertise to develop and regularly update the content of the
sustainability approach, including the value creation model. The
Corporate Executive Committee decides on all matters regarding
the implementation and delivery of the content. The Board of
Directors is responsible for designing the sustainability approach
in detail, embedding it into the overall corporate strategy and
monitoring it. At the end of 2019, this governance model was
approved by the Corporate Executive Committee and the Board
of Directors.
In 2020, the governance process described above was applied
three times for the following matters:
▸
Support for the recommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD) with ongoing
integration into the reporting process
Improvement of selected ESG ratings with the aim of
securing a ranking in the upper mid range and signing up
to the Principles for Sustainable Insurance (UNEP FI PSI)
Agreement of the six commitments in the area of
sustainability
▸
▸
For further information on corporate governance, please refer to
the separate corporate governance report on page 85 onwards of
the Baloise Annual Report.
▸
Chapter ‘Corporate governance’
www.baloise.com/corporate-governance
RISK MANAGEMENT
Based on the recommendations of the Task Force on Climate-re-
lated Financial Disclosures (TCFD), the four TCFD categories for
which disclosure is currently required – Governance, Strategy,
Risk Management and Metrics & Targets – are shown below.
Governance
As described in the ‘sustainability governance’ section, the whole
Board of Directors is responsible for monitoring climate-related
risks and opportunities, together with all sustainability-related
matters. The diversity and complexity of these areas requires
the involvement of the entire Board of Directors with its full range
of abilities and expertise. The role of management in the assess-
ment and management of risks is described in detail in the
Sustainable business management / Risk management chapter.
Strategic decision-makers as well as system and process
managers and specialists are involved in risk assessment within
the Baloise risk management system.
Strategy
Baloise’s end-to-end risk management system and the plotting
of the Group-wide individual risks on the risk map according to
their likelihood and expected impact are explained in the Sus-
tainable business management / Risk management chapter. For
example, the integration of sustainability risks into the Own
Risk and Solvency Assessment (ORSA) ensures that the regular
analyses and assessments are incorporated into the strategic
risk management process.
In relation to climate protection and climate change, there are
also opportunities for the sustainable development of the invest-
ment portfolio and the insurance business and for promoting
innovation. The integration of sustainability criteria into the
investment process – and, in future, the underwriting process –
benefits the environment, society, customers and investors.
Risk management
The Sustainable business management / Risk management chapter
also describes how Baloise currently identifies, assesses and
manages sustainability risks and thus also climate risks. The
integration of sustainability risks, including climate risks, into
existing risk management processes and frameworks enables the
risk management team to assess these efficiently and from differ-
ent perspectives. When analysing the overall risk situation, the
sustainability risks are included as a separate risk type in the area
41
COMPLIANCE
Baloise regards compliance as a key element of creating sus-
tainable value for stakeholders such as customers, partners,
employees and shareholders. Compliance-related requirements
have steadily increased in recent years. New regulations and
tighter controls by regulatory authorities pose a challenge for
the whole organisation. Our goal is to make compliance part of
Baloise’s DNA.
Specifically, this means having a strong compliance culture
within Baloise. This is achieved firstly by raising the awareness
of employees through specific instructions and regular training
on matters such as data protection, money laundering, antitrust
law, and bribery and corruption. At the same time, a consistent
approach to violations is important in order to increase employ-
ees’ awareness of ethical behaviour. Suspected violations can
be reported via a number of channels, including an anonymous
whistleblower platform. The procedure for dealing with reports
and incidents is clearly defined. In addition, the giving and
acceptance of gifts and hospitality is clearly regulated – and
approval processes defined – in internal instructions and the
Baloise Code of Conduct.
As part of the compliance framework, Group Compliance works
with local compliance managers to develop Group-wide policies
and minimum standards in accordance with a risk-based approach.
The greater the business risk, the more closely the compliance
team must be involved. This includes the following tasks:
Strategic tasks
▸
Definition of the key themes and minimum requirements
in the Group Compliance Policy and the compliance con-
trolling standards
Early identification of possible compliance risks
Creation of a compliance plan
Implementation of the Group Compliance Policy and the
Group compliance controlling standards
Issuing of instructions and rules on compliance-related
matters
▸
▸
▸
▸
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
of business strategy. In addition, long-term sustainability-related
trends such as social trends or environmental and climate risks
are examined and evaluated as part of the analysis of emerging
risks. Based on the commonly used typology, the following
emerging risks have been identified:
Physical risks
▸
Environmental risks arising from the increasing prevalence
of natural phenomena such as hurricanes, earthquakes,
floods, hailstorms and wildfires
Transitional risks
▸
Impact of changing customer behaviour on the sales
channels and product range of Baloise
Changing working conditions resulting from technological
innovations such as artificial intelligence and robotics
▸
Liability risks
▸
Legal and pricing risks arising from unknown liability
issues and uncertain legal situations
Metrics and targets
Material climate-related and sustainability-related risks and
opportunities can be identified from the aforementioned com-
mitments of Baloise and their connection with the sustainable
development goals. With regard to climate change and climate
protection, the commitment to the environment should be
highlighted. The commitment to reduce CO2 emissions in business
operations and in investment can reduce physical risks and
create opportunities through the sale of innovative products and
services. In addition, the commitments made in relation to
Baloise’s customers, partners and investors help to meet the
demand for the promotion of sustainable development by Baloise.
Baloise can also help to increase sustainable development by
other companies, by sharing information and experience with
various partners on this matter. Work on developing indicators
to measure the commitments is currently ongoing.
▸
Chapter ‘Sustainable business management/
Risk management’
42
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Advice and support
▸
Providing advice and support to the Executive Committee
in connection with its compliance responsibilities
Central point of contact for employees for questions and
reports relating to the Code of Conduct
Regular training and provision of expert advice to employees
▸
▸
Scrutiny and monitoring
▸
▸
▸
Developing and monitoring appropriate compliance controls
Expert assessment of the compliance plans and the imple-
mentation of the compliance standards
Appropriate monitoring of adherence to the internal and
external regulatory / legal provisions
▸ Monitoring important legal developments
▸
Analysis of the work processes and identification, assess-
ment and monitoring of the existing compliance risks
Dealing with compliance-relevant incidents
▸
Reporting
▸
Separate reporting to the local Executive Committees and
consolidated reporting to the Corporate Executive Com-
mittee and the Audit and Risk Committee of the Board of
Directors on compliance risks and compliance controls.
www.baloise.com/compliance
www.baloise.com/compliance-controlling-standards
www.baloise.com/code-of-conduct
INFORMATION SECURITY
In an age of steadily growing cyber risks and ever more stringent
data protection regulations, Baloise attaches immense impor-
tance to information security. Baloise sees information security
as a key factor in the digital transformation and an essential
part of being able to create value for all stakeholders and
becoming the trusted choice for customers and employees who
simply want to feel safe.
Specifically, it includes the development of people with
security expertise within Baloise and continuously increasing
employee awareness through annual training. The focus is not
purely on internal company information, but also – and most
importantly – on the information and data of our customers.
The establishment of an information security governance
framework within Baloise ensures that the Group-wide approach
to information security supports corporate governance standards.
Implementing a programme spanning several years will
guarantee a structured, Group-wide approach to information
security management that is business-based, risk-focused and
continuously improved.
Baloise applies the following principles to its information
security strategy:
Risk-based approach
▸
Investment in security is carried out on the basis of threats
and weaknesses identified, the criticality of the data and
the potential harm.
Integrated security
▸ When developing new solutions, security and data pro-
tection are considered from the very beginning. This is how
we develop and operate secure services and platforms.
General framework for security
▸
The implementation of security controls is based on
established practices, which enable peer-group bench-
marking. Specifically, these security controls are imple-
mented in a large number of Group-wide penetration tests
where hackers help to expose security vulnerabilities
so that these can be closed off. This is an established pro-
cess for these tests, which ensures that measures are
continuously developed and kept up to date.
IT compliance
▸ We understand the legal and regulatory environment in
which we operate and proactively help to ensure efficient
compliance.
Security culture
▸
Baloise cultivates a culture of personal responsibility.
We promote a security-conscious culture through annual
awareness training. The information security manage-
ment system is audited each year as part of the information
security assurance programme.
www.baloise.com/it-security
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Sustainable business management
Responsibility
THE RESOURCES
At the heart of the value creation model are the six resources:
employees, customers, investors, environment, society and
partners. They are described below.
CREATING VALUE FOR EMPLOYEES
Baloise’s responsibility as an employer is manifested in its
strategy with a clear employee-oriented objective. The Company
wants to position itself as one of the most attractive employers
in its industry. To achieve this aim, it offers its staff the scope
required to contribute to its success and to develop both per-
sonally and professionally. This results in satisfied employees,
helping Baloise to become an employer of choice in the insurance
sector. To this end, we create a working environment where the
health and well-being of staff is a central concern and where
equality, inclusion and diversity are top priorities.
Responsibility as an employer also includes ensuring gender
pay equality. Baloise took part in a voluntary pay gap dialogue in
Switzerland in 2013 / 2014 and again in 2018. On both occasions
there was no significant difference in the Company’s remuneration
of female and male employees. In 2021, Baloise will carry out
another pay gap analysis. For further details see the human
resources section of this chapter.
By improving the employability of our employees, we aim not
only to increase our attractiveness as an employer but also to
create opportunities for economic growth by producing well-
trained employees. Our attractiveness as an employer is estab-
lished by means of an employee engagement survey (EES) carried
out every two years. The findings are discussed both in the
Executive Committee and in the individual teams. Every three
months, randomly selected employees are also asked to score
Baloise in terms of attractiveness. These ‘pulse checks’ also
measure Baloise’s appeal as an employer by determining what
proportion of employees would recommend it as an employer.
Baloise has been fostering a participation-based corporate
culture for many years and has continually developed this culture
over time, building on the stable foundations put in place long ago.
At Baloise in Switzerland, the concept of social partnership has a
long tradition. The Company’s employee commission (MAKO) was
founded in 1970, i.e. long before 1993, when the Swiss federal
government passed a co-determination act that gave employees
the legal right to have a say in the workplace and to be given
information on particular matters. To this day, the rights of the
MAKO go well beyond the provisions of Swiss co-determination
legislation. There is also a code of conduct, which contains the
essential ethical and legal regulations that govern employees’
behaviour. Across the Group, Baloise gets employees at different
levels involved in shaping the working environment (see also the
chapter on human resources). In doing so, Baloise secures not only
44
its own long-term viability but also the future employability of its
staff in an increasingly competitive economic environment. By
giving young people their first experience in the world of work – as
trainees, interns and temporary student employees – Baloise is
also making an investment in the future of the Company and the
employment markets of the countries in which it operates. Every
year, across the Group, Baloise trains around 260 people who are
at the start of their careers, which represents a proportion of
trainees in the workforce of 3.4 % per cent. The value that this adds,
both for these young employees and the Company, provides a solid
basis for the future and enables Baloise to create new jobs and
preserve existing ones.
Getting through the crisis together
During the lockdown in spring 2020, more than 95 per cent
of Baloise staff worked from home. Thanks to the strong
team spirit among the staff, within a short space of time
tips and tricks for home working were being compiled,
playlists shared, a platform set up where employees provide
help to other employees on a range of topics, and virtual
team coffee breaks and lunches organised. External digital
campaigns communicated the feeling of community among
Baloise employees to a wider online public.
#BaloiseIstZuhause #AlleineZusammen
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
RESPONSIBLE EMPLOYER IN THE COVID-19 PANDEMIC ERA
Early on in the pandemic, Baloise set up a Covid-19 crisis manage-
ment team of experts that has been closely monitoring the situation.
This has enabled Baloise to take action swiftly and ensure the
greatest possible level of safety for its employees at all times. The
well-being of our employees has top priority at Baloise: Within days
of the crisis beginning, 90 per cent of employees were working from
home – in many cases before the governments in the countries
concerned had officially declared a lockdown. Protective equipment,
such as masks and sanitiser, was also made available. Various
measures to ensure the cohesion and well-being of all employees
were launched by HR and the employees themselves. These include:
▸ Move for Life, physical and psychological support and the
digital campaign #AlleineZusammen (alone together)
Employees were encouraged to get active through digital sporting
activities – some of which involved raising money to provide
financial relief for local small and medium-sized businesses
struggling as a result of the Covid-19 pandemic, or to support
medical staff (Move for Life). As part of the Company’s corporate
health management, various sporting activities were offered
online and tips provided for ergonomic working at home. Employ-
ees currently also have access to psychological support in the
RESOURCE: EMPLOYEES
COMMITMENT: GREATER WELL-BEING
Resources for value creation:
▸
Focus on professional and personal development with
scope for personal initiative
▸ Modern and future-oriented working models
▸
Competitive basic salaries, fair pay, variable remuner-
ation, attractive profit-sharing programmes and
employee retention schemes
A work environment that promotes equality and
good health
A learning organisation that gives employees a say in
the further development of their professional skill set
A culture of curiosity, integrity and constructive criticism
as a basis for the creation of a comprehensive network
within Baloise
▸
▸
▸
▸
▸
▸
▸
▸
form of a hotline that offers direct contact, free of charge, to
external specialists and specially trained staff.
▸
Equipment and protection for employees working
from home
To facilitate the transition to home working, employees were
provided with technical equipment such as monitors and ergonomic
office furniture at low cost or free of charge, as well as insurance
cover for electronic equipment and, for a limited period, for children
who had to stay at home during lockdown.
▸
Chapter ‘Sustainable business management /
Human resources’
www.baloise.com/code-of-conduct
Impact of value creation:
▸
Optimal alignment between employees’ modern skill
sets and the needs of the Company
Financially secure and healthy employees
Strong sense of loyalty in the workforce, resulting in
long average periods of employment at the Company
Opportunity to establish an extensive network among
colleagues and, as a result, the chance to work in
different positions over time
Increasing the employability of Baloise employees
Among the top 10 per cent of employers in the insur-
ance sector by 2021
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CREATING VALUE FOR CUSTOMERS
Customer focus is central to the Company’s strategy. Baloise
wants to be more than a traditional insurance company and
therefore needs to take account of the wider social environment
in which its customers live. One way to achieve this is to create
‘ecosystems’ of services that go beyond the financial services
previously offered by Baloise and are positioned upstream,
downstream or completely independently of the insurance
product itself. They will help to make the interactions between
Baloise and its customers even more positive in future. New
risks (e.g. cyber risks) will be identified and made insurable,
enabling Baloise to promote innovation and the social and
economic development of corporate and retail clients.
Ecosystems for a fully integrated service offering that creates
added value
Baloise sees its ecosystems as sociotechnical systems. This
means that such a system is not based purely on technology,
but also includes people and organisations and the relationships
between them. However, the aim is always to create added value
for all through the seamless collaboration of the participants
in the ecosystem. For the customers, the service providers and
the providers of the infrastructure. Thanks to the innovations
of our Home and Mobility ecosystems, we offer our customers
products and services that complement the existing core services
(insurance, pensions and asset management) through specific
solutions or offer non-captive services. Our innovation initiatives
will join insurance and asset management & banking in becom-
ing a key pillar that we hope will make a substantial contribution
to the business and value of Baloise. The target is for these
initiatives to be creating CHF 1 billion of value by 2025.
Home ecosystem
The Home ecosystem essentially comprises all the home &
living related products and services our customers need. Movu,
Switzerland’s largest digital platform for home-moving services
and a Baloise subsidiary, provides a one-stop solution for
customers in Switzerland who are planning to move house. They
can choose suitable home contents insurance at the same time
as planning their move. And better still: Baloise will pay for a
second move if the customer regrets the move within a few
weeks. Baloise also has an equity investment in DEVIS, a Swiss
marketplace where tradespeople and cleaners can offer services
for inside and outside the home. And through its investment in
the laundry and dry-cleaning start-up Bubble Box, Baloise can
offer customers an additional carbon-neutral service. In 2020,
the Home ecosystem was extended to include a collaboration
with and investment in Batmaid, a digital platform for home
cleaning service providers. Batmaid is a solution that enables
its customers to find qualified and insured cleaners online. The
company’s integrated trust service registers workers and takes
care of payroll taxes on behalf of its customers. The cleaning
staff have the benefit of declared work and social insurance
cover. Baloise also acquired a stake in start-up firm Houzy in
2020, a digital platform where home owners can make use of
various online tools and checklists in order to maintain an
overview of their home at all times, including any need for
renovation. Houzy also enables users to integrate services
provided by other partners. Customers in Switzerland thus have
an ecosystem of services based around the home and living,
which makes their lives considerably simpler.
But it’s not only the lives of its retail customers that Baloise
is simplifying with its ecosystem services. Business customers
and partners also benefit. In Belgium, Baloise is investing in
two start-ups – Keypoint and ImmoPass – and thereby simpli-
fying property management and technical property inspections.
Baloise and its Belgian start-up Keypoint are developing a new
digital assistant that is designed to simplify the work of property
managers in Belgium. The increased complexity of the respon-
sibilities and a big increase in the number of apartment blocks
in recent years have resulted in a shortage of professional
property managers in Belgium. In a bid to address this, Keypoint
has developed a digital platform that brings all relevant parties
together and helps them to carry out property management
tasks, from finding a reliable tradesman to claims management
and obtaining legal advice.
In Belgium, Baloise has also invested in Walloon start-up
ImmoPass, a service provider in the field of technical property
inspections. Potential buyers or property management companies
can use the ImmoPass system to assess the technical condition
of their building in order to avoid unexpected renovation costs
– for example if there are problems with damp, instability, the
roof being in a poor condition or the presence of asbestos. The
most recent investment in Rentio rounds off the range of Home
services. Rentio digitalises, centralises and automates all aspects
of the rental process. Property management companies, landlords
and tenants can use the frictionless functionalities of its online
platform or app to enter into contracts, monitor payments,
exchange documents and sort out everyday problems such as a
broken radiator or a routine boiler service.
Mobility ecosystem
Mobility is one area of our lives that has changed dramatically
over recent decades. Think for example of the technological
advances around self-driving cars and of changes in user
behaviour – moving away from car ownership in favour of the
sharing economy. Greater environmental awareness is an
important aspect in these trends.
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Baloise Group Annual Report 2020
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Responsibility
Through its own start-ups such as FRIDAY in Germany and Mobly
in Belgium, Baloise is developing innovative vehicle insurance
products and non-insurance services that cater to these chang-
ing needs.
TWIICE’s leading exoskeleton can be used not only to revolu-
tionise the lives of paraplegics, but also to help people retain
their mobility as they get older – an aspect likely to become
increasingly important in light of demographic change.
The FRIDAY+ECO product developed in partnership with
respected climate organisation myclimate enables FRIDAY
customers to make their own contribution to climate protection
by offsetting the CO2 emitted by their cars. The climate protection
projects chosen meet the highest standards (Gold Standard, CDM,
Plan Vivo).
Another company in the Mobility ecosystem is aboDeinauto,
which leases vehicles for a fixed monthly fee and is the first
subscription provider to systematically focus on used cars. Its
concept is based on close collaboration with car dealers who gain
the opportunity to get involved in the rapidly growing market of
car subscription services through aboDeinauto. Better use of
existing vehicles also helps to conserve resources.
Another start-up concentrating on the optimum use of vehicles
and eco-friendly servicing and maintenance is Ben Fleet Services.
Ben offers fleet managers and operators comprehensive and
flexible services for their vehicles. Its portfolio of services, which
can be used for individual vehicles or entire fleets, includes on-site
cleaning, refuelling and charging, maintenance and repairs, and
delivery and collection. The company looks after not only cars
(both conventional and electric) but also vans, buses and trains,
bicycles and e-scooters. The water-free cleaning of the vehicles
on site is just one example of how this service benefits the
environment.
Baloise is also working with start-ups in Switzerland such as
Stratos (formerly Carhelper) and gowago to extend its service
offering in the Mobility ecosystem beyond insurance products.
Gowago has developed the next generation of car leasing platform
that enables customers to lease a new or used car simply, trans-
parently, conveniently and at a low price without leaving the house.
The partnership with Baloise means another novel benefit for
customers: all vehicle costs can be bundled together with the
monthly lease payment in Switzerland’s first non-captive all-in-one
leasing service for used cars. And to meet the growing customer
demand for carbon offsets and ways to be green and protect the
environment, gowago works with carbon-connect AG to reduce its
carbon footprint. For each new gowago customer, five trees are
planted in a developing country. The tree planting scheme provides
jobs for the local population as well as making a positive contri-
bution to combating climate change. Gowago aims to show that a
young company can be environmentally responsible, even if it
operates within the automotive industry.
However, mobility doesn’t always have to mean cars. Through
its partnership with exoskeleton manufacturer TWIICE, Baloise is
demonstrating a broader understanding of the concept of mobility.
Plants, scents, and appreciation for a high quality of life
Dandelion is a dementia care centre in Basel, Switzerland,
that has been a customer of Baloise for more than 20 years.
The managers and staff at Dandelion care for their residents
around the clock, day in, day out. Care that often goes well
beyond the call of duty. Using aromatherapy and phyto-
therapy, they are trying to find new ways of maintaining a
high quality of life for their residents, especially during the
COVID-19 pandemic. This would be impossible without the
staff and their incredible motivation. Showing appreciation
for employees is a top priority for Dandelion – and for
Baloise too.
www.baloise.com/dandelion
47
Safety for our customers in times of crisis
Baloise has implemented a variety of measures to ensure the
safety of its customers, including during the COVID-19 pandemic,
demonstrating that Baloise is always there for its customers. In
addition to paying out claims worth millions of francs, Baloise
has supported its stakeholders and helped them through this
exceptional situation. Examples include the extension of payment
periods for rent, or rent waivers, and payment holidays for
insurance premiums. The support package also included free
product upgrades such as free accident protection for children
in Germany and Belgium for a limited period, and the free
extension of employer’s liability insurance for medical personnel
to cover new COVID-19-related tasks. Free legal advice was
provided for business customers in Germany and for retail
customers with home contents insurance in Switzerland. Other
examples included support for supply chains in Germany until
30 June 2020 through premium-free insurance for inhouse
transport services for certain companies, as this was the only
way they could get goods to their customers, and discounts on
premiums in Luxembourg for certain cover for SME customers,
as this sector was particularly hard hit by the COVID-19 restric-
tions. A publicity campaign in collaboration with existing
partners enabled customers to send a selection of personal
images to friends or family members, enabling them to stay in
touch in spite of the enforced distance.
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Baloise shares the values of its customers
Baloise has a strategy of seeking out customers who are cautious
and careful, and to whom safety and security are as important
as they are to Baloise. This strengthens the collective insurance
community. But it is not just about providing security by cover-
ing a particular risk; it is also about giving customers everyday
peace of mind. Baloise wants to do everything it can to help
make customers’ broader environment safer. The customers
themselves also get a say, through customer forums, panels
and surveys.
The opinion of our customers is important
The Net Promoter Score (NPS) survey conducted in Switzerland
since 2016 actively solicits the views of end customers (retail
and corporate) about their experience of Baloise. The survey is
carried out automatically and immediately every time a customer
has been in contact with Baloise, and randomly selected
respondents are asked to rank Baloise relative to its competitors.
Positive feedback is forwarded directly to the relevant employee,
thereby providing additional motivation. Negative feedback is
automatically sent to the employee’s line manager who then
contacts the customer directly. The 360° customer feedback
system makes Baloise more human to the end customer and
provides a very direct means of communication for customer
relationship management.
It has been proven that customers who have had a negative
experience become more satisfied and more loyal than ever before
if their complaint is handled sensitively and courteously by
Baloise. In those moments when ‘it really matters’, we can prove
to our customers that we are a trusted partner. That is why Baloise
is open and is extremely grateful to its customers for all customer
feedback – good or bad.
The customer feedback is also discussed with the teams
and, using the latest technology, consolidated measures are
developed and implemented to improve the customer experience
in a lasting way.
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Energy pioneer in Upper Franconia
Münch Energie, based in Rugendorf in the Bavarian region
of Upper Franconia, has been a customer of Baloise in
Germany since 2007 and is rigorously driving forward the
energy transition. It has been creating energy solutions with
electricity generated from photovoltaic systems since 2004.
Münch Energie creates custom energy concepts for compa-
nies and then builds them their very own independent power
supply. Our long-standing customer thus helps to end
customers’ dependence on fossil fuels and contributes to
the conservation of resources. Münch Energie is powered
by the motivation and conviction of its employees – the
mission of becoming independent from fossil energy sources
is embedded in the corporate culture. The customers of
Baloise are also a source of inspiration: Baloise aims to
harness their conviction to achieve great things and con-
tribute to a decent future for all.
www.baloise.com/muenchenergie
RESOURCE: RETAIL AND CORPORATE CUSTOMERS
COMMITMENT: INCREASED CUSTOMER SATISFACTION
Resources for value creation:
▸
▸
Strong insurance collective
Identical underlying values regarding safety and
responsibility shared by customers and Baloise
Customer involvement through participation in
forums, panels and surveys
Ongoing simplification efforts in areas of relevance
to customers
▸
▸
Impact of value creation:
▸
Safer lives thanks to a strong insurance collective that
continuously reinforces its resilience
Baloise strengthens its customers’ sense of security
to make them feel safer and more secure in their
everyday lives
Transparent and simple insurance products that can
reflect customers’ social and environmental values
Negative customer feedback is used to improve the
customer experience
One million new customers by 2021
▸
▸
▸
▸
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CREATING VALUE FOR SHAREHOLDERS AND INVESTORS
The capital that is made available to Baloise by its shareholders
and investors is invested efficiently and in their interests. Risk
management, which forms an integral part of our strategic man-
agement policies, makes a significant contribution to the position-
ing of the Baloise Group. As a European insurer with Swiss roots,
Baloise possesses a strong balance sheet and strong operational
profitability, which have been optimised in terms of the risk-bear-
ing capacity and the earnings potential derived from the business.
Baloise’s risk management approach involves managing both risk
and value at the same time. Its risk model is based on innovative
standards so that it can keep its promise to shareholders and
investors. This has enabled Baloise to pursue an attractive and
sustainable dividend policy for a number of years now. Together
with the Company’s efforts in the area of sustainable development,
these factors make Baloise not only an attractive and sustainable
investment target but also a responsible one. Its very strong
capital base was acknowledged again by the ratings agency
Standard & Poor’s last year, which confirmed the credit rating of
‘A+’ with a positive outlook. Standard & Poor’s awarded this credit
rating in recognition of Baloise’s excellent capitalisation – which
is comfortably above the AAA level according to the S&P capital
model – as well as its high operational profitability, robust risk
management and solid competitive position in its profitable core
markets. The outlook for the German business unit Basler Sach-
versicherungs-AG was upgraded from ‘stable’ to ‘positive’ in light
of its improved profitability.
▸
Chapter ‘Sustainable business management/
Risk management’
www.baloise.com/rating
www.baloise.com/risk-management
www.baloise.com/investors
RESOURCE: BALOISE’S INSTITUTIONAL AND PRIVATE INVESTORS AND SHAREHOLDERS
COMMITMENT: ATTRACTIVE, RELIABLE AND RESPONSIBLE INVESTMENT
Impact of value creation:
▸
Strong total shareholder return as a result of attractive
and reliable dividends and optionality thanks to
innovation as a source of future value
One of the most profitable non-life portfolios in
Europe, a life insurance business that is well positioned
to weather a challenging interest-rate environment,
and steady and reliable contributions from asset man-
agement and banking
Availability of a solid basis of facts for investment
decisions at all times
Generation of a cash upstream of CHF 2 billion to
Bâloise Holding by 2021
▸
▸
▸
Resources for value creation:
▸
A broadly diversified shareholder base, including
institutional investors from Europe and the US (most
with a long-term investment horizon)
Open and transparent communication with all capital
market participants
Implementation of the ‘Simply Safe’ strategy, which
focuses not only on customer selection and expert
staff, but also on the commitment to be an attractive,
sustainable and responsible investment target for
shareholders and investors
Defined innovation strategy
▸
▸
▸
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CREATING VALUE FOR THE ENVIRONMENT
The environment is also a resource in our value creation model.
Baloise’s environmental policy focuses on promoting renewable
energies, developing infrastructure in a way that adds value
and taking action to combat climate change. The Company uses
natural resources prudently and responsibly. This responsibility
relates to its own energy requirements but also extends to its
investments and the procurement of products and services. As
Baloise is an insurance company, it does not produce any goods.
At its sites, it predominantly requires energy for electricity and
heating. Baloise also monitors the impact of travel, both business
trips during working hours and journeys to and from work. CO2
emissions have been continually reduced over a number of years.
The Company’s focus on energy efficiency, particularly in its IT
infrastructure and buildings, plays a key part in this. Employees
have the option to use public transport wherever possible and
in some cases benefit from subsidised travel. They also separate
their waste for recycling.
Baloise also aims to raise employees’ awareness of
environmental issues and provides them with information on
relevant subjects in order to equip them with knowledge of
possible alternative actions or practices that are environmen-
tally sustainable.
At its headquarters in Basel in Switzerland, Baloise is a
member of the ‘environmental platform’ initiative in the Basel
region. This platform facilitates the sharing of knowledge among
businesses and supports climate protection and sustainable
development in the local region. Baloise also invests in sustain-
ably built office buildings in Switzerland, Luxembourg and
Belgium. The annual Group-wide environmental audit within
the annual report provides information on Baloise’s progress
regarding its environmental footprint and has been published
since 1998.
▸
Chapter: ‘Sustainable business management/
The environment’
www.klimaplattform-basel.ch
Promotion of electric-powered vehicles and renewable energy
One way in which Baloise is encouraging the use of electric-pow-
ered vehicles is the gradual transition of its own vehicle fleet to
electric. It also provides charging facilities for employees to use
while they are at work, and for tenants at the properties it owns.
In 2020, three out of four vehicles in the Baloise Bank SoBa
fleet were replaced with electric versions.
Baloise has also launched a project to promote charging infra-
structure in its rental properties in order to support the ‘e-Mo-
bility roadmap 2022’ of the Swiss Federal Office of Energy, whose
target is for 15 per cent of all new vehicles licensed to be electric
by 2022.
Within the next few years, Baloise aims to install charging
stations for electric vehicles in the underground parking spaces
of its properties. This will facilitate access to forward-looking
modes of transport and help to reduce transport-related carbon
emissions. Tenants will be able to charge their electric vehicles
in their own parking space at low cost. The project is still in its
early stages, having launched in 2020 with one test location at
a Baloise property in Basel. In 2021, Baloise will install charging
stations at additional test sites to gauge demand among its
customers. As soon as the level of demand has been established,
further steps will follow.
Baloise’s environmental engagement encompasses support
for greater use of electric-powered vehicles in conjunction with
support for renewable energy. Baloise has its own charging
stations at various sites, which can be used free of charge by
employees and customers.
Over the course of 2020, Baloise converted its power supply
to electricity from purely renewable sources at all its sites in
Germany. The Company now gets all its electricity from 100 per
cent renewable sources in Switzerland, Germany, Belgium and
Luxembourg in the buildings where it controls its own electricity
mix. For transparency, it is important to stress that this only
applies to electricity. Heating energy is excluded and does not
come entirely from renewable sources. The positive outcome of
a feasibility study on the installation of a solar power system at
the site in Bad Homburg, Germany represents a further milestone
in promoting the use of renewable energy. The implementation
of this solar plant will begin in 2021.
The Environment chapter contains more information on the
optimisation of heating energy, further operational optimisations
of the Baloise office buildings at all its sites and Baloise’s envi-
ronmental management.
▸
Chapter: ‘Sustainable business management/
The environment’
51
climate strategy, as Baloise is aware that carefully selected
investments can indirectly help to protect the climate. To
emphasise its commitment, Baloise signed up to the Principles
of Responsible Investment (PRI) in 2018.
▸
Chapter ‘Sustainable business management/
Responsible investment’
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Protecting the climate through finance flows
Baloise is committed to environmental protection and recognises
its indirect influence on the environment and society through
its investment policy. This is why Baloise has adopted a respon-
sible investment (RI) policy for insurance assets and external
customers’ assets. The RI policy sets out the rules for the inte-
gration of environmental, social and corporate governance (ESG)
criteria into Baloise’s investment decisions.
More than 80 per cent of the assets are managed under the
RI policy. As well as insurance assets and third-party products,
this also includes alternative assets such as senior secured loans
(SSL). At the end of 2020, the Company looked at including the
real estate managed by Baloise. This proposal will be fleshed
out and communicated in 2021. Further extensions of the RI
policy are planned in the area of active ownership and a dedicated
RESOURCE: ENVIRONMENT
COMMITMENT: CLIMATE PROTECTION
Impact of value creation:
▸
▸
Reducing the carbon footprint of business activities
Raising awareness of environmental issues and
educating staff about relevant topics
Conserving resources by reducing water consumption,
energy consumption and waste
Promoting renewable energies
Combating climate change through responsible
investment
▸
▸
▸
Inputs for value creation:
▸
▸
Environmental audit since 1998
Commitment to use natural resources in a responsible
way and to reduce the carbon footprint of the
business on an ongoing basis
Climate and real-estate policy in connection with
responsible investments
Increased demand for renewable energies within our
energy mix
Signing of the Principles of Responsible Investment
(PRI) in 2018
▸
▸
▸
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CREATING VALUE FOR SOCIETY
Baloise believes it has a responsibility to society in its role as
a corporate citizen and conducts its business activities in
accordance with the relevant legal provisions and in compliance
with the basic rights enshrined in the constitution of the Swiss
Confederation. The approval requirement enshrined in Swiss
financial markets legislation, which demands an assurance of
proper business conduct, stipulates among other things that
the approved institutions and their key decision-making bodies
must comply with all applicable laws (statutes, regulations etc.)
and have an organisation that ensures such compliance. The
Swiss Financial Market Supervisory Authority (FINMA) monitors
compliance with this approval requirement, which must be
fulfilled at all times.
The business model of Baloise, which – among other
things – protects customers from falling into financial distress,
plays an important part in maintaining society’s prosperity.
At the same time, it prevents potential inequalities as a result
of financial circumstances.
Baloise’s responsible investment policy rests on three
strategic pillars that have environmental and social effects
and an impact on good corporate governance: excluding
producers of controversial weapons and companies that gen-
erate 30 per cent or more of their revenue from coal, integrating
ESG (environmental, social and corporate governance) factors
into the investment process by excluding companies with an
ESG rating lower than B (based on data from MSCI Ltd.) from
the investment universe of Baloise, and exercising voting rights
held by Baloise in Swiss companies.
▸
Chapter ‘Sustainable business management/
Responsible investment’
For many years, Baloise has also been a committed advocate
of voluntary work. In 2015, Baloise became a signatory to the
declaration by economiesuisse (the umbrella organisation
representing Swiss business) and the Swiss Employers’ Asso-
ciation. The declaration requires companies to offer flexible
working conditions and working time models that enable
employees to participate in voluntary work. Baloise not only
encourages its employees to engage in voluntary activities by
holding annual events but it also meets its own responsibility
to society as a commercial organisation. Six Baloise employees
in Switzerland are currently members of cantonal parliaments,
and many others are involved in politics at local level. Further-
more, the Company creates and preserves jobs that add value
and it pays taxes from its profits that help to fund the public
sector. By generating profits, Baloise is also able to be an active
partner in many areas of society. Baloise runs a number of
charitable projects and initiatives in its various national sub-
sidiaries that benefit society and the environment. These can
be roughly divided into the following areas:
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▸
▸
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Donations to community-based organisations
Partnerships with environmental organisations
Supporting health and education
Innovation and safety
Donations to community-based organisations
Baloise has a long tradition of involvement in charitable causes
at all its sites. Its activities are determined by local circumstances
and the causes selected by our employees. In 2020, additional
support was provided to various organisations across all sites
to assist the broader community, particularly people in need,
during the COVID-19 pandemic and its aftermath.
Moving together for a good cause
The Baloise Challenge ‘Move for Life’ was launched in 2020
in order to support various community-based organisations
at the locations where we operate in Switzerland, Germany,
Belgium and Luxembourg during the COVID-19 pandemic
while at the same time strengthening the sense of belong-
ing among Baloise employees and helping them to improve
their health. By clocking up kilometres through sports
activities, employees raised a total of around CHF 37,000
(approx. EUR 34,000) for good causes.
www.baloise.com/move-for-life
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Other campaigns that were carried out in connection with the
COVID-19 pandemic in 2020, plus activities relating to Baloise’s
corporate social responsibility that are unrelated to the COVID-19
pandemic and will be continued in the future:
▸
Baloise for Life – Baloise for Life is a week of charity activ-
ities that takes place in Belgium every year. 2020 was
the event’s seventh year. More than EUR 92,000 was raised
and donated in full to more than 30 charitable organi-
sations supported by the Music for Life and Viva for Life
initiatives.
Better Together Charter – An innovative way of generating
leads for broker firms. Under the ‘Better Together’
charter, brokers promise to make a donation to charity for
each lead they receive from the charitable organisation.
Baloise brokers in Belgium can sign up to the charter volun-
tarily. Under the charter, four charitable organisations
and Baloise in Belgium undertook to: invest in more than
1000 m² of nature conservation land (Natuurpunt / Natag-
ora), conjure up 700 smiles on the faces of seriously ill chil-
dren (Cliniclowns), install 15 alcohol testing stations
(Emilie Leus fund) and fund holidays for ten children with
burn injuries (Pinocchio). 300 insurance brokers have
already signed up to the charter and are working with
Baloise to achieve these targets.
Voluntary activities carried out each year – e.g. walks
with people with disabilities (JustForSmiles), supporting
an animal centre in Basel, and PluSport Tag, a major
sports festival for people with disabilities in Magglingen,
Switzerland.
Charity Christmas concert – In Germany, a Christmas
concert for all current and former employees, along with
their families and friends, has been held in Hamburg
for more than 30 years. The proceeds from the event sup-
port the operations of charitable initiatives in Hamburg.
▸
▸
▸
Partnerships with environmental organisations
The environment has a major impact on society and on people’s
well-being. That is why we support environmental organisations
and actively work to protect the environment ourselves.
UNESCO biosphere reserve Entlebuch – Each year,
▸
Baloise offers its employees the opportunity to volunteer
during work time at the UNESCO biosphere reserve in
Entlebuch, Switzerland.
54
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▸
Tierschutz beider Basel (TBB) – Each year, Baloise
employees have the opportunity to volunteer at the TBB
animal rescue centre in Basel, Switzerland, in work time.
Natuurpunt / Natagora – Baloise in Belgium provides
financial support to Belgium’s largest nature conservation
organisation (through the mechanism of the Better
Together Charter) and through volunteering by Baloise
employees during their work time. The organisation
works to conserve nature and biological diversity. In part-
nership with Natuurpunt / Natagora, Baloise offers
around 20 organised walks a year for families in Flanders
and Wallonia.
Drivolution – Drivolution is a Baloise subsidiary that
helps corporate clients to reduce their transport budget.
Drivolution focuses on prevention in order to reduce
fuel consumption and insurance costs.
Natur&ëmwelt – In Luxembourg, Baloise has been work-
ing with the Natur&ëmwelt (nature & environment)
orga nisation since 2015 and employees can get actively
involved in its campaigns.
etika – In 2020, Baloise Luxembourg signed a three-year
partnership agreement with etika with the aim of imple-
menting a common approach to CSR. Under the arrange-
ment, Baloise plans to launch insurance products that
take account of sustainability aspects in environmental,
social and governance matters. Baloise and etika will
carry out various joint awareness-raising campaigns,
including the publication of newsletters and the
organisation of conferences, etc.
Volunteer Day – Since 2019, a ‘volunteer day’ has been
held across all German locations. As part of this event, all
employees are allowed to spend one full day of their
work time volunteering for a social or environmental cause.
Baloise Group Annual Report 2020
Sustainable business management
Responsibility
Crossing the Alps for a good cause
Three regional directors and sales partners of Baloise in
Germany, Michael Gilmer, Roland Lais and Markus Messmer,
crossed the Alps in eight days in summer 2020. Their
mammoth hike raised EUR 13,000 for three children’s
charities, and the final amount raised was doubled by
Baloise in Germany.
www.baloise.com/alpenueberquerung
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▸
▸
Ring gegen Krebs – We have been raising money (and
making donations of our own) for children with cancer and
their families in Germany for more than 30 years.
UZA – Supporting research into immunotherapy against
cancer in Belgium.
Cliniclowns & Pinocchio – Through the Better Together
Charter, Baloise in Belgium puts smiles on the faces of
700 seriously ill children (Cliniclowns) and funds holidays
for ten children with burn injuries (Pinocchio).
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Supporting health
Baloise’s health initiatives are not restricted to the current
COVID-19 crisis. In normal times too, the Company supports
organisations that aim to make the lives of sick people a little
more pleasant and to advance research in these areas.
▸
Fondation Cancer – Baloise has been helping to fund
cancer screening and the scientific research work of the
Fondation Cancer in Luxembourg for more than ten years.
ALAN Maladies Rares Luxembourg – Baloise has supported
the ALAN Association for Rare Diseases in Luxembourg
since 2017.
Picken Doheem & BioneXt LAB – Partnership with and
support for a next-generation biomedical analysis labora-
tory in Luxembourg.
Fédération Luxembourgeoise d’Athlétisme (F.L.A.) – Baloise
Luxembourg also supports and sponsors the Luxembourg
athletics association; a perfect way to promote sport,
particularly among young people.
CMCM – Baloise Luxembourg has been supporting Caisse
Médico-Complémentaire Mutualiste (CMCM) in the area
of B2B solutions for business since 2018.
▸
▸
▸
▸
Education, innovation and safety
Baloise firmly believes that education can prevent many ills.
It can help people to help themselves out of crisis situations or
enable them to avoid a crisis situation in the first place.
▸
ANESEC & ANELD – Partnership with networks of business
and law students at the University of Luxembourg.
Université du Luxembourg – Partnership with the University
in Luxembourg in the form of scholarships offered by
Baloise in Luxembourg to up to five students, and for stu-
dents in their first, second or third year of a bachelor’s
degree in management at the university.
University of Applied Sciences and Arts Northwestern
Switzerland (FHNW) – Partnership and financial support to
help with the delivery of innovation and sustainability
workshops for the development of ideas with students in
the north-west of Switzerland.
Baloise Digital Scouts – The Baloise Digital Scouts aims to
raise awareness across society about digitalisation.
Experts from Baloise volunteer their time and offer free
talks, workshops and display stands on subjects such
as cyber security, smart home and media literacy for employ-
ees, parents and schoolchildren.
www.baloise.com/digitale-pfadfinder
Donation of IT equipment – All equipment that is not sold
to employees at discounted rates is, where possible,
donated to schools and charities. Baloise is thereby facil-
itating access to information and enabling children
and young people in particular to benefit from a better and
more high-tech education. In Switzerland, Baloise was
involved in more than 20 donation projects in 2019 and
2020, giving away more than 300 laptops and 130 moni-
tors to various institutions such as schools and the Basmati
Association. In Belgium, more than 1,300 items of equip-
ment – including monitors and laptops – have so far been
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donated to 39 different schools and the DigitalFor Youth
organisation. In Germany, equipment that is no longer
required is reconditioned by AfB, an organisation that
provides employment for people with disabilities, and
remarketed with a guarantee of up to three years. The
cooperation with AfB generates great added value, as
it creates jobs for people with disabilities and at the same
time conserves resources. In Luxembourg, used equip-
ment was sold to employees and the proceeds of
EUR 10,000 donated in full to the ALAN organisation.
Engage – In 2019 and 2020, Baloise in Switzerland led
workshops with young people in connection with the
‘Verändere die Schweiz!’ (Change Switzerland) campaign
organised by the Swiss Federation of Youth Parliaments.
The aim of the workshops was to develop new ideas,
challenge political realities and propose improvements,
which are then submitted via the engage platform.
Baloise will be supporting engage again in 2021.
Spicker – Baloise in Switzerland has been supporting
Spicker, the research tool for schools and higher educa-
tion, since 2019. The tool is based on an open source
archive for projects and academic papers and promotes
networking between research and business.
Business Weeks – Each year, Baloise supports the
business weeks organised by the Basel Chamber of Com-
merce in Switzerland, which teach high school pupils
about business and offer them a business-related learn-
ing experience through teamwork.
InnoPrix of Baloise Bank SoBa – Every year since 1987,
the Baloise Bank SoBa foundation has awarded the Inno-
Prix for the sustainable promotion of trade and industry
in Solothurn, Switzerland. The award focuses on innova-
tive projects that offer added economic value for the
region and contribute to research and development or
help new technologies to make the leap from one sector
to another. In addition to the economic aspects, ideas
must have a community-based benefit.
Emilie Leus foundation – Baloise supports the ‘Fonds
Emilie Leus’ foundation that raises awareness around the
subject of driving under the influence of drugs or alcohol.
since the end of 2019. It also holds conferences and runs cam-
paigns in partnership with the etika organisation to educate its
employees and customers about sustainability topics and
promote a sustainable lifestyle.
Selection of Baloise’s sponsorship activities
Baloise also promotes the cultural diversity of society through
its sponsorship activities. For example, the Company has pro-
moted art through the Baloise Art Prize for more than 20 years.
Every year, this prestigious accolade is awarded to two talented
young artists at the Art Basel fair. The winning works are acquired
by Baloise and donated to two museums that each mount an
exhibition devoted to one of the artists. These are currently the
Hamburger Bahnhof museum in Berlin and the Musée d’Art
Moderne (MUDAM) in Luxembourg. In addition, Baloise maintains
a long-standing collection of artworks that can be seen not only
by employees but also by the public at two exhibitions in the
Art Forum at the Company’s headquarters. These exhibitions
are changed each year.
▸
Chapter ‘Sustainable business management/
Commitment to art’
Since 2013, Baloise has been the presenting sponsor of Baloise
Session, a prestigious music festival in Basel with an intimate
club-like setting in which the audience sit at tables. Baloise
Session is an important cultural event that enhances the repu-
tation of the city of Basel. In 2020, restrictions due to the
COVID-19 pandemic meant that the concerts of the Baloise
Session were held in the virtual format ‘Baloise Session@home’.
In the spring of 2020, Baloise Session presented its first live-
streamed concert on Facebook with Baloise. A total of ten concerts
were performed in this way. The new format was created in
response to the restrictions imposed on all concert organisers
in the wake of the COVID-19 outbreak. It meant the cultural event
was able to go ahead despite the restrictions and Baloise was
able to support the event organisers during this difficult time.
In the area of sport, Baloise has been a sponsor of the FC
Basel football club for a number of years. The illustrious football
club was established in 1893 and is now one of Switzerland’s
most successful teams.
▸
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▸
▸
▸
Baloise in Luxembourg has also been offering a corporate social
responsibility (CSR) fund in its life insurance product portfolio
In Belgium, Baloise is a major sponsor of cycling. The
Company provides financial backing to Sport Vlaanderen-Baloise
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and Baloise Trek Lions, two professional cycling teams for young
up-and-coming riders that concentrate on the Benelux races on
the pro tour circuit and the international calendar for professional
cycling teams in Europe. The teams’ overriding objective is to
provide professional support for talented young riders.
In Belgium, Baloise also sponsors the Baloise Belgium Tour,
a racing event similar to the Tour de France but on a smaller
scale, and held in Belgium. In addition to cycling, Baloise also
sponsors football in Belgium. Baloise in Belgium sponsors the
two well-known Belgian teams KAA Gent and Standard Liège.
In the area of arts and culture, Baloise encourages cultural
dialogue among the public through the Noordstarfonds in
Belgium. The Noordstarfonds is a charitable organisation run
by Baloise in Belgium that was established in the middle of the
20th century to promote art, culture and the Dutch language
among the Flemish population. This non-profit organisation has
its own concert hall, the Handelsbeurs, in Ghent. The Noord-
starfonds currently focuses on promoting various music genres
and creating a bridge between these genres.
In Luxembourg, Baloise signed a three-year partnership with
the Skoda Tour de Luxembourg organisation in 2020 to promote
cycling – a very popular sport in the Grand Duchy – at national
and European level. Baloise Luxembourg is thus one of the major
partners of the Skoda Tour de Luxembourg and the sponsor of
the yellow jersey for the winner of the overall classification.
Since 2018, Baloise Luxembourg has been one of the main
sponsors of the Rockhal, the largest concert hall in the Grand
Duchy of Luxembourg.
Corporate social responsibility in the COVID-19 pandemic era
In times of crisis, Baloise shows solidarity and supports society
with various campaigns, events and other activities – acting in
accordance with its deeply held conviction that adversity can
only be overcome together.
▸
Service platform now-together – The now-together plat-
form in Switzerland offers small businesses a forum to
present their goods and services while social distancing
restrictions are in place. The aim of the collaboration is
to support business and present a comprehensive range
of offers (from restaurant vouchers to voluntary work).
▸
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▸
▸
▸
As a premium partner, Baloise provides financial and
technical support for the platform.
Foundation platform ‘Basel schafft(s) zämme’ – Baloise
provides financial backing for the foundation platform
‘Basel schafft(s) zämme’ (Basel can do it together). The
foundation of the trade and industry association sup-
ports small and mid-sized businesses in Basel with grants
of up to CHF 4,000 a month.
COVID-19 loans – In Switzerland, Baloise Bank SoBa is
assuming the role of funder for the federal government’s
COVID-19 loans. Around 300 loans have already been
granted with a total volume of CHF 30 million. The federal
government assumes 100 per cent of the default risk for
these loans.
‘1,000 thank yous’ campaign – In connection with the
‘1,000 thank yous’ campaign run by Baloise from 15 May
to 7 June, the Company gave away 1,000 vouchers that
could be used to make a purchase from a local small busi-
ness in Switzerland. The vouchers were purchased
directly from Baloise’s SME customers and then given to
private individuals who could gift it to their personal
COVID-19 hero, thereby expressing appreciation and sup-
porting a local business at the same time.
B-Tonic Facebook campaign – During the weekly Face-
book Live sessions by B-Tonic, a Baloise subsidiary in
Belgium that focuses on physical and mental health,
health experts are on hand to offer free tips and advice.
Activities included an eight-week challenge entitled
‘Strengthen your mental power’.
‘Buffalo Challenges’ and charity event with the KAA Gent
football club – In Belgium, the partnership with KAA Gent
football club gave rise to initiatives such as the ‘Buffalo
Footshake’ and the ‘Buffalo Block Challenge’. Baloise also
sponsored a virtual football match organised by KAA
Gent, in which eminent Belgian virologists took part.
Spectators could donate money and the proceeds went to
the Digital4Youth organisation.
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▸
Fondation Autisme – Baloise Luxembourg supported Fon-
dation Autisme Luxembourg by asking it to bake local
specialities as gifts for its employees and its general and
principal agents. Baloise has been supporting the
foundation in various ways and with various campaigns
for many years.
The Baloise companies outside Switzerland also play their
part in social, sporting and cultural life in their regions by
supporting numerous institutions and events. Some of
the Baloise activities and initiatives that enrich sociocul-
tural life are listed here:
WEBLINKS TO THE ACTIVITIES OF THE NATIONAL
COMPANIES
▸
Baloise Group and Switzerland
www.baloise.com/sustainability
www.baloise.ch/de/ueber-uns/engagement
Belgium
www.baloise.be/nl/over-ons/csr-en-sponsoring
Germany
www.basler.de/de/ueber-uns/nachhaltigkeit
Luxembourg
www.baloise.lu/sponsorship-engagement
▸
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RESOURCE: SOCIETY
COMMITMENT: VALUED MEMBER OF SOCIETY
Inputs for value creation:
▸
Corporate social responsibility activities with a focus
on environmental, social and education projects
Promotion and support of volunteer work (social, envi-
ronmental, political)
Baloise Art Prize / promotion of art and access to art
(preserving culture, fostering education)
Strong compliance as a core element of corporate
governance (e.g. code of conduct)
Responsible investment policy
Sponsorship
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58
Impact of value creation:
▸
▸
▸
Ensuring knowledge transfer (e.g. digitalisation)
Promoting education and volunteering
Ensuring a solid and trust-based relationship between
the business sector and the public
▸ Maintaining a strong community with a sense of
solidarity
Enabling communities to improve their infrastructure
thanks to engagement from Baloise
Investing in industries that are sustainable and
important for society
Promoting cultural diversity
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Baloise Group Annual Report 2020
Sustainable business management
Responsibility
CREATING VALUE FOR PARTNERS
The sixth and final resource of the value creation model are
partners. Baloise has a broad network of partners with which
it maintains cooperative relationships. Its links with different
partners, such as innovation partners, start-ups, outsourcing
partners, suppliers, brokers and agents, form a network that
unlocks synergies, promotes knowledge transfer and promises
success through mutual benefits. In addition to partnerships in
Switzerland, which mainly revolve around innovation, the
Company maintains partnerships in Germany and Belgium,
primarily with agents and brokers. This pooling of expertise
enables Baloise to keep development times very short and
quickly offer its customers new, innovative products that are
tailored to their needs.
To ensure that our suppliers and outsourcing partners also
comply with our sustainability principles, we integrate the
approval of our vendor code of conduct by the relevant partners
into our processes. The code includes provisions on conflicts of
interest, gifts & hospitality, environmental aspects, procurement
ethics, freedom of association, child labour, human rights, health
& safety, discrimination and procedures for reporting violations.
www.baloise.com/vendor
Baloise would also like to make sustainability a more integral
part of its work with innovation partners and start-ups, too. When
signing up to the Principles for Responsible Investment (PRI) in
2020, innovation partner Anthemis Capital Managers Limited
gave a clear commitment to sustainable development, which
Baloise strongly supports. Other examples of partners that work
with Baloise and actively promote sustainable development
include the Switzerland start-ups TWIICE and Bubble Box.
▸
Chapter ‘Sustainable business management/
Responsibility/Creating value for customers’
Partnership for sustainable development
The purpose of the collaboration with etika in Luxembourg
is to help Baloise in Luxembourg to integrate sustain ability
into various areas of its business. Employees and cus-
tomers receive training to raise their awareness about
social and environmental issues, and products are
developed that address sustainability concerns.
For Baloise, collaborating with partners in the area of
sustainability is essential. Synergies and expertise can
be used to drive forward the shared goal of sustainable
development within society and business.
www.etika.lu/etika-kooperiert-mit-Baloise-Assurances
Partnership in times of crisis
Baloise is supporting its partners during the COVID-19 pandemic
by intensifying the sharing of know-how and promoting greater
use of digital technologies in the consulting business, so that
together they can be there for their customers during the crisis.
▸ Webinars for our partners – In Belgium and Germany we
have been organising tutorial webinars for brokers to give
them tips and advice on maintaining contact with their
customer base. In Germany, online consultancy certifica-
tion for sales partners working exclusively with Baloise
was also expanded.
Intensification of digital consultancy – Intensification
of online consultancy certification for sales partners
working exclusively with Baloise and additional webi-
nars for brokers.
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RESOURCE: INNOVATION PARTNERS, OUTSOURCING PARTNERS, SUPPLIERS, BROKERS AND AGENTS
COMMITMENT: RESPONSIBLE AND SUCCESSFUL COLLABORATION
Impact of value creation:
▸
Protection of competitiveness and facilitation of
future growth
Innovative strength
Fast pace of innovation thanks to shortened product
development time
Around 50 start-ups in the portfolio / funding initiatives
for innovative solutions for tomorrow’s market
Quick and targeted fulfilment of the needs of customers
and partners
Ability to respond to customer needs rapidly and
develop new products within a short period of time
Strong relationships with sales partners, agents
and brokers
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Inputs for value creation:
▸
A broad network of sales partners (agents, banks,
brokers), service providers, advisers and start-ups
Start-ups founded by Baloise (e.g. FRI:DAY, Mobly)
and innovation processes (e.g. F10 in Switzerland)
Collaboration with the innovation partner Anthemis
Capital Managers Limited, which has publicly commit-
ted to promote sustainable development by signing
up to the PRI
Expansion of the Home and Mobility ecosystems,
whose services go beyond traditional insurance-
related services
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UNEP FI PRINCIPLES FOR SUSTAINABLE INSURANCE (UNEP FI PSI)
The Principles for Sustainable Insurance (PSI) of the United Nations Environment Programme Finance Initiative (UNEP FI) serve as
a global framework for the insurance industry to integrate environmental, social and governance aspects into business processes
and identify the associated risks and opportunities. Baloise signed up to the principles in 2020.
“Joining the UNEP FI Principles for Sustainable Insurance Initiative strengthens our
ability to create value for a decent future, as the Principles provide the entire industry
with a framework to integrate environmental, social and governance aspects into
the insurance business, enabling collective action and initiatives. For Baloise,
joining the PSI initiative was a logical next step after signing up to the PRI, as it
demonstrates our commitment to playing an active role in sustainable development.”
Gert De Winter, CEO Baloise Group
OVERVIEW AND REFERENCES TO RELEVANT INFORMATION
Principle 1
We will embed in our deci-
sion-making environmental,
social and governance issues
relevant
insurance
to our
business.
Principle 2
We will work together with our
clients and business partners
to raise awareness of environ-
mental, social and governance
issues, manage risk and develop
solutions.
Principle 3
We will work together with
governments, regulators and
other key stakeholders to pro-
mote widespread action across
society on environmental, social
and governance issues.
Principle 4
We will demonstrate account-
ability and transparency in
regularly disclosing publicly
our progress in implementing
the Principles.
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Strategic integration
Page 37
Our commitments
Page 38
▸ Materiality analysis
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Page 39
Important foundations
for value creation
Page 41
Creating value for
employees, customers,
investors, environment,
society and partners
Page 44–60
Responsible investment
Page 62–64
Human resources
Page 66–71
The environment
Page 72–76
Risk management
Page 77–79
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Baloise memberships
Page 40
Stakeholder dialogue
Page 39
Risk management
Page 77–79
Responsible investment
Page 62–64
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▸
Baloise memberships
Page 40
Creating value for
customers
Page 46–49
Creating value for
partners
Page 59–60
Creating value for society
Page 53–58
Responsible investment
Page 62–64
See also:
www.baloise.com/vendor
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Baloise memberships
Page 40
Stakeholder dialogue
Page 39
Annual reports:
▸
www.baloise.com/annual-report
▸ Website:
www.baloise.com/sustainability
▸
www.baloise.com/media
▸
PRI transparency report
Baloise Asset Management 1
Blog posts:
1 www.unpri.org/signatory-directory/baloise-asset-management/3718.article
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Responsible investment
Investing sustainably: steady expansion of the
Baloise responsible investment strategy
The asset management team of Baloise, which manages the
Group’s assets, is getting behind the Group’s sustainability
strategy and taking responsibility for investment strategies in
relation to both the investment of insurance assets of the Baloise
Group and the investment of assets from external customers
such as pension funds.
With its responsible investment (RI) policy, the asset
management team plays an important role in sustainable value
creation for the Baloise Group. It is important that assets are
managed in a forward-looking way with a clear focus on the
risk-return profile, and also responsibly in the interests of all
stakeholders.
In 2020, the asset management team made great progress
in the area of responsible investing. As of 1 January 2020, the
RI policy now applies to all self-managed products for external
customers, for senior secured loans (SSL) and for the selection
of third-party funds. The RI policy has also been extended to
cover real estate investments. The roll-out of the RI policy for
the insurance portfolio that began in 2019 has been steadily
continued.
As an asset manager with a long-term perspective, Baloise
is confident that integrating environmental, social and corporate
governance (ESG) criteria into the investment process will have
a positive impact on the risk / return profile. It will also enable
Baloise to reduce ESG risks that have an adverse financial impact.
On this basis, we regard the integration of ESG criteria as an
additional risk management instrument. We want to manage
long-term climate risks and make a positive contribution to the
transformation process. With regard to the United Nations’
sustainable development goals, we are therefore focusing
primarily on climate protection, i.e. sustainable development
goal no. 13 (climate action). Baloise Asset Management will
therefore be launching a detailed climate strategy in 2021.
As both an owner and manager of assets, we also aim to
generate long-term, sustainable returns as part of our active
ownership approach, and at the same time have a positive impact
on the environment and on society.
OUR APPROACH TO RESPONSIBLE INVESTING
Our approach to responsible investing involves taking account
of ESG factors in the investment decision-making process.
Baloise Asset Management has developed a responsible
investment (RI) policy to provide guidance on implementation
of the responsible investment approach. This policy governs
the integration of ESG factors into investment decisions and is
based on three strategic pillars, as illustrated below.*
Baloise responsible investment policy
Active ownership
• Exercising voting rights for Swiss
large-cap equities in the insurance
portfolio
• Active dialogue with companies on
specific or general ESG topics, e.g.
concerning climate change, including
increasing the transparency of key
climate indicators
Integration of ESG factors
• Securities with at least
B rating
• Provision of detailed
ESG data for portfolio
management
Exclusion
• Manufacturers of controversial
weapons (incl. Swiss
Association for Responsible
Investments (SVVK-ASIR) list)
• Coal producers, at least 10 per
cent of revenue
• Producers of unconventional oil
and gas, at least 10 per cent of
revenue
• Manufacturers with a high level
of stranded assets and
inadequate management
* This illustration includes the launch of the climate strategy on 1 Febru-
ary 2021 and the launch of the active ownership strategy on 1 March 2021.
1.
Exclusion: We may exclude companies from the invest-
ment universe. Companies can be excluded if they pursue
business activities that are linked to controversial weap-
ons or if they are involved in the coal industry (at least
10 per cent of total revenue). We also exclude producers
of unconventional oil and gas (at least 10 per cent of total
revenue) and producers with a high level of stranded
assets, i.e. with large reserves of oil and gas, coupled
with inadequate management.
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Sustainable business management
Responsible investment
2.
Integration: We integrate sustainability factors into our
investment analysis by requiring companies to have at
least a B rating (according to MSCI data) for inclusion in
the investment universe. We also provide our portfolio
managers with detailed ESG information so that they can
factor these aspects into their investment decisions.
3. Active ownership:
▸
▸
Proxy voting: We exercise our voting rights for Swiss
large-cap equities in the insurance portfolio.
Engagement: As part of our active ownership policy, we
engage in dialogue either directly with companies or with
the public sector via our membership of various industry
associations (e.g. PRI, SSV, AMAS, SSF) to discuss specific
or general ESG topics.
Baloise has signed up to the Principles for Responsible Investment
(PRI), which are supported by the United Nations, and joined the
Swiss Sustainable Finance (SSF) network in order to strengthen
engagement with Baloise’s customers, shareholders and
employees. In addition, representatives of our asset management
team participate on the sustainability committee of the Swiss
Insurance Association (SVV), the Asset Management Association
Switzerland (AMAS), the Swiss Sustainable Finance (SSF) network
and in working groups that are tasked with further developing
and promoting responsible investment in the Swiss market.
RESPONSIBLE REAL ESTATE MANAGEMENT
Baloise is one of the biggest property owners in Switzerland.
As a responsible investor, we see a close link between sustain-
able property investment and long-term returns. To benefit our
policyholders and investors, we work with responsible property
management companies to secure our profitability for the long
term and increase the value of our properties.
In order to optimise the energy efficiency of our property
portfolio, we make every effort to reduce energy consumption,
primarily by refurbishing and replacing older buildings as well
as acquiring additional properties, portfolios and new construc-
tion projects. Our tenants benefit from lower running costs. This
can help to retain existing tenants and attract new ones.
Our investment decisions factor in financial objectives,
environmental considerations and challenges facing society.
We aim to achieve certification for new construction projects,
while refurbishments are examined on a case-by-case basis.
The consumption figures (energy and water consumption) for
the properties are systematically collected and analysed. Using
the Swiss cantonal energy certificate for buildings (GEAK), the
energy efficiency for each property is calculated and used as a
basis to make specific improvements.
For the Baloise Swiss Property Fund (BSPF), for example,
an energy reduction plan was drawn up with the support of
Wüest Partner AG. The asset management team will use this
analysis to develop and build on a future-focused and profitable
sustainability strategy for the BSPF.
ROBUST RESPONSIBLE INVESTMENT GOVERNANCE
Baloise Asset Management has adapted its governance struc-
tures to reflect the responsible investment approach and
associated integration of ESG criteria into its investment deci-
sion-making process, and carried out the necessary changes to
the monitoring of compliance with the responsible investment
policy. The job of our Responsible Investment Committee (RIC)
is to develop the responsible investment strategy and monitor
the investment policy. The responsible investment core team is
in charge of the implementation and specification of the respon-
sible investment policy.
The sustainability strategy of Baloise Asset Management is
closely tied to the strategy of the Baloise Group. The head of
Responsible Investment is part of the Group sustainability network
and the Group responsibility officer is a member of the RIC.
63
Baloise responsible investment guidelines
▸
Responsible investing requires concerted action.
Since 2018, we have been a signatory of the six
Principles for Responsible Investment (PRI).
In investment analysis, a long-term holistic invest-
ment horizon is essential for a positive risk / return
profile. That is why we integrate environmental,
social and corporate governance factors into the
investment process.
Existing investments are reviewed at regular inter-
vals to ensure compliance with the responsible
investment rules across the different insurance
business units.
▸
▸
▸ We take our responsibility as an investor seriously.
We exercise our voting rights in respect of Swiss
shares on the basis of the principles of good and
ethically sound corporate governance. And we pro-
actively engage in dialogue with companies on
specific sustainability-related matters.
▸ We report on our activities in a transparent and
proactive manner.
Baloise Group Annual Report 2020
Sustainable business management
Responsible investment
THE NEXT STEPS IN 2021
Baloise Asset Management will continue to press ahead with
the development of its sustainable investment strategy. It rec-
ognises and very much welcomes the current trend for respon-
sible investment and is well placed to benefit from it.
Firstly, it will intensify its current approach. On 1 Febru-
ary 2021, the detailed Baloise Asset Management climate
strategy came into effect. Under the new strategy, a positive
contribution to climate change is made by reducing the negative
impact on society and the environment, while the risks arising
in connection with climate change are managed prudently in the
portfolio. In addition, opportunities created by the shift to clean
energy are identified and used in a profitable and forward-look-
ing manner. An active ownership approach will be introduced
on 1 March 2021 in order to leverage financial power so as to
manage ESG risks more effectively while making a positive impact
on society and the environment.
Baloise is working hard to increase transparency for its
customers, which includes implementing the requirements of
the European regulatory authority. Baloise aims to be well
prepared to meet the needs of its customers.
www.baloise-asset-management.com/responsible-investment
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Sustainable business management
Responsible investment
This page has been left empty on purpose.
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Baloise Group Annual Report 2020
Sustainable business management
Human resources
On the way to becoming a top employer
Having made it into the top 10 per cent of European employers in the financial sector, Baloise is well on
track to achieving one of its core objectives. The aim for 2021 is to maintain this high standard.
We still see culture, sustainability and the ability to adapt in an era of continuous change as key drivers.
WE BELIEVE THAT HAPPY EMPLOYEES LEAD TO
HAPPY CUSTOMERS
Our employees are part of our identity. Their effort, motivation
and expertise are at the heart of our unique Baloise culture.
That’s why we, as an employer, make every effort to improve job
satisfaction by offering an inspiring and motivating work envi-
ronment. The Baloise Code introduced in 2017 underlines the
responsibility of every individual to play their part in creating
this environment.
The Baloise Code
▸ Keep promises: walk the talk.
▸ Ask questions: learn new things all the time.
▸ Speak up: every voice matters.
▸ Share insights: collaborate beyond your role.
▸ Understand the impact of your work: look for
constant improvements.
▸ Appreciate colleagues: build personal connections.
▸ Bring in customer needs: take their perspective.
▸ Meet others with a smile!
We firmly believe that our exceptional way of working together
is reflected in the commitment of our employees and therefore
also has an impact on our customers. Following this logic,
decisions made in Human Resources throughout the Group
directly affect our workforce and thus indirectly also affect
customer relations.
FINDING AND KEEPING SKILLED WORKERS
The belief that ‘Happy employees lead to happy customers and
partners’ is deeply ingrained at Baloise. It is a feeling that
employees bring with them or internalise, that they demonstrate
through their actions and spread virally. We believe in leading
by example rather than ruling by command – in role models who
can inspire others and naturally infect them with the Baloise
feeling. It is a shared understanding of a way of working together
that helps us to collaborate in a more committed and contented
way and ultimately makes us more customer-friendly. Baloise
is undergoing a transformation, a rethinking of the working
environment in which everyone learns with and from one another.
It is a journey for everyone across all hierarchies and age groups.
We feel that this is sustainable. Change is permanent nowadays.
It is the responsibility of the Company and of every individual
employee to constantly develop and learn.
KEY PERFORMANCE INDICATORS
▸
▸
▸
▸
▸
▸
▸
7,693 employees (2019: 7,646)
44.1 per cent of all employees are women
(2019: 42.9 per cent)
The Baloise Group employs 262 apprentices, trainees,
interns and student interns (2019: 281)
70 per cent of eligible staff members working in our main
market of Switzerland took part in our employee share
plan (2019: 67 per cent)
12.1 years is the average time employees stay at Baloise
Staff turnover as at 31 December 2020 amounted to
6.1 per cent (end of 2019: 6.3 per cent)
In the most recent employee survey, the proportion who
would recommend Baloise as an employer was 86 per cent
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Baloise Group Annual Report 2020
Sustainable business management
Human resources
LEARNING ORGANISATION
Growth through continuous dialogue
Just as the world is constantly changing, so too are Baloise and
its employees. The will to embrace change is firmly anchored
within the Company. Baloise takes its corporate responsibility
seriously and is in the process of creating a learning environment
in which people can develop and grow – both professionally and
personally. We believe in individual responsibility within a
working environment where learning is intrinsic and fun. Devel-
opment programmes are available to anyone, regardless of
position or level. They are equally open to trainees and students
or the CEO, to full time staff and those working part time. Some
departments have already begun to drive forward their individual
and team development with the help of development coaches
they have selected themselves.
New skills for the future
We live in a working world that is strongly driven by digitalisation
and where the demands for professional and personal develop-
ment are accelerating rapidly. Future survival in this job market
will demand breadth as well as specialisation, and the devel-
opment of our skill sets will be an ongoing task.
With this in mind, Baloise is fostering continuous dialogue,
where managers and employees or teams come together at
regular intervals to discuss aspects of learning and development.
This makes it possible to respond to change on an ad hoc basis
– not just at the end of a year – and to adapt targets as and when
necessary. This forward-looking initiative is supported by the
introduction of new overarching Baloise competencies which
provide a basis for these dialogues.
Baloise competencies
The Baloise competencies are overarching and relevant to all employees, regardless of role
Learning
Description
Demonstrate an inquiring mind
The ability to question the status quo, see things from a new perspective and thus
drive forward innovation and change in an unfamiliar environment
Grow through reflection
The ability to take a bird’s eye view and learn by reflecting on one’s own actions
Help others to develop
The ability to reinforce and contribute to the development of others
Develop digital skills
The ability to work effectively and interact in today’s digital world
Collaboration
Description
Make sense of things
The ability to communicate content and to back up suggestions with clear and logical explanations
Collaborate effectively
The ability to work constructively in teams with allocated roles and responsibilities,
in order to achieve results on the basis of the principle: ‘Together we are strong’
Network
Description
Lead by example in matters of
integrity and trust
The ability to act in accordance with the Company’s values, guided by an inner moral compass, and in
particular to show personal integrity and develop relationships based on trust
Promote diversity through dialogue
The ability to listen, take the initiative and translate differences (points of view, emotions)
into values
Take responsibility
Accept responsibility
Description
The ability to take responsibility for one’s own work and one’s own personal development
Focus on results
The ability to perform well without supervision, especially in dealings with customers
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Baloise Group Annual Report 2020
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Human resources
Development demands individual responsibility
Ongoing dialogue helps bring interests and needs into focus,
especially for the employees themselves: What do I want to learn?
What do I want to become? How can I work better with others
and share my knowledge? Baloise also supports its employees
with the introduction of time dedicated to learning at its Swiss
offices, and provides them with self-service educational oppor-
tunities via the LinkedIn Learning platform. These measures are
based on the firm belief that everyone has an intrinsic desire to
learn. Baloise creates the structures within which continuing
professional development is a permanent and natural part of
the working day – as well as being enjoyable.
LEARNING OPPORTUNITIES@BALOISE
LinkedIn Learning
The LinkedIn Learning platform has more than 15,000 video courses by leading industry experts that employees can use
to explore new areas or develop existing expertise, choosing areas that interest them. Since its introduction in March 2020,
employees across the Group have spent a total of more than 4,000 hours on the platform.
LinkedIn Learning performance in 2020
Content
17,209
courses viewed
User actions
4,003
hours in total
2,291
courses completed
89,553
videos viewed
74,886
videos completed
2,796
logged-in users
2,067
users of this content
1 hour, 56 mins.
average time spent
per user
‘Learning with others’ | Feedback discussions, development dialogues and mentoring
Being able to discuss development on an ongoing basis with a chosen partner or manager enables employees to respond
quickly and specifically to change. In a disruptive world of work, this permanent opportunity to meet, talk and compare
notes with others enables staff to regularly review and adjust their goals.
‘Learning on the job’ in the form of shadowing and changes of perspective
Watching colleagues at work for a day as part of a shadowing arrangement, or working alongside them for a period ranging from
a couple of months to two years: internal job rotation throughout the whole Baloise Group equips employees better and more
broadly for a future where no one knows what jobs and skills will be in demand. This type of collaboration between teams and
departments also increases transparency, expands the pool of shared knowledge and allows people to see the bigger picture.
Covid-19 effect: Digital learning accelerator
The Covid-19 crisis highlighted the rapid development of digital
skills as a key issue. Within a short period, various courses and
learning opportunities were put in place for employees and
managers covering subjects such as ‘managing remotely’. The
existing leadership development programmes – which were
already comprehensive for the current size of our company – were
rapidly adapted so that they could be delivered digitally. For the
digital workplace too, the focus was on the introduction of the
new collaboration infrastructure Office 365 and giving employ-
ees the skills they needed to use it. A new strategic HR project
was launched in connection with the ‘New Working’ strategy,
defining a shared framework for how to manage remote working.
As the results of the 2020 employee survey (carried out every
two years across the Group) show, employees were highly appre-
ciative of the measures put in place in this regard during the crisis.
Communication formats such as the Company’s own ‘Baloise ist
zu Hause’ (At home with Baloise) podcast, technology tips and
blogs, and a forum that allowed employees to share pictures of
themselves working from home proved very helpful in providing
mutual emotional support.
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Human resources
Leadership programme: ‘Baloise Campus’ 2020
Every year since 2013, Baloise has invested a great
deal of effort in a comprehensive Group-wide lead-
ership development programme aimed at driving
forward the evolution of its management culture.
▸
▸
▸
▸
Participants in 2020: 156
Proportion of female participants:
31 per cent
Programmes: 8 (offered in German, English
and French)
Days: 50
Feedback from participants:
“Learning to understand yourself and others better
can help to avoid conflict. We take responsibility
for one another. I approach challenging interper-
sonal matters with my team in a different way now.”
“Since the Baloise Campus, I have found more
self-confidence, courage and the will to accept
managerial responsibility and to take the next steps
on my learning journey.”
Promoting diversity: learning from one another
Diversity is a natural driver of the kind of learning organisation
Baloise aims to be. Employees from all age groups, genders,
cultures, sexual orientation and views make the Company a
diverse place. Different personalities bring a variety of perspec-
tives into our day-to-day operations which leads to better results.
Because employees are encouraged by the Baloise Code to
contribute their ideas and formulate their opinions in a construc-
tive and respectful way, an atmosphere is created in which
everyone can learn from one another – to the ultimate benefit
of our customers. Any friction in the collaboration produces
learning opportunities, and mistakes lead to new insights and
improvement.
COMMITMENT TO THE ADVANCEMENT OF WOMEN
Because the current situation is unsatisfactory, particularly with
regard to gender diversity on the executive bodies, Baloise is
committed to the advancement of women. In 2020, the Corporate
Executive Committee decided that in future, one third of all
promotions and new recruits each year should be women. The
decision to consciously look for female candidates when it comes
to promotions will lead to a greater balance within the Company.
Mixed teams come up with better solutions and create a better
working environment, which has a positive impact on customer
satisfaction and thus also on the bottom line. The proportion of
women in the upper tiers will be significantly increased in future.
“The focus should be on the personality and
the capabilities of an individual, and the
extent to which they can empower their teams.
I simply want to get more of a sense of the
different influences – i.e. more of the
diversity.” (Andreas Burckhardt, Chairman of
the Board of Directors)
DATA-DRIVEN ORGANISATION: MEASURE THE THINGS THAT
MATTER
The people-centred culture and HR work of Baloise is carried
out in tandem with analytical methods. True to the philosophy
‘Data for people, not people for data’, Baloise aims to measure
the engagement of jobseekers at the key touchpoints: when they
first see the job ad, just after they have applied, and after the
final job offer or rejection. Gathering feedback provides us with
information that enables us to find out the expectations of
candidates at an early stage, to act in a customer-focused way,
and to respond swiftly and with the minimum of complication.
Targeted A / B tests using job adverts – for example with a focus
on women – help us to target the right candidates with the right
language and deploy the right arguments to win them over.
FOCUSED TARGETING OF WOMEN IN EMPLOYER MARKETING
What effect do pictures featuring typical male protagonists have
in job ads? What words in a recruitment ad subconsciously make
a potential applicant think that the company is looking for a
man? How many requirements can an advert list before a
job-seeking female loses the courage to apply? All these factors
have been examined, based on actual data. Baloise uses the
findings to make its job adverts more female-friendly. We have
sharpened our awareness so that we do not unconsciously
exclude women from the recruitment process – through a poor
choice of wording in an advert, for example. By attracting more
women into the job market, especially in the still male-dominated
fintech sector, Baloise will find more diversity and thus also
more quality.
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Sustainable business management
Human resources
Be yourself. But don’t stay as you are. Employer campaign, target group:
Women@Sales
Be yourself. But don’t stay as you are. Employer campaign, target group: IT
CULTURAL PRIDE: FROM BALOISE, FOR SOCIETY
Being a Baloisian is a way of life that links work and home life
in a way that feels very natural. People are what makes the
Company what it is. Every individual brings their own personal-
ity to the Company and enriches it in their own unique way.
It is this feeling of pride that gave rise to the Baloise hoodie
with its #worklifebaloise slogan. A visual commitment to the
employer.
Baloise amateur brewers have brewed a special Baloise beer for
the workforce and fans of the Baloise culture.
www.baloise.com/de/home/ueber-uns/baloise-bier
BALOISE CULTURE
RIPPLING INWARDS AND OUTWARDS
We have a certain employer pride and an awareness that we have
something special. That’s why our Employer Branding & Experience
team is constantly creating content (blog articles, career websites,
videos, podcasts) to provide information about what’s going on
in the Company and the people who work here. Internally, these
stories create a feeling of loyalty, pride and identification. They
disseminate knowledge and create transparency. In keeping with
the motto “Do good and talk about it” or “Admit your mistakes
and share what you learned from them”, an entire organisation
grows together by learning from one another. Externally, the
employer brand is strengthened: employees exert a ‘multiplier
effect’ in respect of our culture, and our employer marketing
activities help us to attract the right highly motivated, talented
people who will embrace the Baloise feeling and help it grow.
#WORKLIFEBALOISE: WE QUESTION THE WORLD OF WORK
EMPLOYER BRANDING CAMPAIGN: ‘WE ARE WHO WE ARE, AND
WE ARE LEARNING.’
The Employer Branding and Experience team uses a variety of
marketing tools to communicate the Baloise culture to the
outside world. The umbrella branding campaign that was
launched in 2019 under the hashtag #worklifebaloise focused
in 2020 on the most important target groups for employer
marketing: IT, customer advice and trainees. The online campaign
dispels a number of myths and clichés relating to banking / insur-
ance and presents Baloise as it is: an employer that is evolving,
questioning the world of work and surprising people with a fresh
and innovative mindset.
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Human resources
At a company event, giant canvases that would otherwise have
gone to landfill were able to be rescued and recycled. They were
used to make bags: one-of-a-kind items that symbolise our
commitment to sustainability. The proceeds from the bags are
donated to good causes.
ergonomic training, sports activities, healthy eating, health tips,
and various workshops, courses and assessments, good over-
all health also requires us to look after our mental health. This
creates value not just for employees but also – through their
performance – for our customers, partners, and investors.
Careers website:
www.baloise.com/jobs
Careers blog:
www.baloise.com/karriereblog
Facebook:
www.facebook.com/baloisegroup
YouTube:
www.youtube.com/baloisegroup
Instagram:
www.instagram.com/baloisejobs
LinkedIn:
www.linkedin.com/company/baloisegroup
Twitter:
www.twitter.com/baloise_jobs
‘FRIENDLY WORKSPACE’ FOR THE FOURTH TIME IN A ROW
We stand out in the market for our values-driven culture, work-
ing environment and a focus on development that is based on
fair pay. Whether in normal times or during a crisis, the way we
work is shaped by a high degree of flexibility, personal respon-
sibility and decision-making freedom. Our recent recertification
as a ‘Friendly Workspace’ is evidence of a special, living Baloise
culture. We were awarded the quality mark for the fourth time
in succession in 2020 by the Swiss Health Promotion Foundation
– scoring 4.83 out of a possible 5 points! The award recognises
organisations that successfully implement their corporate health
management (CHM) and systematically work to ensure good
working conditions for their employees.
HEALTH IS OUR MOST VALUABLE ASSET
Of course the health of our employees is a valuable asset at all
times, not just when they are working from home in the midst
of a crisis. However, the Covid-19 crisis has shown even more
clearly how we need to work together to look after everyone’s
health. In addition to the promotion of physical health through
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Sustainable business management
The environment
Environmental mission statement
Baloise has had its own environmental mission statement since 1999. From the outset, it was important to
embed sustainability throughout the Company and in all day-to-day business activities. This environmental
mission statement became an integral element of our value creation approach for sustainable development
in 2018. This approach complements the mission statement for environmental and social activities and has
been incorporated into the Company’s overall sustainability management. The environmental mission state-
ment is part of our efforts to create environmental value to support the achievement of the United Nations’
sustainable development goals, in particular no. 7 (affordable and clean energy), no. 9 (industry, innovation
and infrastructure), no. 12 (responsible consumption and production) and, as a priority, no. 13 (climate action).
PRINCIPLE
As a primary insurer, Baloise is prepared to assume responsi-
bility for the preservation of the natural environment. It focuses
on the responsible use of natural resources and the continuous
reduction of CO2 emissions. It is based on the concept of value
creation, which is not limited to the environmental impact of
operations, but also includes responsible investment by Baloise
Asset Management.
▸
Chapter ‘Sustainable business management /
Responsibility’
Chapter ‘Sustainable business management /
Responsible Investment’
▸
EMPLOYEES AND THE PUBLIC
Baloise trains its employees with regard to environmental
matters and raises their awareness of the relevant issues. Its
employees are aware of the ecological targets and the most
important initiatives for achieving them. They are kept regularly
informed about the implementation of the environmental mission
statement and encouraged to suggest measures of their own.
Regular employee surveys are part of an active dialogue with
employees on various sustainability-related matters.
During ‘Baloise Week’, a week of strategising that took place
in October 2020, one day was devoted to the topic of sustaina-
bility – with a particular focus on environmental responsibility.
Employees were brought up to date with the latest developments
in this area and were given tips for a more sustainable lifestyle.
Baloise works hand in hand with other companies, organisations
and public authorities across all countries in which it is active
to find solutions to environmental problems. In Luxembourg,
Baloise teamed up with etika, an association for alternative
financing that provides advice to business on sustainability
issues, raising employee awareness and developing sustainable
products. Baloise particularly encourages the sharing of infor-
mation within the sector through memberships in insurance
72
associations such as the Swiss Insurance Association (SVV),
the German Insurance Association (GDV), Assuralia in Belgium
and the Association des Compagnies d’Assurances (ACA) in
Luxembourg. It maintains an open dialogue with the public and
regularly reports on environmental projects and what has been
achieved. The environmental audit is presented on page 76.
ENVIRONMENTAL FOOTPRINT
Baloise continually reduces its direct impact on the environment
by planning, building and operating its office buildings in a
resource-saving and energy-efficient manner. It observes the
same principles in the procurement and use of office equipment
and materials. In doing so, it pays particular attention to its
published value creation model, its environmental mission
statement and its environmental audit.
▸
Chapter ‘Sustainable business management /
Responsibility’
www.baloise.com/vendor
PRODUCTS AND SERVICES
Baloise strives to take environmental aspects into account when
developing its products and services and fixing premiums and
levels of coverage. Its underwriting policy takes account of its
customers’ environmental management practices (ISO 14001
onwards) on the basis of identifiable operational and prod-
uct-related factors. It also advises industrial clients on risk
reduction and risk prevention.
ORGANISATION
The Corporate Executive Committee bears ultimate responsi-
bility in environmental matters. Each Group company has a
coordination unit which implements the environmental mission
statement. This working group is made up of representatives
drawn from all key corporate functions.
Baloise Group Annual Report 2020
Sustainable business management
The environment
Protecting the environment over the long term
Environmental protection at Baloise is focused on reducing CO2 emissions and promoting alternative energy
sources. The Company’s initiatives are guided by recognised directives and the United Nations’ sustainable
development goals. It always pursues a pragmatic and practical approach and it helps the environment
because it believes this is the right thing to do. Baloise has set itself an ongoing objective of adding value,
including for the environment, and making continual improvements in all areas.
CONTINUOUS REDUCTION OF CO2 EMISSIONS SINCE 2000
Climate change is the challenge of the century. Since the 1997
Kyoto conference in Japan, Baloise has been publishing key
figures on energy and resource consumption, documenting
sustainability measures in its annual report, and calculating its
absolute and relative CO2 emissions in accordance with the
directives issued by the Association for Environmental Manage-
ment and Sustainability in Financial Institutions (VfU). The 2015
Paris Agreement, the successor to the Kyoto Protocol, has
spurred the Company on in its ambition, and future measures
will be based on the Paris objectives and the UN’s sustainable
development goals. Both absolute and relative CO2 emissions
have been reduced massively at Baloise since the year 2000.
Over this period, Baloise has cut absolute CO2 emissions from
53,580 tonnes to 13,731 tonnes in 2019. This is equivalent to
a 74.4 per cent reduction in CO2 emissions, while emissions per
employee fell by 38 per cent over the same period, from 4 tonnes
to 2.5 tonnes.
Baloise, working from home was not new, but the scale on which
it suddenly had to be implemented certainly was. Within days
of the crisis beginning, 90 per cent of employees were working
from home – in many cases before the governments in the
countries concerned had officially declared a lockdown. In total,
Baloise employees worked well over three-quarters of a million
days from home in 2020.
MILESTONES FOR LONG-TERM EMISSIONS REDUCTIONS
IN 2020
In 2020, the focus was on the optimisation of building technol-
ogy and business processes at all locations. This required a
significant amount of capital investment. The refurbishment of
the ‘Phoenix’ building in Belgium, the positive outcome of a
feasibility study for the installation of solar panels at the Bad
Homburg site in Germany and, in Switzerland, the completion
and occupation of the Baloise Park buildings in Basel were
particular highlights.
THE COVID-19 PANDEMIC IS CHANGING THE WAY WE WORK
The outbreak of the Covid-19 pandemic meant the vast majority
of companies were forced to get to grips with new ways of
working and, in particular, the switch to home working. For
COMPLETION OF THE NEW BUILDING AND OPTIMISED
OPERATIONS AT THE SWISS OFFICES
At the end of 2020, the Baloise Park project with its three new
buildings on the site of the Baloise headquarters in Basel was
TOTAL CO2 EMISSIONS IN TONNES
CO2 EMISSIONS PER EMPLOYEE IN KILOGRAMMES
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
CO2 emissions for the Group
CO2 emissions in Switzerland
CO2 emissions for the Group
CO2 emissions in Switzerland
73
Baloise Group Annual Report 2020
Sustainable business management
The environment
completed and staff were able to move in. The three buildings
that had been used temporarily during the construction of
Baloise Park were vacated in late 2020. With its three modern
blocks, Baloise Park will be the defining landmark of the train
station district and reflect Baloise’s commitment to the city of
Basel. Baloise based its designs for the buildings on the stan-
dards for sustainable construction in Switzerland (SNBS), which
means it comfortably exceeded the legal requirements in terms
of energy efficiency. An ultra-efficient energy centre will provide
power for all three buildings, which will be heated by 100 per
cent renewable district heating. The Baloise headquarters now
has state-of-the-art office infrastructure and offers employees
an excellent working environment that promotes health and
well-being, with rooms to carry out corporate health management
activities, various communication zones, relaxation areas and
changing rooms with showers.
In addition to the completion of the Baloise Park project,
22 energy efficiency measures were developed for the head-
quarters of the Swiss business in Basel in partnership with
electricity supplier IWB, as part of a cantonal target agreement.
These measures will reduce electricity consumption by around
7.7 per cent over the next eight years. In 2020, the following
measures had already been implemented in the form of further
operational optimisations:
▸
▸
Speed regulators on various ventilation motors.
Drive replacement with frequency converters on various
ventilation motors.
For 2021, there are plans to introduce variable control for the
air volumes for some of the office areas and to replace the steam
generation system.
Work on upgrading the staff restaurant at the Baloise head
office in Basel began in 2019, with the aim of utilising space
more effectively and increasing energy efficiency. The project
was completed in 2020. The restaurant is now open to employ-
ees all day. The focus on sustainability in the sense of a sus-
tainable diet and sustainable sourcing through local, regional,
seasonal, nutritious and healthy food has been strengthened
and the restaurant now makes its own pasta, baked goods and
other products.
www.baloisepark.ch
MORE ELECTRIC-POWERED VEHICLES
Since 2015, Baloise customers and employees have been able
to charge their electric vehicles in Basel, and in Zurich since
2016, using solar power. The facility, which does not cost
anything to use, has proved very popular. As have the eco-
friendly electric bikes, which are used by the Company’s loss
assessors to get to local incidents. In 2021, cars that were due
for replacement at Baloise Bank SoBa, which operates in Swit-
74
zerland, were replaced with electric vehicles. To make it easier
for our customers to switch to electric vehicles, a project was
set up to install more charging infrastructure at Baloise prop-
erties. The Responsibility / Creating Value for the Environment
chapter contains more information on this project.
Chapter ‘Sustainable business management /
▸
Responsibility’
NEW SITE AND SYSTEMATIC WASTE SEPARATION
IN LUXEMBOURG
In Luxembourg, work on planning a new building continued
apace. The new office building in Leudelingen will be the first in
the country to be made entirely of wood. The wood used in the
building, which has been given the name Wooden, is sourced
exclusively from sustainably managed forests in Luxembourg.
The wood design will be less dusty and noisy to construct,
making the build less disruptive. It is made of prefabricated
elements and is 40 per cent lighter than concrete, which signif-
icantly reduces the number of lorries needed to transport the
elements to the construction site.
The building will be equipped with a photovoltaic (PV)
system and aims to achieve a BREEAM Excellent rating. This
certification system assesses the environmental and sociocul-
tural aspects of a building’s sustainability performance. In
addition to its structural qualities, Wooden will also be the
second building in Luxembourg to take part in the WELL Building
Standard® certification process. Unlike similar schemes in the
construction sector, the focus here is on the residents. WELL
looks at ten areas that enable a holistic approach to well-being
in and around the building: air, water, food, light, physical
activity, temperature, noise, materials, mind and community.
The new office building will be easier to get to on public transport,
which will help to further reduce indirect CO2 emissions. The
building should be ready to move into in 2022.
www.baloise.lu/wooden
LOW-CARBON TRANSPORT AND REFURBISHMENT AT THE
SITE IN BELGIUM
The Baloise ‘Phoenix’ building in Brussels, Belgium, which
contains over 17,000 m² of office space, was extensively refur-
bished in 2020. The main focus of the upgrade was on achieving
the European energy standard ISO 20121. These standards apply
to refurbishments of existing non-residential buildings that
require next to no external energy sources (zero-energy building).
Baloise occupies three floors of this building itself.
In addition, a new and more eco-conscious car policy is
being developed at Baloise Belgium, which will be signed off
by the Board of Directors in early 2021.
Baloise Group Annual Report 2020
Sustainable business management
The environment
REDUCTION OF RESOURCE CONSUMPTION IN GERMANY
On 17 September 2020, Baloise’s German offices took part in
‘Earth Night’, an initiative that aims to draw attention to the
excessive use of artificial light at night and the impact of this
on people, nature and the environment.
After taking part in Earth Night, Baloise in Germany decided
to make a more lasting contribution and has now optimised the
times at which its lighting systems and outdoor advertising switch
on and off. This will generate an annual energy saving of 33,000
to 34,000 kWh. The fountains in front of the Bad Homburg office
have also been switched off, saving both electricity and water.
The lighting was further optimised at the offices in Hamburg
and Bad Homburg. In Bad Homburg, 15 additional emergency
exit signs were switched to LED light sources. In Hamburg, the
use of LED lights in the corridors and the boulevards of the office
building has reduced the number of lights by 50 per cent.
Further milestones in Baloise’s plan to reduce the consump-
tion of resources and encourage the use of renewable energy
include the switch of the offices in Germany to 100 per cent green
electricity (generated exclusively from renewable sources) and
the positive outcome of a feasibility study on the installation of
a solar power system at the Bad Homburg site. The implemen-
tation of this solar plant will begin in 2021. Once it is completed,
Baloise will get all its electricity from 100 per cent renewable
sources in Switzerland, in Germany, Belgium and Luxembourg
in the buildings where it controls its own electricity mix.
In the buildings in Bad Homburg, the default temperature
setting for the heating will be lowered and the default temper-
ature of the air conditioning will be raised. The aim of both
adjustments is to achieve an energy saving of several thousand
euros a year.
At the Hamburg office, the dishwasher used in the canteen
kitchen was replaced with a flight-type dishwasher that has a
heat exchanger and reduces energy use by more than 50 per
cent. The heating energy was further reduced by hydraulic
control of the heating system. In the longterm, this is expected
to cut heating energy by 15 per cent.
In total, at the Hamburg office alone, the optimisation
measures implemented in 2020 resulted in annual savings of
1,419 tonnes of CO2 equivalent.
FRIDAY OFFSETS OVER 1,300 TONNES OF CO2e*
Since October 2018, FRIDAY customers have been able to make
their own contribution to climate protection by offsetting the CO2
emitted by their cars. Through its FRIDAY+ECO product, a joint
development with the well-known climate protection organisation
myclimate, Baloise’s German online mobile insurer FRIDAY offset
302 tonnes of CO2 and other damaging greenhouse gases,
including methane and nitrous oxide, between October 2018
and March 2019. The climate protection projects chosen meet
the highest standards (Gold Standard, CDM, Plan Vivo).
www.friday.de
* CO₂ equivalent (CO₂e) is a unit used to standardise the effect on the
climate of various greenhouse gases.
ENERGY EFFICIENCY AT BALOISE
The total energy and resource consumption revealed by the
environmental audit shows the amounts used by the Baloise
Group’s large office buildings at all sites and at its computer
centres. The figures reported relate to the energy and resources
used by 72.4 per cent of the 7,600 or so people working for the
Baloise Group. Per-employee consumption of heating has been
reduced by around 33 per cent and of electricity by 42 per cent
over the last ten years. With the objectives of the Paris Agreement
in mind, a wide range of energy-saving measures have been
analysed which will be implemented in each country over the
coming years.
www.baloise.com/sustainability
CARBON EMISSIONS LESS THAN TWO TONNES PER
EMPLOYEE
Carbon emissions per employee have fallen to below two tonnes
per year for the first time since the Baloise Group began recording
this metric in 1998 (1.858 tonnes per employee in 2020). If the
carbon emissions generated on the total of 791,959 days when
Baloise employees were working from home are taken into
account, the carbon emissions per employee for 2020 are still
below 2 tonnes (approx. 1.9 tonnes).
Paper consumption (DIN A4) and business travel saw the
sharpest falls compared with 2019 figures (–43.9 per cent and
–37.5 per cent respectively). Water consumption at the Baloise
offices also fell by a total of 18.5 per cent. Around 10 litres of
water consumption shifted to the employees’ personal environ-
mental footprint. These effects are due to the increase in home
working caused by Covid-19 measures.
75
Baloise Group Annual Report 2020
Sustainable business management
The environment
ENVIRONMENTAL AUDIT
Employees
Energy reference area
Locations
Electricity consumption
Heating consumption
Water consumption
Paper consumption
Paper types
Copy paper consumption
Amount of refuse
Types of refuse
Business travel
Mode of transport
2018 absolute
2019 absolute
2020 absolute
Relative Unit
5,214
142,409
14
5,590
155,853
15
6,052
167,571
18
headcount
ERA m2
number of buildings
18,314,747
16,381,853
14,703,323
2,429 kWh / employee
8,269,769
45,421 m3
300 t
9,553,480
41,341 m3
318 t
9,813,735
33,677 m3
59 kWh / m2
22 l / employee / day
232 t
38 kg / employee
2.0 % recycled
98.0 % chlorine-free-bleached
0.0 % chlorine-bleached
66.1 million
A4 sheets
843 t
62.7 million
A4 sheets
35.2 million
A4 sheets
5,822 A4 sheets /
employee
922 t
1,124 t
186 kg / employee
+/– %
8.2
7.5
3
– 10.3
2.7
– 18.5
27.0
– 43.9
21.9
41.0 % paper / cardboard
8.0 % other materials
1.0 % special waste
50.0 % misc. waste / refuse
22.4 million km
20.7 million km
12.9 million km
2,138 km / employee
– 37.5
6.1 % km by air
53.7 % km by road
40.2 % km by public transport
CO2 emissions
14,773 t
13,731 t
11,247 t
1,858 kg / employee
– 18.1
76
Baloise Group Annual Report 2020
Sustainable business management
Risk management
Risk management is a key pillar of value creation
at Baloise
Risk management is a key element of a sustainability-focused corporate governance system and, as
such, plays an important role at Baloise in adding value for its stakeholders. It helps to ensure a strong
balance sheet, a high level of operational profitability, a well-developed risk culture and consistent
risk processes as well as a sustainable investment policy.
Risk management plays an important role in creating added
value for the Baloise stakeholders. It involves managing both
risk and value at the same time, and is based on innovative
standards so that Baloise can always keep its promise to its
customers. Risk management at Baloise is a standardised
strategic and operational system that is applied throughout the
Group and covers the following areas:
▸
Risk governance and risk culture: Standards that apply
across the Group form the backbone of Baloise’s risk
strategy and define – in the form of a risk map – the funda-
mental risk issues, such as actuarial risks and market
risks, as well as the operational risks arising from business
activities. The detailed risk map can be found on pages
174 and 175 of the Financial Report. Risk awareness –
how people perceive and respond to risk – is encouraged
and embedded throughout the organisation so that
accepted risks can be consciously managed within the
scope of risk appetite and unwanted risks can be mini-
mised for Baloise and its stakeholders.
Risk measurement: Risks are identified and quantified in
all business and financial processes according to common
standards and resulting in an appropriate prioritisation of
the accepted risks for the management.
Risk processes: The management, reporting and evalua-
tion processes are enhanced by risk processes in order to
ensure that the risk perspective is factored into all impor-
tant business decisions.
Strategic risk management: The function of risk steering
is to optimise the Group’s earnings potential while taking
account of the risks and thereby to create long-term value
for the Baloise investors.
▸
▸
▸
The holistic risk management system and risk culture
ensure that all material risks are identified, measured and
adequately addressed. Accepted risks are consciously
managed and unwanted risks are actively reduced for Baloise
and for its stakeholders.
A key part of the risk management system is the identification
and assessment of individual risks. Throughout the Group,
individual risks along the risk map are assessed according to
their likelihood and expected impact. Baloise’s corporate
database of specific risks – which contains a detailed description
of the risks concerned, their position on the risk map, early-warn-
ing indicators and the quantitative assessment – is generated
from this standardised process. For each risk, mitigating
measures are defined. Clear responsibilities are defined across
all departments. Each risk is assigned to a risk owner (with
overall responsibility) and to a separate risk controller (risk
monitoring and risk controlling). Based on this database, which
is regularly updated, it is possible to check whether the risks
that have been taken on are within limits of risk tolerance. This
allows unwanted risks with possible negative consequences
for Baloise and its stakeholders, such as customers and inves-
tors, to be identified at an early stage and mitigated in a targeted
manner. Strategic decision makers are brought into the risk
management process, along with system managers, process
managers and specialists, which creates risk awareness and a
risk culture among employees.
77
Baloise Group Annual Report 2020
Sustainable business management
Risk management
The integration of sustainability risks and climate risks into
risk management can help to protect the environment in the
long term and thus create value for a secure and decent future
for the whole of society.
Sustainability risks are documented and analysed as individual
risks within the area of business strategy. As part of the analy-
sis of emerging risks, long-term, sustainability-related trends
such as social trends or environmental and climate risks are
examined and evaluated. Baloise’s risk management incorpo-
rates sustainability-related risks into its existing risk processes
and creates long-term value for society as a whole through
greater risk awareness. The importance of risk management for
value creation at Baloise is discussed in more detail on the basis
of the TCFD categories (governance, strategy, risk management,
and metrics and targets) in the chapter Risk Management as a
framework process for value creation.
▸
Chapter ‘Sustainable business management /
Responsibility’
By complying with regulatory obligations and disclosure
requirements in risk management, Baloise demonstrates that
it is a reliable partner to regulatory authorities, customers,
investors and society.
Baloise meets various regulatory obligations such as the Swiss
Solvency Test (SST), Solvency II, the Own Risk and Solvency
Assessment (ORSA) and the requirements for internal control
systems (IKS), and in doing so provides regular reports on its
risk and solvency situation to the regulators. Fulfilment of these
requirements ensures that Baloise reduces unwanted risks to
the greatest possible extent and remains solvent even under
adverse circumstances so that it is always able to meet its
obligations to its customers.
The calculation methods stipulated by the Swiss Solvency
Test and the Solvency II guidelines provide the basis for the
quantitative risk measurement of all business and financial
market risks. Risk measurement metrics are used to calculate
a target capital figure (capital requirement). The available
capital, or risk-bearing capital, is continuously compared against
this target capital.
This combination of risk modelling and analysis of specific
risks as described above ensures that Baloise maintains an
adequate overview of the prevailing risk situation at all times.
The overall risk situation is presented in the Own Risk and
Solvency Assessment (ORSA), which is discussed with the
decisionmakers as a basis for developing appropriate measures.
The ORSA reports are also sent to the regulatory authorities.
The purpose of the internal control system is to ensure
compliance with laws and regulations, the reliability of the
financial reporting and the effectiveness of the business pro-
cesses in order to support the Company in achieving its goals.
In implementing the internal control system, Baloise is pursuing
a strategy of increasing risk awareness at all levels of the
Company and focusing on the identification and management
of key risks faced by the Company that could pose a threat to
the proper functioning of business operations and thus to the
success of the Company. Using the internal control system, risks
for Baloise and its stakeholders can be identified at an early
stage and effectively mitigated.
Disclosures made in the financial condition report (Baloise
Group and its Swiss companies) and the Solvency and Financial
Condition Report (European Economic Area) inform the market,
the customers and investors about the most important findings
of the quantitative solvency measurement and thus the strenght
of capital and the risks taken. This reporting also promotes
market discipline and thus also the stability of the financial
sector.
Baloise’s risk management team proactively participates
in discussions with its partners, thereby contributing to society
and to a better understanding of the future risks for the insurance
industry. For instance, Baloise is a member of the Swiss Insurance
Association (SVV). Both through its work with the association
and its direct cooperation with the regulatory authorities it
fulfills its responsibility by providing support for subject-specific
industry surveys and the development of the regulatory system
by providing data, analyses and assessments.
The ongoing optimisation of income based on risk / return
criteria as part of strategic risk management will secure the
long-term stability of Baloise and be of benefit to customers
and investors.
The risk models, which use quantitative methods to assess all
business risks and financial market risks in all strategic units,
additionally form the basis for strategic discussions about
Baloise’s risk appetite. Strategic risk steering within the limits
of the established risk appetite offers a clear picture of the risks
involved in opening up new business lines and of how to optimise
78
Baloise Group Annual Report 2020
Sustainable business management
Risk management
the risk / return profile of existing business. In the area of
investment, for example, the aim is to achieve the highest
possible expected return with the lowest possible risks. This
will ensure the long-term stability of Baloise, benefiting both
its customers and its investors.
By establishing sustainability criteria in the investment and
underwriting process, the risks for customers and investors
are reduced and a positive effect is achieved for the environment
and society.
The integration of environmental, social and corporate gover-
nance (ESG) factors into the investment process benefits the
environment, society, customers and investors. Investment risks
are reduced in the long term by investing in companies whose
management of ESG risks is categorised as good to excellent.
These companies are more resilient in times of crisis and
downside risks in particular can be mitigated. This benefits the
environment and society as a whole, as these companies reduce
their negative impact or even generate a positive impact. Cus-
tomers and investors benefit indirectly from the positive impact
on society as a whole and directly from the long-term positive
effects of this investment strategy on the risk / return ratio.
Sustainability criteria are also increasingly being included
in the underwriting process, and are currently being incorporated
into the underwriting guidelines. In future, engagement in the
insurance business will be developed over the long term in
accordance with sustainability criteria (primarily through new
business for industrial customers and key accounts), risks will
be reduced and a positive contribution made to the environment
and society.
Baloise’s capital base, which has a positive impact on the
security of investors and customers, is also rated positively
from an external view.
The Standard & Poor’s rating of ‘A + with a stable outlook’ is
evidence that Baloise’s excellent capitalisation is also recog-
nised by third parties. Standard & Poor’s also takes a favourable
view of the Baloise’s strategic risk management, risk culture,
and risk controls. These are aspects that have a positive impact
on the security of our investors and our customers.
Baloise was able to respond quickly and comprehensively to
the Covid-19 pandemic and the associated challenges.
Due to the governance structures and risk management pro-
cesses Baloise has in place, it was able to respond quickly and
comprehensively to the Covid-19 pandemic and effectively
reduce the risks and the negative impact for the Group and its
stakeholders. For example, the crisis management team and
the business continuity management (BCM) team were quickly
able to ensure the continuation of business operations and the
IT department provided the necessary resources within a very
short space of time to enable virtually the entire workforce to
work from home.
www.baloise.com/risk-management
79
Baloise Group Annual Report 2020
Baloise Group Annual Report 2020
Sustainable business management
Sustainable business management
Commitment to art
The Baloise Group’s commitment to art
Art provides a space for reflection and a lens through which to view the world in a different way. It enriches
our lives and stimulates discussion. The Baloise art collection is an important part of the Company’s
corporate culture, as Baloise believes that the privilege of owning art comes with an obligation to make
it accessible to the wider public. In an extension of this principle, the Company operates a website that
covers all aspects of Baloise’s activities in the arts sector. As well as presenting the themed exhibitions
at the Baloise Art Forum, the website www.baloiseart.com also provides some glimpses into the collection
itself, showcasing a growing selection of artists and their work. It also includes a section that features
all recipients of the Baloise Art Prize, now in its 23rd year.
CORPORATE COLLECTING – AN IMPORTANT ASPECT OF THE
CULTURE AT BALOISE
The primary objective of the collection is not to achieve mone-
tary gain, but to integrate spiritual and creative values into the
Company’s corporate culture. Since the late 1940s, the Baloise
art works have always been accessible both to employees and
to visitors. The collection is on display in foyers, corridors,
meeting rooms and offices, as well as in reception rooms that
are open to the public. Baloise is of the opinion that works of
art ought to be seen so that they enrich lives, inspire reflection
and provoke discussion.
BALOISE ART PRIZE
Encouraging an understanding and enjoyment of art is as much
a part of the corporate culture as fostering new talent – both
within Baloise and externally, in the arts sector. For many years,
Baloise training and development programmes have provided
access to careers with substance. Those benefiting include
apprentices, interns and temporary student workers, while the
Company’s established graduate trainee programme gives its
participants a deep insight into various parts of the business
and thus provides the ideal preparation for a management or
specialist role. For all of these people, Baloise offers a launch-
pad for a long and successful future.
Its commitment to sponsoring modern art – through acquisi-
tions for its own collection and in the form of the Baloise Art Prize
– also represents part of this approach. It is Baloise’s way of
supporting the development of young and emerging artistic talent.
Since 1999, Baloise has been awarding the annual Baloise
Art Prize at Art Basel, an international art fair. Two talented
emerging artists each receive CHF 30,000 in prize money, which
is awarded during a ceremony at the fair. After the announce-
ment at the Art Basel media conference, both the winners and
the galleries enjoy considerable attention at this globally
significant event.
Although individual countries eased their lockdowns in
June 2020, the global situation remained too precarious to hold
the Art Basel fair. The general health and safety risks for all
attendees, the financial risks for exhibitors and partners and the
persistent challenges in international travel were simply too great.
The cancellation of the art fair also meant that the competition
entries could not be judged and that Baloise was not able to award
its prize.
ART AT THE NEW BALOISE PARK COMPLEX
The Group headquarters at Baloise Park, which opened in summer
2020, also provide space to display the Baloise collection. The
publicly accessible Art Forum on the ground floor presents two
exhibitions a year on different themes, and in keeping with the
Baloise corporate philosophy, the upper floors also display works
from the collection in specially provided spaces – the ‘etagères’.
Digital displays, such as the mobile table in the entrance
hall and the screens on the upper floors, provide insights into
the collection, which comprises more than 1,500 works. This
form of digital presentation is intended to offer a different
experience of the artworks while also providing access to the
entire collection. The mobile table on the ground floor also
presents an overview of the Company’s history, milestones of
the construction of the new headquarters and Baloise’s engage-
ment activities.
On the newly created plaza in front of its headquarters,
Baloise has installed the bronze sculpture ‘Drittes Tier’ (2017)
80
Baloise Group Annual Report 2020
Baloise Group Annual Report 2020
Sustainable business management
Sustainable business management
Commitment to art
by Thomas Schütte, which stands 3.5 metres tall. Thomas
Schütte describes the sculpture as a mythical creature made
up of various animals. It has the head of an antlerless moose,
a mixture of different paws and hind legs, an indeterminable
torso and the tail fin of a whale. But the most unusual thing
about this gentle giant is that it can ‘breathe’, which makes the
sculpture come to life. The artist also accepted Baloise’s invi-
tation to inaugurate the new Art Forum at Baloise Park with an
exhibition of works from his own collection curated specifically
to complement this space. This opening exhibition will be on
display until 30 April 2021.
THE ART COLLECTION
New acquisitions for the collection are made by the Baloise art
commission, which comprises six art-loving employees from
various parts of the company and one external adviser. They focus
on acquiring works on paper by contemporary artists. The decisive
factor for inclusion in the collection is the persuasive quality of
the work and its emotional and intellectual connection to the hopes
and fears of our time. This acquisition policy also allows the art
commission to include the winners of the Baloise Art Prize in the
collection, and thus to help shape the way in which it promotes
art. For example, works by 2013 winner Jenni Tischer (born 1979)
and 2015 winner Mathieu Kleyebe Abonnenc (born 1977) have
been added to the collection.
The panel of judges at the time provided the following explana-
tion for their selection: “The combination of material, colour,
form and text is a central design principle of Jenni Tischer’s
three-dimensional works. She incorporates references to
modernism into the context of her own works, while undermin-
ing them at the same time. Her installations resemble stage sets
filled with a wealth of objects that seem to tell stories but
preclude interpretation at the same time. Political concerns such
as authorship, production and feminism resonate in Jenni
Tischer’s works, specifically in her choice of technique. She often
exploits typically feminine activities like embroidery, sewing or
weaving, which she transports into the context of art with great
subtlety.” Her installation of works produced specifically for the
Museum Moderner Kunst Stiftung Ludwig Wien (MUMOK) was
gifted to the museum.
Some of the purchases made for Baloise’s collection orig-
inated from a relief that previously adorned the facade of the
former Baloise building at Aeschengraben 25 in Basel, which
was designed by Hermann Baur. The relief was made up of
triangular aluminium tiles arranged in a geometric pattern that
stretched horizontally along the wall of the building and created
the effect of several winding ribbons.
Jenni Tischer
‘Mood’, 2016, 36 x 51,7 cm (left)
‘Pattern Recognition (sw) II’, 2016, 41,7 x 28,2 cm (right)
Collection of Baloise Group
81
PUTTING THE SPOTLIGHT ON ART AT BALOISE
The opening of Baloise Park marks the beginning of a new era in
the Baloise Group’s corporate history. This new chapter represents
an ideal opportunity to publicly showcase the Company’s com-
mitment to art in the form of a book for the first time. Providing a
concentrated insight into the art collection, the publication features
works on paper and photographs by 66 international artists from
the 1960s onwards. From the beginning, Baloise’s strategy has
been to follow individual artists’ output over an extended period,
and to acquire larger groups of works by each one. The book
presents a selection of works, mostly consisting of parts of those
groups. The works are accompanied by authoritative commentary
from distinguished experts. The book is available at the Group
headquarters and in bookshops (ISBN 978-3-7757-4641-0). A
complete overview of the art collection is provided on the website
at www.baloiseart.com.
Mathieu Kleyebe Abonnenc
‘Vieux-Wacapou. Le dégrad’, 2017 / 18, 120 x 180 cm (above)
‘Vieux-Wacapou. Le cimetière’, 2018, 120 x 180 cm (below)
Collection of Baloise Group
Courtesy Künstler und Marcelle Alix, Paris
Baloise Group Annual Report 2020
Sustainable business management
Commitment to art
Tischer creates works of art that are finely detailed but at the same
time reduced to the essential, lending a certain gravity and
elegance to materials and techniques that are not commonly
associated with art. They express an approach that Tischer
described as follows in a conversation with art theorist Ines
Kleesattel: “The shapes are inspired by a wide range of devices
such as looms, weaving frames and spindles, but also measuring
instruments, etc. and their size always relates to the bodies that
operate them. (…) The slow pace of my creative process, the
reduction of the form and my selection of materials and colours
are also inspired by attitudes that are transferable to contexts
outside the artistic sphere. I find it more productive to think about
how I produce things and perform tasks rather than reflecting
topics such as current political events in my work.”
The French artist Mathieu Kleyebe Abonnenc has been
working on a series of large-scale colour photographs entitled
‘Vieux-Wacapou’ since 2017. These have been taken in French
Guiana, a French overseas department on the north-eastern coast
of South America, where the artist lived as a child.
“The title of the series refers to a place on the river Maroni
that was the destination of Abonnenc’s travels into the country’s
heartland. Immigrants from the English-speaking island state of
Saint Lucia and the neighbouring French Antilles settled in this
village surrounded by rainforest back at the start of the 20th
century. Most of the settlers were descendants of people from
Africa who had worked on the Antilles as slaves since the 17th
century. Over the decades, Wacapou evolved into a prospering
settlement where gold panning was the main source of income.
In the mid-1980s, the artist’s mother decided to buy the house of
Joseph Bernes, a former gold panner, in this village. But the out-
break of a post-colonial civil war in neighbouring Suriname in the
summer of 1986 thwarted her plan to spend some time living in
this wooden house on stilts with her family. The border village
became a dangerous place to be.
More than 30 years lie between the violent conflict in
Suriname and Abonnenc’s decision to travel to Wacapou. The
photography series ‘Vieux-Wacapou’ documents the artist’s
search for the place that he knew from his childhood. Today, the
ruins of this deserted settlement are covered in dense vegetation.
Abonnenc had to proceed like an archaeologist to uncover the
secrets lying hidden beneath the jungle. As the eyes adjust to the
murky twilight, they begin to recognise remnants of the former
village and its history: stilts that used to support houses, crosses
from the graveyard, glass bottles, the concrete steps leading to
the jetty. Abonnenc’s photographs of the ruins of Wacapou village
capture a rich and complex blend of European colonial heritage,
the passage of time and family history,” explains Martin Schwander,
artistic adviser to Baloise.
www.baloiseart.com
82
Baloise Group Annual Report 2020
Sustainable business management
Commitment to art
BUILDING BALOISE PARK
The buildings by Diener & Diener, Miller & Maranta and Valerio
Olgiati are presented in a publication entitled Building the Baloise
Park. This includes numerous illustrations and plans, as well as
interviews with the architects. The new headquarters of the Baloise
insurance group were designed by architectural firm Diener &
Diener. With its tall windows stretching over two floors, the
smallest of the three buildings sets the appropriate tone for a
prestigious head office building. Valerio Olgiati was responsible
for the office building with its striking, russet brown-tinted exterior
that gives it a very distinct identity. The most eye-catching build-
ing of the ensemble is the high-rise block designed by architect
duo Miller & Maranta. Its main occupant will be the Mövenpick
Hotel, which will be furnished by Matteo Thun, the internationally
renowned Milanese designer and interior architect.
The final publication is available at the Group headquarters
and can also be ordered from the publisher, Christoph Merian
Verlag (ISBN 978-3-85616-928-2).
83
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable Business Management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
Corporate
Governance
CORPORATE GOVERNANCE REPORT ............................. 85
1. Structure of the Baloise Group and shareholder base ... 86
2. Capital structure ........................................................ 87
3. Board of Directors ...................................................... 88
4. Corporate Executive Committee ................................. 98
5. Remuneration, shareholdings and loans .................. 100
6. Shareholder participation rights .............................. 100
7. Changes of control and poison-pill measures ............ 101
8. External auditors ...................................................... 102
9. Information policy ..................................................... 102
Appendix 1: Remuneration Report ................................... 104
Appendix 2: Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 130
Unterkapitel Baloise Group Annual Report 2020
Corporate Governance
Corporate Governance Report
Transparent Corporate Governance
Baloise is a company that adds value, and, as such, we attach great importance to practising sound,
responsible corporate governance.
Operating in line with the requirements of the Swiss Code of
Best Practice and the SIX Corporate Governance Guidelines,
Baloise strives to foster a corporate culture of high ethical
standards that emphasises the integrity of the Company and its
employees. Baloise firmly believes that high-quality corporate
governance has a positive impact on its performance.
This chapter reflects the structure of the SIX Corporate
Governance Guidelines as amended on 20 June 2019 in order
to improve comparability with previous years and with other
companies. It includes the requirements of economiesuisse’s
Swiss Code of Best Practice for Corporate Governance, Appendix
1 of which contains recommendations on the remuneration paid
to the Board of Directors and the Executive Committee. In item
5 of its Corporate Governance Report, Baloise publishes the
principles used to determine the content and scope of the dis-
closures on remuneration in the Remuneration Report (Appen-
dix 1 to the Corporate Governance Report, page 104 onwards).
The information contained in the Corporate Governance
Report refers to the situation on the balance sheet date
(31 December 2020). Additional reference is made to material
changes occurring between the balance sheet date and the
print deadline for the Annual Report.
Sustainable business management plays an important role
at Baloise and, in addition to the information provided in the
Corporate Governance Report, is described in a dedicated
section of the Annual Report from page 35 onwards.
86
▸
1. STRUCTURE OF THE BALOISE GROUP
AND SHAREHOLDER BASE
Structure of the Baloise Group
Headquartered in Basel, Switzerland, Bâloise Holding is a public
limited company that is incorporated under Swiss law and listed
on the Swiss Exchange (SIX). The Baloise Group had a market
capitalisation of CHF 7,686 million as at 31 December 2020.
Information on Baloise shares can be found from
▸
page 8 onwards.
Significant subsidiaries, joint ventures and associates
as at 31 December 2020 can be found from page 274
on wards in the notes to the consolidated annual financial
statements, which form part of the Financial Report.
Segment reporting by region and operating segment
can be found from page 213 onwards in the notes to the
consolidated annual financial statements within the
Financial Report.
The Baloise Group’s operational management structure
is presented on page 100 onwards.
▸
▸
Shareholder base
As a public company with a broad shareholder base, Bâloise
Holding is a member of the SMI Mid (SMIM) Index.
Shareholder structure
A total of 24,020 shareholders were registered in Bâloise
Holding’s share register as at 31 December 2020. The number
of registered shareholders had increased by 12.1 per cent
compared with the previous year. The “Significant shareholders”
section on page 300 provides information on the structure of
the Company’s shareholder base as at 31 December 2020.
The reports that were submitted to the issuer and to SIX
Swiss Exchange AG’s disclosure office during the reporting year
in compliance with article 120 of the Federal Act on Financial
Market Infrastructures and Market Conduct in Securities and
Derivatives Trading (FinfraG) and were published on the latter’s
electronic reporting and publication platform in compliance with
article 124 FinfraG can be viewed using the search function at
www.six-exchange-regulation.com/en/home/publications/
significant-shareholders.html
Baloise Group Annual Report 2020
Corporate Governance
Corporate Governance Report
Treasury shares
Bâloise Holding held (directly and indirectly) 3,328,396 treasury
shares (6.8 per cent of the issued share capital) as at 31 Decem-
ber 2020.
Bâloise Holding’s equity
The table below shows the changes in equity during the last
three reporting years.
Cross-shareholdings
There are no cross-shareholdings based on either capital
ownership or voting rights.
2. CAPITAL STRUCTURE
Dividend policy
Bâloise Holding pursues a policy of paying consistent, earnings-
related dividends. It uses other dividend instruments such as
share buy-backs and options to supplement conventional cash
dividends. Shareholders have received a total of CHF 1,986.7 mil-
lion from cash dividends and share buy-backs over the last
five years.
Year (CHF million)
2016
2017
2018
2019
2020
Total
Cash dividends
Share buy-backs
Total
260.0
273.3
292.8
312.3
312.3 1
1,450.7
54.8
63.3
135.1
190.0
92.8
536.0
314.8
336.6
427.9
502.3
405.1
1,986.7
All figures stated as at 31 December.
1 Proposal to the Annual General Meeting on 30 April 2021.
CHANGES IN BÂLOISE HOLDING’S EQUIT Y
(BEFORE APPROPRIATION OF PROFIT)
31.12.2018
31.12.2019
31.12.2020
4.9
11.7
6.4
566.1
412.6
4.9
11.7
8.3
683.2
552.5
4.9
11.7
9.2
922.3
372.5
– 206.7
795.0
– 397.7
862.9
– 491.3
829.3
CHF million
Share capital
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
Treasury shares
Equity attribut-
able to Bâloise
Holding
The share capital of Bâloise Holding totals CHF 4.88 million and
is divided into 48,800,000 dividend-bearing registered shares
with a par value of CHF 0.10 each. The Annual General Meeting
on 30 April 2021 will be asked to reduce the share capital to
45,800,000 registered shares with a par value of CHF 0.10 each
and to cancel 3,000,000 registered shares. The shares to be
cancelled were repurchased under the share buy-back pro-
gramme 2017 to 2020.
Authorised and conditional capital;
other financing instruments
Authorised capital
A resolution adopted by the Annual General Meeting on
26 April 2019 has authorised the Board of Directors until
26 April 2021 to increase the Company’s share capital by up
to CHF 400,000 by issuing up to 4,000,000 fully paid-up regis-
tered shares with a par value of CHF 0.10 each (see article 3 [4]
of the Articles of Association). The Annual General Meeting on
30 April 2021 will be asked to extend the authorised capital by
two years to 30 April 2023 by way of an amendment to the
Articles of Association.
www.baloise.com/rules-regulations
87
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Corporate Governance Report
Conditional capital
The 2004 Annual General Meeting created conditional capital.
This capital enables the Company’s share capital to be increased
by up to 5,530,715 registered shares with a par value of CHF 0.10
each (see article 3 [2] of the Articles of Association). This con-
stitutes a nominal share capital increase of up to CHF 553,071.50.
Conditional capital is used to cover any option rights or
conversion rights granted in conjunction with bonds and similar
securities. Shareholders’ pre-emption rights are disapplied.
Holders of the pertinent option rights and conversion rights are
entitled to subscribe for the new registered shares. The Board
of Directors may restrict or disapply shareholders’ pre-emption
rights when issuing warrant-linked bonds or convertible bonds
in international capital markets (see article 3 [3] of the Articles
of Association).
www.baloise.com/rules-regulations
Other equity instruments
The Company has no profit-participation certificates.
The Baloise Group’s consolidated equity
The Baloise Group’s consolidated equity amounted to
CHF 6,985.7 million on 31 December 2020. Details of changes
in consolidated equity in 2019 and 2020 can be found in the
consolidated statement of changes in equity on pages 140 and
141 in the Financial Report. All pertinent details relating to
2018 can be found in the consolidated statement of changes
in equity on page 124 in the Financial Report within the 2019
Annual Report.
Bonds outstanding
Bâloise Holding and Baloise Life Ltd (with Bâloise Holding acting
as guarantor) have issued bonds publicly. As at the end of 2020,
a total of 13 public bonds were outstanding. On 4 February, Baloise
Holding issued a further bond in an amount of CHF 250 million.
Details of outstanding bonds can be found on pages 256 and 298
and on the website.
www.baloise.com/bonds
Credit rating
On 24 August 2020, credit rating agency Standard & Poor’s
confirmed the rating of the Swiss units Baloise Insurance Ltd and
Baloise Life Ltd as “A +” with a stable outlook. Standard & Poor’s
awarded this credit rating in recognition of Baloise’s excellent
capitalisation – which is comfortably above the AAA level
according to the S&P capital model – as well as its high opera-
tional profitability, robust risk management and solid competi-
tive position in its profitable core markets. Information about
the ratings of Bâloise Holding Ltd, the Belgian subsidiary Baloise
Belgium NV and the German subsidiary Basler Sachver-
sicherungs-AG, which were also reaffirmed, can be found on the
website.
www.baloise.com/rating
3. BOARD OF DIRECTORS
Election and term of appointment The Board of Directors con-
sisted of ten members last year. Each member of the Board of
Directors has been elected for a term of one year at a time. As
at 31 December 2020, the average age on the Board of Directors
was 60 years.
Members of the Board of Directors
All members of the Board of Directors (including the Chairman)
are non-executives. They were not involved in the day-to-day
management of any Baloise Group companies in any of the three
financial years immediately preceding the reporting period, and
they maintain no material business relationships with the Baloise
Group.
During the reporting year, Dr Andreas Beerli, Dr Andreas
Burckhardt, Christoph B. Gloor, Hugo Lasat, Christoph Mäder,
Dr Markus R. Neuhaus, Dr Thomas von Planta, Thomas Pleines,
Professor Hans-Jörg Schmidt-Trenz and Professor Marie-Noëlle
Venturi - Zen-Ruffinen were re-elected as members of the Board
of Directors for a one-year term until the end of the next Annual
General Meeting.
With the exception of the Chairman Dr Andreas Burckhardt,
who is not available for re-election, all members of the Board
of Directors are standing for re-election at the Annual General
Meeting on 30 April 2021. Dr Andreas Burckhardt (69) joined
the Baloise Group as Secretary General and performed this role
for six years. He took up a position on the Board of Directors of
88
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Corporate Governance
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Statutory rules concerning the number of permitted activities
The Articles of Association contain a provision (article 33)
concerning the maximum number of directorships that can be
held outside the Company. Subsection 1 stipulates the principle
that the number of external directorships held by members of
the Board of Directors or Corporate Executive Committee must
be compatible with the commitment, availability, capabilities
and independence required of them in order to perform their
duties as members of the Board of Directors or Corporate
Executive Committee. Subsections 2 and 3 then specify numer-
ical restrictions.
Interlocking directorates
There are no interlocking directorates.
Bâloise Holding Ltd in 1999 and became Chairman of the Board
in 2011. The Board of Directors of Bâloise Holding has decided
to nominate Dr Thomas von Planta for the position of Chairman
of the Board at the Annual General Meeting on 30 April 2021.
The 59-year-old Swiss national has been a member of the Board
of Directors since 2017 and has contributed to the Chairman’s
Committee, the Investment Committee and the Audit and Risk
Committee over the course of the last three and a half years or
so. To ensure continuity, the Vice-Chairman and Chairman of
the Audit and Risk Committee, Dr Andreas Beerli, will retain his
position on the Board of Directors for a further term. The Board
of Directors has approved an exemption to the rule on age limits
for this purpose (Section A 1.3 of the Organisational Regulations).
The Board of Directors will propose that the Annual General
Meeting elect Karin Lenzlinger Diedenhofen as a new member
of the Board of Directors. She is extremely well connected in
the Swiss business community, has experience in the media
sector and will bring the perspective of an entrepreneur to the
Board of Directors.
Further information on the members of the Board of Directors
can be found on the website.
www.baloise.com/board-of-directors
MEMBERS
Dr Andreas Burckhardt, Chairman (since 2011), Basel
Dr Andreas Beerli, Vice-Chairman (since 2018),
Oberwil-Lieli
Christoph B. Gloor, Riehen
Hugo Lasat, Kessel-Lo (B)
Christoph Mäder, Hergiswil
Dr Markus R. Neuhaus, Zollikon
Dr Thomas von Planta, Zurich
Thomas Pleines, Munich (D)
Prof. Dr Hans-Jörg Schmidt-Trenz, Hamburg (D)
Prof. Dr Marie-Noëlle Venturi - Zen-Ruffinen,
Crans-Montana
C: Chair, DC: Deputy Chair, M: Member.
Chairman’s
Committee
Audit and Risk
Committee
Remuneration
Committee
Investment
Committee
Nationality
Born in
Appointed in
C
DC
M
M
C
DC
M
M
M
C
M
DC
C
DC
M
M
CH
CH
CH
B
CH
CH
CH
D
D
CH
1951
1951
1966
1964
1959
1958
1961
1955
1959
1975
1999
2011
2014
2016
2019
2019
2017
2012
2018
2016
89
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Corporate Governance
Corporate Governance Report
DIVERSITY ON THE BOARD OF DIRECTORS
Per cent
Professional background / experience / expertise *
Nationality
Insurance
Banking
Legal and governance
Risk management
CEO
Term of appointment
< 5 years
5 – 10 years
> 10 years
* More than one category may apply.
60.0
30.0
10.0
Switzerland
Germany
Belgium
40.0
40.0
40.0
30.0
60.0
Gender
Men
Women
70.0
20.0
10.0
90.0
10.0
Internal organisation
Functions and responsibilities of the Board of Directors
Subject to the decision-making powers exercised by shareholders
at the Annual General Meeting, the Board of Directors is the
Company’s ultimate decision-making body. Decisions are taken
by the Board of Directors unless, on the basis of the Organisa-
tional Regulations, authority on the matter is delegated to the
Chairman of the Board of Directors, its committees, the Group
CEO or the Corporate Executive Committee.
Article 716a of the Swiss Code of Obligations (OR) and clause
A3 of the Organisational Regulations state that the Board of
Directors’ main functions and responsibilities are to act as the
Company’s ultimate managerial and supervisory body, to
oversee the Company’s finances and to determine its organisa-
tional structures.
www.baloise.com/rules-regulations
Information on the Board of Director’s role in corporate social
and environmental responsibility can be found on page 35 in
the Sustainable Business Management chapter.
Committees of the Board of Directors
The Board of Directors has four committees, which support it in
its activities. These committees report to the Board of Directors
and submit proposals and motions. The Investment Committee
and the Remuneration Committee have their own decision-mak-
ing powers.
The committees appointed by the Board of Directors gener-
ally consist of four members, who are newly elected every year
by the Board of Directors. Article 7 ERCO requires the members
of the Remuneration Committee to be elected individually by the
Annual General Meeting. The Chairman and Vice-Chairman of the
Board of Directors are ex officio members of the Chairman’s
Committee. The Chairman of the Board of Directors is not allowed
to sit on the Audit and Risk Committee. The committees’ basic
functions and responsibilities are specified in the Organisational
Regulations. Additional specific regulations applicable to indi-
vidual committees govern administrative and other aspects.
www.baloise.com/rules-regulations
90
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Functions and responsibilities of the committees
The Chairman’s Committee discusses key transactions, espe-
cially those involving strategic or personnel- related matters.
The Chairman’s Committee also performs the function of
a Nominations Committee and prepares personnel- related
matters that fall within the remit of the Board of Directors. The
Chairman’s Committee regularly discusses succession planning
for the Board of Directors. It focuses on the skills, experience
and specialisations of the members of the Board of Directors
and the requirements of the insurance group. Potential candi-
dates are internally identified or advisers are brought in to find
them. They are then proposed to the Board of Directors for
nomination.
The Investment Committee’s main responsibilities are to
oversee the Baloise Group’s investment activities, define the
basic principles of its investment policy, specify the asset
allocation strategy for all strategic business units and devise
the relevant investment plan.
The Remuneration Committee proposes to the Board of
Directors – for subsequent approval by the Annual General
Meeting – the structure and amount of remuneration paid to the
members of the Board of Directors and of the salaries paid to
the members of the Corporate Executive Committee. Under ERCO,
the remuneration paid to the Board of Directors and the Corpo-
rate Executive Committee has to be approved by the Annual
General Meeting. The Remuneration Committee approves the
target agreements and performance assessments that are
applied to the Corporate Executive Committee members in order
to determine their variable remuneration. It also sanctions the
remuneration policies applicable to the Corporate Executive
Committee members and ensures that they are being correctly
implemented. It approves the variable remuneration granted to
individual members of the Corporate Executive Committee; this
remuneration has to be within the maximum amount approved
by the Annual General Meeting. Furthermore, it specifies the
total amount available in the performance pool.
The Audit and Risk Committee supports the Board of
Directors in its non-delegable overarching supervisory and
financial oversight functions (article 716a OR) by ascertaining
whether the internal and external control systems, including
risk management, are well organised and function properly, by
assessing the situation with respect to compliance in the
Company and by forming its own view of the Company’s separate
and consolidated annual financial statements. It receives reg-
ular reports on the work and findings of Group Internal Audit
and on cooperation with the external auditors.
Meetings of the Board of Directors and its committees
The Organisational Regulations stipulate that the full Board of
Directors must meet as often as business requires, but no fewer
than four times a year.
www.baloise.com/rules-regulations
91
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Response of the Board of Directors to Covid-19
The Board of Directors received regular briefings from the
Corporate Executive Committee on action taken by the
Covid-19 working group formed for this purpose by the
strategic business units. The Board was able to contribute
its experience and expertise at the six extraordinary
meetings which members could choose to attend in person
or by telephone. The meetings dealt systematically with
the matters of critical importance to the Baloise Group:
maintaining operations and IT, staff management and
culture, impact on the insurance and reinsurance business
and on solvency, and performance of the Group’s invest-
ments. The Board of Directors was also regularly briefed at
its ordinary meetings and between meetings. It therefore
continued to actively carry out its management role during
the Covid-19 pandemic.
The full Board of Directors of Bâloise Holding met on seven
occasions in 2020 and held a further six conference calls because
of the Covid-19 pandemic. Each one of these meetings was
attended by the full complement of members. All members of
the relevant committee in each case attended every one of the
additional 16 committee meetings. This means that the Board
of Directors achieved an overall meeting attendance rate of
100 per cent. Meetings of the Board of Directors and its com-
mittees usually last half a working day each.
The Chairman’s Committee convened five times in 2020, which
included one two-day strategy meeting. The Investment Commit-
tee met on four occasions. The Audit and Risk Committee held five
meetings, and the Remuneration Committee convened twice.
Meetings of the Board of Directors are regularly attended
by members of the Corporate Executive Committee. Meetings
of the Chairman’s Committee are usually attended by the Group
CEO and the Head of Corporate Division Finance. Those present
at Audit and Risk Committee meetings are the Head of Corporate
Division Finance, the Head of Group Internal Audit and, occa-
sionally, representatives of the external auditors, the Head of
Risk Management and the Head of Compliance. The main
attendees at Remuneration Committee meetings are the Group
92
CEO and the Head of Group Human Resources. Meetings of the
Investment Committee are usually attended by the Group CEO,
the Head of Corporate Division Asset Management, the Head
of Investment Strategy and Investment Control, the Head of
Portfolio Management and the Head of Real Estate. The Secre-
tary to the Board of Directors attends all meetings of the full
Board of Directors and those of its committees.
Self-evaluation
Every two years, a comprehensive self-evaluation is carried out
in the full Board of Directors, in the Investment Committee and
in the Audit and Risk Committee. The results are then discussed
in each body. The seminar planned for December 2020 could
not take place because of Covid-19-related travel restrictions
and has been postponed until 2021.
Training and development
In preparation for their new role, the members of the Board of
Directors participate in a two-day introductory programme and
then receive ongoing training (at least once a year) in half-day
seminars on specific topics. The seminar planned for Decem-
ber 2020 could not take place because of Covid-related travel
restrictions and has been postponed until 2021.
Succession planning
Succession planning for the Board of Directors and the Corporate
Executive Committee is the responsibility of the Chairman’s
Committee. In appointing successors, care is taken to ensure
that the composition of the Board of Directors is balanced in
terms of the experience and knowledge of its members and their
nationality, term of appointment and gender (see diversity charts
on page 90). Any restrictions on availability and potential
conflicts of interest rising from other mandates are also taken
into account. In particular, the Board of Directors is endeavour-
ing to increase the proportion of women on the Board of
Directors, as this was reduced when Karin Keller Sutter stepped
down at the end of 2018. The Organisational Regulations state
that the term of appointment for members of the Board of
Directors usually ends at the Annual General Meeting that follows
the member’s 70th birthday (age limit). There are changes to the
Board of Directors on an ongoing basis. In recent years, two
members retired from the Board of Directors after terms of 18
Baloise Group Annual Report 2020
Corporate Governance
Corporate Governance Report
and 17 years respectively. When the Chairman steps down in
2021, the Board of Directors will lose its longest-serving member.
Dr Burckhardt has served on the Board for 21 years, including
eleven years as a member and ten as Chairman. The average
term of office is 5.9 years. The nomination of Ms Karin Lenzlinger
Diedenhofen will increase the proportion of female members to
20 per cent.
Division of authorities, functions and responsibilities between
the Board of Directors and the Corporate Executive Committee
The division of authorities, functions and responsibilities
between the Board of Directors and the Corporate Executive
Committee is governed by law, the Articles of Association and
the Organisational Regulations. The latter are reviewed on an
ongoing basis and updated as changing circumstances require.
www.baloise.com/rules-regulations
Tools used to monitor and obtain information on the
Corporate Executive Committee
Group Internal Audit reports directly to the Chairman of the Board
of Directors.
Effective risk management is essential for any insurance
group. This is why Baloise has devoted a separate chapter to
the subject of financial risk management: from page 77 onwards
and in the Financial Report starting on page 171.
The members of the Board of Directors receive copies of the
minutes of Corporate Executive Committee meetings for their
information. The Chairman of the Board of Directors may attend
meetings of the Corporate Executive Committee at any time.
93
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Andreas Burckhardt (1951, Switzerland, Dr iur., lawyer)
has been a member of the Board of Directors since 1999 and its Chairman since 29 April 2011.
He studied jurisprudence at the universities of Basel and Geneva. He worked in the legal
department of Fides Treuhandgesell schaft from 1982 to 1987 and served as Secretary
General of the Baloise Group from 1988 to 1994. He was director and head of the Basel
Chamber of Commerce from 1994 to April 2011. In this role he sat on various governing
bodies of national and regional business organisations. From 1981 to 2011 he performed
various political functions in the Basel civic municipality and in the canton of Basel-Stadt,
and from 1997 to 2011 he served on the Great Council of the Canton of Basel-Stadt (as
Chairman in 2006 and 2007). Dr Andreas Burckhardt is Chairman of the Board of Governors
of the Swiss Tropical and Public Health Institute, Basel. He is also a member of the Executive
Committee of economiesuisse and sits on the Executive Board of the Employers’ Federation
for Basel. Dr Andreas Burckhardt performs a non-executive function as Chairman of Baloise’s
Board of Directors.
Andreas Beerli (1951, Switzerland, Dr iur.)
has been a member of the Board of Directors since 2011. He studied law at the University
of Basel. In 1979, he started working as an underwriter for the German market at Swiss Re.
From 1985 to 1993, he performed various managerial roles at Baloise, with the main focus
on supervising and supporting several foreign units. He then returned to Swiss Re, where
he became a member of the Group Executive Committee in 2000, first in the United States
as Head of Swiss Re Americas and, most recently, in Zurich as Chief Operating Officer for
the entire Swiss Re Group. He acts as an independent adviser on the boards of directors
and advisory boards of companies and professional associations. He is a member of the
Advisory Board of Accenture Switzerland. Dr Andreas Beerli is an independent non-execu-
tive director.
Christoph B. Gloor (1966, Switzerland, degree in business economics HWV)
has been a member of the Board of Directors since 2014. Since November 2019, he has
been a director and limited partner in Basel-based private bank E. Gutzwiller & Cie,
Banquiers. He had previously been Chief Executive Officer of private bank La Roche &
Co AG before going on to become a member of the Executive Committee and CEO of
Notenstein La Roche Privatbank AG and Deputy Head of Wealth Management at Bank
Vontobel AG. Prior to joining La Roche & Co AG in 1998, he worked for Swiss Bank Corpora-
tion (SBC) before moving to Vitra (International). Between 2013 and 2015, Christoph B.
Gloor served as president of the Association of Swiss Private Banks and was a member of
the Board of Directors of the Swiss Bankers Association, and until the beginning of April 2019
was a member of the Board of Managing Directors of the Basel Banking Association.
Christoph B. Gloor is an independent non-executive director.
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Hugo Lasat (1964, Belgium, Master in Economic Sciences, Master in Finance)
has sat on the Board of Directors since 2016. He is the CEO of Brussels-based Degroof
Petercam Asset Management (DPAM), a member of the Board of Directors of Banque Degroof
Petercam France, President of DPAM France and a member of the Supervisory Board of
Degroof Petercam Asset Services, Luxembourg. He is also a member of the Board of Directors
of Arvestar Asset Management, Brussels. His managerial roles prior to that include CEO of
Amonis Pension Fund and CEO of Candriam Investors Group. He is a guest professor at KU
Leuven (Brussels Campus) and a member of the Financial Commission of the Belgian Red
Cross. Hugo Lasat is an independent non-executive director.
Christoph Mäder (1959, Switzerland, lawyer)
has sat on the Board of Directors since May 2019. From 2000 to July 2018, he was a member
of the Syngenta International AG executive team with responsibility for legal and tax. Until
June 2018, he was a member of the Management Board of the Basel Chamber of Commerce.
From 2006 to 2018, Christoph Mäder was a member of the Management Board of science-
industries, and between 2008 and 2014 he also served as its president. He has been
president of economiesuisse, the umbrella organisation representing Swiss business, since
October 2020. He has been a member of the Board of Directors of Lonza Group AG since
2016 and served as its Vice-Chairman since 2020. He has sat on the Board of Directors of
EMS Chemie Holding AG since 2018 and has been a member of the Board of Directors of
Assivalor AG since 2019. Christoph Mäder is an independent non-executive director.
Markus R. Neuhaus (1958, Switzerland, Dr iur., qualified tax expert)
has been a member of the Board of Directors since May 2019. He was the Chairman of the
Board of Directors of PricewaterhouseCoopers AG (PwC) from July 2012 to June 2019 and
served as its CEO for a period of nine years prior to that. He did not hold any operational
role at PwC from July 2012 and was not personally involved in the Company’s audit engage-
ment for Baloise (until 2015). Dr Markus R. Neuhaus is Vice-Chairman of the Board of
Directors of Barry Callebaut AG and Orior AG. He is a member of the Board of Directors of
Galenica AG and Jacobs Holding AG. He is Vice-Chair of the Board of Trustees of Avenir
Suisse, Vice Chairman of the Foundation Board of stars – the leaders for the next generation,
Vice-Chair of the Management Board of Zurich’s Chamber of Commerce, Chairman of
economiesuisse’s Finance and Taxation Commission and a member of the Board of Trustees
of the ETH Foundation. Dr Markus R. Neuhaus is an independent non-executive director.
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Thomas von Planta (1961, Switzerland, Dr iur., lawyer)
has been a member of the Board of Directors since 2017. Until March 2019, he was Chairman
of the Board of Directors of Bellevue Group AG, Bank am Bellevue AG and Bellevue Asset
Management AG. Previously, he had worked for Goldman Sachs in Zurich, Frankfurt and
London for around ten years and had been the interim Head of Investment Banking and
Head of Corporate Finance for the Vontobel Group in Zurich between 2002 and 2006. He is
the founder and managing director of CorFinAd AG, a company specialising in consultancy
for M&A transactions and capital market finance. He has sat on the Board of Directors of
BB Biotech AG since March 2019 and on the Advisory Board of Harald Quandt Industrie-
beteiligungen since September 2019. Dr Thomas von Planta is an independent non-exec-
utive director.
Thomas Pleines (1955, Germany, lawyer)
has been a member of the Board of Directors since 2012. From 2003 to 2005 he was CEO
and delegate of the Board of Directors at Allianz Suisse, Zurich, and from 2006 to 2010 he
was CEO of Allianz Versicherungs-AG, Munich, and an executive director at Allianz
Deutschland AG, Munich. He chairs the presidential boards of DEKRA e. V., Stuttgart, and
DEKRA e. V. Dresden; as well as the supervisory boards of DEKRA SE, Stuttgart, and
SÜDVERS Holding GmbH & Co. KG, Au near Freiburg. Thomas Pleines is an independent
non-executive director.
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Hans-Jörg Schmidt-Trenz (1959, Germany, Prof. Dr rer. pol.)
has been a member of the Board of Directors since 2018. He is a professor of economics at
Saarland University and the University of Hamburg and Founding President of the HSBA
Hamburg School of Business Administration. From 1996 to 2017, he was Chief Executive
Officer of the Hamburg Chamber of Commerce. Prof. Hans-Jörg Schmidt-Trenz is Committee
Chair of the General Council and Executive Committee of the International Chamber of
Commerce’s World Chambers Federation. He is a member of the Board of Trustees of
Hamburger Sparkasse and the Hamburg Academic Foundation, sits on the advisory board
of HIP Hamburg Innovation Port and is Chairman of the Board of Trustees of the Tafel
foundation of Hamburg-Schleswig-Holstein. Hans-Jörg Schmidt-Trenz is an independent
non-executive director.
Marie-Noëlle Venturi - Zen-Ruffinen (1975, Switzerland, Prof. Dr iur., lawyer)
has been a member of the Board of Directors since 2016. She holds a PhD and master’s
degree in law and a master’s degree in philosophy from the University of Fribourg. She is
a lawyer and honorary professor at the School of Economics and Management at the
University of Geneva, where she mainly lectures on corporate law. Professor Marie-Noëlle
Venturi - Zen-Ruffinen was a partner in the Geneva law firm Tavernier Tschanz until 2012,
and since that time has been of counsel for the firm. She is president of the Swiss Board
Institute foundation, a member of the Board of Directors of Banco Santander International SA,
a member of the Board of Directors of Ina Invest Holding AG and Ina Invest AG and a member
of the Board of Management of the Swiss Institute of Directors. Professor Marie-Noëlle
Venturi - Zen-Ruffinen is an independent non-executive director.
Secretary to the Board of Directors:
Head of Group Internal Audit:
Dr Philipp Jermann,
Rolf-Christian Andersen,
Buus (BL)
Meilen (ZH)
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4. CORPORATE EXECUTIVE COMMITTEE
Gert De Winter (1966, Belgium, MSc)
studied applied economics at the University of Antwerp. From 1988 to 2004, he performed
various roles at Accenture in Brussels for issues relating to IT and business transformation
management in the financial sector. He was made a partner at the firm in the year 2000. In
2005, he joined the Baloise Group as Chief Information Officer and Head of HR of the
Mercator insurance company in Belgium. From 2009 to 2015, Gert De Winter was Chief
Executive Officer of Baloise Insurance, which was formed in 2011 from the merger of the
three insurance companies Mercator, Nateus and Avéro. Gert De Winter has been Group
CEO since January 2016. He is a member of the Management Board of the Basel Chamber
of Commerce and the Swiss-American Chamber of Commerce.
Matthias Henny (1971, Switzerland, Dr phil.)
completed his undergraduate and postgraduate studies in physics at the University of
Basel. From 1998 to 2003, he was employed at McKinsey & Co., before switching to what
was then the Winterthur Group, where he was Head of Financial Engineering in Asset
Management until 2007. Subsequently, he was a member of the management team at AXA
Winterthur, as Head of Asset Management (until 2010) and as CFO. In 2012, Dr Matthias
Henny joined the Baloise Group. As CEO of Baloise Asset Management AG, he was respon-
sible for the administration of approximately CHF 50 billion in assets. Dr Matthias Henny
became a member of the Corporate Executive Committee in May 2017. He manages the
Corporate Division Asset Management incorporating the Investment Strategy and Investment
Controlling, Business Development, Portfolio Management, Finance, Real Estate and
Corporate Services units.
Michael Müller (1971, Switzerland, lic. oec. publ.)
graduated in economics from the University of Zurich, specialising in insurance and
accounting / finance. He began his career with Basler Versiche rungen in 1997, starting as
a management trainee, then working in Group Finance and eventually becoming Deputy
Head and, in 2004, Head of Financial Accounting for the Baloise Group. In 2009, as Head
of Finance and Risk, he became a member of the senior management team in Corporate
Division Switzerland. He has been a member of the Corporate Executive Committee and
CEO of Corporate Division Switzerland since March 2011, and as such has headed up the
insurance and banking business in Switzerland. Michael Müller is Vice President of the
Swiss Insurance Association (SVV) and a member of the Board of Foundation of Stiftung
Finanzplatz Basel and the Executive Board of the Association of Basel Insurance Companies.
He also sits on the board of the Promotion Society of the Institute of Insurance Economics
at the University of St. Gallen.
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Carsten Stolz (1968, Germany / Switzerland, Dr rer. pol.)
studied business economics at Fribourg University and gained a doctorate specialising in
financial management. He holds an Executive Master in Change from INSEAD. He joined
the Baloise Group in 2002 as Head of Financial Relations. From 2009 to 2011, he was the
Baloise Group’s Head of Financial Accounting & Corporate Finance. Between 2011 and 2017,
he was Head of Finance and Risk, and thus a member of the Executive Committee, at Basler
Versicherungen Switzerland. Dr Carsten Stolz became a member of the Corporate Executive
Committee in May 2017. He manages the Corporate Division Finance with its departments
Group Accounting & Reporting, Financial Planning & Analysis, Group Risk Management and
Corporate Communications & Investor Relations as well as the appointed actuary for Swiss
business at Baloise and the Head of Regulatory Affairs. Since July 2020, his responsibilities
have also included Mergers & Acquisitions, Group Procurement and Run-off. Dr Carsten
Stolz is a member of the Finance and Regulation Committee of the Swiss Insurance
Association (SVV).
Alexander Bockelmann (1974, Germany, Dr rer. nat.)
studied geoecology and environmental sciences at the universities of Bayreuth and East
Anglia before completing his doctorate at the University of Tübingen’s faculty of geosciences.
Dr Alexander Bockelmann is a proven expert in digitalisation and transformation, and has
many years of experience in the industry. He previously worked as an IT strategy and
transformation consultant at the Boston Consulting Group and in various senior roles at
Allianz SE in Germany and the USA. At the end of 2013, he moved to UNIQA Insurance
Group AG in Austria in the role of Group CIO and ultimately became Chief Digital Officer and
Group Chief Information Officer on the Management Board. In February 2019, Dr Alexander
Bockelmann joined the Baloise Group to lead the newly created Corporate Division IT.
With the exception of the mandates listed above, no Corporate Executive Committee members serve on the Boards of Directors at companies
outside the Baloise Group. There are no management agreements that assign executive functions to third parties. Further information on the
members of the Corporate Executive Committee can be found on the website. www.baloise.com/corporate-executive-committee
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Management structure
(as at 31 December 2020)
GROUP CEO
Gert De Winter*
Group CEO Office
Legal, Tax and Compliance
Group HR
Group Strategy & Digital Transformation
Finance
Carsten Stolz*
Asset Management
Matthias Henny*
IT
Alexander
Bockelmann*
Switzerland
Michael Müller*
Germany
Jürg Schiltknecht
Belgium
Henk Janssen
Luxembourg
Romain Braas
* Member of the Corporate Executive Committee.
5. REMUNERATION, SHAREHOLDINGS AND LOANS
The Remuneration Report in Appendix 1 to the Corporate Gov-
ernance Report (page 104 onwards) describes the remuneration
policies adopted and the remuneration systems in place and it
contains in particular the remuneration paid and the loans
granted to members of the Board of Directors and the Corporate
Executive Committee in 2020 as well as the investments they
hold. The content and scope of these disclosures are determined
by articles 13 to 17 of the Ordinance Against Excessive Remu-
neration in Listed Companies Limited by Shares (ERCO), article
663c (3) of the Swiss Code of Obligations (OR), the corporate
governance information guidelines published by SIX Swiss
Exchange AG (version as at 20 June 2019) and the Swiss Code
of Best Practice for Corporate Governance.
The report of the auditors on the audit of the Remuneration
Report can be found in Appendix 2 to the Corporate Governance
Report (page 130 onwards).
100
6. SHAREHOLDER PARTICIPATION RIGHTS
Voting rights
The share capital of Bâloise Holding consists solely of uniform
registered shares. Each share confers the right to one vote. No
shares carry preferential voting rights. To ensure a broad-based
shareholder structure and to protect minority shareholders, no
shareholder is registered as holding more than 2 per cent of
voting rights, regardless of the size of their shareholding. The
Board of Directors can approve exceptions to this provision if
a majority of two-thirds of all its members is in favour (article 5
of the Articles of Association). There are currently no exceptions.
Each shareholder can appoint a proxy in writing in order to
authorise another shareholder or an independent proxy to exercise
his or her voting rights. When exercising voting rights, no share-
holder can accumulate more than one fifth of the voting shares
at the Annual General Meeting directly or indirectly for his or her
own votes or proxy votes (article 16 of the Articles of Association).
Powers of attorney and voting instructions may also be given
to an independent proxy electronically without requiring a qual-
ifying electronic signature (article 16 [2] of the Articles of Asso-
ciation).
Baloise Group Annual Report 2020
Corporate Governance
Corporate Governance Report
Statutory quorums
The Annual General Meeting is quorate regardless of the number
of shareholders present or proxy votes represented, subject to
the mandatory cases stated by law (article 17 of the Articles
of Association).
The consent of at least three-quarters of the votes repre-
sented at the Annual General Meeting is required to suspend
statutory restrictions on voting rights. The votes must also
represent at least one third of the total shares issued by the
Company. This qualified majority also applies to the cases
specified in article 17 (3)(a) to (h) of the Articles of Association.
Otherwise, resolutions are adopted by a simple majority of the
votes cast, subject to compulsory legal provisions (article 17 of
the Articles of Association).
Convening the Annual General Meeting
The Annual General Meeting generally takes place in April,
but must be held within six months of the end of the previous
financial year. Bâloise Holding’s financial year ends on
31 December. The Annual General Meeting is convened at least
20 days before the date of the meeting. Each registered share-
holder receives a personal invitation, which includes the agenda.
The invitation and the agenda are published in the Swiss Official
Gazette of Commerce, in various newspapers and on the website.
The Annual General Meeting, the Board of Directors or the
external auditors decide whether to convene extraordinary
general meetings. Furthermore, legal provisions also require
the Board of Directors to convene an extraordinary general
meeting if requested by the shareholders (article 11 of the
Articles of Association). Article 699 (3) of the Swiss Code of
Obligations (OR) states such requests must be made by share-
holders who represent at least 10 per cent of the share capital.
Requesting agenda items
Article 699 (3) OR states that one or more shareholders who
together represent shares of at least CHF 100,000 can request
items to be put on the agenda for debate. Such requests must
be submitted in writing to the Board of Directors at least six
weeks before the Annual General Meeting is held, giving details
of the motions to be put to the AGM (article 14 of the Articles of
Association).
Entry in the share register
Shareholders are entitled to vote at the Annual General Meeting
provided they are registered in the share register as shareholders
with voting rights on the cut-off date stated by the Board of
Directors in the invitation. The cut-off date should be several
days before the Annual General Meeting (article 16 of the Articles
of Association).
Article 5 of the Articles of Association determines whether
nominee entries are permissible, taking into account any per-
centage limits and entry requirements. The procedures and
requirements for suspending and restricting transferability are
set out in article 5 and article 17 of the Articles of Association.
www.baloise.com/rules-regulations
www.baloise.com/calendar
7. CHANGES OF CONTROL AND POISON-PILL MEASURES
Shareholders or groups of shareholders acting together by
agreement are required to issue a takeover bid to all other
shareholders when they have acquired 33 per cent of all Baloise
shares. Bâloise Holding has not made any use of the option to
deviate from or waive this regulation. There is no statutory
opting-out clause or opting-up clause as defined by the Federal
Act on Financial Market Infrastructures and Market Conduct in
Securities and Derivatives Trading (FinfraG).
The members of the Corporate Executive Committee have
a notice period of twelve months. Bâloise has not agreed any
arrangements in respect of changes of control or non-compete
clauses with members of either the Board of Directors or the
Corporate Executive Committee.
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8. EXTERNAL AUDITORS
The external auditors are elected annually by the Annual General
Meeting. Ernst & Young AG (EY), Basel, has been the external
auditing firm for Bâloise Holding since 2016. Christian Fleig
holds the post of auditor-in-charge. In accordance with article
730a (2) OR, the role of auditor-in-charge is rotated every seven
years. EY is the external auditing firm for almost all Group
companies.
EXTERNAL AUDITORS’ FEES
CHF
(including outlays and VAT)
Audit fees
Consulting fees
Total
2019
2020
5,656,508
5,072,681
39,626
46,960
5,696,134
5,119,641
Audit fees paid to EY include fees for engagements with a direct
or indirect connection to a particular audit engagement and fees
for audit-related activities (namely statutory and regulatory
special audits).
In 2020, the full amount of the additional fee for consultancy
services was attributable to tax consultancy and legal advice.
The services were rendered in accordance with the relevant
provisions on independence set forth in the Swiss Code of
Obligations, the Swiss Audit Supervision Act and FINMA-Circular
2013 / 3 on “auditing” (as at 26 June 2019) published by the Swiss
Financial Market Supervisory Authority (FINMA).
At its meetings, primarily at meetings about the annual and
half-year financial statements, the Audit and Risk Committee
received detailed explanations and documents about the external
auditors’ main findings from the auditors’ representatives.
The performance of the external auditors and their inter action
with Group Internal Audit, Risk Management and Compliance
are assessed by the Audit and Risk Committee. The Audit and
Risk Committee’s discussions with the external auditors focus
on the audit work the latter have undertaken, their reports and
the material findings and most important issues raised during
the audit.
Before the start of the annual audit, the Audit and Risk
Committee reviews the scope of the audit and suggests areas
that require special attention. The Audit and Risk Committee
reviews the external auditors’ fees and independence on an
annual basis.
INFORMATION POLICY
9.
Information principles
The Baloise Group provides (potential) shareholders, investors,
employees, customers and the public with information on
a regular, open and comprehensive basis. All registered share-
holders each receive a summary of the Annual Report once a year
and a letter to shareholders every six months, which provide
a review of business. The full Annual Report is sent to share-
holders on request. In addition, a presentation is created for
every set of financial statements that summarises the financial
year or period for financial analysts and investors. All publications
are simultaneously available to the public. All market participants
receive the same information. Baloise offers tele conferences,
podcasts, videos and live streaming in order to make information
generally and easily accessible.
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Information events
Baloise provides detailed information about its business activ-
ities as follows:
▸
Details about its financial performance, targets, strate-
gies and operations are provided at press conferences
covering its annual and half-year financial statements.
Teleconferences for financial analysts and investors
take place when the annual and half-year financial
statements are published. The events can then be down-
loaded as podcasts.
Shareholders are informed about business during the
year at the Annual General Meeting.
Roadshows are regularly staged at various financial
centres.
At its regular Investor Days, the Company presents its cor-
porate strategy and targets as well as any other matters
relevant to its business. The documents used for this and
the recording of the event are made publicly
available on various media.
Ongoing relationships are maintained with analysts,
investors and the media. Full details of individual Baloise
events can be accessed at www.baloise.com.
▸
▸
▸
▸
▸
Information about Baloise shares
Information about Baloise shares begins on page 8.
www.baloise.com/baloise-share
Financial calendar
Important dates for investors are available at www.baloise.com.
This is where the publication dates for the annual and half-year
reports and the Q3 interim statement are listed and where the
date of the Annual General Meeting, the AGM invitation, the
closing date for the share register and any ex-dividend dates are
published.
www.baloise.com/calendar
Availability of documents
Annual and half-year reports, media releases, disclosures, recent
announcements, presentations and other documents are avail-
able to the public at www.baloise.com.
Please register for the latest corporate communications at
www.baloise.com/mailinglist
www.baloise.com/media
Contact
Corporate Governance
Baloise Group
Philipp Jermann
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 (0)58 285 89 42
philipp.jermann@baloise.com
Investor Relations
Baloise Group
Markus Holtz
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 (0)58 285 81 81
markus.holtz@baloise.com
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Remuneration Report
Appendix 1: Remuneration Report
1. LETTER FROM THE CHAIRMAN OF THE REMUNERATION COMMITTEE
DEAR SHAREHOLDERS,
The Remuneration Committee has determined the remuneration
to be paid for the 2020 financial year and has adopted a number
of changes in respect of the remuneration model. In this – my
first – letter to you, I would like to provide you with a summary
of the most important facts:
REMUNERATION FOR 2020
The reporting year was challenging for Baloise due to the Covid-
19 pandemic. Nonetheless, Baloise has weathered the crisis
comparatively well thanks to its prudent management approach.
The Company did not need to access government aid or com-
pensation for employees on reduced working hours at any point.
Employee satisfaction improved and we were able to pay a
dividend to our shareholders as planned. We would like to thank
all employees for their hard work and efforts to help us negoti-
ate this crisis.
The Remuneration Committee does not see any need to
adjust the fixed remuneration of the Corporate Executive Com-
mittee. However, after careful deliberation, we have set the
performance pool factor at 90 per cent. The Remuneration
Committee assessed four main indicators when taking this
decision: Good progress was made in respect of targets relating
to customers, employees and shareholders. The combined ratio
came to a solid 91.3 per cent despite the coronavirus pandemic;
however, operating profit was down year on year (including after
adjustment for non-recurring effects). Our assessment of the
risks taken did not change. The share price performance
weakened slightly compared with 2019 but remained robust in
a difficult market environment.
Nevertheless, the Covid-19 pandemic put substantial
pressure on society and the overall economy. Against this
backdrop, we regard it as prudent to exercise restraint with
regard to variable remuneration in spite of the solid result.
CHANGES TO THE REMUNERATION MODEL AND ITS
DISCLOSURE
The remuneration system of Baloise is continually being devel-
oped. As part of this ongoing enhancement process, we maintain
a regular dialogue with our investors. This year, I would like to
point out three new changes:
104
1. Integration of sustainability into the remuneration model of
Baloise
The subject of sustainability is becoming ever more relevant for
us and our investors. Going forward, this will also be reflected
in the remuneration model. From 2021, the criterion “sustain-
ability” will be added to the main indicator “strategy implemen-
tation”. We have selected two metrics that are strategically
relevant and easily measurable: (i) a broad-based sustainabil-
ity index that indicates how well Baloise is fulfilling its respon-
sibilities towards all relevant stakeholders and (ii) an index that
measures the reputation of Baloise in society.
2. Fixed weighting of the main indicators for the performance
pool
In recent years, we have been improving our transparency with
regard to the performance pool. The main indicator “business
performance” is given a weighting of 40 per cent because it is
a necessary prerequisite for the future competitiveness and
long-term success of Baloise. The main indicators “strategy
implementation”, “risks taken” and “capital markets perspec-
tive” are each given a weighting of 20 per cent. This approach
makes remuneration decisions more transparent while also
offering the Remuneration Committee the necessary scope for
discretion.
3. Advisory vote on the remuneration report
From the next Annual General Meeting on 30 April 2021, you
will have the opportunity to participate in an advisory vote on
the remuneration report. This step is being adopted in the
context of a reform of stock corporation laws, but one year ahead
of the reform coming into force.
On behalf of all members of the Remuneration Committee, I
would like to thank you, our esteemed shareholders, for your
interest and trust.
Basel, March 2021
Thomas Pleines
Chairman of the Remuneration Committee
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
2. OVERVIEW OF REMUNERATION
A. REMUNERATION SYSTEM
The following table gives an overview of fixed and variable remuneration elements at Baloise.
Remuneration system of the Baloise Group
DESCRIPTION
PAYMENT
INFLUENCING FACTORS
PURPOSE
Performance
share units
(PSUs)
▸ Long-term variable
remuneration
▸ Prospective entitlements
to shares
▸ Prospective allocation
▸ Conversion into shares
after three years
▸ Short-term variable remuneration
▸ Paid in cash or restricted shares
(three-year closed period)
▸ Mandatory share subscription
(50% for Corporate Executive
Committee)
▸ Basic salary
▸ Fringe benefits (dependent
on location)
▸ Pension provisions
▸ Paid in arrears
(March of the
following year)
▸ Paid over the course
of the work year
Performance
pool
Fixed
remuneration
▸ Profit attributable to
shareholders relative to
peer group (STOXX Europe
600 Insurance)
▸ Strategy implementation
▸ Business performance
▸ Risks taken
▸ Capital markets
perspective
▸ Strengthening loyalty of senior
managers to the Company
▸ Aligning management interests
with those of shareholders
▸ Reward for the achievement of
annual targets (company, team and
individual targets)
▸ Participation in the success of the
business
▸ Tasks and responsi-
bilities associated
with the position
▸ Skills and expertise
of the employee
▸ Market
▸ Competitiveness in the
marketplace
▸ Fairness and transparency
▸ Financial hedging
More detailed information is provided in the following chapters of the remuneration report:
▸
▸
Chapter 4. Remuneration policy and remuneration system
Chapter 5. Components of remuneration
B. INDIVIDUAL REMUNERATION OF THE CORPORATE EXECUTIVE COMMITTEE
Gert
De Winter
Michael
Müller
Dr Thomas
Sieber 1
Dr Carsten
Stolz
Dr Matthias
Henny
Dr Alexander
Bockelmann 2
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
52 %
56 %
53 %
57 %
54 %
77 %
60 %
60 %
55 %
60 %
53 %
57%
31 %
25 %
17 %
19 %
30 %
25 %
30 %
17 %
18 %
16 %
23 %
23 %
23 %
29 %
17 %
17 %
16 %
22 %
18%
31 %
26 %
16 %
17 %
CHF 2.21 million
CHF 2.04 million
CHF 1.67 million
CHF 1.54 million
CHF 1.52 million
CHF 0.74 million
CHF 1.16 million
CHF 1.16 million
CHF 1.24 million
CHF 1.11 million
CHF 1.38 million
CHF 1.37 million
Fixed (comprising basic salary, non-cash
remuneration and pension benefits)
Short-term variable remuneration (comprising share-based
and cash payments from the performance pool)
Long-term variable remuneration
(comprising allocations of share entitlements)
1 Until 31 August 2020; 2 Since 1 February 2019.
More detailed information is provided in the following chapter of the remuneration report:
Chapter 12. Remuneration paid to the members of the Corporate Executive Committee
▸
105
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C. SHORT-TERM VARIABLE REMUNERATION
▸
▸
The short-term variable remuneration is allocated by means of the performance pool.
The Remuneration Committee assesses the Company’s performance and success during the past financial year based on
four main indicators (see pages 111 to 113) and determines the performance pool factor.
As illustrated in the following charts, the performance pool factor fluctuates in line with the profit for the period and the
return on equities (total shareholder return, TSR). However, it is also dependent on a number of other criteria and thus
cannot be derived from these key figures alone.
▸
Profit for the period vs. performance pool factor
Total shareholder return (TSR) vs. performance pool factor
750
625
500
375
250
125
0
150 %
62.5 %
125 %
50.0 %
100 %
37.5 %
75 %
50 %
25 %
0 %
25.0 %
12.5 %
0 %
–12.5 %
150 %
125 %
100 %
75 %
50 %
0 %
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Profit for the period (CHF million)
Performance pool factor as a percentage of the
expected value
TSR (%) (left axis)
Performance pool factor as a percentage of the
expected value (right axis)
More detailed information is provided in the following chapter of the remuneration report:
▸
Chapter 5. Components of remuneration / Short-term variable remuneration: performance pool
106
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Remuneration Report
D. LONG-TERM VARIABLE REMUNERATION
▸
Long-term variable remuneration is granted in the form of
performance share units (PSUs).
The Remuneration Committee determines the total
amount to be awarded in PSUs and the allocation of PSUs
to each individual Corporate Executive Committee
member.
After three years, the prospective entitlements are multi-
plied by a performance multiplier upon conversion into
shares. Depending on the total shareholder return (TSR)
relative to the peer group (STOXX Europe 600 Insurance),
the performance multiplier can range from 0.0 to 2.0 (see
illustration on the right). The performance multiplier for
the 2020 financial year was set at 1.3.
The budgeted figure also corresponds with the absolute
TSR, as evidenced by the tables below.
▸
▸
▸
p
u
o
r
g
r
e
e
P
Best value
Upper quartile
Baloise
Median
Lower quartile
Worst value
2.0
1.5
1.3
1.0
0.5
0.0
r
e
i
l
p
i
t
l
u
m
e
c
n
a
m
r
o
f
r
e
P
Overview of total shareholder return (TSR) of current plans
Overview of ended and current plans
(as at 31 December 2020)
2014 to 2020 plans
1 Mar 2014 – 28 Feb 2017
1 Mar 2015 – 28 Feb 2018
1 Mar 2016 – 28 Feb 2019
15 %
20 %
29 %
6 %
41 %
42 %
1 Mar 2017 – 29 Feb 2020
19 %
40 %
1 Mar 2018 – 28 Feb 2021
6 %
29 %
1 Mar 2019 – 28 Feb 2022
–3 % 21 %
1 Mar 2020 – 28 Feb 2023
2 % 11 %
2014 to 2017 plans
1 Mar 2014 – 28 Feb 2017
15 % 13 %
1 Mar 2015 – 28 Feb 2018
1 Mar 2016 – 28 Feb 2019
20 %
29 %
12 %
13 %
1 Mar 2017 – 29 Feb 2020
19 %
12 %
Change in share value during
programme term
Dividend payments
21 %
61 %
71 %
59 %
35 %
18 %
13 %
Change in share value during programme term
(current plans: as at 31 December 2020)
Performance multiplier (current plans: as
at 31 December 2020)
More detailed information is provided in the following chapter of the remuneration report:
▸
Chapter 5. Components of remuneration / Long-term variable remuneration: performance share units
28 %
32 %
42 %
31 %
107
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Corporate Governance
Remuneration Report
E. SHAREHOLDER INVOLVEMENT
▸
Every year at the Annual General Meeting, the shareholders vote on the remuneration of the Board of Directors and the
Corporate Executive Committee.
Starting in 2021, the remuneration report will also be put to an advisory vote at the Annual General Meeting.
▸
Shareholder vote at the
Annual General Meeting
Total remuneration
Board of Directors (binding)
Total remuneration Corporate
Executive Committee (binding)
Remuneration report
(advisory)
2020
2021
2022
Remuneration for 2022
Board of Directors
Maximum variable
remuneration for 2021 for the
Corporate Executive Committee
a
r
e
Fixed remuneration for 2022 for the
Corporate Executive Committee
2020 remuneration report
April
2021
Approved vs. paid remuneration (Board of Directors)
Approved vs. paid remuneration (Corporate Executive
Committee)
CHF million
CHF million
3.3
3.3
3.3
3.3
9.2
5.2
4.0
9.2
4.5
4.7 1
9.8
5.1
4.7
8.1
3.6
4.5
2019
2020
2019
2020
Approved
Paid
Approved (variable)
Paid (variable)
Approved (fixed)
Paid (fixed)
1 Increase due to enlargement of the Corporate Executive Committee, covered by the
additional amount pursuant to article 30 of the Articles of Association of Bâloise
Holding Ltd.
108
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Remuneration Report
3. REMUNERATION COMMITTEE OF THE
BOARD OF DIRECTORS
The Remuneration Committee set up by the Board of Directors
in 2001 is consistent with the Swiss Code of Best Practice and
is tasked with helping the Board of Directors to frame the
Company’s remuneration policies. The Remuneration Committee
has been vested with special decision-making powers and
ensures, among other things, that:
▸
the remuneration offered by Baloise is in line with the
going market rate and performance-related in order to
attract and retain individuals with the necessary skills
and character attributes;
the remuneration paid is demonstrably dependent on the
Company’s sustained success and individuals’ personal
contributions and does not create any perverse incen-
tives;
the structure and amount of overall remuneration paid
are consistent with Baloise’s risk policies and encourage
risk awareness.
▸
▸
The Remuneration Committee’s main functions and responsi-
bilities are to:
▸
submit proposals to the Board of Directors on the struc-
ture of remuneration to be paid in the Baloise Group,
especially the remuneration to be paid to the Chairman
and members of the Board of Directors and to the mem-
bers of the Corporate Executive Committee;
submit proposals to the Board of Directors – for approval
by the Annual General Meeting – on the amount of remu-
neration to be paid to the Chairman and members of the
Board of Directors and to the members of the Corporate
Executive Committee;
approve the basic salaries and the variable remuneration
paid to individual members of the Corporate Executive
Committee (in compliance with the pay caps stipulated
by the Annual General Meeting);
specify the total amount available in the performance
pool and the total amount set aside for the allocation of
performance share units (PSUs);
approve inducement payments and severance packages
that are granted to the most senior managers and which
in individual cases exceed CHF 100,000 (subject to the
proviso that no severance packages may be granted to
▸
▸
▸
▸
members of the Board of Directors or the Corporate Exec-
utive Committee).
The Remuneration Committee consists of at least three members
of the Board of Directors, who are elected every year by the Annual
General Meeting. Thomas Pleines (Chairman), Prof. Marie-Noëlle
Venturi – Zen-Ruffinen (Deputy Chairwoman), Christoph Mäder
and Prof. Hans-Jörg Schmidt-Trenz were elected to the Remuner-
ation Committee by the Annual General Meeting on 24 April 2020.
The Remuneration Committee maintains a regular dialogue with
senior management throughout the year and meets at least twice
annually. In addition to the committee secretary being present,
these meetings are usually also attended by the Group CEO and
the Head of Group Human Resources, who participate in an
advisory capacity. The Group CEO leaves the meeting when his
personal remuneration is being discussed and decided. The
Chairman of the Remuneration Committee reports to the Board
of Directors at its next meeting on the committee’s activities.
4. REMUNERATION POLICY AND REMUNERATION SYSTEM
Principles
The Company’s success is largely dependent on the skills,
capabilities and performance of its workforce. It is therefore
essential to recruit, develop and retain suitably qualified, highly
capable and highly motivated professionals and executives.
The remuneration principles and parameters applied across the
Baloise Group have been set out in a Remuneration Guideline.
This Remuneration Guideline applies to all employees through-
out the Baloise Group. It is based on the following principles:
competitiveness in the marketplace; individual performance
and the Company’s success; fairness and transparency; and
sustainable remuneration.
Competitiveness in the marketplace
Baloise aims to pay basic salaries that are broadly in line with
the market – i.e. around the market median – and to offer vari-
able remuneration packages in excess of the going market rate
to reward outstanding performance by the Company and indi-
viduals. It therefore regularly compares the salaries paid to its
employees with those paid in the wider market in Switzerland
and Europe. This involves taking part in benchmarking surveys
conducted by Willis Towers Watson and Kienbaum, and carrying
out detailed analysis of the remuneration packages of the most
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Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
senior executives including the Corporate Executive Committee.
Insurance-related functions are benchmarked against a peer
group of direct insurers. The peer group for interdisciplinary
functions comprises companies from the banking and financial
services sector. The findings are fed into the Company’s regular
review of its salary structures and presented to the Remunera-
tion Committee.
Individual performance and the Company’s success
As a performance-driven organisation, Baloise always maintains
a clear and transparent link between the Company’s strategic
targets, team targets and the targets of individual employees.
The amount of short-term variable remuneration is influenced
by the individual contributions to the achievement of these
targets. Short-term variable remuneration offers a nuanced way
of linking the performance of individuals and of the team to
Baloise’s success and recognising both accordingly. It is
designed to reward employees for excellent work without
creating an incentive for them to take inappropriate risks. It also
aims to motivate staff to strive for outstanding results even
beyond their own sphere of responsibility. Personal performance
is used as a starting point for the development, advancement,
career planning and promotion of employees.
The short-term variable remuneration of the Corporate
Executive Committee, the most senior level of management and
most other members of the management team throughout the
Baloise Group is allocated via the performance pool and is
therefore directly linked to the achievement of the Company’s
goals. The discussion of individual and team contributions to
the achievement of the Company’s goals forms the basis of the
performance management system and takes place in the form
of an ongoing dialogue between employees and their respective
line managers. The performance management system thus
underpins the implementation of Baloise’s “Simply Safe”
strategy, because it places the focus on objectives such as
achieving the three strategic pillars: “cash upstream”, “customer
growth” and “employees”.
Fairness and transparency
In addition to the regular benchmarking of overall remuneration
against the market, Baloise also aims to ensure that pay within
the Company is fair when setting salary levels. Baloise applies
the fair-pay principle that people who do the same job and have
the same qualifications should be paid the same amount. The
Company already participated in the Swiss federal government’s
voluntary wage equality dialogue in 2013 / 2014 and repeated
110
the analysis internally in 2018 in collaboration with the employee
commission. In both cases, differences in pay that could not be
objectively explained were below the Swiss government’s defined
tolerance threshold of 5 per cent. This means that there is no
significant pay gap in the Company’s remuneration of female and
male employees that cannot be explained with objective factors
such as years of service, function and occupational status. In
2021, Baloise will conduct another wage equality analysis in
connection with the amended Swiss Equal Opportunities Act.
The findings will be audited both internally and externally and
will then be shared with employees and shareholders.
Sustainable remuneration
Baloise attaches considerable importance to managing its
business sustainably and retaining high performers. It also
matters to Baloise that its remuneration is not only competitive
and achievement-oriented, but that it also encourages mana-
gerial staff to align their long-term focus with the interests of
stakeholders, particularly the shareholders. To this end, the
remuneration system provides for a significant portion of the
variable remuneration to be awarded in shares that are
restricted for three years and exposed to market risk during this
period. Furthermore, the three most senior function levels
receive performance share units, which means that a further
component of their salaries is paid out as prospective entitle-
ments; these PSUs must be held for three years before being
converted into shares as a form of deferred remuneration. Both
the proportion of variable remuneration in the total pay package
and the proportion of remuneration awarded in restricted shares
or as deferred remuneration increases in line with employees’
scope of strategic responsibility and influence.
REMUNERATION STRUCTURE OF THE THREE MOST SENIOR FUNCTION LEVELS
100 %
75 %
50 %
25 %
0 %
Corporate Executive
Committee
Function
level 2
Function
level 3
Expected value for deferred and restricted variable remuneration
Expected value for cash portion of short-term variable remuneration
Expected value of basic salary
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
Excessive remuneration is prevented by means of clearly defined
caps for members of the Board of Directors and the Corporate
Executive Committee that are approved by the Annual General
Meeting.
5. COMPONENTS OF REMUNERATION
Baloise views its compensation packages holistically and there-
fore factors in not only the basic salary plus short- and long-term
variable remuneration but also other benefits such as pension
contributions, additional benefits, and staff development.
Basic salary
The basic salary constitutes the level of remuneration that is
commensurate with the functions and responsibilities of the
position concerned as well as the employee skills and expertise
required in order to achieve the relevant business targets and
objectives. This remuneration is paid by bank transfer. The
Company’s clearly defined and market-based salary structures
(e.g. grade-based salary bands) help ensure fair pay relative to
others both inside and outside the organisation (see also
chapter 4. “Remuneration policy and remuneration system”).
Short-term variable remuneration: performance pool
The key factors determining the amount of short-term variable
remuneration paid are the Company’s profitability and economic
value added, the performance of the team, and an employee’s
individual contribution to the team’s performance. Short-term
variable remuneration is paid together with the salary for March
of the following year. Those entitled to receive short-term vari-
able remuneration generally have a choice as to what percentage
of their remuneration is paid out and what proportion they receive
in the form of shares with a closed period of three years. This
choice is limited for the most senior managers, who are obliged
to subscribe for shares on a sliding-scale basis: members of the
Corporate Executive Committee must receive at least 50 per
cent of their short-term variable remuneration in the form of
shares (if the long-term effect of performance share units is
taken into account, the total proportion of remuneration awarded
in shares, including entitlements, amounts to at least 70 per
cent of total variable remuneration at the time of allocation).
Two plans are available to individuals who wish to subscribe for
shares: the Share Subscription Plan and the Share Participation
Plan (see chapter 6. “Share Subscription Plan and Share
Participation Plan”).
Fixed weighting of the main indicators for the
performance pool
From 2020, the Remuneration Committee will define the
weightings of the four main indicators in advance. The main
indicators “strategy implementation”, “risks taken” and
“capital markets perspective” are each given a weighting
of 20 per cent while the main indicator “business perfor-
mance” is given a weighting of 40 per cent. “Business
performance” is weighted more heavily than the other
indicators because it forms the basis for the future compet-
itiveness and long-term success of Baloise. The fixed
weighting of the factors makes the determination of the
performance pool easier to understand and thus improves
transparency of the variable remuneration.
Sustainability
Sustainability is of far-reaching significance in the future
strategy of Baloise (see pages 37 to 38). The Remuneration
Committee has decided to add “sustainability” to the cri-
teria for the main indicator “strategy implementation” from
2021, i.e. one year before the start of the next strategic
phase, in order to further emphasise the importance of
sustainability. This criterion measures improvements in
public perception based on Baloise’s performance as
measured by a broad-based sustainability index and a
reputational rating.
The variable remuneration paid to employees who perform
control functions (Risk Management, Compliance, Group Internal
Audit and the Appointed Actuary) is structured in such a way that
it is not determined directly by the profitability of the unit being
monitored or by the profitability of individual products or
transactions. The Remuneration Committee reviews the
remuneration paid to the heads of the control functions on an
annual basis.
The short-term variable remuneration is allocated via the per-
formance pool. The performance pool takes account of the entire
Baloise Group’s performance. Its amount is determined by the
Remuneration Committee after the end of the financial year
concerned, using a systematic analytical process that takes
account of the following main indicators:
▸ Main indicator “strategy implementation” (weighting:
20 per cent)
The criteria are the three strategic goals set by Baloise for
111
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
the period 2017 to 2021, comprising a cash upstream of
CHF 2 billion into Bâloise Holding, one million new
customers, and a rating as one of the best employers in
the sector. From 2021, sustainability will be included as
an additional criterion.
▸ Main indicator “business performance” (weighting: 40
per cent)
The key metric is the profit for the period, with the com-
bined ratio, the interest margin and the business mix in
the life insurance business as supplementary metrics.
▸ Main indicator “risks taken” (weighting: 20 per cent)
The criteria used to gauge the success of the Company’s
business from a risk perspective are the Swiss Solvency
Test (SST) ratio, economic profit, the credit rating
awarded by Standard & Poor’s, and assessments pro-
vided by the Head of Risk Management and the Head of
Group Compliance.
▸ Main indicator “capital markets perspective” (weighting:
20 per cent)
The key metric is the performance of Baloise’s share
price, including dividends paid, compared with the Euro-
pean insurance companies represented in the STOXX
Europe 600 Insurance Index (the composition of this
index is shown in the table on page 114).
The assessments by the Head of Risk Management and the Head
of Group Compliance of the risks taken and the evaluations by
the Head of Group Human Resources and others of strategy
requirements that cannot be easily quantified are also based
on qualitative criteria such as senior managers’ risk behaviour,
compliance with procedures and regulations and the practising
of a genuine compliance culture, the effectiveness of the inter-
nal control system, and the efforts made in respect of talent
management and staff engagement.
The formal cap for the performance pool is set at 150 per
cent of the expected value.
Performance pool payments are awarded to individuals at the
discretion of the line manager concerned. The amount of these
payments is mainly determined by a holistic assessment of the
performance, conduct and individual development of the
employees. The individual performance pool payment proposed
by the respective line manager is discussed by the relevant
management team, validated at interdepartmental and interdi-
visional level and adjusted where necessary. This process
ensures that all aspects of an employee’s performance as well
as risk-relevant behavioural attributes are factored into the
performance pool payment awarded to an individual.
Those considered for performance pool payments are the
most senior management level in the Baloise Group, the
majority of senior managers in Switzerland and the corre-
sponding functions abroad. However, there is no entitlement to
receive payments from the performance pool.
The allocation of performance pool payments to the mem-
bers of the Corporate Executive Committee is described in
chapter 12. “Remuneration paid to the members of the Corporate
Executive Committee”.
For the 2020 financial year, the Remuneration Committee decided
on a factor of 90 per cent of the expected value of performance
pool payments. The decision and the main indicators are
explained in greater detail in the following.
Strategy implementation
How successfully were the strategic targets implemented?
Cash upstream
Customer growth
Employees
Baloise is well on track to achieve the ambitious targets of “Simply Safe Season 1” by the end of 2021.
Cash remittance to the holding company remained healthy at CHF 424 million in 2020 in spite of the
challenging conditions. The goal of attracting one million new customers remains within reach: In 2020,
the Company’s customer base grew by a solid 225,000 new customers. Baloise is currently among the top
8 per cent of employers in the peer group of European financial services providers. This all amounts to an
outstanding achievement, especially against the backdrop of the Covid-19 pandemic.
Positive
Main indicator
Key question
Sub-criteria
Appraisal
Rating
112
Baloise Group Annual Report 2020
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Main indicator
Key question
Sub-criteria
Appraisal
Rating
Business performance
What is the operating profit?
Profit for the period
Combined ratio
Life insurance key figures (interest margin and business mix)
The profit for 2020 was down year on year due to the adverse impact of the Covid-19 pandemic. The
achievement of a combined ratio of 91.2 per cent in this challenging financial year confirms once again
the high quality of the underwriting and the profitability of the non-life business. In a persistently difficult
interest-rate environment, the non-life business generated EBIT well above CHF 200 million.
Negative / Neutral
Main indicator
Key question
Sub-criteria
Appraisal
Rating
Risks taken
How should the operating performance be assessed from a risk perspective?
SST
Economic Profit
S&P rating
Internal perspective
Compliance
With a positive SST ratio for the Group and an S&P rating of A+ with a stable outlook, Baloise remains
strongly capitalised. The persistently low interest rates necessitated certain internal measures to
strengthen economic capitalisation. Compliance received a positive assessment.
Neutral
Main indicator
Key question
Sub-criteria
Appraisal
Rating
Capital markets perspective
How did Baloise perform relative to other companies on the stock market?
Total shareholder return
At the end of the year, Bâloise Holding AG shares had outperformed the STOXX Europe 600 Insurance
Index slightly. Bâloise Holding AG’s shares were ranked above the median (15th out of 35 stocks), with a
total shareholder return of minus 5.9 per cent.
Neutral / Positive
Determination of the performance pool factor
Appraisal
Baloise achieved a solid result despite the impact of the Covid-19 pandemic. The assessment of “strategy
implementation” and “risks taken” remained on a par with the previous year. The relative assessment of “capital
markets perspective” has weakened slightly but the share price proved robust in the challenging market envi-
ronment. The “operating performance”, a factor to which the Remuneration Committee attaches great importance,
was weaker than in 2019.
The Remuneration Committee carefully analysed all main indicators. Despite the solid results, it decided to set
the performance pool factor at 90 per cent in light of the pressure that the Covid-19 pandemic is putting on
society and the wider economy.
90 per cent
Factor
113
Baloise Group Annual Report 2020
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Remuneration Report
As the table below illustrates in the form of a comparison with
the consolidated profit for the period, when the performance
pool factor is set in this way, it goes up or down in line with the
Company’s success, although it is not directly derived from this
key figure alone:
2013
2014
2015
2016
2017
2018
2019
2020
Performance pool
(as a percentage of
the normal
expected value)
Consolidated profit
for the period
(CHF million)
120 %
137 %
100 %
107 %
120 %
100 %
120 %
90 %
455.4
711.9
511.1
533.9
531.9
522.9
689.5
428.3
Long-term variable remuneration: performance share units
Baloise grants performance share units (PSUs) to the most
senior managers as a form of long-term variable remuneration
in order to retain high performers and align their interests with
those of the shareholders.
At the beginning of each vesting period the participating
employees are granted rights in the form of PSUs, which entitle
them to receive a certain number of shares free of charge after
the vesting period has elapsed. The Remuneration Committee
specifies the grant date and applies its own discretion in
deciding which of the most senior management team members
are eligible to participate. It determines the total number of
PSUs available and decides how many are to be awarded to each
member of the Corporate Executive Committee. PSUs are granted
to the other participating employees on the basis of the relevant
line manager’s proposal, which must be approved by the line
manager’s manager.
The number of shares that can be subscribed after three
years – i.e. at the end of the vesting period – depends on the
performance of Bâloise Holding Ltd. shares (total shareholder
return or TSR) relative to a peer group. The peer group comprises
the leading European insurance companies contained in the
STOXX Europe 600 Insurance Index (see table below).
One PSU generally confers the right to receive one share.
This is the case if the Baloise TSR performs in line with the
median of the peer group. In this case the performance multi-
plier would be 1.0. Participants receive more shares in exchange
for their PSUs if the Baloise TSR for the vesting period is higher
than the TSRs of the peer group. The multiplier reaches the
maximum of 2.0 if Baloise has the highest TSR of all companies
in the peer group. The multiplier amounts to 0 if the Baloise TSR
is in the bottom quartile of companies in the peer group. If this
happens, no prospective entitlements will be converted into
shares. Consequently, the performance multiplier increases on
a linear basis from the bottom quartile from 0.5 to 2.0 (see page
107). The performance multiplier is defined for the entire
vesting period ended, based on the closing stock market prices
on the final trading day of the respective vesting period and
taking the dividend payments for the period into account.
Participants receive the pertinent number of shares once
the vesting period has elapsed, which means that for the PSUs
allocated
in March 2020 they receive their shares on
1 March 2023. If an individual’s employment contract is termi-
nated during the vesting period, the PSUs expire without the
person concerned receiving any consideration or compensation.
This does not apply if the employment contract ends due to
retirement, disability or death. It also does not apply if the
Companies in the STOXX Europe 600 Insurance Index (as at 31 December 2020)
ADMIRAL GRP
CNP ASSURANCES
POSTE ITALIANE
TRYG
DIRECT LINE INSURANCE GROUP
PRUDENTIAL
ZURICH INSURANCE GROUP
GJENSIDIGE FORSIKRING
PZU GROUP
AEGON
AGEAS
ALLIANZ
ASR NEDERLAND NV
AVIVA
AXA
BALOISE
BEAZLEY
ASSICURAZIONI GENERALI
HISCOX
Source: https://www.stoxx.com/index-details?symbol=SXIP
114
HANNOVER RUECK
HELVETIA HLDG
LEGAL & GENERAL GRP
MUENCHENER RUECK
RSA INSURANCE GRP
SAMPO
SCOR
STOREBRAND
SWISS LIFE HLDG
NN GROUP
SWISS REINSURANCE COMPANY
PHOENIX GROUP HDG.
TOPDANMARK
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
contract is terminated but the participant does not join a rival
company or is not personally at fault for the termination of the
contract. In the last two cases, some of the allocated PSUs will
still expire. The number of PSUs expiring is proportional to the
amount of time remaining until the end of the vesting period. In
addition, the Remuneration Committee has the powers to claw
back some or all of the PSUs allocated to an individual or to a
group of participants if there are specific reasons for doing so.
Such specific reasons include, for example, serious breaches
of internal or external regulations, the taking of inappropriate
risks that are within an individual’s control, and the type of
conduct or behaviour that would increase the risks to Baloise.
The shares needed to convert the PSUs are purchased in
the market as and when required.
Measurement of the PSUs at their issue date is based on a
Monte Carlo simulation, which calculates a present value for the
payout expected at the end of the vesting period. This
measurement incorporates the following parameters:
▸
▸
interest rate of 1 per cent;
volatility of all stocks in the peer group and their correla-
tion with one another (measured over a historical period
of three years);
empirical data on how long eligible programme partici-
pants remain with the Company.
▸
The value of PSUs is exposed to market risk until the end of the
vesting period and may, of course, fluctuate significantly, as
shown in the table below.
PERFORMANCE SHARE UNIT
(PSU) PLAN
Fringe benefits
Fringe benefits are generally defined as components of the total
remuneration package that are not dependent on either an
individual’s function or performance or the Company’s perfor-
mance. By providing discretionary benefits in the form of
retirement pensions, subsidies, concessions, and staff training
and professional development, Baloise demonstrates the close
partnership that it maintains with its employees and the extent
to which it values their contribution. Fringe benefits are granted
on a country-by-country basis in line with prevailing local laws.
6. SHARE SUBSCRIPTION PLAN AND
SHARE PARTICIPATION PLAN
Two plans are available to individuals who wish to subscribe for
shares as part of their short-term variable remuneration: the
Share Subscription Plan and the Share Participation Plan.
Share Subscription Plan
Those who qualify as eligible persons at Baloise Group compa-
nies in Switzerland and the members of the Executive Commit-
tees at companies outside Switzerland are able to subscribe for
shares at a preferential price as part of their short-term variable
remuneration. The subscription date is 1 March of each year.
Although title to the shares passes to the relevant employees
on this date without any further vesting conditions having to be
met, the shares cannot be sold for the duration of a three-year
closed period.
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
PSUs granted
PSUs converted
Change in value
Date
Price (CHF) 1
Date
Multiplier
Price (CHF) 1
Value (CHF) 2
1 Jan 2009
1 Jan 2010
1 Jan 2011
1 Mar 2012
1 Mar 2013
1 Mar 2014
1 Mar 2015
1 Mar 2016
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
82.40
86.05
91.00
71.20
84.50
113.40
124.00
126.00
130.70
149.20
163.00
154.90
1 Jan 2012
1 Jan 2013
1 Jan 2014
1 Mar 2015
1 Mar 2016
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
1 Mar 2021
1 Mar 2022
1 Mar 2023
0.64
0.58
0.77
1.21
1.50
1.05
1.34
1.32
1.34
1.28 4
1.22 4
1.11 4
64.40
78.50
113.60
124.00
126.00
130.70
149.20
163.00
154.90
157.50 4
157.50 4
157.50 4
41.22
45.53
87.47
150.04
189.00
137.24
199.93
215.86
207.57
201.60 4
192.50 4
175.00 4
3
– 50 %
– 47 %
– 4 %
111 %
124 %
21 %
61 %
71 %
59 %
35 % 4
18 % 4
13 % 4
1 Price = price of Baloise shares at the PSU grant date or conversion date.
2 Value = value of one PSU at the conversion date (share price at the conversion date times the multiplier).
3 Change in value = difference between the value at the conversion date (multiplier times the share price at the conversion date) and the share price at the grant date, expressed as a
percentage of the share price at the grant date; example of the PSU plan in 2009: ([{0.64*64.40} – 82.40] / 82.40) * 100 = –50 %.
4 Interim measurement as at 31 December 2020.
115
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
The parameters used to determine the subscription price are
decided each year by the Remuneration Committee. The sub-
scription price is based on the closing price before the first day
of the subscription period, on which a discount of 10 per cent
is granted in order to encourage share ownership (please refer
to the accompanying table for details). Once it has been calcu-
lated using this method, the subscription price is published in
advance on the intranet. The shares needed for the Share
Subscription Plan are purchased in the market as and when
required.
Applicable closing
quotation
Subscription
price
from
CHF
CHF
Share Subscription Plan for 2021
8 Jan 2021
159.40
143.46
(applies to variable remuneration
awarded for the 2020 reporting
period)
Share Subscription Plan for 2020
10 Jan 2020
176.00
158.40
(applies to the variable remunerati-
on granted for 2019)
Share Participation Plan
Most management team members working in Switzerland are
free to choose – within certain limits – what proportion of their
short-term variable remuneration they want to receive in the
form of shares from the Share Participation Plan rather than in
cash. The most senior management team members are subject
to upper limits; members of the Corporate Executive Committee
– who are obliged to receive at least half of their short-term
variable remuneration in the form of shares – are not allowed
to receive more than 40 per cent of their entitlement in the form
of shares from the Share Participation Plan. The subscription
date is 1 March of each year (the same as for the Share Sub-
scription Plan). Although title to the shares passes to the relevant
employees on this date without any further vesting conditions
having to be met, the shares cannot be sold during a three-year
closed period.
Applicable closing
quotation
Subscription
price
from
CHF
CHF
Share Participation Plan for 2021
8 Jan 2021
159.40
139.73
(applies to variable remuneration
awarded for the 2020 reporting
period)
Share Participation Plan for 2020
10 Jan 2020
176.00
156.46
(applies to the variable remunerati-
on granted for 2019 and to the
shares subscribed by the Chairman
of the Board of Directors in 2020)
116
The parameters used to determine the subscription price are
decided each year by the Remuneration Committee. The subscrip-
tion price is based on the closing price before the first day of the
subscription period, from which discounted dividend rights are
deducted over a period of three years (please refer to the table
above for details). Once it has been calculated using this method,
the subscription price is published in advance on the intranet.
The shares needed for the Share Participation Plan are purchased
in the market as and when required.
In order to increase the impact of this Share Participation Plan,
employees are granted loans on which interest is charged at
market rates, which enables them to subscribe for shares whose
value constitutes a multiple of the capital invested; these shares
are purchased at their fair value net of discounted dividend rights
over a period of three years. Repayment of these loans after the
three-year closed period has elapsed is hedged by put options,
which are financed by the sale of offsetting call options. If the
price of the shares is below the put options’ strike price when
the closed period expires, programme participants can sell all
their shares at this strike price, which ensures that they can repay
their loans plus interest. However, the entire invested capital is
lost in this case. If, on the other hand, the price of the shares is
above the call options’ strike price, programme participants must
pay the commercial value of these options. Their upside profit
potential for the programme participant is thus limited by the call
options. If, when the three-year closed period elapses, the price
of the shares is between the put options’ strike price and the call
options’ strike price, once the loans plus accrued interest have
been repaid the employees concerned receive the remaining
shares to do with as they wish.
7. EMPLOYEE INCENTIVE PLAN
The Baloise Foundation for Employee Participation set up in 1989
offers members of staff working for various Baloise Group com-
panies in Switzerland the opportunity to purchase shares in
Bâloise Holding – usually once a year – at a preferential price in
compliance with the regulations adopted by the Board of Foun-
dation. This encourages employees to maintain their commitment
to the Company over the long term by becoming shareholders.
The subscription price is fixed by the Board of Foundation at the
beginning of the subscription period and is then published on
the intranet. It equals half of the volume-weighted average share
price calculated for the month of August in each subscription
year. In 2020, the subscription price amounted to CHF 71.70 (2019:
CHF 88.50) and a total of 209,951 shares were subscribed (2019:
192,501). Title to the subscribed shares passes to the relevant
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
EMPLOYEE INCENTIVE PLAN
Number of shares subscribed
Restricted until
Subscription price per share (CHF)
Value of shares subscribed (CHF million)
Fair value of subscribed shares on subscription date (CHF million)
Employees entitled to participate
Participating employees
Subscribed shares per participant (average)
employees with effect from 1 September each year, and the shares
are subject to a three-year closed period.
The Foundation acquired the underlying stock of shares used
in this plan from previous capital increases carried out by Bâloise
Holding. It supplements these shareholdings by purchasing shares
in the market. The existing shareholdings will enable the Foun-
dation to continue the Employee Incentive Plan over the coming
years. The Foundation is run by a Board of Foundation that is
predominantly independent of the Corporate Executive Commit-
tee. The independent Board of Foundation members are Martin
Wenk (Chairman) and Professor Heinrich Koller (lawyer); the third
member of the Board of Foundation is Andreas Burki (Head of
Legal, Tax and Compliance).
8. PENSION SCHEMES
Baloise provides a range of pension solutions, which vary from
country to country in line with local circumstances. In Switzer-
land it offers different pension schemes for its insurance and
banking employees. They enable an employee or the employee’s
dependants to maintain a reasonable standard of living follow-
ing the occurrence of an insured event (old age, disability or
death).
The members of the Corporate Executive Committee are
insured under the pension scheme run by Baloise Insurance Ltd.
They are subject to the same terms and conditions as all other
insured office-based members of staff. No contributions to
vocational pension schemes are made for the Chairman or the
other members of the Board of Directors.
9. EMPLOYMENT CONTRACTS, CHANGE-OF-CONTROL
CLAUSES, INDUCEMENT PAYMENTS AND SEVERANCE
PACKAGES
2019
2020
192,501
209,951
31 Aug 2022
31 Aug 2023
88.50
17.0
32.5
3,301
2,218
86.8
71.70
15.1
29.5
3,372
2,370
88.6
The employment contracts of senior managers in Switzerland
and – in most cases – in other countries as well have been
concluded for an indefinite period. They stipulate a notice period
of six months. All members of the Corporate Executive Commit-
tee have a notice period of twelve months. The employment
contract with the Chairman of the Board of Directors does not
stipulate any notice period; its duration is determined by the
term of appointment and by law. There are no change-of-control
clauses.
The Remuneration Policy adopted by the Board of Directors
contains clear guidance on inducement payments and severance
packages. Such remuneration may only be paid in justified cases.
No severance packages may be awarded to members of either
the Board of Directors or the Corporate Executive Committee,
and any inducement payments granted to such persons – irre-
spective of their amount – must be approved by the Remuner-
ation Committee. Inducement payments and severance packages
for the most senior managers must be approved by the
Remuneration Committee if they exceed CHF 100,000. Each
individual case is assessed on a discretionary basis.
10. RULES STIPULATED IN THE ARTICLES OF ASSOCIATION
Certain rules governing remuneration are stipulated in the
Articles of Association:
▸
Article 30 Additional amount for the remuneration paid
to Corporate Executive Committee members appointed
since the last Annual General Meeting
Article 31 Annual General Meeting votes on remuneration
Article 32 Principles of profit-related remuneration and
the granting of equity instruments
Article 34 Loans and advances granted to members
of the Board of Directors and the Corporate Executive
Committee
▸
▸
▸
www.baloise.com/rules-regulations
117
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
11. REMUNERATION PAID TO THE MEMBERS
OF THE BOARD OF DIRECTORS
Please refer to the tables on pages 122 and 123.
BOARD OF DIRECTORS’ FEES AND MANDATORY SHARE OWNERSHIP
CHF thou-
sand / year
of which shares in
Bâloise Holding AG
Base fee – Chairman 1
Base fee – Member
Fee – Vice-Chairman 2
Fee – Chair of Committee 2
Fee – Committee Member 2
1,320
125
50
70
50
1 / 4
1 / 4
1 / 4
1 / 4
1 / 4
Mandatory share ownership
1,000 shares each
1 The Chairman is not entitled to any additional remuneration for participation in
Committees.
2 In addition to the base fee for members.
The members of the Board of Directors receive a fixed
remuneration for their service as members of the board and its
committees, as set out in the table above. These amounts
provide appropriate compensation for the responsibility and
workload involved in their various functions and have remained
unchanged since 2008.
One quarter of the annual remuneration is paid in June of
each year in the form of shares that remain restricted for three
years. The subscription price is based on the closing price on
the last trading day in May, on which the same 10 per cent
discount is granted as on shares under the Share Subscription
Plan (see pages 115 to 116). Until 2019, these shares were
allocated in March (please refer to the accompanying table for
details). With effect from 2020, the allocation has been moved
to June because the composition of committees for the full year
is known by this point. It is thus possible to ensure that members
receive exactly one quarter of their fee in shares.
Relevant closing price
Alloca-
tion
Subscrip-
tion price
as at
CHF
on
CHF
Shares received by members of
the Board of Directors 2020
29 May
2020
Shares received by members of
the Board of Directors 2019
10 Jan
2019
136.60
143.80
1 Jun
2020
1 Mar
2019
122.94
129.42
The members of the Board of Directors are obliged to lodge
1,000 shares with the Company for the duration of their term of
appointment (Article 20 of the Articles of Association). They do
not participate in any share ownership programmes that are
predicated on the achievement of specific performance targets.
The Chairman of the Board of Directors performs his various
functions on a full-time basis, in return for which he is paid
118
a fixed amount of remuneration. He is not entitled to any vari-
able remuneration and, consequently, he receives no perfor-
mance pool payments and no allocation of PSUs. He is paid
roughly a quarter of his remuneration in the form of shares
(closed period of five years). In January of each year, he can
choose freely what proportion of this share-based remuneration
he wishes to receive under the Share Participation Plan (closed
period of three years, see page 116).
The Chairman of the Board of Directors chairs the meetings
of both the Board of Directors and the Chairman’s Committee.
He also chairs the Investment Committee. He represents the
Company externally and, acting in this capacity, maintains
contact with government agencies, trade associations and other
Baloise stakeholders. Specifically, he represents Baloise in
economiesuisse, the umbrella organisation representing Swiss
business, and in the employers’ association. The Chairman of
the Board of Directors liaises with the Group CEO in formulating
proposals on Baloise’s long-term objectives and its strategic
direction and development, and these proposals are then dis-
cussed and approved by the Board of Directors as a whole. He
works closely with the Corporate Executive Committee to ensure
that the Board of Directors is provided with timely information
on all matters of material importance to the decision-making
and monitoring process at Baloise. The Chairman of the Board
of Directors is entitled to attend meetings of the Corporate
Executive Committee at any time. He takes part in these meet-
ings when necessary in order to maintain a regular dialogue
between himself and the Corporate Executive Committee and
whenever matters of strategic or long-term importance are being
discussed, and maintains close contact with the Group CEO.
As is the case for the Chairman of the Board of Directors,
the Vice-Chairman is an ex officio member of the Chairman’s
Committee (section C2.2 of the Organisational Regulations); he
is also the Head of the Audit and Risk Committee. The heads of
the control functions (Risk Management, Compliance, Group
Internal Audit and the Appointed Actuary) and the external
auditors are in regular dialogue with the Vice-Chairman of the
Board of Directors and report to him. He has powers that enable
him to ensure the independence of the control functions. If
necessary, the Board of Directors can furthermore appoint the
Vice-Chairman or another experienced member of the Board of
Directors as Lead Director in order to ensure the independence
of the Board of Directors as a governing body (section A 3.7 of
the Organisational Regulations).
No amounts receivable from current or previous members of
the Board of Directors have been waived. No remuneration was
paid to former members of the Board of Directors.
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
12. REMUNERATION PAID TO THE MEMBERS
OF THE CORPORATE EXECUTIVE COMMITTEE
Please refer to the tables on pages 124 and 125.
The structure of remuneration paid to the Corporate Exec-
utive Committee is laid down in the Remuneration Policy. It
comprises the basic salary, which is paid in cash, the variable
remuneration and other compensation components (non-cash
benefits, pension contributions). The total amount of remuner-
ation is compared with the wider market at regular intervals
(see pages 109 to 110). The actual level of remuneration paid
is determined in accordance with the table below.
T YPE OF REMUNERATION
DECIDED BY
Fixed remuneration 2020
Annual General Meeting 2019
Variable remuneration 2020
– cap
Annual General Meeting 2020
– individual payment
Remuneration Committee in Febru-
ary 2021 (in compliance with the cap set
by the Annual General Meeting 2020)
The variable remuneration comprises the performance pool
(short-term variable remuneration) and the performance share
units (PSUs, long-term variable remuneration). The calculated
expected value for variable remuneration is 100 per cent of the
basic salary (made up of 60 per cent from the performance pool
and 40 per cent in PSUs). In accordance with Article 32 of the
Articles of Association, the maximum amount of variable
remuneration that can be awarded in the event of an outstand-
ing individual performance and very good corporate results is
130 per cent of the basic salary (made up of 90 per cent from
the performance pool and 40 per cent in PSUs).
REMUNERATION STRUCTURE AND MANDATORY SHARE OWNERSHIP OF THE
CORPORATE EXECUTIVE COMMITTEE
200 %
40 %
60 %
100 %
230 %
40 %
90 %
100 %
100 %
100 %
Minimum
remuneration
Expected
value
Maximum
remuneration
0 %
0 %
100 %
40 %
60 %
100 %
40 %
90 %
100 %
PSUs (allocation)
Performance pool
Basic salary
Mandatory share
ownership
Shares and PSUs equivalent to 200% of the basic
salary (within three years of taking office)
This system takes account of applicable legislation in Switzer-
land. At the same time, it conforms with the European standard,
which demands that variable remuneration should not exceed
100 per cent of the fixed remuneration (or up to 200 per cent if
approved by the shareholders) under normal circumstances
(Capital Requirements Directive IV). The members of the Cor-
porate Executive Committee must receive at least 50 per cent
of their short-term variable remuneration in the form of shares
in order to ensure that their own interests are more strongly
aligned with those of shareholders. This mandatory purchase
of shares ensures that, compared with the market as a whole,
a significant proportion of their compensation is paid in the
form of deferred remuneration.
Each member of the Corporate Executive Committee is
required to hold at least 200 per cent of their basic salary in free
float or restricted shares or PSUs within a period of three years
from the start of their term of office.
The Remuneration Committee decides on the short-term varia-
ble remuneration awarded to the individual members of the
Corporate Executive Committee, based on proposals submitted
to the committee from the Chairman of the Board of Directors
for the Group CEO and from the Group CEO for the other members
of the Corporate Executive Committee. The Committee discusses
each individual member, assessing their performance during
the year under review and any changes compared to the prior
year. The allocation is based on (a) the individual’s contribution
to achieving the strategic targets and (b) the achievement of
the individual targets, which are divided into three categories:
Team target: Collaboration across business units and
▸
national subsidiaries, and across all functions and
departments, is assessed.
Individual business target: The individual’s contribution
to the team target is assessed; relevant key projects or
focus topics for the member of the Corporate Executive
Committee concerned are examined.
Individual development target: The professional and / or
personal development of each member of the Corporate
Executive Committee is assessed, along with the extent
to which they have set an example by putting the Baloise
values into practice.
▸
▸
Please refer to pages 114 to 115 for details regarding the allo-
cation of PSUs.
The remuneration paid to the members of the Corporate Exec-
utive Committee for the 2019 and 2020 financial years is set out
on pages 124 to 125. The disclosure is made in accordance with
the accrual principle. The table includes all forms of remunera-
tion awarded for performance in each financial year even if
individual components are not paid until a later date.
119
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
Due to the departure of Dr Thomas Sieber and the specification
of a lower performance pool factor (2020: 90 per cent) than in
the previous year (2019: 120 per cent), the total remuneration
awarded to the Corporate Executive Committee was lower in
2020 than in the previous year (reduction of 14.5 per cent in the
aggregate amount of basic salaries and variable remuneration).
The Annual General Meeting held on 26 April 2019 approved
an amount of CHF 4.74 million for the fixed remuneration
(including pension contributions) payable to the Corporate
Executive Committee for 2020. The amount paid out was
CHF 4.49 million.
In addition, the Annual General Meeting held on 24 April 2020
approved a maximum amount of CHF 5.15 million for the varia-
ble remuneration (including pension contributions and Share
Subscription Plan discount) payable for 2020. The total amount
paid out was CHF 3.56 million.
On 1 March 2020, the performance share units allocated
in 2017 were converted into shares as scheduled. These PSUs
had a value of CHF 1.08 million at the time of allocation. The
actual value of the shares granted was CHF 1.61 million.
13. LOANS AND ADVANCES
Please refer to the table on page 126.
14. SHARES AND OPTIONS HELD
Please refer to the tables on pages 127 and 128.
15. AMOUNTS OF TOTAL REMUNERATION AND VARIABLE
REMUNERATION
Please refer to the table on page 129.
As requested by circular 10 / 1 issued by the Swiss Financial
Market Supervisory Authority on the subject of remuneration,
Baloise has published in the table on page 129 the amounts of
total remuneration and variable remuneration and has disclosed
the total amounts of outstanding deferred remuneration and
the inducement payments and severance packages granted.
These figures include all forms of remuneration awarded for
2020 even if individual components are not paid until a later
date.
120
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
This page has been left empty on purpose.
121
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
REMUNERATION PAID TO THE MEMBERS OF THE BOARD OF DIRECTORS
2019
CHF thousand
Dr Andreas Burckhardt
Chairman of the Board of Directors
Dr Andreas Beerli
Vice-Chairman of the Board of Directors
Chairman’s Committee
Chair of the Audit and Risk Committee
Basic fee
1,320.0
125.0
Dr Georges-Antoine de Boccard (until 26 April 2019)
62.5
Investment Committee
Remuneration Committee
Christoph B. Gloor
Investment Committee
Audit and Risk Committee
Hugo Lasat
Investment Committee
Christoph Mäder (since 26 April 2019)
Remuneration Committee
Dr Markus R. Neuhaus (since 26 April 2019)
Audit and Risk Committee
Dr Thomas von Planta
Chairman’s Committee
Audit and Risk Committee (until 26 April 2019)
Investment Committee (since 26 April 2019)
Thomas Pleines
Chair of the Remuneration Committee
Chairman’s Committee
Prof. Dr Hans-Jörg Schmidt-Trenz
Remuneration Committee
Prof. Dr Marie-Noëlle Venturi – Zen-Ruffinen
Audit and Risk Committee
Remuneration Committee (since 26 April 2019)
125.0
125.0
83.3
83.3
125.0
125.0
125.0
125.0
Fee
for additional
functions
Total
remuneration Pension benefits
Total
Of which:
in shares
1,320.0
295.0
112.5
–
–
–
1,320.0
311.9
295.0
73.6
112.5
28.1
225.0
6.0
231.0
56.2
175.0
–
175.0
43.7
116.7
116.7
225.0
5.7
5.7
6.0
122.3
122.3
–
–
231.0
56.2
245.0
9.5
254.5
61.2
175.0
–
175.0
43.7
208.3
6.0
214.3
43.7
–
50.0
50.0
70.0
25.0
25.0
50.0
50.0
50.0
33.3
33.3
50.0
16.7
33.3
70.0
50.0
50.0
50.0
33.3
Subtotal for the Board of Directors
2,424.2
790.0
3,214.2
38.8
3,253.0
718.4
Share Subscription Plan discount
Total for the Board of Directors
62.5
3,315.5
The presentation of the remuneration paid to the members of the Board of Directors has been modified. All amounts are now stated in thousand CHF. The number of shares is no longer stated in
this context because the number of unrestricted and restricted shares can be found in the table on page 127. The presentation of the prior-year figures has been adjusted accordingly.
Explanatory notes to the table
Prior to 2012, newly elected members of the Board of Directors only received six months’ pay in the first calendar year; the first two months following election to the Board of Directors (May and June) were not
remunerated. When members resigned from the Board of Directors, they received six months’ pay instead of four months’, thereby making up for the missing two months.
Since 2012, newly elected members of the Board of Directors receive a fee for the full eight months of their first calendar year and in the year of their resignation they are paid for just four months. Mr de Boccard
was elected before this change and therefore on the payment date in March 2019 received the additional two months’ remuneration from the year of his election on top of the four months’ remuneration he was
due for 2019.
Remuneration paid to former members and related parties No remuneration on a non-arm’s-length basis was paid to companies or individuals that are related to members of the Board of Directors. Related
parties are spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors; individuals who act as trustees for them; children, relatives, companies
and trustees of the spouse or life partner. No amounts receivable from these persons were waived.
Pension contributions The information disclosed for 2019 includes the contributions that the employer is required by law to pay into the state-run social security schemes (up to the pensionable or insurable
threshold in each case). No contributions to vocational pension schemes are made for the Chairman or the other members of the Board of Directors.
Shares A proportion of the contractually agreed overall remuneration is paid in shares which remain restricted for three years. They are recognised at market value less 10 per cent (CHF 129.42, in line with the
Share Subscription Plan).
In 2019, the Chairman of the Board of Directors received half of his share-based remuneration in shares from the Share Subscription Plan (with a closed period of five years instead of the usual three years) and
half in shares under the Share Participation Plan (excluding loan-financed shares).
Share Subscription Plan discount Members of the Board of Directors receive a 10 per cent discount on the shares’ market price. This discount is also reported as part of the overall remuneration.
122
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
REMUNERATION PAID TO THE MEMBERS OF THE BOARD OF DIRECTORS
2020
CHF thousand
Dr Andreas Burckhardt
Chairman of the Board of Directors
Dr Andreas Beerli
Vice-Chairman of the Board of Directors
Chairman’s Committee
Chair of the Audit and Risk Committee
Christoph B. Gloor
Investment Committee
Audit and Risk Committee
Hugo Lasat
Investment Committee
Christoph Mäder
Remuneration Committee
Dr Markus R. Neuhaus
Audit and Risk Committee
Dr Thomas von Planta
Chairman’s Committee
Investment Committee
Thomas Pleines
Chair of the Remuneration Committee
Chairman’s Committee
Prof. Dr Hans-Jörg Schmidt-Trenz
Remuneration Committee
Prof. Dr Marie-Noëlle Venturi – Zen-Ruffinen
Audit and Risk Committee
Remuneration Committee
Basic fee
1,320.0
125.0
125.0
125.0
125.0
125.0
125.0
125.0
125.0
125.0
Fee
for additional
functions
Total
remuneration Pension benefits
Total
Of which:
in shares
1,320.0
295.0
–
–
1,320.0
311.9
295.0
73.6
225.0
6.1
231.1
56.2
175.0
–
175.0
43.6
175.0
175.0
225.0
6.1
6.1
6.1
181.1
43.6
181.1
43.6
231.1
56.2
245.0
4.6
249.6
61.2
175.0
–
175.0
43.6
225.0
6.1
231.1
56.2
–
50.0
50.0
70.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
70.0
50.0
50.0
50.0
50.0
Subtotal for the Board of Directors
2,445.0
790.0
3,235.0
35.3
3,270.3
789.9
Share Subscription Plan discount
Total for the Board of Directors
70.4
3,340.7
Explanatory notes to the table
Remuneration paid to former members and related parties No remuneration on a non-arm’s-length basis was paid to companies or individuals that are related to members of the Board of
Directors. Related parties are spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors; individuals who act as trustees
for them; children, relatives, companies and trustees of the spouse or life partner. No amounts receivable from these persons were waived.
Pension contributions The information disclosed for 2020 includes the contributions that the employer is required by law to pay into the state-run social security schemes (up to the
pensionable or insurable threshold in each case). No contributions to vocational pension schemes are made for the Chairman or the other members of the Board of Directors.
Shares A proportion of the contractually agreed overall remuneration is paid in shares which remain restricted for three years. They are recognised at market value less 10 per cent
(CHF 122.94, in line with the Share Subscription Plan).
In 2020, the Chairman of the Board of Directors received half of his share-based remuneration in shares from the Share Subscription Plan (with a closed period of five years instead of the
usual three years) and half in shares under the Share Participation Plan (excluding loan-financed shares).
Share Subscription Plan discount Members of the Board of Directors receive a 10 per cent discount on the shares’ market price. This discount is also reported as part of the overall
remuneration.
123
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
REMUNERATION PAID TO THE MEMBERS OF THE CORPORATE EXECUTIVE COMMIT TEE
Total basic
salary plus
variable
remunera-
tion
Variable
remunera-
tion as
percentage
of basic
salary
Non-cash
benefits
Pension
contribu-
tions
Total
remunera-
tion
Basic
salary
Variable remuneration
Cash
payment
(fixed)
Cash
payment
(variable)
Share
Subscrip-
tion Plan
Share
Participa-
tion Plan
PSU
(granted in
2019)
Total
variable
remunera-
tion
950.0
342.0
342.0
700.0
50.5
453.5
–
–
380.1
1,064.1
2,014.1
112 %
–
196.5
2,210.6
280.1
784.1
1,484.1
112 %
5.3
177.9
1,667.3
2019
CHF thousand
Gert De Winter
Group CEO
Michael Müller
Head of Corporate Division
Switzerland
Dr Thomas Sieber
621.0
179.0
134.0
134.1
248.5
695.6
1,316.6
112 %
5.3
196.5
1,518.4
Head of Corporate Division
Corporate Centre
Dr Carsten Stolz
500.0
135.0
135.0
–
200.0
470.0
970.0
94 %
5.3
183.1
1,158.4
Head of Corporate Division
Finance
Dr Matthias Henny
500.0
0.1
215.9
144.0
200.0
560.0
1,060.0
112 %
5.3
177.9
1,243.2
Head of Corporate Division Asset
Management
Dr Alexander Bockelmann
(since 1 February 2019)
Head of Corporate Division IT
Subtotal for the Corporate
Executive Committee
Share Subscription Plan
discount
Total for the Corporate Executive
Committee
550.0
87.1
217.8
130.7
220.1
655.7
1,205.7
119 %
–
177.9
1,383.6
3,821.0
793.8
1,498.1
408.8
1,528.8
4,229.5
8,050.5
111 %
21.3
1,109.8
9,181.5
166.5
9,348.0
The presentation of the remuneration paid to the members of the Corporate Executive Committee has been modified. All amounts are now stated in thousand CHF. The number of shares is no
longer stated in this context because the number of unrestricted and restricted shares can be found in the table on page 128. The presentation of the prior-year figures has been adjusted
accordingly.
Explanatory notes to the table
Remuneration is disclosed in accordance with the accrual principle. The table includes all forms of remuneration awarded for performance in 2019 even if individual components are not
paid until a later date. Amounts are gross, before deduction of social security contributions etc.
Remuneration paid to former members and related parties No remuneration on a non-arm’s-length basis was paid to companies or individuals that are related to members of the Corporate
Executive Committee. Related parties are spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors; individuals who act
as trustees for them; children, relatives, companies and trustees of the spouse or life partner. No amounts receivable from these persons were waived.
Share Subscription Plan Proportion of variable remuneration received directly as shares, which are measured at market value less 10 per cent markdown. Subscription price = CHF 158.40.
Share Subscription Plan discount Shares under the Share Subscription Plan are issued to members of the Corporate Executive Committee at a 10 per cent discount. This discount is also
reported as part of the overall remuneration.
Share Participation Plan Proportion of variable remuneration received as shares (excluding loan-financed shares), which are measured at market value less dividend rights discounted over
three years. Subscription price = CHF 156.46.
Performance share units (PSU) These have been disclosed at their value of CHF 167.65 at the grant date and measured using a Monte Carlo simulation, which calculates a present value for
the payout expected at the end of the vesting period.
Non-cash benefits Based on all remuneration elements required to be declared on the Swiss salary certificate, including long-service awards, taxable benefits relating to shares received in
connection with the Employee Incentive Plan (maximum of 100 shares per annum).
Pension benefits These comprise the estimated employer contributions to the state-run social security schemes and the occupational pension scheme (up to the pensionable or insurable
threshold in each case).
124
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
REMUNERATION PAID TO THE MEMBERS OF THE CORPORATE EXECUTIVE COMMIT TEE
Total basic
salary
plus
variable
remunera-
tion
Variable
remunera-
tion as
percent-
age of
basic
salary
Non-cash
benefits
Pension
contribu-
tions
Total
remunera-
tion
Basic
salary
Variable remuneration
Cash
payment
(fixed)
Cash
payment
(variable)
Share
Subscrip-
tion Plan
Share
Participa-
tion Plan
PSU
(granted
in 2020)
Total
variable
remunera-
tion
950.0
256.6
256.4
700.0
151.3
226.7
–
–
380.0
893.0
1,843.0
94 %
–
196.6
2,039.7
280.1
658.1
1,358.1
94 %
4.6
178.0
1,540.8
414.0
83.9
25.1
58.7
–
167.7
581.7
41 %
–
154.5
736.1
2020
CHF thousand
Gert De Winter
Group CEO
Michael Müller
Head of Corporate Division
Switzerland
Dr Thomas Sieber
(until 31 August 2020)
Head of Corporate Division
Corporate Centre
Dr Carsten Stolz
500.0
135.0
135.0
–
200.0
470.0
970.0
94 %
4.6
183.2
1,157.9
Head of Corporate Division
Finance
Dr Matthias Henny
500.0
0.0
145.8
97.2
200.0
443.0
943.0
89 %
4.6
160.3
1,107.9
Head of Corporate Division Asset
Management
Dr Alexander Bockelmann
600.0
52.7
175.5
122.8
240.1
591.1
1,191.1
99 %
–
178.0
1,369.1
Head of Corporate Division IT
Subtotal for the Corporate
Executive Committee
Share Subscription Plan
discount
Total for the Corporate Executive
Committee
3,664.0
679.6
964.3
278.7
1,300.2
3,222.9
6,886.9
88 %
13.9
1,050.6
7,951.4
107.1
8,058.6
Explanatory notes to the table
Remuneration is disclosed in accordance with the accrual principle. The table includes all forms of remuneration awarded for performance in 2020 even if individual components are not
paid until a later date. Amounts are gross, before deduction of social security contributions etc.
Remuneration paid to former members and related parties No remuneration on a non-arm’s-length basis was paid to companies or individuals that are related to members of the Corporate
Executive Committee. Related parties are spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors; individuals who act
as trustees for them; children, relatives, companies and trustees of the spouse or life partner. No amounts receivable from these persons were waived.
Share Subscription Plan Proportion of variable remuneration received directly as shares, which are measured at market value less 10 per cent markdown. Subscription price = CHF 143.46.
Share Subscription Plan discount Shares under the Share Subscription Plan are issued to members of the Corporate Executive Committee at a 10 per cent discount. This discount is also
reported as part of the overall remuneration.
Share Participation Plan Proportion of variable remuneration received as shares (excluding loan-financed shares), which are measured at market value less dividend rights discounted over
three years. Subscription price = CHF 139.73.
Performance share units (PSU) These have been disclosed at their value of CHF 157.11 at the grant date and measured using a Monte Carlo simulation, which calculates a present value for
the payout expected at the end of the vesting period.
Non-cash benefits Based on all remuneration elements required to be declared on the Swiss salary certificate, including long-service awards, taxable benefits relating to shares received in
connection with the Employee Incentive Plan (maximum of 100 shares per annum).
Pension benefits These comprise the estimated employer contributions to the state-run social security schemes and the occupational pension scheme (up to the pensionable or insurable
threshold in each case).
125
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
LOANS AND CREDIT FACILITIES GRANTED TO MEMBERS OF THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE COMMIT TEE
(AS AT 31 DECEMBER)
Mortgages
Loans pertaining
to the Share
Participation Plan
Other loans
2019
2020
2019
2020
2019
2020
2019
Total
2020
CHF thousand
Dr Andreas Burckhardt
Chairman
Dr Andreas Beerli
Vice-Chairman
Christoph B. Gloor
Member
Hugo Lasat
Member
Christoph Mäder
(since 26 April 2019)
Member
Dr Markus R. Neuhaus
(since 26 April 2019)
Member
Dr Thomas von Planta
Member
Thomas Pleines
Member
Prof. Dr Hans-Jörg
Schmidt-Trenz
Member
Prof. Dr Marie-Noëlle
Venturi – Zen-Ruffinen
Member
Total for the Board of
Directors
Corporate Executive
Committee member
with the highest
outstanding loan:
Dr Matthias Henny
Head of Corporate Division
Asset Management
Other members of the
Corporate Executive
Committee
Total for the Corporate
Executive Committee
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.4
2,623.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.4
2,623.5
–
1,942.0
2,136.2
2,160.0
1,700.0
2,545.5
1,061.6
2,160.0
1,700.0
4,487.4
3,197.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.4
2,623.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.4
2,623.5
1,942.0
2,136.2
4,705.5
2,761.6
6,647.4
4,897.8
The presentation of loans and advances granted to members of the Board of Directors and the Corporate Executive Committee has been modified. All amounts are now stated in thousand
CHF. The presentation of the prior-year figures has been adjusted accordingly.
Explanatory notes to the table
Loans and credit facilities No loans or credit facilities were granted at non-market terms and conditions
a) to former members of the Board of Directors or Corporate Executive Committee;
b) to companies or individuals who are related to members of the Board of Directors and the Corporate Executive Committee. Related parties are spouses or life partners; children under 18
years or dependent family members; companies owned or controlled by directors; individuals who act as trustees for them; children, relatives, companies and trustees of the spouse or
life partner.
Mortgages Mortgages of up to CHF 1 million are granted to staff at the following terms and conditions: 1 per cent below the customer interest rate for variable-rate mortgages and at a
preferential interest rate for fixed-rate mortgages.
Loans associated with the Share Participation Plan Loans to increase the effect of the Share Participation Plan (see chapter 6. “Share Subscription Plan and Share Participation Plan”).
Loans are subject to interest at a market rate (2020: 1 per cent) and have a term of three years.
Other loans There are no policy loans.
126
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
SHARES HELD BY MEMBERS OF THE BOARD OF DIRECTORS (AS AT 31 DECEMBER)
Discretionary shares
Restricted shares
Total share ownership
Percentage of issued share capital
2019
2020
2019
2020
2019
2020
2019
2020
Quantity
Dr Andreas Burckhardt
28,566
32,640
31,788
29,301
60,354
61,941
0.124 %
0.127 %
Chairman
Dr Andreas Beerli
Member
2,812
3,295
2,452
2,568
5,264
5,863
0.011 %
0.012 %
Christoph B. Gloor
8,093
8,576
2,317
2,291
10,410
10,867
0.021 %
0.022 %
Member
Hugo Lasat
Member
Christoph Mäder
(since 26 April 2019)
Member
Dr Markus R. Neuhaus
(since 26 April 2019)
Member
–
375
2,024
2,004
2,024
2,379
0.004 %
0.005 %
733
733
1,000
1,355
1,733
2,088
0.004 %
0.004 %
–
–
1,000
1,355
1,000
1,355
0.002 %
0.003 %
Dr Thomas von Planta
555
798
1,745
2,202
2,300
3,000
0.005 %
0.006 %
Member
Thomas Pleines
Member
Prof. Dr Hans-Jörg
Schmidt-Trenz
Member
Prof. Dr Marie-Noëlle
Venturi – Zen-Ruffinen
Member
Total for the Board
of Directors
Percentage of issued share
capital
2,145
2,671
2,434
2,406
4,579
5,077
0.009 %
0.010 %
–
–
–
1,338
1,693
1,338
1,693
0.003 %
0.003 %
375
2,024
2,106
2,024
2,481
0.004 %
0.005 %
42,904
49,463
48,122
47,281
91,026
96,744
0.187 %
0.198 %
0.088 %
0.101 %
0.099 %
0.097 %
0.187 %
0.198 %
Explanatory notes to the table
Shareholdings Includes shares held by related parties (spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors;
individuals who act as trustees for them; children, relatives, companies and trustees of the spouse or life partner).
Restricted shares Shares received in connection with share-based remuneration programmes are subject to a closed period of three years. The closed period for shares received by the
Chairman of the Board of Directors in connection with the Share Subscription Plan is five years. Article 20 of the Articles of Association also requires all members of the Board of Directors to
lodge 1,000 shares with the Company for the duration of their term of appointment (mandatory share ownership).
Options Members of the Board of Directors do not hold any options on Baloise shares.
127
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
SHARES HELD BY MEMBERS OF THE CORPORATE EXECUTIVE COMMIT TEE (AS AT 31 DECEMBER)
Quantity
Gert De Winter
Group CEO
Michael Müller
Head of Corporate Division Switzerland
Discretionary shares
Restricted shares
Total share ownership
Percentage of issued
share capital
Prospective
entitlements (PSUs)
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
22,875
29,593
7,125
6,591
30,000
36,184 0.061 % 0.074 %
7,809
7,225
21,662
26,698
8,125
8,477
29,787
35,175 0.061 % 0.072 %
5,351
5,325
Dr Thomas Sieber (until 31 August 2020)
9,058
–
24,511
–
33,569
– 0.069 %
–
4,918
–
Head of Corporate Division Corporate
Centre
Dr Carsten Stolz
1,453
3,006
5,654
6,012
7,107
9,018 0.015 % 0.018 %
3,245
3,803
Head of Corporate Division Finance
Dr Matthias Henny
6,338
10,618
21,867
22,073
28,205
32,691 0.058 % 0.067 %
3,531
3,803
Head of Corporate Division Asset
Management
Dr Alexander Bockelmann
(since 1 February 2019)
Head of Corporate Division IT
Total for the members
of the Corporate Executive Committee
Percentage of issued
share capital
–
–
–
6,851
–
6,851
– 0.014 %
1,313
2,841
61,386
69,915
67,282
50,004 128,668 119,919 0.264 % 0.246 % 26,167
22,997
0.126 % 0.143 % 0.138 % 0.102 % 0.264 % 0.246 %
Explanatory notes to the table
Shareholdings Includes shares held by related parties (spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors;
individuals who act as trustees for them; children, relatives, companies and trustees of the spouse or life partner).
Restricted shares Includes loan-financed shares connected with the Share Participation Plan. Shares received in connection with share-based remuneration programmes are subject to a
closed period of three years.
Options Options held in connection with the Share Participation Plan are not reported here because they were written in order to hedge loans and do not originate from a separate option
plan. Each put option is also offset by a countervailing call option.
Prospective entitlements (PSUs) Number of allocated performance share units (granted as at 1 March 2018, 1 March 2019 and 1 March 2020).
128
Baloise Group Annual Report 2020
Corporate Governance
Remuneration Report
TOTAL AND VARIABLE REMUNERATION IN THE BALOISE GROUP
Cash
Shares
Prospective
entitlements
Total
Cash
Shares
Prospective
entitlements
2019
2020
Total
CHF million
Total remuneration
765.2
5.7
5.5
776.4
795.5
4.2
5.1
804.7
Total variable remuneration (total pool)
Number of beneficiaries
156.5
5,130
5.7
196
5.5
67
167.7
155.2
5,376
4.2
212
5.1
71
164.5
Total outstanding
deferred remuneration
Debits / credits for remuneration for
previous reporting periods recognised
in profit or loss
Total inducement payments made
Number of beneficiaries
Total severance payments
made
Number of beneficiaries
–
119.7
15.2
134.9
–
112.0
15.2
127.2
– 0.3
0.0
4
6.4
67
–
–
–
–
–
–
–
–
–
–
– 0.3
– 0.9
0.0
0.1
12
6.4
5.9
57
–
–
–
–
–
– 0.9
0.1
5.9
–
–
–
–
–
Foreign currency amounts are now translated using the average exchange rate for the year (previously: closing rate on 31 December). In addition, the basis of data for remuneration data has
been redefined for the companies in Switzerland. The prior-year data has been adjusted accordingly.
Explanatory notes to the table
The table includes all forms of remuneration awarded for each year even if individual components are not paid until a later date.
Total remuneration All taxable benefits that the financial institution provides to persons directly or indirectly for the work they have performed for it in connection with their employment or
directorship. They include cash payments, non-cash benefits, expenditure that creates or increases entitlements to pension benefits, pensions, allotment of shareholdings, conversion
rights and warrants, and debt waivers.
Variable remuneration Part of total remuneration, the amount or payment of which is at the discretion of the financial institution or which depends on the occurrence of agreed conditions.
It includes performance-related and profit-based remuneration such as fees and commissions. Inducement and severance payments also fall under the definition of variable remuneration.
Total pool All the variable remuneration that a financial institution allocates for a year regardless of its form, any contractual undertaking in respect of grant dates or payout dates and any
terms and conditions attached. Inducement and severance payments made in the relevant year should be included in the total pool.
Inducement payment One-off payment agreed when an employment contract is signed. Payments to compensate for lost entitlement to remuneration from a former employer also count as
inducement pay. Inducement payments made in 2019 came to less than CHF 50,000 in total.
Severance payment Remuneration agreed in connection with the termination of an employment contract. Severance packages are paid only in individual justified cases and are granted
only to management team members and to employees, but not to members of either the Board of Directors or the Corporate Executive Committee.
129
Baloise Group Annual Report 2020
Corporate Governance
Report of the statutory auditor
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone:
Fax:
www.ey.com/ch
+41 58 286 86 86
+41 58 286 86 00
To the General Meeting of
Bâloise Holding AG, Basel
Basle, 24 March 2021
Report of the statutory auditor on the remuneration report
We have audited the accompanying remuneration report of Bâloise Holding AG for the year
ended 31 December 2020.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the
remuneration report in accordance with Swiss law and the Ordinance. The Board of Directors
is also responsible for designing the remuneration system and defining individual
remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying remuneration report. We
conducted our audit in accordance with Swiss Auditing Standards. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the remuneration report complies with Swiss law and articles 14–16
of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in
the remuneration report with regard to compensation, loans and credits in accordance with
articles 14–16 of the Ordinance. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatements in the remuneration report,
whether due to fraud or error. This audit also includes evaluating the reasonableness of the
methods applied to value components of remuneration, as well as assessing the overall
presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
130
Baloise Group Annual Report 2020
Corporate Governance
Report of the statutory auditor
Opinion
In our opinion, the remuneration report for the year ended 31 December 2020 of Bâloise
Holding AG complies with Swiss law and articles 14–16 of the Ordinance.
Opinion
Ernst & Young Ltd
In our opinion, the remuneration report for the year ended 31 December 2020 of Bâloise
Holding AG complies with Swiss law and articles 14–16 of the Ordinance.
Ernst & Young Ltd
Christian Fleig
Licensed audit expert
(Auditor in charge)
Christian Fleig
Licensed audit expert
(Auditor in charge)
Patrick Schwaller
Licensed audit expert
Patrick Schwaller
Licensed audit expert
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
131
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable business management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
Financial Report
Consolidated balance sheet ............................................ 134
Consolidated income statement ...................................... 136
Consolidated statement of comprehensive income ......... 137
Consolidated cash flow statement .................................. 138
Consolidated statement of changes in equity .................. 140
NOTES TO THE CONSOLIDATED
ANNUAL FINANCIAL STATEMENTS .............................. 142
1. Basis of preparation .................................................. 142
2. Application of new financial reporting standards ....... 142
3. Consolidation principles and accounting policies ..... 146
4. Key accounting judgements,
estimates and assumptions ...................................... 167
5. Management of insurance risk and financial risk ....... 171
6. Basis of consolidation .............................................. 212
7. Segment reporting ................................................... 213
NOTES TO THE CONSOLIDATED BALANCE SHEET ........ 218
8. Property, plant and equipment ................................. 218
9. Intangible assets ..................................................... 220
10. Investment property ................................................ 223
11. Financial assets ....................................................... 223
12. Mortgages and loans ............................................... 228
13. Derivative financial instruments .............................. 229
14. Receivables ............................................................. 231
15. Reinsurance assets .................................................. 231
16. Receivables from reinsurers ..................................... 232
17. Employee benefits ................................................... 233
18. Deferred taxes ......................................................... 242
19. Other assets ............................................................ 244
20. Non-current assets and disposal groups
classified as held for sale .......................................... 245
21. Share capital ............................................................ 245
22. Technical reserves (gross) ....................................... 246
23. Liabilities arising from banking business
and financial contracts .............................................. 255
24. Financial liabilities ................................................... 256
25. Non-technical provisions ......................................... 258
26. Insurance liabilities ................................................. 258
NOTES TO THE CONSOLIDATED
INCOME STATEMENT .................................................. 259
27. Premiums earned and policy fees .............................. 259
28. Income from investments for
own account and at own risk ..................................... 259
29. Realised gains and losses on investments ............... 260
30. Income from services rendered ................................ 263
31. Other operating income ........................................... 263
32. Classification of expenses ....................................... 264
33. Personnel expenses ................................................. 264
34. Gains or losses on financial contracts ...................... 265
35. Income taxes ........................................................... 266
36. Earnings per share ................................................... 267
37. Other comprehensive income ................................... 268
OTHER DISCLOSURES ................................................ 271
38. Long-term equity investments and structure of the
Baloise Group ........................................................... 271
39. Related party transactions ........................................ 276
40. Contingent and future liabilities ................................ 276
41. Leases ..................................................................... 280
42. Events after the balance sheet date .......................... 281
REPORT OF THE STATUTORY AUDITOR
TO THE ANNUAL GENERAL MEETING OF
BÂLOISE HOLDING LTD, BASEL .................................. 282
Unterkapitel Baloise Group Annual Report 2020
Financial Report
Consolidated balance sheet
Consolidated balance sheet
CHF million
Assets
Property, plant and equipment
Intangible assets
Investments in associates
Investment property
Financial instruments with characteristics of equity
Available for sale
Recognised at fair value through profit or loss
Financial instruments with characteristics of liabilities
Held to maturity
Available for sale
Recognised at fair value through profit or loss
Mortgages and loans
Carried at cost
Recognised at fair value through profit or loss
Derivative financial instruments
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Receivables from employee benefits
Other receivables
Receivables from investments
Deferred tax assets
Current income tax assets
Other assets
Cash and cash equivalents
Non-current assets and disposal groups classified as held for sale
Total assets
134
Note
31.12.2019
31.12.2020
8
9
38
10
11
11
12
13
15
16
17
14
14
18
19
20
362.8
1,034.7
387.4
8,120.1
466.2
1,155.4
263.4
8,410.3
4,351.1
3,983.6
11,881.8
12,556.2
7,475.5
6,974.8
27,101.5
28,110.2
2,172.0
1,993.8
15,773.9
15,872.8
1,039.1
1,048.1
1,142.1
1,089.1
577.1
51.3
498.9
6.3
279.9
375.7
97.4
74.5
320.7
3,988.0
–
677.7
117.8
515.6
7.7
294.4
366.8
87.9
48.3
226.3
4,004.0
–
87,017.8
88,364.5
Baloise Group Annual Report 2020
Financial Report
Consolidated balance sheet
CHF million
Equity and liabilities
Equity
Share capital
Capital reserves 1
Treasury shares 1
Unrealised gains and losses (net)
Retained earnings
Equity before non-controlling interests
Non-controlling interests
Total equity
Liabilities
Technical reserves (gross)
Liabilities arising from banking business and financial contracts
With discretionary participation features
Measured at amortised cost
Recognised at fair value through profit or loss
Financial liabilities
Non-technical provisions
Derivative financial instruments
Insurance liabilities
Liabilities arising from employee benefits
Other accounts payable
Deferred tax liabilities
Current income tax liabilities
Other liabilities
Liabilities included in non-current assets and disposal groups classified as held for sale
Total liabilities
Total equity and liabilities
Note
31.12.2019
31.12.2020
21
22
23
24
25
13
26
17
18
20
4.9
363.4
– 490.5
– 3.2
6,839.4
6,714.0
1.6
4.9
370.2
– 578.0
203.7
6,983.0
6,983.7
2.0
6,715.6
6,985.7
48,333.3
48,585.0
3,940.1
7,593.8
4,074.7
7,924.2
13,006.5
13,284.6
2,368.0
2,363.3
52.9
117.5
1,807.5
1,294.1
668.0
938.5
75.7
106.5
–
57.5
152.6
1,879.9
1,340.2
566.2
1,000.4
45.4
104.9
–
80,302.2
81,378.8
87,017.8
88,364.5
1 Due to the more detailed presentation of share-based payments, the statement of changes in equity had to be modified, which resulted in a minor change in the relative proportions of
treasury shares and capital reserves in the prior-year equity figures. This change has no impact on total equity.
135
Baloise Group Annual Report 2020
Financial Report
Consolidated income statement
Consolidated income statement
CHF million
Income
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Investment income
Realised gains and losses on investments
For own account and at own risk
For the account and at risk of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurers’ share of claims incurred
Acquisition costs
Operating and administrative expenses for insurance business
Investment management expenses 1
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses1
Expense
Profit before borrowing costs and taxes
Borrowing costs
Profit before taxes
Income taxes
Profit for the period
Attributable to:
Shareholders
Non-controlling interests
Earnings / loss per share
Basic (CHF)
Diluted (CHF)
Note
2019
2020
27
27
27
28
29
30
31
32
32
32
34
32
24
35
36
7,571.3
– 241.5
7,329.8
7,034.8
– 268.0
6,766.8
1,257.0
1,176.5
336.1
1,709.5
126.0
10.8
227.7
288.3
179.5
118.5
64.1
193.4
10,996.9
8,787.0
– 6,090.4
– 6,182.6
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 459.0
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 10,273.0
– 8,184.1
723.9
602.9
– 37.7
686.2
3.3
689.5
694.2
– 4.7
15.02
14.99
– 34.3
568.6
– 140.3
428.3
434.3
– 6.1
9.65
9.63
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management
expenses.
136
Baloise Group Annual Report 2020
Financial Report
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
CHF million
Profit for the period
Items not to be reclassified to the income statement
Change in reserves arising from reclassification of investment property
Change in reserves arising from assets and liabilities of post-employment benefits
(defined benefit plans)
Change arising from shadow accounting
Exchange differences
Deferred taxes
2019
2020
689.5
428.3
–
– 118.5
40.4
4.0
7.1
–
– 58.7
33.1
0.1
7.3
Total items not to be reclassified to the income statement
– 67.1
– 18.2
Items to be reclassified to the income statement
Change in unrealised gains and losses on available-for-sale financial assets
Change in unrealised gains and losses on associates
Change in hedging reserves for derivative financial instruments held as hedges
of a net investment in a foreign operation
Change in reserves arising from reclassification of held-to-maturity financial assets
Change arising from shadow accounting
Exchange differences
Deferred taxes
Total items to be reclassified to the income statement
Other comprehensive income
Comprehensive income
Attributable to:
Shareholders
Non-controlling interests
1,366.1
4.4
16.4
– 0.8
– 518.7
– 112.8
– 171.4
583.2
386.8
– 4.2
119.7
– 0.8
– 91.6
– 134.8
– 50.1
225.1
516.1
206.9
1,205.6
635.2
1,210.3
– 4.7
641.3
– 6.1
The prior-year figures in the statement of comprehensive income were adjusted slightly due to the more detailed presentation of exchange differences. Further details are provided under
‘other comprehensive income’ (chapter 37).
137
Baloise Group Annual Report 2020
Financial Report
Consolidated cash flow statement
Consolidated cash flow statement
CHF million
Cash flow from operating activities
Profit before taxes
Adjustments for
Note
2019
2020
686.2
568.6
Depreciation, amortisation and impairment of property, plant and equipment and of intangible assets
8/9
Realised gains and losses on property, plant and equipment and on intangible assets
Income from investments in associates
Realised gains and losses on financial assets, investment property and associates
Amortised cost valuation of financial instruments
Share-based payments1
Change in assets and liabilities from operating acitivities
Deferred Acquisition Costs
Technical reserves
Reinsurers’ share of technical reserves
Receivables and liabilities arising from banking business and financial contracts
Receivables from investments
Receivables and liabilities arising from insurance business and from reinsurers
Change in other assets and other liabilities from operating acitivities1
9
90.8
– 5.3
– 8.7
– 1,989.5
17.8
4.9
– 69.1
839.5
– 27.5
2,391.1
33.4
– 131.4
100.3
97.1
– 0.2
– 19.8
– 507.6
35.1
9.0
– 109.5
– 84.4
– 36.1
808.5
7.8
– 52.0
– 36.9
Change in operating assets and liabilities
Purchase of investment property
Sale of investment property
Purchase of financial assets of an equity nature
Sale of financial assets of an equity nature
Purchase of financial assets of a debt nature
Sale of financial assets of a debt nature
Addition of mortgages and loans
Disposal of mortgages and loans
Addition of derivative financial instruments
Disposal of derivative financial instruments
Borrowing costs
Taxes paid
Cash flow from operating activities
138
10
10
– 452.3
423.3
– 304.7
70.4
– 4,561.0
– 3,057.2
4,995.4
2,683.0
– 6,821.6
– 6,015.6
5,658.1
6,052.0
– 23,807.5
– 18,862.2
23,359.2
18,733.5
– 486.8
288.7
37.7
– 121.0
444.8
– 112.2
286.9
34.3
– 106.9
80.8
24
Baloise Group Annual Report 2020
Financial Report
Consolidated cash flow statement
CHF million
Cash flow from investing activities
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of intangible assets
Sale of intangible assets
Acquisition of companies, net of cash and cash equivalents
Disposal of companies, net of cash and cash equivalents
Purchase of investments in associates
Sale of investments in associates
Dividends from associates
Cash flow from investing activities
Cash flow from financing activities
Additions to financial liabilities
Disposals of financial liabilities
Borrowing costs paid
Repayments of principal in connection with leases
Purchase of treasury shares 1
Sale of treasury shares
Cash flow attributable to non-controlling interests
Dividends paid
Cash flow from financing activities
Total cash flow
Cash and cash equivalents
Balance as at 1 January
Change during the financial year
Effect of changes in exchange rates on cash and cash equivalents
Balance as at 31 December
Breakdown of cash and cash equivalents at the balance sheet date
Cash and bank balances
Cash equivalents
Cash and cash equivalents for the account and at the risk
of life insurance policyholders
Balance as at 31 December
Of which: restricted cash and cash equivalents
Supplemental disclosures on cash flow from operating activities
Interest received
Dividends received
Interest paid
Note
2019
2020
8
9
38
38
24
24
24
24
– 31.1
19.5
– 50.9
0.2
– 246.3
– 6.6
– 175.9
10.2
8.3
– 472.6
754.5
– 175.0
– 38.1
– 16.7
– 27.3
1.0
– 44.0
–
270.4
–
– 6.0
176.1
12.7
382.9
299.7
– 300.0
– 36.7
– 16.9
– 271.7
– 158.0
79.1
– 0.5
– 278.6
52.9
68.2
– 0.4
– 287.4
– 431.5
25.1
32.3
4,036.1
3,988.0
25.1
– 73.2
32.3
– 16.3
3,988.0
4,004.0
2,412.6
2,590.0
0.0
0.1
1,575.4
1,413.9
3,988.0
123.7
4,004.0
107.2
638.3
59.0
– 23.8
618.4
35.9
– 21.9
1 The prior-year figures in the cash flow statement were adjusted slightly due to the more detailed presentation of share-based payments. Further details can be found in the consolidated
statement of changes in equity.
139
Baloise Group Annual Report 2020
Financial Report
Consolidated statement of changes in equity
Consolidated statement of changes in equity
2019
CHF million
Balance as at 1 January
Profit for the period
Other comprehensive income
Comprehensive income
Other changes in equity
Dividend
Capital increase / repayment
Purchase of treasury shares 1
Sale of treasury shares
Share-based payments 1
Allocation of treasury shares as part of
share-based remuneration programmes 1
Cancellation of (treasury) shares
Increase / decrease in non-controlling
interests due to change in the scope
of consolidation
Increase / decrease in non-controlling
interests due to change in the percentage
of shareholding
Reclassification from revaluation reserve
Other 1
Note Share capital
Capital
reserves
Treasury
shares
Other
changes in
equity
Retained
earnings
Equity
before non-
controlling
interests
Non-
controlling
interests
Total
equity
4.9
352.3
– 291.8
– 515.4
6,420.5
5,970.6
–
694.2
694.2
516.1
37.6
– 4.7
0.1
6,008.2
689.5
516.1
694.2
1,210.3
– 4.7
1,205.6
– 278.6
– 278.6
– 0.5
– 279.1
37
21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 31.7
– 240.0
34.1
4.9
– 5.1
–
–
–
–
8.9
45.0
–
5.1
–
–
–
–
– 8.7
516.1
516.1
–
–
–
–
–
–
–
–
–
– 3.9
–
3.9
– 0.7
–
–
–
–
–
–
–
–
–
–
– 271.7
79.1
4.9
0.0
–
–
–
–
– 0.7
–
–
–
–
–
–
– 0.3
–
– 271.7
79.1
4.9
0.0
–
– 0.3
– 30.4
– 30.4
–
–
–
– 0.7
Balance as at 31 December
4.9
363.4
– 490.5
– 3.2
6,839.4
6,714.0
1.6
6,715.6
1 Due to the more detailed presentation of share-based payments, the statement of changes in equity had to be modified, which resulted in a minor change in the relative proportions of
treasury shares and capital reserves. This change has no impact on total equity.
140
Baloise Group Annual Report 2020
Financial Report
Consolidated statement of changes in equity
2020
CHF million
Balance as at 1 January
Profit for the period
Other comprehensive income
Comprehensive income
Other changes in equity
Dividend
Capital increase / repayment
Purchase of treasury shares
Sale of treasury shares
Share-based payments
Allocation of treasury shares as part of
share-based remuneration programmes
Cancellation of (treasury) shares
Increase / decrease in non-controlling
interests due to change in the scope
of consolidation
Increase / decrease in non-controlling
interests due to change in the percentage
of shareholding
Reclassification from revaluation reserve
Other
Note Share capital
Capital
reserves
Treasury
shares
Other
changes in
equity
Retained
earnings
Equity
before non-
controlling
interests
Non-
controlling
interests
4.9
363.4
– 490.5
– 3.2
6,839.4
6,714.0
–
434.3
206.9
206.9
–
434.3
434.3
206.9
641.3
Total
equity
6,715.6
428.3
206.9
635.2
1.6
– 6.1
0.0
– 6.1
37
21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 17.5
– 140.5
25.6
9.0
– 10.3
42.6
–
10.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 287.4
– 287.4
– 0.4
– 287.8
–
–
–
–
–
–
–
–
–
–
– 158.0
68.2
9.0
–
–
–
–
–
– 3.3
– 3.3
–
–
–
–
–
–
–
– 158.0
68.2
9.0
–
–
0.4
0.4
6.4
6.4
–
–
–
– 3.3
Balance as at 31 December
4.9
370.2
– 578.0
203.7
6,983.0
6,983.7
2.0
6,985.7
141
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Notes to the consolidated annual financial statements
Basis of presentation
1. BASIS OF PREPARATION
The Baloise Group is a European direct insurer operating in virtually every segment of the life and non-life insurance business. Its
holding company is Bâloise Holding Ltd, a Swiss corporation based in Basel whose shares are listed in the Regulatory Standard
for Equity Securities (Sub-Standard: International Reporting) of the SIX Swiss Exchange. Its subsidiaries are active in the direct
insurance markets in Switzerland, Liechtenstein, Germany, Belgium and Luxembourg. Its banking business is conducted by
subsidiaries in Switzerland. In addition, the Baloise Group has several fund management companies in Luxembourg.
The Baloise Group’s consolidated annual financial statements are based on the historical cost principle and recognise
adjustments resulting from the regular fair value measurement of investment property and of financial assets and financial
liabilities that are classified as available for sale or recognised at fair value through profit or loss. These consolidated annual
financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), which comply
with Swiss law. IFRS 4 deals with the recognition and disclosure of insurance and reinsurance contracts. The measurement of
these contracts is based on local financial reporting standards. All amounts shown in these consolidated annual financial statements
are stated in millions of Swiss francs (CHF million) and have been rounded to one decimal place. Consequently, the sum total of
amounts that have been rounded may in isolated cases differ from the rounded total shown in this report.
At its meeting on 24 March 2021 the Bâloise Holding Ltd Board of Directors approved the annual financial statements and the
Financial Report and authorised them for issue. The financial statements have yet to be approved by the Annual General Meeting
of Bâloise Holding Ltd.
2. APPLICATION OF NEW FINANCIAL REPORTING STANDARDS AND RESTATEMENTS
2.1 Newly applied IFRSs and interpretations
IFRS 9 Financial Instruments (deferral approach selected latest until 31 December 2022)
The Baloise Group is utilising the temporary exemption from IFRS 9 in connection with the amendments to IFRS 4 Insurance
Contracts. It qualifies for a temporary exemption from IFRS 9 because liabilities relating to the insurance business constituted
87 per cent of the total carrying amount of all liabilities as at 31 December 2015 (CHF 63.7 billion of totally CHF 73.3 billion). There
have been no changes to business activities since then, so 31 December 2015 continues to be the relevant date for calculating
the proportion of liabilities relating to the insurance business. The qualitative factors within the meaning of IFRS 4.20 F b) are,
firstly, Baloise’s assignment to the STOXX Europe 600 Insurance Index under stock-market law and, secondly, Bâloise Holding AG’s
regulatory categorisation by FINMA as an insurance group.
By opting to apply the temporary exemption, the Baloise Group is adopting the deferral approach, which enables it to adopt
IFRS 9 and IFRS 17 simultaneously with effect from 1 January 2023. Until these standards are adopted, there will be no effect on
profit for the period or on balance sheet line items.
126
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK
31.12.
CHF million
Financial instruments with characteristics of equity
Equities
Equity funds
Mixed funds
Bond funds
Real estate funds
Private equity
Hedge funds
Financial instruments with characteristics of liabilities
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Promissory notes and
registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Derivative financial instruments
Interest rate instruments
Equity instruments
Foreign currency instruments
Receivables
Receivables from financial contracts
Other receivables
Receivables from investments
Cash and cash equivalents
Voluntarily measured at amortised cost or fair value
through other comprehensive income under IFRS 9
Mandatorily measured at fair value through profit or
loss under IFRS 9
Carrying
amount
Fair value
Change in fair
value balance
compared with
Carrying
amount
Fair value
Change in fair
value balance
compared with
2020
2020
2019
2020
2020
2019
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19,738.2
21,413.8
7,805.6
7,103.2
288.9
7,805.6
7,181.8
289.5
11,250.6
11,704.5
4,023.7
4,521.4
615.8
29.1
725.0
213.0
–
–
–
–
615.9
29.7
725.0
220.0
–
–
–
–
294.4
366.8
295.7
366.8
2,590.1
2,590.1
–
–
–
–
–
–
–
263.6
857.6
– 660.5
278.7
181.7
– 182.7
– 437.7
1.4
725.0
12.8
– 54.6
–
–
–
13.8
– 8.9
177.5
1,952.7
1,952.7
– 142.4
86.6
671.8
158.8
704.7
906.7
4.7
–
27.5
128.8
–
–
1.1
–
–
–
9.1
410.7
33.2
49.3
–
–
–
–
86.6
671.8
158.8
704.7
906.7
4.7
–
27.5
128.8
–
–
1.2
–
–
–
9.2
410.7
33.2
49.3
–
–
–
–
2.3
135.5
– 30.1
32.7
– 3.3
– 188.1
– 10.9
– 105.7
– 8.6
–
–
– 8.9
–
–
–
– 6.6
144.3
0.3
– 66.5
–
–
–
–
127
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
CREDIT RATINGS OF FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK AT AMORTISED COST
OR FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME UNDER IFRS 9
AAA
AA
A
BBB
or no rating Carrying amount
Impairment
Lower than BBB
Fair Value lower
than BBB
or no rating
6,208.2
138.9
4,447.0
–
100.4
1,638.8
–
–
–
9,156.5
728.7
540.2
10.0
1,110.2
2,127.8
92.0
–
–
2,294.8
2,791.2
1,256.0
–
9,064.1
43.0
–
–
–
1,769.1
2,309.1
653.1
–
907.1
60.7
51.9
–
–
309.7
19,738.2
1,837.7
206.8
278.9
68.8
153.4
471.8
29.1
725.0
7,805.6
7,103.2
288.9
11,250.6
4,023.7
615.8
29.1
725.0
–
– 19.6
– 6.5
–
– 18.5
–
–
0.0
–
309.7
1,837.7
206.8
278.9
75.2
161.5
472.0
29.7
725.0
2.7
30.0
125.4
24.6
30.2
213.0
– 1.2
32.3
as at 31.12.2020
CHF million
Financial assets of a debt
nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Promissory notes and
registered bonds
Time deposits
Employee loans
Reverse repurchase
agreements
Other loans
Other receivables
Other receivables
Receivables from
investments
Cash and cash equivalents
1,338.4
350.7
682.4
3.9
117.9
14.5
111.3
63.7
42.0
10.9
35.7
62.0
201.3
59.9
294.4
366.8
– 1.2
– 1.6
201.3
59.9
156.6
2,590.1
–
156.6
The carrying amount of the financial asset before impairment pursuant to IFRS 4.39 G a) is obtained by adding together the carrying amounts and impairment losses shown in the table
above.
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Notes to the consolidated annual financial statements
IFRSs and interpretations not yet applied
2.2
The following new standards and interpretations relevant to the Baloise Group have been published by the IA SB but have not yet
come into effect and, therefore, have not been applied in the 2020 consolidated annual financial statements:
Standard /
Inter-
pretation
IFRS 9
IFRS 17
Content
Financial instruments
Insurance contracts
Applicable
to annual periods
beginning
on or after
1.1.2023
1.1.2023
IFRS 9 Financial Instruments
IFRS 9 introduces new requirements for the classification and measurement of financial instruments. Classification of financial
assets is based on the entity’s business model and on the contractual cash flow characteristics of the financial assets concerned.
IFRS 9 introduces a new impairment model and shifts the focus to providing for expected credit losses by recognising loss
allowances. IFRS 9 specifies three steps that determine the amount of expected losses and interest revenue to be recognised in
future. Credit losses already expected at the time of initial recognition are measured at the present value of the twelve-month
expected credit losses (step 1). The loss allowance is increased to an amount equal to full lifetime expected credit losses if the
credit risk of a financial liability has grown significantly since initial recognition (step 2). Where there is objective evidence of
impairment, the recognition of interest revenue is based on its net carrying amount (step 3).
It is not yet possible to fully assess what impact the amendments to IFRS 9 will have on the Baloise Group’s balance sheet
and income statement.
IFRS 17 Insurance Contracts
IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts that are
within the scope of this standard. The objective of IFRS 17 is to ensure that reporting entities provide relevant information that
faithfully represents their insurance contracts. This information provides a basis for users of financial statements to assess the
effect that insurance contracts have on an entity’s financial position, financial performance and cash flows.
IFRS 17 was published in May 2017 and is required to be applied for annual periods beginning on or after 1 January 2023.
IFRS 17 affects the way in which insurance contracts are reported. The most important changes relate to the methodology for
measuring contracts. Until now, they have been measured primarily in accordance with past developments and on the basis of
data that was available at the start of the contracts. Analysis will now have a stronger focus on the future, with assessments based
on potential cash flows. Life insurance contracts, which may have a term of several decades, will be particularly affected.
The Baloise Group has started a Group-wide project for the implementation of IFRS 17. It is too early to comment on the
potential impact on the consolidated financial statements.
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Notes to the consolidated annual financial statements
3. CONSOLIDATION PRINCIPLES AND ACCOUNTING POLICIES
3.1 Method of consolidation
3.1.1 Subsidiaries
The consolidated annual financial statements comprise the financial statements of Bâloise Holding Ltd and its subsidiaries,
including any structured entities. A subsidiary is consolidated if the Baloise Group controls it either directly or indirectly. As a rule,
this is the case if the Baloise Group has exposure or rights to variable profit components as a result of its involvement with the
investee and, because of legal positions, has the ability to influence the investee’s business activities that are critical to its
financial success and, therefore, to affect the amount of the variable profit components.
Companies acquired during the reporting period are included in the consolidated annual financial statements from the date
on which control is effectively assumed, while all companies sold remain consolidated until the date on which control is ceded.
Acquisitions of entities are accounted for under the acquisition method (previously known as the “purchase method”). Transaction
costs are charged to the income statement as an expense. The identifiable assets and liabilities of the entity concerned are
measured at fair value as at the date of first-time consolidation. Non-controlling interests arising from business combinations are
measured either at their fair value or according to their share of the acquiree’s identifiable net assets. The Baloise Group decides
which measurement method to apply to each individual business combination.
The acquisition cost corresponds to the fair value of the consideration paid to the previous owners on the date of the acquisition.
If investments in the form of financial instruments or associates were already held before control was acquired, these investments
are remeasured and any difference is recognised in profit or loss. Any contingent consideration recognised as part of the consideration
paid for the acquiree is measured at fair value on the transaction date. Any subsequent changes in the fair value of a contingent
consideration are recognised in the income statement. If the acquisition cost exceeds the fair value of assets and liabilities plus
non-controlling interests, the difference is recognised as goodwill. Conversely, if the identified net assets exceed the acquisition
cost then the difference is recognised directly through profit or loss as other operating income. All intercompany transactions and
the resultant gains and losses are eliminated.
The consolidation of subsidiaries ends on the date on which control is ceded. If only some of the shares in a subsidiary are
sold, the retained interest is measured at fair value on the date that control is lost. Gains or losses on the disposal of (some of)
the subsidiary’s shares are recognised in the income statement as either other operating income or other operating expenses.
The acquisition of additional investments in subsidiaries after assuming control and the disposal of investments in subsidiaries
without ceding control are both recognised directly in equity as transactions with owners.
3.1.2 Structured entities
Structured entities are consolidated provided the criteria for control pursuant to IFRS 10 are met. If control over a structured entity
is lost, it is removed from the basis of consolidation. The consolidation of investment funds depends on the fund’s control
arrangements and on the characteristics of the fund units. Investment fund units held by third parties, where these units are
puttable instruments that include a contractual obligation for the issuer to take back the units, are included in the basis of con-
solidation in accordance with the criteria in IAS 32. If there is no such obligation for the issuer to take back the units, the units
held by third parties are recognised as non-controlling interests in consolidated equity in accordance with the criteria in IFRS 10.
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Notes to the consolidated annual financial statements
Joint arrangements
3.1.3
Joint arrangements are contractual agreements over which two or more parties have joint control. A joint arrangement is classified
as either a joint operation or a joint venture. In a joint operation, the involved parties have direct rights and obligations in respect
of the assets and liabilities and the income and expenses. By contrast, the parties involved in a joint venture do not have a direct
entitlement to the assets and liabilities and, instead, have rights in respect of the net assets of the joint venture owing to their
position as investors.
Joint ventures are accounted for using the equity method, i. e. the Baloise Group initially recognises the joint ventures at cost
(fair value at the date of acquisition) and thereafter recognises them under the equity method (the Baloise Group’s share of the
entity’s profit or loss for the period and other comprehensive income). In the case of joint operations, the Baloise Group includes
directly in its consolidated financial statements the share of the assets, liabilities, income and expenses of the joint operation
that is attributable to the Baloise Group.
3.1.4 Associates
Associates are initially carried at cost (fair value at the date of acquisition) and thereafter are measured under the equity method
(the Baloise Group’s share of the entity’s profit or loss for the period and other comprehensive income) in cases where the Baloise
Group can exert a significant influence over the management of the entity concerned. Changes in the fair value of associates are
generally recognised in profit or loss and take account of any dividend flows. If the Baloise Group’s share of the losses exceeds
the value of the associate, no further losses are recognised. Goodwill paid for associates is included in the carrying amount of
the investment.
Functional currency and reporting currency
3.2 Currency translation
3.2.1
Each subsidiary prepares its annual financial statements in its functional currency, which is the currency of its primary economic
environment. The consolidated Financial Report is presented in CHF millions, which is the Baloise Group’s reporting currency.
3.2.2 Translation of transaction currency into functional currency at Group companies
Income and expenses in foreign currency are measured using the rates applicable on the transaction date. Non-monetary items
measured at historical cost are measured using historical rates. Monetary and non-monetary balance sheet line items measured
at fair value that arise in Group companies’ foreign-currency transactions are measured using closing rates.
Exchange differences are generally recognised in profit or loss. The exceptions are exchange differences relating to availa-
ble-for-sale non-monetary financial instruments, cash flow hedges and hedges of net investments in foreign operations, which
are recognised in other comprehensive income.
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Notes to the consolidated annual financial statements
3.2.3 Translation of functional currency into reporting currency
The annual financial statements of all entities that have not been prepared in Swiss francs are translated as follows when the
consolidated financial statements are being prepared:
▸
▸
Assets and liabilities at the closing rate
Income and expenses at the average rate for the year.
The resultant exchange differences are aggregated and recognised directly in equity. When subsidiaries are sold, any exchange
differences arising on the disposal are recognised in the income statement as a transaction gain or loss.
3.2.4 Key exchange rates
CURRENCY
CHF
1 EUR (euro)
1 USD (US dollar)
Balance sheet
Income statement
31.12.2019
31.12.2020
Ø 2019
Ø 2020
1.09
0.97
1.08
0.89
1.11
0.99
1.07
0.94
3.3 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses. The acquisition cost of property, plant and equipment includes all directly attributable costs. Subsequent acquisition
costs are only capitalised if future economic benefits associated with the property, plant and equipment will flow to the entity
concerned and these costs can be measured reliably. All other repairs and maintenance costs are expensed as incurred.
Land is not depreciated. Other items of property, plant and equipment are depreciated on a straight-line basis over the
Owner-occupied buildings: 25 to 50 years
Office furniture, equipment, fixtures and fittings: 5 to 10 years
following estimated useful lives:
▸
▸
▸ Machinery, furniture and vehicles: 4 to 10 years
▸
Computer hardware: 3 to 5 years
At each balance sheet date the Baloise Group tests all items of property, plant and equipment for impairment and reviews the
suitability of their useful lives.
An impairment loss is immediately recognised on items of property, plant and equipment if their recoverable amount is lower
than their carrying amount.
Gains or losses on the sale of property, plant and equipment are immediately taken to the income statement as either other
operating income or other operating expenses.
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Notes to the consolidated annual financial statements
Leases
The Baloise Group as a lessee
3.4
3.4.1
The Baloise Group leases real estate for office space and warehousing that it recognises on its balance sheet. Initial measurement
of the corresponding lease liability is at the present value of the lease payments made during the term of the lease, discounted
at the weighted average incremental borrowing rate of interest. The lease liability is subsequently measured at amortised cost
using the effective interest method; it consists of an interest component and a principal component. The right-of-use asset is
initially measured in the same amount as the initial lease liability, adjusted for any initial direct costs or incentives granted by the
lessor. The right-of-use asset is depreciated over the shorter of the term of the lease and the useful life of the underlying asset.
Both the formation of new leases and terminations of existing leases generate non-cash transactions in right-of-use assets and
lease liabilities. Right-of-use assets are recognised under the line item ‘Property, plant and equipment’ and the lease liabilities
under ‘Financial liabilities’ on the balance sheet.
Short-term leases with a remaining term of less than twelve months and leases where the underlying asset is of low value are
not recognised because the option pursuant to IFRS 16.6 is exercised. The payments for these leases are expensed in the income
statement on a straight-line basis over the term of the lease. Short-term assets and low-value assets relate to operating equipment,
parking spaces and other property, plant and equipment.
3.4.2 The Baloise Group as a lessor
Investment property let on operating leases is reported as investment property on the consolidated balance sheet.
Intangible assets
3.5
3.5.1 Goodwill
Goodwill represents the excess of an acquiree’s acquisition cost over the fair value of its assets and liabilities plus the acquisition-date
amount of any non-controlling interests in the acquiree and the acquisition-date fair value of the acquirer’s previously held equity
interest in the acquiree. Goodwill is reported as an intangible asset. Goodwill is tested for impairment in the second half of each
year. An impairment test may also be conducted in the first half of the year if there are objective indications that goodwill may be
permanently impaired. When a new investment is acquired, the date for conducting future impairment tests is fixed and these
tests are subsequently carried out at the same time each year. When entities are sold, their share of goodwill is recognised in their
profit or loss. Goodwill is allocated to cash-generating units (CGUs) for the purposes of impairment testing.
3.5.2 Present value of future profits (PVFP) on insurance contracts acquired
The present value of future profits on insurance contracts acquired arises from the purchase of life insurance companies or life
insurance portfolios. It is initially measured in accordance with actuarial principles and is amortised on a straight-line basis. It is
regularly tested for impairment as part of a liability adequacy test (see section 3.19.2 for further details).
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3.5.3 Deferred acquisition costs (DACs)
Costs directly incurred by the conclusion of insurance contracts or financial contracts with discretionary participation features
(DPFs) – such as commissions – are capitalised and amortised over the term of these contracts or, if shorter, over the premium
payment period. Deferred acquisition costs are tested for impairment at each balance sheet date (see section 3.19.3 for further
details).
3.5.4 Software and other intangible assets
In addition to software (including internally developed assets), other intangible assets primarily comprise external IT consultancy
(in connection with software development) and identified assets from business acquisitions (e.g. brands, customer relationships).
Both software and other intangible assets are recognised at cost and amortised over their useful life using the straight-line method.
Software has a maximum useful life of ten years. Intangible assets with indefinite useful lives are not amortised and are carried
at cost less accumulated impairment losses.
All financing for intangible assets is generally obtained from the Baloise Group’s own financial resources. If funding from
external sources is required, interest accrued during the assets’ development is capitalised as incurred.
Investment property
3.6
Investment property comprises land and / or buildings held to earn rental income or for capital appreciation (or both). If mixed-use
properties cannot be broken down into owner-occupied property and property used by third parties, the entire property is classified
according to the purpose for which most of its floor space is used. If, owing to a change of use, an investment property held by
the Baloise Group becomes the latter’s owner-occupied property, it is reclassified as property, plant and equipment. Any such
reclassification is based on the property’s fair value at the reclassification date. By contrast, if one of the Baloise Group’s owner-
occupied properties becomes an investment property owing to reclassification, then, on the date this change of use takes effect,
the difference between the property’s carrying amount and its fair value is recognised in profit or loss in the event of an impairment;
or, if the property’s fair value exceeds its carrying amount, then the difference is recognised directly in equity as other compre-
hensive income. If an investment property that was reclassified in a previous period is sold, the amount recognised directly in
equity is reclassified to retained earnings. Investment property is measured at fair value under the discounted cash flow (DCF)
method. The current fair value of a property determined under the DCF method equals the sum total of all net income expected in
future and discounted to its present value (before interest payments, taxes, depreciation and amortisation) and includes capital
expenditure and renovation costs. The net income is determined individually for each property, depending on the opportunities
and risks associated with it, and is discounted in line with market rates and on a risk-adjusted basis. The measurement is carried
out internally each year by experts using market-based assumptions that have been verified by respected consultancies. In
addition, the properties are assessed by external valuation specialists at regular intervals; roughly 10 per cent of the fair value
of the real estate portfolio is subject to such assessments each year. Changes in fair value are taken to income as realised
accounting gains or losses in the period in which they occur.
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Notes to the consolidated annual financial statements
Financial assets
3.7
The term “investments” (Kapitalanlagen in German) is used in some places and headings in the Financial Report for clarity’s sake.
The term “investments” as used in the Financial Report covers financial assets, mortgages and loans, derivative financial instruments,
cash, cash equivalents and investment property.
The following asset classes are reported as financial instruments with characteristics of equity: shares, share certificates,
units in funds investing in equities, bonds, precious metals or real estate and alternative financial assets such as private equity
investments and hedge funds. Financial instruments with characteristics of equity are generally more frequently exposed to price
volatility than financial instruments with characteristics of liabilities.
The term financial instruments with characteristics of liabilities covers securities such as bonds and other fixed-income
securities. They are usually interest-bearing and are issued for a fixed or determinable amount.
The Baloise Group classifies its financial instruments with characteristics of equity and its financial instruments with
characteristics of liabilities as either “recognised at fair value through profit or loss”, “held to maturity” or “available for sale”.
The classification of the financial instruments concerned is determined by the purpose for which they have been acquired.
Mortgages and loans are generally carried at cost. In pursuing its strategy of using natural hedges, however, the Baloise
Group applies the fair value option to designate parts of its portfolio as “recognised at fair value through profit or loss”. Appropriately
designated derivative financial instruments are used to hedge these parts of the portfolio.
Financial assets recognised at fair value through profit or loss
3.7.1
This category consists of two sub-categories: held-for-trading financial assets (trading portfolio) and financial assets that are
designated to this category. Financial instruments are classified in this category if they have principally been acquired with the
intention of selling them in the short term, or if they form part of a portfolio for which there have recently been indications that
a gain could be realised in the short term, or if they have been designated to this category. Derivative financial instruments are
classified as “held for trading” (trading portfolio) with the exception of derivatives that have been designated for hedge accounting
purposes. Also designated to this category are structured products, i. e. equity instruments and debt instruments which, in
addition to the host contract, contain embedded derivatives that are not bifurcated and measured separately. Financial assets
held under investment-linked life insurance contracts are also designated as “recognised at fair value through profit or loss”.
3.7.2 Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial instruments involving fixed or determinable payments. However,
they do not include mortgages, loans (section 3.8) or receivables (section 3.9) that the Baloise Group can – and intends to – hold
until maturity.
3.7.3 Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial instruments that have been classified as “available for sale” or
have not been designated to any of the above-mentioned categories and are not classified as mortgages, loans or receivables.
Alternative financial assets – such as private equity investments and hedge funds – are mainly classified as “available for sale”.
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3.7.4 Recognition, measurement and derecognition
All customary purchases of financial assets are recognised on the trade date. Financial assets are initially measured at fair value.
Transaction costs form part of the acquisition cost (with the exception of financial assets recognised at fair value through profit
or loss).
Financial assets are derecognised if the rights pertaining to the cash flows from the financial instrument have expired or if
the financial instrument has been sold and substantially all the associated risks and rewards have been transferred. Cash outflows
from reverse repurchase (repo) transactions are offset by corresponding receivables. The financial assets received as collateral
security from the transaction are not recognised. The relevant transaction is recognised on the balance sheet on the settlement
date. The financial assets transferred as collateral security under repurchase agreements continue to be recognised as financial
assets. The pertinent cash flows are offset by corresponding liabilities. In its stock lending operations the Baloise Group only
engages in securities lending. The borrowed financial instruments continue to be recognised as financial assets. The securities
provided as cover for repos, reverse repos and securities lending transactions are measured daily at their current fair value.
Available-for-sale financial assets and financial assets recognised at fair value through profit or loss are measured at fair
value. Held-to-maturity financial assets are measured at amortised cost using the effective interest method. Realised and unrealised
gains and losses on financial assets recognised at fair value through profit or loss are taken to income. Unrealised gains and losses
on available-for-sale financial assets are recognised directly in equity. If available-for-sale financial assets are sold or impaired,
the cumulative amount recognised directly in equity is recognised in the income statement as a realised gain or loss on financial
assets. Changes in the fair value of financial assets’ risks that are covered by fair value hedges are recognised in the income
statement for the duration of these hedges irrespective of the financial assets’ classification.
The fair value of listed financial assets is based on prices in active markets as at the balance sheet date. If no such prices are
available, fair value is estimated using generally accepted methods (such as the present-value method), independent assessments
based on comparisons with the market prices of similar instruments or the prevailing market situation.
Derivative financial instruments are measured using models or on the basis of publicly quoted prices.
If no publicly quoted prices are available for private equity investments, they are measured on the basis of their net asset
value using non-public information from independent external providers. These providers use various methods for their estimates
(e. g. analysis of discounted cash flows and reference to similar, fairly recent arm’s-length transactions between knowledgeable,
willing parties).
If the fair value of hedge funds cannot be determined on the basis of publicly quoted prices, then prices quoted by independent
external parties are used for measurement purposes.
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Notes to the consolidated annual financial statements
3.8 Mortgages and loans
Mortgages and loans (including policy loans) are financial instruments involving fixed or determinable payments that are not
traded in an active market. Mortgages and loans classified as “carried at cost” are measured at amortised cost using the effective
interest method. They are regularly tested for impairment.
Mortgages and loans held as part of fair value hedges (natural hedges) are designated as “at fair value through profit or loss”.
Present-value models are used to measure these portfolios.
3.9 Receivables
Other receivables are recognised at amortised cost less any impairment losses recognised for non-performing receivables.
Amortised cost is usually the same as the nominal amount of the receivables.
3.10 Permanent impairment
3.10.1 Financial assets measured under the amortised-cost method (mortgages, loans, receivables and
held-to-maturity financial assets)
The Baloise Group determines at each balance sheet date whether there is any objective evidence that a financial asset or a group
of financial assets may be permanently impaired. A financial asset or a group of financial assets is only impaired if, as a result of
one or more events, there is objective evidence of impairment that has an impact on the expected future cash flows from the
financial asset that can be reliably estimated. Objective evidence of a financial asset’s impairment includes observable data on
the following cases:
▸
▸
▸
▸
Serious financial difficulties on the part of the borrower
Breaches of contract, such as a borrower in default or arrears with the payment of principal and / or interest
Greater probability that the borrower will file for bankruptcy or undergo some other form of restructuring
Observable data that indicates a measurable reduction in the expected future cash flows from a group of financial assets
since their initial recognition
Analysts’ reports from banks and evaluations by credit rating agencies are also used to assess the need for impairment losses.
If there is objective evidence that loans and receivables or held-to-maturity financial assets may be permanently impaired,
the impairment loss represents the difference between the asset’s carrying amount and the present value of future cash flows,
which are discounted using the financial asset’s relevant effective interest rate. If the amount of the impairment loss decreases
in a subsequent reporting period and if this decrease can be attributed to an event that has objectively occurred since the
impairment was recognised, the previously recognised impairment loss is reversed.
The mortgage portfolio is regularly tested for impairment. If there is objective evidence that the full amount owed under the
original contractual terms and conditions or the relevant proceeds of a receivable cannot be recovered, an impairment loss is
recognised. Loan exposures are individually evaluated based on the nature of the borrower concerned, its financial position, its
credit history, the existence of any guarantors and the realisable value of any collateral security.
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3.10.2 Financial assets measured at fair value
The Baloise Group determines at each balance sheet date whether there is any objective evidence that available-for-sale financial
assets may be permanently impaired. This category includes financial instruments with characteristics of equity. An impairment
loss must be recognised on financial instruments with characteristics of equity whose fair value at the balance sheet date is more
than 50 per cent below their acquisition cost or whose fair value is consistently below their acquisition cost throughout the
twelve-month period preceding the balance sheet date. The need for an impairment loss is examined and, where necessary, such
a loss is recognised on securities whose fair value at the balance sheet date is between 20 per cent and 50 per cent below their
acquisition cost.
If an impairment loss is recognised, the cumulative net loss recognised directly in equity is taken to the income
statement.
Impairment losses on available-for-sale financial instruments with characteristics of equity that have been recognised in
profit or loss cannot be reversed and taken to income. Any further reduction in the fair value of financial instruments with char-
acteristics of equity on which impairment losses were recognised in previous periods must be charged directly to the income
statement.
An impairment loss is recognised on available-for-sale financial instruments with characteristics of liabilities if their fair value
is significantly impaired by default risk.
If the fair value of an available-for-sale financial instrument with characteristics of liabilities rises in a subsequent reporting
period and this increase can be objectively attributed to an event that has occurred since an impairment loss was recognised in
profit or loss, the impairment loss is reversed and taken to income.
3.10.3 Impairment losses on non-financial assets
Goodwill and any assets with indefinite useful lives are tested for impairment at the same time each year or whenever there is
objective evidence of impairment. Goodwill is allocated to cash-generating units (CGUs) for the purposes of impairment testing.
Insurance companies that sell both life and non-life products (so-called composite insurers) test goodwill for impairment at this
level. When impairment tests are performed, a CGU’s value in use is determined on the basis of the maximum discounted future
cash flows (usually dividends) that could potentially be returned to the parent company. This process takes appropriate account
of legal requirements and internally specified capital adequacy limits. The long-term financial planning approved by management
forms the basis for this calculation of the value in use for a period of at least three years and no more than five years. These values
are extrapolated for the subsequent period using an annual growth rate. The growth rate is based on the expected inflation rates
of the individual countries. The discount rates include the risk mark-ups for the individual operating segments. Permanent impairment
losses are recognised in the income statement as other operating expenses. All other non-financial assets are tested for impairment
whenever there is objective evidence of such impairment.
Impairment losses recognised in previous reporting periods on assets with finite useful lives are reversed if the estimates used
to determine the recoverable amount have changed since the most recent impairment loss was recognised. This increase constitutes
a reversal of impairment losses. Impairment losses recognised in previous reporting periods on goodwill are not reversed. Impairment
losses recognised in previous reporting periods on assets with indefinite useful lives are reversed and taken to income; however,
the amount to which they are reversed must be no more than the amount recognised prior to the impairment losses.
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Notes to the consolidated annual financial statements
3.11 Derivative financial instruments
Derivative financial instruments include swaps, futures, forward contracts and options whose value is primarily derived from the
underlying interest rates, exchange rates, commodity prices or share prices. The acquisition cost of derivatives is usually either
very low or non-existent. These instruments are carried at fair value on the balance sheet. At the time they are purchased they are
classified as either fair value hedges, cash flow hedges, hedges of a net investment in a foreign operation or trading instruments.
Derivative financial instruments that do not qualify as hedges under IFRS criteria despite performing a hedging function as part
of the Baloise Group’s risk management procedures are treated as trading instruments.
The Baloise Group’s hedge accounting system documents the effectiveness of hedges as well as the objectives and strategies
pursued with each hedge. Hedge effectiveness is constantly monitored from the time the pertinent derivative financial instruments
are purchased. Derivatives that no longer qualify as hedges are reclassified as trading instruments.
3.11.1 Structured products
Structured products are financial instruments whose repayment value depends on the performance of one or more underlying
instruments (such as equities, interest rates or currencies). Structured products contain embedded derivatives in addition to the
underlying instruments. Provided that the economic characteristics and risks of the embedded derivative differ from those of the
host contract and that this derivative qualifies as a derivative financial instrument, the embedded derivative is bifurcated from
the host contract and is separately recognised, measured and disclosed. If the derivative and the host contract are not bifurcated,
the structured product is designated as a host contract that is recognised at fair value through profit or loss.
3.11.2 Fair value hedges
When the effective portion of hedges is being accounted for, changes in the fair value of derivative financial instruments classified
as fair value hedges – plus the hedged portion of the fair value of the asset or liability concerned – are reported in the income
statement. The ineffective portion of hedges is recognised separately in profit or loss.
3.11.3 Cash flow hedges
When the effective portion of hedges is being accounted for, changes in the fair value of derivative financial instruments classified
as cash flow hedges are recognised directly in equity. The amounts reported in equity as “other comprehensive income” are taken
to the income statement at a later date in line with the hedged cash flows. The ineffective portion of hedges is recognised in profit
or loss.
If a hedging instrument is sold, terminated or exercised or it no longer qualifies as a hedge, the cumulative gains and losses
continue to be recognised directly in equity until the forecasted transaction materialises. If the forecasted transaction is no longer
expected to materialise, the cumulative gains and losses recognised in equity are taken to income.
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Notes to the consolidated annual financial statements
3.11.4 Hedges of a net investment in a foreign operation
Hedges of a net investment in a foreign operation are treated as cash flow hedges. When the effective portion of hedges is being
accounted for, gains or losses on hedging instruments are recognised directly in equity. The ineffective portion of hedges is
recognised in profit or loss.
If the foreign operation – or part thereof – is sold, the gain or loss recognised directly in equity is taken to the income statement.
3.11.5 Derivative financial instruments that do not qualify as hedges
Changes in the fair value of derivative financial instruments that do not qualify as hedges are recognised in the income statement
as “realised gains and losses on investments”.
3.12 Netting of receivables and liabilities
Receivables and liabilities are offset against each other and shown as a net figure on the balance sheet provided that an offsetting
option is available and the Baloise Group intends to realise these assets and liabilities simultaneously.
3.13 Non-current assets and disposal groups classified as held for sale
Non-current assets (or disposal groups) held for sale that meet the criteria stipulated in IFRS 5 “Non-current Assets Held for Sale
and Discontinued Operations” are shown separately on the balance sheet. Those assets described in the standard are measured
at the lower of their carrying amount and fair value less costs to sell. Any resultant impairment losses are taken to income.
Any depreciation or amortisation is discontinued from the reclassification date.
Details of discontinued operations – if applicable – are disclosed in chapter 20.
3.14 Other assets
Development projects earmarked for subsequent sale (such as apartments in blocks of apartments with multiple ownership) are
recognised at the lower of investment cost and recoverable value pursuant to IAS 2 Inventories. The revenue is recognised under
Other income at the time of the transfer of title (transfer of benefits and risk).
3.15 Cash and cash equivalents
Cash and cash equivalents essentially consist of cash, demand deposits and cash equivalents. Cash equivalents are predominantly
short-term liquid investments with residual terms of no more than three months.
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3.16 Equity
Equity instruments are classified as equity unless the Baloise Group is contractually obliged to repay them or to cede other
financial assets. Transaction costs relating to equity transactions are deducted and all associated income tax assets are recognised
as deductions from equity.
3.16.1 Share capital
The share capital shown on the balance sheet represents the subscribed share capital of Bâloise Holding Ltd, Basel. This share
capital consists solely of registered shares. No shares carry preferential voting rights.
3.16.2 Capital reserves
Capital reserves include the paid-up share capital in excess of par value (share premium), Bâloise Holding Ltd share options and
gains and losses on the sale of treasury shares.
3.16.3 Treasury shares
Treasury shares held either by Bâloise Holding Ltd or by subsidiaries are shown in the consolidated financial statements at their
acquisition cost (including transaction costs) as a deduction from equity. Their carrying amount is not constantly restated to reflect
their fair value. If the shares are resold, the difference between their acquisition cost and their sale price is recognised as a change
in the capital reserves. Only Bâloise Holding Ltd shares are classified as treasury shares.
3.16.4 Unrealised gains and losses (net)
This item includes changes in the fair value of available-for-sale financial instruments, the net effect of cash flow hedges, the net
effect of hedges of a net investment in a foreign operation, exchange differences and gains on the reclassification of the Baloise
Group’s owner-occupied property as investment property. Furthermore, cumulative actuarial gains and losses under defined
benefit pension plans are included in this line item.
Deductions from these unrealised gains and losses include the pertinent deferred taxes and, in the case of life insurance
companies, also the funds that will be used in future to amortise acquisition costs and to finance policyholders’ dividends (shadow
accounting). Any non-controlling interests are also deducted from these items.
3.16.5 Retained earnings
Retained earnings include the Baloise Group’s undistributed earnings and its profit for the period. Dividends paid to the shareholders
of Bâloise Holding Ltd are only recognised once they have been approved by the Annual General Meeting.
3.16.6 Non-controlling interests
Non-controlling interests constitute the proportion of Group companies’ equity attributable to third parties outside the Baloise
Group on the basis of their respective shareholdings.
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3.17 Insurance contracts
An insurance contract is defined as a contract under which one party (the insurer) accepts a significant insurance risk from another
party (the policyholder) to pay compensation, should a specified contingent future event (the insured event) adversely affect the
policyholder. An insurance risk is any directly insured or reinsured risk that is not a financial risk.
The significance of insurance risk is assessed according to the amount of additional benefits to be paid by the insurer if the
insured event occurs.
Contracts that pose no significant insurance risk are financial contracts. Such financial contracts may include a discretionary
participation feature (DPF), which determines the accounting policies to be applied.
The effective interest method is generally used to calculate receivables and liabilities arising from financial contracts (DPF
included). The effective interest rate is determined as the internal rate of return based on the estimated amounts and timing of
the expected payments. If the amounts or timing of the actual payments differ from those expected or if expectations change, the
effective interest rate must be re-determined. The deposit account balance is then remeasured as if this new effective interest
rate had applied from the outset, and the change in the value of the deposit account is recognised as interest income or interest
expense. Otherwise, the insurance cover financed from the deposit account is amortised over the expected term of the
deposit account.
The Baloise Group considers an insurance risk to be significant if, during the term of the contract and under a plausible scenario,
the payment triggered by the occurrence of the insured event is 5 per cent higher than the contractual benefits payable if the
insured event does not occur.
A discretionary participation feature (DPF) exists if the policyholder is contractually or legally entitled to receive benefits over
and above the benefits guaranteed and if
▸
▸
the benefits received are likely to account for a significant proportion of the total benefits payable under the contract,
the timing or amount of the benefits payable is contractually at the discretion of the insurer, and the benefits received are
contractually contingent on the performance of either a specified portfolio of contracts or a specified type of contract, on the
realised and / or unrealised capital gains on a specified portfolio of investments held by the insurer, or on the profit or loss
reported by the insurer.
Captive insurance policies are derecognised from the annual financial statements. This also applies to contracts involving proprietary
pension plans, provided that the employees covered by these plans work for the Baloise Group.
In addition, IFRS 4 makes exceptions for the treatment of embedded derivatives that form part of insurance contracts or
financial contracts with discretionary participation features. If such embedded derivatives themselves qualify as insurance
contracts, they do not have to be either separately measured or disclosed. In the case of the Baloise Group this affects, among
other things, certain guarantees provided for annuity conversion rates and further special exceptions such as specific guaranteed
cash surrender values for traditional policies.
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3.18 Non-life insurance contracts
All standardised non-life products contain sufficient insurance risk to be classified as insurance contracts under IFRS 4.
The non-life business conducted by the Baloise Group is broken down into seven main segments:
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Accident
All standard product lines typical of each relevant market are available in the accident insurance business. The Belgian mar-
ket and Switzerland in particular also offer specific government-regulated occupational accident products that differ from the
other products usually available.
Health
The Baloise Group writes health insurance business in Switzerland and Belgium only. The benefits paid by the products
in this segment cover the usual cost of treatment and also include a daily sickness allowance; they are available to individuals
as well as small and medium-sized businesses in the form of so-called group insurance.
General liability
In addition to conventional personal liability insurance the Baloise Group also sells third-party indemnity policies for cer-
tain professions. In Switzerland and Germany it offers policies – especially combined products – for small and
medium-sized enterprises and for industrial partners that include features such as product liability.
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▸ Motor
The two standardised products common in the market – comprehensive and third-party liability insurance – are sold in
this segment. In some countries there are also products that have been specially designed for collaborations with motoring
organisations and individual automotive companies.
Fire and other property insurance
In addition to conventional home contents insurance this segment offers an extensive range of property policies that include
fire insurance, buildings insurance and water damage insurance in all the varieties commonly available.
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▸ Marine
Marine insurance is mainly sold in Switzerland, Germany and Belgium. These products may include a third-party liability com-
ponent in addition to the usual cargo insurance.
▸ Miscellaneous
This category generally comprises small segments such as credit protection insurance and legal expenses insurance. Provided
that financial guarantees qualify as insurance contracts, they are treated as credit protection insurance policies.
3.18.1 Premiums
The gross premiums written are the premiums that have fallen due during the reporting period. They include the amount needed
to cover the insurance risk plus all surcharges. Premium contributions that are attributable to future reporting periods are deferred
by contract and – together with health insurance reserves for old age and any deferred unearned premiums – constitute the
unearned premium reserves shown on the balance sheet. Owing to the specific nature of marine insurance, premiums are deferred
not by contract but on the basis of estimates. Premiums that are actually attributable to the reporting period are recognised as
premiums earned. Their calculation is based on the premiums written and the change in unearned premium reserves.
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3.18.2 Claims reserve including claims handling costs
At the end of each financial year the Baloise Group attaches great importance to setting aside sufficient reserves for all claims
that have occurred by this date.
In addition to the reserves that it recognises in respect of the payments to be made for claims that have occurred, it also sets
aside reserves to cover the costs incurred during the claims settlement process. In order to calculate these reserves as realistically
as possible, the Baloise Group uses the claims history of recent years, generally accepted mathematical-statistical methods and all
the information available to it at the time – especially knowledge about the expertise of those entrusted with the handling of claims.
The total claims reserve consists of three components. Reserves calculated using actuarial methods form the basis of the total
claims reserve. The second component comprises reserves for those complex special cases and events that do not lend themselves
to purely statistical evaluation. These are generally rare claims that are fairly atypical of the sector concerned – usually sizeable
claims whose costs have to be estimated by experts on a case-by-case basis. Neither of these components is subject to discount-
ing. The third component consists of reserves for annuities that are discounted using basic actuarial principles such as mortality
and the technical interest rate and are largely derived from claims in the motor, liability and accident insurance businesses.
Actuarial methods are used to calculate by far the largest proportion of claims reserves. To this end, the Baloise Group selects
actuarial forecasting methods that are appropriate for each sector, insurance product and existing claims history. Additional
market data and assumptions obtained from insurance rates are used if the claims history available on a customer is inadequate.
The Baloise Group mainly applies the chain-ladder method, which is the most widely used, tried-and-tested procedure. This method
involves estimating the number and amounts of claims incurred over time and the proportion of claims that are reported to the
insurer either with a time lag or after the balance sheet date. The proportion of these so-called incurred-but-not-reported (IBNR)
claims is exceptionally important, especially in operating segments involving third-party liability insurance. These estimates
naturally factor in emerging claims trends as well as recoveries. The mean ratio of costs incurred to claims actually paid is
essentially used to calculate reserves for claims handling costs.
The forecasting methods used cannot eliminate all the uncertainties inherent in making predictions about future developments
and trends. Nonetheless, systematic monitoring of the reserves recognised in a given financial year enables the Baloise Group to
spot discrepancies as soon as possible and, consequently, to adjust the level of reserves and modify the forecasting method
where necessary. This analysis is based on the so-called “run-off triangles” presented in aggregated form in section 5.4.5. The
relevant calculations for typical property policies such as storm and tempest insurance or home contents insurance are usually
based on the payments made over the past ten years. Larger amounts of data and, consequently, claims triangles that go further
back in time and are based on both payments and expenses (payments plus reserves) are used for insurance segments with longer
run-off periods, such as third-party liability. To supplement the Baloise Group’s various internal control mechanisms, its reserves
– and the methods used to calculate them – are regularly reviewed by external specialists. Mention should be made here of the
liability adequacy test described in detail in section 3.18.4. The Baloise Group takes great care to ensure that it complies with the
pertinent financial reporting standard by performing the regularly required profitability analysis and examining whether, at the
balance sheet date, it can actually meet all the liabilities that it has taken on as an insurer. It immediately offsets any shortfall in
its reserves that it identifies.
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3.18.3 Policyholders’ dividends and participation in profits
Insurance contracts can provide customers with a share of the surpluses and profits generated by their policies (especially those
arising from their claims history). The expenses incurred by policyholders’ dividends and participation in profits are derived from
the dividends paid plus the changes in the pertinent reserves.
3.18.4 Liability adequacy test (LAT)
A LAT is carried out at each balance sheet date to ascertain whether – taking all known developments and trends into consideration
– the Baloise Group’s existing reserves are adequate.
To this end, all existing reserves – both claims reserves (including reserves for claims handling costs) and annuity reserves
in the non-life segment – are first analysed and, if a shortfall is identified, the relevant reserves are then strengthened accordingly.
This analysis explicitly includes IBNR claims, thereby ensuring that adequate reserves are available for all claims that have
already occurred.
The liability adequacy test required by IFRS must also examine whether the Baloise Group has incurred any further liabilities
for subsequent periods (future business) besides all its existing contracts maintained during the reporting period. Such business
arises, for example, when contracts are automatically extended at the end of the year on the same terms and conditions. Taking
account of all the latest data and trends, Baloise conducts a profitability analysis of its insurance business during the reporting
year in order to check whether an adequate level of premiums has been charged and, implicitly, whether these liabilities are
therefore covered. This amounts to an analysis of unearned premium reserves and an impairment test of deferred acquisition
costs at the same time. If a loss is expected to be incurred (also applies to other loss-making insurance contracts in existence at
the balance sheet date), the deferred acquisition costs are initially reduced by the respective amount. If the total amount of deferred
acquisition costs is insufficient or if the resultant liability cannot be covered in full, a separate provision for impending losses
equivalent to the residual amount is recognised under other technical reserves.
3.19 Life insurance contracts and financial contracts with discretionary participation features
The following life insurance products offered by the Baloise Group contain sufficient insurance risk to be classified as insurance
contracts under IFRS 4:
▸
▸
▸
▸
▸
▸
Endowment policies (both conventional and unit-linked life insurance)
Swiss group life business (BVG)
Term insurance
Immediate annuities
Deferred annuities with annuity conversion rates that are guaranteed at the time the policy is purchased
All policy riders such as premium waiver, accidental death and disability.
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3.19.1 General accounting policies
The accounting policies applied to traditional life insurance vary according to the type of profit participation agreed. Premiums
are recognised as income and benefits are recognised as expense at the time they fall due. The amount of reserves set aside in
each case is determined by actuarial principles or by the net premium principle, which ensures that the level of reserves generated
from premiums remains consistent over time. The actuarial assumptions used to calculate reserves at the time that contracts are
signed either constitute best estimates with explicit safety margins for specific business lines or they are determined in accordance
with local loss reserving practice and thus also factor in safety margins. The assumptions used are locked in throughout the term
of the contract unless a liability adequacy test reveals that the resultant reserves need to be strengthened after the deferred
acquisition costs (DACs) and the present value of future profits (PVFP) on acquired insurance contracts have been deducted.
Unearned premium reserves, reserves for final dividend payments and certain unearned revenue reserves (URRs) are also recognised
as components of the actuarial reserve.
A liability adequacy test is performed on all life insurance business at each balance sheet date. This involves calculating
a reserve at the measurement date that factors in all future cash flows (such as insurance benefits, surpluses and contract-related
administrative expenses) based on the best estimates available for the assumptions used at the time. If the minimum reserve
calculated in this way for individual business lines exceeds the reserve available at the time, any existing deferred acquisition
cost or present value of future profits is reduced and, if this is not enough, the reserve is immediately increased to the minimum
level and this increase is recognised in profit or loss.
3.19.2 Present value of future profits (PVFP) on insurance contracts acquired
The present value of future profits on insurance contracts acquired constitutes an identifiable intangible asset that arises from
the purchase of a life insurance company or life insurance portfolio. It is initially measured in accordance with actuarial principles
and is amortised on a straight-line basis. It is regularly tested for impairment as part of a liability adequacy test.
3.19.3 Deferral of acquisition costs
Acquisition costs are deferred. They are amortised either over the premium payment period or over the term of the insurance
policy, depending on the type of contract involved. They are tested for impairment as part of a liability adequacy test.
3.19.4 Unearned revenue reserve (URR)
The unearned revenue reserve comprises premiums that are charged for services rendered in future periods. These premiums are
deferred and amortised in the same way as deferred acquisition costs.
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3.19.5 Policyholders’ dividends
A large proportion of life insurance contracts confer on policyholders the right to receive dividends.
Surpluses are reimbursed in the form of increased benefits, reduced premiums or final policyholders’ dividends or are accrued
at interest to a surplus account. Surpluses already distributed and accrued at interest are reported as policyholders’ dividends
credited and reserves for future policyholders’ dividends (chapter 22). The relevant interest expense is reported as interest
expenses on insurance liabilities. Surpluses that have been used to finance an increase in insurance benefits are recognised in
actuarial reserves. All investment income derived from unit-linked life insurance contracts is credited to the policyholder.
IFRS 4 introduces the concept of a discretionary participation feature (DPF), which is of relevance not only for the classification
of contracts but also for the disclosure of surplus reserves according to policyholders’ share of the unrealised gains and losses
recognised directly in equity under IFRS and their share of the increases and decreases recognised in profit or loss in the consolidated
financial statements compared with the financial statements prepared in accordance with local accounting standards. IFRS 4
states here that the portion of an insurance contract’s liability that is attributable to a discretionary participation feature (“DPF
component”) must be reported separately. This standard does not provide any clear guidance as to how this DPF component
should be measured and disclosed.
When accounting for contracts that contain discretionary participation features, the Baloise Group treats measurement
differences that are attributable to such contracts and are credited to policyholders according to a legal or contractual minimum
quota as a DPF component. Distributable retained earnings and eligible unrealised gains and losses of fully consolidated subsidiaries
are allocated pro rata to the DPF components of the life insurance company concerned. The DPF component calculated in this way
is reported as part of the reserves for future policyholders’ dividends (chapter 22). These reserves include policyholders’ dividends
that are unallocated and have been set aside as a reserve under local accounting standards.
If no legal or contractual minimum quota has been stipulated, the Baloise Group defines a discretionary participation feature
as the currently available reserve for premium refunds after allowing for final policyholders’ dividends. Unless a minimum quota
has been stipulated, all other measurement differences between the financial statements prepared in accordance with local
accounting standards and IFRS financial statements are recognised directly in equity.
The applicable minimum quotas prescribed by law, contract or Baloise’s articles of association vary from country to country.
Life insurance companies operating in Germany and in some areas of Swiss group life business are required by law to distribute
a minimum proportion of their profits to policyholders in the form of dividends.
Policyholders in Germany must receive a share of the profits generated. Certain losses incurred are borne by the Company.
Policyholders are entitled to 90 per cent of investment income (minus the technical interest rate), 90 per cent of the net profit on
risk exposures and 50 per cent of other surpluses. The articles of association of Basler Lebensversicherungs-AG, Germany,
additionally stipulate a minimum quota of 95 per cent for part of its insurance portfolio.
Minimum quotas are also applied to some of the Baloise Group’s Swiss occupational pensions (BVG) business, which is
subject to the legal quotas of 100 per cent for changes in liabilities and 90 per cent for changes in assets.
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3.20 Reinsurance
Reinsurance contracts are insurance contracts between insurance companies and / or reinsurance companies. There must be
a transfer of risk for a transaction to be recognised as reinsurance; otherwise the transaction is treated as a financial contract.
Inward reinsurance is recognised in the same period as the initial risk. The relevant technical reserves are reported as gross
unearned premium reserves or gross claims reserves for non-life insurance and as gross actuarial reserves for life insurance. In
non-life insurance they are estimated as realistically as possible based on empirical values and the latest information available,
while in life insurance they are recognised as a reserve to cover the original transaction.
Outward reinsurance is the business ceded to insurance companies outside the Baloise Group and includes transactions
ceded from direct life and non-life business and from inward insurance.
Assets arising from outward reinsurance are calculated over the same periods and on the same basis as the original trans-
action and are reported as reinsurance assets (chapter 15). Impairment losses are recognised in profit or loss for assets deemed
to be at risk owing to the impending threat of insolvency.
3.21 Liabilities arising from banking business and financial contracts
3.21.1 With discretionary participation features
Financial contracts with discretionary participation features are capital accumulated by customers that entitles them to receive
policyholders’ dividends. The accounting principles applied to these financial contracts are the same as those for life insurance
contracts; the accounting policies for life insurance are described in section 3.19.
3.21.2 Measured at amortised cost
Liabilities measured at amortised cost include savings deposits, medium-term bonds, mortgage-backed bonds, other liabilities
and payment obligations that do not qualify as insurance contracts. They are initially measured at their acquisition cost (fair value).
The difference between acquisition cost and redemption value is recognised in profit or loss over the term of the liability as
“gains or losses on financial contracts” under the amortised-cost method and the effective interest method.
3.21.3 Recognised at fair value through profit or loss
This item includes financial contracts for which the holder bears the entire investment risk as well as banking liabilities that are
designated as “at fair value through profit or loss” as part of the Baloise Group’s strategy of using natural hedges.
3.22 Financial liabilities
Financial liabilities include not only bonds issued in the capital markets but also lease liabilities.
Financial liabilities are initially measured at their acquisition cost (fair value). Acquisition cost includes transaction costs.
The difference between acquisition cost and redemption value is recognised in profit or loss over the term of the liability as borrowing
costs under the amortised-cost method and the effective interest method.
Lease liabilities are initially measured at the present value of the lease payments, discounted at the weighted average
incremental borrowing rate of interest. Lease liabilities are subsequently measured at amortised cost using the effective interest
method, including both an interest component and a principal component.
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3.23 Employee benefits
The benefits that the Baloise Group grants to its employees comprise all forms of remuneration that is paid in return for work
performed or in special circumstances.
The benefits available include short-term benefits (such as wages and salaries), long-term benefits (such as long-service
bonuses), termination benefits (such as severance pay and social compensation plan benefits) and post-employment benefits.
The benefits described below may be especially significant owing to their scale and scope.
3.23.1 Post-employment benefits
The main post-employment benefits provided are retirement pensions, employer contributions to mortgage payments and certain
insurance benefits. Although these benefits are paid after employees have ceased to work for the Baloise Group, they are funded
while the staff members concerned are still actively employed. All the pension benefits currently provided by the Baloise Group
are defined benefit plans. The projected unit credit method is used to calculate the pertinent pension liabilities.
Assets corresponding to these liabilities are only recognised if they are ceded to an entity other than the employer (such as
a foundation). Such assets are measured at fair value. Changes to assumptions, discrepancies between the planned and actual
returns on plan assets, and differences between the benefit entitlements effectively received and those calculated using actuarial
assumptions give rise to actuarial gains and losses that must be recognised directly in other comprehensive income.
The Baloise Group’s pension plan agreements are tailored to local conditions in terms of enrolment and the range of
benefits offered.
3.23.2 Share-based payments
The Baloise Group offers its employees and management team members the chance to participate in various plans under which
shares are granted as part of their overall remuneration packages: the Employee Incentive Plan, the Share Subscription Plan and
the Share Participation Plan as well as Performance share units (PSU). The PSU programme and the Employee Incentive Plan are
equity-settled share-based payment plans. By contrast, the Share Subscription Plan and the Share Participation Plan are share-
based payment plans with a choice of settlement.
In addition, FRIDAY Insurance S.A. offers its employees a Phantom Stock Option Programme (PSOP), which is a cash-settled
remuneration programme. This plan has been dissolved early with effect from 31 December 2020 and will be replaced with a
new equity-settled plan from 1 January 2021.
Equity-settled and cash-settled plans, as well as plans with a choice of settlement method, are measured and disclosed
in compliance with IFRS 2 Share-based Payment. Equity-settled plans are measured at fair value on the grant date and are
charged as personnel expenses during the vesting period and recognised under equity. Until the vesting period, outstanding
(cash-settled) PSOPs are measured at fair value through profit or loss on every balance sheet date.
3.24 Non-technical provisions
Non-technical provisions for restructuring or legal claims are recognised for present legal or constructive obligations when it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligations and a reliable
estimate can be made of the amounts of the obligations. The amount recognised as a provision is the best estimate of the
expenditure expected to be required to settle the obligation. If the amount of the obligation cannot be estimated with sufficient
reliability, it is reported as a contingent liability.
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3.25 Taxes
Provisions for deferred taxes are recognised under the liability method, which means that they are based either on the current
tax rate or on the rate expected in future. Deferred taxes reflect the tax-related impact of temporary differences between the assets
and liabilities reported in the IFRS financial statements and those reported for tax purposes. When deferred taxes are calculated,
tax loss carryforwards are only recognised to the extent that sufficient taxable profit is likely to be earned in future.
Deferred tax assets and liabilities are offset against each other and shown as a net figure in cases where the criteria for such
offsetting have been met. This is usually the case if the tax jurisdiction, the taxable entity and the type of taxation are identical.
3.26 Revenue recognition
Revenue and income are recognised at the fair value of the consideration received or receivable. Intercompany transactions and
the resultant gains and losses are eliminated. Recognition of revenue and income is described below.
3.26.1 Income from services rendered
Income from services rendered is recognised over a period of time, because the customer receives the benefit of the service
provided by the Baloise Group while he or she is using it.
3.26.2 Interest income
Interest income from financial instruments that are not recognised at fair value through profit or loss is recognised under the
effective interest method. If a receivable is impaired, it is written down to its recoverable amount, which corresponds to the
present value of estimated future cash flows discounted at the contract’s original interest rate.
3.26.3 Dividend income
Dividend income from financial assets is recognised as soon as a legal entitlement to receive payment arises.
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4. KEY ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The Baloise Group’s consolidated annual financial statements contain assumptions and estimates that can impact on the annual
financial statements for the following financial year. Estimates and the exercise of discretion by management are kept under
constant review and are based on empirical values and other factors – including expectations about future events – that are
deemed to be appropriate on the date that the balance sheet is prepared.
Fair value of various balance sheet line items
4.1
Where available, prices in active markets are used to determine fair value. If no publicly quoted prices are available or if the
market is judged to be inactive, fair value is either estimated based on the present value or is determined using measurement
methods. These methods are influenced to a large extent by the assumptions used, which include discount rates and estimates
of future cash flows. The Baloise Group primarily uses fair values; if no such values are available, it applies its own models.
Detailed information about fair value measurement can be found in chapter 5.7.
▸
The following asset classes and financial liabilities are measured at fair value:
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Investment property
The DCF method is used to determine the fair value of investment property. The assumptions and estimates used for this
purpose are described in section 3.6.
Financial instruments with characteristics of equity and financial instruments with characteristics of liabilities
(available for sale or recognised at fair value through profit or loss)
Fair value is based on prices in active markets. If no quoted market prices are available, fair value is estimated using generally
accepted methods (such as the present-value method), independent assessments based on comparisons with the market
prices of similar instruments or the prevailing market situation. Derivative financial instruments are measured using models
or on the basis of quoted market prices. If no publicly quoted prices are available for private equity investments, they are
measured on the basis of their net asset value using non-public information from independent external providers. These
providers use various methods for their estimates (e. g. analysis of discounted cash flows and reference to similar, fairly recent
arm’s-length transactions between knowledgeable, willing parties). If such estimates do not enable financial assets to be
reliably measured, the assets are recognised at cost and disclosed accordingly. Publicly quoted prices are used to determine
the fair value of hedge funds. If no such prices are available, prices quoted by independent third parties are used to determine
fair value.
▸ Mortgages and loans (recognised at fair value through profit or loss)
▸
▸
Mortgages and loans are designated as “at fair value through profit or loss” as part of the Baloise Group’s strategy of using
natural hedges. Present-value models are used to measure these portfolios.
Derivative financial instruments
Models or quoted market prices are used to determine the fair value of derivative financial instruments.
Liabilities arising from banking business and financial contracts (recognised at fair value through profit or loss)
Liabilities arising from investment-linked life insurance contracts involving little or no transfer of risk are measured at fair
value based on the capitalised investments underlying these liabilities.
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Financial instruments with characteristics of liabilities (held to maturity)
4.2
The Baloise Group applies the provisions of IAS 39 when classifying non-derivative financial instruments with fixed or
determinable payments as “held to maturity”. To this end, it assesses its intention and ability to hold these financial instruments
to maturity.
If – contrary to its original intention – these financial instruments are not held to maturity (with the exception of specific
circumstances such as the disposal of minor investments), the Baloise Group must reclassify all held-to-maturity financial instruments
as “available for sale” and measure them at fair value. Chapter 11 contains information on the fair values of the financial instruments
with characteristics of liabilities that are classified as “held to maturity”.
Impairment
4.3
The Baloise Group determines at each balance sheet date whether there is any objective evidence that financial assets may be
permanently impaired.
▸
Financial instruments with characteristics of equity (available for sale)
An impairment loss must be recognised on available-for-sale financial instruments with characteristics of equity whose fair
value at the balance sheet date is more than 50 per cent below their acquisition cost or whose fair value is consistently below
their acquisition cost throughout the twelve-month period preceding the balance sheet date. The Baloise Group examines
whether it needs to recognise impairment losses on securities whose fair value at the balance sheet date is between 20 per cent
and 50 per cent below their acquisition cost. Such assessments of the need to recognise impairment losses consider
various factors such as the volatility of the securities concerned, credit ratings, analysts’ reports, economic conditions and
sectoral prospects.
Financial instruments with characteristics of liabilities (available for sale or held to maturity)
Objective evidence of a financial asset’s impairment includes observable data on the following cases:
– Serious financial difficulties on the part of the borrower
– Breaches of contract, such as a borrower in default or arrears with the payment of principal and / or interest
– Greater probability that the borrower will file for bankruptcy or undergo some other form of restructuring
– Observable data that indicates a measurable reduction in the expected future cash flows from a group of financial
▸
assets since their initial recognition
Analysts’ reports from banks and evaluations by credit rating agencies are also used to assess the need for impairment losses
▸ Mortgages and loans (carried at cost)
The mortgage portfolio is regularly tested for impairment. The methods and assumptions used in these tests are also regularly
reviewed in order to minimise any discrepancies between the actual and expected probabilities of default.
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4.4 Deferred taxes
Unused tax loss carryforwards and other deferred tax assets are recognised if it is more likely than not that they will be realised.
To this end, the Baloise Group makes assumptions about the recoverability of these tax assets; these assumptions are based on
the financial track record and future income of the taxable entity concerned.
Estimate uncertainties specific to insurance
4.5
Estimate uncertainties pertaining to actuarial risk are discussed from chapter 5.4 onwards.
4.6 Non-technical provisions
The measurement of non-technical provisions requires assumptions to be made about the probability, timing and amount of any
outflows of resources embodying economic benefits. A provision is recognised if such an outflow of resources is probable and
can be reliably estimated.
Employee benefits
4.7
In calculating its defined benefit obligations towards its employees, the Baloise Group makes assumptions about the expected
return on plan assets, the economic benefits embodied in assets, future increases in salaries and pension benefits, the discount
rate applicable and other parameters. The most important assumptions are derived from past experience of making estimates.
The assumptions factored into these calculations are discussed in chapter 17.2.7.
4.8 Goodwill impairment
Goodwill is tested for impairment in the second half of each year or whenever there is objective evidence of impairment. Such
impairment tests involve calculating a value in use that is largely based on estimates such as the financial planning approved by
management and the discount rates and growth rates mentioned in chapter 9.1.
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This page has been left empty on purpose.
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5. MANAGEMENT OF INSURANCE RISK AND FINANCIAL RISK
The companies in the Baloise Group offer their customers non-life insurance, life insurance and banking products (the latter in
Switzerland). Consequently, the Baloise Group is exposed to a range of risks.
The main risks in the non-life insurance sector are natural disasters, major industrial risks, third-party liability and personal
injury. The insurance business as a whole is examined regularly by means of extensive analytical studies. The results of this
analysis are taken into account when setting aside reserves, fixing insurance rates and structuring insurance products and reinsurance
contracts. In the non-life sector, studies focusing on the risks arising from natural disasters have been carried out in recent years.
On some of them we worked with reinsurance companies and brokers to determine the level of exposure to these risks and the
extent of risk transfer required.
The predominant risks in the life insurance sector are the following biometric risks:
longevity risk (annuities and pure endowment policies),
▸
▸ mortality risk (whole-life and endowment life insurance),
▸
disability risk (in the sense of the risk of premiums proving insufficient due to an adverse disability claims history).
Because the Baloise Group issues interest rate guarantees, it is also exposed to interest rate risk. There are also implicit financial
guarantees and options which also affect liquidity, investment planning and the income generated by Group companies; they
include guaranteed surrender prices when policyholders cancel and guaranteed annuity factors on commencement of the payout
phase of annuities.
Longevity, mortality and disability rates are risks specific to life insurance and are monitored on an ongoing basis. The
companies in the Baloise Group review and analyse mortality rates among their local customer bases, along with the frequency
with which policies are cancelled, invalidated and reactivated. For this analysis, they generally use standard market statistics
that are compiled by actuaries and include adequate safety margins. The information they gather is used for ensuring that rates
are adequate and also for setting aside sufficient reserves to meet future insurance liabilities. Because rates are required by law
to be calculated conservatively, and the statistical base is relatively good, the risks in this area are manageable. In the field of
annuities, there is an additional trend risk in the form of a steady rise in life expectancy which is resulting in ever longer annuity
payout periods. This risk is addressed by the addition of suitable factors to the basis for calculation.
Managing participating insurance contracts is an additional method of mitigating risk. For example, bringing policyholders’
dividends into line with altered circumstances as far as permitted by local regulations is one option that could be taken if the risk
situation were to change. However, the allocation of surpluses between policyholders and the Company is not only subject to local
law, it is also governed by market expectations.
The main risk categories to which the Banking division of the Baloise Group is exposed are credit risk, interest rate risk and
liquidity risk. These risks are identified and managed locally by the bank. The loan portfolio is reviewed and analysed on an
ongoing basis. A range of tools is used for this purpose, including standardised credit regulations and procedures, scoring and
rating procedures, focusing on low-risk markets and the use of an automated arrears system. The information obtained is incorporated
into credit decisions. Balance sheet risks (interest rate and liquidity risks) are managed by the bank’s asset and liability management
(ALM) committee. The data and key figures required are determined and calculated using a specialist IT application.
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5.1 Organisation of risk management in the Baloise Group
The Baloise Group’s insurance and banking activities in various European countries, as well as its global investments, expose it
to market risks such as currency risk, credit risk, interest rate risk and liquidity risk.
A comprehensive Group-wide risk management system is in place in all insurance units and the banking business in order to
Organisation and responsibilities
manage these risks. Its Group-wide Risk Management Standards focus on the following areas:
▸
▸ Methods, regulations and limits
▸
Risk control
An overall set of rules governs all activities directly connected with risk management and ensures that they are compatible with
one another.
At the highest level, internal and external risk bands restrict and manage the overall risks incurred by the Baloise Group and
the individual business units.
At the level exposed to financial and business risk, various limits and regulations restrict the individual risks that have been
identified to a level that is acceptable, or eliminate them completely.
Within the Baloise Group and within each business unit, a risk owner is responsible for each individual risk that has been
identified. Risk owners are allocated according to a hierarchy of responsibility. The Group’s overall risk owner is the Chief
Executive Officer of the Baloise Group. Alongside the risk owners, defined risk controllers are responsible for systematic risk
control and risk reporting. When selecting risk controllers, particular care is taken to ensure that their role is independent of
the risk they control. Risk control within the Baloise Group focuses on investment risk, business risk (actuarial and banking
risks), risks to the Group’s financial structure and operational risks including compliance. The overall risk controller is the Chief
Executive Officer of the Baloise Group.
The Baloise Group’s risk map is a categorisation of the risks it has identified. The risks are divided into three levels:
Category of risk
Sub-category of risk
Type of risk
▸
▸
▸
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The business-risk, investment-risk and financial-structure-risk categories relate directly to the Baloise Group’s core businesses.
These risks are deliberately incurred, managed and optimised by the management team and various risk committees. Analysis of
these risks is model-based and it ultimately results in an aggregate overview.
Business-environment risk, operational risk and management and information risk arise as direct or indirect results of the
business operations, business environment or strategic activities of each company. Risks of this type are also identified, assessed
on a qualitative/quantitative basis and managed accordingly. The assessment also serves to analyse the significance of the risk
in question in the context of the overall risk situation of the Baloise Group and the individual Group company.
The Baloise Group’s central risk management team forms part of Corporate Division Finance and reports to the Group Chief
Risk Officer, who in turn reports to the Group CFO. It coordinates intra-Group policies, risk reporting and the technical development
of suitable risk management processes and tools. Every month, it tracks developments in the financial markets and their impact
on the risk portfolio and the individual risk capacity of all the business units and the Group as a whole. The relevant risk owners
and risk controllers verify the figures that have been computed and incorporate them into their management decisions.
An annual reporting is undertaken for each identified risk category. To this end, each business unit compiles an ORSA (Own
Risk and Solvency Assessment) report.
Life and non-life underwriting strategies
5.2
The Baloise Group primarily underwrites insurance risk for private individuals and small and medium-sized enterprises in selected
countries in mainland Europe. Industrial insurance in the property and third-party liability, marine and technical insurance sectors is
largely provided by Baloise Insurance in Basel and in Bad Homburg (Germany) and by our Belgian business unit Baloise Insurance Belgium.
Every business unit in the Baloise Group issues regulations regarding underwriting and risk review. They include clear
authorisation levels and underwriting limits for each sector. Underwriting limits are approved by a business unit’s highest
decision- making body. In the industrial insurance unit, the maximum net underwriting limit for property insurance amounts to
CHF 150 million for Switzerland and EUR 100 million for Germany, Belgium and Luxembourg. The only other comparable under-
writing limits in the Group are for marine and liability insurance. Tools for setting the basic premium and for risk-based
management of the total portfolio are also used to manage industrial insurance risk.
For its exposure to natural hazards the Baloise Group has purchased reinsurance cover for the whole Group amounting to CHF
500 million. In addition, Basler Switzerland purchased reinsurance cover of up to CHF 800 million for earthquakes and Baloise
Belgium purchased reinsurance cover of up to CHF 700 million for storm and tempests.
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RISK MAP
Business Risks
Investment Risks
Financial Structure Risks
Business Environment Risks
Operational Risks
Leadership and Information Risks
Actuarial Risks Life
▸ Parameter Risks
▸ Catastrophe Risks
Actuarial Risks Non-Life
▸ Premiums
▸ Claims
Market Risks
▸ Interest rates
▸ Equities
▸ Currencies
▸ Real Estate
▸ Market Liquidity
▸ Derivatives
▸ Catastrophe Risks
▸ Alternative investments
▸ Reserving
Reinsurance
▸ Premiums / Pricing
▸ Reinsurance Default
▸ Active Reinsurance
Credit Risks
Asset-Liability Risks
▸ Interest Rate Change Risk
▸ (Re)Financing, Liquidity
Risk Concentration
▸ Accumulation Risks
▸ Cluster Risks
Balance Sheet Structure and
Capital Requirements
▸ Solvency
▸ Other Regulatory Requirements
174
Change in Standards
IT Risks
Organizational Structure
Competition Risks
External Events
Investors
Corporate Culture
Business Strategy
▸ Business Portfolio
▸ Risk Steering
▸ Sustainability
External Communication
▸ External Reporting
▸ Incentive System
Merger and Acquisitions
▸ Liability and Litigations
▸ Reputation Management
▸ IT Governance
▸ IT Architecture
▸ IT Operations
▸ Cyber Security
HR Risks
▸ Skills / Capacities
▸ Availability of Knowledge
Legal Risks
▸ Contracts
▸ Tax
Compliance
Business Processes
▸ Process Risks
▸ Project Risks
▸ In- / Outsourcing
Financial Statements, Forecast, Planning
Project Portfolio
Internal Misinformation
Risk Analysis and Risk Reporting
▸ Risk Analysis and Risk Assessment
▸ Risk Reporting
RISK MAP
Actuarial Risks Life
▸ Parameter Risks
▸ Catastrophe Risks
Actuarial Risks Non-Life
▸ Premiums
▸ Claims
▸ Reserving
Reinsurance
▸ Premiums / Pricing
▸ Reinsurance Default
▸ Active Reinsurance
▸ Catastrophe Risks
▸ Alternative investments
Market Risks
▸ Interest rates
▸ Equities
▸ Currencies
▸ Real Estate
▸ Market Liquidity
▸ Derivatives
Credit Risks
Asset-Liability Risks
▸ Interest Rate Change Risk
▸ (Re)Financing, Liquidity
Risk Concentration
▸ Accumulation Risks
▸ Cluster Risks
Balance Sheet Structure and
Capital Requirements
▸ Solvency
▸ Other Regulatory Requirements
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Business Risks
Investment Risks
Financial Structure Risks
Business Environment Risks
Operational Risks
Leadership and Information Risks
Change in Standards
IT Risks
Organizational Structure
Competition Risks
External Events
Investors
▸ IT Governance
▸ IT Architecture
▸ IT Operations
▸ Cyber Security
HR Risks
▸ Skills / Capacities
▸ Availability of Knowledge
Corporate Culture
Business Strategy
▸ Business Portfolio
▸ Risk Steering
▸ Sustainability
▸ Incentive System
Merger and Acquisitions
Legal Risks
▸ Contracts
External Communication
▸ External Reporting
▸ Liability and Litigations
▸ Reputation Management
Financial Statements, Forecast, Planning
Project Portfolio
Internal Misinformation
▸ Tax
Compliance
Business Processes
▸ Process Risks
▸ Project Risks
▸ In- / Outsourcing
Risk Analysis and Risk Reporting
▸ Risk Analysis and Risk Assessment
▸ Risk Reporting
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Notes to the consolidated annual financial statements
Life and non-life reinsurance strategies
5.3
The Baloise Group’s non-life treaty reinsurance for all business units in the Group is structured and placed in the market by Group
Reinsurance, part of Corporate Division Finance. When structuring the programme, Group Reinsurance focuses on the risk-bearing
capacity of the Group as a whole. To date, the Group has only placed non-proportional reinsurance programmes. The Group’s
maximum retention for cumulative claims is CHF 20 million. The retentions for individual claims are CHF 16 million for property
claims, CHF 15 million for marine claims and CHF 13.7 million on a non-indexed basis for third-party liability claims. The local
Baloise Group business units also use additional facultative reinsurance cover on a case-by-case basis. This type of reinsurance
is dependent on the individual risk in each case and it is therefore placed by the business units themselves.
Reinsurance contracts may only be entered into with counterparties that have been authorised in advance by Corporate
Division Finance. Reinsurers must generally have a minimum rating of A – from Standard & Poor’s, but in exceptional cases – and
in specific circumstances – a BBB + rating or a comparable rating from another recognised rating agency is permitted. However,
reinsurers of this rating would be used for short-dated business in the property insurance segment only. This rule does not apply
to captives and pools that are active reinsurance companies because they do not generally have ratings.
Reinsurer credit risk is reviewed on a regular basis. A watch list is kept of reinsurers that are bankrupt or in financial difficulties.
The list contains details of all relationships the Group has with these reinsurers, receivables due to the Group that are outstanding
or have been written off and provisions the Group has recognised. The watch list is updated periodically.
The same requirements for reinsurers apply to life insurance as to non-life insurance, although reinsurance is a less important
instrument for ceding risk in life insurance business.
5.4 Non-Life
5.4.1 Actuarial risk
The Baloise Group primarily underwrites insurance risk for private individuals and small and medium-sized enterprises in selected
countries in mainland Europe. Business with industrial clients is also conducted in Switzerland and Germany. Underwriting risk
is limited by monitoring and adjusting rates and maintaining underwriting policies and limits appropriate to the size of each
portfolio and the country in which it is located.
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5.4.2 Assumptions
▸
Claims reserves and claims settlement
The portfolios on the Group’s books must be structured in such a way that the data available is sufficiently homogeneous to
enable the use of certain analytical actuarial processes to determine the claims reserves required. One of the assumptions
made is that extrapolation of the typical claims settlement pattern of recent years is meaningful. Only cases such as extreme
anomalies in settlement behaviour require additional assumptions to be made on a case-by-case basis.
Claims handling costs
The ratio of the average claims handling costs incurred in recent years to the payouts made in the same period is used to
calculate the level of claims handling reserves to be recognised based on current claims reserves.
Annuities
The factors on which annuity calculations are based (mortality tables, interest rates, etc.) are normally specified or approved
by the authorities in each country. However, because certain parameters can change relatively quickly, the adequacy of these
annuity reserves is reviewed every year (by conducting a liability adequacy test or LAT) and, if there is a shortfall, the reserves
are strengthened accordingly.
▸
▸
5.4.3 Changes to assumptions
The assumptions on which claims reserves are based generally remain constant, but the factors on which annuity calculations
are based are adjusted from time to time over the years, particularly with regard to the latest longevity data.
5.4.4 Sensitivity analysis
As well as the natural volatility inherent in insurance business, there are parameters for determining technical reserves that can
significantly impact on the annual earnings and equity of an insurance company. In the non-life sector, sensitivity analysis has
been used to investigate the effect on consolidated annual earnings and consolidated equity exerted by errors in estimating claims
reserves – including claims incurred but not reported (IBNR) – and reserves for run-off business.
At the end of 2020, the Baloise Group’s total reserves calculated using actuarial methods or recognised separately for
special claims (including large claims but not run-off or actuarial reserves for annuities) amounted to CHF 4,600.6 million (2019:
CHF 4,392.4 million). A variation of 10 per cent in either direction in the requirement for these reserves would result in a rise
or fall of around CHF 356.9 million (2019: CHF 341.8 million) in claims payments (after taxes) before reinsurance.
Baloise’s run-off portfolio consisted of two subportfolios: an older portfolio with reserves, the majority of which comprise
obligations that the Baloise Group entered into up to the start of the 1990s in the London market, and a portfolio formed in 2018
for the hospital liability business in Germany. The sensitivities of the two portfolios are analysed separately.
The “London market” portfolio is mainly affected by liability claims relating to asbestos and environmental damage. Because
of the long settlement period, there is a high degree of uncertainty associated with the calculation of these claims reserves. Both
the timing at which cases of this type are identified and their potential loss level are much less certain than any other established
claims patterns. Some reserves were calculated using external actuaries’ reports in which best-case and worst-case scenarios
were analysed. The Baloise Group’s minimum reserves policy is based on the average of these two scenarios. It is particularly
difficult to assess the level of reserves required for IBNR claims, so further fluctuations cannot be ruled out. According to expert
estimates, fluctuations of around 10 per cent can be expected, which is equivalent to around CHF 2.7 million after taxes and before
reinsurance (2019: CHF 3.0 million) for this reserve.
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The hospital liability business in Germany was discontinued in 2018 and transferred to the Group’s run-off portfolio. In the
calculation of claims reserves for this portfolio, Baloise is guided by the relevant study from 2017 published by the German
Insurance Association (GDV) because it has insufficient claims data of its own. The current gross claims reserves (excluding
actuarial reserves for annuities) amount to CHF 263.0 million (2019: CHF 278.1 million). The constantly changing level of claims
in this sector makes it extremely difficult to estimate the total expense. However, assuming variation of 10 per cent (as used for
the other part of the run-off), the effect would be around CHF 18.2 million after taxes and before reinsurance (2019: CHF 19.3
million).
5.4.5 Claims settlement
Analysis of gross claims settlement (before reinsurance) broken down by strategic business unit
The proportion reinsured was low and would not affect the information given in the claims settlement tables below.
ESTIMATED CUMULATIVE CLAIMS INCURRED IN SWITZERLAND
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total
Year in which the claims occurred
777.9
732.2
768.5
733.6
707.8
704.8
729.5
759.4
761.7
861.4
CHF million
At the end of the year
in which the claims
occurred
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Estimated claims
incurred
736.5
731.0
729.1
722.7
717.3
701.6
701.2
692.0
679.7
679.7
751.1
736.9
726.3
717.0
710.5
705.9
698.2
685.1
–
768.2
764.1
764.7
756.3
752.1
752.3
743.8
–
–
715.7
701.2
695.9
688.5
681.2
678.4
–
–
–
667.8
657.6
650.9
646.0
643.9
–
–
–
–
689.5
675.0
673.0
669.1
–
–
–
–
–
728.9
707.4
708.2
–
–
–
–
–
–
762.6
754.0
–
–
–
–
–
–
–
761.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
685.1
743.8
678.4
643.9
669.1
708.2
754.0
761.7
861.4
7,185.3
–
–
–
–
–
–
–
–
–
–
Claims paid
– 638.9
– 645.5
– 688.9
– 622.6
– 586.5
– 616.0
– 641.7
– 668.2
– 645.0
– 496.6 – 6,249.9
Gross claims reserves
40.8
39.6
54.9
55.8
57.4
53.1
66.5
85.8
116.7
364.8
Gross claims reserves
prior to 2011 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life, including
IBNR)
Reinsurers’ share
Net claims reserves
178
935.4
400.1
714.3
– 92.5
1,957.3
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
To provide greater clarity (no currency effects), the following analysis of claims trends is shown in euros.
ESTIMATED CUMULATIVE CLAIMS INCURRED IN GERMANY
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total
Year in which the claims occurred
290.8
297.4
367.7
306.0
303.2
318.6
340.5
345.5
325.1
336.0
EUR million
At the end of the year
in which the claims
occurred
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Estimated claims
incurred
297.6
300.9
306.6
309.8
311.7
311.3
310.1
309.8
308.8
308.8
298.4
302.5
304.3
302.6
303.2
302.9
302.6
302.2
–
370.3
371.0
379.3
379.8
380.8
377.9
376.3
–
–
316.1
319.9
320.4
314.5
313.3
311.8
–
–
–
304.9
304.5
301.4
301.8
301.8
–
–
–
–
314.3
313.6
307.4
305.4
–
–
–
–
–
331.2
327.8
322.4
–
–
–
–
–
–
335.7
332.6
–
–
–
–
–
–
–
325.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
302.2
376.3
311.8
301.8
305.4
322.4
332.6
325.7
336.0
3,223.0
–
–
–
–
–
–
–
–
–
–
Claims paid
– 302.6
– 294.9
– 367.7
– 298.8
– 287.1
– 289.3
– 296.1
– 290.8
– 258.8
– 152.8 – 2,838.9
Gross claims reserves
6.2
7.3
8.6
13.0
14.7
16.1
26.3
41.8
66.9
183.2
Gross claims reserves
prior to 2011 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life, including
IBNR)
Reinsurers’ share
Net claims reserves
384.1
242.2
136.5
– 153.9
608.8
179
–
–
–
–
–
–
–
–
–
–
EUR million
At the end of the year
in which the claims
occurred
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
ESTIMATED CUMULATIVE CLAIMS INCURRED IN BELGIUM
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total
Year in which the claims occurred
308.7
1 412.4
2 403.6
483.7
459.9
470.3
446.8
495.0
3 643.8
4 682.3
1 395.1
2 426.5
2 392.2
387.9
392.5
388.6
387.1
374.4
421.9
412.9
410.7
416.9
417.5
402.5
398.0
396.7
394.4
388.2
3 486.4
4 499.8
3 395.2
4 493.3
494.3
488.7
483.4
479.1
–
–
–
476.0
480.7
478.9
–
–
–
–
3 493.3
4 526.6
3 491.9
4 511.4
–
–
–
–
–
–
–
–
–
–
–
Eight years later
3 384.7
4 444.4
Nine years later
4 395.2
–
–
–
3 431.5
4 404.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
478.9
470.5
483.9
3 580.8
4 684.0
3 527.2
4 592.3
Estimated claims
incurred
395.2
444.4
404.1
493.3
499.8
511.4
526.6
592.3
684.0
682.3
5,233.5
Claims paid
– 345.1
– 376.0
– 362.8
– 442.3
– 405.1
– 420.5
– 412.3
– 444.5
– 495.4
– 319.4 – 4,023.5
Gross claims reserves
50.1
68.4
41.3
51.0
94.7
90.9
114.3
147.8
188.6
362.9
1,210.0
Gross claims reserves
prior to 2011 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life,
including IBNR)
Reinsurers’ share
Net claims reserves
1 The increase in the total estimated claims incurred is primarily due to the addition of Avéro Schadevezekering Benelux NV.
2 The increase in the total estimated claims incurred is primarily due to the addition of Nateus NV and Audi NV.
3 The increase in the total estimated claims incurred is primarily due to the addition of Fidea NV.
4 The increase in the total estimated claims incurred is primarily due to the addition of Athora.
530.3
267.1
– 476.2
1,531.2
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Financial Report
Notes to the consolidated annual financial statements
ESTIMATED CUMULATIVE CLAIMS INCURRED IN LUXEMBOURG
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total
Year in which the claims occurred
EUR million
At the end of the year
in which the claims
occurred
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Estimated claims
incurred
Claims paid
23.6
24.0
23.6
1 36.8
2 43.8
49.8
49.6
50.3
50.3
42.0
22.7
22.6
1 35.3
2 39.7
39.2
39.8
39.7
39.7
39.6
39.6
24.5
1 36.5
2 39.9
39.3
39.9
40.1
40.1
39.9
–
39.9
1 37.8
2 41.2
40.5
40.7
40.6
40.4
40.0
–
–
2 40.8
40.5
40.8
40.5
40.2
39.7
–
–
–
44.0
44.3
43.9
43.4
43.2
–
–
–
–
47.2
46.3
45.8
45.4
–
–
–
–
–
46.3
46.0
45.2
–
–
–
–
–
–
50.6
50.1
–
–
–
–
–
–
–
49.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
40.0
39.7
43.2
45.4
45.2
50.1
49.9
42.0
435.0
–
–
–
–
–
–
–
–
–
–
– 39.4
– 39.7
– 39.9
– 39.4
– 42.5
– 44.5
– 44.1
– 48.2
– 45.9
– 29.1
– 412.7
Gross claims reserves
0.2
0.2
0.1
0.3
0.7
0.9
1.1
1.9
4.0
12.9
Gross claims reserves
prior to 2011 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life,
including IBNR)
Reinsurers’ share
Net claims reserves
22.3
69.0
–
– 56.0
35.3
1 The increase in the total estimated claims incurred is primarily due to the addition of P & V Assurances.
2 The increase in the total estimated claims incurred is primarily due to the addition of HDI Gerling Assurances S.A.
Analysis of claims settlement for the “Group business” segment
A proportion of the reserves relating to this segment is attributable to run-off business. Due to the special nature of this business,
it is difficult to conduct meaningful analysis on the basis of our own claims data alone, so the reserves recognised for it are subject
to significant uncertainty. In 2019, the part of the run-off that predominantly consisted of business in the London market was
transferred under a 100 per cent reinsurance arrangement.
The survival ratio – the ratio of reserves to the average claims paid in the past three years – is a commonly used measure for
comparing the adequacy of reserves for asbestos and environmental claims. The ratio shows the number of years for which the
reserves will cover claims payments. At the end of the year under review the gross survival ratio was 37.8 years (2019: 58.4 years).
181
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Life
5.5
5.5.1 Actuarial risk
Traditional life insurance is called fixed-sum insurance because payments are not made for losses. Instead, a fixed sum is paid
on occurrence of an insured event, which can be survival or death. In the case of term insurance, capital and / or pension benefits
are insured against premature death (whole-life insurance) or disability (disability insurance), while capital redemption insurance
focuses on savings for old age. Endowment life insurance combines risk protection with savings.
AVERAGE TECHNICAL INTEREST RATE
31.12.2019
CHF million
Switzerland
individual life
Switzerland
group life
Germany
Belgium
Luxembourg
Technical reserves without guaranteed returns
Technical reserves with 0 % guaranteed returns
Technical reserves with guaranteed positive returns
Average technical interest rate of guaranteed positive returns
827.4
492.5
2,726.6
598.2
6,392.8
16,157.4
2.4 %
1.3 %
3,812.8
122.1
6,143.5
3.0 %
195.5
138.6
3,319.3
3.1 %
323.0
17.4
523.3
2.2 %
31.12.2020
CHF million
Switzerland
individual life
Switzerland
group life
Germany
Belgium
Luxembourg
Technical reserves without guaranteed returns
Technical reserves with 0 % guaranteed returns
Technical reserves with guaranteed positive returns
Average technical interest rate of guaranteed positive returns
865.8
507.0
2,981.0
566.7
6,172.5
15,964.1
2.4 %
1.3 %
3,830.6
126.8
6,176.0
2.9 %
73.5
129.9
3,386.1
3.0 %
385.3
20.7
546.7
2.0 %
The guaranteed technical interest rate is one of the risks inherent in traditional life insurance and group life business.
If interest rates rise, there is the risk that more policies will be cancelled, and the payment of surrender values could cause
liquidity problems. This risk can be reduced by imposing surrender charges. In the past, no significant correlation has been
observed between rises in interest rates and the number of major policies cancelled.
When interest rates fall, there is the risk that investment income may no longer be sufficient to fund the technical interest rate.
This risk can be mitigated by means of asset and liability management (ALM) and, in some cases, by adjusting policyholders’ dividends.
Unit-linked life insurance generally involves endowment life insurance or a deferred annuity in which the policyholder has
more flexibility regarding the investment process. During the deferment period, unit-linked annuities behave in a similar way to
endowment life insurance, but during the payout period the policy converts into a traditional annuity.
If the policyholder dies, the beneficiary receives the sum insured or the fund assets, if the latter exceed the sum insured.
A risk premium is periodically charged to the fund to finance the death benefit cover if there is capital at risk (i. e. the positive
difference between the sum insured and the fund assets).
Depending on the product, the fund underlying the savings process is selected from a range of funds that match the policy-
holder’s investment profile. The policyholder usually bears the entire investment risk and may benefit from a positive return.
182
Baloise Group Annual Report 2020
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Notes to the consolidated annual financial statements
Neither the cash surrender value nor the maturity value of unit-linked life insurance is guaranteed, but the maturity value is partly
secured by the choice of fund. The funds are typically those with the type of investment strategy (e. g. the proportion of equities
falls if share prices fall) that guarantees the maturity value for a specific policy term. This type of business is offered in Switzerland
and Germany. The guaranteed maturity value of these specific life insurance policies may differ somewhat from the fund value
because of the way the policies are structured. This risk has been factored into actuarial calculations.
In Switzerland, there is a closed sub-portfolio with a guaranteed interest rate. The guarantee was issued as part of the statutory
pension scheme (Pillar 3a). On the endowment date, the policyholder receives the value of the fund units or the net investment
premium plus accrued interest at the technical interest rate (3.25 per cent), whichever is the greater. The funds approved for these
policies have a low equity ratio and are therefore not exposed to high volatility. A corresponding actuarial reserve has been
recognised for the guarantee.
Some closed-end funds in Belgium and Switzerland also offer a guaranteed maturity value. The funds are managed and the
guarantees are provided by banks outside the Baloise Group. In Switzerland there is also a closed-end Baloise fund with a guaranteed
maturity value which is hedged via investments in bonds issued by banks outside the Group.
The Baloise Group has a number of variable annuities products including unit-linked and, in some cases, guaranteed whole-life
annuities in its units in Switzerland and in Luxembourg / Liechtenstein. Financial hedges are provided using external reinsurance.
as at 31.12.
CHF million
Actuarial reserves
from unit-linked
life insurance contracts
Switzerland
Germany
Belgium
Luxembourg
2019
2020
2019
2020
2019
2020
2019
2020
791.3
835.9
2,160.4
2,165.1
29.8
35.8
315.9
376.5
The major risks accruing from term insurance include epidemics and terrorist attacks but also changes in lifestyle such as lack of
exercise. Endowment policies incur significant risks arising from the increase in life expectancy, which is likely to continue due
to medical advances and rising living standards.
The risks listed above do not vary greatly within this area of activity.
Our group life business in Switzerland and Belgium focuses on the provision of occupational pensions which, like individual life
insurance, covers the risks of death, disability and survival. The distinctive feature of group life business is the influence of
political decisions. In Switzerland, the government sets the minimum rate of interest to be paid on savings, and the conversion
rate at which accumulated capital is converted into an annuity to provide a pension. However, these regulations only apply to the
minimum portion of accumulated capital that is required to provide initial finance for an annuity. For the remaining portion,
actuarially appropriate annuity conversion rates are used but any change to the minimum interest rate would also affect the
existing statutory portfolio, not just new business, which would normally be the case for individual life business. The technical
interest rate for Belgian group life business – unlike individual life business – is also set by the government. However, it is the
companies – and not their insurers – that are obliged to guarantee this technical interest rate. Occasionally, Baloise Insurance in
Belgium offers group life insurance policies with interest rates that are lower than the rate stipulated by the government.
183
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Disability insurance relates to policy riders, i. e. premiums being waived if holders of life insurance policies that require periodic
payments of premiums become disabled, and to separate disability insurance. Measured against total actuarial reserves,
disability risk represents around 5 per cent of our business.
Traditional insurance
Longevity risk
Mortality risk
Disability risk
BVG retirement assets
Sub-total
Unit-linked
Longevity risk
Mortality risk
Sub-total
Total
Actuarial reserves
31.12.2019
Actuarial reserves
31.12.2020
CHF
million
Share (%)
CHF
million
Share (%)
11,911.5
9,137.6
1,706.7
11,497.8
34,253.7
1,839.1
1,495.1
3,334.1
31.7
24.3
4.5
30.6
91.1
4.9
4.0
8.9
12,370.8
8,916.6
1,701.5
11,103.9
34,092.8
1,866.3
1,554.7
3,421.0
33.0
23.8
4.5
29.6
90.9
5.0
4.1
9.1
37,587.9
100.0
37,513.8
100.0
Actuarial reserves were allocated to the categories above by product, i. e. each product was assigned a risk category and actuarial
reserves were not split into different risks within one product. Allocation to a category was generally determined by the mortality
table used in each case.
5.5.2 Assumptions
Actuarial reserves are calculated in accordance with the factors that applied on the date a policy was signed. When setting rates
for life insurance products, safety margins are built into these factors to anticipate any adverse trends in the future, principally
with regard to technical interest rates and mortality tables. These built-in safety margins, combined with counter-selection effects,
explain why annuity tables differ from mortality tables. Cancellations are not factored in when recognising reserves.
The principles applied are reviewed on an ongoing basis by conducting liability adequacy tests (LATs) which ensure that
sufficient reserves have been set aside. The underlying assumptions for conducting these tests are best estimates. The two main
assumptions for these tests are expected future investment income and mortality rates. Expected future investment income is
calculated using the current investment portfolio and the target investment portfolio (strategic asset allocation). The returns on
new money invested are based on capital-market interest rates. Depending on the size of the portfolio, mortality rates are based
on publicly available tables adjusted to reflect our own experience or on mortality tables produced inhouse.
Cancellations are factored into LATs using assumptions based on the experience of our companies. Changes in assumptions
regarding cancellations usually have a negligible impact on LATs.
184
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
5.5.3 Sensitivities
Sensitivity analysis shows the consequences of realistic changes in risk parameters to which the Baloise Group is exposed at the
balance sheet date. These consequences impact on its consolidated equity and its profit for the period. When sensitivities were
investigated, only the assumption being tested was varied. The other parameters were kept constant. One exception to this rule
was policyholders’ dividends, which were adjusted accordingly. In general, sensitivities do not behave in a linear fashion, so it is
not possible to extrapolate from them because they relate to a specific balance sheet date. To identify sensitivities, we investigated
the effect of changes in assumptions on profit for the period and on equity, after shadow accounting, deferred gains / losses and
deferred taxes (excluding reinsurance effects which were immaterial) had been taken into account. The assumptions on which
liability adequacy testing is based were changed for each calculation.
▸
▸
▸
▸
▸
▸
▸
The following scenarios were run:
10 per cent increase in mortality
10 per cent fall in mortality (i. e. increase in longevity)
50 basis-point increase in receipts of new money
50 basis-point fall in receipts of new money
10 per cent increase in mortality
A mortality increase of 10 per cent had only a marginal effect in Germany, Belgium, Luxembourg and Liechtenstein. This was
true of the impact on both the income statement and on equity. In the Swiss life insurance business, an increase in mortality
caused a lower amount to be allocated to strengthen annuity reserves. This effect improved profitability by around CHF
40 million (2019: CHF 40 million). the effect on equity in Switzerland was minor.
10 per cent fall in mortality
Similar to the aforementioned scenario of an increase in mortality, the effects of a reduction in mortality were marginal for the
life insurance companies in Germany, Belgium, Luxembourg and Liechtenstein. This was true of the impact on both the income
statement and on equity. A reduction in mortality in the Swiss life insurance business – with policyholders’ dividends adjusted
accordingly – had a negative impact of approximately CHF 80 million (2019: CHF 88 million) on the income statement. In line
with the aforementioned scenario of an increase in mortality, the effect on equity in Switzerland was minor.
50 basis-point increase in receipts of new money
This scenario was based on the assumption that receipts of new money (including amounts reinvested) rose by 50 basis
points. In Germany, this scenario resulted in changes in DAC write-downs, changes in the financing of final policyholders’
dividends and the reduction of the provision for impending losses. Overall, there was a positive effect of CHF 3 million on the
income statement in Germany (2019: CHF 5 million). The negative effect recognised directly in equity amounted to approximately
CHF 5 million (2019: CHF 5 million). In Belgium, this scenario resulted in an increase in DACs and to lower amounts being
allocated to the provision recognised for impending losses, which had a positive effect of roughly CHF 35 million on the
income statement (2019: CHF 1 million). The negative effect on unrealised gains amounted to CHF 196 million (2019:
CHF 134 million). In Luxembourg, this scenario produced a marginally positive effect on the income statement and a negative
effect of roughly CHF 20 million on the unrealised gains and losses recognised in equity (2019: CHF 18 million). The result-
ant effect on the profitability and equity of Baloise Life (Liechtenstein) AG was negligible. In Switzerland, this scenario resulted
in a reversal of DAC write-downs and a reduction in technical provisions, which had an overall positive effect of CHF 30 million
on the income statement (2019: CHF 24 million). The negative effect recognised directly in equity amounted to approximately
CHF 196 million (2019: CHF 214 million).
185
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
▸
50 basis-point fall in receipts of new money
This scenario was based on the assumption that receipts of new money (including amounts reinvested) fell by 50 basis
points. In Germany, this scenario resulted in changes in DAC write-downs, changes in the financing of final policyholders’
dividends and an increase in the provision for impending losses. Overall, there was a negative effect of around CHF 6 million
on the income statement in Germany (2019: CHF 6 million). The positive effect recognised directly in equity amounted to CHF
5 million (2019: CHF 5 million). In Belgium, this scenario resulted in additional DAC write-downs and a larger provision for
impending losses. The negative effect on the income statement therefore rose to CHF 98 million (2019: CHF 27 million). The
positive effect on unrealised gains amounted to CHF 238 million (2019: CHF 155 million). In Luxembourg, this scenario
produced a marginally negative effect on the income statement (2019: marginally negative effect) and a positive effect
of roughly CHF 23 million on the unrealised gains and losses recognised in equity (2019: CHF 20 million). At Baloise Life
(Liechtenstein) AG, the increase in provisions had a marginally negative effect on the income statement (2019: CHF 3 million).
The resulting effect on equity was negligible. In Switzerland, this scenario resulted in higher DAC write-downs and an increase
in technical provisions. The overall negative effect was CHF 29 million (2019: CHF 34 million). The positive effect recognised
directly in equity amounted to approximately CHF 195 million (2019: CHF 220 million).
5.5.4 Changes to assumptions
Expected future investment income is constantly adjusted in line with market circumstances. It has fallen across all units. Other
assumptions, such as cancellation rates and mortality rates, are updated on an ongoing basis.
186
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
5.6 Management of market risk
Market risk is reflected by losses that arise from changes or fluctuations in market prices that may result in impairment of the
value of assets held. The degree of risk depends on the extent to which market prices fluctuate and on the level of exposure.
As part of their life insurance business, the companies in the Baloise Group also provide investment-linked life insurance
contracts for the account of and at the risk of policyholders. The financial liabilities generated in this connection are backed by
assets – generally investment fund units – arising from these policies. Because the market risk attaching to the assets underlying
these contracts is borne by the policyholder, they are shown separately in the notes to the consolidated annual financial statements.
The following sections specifically address the interest rate risk, currency risk, credit risk, liquidity risk and equity price risk
that are relevant to assets held by the Group.
Interest rate risk
5.6.1
Interest rate risk is the risk that a company’s interest margin, and therefore its income, may be reduced by fluctuations in money- market
and capital-market interest rates (income effect), or that the fair value of a portfolio of interest-rate-sensitive products may decline
(asset-price effect). As well as the financial risk generated by holding assets and liabilities with non-matching maturities, variations
in accounting policy may result in accounting risk.
Consequently, the impact of a movement in interest rates or in the interest rate curve may be a significant deterioration in
terms and conditions if funding has to be rolled over. Benchmark-based maturity management is practised in the non-life units,
while maturity management in the life units is driven by the structure of the obligations.
Under the Group-wide risk management standards of the Baloise Group, interest rate risk is managed through investment
planning and appropriate asset liability management with due regard to the available risk-bearing capacity.
Additional stress tests are also designed and run for this purpose. They act as an early-warning system and their impact can
be simulated for all areas of the Group and their performance.
The effect of stress-testing key financial figures is measured on a monthly basis. The underlying stress scenario (potential
loss arising from a risk) is reviewed regularly and modified as necessary.
The life insurance companies in the Baloise Group manage their risk associated with changes in interest rates directly, by means
of appropriate strategic asset allocation. Specific factors such as risk-bearing capacity and the ability to fund guarantees are taken
into account when allocating assets. The decision-making process also incorporates the asset managers’ expectations regarding
the development of capital markets and customers’ expectations regarding life insurance.
The Baloise Group’s Chief Investment Officer (CIO) reviews strategic asset allocation with each business unit twice a year and
when the need arises.
The bank also use an appropriate asset and liability management system to monitor and manage interest rate risk. Interest
rate risk is incurred only in proportion to business volume and business activities. Interest rate risk is measured using software
based on gap, duration and interest rate sensitivity methods. The asset and liability mismatch at Baloise Bank SoBa is also actively
managed by the use of appropriate interest rate derivatives.
187
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
If all interest rates had fallen by 50 basis points on the balance sheet date but all other variables had remained constant, the profit
for the period (after deferred gains / losses and deferred taxes) would have been lower by CHF 134 million (2019: CHF 70 million).
Including the impact on profit for the period, equity (after shadow accounting, deferred gains / losses and deferred taxes) would
have risen by CHF 241 million (2019: CHF 238 million). If all interest rates had risen by 50 basis points on the balance sheet date
but all other variables had remained constant, the profit for the period (after deferred gains / losses and deferred taxes) would
have been higher by CHF 68 million (2019: CHF 32 million). Including the impact on profit for the period, equity (after shadow
accounting, deferred gains / losses and deferred taxes) would have fallen by CHF 293 million (2019: CHF 271 million).
5.6.2 Currency risk
Currency risk describes the potential financial loss generated by changes in the exchange rates between currencies. The extent
of the effective currency risk depends on:
▸
▸
▸
net foreign exchange exposure, i. e. the net position between assets and liabilities denominated in foreign currencies,
the volatility of the currencies involved and
the correlation of currencies with other risk parameters in a portfolio.
Because the Baloise Group invests in foreign currency bonds (particularly those denominated in euros and US dollars) for invest-
ment or diversification purposes, there may be currency effects in the income statement for both realised and unrealised positions.
To ensure compliance with the risk budget set for currency effects recognised in the income statement, the foreign exchange
management team first calculates adequate target hedge ratios, then implements the necessary hedging strategies taking into
account these target hedge ratios and the discretionary ranges allowed. It also takes advantage of phases when exchange rates
are overreacting by deliberately underweighting or overweighting the hedge ratios in relation to the defined benchmark. These
hedging strategies are implemented using forward FX contracts and FX options or combinations of options in which the selection
of the instruments to be used in each case depends on factors such as volatility and expected exchange rate movements.
The currency effect of foreign currency bonds or insurance-related foreign currency liabilities and changes in the fair value of
derivative financial instruments held for hedging purposes are always recognised in the income statement.
The Group-wide Risk Management Standards require currency risk and the effectiveness of the currency derivatives transacted
to be monitored on a continuous basis. The currency risk incurred must be proportionate to the potential superior return generated
by the diversification effect achieved in the portfolio.
The Swiss franc and the euro are used almost exclusively for the Baloise Group’s insurance activities, with the result that
technical reserves are also mainly in these currencies. There are also small technical liabilities in US dollars. These reserves are
generally covered by investments in the same currencies (natural hedges).
Assuming that all other variables remain constant, fluctuations between transactional currencies and the functional currency
in financial balance sheet items (after deferred gains / losses and deferred taxes) in the amount of + / – CHF 0.01 (1 centime) would
have resulted in a change of + / – CHF 3.8 million (2019: + / – CHF 3.0 million) in the profit for the period; a positive (+) change of
CHF 0.01 would have generated a currency gain and a negative (–) change of CHF 0.01 would have generated a currency loss.
188
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Derivative financial instruments used as currency hedges of a net investment in a foreign operation
The Group’s own companies, Baloise Private Equity (Luxembourg) SCS and Baloise Alternative Invest S.A. SICAV-RAIF, manage
the substantial investments in alternative financial assets such as private equity and senior secured loans.
The Baloise Group’s FX managers enter into currency hedging transactions in the form of forward contracts to limit the currency
risk exposure of its net investment in these foreign entities whose reporting currency is the US dollar. The limitation to forward
exchange transactions in the implementation of hedging strategies makes it easier to document the hedging efficiency and
apply hedge accounting (for investments of Swiss entities).
as at 31.12.
CHF million
Forward contracts
Swaps
OTC options
Other
Traded options
Traded futures
Total
CHF million
Amount recognised directly in equity
Hedge ineffectiveness reclassified to the income statement
Fair value assets
Fair value liabilities
2019
2020
2019
2020
31.7
23.8
5.3
0.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31.7
23.8
5.3
0.3
2019
2020
35.3
–
122.3
–
Because equity investments are actively managed, additions to and deductions from equity are carried out on a regular basis
during the year. Consequently, the year-on-year effects underlying hedge accounting and the recognition of cash flows in profit or
loss are recognised on a pro-rata basis.
For international diversification (risk-spreading) and because there is greater liquidity in certain foreign financial markets, as
at 31 December 2020 the Group’s Swiss companies did hold a net position in euros equivalent to CHF 1,154.2 million (2019: CHF
464.8 million) and a net position in US dollars equivalent to CHF – 1,243.3 million (2019: CHF – 1,829.5 million) of monetary finan-
cial instruments according to IFRS 7.B23 (excluding financial instruments with characteristics of equity). The remaining foreign
exchange positions, both assets and liabilities, were negligible.
Over the course of 2020, the total aggregate hedge ratio of the net foreign currency exposure determined for hedging purposes
broadly moved within a range of 96–100 per cent for US dollars and 94–100 per cent for euros.
The foreign entities in the Baloise Group had not a significant foreign currency exposure.
189
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
5.6.3 Credit risk
Credit risk relating to assets held by insurance companies refers to the total potential downside risk arising from a deterioration
in the credit quality of a borrower or issuer, or from impairment in the value of collateral. Credit risk is managed by monitoring the
credit quality of each individual counterparty and relying heavily on credit ratings.
The maximum default risk of financial assets is equivalent to their carrying amount. The Baloise Group tracks counterparty
exposures at all times and monitors default risk – broken down by country, sector and issuer – on a Group-wide basis.
Because the credit risk incurred by the Baloise Group is spread across sectors and geographic regions and among a large
number of counterparties and customers, the Baloise Group is not exposed to material credit risk arising from a single counterparty
or a specific sector or geographic region.
In order to restrict the credit / accumulation risk in the Baloise Group, the proportion that may be invested by Group companies
in a single issuer or borrower is strictly limited in the Group-wide Risk Management Standards. The relevant rules are explicitly
defined in the Group investment policy. In addition, there are guarantees and collateral for the benefit of third parties, which are
described in chapter 40.1.2.
As a rule, investments in interest-bearing securities or loans need to have an investment-grade issue rating or be backed by
a corresponding third-party guarantee or by a mortgage. A total limit of 18 per cent of all interest-bearing securities and loans
(excluding mortgage loans) per legal entity is set for investments with a rating of ‘BBB+’ or lower and investments with no rating.
Active investment in sub-investment-grade assets is permitted within this allowance. However, such investments are subject to
an additional cap of 3 per cent per legal entity. If any financial instrument in the portfolio becomes sub-investment grade due to
a ratings downgrade, it must be sold within twelve months. Approval is required for any exceptions. Financial derivatives are only
permitted to be transacted with issuers holding a rating of at least “A –” or with whom there is a special collateral agreement.
Please refer to the table of secured financial instruments with characteristics of liabilities in chapter 11.
FINANCIAL ASSETS EXCEEDING 10 % OF CONSOLIDATED EQUIT Y
CHF million
Swiss Confederation
Kingdom of Belgium
Republic of France
Federal Republic of Germany
Pfandbriefbank schweizerischer Hypothekarinstitute AG
Pfandbriefzentrale der schweizerischen Kantonalbanken AG
Kingdom of the Netherlands
Canton of Zurich
Kingdom of Spain
190
31.12.2019
4,078.2
2,902.9
1,981.7
1,980.6
1,642.9
1,065.8
965.7
714.9
695.5
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS EXCEEDING 10 % OF CONSOLIDATED EQUIT Y
CHF million
Swiss Confederation
Kingdom of Belgium
Federal Republic of Germany
Republic of France
Pfandbriefbank schweizerischer Hypothekarinstitute AG
Pfandbriefzentrale der schweizerischen Kantonalbanken AG
Kingdom of the Netherlands
Kingdom of Spain
Republic of Ireland
31.12.2020
4,332.0
3,067.4
1,916.2
1,880.4
1,533.9
992.7
849.9
837.3
725.3
The management and control of credit risk arising from mortgage business are set out in instructions and written procedures in
which mandatory lending regulations are specified. These lending regulations lay down strict procedures for the immediate
identification, accurate assessment, proper authorisation and continuous monitoring of credit risk. Standard credit documentation
is used to record and review loan applications, which are all logged and managed centrally. The relevant credit documentation
reflects or incorporates all evaluation criteria and policies.
Because a running total of mortgage transactions is kept, it is possible to monitor compliance with credit policy, and corrective
action can be taken if necessary. All mortgages are also managed by periodically auditing exposure, including records of overdue
interest. Procedures and audit intervals are set out in a separate directive. Senior management regularly receive detailed risk
reports on the composition of the mortgage portfolio and risk trends.
Policies, directives and authorisation levels set out the terms and conditions for granting mortgages, which consist of the
amount, the credit quality of the counterparty, collateral and the term of the transaction as well as the specialist qualifications of
the mortgage expert.
There are special instructions for valuing collateral and calculating loan-to-value ratios. The purpose of these provisions is to
ensure that a standard procedure is used to determine the applicable value of collateral when assessing mortgages. The calculation
of fair value and the loan-to-value ratio of real estate is of key importance, particularly with regard to mortgage business. One of the
objectives of the active management of mortgages is the early identification of potential downside risk.
The mortgage portfolio comprises loans to individuals and to legal entities. The type and degree of risk that may be incurred,
together with collateralisation and quality requirements, are set out in directives and authorisation levels. To mitigate risk,
the portfolio is as geographically diverse as possible.
191
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
CREDIT RATINGS OF FINANCIAL ASSETS THAT WERE NEITHER OVERDUE NOR IMPAIRED
Promissory notes and registered bonds
1,928.4
2,076.9
AAA
AA
A
Lower than BBB
or no rating
BBB
Total
6,725.1
170.6
5,140.7
–
102.6
–
9,328.1
719.0
574.3
10.0
1,910.6
2,614.3
1,254.1
–
918.0
8,961.6
–
–
–
–
4.2
117.2
–
–
–
–
1.7
115.8
58.8
–
–
21.9
53.0
–
270.1
7.9
3.5
16.3
91.6
–
43.4
–
–
–
109.3
115.5
–
202.6
15.1
3.3
83.0
36.8
1,359.8
1,766.5
589.8
–
867.7
–
100.8
–
–
–
20.7
41.1
–
13.6
0.0
0.3
14.2
26.3
38.4
277.8
19,601.4
1,810.8
336.2
–
87.5
137.1
158.2
994.7
27.8
–
59.5
142.8
–
75.2
27.0
321.2
163.0
89.0
201.9
7,081.1
7,895.1
10.0
10,937.5
137.1
4,307.8
1,053.5
27.8
–
215.6
469.7
–
561.5
50.1
328.3
278.2
359.6
2,412.6
1,055.5
281.8
835.0
15,361.8
14,431.4
16,184.6
4,839.3
4,909.9
55,726.9
as at 31.12.2019
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Policy loans
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Derivative financial instruments
Receivables from financial contracts
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Other receivables
Receivables from investments
Cash and cash equivalents
Total
192
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
CREDIT RATINGS OF FINANCIAL ASSETS THAT WERE NEITHER OVERDUE NOR IMPAIRED
as at 31.12.2020
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Policy loans
Promissory notes and registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Derivative financial instruments
Receivables from financial contracts
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Other receivables
Receivables from investments
Cash and cash equivalents
Total
AAA
AA
A
Lower than BBB
or no rating
BBB
Total
6,208.2
138.9
4,452.1
–
9,156.5
728.7
540.8
10.0
2,294.8
2,798.6
1,308.8
–
1,769.1
2,317.6
711.0
–
100.3
1,109.3
8,932.8
906.4
–
–
1,638.8
2,127.8
–
–
–
2.7
49.5
–
–
–
–
3.9
117.9
1,338.4
92.0
–
–
30.0
7.0
–
286.5
31.5
1.5
14.5
111.3
350.7
–
43.0
3.1
–
–
125.4
133.3
–
296.8
28.5
3.7
63.7
42.0
682.4
–
60.7
51.9
–
–
24.6
38.2
–
4.8
0.0
–
10.9
35.7
62.0
309.7
19,738.2
1,849.4
219.2
278.9
68.7
147.6
154.5
468.8
29.1
725.0
39.3
265.2
–
72.1
57.6
350.3
199.5
41.2
156.6
7,833.2
7,232.0
288.9
11,117.5
147.6
4,024.8
615.8
29.1
725.0
222.1
493.2
–
660.1
117.6
355.5
292.6
348.1
2,590.1
14,050.7
14,598.2
16,757.0
5,993.0
5,432.5
56,831.4
Standard & Poor’s and Moody’s ratings are generally used to assess the credit quality of securities. The lower of the two is used
for disclosure.
Because the two agencies do not cover the entire Swiss financial market, the SBI composite rating is applied as and when
necessary.
The credit quality of mortgage assets arising from Swiss insurance business is reviewed using risk management processes.
Credit ratings are assigned on this basis. Mortgage assets that show no signs of impaired credit quality receive an A rating. Those
that show signs of impaired credit quality are rated lower than BBB or are not rated at all.
In 2020, financial assets amounting to CHF 1.7 million (2019: CHF 1.7 million) and cash and cash equivalents of 0.1 million
(2019: CHF 0.1 million) from collateral received were used.
193
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS IMPAIRED
as at 31.12.
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Policy loans
Promissory notes and registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Receivables from financial contracts
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Other receivables
Receivables from investments
Total
Gross amount
Impairment
Carrying amount
Gross amount
Impairment Carrying amount
2019
2020
–
9.8
10.0
–
–
– 9.8
– 10.0
–
–
–
–
–
–
19.6
11.6
–
–
– 19.6
– 11.6
–
–
–
–
–
136.0
– 18.6
117.4
125.5
– 18.5
107.0
–
–
–
0.0
–
10.1
–
–
1.1
139.9
3.2
17.3
327.5
–
–
–
0.0
–
– 8.4
–
–
0.0
– 41.6
– 1.5
– 1.3
– 91.1
–
–
–
–
–
1.7
–
–
1.1
98.3
1.7
16.1
236.4
–
–
–
0.0
–
1.3
–
–
1.2
151.8
2.9
20.3
334.2
–
–
–
0.0
–
– 1.2
–
–
– 1.1
– 45.1
– 1.2
– 1.6
– 100.0
–
–
–
–
–
0.0
–
–
0.2
106.6
1.7
18.7
234.2
194
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS OVERDUE BUT NOT IMPAIRED
as at 31.12.2019
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Policy loans
Promissory notes and registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Receivables from financial contracts
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Other receivables
Receivables from investments
Total
< 3 months
3–6 months
7–12 months
> 12 months
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25.6
0.0
–
25.6
18.0
0.0
–
18.0
–
–
–
–
14.4
–
–
–
–
–
–
–
8.5
–
17.0
0.0
–
39.9
–
–
–
–
–
–
–
–
–
–
–
–
7.1
–
11.7
0.0
–
18.8
–
–
–
–
14.4
–
–
–
–
–
–
–
15.6
–
72.3
0.0
–
102.3
195
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS OVERDUE BUT NOT IMPAIRED
as at 31.12.2020
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Mortgages and loans
Mortgages
Policy loans
Promissory notes and registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Receivables from financial contracts
Reinsurance assets
Receivables from reinsurers
Insurance receivables
Other receivables
Receivables from investments
Total
< 3 months
3–6 months
7–12 months
> 12 months
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20.7
0.1
–
20.8
12.0
0.0
–
12.0
–
–
–
–
26.1
–
–
–
–
–
–
–
7.4
–
10.3
0.0
–
43.8
–
–
–
–
–
–
–
–
–
–
–
–
10.2
–
10.6
0.0
–
20.8
–
–
–
–
26.1
–
–
–
–
–
–
–
17.6
–
53.5
0.1
–
97.3
Liquidity risk
5.6.4
Banks as well as insurance companies incur latent liquidity risk. This refers to the risk of rapid outflows of large volumes of
liquidity that cannot be offset by asset sales or for which alternative funding cannot be implemented quickly enough. In extreme
cases, a lack of liquidity can result in insolvency. Legal provisions apply and the Group-wide Risk Management Standards require
each business unit to plan its liquidity centrally. This is carried out with the close collaboration of the investment, actuarial,
underwriting and finance departments of each business unit.
196
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Liquidity management must take account of the maturity structure of liabilities as follows:
MATURITIES OF FINANCIAL LIABILITIES 1
Liquidity risk as at 31.12.2019
‹ 1 year 2
1–3 years
4–5 years
> 5 years
Total Carrying amount
CHF million
Liabilities arising from banking business
and financial contracts
With discretionary participation features
Measured at amortised cost
Recognised at fair value through profit or loss
Financial liabilities
Derivative financial instruments (net cash flows)
Insurance liabilities
Other liabilities
Total
Guarantees and future liabilities
Guarantees
Future Liabilities
Total
MATURITIES OF FINANCIAL LIABILITIES 1
3,836.9
5,943.1
1,205.2
352.9
34.0
1,215.1
638.1
1.9
325.4
2,782.0
791.1
59.1
582.3
24.2
1.8
549.4
8,449.3
704.3
5.9
0.1
3.5
99.5
775.9
570.1
644.2
18.4
10.0
19.6
3,940.1
7,593.8
3,940.1
7,593.8
13,006.5
13,006.5
2,492.4
117.5
1,807.5
685.5
2,368.0
117.5
1,807.5
684.8
13,225.3
4,566.0
9,714.2
2,137.8
29,643.3
29,518.2
36.7
417.4
454.0
13.0
591.6
604.6
0.8
3.0
3.9
12.8
4.9
17.7
63.3
1,016.8
1,080.2
–
–
–
Liquidity risk as at 31.12.2020
‹ 1 year 2
1–3 years
4–5 years
> 5 years
Total Carrying amount
CHF million
Liabilities arising from banking business
and financial contracts
With discretionary participation features
Measured at amortised cost
Recognised at fair value through profit or loss 3
Financial liabilities
Derivative financial instruments (net cash flows)
Insurance liabilities
Other liabilities
Total
Guarantees and future liabilities
Guarantees
future liabilities
Total
3,976.0
6,318.7
1,170.4
417.3
108.1
1,252.3
547.3
2.3
422.6
–
929.0
19.8
618.5
23.8
1.4
329.2
95.0
853.6
4,074.7
7,924.2
4,074.7
7,924.2
1.6
12,112.6
13,284.6
13,284.6
369.7
746.4
8.9
0.1
3.5
15.8
9.1
16.7
2,462.4
152.6
1,879.9
591.4
2,363.3
152.6
1,879.9
591.9
13,790.1
2,016.0
714.3
13,849.4
30,369.8
30,271.1
37.3
711.5
748.8
13.8
1,050.7
1,064.5
0.7
2.8
3.5
11.0
3.6
14.6
62.7
1,768.7
1,831.3
1 Based on undiscounted contractual cash flows.
2 All demand deposits are included in the first maturity band.
3 The differentiation between maturity bands was adjusted slightly in 2020 as a result of more detailed base data.
Please refer to the tables in chapter 22 for the maturities of technical reserves.
–
–
–
197
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
In accordance with the Group-wide Risk Management Standards, asset and liability management committees have been introduced
in all strategic business units in the Baloise Group. These asset and liability management committees analyse maturity schedules
and the income generated by assets or required for liabilities.
As part of tactical and strategic investment planning, care is taken when allocating the assets held by the individual life and
non-life insurance units in the Baloise Group to ensure that sufficient liquidity is available to carry out investment activity and for
the operational settlement of all business processes. The level of liquidity required is determined on the basis of the maturity
structure of investments versus the payout schedule for insurance-related liabilities. Investment planning explicitly includes
exceptionally large incoming or outgoing payments that are known in advance. Maintenance of liquidity levels and access to
further liquidity via the repo market ensure sufficiently high reserves for payments needed at short notice, such as large claim
settlements, until such as time as the reinsurer assumes the costs.
If these precautions fail to meet the need for liquidity, the Baloise Group holds financial assets that can be sold at short notice
without significant price losses. They include all equities (excluding long-term equity investments). Because the Group holds
a substantial portfolio of government and quasi-government bonds, it is possible to sell relatively large holdings of available-for-sale
bonds even in crisis situations. Mortgages and loans are generally held to maturity; early redemption is not considered at present.
Private-equity investments have to be considered illiquid in this context, and it is not possible to sell investment property to
generate immediate liquidity.
5.6.5 Equity price risk
The Baloise Group is exposed to equity price risk because it holds financial instruments with characteristics of equity classed as
“recognised at fair value through profit or loss” and “available for sale”. Equity price risk is significantly reduced by means of
international diversification, i. e. by spreading risk across sectors, countries and currencies. Active overlay management using
derivatives also mitigates equity price risk. Most financial instruments with characteristics of equity are publicly listed.
If the market price of all financial instruments with characteristics of equity were to move by + / – 10 per cent on the balance
sheet date, the following impact would be observed – after shadow accounting, deferred gains / losses, deferred taxes, derivative
hedges and the effect of the impairment rules mentioned in section 3.10.3:
CHF million
Market price plus 10 %
Market price minus 10 %
Impact on profit for the period
Impact on equity
(including profit for the period)
2019
2020
2019
2020
28.5
– 42.0
52.9
– 71.4
252.5
– 257.5
261.0
– 265.4
Because these impairment criteria produce different effects due to assumed changes in market prices if there is a rise compared with
an analogous fall, these effects are divergent. The compensatory effects of hedging using derivatives behave in a similar manner.
Adjustments in the fair value of financial instruments with characteristics of equity that are classed as “recognised at fair
value through profit or loss” have an impact on the profit for the period. Unrealised gains and losses vary due to changes in the
fair value of financial instruments with characteristics of equity which are classed as “available for sale”. In a life insurance
company, policyholders participate in the firm’s profits, depending on their policy and local circumstances (see section 3.19.5.).
The table above takes account of this profit-sharing scheme.
198
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Fair value measurement
5.7
Where available, quoted market prices are used to determine the fair value of assets and liabilities. They are defined as available
if quoted prices can be obtained easily and frequently on an exchange, from a dealer, broker, trade association, pricing service
or regulatory authority, provided these prices are current, in sufficient volume and represent regularly occurring arm’s-length
transactions in the market.
If no quoted market prices are available (e. g. because a market is inactive), the fair value is determined using a market-based
measurement process. Market-based means that the measurement method is based on a significant quantity of observable
market data (as available).
▸
▸
▸
Fair value measurement is divided into the following three hierarchy levels:
Fair value determined by publicly quoted prices (level 1)
Fair value is based on prices in active markets on the balance sheet date and it is not adjusted or compiled in any other way.
Fair value determined by using observable market data (level 2)
Fair value is estimated using generally recognised methods (discounted cash flow, etc.). In this case, measurement incorporates
a significant quantity of observable market data (interest rates, index performance, etc.).
Fair value determined without the use of observable market data (level 3)
Fair value is estimated using generally recognised methods (discounted cash flow, etc.), although it is measured without
reference to any observable market data (or only to a very minor degree), either because this data is not available or because
it does not permit any reliable conclusions to be drawn with regard to fair value.
Detailed information about measurement principles and the measurement methods used can be found in chapters 3 and 4.
199
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Details of the methods used to measure level 2 and level 3 assets and liabilities
The table below gives an overview of the measurement methods that the Baloise Group uses to determine the fair value of balance
sheet line items classified as level 2 or level 3. The table shows the individual measurement methods, the key input factors used
for measurement purposes and – where practicable – the range within which these input factors vary.
Balance sheet line item
Measurement method
Key input factors used for
measurement purposes
Range of input factors
Level 2
Financial instruments
with characteristics of equity
Available for sale
At fair value through profit or loss
Financial instruments with characteristics of liabilities
Internal
measurement methods
Price of underlying instrument,
liquidity discount, balance sheet
and income statement figures
Net asset value
Net asset value
n.a.
n.a.
Available for sale
Present-value model
At fair value through profit or loss
Present-value model
Net asset value
Yield curve,
swap rates, default risk
Interest rate, credit spread,
market price
n.a.
Mortgages and loans
Carried at cost
At fair value through profit or loss
Derivative financial instruments
Liabilities arising from banking business
and financial contracts
At fair value through profit or loss
Level 3
Financial instruments
with characteristics of equity
Present-value model
Interest rate, credit spread
Present-value model
Black-Scholes
option pricing model
LIBOR, swap rates
Money market interest rate, volatility,
price of underlying instrument,
exchange rates
Black-76
Volatility, forward interest rate
Stochastic
present-value model
Present-value model
Investment fund prices,
interest rates, cancellation rate
LIBOR, swap rates
Net asset value
n.a.
Financial instruments with characteristics of liabilities
Present-value model
Interest rate, credit spread
–
–
–
–
–
–
–
–
–
–
n.a.
–
n.a.
Derivative financial instruments
Investment property
Multiples-based
method
DCF method
1 The lower these key input factors are, the higher the fair value of the investment property is.
2 The higher these key input factors are, the lower the fair value of the investment property is.
3 The input factor ranges shown essentially relate to the real estate portfolios held by the Baloise Group’s Swiss entities.
200
n.a.
Discount rate 1
2.35 % – 4.20 % 3
Rental income 2
270 – 290 CHF million 3
Vacancy costs 1
16 – 22 CHF million 3
Running costs 1
24 – 30 CHF million 3
Maintenance costs 1
26 – 32 CHF million 3
Capital expenditure 2
20 – 30 CHF million 3
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Determining the fair value of assets and liabilities classified as level 3
The Baloise Group organises its operating activities into strategic business units, which are generally combined under a single
management team for each region. The financial and management information needed for all relevant executive decisions is
held by these strategic business units. This organisational structure is also used to delegate authority and responsibility for
proper implementation of, and compliance with, financial reporting standards within the Baloise Group to the individual strategic
business units.
The organisation of these individual units varies in terms of how they determine the fair value of financial instruments classified
as level 3. This process essentially involves the regular discussion of measurement methods, measurement inconsistencies and
classification issues by formal or informal committees at each reporting date. Appropriate adjustments are made where necessary.
Financial instruments with characteristics of equity classed as “available for sale” or “recognised at fair value through profit
or loss” and classified as level 3 are primarily private-equity investments and alternative investments held by the Baloise Group
as well as non-controlling interests in real estate companies. The fair value of such investments is usually determined by fund
managers (external providers) based on their net asset value (NAV). These external providers generally use non-public information
to calculate the individual investments’ NAV.
Financial instruments with characteristics of liabilities that are assigned to level 3 are predominantly corporate bonds originating
from private placements and for which third-party prices are not available. A present-value model is used to measure their fair value.
The measurement of investment property classified as level 3 is carried out internally each year by experts using market-based
assumptions that have been verified by respected external consultancies. This property is also assessed by external valuation
specialists at regular intervals.
201
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FAIR VALUE OF ASSETS AND LIABILITIES
FOR OWN ACCOUNT AND AT OWN RISK
31.12.2019
CHF million
Assets measured on a recurring basis
Financial instruments with characteristics of equity
Available for sale
Recognised at fair value through profit or loss
Financial instruments with characteristics of liabilities
Held to maturity
Available for sale
Total carrying
amount
Total fair value
Level 1
Level 2
Level 3
4,351.1
4,351.1
328.3
328.3
2,493.9
283.3
388.9
45.0
7,475.5
9,120.7
9,120.7
–
27,101.5
27,101.5
25,483.1
1,618.4
1,468.4
–
–
–
–
Recognised at fair value through profit or loss
10.6
10.6
10.6
–
Mortgages and loans
Carried at cost
Recognised at fair value through profit or loss
Derivative financial instruments
Receivables from financial contracts
Carried at cost
Other receivables
Carried at cost
Receivables from investments
Carried at cost
Investment property
Liabilities measured on a recurring basis
Liabilities arising from banking business and financial contracts
Measured at amortised cost
Recognised at fair value through profit or loss
Derivative financial instruments
Financial liabilities 1
1 Excluding leasing liabilities.
15,773.9
16,649.9
1,039.1
1,039.1
469.7
469.7
–
–
279.9
281.9
–
–
6.9
–
–
375.7
375.7
8,120.1
8,120.1
280.0
–
7,593.8
7,723.4
570.1
117.5
570.1
117.5
–
–
9.2
2,325.0
2,400.4
2,400.4
10,483.8
6,166.1
1,039.1
462.7
–
–
16.4
–
7,646.6
570.1
99.9
–
–
–
–
281.9
79.2
8,120.1
76.8
–
8.4
–
202
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FAIR VALUE OF ASSETS AND LIABILITIES
FOR OWN ACCOUNT AND AT OWN RISK
31.12.2020
CHF million
Assets measured on a recurring basis
Financial instruments with characteristics of equity
Available for sale
Recognised at fair value through profit or loss
Financial instruments with characteristics of liabilities
Held to maturity
Available for sale
Total carrying
amount
Total fair value
Level 1
Level 2
Level 3
3,983.6
3,983.6
502.4
502.4
2,141.1
450.3
336.1
52.2
6,974.8
8,729.6
8,729.6
–
28,110.2
28,110.2
26,346.0
1,764.2
1,506.4
–
–
–
–
Recognised at fair value through profit or loss
7.3
7.3
7.3
–
Mortgages and loans
Carried at cost
Recognised at fair value through profit or loss
Derivative financial instruments
Receivables from financial contracts
Carried at cost
Other receivables
Carried at cost
Receivables from investments
Carried at cost
Investment property
Liabilities measured on a recurring basis
Liabilities arising from banking business and financial contracts
Measured at amortised cost
Recognised at fair value through profit or loss
Derivative financial instruments
Financial liabilities 1
1 Excluding leasing liabilities.
15,872.8
16,845.2
1,142.1
1,142.1
–
–
493.2
493.2
14.7
–
–
294.4
295.7
–
–
366.8
366.8
8,410.3
8,410.3
271.4
–
7,924.2
8,085.7
755.9
152.6
755.9
152.6
–
–
6.8
2,324.4
2,383.5
2,383.5
11,287.5
5,557.7
1,142.1
478.5
–
–
16.9
–
8,042.5
755.9
132.7
–
–
–
–
295.7
78.5
8,410.3
43.2
–
13.1
–
203
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FAIR VALUE OF ASSETS AND LIABILITIES
FOR THE ACCOUNT AND AT THE RISK OF LIFE INSURANCE POLICYHOLDERS AND THIRD PARTIES
31.12.2019
CHF million
Assets measured on a recurring basis
Financial instruments with characteristics of equity
Total carrying
amount
Total fair value
Level 1
Level 2
Level 3
Recognised at fair value through profit or loss
11,553.5
11,553.5
11,279.5
–
274.0
Financial instruments with characteristics of liabilities
Recognised at fair value through profit or loss
2,161.4
2,161.4
1,885.5
153.2
122.7
Mortgages and loans
Recognised at fair value through profit or loss
Derivative financial instruments
Liabilities measured on a recurring basis
Liabilities arising from banking business and financial contracts
–
578.4
–
578.4
–
224.5
–
353.9
Recognised at fair value through profit or loss
12,436.4
12,436.4
12,283.2
Derivative financial instruments
–
–
–
153.2
–
–
–
–
–
204
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FAIR VALUE OF ASSETS AND LIABILITIES
FOR THE ACCOUNT AND AT THE RISK OF LIFE INSURANCE POLICYHOLDERS AND THIRD PARTIES
31.12.2020
CHF million
Assets measured on a recurring basis
Financial instruments with characteristics of equity
Total carrying
amount
Total fair value
Level 1
Level 2
Level 3
Recognised at fair value through profit or loss
12,053.8
12,053.8
11,749.9
–
303.9
Financial instruments with characteristics of liabilities
Recognised at fair value through profit or loss
1,986.5
1,986.5
1,683.0
178.9
124.5
Mortgages and loans
Recognised at fair value through profit or loss
Derivative financial instruments
Liabilities measured on a recurring basis
Liabilities arising from banking business and financial contracts
–
595.9
–
595.9
–
224.0
–
371.9
Recognised at fair value through profit or loss
12,528.7
12,528.7
12,349.7
Derivative financial instruments
–
–
–
178.9
–
–
–
–
–
205
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
FOR OWN ACCOUNT AND AT OWN RISK AND CLASSIFIED AS LEVEL 3
2019
CHF million
Assets and liabilities measured on a recurring basis
Balance as at 1 January
Additions
Additions arising from change in the scope of consolidation
Disposals
Disposals arising from change in the scope of consolidation
Reclassified to level 3
Reclassified from level 3
Reclassification to non-current assets classified as held for sale
Changes in fair value recognised in profit or loss 1
Changes in fair value not recognised in profit or loss
Exchange differences
Balance as at 31 December
Financial
instruments with
characteristics
of equity
Available for
sale
Investment
property
Recognised at
fair value
through
profit or loss
Derivative
financial
instruments
(liabilities)
Total
1,322.7
251.0
–
7,904.0
452.3
19.8
– 124.1
– 423.3
–
–
–
–
–
–
–
–
38.9
4.9
– 25.0
1,468.4
216.9
–
– 49.5
8,120.1
–
–
–
–
–
–
–
–
–
– 8.4
–
– 8.4
9,226.7
703.3
19.8
– 547.4
–
–
–
–
255.8
– 3.5
– 74.5
9,580.2
Changes in fair value of financial instruments held at the balance sheet date and
recognised in profit or loss
– 8.5
199.9
–
191.5
1 Changes in fair value recognised in profit or loss arise from realised gains and losses on investments, impairment losses or the reversal of impairment losses.
206
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
FOR OWN ACCOUNT AND AT OWN RISK AND CLASSIFIED AS LEVEL 3
2020
CHF million
Assets and liabilities measured on a recurring basis
Balance as at 1 January
Additions
Additions arising from change in the scope of consolidation
Disposals
Disposals arising from change in the scope of consolidation
Reclassified to level 3
Reclassified from level 3
Reclassification to non-current assets classified as held for sale
Changes in fair value recognised in profit or loss 1
Changes in fair value not recognised in profit or loss
Exchange differences
Balance as at 31 December
Financial
instruments
with
characteristics
of equity
Available
for sale
Investment
property
Recognised at
fair value
through
profit or loss
Derivative
financial
instruments
(liabilities)
Total
1,468.4
194.2
–
8,120.1
304.7
–
– 29.0
– 70.4
–
–
–
–
– 35.6
– 70.1
– 21.5
–
29.3
– 140.5
–
171.0
–
– 4.0
– 8.4
–
–
–
–
–
–
–
–
– 4.7
–
9,580.2
498.9
–
– 99.3
–
29.3
– 140.5
–
135.4
– 74.9
– 25.5
1,506.4
8,410.3
– 13.1
9,903.5
Changes in fair value of financial instruments held at the balance sheet date and
recognised in profit or loss
– 6.8
170.7
–
163.9
1 Changes in fair value recognised in profit or loss arise from realised gains and losses on investments, impairment losses or the reversal of impairment losses.
207
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
FOR THE ACCOUNT AND AT THE RISK OF LIFE INSURANCE POLICYHOLDERS AND THIRD PARTIES AND CLASSIFIED AS LEVEL 3
2019
CHF million
Assets and liabilities measured on a recurring basis
Balance as at 1 January
Additions
Additions arising from change in the scope of consolidation
Disposals
Disposals arising from change in the scope of consolidation
Reclassified to level 3
Reclassified from level 3
Changes in fair value recognised in profit or loss 1
Exchange differences
Balance as at 31 December
Financial
instruments with
characteristics
of equity
Financial
instruments with
characteristics
of liabilities
Recognised at
fair value
through
profit or loss
Recognised at
fair value
through
profit or loss
226.3
29.9
–
– 31.7
–
–
–
58.9
– 9.4
274.0
112.8
40.1
–
– 25.7
–
–
–
– 0.2
– 4.3
122.7
Total
339.1
70.0
–
– 57.4
–
–
–
58.7
– 13.7
396.7
Changes in fair value of financial instruments
held at the balance sheet date and recognised in profit or loss
58.9
– 0.2
58.7
1 Changes in fair value recognised in profit or loss arise from realised gains and losses on investments, impairment losses or the reversal of impairment losses.
208
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
FOR THE ACCOUNT AND AT THE RISK OF LIFE INSURANCE POLICYHOLDERS AND THIRD PARTIES AND CLASSIFIED AS LEVEL 3
2020
CHF million
Assets and liabilities measured on a recurring basis
Balance as at 1 January
Additions
Additions arising from change in the scope of consolidation
Disposals
Disposals arising from change in the scope of consolidation
Reclassified to level 3
Reclassified from level 3
Changes in fair value recognised in profit or loss 1
Exchange differences
Balance as at 31 December
Changes in fair value of financial instruments
held at the balance sheet date and recognised in profit or loss
Financial
instruments
with
characteristics
of equity
Financial
instruments
with
characteristics
of liabilities
Recognised at
fair value
through
profit or loss
Recognised at
fair value
through
profit or loss
274.0
28.7
–
– 11.5
–
–
122.7
16.2
–
– 12.3
–
–
Total
396.7
44.9
–
– 23.8
–
–
– 1.3
– 0.1
– 1.4
14.4
– 0.5
303.9
– 1.7
– 0.3
124.5
12.7
– 0.8
428.4
14.4
– 1.7
12.7
1 Changes in fair value recognised in profit or loss arise from realised gains and losses on investments, impairment losses or the reversal of impairment losses.
209
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Reclassification of assets and liabilities from level 1 to level 2 and vice versa
Assets and liabilities measured at fair value are generally reclassified from level 1 to level 2 if there is no longer deemed to be an
active market in these instruments owing to their low daily trading volumes or lack of liquidity or if the instruments concerned
have been de-listed. Financial instruments are reclassified from level 2 to level 1 for the exact opposite reasons.
No significant amounts of assets or liabilities measured at fair value were reclassified from level 1 to level 2 or vice versa
during the reporting period or in 2019.
Reclassification of assets and liabilities to and from level 3
The reclassification of investment property from level 3 is due to the change of use of Baloise Park in Basel. A property in Belgium
was reclassified to level 3 as a result of a change of use.
Discrepancy between a non-financial asset’s highest and best use and its current use
The fair value of investment property is determined on the basis of its highest and best use.
This periodic analysis – which was based on criteria such as the potential to increase a property’s market value by converting
it into apartments, the repurposing of some or all of an existing property, the availability of a significant amount of land for further
building and development, and the unlocking of added value by demolishing an existing property and building a new one revealed
for the reporting period that the highest and best use of only individual investment properties in the Swiss portfolio differed from
their current use.
5.8 Capital management
The general parameters regarding the amount of capital employed are set by regulatory requirements and internal risk management
policies. While the aim of regulatory requirements is primarily the protection of policyholders, internal policies are largely derived
from the risk-based management of operating activities.
5.8.1 Swiss Solvency Test
For the purposes of the Swiss Solvency Test (SST), the Baloise Group defines its risk-bearing capital and target capital (capital
requirement) using a model approved by FINMA.
Risk-bearing capital is calculated on the basis of a consolidated balance sheet measured using market values. The difference
between the assets and liabilities measured at market value gives the risk-bearing capital after any capital deductions and
including any eligible supplementary capital. As a result, all capital items that can be deployed to cover losses in the event of
adverse business developments are taken into consideration.
Risk-bearing capital is compared with target capital. The capital requirement covers actuarial risk, market risk, credit risk and
other types of risk and is determined using an expected shortfall approach that takes account of diversification effects. The
actuarial capital requirement is a measurement of the operational funding required to cover actuarial risk. The claims risk is
modelled using distributions of normal and large claims, including the prevailing reinsurance structure. At the same time, the
investment required to smooth fluctuations in investment value and returns for a given probability is also calculated. Analysis of
these risks is based on quantitative models that use statistical methods to evaluate historical data and place it in the context
of current exposure. Various extreme scenarios are also evaluated, and their potential impact on risk-bearing capacity is analysed.
The SST ratio (ratio of risk-bearing capital to target capital, after deduction of the market value margin in both cases) is calculated
for the strategic business units and the Group.
The results of the Swiss Solvency Test for the Baloise Group are disclosed annually in the financial condition report, which is
published at the end of April.
210
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
5.8.2 Requirements under local legislation
Individual Group companies are also subject to regulation under local legislation (in particular the Swiss Solvency Text and
Solvency II). The ability of the business units, and therefore also of the parent company, to pay dividends is closely linked to the
priority placed on meeting these local requirements. Compliance with local solvency requirements is monitored on an ongoing
basis. Appropriate action is taken if solvency falls short of these regulations.
The relevant requirements for the banking operations of Baloise Bank SoBa are defined by Basel III regulations.
5.8.3 Monitoring the solvency situation
The risk owner and risk controller responsible for each business unit and for the Group as a whole participate in a regular reporting
process. Key figures relating to Solvency I, Solvency II and key figures relating to banking operations are reported on a monthly
basis, which enables the solvency situation to be monitored in a timely manner, providing the basis for risk-based management
decisions within the whole organisation. It also enables the Baloise Group to meet external reporting requirements at all times.
211
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
6. BASIS OF CONSOLIDATION
6.1 2019 financial year
6.1.1 Acquisitions and foundations
In Switzerland, 66.7 per cent of the shares in start-up Bubble Box AG, which operates an online platform for laundry and dry
cleaning services, were acquired on 29 April 2019. Baloise has an option to buy the remaining shares, which is why the company
has been fully consolidated.
On 16 July 2019, the Baloise Group acquired all of the voting rights in Belgian multi-sector insurer Fidea NV, thereby strength-
ening its position in the non-life and life insurance market.
In Switzerland, 60 per cent of the shares in devis.ch SA, a digital marketplace for the services of tradespeople and cleaners,
were acquired on 23 July 2019. The company is fully consolidated, because Baloise has an option to buy the remaining shares.
6.1.2 Disposals
On 30 December 2019, the branches of Basler Sachversicherungs-AG and Basler Lebensversicherungs-AG in the Czech Republic
and Slovakia were sold.
6.1.3 Other changes in the group of consolidated companies
External investors SevenVentures and German Media Pool have acquired a stake in the subsidiary FRI:DAY Insurance S.A. and now
hold 18.2 per cent of the share capital. Beneficial ownership of the shares has passed to the external investors. There are call and
put options in place that can be exercised by Baloise and the external investors after a certain point in time.
In the first half of 2019, the Baloise Group acquired a further 13.9 per cent of the shares in Artires AG, taking Baloise’s stake
to 98.9 per cent.
In the second half of 2019, Baloise Belgium NV acquired 10.5 per cent of the shares in Drivolution NV, taking the percentage
of shareholding to 89.5 per cent.
6.2 2020 financial year
6.2.1 Acquisitions
On 31 May 2020, the Baloise Group acquired the non-life insurance portfolio of Athora Belgium. The acquisition strengthens
Baloise’s position in the Wallonia region and is the ideal complement to Baloise Belgium’s presence in the Flanders region.
On 9 November 2020, Baloise founded aboDeinauto in collaboration with corporate venture builder Bridgemaker. Baloise’s
stake amounts to 83 per cent in total. In addition, Baloise holds call and put options with equal terms on the 17 per cent of shares
held by Bridgemaker, which is why aboDeinauto is fully consolidated. Baloise further expanded its Mobility ecosystem with the
founding of aboDeinauto, a subscription service provider with a strong focus on second-hand vehicles.
6.2.2 Disposals
No companies were sold during the year under review.
6.2.3 Other changes in the group of consolidated companies
In 2020, the Group structure was simplified with the following company mergers:
▸ Merger of Artires AG into Baloise Life Ltd with effect from 1 January 2020.
▸ Merger of Baloise Asset Management Schweiz AG and Baloise Immobilien Management AG with effect from 1 April 2020.
▸ Merger of Fidea NV into Baloise Belgium NV with effect from 4 May 2020.
212
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
7. SEGMENT REPORTING
The Baloise Group organises its operating activities into strategic business units, which are generally combined under a single
management team for each region. The financial and management information needed for all relevant executive decisions is held
by these strategic business units. This is also the organisational level at which the chief operating decision-makers are situated.
Regardless of where they are headquartered, all Baloise Group entities are therefore assigned to one of the reportable segments
▸
▸
▸
▸
Switzerland
Germany
Belgium
Luxembourg
The “Germany” segment includes, until 30 December 2019, the regional branches of Basler Sachversicherungs-AG and Basler
Lebensversicherungs-AG in the Czech Republic and Slovakia. The “Luxembourg” segment also includes the Baloise Life Liech-
tenstein unit.
The “Group business” segment comprises the units engaged in intercompany reinsurance and financing, Group IT, the hold-
ing companies and the run-off portfolios for the London market, the German hospital liability business and a portfolio of variable
annuities products.
The revenue generated by the Baloise Group is broken down into the Non-Life, Life, Banking (including asset management) and
Other activities operating segments.
The Non-Life segment offers accident and health insurance as well as products relating to liability, motor, property and marine
insurance. These products are tailored to the specific needs of our customers – primarily retail clients – and the core competences
of the relevant companies in the Baloise Group.
The Life segment provides individuals and companies with a wide range of endowment policies, term insurance, investment-linked
products and private placement life insurance.
The “Asset Management &Banking” operating segment encompasses banking-related areas of asset management as well as
the actual banking area.
The “Other activities” operating segment includes equity investment companies, real estate firms and financing companies.
The company Baloise Fund Invest Advico is now reported within the Switzerland segment, in line with the management structure.
The company had previously been reported within the Group business segment.
In 2019, there was a change of chief operating decision maker for variable annuities products, which are being run off in
Liechtenstein. As a result, this business is no longer reported within the Luxembourg segment (which also covers Liechtenstein)
and is instead included in the Group business segment. Responsibility for the Swiss variable annuities products contained in this
run-off portfolio were transferred to the Switzerland strategic business unit in the first half of 2020 and, as a result, are now
reported in the Switzerland segment. The figures for the prior-year period have not been adjusted as the cost of preparing this
information would have been disproportionately high.
In the Group business segment, 100 per cent of the London market run-off portfolio is reinsured. This portfolio mainly consists
of liability claims relating to asbestos and environmental damage.
The accounting policies applied to the presentation of the segment reporting are those used throughout the rest of the Financial
Report. No intersegment relationships recognised either on the balance sheet or in the income statement – with the exception of
income from long-term equity investments – are offset against each other.
213
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
7.1 Segment reporting by strategic business unit
CHF million
Income
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Switzerland
Germany
Belgium
Luxembourg
Sub-total
Group business
Eliminated
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
4,758.5
– 80.9
4,677.6
4,005.5
– 101.8
3,903.6
1,167.2
– 88.4
1,078.8
1,158.8
– 82.9
1,075.9
1,421.8
– 137.6
1,284.3
1,635.5
– 159.7
1,475.8
213.1
– 18.4
194.8
210.1
– 19.1
191.0
7,560.6
– 325.3
7,235.3
7,009.8
– 363.5
6,646.4
– 107.7
107.7
0.0
– 95.6
95.6
0.0
7,571.3
– 241.5
7,329.8
7,034.8
– 268.0
6,766.8
Investment income
816.8
766.0
197.7
174.6
226.8
224.6
21.2
19.4
1,262.5
1,184.7
3.4
18.4
– 8.8
– 26.6
1,257.0
1,176.5
Realised gains and losses on investments
For own account and at own risk
For the account and at the risk
of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Intersegment income
Income from associates
128.4
73.3
75.4
3.5
115.3
5,890.2
– 44.0
1.3
103.0
– 2.3
94.2
39.1
101.0
5,004.7
– 36.4
9.2
136.1
359.1
13.0
7.3
38.2
174.3
4.7
11.2
10.5
49.5
95.7
85.8
3.8
–
47.4
8.5
44.8
5.4
14.4
22.8
1,830.1
1,500.8
1,743.8
1,796.3
1,414.1
10,878.1
8,710.4
– 240.0
10,996.9
8,787.0
32.3
7.3
14.0
6.5
39.1
–
43.8
4.1
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurers’ share of claims incurred
Acquisition costs
Operating and administrative expenses
for insurance business
Investment management expenses 1
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses 1
Expense
– 4,142.3
– 4,137.0
– 353.5
21.8
– 55.7
210.8
145.0
– 48.9
– 456.3
– 446.8
– 76.0
– 0.3
– 66.7
– 72.6
– 0.2
– 21.4
– 261.0
– 247.3
– 904.4
– 484.6
25.2
– 169.4
– 170.4
– 26.3
– 16.6
– 2.3
– 61.0
– 895.6
– 188.4
68.5
– 173.7
– 160.4
– 25.8
– 14.5
– 2.7
– 87.2
– 905.2
– 1,009.5
– 119.0
– 109.1
– 6,070.8
– 6,151.2
– 93.2
– 122.2
– 6,090.4
– 6,182.6
– 93.3
99.3
– 305.5
– 122.2
– 15.6
– 0.4
– 142.9
– 62.8
39.4
104.6
– 333.7
– 153.4
– 17.1
– 0.2
– 116.2
– 64.4
– 5,390.0
– 4,618.4
– 1,809.9
– 1,479.8
– 1,548.5
– 1,550.6
– 1,391.4
– 379.7
– 10,139.8
– 8,028.5
– 10,273.0
– 8,184.1
Profit / loss before borrowing costs and taxes
500.2
386.3
20.2
20.9
195.2
245.8
22.7
28.9
738.3
681.9
– 14.4
– 79.0
723.9
602.9
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
– 10.6
489.6
65.3
554.9
– 10.4
375.9
– 52.9
323.0
– 0.1
20.1
– 21.3
– 1.1
– 0.1
20.9
– 1.1
19.7
0.0
195.2
– 43.2
152.0
0.0
245.7
– 77.7
168.0
Segment assets as at 31.12.
46,789.2
47,285.8
12,884.6
13,028.7
14,302.8
15,274.2
12,765.1
13,156.8
86,741.7
88,745.6
2,863.0
2,380.2
– 2,586.9
– 2,761.3
87,017.8
88,364.5
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management expenses
in the Switzerland segment.
214
170.2
156.7
– 157.5
– 170.1
– 257.2
– 268.6
– 56.6
– 223.0
223.0
– 43.3
240.0
118.3
– 23.9
94.5
– 32.3
65.3
40.7
341.8
–
–
30.6
23.6
– 2.5
– 6.2
– 6.7
0.0
– 72.4
– 229.5
– 356.2
– 26.9
– 41.4
6.9
– 34.5
120.5
– 0.1
120.4
1.1
– 6.3
26.4
316.6
–
–
– 5.5
0.9
– 5.0
– 8.6
– 6.8
– 0.3
– 10.4
– 237.8
– 395.7
– 23.7
– 102.7
– 8.5
– 111.3
–
–
–
–
–
–
–
–
–
73.7
– 3.1
– 70.6
1.3
– 1.3
18.6
0.3
9.0
195.2
223.0
–
–
–
–
–
–
–
–
–
90.8
15.9
– 106.6
1.4
– 1.4
16.7
0.2
26.6
196.5
240.0
336.1
1,709.5
126.0
10.8
227.7
–
8.7
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 459.0
– 37.7
686.2
3.3
689.5
Total
2020
288.3
179.5
118.5
64.1
193.4
–
19.8
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 34.3
568.6
– 140.3
428.3
8.3
1,125.9
21.2
–
42.7
6.8
–
– 52.8
17.5
– 22.8
– 59.6
– 2.0
– 0.2
1.4
138.6
21.1
–
37.0
408.6
7.3
–
– 39.0
24.0
– 21.5
– 61.0
– 1.9
– 0.1
368.4
1,644.2
113.3
10.8
243.6
34.2
8.7
– 984.2
163.9
– 553.5
– 808.5
– 119.9
– 17.5
– 1,112.6
– 135.4
– 1,324.6
– 39.9
– 35.8
– 424.7
– 0.1
22.6
– 4.4
18.2
– 0.1
28.8
0.0
28.8
– 10.8
727.5
– 3.5
724.0
287.2
185.8
132.0
64.1
210.3
28.6
19.8
22.8
342.1
– 577.7
– 821.5
– 117.4
– 15.0
– 275.8
– 434.7
– 10.6
671.3
– 131.8
539.5
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Switzerland
Germany
Belgium
Luxembourg
Sub-total
Group business
Eliminated
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Total
2020
4,758.5
– 80.9
4,677.6
4,005.5
– 101.8
3,903.6
1,167.2
– 88.4
1,078.8
1,158.8
– 82.9
1,075.9
1,421.8
– 137.6
1,284.3
1,635.5
– 159.7
1,475.8
213.1
– 18.4
194.8
210.1
– 19.1
191.0
7,560.6
– 325.3
7,235.3
7,009.8
– 363.5
6,646.4
118.3
– 23.9
94.5
120.5
– 0.1
120.4
– 107.7
107.7
0.0
– 95.6
95.6
0.0
7,571.3
– 241.5
7,329.8
7,034.8
– 268.0
6,766.8
Investment income
816.8
766.0
197.7
174.6
226.8
224.6
21.2
19.4
1,262.5
1,184.7
3.4
18.4
– 8.8
– 26.6
1,257.0
1,176.5
7.1 Segment reporting by strategic business unit
CHF million
Income
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Realised gains and losses on investments
For own account and at own risk
For the account and at the risk
of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Intersegment income
Income from associates
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurers’ share of claims incurred
Acquisition costs
for insurance business
Investment management expenses 1
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses 1
Expense
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Operating and administrative expenses
– 456.3
– 446.8
1,830.1
1,500.8
1,743.8
1,796.3
128.4
73.3
75.4
3.5
115.3
5,890.2
– 44.0
1.3
– 353.5
21.8
– 55.7
– 76.0
– 0.3
– 66.7
– 10.6
489.6
65.3
554.9
103.0
– 2.3
94.2
39.1
101.0
5,004.7
– 36.4
9.2
210.8
145.0
– 48.9
– 72.6
– 0.2
– 21.4
– 10.4
375.9
– 52.9
323.0
– 261.0
– 247.3
136.1
359.1
13.0
7.3
38.2
32.3
7.3
– 904.4
– 484.6
25.2
– 169.4
– 170.4
– 26.3
– 16.6
– 2.3
– 61.0
– 0.1
20.1
– 21.3
– 1.1
174.3
4.7
11.2
10.5
49.5
14.0
6.5
– 895.6
– 188.4
68.5
– 173.7
– 160.4
– 25.8
– 14.5
– 2.7
– 87.2
– 0.1
20.9
– 1.1
19.7
95.7
85.8
3.8
–
47.4
39.1
–
– 93.3
99.3
– 305.5
– 122.2
– 15.6
– 0.4
– 142.9
– 62.8
0.0
195.2
– 43.2
152.0
8.5
44.8
5.4
14.4
22.8
43.8
4.1
39.4
104.6
– 333.7
– 153.4
– 17.1
– 0.2
– 116.2
– 64.4
0.0
245.7
– 77.7
168.0
– 4,142.3
– 4,137.0
– 905.2
– 1,009.5
– 119.0
– 109.1
– 6,070.8
– 6,151.2
– 93.2
– 122.2
– 5,390.0
– 4,618.4
– 1,809.9
– 1,479.8
– 1,548.5
– 1,550.6
– 1,391.4
– 379.7
– 10,139.8
– 8,028.5
– 52.8
17.5
– 22.8
– 59.6
– 2.0
– 0.2
– 39.0
24.0
– 21.5
– 61.0
– 1.9
– 0.1
– 984.2
163.9
– 553.5
– 808.5
– 119.9
– 17.5
– 1,112.6
– 135.4
– 1,324.6
– 39.9
– 35.8
– 424.7
22.8
342.1
– 577.7
– 821.5
– 117.4
– 15.0
– 275.8
– 434.7
30.6
23.6
– 2.5
– 6.2
– 6.7
0.0
– 72.4
– 229.5
– 356.2
– 5.5
0.9
– 5.0
– 8.6
– 6.8
– 0.3
– 10.4
– 237.8
– 395.7
Profit / loss before borrowing costs and taxes
500.2
386.3
20.2
20.9
195.2
245.8
22.7
28.9
738.3
681.9
– 14.4
– 79.0
– 0.1
22.6
– 4.4
18.2
– 0.1
28.8
0.0
28.8
– 10.8
727.5
– 3.5
724.0
– 10.6
671.3
– 131.8
539.5
– 26.9
– 41.4
6.9
– 34.5
– 23.7
– 102.7
– 8.5
– 111.3
8.3
1,125.9
21.2
–
42.7
1,414.1
6.8
–
1.4
138.6
21.1
–
37.0
408.6
7.3
–
368.4
1,644.2
113.3
10.8
243.6
287.2
185.8
132.0
64.1
210.3
10,878.1
8,710.4
– 32.3
65.3
170.2
–
40.7
341.8
1.1
– 6.3
–
–
–
–
336.1
1,709.5
156.7
– 157.5
– 170.1
–
– 43.3
126.0
10.8
227.7
–
26.4
316.6
288.3
179.5
118.5
64.1
193.4
34.2
8.7
28.6
19.8
– 257.2
– 268.6
–
–
– 240.0
10,996.9
8,787.0
240.0
–
–
8.7
–
19.8
90.8
15.9
– 106.6
1.4
– 1.4
16.7
0.2
26.6
196.5
240.0
–
–
–
–
–
– 6,090.4
– 6,182.6
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 459.0
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 10,273.0
– 8,184.1
723.9
602.9
– 37.7
686.2
3.3
689.5
– 34.3
568.6
– 140.3
428.3
–
– 56.6
– 223.0
223.0
–
73.7
– 3.1
– 70.6
1.3
– 1.3
18.6
0.3
9.0
195.2
223.0
–
–
–
–
–
Segment assets as at 31.12.
46,789.2
47,285.8
12,884.6
13,028.7
14,302.8
15,274.2
12,765.1
13,156.8
86,741.7
88,745.6
2,863.0
2,380.2
– 2,586.9
– 2,761.3
87,017.8
88,364.5
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management expenses
in the Switzerland segment.
215
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
7.2 Segment reporting by operating segment
CHF million
Income
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Investment income
Realised gains and losses on investments
For own account and at own risk
For the account and at the risk
of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Intersegment income
Income from associates
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurers’ share of claims incurred
Acquisition costs
Operating and administrative expenses for insurance business
Investment management expenses 1
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses 1
Expense
2019
3,511.0
– 214.9
3,296.1
Non-Life
2020
3,743.4
– 230.0
3,513.5
2019
4,060.3
– 26.6
4,033.7
Life
2020
3,291.3
– 38.1
3,253.3
176.6
158.5
999.9
942.6
16.7
– 9.5
– 25.6
1,257.0
1,176.5
50.8
–
35.3
5.5
59.4
3,623.8
– 34.6
3.3
25.2
–
43.2
38.9
26.8
3,806.0
– 41.2
4.9
– 2,184.4
– 2,338.3
163.5
99.3
– 523.0
– 535.6
– 30.6
– 0.7
– 1.2
1.0
205.0
– 545.9
– 547.6
– 29.4
– 0.5
– 16.4
– 212.2
– 3,224.8
– 231.8
– 3,503.8
263.0
1,662.6
23.7
1.3
182.4
7,166.5
– 37.5
1.3
– 3,906.0
– 1,120.2
17.7
– 31.6
– 280.4
– 105.7
– 16.5
– 1,304.1
– 144.8
– 6,891.7
274.0
185.1
26.7
20.9
176.3
4,878.8
– 55.3
10.6
– 3,844.3
32.2
31.4
– 35.4
– 284.0
– 102.0
– 14.6
– 234.7
– 145.3
– 4,596.7
Profit / loss before borrowing costs and taxes
398.9
302.2
274.8
282.2
– 41.0
– 61.0
723.9
602.9
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
– 0.4
398.5
– 34.2
364.3
– 0.3
301.9
– 63.2
238.7
– 10.3
264.5
51.8
316.3
– 10.3
271.9
– 67.6
204.3
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management expenses in the
Asset Management & Banking segment.
216
163.8
152.5
– 260.6
– 271.1
Asset Management & Banking
Other activities
Eliminated
2019
2020
2019
2020
2019
2020
2019
86.6
17.4
13.7
281.5
– 88.3
–
–
–
–
–
–
–
–
–
–
–
–
– 35.9
– 99.8
– 190.4
91.1
0.0
91.1
– 13.5
77.6
84.3
7.0
–
15.1
259.0
– 86.3
–
–
–
–
–
–
–
–
–
–
–
– 24.4
– 98.5
– 179.5
79.4
0.0
79.4
– 11.7
67.8
–
–
–
3.3
5.0
46.9
163.8
4.0
16.4
239.4
– 153.9
4.0
–
–
–
–
–
0.0
– 0.7
– 56.4
– 223.3
– 280.4
– 26.9
– 67.9
– 0.9
– 68.8
–
–
–
–
–
–
–
–
–
– 17.9
– 5.6
167.2
4.3
18.2
182.9
– 157.0
4.3
– 9.8
– 233.9
– 243.9
– 23.7
– 84.6
2.2
– 82.4
– 44.2
– 314.3
314.3
– 43.0
– 339.8
339.8
10,996.9
8,787.0
– 6,090.4
– 6,182.6
Total
2020
7,034.8
– 268.0
6,766.8
288.3
179.5
118.5
64.1
193.4
–
19.8
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 34.3
568.6
– 140.3
428.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,571.3
– 241.5
7,329.8
336.1
1,709.5
126.0
10.8
227.7
–
8.7
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 459.0
– 37.7
686.2
3.3
689.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 54.7
– 56.6
– 0.2
83.5
80.7
9.7
221.1
314.3
25.7
233.4
339.8
– 10,273.0
– 8,184.1
7.2 Segment reporting by operating segment
CHF million
Income
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Premiums earned and policy fees (net)
Investment income
Realised gains and losses on investments
For own account and at own risk
For the account and at the risk
of life insurance policyholders and third parties
Income from services rendered
Share of profit (loss) of associates
Other operating income
Income
Intersegment income
Income from associates
Expense
Claims and benefits paid (gross)
Change in technical reserves (gross)
Reinsurers’ share of claims incurred
Acquisition costs
Investment management expenses 1
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses 1
Expense
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Asset Management & Banking segment.
Operating and administrative expenses for insurance business
176.6
158.5
999.9
942.6
Non-Life
2020
3,743.4
– 230.0
3,513.5
25.2
–
43.2
38.9
26.8
3,806.0
– 41.2
4.9
1.0
205.0
– 545.9
– 547.6
– 29.4
– 0.5
– 16.4
– 0.3
301.9
– 63.2
238.7
4,060.3
– 26.6
4,033.7
263.0
1,662.6
23.7
1.3
182.4
7,166.5
– 37.5
1.3
– 3,906.0
– 1,120.2
17.7
– 31.6
– 280.4
– 105.7
– 16.5
– 1,304.1
– 144.8
– 6,891.7
– 10.3
264.5
51.8
316.3
Life
2020
3,291.3
– 38.1
3,253.3
274.0
185.1
26.7
20.9
176.3
4,878.8
– 55.3
10.6
32.2
31.4
– 35.4
– 284.0
– 102.0
– 14.6
– 234.7
– 145.3
– 4,596.7
– 10.3
271.9
– 67.6
204.3
3,511.0
– 214.9
3,296.1
50.8
–
35.3
5.5
59.4
3,623.8
– 34.6
3.3
163.5
99.3
– 523.0
– 535.6
– 30.6
– 0.7
– 1.2
– 0.4
398.5
– 34.2
364.3
– 2,184.4
– 2,338.3
– 3,844.3
Profit / loss before borrowing costs and taxes
398.9
302.2
274.8
282.2
– 212.2
– 3,224.8
– 231.8
– 3,503.8
1 The harmonisation of the recognition of investment administration costs caused a minor shift in the prior-year figures for other operating expenses and investment management expenses in the
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
2019
2019
2019
2020
2019
2020
2019
2020
2019
Asset Management & Banking
Other activities
Eliminated
–
–
–
86.6
17.4
–
163.8
–
13.7
281.5
– 88.3
–
–
–
–
–
–
– 54.7
–
– 35.9
– 99.8
– 190.4
91.1
0.0
91.1
– 13.5
77.6
–
–
–
84.3
7.0
–
152.5
–
15.1
259.0
– 86.3
–
–
–
–
–
–
– 56.6
–
– 24.4
– 98.5
– 179.5
79.4
0.0
79.4
– 11.7
67.8
–
–
–
3.3
5.0
46.9
163.8
4.0
16.4
239.4
– 153.9
4.0
–
–
–
–
0.0
– 0.7
–
– 56.4
– 223.3
– 280.4
– 17.9
– 5.6
167.2
4.3
18.2
182.9
– 157.0
4.3
–
–
–
–
–
– 0.2
–
– 9.8
– 233.9
– 243.9
– 41.0
– 61.0
– 26.9
– 67.9
– 0.9
– 68.8
– 23.7
– 84.6
2.2
– 82.4
–
–
–
–
–
–
–
–
–
7,571.3
– 241.5
7,329.8
16.7
– 9.5
– 25.6
1,257.0
1,176.5
Total
2020
7,034.8
– 268.0
6,766.8
–
–
– 260.6
–
– 44.2
– 314.3
314.3
–
–
–
–
–
–
83.5
–
9.7
221.1
314.3
–
–
–
–
–
–
–
– 271.1
–
– 43.0
– 339.8
339.8
–
–
–
–
–
–
80.7
–
25.7
233.4
339.8
–
–
–
–
–
336.1
1,709.5
126.0
10.8
227.7
288.3
179.5
118.5
64.1
193.4
10,996.9
8,787.0
–
8.7
–
19.8
– 6,090.4
– 6,182.6
– 956.7
117.0
– 554.6
– 816.0
– 108.1
– 17.2
– 1,388.0
– 459.0
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 10,273.0
– 8,184.1
723.9
602.9
– 37.7
686.2
3.3
689.5
– 34.3
568.6
– 140.3
428.3
217
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Notes to the consolidated balance sheet
Disposals
– 2.5
– 10.1
– 0.4
Land
Buildings
Operating
equipment
Machinery,
furniture
and vehicles
Hardware
Right-of-use
assets
56.0
–
2.3
187.6
4.1
5.4
32.1
8.1
12.8
–
–
–
–
–
–
21.2
2.3
1.0
– 0.8
–
– 0.4
–
21.5
16.4
0.4
– 0.4
–
0.4
–
52.9
7.5
0.4
– 0.8
– 0.4
–
–
Total
371.2
38.6
22.4
– 15.0
– 0.4
–
–
– 7.6
– 7.2
– 5.8
– 10.1
– 16.3
– 47.1
–
–
– 4.6
174.7
456.6
– 281.9
174.7
–
–
– 0.5
45.0
111.9
– 66.9
45.0
–
–
– 0.4
17.0
68.9
– 51.9
17.0
–
–
– 0.3
28.1
86.6
– 58.6
28.1
–
–
– 0.5
42.8
58.9
– 16.1
42.8
–
–
– 6.8
362.8
839.6
– 476.8
362.8
8. PROPERTY, PLANT AND EQUIPMENT
2019
CHF million
Balance as at 1 January
Additions
Additions arising from change
in the scope of consolidation
Disposals arising from change
in the scope of consolidation
Reclassification
Reclassification to non-current assets
classified as held for sale
Depreciation and impairment
Depreciation
Impairment losses recognised in profit
or loss
Reversal of impairment losses
recognised
in profit or loss
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated depreciation and impairment
Balance as at 31 December
–
–
–
–
–
–
– 0.5
55.3
56.7
– 1.4
55.3
Depreciation and impairment form part of other operating expenses.
218
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
2020
CHF million
Land
Buildings
Operating
equipment
Machinery,
furniture
and vehicles
Hardware
Right-of-use
assets
Balance as at 1 January
55.3
Additions
Additions arising from change
in the scope of consolidation
Disposals
Disposals arising from change
in the scope of consolidation
–
–
–
–
Reclassification
10.2
Reclassification to non-current assets
classified as held for sale
Depreciation and impairment
Depreciation
Impairment losses recognised in profit
or loss
Reversal of impairment losses
recognised
in profit or loss
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated depreciation and impairment
Balance as at 31 December
174.7
2.7
–
–
–
99.5
–
– 6.9
–
1.1
–
–
–
–
– 0.1
65.4
66.9
– 1.4
65.4
– 0.5
270.7
557.2
– 286.5
270.7
45.0
8.7
–
0.0
–
1.5
–
17.0
9.6
–
28.1
6.3
–
42.8
14.5
–
– 0.7
– 0.1
– 2.2
–
–
–
–
–
–
–
–
–
Total
362.8
41.8
–
– 3.0
–
111.2
–
– 7.0
– 5.0
– 11.5
– 16.5
– 46.9
–
–
– 0.2
48.0
115.3
– 67.3
48.0
–
–
0.0
20.9
68.2
– 47.3
20.9
–
–
0.0
22.7
84.3
– 61.5
22.7
–
–
0.0
38.5
71.0
– 32.5
38.5
–
1.1
– 0.8
466.2
962.8
– 496.6
466.2
Depreciation and impairment form part of other operating expenses.
The reclassifications to and from owner-occupied properties (land, buildings and operating equipment) were attributable to the
changes of use of Baloise Park in Basel and a Belgian property.
219
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
9.
INTANGIBLE ASSETS
2019
CHF million
Balance as at 1 January
Additions arising from change
in the scope of consolidation
Additions
Capitalisation of acquisition costs
Disposals
Disposals arising from change
in the scope of consolidation
Reclassification
Reclassification to non-current assets
classified as held for sale
Amortisation and impairment
Amortisation
Write-ups
Impairment losses recognised
in profit or loss
Reversal of impairment losses
recognised in profit or loss
Changes due to impending losses
Change due to unrealised gains
and losses on financial instruments
(shadow accounting)
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated amortisation
and impairment
Balance as at 31 December 1
Segment as at 31 December 2019
Switzerland
Germany
Belgium
Luxembourg
Group business
Total for geographic regions
Present value
of gains on
insurance
contracts
acquired
Deferred
acquisition
cost
(life)
Deferred
acquisition
cost
(non-life)
Software and
other
intangible
assets
5.6
661.1
147.8
–
–
258.3
–
– 0.7
–
–
147.9
42.4
47.1
–
– 0.2
–
–
–
Total
1,041.2
42.4
50.9
354.8
– 0.2
– 25.0
–
–
– 261.0
– 42.8
– 322.2
–
–
–
0.8
–
– 3.8
141.4
–
–
–
–
–
–
–
– 4.9
189.6
599.6
– 410.0
2.1
–
–
– 9.1
– 69.2
– 30.9
1,034.7
–
–
–
–
–
–
–
–
–
– 0.8
–
–
–
–
–
– 0.2
4.6
–
–
–
–
96.5
–
– 24.3
–
–
– 17.5
2.1
–
–
– 10.0
– 69.2
– 20.1
618.5
–
–
Goodwill
78.9
–
3.8
–
–
–
–
–
–
–
–
–
–
–
– 2.0
80.6
245.8
– 165.1
80.6
4.6
618.5
141.4
189.6
1,034.7
25.6
15.8
16.3
23.0
–
80.6
–
4.6
–
–
–
68.2
538.6
9.2
2.4
–
37.9
41.2
57.9
4.4
0.0
4.6
618.5
141.4
34.1
0.5
105.0
15.0
35.0
189.6
165.8
600.6
188.4
44.8
35.0
1,034.7
1 With the possible exception of goodwill, the Baloise Group has no intangible assets with indefinite useful lives.
220
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
2020
CHF million
Balance as at 1 January
Additions arising from change
in the scope of consolidation
Additions
Capitalisation of acquisition costs
Disposals
Disposals arising from change
in the scope of consolidation
Reclassification
Reclassification to non-current assets
classified as held for sale
Amortisation and impairment
Amortisation
Write-ups
Impairment losses recognised
in profit or loss
Reversal of impairment losses
recognised in profit or loss
Changes due to impending losses
Change due to unrealised gains
and losses on financial instruments
(shadow accounting)
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated amortisation
and impairment
Balance as at 31 December 1
Segment as at 31 December 2020
Switzerland
Germany
Belgium
Luxembourg
Group business
Goodwill
80.6
22.4
–
–
–
–
–
–
–
–
–
–
–
–
0.1
103.1
268.2
– 165.1
103.1
25.6
15.7
38.8
22.9
0.0
Present value
of gains on
insurance
contracts
acquired
Deferred
acquisition
cost
(life)
Deferred
acquisition
cost
(non-life)
Software and
other
intangible
assets
4.6
618.5
141.4
–
–
–
–
115.9
330.3
189.6
9.0
44.0
–
–
–
–
–
–
–
–
–
Total
1,034.7
31.3
44.0
446.2
–
–
–
–
– 306.9
– 50.5
– 389.7
–
–
–
2.8
–
0.0
167.6
–
–
–
–
–
–
–
– 0.4
191.7
656.4
– 464.7
1.7
–
–
0.0
– 11.4
– 1.4
1,155.4
–
–
–
–
–
–
– 31.5
1.7
–
–
– 2.8
– 11.4
– 1.0
689.3
–
–
689.3
167.6
191.7
1,155.4
–
–
–
–
–
–
–
– 0.8
–
–
–
–
–
0.0
3.7
–
–
3.7
–
3.7
–
–
–
80.2
607.6
–
1.5
–
35.1
37.1
90.9
4.5
–
34.1
0.8
100.6
10.7
45.5
191.7
175.1
664.9
230.3
39.7
45.5
1,155.4
221
Total for geographic regions
103.1
3.7
689.3
167.6
1 With the possible exception of goodwill, the Baloise Group has no intangible assets with indefinite useful lives.
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
9.1 Assumptions used to test the impairment of significant goodwill items
Assumptions used to forecast future business developments and trends have been reviewed by the local management teams and
take account of macroeconomic conditions. The input factors are described in note 3.10.3 (Impairment losses on non-financial
assets).
Basler Versicherung AG
Basler Financial Services GmbH
Bâloise Vie Luxembourg S.A.
Bâloise Assurances Luxembourg S.A.
Baloise Belgium NV
Goodwill as at 31.12.
CHF million
Discount rate
per cent
Growth rate
per cent
2019
25.6
13.8
6.9
15.6
15.1
2020
25.6
13.7
6.8
15.6
37.6
2019
2020
2019
2020
7.8
6.8
7.0
7.0
7.0
7.8
6.8
7.0
7.0
7.0
1.5
1.0
2.5
2.5
2.6
1.5
1.0
2.5
2.5
2.6
The impairment test in 2020 did not reveal any need to recognise impairment losses.
The management is of the opinion that a possible change in the assumptions based on the exercise of appropriate discretion
would not have led, either in 2020 or in 2019, to the carrying amount of an entity being significantly higher than its recoverable value.
222
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
10. INVESTMENT PROPERTY
CHF million
Balance as at 1 January
Additions
Additions arising from change in scope of consolidation
Disposals
Disposals arising from change in scope of consolidation
Reclassification
Reclassification to non-current assets classified as held for sale
Change in fair value
Exchange differences
Balance as at 31 December
Operating expenses arising from investment property that generates rental income
Operating expenses arising from investment property that does not generate rental income
2019
2020
7,904.0
452.3
19.8
– 423.3
–
–
–
216.9
– 49.5
8,120.1
304.7
–
– 70.4
–
– 111.2
–
171.0
– 4.0
8,120.1
8,410.3
84.6
–
74.7
–
The increase in the portfolio during the reporting year was largely attributable to real estate acquired by Baloise’s Swiss entities.
The reclassifications from and to investment properties were attributable to the changes of use of Baloise Park in Basel and
a Belgian property.
11. FINANCIAL ASSETS
CHF million
Financial assets of an equity nature
Available for sale
Recognised at fair value through profit or loss
Financial assets of a debt nature
Held to maturity
Available for sale
Recognised at fair value through profit or loss
Financial assets for own account and at own risk
Financial assets for the account and at the risk of life insurance policyholders and third parties
Recognised at fair value through profit or loss 1
Financial assets as reported on the balance sheet
31.12.2019
31.12.2020
4,351.1
328.3
3,983.6
502.4
7,475.5
6,974.8
27,101.5
28,110.2
10.6
7.3
39,267.0
39,578.4
13,714.9
52,982.0
14,040.3
53,618.6
1 Of which financial assets totalling CHF 100.4 million (2019: CHF 168.6 million) involved insurance policies that had not been fully reviewed by the balance sheet date.
223
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK
as at 31.12.
CHF million
Financial assets of an equity nature
Publicly listed
Not publicly listed
Total
Financial assets of a debt nature
Publicly listed, fixed-interest rate
Publicly listed, variable interest rate
Not publicly listed, fixed-interest rate
Not publicly listed, variable interest rate
Total
Held to maturity
Available for sale
Trading portfolio
Designated
Recognised at fair value
through profit or loss
Total
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
–
–
–
–
–
–
7,475.5
6,974.8
–
–
–
–
–
–
7,475.5
6,974.8
27,101.5
28,110.2
34,587.6
35,092.4
2,493.9
1,857.3
4,351.1
25,344.5
138.6
1,618.4
–
2,141.1
1,842.5
3,983.6
26,173.6
172.4
1,764.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
283.3
45.0
328.3
0.1
10.5
–
–
10.6
450.3
52.2
502.4
0.1
7.2
–
–
7.3
2,777.2
1,902.3
4,679.4
32,820.1
149.1
1,618.4
–
2,591.3
1,894.7
4,486.0
33,148.5
179.6
1,764.2
–
No impairment losses had to be recognised on held-to-maturity financial instruments with characteristics of liabilities, during either
the reporting year or the prior year.
224
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK
Financial assets of an equity nature
as at 31.12.
CHF million
Publicly listed
Not publicly listed
Total
Financial assets of a debt nature
Publicly listed, fixed-interest rate
Publicly listed, variable interest rate
Not publicly listed, fixed-interest rate
Not publicly listed, variable interest rate
Total
Held to maturity
Available for sale
Trading portfolio
Designated
Recognised at fair value
through profit or loss
Total
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
–
–
–
–
–
–
–
–
–
–
–
–
7,475.5
6,974.8
2,493.9
1,857.3
4,351.1
25,344.5
138.6
1,618.4
–
2,141.1
1,842.5
3,983.6
26,173.6
172.4
1,764.2
–
7,475.5
6,974.8
27,101.5
28,110.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
283.3
45.0
328.3
0.1
10.5
–
–
10.6
450.3
52.2
502.4
0.1
7.2
–
–
7.3
2,777.2
1,902.3
4,679.4
32,820.1
149.1
1,618.4
–
2,591.3
1,894.7
4,486.0
33,148.5
179.6
1,764.2
–
34,587.6
35,092.4
225
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK
as at 31.12.
CHF million
Equities
Equity funds
Mixed funds
Bond funds
Real estate funds
Private equity
Hedge funds
Financial assets of an equity nature
Public corporations
Industrial enterprises
Financial institutions
Other
Held to maturity
Available for sale
Trading portfolio
Designated
Recognised at fair value
through profit or loss
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,637.3
6,228.8
1.6
826.6
10.0
–
736.0
10.0
Financial assets of a debt nature
7,475.5
6,974.8
27,101.5
28,110.2
Total
7,475.5
6,974.8
31,452.6
32,093.8
338.9
509.7
39,267.0
39,578.4
Secured financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Total
10.9
–
779.0
–
789.8
10.8
–
693.5
–
704.3
Initial investments in a Dutch mortgage investment fund were made under the private debt investment strategy. The investment
vehicle is a fund for joint account (FGR) under Dutch law that is managed by an AIFM-authorised, regulated manager (DMF Invest-
ment Management).
The investments in this Dutch mortgage investment fund are reported under available-for-sale financial instruments with
characteristics of liabilities.
Secured financial instruments with characteristics of liabilities are fixed-income securities for which a mortgage or a government
bond has been securitised as collateral.
226
4,351.1
3,983.6
328.3
502.4
4,679.4
4,486.0
2,095.1
1,952.7
2,095.1
1,952.7
61.7
246.3
173.2
672.0
910.0
192.8
52.7
234.9
140.6
691.3
906.7
4.7
12,964.0
7,079.5
7,058.0
–
13,509.4
7,833.2
6,488.7
278.9
212.7
2,058.3
4,608.5
–
6,879.6
132.5
1,541.5
3,901.1
278.9
5,854.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22.7
290.0
15.7
0.0
0.1
10.5
10.6
–
–
–
–
–
–
–
–
–
Total
86.6
671.8
158.8
704.7
906.7
4.7
84.3
536.3
188.9
672.0
910.0
192.8
19,601.4
19,738.2
7,081.1
7,895.1
10.0
7,833.2
7,232.0
288.9
34,587.6
35,092.4
223.5
2,058.3
5,387.5
–
7,669.4
143.3
1,541.5
4,594.6
278.9
6,558.3
–
33.9
436.9
18.2
13.5
–
–
0.1
7.2
–
–
7.3
–
–
–
–
–
FINANCIAL ASSETS FOR OWN ACCOUNT AND AT OWN RISK
as at 31.12.
CHF million
Equities
Equity funds
Mixed funds
Bond funds
Real estate funds
Private equity
Hedge funds
Financial assets of an equity nature
Public corporations
Industrial enterprises
Financial institutions
Financial assets of a debt nature
Secured financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Other
Total
Other
Total
Initial investments in a Dutch mortgage investment fund were made under the private debt investment strategy. The investment
vehicle is a fund for joint account (FGR) under Dutch law that is managed by an AIFM-authorised, regulated manager (DMF Invest-
The investments in this Dutch mortgage investment fund are reported under available-for-sale financial instruments with
ment Management).
characteristics of liabilities.
Secured financial instruments with characteristics of liabilities are fixed-income securities for which a mortgage or a government
bond has been securitised as collateral.
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Held to maturity
Available for sale
Trading portfolio
Designated
Recognised at fair value
through profit or loss
Total
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2,095.1
1,952.7
61.7
246.3
173.2
672.0
910.0
192.8
52.7
234.9
140.6
691.3
906.7
4.7
4,351.1
3,983.6
12,964.0
7,079.5
7,058.0
–
13,509.4
7,833.2
6,488.7
278.9
27,101.5
28,110.2
7,475.5
6,974.8
31,452.6
32,093.8
212.7
2,058.3
4,608.5
–
6,879.6
132.5
1,541.5
3,901.1
278.9
5,854.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,637.3
6,228.8
1.6
826.6
10.0
7,475.5
736.0
10.0
6,974.8
10.9
10.8
779.0
693.5
789.8
704.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22.7
290.0
15.7
0.0
–
–
–
33.9
436.9
18.2
13.5
–
–
2,095.1
1,952.7
84.3
536.3
188.9
672.0
910.0
192.8
86.6
671.8
158.8
704.7
906.7
4.7
328.3
502.4
4,679.4
4,486.0
0.1
–
10.5
–
10.6
0.1
–
7.2
–
7.3
19,601.4
19,738.2
7,081.1
7,895.1
10.0
7,833.2
7,232.0
288.9
34,587.6
35,092.4
338.9
509.7
39,267.0
39,578.4
–
–
–
–
–
–
–
–
–
–
223.5
2,058.3
5,387.5
–
7,669.4
143.3
1,541.5
4,594.6
278.9
6,558.3
FAIR VALUE OF FINANCIAL ASSETS CLASSIFIED AS HELD TO MATURIT Y
as at 31.12.
CHF million
Public corporations
Industrial enterprises
Financial institutions
Other
Total
Carrying amount
Fair value
2019
2020
2019
2020
6,637.3
6,228.8
8,197.0
7,904.4
1.6
826.6
10.0
–
736.0
10.0
1.8
911.2
10.8
–
814.6
10.6
7,475.5
6,974.8
9,120.7
8,729.6
227
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
12. MORTGAGES AND LOANS
as at 31.12.
CHF million
Mortgages and loans
carried at cost
Mortgages
Policy loans
Promissory notes and
registered bonds
Time deposits
Employee loans
Reverse repurchase
agreements
Other loans
Sub-total
Mortgages and loans
recognised at fair value
through profit or loss
Mortgages
Policy loans
Sub-total
Gross amount
Impairment
Carrying amount
Fair value
2019
2020
2019
2020
2019
2020
2019
2020
10,048.9
10,127.1
– 18.6
– 18.5
10,030.3
10,108.6
10,483.8
10,562.5
137.0
4,307.8
1,053.5
27.8
–
147.5
4,024.8
615.8
29.1
725.0
–
–
–
0.0
–
–
–
–
0.0
–
137.0
4,307.8
1,053.5
27.8
–
147.5
4,024.8
615.8
29.1
725.0
147.0
4,714.2
1,053.7
28.3
–
160.3
4,522.6
615.9
29.7
725.0
225.7
223.4
15,800.9
15,892.5
– 8.4
– 27.0
– 1.2
– 19.7
217.4
222.1
223.0
229.2
15,773.9
15,872.8
16,649.9
16,845.2
1,039.0
1,142.0
0.1
0.1
1,039.1
1,142.1
–
–
–
–
–
–
1,039.0
1,142.0
1,039.0
1,142.0
0.1
0.1
0.1
0.1
1,039.1
1,142.1
1,039.1
1,142.1
Mortgages and loans
16,840.0
17,034.6
– 27.0
– 19.7
16,812.9
17,014.9
17,689.0
17,987.3
228
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
IMPAIRMENT OF MORTGAGES AND LOANS
CHF million
Balance as at 1 January
Usage not recognised in profit or loss
Unused provisions reversed through profit or loss
Increases and additional provisions recognised in profit or loss
Disposal arising from change in scope of consolidation
Reclassification
Reclassification to non-current assets classified as held for sale
Currency translation
Balance as at 31 December
13. DERIVATIVE FINANCIAL INSTRUMENTS
as at 31.12.
CHF million
Derivative financial instruments for own account and at own risk
Derivative financial instruments for the account and at the risk
of life insurance policyholders and third parties
2019
2020
– 27.5
– 27.0
0.6
1.2
– 1.6
–
–
–
0.3
– 27.0
9.6
1.8
– 4.2
–
–
–
0.1
– 19.7
Fair value assets
Fair value liabilities
2019
2020
2019
2020
469.7
578.4
493.2
595.9
117.5
–
152.6
–
Derivative financial instruments as reported on the balance sheet
1,048.1
1,089.1
117.5
152.6
229
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
as at 31.12.
CHF million
Interest rate instruments
Forward contracts
Swaps
OTC options
Other
Traded options
Traded futures
Sub-total
Equity instruments
Forward contracts
OTC options
Traded options
Traded futures
Sub-total
Foreign currency instruments
Forward contracts
Swaps
OTC options
Traded options
Traded futures
Sub-total
Total
Of which: designated as fair value hedges
Of which: designated as cash flow hedges
Of which: designated as hedges
of a net investment in a foreign operation
Contract value
Fair value assets
Fair value liabilities
2019
2020
2019
2020
2019
2020
–
0.4
1,273.8
1,378.7
–
2.6
–
–
–
3.4
–
–
–
57.4
–
–
18.7
–
263.6
392.0
–
–
–
–
–
72.1
–
25.3
–
–
0.4
28.8
–
69.1
–
–
1,276.5
1,382.5
321.1
410.7
97.4
98.2
–
1,692.3
619.4
–
–
1,654.0
130.3
–
2,311.7
1,784.2
–
28.1
4.7
–
32.8
7,837.9
6,986.4
115.4
–
–
1,040.3
1,335.4
–
–
–
–
–
0.4
–
–
–
24.6
8.6
–
33.2
46.9
–
2.3
–
–
8,878.1
8,321.7
115.8
49.3
–
8.4
4.1
–
12.5
7.3
–
0.3
–
–
7.6
–
14.1
6.8
–
20.9
31.0
–
2.5
–
–
33.5
12,466.3
11,488.4
469.7
493.2
117.5
152.6
–
–
–
–
–
–
–
–
1,609.7
1,343.5
31.7
23.8
–
–
5.3
–
–
0.3
The contract value or notional amount is used for derivative financial instruments whose principal may be swapped at maturity
(options, futures and currency swaps) and for instruments whose principal is only nominally lent or borrowed (interest rate swaps).
The contract value or notional amount is disclosed in order to express the aggregate amount of derivative transactions in which
the Baloise Group is involved.
230
Gross amount
Impairment
Carrying amount
Fair value
2019
2020
2019
2020
2019
2020
2019
2020
376.9
368.4
281.4
658.3
295.6
664.0
– 1.3
– 1.5
– 2.7
– 1.6
375.7
366.8
375.7
366.8
– 1.2
– 2.8
279.9
655.6
294.4
661.2
281.9
657.6
295.7
662.6
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
14. RECEIVABLES
as at 31.12.
CHF million
Receivables carried
at cost
Receivables from
investments
Other receivables
Receivables
IMPAIRMENT OF RECEIVABLES
CHF million
Balance as at 1 January
Usage not recognised in profit or loss
Unused provisions reversed through profit or loss
Increases and additional provisions recognised in profit or loss
Disposal arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Currency translation
Balance as at 31 December
15. REINSURANCE ASSETS
CHF million
Reinsurers’ share of technical reserves as at 1 January
Change in unearned premium reserves
Benefits paid
Interest on and change in liability
Additions / disposals arising from change in scope of consolidation
Impairment
Reclassification to non-current assets classified as held for sale
Exchange differences
Reinsurers’ share of technical reserves as at 31 December
2019
2020
– 2.5
0.2
1.0
– 1.5
–
–
0.0
– 2.7
– 2.7
0.2
2.6
– 2.9
–
–
0.0
– 2.8
2019
2020
457.2
– 2.1
– 84.2
114.2
109.4
–
–
– 17.4
577.1
577.1
– 5.1
– 176.2
219.9
65.4
–
–
– 3.3
677.7
231
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
16. RECEIVABLES FROM REINSURERS
CHF million
Reinsurance deposits as at 1 January
Additions
Disposals
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets and disposal groups classified as held for sale
Exchange differences
Reinsurance deposits as at 31 December
Other reinsurance receivables as at 1 January
Additions
Disposals
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Exchange differences
Other reinsurance receivables as at 31 December
Impairment of receivables from reinsurers as at 1 January
Usage not recognised in profit or loss
Unused provisions reversed through profit or loss
Increases and additional provisions recognised in profit or loss
Disposal arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Currency translation
Impairment of receivables from reinsurers as at 31 December
2019
2020
11.6
1.0
– 0.2
–
–
– 0.4
11.9
30.5
82.2
– 83.1
10.2
–
– 0.5
39.3
– 0.1
–
0.1
0.0
–
–
0.0
0.0
11.9
1.9
– 0.1
–
–
0.0
13.7
39.3
314.3
– 250.0
1.7
–
0.0
105.2
0.0
–
0.0
– 1.1
–
–
0.0
– 1.1
Receivables from reinsurers as at 31 December
51.3
117.8
232
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17. EMPLOYEE BENEFITS
17.1 Receivables and liabilities arising from employee benefits
as at 31.12.
CHF million
Type of benefit
Short-term employee benefits
Post-employment benefits – defined contribution plans
Post-employment benefits – defined benefit plans
Other long-term employee benefits
Termination benefits
Total
Receivables from
employee benefits
Liabilities arising from
employee benefits
2019
2020
2019
2020
6.3
7.7
–
–
–
–
–
–
–
–
79.8
–
82.1
–
1,183.6
1,221.8
27.1
3.5
27.9
8.4
6.3
7.7
1,294.1
1,340.2
17.2 Post-employment benefits – defined benefit plans
The Baloise Group provides a range of pension benefits, which vary from country to country in line with local circumstances.
The funded – or partially funded – liabilities relate to the occupational pension provision offered in Switzerland and partially
in Belgium.
Switzerland has the largest plans. The employer and employee each contribute to these plans; the contributions are used to cover
benefits paid in the event of death or invalidity as well as being saved up to fund a pension. The employee has the option of
receiving all or part of the accumulated capital as a one-off payment. Some of the benefits granted in this way are governed by
binding statutory regulations that are applicable to all Swiss employers and, in particular, stipulate certain minimum benefits.
The pensions are the responsibility of separate legal entities (foundations) that are run by a committee consisting of employer
and employee representatives.
In other countries, the benefits are either granted by the employer directly or covered by an insurance policy that, as a rule,
is funded by the employer. Directly granted benefits are particularly relevant in Germany, where benefits are agreed between the
employer and the employee representatives.
The pension benefits on offer also comprise special benefits that the Baloise Group grants to retirees (especially those in
Switzerland). These benefits include subsidised mortgages. These benefits and concessions are classified as defined benefit
pension obligations under IAS 19.
233
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.2.1 Fair value of plan assets
CHF million
Balance as at 1 January
Interest rate effect
Return on plan assets
Employees’ savings and purchases
Exchange differences
Employer contribution
Employee contribution
Benefits paid
Cash flow between Baloise Group and plan assets
(excl. benefits paid to employees and employer contribution)
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Gains and losses on plan settlements
Balance as at 31 December
17.2.2 Partially funded liabilities under defined benefit plans
CHF million
Balance as at 1 January
Current service cost
Interest rate effect
Employees’ savings and purchases
Actuarial gains / losses on defined benefit obligations arising from
changes in financial assumptions
changes in demographic assumptions
experience adjustments
Exchange differences
Unrecognised past service cost
Benefits paid
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Gains and losses on plan settlements
Balance as at 31 December
234
2019
2020
2,514.3
2,711.7
19.5
148.2
47.7
– 1.2
64.6
39.2
10.3
52.9
37.7
0.1
66.5
41.7
– 147.7
– 173.0
–
–
27.1
16.4
–
–
–
–
2,711.7
2,764.2
2019
2020
– 2,821.6
– 3,046.7
– 91.2
– 22.0
– 47.7
– 166.0
15.8
– 22.5
1.6
1.7
147.7
– 42.4
–
–
– 100.0
– 11.6
– 37.7
– 56.1
–
13.9
0.0
1.2
173.0
– 16.4
–
–
– 3,046.7
– 3,080.4
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.2.3 Unfunded liabilities under defined benefit plans
CHF million
Balance as at 1 January
Current service cost
Interest rate effect
Employees’ savings and purchases
Actuarial gains / losses on defined benefit obligations arising from
changes in financial assumptions
changes in demographic assumptions
experience adjustments
Exchange differences
Unrecognised past service cost
Benefits paid
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Gains and losses on plan settlements
Balance as at 31 December
17.2.4 Net actuarial liabilities under defined benefit plans
CHF million
Fair value of plan assets
Present value of (partially) funded liabilities
Present value of unfunded liabilities
Effect of the asset ceiling
Net actuarial liabilities under defined benefit plans
2019
2020
– 792.4
– 848.6
– 14.2
– 12.0
–
– 15.7
– 7.0
–
– 90.7
– 70.3
– 2.1
– 1.2
29.1
– 1.1
35.9
–
–
–
–
0.9
1.8
–
33.3
–
–
–
– 848.6
– 905.5
31.12.2019
31.12.2020
2,711.7
2,764.2
– 3,046.7
– 3,080.4
– 848.6
– 905.5
–
–
– 1,183.6
– 1,221.8
235
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.2.5 Asset Allocation
CHF million
Cash and cash equivalents
Real estate
Equities and investment funds
publicly listed
not publicly listed
Fixed-interest assets
publicly listed
not publicly listed
Mortgages and loans
Derivatives
publicly listed
not publicly listed
Other
Fair value of plan assets
Of which: Bâloise Holding Ltd shares (fair value)
Of which: real estate leased to the Baloise Group
The line item ‘Equities and investment funds’ predominantly consists of fixed-income funds.
17.2.6 Expenses for defined benefit plans recognised in the income statement
CHF million
Current service cost
Regular employee contribution
Net interest cost
Unrecognised past service cost
Gains and losses on plan settlements
Expected return on reimbursement rights
31.12.2019
31.12.2020
39.7
554.5
37.6
594.1
1,393.6
228.7
1,457.5
97.0
96.5
–
371.3
–
– 4.2
31.5
104.6
7.8
390.6
–
1.5
73.5
2,711.7
2,764.2
35.0
–
31.5
–
2019
2020
– 105.4
– 115.7
39.2
– 14.6
0.6
–
–
41.7
– 8.3
1.2
–
–
Total expenses for defined benefit plans recognised in the income statement
– 80.1
– 81.0
236
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.2.7 Actuarial assumptions
Per cent
Discount rate
Expected wage and salary increases
Expected increase in pension benefits
Weighted annuity option take-up rate
Years
Average life expectancy of a 65-year-old woman
Average life expectancy of a 65-year-old man
2019
2020
0.5
1.4
0.3
70.7
24.6
22.1
0.3
1.4
0.3
70.5
24.5
22.1
When calculating liabilities and expenses for defined benefit plans, the Baloise Group is required to make actuarial and other
assumptions that are determined on a company-by-company and country-by-country basis. The assumptions shown above are
weighted averages.
17.2.8 Sensitivity analysis for liabilities under defined benefit plans
CHF million
Total defined benefit obligation
Discount rate plus 0.5 % age points
Discount rate minus 0.5 % age points
Expected wage and salary increases plus 0.5 % age points
Expected wage and salary increases minus 0.5 % age points
Expected pension benefits increases plus 0.5 % age points
Expected pension benefits increases minus 0.5 % age points
Mortality probabilities for 65-year-olds plus 10.0 % age points
Mortality probabilities for 65-year-olds minus 10.0 % age points
Weighted share of annuity option plus 10.0 % age points
31.12.2019
31.12.2020
3,895.3
3,985.9
– 284.0
– 287.7
308.6
31.0
– 38.9
206.5
– 49.1
325.6
32.8
– 30.6
224.2
– 51.9
– 101.8
– 100.3
101.7
16.3
112.5
22.1
The Baloise Group determines the sensitivities of liabilities under defined benefit plans by recalculating them using the same
models as used for the calculation of the effective value. In this calculation, only one parameter of the base scenario is changed.
Possible interaction between individual parameters is not taken into consideration. The effect resulting from various parameters
occurring simultaneously may vary from the sum total of individually determined differences.
The sensitivity is only calculated for the liability. A possible simultaneous impact on plan assets is not investigated.
237
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.2.9 Funding of plan benefits
The plan assets of the Swiss plans are funded jointly by the employer and employee. The amount of individual contributions
depends largely on an employee’s remuneration and age. Statutory regulations require employers to contribute a minimum of
50 per cent of the total contributions for part of the insured benefits.
17.2.10 Estimated employer contribution
The employer’s contribution for the following year can only be predicted with a limited degree of certainty. The Baloise Group
expects to pay employer contributions of approximately CHF 72.2 million for the 2021 financial year.
17.2.11 Maturity profile
The maturity profile of liabilities under pension plans differs depending on whether benefits are prospective or current entitlements.
For prospective benefit entitlements, the average expected remaining service period is 10.1 years; the average present value
factor for current benefit entitlements under pension commitments is 16.5 years.
17.3 Other long-term employee benefits
Benefits granted to current employees that are payable twelve months or more after the end of the financial year are accounted
for separately and according to specific rules. The accounting policies applied are similar to those used for pension liabilities,
except that actuarial gains and losses are recognised in profit or loss.
Long-service bonuses constitute the principal benefit paid. The present value of liabilities as at 31 December 2020 totalled
CHF 27.9 million (2019: CHF 27.1 million). There were no disposals of plan assets for long-term employee benefits. Benefits paid
out amounted to CHF 3.1 million (2019: CHF 2.1 million).
17.4 Share-based payment plans
For some time now, the Baloise Group has offered employees and management team members the chance to participate in various
plans under which shares are granted as part of their overall remuneration packages: the Employee Incentive Plan, the Share
Subscription Plan and the Share Participation Plan as well as Performance share units (PSU). The PSU programme and the
Employee Incentive Plan are equity-settled share-based payment plans. By contrast, the Share Subscription Plan and the Share
Participation Plan are share-based payment plans with a choice of settlement. The textual explanations of these individual
compensation programs are contained in Chapters 4,5 and 6 of the Compensation Report.
The cash-settled virtual participation programme for FRIDAY Insurance S.A. was dissolved ahead of schedule with effect from
31 December 2020 (see also chapter 17.4.5).
In 2020, a sum of CHF 34.6 million (2019: CHF 27.0 million) was recognised as an expense in profit or loss in connection with
the following share-based payment plans. The most important quantitative information is listed in tabular form below.
238
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.4.1 Employee Incentive Plan
EMPLOYEE INCENTIVE PLAN
Number of shares subscribed
Restricted until
Subscription price per share (CHF)
Value of shares subscribed (CHF million)
Fair value of subscribed shares on subscription date (CHF million)
Employees entitled to participate
Participating employees
Subscribed shares per participant (average)
17.4.2 Share Subscription Plan
SHARE SUBSCRIPTION PLAN FOR SENIOR MANAGERS (SSP) 1
Number of shares subscribed
Restricted until
Subscription price per share (CHF)
Value of shares subscribed (CHF million)
Fair value of subscribed shares on subscription date (CHF million)
Employees entitled to participate
Participating employees
SSP portion of variable remuneration
2019
2020
192,501
209,951
31 Aug 2022
31 Aug 2023
88.50
17.0
32.5
3,301
2,218
86.8
71.70
15.1
29.5
3,372
2,370
88.6
2019
23,736
2020
25,000
28 Feb 2022
28 Feb 2023
129.42
158.40
3.1
3.9
952
112
14 %
4.0
3.9
1,012
118
14 %
From 2020, members of the Board of Directors will receive shares via a dedicated share subscription plan, which is now presented separately in the table below. The presentation of the
prior-year figures has been adjusted accordingly.
1 Members of the management team entitled to receive shares under this plan include the most senior level of management across the entire Group and the middle management tier in
Switzerland.
SHARE SUBSCRIPTION PLAN FOR THE BOARD OF DIRECTORS
Number of shares subscribed
Restricted until 1
Subscription price per share (CHF)
Value of shares subscribed (CHF million)
Fair value of subscribed shares on subscription date (CHF million)
Participating members of the Board of Directors
1 The shares granted to the Chairman of the Board of Directors are subject to a closed period of five years instead of three. This means that these shares are restricted until 29 February
2024 and 30 May 2025 respectively.
2019
4,346
2020
5,156
28 Feb 2022
30 May 2023
129.42
122.94
0.6
0.7
9
0.6
0.7
10
239
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
17.4.3 Share Participation Plan
SHARE PARTICIPATION PLAN (SPP)
Number of shares subscribed 1
Restricted until
Subscription price per share 2 (CHF)
Value of shares subscribed 2 (CHF million)
Fair value of subscribed shares on subscription date (CHF million)
Employees entitled to participate
Participating employees
SPP portion of variable remuneration 3
2019
84,328
2020
80,187
28 Feb 2022
28 Feb 2023
125.44
156.46
10.6
13.7
933
111
7 %
12.5
12.4
989
116
6 %
1 Including shares financed by loans.
2 Net of the discounted dividend right over three years.
3 Excluding shares received by the Chairman of the Board of Directors because his share allocation is not based on any variable remuneration.
17.4.4 Performance share units
The value of PSUs is exposed to market risk until the end of the vesting period and may, of course, fluctuate significantly, as shown
in the table below:
PERFORMANCE SHARE UNIT
(PSU) PLAN
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
PSUs granted
PSUs converted
Change in value
Date
Price (CHF) 1
Date
Multiplier
Price (CHF) 1
Value (CHF)2
1 Jan 2009
1 Jan 2010
1 Jan 2011
1 Mar 2012
1 Mar 2013
1 Mar 2014
1 Mar 2015
1 Mar 2016
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
82.40
86.05
91.00
71.20
84.50
113.40
124.00
126.00
130.70
149.20
163.00
154.90
1 Jan 2012
1 Jan 2013
1 Jan 2014
1 Mar 2015
1 Mar 2016
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
1 Mar 2021
1 Mar 2022
1 Mar 2023
0.64
0.58
0.77
1.21
1.50
1.05
1.34
1.32
1.34
1.28 4
1.22 4
1.11 4
64.40
78.50
113.60
124.00
126.00
130.70
149.20
163.00
154.90
157.50 4
157.50 4
157.50 4
41.22
45.53
87.47
150.04
189.00
137.24
199.93
215.86
207.57
201.60 4
192.50 4
175.00 4
3
– 50 %
– 47 %
– 4 %
111 %
124 %
21 %
61 %
71 %
59 %
35 % 4
18 % 4
13 % 4
1 Price = price of Baloise shares at the PSU grant date or conversion date.
2 Value = value of one PSU at the conversion date (share price at the conversion date times the multiplier).
3 Change in value = difference between the value at the conversion date (multiplier times the share price at the conversion date) and the share price at the grant date, expressed as a
percentage of the share price at the grant date; example of the PSU plan in 2009: ([{0.64*64.40} –82.40] / 82.40) * 100 = –50 %.
4 Interim measurement as at 31 December 2020.
240
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Measurement of the PSU at their issue date is based on a Monte Carlo simulation, which calculates a present value for the payout
expected at the end of the vesting period. This measurement incorporates the following parameters:
▸
▸
▸
interest rate of 1 per cent;
the volatilities of all shares in the peer group and their correlations with each other (measured over a three-year track record);
empirical data on how long eligible programme participants remain with the Company.
PERFORMANCE SHARE UNITS (PSU)
Employees entitled to participate at launch of programme
Number of allocated PSU
Of which: expired (departures in 2018)
Number of active PSUs as at 31 December 2018
Of which: expired (departures in 2019)
Number of active PSUs as at 31 December 2019
Of which: expired (departures in 2020)
Number of active PSUs as at 31 December 2020
Value of allocated PSUs on issue date (CHF million)
PSU expense incurred by the Baloise Group for 2018 (CHF million)
PSU expense incurred by the Baloise Group for 2019 (CHF million)
PSU expense incurred by the Baloise Group for 2020 (CHF million)
Plan 2018
Plan 2019
Plan 2020
67
67
71
33,237
32,711
32,321
–
33,237
– 375
–
–
– 252
32,862
32,459
– 276
– 925
32,586
31,534
5.0
1.2
1.7
1.7
5.5
–
1.4
1.8
–
–
–
–
– 407
31,914
5.1
–
–
1.3
17.4.5 Phantom Stock Option Program
FRIDAY Insurance S.A., a subsidiary of Bâloise Luxembourg Holding S.A., offers its employees a Phantom Stock Option Programme
(PSOP). This (cash-settled) virtual participation programme was introduced in 2017. It has been dissolved early with effect from
31 December 2020 and will be replaced with a new equity-settled plan from 1 January 2021.
The shares in the PSOP are calculated pro rata temporis as at 31 December 2020 and valued on the basis of the most recent
enterprise valuation of FRIDAY prepared by an external service provider. The resulting amount will be paid out in three tranches
by mid-2023. Due to the early dissolution of the plan, the total cost of employee services received must be recognised in the
current year. In 2020, a total of CHF 6.1 million was paid out to participants in the plan.
PHANTOM STOCK OPTION PROGRAM
Participating employees
Total liabilities arising from the allocated PSOPs (CHF million)
Total liabilities arising from the vested PSOPs (CHF million)
PSOP expense (CHF million)
2019
40
0.5
0.1
0.4
2020
36
3.5
3.5
9.0
241
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
18. DEFERRED TAXES
18.1 Deferred tax assets and liabilities
DEFERRED TA X ASSETS
2019
CHF million
Financial assets
Other investments
Other comprehensive income
Tax credits and losses carried forward
Insurance receivables
Technical reserves
Insurance liabilities
Liabilities arising from banking business
and financial contracts
Liabilities arising from employee benefits
Other
Total
2020
CHF million
Financial assets
Other investments
Other comprehensive income
Tax credits and losses carried forward
Insurance receivables
Technical reserves
Insurance liabilities
Liabilities arising from banking business
and financial contracts
Liabilities arising from employee benefits
Other
Total
242
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassi-
fication
in accordance
with IFRS 5
Exchange
differences
Balance
as at
31 December
34.7
25.2
94.1
68.4
6.6
568.0
726.0
132.9
55.9
37.3
1,749.1
3.0
– 2.4
–
– 7.2
– 1.8
– 94.4
281.5
71.6
– 5.3
– 0.7
244.3
–
–
6.2
–
–
–
–
–
–
–
6.2
0.0
–
–
0.0
–
– 1.1
–
–
–
24.0
22.9
–
–
–
–
–
–
–
–
–
–
–
– 1.3
0.0
– 1.6
– 1.0
– 0.1
– 12.4
– 32.2
– 4.8
– 1.7
– 1.0
36.4
22.8
98.7
60.2
4.7
460.1
975.3
199.7
49.0
59.6
– 56.1
1,966.4
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassi-
fication
in accordance
with IFRS 5
Exchange
differences
Balance
as at
31 December
36.4
22.8
98.7
60.2
4.7
460.1
975.3
199.7
49.0
59.6
1,966.4
– 6.6
25.2
–
2.3
8.5
– 24.4
36.5
47.8
0.7
– 19.0
70.9
–
–
11.6
–
–
–
–
–
–
–
11.6
–
–
–
–
–
–
–
–
–
17.2
17.2
–
–
–
–
–
–
–
–
–
–
–
– 0.2
0.0
0.0
0.0
0.0
– 1.3
– 2.5
– 0.2
– 0.1
– 0.2
– 4.6
29.7
48.0
110.2
62.4
13.2
434.4
1,009.3
247.3
49.5
57.6
2,061.6
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
DEFERRED TA X LIABILITIES
2019
CHF million
Depreciable assets
Other intangible assets
Deferred acquisition costs
Long-term equity investments
Investment property
Financial assets
Other investments
Other comprehensive income
Insurance receivables
Technical reserves
Other
Total
2020
CHF million
Depreciable assets
Other intangible assets
Deferred acquisition costs
Long-term equity investments
Investment property
Financial assets
Other investments
Other comprehensive income
Insurance receivables
Technical reserves
Other
Total
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassi-
fication
IFRS 5
Exchange
differences
Balance
as at
31 December
2.7
6.0
230.3
59.1
367.0
81.4
68.6
164.2
1.4
1,541.4
61.4
2,583.5
5.2
– 0.7
13.4
– 8.9
– 35.2
– 57.4
– 15.4
–
–
–
–
–
–
–
–
169.5
– 0.4
233.4
– 15.1
119.0
–
–
1.1
170.6
0.0
0.4
– 1.1
–
–
–
–
0.0
–
–
0.0
– 0.7
–
–
–
–
–
–
–
–
–
–
–
–
– 0.1
– 0.2
– 7.5
– 0.4
– 2.7
– 0.1
– 1.4
– 6.4
0.0
– 45.9
– 0.2
– 64.8
7.8
5.5
235.1
49.9
329.1
23.9
51.9
327.3
0.9
1,728.9
47.2
2,807.5
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassi-
fication
IFRS 5
Exchange
differences
Balance
as at
31 December
7.8
5.5
235.1
49.9
329.1
23.9
51.9
327.3
0.9
1,728.9
47.2
2.6
0.1
28.8
26.2
27.3
– 2.9
– 6.2
–
1.1
32.0
0.1
–
–
–
–
–
–
–
54.3
–
–
–
2,807.5
109.0
54.3
–
–
–
–
–
–
–
–
–
8.3
–
8.3
–
–
–
–
–
–
–
–
–
–
–
–
0.0
0.0
– 0.4
0.0
– 0.2
0.1
– 0.3
– 0.2
0.0
– 4.0
0.0
– 5.0
10.4
5.6
263.6
76.1
356.2
21.1
45.4
381.4
2.0
1,765.1
47.3
2,974.1
The Baloise Group reports its deferred taxes on a net basis. Deferred tax assets and liabilities are offset against each other in
cases where the criteria for such offsetting have been met. This is usually the case if the tax jurisdiction, the taxable entity and
the type of taxation are identical.
243
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
The Baloise Group had recognised deferred tax assets on tax loss carryforwards totalling CHF 219.5 million as at 31 December
2020 (2019: CHF 215.4 million) that will expire after five years or more.
The Baloise Group had a tax credit of CHF 126.1 million as at 31 December 2020 (2019: CHF 126.1 million) on which no deferred
tax assets had been recognised because the offsetting criteria were not met.
No deferred tax assets had been recognised on tax loss carryforwards amounting to CHF 302.3 million as at 31 December
2020 (2019: CHF 269.5 million) because the relevant offsetting criteria had not been met. Of this total, CHF 0.4 million will expire
after one year, CHF 29.2 million after two to four years and CHF 272.7 million will expire after five years or more.
31.12.2019
31.12.2020
1,966.4
2,061.6
– 2,807.5
– 2,974.1
– 841.1
97.4
– 912.6
87.9
– 938.5
– 1,000.4
31.12.2019
31.12.2020
46.8
51.2
52.0
68.0
109.7
– 7.0
320.7
47.6
30.9
57.9
52.4
45.1
– 7.6
226.3
18.2 Deferred taxes
CHF million
Deferred tax assets
Deferred tax liabilities
Total (net)
Of which: recognised as deferred tax assets
Of which: recognised as deferred tax liabilities
19. OTHER ASSETS
CHF million
Accrued income
Tax credits indirect taxes (withholding tax etc.)
Prepaid insurance benefits
Development properties
Other assets
Impairments
Other assets
244
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
20. NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
In the year under review, no material events took place that satisfy the criteria for IFRS 5.
In the first half of 2019, it was announced that investment properties held by Baloise Life Ltd and Basler Insurance Ltd would
be transferred to the Swiss Property Fund. The transfer was executed in September 2019.
21. SHARE CAPITAL
2019
Balance as at 1 January
Purchase / sale of treasury shares
Capital increases
Share buy-back and cancellation
Balance as at 31 December
2020
Balance as at 1 January
Purchase / sale of treasury shares
Capital increases
Share buy-back and cancellation
Balance as at 31 December
Number of
treasury shares
Number of
shares in
circulation
Number of
shares issued
Share capital
(CHF million)
2,218,134
46,581,866
48,800,000
1,020,473
– 1,020,473
–
–
–
–
–
–
–
3,238,607
45,561,393
48,800,000
4.9
–
–
–
4.9
Number of
treasury shares
Number of
shares in
circulation
Number of
shares issued
Share capital
(CHF million)
3,238,607
45,561,393
48,800,000
511,846
– 511,846
–
–
–
–
–
–
–
3,750,453
45,049,547
48,800,000
4.9
–
–
–
4.9
The share capital of Bâloise Holding Ltd totals CHF 4.9 million and is divided into 48,800,000 registered, fully paid-up registered
shares with a par value of CHF 0.10 each (2019: CHF 0.10). As far as individuals, legal entities and partnerships are concerned,
entry in the share register with voting rights is limited to 2 per cent of the registered share capital entered in the commercial
register. The Baloise Group buys and sells its own shares for employee share ownership programmes.
The Annual General Meeting held on 24 April 2020 voted in favour of a total dividend distribution of CHF 312.3 million
for the 2019 financial year. This amounts to a gross dividend of CHF 6.40 per share. Excluding the treasury shares held by
Bâloise Holding Ltd at the time that the dividend was paid, the total distribution effectively amounted to CHF 287.4 million.
A cumulative total of 3,000,000 shares in Bâloise Holding Ltd were repurchased for a total of CHF 481.2 million under the
three-year share buy-back programme, which ended on 25 March 2020.
For the 2020 financial year, a total dividend distribution of CHF 312.3 million will be proposed for approval at the Annual
General Meeting on 30 April 2021. This amounts to a gross dividend of CHF 6.40 per share. The dividend distribution will be rec-
ognised upon approval at the Annual General Meeting.
245
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22. TECHNICAL RESERVES (GROSS)
CHF million
Unearned premium reserves (gross)
Claims reserve including claims handling costs (gross)
Other technical reserves
Technical reserves (non-life)
Actuarial reserves (gross)
Policyholders’ dividends credited and provisions for future policyholders’ dividends (gross)
31.12.2019
31.12.2020
743.2
5,658.6
75.9
845.5
5,895.6
93.2
6,477.7
6,834.3
38,107.8
38,026.9
3,747.8
3,723.8
41,855.6
41,750.7
48,333.3
48,585.0
Technical reserves (life)
Technical reserves (gross)
22.1 Technical reserves (non-life)
CHF million
Unearned premium reserves
Claims reserve
Provision for claims handling costs
Gross
Reinsurance
assets
Net
Gross
Reinsurance
assets
31.12.2019
743.2
5,190.1
468.4
0.9
744.1
–
–
–
–
845.5
5,386.9
508.7
2.2
–
–
Net
31.12.2020
847.7
–
–
Claims reserve including claims handling costs
5,658.6
– 538.0
5,120.5
5,895.6
– 636.7
5,258.9
Other technical reserves
75.9
–
75.9
93.2
–
93.2
Total technical reserves (non-life)
6,477.7
– 537.1
5,940.6
6,834.3
– 634.5
6,199.8
246
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.1.1 Maturity structure of technical reserves
CHF million
Unearned premium reserves
Up to 1 year
More than 1 year
No determinable residual term
Total unearned premium reserves
Gross
Reinsurance
assets
Net
Gross
Reinsurance
assets
31.12.2019
692.3
7.4
43.6
743.2
0.7
0.2
–
0.9
692.9
7.6
43.6
744.1
790.4
7.9
47.2
845.5
1.9
0.3
–
2.2
Claims reserve including claims handling costs
Up to 1 year
More than 1 year
No determinable residual term
Total claims reserve including claims handling costs
883.1
3,692.6
1,082.9
5,658.6
– 56.1
– 90.9
– 391.0
– 538.0
827.0
3,601.7
691.9
5,120.5
919.0
3,922.4
1,054.2
5,895.6
– 89.5
– 105.5
– 441.7
– 636.7
Net
31.12.2020
792.3
8.2
47.2
847.7
829.5
3,816.9
612.5
5,258.9
All figures relating to maturities are based on best estimates. The line item “No determinable residual term” mainly comprises
old-age health insurance reserves and annuity reserve funds.
22.1.2 Unearned premium reserves
CHF million
Balance as at 1 January
Netted premiums
Less: premiums earned
during the reporting period
Additions arising from acquisition
of policy portfolios
and insurance companies
Disposals arising from sale of policy
portfolios and insurance companies
Reclassification to non-current assets
classified as held for sale
Exchange differences
Balance as at 31 December
Gross
Reinsurance
assets
Gross
Reinsurance
assets
Net
2019
Net
2020
657.0
– 1.2
655.9
743.2
0.9
744.1
3,542.1
– 212.8
3,329.4
3,802.5
– 224.9
3,577.6
– 3,511.0
214.9
– 3,296.1
– 3,743.4
230.0
– 3,513.5
77.0
0.0
77.0
41.7
– 3.9
37.8
– 0.7
–
– 21.2
743.2
–
–
0.0
0.9
– 0.7
–
– 21.2
744.1
–
–
1.5
845.5
–
–
0.1
2.2
–
–
1.6
847.7
Apart from the actual unearned premium reserves, this item includes health insurance reserves for old age and deferred unearned
premiums.
247
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.1.3 Other technical reserves
CHF million
Balance as at 1 January
Less: expenditures during
the reporting period
Additional provisions recognised
and unused provisions reversed
through profit or loss
Additions arising from acquisition
of policy portfolios
and insurance companies
Disposals arising from sale of policy
portfolios and insurance companies
Reclassification to non-current assets
classified as held for sale
Exchange differences
Balance as at 31 December
Gross
Reinsurance
assets
74.5
– 25.6
–
0.1
Net
2019
74.5
– 25.5
Gross
Reinsurance
assets
75.9
– 30.3
–
0.3
Net
2020
75.9
– 30.0
20.1
– 0.1
20.0
47.6
– 0.3
47.3
8.3
– 0.4
–
– 1.0
75.9
–
–
–
–
–
8.3
– 0.4
–
– 1.0
75.9
–
–
–
0.0
93.2
–
–
–
–
–
–
–
–
0.0
93.2
248
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.1.4 Claims reserve (including claims handling costs)
CHF million
Balance as at 1 January (gross)
Reinsurers’ share
Balance as at 1 January (net)
Claims incurred (including claims handling costs)
For the reporting period
For previous years
Total
Payments for claims and claims handling costs
For the reporting period
For previous years
Total
Other changes
Additions / disposals arising from changes in scope of consolidation
Reclassification to non-current assets classified as held for sale
Exchange differences
Total
Balance as at 31 December (net)
Reinsurers’ share
Balance as at 31 December (gross)
2019
2020
5,426.0
– 423.6
5,002.4
5,658.6
– 538.0
5,120.5
2,081.7
– 180.1
1,901.6
2,121.8
– 40.9
2,080.9
– 1,060.4
– 1,060.9
– 1,046.1
– 1,112.7
– 2,106.5
– 2,173.6
425.4
–
– 102.4
323.0
237.4
–
– 6.3
231.1
5,120.5
5,258.9
538.0
636.7
5,658.6
5,895.6
The Baloise Group pays particular attention to cases of environmental pollution involving landfill sites, refuse, asbestos or any
other materials harmful to human beings or the environment.
The relevant net reserves included in the total amounted to CHF 8.6 million at the end of 2020 (2019: CHF 9.4 million).
The net reserves for the hospital liability business in Germany amount to CHF 246.3 million (2019: CHF 258.7 million) and
are also included in the total.
249
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.2 Technical reserves (life)
CHF million
Actuarial reserves from traditional life insurance contracts 1
Actuarial reserves from unit-linked life insurance contracts
Reserves for final policyholders’ dividends
Unearned revenue reserve
Structure of actuarial reserves (life)
Policyholders’ dividends credited and provisions for future policyholders’ dividends
Total technical reserves (life)
1 The actuarial reserves include unearned premium reserves and claims reserves.
31.12.2019
31.12.2020
34,253.7
34,092.8
3,334.1
3,421.0
159.2
360.7
144.2
368.8
38,107.8
38,026.9
3,747.8
3,723.8
41,855.6
41,750.7
250
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.2.1 Maturity structure of technical reserves
CHF million
Actuarial reserves from non-unit-linked life insurance contracts
Up to 1 year
1 to 5 years
5 to 10 years
More than 10 years
No determinable residual term
Business from Swiss occupational pension plans 1
Total actuarial reserves from non-unit-linked life insurance contracts
Actuarial reserves from unit-linked life insurance contracts
Up to 1 year
1 to 5 years
5 to 10 years
More than 10 years
No determinable residual term
Total actuarial reserves from unit-linked life insurance contracts
Policyholders’ dividends credited
Up to 1 year
1 to 5 years
5 to 10 years
More than 10 years
No determinable residual term
Total policyholders’ dividends credited
Provisions for future policyholders’ dividends
Up to 1 year
No determinable residual term
Total provisions for future policyholders’ dividends
31.12.2019
31.12.2020
1,073.0
3,114.8
3,284.4
5,707.4
9,576.4
1,050.0
3,113.8
3,321.3
5,526.6
9,977.0
11,497.8
11,103.9
34,253.7
34,092.8
159.4
362.7
330.8
420.0
2,061.3
3,334.1
65.7
196.9
183.4
226.7
142.7
815.5
219.8
357.9
309.6
430.3
2,103.5
3,421.0
55.0
184.7
179.6
189.2
131.2
739.8
111.7
2,820.6
2,932.3
100.7
2,883.3
2,984.0
1 The Swiss pensions business is disclosed separately owing to its specific features. It comprises group contracts which may be cancelled annually by either party, whereas the coverage
period for the individuals enrolled is significantly longer.
All figures relating to maturities are based on the residual terms of contracts. The line item “No determinable residual term” mainly
comprises deferred and current annuities.
251
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.2.2 Actuarial reserves from non-unit-linked life insurance contracts
CHF million
Balance as at 1 January
Change in actuarial reserves
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification to non-current assets classified as held for sale
Exchange differences
Balance as at 31 December
Of which: for DPF business
Of which: for non-DPF business
The actuarial reserves include unearned premium reserves and claims reserves.
The actuarial reserves for assumed business (inward reinsurance) as at 31 December 2020 came to CHF 13.1 million (31 December 2019: CHF 11.4 million).
22.2.3 Actuarial reserves from unit-linked life insurance contracts
CHF million
Balance as at 1 January
Additions
Disposals
Fees
Interest on and change in liabilities
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification1
Reclassification to non-current assets classified as held for sale
Exchange differences
Balance as at 31 December
2019
2020
33,372.9
34,253.7
726.5
511.9
– 2.3
–
– 131.2
–
–
–
– 355.2
– 29.8
34,253.7
34,092.8
33,759.7
33,753.8
494.0
338.9
2019
2020
2,833.5
274.5
– 228.9
– 6.1
477.9
1.1
– 47.1
113.1
–
– 84.0
3,334.1
239.9
– 168.6
– 5.7
19.4
9.5
0.0
–
–
– 7.4
3,334.1
3,421.0
1 Insurance contracts previously recognised as unit-linked IAS 39 policies are now recognised as unit-linked IFRS 4 policies due to changes to the contractual provisions.
252
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.2.4 Reserve for final policyholders’ dividends
CHF million
Balance as at 1 January
Adjustment arising from unrealised gains and losses as at 1 January (shadow accounting)
Interest on and change in liability
Final policyholders’ dividends paid
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification to non-current assets classified as held for sale
Adjustment arising from unrealised gains and losses as at 31 December (shadow accounting)
Exchange differences
Balance as at 31 December
2019
2020
164.5
– 3.4
13.8
– 15.1
–
– 2.9
–
6.0
– 3.8
159.2
159.2
– 6.0
1.6
– 14.5
–
–
–
4.4
– 0.4
144.2
Final policyholders’ dividends, which are only paid upon contract expiry, are funded and accrued over the duration of the policy in proportion to the profits attributable to the contract.
22.2.5 Unearned revenue reserve
CHF million
Balance as at 1 January
Reserved during the reporting period
Change in balance
Change due to unrealised gains and losses on investments (shadow accounting)
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification to non-current assets classified as held for sale
Exchange differences
Balance as at 31 December
2019
2020
369.3
16.8
8.8
– 1.6
–
– 19.6
–
– 12.9
360.7
360.7
13.4
– 4.3
– 0.1
–
–
–
– 1.0
368.8
253
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
22.2.6 Policyholders’ dividends credited and reserves for future policyholders’ dividends
CHF million
Policyholders’ dividends credited as at 1 January
Dividends credited to policyholders during the reporting period
Policyholders’ dividends paid
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification to non-current assets and disposal groups classified as held for sale
Exchange differences
Balance as at 31 December
Provisions for future policyholders’ dividends as at 1 January
Adjustment arising from unrealised gains and losses as at 1 January
Additions
Withdrawals
Change in measurement differences between IFRS and national accounting standards
recognised in profit or loss
Adjustment arising from unrealised gains and losses as at 31 December (shadow accounting)
Additions arising from acquisition of policy portfolios and insurance companies
Disposals arising from sale of policy portfolios and insurance companies
Reclassification to non-current assets classified as held for sale
Exchange differences
Balance as at 31 December
Policyholders’ dividends credited and provisions for future policyholders’ dividends
as at 31 December
2019
2020
913.5
37.8
815.5
35.0
– 114.1
– 108.3
–
–
–
– 21.7
815.5
2,764.0
– 426.1
149.9
– 122.2
– 219.6
827.8
0.4
– 2.7
–
– 39.1
–
–
–
– 2.3
739.8
2,932.3
– 827.8
95.0
– 125.9
37.5
875.7
–
–
–
– 2.7
2,932.3
2,984.0
3,747.8
3,723.8
254
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
23. LIABILITIES ARISING FROM BANKING BUSINESS AND FINANCIAL CONTRACTS
as at 31.12.
CHF million
With discretionary participation features (DPFs)
Financial contracts with discretionary participation features (DPFs)1
Sub-total
Measured at amortised cost
Liabilities to banks
Repurchase agreements
Liabilities arising from time deposits
Loans
Mortgages
Savings and customer deposits
Medium-term bonds
Mortgage-backed bonds
Other financial contracts
Sub-total
Carrying amount
Fair value
2019
2020
2019
2020
3,940.1
3,940.1
4,074.7
4,074.7
395.7
300.0
–
7.8
33.7
568.8
50.0
–
9.6
33.3
–
–
395.8
300.0
–
7.8
33.7
–
–
569.2
50.0
–
9.6
33.3
5,215.0
5,462.8
5,264.1
5,532.9
87.4
76.9
90.0
79.2
1,518.9
1,722.4
1,596.6
1,811.2
35.3
0.4
35.3
0.4
7,593.8
7,924.2
7,723.4
8,085.7
Recognised at fair value through profit or loss (designated)
Other financial contracts
Sub-total
13,006.5
13,284.6
13,006.5
13,006.5
13,284.6
13,006.5
13,284.6
13,284.6
Total liabilities arising from banking business and financial contracts
24,540.4
25,283.5
–
–
1 There are currently no internationally accepted mathematical methods available for determining the fair value of financial contracts with discretionary participation features (DPFs).
Savings deposits and customer deposits essentially consist of savings accounts, business accounts and deposit accounts held
by Swiss banking clients. The mortgage-backed bonds reported have all been issued by Pfandbriefbank schweizerischer
Hypothekarinstitute AG.
The other financial contracts designated as at fair value through profit or loss largely relate to the life insurance liability
arising from investment-linked life insurance contracts involving little or no transfer of risk. The year-on-year change in this liability
consists entirely of the funds flowing into and out of the pertinent investment portfolio, the latter’s market-related price fluctuations
and exchange-rate movements.
255
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
24. FINANCIAL LIABILITIES
CHF million
Senior and hybrid debt
Leasing liabilities
Total
24.1 Senior debt
CHF million
Balance as at 1 January
Issue price of newly issued bonds
Disposals and repayments
Interest expenses
Borrowing costs paid
Accrued borrowing costs
Interest costs (sub-total)
2019
2020
2,325.0
2,324.4
43.0
38.9
2,368.0
2,363.3
Senior debt
Hybrid debt
Total
Senior debt
Hybrid debt
1,247.4
754.5
– 175.0
26.9
– 28.4
2.1
0.6
497.1
–
–
10.1
– 9.7
–
0.5
2019
1,744.5
754.5
– 175.0
37.0
– 38.1
2.1
1.0
1,827.5
299.7
– 300.0
23.6
– 27.0
2.6
– 0.8
497.5
–
–
10.1
– 9.7
–
0.5
Total
2020
2,325.0
299.7
– 300.0
33.8
– 36.7
2.6
– 0.3
Balance as at 31 December
1,827.5
497.5
2,325.0
1,826.4
498.0
2,324.4
The presentation of senior debt has been modified to allow for a distinction between senior bonds and hybrid bonds. The presentation of the prior-year figures has been adjusted
accordingly.
On 16 July 2020, the Baloise Group issued two bonds with a cumulative volume of CHF 300 million. The two bonds were issued
with maturity dates of December 2026 (0.250 per cent, CHF 175 million, ISIN CH0553331817) and December 2030 (0.500 per cent,
CHF 125 million, ISIN CH0553331825) respectively. The income from the bond issue will be used for general company purposes,
primarily to refinance the bond that matured in October 2020.
On 4 February 2021, Bâloise Holding Ltd placed an additional bond issue on behalf of the Baloise Group with a total volume
of CHF 250 million and a coupon of 0.15 per cent (maturity period: 2021–2031, ISIN CH0593641068) as part of its funding activ-
ities.
256
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
TERMS & CONDITIONS GOVERNING DEBT OUTSTANDING AS AT 31.12.2020
(BONDS BÂLOISE HOLDING LTD AND BALOISE LIFE LTD)
Issuer
Face value
(CHF million)
Interest rate
Redemption value
Year of issue
Repayment date
ISIN
Issuer
Face value
(CHF million)
Interest rate
Redemption value
Year of issue
Repayment date
ISIN
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
250
150
225
150
Baloise
Life Ltd
300
Baloise
Life Ltd
200
Bâloise
Holding Ltd
200
3.000 %
2.000 %
1.750 %
1.125 %
1.750 %
2.200 %
0.500 %
100 %
2011
100 %
2012
100 %
2013
100 %
2014
100 %
2017
100 %
2017
100 %
2019
07.07.2021
12.10.2022
26.04.2023
19.12.2024
perpetual
19.06.2048
28.11.2025
CH0131804616
CH0194695083
CH0200044821
CH0261399064
CH0379610998
CH0379611004
CH0458097976
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
200
100
125
125
175
125
0.000 %
0.000 %
0.000 %
variable
0.250 %
0.500 %
100 %
2019
100 %
2019
100 %
2019
100 %
2019
100 %
2020
100 %
2020
23.09.2022
25.09.2026
25.09.2029
25.03.2021
16.12.2026
16.12.2030
CH0496692960
CH0496692978
CH0496692986
CH0496692994
CH0553331817
CH0553331825
24.2 Leasing liabilities
CHF million
Balance as at 1 January
Additions
Additions arising from change in scope of consolidation
Disposals
Disposals arising from change in scope of consolidation
Interests expenses
Cash outflow due to redemption
Exchange differences
Balance as at 31 December
2019
2020
52.9
7.5
0.4
– 0.9
– 0.4
0.7
– 16.7
– 0.5
43.0
43.0
14.5
–
– 2.2
–
0.5
– 16.9
0.0
38.9
257
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
25. NON-TECHNICAL PROVISIONS
CHF million
Balance as at 1 January
Addition arising from change
in scope of consolidation
Disposal arising from change
in scope of consolidation
Reclassification
Reclassification to non-current assets
classified as held for sale
Increases and additional provisions recognised
in profit or loss
Unused provisions reversed through profit or loss
Usage not recognised in profit or loss
Unwinding of discount
Exchange differences
Balance as at 31 December
Restructuring
Other
Total
Restructuring
Other
23.4
–
–
–
–
40.3
0.7
–
–
–
2019
63.7
0.7
–
–
–
18.5
34.4
52.9
–
–
–
–
–
–
12.9
–
7.3
15.1
22.4
3.7
15.1
– 0.2
– 11.3
–
– 0.7
18.5
– 18.8
– 2.6
–
– 0.2
34.4
– 19.0
– 13.9
–
– 0.9
52.9
– 0.2
– 8.7
–
– 0.1
13.2
– 15.7
– 2.5
–
0.0
44.3
Total
2020
–
–
12.9
–
18.8
– 15.9
– 11.1
–
– 0.1
57.5
The balance shown for other non-technical provisions includes typical amounts for legal advice and litigation risks. The restructuring
provisions largely relate to the German entities. The other non-technical provisions largely relate to the Swiss entities.
The transfer of variable annuity products within the Group in 2020 necessitated a harmonisation of the way they are recognised.
As a result, reserves in an amount of CHF 12.9 million that are linked to financial contracts have been reclassified from derivative
obligations to non-technical provisions.
26. INSURANCE LIABILITIES
CHF million
Liabilities to policyholders
Liabilities to brokers and agents
Liabilities to insurance companies
Other insurance liabilities
Total insurance liabilities
258
31.12.2019
31.12.2020
1,371.8
1,312.9
159.5
251.8
24.4
182.0
304.7
80.4
1,807.5
1,879.9
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
Notes to the consolidated income statement
27. PREMIUMS EARNED AND POLICY FEES
CHF million
Gross premiums written and policy fees
Change in unearned premium reserves
Premiums earned and policy fees (gross)
Reinsurance premiums ceded
Reinsurers’ share of change
in unearned premium reserves
Total premiums earned
and policy fees (net)
Non-Life
Life
3,542.1
– 31.2
3,511.0
– 212.8
– 2.1
4,060.3
–
4,060.3
– 26.6
–
Total
2019
7,602.4
– 31.2
7,571.3
– 239.4
– 2.1
Non-Life
Life
3,802.5
– 59.1
3,743.4
– 224.9
– 5.1
3,291.3
–
3,291.3
– 38.1
–
Total
2020
7,093.8
– 59.1
7,034.8
– 262.9
– 5.1
3,296.1
4,033.7
7,329.8
3,513.5
3,253.3
6,766.8
28. INCOME FROM INVESTMENTS FOR OWN ACCOUNT AND AT OWN RISK
CHF million
Investment property
Financial assets of an equity nature
Available for sale
Recognised at fair value through profit or loss
Financial assets of a debt nature
Held to maturity
Available for sale
Recognised at fair value through profit or loss
Mortgages and loans
Carried at cost
Recognised at fair value through profit or loss
Cash and cash equivalents
Total investment income for own account and at own risk
2019
2020
282.6
282.5
112.3
1.9
192.5
428.4
1.1
225.5
13.7
– 0.9
108.9
1.9
176.7
385.8
0.1
207.7
13.7
– 0.8
1,257.0
1,176.5
Income from investment property consists mainly of rental income. Income from financial instruments with characteristics of
equity primarily comprises dividend income, while income from financial instruments with characteristics of liabilities essentially
contains interest income and net income from the recognition and reversal of impairment losses owing to application of the
effective interest method. Income from mortgages and loans and from cash and cash equivalents is mainly derived from the
interest paid on these assets.
Interest income of CHF 2.7 million had been recognised on impaired investments at the balance sheet date (2019: CHF 2.4 million).
259
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
29. REALISED GAINS AND LOSSES ON INVESTMENTS
29.1 Realised gains and losses on investments for own account and at own risk
2019
CHF million
Realised gains on sales and book profits
Investment property
Held to maturity 1
Available for sale
Recognised at fair value through profit or loss
Carried at cost
Sub-total
Realised losses on sales and book losses
Investment property
Held to maturity 1
Available for sale
Recognised at fair value through profit or loss
Carried at cost
Sub-total
Impairment losses recognised in profit or loss
Held to maturity
Available for sale
Carried at cost
Reversal of impairment losses recognised in profit or loss
Held to maturity
Available for sale
Carried at cost
Sub-total
Investment
property
Financial
assets of an
equity nature
Financial
assets of
a debt nature
Mortgages
and loans
Derivative
financial
instruments
395.5
–
–
–
–
395.5
– 178.6
–
–
–
–
–
–
357.4
27.7
–
385.1
–
–
– 84.5
– 1.8
–
–
0.0
202.0
1.2
–
203.2
–
– 53.8
– 209.6
– 0.9
–
– 178.6
– 86.3
– 264.3
–
–
–
–
–
–
–
–
–
– 63.2
– 18.4
–
–
–
–
–
–
–
–
– 63.2
– 18.4
–
–
–
19.6
77.5
97.2
–
–
–
– 11.9
– 2.3
– 14.2
–
–
– 1.6
–
–
1.2
– 0.4
Total
395.5
0.0
559.4
489.8
77.5
–
–
–
441.3
–
441.3
1,522.2
–
–
–
– 560.7
–
– 178.6
– 53.8
– 294.1
– 575.3
– 2.3
– 560.7
– 1,104.2
–
–
–
–
–
–
–
–
– 81.6
– 1.6
–
–
1.2
– 82.0
Total realised gains and losses on investments
216.9
235.6
– 79.5
82.6
– 119.4
336.1
1 Currency effects relating to held-to-maturity financial assets of a debt nature are reported as realised book profits and / or realised book losses.
260
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
2020
CHF million
Realised gains on sales and book profits
Investment property
Held to maturity 1
Available for sale
Recognised at fair value through profit or loss
Carried at cost
Sub-total
Realised losses on sales and book losses
Investment property
Held to maturity 1
Available for sale
Recognised at fair value through profit or loss
Carried at cost
Sub-total
Impairment losses recognised in profit or loss
Held to maturity
Available for sale
Carried at cost
Reversal of impairment losses recognised in profit or loss
Held to maturity
Available for sale
Carried at cost
Sub-total
Investment
property
Financial
assets of an
equity nature
Financial
assets of
a debt nature
Mortgages
and loans
Derivative
financial
instruments
628.2
–
–
–
–
628.2
– 457.2
–
–
–
–
–
–
155.2
11.3
–
166.5
–
–
– 95.0
– 20.8
–
–
–
297.3
0.2
–
297.5
–
– 6.4
– 171.3
– 0.1
–
– 457.2
– 115.7
– 177.9
–
–
–
–
–
–
–
–
–
– 183.9
– 18.8
–
–
–
–
–
–
–
–
– 183.9
– 18.8
–
–
–
5.2
110.8
116.0
–
–
–
– 2.6
– 1.6
– 4.2
–
–
– 4.2
–
–
1.8
– 2.5
Total
628.2
–
452.5
485.2
110.8
–
–
–
468.5
–
468.5
1,676.8
–
–
–
– 428.3
–
– 457.2
– 6.4
– 266.3
– 451.7
– 1.6
– 428.3
– 1,183.3
–
–
–
–
–
–
–
–
– 202.7
– 4.2
–
–
1.8
– 205.1
Total realised gains and losses on investments
171.0
– 133.1
100.9
109.3
40.2
288.3
1 Currency effects relating to held-to-maturity financial assets of a debt nature are reported as realised book profits and / or realised book losses.
261
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
29.2 Impairment losses on financial assets recognised in profit or loss
CHF million
Impairment losses on financial assets of an equity nature recognised in profit or loss
Equities
Equity funds
Mixed funds
Bond funds
Real estate funds
Private equity
Hedge funds
Sub-total
Impairment losses on financial assets of a debt nature recognised in profit or loss
Public corporations
Industrial enterprises
Financial institutions
Other
Sub-total
Impairment losses on mortgages and loans recognised in profit or loss
Mortgages
Policy loans
Promissory notes and registered bonds
Time deposits
Employee loans
Reverse repurchase agreements
Other loans
Sub-total
2019
2020
– 52.7
– 151.2
–
– 0.1
–
0.0
– 9.7
– 0.6
– 6.4
– 6.2
0.0
0.0
– 19.1
– 1.0
– 63.2
– 183.9
–
– 8.9
– 9.6
–
–
– 17.2
– 1.6
–
– 18.4
– 18.8
– 1.5
– 3.5
–
–
–
–
–
–
–
–
–
–
0.0
– 1.6
– 0.7
– 4.2
Total impairment losses on financial assets recognised in profit or loss
– 83.2
– 206.9
In 2020, a gross impairment loss of CHF 183.9 million was recognised for financial instruments with characteristics of equity (of
which CHF 53.5 million in the second half of the year). After deduction of the legal quota, policyholders’ dividends and taxes, the
impairment loss for these financial assets amounted to CHF 120.5 million. This mainly affects the business units in Switzerland
and Belgium.
The impairment losses are primarily attributable to the COVID-19 situation and needed to be recognised due to significant
corrections in the financial markets. The highest losses were recognised on positions in the banking/financial services, industrial
goods & services and oil & gas sectors.
In addition, gross impairment losses of CHF 17.0 million were recognised for senior secured loans (financial instruments with
characteristics of liabilities), which amounted to CHF 7.6 million after taking the legal quota, policyholders’ dividends and taxes
into account. Moreover, a gross impairment loss of CHF 1.8 million (net loss: CHF 0.8 million) was recognised for fixed-income
securities.
262
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
29.3 Currency gains and losses
Excluding exchange-rate losses on transactions involving financial instruments that are recognised at fair value through profit or
loss, a currency loss of CHF 124.3 million was reported for 2020 (2019: loss of CHF 221.8 million).
A gross currency loss of CHF 151.3 million was recognised directly in equity for the reporting year (2019: loss of CHF 78.4
million). Allowing for hedges of a net investment in a foreign operation (hedge accounting), a net loss of CHF 31.6 million was
recognised for 2020 (2019: net loss of CHF 62.1 million).
30. INCOME FROM SERVICES RENDERED
CHF million
Asset management
Services
Banking services
Investment management
Income from services rendered
31. OTHER OPERATING INCOME
CHF million
Interest income from insurance and reinsurance receivables
Other interest income
Gains on the sale of property, plant and equipment
Negative Goodwill
Currency gains on assets and liabilities
Reversal of impairment losses recognised on receivables
External income from owner-occupied property
Income from development properties
Other income
Other operating income
2019
2020
47.6
25.0
37.7
15.7
44.7
25.2
33.9
14.6
126.0
118.5
2019
2020
11.2
0.3
6.0
25.5
13.4
5.9
5.9
42.8
116.6
227.7
8.5
0.7
1.4
–
4.1
9.0
2.9
32.4
134.4
193.4
263
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
32. CLASSIFICATION OF EXPENSES
CHF million
Personnel expenses (excluding loss adjustment expenses)
Marketing and advertising
Depreciation and impairment of property, plant and equipment
Amortisation and impairment of intangible assets
IT and other equipment
Expenses for maintenance, repairs and rent for short-term and low value leases
Losses arising from exchange differences in respect of assets and liabilities
Commission and selling expenses
Fees and commission for financial assets and liabilities not recognised at fair value
Fees and commission expenses for assets managed for third parties
Expenses arising from non-current assets classified as held for sale
Expenses from development properties
Other 1
Total
1 This includes changes in deferred acquisition costs recognised in profit or loss, as shown in table 9.
33. PERSONNEL EXPENSES
Total personnel expenses for 2020 came to CHF 951.4 million (2019: CHF 936.1 million).
2019
2020
– 813.9
– 838.1
– 59.9
– 47.1
– 43.7
– 72.7
– 19.5
– 6.3
– 41.6
– 46.9
– 51.3
– 116.0
– 24.9
– 4.9
– 642.4
– 718.4
– 11.7
– 7.8
–
– 43.4
– 169.4
– 11.6
– 5.5
–
– 28.6
– 108.7
– 1,937.7
– 1,996.4
264
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
34. GAINS OR LOSSES ON FINANCIAL CONTRACTS
CHF million
With discretionary participation features (DPFs)
Financial contracts with discretionary participation features (DPFs)
Sub-total
Measured at amortised cost
Interest on loans
Interest due
Interest arising from banking business
Interest expenses on repurchase agreements
Acquisition costs in banking business
Expenses arising from financial contracts
Sub-total
Recognised at fair value through profit or loss (designated)
Change in fair value of other financial contracts 1
Sub-total
Total gains or losses on financial contracts
Of which: gains on interest rate hedging instruments
Interest rate swaps: cash flow hedges, balance carried forward from cash flow hedge reserves
Interest rate swaps: fair value hedges
Total gains on interest rate hedging instruments
2019
2020
– 60.2
– 60.2
0.0
– 11.6
0.2
3.1
– 7.6
– 8.9
– 58.1
– 58.1
0.2
– 15.3
1.9
4.7
– 7.2
– 8.7
– 24.8
– 24.4
– 1,303.0
– 1,303.0
– 177.1
– 177.1
– 1,388.0
– 259.5
–
–
–
–
–
–
1 The changes in the fair value of other financial contracts were mainly attributable to market-driven price fluctuations and exchange rate movements in the investment portfolio of
investment-linked life insurance contracts with limited or no risk transfer.
265
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Notes to the consolidated annual financial statements
35. INCOME TAXES
35.1 Current income taxes and deferred taxes
In 2020, the cantonal lowering of income tax rates in Switzerland resulted in non-recurring deferred tax income totalling CHF 1.8
million.
In 2019, the positive non-recurring effect of changes to tax rates had a significant impact on deferred. The changes to the tax
rates for companies in Switzerland and Luxembourg led to non-recurring deferred tax income totalling CHF 148.6 million. In
Switzerland, the cantonal lowering of income tax rates resulted in non-recurring deferred tax income totalling CHF 148.5 million,
of which CHF 142.6 million was attributable to the Switzerland segment and CHF 5.9 million to the Group business segment.
In Luxembourg, the reduction in corporation tax in 2019 led to non-recurring deferred tax income of CHF 0.1 million.
CHF million
Current income taxes
Deferred taxes
Total income taxes
2019
2020
– 122.0
125.3
3.3
– 102.2
– 38.1
– 140.3
35.2 Expected and current income taxes
The expected average tax rate for the Baloise Group was 15.8 per cent in 2019 and 19.4 per cent in 2020. These rates correspond
to the weighted average tax rates in those countries where the Baloise Group operates. The reasons for the change in the expected
average tax rate are, firstly, the segment-specific allocation of profit and, secondly, the different tax rates.
CHF million
Profit before taxes
Expected average tax rate (per cent)
Expected income taxes
Increase / reduction owing to
tax-exempt profits and losses
non-tax-effective negative goodwill
non-deductible expenses
withholding taxes on dividends
change in tax rate on recognized deferred tax items
application of different tax rates
change in unrecognised tax losses
tax items related to other reporting periods
non-taxable measurement differences
intercompany effects
other impacts
Current income taxes
In 2019, the ‘other impacts’ item was heavily affected by the impairment of a tax credit.
266
2019
2020
686.2
15.78 %
– 108.3
568.6
19.40 %
– 110.3
20.5
6.4
– 11.8
– 0.7
148.6
– 13.6
– 11.2
11.6
– 12.3
– 16.7
– 9.1
3.3
3.6
–
– 11.9
– 0.8
1.8
– 6.7
– 6.4
– 1.8
– 11.9
– 1.5
5.7
– 140.3
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
36. EARNINGS PER SHARE
Profit for the period attributable to shareholders (CHF million)
Average number of shares outstanding
Basic earnings per share (CHF)
Profit for the period attributable to shareholders (CHF million)
Average number of shares outstanding
Adjustment due to theoretical exercise of share-based payment plans
Adjusted average number of shares outstanding
Diluted earnings per share (CHF)
2019
694.2
2020
434.3
46,219,774
45,031,594
15.02
9.65
2019
694.2
2020
434.3
46,219,774
45,031,594
76,832
82,091
46,296,606
45,113,685
14.99
9.63
The dilution of earnings was attributable to the Performance Share Units (PSU) share-based payment plan.
267
Baloise Group Annual Report 2020
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Notes to the consolidated annual financial statements
37. OTHER COMPREHENSIVE INCOME
37.1 Other comprehensive income
CHF million
Items not to be reclassified to the income statement
Change in reserves arising from reclassification of investment property
Change in reserves arising from assets and liabilities of post-employment benefits (defined benefit plans)
Change arising from shadow accounting
Exchange differences
Deferred taxes
2019
2020
–
– 118.5
40.4
4.0
7.1
–
– 58.7
33.1
0.1
7.3
Total items not to be reclassified to the income statement
– 67.1
– 18.2
Items to be reclassified to the income statement
Available-for-sale financial assets:
Gains and losses arising during the reporting period
Gains and losses reclassified to the income statement
Total available-for-sale financial assets
Investments in associates:
Gains and losses arising during the reporting period
Gains and losses reclassified to the income statement
Total investments in associates
Hedging reserves for derivative financial instruments held as hedges
of a net investment in a foreign operation:
Gains and losses arising during the reporting period
Gains and losses reclassified to the income statement
Total hedging reserves for derivative financial instruments held as hedges
of a net investment in a foreign operation
Reserves arising from reclassification of held-to-maturity financial assets:
Gains and losses arising during the reporting period
Gains and losses reclassified to the income statement
Total reserves arising from reclassification of held-to-maturity financial assets
Change arising from shadow accounting
Exchange differences
Deferred taxes
Total items to be reclassified to the income statement
1,723.6
– 357.5
1,366.1
4.4
–
4.4
35.3
– 18.9
16.4
–
– 0.8
– 0.8
– 518.7
– 112.8
– 171.4
583.2
478.2
– 91.4
386.8
– 0.2
– 4.0
– 4.2
122.3
– 2.6
119.7
–
– 0.8
– 0.8
– 91.6
– 134.8
– 50.1
225.1
Total other comprehensive income
516.1
206.9
268
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
37.2 Deferred taxes on other comprehensive income
CHF million
Other comprehensive income before deferred taxes
Deferred taxes of items not to be reclassified to the income statement
Change in reserves arising from reclassification of investment property
Change in reserves arising from assets and liabilities of post-employment benefits (defined benefit plans)
Change arising from shadow accounting
Additions and disposals arising from change in the scope of consolidation
Total deferred taxes of items not to be reclassified to the income statement
Deferred taxes on items to be reclassified to the income statement
Available-for-sale financial assets
Investments in associates
Hedging reserves for derivative financial instruments held as hedges of a net investment
in a foreign operation
Reserves arising from reclassification of held-to-maturity financial assets
Change arising from shadow accounting
Additions and disposals arising from change in the scope of consolidation
2019
2020
675.7
249.5
0.2
19.7
– 12.9
–
7.1
– 266.1
– 1.4
– 0.7
0.3
96.4
0.0
–
17.9
– 10.5
–
7.3
– 60.5
0.1
– 18.1
0.1
28.4
–
Total deferred taxes of items to be reclassified to the income statement
– 171.4
– 50.1
Change arising from exchange differences
Other comprehensive income after deferred taxes
4.7
516.1
0.2
206.9
The prior-year figures in the statement of comprehensive income were adjusted slightly due to the more detailed presentation of
exchange differences.
All prior-year figures under ‘other comprehensive income’ in chapter 37.1 were adjusted, with the exception of the following line
items:
▸
▸
▸
▸
▸
▸
Change in reserves arising from reclassification of investment property
Total items not to be reclassified to the income statement
Hedging reserves for derivative financial instruments held as hedges of a net investment in a foreign operation
Reserves arising from reclassification of held-to-maturity financial assets
Total items to be reclassified to the income statement
Total other comprehensive income
Under deferred taxes on other comprehensive income in chapter 37.2, adjustments to prior-year figures were made for the follow-
ing line items only:
▸
▸
▸
Total deferred taxes of items not to be reclassified to the income statement
Total deferred taxes of items to be reclassified to the income statement
Change arising from exchange differences
269
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Notes to the consolidated annual financial statements
This page has been left empty on purpose.
270
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Notes to the consolidated annual financial statements
Other disclosures
38. LONG-TERM EQUITY INVESTMENTS AND STRUCTURE OF THE BALOISE GROUP
38.1 ACQUISITION AND DISPOSAL OF COMPANIES
CHF million
Investments
Other assets
Receivables and assets
Cash and cash equivalents
Actuarial liabilities
Other accounts payable
Non-controlling interests
Net assets acquired / disposed of
Funds used / received for acquisitions and disposals
Cash and cash equivalents
Offsetting
Transfer of assets
Directly attributable costs
Equity instruments issued
Reclassification of investments in associates
Acquisition / disposal price
Net assets acquired / disposed of
Other comprehensive income 1
Goodwill / negative goodwill or proceeds from disposals
Cash and cash equivalents used / received for acquisitions and disposals
Cash and cash equivalents acquired / disposed of
Outflow / inflow of cash and cash equivalents
1 This includes primarily historical cumulative exchange differences.
Cumulative
acquisitions
Cumulative
disposals
2019
2020
2019
2020
2,300.7
65.7
196.4
333.4
– 1,130.8
– 1,200.7
–
564.8
541.9
1.2
–
–
–
–
543.1
– 564.8
–
– 21.7
– 543.1
333.4
– 209.7
1.2
8.9
88.2
337.5
– 393.5
– 0.6
–
41.7
63.9
–
–
–
–
–
63.9
– 41.7
–
22.2
– 63.9
337.5
273.7
44.2
25.0
0.7
8.1
– 70.5
– 6.1
–
1.4
1.5
0.2
–
–
–
–
1.7
– 1.4
–
0.3
1.5
– 8.1
– 6.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
On 31 May 2020, the Baloise Group acquired the non-life insurance portfolio of Athora Belgium. The acquisition strengthens
Baloise’s position in the Wallonia region and is the ideal complement to Baloise Belgium’s presence in the Flanders region.
The original purchase price allocation as of 31 May 2020 had to be adjusted because of the retrospective acknowledgement
of the recognition under tax law of the goodwill according to local law that resulted from the acquisition. The recognition under
tax law resulted in the creation of deferred tax assets of CHF 17.1 million and a reduction of the goodwill by the same amount to
CHF 22.2 million. The adjustment was made within the measurement period stipulated in IFRS 3.45 and was made with retrospec-
tive effect from the date of acquisition.
271
Baloise Group Annual Report 2020
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Notes to the consolidated annual financial statements
In 2019, the Baloise Group acquired the voting rights in Belgian multi-sector insurer Fidea NV, thereby considerably strengthening
its position in the Belgian market. The purchase price amounted to CHF 535.8 million. This acquisition resulted in negative good-
will of CHF 25.5 million, which was recognised under other operating income.
In 2019, the Baloise Group also expanded its ‘Home’ ecosystem in Switzerland by acquiring a number of companies.
The purchase price for the start-up Bubble Box AG, which offers an online platform for laundry and dry cleaning services,
amounted to CHF 2.3 million. Of this amount, CHF 2.0 million was paid in cash and CHF 0.4 million was paid in other forms of
consideration. Goodwill of CHF 0.6 million was recognised in connection with the acquisition.
The purchase price for devis.ch SA amounted to CHF 5.0 million, of which CHF 4.2 million was paid in cash and CHF 0.8 million
was paid in other forms of consideration. This transaction resulted in goodwill of CHF 3.2 million. devis.ch SA operates a digital
marketplace for the services of tradespeople and cleaners.
In 2019, the branches of Basler Sachversicherungs-AG and Basler Lebensversicherungs-AG in the Czech Republic and Slova-
kia were sold. This disposal had no material impact on earnings in the consolidated financial statements of 2019.
Incremental acquisitions are not included in this table. That is why the outflow of cash and cash equivalents varies from the
presentation in the cash flow statement.
38.2 Changes to shareholdings
In 2020, there had been no transactions resulting in a change of control over a subsidiary.
38.3 Investments in associates
The Baloise Group holds investments in a number of non-significant associates.
2019
CHF million
Total
2020
CHF million
Total
Carrying
amount
Baloise’s share of
profit or loss for
the period from
continuing
operations
profit or loss for
the period from
disposal groups
held for sale
other
comprehensive
income1
comprehensive
income
387.4
10.8
–
4.4
15.2
Carrying amount
Baloise’s share of
profit or loss for
the period from
continuing
operations
profit or loss for
the period from
disposal groups
held for sale
other
comprehensive
income
comprehensive
income
263.4
64.1
–
– 4.2
59.9
1 The prior-year figure have been adapted to the modified presentation for other comprehensive income. Further details can be found in chapter 37.
The Belgium strategic business unit invested in the innovative start-up Keypoint BV, acquiring a 28.75 per cent equity interest
with effect from 17 February 2020. Baloise and Keypoint are jointly developing a new digital assistant that is designed to
simplify the work of property managers. Also in Belgium, on 19 June 2020 Baloise acquired a 27 per cent stake in Walloon
272
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
start-up Immopass SRL, a service provider specialising in technical property inspection. The total cost of these two capital
investments was in the low single-digit millions.
At the end of July 2020, the Swiss strategic business unit acquired a 25 per cent stake in Zurich-based asset manager Tolomeo
Capital.
In November 2020, Baloise expanded its Mobility ecosystem with the acquisition of a 37.05 per cent stake in Berlin-based
start-up Ben Fleet Services, a provider of vehicle fleet maintenance services.
Baloise Belgium acquired a 27.12 per cent interest in Rentio in early December 2020. Rentio is an innovative Flemish start-up
that digitalises, centralises and automates all aspects related to the lettings process.
An equity investment of around 26 per cent in Infracore SA that had been made in 2019 was sold for CHF 176.1 million with
effect from the end of December 2020.
In mid-May 2019, 28.2 per cent of the shares were acquired in Central Real Estate Holding AG, which invests in development
projects located in the central business districts of Swiss cities. This holding company’s first project is the acquisition by its
subsidiary Central Real Estate Basel AG of the roughly 160,000 square metre Klybeck site in Basel’s district of the same name.
In October 2019, the Baloise Group acquired 30 per cent of the shares in Swiss start-up Gowago AG, representing a further
investment in Baloise’s ‘Mobility’ ecosystem. The start-up’s online platform provides an easy way of comparing car leasing quotes.
As at 31 December 2020 or 31 December 2019, the Baloise Group held more than 20 per cent of the capital of further companies
but does not have any influence over these companies’ management. As a result, they are not reported as associates.
There were no contingent liabilities arising from investments in associates and no substantial unrecognised shares of the losses
of associates as at either 31 December 2020 or 31 December 2019.
273
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
38.4 Significant subsidiaries
Entities are defined as significant if they either individually or together contribute a significant proportion of the gross premiums,
net income or total assets of the Baloise Group. Other long-term equity investments may be included for qualitative reasons, e. g.
they are listed on a stock exchange.
Group’s
share of
voting
rights /
capital
(per cent) 2
Direct share
of voting
rights /
capital
(per cent) 2
Primary
activity
Operating
segment 1
Method of
consoli-
dation 3
Currency
Share
capital
(million)
Total assets
(million)
Gross
premiums /
policy fees
(million)
F
F
F
F
F
F
F
F
F
F
F
F
F
CHF
CHF
CHF
CHF
CHF
CHF
4.9
3,161.6
–
75.0
5,680.2
1,464.6
50.0 33,838.9
2,648.2
50.0
8,595.5
0.2
1.0
31.0
63.8
CHF
1.5
13.5
EUR
0.1
10.5
–
–
–
–
–
EUR
22.0
9,897.6
355.2
EUR
15.1
1,926.5
725.6
EUR
EUR
EUR
–
81.1
29.3
3.6
0.5
209.0
11.30
–
–
31.12.2020
Switzerland
Bâloise Holding Ltd, Basel
Baloise Insurance Ltd, Basel
Baloise Life Ltd, Basel
Baloise Bank SoBa AG, Solothurn
Haakon AG, Basel
Baloise Asset Management AG, Basel
Baloise Asset Management International AG,
Basel
Baloise Fund Invest Advico,
Bertrange (Luxembourg)
Germany
Basler Lebensversicherungs-
Aktiengesellschaft, Hamburg
Basler Sachversicherungs-
Aktiengesellschaft, Bad Homburg
Holding
Non-Life
Life
Banking
Other
Investment
manage-
ment
Investment
consulting
Other
O
NL
L
B
O
B
B
B
Holding
Holding
100.00
100.00
100.00
100.00
100.00
100.00
74.75
74.75
100.00
100.00
100.00
100.00
100.00
100.00
Life
L
100.00
100.00
Non-Life
NL
100.00
100.00
Deutsche Niederlassung der FRIDAY Insurance
S.A., Berlin
Non-Life
NL
83.95 4
100.00
Basler Sach Holding AG, Hamburg
ZEUS Vermittlungsgesellschaft mbH, Hamburg
Holding
Other
O
O
100.00
100.00
100.00
100.00
1 L: Life, NL: Non-Life, B: Banking, O: Other activities / Group business.
2 Shares stated as a percentage are rounded down.
3 F: Full consolidation, E: Equity-accounted investment.
4 No non-controlling interests are shown in equity in this context.
274
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
31.12.2020
Belgium
Baloise Belgium NV, Antwerp
Euromex NV, Antwerp
Luxembourg
Bâloise (Luxembourg) Holding S.A.,
Bertrange (Luxembourg)
Bâloise Assurances Luxembourg S.A.,
Bertrange (Luxembourg)
Bâloise Vie Luxembourg S.A.,
Bertrange (Luxembourg)
Baloise Private Equity (Luxembourg) SCS,
Luxembourg
Other territories
Baloise Life (Liechtenstein) AG, Balzers
Baloise Finance (Jersey) Ltd., Jersey
Baloise Alternative Investment
Strategies Limited,
St. Helier (Jersey / Channel Islands)
Group’s
share of
voting
rights /
capital
(per cent) 2
Direct share
of voting
rights /
capital
(per cent) 2
Primary
activity
Operating
segment 1
Life and
Non-Life
Non-Life
L/NL
100.00
100.00
NL
100.00
100.00
Holding
O
100.00
100.00
Non-Life
NL
100.00
100.00
Life
L
100.00
100.00
Investment
L/NL
100.00
100.00
manage-
ment
Life
Other
L
O
100.00
100.00
100.00
100.00
Investment
L/NL
100.00
100.00
manage-
ment
Method of
consoli-
dation 3
Currency
Share
capital
(million)
Total assets
(million)
Gross
premiums /
policy fees
(million)
F
F
F
F
F
F
F
F
F
EUR
355.3 13,743.1
1,489.7
EUR
2.7
250.2
82.1
CHF
250.0
1,926.1
–
EUR
15.8
393.2
129.5
EUR
32.7
9,211.2
67.3
USD
0.0
752.2
–
CHF
CHF
USD
7.5
0.3
0.0
2,741.0
1.1
0.4
0.5
–
–
1 L: Life, NL: Non-Life, B: Banking, O: Other activities / Group business.
2 Shares stated as a percentage are rounded down.
3 F: Full consolidation, E: Equity-accounted investment.
275
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
39. RELATED PARTY TRANSACTIONS
In the course of its ordinary operating activities, the Baloise Group conducts transactions with associates, key management
personnel and related parties. The terms and conditions governing such transactions can be found in the Remuneration Report
as part of corporate governance (page 104 to 129).
The executive management team consists of the members of Bâloise Holding Ltd’s Board of Directors and Corporate
Executive Committee.
RELATED PART Y TRANSACTIONS
Premiums earned
and policy fees
Investment income
Expenses
Mortgages and loans
Liabilities
2019
2020
2019
2020
2019
2020
31.12.2019
31.12.2020
31.12.2019
31.12.2020
CHF million
Associates
Key management personnel 1
–
0.1
–
0.1
0.1
0.0
5.7
0.0
– 3.1
– 12.7
– 21.5
– 11.4
–
9.3
–
7.5
–
–
– 2.7
–
EXECUTIVE MANAGEMENT TEAM REMUNERATION
CHF million
Short-term employee benefits
Post-employment benefits
Payments under share-based payment plans
Discount Share Subscription Plan 1
Total
2019
2020
– 7.1
– 1.1
– 4.2
– 0.2
– 6.8
– 1.1
– 3.3
– 0.2
– 12.7
– 11.4
1 Shares under the Share Subscription Plan are issued to key management personnel at a 10 per cent discount. This discount is now also included under expenses. The presentation of the
prior-year figures has been adjusted accordingly.
15,472 shares worth CHF 2.4 million were repurchased from members of the Corporate Executive Committee in 2020 (2019: CHF 2.4
million) under the Share Participation Plan (section 17.4.3).
40. CONTINGENT AND FUTURE LIABILITIES
40.1 Contingent liabilities
40.1.1 Legal disputes
The companies in the Baloise Group are regularly involved in litigation, legal claims and lawsuits, which in most cases constitute
a normal part of its operating activities as an insurer.
The Corporate Executive Committee is not aware of any facts that materialised after the balance sheet date of 31 December 2020
and that could have a significant impact on the 2020 consolidated annual financial statements.
276
Baloise Group Annual Report 2020
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Notes to the consolidated annual financial statements
40.1.2 Guarantees and collateral for the benefit of third parties
The Baloise Group has issued guarantees and provided collateral to third parties. These include obligations – in contractually
specified cases – to make capital contributions or payments to increase the amount of equity, provide funds to cover principal
and interest payments when they fall due, and issue guarantees as part of its operating activities. The Baloise Group is not aware
of any cases of default that could trigger such guarantee payments.
In the normal course of its insurance business, the Baloise Group provided contractually binding collateral, mainly joint
collateral relating to insurance-backed construction guarantees, and professional and commercial surety bonds.
CHF million
Guarantees
Collateral
Total guarantees and collateral for the benefit of third parties
CREDIT RATINGS OF GUARANTEES AND COLLATERAL
31.12.2019
31.12.2020
63.3
472.1
535.4
62.7
478.0
540.7
31.12.2019
CHF million
Guarantees
Collateral
31.12.2020
CHF million
Guarantees
Collateral
AAA
–
–
AAA
–
–
AA
–
–
AA
–
–
A
30.7
–
A
30.6
–
Lower than BBB
or no rating
BBB
–
0.4
32.6
471.7
Lower than BBB
or no rating
BBB
–
–
32.1
478.0
Total
63.3
472.1
Total
62.7
478.0
277
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
40.1.3 Pledged or ceded assets, securities-lending assets and collateral held
CARRYING AMOUNTS OF ASSETS PLEDGED OR CEDED AS COLLATERAL
CHF million
Financial assets under repurchase agreements
Financial assets in the context of securities lending
Investments
Pledged intangible assets
Pledged property, plant and equipment
Other
Total
FAIR VALUE OF COLLATERAL HELD
CHF million
Financial assets under reverse repurchase agreements
Financial assets in the context of securities lending
Other
Total
Of which: sold or repledged
– with an obligation to return the assets
– with no obligation to return the assets
31.12.2019
31.12.2020
260.1
4,166.8
2,288.2
47.1
3,826.7
2,531.0
–
–
–
–
–
–
6,715.0
6,404.9
31.12.2019
31.12.2020
–
–
5,865.6
5,307.9
–
–
5,865.6
5,307.9
–
–
–
–
The Baloise Group engages in securities-lending transactions that may give rise to credit risk. Collateral is required in order to
hedge these credit risks by more than covering the underlying value of the securities that are being lent (mainly bonds). The value
of the counterparty’s lending securities is regularly measured in order to minimise the credit risk involved. Additional collateral
is immediately required if this value falls below the value of cover provided.
The Baloise Group retains control over the loaned securities throughout the term of its lending transactions. The income
received from securities lending is recognised in profit or loss.
278
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Notes to the consolidated annual financial statements
40.2 Future liabilities
40.2.1 Capital commitments
CHF million
Commitments undertaken for future acquisition of
investment property
financial assets
property, plant and equipment
intangible assets
Total commitments undertaken
CREDIT RATINGS OF CAPITAL COMMITMENTS
31.12.2019
CHF million
Capital commitments
31.12.2020
CHF million
Capital commitments
31.12.2019
31.12.2020
350.2
666.6
–
–
529.4
1,239.2
–
–
1,016.8
1,768.7
AAA
61.5
AAA
397.5
AA
–
AA
–
A
86.4
A
49.1
Lower than BBB
or no rating
BBB
Total
–
868.9
1,016.8
Lower than BBB
or no rating
BBB
Total
–
1,322.1
1,768.7
Obligations undertaken by the Baloise Group to make future purchases of investments include commitments in respect of private
equity, which constitute unfunded commitments to invest directly in private equity or to invest in private equity funds. From 2020
onwards, additional investment obligations in connection with the Dutch mortgage fund will be reported under commitments
regarding the future acquisition of investments.
279
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
41. LEASES
41.1 The Baloise Group as a lessee
Generally, leases are entered into only if a purchase would be economically disadvantageous or is not possible. The Baloise Group
leases real estate for office space and warehousing that it recognises on its balance sheet. Right-of-use assets are recognised under
the line item ‘Property, plant and equipment’ and the lease liabilities under ‘Financial liabilities’ on the balance sheet. The leases are
negotiated individually and contain a variety of different conditions to give the Baloise Group the maximum operational flexibility with
regard to the overall lease portfolio. As a rule, the leases are entered into for a term of two to five years. Possible extension options
are factored into the measurement of lease liabilities, provided that it is sufficiently certain that the options will be exercised. Any
non-leasing components within a lease are not treated separately. Instead, they are also taken into account in the measurement of
the relevant lease liability.
Low-value and short-term leases for operating equipment, parking spaces and other property, plant and equipment are expensed
in the income statement on a straight-line basis over the term of the lease. They are not recognised on the balance sheet.
DUE DATES OF UNDISCOUNTED LEASE LIABILITIES
CHF million
Due within one year
Due after one to three years
Due after three to five years
Due after five years or more
Total contractual cash flows
Book value lease liabilities
LEASING IN THE INCOME STATEMENT
CHF million
Income relating to sublease contracts
Expenses relating to leases of low-value and short-term leases
Interests expenses on leasing liabilities
Depreciation and impairment of right-of-use assets
2019
2020
17.6
20.3
5.9
0.6
44.4
43.0
13.5
16.3
5.0
4.6
39.5
38.9
2019
2020
0.7
– 6.0
– 0.7
0.5
– 6.2
– 0.5
– 16.3
– 16.5
Leases that have not yet started
Bâloise Assurances Luxembourg S. A. has signed a binding lease with a third party for the rental of an office building in Luxembourg.
According to the leasing arrangement, the office building is likely to be made available from June 2022 until 2037. The right-of-use
asset and lease liability for this lease are estimated to be CHF 42.7 million.
280
Baloise Group Annual Report 2020
Financial Report
Notes to the consolidated annual financial statements
41.2 The Baloise Group as a lessor
The Baloise Group has entered into operating leasing arrangements in order to lease its investment property to third parties.
There were no further leasing arrangements at the balance sheet date.
DUE DATES OF LEASING INCOME
CHF million
Due within one year
Due after one to three years
Due after three to five years
Due after five years or more
Total
LEASING IN THE INCOME STATEMENT
CHF million
Fixed lease income
Variable lease income
Leasing income
2019
2020
347.7
662.5
721.0
258.8
355.2
677.4
725.1
174.1
1,990.0
1,931.9
2019
2020
364.5
–
364.5
357.2
–
357.2
42. EVENTS AFTER THE BALANCE SHEET DATE
On 4 February 2021, Bâloise Holding Ltd placed an additional bond issue on behalf of the Baloise Group with a total volume of
CHF 250 million and a coupon of 0.15 per cent (maturity period: 2021–2031, ISIN CH0593641068) as part of its funding activities.
By the time that these consolidated annual financial statements had been completed on 24 March 2021, we had not become aware
of any further events that would have a material impact on the consolidated annual financial statements as a whole.
281
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone:
Fax:
www.ey.com/ch
+41 58 286 86 86
+41 58 286 86 00
To the Annual General Meeting of
Bâloise Holding Ltd, Basel
Basel, 24 March 2021
Report of the statutory auditor on the consolidated financial statements
Opinion
We have audited the consolidated financial statements (pages 134 - 281) of Bâloise Holding
Ltd and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at
31 December 2020, the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated cash flow statement, the consolidated statement of
changes in equity for the year then ended, and the notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion the consolidated financial statements give a true and fair view of the
consolidated financial position of the Group as at 31 December 2020, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards (IFRS) and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing
(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and
standards are further described in the section Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements of our report.
We are independent of the Group in accordance with the provisions of Swiss law and the
requirements of the Swiss audit profession, as well as the IESBA Code of Ethics for
Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the section Auditor’s responsibilities for the
audit of the consolidated financial statements of our report. Accordingly, our audit included
procedures designed to respond to our assessment of the risks of material misstatement of
the consolidated financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion
on the consolidated financial statements.
282
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone:
Fax:
+41 58 286 86 86
+41 58 286 86 00
www.ey.com/ch
To the Annual General Meeting of
Bâloise Holding Ltd, Basel
Basel, 24 March 2021
Report of the statutory auditor on the consolidated financial statements
Opinion
We have audited the consolidated financial statements (pages 134 - 281) of Bâloise Holding
Ltd and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at
31 December 2020, the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated cash flow statement, the consolidated statement of
changes in equity for the year then ended, and the notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion the consolidated financial statements give a true and fair view of the
consolidated financial position of the Group as at 31 December 2020, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards (IFRS) and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing
(ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and
standards are further described in the section Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements of our report.
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
We are independent of the Group in accordance with the provisions of Swiss law and the
requirements of the Swiss audit profession, as well as the IESBA Code of Ethics for
Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the section Auditor’s responsibilities for the
audit of the consolidated financial statements of our report. Accordingly, our audit included
procedures designed to respond to our assessment of the risks of material misstatement of
the consolidated financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion
on the consolidated financial statements.
Valuation of claims reserves - non-life
Area of focus Claims reserves non-life include Management’s estimate of notified but
not yet paid claims at the balance sheet date, reserves for incurred but
not reported losses (IBNR) and the provision for claims handling costs.
Inappropriate valuation of the claims reserves non-life could result in a
misstatement to the financial statements of the Group and its overall
financial position. The valuation of claims reserves non-life involves a
significant amount of Management’s judgement. The selection of
methodology, underlying assumptions and input parameters may
significantly affect the annual result and the Group’s equity position.
Management discloses the valuation principles used in the recognition
of the claims reserves in notes 3.18 “Non-life insurance contracts” and
5.4.2 “Assumptions”. The impact of various scenarios is described in
note 5.4.4 “Sensitivity analysis”, in particular what the impact of
estimation errors would be on the claims reserves. We also refer to 22.1
in the notes of the Group’s financial statements.
As part of the audit of the significant portfolios, we involved our non-life
insurance actuarial specialists to independently assess the
methodology and the underlying assumptions used by Management.
Our assessment of the claims reserves included an independent
valuation and a comparison to the Group’s financial statements.
We further assessed the operating effectiveness of selected key
controls over the input parameters and the mathematical correctness of
the actuarial calculations. In addition, we evaluated the required
disclosures in the notes to the financial statements.
Based on our audit procedures we did not identify exceptions with
regard to the valuation of claims reserves non-life.
Our audit
response
Valuation of actuarial reserves from non-unit-linked life insurance contracts
Area of focus Life insurance technical reserves consist of the actuarial reserves and
the policyholders’ dividends credited and provisions for future
policyholders’ dividends. The actuarial reserves are valued using
actuarial methodologies and assumptions (such as biometric, economic
and cost assumptions).
Inappropriate valuation of the life insurance technical reserves could
result in a misstatement to the financial statements of the Group and its
overall financial position. The valuation of technical reserves for life
insurance contracts involves a significant amount of Management’s
judgement. The selection of methodology, underlying assumptions and
input parameters may significantly affect the annual result and the
Group’s equity position.
Management discloses the valuation principles used in the recognition
of technical reserves for life insurance contracts in note 3.19 “Life
insurance contracts and financial contracts with discretionary
283
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
284
Valuation of claims reserves - non-life
Area of focus Claims reserves non-life include Management’s estimate of notified but
not yet paid claims at the balance sheet date, reserves for incurred but
not reported losses (IBNR) and the provision for claims handling costs.
Inappropriate valuation of the claims reserves non-life could result in a
misstatement to the financial statements of the Group and its overall
financial position. The valuation of claims reserves non-life involves a
significant amount of Management’s judgement. The selection of
methodology, underlying assumptions and input parameters may
significantly affect the annual result and the Group’s equity position.
Management discloses the valuation principles used in the recognition
of the claims reserves in notes 3.18 “Non-life insurance contracts” and
5.4.2 “Assumptions”. The impact of various scenarios is described in
note 5.4.4 “Sensitivity analysis”, in particular what the impact of
estimation errors would be on the claims reserves. We also refer to 22.1
in the notes of the Group’s financial statements.
As part of the audit of the significant portfolios, we involved our non-life
insurance actuarial specialists to independently assess the
methodology and the underlying assumptions used by Management.
Our assessment of the claims reserves included an independent
valuation and a comparison to the Group’s financial statements.
We further assessed the operating effectiveness of selected key
controls over the input parameters and the mathematical correctness of
the actuarial calculations. In addition, we evaluated the required
disclosures in the notes to the financial statements.
Based on our audit procedures we did not identify exceptions with
regard to the valuation of claims reserves non-life.
Our audit
response
Valuation of actuarial reserves from non-unit-linked life insurance contracts
Area of focus Life insurance technical reserves consist of the actuarial reserves and
the policyholders’ dividends credited and provisions for future
policyholders’ dividends. The actuarial reserves are valued using
actuarial methodologies and assumptions (such as biometric, economic
and cost assumptions).
Inappropriate valuation of the life insurance technical reserves could
result in a misstatement to the financial statements of the Group and its
overall financial position. The valuation of technical reserves for life
insurance contracts involves a significant amount of Management’s
judgement. The selection of methodology, underlying assumptions and
input parameters may significantly affect the annual result and the
Group’s equity position.
Management discloses the valuation principles used in the recognition
of technical reserves for life insurance contracts in note 3.19 “Life
insurance contracts and financial contracts with discretionary
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
participation features” and 5.5.2 “Assumptions” in the financial report.
The impact of various scenarios on actuarial reserves is described in
note 5.5.3 “Sensitivity analysis”. We also refer to note 22.2 of the
Group’s financial statements, providing the financials of the technical
provisions.
Our audit
response
As part of the audit, we involved our life insurance actuarial specialists.
On a sample basis, the actuaries assessed the methodology and
underlying assumptions used by Management as well as the
implementation of the technical reserves based on tariff assumptions.
In addition, we assessed the actuarial reserves by reviewing
Management’s Liability Adequacy Tests (LAT). We further tested the
operating effectiveness of selected key controls over the input
parameters and the mathematical correctness of the actuarial
calculations. In addition, we evaluated the required disclosures in the
notes to the financial statements.
Based on our audit procedures we did not identify exceptions with
regard to the valuation of life insurance technical reserves.
Other information in the annual report
The Board of Directors is responsible for the other information in the annual report. The other
information comprises all information included in the annual report, but does not include the
consolidated financial statements, the stand-alone financial statements and our auditor’s
reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in
the annual report and we do not express any form of assurance thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information in the annual report and, in doing so, consider whether the
other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on
the work performed, we conclude that there is a material misstatement of the other
information, we are required to report it. We have nothing to report in this regard.
Responsibility of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial
statements that give a true and fair view in accordance with IFRS and the provisions of Swiss
law. This responsibility includes designing, implementing and maintaining an internal control
system relevant to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Board of Directors is further responsible for
selecting and applying appropriate accounting policies and making accounting estimates that
are reasonable in the circumstances.
In preparing the consolidated financial statements, the Board of Directors is responsible
for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
285
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss
law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the economic decisions of
users of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-
report-for-public-companies. The description forms part of our auditor’s report.
Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we
confirm that an internal control system exists, which has been designed for the preparation of
consolidated financial statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
Ernst & Young Ltd
Christian Fleig
Licensed audit expert
(Auditor in charge)
Patrick Schwaller
Licensed audit expert
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
286
Baloise Group Annual Report 2020
Financial Report
Report of the statutory auditor
Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss
law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the economic decisions of
users of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-
report-for-public-companies. The description forms part of our auditor’s report.
Bericht zu sonstigen gesetzlichen und anderen rechtlichen Anforderungen
Report on other legal and regulatory requirements
In Übereinstimmung mit Art. 728a Abs. 1 Ziff. 3 OR und dem Schweizer Prüfungsstandard
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we
890 bestätigen wir, dass ein gemäss den Vorgaben des Verwaltungsrates ausgestaltetes
confirm that an internal control system exists, which has been designed for the preparation of
Opinion
internes Kontrollsystem für die Aufstellung des Finanzberichtes existiert.
consolidated financial statements according to the instructions of the Board of Directors.
In our opinion, the remuneration report for the year ended 31 December 2020 of Bâloise
Holding AG complies with Swiss law and articles 14–16 of the Ordinance.
Wir empfehlen, den vorliegenden Finanzbericht zu genehmigen.
We recommend that the consolidated financial statements submitted to you be approved.
Ernst & Young Ltd
Ernst & Young AG
Ernst & Young Ltd
Christian Fleig
Licensed audit expert
(Auditor in charge)
Christian Fleig
Zugelassener Revisionsexperte
Christian Fleig
(Leitender Revisor)
Licensed audit expert
(Auditor in charge)
Patrick Schwaller
Licensed audit expert
Patrick Schwaller
Zugelassener Revisionsexperte
Patrick Schwaller
Licensed audit expert
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
287
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable business management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
Bâloise Holding Ltd
Income statement of Bâloise Holding Ltd ........................ 290
Balance sheet of Bâloise Holding Ltd .............................. 291
Notes to the financial statements of Bâloise Holding Ltd ... 292
Appropriation of distributable profit as proposed
by the Board of Directors ................................................ 302
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 303
D
T
L
G
N
I
D
L
O
H
E
S
I
O
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â
B
Unterkapitel
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Income statement of Bâloise Holding Ltd
Income statement of Bâloise Holding Ltd
CHF million
Income from long-term equity investments
Income from interest and securities
Other income
Total income
Administrative expenses
Depreciation, amortisation and impairment
Interest expenses
Other expenses
Total expenses
Tax expense
Profit for the period
Note
2019
2020
2
3
4
5
6
646.6
38.5
17.4
702.5
– 51.7
– 62.5
– 32.7
– 3.7
– 150.6
384.6
58.7
8.8
452.1
– 43.8
– 1.8
– 31.0
– 3.0
– 79.6
– 0.2
– 0.2
551.7
372.3
290
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Balance sheet of Bâloise Holding Ltd
Balance sheet of Bâloise Holding Ltd
CHF million
Assets
Cash and cash equivalents
Receivables from Group companies
Receivables from third parties
Current assets
Financial assets
Loans to Group companies
Long-term equity investments
Non-current assets
Total assets
Equity and liabilities
Current liabilities
Liabilities to Group companies
Liabilities to third parties
Current interest-bearing liabilities to third parties
Deferred income
Non-current liabilities
Long-term interest-bearing liabilities to Group companies
Long-term interest-bearing liabilities to third parties
Provisions
Liabilities
Share capital
Statutory retained earnings
General reserve
Reserve for treasury shares
Voluntary retained earnings
Free reserves
Distributable profit:
– Profit carried forward
– Profit for the period
Treasury shares
Equity
Total equity and liabilities
Note
31.12.2019
31.12.2020
7
8
9
10
11
12
13
14
46.2
361.0
4.0
411.2
21.2
408.1
7.3
436.6
1,063.2
1,148.8
–
1,836.4
2,899.6
0.4
1,871.2
3,020.4
3,310.8
3,457.0
6.8
12.6
300.0
23.2
580.0
1,525.0
0.3
6.0
0.2
375.0
19.5
777.0
1,450.0
–
2,447.9
2,627.7
4.9
11.7
8.3
4.9
11.7
9.2
683.2
922.3
0.8
551.7
– 397.7
862.9
0.1
372.3
– 491.3
829.3
3,310.8
3,457.0
291
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
1. ACCOUNTING POLICIES
General
These annual financial statements of Bâloise Holding Ltd domiciled in Basel have been prepared in accordance with the provisions
of Swiss accounting law (Title 32 of the Swiss Code of Obligations). The main policies applied which are not prescribed by law are
described below.
All amounts shown in these annual financial statements of Bâloise Holding Ltd are stated in millions of Swiss francs (CHF million)
and have been rounded to one decimal place. Consequently, the sum total of amounts that have been rounded may in isolated
cases differ from the rounded total shown in this report.
Cash and cash equivalents
Cash and cash equivalents include bank deposits and cash equivalents such as call money, fixed-term deposits and money
market instruments. They are recognised at their nominal amount.
Receivables from Group companies
This line item includes expenses relating to the new financial year that have been paid in advance and income from the reporting
year that will not be received until a later date. It also comprises dividends approved by subsidiaries’ annual general meetings at
the balance sheet date, which Bâloise Holding reports as dividends receivable. They are recognised at their nominal amount.
Receivables from third parties
Receivables are recognised at their nominal amount less any impairment losses.
Loans to Group companies
These loans are measured at their nominal amount less any impairment losses. Specific write-downs are recognised for all identifiable
risks in accordance with the prudence principle.
Derivative financial instruments
Derivative financial instruments are generally measured at fair value. Where applicable, the effect of the derivative is offset against
the inverse effect of the underlying instrument.
Long-term equity investments
Long-term equity investments are recognised individually at cost less any impairment losses.
292
Notes to the financial statements of Bâloise Holding Ltd
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
Liabilities
Liabilities are recognised at their nominal amount.
Deferred income and accrued expenses
This line item comprises income relating to the new financial year that has already been received, as well as expenses relating to
the reporting year that will not be paid until a later date.
Interest-bearing liabilities
Interest-bearing liabilities include bonds to third parties and interest-bearing liabilities to Group companies are recognised at
their nominal amount. Issuance costs – less any premiums – are charged in full to the income statement at the time the bonds are
issued. The liabilities are categorised as current (less than twelve months) or non-current interest-bearing liabilities depending
on their residual term.
Provisions
Provisions to cover any risks that may arise are recognised in accordance with the principles of risk-based management and are
charged to the income statement.
Treasury shares
Treasury shares are recognised at cost on the date of acquisition as deductions from equity. If the shares are subsequently sold,
any gains or losses are recognised in profit or loss as financial income or expense.
Currency risk
Asset and liability positions in foreign currencies are translated using the closing rate as at the balance sheet date (with the
exception of long-term equity investments). The resulting differences are recognised in the income statement. In the case of
hedged foreign currency positions, the effect of the underlying instrument is offset against the inverse effect of the derivative
hedge instrument.
293
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
NOTES TO THE INCOME STATEMENT
2.
INCOME FROM INTEREST AND SECURITIES
CHF million
Income from treasury shares
Interest on loans to Group companies
Realized income treasury shares
Other income from interest and securities
Total income from interest and securities
3. OTHER INCOME
CHF million
Write-up on long-term equity investment
Capital Market transaction income
Sundry other income
Total other income
294
2019
2020
9.4
28.3
0.8
0.0
38.5
19.6
39.0
–
0.1
58.7
2019
2020
–
4.3
13.1
17.4
–
–
8.8
8.8
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
4. ADMINISTRATIVE EXPENSES
CHF million
Personnel expenses 1
Other administrative expenses
Total administrative expenses
1 Bâloise Holding Ltd has no direct employees. All staff members are employed by Baloise Insurance Ltd, Basel.
5. DEPRECIATION, AMORTISATION AND IMPAIRMENT
CHF million
Impairment losses on long-term equity investments
Impairment losses on loans
Others
Total depreciation, amortisation and impairment
2019
2020
– 35.9
– 15.8
– 51.7
– 27.7
– 16.1
– 43.8
2019
2020
– 43.0
– 16.0
– 3.5
– 62.5
–
– 1.4
– 0.4
– 1.8
Due to a restructuring measure implemented in 2020, the long-term equity investment in Baloise Life (Liechtenstein) AG and the
subordinated loan from Bâloise Holding Ltd to Baloise Life (Liechtenstein) AG were written down by their remaining carrying
amounts at the end of 2019 in accordance with Swiss recognised accounting principles (GoR).
6.
INTEREST EXPENSES
CHF million
Interest on bonds
Other interest expenses
Total interest expenses
2019
2020
– 26.3
– 6.3
– 32.7
– 24.4
– 6.6
– 31.0
295
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
NOTES TO THE BALANCE SHEET
7. RECEIVABLES FROM GROUP COMPANIES
CHF million
Dividends
Other receivables
Total receivables from Group companies
31.12.2019
31.12.2020
344.7
16.3
361.0
377.4
30.7
408.1
The annual general meeting of the following AGMs voted to recognise the dividends receivable for the 2020 financial year as
accrued income:
▸
▸
▸
▸
25 February 2021: Haakon AG, Basel
05 March 2021: Baloise Bank SoBa AG, Solothurn
11 March 2021: Baloise Asset Management Schweiz AG, Basel and Baloise Asset Management International AG, Basel
23 March 2021: Basler Versicherung AG, Basel and Basler Leben AG, Basel
8. LOANS TO GROUP COMPANIES
CHF million
Subordinated loans to Baloise Bank SoBa
Subordinated loans to Bâloise (Luxembourg) Holding S.A.
Subordinated loans to Baloise Belgium NV
Loans to Bâloise (Luxembourg) Holding S.A.
Loans to Basler Versicherung Beteiligungen B.V. & Co. KG
Loans to Basler Versicherung Beteiligungen B.V. & Co. KG
Total loans to Group companies
31.12.2019
31.12.2020
40.0
284.6
412.5
283.7
42.4
0.0
40.0
284.6
411.2
283.7
42.3
87.0
1,063.2
1,148.8
9. OTHER INVESTMENTS
As at 31 December 2020, the item ‘Other investments’ includes an internal derivative hedge instrument that is measured at fair
value.
296
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
10. LONG-TERM EQUITY INVESTMENTS
Company
Basler Versicherung AG, Basel
Basler Leben AG, Basel
Baloise Bank SoBa AG, Solothurn
Baloise Asset Management Schweiz AG, Basel
Baloise Asset Management International AG, Basel
Baloise Immobilien Management AG, Basel
Haakon AG, Basel
Baloise Life (Liechtenstein) AG, Balzers
Basler Saturn Management B.V., Amsterdam
Bâloise (Luxembourg) Holding S.A., Bertrange (Luxembourg)
Bâloise Delta Holding S.à.r.l., Bertrange (Luxembourg)
Baloise Fund Invest Advico, Bertrange (Luxembourg)
Baloise Alternative Investments Partner S.à r.l., Bertrange (Luxembourg)
Baloise Private Equity Partner S.à r.l., Bertrange (Luxembourg)
Baloise Finance (Jersey) Ltd, St. Helier (Jersey)
AboDeinAuto GmbH, Brandenburg an der Havel (Deutschland)
BEN Fleet Services GmbH, Karlsruhe (Deutschland)
1 Investments stated as a percentage are rounded down.
11. CURRENT INTEREST-BEARING LIABILITIES TO THIRD PARTIES
31.12.2020
Securities with security number
Bond 49 669 299
Bond 13 180 461
Total current interest-bearing liabilities
Total
shareholding
as at
31.12.2019
(with voting
rights)
Total
shareholding
as at
31.12.2020
(with voting
rights)
Share capital
as at
31.12.2020
Capital share
(per cent) 1
(per cent) 1
Currency
(million)
(million)
100.00
100.00
100.00
100.00
100.00
100.00
74.75
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
–
100.00
100.00
100.00
100.00
100.00
100.00
74.75
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
83.00
37.05
CHF
CHF
CHF
CHF
CHF
CHF
CHF
CHF
EUR
CHF
EUR
EUR
EUR
EUR
CHF
EUR
EUR
75.0
50.0
50.0
1.5
1.5
1.0
0.2
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.3
0.1
0.1
75.0
50.0
50.0
1.5
1.5
1.0
0.1
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.3
0.1
0.0
Interest rate
Issued
Maturity date
Amount CHF million
var.
25.09.2019
25.03.2021
3.000 %
07.07.2011
07.07.2021
125.0
250.0
375.0
297
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
12. LONG-TERM INTEREST-BEARING LIABILITIES TO THIRD PARTIES
31.12.2020
Securities with security number
Bond 19 469 508
Bond 20 004 482
Bond 26 139 906
Bond 45 809 797
Bond 49 669 296
Bond 49 669 297
Bond 49 669 298
Bond 55 333 181
Bond 55 333 182
Total long-term interest-bearing liabilities
13. TREASURY SHARES
2019
Balance as at 1 January
Purchases
Sales
Disposals in connection with share participation programmes
Balance as at 31 December
2020
Balance as at 1 January
Purchases
Sales
Disposals in connection with share participation programmes
Balance as at 31 December
298
Interest rate
Issued
Maturity date
Amount CHF million
2.000 %
1.750 %
1.125 %
0.500 %
0.000 %
0.000 %
0.000 %
0.250 %
0.500 %
12.10.2012
12.10.2022
26.04.2013
26.04.2023
19.12.2014
19.12.2024
28.01.2019
28.11.2025
25.09.2019
23.09.2022
25.09.2019
25.09.2026
25.09.2019
25.09.2029
16.07.2020
16.12.2026
16.07.2020
16.12.2030
150.0
225.0
150.0
200.0
200.0
100.0
125.0
175.0
125.0
1,450.0
Low
in CHF
High
in CHF
Average
share price
(CHF)
Number of
registered shares
1,405,292
133.80
187.00
172.86
1,154,590
0
– 56,789
2,503,093
Low
in CHF
High
in CHF
Average
share price
(CHF)
Number of
registered shares
2,503,093
105.70
183.30
162.76
625,027
0
– 48,777
3,079,343
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
14. CHANGES IN EQUITY
2019
CHF million
Balance as at 1 January
Allocation 2019
Dividend
Additions
Change in treasury shares
Recognition / reversal
Profit for the period
2020
CHF million
Balance as at 1 January
Allocation 2020
Dividend
Additions
Change in treasury shares
Recognition / reversal
Profit for the period
Share capital
Statutory retained earnings
Voluntary retained earnings
Treasury shares
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
4.9
11.7
6.4
–
–
–
–
–
–
–
–
–
–
–
–
566.1
119.0
–
–
–
– 1.9
–
683.2
412.6
– 119.0
– 292.8
–
–
–
551.7
552.5
– 206.7
–
–
–
–
–
– 397.7
– 191.0
– 191.0
Balance as at 31 December
4.9
11.7
Share capital
Statutory retained earnings
Voluntary retained earnings
Treasury shares
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
4.9
11.7
8.3
–
–
–
–
–
–
–
–
–
–
–
–
683.2
240.0
–
–
–
– 0.9
–
922.3
552.5
– 240.0
– 312.3
–
–
–
372.3
372.5
– 397.7
–
–
–
– 93.6
–
–
– 491.3
Balance as at 31 December
4.9
11.7
–
–
–
–
1.9
–
8.3
–
–
–
–
0.9
–
9.2
Total
equity
795.0
–
– 292.8
–
–
551.7
862.9
Total
equity
862.9
–
– 312.3
–
– 93.6
–
372.3
829.3
299
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
15. SIGNIFICANT SHAREHOLDERS
The information available to the Company reveals that the following significant shareholders and shareholder groups linked by
voting rights held long-term equity investments in the Company within the meaning of section 663c of the Swiss Code of Obligations
(OR) as at 31 December 2020:
Per cent
Shareholders
Chase Nominees Ltd. 3
BlackRock Inc.
UBS Fund Management AG
LSV Asset Management
Nortrust Nominees Ltd. 3
Norges Bank
Bank of New York Mellon N.V. 3
Credit Suisse Funds AG
Total
shareholding
as at
31.12.2019 1
Share of
voting rights
as at
31.12.2019 2
Total
shareholding
as at
31.12.2020 1
Share of
voting rights
as at
31.12.2020 2
8.4
>5.0
3.3
>3.0
3.2
–
4.2
3.1
2.0
<2.0
0.0
0.0
0.0
–
0.0
0.0
7.5
>5.0
>3.0
>3.0
3.0
>3.0
2.3
>3.0
2.0
1.0
2.0
0.0
0.0
0.0
0.0
2.0
1 According to SIX Swiss Exchange (https: / / www.six-exchange-regulation.com / en / home / publications / significant-shareholders.html).
2 According to the share register.
3 Custodian nominees who hold shares in trust for third parties are counted as part of the free float under the SIX Exchange regulations.
Such shareholder groups are not subject to disclosure requirements under Swiss stock market legislation.
16. CONTINGENT LIABILITIES
CHF million
Collateral, guarantee commitments
31.12.2019
31.12.2020
502.5
502.2
Bâloise Holding Ltd has issued the following letter of comfort:
As the owner of Baloise Life (Liechtenstein) AG, Bâloise Holding Ltd, Basel, has undertaken to ensure that its subsidiary Baloise
Life (Liechtenstein) AG is at all times in a financial position to meet in full its liabilities to its customers arising from the contracts
relating to its RentaSafe, BelRenta Safe, RentaProtect and RentaSafe Time products, especially its guarantee commitments.
Since October 2012, this letter of comfort has also applied to customers with contracts relating to RentaProtect Time and
RentaSafe Time (D-CHF) products that were sold by Baloise Life (Liechtenstein) AG. The maximum obligation amounts to the present
value of the outstanding guaranteed insurance benefits as at 31 December 2020. With effect from 1 July 2020, the portfolio of cus-
tomers from Switzerland using such products was transferred from Baloise Life (Liechtenstein) AG to Baloise Life Ltd. The letter of
comfort continues to apply to the transferred policies. The portfolio of customers from other countries, especially those from European
countries, remained with Baloise Life (Liechtenstein) AG. As at the balance sheet date, the expected insurance benefits were fully
backed by customer deposit accounts governed by individual agreements, reinsurance contracts and additional reserves.
300
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
Until at least 31 December 2021, Bâloise Holding Ltd will endeavour to ensure that the subsidiary Baloise Belgium has the resources
needed to maintain a defined Solvency II minimum level and that Baloise Belgium operates its business in such a way that it remains
solvent.
Until at least 31 December 2022, Bâloise Holding Ltd will endeavour to ensure that FRIDAY has the resources needed to
operate its business and that FRIDAY operates its business in such a way that it remains solvent. Until 31 December 2022, Bâloise
Holding Ltd will also endeavour to ensure that FRIDAY is able to fulfil the obligations vis-à-vis 7Ventures that are set out in the
investment agreement.
Bâloise Holding Ltd guarantees all obligations of Baloise Life Ltd relating to the various tranches of the subordinated bonds,
which had a total nominal value of CHF 500 million as at the balance sheet date.
Bâloise Holding Ltd is jointly and severally liable for the value-added tax (VAT) owed by all companies that form part of the
tax group headed by Baloise Insurance Ltd.
17. REMUNERATION PAID TO THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE COMMITTEE
The information to be disclosed in accordance with sections 663b (bis) and 663c of the Swiss Code of Obligations (OR) is contained
in the Remuneration Report, which can be found on pages 104 to 129 in the part of corporate governance. The key information
disclosed here includes
▸
▸
▸
▸
remuneration paid to the members of the Board of Directors,
remuneration paid to the members of the Corporate Executive Committee,
loans and credit facilities granted to members of the Board of Directors and the Corporate Executive Committee,
shares and options held by members of the Board of Directors and the Corporate Executive Committee.
18. NET REVERSAL OF HIDDEN RESERVES
No hidden reserves were reversed during the reporting period or in 2019.
19. EXEMPTIONS DUE TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
Because Bâloise Holding Ltd has prepared consolidated financial statements in accordance with recognised financial reporting
standards (IFRS), in accordance with statutory provisions (article 961d [1] of the Swiss Code of Obligations [OR]), it has dispensed
with the notes on long-term interest-bearing liabilities and audit fees as well as the presentation of a cash flow statement or
a management report in these annual financial statements.
20. EVENTS AFTER THE BALANCE SHEET DATE
On 4 February 2021, Bâloise Holding Ltd issued a bond with a total volume of CHF 250 million and a coupon of 0.15 per cent
(maturity period: 2021–2031, ISIN CH0593641068) as part of its funding activities.
By the time that these annual financial statements had been completed on 24 March 2021, we had not become aware of any
further events that would have a material impact on the annual financial statements as a whole.
301
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
Appropriation of distributable profit
as proposed by the Board of Directors
DISTRIBUTABLE PROFIT AND APPROPRIATION OF PROFIT
The profit for the period amounted to CHF 372,317,275.70.
The Board of Directors will propose to the Annual General Meeting that the Company’s distributable profit be appropriated
as shown in the table below.
CHF
Profit for the period
Profit carried forward from the previous year
Distributable profit
Proposals by the Board of Directors:
Dividend
Allocated to free reserves
Withdrawn from free reserves
Profit to be carried forward
2019
2020
551,688,704.77
372,317,275.70
770,322.44
139,027.21
552,459,027.21
372,456,302.91
– 312,320,000.00
– 312,320,000.00
– 240,000,000.00
– 60,000,000.00
–
–
139,027.21
136,302.91
The appropriation of profit is consistent with section 36 of the Articles of Incorporation. Each share confers the right to receive
a dividend of CHF 6.40 gross or CHF 4.16 net of withholding tax.
302
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Report of the statutory auditor
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone
Fax
www.ey.com/ch
+41 58 286 86 86
+41 58 286 86 00
To the Annual General Meeting of
Bâloise Holding Ltd, Basel
Basel, 24 March 2021
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements (pages 290 - 301) of Bâloise
Holding Ltd, which comprise the balance sheet, income statement and notes, for the year
ended 31 December 2020.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation of the financial statements in
accordance with the requirements of Swiss law and the company’s articles of incorporation.
This responsibility includes designing, implementing and maintaining an internal control
system relevant to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Board of Directors is further responsible for
selecting and applying appropriate accounting policies and making accounting estimates that
are reasonable in the circumstances.
Hier erscheint der Bericht der Revisionsstelle am 26. März 2021
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers the internal control system relevant to the entity’s preparation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control system. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made, as well as evaluating
the overall presentation of the financial statements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements for the year ended 31 December 2020 comply with
Swiss law and the company’s articles of incorporation.
Report on key audit matters based on the circular 1/2015 of the Federal Audit
Oversight Authority
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. For each
303
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone
Fax
+41 58 286 86 86
+41 58 286 86 00
www.ey.com/ch
To the Annual General Meeting of
Bâloise Holding Ltd, Basel
Basel, 24 March 2021
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements (pages 290 - 301) of Bâloise
Holding Ltd, which comprise the balance sheet, income statement and notes, for the year
ended 31 December 2020.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation of the financial statements in
accordance with the requirements of Swiss law and the company’s articles of incorporation.
This responsibility includes designing, implementing and maintaining an internal control
system relevant to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Board of Directors is further responsible for
selecting and applying appropriate accounting policies and making accounting estimates that
are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers the internal control system relevant to the entity’s preparation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control system. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made, as well as evaluating
the overall presentation of the financial statements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Report of the statutory auditor
Opinion
In our opinion, the financial statements for the year ended 31 December 2020 comply with
Swiss law and the company’s articles of incorporation.
Report on key audit matters based on the circular 1/2015 of the Federal Audit
Oversight Authority
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditor’s responsibility section of our
report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of
the financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the
financial statements.
Valuation of long-term equity investments
Area of focus Bâloise Holding Ltd accounts for long-term equity investments at cost
less necessary impairments and valued on an individual basis.
Management assesses whether there are any impairment losses in the
carrying value of the long-term equity investments by comparing the
carrying amount to the net asset value of the subsidiary or to a valuation
of the subsidiary using a discounted cash flow analysis. The
determination whether a long-term equity investment needs to be
impaired involves management’s judgement. This includes assumptions
about the profitability of the underlying business and growth. Long-term
equity investments amount to CHF 1.9 bn as of 31 December 2020 and
represent the most important balance of a total balance sheet of
CHF 3.6 bn.
We consider this a key audit matter not only due to the judgement
involved, but also based on the magnitude of the carrying value of the
long-term equity investments within the financial statements of Bâloise
Holding Ltd.
In relation to the key audit matter set out above, we assessed the
appropriateness of the company’s impairment testing methodology. We
audited management’s impairment test on the carrying value of each
investment, including the assessment of management’s assumptions.
We have audited the required disclosures in the notes to the financial
statements as at 31 December 2020.
Based on our audit procedures we did not identify exceptions with
regard to the valuation of long-term equity investments.
Our audit
response
304
Baloise Group Annual Report 2020
Bâloise Holding Ltd
Report of the statutory auditor
Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor
Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there
are no circumstances incompatible with our independence.
Opinion
In our opinion, the remuneration report for the year ended 31 December 2020 of Bâloise
Holding AG complies with Swiss law and articles 14–16 of the Ordinance.
In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we
confirm that an internal control system exists, which has been designed for the preparation of
financial statements according to the instructions of the Board of Directors.
Ernst & Young Ltd
We further confirm that the proposed appropriation of available earnings complies with Swiss
law and the company’s articles of incorporation. We recommend that the financial statements
submitted to you be approved.
Patrick Schwaller
Licensed audit expert
Christian Fleig
Licensed audit expert
(Auditor in charge)
Ernst & Young Ltd
Christian Fleig
Licensed audit expert
(Auditor in charge)
Patrick Schwaller
Licensed audit expert
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 317 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
305
Unterkapitel 4 Baloise
15 Review of operating performance
35 Sustainable business management
85 Corporate Governance
133 Financial Report
289 Bâloise Holding Ltd
307 General information
General
information
ALTERNATIVE PERFORMANCE MEASURES ................. 308
GLOSSARY ................................................................. 312
ADDRESSES ............................................................... 316
INFORMATION ON THE BALOISE GROUP ..................... 317
FINANCIAL CALENDAR AND CONTACTS ....................... 318
Unterkapitel Baloise Group Annual Report 2020
General information
Alternative Performance Measures
Alternative Performance Measures
In its financial publications, Baloise uses not only the figures
produced in accordance with International Financial Reporting
Standards (IFRS) but also alternative performance measures
(APMs). We believe that these APMs provide useful information
for investors and give a better understanding of our results.
Moreover, APMs help to measure performance, growth, profit-
ability and capital efficiency.
However, they should be viewed as supplementary information
and not as a substitute for the figures calculated in accordance
with IFRS.
Baloise uses the following alternative performance meas-
ures (APMs):
▸
▸
▸
▸
▸
▸
Return on equity (RoE)
Combined ratio (CR)
Annual premium equivalent (APE)
Value of new business (VNB)
New business margin (NBM)
Total assets under management (AuM)
Investors should note that similarly named APMs published by
other companies may have been calculated in a different way.
The comparability of APMs between companies may therefore
be limited.
Definitions and information about the use and limitations
of the aforementioned alternative performance measures can
be found below.
The Baloise Group’s latest financial publications can be
accessed online at any time at https://www.baloise.com/en/
home/investors/publications.html
DEFINITIONS, USAGE AND LIMITATIONS
Return on equity (RoE)
Definition and benefits
At Baloise, return on equity represents the profit attributable
to shareholders divided by average equity adjusted for the
dividend payment (the average of equity at the start of the period
[less the dividend paid] and at the end of the period). Equity is
not adjusted for unrealised gains and losses relating to changes
in the price of fixed-income securities.
One of the reasons why the Baloise Group uses RoE as a performance
measure is that it looks at both the Company’s profitability and its
capital efficiency.
Limitations
RoE includes line items that provide no or very little indication of
the management’s performance. Moreover, RoE is not available
at division or product level.
This performance measure’s usefulness is limited because
it is a relative measure and thus does not provide information
about the absolute level of profit for the period or the absolute
level of equity.
Combined ratio (CR)
Definition and benefits
The Baloise Group uses the combined ratio to gauge the
profitability of underwriting in the non-life insurance business.
It is the sum of acquisition costs and administrative expenses
(net*) and claim payments and insurance benefits (net), divided
by premiums earned (net). To provide an even better picture
of operating performance, Baloise makes adjustments for
interest-rate effects and provisions for impending losses. The
combined ratio is also adjusted for non-operating costs. These
interest-rate effects result from annuities in the non-life
business, while the provisions for impending losses relate to
future reporting periods. The level of adjustments is regularly
disclosed in Baloise’s presentation for investors and analysts.
The combined ratio is typically expressed as a percentage.
A ratio of less than 100 per cent means that the business is
profitable from an underwriting perspective, while a ratio of more
than 100 per cent indicates an underwriting loss. The combined
ratio can be broken down into the claims ratio including profit
sharing (loss ratio) and the expense ratio.
The claims ratio represents claims and insurance benefits (net),
divided by premiums earned (net). Again, the aforementioned
adjustments are made for interest-rate effects (resulting from
annuities in the non-life business) and provisions for impending
losses. The claims ratio therefore gives the percentage of net
premiums earned that are used for the settlement of claims.
*I.e. after deduction of the reinsurers’ share.
308
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Alternative Performance Measures
The expense ratio represents acquisition costs and administrative
expenses (net), adjusted for costs not attributable to the combined
ratio, relative to premiums earned (net). It gives the percentage
of net premiums earned that are needed to cover the underwrit-
ing expenses for the acquisition of new and renewal business
and to cover the administrative expenses.
Limitations
The combined ratio is used to measure underwriting profitability,
but does not indicate profitability in terms of investment perfor-
mance or non-operating performance. Even if the combined ratio
is above 100 per cent, the non-life segment may have still generated
a profit overall because it achieved a gain on investments or a
non-operating contribution to profit.
By its very nature, the usefulness of the combined ratio is
limited because it is a ratio and therefore does not provide any
information about the absolute level of the underwriting profit.
Annual premium equivalent (APE)
Definition and benefits
The annual premium equivalent is a performance measure used
in the life segment that shows all premium income from new
business, both from single premiums and from regular premiums.
The Baloise Group calculates APE as the sum of the annual
premiums earned from new business plus 10 per cent of the
single premiums received during the reporting period.
Limitations
Comparability with the APE of other companies is limited because
they define new business differently.
Value of new business (VNB)
Definition and benefits
VNB is a performance measure used in the life segment and
indicates the increase in value generated by underwriting new
business in the current period. It is defined as the present value
of future profits after acquisition costs, less the fair value of
options and guarantees. This involves forecasting lapses,
mortality, disability and expenses up to the due date of insurance
contracts, using the latest capital market data and best estimates.
VNB relates to the time at which the individual contract is formed.
Limitations
Future profits are estimates based on assumptions and may
therefore differ from the profits actually generated in the
future. They are calculated using risk-free interest rates that
are based on the latest market data. The actual future interest
rates and market data may differ. There may also be variation
in, for example, the assumptions about customers’ future
behaviour. Moreover, the long forecast period may result in
uncertainties as future changes to regulatory requirements
or in the market environment, for example, may not have been
factored into the forecast.
New business margin (NBM)
Definition and benefits
The new business margin is used to measure the profitability
of new business in the life segment. It is the value of new
business (VNB) divided by the annual premium equivalent (APE).
Limitations
As the new business margin is calculated from the value of new
business and annual premium equivalent, its usefulness is
subject to the same limitations as those measures.
Total assets under management (AuM)
Definition and benefits
The assets under management are the assets or security port-
folios measured at fair value, in respect of which Baloise Asset
Management makes investment decisions or bears responsibil-
ity for portfolio management. They are managed on behalf of
third parties and on behalf of the Baloise Group. As a rule, the
level of AuM is reflected in the level of fee income, making it an
important measure of the performance of our asset management
activities over time and in comparison with other companies.
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Alternative Performance Measures
Changes in assets under management are essentially driven by
net new assets, market factors, the effects of consolidation and
deconsolidation, and exchange-rate effects.
Net new assets equates to the sum of assets of new customers
and additional contributions from existing customers, less with-
drawals from customer accounts, closures of such accounts and
distributions to investors.
Limitations
The level of assets under management is subject to volatility
resulting from movements in the capital markets. For example,
assets under management may continue to increase when
interest rates fall, even if the figure for net new assets is negative.
This limits the usefulness of this performance measure.
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Alternative Performance Measures
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Glossary
Glossary
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Claims ratio
The total cost of claims settled as a percentage of total
premiums.
Claims reserve
A reserve for claims that have not been settled by the end
of the year.
Combined ratio
A non-life insurance ratio that is defined as the sum of the
cost of claims settled (claims ratio), total expenses (expense
ratio) and profit sharing (profit-sharing ratio) as a percentage
of total premiums. This ratio is used to gauge the profitability
of non-life insurance business.
Deferred taxes
Probable future tax expenses and tax benefits arising from
temporary differences between the carrying amounts of
assets and liabilities recognised in the consolidated financial
statements and the corresponding amounts reported for tax
purposes. The pertinent calculations are based on coun-
try-specific tax rates.
Expense ratio
Non-life insurance business expenses as a percentage of
total premiums.
Fixed-income securities
Securities (primarily bonds) that yield a fixed rate of interest
throughout their term to maturity.
Actuarial reserves
Actuarial reserves are the reserves set aside to cover current
life insurance policies.
Annual premium equivalent
The annual premium equivalent (APE) is the insurance
industry standard for measuring the volume of new life
insurance business. It is calculated as the sum of the annual
premiums earned from new business plus 10 per cent of
the single premiums received during the reporting period.
Baloise
“Baloise” stands for “the Baloise Group”, and “Bâloise
Holding” means “Bâloise Holding Ltd”. Baloise shares are
the shares of Bâloise Holding Ltd.
Broker
Insurance brokers are independent intermediaries. These are
firms or individuals who are not restricted to any particular
insurance companies when selling insurance products. They
are paid commission for the insurance policies that they sell.
Business volume
The total volume of business comprises the premium income
earned from non-life and life insurance and from invest-
ment-linked life insurance policies during the reporting
period. The accounting principles used by the Baloise Group
do not allow premium income earned from investment-linked
life insurance to be reported as revenue in the consolidated
financial statements.
Claims incurred
Claims incurred comprise the amounts paid out for claims
during the financial year, the reserves set aside to cover
unsettled claims, the reversal of reserves for claims that
no longer have to be settled or do not have to be paid in
full, the costs incurred by the processing of claims, and
changes in related reserves.
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Glossary
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Gross
The gross figures shown on the balance sheet or income
statement in an insurance company’s annual report are
stated before deduction of reinsurance.
Group life business
Insurance policies taken out by companies or their employee
benefit units for the occupational pension plans of their
entire workforce.
Impairment
An asset write-down that is recognised in profit or loss.
An impairment test is carried out to ascertain whether an
asset’s carrying amount is higher than its recoverable
amount. If this is the case, the asset is written down to its
recoverable amount and a corresponding impairment loss
is recognised in the income statement.
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Investment-linked life insurance
Life insurance policies under which policyholders invest
their savings for their own account and at their own risk.
Investment-linked premium
Premium income from life insurance policies under which
the insurance company invests the policyholder’s savings
for the latter’s own account and at his or her own risk.
The International Financial Reporting Standards applied
by the Baloise Group do not allow the savings component
of this premium income to be recognised as revenue on
the income statement.
Legal quota
A legally or contractually binding percentage requiring life
insurance companies to pass on a certain share of their
profits to their policyholders.
Insurance benefit
The benefits provided by the insurer in connection with the
occurrence of an insured event.
▸ Minimum interest rate
The minimum guaranteed interest rate paid to savers under
occupational pension plans.
International Financial Reporting Standards
Since 2000 the Baloise Group has been preparing its con-
solidated financial statements in compliance with Inter-
national Financial Reporting Standards (IFRS), which were
previously called International Accounting Standards (IAS).
Investments
Investments comprise investment property, equities and
alternative financial assets (financial instruments with
characteristics of equity), fixed-income securities (financial
instruments with characteristics of liabilities), mortgage
assets, policy loans and other loans, derivatives, and cash
and cash equivalents.
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Net
The net figures shown on the balance sheet or income
statement in an insurance company’s annual report are
stated after deduction of reinsurance.
New business margin
The value of new business divided by the annual premium
equivalent (APE).
Operating segments
Similar or related business activities are grouped together
in operating segments. The Baloise Group’s operating
segments are Non-Life, Life, Banking (which includes asset
management), and Other Activities. The “Other Activities”
operating segment includes equity investment companies,
real estate firms and financing companies.
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Glossary
Performance of investments
Performance in this context is defined as the rates of return
that Baloise generates from its investments. It constitutes
the gains, losses, income and expenses recognised in the
income statement plus changes in unrealised gains and losses
as a percentage of the average portfolio of investments held.
Periodic premium
Periodically recurring premium income (see definition of
“premium”).
Policyholder’s dividend
An annual, non-guaranteed benefit paid to life insurance
policyholders if the revenue generated by their policies is
higher and / or the risks and costs associated with their
policies are lower than the assumptions on which the
calculation of their premiums was based.
Premium
The amount paid by the policyholder to cover the cost of
insurance.
Premium earned
The proportion of the policy premium available to cover the
risk insured during the financial year, i. e. the premium minus
changes in unearned premium reserves.
Profit after taxes
Profit after taxes is the consolidated net result of all income
and expenses, minus all borrowing costs as well as current
income taxes and deferred taxes. Profit after taxes includes
non-controlling interests.
Profit-sharing ratio
Total profit sharing as a percentage of total premiums; profit
sharing is defined as the reimbursement of amounts to non-life
policyholders to reflect the profitability of insurance policies.
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Reinsurance
If an insurance company itself does not wish to bear the full
risk arising from an insurance policy or an entire portfolio
of policies, it passes on part of the risk to a reinsurance
company or another direct insurer. However, the primary
insurer still has to indemnify the policyholder for the full
risk in all cases.
Reserves
A measurement of future insurance benefit obligations
arising from known and unknown claims that are reported
as liabilities on the balance sheet.
Return on equity
A calculation of the percentage return earned on a company’s
equity capital during a financial year; it represents the profit
generated in a given financial year divided by the company’s
average equity during that period.
Risk scoring
Risk scoring uses analytical statistical methods to derive risk
assessments from collected data based on empirical values.
Insurance companies use this kind of scoring to ensure that
the premiums they charge reflect the risks involved.
Run-off business
An insurance policy portfolio that has ceased to accept new
policies and whose existing policies are gradually expiring.
Segment
Financial reporting in the Baloise Group is carried out in
accordance with International Financial Reporting Standards
(IFRSs), which require similar transactions and business
activities to be grouped and presented together. These
aggregated operating activities are presented in “segments”,
broken down by geographic region and business line.
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Glossary
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Share buy-back programme
Procedure approved by the Board of Directors under which
Baloise can repurchase its own outstanding shares. Companies
in Switzerland open a separate trading line in order to carry
out such buy-backs.
Shares issued
The total number of shares that a company has issued;
multiplying the total number of shares in issue by their face
value gives the company’s nominal share capital.
Single premium
Single premiums are used to finance life insurance policies
at their inception in the form of a one-off payment. They are
mainly used to fund wealth-building life insurance policies,
with the prime focus on investment returns and safety.
Swiss Leader Index
The Swiss Leader Index (SLI) comprises the 30 largest and
most liquid equities on the Swiss stock market.
Solvency
Minimum capital requirements that the regulatory authori-
ties impose on insurance companies in order to cover their
business risks (investments and claims). These requirements
are usually specified at a national level and may vary from
country to country.
Technical reserve
Insurers disclose on their balance sheets the value of the
benefits that they expect to have to provide in future under
their existing insurance contracts. This value is calculated
from a current perspective in accordance with generally
accepted principles.
Technical result
Baloise calculates its technical result by netting all income and
expenses arising from its insurance business. Its technical
result does not include income and expenses unrelated to its
insurance business or the net gains or losses on its investments.
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Unearned premium reserves
Deferred income arising from premiums that have already
been paid for periods after the balance sheet date.
Unrealised gains and losses (recognised directly in equity)
Unrealised gains and losses are increases or decreases in
value that are not recognised in profit or loss and arise from
the measurement of assets. They are recognised directly in
equity after deduction of deferred policyholders’ dividends
(life insurance) and deferred taxes. These gains or losses are
only taken to income if the underlying asset is sold or if
impairment losses are recognised.
Value of new business
The value added by new business transacted during the
reporting period; this figure is measured at the time the
policy is issued.
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Addresses
Addresses
SWITZERLAND
Basler Versicherungen
Aeschengraben 21
Postfach
CH-4002 Basel
Tel. + 41 58 285 85 85
kundenservice@baloise.ch
www.baloise.ch
Baloise Bank SoBa AG
Amthausplatz 4
Postfach 262
CH-4502 Solothurn
Tel. + 41 58 285 33 33
bank@baloise.ch
www.baloise.ch
Baloise Asset Management AG
Aeschengraben 21
Postfach
CH-4002 Basel
assetmanagement@baloise.com
www.baloise-asset-management.com
MOVU
Okenstrasse 6
CH-8037 Zürich
Tel. + 41 44 505 14 14
captain@movu.ch
www.movu.ch
316
GERMANY
Basler Versicherungen
Basler Strasse 4
D-61345 Bad Homburg
Tel. + 49 61 72 130
info@basler.de
www.basler.de
FRI:DAY
Friedrichstraße 70
D-10117 Berlin
Tel. + 49 30 959 983 20
info@friday.de
www.friday.de
LUXEMBOURG
Bâloise Assurances
23, rue du Puits Romain
Bourmicht
L-8070 Bertrange
Tel. + 352 290 190 1
info@baloise.lu
www.baloise.lu
BELGIUM
Baloise Insurance
Posthofbrug 16
B-2600 Antwerp
Tel. + 32 3 247 21 11
info@baloise.be
www.baloise.be
MOBLY
Posthofbrug 6 – 8
Box 5 / 102
B-2600 Antwerp
Tel. + 32 3 376 01 10
info@mobly.be
www.mobly.be
Baloise Group Annual Report 2020
General information
Information on the Baloise Group
Information on the Baloise Group
The 2020 Annual Report is also available in German. Only the
German text is legally binding. The Financial Report contains
the audited 2020 annual financial statements together with
detailed information. The annual report contains all of the
elements that, in accordance with section 961c of the Swiss
Code of Obligations, make up the management report. This
publication was produced by the Baloise Group and may not
be copied, amended, offered, sold or made available to third
parties without the express authorisation of the Baloise Group.
Amounts and ratios shown in this annual report are generally
stated in millions of Swiss francs (CHF million) and rounded
to one decimal place. Consequently, the sum total of amounts
that have been rounded may in some cases differ from the
rounded total shown in this report.
The companies of the Baloise Group and its decision-making
bodies, employees, agents and other persons do not accept any
liability for the accuracy, completeness or appropriateness of the
information contained in this publication. Specifically, no liability
is accepted for any loss or damage resulting from the direct or
indirect use of this information. This publication constitutes
neither an offer nor a request to exchange, purchase or subscribe
to securities; nor does it constitute an issue or listing prospectus.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
The sole purpose of this publication is to provide a review in
summarised form of the operating performance of Baloise for
the period indicated. To this end, the publication also draws on
external sources of information (including data). Baloise neither
guarantees nor does it recognise the accuracy of such informa-
tion. Furthermore, this publication may contain forward-looking
statements that include forecasts or predictions of future events,
plans, goals, business developments and results and are based
on Baloise’s current expectations and assumptions. These
forward-looking statements should be noted with due caution
because they inherently contain both known and unknown risks,
are subject to uncertainty and may be adversely affected by
other factors. Consequently, business performance, results,
plans and goals could differ substantially from those presented
explicitly or implicitly in these forward-looking statements.
Factors that could influence actual outcomes include, for example,
(i) changes in the overall state of the economy, especially in key
markets; (ii) financial market performance; (iii) competitive factors;
(iv) changes in interest rates; (v) exchange rate movements; (vi)
changes in the statutory and regulatory framework, including
accounting standards; (vii) frequency and magnitude of claims as
well as trends in claims history; (viii) mortality and morbidity rates;
(ix) renewal and expiry of insurance policies; (x) legal disputes
and administrative proceedings; (xi) departure of key employees;
and (xii) negative publicity and media reports. This list is not
considered exhaustive. Baloise accepts no obligation to update
or revise forward-looking statements in order to take into consid-
eration new information, future events, etc. Past performance is
not indicative of future results.
AVAILABILITY AND ORDERING
The 2020 Annual Report and the Summary of the 2020 Annual
Report will be available from 30 March 2021 on the internet at
www.baloise.com/annual-report
Corporate publications can be ordered either on the internet
or by post from the Baloise Group, Corporate Communications,
Aeschengraben 21, 4002 Basel, Switzerland.
www.baloise.com/order
INFORMATION FOR SHAREHOLDERS AND
FINANCIAL ANALYSTS
Detailed information and data on Baloise shares, the IR agenda,
the latest presentations and how to contact the Investor Relations
team can be found on the internet at www.baloise.com/investors
This information is available in German and English.
INFORMATION FOR MEMBERS OF THE MEDIA
You will find the latest media releases, presentations, reports,
images and podcasts of various Baloise events as well as media
contact details at www.baloise.com/media
© 2021 Bâloise Holding Ltd, 4002 Basel, Switzerland
Publisher Bâloise Holding Ltd
Corporate Communications & Investor Relations
Concept, design NeidhartSchön AG, Zurich
Photography Dominik Plüss, Basel
Publishing mms solutions ag, Zurich
English translation LingServe Ltd (UK)
317
Baloise Group Annual Report 2020
General information
Financial calendar and contacts
Financial calendar and contacts
30 APRIL 2021
Annual General Meeting
Bâloise Holding Ltd
26 AUGUST 2021
Half-year financial results
Conference call for analysts and the media
Publication of the 2021 half-year report
18 NOVEMBER 2021
Q3 interim statement
10 MARCH 2022
Preliminary annual financial results
Media conference
Conference call for analysts
29 MARCH 2022
Annual Report
Publication of the 2021 annual report
29 APRIL 2022
Annual General Meeting
Bâloise Holding Ltd
Corporate Governance
Philipp Jermann
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 58 285 89 42
philipp.jermann@baloise.com
Investor Relations
Markus Holtz
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 58 285 81 81
investor.relations@baloise.com
Media Relations
Roberto Brunazzi
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 58 285 82 14
media.relations@baloise.com
Public Affairs & Sustainability
Dominik Marbet
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 58 285 84 67
dominik.marbet@baloise.com
www.baloise.com
318
Bâloise Holding Ltd
Aeschengraben 21
CH-4002 Basel, Switzerland
www.baloise.com