Plain-text annual report
ANNUAL REPORT
2021
Baloise Group
Baloise Group Geschäftsbericht 2021
Finanzbericht
Unterkapitel Baloise Group Annual Report 2021
Contents
BALOISE
Overview of the reporting environment .................................. 4
Baloise key figures .................................................................. 6
At a glance ............................................................................... 7
Letter to shareholders ............................................................. 8
REVIEW OF OPERATING PERFORMANCE
Overview of target attainment, profit and
business volume .................................................................. 12
Core insurance business ...................................................... 14
Asset management & banking .............................................. 16
Ecosystems & innovation ...................................................... 17
Outlook ................................................................................. 19
Consolidated income statement .......................................... 20
Consolidated balance sheet ................................................. 22
Business volume, premiums and combined ratio ............... 23
Technical income statement ................................................ 25
Gross premiums by sector ..................................................... 26
Banking activities ................................................................. 27
Investment performance ...................................................... 28
RISK MANAGEMENT
Risk management – a key pillar of our value creation ......... 32
CORPORATE GOVERNANCE
Corporate Governance Report .............................................. 38
Appendix 1: Remuneration Report ....................................... 57
Appendix 2: Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ....... 80
FINANCIAL REPORT
Consolidated balance sheet ................................................. 84
Consolidated income statement .......................................... 86
Consolidated statement of comprehensive income ............ 87
Consolidated cash flow statement ....................................... 88
Consolidated statement of changes in equity ..................... 90
Notes to the consolidated annual financial statements ...... 92
Notes to the consolidated balance sheet .......................... 168
Notes to the consolidated income statement .................... 210
Other disclosures ............................................................... 221
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 232
BÂLOISE HOLDING LTD
Income statement of Bâloise Holding Ltd .......................... 240
Balance sheet of Bâloise Holding Ltd ................................ 241
Notes to the financial statements of Bâloise Holding Ltd .. 242
Appropriation of distributable profit as proposed
by the Board of Directors ................................................... 251
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ..... 252
GENERAL INFORMATION
Alternative Performance Measures .................................... 258
Glossary ............................................................................. 262
Addresses ........................................................................... 266
Information on the Baloise Group ...................................... 267
Financial calendar and contacts ........................................ 268
3
Baloise Group Annual Report 2021
Baloise
Overview of the reporting environment
Overview of the reporting environment
Overview of Baloise’s external reporting
The external reporting procedures of Baloise are based on relevant statutory and regulatory requirements and applicable standards
and guidelines, such as those issued by the International Accounting Standards Boards and SIX Swiss Exchange, where the
shares of Bâloise Holding Ltd are listed.
The Annual Report forms the core of the reporting activities and comprises the management report, the financial report and the
income statement of Bâloise Holding Ltd. The review of the financial year also serves to provide a holistic view of the added value
generated by Baloise under its value creation model. This model is based on the integrated reporting framework ( Framework) of
the International Integrated Reporting Council (IIRC).
REPORTING PROCESSES IN DETAIL
Annual Report of Baloise
The Annual Report of the Baloise Group comprises the management review of the operating performance,
the corporate governance report, the remuneration report and the financial report. The financial report
contains the consolidated annual financial statements of the Baloise Group and the income statement
of Bâloise Holding Ltd.
Review of the financial year at Baloise
The review of the financial year of the Baloise Group provides an overview of important financial key
figures as well as comprehensive information on Baloise and its strategy. The report outlines the
value creation of Baloise across the six resources of the value creation model (investors, employees,
customers, partners, environment and society) and the four framework processes (IT, compliance,
corporate governance and risk management). The aim of the report is to provide an integrated view
of Baloise’s value creation.
Presentation for financial analysts
The presentation for financial analysts is designed specifically for investors. It is made available only
on our website and exclusively in English, and it provides detailed information on the financial per-
formance of Baloise and its individual operating segments and strategic business units.
The reports published by the Baloise Group are also available online at
www.baloise.com/annual-report.
Continuous reporting
In addition, Baloise uses its website, www.baloise.com, to share updates on various initiatives and
activities as well as background stories about the implementation of its strategy on an ongoing basis.
Reporting by national units
In some cases, national units of Baloise publish their own external reports in accordance with the
statutory and regulatory requirements of the jurisdiction in which they operate. These reports are
published on the websites of Baloise Insurance Belgium www.baloise.be/fr/a-propos-de-nous,
Basler Versicherungen in Germany www.basler.de/de/ueber-uns and Basler Versicherungen in
Switzerland www.baloise.com/en/home/investors/publications/financial-condition-report respec-
tively.
ANNUAL REPORT
2021
Baloise Group
ANNUAL REVIEW
2021
Baloise Group
Annual Results 2021
Presentation to Investors and Analysts
Based on 2021 Preliminary Figures
Basel, 10 March 2022
4
Baloise Group Annual Report 2021
Baloise
This page has been left empty on purpose.
5
Baloise Group Annual Report 2021
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)
2020
2021
Change (%)
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
4,063.4
3,389.7
7,453.1
2,138.0
9,591.1
303.9
406.7
82.5
– 70.5
583.3
48,585.0
48,661.4
6,985.7
7,299.9
6.4
91.7
91.2
42.7
3.0
294.5
125.9
8.3
99.3
92.6
39.0
1.4
340.5
133.1
48,800,000
45,800,000
9.65
9.63
155.1
157.50
7,686.0
6.40
13.06
13.05
161.7
149.10
6,828.8
7.00
6.9
3.0
5.1
16.7
7.4
0.6
44.1
3.9
15.6
36.2
0.2
4.5
–
–
–
–
–
15.6
5.7
– 6.1
35.3
35.5
4.3
– 5.3
– 11.2
9.4
1 Premiums written and policy fees (gross).
2 Of which deferred gains / losses from other operating segments (31 December 2020: CHF – 3.2 million; 31 December 2021: CHF – 2.5 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 2021 based on the proposal submitted to the Annual General Meeting.
6
Baloise Group Annual Report 2021
Baloise
At a glance
At a glance
Profit attributable to
shareholders
CHF 588.4 million
Equity of
CHF 7,299.9 million
Dividend of
CHF 7.00 per share
(proposal to the
Annual General Meeting
on 29 April 2022)
Cash upstream
CHF 431 million
Net combined ratio of
92.6 per cent
7.4 per cent
increase in the volume
of business
New business margin
in the life busness of
39.0 per cent
Net investment yield on
insurance asset of
2.2 per cent
81 per cent
of employees
recommend Baloise
as an employer
– 20 per cent
reduction in carbon
emissions since 2017
+ 223,000
additional customers
75 per cent
A-AAA MSCI ESG
rating for rated insurance
investments
7
Baloise Group Annual Report 2021
Baloise
Letter to shareholders
Letter to shareholders
Dr Thomas von Planta, Chairman of the Board of Directors (right), and Gert De Winter, Group CEO (left), with a view from the first floor of the Group
headquarters at Baloise Park.
DEAR SHAREHOLDERS,
Baloise achieved strong results in 2021, reporting a profit
attributable to shareholders of CHF 588.4 million, and is in an
excellent position for the start of Simply Safe: Season 2. All
operating segments and units contributed to this improved
result. In the life insurance business, we also benefited from
rising interest rates. The result affirms the success of our busi-
ness model, which is based on sustainable value creation.
Insurance is all about managing risk. What sets Baloise apart
is that we aim for and achieve sustainable success for everyone:
customers, employees and shareholders. Our stakeholders can
rely on this stability, especially in difficult times.
The ongoing measures to tackle the coronavirus pandemic
continued to put a strain on employees and customers in 2021.
Much of the past year was marked by extreme weather events
in Europe. Hailstorms, strong winds, heavy rain and the asso-
ciated flooding took their toll on those affected, who included
our customers in Belgium, Germany, Luxembourg and Switzer-
land. The exceptional weather events were also very challenging
for many of our employees who were there by our customers’
side, ready to support them during this stressful time. The record
storm damage reduced profit by CHF 121 million, making it the
biggest ever loss event in the history of Baloise. But we still
achieved a strong set of figures even in this difficult environment.
This once again illustrates the stability and resilience of our
balance sheet, the effectiveness of our risk management and
the performance of our employees, who deserve our very special
thanks.
Goals as drivers of the transformation
At the close of last year, we successfully completed Simply Safe:
Season 1 and transitioned smoothly to the next strategic phase:
Simply Safe: Season 2. Building on what we have achieved so
far, we are aiming for more growth and to be an important part
of people’s lives as a service provider. The three strategic targets
have been retained and are now even more ambitious. By 2025,
we are 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 to have generated CHF 2 billion in cash. The experience
gained from Simply Safe: Season 1 has shown that ambitious
targets accelerate Baloise’s transformation. During our strategic
8
Baloise Group Annual Report 2021
Baloise
Letter to shareholders
journey, the Company has gained a lot of momentum, enabling
us to operate sustainably and effectively for all stakeholders.
In this context, we are also monitoring the conflict in Ukraine
and its potential implications very carefully. In the short term,
what is happening there will not impact on our business, as
Baloise does not operate in Ukraine or Russia and has only a
small investment exposure to Russia. What remains unclear at
this stage is how the conflict will affect economies in Europe,
and thus our customers, over the medium term.
“Ambitious goals accelerate the
transformation”
The roll-out of the global vaccination campaign against
coronavirus that began in spring 2021 was reflected in a positive
response from the markets. The Baloise share price stood at
CHF 168.80 on 8 March 2021, following a strong performance
in the first four years of ’Simply Safe: Season 1’, but came under
increasing pressure over the course of the year.
In 2021, we also embedded sustainability even more deeply
within our business processes. The Baloise value creation model
has been the basis of our value generation for all stakeholders
since 2018. While excellent progress has been made in the area
of responsible investment, we are now also turning our attention
to underwriting. The question of which risks we are able and
willing to insure in future not only affects the stability of Baloise
but can also help to nudge the behaviour of our customers
towards acting in a more sustainable way. The challenges we
face in this regard will become even greater in future. This is
one reason why the Board of Directors is adapting and reorga-
nising its committee structure. Changes include transforming
the Chairman’s Committee into a Strategy and Governance
Committee in order to address the strategic topics that will be
relevant going forward.
A sustainable approach in policymaking
However, more sustainability is also required in policymaking to
strengthen the stability of national economies and to ensure an
equitable society. In Switzerland, we are once again facing
attempts to place the funding of pensions on a sustainable footing.
For years, there has been generational cross-subsidisation where
those currently in work are funding the pensions of those who
have retired because too much has been promised and current
returns are too low. Parameters set by the state such as the
conversion rate, minimum returns and the inflexible retirement
age are partly to blame. Today’s contribution payers are bearing
the ever-increasing burden of successive failures to implement
the necessary reforms. This makes it all the more important that
efforts to reform the pension system should succeed.
Arming ourselves against future large risks is also important.
Insurance can be part of the solution here. The coronavirus
pandemic has shown that we can rely on the support of the state
in a crisis. However, it is not sustainable always to turn to the
state – and thus ultimately to taxpayers – after a crisis has
already happened. Insurance companies have the specialist
expertise required to identify, assess and prevent risks and to
deal with large-scale loss events. The industry brought this
expertise to bear when it came to covering losses from future
pandemics with pandemic insurance. Unfortunately, policy-
makers currently rely on mitigating damage after the event, using
taxpayers’ money. Government and business should work
together to develop solutions for preventing major risks. We are
prepared to contribute our know-how and to play our part for
society.
As ’Simply Safe: Season 1’ comes to an end, Baloise is
starting the next phase of its ’Simply Safe’ strategic journey
with a strong set of results. Stability, reliability, growth, inno-
vation and sustainable value creation combined with a motivated
workforce and a focus on customers and services are what set
us apart. We will continue with this approach in the future. And
you, our shareholders, should also be able to continue reaping
the benefit in future. The Annual General Meeting will therefore
be asked to approve an increase in the dividend of CHF 0.60 to
CHF 7.00 this year.
Basel, March 2022
Dr Thomas von Planta
Gert De Winter
Chairman of the Board of Directors
Group CEO
9
10
Review of
operating
performance
BALOISE HEADS INTO THE ’SIMPLY SAFE: SEASON 2’
STRATEGIC PHASE WITH A STRONG PROFIT FOR THE
PERIOD ........................................................................ 12
Overview of target attainment, profit and
business volume ............................................................... 12
Core insurance business ................................................... 14
Asset management & banking ............................................ 16
Ecosystems & innovation .................................................... 17
Outlook ............................................................................ 19
Consolidated income statement ........................................ 20
Consolidated balance sheet .............................................. 22
Business volume, premiums and combined ratio .............. 23
Technical income statement .............................................. 25
Gross premiums by sector .................................................. 26
Banking activities ............................................................. 27
Investment performance ................................................... 28
11
Baloise Group Annual Report 2021
Review of operating performance
Baloise heads into the ’Simply Safe: Season 2’
strategic phase with a strong profit for the period
In 2021, we successfully completed the first stage of our ’Simply Safe’ strategy. We made tremendous
strides with our three strategic targets in relation to employees, customers and shareholders while also
reporting robust results from operations over the entire period. This is an incredibly positive outcome
given that we faced huge challenges during this strategic period in the shape of two once-in-a-century
events: the COVID-19 pandemic and the storms in summer 2021. At the same time, we pushed ahead with
Baloise’s cultural and digital transformation. We collaborate more efficiently, have become faster, make
greater use of digital technologies, are easier to interact with for our customers and by establishing the
Home and Mobility ecosystems, have laid the foundations for our future business model.
OVERVIEW OF TARGET ATTAINMENT, PROFIT AND
BUSINESS VOLUME
Completion of the 2017–2021 strategic phase
The ’Simply Safe’ strategic phase began in 2017 with three ambi-
tious targets related to employees, customers and shareholders,
heralding the Company’s strategic realignment and transformation.
In a changing society, we want to further strengthen our core
business by providing innovative solutions that extend beyond
traditional insurance. This first phase ended in 2021 and we can
look back with pride on our achievements.
Employees
Baloise had set itself the target of becoming an industry leader in
terms of employer attractiveness and being among the top 10 per
cent of employers in the European finance industry. From our
starting position of being among the top 30 per cent of employers,
we managed to break into the top 8 per cent in 2020 thanks to a
number of measures. Aspects particularly appreciated by employ-
ees include the excellent working relationships and the high level
of experience and skills. These outstanding results continued until
early summer 2021, but in the December survey, Baloise slipped
down the rankings to a position in the top 24 per cent of employers.
This fall was primarily due to the increased workload arising from
the once-in-a-century summer storms and the ongoing pandemic
situation. In view of the long-term trend of recent years, which
shows a clear improvement in Baloise’s attractiveness as an
employer, and the high proportion of employees who would
recommend Baloise as a place to work (over 80 per cent in
December 2021), we are encouraged to continue on our chosen
course and to set an even higher target of being in the top 5 per
cent of employers in Europe.
Customers
On Investor Day in 2016, we announced our target of one million
additional customers by 2021. We very nearly achieved this very
ambitious target, adding 961 thousand new customers through
organic growth. The number of customers grew by a further
0.5 million or so as a result of our acquisitions in Belgium. These
are not included in the target attainment. By adding around one
million new customers through organic growth, we have achieved
consid erable success and reversed what had previously been a
downward trend. It is particularly encouraging that this has
happened through new initiatives and in all business units.
Moreover, cross-selling and up-selling provide us with further
potential to increase business with the new customers. Bolstered
by this success, we are ratchet ing up our ambition even further for
the next strategic phase and are aiming to attract an additional
1.5 million customers within four years.
Shareholders
Baloise had set itself the target of transferring a total of
CHF 2 billion in cash to the holding company in the period 2017 to
2021. This is based on well diversified and sustainable improved
earnings power from the life and non-life business, and from asset
12
Baloise Group Annual Report 2021
Review of operating performance
management & banking. Shareholders benefited directly from the
cash generated thanks to the rigorous adherence to an attractive
and sustainable dividend policy – the dividend has been raised
by more than a third – and from the repurchase and cancellation
of three million treasury shares with a total value of CHF
481.1 million. Furthermore, investments were made in new strategic
projects that open up new opportunities to generate additional
income. During the ’Simply Safe’ strategic phase, Baloise trans-
ferred a total of CHF 2,173 million in cash to the holding company,
thereby exceeding its objective. The new target is to generate CHF
2 billion in cash by 2025. As this is to be achieved over four years,
this equates to an increase of 25 per cent.
Profit
Profit attributable to shareholders for 2021 amounted to
CHF 588.4 million, a substantial year-on-year increase of 35.5
per cent (2020: CHF 434.3 million). The life business made a
signifi cant contribution to this growth.
In summer 2021, torrential rain and flooding in Baloise’s
markets resulted in the biggest volume of claims in the Company’s
history. Expenses were also incurred in connection with measures
to contain the COVID-19 pandemic. Baloise has thus helped tens
of thousands of customers to cushion the financial impact of these
crisis situations over the past two years.
The upturn in the capital markets, the rise in interest rates, a
slightly reduced tax burden and the strong profitability of the life
and non-life businesses – underlining the Company’s operational
excellence – are counteracting the effects of the once-in-a-century
claim events.
Earnings before interest and tax (EBIT) increased by 19.8 per
cent to CHF 722.5 million (2020: CHF 602.9 million) thanks to the
very strong earnings of the life business. Switzerland accounted
for the biggest share of the Group’s EBIT, reporting a figure of
CHF 584.6 million. The EBIT of the German unit deserves particular
mention as it more than doubled year on year to reach CHF
42.5 million, despite the high volume of flood-related claims.
Business volume and combined ratio
The growth in the volume of business was again encouraging. The
volume generated by all the business units together, across the
non-life and life businesses, rose by 7.4 per cent to CHF 9,591.1
million (2020: CHF 8,926.5 million). This equated to an increase
of 6.9 per cent in local currency terms. The main driver was the
good level of organic growth in all national subsidiaries, particularly
the attractive non-life business. Another contributing factor was
the full integration of the non-life portfolio of Athora in Belgium.
The sustained profitability of this growth can be seen from
the net combined ratio of 92.6 per cent, which includes the
exceptionally high level of claims incurred (approximately
CHF 120 million) in connection with the summer storms. These
claims added 3.2 percentage points to the ratio. The fact that the
combined ratio maintained this satisfying level despite the excep-
tionally high claims is a sign of the excellent quality of the port folio
and mitigation of risk in this business and is the result of the
ongoing optimisation of the portfolio.
BUSINESS VOLUME
CHF million
Total business volume
Life
Non-life
Investment-type
premiums
2020
2021
+ / – %
8,926.5
3,291.3
3,802.5
1,832.7
9,591.1
3,389.7
4,063.4
2,138.0
7.4
3.0
6.9
16.7
BUSINESS VOLUME IN 2021 (GROSS)
BY STRATEGIC BUSINESS UNIT
As a percentage
Switzerland
Germany
Belgium
Luxembourg
44.2
14.7
24.0
16.5
Equity, dividend and capitalisation: raising of the dividend by
9.4 per cent to CHF 7.00 requested
Consolidated equity went up by 4.5 per cent year on year to reach
an all-time high of CHF 7,299.9 million at the end of 2021
(31 December 2020: CHF 6,985.7 million). In June 2021,
Standard & Poor’s confirmed its rating of A+ for the Baloise Group.
It 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 profita-
bility, robust risk management and solid competitive position in
its profitable core markets. The rating of the German business
Basler Sachversicherungs-AG was upgraded from A (with a positive
outlook) to A+ (with a stable outlook) thanks to sustained impro-
vements in its profitability. In the Swiss Solvency Test (SST)*, a
ratio of over 210 per cent is expected as at 1 January 2022.
The repurchase programme for more than three million
shares that was initiated in April 2017 reached completion in
March 2020 and the shares were cancelled in July 2021 as had
been announced. As a result of this programme, CHF 481.1 mil-
lion was returned to shareholders.
13
Baloise Group Annual Report 2021
Review of operating performance
The Board of Directors of Bâloise Holding Ltd recognises the
success of the strategic phase up to 2021 and the Company’s
strong performance in the past year. It therefore intends to
propose to the 2022 Annual General Meeting that the dividend
be raised by CHF 0.6, or 9.4 per cent, to CHF 7.00 per share. In
the period between the announcement of ’Simply Safe’ in
October 2016 and the end of 2021, a robust total shareholder
return of 51 per cent was generated. This is made up of a return
on equities of 25 per cent and a dividend yield of 26 per cent.
* The SST ratio will be published at the end of April 2022.
DEVELOPMENT OF NET COMBINED RATIO
As a percentage
2021
2020
2019
2018
2017
92.6
91.2
90.4
91.7
92.3
CORE INSURANCE BUSINESS
Non-life: volume of premiums exceeds CHF 4 billion for first
time; high profitability despite record claims
The volume of premiums in the non-life insurance business
passed the threshold of CHF 4 billion for the first time in 2021,
advancing by 6.9 per cent year on year to CHF 4,063.4 million
(2020: CHF 3,802.5 million). This was due to the full inclusion
of the acquired non-life portfolio of Athora and, in particular,
organic growth in all business units. As a result, the premiums
of the attractive non-life business have jumped by a quarter
since the start of ’Simply Safe’. In Switzerland, gross premiums
written rose by a healthy 1.8 per cent to CHF 1,392.7 million
(2020: CHF 1,368.4 million). Since the purchase and integration
of Fidea and the Athora portfolio, the Belgian unit has had the
largest non-life business in the Group, with gross premiums
written of CHF 1,644.3 million in 2021. This constitutes a year-
on-year rise of 10.6 per cent (2020: CHF 1,487.4 million).
The German unit also generated solid organic growth. Premiums
in this business swelled by 5.7 per cent to CHF 821.0 million (2020:
CHF 776.4 million). Luxembourg delivered very healthy growth of
7.2 per cent to reach CHF 148.5 million (2020: CHF 138.6 million).
EBIT in the non-life business came to CHF 303.9 million, which
was slightly higher than the prior-year figure (2020: CHF 302.2
million) despite the unprecedented level of claims. Especially given
the summer storms, the non-life portfolio’s net combined ratio was
impressive at 92.6 per cent (2020: 91.2 per cent). The natural
phenomena during the summer added 3.2 percentage points to the
ratio. Baloise experienced two once-in-a-century events in succes-
sion during the 2017–2021 strategic phase: the COVID-19 pandemic
and the storm and flooding claims in summer 2021. The fact that
the combined ratio held steady within the target range of 90 per
cent to 95 per cent during this period demonstrates the excellent
quality of the portfolio and the careful selection of risk-mitigating
measures.
Life: very strong earnings thanks to the uptrend in the capital
markets, easing of the interest-rate situation and optimisation
of the business mix
The volume of business in the life insurance business jumped
by 7.9 per cent year on year to CHF 5,527.7 million (2020:
CHF 5,124.0 million) owing to increased premium income in the
traditional life business and, in particular, a rise in investment-
type premiums.
PROPRIETARY INVESTMENTS BY CATEGORY1
INVESTMENT COMPONENTS IN 2021
31.12.2020
31.12.2021
+ / – %
CHF million
Investment property
Equities
Alternative financial assets
8,410.3
3,574.6
911.4
8,464.5
3,946.4
1,236.9
Fixed-income securities
35,092.4
34,886.3
Mortgage assets
11,250.6
11,269.3
As a percentage
0.6
10.4
35.7
– 0.6
0.2
Fixed-income securities
Mortgage assets
Investment property
Policy loans and other loans
Equities
Policy loans and other loans
5,764.3
4,829.6
– 16.2
Cash and cash equivalents
Derivatives
493.2
583.3
Cash and cash equivalents
2,590.1
2,577.3
Total
68,086.8
67,793.5
18.3
– 0.5
– 0.4
1 Excluding investments for the account and at the risk of life insurance policyholders and
Alternative financial assets
Derivates
51.5
16.6
12.5
7.1
5.8
3.8
1.8
0.9
third parties.
14
Baloise Group Annual Report 2021
Review of operating performance
ASSETS HELD BY BALOISE
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
as at 31 December 2021
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
& 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
Non-life
Life
Asset
Management
& Banking
Total for the
Group
10,593.7
49,528.2
8,599.6
17,309.2
10,593.7
66,837.3
8,599.6
67,793.5
17,879.0
85,672.6
13,422.8
Despite a selective underwriting policy, the volume of traditional
life business advanced by a solid 3.0 per cent to CHF 3,389.7 mil-
lion (2020: CHF 3,291.3 million), with Switzerland recording
particularly strong growth. The Swiss unit has the biggest life
business, with a volume of CHF 2,847.2 million.
In Germany, an increase in new business in the target segments
of biometric risk products and pension products, combined with
a lower lapse rate, enabled premium growth of 4.7 per cent to
CHF 397.9 million. Intensified collaboration with brokers was one
of the main reasons for the German unit’s successful sales.
Gross premiums written in Belgium remained largely un-
changed year on year at CHF 189.3 million owing to selective
underwriting.
Business in Luxembourg expanded by 2.8 per cent to
CHF 74.5 million.
The volume of investment-type premiums advanced by a
substantial 16.7 per cent year on year to CHF 2,138.0 million (2020:
CHF 1,832.7 million). The main reason for this strong growth was
the rebound in the ’freedom of service’ business, which in previous
years had suffered badly as a result of market volatility. In Luxem-
bourg, Baloise notched up very strong growth of 32.9 per cent to
reach CHF 1,362.2 million in 2021 and is positioning itself as a
major player in this segment with assets under management of
more than CHF 13 billion.
EBIT in the life business amounted to excellent CHF 406.7 million
in 2021, which was up by 44.1 per cent year on year (2020:
CHF 282.2 million). This exceptionally high figure can be exp-
lained by the uptrend in the capital markets in 2021 and the
higher level of interest rates. Moreover, the ongoing optimisation
of the business mix, with a shift towards investment-linked
products and risk cover, is helping to boost the profitability of
this business. If the positive trend in respect of interest rates
is sustained and the capital markets maintain their uptrend, we
anticipate that the earnings of the life business will again be
well above the stated minimum level of CHF 200 million in 2022.
The new business margin in the life business was a very healthy
39.0 per cent in 2021 and thus at a similar level to the previous
year (2020: 42.7 per cent).
The interest margin improved to a solid 108 basis points (2020:
102 basis points). The reason for this rise is that current income
declined less sharply than in previous years, while the average
guaranteed rate of return in the portfolio continued to fall. The
guaranteed rate of return decreased from 1.1 per cent to 1.0 per
cent in 2021 due to the improved business mix.
15
Baloise Group Annual Report 2021
Review of operating performance
Key figures for the national Baloise companies
2020
2021
+ / – %
4,130.8
2,762.4
1,368.4
88.5
386.3
4,239.9
2,847.2
1,392.7
89.2
584.6
2.6
3.1
1.8
0.7
51.3
2020
2021
+ / – %
1,339.0
1,406.4
562.6
776.4
94.9
20.9
585.4
821.0
96.8
42.5
5.0
4.1
5.7
1.9
103.3
2020
2021
+ / – %
2,188.7
701.3
1,487.4
90.9
245.8
2,302.5
658.2
1,644.3
93.0
149.0
5.2
– 6.1
10.6
2.1
– 39.4
2020
2021
+ / – %
1,236.1
1,097.5
138.6
89.3
28.9
1,585.3
1,436.7
148.5
93.9
12.5
28.2
30.9
7.2
4.6
– 56.7
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
16
ASSET MANAGEMENT & BANKING
For the economy and the stock markets, 2021 was a year of
recovery. The equity markets were buoyed by exceptionally strong
economic growth, enabling equity investors to benefit from
double-digit returns. However, strong demand in the economy
came up against restricted production capacity as a result of the
pandemic. This led to shortages of materials and supply chain
bottlenecks, thereby pushing up inflation rates worldwide. As a
result, yields on long-dated paper rose in the bond market.
Corporate bond spreads were at a similarly low level at the end
of the year as they had been at the start of the year.
Insurance assets: attractive investment yield in an
encouraging trading year
Gains on the investment of insurance assets amounted to
CHF 1,351.2 million, which was above the 2020 level of
CHF 1,270.5 million. This was partly due to the favourable
conditions in the markets and partly to the systematic shift in
the investment strategy towards asset classes with high and
stable current returns. The transition continued in 2021, with
further reallocation from bonds to private debt. This meant that
current income fell only slightly, from CHF 1,101.0 million in 2020
to CHF 1,088.0 million in 2021, despite interest rates remaining
low.
At CHF 507.4 million, the gains recognised in the income
statement were down by CHF 71.7 million compared with the
prior year. Impairment losses fell by CHF 177.6 million year on
year, driven by the uptrend in the markets in 2021.
The net gains and losses relating to currency hedging costs
and currency effects arising on unhedged currency exposures
amounted to a gain of CHF 74.9 million in 2021, which was
unchanged year on year.
The stabilisation of the investment yield on insurance assets
could also be seen from the net yield of 2.2 per cent, which
represented a slight improvement on the prior-year figure of
2.1 per cent. Unrealised gains fell by CHF 489.7 million because
of the higher interest rates. 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 1.4 per cent, repre-
senting a decrease on the 3.0 per cent rate of return according
to IFRS in 2020.
Asset management & banking: further growth in fee income
As at 31 December 2021, the total assets under the management
of Baloise Asset Management stood at CHF 65.7 billion, a small
decrease of 0.8 per cent on the figure a year earlier. The reduc-
tion in volume was entirely due to the change in interest rates
Baloise Group Annual Report 2021
Review of operating performance
and the resulting impairment of the bond portfolio in respect of
insurance assets.
Returns increased because the average volume of assets
under management for the year was higher than in 2020.
Continued expansion of business with external customers
Net new assets in the business with external customers amount ed
to CHF 986.5 million in 2021. Assets under management swelled
by 14.2 per cent to CHF 13.4 billion (2020: CHF 11.8 billion).
The strategy of further expansion of the business with
external customers is being facilitated by targeted investment
in partnerships and employees and in building up expertise and
establishing systems. In summer 2020, for example, we acquired
a stake in Tolomeo Capital AG. A strategic alliance with Tolomeo
enabled us to significantly improve the quality of the BFI System atic
fund products and adapt them to the changing conditions in
the capital markets through the use of an innovative rules-
based approach.
The real-estate asset class contributed to the positive
performance of business with external customers. The Baloise
Swiss Property Fund (BSPF) carried out a capital increase of
CHF 135 million in August 2021. The issue met with strong
demand and was fully subscribed. The proceeds of the capital
increase were used to acquire a property portfolio with a value
of CHF 185 million and integrate it into the fund. This transaction
further enhanced the quality and level of diversification of the
portfolio. On 1 November, the fund went public on the SIX Swiss
Stock Exchange. This step had been planned since the launch
of the fund and its IPO proved very popular.
The further growth of asset management mandates at
Baloise Bank SoBa also made a significant contribution to net
new assets. The number of asset management mandates increased
to 4,315 (up by 34.3 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.
Growing importance of sustainability
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 sustainable value creation.
The Baloise Asset Management climate strategy was
launch ed in 2021. Under this strategy, a positive contribution
to climate change mitigation 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. Furthermore, the risk attaching to companies in
connection with climate change and the targeted decarbonisa-
tion of the portfolio is being managed proactively. This is
illustrated by stranded assets and the way that companies
manage them.
Under the Baloise active ownership strategy, Baloise Asset
Management has begun to utilise its financial strength in order
to better manage ESG risk at the companies in which it is invested
and to achieve positive change at the same time. To this end, it
is focusing on collaborative dialogue with companies on specific
or general sustainability topics, for example relating to climate
change. In this context, Baloise Asset Management began
participating in Climate Action 100+ in 2021. It will continue to
press ahead with integrating sustainability matters into its
investment strategy. The expansion and broadening of the
Responsible Investment Policy will focus on the private-assets
and real-estate asset classes.
Baloise Asset Management is increasingly using investment
solutions to share its expertise in responsible investment with
investors. One example is the launch of the BFI Positive Impact
Select themed fund, which is dedicated to making a lasting
contribution to several of the UN’s sustainable development
goals (SDGs). In 2021, Baloise Holding also issued its first green
bond, which is backed by properties held in the asset portfolio
of the insurance business that have been awarded sustainability
certificates.
ECOSYSTEMS & INNOVATION
While the strategic phase up to 2021 was all about laying the
foundations for the digital transformation and the innovation
initiatives, our focus in the next four years will be on scaling up
individual initiatives and expanding the offering within the Home
and Mobility ecosystems. FRIDAY is continuing to grow. Operating
in the German and French markets, the digital insurer notched up
premiums of CHF 52.7 million, an increase of 68.3 per cent. The
aim is to generate a total business volume from all the innovation
initiatives of around CHF 350 million by 2025. In 2021, the inno-
vation initiatives (including FRIDAY) contributed more than
CHF 70 million.
Home ecosystem
We continued to expand the Home ecosystem in 2021. The
announcement that we would work with UBS, Switzerland’s
largest bank, in a shared Home & Living ecosystem was a key
step forward in the enlargement of the partner network. The aim
of this strategic relationship is to give customers access to
complementary services that address property owners’ key needs
regarding financing, insurance and maintenance. At the start of
2022, a pilot project with various general agents got under way
that is focused on the brokerage of mortgages through key4.
Baloise is opening up access to this mortgage platform for a
17
Baloise Group Annual Report 2021
Review of operating performance
new group of customers in the insurance business. In 2021,
Baloise made a further investment in the fast-growing start-up
Houzy, in which UBS also holds a stake. We are now the exclusive
insurance partner of this platform for home owners.
Mobility ecosystem
The work to expand the Mobility ecosystem is starting to bear
fruit, as can be seen from the two innovation prizes recently
won at the Efma-Accenture Innovation in Insurance Awards.
In Luxembourg, we announced the
launch of the
Bauheem.lu online platform in October. The platform is a joint
project of Baloise, Progetis SECO, CFDP and Allia Insurance
Brokers and is aimed at making it easier to insure property
development projects. The underwriting of insurance for property
construction and renovation work is a lengthy and complex
process, with little automation. The new platform makes it
possible to obtain cover for all risks relating to property develop-
ment on a single website. A new partnership formed with
Luxembourg-based Progetis in October 2021 and the resulting
integration of the service in its leading property developer
software will make it even easier to take out this type of insurance.
As part of Kickbox, Baloise’s internal innovation campaign,
the ’Wohntraum’ project from Germany was the only one of the
60-plus ideas submitted in 2021 to win a Goldbox. The aim of
Wohntraum is to help young people and families to achieve their
dream of home ownership. Many people in Germany are affected
by social inequalities and cannot afford to buy a home either at
all or only later in life due to a lack of capital. To fulfil this need
for capital, they will be supported with capital from financial
intermediaries and receive a guarantee that they will one day
be able to own the property outright. Wohntraum is now working
on spinning off the business idea in a similar way to Parcandi in
the Mobility ecosystem, which became an independent company
in 2021.
In November 2021, Baloise Belgium announced its acqui-
sition of B’Cover, a broker specialising in insurance for office
and residential buildings. More than 4,300 managers and owners
of residential accommodation and offices have already opted
for tailored insurance solutions from B’Cover. For years, the
company has been providing all-inclusive packages that offer
straightforward insurance to meet the needs of property
managers, owners’ associations, co-owners and tenants. We
are therefore expanding our existing Home ecosystem initiatives
in Belgium that centre around the partnerships with Keypoint,
Rentio and ImmoPass.
Thanks to long-term equity investments and partnerships,
Baloise’s Mobility ecosystem now operates in ten European
countries and is continuing to expand. At the start of 2021,
Belgian Baloise subsidiary Mobly announced a new collaboration
between its search engine VROOM.be and the lending platform
Mozzeno. With around 17 million visitors and more than 32,000
adverts per year, VROOM.be reaches a large audience.
In April, we announced that we were investing in Danish
peer-to-peer carsharing company GoMore. The investment of
around EUR 5 million underlines our interest in the rapidly growing
market for sustainable transport. GoMore enables its members
to share private cars through car rental and ridesharing options.
It made its Swiss market debut in October 2021. To complement
GoMore’s service, Baloise has designed the perfect insurance
product to meet the needs of car owners and renters.
Car leasing company gowago.ch, in which we have a strategic
long-term equity investment, found a funding partner in the shape
of Migros Bank in July 2021. Along with Baloise and TCS, gowago
can now count on strong partners to help it provide the optimum
customer experience.
In May, under the tagline Mobility@Baloise, Baloise launched
its own mobility accelerator with the aim of promoting innovative
ideas at the earliest possible stage. The initiative goes hand in
hand with the launch of the information platform www.baloise.
com/mobility, which is designed to act as a new gateway to the
Mobility@Baloise ecosystem for interested start-ups and young
companies. The initiative attracted a great deal of interest, and
more than three dozen exciting start-ups made the shortlist. After
a ten-week process, the programme ended in November 2021
with a closing event at which AYES and RIBE were announced as
the winning companies.
In 2021, Baloise announced the founding of the corporate
start-up Parcandi, which was initially developed as part of an
internal innovation campaign. Parcandi connects drivers looking
for somewhere to park to owners of unused parking spaces. An
app allows users to reserve spaces with just a few clicks. At
www.parcandi.ch, drivers can reserve their desired space up to
two hours in advance or just find a spot as and when they need
it. The bespoke system that controls access to car parks and
18
Baloise Group Annual Report 2021
Review of operating performance
displays availability can be flexibly adjusted to suit the providers
of the spaces and is easily scalable to include additional car
parks, allowing Parcandi to add new parking spaces or cities
quickly and efficiently.
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 first phase of ’Simply Safe’ ended at the close of 2021 and
was immediately followed by the start of ’Simply Safe: Season
2’, which runs from 2022 to 2025. As we announced on Investor
Day in autumn 2020, we are building on the successes of the first
phase of the strategy and continuing to focus our ambitious
objectives on our stakeholders: customers, employees and
shareholders. By 2025, we are 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, we intend to distribute 60 to 80 per cent as dividends.
As part of our sustainability measures, we are continuing to work
on the implementation of our value creation model, which is an
integral element and cornerstone of our corporate strategy. The
value creation model adds partners, society and the environment
to the existing stakeholder groups (customers, employees and
shareholders), as these aspects have been identified as additi-
onal key factors in the success of Baloise. The new strategic
phase ending in 2025 deliberately puts the focus on the creation
of value for a whole range of stakeholders. It is against this that
we ultimately wish to be measured, within the context of our
value creation model.
19
Baloise Group Annual Report 2021
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
2017
2018
2019
2020
2021
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
7,416.2
– 326.5
7,089.7
1,392.5
1,376.0
1,257.0
1,176.5
1,159.5
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
370.5
1,534.2
130.6
4.9
213.2
9,417.1
7,276.6
10,996.9
8,787.0
10,502.5
– 5,726.5
– 5,904.4
– 6,090.4
– 6,182.6
– 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
– 5,813.4
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 8,733.0
– 6,539.1
– 10,273.0
– 8,184.1
– 9,780.0
Profit before borrowing costs and taxes
684.1
737.5
723.9
602.9
722.5
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 2019 figures for other operating expenses and investment management expenses.
20
Baloise Group Annual Report 2021
Review of operating performance
Consolidated income statement
FIVE-YEAR OVERVIEW
CHF million
2017
2018
2019
2020
2021
Profit before borrowing costs and taxes
684.1
737.5
723.9
602.9
722.5
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)
– 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
– 24.7
697.9
– 114.6
583.3
588.4
– 5.1
13.06
13.05
2017
2018
2019
2020
2021
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
7,453.1
2,138.0
9,591.1
14,543.8
13,640.8
15,337.8
15,564.1
17,309.2
92.3
193.3
91.7
179.4
90.4
179.8
91.2
174.3
92.6
161.8
21
Financial instruments with characteristics of equity
15,874.9
14,137.9
16,232.9
16,539.8
Financial instruments with characteristics of liabilities
35,360.1
33,775.1
36,749.0
37,078.9
Baloise Group Annual Report 2021
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
419.5
1,180.4
316.0
8,464.5
19,172.0
36,961.5
16,098.9
902.1
2,317.0
73.7
4,073.5
2017
2018
2019
2020
2021
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
466.2
1,155.4
263.4
8,410.3
16,568.6
16,396.2
16,812.9
17,014.9
800.4
3,305.1
88.8
914.8
2,036.6
73.5
1,048.1
2,184.3
97.4
1,089.1
2,254.7
87.9
3,551.6
4,036.1
3,988.0
4,004.0
84,523.9
80,854.8
87,017.8
88,364.5
89,979.0
2017
2018
2019
2020
2021
6,346.2
5,970.6
6,714.0
6,983.7
63.0
37.6
1.6
2.0
7,285.1
14.8
6,409.2
6,008.2
6,715.6
6,985.7
7,299.9
48,008.5
46,575.2
48,333.3
48,585.0
22,696.5
21,539.0
24,540.4
25,283.5
145.3
6,341.9
922.4
117.3
5,707.2
907.8
117.5
6,372.6
938.5
152.6
6,357.4
1,000.4
48,661.4
26,882.4
89.8
6,043.4
1,002.0
78,114.7
74,846.6
80,302.2
81,378.8
82,679.1
Total equity and liabilities
84,523.9
80,854.8
87,017.8
88,364.5
89,979.0
22
Baloise Group Annual Report 2021
Review of operating performance
Business volume, premiums and combined ratio
Business volume, premiums and combined ratio
BUSINESS VOLUME
2020
CHF million
Non-life
Life
Sub-total of IFRS gross premiums written 1
Investment-type premiums
Total business volume
2021
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
3,802.5
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
Group
Switzerland
Germany
Belgium
Luxembourg
4,063.4
3,389.7
7,453.1
2,138.0
9,591.1
1,392.7
2,727.8
4,120.6
119.4
4,239.9
821.0
397.9
1,218.9
187.5
1,406.4
1,644.3
189.3
1,833.7
468.8
2,302.5
148.5
74.5
223.0
1,362.2
1,585.3
23
Baloise Group Annual Report 2021
Review of operating performance
Business volume, premiums and combined ratio
NET COMBINED RATIO
2020
as a percentage of premiums earned
Claims ratio 1
Expense ratio
Combined ratio
2021
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.
24
Group
Switzerland
Germany
Belgium
Luxembourg
59.6
31.6
91.2
61.5
27.0
88.5
58.3
36.6
94.9
58.1
32.8
90.9
55.2
34.1
89.3
Group
Switzerland
Germany
Belgium
Luxembourg
60.4
32.2
92.6
62.3
26.9
89.2
2020
61.4
30.3
91.7
61.3
35.5
96.8
Gross
2021
68.6
30.7
99.3
59.0
34.0
93.0
2020
59.6
31.6
91.2
60.3
33.6
93.9
Net
2021
60.4
32.2
92.6
2020
2021
6,235.8
3,577.6
174.3
6,133.6
3,791.6
161.8
Baloise Group Annual Report 2021
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 2020: CHF – 3.2 million; 31 December 2021: CHF – 2.5 million).
Non-life
2020
2021
2020
Life 3
2021
3,802.5
– 59.1
3,743.4
4,063.4
– 36.9
4,026.5
3,291.3
3,389.7
–
–
3,291.3
3,389.7
– 2,338.3
– 2,541.8
– 3,844.3
– 3,271.6
52.4
– 51.8
– 208.7
– 19.1
– 1,159.1
– 1,262.3
246.7
– 5.5
168.8
– 136.6
– 335.2
– 856.0
– 591.3
– 365.5
– 344.2
– 1,183.0
– 230.0
164.7
40.3
0.3
22.5
– 2.1
– 279.1
– 38.1
– 47.4
318.8
179.2
0.0
28.8
247.7
11.5
3.3
16.5
1.3
– 5.4
13.1
4.3
14.2
0.9
– 15.0
3,513.5
3,747.4
3,253.3
3,342.3
– 2,173.6
– 2,223.0
– 3,832.8
– 3,258.5
92.7
– 51.4
– 29.5
– 19.1
– 1,136.5
– 1,233.5
244.7
158.5
25.2
– 29.4
– 96.8
57.6
302.2
– 0.3
– 63.2
238.7
242.3
151.9
32.6
– 32.4
– 90.6
61.6
303.9
– 0.3
– 32.9
270.7
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
– 587.1
– 351.3
– 343.4
– 1,197.9
936.1
1,873.9
– 111.5
– 1,093.9
1,604.7
406.7
– 10.2
– 74.4
322.1
25
2020
2021
+ / – %
421.1
160.8
348.7
1,268.8
1,238.1
208.0
102.6
54.4
440.2
169.0
382.3
1,329.2
1,336.3
230.8
112.3
63.3
3,802.5
4,063.4
4.5
5.1
9.6
4.8
7.9
11.0
9.5
16.4
6.9
2020
2021
+ / – %
2,595.0
2,529.1
2,971.9
2,555.9
– 1,832.7
– 2,138.0
3,291.3
3,389.7
14.5
1.1
16.7
3.0
Baloise Group Annual Report 2021
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)
26
Baloise Group Annual Report 2021
Review of operating performance
Banking activities
Banking activities
PROFIT OR LOSS FROM BANKING ACTIVITIES
CHF million
Net interest income
Net fee and commission income
Trading profit
Other net income
Total operating income
Personnel expenses
General and administrative expenses
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
2020
2021
75.5
66.2
0.1
12.7
77.3
66.8
0.2
13.6
154.6
158.0
– 69.8
1.9
– 67.9
86.7
– 0.9
– 6.4
79.4
0.0
– 11.7
67.8
– 69.6
3.6
– 66.0
92.0
– 4.4
– 5.1
82.5
0.0
– 12.0
70.4
31.12.2020
31.12.2021
11,758.8
13,422.8
31.12.2020
31.12.2021
–
15.1
–
142.5
6,768.9
184.3
11.9
1,399.5
8,522.2
–
15.1
–
114.0
6,956.8
169.5
10.3
1,333.8
8,599.6
27
Baloise Group Annual Report 2021
Review of operating performance
Investment performance
Investment performance
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.
20211
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
551.3
– 137.0
111.0
152.2
286.4
239.6
203.0
– 6.3
7.8
122.1
1,159.5
370.5
Change in unrealised gains and losses recognised directly
in equity
– 1,059.2
298.5
–
–
270.6
– 490.0
Investment management costs
Operating profit
Average investment portfolio
Performance (per cent)
– 54.8
– 699.7
– 7.3
554.4
– 28.0
498.0
– 14.7
182.0
– 8.3
392.2
– 113.2
926.8
34,989.3
3,760.5
8,437.4
16,556.9
4,196.1
67,940.2
– 2.0
14.7
5.9
1.1
9.3
1.4
1 Excluding investments for the account and at the risk of life insurance policyholders and third parties.
28
Baloise Group Annual Report 2021
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
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
Non-life
Life
36.9
33.4
1.1
62.2
6.6
12.3
– 0.6
248.5
77.1
9.0
487.7
56.5
58.5
– 1.2
2021
Total
285.4
110.5
10.1
549.9
63.1
70.8
– 1.8
158.5
942.6
1,101.0
151.9
936.1
1,088.0
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
2020
Total
169.6
– 125.1
– 8.0
100.9
– 0.3
125.2
37.0
299.3
2020
Total
Non-life
Life
18.2
48.5
13.6
– 39.8
– 0.4
1.9
– 9.5
32.6
219.8
103.6
65.1
– 97.2
– 0.4
19.2
62.4
372.5
Non-life
Life
1,004.7
1,014.4
225.4
7,381.5
2,543.0
686.0
8,386.2
3,557.4
911.4
1,008.6
1,136.4
347.0
7,443.9
2,787.0
889.9
2021
Total
238.0
152.1
78.7
– 137.0
– 0.7
21.1
52.9
405.1
2021
Total
8,452.6
3,923.4
1,236.9
5,972.4
28,976.8
34,949.2
5,697.3
29,074.3
34,771.6
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
465.5
1,575.1
21.1
342.7
3,847.0
4,243.8
548.3
693.9
4,312.5
5,818.9
569.5
1,036.5
10,926.3
49,875.2
60,801.5
10,593.7
49,528.2
60,121.9
1 Excluding investments for the account and at the risk of life insurance policyholders and third parties.
29
30
Risk management
RISK MANAGEMENT – A KEY PILLAR OF OUR
VALUE CREATION ......................................................... 32
Risk management system and risk culture ......................... 33
Compliance with regulatory obligations and disclosure
requirements .................................................................... 33
Risk management ............................................................. 34
Growing integration of sustainability and climate risks ..... 34
Embedding sustainability criteria in the investment and
underwriting process ........................................................ 34
External view of capitalisation and risk management ........ 35
31
Baloise Group Annual Report 2021
Risk management
Risk management – a key pillar of our value creation
Risk management is a key element of a sustainability-focused corporate governance system and, as
such, plays an important role in Baloise’s value creation. It helps to ensure a strong balance sheet,
a high level of operational profitability, a well-developed risk culture, consistent risk processes and
a sustainable investment policy.
▸
▸
▸
▸
▸
▸
▸
▸
▸
Impact of value creation
Understanding current and future risks
Ensuring the stability of Baloise and the proper
functioning of its business operations
Enhancing risk awareness at all levels of the
organisational structure
Providing transparency about risks taken
Reducing sustainability and climate risks and
contributing to society and environmental protection
in positive ways
Risk processes
Leadership, reporting and evaluation processes are sup-
ported by risk processes in order to ensure that the risk
perspective is factored into all important business decisions.
Risk management
Risks are managed and mitigated carefully in keeping with
the defined risk tolerance. Upside potential is optimised in
consideration of relevant risks, resulting in sustainable value
creation for Baloise’s investors.
Risk reporting
Risk reporting ensures that the current risk situation is
presented transparently in our internal and external com-
munications.
Sustainability risks – including climate risks – are identified along
the risk map and integrated into the existing risk management
processes and frameworks. This ensures that the results of our
regular analyses and assessments are incorporated into the
strategic risk management approach.
Risk management objectives
▸
▸
Identification and measurement of key risks
Carefully considered management and mitigation of
risks
Involvement of employees from different departments
and operating segments in the risk management system
Active communication about the risk situation
Integration of sustainability and climate risks into
the risk management system and in the investment
and underwriting process
▸
▸
▸
Risk management plays an important role in the overall value
creation process of Baloise. It involves managing risk and value,
and is based on innovative standards so that Baloise can always
keep its promise to its customers. Our risk management is a
standardised strategic and operational system that is applied
throughout the Baloise 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 fundamental risk issues, such as actuarial risk
and market risk, as well as the operational risk arising from
business activities. The detailed risk map can be found on
pages 124 and 125 of the 2021 financial report. Risk aware-
ness – i.e. a sense of readiness to detect and respond to
risks – is encouraged and embedded throughout the organi-
sation. One way in which we achieve this is by involving
employees from different departments and operating units
in the risk management system (e.g. in the assessment of
risks and in the allocation of responsibility for risks).
Risk measurement
Risk is identified and quantified in all business and financial
processes according to common internal standards. This
enables appropriate priorities to be set for senior manage-
ment in respect of the risks taken on.
▸
▸
32
Baloise Group Annual Report 2021
Risk management
RISK MANAGEMENT SYSTEM AND RISK CULTURE
The end-to-end risk management system and risk culture ensure
that all material risks are identified, measured and adequately
addressed. Risks that have been taken on are consciously mana-
ged 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 risks. Group-wide individual risks are plotted
on the risk map according to their likelihood and their 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-warning indicators and the
quantitative evaluation – is generated from this standardised
process. Risks are documented together with the measures
needed to mitigate them. Clear responsibilities are defined across
all departments. Each risk is assigned to a risk owner (with
overall responsibility) and to a separate risk controller (respon-
sible for risk monitoring and control). Based on this database,
which is regularly updated, it is possible to check whether the
risks that have been taken on are within the limits of acceptable
risk. This allows unwanted risks with possible negative conse-
quences for Baloise and its stakeholders to be identified at an
early stage and mitigated in a targeted manner. Strategic decisi-
on-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 the employees.
COMPLIANCE WITH REGULATORY OBLIGATIONS AND
DISCLOSURE REQUIREMENTS
By complying with regulatory obligations and disclosure require-
ments 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, and in doing so provides regular reports on its risk and
solvency situation to the regulators. Fulfilment of these require-
ments ensures that Baloise reduces unwanted risks to the greatest
possible extent and remains solvent even under adverse circum-
stances 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 Assess-
ment (ORSA), which is discussed with the decision-makers 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 proces-
ses 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,
customers and investors about the most important findings of
the quantitative solvency measurement and thus the capital
strength 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. Baloise is a member of the Swiss Insurance Association
(SVV), for example. It fulfils its responsibilities through its work
with the association, and also in direct cooperation with the
regulatory authorities, by providing support in the form of data,
analyses and assessments in subject-specific industry surveys
and in the further development of the regulatory system.
RISK MANAGEMENT
The ongoing optimisation of income through risk / return criteria
as part of strategic risk management will secure the long-term
stabil ity 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,
form the basis for strategic discussions about Baloise’s risk
appetite. Strategic risk management within the scope of the
established risk appetite offers a clear picture of the risks invol-
ved in opening up new business lines and of how to optimise the
risk / return profile of existing business. In the area of invest ment,
for example, the aim is to achieve the highest possible expected
return with the lowest possible risks. This will ensure the long-term
33
Baloise Group Annual Report 2021
Risk management
stability of Baloise, benefiting both its customers and its
investors.
GROWING INTEGRATION OF SUSTAINABILITY AND CLIMATE
RISKS
As the integration of sustainability and climate risks into the risk
management framework of Baloise progresses, the Company’s risk
profile is becoming more nuanced. Over the long term, the inclusion
of sustainability aspects in risk-related strategic considerations
will improve the creation of value for investors and customers and
reduce the Company’s environmental impact.
In order to facilitate an efficient assessment from different
angles, sustainability-related risks are integrated into Baloise’s
existing risk processes. To this end, sustainability risks are
classified as pertaining to the environmental, social or corporate
governance (ESG) dimensions and are identified, recorded and
assessed within the established risk categories (e.g. market
risk and actuarial risk) along the risk map. In addition, sustain-
ability aspects that are of strategic relevance in terms of risk
are addressed as a separate risk type in the context of the
business strategy.
In 2021, various sustainability risk clusters (e.g. storm and
flood disasters) were analysed and the findings were used to
identify potential or actually existing risks for different operating
segments. Material risks that were identified by means of this
process were then included in the Group-wide frameworks.
Long-term sustainability-related trends are examined and
evaluated as part of the analysis of emerging risks, which forms
part of the Own Risk and Solvency Assessment. 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, floods, hailstorms
and fires.
Transitional risks
Implications of changes in the expectations of stakeholders
with regard to sustainability, such as a shift in demand for
financial and insurance products.
Liability risks
Liability of companies for the environmental damage they
cause (pollution, endangering of biodiversity, breaches of
environmental standards).
▸
▸
▸
34
The integration of sustainability risks into existing risk manage-
ment processes ensures that the results of our regular analyses
and assessments are incorporated into the strategic risk manage-
ment approach. In addition, general risk awareness is strengt-
hened through the involvement of employees from different
departments and operating segments.
The ongoing integration of sustainability and climate risks
into strategic risk management at Baloise constitutes an impor tant
step in implementing the recommendations of the Task Force on
Climate-Related Financial Disclosure (TCFD). In 2022, various parts
of the Baloise Group will conduct analyses and preparations in
order to drive forward the further implementation of the TCFD’s
recommendations.
EMBEDDING SUSTAINABILITY CRITERIA IN THE INVESTMENT
AND UNDERWRITING PROCESS
By embedding sustainability criteria in the investment and under-
writing process as part of the strategy, the risks for customers and
investors are reduced and opportunities are identified, so that a
positive contribution to society and environmental protection can
be achieved.
The integration of environmental, social and corporate
governance (ESG) factors into risk-related strategic processes
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. Customers 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.
From 2022, underwriting operations will also increasingly
take account of sustainability criteria, especially in new insurance
business with industrial and large corporate customers. In
addition, Baloise sees itself as a reliable partner for customers
whose business model is currently undergoing a transformation.
We have launched a process in product management that identi-
fies opportunities in the field of sustainability, which can then
be addressed through products and services. This allows us to
make a positive contribution to society and environmental
protection.
Baloise Group Annual Report 2021
Risk management
EXTERNAL VIEW OF CAPITALISATION AND RISK
MANAGEMENT
Baloise’s capitalisation, which has a positive impact on the
security of investors and customers, is also highly rated outside
the Company.
The Standard & Poor’s rating of ‘A + with a stable outlook’ is
evidence that Baloise’s excellent capitalisation is also recognised
by third parties. Standard & Poor’s also takes a favourable view
of the Group’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.
www.baloise.com/risk-management
35
Baloise Group Annual Report 2021
Corporate Governance
Unterkapitel Baloise Group Annual Report 2021
Corporate Governance
Corporate
Governance
CORPORATE GOVERNANCE REPORT ............................ 38
1. Structure of the Baloise Group and shareholder base ... 38
2. Capital structure ........................................................ 39
3. Board of Directors ...................................................... 40
4. Corporate Executive Committee ................................. 50
5. Remuneration, shareholdings and loans .................... 52
6. Shareholder participation rights ................................ 52
7. Changes of control and poison-pill measures ............. 53
8. External auditors ....................................................... 54
9. Information policy ...................................................... 54
Appendix 1: Remuneration Report ..................................... 57
Appendix 2: Report of the external auditor for the
Annual General Meeting of Bâloise Holding Ltd, Basel ....... 80
Unterkapitel Baloise Group Annual Report 2021
Corporate Governance
Corporate Governance Report
Corporate Governance Report
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 18 June 2021 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, Appen dix 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
disclosures on remuneration in the Remuneration Report
(Appendix 1 to the Corporate Governance Report, page 57
onwards).
The information contained in the Corporate Governance
Report refers to the situation on the balance sheet date
(31 December 2021). 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 more depth in
the various sections of the Company’s Annual Review.
38
▸
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 6,828.8 million as at 31 December 2021.
Information on Baloise shares can be found from
▸
page 44 onwards.
Significant subsidiaries, joint ventures and associates
as at 31 December 2021 can be found from page 224
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 163 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 52 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 26,611 shareholders were registered in Bâloise
Holding’s share register as at 31 December 2021. The number
of registered shareholders had increased by 10.8 per cent
compared with the previous year. The “Significant shareholders”
section on page 249 provides information on the structure of
the Company’s shareholder base as at 31 December 2021.
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 2021
Corporate Governance
Corporate Governance Report
Treasury shares
Bâloise Holding held (directly and indirectly) 314,837 treasury
shares (0.7 per cent of the issued share capital) as at 31 December
2021.
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 to supplement conventional cash dividends.
Shareholders have received a total of CHF 1,992.5 million from
cash dividends and share buy-backs over the last five years.
Year (CHF million)
2017
2018
2019
2020
2021
Total
Cash dividends
Share buy-backs
Total
273.3
292.8
312.3
312.3
320.61
1,511.3
63.3
135.1
190.0
92.8
–
481.1
336.6
427.9
502.3
405.1
320.6
1,992.5
All figures stated as at 31 December.
1 Proposal to the Annual General Meeting on 29 April 2022.
CHANGES IN BÂLOISE HOLDING’S EQUIT Y
(BEFORE APPROPRIATION OF PROFIT)
31.12.2019
31.12.2020
31.12.2021
4.9
11.7
8.3
683.2
552.5
4.9
11.7
9.2
922.3
372.5
– 397.7
862.9
– 491.3
829.3
4.6
11.7
7.6
502.8
391.6
– 9.3
909.1
CHF million
Share capital
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
Treasury shares
Equity attribut-
able to Bâloise
Holding
Since the capital reduction decided on 30 April 2021, the share
capital of Bâloise Holding totals CHF 4.58 million and is divided
into 45,800,000 dividend-bearing registered shares with a par
value of CHF 0.10 each.
Authorised and conditional capital;
other financing instruments
Authorised capital
A resolution adopted by the Annual General Meeting on
30 April 2021 has authorised the Board of Directors until
30 April 2023 to increase the Company’s share capital by up
to CHF 400,000 by issuing up to 4,000,000 fully paid-up
registered shares with a par value of CHF 0.10 each (see article
3 [4] of the Articles of Association).
www.baloise.com/rules-regulations
39
Baloise Group Annual Report 2021
Corporate Governance
Corporate Governance Report
Conditional capital
Conditional capital has also been created that 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 constitutes 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
Credit rating
On 18 June 2021, the credit rating agency Standard & Poor’s
confirmed its rating for the Baloise Group’s core companies of
“A +” with a stable outlook. The rating of Basler Sachversiche-
rungs-AG (Germany) was upgraded from ’A ’ with a positive
outlook to “A +” with a stable outlook. Standard & Poor’s awarded
this credit rating in recognition of Baloise’s excellent capitalisa-
tion – 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. Information about the ratings of Bâloise
Holding and its subsidiaries Baloise Belgium NV (Belgium),
Basler Sachversicherungs-AG (Germany), Baloise Insurance Ltd
(Switzerland) and Baloise Life Ltd (Switzerland) can be found on
the website.
www.baloise.com/rating
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 7,299.9 million on 31 December 2021. Details of changes
in consolidated equity in 2020 and 2021 can be found in the
consolidated statement of changes in equity on pages 90 and
91 in the Financial Report. All pertinent details relating to 2019
can be found in the consolidated statement of changes in equity
on page 140 in the 2020 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 2021,
a total of 13 public bonds were outstanding and on 27 September
2021, the Company issued its first green bond. On 27 January
2022, Bâloise Holding placed a further bond in an amount of
CHF 200 million. Details of outstanding bonds can be found on
pages 207 and 247 and on the website.
www.baloise.com/bonds
3. BOARD OF DIRECTORS
Election and term of appointment
The Board of Directors consisted 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 2021, the average age
on the Board of Directors was 60. The average term of office is
4.7 years.
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).
Members of the Board of Directors
All members of the Board of Directors (including the Chairman)
are independent and 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, 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.
40
Baloise Group Annual Report 2021
Corporate Governance
Corporate Governance Report
Dr Thomas von Planta was elected as Chairman, replacing
Dr Andreas Burckhardt who did not stand for re-election and has
stepped down from the Board of Directors. Dr Karin Lenzlinger
Diedenhofen was newly elected to the Board of Directors.
by the Annual General Meeting, Bundt will give up her operati-
onal activities in the reinsurance industry. Maya Bundt is a
member of the Board of Directors of APG SGA AG and Valiant
Bank AG.
Claudia Dill studied business administration at the Univer-
sity of St. Gallen and holds an MBA from the University of
Rochester / Bern. She has a proven track record in finance and
insurance, having worked, among others, for Deutsche Bank,
Commerzbank and Credit Suisse in the areas of management
reporting, auditing and risk management. From 1999 to 2020,
she worked for the Zurich Insurance Group in a range of mana-
gerial positions in Zurich, New York and São Paulo, most recently
as Chief Executive Officer for the Latin American business while
she was a member of the Corporate Executive Committee.
Claudia Dill was an independent member of the Board of Directors
of the Finnish Nordea Bank Abp until March 2022.
Further information on the members of the Board of Directors
can be found on the website.
www.baloise.com/board-of-directors
All members of the Board of Directors are standing for
re-election at the Annual General Meeting on 29 April 2022 with
the exception of Dr Andreas Beerli and Thomas Pleines who,
having served eleven years and ten years respectively on the
Board of Directors of Bâloise Holding Ltd., are not standing for
re-election. On the basis of its succession planning (see
“Succession Planning” on page 45), the Board of Directors of
Bâloise Holding Ltd. intends to ask the Annual General Meeting
to elect Maya Bundt and Claudia Dill to the Board of Directors,
in both cases as independent non-executive members, on
29 April 2022.
Maya Bundt has a degree in geoecology and a doctorate in
environmental science from the Swiss Federal Institute of
Technology in Zurich. Since 2003, she has been working for the
reinsurance company Swiss Re in a variety of roles. These include
heading the Cyber & Digital Solutions department, and she is
currently Cyber Practice Leader as well as chairing the Swiss Re
Cyber Council. Before joining Swiss Re, Maya Bundt was a
management consultant with Boston Consulting Group. Once
she is elected to the Board of Directors of Bâloise Holding Ltd
MEMBERS
Chairman’s
Committee
Audit and Risk
Committee
Remuneration
Committee
Investment
Committee
Nationality
Born in
Appointed in
Dr Thomas von Planta, Chairman (since 2021), Zurich
Dr Andreas Beerli, Vice-Chairman (since 2018),
Oberwil-Lieli
Christoph B. Gloor, Riehen
Hugo Lasat, Kessel-Lo (B)
Dr Karin Lenzlinger Diedenhofen, Wermatswil
Christoph Mäder, Hergiswil
Dr Markus R. Neuhaus, Zollikon
Thomas Pleines, Munich (D)
Prof. Dr Hans-Jörg Schmidt-Trenz, Hamburg (D)
Prof. Dr Marie-Noëlle Venturi-Zen-Ruffinen,
Crans-Montana
C
DC
M
M
C
M
DC
M
DC
M
C
M
C
DC
M
M
CH
CH
CH
B
CH
CH
CH
D
D
CH
1961
1951
1966
1964
1959
1959
1958
1955
1959
1975
C: Chair, DC: Deputy Chair, M: Member.Statutory rules concerning the number of permitted activities
2017
2011
2014
2016
2021
2019
2019
2012
2018
2016
41
Baloise Group Annual Report 2021
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.
50.0
50.0
0.0
Switzerland
Germany
Belgium
30.0
40.0
30.0
30.0
60.0
Gender
Men
Women
70.0
20.0
10.0
80.0
20.0
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 numerical restrictions.
Interlocking directorates
There are no interlocking directorates.
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 Com-
pany’s ultimate decision-making body. Decisions are taken by the
Board of Directors unless, on the basis of the Organisational
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 section
A3 of the Organisational Regulations state that the Board of Direc-
tors’ main functions and responsibilities are to act as the Company’s
ultimate managerial and supervisory body, to oversee the Compa-
ny’s finances and to determine its organisational structures.
www.baloise.com/rules-regulations
Information on the Board of Directors’ role in corporate social
and environmental responsibility can be found on page 101 onwards
in the Company’s Annual Review.
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
42
Baloise Group Annual Report 2021
Corporate Governance
Corporate Governance Report
investors, government agencies, trade associations and other
Baloise stakeholders. The Chairman of the Board of Directors
maintains close contact with the Group CEO. He attends the meetings
of the Corporate Executive Committee when appropriate, for example
whenever matters of strategic or long-term importance are being
discussed. He ensures the decisions of the Board of Directors are
implemented by the Corporate Executive Committee and, conversely,
that the Board of Directors is kept informed on all matters of mate-
rial importance to the decision-making and monitoring process at
Baloise.
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
(see 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
(see section A 3.7 of the Organisational Regulations).
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- making powers.
The committees appointed by the Board of Directors generally
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 individually elected 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 respon-
sibilities are specified in the Organisational Regulations. Additional
specific regulations applicable to individual committees govern
administrative and other aspects.
Functions and responsibilities of the committees
The Chairman’s Committee reviews key transactions, especially
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 candidates 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 remune-
ration paid to the Board of Directors and the Corporate 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 appli-
cable 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 perfor-
mance pool.
The Audit and Risk Committee supports the Board of Directors
in its non-delegable overarching supervisory and financial over-
sight 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 situa-
tion 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 regular reports on the work and
findings of Group Internal Audit and on cooperation with the
external auditors.
43
Baloise Group Annual Report 2021
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New committee structure as at 4 March 2022
The Chairman’s Committee has been recast as a Strategy
and Governance Committee (SGC). The SGC monitors the
progress of strategy and sustainability matters on behalf
of the Board of Directors. The Board of Directors is
responsible for both areas (in the case of strategy, this is
mandated by section 716a of the Swiss Code of Obliga-
tions) and, where required, adopts the relevant resolutions.
The SGC prepares nominations within the parameters of
the Board of Directors’ responsibility for nominations and
elections.
The Investment and Risk Committee (IRC; formerly
the Investment Committee) supports the Board of Directors
in the areas of investment management, capital manage-
ment and risk management. It oversees investment
activities and assesses capital adequacy and asset and
liability management as part of its overall review of the
financial risks. Asset management is no longer considered
as an isolated element in the committee but in the light
of key influencing factors (such as solvency, tied assets
and reserves).
The Audit Committee (AC; formerly Audit and Risk
Committee) supports the Board of Directors in its super-
vision of accounting, financial and regulatory reporting,
and compliance with statutory provisions. Only indepen-
dent members of the Board of Directors sit on the Audit
Committee, which receives the reports from the various
control functions (such as external auditors, Internal Audit,
Compliance and Risk Management). The AC reviews the
risk strategy and risk appetite of the Group for the atten-
tion of the Board of Directors and takes note of risk reports.
The tasks and responsibilities of the Remuneration
Committee (RC) are set out in the Articles of Association
and remain largely unchanged. The Remuneration Com-
mittee is elected by and reports to the Annual General
Meeting.
www.baloise.com/rules-regulations
44
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
The full Board of Directors of Bâloise Holding met on seven
occasions in 2021. 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 committees usually
last half a working day each.
The Chairman’s Committee convened six times in 2021, which
included one two-day strategy meeting. The Investment Commit-
tee met on three 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, occasio-
nally, 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 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 Secretary to the
Board of Directors attends all meetings of the full Board of
Directors and those of its committees.
Baloise Group Annual Report 2021
Corporate Governance
Corporate Governance Report
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.
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. In 2021, two seminars were con-
ducted for the Board of Directors on topics relating to valuation
and accounting, with a specific focus on the IFRS 17 and IFRS 9
accounting standards.
Succession planning
There are changes to the Board of Directors on an ongoing basis.
Succession planning is the responsibility of the Chairman’s
Committee, which is also responsible for planning personnel
changes in the Corporate Executive Committee.
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 42). Any restrictions on
availability and potential conflicts of interest rising from other
mandates are also taken into account.
The Chairman’s Committee identified insurance expertise,
know-how in IT and digitalisation, and the representation of
women on the Board of Directors as priorities for succession
planning in 2021. The election of Maya Bundt and Claudia Dill
will replace and strengthen the necessary expertise on the Board
of Directors and increase the proportion of female members to
40 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 31 onwards
and in the Financial Report starting on page 121.
The members of the Board of Directors have access to the
minutes of all meetings of the Corporate Executive Committee
and of the committees. The Chairman of the Board of Directors
may attend meetings of the Corporate Executive Committee at
any time.
45
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Thomas von Planta (1961, Switzerland, Dr iur., lawyer)
has been a member of the Board of Directors since 2017 and its Chairman since
30 April 2021. Until March 2019, he was Chairman of the Board of Directors of
Bellevue Group AG, Bank am Bellevue AG and Bellevue Asset Management AG.
Before that, 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. Until April 2021, he was managing director of CorFinAd AG, a company he
founded that specialises in consultancy for M&A transactions and capital market
finance. Dr Thomas von Planta sits on the Board of Directors of BB Biotech AG. He
is an independent non-executive director.
Andreas Beerli (1951, Switzerland, Dr iur.)
has been a member of the Board of Directors since 2011. After studying law at the
University of Basel, 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 Commit-
tee 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 and is a member of the Advisory Board
of Accenture Switzerland. Andreas Beerli is an independent non-executive 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 partner and Chief Executive
Officer of private bank La Roche & Co AG before going on to become a member of
the Executive Committee and Deputy 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 Corporation (SBC) before
moving to Vitra (International). Christoph B. Gloor served as president of the
Association of Swiss Private Banks from 2013 to 2015 and was a member of the
Board of Directors of the Swiss Bankers Association from 2013 to 2015. He was
a member of the Board of Managing Directors of the Basel Banking Association
until 2019. He holds an Executive Master in Change from INSEAD, where he also
completed the International Directors Program in 2018. Christoph B. Gloor is an
independent non-executive director.
46
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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 has been Group CEO of Brussels-
based Degroof Petercam since October 2021. In this role, he also chairs the Board
of Directors of Degroof Petercam Asset Management (DPAM), a company he
previously ran as CEO. Hugo Lasat is a member of the Board of Directors of Banque
Degroof Petercam in Luxembourg and Arvestar Asset Management, Brussels. He
is Chairman of the Board of Directors of Syncicap Asset Management Ltd., and his
previous managerial roles include CEO of Amonis Pension Fund and of the
Candriam Investors Group. He is a guest professor at KU Leuven (Brussels Campus).
Hugo Lasat is an independent non-executive director.
Karin Lenzlinger Diedenhofen (1959, Switzerland, Dr oec. HSG)
has been a member of the Board of Directors since 2021. She has been Vice-Pre-
sident of the SV Group AG since 2017 and Chair of the Board of Directors of Zürcher
Oberland Medien AG since 2015. She is a member of the Board of Directors of
Bank Linth LLB AG and of Übermorgen Ventures Investment AG and sits on various
boards of foundations and organisations with portfolios including corporate
responsibility and sustainability. Dr Karin Lenzlinger Diedenhofen has been
President of Zurich’s Chamber of Commerce and a member of the Board of Directors
of economiesuisse since 2013. Between 1991 and 2019, she held various positions,
most recently as CEO and delegate of the Board of Directors of Lenzlinger Söhne AG,
Nänikon / Uster. Karin Lenzlinger Diedenhofen is an independent non-executive
director.
Christoph Mäder (1959, Switzerland, lawyer)
has sat on the Board of Directors since May 2019. From 2000 to 2018, he was a
member of the Syngenta International AG executive team with responsibility for
legal and tax. He was also a member of the Management Board of the Basel
Chamber of Commerce and of scienceindustries until 2018, serving as the latter’s
president between 2008 and 2014. He has been president of economiesuisse,
the umbrella organisation representing Swiss business, since 2020. Christoph
Mäder is Vice-Chairman of the Board of Directors of Lonza Group AG, a member
of the Board of Directors of EMS Chemie Holding AG and Assivalor AG and,
since 2021, a member of the Bank Council of the Swiss National Bank. He is an
independent non-executive director.
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Markus R. Neuhaus (1958, Switzerland, Dr iur., qualified tax expert)
has been a member of the Board of Directors since 2019. He was the Chairman of
the Board of Directors of PricewaterhouseCoopers AG (PwC) from 2012 to 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 engagement 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.
Dr Markus R. Neuhaus is also Vice-President at Avenir Suisse and at the Zurich
Chamber of Commerce, and a member of the Board of Foundation of the ETH
Foundation. He is an independent non-executive 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 supervi-
sory 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 sat on the Board of Directors since 2018. He is a Professor of Economics at
Saarland University and the University of Hamburg (specialising in institutional
economics and governance) and Founding President of the HSBA Hamburg School
of Business Administration, where he has been an honorary senator since 2019.
From 1996 to 2017, he was Chief Executive Officer of the Hamburg Chamber of
Commerce, and from 2010 to 2018, President of the Working Committee of European
Chamber Chief Executives. He was a long-serving member of the Supervisory
Board of Hamburg Airport, Hamburg Exhibition Centre and the NDR Broadcasting
Council, as well as a member of the Board of Trustees of Hamburger Sparkasse.
He is Vice-Chair of the World Chamber Federation of the International Chamber of
Commerce ICC, a member of the Board of Trustees of the Hamburg Academic
Foundation and 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 Vice-Chair of the Board of Foundation of the
Swiss Board Institute, Vice-Chair of the Board of Directors of Banco Santander
Inter national 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:
Dr Philipp Jermann,
Buus (BL)
Head of Group Internal Audit:
Christian Schacher,
Breitenbach (SO)
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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.
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. Dr Alexander Bockelmann joined the Baloise Group
in February 2019 and has led the Corporate Division IT since then.
Matthias Henny (1971, Switzerland, Dr phil.)
completed his undergraduate and postgraduate studies in physics at the Univer-
sity 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 responsible 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.
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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 been in charge of 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.
Carsten Stolz (1968, Germany / Switzerland, Dr rer. pol.)
studied business economics at Fribourg University and gained a doctorate spe-
cialising 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,
Corporate Communications & Investor Relations, Mergers & Acquisitions, Group
Procurement and Run-off as well as the Appointed Actuary for Swiss business at
Baloise and the Head of Regulatory Affairs. Dr Carsten Stolz is a member of the
Finance and Regulation Committee of the Swiss Insurance Association (SVV).
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 2021 )
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 Gover-
nance Report (page 57 onwards) describes the remuneration
policies adopted and the remuneration system 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 2021 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 Remun-
eration 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 18 June 2021) and the Swiss Code
of Best Practice for Corporate Governance.
The report of the external auditors on the audit of the
Remuneration Report can be found in Appendix 2 to the Corpo-
rate Governance Report (page 80 onwards).
52
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 sharehol-
der 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 shareholder can accu-
mulate 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
qualifying electronic signature (article 16 [2] of the Articles of
Association).
Baloise Group Annual Report 2021
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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) OR states such requests must be
made by shareholders 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
percentage 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
2020
2021
5,072,681
5,025,285
46,960
48,369
5,119,641
5,073,654
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 2021, 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” 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, their independence and the
quality of the service.
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 sharehol-
ders 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
activities as follows:
▸
Details about its financial performance, targets, strategies
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
corporate 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 44.
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 available
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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Appendix 1:
Remuneration Report
REMUNERATION REPORT ............................................. 57
Letter from the Chairman of the Remuneration Committee . 58
1. Overview of remuneration .......................................... 59
2. Remuneration Committee of the Board of Directors .... 62
3. Remuneration policy and remuneration system .......... 62
4. Components of remuneration ..................................... 63
5. Share subscription plan and share participation plan . 67
6. Employee incentive plan ............................................ 68
7. Remuneration paid to the members of the Board of
Directors .................................................................... 68
8. Remuneration paid to the members of the Corporate
Executive Committee ................................................. 69
9. Loans and facilities .................................................... 70
10. Shares and options held ............................................ 70
11. Amounts of total remuneration and variable
remuneration ............................................................. 70
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LETTER FROM THE CHAIRMAN OF THE REMUNERATION COMMITTEE
DEAR SHAREHOLDERS,
It is my pleasure to present the 2021 remuneration report to you.
Last year, the Remuneration Committee of the Board of Directors
made sure that the remuneration processes were implemented
correctly and in the interests of the Company and its shareholders
and employees. Our remuneration system takes account of
individual and team performance on the one hand and, on the
other, the performance and position of the Company as a whole.
The system ensures that the risk appetite of senior managers, in
particular, is aligned not only with the objectives of the Company
but also the objectives of you, our shareholders.
REMUNERATION FOR 2021
Our remuneration model for senior managers contains fixed and
variable remuneration. The variable component is split into a
short-term and a long-term element.
Long-term variable remuneration is granted in the form of
performance share units (PSUs). It is aimed at strengthening
senior managers’ loyalty to the Company and harmonising their
interests with those of shareholders.
Short-term variable remuneration rewards performance in
the past year. The total amount is specified in the performance
pool. The performance pool factor, which is needed to calculate
the performance pool, measures effective target achievement
using four indicators and thus determines the total amount of
money to be distributed from the performance pool.
The performance pool factor was set at 110 per cent for
2021. As announced last year, a sustainability criterion has been
added for the first time. Its assessment is linked to two metrics.
The first of these is the RepTrak®Pulse index, which measures
our reputation within society. The second metric is the MSCI
sustainability index, which measures progress with achieving
the targets for the ESG criteria (environment, social, corporate
governance) and shows how well Baloise is upholding its
responsibilities vis-à-vis the different stakeholders.
CHANGES TO THE REMUNERATION MODEL
We periodically compare our model with others in order to
ascertain whether we are in line with the market and find out
how remuneration has changed in the market. This comparison,
insights from the most recent Annual General Meeting and
dialogue with you – including one-on-one meetings – provided
the basis for the adjustments that we have made to our remun-
eration system for the future.
Starting in 2022, the performance pool will be linked to the
cash upstream into Baloise Holding, which also forms the basis
for the shareholders’ dividend. In future, the related financial
key figure will be the main criterion for calculating the performance
pool factor. At the same time, the cash upstream achieved will
be linked to four strategic influencing factors. These are the
customer and employee targets for the 2022–2025 strategic
phase, the aforementioned sustainability criterion and the risk
metric (see the information box on page 63).
We firmly believe that the measures decided upon will result in
broader support for our remuneration model and greater trans-
parency. The more in-depth measurement of progress in the
sustainability sphere and the closer alignment with shareholders’
financial interests create a clear focus on the overall success of
the Baloise Group.
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 2022
Thomas Pleines
Chairman of the Remuneration Committee
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1. OVERVIEW OF REMUNERATION
A. REMUNERATION SYSTEM
Employees in the Baloise Group receive fixed remuneration and,
in some cases, variable remuneration. The Group-wide variable
remuneration comprises a short-term remuneration component
(performance pool) and a long-term remuneration component
(performance share units, PSUs). (See the table below.)
The remuneration system is designed in such a way that it
aligns and safeguards the interests of employees, the Company
and shareholders.
B. FIXED REMUNERATION
1. Description
Fixed remuneration comprises the basic salary and, depending
on location, fringe benefits and social security contributions.
The basic salary constitutes the level of remuneration that
is commensurate with the functions and responsibilities of the
employee’s role as well as the skills and expertise required in
this role. A market comparison of basic salary is carried out
periodically. Fair pay within the Baloise Group is also taken into
consideration. The Baloise Group applies the fair-pay principle
that people who do the same job and have the same qualifica-
tions should be paid the same amount.
C. SHORT-TERM VARIABLE REMUNERATION
1. Description
Short-term variable remuneration is the reward for achieving
annual targets. It is distributed from the performance pool, which
is the total amount of short-term variable remuneration that is
to be distributed. The aim of the performance pool is to reward
those employees whose achievements in the preceding year
have contributed to achieving the Company’s targets and
satisfying the interests of shareholders. The performance pool
also ensures that the same factors and the same methodology
are applied to variable remuneration across the Baloise Group.
Performance pool payments are awarded to eligible employees
on the basis of an appraisal by their line manager, who considers
the individual employee’s contributions to achievement of the
team targets and the Company’s strategic targets.
The employees eligible for performance pool payments are
those at senior management level.
2. Mechanism
Short-term variable remuneration is measured on the basis of
the performance pool factor. This factor was used to calculate
target achievement for 2021 using four indicators:
▸ Strategy implementation (weighting: 20 per cent)
The criteria are the strategic targets for the 2017 to 2021
strategic phase (cash upstream of CHF 2 billion into Baloise
Holding, one million new customers and a rating as one of
the best employers in the sector). Sustainability was
introduced as a fourth criterion in 2021.
▸ Business performance (weighting: 40 per cent)
▸
The metrics are profit for the period, the combined ratio
and the interest margin and business mix in the life insurance
business.
Risks taken (weighting: 20 per cent)
The criteria are the SST ratio, economic profit, the credit
rating awarded by Standards & Poor’s and the assessments
provided by the Head of Risk Management and the Head of
Group Compliance.
▸ Capital markets perspective (weighting: 20 per cent)
The metric is the performance of Baloise’s share price,
including dividends paid, compared with the European
insurance companies represented in the STOXX Europe 600
Insurance Index.
If the performance pool factor is set at 100 per cent, this means
that the targets have been met and the entire amount of short-
term variable remuneration is allocated.
DESCRIPTION
PURPOSE
▸ Basic salary
▸ Fringe benefits (dependent on location)
▸ Social security contributions
▸ Competitiveness in the marketplace
▸ Fairness and transparency
▸ Financial hedging
▸ Performance pool
▸ Paid in cash or restricted shares
▸ Performance share units (PSUs)
▸ Remuneration for the achievement of annual targets
(Company, team and individual targets)
▸ Participation in the success of the business
▸ Strengthening of senior managers’ loyalty to the Company
▸ Alignment of senior managers’ interests with those of
shareholders
Fixed
remuneration
Short-term
variable
remuneration
Long-term
variable
remuneration
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3. Performance pool factor for 2021
The performance pool factor for 2021 is 110 per cent (see the
boxes on pages 64 to 65).
company with the best TSR, the prospective entitlements are
multiplied by a factor of 2. If Baloise’s TSR is in the bottom
quartile, no shares are converted (factor of 0).
Performance pool factor vs. profit for the period
The calculation is illustrated in the following examples:
750
625
500
375
250
125
0
150 %
125 %
100 %
75 %
50 %
25 %
0 %
2017
2018
2019
2020
2021
Profit for the period (CHF million) (left axis)
Performance pool factor as a percentage of the expected value (right axis)
The performance pool factor also moves in line with the change in profit
for the period. The chart shows this correlation over the past five years.
D. LONG-TERM VARIABLE REMUNERATION
1. Description
The aim of long-term variable remuneration is to strengthen top
managers’ loyalty to the Baloise Group. Long-term variable
remuneration is granted in the form of performance share units
(PSUs).
PSUs are prospective entitlements to shares. Those eligible
are given the prospect of a certain number of shares. Target
achievement is measured after a period of three years. The
shares are awarded definitively only if the targets are achieved.
Awarding shares ensures that the recipients’ personal
objectives are in line with those of shareholders.
The Remuneration Committee determines the total amount
to be awarded in PSUs and the allocation of PSUs to the individual
Corporate Executive Committee members.
2. Mechanism
The metric used to measure PSU target achievement is total
shareholder return (TSR) compared with a peer group (companies
in the STOXX Europe 600 Insurance Index).
After three years, the prospective entitlements are multi-
plied by a performance multiplier at the time of conversion into
shares. The performance multiplier ranges from 0 to 2,
depending on TSR relative to the peer group. If Baloise’s TSR is
around the median for the peer group, the prospective
entitlements are multiplied by a factor of 1. If Baloise is the
60
Example 1: A person receives a prospective entitlement to
100 shares. At the time of conversion after the three-year period,
the Company is the highest-ranked of the peer group. The
performance multiplier is therefore 2, which means that the
person is awarded 200 shares.
Example 2: A person receives a prospective entitlement to
100 shares. At the time of conversion after the three-year period,
the Company is one of the lowest-ranked of the peer group. The
performance multiplier is therefore 0, which means that the
person is awarded no shares.
The Baloise Group reports on how the value of the shares
changes during the vesting period. This provides an indication
of the level of effective remuneration at the time of conversion.
3. PSUs for the period 2018 to 2021
During the calculation period, Baloise was ranked 14th
compared with the 33 insurance companies in the STOXX Europe
600 Insurance Index. The company ranked first is the one with
the best TSR performance in the calculation period. Baloise’s
ranking equates to a performance multiplier of 1.22 (1st place
= performance multiplier of 2; 26th place = performance
multiplier of 0.5; 27th place to 33rd place = performance
multiplier of 0).
Range for the performance multiplier and Baloise’s ranking
during the 2018–2021 calculation period
2.00
1.50
1.00
0.50
0.00
33rd place
26th place
17th place
8th place
1st place
14th place (Baloise) equates to a performance multiplier of 1.22
Performance multiplier, dependent on the ranking within the peer group
The chart shows the possible range for the performance multiplier,
depending on Baloise’s ranking compared with the 33 companies in the
STOXX Europe 600 Insurance Index. During the 2018–2021 calculation
period, Baloise achieved 14th place. This ranking equates to a performance
multiplier of 1.22.
E. REMUNERATION OF THE INDIVIDUAL CORPORATE
EXECUTIVE COMMITTEE MEMBERS
1. Description
For the Corporate Executive Committee, the expected breakdown
of total remuneration (excluding fringe benefits and social
security contributions) is as follows:
Fixed remuneration: 50 per cent
▸
Variable remuneration: 50 per cent
▸
▸ Short-term variable remuneration: 30 per cent
(half in cash and half in restricted shares)
Long-term variable remuneration: 20 per cent
▸
2. Individual members’ remuneration for 2021
See the chart below.
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
The following example shows the overall growth in the value of
the PSUs:
In 2018, a person receives a prospective entitlement to
100 shares. At the time of conversion in 2021, Baloise is ranked
14th compared with the 33 companies in the STOXX Europe 600
Insurance Index. The performance multiplier is therefore 1.22,
which means that the person is awarded 122 shares.
At the time of grant in 2018, one share had a value of
CHF 149.20. At the time of conversion in 2021, one share had a
value of CHF 158.90. The overall growth in value over the three
years is based on the combination of share price performance
and the performance multiplier. The overall growth in the value
of the share package in the period 2018–2021 was 30 per cent.
PSU PLAN
Share price at
grant date (CHF)
Share price at
conversion date
(CHF)
Multiplier Change in value
2014–2017
2015–2018
2016–2019
2017–2020
2018–2021
113.40
124.00
126.00
130.70
149.20
130.70
149.20
163.00
154.90
158.90
1.05
1.34
1.32
1.34
1.22
21 %
61 %
71 %
59 %
30 %
The table shows the plans that expired in the past five years. For example,
the plan that expired in 2021 had a performance multiplier of 1.22. During
the term of the plan, 2018–2021, the share price rose from CHF 149.20 to
CHF 158.90. The overall growth in value, based on the combination of share
price performance and the performance multiplier, was therefore 30 per cent.
Remuneration of the individual Corporate Executive Committee members
Gert
De Winter
Michael
Müller
Dr Thomas
Sieber 1
Dr Carsten
Stolz
Dr Matthias
Henny
Dr Alexander
Bockelmann
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
56 %
54 %
57 %
55 %
77 %
60 %
57 %
60 %
57 %
57%
55%
Fixed (comprising basic salary, non-cash remunera-
tion and employer contributions to the state-run social
security schemes and the occupational pension
scheme)
1 Until 31 August 2020
25 %
29 %
19 %
17 %
25 %
28%
18 %
17 %
23 %
23 %
27 %
17 %
16 %
22 %
18%
27 %
16 %
26 %
28 %
17 %
17 %
CHF 2.04 million
CHF 2.18 million
CHF 1.54 million
CHF 1.65 million
CHF 0.74 million
CHF 1.16 million
CHF 1.23 million
CHF 1.11 million
CHF 1.23 million
CHF 1.37 million
CHF 1.42 million
Short-term variable remuneration (comprising share-based and
cash payments from the performance pool)
Long-term variable remuneration
(comprising allocations of share entitlements)
The chart shows the remuneration of the individual members of the Corporate Executive Committee for 2020 and 2021 and the breakdown by remuneration
component. There are two reasons for the discrepancy between the aforementioned expected values (50 per cent basic salary, 30 per cent short-term
variable remuneration and 20 per cent long-term variable remuneration) and the breakdown shown in the chart: (1) The fixed remuneration in the chart
includes fringe benefits and social security contributions. (2) In both years, the performance pool factor was different to the expected value (2020:
90 per cent, 2021: 110 per cent, expected value: 100 per cent).
61
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Corporate Governance
Remuneration Report
2. REMUNERATION COMMITTEE OF THE BOARD OF
DIRECTORS
The Remuneration Committee is tasked with helping the Board
of Directors to frame the Company’s remuneration policy. It 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;
remuneration is demonstrably dependent on the Company’s
sustained success and individuals’ personal contributions
and does not create any perverse incentives;
the structure and amount of overall remuneration are
consistent with Baloise’s risk policies and encourage risk
awareness.
▸
▸
The Remuneration Committee’s main functions and responsibi-
lities are to:
▸
submit proposals to the Board of Directors on the structure
of remuneration in the Baloise Group;
submit proposals to the Board of Directors – for approval
by the Annual General Meeting – on the maximum
amount of remuneration for the Chairman and members
of the Board of Directors and for 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
for senior managers that, 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 Executive 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), Christoph
Mäder (Deputy Chairman), Prof. Hans-Jörg Schmidt-Trenz and
Dr Markus R. Neuhaus were elected to the Remuneration
Committee by the Annual General Meeting on 30 April 2021. 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
62
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.
3. REMUNERATION POLICY AND REMUNERATION SYSTEM
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 throughout
the Baloise Group. It is based on the principles set out in the
sections below.
Further provisions are stipulated in the Articles of Association.
Competitiveness in the marketplace
Baloise aims to pay basic salaries that are broadly in line with
the market, i.e. around the market median. The variable remu-
neration should exceed the going market rate in the event of
outstanding performance by the Company and outstanding
individual performance. Baloise 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. Insurance-related functions are benchmarked against
a peer group of direct insurers. The peer group for interdiscipli-
nary 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
Remuneration 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.
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.
Baloise carried out a wage equality analysis in Switzerland
in 2013 / 14 and again in 2018. 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. A further
wage equality analysis was conducted in 2021 in connection
with the amended Swiss Gender Equality Act. Baloise received
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
support from PwC with its EQUAL-SALARY method. The findings
of the analysis confirmed that wage equality for women and men
had been maintained at Baloise in accordance with the
provisions of the Gender Equality Act. The findings were
confirmed both by Ernst & Young and by Baloise’s employee
commission in an independent audit.
4. COMPONENTS OF REMUNERATION
Baloise views its remuneration packages holistically and there-
fore factors in not only the basic salary plus short-term and
long-term variable remuneration but also other benefits such
as pension contributions, fringe benefits, and development and
support for staff.
Sustainable remuneration
Baloise attaches considerable importance to managing its
business sustainably and retaining high performers. It also
matters to Baloise that its remuneration not only is competitive
and achievement-oriented but also encourages managerial staff
to align their long-term focus with the interests of stakeholders,
particularly 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 entitlements; these PSUs must be held for
three years before being converted into shares as a form of
deferred remuneration. Both the proportion of variable remun-
eration in the total pay package and the proportion of remune-
ration awarded in restricted shares or as deferred remuneration
increases in line with employees’ scope of strategic responsi-
bility 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
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.
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.
Short-term variable remuneration: performance pool
Adjustment of the performance pool indicator model
Starting in 2022, the performance pool indicator model will
have a simpler and more transparent structure. This should
make it much clearer for shareholders. From now on, the
performance pool factor will be calculated using a financial
assessment and a supplementary quality assessment.
The financial assessment is based on the cash upstream
to Baloise Holding. This key figure is one of Baloise’s three
strategic targets and forms the basis for enabling investors
to share in the Company’s success (shareholders’ dividend).
This aligns the interests of senior managers even more
closely with those of shareholders. Target achievement will
be assessed annually using the target of achieving a cash
upstream of CHF 2 billion by the end of the strategic
phase in 2025. The target achievement rate is capped at
150 per cent.
At the same time, the cash upstream achieved will be
linked to four strategic key factors. The four quality criteria
will be assessed annually using the customer and employee
strategic targets (to be achieved by 2025), our ambitions
in connection with our sustainability strategy and a risk
metric. The outcome of the quality assessment can raise
or lower the assessment of the cash upstream achieved by
up to 20 per cent.
The performance pool factor – obtained by multiplying
the financial assessment and the quality assessment –
cannot exceed 150 per cent in any circumstances.
Full details will be provided in the 2022 remuneration
report.
63
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
Short-term variable remuneration is the reward for achieving
annual targets. It is distributed from the performance pool, which
is the total amount of short-term variable remuneration that is
to be distributed. Short-term variable remuneration is measured
on the basis of the performance pool factor. It is set by the
Remuneration Committee after the end of the financial year
concerned. In doing so, the committee systematically analyses
target achievement using four measurable indicators, some of
which are quantitative and some qualitative:
▸
Indicator: strategy implementation (weighting: 20 per cent)
The criteria are the three strategic targets set by Baloise for
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.
Sustainability was introduced as an additional, fourth
criterion in 2021.
Indicator: business performance (weighting: 40 per cent)
The key metric is the profit for the period, with the combined
ratio, and the interest margin and business mix in the life
insurance business as supplementary metrics.
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 SST ratio, economic
profit, the credit rating awarded by Standard & Poor’s and
assessments provided by the Head of Risk Management
and the Head of Group Compliance.
▸
▸
▸
Indicator: capital markets perspective (weighting:
20 per cent)
The metric is the performance of Baloise’s share price,
including dividends paid, compared with the European
insurance companies represented in the STOXX Europe 600
Insurance Index (the composition of this index is shown in
the table on page 66).
If the performance pool factor is set at 100 per cent, this means
that the targets have been met and the entire amount of short-
term variable remuneration is allocated. The formal cap for the
performance pool factor is 150 per cent.
For 2021, the Remuneration Committee set a factor of 110 per
cent for the performance pool. The decision and the indicators
are explained in greater detail in the following.
Strategy implementation
How successfully were the strategic targets implemented?
Cash upstream
Customer growth
Employees
MSCI sustainability index and RepTrak®Pulse reputational index
Despite challenging conditions created by the COVID-19 pandemic, which has been ongoing since 2020, and
by the extreme weather events in 2021, Baloise was able to report a strong set of results at the end of the
2017–2021 strategic phase of Simply Safe. With a transfer of CHF 431 million in 2021 and a total transfer of
CHF 2.17 billion, we exceeded the cash target of CHF 2 billion for the 2017–2021 strategic phase. The
ambitious target for customer growth – around one million new customers as a result of organic growth – was
almost achieved thanks to a further rise of 0.22 million customers, taking the total to 0.96 million new
customers. Following a strong start to the year with a position in the top 10 per cent, Baloise’s employee
target was challenged from the summer onwards owing to the impact of government-imposed coronavirus
measures and the persistently high workload generated by the storm events, and this was reflected in the
measurement for December. We have made good progress with the new sustainability target added in 2021:
In the first measurement of its reputation (RepTrak score), the Baloise Group achieved 73.9 points, which
put it in the “strong” bracket; Baloise’s sustainability rating from MSCI was upgraded from BB to A in 2021.
Positive
Indicator
Key question
Criteria
Appraisal
Rating
64
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
Indicator
Key question
Criteria
Appraisal
Appraisal
Indicator
Key question
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)
Against a challenging backdrop in 2021, Baloise delivered a very strong performance and generated a
profit for the period of CHF 583 million. This is an impressive increase compared with 2020 that was
achieved despite the storms in all of Baloise’s core markets. The related claims took their toll on the
combined ratio, which was slightly higher year on year at 92.6 per cent. The life insurance business
benefited from the ongoing optimisation of the business mix, with a shift towards non-capital-intensive
products, and an easing of the interest rate environment. Thanks to EBIT of CHF 407 million, it is making a
substantial contribution to the Company’s success.
Very positive
Risks taken
How should the operating performance be assessed from a risk perspective?
SST
Economic profit
S&P credit rating
Internal perspective
Compliance
Baloise maintained a strong SST ratio for the Group and an S&P rating of A+ with a stable outlook,
underlining its very good level of capitalisation. The low level of interest rates continues to create
challenges. The risk assessment for compliance is very positive.
Positive
Indicator
Key question
Criteria
Appraisal
Rating
Capital markets perspective
How did Baloise perform relative to other companies on the stock market?
Total shareholder return
Baloise has achieved a total shareholder return of 41.1 per cent over the past five years. The figure for
2021 was – 1.3 per cent. Compared with the peer group (STOXX Europe 600 Insurance Index), the total
shareholder return for Baloise shares in 2021 was only ranked 28th out of 32 as at 31 December 2021.
However, Baloise shares staged a strong recovery at the turn of the year 2021 / 2022.
Insufficient
Determination of the performance pool factor
Appraisal
Baloise performed extremely well in 2021. The business performance indicator (with a weighting of
40 per cent) was rated as very positive thanks to the excellent results. The other indicators (each with a
weighting of 20 per cent) were more mixed. For example, share price performance was poor, and this has
to be viewed as inadequate from a capital markets perspective. By contrast, there were positive assessments
in respect of the risks taken and implementation of the 2017–2021 strategic programme. This paints a
positive picture overall, justifying a performance pool factor of 110 per cent.
110 per cent
Factor
65
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
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 inter-departmental and inter-
divisional 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 senior
managers in Switzerland and the corresponding functions
abroad. However, there is no automatic entitlement to receive
payments from the performance pool. The allocation of perfor-
mance pool payments to the members of the Corporate Executive
Committee is described in chapter 8 “Remuneration paid to the
members of the Corporate Executive Committee”.
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.
Those entitled to receive short-term variable remuneration
generally have a choice as to what percentage of their remune-
ration is paid out and what proportion they receive in the form
of shares with a closed period of three years (see chapter 5
“Share Subscription Plan and Share Participation Plan”). This
choice is limited for senior managers, who are obliged to sub-
scribe for shares on a sliding-scale basis.
Long-term variable remuneration: performance share units
The aim of long-term variable remuneration is to strengthen
senior managers’ loyalty to the Baloise Group. Long-term variable
remuneration is granted in the form of performance share units
(PSUs).
PSUs are prospective entitlements to shares. 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 senior managers
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.
The number of shares that can be subscribed after three
years – i.e. at the end of the vesting period – depends on the
total shareholder return (TSR) of Bâloise Holding Ltd. 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 during the vesting period. In this case, the
performance multiplier is 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 60). 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 2021 they receive their shares on 1 March 2024.
Companies in the STOXX Europe 600 Insurance Index (as at 31 December 2021)
ADMIRAL GRP
BALOISE
LEGAL & GENERAL GRP
SCOR
AEGON
AGEAS
ALLIANZ
CNP ASSURANCES
MUENCHENER RUECK
DIRECT LINE INSURANCE GROUP
NN GROUP
STOREBRAND
SWISS LIFE HLDG
GJENSIDIGE FORSIKRING
PHOENIX GROUP HDG.
SWISS REINSURANCE COMPANY
ASR NEDERLAND NV
HANNOVER RUECK
POSTE ITALIANE
TRYG
ASSICURAZIONI GENERALI
HELVETIA HLDG
AVIVA
AXA
HISCOX
HOMESERVE
Source: https://www.stoxx.com/index-details?symbol=SXIP
PRUDENTIAL
PZU GROUP
SAMPO
ZURICH INSURANCE GROUP
66
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
PERFORMANCE SHARE UNIT
(PSU) PLAN
2017
2018
2019
2020
2021
PSUs granted
PSUs converted
Change in value
Date
Price (CHF) 1
Date
Multiplier
Price (CHF) 1
Value (CHF) 2
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
1 Mar 2021
130.70
149.20
163.00
154.90
158.90
1 Mar 2020
1 Mar 2021
1 Mar 2022
1 Mar 2023
1 Mar 2024
1.34
1.22
0.72 4
0.61 4
0.00 4
154.90
158.90
149.10 4
149.10 4
149.10 4
207.57
193.86
107.68 4
91.12 4
0.00 4
3
59 %
30 %
– 34 % 4
– 41 % 4
– 100 % 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 2017: ([{1.34 *154.90} – 130.70] / 130.70) * 100 = 59 %.
4 Interim measurement as at 31 December 2021.
If an individual’s employment contract ends 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
or is terminated. However, if the participant has joined a rival
company or is personally at fault for the termination of the con-
tract, some of the allocated PSUs will expire on a pro rata basis.
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.
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 above.
5. 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. Members of the Corporate Executive Committee are obliged to receive at least
half of their short-term variable remuneration in the form of shares. There are upper limits on the proportion of shares that can be
obtained under the Share Participation Plan (see table).
Share Subscription Plan
Share Participation Plan
Overview
Those who qualify as eligible persons are able to
subscribe for shares at a preferential price as
part of their short-term variable remuneration.
Those who qualify as eligible persons are able to
subscribe for shares as part of their short-term variable
remuneration. They are granted loans on which
interest is charged at market rates, which enables
them to purchase more shares than they would other-
wise be able to buy. Repayment of the loan and the
interest incurred after the three-year period is hedged
by a put option that is financed by the sale of an off-
setting call option.
Subscription date
Vesting conditions
Specification of the share plan
parameters
1 March
1 March
No further vesting conditions
No further vesting conditions
Remuneration Committee
Remuneration Committee
Closed period
Three years
Three years
Calculation of subscription price
Closing price before the first day of the subscrip-
tion period, less a discount of 10 per cent
Closing price before the first day of the subscription
period, less discounted dividend rights over a three-
year period
Dividend entitlement
Yes
No
Maximum subscription limit for
Corporate Executive Committee
No upper limit
Maximum of 40 per cent (Share Participation Plan) of
short-term variable remuneration
Share plan parameters for 2021
Relevant closing price (8 January 2021):
CHF 159.40
Subscription price: CHF 143.46
Relevant closing price (8 January 2021):
CHF 159.40
Subscription price: CHF 139.73
67
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Remuneration Report
6. EMPLOYEE INCENTIVE PLAN
The Baloise Foundation for Employee Participation set up in 1989
offers members of staff working for various Baloise Group
companies 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
Foundation.
One-third (Chairman, since 1 May 2021) or one-quarter (other
members) 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 page 67).
Relevant closing price
Subscrip-
tion price
as at
CHF
CHF
31 May 2021 148.30
133.47
29 May 2020 136.60
122.94
Shares received by members of the
Board of Directors 2021
Shares received by members of the
Board of Directors 2020
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.
Chairman of the Board of Directors
The Chairman of the Board of Directors performs his various
functions on a full-time basis, in return for which he is paid a
fixed amount of remuneration. He is not entitled to any variable
remuneration and, consequently, he receives no performance
pool payments and no allocation of PSUs.
A number of changes took effect on 1 May 2021 when the
new Chairman of the Board of Directors took office:
▸
One of these changes is that the Chairman is now engaged
on the basis of a service contract. The agreement has a
fixed term that ends at the end of the subsequent Annual
General Meeting. It expires automatically when the
Chairman leaves office. If he is re-elected, the agreement
is extended by a further fixed-term period of appointment.
The Chairman receives one-third of his remuneration in
the form of shares that, as is also the case for the other
members of the Board of Directors, remain restricted for
three years and are subject to the conditions of the Share
Subscription Plan. Previously, the Chairman had an
employment relationship and received one-quarter of his
remuneration in the form of shares that remained restricted
for five years; he was able to choose freely whether these
shares were subject to the conditions of the Share
Subscription Plan or those of the Share Participation Plan.
EMPLOYEE INCENTIVE PLAN
Number of shares subscribed
2020
209,951
2021
214,804
Restricted until
31 Aug 2023
31 Aug 2024
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)
71.70
15.1
29.5
3,372
2,370
88.6
73.00
15.7
31.4
3,373
2,427
88.5
7. REMUNERATION PAID TO THE MEMBERS OF THE BOARD
OF DIRECTORS
See the tables on pages 72 and 73.
Components of remuneration
BOARD OF DIRECTORS’ FEES AND MANDATORY SHARE OWNERSHIP
Base fee – Chairman 1,2
Base fee – Member
Fee – Vice-Chairman 3
Fee – Chair of Committee 3
Fee – Committee Member 3
Mandatory share ownership
CHF thous-
and / year
of which shares in
Bâloise Holding AG
1,300
125
50
70
50
1 / 3
1 / 4
1 / 4
1 / 4
1 / 4
▸
1,000 shares each
1 From 1 May 2021
2 The Chairman is not entitled to any additional remuneration for participation in
Committees.
3 In addition to the base fee for members.
The members of the Board of Directors receive fixed remunera-
tion for their service as members of the board and its committees,
as set out in the table above. These amounts provide appro priate
compensation for the responsibility and workload involved in
their various functions and have not been raised since 2008.
68
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The tasks of the Chairman and the Vice-Chairman are described
in more detail in the corporate governance report (see pages 42
to 43).
Amounts receivable from current or previous members of the
Board of Directors; remuneration for previous members
No amounts receivable from current or previous members of the
Board of Directors have been waived.
The members of the Corporate 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, the payment of a significant proportion of their
remuneration is on a deferred basis.
The previous Chairman of the Board of Directors received
remuneration for his work up to the end of April. No other
remuneration was paid to former members of the Board of
Directors.
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.
8. REMUNERATION PAID TO THE MEMBERS OF THE
CORPORATE EXECUTIVE COMMITTEE
See the tables on pages 74 and 75.
Components of remuneration
T YPE OF REMUNERATION
DECIDED BY
Fixed remuneration 2021
Annual General Meeting 2020
Variable remuneration 2021
– cap
Annual General Meeting 2021
– individual payment
Remuneration Committee in February 2022
(in compliance with the cap set by the
Annual General Meeting 2021)
▸
▸
The remuneration for the Corporate Executive Committee
comprises the basic salary, which is paid in cash, the variable
remuneration and other compensation components (non-cash
benefits, social security contributions). The total amount of
remuneration is compared with the wider market at regular
intervals. The actual level of remuneration paid is determined
in accordance with the table above.
REMUNERATION STRUCTURE AND MANDATORY SHARE OWNERSHIP OF THE
CORPORATE EXECUTIVE COMMITTEE
200 %
40 %
60 %
100 %
230 %
40 %
90 %
100 %
100 %
100 %
Minimum
remueration
Expected
value
Maximum
remuneration
Basic salary
100 %
100 %
100 %
Short-term variable remuneration
(performance pool)
Long-term variable remuneration
(PSU allocation)
0 %
0 %
60 %
40 %
90 %
40 %
Mandatory share ownership
Shares and PSUs equivalent to 200 % of the basic
salary (within three years of taking office)
The Remuneration Committee decides on the short-term variable
remuneration awarded to the individual members of the Corpo-
rate Executive Committee. 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.
See pages 66 to 67 for details regarding the allocation of PSUs.
Remuneration for 2021
The remuneration paid to the members of the Corporate Execu-
tive Committee for the 2020 and 2021 financial years is set out
on pages 74 to 75. 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.
Due to the departure of Dr Thomas Sieber from the Corporate
Executive Committee in August 2020, the total remuneration
awarded to the Corporate Executive Committee was lower in
2021 than in the previous year (reduction of 2.8 per cent in the
aggregate amount of basic salaries and variable remuneration).
This was despite higher performance pool payments being
awarded.
The Annual General Meeting held on 24 April 2020 approved
an amount of CHF 4.01 million for the fixed remuneration (inclu-
ding social security contributions) payable to the Corporate
Executive Committee for 2021. The amount paid out was
69
11. AMOUNTS OF TOTAL REMUNERATION AND VARIABLE
REMUNERATION
See the table on page 79.
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 79 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 2021
even if individual components are not paid until a later date.
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
CHF 4.01 million. In addition, the Annual General Meeting held
on 30 April 2021 approved a maximum amount of CHF 4.79 million
for the variable remuneration (including social security
contributions and discounted subscriptions under the Share
Subscription Plan) payable for 2021. The total amount paid out
was CHF 3.80 million.
On 1 March 2021, the performance share units allocated in
2018 were converted into shares as scheduled. These PSUs had
a value of CHF 1.31 million at the time of allocation. The actual
value of the shares granted was CHF 1.64 million.
Employment contracts, change-of-control clauses,
inducement payments and severance packages
All members of the Corporate Executive Committee have a notice
period of twelve months. There are no change-of-control clauses.
No severance packages may be awarded to members of the
Corporate Executive Committee. Inducement payments must be
approved by the Remuneration Committee, irrespective of their
amount.
9. LOANS AND CREDIT FACILITIES
See the table on page 76.
10. SHARES AND OPTIONS HELD
See the tables on pages 77 and 78.
70
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This page has been left empty on purpose.
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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
Social security
contributions
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 who 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.
Social security 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 were 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 awarded at market value less 10 per cent
(CHF 122.94). In 2020, the Chairman of the Board of Directors had received half of his share-based remuneration in shares from the Share Subscription Plan for the Board of Directors (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 under the Share Subscription Plan for the Board of Directors.
This discount is also reported as part of the overall remuneration.
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REMUNERATION PAID TO THE MEMBERS OF THE BOARD OF DIRECTORS
2021
CHF thousand
Dr Thomas von Planta
Chairman of the Board of Directors (since 30 April 2021)
Member of the Board of Directors (until 30 April 2021)
Chairman’s Committee (until 30 April 2021)
Investment Committee (until 30 April 2021)
Dr Andreas Burckhardt (until 30 April 2021)
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
Remuneration Committee (since 30 April 2021)
Audit and Risk Committee
Dr Karin Lenzlinger Diedenhofen (since 30 April 2021)
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
Chairman’s Committee (since 30 April 2021)
Remuneration Committee (until 30 April 2021)
Fee
for additional
functions
Basic fee
Total
remuneration
Social security
contributions
Total
Of which:
in shares
941.7
10.5
952.2
307.5
866.7
41.7
440.0
125.0
125.0
125.0
125.0
125.0
83.3
125.0
125.0
125.0
16.7
16.7
–
50.0
50.0
70.0
50.0
50.0
50.0
50.0
33.3
50.0
33.3
70.0
50.0
50.0
50.0
33.3
16.7
440.0
295.0
–
–
440.0
103.9
295.0
73.7
225.0
6.2
231.2
56.2
175.0
–
175.0
43.6
175.0
208.3
116.7
245.0
6.2
6.2
5.8
5.0
181.2
43.6
214.5
52.1
122.5
29.1
250.0
61.1
175.0
–
175.0
43.6
225.0
6.2
231.2
56.2
Subtotal for the Board of Directors
2,431.7
790.0
3,221.7
46.1
3,267.7
870.7
Share Subscription Plan discount
Total for the Board of Directors
91.0
3,358.7
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 who 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.
Social security contributions The information disclosed for 2021 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). Statutory employer contributions are made to a vocational pension scheme for the new Chairman of the Board of Directors, who was
elected in May 2021 and works in this role on a full-time basis. No contributions to vocational pension schemes are made for 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 awarded at market value less 10 per cent
(CHF 133.47). In 2021, the previous Chairman of the Board of Directors received half of his share-based remuneration in shares from the Share Subscription Plan for the Board of Directors
(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). The new Chairman received all of
his share-based remuneration under the Share Subscription Plan for the Board of Directors (with a closed period of three years).
Share Subscription Plan discount Members of the Board of Directors receive a 10 per cent discount on the shares’ market price under the Share Subscription Plan for the Board of
Directors. This discount is also reported as part of the overall remuneration.
73
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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
Social
security
contribu-
tions
Total
remunera-
tion
Non-cash
benefits
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 who 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 a 10 per cent discount. 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 (PSUs) 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).
Social security contributions These comprise the employer contributions to the state-run social security schemes and the occupational pension scheme (up to the pensionable or
insurable threshold in each case). 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.
74
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REMUNERATION PAID TO THE MEMBERS OF THE CORPORATE EXECUTIVE COMMIT TEE
Total basic
salary
plus
variable
remunera-
tion
Variable
remunera-
tion as
percenta-
ge of basic
salary
Social
security
contribu-
tions
Total
remunera-
tion
Non-cash
benefits
Basic
salary
Variable remuneration
Cash
payment
(fixed)
Cash
payment
(variable)
Share
Subscrip-
tion Plan
Share
Participa-
tion Plan
PSU
(granted
in 2021)
Total
variable
remunera-
tion
950.0
313.6
313.4
700.0
184.9
277.1
–
–
380.0
1,007.0
1,957.0
106 %
–
219.2
2,176.2
280.1
742.1
1,442.1
106 %
7.0
198.3
1,647.4
2021
CHF thousand
Gert De Winter
Group CEO
Michael Müller
Head of Corporate Division
Switzerland
Dr Carsten Stolz
500.0
165.1
164.9
–
200.1
530.1
1,030.1
106 %
5.0
197.1
1,232.1
Head of Corporate Division
Finance
Dr Matthias Henny
500.0
0.1
197.9
132.0
200.1
530.1
1,030.1
106 %
5.0
197.1
1,232.1
Head of Corporate Division Asset
Management
Dr Alexander Bockelmann
600.0
59.5
197.9
138.6
240.1
636.1
1,236.1
106 %
–
179.5
1,415.6
Head of Corporate Division IT
Subtotal for the Corporate
Executive Committee
Share Subscription Plan
discount
Total for the Corporate Executive
Committee
3,250.0
723.1
1,151.4
270.6
1,300.3
3,445.3
6,695.3
106 %
16.9
991.2
7,703.4
127.9
7,831.3
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 2021 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 who 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 a 10 per cent discount. Subscription price = CHF 142.92.
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 137.34.
Performance Share Units (PSUs) These have been disclosed at their value of CHF 174.72 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).
Social security contributions These comprise the employer contributions to the state-run social security schemes and the occupational pension scheme (up to the pensionable or
insurable threshold in each case). 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.
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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
2020
2021
2020
2021
2020
2021
2020
CHF thousand
Dr Thomas von Planta
Chairman (since 30 April
2021)
Member (until 30 April 2021)
Dr Andreas Burckhardt (until
30 April 2021)
Chairman
Dr Andreas Beerli
Vice-Chairman
Christoph B. Gloor
Member
Hugo Lasat
Member
Dr Karin Lenzlinger
Diedenhofen (since
30 April 2021)
Member
Christoph Mäder
Member
Dr Markus R. Neuhaus
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.5
–
–
–
–
–
–
–
–
–
2,623.5
–
–
–
–
–
–
–
–
–
–
–
–
–
2,136.2
2,024.7
1,700.0
1,700.0
1,061.6
1,752.2
1,700.0
1,700.0
3,197.8
3,776.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
2021
–
–
–
–
–
–
–
–
–
–
–
–
–
2,623.5
–
–
–
–
–
–
–
–
–
2,623.5
2,136.2
2,024.7
2,761.6
3,452.2
4,897.8
5,476.9
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 individuals or companies who are related to members of the Board of Directors or 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 for the purpose of leveraging the Share Participation Plan (see chapter 5. ’Share Subscription Plan and Share Participation Plan’).
Loans are subject to interest at a market rate (2021: 0.5 per cent) and have a term of three years.
Other loans There are no policy loans.
76
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
Quantity
Dr Thomas von Planta
798
1,805
2,202
4,195
3,000
6,000
0.006 %
0.013 %
Chairman (since 30 April
2021)
Member (until 30 April
2021)
Dr Andreas Burckhardt
(until 30 April 2021)
Chairman
Dr Andreas Beerli
Member
32,640
–
29,301
–
61,941
–
0.127 %
–
3,295
3,695
2,568
2,720
5,863
6,415
0.012 %
0.014 %
Christoph B. Gloor
8,576
8,976
2,291
2,312
10,867
11,288
0.022 %
0.025 %
Member
Hugo Lasat
Member
Dr Karin Lenzlinger
Diedenhofen (since
30 April 2021)
Member
Christoph Mäder
Member
375
686
2,004
2,020
2,379
2,706
0.005 %
0.006 %
–
–
–
1,218
–
1,218
–
0.003 %
733
733
1,355
1,682
2,088
2,415
0.004 %
0.005 %
Dr Markus R. Neuhaus
–
–
1,355
1,745
1,355
1,745
0.003 %
0.004 %
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
2,671
3,106
2,406
2,429
5,077
5,535
0.010 %
0.012 %
–
–
1,693
2,020
1,693
2,020
0.003 %
0.004 %
375
686
2,106
2,216
2,481
2,902
0.005 %
0.006 %
49,463
19,687
47,281
22,557
96,744
42,244
0.198 %
0.092 %
Percentage of issued share
capital
0.101 %
0.043 %
0.097 %
0.049 %
0.198 %
0.092 %
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 that had been
received by the previous Chairman of the Board of Directors under the Share Subscription Plan was five years. The closed period for the new Chairman is the same as for the other
members of the Board of Directors, i.e. three 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.
77
Baloise Group Annual Report 2021
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)
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
29,593
30,852
6,591
6,148
36,184
37,000 0.074 % 0.081 %
7,225
6,861
26,698
27,799
8,477
7,339
35,175
35,138 0.072 % 0.077 %
5,325
5,057
Dr Carsten Stolz
3,006
5,768
6,012
5,923
9,018
11,691 0.018 % 0.026 %
3,803
3,611
Head of Corporate Division Finance
Dr Matthias Henny
10,618
13,377
22,073
20,941
32,691
34,318 0.067 % 0.075 %
3,803
3,611
Head of Corporate Division Asset
Management
Dr Alexander Bockelmann
Head of Corporate Division IT
Total for the members
of the Corporate Executive Committee
Percentage of issued
share capital
–
–
6,851
13,846
6,851
13,846 0.014 % 0.030 %
2,841
4,215
69,915
77,796
50,004
54,197 119,919 131,993 0.246 % 0.288 % 22,997
23,355
0.143 % 0.170 % 0.102 % 0.118 % 0.246 % 0.288 %
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.
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 2019, 1 March 2020 and 1 March 2021).
78
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
TOTAL AND VARIABLE REMUNERATION IN THE BALOISE GROUP
Cash
Shares
Prospective
entitlements
Total
Cash
Shares
Prospective
entitlements
2020
2021
Total
CHF million
Total remuneration
795.5
4.2
5.1
804.7
821.6
5.7
4.9
832.2
Total variable remuneration (total pool)
Number of beneficiaries
155.2
5,376
4.2
212
5.1
71
164.5
152.5
5,150
5.7
255
4.9
68
163.1
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
–
112.0
15.2
127.2
–
109.7
14.8
124.6
– 0.9
0.1
12
5.9
57
–
–
–
–
–
–
–
–
–
–
– 0.9
– 0.3
0.1
5.9
0.1
10
5.5
56
–
–
–
–
–
– 0.3
0.1
5.5
–
–
–
–
–
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.
Severance payment Remuneration agreed in connection with the termination of an employment contract. Severance packages are paid only in individual justified cases, but not to
members of the Board of Directors or the Corporate Executive Committee.
79
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
APPENDIX 2: REPORT OF THE STATUTORY AUDITOR TO THE ANNUAL GENERAL MEETING OF BÂLOISE HOLDING LTD, BASEL
Ernst & Young Ltd
Ernst & Young Ltd
Aeschengraben 27
Aeschengraben 27
P.O. Box
P.O. Box
CH 4002 Basel
CH 4002 Basel
Ernst & Young AG
Aeschengraben 27
Postfach
CH-4002 Basel
+41 58 286 86 86
+41 58 286 86 86
+41 58 286 86 00
+41 58 286 86 00
Phone:
Phone:
Fax:
Fax:
www.ey.com/ch
www.ey.com/ch
Telefon:
Fax:
www.ey.com/ch
+41 58 286 86 86
+41 58 286 86 00
To the General Meeting of
To the General Meeting of
Bâloise Holding AG, Basel
Bâloise Holding AG, Basel
An die Generalversammlung der
Bâloise Holding AG, Basel
Basel, 23 March 2022
Basel, 23 March 2022
Basel, 24. März 2021
Report of the statutory auditor on the remuneration report
Report of the statutory auditor on the remuneration report
Bericht der Revisionsstelle zur Jahresrechnung
We have audited the preceding remuneration report of Bâloise Holding AG (pages 59-79) for
We have audited the preceding remuneration report of Bâloise Holding AG (pages 59-79) for
the year ended 31 December 2021.
the year ended 31 December 2021.
Als Revisionsstelle haben wir die Jahresrechnung (Seiten 290 bis 301) der Bâloise Holding
AG, bestehend aus Erfolgsrechnung, Bilanz und Anhang, für das am 31. Dezember 2020
abgeschlossene Geschäftsjahr geprüft.
Board of Directors’ responsibility
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the
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
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
is also responsible for designing the remuneration system and defining individual
remuneration packages.
remuneration packages.
Auditor’s responsibility
Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying remuneration report. We
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
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
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
assurance about whether the remuneration report complies with Swiss law and articles 14–16
of the Ordinance.
of the Ordinance.
Verantwortung des Verwaltungsrates
Der Verwaltungsrat ist für die Aufstellung der Jahresrechnung in Übereinstimmung mit den
gesetzlichen Vorschriften und den Statuten verantwortlich. Diese Verantwortung beinhaltet
die Ausgestaltung, Implementierung und Aufrechterhaltung eines internen Kontrollsystems
mit Bezug auf die Aufstellung einer Jahresrechnung, die frei von wesentlichen falschen
Angaben als Folge von Verstössen oder Irrtümern ist. Darüber hinaus ist der Verwaltungsrat
für die Auswahl und die Anwendung sachgemässer Rechnungslegungsmethoden sowie die
Vornahme angemessener Schätzungen verantwortlich.
An audit involves performing procedures to obtain audit evidence on the disclosures made in
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
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,
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,
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
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
methods applied to value components of remuneration, as well as assessing the overall
presentation of the remuneration report.
presentation of the remuneration report.
Verantwortung der Revisionsstelle
Unsere Verantwortung ist es, aufgrund unserer Prüfung ein Prüfungsurteil über die Jahres-
rechnung abzugeben. Wir haben unsere Prüfung in Übereinstimmung mit dem schweizeri-
schen Gesetz und den Schweizer Prüfungsstandards vorgenommen. Nach diesen Standards
haben wir die Prüfung so zu planen und durchzuführen, dass wir hinreichende Sicherheit
gewinnen, ob die Jahresrechnung frei von wesentlichen falschen Angaben ist.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
a basis for our opinion.
Eine Prüfung beinhaltet die Durchführung von Prüfungshandlungen zur Erlangung von
Prüfungsnachweisen für die in der Jahresrechnung enthaltenen Wertansätze und sonstigen
Angaben. Die Auswahl der Prüfungshandlungen liegt im pflichtgemässen Ermessen des
Prüfers. Dies schliesst eine Beurteilung der Risiken wesentlicher falscher Angaben in der
Jahresrechnung als Folge von Verstössen oder Irrtümern ein. Bei der Beurteilung dieser
Risiken berücksichtigt der Prüfer das interne Kontrollsystem, soweit es für die Aufstellung
der Jahresrechnung von Bedeutung ist, um die den Umständen entsprechenden Prüfungs-
handlungen festzulegen, nicht aber um ein Prüfungsurteil über die Wirksamkeit des internen
Kontrollsystems abzugeben. Die Prüfung umfasst zudem die Beurteilung der Angemessen-
heit der angewandten Rechnungslegungsmethoden, der Plausibilität der vorgenommenen
Schätzungen sowie eine Würdigung der Gesamtdarstellung der Jahresrechnung. Wir sind
der Auffassung, dass die von uns erlangten Prüfungsnachweise eine ausreichende und
angemessene Grundlage für unser Prüfungsurteil bilden.
Prüfungsurteil
Nach unserer Beurteilung entspricht die Jahresrechnung für das am 31. Dezember 2020
abgeschlossene Geschäftsjahr dem schweizerischen Gesetz und den Statuten.
80
Baloise Group Annual Report 2021
Corporate Governance
Remuneration Report
2
Opinion
In our opinion, the remuneration report for the year ended 31 December 2021 of Bâloise
Holding AG complies with Swiss law and articles 14–16 of the Ordinance.
Prüfungsurteil
Nach unserer Beurteilung entspricht der Vergütungsbericht der Bâloise Holding AG für das
am 31. Dezember 2020 abgeschlossene Geschäftsjahr dem Gesetz und den Art. 14–16 der
VegüV.
Ernst & Young Ltd
Ernst & Young AG
Christian Fleig
Licensed audit expert
(Auditor in charge)
Christian Fleig
Zugelassener Revisionsexperte
(Leitender Revisor)
Patrick Schwaller
Licensed audit expert
Patrick Schwaller
Zugelassener Revisionsexperte
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 267 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
81
Unterkapitel Financial Report
Consolidated balance sheet .............................................. 84
Consolidated income statement ......................................... 86
Consolidated statement of comprehensive income ........... 87
Consolidated cash flow statement ..................................... 88
Consolidated statement of changes in equity .................... 90
NOTES TO THE CONSOLIDATED
ANNUAL FINANCIAL STATEMENTS ............................... 92
1. Basis of preparation ................................................... 92
2. Application of new financial reporting standards ......... 92
3. Consolidation principles and accounting policies ....... 97
4. Key accounting judgements,
estimates and assumptions ...................................... 118
5. Management of insurance risk and financial risk ...... 121
6. Basis of consolidation ............................................... 162
7. Segment reporting .................................................... 163
NOTES TO THE CONSOLIDATED BALANCE SHEET ........ 168
8. Property, plant and equipment ................................. 168
9. Intangible assets ...................................................... 170
10. Investment property ................................................ 173
11. Financial assets ....................................................... 173
12. Mortgages and loans ................................................ 178
13. Derivative financial instruments ............................... 179
14. Receivables ............................................................. 181
15. Reinsurance assets .................................................. 181
16. Receivables from reinsurers ..................................... 182
17. Employee benefits ................................................... 183
18. Deferred taxes ......................................................... 193
19. Other assets ............................................................ 195
20. Non-current assets and disposal groups
classified as held for sale ......................................... 196
21. Share capital ........................................................... 196
22. Technical reserves (gross) ....................................... 197
23. Liabilities arising from banking business
and financial contracts ............................................. 206
24. Financial liabilities ................................................... 207
25. Non-technical provisions ......................................... 209
26. Insurance liabilities ................................................. 209
NOTES TO THE CONSOLIDATED
INCOME STATEMENT .................................................. 210
27. Premiums earned and policy fees .............................. 210
28. Income from investments for
own account and at own risk ..................................... 210
29. Realised gains and losses on investments ................ 211
30. Income from services rendered ................................. 214
31. Other operating income ............................................ 214
32. Classification of expenses ........................................ 215
33. Personnel expenses .................................................. 215
34. Gains or losses on financial contracts ....................... 216
35. Income taxes ............................................................ 217
36. Earnings per share ................................................... 218
37. Other comprehensive income ................................... 219
OTHER DISCLOSURES ................................................ 221
38. Long-term equity investments and structure of the
Baloise Group .......................................................... 221
39. Related party transactions ....................................... 226
40. Contingent and future liabilities ............................... 226
41. Leases ..................................................................... 230
42. Events after the balance sheet date .......................... 231
REPORT OF THE STATUTORY AUDITOR
TO THE ANNUAL GENERAL MEETING OF
BÂLOISE HOLDING LTD, BASEL ................................... 232
Unterkapitel Baloise Group Annual Report 2021
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
Total assets
84
Note
31.12.2020
31.12.2021
8
9
38
10
11
11
12
13
15
16
17
14
14
18
19
466.2
1,155.4
263.4
8,410.3
419.5
1,180.4
316.0
8,464.5
3,983.6
4,681.7
12,556.2
14,490.3
6,974.8
6,375.5
28,110.2
28,502.8
1,993.8
2,083.2
15,872.8
15,117.5
1,142.1
1,089.1
677.7
117.8
515.6
7.7
294.4
366.8
87.9
48.3
981.5
902.1
823.9
170.7
450.0
5.9
271.3
334.9
73.7
66.7
226.3
4,004.0
193.5
4,073.5
88,364.5
89,979.0
Baloise Group Annual Report 2021
Financial Report
Consolidated balance sheet
CHF million
Equity and liabilities
Equity
Share capital
Capital reserves
Treasury shares
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
Total liabilities
Total equity and liabilities
Note
31.12.2020
31.12.2021
21
22
23
24
25
13
26
17
18
4.9
370.2
– 578.0
203.7
6,983.0
6,983.7
2.0
4.6
376.8
– 84.9
178.9
6,809.7
7,285.1
14.8
6,985.7
7,299.9
48,585.0
48,661.4
4,074.7
7,924.2
4,038.5
8,189.7
13,284.6
14,654.2
2,363.3
2,425.7
57.5
152.6
1,879.9
1,340.2
566.2
1,000.4
45.4
104.9
77.0
89.8
1,770.1
926.1
706.1
1,002.0
41.2
97.4
81,378.8
82,679.1
88,364.5
89,979.0
85
Baloise Group Annual Report 2021
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
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses
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)
86
Note
2020
2021
27
27
27
28
29
30
31
32
32
32
34
32
24
35
36
7,034.8
– 268.0
6,766.8
7,416.2
– 326.5
7,089.7
1,176.5
1,159.5
288.3
179.5
118.5
64.1
193.4
370.5
1,534.2
130.6
4.9
213.2
8,787.0
10,502.5
– 6,182.6
– 5,813.4
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 8,184.1
– 9,780.0
602.9
722.5
– 34.3
568.6
– 24.7
697.9
– 140.3
428.3
– 114.6
583.3
434.3
– 6.1
9.65
9.63
588.4
– 5.1
13.06
13.05
Baloise Group Annual Report 2021
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
Total items not to be reclassified to the income statement
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
2020
2021
428.3
583.3
–
– 58.7
33.1
0.1
7.3
– 18.2
386.8
– 4.2
119.7
– 0.8
– 91.6
– 134.8
– 50.1
225.1
11.5
350.8
– 35.2
4.6
– 57.7
274.1
– 432.8
2.9
– 35.4
– 0.8
221.0
– 128.7
73.7
– 300.1
206.9
– 26.0
635.2
557.3
641.3
– 6.1
563.6
– 6.3
87
Consolidated cash flow statement
Consolidated cash flow statement
CHF million
Cash flow from operating activities
Profit before taxes
Adjustments for
Note
2020
2021
568.6
697.9
Depreciation, amortisation and impairment of property, plant and equipment and of intangible assets
8 / 9
97.1
– 0.2
– 19.8
– 507.6
35.1
9.0
9
– 109.5
– 84.4
– 36.1
808.5
7.8
– 52.0
– 36.9
102.0
0.5
– 5.3
– 1,889.0
31.7
5.3
– 94.7
1,078.9
– 176.9
2,249.2
25.3
– 87.4
167.6
10
10
– 304.7
70.4
– 101.6
238.5
– 3,057.2
– 2,994.0
2,683.0
2,190.3
– 6,015.6
– 6,344.2
6,052.0
4,777.0
– 18,862.2
– 51,640.7
18,733.5
52,389.6
– 112.2
286.9
34.3
– 106.9
80.8
– 282.7
210.8
24.7
– 95.7
477.0
24
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 payments
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 acitivities
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
88
Baloise Group Annual Report 2021Financial 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
Capital reductions
Additions to financial liabilities
Disposals of financial liabilities
Borrowing costs paid
Repayments of principal in connection with leases
Purchase of treasury shares
Sale of treasury shares
Dividends 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
2020
2021
8
9
38
38
21
24
24
24
24
– 27.3
1.0
– 44.0
–
270.4
–
– 6.0
176.1
12.7
382.9
–
299.7
– 300.0
– 36.7
– 16.9
– 158.0
68.2
– 0.4
– 287.4
– 431.5
– 14.0
7.3
– 35.4
0.6
–
–
– 59.7
–
7.0
– 94.3
–
450.0
– 375.0
– 25.5
– 13.3
– 51.6
65.2
– 0.4
– 288.4
– 238.9
32.3
143.8
3,988.0
4,004.0
32.3
– 16.3
143.8
– 74.3
4,004.0
4,073.5
2,590.0
2,577.2
0.1
0.1
1,413.9
1,496.2
4,004.0
107.2
4,073.5
223.4
618.4
35.9
– 21.9
594.3
38.3
– 23.5
89
Baloise Group Annual Report 2021Financial Report Consolidated statement of changes in equity
Consolidated statement of changes in equity
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
– 287.4
– 287.4
– 0.4
– 287.8
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 1
Share-based payments
Allocation of treasury shares as part of
share-based remuneration programmes 1
Cancellation of (treasury) shares
21
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
Other
Balance as at 31 December
37
21
–
–
–
–
–
–
–
–
–
–
– 17.5
– 140.5
40.8
9.0
– 25.5
27.4
–
25.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.9
Total
equity
6,715.6
428.3
206.9
635.2
1.6
– 6.1
0.0
– 6.1
–
–
–
–
–
–
–
– 158.0
68.2
9.0
–
–
0.4
0.4
6.4
6.4
–
2.0
– 3.3
6,985.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 158.0
68.2
9.0
–
–
–
–
– 3.3
– 3.3
370.2
– 578.0
203.7
6,983.0
6,983.7
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.
90
Baloise Group Annual Report 2021Financial Report Consolidated statement of changes in equity
2021
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
21
– 0.3
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
Other
Balance as at 31 December
–
–
–
4.6
Note Share capital
Capital
reserves
Treasury
shares
Other
changes in
equity
Retained
earnings
Equity
before non-
controlling
interests
Non-
controlling
interests
4.9
370.2
– 578.0
203.7
6,983.0
6,983.7
–
588.4
– 24.8
– 24.8
–
588.4
588.4
– 24.8
563.6
Total
equity
6,985.7
583.3
– 26.0
557.3
2.0
– 5.1
– 1.2
– 6.3
37
21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 13.8
41.0
4.9
– 25.4
–
–
–
–
–
–
–
–
–
– 37.8
24.2
–
25.4
481.4
–
–
–
–
–
–
–
–
–
–
–
–
–
– 288.4
– 288.4
– 0.4
– 288.8
–
–
–
–
–
– 481.1
–
–
– 51.6
65.2
4.9
–
–
–
–
–
–
0.4
–
–
–
–
– 51.6
65.2
5.3
–
–
–
7.9
7.9
19.0
26.9
–
–
–
–
376.8
– 84.9
178.9
6,809.7
7,285.1
14.8
7,299.9
91
Baloise Group Annual Report 2021Financial Report Baloise Group Annual Report 2021
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 22 March 2022 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 4.20F(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.
92
Baloise Group Annual Report 2021
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
Private debt
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
2021
2021
2020
2021
2021
2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19,364.5
20,571.8
7,451.9
6,593.5
1,238.1
10.0
7,451.9
6,646.1
1,238.1
10.3
11,269.3
11,610.9
3,684.0
3,930.6
566.1
28.8
185.0
199.0
–
–
–
–
566.1
29.2
185.0
203.9
–
–
–
–
–
–
–
–
–
–
–
– 842.0
– 353.7
– 535.6
959.2
– 0.2
– 93.6
– 590.8
– 49.8
– 0.5
– 540.0
– 16.1
–
–
–
–
271.3
334.9
273.0
334.9
2,577.3
2,577.3
– 22.8
– 31.9
– 12.8
2,272.9
2,272.9
152.6
656.3
151.4
713.1
152.6
656.3
151.4
713.1
1,236.7
1,236.7
0.2
0.2
–
27.9
200.3
–
27.9
200.3
–
–
–
4.2
–
–
–
8.8
406.4
36.0
140.9
–
–
–
–
–
–
–
4.3
–
–
–
8.8
406.4
36.0
140.9
–
–
–
–
320.2
65.9
– 15.5
– 7.3
8.4
330.0
– 4.5
–
0.3
71.5
–
–
–
3.1
–
–
–
– 0.4
– 4.3
2.8
91.6
–
–
–
–
93
Baloise Group Annual Report 2021
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
5,867.3
108.9
4,096.0
–
–
103.1
1,256.7
–
–
–
8,986.7
554.2
397.1
–
10.0
1,140.9
1,219.7
–
–
–
2,350.8
2,735.0
1,281.2
–
–
9,035.2
476.1
–
–
–
1,830.7
1,970.2
643.0
–
–
932.3
468.9
–
–
–
328.9
19,364.5
2,083.7
176.2
1,238.1
–
57.8
262.7
566.1
28.8
185.0
7,451.9
6,593.5
1,238.1
10.0
11,269.3
3,684.0
566.1
28.8
185.0
–
– 10.7
– 1.5
–
–
– 23.6
–
–
–
–
328.9
2,080.9
176.2
1,238.1
–
61.9
270.7
566.1
29.2
185.0
2.5
27.6
115.3
22.6
31.0
199.0
– 1.2
32.4
as at 31.12.2021
CHF million
Financial assets of a debt
nature
Public corporations
Industrial enterprises
Financial institutions
Private debt
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
1,269.7
394.8
696.8
1.0
104.8
17.6
86.6
58.5
45.6
8.7
37.3
16.6
185.5
60.7
271.3
334.9
– 1.7
– 1.8
185.5
60.7
199.4
2,577.3
–
199.4
The carrying amount of the financial asset before impairment pursuant to IFRS 4.39G(a) is obtained by adding together the carrying amounts and impairment losses shown in the table
above.
Interest Rate Benchmark Reform
The Interest Rate Benchmark Reform – Phase 2 relates to amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 and is to be
adopted from 1 January 2021. The amendments address issues that may affect financial reporting when an existing interest rate
benchmark (interbank offered rate, IBOR) is replaced by an alternative benchmark (alternative reference rate, ARR).
The existing interest-rate benchmarks (IBORs), including LIBOR (London Interbank Offered Rate), were discontinued for various
currency areas at the end of 2021. An exception is being made for certain US LIBOR tenors, which will continue until 30 June 2023.
The discontinuation of the existing interest-rate benchmarks resulted in the adaptation and implementation of suitable transitional
rules. As a result of the replacement of the existing interest-rate benchmarks with alternative interest-rate benchmarks, amendments
were made to LIBOR-linked contracts, to the valuations of affected financial instruments (updating the effective interest rates)
and to data and information systems (operational readiness).
Other relevant aspects that are still ongoing are the identification, management and monitoring of risks that are associated
with the reform. Risks may arise, in particular, if exposures are not identified quickly enough and this leads to legal disputes and
reputational damage. Modest adverse effects could result from a situation in which the interest rate benchmarks that are selected
as replacements prove detrimental for the Baloise Group. However, the successor rates are usually adjusted in such a way that
they do not put either of the counterparties at a disadvantage. Minor risks may also arise if the operational readiness of databases
and information systems cannot be guaranteed.
94
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
As a key measure to implement the reform and minimise its risks, the Baloise Group has signed the ISDA Fallbacks Protocol on
behalf of all affected companies, which provides a framework for managing the transition away from LIBOR in derivatives. In
addition, an inventory is being taken of all contracts and exposures affected by the discontinuation of LIBOR.
This inventory was used as a basis for planning the LIBOR transition up to the end of 2021. The transition was completed for
virtually all major exposures by the end of 2021. An exception is being made for the aforementioned longer transitional period in
place for US LIBOR, which in the case of senior secured loans would probably lead to an exposure beyond the end of the year that
would not be directly subject to any transitional guidance.
In summary, however, the effects of the Interest Benchmark Reform do not have any material impact on the profit for the period
or the Baloise Group’s risk management strategy.
Financial instruments that have not yet been switched to an alternative reference rate
The amount shown for non-derivative financial assets in the table below relates to the aforementioned US LIBOR exposure that
exists in relation to the senior secured loans and in the real estate fund business. The fair values of these investments as at the
relevant reporting date are shown. The US LIBOR exposure will end entirely by 30 June 2023 at the latest.
CHF million
Non-derivative financial assets
Non-derivative financial liabilities
Derivative financial instruments
31.12.2021
1,782.1
–
–
The Baloise Group does not believe it is necessary to voluntarily adopt other new accounting standards earlier than required.
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 2021 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
95
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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.
96
Baloise Group Annual Report 2021
Financial Report
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
consolidation 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.
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
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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 available-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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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
31.12.2020
31.12.2021
Ø 2020
Ø 2021
1.08
0.89
1.04
0.91
1.07
0.94
1.08
0.91
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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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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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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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
characteristics 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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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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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:
▸
Accident
All standard product lines typical of each relevant market are available in the accident insurance business. The Belgian market
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.
▸
▸
▸ 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.
▸
▸ Marine
Marine insurance is mainly sold in Switzerland, Germany and Belgium. These products may include a third-party liability
component 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 transaction
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 Employee Stock Option Programme (ESOP), which is a equity- settled
remuneration programme.
Equity-settled plans, as well as plans with a choice of settlement method, are measured and disclosed in compliance with
IFRS 2 Share-based Payment. Plans that are settled with shares in Bâloise Holding Ltd or FRIDAY Insurance S.A. are measured
at fair value on the grant date and are charged as personnel expenses during the vesting period and recognised under equity.
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:
▸
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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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 directly linked to this business.
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.
The predominant risks in the life insurance sector are biometric risks, such as longevity risk, mortality risk and disability risk.
The companies in the Baloise Group review and analyse these risks, along with the frequency with which the policies are cancelled,
invalidated and reactivated, on a decentralised basis. 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 to ensure that rates are adequate
and to set aside sufficient reserves to meet future insurance liabilities. The risks in this context are manageable because rates
have to be calculated conservatively by law and the statistical basis is relatively good.
The Baloise Group is also exposed to interest-rate risk as a result of issuing interest-rate guarantees and to liquidity risk due
to the existence of implicit financial guarantees and options.
Due to its investments, Baloise is also exposed to market risk that may arise as a result of the fluctuation of market prices in
certain asset classes and to credit risk arising from changes in creditworthiness, as measured by credit quality or credit rating,
for example.
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, interest rate risk, liquidity risk and credit 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 independently
assessing the risks. 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
▸
▸
▸
122
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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.
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. Senior management signs off the ORSA reporting and takes account of business strategy
and risk strategy considerations in its decisions.
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 up 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.
123
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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
124
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 2021
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
125
Baloise Group Annual Report 2021
Financial Report
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.
126
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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 2021, 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 4,738.5 million (2020:
CHF 4,600.6 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 365.4 million (2020: CHF 356.9 million) in claims payments (after taxes) before reinsurance.
Following the disposal of the ’London market’ subportfolio, Baloise’s run-off portfolio in the non-life business consists of the
hospital liability business in Germany, which was transferred to the Group’s run-off portfolio in 2018.
In the calculation of claims reserves for this portfolio, Baloise is guided by the relevant studies 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 228.2 million (2020: CHF 263.0 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, the effect
would be around CHF 15.8 million after taxes and before reinsurance (2020: CHF 18.2 million).
127
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Total
Year in which the claims occurred
732.2
768.5
733.6
707.8
704.8
729.5
759.4
761.7
861.4
861.8
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
751.1
736.9
726.3
717.0
710.5
705.9
698.2
685.1
680.6
680.6
768.2
764.1
764.7
756.3
752.1
752.3
743.8
735.1
–
715.7
701.2
695.9
688.5
681.2
678.4
675.5
–
–
667.8
657.6
650.9
646.0
643.9
635.8
–
–
–
689.5
675.0
673.0
669.1
667.0
–
–
–
–
728.9
707.4
708.2
712.8
–
–
–
–
–
762.6
754.0
750.7
–
–
–
–
–
–
761.7
754.6
–
–
–
–
–
–
–
841.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
735.1
675.5
635.8
667.0
712.8
750.7
754.6
841.0
861.8
7,314.8
–
–
–
–
–
–
–
–
–
–
Claims paid
– 647.9
– 694.2
– 625.5
– 591.5
– 620.3
– 649.8
– 681.8
– 683.0
– 725.5
– 483.6 – 6,403.1
911.7
375.1
691.9
– 100.4
1,878.3
Gross claims reserves
32.7
40.9
50.0
44.3
46.7
63.0
68.9
71.6
115.5
378.2
Gross claims reserves
prior to 2012 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life, including
IBNR)
Reinsurers’ share
Net claims reserves
128
Baloise Group Annual Report 2021
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
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Total
Year in which the claims occurred
297.4
367.7
306.0
303.2
318.6
340.5
345.5
325.1
336.0
477.5
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
298.4
302.5
304.3
302.6
303.2
302.9
302.6
302.2
302.4
302.4
370.3
371.0
379.3
379.8
380.8
377.9
376.3
375.7
–
316.1
319.9
320.4
314.5
313.3
311.8
312.7
–
–
304.9
304.5
301.4
301.8
301.8
303.5
–
–
–
314.3
313.6
307.4
305.4
305.3
–
–
–
–
331.2
327.8
322.4
321.6
–
–
–
–
–
335.7
332.6
332.5
–
–
–
–
–
–
325.7
327.1
–
–
–
–
–
–
–
335.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
375.7
312.7
303.5
305.3
321.6
332.5
327.1
335.1
477.5
3,393.3
–
–
–
–
–
–
–
–
–
–
Claims paid
– 296.9
– 367.7
– 299.9
– 289.3
– 290.5
– 300.4
– 302.7
– 285.6
– 248.1
– 189.8 – 2,870.9
Gross claims reserves
5.5
8.0
12.8
14.2
14.8
21.2
29.8
41.5
87.0
287.7
Gross claims reserves
prior to 2012 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life, including
IBNR)
Reinsurers’ share
Net claims reserves
522.4
284.2
137.3
– 258.6
685.3
129
–
–
–
–
–
–
–
–
–
–
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
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
ESTIMATED CUMULATIVE CLAIMS INCURRED IN BELGIUM
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Total
Year in which the claims occurred
412.4
1 403.6
483.7
459.9
470.3
446.8
495.0
2 643.8
3 682.3
820.3
1426.5
421.9
412.9
410.7
416.9
417.5
494.3
488.7
483.4
479.1
402.5
398.0
396.7
394.4
388.2
2 486.4
3 499.8
504.3
2 395.2
3 493.3
495.4
483.9
2 580.8
3 684.0
710.2
2 527.2
3 592.3
677.7
478.9
470.5
476.0
480.7
478.9
2 493.3
3 526.6
591.5
2 491.9
3 511.4
519.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
401.4
489.2
495.4
504.3
519.4
591.5
677.7
710.2
820.3
5,644.9
Seven years later
2 431.5
3 404.1
489.2
Eight years later
3 444.4
401.4
–
–
–
–
–
–
Nine years later
Estimated claims
incurred
435.5
435.5
Claims paid
– 380.7
– 365.4
– 446.8
– 417.0
– 430.3
– 428.1
– 469.3
– 544.3
– 493.8
– 402.0 – 4,377.5
Gross claims reserves
54.8
36.0
42.4
78.4
74.0
91.3
122.2
133.4
216.4
418.3
1,267.4
Gross claims reserves
prior to 2012 (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 Nateus NV and Audi NV.
2 The increase in the total estimated claims incurred is primarily due to the addition of Fidea NV.
3 The increase in the total estimated claims incurred is primarily due to the addition of Athora.
540.3
264.1
– 543.5
1,528.4
130
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
ESTIMATED CUMULATIVE CLAIMS INCURRED IN LUXEMBOURG
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
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
24.0
23.6
1 36.8
243.8
49.8
49.6
50.3
50.3
42.0
65.6
24.5
1 36.5
2 39.9
39.3
39.9
40.1
40.1
39.9
39.8
39.8
1 37.8
2 41.2
40.5
40.7
40.6
40.4
40.0
40.0
–
40.0
2 40.8
40.5
40.8
40.5
40.2
39.7
39.5
–
–
44.0
44.3
43.9
43.4
43.2
43.0
–
–
–
47.2
46.3
45.8
45.4
45.2
–
–
–
–
46.3
46.0
45.2
45.2
–
–
–
–
–
50.6
50.1
50.3
–
–
–
–
–
–
49.9
50.0
–
–
–
–
–
–
–
42.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
39.5
43.0
45.2
45.2
50.3
50.0
42.4
65.6
461.0
–
–
–
–
–
–
–
–
–
–
– 39.7
– 39.8
– 39.4
– 42.7
– 44.7
– 44.5
– 49.0
– 48.0
– 38.6
– 37.2
– 423.7
Gross claims reserves
0.1
0.2
0.1
0.3
0.5
0.7
1.3
2.0
3.8
28.4
Gross claims reserves
prior to 2012 (including
large claims and
assumed business)
Gross provision
for annuities
(non-life,
including IBNR)
Reinsurers’ share
Net claims reserves
37.3
79.4
–
– 69.4
47.3
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. Legal approval of the portfolio transfer was granted in 2021, which meant that legal finality
was achieved in addition to the existing economic finality. All related claims reserves were reversed.
131
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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
31.12.2020
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 %
31.12.2021
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
877.8
467.4
2,895.1
509.3
5,974.0
16,356.8
2.3 %
1.3 %
4,241.2
134.3
5,809.9
2.9 %
41.9
140.7
3,310.0
2.9 %
449.3
19.2
544.7
1.9 %
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.
132
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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
2020
2021
2020
2021
2020
2021
2020
2021
835.9
867.7
2,165.1
2,493.8
35.8
42.0
376.5
441.0
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. Actuarially appropriate
annuity conversion rates are used for all of the accumulated retirement assets, while ensuring that the legal minimum require-
ments for conversion are complied with in respect of the minimum accumulated capital stipulated by law. 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.
133
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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
31.12.2020
Actuarial reserves
31.12.2021
CHF
million
Share (%)
CHF
million
Share (%)
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
12,312.6
8,535.9
1,651.5
11,309.1
33,809.0
2,170.6
1,680.8
3,851.5
32.7
22.7
4.4
30.0
89.8
5.8
4.5
10.2
37,513.8
100.0
37,660.5
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.
134
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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 44 mil-
lion (2020: 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 negligible 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 65 million (2020: CHF 80 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) were 50 basis
points higher in 2021. In Germany, this scenario resulted in marginal changes in DACs, in the reserve for final policyhold-
ers’ dividends and in the URR (2020: positive effect of CHF 3 million on the income statement). The negative effect recognised
directly in equity amounted to approximately CHF 12 million (2020: CHF 5 million). In Belgium, this scenario resulted in a
marginal increase in DACs. The smaller addition to the provision for impending losses, which had led to a positive effect
on the income statement in 2020, was not repeated because rising interest rates meant that no addition was made to the
provision for impending losses in 2021. The positive effect on the income statement was therefore marginal overall (2020:
CHF 35 million). The negative effect on unrealised gains amounted to CHF 169 million (2020: CHF 196 million). In Luxembourg,
this scenario produced a marginally positive effect on the income statement and a negative effect of roughly CHF 19 million
on the unrealised gains and losses recognised in equity (2020: CHF 20 million). The resultant 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 29 million on the income statement (2020:
CHF 30 million). The negative effect recognised directly in equity amounted to approximately CHF 204 million (2020: CHF 196 mil-
lion).
135
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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) were 50 basis points
lower in 2021. In Germany, this scenario resulted in marginal changes in DACs, in the reserve for final policyholders’ dividends
and in the URR (2020: negative effect of CHF 6 million on the income statement). The positive effect recognised directly in
equity amounted to CHF 12 million (2020: CHF 5 million). In Belgium, this scenario resulted in an additional DAC write-down.
The higher provision for impending losses that had resulted in a negative effect on the income statement in 2020 was not
repeated in 2021 due to the improved interest-rate situation. The negative effect on the income statement amounted to CHF
1 million (2020: CHF 98 million). The positive effect on unrealised gains amounted to CHF 227 million (2020: CHF 238 million).
In Luxembourg, this scenario produced a marginally negative effect on the income statement (2020: marginally negative
effect) and a positive effect of roughly CHF 22 million on the unrealised gains and losses recognised in equity (2020:
CHF 23 million). At Baloise Life (Liechtenstein) AG, the increase in provisions had a marginally negative effect on the income
statement (2020: marginally negative effect). 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 40 million (2020:
CHF 29 million). The positive effect recognised directly in equity amounted to approximately CHF 197 million (2020: CHF 195 mil-
lion).
5.5.4 Changes to assumptions
Expected future investment income is constantly adjusted in line with market circumstances. Other assumptions, such as can-
cellation rates and mortality rates, are updated on an ongoing basis.
136
Baloise Group Annual Report 2021
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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.
137
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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 41 million (2020: CHF 134 million).
Including the impact on profit for the period, equity (after shadow accounting, deferred gains / losses and deferred taxes) would
have risen by CHF 328 million (2020: CHF 241 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 30 million (2020: CHF 68 million). Including the impact on profit for the period, equity (after shadow
accounting, deferred gains / losses and deferred taxes) would have fallen by CHF 347 million (2020: CHF 293 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 (2020: + / – CHF 3.8 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.
138
Baloise Group Annual Report 2021
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, Baloise Alternative Invest S.A. SICAV-RAIF and Baloise
Private Assets S.C.S SICAF-RAIF, manage the substantial investments in alternative financial assets such as private equity, senior
secured loans and infrastructure debt.
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
2020
2021
2020
2021
23.8
17.0
0.3
3.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23.8
17.0
0.3
3.0
2020
2021
122.3
–
– 34.8
–
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.
The Swiss companies hold exposures in foreign currencies for the purposes of international diversification (risk-spreading) and
because of the greater liquidity available in certain non-Swiss financial markets. The foreign entities in the Baloise Group had not
a significant foreign currency exposure.
139
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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.
Exceptions at legal entity level require approval from the RICO. 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
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
140
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
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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
Kingdom of Spain
Pfandbriefzentrale der schweizerischen Kantonalbanken AG
Kingdom of the Netherlands
31.12.2021
4,155.1
2,923.6
1,767.8
1,681.1
1,521.0
997.0
969.3
770.6
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.
141
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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
Private debt
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
278.9
10.0
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
142
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
CREDIT RATINGS OF FINANCIAL ASSETS THAT WERE NEITHER OVERDUE NOR IMPAIRED
as at 31.12.2021
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Private debt
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
5,867.3
108.9
4,100.8
–
–
8,986.7
554.2
412.1
–
10.0
2,350.8
2,735.0
1,401.3
–
–
103.1
1,140.9
8,945.5
–
–
1,256.7
1,219.7
–
–
–
2.5
147.1
–
–
–
–
1.0
104.8
–
–
–
27.6
6.0
–
316.0
33.1
2.0
17.6
86.6
–
476.1
–
–
–
115.3
117.9
–
395.2
44.3
10.2
58.5
45.6
1,269.7
394.8
696.8
1,830.7
1,984.4
698.5
–
–
932.3
–
468.9
–
–
–
22.6
35.2
–
4.3
0.0
–
8.7
37.3
16.6
328.9
19,364.5
2,097.3
181.2
1,238.1
–
57.3
153.7
266.8
566.1
28.8
185.0
39.7
277.1
–
86.3
93.4
322.9
184.1
42.6
199.4
7,479.8
6,793.8
1,238.1
10.0
11,179.1
153.7
3,688.2
566.1
28.8
185.0
207.8
583.3
–
801.8
170.7
335.1
270.0
316.7
2,577.3
12,961.9
13,207.3
17,392.5
6,039.4
6,348.9
55,950.0
Private debt is now presented separately. It was previously shown under other financial instruments with characteristics of liabilities. The presentation of the prior-year figures has been
adjusted accordingly.
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 2021, financial assets amounting to CHF 1.7 million (2020: CHF 1.7 million) and cash and cash equivalents of 0.1 million
(2020: CHF 0.1 million) from collateral received were used.
143
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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
Private debt
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
2020
2021
–
19.6
11.6
–
–
–
– 19.6
– 11.6
–
–
–
–
–
–
–
–
10.7
6.5
–
–
–
– 10.7
– 6.5
–
–
–
–
–
–
–
125.5
– 18.5
107.0
113.7
– 23.6
90.2
–
–
–
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
–
–
–
–
–
1.2
–
–
1.1
103.7
2.4
20.0
259.2
–
–
–
–
–
– 1.2
–
–
– 1.1
– 44.8
– 1.7
– 1.8
– 91.3
–
–
–
–
–
0.0
–
–
0.0
58.9
0.7
18.1
167.9
144
Baloise Group Annual Report 2021
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
Private debt
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
145
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
FINANCIAL ASSETS OVERDUE BUT NOT IMPAIRED
as at 31.12.2021
CHF million
Financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Private debt
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
21.2
0.4
–
21.6
13.0
0.0
–
13.0
–
–
–
–
–
–
–
–
–
–
–
–
–
9.9
–
10.3
0.0
–
20.2
–
–
–
–
–
–
–
–
–
–
–
–
–
12.1
–
11.6
0.1
–
23.9
–
–
–
–
–
–
–
–
–
–
–
–
–
22.0
–
56.1
0.6
–
78.7
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.
146
Baloise Group Annual Report 2021
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 31.12.2020
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
Liquidity risk as at 31.12.2021
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
1 Based on undiscounted contractual cash flows.
2 All demand deposits are included in the first maturity band.
’ 1 year 2
1–3 years
4–5 years
> 5 years
Total Carrying amount
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 year 2
1–3 years
4–5 years
> 5 years
Total Carrying amount
3,942.6
6,369.6
1,339.3
381.9
64.4
1,137.8
694.5
2.1
327.6
–
712.6
1.2
632.0
23.5
1.7
345.3
92.1
1,147.3
4,038.5
8,189.7
4,038.5
8,189.7
1.5
13,313.3
14,654.2
14,654.2
490.4
13.4
0.0
3.4
917.6
2,502.5
2,425.7
10.9
0.2
14.2
89.8
1,770.1
735.6
89.8
1,770.1
732.2
13,930.1
1,698.9
855.7
15,495.6
31,980.3
31,900.2
44.6
788.0
832.6
1.9
940.9
942.8
0.4
16.0
16.3
12.0
9.6
21.6
58.9
1,754.5
1,813.4
–
–
–
147
Please refer to the tables in chapter 22 for the maturities of technical reserves.
Baloise Group Annual Report 2021
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)
2020
2021
2020
2021
52.9
– 71.4
38.9
– 49.2
261.0
– 265.4
302.7
– 305.8
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.
148
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.
149
Baloise Group Annual Report 2021
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
Present-value model
Interest rate, credit spread
At fair value through profit or loss
Present-value model
LIBOR / SARON, swap rates
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
Black-Scholes
option pricing model
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.
150
n. a.
Discount rate 1
2.30 %–4.20 % 3
Rental income 2
300–320 CHF million 3
Vacancy costs 1
14–20 CHF million 3
Running costs 1
26–33 CHF million 3
Maintenance costs 1
27–34 CHF million 3
Capital expenditure 2
20–50 CHF million 3
Baloise Group Annual Report 2021
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.
151
Baloise Group Annual Report 2021
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
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
11,287.5
5,557.7
1,142.1
478.5
–
–
294.4
295.7
–
–
295.7
366.8
366.8
8,410.3
8,410.3
271.4
–
16.9
–
78.5
8,410.3
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
8,042.5
755.9
132.7
–
43.2
–
13.1
–
152
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
FAIR VALUE OF ASSETS AND LIABILITIES
FOR OWN ACCOUNT AND AT OWN RISK
31.12.2021
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
Mortgages and loans
Carried at cost
Recognised at fair value through profit or loss
Derivative financial instruments
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.
Recognised at fair value through profit or loss
7.9
7.9
–
Total carrying
amount
Total fair value
Level 1
Level 2
Level 3
4,681.7
4,681.7
501.6
501.6
2,505.6
424.4
357.5
77.2
6,375.5
7,635.8
7,635.8
–
28,502.8
28,502.8
25,606.0
2,896.9
1,818.5
–
–
–
–
15,117.5
15,714.3
981.5
583.3
981.5
583.3
10,814.5
4,899.9
981.5
572.6
–
–
7.9
–
–
10.7
271.3
273.0
–
–
273.0
334.9
334.9
248.7
8,464.5
8,464.5
8,189.7
8,260.2
741.4
89.8
741.4
89.8
–
–
–
14.4
2,399.1
2,503.9
2,503.9
14.8
–
71.4
8,464.5
8,226.8
33.4
741.4
75.4
–
–
–
–
153
Baloise Group Annual Report 2021
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
–
–
–
–
–
154
Baloise Group Annual Report 2021
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
31.12.2021
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
13,988.7
13,988.7
13,625.1
–
363.7
Financial instruments with characteristics of liabilities
Recognised at fair value through profit or loss
2,075.3
2,075.3
1,728.0
216.9
130.5
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
–
318.8
–
318.8
–
0.0
–
318.8
Recognised at fair value through profit or loss
13,912.8
13,912.8
13,695.9
Derivative financial instruments
–
–
–
216.9
–
–
–
–
–
155
Baloise Group Annual Report 2021
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.
156
Baloise Group Annual Report 2021
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
2021
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
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
Available
for sale
Investment
property
Recognised at
fair value
through
profit or loss
Derivative
financial
instruments
(liabilities)
Total
1,506.4
176.3
–
8,410.3
101.6
–
– 156.0
– 238.5
–
–
–
–
21.4
288.5
– 18.0
–
2.5
– 0.4
–
239.6
11.5
– 62.1
1,818.5
8,464.5
9.6
230.2
– 13.1
–
–
–
–
–
–
–
–
13.1
–
–
–
9,903.5
277.9
–
– 394.5
–
2.5
– 0.4
–
260.9
313.1
– 80.1
10,283.0
239.8
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.
157
Baloise Group Annual Report 2021
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.
158
Baloise Group Annual Report 2021
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
2021
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
303.9
70.6
–
– 39.5
–
0.4
–
43.8
– 15.5
363.7
124.5
22.5
–
– 11.5
–
0.2
– 0.1
0.5
– 5.6
130.5
Total
428.4
93.1
–
– 51.1
–
0.6
– 0.1
44.2
– 21.0
494.1
Changes in fair value of financial instruments
held at the balance sheet date and recognised in profit or loss
43.8
0.5
44.2
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.
159
Baloise Group Annual Report 2021
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 2020.
Reclassification of assets and liabilities to and from level 3
The reclassifications of investment properties made to and from level 3 in the reporting period were attributable to the changes
of use of a property and of Baloise Park in Basel.
In 2020, the reclassification of investment property from level 3 was also due to the change of use of Baloise Park in Basel.
A property in Belgium was reclassified in 2020 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 market risk, credit risk and actuarial risk
and is determined using an expected shortfall approach that takes account of diversification effects. The actuarial capital require-
ment 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 quanti-
tative 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.
160
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
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.
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.
161
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
6. BASIS OF CONSOLIDATION
6.1 2020 financial year
6.1.1 Acquisitions and foundations
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.
6.1.2 Disposals
No companies were sold during 2020.
6.1.3 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.
6.2 2021 financial year
6.2.1 Acquisitions
Baloise Participation Holding AG was founded in Basel in the first half of 2021. The purpose of this company is to buy, sell, hold
and manage long-term equity investments in businesses, particularly in the Baloise Group’s growth areas and in new technologies.
As part of the Simply Safe strategy, FRIDAY Insurance S. A. set up a branch in France in the first half of 2021.
6.2.2 Disposals
No companies were sold during the year under review.
6.2.3 Other changes in the group of consolidated companies
The shares held by GMPVC German Media Pool GmbH in FRIDAY Insurance S. A. were repurchased in the first half of 2021;
SevenVentures GmbH now remains as the only minority shareholder, with a holding of 12.59 per cent.
162
Baloise Group Annual Report 2021
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 “Luxembourg” segment also includes the Baloise Life Liechtenstein unit.
The “Group business” segment comprises the units engaged in intercompany reinsurance and financing, Group IT, the holding
companies, the German hospital liability business, which was transferred to the Group’s run-off portfolio in 2018, and a portfolio
of variable annuities products. Legal approval for the transfer of the ’London market’ run-off portfolio was granted in 2021, which
meant that legal finality was achieved in addition to the existing economic finality that had been achieved in 2019.
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 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.
163
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
4,005.5
– 101.8
3,903.6
4,115.2
– 99.0
4,016.1
1,158.8
– 82.9
1,075.9
1,214.1
– 98.2
1,115.9
1,635.5
– 159.7
1,475.8
1,821.9
– 182.5
1,639.5
210.1
– 19.1
191.0
219.8
– 24.4
195.5
7,009.8
– 363.5
6,646.4
7,371.1
– 404.1
6,967.0
– 95.6
– 118.7
95.6
0.0
118.7
0.0
7,034.8
– 268.0
6,766.8
7,416.2
– 326.5
7,089.7
Investment income
766.0
743.9
174.6
177.4
224.6
229.6
19.4
18.1
1,184.7
1,169.0
18.4
17.2
– 26.6
– 26.7
1,176.5
1,159.5
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
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
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses
Expense
103.0
– 2.3
94.2
39.1
101.0
5,004.7
– 36.4
9.2
194.1
42.6
107.8
– 2.8
108.7
174.3
4.7
11.2
10.5
49.5
169.6
376.0
8.6
8.2
50.3
8.5
44.8
5.4
14.4
22.8
34.5
89.5
5.6
– 0.6
28.7
5,210.4
1,500.8
1,906.0
1,796.3
2,026.8
– 34.0
– 2.5
14.0
6.5
14.5
8.2
43.8
4.1
59.7
– 0.5
– 4,137.0
– 3,591.2
210.8
145.0
– 48.9
– 257.2
82.1
– 54.2
– 446.8
– 447.9
– 72.6
– 0.2
– 21.4
– 80.6
– 0.2
– 19.1
– 247.3
– 257.4
– 895.6
– 188.4
68.5
– 173.7
– 160.4
– 25.8
– 14.5
– 2.7
– 87.2
– 912.2
– 718.3
252.9
– 190.6
– 163.2
– 29.8
– 13.1
– 3.2
– 86.1
– 1,009.5
– 1,107.6
– 109.1
– 124.6
– 6,151.2
– 5,735.7
– 122.2
– 152.4
– 6,182.6
– 5,813.4
39.4
104.6
– 333.7
– 153.4
– 17.1
– 0.2
– 116.2
– 64.4
– 182.5
211.2
– 384.5
– 164.1
– 21.6
– 0.2
– 154.4
– 74.1
– 4,618.4
– 4,625.9
– 1,479.8
– 1,863.5
– 1,550.6
– 1,877.8
– 379.7
– 1,257.3
– 8,028.5
– 9,624.5
– 8,184.1
– 9,780.0
Profit / loss before borrowing costs and taxes
386.3
584.6
20.9
42.5
245.8
149.0
28.9
12.5
681.9
788.7
– 79.0
– 66.1
602.9
722.5
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
– 10.4
375.9
– 52.9
323.0
– 10.3
574.2
– 78.3
495.9
– 0.1
20.9
– 1.1
19.7
0.0
42.5
– 20.6
21.9
0.0
245.7
– 77.7
168.0
0.0
149.0
– 28.4
120.6
Segment assets as at 31.12.
47,285.8
47,902.3
13,028.7
13,069.3
15,274.2
14,745.7
13,156.8
14,482.2
88,745.6
90,199.4
2,380.2
2,552.3
– 2,761.3
– 2,772.7
88,364.5
89,979.0
164
1,269.9
8,710.4
10,413.1
8,787.0
10,502.5
156.7
168.6
– 170.1
– 181.3
– 268.6
– 297.8
– 43.3
– 240.0
240.0
– 40.3
– 248.3
248.3
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
163.8
– 41.1
122.8
– 33.3
33.0
29.5
337.7
–
–
27.1
38.7
– 8.3
– 9.3
– 7.7
– 0.2
– 47.1
– 244.6
– 403.8
– 14.2
– 80.3
8.3
– 72.0
–
–
–
–
–
–
–
–
–
90.8
15.9
– 106.6
1.4
– 1.4
16.7
0.2
26.6
196.5
240.0
–
–
–
–
–
–
–
–
–
74.7
16.8
– 91.5
1.5
– 1.5
17.4
0.3
26.8
203.8
248.3
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
Total
2021
370.5
1,534.2
130.6
4.9
213.2
–
5.3
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 24.7
697.9
– 114.6
583.3
1.4
138.6
21.1
–
37.0
408.6
7.3
–
– 39.0
24.0
– 21.5
– 61.0
– 1.9
– 0.1
– 135.4
– 35.8
– 0.1
28.8
0.0
28.8
5.6
993.1
21.3
–
36.3
9.4
–
– 70.6
36.2
– 19.6
– 70.7
– 2.0
– 0.2
– 971.2
– 34.6
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
403.8
1,501.2
143.2
4.9
224.0
49.5
5.3
– 1,228.6
582.4
– 648.9
– 845.9
– 134.0
– 13.7
– 1,147.9
– 452.2
– 0.1
12.5
4.3
16.8
– 10.6
671.3
– 10.5
778.2
– 131.8
539.5
– 122.9
655.3
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
Switzerland
Germany
Belgium
Luxembourg
Sub-total
Group business
Eliminated
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Total
2021
4,005.5
– 101.8
3,903.6
4,115.2
– 99.0
4,016.1
1,158.8
– 82.9
1,075.9
1,214.1
– 98.2
1,115.9
1,635.5
– 159.7
1,475.8
1,821.9
– 182.5
1,639.5
210.1
– 19.1
191.0
219.8
– 24.4
195.5
7,009.8
– 363.5
6,646.4
7,371.1
– 404.1
6,967.0
120.5
– 0.1
120.4
163.8
– 41.1
122.8
– 95.6
– 118.7
95.6
0.0
118.7
0.0
7,034.8
– 268.0
6,766.8
7,416.2
– 326.5
7,089.7
Investment income
766.0
743.9
174.6
177.4
224.6
229.6
19.4
18.1
1,184.7
1,169.0
18.4
17.2
– 26.6
– 26.7
1,176.5
1,159.5
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
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses
Expense
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Operating and administrative expenses
– 446.8
– 447.9
5,210.4
1,500.8
1,906.0
1,796.3
2,026.8
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
194.1
42.6
107.8
– 2.8
108.7
– 34.0
– 2.5
– 257.2
82.1
– 54.2
– 80.6
– 0.2
– 19.1
– 10.3
574.2
– 78.3
495.9
– 247.3
– 257.4
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
169.6
376.0
8.6
8.2
50.3
14.5
8.2
– 912.2
– 718.3
252.9
– 190.6
– 163.2
– 29.8
– 13.1
– 3.2
– 86.1
0.0
42.5
– 20.6
21.9
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
34.5
89.5
5.6
– 0.6
28.7
59.7
– 0.5
– 182.5
211.2
– 384.5
– 164.1
– 21.6
– 0.2
– 154.4
– 74.1
0.0
149.0
– 28.4
120.6
– 4,137.0
– 3,591.2
– 1,009.5
– 1,107.6
– 109.1
– 124.6
– 6,151.2
– 5,735.7
– 122.2
– 152.4
– 4,618.4
– 4,625.9
– 1,479.8
– 1,863.5
– 1,550.6
– 1,877.8
– 379.7
– 1,257.3
– 8,028.5
– 9,624.5
– 39.0
24.0
– 21.5
– 61.0
– 1.9
– 0.1
– 135.4
– 35.8
– 70.6
36.2
– 19.6
– 70.7
– 2.0
– 0.2
– 971.2
– 34.6
22.8
342.1
– 577.7
– 821.5
– 117.4
– 15.0
– 275.8
– 434.7
– 1,228.6
582.4
– 648.9
– 845.9
– 134.0
– 13.7
– 1,147.9
– 452.2
– 5.5
0.9
– 5.0
– 8.6
– 6.8
– 0.3
– 10.4
– 237.8
– 395.7
27.1
38.7
– 8.3
– 9.3
– 7.7
– 0.2
– 47.1
– 244.6
– 403.8
Profit / loss before borrowing costs and taxes
386.3
584.6
20.9
42.5
245.8
149.0
28.9
12.5
681.9
788.7
– 79.0
– 66.1
– 0.1
28.8
0.0
28.8
– 0.1
12.5
4.3
16.8
– 10.6
671.3
– 10.5
778.2
– 131.8
539.5
– 122.9
655.3
– 23.7
– 102.7
– 8.5
– 111.3
– 14.2
– 80.3
8.3
– 72.0
1.4
138.6
21.1
–
37.0
408.6
7.3
–
5.6
993.1
21.3
–
36.3
287.2
185.8
132.0
64.1
210.3
403.8
1,501.2
143.2
4.9
224.0
1,269.9
8,710.4
10,413.1
1.1
– 6.3
156.7
–
26.4
316.6
–
29.5
337.7
9.4
–
28.6
19.8
49.5
5.3
– 268.6
– 297.8
–
–
– 33.3
33.0
–
–
–
–
168.6
– 170.1
– 181.3
288.3
179.5
118.5
64.1
193.4
370.5
1,534.2
130.6
4.9
213.2
8,787.0
10,502.5
–
19.8
–
5.3
– 6,182.6
– 5,813.4
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 8,184.1
– 9,780.0
602.9
722.5
– 34.3
568.6
– 140.3
428.3
– 24.7
697.9
– 114.6
583.3
–
– 43.3
– 240.0
240.0
–
90.8
15.9
– 106.6
1.4
– 1.4
16.7
0.2
26.6
196.5
240.0
–
–
–
–
–
–
– 40.3
– 248.3
248.3
–
74.7
16.8
– 91.5
1.5
– 1.5
17.4
0.3
26.8
203.8
248.3
–
–
–
–
–
Segment assets as at 31.12.
47,285.8
47,902.3
13,028.7
13,069.3
15,274.2
14,745.7
13,156.8
14,482.2
88,745.6
90,199.4
2,380.2
2,552.3
– 2,761.3
– 2,772.7
88,364.5
89,979.0
165
Baloise Group Annual Report 2021
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
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses
Expense
2020
3,743.4
– 230.0
3,513.5
Non-Life
2021
4,026.5
– 279.1
3,747.4
2020
3,291.3
– 38.1
3,253.3
Life
2021
3,389.7
– 47.4
3,342.3
158.5
151.9
942.6
936.1
82.0
16.7
15.5
– 25.6
– 26.1
1,176.5
1,159.5
25.2
–
43.2
38.9
26.8
3,806.0
– 41.2
4.9
32.6
–
48.2
– 1.3
47.5
4,026.4
– 48.6
– 1.2
274.0
185.1
26.7
20.9
176.3
4,878.8
– 55.3
10.6
– 2,338.3
– 2,541.8
– 3,844.3
1.0
205.0
– 545.9
– 547.6
– 29.4
– 0.5
– 16.4
– 227.8
498.0
– 622.1
– 564.6
– 32.4
– 0.3
– 16.8
– 231.8
– 3,503.8
– 214.6
– 3,722.6
32.2
31.4
– 35.4
– 284.0
– 102.0
– 14.6
– 234.7
– 145.3
– 4,596.7
372.5
1,501.4
22.7
1.4
179.7
6,356.1
– 39.8
1.4
– 3,271.6
– 956.8
31.6
– 33.6
– 292.0
– 111.5
– 13.2
– 1,128.6
– 173.6
– 5,949.4
Profit / loss before borrowing costs and taxes
302.2
303.9
282.2
406.7
– 61.0
– 70.5
602.9
722.5
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
– 0.3
301.9
– 63.2
238.7
– 0.3
303.6
– 32.9
270.7
– 10.3
271.9
– 67.6
204.3
– 10.2
396.5
– 74.4
322.1
166
Asset Management & Banking
Other activities
Eliminated
2020
2021
2020
2021
2020
2021
2020
– 271.1
– 287.9
– 43.0
– 339.8
339.8
– 46.1
– 360.0
360.0
8,787.0
10,502.5
84.3
7.0
–
152.5
15.1
259.0
– 86.3
–
–
–
–
–
–
–
–
–
–
–
– 24.4
– 98.5
– 179.5
79.4
0.0
79.4
– 11.7
67.8
– 16.6
–
166.3
– 0.3
17.6
249.1
– 87.3
–
–
–
–
–
–
–
–
–
–
– 2.7
– 99.8
– 166.6
82.5
0.0
82.4
– 12.0
70.4
– 17.9
– 5.6
167.2
4.3
18.2
182.9
– 157.0
4.3
–
–
–
–
–
–
–
–
–
– 18.0
32.7
181.2
5.1
14.4
231.0
– 184.3
5.1
–
–
–
–
–
–
–
–
–
– 23.7
– 84.6
2.2
– 82.4
– 14.1
– 84.6
4.7
– 79.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 56.6
– 64.1
– 0.2
– 0.1
80.7
83.7
– 9.8
– 233.9
– 243.9
– 46.2
– 255.2
– 301.5
25.7
233.4
339.8
26.1
250.3
360.0
Total
2021
7,416.2
– 326.5
7,089.7
370.5
1,534.2
130.6
4.9
213.2
–
5.3
– 5,813.4
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 9,780.0
– 24.7
697.9
– 114.6
583.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,034.8
– 268.0
6,766.8
288.3
179.5
118.5
64.1
193.4
–
19.8
– 6,182.6
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 8,184.1
– 34.3
568.6
– 140.3
428.3
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
Interest expenses on insurance liabilities
Gains or losses on financial contracts
Other operating expenses
Expense
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Operating and administrative expenses for insurance business
158.5
151.9
942.6
936.1
Non-Life
2021
4,026.5
– 279.1
3,747.4
32.6
–
48.2
– 1.3
47.5
4,026.4
– 48.6
– 1.2
– 227.8
498.0
– 622.1
– 564.6
– 32.4
– 0.3
– 16.8
– 0.3
303.6
– 32.9
270.7
Life
2021
3,389.7
– 47.4
3,342.3
372.5
1,501.4
22.7
1.4
179.7
6,356.1
– 39.8
1.4
– 3,271.6
– 956.8
31.6
– 33.6
– 292.0
– 111.5
– 13.2
– 1,128.6
– 173.6
– 5,949.4
– 10.2
396.5
– 74.4
322.1
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
– 2,338.3
– 2,541.8
– 3,844.3
– 231.8
– 3,503.8
– 214.6
– 3,722.6
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
Profit / loss before borrowing costs and taxes
302.2
303.9
282.2
406.7
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
2020
2020
2020
2021
2020
2021
2020
2021
2020
Asset Management & Banking
Other activities
Eliminated
–
–
–
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
Total
2021
7,416.2
– 326.5
7,089.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,034.8
– 268.0
6,766.8
82.0
16.7
15.5
– 25.6
– 26.1
1,176.5
1,159.5
– 16.6
–
166.3
– 0.3
17.6
249.1
– 87.3
–
–
–
–
–
–
– 64.1
–
– 2.7
– 99.8
– 166.6
82.5
0.0
82.4
– 12.0
70.4
– 17.9
– 5.6
167.2
4.3
18.2
182.9
– 157.0
4.3
–
–
–
–
–
– 0.2
–
– 9.8
– 233.9
– 243.9
– 18.0
32.7
181.2
5.1
14.4
231.0
– 184.3
5.1
–
–
–
–
–
– 0.1
–
– 46.2
– 255.2
– 301.5
– 61.0
– 70.5
– 23.7
– 84.6
2.2
– 82.4
– 14.1
– 84.6
4.7
– 79.9
–
–
– 271.1
–
– 43.0
– 339.8
339.8
–
–
–
–
–
–
80.7
–
25.7
233.4
339.8
–
–
–
–
–
–
–
– 287.9
–
– 46.1
– 360.0
360.0
–
–
–
–
–
–
83.7
–
26.1
250.3
360.0
–
–
–
–
–
288.3
179.5
118.5
64.1
193.4
370.5
1,534.2
130.6
4.9
213.2
8,787.0
10,502.5
–
19.8
–
5.3
– 6,182.6
33.1
236.4
– 581.3
– 831.6
– 107.4
– 15.2
– 259.5
– 476.1
– 8,184.1
– 5,813.4
– 1,184.7
529.6
– 655.6
– 856.7
– 124.4
– 13.6
– 1,168.3
– 493.0
– 9,780.0
602.9
722.5
– 34.3
568.6
– 140.3
428.3
– 24.7
697.9
– 114.6
583.3
167
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
Notes to the consolidated balance sheet
8. PROPERTY, PLANT AND EQUIPMENT
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.
In 2020, 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.
168
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
2021
CHF million
Land
Buildings
Operating
equipment
Machinery,
furniture
and vehicles
Hardware
Right-of-use
assets
Balance as at 1 January
65.4
270.7
Additions
Additions arising from change
in the scope of consolidation
Disposals
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
–
–
– 0.3
–
– 2.1
–
–
–
–
– 0.5
62.6
63.6
– 0.9
62.6
Depreciation and impairment form part of other operating expenses.
3.7
–
– 6.5
–
0.0
–
48.0
3.0
–
– 0.2
–
– 0.1
–
20.9
3.3
–
22.7
3.9
–
38.5
2.0
–
– 0.6
0.0
– 0.9
–
–
–
–
–
–
–
–
–
Total
466.2
16.0
–
– 8.5
–
– 2.1
–
– 9.2
– 8.1
– 4.9
– 11.0
– 12.8
– 46.0
–
–
– 4.5
254.2
530.9
– 276.7
254.2
–
–
– 0.2
42.4
114.0
– 71.6
42.4
–
–
– 0.3
18.5
66.4
– 48.0
18.5
–
–
– 0.2
15.5
80.5
– 65.1
15.5
–
–
– 0.6
26.3
70.9
– 44.7
26.3
–
–
– 6.1
419.5
926.4
– 506.9
419.5
In 2021, the reclassifications made from and to owner-occupied properties (land, buildings and operating equipment) were
attributable to the changes of use of a property and of Baloise Park in Basel.
169
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
9.
INTANGIBLE ASSETS
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
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
–
–
–
–
–
–
–
– 0.8
–
–
–
–
–
0.0
3.7
–
–
3.7
–
3.7
–
–
–
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.
170
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
2021
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 2021
Switzerland
Germany
Belgium
Luxembourg
Group business
Total for geographic regions
Present value
of gains on
insurance
contracts
acquired
Goodwill
Deferred
acquisition
cost
(life)
Deferred
acquisition
cost
(non-life)
Software and
other
intangible
assets
Total
103.1
3.7
689.3
167.6
191.7
1,155.4
–
–
–
–
–
–
–
–
–
–
–
–
–
– 3.2
99.9
265.0
– 165.1
–
–
–
–
–
–
–
– 0.8
–
–
–
–
–
– 0.1
2.8
–
–
–
–
–
–
130.9
358.9
–
–
–
–
– 33.5
1.7
–
–
–
– 6.5
– 27.9
754.0
–
–
–
–
–
–
– 358.8
–
–
–
– 4.6
–
– 5.3
157.8
–
–
–
35.4
–
– 0.8
–
–
–
– 52.1
–
– 3.1
–
–
–
– 5.2
165.9
695.5
– 529.6
–
35.4
489.8
– 0.8
–
–
–
– 445.2
1.7
– 3.1
–
– 4.6
– 6.5
– 41.8
1,180.4
–
–
99.9
2.8
754.0
157.8
165.9
1,180.4
25.6
15.1
37.2
22.0
0.0
99.9
–
2.8
–
–
–
101.4
649.0
1.2
2.3
–
33.7
33.3
86.3
4.6
–
37.6
0.8
74.9
8.0
44.6
198.4
700.9
199.6
36.9
44.6
2.8
754.0
157.8
165.9
1,180.4
1 With the possible exception of goodwill, the Baloise Group has no intangible assets with indefinite useful lives.
171
Baloise Group Annual Report 2021
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
2020
25.6
13.7
6.8
15.6
37.6
2021
25.6
13.1
6.5
14.9
36.1
2020
2021
2020
2021
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 2021 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 2021 or in 2020, to the carrying amount of an entity being significantly higher than its recoverable value.
172
Baloise Group Annual Report 2021
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
2020
2021
8,120.1
304.7
–
8,410.3
101.6
–
– 70.4
– 238.5
–
– 111.2
–
171.0
– 4.0
–
2.1
–
251.1
– 62.1
8,410.3
8,464.5
74.7
–
78.9
–
The increase in the balance over the course of 2021 was largely attributable to additions of real estate and to disposals resulting
from the transfer of investment properties to the Swiss Property Fund at Baloise Life Ltd and Baloise Insurance Ltd. The reclassi-
fications made to and from investment properties were attributable to the changes of use of a property and of Baloise Park in
Basel.
In 2020, 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
31.12.2020
31.12.2021
3,983.6
502.4
4,681.7
501.6
6,974.8
6,375.5
28,110.2
28,502.8
7.3
7.9
39,578.4
40,069.5
14,040.3
53,618.6
16,064.0
56,133.5
1 Of which financial assets totalling CHF 114.8 million (2020: CHF 100.4 million) involved insurance policies that had not been fully reviewed by the balance sheet date.
173
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
–
–
–
–
–
–
6,974.8
6,375.5
–
–
–
–
–
–
6,974.8
6,375.5
28,110.2
28,502.8
35,092.4
34,886.3
2,141.1
1,842.5
3,983.6
26,173.6
172.4
1,764.2
–
2,505.6
2,176.1
4,681.7
25,350.4
255.5
2,896.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
450.3
52.2
502.4
0.1
7.2
–
–
7.3
424.4
77.2
501.6
7.9
–
–
–
7.9
2,591.3
1,894.7
4,486.0
33,148.5
179.6
1,764.2
–
2,930.0
2,253.3
5,183.3
31,726.0
263.4
2,896.9
–
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.
174
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
–
–
–
–
–
–
–
–
–
–
–
–
6,974.8
6,375.5
2,141.1
1,842.5
3,983.6
26,173.6
172.4
1,764.2
–
2,505.6
2,176.1
4,681.7
25,350.4
255.5
2,896.9
–
6,974.8
6,375.5
28,110.2
28,502.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
450.3
52.2
502.4
0.1
7.2
–
–
7.3
424.4
77.2
501.6
–
7.9
–
–
7.9
2,591.3
1,894.7
4,486.0
33,148.5
179.6
1,764.2
–
2,930.0
2,253.3
5,183.3
31,726.0
263.4
2,896.9
–
35,092.4
34,886.3
175
Baloise Group Annual Report 2021
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
Private debt
Other
Held to maturity
Available for sale
Trading portfolio
Designated
Recognised at fair value
through profit or loss
Total
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,228.8
5,750.3
13,509.4
13,614.3
–
736.0
–
10.0
–
615.3
–
10.0
Financial assets of a debt nature
6,974.8
6,375.5
28,110.2
28,502.8
7.9
35,092.4
34,886.3
Total
6,974.8
6,375.5
32,093.8
33,184.5
509.7
509.5
39,578.4
40,069.5
Secured financial assets of a debt nature
Public corporations
Industrial enterprises
Financial institutions
Private debt
Other
Total
10.8
–
693.5
–
–
10.4
–
588.7
–
–
704.3
599.1
5,854.0
6,532.8
6,558.3
7,131.9
Private debt is now presented separately. It was previously shown under other financial instruments with characteristics of liabilities. The presentation of the prior-year figures has been
adjusted accordingly.
In 2020, 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 Investment Management).
Secured financial instruments with characteristics of liabilities are fixed-income securities for which a mortgage or a government
bond has been securitised as collateral.
176
1,952.7
2,272.9
1,952.7
2,272.9
52.7
234.9
140.6
691.3
906.7
4.7
3,983.6
7,833.2
6,488.7
278.9
–
132.5
1,541.5
3,901.1
278.9
–
105.6
214.6
141.6
710.1
1,236.7
0.2
4,681.7
7,479.8
6,170.6
1,238.1
–
89.8
1,605.4
3,599.5
1,238.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
502.4
501.6
4,486.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
33.9
436.9
18.2
13.5
–
–
0.1
7.2
–
–
–
7.3
–
–
–
–
–
–
–
47.0
441.7
9.8
3.1
7.9
–
–
–
–
–
–
–
–
–
–
–
–
86.6
671.8
158.8
704.7
906.7
4.7
19,738.2
7,833.2
7,232.0
278.9
10.0
152.6
656.3
151.4
713.1
1,236.7
0.2
5,183.3
19,364.5
7,479.8
6,793.8
1,238.1
10.0
143.3
1,541.5
4,594.6
278.9
–
100.2
1,605.4
4,188.2
1,238.1
–
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
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
Public corporations
Industrial enterprises
Financial institutions
Private debt
Other
Total
Public corporations
Industrial enterprises
Financial institutions
Private debt
Other
Total
adjusted accordingly.
Financial assets of an equity nature
Financial assets of a debt nature
Secured financial assets of a debt nature
1,952.7
2,272.9
52.7
234.9
140.6
691.3
906.7
4.7
3,983.6
105.6
214.6
141.6
710.1
1,236.7
0.2
4,681.7
6,228.8
5,750.3
13,509.4
13,614.3
7,833.2
6,488.7
278.9
–
7,479.8
6,170.6
1,238.1
–
28,110.2
28,502.8
6,974.8
6,375.5
32,093.8
33,184.5
132.5
1,541.5
3,901.1
278.9
–
89.8
1,605.4
3,599.5
1,238.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
736.0
615.3
10.0
6,974.8
10.0
6,375.5
10.8
10.4
693.5
588.7
–
–
–
–
–
–
–
–
–
–
–
–
–
Private debt is now presented separately. It was previously shown under other financial instruments with characteristics of liabilities. The presentation of the prior-year figures has been
704.3
599.1
5,854.0
6,532.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
In 2020, 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 Investment Management).
bond has been securitised as collateral.
Secured financial instruments with characteristics of liabilities are fixed-income securities for which a mortgage or a government
FAIR VALUE OF FINANCIAL ASSETS CLASSIFIED AS HELD TO MATURIT Y
as at 31.12.
CHF million
Public corporations
Industrial enterprises
Financial institutions
Private debt
Other
Total
502.4
501.6
4,486.0
–
33.9
436.9
18.2
13.5
–
–
–
47.0
441.7
9.8
3.1
–
–
0.1
–
7.2
–
–
7.3
–
–
7.9
–
–
7.9
1,952.7
2,272.9
86.6
671.8
158.8
704.7
906.7
4.7
19,738.2
7,833.2
7,232.0
278.9
10.0
152.6
656.3
151.4
713.1
1,236.7
0.2
5,183.3
19,364.5
7,479.8
6,793.8
1,238.1
10.0
35,092.4
34,886.3
509.7
509.5
39,578.4
40,069.5
–
–
–
–
–
–
–
–
–
–
–
–
143.3
1,541.5
4,594.6
278.9
–
100.2
1,605.4
4,188.2
1,238.1
–
6,558.3
7,131.9
Carrying amount
Fair value
2020
2021
2020
2021
6,228.8
5,750.3
7,904.4
6,957.6
–
736.0
–
10.0
–
615.3
–
10.0
–
814.6
–
10.6
–
667.9
–
10.3
6,974.8
6,375.5
8,729.6
7,635.8
177
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
2020
2021
10,127.1
10,311.5
– 18.5
– 23.6
10,108.6
10,287.9
10,562.5
10,629.5
147.5
4,024.8
153.6
3,688.2
615.8
29.1
725.0
566.1
28.8
185.0
–
–
–
0.0
–
–
–
–
–
–
147.5
4,024.8
153.6
3,688.2
160.3
4,522.6
156.9
3,934.9
615.8
29.1
725.0
566.1
28.8
185.0
615.9
29.7
725.0
566.1
29.2
185.0
223.4
209.0
15,892.5
15,142.2
– 1.2
– 19.7
– 1.2
– 24.7
222.1
207.8
229.2
212.8
15,872.8
15,117.5
16,845.2
15,714.3
1,142.0
0.1
1,142.1
981.4
0.1
981.5
–
–
–
–
–
–
1,142.0
0.1
1,142.1
981.4
0.1
981.5
1,142.0
0.1
1,142.1
981.4
0.1
981.5
Mortgages and loans
17,034.6
16,123.7
– 19.7
– 24.7
17,014.9
16,098.9
17,987.3
16,695.8
178
Baloise Group Annual Report 2021
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
2020
2021
– 27.0
– 19.7
9.6
1.8
– 4.2
–
–
–
0.1
– 19.7
0.1
1.0
– 6.1
–
–
–
0.0
– 24.7
Fair value assets
Fair value liabilities
2020
2021
2020
2021
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
493.2
595.9
583.3
318.8
152.6
–
Derivative financial instruments as reported on the balance sheet
1,089.1
902.1
152.6
89.8
–
89.8
179
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
2020
2021
0.4
–
1,378.7
1,244.2
–
3.4
–
–
–
3.9
–
–
–
18.7
–
–
16.2
–
392.0
390.3
–
–
–
–
0.4
28.8
–
69.1
–
–
–
17.3
–
47.3
–
–
1,382.5
1,248.1
410.7
406.4
98.2
64.6
–
1,654.0
130.3
–
–
1,942.2
161.6
–
1,784.2
2,103.8
6,986.4
7,683.4
–
1,335.4
–
–
–
–
–
–
–
24.6
8.6
–
33.2
46.9
–
2.3
–
–
–
25.3
10.7
–
36.0
140.9
–
–
–
–
–
14.1
6.8
–
20.9
31.0
–
2.5
–
–
8,321.7
7,683.4
49.3
140.9
33.5
11,488.4
11,035.3
493.2
583.3
152.6
–
–
–
–
–
–
–
–
1,343.5
1,637.3
23.8
17.0
–
–
0.3
–
–
14.4
–
14.4
10.9
–
–
–
–
10.9
89.8
–
–
3.0
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.
180
Gross amount
Impairment
Carrying amount
Fair value
2020
2021
2020
2021
2020
2021
2020
2021
368.4
336.7
295.6
664.0
273.0
609.7
– 1.6
– 1.2
– 2.8
– 1.8
366.8
334.9
366.8
334.9
– 1.7
– 3.5
294.4
661.2
271.3
606.2
295.7
662.6
273.0
607.9
Baloise Group Annual Report 2021
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
2020
2021
– 2.7
0.2
2.6
– 2.9
–
–
0.0
– 2.8
– 2.8
– 0.3
1.4
– 1.9
–
–
0.0
– 3.5
2020
2021
577.1
– 5.1
– 176.2
219.9
65.4
–
–
– 3.3
677.7
677.7
– 7.3
– 331.9
515.4
–
–
–
– 30.0
823.9
181
Baloise Group Annual Report 2021
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
2020
2021
11.9
1.9
– 0.1
–
–
0.0
13.7
39.3
314.3
13.7
1.2
– 0.2
–
–
– 0.6
14.1
105.2
355.8
– 250.0
– 302.0
1.7
–
0.0
105.2
0.0
–
0.0
– 1.1
–
–
0.0
– 1.1
–
–
– 1.1
157.8
– 1.1
– 0.1
0.0
–
–
–
0.0
– 1.1
Receivables from reinsurers as at 31 December
117.8
170.7
182
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
7.7
5.9
–
–
–
–
–
–
–
–
82.1
–
1,221.8
27.9
8.4
7.7
5.9
1,340.2
76.9
–
815.6
27.7
5.8
926.1
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.
183
Baloise Group Annual Report 2021
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 1
Benefits paid1
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
2020
2021
2,711.7
2,764.2
10.3
52.9
37.7
0.1
66.5
42.0
7.0
145.5
42.1
– 2.4
64.5
42.0
– 173.3
– 163.7
–
16.4
–
–
–
–
–
–
2,764.2
2,899.1
1 The more detailed presentation of post-employment benefits – defined benefit plans resulted in a small shift in the prior-year figures between the employee contribution and the benefits paid.
17.2.2 Partially funded liabilities under defined benefit plans
CHF million
Balance as at 1 January
Current service cost 1
Interest rate effect
Employee contribution 1
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 1
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
1 The employee contribution is now shown separately. The presentation of the prior-year figures has been adjusted accordingly.
184
2020
2021
– 3,046.7
– 3,080.4
– 58.3
– 11.6
– 42.0
– 37.7
– 56.1
–
13.9
0.0
1.2
173.3
– 16.4
–
–
– 56.8
– 7.4
– 42.0
– 40.4
40.0
110.8
– 21.2
2.8
–
163.7
–
–
–
– 3,080.4
– 2,931.1
Baloise Group Annual Report 2021
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 1
Interest rate effect
Employee contribution 1
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
1 The employee contribution is now shown separately. The presentation of the prior-year figures has been adjusted accordingly.
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
2020
2021
– 848.6
– 14.9
– 7.0
– 0.8
–
– 70.3
–
0.9
1.8
–
33.3
–
–
–
– 905.5
– 16.7
– 3.0
– 0.9
– 0.4
72.2
0.9
2.8
32.2
– 0.6
35.3
–
–
–
– 905.5
– 783.6
31.12.2020
31.12.2021
2,764.2
2,899.1
– 3,080.4
– 2,931.1
– 905.5
– 783.6
–
–
– 1,221.8
– 815.6
185
Baloise Group Annual Report 2021
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
Net interest cost
Unrecognised past service cost
Gains and losses on plan settlements
Expected return on reimbursement rights
31.12.2020
31.12.2021
37.6
594.1
41.4
626.5
1,457.5
97.0
1,562.3
103.5
104.6
7.8
390.6
–
1.5
73.5
122.2
4.6
389.5
–
– 0.2
49.4
2,764.2
2,899.1
31.5
–
29.8
–
2020
2021
– 73.2
– 8.3
1.2
–
–
– 73.5
– 3.5
– 0.6
–
–
Total expenses for defined benefit plans recognised in the income statement
– 80.3
– 77.6
The current service cost is now shown on a net basis. The presentation of the prior-year figures has been adjusted accordingly.
186
Baloise Group Annual Report 2021
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
2020
2021
0.3
1.4
0.3
70.5
24.5
22.1
0.5
1.3
0.3
70.3
24.3
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
31.12.2020
31.12.2021
3,985.9
3,714.7
– 287.7
– 254.8
325.6
32.8
– 30.6
224.2
– 51.9
– 100.3
112.5
22.1
289.2
24.7
– 25.4
198.0
– 42.7
– 79.8
90.3
18.2
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.
187
Baloise Group Annual Report 2021
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 2022 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 9.8 years; the average present value
factor for current benefit entitlements under pension commitments is 15.4 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 2021 totalled
CHF 27.7 million (2020: CHF 27.9 million). There were no disposals of plan assets for long-term employee benefits. Benefits paid
out amounted to CHF 3.2 million (2020: CHF 3.1 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 2021, a sum of CHF 25.7 million (2020: CHF 34.6 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.
188
Baloise Group Annual Report 2021
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
2020
2021
209,951
214,804
31 Aug 2023
31 Aug 2024
71.70
15.1
29.5
3,372
2,370
88.6
73.00
15.7
31.4
3,373
2,427
88.5
2020
25,000
2021
18,363
28 Feb 2023
29 Feb 2024
158.40
143.46
4.0
3.9
1,012
118
14 %
2.6
2.9
1,048
114
12 %
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
2020
5,156
2021
6,134
31 May 2023
31 May 2024
122.94
133.47
0.6
0.7
10
0.8
0.9
11
1 The shares granted to the retired 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
31 May 2025 and 31 May 2026 respectively.
189
Baloise Group Annual Report 2021
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
2020
80,187
2021
75,022
28 Feb 2023
29 Feb 2024
156.46
139.73
12.5
12.4
989
116
6 %
10.5
11.9
1,026
136
7 %
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
2017
2018
2019
2020
2021
PSUs granted
PSUs converted
Change in value
Date
Price (CHF)1
Date
Multiplier
Price (CHF) 1
Value (CHF) 2
1 Mar 2017
1 Mar 2018
1 Mar 2019
1 Mar 2020
1 Mar 2021
130.70
149.20
163.00
154.90
158.90
1 Mar 2020
1 Mar 2021
1 Mar 2022
1 Mar 2023
1 Mar 2024
1.34
1.22
0.72 4
0.61 4
0.00 4
154.90
158.90
149.10 4
149.10 4
149.10 4
207.57
193.86
107.68 4
91.12 4
0.00 4
3
59 %
30 %
– 34 % 4
– 41 % 4
– 100 % 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 2017: ([{1.34*154.90} – 130.70] / 130.70) * 100 = 59 %.
4 Interim measurement as at 31 December 2021.
190
Baloise Group Annual Report 2021
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 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
Of which: expired (departures in 2021)
Number of active PSUs as at 31 December 2021
Value of allocated PSUs on issue date (CHF million)
PSU expense incurred by the Baloise Group for 2019 (CHF million)
PSU expense incurred by the Baloise Group for 2020 (CHF million)
PSU expense incurred by the Baloise Group for 2021 (CHF million)
Plan 2019
Plan 2020
Plan 2021
67
32,711
– 252
32,459
– 925
31,534
– 291
31,243
5.5
1.4
1.8
1.6
71
68
32,321
28,045
–
–
– 407
31,914
– 356
31,558
5.1
–
1.3
1.5
–
–
–
–
– 504
27,541
4.9
–
–
1.1
191
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
17.4.5 Employee Stock Option Program
FRIDAY Insurance S.A., a subsidiary of Bâloise Luxembourg Holding S.A., offers selected employees an Employee Stock Option
Programme (ESOP) that was launched in 2021. It replaced the existing Phantom Stock Option Programme (PSOP), which was
dissolved ahead of its scheduled termination date. The equity instruments allocated become vested over a period of five years
from the allocation date. Allocations can be made each quarter. The fair value of the granted ESOPs is determined using a Black-
Scholes model and recognised in profit or loss during the vesting period. The vested options will be exercised either when an exit
event takes place or, at the latest, when the maturity event takes place after seven years.
The shares under the dissolved PSOP were calculated and valued pro rata as at 31 December 2020. The resulting amount will
be paid out in three tranches by mid-2023, of which CHF 0.5 million was paid in 2021 (2020: CHF 6.1 million). Due to the early
dissolution of the plan, the total expense for employee services received was recognised in 2020.
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 / income (CHF million)
EMPLOYEE STOCK OPTION PROGRAM
Participating employees
Number of allocated options
Of which: expired (departures in 2021)
Number of active options as at 31 December 2021
ESOP expense (CHF million)
2020
36
3.5
3.5
9.0
2021
18
2.6
2.6
– 0.3
2021
61
2,715,434
416,260
2,299,174
0.5
192
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
18. DEFERRED TAXES
18.1 Deferred tax assets and liabilities
DEFERRED TA X ASSETS
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
2021
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
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassifica-
tion
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
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassifica-
tion
in accordance
with IFRS 5
Exchange
differences
Balance
as at
31 December
29.7
48.0
110.2
62.4
13.2
434.4
1,009.3
247.3
49.5
57.6
2,061.6
24.3
– 8.6
–
23.1
– 3.8
74.1
21.5
50.3
– 3.4
– 5.7
171.8
–
–
– 57.9
–
–
–
–
–
–
–
– 57.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 2.2
0.0
– 1.9
– 2.4
0.0
– 14.6
– 42.3
– 8.2
– 1.7
– 1.1
51.8
39.4
50.5
83.2
9.4
493.9
988.4
289.3
44.4
50.9
– 74.4
2,101.1
193
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
DEFERRED TA X LIABILITIES
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
2021
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
Reclassifi-
cation
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
Balance
as at
1 January
Change
recognised in
profit or loss
Change
recognised
directly in
equity
Change in the
scope of
consolidation
Reclassifi-
cation
IFRS 5
Exchange
differences
Balance
as at
31 December
10.4
5.6
263.6
76.1
356.2
21.1
45.4
381.4
2.0
1,765.1
47.3
– 2.2
– 0.7
25.1
– 10.6
111.5
9.9
– 10.4
–
– 0.8
77.1
14.6
–
–
–
–
–
–
–
– 74.0
–
–
–
2,974.1
213.5
– 74.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 0.2
– 0.2
– 10.6
– 0.6
– 7.4
– 0.7
– 0.7
– 5.9
0.0
– 57.7
– 0.3
– 84.2
8.0
4.7
278.1
64.9
460.4
30.2
34.3
301.5
1.1
1,784.6
61.6
3,029.5
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.
194
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
The Baloise Group had recognised deferred tax assets on tax loss carryforwards totalling CHF 287.8 million as at 31 December 2021
(2020: CHF 219.5 million) that will expire after five years or more.
The Baloise Group had a tax credit of CHF 112.3 million as at 31 December 2021 (2020: 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 355.2 million as at 31 December 2021
(2020: CHF 302.3 million) because the relevant offsetting criteria had not been met. Of this total, CHF 1.1 million will expire after
one year, CHF 26.2 million after two to four years and CHF 327.9 million will expire after five years or more.
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
31.12.2020
31.12.2021
2,061.6
2,101.1
– 2,974.1
– 3,029.5
– 912.6
87.9
– 928.3
73.7
– 1,000.4
– 1,002.0
31.12.2020
31.12.2021
47.6
30.9
57.9
52.4
45.1
– 7.6
226.3
45.7
39.4
55.3
19.3
36.1
– 2.2
193.5
195
Baloise Group Annual Report 2021
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 2021, it was announced that investment properties held by Baloise Life Ltd and Basler Insurance Ltd would
be transferred to the Baloise Swiss Property Fund (BSPF). The transfer was executed in September 2021.
21. SHARE CAPITAL
2020
Balance as at 1 January
Purchase / sale of treasury shares
Capital increases
Share buy-back and cancellation
Balance as at 31 December
2021
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)
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
Number of
treasury shares
Number of
shares in
circulation
Number of
shares issued
Share capital
(CHF million)
3,750,453
45,049,547
48,800,000
– 101,723
101,723
–
– 3,000,000
–
–
–
–
– 3,000,000
648,730
45,151,270
45,800,000
4.9
–
–
– 0.3
4.6
The reduction of share capital, which was approved by the shareholders of Bâloise Holding Ltd at the Annual General Meeting on
30 April 2021, was completed in July 2021 by cancelling 3,000,000 registered treasury shares, each with a nominal value of
CHF 0.10. The new share capital of Bâloise Holding Ltd totals CHF 4.6 million and is divided into 45,800,000 registered, fully
paid-up registered shares with a par value of CHF 0.10 each (2020: 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 30 April 2021 voted in favour of a total dividend distribution of CHF 312.3 million
for the 2020 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 288.4 million.
For the 2021 financial year, a total dividend distribution of CHF 320.6 million will be proposed for approval at the Annual General
Meeting on 29 April 2022. This amounts to a gross dividend of CHF 7.00 per share. The dividend distribution will be recognised
upon approval at the Annual General Meeting.
196
Baloise Group Annual Report 2021
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)
31.12.2020
31.12.2021
845.5
5,895.6
93.2
854.1
5,942.0
78.0
6,834.3
6,874.0
38,026.9
38,153.3
3,723.8
3,634.1
41,750.7
41,787.4
48,585.0
48,661.4
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
31.12.2020
845.5
5,386.9
508.7
2.2
847.7
–
–
–
–
854.1
5,444.7
497.3
9.3
–
–
Net
31.12.2021
863.4
–
–
Claims reserve including claims handling costs
5,895.6
– 636.7
5,258.9
5,942.0
– 787.5
5,154.5
Other technical reserves
93.2
–
93.2
78.0
–
78.0
Total technical reserves (non-life)
6,834.3
– 634.5
6,199.8
6,874.0
– 778.2
6,095.9
197
Baloise Group Annual Report 2021
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
31.12.2020
790.4
7.9
47.2
845.5
1.9
0.3
–
2.2
792.3
8.2
47.2
847.7
799.8
8.8
45.5
854.1
8.7
0.6
–
9.3
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
919.0
3,922.4
1,054.2
5,895.6
– 89.5
– 105.5
– 441.7
– 636.7
829.5
3,816.9
612.5
1,167.6
3,804.8
969.6
5,258.9
5,942.0
– 163.2
– 164.6
– 459.7
– 787.5
Net
31.12.2021
808.4
9.5
45.5
863.4
1,004.4
3,640.2
509.9
5,154.5
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
2020
Net
2021
743.2
0.9
744.1
845.5
2.2
847.7
3,802.5
– 224.9
3,577.6
4,063.4
– 271.8
3,791.6
– 3,743.4
230.0
– 3,513.5
– 4,026.5
279.1
– 3,747.4
41.7
– 3.9
37.8
–
–
1.5
845.5
–
–
0.1
2.2
–
–
–
–
–
–
–
–
–
–
–
1.6
847.7
– 28.3
854.1
– 0.2
9.3
– 28.5
863.4
Apart from the actual unearned premium reserves, this item includes health insurance reserves for old age and deferred unearned
premiums.
198
Baloise Group Annual Report 2021
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
Gross
Reinsurance
assets
75.9
– 30.3
–
0.3
Net
2020
75.9
– 30.0
93.2
– 33.0
47.6
– 0.3
47.3
19.1
–
–
–
0.0
93.2
–
–
–
–
–
–
–
–
–
–
–
0.0
93.2
– 1.4
78.0
–
0.0
0.0
–
–
–
–
–
Net
2021
93.2
– 32.9
19.1
–
–
–
– 1.4
78.0
199
Baloise Group Annual Report 2021
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)
2020
2021
5,658.6
– 538.0
5,120.5
5,895.6
– 636.7
5,258.9
2,121.8
– 40.9
2,080.9
2,364.8
– 112.2
2,252.5
– 1,060.9
– 1,124.7
– 1,112.7
– 1,098.3
– 2,173.6
– 2,223.0
237.4
–
– 6.3
231.1
–
–
– 133.9
– 133.9
5,258.9
5,154.5
636.7
787.5
5,895.6
5,942.0
The Baloise Group pays particular attention to the obligation arising from the hospital liability business in Germany, in which
lengthy settlement processes with heightened uncertainty are typical.
The related net reserves included in the total amount stood at CHF 213.2 million at the end of 2021 (31 December 2020:
CHF 246.3 million).
200
Baloise Group Annual Report 2021
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.
31.12.2020
31.12.2021
34,092.8
33,809.0
3,421.0
3,851.5
144.2
368.8
135.4
357.4
38,026.9
38,153.3
3,723.8
3,634.1
41,750.7
41,787.4
201
Baloise Group Annual Report 2021
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
31.12.2020
31.12.2021
1,050.0
3,113.8
3,321.3
5,526.6
9,977.0
1,012.0
3,047.3
3,258.2
5,244.5
9,938.0
11,103.9
11,309.1
34,092.8
33,809.0
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
242.7
347.3
362.7
465.1
2,433.7
3,851.5
49.1
169.2
169.3
157.0
116.8
661.4
100.7
2,883.3
2,984.0
102.7
2,870.1
2,972.7
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.
202
Baloise Group Annual Report 2021
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 2021 came to CHF 13.5 million (31 December 2020: CHF 13.1 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
Reclassification to non-current assets classified as held for sale
Exchange differences
Balance as at 31 December
2020
2021
34,253.7
34,092.8
– 131.2
122.0
–
–
–
–
–
–
– 29.8
– 405.8
34,092.8
33,809.0
33,753.8
33,493.1
338.9
316.0
2020
2021
3,334.1
239.9
– 168.6
– 5.7
19.4
9.5
0.0
–
3,421.0
260.6
– 238.6
– 6.2
540.5
–
–
–
– 7.4
3,421.0
– 126.0
3,851.5
203
Baloise Group Annual Report 2021
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
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
2020
2021
159.2
– 6.0
1.6
– 14.5
–
–
–
4.4
– 0.4
144.2
144.2
– 4.4
8.1
– 12.7
–
–
–
3.6
– 3.5
135.4
2020
2021
360.7
13.4
– 4.3
– 0.1
–
–
–
368.8
14.1
– 10.7
0.1
–
–
–
– 1.0
368.8
– 14.9
357.4
204
Baloise Group Annual Report 2021
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
2020
2021
815.5
35.0
– 108.3
–
–
–
– 2.3
739.8
2,932.3
– 827.8
95.0
– 125.9
37.5
739.8
33.0
– 92.1
–
–
–
– 19.3
661.4
2,984.0
– 875.7
138.0
– 122.0
223.8
Adjustment arising from unrealised gains and losses as at 31 December (shadow accounting)
875.7
674.7
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
–
–
–
–
–
–
– 2.7
– 50.1
2,984.0
2,972.7
3,723.8
3,634.1
205
Baloise Group Annual Report 2021
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
2020
2021
2020
2021
4,074.7
4,074.7
4,038.5
4,038.5
568.8
50.0
–
9.6
33.3
575.1
250.0
–
7.3
26.1
–
–
569.2
50.0
–
9.6
33.3
–
–
578.6
250.0
–
7.3
26.1
5,462.8
5,367.6
5,532.9
5,387.4
76.9
64.9
79.2
66.1
1,722.4
1,898.7
1,811.2
1,944.7
0.4
0.0
0.4
0.0
7,924.2
8,189.7
8,085.7
8,260.2
Recognised at fair value through profit or loss (designated)
Other financial contracts
Sub-total
13,284.6
14,654.2
13,284.6
13,284.6
14,654.2
13,284.6
14,654.2
14,654.2
Total liabilities arising from banking business and financial contracts
25,283.5
26,882.4
–
–
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.
206
Baloise Group Annual Report 2021
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)
31.12.2020
31.12.2021
2,324.4
2,399.1
38.9
26.5
2,363.3
2,425.7
Senior debt
Hybrid debt
Total
Senior debt
Hybrid debt
1,827.5
299.7
– 300.0
23.6
– 27.0
2.6
– 0.8
497.5
–
–
10.1
– 9.7
–
0.5
2020
2,325.0
299.7
– 300.0
33.8
– 36.7
2.6
– 0.3
1,826.4
450.0
– 375.0
14.1
– 15.8
0.9
– 0.8
498.0
–
–
10.2
– 9.7
–
0.5
Total
2021
2,324.4
450.0
– 375.0
24.2
– 25.5
0.9
– 0.3
Balance as at 31 December
1,826.4
498.0
2,324.4
1,900.6
498.5
2,399.1
On 15 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.
In addition, Bâloise Holding Ltd issued a senior green bond of CHF 200 million with a coupon of 0.125 per cent (maturity period:
2021–2030, ISIN CH1130818839) on 27 September 2021.
On 16 February 2022, Bâloise Holding Ltd placed an additional bond issue on behalf of the Baloise Group with a total volume
of CHF 200 million and a coupon of 0.30 per cent (maturity period: 2022–2027, ISIN CH1148728210) as part of its funding activities.
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.
207
Baloise Group Annual Report 2021
Notes to the consolidated annual financial statements
TERMS & CONDITIONS GOVERNING DEBT OUTSTANDING AS AT 31.12.2021
(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
150
225
150
Baloise
Life Ltd
300
Baloise
Life Ltd
200
Bâloise
Holding Ltd
Bâloise
Holding Ltd
200
200
2.000 %
1.750 %
1.125 %
1.750 %
2.200 %
0.500 %
0.000 %
100 %
2012
100 %
2013
100 %
2014
100 %
2017
100 %
2017
100 %
2019
100 %
2019
12.10.2022
26.04.2023
19.12.2024
perpetual
19.06.2048
28.11.2025
23.09.2022
CH0194695083
CH0200044821
CH0261399064
CH0379610998
CH0379611004
CH0458097976
CH0496692960
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
Bâloise
Holding Ltd
100
125
175
125
250
200
0.000 %
0.000 %
0.250 %
0.500 %
0.150 %
0.125 %
100 %
2019
100 %
2019
100 %
2020
100 %
2020
100 %
2021
100 %
2021
25.09.2026
25.09.2029
16.12.2026
16.12.2030
17.02.2031
27.06.2030
CH0496692978
CH0496692986
CH0553331817
CH0553331825
CH0593641068
CH1130818839
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
208
2020
2021
43.0
14.5
–
– 2.2
–
0.5
– 16.9
0.0
38.9
38.9
2.0
–
– 0.9
–
0.4
– 13.3
– 0.6
26.5
Baloise Group Annual Report 2021
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
2020
Total
2021
18.5
34.4
52.9
13.2
44.3
57.5
–
–
–
–
–
–
12.9
–
–
–
12.9
–
–
–
–
–
–
–
–
–
–
–
–
–
3.7
15.1
18.8
2.8
33.4
36.3
– 0.2
– 8.7
–
– 0.1
13.2
– 15.7
– 2.5
–
0.0
44.3
– 15.9
– 11.1
–
– 0.1
57.5
– 3.2
– 3.8
–
– 0.4
8.7
– 8.1
– 0.1
–
– 1.2
68.3
– 11.3
– 3.9
–
– 1.6
77.0
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
31.12.2020
31.12.2021
1,312.9
1,298.0
182.0
304.7
80.4
133.1
295.9
43.0
1,879.9
1,770.1
209
Baloise Group Annual Report 2021
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
3,802.5
– 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
Non-Life
Life
4,063.4
– 36.9
4,026.5
– 271.8
– 7.3
3,389.7
–
3,389.7
– 47.4
–
Total
2021
7,453.1
– 36.9
7,416.2
– 319.2
– 7.3
3,513.5
3,253.3
6,766.8
3,747.4
3,342.3
7,089.7
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
2020
2021
282.5
286.4
108.9
1.9
176.7
385.8
0.1
207.7
13.7
– 0.8
119.0
2.1
163.7
387.5
0.1
190.2
12.7
– 2.3
1,176.5
1,159.5
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 1.7 million had been recognised on impaired investments at the balance sheet date (2020: CHF 2.7 million).
210
Baloise Group Annual Report 2021
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
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
466.4
–
–
–
–
466.4
– 295.4
–
–
–
–
–
–
155.2
11.3
–
166.5
–
–
– 95.0
– 20.8
–
–
–
297.3
0.2
–
297.5
–
– 6.4
– 171.3
– 0.1
–
– 295.4
– 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
466.4
–
452.5
485.2
110.8
–
–
–
468.5
–
468.5
1,515.0
–
–
–
– 428.3
–
– 295.4
– 6.4
– 266.3
– 451.7
– 1.6
– 428.3
– 1,021.5
–
–
–
–
–
–
–
–
– 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.
211
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
2021
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 maturity1
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
347.2
–
–
–
–
347.2
– 107.6
–
–
–
–
–
–
231.5
47.8
–
279.3
–
–
– 19.5
– 3.2
–
–
0.8
168.5
1.0
–
170.3
–
– 46.2
– 260.8
0.0
–
– 107.6
– 22.7
– 307.0
–
–
–
–
–
–
–
–
– 25.7
–
– 0.4
–
–
–
–
–
–
–
–
– 25.7
– 0.4
–
–
–
0.0
22.9
22.9
–
–
–
– 22.1
– 2.0
– 24.2
–
–
– 6.1
–
–
1.0
– 5.1
Total
347.2
0.8
400.0
493.8
22.9
–
–
–
445.0
–
445.0
1,264.7
–
–
–
– 401.5
–
– 401.5
–
–
–
–
–
–
–
– 107.6
– 46.2
– 280.3
– 426.9
– 2.0
– 863.0
–
– 26.0
– 6.1
–
–
1.0
– 31.1
Total realised gains and losses on investments
239.6
230.9
– 137.0
– 6.3
43.4
370.5
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.
212
Baloise Group Annual Report 2021
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
Private debt
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
2020
2021
– 151.2
– 15.9
– 6.4
– 6.2
0.0
0.0
– 19.1
– 1.0
–
– 2.2
–
0.0
– 7.5
0.0
– 183.9
– 25.7
–
– 17.2
– 1.6
–
–
–
– 0.4
–
–
–
– 18.8
– 0.4
– 3.5
– 6.0
–
–
–
–
–
–
–
–
–
–
– 0.7
– 4.2
– 0.1
– 6.1
Total impairment losses on financial assets recognised in profit or loss
– 206.9
– 32.1
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 affected the business units in Switzerland
and Belgium. The impairment losses were 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.
213
Baloise Group Annual Report 2021
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 197.2 million was reported for 2021 (2020: loss of CHF 124.3 million).
A gross currency loss of CHF 80.7 million was recognised directly in equity for the reporting year (2020: loss of CHF 151.3 million).
Allowing for hedges of a net investment in a foreign operation (hedge accounting), a net loss of CHF 116.1 million was recognised
for 2021 (2020: net loss of CHF 31.6 million).
2020
2021
44.7
25.2
33.9
14.6
46.7
24.3
41.3
18.3
118.5
130.6
2020
2021
8.5
0.7
1.4
4.1
9.0
2.9
32.4
134.4
193.4
7.2
0.8
0.5
22.0
8.5
3.1
46.4
124.6
213.2
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
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
214
Baloise Group Annual Report 2021
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 2021 came to CHF 952.5 million (2020: CHF 951.4 million).
2020
2021
– 838.1
– 835.5
– 41.6
– 46.9
– 51.3
– 46.2
– 46.0
– 56.0
– 116.0
– 151.0
– 24.9
– 4.9
– 26.0
– 3.2
– 718.4
– 754.2
– 11.6
– 5.5
–
– 28.6
– 108.7
– 11.9
– 5.9
–
– 36.4
– 157.4
– 1,996.4
– 2,129.7
215
Baloise Group Annual Report 2021
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
2020
2021
– 58.1
– 58.1
0.2
– 15.3
1.9
4.7
– 7.2
– 8.7
– 54.2
– 54.2
– 0.6
– 11.8
3.4
2.5
– 9.5
– 6.3
– 24.4
– 22.3
– 177.1
– 177.1
– 1,091.8
– 1,091.8
– 259.5
– 1,168.3
–
–
–
–
–
–
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.
216
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
35. INCOME TAXES
35.1 Current income taxes and deferred taxes
CHF million
Current income taxes
Deferred taxes
Total income taxes
2020
2021
– 102.2
– 38.1
– 140.3
– 72.9
– 41.7
– 114.6
35.2 Expected and current income taxes
The expected average tax rate for the Baloise Group was 19.4 per cent in 2020 and 15.6 per cent in 2021. 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
2020
2021
568.6
19.40 %
– 110.3
697.9
15.63 %
– 109.1
3.6
–
– 11.9
– 0.8
1.8
– 6.7
– 6.4
– 1.8
– 11.9
– 1.5
5.7
– 140.3
19.4
–
– 17.9
– 1.1
– 0.1
– 7.4
– 12.0
0.9
1.4
1.2
10.2
– 114.6
217
Baloise Group Annual Report 2021
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)
2020
434.3
2021
588.4
45,031,594
45,062,127
9.65
13.06
2020
434.3
2021
588.4
45,031,594
45,062,127
82,091
38,735
45,113,685
45,100,862
9.63
13.05
The dilution of earnings was attributable to the Performance Share Units (PSU) share-based payment plan.
218
Baloise Group Annual Report 2021
Financial Report
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
Total items not to be reclassified to the income statement
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
2020
2021
–
– 58.7
33.1
0.1
7.3
– 18.2
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
11.5
350.8
– 35.2
4.6
– 57.7
274.1
– 173.4
– 259.4
– 432.8
2.9
–
2.9
– 34.8
– 0.6
– 35.4
–
– 0.8
– 0.8
221.0
– 128.7
73.7
– 300.1
Total other comprehensive income
206.9
– 26.0
219
Baloise Group Annual Report 2021
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
Total deferred taxes of items to be reclassified to the income statement
Change arising from exchange differences
Other comprehensive income after deferred taxes
2020
2021
249.5
– 46.1
–
17.9
– 10.5
–
7.3
– 60.5
0.1
– 18.1
0.1
28.4
–
– 50.1
0.2
206.9
– 4.3
– 64.6
11.2
–
– 57.7
117.2
– 0.8
5.4
0.1
– 48.2
–
73.7
4.0
– 26.0
220
Baloise Group Annual Report 2021
Financial Report
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
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.
No companies were acquired or sold in 2021.
Cumulative
acquisitions
Cumulative
disposals
2020
2021
2020
2021
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
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 retrospective
effect from the date of acquisition.ncremental 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.
221
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
38.2 Changes to shareholdings
In 2021, 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.
2020
CHF million
Total
2021
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
income
comprehensive
income
263.4
64.1
–
– 4.2
59.9
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
316.0
4.9
–
2.9
7.8
The strategic business units in Germany and Luxembourg invested in the closed investment partnership HL Invest Augs-
burg GmbH & Co. geschlossene Investment-KG in the first half of 2021 and together hold 42.22 per cent of this real estate fund.
Furthermore, the strategic business unit in Germany invested in the closed investment partnership HL Invest Vision One GmbH & Co.
geschlossene Investment-KG in the second half of 2021 and holds 30.15 per cent of this real estate fund.
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 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.
222
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
As at 31 December 2021 or 31 December 2020, 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 2021 or 31 December 2020.
223
Baloise Group Annual Report 2021
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.
31.12.2021
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
Deutsche Niederlassung der FRIDAY Insur-
ance S. A., Berlin
Basler Sach Holding AG, Hamburg
ZEUS Vermittlungsgesellschaft mbH, Hamburg
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)
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
Non-Life
NL
87.41
100.00
Holding
Other
O
O
100.00
100.00
100.00
100.00
F
F
F
F
F
F
F
F
F
F
F
F
F
CHF
CHF
CHF
CHF
CHF
CHF
4.6
3,350.7
–
75.0
5,553.1
1,515.8
50.0 33,963.8
2,727.8
50.0
8,647.2
0.2
1.0
25.4
67.7
CHF
1.5
14.0
EUR
0.1
10.8
–
–
–
–
–
EUR
22.0 10,502.4
368.0
EUR
15.1
2,033.8
759.7
EUR
EUR
EUR
–
60.9
48.7
3.6
0.5
174.2
8.5
–
–
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.
224
Baloise Group Annual Report 2021
Financial Report
Notes to the consolidated annual financial statements
31.12.2021
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
Baloise Alternative Invest S. A. SICAV-RAIF,
Luxembourg
Other territories
Baloise Life (Liechtenstein) AG, Balzers
Baloise Finance (Jersey) Ltd., Jersey
Succursale francaise de la société FRIDAY
Insurance S. A., Paris
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
Investment
L / NL / O
100.00
100.00
manage-
ment
Life
Other
Non-Life
L
O
NL
100.00
100.00
100.00
100.00
87.41
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.
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
EUR
355.3 13,817.2
1,615.1
EUR
2.7
265.5
86.3
CHF
250.0
1,888.7
–
EUR
15.8
403.0
137.4
EUR
32.7 10,868.7
68.4
USD
0.0
976.3
USD
–
1,906.3
CHF
CHF
EUR
7.5
0.3
–
2,765.7
1.0
2.4
–
–
0.6
–
0.1
225
Baloise Group Annual Report 2021
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 57 to 79).
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
2020
2021
2020
2021
2020
2021
31.12.2020
31.12.2021
31.12.2020
31.12.2021
CHF million
Associates
Key management personnel
–
0.1
–
0.1
5.7
0.0
1.9
0.0
– 21.5
– 11.4
– 23.0
– 11.2
–
7.5
–
5.5
– 2.7
–
– 2.6
–
EXECUTIVE MANAGEMENT TEAM REMUNERATION
CHF million
Short-term employee benefits
Post-employment benefits
Payments under share-based payment plans
Discount Share Subscription Plan
Total
2020
2021
– 6.8
– 1.1
– 3.3
– 0.2
– 6.3
– 1.0
– 3.6
– 0.2
– 11.4
– 11.2
14,143 shares worth CHF 2.2 million were repurchased from members of the Corporate Executive Committee in 2021 (2020:
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 2021
and that could have a significant impact on the 2021 consolidated annual financial statements.
226
Baloise Group Annual Report 2021
Financial Report
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
31.12.2020
31.12.2021
62.7
478.0
540.7
58.9
482.5
541.3
31.12.2020
CHF million
Guarantees
Collateral
31.12.2021
CHF million
Guarantees
Collateral
AAA
–
–
AAA
–
–
AA
–
–
AA
–
–
A
30.6
–
A
30.4
–
Lower than BBB
or no rating
BBB
–
–
32.1
478.0
Lower than BBB
or no rating
BBB
–
–
28.4
482.5
Total
62.7
478.0
Total
58.9
482.5
227
Baloise Group Annual Report 2021
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
31.12.2020
31.12.2021
47.1
3,826.7
2,531.0
222.0
3,755.9
2,763.0
–
–
–
–
–
–
6,404.9
6,741.0
31.12.2020
31.12.2021
–
–
5,307.9
4,827.0
–
–
5,307.9
4,827.0
–
–
–
–
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.
228
Baloise Group Annual Report 2021
Financial Report
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
31.12.2020
CHF million
Capital commitments
31.12.2021
CHF million
Capital commitments
31.12.2020
31.12.2021
529.4
1,239.2
279.2
1,475.3
–
–
–
–
1,768.7
1,754.5
AAA
397.5
AAA
484.9
AA
–
AA
–
A
49.1
A
30.5
Lower than BBB
or no rating
BBB
Total
–
1,322.1
1,768.7
Lower than BBB
or no rating
BBB
Total
–
1,239.1
1,754.5
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.
229
Baloise Group Annual Report 2021
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
2020
2021
13.5
16.3
5.0
4.6
39.5
38.9
11.0
11.2
2.4
3.7
28.2
26.5
2020
2021
0.5
– 6.2
– 0.5
0.8
– 6.5
– 0.4
– 16.5
– 12.8
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 September 2022 until 2037.
The right-of-use asset and lease liability for this lease are estimated to be CHF 41.4 million.
230
Baloise Group Annual Report 2021
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
2020
2021
355.2
677.4
725.1
174.1
349.5
668.8
725.1
177.7
1,931.9
1,921.1
2020
2021
357.2
–
357.2
365.3
–
365.3
42. EVENTS AFTER THE BALANCE SHEET DATE
On 16 February 2022, Bâloise Holding Ltd placed an additional bond issue on behalf of the Baloise Group with a total volume of
CHF 200 million and a coupon of 0.30 per cent (maturity period: 2022–2027, ISIN CH1148728210) as part of its funding activities.
By the time that these consolidated annual financial statements had been completed on 22 March 2022, we had not become aware
of any further events that would have a material impact on the consolidated annual financial statements as a whole.
231
Baloise Group Annual Report 2021
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, 23 March 2022
Report of the statutory auditor on the consolidated financial statements
Opinion
We have audited the consolidated financial statements (pages 84-231) of Bâloise Holding Ltd
and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at 31
December 2021, 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 2021, 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.
232
Ernst & Young Ltd
Aeschengraben 27
P.O. Box
CH-4002 Basel
Phone:
+41 58 286 86 86
Fax:
+41 58 286 86 00
www.ey.com/ch
To the Annual General Meeting of
Bâloise Holding Ltd, Basel
Basel, 23 March 2022
Report of the statutory auditor on the consolidated financial statements
Opinion
We have audited the consolidated financial statements (pages 84-231) of Bâloise Holding Ltd
and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at 31
December 2021, 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 2021, 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 2021
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
233
Baloise Group Annual Report 2021
Financial Report
Report of the statutory auditor
234
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 2021
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
235
Baloise Group Annual Report 2021
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 267 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
236
Baloise Group Annual Report 2021
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
internes Kontrollsystem für die Aufstellung des Finanzberichtes existiert.
consolidated financial statements according to the instructions of the Board of Directors.
Wir empfehlen, den vorliegenden Finanzbericht zu genehmigen.
We recommend that the consolidated financial statements submitted to you be approved.
Ernst & Young AG
Ernst & Young Ltd
Christian Fleig
Zugelassener Revisionsexperte
Christian Fleig
(Leitender Revisor)
Licensed audit expert
(Auditor in charge)
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 267 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
237
Unterkapitel Bâloise Holding Ltd
Income statement of Bâloise Holding Ltd ........................ 240
Balance sheet of Bâloise Holding Ltd ............................... 241
Notes to the financial statements of Bâloise Holding Ltd ... 242
Appropriation of distributable profit as proposed
by the Board of Directors ................................................. 251
Report of the statutory auditor to the
Annual General Meeting of Bâloise Holding Ltd, Basel ...... 252
D
T
L
G
N
I
D
L
O
H
E
S
I
O
L
â
B
Unterkapitel
Baloise Group Annual Report 2021
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
Financial expenses
Interest expenses
Other expenses
Total expenses
Tax expense
Profit for the period
Note
2020
2021
2
3
4
5
384.6
58.7
8.8
452.1
– 43.8
– 1.8
– 31.0
– 3.0
– 79.6
393.0
58.1
8.2
459.3
– 39.0
– 3.0
– 22.3
– 2.6
– 66.9
– 0.2
– 0.9
372.3
391.5
240
Baloise Group Annual Report 2021
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
Other short-term receivables
Current assets
Financial assets
Loans to Group companies
Other investments
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
31.12.2020
31.12.2021
6
7
8
9
10
11
12
13
14
21.2
408.1
7.3
–
436.6
89.2
345.5
7.4
80.0
522.1
1,148.8
1,158.8
0.4
1,871.2
3,020.4
3.1
1,907.9
3,069.8
3,457.0
3,591.9
6.0
0.2
375.0
19.5
777.0
1,450.0
–
4.3
2.3
350.0
9.8
765.6
1,550.0
0.7
2,627.7
2,682.8
4.9
11.7
9.2
4.6
11.7
7.6
922.3
502.8
0.1
372.3
– 491.3
829.3
0.1
391.5
– 9.3
909.1
3,457.0
3,591.9
241
Baloise Group Annual Report 2021
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 / Other short-term receivables
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.
242
Notes to the financial statements of Bâloise Holding Ltd
Baloise Group Annual Report 2021
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.
243
Baloise Group Annual Report 2021
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
Sundry other income
Total other income
4. ADMINISTRATIVE EXPENSES
CHF million
Personnel expenses1
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.
INTEREST EXPENSES
CHF million
Interest on bonds
Other interest expenses
Total interest expenses
244
2020
2021
19.6
39.0
–
0.1
58.7
19.5
38.4
0.3
– 0.2
58.1
2020
2021
8.8
8.8
8.2
8.2
2020
2021
– 27.7
– 16.1
– 43.8
– 23.0
– 16.0
– 39.0
2020
2021
– 24.4
– 6.6
– 31.0
– 14.9
– 7.4
– 22.3
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
NOTES TO THE BALANCE SHEET
6. RECEIVABLES FROM GROUP COMPANIES
CHF million
Dividends
Other receivables
Total receivables from Group companies
31.12.2020
31.12.2021
377.4
30.7
408.1
323.1
22.3
345.5
The annual general meeting of the following AGMs voted to recognise the dividends receivable for the 2021 financial year as
accrued income:
▸
▸
▸
▸
25 February 2022: Baloise Bank SoBa AG, Solothurn
15 March 2022: Baloise Asset Management AG, Basel and Baloise Asset Management International AG, Basel
22 March 2022: Basler Versicherung AG, Basel and Basler Leben AG, Basel
24 March 2022: Haakon AG, Basel
7. OTHER SHORT-TERM RECEIVABLES
CHF million
Short-term promissory note loans
Total other short-term receivables
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
Subordinated loans to Bâloise Vie Luxembourg S. A.
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
31.12.2020
31.12.2021
–
–
80.0
80.0
31.12.2020
31.12.2021
40.0
284.6
411.2
–
283.7
42.3
87.0
40.0
284.6
394.3
72.6
283.7
40.5
43.0
1,148.8
1,158.8
245
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
9. OTHER INVESTMENTS
The item ’Other investments’ includes an internal derivative hedge instrument that is measured at fair value.
10. LONG-TERM EQUITY INVESTMENTS
Total
shareholding
as at
31.12.2020
(with voting
rights)
Total
shareholding
as at
31.12.2021
(with voting
rights)
Share capital
as at
31.12.2021
Capital share
(per cent) 1
(per cent) 1
Currency
(million)
(million)
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
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
–
–
CHF
CHF
CHF
CHF
CHF
CHF
CHF
EUR
CHF
EUR
EUR
EUR
EUR
CHF
CHF
EUR
EUR
75.0
50.0
50.0
1.0
1.5
0.2
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.3
0.1
–
–
75.0
50.0
50.0
1.0
1.5
0.1
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.3
0.1
–
–
Company
Basler Versicherung AG, Basel
Basler Leben AG, Basel
Baloise Bank SoBa AG, Solothurn
Baloise Asset Management AG, Basel
Baloise Asset Management International 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)
Baloise Participation Holding AG, Basel
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
31.12.2021
Securities with security number
Bond 19 469 508
Bond 49 669 296
Total current interest-bearing liabilities
Interest rate
Issued
Maturity date
Amount CHF million
2.000 %
0.000 %
12.10.2012
12.10.2022
25.09.2019
23.09.2022
150.0
200.0
350.0
246
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
12. LONG-TERM INTEREST-BEARING LIABILITIES TO THIRD PARTIES
31.12.2021
Securities with security number
Bond 20 004 482
Bond 26 139 906
Bond 45 809 797
Bond 49 669 297
Bond 49 669 298
Bond 55 333 181
Bond 55 333 182
Bond 59 364 106
Bond 113 081 883
Total long-term interest-bearing liabilities
13. TREASURY SHARES
2020
Balance as at 1 January
Purchases
Sales
Reduction of share capital
Disposals in connection with share participation programmes
Balance as at 31 December
2021
Balance as at 1 January
Purchases
Sales
Reduction of share capital
Disposals in connection with share participation programmes
Balance as at 31 December
Interest rate
Issued
Maturity date
Amount CHF million
1.750 %
1.125 %
0.500 %
0.000 %
0.000 %
0.250 %
0.500 %
0.150 %
0.125 %
26.04.2013
26.04.2023
19.12.2014
19.12.2024
28.01.2019
28.11.2025
25.09.2019
25.09.2026
25.09.2019
25.09.2029
16.07.2020
16.12.2026
16.07.2020
16.12.2030
15.02.2021
17.02.2031
27.09.2021
27.06.2030
225.0
150.0
200.0
100.0
125.0
175.0
125.0
250.0
200.0
1,550.0
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
0
– 48,777
3,079,343
Low
in CHF
High
in CHF
Average
share price
(CHF)
Number of
registered shares
3,079,343
136.00
162.70
147.42
38,000
0
– 3,000,000
– 41,428
75,915
247
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
Total
equity
862.9
–
– 312.3
–
–
– 93.6
–
372.3
829.3
Total
equity
829.3
–
– 312.3
–
–
0.6
–
391.5
909.1
14. CHANGES IN EQUITY
2020
CHF million
Balance as at 1 January
Allocation 2020
Dividend
Additions
Reduction of share capital
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
8.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.9
–
9.2
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
2021
CHF million
Balance as at 1 January
Allocation 2021
Dividend
Additions
Reduction of share capital
Change in treasury shares
Recognition / reversal
Profit for the period
Balance as at 31 December
Share capital
Statutory retained earnings
Voluntary retained earnings
Treasury shares
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
4.9
–
–
–
– 0.3
–
–
–
4.6
11.7
9.2
–
–
–
–
–
–
–
11.7
–
–
–
–
–
– 1.5
–
7.6
922.3
60.0
–
–
– 481.1
–
1.5
–
502.8
372.5
– 60.0
– 312.3
–
–
–
–
391.5
391.6
– 491.3
–
–
–
481.4
0.6
–
–
– 9.3
248
Baloise Group Annual Report 2021
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 2021:
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
31.12.2020 1
Share of
voting rights
as at
31.12.2020 2
Total
shareholding
as at
31.12.2021 1
Share of
voting rights
as at
31.12.2021 2
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
5.8
>5.0
>3.0
>3.0
2.6
>3.0
2.3
>3.0
2.0
<2.0
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
31.12.2020
31.12.2021
502.2
500.0
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
customers 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.
249
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
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 is making cash and cash equivalents of EUR 58 million available to Basler Sachversicherungs-Aktien-
gesellschaft for ten years. If needed, Basler Sachversicherungs-Aktiengesellschaft can obtain this money in the form of a loan.
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 57 to 79 in the part of corporate governance. The key information
disclosed here includes
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▸
▸
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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 2020.
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 16 February 2022, Bâloise Holding Ltd issued a bond with a total volume of CHF 200 million and a coupon of 0.30 per cent
(maturity period: 2022–2027, ISIN CH1148728210) as part of its funding activities.
By the time that these annual financial statements had been completed on 22 March 2022, we had not become aware of any
further events that would have a material impact on the annual financial statements as a whole.
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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 391,510,151.81.
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
2020
2021
372,317,275.70
391,510,151.81
139,027.21
136,302.91
372,456,302.91
391,646,454.72
– 312,320,000.00
– 320,600,000.00
– 60,000,000.00
– 71,000,000.00
–
136,302.91
–
46,454.72
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 7.00 gross or CHF 4.55 net of withholding tax.
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Bâloise Holding Ltd
Notes to the financial statements of Bâloise Holding Ltd
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, 23 March 2022
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements (pages 240-250) of Bâloise
Holding Ltd, which comprise the balance sheet, income statement and notes, for the year
ended 31 December 2021.
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 2021 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
252
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, 23 March 2022
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements (pages 240-250) of Bâloise
Holding Ltd, which comprise the balance sheet, income statement and notes, for the year
ended 31 December 2021.
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
Baloise Group Annual Report 2021
Bâloise Holding Ltd
Report of the statutory auditor
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 2021 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 2021 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 2021.
Based on our audit procedures we did not identify exceptions with
regard to the valuation of long-term equity investments.
Our audit
response
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Baloise Group Annual Report 2021
Bâloise Holding Ltd
Report of the statutory auditor
Report on other legal requirements
Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor
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
Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there
are no circumstances incompatible with our independence.
are no circumstances incompatible with our independence.
In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we
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
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.
financial statements according to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss
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
law and the company’s articles of incorporation. We recommend that the financial statements
submitted to you be approved.
submitted to you be approved.
Ernst & Young Ltd
Ernst & Young Ltd
Christian Fleig
Christian Fleig
Licensed audit expert
Licensed audit expert
(Auditor in charge)
(Auditor in charge)
Patrick Schwaller
Patrick Schwaller
Licensed audit expert
Licensed audit expert
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 267 “Information on
This audit report is a translation of the audit report issued in German. Please also refer to the disclosure on page 267 “Information on
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
the Baloise Group” referencing the fact that only the German text of the annual report is legally binding.
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Baloise Group Annual Report 2021
Bâloise Holding Ltd
Report of the statutory auditor
This page has been left empty on purpose.
255
Unterkapitel General
information
ALTERNATIVE PERFORMANCE MEASURES ................. 258
GLOSSARY ................................................................. 262
ADDRESSES .............................................................. 266
INFORMATION ON THE BALOISE GROUP ..................... 267
FINANCIAL CALENDAR AND CONTACTS ...................... 268
Unterkapitel Baloise Group Annual Report 2021
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):
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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 for the period
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.
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Baloise Group Annual Report 2021
General information
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 underwriting
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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Baloise Group Annual Report 2021
General information
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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Baloise Group Annual Report 2021
General information
Alternative Performance Measures
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Baloise Group Annual Report 2021
General information
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
country-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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Baloise Group Annual Report 2021
General information
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
consolidated 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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Baloise Group Annual Report 2021
General information
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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General information
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 authorities
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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Baloise Group Annual Report 2021
General information
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
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GERMANY
Basler Versicherungen
Basler Strasse 4
D-61345 Bad Homburg
Tel. + 49 6172 130
info@basler.de
www.basler.de
FRIDAY
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 2021
General information
Information on the Baloise Group
Information on the Baloise Group
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. The 2021 Annual Review and Annual Report is also
available in German. Only the German text is legally binding.
The Financial Report contains the audited 2021 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. 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 information.
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 con-
sideration new information, future events, etc. Past performance
is not indicative of future results.
AVAILABILITY AND ORDERING
The 2021 Annual Review and Annual Report and the Summary
of the 2021 Annual Report will be available from 29 March 2022
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
© 2022 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)
267
Baloise Group Annual Report 2021
General information
Financial calendar and contacts
Financial calendar and contacts
29 APRIL 2022
Annual General Meeting
Bâloise Holding Ltd
25 AUGUST 2022
Half-year financial results
Conference call for analysts and the media
Publication of the 2022 half-year report
9 MARCH 2023
Preliminary annual financial results
Media conference
Conference call for analysts
28 MARCH 2023
Annual Report
Publication of the 2022 annual report
28 APRIL 2023
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
268
Bâloise Holding Ltd
Aeschengraben 21
CH-4002 Basel, Switzerland
www.baloise.com
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