Plain-text annual report
Annual Report
2023
22
Baloise Group Annual Report 2023
Contents
Baloise
Corporate Governance
Baloise Holding Ltd
Overview of the reporting
environment
Key figures
Letter to shareholders
Review of operating
performance
Baloise strengthens its core
business – higher cash remittance
and growing dividend
Annual financial results in brief
Profit and business volume
Insurance business
Asset Management & Banking
4
5
6
10
10
11
12
14
Capitalisation and cash remittance 15
Outlook
Consolidated income statement
Consolidated balance sheet
Key figures insurance business
Banking activities
Investment performance
(insurance)
15
16
17
18
21
22
Risik management
Risk management; a key pillar
of our value creation
26
Corporate Governance Report
Appendix 1: Remuneration Report
Appendix 2: Report of the
statutory auditor to the
Annual General Meeting of
Baloise Holding Ltd, Basel
31
51
Income statement of Baloise
Holding Ltd
Balance sheet of Baloise
Holding Ltd
258
259
Notes to the financial statements
of Baloise Holding Ltd
260
72
Financial Report
Consolidated income statement
78
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement of
changes in equity
79
80
82
Consolidated cash flow statement 84
Appropriation of distributable
profit as proposed by the
Board of Directors
Report of the statutory auditor
to the Annual General Meeting
of Baloise Holding Ltd, Basel
269
270
Report on non-financial
matters (Art. 964a et seq. of
the Swiss Code of Obligations
(OR))
Notes to the consolidated annual
financial statements
86
Foreword
Report of the statutory auditor
to the Annual General Meeting
of Baloise Holding Ltd, Basel
General information
250
Information on environmental
matters
Information on social matters
Information on corporate
governance
Further information
Alternative Performance
Measures
Glossary
Addresses
Informationen on the
Baloise Group
277
279
309
319
337
348
352
356
357
Financial calendar and contacts 358
3
3
Baloise Group Annual Report 2023
Baloise
Reporting environment
Continuous reporting
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 organisations
In some cases, Baloise’s national organisations publish their
own external reports in accordance with the statutory and
regulatory requirements of the jurisdiction in which they
operate. In Belgium and Germany, reports are also prepared
on transparency on non-financial matters in accordance with
EU requirements (Non-Financial Reporting Directive, NFRD).
All documents are available in electronic form on the
following websites:
● Baloise Group
www.baloise.com/annual-report
● Baloise in Belgium
www.baloise.be/fr/a-propos-de-nous
● Baloise in Germany
www.baloise.de/de/ueber-uns
● Baloise Switzerland
www.baloise.com/financial-condition-report
www.baloise.com/bank
About the reporting
Overview of Baloise’s external reporting
The annual reporting procedures of the Baloise Group are
based on relevant statutory and regulatory requirements
and applicable standards and guidelines, particularly those
issued by the International Accounting Standards Board and
SIX Swiss Exchange, where the shares of Baloise Holding Ltd
are listed. Published financial information for the compar-
ative period may differ from the originally published figures
due to the application of the new accounting standards
IFRS 9 and IFRS 17.
The reporting for 2023 is based on the following docu-
ments:
Annual Report
The Annual Report forms the core of the reporting activities. It
comprises the management review of the operating perfor-
mance, the corporate governance report, the remuneration
report, the report on non-financial matters and the financial
report. The financial report includes the consolidated annual
financial statements of the Baloise Group and the income
statement of Baloise Holding Ltd.
Annual Review
The review of the financial year provides a holistic view
of the added value generated by Baloise under its value
creation approach. The approach is based on the integrated
reporting framework ( Framework) of the International
Integrated Reporting Council (IIRC). As well as important
financial key figures, it also contains comprehensive infor-
mation on non-financial disclosure. The report outlines the
value creation of Baloise across the six resources of the
value creation approach (investors, employees, customers,
partners, environment and society) and the four framework
processes (IT, compliance, corporate governance and risk
management).
Presentation for financial analysts
The presentation for financial analysts is specifically aimed
at investors. It is made available only on our website and
exclusively in English, and it provides detailed information
on the financial performance of Baloise and its individual
operating segments and strategic business units.
4
Baloise Group Annual Report 2023 Key figures
CHF million
Business volume
Gross premiums written Non-life
Gross premiums written Life
Investment-type premiums
Total business volume
Insurance revenue
Insurance revenue Non-life
Insurance revenue Life
Total insurance revenue
Operating profit (loss)
Consolidated profit / loss for the period before borrowing costs and taxes
Non-life
Life
Asset Management & Banking
Other activities
Consolidated profit for the period
Profit (attributable to the shareholders)
Balance sheet
Insurance contract liabilities
Contractual service margin (CSM)
Equity
Ratios (per cent)
Return on equity (RoE)
Combined ratio Non-life
New business margin (NBM) Life
New life insurance business
Value of new business (VNB)
Present value new business premium (PVNBP)
New business CSM
Key figures on the Company’s shares
Shares issued (units)
Average number of shares outstanding
Basic earnings per share 1 (CHF)
Diluted earnings per share 1 (CHF)
Comprehensive equity per share 2 (CHF)
Closing price (CHF)
Market capitalisation (CHF million)
Dividend per share 3 (CHF)
1 Calculation based on the profit for the period attributable to shareholders.
2 Calculation based on shareholders’ equity (equity before non-controlling interests) and the contractual service margin (CSM) after taxes.
3 2023 based on the proposal submitted to the Annual General Meeting.
Baloise
2023
2022
Change (%)
4,081.6
3,648.0
888.5
3,958.7
3,848.1
890.7
8,618.1
8,697.5
4,013.0
1,399.4
5,412.4
3,936.5
1,403.1
5,339.6
134.0
178.5
82.3
– 50.4
236.2
239.6
99.4
259.8
64.4
– 57.2
244.5
247.8
49,819.5
49,753.3
4,864.8
3,259.3
5,391.8
3,417.4
7.4
92.0
6.5
177.4
2,748.6
167.0
6.7
92.9
6.7
200.9
3,015.0
200.8
45,800,000
45,800,000
45,298,246
45,176,614
5.29
5.29
156.57
131.80
6,036.4
7.70
5.49
5.48
169.24
142.70
6,535.7
7.40
3.1
– 5.2
– 0.2
– 0.9
1.9
– 0.3
1.4
34.8
– 31.3
27.8
– 11.9
– 3.4
– 3.3
0.1
– 9.8
– 4.6
–
–
–
– 11.7
– 8.8
– 16.8
0.0
0.3
– 3.6
– 3.5
– 7.5
– 7.6
– 7.6
4.1
5
Baloise Group Annual Report 2023 Baloise
Letter to shareholders
Dear shareholders,
Last year, our core business was influenced by an exception-
ally high volume of natural disaster claims and large claims
and by the transition to the IFRS 17 and IFRS 9 accounting
standards. At around CHF 240 million, profit attributable to
shareholders was down by 3.3 per cent year on year. The
Baloise Group’s business volume came to CHF 8,618 million,
which was on a par with 2022. We generated growth in our
target segments, including an encouraging 5.4 per cent rise
in premiums in the non-life business. By contrast, premiums
fell by 4.3 per cent in the life business owing to the ongoing
shift towards partially autonomous solutions. Profit for the
period was affected by additional net claims incurred of just
over CHF 200 million compared with the volume normally
incurred in an average year. Nonetheless, the net combined
ratio in the non-life business improved to 92 per cent. Given
the challenging claims environment, this improvement
reflects the continued high quality of our business. Market
conditions for our life insurance business were complex.
The strength of the Swiss franc was the driving factor in the
currency markets, while the interest rate environment was
shaped by central banks’ interest rate hikes in the first half
of 2023 followed by falling interest rates towards the end of
the year.
Our capitalisation remains at a strong level despite the
challenges of 2023. In the Swiss Solvency Test (SST), we expect
a ratio of around 210 per cent as at 1 January 2024. Compre-
hensive equity amounted to CHF 7,169.5 million (31 December
2022: CHF 7,751.0 million). It comprises the sum of the contrac-
tual service margin after taxes and the equity attributable to
shareholders. In addition, Baloise’s strong capital adequacy
was once again confirmed by Standard & Poor’s in August
2023, when it reaffirmed its rating of A+ for the Baloise Group.
Greater focus on core business; no further new
investment in the ecosystem strategy
The long-term impact of the pandemic, the complex geopo-
litical situation, the changes affecting the capital markets
and national economies (inflation and the related rise in
interest rates) and the new developments in the insurance
industry – cyber risk and other major risks – are resulting in
a shift in our underlying position. The external parameters
have changed markedly since we launched Simply Safe:
Season 2, making it necessary to reassess our strategic path
in order to ensure our strategy has the right focus. Following
a review, we have decided to concentrate on the business
activities that form part of our core business and to not carry
out any further new investment in our ecosystem strategy,
which means no new long-term equity investments in the
Home and Mobility ecosystems. The next step is to draw up
a strategy that takes account of the new overall situation.
We will present the focus of the upcoming strategic phase
at the Investor Day on 12 September. All in all, we believe
that the operational excellence of our core business creates
potential for sustained profitability and growth.
In our current strategic phase, we are confident of
achieving our cash remittance target of CHF 2 billion by the
end of 2025 (31 December 2023: CHF 964 million). We regard
our employee target as very ambitious, but we made clear
progress last year (2023: top 29 per cent). Our employees are
and will remain key in harnessing our potential for profita-
bility and growth. The strategic target of attracting 1.5 million
new customers by 2025 is now unlikely to be achievable,
especially as we will not be entering into any further new
long-term equity investments under the ecosystem strategy.
Increased dividend thanks to high level of cash
remittance
The operating business was affected by higher than average
costs for claims in 2023. However, part of our core business is
being able to cope with an exceptionally high level of claims
incurred from time to time, and our business is built on solid
foundations. We maintain a good level of capitalisation and
have further improved our cash remittance, which is not
impacted by the new accounting standards. At the Annual
General Meeting, the Board of Directors of Baloise Holding
Ltd will therefore propose that the dividend be increased
by CHF 0.30 to CHF 7.70, representing a continuation of our
dividend policy.
The insurance business is underpinned by a profitability
and growth strategy with a long-term focus that ensures
sustained business performance. Thanks to this business
model, insurance companies are among the oldest of all
companies. Not only do we create value for shareholders,
but we are also a stabilising force for national economies.
Given the promises – including some long-term commit-
ments – that we have made to our customers, we have to
take a long-term view when it comes to managing the prof-
itability and growth of our business. By taking on risks, we
support the growth not only of our retail and SME customers
but also of large companies that we have been supporting
for decades. After all, our insurance services based on the
principle of risk-sharing help to make communities more
resilient and contribute to a more equitable society. We have
been successfully doing this for more than 160 years, even
6
Baloise Group Annual Report 2023 Baloise
though we have often had to realign our strategy or rein-
vent ourselves during this time. Baloise will continue to take
account of economic, societal and political circumstances
even in the face of the current overall situation.
Basel, March 2024
Dr Thomas von Planta
Chairman of the
Board of Directors
Michael Müller
Group CEO
’We believe that the
operational excellence
of our core business
creates potential for
sustained profitability
and growth.’
Dr Thomas von Planta, Chairman of the Board of Directors (left), and Michael Müller, Group CEO (right)
7
Baloise Group Annual Report 2023
Review of operating
performance
Baloise strengthens its core business –
higher cash remittance and growing
dividend
Annual financial results in brief
Profit and business volume
Insurance business
Asset Management & Banking
Capitalisation and cash remittance
Outlook
Consolidated income statement
Consolidated balance sheet
Key figures insurance business
Banking activities
Investment performance (insurance)
10
10
11
12
14
15
15
16
17
18
21
22
9
Baloise Group Annual Report 2023 Review of operating performance
Baloise strengthens its core business
– higher cash remittance and growing
dividend
The name Baloise has stood for customer relationships based on trust for
more than 160 years. In 2023, we protected more than 10,000 customers
from serious financial losses resulting from natural disasters in Switzerland.
This weighed heavily on our business performance and lead to a spike
in large claims. Our job as an insurance company is to be able to cope
with even an exceptionally high volume of claims. That is our purpose
and it is why we create strong foundations on which to operate our busi-
ness. It is therefore important that these foundations remain solid over
the long term. This is why we are channelling our efforts into strengthening
our core business and improving our financial results. Going forward, we
will concentrate even more on our core purpose of generating added
value for investors, customers, partners and employees. To do so, we will
refresh our strategy – especially where innovation is concerned. Following
a review of our ecosystem strategy, we have decided not to invest any
further in expanding this approach. We are narrowing our focus on the
core business and keeping operational excellence at the forefront of
what we do.
Annual financial results in brief
● Profit attributable to shareholders for 2023 amounted
(2022: 92.9 per cent).
● The combined ratio of the Group was 92.0 per cent
to CHF 239.6 million (2022: CHF 247.8 million). Year-
on-year increases in contributions from Belgium and
Germany largely offset a dip in profit in Switzerland.
A high volume of natural disasters and major loss
events had an extremely adverse impact of just over
CHF 200 million on profit before taxes.
● In local currency terms, the business volume edged up
by 0.8 per cent. In Swiss francs, the volume of business
was down by 0.9 per cent at CHF 8,618.1 million owing
to a lower volume of premiums in the traditional life
insurance business and unfavourable currency effects
(2022: CHF 8,697.5 million).
● Profit before borrowing costs and taxes (EBIT) in the
non-life business amounted to CHF 134.0 million
(2022: CHF 99.4 million) as a result of the exceptionally
high impact of claims.
● The level of gross premiums in the life business reflected
the continuing trend towards partially autonomous
occupational pension solutions. As a result, the volume
of premiums in the traditional life insurance business
fell by 5.2 per cent year on year to CHF 3,648.0 million
(2022: CHF 3,848.1 million). Individual life insurance in
Switzerland generated good growth of 1.5 per cent.
● In the non-life business, the volume of premiums rose
by a very healthy 5.4 per cent in local currency terms
to CHF 4,081.6 million (2022: CHF 3,958.7 million). In Swiss
francs, the increase was just over 3.1 per cent.
● The new business margin in the life business stood at
6.5 per cent in 2023 (2022: 6.7 per cent). The interest
margin improved to 137 basis points (2022: 117 basis
points) thanks to a rise in current income.
10
Baloise Group Annual Report 2023 ● EBIT attributable to the life business came to CHF 178.5
million, which was down on the strong prior-year figure
(2022: CHF 259.8 million). The decline in EBIT was due to
reductions in the contractual service margin (CSM) and
a rise in costs.
● The recent optimisation of a Belgian life insurance
portfolio, which is now in run-off, is expected to release
an amount of cash in the mid-double-digit millions
in 2024.
● The asset management business registered growth
in third-party assets of 19.0 per cent or CHF 2.4 billion,
of which CHF 1.2 billion was attributable to net new
assets.
● EBIT for Asset Management & Banking rose to CHF 82.3
million (2022: CHF 64.4 million). This is attributable to
a bigger contribution from the banking segment, where
the increase in interest rates had a positive impact on
business.
● Baloise maintained a very good level of capitalisation.
Despite the repayment of a subordinated bond, lower
interest rates resulting from negative macroeconomic
effects and a stronger Swiss franc, we expect the
SST ratio as at 1 January 2024 to be around 210 per cent
(1 January 2023: 240 per cent). Comprehensive equity
stood at CHF 7,170.9 million as at 31 December 2023
(30 June 2023: CHF 7,373.5 million). Standard & Poor’s
confirmed its A+ rating for the Baloise Group in
August 2023.
● In 2023, cash remittance increased by 4.7 per cent to
CHF 493 million (2022: CHF 471 million). The Board
of Directors intends to propose to the Annual General
Meeting that the dividend be increased by CHF 0.30
to CHF 7.70 per share.
● Baloise has reviewed its ecosystem strategy in respect
of the Home and Mobility ecosystems and decided
not to invest any further in expanding them. In future,
we will concentrate more on insurance-related activities
and on generating profits from our current portfolio of
innovations.
Profit and business volume
Claims incurred place an exceptionally heavy burden
on profit; business volume remains stable with growth
in target segments
Profit attributable to shareholders for 2023 amounted to
CHF 239.6 million, a year-on-year fall of 3.3 per cent (2022:
CHF 247.8 million). Profit was impaired by increased costs
and currency effects in 2023. Additionally, profit in the non-life
business was adversely affected by substantially
Review of operating performance
higher claims incurred as a result of natural disasters and
major loss events. These influences are also reflected in the
Group’s profit before borrowing costs and taxes (EBIT), which
declined by 6.0 per cent compared with the prior year to CHF
344.4 million (2022: CHF 366.4 million). The biggest contribu-
tion to EBIT came from business in Switzerland at CHF 166.2
million. This figure was much lower than in the prior year
due to the high level of claims incurred. The companies in
Germany and Belgium, in particular, made a positive contri-
bution to the Group’s EBIT, however, generating much higher
EBIT year on year of CHF 93.6 million and CHF 111.7 million
respectively. This is testimony to the Group’s diversification
and optimisation efforts over the past few years. Thanks to
these efforts, a Belgian run-off life insurance portfolio with
reserves of around EUR 900 million was recently secured by
means of a reinsurance solution. We expect this optimisation
to result in the release of an amount of cash in the mid-dou-
ble-digit millions in 2024.
The Group’s business volume was slightly lower than in
the prior year at CHF 8,618.1 million (2022: CHF 8,697.5 million).
The decrease of 0.9 per cent was attributable to the life busi-
ness, specifically the ongoing shift in occupational pensions
towards partially autonomous solutions. In local currency
terms, the rate of growth was modest at 0.8 per cent. Non-life
business partly made up for this decline with solid growth of
3.1 per cent in Swiss francs or 5.4 per cent in local currency
terms. The volume of investment-type premiums remained
at the good level of the prior year.
Business volume
CHF million
2023
2022
+/– %
Total business volume
8,618.1
8,697.5
– 0.9
Gross premiums written
Non-life
Gross premiums written
Life
Investment-type
premiums
4,081.6
3,958.7
3.1
3,648.0
3,848.1
– 5.2
888.5
890.7
– 0.2
Business volume in 2023 (gross)
by strategic business unit*
46.7 % Switzerland
15.3 % Germany
24.2 % Belgium
13.2 % Luxembourg
* 0.6 % group business
11
Baloise Group Annual Report 2023
Review of operating performance
Insurance business
Development of combined ratio
Good growth in non-life business
Last year was exceptional in light of the very high volume of
natural disaster claims and large claims incurred. Net of rein-
surance, these claims were just over CHF 200 million higher
than the average for previous years. Besides the high volume
of natural disaster claims, which were primarily caused by
storms in Switzerland, major individual loss events meant
that Baloise incurred exceptionally high expenses for its
customers.
Growth in the volume of premiums in this business was at
the good level of 3.1 per cent in Swiss francs or 5.4 per cent
in local currency terms. All business units contributed to this
growth, which increased gross premiums written in the non-life
business to CHF 4,081.6 million (2022: CHF 3,958.7 million). The
increases in premiums that were introduced due to inflation
also contributed to this healthy growth.
The Belgian unit registered the largest volume of non-life
business with a total value of CHF 1,589.7 million. This amounted
to growth of 3.3 per cent in Swiss francs or 6.8 per cent in local
currency terms (2022: CHF 1,538.9 million).
In Switzerland, Baloise expanded its non-life portfolio by 2.7
per cent to CHF 1,468.7 million (2022: CHF 1,430.8 million).
In Germany, premiums in non-life business grew by 2.9 per
cent in Swiss francs or 6.4 per cent in local currency terms to
CHF 816.5 million (2022: CHF 793.8 million).
Baloise generated the strongest growth in non-life business
in Luxembourg, at 9.1 per cent in Swiss francs or 12.8 per cent
in local currency terms. The total volume of premiums came to
CHF 154.6 million for 2023 (2022: CHF 141.8 million).
Despite the considerable rise in large claims incurred, which
took an exceptionally heavy toll on the combined ratio of just
over 5 percentage points, this ratio improved by a modest
0.9 percentage points overall to 92.0 per cent. The reason for
the improvement is that the prior year’s ratio was adversely
affected by the inflation-related strengthening of reserves
by around CHF 120 million. Following a fall in inflation, CHF
79 million of this amount was reversed to income in 2023. The
combined ratio also benefited from higher discounting effects
than in 2022.
12
92.0%
92.9%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2023
2022
Profit before interest and tax (EBIT) in the non-life business
amounted to CHF 134.0 million (2022: CHF 99.4 million) as a
result of these effects in 2023.
The gains or losses on investments in the non-life segment
improved by approximately CHF 18 million year on year to a
net gain of CHF 102.8 million. Current income climbed to CHF
196.8 million, a rise of CHF 41.5 million. This was partly offset
by the effects of the much weaker euro and US dollar and the
increased cost of currency hedging. The losses recognised in
the income statement came to CHF 68.7 million, up by CHF
26.1 million on the prior year. This deterioration was mainly
due to increases in the value of property in 2022 that were not
repeated in 2023. The gains and losses recognised in other
comprehensive income (OCI) amounted to a net gain of CHF
332.6 million and were heavily influenced by the uptrend in the
mortgages and other loans asset class. Overall investment
performance stood at 4.6 per cent, which was much higher than
in the difficult prior year (2022: minus 9.5 per cent).
Growth in investment-type premiums and solid new
business margin in the life business
The business volume in the life business (gross premiums
written and investment-type premiums) fell by 4.3 per cent
to CHF 4,536.5 million (2022: CHF 4,738.8 million) owing to the
smaller volume of premiums written in the Swiss group life
business and in the Belgian life business. In local currency
terms, the decrease was 3.0 per cent.
As a result, premiums in the life business dropped by
5.2 per cent to CHF 3,648.0 million overall (2022: CHF 3,848.1
million), predominantly due to business in Switzerland and
Belgium. Adjusted for currency effects, the decrease was
4.3 per cent. In the Swiss life business, we saw a reduction of
3.5 per cent to CHF 2,513.4 million that was attributable to
a reduced volume of group life business (2022: CHF 2,603.3
million). In Germany, we registered slight growth in gross
premiums of 1.1 per cent to CHF 499.8 million in local currency
terms. In Belgium and Luxembourg, the volume of life busi-
ness declined by 7.9 per cent to CHF 482.0 million and by 19.2
per cent to CHF 152.8 million respectively (in local currency
terms). This was due to uncertainty surrounding Belgian tax
legislation and geopolitical and macroeconomic impacts
Baloise Group Annual Report 2023
Review of operating performance
Key figures for the national companies
Key figures for Switzerland
Key figures for Belgium
2023
2022
+/– %
2023
2022
+/– %
CHF million
Business volume
of which: Non-life
of which: Life 1
Combined ratio
(per cent)
Profit before borrowing
costs and taxes
CHF million
4,025.7
1,468.7
2,557.0
4,068.8
1,430.8
2,638.0
– 1.1
Business volume
2.7
– 3.1
of which: Non-life
of which: Life 1
2,085.7
1,589.7
496.0
2,100.9
1,538.9
– 0.7
3.3
562.0
– 11.7
98.4
95.1
3.3
166.2
289.6
– 42.6
Combined ratio
(per cent)
Profit before borrowing
costs and taxes
85.8
95.6
– 9.8
111.7
– 7.2
n. a.
Key figures for Germany
Key figures for Luxembourg
CHF million
CHF million
2023
2022
+/– %
2023
2022
+/– %
Business volume
1,316.3
1,304.8
Business volume
1,138.3
1,169.6
0.9
2.9
793.8
511.0
of which: Non-life
– 2.2
of which: Life 1
154.6
983.6
141.8
1,027.8
– 2.7
9.1
– 4.3
of which: Non-life
of which: Life 1
Combined ratio
(per cent)
Profit before borrowing
costs and taxes
1 Including investment-type premiums.
816.5
499.8
88.7
93.6
Assets held by Baloise
as at 31 December 2023
CHF million
Investments for own account and at own risk
Asset portfolio for the account and at the risk
of customers and third parties
Total recognised assets
Third-party assets
as at 31 December 2022
CHF million
Investments for own account and at own risk
Asset portfolio for the account and at the risk
of customers and third parties
Total recognised assets
Third-party assets
1 Including Group business and elimination.
94.8
– 6.1
Combined ratio
(per cent)
73.7
27.0
Profit before borrowing
costs and taxes
89.0
18.2
74.2
14.8
14.4
26.4
Non-life
Life
Asset
Management
& Banking
Total for the
Group 1
9,391.2
41,380.7
8,654.5
58,742.3
–
15,667.4
–
16,252.8
9,391.2
57,048.0
8,654.5
74,995.1
14,993.0
Non-life
Life
Asset
Management
& Banking
Total for the
Group 1
9,429.4
42,441.3
8,441.3
59,452.9
–
14,864.8
–
15,429.4
9,429.4
57,306.1
8,441.3
74,882.2
12,627.2
13
Baloise Group Annual Report 2023 Asset Management & Banking
Healthy growth in business with third parties
As at 31 December 2023, the total assets under management
(AuM) of Baloise Asset Management stood at CHF 57.9 billion,
a rise of 3.7 per cent compared with the end of the prior year
(31 December 2022: CHF 55.8 billion). This growth was primarily
attributable to the favourable trend in business with third
parties.
There was further growth in business with third parties.
Assets under management swelled from CHF 12.6 billion to CHF
15.0 billion, with net new assets contributing CHF 1.2 billion. Net
new assets related to a number of items, including the capital
increase carried out for the Baloise Swiss Property Fund and
the continued growth of the asset management business of
Baloise Bank Ltd and of the partially autonomous collective
foundation Perspectiva.
The expanded responsible investment (RI) strategy has
been in place since 1 January 2023. Further exclusions have
been added, a best-in-class approach has been adopted
and direct company engagement has been introduced to
supplement the active ownership approach. The expanded RI
strategy applies to liquid investments, for some of the private
assets included in insurance investments and for the majority
of our funds, including fund selection. The updating of the RI
strategy took account of the EU Regulation on sustainability -
related disclosures in the financial services sector (SFDR), the
Swiss Financial Market Supervisory Authority (FINMA) Guidance
05/2021 on preventing and combating greenwashing, and the
Asset Management Association Switzerland (AMAS) require-
ments for self-regulation of transparency and disclosure for
sustainability-related collective assets. The strategy allows
us to offer a broader range of sustainability-related invest-
ment options to those of our customers with a preference for
sustainability-oriented investment solutions.
Review of operating performance
that led to more risk-averse investment behaviour on the
part of customers.
Investment-type premiums amounting to CHF 888.5
million were written in 2023. This equated to an increase of
2.6 per cent in local currency terms but a modest decrease of
0.2 per cent in Swiss francs. Our business unit in Luxembourg
made the biggest contribution to investment-type premiums
at CHF 830.8 million.
The Perspectiva collective foundation continued on its
encouraging growth trajectory in 2023. It benefited from
ongoing strong demand for partially autonomous pension
solutions and the recovery of the global financial markets.
As at the end of 2023, the Perspectiva collective foundation
was looking after 4,903 companies with around 21,500 poli-
cyholders and had assets of CHF 1.6 billion. These numbers
equate to an increase of 476 companies, 1,900 policyholders
and assets of around CHF 200 million.
EBIT in the life business fell year on year to stand at
CHF 178.5 million (2022: CHF 259.8 million). This was due to
a decrease in the contractual service margin (CSM) on the
back of adverse spread movements, currency effects and
lower valuations of properties. These factors, combined with
interest rate effects, resulted in a CHF 50 million reduction in
the amount released from the CSM. Higher costs also took
their toll on EBIT in the life insurance business.
Gains or losses on investments in the life segment
amounted to a net gain of CHF 2,318.9 million. Despite falling
investment volumes, current income increased to CHF 938
million (2022: CHF 924.8 million) thanks to further growth of
private assets and a rise in reinvestment returns. Interest
rates in Switzerland and Germany were down year on year at
the end of 2023 and the equity markets performed well, with
both these factors having a positive impact on the fair values
of fixed-income securities and equities. This provided a signif-
icant boost for profits, which amounted to CHF 1,484.6 million
in 2023. Furthermore, a positive item of CHF 122.9 million was
recognised in other comprehensive income (OCI). Overall
investment performance stood at 5.8 per cent, which was
much higher than in the prior year (2022: minus 12.9 per cent).
The new business margin in the life business was down
slightly year on year but remained solid at 6.5 per cent in 2023
(2022: 6.7 per cent). The new business margin is derived from
the contractual service margin (CSM) for new business and
is calculated relative to the present value of new business
premiums.
The interest margin, which constitutes the difference
between current income on the assets side and guarantees
on the equity and liabilities side, improved to 137 basis points
(2022: 117 basis points). The increase was mainly attributable
to investment decisions where it was possible to capitalise
on the higher level of interest rates.
14
Baloise Group Annual Report 2023 Investment components in 2023
52.8 % Fixed-interest securities
16.2 % Investment property
10.1 % Policy and other loans
7.5 % Mortgage loans
5.2 % Alternative financial investments
3.5 % Shares and funds
2.7 % Other short-term investments
2.0 % Senior secured loans
Review of operating performance
tion – which is comfortably above the AAA level according
to the S&P capital model – as well as its high operational
profitability, solid risk management and robust competitive
position in its profitable core markets. The complete report
is available at www.baloise.com/ratings.
In the Swiss Solvency Test (SST), we expect a ratio of
around 210 per cent as at 1 January 2024. The reduction was
due to repayment of a subordinated bond, lower interest
rates resulting from negative macroeconomic effects and
a stronger Swiss franc.
Although Baloise incurred exceptionally high costs for
claims in 2023, it maintained a good level of capitalisation.
Moreover, it achieved a further improvement in cash remit-
tance, which was unaffected by the accounting effects and
rose by 5 per cent to CHF 493 million (2022: CHF 471 million).
This shows that we are on track to reach our target for cash
remitted of CHF 2 billion by 2025. At the upcoming Annual
General Meeting, the Board of Directors of Baloise Holding
Ltd will therefore propose that the dividend be increased by
CHF 0.30 to CHF 7.70.
Proprietary investments by category 1
Outlook
31.12.2023
31.12.2022
+/– %
CHF million
Fixed-interest securities
26,791.1
26,332.7
Senior secured loans
Policy and other loans
Mortgage loans
Investment property
Shares and funds
Alternative financial
investments
Other short-term
investments
Total
1,011.0
5,126.1
3,807.5
8,236.7
1,774.7
1,452.6
4,398.0
3,953.0
8,483.0
3,120.8
1.7
– 30.4
16.6
– 3.7
– 2.9
– 43.1
2,641.0
2,693.9
– 2.0
1,383.7
1,436.6
50,771.8
51,870.7
– 3.7
– 2.1
1 Excluding investments for the account and at the risk of customers and third
parties.
Capitalisation and cash remittance
Higher volume of cash and a rise in the dividend to
CHF 7.70
The equity attributable to shareholders stood at CHF 3,250.0
million as at the end of 2023 (31 December 2022: CHF 3,405.2
million). The contractual service margin (CSM) after taxes
came to CHF 3,921.0 million as at 31 December 2023 (31
December 2022: CHF 4,345.7 million). Comprehensive equity
totalled CHF 7,170.9 million (31 December 2022: CHF 7,751.0
million) or CHF 157 per share. It comprises the sum of the
contractual service margin after taxes and the proportion
of equity attributable to shareholders.
Baloise’s strong capital adequacy was once again
confirmed by Standard & Poor’s in August 2023, when it reaf-
firmed its rating of A+ for the Baloise Group. S&P awarded this
credit rating in recognition of Baloise’s excellent capitalisa-
No more new investment in ecosystems – presenting
the upcoming strategic phase
On 20 September 2023, Baloise announced that it was under-
taking a strategic review of its ecosystems in light of the
changes in the business environment. The outcome of this
review is that we are ending our ecosystem strategy. This
means that we will no longer be pursuing the targets that
we had communicated in this context: a valuation of CHF
1 billion for the innovation initiatives and a total contribution
to revenue of CHF 350 million. We will also not be carrying out
any further new investment in the expansion of the ecosys-
tems.
CEO Michael Müller commented on this decision as
follows: “Following our analysis of the overall portfolio and
in view of the macroeconomic situation, we came to the
conclusion that we need to strengthen our focus on our
core business. This is where we see the best potential for
growth and income. Where possible and as appropriate,
we are bringing our partnerships in the former ecosystems
closer to our core business and improving their profitability.”
Meanwhile, we are retaining our strategic targets. We
are well on track to achieve our cash target of CHF 2 billion
(cumulative figure as at 31 December 2023: CHF 964 million).
The employee target of being among the top 5 per cent of
employers in Europe is very ambitious (31 December 2023:
top 29 per cent), but we made clear progress last year (31
December 2022: top 36 per cent). The strategic target of
attracting 1.5 million new customers is no longer achiev-
able now that we have discontinued our ecosystem strategy
(31 December 2023: 227,000). However, sustained profitable
growth in our core business remains key to our future success,
which is why we will step up our efforts.
15
Baloise Group Annual Report 2023 Review of operating performance
Consolidated income statement
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from insurance contracts
Insurance finance income and expenses from reinsurance contracts
Insurance finance income and expenses
Interest revenue calculated using the effective interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
Result from investments and financial contracts
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period
Profit attributable to:
Shareholders
Non-controlling interests
Earnings / loss per share:
Basic (CHF)
Diluted (CHF)
16
2023
2022
5,412.4
5,339.6
– 4,666.9
– 4,678.4
– 151.8
593.7
– 57.5
603.7
– 2,833.2
6,343.0
26.8
27.8
– 2,806.4
6,370.8
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
2.2
– 9.8
– 842.7
1,490.5
2,982.2
– 6,246.8
141.7
161.6
118.3
120.0
– 691.7
– 633.8
– 20.7
– 16.0
344.4
– 26.2
318.2
– 81.9
236.2
4.9
29.3
366.4
– 22.4
343.9
– 99.5
244.5
239.6
– 3.3
247.8
– 3.4
5.29
5.29
5.49
5.48
Baloise Group Annual Report 2023
Consolidated balance sheet
Review of operating performance
CHF million
Assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Investment property
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
Insurance contract assets
Reinsurance contract assets
Receivables from employee benefits
Financial receivables
Deferred tax assets
Other assets
Cash and cash equivalents
Total assets
Equity and liabilities
Equity before non-controlling interests
Non-controlling interests
Total equity
Insurance contract liabilities
Reinsurance contract liabilities
Liabilities arising from financial contracts
Financial liabilities
Non-technical provisions
Derivative financial instruments
Deferred tax liabilities
Other liabilities
Total liabilities
31.12.2023
31.12.2022
01.01.2022
636.1
214.8
318.1
8,248.6
14,932.9
32,153.4
15,602.3
1,072.6
68.4
450.5
6.3
727.2
207.1
249.1
594.6
237.4
344.7
560.0
265.8
316.0
8,495.1
8,464.5
16,276.7
19,172.6
31,264.6
38,216.3
14,665.8
16,193.2
809.3
43.0
614.6
7.3
600.6
239.3
430.8
896.1
–
767.8
5.9
621.8
177.6
206.3
2,985.3
3,370.8
4,073.5
77,872.8
77,994.6
89,937.2
3,250.0
3,405.2
4,170.6
9.3
12.2
14.2
3,259.3
3,417.4
4,184.7
49,819.5
49,753.3
58,947.0
2.5
67.5
–
19,936.3
19,839.7
21,878.8
2,391.3
2,609.4
2,425.7
111.9
83.4
419.4
112.5
135.8
380.6
136.4
89.4
468.1
1,849.1
1,678.3
1,807.1
74,613.5
74,577.1
85,752.5
Total equity and liabilities
77,872.8
77,994.6
89,937.2
17
Baloise Group Annual Report 2023 Review of operating performance
Key figures insurance business
Business volume
The business volume of the Baloise Group comprises the gross premium income from non-life and life insurance recog-
nised during the reporting period and the payments from policyholders in business involving financial contracts and
investment-linked life insurance policies. Unlike insurance revenue, it includes savings premium components and thus is
generally higher for life insurance.
2023
CHF million
Gross premiums written Non-life
Gross premiums written Life
Investment-type premiums
Total business volume
2022
CHF million
Gross premiums written Non-life
Gross premiums written Life
Investment-type premiums
Total business volume
Group 1 Switzerland
Germany
Belgium Luxembourg 2
4,081.6
3,648.0
888.5
8,618.1
1,468.7
2,513.4
43.6
816.5
499.8
–
1,589.7
482.0
14.1
154.6
152.8
830.8
4,025.7
1,316.3
2,085.7
1,138.3
Group 1 Switzerland
Germany
Belgium Luxembourg 2
3,958.7
3,848.1
890.7
1,430.8
2,603.3
34.7
793.8
511.0
–
1,538.9
540.9
21.1
141.8
192.9
834.9
8,697.5
4,068.8
1,304.8
2,100.9
1,169.6
Insurance revenue
Insurance revenue is the amount that reflects the consideration to which an insurance company expects to be entitled in
exchange for the provision of services under insurance contracts.
Group 1 Switzerland
Germany
Belgium Luxembourg 2
4,013.0
1,399.4
5,412.4
1,446.5
993.9
808.5
257.6
1,561.8
128.4
2,440.4
1,066.0
1,690.3
152.9
19.7
172.6
Group 1 Switzerland
Germany
Belgium Luxembourg 2
3,936.5
1,403.1
5,339.6
1,426.8
989.2
791.9
218.4
1,534.2
162.3
2,416.1
1,010.3
1,696.6
139.8
32.5
172.2
2023
CHF million
Insurance revenue Non-life
Insurance revenue Life
Total insurance revenue
2022
CHF million
Insurance revenue Non-life
Insurance revenue Life
Total insurance revenue
1 Including Group business.
2 Including Baloise Life Liechtenstein.
18
Baloise Group Annual Report 2023 Review of operating performance
Combined ratio
The combined ratio is used to gauge the profitability of non-life insurance business. 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.
2023
as a percentage of the insurance revenue
Loss ratio 1
Expense ratio
Combined ratio
2022
as a percentage of the insurance revenue
Loss ratio 1
Expense ratio
Combined ratio
1 Including net reinsurance income / expense.
Group Switzerland
Germany
Belgium Luxembourg
64.6
27.4
92.0
75.7
22.7
98.4
56.4
32.3
88.7
57.3
28.5
85.8
57.2
31.8
89.0
Group Switzerland
Germany
Belgium Luxembourg
65.1
27.8
92.9
72.3
22.8
95.1
59.8
35.0
94.8
67.1
28.5
95.6
46.3
27.9
74.2
New business margin
The new business margin is used to measure the profitability of new business in the life segment.
CHF million
Value new business
Present value new business premium (PVNBP)
New business margin
2023
2022
177.4
2,748.6
6.5 %
200.9
3,015.0
6.7 %
19
Baloise Group Annual Report 2023 Review of operating performance
Insurance revenue by sector
The Baloise Group’s insurance revenue in the non-life business is presented below, broken down by sector.
CHF million
Motor
General liability
Accident
Health
Property
Marine
Other
Non-life insurance revenue by sector
2023
2022
+/– %
1,246.1
1,252.5
– 0.5
379.3
446.6
181.4
368.9
423.6
179.6
1,382.7
1,330.5
250.5
126.3
259.8
121.6
4,013.0
3,936.5
2.8
5.4
1.0
3.9
– 3.6
3.9
1.9
CSM development
The following table shows the material factors affecting the change in the CSM in the Baloise Group. The CSM represents
the unearned profit of a group of insurance contracts that an entity will recognise as it provides insurance contract services
in the future.
2023
2022
5,391.8
6,010.2
113.8
167.0
– 406.4
– 149.2
– 252.3
4,864.8
16.9
200.8
– 767.4
233.6
– 302.4
5,391.8
CHF million
Balance as at 1 January
Expected business contribution
New business CSM
Economic variances
Operating variances
CSM release
Balance as at 31 December
20
Baloise Group Annual Report 2023 Banking activities
The tables below provide an overview of banking activities.
Profit or loss from banking activities
CHF million
Interest revenue calculated using the effective
interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
Result from investments and financial contracts
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Additional information
CHF million
Third-party assets
Asset allocation
CHF million
Investment property
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
Cash and cash equivalents
Total
Review of operating performance
2023
2022
140.3
0.5
18.4
1.1
– 69.0
91.4
162.8
14.7
– 186.5
– 0.1
–
82.3
0.0
82.2
– 12.6
69.6
71.8
12.8
– 43.1
– 0.4
29.4
70.4
160.5
15.2
– 181.7
0.0
–
64.4
0.0
64.4
– 10.0
54.4
31.12.2023
31.12.2022
14,993.0
12,627.2
31.12.2023
31.12.2022
–
23.0
123.1
–
17.8
109.1
7,514.8
7,319.2
39.3
954.4
72.4
922.9
8,654.5
8,441.3
21
Baloise Group Annual Report 2023
Review of operating performance
Investment performance (insurance)
The tables below provide an overview of the investment performance of the Baloise Group’s insurance business, broken
down into non-life and life.
Non-life
CHF million
Fixed-income securities
Equities and funds
Investment property
Mortgages and loans 2
Derivative financial instruments
Total before investment expenses
Investment expenses
Investment income
Average investments
Yield
Life
CHF million1
Fixed-income securities
Equities and funds
Investment property
Mortgages and loans 2
Derivative financial instruments
Total before investment expenses
Investment expenses
Investment income
Average investments
Yield
2023
2022
Gains and
losses
through
income
statement 3
Total
investment
income in
income
statement
Gains and
losses
through other
comprehen-
sive income
Total
investment
income (P&L
and OCI)
Total
investment
income (P&L
and OCI)
Current
investment
income
95.2
26.6
36.3
38.7
–
196.8
9,410.3
2.1 %
– 73.2
– 8.8
1.6
0.7
11.0
– 68.7
22.0
17.8
37.9
39.5
11.0
128.1
– 25.3
102.8
9,410.3
1.1 %
274.8
296.7
– 851.7
4.4
–
28.3
25.1
332.6
22.2
37.9
67.8
36.1
460.7
– 25.3
435.4
– 40.7
64.9
– 94.2
– 0.4
– 922.2
– 28.0
– 950.2
9,410.3
10,053.1
4.6 %
– 9.5 %
2023
2022
Gains and
losses
through
income
statement 3
Total
investment
income in
income
statement
Gains and
losses
through other
comprehen-
sive income
Total
investment
income (P&L
and OCI)
Total
investment
income (P&L
and OCI)
Current
investment
income
489.8
83.0
243.2
122.0
–
1,227.1
1,716.9
76.8
– 73.4
130.9
123.2
159.8
169.8
252.9
123.2
938.0
1,484.6
2,422.6
30.1
– 0.1
–
–
93.0
122.9
41,911.0
2.2 %
– 103.7
2,318.9
41,911.0
5.5 %
1,747.0
– 5,514.0
159.7
169.8
252.9
216.1
– 122.7
456.6
– 720.9
2.5
2,545.5
– 103.7
– 5,898.5
– 111.3
2,441.8
– 6,009.9
41,911.0
46,660.9
5.8 %
– 12.9 %
1 Excluding investments for the account and at the risk of customers and third parties.
2 Including cash.
3 Including change in expected credit loss.
22
Baloise Group Annual Report 2023 Review of operating performance
Asset allocation – average for the period
CHF million
Fixed-income securities
Equities and funds
Investment property
Mortgages and loans 1
Derivative financial instruments
Total
2023
2022
Non-life
Life 2
Total
Non-life
Life 2
Total
5,191.4
23,884.8
29,076.2
989.7
1,030.7
2,173.9
24.6
2,843.1
7,329.2
7,455.6
398.3
3,832.8
8,359.8
9,629.5
422.9
5,428.5
1,333.2
1,023.5
2,248.6
19.3
27,089.4
32,517.8
3,542.9
7,444.2
8,104.2
480.3
4,876.1
8,467.8
10,352.8
499.6
9,410.3
41,911.0
51,321.2
10,053.1
46,660.9
56,714.1
1 Including cash.
2 Excluding investments for the account and at the risk of customers and third parties.
23
Baloise Group Annual Report 2023 Risk management
Risk management;
a key pillar of our value creation
Risk management system and risk culture
Compliance with regulatory obligations and
disclosure requirements
Risk management
28
29
29
30
What do we mean by sustainability and climate risks? 30
Integration and assessment of sustainability risks
in the risk management process
Inclusion of sustainability criteria in our investment
and underwriting policy
External view of capitalisation and risk management
30
31
31
Baloise Gruppe Geschäftsbericht 2023
25
Risk management
Risk management;
a key pillar of our value creation
Risk management objectives
● Identification and measurement of key risks
● Compliance with all external requirements
Impact of risk management
● Understanding current and future risks
● Ensuring stability and the proper functioning
regarding risk management
of business operations at Baloise
● Carefully considered management of opportunities,
● Enhancing risk awareness at all levels of
taking account of the risks
the organisational structure
● Involvement of our employees from different
departments and operating segments in the risk
management system
● Active communication about the risk situation
● Integration of sustainability risks and climate risks into
the risk management system and in the investment
and underwriting process
● Providing transparency about risks taken
● Reducing sustainability and climate risks and
contributing to society and environmental
protection in positive ways
Risk management is a key element of a sustainability-focused
corporate governance system and, as such, plays an important
role in adding value for all our stakeholders. 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. The main tasks of risk manage-
ment are to satisfy the statutory and regulatory requirements
applicable to Baloise and to optimise the risk/return ratio.
It thus involves managing risk and value and is based on inno-
vative standards so that we can always keep our promise to
our customers and maintain and increase value for our stake-
holders in the long term.
The Baloise Board of Directors exercises ultimate super-
visory authority over the operational management of the
Company and the Group and is thus responsible for mana-
ging risk and ensuring compliance with the relevant laws.
It appoints the Strategy and Governance Committee to exer-
cise this function, alongside the Audit Committee and the
Investment and Risk Committee. The duties of the Strategy
and Governance Committee include acting as the advisory
committee for sustainability matters (see ’Sustainability gover-
nance’ chapter, page 24 onwards)
The Corporate Executive Committee has overall responsibi-
lity for developing a detailed risk management concept, which
is implemented by the central risk management function of the
Baloise Group and by the local risk management teams at the
level of the strategic business units. At Group level and locally,
the risk management teams are supported by risk committees,
which meet regularly.
● Risk governance and risk culture
Standards that apply across the Group form the back-
bone 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 opera-
tional risk arising from business activities. The detailed
risk map can be found on pages 192 and 193 of the
2023 Financial Report. Risk awareness is encouraged
and embedded throughout the organisation. One way
in which we achieve this is by involving our employees
from different departments and operating segments
in the risk management system, for example in the
assessment of risks and in the allocation of responsibi-
lity for risks.
● Risk measurement
At Baloise, risk is identified and quantified in all busi-
ness and financial processes according to common
internal standards. This enables appropriate priorities
to be set for our senior management in respect of
the risks taken on.
● Risk processes
Leadership, reporting and evaluation processes are
supported by risk processes in order to ensure that
the risk perspective is factored into all important
business decisions.
● Risk reporting
Our risk management is a standardised strategic and
operational system that is applied throughout the Baloise
Group and covers the following areas:
Risk reporting ensures that the current risk situation
is presented transparently in our internal and
external communications.
26
Baloise Group Annual Report 2023 ● Risk management
Risks are managed and mitigated carefully in keeping
with the defined risk tolerance. Upside potential is
optimised with due consideration of the risks, resulting
in sustainable value creation for Baloise’s investors.
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 our strategic risk management approach.
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 managed and unwanted risks are actively
reduced for us and for our stakeholders.
A key part of our risk management system is the identifi-
cation and assessment of risks. Group-wide individual risks
are plotted on the risk map according to their likelihood and
their expected impact. A corporate database of specific risks
– containing a detailed description of the risks concerned,
their position on the risk map, early-warning indicators
and their 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
(responsible 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 consequences for us and our stakeholders
to be identified at an early stage and mitigated in a targeted
manner. Strategic decision-makers are brought into the risk
assessment process, along with system managers, process
managers and specialists, which creates risk awareness and
a risk culture among our employees.
Compliance with regulatory obligations and
disclosure requirements
By complying with regulatory obligations and disclosure
requirements in risk management, we show that we are a
reliable partner to regulatory authorities, customers, inves-
tors 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. This helps it to monitor risk and
provide regular reports on its risk and solvency situation to
the regulators. Fulfilment of these requirements ensures that
we reduce unwanted risks to the greatest possible extent
and remain solvent even under adverse circumstances so
that we can always meet our obligations to customers.
Risk management
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. This combination of quantitative risk measu-
rement and analysis of specific risks as described above
ensures that we have an adequate overview of the prevai-
ling risk situation at all times. The overall risk situation is
presented in the Own Risk and Solvency Assessment and
discussed with the decision-makers as a basis for developing
appropriate action plans.
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
processes in order to support the Company in achieving
its goals. In implementing the internal control system, we
are 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 ope-
rations and thus to the success of the Company. Using the
internal control system, we can identify risks for our stake-
holders at an early stage and effectively mitigate them.
Disclosures made in the financial condition report (Baloise
Group and its Swiss companies) and the Solvency and Finan-
cial Condition Report (European Economic Area) inform the
market, investors and customers 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.
Our risk management team proactively participates in
discussions with our partners, thereby contributing to society
and to a better understanding of the future risks for the insu-
rance industry. Baloise is a member of the Swiss Insurance
Association (SIA), for example. We fulfil our responsibilities
through our work with the association, and also in direct
cooperation with the regulatory authorities, by providing
support in the form of data, analyses and assessments for
industry surveys about specific issues and for use in the
ongoing development of the regulatory system.
27
Baloise Group Annual Report 2023 Risk management
Risk management
The ongoing optimisation of income through risk/return
criteria as part of strategic risk management will secure
the long-term stability of Baloise and be of benefit to our
customers and investors.
Our risk models, which use quantitative methods to
assess all business risks and financial market risks in all stra-
tegic units, form the basis for strategic discussions about
risk appetite. Strategic risk management within the scope
of the defined risk appetite offers a clear picture of the risks
involved in opening up new business lines and of how to opti-
mise the risk/return profile of existing business. In the area
of investment, for example, we aim to achieve the highest
possible expected return with the lowest possible risk. This
will ensure long-term stability, benefiting both our customers
and our investors.
What do we mean by sustainability and
climate risks?
Baloise bases the classification of sustainability and climate
risks on commonly used frameworks. Sustainability risks are
classified as pertaining to the environmental, social or corpo-
rate governance (ESG) dimensions.
● ’Environmental’ refers to all risks relating to the environ-
ment and climate change.
● ’Social’ refers to trends and developments that affect
the whole of society or certain population groups.
● ’Governance’ covers all matters that relate to the way
Baloise and its affiliated companies are run.
Based on the commonly used typology, climate risks, which
are an important subcategory of environmental risks, are
further subdivided into:
● Physical risks
In the short term, physical climate risks arise in the
form of natural disasters. But especially in the medium
and long term, climate change will give rise to further
risks arising from the increasing prevalence of natural
phenomena such as hurricanes, floods, hailstorms and
fires. Chronic risks with long-term effects, such as rising
sea levels, represent potential emerging risks, especi-
ally as they are expected to have an adverse impact on
investments and insured business in low-lying regions.
● Transition risks
In the short term, changes in the expectations of stake-
holders with regard to sustainability – and the resulting
shift in demand for financial and insurance products
– will create competition risks if we do not respond
28
appropriately. Moreover, an unexpectedly strong fall
in demand in respect of certain companies or sectors
in which we have invested could lead to market risks
(stranded assets). There is a risk in the medium term
that these circumstances are not adequately factored
into strategic decisions and that suitable adjustments
are not made to our product range. It is also important
to consider technological developments in connection
with the transition to a lower-carbon economy. Risks
could also arise for Baloise in the longer term if compa-
nies are increasingly held liable for the environmental
damage they cause, for example due to pollution,
endangering of biodiversity or breaches of environ-
mental standards.
Integration and assessment of sustainability
risks in the risk management process
As the identification, documentation and evaluation of
sustainability risks and climate risks in our risk management
framework progresses, our 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 our customers and investors and
will reduce the Company’s environmental impact.
To integrate sustainability aspects, we first identified
various sustainability risk clusters (e. g. storm and flood disas-
ters) and, working closely with the underwriting, investment
and actuarial departments, used the findings to determine
any potential or actual risks. We then added the material
risks identified by means of this process to our Group-wide
frameworks. These are evaluated as part of the Own Risk
and Solvency Assessment along the risk map within the
established risk categories used by insurance companies,
banks and asset management companies, such as actuarial
risk or credit risk and market risk. In addition, sustainability
aspects that are of strategic relevance in terms of risk are
addressed as a separate risk type in the context of the busi-
ness strategy.
Although sustainability risks are predominantly evaluated
on a qualitative basis in ORSA, we also have other esta-
blished quantitative processes and methods, such as natural
disaster analysis, that we regularly use in collaboration with
our reinsurance brokers.
Within ORSA, we analyse sustainability and climate risks
over a short-term horizon (around one year), a medium-
term horizon (between one and five years) and a long-term
horizon (more than five years). The assessment is integrated
into the usual ORSA risk measurement processes. The resul-
ting risk situation is discussed in detail with the Corporate
Executive Committee and its committees – primarily the
Risk Committee – and signed off by the Board of Directors.
The integration of sustainability risks into existing risk
management processes ensures that the results of regular
analyses and assessments are incorporated into our stra-
Baloise Group Annual Report 2023 tegic risk management approach and that this approach
is adequate for dealing with these risks. In addition, general
risk awareness is strengthened through the involvement of
our employees from different departments and operating
segments. This ongoing integration of sustainability risks
and climate risks into our management of risk constitutes
an important step in implementing the recommendations
of the Task Force on Climate-related Financial Disclosures
(TCFD) (see page 295 TCFD references).
Inclusion of sustainability criteria in our
investment and underwriting policy
By embedding sustainability criteria in our investment and
underwriting policy as part of our strategy, the risks for our
customers and investors are reduced and opportunities are
identified so that a positive contribution to society and envi-
ronmental protection can be achieved.
By integrating ESG factors into our investment process,
we are making a positive contribution to the environment,
society, investors and customers. This is being achieved as
part of Baloise’s responsible investment strategy, which
incorporates the climate strategy and active ownership
strategy applicable to asset management. We are reducing
investment risks in the long term by investing in companies
whose management of ESG risks is categorised as good.
These companies are more resilient in times of crisis and,
in particular, can minimise downside risks. This benefits the
environment and society as a whole, as these companies
reduce their negative impact or even generate a positive
impact. Our customers and investors benefit indirectly from
the positive impact on society as a whole and directly from
the potential long-term positive effects of this investment
strategy on the risk/return ratio.
www.baloise.com/sustainability
Our underwriting policy also increasingly takes account of
sustainability criteria, especially in new insurance business
with industrial and large corporate customers. In addition,
we see ourself as a reliable partner for customers whose
business model is currently undergoing a transformation.
We have launched a process in product management that
identifies market-specific opportunities in the field of sustai-
nability that can then be addressed through products and
services. This allows us to make a positive contribution to
society and environmental protection through our core
business (see chapter ’Responsible underwriting’, page 306
onwards).
By embedding sustainability criteria in our investing and
underwriting policy in this way, the environmental, social and
corporate governance risks can be given equal considera-
tion. Anti-corruption measures fall under compliance (Bribery
and Corruption Policy), which is explained in the ’Compliance’
chapter, while respect for human rights forms part of the
Code of Conduct, which is discussed in the same chapter.
Risk management
External view of capitalisation and risk
management
Baloise’s capitalisation is also highly rated from an external
perspective. The Standard & Poor’s rating of A + with a stable
outlook is evidence that our excellent capitalisation is also
recognised by third parties. Standard & Poor’s also takes a
favourable view of our 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
29
Baloise Group Annual Report 2023 Corporate
Governance
Corporate Governance Report
1. Structure of the Baloise Group and
shareholder base
2. Capital structure
3. Board of Directors
4. Corporate Executive Committee
5. Remuneration, shareholdings and loans
6. Shareholder participation rights
7. Changes of control and poison-pill measures
8. External auditors
9. Information policy
Appendix 1: Remuneration Report
Appendix 2: Report of the external auditor for the
Annual General Meeting of Baloise Holding Ltd, Basel
31
32
33
35
44
46
46
47
47
48
51
72
31
Baloise Group Annual Report 2023 Corporate Governance
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 economiesuisse’s
Swiss Code of Best Practice and the SIX Swiss Exchange
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 29 June 2022 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, 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 51
onwards).
The information contained in the Corporate Governance
Report refers to the situation on the balance sheet date (31
December 2023). 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. In addition to the information provided in
the Corporate Governance Report, governance structures –
both general and relating to specific areas – are described
in more depth in the sustainability section of the Company’s
Annual Review.
1. Structure of the Baloise Group and
shareholder base
Structure of the Baloise Group
Headquartered in Basel, Switzerland, Baloise Holding Ltd 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 6,036.4 million as at
31 December 2023.
● Information on Baloise shares can be found in the
Annual Review from page 38 onwards.
● Significant subsidiaries, joint ventures and associates
as at 31 December 2023 can be found from page 184
onwards 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 95 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 46 onwards.
Shareholder base
As a public company with a broad shareholder base, Baloise
Holding Ltd is a member of the SMI Mid (SMIM) Index. A total
of 30,778 shareholders were registered in Baloise Holding Ltd’s
share register as at 31 December 2023. The number of regis-
tered shareholders had increased by 12.6 per cent compared
with the previous year. The “Significant shareholders” section
on page 267 provides information on the structure of the
Company’s shareholder base as at 31 December 2023.
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 Secu-
rities 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.ser-ag.com/en/resources/notifi-
cations-market-participants/significant-shareholders.html.
32
Baloise Group Annual Report 2023 Treasury shares
Baloise Holding Ltd held (directly and indirectly) 283,523
treasury shares (0.619 per cent of the issued share capital)
as at 31 December 2023.
Cross-shareholdings
There are no cross-shareholdings based on either capital
ownership or voting rights.
Dividend policy
Baloise Holding Ltd pursues a policy of paying consistent,
earnings-related dividends. It uses other dividend instru-
ments such as share buy-backs to supplement conventional
cash dividends. Shareholders have received a total of CHF
1,919.6 million from cash dividends and share buy-backs over
the last five years.
Cash dividends
Share
buy-backs
Total
Year (CHF million)
2023
2022
2021
2020
2019
Total
352.7 1
338.9
320.6
312.3
312.3
1,636.8
–
–
–
92.8
190.0
282.8
352.7
338.9
320.6
405.1
502.3
1,919.6
All figures stated as at 31 December.
1 Proposal to the Annual General Meeting on 26 April 2024.
Corporate Governance
2. Capital structure
Baloise Holding Ltd’s equity
The table below shows the changes in equity during the last
three reporting years.
Changes in Baloise Holding Ltd’s equity
(before appropriation of profit)
31.12.2023
31.12.2022
31.12.2021
CHF million
Share capital
General reserve
Reserve for
treasury shares
Free reserves
Distributable
profit
Treasury shares
Equity
attributable
to Baloise
Holding Ltd
4.6
11.7
5.4
644.4
444.0
– 6.0
4.6
11.7
7.8
573.6
407.4
– 8.1
4.6
11.7
7.6
502.8
391.6
– 9.3
1,104.1
997.0
909.1
Since the capital reduction decided on 30 April 2021, the
share capital of Baloise Holding Ltd has totalled CHF 4.58
million and is divided into 45,800,000 dividend-bearing regis-
tered shares with a par value of CHF 0.10 each.
Capital band and conditional capital; other equity
instruments
Capital band
A resolution adopted by the Annual General Meeting on
28 April 2023 has authorised the Board of Directors until
28 April 2028 to increase or reduce the Company’s share
capital within a capital band with a lower limit of CHF
4,122,000 and an upper limit of CHF 5,038,000 (see article
3 [4] of the Articles of Association).
www.baloise.com/articles-of-association
33
Baloise Group Annual Report 2023 Credit rating
On 2 August 2023, the credit rating agency Standard & Poor’s
confirmed its rating for the Baloise Group’s core companies
of 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 profit-
ability and robust competitive position in its profitable core
markets. Information about the ratings of Baloise Holding
Ltd and its subsidiaries Baloise Belgium NV (Belgium), Baloise
Sachversicherung AG (Germany), Baloise Insurance Ltd (Swit-
zerland) and Baloise Life Ltd (Switzerland) can be found on
the website.
www.baloise.com/rating
Corporate Governance
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 disap-
plied. 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/articles-of-association
Upper limit for the disapplication of pre-emption rights
The total number of registered shares that the Board of Direc-
tors is authorised to issue from the conditional capital and
from the capital band, in each case disapplying or limiting
shareholders’ pre-emption rights, is limited to 4,580,000
registered shares, which equates to 10 per cent of the current
issued capital (see article 3 [9] of the Articles of Association).
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
3,259.3 million on 31 December 2023. Details of changes in
consolidated equity in 2022 and 2023 can be found in the
consolidated statement of changes in equity on pages 82
and 83 in the Financial Report. All pertinent details relating to
2021 can be found in the consolidated statement of changes
in equity on page 88 in the 2022 Annual Report.
Bonds outstanding
Baloise Holding Ltd and Baloise Life Ltd (with Baloise Holding
Ltd acting as guarantor) have issued bonds publicly. As at
the end of 2023, a total of 14 public bonds were outstanding.
Details of outstanding bonds can be found on pages 156 and
265 and on the website.
www.baloise.com/bonds
34
Baloise Group Annual Report 2023 Corporate Governance
During the reporting year, Dr Thomas von Planta, Christoph
Mäder, Dr Maya Bundt, Claudia Dill, Christoph B. Gloor, Hugo
Lasat, Dr Karin Lenzlinger Diedenhofen, Dr Markus R. Neuhaus,
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. Claudia Dill stepped down from the
Board of Directors on 31 October 2023 in order to take on an
operational role on the Executive Committee of a reinsurer.
All members of the Board of Directors apart from Hugo
Lasat will be standing for re-election at the Annual General
Meeting on 26 April 2024 (for nominations see also “Succes-
sion planning” on p. 38).
Further information on the members of the Board of Directors
can be found on the website.
www.baloise.com/board-of-directors
3. Board of Directors
Election and term of appointment
The Board of Directors consists of nine members. Each
member of the Board of Directors has been elected for a term
of one year at a time. As at 31 December 2023, the average
age on the Board of Directors was 59. The average term of
office is five 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.
Members
Thomas von Planta
Christoph Mäder
Maya Bundt
Claudia Dill*
Christoph B. Gloor
Hugo Lasat
Karin Lenzlinger Diedenhofen
Markus R. Neuhaus
Hans-Jörg Schmidt-Trenz
Marie-Noëlle Venturi - Zen-Ruffinen
C: Chair, DC: Deputy Chair, M: Member.
* Claudia Dill resigned from the Board of Directors with effect from 31 October 2023.
Strategy and
Governance
Committee
Investment and
Risk Committee
Remuneration
Committee
Audit Committee
C
DC
M
M
M
M
C
DC
C
M
M
DC
M
C
M
DC
35
Baloise Group Annual Report 2023 Corporate Governance
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Diedenhofen
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Hans-Jörg
Schmidt-Trenz
Marie-Noëlle
Venturi - Zen-Ruffinen
Board of Directors
In a listed company
C-Level
Insurance
Banking / Asset
Management
In a listed or private company
In a senior position in a company within the insurance or reinsurance sector
In a senior position in a bank or an asset management department / company
Finance / Audit / Risk
Management
In a senior position in the finance or risk management division of a company or in a senior audit function in a leading
audit firm
Legal / Compliance /
Governance
Degree in law; senior position in Legal and / or Compliance
* Claudia Dill resigned from the Board of Directors with effect from 31 October 2023.
Statutory rules concerning the number of permitted
activities
The Articles of Association contain a provision (article 33)
concerning the maximum number of directorships that can
be held outside the Company. Subsection 1 stipulates that
the number of external directorships held by members of the
Board of Directors or of the Corporate Executive Committee
must be compatible with the commitment, availability, capa-
bilities and independence necessary for the performance of
their duties as members of the Board of Directors or Corpo-
rate Executive Committee. Subsection 3 specifies numerical
restrictions. Subsection 2 stipulates that directorships of
members of the Board of Directors and of the Corporate Exec-
utive Committee in comparable functions in other companies
with a commercial purpose must be included. In this Annual
Report, directorships are disclosed in accordance with the
provisions of the Articles of Association and in accordance
with the SIX Corporate Governance Guidelines.
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 Company’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 Directors’ main functions and responsibilities are to
act as the Company’s ultimate managerial and supervisory
body, to oversee the Company’s finances and to determine
its organisational structures.
www.baloise.com/articles-of-association
36
Baloise Group Annual Report 2023
Information on the Board of Directors’ role in corporate, social
and environmental responsibility can be found on page 24
onwards in the Company’s Annual Review.
The Chairman of the Board of Directors is also Chairman
of the Strategy and Governance Committee, and presides
over the meetings of both bodies. He is also a member of the
Investment and Risk Committee (which he chaired until the
end of April 2023). He represents the Company externally and,
acting in this capacity, maintains contact with investors,
government agencies, trade associations and other Baloise
stakeholders. The Chairman of the Board of Directors is in
close and constant contact with the Group CEO. He attends
the meetings of the Corporate Executive Committee when
appropriate, particularly when matters of strategic or long-
term importance are being discussed. He ensures that 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 material
importance to the decision-making and monitoring process
at Baloise.
The Board of Directors has a Vice-Chairman who is an ex
officio member of the Strategy and Governance Committee
(see section C2.2 of the Organisational Regulations); he is
also the Chairman of the Remuneration Committee. The
Chairman of the Audit Committee is also a member of the
Strategy and Governance Committee. The heads of the
control functions (Risk Management, Compliance, Group
Internal Audit and the Appointed Actuary) report to him, as do
the external auditors. The Chairman of the Audit Committee
has powers that enable him to ensure the independence
of the control functions. The members of the Strategy and
Governance Committee have the right to convene a meeting
at any time.
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
and Risk Committee and the Remuneration Committee have
their own decision-making powers.
The committees appointed by the Board of Directors gener-
ally consist of four members, who are newly elected every
year by the Board of Directors. Article 733 OR requires the
members of the Remuneration Committee to be individu-
ally elected by the Annual General Meeting. The Chairman
and Vice-Chairman of the Board of Directors are ex officio
members of the Strategy and Governance Committee. The
Chairman of the Board of Directors is not allowed to sit on
the Audit Committee. The committees’ basic functions and
responsibilities are specified in the Organisational Regula-
tions. Additional specific regulations applicable to individual
committees govern administrative and other aspects.
Corporate Governance
Functions and responsibilities of the committees
The Strategy and Governance Committee monitors the
progress of strategy and sustainability matters on behalf
of the Board of Directors. The Board of Directors is respon-
sible for both areas (in the case of strategy, this is mandated
by article 716a OR) and, where required, adopts the rele-
vant resolutions. The Strategy and Governance Committee
prepares nominations within the parameters of the Board
of Directors’ responsibility for nominations and elections.
The Investment and Risk Committee supports the Board
of Directors in the areas of investment management, capital
management and risk management. It oversees investment
activities and assesses capital adequacy and asset and
liability management as part of its overall review of financial
risks. Key influencing factors (such as solvency, cover assets
and reserves) are now taken into account in the committee
when reviewing asset management. The committee reviews
the risk strategy and risk appetite of the Group for subse-
quent appraisal by the Board of Directors and takes note of
risk reports.
The Audit Committee supports the Board of Directors
in its supervision of accounting, financial and regulatory
reporting and compliance with statutory provisions. Only
independent members of the Board of Directors may sit
on the Audit Committee, which receives the reports from
the various control functions (such as the external auditors,
Internal Audit, Compliance and Risk Management).
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 article 735 OR, the remuneration paid to the Board
of Directors and the Corporate Executive Committee has
to be approved by the Annual General Meeting. The Remu-
neration Committee approves the target agreements and
performance assessments that are applied to the Corporate
Executive Committee members in order to determine their
variable remuneration. It also sanctions the remuneration
policies applicable to the Corporate Executive Committee
members and ensures that they are being correctly imple-
mented. It approves the variable remuneration granted to
individual members of the Corporate Executive Committee;
this remuneration has to be within the maximum amount
approved by the Annual General Meeting. Furthermore, it
specifies the total amount available in the performance pool.
The Remuneration Committee is elected by and reports to
the Annual General Meeting.
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/articles-of-association
37
Baloise Group Annual Report 2023 Corporate Governance
The attendance rate at the ordinary meetings of the full
Board of Directors and its committees was 100 per cent. Six
members each missed one of the total of eleven, shorter
extraordinary meetings of the full Board of Directors, which
equates to an attendance rate of 94.5 per cent. The members
who sent their apologies were Dr Maya Bundt, Claudia Dill,
Dr Karin Lenzlinger Diedenhofen, Hugo Lasat, Dr Markus
Neuhaus and Professor Marie-Noëlle Venturi - Zen-Ruffinen.
In 2023, the full Board of Directors of Baloise Holding
Ltd held six ordinary meetings, plus eleven extraordinary
meetings to discuss succession planning for the Corporate
Executive Committee and the transition to IFRS 17/9, which
lasted one to two hours. The ordinary meetings of the Board
of Directors usually last a full working day, while the meet-
ings of its committees last either half a working day or a full
working day.
The Strategy and Governance Committee convened
eight times in 2023, which included one two-day strategy
meeting. The Investment and Risk Committee and the Remu-
neration Committee each met on four occasions. The Audit
Committee held five meetings, two of which included work-
shops on finance transformation and anti-fraud measures.
Meetings of the Board of Directors are regularly attended
by members of the Corporate Executive Committee. Meet-
ings of the Strategy and Governance Committee are usually
attended by the Group CEO and the Head of Corporate Divi-
sion Finance. Those present at Audit Committee meetings
are the Head of Corporate Division Finance, the Head of
Group Internal Audit and, occasionally, representatives of the
external auditors and the heads of control functions such as
Risk Management and Compliance. The main attendees at
Remuneration Committee meetings are the Group CEO, the
Head of Group Human Resources and the Head of Compen-
sation and Benefits. Meetings of the Investment and Risk
Committee are usually attended by the Group CEO and the
heads of Corporate Division Asset Management, Corporate
Division Finance and Group Risk Management. The Secretary
to the Board of Directors attends all meetings of the full
Board of Directors and those of its committees.
Self-evaluation
Every year, a comprehensive self-evaluation is carried out in
the full Board of Directors and in all committees to verify that
each body is working efficiently and effectively. The review
covers the composition of the Board of Directors, the availa-
bility of its members, engagement, cooperation and culture
within the Board of Directors, the processes for preparing
for and holding the meetings and the interaction between
the Corporate Executive Committee and the management.
The members of each committee discuss the findings and
agree on appropriate measures, including the priorities for
the following year.
Training and development
The members of the Board of Directors participate in
multi-day introductory programmes in preparation for a
new role on the board and/or committee and then receive
ongoing training (at least once a year) in half-day seminars
on specific topics. In 2023, a seminar on Baloise’s resilience
was held for the Board of Directors.
Succession planning
There are changes to the Board of Directors on an ongoing
basis. Succession planning is the responsibility of the
Strategy and Governance Committee, which is also respon-
sible for planning personnel changes in the Corporate Exec-
utive 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 chart on page 36). Any restric-
tions on availability and potential conflicts of interest rising
from other mandates are also taken into account.
The Board of Directors will propose that Dr Guido Fürer
be elected to the Board of Directors at the Annual General
Meeting on 26 April 2024. As a proven investment expert
who also has many years of experience in the reinsurance
industry, he will bring additional expertise to the Board
of Directors, particularly in the areas of insurance, asset
management and risk management.
38
Baloise Group Annual Report 2023 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 Execu-
tive Committee is governed by law, the Articles of Associ-
ation and the Organisational Regulations. The Organisa-
tional Regulations are reviewed on an ongoing basis and
updated as changing circumstances require. As a result of
the company law reform that came into effect on 1 January
2023, amendments to the Articles of Association were made
at the Annual General Meeting on 28 April 2023. The Board of
Directors then amended the Organisational Regulations in
accordance with the changes to the Articles of Association.
www.baloise.com/articles-of-association
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 25
onwards and in the Financial Report starting on page 190.
The members of the Board of Directors have access to the
minutes of all meetings of the committees. The Chairman of
the Board of Directors may attend meetings of the Corporate
Executive Committee at any time.
Corporate Governance
39
Baloise Group Annual Report 2023 Corporate Governance
Thomas von Planta (1961, Switzerland, Dr iur., lawyer)
has been a member of the Board of Directors since 2017 and its Chairman
since April 2021. Until 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
from 2002 to 2006. Until 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 has been a member of
the Board of Directors of BB Biotech AG since March 2019 and its Chairman
since 21 March 2024. He is an independent non-executive director.
Christoph Mäder (1959, Switzerland, lawyer)
has sat on the Board of Directors since 2019 and has been Vice-Chairman
since May 2022. 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 pres-
ident between 2008 and 2014. He has been president of economiesuisse,
the umbrella organisation representing Swiss business, since 2020. Chris-
toph Mäder is Vice-Chairman of the Board of Directors of Lonza Group AG,
a member of the Board of Directors of Assivalor AG, a member of the Bank
Council of the Swiss National Bank and, since 19 March 2024, a member
of the Board of Directors of Schindler Holding AG. He is an independent
non-executive director.
Maya Bundt (1971, Germany/Switzerland, Dr sc. nat. ETH Zurich,
geoecologist)
has been a member of the Board of Directors since April 2022. She has
worked for the reinsurance company Swiss Re in a variety of roles, including
heading the Cyber & Digital Solutions department. She is currently Cyber
Practice Leader and chair of the Swiss Re Cyber Council. Before joining
Swiss Re, Maya Bundt spent three years working for the Boston Consulting
Group as a strategy consultant in a variety of sectors. She sits on the
Boards of Directors of Valiant Bank AG and APG SGA AG as an independent
member. She is an independent non-executive director.
40
Baloise Group Annual Report 2023 Corporate Governance
Christoph B. Gloor (1966, Switzerland, degree in business economics HWV)
has been a member of the Board of Directors since 2014. Since 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 Noten-
stein 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.
Since July 2023, he has also been Chairman of the Investment Committee
at Endress Familien AG. He holds an Executive Master in Change from
INSEAD, where he also completed the International Directors Program in
2018. He is an independent non-executive director.
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 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 Boards of
Directors of Banque Degroof Petercam in Luxembourg and Febelfin vzw/asbl,
Brussels, 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). He 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
a member of the Board of Directors of SV Group AG since 2010 and its
Vice-Chairwoman since 2017. Since 2015, she has been Chairwoman of
the Board of Directors and of the staff pension fund of Zürcher Oberland
Medien AG. Until the end of February 2024, she was a member of the Board
of Directors of LLB (Schweiz) AG. She is a member of the Board of Directors
of Übermorgen Ventures Investment AG and sits on various boards of
foundations and organisations with portfolios including corporate respon-
sibility and sustainability. Dr Karin Lenzlinger Diedenhofen has been Pres-
ident of the Zurich Chamber of Commerce and a member of the Board of
Directors of economiesuisse since 2013. Between 1991 and 2019, she held
various positions, including – from 1999 – CEO and delegate of the Board
of Directors of Lenzlinger Söhne AG, Nänikon/Uster. She is an independent
non-executive director.
41
Baloise Group Annual Report 2023 Corporate Governance
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. Dr Markus R. Neuhaus is Chairman of the Board of Directors of
Galenica AG, Vice-Chairman of the Board of Directors of Barry Calle-
baut AG and a member of the Board of Directors of Jacobs Holding AG.
He was Vice-Chairman of the Board of Directors of Orior AG until April 2023.
Dr Markus R. Neuhaus is also Vice-President of Avenir Suisse and of the
Zurich Chamber of Commerce, and a member of the Board of Foundation
of the ETH Foundation. He is an independent non-executive director.
Hans-Jörg Schmidt-Trenz (1959, Germany, Prof. Dr rer. pol., economist)
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). 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. Since 2022, he has been Vice-Chair of the World Chamber
Federation of the International Chamber of Commerce (ICC). He was
Founding President of the HSBA Hamburg School of Business Adminis-
tration, 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 Boards of Trustees of Hamburger Sparkasse
and HanseMerkur Versicherung. He is a member of the Board of Trustees
of the Hamburg Academic Foundation, Chairman of the Board of Trustees
of the Tafel foundation of Hamburg-Schleswig-Holstein and managing
director of STconnect GmbH. He is an independent non-executive director.
42
Baloise Group Annual Report 2023 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
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 is of counsel
for the Geneva law firm Niederer Kraft Frey. She is Vice-Chair of the Board
of Foundation of the Swiss Board Institute, Vice-Chair of the Board
of Directors of Banco Santander International SA, a member of the
Boards of Directors of Ina Invest Holding AG and Ina Invest AG, a member
of the Board of Management of the Swiss Institute of Directors and
a member of the Board of Foundation of the Foundation for Accounting
and Reporting Recommendations (Swiss GAAP FER). She 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)
Corporate Governance
43
Baloise Group Annual Report 2023 Corporate Governance
4. Corporate Executive Committee
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 at Baloise 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 became a member of the Corporate Executive Committee
and CEO of Corporate Division Switzerland in 2011, and as such was in
charge of business in Switzerland. Michael Müller has been Group CEO
since 1 July 2023. He is a member of the Swiss Insurance Association (SIA)
and treasurer of the Swiss Employers Confederation (SAV).
Alexander Bockelmann (1974, Germany, Dr rer. nat.)
studied geoecology and environmental sciences at the universities of
Bayreuth (Germany) and East Anglia (UK) before completing his doctorate
at the University of Tübingen’s faculty of geosciences. Dr Alexander
Bockelmann is a proven expert in IT 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, most recently, the
USA, where he was CIO. 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 2019 as head
of the newly created Corporate Division IT, a position he has held ever since.
He is a member of the Steering Committee of the Swiss FS-CSC association.
Matthias Henny (1971, Switzerland, Dr phil.)
completed his undergraduate and postgraduate studies in physics at the
University of Basel. From 1998 to 2003, he was employed at McKinsey & Co.,
before switching to what was then the Winterthur Group, where he was Head
of Financial Engineering in Asset Management until 2007. Subsequently, he
was a member of the management team at AXA Winterthur, as Head of Asset
Management (until 2010) and as CFO. In 2012, Dr Matthias Henny joined the
Baloise Group. As CEO of Baloise Asset Management AG, he was responsible
for the administration of approximately CHF 50 billion in assets. Dr Matthias
Henny became a member of the Corporate Executive Committee in 2017.
He manages the Corporate Division Asset Management incorporating the
Investment Strategy, Business Development, Portfolio Management, Finance
& Operations, Real Estate and Corporate Services units.
44
Baloise Group Annual Report 2023 Corporate Governance
Clemens Markstein (1971, Germany, Dipl.-Wi.-Ing.)
studied industrial engineering at Karlsruhe University and trained in
strategy, marketing and finance during a management programme
at Wharton Business School and at the University of St. Gallen. He also
completed an advanced management programme at the INSEAD Business
School. Clemens Markstein began his professional career as a consultant
at the Boston Consulting Group in Stuttgart. He then held various roles
at Allianz in Germany and in Switzerland, before moving to Baloise.
He joined the Executive Committee of Baloise’s Corporate Division
Switzerland in 2009 as Head of Product Management for Corporate Clients.
He was Head of Operations & IT from 2017. Since 1 July 2023, Clemens Mark-
stein has been a member of the Corporate Executive Committee and CEO
of Corporate Division Switzerland, and as such is in charge of business in
Switzerland. He became Chairman of the Board of Directors of Baloise
Bank AG in September 2023. Since June 2023, Clemens Markstein has also
been a member of the Executive Board Committee of the Association
of Basel Insurance Companies and of 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
specialising in financial management. He holds an Executive Master in
Change from INSEAD. He joined the Baloise Group in 2002 as Head of
Financial Relations. From 2009 to 2011, he was the Baloise Group’s Head
of Financial Accounting & Corporate Finance. Between 2011 and 2017,
he was Head of Finance and Risk, and thus a member of the Executive
Committee, at Baloise in Switzerland. Dr Carsten Stolz has been Head
of Corporate Division Finance since May 2017 and is a member of the
Corporate Executive Committee. He is an executive director at creace
GmbH and 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
45
Baloise Group Annual Report 2023 Corporate Governance
Management structure
(as at 31 December 2023 )
Group CEO
Michael Müller*
Group CEO Office
Legal, Tax and Compliance
Group HR
Group Strategy & Digital Transformation
Finance
Carsten Stolz*
Asset
Management
Matthias
Henny*
* Member of the Corporate Executive Committee.
IT
Alexander
Bockelmann*
Switzerland
Clemens
Markstein*
Germany
Jürg
Schiltknecht
Belgium
Christophe
Hamal
Luxembourg
Christine
Theodorovics
5. Remuneration, shareholdings and loans
6. Shareholder participation rights
The Remuneration Report in Appendix 1 to the Corporate
Governance Report (page 51 onwards) describes the remu-
neration policies adopted and the remuneration system
in place, and contains in particular the remuneration paid
and the loans granted to members of the Board of Directors
and the Corporate Executive Committee in 2023 as well as
the investments they hold. The content and scope of these
disclosures are determined by article 734 to 734f OR, the
corporate governance information guidelines published
by SIX Swiss Exchange AG (version as at 29 June 2022) and
economiesuisse’s Swiss Code of Best Practice for Corporate
Governance.
The report of the external auditors on the audit of the Remu-
neration Report can be found in Appendix 2 to the Corporate
Governance Report (page 72 onwards).
Voting rights
The share capital of Baloise Holding Ltd 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 person (as defined in article 5 of the Articles
of Association) 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 provi-
sion 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. Shareholders are allowed to delegate the
exercise of their voting rights to the independent proxy and
to persons of their choosing. When exercising voting rights,
no person (with the exception of the independent proxy)
can accumulate more than one-fifth of the voting shares
at the Annual General Meeting directly or indirectly for
his or her own votes or proxy votes (article 16 of the Articles
of Association).
Powers of attorney and voting instructions may also
be given to an independent proxy electronically without
requiring a qualifying electronic signature (article 16 [2] of
the Articles of Association).
46
Baloise Group Annual Report 2023 Corporate Governance
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
or create exemptions from 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 majority of the votes cast, subject to compul-
sory 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. Baloise Holding Ltd’s financial year ends on
31 December. The Annual General Meeting is convened at
least 20 days before the date of the meeting. All registered
shareholders receive a personal invitation, which includes
the agenda. The invitation and the agenda are published in
the Swiss Official Gazette of Commerce and on the website.
The Annual General Meeting, the Board of Directors or
the external auditors decide whether to convene extraor-
dinary 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 5 per cent of the share capital or the votes.
Requesting agenda items
Shareholders representing at least 0.5 per cent of the share
capital or votes can demand that items are placed on
the agenda or that motions are submitted. 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 agenda item and the motion to be put
to the Annual General Meeting (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 trans-
ferability are set out in article 5 and article 17 of the Articles
of Association.
www.baloise.com/articles-of-association
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 more than 33⅓ per
cent of all Baloise shares. Baloise Holding Ltd has not made
any use of the option to deviate from or waive this regula-
tion. 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 Deriv-
atives Trading (FinfraG).
The members of the Corporate Executive Committee
have a notice period of twelve months. Baloise 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.
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 Baloise since 2016. Christian Fleig
has held the post of auditor-in-charge since 2018. In accor-
dance 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
2023
2022
5,590,039
6,489,699
189,530
27,342
5,779,569
6,517,041
47
Baloise Group Annual Report 2023 Information events
Baloise provides detailed information about its business
activities as follows:
● Details about its financial performance, targets, strate-
gies and operations are provided at media 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
downloaded as podcasts.
● Shareholders are informed about business during the
year at the Annual General Meeting.
● Roadshows are regularly staged at various financial
centres.
● At Investor Days, the Company presents its corpo-
rate strategy, targets and 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.
Corporate Governance
Audit fees paid to EY include fees for engagements with a
direct or indirect connection to a particular audit engage-
ment and fees for audit-related activities (namely, statutory
and regulatory special audits).
The services were rendered in accordance with the rele-
vant 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 Committee
received detailed explanations and documents about the
external auditors’ main findings from the auditors’ repre-
sentatives.
The performance of the external auditors and their inter-
action with Group Internal Audit, Risk Management and
Compliance are assessed by the Audit Committee. The Audit
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 Committee
reviews the scope of the audit and suggests areas that
require special attention. The Audit Committee reviews the
external auditors’ fees, their independence and the quality
of the service.
9. Information policy
Information principles
Baloise provides (potential) shareholders, investors,
employees, customers and the public with information on
a regular, open and comprehensive basis. All registered
shareholders receive a summary of the review of operating
performance once per year. The full Annual Report is sent to
shareholders on request and is also available on the website.
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 simul-
taneously available to the public. All market participants
receive the same information. Baloise offers teleconferences,
podcasts, videos and live streaming in order to make infor-
mation generally and easily accessible.
www.baloise.com/annual-report
48
Baloise Group Annual Report 2023 Information about Baloise shares
Information about Baloise shares begins on page 38 of the
Annual Review.
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 notice of
the Annual General Meeting, 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 58 285 89 42
vrs@baloise.com
Investor Relations
Baloise Group
Markus Holtz
Aeschengraben 21
4002 Basel, Switzerland
Tel. + 41 58 285 81 81
investor.relations@baloise.com
Corporate Governance
49
Baloise Group Annual Report 2023 Remuneration Report
Remuneration Report
1. Overview of remuneration
2. Governance
3. Remuneration principles
4. Remuneration system for the Board of Directors
5. Remuneration system for the Corporate
Executive Committee
6. Remuneration for the reporting year
A. Remuneration paid to the members of
the Board of Directors
B. Remuneration paid to the members of the
Corporate Executive Committee
C. Loans and credit facilities granted to members
of the Board of Directors and the Corporate
Executive Committee
D. Shares and options held
E. Total remuneration at the Baloise Group
51
53
54
55
56
56
61
61
63
68
69
71
Baloise Group Annual Report 2023
51
Remuneration Report
Letter from the Chairman of the
Remuneration Committee
● We have further tightened the expiry provisions for
PSU plans and have ensured that any outstanding
entitlement to PSUs expires completely in the event
of someone leaving the Company due to poor perfor-
mance or misconduct or if they subsequently engage in
any activities in competition with Baloise.
These steps have been taken to proactively address concerns
of our shareholders and emphasise the long-term focus of
our remuneration system.
The Remuneration Committee seeks to apply the principle
of achievement-oriented remuneration in an appropriate
manner. In 2023, the Corporate Executive Committee deliv-
ered solid work but failed to achieve certain targets in the
quality assessment for its short-term variable remuneration.
The Remuneration Committee has therefore decided to set
the performance pool factor at 85 per cent, thereby reducing
the payout of short-term variable remuneration for 2023.
The long-term variable remuneration granted to senior
management in the form of PSUs is closely linked to the
performance of Baloise, which is reflected in the valuation
of PSU plans. As the performance of Baloise in the last three
years has fallen short of expectations, all entitlements to
shares allotted to eligible persons under the 2021 PSU plan
have expired in full (performance multiplier of 0 per cent).
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 2024
Christoph Mäder
Chairman of the Remuneration Committee
Dear shareholders,
I am delighted to present this remuneration report to you
today and to inform you about the activities of the Remuner-
ation Committee in the reporting year.
In 2022, we made significant improvements to the remunera-
tion system and to related disclosures and provided a detailed
account of the outcomes of these improvement measures
in the remuneration report. Against this backdrop, we were
pleased to see a year-on-year increase in the approval rate
for the remuneration system to 86 per cent at the 2023 Annual
General Meeting. This is testimony to the fact that we have
taken the right course of action and that our efforts are being
acknowledged and appreciated.
We actively engage with our shareholders, institutional inves-
tors and proxy advisors on an ongoing basis and value this
transparent dialogue. It enables us to take your interests into
account in our work in order to continually improve the remu-
neration system and our reporting on this subject.
As announced in last year’s remuneration report, further
adjustments have been made to the remuneration system
in 2023. These focused primarily on strengthening the long-
term variable remuneration in the following ways:
● The relative weighting of variable remuneration com-
ponents in the remuneration of Corporate Executive
Committee members has been changed with effect
from the 2024 financial year without increasing the total
remuneration package. The proportion of long-term
variable remuneration (long-term incentive, LTI) in the
Corporate Executive Committee’s remuneration mix
has been raised to 60 per cent of the basic salary (up
from 40 per cent), while the proportion of short-term
variable remuneration (short-term incentive, STI) has
been reduced to 40 per cent (down from 60 per cent).
This adjustment highlights our commitment to aligning
the long-term interests of our investors and our senior
management. For further information, see chapter 5.
● We also made changes to our performance share unit
(PSU) plan, which constitutes the long-term variable re-
muneration component. As part of our review, we defined
two additional metrics that will put the performance
assessment for long-term variable remuneration on a
broader footing from 2025 and will tie this remuneration
component even more closely to the performance of our
management. For further information, see chapter 5.
52
Baloise Group Annual Report 2023
1. Overview of remuneration
Remuneration system for the Board of Directors
The members of the Board of Directors receive fixed remunera-
tion for their service as members of the board and its commit-
tees, as set out in the table below. These amounts provide
appropriate compensation for the responsibility and workload
involved in their various functions and have not been raised
since 2008.
Board of Directors’ fees and mandatory share ownership
CHF
thousand /
year
of which shares
in Baloise
Holding Ltd 1
Remuneration Report
expire at this point, depending on whether or not the perfor-
mance requirement has been met. These elements ensure
that remuneration is competitive and reflective of perfor-
mance. They also incentivise recipients to achieve ambitious
targets while simultaneously emphasising the importance
of sustainable management practices. In addition, they
strengthen the Company’s ability to retain high performers
and to align their interests with those of stakeholder groups,
particularly our shareholders.
All elements of Corporate Executive Committee remuner-
ation are determined individually by the Remuneration
Committee in keeping with the maximum amounts approved
by the Annual General Meeting.
Description
Purpose
Total fee – Chairman
Base fee – Member
Additional fee – Vice-Chairman
Additional fee – Chair of Committee
Additional fee – Committee Member
Mandatory share ownership
1,300
125
50
70
50
1/3
1/4
1/4
1/4
1/4
Fixed remuneration
• Basic salary
• Fringe benefits
• Social security contributions
1,000 shares each
Short-term variable remuneration
1 The share elements of the fee are blocked for three years, the 1,000 mandatory
• Performance pool
Competitiveness in
the marketplace
Fairness and transparency
Financial hedging
Remuneration for the achie-
vement of annual targets
(Company, team and indivi-
dual targets)
Participation in the success
of the business
Strengthening of senior mana-
gers’ loyalty to the Company
Alignment of senior managers’
interests with those of share-
holders
• Paid in cash and restricted
shares
Long-term variable remuneration
• Performance share units (PSUs)
shares until resignation.
Remuneration paid to the members of the Board of Directors
for the reporting year
The Annual General Meeting held on 29 April 2022 approved
an amount of CHF 3.4 million for the remuneration (including
social security contributions and Share Subscription Plan
discount) payable to the Board of Directors for 2023.
The amount paid out was CHF 3.4 million.
Remuneration system for the Corporate Executive
Committee
Members of the Corporate Executive Committee of the Baloise
Group receive fixed remuneration and variable remuneration
that comprises a short-term component (performance pool)
and a long-term component (performance share units, PSUs).
At least 50 per cent of short-term variable remuneration must
be awarded in shares. PSUs under the long-term variable remu-
neration plan are prospective entitlements to shares that are
either converted and definitively allocated after three years or
Remuneration paid to the members of the Corporate
Executive Committee for the reporting year
The Annual General Meeting held on 29 April 2022 approved an
amount of CHF 4.15 million for the fixed remuneration (including
social security contributions) payable to the Corporate Executive
Committee for 2023. The amount paid out was CHF 4.0 million.
In addition, the Annual General Meeting held on 28 April 2023
approved a maximum amount of CHF 5.0 million for the vari-
able remuneration (including social security contributions and
discounted subscriptions under the Share Subscription Plan)
payable for 2023. The total amount paid out was CHF 3.0 million.
The chart below shows the remuneration of the individual
members of the Corporate Executive Committee for 2023 and
the breakdown by remuneration component.
Gert De Winter
Michael Müller
2023
2023
Dr Alexander Bockelmann
2023
Dr Matthias Henny
Clemens Markstein
Dr Carsten Stolz
2023
2023
2023
73%
58%
57%
59%
67%
61%
27%
23%
18%
26%
17%
24%
17%
25%
8%
22%
17%
CHF 0.9 million
CHF 1.7 million
CHF 1.4 million
CHF 1.3 million
CHF 0.6 million
CHF 1.3 million
Fixed (includes basic salaries, non-cash remuneration and employer
contributions to the state-run social security schemes and the
occipational pension scheme)
Short-term variable remuneration (includes
payments from the performance pool in shares and
cash)
Long-term variable remuneration (includes
allocations of shares)
Explanatory notes to the table The remuneration for Gert De Winter covers the period from 1 January to 30 June 2023. Michael Müller took over as Group CEO with effect
from 1 July 2023. Clemens Markstein became a member of the Corporate Executive Committee with effect from 1 July 2023. His remuneration covers the period from
1 July to 31 December 2023. For further information, see chapter 6.
53
Baloise Group Annual Report 2023 Remuneration Report
2. Governance
Remuneration-related provisions in the Articles of
Association
Article 31 of the Articles of Association of Baloise Holding
Ltd defines the approval process for the remuneration of
members of the Board of Directors and the Corporate Exec-
utive Committee. The process involves separate approvals of:
● the total amount of remuneration for the Board of
Directors for the one-year term until the end of the next
Annual General Meeting;
● the total amount of fixed remuneration for the Corpo-
rate Executive Committee for the next financial year;
● the maximum amount of variable remuneration
payable to the Corporate Executive Committee for the
next financial year.
The Articles of Association of Baloise Holding Ltd also stipu-
late the applicable remuneration principles and include the
following provisions:
● Mandatory share ownership rules for the Board of
Directors (Article 20)
● Term of remuneration contracts (Article 29)
● Additional amount for the remuneration paid to Corpo-
rate Executive Committee members appointed since
the last Annual General Meeting (Article 30)
● Principles of variable remuneration (Article 32)
● Activities for other companies (Article 33). For further
information, see the corporate governance report, p. 36
● Loans and credit facilities (Article 34)
www.baloise.com/articles-of-association
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 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 paid is demonstrably dependent on the
Company’s sustained success and individuals’ personal
contributions and does not create any false incentives;
Approval structure
● 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 respon-
sibilities 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 remuner-
ation 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 pack-
ages for senior managers that, in individual cases,
exceed CHF 100,000 (subject to the proviso that
members of the Board of Directors or the Corporate
Executive Committee may not be granted sever-
ance packages and may be granted an inducement
payment only in order to offset a verifiable financial
disadvantage).
The Remuneration Committee consists of at least three
members of the Board of Directors, who are elected every
year by the Annual General Meeting. Christoph Mäder
(Chairman), Prof. Dr Hans-Jörg Schmidt-Trenz (Deputy
Chairman), Christoph Gloor and Dr Karin Lenzlinger Dieden-
hofen were re-elected to the Remuneration Committee by
the Annual General Meeting on 28 April 2023. The Remuner-
ation Committee maintains a regular dialogue with senior
management throughout the year and meets at least three
times per year. In addition to the committee secretary being
present, these meetings are usually also attended by the
Group CEO and the Head of Group Human Resources, who
participate in an advisory capacity. The Group CEO leaves the
meeting when his personal remuneration is being discussed
and decided. The Chairman of the Remuneration Committee
reports to the Board of Directors at its next meeting on the
committee’s activities.
Remuneration policies
Proposal
Group CEO
Chairman of the
Board of Directors
Remuneration
Committee
Board of
Directors
Approval
Annual General
Meeting
Maximum total remuneration for the Board of Directors
and the Corporate Executive Committee
Proposal
Review
Approval
(binding vote)
Remuneration for the Chairman of the Board of Directors
Proposal
Approval
Remuneration for the Group CEO
Proposal
Remuneration for the Corporate Executive Committee
Proposal
Remuneration report
54
Baloise Group Annual Report 2023
Approval
Approval
Proposal
Approval
Advisory vote
3. Remuneration principles
The remuneration principles and parameters applied
across the Baloise Group have been set out in a Remuner-
ation Guideline. This Remuneration Guideline applies to all
employees throughout the Baloise Group. It is based on the
principles set out in the sections below.
Competitiveness in the marketplace
Baloise aims to pay basic salaries that are broadly in line
with the market, i. e. around the market median. Total remu-
neration should exceed the market median 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. In 2021, Baloise participated in Willis Towers
Watson’s standard survey on executive compensation. As
surveys of this type cover a wide spectrum of companies,
the peer group used to benchmark the remuneration for
the Corporate Executive Committee is broad-based and
includes companies from outside the financial sector.
In 2022, a market analysis of executive remuneration
structures was carried out with support from PwC. Two
peer group data sets were used for this purpose. One set
comprised 26 SMIM companies, namely Adecco, Bachem,
BB Biotech, Clariant, EMS, Galenica, Kühne + Nagel, PSP, SIG
Combibloc, Straumann, Swiss Prime Site, Temenos, Zur Rose,
ams, Barry Callebaut, Cembra, Dufry, Airport Zurich, Georg
Fischer, Julius Bär, Lindt, Schindler, Sonova, Swatch, Tecan
and VAT (multi-sector peer group) and the other comprised
selected listed Swiss companies, namely Helvetia, Swiss Life,
Swiss Re and Zurich Insurance (insurance peer group).
Individual performance and the Company’s success
As a performance-driven organisation, Baloise always main-
tains 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 achieve-
ment of these targets.
Fairness and transparency
In addition to the regular benchmarking of overall remunera-
tion 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 Swit-
zerland in 2013 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 support from PwC with its EQUAL-SALARY
Remuneration Report
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.
Baloise seeks to maintain fairness in remuneration at all times
and to reduce, wherever possible, differences in pay that
cannot be objectively explained. To this end, it uses internal
fair pay analyses and pay structure assessments for both
initial salary determinations and salary adjustments to ensure
fair pay at Baloise.
Sustainable remuneration
Baloise attaches considerable importance to managing its
business sustainably and retaining high performers. It also
matters to Baloise that its remuneration is not only competitive
and achievement-oriented but also encourages managerial
staff to align their long-term focus with the interests of stake-
holders, particularly our shareholders. To this end, members
of the top three tiers of management are awarded a signifi-
cant portion of their variable remuneration in shares that are
restricted for three years and exposed to market risk during this
period. Those entitled to receive short-term variable remuner-
ation generally have a choice as to what percentage of their
remuneration is paid out and what proportion they receive in
the form of shares. However, this choice is limited for the most
senior managers, for whom a mandatory sliding scale for share
subscriptions applies. Members of the Corporate Executive
Committee must receive at least 50 per cent of their short-term
variable remuneration in the form of shares. 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
remuneration in the total pay package and the proportion
of remuneration awarded in restricted shares or as deferred
remuneration increases in line with employees’ scope of stra-
tegic responsibility and influence. This mandatory purchase of
shares ensures that, compared with the market as a whole,
a significant proportion of the Corporate Executive Commit-
tee’s remuneration is granted in the form of deferred shares.
The expectation is that deferred shares make up 70 per cent
of variable remuneration, which equates to 35 per cent of
total remuneration. Excessive remuneration is prevented by
means of clearly defined caps for the remuneration for the
Board of Directors and the Corporate Executive Committee
that are approved by the Annual General Meeting.
55
Baloise Group Annual Report 2023 Remuneration Report
4. Remuneration system for the
Board of Directors
5. Remuneration system for the
Corporate Executive Committee
The members of the Board of Directors receive fixed remune-
ration for their service as members of the board and its
committees. 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 fee of CHF 1,300,000. He is not entitled to any
variable remuneration. The tasks of the Chairman are des-
cribed in more detail in the corporate governance report
(pages 36 & 37).
All other members of the Board of Directors receive a fee
of CHF 125,000. The Vice-Chairman of the Board of Directors
receives an additional fee of CHF 50,000. The additional fee
for the chair of a committee is CHF 70,000, while committee
members receive an additional fee of CHF 50,000.
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 Asso-
ciation). They do not participate in any share ownership
programmes that are predicated on the achievement of
specific performance targets.
These amounts provide appropriate compensation for
the responsibility and workload involved in their various
functions and have not been raised since 2008.
One-third (Chairman) or one-quarter (other members) of
the annual remuneration is awarded in the form of shares
that remain restricted for three years. The subscription price
is based on the closing price on the first trading day in June,
on which the same 10 per cent discount is granted as on
shares under the Share Subscription Plan.
Shares received by members of the Board of
Directors 2023
Relevant closing
price
as at
CHF
01.06.2023
140.00
Shares received by members of the Board of
Directors 2022
01.06.2022
161.70
Remuneration structure
200%
40%
60%
100%
230%
40%
90%
100%
100%
100%
Minimum
remuneration
Expected value
Maximum
remuneration
Basic salary
100 %
100 %
Short-term variable remuneration
(performance pool)
Long-term variable remuneration
(PSU, value at allocation)
0 %
0 %
60 %
40 %
100 %
90 %
40 %
Mandatory share
subscription
Mandatory share
ownership
At least 50 per cent of the short-term variable
remuneration paid to members of the
Corporate Executive Committee must be
awarded in shares.
Members of the Corporate Executive Committee
must hold shares equivalent to 200 per cent
(300 per cent for the Group CEO) of their basic
salary (within five years of taking office).
For further information, see p. 60.
2023 is the final year for which the remuneration
structure set out in this illustration will apply. As
previously mentioned, the expected values for
short-term and long-term variable remuneration
will change from the 2024 financial year. The new
expected value for short-term variable remunera-
tion is 40 per cent (maximum allocation of 60 per
cent) and the new expected value for long-term
variable remuneration is 60 per cent. The maximum
amount of remuneration that can be allocated is
thus being reduced to a total of 220 per cent. In
line with the increase in the proportion of long-term
variable remuneration, the mandatory proportion
of short-term variable remuneration to be received
in restricted shares will be reduced to 30 per cent
(previously 50 per cent).
56
Baloise Group Annual Report 2023
Remuneration Report
The targets set for the members of the Corporate Executive
Committee comprise annual team targets and individual
performance and development targets. Team targets are
used to assess collaboration across business units and
national subsidiaries, and across all functions and depart-
ments. The quantitative team targets measure the achieve-
ment of relevant Group-wide key figures, especially in relation
to the business plan and strategic ambitions. By contrast,
qualitative team targets focus more on processes than on
outcomes, serving to assess collaboration and conduct. Indi-
vidual performance targets relate to the contributions made
to the group targets by individual members of the Corporate
Executive Committee, while individual development targets
are designed to advance the personal development of the
members of the Corporate Executive Committee.
Short-term variable remuneration is measured on the basis of
the performance pool factor. The Remuneration Committee
determines the performance pool factor for the preceding
year. To this end, the committee systematically analyses the
achievement of targets using the following indicator model.
Basic salary
The basic salary constitutes the level of remuneration that is
commensurate with the functions and responsibilities of the
position concerned. 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 qualifications should be paid the same amount.
Short-term variable remuneration: performance pool
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 members of the Corporate Executive Committee
and other eligible employees in a measure that reflects the
extent to which their achievements in the preceding year
have contributed to achieving the Company’s targets and
satisfying the interests of our shareholders.
Members of the Corporate Executive Committee and emplo-
yees at senior management level are eligible for performance
pool payments.
The variable remuneration paid to employees who perform
control functions (Risk Management, Compliance, Group
Internal Audit and the Appointed Actuary) is structured in
such a way that it is not determined directly by the profitability
of the unit being monitored or by the profitability of individual
products or transactions. The Remuneration Committee
reviews the remuneration paid to the heads of the control
functions on an annual basis.
The Remuneration Committee decides on the short-term
variable remuneration awarded to the individual members
of the Corporate Executive Committee from the available
performance pool based on their achievement of their indi-
vidual targets. The achievement of the targets agreed for the
Group CEO for the reporting year is assessed by the Chairman
of the Board of Directors. The Group CEO assesses the target
achievement of the other members of the Corporate Executive
Committee. Based on the weighted average target achieve-
ment of each member of the Corporate Executive Committee,
the Chairman of the Board of Directors and the Group CEO
each submit a proposal for individual allocations of remu-
neration to the Remuneration Committee. The committee
meets to discuss the material facts relating to each individual
member of the Corporate Executive Committee and make a
final decision on their target achievement in the reporting year
and the remuneration to be awarded to them on this basis.
57
Baloise Group Annual Report 2023 Remuneration Report
Indicator model, performance assessment and the resulting allocation of individual short-term variable remuneration
Performance pool factor
1
2
3
4a
Step 1:
Determination
Budgeted
performance pool
x
Financial assessment
Cash remittance
x
Quality assessment
Customers
Employees
Sustainability
Risk
Available
performance pool
=
100%
0% – 150%
80% – 120%
0% – 150%
4b
5
Appraisal of individual performance
Step 2:
Allocation
Individual share
of the available
performance pool
x
Team target
Individual business target
Individual development target
=
Individual
performance pool
payment
1 Budgeted performance pool:
Total sum of basic salary paid to the Corporate Executive Committee multiplied by the expected value of 60 per cent.
2 Financial assessment:
The financial assessment is based on the cash remittance to Baloise Holding Ltd. 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. The target achievement
rate for the financial assessment is capped at 150 per cent.
3 Quality assessment:
In addition to the assessment of financial performance, the quality of the results is assessed on the basis of four strategic
key factors – employee satisfaction, the sustainability strategy, risk management and the growth of our customer base.
The Company’s performance in these areas is evaluated annually, using medium-term ambitions as the benchmark. The
result of this quality-focused assessment (80–120 per cent) is multiplied by the result of the financial assessment.
4a Available performance pool:
The Remuneration Committee reviews and approves the final size of the performance pool based on the aforementioned
factors. The available performance pool is capped at 150 per cent of the budgeted performance pool. If the performance
pool factor is set at 100 per cent, this means that the targets have been met.
5 Assessment of individual performance and determination of personal performance pool allocations:
The Remuneration Committee discusses and evaluates the performance of each member of the Corporate Executive
Committee in the relevant year under review on the basis of a shared team target and individual performance and devel-
opment targets. This provides the committee with a clear framework and a structured process within which it can use its
discretion to make well-founded decisions. The allocation from the available performance pool (see 4b in the chart) to
each member of the Corporate Executive Committee is determined in accordance with the appraisal of their individual
performance.
58
Baloise Group Annual Report 2023
Long-term variable remuneration: performance share units
The aim of long-term variable remuneration is to strengthen
senior managers’ loyalty to the Baloise Group and align the
interests of senior management with the interests of our
shareholders. 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 deter-
mines 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 Baloise Holding Ltd relative
to a peer group; this measure is referred to as the relative
total shareholder return (rTSR). The peer group comprises the
leading European insurance companies within the STOXX
Europe 600 Insurance Index (see table below).
Companies in the STOXX Europe 600 Insurance Index
(as at 31 December 2023)
ADMIRAL GROUP
MUENCHENER RUECK
AEGON
AGEAS
ALLIANZ
ASR NEDERLAND
ASSICURAZIONI GENERALI
AVIVA
AXA
BALOISE HOLDING
BEAZLEY
DIRECT LINE INSURANCE GROUP
GJENSIDIGE FORSIKRING
HANNOVER RUECK
HELVETIA HOLDING
HISCOX
LEGAL & GENERAL GROUP
NN GROUP
PHOENIX GROUP HOLDINGS
POSTE ITALIANE
POWSZECHNY ZAKLAD
UBEZPIECZEN
PRUDENTIAL
SAMPO
SCOR
STOREBRAND
SWISS LIFE HOLDING
SWISS RE
TALANX
TOPDANMARK
TRYG
ZURICH INSURANCE GROUP
Source: https://www.stoxx.com/index-details?symbol=SXIP
One PSU generally represents an entitlement to one Baloise
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 scenario, 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 hap-
pens, no PSUs are converted into shares and the prospective
entitlements expire. Consequently, the performance multi-
plier increases on a linear basis from the bottom quartile
upwards from 0.5 to 2.0 (see page 67).
Remuneration Report
The performance multiplier is based on the closing stock
market prices on the final trading day of the vesting period,
taking account of dividends paid. Participants receive the
pertinent number of shares once the three-year vesting
period has elapsed.
Any outstanding entitlement to PSUs expires entirely in the
event of a termination of employment during the vesting
period due to poor performance or misconduct or if the
person subsequently engages in any activities in competi-
tion with Baloise. In addition, the Remuneration Committee
has the powers to claw back some or all of the PSUs allo-
cated to an individual or to a group of participants if there
are specific reasons for doing so (malus provision).
Three-year average for rTSR
Previously, rTSR was measured only at the end of
the three-year vesting period. Due to the volatile
nature of share prices, this reliance on one measure-
ment at a single point in time reflects the effective
performance of the management only to a limited
extent. From the 2024 performance period, rTSR will
thus be measured annually for all newly issued plans.
The performance multiplier is determined based on
an average of the percentile scores calculated for
Baloise within its peer group. This approach reduces
the level of randomness associated with a single
measurement and links the assessment more clearly
to the performance of the management over the
relevant three-year period.
Two additional KPIs from 2025
From 2025, two new KPIs will be used alongside rTSR,
meaning that long-term variable remuneration will
be aligned with a total of three strategic objec-
tives of Baloise going forward. The new KPIs are the
combined ratio non-life, i. e. the sum of net claims
incurred and costs relative to insurance revenue,
and EBIT life, i. e. earnings before interest and taxes
in the life insurance business.
These two key figures represent a significant propor-
tion of Baloise’s value creation and are therefore a
good gauge of performance. Alongside rTSR, they
facilitate a well-rounded performance assessment
that ties long-term variable remuneration to the
interests of our shareholders and the performance
of senior management. The new KPIs will be intro-
duced with the 2025 PSU plan.
59
Baloise Group Annual Report 2023 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. Induce-
ment payments are allowable only if they compensate for
lost entitlement to remuneration. Any offsetting payments
of this nature made at the start of an employment contract
must be approved by the Remuneration Committee irrespec-
tive of the amount payable.
Remuneration Report
This is because, against the backdrop of the transi-
tion to IFRS 17/9, the Company will first need to gain
some experience with these key figures in order to
be able to define sustainable long-term targets that
link the performance of senior management to the
payment of long-term variable remuneration in a
logical and meaningful manner.
Share Subscription Plan
Members of the Corporate Executive Committee are obliged
to receive at least half of their short-term variable remunera-
tion in the form of shares. Through the Share Subscription Plan,
they can subscribe to dividend-bearing shares with a closed
period of a minimum of three years at a preferential price
(10 per cent discount). The terms of the Share Subscription
Plan are defined by the Remuneration Committee.
Mandatory share ownership rules for the Corporate
Executive Committee
Each member of the Corporate Executive Committee is
required to hold at least 200 per cent of their basic salary –
or 300 per cent in the case of the Group CEO – in free float
or restricted shares within a period of five years from the
start of their term of office. Since 2023, awarded but as yet
unvested PSUs are no longer being taken into account for the
purposes of compliance with mandatory share ownership
rules, because they have not been converted. This updated
policy has been in effect since 2023 and its requirements
must be met within a period of five years.
Reductions of variable remuneration (malus and
clawback provisions)
In the event of a restatement due to a material breach of
applicable financial reporting standards or an incident of
misconduct on the part of an individual, the Remuneration
Committee may recalculate the allocation of short-term
variable remuneration and use its discretion to reduce
outstanding remuneration entitlements or let a proportion
of allocated but as yet unvested PSUs expire (malus) for
members of the Corporate Executive Committee. The Remu-
neration Committee may also demand that an amount of
variable remuneration that has already been disbursed be
paid back in part or in full by the members of the Corporate
Executive Committee and/or that vested shares awarded
in previous vesting periods be returned to the Company
without consideration or compensation (clawback).
60
Baloise Group Annual Report 2023
Remuneration Report
6. Remuneration for the reporting year
A. Remuneration paid to the members of the Board of Directors
The Annual General Meeting held on 29 April 2022 approved an amount of CHF 3.4 million for the remuneration (including
social security contributions and Share Subscription Plan discount) payable to the Board of Directors for 2023. The amount
paid out was CHF 3.4 million.
Remuneration paid to the members of the Board of Directors
2023
CHF thousand
Dr Thomas von Planta
Chairman of the Board of Directors
Christoph Mäder
Vice-Chairman of the Board of Directors
Dr Maya Bundt
Claudia Dill (until 31 October 2023)
Christoph B. Gloor
Hugo Lasat
Dr Karin Lenzlinger Diedenhofen
Dr Markus R. Neuhaus
Prof. Dr Hans-Jörg Schmidt-Trenz
Prof. Dr Marie-Noëlle Venturi - Zen-Ruffinen
Total for the Board of Directors
Remune-
ration
(shares incl.
discount)
Social
security
contri-
butions
Total
remuneration
Remune-
ration (cash)
866.7
481.7
12.8
1,361.2
221.3
81.9
6.3
309.5
131.3
109.4
178.8
131.3
131.3
183.8
168.8
168.8
48.6
40.5
66.2
48.6
48.6
68.0
62.4
62.4
6.3
6.3
6.3
–
6.3
6.3
–
6.3
186.2
156.2
251.3
179.9
186.2
258.2
231.3
237.6
2,291.7
1,009.0
56.9
3,357.6
Explanatory notes to the table
Remuneration in shares including discount A proportion of the contractually agreed overall remuneration is paid in shares, which remain restricted for three years. Shares are
stated on the basis of the closing price on 1 June 2023 (CHF 140.00). 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 reported in addition to the value of the shares.
Social security contributions The information disclosed for 2023 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 an occupational pension scheme for the Chairman of the Board of
Directors, who works in this role on a full-time basis. No contributions to occupational pension schemes are made for the other members of the Board of Directors.
61
Baloise Group Annual Report 2023 Remuneration Report
Remuneration paid to the members of the Board of Directors
2022
CHF thousand
Dr Thomas von Planta
Chairman of the Board of Directors
Christoph Mäder
Vice-Chairman of the Board of Directors
Dr Maya Bundt (since 30 April 2022)
Claudia Dill (since 30 April 2022)
Christoph B. Gloor
Hugo Lasat
Dr Karin Lenzlinger Diedenhofen
Dr Markus R. Neuhaus
Prof. Dr Hans-Jörg Schmidt-Trenz
Prof. Dr Marie-Noëlle Venturi - Zen-Ruffinen
Dr Andreas Beerli (until 29 April 2022) 1
Thomas Pleines (until 29 April 2022)
Remune-
ration
(shares incl.
discount)
Social
security
contri-
butions
Total
remuneration
Remunera-
tion (cash)
866.8
477.5
12.5
1,356.8
191.3
70.2
6.2
267.7
87.6
87.6
168.8
131.3
131.3
178.8
156.3
168.8
73.8
61.3
32.0
32.0
61.9
48.2
48.2
65.7
57.4
61.9
27.0
22.5
5.8
5.8
6.2
–
6.2
6.2
–
6.2
–
3.1
125.5
125.5
236.9
179.5
185.7
250.6
213.7
236.9
100.8
86.8
Total for the Board of Directors
1 Prior to 2012, newly elected members of the Board of Directors only received six months’ pay in the first calendar year. Remuneration for the first two months following election
to the Board of Directors (May and June) was only paid following their departure. Dr Beerli was elected in 2011 and thus received remuneration totalling CHF 42,099 following his
departure as remuneration for his first two months in the role in 2011. Since 2012, newly elected members of the Board of Directors receive a fee for the full eight months of their
first calendar year and in the year of their resignation they are paid for just four months.
1,004.5
3,366.4
2,303.7
58.2
Explanatory notes to the table
Remuneration in shares including discount A proportion of the contractually agreed overall remuneration is paid in shares, which remain restricted for three years. Shares are
stated on the basis of the closing price on 1 June 2022 (CHF 161.70). 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 reported in addition to the value of the shares.
Social security contributions The information disclosed for 2022 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 an occupational pension scheme for the Chairman of the Board of
Directors, who works in this role on a full-time basis. No contributions to occupational pension schemes are made for the other members of the Board of Directors.
62
Baloise Group Annual Report 2023
Amounts receivable and remuneration on a
non-arm’s-length basis
No remuneration on a non-arm’s-length basis was paid to
former members of the Board of Directors or companies or
individuals who are related to members of the Board of Direc-
tors. 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
current or former members of the Board of Directors or any
of the aforementioned persons or companies have been
waived. No remuneration was paid to former members of
the Board of Directors.
B. Remuneration paid to the members of the Corporate
Executive Committee
Remuneration for 2023
The actual level of remuneration paid to the Corporate
Executive Committee is determined in accordance with the
table below.
Type of remuneration
Determined by
Fixed remuneration for 2023 2022 Annual General Meeting
Variable remuneration
for 2023
– cap
2023 Annual General Meeting
– individual payment
Remuneration Committee in February
2023 for long-term variable remune-
ration and in February 2024 for
short-term variable remuneration
(in compliance with the cap set by
the 2023 Annual General Meeting)
From 2023 onwards, variable remuneration is determined
in advance for the following financial year (in line with the
procedure for fixed remuneration).
The Annual General Meeting held on 29 April 2022 approved
an amount of CHF 4.15 million for the fixed remuneration
(including social security contributions) payable to the
Corporate Executive Committee for 2023. The amount paid
out was CHF 4.0 million. In addition, the Annual General
Meeting held on 28 April 2023 approved a maximum amount
of CHF 5.0 million for the variable remuneration (including
social security contributions and discounted subscrip-
tions under the Share Subscription Plan) payable for 2023.
The total amount paid out was CHF 3.0 million.
On 1 March 2023, the performance share units allocated
in 2020 were converted into shares as scheduled. These
PSUs had a value of CHF 1.3 million at the time of allocation.
The actual value of the shares granted was CHF 0.8 million.
Remuneration Report
The remuneration paid to the members of the Corporate
Executive Committee for the 2023 and 2022 financial years is
set out in the tables below. The disclosure is made in accor-
dance with the accrual principle. The tables include all forms
of remuneration awarded for performance in each finan-
cial year even if individual components are not paid until a
later date.
Distribution of remuneration for 2023
Remuneration
of the Group CEO
Average remuneration
of other members of
the Corporate Executive
Committee
21%
27%
52%
16%
29%
55%
Basic salary
Short-term variable remuneration
Long-term variable remuneration
63
Baloise Group Annual Report 2023 Remuneration Report
Remuneration paid to the members of the Corporate Executive Committee
Total
basic
salary
plus
variable
remuner-
ation
Variable
remuner-
ation as
percent-
age of
basic
salary
Non-
cash
benefits
Social
security
contri-
butions
Total
remu-
neration
Basic
salary
Variable remuneration
Cash
payment
(fixed)
Cash
payment
(varia-
ble)
Share
Sub-
scrip-
tion Plan
PSU
(granted
in 2023)
Total
variable
remu-
neration
2023
CHF thousand
Gert De Winter
Group CEO (until 30 June 2023)
475.0
109.1
132.0
–
241.1
716.1
51 %
–
183.0
899.2
Michael Müller
775.0
177.9
215.5
310.1
703.5
1,478.5
91 %
4.9
203.2 1,686.6
Head of Corporate Division Switzerland
(until 30 June 2023)
Group CEO (since 1 July 2023)
Dr Alexander Bockelmann
Head of Corporate Division IT
Dr Matthias Henny
Head of Corporate Division Asset
Management
600.0
91.9
259.5
240.1
591.5
1,191.5
99 %
–
184.0 1,375.5
550.0
0.0
305.9
220.0
526.0
1,076.0
96 %
4.9
190.9 1,271.8
Clemens Markstein1
275.0
63.2
76.5
45.6
185.2
460.2
67 %
4.9
98.6
563.6
Head of Corporate Division Switzerland
(since 1 July 2023)
Dr Carsten Stolz
550.0
126.3
152.9
220.0
499.2
1,049.2
91 %
4.9
210.9 1,265.0
Head of Corporate Division Finance
Total for the Corporate Executive
Committee
3,225.0
568.5
1,142.3
1,035.8
2,746.6
5,971.6
85 %
19.5
1,070.6
7,061.7
1 Remuneration for Clemens Markstein has been taken into account on a pro rata basis from 1 July 2023. The PSUs allocated to Clemens Markstein as at 1 March 2023 were
also calculated on a pro rata basis from 1 July 2023 and were determined on the basis of the terms applicable before his move to the Corporate Executive Committee.
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 2023 even if individual
components are not paid until a later date. Amounts are gross, before deduction of social security contributions, etc.
Share Subscription Plan Proportion of variable remuneration received directly as shares, which are valued at their market value as at 1 March 2024 = CHF 142.90.
PSUs Disclosure at the value as at the date of allocation (CHF 156.61), measured using a Monte Carlo simulation that calculates a present value for the payout expected at
the end of the vesting period.
Non-cash benefits 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.
64
Baloise Group Annual Report 2023
Remuneration paid to the members of the Corporate Executive Committee
Basic
salary
Variable remuneration
Cash
payment
(fixed)
Cash
payment
(varia-
ble)
Share
Sub-
scrip-
tion Plan
PSU
(granted
in 2022)
Total
variable
remu-
neration
Remuneration Report
Total
basic
salary
plus
variable
remuner-
ation
Variable
remuner-
ation as
percent-
age of
basic
salary
Non-
cash
benefits
Social
security
contri-
butions
Total
remu-
neration
2022
CHF thousand
Gert De Winter
Group CEO
Dr Alexander Bockelmann
Head of Corporate Division IT
Dr Matthias Henny
Head of Corporate Division Asset
Management
950.0
270.8
314.9
380.0
965.7
1,915.7
102 %
–
224.5 2,140.3
600.0
171.1
198.8
240.0
609.9
1,209.9
102 %
2.0
183.9 1,395.8
500.0
0.1
314.0
200.1
514.1
1,014.1
103 %
25.3
183.3 1,222.7
Michael Müller
700.0
184.8
322.4
280.0
787.3
1,487.3
112 %
4.4
203.1 1,694.8
Head of Corporate Division Switzerland
Dr Carsten Stolz
500.0
142.5
165.7
200.1
508.3
1,008.3
102 %
4.4
186.7 1,199.5
Head of Corporate Division Finance
Total for the Corporate Executive
Committee
3,250.0
769.3
1,315.8
1,300.2
3,385.4 6,635.4
104 %
36.1
981.6 7,653.0
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 2022 even if individual
components are not paid until a later date. Amounts are gross, before deduction of social security contributions, etc.
Share Subscription Plan Proportion of variable remuneration received directly as shares, which are valued at their market value as at 1 March 2023 = CHF 156.20.
PSUs Disclosure at the value on the date of allocation (CHF 159.28), measured using a Monte Carlo simulation that calculates a present value for the payout expected at the
end of the vesting period.
Non-cash benefits 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.
Amounts receivable and remuneration on a non-arm’s-
length basis
No remuneration on a non-arm’s-length basis was paid to
former members of the Corporate Executive Committee or
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 current or former members of the
Corporate Executive Committee or any of the aforemen-
tioned persons or companies have been waived.
65
Baloise Group Annual Report 2023 Remuneration Report
Performance pool factor for 2023
For 2023, the Remuneration Committee set a factor of 85 per cent for the performance pool. The outcomes of the
financial and quality assessments are explained in greater detail in the following.
Metrics
Targets
2022 – 2025
Results for 2023 /
annual performance
Performance appraisal by the
Remuneration Committee
1
Financial assessment
Cash
Remittance
CHF 2 billion
CHF 493 million
Overall
status
90 %
90 %
94 %
2,000
1,500
1,000
500
0
2022
2023
2024
2025
54,000 new customers
1.5
1.2
0.9
0.6
0.3
0
2022
2023
2024
2025
Top 29 % of all employers in Europe
Top 5
Top 10
Top 20
Top 30
Top 40
2022
2023
2024
2025
In 2023, we generated cash remittance of
CHF 493 million. This means that we remain
well on track for our 2022–2025 strategy
phase. Negative impacts on profit under
local law due to extraordinary loss events
were offset by one-off measures affecting
cash. The appraisal of target achievement
takes account of this through a mark-down.
The environment remains challenging. In
2023, customer growth fell short of our
expectations as just 54,000 new customers
were added. A narrowing of the focus of
our innovation efforts and stricter selection
meant that our customer base grew less
than anticipated. Additional measures to
boost customer growth in the coming years
are being developed.
With regard to our employee target, we were
able to achieve a positioning in the top 29
per cent in 2023. This represents an improve-
ment compared with 2022. The Company’s
ambition is to rank among the top 5 per cent
by 2025. This target has not been reached
yet. A very low proportion of dissatisfied
employees (3 per cent) and our relative
progress show that our efforts in this area
are bearing fruit.
Baloise’s reputation remained strong year
on year despite the transition from the
“Basler Versicherungen” brand to “Baloise”
as a unified brand identity. The Group’s ESG
ratings also remained solid and did not
change materially overall compared with
2022. We were able to maintain, and
in some respects improve, our relative
positioning in the market.
2
Quality assessment
Customers
1.5 million
new customers
Employees
Top 5 % of all
employers in
Europe by the
end of 2025
Sustainability
Upper mid-
level ranking
in the indices
published by
MSCI and
Sustainalytics,
the SAM Score
by S&P, and
RepTrak
MSCI: AA
80th percentile
Sustainalytics: 20.8
70th percentile
SAM Score: 36
60th percentile
RepTrak: 69.4
Risk
Positive
integral
qualitative risk
assessment
Overall assessment: good
Baloise’s capital strength in terms of
solvency remains stable. The Company
is well capitalised and our S&P rating of
A+ reflects Baloise’s consistently strong
valuation. The compliance score is satis-
factory and has improved compared
with 2022.
x1
2 =
Performance pool factor for 2023
85 %
66
Baloise Group Annual Report 2023
Assessment of the Corporate Executive Committee’s
performance in 2023
The team targets for the Corporate Executive Committee
comprise quantitative and qualitative targets. Alongside
the financial performance of the Group, the focus in 2023
was on the implementation of Simply Safe: Season 2. 2023
brought a whole host of unexpected developments that
were addressed swiftly and systematically by the Corporate
Executive Committee. The measures put in place are already
proving effective and further steps are being prepared. But
under the prevailing adverse conditions, the performance
fell short of our expectations in various respects. Changes
in the external environment led us to focus our innovation
initiatives primarily on profitability rather than growth (at
the expense of portfolio quality), which was reflected in a
considerably lower number of new customers. Exceptional
circumstances in respect of large claims, combined with the
trajectory of interest rates, had an adverse impact on finan-
cial performance. Moreover, the performance of our share
price was not satisfactory in 2023. However, cash generation
was up by 5 per cent year on year.
PSUs for the period 2020 to 2023
During the calculation period, Baloise was ranked 26th out
of the 35 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 0.61 (1st
place = performance multiplier of 2; 28th place = perfor-
mance multiplier of 0.5; 29th place to 35th place = perfor-
mance multiplier of 0).
Range for the performance multiplier and Baloise’s
ranking during the 2020–2023 calculation period
Remuneration Report
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 tables below.
Completed PSU plans
Price
when
granted
(CHF)
Price
when
converted
(CHF)
Perfor-
mance
multiplier
Value
when
converted
(CHF)
2018–2021
149.20
158.90
2019–2022
163.00
154.10
2020–2023
154.90
156.50
1.22
0.67
0.61
193.85
103.25
95.45
The table shows the PSU plans that expired in the past three years.
Current PSU plans
Price
when
granted
(CHF)
Interim
valuation
upon
conver-
sion (CHF)
Perfor-
mance
multiplier
Value
when
converted
(CHF)
2021–2024
158.90
131.80
2022–2025
154.10
131.80
2023–2026
156.50
131.80
0.00
0.00
0.00
0.00
0.00
0.00
Overall
growth
in value
30 %
–37 %
–38 %
Overall
growth
in value
–100 %
–100 %
–100 %
The table shows the interim valuation of the three current PSU plans as at 31 December
2023.
The interim valuation of the current plans as at 31 December
2023 shows the value at which the PSUs would have been
converted if the vesting period had ended on 31 December
2023.
2.00
1.50
1.00
0.50
0.00
35th place 28th place 19th place 10th place
1st place
26th place (Baloise) equates to a performance multiplier of 0.61
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 out of the 35 companies in the STOXX Europe 600 Insurance Index.
This means that a person who was granted, for example, a
prospective entitlement to 100 shares in 2020 will receive 61
shares upon conversion in 2023 based on the performance
multiplier of 0.61.
67
Baloise Group Annual Report 2023 Remuneration Report
C. Loans and credit facilities granted to members of
the Board of Directors and the Corporate Executive
Committee (as at 31 December)
Loans and credit facilities are offered at arm’s-length market
rates. 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 (but not
negative interest rates) and at a preferential interest rate
for fixed-rate mortgages.
There are no loans or credit facilities that were extended at
non-arm’s-length market rates to former members of the
Board of Directors or the Corporate Executive Committee
or 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. There are no outstanding policy loans.
Loans and credit facilities granted to members of the Board
of Directors and the Corporate Executive Committee
(as at 31 December)
Total
2023
2022
CHF thousand
Total for the Board of Directors
–
Corporate Executive
Committee member
with the highest
outstanding loan:
Dr Carsten Stolz
Head of Corporate Division Finance
Dr Alexander Bockelmann
Head of Corporate Division IT
–
–
1,600.0
–
2,190.5
Other members of the Corporate Executive
Committee
2,963.4
3,786.7
Total for the Corporate Executive
Committee
4,563.4
5,977.2
68
Baloise Group Annual Report 2023
Remuneration Report
D. Shares and options held
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
2023
2022
2023
2022
2023
2022
2023
2022
Quantity
Dr Thomas von Planta
4,302
3,286
9,698
6,714
14,000
10,000
0.031 %
0.022 %
Chairman
Christoph Mäder
Vice-Chairman
Dr Maya Bundt
Claudia Dill 1
Christoph B. Gloor
Hugo Lasat
Dr Karin Lenzlinger
Diedenhofen
Dr Markus R. Neuhaus
Prof. Dr Hans-Jörg
Schmidt-Trenz
Prof. Dr Marie-Noëlle
Venturi - Zen-Ruffinen
Total for the Board
of Directors
Percentage of issued
share capital
1,088
733
2,346
2,116
3,434
2,849
0.007 %
0.006 %
0
–
9,867
1,379
0
355
693
0
0
9,410
1,024
0
0
1,545
–
2,277
1,972
1,863
2,282
1,198
1,198
2,261
1,980
1,516
2,151
1,545
–
12,144
3,351
1,863
2,637
1,198
1,198
11,671
3,004
1,516
2,151
0.003 %
–
0.027 %
0.007 %
0.004 %
0.006 %
0.003 %
0.003 %
0.025 %
0.007 %
0.003 %
0.005 %
338
2,128
2,037
2,821
2,375
0.006 %
0.005 %
1,481
1,024
2,250
2,261
3,731
3,285
0.008 %
0.007 %
19,165
15,815
26,361
23,432
45,526
39,247
0.099 %
0.086 %
0.042 %
0.035 %
0.058 %
0.051 %
0.099 %
0.086 %
1 Following the resignation of Claudia Dill from the Board of Directors with effect from 31 October 2023, her shareholdings are not included in the presentation of shareholdings
as at the end of 2023.
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.
Options Members of the Board of Directors do not hold any options on Baloise shares.
69
Baloise Group Annual Report 2023 Remuneration Report
Shares held by members of the Corporate Executive Committee (as at 31 December)
Discretionary
shares Restricted shares
Total share
ownership
Percentage of
issued
share capital
Prospective
entitlements
(PSUs)
Quantity
Gert De Winter 1
Group CEO (until 30 June 2023)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
–
32,073
–
6,139
–
38,212
–
0.083 %
–
6,980
Michael Müller
32,166
28,115
5,883
6,682 38,049
34,797 0.083 % 0.076 %
5,341
5,144
Head of Corporate Division Switzerland
(until 30 June 2023)
Group CEO (since 1 July 2023)
Dr Alexander Bockelmann
Head of Corporate Division IT
3,928
880
16,278
21,856 20,206
22,736 0.044 % 0.050 %
4,414
4,409
Dr Matthias Henny
10,577
13,522
15,588
20,975 26,165
34,497 0.057 % 0.075 %
3,806
3,674
Head of Corporate Division Asset
Management
Clemens Markstein
4,114
–
2,637
–
6,751
–
0.015 %
–
1,710
–
Head of Corporate Division Switzerland
(since 1 July 2023)
Dr Carsten Stolz
2,019
2,290
3,456
3,247
5,475
5,537 0.012 % 0.012 %
3,806
3,674
Head of Corporate Division Finance
Total for the members
of the Corporate Executive Committee
52,804
76,880 43,842
58,899 96,646
135,779 0.211 % 0.296 %
19,077
23,881
Percentage of issued share capital
0.115 % 0.168 % 0.096 % 0.129 % 0.211 %
0.296 %
1 Following the resignation of Gert De Winter from the Corporate Executive Committee with effect from 30 June 2023, his shareholdings are not included in the presentation of
shareholdings as at the end of 2023.
Explanatory notes to the table
Shareholdings Includes shares held by related parties (spouses or life partners; children under 18 years or dependent family members; companies owned or controlled by directors;
individuals who act as trustees for them; children, relatives, companies and trustees of the spouse or life partner).
Restricted shares Includes loan-financed shares connected with the Share Participation Plan. Shares received in connection with share-based remuneration programmes are
subject to a closed period of three years.
Options Options held in connection with the Share Participation Plan are not reported here because they were written in order to hedge loans and do not originate from a separate
option plan. Each put option is also offset by a countervailing call option.
Prospective entitlements (PSUs) Number of allocated performance share units (granted as at 1 March 2021, 1 March 2022 and 1 March 2023).
70
Baloise Group Annual Report 2023
Remuneration Report
E. Total remuneration at the Baloise Group
As requested by circular 10/1 issued by the Swiss Financial Market Supervisory Authority on the subject of remuneration,
Baloise has published 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 in the
table below include all forms of remuneration awarded for 2023 even if individual components are not paid until a later date.
Total and variable remuneration in the Baloise Group
Cash
Shares
Prospective
entitlements
Total
CHF million
Total remuneration
849.7
822.4
3.2
5.2
4.7
5.4
857.6
833.0
2023
2022
2023
2022
2023
2022
2023
2022
Total variable remuneration (total
pool)
Number of beneficiaries
Total outstanding
deferred remuneration
150.8
5,858
153.1
5,814
3.2
176
5.2
276
4.7
68
5.4
78
158.7
163.7
–
–
105.9
110.0
14.2
14.9
120.1
124.9
Debits / credits for remuneration for
previous reporting periods recognised
in profit or loss
0.3
– 0.0
Total inducement payments made
Number of beneficiaries
Total severance payments
made
Number of beneficiaries
0.2
9
5.1
87
0.2
26
3.1
56
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.3
0.2
– 0.0
0.2
5.1
3.1
–
–
–
–
–
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, allocation 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. For members of the Board of Directors and the Corporate Executive Committee, such payments are allowable only if they compensate for lost
entitlement to remuneration.
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.
71
Baloise Group Annual Report 2023 Remuneration Report
Appendix 2: Report of the statutory auditor to the Annual General Meeting of
Baloise Holding Ltd, Basel
Please refer to the German version of the Baloise Annual Report 2023, page 72, for the report of the statutory auditor on the
audit of the renumeration report. The auditor’s opinion dated 22 March 2024 confirms compliance with Swiss law and the
Company’s articles of incorporation.
Please also refer to the disclosure on page 357 “Information on the Baloise Group” referencing the fact that only the German
text of the annual report is legally binding.
72
Baloise Group Annual Report 2023
Remuneration Report
This page has been left empty on purpose.
73
Baloise Group Annual Report 2023 Remuneration Report
This page has been left empty on purpose.
74
Baloise Group Annual Report 2023 Remuneration Report
This page has been left empty on purpose.
75
Baloise Group Annual Report 2023 76
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
77
Financial Report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated annual financial
statements
1.
General comments
2.
Segment information
3.
Insurance business
4.
Investments and financial liabilities
5. Funding
6.
Employee benefits
7. Taxes
8. Other income statement line items
9.
Other balance sheet line items
10. Other disclosures
11. Risk management
78
79
80
82
84
86
86
95
100
129
156
159
167
171
172
180
190
12. Principles of consolidation; accounting policies 220
Report of the statutory auditor
to the Annual General Meeting of
Baloise Holding Ltd, Basel
250
76
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
77
77
Consolidated income statement
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from insurance contracts
Insurance finance income and expenses from reinsurance contracts
Insurance finance income and expenses
Interest revenue calculated using the effective interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
Result from investments and financial contracts
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period
Profit attributable to:
Shareholders
Non-controlling interests
Earnings / loss per share:
Basic (CHF)
Diluted (CHF)
1 First-time adoption of IFRS 9 and IFRS 17.
Note
2023
2022
(restated) 1
3.1
3.4.1f
3.5.1f
5,412.4
5,339.6
– 4,666.9
– 4,678.4
– 151.8
593.7
– 57.5
603.7
3.2
3.2
4.1
4.1
4.1
4.1
– 2,833.2
6,343.0
26.8
27.8
– 2,806.4
6,370.8
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
2.2
– 9.8
4.3.1
– 842.7
1,490.5
2,982.2
– 6,246.8
8.1
8.2
10.2.3
9.1
5.1
7.1
10.1
141.7
161.6
118.3
120.0
– 691.7
– 633.8
– 20.7
– 16.0
344.4
– 26.2
318.2
– 81.9
236.2
4.9
29.3
366.4
– 22.4
343.9
– 99.5
244.5
239.6
– 3.3
247.8
– 3.4
5.29
5.29
5.49
5.48
78
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
79
Financial Report
Consolidated statement of comprehensive income
CHF million
Profit / loss for the period
Other comprehensive income
Items not to be reclassified to the income statement
Change in reserves arising from reclassification of investment property
Change in other reserves on associates and joint ventures
Change in reserves arising from assets and liabilities of post-employment benefits
(defined benefit plans)
Change in other reserves on equity instruments at FVOCI
Total items not to be reclassified to the income statement
Items to be reclassified to the income statement
Change in other reserves on associates and joint ventures
Change in hedging reserves for derivative financial instruments held as hedges of
a net investment in a foreign operation
Change in other reserves on debt investments at FVOCI
Change in other reserves on loans at FVOCI
Insurance finance income and expenses from insurance contracts
Insurance finance income and expenses from reinsurance contracts
Exchange differences of foreign operations
Total items to be reclassified to the income statement
Total other comprehensive income
Comprehensive income
Attributable to:
Shareholders
Non-controlling interests
Note
2023
2022
(restated)
236.2
244.5
0.1
–
– 55.1
1.2
– 53.7
0.0
–
167.6
– 44.4
123.3
– 2.2
– 0.1
77.2
266.0
22.6
– 63.6
– 0.5
– 328.1
– 28.6
– 10.5
– 701.1
– 76.1
53.1
25.1
– 123.2
– 832.8
– 82.3
– 709.5
154.0
– 465.0
157.4
– 3.5
– 460.8
– 4.3
9.5
9.5
9.5
78
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
79
Financial Report
Consolidated balance sheet
CHF million
Assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Investment property
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Note
31.12.2023
31.12.2022
(restated)
01.01.2022
(restated)
9.1
9.2
10.2.3
4.2.1
4.2
636.1
214.8
318.1
594.6
237.4
344.7
560.0
265.8
316.0
8,248.6
8,495.1
8,464.5
14,932.9
16,276.7
19,172.6
336.7
611.6
903.6
14,596.2
15,665.1
18,269.0
Financial instruments with characteristics of debt
4.2
32,153.4
31,264.6
38,216.3
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Derivative financial instruments
Insurance contract assets
Reinsurance contract assets
Receivables from employee benefits
Financial receivables
Deferred tax assets
Current income tax assets
Other assets
Cash and cash equivalents
Non-current assets and disposal groups classified as held for sale
10.2.5
Total assets
125.0
5,654.7
109.1
5,482.6
114.0
6,257.6
26,373.7
25,672.9
31,844.6
4.2
15,602.3
14,665.8
16,193.2
10,138.4
555.0
4,909.0
1,072.6
68.4
450.5
6.3
727.2
207.1
57.7
100.3
8,933.5
583.4
5,149.0
809.3
43.0
614.6
7.3
600.6
239.3
65.3
123.1
7,735.5
694.9
7,762.9
896.1
–
767.8
5.9
621.8
177.6
66.7
139.6
2,985.3
91.1
3,370.8
242.4
4,073.5
–
77,872.8
77,994.6
89,937.2
4.2
3.4
3.5
6.1
4.2
7.3
9.3
4.2
80
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
81
Financial Report CHF million
Equity and liabilities
Equity
Share capital
Capital reserves
Treasury shares
Other reserves
Retained earnings
Equity before non-controlling interests
Non-controlling interests
Total equity
Liabilities
Insurance contract liabilities
Reinsurance contract liabilities
Liabilities arising from financial contracts
Recognised at amortised cost (AC)
Recognised at fair value through profit or loss (FVPL)
Financial liabilities
Non-technical provisions
Derivative financial instruments
Liabilities arising from employee benefits
Deferred tax liabilities
Current income tax liabilities
Other liabilities and other financial liabilities
Liabilities included in non-current assets and disposal groups
classified as held for sale
Total liabilities
Total equity and liabilities
Note
31.12.2023
31.12.2022
(restated)
01.01.2022
(restated)
9.4
4.6
378.6
– 48.8
4.6
377.3
– 71.6
4.6
376.8
– 84.9
9.5
– 1,892.6
– 1,803.3
– 1,067.2
4,808.3
3,250.0
9.3
4,898.2
3,405.2
12.2
4,941.2
4,170.6
14.2
3,259.3
3,417.4
4,184.7
3.4
3.5
49,819.5
49,753.3
58,947.0
2.5
67.5
–
4.3.2
19,936.3
19,839.7
21,878.8
5.2
9.6
4.2.5
6.1
7.3
8,123.3
7,983.3
8,236.0
11,813.1
11,856.5
13,642.9
2,391.3
2,609.4
2,425.7
111.9
83.4
635.5
419.4
56.5
1,002.4
112.5
135.8
640.5
380.6
29.9
855.0
136.4
89.4
926.4
468.1
39.3
841.3
10.2.5
154.7
152.9
–
74,613.5
74,577.1
85,752.5
77,872.8
77,994.6
89,937.2
80
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
81
Financial Report Consolidated statement of changes in equity
Share capital
Capital
reserves
Treasury
shares
Other
reserves
Retained
earnings
Equity
before non-
controlling
interests
Non-
controlling
interests
2023
CHF million
Balance as at 1 January
4.6
377.3
– 71.6
– 1,803.3
4,898.2
3,405.2
Total
equity
3,417.4
236.2
– 82.3
154.0
12.2
– 3.3
– 0.1
– 3.5
–
– 0.4
–
– 335.7
–
–
–
–
0.8
–
–
–
– 33.3
54.1
0.1
4.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25.5
0.1
3.2
–
–
–
–
–
–
– 33.3
28.7
–
–
– 27.4
27.4
–
–
–
–
–
–
–
239.6
239.6
– 82.2
– 82.2
–
239.6
– 82.2
157.4
– 7.1
7.1
–
– 335.3
– 335.3
–
–
–
–
–
–
–
–
– 33.3
54.1
0.1
3.2
–
–
–
–
–
–
–
–
–
–
–
–
0.3
0.3
– 1.4
– 1.1
– 1.6
– 1.6
1.6
–
4.6
378.6
– 48.8
– 1,892.6
4,808.3
3,250.0
9.3
3,259.3
Profit / loss for the period
Other comprehensive
income
Comprehensive income
Other reserves
transferred directly
to retained earnings
Dividend
Capital increase /
repayment
Purchase of
treasury shares
Sale of treasury shares
Purchase and sale of
options on treasury shares
Share-based payments
Allocation of treasury
shares as part of share-
based remuneration
programmes
Cancellation of
(treasury) shares
Increase / decrease in
non-controlling interests
due to change in the scope
of consolidation
Increase / decrease in
non-controlling interests
due to change in the
percentage of share-
holding
Balance as at
31 December
82
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83
Financial Report Share capital
Capital
reserves
Treasury
shares
Other
reserves
Retained
earnings
Equity
before non-
controlling
interests
Non-
controlling
interests
Total
equity
2022
CHF million
Balance as at 1 January
4.6
376.8
– 84.9
178.9
6,809.7
7,285.1
14.8
7,299.9
Initial application IFRS 9
(after taxes)
Initial application IFRS 17
(after taxes)
Effects of restatement
relating to IAS 16 as a
result of the initial
application of IFRS 17
(after taxes)
Balance as at 1 January
(adjusted)
Profit / loss for the period
Other comprehensive
income
Comprehensive income
Other reserves
transferred directly
to retained earnings
Dividend
Capital increase /
repayment
Purchase of
treasury shares
Sale of treasury shares
Purchase and sale of
options on treasury shares
Share-based payments
Allocation of treasury
shares as part of share-
based remuneration
programmes
Cancellation of
(treasury) shares
Increase / decrease in
non-controlling interests
due to change in the scope
of consolidation
Increase / decrease in
non-controlling interests
due to change in the
percentage of share-
holding
Balance as at
31 December
–
–
–
–
–
–
–
–
–
– 1,758.6
2,844.9
1,086.3
0.1
1,086.3
512.6
– 4,823.5
– 4,310.9
– 0.6
– 4,311.5
–
109.9
109.9
–
109.9
4.6
376.8
– 84.9
– 1,067.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25.1
– 3.1
4.9
–
–
–
–
–
–
– 42.2
29.1
–
–
– 26.4
26.4
–
–
–
–
–
–
–
– 708.6
– 708.6
– 27.5
–
–
–
–
–
–
–
–
–
–
4,941.2
247.8
–
247.8
4,170.6
247.8
– 708.6
– 460.8
14.2
– 3.4
– 0.9
– 4.3
4,184.7
244.5
– 709.5
– 465.0
27.5
– 316.5
–
– 316.5
–
– 0.4
–
– 316.8
–
–
–
–
–
–
–
–
–
– 42.2
54.2
– 3.1
4.9
–
–
–
–
–
–
–
1.1
–
–
–
– 1.8
– 1.8
1.8
–
– 42.2
54.2
– 3.1
5.9
–
–
–
–
4.6
377.3
– 71.6
– 1,803.3
4,898.2
3,405.2
12.2
3,417.4
82
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83
Financial Report Consolidated cash flow statement
Note
2023
2022
(restated)
CHF million
Cash flow from operating activities
Profit before taxes
Adjustments for
Depreciation, amortisation and impairment of property, plant and equipment and
of intangible assets
Realised gains and losses on property, plant and equipment and on intangible assets
8.3
Share of profit (loss) of associates and joint ventures
Realised gains and losses on financial assets and investment property
Profit and loss from owner-occupied properties FV
Change in expected credit loss
Share-based payments
Other non-cash income and expenses
Change in assets and liabilities from operating activities
Insurance contract assets and liabilities
Reinsurance contract assets and liabilities
Liabilities arising from financial contracts
Financial receivables
Change in other assets and other liabilities
Change in operating assets and liabilities
Purchase and sale of owner-occupied properties FV
Purchase and sale of investment property
Purchase and sale of financial instruments with characteristics of equity
Purchase and sale of financial instruments with characteristics of debt
Addition and disposal of mortgages and loans
Addition and disposal of derivative financial instruments
Borrowing costs
Taxes paid
Cash flow from operating activities
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 and joint ventures
Sale of investments in associates and joint ventures
Dividends from associates and joint ventures
Cash flow from investing activities
84
Baloise Group Annual Report 2023
4.2.1
5.1
9.1
9.2
10.2.1
318.2
343.9
76.0
– 0.1
20.7
– 2,555.4
16.0
– 2.2
4.0
– 36.4
79.1
– 0.2
– 4.9
8,888.5
– 29.3
9.8
5.9
14.0
1,126.8
– 7,791.8
108.8
675.4
– 164.5
232.6
– 2.9
269.6
1,589.7
– 270.8
– 892.0
– 8.4
26.2
– 35.9
495.5
– 16.2
0.6
– 40.1
2.2
– 145.8
16.0
– 17.9
2.4
7.2
84.2
– 1,577.0
18.1
– 175.0
– 0.5
– 50.3
283.4
– 946.7
359.9
154.2
22.4
– 75.6
– 388.0
– 12.8
4.0
– 31.3
0.7
–
–
– 40.1
0.1
8.0
– 191.6
– 71.4
Baloise Group Annual Report 2023
85
Financial Report
CHF million
Cash flow from financing activities
Additions to financial liabilities
Disposals of financial liabilities
Borrowing costs paid
Repayment of lease liabilities
Purchase of treasury shares
Sale of treasury shares
Purchase and sale of options on 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
Reclassification to non-current assets and disposal groups classified as held for sale
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 customers and third parties
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
2023
2022
(restated)
5.2.1
5.2.1
5.2.1
5.2.2
549.9
– 800.0
– 19.8
– 12.3
– 33.3
54.1
0.1
– 0.4
– 335.3
– 596.9
534.7
– 350.0
– 20.9
– 12.1
– 42.2
54.2
– 3.1
– 0.4
– 316.5
– 156.3
– 293.1
– 615.8
3,370.8
– 293.1
–
– 92.5
4,073.5
– 615.8
–
– 86.9
2,985.3
3,370.8
2,068.9
2,045.6
0.1
916.3
2,985.3
188.2
854.7
36.4
– 25.8
0.2
1,325.1
3,370.8
89.9
660.7
128.0
– 15.0
84
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Baloise Group Annual Report 2023
85
Financial Report
Notes to the consolidated annual financial
statements
1. General comments
Basis of preparation
1.1
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 Baloise 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 finan-
cial 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 the IFRS Accounting Standards, 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 2024 the Baloise 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 Baloise Holding Ltd.
Application of new financial reporting standards
1.2
1.2.1 Newly applied IFRS and interpretations
In May 2023, the IASB issued amendments to IAS 12 Income Taxes that grant a temporary exception to the requirement to
recognise and disclose deferred tax assets and liabilities in connection with the pillar 2 international tax reforms (global
minimum tax). The Baloise Group is applying this exception.
On 1 January 2023, the Baloise Group adopted the following standards with retrospective effect from 1 January 2022:
● IFRS 17 Insurance Contracts
● IFRS 9 Financial Instruments
The nature and extent of the material effects resulting from first-time adoption of these standards are summarised below.
First-time adoption of IFRS 17 and IFRS 9 also led to changes in the presentation of other financial information.
86
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87
Financial Report The newly applied IFRS 17 and IFRS 9 contain numerous technical terms that, in practice, are often used only in their abbre-
viated form. The Baloise Group uses the most common abbreviations, which are set out below:
List of abbreviations IFRS
Abbreviation
Original English term
AC
CF
CSM
CU
DAC
DPF
EaD
ECL
FRA
FCF
FV
FVA
FVOCI
FVPL
GIC
GMM
HTM
IACF
IFIE
LaR
LC
LGD
LIC
LRC
amortised cost
cash flow
contractual service margin
coverage unit
deferred acquisition costs
discretionary participation feature
exposure at default
expected credit loss
full retrospective approach
fulfilment cash flows
fair value
fair value approach
fair value through OCI
fair value through profit or loss
groups of insurance contracts
general measurement model
held to maturity
insurance acquisition cash flows
insurance finance income or expenses
loans and receivables
loss component
loss given default
liability for incurred claims
liability for remaining coverage
LORECO
loss recovery component
MRA
OCI
PAA
PD
PIC
POCI
PVFCF
RA
SPPI
VFA
modified retrospective approach
other comprehensive income
premium allocation approach
probability of default
portfolios of insurance contracts
purchased or originated credit-impaired
present value of future cash flows
risk adjustment
solely payments of principal and interest
variable fee approach
86
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87
Financial Report IFRS 17 Insurance Contracts
IFRS 17 establishes uniform principles, consistent with the principles in other IFRS, for the measurement, presentation and
disclosure of insurance contracts and reinsurance contracts. This note provides an overview of the requirements in the
standard. The details of the accounting policies applied by Baloise are described in note 12.1.
Measurement is based on projections of the net cash flows from the contracts assigned to groups of insurance contracts
(GICs). The projections are updated on an ongoing basis. These cash flows are discounted using current, risk-congruent
discount rates and carry a risk adjustment (RA) in order to reflect the price of taking on non-financial risk. If the initial
measurement with the fulfilment cash flows (FCFs) calculated in this way yields a positive margin for the services still to
be performed under the insurance contract and for the investment-related services, such margin is deferred within insur-
ance contract liabilities as the contractual service margin (CSM) and is subsequently recognised in profit or loss over the
remaining coverage period.
Assets and liabilities from insurance business are recognised separately, broken down into coverage underwritten by
the Baloise Group itself (insurance contracts issued) and outward reinsurance (reinsurance contracts held). Furthermore,
the disclosures for all types of insurance contract are broken down into the liability for remaining coverage (LRC) and the
liability for incurred claims (LIC). For a significant part of non-life insurance business, measurement of the LRC largely follows
the previous approach and is based on the deferral of premiums not yet earned.
The revenue from insurance services and investment-related services generally arises from the change in the LRC,
provided that these changes are not attributable to cash inflows from policyholders or financial effects and do not relate
to the performance of services that are not covered by policyholders’ premiums. The IFRS 17 model thus essentially follows
the general revenue approach used in IFRS 15 Revenue from Contracts with Customers, and revenue is no longer reported
directly on the basis of the receipt of premiums. Furthermore, the portion of the policyholder benefits that has to be granted
regardless of the occurrence of an insured event (investment component) is eliminated from the income statement.
The revenue calculated in this way is set against the associated non-financial expenses actually incurred, which include
the insurance services and all costs that are directly attributable to the insurance contracts. Regardless of the timing of
payment, insurance acquisition cash flows are allocated on a systematic basis over the coverage period for recognition as
revenue and at all times in the same amount for recognition as an expense. A longer-term deferral of insurance acquisition
cash flows already paid, but not yet recognised as an expense, is carried out only if the insurance acquisition cash flows
were paid for expected future renewals of existing contracts.
All financial effects from insurance contracts are reported separately, and IFRS 17 provides the option for portfolios of
insurance contracts and reinsurance contracts to recognise the effects of changes to financial assumptions on the LRC
and LIC in other comprehensive income (OCI). When contracts are derecognised from such portfolios, the related OCI
components are recycled. Under IFRS 17, a concept similar to the shadow accounting previously used by the Baloise Group
no longer exists.
If own shares of the Baloise Group or owner-occupied properties are among the underlying items that determine the
policyholder benefits for certain contracts with participation features, these items are measured at FVPL in order to avoid
any accounting mismatches that might otherwise arise.
The cash flows relating to certain policy loans are considered to be part of the insurance contract and are no longer
recognised as separate financial instruments.
88
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89
Financial Report Transition
The Baloise Group introduced IFRS 17 retrospectively using the modified retrospective approach (MRA) and the fair value
approach (FVA) for certain portfolios and certain aspects of classification, grouping and measurement.
A detailed description of the rules governing the measurement, recognition and disclosure of all contracts within the
scope of IFRS 17 can be found in note 12.1.
In life insurance, the Baloise Group measured all of its business existing on the transition date to IFRS 17 (1 January 2022)
on a fully retrospective basis for the longest period of time feasible with respect to data availability for each business unit.
In this context, fully retrospective measurement refers to treating the contracts as if IFRS 17 had been applicable during this
entire period of time. For contracts dating further back, effects from prior periods were measured using either the modified
retrospective approach or the fair value approach, also predominantly depending on data availability.
In the non-life insurance business, Baloise applies the fully retrospective approach almost exclusively. The modified
retrospective approach was used to calculate the historical discounts only for liabilities for incurred claims from claims
years that are a long way in the past.
Measurement of reinsurance contracts, for both life and non-life, uses the same approach as for gross business.
IFRS 9 Financial Instruments
After the temporary exemption from applying IFRS 9 ended, the Baloise Group applied IFRS 9 Financial Instruments with
effect from 1 January 2023 with retrospective effect from 1 January 2022. IFRS 9 sets out accounting principles on the clas-
sification and measurement of financial instruments, the impairment of assets and hedge accounting.
Classification of a financial asset is based on the entity’s business model on the one hand and the characteristics of
the contractual cash flows of the financial asset on the other. Previously, under IAS 39, credit losses were recognised only
when the loss event occurred.
Under the new impairment model in IFRS 9, however, a loss allowance for expected credit losses (ECLs) is recognised.
The IFRS 9 model consists of three stages that determine the amount at which the loss allowance is recognised and the
recognition of interest. At the time of initial recognition, expected losses must be recognised in the amount of the present
value of the twelve-month expected credit loss (stage 1). If the credit risk has increased significantly, the loss allowance has
to be increased to the amount of the lifetime expected credit losses (stage 2). If objective evidence of impairment arises,
interest has to be recognised on the basis of the net carrying amount (stage 3).
The figures for the prior-year period have been adjusted accordingly.
88
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89
Financial Report Recognition and measurement effects
Due to the classification criteria ‘business model’ and ‘characteristics of the contractual cash flows’ (satisfaction of the
criteria for the SPPI test), the debt instruments that were classified as measured at amortised cost (AC) under IAS 39
continue to satisfy these criteria and are therefore still recognised at AC, provided they are not designated as at FVPL in
the life insurance business. Similarly, the debt instruments that were classified as available for sale (AFS) under IAS 39 are
measured at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVPL) under
IFRS 9. The debt instruments that were previously measured at fair value through profit or loss under IAS 39 continue to be
measured at fair value through profit or loss (FVPL) under IFRS 9.
The equity instruments that were classified as available for sale (AFS) under IAS 39 are measured either at fair value
through profit or loss (FVPL) or, in the case of equities in the non-life business, at fair value through other comprehensive
income (FVOCI) under IFRS 9.
The gains and losses resulting from the fair value measurement of these transferred equity instruments that were previ-
ously recognised in other comprehensive income were reclassified to retained earnings as at 1 January 2022.
The following tables show the impact of first-time adoption of IFRS 9 on the carrying amounts as at 1 January 2022:
90
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91
Financial Report CHF million
Assets
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Financial instruments with characteristics of debt
Mortgages and loans
Total financial instruments FVOCI
Financial instruments with characteristics of equity
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Financial instruments with characteristics of debt
Financial instruments with characteristics of debt
Mortgages and loans
Mortgages and loans
Derivative financial instruments
Total financial instruments FVPL
Financial instruments with characteristics of debt
Mortgages and loans
Financial receivables
Cash and cash equivalents
Total financial instruments AC
Carrying amount
IAS 39
Carrying amount
IFRS 9
IAS 39
category
31.12.2021
Reclassi-
fication
Remea-
surement
01.01.2022
AFS
AFS
HTM
LaR
AFS
FVPL
AFS
FVPL
HTM
LaR
FVPL
FVPL
HTM
LaR
LaR
LaR
913.6
5,905.6
399.2
678.5
– 10.0
– 100.1
–
–
7,897.0
– 110.1
3,768.1
14,490.3
22,597.3
2,083.2
5,862.3
6,677.6
981.5
902.1
10.6
–
99.5
–
–
– 128.2
– 0.1
– 6.0
–
0.3
52.6
16.4
69.3
–
–
–
–
1,202.7
232.2
–
–
903.6
5,805.8
451.9
694.9
7,856.1
3,778.7
14,490.3
22,696.7
2,083.2
7,064.9
6,781.5
981.4
896.1
57,362.2
– 24.2
1,434.8
58,772.8
114.0
7,761.4
606.2
4,073.5
12,555.1
–
– 24.2
15.6
–
– 8.6
–
114.0
– 1.7
7,735.5
–
–
621.8
4,073.5
– 1.7
12,544.8
Total financial instruments
77,814.3
– 142.9
1,502.4
79,173.7
90
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91
Financial Report CHF million
Liabilities
Liabilities arising from financial contracts
Financial liabilities
Other liabilities and other financial liabilities
Financial liabilities AC
Liabilities arising from financial contracts
Derivative financial instruments
Total other financial liabilities FVPL
Carrying amount
IAS 39
Carrying amount
IFRS 9
IAS 39
category
31.12.2021
Reclassi-
fication
Remea-
surement
01.01.2022
AC
AC
AC
FVPL
FVPL
8,189.7
2,425.7
803.4
11,418.8
– 0.0
0.0
37.9
37.9
46.3
0.0
0.0
8,236.0
2,425.7
841.3
46.3
11,503.0
18,692.7
– 3,925.3
– 1,124.5
13,642.9
89.8
– 0.5
0.0
89.4
18,782.5
– 3,925.8
– 1,124.5
13,732.2
Total financial liabilities
30,201.3
– 3,887.9
– 1,078.2
25,235.2
Expected credit losses (ECLs)
The total amount of loss allowances is based mainly on the expected credit losses for mortgages and loans measured at AC.
They are calculated using the expected credit loss model (ECL) in accordance with the provisions of IFRS 9. The difference
between the impairment previously recognised under IAS 39 and the expected credit losses under IFRS 9 were recognised
in equity (retained earnings) as at the transition date 1 January 2022.
The following table shows the reconciliation from IAS 39 to IFRS 9 on 1 January 2022 for the impairment of financial
instruments:
CHF million
Financial instruments with characteristics of debt FVOCI
from AFS (IAS 39)
from HTM (IAS 39)
Mortgages and loans FVOCI
from LaR (IAS 39)
Mortgages and loans AC
from LaR (IAS 39)
Financial receivables AC
from LaR (IAS 39)
Total
Impairment
IAS 39
Impairment
IFRS 9
31.12.2021
Reclassi-
fication
Remea-
surement
01.01.2022
17.2
17.2
–
–
–
24.7
24.7
3.5
3.5
45.4
–
–
–
–
–
–
–
–
–
–
– 8.0
– 8.0
0.0
0.0
0.0
– 5.9
– 5.9
0.9
0.9
– 13.0
9.1
9.1
0.0
0.0
0.0
18.9
18.9
4.4
4.4
32.4
Application of the new impairment model for financial instruments had a positive impact on retained earnings of
CHF 44.2 million as at 1 January 2022. This includes impairment on FVOCI debt instruments amounting to CHF 9.1 million
that was recognised through other comprehensive income.
92
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93
Financial Report Changes in the fair value of owner-occupied properties
In connection with the assignment of owner-occupied properties recognised under property, plant and equipment as
underlying items for life insurance contracts measured using the VFA, these owner-occupied properties are now measured
at FVPL. Previously, they were measured at amortised cost. This resulted in the remeasurement of owner-occupied properties
from CHF 278.3 million to CHF 418.8 million. The remeasurement effect was recognised directly in retained earnings as at
1 January 2022.
Impact on retained earnings
CHF million
Balance as at 31 December 2021
Remeasurement as a result of the initial application of IFRS 17
Effects from the reclassification of financial assets (and liabilities) (incl. expected losses)
Effects from the reclassification of property, plant and equipment to FVPL under IAS 16
Deferred taxes as a result of the initial application of IFRS 17
Deferred taxes as a result of the initial application of IFRS 9
Deferred taxes as a result of reclassification to FVPL under IAS 16
Balance as at 1 January 2022
Impact on other comprehensive income
CHF million
Balance as at 31 December 2021
Impact as a result of the initial application of IFRS 9
of which: reclassification of financial instruments classified as available for sale (IAS 39)
– Recognised at fair value through OCI (IFRS 9)
– Recognised at fair value through profit or loss (IFRS 9)
of which: derecognition of reserves from reclassification of held-to-maturity financial instruments (IAS 39)
of which: unrealised gains and losses on financial instruments FVOCI (gross)
of which: expected loss on financial instruments with characteristics of debt at fair value through OCI
Deferred taxes due to the initial application of IFRS 9
Impact as a result of the initial application of IFRS 17
of which: derecognition of shadow accounting (IFRS 4)
of which: other reserve from insurance service expenses as a result of the initial application of IFRS 17
Deferred taxes as a result of the initial application of IFRS 17
Balance as at 1 January 2022
Retained
earnings
6,809.7
– 5,949.0
3,599.8
140.5
1,125.5
– 754.9
– 30.6
4,941.2
Other
comprehen-
sive income
178.9
– 2,191.7
– 2,499.7
– 180.4
– 2,319.3
– 3.1
301.8
9.2
433.1
648.1
821.9
– 173.8
– 135.5
– 1,067.2
92
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93
Financial Report IFRSs and interpretations not yet applied
1.2.2
The following new standards and interpretations relevant to the Baloise Group have been published by the IASB but have
not yet come into effect, and have therefore not been applied in the 2023 consolidated annual financial statements:
Standard /
Interpretation
Content
IFRS 16
Lease Liability in a Sale and Leaseback
IFRS 7, IAS 7
Supplier Finance Arrangements
IAS 21
Lack of Exchangeability
Applicable to annual
periods beginning on or
after:
01.01.2024
01.01.2024
01.01.2025
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95
Financial Report 2. Segment information
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.
The revenue generated by the Baloise Group is broken down into the “Non-Life”, “Life”, “Asset Management & Banking” and
“Other Activities” operating segments.
The Non-Life operating segment offers accident and health insurance as well as products relating to liability, motor, prop-
erty 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 operating 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 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.
94
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95
Financial Report Insurance finance income and
expenses from insurance contracts
Insurance finance income and
expenses from reinsurance
contracts
Insurance finance income
and expenses
Interest revenue calculated using
the effective interest method
Investment income
Realised gains and losses
on investments
2.1
Segment reporting by strategic business unit
Switzerland
Germany
Belgium
Luxembourg
Sub-total
Group business
Eliminated
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
Total
2022
CHF million
Insurance revenue
2,440.4
2,416.1
Insurance service expenses
– 2,169.3
– 2,071.3
Insurance service result from
reinsurance contracts
Insurance service result
– 68.1
202.9
– 68.7
276.0
1,066.0
– 878.7
– 54.4
132.9
1,010.3
1,690.3
1,696.6
– 891.1
– 1,392.7
– 1,577.6
– 37.1
82.1
– 69.7
227.9
32.8
151.8
172.6
– 145.6
– 3.5
23.6
172.2
– 129.8
– 14.1
28.3
5,369.3
5,295.2
– 4,586.4
– 4,669.9
205.8
– 207.2
173.3
– 118.8
– 162.7
126.6
– 128.9
5,412.4
5,339.6
Insurance revenue
110.3
– 4,666.9
– 4,678.4
Insurance service expenses
– 195.6
587.3
– 87.0
538.3
2.8
1.4
10.5
65.0
41.1
5.0
19.1
0.4
– 151.8
593.7
– 57.5
603.7
– 1,651.6
2,935.6
– 573.5
1,343.8
– 517.7
1,788.1
– 87.8
280.9
– 2,830.5
6,348.4
– 9.8
5.2
7.1
– 10.7
– 2,833.2
6,343.0
expenses from insurance contracts
2.0
0.4
7.0
22.9
17.1
10.1
5.5
– 2.7
31.6
30.6
2.9
– 2.8
– 7.7
– 0.1
26.8
27.8
contracts
– 1,649.6
2,936.0
– 566.5
1,366.7
– 500.6
1,798.2
– 82.3
278.1
– 2,798.9
6,379.0
– 6.9
2.5
– 0.6
– 10.7
– 2,806.4
6,370.8
224.6
642.5
132.1
641.8
23.3
150.8
15.1
170.0
1,019.7
– 3,692.8
411.1
– 1,506.3
Change in expected credit loss
Result from financial contracts
2.1
– 112.3
– 9.8
105.9
0.1
7.3
0.7
– 10.8
54.6
160.6
336.2
0.0
– 17.8
24.8
167.3
– 2,004.0
– 0.3
– 3.0
5.6
16.6
803.5
– 0.1
2.9
15.6
– 1,611.9
– 0.4
– 720.0
1,329.1
308.2
970.6
174.9
994.8
2,570.4
– 8,815.0
2.1
– 9.8
– 842.9
1,421.3
23.3
0.0
– 15.0
0.0
– 34.8
17.8
0.2
– 73.5
0.0
42.4
– 34.7
– 26.7
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
Interest revenue calculated using
the effective interest method
Investment income
Realised gains and losses
on investments
2.2
– 9.8
Change in expected credit loss
26.8
– 842.7
1,490.5
Result from financial contracts
Result from investments
and financial contracts
1,776.5
– 2,822.7
592.6
– 1,331.2
533.7
– 1,815.3
105.7
– 264.6
3,008.4
– 6,233.8
– 26.5
– 13.2
0.1
2,982.2
– 6,246.8
Income from services rendered
Other operating income
117.2
83.3
116.4
91.0
32.7
19.1
10.6
24.4
9.7
17.2
8.3
14.0
1.9
3.6
2.0
7.5
161.4
123.1
137.2
136.8
158.9
72.7
161.9
20.8
141.7
161.6
118.3
120.0
Income from services rendered
Other operating income
Other operating expenses
– 328.8
– 337.2
– 122.6
– 85.2
– 175.5
– 164.1
– 34.3
– 36.9
– 661.1
– 623.4
– 238.7
– 239.0
– 691.7
– 633.8
Other operating expenses
– 178.7
– 180.8
– 34.2
208.1
– 37.5
228.5
Share of profit (loss) of associates
and joint ventures
Profit and loss from
owner-occupied properties FVPL
Profit / loss before borrowing
costs and taxes
Income between segments
– 21.1
0.4
7.2
6.8
– 0.6
– 0.2
– 14.3
29.9
– 1.7
– 0.6
–
166.2
– 39.6
289.6
– 54.9
93.6
– 16.6
73.7
– 18.7
111.7
– 11.5
Borrowing costs
Profit / loss before
taxes
– 7.4
– 10.3
0.0
0.0
0.0
158.9
279.4
93.6
73.6
111.7
Income taxes
– 21.7
– 42.3
– 35.2
– 22.8
– 35.3
– 5.8
137.2
237.1
58.4
50.8
76.4
– 13.0
–
– 7.2
– 4.0
0.0
– 7.2
–
–
18.2
– 3.0
– 0.4
17.8
– 1.5
16.3
–
–
14.4
– 3.1
0.0
14.3
– 1.2
13.2
– 14.5
7.1
– 6.3
– 2.2
– 20.7
4.9
– 16.0
29.3
–
–
– 16.0
29.3
owner-occupied properties FVPL
389.8
– 70.7
370.5
– 80.7
– 45.4
– 209.8
– 4.1
– 197.2
280.5
277.9
344.4
–
366.4
–
– 7.7
– 10.4
– 18.5
– 12.1
– 26.2
– 22.4
382.0
360.1
– 63.8
– 16.2
318.2
343.9
– 93.7
– 72.1
11.8
– 27.4
– 81.9
– 99.5
Income taxes
288.3
288.0
– 52.0
– 43.6
236.2
244.5
CHF million
Insurance service result from
reinsurance contracts
Insurance service result
Insurance finance income and
Insurance finance income and
expenses from reinsurance
Insurance finance income
and expenses
Result from investments
and financial contracts
Share of profit (loss) of associates
and joint ventures
Profit and loss from
Profit / loss before borrowing
costs and taxes
Income between segments
Borrowing costs
Profit / loss before
taxes
Profit / loss for the period
(segment result)
Segment assets
as at 31 December
35.0
0.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
43,508.0
43,481.0
9,978.5
10,248.5
11,358.6
11,684.3
12,675.4
12,456.0
77,520.6
77,869.9
2,419.5
2,453.4
– 2,067.3
– 2,328.7
77,872.8
77,994.6
Profit / loss for the period
(segment result)
Segment assets
as at 31 December
96
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97
Financial Report 2.1
Segment reporting by strategic business unit
Switzerland
Germany
Belgium
Luxembourg
Sub-total
Group business
Eliminated
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
Total
2022
CHF million
Insurance revenue
2,440.4
2,416.1
1,010.3
1,690.3
1,696.6
Insurance service expenses
– 2,169.3
– 2,071.3
– 891.1
– 1,392.7
– 1,577.6
5,369.3
5,295.2
– 4,586.4
– 4,669.9
205.8
– 207.2
173.3
– 118.8
– 162.7
126.6
– 128.9
5,412.4
5,339.6
Insurance revenue
110.3
– 4,666.9
– 4,678.4
Insurance service expenses
– 68.1
202.9
– 68.7
276.0
– 37.1
82.1
– 69.7
227.9
32.8
151.8
– 195.6
587.3
– 87.0
538.3
2.8
1.4
10.5
65.0
41.1
5.0
19.1
0.4
– 151.8
593.7
– 57.5
603.7
expenses from insurance contracts
– 1,651.6
2,935.6
– 573.5
1,343.8
– 517.7
1,788.1
– 87.8
280.9
– 2,830.5
6,348.4
– 9.8
5.2
7.1
– 10.7
– 2,833.2
6,343.0
2.0
0.4
7.0
22.9
17.1
10.1
5.5
– 2.7
31.6
30.6
2.9
– 2.8
– 7.7
– 0.1
26.8
27.8
– 1,649.6
2,936.0
– 566.5
1,366.7
– 500.6
1,798.2
– 82.3
278.1
– 2,798.9
6,379.0
– 6.9
2.5
– 0.6
– 10.7
– 2,806.4
6,370.8
Insurance service result from
reinsurance contracts
Insurance service result
Insurance finance income and
expenses from insurance contracts
Insurance finance income and
expenses from reinsurance
contracts
Insurance finance income
and expenses
1,066.0
– 878.7
– 54.4
132.9
172.6
– 145.6
– 3.5
23.6
172.2
– 129.8
– 14.1
28.3
224.6
642.5
2.1
– 112.3
132.1
641.8
– 9.8
105.9
23.3
150.8
0.1
7.3
15.1
170.0
0.7
– 10.8
54.6
160.6
336.2
0.0
– 17.8
24.8
167.3
– 2,004.0
– 0.3
– 3.0
5.6
16.6
803.5
– 0.1
2.9
15.6
– 1,611.9
– 0.4
– 720.0
1,329.1
1,019.7
– 3,692.8
411.1
– 1,506.3
308.2
970.6
174.9
994.8
2,570.4
– 8,815.0
2.1
– 9.8
– 842.9
1,421.3
23.3
0.0
– 15.0
0.0
– 34.8
17.8
0.2
– 73.5
0.0
42.4
1,776.5
– 2,822.7
592.6
– 1,331.2
533.7
– 1,815.3
105.7
– 264.6
3,008.4
– 6,233.8
– 26.5
– 13.2
–
–
–
35.0
0.3
– 34.7
– 26.7
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
Interest revenue calculated using
the effective interest method
Investment income
Realised gains and losses
on investments
2.2
– 9.8
Change in expected credit loss
–
–
–
26.8
– 842.7
1,490.5
Result from financial contracts
0.1
2,982.2
– 6,246.8
Result from investments
and financial contracts
Income from services rendered
Other operating income
117.2
83.3
116.4
91.0
32.7
19.1
10.6
24.4
9.7
17.2
8.3
14.0
161.4
123.1
137.2
136.8
158.9
72.7
161.9
20.8
Other operating expenses
– 328.8
– 337.2
– 122.6
– 85.2
– 175.5
– 164.1
– 34.3
– 36.9
– 661.1
– 623.4
– 238.7
– 239.0
owner-occupied properties FVPL
– 14.3
29.9
– 1.7
– 0.6
–
– 16.0
29.3
–
–
– 21.1
0.4
7.2
6.8
– 0.6
– 0.2
– 14.5
7.1
– 6.3
– 2.2
166.2
– 39.6
289.6
– 54.9
93.6
– 16.6
73.7
– 18.7
111.7
– 11.5
389.8
– 70.7
370.5
– 80.7
– 45.4
– 209.8
– 4.1
– 197.2
– 7.4
– 10.3
0.0
0.0
0.0
– 7.7
– 10.4
– 18.5
– 12.1
158.9
279.4
93.6
73.6
111.7
382.0
360.1
– 63.8
– 16.2
Income taxes
– 21.7
– 42.3
– 35.2
– 22.8
– 35.3
– 5.8
– 93.7
– 72.1
11.8
– 27.4
137.2
237.1
58.4
50.8
76.4
– 13.0
288.3
288.0
– 52.0
– 43.6
1.9
3.6
–
–
18.2
– 3.0
– 0.4
17.8
– 1.5
16.3
2.0
7.5
–
–
14.4
– 3.1
0.0
14.3
– 1.2
13.2
–
– 7.2
– 4.0
0.0
– 7.2
– 178.7
– 180.8
– 34.2
208.1
– 37.5
228.5
141.7
161.6
118.3
120.0
Income from services rendered
Other operating income
– 691.7
– 633.8
Other operating expenses
–
–
–
–
–
–
280.5
277.9
– 20.7
– 16.0
344.4
–
4.9
29.3
366.4
–
Share of profit (loss) of associates
and joint ventures
Profit and loss from
owner-occupied properties FVPL
Profit / loss before borrowing
costs and taxes
Income between segments
–
–
–
–
–
–
–
–
– 26.2
– 22.4
318.2
343.9
Borrowing costs
Profit / loss before
taxes
– 81.9
– 99.5
Income taxes
236.2
244.5
Profit / loss for the period
(segment result)
43,508.0
43,481.0
9,978.5
10,248.5
11,358.6
11,684.3
12,675.4
12,456.0
77,520.6
77,869.9
2,419.5
2,453.4
– 2,067.3
– 2,328.7
77,872.8
77,994.6
Segment assets
as at 31 December
96
Baloise Group Annual Report 2023
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97
CHF million
Insurance service result from
reinsurance contracts
Insurance service result
Insurance finance income and
Insurance finance income and
expenses from reinsurance
contracts
Insurance finance income
and expenses
Interest revenue calculated using
the effective interest method
Investment income
Realised gains and losses
on investments
Change in expected credit loss
Result from financial contracts
Result from investments
and financial contracts
Share of profit (loss) of associates
and joint ventures
Profit and loss from
Profit / loss before borrowing
costs and taxes
Income between segments
Borrowing costs
Profit / loss before
taxes
Profit / loss for the period
(segment result)
Segment assets
as at 31 December
Financial Report 2.2
Segment reporting by operating segment
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from
insurance contracts
Insurance finance income and expenses from
reinsurance contracts
Insurance finance income and expenses
Interest revenue calculated using the effective
interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
Result from investments and financial contracts
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
Non-Life
2023
2022
2023
Life
2022
4,020.8
3,944.5
1,399.4
1,403.1
– 3,555.4
– 3,620.7
– 1,118.9
– 1,061.7
– 143.4
321.9
– 45.5
278.4
– 8.8
271.8
– 16.1
325.2
– 104.3
– 49.8
– 2,729.0
6,391.9
24.1
– 80.2
133.0
64.0
– 68.8
0.1
– 15.1
113.2
82.1
82.8
9.6
2.8
18.9
– 40.2
– 2,726.3
6,410.8
83.2
72.2
– 34.3
– 8.3
– 14.4
98.4
57.0
43.7
40.1
905.5
23.1
909.2
2,597.8
– 8,757.3
0.9
– 759.6
2,784.7
14.8
58.0
– 1.2
1,405.7
– 6,420.5
20.3
91.5
Asset Management &
Banking
Other activities
Eliminated
2023
2022
2023
2022
2023
2022
2023
Total
2022
–
–
–
–
–
–
–
140.3
0.5
18.4
1.1
– 69.0
91.4
162.8
14.7
–
–
–
–
–
–
–
71.8
12.8
– 43.1
– 0.4
29.4
70.4
160.5
15.2
– 383.4
– 337.7
– 197.9
– 204.1
– 186.5
– 181.7
– 233.7
– 224.6
– 691.7
– 633.8
– 2.4
–
134.0
– 0.5
133.5
– 44.4
89.1
– 0.2
–
99.4
– 0.2
99.2
– 32.6
66.5
– 10.7
– 16.0
178.5
– 7.3
171.2
– 32.9
138.4
7.3
29.3
259.8
– 10.2
249.6
– 51.4
198.1
– 0.1
–
82.3
0.0
82.2
– 12.6
69.6
0.0
–
64.4
0.0
64.4
– 10.0
54.4
–
–
–
–
–
–
–
19.1
0.5
8.0
0.0
– 34.9
– 7.4
150.7
47.4
– 7.5
–
– 50.4
– 18.4
– 68.8
7.9
– 60.8
– 35.6
– 27.6
–
–
–
–
–
–
–
15.6
0.8
– 53.7
0.0
42.1
4.8
151.2
13.5
– 2.2
–
– 57.2
– 12.0
– 69.2
– 5.4
– 74.6
– 7.8
7.4
0.5
0.0
0.1
– 0.1
0.0
0.0
–
–
36.0
0.3
–
–
–
–
–
–
–
– 268.8
– 41.3
309.8
– 8.0
5,412.4
5,339.6
4.0
4.1
0.1
– 4,666.9
– 4,678.4
– 151.8
593.7
– 57.5
603.7
0.9
– 2,833.2
6,343.0
– 0.7
0.2
26.8
27.8
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from
insurance contracts
Insurance finance income and expenses from
reinsurance contracts
– 2,806.4
6,370.8
Insurance finance income and expenses
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
2.2
– 9.8
– 842.7
1,490.5
Interest revenue calculated using the effective
interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
2,982.2
– 6,246.8
Result from investments and financial contracts
141.7
161.6
– 20.7
– 16.0
344.4
– 26.2
318.2
– 81.9
236.2
118.3
120.0
4.9
29.3
366.4
– 22.4
343.9
– 99.5
244.5
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Profit / loss for the period (segment result)
Income taxes
27.7
0.1
– 270.8
– 43.8
314.2
–
–
–
–
–
–
–
–
–
–
98
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
99
Financial Report Non-Life
Other activities
Eliminated
2023
2022
2023
2023
2022
2023
2022
2023
2022
2023
Total
2022
Asset Management &
Banking
Life
2022
2.2
Segment reporting by operating segment
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from
insurance contracts
Insurance finance income and expenses from
reinsurance contracts
Insurance finance income and expenses
Interest revenue calculated using the effective
interest method
Investment income
Change in expected credit loss
Result from financial contracts
Result from investments and financial contracts
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Income taxes
Profit / loss for the period (segment result)
4,020.8
3,944.5
1,399.4
1,403.1
– 3,555.4
– 3,620.7
– 1,118.9
– 1,061.7
– 143.4
321.9
– 45.5
278.4
– 8.8
271.8
– 16.1
325.2
– 104.3
– 49.8
– 2,729.0
6,391.9
24.1
– 80.2
9.6
2.8
18.9
– 40.2
– 2,726.3
6,410.8
133.0
64.0
– 68.8
0.1
– 15.1
113.2
82.1
82.8
– 2.4
–
134.0
– 0.5
133.5
– 44.4
89.1
83.2
72.2
– 34.3
– 8.3
– 14.4
98.4
57.0
43.7
– 0.2
–
99.4
– 0.2
99.2
– 32.6
66.5
40.1
905.5
0.9
– 759.6
2,784.7
14.8
58.0
– 10.7
– 16.0
178.5
– 7.3
171.2
– 32.9
138.4
23.1
909.2
– 1.2
1,405.7
– 6,420.5
20.3
91.5
7.3
29.3
259.8
– 10.2
249.6
– 51.4
198.1
–
–
–
–
–
–
–
140.3
0.5
18.4
1.1
– 69.0
91.4
162.8
14.7
– 0.1
–
82.3
0.0
82.2
– 12.6
69.6
–
–
–
–
–
–
–
71.8
12.8
– 43.1
– 0.4
29.4
70.4
160.5
15.2
0.0
–
64.4
0.0
64.4
– 10.0
54.4
Realised gains and losses on investments
2,597.8
– 8,757.3
–
–
–
–
–
–
–
19.1
0.5
8.0
0.0
– 34.9
– 7.4
150.7
47.4
–
–
–
–
–
–
–
15.6
0.8
– 53.7
0.0
42.1
4.8
151.2
13.5
– 383.4
– 337.7
– 197.9
– 204.1
– 186.5
– 181.7
– 233.7
– 224.6
– 7.5
–
– 50.4
– 18.4
– 68.8
7.9
– 60.8
– 2.2
–
– 57.2
– 12.0
– 69.2
– 5.4
– 74.6
– 35.6
– 27.6
– 7.8
7.4
0.5
0.0
0.1
– 0.1
0.0
–
0.0
–
36.0
0.3
– 268.8
– 41.3
309.8
–
–
–
–
–
–
–
– 8.0
5,412.4
5,339.6
4.0
4.1
0.1
– 4,666.9
– 4,678.4
– 151.8
593.7
– 57.5
603.7
0.9
– 2,833.2
6,343.0
26.8
27.8
CHF million
Insurance revenue
Insurance service expenses
Insurance service result from reinsurance contracts
Insurance service result
Insurance finance income and expenses from
insurance contracts
Insurance finance income and expenses from
reinsurance contracts
– 2,806.4
6,370.8
Insurance finance income and expenses
296.8
970.6
166.0
994.9
2,555.4
– 8,888.5
2.2
– 9.8
– 842.7
1,490.5
Interest revenue calculated using the effective
interest method
Investment income
Realised gains and losses on investments
Change in expected credit loss
Result from financial contracts
2,982.2
– 6,246.8
Result from investments and financial contracts
– 0.7
0.2
–
–
–
27.7
0.1
– 270.8
– 43.8
314.2
141.7
161.6
118.3
120.0
– 691.7
– 633.8
–
–
–
–
–
–
–
– 20.7
– 16.0
344.4
– 26.2
318.2
– 81.9
236.2
4.9
29.3
366.4
– 22.4
343.9
– 99.5
244.5
Income from services rendered
Other operating income
Other operating expenses
Share of profit (loss) of associates and joint ventures
Profit and loss from owner-occupied properties FVPL
Profit / loss before borrowing costs and taxes
Borrowing costs
Profit / loss before taxes
Profit / loss for the period (segment result)
Income taxes
98
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
99
Financial Report 3. Insurance business
3.1
Insurance revenue
CHF million
Insurance revenue from non-life contracts
Measured with PAA
Measured with GMM
Insurance revenue from life insurance contracts
Measured with VFA
Measured with GMM
Insurance revenue
2023
2022
4,013.0
4,013.0
–
1,399.4
1,255.9
143.5
3,936.5
3,936.5
–
1,403.1
1,218.4
184.6
5,412.4
5,339.6
Insurance revenue non-life
3.1.1
Insurance revenue from non-life contracts amounted to CHF 4,013.0 million (previous year: CHF 3,936.5 million) and was
generated solely from contracts measured using the premium allocation approach.
Insurance revenue life
3.1.2
The following table shows revenue from life insurance contracts measured using the variable fee approach:
CHF million
Expected incurred claims and other expected insurance service expenses
1,102.3
1,139.1
2023
2022
Release risk adjustment for non-financial risk
Release CSM
Other
Change in the liability for remaining coverage
Recovery of insurance acquisition cash flows
Total insurance revenue from life insurance contracts (VFA)
3.0
224.3
– 226.6
1,103.0
152.9
1,255.9
2.2
253.8
– 270.3
1,124.7
93.7
1,218.4
100
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
101
Financial Report The following table shows revenue from life insurance contracts measured using the general measurement model:
CHF million
Expected incurred claims and other expected insurance service expenses
Release risk adjustment for non-financial risk
Release CSM
Other
Change in the liability for remaining coverage
Recovery of insurance acquisition cash flows
Total insurance revenue from life insurance contracts (GMM)
2023
2022
111.0
6.3
28.0
– 6.8
138.5
5.1
143.5
112.0
– 7.1
48.6
29.2
182.7
2.0
184.6
3.1.3 Expected release of the contractual service margin for insurance contracts to profit or loss
The table below shows the expected release of the CSM to profit or loss for the individual portfolios according to the latest
projection. In addition to the effect of the release, the CSM also changes due to the interest expected to be accreted on it.
Such interest increases the CSM. The table shows the total combined change resulting from these two effects. Consequently,
the table cannot be used to draw direct conclusions about future earnings.
Life
CHF million
< 5 years
6 – 10 years
11 – 15 years
16 – 20 years
> 20 years
Total
VFA
GMM
789.8
784.8
671.3
537.7
1,572.3
4,355.8
104.5
82.0
83.9
74.3
164.3
509.0
2023
Total
894.2
866.7
755.2
611.9
1,736.6
4,864.8
VFA
GMM
696.2
772.6
742.5
619.6
1,920.1
4,750.9
111.7
97.1
101.1
93.7
237.3
640.9
2022
Total
807.9
869.7
843.6
713.3
2,157.3
5,391.8
3.1.4 Expected release of the contractual service margin for reinsurance contracts to profit or loss
The table below shows the expected release of the CSM to profit or loss for the individual portfolios according to the latest
projection. In addition to the effect of the release, the CSM also changes due to the interest expected to be accreted on it.
Such interest increases the CSM. The table shows the total combined change resulting from these two effects. Consequently,
the table cannot be used to draw direct conclusions about future earnings.
Life
CHF million
< 5 years
6 – 10 years
11 – 15 years
16 – 20 years
> 20 years
Total
2023
2022
– 24.5
– 19.3
– 37.5
– 52.5
– 249.6
– 383.3
19.3
– 14.5
– 31.9
– 49.8
– 256.8
– 333.7
For the purpose of the above table, a CSM balance with a negative sign represents an asset and any release of such asset
represents an expense.
100
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
101
Financial Report Insurance finance income or expenses
3.2
The net finance income or expenses from insurance and reinsurance business relates as follows to the net investment
income generated by the Baloise Group:
2023
CHF million
Comprehensive income from underlying items and other assets backing insurance contracts
Result from investments
of which: interest revenue calculated using the effective interest method
of which: investment income
of which: realised gains and losses on investments
of which: change in expected credit loss
Share of profit (loss) of associates and joint ventures
Gains and losses on owner-occupied properties FVPL
Result from other underlying items
Total return from underlying items and other assets backing insurance contracts
Gains and losses recognised in OCI
Comprehensive income from underlying items and other assets backing insurance contracts
Insurance finance income or expenses from insurance contracts
Change in fair value of underlying items
Interest accreted
Effect of changes in interest rates and other financial assumptions
Effect of measuring changes in estimates at current rates and adjusting the CSM
at rates on initial recognition
Net foreign exchange effect
Insurance finance income or expenses from insurance contracts
of which: recognised in profit or loss
of which: recognised in other comprehensive income
Insurance finance income or expenses from reinsurance contracts
Interest accreted
Effect of changes in interest rates and other financial assumptions
Effect of measuring changes in estimates at current rates and adjusting the CSM
at rates on initial recognition
Net foreign exchange effect
Insurance finance income or expenses from reinsurance contracts
of which: recognised in profit or loss
of which: recognised in other comprehensive income
Total
of which: recognised in profit or loss
of which: recognised in other comprehensive income
Non-life
Life
Total
113.4
118.1
64.0
– 68.8
0.1
– 2.4
–
–
111.0
348.2
459.2
2,750.4
2,863.9
21.3
856.7
139.4
920.8
1,872.3
1,803.5
0.0
2.2
– 16.0
– 6.2
0.1
– 0.3
– 16.0
– 6.2
2,730.5
2,841.5
– 99.2
249.0
2,631.2
3,090.4
–
– 2,126.2
– 2,126.2
– 145.4
– 180.5
–
0.4
– 325.6
– 104.2
– 221.4
– 242.0
– 302.1
– 387.4
– 482.6
48.4
26.6
48.4
26.9
– 2,595.3
– 2,920.9
– 2,729.0
– 2,833.2
133.7
– 87.7
28.2
5.2
–
3.2
36.7
24.1
12.6
170.3
30.9
139.4
– 3.9
– 4.6
1.3
– 0.2
– 7.4
2.7
– 10.1
28.5
4.2
24.4
24.3
0.6
1.3
3.1
29.3
26.8
2.5
198.8
35.1
163.7
102
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
103
Financial Report 2022
CHF million
Comprehensive income from underlying items and other assets backing insurance contracts
Result from investments
of which: interest revenue calculated using the effective interest method
of which: investment income
of which: realised gains and losses on investments
of which: change in expected credit loss
Share of profit (loss) of associates and joint ventures
Gains and losses on owner-occupied properties FVPL
Result from other underlying items
Non-life
Life
Total
107.3
– 6,456.7
– 6,349.4
77.6
72.2
3.9
906.9
81.5
979.1
– 34.3
– 7,367.6
– 7,401.9
– 8.3
– 0.2
–
–
0.1
1.6
29.3
4.0
– 8.2
1.4
29.3
4.0
Total return from underlying items and other assets backing insurance contracts
107.0
– 6,421.8
– 6,314.8
Gains and losses recognised in OCI
– 1,004.6
113.4
– 891.2
Comprehensive income from underlying items and other assets backing insurance contracts
– 897.5
– 6,308.4
– 7,205.9
Insurance finance income or expenses from insurance contracts
Change in fair value of underlying items
Interest accreted
Effect of changes in interest rates and other financial assumptions
Effect of measuring changes in estimates at current rates and adjusting the CSM
at rates on initial recognition
Net foreign exchange effect
Insurance finance income or expenses from insurance contracts
of which: recognised in profit or loss
of which: recognised in other comprehensive income
Insurance finance income or expenses from reinsurance contracts
Interest accreted
Effect of changes in interest rates and other financial assumptions
Effect of measuring changes in estimates at current rates and adjusting the CSM
at rates on initial recognition
Net foreign exchange effect
Insurance finance income or expenses from reinsurance contracts
of which: recognised in profit or loss
of which: recognised in other comprehensive income
Total
of which: recognised in profit or loss
of which: recognised in other comprehensive income
–
– 9.6
442.7
–
– 3.6
429.5
– 48.9
478.5
0.3
– 28.3
–
6.7
– 21.3
9.6
– 30.9
4,287.1
– 18.2
1,643.1
49.4
19.9
5,981.3
6,391.9
– 410.6
1.1
38.1
21.3
– 0.3
60.2
18.2
42.1
4,287.1
– 27.8
2,085.8
49.4
16.3
6,410.8
6,343.0
67.9
1.4
9.8
21.3
6.4
38.9
27.8
11.2
– 489.3
67.7
– 557.0
– 266.9
– 11.7
– 255.1
– 756.1
56.0
– 812.1
102
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
103
Financial Report Composition and fair values of underlying items
3.3
The following table shows the fair values of underlying items for life insurance contracts measured using the variable fee
approach.
CHF million
Fair value of underlying items
Investment property
Owner-occupied property (FVPL)
Investments1
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
Other
Total underlying items
1 Directly held long-term equity investments and investments in associates and joint ventures
31.12.2023
31.12.2022
6,286.7
6,590.4
474.2
179.5
466.0
310.9
7,548.4
6,127.2
15,837.5
17,039.2
4,991.8
5,275.9
168.8
846.1
41.6
437.5
36,332.8
36,288.7
104
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
105
Financial Report Insurance contract assets and liabilities
3.4
The insurance contract assets and liabilities consist of the following:
as at 31.12.
CHF million
Non-life contracts (PAA)
of which: liability for remaining coverage
of which: liability for incurred claims
of which: deferred acquisition costs (DAC)
Non-life contracts (GMM)
Total non-life
Life contracts (VFA)
Life contracts (GMM)
Total life
Insurance contract
assets
Insurance contract
liabilities
2023
2022
2023
2022
68.4
– 2.4
70.8
–
0.0
68.4
–
–
–
43.0
0.4
42.6
–
–
43.0
0.0
0.0
0.0
6,166.0
1,019.0
5,179.3
– 32.3
1.1
6,167.1
6,107.2
1,061.2
5,086.4
– 40.4
0.7
6,107.9
36,219.3
36,050.2
7,433.1
7,595.2
43,652.4
43,645.4
Total insurance contract assets and liabilities
68.4
43.0
49,819.5
49,753.3
In the non-life insurance business, the Baloise Group anticipates the following changes over time in respect of the deferred
insurance acquisition cash flows:
Non-Life
CHF million
< 1 year
1 – 2 years
2 – 3 years
3 – 4 years
4 – 5 years
> 5 years
Total
2023
2022
24.0
7.0
1.1
0.2
–
–
25.1
12.5
2.6
0.2
–
–
32.3
40.4
In the life insurance business, no insurance acquisition cash flows were recognised as at 31 December 2023 or as at
31 December 2022.
104
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
105
Financial Report 3.4.1 Non-life – Insurance contracts measured using the premium allocation approach
Reconciliation for remaining coverage and claims already incurred:
Liability for
remaining coverage
Liability for
incurred claims
Deferred
acquisition
costs
Total
Excluding
loss
component
Loss
component
Present
value of
future cash
flows
Risk
adjustment
0.4
– 995.1
– 994.7
–
– 66.1
– 66.1
42.2
– 4,905.6
– 4,863.4
0.4
– 180.8
– 180.4
–
40.4
40.4
43.0
– 6,107.2
– 6,064.2
4,013.0
– 589.9
–
5.4
–
– 2,972.3
–
13.6
–
4,013.0
– 4.8
– 3,548.1
3,447.1
6.5
– 3,096.0
–
–
–
– 589.9
–
3,423.1
–
24.1
– 4,030.2
–
587.0
4.5
– 3,438.7
24.5
–
– 961.8
– 2.4
– 959.4
72.9
– 3,033.3
– 59.1
–
61.0
72.7
–
–
–
13.6
– 12.7
6.5
7.4
–
–
–
–
–
– 67.5
–
–
5.4
–
1.1
–
–
–
– 2,972.3
– 313.0
189.4
–
3,010.4
–
–
3,010.4
–
–
–
–
–
–
–
–
–
–
–
– 4.8
– 4.8
–
– 0.7
– 3,019.5
133.7
– 67.5
– 589.9
– 4.8
464.9
– 325.7
220.2
– 5.6
359.5
–
–
21.9
–
21.9
– 4,030.2
3,010.4
608.9
4.5
– 406.4
–
10.1
–
3.4
– 24.5
–
–
13.5
– 59.6
– 4,938.9
–
70.1
– 169.6
0.7
32.3
– 6,097.6
–
68.4
– 59.6
– 5,009.0
– 170.3
32.3
– 6,166.0
2023
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement
of comprehensive income
Insurance revenue
Insurance service expenses
of which: incurred claims and other incurred
service expenses
of which: adjustments to the liability
for incurred claims
of which: losses and reversals of losses
on onerous contracts
of which: amortisation of insurance acquisition
cash flows
of which: impairment and reversal of impairment
of deferred acquisition costs
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums received
Claims and other insurance service expenses paid
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Allocation from deferred acquisition costs to groups
of insurance contracts
Other movements
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
106
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
107
Financial Report Liability for
remaining coverage
Liability for
incurred claims
Deferred
acquisition
costs
Total
Excluding
loss
component
Loss
component
Present
value of
future cash
flows
Risk
adjustment
–
– 1,091.2
– 1,091.2
–
– 82.3
– 82.3
–
– 5,546.0
– 5,546.0
–
– 210.1
– 210.1
–
44.0
44.0
–
– 6,885.6
– 6,885.6
3,936.5
– 590.5
–
15.0
–
– 3,024.6
–
– 11.8
–
– 4.7
3,936.5
– 3,616.7
–
–
–
– 590.5
–
89.5
– 2,928.4
– 51.3
–
– 96.2
39.5
– 74.5
–
–
–
–
–
–
19.7
–
1.2
414.9
172.4
–
–
–
– 11.8
14.6
6.2
–
–
–
–
– 4.7
– 4.7
–
– 0.6
– 2,890.2
– 56.8
– 74.5
– 590.5
– 4.7
319.8
429.5
198.8
3,365.7
16.2
– 2,437.4
9.0
– 5.3
948.2
2022
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement
of comprehensive income
Insurance revenue
Insurance service expenses
of which: incurred claims and other incurred
service expenses
of which: adjustments to the liability
for incurred claims
of which: losses and reversals of losses
on onerous contracts
of which: amortisation of insurance acquisition
cash flows
of which: impairment and reversal of impairment
of deferred acquisition costs
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Insurance service result from insurance contracts
3,346.0
15.0
– 3,024.6
Premiums received
Claims and other insurance service expenses paid
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Allocation from deferred acquisition costs to groups
of insurance contracts
Other movements
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
– 3,865.6
–
570.5
2.5
– 3,292.6
23.4
–
– 994.7
0.4
– 995.1
–
–
–
–
–
–
–
–
2,987.3
–
–
2,987.3
–
132.7
–
–
–
–
–
–
20.7
–
–
25.1
–
25.1
– 3,865.6
2,987.3
595.6
2.5
– 280.2
– 23.4
–
–
153.4
– 66.1
– 4,863.4
– 180.4
40.4
– 6,064.2
–
42.2
0.4
– 66.1
– 4,905.6
– 180.8
–
40.4
43.0
– 6,107.2
106
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
107
Financial Report Claims settlement
CHF million
Estimated undiscounted
claims incurred (gross)
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
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident year
1,908.7
2,055.5
2,216.9
2,641.6
2,449.8
2,688.6
1,852.3
1,997.2
2,098.6
2,217.7
2,680.1
2,508.5
1,786.8
1,870.9
1,996.3
2,080.1
2,250.8
2,621.6
1,735.6
1,800.9
1,863.8
1,980.5
2,077.6
2,235.7
1,770.5
1,744.1
1,813.2
1,855.4
1,991.9
2,050.3
1,768.1
1,750.0
1,800.6
1,856.7
1,960.0
1,769.8
1,724.4
1,810.3
1,831.4
Seven years later
1,762.9
1,758.0
1,796.2
Eight years later
1,756.2
1,725.8
Nine years later
1,745.2
Estimated claims
incurred
1,745.2
1,725.8
1,796.2
1,831.4
1,960.0
2,050.3
2,235.7
2,621.6
2,508.5
2,688.6 21,163.3
Claims paid to date
1,622.0
1,579.3
1,631.9
1,645.0
1,756.5
1,842.2
1,927.3
2,240.6
1,889.5
1,177.8 17,312.3
Claims reserves (gross)
123.2
146.5
164.3
186.4
203.5
208.1
308.4
381.0
619.0
1,510.8
3,851.0
Gross liabilities
more than 10 years old
Total claims reserves
(gross)
Effect of discounting
Present value of
expected future claims
payments (gross)
Reinsurance ceded
Present value of
expected future claims
payments (net)
1,990.4
5,841.4
– 732.9
5,108.5
– 347.1
4,761.4
Baloise is not disclosing any previously unpublished information on claims that were incurred more than six years before
the end of the reporting period in which IFRS 17 was applied for the first time.
108
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
109
Financial Report 3.4.2 Life – Insurance contracts measured using the variable fee approach
Reconciliation for remaining coverage and claims already incurred:
2023
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Insurance revenue
of which: contracts under the modified retrospective approach
of which: contracts under the fair value approach
of which: other contracts
Insurance service expenses
of which: incurred claims and other incurred service expenses
of which: adjustments to the liability for incurred claims
of which: losses and reversals of losses on onerous contracts
of which: amortisation of insurance acquisition cash flows
Investment components
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums received
Claims and other insurance service expenses paid, incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Liability for
remaining coverage
Liability for
incurred
claims
Total
Excluding
loss
component
Loss
component
–
– 35,848.6
– 35,848.6
–
– 3.2
– 3.2
–
–
– 198.3
– 36,050.2
– 198.3
– 36,050.2
1,255.9
953.9
215.1
86.9
– 152.9
–
–
–
– 152.9
3,153.9
4,256.9
– 2,099.7
503.0
2,660.2
– 2,964.8
–
149.6
1.0
– 2,814.2
–
–
–
–
–
0.4
0.4
–
0.1
–
–
0.4
–
0.1
0.5
–
–
–
–
–
–
–
–
–
–
– 862.1
– 862.1
–
–
–
– 3,153.9
– 4,016.0
0.1
3.8
1,255.9
953.9
215.1
86.9
– 1,014.6
– 861.7
–
0.1
– 152.9
–
241.3
– 2,099.6
506.9
– 4,012.2
– 1,351.5
–
– 2,964.8
3,996.5
3,996.5
–
–
149.6
1.0
3,996.5
1,182.3
–
–
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
– 36,002.6
–
– 36,002.6
– 2.7
–
– 2.7
– 213.9
– 36,219.3
–
–
– 213.9
– 36,219.3
108
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
109
Financial Report 2022
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Insurance revenue
of which: contracts under the modified retrospective approach
of which: contracts under the fair value approach
of which: other contracts
Insurance service expenses
of which: incurred claims and other incurred service expenses
of which: adjustments to the liability for incurred claims
of which: losses and reversals of losses on onerous contracts
of which: amortisation of insurance acquisition cash flows
Investment components
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums received
Claims and other insurance service expenses paid, incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Liability for
remaining coverage
Liability for
incurred
claims
Total
Excluding
loss
component
Loss
component
2.5
– 42,031.6
– 42,029.1
1,218.4
990.6
176.9
50.9
– 93.7
–
–
–
– 93.7
3,359.6
4,484.4
4,306.9
466.1
9,257.4
– 3,220.9
–
148.2
– 4.3
– 3,076.9
–
– 1.0
1.5
– 186.4
– 42,220.5
– 187.3
– 42,219.0
–
– 2.6
– 2.6
–
–
–
–
– 0.7
0.4
–
– 1.1
–
–
–
–
–
–
– 855.5
– 855.5
–
–
–
– 3,359.6
1,218.4
990.6
176.9
50.9
– 949.9
– 855.1
–
– 1.1
– 93.7
–
268.6
4,307.0
469.1
– 0.7
– 4,215.1
–
0.1
0.1
3.0
– 0.6
– 4,212.1
5,044.6
–
–
–
–
–
–
–
– 3,220.9
4,201.1
4,201.1
–
–
148.2
– 4.3
4,201.1
1,124.2
–
–
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
– 35,848.6
–
– 35,848.6
– 3.2
–
– 3.2
– 198.3
– 36,050.2
–
–
– 198.3
– 36,050.2
110
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
111
Financial Report Reconciliation for measurement components:
Present
value of
future cash
flows
Risk
adjustment
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
Other
–
–
–
– 31,188.0
– 31,188.0
– 111.3
– 3,421.4
– 111.3
– 3,421.4
–
– 618.8
– 618.8
–
–
– 710.7
– 36,050.2
– 710.7
– 36,050.2
2023
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes that relate to current services
of which: CSM for the service provided in the period
of which: change in risk adjustment
for non-financial risk
of which: experience adjustments
Changes that relate to future services
of which: contracts initially recognised in the period
of which: changes in estimates reflected in the CSM
of which: changes in estimates that relate to losses
and reversals of losses
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums received
Claims and other insurance service expenses paid,
incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
401.0
–
–
401.0
– 489.0
101.9
– 591.3
0.4
–
–
– 88.0
– 2,097.7
445.5
– 1,740.1
– 2,964.8
3,996.5
149.6
1.0
1,182.3
–
3.0
–
3.0
–
– 9.2
– 3.5
– 5.7
0.0
–
–
– 6.3
– 1.9
1.8
– 6.4
–
–
–
–
–
–
– 109.7
– 109.7
–
–
612.2
–
612.2
–
–
–
502.5
–
14.2
– 73.4
– 73.4
–
–
185.6
–
185.6
–
–
–
112.2
–
19.0
20.5
20.5
–
–
– 299.6
– 98.8
– 200.7
–
–
–
241.3
– 162.7
3.0
401.0
0.0
– 0.4
–
0.4
–
–
– 279.1
241.3
–
– 2,099.6
26.4
506.9
516.7
131.1
– 252.7
– 1,351.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 2,964.8
3,996.5
149.6
1.0
1,182.3
–
Net balance as at 31 December
– 31,745.8
– 117.7
– 2,904.7
– 487.7
– 963.4
– 36,219.3
of which: insurance contract assets
–
–
–
–
–
–
of which: insurance contract liabilities
– 31,745.8
– 117.7
– 2,904.7
– 487.7
– 963.4
– 36,219.3
110
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
111
Financial Report Present
value of
future cash
flows
Risk
adjustment
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
Other
2022
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
1.5
–
–
– 36,700.5
– 113.3
– 3,813.5
– 36,699.0
– 113.3
– 3,813.5
Changes that relate to current services
of which: CSM for the service provided in the period
of which: change in risk adjustment
for non-financial risk
of which: experience adjustments
Changes that relate to future services
of which: contracts initially recognised in the period
542.5
–
–
542.5
– 881.6
138.7
of which: changes in estimates reflected in the CSM
– 1,019.0
3.5
–
3.5
–
4.5
– 11.9
17.0
of which: changes in estimates that relate to losses
and reversals of losses
– 1.4
– 0.6
–
– 855.6
– 855.6
– 69.2
– 69.2
–
–
– 193.9
– 193.9
–
–
585.4
268.3
–
–
585.4
268.3
–
–
–
391.6
–
0.5
–
–
–
199.1
–
37.7
–
1.5
– 737.6
– 42,220.5
– 737.6
– 42,219.0
– 11.8
– 11.8
271.2
– 274.9
–
–
20.8
– 127.5
148.2
–
–
–
9.0
–
18.0
3.5
542.5
– 2.6
– 0.6
–
– 2.0
–
–
268.6
4,307.0
469.1
–
–
– 339.1
4,314.5
411.5
–
–
8.1
– 7.5
1.5
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums received
Claims and other insurance service expenses paid,
incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
4,386.8
2.0
392.1
236.8
27.0
5,044.6
– 3,220.9
4,201.1
148.2
– 4.3
1,124.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 3,220.9
4,201.1
148.2
– 4.3
1,124.2
–
Net balance as at 31 December
– 31,188.0
– 111.3
– 3,421.4
– 618.8
– 710.7
– 36,050.2
of which: insurance contract assets
–
–
–
–
–
–
of which: insurance contract liabilities
– 31,188.0
– 111.3
– 3,421.4
– 618.8
– 710.7
– 36,050.2
112
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
113
Financial Report Contracts recognised for the first time in the financial year, measured using the variable fee approach:
31.12.2023
31.12.2022
Total
insurance
contracts
Of which:
Contracts
acquired
Of which:
Onerous
contracts
Total
insurance
contracts
Of which:
Contracts
acquired
Of which:
Onerous
contracts
CHF million
Present value of future cash inflows
Present value of future cash outflows
of which: expected claims and insurance
service expenses
of which: expected insurance acquisition cash flows
Risk adjustment for non-financial risk
Contractual service margin
Loss component recognised on initial recognition
– 1,131.1
1,029.2
893.3
135.9
3.5
98.8
0.4
–
–
–
–
–
–
–
– 8.2
8.5
– 1,333.9
1,195.2
8.0
0.5
0.1
–
0.4
1,067.5
127.7
11.9
127.5
0.6
–
–
–
–
–
–
–
– 12.5
13.0
12.2
0.8
0.1
–
0.6
112
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
113
Financial Report Life – Insurance contracts measured using the general measurement model
3.4.3
Reconciliation for remaining coverage and claims already incurred:
2023
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Insurance revenue
of which: contracts under the modified retrospective approach
of which: contracts under the fair value approach
of which: other contracts
Insurance service expenses
of which: incurred claims and other incurred service expenses
of which: adjustments to the liability for incurred claims
of which: losses and reversals of losses on onerous contracts
of which: amortisation of insurance acquisition cash flows
Investment components
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums received
Claims and other insurance service expenses paid, incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Liability for
remaining coverage
Liability for
incurred
claims
Total
Excluding
loss
component
Loss
component
–
– 7,521.8
– 7,521.8
–
– 18.2
– 18.2
–
– 55.3
– 55.3
–
– 7,595.2
– 7,595.2
143.5
3.2
117.2
23.2
– 5.1
–
–
–
– 5.1
618.3
756.8
– 495.7
461.8
722.9
– 560.4
–
14.6
– 3.2
– 549.0
–
–
–
–
–
– 0.8
0.8
–
– 1.6
–
–
– 0.8
–
1.1
0.4
–
–
–
–
–
–
–
–
–
–
– 98.4
– 98.4
–
–
–
– 618.3
– 716.8
–
4.0
– 712.8
–
700.6
–
–
700.6
143.5
3.2
117.2
23.2
– 104.3
– 97.6
–
– 1.6
– 5.1
–
39.2
– 495.7
466.9
10.5
– 560.4
700.6
14.6
– 3.2
151.6
–
–
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
– 7,347.9
–
– 7,347.9
– 17.9
–
– 17.9
– 67.4
– 7,433.1
–
–
– 67.4
– 7,433.1
114
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
115
Financial Report 2022
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Insurance revenue
of which: contracts under the modified retrospective approach
of which: contracts under the fair value approach
of which: other contracts
Insurance service expenses
of which: incurred claims and other incurred service expenses
of which: adjustments to the liability for incurred claims
of which: losses and reversals of losses on onerous contracts
of which: amortisation of insurance acquisition cash flows
Investment components
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums received
Claims and other insurance service expenses paid, incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Liability for
remaining coverage
Liability for
incurred
claims
Total
Excluding
loss
component
Loss
component
–
– 9,770.2
– 9,770.2
–
– 11.0
– 11.0
–
– 60.5
– 60.5
–
– 9,841.7
– 9,841.7
184.6
3.4
125.6
55.6
– 2.0
–
–
–
– 2.0
551.4
734.0
1,674.3
440.6
2,848.9
– 608.1
–
10.6
– 3.0
– 600.5
–
–
–
–
–
– 7.8
1.0
–
– 8.8
–
–
– 7.8
–
0.7
– 7.2
–
–
–
–
–
–
–
–
–
–
– 102.1
– 102.1
–
–
–
– 551.4
– 653.4
–
2.9
– 650.5
–
655.7
–
–
655.7
184.6
3.4
125.6
55.6
– 111.8
– 101.1
–
– 8.8
– 2.0
–
72.8
1,674.3
444.1
2,191.2
– 608.1
655.7
10.6
– 3.0
55.2
–
–
Net balance as at 31 December
of which: insurance contract assets
of which: insurance contract liabilities
– 7,521.8
– 18.2
– 55.3
– 7,595.2
–
–
–
–
– 7,521.8
– 18.2
– 55.3
– 7,595.2
114
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
115
Financial Report Reconciliation for measurement components:
2023
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes that relate to current services
of which: CSM for the service provided in the period
of which: change in risk adjustment
for non-financial risk
of which: experience adjustments
Changes that relate to future services
of which: contracts initially recognised in the period
of which: changes in estimates reflected in the CSM
of which: changes in estimates that relate to losses
and reversals of losses
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums received
Claims and other insurance service expenses paid,
incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Present
value of
future cash
flows
Risk
adjustment
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
Other
–
– 6,884.2
– 6,884.2
232.7
–
–
232.7
– 288.9
61.1
– 349.1
–
– 70.2
– 70.2
6.6
–
6.6
–
– 13.1
– 8.3
– 4.8
– 0.9
0.0
–
–
– 56.2
– 478.9
428.0
–
–
– 6.5
– 12.9
5.1
–
– 12.5
– 12.5
0.9
0.9
–
–
0.4
–
0.4
–
–
–
1.3
– 0.2
0.7
–
– 246.7
– 246.7
– 170.6
– 170.6
–
–
181.3
–
181.3
–
–
–
10.7
– 1.3
14.3
–
–
– 381.7
– 7,595.2
– 381.7
– 7,595.2
– 28.7
– 28.7
–
–
118.7
– 53.5
172.2
–
–
–
90.0
– 2.4
18.9
40.8
– 198.4
6.6
232.7
– 1.6
– 0.7
–
– 0.9
–
–
39.2
– 495.7
466.9
– 107.1
– 14.4
1.8
23.7
106.4
10.5
– 560.4
700.6
14.6
– 3.2
151.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 560.4
700.6
14.6
– 3.2
151.6
–
Net balance as at 31 December
– 6,839.6
– 84.6
– 10.7
– 223.0
– 275.3
– 7,433.1
of which: insurance contract assets
–
–
–
–
–
–
of which: insurance contract liabilities
– 6,839.6
– 84.6
– 10.7
– 223.0
– 275.3
– 7,433.1
116
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
117
Financial Report Present
value of
future cash
flows
Risk
adjustment
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
–
– 9,174.9
– 9,174.9
303.6
–
–
303.6
– 179.4
43.5
– 219.5
–
– 63.3
– 63.3
– 7.2
–
– 7.2
–
19.6
– 3.8
23.8
– 3.5
– 0.4
–
–
124.2
1,700.7
410.6
–
–
12.4
– 22.5
3.2
–
– 13.6
– 13.6
0.8
0.8
–
–
– 0.2
–
– 0.2
–
–
–
0.6
– 0.2
0.6
–
– 269.8
– 269.8
– 227.3
– 227.3
–
–
240.0
–
240.0
–
–
–
12.6
– 2.4
12.9
Other
–
– 320.1
– 320.1
11.7
11.7
–
–
– 88.8
– 44.7
– 44.2
–
–
–
–
– 9,841.7
– 9,841.7
81.6
– 214.8
– 7.2
303.6
– 8.8
– 5.0
–
– 3.8
–
–
– 77.0
– 1.4
16.8
72.8
1,674.3
444.1
2,235.5
– 6.8
1.1
23.1
– 61.6
2,191.2
– 608.1
655.7
10.6
– 3.0
55.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 608.1
655.7
10.6
– 3.0
55.2
–
2022
CHF million
Insurance contract assets
Insurance contract liabilities
Net balance as at 1 January
Changes that relate to current services
of which: CSM for the service provided in the period
of which: change in risk adjustment
for non-financial risk
of which: experience adjustments
Changes that relate to future services
of which: contracts initially recognised in the period
of which: changes in estimates reflected in the CSM
of which: changes in estimates that relate to losses
and reversals of losses
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims
Insurance service result from insurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums received
Claims and other insurance service expenses paid,
incl. investment components
Insurance acquisition cash flows paid
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
– 6,884.2
– 70.2
– 12.5
– 246.7
– 381.7
– 7,595.2
of which: insurance contract assets
–
–
–
–
–
–
of which: insurance contract liabilities
– 6,884.2
– 70.2
– 12.5
– 246.7
– 381.7
– 7,595.2
116
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
117
Financial Report Contracts recognised for the first time in the financial year, measured using the general measurement model:
31.12.2023
31.12.2022
Total
insurance
contracts
Of which:
Contracts
acquired
Of which:
Onerous
contracts
Total
insurance
contracts
Of which:
Contracts
acquired
Of which:
Onerous
contracts
CHF million
Present value of future cash inflows
Present value of future cash outflows
of which: expected claims and insurance
service expenses
of which: expected insurance acquisition cash flows
Risk adjustment for non-financial risk
Contractual service margin
Loss component recognised on initial recognition
– 406.1
344.9
330.0
15.0
8.3
53.5
0.7
–
–
–
–
–
–
–
– 13.6
14.1
– 443.8
400.2
12.9
389.0
1.1
0.1
–
0.7
11.3
3.8
44.7
5.0
–
–
–
–
–
–
–
– 93.5
98.8
96.3
2.4
– 0.3
–
5.0
Reinsurance contract assets and liabilities
3.5
The reinsurance contract assets and liabilities consist of the following:
as at 31.12.
CHF million
Non-life contracts (PAA)
Non-life contracts (GMM)
Total non-life
Life contracts (PAA)
Life contracts (GMM)
Total life
Total reinsurance contract assets and liabilities
450.5
614.6
Reinsurance contract
assets
Reinsurance contract
liabilities
2023
2022
2023
2022
346.5
–
493.0
–
346.5
493.0
19.2
84.7
103.9
20.6
101.0
121.6
2.2
–
2.2
–
0.3
0.3
2.5
67.5
–
67.5
–
0.0
0.0
67.5
118
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
119
Financial Report 3.5.1 Non-life reinsurance contracts held
Reinsurance contracts held, measured using the premium allocation approach
2023
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous
insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses reimbursed
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Expected
recovery
(remaining
coverage)
Expected recovery for
incurred claims
Total
Present value
of future
cash flows
Risk
adjustment
8.2
– 5.8
2.4
468.8
– 64.8
404.0
16.0
3.2
19.2
493.0
– 67.5
425.5
–
– 246.2
– 246.2
– 3.7
– 20.8
17.1
–
–
– 249.8
–
0.2
– 249.7
244.9
–
– 0.2
– 0.2
–
121.0
109.3
–
11.6
0.0
121.0
24.0
– 18.3
126.6
–
– 198.7
–
–
244.6
– 198.7
– 14.5
4.4
–
– 18.9
0.0
– 14.5
12.7
– 0.9
– 2.8
–
–
–
–
–
–
– 0.2
– 1.0
– 2.7
1.0
– 3.7
331.6
329.2
2.5
15.4
16.4
– 1.0
102.7
93.0
17.1
– 7.3
0.0
– 143.4
36.7
– 19.1
– 125.9
244.9
– 198.7
– 0.2
– 0.2
45.8
– 1.2
344.3
346.5
– 2.2
118
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
119
Financial Report 2022
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous
insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses reimbursed
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Expected
recovery
(remaining
coverage)
Expected recovery for
incurred claims
Total
Present value
of future
cash flows
Risk
adjustment
14.1
– 0.7
13.4
– 233.4
– 3.3
0.7
– 4.0
–
–
– 236.6
–
– 0.4
– 237.0
226.5
–
– 0.5
0.0
704.5
– 35.7
668.8
–
194.7
160.0
–
14.7
19.9
194.7
– 20.7
– 21.3
152.7
–
– 408.9
–
–
226.0
– 408.9
25.4
0.2
25.5
–
– 3.5
4.6
–
– 8.6
0.5
– 3.5
– 0.6
– 1.0
– 5.0
–
–
–
–
–
743.9
– 36.2
707.7
– 233.4
187.9
165.3
– 4.0
6.1
20.5
– 45.5
– 21.3
– 22.6
– 89.4
226.5
– 408.9
– 0.5
0.0
– 182.9
–
– 8.6
– 1.3
– 10.0
2.4
8.2
– 5.8
404.0
468.8
– 64.8
19.2
16.0
3.2
425.5
493.0
– 67.5
120
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
121
Financial Report 3.5.2 Life reinsurance contracts held
Reinsurance contracts held, measured using the premium allocation approach
Reconciliation for remaining coverage and claims already incurred:
Expected
recovery
(remaining
coverage)
Expected recovery for
incurred claims
Total
Present
value of
future cash
flows
Risk
adjustment
2023
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous
insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
0.4
–
0.4
– 9.4
–
–
–
–
–
– 9.4
–
–
– 9.4
20.2
–
20.2
–
8.0
1.5
–
6.6
–
8.0
0.0
– 1.0
7.1
Premiums paid to the reinsurer
9.1
–
Claims and other insurance service expenses reimbursed,
incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
–
–
–
9.1
–
0.1
0.1
–
– 8.2
–
–
– 8.2
–
19.1
19.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20.6
–
20.6
– 9.4
8.0
1.5
–
6.6
–
– 1.3
0.0
– 1.0
– 2.3
9.1
– 8.2
–
–
0.9
–
19.2
19.2
–
120
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
121
Financial Report 2022
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous
insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses reimbursed,
incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Expected
recovery
(remaining
coverage)
Expected recovery for
incurred claims
Total
Present
value of
future cash
flows
Risk
adjustment
– 0.3
–
– 0.3
– 9.3
–
–
–
–
–
– 9.3
–
–
– 9.3
10.0
–
–
–
10.0
–
0.4
0.4
–
14.8
–
14.8
–
3.8
5.0
–
– 1.2
–
3.8
0.0
– 0.6
3.2
–
2.3
–
–
2.3
–
20.2
20.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14.5
–
14.5
– 9.3
3.8
5.0
–
– 1.2
–
– 5.5
0.0
– 0.6
– 6.1
10.0
2.3
–
–
12.2
–
20.6
20.6
–
122
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
123
Financial Report Reinsurance contracts held, measured using the general measurement model
Reconciliation for remaining coverage and claims already incurred:
2023
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Investment components and premium refunds
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses reimbursed,
incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Expected
recovery
(remaining
coverage)
Expected
recovery for
incurred
claims
100.5
– 0.3
100.1
– 19.6
0.0
0.0
–
–
–
–
– 19.6
– 7.4
– 5.3
– 32.3
0.5
0.3
0.8
–
12.6
12.6
–
–
–
–
12.6
–
0.0
12.5
Total
101.0
0.0
101.0
– 19.6
12.6
12.6
–
–
–
–
– 7.0
– 7.4
– 5.3
– 19.7
16.2
–
16.2
– 13.0
– 13.0
–
–
–
–
–
16.2
– 13.0
–
84.1
84.4
– 0.3
–
0.4
0.4
–
–
–
3.2
–
84.4
84.7
– 0.3
122
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
123
Financial Report 2022
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes recognised in the statement of comprehensive income
Allocation of reinsurance premium paid
Amounts recoverable from reinsurers
of which: recoveries of incurred claims and other insurance service expenses
of which: changes of loss recovery component for losses on onerous insurance contracts
of which: adjustments to assets for incurred claims
of which: effect of changes in non-performance risk of reinsurers
Investment components and premium refunds
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses reimbursed,
incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Expected
recovery
(remaining
coverage)
Expected
recovery for
incurred
claims
47.8
– 2.5
45.3
– 21.4
–
0.0
0.0
–
–
–
– 21.4
60.2
– 3.0
35.8
0.3
0.0
0.3
–
15.0
15.0
–
–
–
–
15.0
–
0.0
14.9
Total
48.0
– 2.4
45.6
– 21.4
15.0
15.0
0.0
–
–
–
– 6.5
60.2
– 3.0
50.8
19.1
–
19.1
– 14.4
– 14.4
–
–
–
–
–
19.1
– 14.4
–
100.1
100.5
– 0.3
–
0.8
0.5
0.3
–
–
4.6
–
101.0
101.0
0.0
124
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
125
Financial Report Reconciliation for measurement components:
2023
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes that relate to current services
of which: CSM related to the service received
of which: expected release of risk adjustment
for non-financial risk
of which: experience adjustments
of which: effect of changes in non-performance
risk of reinsurers
Changes that relate to future services
of which: contracts initially recognised in the period
of which: changes in estimates that adjust the CSM
of which: changes in estimates that relate to losses
and reversals of losses of underlying contracts
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims ceded to reinsurer
Insurance service result from reinsurance contracts
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses
reimbursed, incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
Present
value of
future cash
flows
Risk
adjustment
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
– 234.0
– 0.3
– 234.3
– 1.3
–
–
– 1.3
–
– 76.5
–
– 76.5
–
–
–
– 77.9
– 11.3
18.0
1.6
0.0
1.7
0.0
–
0.0
–
–
0.4
–
0.4
–
–
–
0.4
1.6
– 0.2
119.4
–
119.4
– 2.0
– 2.0
–
–
–
– 1.5
–
– 1.5
–
–
–
– 3.5
1.8
– 7.1
– 71.1
1.8
– 8.7
–
–
–
–
–
–
–
–
–
–
–
–
16.2
– 13.0
–
–
3.2
–
– 302.3
– 301.8
– 0.5
– 0.2
0.1
– 0.2
– 0.4
– 0.4
–
–
–
1.3
–
1.3
–
–
–
0.9
0.0
0.0
0.9
–
–
–
–
–
–
Other
214.2
0.2
214.4
– 3.3
– 3.3
–
–
–
76.3
–
76.3
–
–
–
73.0
0.6
– 16.1
101.0
0.0
101.0
– 7.0
– 5.7
0.0
– 1.3
–
–
–
–
–
–
–
– 7.0
– 7.4
– 5.3
57.5
– 19.7
–
–
–
–
–
–
16.2
– 13.0
–
–
3.2
–
84.4
84.7
– 0.3
3.4
3.4
0.0
110.7
110.7
–
0.7
0.9
– 0.2
271.9
271.6
0.3
124
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
125
Financial Report Present
value of
future cash
flows
Risk
adjustment
2022
CHF million
Reinsurance contract assets
Reinsurance contract liabilities
Net balance as at 1 January
Changes that relate to current services
of which: CSM related to the service received
of which: expected release of risk adjustment
for non-financial risk
of which: experience adjustments
of which: effect of changes in non-performance
risk of reinsurers
Changes that relate to future services
of which: contracts initially recognised in the period
of which: changes in estimates that adjust the CSM
of which: changes in estimates that relate to losses
and reversals of losses of underlying contracts
Changes that relate to past services
of which: changes in fulfilment cash flows relating
to incurred claims ceded to reinsurer
– 160.3
– 2.4
– 162.8
– 0.9
–
–
– 0.9
–
– 145.1
– 140.4
– 4.7
–
–
–
Insurance service result from reinsurance contracts
– 146.0
Insurance finance income or expenses
Exchange differences
Changes recognised in the statement
of comprehensive income
Premiums paid to the reinsurer
Claims and other insurance service expenses
reimbursed, incl. investment components
Insurance acquisition cash flows paid (brokerage)
Other cash flows
Cash flows
Other movements
Net balance as at 31 December
of which: reinsurance contract assets
of which: reinsurance contract liabilities
60.3
9.5
– 76.2
19.1
– 14.4
–
–
4.6
–
– 234.3
– 234.0
– 0.3
Contractual service margin
Total
Modified
retrospective
approach
Fair value
approach
Other
1.7
0.0
1.7
0.1
–
0.1
–
–
1.7
1.7
0.1
–
–
–
1.8
– 1.7
– 0.1
0.0
–
–
–
–
–
–
1.7
1.6
0.0
124.5
–
124.5
– 2.1
– 2.1
–
–
–
1.7
–
1.7
–
–
–
– 0.4
1.4
– 6.0
– 5.0
–
–
–
–
–
–
–
–
–
0.1
0.1
–
–
–
– 0.3
–
– 0.3
–
–
–
– 0.2
–
0.0
– 0.2
–
–
–
–
–
–
82.2
–
82.2
– 3.7
– 3.7
–
–
–
142.0
138.7
3.3
–
–
–
138.3
0.2
– 6.4
132.2
–
–
–
–
–
–
119.4
119.4
–
– 0.2
– 0.2
0.1
214.4
214.2
0.2
48.0
– 2.4
45.6
– 6.5
– 5.7
0.1
– 0.9
–
0.0
0.0
–
–
–
–
– 6.5
60.2
– 3.0
50.8
19.1
– 14.4
–
–
4.6
–
101.0
101.0
0.0
126
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
127
Financial Report The following amounts were recognised for reinsurance contracts held that were recognised for the first time in the finan-
cial year:
CHF million
Present value of future cash outflows
Present value of future cash inflows
of which: expected claims and insurance service expenses ceded to reinsurer
of which: expected insurance acquisition cash flows (brokerage)
Risk adjustment for non-financial risk
Contractual service margin
Loss recovery component
31.12.2023
31.12.2022
Total ceded
reinsurance
Of which
contracts
acquired
Total ceded
reinsurance
Of which
contracts
acquired
–
–
–
–
–
–
–
–
–
–
–
–
–
–
333.5
– 193.1
– 193.1
–
– 1.7
– 138.7
0.0
–
–
–
–
–
–
–
126
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
127
Financial Report This page has been left empty on purpose.
128
Baloise Group Annual Report 2023
Financial Report 4. Investments and financial liabilities
Investments encompass both investment property and financial assets. Financial assets consist of financial instruments
with characteristics of equity, financial instruments with characteristics of debt, mortgages, loans, derivatives (assets),
cash and cash equivalents, and receivables.
Financial liabilities consist of liabilities arising from financial contracts, derivatives (liabilities) and other financial liabilities.
4.1
Comprehensive income on investments
Own account and own risk
Account and
risk of customers
and third parties
Total
2023
2022
2023
2022
2023
2022
CHF million
Investment return
2,686.8
– 5,679.5
1,138.2
– 2,057.9
3,825.0
– 7,737.3
Gains and losses recognised in other comprehensive
income1
367.2
– 832.1
–
–
367.2
– 832.1
Comprehensive income on investments
3,054.0
– 6,511.5
1,138.2
– 2,057.9
4,192.2
– 8,569.4
1 After deduction of taxes.
A distinction is made between investments and financial liabilities for own account and at own risk on the one hand and
investments and financial liabilities for the account and at the risk of customers and third parties on the other. Investments
for the account and at the risk of customers and third parties are assets from premiums for unit-linked or investment-linked
life insurance contracts in which policyholders themselves bear the investment risk in accordance with the investment
objectives. Accordingly, and in contrast to investments for own account and at own risk, the Baloise Group has no rights
in respect of these investments.
129
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130
Financial Report 2023
CHF million
Investment return
Investment property
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL) 1
Financial instruments with characteristics of debt
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
– of which: mandatorily FVPL
– of which: designated as FVPL
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss
– of which: mandatorily FVPL
– of which: designated as FVPL
Derivative financial instruments 2
Financial receivables
Cash and cash equivalents
Investment return for own account and at own risk
Investment return for the account and risk
of customers and third parties
Total investment return
Interest
revenue
calculated
using the
effective
interest
method
–
–
–
–
107.3
1.3
106.0
–
–
–
155.7
150.5
5.2
–
–
–
–
19.9
14.0
296.8
–
296.8
Investment
income
Realised
gains and
losses
Change in
expected
credit loss
Investment
return
280.1
110.2
8.9
101.3
479.0
–
–
479.0
4.4
474.6
93.6
–
–
93.6
– 0.1
93.7
–
–
–
– 72.0
68.0
–
68.0
1,153.4
–
– 90.8
1,244.2
9.9
1,234.3
155.2
20.1
0.0
135.2
1.3
133.9
120.7
–
– 0.5
962.9
1,424.9
–
–
–
–
0.5
–
0.5
–
–
–
1.8
1.8
0.0
–
–
–
–
– 0.1
–
2.2
208.1
178.2
8.9
169.3
1,740.2
1.3
15.6
1,723.2
14.3
1,708.9
406.4
172.4
5.2
228.8
1.2
227.6
120.7
19.8
13.4
2,686.8
7.7
970.6
1,130.5
2,555.4
–
2.2
1,138.2
3,825.0
1 The position “Financial instruments with characteristics of equity - recognised at fair value through profit or loss (FVPL)” comprises gains and losses from hedging operations.
2 The position “Derivative financial instruments” comprises gains and losses on derivative financial assets and derivative financial liabilities.
129
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130
Financial Report 2022
CHF million
Investment return
Investment property
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL) 1
Financial instruments with characteristics of debt
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
– of which: mandatorily FVPL
– of which: designated as FVPL
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss
– of which: mandatorily FVPL
– of which: designated as FVPL
Derivative financial instruments 2
Financial receivables
Cash and cash equivalents
Investment return for own account and at own risk
Investment return for the account and risk
of customers and third parties
Total investment return
Interest
revenue
calculated
using the
effective
interest
method
–
–
–
–
77.2
1.2
76.0
–
–
–
87.7
81.6
6.1
–
–
–
–
2.6
– 1.4
166.0
–
166.0
Investment
income
Realised
gains and
losses
Change in
expected
credit loss
Investment
return
279.4
126.5
23.0
103.5
470.4
–
–
242.7
– 207.4
–
– 207.4
– 5,995.9
–
– 53.4
470.4
– 5,942.5
4.5
465.9
111.2
–
–
111.2
0.1
111.1
–
–
–
– 47.2
– 5,895.2
– 908.4
– 77.4
–
– 831.0
– 4.1
– 826.9
43.8
–
1.8
987.5
– 6,823.2
7.4
– 2,065.3
994.9
– 8,888.5
–
–
–
–
– 9.1
–
– 9.1
–
–
–
– 0.5
– 0.5
0.0
–
–
–
–
– 0.3
–
– 9.8
–
– 9.8
522.2
– 80.9
23.0
– 103.9
– 5,457.4
1.2
13.5
– 5,472.1
– 42.8
– 5,429.3
– 710.0
3.8
6.0
– 719.8
– 3.9
– 715.8
43.8
2.4
0.4
– 5,679.5
– 2,057.9
– 7,737.3
1 The position “Financial instruments with characteristics of equity – recognised at fair value through profit or loss (FVPL)” comprises gains and losses from hedging operations.
2 The position “Derivative financial instruments” comprises gains and losses on derivative financial assets and derivative financial liabilities.
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 debt essen-
tially contains interest income and net income from the recognition and reversal of impairment losses owing to application
of the effective interest method. The income from mortgages and loans is derived from the interest paid thereon and from
the recognition and reversal of impairment losses owing to application of the effective interest method. Income from cash
and cash equivalents is mainly derived from the interest paid thereon.
The change in the realised gains and losses predominantly results from market-related fluctuations in the measurement
of financial instruments with characteristics of debt that are designated as measured at FVPL.
131
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132
Financial Report The income from financial assets with characteristics of equity that are classified as measured at fair value through other
comprehensive income (FVOCI) can be broken down as follows:
CHF million
Income from financial instruments with characteristics of equity (FVOCI)
Income from financial instruments held at the balance sheet date
Income from financial instruments sold during the reporting period
Total income from financial instruments with characteristics of equity (FVOCI)
2023
2022
2.6
6.3
8.9
8.1
14.9
23.0
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 100.5 million was reported for 2023 (previous year: loss of CHF 50.6 million).
Other currency gains or losses
A gross currency loss of CHF 294.8 million was recognised directly in equity for the reporting year (previous year: loss of
CHF 115.2 million). Allowing for hedges of a net investment in a foreign operation (hedge accounting), a net loss of CHF
204.0 million was recognised for 2023 (previous year: net loss of CHF 127.6 million).
4.2
Investments on the balance sheet
as at 31.12.
CHF million
Investment property
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
Financial receivables
Cash and cash equivalents
Total investments
Investments for own
account and own risk
Investments for
the account and
risk of customers
and third parties
Total investments
2023
2022
2023
2022
2023
2022
8,248.6
3,105.6
29,267.0
15,602.3
449.8
727.2
8,495.1
4,620.2
29,117.5
14,665.8
508.6
600.7
2,069.0
2,045.7
–
–
8,248.6
11,827.2
11,656.4
14,932.9
2,886.5
2,147.1
32,153.4
–
622.8
0.0
916.3
–
15,602.3
300.7
0.0
1,072.6
727.2
8,495.1
16,276.7
31,264.6
14,665.8
809.3
600.6
1,325.1
2,985.3
3,370.8
59,469.5
60,053.5
16,252.8
15,429.3
75,722.3
75,482.9
131
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132
Financial Report 4.2.1
Investment property
CHF million
Balance as at 1 January
Additions
Additions from capitalisable investments
Additions arising from change in scope of consolidation
Disposals
Disposals arising from change in scope of consolidation
Reclassification
Reclassification from / 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
2023
2022
8,495.1
121.9
7.6
152.9
– 399.1
–
– 30.7
56.4
– 72.0
– 83.5
8,248.6
82.9
–
8,464.5
142.5
–
–
– 92.1
–
– 24.1
– 168.8
242.7
– 69.6
8,495.1
82.0
–
In 2023, six investment properties held for sale, which had a total fair value of CHF 56.4 million were reclassified as invest-
ment properties again as the parties to the sale were unable to reach an agreement.
During the reporting period, an owner-occupied property measured at FVPL with a fair value of CHF 5.1 million was
reclassified as an investment property. Also during the reporting period, an investment property with a fair value of CHF
35.8 million was reclassified as an owner-occupied property measured at FVPL. Both of these reclassifications were carried
out due to the change of use of the properties.
Baloise as lessor
Where it leases investment properties to third parties, the Baloise Group has entered into operating leases from which it
receives lease income.
Leasing in the income statement
CHF million
Fixed lease income
Variable lease income
Lease income
Due dates of lease 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
2023
2022
363.0
1.4
364.4
362.0
2.0
363.9
2023
2022
345.2
664.8
471.4
239.4
353.7
673.6
467.7
141.4
1,720.7
1,636.4
133
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134
Financial Report 4.2.2 Financial instruments with characteristics of equity
31.12.2023
CHF million
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Financial instruments with characteristics of equity
for own account and at own risk
of which: publicly listed
of which: not publicly listed
31.12.2022
CHF million
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Financial instruments with characteristics of equity
for own account and at own risk
of which: publicly listed
of which: not publicly listed
Equities
Equity
funds
Other
funds
Private
equity
Total
216.8
406.5
623.3
580.4
42.9
–
75.1
75.1
49.2
25.9
–
1,288.5
1,288.5
201.3
1,087.3
120.0
998.7
336.7
2,768.9
1,118.7
3,105.6
1.2
1,117.5
832.0
2,273.7
Equities
Equity
funds
Other
funds
Private
equity
Total
468.1
1,075.1
1,543.2
1,409.3
133.9
–
–
121.4
1,714.9
121.4
107.5
13.9
1,714.9
701.5
1,013.4
143.5
1,097.2
1,240.7
1.2
1,239.4
611.6
4,008.6
4,620.2
2,219.5
2,400.7
For equities in the non-life segment that are not held for trading, Baloise uses the FVOCI option in order to avoid accounting
mismatches. Gains and losses on individual equities in this group of financial instruments are recognised in other compre-
hensive income, as are currency effects; dividends are recognised in the income statement. Upon disposal or derecognition,
the cumulative gains and losses are transferred from other comprehensive income to retained earnings. The majority of
the equities measured at fair value through comprehensive income are publicly traded shares that are held for the purpose
of collecting dividends.
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
Change in fair value 1
Balance as at 31 December
1 Includes fair value revaluations as well as exchange rate differences.
2023
2022
611.6
118.1
–
903.6
265.7
–
– 387.7
– 487.5
– 1.4
– 3.8
336.7
–
– 70.2
611.6
In 2023, financial instruments with characteristics of equity and measured at fair value through other comprehensive income
were derecognised in an amount of CHF 389.1 million (2022: CHF 487.5 million) on the basis of strategic business decisions
or adjustments to the asset allocation. Of this total, CHF 387.7 million was attributable to disposals (2022: CHF 487.5 million).
The cumulative gains and losses on these instruments recognised in other comprehensive income, amounting to CHF 7.3
million, were transferred to retained earnings (2022: CHF 27.0 million).
133
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134
Financial Report 4.2.3 Financial instruments with characteristics of debt
31.12.2023
CHF million
Financial instruments with characteristics of debt
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
of which: mandatorily FVPL
of which: designated as FVPL
Financial instruments with characteristics of debt
for own account and at own risk
of which: publicly listed
of which: not publicly listed
31.12.2022
CHF million
Financial instruments with characteristics of debt
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
of which: mandatorily FVPL
of which: designated as FVPL
Financial instruments with characteristics of debt
for own account and at own risk
of which: publicly listed
of which: not publicly listed
Public
corporations
Industrial
enterprises
Financial
institutions
Private
debt
Other
Total
81.6
2,509.9
13,059.1
16.1
13,043.1
15,650.6
15,650.6
–
–
1,338.0
3,759.7
170.4
3,589.2
5,097.7
5,071.3
26.4
11.5
1,579.1
4,531.1
59.0
2.0
227.7
2,137.4
–
4,472.1
2,137.4
6,121.8
6,096.4
2,367.0
–
25.4
2,367.0
29.9
–
–
–
–
29.9
29.9
–
125.0
5,654.7
23,487.3
245.5
23,241.8
29,267.0
26,848.2
2,418.8
Public
corporations
Industrial
enterprises
Financial
institutions
Private
debt
Other
Total
82.6
2,432.9
13,434.8
5.6
13,429.2
15,950.3
15,950.3
–
–
1,330.2
3,496.8
100.7
3,396.1
4,827.0
4,798.2
28.8
21.5
1,421.7
4,216.2
212.3
4,003.9
5,659.5
5,637.0
–
297.8
2,378.0
–
2,378.0
2,675.7
–
22.4
2,675.7
5.0
–
–
–
–
5.0
5.0
–
109.1
5,482.6
23,525.9
318.7
23,207.2
29,117.5
26,390.5
2,727.0
135
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
136
Financial Report Financial instruments with characteristics of debt (AC)
as at 31.12.
CHF million
Financial instruments
with characteristics of
debt carried at cost
Public corporations
Industrial enterprises
Financial institutions
Private debt
Other
Financial instruments
with characteristics of
debt carried at cost
Gross amount
Impairment (ECL)
Carrying amount
Fair value
2023
2022
2023
2022
2023
2022
2023
2022
81.6
–
11.5
2.0
29.9
82.6
–
21.5
–
5.0
125.0
109.1
–
–
–
–
–
–
–
–
–
–
–
–
81.6
–
11.5
2.0
29.9
82.6
–
21.5
–
5.0
81.6
–
11.5
2.0
30.5
80.3
–
21.5
–
5.0
125.0
109.1
125.5
106.8
135
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
136
Financial Report 4.2.4 Mortgages and loans
31.12.2023
CHF million
Mortgages
Promissory
notes
Registered
bonds
Time
deposits
Reverse
repurchase
agree-
ments Other loans
Total
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
8,017.5
–
Recognised at fair value through profit or loss (FVPL)
3,104.3
of which: mandatorily FVPL
of which: designated as FVPL
Mortgages and loans for own account
and at own risk
31.12.2022
CHF million
0.2
228.6
999.4
4.6
994.8
–
762.7
1,015.0
343.1
10,138.4
326.4
765.4
–
765.4
–
2.5
–
2.5
–
–
–
–
–
37.4
31.7
5.7
555.0
4,909.0
36.2
4,872.7
–
3,104.3
11,121.8
1,228.1
1,091.8
765.2
1,015.0
380.5
15,602.3
Mortgages
Promissory
notes
Registered
bonds
Time
deposits
Reverse
repurchase
agree-
ments Other loans
Total
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
7,857.0
–
97.5
250.2
Recognised at fair value through profit or loss (FVPL)
3,220.2
1,022.6
of which: mandatorily FVPL
of which: designated as FVPL
Mortgages and loans for own account
and at own risk
–
211.3
465.0
302.8
8,933.5
333.2
872.1
–
–
–
–
–
–
–
–
–
–
34.2
34.2
–
583.4
5,149.0
40.1
5,108.9
–
6.0
3,220.2
1,016.6
872.1
11,077.2
1,370.2
1,205.2
211.3
465.0
336.9
14,665.8
as at 31.12.
CHF million
Mortgages and loans (AC)
Mortgages
Promissory notes
Time deposits
Reverse repurchase
agreements
Other loans
Total mortgages
and loans (AC)
Gross amount
Impairment (ECL)
Carrying amount
Fair value
2023
2022
2023
2022
2023
2022
2023
2022
8,034.2
7,875.5
– 16.7
0.2
762.7
1,015.0
343.3
97.5
211.3
465.0
303.5
–
–
–
– 18.5
0.0
–
–
8,017.5
7,857.0
8,089.6
7,654.2
0.2
762.7
1,015.0
343.1
97.5
211.3
465.0
302.8
0.2
762.6
1,015.0
341.6
97.5
211.3
465.0
301.9
– 0.3
– 0.7
10,155.3
8,952.8
– 16.9
– 19.3
10,138.4
8,933.5
10,208.9
8,729.9
137
Baloise Group Annual Report 2023
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138
Financial Report 4.2.5 Derivatives
as at 31.12.
CHF million
Interest rate instruments
Forward contracts
Swaps
OTC options
Traded options
Futures
Other 1
Contract value
Fair value assets
Fair value liabilities
2023
2022
2023
2022
2023
2022
–
–
1,018.5
1,152.5
–
–
–
1.7
–
–
–
4.3
–
39.0
–
–
–
205.8
244.8
–
3.4
–
–
3.4
–
71.8
–
–
–
327.7
399.5
–
6.9
2.4
–
9.4
–
27.1
–
–
–
51.9
79.0
–
–
–
–
–
–
47.5
–
–
–
37.8
85.3
–
–
0.9
–
0.9
Total interest rate instruments
1,020.1
1,156.8
Equity instruments
Forward contracts
OTC options
Traded options
Futures
–
251.7
–
–
–
1,157.1
352.9
–
Total equity instruments
251.7
1,510.0
Foreign currency instruments
Forward contracts
Swaps
OTC options
Traded options
Futures
5,451.3
8,247.2
201.6
99.7
4.4
49.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total foreign currency instruments
5,451.3
8,247.2
201.6
99.7
4.4
49.5
Derivative financial instruments for own account
and at own risk
of which: designated as fair value hedges
of which: designated as hedges
of a net investment in a foreign operation
1 The “Other” line item contains structured products of Baloise Life Ltd.
6,723.1
1,018.5
10,913.9
–
449.8
39.0
508.6
–
1,423.3
1,951.8
60.6
67.7
83.4
27.1
1.1
135.8
–
1.2
For disclosure purposes, the contract value or notional amount is used for derivatives where the principal can be exchanged
at maturity (options, futures and currency swaps). The contract value or notional amount is also used for instruments where
the principal is only notionally lent or borrowed (interest rate swaps). The contract value or notional amount is disclosed
in order to show the volume of derivative transactions in which the Baloise Group is involved.
137
Baloise Group Annual Report 2023
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138
Financial Report Hedging of interest rate risk using fair value hedges
To hedge interest rate risk on receivables arising from fixed-rate mortgages and on liabilities arising from fixed-rate mort-
gage-backed bonds, Baloise Bank uses interest rate swap derivatives (payer and receiver swaps). It designates these
derivatives as hedging instruments and designates the mortgages and mortgage-backed bonds as hedged items as
part of a fair value hedge. This eliminates the accounting mismatches between the hedging instruments measured at fair
value through profit or loss and the hedged items measured at amortised cost. Any gain or loss on the hedging instrument
is recognised in profit or loss; the hedging gain or loss leads to an interest rate-related adjustment of the hedged item’s
carrying amount that is also recognised in profit or loss. The following tables show how the hedge accounting is presented
on the balance sheet.
2023
CHF million
Interest rate risk
Interest rate swaps – mortgages
Interest rate swaps – mortgage-backed bonds
Carrying amount
Nominal
amount
Assets
Liabilities
762.6
255.9
39.0
–
–
27.1
The hedging instruments that are held for the purpose of hedging mortgages and mortgage-backed bonds are recognised
in the “Derivative financial instruments” line item on the balance sheet.
2023
CHF million
Mortgages
Mortgage-backed bonds
Accumulated amount of
fair value hedge adjust-
ments on the hedged item
included in the carrying
amount of the hedged item
Carrying amount
Assets
Liabilities
Assets
Liabilities
723.1
–
–
228.7
39.5
–
–
27.2
The hedged mortgages are recognised in the “Mortgages and loans” line item on the balance sheet.
The hedged mortgage-backed bonds are recognised in the “Liabilities arising from financial contracts” line item on the
balance sheet.
139
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140
Financial Report 2023
CHF million
Interest rate risk
Interest rate swaps –
mortgages
Interest rate swaps –
mortgage-backed bonds
Change in fair value used for
calculating hedge ineffectiveness
Ineffectiveness recognised in profit or loss
– 32.8
20.4
– 0.5
0.1
Hedge ineffectiveness is recognised in the “Realised gains and losses on investments” line item.
2023
CHF million
Mortgages
Mortgage-backed bonds
Change in value used for
calculating hedge ineffectiveness
Accumulated amount of fair value hedge adjust-
ments remaining in the statement of financial
position for any hedged items that have ceased
to be adjusted for hedging gains and losses
30.8
20.2
–
–
139
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140
Financial Report Hedges of a net investment in a foreign operation
The Group’s own companies, Baloise Private Equity (Luxembourg) SCS and Baloise Alternative Invest S. A. SICAV-RAIF, manage
the substantial investments in alternative financial assets such as private equity and senior secured loans.
The Baloise Group’s FX managers enter into currency hedging transactions in the form of forward contracts to limit the
currency risk exposure of its net investment in these foreign entities whose reporting currency is the US dollar. The limitation
to forward exchange transactions in the implementation of hedging strategies makes it easier to document the hedging
efficiency and apply hedge accounting (for investments of Swiss entities).
as at 31.12.
CHF million
Foreign currency instruments
Forward contracts
Swaps
OTC options
Traded options
Traded futures
Contract value
Fair value assets
Fair value liabilities
2023
2022
2023
2022
2023
2022
1,423.3
1,951.8
60.6
67.7
1.1
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total foreign currency instruments used as hedges
of a net investment in a foreign operation
1,423.3
1,951.8
60.6
67.7
1.1
1.2
as at 31.12.
CHF million
Amount recognised directly in equity
Hedge ineffectiveness reclassified to the income statement
2023
2022
118.1
–
– 11.9
–
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.
141
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142
Financial Report 4.2.6 Financial receivables
as at 31.12.
CHF million
Financial receivables (AC)
Receivables from financial
contracts
Receivables from
investments
Other financial receivables
Financial receivables (AC)
Financial receivables
(FVPL)
Receivables from
investments
Financial receivables
(FVPL)
of which:
mandatorily FVPL
of which:
designated as FVPL
Total financial receivables
for own account and at
own risk
Gross amount
Impairment (ECL)
Carrying amount
Fair value
2023
2022
2023
2022
2023
2022
2023
2022
71.5
74.4
– 1.4
522.8
136.9
731.3
411.2
119.2
604.7
– 1.5
– 1.1
– 4.0
0.0
0.0
0.0
–
0.0
0.0
0.0
–
–
–
–
–
– 1.1
– 1.7
– 1.3
– 4.1
–
–
–
–
70.1
73.3
70.4
73.4
521.3
135.8
727.2
409.5
117.9
600.7
520.9
134.5
725.9
413.1
116.5
603.0
0.0
0.0
0.0
–
0.0
0.0
0.0
–
0.0
0.0
0.0
–
0.0
0.0
0.0
–
731.3
604.7
– 4.0
– 4.1
727.2
600.7
725.9
603.0
Other receivables include CHF 0.2 million in premiums that are due but have not yet been paid relating to contracts meas-
ured using the PAA and not recognised as part of the LRC (previous year: CHF 0.2 million).
Financial liabilities
4.3
4.3.1 Gains or losses on financial contracts
CHF million
Result from financial contracts for own account and at own risk
Interest expenses
Realised gains and losses
Other result from financial contracts
Total result from financial contracts for own account and at own risk
Result from financial contracts for the account and at the risk of policyholders and third parties
Total result from financial contracts
2023
2022
– 53.7
– 0.1
– 9.3
– 63.2
– 18.2
47.0
– 7.7
21.2
– 779.6
– 842.7
1,469.3
1,490.5
141
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142
Financial Report CHF million
Interest expenses arising from financial contracts (AC)
Interest on loans
Interest due
Interest arising from banking business
Interest expenses on repurchase agreements
Expenses arising from other financial contracts
Interest expenses arising from financial contracts (AC)
Interest expenses arising from financial contracts (FVPL)
Expenses arising from other financial contracts
Interest expenses arising from financial contracts (FVPL)
of which: mandatorily FVPL
of which: designated as FVPL
2023
2022
– 19.6
– 0.3
– 16.8
– 3.3
– 13.5
– 53.4
– 0.3
– 0.3
– 0.3
–
– 9.2
– 0.5
– 0.2
2.3
– 9.6
– 17.2
– 1.0
– 1.0
– 1.0
–
Total interest expense from financial contracts for own account and at own risk
– 53.7
– 18.2
4.3.2 Financial contracts on the balance sheet
CHF million
Liabilities arising from financial contracts at own account and at own risk
Liabilities arising from financial contracts at the account and risk of customers and third parties
Total liabilities arising from financial contracts
2023
2022
8,170.4
11,766.0
19,936.3
8,236.0
11,603.7
19,839.7
Financial liabilities for the account and at the risk of customers and third parties are financial contracts 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, market-related fluctuations in the
measurement of the portfolio (recognised in profit or loss) and exchange rate movements.
143
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144
Financial Report as at 31.12.
CHF million
Liabilities arising from financial contracts (AC)
Liabilities to banks
Repurchase agreements
Loans
Mortgages
Savings and customer deposits
Medium-term bonds
Mortgage-backed bonds
Other financial contracts
Liabilities arising from financial contracts (AC)
Liabilities arising from financial contracts (FVPL)
Mortgage-backed bonds
Other financial contracts
Liabilities arising from financial contracts (FVPL)
of which: mandatorily FVPL
of which: designated as FVPL
Carrying amount
Fair value
2023
2022
2023
2022
30.1
–
5.8
5.4
5,256.1
286.7
2,529.1
10.0
8,123.3
–
47.1
47.1
47.1
–
41.2
250.0
6.5
18.9
29.9
–
6.3
5.4
5,443.0
5,183.4
95.6
289.8
2,112.5
2,477.9
15.6
10.0
7,983.3
8,002.8
208.5
44.3
252.7
44.3
208.5
–
47.1
47.1
47.1
–
39.7
250.0
6.5
18.9
5,251.9
92.9
1,922.5
15.6
7,598.2
208.5
44.3
252.7
44.3
208.5
Total liabilities arising from financial contracts for own account and at own risk
8,170.4
8,236.0
8,049.8
7,850.9
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.
143
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144
Financial Report Offsetting of financial assets and liabilities
4.4
The relevant information used to determine the amount of the counterparty risk exposure includes information on the
offsetting of financial assets and liabilities on the balance sheet and any existing offsetting agreements in this context.
This information is summarised in the table below.
The table also shows the scope of the offsetting agreements that exist, even though no offsetting as defined in IFRS
is carried out on the balance sheet. The offsetting agreements are ISDA and Swiss master agreements for OTC derivative
transactions, Swiss master agreements for repos (multilateral version), and global master securities lending agreements.
In the event of insolvency or if one of the parties fails to fulfil its contractual obligations, each party has the right to close
the current contracts and to offset outstanding receivables with liabilities and collateral received within the offsetting
agreement.
Offsetting recognised
on the balance sheet
Netting potential not recognised
on the balance sheet
Gross assets
before offset
Offset with
gross
liabilities
Net assets
recognised
on the
balance
sheet
Assets after
consideration
of netting
potential
Collateral
received
Financial
liability
1,264.0
– 2.6
1,261.3
–
– 1,178.8
82.5
Offsetting recognised
on the balance sheet
Netting potential not recognised
on the balance sheet
Gross assets
before offset
Offset with
gross
liabilities
Net assets
recognised
on the
balance
sheet
Assets after
consideration
of netting
potential
Collateral
received
Financial
liability
664.1
– 18.5
645.6
0.0
– 558.9
86.7
2023
CHF million
Financial assets
2022
CHF million
Financial assets
145
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146
Financial Report Offsetting recognised
on the balance sheet
Netting potential not recognised
on the balance sheet
Net liabilities
recognised
on the
balance
sheet
Offset with
gross assets
Gross
liabilities
before offset
Liabilities
after
consideration
of netting
potential
Collateral
pledged
Financial
asset
30.0
–
30.0
–
– 27.1
2.8
Offsetting recognised
on the balance sheet
Netting potential not recognised
on the balance sheet
Net liabilities
recognised
on the
balance
sheet
Offset with
gross assets
Gross
liabilities
before offset
Liabilities
after
consideration
of netting
potential
Collateral
pledged
Financial
asset
347.6
0.0
347.6
0.0
– 297.0
50.6
2023
CHF million
Financial liabilities
2022
CHF million
Financial liabilities
Fair value measurement of investments and financial liabilities
4.5
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 occur-
ring 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 reli-
able conclusions to be drawn with regard to fair value.
Detailed information about measurement principles and the measurement methods used can be found in note 12.2.
145
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146
Financial Report Details of the methods used to measure level 2 and 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
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Financial instruments with characteristics of debt
Internal
measurement
methods
Net asset value
Net asset value
Price of underlying instrument,
liquidity discount, balance sheet
and income statement figures
n. a.
n. a.
Recognised at fair value through OCI (FVOCI)
Present-value model
Yield curve,
swap rates, default risk
Recognised at fair value through profit or loss (FVPL)
Mortgages and loans
Present-value model
Net asset value
Interest rate, credit spread, market
price
n. a.
Recognised at amortised cost (AC)
Present-value model
Interest rate, credit spread
Recognised at fair value through profit or loss (FVPL)
Present-value model
SARON, swap rates
Derivative financial instruments
Liabilities arising from financial contracts
Recognised at fair value through profit or loss (FVPL)
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
Investment fund prices,
interest rates, cancellation rate
Present-value model
SARON, swap rates
–
–
–
–
–
–
–
–
–
–
–
Net asset value
n. a.
n. a.
Financial instruments with characteristics of debt
Present-value model
Interest rate, credit spread
Mortgages and loans
Recognised at amortised cost (AC)
Present-value model
Swap curve, individual spread
Recognised at fair value through OCI (FVOCI)
Present-value model
Swap curve, individual spread
Recognised at fair value through profit or loss (FVPL)
Present-value model
Swap curve, individual spread
Liabilities arising from financial contracts
Recognised at fair value through profit or loss (FVPL)
Stochastic
present-value model
Investment fund prices,
interest rates, cancellation rate
Present-value model
SARON, swap rates
–
–
–
–
–
–
Investment property
DCF method
Discount rate 1
2.40 % – 4.20 % 3
Rental income 2 280 – 300 CHF million 3
Vacancy costs 1
12 – 18 CHF million 3
Running costs 1
24 – 30 CHF million 3
Maintenance costs 1
23 – 29 CHF million 3
Capital expenditure 2 100 – 130 CHF million 3
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.
147
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148
Financial Report 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 incon-
sistencies 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 FVOCI or FVPL and classified as level 3 are primarily
private equity investments and alternative investments held by Baloise 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 net
asset value (NAV). These external providers generally use non-public information to calculate the individual investments’ NAV.
Financial instruments with characteristics of debt 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.
147
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148
Financial Report Fair value of investments and financial liabilities for own account and at own risk
Total
carrying
amount
Total fair
value
Level 1
Level 2
Level 3
31.12.2023
CHF million
Investments
Investment property
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
8,248.6
3,105.6
336.7
8,248.6
3,105.6
336.7
–
832.0
180.9
651.1
–
419.3
23.3
396.0
Recognised at fair value through profit or loss (FVPL)
2,768.9
2,768.9
Financial instruments with characteristics of debt
29,267.0
29,267.5
26,848.7
2,418.8
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
125.0
125.5
5,654.7
5,654.7
123.6
5,427.0
Recognised at fair value through profit or loss (FVPL)
23,487.3
23,487.3
21,298.2
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Derivative financial instruments
Financial receivables
Financial liabilities
Liabilities arising from financial contracts
Recognised at amortised cost (AC)
Recognised at fair value through profit or loss (FVPL)
Derivative financial instruments
Outstanding bonds 1
1 Details of the outstanding bonds can be found in note 5.2.1.
15,602.3
15,672.9
10,138.4
10,208.9
555.0
555.0
4,909.0
4,909.0
449.8
727.2
449.8
725.9
8,170.4
8,123.3
47.1
83.4
8,049.8
8,002.8
47.1
83.4
–
–
–
–
0.2
323.8
42.7
0.7
42.0
–
2,385.0
2,219.8
2,219.8
2.0
227.7
2,189.1
12,308.9
9,204.6
–
3,104.3
449.6
6.7
7,981.0
7,981.0
–
83.4
–
8,248.6
1,854.3
132.5
1,721.8
–
–
–
–
3,364.0
1,004.4
555.0
1,804.7
–
395.4
26.1
21.0
5.1
0.0
–
149
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150
Financial Report Total
carrying
amount
Total fair
value
Level 1
Level 2
Level 3
31.12.2022
CHF million
Investments
Investment property
Financial instruments with characteristics of equity
Recognised at fair value through OCI (FVOCI)
8,495.1
4,620.2
611.6
8,495.1
4,620.2
611.6
–
2,219.5
436.9
1,782.6
–
483.5
19.8
463.7
Recognised at fair value through profit or loss (FVPL)
4,008.6
4,008.6
Financial instruments with characteristics of debt
29,117.5
29,115.2
26,391.5
2,723.8
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
109.1
106.8
5,482.6
5,482.6
106.8
5,184.8
Recognised at fair value through profit or loss (FVPL)
23,525.9
23,525.9
21,099.8
8,495.1
1,917.2
154.8
1,762.4
–
–
–
–
3,122.8
610.7
583.4
–
297.8
2,426.0
11,339.4
8,119.2
–
–
–
–
–
3,220.2
1,928.8
8.7
213.2
499.9
10.6
–
379.2
14,665.8
14,462.2
8,933.5
8,729.9
583.4
583.4
5,149.0
5,149.0
508.6
600.7
508.6
603.0
Mortgages and loans
Recognised at amortised cost (AC)
Recognised at fair value through OCI (FVOCI)
Recognised at fair value through profit or loss (FVPL)
Derivative financial instruments
Financial receivables
Financial liabilities
Liabilities arising from financial contracts
Recognised at amortised cost (AC)
Recognised at fair value through profit or loss (FVPL)
Derivative financial instruments
Outstanding bonds 1
1 Details of the outstanding bonds can be found in note 5.2.1.
8,236.0
7,983.3
252.7
135.8
7,850.9
7,598.2
252.7
135.8
44.6
0.3
44.3
0.9
2,583.8
2,397.1
2,397.1
7,765.6
7,557.1
208.5
134.9
–
40.8
40.8
–
–
–
149
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150
Financial Report Fair value of investments and financial liabilities for the account and risk of customers and third parties
31.12.2023
CHF million
Investments
Total
carrying
amount
Total fair
value
Level 1
Level 2
Level 3
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
11,827.2
11,827.2
2,886.5
2,886.5
10,794.8
2,529.3
–
622.8
–
622.8
–
–
577.5
233.5
–
622.8
455.0
123.7
–
–
Financial liabilities
Liabilities arising from financial contracts
Derivative financial instruments
11,766.0
11,766.0
10,532.5
–
–
–
687.3
–
546.2
–
31.12.2022
CHF million
Investments
Total
carrying
amount
Total fair
value
Level 1
Level 2
Level 3
Financial instruments with characteristics of equity
Financial instruments with characteristics of debt
Mortgages and loans
Derivative financial instruments
11,656.4
11,656.4
2,147.1
2,147.1
11,250.0
1,830.1
–
300.7
–
300.7
–
0.0
–
204.9
–
300.7
406.5
112.1
–
–
Financial liabilities
Liabilities arising from financial contracts
Derivative financial instruments
11,603.7
11,603.7
2,285.7
619.9
8,698.1
–
–
–
–
–
151
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Baloise Group Annual Report 2023
152
Financial Report Investments and financial liabilities measured at fair value on a recurring basis for own account and at own risk
classified as Level 3
Liabilities
arising from
financial
contracts
Total
financial
liabilities
FVPL
–
5.1
–
–
–
–
–
–
–
–
–
–
5.1
–
–
–
–
–
–
–
–
–
–
21.8
– 35.8
56.4
25.0
4.2
Investment
property
Financial instruments with
characteristics of equity
Mortgages and loans
Total
investments
FVPL
FVOCI
FVPL
FVOCI
FVPL
8,495.1
129.5
154.8
11.1
1,762.4
167.7
583.4
13.6
1,928.8
12,924.4
64.7
386.6
152.9
– 399.1
–
– 1.5
–
–
–
– 111.2
– 29.2
– 179.8
152.9
– 720.8
–
–
–
–
–
–
16.8
–
–
–
–
–
–
–
–
–
–
18.5
– 6.0
84.6
–
5.1
– 35.8
56.4
– 72.0
–
– 83.5
– 24.1
– 7.8
–
– 132.3
28.3
– 35.1
–
– 93.6
– 352.3
8,248.6
132.5
1,721.8
555.0
1,804.7
12,462.5
5.1
5.1
– 88.6
–
– 10.2
–
82.9
– 15.9
–
–
2023
CHF million
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
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
In 2023, six investment properties held for sale, which had a total fair value of CHF 56.4 million were reclassified as invest-
ment properties again as the parties to the sale were unable to reach an agreement.
During the reporting period, an owner-occupied property measured at FVPL with a fair value of CHF 5.1 million was
reclassified as an investment property. Also during the reporting period, an investment property with a fair value of CHF
35.8 million was reclassified as an owner-occupied property measured at FVPL. Both of these reclassifications were carried
out due to the change of use of the properties.
151
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
152
Financial Report Investment
property
Financial instruments with
characteristics of equity
Mortgages and loans
Total
investments
Liabilities
arising from
financial
contracts
Total
financial
liabilities
FVPL
FVOCI
FVPL
FVOCI
FVPL
FVPL
8,464.5
142.5
–
– 92.1
–
–
– 168.8
242.7
–
– 69.6
99.1
18.6
–
– 1.2
–
–
0.0
–
–
43.6
– 5.3
1,742.2
166.1
–
– 190.3
–
17.3
–
–
694.9
94.5
3,200.2
14,201.0
181.7
603.3
–
– 56.6
–
–
– 725.9
– 1,066.1
–
–
–
–
–
–
–
–
–
17.3
– 24.1
– 168.8
61.6
– 6.2
– 621.8
– 323.7
–
– 34.5
– 111.0
– 32.2
–
– 105.5
– 67.4
– 247.1
8,495.1
154.8
1,762.4
583.4
1,928.8
12,924.4
240.7
–
– 30.8
–
– 592.2
– 382.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
CHF million
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
Reclassification to
non-current assets
classified as held for sale
Changes in fair value
recognised in profit or loss
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
Reclassified from level 3
– 24.1
153
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
154
Financial Report Investments and financial liabilities of customers and third parties measured at fair value on a recurring basis
classified as Level 3
2023
CHF million
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
Exchange differences
Balance as at 31 December
Financial
instruments
with
characteris-
tics of equity
Financial
instruments
with
characteris-
tics of debt
Liabilities
arising from
financial
contracts
Total
financial
liabilities
Total
investments
FVPL
FVPL
FVPL
406.5
75.5
–
– 69.0
–
0.2
–
69.2
– 27.4
455.0
112.1
18.0
–
– 1.2
–
2.3
– 1.1
1.1
– 7.6
123.7
518.6
93.5
–
– 70.2
–
2.5
– 1.1
70.2
– 34.9
578.7
8,698.1
8,698.1
10.6
–
– 2.6
–
0.8
10.6
–
– 2.6
–
0.8
– 8,799.6
– 8,799.6
802.7
– 163.8
546.2
802.7
– 163.8
546.2
Changes in fair value of financial instruments
held at the balance sheet date and recognised in profit or loss
69.2
1.1
70.2
– 803.5
– 803.5
2022
CHF million
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
Exchange differences
Balance as at 31 December
Financial
instruments
with
characteris-
tics of equity
Financial
instruments
with
characteris-
tics of debt
Liabilities
arising from
financial
contracts
Total
financial
liabilities
Total
investments
FVPL
FVPL
FVPL
363.7
58.3
–
– 33.4
–
1.3
– 0.1
35.2
– 18.5
406.5
130.5
17.9
–
– 32.3
–
2.8
–
– 0.7
– 6.0
112.1
494.1
76.2
–
– 65.6
–
4.1
– 0.1
34.4
– 24.5
518.6
9,880.3
9,880.3
3.1
–
– 4.7
–
3.6
– 0.1
– 719.8
– 464.5
8,698.1
3.1
–
– 4.7
–
3.6
– 0.1
– 719.8
– 464.5
8,698.1
Changes in fair value of financial instruments
held at the balance sheet date and recognised in profit or loss
35.0
0.0
35.0
–
–
153
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
154
Financial Report Reclassification of assets and liabilities between level 1 and level 2
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 for 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.
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
change of use of two owner-occupied properties measured at FVPL.
The reclassification of investment properties from level 3 in 2022 was due to the change of use of a property in Switzerland.
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, 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.
155
Baloise Group Annual Report 2023
Financial Report 5. Funding
5.1
Borrowing costs
CHF million
Interest expense from outstanding bonds
Interest expense from lease liabilities
Total borrowing costs
5.2
Financial liabilities
CHF million
Outstanding bonds
Lease liabilities
Total financial liabilities
2023
2022
25.6
0.5
26.2
22.1
0.3
22.4
2023
2022
2,334.0
57.3
2,583.8
25.6
2,391.3
2,609.4
The maturity analysis of undiscounted cash flows from senior debt and lease liabilities is presented in note 11.3.3.
5.2.1 Outstanding bonds
CHF million
Balance as at 1 January
Additions
Disposals / repayments
Interest expenses
Borrowing costs paid
Accrued borrowing costs
Interest costs (sub-total)
Senior
debt
Subordinated
debt
2023
Total
Senior
debt
Subordinated
debt
2,084.7
549.9
– 500.0
18.4
– 13.5
– 4.9
0.0
499.0
2,583.8
–
– 300.0
549.9
– 800.0
7.3
– 6.3
– 0.7
0.3
25.6
– 19.8
– 5.6
0.3
1,900.6
534.7
– 350.0
12.0
– 11.3
– 1.3
– 0.6
498.5
–
–
10.2
– 9.7
–
0.5
2022
Total
2,399.1
534.7
– 350.0
22.1
– 20.9
– 1.3
– 0.1
Balance as at 31 December
2,134.6
199.4
2,334.0
2,084.7
499.0
2,583.8
On 30 January 2023, Baloise Holding Ltd placed an additional senior green bond issue on behalf of the Baloise Group with
a total volume of CHF 175 million and a coupon of 2.20 per cent (maturity period: 2023–2032, ISIN CH1232107180) as part of
its funding activities.
In addition, the Baloise Group issued a senior bond with a volume of CHF 100 million and a coupon of 2.35 per cent
(maturity period: 2023-2033, ISIN CH1256367199) on 2 May 2023 as part of its funding activities.
On 26 April 2023, a CHF-denominated senior bond with a volume of CHF 225 million and a coupon of 1.75 per cent issued
by Baloise Holding Ltd was repaid. Furthermore on 19 June 2023 Baloise Life Ltd repaid an open-ended CHF-denominated
subordinated bond with a volume of CHF 300 million and a coupon of 1.75 per cent on the first possible call date.
156
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
157
Financial Report On 16 February 2022, Baloise Holding Ltd placed an additional senior 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.
Furthermore, a senior green bond with a volume of CHF 110 million was issued on 19 July 2022. The senior green bond
was issued with a maturity date of July 2028 and a coupon of 1.9 per cent (ISIN: CH1199322350). The capital raised with the
issuance of the senior green bond will be used to finance green properties under Baloise’s existing green bond framework.
Also in the second half of the year, a further senior bond of CHF 225 million with a coupon of 2.2 per cent (maturity period:
2022–2029, ISIN CH1206367661) was issued on 30 November 2022.
Terms & conditions of outstanding bonds as at 31 December 2023
Issuer
Face value (CHF million)
Interest rate
Redemption value
Issue date
Repayment date
ISIN
Ranking
Issuer
Face value (CHF million)
Interest rate
Redemption value
Issue date
Repayment date
ISIN
Ranking
Issuer
Face value (CHF million)
Interest rate
Redemption value
Issue date
Repayment date
ISIN
Ranking
1 The first scheduled call date for the issuer is 19 June 2028.
Baloise
Holding Ltd
Baloise
Life Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
150
1.125 %
100 %
200
2.200 %
100 %
200
0.500 %
100 %
100
0.000 %
100 %
125
0.000 %
100 %
19.12.2014
19.09.2017
28.01.2019
25.09.2019
25.09.2019
19.12.2024
19.06.2048
28.11.2025
25.09.2026
25.09.2029
CH0261399064 CH0379611004 CH0458097976 CH0496692978 CH0496692986
senior
subordinated 1
senior
senior
senior
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
175
0.250 %
100 %
125
0.500 %
100 %
250
0.150 %
100 %
200
0.125 %
100 %
200
0.300 %
100 %
16.07.2020
16.07.2020
15.02.2021
27.09.2021
16.02.2022
16.12.2026
16.12.2030
17.02.2031
27.06.2030
16.02.2027
CH0553331817 CH0553331825 CH0593641068 CH1130818839 CH1148728210
senior
senior
senior
senior
senior
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
Baloise
Holding Ltd
110
1.900 %
100 %
225
2.200 %
100 %
175
2.200 %
100 %
100
2.350 %
100 %
19.07.2022
30.11.2022
30.01.2023
02.05.2023
19.07.2028
30.05.2029
30.01.2032
02.05.2033
CH1199322350 CH1206367661 CH1232107180 CH1256367199
senior
senior
senior
senior
156
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
157
Financial Report 5.2.2 Lease liabilities
Baloise as 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 and recognises it on its balance sheet. On the balance sheet,
right-of-use assets are recognised under the “Property, plant and equipment” line item and the lease liabilities under
“Financial liabilities”. 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-lease components within a rental contract are not
treated separately. Instead, they are also taken into account in the measurement of the relevant lease liability.
Leases of low-value assets 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.
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
Interest expenses
Repayment of lease liabilities
Exchange differences
Balance as at 31 December
Leases in the income statement
CHF million
Income relating to sublease contracts
Expenses relating to leases of low-value and short-term leases
Interest expenses on lease liabilities
Depreciation and impairment of right-of-use assets
2023
2022
25.6
46.6
–
– 0.4
– 0.5
0.5
– 12.3
– 2.3
57.3
26.5
12.3
–
– 0.8
–
0.3
– 12.1
– 0.6
25.6
2023
2022
–
– 3.8
– 0.5
– 12.0
0.1
– 4.6
– 0.3
– 11.7
158
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
159
Financial Report 6. Employee benefits
6.1
Receivables and liabilities arising from employee benefits
CHF million
Receivables from employee benefits
Short-term employee benefits
Post-employment benefits – defined benefit plans
Total receivables from employee benefits
Liabilities from employee benefits
Short-term employee benefits
Post-employment benefits – defined benefit plans
Other long-term employee benefits
Termination benefits
Total liabilities from employee benefits
31.12.2023
31.12.2022
4.1
2.2
6.3
70.2
537.3
25.4
2.6
635.5
5.2
2.2
7.3
78.2
532.7
23.8
5.8
640.5
Post-employment benefits – defined benefit plans
6.2
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.
158
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
159
Financial Report 6.2.1 Comprehensive income on defined benefit plans
CHF million
Current service cost (net)
Net interest cost
Unrecognised past service cost
Gains and losses on plan settlements
Expected return on reimbursement rights
2023
2022
– 40.6
– 17.8
–
–
–
– 66.8
– 6.8
– 5.6
–
–
Total expenses for defined benefit plans recognised in the income statement
– 58.4
– 79.3
Actuarial gains / losses
Return on plan assets
Effect of the asset ceiling, excluding the time value of money
Total other comprehensive income on defined benefit plans
– 392.3
22.3
293.0
– 77.0
840.4
– 120.8
– 497.7
222.0
Total comprehensive income on defined benefit plans
– 135.4
142.7
6.2.2 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, including the time value of money
Net actuarial liabilities under defined benefit plans
Fair value of plan assets
CHF million
Balance as at 1 January
Interest rate effect
Return on plan assets (after deduction of the time value of money)
Employees’ savings and purchases
Exchange differences
Employer contribution
Employee contribution
Benefits paid
Cash flow between Baloise Group and plan assets
(excl. benefits paid to employees and employer contribution)
Additions / disposals arising from change in scope of consolidation
Reclassification to non-current assets classified as held for sale
Gains and losses on plan settlements
Balance as at 31 December
31.12.2023
31.12.2022
2,853.7
2,780.3
– 2,645.0
– 2,286.7
– 530.8
– 212.8
– 535.0
– 525.6
– 498.6
– 530.6
2023
2022
2,780.3
67.3
22.3
41.4
– 2.7
71.2
41.9
2,899.1
10.9
– 120.8
39.5
– 2.5
64.1
43.2
– 168.1
– 153.2
–
–
–
–
–
–
–
–
2,853.7
2,780.3
160
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
161
Financial Report
Partially funded liabilities under defined benefit plans
CHF million
Balance as at 1 January
Current service cost (net)
Interest rate effect
Employee contribution
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
Unfunded liabilities under defined benefit plans
CHF million
Balance as at 1 January
Current service cost (net)
Interest rate effect
Employee contribution
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
2023
2022
– 2,286.7
– 2,931.1
– 32.0
– 58.9
– 41.9
– 41.4
– 355.2
– 257.6
– 12.9
– 84.8
3.0
–
168.1
–
–
–
– 52.8
– 10.2
– 43.2
– 39.5
639.6
678.9
– 6.2
– 33.1
3.0
– 5.6
153.2
–
–
–
– 2,645.0
– 2,286.7
2023
2022
– 526.2
– 8.6
– 18.9
– 1.0
– 37.0
– 37.8
1.2
– 0.5
31.1
–
29.9
–
–
–
– 782.6
– 14.0
– 6.6
– 0.9
200.9
227.1
0.2
– 26.4
32.4
–
45.3
0.0
–
–
– 530.8
– 525.6
160
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
161
Financial Report Asset ceiling
CHF million
Balance as at 1 January
Interest rate effect
Effect of the asset ceiling (excluding interest rate effect)
Exchange differences
Balance as at 31 December
6.2.3 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: Baloise 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.
6.2.4 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
2023
2022
– 498.6
– 7.2
293.0
–
–
– 0.9
– 497.7
–
– 212.8
– 498.6
31.12.2023
31.12.2022
66.4
670.6
1,642.6
1,601.3
41.2
73.3
73.3
–
52.7
645.4
1,595.3
1,562.2
33.1
76.9
76.9
–
364.1
376.1
4.2
–
4.2
32.4
4.5
–
4.5
29.6
2,853.7
2,780.3
18.5
–
28.5
–
2023
2022
1.8
1.4
0.2
61.5
24.5
22.5
2.7
1.4
0.3
61.5
24.4
22.3
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.
162
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
163
Financial Report 6.2.5 Sensitivity analysis for liabilities under defined benefit plans
CHF million
Total defined benefit obligation as shown
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
Share of annuity option plus 10.0 % age points
31.12.2023
31.12.2022
– 3,175.9
– 2,812.3
197.2
– 221.4
– 22.7
21.5
– 137.7
17.9
54.2
– 60.6
– 2.7
153.8
– 171.0
– 16.2
14.4
– 114.0
22.9
44.6
– 51.1
3.1
The Baloise Group determines the sensitivities of liabilities under defined benefit plans by recalculating them using the
same models as used for the calculation of the effective value. In this calculation, only one parameter of the base scenario
is changed. Possible interaction between individual parameters is not taken into consideration. The effect resulting from
various parameters occurring simultaneously may vary from the sum total of individually determined differences.
The sensitivity is only calculated for the liability. A possible simultaneous impact on plan assets is not investigated.
6.2.6 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.
6.2.7 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 78.7 million for the 2024 financial year.
6.2.8 Maturity profile
The maturity profile of liabilities under pension plans differs depending on whether benefits are prospective or current enti-
tlements. For prospective benefit entitlements, the average expected remaining service period is 9.8 years; current benefit
entitlements under pension commitments are designed for an average of 13.4 years.
Other long-term employee benefits
6.3
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 2023 totalled
CHF 25.4 million (previous year: CHF 23.8 million). There were no disposals of plan assets for long-term employee benefits.
Benefits paid out amounted to CHF 2.5 million (previous year: CHF 2.7 million).
162
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163
Financial Report Share-based payment plan
6.4
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, the Share Participation Plan (discontinued with effect from 1 January 2024) and the
Performance share units (PSU) Plan. The PSU Plan 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 notes 4, 5 and
6 of the Compensation Report.
In 2023, a sum of CHF 29.0 million (previous year: CHF 27.4 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.
6.4.1 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)
6.4.2 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
2023
2022
238,410
223,477
31.08.2026
31.08.2025
67.90
16.2
33.1
3,471
2,646
90.1
74.40
16.6
31.6
3,419
2,506
89.2
2023
2022
22,694
23,229
28.02.2026
28.02.2025
134.28
142.92
3.0
3.6
1,113
132
12 %
3.3
3.6
1,073
125
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
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
2023
7,207
2022
6,282
31.05.2026
31.05.2025
125.91
146.70
0.9
1.0
10
0.9
1.0
12
164
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165
Financial Report 6.4.3 Share Participation Plan
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
1 Including shares financed by loans.
2 Net of the discounted dividend right over three years.
2023
2022
108,923
102,281
28.02.2026
28.02.2025
127.14
137.34
13.8
17.0
1,086
181
9 %
14.0
15.8
1,051
173
8 %
6.4.4 Performance Share Units (PSU) Plan
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:
PSUs granted
PSUs converted
Change in
value 3
Date Price (CHF) 1
Date
Multiplier Price (CHF) 1 Value (CHF) 2
01.03.2019
01.03.2020
01.03.2021
01.03.2022
01.03.2023
163.00
154.90
158.90
154.10
156.50
01.03.2022
01.03.2023
01.03.2024
01.03.2025
01.03.2026
0.67
0.61
0.00 4
0.00 4
0.00 4
154.10
156.50
131.8 4
131.8 4
131.8 4
103.25
95.47
0.00 4
0.00 4
0.00 4
– 37 %
– 38 %
–100 % 4
–100 % 4
–100 % 4
2019
2020
2021
2022
2023
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 2020: ([{0.61*156.50}–154.90] / 154.90) * 100 = –38 %.
4 Interim measurement as at 31 December 2023.
Measurement of the PSUs at their issue date is based on a Monte Carlo simulation, which calculates a present value for the
payout expected at the end of the vesting period. This measurement incorporates the following parameters:
● risk-free interest rate
● the volatilities of all shares in the peer group (measured over a one-year track record) and their correlations with each
other (measured over a three-year track record).
164
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165
Financial Report Employees entitled to participate at launch of programme
Number of allocated PSU
of which: expired (departures in 2021)
Number of active PSUs as at 31 December 2021
of which: expired (departures in 2022)
Number of active PSUs as at 31 December 2022
of which: expired (departures in 2023)
Number of active PSUs as at 31 December 2023
Value of allocated PSUs on issue date (CHF million)
PSU expense incurred by the Baloise Group for 2021 (CHF million)
PSU expense incurred by the Baloise Group for 2022 (CHF million)
PSU expense incurred by the Baloise Group for 2023 (CHF million)
Plan 2023
Plan 2022
Plan 2021
68
78
29,812
33,914
–
–
–
–
– 309
29,503
4.7
–
–
1.2
–
–
–
33,914
– 1,402
32,512
5.4
–
1.4
1.8
68
28,045
– 504
27,541
– 315
27,226
– 995
26,231
4.9
1.1
1.5
1.6
6.4.5 Employee Stock Option Programme
FRIDAY Insurance S. A., a subsidiary of Baloise 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.
Participating employees
Number of allocated options
of which: expired (departures in 2021)
of which: expired (departures in 2022)
of which: expired (departures in 2023)
Number of active options as at 31 December 2023
ESOP expense (CHF million)
2023
79
2022
65
3,989,458
3,571,653
416,260
518,213
591,345
416,260
518,213
–
2,463,640
2,637,180
0.9
1.1
The shares under the dissolved PSOP were calculated and valued pro rata as at 31 December 2020. The resulting amount
was paid out in three tranches up to the end of March 2023, with CHF 0.3 million paid out in 2023 (2022: CHF 2.1 million).
Participating employees
Total liabilities arising from the allocated PSOPs (CHF million)
Total liabilities arising from the vested PSOPs (CHF million)
PSOP expense (CHF million)
2023
2022
–
–
–
–
8
0.3
0.3
– 0.1
166
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167
Financial Report 7. Taxes
7.1
Current income taxes and deferred taxes
CHF million
Current income taxes
Deferred taxes
Total income taxes
2023
2022
– 69.5
– 12.4
– 81.9
– 67.1
– 32.4
– 99.5
Expected and current income taxes
The expected average tax rate for the Baloise Group was 24.8 per cent in 2022 and 27.7 per cent in 2023. These rates corre-
spond to the weighted average tax rates in those countries where the Baloise Group operates.
CHF million
Profit before taxes
Expected average tax rate (per cent)
Expected income taxes
Increase / reduction owing to
Tax-exempt profits and losses
Non-deductible expenses
Withholding taxes on dividends
Change in tax rates
Change in unrecognised tax losses
Recognition of tax credits
Tax items related to other reporting periods
Non-taxable measurement differences
Intercompany effects
Other impacts
Current income taxes
2023
2022
318.2
27.67 %
– 88.0
343.9
24.78 %
– 85.2
12.4
– 6.4
– 1.6
0.0
2.3
–
9.1
– 3.0
6.1
– 12.8
– 81.9
0.5
– 30.0
– 0.6
– 5.0
– 4.2
–
4.0
– 3.4
27.3
– 2.9
– 99.5
Baloise falls within the scope of the OECD rules on global minimum tax.
In the countries in which Baloise generates significant income (Switzerland, Germany, Belgium and Luxembourg), which
are covered by the OECD rules on global minimum tax, the legislative position as at 31 December 2023 is that the national
top-up tax applies with effect from 1 January 2024. Rules for international top-up taxes (Income Inclusion Rule from 1 January
2024 and Undertaxed Profits Rule from 1 January 2025) have also been signed off in all of these countries except Switzerland,
where a decision will be made at a later date.
Under the global minimum tax rules, Baloise would be required to pay top-up tax in the event that, according to the
OECD pillar two rules, the effective tax rate in a jurisdiction was below 15 per cent. The OECD has defined 15 per cent as the
minimum tax rate.
Baloise has set up a Group-wide project in which it is analysing the detailed requirements regarding global minimum
tax so that it can calculate the tax rates in accordance with the OECD pillar two rules and identify whether it will need to
pay top-up tax and, if so, how much. At present, it is too early to provide reliable estimates of the quantitative impact of
global minimum tax on Baloise.
Baloise is applying the temporary exception granted by IAS 12 that exempts it from recognising and disclosing deferred
tax assets and liabilities in connection with the pillar two international tax reform (global minimum tax).
166
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167
Financial Report 7.2
Deferred taxes in other comprehensive income
2023
2022
Items not to
be reclassi-
fied to the
income
statement
Items to be
reclassi-
fied to the
income
statement
Items not to
be reclassi-
fied to the
income
statement
Items to be
reclassi-
fied to the
income
statement
Total
CHF million
Deferred taxes in other comprehensive income
From financial instruments and loans FVOCI
From hedging
From insurance finance income or expenses
From defined benefit pension plans
From other
Total deferred taxes in other comprehensive income
– 1.8
–
–
16.3
–
14.4
– 73.8
– 13.8
16.5
–
0.4
– 75.6
– 13.8
16.5
16.3
0.4
– 70.7
– 56.2
14.2
–
–
– 62.9
–
– 48.7
230.1
1.9
– 1.8
–
– 0.4
229.8
Total
244.3
1.9
– 1.8
– 62.9
– 0.4
181.1
Deferred tax assets and liabilities
7.3
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.
The Baloise Group had recognised deferred tax assets on tax loss carryforwards totalling CHF 372.4 million as at
31 December 2023 (previous year: CHF 283.3 million) that will expire after five years or more.
The Baloise Group had a tax credit of CHF 109.4 million as at 31 December 2023 (previous year: CHF 110.4 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 436.2 million as at 31 December
2023 (previous year: CHF 396.0 million) because the relevant offsetting criteria had not been met. Of this total, CHF 0.8
million will expire after one year (previous year: CHF: 1.4 million), CHF 12.6 million after two to four years (previous year: CHF
20.1 million) and CHF 422.8 million after five years or more (previous year: CHF 374.5 million).
CHF million
Deferred tax assets
Deferred tax liabilities
Total (net)
of which: recognised as deferred tax assets
of which: recognised as deferred tax liabilities
31.12.2023
31.12.2022
1,428.4
1,726.6
– 1,640.7
– 1,867.9
– 212.3
207.1
– 419.4
– 141.4
239.3
– 380.6
168
Baloise Group Annual Report 2023
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169
Financial Report 7.3.1 Deferred tax assets
2023
CHF million
Deferred tax assets
Investments
Other comprehensive income
Tax credits and losses carried forward
Insurance contract assets and liabilities
Reinsurance contract assets and liabilities
Liabilities arising from financial contracts
Liabilities arising from employee benefits
Other
Total deferred tax assets
2022
CHF million
Deferred tax assets
Investments
Other comprehensive income
Tax credits and losses carried forward
Balance
as at
1 January
Change
recognised
in profit or
loss
Change
recognised
directly in
equity
Change in
the scope
of conso-
lidation
Reclassi-
fication
in accor-
dance
with IFRS 5
Exchange
differences
Balance
as at 31
December
– 322.0
–
0.0
1.0
998.6
345.8
76.9
107.0
13.6
32.7
48.0
103.9
1,726.6
–
– 54.8
26.7
124.1
0.5
11.2
– 3.0
– 23.8
– 186.3
–
–
–
–
–
–
– 54.8
–
–
–
–
–
–
0.3
0.3
– 31.9
– 15.2
– 3.4
0.0
– 0.5
– 2.1
– 2.5
– 2.7
645.7
275.8
100.2
231.0
13.6
41.8
42.6
77.7
–
–
–
–
–
–
–
1.0
– 58.3
1,428.4
Balance
as at
1 January
Change
recognised
in profit or
loss
Change
recognised
directly in
equity
Change in
the scope
of conso-
lidation
Reclassi-
fication
in accor-
dance
with IFRS 5
Exchange
differences
Balance
as at 31
December
Insurance contract assets and liabilities
1,102.7
– 978.9
Reinsurance contract assets and liabilities
Liabilities arising from financial contracts
Liabilities arising from employee benefits
Other
19.5
32.6
50.8
97.6
– 5.4
1.7
– 0.6
9.0
Total deferred tax assets
1,744.2
– 159.2
193.9
196.5
161.1
83.2
818.8
–
– 3.7
–
193.9
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
0.1
– 0.4
–
–
–
–
–
–
–
– 16.3
– 9.2
– 2.6
– 16.8
– 0.5
– 1.6
– 2.2
– 2.8
– 0.4
– 52.1
998.6
345.8
76.9
107.0
13.6
32.7
48.0
103.9
1,726.6
168
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Baloise Group Annual Report 2023
169
Financial Report Total deferred tax liabilities
1,867.9
– 170.6
7.3.2 Deferred tax liabilities
2023
CHF million
Deferred tax liabilities
Property, plant and equipment
Property, plant and equipment – buildings
(FV – IFRS 17 VFA)
Intangible assets
Long-term equity investments
Investment property
Financial assets
Other comprehensive income
Insurance contract assets and liabilities
Reinsurance contract assets and liabilities
Other
2022
CHF million
Deferred tax liabilities
Property, plant and equipment
Property, plant and equipment – buildings
(FV – IFRS 17 VFA)
Intangible assets
Long-term equity investments
Investment property
Financial assets
Other comprehensive income
Insurance contract assets and liabilities
Reinsurance contract assets and liabilities
Other
Balance
as at
1 January
Change
recognised
in profit or
loss
Change
recognised
directly in
equity
Change in
the scope
of conso-
lidation
Reclassi-
fication
in accor-
dance
with IFRS 5
Exchange
differences
Balance
as at 31
December
15.6
38.0
22.5
87.1
479.6
272.9
120.9
698.3
34.4
98.5
11.0
7.3
– 13.6
78.8
– 55.0
– 72.5
–
– 95.2
– 22.8
– 8.6
–
–
–
–
–
–
1.4
–
–
–
1.4
–
–
–
–
4.9
–
0.0
–
–
– 0.3
4.6
–
–
–
–
– 0.1
–
–
–
–
–
– 0.9
25.7
– 1.3
– 0.6
– 4.7
– 7.8
– 12.4
– 4.7
– 28.6
– 0.8
– 0.6
44.0
8.2
161.2
421.5
188.1
117.6
574.5
10.8
89.1
– 0.1
– 62.4
1,640.7
Balance
as at
1 January
Change
recognised
in profit or
loss
Change
recognised
directly in
equity
Change in
the scope
of conso-
lidation
Reclassi-
fication
in accor-
dance
with IFRS 5
Exchange
differences
Balance
as at 31
December
14.1
30.3
23.9
66.1
460.4
946.4
111.8
280.7
23.0
78.2
1.9
8.5
– 0.4
22.1
29.8
– 653.7
–
431.5
12.1
21.0
–
–
–
–
–
–
12.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 2.2
–
–
–
–
–
– 0.4
– 0.8
– 1.1
– 1.1
– 8.3
– 19.8
– 3.6
– 13.9
– 0.7
– 0.6
15.6
38.0
22.5
87.1
479.6
272.9
120.9
698.3
34.4
98.5
– 2.2
– 50.3
1,867.9
Total deferred tax liabilities
2,034.8
– 127.1
12.8
170
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
MF
Financial Report 8. Other income statement line items
8.1
Income from services rendered
CHF million
Asset management
Services
Banking services
Investment management
Income from services rendered
8.2
Other operating income
CHF million
Gains on disposal of intangible assets and property, plant and equipment
Currency gains on assets and liabilities
External income from owner-occupied property
Income from development properties
Other income
Other operating income
8.3
Personnel expenses and depreciations / impairments
CHF million
Personnel expenses
Depreciation and impairment of property, plant and equipment
Amortisation and impairment of intangible assets
Total depreciation / amortisation and impairments
2023
2022
22.7
55.5
41.4
22.1
141.7
25.6
32.5
39.8
20.4
118.3
2023
2022
0.5
30.4
2.3
1.2
127.2
161.6
0.3
10.8
1.8
28.3
78.8
120.0
2023
2022
– 1,024.5
– 968.6
– 22.9
– 53.1
– 76.0
– 30.1
– 48.9
– 79.1
Baloise Group Annual Report 2023
171
Financial Report 9. Other balance sheet line items
9.1
Property, plant and equipment
2023
CHF million
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
Reclassification
Reclassification to non-current assets
classified as held for sale
Depreciation and impairment 1
Depreciation
Impairment losses recognised in profit
or loss
Reversal of impairment losses
recognised in profit or loss
Changes in fair value
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated depreciation and
impairment
Balance as at 31 December
Owner-
occupied
properties
FVPL
Land
Buildings
Operating
equipment
Right-of-use
assets
Other
Total
11.7
–
–
0.0
–
0.0
–
–
–
–
–
–
– 0.3
11.4
12.2
– 0.8
11.4
54.4
0.5
466.0
2.9
–
–
–
–
–
0.7
– 3.2
–
3.9
–
– 1.7
53.9
174.1
– 120.3
53.9
–
–
–
30.7
–
–
–
–
–
– 16.0
– 9.4
474.2
–
–
474.2
7.1
0.8
–
–
29.9
14.9
0.2
– 0.4
25.5
46.6
–
– 0.4
– 0.1
0.0
– 0.5
–
–
– 1.6
– 1.6
–
–
–
– 0.2
6.0
30.2
– 24.1
6.0
–
–
–
–
– 10.0
– 10.0
– 12.0
– 12.0
–
–
–
– 0.9
33.6
142.9
– 109.3
33.6
–
–
–
– 2.2
57.0
122.6
– 65.6
57.0
594.6
65.7
0.2
– 0.8
– 0.6
30.7
–
– 22.9
– 26.8
–
3.9
– 16.0
– 14.8
636.1
–
–
636.1
1 Depreciation and impairment form part of other operating expenses.
During the reporting period, an owner-occupied property measured at FVPL with a fair value of CHF 5.1 million was reclassi-
fied as an investment property. Also during the reporting period, an investment property with a fair value of CHF 35.8 million
was reclassified as an owner-occupied property measured at FVPL. Both of these reclassifications were carried out due to
the change of use of the properties.
The change in value, recognised in profit or loss, of the owner-occupied properties measured at FVPL and held as at the
balance sheet date amounted to CHF – 16.0 million in 2023 (previous year: CHF 29.3 million).
The fair value of the owner-occupied properties measured at FVPL is determined using the DCF method. Measurement is
carried out annually by internal experts and at regular intervals by external property valuers. As is the case for investment
properties, owner-occupied properties measured at FVPL are assigned to level 3. Details of assignment to the different
levels of the hierarchy can be found in note 4.5.
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Baloise Group Annual Report 2023
173
Financial Report 2022
CHF million
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
Reclassification
Reclassification to non-current assets
classified as held for sale
Depreciation and impairment 1
Depreciation
Impairment losses recognised in profit
or loss
Reversal of impairment losses
recognised in profit or loss
Changes in fair value
Exchange differences
Balance as at 31 December
Acquisition costs
Accumulated depreciation and
impairment
Balance as at 31 December
Owner-
occupied
properties
FVPL
Land
Buildings
Operating
equipment
Right-of-use
assets
Other
12.5
–
–
– 0.5
–
–
–
–
–
–
–
–
– 0.3
11.7
12.6
– 0.9
11.7
61.0
0.3
–
– 2.3
–
–
–
– 3.2
– 3.2
–
–
–
– 1.4
54.4
176.8
– 122.4
54.4
418.8
0.5
–
–
–
24.1
–
–
–
–
–
29.3
– 6.8
466.0
–
–
7.5
2.3
–
– 0.6
–
–
–
34.0
10.2
–
– 0.3
–
–
–
26.3
12.3
–
– 0.8
–
–
–
– 1.9
– 1.9
– 13.3
– 13.3
– 11.7
– 11.7
–
–
–
– 0.2
7.1
30.9
–
–
–
– 0.6
29.9
146.8
– 23.7
– 116.9
–
–
–
– 0.6
25.5
80.9
– 55.5
25.5
466.0
7.1
29.9
Total
560.0
25.6
–
– 4.6
–
24.1
–
– 30.1
– 30.1
–
–
29.3
– 9.8
594.6
–
–
594.6
1 Depreciation and impairment form part of other operating expenses.
172
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Baloise Group Annual Report 2023
173
Financial Report 9.2
Intangible assets
2023
2022
Software and
other
intangible
assets
Goodwill
Software and
other
intangible
assets
Total
Goodwill
CHF million
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
Reclassification to non-current assets
classified as held for sale
Amortisation and impairment
Amortisation
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 amortisation and impairment
Balance as at 31 December 1
By strategic business unit
Switzerland
Germany
Belgium
Luxembourg
Group business
Balance as at 31 December
96.3
–
0.0
–
0.0
–
–
–
–
–
– 4.2
92.1
237.6
– 145.5
92.1
25.6
13.5
33.3
19.7
–
92.1
141.1
40.1
3.1
– 2.3
– 0.7
–
– 53.1
– 53.1
–
–
– 5.4
122.7
701.8
– 579.1
122.7
37.6
0.9
38.4
3.6
42.3
237.4
40.1
3.1
– 2.3
– 0.8
–
– 53.1
– 53.1
–
–
– 9.6
214.8
939.4
– 724.6
214.8
63.2
14.3
71.7
23.3
42.3
122.7
214.8
99.9
–
–
–
–
–
–
–
–
–
– 3.6
96.3
241.8
– 145.5
96.3
25.6
14.3
35.4
20.9
–
96.3
1 With the possible exception of goodwill, the Baloise Group has no intangible assets with indefinite useful lives.
Total
265.8
31.3
–
– 0.8
–
–
– 48.9
– 48.9
–
–
– 10.0
237.4
942.0
– 704.6
237.4
60.2
15.3
93.0
25.9
43.0
165.9
31.3
–
– 0.8
–
–
– 48.9
– 48.9
–
–
– 6.4
141.1
700.2
– 559.1
141.1
34.6
1.0
57.6
4.9
43.0
141.1
237.4
174
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
175
Financial Report 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 12.7.3.
Baloise Insurance Ltd
Baloise Financial Services GmbH
Baloise Vie Luxembourg S. A.
Baloise Assurances Luxembourg S. A.
Baloise Belgium NV
Goodwill as at 31.12.
CHF million
Discount rate
per cent
Growth rate
per cent
2023
2022
2023
2022
2023
2022
25.6
11.8
7.2
12.0
32.3
25.6
12.5
7.7
12.8
34.3
8.1
8.1
8.5
8.5
8.6
7.1
7.1
7.7
7.7
7.6
1.0
1.0
2.5
2.5
2.6
1.0
1.0
2.5
2.5
2.5
The impairment test in 2023 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 2023 or in 2022, to the carrying amount of an entity being significantly higher than
its recoverable value.
9.3
Other assets
CHF million
Accrued income
Development properties
Tax credits indirect taxes (withholding tax etc.)
Other assets
Impairments
Total other assets
31.12.2023
31.12.2022
32.4
3.0
34.6
33.0
– 2.7
100.3
31.6
3.0
51.7
39.2
– 2.5
123.1
174
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
175
Financial Report 9.4
Share capital
2023
Balance as at 1 January
Purchase / sale of treasury shares
Capital increases
Share buy-back and cancellation
Balance as at 31 December
2022
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)
545,636
45,254,364 45,800,000
4.6
– 159,296
159,296
–
–
–
–
–
–
–
–
–
–
386,340
45,413,660 45,800,000
4.6
Number of
treasury
shares
Number of
shares in
circulation
Number of
shares
issued
Share capital
(CHF million)
648,730
45,151,270 45,800,000
– 103,094
103,094
–
–
–
–
–
–
–
545,636
45,254,364 45,800,000
4.6
–
–
–
4.6
The share capital of Baloise Holding Ltd totals CHF 4.6 million and is divided into 45,800,000 registered, fully paid-up regis-
tered shares with a par value of CHF 0.10 each (previous year: 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 28 April 2023 voted in favour of a total dividend distribution of CHF 338.9 million
for the 2022 financial year. This amounts to a gross dividend of CHF 7.40 per share. Excluding the treasury shares held by
Baloise Holding Ltd at the time that the dividend was paid, the total distribution effectively amounted to CHF 335.3 million.
For the 2023 financial year, a total dividend distribution of CHF 352.7 million will be proposed for approval at the Annual
General Meeting on 26 April 2024. This amounts to a gross dividend of CHF 7.70 per share. The dividend distribution will be
recognised upon approval at the Annual General Meeting.
176
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
177
Financial Report 9.5
Other reserves
2023
CHF million
from
financial
instruments
and loans
from
hedging
from
insurance
business
from
defined
benefit
pension
plans
from
foreign
currency
translation
from
other
Total
Balance as at 1 January
– 585.7
110.6
– 67.0
– 108.5
– 1,189.0
34.3
– 1,805.3
Other comprehensive income from items
not to be reclassified to the income statement
Gains and losses arising during the reporting period
Deferred taxes
Exchange differences
Total other comprehensive income from items
not to be reclassified to the income statement
6.4
– 1.8
– 3.4
1.2
–
–
–
–
–
–
–
–
– 77.1
16.3
5.7
– 55.1
–
–
–
–
–
–
0.1
0.1
– 70.6
14.4
2.5
– 53.7
Other comprehensive income from items to be
reclassified to the income statement
Gains and losses arising during the reporting period
333.2
118.1
– 85.2
Gains and losses reclassified to the income
statement
ECL on financial instruments (FVOCI)
Deferred taxes
Exchange differences
Total other comprehensive income from items
to be reclassified to the income statement
– 1.5
3.1
– 73.8
27.6
– 27.1
–
– 13.8
–
–
–
16.5
4.6
288.7
77.2
– 64.1
–
–
–
–
–
–
– 330.6
– 1.3
34.2
2.5
–
–
–
–
–
0.4
– 1.3
– 26.1
3.1
– 70.7
30.9
– 328.1
– 2.2
– 28.6
Total other comprehensive income
289.9
77.2
– 64.1
– 55.1
– 328.1
– 2.1
– 82.3
Other reserves reclassified directly to
retained earnings
Balance as at 31 December
of which: shareholders
of which: non-controlling interests
– 7.1
–
–
–
–
–
– 7.1
– 303.0
187.8
– 131.1
– 163.5
– 1,517.1
32.2
– 1,894.8
– 1,892.6
– 2.2
176
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
177
Financial Report 2022
CHF million
from
financial
instruments
and loans
from
hedging
from
insurance
business
from
defined
benefit
pension
plans
from
foreign
currency
translation
from
other
Total
Balance as at 1 January (restated)
262.8
121.1
– 145.2
– 276.1
– 1,065.8
34.8
– 1,068.3
Other comprehensive income from items
not to be reclassified to the income statement
Gains and losses arising during the reporting period
Deferred taxes
Exchange differences
Total other comprehensive income from items
not to be reclassified to the income statement
Other comprehensive income from items to be
reclassified to the income statement
– 55.3
14.2
– 3.3
– 44.4
–
–
–
–
–
–
–
–
222.0
– 62.9
8.6
167.6
–
–
–
–
–
–
0.0
0.0
166.7
– 48.7
5.3
123.3
Gains and losses arising during the reporting period
– 1,018.9
– 11.9
79.0
Gains and losses reclassified to the income
statement
ECL on financial instruments (FVOCI)
Deferred taxes
Exchange differences
– 2.6
11.3
230.1
2.9
– 0.4
–
1.9
–
Total other comprehensive income from items
to be reclassified to the income statement
– 777.2
– 10.5
0.0
–
– 1.8
1.0
78.2
–
–
–
–
–
–
– 123.2
1.4
– 1,073.6
–
–
–
–
–
–
– 0.4
– 1.1
– 3.0
11.3
229.8
2.7
– 123.2
– 0.1
– 832.8
Total other comprehensive income
– 821.6
– 10.5
78.2
167.6
– 123.2
– 0.1
– 709.5
Other reserves reclassified directly to
retained earnings
Balance as at 31 December
of which: shareholders
of which: non-controlling interests
– 27.0
– 585.7
–
–
–
–
110.6
– 67.0
– 108.5
– 1,189.0
– 0.5
34.3
– 27.5
– 1,805.3
– 1,803.3
– 2.1
178
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
179
Financial Report 9.6
Non-technical provisions
CHF million
Balance as at 1 January
Additions arising from change
in scope of consolidation
Disposals arising from change
in scope of consolidation
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
2023
2022
Restructuring
Other
Total Restructuring
Other
Total
8.1
104.4
112.5
8.7
127.7
136.4
–
–
–
–
–
– 3.1
–
– 0.3
4.6
–
–
–
15.8
– 6.5
– 1.9
0.0
– 4.5
107.3
–
–
–
15.8
– 6.5
– 5.1
0.0
– 4.8
111.9
–
–
–
2.6
– 0.2
– 2.5
–
– 0.4
8.1
–
–
–
1.5
– 14.9
– 6.2
–
– 3.6
104.4
–
–
–
4.0
– 15.1
– 8.8
–
– 4.0
112.5
The balance shown for other non-technical provisions includes typical amounts for legal advice and litigation risks. The
restructuring provisions largely relate to the German entities. The recognition of other non-technical provisions in profit or
loss and their usage recognised or not recognised in profit or loss primarily relate to the Swiss and Luxembourg entities.
178
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Baloise Group Annual Report 2023
179
Financial Report 10. Other disclosures
10.1
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)
2023
239.6
2022
247.8
45,298,246
45,176,614
5.29
5.49
2023
239.6
2022
247.8
45,298,246
45,176,614
–
20,193
45,298,246
45,196,807
5.29
5.48
In 2023, earnings per share was not affected by any dilutive effects. The dilution of earnings for 2022 was attributable to
the Performance Share Units (PSUs) share-based payment plan.
180
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
181
Financial Report Long-term equity investments and structure of the Baloise Group
10.2
10.2.1 Acquisition and disposal of companies
CHF million
Investments
Other assets
Cash and cash equivalents
(Re)insurance assets and liabilities
Other accounts payable
Non-controlling interests
Net assets acquired / disposed of
Funds used / received for acquisitions and disposals
Cash and cash equivalents
Offsetting
Transfer of assets
Directly attributable costs
Equity instruments issued
Reclassification of investments in associates and joint ventures
Acquisition / disposal price
Net assets acquired / disposed of
Other comprehensive income 1
Current year earnings of disposed companies
Goodwill / negative goodwill or proceeds from disposals
Cash and cash equivalents used / received for acquisitions and disposals
Cash and cash equivalents acquired / disposed of
Outflow / inflow of cash and cash equivalents
1 This includes primarily historical cumulative exchange differences.
Cumulative
acquisitions
Cumulative
disposals
2023
2022
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.6
17.5
8.9
–
– 20.6
– 2.1
6.2
24.9
–
–
–
–
–
24.9
– 6.2
0.1
– 1.3
17.5
24.9
– 8.9
16.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
On 5 December 2023, Baloise sold its 74.75 per cent stake in the subsidiary Haakon AG and Haakon AG’s wholly owned sub-
sidiary, Haakon Asia Ltd. Haakon AG and its subsidiary operate as reinsurance brokers. The gain on the sale was an amount
in the low double-digit millions and was posted as other operating income in the Group business segment.
No companies had been acquired or sold in 2022.
This table does not include step acquisitions or purchases of real-estate companies that, according to the provisions
of IFRS 3 Business Combinations, do not constitute a business, which means that these purchases are classified as the
acquisition of assets. That is why the outflows and inflows of cash and cash equivalents vary from the presentation in the
cash flow statement.
180
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
181
Financial Report 10.2.2 Changes to shareholdings
There were no transactions resulting in a change of control over a subsidiary in 2023, as had also been the case in 2022.
10.2.3 Investments in associates and joint ventures
The Baloise Group holds investments in a number of non-significant associates and joint ventures.
CHF million
Carrying amount
CHF million
Baloise’s share of
Profit or loss for the period from continuing operations
Profit or loss for the period from discontinued operations
Profit or loss for the period from disposal groups pursuant to IFRS 5
Other comprehensive income
Share of comprehensive income
2023
2022
318.1
344.7
2023
2022
– 20.7
–
–
– 1.3
– 22.0
4.9
–
–
1.4
6.3
In the second half of 2023, the Baloise Group acquired 50 percent stakes in two real estate investment companies head-
quartered in Belgium. These stakes are classified and reported as joint ventures.
In February 2022, the Baloise Group acquired 30.2 per cent of the German company MOBIKO, thus expanding its Mobility
ecosystem with the acquisition of a service provider that adds value for businesses and their employees. As a result of
further shares being acquired, the long-term equity investment increased to 39.4 per cent in August 2022. As a result of
further shares being acquired in June 2023, the stake increased again to reach 49.4 per cent.
The Baloise Group also acquired around 35.1 per cent of Luxembourg-based investment fund ECE Haid Center Linz SCSp
in the first half of the year.
In November 2022, the Baloise Group increased its stake in Houzy AG, which operates a homeowner platform, from 13.9
per cent to 37.9 per cent and will now account for Houzy AG as an associate. The increased shareholding relates to the
expansion of the strategic partnership with UBS in the Home ecosystem.
As at 31 December 2023 or 31 December 2022, the Baloise Group held more than 20 per cent of the capital of further compa-
nies 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 2023 or 31 December 2022.
10.2.4 Other changes in the scope of consolidation
On 13 September 2023, the real-estate company Souverain 25 NV, located in Woluwe-Saint-Pierre, Belgium, was acquired.
Its sole property is the Royale Belge office building. The purchase is classified as the acquisition of assets.
The long-term equity investment in FRIDAY Insurance S. A. increased by 0.8 per cent to a total of 89.4 per cent in 2023 as
a result of an additional capital transaction.
182
Baloise Group Annual Report 2023
Financial Report
10.2.5 Non-current assets and disposal groups classified as held for sale
31.12.2023
31.12.2022
Disposal
groups
Non-current
assets
Total
Disposal
groups
Non-current
assets
CHF million
Property, plant and equipment
Intangible assets
Investment property
Financial instruments with characteristics
of equity and debt
Mortgages and loans
Derivative financial instruments
Insurance and reinsurance contract assets
Financial receivables
Other assets
Cash and cash equivalents
Total assets
Insurance and reinsurance contract liabilities
Liabilities arising from financial contracts
Other liabilities
Total equity and liabilities
–
–
–
–
–
–
10.3
80.8
–
–
91.1
154.7
–
– 0.2
154.5
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
0.2
–
–
–
–
–
–
10.3
80.8
–
–
–
–
–
–
–
–
9.8
95.8
–
–
Total
–
–
–
–
136.8
136.8
–
–
–
–
–
–
–
–
–
–
9.8
95.8
–
–
91.1
105.6
136.8
242.4
154.7
150.8
–
–
–
–
154.7
150.8
–
–
2.2
2.2
150.8
–
2.2
152.9
Unrealised losses directly associated with non-current
assets and disposal groups classified as held for sale
0.8
–
0.8
– 7.9
–
– 7.9
Baloise intends to dispose of the German run-off portfolio for hospital liability insurance and regards the IFRS 5 criteria as
still being met at the end of 2023. In accordance with IFRS 5, the corresponding assets and liabilities were reclassified for
the first time as at 30 June 2022. The reclassification relates to the Group business segment.
In 2023, six investment properties held for sale, which had a total fair value of CHF 56.4 million were reclassified as invest-
ment properties again as the parties to the sale were unable to reach an agreement. The remaining seven investment
properties held for sale in 2022 were sold, and no investment properties were held for sale as at 31 December 2023.
Baloise Group Annual Report 2023
183
Financial Report 10.2.6 Significant subsidiaries
Entities are defined as significant if they either individually or together contribute a significant proportion of the insurance
contracts, net income or total assets of the Baloise Group. Other long-term equity investments may be included for quali-
tative reasons, e. g. they are listed on a stock exchange.
Group’s share
of voting
rights /
capital
(per cent) 2
Direct share of
voting rights /
capital
(per cent) 2
Method
of
consoli-
dation 3 Currency
Share
capital
(million)
Total
assets
(million)
Primary
activity
Operating
segment 1
O
NL
L
B
B
B
B
L
NL
NL
O
Holding
Holding
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
89.41
100.00
100.00
100.00
F
F
F
F
F
F
F
F
F
F
F
CHF
CHF
CHF
CHF
CHF
CHF
EUR
4.6
3,424.0
75.0
4,981.6
50.0
30,431.4
50.0
8,713.2
1.0
1.5
0.1
55.7
8.8
7.7
EUR
22.0
8,950.0
EUR
15.1
1,806.7
EUR
EUR
–
3.6
63.4
172.9
31.12.2023
Switzerland
Baloise Holding Ltd, Basel
Baloise Insurance Ltd, Basel
Baloise Life Ltd, Basel
Baloise Bank SoBa AG, Solothurn
Baloise Asset Management Schweiz AG,
Basel
Holding
Non-Life
Life
Banking
Investment
manage-
ment
Baloise Asset Management International
AG, Basel
Investment
consulting
Other
Germany
Baloise Lebensversicherung AG, Hamburg
Life
Baloise Sachversicherung AG, Bad
Homburg
Deutsche Niederlassung der FRIDAY
Insurance S. A., Berlin
Baloise Sach Holding AG, Hamburg
Non-Life
Non-Life
Holding
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.
184
Baloise Group Annual Report 2023
Financial Report 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
conso-
lidation 3 Currency
Share
capital
(million)
Total
assets
(million)
31.12.2023
Belgium
Baloise Belgium NV, Antwerp
Euromex NV, Antwerp
Life and
Non-Life
Non-Life
L/NL
NL
100.00
100.00
100.00
100.00
Luxembourg
Baloise Luxembourg Holding S. A.,
Bertrange (Luxembourg)
Baloise Assurances Luxembourg S. A.,
Bertrange (Luxembourg)
Baloise Vie Luxembourg S. A.,
Bertrange (Luxembourg)
Baloise Private Equity (Luxembourg) SCS,
Luxembourg
Baloise Alternative Invest S. A. SICAV-RAIF,
Luxembourg
Holding
Non-Life
Life
Investment
manage-
ment
Investment
manage-
ment
O
NL
L
100.00
100.00
100.00
100.00
100.00
100.00
L/NL
100.00
100.00
L/NL / O
100.00
100.00
Other territories
Baloise Life (Liechtenstein) AG, Balzers
Life
Succursale francaise de la société FRIDAY
Insurance S. A., Paris
Non-Life
L
NL
100.00
100.00
89.41
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.
F
F
F
F
F
F
F
F
F
EUR
EUR
355.3
11,995.8
2.7
262.4
CHF
250.0
1,921.9
EUR
15.8
358.2
EUR
32.7
10,928.0
USD
– 0.0
868.0
USD
–
1,283.0
CHF
7.5
2,169.8
EUR
–
8.7
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185
Financial Report 10.3 Contingent and future liabilities
10.3.1 Contingent liabilities
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 2023 and that could have a significant impact on the 2023 consolidated annual financial statements.
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 contractu-
ally 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
CHF million
Guarantees
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk or no rating (BB and lower or no rating)
Total
Collateral
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk or no rating (BB and lower or no rating)
Total
31.12.2023
31.12.2022
55.6
495.4
551.0
45.8
459.7
505.4
31.12.2023
31.12.2022
–
41.7
–
14.0
55.6
–
–
–
495.4
495.4
–
30.5
–
15.2
45.8
–
–
–
459.7
459.7
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187
Financial Report 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
31.12.2023
31.12.2022
–
1,941.2
3,290.1
–
–
–
237.6
3,264.5
3,048.9
–
–
–
5,231.3
6,551.0
31.12.2023
31.12.2022
1,017.0
2,233.9
–
464.1
3,594.4
–
3,251.0
4,058.4
–
–
–
–
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. Addi-
tional 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.
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187
Financial Report 10.3.2 Future liabilities
Capital commitments
CHF million
Commitments undertaken for future acquisition of
Investment property
Financial assets
Property, plant and equipment
Intangible assets
Total commitments undertaken
of which: in connection with joint ventures
of which: own share of joint ventures’ capital commitments
CHF million
Capital commitments
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk or no rating (BB and lower or no rating)
Total
31.12.2023
31.12.2022
88.3
2,901.8
–
–
186.7
1,845.1
–
–
2,990.0
2,031.8
–
–
–
–
31.12.2023
31.12.2022
4.7
3.2
–
2,982.2
2,990.0
–
14.5
–
2,017.3
2,031.8
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.
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189
Financial Report 10.4 Related party transactions
In the course of its ordinary operating activities, the Baloise Group conducts transactions with associates, key manage-
ment personnel and related parties.
The executive management team consists of the members of Baloise Holding Ltd’s Board of Directors and Corporate
Executive Committee.
Related party transactions
Paid premiums
Investment
income
Expenses
Mortgages and loans
Liabilities
2023
2022
2023
2022
2023
2022
31.12.2023 31.12.2022
31.12.2023 31.12.2022
CHF million
Associates and joint ventures
Key management personnel
–
0.1
–
0.1
– 1.0
0.0
2.7
0.0
– 16.3
– 10.4
– 18.2
– 11.1
44.0
4.6
–
6.1
– 2.4
–
– 2.5
–
Executive management team remuneration
CHF million
Short-term employee benefits
Post-employment benefits
Payments under share-based payment plans
Total
2023
2022
– 6.1
– 1.1
– 3.2
– 10.4
– 6.4
– 1.0
– 3.6
– 11.1
9,955 shares worth CHF 1.6 million were repurchased from members of the Corporate Executive Committee in 2023 (previous
year: CHF 2.8 million) under the Share Participation Plan (note 6.4.3).
Events after the balance sheet date
10.5
By the time that these consolidated annual financial statements had been completed on 22 March 2024, we had not
become aware of events that would have a material impact on the consolidated annual financial statements as a whole.
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189
Financial Report 11. Risk management
The Baloise Group offers its customers non-life and life insurance, asset management services and, in Switzerland, banking
products. In the course of its business, the Baloise Group is exposed to a number of different risks.
11.1 Organisation of risk management in the Baloise Group
A comprehensive Group-wide risk management system is in place in all insurance units and the banking business in
order to manage these risks. Its Group-wide Risk Management Standards focus on the following areas:
● Organisation and responsibilities
● 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.
Within the Baloise Group and within each business unit, a risk owner is responsible for each individual risk that has
been identified. 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. The overall risk controller is the Chief Executive
Officer of the Baloise Group.
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.
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191
Financial Report 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
● Category of risk
● Sub-category of risk
● Type of risk
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 identi-
fied, 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.
Various limits and rules covering business risk and investment risk are in place, such as underwriting and investment guide-
lines, which restrict identified individual risks to an acceptable level or eliminate them altogether.
Risk control within the Baloise Group focuses on business risk (actuarial and banking risks), investment risk, risks to the
Group’s financial structure and operational risks including compliance.
Separate 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 reports and takes account of business
strategy and risk strategy considerations in its decisions.
The information below is based on the risk terminology in IFRS 7 Financial Instruments: Disclosures and IFRS 17 Insurance
Contracts and can diverge from the terminology and structure in the risk map.
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191
Financial Report
Risk Map
Business Risks
Investment Risks
Financial Structure Risks
Business Environment Risks
Operational Risks
Actuarial Risks Life
● Parameter Risks
● Catastrophe Risks
Actuarial Risks Non-Life
● Premiums
● Claims
● Catastrophe Risks
● Reserving
Reinsurance
● Premiums / Pricing
● Reinsurance Default
● Active Reinsurance
Market Risks
● Interest Rates
● Equities
● Currencies
● Real Estate
● Market Liquidity
● Derivatives
● Alternative Investments
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
Change in Standards
Competition Risks
External Events
Investors
Leadership and
Information Risk
Organisational Structure
Corporate Culture
Business Strategy
● Business Portfolio
● Risk Steering
● Sustainability
Mergers and Acquisitions
External Communication
● Reputation Management
Planning
Project Portfolio
Internal Misinformation
IT Risks
● IT Governance
● IT Architecture
● IT Operations
● Cyber Security
HR Risks
● Skills / Capacities
● Availability of Knowledge
● Incentive System
Legal Risks
● Contracts
● Tax
Business Processes
● Process Risks
● Project Risks
● In- / Outsourcing
Risk Analysis and Risk Reporting
● Risk Analysis and Risk
Assessment
● Risk Reporting
● Liability and Litigations
● External Reporting
Compliance
Financial Statements, Forecast,
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193
Financial Report Risk Map
Actuarial Risks Life
● Parameter Risks
● Catastrophe Risks
Actuarial Risks Non-Life
● Premiums
● Claims
● Catastrophe Risks
● Reserving
Reinsurance
● Premiums / Pricing
● Reinsurance Default
● Active Reinsurance
Business Risks
Investment Risks
Financial Structure Risks
Business Environment Risks
Operational Risks
Market Risks
● Interest Rates
● Equities
● Currencies
● Real Estate
● Market Liquidity
● Derivatives
Credit Risks
● Alternative Investments
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
Change in Standards
Competition Risks
External Events
Investors
IT Risks
● IT Governance
● IT Architecture
● IT Operations
● Cyber Security
HR Risks
● Skills / Capacities
● Availability of Knowledge
● Incentive System
Legal Risks
● Contracts
● Liability and Litigations
● Tax
Compliance
Business Processes
● Process Risks
● Project Risks
● In- / Outsourcing
Risk Analysis and Risk Reporting
● Risk Analysis and Risk
Assessment
● Risk Reporting
Leadership and
Information Risk
Organisational Structure
Corporate Culture
Business Strategy
● Business Portfolio
● Risk Steering
● Sustainability
Mergers and Acquisitions
External Communication
● External Reporting
● Reputation Management
Financial Statements, Forecast,
Planning
Project Portfolio
Internal Misinformation
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193
Financial Report 11.2 Material risk from underwritten policies
Risk arising from insurance business is presented below for non-life insurance and life insurance in line with the following
breakdown of the Baloise Group’s portfolio. The life insurance business comprises savings business, risk business and
unit-linked and similar contracts. The Baloise Group also writes financial contracts in the banking business and financial
contracts with characteristics of unit-linked contracts without significant insurance risk.
The intention of the sensitivities described in notes 11.2.1, 11.2.2 and 11.3.1 is to show possible effects on the results given
that crucial effects in the reporting period would show a different realisation. The magnitude of the sensitivities chosen
is such that it corresponds to roughly a 90% quantile for the risk factor considered, where precedence has been given to
simple numbers in the magnitude over the quantile. For sensitivities with a potential material asymmetry, both upside and
downside shocks have been calculated, for the others the downside shock only, assuming a response of the same size but
opposite sign for a shock in the other direction. The effect shown in the sensitivities on the insurance contracts is either
a direct effect from stressed fulfilment cash flows or the indirect effect from a stressed fair value of the underlying items.
This fair value of the underlying items denotes the fair value of assets backing liabilities in either the VFA or GMM approach.
All sensitivities are shocks which take effect at the end of the period and therefore do not stress the effective cash flows
which occurred in the period.
11.2.1 Non-life insurance
Baloise primarily underwrites insurance risk for private individuals and small and medium-sized enterprises in selected
countries in mainland Europe. Industrial insurance policies in the property & liability, marine and technical insurance divi-
sions are mainly offered by Baloise Insurance Ltd in Basel, Baloise Sachversicherung AG in Bad Homburg (Germany) and
Baloise Belgium NV in Antwerp.
Actuarial risk in non-life business comprises claims risk and risk from the recognition of reserves. Claims risk describes
the risk that claims not yet incurred will turn out to be larger than anticipated or occur more frequently than anticipated
in future (e. g. due to natural disasters or due to changes in legislation). Risk from the recognition of reserves describes the
risk that reserves recognised for future claim payments for claims already incurred are insufficient (e. g. due to inflation for
divisions which take a long time to process claims).
Contacts in the non-life business are also exposed to market risk, credit risk and liquidity risk.
Management of risk
Baloise counters actuarial risk with an appropriate underwriting strategy (underwriting limits and risk assessment), exten-
sive analysis of claims and dangers and a reinsurance strategy that is tailored to the portfolio.
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
underwriting limits in the Group are for marine and liability insurance.
The entire insurance business is comprehensively analysed on a regular basis. The results of this analysis are taken into
account when recognising reserves, setting insurance rates, designing insurance products and formulating reinsurance
contracts. In non-life business, the exposure and the appropriate level of risk transfer are analysed and determined in
collaboration with reinsurers and brokers.
Building on this analysis, Group Reinsurance structures and places in the market the Baloise Group’s non-life treaty
reinsurance for all business units in the Corporate Division Finance. When structuring the programmes, Group Reinsurance
focuses on the risk-bearing capacity of the Baloise Group as a whole.
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 is therefore placed by the business units themselves.
For its exposure to natural disasters the Baloise Group purchased reinsurance cover of up to CHF 500 million in total.
In addition, Baloise Insurance Ltd Switzerland purchased reinsurance cover of up to CHF 800 million for earthquakes and
Baloise Belgium NV purchased reinsurance cover of up to CHF 700 million for storms and tempests.
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195
Financial Report Risk exposure and risk concentration
The table below provides information on the risk exposure and risk concentration for each division. Contracts comprising
several types of cover were separated by risk for this breakdown. Where separation did not make sense, the contract was
assigned to the division with the largest risk exposure.
as at 31.12.
CHF million
Motor – liability
Motor – hull
General liability – private
General liability – commercial
Accident (incl. Swiss accident business (UVG))
Other accident
Health
Property – private customers
Property – small and medium-sized enterprises
Marine
Other
Total
Insurance revenue Liability for incurred claims
2023
2022
2023
2022
629.2
616.9
109.5
269.8
238.8
207.8
181.4
782.1
600.6
250.5
126.3
640.0
612.5
109.8
259.0
213.7
209.9
179.6
756.4
574.1
259.8
121.6
1,299.9
1,325.1
103.7
124.2
688.0
101.6
124.2
711.1
1,292.6
1,269.9
284.5
143.5
305.2
559.0
258.7
120.0
270.5
138.5
298.2
503.5
221.0
122.8
4,013.0
3,936.5
5,179.3
5,086.4
Assumptions
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 assump-
tions 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. The
reserve for claims handling costs assumes that costs will follow previous patterns. 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.
In many cases, the assumptions used in the measurement of current pension obligations are based on the criteria
prescribed by the regulatory authorities (e. g. mortality tables). The adequacy of these annuity reserves is reviewed annually
and the reserves strengthened accordingly in the event of a shortfall.
The Baloise Group has not changed its method of determining the material assumptions for insurance risk compared
with the prior year.
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195
Financial Report Sensitivity analysis
For contracts in non-life business, the sensitivities reflect the effect of a 10 per cent increase in the reserve required for all
loss or damage already incurred and the effect of a 10 per cent increase in the loss or damage expected for coverage yet
to be provided. For coverage yet be to be provided, the negative effect of the sensitivity at the level of the individual group
of insurance contracts is netted, where permissible, with any positive margin as at the reporting date.
CHF million
LIC increase +10 % 1
before reinsurance
after reinsurance
Increase in the expected claims in the FCFs in LRC +10 % 2
before reinsurance
after reinsurance
Impact on
profit for the period
Impact on equity
(incl. profit for the period)
2023
2022
2023
2022
– 387.0
– 347.5
– 38.4
– 35.3
– 398.4
– 381.6
– 387.6
– 349.2
– 41.8
– 41.8
– 38.4
– 35.3
– 352.0
– 337.3
– 37.1
– 37.1
1 This sensitivity examines the effect of a relative change of the LIC (excluding payables and receivables) by 10 %.
2 This sensitivity examines the effect of a relative change of the expected future claims in the LRC of PAA contracts by 10 %, increasing existing loss components or leading to
new ones.
11.2.2 Life insurance
Savings and risk business
Savings and risk life insurance business generally comprises long-dated contracts that entail a significant exposure to at
least one of the following biometric risks:
● Longevity risk for pension and pure endowment insurance
● Mortality risk for whole-life insurance and endowment insurance
● Disability risk for (occupational) disability and incapacity insurance
Whole-life insurance and pure endowment insurance are often combined in endowment insurance which then, like pension
insurance, comprises savings and substantial guaranteed cash surrender values for policyholders. For the savings, a minimum
rate of interest is guaranteed that is contractually stipulated and generally applies for the entire term. In addition to the
direct market and credit risk, the guarantee element in these products therefore gives rise to a risk for the Baloise Group in
terms of policyholder behaviour and the timing and frequency of surrenders. The same applies for those pension insurance
policies where the policyholders have the option to receive a lump-sum payment.
Baloise also offers group life insurance, particularly in Switzerland in the context of the law on occupational insurance,
and in Belgium. The biometric risks and the guaranteed rate of return and guaranteed minimum cash surrender values in
this business are similar in nature to those in the traditional business. There are differences from other traditional business
in that policyholders are not generally individuals and there are some very specific regulatory requirements. In Switzerland,
for example, the Swiss Federal Council stipulates the minimum rate of interest for the compulsory savings component of
retirement assets covered by the Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG)
and the conversion rates for retirement pensions.
In all life insurance contracts, the biometric risk is impacted by different factors. Changes in lifestyle, for example, or an
epidemic or terrorist attack can have a material effect on mortality risk. Longevity risk can stem from medical advances
and rising living standards. Disability risk can grow as a result of legislative changes and pension benefits can rise as a
result of increasing life expectancy.
A key feature of many traditional life insurance contracts, including in group life business, is the sharing of some insur-
ance and market risk between Baloise and the policyholder through the participation feature. For example, higher death
benefits generally mean lower surpluses, so the additional expense is therefore not borne solely by the Baloise Group.
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197
Financial Report The aim of participation systems is to allow policyholders to participate in residual surpluses generated by the respective
group of policyholders. This statutory or discretionary participation varies depending on the country, operating segment
(such as individual or group life business) and source of the surplus (e. g. interest rate gain or risk return).
Under traditional contracts in Germany, the Baloise Group is obliged by law to return a minimum percentage of its profit
to policyholders by letting them share in surpluses.
Minimum percentages also apply to some of the occupational pensions business in Switzerland, which impacts poli-
cyholders’ dividends.
Unit-linked and similar contracts
Unit-linked and similar contracts are generally endowment insurance or deferred annuity insurance where the policyholders
usually bear the entire investment risk and benefit fully from any positive return.
If the policyholder dies, the beneficiary receives the sum insured or the fund assets, if the latter exceed the sum insured.
During the deferment period, unit-linked annuities behave in a similar way to unit-linked endowment life insurance, but
during the payout period the policy converts into a traditional annuity with guaranteed benefits.
A key feature of unit-linked life insurance and similar contracts is that the Baloise Group does not guarantee either the
cash surrender value or the maturity value.
A closed sub-portfolio of unit-linked contracts in Switzerland represents an exception to this. These contracts were written
as part of the statutory pension scheme (Pillar 3a) and on the endowment date guarantee the net investment premium
plus accrued interest at an interest rate of 3.25 per cent.
The Baloise Group also has a number of variable annuities products, primarily in its Swiss units, that offer unit-linked
and, in some cases, guaranteed whole-life annuities which are hedged using external reinsurance.
All of the above guarantees are measured in line with other products with a guaranteed rate of return.
In addition, the Baloise Group offers a minimum maturity value for certain contracts in Switzerland and Germany linked
to the choice of underlying fund. The funds are typically those with the type of investment strategy that guarantees a
certain fund value at maturity for a specific policy term. 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 fund for which Baloise provides a guaranteed maturity value. This is hedged via
investments in bonds issued by banks outside the Group.
Management of risk
Longevity risk, mortality risk and disability risk are specific to life insurance and are monitored on an ongoing basis. The
companies in the Baloise Group review and analyse mortality, along with the frequency with which the policies are cancelled,
invalidated and reactivated, on a decentralised basis using standard actuarial methods. The information they gather is
used to ensure that rates are adequate, with acceptable safety margins, and to set aside sufficient local reserves to meet
future insurance liabilities. The risks in this context are manageable because rates have to be calculated conservatively
by law and the base data is relatively good. In pension insurance, there is also the risk that the constant upward trend in
life expectancy will lead to annuities having to be paid for longer. Appropriate bases of calculation are used to account
for this risk.
There are clear authorisation levels and underwriting limits for life insurance in each sector. Reinsurance is also used for
risk management purposes in the life insurance business but is less important in this area as a means of transferring risk.
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197
Financial Report
Risk exposure and risk concentration
Life insurance is generally offered as fixed-sum insurance under which – instead of payments for an incurred loss – a fixed
sum is paid on occurrence of an insured event, which can be survival or death. Risk insurance options pay capital and/or
pension benefits in the event of premature death (whole-life insurance) or disability (disability insurance). The table below
quantifies actuarial risk exposure in the life insurance business by liability for remaining coverage, LRC, for the portfolio of
insurance contracts (see note 12.1).
as at 31.12.
CHF million
Endowments and pure death benefit products
Annuities
Disability products
Unit-linked products
Hybrid products
Investment contracts with DPF
Group life
Other
Total
Liability for
remaining coverage
2023
2022
9,132.7
4,447.0
185.9
2,955.7
1,601.1
4,437.2
9,453.9
4,622.5
305.7
2,781.0
1,377.8
4,599.3
20,594.8
20,241.0
16.7
10.7
43,371.1
43,391.9
Assumptions
For measurement in accordance with IFRS 17, Baloise uses assumptions about actuarial risk. These assumptions are updated
annually and include, for example:
● Mortality assumptions, for whole-life and endowment policies
● Probability of disability and a policyholder being able to return to work for products with (occupational) disability and
incapacity insurance
● Assumptions relating to the policyholder options in the rate scales, including assumptions about cancellations and
probabilities of pensions being drawn
Where Baloise itself has a sufficiently large volume of business from which to derive best estimates for these assumptions,
it makes use of that data to do so. Where portfolios are too small or too new to be the basis or sole basis of statistical
methods, Baloise uses industry data and other sources. Besides historical and current trends, certain assumptions also
take foreseeable trends into account, including the ongoing improvement of mortality rates.
Sensitivity analysis
The following sensitivity analysis shows the consequences of realistic changes in actuarial risk parameters to which the
Baloise Group is exposed at the balance sheet date. These consequences impact on its consolidated equity, profit for the
period and CSM. Where risk factors are largely symmetrical, only the negative impact is analysed. Managing the factors
to move them in the opposite direction would have the opposite effect, but to roughly the same degree (i. e. an increase
instead of a decrease of the same magnitude). In the case of asymmetrical risk factors, both the positive and the nega-
tive impact are analysed. When determining sensitivities, only the assumption being tested is varied. However, the model
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Financial Report
takes into account additional effects, such as associated changes in profit sharing, using the same rules as applied in the
baseline scenario. In general, sensitivities do not behave in a linear fashion and relate to a specific date, meaning that
conclusions about future behaviour, particularly where sensitivities are combined, do not necessarily prove correct. For
the sensitivities presented below, the effect is calculated of changes in assumptions on profit for the period and on equity
after deferred taxes:
CHF million
Mortality risk + 10 % 1
before reinsurance
after reinsurance
Mortality risk – 10 % 2
before reinsurance
after reinsurance
Longevity risk +25 % 3
before reinsurance
after reinsurance
Disability risk +10 % 4
before reinsurance
after reinsurance
Surrender rates +10 % 5
before reinsurance
after reinsurance
Surrender rates –10 % 5
before reinsurance
after reinsurance
Impact on the CSM
Impact on
profit for the period
Impact on equity
(incl. profit for the period)
2023
2022
2023
2022
2023
2022
– 46.1
– 44.0
– 108.1
– 108.4
– 39.8
– 39.6
– 63.4
– 29.7
– 85.3
– 75.0
90.6
80.2
– 53.4
– 51.7
– 81.7
– 82.1
– 28.7
– 28.5
– 64.9
– 43.8
– 101.1
– 89.5
106.6
94.8
– 1.4
– 1.4
– 5.2
– 5.3
– 1.7
– 1.8
– 2.1
– 2.2
0.2
0.4
– 0.2
– 0.6
– 1.8
– 2.8
– 4.4
– 5.4
– 1.5
– 2.5
– 2.6
– 1.3
– 0.5
0.7
0.5
1.7
– 2.8
– 3.0
– 5.2
– 5.2
– 1.7
– 1.8
– 2.7
– 7.0
– 0.4
– 1.5
0.2
1.2
– 1.9
– 3.1
– 4.4
– 5.3
– 1.5
– 2.5
– 2.8
– 4.9
– 3.9
– 4.7
4.1
7.4
1 This sensitivity measures the effect of a relative increase of 10 per cent in future annual mortality rates on contracts where this would mean an increase in the obligation, e. g.
pure risk contracts.
2 This sensitivity measures the effect of a relative decrease of 10 per cent in future annual mortality rates on contracts where this would mean an increase in the obligation, e. g.
life annuities.
3 This sensitivity examines the effect of a relative change in the future trend parametrisation in mortality by 25 %. It applies only to annuities, and quantifies a parameter risk
rather than a biometric risk.
4 This sensitivity examines the effect of a relative change in the yearly future disability rates by 10 %.
5 This sensitivity measures the impact of a future relative change in annual surrender rates (redemptions, partial redemptions, cancellations, premium waivers, etc.) of
10 per cent.
11.2.3 Financial contracts
The Baloise Group’s banking business in Switzerland is run by Baloise Bank Ltd. Its most important line of business is interest
margin business, with lending mainly occurring on a mortgage-backed basis. Baloise Bank Ltd also runs the brokerage
and services business.
The main risk categories in the banking business of the Baloise Group are therefore credit risk, interest rate risk and
liquidity risk.
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Financial Report Contracts with characteristics of unit-linked contracts but with no significant insurance risk are also deemed financial
contracts. They are mainly written in Luxembourg and Liechtenstein. Policyholder behaviour is the central risk with these
contracts. There is also an indirect market risk as the Baloise Group’s compensation for expenses from these contracts
mainly depends on the fair value of the underlying assets. The Group also reports as financial contracts those contracts
that do not have significant insurance protection, do not have a significant participation feature and are not unit-linked.
There is a small volume of such contracts in Belgium. The financial risks are similar to those of traditional insurance products.
Financial risk
11.3
In the course of its business, the Baloise Group is exposed to a number of financial risks. The following notes specifically
address market risk, credit risk and liquidity risk. To limit risk from investments, the investments are stress-tested using
defined capital market scenarios and the effects are monitored on a monthly basis. The capital market scenarios and limits
used are reviewed and approved at least once a year.
11.3.1 Market risks
Currency risk
Currency risk stems from potential financial loss generated by changes in exchange rates. The extent of the effective
currency risk depends on:
● the amount of the net foreign currency 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.
Currency risk largely derives from investments in foreign currency bonds for investment or diversification purposes and
private debt investments (particularly those denominated in euros and US dollars). 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. By contrast, alternative financial assets are
posted under the line item ‘Net investment in a foreign operation’ and their currency effects are only taken to income when
the investment is sold. As a result, hedge accounting is used to assign currency hedges to the alternative financial assets,
meaning that the currency effects are only taken to income when the underlying item is sold.
Currency risk management
In its management of currency risk, which aims to ensure compliance with the defined risk budget for currency effects
recognised in the income statement, the foreign exchange management team first calculates adequate target hedge
ratios. It then implements the necessary hedging strategies, taking into account these target hedge ratios and the
permitted discretionary ranges. 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 derivatives 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 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 Baloise Group writes its insurance business almost exclusively in Swiss francs and euros, meaning that the tech-
nical 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).
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Financial Report Currency risk sensitivities
This sensitivity measures the impact of a relative change in the exchange rates of minus 10 per cent against the Swiss
franc at the end of the period. The stress scenario is applied only to monetary items and is consolidated taking account
of the effects of deferred taxes. The impact of translating the functional currencies of the individual companies into the
Group currency is disregarded.
as at 31.12.
CHF million
Currency change against CHF –10 %
Financial instruments
Insurance contracts
Total
of which: underlying assets relating to insurance contracts
Impact on
profit for the period
Impact on equity
(incl. profit for the period)
2023
2022
2023
2022
– 18.1
– 13.3
– 31.4
– 30.7
16.6
– 55.2
– 38.7
19.6
– 9.4
– 14.6
– 23.9
– 22.8
30.8
– 55.3
– 24.5
15.0
Interest rate risk
Interest rate risk stems from all unfavourable effects of fluctuations in money market and capital market interest rates.
Economic risk arises from the fact that a company’s profit can decrease as a result of a lower interest margin or that
the fair value of a portfolio of interest rate-sensitive products can decline. Furthermore, a movement in interest rates or
in the interest rate curve can result in a significant deterioration in terms and conditions if funding has to be rolled over.
The Baloise Group is exposed to different kinds of interest rate risk. Changes in interest rates can impact the measurement
of assets and liabilities to different extents. In particular, technical reserves, being based on discounted cash flows, must be
reported on the basis of continually updated financial and non-financial assumptions. This means that changes in interest
rates lead to adjustments to reserves, which are reported either in the income statement or through other comprehensive
income, depending on the type of contract involved. The same applies analogously to investments, which are measured
either at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVPL). Interest rate
risk does not affect the carrying amounts of investments measured using the amortised cost (AC) model. All of the Baloise
Group’s business is therefore impacted by the effect of changes in interest rates where assets and liabilities have a different
duration or where differing accounting treatments have been chosen.
Interest rate risk management
Under Baloise’s Group-wide Risk Management Standards, 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.
In the non-life units, benchmark-based maturity management is the primary method used. In the life units, maturity
management is driven by the structure of the obligations.
Baloise’s life insurance companies 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.
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Financial Report 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 uses 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 Ltd is also actively managed through the use of appropriate interest rate derivatives.
Interest rate risk sensitivities
If all interest rates had risen or fallen by 50 basis points on the balance sheet date but all other variables had remained
constant, the following impact on profit for the period would have been observed, taking the effects of deferred taxes into
account:
as at 31.12.
CHF million
Parallel shift +50 basis points 1
Financial instruments
Insurance contracts
Total
of which: underlying assets relating to insurance contracts
Parallel shift –50 basis points 1
Financial instruments
Insurance contracts
Total
of which: underlying assets relating to insurance contracts
Impact on
profit for the period
Impact on equity
(incl. profit for the period)
2023
2022
2023
2022
– 1,020.8
– 992.1
– 1,146.9
– 1,105.1
899.3
– 121.5
– 897.6
874.5
– 117.6
1,012.6
– 134.3
957.7
– 147.4
– 879.6
– 1,014.6
– 1,054.6
1,099.8
– 973.2
126.6
968.6
1,071.7
1,233.1
1,190.4
– 948.0
– 1,092.7
– 1,037.4
123.7
942.2
140.4
1,092.3
153.0
1,129.5
1 This sensitivity measures the effect of a constant change of 50 basis points in the interest rates used to measure balance sheet line items across all maturities.
Certain items on the consolidated balance sheet for which the Baloise Group defines an interest rate sensitivity for the
purposes of this disclosure may be subject to other interest rate sensitivity calculations for other disclosures.
Equity price risk
Equity price risk describes the risk of the market price of financial instruments with characteristics of equity changing to
the detriment of the Baloise Group. Depending on the measurement option in use, changes in market prices can impact
the income statement and/or equity.
Equity price risk management
Equity price risk is significantly reduced by means of diversification, i. e. by spreading risk across sectors, countries and
currencies. Active overlay management using derivatives also mitigates equity price risk.
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Financial Report Equity price risk exposure
The Baloise Group is exposed to equity price risk from directly held equity instruments and from collective investments (or
fund investments), which, in turn, invest in equity instruments. The Baloise Group is not exposed to any significant risk of
concentrated equity price risk.
Equity price risk sensitivities
If the market price of all financial instruments with characteristics of equity were to move by +/– 25 per cent on the balance
sheet date, the following impact would be observed:
as at 31.12.
CHF million
Change in fair values +25 %
Financial instruments
Insurance contracts
Total
of which: underlying assets relating to insurance contracts
Change in fair values –25 %
Financial instruments
Insurance contracts
Total
Impact on
profit for the period
Impact on equity
(incl. profit for the period)
2023
2022
2023
2022
1,230.6
1,352.0
1,303.0
1,480.1
– 1,101.0
– 1,218.9
– 1,053.4
– 1,110.3
129.6
1,229.9
133.1
249.6
1,351.3
1,295.6
369.8
1,473.4
– 1,222.3
– 1,297.9
– 1,294.8
– 1,426.0
1,096.4
– 126.0
1,188.0
– 109.9
1,051.1
– 243.7
1,076.1
– 349.9
of which: underlying assets relating to insurance contracts
– 1,221.7
– 1,302.1
– 1,287.4
– 1,424.2
The effects shown include the impact of deferred taxes and derivative hedges. The effect of life insurance policyholders
participating in the company’s profits, depending on their policy and local circumstances (see note 12.1), is also included
in the table above.
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Financial Report Market risk sensitivities – effects on CSM
The described sensitivities in market parameters have the following impact on the CSM:
as at 31.12.
CHF million
Interest rate change – parallel shift +50 basis points
Insurance contracts
Interest rate change – parallel shift –50 basis points
Insurance contracts
Change in fair values +25 %
Insurance contracts
Change in fair values –25 %
Insurance contracts
Currency change against CHF –10 %
Insurance contracts
Impact on the CSM
2023
2022
– 71.4
– 215.9
– 28.0
61.7
302.4
350.9
– 301.4
– 347.3
7.0
13.6
11.3.2 Credit risk
Credit risk relating to assets held by insurance companies refers to the total potential downside risk arising from a dete-
rioration in the credit quality of a borrower or issuer, or from impairment in the value of collateral. Credit risk arises in
particular from financial instruments with characteristics of debt, mortgages and loans, as well as from receivables and
demand deposits held by banks. In addition, there are guarantees and collateral for the benefit of third parties, which are
described in note 10.3.1.
Credit risk rises with increasing concentration of counterparties in a single sector or geographic region. Changes in the
economic environment that affect entire sectors or geographic regions can jeopardise the solvency of an entire group of
otherwise unrelated counterparties.
Credit risk is managed by monitoring the credit quality of each individual counterparty and relying heavily on credit
ratings. When selecting securities and making changes to the credit portfolio, decisions draw on the regional expertise of
the business units.
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.
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Financial Report 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. If any financial instrument in the portfolio becomes sub-in-
vestment 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 debt in note 4.2.3 .
The management and control of credit risk arising from mortgage business are set out in instructions and written proce-
dures 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
receives 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.
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 the fair value of the financed assets, the loan value and the assessment of affordability are of critical
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.
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 receive a high credit risk (BB and lower) rating.
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Financial Report The table below shows the loan exposures to the largest counterparties:
Financial assets exceeding 10 % of consolidated equity
31.12.2023
CHF million
Swiss Confederation
Kingdom of Belgium
Pfandbriefbank schweizerischer Hypothekarinstitute AG
Republic of France
Pfandbriefzentrale der schweizerischen Kantonalbanken AG
Federal Republic of Germany
Kingdom of Spain
Canton of Zurich
Republic of Ireland
City of Zurich
Kingdom of the Netherlands
Canton of Lucerne
German federal state of North Rhine-Westphalia
Canton of Basel-Landschaft
3,121.7
2,076.7
1,415.0
1,355.2
1,068.4
1,053.5
706.7
610.4
486.1
460.4
441.2
417.2
341.0
330.2
Financial assets exceeding 10 % of consolidated equity
31.12.2022
CHF million
Swiss Confederation
Kingdom of Belgium
Republic of France
Pfandbriefbank schweizerischer Hypothekarinstitute AG
Federal Republic of Germany
Pfandbriefzentrale der schweizerischen Kantonalbanken AG
Kingdom of Spain
Kingdom of the Netherlands
Republic of Ireland
Canton of Zurich
Republic of Austria
3,145.8
2,185.1
1,307.4
1,281.2
1,256.1
886.7
702.5
589.8
486.0
420.5
385.6
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Financial Report The tables below show the changes in expected credit losses from non-performing loans for each measurement category.
The losses are broken down by stage in line with the expected credit loss model.
Please refer to note 12.2.3 under accounting policies for notes on this impairment model.
Credit risk by rating class (AC)
2023
CHF million
Financial instruments with characteristics of debt (AC)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Gross amount (AC)
Impairment (ECL)
Carrying amount of financial instruments with characteristics of debt (AC)
Mortgages and loans (AC)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Gross amount (AC)
Impairment (ECL)
Carrying amount of mortgages and loans (AC)
Stage 1
Stage 2
Stage 3
Total
21.0
102.1
–
–
2.0
125.0
–
125.0
160.4
6,967.7
854.1
155.9
1,878.2
10,016.4
– 6.1
10,010.3
–
–
–
–
–
–
–
–
7.1
35.0
1.5
0.9
–
44.5
– 0.3
44.2
–
–
–
–
–
–
–
–
–
33.6
7.2
53.7
–
94.5
– 10.5
21.0
102.1
–
–
2.0
125.0
–
125.0
167.5
7,036.3
862.8
210.5
1,878.2
10,155.3
– 16.9
83.9
10,138.4
Sub-total of financial assets with credit risk measured at amortised cost
10,135.3
44.2
83.9
10,263.4
Financial receivables (AC) 1
Gross amount (AC)
Impairment (ECL)
Carrying amount of financial receivables
Total financial assets with credit risk measured at amortised cost
1 Simplified approach
731.3
– 4.0
727.2
10,990.6
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Financial Report 2022
CHF million
Financial instruments with characteristics of debt (AC)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Gross amount (AC)
Impairment (ECL)
Carrying amount of financial instruments with characteristics of debt (AC)
Mortgages and loans (AC)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Gross amount (AC)
Impairment (ECL)
Carrying amount of mortgages and loans (AC)
Stage 1
Stage 2
Stage 3
Total
21.5
87.6
–
–
–
109.1
–
109.1
138.1
6,754.3
952.8
128.5
856.0
8,829.7
– 4.9
8,824.8
–
–
–
–
–
–
–
–
–
30.2
0.3
0.9
–
31.3
– 0.3
31.0
–
–
–
–
–
–
–
–
0.1
29.9
9.1
49.3
3.2
91.7
– 14.1
77.6
21.5
87.6
–
–
–
109.1
–
109.1
138.2
6,814.3
962.3
178.7
859.3
8,952.8
– 19.3
8,933.5
Sub-total of financial assets with credit risk measured at amortised cost
8,933.9
31.0
77.6
9,042.5
Financial receivables (AC) 1
Gross amount (AC)
Impairment (ECL)
Carrying amount of financial receivables
Total financial assets with credit risk measured at amortised cost
1 Simplified approach
604.7
– 4.1
600.7
9,643.2
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Financial Report Credit risk by rating class (FVOCI)
2023
CHF million
Financial instruments with characteristics of debt (FVOCI)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Carrying amount of financial instruments with characteristics of debt (FVOCI)
Impairment (ECL) recognised in other comprehensive income
Mortgages and loans (FVOCI)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Carrying amount of mortgages and loans (FVOCI)
Impairment (ECL) recognised in other comprehensive income
Stage 1
Stage 2
Stage 3
Total
1,501.1
2,780.8
1,020.9
313.0
12.3
5,628.0
3.0
332.0
222.9
–
–
–
555.0
0.0
–
–
–
25.5
–
25.5
6.9
–
–
–
–
–
–
–
–
–
–
1.2
–
1.2
1.4
–
–
–
–
–
–
–
1,501.1
2,780.8
1,020.9
339.6
12.3
5,654.7
11.4
332.0
222.9
–
–
–
555.0
0.0
Total financial assets with credit risk measured at fair value
through other comprehensive income
6,183.0
25.5
1.2
6,209.6
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Financial Report 2022
CHF million
Financial instruments with characteristics of debt (FVOCI)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Carrying amount of financial instruments with characteristics of debt (FVOCI)
Impairment (ECL) recognised in other comprehensive income
Mortgages and loans (FVOCI)
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Carrying amount of mortgages and loans (FVOCI)
Impairment (ECL) recognised in other comprehensive income
Stage 1
Stage 2
Stage 3
Total
1,292.1
2,597.4
1,020.5
375.8
177.2
5,463.0
4.4
309.8
270.6
–
–
3.0
583.4
0.0
–
–
–
18.0
–
18.0
7.2
–
–
–
–
–
–
–
–
–
–
1.6
–
1.6
1.3
–
–
–
–
–
–
–
1,292.1
2,597.4
1,020.5
395.4
177.2
5,482.6
12.9
309.8
270.6
–
–
3.0
583.4
0.0
Total financial assets with credit risk measured at fair value
through other comprehensive income
6,046.3
18.0
1.6
6,066.0
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211
Financial Report Changes in expected credit losses (ECLs) – financial instruments with characteristics of debt at FVOCI
2023
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new financial assets acquired
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Financial assets derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
2022
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new financial assets acquired
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Financial assets derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
Stage 1
Stage 2
Stage 3
Total
4.4
– 2.5
1.6
1.6
– 0.7
– 0.4
– 0.8
–
–
– 0.3
3.0
7.2
3.0
–
– 1.6
0.7
– 0.3
– 1.4
–
–
– 0.7
6.9
1.3
0.9
–
–
–
0.7
– 1.4
–
–
– 0.1
1.4
12.9
1.5
1.6
–
–
–
– 3.6
–
–
– 1.1
11.4
Stage 1
Stage 2
Stage 3
Total
3.0
– 0.1
2.2
1.5
– 0.9
– 0.5
– 0.7
–
–
0.0
4.4
5.5
8.8
–
– 1.5
0.9
– 5.4
– 1.0
–
–
0.0
7.2
0.7
0.4
–
–
–
5.9
– 0.5
–
– 5.2
0.0
1.3
9.1
9.1
2.2
–
–
–
– 2.2
–
– 5.2
– 0.1
12.9
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Financial Report Changes in expected credit losses (ECLs) – mortgages and loans at AC
2023
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new mortgages and loans
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Mortgages and loans derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
2022
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new mortgages and loans
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Mortgages and loans derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
Stage 1
Stage 2
Stage 3
Total
– 4.9
1.1
– 2.5
– 0.3
0.0
0.0
0.5
–
–
0.0
– 6.1
– 0.3
0.0
–
0.0
0.0
0.0
0.0
–
–
–
– 14.1
– 1.4
–
0.4
–
0.0
4.0
–
0.5
0.0
– 19.3
– 0.3
– 2.5
–
–
–
4.6
–
0.5
0.0
– 0.3
– 10.5
– 16.9
Stage 1
Stage 2
Stage 3
Total
– 5.2
0.5
– 1.8
0.0
0.0
0.8
0.9
–
–
0.0
– 4.9
– 0.2
0.0
–
– 0.1
0.0
0.0
0.0
–
–
–
– 0.3
– 13.5
– 2.4
–
0.1
–
– 0.8
2.4
–
–
0.0
– 14.1
– 18.9
– 2.0
– 1.8
–
–
–
3.3
–
–
0.0
– 19.3
212
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Financial Report Changes in expected credit losses (ECLs) – loans at FVOCI
2023
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new loans
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Loans derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
2022
CHF million
Balance as at 1 January
Net remeasurement of ECL allowance
ECL of new loans
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Loans derecognised
Additions arising from change in the scope of consolidation
Write-off
Exchange differences
Balance as at 31 December
Receivables are presented using the simplified approach:
CHF million
ECL of receivables from financial contracts
ECL of receivables from investments
ECL of other financial receivables
Total ECL of financial receivables (AC)
Stage 1
Stage 2
Stage 3
Total
0.0
0.0
0.0
–
–
–
0.0
–
–
0.0
0.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.0
0.0
0.0
–
–
–
0.0
–
–
0.0
0.0
Stage 1
Stage 2
Stage 3
Total
0.0
0.0
0.0
–
–
–
0.0
–
–
0.0
0.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.0
0.0
0.0
–
–
–
0.0
–
–
0.0
0.0
2023
2022
– 1.4
– 1.5
– 1.1
– 4.0
– 1.1
– 1.7
– 1.3
– 4.1
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213
Financial Report Credit risk from the reinsurance contracts held by the Baloise Group is grouped by credit quality of the counterparty in the
table below and was measured in accordance with IFRS 17:
CHF million
Fulfilment cash flows after deposits and collaterals
Very low credit risk (AAA)
Low credit risk (AA to A)
Moderate / medium credit risk (BBB)
High credit risk (BB and lower)
No rating
Exposure credit risk
31.12.2023
31.12.2022
–
362.3
0.0
–
13.7
376.0
–
388.8
0.0
–
77.4
466.2
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 rating lower than A or a comparable rating from another recognised rating agency is
permitted. However, reinsurers with 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 diffi-
culties. 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.
11.3.3 Liquidity risk
Liquidity risk 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 secured quickly enough. In extreme cases, a lack of liquidity can result in insolvency. Banks
and insurance companies incur liquidity risk.
Liquidity risk management
Statutory provisions and the following rules apply to the management of liquidity risk: 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.
There are also asset and liability management committees 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 time as the reinsurer assumes the costs.
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215
Financial Report 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). Given the substan-
tial volume of government bonds and quasi-government bonds held, it is likely to still be possible to sell large volumes of
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. It is furthermore not possible to sell
investment property to generate immediate liquidity.
Baloise Bank Ltd’s liquidity risk is managed by its asset and liability management committee. The required data and key
figures are determined and calculated using a specialist IT application.
Liquidity risk exposure
The anticipated maturity profile of assets and liabilities under insurance contracts and reinsurance contracts, which is
monitored as part of liquidity management, is presented in the table below.
Maturities of undiscounted cash flows from liabilities under insurance and reinsurance contracts – non-life
31.12.2023
CHF million
‹ 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Carrying
amount
Insurance contract liabilities (PAA)
1,793.4
Reinsurance contract liabilities (PAA)
2.1
762.6
– 1.6
525.3
– 1.0
359.6
– 0.8
271.6
2,098.0
5,810.5
5,009.0
– 0.6
– 1.2
– 3.0
– 2.5
31.12.2022
CHF million
‹ 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Carrying
amount
Insurance contract liabilities (PAA)
1,734.4
793.9
534.8
380.4
275.7
2,103.7
5,822.9
4,905.6
Reinsurance contract liabilities (PAA)
64.8
–
–
–
–
–
64.8
64.8
214
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215
Financial Report Maturities of the present values of future cash flows from liabilities under insurance and reinsurance contracts – life
31.12.2023
CHF million
‹ 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Insurance contract liabilities (VFA)
Insurance contract liabilities (GMM)
1,586.9
307.8
939.1
193.2
963.3
205.1
836.8
212.9
863.2
26,556.5
31,745.8
194.8
5,725.7
6,839.6
Reinsurance contract liabilities (GMM)
0.9
– 0.1
– 0.1
– 0.1
– 0.1
0.0
0.5
31.12.2022
CHF million
‹ 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Insurance contract liabilities (VFA)
Insurance contract liabilities (GMM)
1,512.7
269.7
981.9
184.2
862.6
122.5
645.8
194.7
689.2
26,495.8
31,188.0
183.7
5,929.4
6,884.2
Reinsurance contract liabilities (GMM)
0.0
0.0
0.0
0.0
0.0
0.4
0.3
CHF million
Amount payable on demand
Carrying amount
31.12.2023
31.12.2022
34,397.8
38,585.4
35,183.4
38,072.1
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217
Financial Report Liquidity management must take account of the maturity structure of insurance contract liabilities and financial liabilities:
Maturities of financial liabilities (undiscounted)
‹ 1 year 1 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Carrying
amount
31.12.2023
CHF million
Financial liabilities
Liabilities arising from financial
contracts
1,328.7
Recognised at amortised cost (AC)
822.4
358.6
311.1
283.9
213.9
Recognised at fair value through
profit or loss (FVPL)
Derivatives (liabilities)
Outstanding bonds
Lease liabilities
Other financial liabilities
Total financial liabilities
(undiscounted)
506.3
56.4
47.5
69.9
–
–
278.3
235.7
42.6
4.1
250.1
17,437.2
19,936.8
19,936.3
215.7
6,324.9
8,123.8
8,123.3
34.4
11,112.3
11,813.1
11,813.1
1.8
21.0
83.4
83.4
172.6
220.9
294.9
219.5
328.9
1,235.0
2,471.8
2,334.0
17.0
6.4
823.3
110.3
5.4
11.5
4.4
–
2.9
–
24.7
6.4
60.8
951.5
57.3
962.1
2,398.1
696.2
595.7
506.3
583.7
18,724.3
23,504.3
23,373.2
Guarantees and future liabilities
Guarantees
Future liabilities
44.8
0.8
389.7
1,594.0
Total guarantees and future liabilities
(undiscounted)
434.5
1,594.8
1 All demand deposits are included in the first maturity band.
0.1
8.3
8.4
0.3
7.2
7.5
0.0
2.9
9.7
55.6
987.9
2,990.0
2.9
997.5
3,045.7
–
–
–
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217
Financial Report ‹ 1 year 1 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years
> 5 years or
no deter-
minable
residual
term
Total
Carrying
amount
31.12.2022
CHF million
Financial liabilities
Liabilities arising from financial
contracts
1,288.7
Recognised at amortised cost (AC)
536.2
Recognised at fair value through
profit or loss (FVPL)
Derivatives (liabilities)
Outstanding bonds
Lease liabilities
Other financial liabilities
Total financial liabilities
(undiscounted)
217.1
169.9
47.2
–
240.6
203.6
37.1
0.3
175.8
156.2
19.7
–
186.9
17,730.6
19,839.7
19,839.7
164.6
6,752.8
7,983.3
7,983.3
22.3
10,977.8
11,856.5
11,856.5
1.0
45.9
135.8
135.8
752.5
88.6
550.6
166.4
214.7
288.7
213.3
1,255.5
2,689.3
2,583.8
9.6
707.3
6.3
63.2
3.4
13.2
2.7
–
4.2
–
0.6
19.1
26.8
802.8
25.6
810.5
2,644.7
453.1
472.3
467.2
405.3
19,051.7
23,494.3
23,395.4
Guarantees and future liabilities
Guarantees
Future liabilities
33.2
1.9
827.9
1,168.0
Total guarantees and future liabilities
(undiscounted)
861.1
1,170.0
1 All demand deposits are included in the first maturity band.
–
5.2
5.2
–
5.3
5.3
0.4
6.1
10.2
19.2
45.8
2,031.8
6.5
29.5
2,077.5
–
–
–
11.4 Capital management and solvency
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.
11.4.1 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 requirement is a measurement of the operational funding required to cover actuarial risk. At the same time, the
investment required to smooth fluctuations in investment value and returns for a given probability is also calculated. Anal-
ysis of these risks is based on quantitative models that use statistical methods to evaluate historical data and place it in
the context of current exposure. Various extreme scenarios are also evaluated, and their potential impact on risk-bearing
capacity is analysed. The SST ratio (ratio of risk-bearing capital to target capital) is calculated for the strategic business
units and the Group.
The results of the Swiss Solvency Test for the Baloise Group are disclosed annually in the financial condition report, which
is published at the end of April.
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219
Financial Report 11.4.2 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 are defined by Basel III regulations.
11.4.3 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 Baloise to meet external reporting require-
ments at all times.
11.5 Other regulatory requirements
In addition to the statutory rules on capital adequacy, the Group companies must comply with numerous other regulatory
and contractual requirements, which vary depending on the country or jurisdiction in which they operate. The effects of
these requirements on the classification and grouping of insurance contracts are described in note 12.1.
Examples of other regulatory requirements include investment guidelines and rules concerning cover assets, technical
reserves, a suitable system of corporate governance, and internal control systems.
In terms of contractual stipulations, the guaranteed rates of return in life insurance outlined above are of particular
importance.
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219
Financial Report 12. Principles of consolidation; accounting policies
This note explains the principles of consolidation and the accounting policies used in the Baloise Group’s consolidated
annual financial statements and provides information about the material accounting estimates and assumptions.
The Baloise Group’s consolidated annual financial statements contain accounting estimates and assumptions that can
impact on the presentation of financial position and financial performance. Estimates and judgements made by senior
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 balance sheet date. The amounts that actually arise may
vary from the estimates.
Estimates and assumptions primarily relate to financial assets, impairment, deferred taxes, insurance contracts, provi-
sions and reserves, employee benefits and goodwill.
Insurance contracts
12.1
12.1.1 Definition of an insurance contract
Irrespective of its treatment in accordance with regulatory requirements or tax law, an insurance contract is defined in
IFRS 17 Insurance Contracts as “a contract under which one party (the issuer) accepts significant insurance risk from
another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the
insured event) adversely affects the policyholder”. In this context, insurance risk is any directly insured or reinsured risk
that is not a financial risk.
The Baloise Group assesses the significance of insurance risk based on the volume of additional payments that will
have to be made by the insurer if the insured event occurs.
Contracts that include no significant insurance risk are generally investment contracts. If these investment contracts
contain a discretionary participation feature (DPF), the Baloise Group treats them as within the scope of IFRS 17 and its
recognition and measurement principles. They are referred to as insurance contracts below.
A financial instrument that provides a particular investor with the contractual right to receive, as a supplement to an
amount not subject to the discretion of the issuer, additional amounts,
● that are expected to be a significant portion of the total contractual benefits,
● the timing or amount of which are contractually at the discretion of the issuer, and that are contractually based on
•
•
•
the returns on a specified pool of contracts or a specified type of contract,
realised and/or unrealised investment returns on a specified pool of assets held by the issuer, or
the profit or loss of the entity or fund that issues the contract.
Some insurance contracts contain combined cover for multiple insurance risks. The Baloise Group treats this type of
multi-coverage in line with its internal management structures. In life insurance, main insurance policies and their policy
riders (supplementary insurance) are usually treated as one contract and are assigned to a group of insurance contracts
and measured as described below. In non-life insurance, policies offering individual cover are generally treated as inde-
pendent contracts and are assigned to the portfolios described later on.
12.1.2 Separating components from an insurance contract
Under IFRS 17, certain components may need to be separated from the insurance contracts as defined above.
Embedded derivatives
The Baloise Group identifies any embedded derivatives that are included in insurance contracts in accordance with the
relevant guidance in IFRS 9 and, on the basis of those principles, determines whether an embedded derivative needs to
be separated. If this is the case, all cash flows related to the embedded derivative are separated from the host contract
and then measured and presented as a distinct financial instrument.
Embedded derivatives that do satisfy the definition of an insurance contract, such as certain guarantees for annuity
conversion rates, are not separated.
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221
Financial Report Distinct investment components
An investment component of an insurance contract comprises all payments that will have to be made to the policyholder
in all circumstances, regardless of whether an insured event has occurred. An investment component is distinct if it is not
highly interrelated with the rest of the insurance contract and is – or could be – available as a stand-alone product in the
same market as the insurance contract. Investment components are deemed to be highly interrelated with their host
contract if they cannot be terminated independently of the host contract.
Distinct investment components must be separated and measured independently in the same way as embedded
derivatives but may be within the scope of IFRS 17, for example as an investment contract with DPFs.
Like any other payment, non-distinct investment components are measured as a component of the insurance contract.
However, they are treated separately for the purposes of recognising income and expense from insurance contracts, as
explained in more detail below in connection with recognition topics.
Guaranteed minimum cash surrender values in life insurance, which are not distinct and therefore part of the insurance
contract, are the most important example of investment components in insurance contracts in the Baloise Group.
Distinct non-insurance services
The Baloise Group identifies non-insurance services embedded in insurance contracts in accordance with IFRS 15 Revenue
from Contracts with Customers. These non-insurance services are considered distinct if the policyholder can benefit from
the services directly.
Cash flows from distinct non-insurance services are separated and measured in accordance with IFRS 15.
12.1.3 Measurement unit for insurance contracts
All of the following references to insurance contracts relate to contracts identified as described above, after the removal
of any components that have to be separated.
The measurement unit for insurance contracts is the group of insurance contracts (GIC) that is formed in a multi-step
process. The process starts with portfolios of insurance contracts (PICs). These consist of contracts that have similar risks
and are managed together. When a contract is issued, it is assigned to a PIC and then allocated to one of the three groups
that make up every portfolio:
● Group containing all contracts that, upon initial recognition, Baloise assumes are onerous within the meaning of
IFRS 17 (see explanation below)
● Group containing all contracts that are not onerous and, upon initial recognition, have no significant probability of
becoming onerous subsequently
● Group containing all other contracts
The Baloise Group applies various qualitative and quantitative factors to assess the risk that a contract will become
onerous subsequently.
One exception arises due to EU rules on unisex rates, which prohibits the charging of different premiums according to
gender. When forming groups of insurance contracts in accordance with IFRS 17, Baloise groups together any contracts
affected by this that otherwise have the same risk profile.
In the final step, these profitability groups are divided up on the basis of calendar year to form the GICs. Each contract
remains in the GIC to which it was originally assigned until derecognition. New contracts recognised during a calendar
year are added to the GICs on an ongoing basis.
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Financial Report These criteria for grouping contracts apply both to contracts in which the Baloise Group takes on risk and to reinsurance
contracts held.
The Baloise Group recognises GICs for the first time at the earliest of the following three points in time:
● The beginning of the coverage period
● The date on which payment of the first premium becomes due or, in the case of contracts that do not have an explicit
premium due date, the date on which the premium is received
● The date on which the GIC becomes onerous
New contracts are assigned to a GIC on an ongoing basis as soon as they satisfy one of these conditions formulated for
the GICs. The Baloise Group has defined line of business-specific profitability criteria in order to determine the need for a
separate test for the third criterion for GICs before the first two criteria have been satisfied.
12.1.4 Measurement and recognition of insurance contracts in accordance with the general measurement model
(GMM)
The standard method for measuring liabilities or assets arising from insurance contracts is the general measurement model
(GMM), which is described in this note by referring to the individual components:
● Estimates of future cash flows, taking account of options and guarantees
● Adjustment to reflect the time value of money and financial risk (discounting)
● Risk adjustment for non-financial risk
● Contractual service margin (CSM) representing the unearned profit that will be recognised on the agreed services
The sum of the first three components is also referred to as fulfilment cash flows (FCFs). For these components, the methods
used for measurement on initial recognition and for subsequent measurement are identical.
Under IFRS 17, the GMM is modified in the case of contracts with certain characteristics and reinsurance contracts held.
This is optional in some cases and mandatory in others. The characteristics of these modifications and their application
in the Baloise Group are presented in the line of business-specific notes.
Regardless of the measurement method, IFRS 17 requires the part of the reserve recognised for claims already incurred
(liability for incurred claims, LIC) to be separated from the part of the reserve recognised for remaining coverage (liability
for remaining coverage, LRC).
The following note sets out the recognition rules for the statement of comprehensive income.
Cash flows
The starting point for the measurement of insurance contracts is a current estimate of all future fulfilment cash flows paid or
received by the Baloise Group that arise within the contract boundary. The contract boundary is the earliest date on which
the policyholder is no longer obliged to pay premiums and the Baloise Group can, on the basis of a new risk assessment,
adjust the contract premiums or adjust the level of benefits without changing the level of premiums. All cash flows relating
to premiums or claims outside the contract boundary are deemed to relate to a future contract under IFRS 17.
The expected value of all cash flows required to fulfil the insurance contract is estimated, taking account of options and
guarantees. The estimate is updated as at each balance sheet date. No adjustments (increases or decreases) to compen-
sate for uncertainties in the cash flows or their discounting are made as they are explicitly taken into account as explained
below. Insurance acquisition cash flows are included in projections if they can be directly allocated to individual portfolios
of contracts; administrative expenses are included if they can be directly allocated to individual GICs.
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Financial Report If the contracts in a GIC affect the cash flows of another GIC, these mutual effects are taken into account (known as
mutualisation). Furthermore, all payments relating to non-distinct investment components are included in the projections
just like all other cash flows. Incoming payments and outgoing payments that occur before or after the contractually
stipulated due date are deferred or accrued, as appropriate, within the insurance contract liability.
Discounting
All future cash flows generally have to be discounted at current discount rates. This ensures that the time value of
money and – where relevant – financial risks that affect the amount and timing of cash flows are taken into account in
the measurement.
The Baloise Group discounts the cash flows from insurance contracts using discount rates that match the nominal
currency and maturity of the cash flows and take account of the liquidity of the obligations. Where possible, the Baloise
Group draws on discounting assumptions observable in liquid markets. If cash flows are expected at times for which no
such discount rates are observable, the Baloise Group interpolates or extrapolates the observable discount rates using
the Smith-Wilson method.
Financial risks predominantly affect cash flows in life insurance, in particular where benefits paid to the beneficiaries are
directly or indirectly derived from the value or performance of financial assets. The Baloise Group takes account of these
risks in discounting by taking a consistent, risk-neutral approach when selecting the expected returns that affect the cash
flows and when selecting the discount rates for the discounting of these cash flows.
All of the aforementioned discounting principles apply both to insurance contracts issued by the Baloise Group and
to reinsurance contracts held.
Cash flows without financial risks are generally discounted without taking account of credit risk, as measurement
of the insurance contracts is based on the assumption that all obligations are fulfilled. The Baloise Group therefore uses
the following discount rates:
weighted average in %
1 year
5 years
10 years
15 years
20 years
weighted average in %
1 year
5 years
10 years
15 years
20 years
31.12.2023
30.06.2023
31.12.2022
30.06.2022
CHF
1.67
1.34
1.45
1.62
1.78
2.15
2.02
1.97
2.02
2.10
1.97
2.31
2.54
2.63
2.69
1.05
1.75
2.26
2.48
2.59
EUR
31.12.2023
30.06.2023
31.12.2022
30.06.2022
3.42
2.39
2.50
2.62
2.63
3.98
3.16
2.95
2.95
2.86
3.36
3.20
3.18
3.18
3.04
1.34
2.21
2.58
2.80
2.77
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Financial Report weighted average in %
1 year
5 years
10 years
15 years
20 years
31.12.2023
30.06.2023
31.12.2022
30.06.2022
USD
4.94
3.70
3.65
3.68
3.66
5.54
4.11
3.75
3.68
3.61
5.09
3.93
3.74
3.72
3.65
3.51
3.29
3.30
3.38
3.36
Risk adjustment for non-financial risk
Cash flows from insurance contracts are also subject to uncertainty about their amount and timing for non-financial
reasons. For example, claims settlement, mortality trends or policyholder behaviour may not be as expected. These risks
are taken into account using a risk adjustment for non-financial risk (risk adjustment), i. e. an explicit increase in the present
value of the expected cash flows.
The Baloise Group determines the consolidated risk adjustment using the value at risk with a confidence level of 75 per
cent and at the level of the strategic business unit, taking all relevant diversification effects into account. Details of the
relevant calculation methods and the approaches taken to systematically allocate the risk adjustment to the individual
GICs are provided in the division-specific notes.
Contractual service margin (CSM) and loss component (LC) – initial measurement
At initial recognition of a GIC, the Baloise Group assesses the expected cash flows over the entire term of all contracts in
the GIC on a risk-adjusted and discounted basis, taking account of the following:
● All estimated future cash flows
● All cash flows at the time of initial recognition
● Release of all deferrals for payments made before initial recognition, including any insurance acquisition cash flow
payments due
If the fulfilment cash flows give rise to a net inflow, an additional reserve component is recognised within the LRC, the
contractual service margin (CSM). The CSM is initially recognised as the profit, calculated on the basis of IFRS 17, that the
Baloise Group expects to earn as a result of providing cover and other services under the contracts within the GIC.
However, if this gives rise to a net outflow, this amount is shown within the LRC and is updated separately as a loss
component (LC).
This generally means that contracts that are expected to have net inflows on the basis of IFRS 17 (also referred to below
as profitable contracts) are initially recognised with no impact on the income statement. For GICs containing contracts
that are expected to have net outflows (referred to below as onerous GICs), an expense arises upon initial recognition in
the amount of the expected net losses.
Contractual service margin – subsequent measurement
If further contracts are added to a GIC after initial recognition, the net inflow from these contracts expected at that time
– whether positive or negative – is taken into account in the GIC’s CSM. Furthermore, if a GIC contains contracts that are
denominated in a currency other than the functional currency of the strategic business unit, the GIC’s CSM is adjusted for
the effects of changes in exchange rates.
In addition, the expected net profits accrued in the CSM at the time of initial recognition are essentially adjusted in
three stages in each period:
● Accretion of interest on the opening balance for the period
● Netting of certain changes to the fulfilment cash flows expected for future periods
● Pro rata release to profit or loss of any remaining positive CSM amount
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Financial Report Interest is accreted at the rate that was used to discount cash flows without financial risk at the time of initial recognition
of the contracts in the GIC. As the contracts may be recognised in the GIC at different times, this interest is calculated as
a weighted average for all of the contracts in the GIC.
Any changes to the fulfilment cash flows for coverage to be provided after the end of the period and other services
are also measured on the basis of this average interest where such changes arise due to the updating of non-financial
assumptions (e. g. mortality assumptions).
In the event of a net reduction in this measurement of the fulfilment cash flows on the basis of the aforementioned
average interest, any existing CSM of the GIC is increased by the resulting additional margin in the contracts.
In the event of an increase in this measurement of the fulfilment cash flows, any existing CSM of the GIC is reduced by the
resulting loss of a margin in the contracts. This adjustment must not result in a negative CSM. Therefore, if the adjustment to
be made exceeds the existing CSM, the amount representing this excess increases the entire LRC and is recognised in profit
or loss immediately. This amount is disclosed separately as a loss component and is updated separately going forward.
If a loss component was recognised for a GIC in prior periods, any change in the measurement of the fulfilment cash
flows on the basis of the average interest is offset against the loss component in profit or loss. As is also the case for the
CSM, a loss component cannot be negative. Any excess amount resulting from the changed measurement is recognised
in the CSM and is therefore not recognised in profit or loss. Every GIC therefore has either a CSM or a loss component.
Furthermore, the CSM is adjusted to reflect the following experience deviations, i. e. differences between the amounts
expected for a particular period and the amounts of the actual payments:
● All experience adjustments for non-distinct investment components
● For premiums: the share of the experience adjustment that relates to future cover or other services
In the last step, the Baloise Group determines the proportion of any remaining positive CSM amount that relates to the
performance of services under the insurance contract in the current period. The number of coverage units – a measure for
all services to be provided – for each contract in a GIC is determined for the period and for all remaining periods in which
services are still to be provided. The release of the CSM for the period is then carried out on the basis of the number of
coverage units for all contracts in the GIC for the current period relative to the total coverage units at the end of the period.
The coverage units are identified on a product-specific basis.
Loss component – subsequent measurement
A loss component is a component of the liability for remaining coverage (LRC), irrespective of whether it has to be recognised
at the time of initial recognition of a GIC or whether it arises while coverage is being provided owing to the aforementioned
adjustments. It is essentially changed by the same influences that, in the case of profitable GICs, adjust the amount of
the CSM; in particular, the Baloise Group releases a loss component amount in the same way as it does for the CSM on
the basis of coverage units until coverage is no longer provided. In contrast to the CSM, however, all changes to the loss
component are recognised in profit or loss:
● All changes within the loss component are part of the insurance service expenses.
● In addition, each amortisation of the loss component on the basis of coverage units is netted with the insurance
revenue for the period. In line with IFRS 15, the Baloise Group thus ensures that the insurance revenue does not exceed
the premiums collected over the term of the GIC.
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Financial Report Insurance acquisition cash flows for future renewals
If insurance acquisition cash flows are economically attributable not to the new contract but to the expected renewal of
this contract, Baloise allocates the share of the cash flows for such future renewals systematically and taking account
of the expected number of renewals within the LRC of the related PIC. The Baloise Group regularly reviews the recoverability
of the insurance acquisition cash flows allocated in this way, taking account of the expected renewals and their profi-
tability. Impairment losses are recognised immediately in profit or loss for any unrecoverable amounts and, along with any
subsequent reversals of impairment losses, are shown under insurance service expenses.
This allocation is not dependent on the measurement model. However, insurance acquisition cash flows for future
renewals currently arise predominantly in connection with short-term contracts in the non-life business.
Derecognition and modification of insurance contracts
The Baloise Group derecognises an insurance contract when:
● all obligations under the contract are extinguished or discharged, or
● modification of the insurance contract would have resulted in it being classified differently, assigned to a different
GIC or given a materially different contract boundary, or would have resulted in other contract components being
separated. In this case, the Baloise Group recognises the modified contract as a new contract.
This modification of a contract represents an amendment to the contract terms, either by way of agreement between
the parties or due to changes to the legal basis. The policyholder’s exercise of an option provided in the contract does not
constitute a modification.
For contracts derecognised from a GIC, the Baloise Group identifies all fulfilment cash flows and, where relevant, the
related coverage units. The measurement of the GIC is then adjusted by reducing the fulfilment cash flows and by adjusting
the CSM for those cash flows that – depending on the measurement method – would lead to an adjustment of the CSM.
If the reason for derecognition was the sale of the contracts to a third party or one of the types of modification mentioned
above, the Baloise Group adjusts the CSM for the contracts being derecognised as follows:
● For contracts transferred to a third party, the CSM adjustment equates to the difference between the change in the
fulfilment cash flows that is offset against the CSM and the amount that the third party charges as the premium for
taking over the obligations from Baloise.
● For modified contracts, the CSM adjustment is calculated as the difference between the changes in the fulfilment
cash flows affecting the CSM and the premium that the Baloise Group would charge if it had entered into the
modified contract directly on the date of the modification. The premium determined in this way is also used to
determine the CSM of the modified contract.
Recognition of insurance contracts in accordance with the general measurement model (GMM) in comprehensive
income
Comprehensive income for insurance contracts is broken down into three disclosure groups:
● Insurance revenue
● Insurance service expenses, referred to in combination with insurance revenue as the insurance service result
● Insurance finance income or expenses (IFIE)
The presentation of all the components in comprehensive income is described below. All items recognised within the
insurance service result are recognised exclusively in profit or loss.
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Financial Report
Insurance revenue
The insurance revenue for a period generally comprises the following items:
A.
The consideration expected at the beginning of the period for the provision of services for new claims incurred in
the period and expected payments for all other services under the contract (excluding insurance acquisition cash
flows that can be allocated), netted (where applicable) with the release of the loss component on the basis of the
coverage units
Release of the CSM to profit or loss on the basis of the coverage units
Release of the part of the risk adjustment that was recognised for uncertainty relating to the current period
The share of experience adjustments for premiums relating to the coverage provided in the current period and
to other services
A share for amortisation of the insurance acquisition cash flows that can be allocated directly
The Baloise Group systematically calculates shares of these amounts that are attributable to any loss component and
presents them as part of the insurance service expenses.
Furthermore, the amounts in bullet point A. are reduced by the amount of actual non-distinct investment components.
Baloise determines the recognition of revenue for insurance acquisition cash flows per period pursuant to bullet point E.
for a group of insurance contracts, starting with the actual cash flows on the basis of the coverage units.
Insurance service expenses
The insurance service expenses for a period comprise the following items:
F.
The actual payments for new claims incurred in the period and actual payments for all other services under
the contract (including contract management costs, but excluding insurance acquisition cash flows that can
be allocated)
A share for amortisation of the insurance acquisition cash flows that can be allocated directly (equates to
the value in bullet point E. for insurance revenue)
Changes to the risk-adjusted present value of expected payments for claims that have already been incurred
(excluding effects attributable to market effects)
Changes to any loss components, including financial effects
B.
C.
D.
E.
G.
H.
I.
The amounts in bullet point F. are, where applicable, reduced by precisely the same expected value for non-distinct
investment components paid as the values pursuant to bullet point A. for insurance revenue. Differences between actual
and expected payments of non-distinct investment components are offset against the CSM or loss component, taking
account of the time value of money.
Insurance finance income or expenses
Insurance finance income or expenses constitute the total of all changes in the measurement of insurance and reinsur-
ance contracts that are due to financial effects. This comprises the reduction in the period of discounting (unwinding the
discount) and the effects of interest rate changes and other market effects that have a direct impact on the cash flows.
For contracts for which market parameters indirectly affect benefits that are at the discretion of the Baloise Group, Baloise
Group specifies at initial recognition and in a systematic way which changes in fulfilment cash flows relate to financial risk.
For each PIC, there is an option in respect of the insurance finance income or expenses to either recognise the total
amount in profit or loss or to disaggregate it into a share recognised in profit or loss and a share recognised in other
comprehensive income. The option is used for the PICs measured using the GMM, for the liability for incurred claims, and
for the traditional life insurance business in Germany and Switzerland, which is measured using the variable fee approach
(VFA). Where applicable, the disaggregation method is discussed separately for the life insurance portfolios and the non-life
insurance portfolios.
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Financial Report
12.1.5 Non-life insurance contracts and the premium allocation approach
Generally, all standardised non-life products contain sufficient insurance risk to be classified as insurance contracts under
IFRS 17. The Baloise Group has created the following portfolios for this business:
● Motor – third-party liability
● Motor – comprehensive
● General liability – personal
● General liability – commercial
● Accident (compulsory accident insurance)
● Accident – other
● Health
● Property – personal
● Property – commercial
● Marine
● Other
Premium allocation approach (PAA) - scope of the PAA
IFRS 17 gives entities the option to simplify the measurement of the liability for remaining coverage (LRC) for certain contracts.
This simplification, also known as the premium allocation approach (PAA), can generally be used for all GICs in which all
contracts – taking account of the contract boundary pursuant to IFRS 17 – have a coverage period of one year or less.
A contract’s coverage period is the period during which the contract guarantees insurance cover and other services.
This criterion is satisfied for most of the non-life business, either because the contracts have a one-year term or because
the contract boundary of the contracts that, in legal terms, are multi-year contracts, is one year. This is usually the case
when the Baloise Group has a right to adjust the premiums at the end of each year.
The PAA may also be used for all GICs where the PAA would produce a measurement of the LRC that would not be
materially different to the measurement under the general measurement model (GMM).
The Baloise Group uses the PAA for all non-life contracts that satisfy at least one of the aforementioned criteria.
If, as a result of a portfolio transfer or the acquisition of a company, the Baloise Group takes on obligations relating to claims
already incurred, the cover provided consists of settlement of the claims, which means that the coverage period for these
claims equates to the expected remaining settlement period.
Impact of the premium allocation approach
The PAA has no fundamental impact on the classification, initial recognition and derecognition of contracts or on the
separation of components and embedded derivatives. In the Baloise Group, the measurement of claims incurred is also
identical for PAA contracts.
However, the measurement of the liability for remaining coverage (LRC) does differ materially. Starting with the premiums
received and upon initial recognition of a GIC, the LRC is measured as
● any premiums received at the time of initial recognition, minus
● any insurance acquisition cash flows paid before the time of initial recognition, plus
● any adjustment of the liability based on the test, described below, for ascertaining whether contracts are onerous.
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Financial Report Under the PAA, the LRC is subsequently measured as:
● the amount of the LRC at the beginning of the period, plus
● any premiums received in the period, minus
● any insurance acquisition cash flows paid in the period, minus
● the share of the deferred premiums that were recognised in the period as insurance revenue, plus
● the share, recognised in insurance service expenses, of the period for insurance acquisition cash flows, plus
● the interest adjustment for any financing component in the LRC, plus or minus
● the change in any adjustment of the liability on the basis of the onerous contract test.
All changes to a loss component are recognised immediately, and exclusively, in insurance service expenses.
Onerous contract test
The Baloise Group has defined certain indicators that determine when a GIC measured using the PAA must be checked
to test whether it is onerous. To this end, the Baloise Group compares the part of the LRC that is based only on deferrals
of premiums paid and insurance acquisition cash flows paid with the GIC’s fulfilment cash flows that are expected
for the coverage still to be provided. If the expected net payments calculated in this way are higher than the LRC, the
deferral of insurance acquisition cash flows is released to profit or loss and then, if necessary, the LRC is increased by a
loss component in the amount of any remaining difference, such increase being recognised in profit or loss. Contracts
in respect of which a loss component has to be recognised at the time of initial recognition are assigned to a GIC for
onerous contracts.
Measurement of the liability for incurred claims
The liability for incurred claims (LIC) is recognised for all claims that were incurred up to the measurement date, irrespective
of whether they have been reported or not. The liability is calculated as the risk-adjusted present value of the best estimate
of the outstanding claim payments and claim settlement costs. A CSM is never recognised for the LIC because expected
profits are accrued only for the remaining coverage.
Payment estimates
To calculate the expected nominal values of the payments 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 the knowledge of the experts entrusted with the handling of claims.
The expected claim payments consist of three components. The basis is formed by the reserves calculated using
actuarial methods. The second component comprises reserves for those complex special cases and events that are not
subject to purely statistical evaluation. These are generally rare claims that are fairly atypical of the sector concerned
and are usually large claims whose costs have to be estimated by experts on a case-by-case basis. The third component
consists of payments for annuities that are projected using actuarial principles, such as assumptions about mortality, and
are largely derived from claims in the motor, liability and accident insurance portfolios. To supplement the various internal
control mechanisms, the Baloise Group has the reserves – and the methods used to calculate them – reviewed regularly
by external specialists.
Discounting
The Baloise Group discounts the liability for incurred claims using discount rates that are consistent with the currency and
maturity of the expected claims, reflecting the fact that nominal values are estimated for the cash flows. The Baloise Group
uses the discount rates shown in the tables in note 12.1.4.
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Financial Report For the entire non-life business, the Baloise Group disaggregates the total change in the liability for incurred claims resulting
from discounting effects into a share recognised in profit or loss and a share recognised in other comprehensive income.
The share of the financial effects recognised in profit or loss is determined – as per recognition at amortised cost – on the
basis of the discount rates applicable at the time that the claim is incurred.
Risk adjustment for the liability for incurred claims
The settlement of obligations relating to claims incurred is subject to uncertainty regarding the amount and timing of the
payments to be made. This uncertainty is of a non-financial nature, so the Baloise Group recognises a risk adjustment as
an additional component of the measurement of the LIC. It calculates the amount of the risk adjustment by referring to the
historical volatility of claim estimates in its portfolios and, where necessary due to the non-availability of data, by referring
to data for comparable portfolios. The amount of the risk adjustment for the liability for incurred claims corresponds to the
consolidated risk adjustment with a 75 per cent confidence level.
The risk adjustment is updated for each contract entered into. Changes to the risk adjustment for claims incurred are
generally recognised in profit or loss. For those GICs for which the Baloise Group disaggregates the entire change resulting
from interest effects between profit or loss and other comprehensive income, the effect of changes in interest rates on the
measurement of the risk adjustment is also shown in other comprehensive income.
Non-life contracts measured using the GMM
Contracts for non-life insurance are measured using the GMM if they do not satisfy the criteria for the PAA. For these contracts,
the Baloise Group uses the GMM rules (described above), including the definition of the coverage units.
Transition for non-life insurance contracts
For first-time adoption, the Baloise Group used the full retrospective approach to measure virtually all non-life insurance
contracts, i. e. measurement at the transition date was based entirely on historical application of IFRS 17 since acquisition
of the contracts. This affects not only business entered into by the Baloise Group itself but also all portfolios acquired as a
result of acquisitions (business combinations) or portfolio transfers from the date of transfer.
12.1.6 Life insurance contracts
For its life insurance business, the Baloise Group forms the following portfolios as the basis for determining the groups of
insurance contracts (GICs):
● Endowment life insurance and pure whole-life insurance
● Annuities
● Disability insurance
● Unit-linked contracts
● Hybrid products, i. e. products that have both features of unit-linked insurance and features of traditional endowment
insurance
● Investment contracts with DPF
● General group insurance
● Swiss group insurance for semi-autonomous funds
● Swiss group insurance purely with risk coverage
● Other life business
For the measurement of all life insurance contracts, the following aspects are significant in addition to the GMM-based
standard approach described above.
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Financial Report Cash flows and underlying items
In many life insurance contracts, the level of the policyholder benefits depends on the performance of certain underlying
items, such as the surpluses of a particular portfolio or legal entity or the returns on clearly defined investments. A material
portion of these payments is often granted in the form of participation features, and the Baloise Group has some degree of
discretion in deciding when and in what amount payments are made. Depending on how the product is structured, such
benefits may be combined with guaranteed benefits.
The projection of all cash flows for life insurance contracts takes all relevant influencing factors into account including,
but not limited to, mortality, invalidity rates, policyholder behaviour, changes in costs and the possible courses of action
open to senior management in certain scenarios. The Baloise Group determines these assumptions on the basis of its own
statistics, supplemented in some cases by industry-specific or other external information and trends (e. g. mortality improve-
ments, inflation). The Baloise Group uses stochastic models for assumptions without symmetrical distribution around their
expected value and for cash flows that do not respond to changes in variables in a non-linear fashion.
Discounting of payments
The assumptions for projecting the performance of investments that affect insurance contract payments are consistent
with the discount rates that are used to discount these payments and that thus take account of the financial risk in these
payments. To this end, the Baloise Group uses a risk-neutral approach that also includes the measurement of options
and guarantees.
Risk adjustment
For all life insurance contracts, the risk adjustment is applied as an increase to the cash flows that have been discounted on
a risk-neutral basis. To do so, the Baloise Group determines – at the level of the strategic business unit – the most probable
combination of all simultaneous movements in all non-financial parameters, such as mortality, policyholder behaviour and
future costs, that correspond to a value at risk with a confidence level of 75 per cent. Using this combination of parameter
movements, the risk adjustment is determined for each GIC as the difference between the discounted cash flows with the
expected assumptions and the discounted cash flows with the adjusted assumptions.
Coverage units
The Baloise Group determines the coverage units for all life insurance contracts using a consistent approach: For each
GIC, the future benefits for the granting of insurance cover, guaranteed investment returns and other investment services
are measured and weighted using suitable metrics. In this process, the Baloise Group takes account of both guaranteed
benefits and benefits arising from expected participation features. The present value of these benefits forms the coverage
unit at each measurement date. To calculate the present value, the same assumptions as for determination of the ful-
filment cash flows are used. However, for GICs measured using the GMM, the discount rates applicable at the time of initial
recognition of the GIC are used to ensure consistency in the measurement of the CSM.
Recognition of insurance finance income or expenses
For life insurance contracts measured using the general measurement model, there is also an option for each portfolio to
disaggregate the total change in the liability for insurance contracts resulting from financial effects into a share recognised
in profit or loss and a share recognised in other comprehensive income.
For those PICs in life insurance that the Baloise Group measures using the general measurement model and for which it
exercises the option, the share of the insurance finance income or expenses to be recognised in profit or loss is dependent
on how the payments to policyholders are determined. Typically, the payments to policyholders are determined on the basis
of expected crediting rates and, in these cases, the Baloise Group applies the actual amounts credited and the amounts
expected to be credited in future. The share recognised in profit or loss is based on the internal interest rate method only
in exceptional cases.
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Financial Report Contracts with direct participation features and the variable fee approach (VFA)
Contracts with direct participation features
The Baloise Group classifies insurance contracts that satisfy each of the following three criteria as contracts with direct
participation features:
● The contractual terms specify that the policyholders participate in a clearly identified pool of underlying items.
For the purposes of this definition, participation does not prevent the entity from exercising discretion regarding
the payment of certain amounts, but the policyholders must be able to enforce their right.
● Based on best estimates at the time of initial recognition of the contracts, the Baloise Group expects to pay to the
policyholders an amount equal to a substantial share of the fair value returns on the underlying items.
● At the time of initial recognition of the contracts, the Baloise Group expects – based on its best estimates – that a
substantial proportion of the total amounts to be paid to the policyholders will vary in line with the change in the
fair value.
Generally, investment contracts with DPF satisfy the definition of a contract with direct participation features. Nonetheless,
these are different concepts for different aspects of contract classification.
In the Baloise Group, the following contracts within the scope of IFRS 17 are classified as contracts with direct participation
features:
● Unit-linked, index-linked and investment-linked contracts
● Swiss group life business
● Other individual life insurance with participation features in Switzerland
● Traditional German life insurance with participation features
Variable fee approach
For contracts with direct participation features, a modified version of the general measurement method must be used that is
also known as the variable fee approach (VFA). In contrast to the premium allocation approach, use of the VFA is mandatory.
Measurement of the risk-adjusted present value of all future payments (fulfilment cash flows) is unaffected and is thus
carried out in the same way as for the general measurement model. The modifications to the measurement method there-
fore only affect the measurement of the contractual service margin:
● The share of changes to the expected payments for future coverage that are attributable to changes in the fair value
of the underlying items is not recognised as an adjustment of the CSM but rather is recognised in the same way as
the change in the fair value of the underlying items.
● However, all other changes in the fulfilment cash flows for remaining coverage – particularly benefits based on
options and guarantees – are generally offset against the CSM, although the CSM is – contrary to the GMM – adjusted
on the basis of current market interest rates. The explicit accretion of interest on the CSM is thus not carried out for
the variable fee approach.
There are no further differences to the measurement approach under the GMM. For VFA contracts, this particularly includes
the following. In the event of an increase in the fulfilment cash flows that are offset against the CSM and exceed the amount
of the CSM, a loss component has to be recognised for the GIC. Any subsequent changes to the cash flows are initially offset
against this loss component before a CSM can be recognised for the GIC again. A positive CSM amount is released per GIC
at the end of the period using suitable coverage units, as described above.
Book yield approach
For contracts with direct participation features, there is also the option to disaggregate the entire change in insurance
contract measurement resulting from market effects, recognising a share in profit or loss and a share in other comprehen-
sive income.
Where this option is exercised for contracts that have direct participation features and for which the Baloise Group holds
the underlying items that affect their performance, the Baloise Group uses the book yield approach, in which it determines
the share recognised in profit or loss of the total change in the insurance contract liability resulting from market influences
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Financial Report as precisely the opposite amount of the share recognised in profit or loss of the changes in the fair value of the underlying
items resulting from market influences. All other shares of insurance finance income and expenses are recognised in other
comprehensive income.
The Baloise Group uses the OCI option only for contracts with direct participation features in Germany and Switzerland.
Transition for life insurance contracts
For the first measurement of life insurance contracts in accordance with IFRS 17, the Baloise Group first identified – separately
for each unit that operates life insurance business – the earliest point in time in the past from when all the information
was available for all contracts to be able to apply the full retrospective approach from this point in time. For contracts that
were initially recognised before this time, the Baloise Group determined the necessary data for periods lying further back
in the past on the basis of the modified retrospective approach or the fair value approach.
For the modified retrospective approach, Baloise uses any available assumptions and information that would be
applicable to the full retrospective approach. This applies, in particular, to the updating of the CSM and loss component.
For parts of portfolios that are measured using the fair value approach, the Baloise Group applies the principles of IFRS 13
Fair Value Measurement to the insurance contracts.
12.1.7 Reinsurance
Reinsurance contracts are insurance contracts between insurance companies and/or reinsurance companies. There must
be a transfer of significant insurance risk for a transaction to be recognised as reinsurance; otherwise, the transaction is
treated as a financial contract.
Inward reinsurance is any transaction in which the Baloise Group is the risk-taker. It is recognised, measured and presented
on the basis of exactly the same rules as for any other risks taken on directly.
Outward reinsurance is the business ceded to insurance companies outside of the Baloise Group and includes trans-
actions ceded from direct life and non-life business and from inward reinsurance. The general recognition and measurement
rules in IFRS 17 vary for this type of risk cession in a number of aspects. All references to reinsurance in the rest of this note
therefore relate solely to outward reinsurance held.
Initial recognition and formation of groups
The timing of the initial recognition of a reinsurance contract varies depending on the type of reinsurance:
Generally, the reinsurance contract is recognised on the date on which its coverage begins, but no later than the date
on which an onerous GIC is recognised if the reinsurance contract was not entered into after this date. Furthermore, Baloise
recognises reinsurance contracts that provide proportionate coverage no earlier than when the reinsured business is
recognised.
In the same way as for gross business, outward reinsurance contracts are divided into groups of insurance contracts
(GICs). These are formed independently of the GICs used in business underwritten by the Baloise Group itself.
The netting of gross business and reinsurance business is prohibited.
For measurement purposes, a distinction is made between two types of outward reinsurance. Retroactive reinsurance
refers to the subsequent signing of a reinsurance contract for claims already incurred in gross business. The purpose of
such cover is, for example, to protect against uncertainty about the remaining settlement of a portfolio of claims already
incurred. Prospective reinsurance is when claims not yet incurred in gross business are reinsured.
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Financial Report Measurement of outward reinsurance
Outward reinsurance is generally measured using the same approaches as for gross business. The Baloise Group uses the
PAA for all GICs of reinsurance contracts that satisfy the criteria for the PAA. Reinsurance contracts cannot be classified as
contracts with direct participation features, which is why the variable fee approach cannot be used.
Cash flows and discounting
The expected cash flows for reinsurance – including reinsurance premiums ceded and the expected reimbursements from the
reinsurer – are updated at each measurement date. The Baloise Group determines these expected payments consistently
based on expectations for the reinsured business, taking account of the specific contract boundaries for ceded business.
In this context, the Baloise Group distinguishes between payments that depend directly on claims in the reinsured business
and all other payments.
In addition, the expected payments are adjusted directly for the risk of non-performance by the reinsurer in order to take
account of the risk that the Baloise Group does not receive the reimbursement expected from the reinsurer. When recognising
the risk of non-performance, the Baloise Group takes account of any collateral provided by the reinsurer. Changes in the
measurement of the claims against the reinsurer resulting from changes in the estimate of non-performance risk are not
offset against any CSM. Instead, they are recognised directly in profit or loss, under insurance finance income or expenses.
Discount rates are chosen using the same approaches as for gross business, without any adjustment.
Risk adjustment
The Baloise Group determines the risk adjustment for outward reinsurance as a reduction of the risk in gross business
resulting from reinsurance. The risk adjustment thus increases the measurement of the claims against the reinsurer.
The reduction is determined pro rata on the basis of the risk adjustment for the ceded business in proportion to the
reinsurance’s share of the risk transfer.
Contractual service margin
Upon initial recognition of groups of reinsurance contracts, the Baloise Group always recognises a CSM in an amount that
means that initial measurement results in neither an asset nor a liability. In contrast to gross business, this may result in a
CSM both for positive and for negative expected fulfilment cash flows, and a loss component is never recognised.
Subsequent measurement of the CSM of a group of reinsurance contracts is based on the balance brought forward,
essentially in the same way as for contracts in gross business that are measured using the GMM. In particular, the Baloise
Group also identifies coverage units for groups of reinsurance contracts. These coverage units are used to determine the
release of the CSM to profit or loss.
Contrary to the process described above, the Baloise Group recognises expected losses immediately upon initial recog-
nition of retroactive reinsurance contracts. Profits expected at the time of initial recognition must also be accrued in a CSM;
for subsequent measurement, the general rules for updating the CSM for reinsurance apply.
The measurement of reinsurance contracts is also adjusted if a loss component has to be recognised for the reinsured
business. In this case, the Baloise Group calculates the percentage of the losses in gross business that are covered by rein-
surance and, for the reinsurance contracts, recognises a loss recovery component (LORECO) in the amount of the reinsured
share of the loss component.
The LORECO increases the measurement of the claim against the reinsurer, and each change to the LORECO is shown
as part of the insurance service result for reinsurance.
Reinsurance transition
The measurement of reinsurance claims on the IFRS 17 balance sheet is subject to the same general principles as for gross
business.
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Financial Report Interim financial reporting
The Baloise Group reverses previous accounting estimates set out in the interim financial reporting in relation to the meas-
urement of contracts in the scope of IFRS 17 for subsequent reporting in the same financial year.
Investments and financial liabilities
12.2
The term “investments” is used in the financial report for the sake of clarity. Investments encompass both investment property
and financial assets. Financial assets consist of financial instruments with characteristics of equity, financial instruments
with characteristics of debt, mortgages, loans, derivatives (assets), cash and cash equivalents, and receivables.
Financial liabilities consist of liabilities arising from financial contracts, derivatives (liabilities) and other financial liabilities.
Investment property
12.2.1
Investment property comprises land and/or buildings held to earn rental income or for capital appreciation (or both).
If mixed-use properties cannot be divided into owner-occupied property and property used by third parties, the entire prop-
erty 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 differ-
ence is recognised directly in equity as other comprehensive 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.
12.2.2 Financial assets
A distinction is made between investments for own account and at own risk on the one hand and investments for the account
and at the risk of customers and third parties on the other. Investments for the account and at the risk of customers and
third parties are assets from premiums for unit-linked or investment-linked life insurance contracts in which policyholders
themselves bear the investment risk in accordance with the investment objectives. Accordingly, and in contrast to invest-
ments for own account and at own risk, the Baloise Group has no rights in respect of these investments. The associated
liabilities resulting from investments for the account and at the risk of customers and third parties are recognised under
“Liabilities arising from financial contracts” on the equity and liabilities side of the balance sheet.
The following asset classes are reported as financial instruments with characteristics of equity: shares, units in equity
funds, mixed funds, real estate funds, bond funds, money market funds 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 debt.
Financial instruments with characteristics of debt predominantly encompass securities such as bonds and other fixed-
income securities. They are usually interest-bearing and are issued for a fixed or determinable amount.
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Financial Report Mortgages and loans are financial instruments with fixed or determinable payments and are generally not traded in an
active market, with the exception of registered bonds and promissory notes that are actively traded in the market.
Derivatives are swaps, futures, forward contracts, options, etc. 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.
Cash and cash equivalents essentially comprise cash on hand, demand deposits and cash equivalents. Cash equivalents
are predominantly short-term liquid investments with residual terms of no more than three months.
Recognition and measurement
IFRS 9 Financial Instruments uses two criteria to classify financial assets and their measurement:
● Business model
● Characteristics of the contractual cash flows
The business model indicates how the entity manages its financial assets in order to generate cash flows:
● By collecting contractual cash flows (the cash flows are predominantly from interest payments and capital
repayments – ‘held to collect’)
● By selling financial assets (the cash flows are predominantly from the purchase and sale of assets – ‘trading
and other’)
● A combination of the two models described above (‘held to collect and sell’)
Another criterion to be applied in the classification of financial assets is whether the contractual cash flows are solely
payments of principal and interest (SPPI). In this model, interest primarily means consideration for the time value of money,
consideration for credit risk and a profit margin. Interest is recognised using the effective interest method.
Based on an analysis of the business model and the nature of the contractual cash flows, a financial asset is allocated to
one of the three categories upon initial recognition and subsequently measured accordingly:
● At amortised cost (AC)
● At fair value through other comprehensive income (FVOCI)
● At fair value through profit or loss (FVPL)
All regular purchases of financial assets are recognised on the trade date.
Upon initial recognition, all financial assets are measured at fair value irrespective of the category. With the exception of
financial assets measured at fair value through profit or loss (FVPL), the transaction costs are part of the acquisition costs.
Amortised cost (AC)
A financial asset is measured at AC if it satisfies both of the following criteria:
● It is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows
(‘held to collect’)
● It satisfies the SPPI criterion
The Baloise Group acquires fixed-income bonds (financial instruments with characteristics of debt) and issues held-to-ma-
turity mortgages and loans in order to collect contractual interest payments. These instruments also satisfy the SPPI
criterion. Receivables, cash and cash equivalents held by the Baloise Group are also recognised at AC and are generally
carried at their nominal amount.
These financial assets are measured by applying the effective interest method to the amortised cost (gross carrying
amount) and by recognising a loss allowance in profit or loss in the amount of the expected credit loss (ECL). The note
“Impairment losses on financial assets (expected credit losses)” below provides information about the basis of measure-
ment for determining the amount of the expected credit loss.
Currency translation effects on these items are also recognised in profit or loss.
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Financial Report Fair value through other comprehensive income (FVOCI)
A financial asset is measured at FVOCI if it satisfies both of the following criteria:
● It is held within a business model whose objective is both to collect contractual cash flows and to sell financial assets
(‘held to collect and sell’)
● It satisfies the SPPI criterion
The Baloise Group acquires debt instruments (primarily bonds), registered bonds and promissory notes for the purpose of
asset/liability management, i. e. to collect the contractual cash flows and/or to sell the financial assets. The financial assets
in this portfolio are therefore measured at FVOCI, provided that they also satisfy the SPPI criterion.
Currency translation effects of financial instruments measured at fair value through other comprehensive income and
the interest element calculated using the effective interest method are recognised in profit or loss. Any other changes in fair
value, however, are recognised in other comprehensive income. The expected credit loss is also recognised in other compre-
hensive income and does not reduce the carrying amount of the financial instrument. When such financial instruments are
sold, the cumulative gains and losses recognised in other comprehensive income are transferred to the income statement.
Fair value through profit or loss (FVPL)
● Mandatorily measured at FVPL: All financial instruments that do not satisfy the SPPI criterion and/or are not held in a
‘held to collect’ business model or in a ‘held to collect and sell’ business model are measured at FVPL. Changes in fair
value are recognised in profit or loss as realised gains and losses on investments.
The Baloise Group uses this measurement model for its trading portfolios and for financial instruments with
characteristics of equity, provided that the option to measure them at FVOCI has not been exercised. Derivatives
are included in this measurement category if they do not qualify as a hedge under IFRS. This is also the case even
if they have a hedging function under the Baloise Group’s hedging rules. Both positive and negative replacement
costs for derivatives are recognised at fair value on the balance sheet.
● Designated as measured at FVPL: An entity may, upon initial recognition, irrevocably designate financial instruments
as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains
and losses on them on different bases. The Baloise Group primarily exercises this option in respect of financial
assets used to satisfy obligations under life insurance contracts.
Mortgages and loans held as part of a fair value hedge are designated as at FVPL. These portfolios are
measured using a present value method (yield curve).
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Financial Report
FVOCI option (fair value through other comprehensive income)
Financial instruments with characteristics of equity are generally measured at fair value through profit or loss. At the level
of the individual instrument, however, an entity may irrevocably elect, upon initial recognition, to recognise subsequent
changes in the equity instrument’s fair value in other comprehensive income, provided that the financial asset is not held
for trading (FVOCI option).
The Baloise Group exercises this option for equities in the non-life business. All other financial instruments with charac-
teristics of equity – including those held for trading – are measured at fair value through profit or loss.
Where financial instruments with characteristics of equity are measured at fair value through other comprehensive
income, the gains and losses on changes in the fair value of these instruments are recognised in other comprehensive
income. When these financial instruments are sold, the cumulative gains and losses recognised in other comprehensive
income remain in equity and are transferred directly to retained earnings. Dividend income from these financial instruments
is recognised in profit or loss.
Hedge accounting
At the time the contract is entered into, a derivative is classified either as a hedging instrument for the fair value of an
asset or liability (fair value hedge), as a hedge for future transactions (cash flow hedge), as a hedge of a net investment in
a foreign operation or – if it does not satisfy the criteria to qualify as a hedge – as a trading instrument (FVPL).
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 when the contract is entered into.
Derivatives that no longer qualify as a hedge are reclassified as trading instruments.
● Fair value hedges: When the effective portion of a hedge is being accounted for, changes in the fair value of deriva-
tives classified as fair value hedges are reported in the income statement together with the hedged portion of the fair
value of the asset or liability concerned. The ineffective portion of the hedge is recognised separately in the income
statement.
● Cash flow hedges: When the effective portion of a hedge is being accounted for, changes in the fair value of
derivatives classified as cash flow hedges are recognised directly in equity. The amounts reported in equity under
other comprehensive income are taken to the income statement at a later date in line with the hedged cash flows.
The ineffective portion of the hedge is recognised in the income statement.
If a hedging instrument is sold, terminated or exercised or if it no longer qualifies as a hedge, the cumulative
gains and losses continue to be recognised directly in equity until the forecast transaction occurs. If the forecast
transaction is no longer expected to occur, the cumulative gains and losses recognised in equity are transferred
to the income statement.
● Hedges of a net investment in a foreign operation: Hedges of a net investment in a foreign operation are accounted
for in the same way as cash flow hedges. The portion of the gain or loss on the hedging instrument that is determined
to be an effective hedge is recognised directly in equity; the ineffective portion is recognised in profit or loss.
The gain or loss recognised in equity is reclassified to the income statement upon the partial or full disposal of
the foreign operation.
Structured products
Structured products are financial instruments (assets or liabilities) that contain embedded derivatives in addition to the
host contract. 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 separated
from the host contract and is recognised, measured and disclosed separately. If the derivative and the host contract are
not separated, the structured product is designated as a host contract recognised at fair value through profit or loss.
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Financial Report
Quoted market prices
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, the 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 and the prevailing market situation.
Derivatives are measured using publicly quoted prices or on the basis of models. 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, 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, they are measured using
prices quoted by independent third-party providers.
A detailed description of fair value measurement and the related disclosures can be found in the note on fair value
measurement.
Securities financing transactions
Cash outflows from reverse repurchase (repo) transactions are offset by corresponding receivables. The financial assets
received as collateral from the transaction are not recognised. The relevant transaction is recognised on the balance sheet
on the settlement date.
Financial assets transferred as collateral under repurchase agreements continue to be recognised as financial assets.
The cash inflows are offset by corresponding liabilities. The securities provided as cover for repos and reverse repos are
measured on a daily basis at their current fair values.
The Baloise Group engages in securities lending only. Securities lending transactions may give rise to credit risk. Collat-
eral is requested in order to hedge this credit risk by more than covering the underlying value of the securities that are
being lent (mainly bonds). The value of the counterparty’s collateral is regularly measured in order to minimise the credit
risk involved. Additional collateral is immediately requested if this value falls below the value of required cover. The Baloise
Group retains control over the securities throughout the term of its lending transactions, so it continues to recognise these
financial instruments as financial assets on its balance sheet. The income received from securities lending is recognised
in profit or loss.
12.2.3 Impairment losses on financial assets (expected credit losses)
The impairment principles in IFRS 9 are applied to financial instruments measured at amortised cost (AC) or at fair value
through other comprehensive income (FVOCI), receivables (including rent receivables), lease receivables and off-bal-
ance-sheet loan commitments and financial guarantee contracts.
Under IFRS 9, expected credit losses (ECL) must be measured in a way that reflects the time value of money and an
unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes. The method
of measurement must also take appropriate account of all available information about past events, current conditions
and forecasts of future conditions.
Information about past events is used to analyse changes in credit quality between the start of the contract term and
the current assessment date. Forward-looking information examines credit quality in the subsequent year and up to the
end of the contract term. This expected change in credit quality is determined using macroeconomic factors. In particular,
the analysis looks at macroeconomic and financial market indicators to determine whether the expected probability of
default in the subsequent year has increased significantly compared with the initial estimate at the time of initial recognition.
Segmentation based on product type and collateral type is carried out for the ECL calculation. In addition to reducing
complexity, this segmentation helps to ensure that the specific risks of the financial instruments in question are classified in
homogeneous groups and that the relevant parameters for the ECL calculation are defined accordingly and are available
in the system. From a conceptual perspective, the same criteria and parameters are always used across a homogeneous
segment.
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Financial Report The expected credit losses are a probability-weighted estimate of credit losses within twelve months of the balance sheet
date or over the expected life of the financial instrument, i. e. the weighted average of credit losses, with the weighting
based on the respective credit risks. To estimate expected credit losses, the Baloise Group evaluates a range of possible
outcomes in order to obtain an unbiased and probability-weighted amount. Although there is no need to identify each
individual possible scenario, the probability that a credit loss will occur must always be taken into account, irrespective
of its probability of occurrence. A probability-weighted estimate is not the same as a single estimate of the worst-case
scenario, the best-case scenario or the most probable outcome.
A Group-wide approach is used to model the ECL.
Expected credit losses are generally measured on the basis of four components:
● Probability of default (PD)
● Exposure at default (EaD)
● Loss given default (LGD)
● Discount rate (based on the effective interest rate of the relevant position)
To calculate the ECL, the four components are multiplied:
ECL = PD x EaD x LGD x discount factor
Examples of the factors used by the risk management function to model the probabilities of default for the mortgage
portfolio:
● Change in gross domestic product
● Movement in interest rates
● Change in the unemployment rate
● Change in the house price index
The modelling of the probabilities of default for the bond portfolio draws on credit spread forecasts; in the case of receiv-
ables, the historical probability of default is adjusted on the basis of an expert evaluation.
The (average) expected loss is recognised in the income statement when the transaction is entered into. At the balance
sheet date, all affected positions are assigned to one of the following three stages on the basis of the change in the coun-
terparty’s credit quality:
● Stage 1 (performing)
● Stage 2 (underperforming)
● Stage 3 (non-performing)
Stage 1 (performing)
As a rule, all positions are assigned to stage 1 (performing) upon initial recognition unless the counterparty is already in
default. For these assets, the twelve-month ECL must be calculated and recognised. This is the portion of the expected
credit losses that result from default events that are expected within the twelve months after the balance sheet date,
provided that the credit risk has not increased significantly since initial recognition.
Determination of a significant increase in credit risk
If credit risk increases significantly, the position must be classified as underperforming. The assessment of whether credit
risk has increased significantly is carried out on the basis of the following factors:
● Quantitative criteria: The starting point is a comparison of credit risk over the residual life at the time of initial recog-
nition and at each balance sheet date. On this basis, criteria are defined that are indicative of a significant increase
in credit risk.
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Financial Report
● Qualitative criteria: Determination of the quantitative criteria must also take qualitative criteria into account. These
criteria are used in-house to identify insolvency or a higher probability that a counterparty will become insolvent or
that the credit risk will remain elevated for the foreseeable future.
● Backstop indicators: A safety threshold (backstop) is applied in which contractual payments that are more than 30
days past due in stage 2 (90 days in stage 3) constitute a significant increase in credit risk.
Stage 2 (underperforming)
The Baloise Group recognises a loss allowance in the amount of the lifetime expected credit losses for financial assets
whose credit risk is assumed to have increased significantly since initial recognition. This requires the ECL to be calculated
on the basis of the lifetime probability of default, the lifetime loss given default and the lifetime exposure at default, which
represents the probability of default for the residual term of the financial asset. The loss allowance for credit risk is higher
in this stage because the credit risk increases and the effects of a longer horizon than the twelve months used in stage 1
are taken into account.
Stage 3 (non-performing)
Assignment to stage 3 is carried out only where a loss event has effectively occurred. For financial assets that are
classified as in default, a loss allowance is recognised in the amount of the expected credit losses, taking account
of a probability of default of 100 per cent based on the cash flows expected to be achieved from the asset. Financial
assets that are already impaired upon initial recognition on the balance sheet are categorised within stage 3
with a carrying amount that reflects the lifetime expected credit losses (purchased or originated credit-impaired financial
assets (POCI assets)).
In the event of assignment to stage 3, a loss allowance is recognised manually in the amount of the expected default,
based on information about the loss event. A model is used to calculate the ECL for mortgage loans in stage 3. For finan-
cial instruments with characteristics of debt in stage 3, the ECL is not calculated using a model. Instead, suitable experts
estimate the lifetime ECL.
Criteria for reversals of impairment losses
A financial instrument is reassigned from stage 2 to stage 1 if the above-mentioned qualitative and quantitative criteria
are no longer met and the position has been regularly serviced again for at least 180 days. A financial instrument is reas-
signed from stage 3 to stage 1 if all of the necessary criteria for this transfer are satisfied and the position has been regularly
serviced again for at least 360 days and no loss allowances have been recognised. There are no circumstances in which
instruments are reassigned from stage 3 to stage 2. If an impairment loss is reversed, the position is transferred directly to
stage 1 once the necessary conditions have been met.
Option for financial instruments with low credit risk
For bonds (including accrued interest), promissory notes and time deposits, the low credit risk exemption provided as an
option under IFRS 9 is applied. Under this exemption, all investment-grade financial instruments are assigned to stage 1.
These include non-speculative investments where there is a high probability that the outstanding receivable can be repaid
and the credit risk is therefore low.
Simplified approach under the impairment model
The simplified approach is generally used for all rent receivables. These are usually of a short-term nature and therefore do
not contain a significant financing component. The short-term nature of the receivables means that the expected twelve-
month credit loss equals its lifetime expected credit loss, making a transfer from stage 1 to stage 2 irrelevant. Consequently,
the expected credit loss for the residual life of the receivable is calculated for all rent receivables that are not past due.
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Financial Report Recognition of loss allowances on the balance sheet
On the balance sheet, the loss allowance for debt instruments measured at AC is deducted from the asset. For debt instru-
ments measured at FVOCI, the loss allowance is recognised in other comprehensive income (equity) and therefore does
not reduce the carrying amount of the asset on the balance sheet. This ensures that the carrying amounts of these assets
are always equal to their fair value. The gross carrying amount of a financial asset is reduced if it is no longer reasonable
to assume that it will recover, i. e. the outstanding receivable is no longer considered collectible or is cancelled. The timing
of the write-off is determined individually on a case-by-case basis as soon as there is no longer any reasonable prospect
of recovery. Where receivables are backed by collateral, the write-off is recognised only after the forced sale of the pledged
assets, whereby the amount written off represents the remaining amount not covered by the collateral.
12.2.4 Revenue recognition
Interest income
Interest income from financial instruments that are not measured at fair value through profit or loss is recognised using
the effective interest method. The calculation of interest income depends on the stage of the impairment model to which
the financial instrument has been assigned.
In stages 1 and 2, there is no link between recognition of interest and impairment. The interest income is therefore calcu-
lated on the gross carrying amount (without deduction of the loss allowance). If a financial asset is assigned to stage 3,
the interest income is calculated on the amortised cost of the financial asset (i. e. the gross carrying amount less the loss
allowance) and not on the gross carrying amount.
Dividend income
Dividend income from financial assets is recognised in profit or loss as soon as a legal entitlement to receive payment arises.
12.2.5 The Baloise Group as a lessor
Investment property let on operating leases is reported as investment property on the consolidated balance sheet.
12.2.6 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.
12.2.7 Liabilities arising from financial contracts
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 acqui-
sition 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.
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.
Financial liabilities
12.3
Financial liabilities include not only bonds issued in the capital markets but also lease liabilities.
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Financial Report 12.3.1 Outstanding bonds
Outstanding bonds are measured at their acquisition cost (fair value) at initial recognition. Acquisition cost includes trans-
action 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 effective interest method.
12.3.2 Lease liabilities
The Baloise Group as a lessee
The Baloise Group leases real estate for office space and warehousing. It recognises right-of-use assets for these leases
on its balance sheet. The related lease liability is initially measured at the present value of the lease payments that will
be paid over the lease term, discounted at the lessee’s weighted average incremental borrowing rate. The lease liability is
subsequently measured at amortised cost using the effective interest method, including both an interest component and
a principal component.
The lease liability and the right-of-use asset are recognised at the commencement date. The right-of-use asset is
initially measured in the amount of the initial lease liability, adjusted for any initial direct costs and any incentives granted
by the lessor. The right-of-use asset is depreciated over the shorter of the lease term and the useful life of the underlying
asset. Both the formation of new leases and the termination of existing leases generate non-cash transactions in right-
of-use assets and lease liabilities. On the balance sheet, right-of-use assets are recognised under the “Property, plant and
equipment” line item.
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 on the balance sheet because Baloise has elected to apply the exemption provided in IFRS 16.
Payments for such leases are expensed in the income statement on a straight-line basis over the lease term. The assets
under short-term leases and low-value assets consist of operating equipment, parking spaces and other property, plant
and equipment.
Employee benefits
12.4
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 calculation of defined benefit obligations towards employees requires assumptions to be made about the economic
benefit of assets, future increases in salaries and pension benefits, the discount rate to be applied and other parameters.
The most important assumptions are derived from past experience of making estimates.
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.
12.4.1 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. The Baloise Group’s pension plan agreements are tailored to local conditions in terms of enrolment and the range
of benefits offered.
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.
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Financial Report 12.4.2 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, the Share Participation Plan and the Performance Share Units (PSU) Plan. The PSU Plan 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 (cash or equity-settled).
In addition, FRIDAY Insurance S. A. offers its employees an Employee Stock Option Programme (ESOP), which is an
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 Baloise 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.
Taxes
12.5
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, assumptions are made about the recoverability of these tax assets; these assumptions are based on
the financial track record and future income of the taxable entity concerned.
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.
12.6 Other income statement line items
12.6.1 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.
12.6.2 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.
12.7 Other balance sheet line items
12.7.1 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated
impairment losses. An exception to this are owner-occupied buildings that are designated as underlying items for the
measurement of life insurance contracts (VFA) and thus measured at fair value through profit or loss.
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.
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Financial Report Other items of property, plant and equipment are depreciated on a straight-line basis over the following estimated useful
lives:
● Owner-occupied buildings: 25 to 50 years
● Office furniture, equipment, fixtures and fittings: 5 to 10 years
● Machinery, furniture and vehicles: 4 to 10 years
● Computer hardware: 3 to 5 years
The recoverability and useful life of an item of property, plant and equipment is reviewed at each balance sheet date.
An impairment loss is immediately recognised on the carrying amount of an item of property, plant and equipment if
its recoverable amount falls below its 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.
Information on initial recognition and subsequent measurement of right-of-use assets can be found in note 12.3.2.
Intangible assets
12.7.2
Goodwill
Goodwill represents the excess of an acquiree’s acquisition cost over the fair value of its assets and liabilities plus the acqui-
sition-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 if there are objective indications that goodwill
may be permanently impaired. 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 9.2.
When a new investment is acquired, the date for conducting future impairment tests is fixed and these tests are subse-
quently 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.
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.
Impairment losses on non-financial assets
12.7.3
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. 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.
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Financial Report 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.
12.7.4 Other assets
Other assets encompass various line items, primarily development projects earmarked for subsequent sale (such as
apartments in blocks of apartments with multiple ownership). They 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).
12.7.5 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 note 10.2.5.
12.7.6 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.
Share capital
The share capital shown on the balance sheet represents the subscribed share capital of Baloise Holding Ltd, Basel. This
share capital consists solely of registered shares. No shares carry preferential voting rights.
Capital reserves
Capital reserves include the paid-up share capital in excess of par value (share premium), Baloise Holding Ltd share options
and gains and losses on the sale of treasury shares.
Treasury shares
Treasury shares held either by Baloise 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 Baloise Holding Ltd shares are classified as treasury shares.
Other reserves
This line item includes unrealised gains and losses on changes in the fair value of financial instruments classified as FVOCI,
the effects of cash flow hedges, the effects of hedges of a net investment in a foreign operation, exchange differences and
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Financial Report gains on the reclassification of owner-occupied property as investment property. Cumulative actuarial gains and losses
under defined benefit pension plans are also included in this line item. For portfolios of insurance contracts for which the
Baloise Group recognises measurement effects in other comprehensive income owing to changes in financial assumptions,
this line item contains the cumulative effects of these adjustments.
The related deferred taxes are deducted from the unrealised gains and losses. Any non-controlling interests are also
deducted from these line items.
Retained earnings
Retained earnings include the Baloise Group’s undistributed earnings and its profit for the period. This line item also contains
the gains and losses on financial instruments with characteristics of equity measured at FVOCI that were sold in the
reporting year. When a property, associate or joint venture is sold, the related reserves recognised in other comprehensive
income that cannot be reclassified to the income statement are also reclassified to retained earnings. Dividends paid to
the shareholders of Baloise Holding Ltd are only recognised once they have been approved by the Annual General Meeting.
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.
12.7.7 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 measurement of non-technical provisions requires
assumptions to be made about the probability, timing and amount of any outflow of resources. A provision is recognised
if such an outflow is probable and can be reliably estimated. If the amount of the obligation cannot be estimated with
sufficient reliability, it is reported as a contingent liability.
Long-term equity investments and structure of the Baloise Group
12.8
12.8.1 Subsidiaries
The consolidated annual financial statements comprise the financial statements of Baloise 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.
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Financial Report 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 oper-
ating 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.
12.8.2 Associates and joint ventures
Associates and joint ventures are initially carried at cost (fair value on 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 and joint ventures 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 or the joint venture, no further
losses are recognised. Goodwill paid for associates and joint ventures is included in the carrying amount of the investment.
12.8.3 Structured entities
Structured entities are consolidated provided the criteria for control pursuant to IFRS 10 Consolidated Financial State-
ments 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 Financial
Instruments: Presentation. 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.
12.8.4 Joint arrangements
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, but 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 on the date of acquisition) and thereafter recognises them under the equity method (the Baloise Group’s
share of the entity’s profit or loss for the period and other comprehensive income). In the case of joint operations, the Baloise
Group includes directly in its consolidated financial statements the share of the assets, liabilities, income and expenses of
the joint operation that is attributable to the Baloise Group.
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Financial Report 12.9 Currency translation
12.9.1 Functional currency and reporting currency
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 millions of Swiss francs, which is the Baloise
Group’s reporting currency.
12.9.2 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. 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. Non-monetary items measured at historical cost are measured using historical rates.
Insurance contracts are monetary balance sheet line items.
Exchange differences are generally recognised in profit or loss. The exceptions are exchange differences relating to fair
value through OCI financial instruments, cash flow hedges and hedges of net investments in foreign operations, which are
recognised in other comprehensive income. If effects of insurance finance expenses relating to insurance contracts are
recognised in other comprehensive income, the resulting currency effects are also recognised in other comprehensive income.
12.9.3 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.
12.9.4 Key exchange rates
CHF
1 EUR (euro)
1 USD (US dollar)
Balance sheet
Income statement
31.12.2023
31.12.2022
Ø 2023
Ø 2022
0.93
0.84
0.99
0.92
0.97
0.90
1.00
0.96
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Financial Report Report of the statutory auditor to the Annual
General Meeting of Baloise Holding Ltd, Basel
Please refer to the German version of the Baloise Annual Report 2023, page 250, for the report of the statutory auditor,
Report on the audit of the consolidated financial statements of Baloise Holding Ltd and its subsidiaries (the “Group”). The
auditor’s opinion dated 22 March 2024 is unqualified and confirms that the financial statements give a true and fair view
of the consolidated financial position of the group as at 31 December 2023 in accordance with IFRS accounting standards
and comply with Swiss law.
EY recommends that the consolidated financial statements submitted to the Annual General Meeting of Baloise Holding
Ltd, Basel, be approved.
Please also refer to the disclosure on page 357 “Information on the Baloise Group” referencing the fact that only the German
text of the annual report is legally binding.
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Financial Report Baloise Holding Ltd
Income statement of Baloise Holding Ltd
Balance sheet of Baloise Holding Ltd
Notes to the financial statements of Baloise
Holding Ltd
Appropriation of distributable profit as proposed
by the Board of Directors
Report of the statutory auditor to the Annual
General Meeting of Baloise Holding Ltd, Basel
258
259
260
269
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257
Income statement of Baloise 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
Tax income relating to other periods
Profit for the period
Note
2023
2022
2
3
4
5
6
454.3
41.3
36.4
532.0
– 39.4
– 20.1
– 26.1
– 2.8
– 88.4
432.4
38.5
11.8
482.7
– 44.5
– 6.0
– 19.8
– 3.5
– 73.8
– 0.4
– 1.5
0.7
0.0
443.9
407.3
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Baloise Holding Ltd Balance sheet of Baloise Holding Ltd
CHF million
Assets
Cash and cash equivalents
Receivables from group companies
Receivables from third parties
Other short-term receivables
Current assets
Loans to group companies
Long-term equity investments
Non-current assets
Total assets
Equity and liabilities
Current liabilities
Liabilities to group companies
Liabilities to third parties
Current interest-bearing liabilities to third parties
Deferred income
Non-current liabilities
Long-term interest-bearing liabilities to group companies
Long-term interest-bearing liabilities to third parties
Provisions
Liabilities
Share capital
Statutory retained earnings
General reserve
Reserve for treasury shares
Voluntary retained earnings
Free reserves
Distributable profit:
– Profit carried forward
– Profit for the period
Treasury shares
Equity
Total equity and liabilities
Note
31.12.2023
31.12.2022
7
8
9
10
11
138.3
377.1
0.9
–
516.3
1,199.1
1,993.3
3,192.4
97.0
378.2
7.6
84.0
566.8
1,219.1
1,953.4
3,172.5
3,708.7
3,739.3
5.4
2.2
150.0
10.9
7.6
2.3
225.0
9.4
451.0
637.1
12
1,985.0
1,860.0
0.1
0.9
2,604.6
2,742.3
4.6
4.6
11.7
5.4
11.7
7.8
644.4
573.6
0.1
443.9
– 6.0
1,104.1
13
14
–
407.3
– 8.1
997.0
3,708.7
3,739.3
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Baloise Holding Ltd Notes to the financial statements of Baloise Holding Ltd
1. Accounting Policies
General
These annual financial statements of Baloise 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 Baloise 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 Baloise 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.
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Baloise 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.
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261
Baloise 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
Income from the sale of business
Sundry other income
Total other income
4. Administrative expenses
CHF million
Proportional personnel expenses 1
Other administrative expenses
Total administrative expenses
1 Baloise Holding Ltd has no direct employees. All staff members are employed by Baloise Insurance Ltd, Basel.
5. Financial expenses
CHF million
Impairment losses on loans
Others
Total Financial expenses
6. Interest expenses
CHF million
Interest on bonds
Other interest expenses
Total interest expenses
2023
2022
0.4
38.3
0.2
2.4
41.3
0.4
38.1
0.1
– 0.1
38.5
2023
2022
24.1
12.3
36.4
–
11.8
11.8
2023
2022
– 22.6
– 16.8
– 39.4
– 26.5
– 18.1
– 44.5
2023
2022
– 19.2
– 0.9
– 20.1
– 5.9
– 0.1
– 6.0
2023
2022
– 18.4
– 7.7
– 26.1
– 12.5
– 7.3
– 19.8
262
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263
Baloise Holding Ltd Notes to the balance sheet
7. Receivables from group companies
CHF million
Dividends
Other receivables
Total receivables from group companies
31.12.2023
31.12.2022
366.4
10.7
377.1
368.0
10.2
378.2
The annual general meeting of the following AGMs voted to recognise the dividends receivable for the 2023 financial
year as accrued income:
● 28 February 2024: Baloise Bank AG, Solothurn
● 15 March 2024: Baloise Asset Management AG, Basel and Baloise Asset Management International AG, Basel
● 22 March 2024: Baloise Versicherung AG, Basel and Baloise Leben AG, Basel
● 11 April 2024: Baloise Delta Holding S. à.r.l., Leudelange (Luxembourg)
8. Other short-term receivables
CHF million
Short-term promissory note loans
Total other short-term receivables
9. Loans to group companies
CHF million
Subordinated loans to Baloise Bank AG
Subordinated loans to Baloise (Luxembourg) Holding S. A.
Subordinated loans to Baloise Belgium NV
Subordinated loans to Baloise Vie Luxembourg S. A.
Loans to Baloise (Luxembourg) Holding S. A.
Loans to Baloise Beteiligungen B. V. & Co. KG
Loans to Baloise Sach Holding AG
Total loans to group companies
31.12.2023
31.12.2022
–
–
84.0
84.0
31.12.2023
31.12.2022
90.0
284.6
352.8
65.0
327.4
36.3
43.0
90.0
284.6
375.3
69.1
318.6
38.6
43.0
1,199.1
1,219.1
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263
Baloise Holding Ltd 10. Long-term equity investments
Company
Baloise Versicherung AG, Basel
Baloise Leben AG, Basel
Baloise Bank AG, Solothurn
Baloise Asset Management AG, Basel
Baloise Asset Management International AG, Basel
Haakon AG, Basel2
Baloise Life (Liechtenstein) AG, Balzers (Liechtenstein)
Basler Saturn Management B. V., Hamburg (Deutschland)
Baloise (Luxembourg) Holding S. A., Leudelange (Luxembourg)
Baloise Delta Holding S. à.r.l., Leudelange (Luxembourg)
Baloise Fund Invest Advico, Leudelange (Luxembourg)
Baloise Alternative Investments Partner S.à r. l., Leudelange
(Luxembourg)
Baloise Private Equity Partner S.à r. l., Leudelange (Luxembourg)
Baloise Participation Holding AG, Basel
1 Investments stated as a percentage are rounded down.
2 On 4 December 2023, the stake in Haakon AG was sold.
11. Current interest-bearing liabilities to third parties
Total
shareholding
as at
31.12.2023
(with voting
rights)
Total
shareholding
as at
31.12.2022
(with voting
rights)
Share capital
as at
31.12.2023 Capital share
(per cent) 1
(per cent) 1
Currency
(million)
(million)
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
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
CHF
CHF
CHF
CHF
CHF
CHF
CHF
EUR
CHF
EUR
EUR
EUR
EUR
CHF
75.0
50.0
50.0
1.0
1.5
–
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.1
75.0
50.0
50.0
1.0
1.5
–
7.5
<0.1
250.0
224.3
0.1
<0.1
<0.1
0.1
31.12.2023
Interest rate
Issued Maturity date
Securities with security number
Bond 26 139 906
Total current interest-bearing liabilities
1.125 %
19.12.2014
19.12.2024
31.12.2022
Interest rate
Issued Maturity date
Securities with security number
Bond 20 004 482
Total current interest-bearing liabilities
1.750 %
26.04.2013
26.04.2023
Amount
CHF million
150.0
150.0
Amount
CHF million
225.0
225.0
264
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265
Baloise Holding Ltd 12. Long-term interest-bearing liabilities to third parties
31.12.2023
Interest rate
Issued Maturity date
Securities with security number
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
Bond 114 872 821
Bond 119 932 235
Bond 120 636 766
Bond 123 210 718
Bond 125 636 719
Total long-term interest-bearing liabilities
0.500 %
0.000 %
0.000 %
0.250 %
0.500 %
0.150 %
0.125 %
0.300 %
1.900 %
2.200 %
2.200 %
2.350 %
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
16.02.2022
16.02.2027
19.07.2022
19.07.2028
30.11.2022
30.05.2029
30.01.2023
30.01.2032
02.05.2023
02.05.2033
31.12.2022
Interest rate
Issued Maturity date
Securities with security number
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
Bond 114 872 821
Bond 119 932 235
Bond 120 636 766
Total long-term interest-bearing liabilities
1.125 %
0.500 %
0.000 %
0.000 %
0.250 %
0.500 %
0.150 %
0.125 %
0.300 %
1.900 %
2.200 %
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
16.02.2022
16.02.2027
19.07.2022
19.07.2028
30.11.2022
30.05.2029
Amount
CHF million
200.0
100.0
125.0
175.0
125.0
250.0
200.0
200.0
110.0
225.0
175.0
100.0
1,985.0
Amount
CHF million
150.0
200.0
100.0
125.0
175.0
125.0
250.0
200.0
200.0
110.0
225.0
1,860.0
264
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265
Baloise Holding Ltd 13. Treasury shares
2023
Balance as at 1 January
Purchases
Disposals in connection with share participation programmes
Balance as at 31 December
2022
Balance as at 1 January
Purchases
Disposals in connection with share participation programmes
Balance as at 31 December
Low
in CHF
High
in CHF
Average
share price
in CHF
Number of
registered
shares
130.50
135.20
133.64
68,991
7,000
– 21,164
54,827
Low
in CHF
High
in CHF
Average
share price
in CHF
Number of
registered
shares
124.20
155.90
138.51
75,915
16,800
– 23,724
68,991
14. Changes in equity
2023
CHF million
Balance as at 1 January
Allocation 2023
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
Total
equity
General
reserve
Reserve for
treasury
shares Free reserves
Distributable
profit
4.6
11.7
7.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 2.4
–
5.4
573.6
68.4
–
–
–
–
2.4
–
644.4
407.4
– 68.4
– 338.8
–
–
–
–
443.9
444.0
– 8.1
–
–
–
–
2.1
–
–
– 6.0
997.0
–
– 338.8
–
–
2.1
–
443.9
1,104.1
Balance as at 31 December
4.6
11.7
266
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267
Baloise Holding Ltd 2022
CHF million
Balance as at 1 January
Allocation 2022
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
Total
equity
General
reserve
Reserve for
treasury
shares Free reserves
Distributable
profit
4.6
11.7
7.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
–
7.8
502.8
71.0
–
–
–
–
– 0.2
–
573.6
391.6
– 71.0
– 320.6
–
–
–
–
407.3
407.4
– 9.3
–
–
–
–
1.2
–
–
– 8.1
909.1
–
– 320.6
–
–
1.2
–
407.3
997.0
Balance as at 31 December
4.6
11.7
15. Significant shareholders
The information available to the Company from disclosures pursuant to Art. 120 of the Swiss Financial Market Infrastructure
Act (FinMIA) (see the SIX website) and from the Company’s share register reveals that the following significant shareholders
and shareholder groups linked by voting rights held long-term equity investments in the Company as at 31 December 2023:
Last
disclosure
date 1
Quota accor-
ding to last
disclosure 1
Shareholding
according
to share
register as at
31.12.2023
Shareholding
according
to share
register as at
31.12.2022
Share of
voting rights
as at
31.12.2023
Share of
voting rights
as at
31.12.2022
(per cent)
(per cent)
(per cent)
(per cent)
(per cent)
Shareholders
Black Rock Inc.
Chase Nominees Ltd. 2
Credit Suisse Funds AG
LSV Asset Management
Norges Bank
Nortrust Nominees Ltd. 2
The Bank of New York Mellon 2
05.09.2017
n/a
25.04.2020
06.07.2013
16.03.2023
n/a
n/a
UBS Fund Management (Switzerland) AG
14.12.2023
7.17
n/a
3.00
3.73
3.07
n/a
n/a
4.99
<1.0
0.0
>3.0
0.0
0.0
2.9
2.1
>3.0
<1.0
4.3
>3.0
0.0
0.0
3.4
2.3
>3.0
<1.0
<1.0
0.0
2.0
0.0
0.0
0.0
0.0
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 Financial intermediaries holding shares for the account of third parties (custodian nominees) are added to the free float in accordance with SIX Exchange Regulation and
are considered free float. These shareholder groups are not subject to reporting requirements under stock exchange law. The exercise of voting rights by these administrators
requires a nominee contract with the company and the disclosure of the beneficial owners.
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267
Baloise Holding Ltd 16. Contingent liabilities
CHF million
Collateral, guarantee commitments
31.12.2023
31.12.2022
200.0
500.0
Baloise Holding Ltd has issued the following letter of comfort:
As the owner of Baloise Life (Liechtenstein) AG, Baloise 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.
Baloise Holding Ltd has declared to France Assureurs that it will back the financial obligations of the French subsidiary of
FRIDAY Insurance S. A. that result from exposures that arise for the subsidiary due to its participation in claim settlement agree-
ments; Baloise Holding Ltd will continue to back these obligations for as long as it has control over the subsidiary.
Baloise Holding Ltd is making cash and cash equivalents of EUR 58.0 million (CHF 53.9 million)[previous year: EUR 58.0 million
or CHF 57.3 million] available to Baloise Sachversicherungs-Aktiengesellschaft until at least 23 March 2031. Baloise Insurance Ltd
can obtain this money in the form of a loan.
Baloise 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 200 million as at the balance sheet date.
Baloise 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 is contained in the Remuneration Report, which can be found on pages 51 to 74 in the part of corporate
governance. The key information disclosed here includes
● remuneration paid to the members of the Board of Directors,
● remuneration paid to the members of the Corporate Executive Committee,
● loans and credit facilities granted to members of the Board of Directors and the Corporate Executive Committee,
● shares and options held by members of the Board of Directors and the Corporate Executive Committee.
18. Net reversal of hidden reserves
In 2023 hidden reserves of CHF 6.1 million were reversed. In 2022 hidden reserves of CHF 0.7 million were reversed.
19. Events after the balance sheet date
On 29 June 2023, Baloise Holding Ltd signed sale and purchase agreements for the purchase of all the shares in Baloise
Belgium N. V.. Regulatory approval for the share purchase was granted on 13 March 2024. Once the imminent purchase of
the shares has been completed, Baloise Holding Ltd will directly own 100 per cent of the shares in Baloise Belgium N. V. The
funding of the purchase price of EUR 1,202 million will be secured by offsetting receivables and loans and by establishing
a financing arrangement between Baloise Holding Ltd and Baloise (Luxemburg) Holding S. A.
By the time that these annual financial statements had been completed on 22 March 2024, 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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Baloise Group Annual Report 2023
269
Baloise 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 443,886,565.47.
The Board of Directors will propose to the Annual General Meeting that the Company’s distributable profit be appro-
priated 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
2023
2022
443,886,565.47
407,337,110.04
63,564.76
46,454.72
443,950,130.23
407,383,564.76
– 352,660,000.00
– 338,920,000.00
– 91,200,000.00
– 68,400,000.00
–
–
90,130.23
63,564.76
Die Gewinnverteilung entspricht den Bestimmungen von § 36 der Statuten. Auf die einzelne Aktie entfällt eine Ausschüttung
von 7.70 CHF brutto beziehungsweise 5.00 CHF nach Abzug der Verrechnungssteuer.
268
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Baloise Group Annual Report 2023
269
Baloise Holding Ltd Report of the statutory auditor to the Annual General Meeting of
Baloise Holding Ltd, Basel
Please refer to the German version of the Baloise Annual Report 2023, page 270, for the report of the statutory auditor, Report
on the audit of the financial statements of Baloise Holding Ltd (the “Company”). The auditor’s opinion dated 22 March
2024 confirms compliance with Swiss law and the Company’s articles of incorporation. EY recommends that the financial
statements submitted to the Annual General Meeting of Baloise Holding Ltd, Basel, be approved.
Please also refer to the disclosure on page 357 “Information on the Baloise Group” referencing the fact that only the German
text of the annual report is legally binding.
270
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Baloise Group Annual Report 2023
271
Baloise Holding Ltd 270
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Baloise Group Annual Report 2023
271
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Baloise Holding Ltd This page has been left empty on purpose.
272
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Baloise Group Annual Report 2023
273
Baloise Holding Ltd 272
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273
This page has been left empty on purpose.
Baloise Holding Ltd Report on
non-financial
matters
(Art. 964a et seq. of the
Swiss Code of Obligations (OR))
Foreword
General information
277
279
Information on environmental matters
309
Information on social matters
319
Information on corporate governance
337
275
Baloise Group Annual Report 2023
Report on non-financial matters
About this chapter
This chapter was written in accordance with section six
‘Transparency on non-financial matters’ of the Swiss Code
of Obligations.
The chapter is divided into four sections and contains
voluntary and compulsory disclosures for 2023. The section
‘General information’ contains a summary of the course of
business and our operating performance, a description of
the business model (see page 284) and other information
that is useful for understanding our activities. This includes
an overview of topics that are material for Baloise’s operating
activities (see page 292) and information on our targets and
commitments under our value creation model (see page 290).
Information is also provided on responsible underwriting and
responsible investment, which address environmental, social
and corporate governance (ESG) matters.
In the sections ‘Information on environmental matters’
(see page 309), ‘Information on social matters’ (see page 319)
and ‘Information on corporate governance’ (see page 337),
we outline our approach in these areas, including measures
to implement them, the risks involved and key performance
indicators.
In addition, Baloise publishes an Annual Review, which
is aligned with the European Corporate Sustainability
Reporting Directive (CSRD) and contains information that
goes beyond what is required under the Swiss Code of
Obligations in respect of setting out Baloise’s responsibility
for sustainable corporate governance.
276
Baloise Group Annual Report 2023 Report on non-financial matters
and poses a threat to us all. At Baloise, we are ready to play
our part in tackling these challenges and share in the respon-
sibility. But the resolve and support of other stakeholders
are also needed to better protect against these new risks.
In this report, we show how we assume responsibility
in various areas, including ESG matters and human rights.
Next year, the report will be supplemented by reporting
on climate-related risk. Baloise is also working towards
preparing a Group report based on the European Corpo-
rate Sustainability Reporting Directive (CSRD) from the 2025
financial year onward. Our Annual Review is already aligned
with the CSRD.
Basel, March 2024
Dr Thomas von Planta
Chairman of the
Board of Directors
Michael Müller
Group CEO
Foreword
Dear shareholder,
dear reader,
The business model of insurance companies means that
they shoulder responsibility for current and future genera-
tions. Our services help to make society more resilient and
offer private individuals and businesses safety and security.
For the past 160 years, we at Baloise have felt a great sense
of responsibility for our customers, our employees and our
investors. The long-term focus of our business model also
reflects the enduring effect of our services and the value that
we create for our stakeholders.
Through our services, we make an important contribu-
tion to social stability while facilitating growth and inno-
vation. Companies, and small and medium-sized enter-
prises in particular, can plan their business better and take
risks because we assume risks for them that they would
not be able to manage themselves, at least not without
great financial expense. With an extensive range of solu-
tions for personal and occupational pensions, our business
model also contributes to strengthening social stability and
preventing social inequality.
Insurance companies are also part of the solution when
it comes to tackling the challenges ahead – together with
other groups in our society – and putting protection in place
against the biggest known risks. Earthquakes and a novel
pandemic are examples of known risks for which it is not
possible to obtain comprehensive private insurance cover.
Cyber risk is a risk that can cause major financial damage
277
Baloise Group Annual Report 2023
General information
At a glance
A look back at the year
Business model
Strategy
Brand
Baloise value creation model
Materiality
Memberships and ratings
Recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)
Business risk related to ESG matters
Responsible investment
Responsible underwriting
280
282
284
286
288
290
292
294
295
296
300
306
279
Baloise Group Annual Report 2023 92.0%
combined ratio
6.5%
new business margin
in the life business
CHF 239.6 million
profit attributable to
shareholders
Report on non-financial matters
At a glance
CHF 3,259.3 million
equity
81%
of employees
responded positively
to Baloise’s employee
satisfaction survey
Asset Management
Total assets under management
Third-party assets under management
Net new third-party assets
Cost/income ratio
Employees
Bank
+ 54,000
additional
customers
CHF 57.9 billion
CHF 15.0 billion
CHF 1.2 billion
70.7 %
238
Net new money custody account volume
(market-adjusted)
CHF 281.0 million
Total assets
CHF 8,731.7 million
Wealth & pension advisory mandates
Return on equity
Employees
5,267
13.2 %
402
280
2023
85%
A-AAA MSCI ESG rating for rated
insurance investments
Baloise Group Annual Report 2023 Report on non-financial matters
CHF 493 million
cash remittance
Dividend of
CHF 7.70 per share
(proposal to the Annual General Meeting
on 26 April 2024)
3.2%
increase in carbon emissions
CHF 8,618.1 million
total business volume
Switzerland
Germany
Belgium
Luxembourg
Business volume
Life (CHFmillion)
Non-life (CHF million
Investment-type premiums (CHF million)
Employees
Combined ratio
1 including Asset Management and Bank.
2 including Liechtenstein [18] and FRIDAY [202].
Further information on business development can be found from page 10 of this report.
2,513.4
1,468.7
43.6
4,031 1
98.4 %
499.8
816.5
0.0
1,532
88.7 %
482.0
1,589.7
14.1
1,775
85.8 %
152.8
154.6
830.8
682 2
89.0 %
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Baloise Group Annual Report 2023 Report on non-financial matters
A look back at the year
Baloise’s highlights in 2023
January
Michael Müller nominated as Group CEO
Baloise CEO Gert De Winter decided to step down as Group CEO
at the end of June. The Board of Directors appointed Michael
Müller (52) to replace him with effect from 1 July 2023.
Baloise successfully places its third green bond
We successfully place a nine-year senior green bond with a
volume of CHF 175 million and a coupon of 2.20 per cent. The first
green bond was issued in 2021, and this is now the third.
Baloise implements expanded RI policy
Our expanded responsible investment (RI) strategy has been
in place since January 2023 for liquid investments, for some
of the fund’s private assets and for the majority of our funds,
including fund selection. The updating of the RI strategy took
account of the SFDR, the FINMA Guidance 05/2021 on preventing
and combating greenwashing and the AMAS requirements for
self-regulation of transparency and disclosure for sustainabili-
ty-related collective assets.
January
2023
282
February
TRONITY electric vehicle solution joins the
Baloise Mobility ecosystem
We are investing in the company TRONITY,
thereby gaining a new partner for our
Mobility ecosystem. TRONITY is a data-
driven solution that provides electric
vehicle users with transparent, comprehen-
sive information about the costs associ-
ated with their vehicles as well as related
services.
March
Baloise publishes second
non-financial report
We again publish our Annual
Review, in addition to the Annual
Report, to show how we uphold our
responsibility as a corporate citizen.
The report forms the basis for our
non-financial reporting and antici-
pates the future direction of disclo-
sure requirements in Switzerland
and the EU.
Christine Theodorovics to become
CEO of Baloise in Luxembourg
Romain Braas, CEO of Baloise in
Luxembourg, decided to retire at
the end of September 2023. His
successor will be Christine Theodor-
ovics (54), a dual Swiss and Austrian
national, who will take up her role
on 1 June 2023.
April
Clemens Markstein to become CEO of
Baloise in Switzerland
The Board of Directors of Baloise
Holding Ltd appointed Clemens Mark-
stein (52) as the new CEO of Baloise
in Switzerland and a member of the
Corporate Executive Committee of
the Baloise Group. He will assume his
post on 1 July 2023. Clemens Markstein
succeeds Michael Müller, who is taking
over as CEO of the Baloise Group from
Gert De Winter.
Baloise Group Annual Report 2023 Report on non-financial matters
October
Baloise adopts climate roadmap
We are committed to the targets of the Paris
climate agreement and we support the efforts of
the Swiss government and the European Union
(EU) to reach net zero by 2050. We are drawing up
a climate roadmap to set out how we intend to
get there. The plan includes a 25 per cent reduc-
tion in operating emissions by 2030.
Baloise extends its partnership with Baloise
Session
We are extending our involvement as the
presenting sponsor of the Baloise Session festival
by another four years until 2029. This underscores
the strategic focus of Baloise’s sponsorship activ-
ities in the field of music. We promote music in
Switzerland, both as a sponsor of Baloise Session
and as the promoter of our own one-off concerts
and a special Switzerland-wide series of concerts.
November
Baloise is recognised as one of the most innovative insur-
ance companies in Switzerland
We win the people’s choice award at the Swiss Insurance
Innovation Awards for our ‘Rapid Damage Cockpit (RDC)’
project and secure second place with ‘Parasurance’. Using
our innovative RDC map, the Rapid Damage Cockpit project
allows us to identify customers who may have been affected
by a severe adverse weather event and automatically send
them a form by email or text message in the immediate
aftermath of the event. This form enables them to report any
loss or damage they have suffered on the same day with just
a few clicks.
June
Baloise awards the 24th Baloise
Art Prize
The CHF 30,000 Baloise Art Prize
has been part of Art Basel for
more than 20 years. This year,
the panel of judges comprising
international experts awarded
the prize to Sky Hopinka and
Wai-Kin Sin. We will acquire works
from both artists and donate
them to two important European
museums, MMK Frankfurt and
MUDAM Luxembourg.
December
2023
283
Baloise Group Annual Report 2023 Report on non-financial matters
Business model
How does an insurance company work?
Insurance is essentially a way of sharing risk among lots of
people. Insurance companies need a sufficiently large pool
of customers in order to be able to offer their products, which
can be divided into three areas: risk, savings and service. We
cover risk in both the non-life and life insurance business.
Non-life business essentially comprises property and liability
insurance, while life insurance protects against the financial
consequences of accident or death.
Where required, we supplement the element of risk
protection in the life insurance business with services such
as saving and pensions. An insurance company’s balance
sheet is a good way to obtain a better understanding of its
business and how it adds value. The four key value drivers of
insurance work hand in hand:
● Assets
● Technical non-life reserves
● Technical life reserves
● Equity.
We use the premiums paid by our customers to buy assets
(investments) such as fixed-income securities, real estate
and equities. We use the regular income from these invest-
ments to provide our customers with the safety and security
that we have promised them. We offset the value of these
promises on the equity and liabilities side of the balance
sheet by setting aside technical reserves for our life and
non-life business. We always have to keep sufficient equity
available to ensure that we can honour the promises made
to our customers at any time. The minimum amount of
equity that we need is determined partly by our own calcu-
lations and partly by the requirements set by the regulatory
authorities. This equity is provided to us by investors (share-
holders). Because this equity is risk capital which – in the
worst-case scenario – could be lost, our investors demand
in return a level of compensation commensurate with the
risk involved. This compensation is provided in the form of
profits that are returned to investors via dividends, share
buyback programmes or a rising share price. Consequently,
this circular flow of funds between risk sellers (customers)
and risk buyers (shareholders) only works if an insurance
company can earn profits. It does so if it invests its assets as
profitably as possible and if the insurance claims that occur
do not exceed the amounts set aside by the insurer in its
technical reserves. Shareholders will continue to provide the
insurance company with equity if the ratio between the profit
that it generates and the capital that it employs (return on
equity) is adequate, compared with the market as a whole.
These four drivers of value within the insurance business are
explained in more detail in the sections that follow.
284
Non-life business
Non-life business essentially comprises property and liability
insurance, such as motor vehicle and personal liability insur-
ance. The profitability of this business consists of two compo-
nents: the technical result and the Company’s gains or
losses on its investments. Based on the premium payments
received from customers, it is calculated as follows:
Customers pay an annual premium. If a claim occurs, the
insurance company uses part of the premium earned to cover
costs that have already been incurred. Because the claim
has still generally not been finally settled, however, a further
portion of the premiums earned is used to set aside claims
reserves for future insurance benefits and is channelled into
investments that will yield a return. Then there are also insur-
ance business operating expenses such as claims handling
costs and staff expenses. If the claims paid, the expenses
for insurance benefit payments and the insurance business
operating expenses are lower than the premiums collected,
the technical result is positive and the insurance company
earns a gross profit. The better the insurance company’s cost
containment and the lower the risks or claims in its customer
portfolio, the higher the gross profit will be. Technical prof-
itability is measured in terms of the so-called combined
ratio, which is one of the key performance indicators used
in insurance. It is a relative figure that denotes the ratio
between an insurer’s costs plus the claims incurred, and its
premium income. If its combined ratio is less than 100 per
cent, an insurance company has generated a technical profit.
In years when high levels of claims occur, an insurer’s claims
ratio may be above 100 per cent. In order to ensure that
enough capital is still available to pay insurance benefits in
such years, equity is required. The amount of capital needed
here depends on risk-related and business-specific factors
and on regulatory requirements. Gains or losses on invest-
ments are calculated as the investment yield on the equity
provided by shareholders and on the technical reserves. The
gains on investments and the technical result must be used
to cover all taxes, borrowing costs and the minimum rate of
return required by shareholders.
Life business
Life insurance enables policyholders to build wealth, make
provision for their old age and protect themselves against
risk (e. g. in the event of accident or death). These benefits
are usually offered in combination, but pure risk life insurance
and pure endowment insurance are also available. Risk insur-
ance benefits are paid out if an unforeseen event – such as
the policyholder’s occupational disablement – occurs. In the
case of endowment insurance, on the other hand, the event
Baloise Group Annual Report 2023 that triggers the payment of benefits is the endowment
date following a contractually agreed period. Endowment
insurance policies are therefore used as savings vehicles –
mostly as a form of retirement pension – which is why they
are sometimes paid out as monthly annuities.
A distinction can be made between traditional life insur-
ance and investment-type insurance policies. In traditional
life insurance business , the premium can be broken down
into the following three components that provide benefits
for the customer:
● Risk component – benefits payable on death or
disability
● Savings component – capital protection and
guaranteed interest income
● Cost component – for various services such as
processing annuities.
The premiums paid by customers for their life insurance poli-
cies are divided in the same way. The savings component
protects and builds the customer’s capital. It is invested
in portfolios of different assets in order to ensure that the
promise of a guaranteed return is kept and to achieve
surpluses over and above the guaranteed returns. The risk
component is used to create a technical reserve for claims
– for example in the event of the policyholder’s death. The
cost component covers the costs incurred by the insurance
company for administering the policy.
Depending on how successfully the insurance company
invests the assets, how cost-efficient its operations are and
the level of risk in the customer portfolio, the insurance
company is left with a return after providing the services. This
amount then goes into gross profit. The majority of the gross
profit, often over 90 per cent (e. g. for occupational pension
insurance schemes in Switzerland or individual life insurance
in Germany), is generally transferred back to customers in
the form of surpluses. The amount that remains is the profit
for the period. This profit must be sufficient to adequately
compensate the shareholders.
There are various forms of investment-type insurance
policy, such as investment-linked life insurance and vari-
able annuities. In contrast to traditional life business, the
insurance company is merely responsible for the administra-
tion of these policies. If the premiums are invested in funds,
customers often make the necessary investment decisions
themselves. The insurance company receives commission
for its asset administration services but is not involved in
investing the insurance assets in the way that it is in the
case of traditional life insurance policies offering guaran-
teed returns. Although modern life insurance policyholders
therefore bear the investment risk, they can earn a far higher
profit than they could from traditional life insurance that
offers guaranteed returns. This is because customers benefit
fully from any return on investments. This line of business is
profitable for insurers because it can generate fees but the
insurer only has to provide a small amount of risk-bearing
capital.
Report on non-financial matters
Banking and insurance model in Switzerland
In Switzerland, we have been operating our combined
banking and insurance model with Baloise Bank for more
than 20 years. The model brings banking and insurance
services together under one roof and, as a financial partner
with a presence throughout Switzerland, enables us to offer
our comprehensive advisory expertise. At every general
agency in Switzerland, customers can meet with specialist
financial advisors and receive comprehensive advice and
solutions that cut across the boundaries of pensions, asset
management and financing. We also benefit from this as a
company, for example because our customers can reinvest
capital sums paid out by life insurance or company pensions
into our Baloise banking solutions. These banking solutions
also include services such as asset management. The inte-
gration of banking and insurance has enabled us to greatly
expand the asset management business in recent years.
Asset management & banking
The prudent management of investments is one of the
most important capabilities that an insurer must possess.
By successfully investing the premiums it receives, the insur-
ance company ensures that it can meet its financial obli-
gations towards its customers while making a contribution
to its overall profitability. We ensure that our investments
are widely diversified across several asset classes such as
fixed-income securities, real estate and equities. Within
each asset class, the focus is on high-quality investments
that yield consistent returns. The Company’s investments
must be carefully matched with its obligations. So-called
asset/liability management (ALM) is used for this purpose.
This involves matching the cash flows from the Company’s
investments with those from its liabilities. We are increasingly
offering our asset management services to third parties as
a means of expanding this area of our business. We offer
investment solutions in the areas of equities, bonds, alter-
native investments, real estate and multi assets. Customers
benefit from the specific expertise and experience of Baloise
Asset Management.
285
Baloise Group Annual Report 2023 Report on non-financial matters
Strategy
Simply Safe: Season 2 – second year of the strategic phase
During the Simply Safe: Season 2 strategic phase, which
runs from 2022 to 2025, we are building on the goals and
successes of the last strategic phase while continuing to
focus on our core stakeholders (customers, employees and
shareholders). At the same time, we are prioritising the value
creation model that underpins the sustainability strategy,
which is an integral part of the corporate strategy and also
includes our wider obligations to partners, society and the
environment (see chapter ‘The Baloise value creation model’,
page 290 onwards).
Impact of our value creation
In the second year of the current strategic phase, we made
the following contributions to our strategic targets:
● We are currently among the top 29 per cent of all
employers in Europe (2022: top 36 per cent).
● We gained 54,000 new customers (2022: 173,000).
Simply Safe: Season 2 targets
● We remitted cash of CHF 493 million
(2022: CHF 471 million).
With our ‘Simply Safe’ strategy we are pursuing the goal of
further strengthening our core business and at the same time
expanding our business model in order to meet changing
customer needs for security and services in the digital age.
This goes hand in hand with the strong conviction that only
satisfied employees can inspire customers, who in turn form
the basis for an attractive investment from an investor’s
perspective. Baloise has set itself the following goals for the
second season of Simply Safe, which started in 2022, and
will run until 2025:
● Employees: to be one of the leading employers in
Europe
● Customers: to acquire 1.5 million new customers
● Shareholders: to generate CHF 2 billion in cash .
In order to achieve the ambitious goals of Simply Safe:
Season 2, four strategic directions were defined based on
the findings from Season 1:
● Focus: focusing on the core insurance business
● Reimagine: improving the customer experience
● Diversify: moving into new business areas
● Transform: culture and sustainability as key drivers of
the transformation.
With our strategy, we want to be more than just an insurance
company. We want to play a significant role in people’s lives.
We made further progress towards our strategic targets.
In terms of our employee target, we improved from being
among the top 36 per cent of the best companies to work for
in Europe to ranking among the top 29 per cent. We acquired
54,000 new customers in 2023. We are on track to meet our
target of cash remittance of CHF 2 billion for the holding
company; we remitted CHF 493 million in 2023, which was
around 5 per cent more than in the prior year.
We regularly review our strategy and adjust it in line with
changed conditions where necessary. In 2017, we began to
establish the Home and Mobility ecosystems as part of our
innovation strategy. Those innovation initiatives generated
CHF 116 million in revenue in 2023. Last year, we announced
that we were reviewing our entire portfolio. Following this
review, and in light of the evolving macroeconomic envi-
ronment, we have now decided to no longer focus on the
ecosystem approach and to not carry out any further new
investment in these business areas. By training our focus on
integrated insurance and financial services and achieving
operational excellence, we are ensuring that Baloise remains
relevant for our customers, partners, investors and employees
in the long term.
Attractive dividend policy continued
Thanks once again to the strong level of cash remittance,
we were able to continue our attractive dividend policy in
2023. We have not reduced the dividend since 2003 and have
in fact increased it 13 times during that period. For the 2023
financial year, we plan to raise the dividend again, enabling
shareholders to participate directly in Baloise’s success.
A dividend increase of CHF 0.30 will be proposed at the
Annual General Meeting on 28 April 2024, bringing the
dividend to CHF 7.70.
286
Baloise Group Annual Report 2023
Report on non-financial matters
This page has been left empty on purpose.
287
Baloise Group Annual Report 2023 Report on non-financial matters
Brand
The first year after the rebranding
Our single brand will lead to a stronger identity.
The process of consolidating all the existing brands into a
single Baloise brand that began in autumn 2022 is complete.
The streamlining of the brand portfolio was a particular
challenge in the Swiss market, where five brands (Basler
Versicherungen, Bâloise Assurances, Basilese Assicurazione,
Baloise Bank SoBa and Baloise Asset Management) had to
be united under a single brand umbrella and communicated
in a cohesive way. In Germany, the change from ‘Basler’ to
‘Baloise’ introduced a brand name that had not been used
in this market before. Internally, the single brand identity has
led to greater collaboration and synergies across national
borders as the marketing and marketing communications
teams have worked on marketing activities together. It has
also strengthened the feeling of a shared identity between
all employees. Building a brand and establishing its perma-
nent position in the market is not something that happens
overnight – it takes time. The new brand was introduced
in all countries with the launch campaign ‘Sometimes it
works. Sometimes you learn’. The campaign slogan is the core
message of a number of short scenarios that Baloise links
to its (potential) customers' lives in an entertaining way. An
action that doesn’t initially appear to have had the desired
outcome is turned into a positive. The focus is not on failure,
but on having successfully learned something.
Our new identity connects the brand to the strategy and
unlocks the full potential of a single brand as a driver of
growth. The brand is the link between the customers and
Baloise and its services. It communicates the brand promise
and strengthens trust in the Company’s services. This is
where the brand purpose comes into play:
Strategic ambition
By 2025, we are a state-of-the-art,
unified and sharpened brand which
best supports the unique Baloise
customer experience and leverages
growth.
By 2025, Baloise is the love brand for
customers, partners and employees
who want to engage with a human
insurance and finance
brand.
By 2025, Baloise has a strong
reputation as a responsible insurance
and finance brand whose sustainable
action supports customers and
strengthens society, the economy and
the environment.
Purpose
and story
Experience
Human
Inspiring
Responsible
Values
Partnership
Proximity
Tomorrow
288
Baloise Group Annual Report 2023
Report on non-financial matters
● At Baloise, we care. We develop insurance, financial and
other intelligent service solutions with a human touch,
because we want our employees, customers and part-
ners to feel that they are in good hands.
The brand experience is extremely important in external
communications, particularly in the campaign to launch the
rebranding. It encapsulates the way we want to be perceived
by our customers and partners: as human, responsible and
inspiring.
● At Baloise, we inspire. We love what we do – and we love
to go further. We explore new pathways, create new
possibilities and seek out new solutions. As an inspiring
partner, we encourage our employees, customers and
partners to remove worry from their lives.
● At Baloise, we keep our promises. We listen to our
customers and partners so that we can meet their
needs. We act responsibly and take responsibility for
our future, contribute to the society we live and work in.
‘We are Baloise.
We are the inspiring
partner for your tomorrow’.
Brand values and brand experience
Brand campaign with a focus on awareness
The brand management activities vary from country to
country depending on the level of brand recognition in each
market. In Luxembourg and Belgium, the Baloise brand is
already relatively well established. The rebranding had little
impact because the Baloise name was already known in
these markets. Here, the challenge is to position the brand
values more strongly to make Baloise the preferred choice
for customers. In markets such as Germany and Switzerland,
where the Baloise name was not used at all, or was used only
in individual regions, the focus was firmly on name recogni-
tion. The Baloise brand has to be firmly established in the
minds of customers before we can switch the emphasis to
the brand values.
A strong brand underpins the strategy
Our brand values are partnership, proximity and tomorrow.
That’s what we stand for and what we believe in.
We believe in partnership
That is why we treat our colleagues, customers and partners
as equals. That is why we build our relationships on mutual
trust. Because for us, business success begins with a strong
partnership.
The new brand identity has four goals that will help us to
successfully implement the strategy, and in particular Simply
Safe: Season 2.
1. By focusing on the single brand, Baloise, we are
reducing the complexity of the previous identity and its
various brands. Processes will be simplified and visibility
strengthened.
We believe in proximity
That is why we take care of our employees, customers and
partners. That is why we behave like a reliable friend. Because
for us, solutions by people for people start with proximity.
2. We are sending a clear signal concerning the trans-
formation of Baloise. We are the inspiring partner for a
shared tomorrow. The new positioning provides a clear
direction for the future.
We believe in the future
That is why we act responsibly for the benefit of people today
and with consideration for future generations. That is why
we want to make a difference in the society we live and work
in. Because for us, being an inspiring partner begins with
optimism and confidence about the future.
3. A strong brand will help us to stand out in the insurance
and financial services market. And, last but not least,
we will be able to attract new customers who will get to
know us for the first time.
The single Baloise brand is a milestone and a clear signal
both internally and externally. The new branding will help
to bring the strategy to life and to communicate the values
of Baloise and the people behind the brand more clearly to
our customers.
www.baloise.ch/de/ueber-uns/wir-sind-baloise (only in
German)
289
Baloise Group Annual Report 2023
Report on non-financial matters
Baloise value creation model
Creating value – achieving
sustainability
Commitments
Employees
Greater wellbeing
Customers
Increased customer satisfaction
Investors
Attractive, reliable and responsible investment
Society
Valued member of society
Environment
Climate protection
Partners
Responsible and successful collaboration
Definitions
Employees
Baloise employees at all Baloise sites
Customers
Private and business customers
Investors
Institutional and private investors and shareholders, who invest in
Baloise
Society
The communities in which we operate at all Baloise sites, and the
society of each country in which we operate
Environment
The direct natural environment at all Baloise sites and the global
environment that we influence through our business decisions and
activities
Partners
Innovation partners such as start-ups, outsourcing partners,
suppliers, brokers and agents
290
Baloise Group Annual Report 2023 The Baloise value creation model
Report on non-financial matters
Baloise itself. It becomes fresh input for the ongoing value
creation process, driving forward sustainable development.
www.baloise.com/sustainability
www.baloise.com/strategy
www.ifrs.org/issued-standards/ir-framework
Strategic integration through commitments in the area
of sustainability
At the heart of our belief is sustainable value creation, with
a promise not to create value for certain individuals at the
expense of others. We have therefore made six commitments
in the area of sustainability that cover all the resources in our
value creation model. During the Simply Safe: Season 2 stra-
tegic phase, which runs until 2025, these six commitments
will add to the three strategic goals relating to employees,
customers and investors.
In 2023, we adopted our climate roadmap which cements
our commitment to climate protection. As well as our existing
climate-related activities, it sets out future objectives and
explains the measures we will take to achieve them. More
information on the objectives is contained in the ‘Environ-
mental information’ chapter.
Sustainable development goals (SDGs)
Our value creation approach is aligned with the United
Nations' sustainable development goals (SDGs). The SDGs
contribute to the economic, social and environmental
dimension of sustainable development and should be
achieved by all UN member states by 2030. As a non-state
actor, we want to make our own active contribution to this
sustainable development. The goals that are important to
us are reflected in the resources set out in our value creation
model and thus in our commitments.
www.baloise.com/sdg
www.baloise.com/sustainability
www.baloise.com/csr
Stakeholder dialogue
We regularly discuss issues relating to the environment,
society and corporate governance (ESG) with our stake-
holders. Dialogue takes place within various associations
and organisations, for example, or in the form of direct talks
with our investors:
www.baloise.com/sustainability-ratings
Our commitment to corporate responsibility affects
everything we do. We practise sustainable business manage-
ment in accordance with the Baloise value creation model
(see illustration on the left). This, in turn, is based on the inte-
grated reporting framework of the International Integrated
Reporting Council (IIRC), but is specifically aligned with our
business model, the aspects that are important to us, and
our corporate values.
Strategic integration through value creation model
Insurance companies grew out of the idea of risk sharing. The
strength of a community sharing the insurance risk is that a
community is more than the sum of its parts. No matter how
careful an individual may be, he or she is still exposed to risks
that can be better managed and mitigated by being spread
– along with cost – across the community. Of course this only
works if the community of insured persons is effectively and
efficiently organised. This is precisely where we have seen
our role ever since Baloise was founded in 1863: in ensuring
the sustainable functioning of this community. Responsible
and socially engaged behaviour is also an integral element
of our Simply Safe strategy, alongside sustainable business
management that takes account of our stakeholders.
At the core of the Baloise value creation model is our stra-
tegic direction. Our strategy is influenced by external factors
such as climate change and changes in the geopolitical
landscape. At the same time, our business activities and
the actions we take have implications for our environment.
Our value creation approach aims to respond to this double
materiality. In our role as an insurance and pension provider
with products and services across insurance, banking and
asset management, we not only look after individuals but
also protect companies, economies and communities and
help them to function properly – every day of the year. Thanks
to us, individuals and companies can take risks that they
would not be able to manage on their own. We enable indi-
viduals to live more carefree lives and give companies the
opportunity to do business sustainably. In this way, we also
help to ensure economic and social stability as well as social
security in the countries where we operate. We have to be
able to offer our customers long-term security, which is why
our actions are guided by long-term thinking. Through the
key parameters of corporate governance, compliance, data
governance and security, and risk management, we can
make a lasting positive impact and, in so doing, create value
for employees, customers, society, the environment, partners
and investors. In the value creation model, which is based
on the integrated reporting framework of the International
Integrated Reporting Council (IIRC), these stakeholder groups
and the environment are described as resources. The newly
created value benefits the aforementioned resources and
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Baloise Group Annual Report 2023 Report on non-financial matters
Materiality
Materiality assessment approach
Identification of material issues
A structured and focused approach to sustainability
is important to us. That is why we carried out a detailed
materiality assessment for the key aspects in the area of
sustainability and published it in 2022. This assessment is
guided by the requirements of the Integrated Reporting
Framework, the sector-specific requirements of the Sustain-
ability Accounting Standards Board (SASB) and a dialogue
with stakeholders based on our value creation model. As
sustainability is a rapidly evolving area, the results of our
materiality assessment are reviewed internally every year.
Depending on the outcome, the assessment is repeated
on an ad hoc basis or at least every four years. In 2024, we
plan to update the materiality assessment to take account
of the formal requirements of the Corporate Sustainability
Reporting Directive (CSRD).
www.ifrs.org/issued-standards/ir-framework
www.sasb.org
We combine external and internal sources to identify mate-
rial topics. The first step is to collect the topics from sources
such as sector analyses, requirements in the market, regula-
tions, standards and ESG ratings. In a second step, the topics
identified are consolidated by internal specialists.
Comprehensive assessment of the material
topics
The topics identified are assessed from four perspectives:
1. Departmental relevance – qualitative and quantitative
assessment by departments within the Baloise internal
sustainability network
Materiality matrix
292
Business Ethics& ComplianceProduct& ServiceDevelopmentSocietalContributionsRisk Identification& MitigationInnovation & DigitalizationResponsible PartnershipsLocal Community SupportResponsible Investment (including environmental matters)Employee Engagement (including environmental matters and respect for human rights)Cyber Resilience & Data SecurityInteraction with Customers and Customer protectionUnderwriting and Product Management (including environmental matters and respect for human rights)very highvery highhighhighlow Relevance for StakeholderBusiness RelevanceBaloise Group Annual Report 2023 2. Business relevance – quantitative assessment by the
Baloise management
3. Relevance for stakeholders – quantitative assessment
by the internal and external stakeholders in accor-
dance with the Baloise value creation model
4. Impact on sustainable development – qualitative
assessment by external experts in accordance with the
Baloise value creation model
Finally, the quantitative and qualitative assessments are
analysed and conclusions are drawn from the results to
produce a materiality matrix for the whole Baloise Group.
Results of the materiality assessment
The positions of the sustainability-related topics that are
material for Baloise are determined by combining the mean
values of the responses of our stakeholders to the quanti-
tative survey with the qualitative assessment of the impact
of these topics by experts from various departments. The
materiality matrix produced by the analysis is used as a
strategic guide for implementation of sustainability aspects
in our business and determines which topics will be included
in the reporting.
www.baloise.com/sustainability
Conclusions from the 2022 materiality
assessment
The topics rated as being of high or very high relevance for
Baloise and its stakeholders and assessed by the expert
surveys as having a strong impact on sustainable develop-
ment coincide with the three strategic targets for customers,
employees and investors. The analysis thus validates our three
strategic targets for the Simply Safe: Season 2 strategic phase
and extends them to include social aspects in various areas,
as well as cyber resilience, data security, responsible invest-
ment, underwriting, product management, interaction with
and protection of customers, the identification and mitiga-
tion of risk, business ethics and compliance, the development
of products and services, and innovation and digitalisation.
This affirms our strategic expansion of the three targets to
include commitments derived from our value creation model.
Climate change, environmental matters of relevance
to Baloise and respect for human rights are not treated as
individual topic areas but as an integral part of the areas
of ‘Responsible investment’, ‘Underwriting and product
management’ and ‘Employee engagement’. This more accu-
rate positioning comes from the annual review of the mate-
riality assessment.
Reducing the carbon footprint of our own business activ-
ities is regarded as an obvious step with relatively little
impact on sustainable development. Our activities in the
Report on non-financial matters
area of investment – with regard to the continuous develop-
ment of our responsible investment policy – and the Group-
wide integration of ESG criteria into the underwriting process
and product management reflect these priorities. In the area
of underwriting and product management, we are at the
start of the integration process. We will gather experience
as this progresses and make use of this experience as we
continue to drive integration forward. Reducing our carbon
footprint is part of doing business sustainably. It is generally
accepted that this part of our business has a lesser impact
on our commitment to climate change mitigation than the
integration of climate and environmental criteria into invest-
ment and underwriting.
Social factors are extremely relevant to us as a provider of
insurance and financial services. They include topics relating
to employees and customers as well as social aspects in the
areas of responsible investment, underwriting, partnerships,
compliance and business ethics. The fact that social aspects
are not only viewed through the lens of our CSR activities,
but are in fact part of our core business, is illustrated by the
integration of social criteria into our investment decisions
through our responsible investment policy, the extension
of these criteria through our active ownership strategy, the
factoring of social criteria such as human rights and workers’
rights into our underwriting decisions, and the progressive
integration of these criteria into our supply chains. The
results of the materiality assessment confirm that the key to
further progress with regard to sustainability within Baloise
also lies in these areas and that the focus should be on
social aspects.
The topics in the area of corporate governance with the
greatest relevance are the identification and mitigation
of risk, business ethics and compliance, and cyber resil-
ience and data security. This is consistent with our efforts
with regard to the recommendations of the Task Force on
Climate-Related Financial Disclosures, our strong corporate
governance and compliance culture and the stepping up of
activity in connection with our digital responsibility.
www.fsb-tcfd.org
Further information on the relevant aspects is available
here: www.baloise.com/materiality
293
Baloise Group Annual Report 2023 Report on non-financial matters
Memberships and ratings
ESG ratings
Memberships
Explanations of our current ESG ratings and indices are part
of transparent sustainability communication.
www.baloise.com/sustainability-ratings
MSCI confirmed our ESG rating of AA in 2023, with a slightly
higher score than last year. The rating recognises our ESG-re-
lated diligence through screening, ESG integration and
active ownership in the area of responsible investment, and
our leading corporate governance practices.
Our Sustainalytics rating rose slightly in 2023 from 20.4
to 20.8 (medium risk), which was due to a higher valuation
of our exposure to risk in the areas of product management,
data protection, data security and ESG integration in the
investment process.
www.msci.com/our-solutions/esg-investing/esg-ratings
Baloise is not involved in any controversies in the environ-
mental (E), social (S) or corporate governance (G) spheres.
We will carry on using the information from our ESG ratings
to continuously improve sustainability activities and the
reporting on these in future.
Collaboration with other companies, institutions and organ-
isations is essential to drive sustainable development
forward. That is why we support sustainable development
goal (SDG) no. 17 of the United Nations (partnerships for
achieving the goals). We regard partnerships as a funda-
mental requirement for the achievement of sustainability
objectives.
www.baloise.com/sustainability-ratings
As a member of the Swiss Insurance Association (SIA), we
work on standards relating to sustainability for the entire
Swiss insurance sector, act jointly on matters relating to
regulation and share expertise relating to the integration
of ESG criteria into business processes. In 2023, we actively
participated in the preparation of the SIA’s industry reporting
on sustainability topics, as we had done in previous years.
https://www.svv.ch/en/sustainability-2022
1994
Member of the Swiss
Business Council for
Sustainable
Development (oebu)
2018
Signed
the Principles for
Responsible
Investment (PRI)
2019
Member of the local
network of the State
Secretariat for Inter-
national Finance (SIF)
and Swiss Sustainable
Finance (SSF)
2020
Signed the Principles for
Sustainable Insurance UNEP
FI PSI, supporter of the TCFD,
included in the FTSE4Good Index
series
2021
Joined the Swiss Climate
Foundation and awarded
accolade of 'Most
Innovative Sustainability
Insurer – Switzerland 2021'
294
Baloise Group Annual Report 2023 Report on non-financial matters
Recommendations of the
Task Force on Climate-related
Financial Disclosures (TCFD)
The Task Force on Climate-related Financial Disclosures
(TCFD) is an initiative that was founded in December 2015
by the Financial Stability Board (FSB), an international body
created by the G20 member states with the aim of promoting
international financial stability. The TCFD’s recommenda-
tions help investors, lenders and insurance companies like
Baloise to identify the information that is needed in order to
appropriately assess and evaluate climate-related risks and
opportunities, and develop suitable measures to address
them. We have been an official supporter of the TCFD’s
recommendations since 2020 and are progressively inte-
grating them into our reporting processes. We plan to apply
the TCFD framework in full in the 2024 reporting under the
ordinance on climate disclosures that comes into force on
1 January 2024.
Overview and references to relevant information
Governance
Strategy
Risk management
Metrics and targets
Information on which
metrics and targets
are used to assess
and manage relevant
climate-related risks and
opportunities, if material
● The Baloise value
creation model
from page 290
● Sustainability KPIs
pages 316, 334 and 345
Information on governance
of climate-related risks and
opportunities
● Sustainability
governance,
see Annual Review
from page 24
● Strategy
from page 286
● Risk management
from page 25
● Environment
from page 309
● Responsible investment
from page 300
● Responsible
underwriting
from page 306
Information on the effective
and potential climate-
related risks and opportu-
nities for business, strategy
and financial planning, so
far as material
Information on how
we identify, assess and
manage climate-related
risks
● Business model,
● Risk management
from page 25
● Responsible investment
from page 300
● Responsible
underwriting
from page 306
strategy and brand
from page 284
● The Baloise value
creation model
from page 290
● Risk management
from page 25
● Environment
from page 309
● Responsible
investment
from page 300
● Responsible
underwriting
from page 306
● Customers,
see Annual Review
from page 68
295
Baloise Group Annual Report 2023 Report on non-financial matters
Business risk related to ESG matters
Further information on risk management as part of our value creation process is provided on page 26 of this report. In
this section, we outline material business risks for us in relation to environmental, social and corporate governance
(ESG) matters.
Environmental matters
Risk description
Management of risk
Further information
Failing to adequately consider
ESG factors in the investment
process harbours reputational
risk because responsible
investment is important for
Baloise and its stakeholders
Acting with a long-term focus and managing ESG risks and
resources responsibly in line with our responsible investment
strategy; making the required disclosures under the SFDR
Revising our responsible investment strategy on an ongoing
basis (RI policy expanded for liquid investments, for some
of the fund’s private assets and for the majority of our funds,
including fund selection in 2023)
Participating in the Climate Disclosure Project (CDP)
Section: Responsible investment (page 300)
Section: Responsible investment – Our
approach to responsible investment in 2023
(page 301)
Section: Responsible investment – Highlights
from 2023 (page 301)
Failing to adequately consider
ESG factors in underwriting
and product management
harbours business risk due,
among other things, to the
increasing frequency of
extreme weather events
Creating transparency by publishing an active ownership
review
Section: Responsible investment – Highlights
from 2023 (page 301)
Providing continuing professional development for
employees in Asset Management
Section: Responsible investment – Highlights
from 2023 (page 301)
Signing up to the Principles for Sustainable Insurance (PSI)
in 2020
Section: Responsible underwriting – Sustaina-
bility risks in the underwriting policy (page 306)
Introduction of an assessment process for actuarial
sustainability risk management in 2021
Integration of ESG criteria in our underwriting guidelines
Section: Responsible underwriting –
Sustainability risks in the underwriting policy –
Assessment process (page 307)
Section: Responsible underwriting –
Sustainability risks in the underwriting policy –
Transition and exclusions (page 307)
296
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
297
Report on non-financial matters
Social matters (employees)
Risk description
Management of risk
Further information
The commitment of Baloise
employees is critical to the
success of the Company.
The required skill-sets are not
available because skills are
not developed or due to
demographic change and
poor employer branding
(skills shortage risk).
We want to be one of the most attractive employers for
committed and contented employees and regularly measure
employee satisfaction to this end.
Section: How we create value for our employees –
Strategic relevance of capable and motivated
employees (page 320)
Enhancing Baloise’s employer branding through attractive
positioning and campaigns as well as modern recruitment
processes and tools, thereby creating a positive recruitment
journey for candidates; in Switzerland, additional focus on
regaining Friendly Workspace status
Section: How we create value for our employees –
Risks and risk management methods in employee
matters (page 322)
Creating a good place to work thanks to a working environ-
ment that is forged by the shared principles enshrined in the
Baloise Code of Conduct
Section: How we create value for our employees –
Risks and risk management methods in employee
matters (page 322)
Continually recording key figures relating to the skills
shortage, such as staff turnover and recruitment figures
Section: How we create value for our employees –
Risks and risk management methods in employee
matters (page 322)
Taking steps to improve employee retention that take
country-specific interests into account
Section: How we create value for our employees –
Employee retention (page 322)
Offering numerous services and initiatives to protect and
promote the health of employees in the workplace
Section: How we create value for our employees –
Health and safety (page 325)
Promoting diversity and inclusion through networks,
initiatives and employer campaigns
Section: How we create value for our employees –
Diversity and inclusion (page 325)
Promoting corporate citizenship among employees by
encouraging voluntary work
Section: How we create value for our employees –
Corporate social responsibility (page 326)
At all our national subsidiaries, our employees have a say in the
workplace through employee representatives. Together with all
the national offices, Baloise has set up a joint committee – the
Europaforum – to promote dialogue with employee representa-
tives, share important information with them and involve them
in discussions at the earliest opportunity.
Section: How we create value for our employees –
Social partnership and participation (page 327)
296
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297
Report on non-financial matters
Social matters (society)
Risk description
Management of risk
Further information
Our services contribute to the
stability of society and help to
prevent social inequality. We
rely on the trust of the public to
be able to provide our services.
A loss of reputation or trust is
therefore a business risk.
Baloise considers social matters in the course of its
responsible investing
Section: How we create value for society –
Responsible investment for society (page 331)
Baloise considers social matters in its
underwriting guidelines
Section: Responsible investment –
Our approach to responsible investment
in 2023 (page 301)
Section: How we create value for society – ESG
criteria in our underwriting policy (page 331)
Section: Responsible underwriting –
Sustainability risks in the underwriting policy –
Transition and exclusions (page 306)
Baloise gets involved in social matters in a variety of ways
and promotes corporate citizenship among employees
Section: How we create value for society –
Our social responsibility (page 332)
Our sponsorship activities have a strong focus on music,
culture and sport, allowing us to contribute to the diversity
of society
Section: How we create value for society –
Sponsorship activities (page 332)
298
Baloise Group Annual Report 2023
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299
Report on non-financial matters
Corporate governance
Risk description
Management of risk
Further information
Collaborating with partners
creates value for Baloise and
its customers. If partnerships fail,
they can give rise to business
and reputational risk.
Within a company’s day-to-day
operations, compliance refers
to adherence to all laws,
standards, internal instructions
and organisational measures
designed to prevent reputa-
tional risk, financial risk, IT risk,
political risk, human rights risk
or environmental risk.
Systematically maintaining partnerships that are beneficial for
Baloise, the partners and customers allows us to create value
Section: How we create value for
our partners (page 342)
Our utmost aim is to establish and promote a strong compliance
culture and standards of ethical behaviour within Baloise
Section: Compliance culture creates
value (page 338)
Baloise has policies that cover matters such as money
laundering, data protection, respect for human rights and
anti-corruption and bribery
Section: Compliance culture creates
value (page 338)
298
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299
Report on non-financial matters
Responsible investment
Measures
● Developing our responsible investment policies on
Effectiveness of the measures
● Assumption of responsibility for sustainable develop-
an ongoing basis and adapting to changing external
parameters. A large part of the insurance portfolio and
the majority of our funds are categorised as sustain-
able under articles 8/9 of the Sustainable Finance
Disclosure Regulation (SFDR) or according to FINMA.
● Starting work on the inclusion of ESG considerations
across the whole value chain of our property manage-
ment in Switzerland
● Undertaking collaborative dialogue with companies
and public policy engagement through our member-
ships of various industry associations (such as PRI, SSV,
AMAS, SSF)
● Implementing the ESG training plan with external and
internal training courses for our employees in Asset
Management
● New active ownership disclosures. Active ownership
includes exercising voting rights and engaging in active
dialogue with companies in which we invest.
● Signing the Principles of Responsible Investment (PRI)
in 2018
ment and the shaping of our responsible approach to
risks and resources
● Starting to give greater consideration to sustain-
ability aspects in our property portfolio, with the aim of
making a clear contribution to reducing the CO2 emis-
sions of buildings
● Providing employees in Asset Management with a
broad range of basic knowledge with regard to respon-
sible investing and our policies
● Continuous improvement of our communication and
transparency in relation to responsible investment
● Contribution to the fight against climate change by
reducing the negative impacts on the environment and
society
● Agreement on and compliance with fundamental prin-
ciples for the integration of ESG into our investment
process and the associated reporting on our progress
Key performance indicators
Responsible investment is also important for the environ-
ment and society, which is why we take environmental, social
and other criteria into account. The insurance portfolio rela-
tive to the CO2 benchmark (page 303) and the distribution
of the ESG ratings of our insurance investments (page 303)
serve to measure the effectiveness of initiatives.
A sustainable approach in investment
The asset management team is getting behind the Baloise
Group’s sustainability strategy. We are taking responsibility
for investment strategies in relation to both the investment
of insurance assets of the Group and the investment of
assets from external customers such as pension funds. Our
efforts in the area of responsible investment build on our
sustainability activities. We are an insurance group that was
founded on the idea of community-based risk sharing and
attaches particular importance to taking responsibility and
putting sustainable development at the heart of everything
we do.
The concept of sustainable development and the insur-
ance and financial services industries share some important
characteristics, for example the need to act with a long-term
focus and to manage risks and resources responsibly. In
addition to protecting our own business activity in the long
term and thereby securing the jobs of our employees, we
aim to actively help to shape the transformation of society
in our role as a corporate citizen. Our responsible investment
approach addresses sustainability risks and factors and
integrates them into the investment process. Environmental
and social characteristics as defined in the Sustainable
Finance Disclosure Regulation (SFDR) 1 are also considered.
This approach is documented in our responsible investment
policies. We remain true to our values by acting in accor-
dance with the responsible investment policy.
1 SFDR: Sustainable Finance Disclosure Regulation (EU) 2019/2088.
300
Baloise Group Annual Report 2023 Highlights from 2023
Our advanced RI strategy is based on four strategic pillars:
Report on non-financial matters
We took another step forward in the area of responsible
investment in 2023. Our advanced responsible investment
(RI) strategy came into effect on 1 January 2023 for liquid
assets, for some private insurance assets and for the majority
of our funds, including fund selection. The development of the
advanced RI strategy took account of the SFDR, FINMA Guid-
ance 05/2021 on preventing and combating greenwashing
and the requirements introduced by AMAS for self-regula-
tion of transparency and disclosure for sustainability-related
collective assets. The advanced RI strategy allows us to offer
a wide range of sustainability-related investment options to
customers in Switzerland and the European Union who have
sustainability preferences.
We are also making steady progress in terms of
transparency and disclosure. We participated in the Climate
Disclosure Project (CDP) again in 2023, increasing our trans-
parency around climate risks and emissions data and
publishing the most important climate-related data for the
insurance portfolio. We also published our second active
ownership review in 2023.
www.baloise.com/active-ownership-review
Another important activity in 2023 was providing continuing
professional development on the topic of responsible invest-
ment to our employees in Asset Management. The focus was
on communicating a broad range of basic knowledge, but
the training also included information on the new respon-
sible investment strategy. A plan for external ESG training
was also implemented to complement the internal offering.
Our approach to responsible investment
in 2023
Until the end of 2022, the general RI strategy consisted of
exclusions, active ownership elements and the integration
of criteria relating to the environment, society and corpo-
rate governance (ESG) into the investment process. It still
applies to some private assets and bonds that were added
to the insurance portfolio prior to 1 January 2023 (‘grand-
fathering’)2. A small proportion of the funds still apply the
general strategy. On 1 January 2023, we began implementing
an advanced responsible investment (RI) strategy. This
involves general exclusions, wider exclusions, a best-in-class
approach, ESG integration and an active ownership strategy.
Both responsible investment strategies address the most
important principal adverse impacts of investment decisions
on sustainability factors.
1. Exclusion: We use systematic exclusions to avoid direct
investments that fall within the immediate scope of
the responsible investment policy and are exposed
to material sustainability risks according to defined
criteria. Exclusions are based on an assessment by
MSCI Research LLC, a subsidiary of MSCI Inc., a leading
global provider of investment decision support tools
and services for the investment community. They are
applied according to a defined threshold. An absolute
exclusion applies for companies whose business activ-
ities or practices are linked to controversial weapons.
As part of our climate strategy, we also exclude compa-
nies involved in coal (at least 10 per cent of their total
revenue), producers of unconventional oil and gas (at
least 5 per cent of their total revenue) and producers of
oil and gas (at least 30 per cent of their total revenue).
We also exclude producers of tobacco (at least 5 per
cent of their total revenue) and companies that are
in serious violation of the principles of the UN Global
Compact (UNGC) and the guidelines of the Organi-
sation for Economic Co-operation and Development
(OECD) for multinational enterprises.
2. Best-in-class: The second pillar of the advanced RI
strategy is the application of a best-in-class approach.
Under this approach, the portfolio is designed to
perform better than its benchmark with regard to
sustainability by avoiding the worst bonds in the peer
group. As part of the defined strategy, the worst 20 per
cent of issuers within the respective sectors or peer
group are excluded, based on the MSCI ESG universe.
We use the best-in-class approach both for companies
and for government bonds.
3. ESG integration: The investment teams incorporate
sustainability risks into the investment analysis to
reduce potential negative financial impact or reputa-
tional damage from sustainability risks. The portfolio
management team is provided with dedicated environ-
mental, social and governance (ESG) data. All invest-
ment teams have access to the ESG database of MSCI
ESG Research LLC.
2 The relevant bond positions can only be held if they comply with the general strategy. A review is carried out at least once a year to see
whether grandfathering should be continued for these positions.
301
Baloise Group Annual Report 2023 Report on non-financial matters
4. Active ownership: Active ownership is an integral part
of our approach to responsible investment. The active
ownership strategy consists of the following four pillars:
4.1. Proxy voting: We exercise the voting rights of listed
Swiss equities in the actively managed insurance
portfolio in accordance with the principles of a
good and ethical corporate governance approach.
Additional sustainability criteria are also an inte-
gral element of the proxy voting instruction, which
was extended in 2023 to include additional ESG
criteria. Proxy voting is an important tool for
meeting our responsibility as an investor. Proxy
voting at AGMs allows us to exert influence on a
company’s governance and policies, particularly
with regard to sustainability, ethical standards
and corporate governance. This ensures that our
investments meet social and environmental
criteria, as well as financial criteria, and encour-
ages companies to act responsibly.
4.2. Direct corporate dialogue: Direct company
engagement involves entering into constructive
dialogue with companies in which we are invested
in order to address specific sustainability-related
matters. Under the advanced RI strategy, direct
engagement is used in the following cases:
4.3. Collaborative corporate dialogue: As well as
engaging directly with companies, we also join
groups of like-minded shareholders who are
concerned with the same sustainability issues,
in a process known as collaborative engagement.
Collaborative discussions with companies can
be conducted through participation in initiatives
such as Climate Action 100+ or the PRI coope-
ration platform.
4.4. Public policy engagement: We also work with
public authorities on ESG topics in certain policies.
This takes place through our active involvement in
various associations of which we are members:
• PRI (Principles for Responsible Investment), an
initiative supported by the United Nations that
focuses on responsible investment practices
• SIA (Swiss Insurance Association), the association
of Swiss insurers
• AMAS (Asset Management Association Switzer-
land), an association representing the interests
of the asset management sector in Switzerland
• SSF (Swiss Sustainable Finance), an organisation
devoted to the promotion of sustainability in the
Swiss financial sector.
• Deterioration of the MSCI ESG rating (final indus-
try-adjusted company score) of a company after
inclusion in the portfolio so that the investment
no longer meets the requirements of the best-
in-class approach
• Serious breaches of minimum standards of
These memberships provide support on specific or broader
ESG topics such as reducing CO2 emissions, decarbonising
the economy and protecting biodiversity. The focus areas
also help to guide us in the selection of possible collaborative
corporate discussions as part of our active ownership
strategy.
conduct in areas such as human rights, employ-
ment, the environment and anti-corruption,
defined as ‘red flag’ by MSCI.
The primary aim of direct engagement is
to help rectify the cause of the deterioration
in the MSCI ESG rating or the failure to respect
the principles of the UN Global Compact or
the OECD Guidelines for Multinational Enterprises.
Exclusions
Active
Ownership
4 pillars
of the extended
RI strategy
Best
in class
ESG
Integration
.
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Baloise Group Annual Report 2023
Report on non-financial matters
Distribution of the ESG ratings of our insurance
investments
The insurance portfolio relative to the CO2
benchmark
(weighted average tonnes of CO2/$M revenue)
85 %
15 %
A-AAA
B-BBB
Corporate bonds
Swiss equities: –18 %
European equities: –38 %
Corporate bonds: –59 %
Source: Baloise Asset Management, MSCI/data basis as at
31 December 2023: Swiss equities relative to SPI, European equities
relative to MSCI EMU large-cap equities and corporate bonds relative
to the Bloomberg Global Aggregate Index. The evaluation includes
scope 1 + 2 of all securities covered by the RI strategy. Note: the bench-
marks for our equities investments were changed in 2023.
Source: Baloise Asset Management/MSCI, December 2023, equities
and bonds with MSCI ESG rating, covered by the RI strategy; without
weighting. As at 31 December 2023, the insurance portfolio included
one position (0.02%) with an MSCI ESG rating of CCC.
The Baloise Asset Management climate strategy is an inte-
gral element of our responsible investment strategy. Under
the climate strategy, we contribute to combating climate
change 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. We
use the data provided by MSCI Ltd. for this.
www.baloise.com/am-climate-strategy
Exclusion
ESG integration
Commitment
Reduction
of physical and
transition risk
Incorporation
of ESG, including
climate risks,
into portfolio
management
Collaborative bu-
siness dialogue,
including
climate-related
topics
303
Baloise Group Annual Report 2023–50–55–60–65–70–45–40–35–30–25–20–15–10–50 % Report on non-financial matters
Additions to the responsible investment
strategy in 2023
In 2023, we focused on the implementation of the
advanced RI strategy. Building on the general responsible
investment strategy, an advanced responsible invest-
ment strategy was developed for liquid direct invest-
ments, investments in target funds and for some of the
private assets, which covers the following:
● Additional exclusions for companies and target
funds relating to compliance with international
standards, such as the UN Global Compact, and
revenue from tobacco, conventional oil and gas
and conventional weapons
● Additional exclusions for government bonds in
the areas of human rights and climate
● A best-in-class approach based on the ESG
(environmental, social and corporate governance)
performance of companies and government issuers.
Under this approach, the portfolio is designed to
perform better than its benchmark with regard to
sustainability by avoiding the worst bonds in the
peer group. As part of the defined strategy, the
worst 20 per cent of issuers or target funds within
the respective sectors or peer group are excluded,
based on the MSCI ESG universe.
● Direct corporate dialogue as an extension of the
active ownership activities. We seek constructive
dialogue with companies through our direct engage-
ment activities, with the aim of addressing specific
sustainability issues. The Baloise departments
involved analyse the individual engagement oppor-
tunities based on data supplied by MSCI ESG Re-
search LLC and publicly accessible documentation.
● Addressing principal adverse impacts as required
under the Sustainable Finance Disclosure Regulation.
Based on these changes, updated Baloise responsible
investment policies for insurance assets and for external
customers and investment funds were published, along
with the updated active ownership policy.
www.baloise.com/policy-insurance-funds
www.baloise.com/policy-third-party-assets
www.baloise.com/policy-active-ownership
Responsible real estate management
We are one of the biggest property owners in Switzerland.
According to the Federal Office for the Environment
(BAFU), buildings are responsible for around a quarter of
all greenhouse gases emitted in Switzerland. As a respon-
sible investor, we recognise that we have an obligation
to help to reduce CO2 emissions from real estate in
accordance with the global climate strategy. We aim to
make our property portfolio in Switzerland more sustain-
able and to improve the expected risk-return profile. ESG
considerations play an important role across the whole
real estate value chain. This begins with the planning
and development of building projects or the acquisition
of portfolio properties and continues through to opera-
tional management and renovation, demolition or divest-
ment. At the core of the value chain is a resilient property
portfolio in which lifecycle costs are reduced through
proactive planning and action. We are working to system-
atically integrate the relevant sustainability-related
areas. A first step towards this is the new policy that was
introduced on 1 January 2023. It describes how the Baloise
real estate team should implement a forward-looking
environmental and energy policy for the properties held
directly by the Swiss insurance units. In 2023, work began
on the integration of an energy management system
(EMS) in order to have real energy consumption values
available throughout the Group.
For further details, see the Baloise responsible invest-
ment policy for real estate.
www.baloise.com/richtlinie-immobilien (only in German)
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Report on non-financial matters
The next steps
Going forward, we will continue to press ahead with the
development of our responsible investment strategy. We
will also continue implementing the requirements of the
Sustainable Finance Disclosure Regulation (Regulation
(EU) No. 2019/2088). The collection and evaluation of
climate-related data for financial assets will also play an
important role. Over the course of 2024, we will continue
to develop the climate roadmap we previously
announced. The transparency requirements for financed
emissions will also be expanded in connection with
Baloise’s TCFD (Taskforce for Climate Related Financial
Disclosure) reporting. TCFD offers a framework for compa-
nies to report on the financial impacts of climate change
on their business activities. The implementation of the
expanded active ownership activities will also be a
priority. A new active ownership review is planned. A
further focus will be on the strategic development of our
advanced RI strategy. We are keeping a very close eye
on regulatory developments in the EU and Switzerland
so that we can align our activities accordingly
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Report on non-financial matters
Responsible underwriting
Measures
● To be a reliable partner for customers whose business
model is currently undergoing a transformation
● To implement the Principles for Sustainable Insurance
(UNEP FI PSI) www.unepfi.org/insurance/insurance
● To manage potential ESG-related losses and risks for
Baloise
Effectiveness of the measures
● Integration of ESG criteria into the underwriting guide-
lines and dialogue on this subject with our customers
● Support for the transition of the real economy to
sustainable business models
● Expanded risk perspective though identification and
mitigation of ESG risks, and adaptation
● To make use of opportunities
● Further development of our core business to ensure it
remains viable in future
Key performance indicators
Our underwriting policy takes account of environmental,
social and other criteria. The Group-wide results of the ESG
assessments (page 307) serve as indicators for measuring
the effectiveness of environmental and social initiatives.
Sustainability criteria in the
underwriting policy
Through our products and services, we can influence the
behaviour of the companies and individuals whose activities
we support and help them to become more sustainable. We
see ourselves as a reliable insurance partner to customers
whose business model is currently undergoing this transition.
We aim to work with them as partners, understand the chal-
lenges they face with regard to sustainable development,
and support them.
In August 2020, we signed up to the Principles for Sustain-
able Insurance (PSI), which include the gradual integration
of sustainability aspects into our underwriting guidelines.
The process described shows how we are actively working
to live up to our commitment.
The integration of sustainability aspects into our under-
writing guidelines is a risk management instrument that
can be used to support the transition of the real economy
to sustainable business models, to minimise potential losses
and to optimise risks for Baloise. We actively manage critical
ESG risks in our underwriting policy. Where they exist, we miti-
gate them and where they could arise, we avoid them. This
view of risk is complemented by the exploitation of oppor-
tunities. For example, we are committed to encouraging
the use of renewable energy sources through our insurance
solutions.
Managing identified risks
Through Group-wide collaboration between the non-life,
life and group life insurance businesses, as well as the risk
management and sustainability teams, we have identified
the economic activities that represent high risks in connec-
tion with the following areas:
● Climate change
● Environmental damage including air or water pollution
● Protected species and areas
● Biodiversity
● Non-sustainable practices
● Human rights and employment rights
● Product quality and safety
● Bribery and corruption
● Healthcare.
These risks are not only a reputational risk but also a finan-
cial risk for us, as they affect customer behaviour, climate-re-
lated major loss events, the valuation of investments and the
disruption of business operations for us and our customers.
The identified economic activities are assessed for the above
risks once they exceed a certain threshold. The use of a
threshold ensures that the customer relationships that are
relevant in an ESG context are assessed (see ‘Risk manage-
ment’ chapter from page 25 onwards).
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Baloise Group Annual Report 2023 Report on non-financial matters
The above exclusions are consistent with our responsible
investment policy. Other economic activities may also be
subjected to an ESG assessment involving the department
concerned, sustainability experts and external data.
During the transition phase, the development of a
sustainable business model will be discussed and agreed
with existing customers in the above areas so that we can
continue to insure them. It is important to engage in this
dialogue in order to understand the individual business
model in the context of the relevant industry and deter-
mine how it fits in with the underwriting guidelines. Unless
otherwise contractually agreed, the transition phase is three
years. An important criterion that we consider in this phase
is the development of a transparent disclosure process,
including objectives and progress towards achieving them.
We also look at commitments entered into, such as recog-
nised disclosure standards or industry practices in relation
to sustainability. This is another important criterion as it
enables us to gauge the progress of our customers towards
having a sustainable business model.
Group-wide results of the ESG assessments in
underwriting in Germany, Belgium, Luxembourg and
Switzerland
2023
2022
Non-life
Life
Non-life
Life
Rejection of request
following assess-
ment by a sustaina-
bility manager and/
or the UW ESG
Advisory Group
Acceptance of
request following
assessment by a
sustainability
manager and/or the
UW ESG Advisory
Group
Total requests
5
32
37
1
6
7
5
1
70
75
17
18
The above figures refer exclusively to new business. In Germany, Life business refers only
to private customers, who are not subject to this assessment. The reduction in numbers
is due to the additional experience acquired since ESG criteria were first implemented
in 2022.
Assessment process
Since 2022, an assessment process has been in place for
actuarial sustainability risk management that includes
the evaluation of risks based on exclusions and sensitive
areas. The assessment process involves both the relevant
departments and our sustainability experts. When a request
for a quotation is received, the economic activity is exam-
ined by the department on the basis of the defined exclu-
sions and sensitive areas. Part of this review is automated
and part is done manually. If the activity to be insured is a
defined exclusion or a sensitive area, the department makes
an assessment of the risk. This assessment considers the
nature of the requested insurance benefit, the requested
insurance volume, the company’s revenue and details of
its activity. If the revenue and insurance volumes exceed a
defined threshold, a review must be carried out within the UW
ESG boards of the relevant national units that are involved
in the decision-making process. These decisions are docu-
mented. The decision-making bodies of the national units
are made up of senior managers from the insurance and
risk management departments and sustainability experts.
Recorded training sessions are available internally, which are
designed to promote assessment expertise in the depart-
ments. The sustainability experts of the national units also
have a software solution to help them assess ESG risks in
companies (see ‘Risk management’ chapter from page 25
onwards).
Transition and exclusions
In 2022, we began integrating environmental, social and
corporate governance criteria into our underwriting guide-
lines. This means that certain economic activities are subject
to an ESG assessment as a condition of Baloise continuing
to provide insurance, or that existing customers in these
defined risk areas continue to receive insurance cover during
a transition period. The plan for structured dialogue with
existing customers and their transition phase is still being
developed. So far, no accounts have been terminated as a
result of this assessment (or the transition periods are still
ongoing) and the relevant processes are currently being
finalised.
Certain sections within the value chain of the following
economic activities, such as production, manufacture and
extraction, are excluded:
● Fossil fuels
● Tobacco products
● Infrastructure and dam construction with critical
impact on protected areas in non-OECD countries
● Controversial weapons
● Fast fashion.
307
Baloise Group Annual Report 2023 Information on environmental matters
How we create value for the environment
Sustainability KPIs – Environment
310
316
Baloise Group Annual Report 2023
309
Report on non-financial matters
How we create value
for the environment
Measures
● Baloise Climate Roadmap mit Zielsetzungen in den
Effectiveness of the measures
● Supporting the efforts of Switzerland and the Euro-
Baloise climate roadmap with targets in the areas of
operational, financed and insured emissions
● Disclosure of the carbon footprint since 1998
● Commitment to use natural resources in a responsible
way and to reduce the carbon footprint of the business
on an ongoing basis with ultimate responsibility resting
with the Corporate Executive Committee and the Board
of Directors
● Responsible investment that includes a climate policy
and a real estate policy; focus topics in relation to the
environment as part of our active ownership strategy
● 100 per cent demand for renewable energy within the
energy mix we can control
● Becoming a partner of the Swiss Climate Foundation,
with a seat on the advisory council since 2021
pean Union (EU) to reach net zero by 2050, through the
climate roadmap
● Continuously reducing the absolute and relative
carbon emissions of our business activities since 2000
by more than 75 per cent
● Raising awareness of environmental issues and
educating staff about relevant topics
● Promoting certified carbon offset projects since 2020
● Promoting renewable energies through our own energy
consumption, investments and insurance products
● Combating climate change through responsible invest-
ment including climate strategy and dialogue with
companies on ESG issues, focusing on: the green transi-
tion, reducing carbon emissions, and biodiversity
● Climate change mitigation and promoting other envi-
ronmental aspects by integrating ESG criteria into
underwriting and product management
● Helping to combat climate change through the inclu-
sion of environmental criteria when selecting suppliers
and their products and services
● Financial support via the Swiss Climate Foundation for
small and medium-sized enterprises that contribute to
climate change mitigation
Key performance indicators
In addition to the indicators used in our core business (under-
writing policy, responsible investment), key figures relating
to our environmental footprint and the calculation of our
carbon emissions in accordance with the Greenhouse Gas
Protocol Corporate Standard (page 316) serve as indicators
for measuring the effectiveness of environmental initiatives.
How we create value for the environment
We have had our own environmental mission statement
since 1999. From the outset, it was important to embed
sustainability throughout the Company and in all day-to-day
business activities. The environmental mission statement
310
became an integral element of the Baloise value creation
model for sustainable development in 2018 and was thus
incorporated into the Company’s overall sustainability
management. The environmental mission statement is part
of our efforts to create value in relation to the environment.
We commit to the achievement of the 2015 Paris Agreement
and the UN’s sustainable development goals (SDGs), and
support them. Our particular focus is on no. 7 (affordable and
clean energy), no. 9 (industry, innovation and infrastructure),
no. 12 (responsible consumption and production) and, as a
priority, no. 13 (climate action).
Baloise Group Annual Report 2023 Report on non-financial matters
Climate roadmap
We are committed to the targets of the Paris climate agree-
ment and support the efforts of Switzerland and the Euro-
pean Union (EU) to reach net zero by 2050. Since 2000, we
have reduced our operational emissions by more than 75 per
cent. In a further step, we want to reduce these emissions by
a further 25 per cent by 2030 compared to 2022. In the year
under review, the emissions of all scopes recorded in 2022
were reviewed and tested for plausibility on the basis of
better and more reliable data. The corrected figures for 2022
and the figures for 2023 are contained in the sustainability
KPIs table on page 316. Managing investments and insured
risks in accordance with climate criteria is an important
lever in reducing the consequences of climate change. This
requires large amounts of good quality data, which is not
yet sufficiently available. For this reason, our first step will
be to establish a reliable base of data which we will then
use to determine reduction targets for our investment and
insurance portfolios by 2025.
Principle
The environment is one of the most comprehensive resources
in the Baloise value creation model. In managing this
resource, our environmental policy focuses on promoting
renewable energies and developing infrastructure in a
way that adds value, and taking action to combat climate
change. We focus on the responsible use of natural resources
and the continuous reduction of CO2 emissions within the
Company and within our business activities. Our responsi-
bility to the environment and to the associated idea of value
creation relates to our own energy requirements but also
extends to our investments, the procurement of products
and services, and our underwriting policy
Organisation
The Corporate Executive Committee bears ultimate respon-
sibility in environmental matters and thus for the impact
of Baloise on climate change, and is supervised in this
role by the Board of Directors. Each national organisation
has a coordination unit that implements environmental
measures. The asset management team at Baloise has the
task of implementing responsible investment measures. The
implementation of ESG criteria in Group-wide underwriting
guidelines and product management is the responsibility of
each national organisation. The integration of environmental
aspects into the purchasing process is coordinated by Group
Procurement and implemented in all national subsidiaries.
The aspects mentioned above are discussed and coordi-
nated centrally in the Group-wide sustainability network. The
rest of the process is the same as for sustainability govern-
ance (see Annual Review page 24 onwards).
Environmental footprint
The total energy and resource consumption revealed by the
carbon footprint shows the amounts used by our large office
buildings at all sites and at our computer centres and sales
agencies in Switzerland. The figures reported thus relate to
the energy and resources used by more than 85 per cent of
the 8,020 people working for the Baloise Group. Both total
consumption of heating and total electricity consumption
(including external computer centres) have been reduced
by 30 per cent over the last ten years through various ener-
gy-saving measures. With the objectives of the Paris Agree-
ment in mind, a wide range of energy-saving measures have
been analysed which will be implemented in each country
over the coming years.
Continuous reduction of CO2 emissions since 2000
Climate change is without doubt the challenge of the
century. Since the 1997 Kyoto conference in Japan, we
have been publishing key figures on energy and resource
consumption and have been calculating our absolute and
relative CO2 emissions in accordance with the Greenhouse
Gas Protocol Corporate Standard (GHG Protocol Corpo-
rate Standard) since 2022. Historically, our emissions data
has been reported in accordance with the directives of the
Association for Environmental Management and Sustain-
ability in Financial Institutions (VfU). We also document the
action we take each year in relation to the sustainable use
of resources. The 2015 Paris Agreement, the successor to the
Kyoto Protocol, has spurred us on in our ambition, and future
measures will be based on the Paris objectives and the UN’s
sustainable development goals. Details of our CO2 emissions
are shown with the sustainability performance figures on
page 316. The historical calculations of our emissions can
still be seen in previous years’ reports:
www.baloise.com/annual-report
www.baloise.com/oekobilanz_2019-2021
https://ghgprotocol.org
www.vfu.de
In addition to optimising our processes, cutting our emis-
sions and offsetting our carbon footprint, the promotion
of climate action-related innovation is a key priority for us.
Since 2021, we have been investing the net annual amount
from the CO2 levy distribution through our membership of
the Swiss Climate Foundation. The foundation uses these
funds to support SMEs in Switzerland and Liechtenstein that
develop innovative climate solutions or improve their energy
efficiency. In 2023, the funding contribution amounted to
around CHF 230,000.
311
Baloise Group Annual Report 2023 Report on non-financial matters
Climate protection contribution 2023
Since 2020, we have been retroactively offsetting our CO2
emissions in accordance with the GHG Protocol that cannot
yet be avoided through savings and optimisations. For 2023,
financial contributions were made to reduce around 11,000
tonnes of CO2 by supporting three certified climate protec-
tion projects. The projects were audited and recognised for
the modalities and procedures of the following standards:
● Verified Carbon Standard (VCS),
● The Climate, Community & Biodiversity Alliance (CCB
Standards),
● ISO 14064-2, validated by TUEV NORD.
www.baloise.com/co2-klimaschutzbeitrag-swiss-climate
(only in German)
Environmental measures: Climate-friendly office
buildings and working
As we are an insurance company, our operations are not
fundamentally energy-intensive by comparison with a manu-
facturing company, for example. At our sites, we predomi-
nantly require energy for electricity and heating.
We apply the latest building standards and renovation
methods to ensure that our office buildings are climate-
friendly, and operate them in as resource-efficient a manner
as possible. We now get all our electricity from 100 per cent
renewable sources in Switzerland, Germany, Belgium and
Luxembourg in the buildings where we control our own elec-
tricity mix.
All sites also have centralised recycling stations for paper,
aluminium, PET and other waste. These replace the individual
waste containers at individual workstations. All employees in
Luxembourg, Germany and Belgium and at Group headquar-
ters in Switzerland have been given reusable drinks bottles.
Switzerland: New Group headquarters and various
optimisation measures
The construction of the new headquarters in Baloise Park
complies with the standards for sustainable construction
in Switzerland (SNBS) and so comfortably exceeds the legal
requirements. District heating already covers 100 per cent of
the heating needs of the office in Basel. In the staff restau-
rant, our suppliers provide meat only from free range or free
roaming animals.
We have been producing electricity from our own photo-
voltaic system since 2014, covering around 0.5 per cent of
the demand at the Group headquarters in Basel. The current
system occupies the whole of the available roof area that is
suitable for PV systems and is designed to last 25 years. In
2023, the photovoltaic system on the roof of our Group head-
quarters in Basel produced 18,802 kWh (2022: 20,877 kWh)
solar energy. This is equivalent to the energy requirement
of more than four average four-person households per year.
The energy-saving measures we implemented in response
to the appeal by the Swiss Federal Council on 1 October 2022
had a significant impact on our heating energy compared
with 2021 and 2019. By reducing the room temperature in
312
our offices in Baloise Park, we reduced our energy use by 12
per cent in the last quarter of 2022 relative to 2019. This is a
saving of more than 100,000 kWh in district heating, equiv-
alent to the consumption levels of approximately 30 four-
person households. These figures are even more impressive
when compared against 2021, but the offices were used a
lot less during that year due to COVID-19 measures, so a
comparison with 2021 is not very meaningful.
We also implemented the following technical measures at
the existing building at Baloise Park in 2022 in cooperation
with AUE Basel-Stadt (Office for Environmental Protection
and Energy).
This will save an estimated 50,000 kWh per year in elec-
tricity. At our agencies in Switzerland, we have also switched
to flex office arrangements at various new premises or when
offices have been modernised, thus optimising running costs
and consumption.
Luxembourg: ‘Wooden’, our new office building
We have moved into our new office building in Leudelingen,
Luxembourg, the first in the country to be made entirely of
wood. The wood used in the building, which has been given
the name Wooden, is sourced exclusively from sustainably
managed forests in Luxembourg. The building is equipped
with a photovoltaic system and has been given a BREEAM
Excellent rating. In addition to its structural qualities, Wooden
will also be the second building in Luxembourg to take part
in the WELL Building Standard® certification process. This
signifies that particular emphasis is given to the wellbeing
of people in the planning and realisation of the building. The
new office building is easier to get to by public transport.
All lights are LED and most are controlled by movement
detectors. As part of the national waste management plan
and the national plan for sustainable development, we are
working with ‘SuperDrecksKëscht® fir Betriber’, an initiative
that supports companies and other organisations in imple-
menting environmentally friendly waste management and
waste avoidance strategies.
Germany: Optimisation measures in the vehicle fleet and
buildings
We continued to roll out our company car scheme for senior
office-based managers in 2023, switching from diesel to elec-
tric cars (around 18 per cent of those eligible for a company
car). At Baloise in Germany, we decided against a transitional
arrangement that would have included hybrid vehicles. We
carried out a survey among sales force employees in 2023 to
help us develop measures to speed up the implementation
process and to increase awareness and acceptance.
A 99 kWp photovoltaic system that generates around
87,000 kWh/year, depending on the weather, was brought on
stream at the Bad Homburg office. This is primarily intended
to cover the building’s baseload.
Our commitment to sustainable development in Germany
was recognised by the public again in 2023, and we won
an award for our sustainability report for the third year in
Baloise Group Annual Report 2023 succession. In the Zielke ranking of sustainability reports
carried out by Zielke Research Consult GmbH, Baloise in
Germany achieved fourth place out of 50 insurance compa-
nies – another substantial increase in our score compared
with the previous year.
Belgium: From electric cars to greenfield site
We began transitioning the company car fleet from petrol
and diesel to electric vehicles in 2023. All new company
cars added to the fleet since July 2023 have been electric.
Under Belgian tax law, company car fleets will have to be
completely electric by 2028, so we are increasing the number
of charging stations at all our company sites. All buildings,
including those that are leased, are run solely on energy
from renewable sources. We are also installing solar panels
on our buildings in Antwerp and will also collect and use
rainwater there, as we do at the office in Brussels. We have
also raised awareness about our business travel. We are
reducing the number of short-haul flights and using public
transport wherever possible. We also encourage employees
who commute to switch to more sustainable transport
alternatives. During the annual Sustainable Transport Week
campaign we encourage staff to travel by train, bus or bike
. In 2023, we participated for the first time in No Mow May,
both on the Company’s own premises and by encouraging
employees to join in at home, rewarding those who did so.
Employees and the public
We support organisations that focus on environmental
protection and climate action, both by providing funding
and by allowing our employees to volunteer. The environment
and the services of natural ecosystems are a cornerstone
of the future, long-term success and continued existence
of our Company.
www.baloise.com/csr
We also focus on raising the awareness of our staff and
providing them with background knowledge and informa-
tion on various topics relating to sustainable development,
including what they can do at home. In Luxembourg, for
example, we work with our partner OUNI (operator of Luxem-
bourg’s first packaging-free grocery store) to educate our
employees on environmentally responsible behaviour. In
Germany, the Green Team is on hand to offer tips and advice to
help employees adopt a sustainable and eco-friendly lifestyle
at work and at home. This provides a forum for staff to share
their knowledge and ideas with others. In Switzerland, the
second Sustainability Day was held for trainees from all the
Swiss offices in 2022. The trainees worked on their own envi-
ronment projects and presented their results at an internal
conference in May 2023. The aim was to provide them with
information about combating climate change, and to link and
apply this knowledge to the Baloise business model.
Employees are aware of our ecological targets and the
most important initiatives for achieving them. They are kept
Report on non-financial matters
regularly informed about the implementation of the envi-
ronmental mission statement and encouraged to suggest
measures of their own. To encourage our employees to
choose climate-friendly forms of transport, further measures
have been introduced:
● Since November 2021, only electric vehicles are avail-
able to senior managers in Germany as a company car.
The cash alternative is also still available.
● A bike leasing service has been introduced for
employees in Belgium and Germany.
● Employees and customers can charge their electric
cars in Basel and Zurich (Switzerland) using solar
power.
● An internal electric car fleet including charging station
at the head office of Baloise’s banking business (Solo-
thurn, Switzerland) is available to all employees.
● Loss adjusters in Switzerland have been provided with
electric bikes to get them from A to B.
● The use of public transport is encouraged through
subsidised tickets in all national units.
● In Luxembourg, electric cars are freely available to
employees at work.
We work hand in hand with other companies, organisa-
tions and public authorities across all countries in which
we are active to find solutions to environmental problems.
In Luxembourg, we teamed up with etika, an association
for alternative financing that provides us with advice on
sustainability issues, raising employee awareness and devel-
oping sustainable products. We particularly encourage the
sharing of information within the sector through member-
ship of insurance associations such as the Swiss Insurance
Association (SIA), the German Insurance Association (GDV),
Assuralia in Belgium and the Association of Insurance and
Reinsurance Companies (ACA) in Luxembourg. We maintain
an open dialogue with the public and regularly report on
environmental projects and what has been achieved.
313
Baloise Group Annual Report 2023 Promotion of renewable energy
We offer our private and business customers insurance prod-
ucts for photovoltaic systems and more climate-friendly
heating systems. It is important to us to offer the right
protection for every system. In this way, we are encouraging
greater use of energy from renewable sources and offering
our customers the protection they really need.
www.baloise.ch/blog-06-22
www.baloise.de/GAP-Versicherung
Responsible core business
Responsible investment
Our responsible investment policies set out the rules for the
integration of environmental, social and corporate govern-
ance criteria into investment decisions. These criteria also
apply to self-managed assets of external customers (see the
‘Responsible investment’ chapter from page 300 onwards).
Responsible underwriting
We also began including environmental, social and corpo-
rate governance criteria in our underwriting guidelines in
2022. That means we can not only offer our customers prod-
ucts and services that promote sustainable development,
but also optimise the risks within the community of policy-
holders (see the ‘Responsible underwriting’ chapter from
page 306 onwards).
Carbon footprint
Our carbon footprint was reviewed, expanded and restruc-
tured in 2022. It is now based on the internationally recog-
nised Greenhouse Gas Protocol Corporate Standard (GHG
Protocol Corporate Standard). Data collection software was
introduced to centralise and automate the consolidation
and extrapolation of the data and the calculation of the
emissions. This is essential to ensure the most complete
possible reporting of our environmental performance indi-
cators (see ‘Key figures’, page 316).
Report on non-financial matters
Innovative, environmentally friendly products
and services
When it comes to sustainability innovations, Baloise focuses
on the Home and Mobility ecosystems. Alternative solutions
that have a less harmful impact on the climate and envi-
ronment are especially relevant for our customers in the
areas of transport and the home. For example, we offer our
customers insurance for electric vehicles, solar panels and
other products that help to protect the climate.
www.baloise.com/sustainability-innovations
Green transport
We provide comprehensive protection for our customers’
electric vehicles and accessories through our Electra supple-
mentary cover. If the charging point is damaged or stolen, for
example, Electra covers the costs incurred. The same goes for
the charging accessories. Our Electra supplementary cover
also provides protection if the charging card or charging app
is misused or if the battery is damaged.
www.baloise.ch/elektroauto-versicherung
The Drive Electric product is designed to support our
customers after they have bought a car in order to ease
them through the transition to an electric or plug-in hybrid
vehicle. Customers who take out this insurance, which is
offered in partnership with Enovos and diego, receive a free
charging card that can be used at 180,000 charging points
throughout Europe. Customers can also benefit from the
personal support of an expert who will guide them through
the process of selecting and installing a private charging
point at home, and through all the dealings with public
authorities (such as applying for government grants).
www.baloise.lu/electric-car
We promote the use of ‘SMART repair’ for damaged vehi-
cles. Thanks to our partner network of workshops, we can
offer eco-friendly repairs of the highest quality. This not only
reduces greenhouse gases, but also conserves resources.
www.baloise.be/fr/contact-service/premiumplus
Customers of Insurtech FRIDAY contribute to combating
climate change
Since October 2018, FRIDAY customers have been able to
make their own contribution to combating climate change
by offsetting the CO2 emitted by their cars. FRIDAY (Baloise’s
online and mobile insurer in Germany) offset 3,767 tonnes of
CO2 between April 2022 and March 2023, contributing more
than EUR 45,000 to finance climate action projects through
its FRIDAY+ECO product, developed in collaboration with
the respected climate action organisation myclimate. The
climate change mitigation projects selected for the offset
meet the highest standards (Gold Standard, CDM, Plan Vivo).
www.friday.de
314
Baloise Group Annual Report 2023 Adjustments to our carbon footprint for 2022
The way in which our CO2 emissions are calculated was
revised in 2022. Due to adjustments to the units used for
the emissions factors, the key figures for all scopes of our
carbon footprint have changed:
● Scope 1 rose from 3,659 tCO2e to 4,738 tCO2e. This
increase is predominantly due to adjustments in the
calculation of emissions from our vehicle fleet. Since
some offices supplied their data in kilometres and
others in litres, adjustments had to be made to the
composition of the formulas for the calculation.
● Scope 2 rose from 729 tCO2e to 1,004 tCO2e. This discrep-
ancy is due to the emissions factors being adjusted
and mainly affected the information on district heating.
● Scope 3 fell from 7,485 tCO2e to 4,983 tCO2e due to
updated formulae and emissions factor units.
Overall, this resulted in a reduction from 11,873 tCO2e to
10,275 tCO2e across all scopes in 2022.
The carbon footprint includes our measured, collected
and estimated direct and indirect environmental key
figures. The emissions are measured in metric tonnes
of carbon dioxide equivalent (tCO2 e). Direct emis-
sions are produced from sources that we can control
ourselves, while indirect emissions are the result of our
activities but are generated by sources that belong to
other companies or are controlled by other companies.
The organisational limits for the calculation of operational
emissions were determined in accordance with the opera-
tional control principle. This control includes the ability of
Baloise to introduce and implement operational strategies.
The carbon footprint for Baloise thus covers our sites in Swit-
zerland, Belgium, Germany and Luxembourg.
Scope 1 emissions include the use of fuel to heat build-
ings, the electricity generated from renewable sources at
our sites, the Company’s own vehicle fleet and the loss of
coolant at our sites.
Scope 2 emissions cover the use of purchased electricity
and district heating at the sites. This scope also includes the
electricity consumption of electric cars used for company
business. Scope 2 emissions were calculated using the loca-
tion-based method.
Scope 3 emissions currently include paper and water
consumption, the electricity consumption at the data
centres we use, fuel-related and energy-related emissions,
energy used by our employees working from home, the refuse
we generate, and business travel and commuting by our
employees.
Other categories are either not relevant to us or the
quality of the available data is not yet adequate.
We use emissions factors provided by Swiss Climate AG,
a consultancy firm operating in the areas of CO2 manage-
ment, sustainability and energy, to calculate the emissions
across all scopes. Swiss Climate AG has experience in deter-
mining science-based emissions factors and has these inde-
pendently audited.
www.swissclimate.ch
Report on non-financial matters
315
Baloise Group Annual Report 2023 Report on non-financial matters
Sustainability KPIs – Environment
Environment
CO2 emissions
Total emissions
Scope 1 emissions
Scope 2 emissions
Scope 3 emissions
Change in operational emissions %
Energy
Share produced from
renewable sources 2
Electricity consumption
Heating consumption
Water consumption
Paper
%
kWh
kWh
m3
Unit
2023
Relative
2022
Relative
Reference
tonnes CO2 equivalent
11,066.7
tonnes CO2 equivalent
tonnes CO2 equivalent
tonnes CO2 equivalent
4,078.3
631.9
6,356.0
3.2
Page 314
1,336.4 kg /
employee 3
–
–
–
–
Page 311
1,379.9 kg /
employee 3
–
–
–
–
10,724.7
4,738.3
1,003.9
4,982.5
–
186,017.0
100
2,029.9 kWh /
employee
18,109,629.1
2,256.7 kWh /
employee
100
16,279,426.3
11,077,839.8
77.9 kWh / m2
12,176,424.9
65.5 kWh / m2
38,743.6
22.0 l /
employee / day
32,424.2
18.4 l /
employee / day
Energy reference area 1
EBF m2
142,193.6
Total paper consumption
tonnes
335.8
44.0 kg / employee
335.2 44.0 kg / employee
Recycled
Chlorine-free-bleached
External printed matter
%
%
%
Photocopy paper consumption million A4 sheets
Business travel
Total business travel
million km
Air
Car
Public transport
Refuse
%
%
%
51.6
17.0
24.2
25.6
26.1
8.2
69.3
22.5
–
–
3,186.0 sheets
A4 / employee
3,249.5 km /
employee
–
–
–
45.0
25.8
22.3
23.2
24.1
6.2
76.1
17.6
–
–
2,884.3 sheets
A4 / employee
3,006.5 km /
employee
–
–
–
Total amount of refuse
tonnes
510.1
63.6 kg / employee
400.4 49.9 kg / employee
Paper
Other recycled materials
Special waste
Misc. waste / refuse
%
%
%
%
1 Including the insurance branch offices in Switzerland.
2 At locations for which Baloise can choose the electricity mix.
3 Including the total number of employees in the Baloise Group.
35.1
3.9
0.2
60.8
–
–
–
–
45.9
4.6
0.2
49.3
–
–
–
–
Page 312
Page 313
Page 312
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Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
317
Report on non-financial matters
316
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
317
This page has been left empty on purpose.
Information on social matters
How we create value for our employees
How we create value for society
Sustainability KPIs – Social
320
330
334
Baloise Group Annual Report 2023
319
Report on non-financial matters
How we create value
for our employees
Measures
● Modern and future-oriented working models
● Fair and competitive basic salaries as well as attractive
profit-sharing programmes and employee retention
schemes
Effectiveness of the measures
● Healthy and financially secure employees
● Strong sense of loyalty in the workforce, resulting in
long average periods of employment at the Company
● Opportunity to establish an extensive network and, as
● A work environment that promotes good health
● A learning organisation that gives employees a say in
the further development of their professional skill set
a result, to work in different positions over time
● Increasing the employability of Baloise employees
● Collaboration between employees enables us to
● A culture of curiosity, integrity and constructive
criticism as the foundation for the creation of a
comprehensive network within Baloise
● Modern corporate executive development focusing
on areas such as reflection and self-organisation
● Promotion of diversity and strategic
staff development planning
● Open innovation process for all employees
respond quickly and flexibly to a changing business
environment and customer requirements
● Modern leadership with flat hierarchies and coaching
role for managers
● Improved customer experience thanks to employees
with skill sets that are focused on future needs,
working in diverse teams
● Innovative solutions for our customers, supported by
employees with a high level of personal responsibility
Key performance indicators
Satisfaction metrics (page 321) are the most important
indicator used to measure the effectiveness of the many
employee-related initiatives. We also use other indicators
for topics such as health and safety (page 325), diversity and
inclusion (page 325), corporate social responsibility (page
326) and social partnership (page 327).
Strategic relevance of capable and motivated
employees
Employees support implementation of the strategy
Our success relies on skilled and customer-focused
employees working with dedication and commitment in
areas that contribute to the implementation of our strategy.
That’s why we want to be and remain an employer of choice.
We have set ourselves a very ambitious employee-related
target for Season 2 of our Simply Safe strategy: we want
to be clearly perceived by our employees as one of the top
employers in Europe by 2025. Specifically, we are aiming to
be among the top 5 per cent of employers for employee
satisfaction. The new target is considerably more ambitious
than in the first strategy period, particularly since we now
also include employers from outside the financial sector in
the ranking.
This is also reflected in our ranking position. We began the
new strategy period among the top 36 per cent of employers
in Europe and were able to maintain this starting position
in 2022 in what was a challenging environment. In 2023, our
survey results even improved slightly. Set against a general
decline in employee satisfaction in Europe, we thus ended
2023 in the top 29 per cent of employers, 7 percentage points
higher than the previous year.
Continuity of measuring methodology
In 2023, we retained the new measuring method that was
introduced at the start of Season 2.
● All employees are surveyed twice yearly.
● A more extensive survey is carried out every two years,
which meant one was due at the end of 2023.
● The questionnaire consists of questions that apply to
the whole Group and others tailored to specific busi-
ness units.
320
Baloise Group Annual Report 2023
Report on non-financial matters
● There are also numerous opportunities for employees
to add comments, which are analysed with the help of
artificial intelligence (AI).
Our employee key figures at a glance
● Transparency and dialogue are important to us. For
Employees, total
that reason, the results of the surveys are broken down
by team and made accessible to all employees, not just
to managers.
Average age in years
Average years of service
Staff turnover (per cent)
Employee satisfaction survey (November 2023)
2023
2022
Percentage of employees with access to the
share programme
Personnel expenses (CHF million)
Distribution of employees by gender
2023
8,020
43.9
12.4
7.1
44.2
1,024.5
2022
8,025
43.8
12.5
7.4
43.9
968.6
Per cent
Response rate
Committed and satisfied employees 1
Women
Men
77
81
82
80
75
79
78
79
Female
Male
Not specified
2023
Per cent
2022
Per cent
3,582
4,437
1
44.7
55.3
0.01
3,553
4,467
5
44.3
55.7
0.06
1 Employee happiness at work measures the average responses of our employees to
the question ‘How much do you like working at Baloise?’ on a scale from 0 to 100 (‘not
at all like’ to ‘totally like’). For this purpose, the answers of all employees are recorded
on a 5-point scale and converted on a linear basis to a scale of 0 to 100. Employees
who ticked a positive answer (4 or 5) to the satisfaction question are categorised as
‘committed and satisfied’.
Age distribution
In absolute terms, the results of our employee survey in
2023 remained stable or improved slightly. This was an
extremely encouraging result given the persistently chal-
lenging economic and geopolitical environment in Europe.
Compared to the steadily downward trend in employee
satisfaction, we were thus able to significantly improve our
ranking against a European benchmark.
Company-wide and team-specific measures
Moving our employee satisfaction levels closer towards our
target remains a major challenge, so we have developed
numerous improvement measures based on the results of the
more comprehensive survey that took place as scheduled at
the end of 2023. There is a particular focus on team-specific
measures, as the findings of the employee survey are made
available at the level of the smallest possible unit (mostly
team level). For the first time, this year’s survey included ques-
tions about the Baloise Code – a code of conduct developed
by the employees themselves. www.baloise.com/code
In addition, the most important areas where action is needed
were defined for all business units and specific measures
were developed. These will now be gradually rolled out. Exam-
ples include increasing the reliability of our IT systems and
introducing new ways of working in certain departments. We
are working together to ensure that our employees value us
as a leading employer, even in an environment that is likely
to remain challenging for the foreseeable future.
Over 56
46 to 56
35 to 45
Below 35
Total
Number
Per cent
Female
Male
Sub-total over 56
Female
Male
Not specified
Sub-total 46 to 56
Female
Male
Sub-total 35 to 45
Female
Male
Sub-total below 35
577
913
1,490
1,060
1,286
1
2,347
922
1,161
2,083
1,023
1,077
2,100
8,020
7.2
11.4
18.6
13.2
16.0
0.01
29.3
11.5
14.5
26.0
12.8
13.4
26.2
100
Distribution of full and part-time
Employment status
Gender
Number
Per cent
Full-time
Part-time
Female
Male
Not specified
Sub-total full-time
Female
Male
2,108
3,907
1
6,016
1,474
530
Sub-total part-time
2,004
Total
8,020
26.3
48.7
0.01
75.0
18.4
6.6
25.0
100
321
Baloise Group Annual Report 2023 Report on non-financial matters
Trainees and apprentices
Staff retention
Switzerland
Germany
FRIDAY
Luxembourg
Liechtenstein
Total
2023
2022
Recovery and leisure time
242
53
6
4
–
257
52
5
4
1
305
319
As a responsible employer, the health of our employees is
very important to us. Our working conditions ensure they
enjoy a good work-life balance. There were no breaches of
the legally stipulated rest times between two working days
or shifts in any part of the Group in 2023. Nor was any legal
action brought against us in relation to working hours.
In Switzerland, 54.4 per cent of our apprentices secured a job
at Baloise after completing their training.
Risks and risk management methods with
regard to employee-related matters
As a top-ranked employer and holder of the Friendly Work
Space award, we are addressing the shortage of skilled
workers by making ourselves better known and thereby
more attractive in the job market. For existing employees, we
offer an interesting working environment with wide scope for
personal initiative and decision-making coupled with regular
opportunities for continuing professional development and
upskilling. We also collect and monitor various key figures
on the skilled worker shortage, and keep a close eye on the
average cost of recruitment (including advertising, execu-
tive search, etc.). In Belgium, for example, this is around EUR
3,785 and in Luxembourg around EUR 3,380 per hire, which is
slightly below the European average.
Our Code of Conduct
We are optimistic:
We see opportunities.
We bear in mind customer needs:
We always consider their perspective.
We welcome change:
We boldly break new ground.
We keep our promises:
We walk the talk.
We value our colleagues:
We build personal relationships.
We are curious:
We constantly learn new things.
We share our insights:
We foster networking and collaboration.
We speak our minds and look for solutions:
Every voice matters.
We meet everyone on equal terms:
With compassion and a smile.
We are Baloise
The Baloise Code is our Code of Conduct and was developed by
employees, for employees. It has been guiding our activities for more
than six years now. In 2023, the Code was updated and questions
about it were included in the employee survey for the first time. It is
applied across the Group.
322
Switzerland
Flexibility regarding place and time of work
● Flexitime
● Flex office
● Working from home and remote working: The office is
our primary place of work. Of course employees can
also work from home or from elsewhere – normally for
around 40 per cent of their working week or, depending
on the work situation, up to a maximum of 60 per cent
(for a full-time employee).
Individual working models
● There are numerous opportunities for part-time working
(e. g. option for 80 per cent of hours for almost all office-
based full-time positions)
● Job sharing
● Pre-retirement part-time employment
● Option to choose between different notice periods
Opportunities for sabbaticals
● Maternity leave that is more generous than the statu-
tory minimum
● Unpaid leave
You can find out what other benefits we offer our employees
in Switzerland and what we stand for as an employer here:
https://jobs.baloise.com/en
Germany
Flexibility regarding place and time of work
● 38 hours on a full-time basis with flexible working hours
without core hours
● Home working and remote working (up to 60 per cent
of contracted hours)
● Flexitime with time off for accumulated hours
Individual working models
● Numerous opportunities for part-time work for all
employees
Opportunities for sabbaticals
● 30 days’ annual leave
● Opportunity for special leave and conversion of salary
into additional leave
Baloise Group Annual Report 2023 Report on non-financial matters
Belgium
Learning and development
Flexibility regarding place and time of work
● Flexitime for all employees
● Working from home and remote working: employees
can work a maximum of three days a week from home
Individual working models
● Numerous opportunities for part-time work for all
Own it
employees
● Special 100 per cent working hours models: option
to work a full week over four days or two weeks over
nine days (by working longer hours on the individual
working days)
● Hours reduced by 20 per cent or 50 per cent for
employees aged over 55 (compensation from the
employment office)
● Parent days for all employees with school-age children:
half a day of unpaid leave per week
Opportunities for sabbaticals
● Parental leave: for employees with children under the
age of 12 (compensation from the national employ-
ment office)
Luxembourg
Flexibility regarding place and time of work
● Flexitime for all employees
● Working from home
Individual working models
● Numerous opportunities for part-time work for all
employees
Opportunities for sabbaticals
● Option to buy additional leave through a reduction
in annual salary
∙ Taking ownership
∙ Focusing on results
Learn
∙ Living curiosity
∙ Promoting
∙ Developing through
reflection
development of others
∙ Building digital
literacy
Connect
∙ Living integrity &
trust
∙ Leveraging diversity
through dialogue
Collaborate
∙ Establishing
meaning
∙ Collaborating
effectively
The ten Baloise competencies are divided into four topic areas and
provide information on the skills we as a Company particularly want
to promote.
323
Baloise Group Annual Report 2023 Report on non-financial matters
To deliver maximum performance now and in the future
and to achieve our strategic goals, we are focusing on ten
overarching competencies divided into four topic blocks. The
competencies are equally relevant to all employees and are
the subject of ongoing dialogue as well as being discussed
at development meetings.
We create a learning environment that encourages and
enables employees with and without a formal leadership
role to develop the skills and mindsets necessary to take on
new challenges and realise their full potential. We do this to
ensure that we, as an employer, can sustainably attract and
retain employees with the necessary skills and are therefore
able to achieve our business goals and our transformation.
In 2023, the focus was on further developing our most
important training content, strengthening a more self-de-
termined and more individual approach to learning and
development and creating the basis for efficient scaling.
Baloise Campus – Group-wide leadership programmes
We support staff in leadership roles on an ongoing basis
by encouraging dialogue and reflection on the subject of
leadership and developing the necessary skill sets. As part
of our core programme for the development of executives –
the Baloise Campus – we provide four different programmes
that deal with various challenges facing senior managers.
The programmes in 2023 were as follows:
● 71 participants on the Early Leadership Programme
(ELP) with a total of 248 training days
● 32 participants on the Programme for Experienced
Practitioners (PEP) with a total of 224 training days
● 30 participants on the Advanced Leadership
Programme (ALP) with a total of 240 training days
● 9 participants on the Senior Leadership Programme
(SLP) with a total of 72 training days.
Of the 145 participants (total of 784 training days), 46 per
cent (67) were female and 54 per cent (78) male.
The programmes promote an intensive, process-based
learning journey and are designed to support managers
either in tackling their own practical challenges (ELP and
PEP) or with projects on matters of Group-wide strategic
relevance through collaboration with senior managers and
Transformation Leaders within Baloise (ALP and SLP).
324
Strengthening transformation and leadership
capabilities
We continue to work on establishing an understanding
of leadership as action and not merely as function, which
encompasses the various forms of leadership be they hier-
archical or distributed. We also aim to strengthen our trans-
formation and leadership capabilities and to create the
basis for scaling. With this in mind, we expanded our existing
offering that covered subjects such as decision-making,
coaching, team coaching, resilience, feedback and much
more to include a Group-wide offering that deals with navi-
gating and managing change. This was the main focus in
2023. In total, around 280 participants took part in workshops
delivered by an internal network of catalysts and trainers as
well as external coaches.
We also strengthened our collaborative approach
to learning by adding circle learning formats, where our
employees work with three to five other colleagues on
a certain subject to progress their development. The
employees benefit from the experience and knowledge
of their colleagues to help them achieve their individual
learning goal, and this regular exchange also expands their
network and promotes collaboration.
Learning communities
We are continuously building and reinforcing learning
communities at various levels. We offer a platform on which
learning multipliers can share their knowledge and improve
their skills to stay one step ahead in the development of high-
quality training courses. In 2023, the focus was on the design
and implementation of virtual courses and the creation of
appealing e-learning courses. 193 employees from all units
got involved in these learning communities and produced
214 e-learning courses. We have also developed a govern-
ance structure that enables us to provide learning content
via a Group-wide network of multipliers and facilitators. Our
aim is to use the existing courses and create new ones that
meet the immediate needs of all business units, thereby
making use of synergies and achieving cost savings.
Additional local activities and events
At local level, we systematically support the onboarding of
our managers into new leadership positions (Switzerland,
Belgium and Luxembourg). Further support is provided in
the form of individual coaching or by supporting the devel-
opment of teams in connection with the transformation
of Baloise via our internal network of coaches or external
partners.
Internal agile coaches support the ongoing transforma-
tion journey in Germany, Belgium, parts of Switzerland and
Luxembourg, helping managers to practise agile working
methods, reflect the agile mindset and improve processes
in their teams. This is all in addition to specific Group-wide
workshops aimed at strengthening agile competencies.
Baloise in Germany held its first learning week with more
than 180 attendees. The focus was on different learning
Baloise Group Annual Report 2023 Report on non-financial matters
options based on our Baloise competencies (films, work-
shops, networking events, etc.). We also introduced various
learning formats to introduce employees to generative
AI-based software such as ChatGPT (Germany and Swit-
zerland).
Belgium
● B-Fit check-up (219)
● B-Balanced programme (74)
● Breathing exercises workshop (171)
● Workshop on recognising stress signals
Health and safety
As a responsible employer, we strive to protect and promote
the health of our employees and various initiatives are run in
our national units with this aim in mind. The figure in brackets
indicates the number of participating employees.
Switzerland
● Recertified as a ‘Friendly Work Space’
● Corporate health management for all employees
● Case management: individual support and counselling
to help employees cope with difficult situations and
crises in their personal lives (220 cases, 94 of which
were from the prior year)
● Ergonomic consultations (88)
● Discounted massages at head office in Basel
● Voluntary flu vaccinations for all employees (347)
● Average of five hours per person for health, safety and
emergency training, e. g. courses on first aid for mental
health, breath training, etc.
● Gym membership
● Weights rooms and relaxation rooms at head office
Germany
● Mental health campaign
● Healthy leadership through the transformation (16)
● Sleep yourself healthy – basic and advanced seminars
(109)
● Stress management and self-care in Sales (32)
● Mental health – recognition and intervention (18)
● Staying strong in difficult situations (32)
● Inner Axis Breathwork (30)
● Back course at Zentrum am Michel, Hamburg (15)
● Mesana band – health monitoring at home (70)
● Mental health hotline
● Trinktimer app
● Meditation app
● Brainlight massage chair
● Massage in Hamburg and Bad Homburg
● Flu vaccination offered to all employees
within your team (89)
● Participation in a study on absenteeism and possible
management interventions (13)
● Flu vaccination programme for all internal and external
employees (410)
● Every employee can consult an occupational health
specialist if they have a health problem which they
suspect may be due to their work.
● All first aiders take part in a one-day supplementary
training course every year. For members of the fire
service team, this is one day every two years. The union
workplace representatives also receive supplementary
training every year.
Luxembourg
● Vaccination campaign (55)
● Two programmes for health and wellbeing (131)
● Emergency training: once a year
● Health courses: total of 37 hours in 2023
Diversity and inclusion
We are more than 8,000 employees in five countries, so
collaborating across borders and embracing differences is
important. For us, diversity and inclusion means utilising our
diverse strengths and personalities while remaining mutually
respectful and accepting of each other.
The following measures from across the Group are exam-
ples of our approach:
● Our offices are accessible and additional assistance
measures are provided on a case-by-case basis.
● We place great emphasis on non-discrimination in the
Code of Conduct, in recruitment and in the
benefits we provide.
Diversity
Below we have listed a few specific initiatives implemented
by Baloise in Switzerland. These are representative of the
work on diversity and inclusion carried out in the other coun-
tries. We try to approach the topic of diversity as broadly
as possible with our initiatives in Switzerland. For example,
we regularly take part in the external 50+ jobs fair. We also
promote our LGBTQ network, which was set up by employees
for employees. And we would also like to make our leader-
ship teams more diverse. Our aim is to fill 40 per cent of all
positions in the management team with people who meet at
least one diversity criterion – age, gender or mother tongue.
Women already make up one-third of all promotions and
new hires each year. We encourage part-time working in
all positions, including the sales force: almost all our full-
time vacancies are advertised with an option to work 80 per
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Baloise Group Annual Report 2023 Report on non-financial matters
cent of full-time hours. Almost a quarter of employees now
work part-time. Last year, we launched a series of workshops
across the Group to teach employees about unconscious
bias (distorted perceptions that can lead to discrimination).
Diversity should be lived and experienced within the
Baloise Group – but also measured with hard figures. That’s
why we carried out a pay-gap analysis in 2021. The ana
lysis did not find any relevant unexplainable gender-spe-
cific differences in salary. We also participate in the diver-
sity benchmarking of the University of St. Gallen, which
measures different aspects of diversity – for example gender
and age, but also nationality and language – and allows us
to compare them with other companies. Ultimately, all these
initiatives and measurements are part of the reason why we
are regularly awarded the Friendly Work Space accolade.
www.baloise.com/diversity
Inclusion
As a responsible employer, we are committed to the health of
our employees and to the integration of people with special
needs. Only with an inclusive and healthy working environ-
ment can we enjoy long-term success as a company. We
firmly believe that everyone should have the opportunity
to participate in the labour market and realise their poten-
tial professionally. To achieve this goal, we partner with the
Federal Disability Insurance (IV) to offer a number of places
each year to help get people with disabilities back into work.
We have provided more than 70 IV training places since 2012.
They are specifically designed for people who, for health
reasons, have difficulty gaining a foothold in the labour
market. With targeted support and individual care, we help
them to reintegrate successfully into working life.
Each year, we also offer special training places to give
young people with special needs an opportunity to secure a
vocational apprenticeship. Through adapted training plans
and close collaboration with an internal specialist, we ensure
that they too can gain the skills and expertise they need.
Corporate Social Responsibility
We continued our various corporate social responsibility
activities in 2023. Below, we list a few examples of the areas
in which we as a company are active – with the energetic
support of our employees.
Community and good causes
● Every year for the past ten years, Baloise in Belgium
has organised the Baloise for Life event during the
Christmas period. We raise money for charitable organ-
isations by putting on various activities for employees
and the employees suggest which charities the money
should go to.
● Baloise in Germany organises a Christmas concert in
Hamburg’s St. Michael’s church for current and former
employees and their families every year. The money
raised goes to charity.
● Almost 50 colleagues from Baloise in Germany took
part in Volunteer Day on 12 October. We helped out at a
total of six childcare centres in Bad Homburg, Hamburg
and Bremen, doing jobs that the regular staff rarely
have time for.
Environmental protection and climate action
● Baloise in Belgium organised an internal ‘sustainable
transport week’ and encouraged employees to travel
sustainably during this period. A free bike checkup was
organised for all employees who cycled to work.
● In June, Baloise employees in Switzerland partnered
with BirdLife Switzerland to build dozens of nesting
boxes and carried stones out into the fields in order to
create new habitats for the little owl.
Education
● Baloise digital scouts in Switzerland have been working
to raise awareness of digitalisation issues in society
since 2017. With the aid of brochures, talks, work-
shops and exhibition stands on cyber security, smart
home and media literacy, they educate and inform
employees, parents, schoolchildren and pensioners.
Free of charge, of course.
● Baloise in Switzerland supports the Future Skills Forum
event where stakeholders come together to discuss the
skills that companies will need to equip their employees
for the future.
For more information on our Corporate Social Responsibility
activities, see www.baloise.com/csr
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Baloise Group Annual Report 2023 Social partnership and participation
Switzerland
● All employees are covered by formalised employee
representation structures.
● The collective labour agreement applies to more than
3,600 employees.
● There are a number of associations with strategies to
promote representation and participation of target
groups, such as Female Leadership, women@sales,
parents@baloise, the LGBTQ network JUMP! and the
Diversity Board.
● There were no demonstrations or rallies in 2023.
Employee commission in Switzerland
Our employee commission represents the interests of office-
based members of staff (including apprentices) and the
customer advisors of the insurance sales force vis-à-vis the
Corporate Executive Committee. The employee commission
has the right to prompt and comprehensive information
concerning all matters where this is required in order for it
to properly perform its role.
The employee commission has participation rights with
regard to the following matters in particular:
● Questions of health and safety and the protection of
workers
● The transfer of the business to a third party
● Large-scale redundancies
● Affiliation with an occupational pension provider.
The employee commission in Switzerland also has the right
to a say on wage policy, holiday entitlement and the way in
which holiday is taken, and working hours. The details are set
out in the employee participation regulations.
The members of the employee commission carry out their
commission-related duties in working hours where neces-
sary. The chair of the employee commission is released from
his or her professional duties for 50 per cent of his or her
contracted hours.
Germany
● 97 per cent of employees are covered by the collective
pay agreement for the insurance sector.
● There are a number of associations with strategies to
promote representation and participation of target
groups, such as FemaleXChange, the LGBTQ network
JUMP! and the Diversity Board.
● There were no demonstrations or rallies in 2023.
Works councils in Germany
The local works councils in Germany are elected by the
employees every four years at all locations. A General Works
Council is formed from the local works councils. The local
works councils look after the interests of the employees at
their location in relation to personnel measures such as
hiring, dismissals, transfers, training, etc. The General Works
Council deals with company-wide matters such as the intro-
Report on non-financial matters
duction of or changes to software systems or fundamental
structural changes in the Company. Both bodies have a
variety of tasks, including:
● monitoring the implementation of laws, regulations,
collective agreements and company agreements;
● ensuring that men and women are treated equally;
● facilitating the integration of severely disabled people;
● promoting the employment of older workers;
● promoting workplace health and safety and environ-
mental protection measures.
Employee representatives have co-determination rights in
relation to the following matters in particular: personnel
measures, a number of social issues (such as those relating
to working hours, annual leave principles, introduction of
software, social institutions, group work and remote working)
and changes in business operations.
Belgium
● All employees are covered by formalised employee
representation structures.
● There are 17 signed collective pay agreements.
● Every four years, ‘social elections’ are held in which
employees can stand for election to one of Baloise’s
three advisory committees. The next elections will take
place on 16 May 2024. All employees are eligible to vote.
● There are a number of associations with strategies to
promote representation and participation of target
groups, such as Women in Finance, Women on Board
and the Young Talents Programme.
● There were no demonstrations or rallies in 2023.
Employee commission in Belgium
The employee commission in Belgium is organised along
similar lines to that in Switzerland. It represents the interests
of more than 1,500 employees in office-based and sales force
roles. As a commission, it has the right to advise Baloise
as an employer and to access information on the use of
social control. It also has access to information on employ-
ment relationships and on the commercial and financial
situation of the Company. The employee commission in
Belgium also looks after the wellbeing of our employees,
for example in matters such as workplace ergonomics.
Most of the commission members hold full-time positions in
addition to their seat on the commission, and do not wish
to be released from their duties. They believe it is important
to work alongside their colleagues. However, the employee
commission is given the time it needs to perform its role.
327
Baloise Group Annual Report 2023 European Forum
The European Forum was created by agreement between
Baloise and the national employee representatives as an
opportunity for the representatives to meet regularly with
the Corporate Executive Committee and senior manage-
ment and discuss current issues of relevance to the Group
as a whole.
Report on non-financial matters
Luxembourg
● 100 per cent of the workforce is covered by formalised
employee representation structures, 70 per cent by
structures relating to working conditions.
● There is one signed collective pay agreement.
● One person is appointed as an equal opportunities
officer and there is a group for employee engagement
and satisfaction.
● There were no demonstrations or rallies in 2023.
The interests of all Baloise employees in Luxembourg are
represented by two employee commissions, one for Baloise
Assurances Luxembourg SA and a second for the staff of
Baloise Vie Luxembourg SA. The employee commissions in
Luxembourg enjoy regular, open and constructive dialogue
with the Executive Committee. They meet to discuss issues
such as finance, personnel and professional development.
Based on the number of employees (more than 150), the
employee commission of Baloise Assurances Luxembourg
SA has specific co-determination rights that are enshrined
in law. By mutual consent between the employer and the
employee representatives, these are decisions relating to:
1. the introduction or application of technical systems to
monitor the behaviour and performance of employees
at their workstations;
2. the introduction or amendment of measures to protect
the health and safety of employees and to prevent
occupational illnesses;
3. the specification or amendment of general selection
criteria for recruitment;
4. promotions, transfers, dismissals and, if applicable,
the priority criteria for inclusion in early retirement
programmes for salaried staff;
5. the creation and implementation of professional
development programmes or collective bargaining
measures;
6. the specification or amendment of general criteria for
employee assessment;
7. the creation or amendment of internal regulations,
taking account of any collective agreed regulations
that may apply;
8. the granting of remuneration to employees;
9. the introduction or amendment of a specific Work@
home policy at company level.
328
Baloise Group Annual Report 2023 Report on non-financial matters
Careers website:
www.baloise.com/jobs
Careers blog:
www.baloise.com/karriereblog
Facebook:
www.facebook.com/baloisech
YouTube:
www.youtube.com/baloisegroup
Instagram:
www.instagram.com/baloisejobs
LinkedIn:
www.linkedin.com/company/baloisech
329
Baloise Group Annual Report 2023 Report on non-financial matters
How we create value for society
Measures
● Compliance with approval requirements, relevant legal
provisions and fundamental rights (such as human
rights), including monitoring by regulatory authorities
● Baloise business model, which protects customers from
falling into financial distress through financial support
when a claim arises, pension benefits and solutions for
individual saving
● Inclusion of ESG criteria in the investment process since
2018, with the later addition of a climate strategy, an
active ownership strategy and a real estate strategy
● Inclusion of ESG criteria in our underwriting guidelines,
Effectiveness of the measures
● Maintaining a stable risk-sharing community as well
as prosperity and a welfare safety net for society, while
preventing potential social inequality as a result of
financial circumstances
● Minimising risk in the investment process and in the
underwriting process for insurance products, and
supporting companies that factor ESG criteria into their
decision-making. Engaging in dialogue with companies
on ESG matters such as human rights, biodiversity and
anti-corruption measures
● Increasing the public sector’s ability to invest for the
including human rights and employment rights
public good through financial contributions
● Payment of taxes and support (financial and non-finan-
cial) for charitable and environmental organisations
(CSR)
● Supporting community and good causes, environ-
mental protection and climate action, healthcare,
education and research, innovation and safety, while
also encouraging voluntary work and the community
work of employees
Key performance indicators
In addition to the indicators for social matters used in our core
business (underwriting policy, responsible investment), key
figures relating to claims and benefits paid (page 331), taxes
paid (page 332) and measurement of our reputation (page
332) also serve as indicators for measuring the effectiveness
of social initiatives.
How we create value for society
We see our Company as part of the sustainable development
of a stable society and a healthy environment and we there-
fore believe we have a responsibility to society in our role as
a corporate citizen. We conduct our business activities in
accordance with the relevant legal provisions and in compli-
ance with the basic rights enshrined in the constitution of the
Swiss Confederation, such as human rights (see also page
339 in the ‘Compliance culture creates value’ chapter). The
approval requirement enshrined in Swiss financial markets
legislation, which demands an assurance of proper business
conduct, stipulates among other things that the approved
institutions and their key decision-making bodies must
comply with all applicable laws (statutes, regulations, etc.)
and have an organisation that ensures such compliance. The
Swiss Financial Market Supervisory Authority (FINMA) monitors
compliance with this approval requirement, which must be
fulfilled at all times.
Our business model plays an important part in maintaining
society’s prosperity. Our products and services enable compa-
nies and private individuals to take risks that they would
not be able to manage on their own without great finan-
330
Baloise Group Annual Report 2023 cial expense. Companies can develop and grow sustainably,
and private individuals can enjoy greater financial security.
This also prevents potential inequalities based on financial
opportunities and contributes to an equitable society. We
fulfil our responsibility to society by sharing risks and costs
and operating our business in a forward-looking and innova-
tive way. This means weighing up the positive and negative
consequences of our decisions and actions on fundamental
issues for our business, society and the environment.
The claims and benefits paid to our customers reflect the
contribution that they do not have to pay themselves or, in
extreme cases, would have to come from the public purse.
These payments therefore help to make the economy more
resilient. In the non-life business, they include claims paid
under products such as contents insurance, liability insur-
ance and motor vehicle insurance, and particularly natural
disaster insurance. In the life business, they include annuities
and benefits paid out from life insurance policies.
Claims and benefits paid
CHF million
Non-life
Life
Total
2022
(adjusted due to
IFRS 17 transition)
2023
2,530.9
4,473.6
7,004.5
2,531.3
4,606.9
7,138.2
The payments recognised mainly comprise claims payments including claims
handling costs in the non-life segment and insurance benefits paid including
investment components and surrenders in the life segment.
Responsible investment for society
We take our role in society as a responsible custodian
of assets seriously, which is why the asset management
team is continuously developing its responsible investment
strategy. The advanced responsible investment strategy has
governed the majority of investments since 1 January 2023.
Baloise Asset Management uses the data provided by MSCI
Ltd. to integrate ESG criteria into the investment process.
Exclusions are applied and the best-in-class approach is
used to create the investment universe. Alongside issues
relating to climate, the environment and proper corporate
governance, social issues such as health and safety, people
development and human rights play an important role in
assessing sustainability. The relevant data is supplied to the
portfolio managers for ESG integration.
We also pursue an active ownership approach. The objec-
tive of our active ownership strategy is to generate a long-
term positive risk-return ratio and mitigate risk for customers.
We also aim to use the funds entrusted to us and the finan-
cial strength this gives us to persuade the management of
our portfolio companies to address ESG-related risks and
exploit the opportunities.
Report on non-financial matters
As part of our active ownership strategy, we engage in
collaborative dialogue with companies or with the public
sector through our membership of various industry associa-
tions (such as Principles for Sustainable Insurance (PSI), Swiss
Insurance Association (SIA), Asset Management Association
Switzerland (AMAS) and Swiss Sustainable Finance (SSF)) to
discuss specific or general ESG topics. Our advanced respon-
sible investment strategy now also includes direct engage-
ment activities, which involves entering into constructive
dialogue with companies in which we are invested in order
to address specific ESG matters. Direct engagement is used,
for example, in the event of serious violations of minimum
standards of conduct in areas such as human rights, employ-
ment, the environment and anti-corruption.
We published our second active ownership review in 2023:
www.baloise.com/policy-active-ownership.
For more information on our responsible investment
strategy, see page 300 in the ‘Responsible investment’
chapter.
ESG criteria in our underwriting policy
We began applying social criteria in addition to environ-
mental and corporate governance criteria in our under-
writing guidelines in 2022. This means that we will no longer
insure certain economic activities or that existing customers
in these areas will be allowed a transition period. In addition
to risks such as climate change, bribery and corruption, risks
that have a direct impact on social conditions will also be
taken into account. These risks can be divided into non-sus-
tainable practices, human rights and employment rights,
product quality and safety, and healthcare.
For further information on the integration of ESG criteria
into our underwriting policy, see page 306 onwards in the
‘Responsible underwriting’ chapter.
331
Baloise Group Annual Report 2023 Report on non-financial matters
Our social responsibility
Corporate social responsibility is the part of our approach to
sustainability that focuses on society and the environment
in our value creation model. We have also been a committed
advocate of voluntary work for many years and encourage
employees in all parts of the Baloise Group to engage in
voluntary activities. In 2015, we became a signatory to the
declaration by economiesuisse (the umbrella organisation
representing Swiss business) and the Swiss Employers’ Asso-
ciation. The declaration requires companies to offer flexible
working conditions and working time models that enable
employees to participate in voluntary work. Baloise not only
encourages its employees to engage in voluntary activities
by holding annual events but also meets its own responsi-
bility to society as a commercial organisation. Four of our
employees in Switzerland are currently members of cantonal
parliaments, and many others are involved in politics at local
level. Furthermore, Baloise creates and preserves jobs that
add value and pays taxes from its profits that help to fund
the public sector. The majority of the taxes are payable in
Switzerland.
Taxes paid
CHF million
Taxes paid
2023
2022
(restated)
35.9
75.6
See 2023 Annual Report, page 84 ‘Consolidated cash flow statement’
The profits we generate enable us to be an active partner in
many areas of society. Baloise runs a number of charitable
projects and initiatives in its national subsidiaries, which can
be roughly divided into the following categories:
1. Community and good causes
2. Environmental protection and climate action
3. Healthcare
4. Education and research
5. Innovation and safety
Our national companies decide which projects they wish to
be involved in within the scope of the Baloise CSR Charter.
www.baloise.com/csr-charta
Baloise and its employees made total charitable dona-
tions of more than CHF 760,000 in 2023, which equates to
around CHF 95 per employee. This sum includes only financial
donations that were given to organisations that serve the
common good or a charitable purpose or which promote
environmental protection. It does not include donations of
goods, expenses incurred for the organisation of volunteer
workers, support for events staged for the common good, or
financial support for organisations and events that serve an
educational purpose.
332
Once again, employees at all our offices took part in volun-
tary activities for the benefit of society and/or the environ-
ment in 2023. Employees were allowed to carry out some of
these activities during working hours.
www.baloise.com/csr
In Switzerland, the groundwork was laid in 2022 for collabo-
ration with the spendenbuch.ch portal – Switzerland’s first
nationwide platform for donations in kind. Baloise provides
the portal with products that have been involved in insurance
claims and can no longer be sold directly. The products are all
in perfect condition and completely usable. Often, the only
reason they cannot be sold in retail outlets is that their pack-
aging is damaged or missing. All products are inspected by
Baloise before being donated to spendenbuch.ch and they
are provided free of charge, provided that all legal require-
ments and reservations are satisfied. The donations portal
gives charitable organisations, in particular, straightfor-
ward and predictable access to donated goods of all kinds.
All donations are passed on directly and without any deduc-
tions to the recipient organisation. As well as making a valu-
able contribution to charitable organisations in Switzer-
land, we are conserving resources through this initiative by
enabling fully functioning products to be used that would
otherwise be thrown away.
Baloise conducts regular reputation assessments to
measure public awareness of our social engagement activi-
ties. CSR activities only add value for other Baloise stakeholder
groups if they are widely recognised. In 2023, we partnered
with reputation management institute Reptrak© to carry out
surveys in Belgium, Germany and Switzerland. The average
score across all three countries is slightly lower than in 2022,
at 67.4 points (on a scale where 60 to 70 is average). Demands
on the Company have increased due to the social challenges,
and this is reflected in the results. The three attributes of
the ‘citizenship’ driver across all three countries achieved the
following average scores for the year:
● Has a positive impact on society: 68.5 points (2022: 69
points)
● Supports good causes: 67.4 points (2022: 67.7 points)
● Cares about the environment: 66.4 points (2022: 66.5
points)
The results show that communication is even more impor-
tant at a time of major social challenges, as corporate citi-
zenship activities only have a positive external benefit if the
public is aware of them. ‘Citizenship’ is an important driver
in terms of overall reputation and has a significant impact
on the way Baloise is perceived by the public.
Baloise Group Annual Report 2023
Report on non-financial matters
Weblinks to the activities of the national
companies
● Switzerland
www.baloise.ch/de/ueber-uns/engagement
● Belgium
www.baloise.be/nl/over-ons/csr-en-sponsoring
● Luxembourg
www.baloise.lu/unsere-verantwortung
● Germany
www.basler.de/de/ueber-uns/nachhaltigkeit
333
Baloise Group Annual Report 2023 Report on non-financial matters
Sustainability KPIs – Social
Social
Employment and retention
Number of employees
Part-time employees
Staff turnover
Duration of employment
Proportion of employees with access to the share programme
Average employee satisfaction 1
Proportion of engaged and happy employees 2
Health and safety
Unit
%
%
years
%
out of 100 points
%
2023
2022
Reference
8,020
8,025
Page 321
25.0
7.1
12.4
44.2
77
81
24.1
7.4
12.5
43.9
76
79
Friendly Work Space (certification in Switzerland)
out of a possible 5 points
4.83
4.83
Training and development
Proportion of trainees in the workforce
%
Number of apprentices, trainees, interns and working students
Philanthropy
Total donations by the Baloise Group
CHF thousand
Number of employees engaging in voluntary work
Diversity and inclusion
Proportion of women in the workforce
absolute
Age distribution of employees
under 35
35 to 45
45 to 56
over 56
Average age
Responsible investment
Total AGMs at which Baloise Asset Management voted 3
Total agenda items on which Baloise Asset Management voted 3
Votes against the management’s
recommendations at the AGMs 3
Distribution of ESG ratings across Baloise insurance investments 4
A-AAA
B-BBB
%
%
%
%
%
years
number
number
number
%
%
3.8
305
660.2
1,033
3,582
44.7
26.2
26.0
29.3
18.6
43.9
25
13
59
85
15
Page 322
4.0
319
652.4
Page 332
Page 321
Page 300
Page 303
770
3,553
44.3
26.6
25.4
30.3
17.7
43.8
25
13
42
80
20
1 Employee happiness at work measures the average responses of our employees to the question ‘How much do you like working at Baloise?’ on a scale from 0 to 100 (‘not at all
like’ to ‘totally like’). For this purpose, the answers of all employees are recorded on a 5-point scale and converted on a linear basis to a scale of 0 to 100.
2 Employees who ticked a positive answer (4 or 5) to the satisfaction question are categorised as ‘Committed and satisfied’.
3 See www.baloise.com/corporate-governance.
4 See chapter ‘Responsible investment’ from page 300 onwards.
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Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
335
Report on non-financial matters
334
Baloise Group Annual Report 2023
Baloise Group Annual Report 2023
335
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Information on corporate governance
Compliance culture creates value
How we create value for our partners
Sustainability KPIs – governance
338
342
345
Baloise Group Annual Report 2023
337
Report on non-financial matters
Compliance culture creates value
Measures
● aws, standards and instructions
● Raising of employee awareness through communica-
tion on instructions, regular training and concerted
action in the event of violations
Effectiveness of the measures
● Risks relating to data protection, money laundering,
antitrust law, corruption, insider trading and other
compliance issues are systematically monitored and
minimised through internal control mechanisms
● Multiple channels – including anonymous whistle-
● Establishment of a compliance culture that promotes
blowing channel for employees and outside parties –
are available for reporting suspected violations
● Group-wide cooperation based on the Baloise compli-
ance framework
and strengthens ethical conduct
● Promotion of a sense of responsibility in employees to
secure their support in cases of suspected violations
● Creation of a shared Group-wide understanding of
● Ultimate responsibility rests with the Corporate Execu-
compliance
tive Committee and the Board of Directors
● Regular and ad hoc assessment of compliance risks
and development of appropriate measures
Key performance indicators
The number of compliance training sessions attended by
employees, reported violations and the annual compliance
report presented to the Corporate Executive Committee
and the Audit Committee of the Board of Directors serve as
indicators for measuring the effectiveness of compliance
initiatives.
Compliance culture creates value
Within a company’s day-to-day operations, compliance
refers to all organisational measures designed to ensure
that laws, standards and instructions are respected. It covers
all strategies required to ensure the proper conduct of a
company, which includes adhering to laws and standards
issued by regulatory authorities – especially FINMA – and
having internal company policies and directives in place.
This encompasses areas such as data protection, money
laundering and corruption. Compliance plays a key role in
creating sustainable value for stakeholder groups such as
customers, partners, employees and shareholders. A distinc-
tive aspect of our compliance culture is that a basic atti-
tude of self-responsibility has been created to ensure that
employees fully understand the guidelines and are able to
operate within the set framework.
Compliance requirements in a regulated company are
strict and becoming ever stricter. New regulations and
tighter controls by regulatory authorities present a challenge
for the entire organisation.
Our aim is to establish and promote a strong compliance
culture and standards of ethical behaviour within Baloise.
Raising awareness among our employees with regard to
compliance plays a central role here. We issue directives and
provide regular training (every one to three years) to cover
topics such as data protection, combating of money laun-
dering, competition law, bribery and corruption. In 2023, 3,756
employees in Switzerland completed compliance training.
The participants and the degree to which the training is
completed is monitored in the internal training system. At
the same time, a rigorous approach in the event of violations
is important in order to increase employees’ awareness of
ethical behaviour. One serious, and thus internally notifi-
able, fraud case arose in 2023. Suspected violations can be
reported via a number of channels, including an anonymous
whistleblower platform that is also open to external parties.
Clearly defined, Group-wide rules are in place that govern
how reports and cases are to be dealt with. There are also
clear rules and approval processes governing the granting
and acceptance of gifts and non-cash benefits set out in
internal directives and in the Baloise Code of Conduct.
Within the compliance framework, Group Compliance
works with the local compliance managers to develop
Group-wide policies and minimum standards in accor-
dance with a risk-based approach. In this way, we create
an understanding of compliance that is shared across the
whole Baloise Group. This includes, among other things, stra-
tegic tasks, advice and support, control and monitoring, and
reporting at local level and from a Group perspective. The
Compliance function is responsible for the early identifica-
tion of new compliance risks in respect of matters such as
new regulation, new business areas or new partners. New
compliance matters are added to the compliance standards
as required. New sustainability-related topics are incorpo-
rated into the existing compliance framework and handled
accordingly. Additional standards may be agreed in future
if required for a specific topic.
Compliance supports the Executive Committee in the
338
Baloise Group Annual Report 2023 performance of its organisational due diligence by specifi-
cally advising, developing operational parameters and iden-
tifying compliance risks periodically and on an ad hoc basis.
Compliance is the central point of contact for employees’
questions and reports relating to compliance matters
defined in the Code of Conduct. Group Compliance assesses
and reviews the local compliance plans and the implemen-
tation of the standards by means of appropriate controls.
Compliance monitors important legal developments and
provides information about the status of the implemen-
tation of and adherence to the internal and external legal
and regulatory provisions. Existing compliance risks are also
identified, assessed and monitored. Every six months, reports
on all the above matters are submitted to the local Executive
Committees and, in consolidated form, to the Corporate
Executive Committee and the Audit Committee of the Board
of Directors.
Anti-corruption measures
We make a distinction between active and passive bribery.
With regard to active bribery, employees must not promise
any gifts or hospitality with the aim of inducing holders of
public office or individuals bound by a duty of allegiance
to violate their obligations towards their organisation or
company or to exercise their discretionary powers in favour
of Baloise.
With regard to passive bribery, employees must not let
themselves be induced to make certain decisions or behave
in a certain way by accepting gifts or hospitality. The funda-
mental rule is that gifts and hospitality must not be accepted
if this might influence employees’ specific decisions or their
behaviour.
The individual market-specific companies in Belgium,
Germany, Luxembourg and Switzerland must appoint
anti-corruption and anti-bribery officers. Each company has
internal instructions in place that reflect local law. Regular
training ensures that employees are familiar with anti-cor-
ruption regulations and are informed of any changes to the
legal situation.
Annual compliance reporting makes it possible to
monitor compliance with these rules and to intervene
where necessary. No incidents of corruption were reported
in the reporting year. In the underwriting guidelines, bribery
and corruption were also identified as a risk that we take into
account when excluding various business activities (see also
page 306).
Report on non-financial matters
Respect for human rights
Respect for human rights and for employee rights is very
important to us in our business activities and under our
investment and underwriting strategy. With insurance opera-
tions in Europe, we expressly acknowledge the global values
and laws pertaining to human rights. Our objectives and
approach with regard to human rights are set out in our
Group-wide Respect for Human Rights Policy.
www.baloise.com/policy-human-rights
We are committed to respecting human rights in accor-
dance with the UN Guiding Principles on Business and
Human Rights (UNGPs) and to upholding them in our busi-
ness activities and along the value chain. This commitment
encompasses all internationally accepted human rights,
including:
● the International Bill of Human Rights, comprising the
Universal Declaration of Human Rights (UDHR), the
International Covenant on Civil and Political Rights
(ICCPR) and the International Covenant on Economic,
Social and Cultural Rights (ICESCR);
● the Convention on the Rights of the Child (CRC);
● the fundamental conventions of the International
Labour Organization (ILO).
We have also signed up to the UN Principles for Sustain-
able Insurance (PSI) and the UN Principles for Responsible
Investment (PRI).
Organisation and compliance
Our approach reflects the business activities that we carry
out as:
● a provider of insurance and financial services (under-
writing guidelines);
● an employer (Code of Conduct);
● a buyer (purchasing guidelines).
We have appropriate policies and processes in place in this
context. Annual risk analyses are conducted, and the risk
in connection with respect for human rights is assessed
annually as part of the compliance reporting. If material
risks are identified within the Baloise organisation or in the
supply chain, suitable measures must be taken in response,
whether this be taking steps to ensure compliance or termi-
nating a supplier relationship. An independent function in
the Company (Compliance, Internal Audit) oversees imple-
mentation of the measures. Our independent system for
reporting violations is also available for reporting human
rights concerns.
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Due diligence obligations regarding minerals
and metals from conflict areas and child labor
Our policies and processes also include audit procedures in
accordance with ‘Section Eight: Due Diligence and Transpar-
ency with respect to Minerals and Metals from Conflict-Af-
fected Areas and Child Labor’ of the Swiss Code of Obliga-
tions and the corresponding Enforcement Ordinance on Due
Diligence and Transparency with respect to Minerals and
Metals from Conflict-Affected Areas and Child Labor. The
audit revealed that Baloise neither imports nor processes
minerals and metals from conflict areas. The risk-based
suspicion check for child labor also revealed no reasonable
grounds for suspicion. Baloise is therefore not subject to the
corresponding further-reaching statutory due diligence and
reporting obligations.
Further information:
www.baloise.com/compliance
www.baloise.com/code-of-conduct
www.baloise.com/privacy-policy
www.baloise.com/policy-bribery-corruption
https://baloise.integrityplatform.org
www.baloise.com/sustainability (compliance standards and
investment policies)
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Report on non-financial matters
How we create value
for our partners
Measures
● Establishing and expanding an intelligent network of
partners (innovation partners, start-ups, outsourcing
partners, suppliers, brokers and agents)
● Measuring the Net Promoter Score (NPS) and the satis-
faction of brokers with Baloise at regular intervals
● ‘We believe in partnership’ is one of the three principles
underpinning our brand values, which provide us with
guidance on how we should act
Effectiveness of the measures
● Knowledge is shared among the partners in Baloise’s
network, which increases their collective success
● NPS results, satisfaction measurements and other
dialogue outcomes inform our collaboration with
brokers
● Collaboration with suppliers to ensure sustainability
along the supply chain
● Promotion of the implementation of global principles
● Maintaining a dialogue with suppliers on the subject
and industry-specific standards
of sustainability, including the imposition of the vendor
code of conduct
● Signing up to the Principles for Responsible Investment
(PRI) in 2018 and the Principles for Sustainable Insur-
ance (UNEP FI PSI) in 2020 and supporting the recom-
mendations of the Task Force on Climate-related Finan-
cial Disclosures (TCFD) since 2020
● Becoming a partner of the Swiss Climate Foundation
with a seat on the advisory council
● Provision of, and support for, innovative sustainability
solutions that contribute to the green transformation
of the economy and a sustainable lifestyle
Key performance indicators
Regular measurement of the Net Promoter Score (NPS) and
brokers’ satisfaction with Baloise gives us an indication of
how effective our systematic maintenance of partnerships
is. The impact of funding for partner initiatives, key figures
for the introduction of procurement guidelines and external
accolades round off the indicators for measuring the effec-
tiveness of our initiatives.
How we create value for our partners
As part of our value creation process, we draw on a network
of partners that help us to implement our business model
and value creation model even more effectively. Our links with
different partners, such as innovation partners, start-ups,
outsourcing partners, suppliers, brokers and agents, form
a network that unlocks synergies, promotes knowledge
transfer and thus creates added value for everyone involved
by increasing collective success. This pooling of expertise
enables Baloise to offer its customers new, innovative prod-
ucts that are tailored to their needs.
First and foremost are the partnerships in our core busi-
ness that create value for our stakeholders, especially
our customers. We see ourselves not just as a business
but as an organisation that, along with its partners, has
a responsibility to promote awareness of social, environ-
mental and corporate governance aspects in society
and the wider business community. We therefore form part-
nerships outside our core areas of activity.
Partnerships in our core business
One of the strands of the strategy in our core business is to
team up with strong partners, the focus being on creating
added value for customers, developing new solutions and
raising efficiency. In doing so, we try to offer customers access
to services where this will provide the greatest benefit and,
at the same time, will result in value-adding synergies for
our partners and for us. The most evident example of this
is our business model of operating as an insurer and bank
in Switzerland, where we are able to offer banking, insur-
ance and asset management services from a single source
thanks to close collaboration. In the insurance business,
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Baloise Group Annual Report 2023 we have forged long-standing partnerships under which
our services are embedded into the partner’s own product
range. For example, we work with Ford Motor Company SA
(Ford importer for Switzerland) to sell motor vehicle insur-
ance products under the ‘Ford Autoversicherung’ brand at
the approximately 200 official Ford outlets in Switzerland.
This exclusive partnership between Ford Motor Company
and Baloise dates back to 2005. Since July 2023, the official
dealerships have been able to easily integrate the insurance
premiums into customers’ monthly lease instalments. We also
have a long-term partnership with Touring Club Switzerland
(TCS) and many other providers of services that complement
our own product range. In addition, we work with a whole
host of partners in our business customer activities, allowing
us to offer a broad spectrum of products and services for
SMEs. We have stepped up our long-standing partnership
with the founders’ portal Fasoon, which means we can now
act as the exclusive insurance partner for people starting
up a business. Furthermore, we have launched a strategic
industry partnership with the SME-oriented procurement
portal Gryps, which will help us to continue signing up new
business customers in the years ahead.
www.baloise.ch/de/ueber-uns/partner/kooperation
In Germany, we worked with brokers in the pension business
to develop Baloise Best Invest, a new unit-linked policy. This
resulted in Baloise Germany notching up its greatest ever
success for pension business in sales of life insurance through
brokers in 2023. The collaborative approach to product devel-
opment also created a tangible benefit for customers, espe-
cially in terms of value for money. This was also the conclusion
reached by the expert panels of judges at the publications
‘Mein Geld’ and ‘Versicherungsmagazin’, who singled us out for
the German Insurance Award (for innovation in life insurance)
and for the Innovation Prize respectively.
www.baloise.de/de/ueber-uns/partner
Broker satisfaction
In Belgium and Germany, brokers who work with us are asked
about their satisfaction at least once a year as part of the NPS
programme. The survey is being expanded in Belgium, with
the satisfaction KPIs being extended. This means that we are
continuing with the NPS programme using a number of meas-
ures of broker satisfaction. The NPS is measured every quarter,
complemented by annual benchmarking of competitors. In
Germany, not only brokers but also tied agents are surveyed
annually about their satisfaction and on an ad hoc basis
concerning specific matters. In one of the most respected
NPS/broker surveys in the German market, Baloise is ranked
second for property insurance sales. A satisfaction survey is
also carried out in Switzerland to ascertain brokers’ views.
Corporate management partnerships
We pursue a sustainable approach as regards purchasing
goods and using resources. Our code of conduct for vendors
Report on non-financial matters
therefore requires the services provided by third parties to be
based on principles of sustainability. The code was revised in
2022. Since 2023, ESG criteria have formed an integral part of
the entire procurement process, from the request for tenders
to the selection of suppliers and drafting of contracts. The
partnerships with our suppliers, some of which have been
in place for many years, are very important, which is why
we are helping existing suppliers to implement the vendor
code of conduct. We also work with them to find effective
solutions to any problems that may arise in the supply
chain. The Group-wide purchasing function is rolling out
the new purchasing guidelines in Switzerland as part of a
pilot project that is mainly focused on suppliers from which
we order in large volumes. By the end of 2023, 32 per cent of
suppliers had accepted our new purchasing guidelines. We
are in discussions with, or waiting for a response from, 58
per cent of suppliers; 10 per cent have rejected them. The
reason for rejecting our purchasing guidelines is that these
suppliers have their own guidelines that are the same as or
more extensive than ours.
www.baloise.com/vendor-code-of-conduct
Partnerships with organisations
Principles for Sustainable Insurance
By signing up to the Principles for Sustainable Insurance
(PSI, see also Annual Review page 32), we have undertaken
to promote principles of sustainability in society. This global
framework also helps us to establish and maintain partner-
ships. At Baloise, we benefit from the cooperation between
the United Nations (UN) and the insurance industry, particu-
larly when it comes to addressing the risks and opportuni-
ties in connection with environmental, social and corporate
governance matters.
Swiss Climate Foundation
The Swiss Climate Foundation has been supporting SMEs in
Switzerland and the Principality of Liechtenstein for 15 years.
During this time, more than CHF 37 million has been invested
in climate change mitigation. We joined the foundation in
2021 and each year plough the net amount from the CO2
levy redistribution into the foundation. We have two seats
on the foundation’s advisory board, giving us a say on how
investments are allocated. In 2023, Baloise’s funding contri-
bution amounted to around CHF 230,000 (2022: CHF 340,000).
Baloise Bank foundation
The foundation was established in 1987 and promotes trade
and industry in the Swiss canton of Solothurn. It’s InnoPrix,
which is endowed with prize money of CHF 25,000, is awarded
annually to innovative projects. Since 2009, applications for
the award have also been accepted from the neighbouring
cantons of Aargau, Baselland and Bern. In recent years, the
coveted accolade has increasingly gone to companies that
support sustainability in business and society. The winner of
the 2023 InnoPrix was the sustainable energy company Apex
AG, which is based in Däniken, Solothurn.
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Sustainability KPIs – governance
2023
2022
Reference, corporate governance report
Governance 1
Board of Directors 2
Independence
Average term in post
Unit
%
years
Diversity on the Board of Directors 2
Number of women on the Board of Directors
Proportion of women on the Board of Directors
%
Average age of the members of the Board of Directors
100
5.0
3
33.3
59
100
3.6
4
40.0
58
Remuneration
Total remuneration of CEO
CHF thousand
1,686.63
2,140.3
1 See www.baloise.com/corporate-governance.
2 The cut-off date for calculating the key figures is 31 December 2023. Claudia Dill left the Board of Directors on 31 October 2023.
3 Michael Müller took over as Chairman of the Executive Board on 1 July 2023.
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Further information
Alternative Performance
Measures
Glossary
Addresses
348
352
356
Information on the Baloise Group 357
Financial calendar and contacts 358
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347
Further information
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). They are designed to aid understanding
of our results. Moreover, APMs help to measure performance,
growth, profitability and capital efficiency.
However, they should be viewed as supplementary infor-
mation and not as a substitute for the figures calculated in
accordance with IFRS.
Limitations
The business volume does not give any indication of the
profitability of business. Comparability with other companies
is also limited because they use different definitions.
The business volume represents supplementary informa-
tion that complements the disclosure of insurance revenue
pursuant to IFRS 17. Unlike insurance revenue, it includes
savings premium components and thus is generally higher
for life insurance.
Baloise uses the following APMs:
● Business volume
● Return on equity (RoE)
● Comprehensive equity
● Combined ratio (CR)
● Present value of new business premium (PVNBP)
● Value of new business (VNB)
● New business margin (NBM)
● Cash remittance
● Total assets under management (AuM)
It should be noted that similarly named APMs published
by other companies may be calculated in a different way.
The comparability of APMs between companies may there-
fore be limited. Baloise-specific definitions and information
about the use and limitations of the aforementioned alter-
native performance measures can be found below.
Definitions, usage and limitations
Business volume
Definition and use
The business volume is a measure of the amount of business
generated in the reporting period. It comprises the gross
premium income from non-life and life insurance recog-
nised during the reporting period and the payments from
policyholders in business involving financial contracts and
investment-linked life insurance policies.
Return on equity (RoE)
Definition and use
Baloise defines return on equity as the profit for the reporting
period divided by average equity adjusted for the divi-
dend payment (the average of equity at the start of the
reporting period [less the dividend paid] and at the end of
the reporting period).
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
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 abso-
lute level of equity. RoE does not contain any contributions
from the contractual service margin (CSM), which is relevant
to the life insurance business, nor any contributions from
other comprehensive income (OCI). These items are also
relevant to the analysis of comprehensive income.
RoE is not available at division or product level.
Comprehensive equity
Definition and use
Baloise defines comprehensive equity as the sum of share-
holders’ equity (equity before non-controlling interests) and
the contractual service margin (CSM) after taxes. One of the
reasons why the Baloise Group uses comprehensive equity
as a performance measure is that, unlike group equity, it
includes expected future profits from the life insurance
business and thus provides a more complete picture of the
carrying amount of an insurance company.
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Limitations
The usefulness of this performance measure is limited
because, for example, the contractual service margin (CSM)
is calculated on the basis of assumptions. The calculation
rules for the CSM depend on the measurement approach
(VFA or GMM) used for the underlying business. There is no
CSM for the premium allocation approach (PAA).
Comprehensive equity is not available at division or product
level.
Combined ratio (CR)
Definition and use
The Baloise Group uses the combined ratio to gauge the
profitability of underwriting in the non-life insurance busi-
ness. The combined ratio is the sum of insurance service
expenses and net reinsurance income/expense divided by
insurance revenue.
This means that costs not directly attributable to the
insurance contracts are not included in the combined ratio.
The combined ratio thus expresses the purely operational
profitability of the non-life insurance business.
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 loss ratio
and the expense ratio.
The loss ratio represents claims and insurance benefits
(net, i. e. including net reinsurance income/expense) divided
by insurance revenue. It therefore expresses the percentage
of insurance revenue that is used for the settlement of claims.
The expense ratio represents the insurance acquisi-
tion cash flows and administrative expenses included in
insurance service expenses relative to insurance revenue.
It thus expresses the proportion of insurance revenue that
is needed to cover the insurance service expenses for the
acquisition of new and renewal business and to cover the
administrative expenses.
Limitations
The combined ratio is used to measure underwriting profit-
ability, but does not indicate profitability in terms of invest-
ment performance 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 contri-
bution to profit.
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. In addi-
tion, comparability with other companies is limited, because
they use different definitions.
Present value of new business premiums (PVNBP)
Definition and use
The present value of new business premiums is a perfor-
mance measure used in the life segment that shows the
present value of all premium payments expected to be
received from new business over the likely term of the
contracts. Baloise calculates the PVNBP from the sum of
the present values of future premiums in the reporting period
from new business involving IFRS 17 contracts, from new
follow-on contracts in the Swiss group life business and from
new financial contracts business. Discounting is based on
the IFRS 17 discount rates (risk-free discount rates including
an adjustment for illiquidity).
Limitations
There are further restrictions resulting from the assumptions
(e. g. lapse rates, biometric assumptions) that are neces-
sary for the projection of future premium payments. In addi-
tion, comparability with other companies is limited, partly
because they define new business differently.
Value of new business (VNB)
Definition and use
The value of new business is a performance measure used in
the life segment and indicates the increase in value gener-
ated by underwriting new business in the current period. It
is derived from IFRS-based performance measures and is
calculated from the contractual service margin (CSM) for
new business. This figure is adjusted for any loss component
and the value of IFRS 9 new business. It is thus a measure
of expected future profit from new business. The calcula-
tion involves forecasting lapses, mortality, disability and
expenses up to the end date of insurance contracts, using
the latest capital market data and best estimates.
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Further information
Limitations
Future profits are estimates based on assumptions and may
therefore differ from the profits actually generated in the
future. They are calculated using IFRS 17 discount rates (risk-
free discount rates including an adjustment for illiquidity)
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. Comparability
with other companies is limited because they use different
definitions and assumptions.
New business margin (NBM)
Definition and use
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) in the reporting period divided by the present
value of new business premiums (PVNBP).
Limitations
Cash remittance may be higher or lower than the IFRS profit
for the period reported by an entity. The composition and
definition of cash remittance may vary from company to
company. Further differences may arise in the comparison due
to the timing of the recognition of cash remittance.
Total assets under management (AuM)
Definition and use
The assets under management are all assets or secu-
rity portfolios measured at fair value, in respect of which
Baloise Asset Management makes investment decisions
or bears responsibility 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 the Baloise’s asset management activities
over time and in comparison with other companies.
Changes in assets under management are essentially
driven by net new assets, market factors, exchange-rate
effects, and the effects of consolidation and deconsolida-
tion.
Limitations
As the new business margin is calculated from the value
of new business and the present value of new business
premiums, its usefulness is subject to the same limitations
as those measures.
Net new assets equates to the sum of assets of new
customers and additional contributions from existing
customers, less withdrawals from customer accounts,
closures of such accounts and distributions to investors in
the reporting period.
Cash remittance
Definition and use
Cash remittance is a performance measure for cash gener-
ation. It includes all dividends paid by subsidiaries to the
holding company, including contributions from interest
payments on loans. Cash remittance is the main basis for the
income that is used for dividends paid by Baloise Holding.
The dividend payments are recognised and disclosed in
the financial statements prepared in accordance with local
accounting standards. In addition, cash remittance is used
to cover expenses at the level of the holding company. Such
expenses include interest expense for the outstanding bonds
of Baloise Holding Ltd.
Limitations
The level of assets under management is subject to vola-
tility 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 perfor-
mance measure.
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Further information
Glossary
Actuarial reserves
Actuarial reserves are the reserves set aside to cover current
life insurance policies.
Baloise
“Baloise” stands for “the Baloise Group”, and “Baloise Holding”
means “Baloise Holding Ltd”. Baloise shares are the shares
of Baloise 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 investment-
linked life insurance policies during the reporting period.
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.
Claims ratio
The ratio of net claims incurred to insurance revenue,
expressed as a percentage.
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 net claims
incurred (loss ratio) and costs (expense ratio) expressed
as a percentage of insurance revenue. This ratio is used to
gauge the profitability of non-life insurance business.
Contractual service margin (CSM)
Represents the unearned profit of a group of insurance
contracts that an entity will recognise as it provides insur-
ance contract services in the future.
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 finan-
cial statements and the corresponding amounts reported
for tax purposes. The pertinent calculations are based on
country-specific tax rates.
Expected credit loss (ECL)
The credit losses expected according to the principles of IFRS
9 for financial instruments measured at amortised cost (AC)
or at fair value through other comprehensive income (FVOCI).
Expense ratio
A ratio of the costs of non-life insurance business to insur-
ance revenue, expressed as a percentage.
Fixed-income securities
Securities (primarily bonds) that yield a fixed rate of interest
throughout their term to maturity.
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.
Insurance benefit
The benefits provided by the insurer in connection with the
occurrence of an insured event.
Insurance revenue
Amount that reflects the consideration to which an insur-
ance company expects to be entitled in exchange for the
provision of services under insurance contracts.
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Further information
International Financial Reporting Standards
Since 2000 the Baloise Group has been preparing its consoli-
dated financial statements in compliance with International
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 (finan-
cial instruments with characteristics of debt), mortgage
assets, policy loans and other loans, derivative financial
instruments, and cash and cash equivalents.
Investment-linked life insurance
Life insurance policies under which policyholders invest their
savings for their own account and at their own risk.
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 invest-
ments 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 poli-
cies are lower than the assumptions on which the calcula-
tion of their premiums was based.
Legal quota
A legally or contractually binding percentage requiring life
insurance companies to pass on a certain share of their
profits to their policyholders.
Premium
The amount paid by the policyholder to cover the cost of
insurance.
Minimum interest rate
The minimum guaranteed interest rate paid to savers under
occupational pension plans.
Net
The net figures shown on the balance sheet or income state-
ment in an insurance company’s annual report are stated
after deduction of reinsurance.
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
the share of profit attributable to non-controlling interests.
The profit attributable to shareholders is the profit after
taxes excluding the share of profit attributable to non-con-
trolling interests.
New business margin
The value of new business divided by the volume of new
business.
Operating segments
Similar or related business activities are grouped together
in operating segments. The Baloise Group’s operating
segments are Non-Life, Life, Asset Management & Banking,
and Other Activities. The Other Activities operating segment
includes equity investment companies, real estate firms and
financing companies.
Reinsurance
If an insurance company itself does not wish to bear the
full risk arising from an insurance policy or an entire port-
folio 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.
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Further information
Return on equity (RoE)
A calculation of the percentage return earned on a compa-
ny’s equity capital during the reporting period; it represents
the profit generated in a given reporting period divided by
the company’s average equity during that period.
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.
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 Stand-
ards (IFRSs), which require similar transactions and busi-
ness activities to be grouped and presented together. These
aggregated operating activities are presented in “segments”,
broken down by geographic region and business line.
Technical result
Baloise calculates its technical result by netting all income
and expenses arising from its insurance business. Its tech-
nical result does not include income and expenses unrelated
to its insurance business or the net gains or losses on its
investments.
Unearned premium reserves
Deferred income arising from premiums that have already
been paid for periods after the balance sheet date.
Share buy-back programme
Procedure approved by the Board of Directors under which
Baloise can repurchase its own outstanding shares. Compa-
nies in Switzerland open a separate trading line in order to
carry out such buy-backs.
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 taxes.
Shares issued
The total number of shares that a company has issued. Multi-
plying the total number of shares in issue by their par value
gives the company’s share capital.
Value of new business
The value added by new business transacted during the
reporting period.
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 author-
ities 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.
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Further information
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Further information
Addresses
Switzerland
Baloise Versicherung AG
Aeschengraben 21
Postfach
CH-4002 Basel
Tel. + 41 58 285 85 85
kundenservice@baloise.ch
www.baloise.ch
Baloise Bank 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.ch
Germany
Baloise
Basler Strasse 4
D-61345 Bad Homburg
Tel. + 49 6172 130
info@baloise.de
www.baloise.de
FRIDAY
Friedrichstrasse 70
D-10117 Berlin
Tel. + 49 30 959 983 20
info@friday.de
www.friday.de
Luxembourg
Baloise
8, rue du Château d’Eau
L-3364 Leudelange
Tel. + 352 290 190 1
info@baloise.lu
www.baloise.lu
Belgium
Baloise
Posthofbrug 16
B-2600 Antwerpen
Tel. + 32 3 247 21 11
info@baloise.be
www.baloise.be
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Further information
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 2023 Annual Report and Annual Review is also avail-
able in German. Only the German text is legally binding. The
Financial Report contains the audited 2023 annual financial
statements together with detailed information. The Annual
Report contains all of the elements that, in accordance with Art.
961c of the Swiss Code of Obligations, make up the manage-
ment report. Amounts and ratios shown in the Annual Report
and Annual Review are generally stated in millions of Swiss
francs (CHF million) and rounded to one decimal place. Conse-
quently, 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 consti-
tutes neither an offer nor a request to exchange, purchase or
subscribe to securities; nor does it constitute an issue or listing
prospectus.
cies; (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 consideration new informa-
tion, future events, etc. Past performance is not indicative of
future results.
Availability and ordering
The 2023 Annual Report and Annual Review will be available
from 26 March 2024 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, Switzer-
land: www.baloise.com/order
Information for shareholders an 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.
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 predic-
tions 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 influ-
ence 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 poli-
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
© 2024 Baloise Holding Ltd, CH-4002 Basel
Publisher: Baloise Holding Ltd, Corporate Communications & Investor Relations
Concept, design: NeidhartSchön Ltd, Zurich
Photography: Marc Gilgen, Basel and Dominik Plüss, Basel
Publishing: mms solutions ltd, Zurich
English translation: LingServe Ltd (UK)
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Further information
Financial calendar and contacts
26 April 2024
Annual General Meeting
Baloise Holding Ltd
12 September 2024
Half-year financial results
Publication of the 2024 half-year report
Conference call for analysts and the media
12 September 2024
Investor Update
20 November 2024
Q3 interim statement
25 March 2025
Annual financial results
Publication of the 2024 annual report and
annual review
Media conference
Conference call for analysts
25 April 2025
Annual General Meeting
Baloise Holding Ltd
www.baloise.com/calendar
Corporate Governance
Philipp Jermann
Aeschengraben 21
CH-4002 Basel
Tel. + 41 58 285 89 42
vrs@baloise.com
Investor Relations
Markus Holtz
Aeschengraben 21
CH-4002 Basel
Tel. + 41 58 285 81 81
investor.relations@baloise.com
Media Relations
Roberto Brunazzi
Aeschengraben 21
CH-4002 Basel
Tel. + 41 58 285 82 14
media.relations@baloise.com
Sustainability & Regulatory Affairs
Gaby Lurie
Aeschengraben 21
CH-4002 Basel
Tel. +41 58 285 77 61
gaby.lurie@baloise.com
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Baloise Holding Ltd
Aeschengraben 21
CH-4002 Basel
www.baloise.com
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