Half Year Results 2012
«Good result follows operational excellence»
Basel, 30 August 2012
Making you safer.
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Half Year Results 2012
www.baloise.com
30 August 2012
2
01 Highlights
Martin Strobel, Group CEO
04
02 Financials
German Egloff, Group CFO
06
03 Operations
Martin Strobel, Group CEO
17
04 Strategy & Outlook
Martin Strobel, Group CEO
22
05 Appendix
29
Half Year Results 2012
www.baloise.com
30 August 2012
3
01 Highlights
Martin Strobel
Group CEO
Half Year Results 2012
www.baloise.com
30 August 2012
4
Highlights HY 2012
Good result from strong operations
 Profit of CHF 219 mn up by 7.8%; high cashflows stemming from strong operations
 Business volume up by 2.4%1)
 Excellent net combined ratio of 92.6%
 Stable recurring income and good investment performance of 3.0%2)
 Solid shareholders' equity, book value per share up by 6.4%
 Comfortable capitalisation: strong solvency I of 228%, S&P rating "A-, stable" confirmed
 «Baloise 2012» on the home stretch, full benefit of CHF 200 mn for FY 2012 expected
 «Safety World» product enhancements increase premiums and profit in Switzerland
1) local
2)
currency (LC)
insurance assets excl. investment-type assets; incl. costs and movements in unrealised capital gains
Half Year Results 2012
www.baloise.com
30 August 2012
5
02 Financials
German Egloff
Group CFO
Half Year Results 2012
www.baloise.com
30 August 2012
6
Key Figures
Solid set of results, profit up by 8%
in CHF mn
Half-year consolidated profit
Earnings per share (undiluted)
Total equity
Book value per share
Total business volume
Gross premiums written
Investment performance1)
Combined ratio, net
New business margin
Annual premium equivalent (APE)
Consolidated solvency I 4)
HY 2011
203
4.32
3,8932)
82.32)
5,176
4,522
1.7%
93.0%
19.2%
201
203%2)
HY 2012
219
4.68
4,134
87.6
5,190
4,438
3.0%
92.6%
7.1%3)
1443)
228%
+/-
7.8%
8.3%
6.2%
6.4%
0.3%
-1.9%
1.3 pts
-0.4 pts
-12.1pts
-28.5%
25 pts
1) insurance
assets excl. investment-type assets; incl. costs and movements in unrealised capital gains
per 31.12.2011
3) change in scope vs. YE 2011: incl. Nateus and excl. Baloise Life Liechtenstein
4) excl. banking
2) as
Half Year Results 2012
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30 August 2012
7
Net Profit - Analysis of Change
Strong performance of nonlife business
in CHF mn
203
56
-52
-1
14
-5
4
219
HY 2011
Nonlife
Life
Banking
Others
Borrowing
Costs
Taxes
HY 2012
Major triggers first half-year 2012:
Nonlife
 Excellent combined ratio
 High profitable growth
 Rebound of investment result
Life
 DAC write-down & reserve strengthening (partly compensated by derivatives)
 Lower premium volume due to restrictive underwriting policy
 Negative effects partly compensated with higher investment income
Half Year Results 2012
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30 August 2012
8
Nonlife Earnings
Profitable growth
-32
in CHF mn
-3
89
176
HY 2011
Premiums
earned
Claims
incurred
in CHF mn
Gross premiums written
Net premiums earned
Investment income
Claims incurred
Technical expenses
EBIT
Half Year Results 2012
Profit Sharing
232
-44
-2
48
Technical
Expenses
Other
Investment
Income
HY 2011
2,098
1,458
107
-898
-472
176
HY 2012
HY 2012
2,215
1,547
155
-930
-516
232
www.baloise.com
30 August 2012
+/5.6%
6.1%
44.6%
3.7%
9.3%
31.7%
9
Nonlife Combined Ratio
Excellent operational performance
net, in % of premiums earned
HY 2012
HY 2011
Reported Loss Ratio
60.8%
Reported Loss Ratio
59.4%
Loss ratio
PYLD 1)
3.0%
Expense ratio
Large claims above CHF 4 mn
-1.5%
Surplus sharing ratio
Underlying Loss Ratio
62.3%
93.0%
0.7%
0.3%
-2.4%
PYLD 1)
Large claims above CHF 4 mn
-1.8%
Underlying Loss Ratio
63.0%
1.0%
92.6%
60.8%
59.4%
31.7%
0.5%
32.5%
Combined ∆ Claims current ∆ Large claims
Ratio HY 2011 accident year
& NatCat 2)
5.4%
0.7%
∆ PYLD 1)
∆ Costs 3)
Combined
Ratio HY 2012
 Excellent underlying loss ratio despite higher claims load in Germany
 Positive development of prior year claims
 Integration of Belgian units impact combined ratio with 0.5 pts
1)
prior year loss development
incl. large claims above CHF 4 mn
3) incl. ∆ surpuls sharing ratio
2)
Half Year Results 2012
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30 August 2012
10
Nonlife Combined Ratio by Country
Strong cashflow from Switzerland
Switzerland
gross, in %
Germany
Belgium
Luxembourg
Croatia
(incl. Serbia)
Austria
Group
Loss ratio
55.1
66.1
57.7
84.4
62.2
59.6
59.4
Expense ratio
25.3
34.2
36.5
35.4
33.6
52.8
31.4
1.3
0.4
0.2
0.0
-
-
0.7
81.7
100.7
94.4
119.8
95.8
112.4
91.5
-3.6
5.4
-2.6
34.0
1.7
4.8
0.2
∆ Expense ratio
0.6
-0.3
1.6
-1.2
-0.4
0.9
0.8
∆ Surplus sharing ratio
0.4
-0.0
0.0
-0.0
-0.0
-
0.2
-2.6
5.1
-1.0
32.8
1.3
5.7
1.2
Surplus sharing ratio
Combined ratio HY 2012
Change vs. HY 2011 (in pts)
∆ Loss ratio
∆ Combined ratio
Half Year Results 2012
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30 August 2012
11
Life Earnings
Restrictive underwriting policy dampens growth
in CHF mn, excl. investment-type assets
HY 2011
HY 2012
+/-
Business volume
3,078
2,975
-3.4%
Gross premiums written
2,424
2,224
-8.3%
Net premiums earned
2,413
2,211
-8.4%
Investment-type premiums
654
751
Investment income
637
749
14.9%
17.6%
-2,672
-2,487
-6.9%
-227
-375
65.4%
101
49
39
102)
-51.9%
-73.5%
201
1442)
-28.5%
19.2%
7.1%2)
-12.1 pts
Benefits to policyholders 1)
Technical expenses
EBIT
Value of new business
Annual premium equivalent (APE)
New business margin
1)
incl. change in technical reserves
in scope vs. YE 2011: incl. Nateus and excl. Baloise Life Liechtenstein
2) change
Half Year Results 2012
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30 August 2012
12
Asset Management
Investment result back on track
Drivers
Currency
Measures
110
100
EUR/CHF
USD/CHF
90
80
Interest
Rates
150
Swiss Govt
125
Germ Govt
100
75
50
Equities
 Despite SNB EUR/CHF peg hedging quota
above 90% on fixed income instruments
 USD hedge ratio on alternative investments
managed more actively; no hedging of earnings
of foreign business units and equities
 Low interest rate environment persists
 Duration again increased by 0.3 years
 Further reduction of GIIPS exposure;
Greek and Portuguese exposure sold
120
110
100
90
SPI
EuroStoxx50
80
Half Year Results 2012
 Equity quota kept stable
 New investment approach on high quality stocks
and sustainable high payments of dividend
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30 August 2012
13
Asset Allocation
High quality and strong diversification
excluding banking assets and assets from investment-type premiums
Equity & equity related investments
In % total insurance assets
HY 2012 (FY 2011)
Mortgage
Loans
9.1% (9.5%)
Other
short-term
investments
3.2% (3.6%)
Shares &
funds
4.3% (4.3%)
Equities
Investment
property
9.8% (9.9%)
Alternative
financial
investments1)
2.5% (2.6%)
Policy &
other loans
15.5% (14.9%)
Fixed-interest
securities
55.6% (55.2%)
1) private
equity & hedge funds
3.0 %
Equity derivatives
-0.1 %
Equities incl. derivatives
2.9 %
Private Equity
1.0 %
Hedge Funds (equity related)
0.0 %
Other 2)
1.2 %
Equity & equity related investments
5.1 %
2) e.g.
bond & property funds treated as equity under IFRS
In CHF mn, %
Equity & equity-related investments (net)
Total insurance assets
Half Year Results 2012
HY 2012
FY 2011 HY 2012
4.8 %
5.1 %
50,032
51,512
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30 August 2012
14
Investment Yield
High recurring income underpins solid investment yield
HY 2012 (HY 2011) in CHF mn, excl. income on investment-type insurance contracts, before PH participation
Nonlife
other
Recurring gross income
Shares
Fixed-income securities
other
31
24
81
157 (153)
-10 (-10)
of which FX impact CHF -2 mn
of which FX hedges CHF 0 mn
-13 (-2)
Investment expenses
1)
21
Fixed-income securities
Investment properties
188 34
360
100 682 (669)
17 (-8)
-12 (-17)
8 (-36)
Average investments
Shares
33 (-17)
Net realised gains/losses
Total net income
from investments
Life
-14 (-65)
of which FX impact CHF -33 mn
103 (80)
of which FX hedges CHF 21 mn
106 (7)
-39 (-39)
155 (107)
749 (637)
1.7% (1.3%)1)
9.058
1.8% (1.7%)1)
41.714
investment yield including costs, excluding movements in unrealised capital gains, excluding investment-type assets
Half Year Results 2012
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30 August 2012
15
Change in Equity
Book value per share up by 6.4%
Total equity at January 1 (incl. minorities)
Other comprehensive income
Dividends
3,894
82.3
228
-212
Half-year consolidated profit
219  = 6.2%
Purchase / sale of treasury shares
6
Change in minority interests
-
Total equity at June 30 (incl. minorities)
1)
Per share 1)
HY 2012
in CHF mn
4,134
 = 6.4%
87.6
based on consolidated total equity (excluding minorities) and on average shares outstanding
Half Year Results 2012
www.baloise.com
30 August 2012
16
03 Operations
Martin Strobel
Group CEO
Half Year Results 2012
www.baloise.com
30 August 2012
17
Business Volume
Strong growth in nonlife and unit-linked business
By country
By line of business
5,176
30
-2
5,190
Other
units 1)
Rest
HY 2012
9
-181
-42
HY 2011 Switzerland Germany
in CHF mn
Belgium Luxembourg
HY 2011
HY 2012
+/-
+/- LC 2)
Switzerland
3,040
2,859
-6.0%
-6.0%
Germany
1,016
974
-4.1%
1.1%
Belgium
515
715
38.7%
46.2%
Luxembourg
272
281
3.1%
8.6%
units1)
327
357
9.3%
-
Rest
6
4
-38.3%
-38.5%
Total
5,176
5,190
0.3%
2.4%
Other
5,176
117
-200
97
5,190
Nonlife
Life
Unit-linked
HY 2012
200
HY 2011
in CHF mn
HY 2011 HY 2012
+/-
+/- LC 2)
Nonlife
2,098
2,215
5.6%
8.6%
Life
2,424
2,224
-8.3%
-7.3%
654
751
14.9%
18.7%
5,176
5,190
0.3%
2.4%
Unit-linked
Total
1) Austria,
2) local
Croatia, Serbia and Baloise Life Liechtenstein
currency (LC)
Half Year Results 2012
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30 August 2012
18
EBIT
High contribution of nonlife business
By country
By line of business
-37
0
HY 2011 Switzerland Germany
in CHF mn
Switzerland
4
12
2
273
290
273
56
HY 2011
Nonlife
290
-52
-1
14
Banking
Other
36
Belgium Luxembourg
HY 2011
Other
units
Rest
HY 2012
HY 2012
+/-
Life
HY 2012
in CHF mn
HY 2011
HY 2012
+/-
Nonlife
176
232
31.7%
Life
101
49
-51.9%
174
137
-21.4%
Germany
13
14
1.5%
Belgium
41
77
89.0%
Banking
37
36
-2.2%
Luxembourg
5
7
44.4%
Other 3)
-41
-27
-34.5%
Other units1)
-9
2
-
Total
273
290
6.2%
Rest 2)
Total
49
53
8.1%
273
290
6.2%
3) incl.
Bâloise Holding AG, Corporate IT, Baloise Incentive Foundation, etc.
1) Austria,
2) incl.
Croatia, Serbia and Baloise Life Liechtenstein
Bâloise Holding AG, internal reinsurance, Corporate IT. etc.
Half Year Results 2012
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30 August 2012
19
Highlights Swiss Operations
Safety World contributes to growth
Nonlife:
Gross premiums written:
Combined Ratio, gross:
EBIT:
CHF 1,037 mn (1.4%)
81.7% (-2.6 pts)
CHF 89 mn (56.4%)
Life:
Gross premiums written:
Investment-type premiums1):
EBIT:
New business margin:
CHF 1,778mn (-9.8%)
CHF 119 mn (15.1%)
CHF 40 mn (-63.9%)
6.1% (-16.7 pts)
Baloise Bank SoBa2): (local GAAP)
Profit for the period:
Client deposits:
Client loans:
Cost income ratio:
1)
CHF 13 mn (+0.1%)
CHF +125 mn (+2.7%)
CHF +70 mn (+1.2%)
63% (-0.4 pts)
 Excellent operational profitability
 Safety World contributes to growth
 Growth in Group Life annual premiums by 2.7%
 Declining total volume due to restrictive
underwriting policy
 Innovative products lead to strong growth in
investment-type premiums
 Customer confidence leads to increase in
savings and assets
 Steady profitability despite adverse interest rate
environment
investment-type premiums incl. CHF 75 mn variable annuities stemming from Baloise Life Liechtenstein
sheet positions compared to 31.12.2011, profit and loss positions compared to 30.06.2011
2) balance
Half Year Results 2012
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30 August 2012
20
Highlights International Operations
Growth in all markets
Germany:
 Unwinding completed; connection of Deutscher Ring and Basler Germany on
track
Belgium:
 Growth well above market average; business volume in nonlife up by 34.3%1)
and in life by 58.6%1) while unit-linked products add 100.6%1). Even excluding
the consolidation of Nateus there is significant total growth of 6.4%1)
Luxembourg:
 Strong growth in life (24.7%1)) and growth above market average in nonlife
(6.9%1))
Austria:
 Strong growth leads to a further improved cost ratio
Croatia:
 Break-even reached in a declining market environment
Liechtenstein:2)  Increased VA production; strengthening the cooperation with Luxembourg
1) local
currency (LC)
Life Liechtenstein
2) Baloise
Half Year Results 2012
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30 August 2012
21
04 Strategy & Outlook
Martin Strobel
Group CEO
Half Year Results 2012
www.baloise.com
30 August 2012
22
Baloise 2012
Major contributors in the first half of the year 2012
Optimise:
 Successful claims management and cost initiatives in Switzerland
 Cost optimisation initiatives in Belgium
 Centralized group procurement
Grow:
 Pricing initiative in Switzerland
 Growth of Variable Annuity business in Germany
 Growth in life business in Belgium
Develop:
 Steady income from investment type life insurance business
 Baloise 2012 fully on track
Additional sustainable profit of
CHF 200 mn until 2012
200
150
92 1)
34
2009
1) includes
2010
2011
2012 E/Target
one-off payment out of unwinding in Germany
Half Year Results 2012
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30 August 2012
23
Baloise 2012
Sample initiatives
Optimise:
Optimise:
"Goede dag! Hoe kan ik u
helpen?" - Corporate IT now
speaking Dutch
 The consolidation of the
Datacentres in Basel and the
harmonization of the end user
infrastructure in the Group is
progressing according to plan
 For Mercator in Belgium, our
Helpdesk in Basel answers
and supports users in Dutch
and French
Half Year Results 2012
Group Procurement established
 Implementation of a group-wide
procurement platform is on
track
 The initiative won the 2012
award for best business
transformation by the
Association of Management
Consultants in Switzerland
Grow:
Integration of former Fortis
successfully completed in
Luxembourg
 Further decrease of expense
ratio due to higher cost
efficiency and economies of
scale
 Significant increase of market
share in local nonlife market
 Top 3 position in property and
liability
 Significant increase of selling
capacity
www.baloise.com
30 August 2012
24
Financial Ambition
Focus on operational excellence

Combined ratio well below 100%

New business margin of ≥10%

Attractive payout to shareholders
Half Year Results 2012
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30 August 2012
25
Q&A
Half Year Results 2012
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30 August 2012
26
05 Appendix
I Financials
Business Matrix
29
Nonlife
31
Life
32
Asset Allocation
35
Comprehensive Income
48
Unrealised Gains
49
Solvency
51
Currency
52
II Operations
Switzerland
54
International
57
III Reporting Agenda & Contact Details
Half Year Results 2012
www.baloise.com
30 August 2012
27
I Financials
Half Year Results 2012
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30 August 2012
28
Business Matrix HY 2012
in CHF mn
Life
Switzerland
(excl. VA)
1,778 80.0%
62.2%
Unit-linked
44 5.9%
1.5%
Nonlife
1,037 46.7%
36.3%
Total
2,859 55.0%
100.0%
Germany
315 14.2%
32.3%
114 15.2%
11.8%
545 24.6%
55.9%
974 18.7%
100.0%
Belgium
71 3.2%
9.9%
144 19.2%
20.2%
500 22.6%
69.9%
715 13.8%
100.0%
Half Year Results 2012
Luxembourg
34 1.5%
12.1%
199 26.5%
70.9%
48 2.2%
17.0%
281 5.4%
100.0%
Austria
10 0.4%
12.3%
9 1.2%
10.9%
62 2.8%
76.8%
81 1.6%
100.0%
Croatia/
Serbia
Liechtenstein
15 0.7%
43.5%
-
0.0%
0.0%
19 0.9%
56.2%
34 0.7%
100.0%
1 0.0%
0.4%
-
Total
0.0%
0.0%
241 32.0%
99.6%
-
Rest
-
42.8%
0.0%
0.0%
0.0%
0.0%
242 4.7%
100.0%
www.baloise.com
2,224 100.0%
4 0.2%
100.0%
4 0.1%
100.0%
30 August 2012
751 100.0%
14.5%
2,215 100.0%
42.7%
5,190 100.0%
100.0%
29
Growth Matrix HY 2012
in % in CHF
(in % in LC)
Life
Unit-linked
Nonlife
Total
Austria
Croatia/
Serbia
Liechtenstein
Rest
Total
18.3%
-13.9%
-5.7%
-75.8%
-
-8.3%
(58.6%)
(24.7%)
(-9.3%)
(1.4%)
-
(-7.3%)
-5.9%
90.3%
1.2%
11.8%
-
-
14.9%
(-0.8%)
(100.6%)
(6.7%)
(17.9%)
-
-
(18.7%)
-0.5%
27.4%
1.5%
1.6%
-6.8%
-38.5%
5.6%
(4.8%)
(34.3%)
(6.9%)
(7.0%)
(0.7%)
-4.1%
38.7%
3.1%
0.3%
-6.3%
(1.1%)
(46.2%)
(8.6%)
(5.8%)
(1.0%)
Switzerland
(excl. VA)
Germany
-9.8%
-9.2%
50.5%
(-4.3%)
-6.1%
1.4%
-6.0%
Belgium Luxembourg
Half Year Results 2012
17.3%
-
(8.6%)
15.4%
-38.5%
0.3%
(2.4%)
www.baloise.com
30 August 2012
30
Business Mix Nonlife
in % of gross premiums written
HY 2012
HY 2011
Motor
33.1%
Motor
34.0%
General
liability
11.6%
General
liability
11.2%
Health
4.6%
Health
4.7%
Property
27.6%
Property
28.2%
Accident
14.4%
Accident
15.4%
Active
reinsurance
1.3%
Other
1.4%
Transport
4.3%
in CHF mn
Gross premiums written nonlife
Half Year Results 2012
Active
reinsurance
1.2%
Other
1.8%
Transport
5.2%
HY 2011 HY 2012
2,098
2,215
www.baloise.com
30 August 2012
31
Business Mix Life
in % of gross premiums written, excl. investment-type premiums
HY 2011
HY 2012
Individual life
29,6%
15,1%
Individual life
31,2%
13,7%
84,9%
86,3%
70,4%
Group Life
1)
68,8%
44,3%
55,7%
36,2%
Group Life 1)
63,8%
Single Premiums
1)
Periodic premiums
Swiss Group life business only
Half Year Results 2012
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30 August 2012
32
New Business Life: Split by Country
CH
D
B
-83%
-33%
n.m.
in CHF mn
Value of
new business
(MCVNB)
Annual
premium
equivalent
(APE)
NB Margin
(in % APE)
NB Margin
(in % of PVNBP)
1) change
5
7
HY
2011
HY
2012
HY
2011
-36%
-12%
2
27
4
HY
2012
-2
HY
2011
HY
2012
119
76
30
28
HY
2011
HY
2012
HY
2011
HY
2012
10
HY
2011
-73%
3
3
39
10
HY
2011
HY
2012
HY
2011
HY
2012
78%
-8%
Group 1)
Lux
-28%
4%
19
21
22
201
144
HY
2012
HY
2011
HY
2012
HY
2011
HY
2012
HY 2012
∆ pts
HY 2012
∆ pts
HY 2012
∆ pts
HY 2012
∆ pts
HY 2012
∆ pts
6.1%
-16.7
16.2%
-6.0
-8.7%
-24.4
12.4%
-2.2
7.1%
-12.1
0.5%
-1.6
2.2%
-1.4
-0.8%
-2.3
1.3%
-0.2
0.6%
-1.2
in scope vs. YE 2011: incl. Nateus and excl. Baloise Life Liechtenstein
Half Year Results 2012
www.baloise.com
30 August 2012
33
Technical Reserves Life
gross, in CHF bn
Other
Belgium &
Luxembourg
Germany
36
0
2
11
23
Individual Life
9
14 1)
Switzerland
23
Switzerland
14
Group
Life
5
Other provisions 2)
4
Extra-mandatory
5
Mandatory
1) local GAAP
2) provisions for annuities, mortality, disability, reserve strengthening, cost of living adjustment fund
Half Year Results 2012
www.baloise.com
30 August 2012
34
Group Asset Allocation
HY 2011
Other shortterm
investments
3.4%
Derivatives
0.5%
HY 2012
Investment
property
9.4%
Mortgage loans
20.0%
Other shortterm
investments Shares & funds
Derivatives
3.0%
3.8%
0.5%
Shares & funds
4.3%
Policy & other
loans
13.2%
Investment
property
8.9%
Policy & other
loans
13.1%
Mortgage loans
18.8%
Alternative
financial
investments 1)
2.2%
Alternative
financial
investments1)
2.2%
Fixed-interest
securities
47.0%
Fixed-interest
securities
49.7%
in CHF mn
Total group assets 2)
HY 2012
58,388
1) private
2) incl.
equity and hedge funds
banking assets, excl. assets from investment-type premiums
Half Year Results 2012
www.baloise.com
30 August 2012
35
Impairments in HY 2012
Financial assets of a debt nature
Financial assets of an equity nature
Impairments (in CHF mn), gross
38
Impairments (in CHF mn), gross
1
Impairments (in CHF mn), net
29
Impairments (in CHF mn), net
0
Impairments (gross) in % of ø asset
of an equity nature
 Significantly lower impairments
Half Year Results 2012
1.1%
Impairments (gross) in % of ø assets
of a debt nature
0.0%
 Broadly diversified portfolio of high quality
bonds
 Only marginal GIIPS exposure
www.baloise.com
30 August 2012
36
Total Insurance Assets: Currency Exposure, Gross
excluding banking assets and assets from investment-type premiums
Foreign operations
Swiss operations
Group
EUR
13.8%
CHF
47.6%
Misc.
4.2%
CHF
0.1%
Misc.
1.6%
EUR
49.2%
CHF
81.9%
Misc.
3.2%
in CHF mn
Total insurance assets
Half Year Results 2012
EUR
98.2%
HY 2012
51,512
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30 August 2012
37
Equity Portfolio: Regional Exposure
excluding banking assets and assets from investment-type premiums
CH
21.4%
EMMA
0.8%
USA
0.0%
Other
1.8%
Funds 1)
24.2%
EU
51.8%
in CHF mn
Total equity investments
Half Year Results 2012
1) treated
as equity under IFRS
HY 2012
2,205
www.baloise.com
30 August 2012
38
Hedge Fund Portfolio
excluding banking assets and assets from investment-type premiums
HY 2012
Total hedge fund investments
(in CHF mn)
Performance (in USD)
835
Event driven
8.1%
6
0.8%
 Cautious positioning of Global Marcro funds
caused muted performance during Q1 rally
 Broadly diversified portfolio (~50 funds &
11 funds of funds)
 FX-risk mainly hedged
1) part
Relative
value
25.1%
0.5%
Impairments1) (in CHF mn), gross
Impairments in % of ø Hedge Funds
By style
Equity
hedged
10.2%
Global
macro
41.3%
Misc. / Cash
5.7%
Managed
futures
9.6%
of the impairments on financial assets with an equity nature
Half Year Results 2012
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30 August 2012
39
Private Equity Portfolio
excluding banking assets and assets from investment-type premiums
HY 2012
Total private equity investments
(in CHF mn)
Performance
(in USD, Sep 11 - Mar 12)
Impairments1) (in
CHF mn), gross
Impairments in % of ø Private Equity
Misc.
17.1%
By type
466
Venture
capital
16.2%
1.6%
Buyout
66.7%
0.4
0.1%
By region
 Performance mainly driven by realised gains
 New commitments of 57 mn USD
 FX-risk to a large extent hedged
RoW
8.9%
USA
29.0%
EU
62.1%
1) part
of the impairments on financial assets with an equity nature
Half Year Results 2012
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30 August 2012
40
Investment Property and Mortgages
excluding banking assets and assets from investment-type premiums
HY 2012
in CHF mn
Total investment property
By country
Germany
10.9%
5,040
By type
Total mortgages
4,682
Gross yield1)
2.6%
BeNeLux
9.1%
Other EU
3.6%
Commercial
36.7%
RoW
0.7%
administration costs
-3 bps
risk costs
-1 bps
Net yield1)
1)
Switzerland
75.7%
HY 2012
in CHF mn
2.5%
annualised, in % of mortgage investments
Residential
63.3%
 Well diversified portfolio, only invested in
solid markets
 Stable valuation generating regular periodic
income
Half Year Results 2012
 Low interest rates leading to a lower
yield
 Portfolio of excellent quality due to
credit guidelines of high standing
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30 August 2012
41
Bond Portfolio
excluding banking assets and assets from investment-type premiums
By quality
By ordination
AAA
46.5%
Government &
Government
endorsed
59.4%
Subordinated
1.2%
not rated
1.0%
<BBB
1.3%
BBB
7.1%
Senior
15.4%
A
12.1%
AA
31.9%
in CHF mn
Total bond investments
Half Year Results 2012
Covered
24.0%
HY 2012
28,655
www.baloise.com
30 August 2012
42
Bond Portfolio: Issuers
excluding banking assets and assets from investment-type premiums
Subordinated
3.4%
Financials
32.9%
Covered
72.9%
Senior
23.7%
Subordinated
1.1%
Government
Government
endorsed
59.4%
Corporates
7.7%
&
Senior
98.9%
in CHF mn
Total bond investments
Half Year Results 2012
HY 2012
28,655
www.baloise.com
30 August 2012
43
Bond Portfolio: Sovereign and Public Debt
excluding banking assets and assets from investment-type premiums
By region
By quality
AA
42.0%
EU-15
57.0%
GIIPS
3.9%
Supranational
11.1%
other core EU
36.1%
A
5.3%
Central eastern
europe
4.1%
BBB
4.6%
RoW
2.3%
Germany
17.0%
< BBB
1.2%
USA
0.3%
Switzerland
25.4%
not rated
1.5%
AAA
45.5%
 Broadly diversified portfolio of high quality sovereign debt
In CHF mn
Total Sovereign and Public Debt
Half Year Results 2012
HY 2012
16,925
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30 August 2012
44
GIIPS-Sovereign Exposure
Market Value
31.12.2011
Book Value
31.12.2011
Market Value
30.06.2012
Book Value
30.06.2012
Greece
39
39
-
-
Irland
163
165
171
171
Italy
330
335
286
289
Portugal
94
123
-
-
Spain
196
207
173
192
Total
822
869
630
652
in CHF mn
 Further reduction of GIIPS exposure
 Exposure to Greece and Portugal totally eliminated
 Market values mostly reflected in balance sheet
Half Year Results 2012
www.baloise.com
30 August 2012
45
Bond Portfolio: Currency Exposure of Swiss Operations
excluding banking assets and assets from investment-type premiums
USD
5.9%
Life
Total bonds
Nonlife
other
0.6%
USD
0.6%
EUR
21.1%
other
0.1%
USD
0.1%
EUR
20.0%
EUR
20.1%
CHF
72.5%
CHF
79.2%
CHF
79.9%
 Total net currency exposure after hedges & liabilities: 0.1% EUR, 0.2% USD
in CHF mn
Total bonds investments1)
1) held
HY 2012
19,545
by Swiss operations
Half Year Results 2012
www.baloise.com
30 August 2012
46
Duration of Bonds and Promissory Notes
excluding banking assets and assets from investment-type premiums
Duration by classification
2011
Years
Duration bonds available-for-sale (AFS)
Duration bonds held-to-maturity (HTM)
Duration promissory notes
Duration portfolio
% of total
6.1
8.2
6.2
6.7
Duration by line of business
Half Year Results 2012
57.9%
24.5%
17.6%
100%
2011
Years
Duration life bonds (incl. promissory notes)
Duration nonlife bonds (incl. promissory notes)
Duration portfolio
HY 2012
6.6
8.5
6.4
7.0
% of total
58.1%
24.1%
17.8%
100%
HY 2012
% of total
6.9
5.1
6.7
Years
85.5%
14.5%
100%
www.baloise.com
Years
7.3
5.3
7.0
30 August 2012
% of total
85.6%
14.4%
100%
47
Comprehensive Income
in CHF mn
219
Half-year consolidated profit
∆ unrealised gains and losses on AFS assets
585
∆ unrealised gains and losses from associates
1
∆ hedging reserves on derivatives held for cash flow hedging
0
∆ hedging reserves on derivatives held for hedging
-1,319
a net investment in a foreign entity
-11
∆ reserves from reclassification of HTM financial instruments
-3
∆ reserves from reclassification of investment properties
0
exchange differences
∆ shadow accounting
-11
-396
-238
income taxes
Other comprehensive income
-95
228
447
Comprehensive income
Half Year Results 2012
www.baloise.com
30 August 2012
48
Gross Unrealised Capital Gains
Shares
in CHF mn, incl. minorities
-55
AFA
185
Fixed-interest securities
892
Participations and other
179
Total gross
unrealised gains HY 2012
-9
-1,319
-0
1,201
-10
1,201
∆ Participations
and other
Gross unrealised
gains HY 2012
591
629
-396
Gross unrealised
gains FY 2011
∆ Fixed-interest
securities
Half Year Results 2012
∆ Shares
∆ Alternative
financial
investments (AFA)
www.baloise.com
30 August 2012
49
Net Unrealised Capital Gains
in CHF mn, incl. minorities
573
-238
-95
-12
-398
-626
Net unrealised
gains FY 2011
1)
∆ Gross
unrealised gains
∆ Surplus shares
to policyholders
and shadow
accounting1)
∆ Deferred taxes
∆ Currency
translation
differences
(incl. hedges)
Net unrealised
gains HY 2012
incl. DAC, URR, terminal policyholders' dividends
Half Year Results 2012
www.baloise.com
30 August 2012
50
Consolidated Solvency I
in CHF bn, excluding banking assets
Required vs. available capital
Capital required
Available funds
2.1
0.5
0.5
228%
HY 2012
Nonlife
Total equity
4.1
Goodwill / intangibles
-0.3
DAC nonlife
-0.2
Unallocated surplus
1.5
1.6
4.8
Life
1.6
Other
-0.0
Banking assets
-0.4
Total
4.8
2.1
Capital
required
Half Year Results 2012
Capital
available
www.baloise.com
30 August 2012
51
Currency
B/S
in CHF
FY 2011
P/L
HY 2012
HY 2011
HY 2012
EUR
1.21
1.20
1.27
1.20
USD
0.94
0.95
0.91
0.93
www.baloise.com
30 August 2012
Half Year Results 2012
52
II Operations
Half Year Results 2012
www.baloise.com
30 August 2012
53
Switzerland
Nonlife
1,037 (1.4%)
89 (56.4%)
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Life
1,778 (-9.8%)
1191) (15.1%)
40 (-63.9%)
Nonlife
Life
 Excellent operational profitability
 Growth in Group Life annual premiums by 2.7%
 Safety World contributes to growth
 Declining business volume due to restrictive
underwriting policy
 Operational excellence and sound financial
result lead to higher EBIT
 Innovative products lead to strong growth in
investment-type premiums despite difficult
market environment
1) investment
type premiums incl. CHF 75 mn variable annuities stemming from Baloise Life Liechtenstein
Half Year Results 2012
www.baloise.com
30 August 2012
54
Switzerland: Baloise Bank SoBa
in CHF mn, local GAAP
Interest income
HY 2011
HY 2012
+/-
42
42
-1.5%
Fee and commission income
8
8
-3.5%
Trading income
2
2
5.8%
53
52
-1.1%
-34
-33
-1.6%
19
19
-0.3%
13
63.4%
13
63.0%
0.1%
-0.4 pts
8.5%
8.0%
-0.5 pts
Gross yield
Expense
Gross profit
Profit for the period
Cost / income ratio
Return on Equity
Half Year Results 2012
www.baloise.com
30 August 2012
55
Switzerland: Cooperation Bank and Insurance
Total volume generated by customer
advisors of Baloise Insurance
 Collaboration model with the insurance
agents is a successful business model
+4%
in CHF mn
2,027
2,119
1,894
1,618
554
689
736
394
 The linking between financial precautions
and wealth management offers great
potential
 The behavioral finance advisory approach
'Baloise Investment Advice' leads to
verifiable customer satisfaction
1,221
1,043
834
249
51
198
451
102
349
648
144
504
255
196
173
1,224
661
847
966
2003 2004 2005 2006 2007 2008 2009 2010 2011 HY2012
Client loans
Half Year Results 2012
1,340 1,338 1,383
www.baloise.com
Client deposits
30 August 2012
56
Germany
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Nonlife
545 (4.8%1))
19 (57.6%)
Life
315 (-4.3%1))
114 (-0.8%1))
-4 (n.m.)
 Positive premium growth in nonlife, compensating the decreasing life premium in a difficult
market situation
 Result negatively effected due to two major fire claims which increase the combined ratio
 Integration of Deutscher Ring and Basler Germany evolving as planned and all targets for
2012 will be reached
1) local
currency (LC)
Half Year Results 2012
www.baloise.com
30 August 2012
57
Belgium
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Nonlife
500 (34.3%1))
43 (42.8%)
Life
71 (58.6%1))
144 (>100%1))
32 (>100%)
 Strong overall premium growth due to organic growth above market in nonlife and
consolidation of Nateus
 Improved claims ratio in all lines of business
 Integration of Avéro completed and integration of Nateus fully on track; significant
strengthening of market position
1) local
currency (LC)
Half Year Results 2012
www.baloise.com
30 August 2012
58
Luxembourg
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Nonlife
48 (6.9%1))
4 (>100%)
Life
34 (24.7%1))
199 (6.7%1))
4 (-7.0%)
 Strong growth in nonlife and life especially due to the distribution channel of Konex adding
significantly to profitable new business
 Major fire claim affects the claims ratio negatively and increases the combined ratio
 Expansion of centre of competence for freedom of services in cooperation with Liechtenstein
1) local
currency (LC)
Half Year Results 2012
www.baloise.com
30 August 2012
59
Austria
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Nonlife
62 (7.0%1))
0.8 (5.4%)
Life
10 (-9.3%1))
9 (17.9%1))
-0.7 (42.8%)
 Continuous strong growth in nonlife and life above market
 Positive growth dynamics improve the expense ratio
 Further investments in own sales force to enable further growth
1) local
currency (LC)
Half Year Results 2012
www.baloise.com
30 August 2012
60
Croatia
in CHF mn
Gross premiums written
Investment-type premiums
EBIT
Nonlife
19 (0.7%1))
1.7 (n.m.)
Life
15 (1.4%1))
3.7 (n.m.)
 Break-even reached in a recessive market environment
 Positive growth dynamics in life
 Greenfield operation in Serbia according to plan
1) local
currency (LC)
Half Year Results 2012
www.baloise.com
30 August 2012
61
Liechtenstein
HY 2012
in CHF mn
Business Volume
242 (15.4%)
Whereof generated by
Liechtenstein
Switzerland (only VA)
161 (10.6%)
75 (33.0%)
 Strong business volume out of Italy
 New business volume of Variable Annuities increased compared to last year
 Re-pricing of RentaSafe Time and Renta Protect due to further decrease of interest rates
Half Year Results 2012
www.baloise.com
30 August 2012
62
III Reporting Agenda & Contact Details
Half Year Results 2012
www.baloise.com
30 August 2012
63
Reporting Agenda
 Full Year Results 2012
Tuesday, 19 March 2013
 Annual General Meeting
Thursday, 2 May 2013
 Half Year Results 2013
Thursday, 29 August 2013
You will find all published documentation at www.baloise.com
Half Year Results 2012
www.baloise.com
30 August 2012
64
Contacts
Investor Relations
Media Relations
+41 58 285 81 81
+41 58 285 84 67
[email protected]
[email protected]
www.baloise.com/investors
www.baloise.com/media
Half Year Results 2012
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30 August 2012
65
Making you safer.