Your Swiss insurer. helvetia 20.20 14 March 2016 Strategy helvetia 20.20
The Helvetia 2015+ strategy was successful... What we are proud of: Market positions expanded considerably Volume increase 2010-2015: 34%, share of non-life increased substantially Market position improved in CH, AT, IT, FR, additional focus on niche markets Profitability increased Improvement in earnings 2010-2015: approx. 30% Dividend increased from CHF 14.50 to CHF 19.00 for 2015 (proposal to Shareholders' Meeting) Customer benefits improved Increase in number of customers to almost 5 million in 2015 High level of customer satisfaction confirmed by many rankings Brand awareness and image improved further What is on our agenda: Changes in customer behaviour and customer expectations Low interest rate environment poses challenge to life business Different solvency regimes in Switzerland and Europe increase complexity of capital management Further progress in positioning of market units in Europe Helvetia is in a position of strength. Strategy helvetia 20.20 14 March 2016 2
...and Helvetia is well positioned Europe Profitable and expandable market positions Same customer segments (retail/sme) Additional synergies within the Group Switzerland Top 3 position in stable and profitable home market Solid foundation for Group's further development Specialty Markets Strong positioning in selected niche markets (top 1 CH, top 2 FR) Good international diversification Helvetia has an attractive portfolio to benefit from the future. Strategy helvetia 20.20 14 March 2016 3
We have ambitious target positionings... Target positioning of helvetia 20.20 Switzerland: (illustration) Increase in Switzerland s profit contribution through organic growth, innovation and synergies from past acquisitions Switzerland Objective: Best Swiss insurer tion Profit contribut Premium growth Size of circles= premium volumes Organic growth rates (2010-2015) and profit contributions Expected organic growth Europe: Further expansion in Europe and increase in profit Europe contribution by focusing on growth, acquisitions, synergy effects and efficiency enhancements Specialty Markets Objective: Significantly improved positioning Specialty Markets: Profitable growth in current selected niche markets with growing contribution to the Group Objective: Further growth as selective niche player The combination of a growing profit contribution of Switzerland and profitable growth opportunities abroad makes Helvetia attractive. Strategy helvetia 20.20 14 March 2016 4
...and make us fit for the future Fit for the future Modern and increasingly gydigital Customer-centric by combining traditional strengths and new opportunities Agile and efficient i Still personal and reliable Sustainable ab promises to customers s Healthy capital base Added value for customers Customised and personalised insurance and pension solutions offering greater convenience Added value for employees Attractive and forward-looking employer Added value for shareholders Constant increase in profit and dividend capacity Strategy helvetia 20.20 14 March 2016 5
helvetia 20.20 focuses on the most important trends Insurance market in a state of flux: Dynamic non-life business, repositioning in life business, ongoing market consolidation and new competitors Digitisation as a strong driver: Online and mobile business, smart data, Internet of Things and automation Customer behaviour is changing: g Informed, hybrid, interconnected, mobile with more individual demands Strategy helvetia 20.20 14 March 2016 6
We exploit the changes in the insurance market General economic stability, new opportunities created by digitisation Healthy growth in non-life business Helvetia focuses on organic growth among retail customers and SMEs, supplemented by acquisitions. Helvetia exploits the opportunities offered by digitisation to stimulate business. Low interest rates and stricter regulation Repositioning in life business Helvetia will continue to develop its careful asset liability management. Helvetia is pushing capital efficient life products and modern guarantee concepts. Ongoing consolidation, technological change and new competitors Active role in market Helvetia is well-capitalised, continuing its active M&A approach, strengthening its innovation management and launching corporate venturing. Helvetia is systematically renewing its current business models. Helvetia has the answers for a successful future. Strategy helvetia 20.20 14 March 2016 7
We build on the opportunities offered by digitisation... Online business models Modern customer and partner interaction Easy and convenient access to all services on different channels More open partner structures with inclusion of partners in systems of service design and provision Smart data & analytics Increasing personalisation Services and products tailored to the needs of customers and sales partners as well as pricing, portfolio and exposure management Automation Stronger process automation Highly efficient and fast service provision Helvetia is implementing a comprehensive digitisation strategy. Strategy helvetia 20.20 14 March 2016 8
in order to continue providing our customers with first-class advice and insurance Versatile interaction Expansion of interaction opportunities for customers (online, physical, mobile) Independent of place and time Simple and convenient Modern products Personalised and riskappropriate products (UBI: user-based insurance) Adjustment and expansion of product range Strong brand promise Customer experience as ʺYour Swiss insurerʺ at all touchpoints Delivering on our brand promise as reliable partner for customised solutions Comprehensive services Self-service functionalities Expansion along the customer journey (e.g. information on prevention, claims settlement) We are specifically aligning our strategy to the needs of our current and potential customers. Strategy helvetia 20.20 14 March 2016 9
Implementation to be guided by ʺintegrate, g, innovate, increaseʺ Successfully finalise integration of Nationale Suisse and Baloise Austria Intensify operational collaboration within the Helvetia Group Progressive digital transformation Targeted innovation of business models with new partnerships and corporate venturing Customer benefits: Convenience through multi-access, digital services and personalisation Product value: Use of smart data in non-life business as well as modern product and guarantee concepts in life business Process efficiency: Synergy benefits and further automation of operational structures Strategy helvetia 20.20 14 March 2016 10
Employees and culture provide strong foundation Continued development of corporate culture Helvetia believes in values of trust, dynamism and enthusiasm. It is continuing to develop its culture on that basis by selectively strengthening its customer focus, flexibility and innovative power. Development of new knowledge and new skills Managers are equipped with adapted management tools to promote the acquisition of knowledge and skills as well as openness. Managers are empowered to push ahead with customer centricity, agility and innovation. Participation of employees Employees are involved in and contribute to implementation of strategy. Employees' new ideas and proposals for improvement are recorded and implemented more systematically. y helvetia 20.20 offers employees added value: they can play an active role while advancing personally and professionally. Strategy helvetia 20.20 14 March 2016 11
Ambitious financial targets as benchmark Growth Profitability Financial targets for 2020 Volume: CHF 10 billion Non-life: CR <93% Life: NBM >1% Comments Dependent on currency fluctuations (impacting growth of European units) Through organic growth and further acquisitions Net combined ratio New business margin Costs Capital Synergies from acquisitions: >CHF 130 million SST ratio: 140-180% 180% S&P rating class: A All synergies from acquisitions of Baloise AT and Nationale Suisse to be realised by end of 2017 Dependent on model adjustments (particularly life) Return on equity 8 11% Dependent on capital market environment, based on underlying earnings (until 2018) Dividend Pay-out ratio 40 50% Pay-out (5y) >CHF 1 billion Cumulative amount over next 5 years Strategy helvetia 20.20 14 March 2016 12
Conclusion: Added value through systematic renewal Added value for customers by combining our traditional strengths with new opportunities created by technology Powerful expansion of new online concepts in all country markets, Digitisation with focus on smart data and process automation Consistent development in non-life, adaptation of life insurance to low interest rate environment Increase in profits and dividends through technical discipline, cost synergies and healthy growth Strengthen Helvetia brand and improve attractiveness as preferred employer for best Swiss and foreign talents Helvetia gets fit for the future, while remaining personal and reliable! Strategy helvetia 20.20 14 March 2016 13
Strategy for market areas Switzerland, Europe, Specialty Markets BACKUP Strategy helvetia 20.20 14 March 2016 14
Switzerland: Top 3 with excellent starting position Excellent starting position: What is on our agenda: Leading Swiss all-lines insurer with strong brand Balanced portfolio mix with persistently robust technical results Broadly based sales reach with unique cooperation partners Innovative individual life products with short time to market Swisscanto Collective Foundation serves as second foothold in group life business in addition to traditional full insurance solution Focus on consistent customer orientation Growth above market as SME insurer in non-life segment Expansion of digital and mobile customer interaction Improving end-to-end process efficiency through standardisation and automation Mastering the challenges posed to the life business by the low interest rate environment The market area Switzerland is the solid foundation of the Helvetia Group. Strategy helvetia 20.20 14 March 2016 15
Switzerland: Forward strategy in all business areas Target positioning in Switzerland Non-life: (illustration) Cross- and upselling to existing customers Promoting non-life SME business Non-life Accessing alternative customer channels Objective: Profitable growth across all business areas tion Profit contribut Individual life Group life Premium growth Size of circles= premium volumes Organic growth rates (2010-2015) and profit contributions Expected organic growth Individual life: Developing new security concepts Accessing alternative customer channels Objective: Repositioning with modern and capitalefficient products Group life: Promoting Swisscanto model Developing innovative pension concepts for companies Objective: Focus on capital-efficient business models and securing of market position o ʺBest Swiss insurerʺ thanks to innovative and customised insurance and pension solutions. Strategy helvetia 20.20 14 March 2016 16
Strategy implementation in market area Switzerland Consistently implement and successfully finalise integration of Nationale Suisse Strengthen selfimage as new number three in Swiss market Steer development towards more customer focus, agility and innovation Use digitisation as opportunity (infrastructure, technology, data) Support Helvetia's transformation with innovation Intelligent networking of internal and external data and intensive use of smart data & analytics Customer benefits: Convenience for customers and sales partners with online and offline touchpoints Digital, mobile and personalised service provision along customer journey Product value: Modern, needs-focused life and non-life solutions Process efficiency: Radically simple end-to-end processes High degree of automation and shadow processing Strategy helvetia 20.20 14 March 2016 17
Consistent European business strengthens portfolio Europe market area has consistent positioning: Focus on retail and SME customers with integrated multi-channel approach Complete range of non-life products and capitalefficient life business Consistent brand image Synergies within Europe (pricing, reinsurance) European business already makes sensible contribution to portfolio: European business is profitable: All countries report profits and returns are higher than on the capital market. European business reduces dependence: European business substantially reduces dependence on developments in Swiss market. European business harbours potential: Margin in Europe can be improved: There are further synergies from past acquisitions and higher degree of integration. Europe has growth potential: The countries in this market area have attractive opportunities for organic growth and substantial potential for M&A. Strategy helvetia 20.20 14 March 2016 18
Europe: Starting position and focal topics Good starting position: Positive profit contributions by all units Balanced portfolio in individual and commercial focal areas Diverse and established access to market (multi-channel) Uniform presence and very good brand image Strong digitisation solutions with potential have already been implemented in various markets What is on our agenda: Customer focus and convenience across the entire service provision Using smart data & analytics for customised personalisation as well as adequate pricing and risk management Improving brand recognition in relevant areas of competition Making further progress in efficiency by slimlining processes and automation Vl Value-focused development of life portfolio (new and backbook) Active M&A-strategy European markets are well equipped to exploit the opportunities arising from changed customer behaviour and digitisation. Strategy helvetia 20.20 14 March 2016 19
Europe: Target positioning and strategy focus Profit contribut tion Target positioning in Europe (illustration) Germany Italy Spain Austria Premium growth Size of circles= premium volumes Organic growth rates (2010-2015) and profit contributions Expected organic growth Germany: New products via digital channels More automation and process optimisation Objective: Improved earning power and innovation Italy: Streamlining operations Stronger online interaction with customers and partners Objective: Highly efficient with real omni-channelling Spain: Establishment of digital sales channel Individualised non-life on standard platform Objective: Expansion of market position with high profitability Austria: New online offer for customers and partners Expansion of business with institutional partners Objective: Profitable growth, substantially above the market Significantly improved positioning in Europe with increase in volume and rise in profit contribution. Strategy helvetia 20.20 14 March 2016 20
Strategy implementation in market area Europe Fast restoration of Nationale Suisse portfolios Consistent implementation and realisation of synergies from past acquisitions Exploit market potential with expanded product range and improved sales reach Smart business processes for customers and sales partners Smart data & analytics anchored in processes and products Full exploitation of CRM/PRM potential New online business models Customer benefits: Convenience: Simple, fast access to information, products and services in omni-channel model Personalisation: needs-focused, customised services at the right time Product value: Non-life pricing and portfolio excellence Establishment of capital-efficient life products Process efficiency: Significant slimlining of business processes Strong automation Strategy helvetia 20.20 14 March 2016 21
Specialty Markets: Starting position and focal topics Excellent starting position: Top positioned as specialty lines insurer in Switzerland and as transport insurer in France Proven global risk diversification in active reinsurance Established access to local markets in growth markets of Asia and Latin America Pronounced expertise and experience in riskadjusted underwriting of complex risks Specialty lines and active reinsurance boast synergies and mutual added value What still concerns us: Persistently difficult market conditions due to excess capacity and economic cycles (soft markets) Regulatory requirements as thresholds for market access Relatively high acquisition and administration costs Optimised investment strategy in a very dynamic market environment Potential for growing profit contribution and diversification for Group. Strategy helvetia 20.20 14 March 2016 22
Specialty Markets: Niche strategy Target positioning in Specialty Markets Specialty SpecatyLines esswitzerland d& International: ato a (illustration) SpL CH & Int. Active Reinsurance Expand market leadership in Switzerland Profit-focused development of international business Objective: Selective forward strategy tion Profit contribut France Premium growth Size of circles= premium volumes Organic growth rates (2010-2015) and profit contributions Expected organic growth France: Comprehensive online services for customers and partners Development of new niche products and product bundles Objective: Consolidation of strong market position Active reinsurance: Expansion of offer and development of additional services Further progress in portfolio diversification Objective: Strengthening g of reinsurance business Further growth as selective niche player. Strategy helvetia 20.20 14 March 2016 23
Strategy implementation in market area SpM Successful finalisation of Nationale Suisse integration Consolidation of IT systems Adoption of best practices available within the Group Full realisation of synergy potential Optimisation and digitisation of business processes Strengthening of analytical skills in order to refine risk selection Differentiated support for customers and sales partners Development of additional specialty lines / solutions Customer benefits: Improved quality of advice Differentiated services Highly specialised underwriting and claims management Product value: Broad range of standardised products and customised solutions Niche player focused on innovation Process efficiency: Further automation of business processes Improvement of online offer and B-2-B/C B/C services Strategy helvetia 20.20 14 March 2016 24