Helvetia Switzerland achieved another solid result in occupational pensions last year with premiums totalling CHF 2,546 million. Demand for full insurance solutions remained strong, causing regular premiums (which are vital to the company's long-term performance) to grow by CHF 17.3 million or 1.7 percent. Against a backdrop of low interest rates, Helvetia recorded relatively little new business. Single premiums thus fell by CHF 121.2 million or 8.3 percent. This led to a year-on-year decrease in business volume of CHF 103.9 million or 3.9 percent.

The number of group life contracts remained almost unchanged at 17,826 (2014: 17,802), while the number of policyholders rose by 1.5 percent to 219,155.

Difficult operating conditions call for reforms

The trend in single premiums in particular shows how difficult the operating conditions in occupational pensions are. Besides persistently low interest rates in general, the introduction of negative interest rates, volatile stock markets and a shortage of investment opportunities, the annuity conversion rate of 6.8 percent also poses a challenge as it is far too high. This leads to massive subsidising of pensioners by active pension scheme members. With this in mind, Philipp Gmür, CEO of Helvetia Switzerland, has the following warning: 'We need to operate in an environment that allows the occupational pensions business to continue under the funded system. The Pensions 2020 reform package is urgently needed.'

Helvetia believes that lowering the conversion rate, together with equalisation measures and a standardised retirement age of 65 for both men and women, is central to Pensions 2020. However, the package also includes reforms that Helvetia opposes. The imbalances that still persist can only be remedied if life insurers remain free to determine their own savings, risk and cost processes. 'Separate savings, risk and cost surpluses would not contribute to achieving the goal of the reforms, but they would endanger life insurers' guarantee solutions and thus the freedom of choice and the pension security of small and medium-sized companies and their staff,' explains Donald Desax, Head of Group Life Insurance at Helvetia Switzerland.

Solid investment results

In 2015, Helvetia's occupational pensions business posted investment income of CHF 402.6 million, corresponding to a book-value return of 2.45 percent (2014: 2.86 percent). This year-on-year decline was due to the exceptionally low interest rates at which new investments and reinvestments had to be made.

Investment performance at market values was 1.88 percent. The record highs of 2014 could not be matched due to the weaker stock and bond markets. Helvetia nevertheless comfortably outperformed the relevant BVG benchmarks.

Distribution ratio of 90.5 percent

In business subject to the minimum ratio (primarily full insurance solutions), Helvetia distributed 90.5 percent of its gross income of CHF 645 million to policyholders last year. Just over 90 percent of the amount distributed was paid out to policyholders in the form of pension benefits, including old age and disability pensions, and through payments into the surplus fund. Just under 10 percent was used to bolster reserves. In business that is not subject to the minimum ratio, the distribution ratio was 93.2 percent on gross income of CHF 138 million.

Costs reduced

Compared with 2014, Helvetia reduced its operating expenses last year by an impressive CHF 5.1 million or 5.5 percent to CHF 87.2 million, equating to 3.4 percent of premium income. The average cost per active pension scheme member fell from CHF 461 in 2014 to CHF 426 in 2015. The average cost premium per policyholder fell to CHF 476.

For further information please contact:

Helvetia Schweiz

Jonas Grossniklaus

Media Relations

St. Alban-Anlage 26

CH-4002 Basel

Phone: +41 58 280 50 33

media.relations@helvetia.ch

www.helvetia.ch

About the Helvetia Group

In over 150 years, the Helvetia Group has grown from a number of Swiss and foreign insurance companies into a successful international insurance group. Today, Helvetia has subsidiaries in its home market Switzerland as well as in the countries that make up the Europe market area: Germany, Italy, Austria and Spain. With its Specialty Markets market area, Helvetia is also present in France and in selected regions worldwide. Some of its investment and financing activities are managed through subsidiaries and fund companies in Luxembourg and Jersey. The Group is headquartered in St.Gallen, Switzerland.

Helvetia is active in the life and non-life business, and also offers customised specialty lines and reinsurance cover. Its business activities focus on retail customers as well as small and medium-sized companies and larger corporates. With some 6,700 employees, the company provides services to more than 4.7 million customers. With a business volume of CHF 8.24 billion, Helvetia generated underlying earnings of CHF 439 million in the 2015 financial year. The registered shares of Helvetia Holding are traded on the SIX Swiss Exchange under the symbol HELN.

Cautionary note

This document was prepared by Helvetia Group and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Group. Although all reasonable effort has been made to ensure that the facts stated herein are correct and the opinions contained herein are fair and reasonable, where any information and statistics are quoted from any external source such information or statistics should not be interpreted as having been adopted or endorsed as accurate by Helvetia Group. Neither Helvetia Group nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained in this document are as up to date as is reasonably possible but may be subject to revision in the future. Neither Helvetia Group nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document.

This document may contain projections or other forward-looking statements related to Helvetia Group which by their very nature involve inherent risks and uncertainties, both general and specific, and there is a risk that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include: (1) changes in general economic conditions, in particular in the markets in which we operate; (2) the performance of financial markets; (3) changes in interest rates; (4) changes in currency exchange rates; (5) changes in laws and regulations, including accounting policies or practices; (6) risks associated with implementing our business strategies; (7) the frequency, magnitude and general development of insured events; (8) mortality and morbidity rates; (9) policy renewal and lapse rates as well as (10), the realisation of economies of scale as well as synergies. We caution you that the foregoing list of important factors is not exhaustive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties. All forward-looking statements are based on information available to Helvetia Group on the date of its publication and Helvetia Group assumes no obligation to update such statements unless otherwise required by applicable law.

Helvetia Holding AG published this content on 20 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 May 2016 05:12:01 UTC.

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