Notes to the consolidated financial statements of the Helsana Group

General

The consolidated financial statements 2024 are presented in accordance with the Swiss GAAP accounting and reporting recommendations (Swiss GAAP FER) and provide a true and fair view of the Group’s assets, finances and earnings. Swiss GAAP FER represents a complete body of rules. All recommendations must be applied.

Swiss GAAP FER 41 entered into force for the individual financial statements of KVG health insurers on 1 January 2012. The Helsana Group has been using FER 30 (consolidation) and FER 41 since the 2015 financial year. The application of Swiss GAAP FER is voluntary.

Consolidated companies

The consolidated financial statements include all companies that are directly or indirectly controlled by Helsana. This is usually the case if Helsana directly or indirectly holds more than 50 per cent of the voting rights in a company. Companies acquired during the finan­cial year are included from the date on which con­trol over the business activities was transferred to Helsana, and all companies disposed of during the year are excluded from the Group statements from the date of sale.

Change in consolidated companies

There were no changes in consolidated companies in 2024.

Rounding differences

All amounts in the annual financial statements are rounded to thousand Swiss francs. This means that the sum of several rounded amounts added together can differ from the rounded total that is reported.

2.1 Consolidation method

Full consolidation

Companies are included in the Group statements based on the full consolidation method. Capital consolidation is carried out using the Anglo-Saxon method (purchase method). Assets and borrowed capital of companies acquired are revalued at the time of control changes in accordance with the Helsana Group’s principles; unrea­lised gains and losses are carried under the relevant balance sheet items and the remaining difference between the purchase price and equity, i.e. goodwill, cal­culated according to the accounting policies of the Group, is fully amortised over five years or in the year of consolidation. Any third-party participations in fully consolidated companies are shown separately as non-controlling interests in equity and income.

Equity method

Companies in which Helsana holds between a 20 and 50 percent stake are stated in the balance sheet at the value corresponding to the pro rata equity capital in line with the equity method, based on the financial statement currently available. For insurance companies, the hidden reserves are taken into account in accordance with their report on the financial situation.

Consolidation reporting date

The reporting date for all companies included is 31 December.

Events after the reporting date

Procare Providence Ltd was sold with the shareholder purchase agreement dated 18 December 2024, with closing on 28 February 2025.

Intragroup transactions

All intragroup transactions, relationships and earnings are eliminated as part of the consolidation process.

2.2 Valuation principles

Valuation is carried out in line with standardised criteria. In general, the principle of the individual valuation of assets and liabilities applies.

Foreign currencies

Foreign currency positions are converted at current exchange rates at year-end.

The following exchange rates were used:

Investments

Real estate

Real estate includes both investment properties and owner-occupied properties, and is recognised in the balance sheet at current market value. Market values are estimated at least once every three years by an inde­pendent consulting firm. The values are determined using the discounted cash flow method or another recognised method during the inter­vening years.

Bonds

Include in these are fixed-income securities or investments in similar securities without a fixed maturity or without a defined redemption price. The investments held are marketable and valued at market price. The periodic change in the balance sheet value is recognized in the income statement.

Equities

Equities include equity securities such as stocks and similar securities. Such assets are marketable and are valued at market price. Periodic changes in the carrying amount are recognised in the income statement.

Other investments

Alternative investments and collective investments (real estate funds, bond funds, equity funds, etc.) are listed as a separate item. The valuation is carried out based on current values. Periodic changes in the carrying amount are recognised in the income statement.

Currency futures

Derivatives include foreign exchange and option contracts, certificates on equity indices and futures. Foreign exchange contracts and options are used to hedge against exchange rate and market price fluctuations. Derivatives are valued at market value based on current prices. Currency futures are used to hedge against exchange rate and market price fluctuations and are valued at market value.

Investments in other companies

These include investments in companies that are held for strategic purposes. These investments are measured using the last known pro rata equity (equity method). Investments in insurance companies are valued on the basis of the last known pro rata equity plus hidden reserves on investments in accordance with their report on the financial situation.

Deferred income tax assets

Deferred income tax is based on the balance sheet approach and is calculated at the applicable tax rate.

Intangible assets

With intangible assets, a distinction is drawn between purchased software and projects. The latter are amortised on a straight-line basis over the course of their useful life. Amounts of more than CHF 500,000 can be capitalised for purchased software. Otherwise, the costs are charged directly to the income statement.

Projects are depreciated from the time of roll-out and valued at no more than acquisition or production cost. This cost must be measurable and allocable to the project. Only projects of a strategic nature or with an investment volume of more than CHF 3 million can be capitalised.

Useful life per asset class:

• 5 years for projects (in justified cases, over 10 years)
• 3 years for software

The value is reviewed annually and the item is written down accordingly.

Property, plant and equipment

Capitalised property, plant and equipment are depreciated on a straight-line basis over the course of their useful life. For fixtures and fittings, acquisitions and collective acquisitions for amounts of more than CHF 500,000 can be capitalised. Amounts below this limit are expensed.

Useful life for each asset category:

• Five years for fixtures and fittings
• Three years for IT hardware
• Three years for vehicles

The value is reviewed annually and the item is written down accordingly.

Deferred charges

This item includes expenses during the reporting year that are deducted as an expense in the following financial year, and income that only leads to revenue in the following financial year. The corresponding prepaid expenses and accrued income/receivables resulting from contractual, regulatory or legal provisions are recognised in the balance sheet.

Receivables

Receivables due from third parties, such as policyholders, insurance organisations, agents and brokers, cantons and other parties, are measured at nominal value. The security is determined on the basis of the maturity structure and recognisable credit risks. In addition to individual write-downs for specific known receivable risks, impairments are formed using statistical information about the risk of default. The calculation of the necessary value adjustments also includes the type of receivable (private customer, corporate customer, co-payment) in addition to the maturity structure. The assumptions are based on historical figures from pre­vious years. Assuming the losses on accounts remain constant as in previous years, an allowance for doubt­ful receivables is made for the unpaid receivables of up to 180 days with a rate of 0.25 per cent. For older receiv­­ables, the effects of Art. 64a KVG (depending on the canton) are included in the calculation of the allowance for doubtful receivables of the KVG companies. The totals of the receivables are included in the ratio of the debt collection proceedings initiated to the resulting certificates of debt.

The receivables due from affiliates are measured at nominal value, taking account of operationally necessary impairments.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, postal and bank balances and other cash equivalents. They are valued at nominal value. Any impairments are recognized accordingly.

Equity

The share capital is recognised at the nominal amount. The share capital is divided into 70,000 ordinary registered shares with a par value of CHF 1,000.

Capital reserves are payments in excess of the nominal amount (surplus).

Retained earnings refers to accumulated equity capital in the form of earnings that are kept and not distributed from previous years.

Net technical provisions

The item for net technical provisions includes provisions for claims and benefits, actuarial reserves, provisions for profit sharing as well as other technical provisions.

Provisions for claims and benefits are calculated according to actuarial methods recognised by the supervisory authorities (e.g. chain ladder). In doing so, the following parameters are taken into account for the year of occurrence and the year of processing:

• First year of treatment versus payment year for care benefits
• First year of event versus payment year for daily benefits

The reserves for annuities are calculated according to the accounting principles pursuant to Art. 108 UVV. The calculation is based on the annuity without cost of living bonuses. For ceded co-insurance, we assume our portion of the individual actuarial reserve as reported by the company that carries it.

For group sickness benefits, provisions for profit sharing are formed for contracts that include agreements on profit sharing. They are calculated as the expected value of the profit share paid out after the reporting date for contracts for profit sharing that are in effect through the reporting date. The estimate of provisions for profit sharing takes account of the active portfolio and the empirical claims experience as at the reporting date.

The other technical provisions include other actuarial provisions, which are valued in accordance with the valid and approved business plan. The old age provisions are formed in order to finance the future rising costs of ageing policyholders.

Technical equalisation reserves and provisions for guarantees

The equalisation reserves and provisions for guarantees are formed for volatilities in the technical provisions. Equalisation reserves are used to cover unforeseeable high benefit costs or to compensate for unexpected shortfalls in the provisions for claims and benefits as well as the old age provisions. A target value and a maximum amount are calculated for each product annually. Both values correspond with the expected shortfall of the underlying risks.

Non-technical provisions

If an outflow of funds is probable, a corresponding provision is raised for legal and actual obligations on an event in the past. The amount is determined by analysing the relevant past result and the economic risk. If time has a significant impact, the provision requirement must be discounted. The provisions are revalued annually.

Provision for investment risk

The provisions for investment risk map the long-term volatilities of the capital market. The provisions are based on the total portfolio and are reviewed annually. The target provisions and the range for investment risk are calculated according to an analytical model (normal distribution) on the basis of sensitivities in the investments.

• the lower range with a security level of 99.0 per cent
• the target provision with the security level defined internally by Helsana of 99.5 per cent (KVG companies) and 99.75 per cent (other companies) in line with the risk appetite approved by the Board of Directors
• the upper range with a security level of 99.9 per cent

If the investments during the reporting period experience above-average losses in value, the provisions for investment risk can also be liquidated in the income statement, either in full or in part. If the values of the investments increase by more than the aver­age during the reporting period, the provisions for investment risk can also be increased in full or in part to the target value in the income statement.

Deferred credits

This item includes deferred income during the reporting year that is credited as income in the following financial year, and expenses that are only paid in the following financial year. The corresponding accrued expenses and deferred income/liabilities resulting from contractual, regulatory or legal provisions are recognised in the balance sheet.

Liabilities

This item mainly includes obligations to policyholders or service providers as well as premiums billed in advance. Loans due are also recognised in this item. The liabilities are recognised in the balance sheet at their nominal amount.

Collateral for own liabilities, reservation of ownership (excluding tied assets)

On 31 December 2024, there was no collateral for own liabilities.

Contingent receivables/liabilities

Within the scope of Group VAT taxation, the Helsana Group is jointly and severally liable to the Swiss Federal Tax Administration. Stiftung Fondation Sana is also included in the VAT group together with the fully consolidated companies.

In the case of the alternative investments, there is an obligation to make additional contributions in the amount of TCHF 12,286 (2023: TCHF 16,317).

Significant related companies