Swiss Life/Rentenanstalt recorded consolidated profit of CHF 124 million for the year 2001 (CHF 924 million in the previous year). Gross premiums increased by 3.4% to more than CHF 19.9 billion (CHF 19.3 billion in the previous year). The financial result totalled CHF 6.5 billion. The technical reserves remained unchanged at a high level. Operating expenses rose by around 4.5%. A cost savings programme will lead to savings of CHF 300 million per year by the end of 2003. This is in connection with a reduction of 800 jobs throughout the entire Group. The Group currently employs about 12'800 individuals. As announced, the Board of Directors will propose a dividend renunciation to the general meeting of shareholders.
Consolidated profit of CHF 124 million can be described as satisfactory in view of the negative stock exchange year. This is even more so the case as, under IAS, an increase of the allowance for impairment losses of CHF 760 million was made. Profit equals that announced by the Board of Directors and Corporate Executive Board at the end of February 2002.
The financial investment result was marked by a negative stock market performance in 2001. At CHF 6.5 billion, it was almost CHF 4 billion below that of the previous year. However, the year 2000 was affected by extraordinary gains. Comparing the result of 2001 with that of 1999, the decline was only around CHF 0.5 billion.
Premium income again increased by 3.4% (5.3% when adjusted for exchange rates) to more than CHF 19.9 billion in the year under review. This figure also contains policyholder investment contracts (fund and investment products). The share of foreign business equalled 52% as in the previous year.
Assets under management declined slightly from CHF 205.9 billion to CHF 203.3 billion. An inflow of new funds almost compensated the substantial loss of value on the equity market. The inflow of new funds is an expression of confidence on the part of Swiss Life/Rentenanstalt's clients.
Roland Chlapowski, Swiss Life/Rentenanstalt's new CEO since March 1, 2002 and Manfred Zobl's successor, commented the 2001 annual result as follows: "We have attained a satisfactory result in spite of the negative performance on the financial markets. Swiss Life/Rentenanstalt is a sound company which earns profits and has solid technical reserves. Our solvency, in other words the equity means on hand in relation to the amount of insurance liabilities, amounts to more than 200%. We aim at continuing to increase profitability and strengthen our equity capital base with the help of our strategic reorientation and the planned cost savings measures."
Positive sector results
In the life insurance sector, premium income rose to CHF 17.7 billion, equalling an increase of 3.7% (5.4% when adjusted for exchange rates). Gross premiums rose by almost 8%, whereas policyholder investment contracts declined by about 7%. Insurance benefits paid remained close to previous year's level (-1%).
In the non-life sector, premium income increased by 4.2% when adjusted for exchange rates, which was primarily generated by France (84%) and Switzerland (12%). Insurance benefits paid were 1% below the previous year's figure. The claims ratio rose slightly from 76% to 76.7%. The cost factor fell as in the previous year. However, the decrease in the year under review was substantial from 34.8% to 31.7%.
At CHF 102 million, the sector result in private banking was below that of the previous year of CHF 242 million. The main reason for this development was the negative stock market environment and higher expenses in connection with the company's
on-shore expansion strategy in the private banking sector. At CHF 42.6 billion, assets under management remained almost stable on previous year's level.
At CHF 147 million, the investment management sector, encompassing the specialised asset management units, recorded a significantly higher sector result (CHF 97 million in the previous year). Overall, assets under management totalled CHF 115.3 billion. CHF 15.6 billion of this amount is attributable to assets managed for third parties. A total of CHF 4.5 billion in new funds was acquired.
Strategic and operative reassessment
Rapid changes in the economic environment affected in particular the financial services providers and resulted in the Board of Directors initiating a strategic and operative re-examination at the end of January 2002. The aim is to improve profitability of all business units and to optimise the balance sheet and increase equity capital.
The focus of this strategic reassessment is on which business areas, with which core activities and in which main markets the Group plans to operate in the future. Activities are well underway and decisions are in the process of being prepared. Swiss Life/Rentenanstalt is certain of being able to implement such decisions on time and thus achieve positive effects on the earnings situtation.
As early as at the end of January 2002, immediate measures were implemented in the operative field. Such measures included a cost savings programme which will lead to savings in the amount of CHF 300 million per year by the end of 2003. This also signifies a reduction of 800 jobs throughout the Group. Furthermore, new models are being drawn up in the area of occupational employee benefits (BVG), which aim at improving the profitability of these business operations.
Outlook
The measures implemented show that Swiss Life/Rentenanstalt is able to adjust to the new given facts and react flexibly to the changing environment. Profitability will increase particularly as a result of the cost savings programme and the reorganisation of BVG business operations as well as through the strategic reorientation of the company in the long-term. For this reason, Swiss Life/Rentenanstalt strongly believes that it will attain sustainable and continued growth of profits in 2002, just as in the previous years.
Corporate governance
In order to provide shareholders with increased transparency, the remuneration of the members of the Board of Directors and the Corporate Executive Board will be published in the 2001 Annual Report for the first time:
The fixed remuneration for the Board of Directors (12 members) for the financial year totalled CHF 960'000. Moreover, members of the Board of Directors were allocated a total of 765 shares and share options. The options currently have no intrinsic value.
The compensation of the Corporate Executive Board is composed of a fixed and a performance-related cash amount, of Swiss Life/Rentenanstalt shares as well as options on Swiss Life/Rentenanstalt shares. A total of CHF 5.8 million was paid to the 7 members of the Corporate Executive Board for the 2001 financial year in the form of fixed compensation and bonus payments. Furthermore, the members of the Corporate Executive Board were allocated a total of 1'150 shares and share options. The options currently have no intrinsic value.
Board changes
Albert Eggli and Pierre de Chastonay will retire from the Board of Directors at the general meeting on May 24, 2002 for age reasons. Furthermore, Christine Beerli has also tendered her resignation as per the above-mentioned date.
In accordance with corporate governance, the Board of Directors further decided to separate the function of Chief Investment Officer from that of Chief Financial Officer. Dominique P. Morax, who currently exercises both functions, will focus on the function of Chief Investment Officer in the future. A new individual will be appointed as Chief Financial Officer. Until then, Dominique P. Morax will continue to function as CFO.
The activities of the European and International Divisions will be consolidated under
the management of Hans Rudolf Strickler. Upon his own request, Karl Mühlebach, Head of the current International Division, will retire early.
For more Information visit www.swisslife.com.
Consolidated profit of CHF 124 million can be described as satisfactory in view of the negative stock exchange year. This is even more so the case as, under IAS, an increase of the allowance for impairment losses of CHF 760 million was made. Profit equals that announced by the Board of Directors and Corporate Executive Board at the end of February 2002.
The financial investment result was marked by a negative stock market performance in 2001. At CHF 6.5 billion, it was almost CHF 4 billion below that of the previous year. However, the year 2000 was affected by extraordinary gains. Comparing the result of 2001 with that of 1999, the decline was only around CHF 0.5 billion.
Premium income again increased by 3.4% (5.3% when adjusted for exchange rates) to more than CHF 19.9 billion in the year under review. This figure also contains policyholder investment contracts (fund and investment products). The share of foreign business equalled 52% as in the previous year.
Assets under management declined slightly from CHF 205.9 billion to CHF 203.3 billion. An inflow of new funds almost compensated the substantial loss of value on the equity market. The inflow of new funds is an expression of confidence on the part of Swiss Life/Rentenanstalt's clients.
Roland Chlapowski, Swiss Life/Rentenanstalt's new CEO since March 1, 2002 and Manfred Zobl's successor, commented the 2001 annual result as follows: "We have attained a satisfactory result in spite of the negative performance on the financial markets. Swiss Life/Rentenanstalt is a sound company which earns profits and has solid technical reserves. Our solvency, in other words the equity means on hand in relation to the amount of insurance liabilities, amounts to more than 200%. We aim at continuing to increase profitability and strengthen our equity capital base with the help of our strategic reorientation and the planned cost savings measures."
Positive sector results
In the life insurance sector, premium income rose to CHF 17.7 billion, equalling an increase of 3.7% (5.4% when adjusted for exchange rates). Gross premiums rose by almost 8%, whereas policyholder investment contracts declined by about 7%. Insurance benefits paid remained close to previous year's level (-1%).
In the non-life sector, premium income increased by 4.2% when adjusted for exchange rates, which was primarily generated by France (84%) and Switzerland (12%). Insurance benefits paid were 1% below the previous year's figure. The claims ratio rose slightly from 76% to 76.7%. The cost factor fell as in the previous year. However, the decrease in the year under review was substantial from 34.8% to 31.7%.
At CHF 102 million, the sector result in private banking was below that of the previous year of CHF 242 million. The main reason for this development was the negative stock market environment and higher expenses in connection with the company's
on-shore expansion strategy in the private banking sector. At CHF 42.6 billion, assets under management remained almost stable on previous year's level.
At CHF 147 million, the investment management sector, encompassing the specialised asset management units, recorded a significantly higher sector result (CHF 97 million in the previous year). Overall, assets under management totalled CHF 115.3 billion. CHF 15.6 billion of this amount is attributable to assets managed for third parties. A total of CHF 4.5 billion in new funds was acquired.
Strategic and operative reassessment
Rapid changes in the economic environment affected in particular the financial services providers and resulted in the Board of Directors initiating a strategic and operative re-examination at the end of January 2002. The aim is to improve profitability of all business units and to optimise the balance sheet and increase equity capital.
The focus of this strategic reassessment is on which business areas, with which core activities and in which main markets the Group plans to operate in the future. Activities are well underway and decisions are in the process of being prepared. Swiss Life/Rentenanstalt is certain of being able to implement such decisions on time and thus achieve positive effects on the earnings situtation.
As early as at the end of January 2002, immediate measures were implemented in the operative field. Such measures included a cost savings programme which will lead to savings in the amount of CHF 300 million per year by the end of 2003. This also signifies a reduction of 800 jobs throughout the Group. Furthermore, new models are being drawn up in the area of occupational employee benefits (BVG), which aim at improving the profitability of these business operations.
Outlook
The measures implemented show that Swiss Life/Rentenanstalt is able to adjust to the new given facts and react flexibly to the changing environment. Profitability will increase particularly as a result of the cost savings programme and the reorganisation of BVG business operations as well as through the strategic reorientation of the company in the long-term. For this reason, Swiss Life/Rentenanstalt strongly believes that it will attain sustainable and continued growth of profits in 2002, just as in the previous years.
Corporate governance
In order to provide shareholders with increased transparency, the remuneration of the members of the Board of Directors and the Corporate Executive Board will be published in the 2001 Annual Report for the first time:
The fixed remuneration for the Board of Directors (12 members) for the financial year totalled CHF 960'000. Moreover, members of the Board of Directors were allocated a total of 765 shares and share options. The options currently have no intrinsic value.
The compensation of the Corporate Executive Board is composed of a fixed and a performance-related cash amount, of Swiss Life/Rentenanstalt shares as well as options on Swiss Life/Rentenanstalt shares. A total of CHF 5.8 million was paid to the 7 members of the Corporate Executive Board for the 2001 financial year in the form of fixed compensation and bonus payments. Furthermore, the members of the Corporate Executive Board were allocated a total of 1'150 shares and share options. The options currently have no intrinsic value.
Board changes
Albert Eggli and Pierre de Chastonay will retire from the Board of Directors at the general meeting on May 24, 2002 for age reasons. Furthermore, Christine Beerli has also tendered her resignation as per the above-mentioned date.
In accordance with corporate governance, the Board of Directors further decided to separate the function of Chief Investment Officer from that of Chief Financial Officer. Dominique P. Morax, who currently exercises both functions, will focus on the function of Chief Investment Officer in the future. A new individual will be appointed as Chief Financial Officer. Until then, Dominique P. Morax will continue to function as CFO.
The activities of the European and International Divisions will be consolidated under
the management of Hans Rudolf Strickler. Upon his own request, Karl Mühlebach, Head of the current International Division, will retire early.
For more Information visit www.swisslife.com.