Bruno Pfister, Group CEO, comments: “Although 2009 was a challenging year for Swiss Life in what remains a volatile and demanding market environment, our company made significant progress at operational level, generated growth and advanced well in key areas. We have thus laid the foundations for profitable growth in the years ahead.”
Significantly improved annual operational result
In 2009 the Group achieved a net result from continuing operations of CHF 324 million, up CHF 1.5 billion on the previous year. The net profit came to CHF 277 million (2008: CHF 345 million), corresponding to diluted earnings per share of CHF 8.83 and a return on equity of 4.0%. Positive developments on the financial markets and the strong performance of the Investment Management segment contributed greatly to the overall result: For the 2009 financial year Swiss Life generated a net investment result of CHF 4.3 billion on the insurance portfolio, corresponding to an investment performance of 7.5% (2008: -0.7%) and a net investment return of 3.9% (2008: 0.3%).
12% growth – surge in momentum in second half
Swiss Life grew its premium income by 9% to CHF 20.2 billion in the year under review. Adjusted for currency effects, this represents 12% growth. The strong course of business in the second half of 2009 contributed greatly to this performance. In particular, the Group recorded growth in Germany and in its international business with high net worth individuals. In Germany, premium income rose by 15% (currency adjusted) to CHF 2.2 billion, and, in the Insurance Other segment, Swiss Life doubled its premium volume to CHF 5.3 billion. In France, premium income in local currency fell by 3% to CHF 5.3 billion, although there was a surge in premium growth in the fourth quarter in particular. In Switzerland, premiums decreased by 8% to CHF 7.5 billion. AWD experienced a 16% decline in sales on the back of lower sales revenues in Austria, central and eastern Europe and the United Kingdom. Extensive restructuring activities were carried out in these markets.
Results by segment
In Switzerland, Swiss Life achieved a segment result of CHF 467 million – an increase of CHF 1.2 billion on the prior-year figure. Great advances were made in terms of boosting efficiency: Swiss Life cut its operating expenses (adjusted) by 14% in the 2009 financial year. Swiss Life in France posted a segment result of CHF 159 million (2008: CHF 40 million). In Germany, the segment result increased to CHF 92 million (2008: CHF 29 million). Swiss Life posted a CHF 43 million loss for the Insurance Other segment due to the expansion of its global business and investments made in the Luxembourg-based product platform. AWD experienced initial success with its restructuring activities and returned to operational profitability in the third and fourth quarters, achieving a 2009 operating profit of EUR 12.6 million, excluding one-off impacts. This was due, in particular, to the sustainable cost-cutting measures realised in the year under review. Taking into account EUR 53.7 million in one-time and restructuring expenses for 2009, AWD turned in a loss of CHF 92 million to Swiss Life’s annual result.
Solid capital base
Swiss Life has emerged from the financial crisis in good shape with a solid capital base. Shareholders’ equity stood at CHF 7.2 billion on 31 December 2009, up 9% on the previous year’s level of CHF 6.6 billion. The Group’s solvency ratio climbed to 164% (2008: 158%) and assets under management totalled CHF 148 billion (up 10%). The Board of Directors proposes that the Annual General Meeting of Shareholders approve a distribution of profit of CHF 2.40 per share (previous year: CHF 5).
MILESTONE shows initial success
Swiss Life set the course for profitable growth in 2009 with the strict execution of MILESTONE – its Group-wide revitalisation programme. This has already led to a considerably improved costs situation within the Group – operating expenses (adjusted) fell by around 10%. About 85% of the total restructuring costs were booked in the 2008 and 2009 financial years. Swiss Life has made good progress in gearing its new business towards modern life and pensions products and also towards risk products. Their share of new business grew to 64% (2008: 54%). In Switzerland and Germany, Swiss Life noticeably advanced its distribution power through AWD. In Germany, new business produced through AWD doubled to around EUR 380 million and in Switzerland increased from CHF 11 million to CHF 112 million.
Swiss Life grew its value of new business by CHF 4 million to CHF 123 million. “Our steps to launch modern Swiss Life products are beginning to pay off,” comments Thomas Buess, Group CFO. “We are still not happy with the new business margin of 0.9%. However, we have already implemented measures to increase it to 2.2% by 2012.”
Good start to 2010
“In the first two months of 2010, Swiss Life was able to build on the progress made in the fourth quarter of 2009. The same goes for AWD, which was in the black in the first two months of 2010 and is advancing as planned,” explains Bruno Pfister, Group CEO.
Annual report 2009
The Swiss Life Group is one of Europe's leading providers of life insurance and pension solutions. In Switzerland, France and Germany, the Group offers individuals and corporations comprehensive advice and a broad range of products through its own sales force as well as brokers and banks. Swiss Life provides international corporations with employee benefits solutions from a single source, and is one of the global leaders in structured life and pension products for international high net worth individuals.
The AWD Group has been part of the Swiss Life Group since 2008. Hanover-based AWD is one of the leading European financial services providers in the medium- and high-income client segments and offers its clients personal and holistic financial planning in eight countries.
Swiss Life Holding Ltd, registered in Zurich, was founded in 1857 as Schweizerische Rentenanstalt. The shares of Swiss Life Holding Ltd are listed on the SIX Swiss Exchange (SLHN). The Swiss Life Group employs a staff of around 8200.
This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors which may result in a substantial divergence between the actual results, financial situation, development, performance or expectations of Swiss Life and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers are cautioned that these statements are only projections and that no undue reliance should be placed on such forward-looking statements. Neither Swiss Life nor any of its directors, officers, employees or advisors nor any other person connected or otherwise associated with Swiss Life makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this publication. Neither Swiss Life nor any of the aforementioned persons shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. Furthermore, Swiss Life assumes no responsibility to publicly update or alter its forward-looking statements or to adapt them, whether as a result of new information, future events or developments or any other reason.