"I am very pleased with our performance in 2014: We increased premiums, profit, and fee and commission income, while keeping a firm grip on costs," says Patrick Frost, Group CEO. "We are reaping the fruit now of the seeds we sowed in previous years. By improving the resilience of our business model, we have steadily expanded our position in the market. Not even the abolition of the minimum euro exchange rate this year will prevent us from achieving our targets for 2015."
Swiss Life expands its market position
Swiss Life grew profitably and above the market average in 2014. Premium volume rose to CHF 19.1 billion (2013: CHF 18.0 billion), equivalent to a 7% rise in local currency compared to the previous year. The Group also recorded pleasing development in fee and commission income, up 15% in local currency to CHF 1.3 billion.
The home market of Switzerland, where total premium volume increased by 11% from CHF 9.0 billion to CHF 10.0 billion, was a key growth driver. The high demand from SMEs for full insurance solutions in 2nd pillar occupational benefits (BVG) continued unabated, particularly in the corporate client area, with Swiss Life growing by 11%, compared to just 1% for the market as a whole. In private client business, premiums rose by 12%. At the same time Swiss Life increased fee and commission income in the home market by 10% to CHF 182 million. Swiss Life in France also posted growth, with a 10% rise in premiums to EUR 4.2 billion. Fee and commission income also increased, up 11% to EUR 223 million. In Germany, the strict focus on profitable business led to a 5% decline in premiums to EUR 1.3 billion. At the same time however, Swiss Life Germany recorded strong growth in fee and commission income with a 12% increase to EUR 349 million. Swiss Life International reported a 6% fall in premiums in local currency to CHF 2.5 billion, while growing fee and commission income by 4% to CHF 240 million.
In its external customer business, Swiss Life Asset Managers achieved organic net new assets of CHF 4.5 billion. Assets under management for external customers thus came to CHF 33.7 billion (+22%). Together with insurance mandates (CHF 149.3 billion), total assets under management at Swiss Life Asset Managers stood at CHF 183.0 billion as at the end of 2014, 18% up on the previous year. Of this amount, CHF 32.5 billion is invested in real estate. In addition, Swiss Life has real estate under administration amounting to a total of CHF 31.5 billion: CHF 16.7 billion of which originates from Livit and CHF 14.8 billion from Corpus Sireo, a group acquired by Swiss Life on 1 October 2014. Total real estate under management and administration as at the end of 2014 thus came to CHF 63.9 billion.
Swiss Life achieves another strong net investment result
Swiss Life reports adjusted profit from operations of CHF 1182 million, up 4% on the previous year. The increase in profits was driven by France, Swiss Life Asset Managers and International. Net profit rose from CHF 784 million to CHF 818 million (+4%). The profit increase was achieved despite further strengthening of the insurance reserves by CHF 1.2 billion.
Swiss Life Asset Managers generated direct investment income of CHF 4.5 billion in 2014 – a rise of 4% on the previous year. The net investment result improved by almost CHF 200 million to CHF 5.1 billion, producing a net investment return of 3.8% (2013: 3.9%).
Swiss Life Switzerland confirmed its high earnings power of the previous year with a contribution of CHF 657 million (-8%). Changes in the accounting standards (IFRS 13) during the prior-year period had a positive impact of CHF 60 million. Adjusted for this one-off effect, the result would be on a par with the previous year. In France, Swiss Life posted an increase in profits of 13% to EUR 178 million. Swiss Life Germany contributed EUR 76 million, almost on a par with the previous year (-2%). Significant progress was made at Swiss Life International: The segment result more than doubled from CHF 16 million in the previous year to CHF 34 million. The segment result for Swiss Life Asset Managers also showed a positive trend, up 13% to CHF 188 million (2013: CHF 166 million), with CHF 14 million originating from Corpus Sireo.
Most of the "Swiss Life 2015" goals achieved ahead of schedule
The Group again made operational progress in the second year of implementing its Group-wide strategy "Swiss Life 2015". Efficiency gains were made in all business areas. The 1% increase in costs is primarily attributable to investments in growth initiatives at Swiss Life Asset Managers. Efficiency ratios, however, improved again in all insurance units. Swiss Life made overall cost savings of CHF 160 million, thereby achieving its 2015 cost savings target of CHF 130 - 160 million one year ahead of schedule. As a result of the interest rate situation, the new business margin fell from 2.2% to 1.8% – although it still stands above our target of 1.5%. The value of new business in 2014 came to CHF 255 million (2013: CHF 289 million). The Group generated adjusted return on equity of 9.6% in the year under review (2013: 10.0%). Shareholders' equity climbed from CHF 8.9 billion to CHF 12.8 billion (+43%). In the same period, the Group's solvency ratio rose from 210% to 269%.
Increase in dividend to CHF 6.50 – Investors' Day on 25 November 2015
At the Annual General Meeting of Shareholders on 27 April 2015, the Board of Directors will propose an increase in the dividend (withholding tax-free distribution out of the capital contribution reserves) from CHF 5.50 in the previous year to CHF 6.50 per share (+18%). All members of the Board of Directors will be standing for re-election.
Swiss Life will hold an Investors' Day on 25 November 2015 to present its new targets following on from the Group-wide programme "Swiss Life 2015".
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The Swiss Life Group is one of Europe's leading comprehensive life and pensions and financial solutions providers. In its core markets of Switzerland, France and Germany, Swiss Life offers individuals and corporations comprehensive and individual advice plus a broad range of own and partner products through its sales force and distribution partners such as brokers and banks.
Swiss Life Select, tecis, Horbach, Proventus and Chase de Vere advisors choose suitable products for customers from the market according to the Best Select approach. Swiss Life Asset Managers offers institutional and private investors access to investment and asset management solutions. Swiss Life provides multinational corporations with employee benefits solutions and high net worth individuals with structured life and pensions products.
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 two subsidiaries Livit and Corpus Sireo are also part of the Swiss Life Group. The Group employs a workforce of around 7500 and approximately 4500 certified financial advisors.
Cautionary statement regarding forward-looking information
This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements, by their nature, are subject to known and unknown risks, uncertainties and other important factors. These may result in a substantial divergence between the actual results, developments and expectations of Swiss Life and those explicitly or implicitly described in these forward-looking statements. Given these uncertainties, the reader is reminded that these statements are merely projections and should not be overvalued. Neither Swiss Life nor its Members of the Board of Directors, executive managers, managers, employees or external advisors nor any other person associated with Swiss Life or with any other relationship to the company makes any express or implied representation or warranty as to the correctness or completeness of the information contained in this publication. Swiss Life and the abovementioned persons shall not be liable under any circumstances for any direct or indirect loss resulting from the use of this information. Furthermore, Swiss Life undertakes no obligation to publicly update or change any of these forward-looking statements, or to adjust them to reflect new information, future events, developments or similar.