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Swiss Life increases fee income in the first half of 2018 – net profit up by 7% to CHF 561 million

14.08.2018

  • Swiss Life continued to grow profitably in the first six months of 2018: adjusted profit from operations was 3% higher than in the previous year at CHF 808 million. Net profit increased by 7% to CHF 561 million.
  • Fee income rose by 10% in local currency to CHF 798 million. The fee result increased by 6% to CHF 248 million.
  • Swiss Life posted a 4% increase in premiums in local currency to CHF 10.7 billion.
  • Swiss Life generated direct investment income of CHF 2.24 billion (previous year: CHF 2.19 billion). The non-annualised direct investment yield was stable at 1.5%; the net investment yield on a non-annualised basis was 1.7% (previous year: 1.4%).
  • Swiss Life Asset Managers posted net new assets of CHF 3.7 billion in its third-party business. As a result, assets under management for third parties rose to CHF 64.6 billion at the end of June 2018 (plus 5% compared to end-2017).
  • The new business margin in the first half of 2018 was 2.6% (prior-year period: 2.6%); the value of new business rose by 20% to CHF 212 million.
  • Swiss Life achieved an adjusted return on equity of 9.7% in the first six months of the year (prior-year period: 10.5%).
  • Succession solution in the Corporate Executive Board: Matthias Aellig (47) will be the new CFO of the Swiss Life Group as of 1 March 2019.

“Swiss Life continued its positive development in the first half of 2018”, says Patrick Frost, CEO of the Swiss Life Group. “The ongoing growth in fee business played a major part in the pleasing increase in our results. It is especially good to see that the growth in the fee result stems from our four insurance units. Moreover, the significant increase in the value of new business shows that we are growing profitably.”

Increase in profit from operations and net profit – higher investment income

The Swiss Life Group increased its adjusted profit from operations by 3% to CHF 808 million in the first half of 2018. The resulting net profit rose by 7% to CHF 561 million. The fee result increased, mainly due to owned IFAs, by 6% relative to the prior-year period from CHF 233 million to CHF 248 million.

Swiss Life generated direct investment income of CHF 2.24 billion (previous year: CHF 2.19 billion). That equates to a stable non-annualised direct investment yield of 1.5%. The net investment result in the first half year was CHF 2.64 billion (previous year: CHF 2.05 billion), giving a net investment yield of 1.7% on a non-annualised basis (previous year: 1.4%).

Swiss Life Switzerland achieved a segment result of CHF 439 million in the first six months of the year, an increase of 4%. The fee result rose from CHF 11 million in the previous year to CHF 14 million. In France, Swiss Life achieved a segment result of EUR 130 million (-3% from the previous year). Meanwhile the fee result rose by 25% to EUR 37 million. Swiss Life Germany increased its result, relative to the previous year, by 22% to EUR 79 million; the fee result also grew by 26% to EUR 41 million. Swiss Life International achieved a result of EUR 29 million (plus 26%), of which EUR 20 million (+17%) stemmed from the fee result. Swiss Life Asset Managers achieved a segment result of CHF 118 million in the first half of the year. The 4% reduction mainly stems from lower transaction fees and higher costs in third-party asset management.

Further growth in fee business and higher premiums

Swiss Life successfully expanded its fee business in the first half of 2018: fee income increased Group-wide to CHF 798 million, equivalent to a 10% increase in local currency. Owned IFAs (+11%), own and third-party products and services (+6%) and Swiss Life Asset Managers (+2%) contributed to this growth. Premiums were up 4% in local currency to CHF 10.7 billion, while the focus remained on profitability and capital efficiency. Insurance reserves for the benefit of the company's policyholders rose by 2% in local currency.

In the Swiss domestic market, Swiss Life grew premiums by 3% to CHF 6.1 billion. Fee income came to CHF 125 million, a 9% increase. In France, Swiss Life posted a rise in premiums of 15% to EUR 2.6 billion. In fee business, income rose by 8% to EUR 141 million. Swiss Life in Germany achieved premiums of EUR 589 million in the first six months of the year, an increase of 2%. Fee income increased by 17% to EUR 198 million. Swiss Life International generated premiums of EUR 810 million, a decrease of 17%. Fee income, on the other hand, increased by 2% to EUR 106 million.

Swiss Life Asset Managers maintained growth in third-party business: net new assets in the first half of 2018 came to CHF 3.7 billion and assets under management for third parties rose by 5% from year-end 2017 to CHF 64.6 billion. At the end of June 2018, Swiss Life Asset Managers had total assets under management of CHF 225.1 billion (+1% compared to year-end 2017). Swiss Life Asset Managers increased its total income by 3% to CHF 326 million, with third-party asset management contributing CHF 175 million (previous year: CHF 172 million).

Strong new business margin and solid solvency

Swiss Life generated a new business margin of 2.6% in the first half of 2018 (previous year: 2.6%). The value of new business rose from CHF 177 million in the previous year to CHF 212 million. The average technical interest rate decreased by 4 basis points to 1.33%, mainly due to reserve strengthening for the benefit of the company’s policyholders and an improved product mix in new business; the average technical interest rate for Swiss business was 0.99%. In the first half of 2018, Swiss Life posted a lower adjusted return on equity of 9.7% (corresponding period in previous year: 10.5%) due to a 16% increase in adjusted shareholders' equity. Swiss Life estimates its SST ratio at above 170% as of 30 June 2018, based on the internal model approved with conditions.

Matthias Aellig to succeed Thomas Buess as CFO of the Swiss Life Group

Matthias Aellig, 47 years old and Group Chief Risk Officer since 2010, will take over as Chief Financial Officer as of 1 March 2019 when he will also become a member of the Corporate Executive Board. He will succeed Thomas Buess (61), who after ten exceptionally successful years at Swiss Life has decided to take on duties and roles in the next phase of his life that do not entail an executive function, yet enable him to apply his experience in a variety of ways.

Patrick Frost: “The nomination of Matthias Aellig is an ideal succession solution for us. We have again managed to fill a vacancy on the Corporate Executive Board with an excellent internal candidate. Matthias Aellig is an experienced leader with a broad knowledge of insurance and finance. As Chief Risk Officer, he has been involved in all of the key issues facing the Corporate Executive Board. He stands for continuity.”

Matthias Aellig has been Chief Risk Officer of the Swiss Life Group since 2010. In this function he is responsible for quantitative and qualitative risk management, the Group’s actuarial office, and product and margin management. Over the past years he has made an indispensable contribution to the company’s strong capitalisation, to developing enterprise risk management, to stabilising the interest margin and to maintaining progress on the value of new business front.

Patrick Frost, CEO of the Swiss Life Group: “At Swiss Life we set great store by transparency, continuity and a long-term view. We are making the change of leadership known now in the spirit of a sustainable succession solution.”

CV Matthias Aellig

Photo Matthias Aellig

Telephone conference for investors and analysts

Patrick Frost, Group CEO, and Thomas Buess, Group CFO, will hold a telephone conference in English for financial analysts and investors today at 9 a.m. (CET).

Dial-in numbers:

 

Europe:

+41 (0) 58 310 50 00

UK: 

+44 (0) 207 107 06 13

USA:

+1 (1) 631 570 56 13

 

Telephone conference for media representatives

Patrick Frost, Group CEO, and Thomas Buess, Group CFO, will hold a telephone conference in German for media representatives today at 11 a.m. (CET).

Dial-in number:

Europe:      +41 (0) 58 310 50 00

An audio webcast of both conferences will be made available on the www.swisslife.com website. Please dial in ten minutes before the start of the conference.

Information

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Further information

All our media releases can be found at swisslife.com/mediareleases

Swiss Life

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 subsidiaries Livit, Corpus Sireo and Mayfair Capital are also part of the Swiss Life Group. The Group employs a workforce of around 8000 and approximately 5000 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 SwissLife 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. SwissLife 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.

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