In 2015 the Swiss Life Group once again grew its earning power: Net profit rose from CHF 818 million to CHF 878 million (+7%). Adjusted operating income was up 17% at CHF 1.3 billion. All units contributed to this positive development.
Swiss Life continued its profitable growth in 2015, with premium income up by 5% year-on-year in local currency to CHF 18.9 billion. This corresponds to a fall of 1% in Swiss francs. In fee business the Group increased earnings in local currency by 8% to CHF 1.3 billion (–1% in Swiss francs).
Earning power increases in all units – sustainable business model
In 2015, the Swiss Life Group increased net profit by 7% to CHF 878 million and adjusted profit from operations also rose by 17% to 1.3 billion. The savings result rose by 18% to CHF 773 million; the risk result by 4% to CHF 395 million; and the result from fee and commission business, or fee result, increased by 36% to CHF 342 million.
Despite continuing low interest rates and the negative currency effect, Swiss Life generated direct investment income of CHF 4.3 billion in 2015 (2014: CHF 4.5 billion). The net investment result improved from CHF 5.1 billion to CHF 5.2 billion, producing a net investment return of 3.7% (2014: 3.8%). The robust investment return allowed Swiss Life to again strengthen the insurance reserves in 2015 by CHF 1.2 billion, and thus shore up the sustainability of the business model.
Swiss Life Switzerland increased its earning power by 10% to CHF 734 million. The main driver was the savings result of CHF 499 million (+19%). The risk result remained stable at a high level (CHF 267 million) and the fee result was slightly negative due to investments in growth initiatives (CHF –4 million). In France Swiss Life saw earnings enhanced by 20% to EUR 219 million. In addition to the savings result of EUR 163 million (+12%), the risk result of EUR 82 million (+18%) and fee result of EUR 43 million (+38%) also contributed to this increase. Germany posted earnings of EUR 121 million, up 51% over 2014, comprising a savings result of EUR 86 million (+33%), fee result of EUR 37 million (+159%) and a risk result of EUR 26 million (+8%). Swiss Life International improved its segment result of EUR 30 million to EUR 38 million (+26%), mainly driven by the fee result of EUR 29 million (+61%). An equally pleasing increase in the segment result was achieved by Swiss Life Asset Managers with 28% growth to CHF 242 million.
In the home market of Switzerland, premium volume rose by 5% to CHF 10.5 billion. In the corporate client sector Swiss Life saw a 6% increase in premiums to CHF 8.9 billion, while the market grew by only 1%. In private client business, the result of CHF 1.6 billion all but attained the previous year’s level (–1%) while also outperforming the market (–2%). In addition, Swiss Life Switzerland successfully pursued its full-range provider strategy for corporate clients, growing the share of new business, alongside full insurance, with semi-autonomous insurance solutions to 11% (2014: 4%). In France Swiss Life grew premiums by 2% to CHF 4.2 billion. The quality of new life insurance business again posted a pleasing rate of growth with a higher proportion of unit-linked solutions (60%). The focus on profitable growth in Germany led to a 2% fall in premiums to EUR 1.3 billion: The planned reduction in traditional business was largely offset by the increase in the proportion of modern savings products as well as disability and long-term care insurance. Swiss Life International posted premium growth of 14% to EUR 2.3 billion.
As at 31 December 2015, Swiss Life Asset Managers had a total of CHF 185 billion under management (+1%), including CHF 39 billion in real estate. Swiss Life also manages CHF 28.6 billion in real estate for third parties, which makes the company one of Europe’s leading real estate managers with CHF 67.6 billion under management and administration. In its third-party customer business, Swiss Life Asset Managers posted net new assets of CHF 7.2 billion. The company thus had CHF 38.8 billion in assets under management for third parties by the end of 2015.
Improved efficiency – solid solvency
Efficiency ratios improved Group-wide by 2 basis points to 0.60%. In spite of low interest rates, the new business margin of 1.7% (2014: 1.8%) was above the ambition level of 1.5%. The value of new business rose from CHF 255 million in 2014 to CHF 268 million (+5%). Swiss Life generated an adjusted return on equity of 9.7% in 2015 (2014: 9.6%), and thus once again attained the upper end of its target band of 8 to 10%. Shareholders’ equity came to CHF 12.2 billion (–5%) due in particular to lower unrealised gains on bonds and currency effects. Swiss Life estimates its SST ratio at 140% as at 1 January 2016 (based on the internal model approved with certain conditions).
Events after the reporting period
For events of particular importance occurring after the end of the business year, please refer to Note 35, “Events after the Reporting Period”, in the consolidated financial statements.
Key figures for the Swiss Life Group
|Amounts in CHF million||2015||2014||+/–|
|GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED||18 853||19 102||-1%|
|Net earned premiums||13 771||13 776||-0%|
|Fee and commission income||1 292||1 305||-1%|
|Financial result||5 281||5 361||-1%|
|Other income||210||31||n. a.|
|TOTAL INCOME||20 555||20 474||0%|
|Net insurance benefits and claims||-15 516||-15 218||2%|
|Policyholder participation||-899||-1 146||-22%|
|Operating expense||-2 649||-2 735||-3%|
|TOTAL EXPENSE||-19 226||-19 304||-0%|
|PROFIT FROM OPERATIONS||1 329||1 169||14%|
|Equity||12 258||12 831||-4%|
|Insurance reserves||154 953||156 684||-1%|
|Assets under management||202 268||199 750||1%|
|Assets under control||223 411||224 593||-1%|
|Return on equity (in %)1||9.7||9.6||+0.1 Ppkt.|
|Number of employees (full-time equivalents)||7 595||7 492||1%|
|1 equity excl. unrealised gains/losses on bonds|
Asset allocation on a fair value basis as at 31 December (insurance portfolio at own risk)
|Amounts in CHF million||2015||2015||2014||2014|
|Equity securities and equity funds||5 744||3.9%||4 044||2.7%|
|Alternative investments||1 331||0.9%||1 088||0.7%|
|Real estate||23 164||15.8%||20 712||13.8%|
|Mortgages||7 634||5.2%||6 647||4.4%|
|Loans||9 638||6.6%||12 820||8.5%|
|Bonds||97 125||66.3%||101 827||67.9%|
|Cash and cash equivalents and other||1 779||1.2%||2 819||1.9%|
|TOTAL||146 413||100.0%||149 957||100.0%|
|Net equity exposure||1.9%||1.9%|
|Duration of bonds||11.0 years||11.3 years|