Swiss Life Holding Ag · SIX:SLHN
Swiss Life — H1 2016 Earnings Presentation
66 slides from Swiss Life's earnings presentation, Aug 11, 2016
Slide 1: Half-year results 2016 Investors' presentation
Half-year results 2016 Investors’ presentation 11.08.2016
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 2 | Investors' presentation | Half-year results 2016
Slide 3: Swiss Life delivers strong HY 2016 results
Swiss Life delivers strong HY 2016 results +1% +16% 493 500 194 167 Net profit, Net profit Fee result RoE 11.6% 11.1% RoE (CHF m) (CHF m, %) HY 2015 HY 2016 HY 2015 HY 2016 -2% -22% 145 526 517 Operating 113 Operating expense VNB, VNB expense, insurance 1.7% 1.5% segments NBM NBM efficiency 0.30% 0.
Slide 4: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 4 | Investors' presentation | Half-year results 2016
Slide 5: Key figures HY 2016 results
Key figures HY 2016 results HY 2016 vs. HY 2015 Net profit increased by 1% to CHF 500 m Adjusted profit from operations improved by 4% to CHF 730 m Premiums decreased by 9% in local currency to CHF 10.1 bn Fee and commission income grew 3% in local currency to CHF 656 m Fee result increased
Slide 6: Selected P&L figures
Selected P&L figures CHF million (IFRS basis) HY 2015 HY 2016 Gross written premiums, fees and deposits received 11 010 10 138 Fee and commission income 617 656 Net investment result insurance portfolio for own risk 2 812 2 315 Net insurance benefits and claims -9 223 -9 093 Policyholder participati
Slide 7: Profit from operations
Profit from operations CHF million (IFRS basis, adjusted) +4% 729 +1 730 692 +2 694 +8 702 Profit Restruc- Profit FX Profit Profit Restruc- Profit from turing from translation from from turing from operations costs operations effect operations operations costs operations excl. comparable excl. one-o
Slide 8: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, MCEV) HY 2015 HY 2016 Change GWP incl. PHD 7 040 6 597 -6% • GL: -5% (market -5%); IL: -17% (market -11%) • Lower single premiums in both GL and IL due to focus on profitability and capital efficiency Fee and commission 96 117 +22% • Increased rev
Slide 9: Business review France
Business review France EUR million (IFRS basis, MCEV) HY 2015 HY 2016 Change GWP incl. PHD 2 050 2 014 -2% • Life: -2% (market +4%), clients more cautious in current equity market environment; UL share 38% (market 19%) • Health & protection: -1% (market +3%); individual protection +4% (market +5%) F
Slide 10: Business review Germany
Business review Germany EUR million (IFRS basis, MCEV) HY 2015 HY 2016 Change GWP incl. PHD 604 576 -5% • Focus on profit before growth; lower traditional single premiums partly offset by higher contribution from modern-traditional and disability products (market -5%) Fee and commission 159 166 +5%
Slide 11: Business review International
Business review International EUR million (IFRS basis, MCEV) HY 2015 HY 2016 Change GWP incl. PHD 1 125 651 -42% • Significantly lower single premiums with private clients; higher periodic premiums with corporate clients more than offset by lower single premiums Fee and commission 105 98 -6% • Lower
Slide 12: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2015 HY 2016 Change Total income 263 288 +9% • PAM: Higher average asset base partly offset by PAM 133 135 +2% lower transaction volume in real estate TPAM 130 153 +17% • TPAM: Strong inflows, higher transaction fees Op
Slide 13: Expense development
Expense development CHF million (IFRS basis) HY 2015 HY 2016 Change Total operating expense 1 251 1 260 +1% Commissions and DAC amortisation -583 -572 Operating expense (before FX) 668 688 +3% Restructuring costs and one-offs -0 -10 Scope changes 0 -2 FX translation effect +14 Operating expense adju
Slide 14: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2015 HY 2016 Direct investment income 2 179 2 235 Direct investment income in % 1.5% 1.5% Expense -149 -158 Net capital gains/losses on investments and impairments1) 782 238 Net investment result 2 812 2 315 Net investme
Slide 15: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) Equities & equity funds 146 413 157 337 Alternative investments 3.9% 4.4% Real estate 0.9% 15.8% 15.3% 0.9% Mortgages 5.2% 5.2% Loans 6.6% 6.2% Government & supranational bonds 31.7% 33.7% 66.3% 66.8% Corporate b
Slide 16: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF billion (IFRS basis) +2% +9.2 144.9 144.7 +1.1 147.4 -0.2 -7.5 -0.1 31.12.2015 FX translation 31.12.2015 Premiums/ Withdrawals/ Interest Market 30.06.2016 effect excl. FX deposits benefits accrued movements received incurred and
Slide 17: Shareholders' equity
Shareholders’ equity CHF million (IFRS basis) +499 14 316 +18% +1 925 +5 -19 -271 12 177 31.12.2015 Change in Change in Distribution Change in Profit 30.06.2016 unrealised foreign from capital treasury shares attributable gains/losses currency contribution and share to share- net translation reserve
Slide 18: Key financial targets of Swiss Life 2018
Key financial targets of Swiss Life 2018 Customer centricity and advice Quality of earnings Operational efficiency Capital, cash and dividend and earnings growth • Fee result FY 2018: • Cost savings FY 2018: • Cumulative cash remittance CHF 400-450 m CHF 100 m to Holding (2016-2018): > CHF 1.5 bn •
Slide 19: Strong fee and commission income …
Quality of earnings Strong fee and commission income … and earnings growth Fee and commission income1), CHF million (IFRS basis) +6% +3% LC Local 656 617 currency • Strong net new assets in TPAM; higher fees in Swiss Life Asset 279 +8% +6% PAM due to increased average asset base, partly Managers 259
Slide 20: … led to improved fee result
Quality of earnings … led to improved fee result and earnings growth Fee result1), CHF million (IFRS basis) +16% 194 thereof 167 thereof Asset 115 Managers Asset 102 Managers Insurance Insurance 79 segments 65 segments HY 2015 HY 2016 1) HY 2015 FX adjusted 20 | Investors' presentation | Half-year r
Slide 21: Continued strong returns in a low interest rate environment
Quality of earnings Continued strong returns in a low interest and earnings growth rate environment Direct and net investment yield, not annualised (IFRS basis, in %) 4.0 3.5 3.0 2.7% 2.4% 2.5 1.9% 1.9% 2.0% 2.0 2.1% 1.8% 1.7% 1.6% 1.9% 1.5 1.7% 1.5% 1.8% 1.5% 1.0 0.5 0.0 -0.5 -1.0 30.06.2010 30.06.
Slide 22: Average technical interest rate decreased further
Quality of earnings Average technical interest rate and earnings growth decreased further Statutory basis • FX translation effect -0 bps 2.60% • Reserve strengthening -2 bps 2.55% • Business mix -3 bps 2.35% Total -6 bps 2.12% 2.04% 1.93% 1.64% 1.58% 01.01.2010 – 30.06.2016: • FX translation effect
Slide 23: Continued margin management
Quality of earnings Continued margin management and earnings growth New business margin (NBM) development (VNB in % PVNBP) Economic variances • Challenging capital market environment with substantially 1.7% 1.7% lower interest rates +0.6% 1.5% -0.1% Volume, business mix and pricing variances Continu
Slide 24: Implemented cost savings of CHF 43 m
Operational Implemented cost savings of CHF 43 m efficiency Non-variable cost savings1), gross CHF million (project view), vs. cost base FY 2014 ~ 100 • CH: Staff reduction, optimisation of IT processes and infrastructure • FR: Continuous review and renegotiation of supplier contracts, further optim
Slide 25: Further improved efficiency ratios
Operational Further improved efficiency ratios efficiency Adjusted operating expense in % of average technical reserves, excl. deferred PHP (adjusted IFRS basis) Excluding expense from owned IFAs Change vs. FY 2014 FY 2015 HY 20152) HY 20162) HY 2015 Switzerland 0.46% 0.44% 0.22% 0.20% -2 bps France
Slide 26: Healthy solvency ratios
Capital, cash and Healthy solvency ratios dividend Swiss Life Group: Economic solvency SST sensitivities (as of 01.01.2016) (as of 01.01.2016) Real estate -10% -12 ppts SST internal model approved with 146% conditions, as filed with FINMA Credit spreads1) +100 bps -8 ppts Interest rates2) -50 bps -8
Slide 27: Well-balanced capital structure
Capital, cash and Well-balanced capital structure dividend Capital structure1) (IFRS basis) 4 394 Senior 0-5% 6% 423 Senior bonds Carrying value (CHF m) Hybrid 25% 26% 463 Convertible bonds Shareholders’ 3 508 Hybrid debt 70-75% 68% equity2) Reference level HY 2016 HY 2016 Maturities (senior) and ne
Slide 28: Increased cash remittance to Holding
Capital, cash and Increased cash remittance to Holding dividend Cash remittance to Holding, CHF million +51% 557 • Expected annual dividends from subsidiaries 369 largely paid to the Holding company in the first six months of 2016 • Achieved around 1/3 of targeted Swiss Life 2018 cash remittance of
Slide 29: Swiss Life 2018 off to a good start
Swiss Life 2018 off to a good start Swiss Life 2018 financial targets Current assessment • Fee result FY 2018: CHF 400-450 m On track (slightly ahead) Quality of earnings and • Risk result FY 2018: CHF 350-400 m On track earnings growth • Cumulative value of new business (2016-2018): > CHF 750 m Cha
Slide 30: Supplementary information
Half-year results 2016 Investors’ presentation Supplementary information
Slide 31: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 31 | Investors' presentation | Half-year results 2016
Slide 32: Net profit
Net profit CHF million (IFRS basis, adjusted) +0% 500 +1 501 493 +2 495 +5 500 Net Restruc- Net FX translation Net Net Restruc- Net profit turing profit effect profit profit turing profit costs excl. comparable costs excl. one-offs basis one-offs HY 2015 HY 2016 32 | Investors' presentation | Half-y
Slide 33: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 6 597 Switzerland -6% -6% 7 040 2 208 France +2% -2% 2 170 632 Germany -1% -5% 639 714 International -40% -42% 1 191 10 138 Total1) -8% -9% 11 010 HY 2016 HY 2015 1) Total includes Other and intersegment eliminations
Slide 34: Fee and commission income development
Fee and commission income development CHF million (IFRS basis) Local currency 117 Switzerland +22% +22% 96 117 France1) -6% -9% 124 182 Germany +9% +5% 168 108 International -3% -6% 111 Asset 279 Managers 259 +8% +6% 656 Total1)2) +6% +3% 617 HY 2016 HY 2015 1) Incl. banking and Pôle Agami 2) Total
Slide 35: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 2015 HY 2016 Change Total life GWP incl. PHD 7 040 6 597 -6% Single premiums 3 759 3 313 -12% Periodic premiums 3 281 3 284 +0% Group life 6 255 5 947 -5% Single premiums 3 432 3 153 -8% Periodic premiums 2 823 2 794 -1% Individual life 78
Slide 36: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2016 Direct Net Impair- Gains and losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 1 495 -15 455 135 590 2 070 Equities 126 -4 -227 76 -151 -
Slide 37: Profit from operations
Profit from operations CHF million (IFRS basis), segment results (reported vs. adjusted) HY 2015 HY 2016 Change Segments reported1) adjusted2) reported adjusted2) reported adjusted Switzerland 412 412 420 420 +2% +2% France 133 138 137 137 +3% -0% Germany 53 56 63 64 +17% +14% International 21 22 25
Slide 38: New business mix
New business mix New business production (NBP) 25% 27% 24% 25% 31% 39% 35% 34% 33% 30% Risk, health and P&C 12% 18% 21% 26% Modern 28% Modern-traditional 24% 20% 21% 16% 11% Traditional FY 2012 FY 2013 FY 2014 FY 2015 HY 2016 Shift excl. traditional 85% 88% 90% 92% 94% CH GL 38 | Investors' presenta
Slide 39: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 39 | Investors' presentation | Half-year results 2016
Slide 40: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as of 30.06.2016 17 195 -10 321 -302 0 5 061 -1 511 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds1) bonuses adjustment equity 1) Including
Slide 41: Return on equity
Return on equity CHF million (IFRS basis) HY 2016 RoE calculation FY 2015 HY 2016 (annualised) Net profit HY 2016 Shareholders’ equity 12 177 14 316 499 (shareholder part) Unrealised gains/losses on bonds Average adjusted -2 998 -5 061 9 217 allocated to shareholders’ equity shareholders’ equity Adj
Slide 42: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF million (IFRS basis) Local currency 86 675 Switzerland +3% +3% 83 856 International 13% 24 866 France +2% +2% Germany 24 463 11% 16 522 59% Germany -1% -0% 17% 16 633 France 19 407 Switzerland International -3% -3% 20 039 147 35
Slide 43: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2015 30.06.2016 currency Insurance reserves 154 953 161 551 +4% +4% Policyholder participation liabilities 10 065 14 192 +41% Insurance reserves w/o PHP liabilities 144 887 147 359 +2% +2% Insurance liabilities 108 157 111 122 +3
Slide 44: Swiss Life Group reserves subject to BVG minimum interest rates
Swiss Life Group reserves subject to BVG minimum interest rates CHF billion (IFRS basis) Breakdown of insurance reserves (incl. unit-linked) as of 30.06.2016 0.9 Non-life 43.8 Investment contracts & PH deposits Europe 28.7 Total Group Individual 161.6 20.4 Traditional business Annuitised 116.8 & oth
Slide 45: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as of 30.06.2016 CHF EUR USD GBP Total reserves 83 303 29 451 153 11 Average technical interest rate 1.31% 2.30% 2.34% 2.73% Overall: 1.58% (01.01.2016: 1.64%) 45 | Investors' presentation | Half-year results 2016
Slide 46: Total weighted duration gap
Total weighted duration gap In % 0.9 0.9 0.9 0.7 0.6 0.5 0.4 31.12.2010 31.12.2011 31.12.2012 31.12.2013 31.12.2014 31.12.2015 30.06.2016 46 | Investors' presentation | Half-year results 2016
Slide 47: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 47 | Investors' presentation | Half-year results 2016
Slide 48: Business review Asset Managers: Change analysis of assets under management
Business review Asset Managers: Change analysis of assets under management CHF billion (fair value basis) Assets under management HY 2015 HY 2016 Change (bn) Total beginning of period 183.0 185.3 +2.3 Net new assets PAM 1.9 0.7 TPAM 4.2 4.9 Market performance -1.4 11.6 FX translation effects -8.7 -0
Slide 49: Assets under management and administration
Assets under management and administration CHF billion, as of 30.06.2016 Real estate under AuM administration1) Total assets under management and Total 202.2 28.4 administration CHF 230.6 bn Real estate under Total real estate under management and 40.0 11.32) management and administration administra
Slide 50: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million BB B 157 337 4% BBB 1% AAA 17% 33% 18% A 27% AA Breakdown by classification Bonds 66.8% Corporate bonds1) 49% 51% Governments & supranationals 30.06.2016 1) Including senior
Slide 51: Government and supranational bond portfolio: Ratings and currency
Government and supranational bond portfolio: Ratings and currency Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million BBB BB 157 337 A 1% 6% 4% 45% AAA 44% AA Governments & Breakdown by currency 33.7% supranationals CAD Other GBP 1% USD 2% EUR 5% 29% 15% 48% CHF 30.06
Slide 52: Government and supranational bond portfolio: Country split
Government and supranational bond portfolio: Country split Government and supranational bond portfolio (fair value basis), as of 30.06.2016, 33.7% of insurance portfolio for own risk (CHF 53.0 bn) % of total government and supranational bond portfolio Switzerland 36% France 11% Netherlands 6% German
Slide 53: Corporate bond portfolio: Ratings and currency
Corporate bond portfolio: Ratings and currency Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million BB B 157 337 AAA 7% 2% 20% BBB 31% 9% AA 31% A Breakdown by currency GBP Other 3% 1% EUR USD 35% 34% Corporate 33.1% bonds1) 27% 30.06.2016 CHF 1) Including senior secur
Slide 54: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio1) (fair value basis), as of 30.06.2016, 33.1% of insurance portfolio for own risk (CHF 52.1 bn) Breakdown by rating Breakdown by industry BB % of total BBB corporate bond portfolio 1% 17% Banks 36% Other financials 5% 46% AAA Utilitie
Slide 55: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 157 337 Switzerland 42% Mortgages 5.2% Germany 57% Loans 6.2% 1% France Breakdown by type Policyholder loans Other loans 1% 1% Purchased 46% loans 52% Mortgages 30.06.2016 55 | Investors'
Slide 56: Real estate portfolio
Real estate portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 157 337 France 8% 10% Real estate 15.3% 82% Switzerland Breakdown by type Commercial Residential 36% 36% 28% 30.06.2016 Mixed-use 56 | Investors' presentation | Half-year results 2016
Slide 57: Equities and alternative investment portfolio: Gross exposure
Equities and alternative investment portfolio: Gross exposure Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany Luxembourg 157 337 France 4% Equities & 4.4% 2% equity funds 0.9% 20% Alternative Net equity exposure 2.3% Investment 74% Switzerland Breakdown b
Slide 58: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.15 31.12.15 30.06.16 01.01. – 30.06.15 01.01. – 30.06.16 EUR 1.0430 1.0863 1.0822 1.0583 1.0962 GBP 1.4706 1.4729 1.2967 1.4441 1.4075 USD 0.9352 0.9997 0.9773 0.9478 0.9818 Interest rates (10-year government bond) 30.06.15 31.12.15 30.0
Slide 59: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 59 | Investors' presentation | Half-year results 2016
Slide 60: Value of new business
Value of new business CHF million (MCEV basis) Switzerland France Germany International Total 145 113 94 65 32 31 10 13 7 5 PVNBP 5 296 4 514 1 669 2 152 347 509 1 043 613 8 355 7 788 APE 423 322 203 253 27 31 104 63 757 668 NBM1) in % PVNBP 1.8% 1.4% 1.9% 1.4% 1.6% 2.0% 1.3% 1.2% 1.7% 1.5% in % APE
Slide 61: Value of new business
Value of new business CHF million, as per HY 2016 (MCEV basis) Switzerland France Germany International Total Value of new business 65 31 10 7 113 New business strain -29 -27 -1 -4 -61 VNB before new business strain 95 58 11 11 174 Annual premiums 207 164 28 6 405 Single premiums 1 143 891 26 565 2
Slide 62: Economic assumptions
Economic assumptions As per HY 2016 (MCEV basis) Swap rates Forward inflation rates Economy 1 year 2 year 5 year 10 year 15 year 30 year Year 1 Year 2 Year 5 Year 10 Year 15 Year 30 Switzerland -0.83% -0.87% -0.77% -0.39% -0.16% 0.07% 0.1% -0.1% 0.0% 0.2% 0.0% -0.6% Eurozone -0.19% -0.20% -0.08% 0.4
Slide 63: Cautionary statement regarding forward-looking information
Cautionary statement regarding forward-looking information This presentation is made by Swiss Life and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Swiss Life. Although all reasonable effort has been made to ensure the
Slide 64: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 64 | Investors' presentation | Half-year results 2016
Slide 65: Contact details and financial calendar
Contact details and financial calendar Contact Heidi Hinterhuber Phone +41 (43) 284 67 67 Head of Investor Relations E-mail heidi.hinterhuber@swisslife.ch Rolf Winter Phone +41 (43) 284 49 19 Senior Investor Relations Manager E-mail rolf.winter@swisslife.ch Financial calendar Interim Statement Q3 20
Slide 66: The future starts here.
é SwissLife The future starts here.