Swiss Life Holding AG · SIX:SLHN
Swiss Life — Debt Investor Presentation (June 2015)
31 slides from Swiss Life's debt investor presentation, Jun 1, 2015
Slide 1: Investor presentation: Swiss Life AG issue of undated subordinated debt
Investor presentation: Swiss Life AG issue of undated subordinated debt Roadshow 1 – 3 June 2015
Slide 2: Agenda
Agenda Swiss Life at a glance Proven resilience of business model Credit considerations Proposed transaction Appendix 2 | Swiss Life AG issue of undated subordinated debt
Slide 3: Swiss Life Group is a leading provider of life, pensions and financial solutions
Swiss Life Group is a leading provider of life, pensions and financial solutions… FY 2014 Swiss Life Group: Facts and figures Business units • GWP incl. PHD1): CHF 19.1 bn • Net profit: CHF 818 m • Adjusted profit from operations: CHF 1 182 m • Assets under Management: CHF 183.0 bn United of which e
Slide 4: Attractive and diversified portfolio based on strong market positions
…with an attractive and diversified portfolio based on strong market positions FY 2014, in CHF (IFRS basis) Insurance GWP & PHD Fee & commission Adjusted profit from Business reserves income5) operations5) Market position segments 144.5 bn 19.1 bn 1 317 m 1 182 m Switzerland − Market leader in life
Slide 5: Key figures FY 2014 results
Key figures FY 2014 results FY 2014 vs. FY 2013 Net profit CHF 818 m +4% Adjusted profit from operations CHF 1 182 m +4% GWP incl. PHD (in local currency) CHF 19.1 bn +7% Fee and commission income (in local currency) CHF 1 317 m +15% New business margin (% PVNBP) 1.8% -0.4 ppts Shareholders’ equity
Slide 6: Q1 2015: Continued operational progress
Q1 2015: Continued operational progress CHF million (IFRS basis, unaudited) +11% 7.4 +8% 6.9 5.3 Q1 2015 Premium development 4.9 +8% -4% +69% Q1 2014 (CHF bn, percentage change in local currency) 1.1 1.2 0.4 0.4 0.6 0.4 Switzerland France Germany International Total Fee and commission • CHF 316 m (+
Slide 7: Agenda
Agenda Swiss Life at a glance Proven resilience of business model Credit considerations Proposed transaction Appendix 7 | Swiss Life AG issue of undated subordinated debt
Slide 8: Right measures implemented to operate in a low interest rate environment
Right measures implemented to operate in a low interest rate environment Measure Achievements Asset side In-force: • Direct yield strengthened, stability of net investment result Disciplined increased, economic interest rate sensitivity substantially lowered Asset and Liability Liability side Manage
Slide 9: Asset allocation to strengthen direct yield and reduce risk in an ALM context
Asset allocation to strengthen direct yield and reduce risk in an ALM context CHF million (fair value basis), insurance portfolio for own risk 149 957 Equities 1% 3% Real estate Alternative investments 14% • Directly owned, non-leveraged properties Real estate • 83% of portfolio in Switzerland 13% •
Slide 10: Total weighted duration gap
Total weighted duration gap In % 1.0 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 The total weighted duration gap explains the linear change in risk-bearing capital due to a parallel shift of the underlying interest rate curve in percentage of the present value of insur
Slide 11: Continued strong returns in a low interest rate environment
Continued strong returns in a low interest rate environment Direct and net investment yield (IFRS basis, in %) 5 4.8% 4.5 4.1% 4.1% 4.1% 3.9% 3.8% 3.9% 3.8% 4 3.8% 3.8% 3.8% 3.5 3.7% 3.5% 3.4% 3.3% 3 2.5 2 1.5 1 0.3% 0.5 0 31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.12.2011 31.12.2012 31.12.2013
Slide 12: Average technical interest rate significantly decreased
Average technical interest rate significantly decreased Statutory basis 3.00% Mandatory Group life CH 2.90% • Reduction in minimum 2.66% 2.60% interest rate by 75 bps to 2.55% 1.75% by Federal Council -10 bps 2.35% 2.12% Non-mandatory Group life CH 2.04% • Reduction in guaranteed 1.93% rates by 100
Slide 13: Continued positive development of key figures
Continued positive development of key figures CHF million (IFRS basis) Insurance reserves Operating expense adjusted (w/o policyholder participation liabilities incl. UL) +29% -31% 140.4 bn5) 2 002 144 531 1 752 136 998 129 597 1 480 119 507 118 844 122 939 1 390 1 403 1 378 1 389 111 886 2008 2009
Slide 14: Profit by source driven by improved risk and fee result
Profit by source driven by improved risk and fee result CHF million (IFRS basis) FY 2013 FY 2014 adjusted adjusted Savings result 835 69% 689 55% Risk result 270 22% 395 32% Cost result -142 -12% -151 -12% - Thereof admin cost result gross1) 67 +6% 73 +6% Fee result 190 16% 269 22% Others & eliminat
Slide 15: Proven resilience of business model with limited impact of SNB decisions
Proven resilience of Swiss Life’s business model with limited impact of SNB decisions Right measures in place • Fully hedged foreign currency exposure on the insurance portfolio • Disciplined asset and liability management to preserve the interest rate margin Conclusion • Ongoing disciplined product
Slide 16: Agenda
Agenda Swiss Life at a glance Proven resilience of business model Credit considerations Proposed transaction Appendix 16 | Swiss Life AG issue of undated subordinated debt
Slide 17: Well balanced capital structure
Well balanced capital structure IFRS basis, as per 31.12.2014 Capital structure1) 7% 7% 0-5% Senior Total outstanding debt3): 23% 21% 25% Hybrid • Senior: CHF 925 m (3 instruments, thereof one convertible bond) 2) 70% 72% 70-75% SH equity • Hybrid: CHF 2.6 bn (6 instruments) FY 2013 FY 2014 Target 1
Slide 18: Debt maturity profile & refinancing plan
Debt maturity profile & refinancing plan Maturities (senior) and next optional call dates (hybrid) Nominal value, as per 31.12.2014, CHF million • Next optional hybrid call date in November 2015 (EUR 342.5 m) New hybrid • New EUR benchmark Call: 710 hybrid issue EUR 342.5 m issue […] • 1st call date
Slide 19: Strong solvency and rating position
Strong solvency and rating position… SST • SST in the green based on internal model 1) • IFRS Group Solvency 1 at 284% per Q1 2015 (+15 ppts vs. FY 2014) Solvency 1 • Excluding unrealised gains on bonds: 193% per Q1 2015 (-3 ppts vs FY 2014) • Swiss Life rated by Standard and Poor’s • Swiss Life AG
Slide 20: Allows for consistent distributions
…allows for consistent distributions CHF per share 1) 17.00 7.00 6.50 5.50 5.00 5.00 4.50 4.50 4.50 • Swiss Life has consistently 4.00 paid dividends over the last 10 years 2.40 • It has always paid all coupons on its hybrid instruments 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1) Inclu
Slide 21: Agenda
Agenda Swiss Life at a glance Proven resilience of business model Credit considerations Proposed transaction Appendix 21 | Swiss Life AG issue of undated subordinated debt
Slide 22: Summary of the key terms and conditions (1)
Summary of the key terms and conditions (1) Issued Securities Secured Notes issued by Demeter Investments B.V. and secured by the Loan Notes Loan Notes Issuer Swiss Life AG (Loan Notes are guaranteed on a subordinated basis by Swiss Life Holding AG) Currency / Size EUR Benchmark Expected Rating BBB+
Slide 23: Structural comparison to other instruments
Structural comparison to other instruments Issuer Swiss Life through Demeter Swiss Life Swiss Life through ELM Swiss Re through ELM Zurich Ins. through Aquarius Issue Date [ ] 2015 22-Oct-2012 12-Apr-2007 2-Apr-2015 25-Feb-2013 Amount EUR [ ] CHF 300m EUR 700m EUR 750m EUR 1bn (incl. tap) Issue rati
Slide 24: Agenda
Agenda Swiss Life at a glance Proven resilience of business model Credit considerations Proposed transaction Appendix 24 | Swiss Life AG issue of undated subordinated debt
Slide 25: Majority of Swiss Life 2015 targets achieved one year in advance
Majority of Swiss Life 2015 targets achieved one year in advance Strategic thrust Target Status • New business margin (NBM): • NBM at 1.8% as per FY 2014 >1.5% 2 Offering • New business shift: ~85% of NBP • 79% of NBP from risk, modern and from risk, modern and modern- modern-traditional products as
Slide 26: Outstanding financing instruments
Outstanding financing instruments Type Oustanding Issuer Issue Call Interest Regulatory amount year /maturity capital Subordinated EUR 192 m Swiss Life AG 1999 2019/perp 6mE + 2.05% Hybrid loan Hybrid bond EUR 342.5 m Swiss Life AG 2005 2015/perp 5% Hybrid bond EUR 590 m Swiss Life AG 2007 2017/
Slide 27: Legal structure of Swiss Life Group (simplified)
Legal structure of Swiss Life Group (simplified) Swiss Life Holding AG (Guarantor) Swiss Life Deutschland Swiss Life Schweiz Holding Swiss Life International Swiss Life Investment Swiss Life AG AG Holding AG Holding GmbH Management Holding AG (Issuer) Swiss Life AG, German Branch Swiss Life Select S
Slide 28: Summary of pass through structure (1)
Summary of pass through structure (1) Demeter repackaging structure enables international investors to receive coupon payments without incurring Swiss withholding tax of 35%, which would apply if Notes were issued directly by Swiss Life. The Demeter repackaging structure is Swiss tax compliant Commo
Slide 29: 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 30: 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 Half-year results 2015
Slide 31: The future starts here.
é Swiss Life The future starts here.