Swiss Life Holding Ag · SIX:SLHN
Swiss Life — H1 2012 Earnings Presentation
63 slides from Swiss Life's earnings presentation, Aug 17, 2012
Slide 1: Half-year results 2012 Investors' presentation
Half-year results 2012 Investors’ presentation Zurich, 17 August 2012
Slide 2: Agenda
Agenda Overview Bruno Pfister Financial results and Thomas Buess MILESTONE Wrap-up Bruno Pfister Half-year results 2012: Investors' presentation 2
Slide 3: Highlights HY 2012 results
Highlights HY 2012 results HY 2012 vs HY 2011 Profit from operations improved 17% to CHF 528 m Adjusted net profit increased by 15% to CHF 369 m 1) Premium growth of 1% in local currency Stable direct yield of 1.8% and strong net investment yield of 2.7% (both non-annualised) Cost base und
Slide 4: Key figures HY 2012 results
Key figures HY 2012 results HY 2012 vs HY 2011 Profit from operations CHF 528 m +17% Net profit (adjusted) CHF 369 m +15% New business margin (% PVNBP) 1.0% -0.6 ppts GWP incl. PHD (in local currency) CHF 9.8 bn +1% Shareholders’ equity CHF 9.8 bn +8%1) Return on equity (annualised) 7.7% -1.0 ppts G
Slide 5: Agenda
Agenda Overview Bruno Pfister Financial results and Thomas Buess MILESTONE Wrap-up Bruno Pfister Half-year results 2012: Investors' presentation 5
Slide 6: Income statement
Income statement CHF million (IFRS basis) HY 2011 HY 2012 Gross written premiums, fees and deposits received 10 104 1) 9 837 Commission income 405 368 Financial result for own risk 2 185 3 358 Net investment result insurance portfolio for own risk 2 083 3 236 Net insurance benefits and claims -7 667
Slide 7: Net profit after tax excluding major one-off effects
Net profit after tax excluding major one-off effects CHF million (IFRS basis) +15% +13 403 -89 361 +8 369 327 322 -5 Net Impairment One-off Net FX effect Net Net Legal Net profit MLP tax profit 11 to 12 profit profit cases profit effect excl. comparable AWD excl. one-offs basis one-offs HY 2011 HY 2
Slide 8: Business review Insurance Switzerland
Business review Insurance Switzerland CHF million (IFRS basis, MCEV) HY 2011 HY 2012 Change GWP incl. PHD 5 6411) 5 741 +2% GL: Lower single premiums com- pensated by higher periodic premiums IL: +11%, growth mainly from modern single premium products Operating expense -178 -181 +2% Investment
Slide 9: Business review Insurance France
Business review Insurance France EUR million (IFRS basis, MCEV) HY 2011 HY 2012 Change GWP incl. PHD 1 828 1 762 -4% Overall, better than market (-9%) - Life: -10% (market -15%); high UL share of 25% (market 13%) - Health & disability: +3% (market +5%) Operating expense -139 -138 -1% Improved ef
Slide 10: Business review Insurance Germany
Business review Insurance Germany EUR million (IFRS basis, MCEV) HY 2011 HY 2012 Change GWP incl. PHD 686 668 -3% Driven by single premium products, periodic premiums +4% Operating expense -53 -54 +1% Improved efficiency ratios adjusted1) Segment result 31 36 +16% Higher financial result follo
Slide 11: Business review Insurance International
Business review Insurance International CHF million (IFRS basis, MCEV) HY 2011 HY 2012 Change GWP incl. PHD 1 157 1 211 +5% Higher volumes in HNWI and Corporate segments Operating expense -40 -41 +3% Improved efficiency ratios adjusted1) Segment result 0 -3 n.a. Negative FX effects on revenues
Slide 12: Business review Investment Management
Business review Investment Management CHF million (IFRS basis; AuM fair value basis) HY 2011 HY 2012 Change Total income 139 149 +7% Increased assets under management Operating expense -69 -73 +6% Expansion of TPAM business adjusted1) Segment result 57 61 +7% Cost/income ratio further improved
Slide 13: Business review AWD
Business review AWD AWD, stand-alone, EUR million (IFRS basis) HY 2011 HY 2012 Change Revenues 265.5 232.1 -13% Lower sales performance Germany 170.1 134.1 particularly in Germany Recurring commissions above Austria & CEE 34.8 30.3 prior year United Kingdom 25.4 26.8 Changed product mix; more
Slide 14: Expense development
Expense development CHF million (IFRS basis) HY 2011 HY 2012 Change Total operating expense 1 412 1 340 -5% Commissions and DAC amortisation -725 -646 adjusted Operating expense (before FX) 687 694 +1% Restructuring costs and one-offs -5 -25 Scope changes 2 - Currency effect -20 - Operating expense
Slide 15: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk Yields not annualised HY 2011 HY 2012 Direct investment income 2 055 2 182 Direct investment income in % 1.8% 1.8% Expense -115 -114 Net capital gains/losses on investments and impairments1) 143 1 168 Net investment result
Slide 16: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk Equities & equity funds 2.2% 118 269 123 411 1.6% Alternative investments 0.6% 0.6% Real estate 13.1% 12.9% Mortgages 4.6% 4.5% Loans 8.8% 8.1% Governments & supranationals 32.2% 34.2% 70.3% 73.2% Corporates 38.1%
Slide 17: Government and supranational bond portfolio: Split by country
Government and supranational bond portfolio: Split by country Government and supranational bond portfolio (fair value basis), as per HY 2012, 34.2% of insurance portfolio (CHF 42.2 bn) % of total government and supranational bond portfolio Switzerland 26% In CHF million1) France 8% FY 2011 HY 2012 U
Slide 18: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2011 30.06.2012 Change currency Insurance reserves 128 089 133 386 +4% +5% Insurance liabilities 93 365 95 167 Investment contracts 11 358 11 448 Unit-linked contracts 18 216 19 230 Policyholder participation liabilities 5 150 7
Slide 19: Shareholders' equity and group solvency
Shareholders’ equity and group solvency CHF million (IFRS basis) Shareholders’ equity 9 844 +8% +4 +360 -34 +531 -144 9 127 Group solvency At 224% from 213% as per FY 2011 187% without unrealised gains/ losses on bonds (FY 2011: 183%) 31.12.2011 Change in Change in Distribution Change in Profit
Slide 20: Value of new business
Value of new business CHF million Switzerland France Germany International Total 104 59 45 28 25 20 20 11 8 5 PVNBP 2 264 2 771 2 313 1 755 762 479 1 025 1 096 6 364 6 102 New business margin 1.2 0.7 1.9 1.5 2.6 1.0 1.1 0.7 1.6 1.0 (% PVNBP) HY 2011 HY 2012 1) 1) HY 2012 value of new business based
Slide 21: Margin pressure due to adverse capital market environment
1. New business profitability Margin pressure due to adverse capital market environment New business margin development (VNB as % of PVNBP) Economic variances 1.6% Lower interest rates in relevant currencies had an adverse effect on new business margins 1.2% -0.2% -0.1% +0.1% 1.0% Volume, business
Slide 22: Share of risk and modern down, driven by lower risk volumes
1. New business profitability Share of risk and modern down, driven by lower risk volumes in France and Germany New business product mix (based on new business production) Reasons for development in the 1st half of 2012 30% 30% 35% < 30% CH: Increased demand for traditional periodic Traditional 46
Slide 23: Lower sales through AWD distribution channel due to re-pricing measures
2. Distribution Lower sales through AWD distribution channel due to re-pricing measures Swiss Life in Germany – AWD channel NBP1) in EUR m 212 193 160 Lower NBP caused by refined underwriting criteria in price sensitive product segments 193 176 91 127 of AWD introduced in late 2011 36 80 Aggress
Slide 24: Cost discipline and growth led to improved efficiency ratios
3. Operational excellence Cost discipline and growth led to improved efficiency ratios in HY 2012 Adjusted IFRS basis; in local currency Operating expense in % of average technical reserves (excl. deferred PHP) HY 2011 and HY 2012 not annualised FY2008 FY2011 HY2011 HY2012 Insurance Switzerland 0.81
Slide 25: Balance sheet further de-risked in view of euro crisis
4. 4.Balance Balancesheet sheet&&in-force in-forcebusiness business Balance sheet further de-risked in view of euro crisis Proactive risk management: - Swiss Life’s continuous management of its sovereign exposure to the euro-zone has led to a reduction of its European peripheral sovereign debt to
Slide 26: Changes in sovereign bond portfolio
4. 4.Balance Balancesheet sheet&&in-force in-forcebusiness business Changes in sovereign bond portfolio Insurance portfolio: Government and supranational bonds (fair value basis) FY 2011 HY 2012 Breakdown by currency 38.1 bn 42.2 bn FY 2011 Switzerland 25% 26% CAD Other France 16% 8% GBP 7% USD 7% G
Slide 27: Reserve strengthening and change in business mix lowers average technical interest rate
4. 4.Balance Balancesheet sheet&&in-force in-forcebusiness business Reserve strengthening and change in business mix lowers average technical interest rate Statutory basis Reserve strengthening ~8 bps 3.00% Change in business mix ~3 bps 2.90% Total 11 bps 2.66% 2.60% 2.55% 2.35% 2.24% 01.01.07 0
Slide 28: Swiss Life's response to the low interest rate environment
4. 5.Balance Disciplined sheet execution & in-force business Swiss Life’s response to the low interest rate environment Comprehensive set of measures implemented since December 2009: Measures Solid and proven ALM: Duration gap kept below Asset side 1 year and significantly reduced interest rate
Slide 29: Agenda
Agenda Overview Bruno Pfister Financial results and Thomas Buess MILESTONE Wrap-up Bruno Pfister Half-year results 2012: Investors' presentation 29
Slide 30: Closing remarks
Closing remarks New plan to be presented at Investors’ Day on 28 November 2012 Focus on diversifying profit sources by increasing share of fee and risk businesses Reinforce our customer centricity Provide comprehensive financial services Improve market management by better leveraging our d
Slide 31: Supplementary information
Half-year results 2012 Investors’ presentation Supplementary information
Slide 32: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2012: Investors' presentation 32
Slide 33: Premium growth
Premium growth GWP & PHD; CHF million (IFRS basis) Local currency 1) 5 741 Switzerland +2% +2% 5 641 2 123 France -9% -4% 2 324 805 Germany -8% -3% 872 1 211 International +5% +7% 1 157 9 837 Total 2) -1% +1% 9 889 HY 2012 HY 2011 1) Premiums in HY 2011 adjusted for the impact of CHF -215 m due to t
Slide 34: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 20111) HY 2012 Change Total life GWP incl. PHD 5 641 5 741 +2% Single premiums 2 587 2 603 +1% Periodic premiums 3 054 3 138 +3% Group life 4 927 4 950 +0% Single premiums 2 335 2 271 -3% Periodic premiums 2 592 2 679 +3% Individual life 7
Slide 35: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2012 Direct Net Impair- Gains & losses through income investment investment ments statement income result On On Net underlying derivatives Bonds 1 591 1 081 -1 1 080 2 671 Equities 21 -11 -31 -10 -41 -31 L
Slide 36: Operating result
Operating result Segment results; CHF million (IFRS basis) HY 2011 HY 2012 Insurance 404 461 of which - Switzerland 291 341 - France 74 80 - Germany 39 43 - International 0 -3 Investment Management 57 61 AWD 16 6 Other & eliminations -1 25 Unallocated corporate costs -24 -25 Profit from operations 4
Slide 37: Reconciliation AWD segment result to AWD EBIT
Reconciliation AWD segment result to AWD EBIT CHF million (IFRS basis) 16 -1 +11 6 AWD Amortisation Financial AWD segment customer result EBIT result relationship AWD HY 2012 2) HY 2012 asset1) HY 2012 1) Annual amortisation: EUR 18.0 m 2) AWD EBIT HY 2012: EUR 13.1 m Half-year results 2012: Investo
Slide 38: Profit from operations excluding major one-off effects
Profit from operations excluding major one-off effects CHF million (IFRS basis) +18% 528 +11 539 452 +13 465 458 -7 Profit Impairment Profit Fx Profit Profit Legal Profit from MLP from effect from from cases from operations operations 11 operations operations AWD operations excl. to comparable excl.
Slide 39: Change analysis of adjusted profit from operations
Change analysis of adjusted profit from operations Segment results adjusted1); CHF million (IFRS basis) HY 2011 HY 2012 Change adjusted adjusted Insurance business 398 464 +66 Switzerland 291 341 France 70 80 Germany 37 43 Fee business 72 75 +3 Investment Management 57 61 AWD 15 17 Insurance Interna
Slide 40: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2012: Investors' presentation 40
Slide 41: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds As per HY 2012; CHF million (IFRS basis) 5 628 -3 190 -111 -509 1 818 0 Unrealised Deferred Shadow DAC Deferred Non-controlling Allocated to gains/losses policyholder adjustment taxes interests shareholders’ bonuses on bonds equity Half-year results 201
Slide 42: Insurance reserves by country
Insurance reserves by country CHF million (IFRS basis) – comparable basis Local currency 76 620 Switzerland +5% +5% 72 826 International 21 480 +2% +4% France 13% 20 986 Germany 13% 58% 17 508 +1% +3% 16% Germany 17 269 France Switzerland 17 853 +5% +5% International 17 075 1) 133 386 +4% +5% Total
Slide 43: Swiss Life Group reserves subject to BVG minimum interest rates
Swiss Life Group reserves subject to BVG minimum interest rates Breakdown of insurance reserves (incl. unit-linked) as per 30.06.2012; CHF billion (IFRS basis) Non-life (1 billion) 36.7 Investment contracts & PH deposits Total Group Europe 133.4 23.7 Traditional Individual business 20.0 95.7 CH Rese
Slide 44: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis) CHF EUR USD GBP Total reserves 69 051 25 601 112 9 Average technical 2.03% 2.72% 3.16% 3.45% interest rate Overall: 2.24% (01.01.2012: 2.35%) Half-year results 2012: Investors' presentation 44
Slide 45: Group solvency
Group solvency Based on IFRS equity -2% 224%1) +11 ppts +5% +8% 213% +0% 31.12.2011 FX effect Result Change in Accrued 30.06.2012 revaluation dividend reserves and HY 2012 other effects 1) Group solvency excluding unrealised gains/losses on bonds: 187% (183% per FY11) Half-year results 2012: Investo
Slide 46: Group solvency
Group solvency CHF million (IFRS basis) 31.12.2011 30.06.2012 Available solvency margin IFRS equity (incl. minority interests) 9 162 9 878 Eligible part of hybrid capital1) 2 384 2 431 Unattributed surplus 750 686 Goodwill and other intangible assets -1 905 -1 888 DAC non-life -72 -60 Dividends and
Slide 47: Total weighted duration gap
Total weighted duration gap1) in % 0.9 0.6 0.6 0.5 0.5 0.4 31.12.2009 30.06.2010 31.12.2010 30.06.2011 31.12.2011 30.06.2012 1) 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 insurance liabilities
Slide 48: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2012: Investors' presentation 48
Slide 49: Business review Investment Management: Change analysis of assets under management
Business review Investment Management: Change analysis of assets under management CHF billion (fair value basis) Proprietary assets Third party assets AuM as of 117.7 16.5 01.01.12 Net new +2.8 +1.6 money Market +2.6 +0.5 movements FX -0.5 -0.1 AuM as of 122.6 18.5 30.06.12 Half-year results 2012: I
Slide 50: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio (fair value basis) Breakdown by rating Below BBB CHF million BBB 4% 123 411 17% AAA 35% 21% A 23% AA Breakdown by classification Bonds 73.2% Governments & 47% supranationals Corporate 53% 30.06.2012 Half-year results 2012: Investors' pre
Slide 51: Government and supranational bond portfolio: Ratings and currency
Government and supranational bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating Below BBB BBB A CHF million 1% 5% 123 411 5% AAA 54% AA 35% Governments & 34.2% supranationals Breakdown by currency CAD Other EUR GBP 8% 7% 1% 20% USD 23% 30.06.2012 41% CHF
Slide 52: Corporate bond portfolio: Ratings and currency
Corporate bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating Below BBB AAA 7% CHF million 18% 123 411 BBB 27% 13% AA 35% A Breakdown by currency Others 3% Corporate 39.0% USD bonds 31% EUR 42% 30.06.2012 CHF 24% Half-year results 2012: Investors' presenta
Slide 53: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio (fair value basis), as per HY 2012, 39% of insurance portfolio (CHF 48.1 bn) Breakdown by rating Below BBB BBB Breakdown by industry 8% 1% % of total corporate bond portfolio 47% AAA A 33% Banks 36% Other financials 4% Utilities 11% 1
Slide 54: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio (fair value basis) Breakdown by country CHF million Switzerland 123 411 37% 62% Mortgages 4.5% Germany 8.1% 1% Loans France Breakdown by type Policyholder loans Other loans 2% 6% Mortgages 36% Purchased loans 30.06.2012 56% Half-year results 2012: Inve
Slide 55: Real estate portfolio
Real estate portfolio Insurance portfolio (fair value basis) Breakdown by country Germany France 6% CHF million 11% 123 411 Real estate 12.9% 83% Switzerland Breakdown by type Centres Others 7% 2% Mixed Residential 23% 40% 30.06.2012 Commercial 28% Half-year results 2012: Investors' presentation 55
Slide 56: Equities and alternative investment portfolio: Gross exposure
Equities and alternative investment portfolio: Gross exposure Insurance portfolio (fair value basis) Breakdown by country Other 2% CHF million Germany Switzerland 123 411 25% 30% Equities & 1.6% equity funds x% 0.6% Alternative investment France 43% Net equity exposure 0.6% Breakdown by investment t
Slide 57: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.11 31.12.11 30.06.12 01.01.-30.06.11 01.01.-30.06.12 EUR 1.2217 1.2166 1.2011 1.2713 1.2053 GBP 1.3528 1.4559 1.4888 1.4634 1.4650 USD 0.8420 0.9388 0.9494 0.9051 0.9290 Interest rates1) 30.06.11 31.12.11 30.06.12 CHF 1.732 0.663 0.665 E
Slide 58: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2012: Investors' presentation 58
Slide 59: Value of new business
Value of new business As per HY 2012; CHF million (MCEV) Switzer- Interna- France Germany Total land tional Value of new business 20 25 5 8 59 New business strain -23 -25 -3 -3 -54 VNB before new business strain 44 50 7 11 113 Annual premiums 134 147 30 5 317 Single premiums 1 012 707 104 1 059 2 88
Slide 60: Economic assumptions
Economic assumptions As per HY 2012 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 0.09% 0.12% 0.37% 1.01% 1.30% 1.43% 0.0% 0.0% 0.5% 1.3% 1.1% 0.8% Euro-zone 0.85% 0.85% 1.31% 1.99% 2.28% 2.29% 0.8% 0.
Slide 61: 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 62: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2012: Investors' presentation 62
Slide 63: Contact details and financial calendar
Contact details and financial calendar Contact Robert Moser Phone +41 (43) 284 67 67 Head of Investor Relations E-mail robert.moser@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 13 November