Swiss Life Holding Ag · SIX:SLHN
Swiss Life — HY 2018 Earnings Presentation
68 slides from Swiss Life's earnings presentation, Aug 14, 2018
Slide 1: Half-year results 2018 Investor presentation
Half-year results 2018 Investor presentation 14 August 2018
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 2 | Investor presentation | Half-year results 2018
Slide 3: Swiss Life HY 2018: Strong set of results
Swiss Life HY 2018: Strong set of results +7% +6% 561 Net profit 248 524 233 Net profit, RoE 10.5% Fee result RoE 9.7% (CHF m) (CHF m, %) HY 2017 HY 2018 HY 2017 HY 2018 +20% 0% Operating 212 553 552 expense 177 Operating adjusted VNB, VNB expense, insurance 0.28% 0.27% NBM 2.6% 2.6% NBM efficiency
Slide 4: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 4 | Investor presentation | Half-year results 2018
Slide 5: Key figures HY 2018 results
Key figures HY 2018 results Net profit increased by 7% to CHF 561 m Adjusted profit from operations improved by 3% to CHF 808 m Fee and commission income grew by 10% in local currency to CHF 798 m Fee result increased by 6% to CHF 248 m (HY 17: CHF 233 m) Premiums increased by 4% in local
Slide 6: Selected P&L figures
Selected P&L figures CHF million (IFRS basis) HY 2017 HY 2018 Gross written premiums, fees and deposits received 9 982 10 741 Fee and commission income 681 798 Net investment result insurance portfolio for own risk 2 050 2 637 Net insurance benefits and claims -7 958 -8 138 Policyholder participatio
Slide 7: Profit from operations excluding major one-off effects
Profit from operations excluding major one-off effects CHF million (IFRS basis, adjusted) +3% 801 +2 +5 808 759 +3 761 +24 786 Profit Restruc- Profit FX Profit Profit Restruc- Programme Profit from turing from translation from from turing costs for new from operations costs operations effect operati
Slide 8: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, VNB) HY 2017 HY 2018 Change GWP incl. PHD 5 932 6 129 +3% • GL: +4% (market -1%); higher single premiums from existing clients and stable periodic premiums; growing semi-autonomous business • IL: -1% (market 0%); lower single premiums partly offse
Slide 9: Business review France
Business review France EUR million (IFRS basis, VNB) HY 2017 HY 2018 Change GWP incl. PHD 2 218 2 550 +15% • Life: +24% (market +6%); UL share of 54% (market 30%) • Health & protection: +1% (market +4%); individual protection +6% (market +4%) • Non-Life: stable (market +2%) Fee and commission 130 14
Slide 10: Business review Germany
Business review Germany EUR million (IFRS basis, VNB) HY 2017 HY 2018 Change GWP incl. PHD 577 589 +2% • Higher premiums with modern-traditional and disability products partly offset by lower traditional premiums (market +4%) Fee and commission 169 198 +17% • Strong contribution from owned IFAs due
Slide 11: Business review International
Business review International EUR million (IFRS basis, VNB) HY 2017 HY 2018 Change GWP incl. PHD 977 810 -17% • Higher premiums with corporate clients more than offset by lower single premiums with private clients Fee and commission 104 106 +2% • Higher commission income from owned IFAs partly incom
Slide 12: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2017 HY 2018 Change Commission and 316 326 +3% • PAM: Increased real estate assets and related other net income1) management fees PAM 144 151 +5% • TPAM: Higher recurring fees on growing AuM, lower TPAM1) 172 175 +2% tr
Slide 13: Expense development
Expense development CHF million (IFRS basis) HY 2017 HY 2018 Change Total operating expense 1 328 1 472 +11% Commissions and DAC amortisation -614 -697 Operating expense (before FX) 714 775 +9% Restructuring costs and one-offs -7 -10 Programme costs for new accounting standard -6 Scope changes -8 -2
Slide 14: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2017 HY 2018 Direct investment income 2 186 2 235 Direct investment income in % 1.5% 1.5% Expense -171 -176 Net capital gains/losses on investments and impairments1) 35 578 Net investment result 2 050 2 637 Net investmen
Slide 15: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) 160 753 159 717 Equities & equity funds Alternative investments 6.7% 8.1% 1.2% 1.2% Real estate 18.0% 18.7% Mortgages 5.3% Loans 5.4% 5.1% 4.7% Government & supranational bonds 30.3% 30.1% 61.6% 59.5% Corporate b
Slide 16: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF billion (IFRS basis) +2% +9.8 +1.0 160.4 158.6 157.9 -7.8 -0.5 -0.7 31.12.2017 FX translation 31.12.2017 Premiums/ Withdrawals/ Interest Market 30.06.2018 effect excl. FX deposits benefits accrued movements received incurred and
Slide 17: Shareholders’ equity
Shareholders’ equity CHF million (IFRS basis) 15 495 +558 14 722 -5% -826 -30 -460 -15 31.12.2017 Change in Change in Distribution Change in Profit 30.06.2018 unrealised foreign from capital treasury attributable gains/losses currency contribution shares to share- net translation reserve and share h
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 and earnings growth
Quality of earnings Strong fee and commission income and earnings growth Fee and commission income1), CHF million (IFRS basis) +17% +10% LC Local 798 currency 681 • Higher real estate assets and services in PAM; Swiss Life Asset 312 +6% +2% higher recurring fees offset by lower non-recurring Manager
Slide 20: Improved fee result and earnings growth
Quality of earnings Improved fee result and earnings growth Fee result, CHF million (IFRS basis) +6% 248 233 thereof thereof 119 Asset 129 Asset Managers Managers 129 Insurance 104 Insurance segments segments HY 20171) HY 2018 1) FX adjusted 20 | Investor presentation | Half-year results 2018
Slide 21: Resilient yields in the low interest rate environment
Quality of earnings Resilient yields in the low interest rate and earnings growth environment Direct and net investment yield (IFRS basis, in % not annualised) 4.0 3.5 3.0 2.7% 2.4% 2.5 1.9% 2.0% 2.1% 1.8% 1.9% 2.0 1.7% 1.7% 1.6% 1.5% 1.9% 1.5 1.8% 1.7% 1.5% 1.5% 1.4% 1.5% 1.0 0.5 0.0 -0.5 -1.0 30.0
Slide 22: Average technical interest rate further decreased
Quality of earnings Average technical interest rate and earnings growth further decreased Statutory basis 01.01.2018 – 30.06.2018 • FX translation effect 0 bps • Reserve strengthening -3 bps 2.60% • Business mix -1 bps 2.35% Total -4 bps 2.04% 1.64% 01.01.2010 – 30.06.2018: 1.37% 1.33% • FX translat
Slide 23: Continued margin management
Quality of earnings Continued margin management and earnings growth New business margin (NBM) development (VNB in % PVNBP) Economic variances 2.6% 2.5% 0.0% 0.1% 2.6% • Marginally higher interest rates -0.1% Volume, business mix and pricing variances Continued focus on margin management • CH: Slight
Slide 24: Implemented cost savings of CHF 99 m
Operational Implemented cost savings of CHF 99 m efficiency Non-variable cost savings1), gross CHF million (project view), vs. cost base FY 2014 7 99 ~ 100 14 • CH: Optimisation of business processes 35 • FR: Internalisation of resources, renegotiation of supplier contracts • DE: Reorganisation of s
Slide 25: Further improved efficiency ratios
Operational Further improved efficiency ratios efficiency Adjusted operating expense in % of average technical reserves, excl. deferred PHP (IFRS basis) Excluding expense from owned IFAs Change vs. FY 2016 FY 2017 HY 20172) HY 20182) HY 2017 Switzerland 0.43% 0.42% 0.20% 0.19% -1 bps France 1.27% 1.
Slide 26: Healthy solvency ratios
Capital, cash and Healthy solvency ratios dividend Swiss Life Group: Economic solvency SST sensitivities (as of 01.01.2018) (as of 01.01.2018) Real estate -10% -14 ppts SST internal model 170% approved by FINMA with conditions Credit spreads1) +100 bps -8 ppts Interest rates2) -50 bps -14 ppts Solve
Slide 27: Well-balanced capital structure
Capital, cash and Well-balanced capital structure dividend Capital structure (IFRS basis) 4 156 Senior1) 0-5% 3% 424 Senior Carrying value (CHF m) Hybrid 25% 23% 3 732 Hybrid Shareholders’ 74% 70-75% equity2) Reference level HY 2018 HY 2018 Maturities (senior) and next optional call dates (hybrid);
Slide 28: Increased cash remittance to Holding
Capital, cash and Increased cash remittance to Holding dividend Cash remittance to Holding (CHF million) Cumulative cash remittance to Holding (CHF million) 1 880 +11% 657 > CHF 1.5 bn 591 657 (2016-2018) 625 598 HY 2017 HY 2018 FY 2016 FY 2017 HY 2018 Cash Target 2018 remittance (2016-2018) 28 | In
Slide 29: Execution of Swiss Life 2018 well on track
Execution of Swiss Life 2018 well on track Swiss Life 2018 financial targets Current assessment • Fee result FY 2018: CHF 400-450 m 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 Ahead Operationa
Slide 30: Supplementary information
Half-year results 2018 Investor presentation Supplementary information
Slide 31: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 31 | Investor presentation | Half-year results 2018
Slide 32: Net profit
Net profit CHF million (IFRS basis, adjusted) +5% 561 +1 +5 567 524 +2 526 +16 542 Net Restruc- Net FX Net Net Restruc- Programme Net profit turing profit translation profit profit turing costs for new profit costs excl. effect comparable costs accounting excl. one-offs basis standard one-offs HY 20
Slide 33: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 6 129 Switzerland +3% +3% 5 932 2 986 France +25% +15% 2 389 689 Germany +11% +2% 621 948 International -10% -16% 1 052 10 741 Total1) +8% +4% 9 982 HY 2018 HY 2017 1) Total includes Other and intersegment eliminatio
Slide 34: Fee and commission income development
Fee and commission income development CHF million (IFRS basis) Local currency 125 Switzerland +9% +9% 115 165 France1) +18% +8% 140 232 Germany +27% +17% 182 124 International +10% +4% 112 Asset 312 Managers +6% +2% 295 798 Total1)2) +17% +10% 681 HY 2018 HY 2017 1) Incl. banking and Pôle Agami 2) T
Slide 35: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 2017 HY 2018 Change Total life GWP incl. PHD 5 932 6 129 +3% Single premiums 2 636 2 837 +8% Periodic premiums 3 296 3 292 0% Group life 5 240 5 443 +4% Single premiums 2 437 2 653 +9% Periodic premiums 2 803 2 790 0% Individual life 692 6
Slide 36: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2018 Direct Net Impair- Gains and losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 1 335 -33 301 44 345 1 646 Equities 245 -144 109 -35 210 L
Slide 37: Profit from operations
Profit from operations CHF million (IFRS basis), segment results (reported vs. adjusted) HY 2017 HY 2018 Change Segments reported adjusted1) reported adjusted1) reported adjusted Switzerland 424 424 439 442 +4% +4% France 145 158 152 152 +5% -4% Germany 70 77 93 93 +32% +22% International 25 26 34 3
Slide 38: New business mix
New business mix New business production (NBP) 25% 27% 24% 25% 27% 33% 36% 34% 33% 39% 35% 40% 30% 33% Risk, health and P&C 12% 18% 21% 26% Modern 28% 26% 25% Modern-traditional 24% 20% 21% 16% Traditional 9% 7% 6% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 HY 2018 Shift excl. traditional 85% 8
Slide 39: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 39 | Investor presentation | Half-year results 2018
Slide 40: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as of 30.06.2018 9 930 -5 937 -175 0 2 948 -870 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds1) bonuses adjustment equity 1) Including cash
Slide 41: Return on equity
Return on equity CHF million (IFRS basis) HY 2018 RoE calculation FY 2017 HY 2018 (annualised) Net profit HY 2018 Shareholders’ equity 15 495 14 722 558 (shareholder part) Unrealised gains/losses on bonds Average adjusted -3 727 -2 948 11 771 allocated to shareholders’ equity shareholders’ equity Ad
Slide 42: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF million (IFRS basis) Local currency 89 461 Switzerland +1% +1% 88 244 International 31 020 14% France +2% +3% Germany 30 452 11% 17 954 56% Germany 0% +1% 19% 18 026 France 21 963 International 0% +1% Switzerland 21 912 160 362
Slide 43: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2017 30.06.2018 currency Insurance reserves 171 649 173 119 +1% +1% Policyholder participation liabilities 13 050 12 756 -2% Insurance reserves w/o PHP liabilities 158 599 160 362 +1% +2% Insurance liabilities 116 844 118 866 +2%
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 30.06.2018 1.0 Non-life 52.4 Investment contracts & PH deposits Europe 30.6 Total Group Individual 173.1 19.8 Traditional business Annuitised Guaranteed
Slide 45: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as of 30.06.2018 CHF EUR USD GBP Total reserves 85 969 31 330 162 12 Average technical interest rate 0.99% 2.11% 2.17% 2.23% Overall: 1.33% (01.01.2018: 1.37%) 45 | Investor presentation | Half-year results 2018
Slide 46: Weighted duration gap
Weighted duration gap 0.9 0.9 0.9 0.8 0.7 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 31.12.2016 31.12.2017 30.06.2018 46 | Investor presentation | Half-year results 2018
Slide 47: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 47 | Investor presentation | Half-year results 2018
Slide 48: Change analysis of assets under management
Change analysis of assets under management CHF billion (fair value basis) Assets under management HY 2017 HY 2018 Change (bn) Total beginning of period 204.2 223.6 +19.4 Net new assets PAM -1.2 -1.4 TPAM 3.3 3.7 Market performance 2.1 0.0 FX translation effects 1.4 -0.8 Total end of period 209.8 225
Slide 49: Assets under management and administration
Assets under management and administration CHF billion, as of 30.06.2018 254.3 225.1 29.2 Total real estate under 83.6 management and administration 54.4 Real estate under management (both PAM & TPAM) Share of real estate Share of real estate Share of real estate by managing country by managing coun
Slide 50: TPAM: AuM and NNA
TPAM: AuM and NNA TPAM TPAM AuM: CHF 64.6 bn as of 30.06.2018 TPAM NNA: CHF 3.7 bn as of 30.06.2018 (fair value basis) (fair value basis) Breakdown by asset class Breakdown by asset class Infrastructure Equity 8% 3% 35% Real estate Real estate Bonds Balanced mandates 37% 37% Balanced mandates 19% Eq
Slide 51: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification PAM Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million BB B 159 717 4% BBB 2% 19% AAA 36% 15% A 24% AA Breakdown by classification Bonds 59.5% Corporate 49% 51% Governments & bonds1) supranationals 30.06.2018 1) Including se
Slide 52: Government & supranational bonds: Ratings and currency
Government & supranational bonds: PAM Ratings and currency Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million A BBB 159 717 6% 4% 51% AAA 39% AA Government & Breakdown by currency supranational 30.1% GBP CAD bonds USD 9% 2% 2% EUR 41% 46% 30.06.2018 CHF 52 | Investor
Slide 53: Government & supranational bonds: Country split
Government & supranational bonds: PAM Country split Government and supranational bond portfolio (fair value basis), as of 30.06.2018, 30.1% of insurance portfolio for own risk (CHF 48.1 bn) % of total government and supranational bond portfolio Switzerland 34% France 12% Netherlands 10% Germany 9% A
Slide 54: Corporate bond portfolio: Ratings and currency
Corporate bond portfolio: PAM Ratings and currency Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million B BB 159 717 AAA 8% 3% 20% 8% AA 36% BBB 25% A Breakdown by currency GBP Other 2% 1% USD EUR 32% 38% Corporate 29.4% bonds1) 27% 30.06.2018 CHF 1) Including senior s
Slide 55: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split PAM Corporate bond portfolio1) (fair value basis), as of 30.06.2018, 29.4% of insurance portfolio for own risk (CHF 47.0 bn) Breakdown by rating Breakdown by industry % of total BBB corporate bond portfolio 22% Banks 37% Other financials 5% 47% AAA Utilities
Slide 56: Loan and mortgage portfolio
Loan and mortgage portfolio PAM Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 159 717 Germany 49% 50% Switzerland Mortgages 5.4% Loans 4.7% 1% France Breakdown by type Other loans 2% Purchased loans 44% 54% Mortgages 30.06.2018 56 | Investor presentation | Half
Slide 57: Real estate portfolio
Real estate portfolio PAM Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 159 717 France 10% 10% Real estate 18.7% 80% Switzerland Breakdown by type Residential Commercial 34% 38% 28% Mixed-use 30.06.2018 57 | Investor presentation | Half-year results 201
Slide 58: Equities and alternative investments: Gross exposure
Equities and alternative investments: PAM Gross exposure Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 159 717 France 2% Equity & 8.1% 16% equity funds 1.2% Alternative Net equity exposure 3.6% investments 82% Switzerland Breakdown by investment type He
Slide 59: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.17 31.12.17 30.06.18 01.01. – 30.06.17 01.01. – 30.06.18 EUR 1.0946 1.1704 1.1583 1.0770 1.1707 GBP 1.2475 1.3167 1.3088 1.2522 1.3307 USD 0.9591 0.9736 0.9920 0.9944 0.9671 Interest rates (10-year government bond) 30.06.17 31.12.17 30.0
Slide 60: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 60 | Investor presentation | Half-year results 2018
Slide 61: Value of new business per segment
Value of new business per segment CHF million (MCEV basis) Switzerland France Germany International Total 212 177 105 91 70 53 20 26 13 12 PVNBP 3 206 3 978 2 181 2 753 619 690 921 850 6 928 8 270 APE 215 274 259 323 40 44 92 86 606 727 NBM in % PVNBP 2.9% 2.6% 2.4% 2.6% 3.3% 3.7% 1.4% 1.4% 2.6% 2.6
Slide 62: Value of new business
Value of new business CHF million (MCEV basis), as per HY 2018 Switzerland France Germany International Total Value of new business 105 70 26 12 212 New business strain -35 -40 -2 -3 -80 VNB before new business strain 139 111 28 15 292 Annual premiums 219 133 42 9 402 Single premiums 554 1 899 21 77
Slide 63: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 63 | Investor presentation | Half-year results 2018
Slide 64: Abbreviations
Abbreviations AM Business division Asset Managers IL Individual life APE New business annual premium equivalent IN Business division International AuM Assets under management m Million bn Billion MCEV Market consistent embedded value bps Basis points NBM New business margin BVG Swiss federal law on
Slide 65: Disclaimer and cautionary statement
Disclaimer and cautionary statement 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 facts stated herein ar
Slide 66: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Value of new business (VNB) Abbreviations Contact details and financial calendar 66 | Investor presentation | Half-year results 2018
Slide 67: 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 Olga Schmidtberger Phone +41 (43) 284 49 7
Slide 68: The future starts here.
é SwissLife The future starts here.