Swiss Life Holding Ag · SIX:SLHN
Swiss Life — FY2015 Earnings Presentation
72 slides from Swiss Life's earnings presentation, Mar 1, 2016
Slide 1: Full-year results 2015 Investors' presentation
Full-year results 2015 Investors’ presentation 01.03.2016
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 2 | Investors' presentation | Full-year results 2015
Slide 3: Swiss Life delivers strong FY 2015 results and strengthens the quality of earnings
Swiss Life delivers strong FY 2015 results and strengthens the quality of earnings … +7% +36% 818 878 342 252 Net profit Net profit Fee result1) and RoE 9.7% RoE 9.6% (CHF m) (CHF m, %) FY 2014 FY 2015 FY 2014 FY 2015 +4% 4% 380 395 Interest rate 2% Risk result1) margin (CHF m) (in % of 0% technical
Slide 4: … while continuing with its sound capital management
… while continuing with its sound capital management +5% -0% 268 1 077 1 072 Operating 255 Operating expense expense, insurance VNB VNB segments 1.8% 1.7% efficiency 0.62% 0.60% (CHF m, %) NBM Efficiency ratio ratio (CHF m, %) FY 2014 FY 2015 FY 2014 FY 2015 Payout May 2015: 25% 31% ratio S&P rating
Slide 5: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 5 | Investors' presentation | Full-year results 2015
Slide 6: Key figures FY 2015 result
Key figures FY 2015 result FY 2015 vs. FY 2014 Net profit increased by 7% to CHF 878 m Adjusted profit from operations improved by 17% to CHF 1 323 m Premiums grew 5% in local currency to CHF 18.9 bn Fee and commission income up by 8% in local currency to CHF 1 301 m Fee result increased t
Slide 7: Selected P&L figures
Selected P&L figures CHF million (IFRS basis) FY 2014 FY 2015 Gross written premiums, fees and deposits received 19 102 18 853 Fee and commission income 1 317 1 301 Net investment result insurance portfolio for own risk 5 136 5 208 Net insurance benefits and claims -15 218 -15 516 Policyholder parti
Slide 8: Profit from operations excluding major one-off effects
Profit from operations excluding major one-off effects CHF million (IFRS basis) +17% 1 329 +11 1 323 1 169 +13 1 182 1 129 -17 -53 Profit Restruc- Profit FX Profit Profit Restruc- One-off Profit from turing from translation from from turing FX gain from operations costs operations effect operations
Slide 9: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, MCEV) FY 2014 FY 2015 Change GWP incl. PHD 10 038 10 534 +5% • GL: +6% (market +1%); strong new business, low lapses • IL: -1% (market -2%); strong periodic premiums Fee and commission 182 199 +10% • Increased revenues from owned IFA, real estate
Slide 10: Business review France
Business review France EUR million (IFRS basis, MCEV) FY 2014 FY 2015 Change GWP incl. PHD 4 167 4 244 +2% • Slightly below market (+4%) with higher quality • Life: +5% (market +5%); UL share of 45% (market 20%) • Health & protection: -4% (market +3%); individual protection +7% (market +4%) Fee and
Slide 11: Business review Germany
Business review Germany EUR million (IFRS basis, MCEV) FY 2014 FY 2015 Change GWP incl. PHD 1 330 1 309 -2% • Focus on profit before growth; higher contribution from modern-traditional and disability products partly offset lower traditional premiums (market -1%) Fee and commission 349 341 -2% • Incr
Slide 12: Business review International
Business review International EUR million (IFRS basis, MCEV) FY 2014 FY 2015 Change GWP incl. PHD 2 015 2 295 +14% • Growth in business with private clients Fee and commission 198 210 +6% • Increase of commission income at owned IFAs and income1) higher policy fees from business with private clients
Slide 13: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) FY 2014 FY 2015 Change Total income 459 591 +29% • PAM: Increased share of real estate, higher average – PAM 235 267 +14% net investments – TPAM 225 324 +44% • TPAM: Strong new business production and Corpus Sireo (2014: Q
Slide 14: Expense development
Expense development CHF million (IFRS basis) FY 2014 FY 2015 Change Total operating expense 2 735 2 649 -3% Commissions and DAC amortisation -1 264 -1 205 Operating expense (before FX) 1 470 1 444 -2% Restructuring costs and one-offs -49 -36 Scope changes -35 -95 FX translation effect -90 Operating
Slide 15: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk FY 2014 FY 2015 Direct investment income 4 467 4 311 Direct investment income in % 3.3% 3.0% Expense -278 -298 Net capital gains/losses on investments and impairments1) 947 1 196 Net investment result 5 136 5 208 Net invest
Slide 16: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) Equities & equity funds 149 957 146 413 Alternative investments 2.7% 3.9% Real estate 0.7% 13.8% 15.8% 0.9% Mortgages 4.4% 8.5% 5.2% Loans 6.6% Government & supranational bonds 30.7% 31.7% 67.9% 66.3% Corporate b
Slide 17: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2014 31.12.2015 currency Insurance reserves 156 684 154 953 -1% +3% Policyholder participation liabilities 12 152 10 065 -14% Insurance reserves w/o PHP liabilities 144 531 144 887 +0% +4% Insurance liabilities 106 136 108 157 +5
Slide 18: Shareholders' equity
Shareholders’ equity CHF million (IFRS basis) 12 755 +872 12 177 -5% -927 -291 -207 -25 31.12.2014 Change in Change in Distribution Change in Profit 31.12.2015 unrealised foreign from capital treasury shares attributable gains/losses currency contribution and share to share- net translation reserve
Slide 19: Swiss Life 2015: Financial targets achieved
Swiss Life 2015: Financial targets achieved Strategic thrust Target Status • New business margin: >1.5% 1.7% Offering • New business shift: ~85% of 84% 2 NBP from risk, modern and modern-traditional products • Fee and commission income: +22% Customer 3 Distribution Profit by source: FY 2015 Increase
Slide 20: Profit by source driven by improved savings and fee result
Quality of earnings Profit by source driven by improved and earnings growth savings and fee result CHF million (IFRS basis) FY 2014 FY 2015 adjusted adjusted Savings result 656 55% 773 56% Risk result 380 32% 395 28% Fee result 252 21% 342 25% Cost result -109 -9% -132 -9% - Thereof admin cost resul
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 (IFRS basis, in %) 5.0 4.8% 4.5 3.9% 4.1% 3.8% 3.9% 3.8% 4.0 3.7% 3.8% 3.8% 3.7% 3.5 3.5% 3.4% 3.3% 3.0 3.0% 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 31.12.2009 31.12.2010 31.12.20
Slide 22: Average technical interest rate decreased further
Quality of earnings Average technical interest rate and earnings growth decreased further • FX translation effect -1 bps Statutory basis • Reserve strengthening -9 bps • Mandatory group life CH 1) -8 bps • Non-mandatory group life CH2) -7 bps • Business mix -4 bps 2.60% 2.55% Total -29 bps 2.35% 2.1
Slide 23: Disciplined ALM has safeguarded the interest rate margin
Quality of earnings Disciplined ALM has safeguarded the and earnings growth interest rate margin Aggregated view, IFRS basis, in % of technical reserves 4.0 Interest rate margin remained stable Net investment as a result of disciplined ALM yield • Long asset duration supports yield excl. net gains/
Slide 24: Strong fee and commission income
Quality of earnings Strong fee and commission income and earnings growth Fee and commission income1), CHF million -1% +8% LC Local 1 317 1 301 currency • Corpus Sireo and strong net new assets in TPAM; Swiss Life Asset 450 560 +24% +29% increased share of real estate and higher average Managers asse
Slide 25: Value of new business improved
Quality of earnings Value of new business improved and earnings growth Value of new business (VNB), CHF million Economic variances • Challenging capital market environment with substantially lower interest rates in Switzerland 268 255 +5 +28 Volume, business mix and pricing -13 • Continued focus on
Slide 26: Implemented Swiss Life 2015 cost savings of CHF 188 m
Implemented Swiss Life 2015 cost savings Operational efficiency of CHF 188 m CHF million (project view), vs. cost base FY 2011 Operating cost savings1) Operating cost savings clearly exceeding target range 11 • CH: Staff reduction, mainly in IT; facility and infrastructure 31 optimisations, lower pr
Slide 27: Further improved efficiency ratios
Further improved efficiency ratios Operational efficiency Adjusted IFRS basis Adjusted operating expense in % of average technical reserves (excl. deferred PHP) Owned IFAs expense excluded Change vs. FY 2012 FY 2013 FY 2014 FY 2015 FY 2014 FY 2015 P Switzerland 0.54% 0.51% 0.46% 0.44% -2 bps France
Slide 28: Maintained well-diversified capital structure with strong interest coverage
Maintained well-diversified capital Capital, cash and dividend structure with strong interest coverage Capital structure1), IFRS basis 3 798 Senior 0-5% 7% 423 Senior bonds Carrying value (CHF m) Hybrid 25% 22% and interest coverage 459 Convertible bonds Shareholders’ 2 916 Hybrid debt 70-75% 71% eq
Slide 29: Increased cash remittance to Holding and dividend
Increased cash remittance to Holding Capital, cash and dividend and dividend Cash remittance to Holding Dividend per share (CHF million, cash remittance in % of previous (CHF, payout ratio in % of IFRS net profit) year’s IFRS net profit) 38% 50% 25% 31% 411 8.5 298 6.5 FY 2014 FY 2015 FY 2014 FY 201
Slide 30: 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 31: Supplementary information
Full-year results 2015 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 32 | Investors' presentation | Full-year results 2015
Slide 33: Net profit excluding major one-off effects
Net profit excluding major one-off effects CHF million (IFRS basis) +9% 878 +8 870 818 +10 828 -17 796 -33 Net Restruc- Net FX translation Net Net Restruc- One-off Net profit turing profit excl. effect profit profit turing FX gain profit costs one-offs comparable costs excl. basis one-offs FY 2014 F
Slide 34: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 10 534 Switzerland +5% +5% 10 038 4 536 France -11% +2% 5 069 1 399 Germany -14% -2% 1 618 2 453 International +0% +13% 2 451 18 853 Total Group1) -1% +5% 19 102 FY 2015 FY 2014 1) Total includes Other and intersegme
Slide 35: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) FY 2014 FY 2015 Change Total life GWP incl. PHD 10 038 10 534 +5% Single premiums 5 724 6 021 +5% Periodic premiums 4 314 4 513 +5% Group life 8 411 8 921 +6% Single premiums 5 049 5 391 +7% Periodic premiums 3 362 3 530 +5% Individual life 1
Slide 36: Switzerland: Statutory distribution ratio in BVG business
Switzerland: Statutory distribution ratio in BVG business CHF million (statutory basis) FY 2012 FY 2013 FY 2014 FY 2015 Gross revenue 2 718 100% 2 387 100% 2 477 100% 2 532 100% Total insurance benefits 2 537 93.3% 2 206 92.4% 2 294 92.6% 2 353 92.9% paid (incl. bonuses) Operating income 181 181 183
Slide 37: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk FY 2015 Direct Net Impair- Gains and losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 2 999 643 31 675 3 673 Equities 161 -16 -101 16 -85 60 Loa
Slide 38: Profit from operations
Profit from operations CHF million (IFRS basis), segment results (reported vs. adjusted) FY 2014 FY 2015 Change Segments reported1) adjusted2) reported adjusted2) reported adjusted Switzerland 669 669 734 736 +10% +10% France 222 195 234 234 +5% +20% Germany 97 90 129 132 +33% +47% International 37
Slide 39: Profit by source
Profit by source FY 2015 adjusted1) Group2) thereof Switzerland France Germany International CHF m CHF m EUR m EUR m EUR m 1 393 736 219 124 40 8 Savings 773 163 6 86 499 Risk3) 395 26 29 82 267 Fee 342 37 43 Other & eliminations 14 -4 -3 -27 -69 -26 Costs -132 Thereof admin cost 115 91 14 11 -2 res
Slide 40: Profit by source: Structure and scope
Profit by source: Structure and scope + Income from investments1) + Income from savings premiums – Expense related to savings process Savings result – Technical interest2) = Investment spread – Policyholder participation = Net savings result Non-Life + Income from risk premiums Group Life – Expense
Slide 41: New business mix
New business mix New business production (NBP) 25% 27% 24% 25% ~30% 34% 33% 39% 35% ~35% Risk, health and P&C 12% 18% 21% 26% ~20% Modern Modern-traditional 24% 20% 21% 16% ~15% Traditional FY 2012 FY 2013 FY 2014 FY 2015 Target 2015 Shift excl. traditional 85% 88% 90% 92% ~90% CH GL 41 | Investors'
Slide 42: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 42 | Investors' presentation | Full-year results 2015
Slide 43: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as of 31.12.2015 9 975 -5 903 -179 -895 0 2 998 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds1) bonuses adjustment equity 1) Including cash
Slide 44: Return on equity
Return on equity CHF million (IFRS basis) FY 2014 FY 2015 FY 2015 RoE calculation Net profit FY 2015 Shareholders’ equity 12 755 12 177 872 (shareholder part) Unrealised gains/losses on bonds Average adjusted -3 957 -2 998 8 989 allocated to shareholders’ equity shareholders’ equity Adjusted shareho
Slide 45: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF million (IFRS basis) Local currency 83 856 Switzerland +5% +5% 79 527 International 14% 24 463 France -3% +8% Germany 25 174 11% 16 633 58% Germany -8% +2% 17% 18 125 France 20 039 Switzerland International -8% -2% 21 805 144 88
Slide 46: Insurance reserves roll-forward 2015 excluding policyholder participation liabilities
Insurance reserves roll-forward 2015 excluding policyholder participation liabilities CHF billion (IFRS basis) +4% +17.2 144.5 +2.4 +0.1 144.9 139.0 -5.6 -13.8 01.01.2015 FX translation 01.01.2015 Premiums/ Withdrawals/ Interest Market 31.12.2015 effect excl. FX deposits benefits accrued movements r
Slide 47: 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 31.12.2015 0.9 Non-life 44.1 Investment contracts & PH deposits Europe 26.8 Total Group Individual 155.0 20.2 Traditional business Annuitised & other Gua
Slide 48: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as of 01.01.2016 CHF EUR USD GBP Total reserves 80 838 28 901 153 11 Average technical interest rate 1.36% 2.35% 2.38% 2.84% Overall: 1.64% (01.01.2015: 1.93%) 48 | Investors' presentation | Full-year results 2015
Slide 49: Total weighted duration gap
Total weighted duration gap In % 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 49 | Investors' presentation | Full-year results 2015
Slide 50: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 50 | Investors' presentation | Full-year results 2015
Slide 51: 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 FY 2014 FY 2015 Change Total beginning of period 155.1 183.0 +27.9 Net new assets PAM 2.3 0.9 TPAM 4.5 7.2 Market performance 19.5 0.9 FX translation effects -1.0 -6.3 Sc
Slide 52: Assets under management and administration
Assets under management and administration CHF billion, as of 31.12.2015 Real estate under AuM administration1) Total assets under management and Total 185.3 28.6 administration CHF 213.9 bn Real estate AuM 36.7 Total real estate under management and Corpus Sireo 2.3 12.0 administration Livit 16.6 C
Slide 53: 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 146 413 5% BBB 1% AAA 17% 33% 19% A 25% AA Breakdown by classification Bonds 66.3% Corporate 52% 48% Governments & supranationals bonds1) 31.12.2015 1) Including senior
Slide 54: Bond portfolio: Exposure to energy and metals & mining
Bond portfolio: Exposure to energy and metals & mining Insurance portfolio for own risk (fair value basis) CHF million 146 413 Exposure to energy and Breakdown Breakdown Breakdown metals & mining by classification by currency by rating Energy, 5% metals & AA 19% mining USD 64% A 26% Corporate 79% bo
Slide 55: 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 146 413 A 7% 4% 1% 47% AAA 41% AA Governments & 31.7% Breakdown by currency supranationals GBP CAD USD 2% EUR 14% 5% 27% 52% CHF 31.12.2015 55
Slide 56: Government and supranational bond portfolio: Country split
Government and supranational bond portfolio: Country split Government and supranational bond portfolio (fair value basis), as of 31.12.2015, 31.7% of insurance portfolio for own risk (CHF 46.4 bn) % of total government and supranational bond portfolio CHF million1) Switzerland 38% France 10% FY 2014
Slide 57: 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 146 413 AAA 8% 19% 2% BBB 30% 10% AA 31% A Breakdown by currency Other 4% USD EUR 31% 37% Corporate 34.6% bonds1) CHF 28% 31.12.2015 1) Including senior secured loa
Slide 58: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio1) (fair value basis), as of 31.12.2015, 34.6% of insurance portfolio for own risk (CHF 50.7 bn) Breakdown by rating Breakdown by industry BB BBB 2% % of total corporate bond portfolio 17% Banks 36% 44% AAA Other financials 6% Utilitie
Slide 59: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 146 413 45% Switzerland Mortgages 5.2% Germany 53% Loans 6.6% 2% France Breakdown by type Policyholder loans Other loans 1% 6% 44% Mortgages Purchased 49% loans 31.12.2015 59 | Investors'
Slide 60: Real estate portfolio
Real estate portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 146 413 France 8% 9% Real estate 15.8% 83% Switzerland Breakdown by type Commercial Residential 35% 37% 28% 31.12.2015 Mixed-use 60 | Investors' presentation | Full-year results 2015
Slide 61: 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 146 413 France 5% Equities & 3.9% 1% equity funds 0.9% 22% Alternative Investment 72% Switzerland Net equity exposure 1.9% Breakdown b
Slide 62: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 31.12.14 30.06.15 31.12.15 01.01.-31.12.14 01.01.-31.12.15 EUR 1.2026 1.0430 1.0863 1.2163 1.0689 GBP 1.5485 1.4706 1.4729 1.5082 1.4718 USD 0.9939 0.9352 0.9997 0.9155 0.9630 Interest rates (10-year government bond) 31.12.14 30.06.15 31.12.15
Slide 63: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 63 | Investors' presentation | Full-year results 2015
Slide 64: Group MCEV
Group MCEV CHF million, MCEV 12 901 12 509 • Strong operating earnings of CHF 1.2 bn from covered and non-covered business VIF 7 315 -4% 7 050 • Adverse currency translation effect of Covered CHF -0.5 bn Covered business • Value of covered business reduced by business 10 564 CHF -0.9 bn due to chall
Slide 65: MCEV covered business
MCEV covered business CHF million Operating earnings of 9% +426 11 071 +268 +266 10 564 -227 -870 -370 Volume growth and Excess returns over Revised surplus sharing, maintained margin reference rate and favourable biometric and discipline; challenging release from risk (TVOG persistency experience;
Slide 66: Value of new business
Value of new business CHF million, MCEV basis Switzerland France Germany International Total 268 255 155 144 76 62 26 33 12 15 PVNBP 6 939 8 408 4 326 4 006 938 936 2 211 2 293 14 414 15 643 APE 487 622 522 491 72 66 223 230 1 304 1 408 NBM1) in % PVNBP 2.2% 1.7% 1.4% 1.9% 1.2% 1.6% 1.2% 1.4% 1.8% 1
Slide 67: Value of new business
Value of new business CHF million, MCEV basis, as per FY 2015 Switzerland France Germany International Total Value of new business 144 76 15 33 268 New business strain -100 -51 -6 -8 -165 VNB before new business strain 244 127 21 41 433 Annual premiums 360 285 54 7 706 Single premiums 2 622 2 056 12
Slide 68: Economic assumptions
Economic assumptions MCEV basis, as per FY 2015 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 -0.70% -0.64% -0.31% 0.25% 0.56% 0.88% -0.1% -0.1% -0.2% 0.6% 0.8% 0.7% Eurozone -0.06% -0.03% 0.33% 1.00%
Slide 69: 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 70: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 70 | Investors' presentation | Full-year results 2015
Slide 71: 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 Annual Report 2015 22 M
Slide 72: The future starts here.
é SwissLife The future starts here.