Swiss Life Holding Ag · SIX:SLHN
Swiss Life — H1 2004 Earnings Presentation
63 slides from Swiss Life's earnings presentation, Sep 7, 2004
Slide 1: Results HY 2004 Investors' Presentation
Results HY 2004 Investors’ Presentation Zurich, 7 September 2004
Slide 2: Swiss Life - on track
Swiss Life - on track • Operational improvements • Increased profitability • Return to growth 2
Slide 3: Agenda
Agenda 1. Overview Rolf Dörig 2. Results Bruno Pfister 3. Outlook Rolf Dörig 3
Slide 4: Swiss Life - on track
Swiss Life - on track • Operational improvements - Net result: MCHF 398 - Operating result: MCHF 605 • Increased profitability - Earnings per share (EPS): CHF 15.9 - New business margin: 7.4% • Return to growth - Premiums and policyholder deposits: +1.1% - Switzerland: +3.5% 4
Slide 5: Financials
Financials MCHF (IFRS basis) HY 2004 HY 2003 Premiums and PH deposits (gross) 11 965 11 836 Gross written premiums 9 844 9 943 Financial result 2 726 2 916 Operating result 605 207 Net result 398 66 Earnings per share (EPS) CHF 15.9 CHF 2.7 Return on equity (ROE)(1) 15.3% 5.3% Return on equity (ROE)
Slide 6: Business review
Business review • Switzerland – improving operationally in a challenging environment - Premium income up 3.5% - Profitability to be further improved • European core markets – exploiting growth opportunities - France: premium income up 16% - Germany: premium income up 8% • Banca del Gottardo – focusi
Slide 7: Agenda
Agenda 1. Overview Rolf Dörig 2. Results Bruno Pfister 3. Outlook Rolf Dörig 7
Slide 8: Profit and loss highlights
Profit and loss highlights MCHF (IFRS basis) HY 2004 HY 2003 Change Premiums and PH deposits (gross) 11 965 11 836 +1.1% · Gross written premiums 9 844 9 943 · Policyholder deposits 2 121 1 893 Financial result 2 726 2 916 -6.5% Benefits paid and changes in reserves -9 072 -10 140 -10.5% PH bonuses
Slide 9: One-off effect due to legal quote and changes in conversion rate in Switzerland
One-off effect due to legal quote and changes in conversion rate in Switzerland MCHF (IFRS basis) • Due to different asset valuation between IFRS and statutory accounting standards, unrealised gains/losses had to be allocated to policyholders • Release of reserves due to reduction of conversion rate
Slide 10: Segment results
Segment results MCHF (IFRS basis) HY 2004 HY 2003 Life Core(1) 327 93 Life Non-Core(1) 140 80 Non-Life 5 17 Private Banking 73 -66 (2) Investment Management 47 60 Other 13 23 Operating result 605 207 (1) Including one-off effect due to introduction of legal quote and changes in conversion rate in HY
Slide 11: Life Core: Operating result by country
Life Core: Operating result by country MCHF (IFRS basis) HY 2004 HY 2003 Switzerland(1) 177 -104 France 28 93 Germany 39 58 Netherlands 70 39 Belgium/Luxembourg 13 7 Life Core 327 93 (1) Including in HY 2004 MCHF 148 due to introduction of legal quote and changes in conversion rate 11
Slide 12: Life Core: Premiums and policyholder deposits
Life Core: Premiums and policyholder deposits MCHF (IFRS basis) 5 078 (+3.5%) Switzerland 4 907 Belgium/Lux. Netherlands 3% 2 837 (+16.4%) 8% France 2 437 Germany 9% 884 Germany 818 (+8.1%) Switzerland 51% 830 Netherlands (-51.2%) 1 701 France 349 29% Belgium/Lux. 275 (+26.9%) 9 972 (-1.6%) Total as
Slide 13: Life Core: Premiums overview Switzerland
Life Core: Premiums overview Switzerland MCHF (IFRS basis); excluding La Suisse HY 2004 HY 2003 Change Total Switzerland(1) 5 078 4 907 +3.5% · Single premiums 2 182 2 077 +5.1% · Periodic premiums 2 850 2 792 +2.1% Total group life 4 269 4 013 +6.4% · Single premiums 1 901 1 715 +10.8% · Periodic p
Slide 14: Life Core: Premiums and policyholder deposits
Life Core: Premiums and policyholder deposits MCHF (IFRS basis) 5 078 (+3.5%) Switzerland 4 907 Belgium/Lux. Netherlands 3% 2 837 (+16.4%) 8% France 2 437 Germany 9% 884 Germany 818 (+8.1%) Switzerland 51% 830 Netherlands (-51.2%) 1 701 France 349 29% Belgium/Lux. 275 (+26.9%) 9 972 (-1.6%) Total as
Slide 15: Balance sheet highlights
Balance sheet highlights MCHF (IFRS basis) HY 2004 FY 2003 Change Mathematical reserves 136 919 136 214 +0.5% · Insurance reserves 103 588 103 862 · Policyholder deposits 25 511 23 678 · Separate accounts 7 820 8 674 Shareholders’ equity 5 822 4 964 +17.3% · Shareholders’ equity(1) 5 677 4 367 · Rev
Slide 16: Shareholders' equity up 17%
Shareholders' equity up 17% MCHF (IFRS basis) 917 -442 398 5 822 -10 +858 (+17.3%) 4 964 -5 4 959 31.12.2003 Impact 31.12.2003 Rights issue, Change in Change in Net profit 30.06.2004 SOP 03-1 adjusted convertible unrealised FX translation HY 2004(2) bond (net) gains/ differences, losses (1) share pr
Slide 17: Operational performance creating shareholders' equity
Operational performance creating shareholders' equity MCHF (IFRS basis) 858 -902 113 352 394 -111 Change in Rights issue, One-off Impact Impact of Operational shareholders' convertible P&L items, of bond other asset performance equity as bond, FX goodwill markets classes and stated translation amort
Slide 18: Investment return on insurance portfolio
Investment return on insurance portfolio MCHF (IFRS basis), not annualised Direct return of 2.1% Total return of 1.5%(1) Bonds 1 736 2.2% 1 010 1.3% Equities 107 1.4% 299 3.9% Private Equity 0.0% -8 -1.9% Hedge Funds 57 1.6% 141 3.9% Real Estate 330 3.0% 288 2.6% Mortgages 222 2.2% 217 2.1% Loans 13
Slide 19: Embedded value for Swiss Life Group
Embedded value for Swiss Life Group MCHF (statutory basis) HY 2004 FY 2003 Rentenanstalt embedded value HY 2004(1) 6 199 5 832 Swiss Life Holding owns 99.83% 99.72% Swiss Life Holding share of embedded value 6 188 5 816 ANAV of Swiss Life Holding(2) 1 970 1 095 Embedded value for Swiss Life Group 8
Slide 20: Embedded value breakdown
Embedded value breakdown MCHF (statutory basis); Swiss Life Group Switzerland Europe Total 0.3% 9.7% 18 % 8 158 1 970 6 911 1 095 4 348 4 333 4 848 4 771 3 061 2 788 1 970 1 095 2 483 2 174 -1 221 -1305 -1 144 -1 129 HY04 2003 HY04 2003 HY04 2003 HY04 2003 HY04 2003 PVFP ANAV Lock-in Overhead and el
Slide 21: Embedded value: Analysis of change
Embedded value: Analysis of change MCHF (statutory basis); Swiss Life Group Swiss Life Group EV 01.01.2004(1) 6 911 Unwind 2004 +211 Actual investment return 2004(2) +33 Future investment return(2) +342 Persistency -172 Reserves strengthening -135 Value of new business 2004 +31 Capital increase +860
Slide 22: Value of new business
Value of new business MCHF (statutory basis) Switzerland(1) France(2) Germany Netherlands Belgium(3) Sum 30 19 12 11 6 7 7 3 3 4 2 -6 HY04 HY03 HY04 HY03 HY04 HY03 HY04 HY03 HY04HY03 HY04HY03 APE(4) 134 111 50 76 108 91 101 163 11 20 403 461 (1) Including La Suisse Vie (2) Without Swiss Life Assuran
Slide 23: EU Group solvency
EU Group solvency EU Group solvency(1) 144% 134% 30.06.04 25.06.1905 31.12.03 26.06.1905 (1) Including Banca del Gottardo; according to methodology applied by the Swiss regulator; using methodology applied by the French regulator: 142% (30.06.04) and 132% (31.12.03) 23
Slide 24: Agenda
Agenda 1. Overview Rolf Dörig 2. Results Bruno Pfister 3. Outlook Rolf Dörig 24
Slide 25: Keeping up the momentum…
Keeping up the momentum… • Switzerland - Complete implementation of new BVG product offering - Continue with product innovations in individual life business • Europe - Exploit growth opportunities due to changing regulatory and competitive environment - Continued focus on profitability 25
Slide 26: …to ensure sustainable performance
…to ensure sustainable performance • 1% above market growth • Dividend payments • ROE of 10% 26
Slide 27: Supplementary information
fiz SwissLife Supplementary information
Slide 28: Supplementary information
Supplementary information 1. Profit and Loss 2. Balance Sheet 3. Embedded Value 4. Contact details 28
Slide 29: Foreign exchange rates and interest rates
Foreign exchange rates and interest rates Foreign exchange rates 30.06.2004 31.12.03 30.06.03 1.1.-31.12.03 1.1.-30.06.03 EUR 1.524 1.558 1.552 1.521 1.492 GBP 2.272 2.201 2.243 2.198 2.177 USD 1.253 1.236 1.359 1.345 1.352 Interest rates 30.06.2004 31.12.03 30.06.03 (1) CHF 2.878 2.717 2.432 (1) EU
Slide 30: Group: Premiums and policyholder deposits (comparable basis)
Group: Premiums and policyholder deposits (comparable basis) MCHF (IFRS basis) HY 2004 HY 2003 Change Premiums and PH deposits 11 965 11 836 1.1% La Suisse (Institution supplétive) -525 -130 Netherlands (HBG)(1) -856 Swiss Life Spain (divested) -97 Currency effect(2) 258 Premiums and PH deposits 11
Slide 31: Life Core: Premiums and policyholder deposits (comparable basis)
Life Core: Premiums and policyholder deposits (comparable basis) MCHF (IFRS basis) HY 2004 HY 2003 Change Premiums and PH deposits 9 972 10 133 -1.6% Netherlands (HBG)(1) -856 Currency effect(2) 214 Premiums and PH deposits 9 972 9 491 +5.1% (comparable basis) (1) Elimination of MEUR 574 single prem
Slide 32: Financial result
Financial result MCHF (IFRS basis) HY 2004 HY 2003 Change Investment income, net 2 698 2 690 +0.3% Realised and unrealised gains/losses(1) 183 505 -63.8% Trading income, net(2) -155 -279 Financial result 2 726 2 916 -6.5% (1) Includes foreign currency gains and losses on investments recorded in the
Slide 33: Banca del Gottardo: Overview of key financials
Banca del Gottardo: Overview of key financials MCHF (statutory basis) HY 2004 HY 2003 Change Results from interest activities 74 75 -1.0% Results from commission and service act. 129 115 +12.1% Results from trading operations 33 45 -28.0% Other 4 5 -7.3 Net revenues 240 240 Personnel expenses -95 -9
Slide 34: Banca del Gottardo: Key ratios
Banca del Gottardo: Key ratios MCHF (statutory basis) HY 2004 2003(1) Change Return on equity 9.4% 9.8% -40 bps Cost/income ratio 63.5% 62.7% +80 bps Risk-weighted assets 6 604 6 788 -2.7% Shareholders' equity 928 910 +2.0% BIS ratio (Tier 1) 13.3% 12.6% +70 bps BIS ratio (Tier 2) 14.4% 13.7% +70 bp
Slide 35: Adjusted operating expenses
Adjusted operating expenses MCHF (IFRS basis) HY 2004 HY 2003 Change Operating expenses 1 294 1 447 -10.6% DAC and commissions -364 -348 Loss adjustment expenses 85 83 Currency effects 22 Restructuring cost / divestment costs -9 Adjustment STG, SL Spain, Oudart -37 Change in reserves for employee be
Slide 36: Supplementary information
Supplementary information 1. Profit and Loss 2. Balance Sheet 3. Embedded Value 4. Contact details 36
Slide 37: Life Core: Technical reserves by core countries
Life Core: Technical reserves by core countries MCHF (IFRS basis) 55 001 (-0.7%) Switzerland 55 409 Belgium/Lux. 6 415 (-0.3%) 2% Netherlands France 6 435 14% 16 662 (-0.3%) Germany 16 709 Switzerland Germany 59% 18% 12 827 (-1.7%) Netherlands 13 043 1 978 France (+1.7%) Belgium/Lux. 1 945 7% (1) 92
Slide 38: Assets under management
Assets under management MCHF (IFRS basis) HY 2004 FY 2003 Change Total on-B/S-assets(1) 149 582 149 476 +0.1% minus · Assets of unit-linked business -2 220 -3 250 -31.7% · Externally managed alternative -6 495 -6 312 +2.9% investments and other assets Total on-B/S-assets managed in-house 140 867 139
Slide 39: Asset allocation insurance portfolio
Asset allocation insurance portfolio MCHF (IFRS basis) 129 056 129 306 Equities & equity funds 0.4% 5.7% 6.0% 0.3% Private equity Hedge funds 2.8% 8.4% 8.4% 2.7% Real estate 7.7% 8.0% Mortgages Loans 5.3% 5.8% Bonds 61.8% 61.6% Cash 3.6% 3.7% Other invested assets 4.3% 3.5% HY 2004 FY 2003 Net equit
Slide 40: Bond portfolio: ratings
Bond portfolio: ratings Insurance portfolio (IFRS basis) Investments: MCHF 79 700 Breakdown by rating BBB Not rated A 2% 1% 9% Government 35% AA 14% Sovereign AAA 8% 31% 40
Slide 41: Bond portfolio: currency exposure
Bond portfolio: currency exposure Insurance portfolio (IFRS basis) Investments: MCHF 79 700 Before hedges USD GBP 4% 3% CHF EUR 33% 60% 41
Slide 42: Bond portfolio: duration
Bond portfolio: duration Group(1) Market value Effective duration CHF 35.4% 7.9 EUR 60.4% 8.1 GBP 0.7% 6.5 USD 3.5% 9.1 Other 0.0% 0.5 Average 100% 8.0 (1) Including SL Zurich, SL Germany, SL France SSV, SL Netherlands, La Suisse Vie, SL Belgium 42
Slide 43: Equity portfolio: currency exposure
Equity portfolio: currency exposure Insurance portfolio (IFRS basis) Investments: MCHF 7 400 Before hedges GBP JPY 5% 3% USD 10% CHF EUR 21% 61% 43
Slide 44: Loan and mortgages portfolio
Loan and mortgages portfolio Insurance portfolio; (IFRS basis) Investments: MCHF 16 800 Breakdown by type Policyholder loans 6% Other loans Mortgages 35% 59% 44
Slide 45: Real estate portfolio
Real estate portfolio Insurance portfolio, excl. La Suisse; (IFRS basis) Investments: MCHF 9 900 Breakdown by country Breakdown by type Belgium Netherlands Germany 2% 1% Centres 5% 11% France Residential 7% 49% Mixed 17% Switzerland Commercial 85% 23% 45
Slide 46: Hedge funds portfolio
Hedge funds portfolio Insurance portfolio (IFRS basis) Investments: MCHF 3 625 Breakdown by style Fund of funds Various 8% 1% Equity hedged Managed futures 18% 11% Leveraged finance Relative value manager 18% 13% Global macro Event driven 15% 16% 46
Slide 47: Private equity portfolio
Private equity portfolio Group (not consolidated)(1) Investments: MCHF 450 Direct investments Fund of funds 5% 8% Balanced Buyout 15% 40% Venture 32% Open commitments: MCHF 380 (1) Including SL Zurich, La Suisse, SL Germany and SL Belgium 47
Slide 48: Currency exposure
Currency exposure Group (not consolidated) Net: 1.25% of total insurance portfolio assets Other 16 million MUSD 75 1% 5% MGBP 594 MEUR 923 37% 57% Net currency exposure MCHF 1 608 Hedged MCHF 16 260 Gross exposure MCHF 17 868 48
Slide 49: Currency hedging ratios
Currency hedging ratios Group (not consolidated) Net 8% 11% currency 28% exposure 100% 100% 92% 89% 72% Currency hedged No curr. No curr. risk risk Equities & Private Hedge Loans Real estate Bonds Other equity funds equity funds invested assets 49
Slide 50: Goodwill development
Goodwill development MCHF (IFRS basis) 1 353 -42 -208 -59 1 044 -21 -18 1 005 Goodwill BdG STG Other Goodwill BdG Other Goodwill 31.12.02 31.12.03 30.06.04 Goodwill in % of: SH equity: 32.4% 21.0% 17.3% Core capital: 17.9% 11.8% 10.6% 50
Slide 51: Allocation of unrealised gains on bonds
Allocation of unrealised gains on bonds MCHF (IFRS basis) 1 898 1 472 -64 -102 -4 256 Unrealised Deferred Shadow Deferred Minority Allocated to gains on policyholder DAC taxes interests shareholders’ bonds dividends adjustment equity 51
Slide 52: Statutory solvency for Rentenanstalt
Statutory solvency for Rentenanstalt MCHF (statutory basis) Solvency capital Statutory solvency Rentenanstalt stat. equity capital 1 947 Intangibles -73 5 997 148% Hybrid capital 1 284 Additional Zillmerisation +419 4 052 Unrealised capital gains +1 886 Unattributed surplus +534 Solvency capital 5 9
Slide 53: Supplementary information
Supplementary information 1. Profit and Loss 2. Balance Sheet 3. Embedded Value 4. Contact details 53
Slide 54: Implementation of embedded value at Swiss Life
Implementation of embedded value at Swiss Life Swiss Life • ANAV and PVFP have been calculated UK for more than 95% of the mathematical Swiss Life B reserves Swiss Life NL • For other life insurance entities only Swiss Life D the NAV has been included Swiss Life CH • The banking and non-life insuran
Slide 55: Key assumptions for embedded value calculation
Key assumptions for embedded value calculation HY 2004 FY 2003 • Weighted new money CH EU CH EU return based on asset allocation Risk discount rate 7.0% 7.9% 7.0% 7.9% Equity return 5.0% 6.0% 5.0% 6.0% • Long-term bond return from 2009 onwards CH 3.9% Bond return 3.2% 4.7% 3.0% 4.5% EU 5.2% Real est
Slide 56: Breakdown of adjusted net asset value (ANAV)
Breakdown of adjusted net asset value (ANAV) MCHF (statutory basis); Rentenanstalt HY 2004 FY 2003 Change Statutory equity of Rentenanstalt(1) 1 977 1 919 +3.0% Unrealised capital gains after tax & 593 508 +16.7% policyholder participation Statutory book value of life subsidiaries -768 -834 -7.9% Ne
Slide 57: Sensitivities of embedded value
Sensitivities of embedded value MCHF (statutory basis); Swiss Life Group Switzerland Europe Total Swiss Life Group EV HY 2004 (base) 4 348 3 061 8 158(1) D Risk discount rate -50 bps +212 +117 +329 D Investment returns +50 bps +343 +328 +671 D Investment returns -50 bps -656 -309 -965 D Bond returns
Slide 58: Asset allocation by region
Asset allocation by region Assumptions HY 2004 FY 2003 CH EU CH EU Cash and cash equivalents 1% 1% 1% 3% Bonds and loans 61% 73% 61% 75% Mortages 10% 11% 10% 5% Real estate 14% 4% 14% 3% Equities 3% 5% 3% 8% Participations 4% 3% 4% 6% Alternative investments 7% 3% 7% 0% 58
Slide 59: Average technical interest rate of 3.15%
Average technical interest rate of 3.15% In million CHF / EUR / USD / GBP (statutory basis) Technical interest rate CHF EUR USD GBP 0% - < 2% 1 653 1 175 2 155 2% - < 3% 25 957 1 316 0 0 3% - < 4% 33 369 13 644 2 83 4% - < 5% 915 15 536 410 627 5% - < 6% 165 353 46 0 6% - < 7.5% 0 34 28 0 Total rese
Slide 60: 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 61: Supplementary information
Supplementary information 1. Profit and Loss 2. Balance Sheet 3. Embedded Value 4. Contact details 61
Slide 62: Contact the Investor Relations Team
Contact the Investor Relations Team Peter Huber Tel. +41 (43) 284 41 99 Head Investor Relations E-mail: peter.huber@swisslife.ch Karin Schack Tel. +41 (43) 284 49 19 Manager Investor Relations E-mail: karin.schack@swisslife.ch As of 1 October 2004: Iris Welten Tel. +41 (43) 284 67 67 Head Investor R
Slide 63: SwissLife
te SwissLife Prepared for the future.