Swiss Life Holding Ag · SIX:SLHN
Swiss Life — HY 2015 Earnings Presentation
63 slides from Swiss Life's earnings presentation, Aug 14, 2015
Slide 1: Half-year results 2015 Investors' presentation
Half-year results 2015 Investors' presentation 14.08.2015
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess Swiss Life 2015 2 | Investors' presentation | Half-year results 2015
Slide 3: Highlights HY 2015 results
Highlights HY 2015 results HY 2015 vs. HY 2014 Net profit increased by 1% to CHF 493 m Adjusted profit from operations improved by 7% to CHF 694 m Premiums grew 7% in local currency to CHF 11.0 bn Fee and commission income up by 15% in local currency to CHF 617 m Asset Managers’ external c
Slide 4: Key figures HY 2015 results
Key figures HY 2015 results HY 2015 vs. HY 2014 Net profit CHF 493 m +1% Adjusted profit from operations CHF 694 m +7% GWP incl. PHD (in local currency) CHF 11.0 bn +7% Fee and commission income (in local currency) CHF 617 m +15% New business margin (% PVNBP) 1.7% -0.7 ppts Shareholders’ equity CHF
Slide 5: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess Swiss Life 2015 5 | Investors' presentation | Half-year results 2015
Slide 6: Income statement
Income statement CHF million (IFRS basis) HY 2014 HY 2015 Gross written premiums, fees and deposits received 10 807 11 010 Commission income 435 477 Financial result for own risk 2 616 2 692 Net investment result insurance portfolio for own risk 2 473 2 812 Net insurance benefits and claims -8 849 -
Slide 7: Profit from operations excluding major one-off effects
Profit from operations excluding major one-off effects CHF million (IFRS basis) +7% 692 +2 694 677 +4 680 651 -30 Profit Restruc- Profit FX Profit Profit Restruc- Profit from turing from trans- from from turing from operations costs operations lation operations operations costs operations excl. effe
Slide 8: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, MCEV) HY 2014 HY 2015 Change GWP incl. PHD 6 599 7 040 +7% • GL: +7% (market +1%); strong new business, low lapses • IL: +7% (market +1%); strong new business Fee and commission 93 96 +4% • Increased revenues from pension consulting business, inco
Slide 9: Business review France
Business review France EUR million (IFRS basis, MCEV) HY 2014 HY 2015 Change GWP incl. PHD 1 982 2 050 +3% • Growth in line with market (+4%) with higher quality • Life: +8% (market +6%); increased UL share of 47% (market 20%) • Health & disability: -3% (market +1%); individual protection +6% (marke
Slide 10: Business review Germany
Business review Germany EUR million (IFRS basis, MCEV) HY 2014 HY 2015 Change GWP incl. PHD 641 604 -6% • Focus on profit before growth led to declining volumes of traditional single premium products, further repricings • Market +2% Fee and commission 149 159 +7% • Positive development of owned IFAs
Slide 11: Business review International
Business review International CHF million (IFRS basis, MCEV) HY 2014 HY 2015 Change GWP incl. PHD 1 038 1 191 +15% • Strong increase of HNWI business partly offset by the adverse FX translation effect Fee and commission 117 111 -5% • Positive contribution from owned IFAs and higher policy income1) f
Slide 12: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2014 HY 2015 Change Total income 187 263 +41% • Strong fee growth particularly with external customers – Insurance mandates 113 133 +18% mainly driven by first time inclusion of Corpus Sireo and higher fees from insuran
Slide 13: Expense development
Expense development CHF million (IFRS basis) HY 2014 HY 2015 Change Total operating expense 1 327 1 251 -6% Commissions and DAC amortisation -644 -583 Operating expense (before FX) 683 668 -2% Restructuring costs and one-offs -9 5 Scope changes 0 -48 FX translation effect -49 Operating expense adjus
Slide 14: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2014 HY 2015 Direct investment income 2 220 2 179 Direct investment income in % 1.7% 1.5% Expense -137 -149 Net capital gains/losses on investments and impairments1) 391 782 Net investment result 2 473 2 812 Net investme
Slide 15: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) Equities & equity funds 149 957 144 644 Alternative investments 2.7% 3.4% Real estate 0.7% 13.8% 15.0% 0.8% Mortgages 4.4% 4.9% Loans 8.5% 6.6% Government & supranational bonds 30.7% 31.9% 67.9% 67.8% Corporate b
Slide 16: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2014 30.06.2015 currency Insurance reserves 156 684 152 358 -3% +3% Policyholder participation liabilities 12 152 10 490 Insurance reserves w/o PH liabilities 144 531 141 868 -2% +4% Insurance liabilities 106 136 105 730 Investme
Slide 17: Shareholders' equity and Group solvency
Shareholders’ equity and Group solvency CHF million (IFRS basis) Shareholders’ equity 12 755 +490 11 691 -8% -939 -378 -207 -30 Group solvency • 252% (FY 2014: 269%) • 194% excl. unrealised gains/losses on bonds (FY 2014: 196%) 31.12.2014 Change in Change in Distribution Change in Profit 30.06.2015
Slide 18: Swiss Life 2015: Increase earnings and improve resilience through disciplined execution
Swiss Life 2015: Increase earnings and improve resilience through disciplined execution Strategic thrust Objective Target Focus own solutions • New business margin: >1.5% on profitable and • New business shift: ~85% of 2 Offering flexible products NBP from risk, modern and and expand modern-traditio
Slide 19: Ongoing expansion and improvement of our customer centricity activities
Ongoing expansion and improvement of 1. Customer promise our customer centricity activities Customer segmentations expanded according to the local strategic focus Customer e.g. Companies and entrepreneurs in France: Equity • Address the company needs as well as the private requirements of the compan
Slide 20: Continued pricing discipline and margin management
Continued pricing discipline and margin 2. Offering management New business margin development (VNB as % of PVNBP) 2.4 Economic variances • Overall negative impact due to capital market development 1.8 +0.4 1.7 1.5 Expense variances +0.0 • Continued positive administration cost -0.5 experience Prici
Slide 21: Product mix target achieved with 85% of non-traditional production
Product mix target achieved with 85% 2. Offering of non-traditional production New business production (NBP) Risk, health and P&C • Particularly impacted by negative FX translation effect 25% 24% 22% • FR: Lower sales of individual health in 30% ~30% anticipation of ANI • DE: Higher production with
Slide 22: Strong fee and commission income growth in all areas
Strong fee and commission income 3. Distribution growth in all areas Fee and commission income1), CHF million +5% +15% LC 617 Local 587 currency 259 • Strong net new assets in external customer 185 Swiss Life Asset +39% +44% business, higher average asset base in insurance Managers mandates and real
Slide 23: Implemented cost savings already exceeding 2015 target
Implemented cost savings already 4. Efficiency exceeding 2015 target CHF million (project view), vs. cost base FY 2011 Operating cost savings1) Operating cost savings exceeding target range 10 • CH: Staff reduction, mainly in IT; facility and 28 90-110 infrastructure optimisations; lower professiona
Slide 24: Further improved efficiency ratios
Further improved efficiency ratios 4. Efficiency Adjusted IFRS basis Adjusted operating expense in % of average technical reserves (excl. deferred PHP) Owned IFAs expense excluded HY 2014 HY 2015 FY 2012 FY 2013 FY 2014 FY 2015P not not annualised annualised Switzerland 0.54% 0.51% 0.47% 0.23% 0.21%
Slide 25: Continued strong returns in a low interest rate environment
Continued strong returns in a low interest 5. Financial strength rate environment Direct and net investment yield (IFRS basis, in %) 5.5 4.5 3.5 2.7% 2.4% 2.5 2.1% 2.1% 2.0% 1.9% 1.9% 1.8% 1.9% 1.7% 1.8% 1.9% 1.8% 1.5 1.7% 1.5% 1.0% 0.5 -0.5 30.06.2008 30.06.2009 30.06.2010 30.06.2011 30.06.2012 30.
Slide 26: Average technical interest rate further decreased
Average technical interest rate further 5. Financial strength decreased Statutory basis • FX translation effect -2 bps • Reserve strengthening -4 bps 2.90% • Business mix -2 bps 2.66% 2.60% Total -8 bps 2.55% 2.35% 2.12% 2.04% 1.93% 1.85% 01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.
Slide 27: Capital structure and debt maturity profile well balanced
Capital structure and debt maturity profile 5. Financial strength well balanced IFRS basis Capital structure1) 7% 7% 0-5% 21% 25% Senior 25% Hybrid • New hybrid bond issued in 72% 68% 70-75% SH equity 2) June 2015: EUR 750 m perpetual NC 10 with 4.375% coupon FY 2014 HY 2015 Target • Refinancing of
Slide 28: Vast majority of Swiss Life 2015 targets achieved in advance
Vast majority of Swiss Life 2015 targets Wrap-up achieved in advance Strategic thrust Target Status • New business margin: >1.5% 2 Offering • New business shift: ~85% of NBP from risk, modern and modern-traditional products • Fee and commission income: Profit by source: Customer 3 Distribution Incre
Slide 29: Supplementary information
Half-year results 2015 Investors’ presentation Supplementary information
Slide 30: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 30 | Investors' presentation | Half-year results 2015
Slide 31: Net profit excluding major one-off effects
Net profit excluding major one-off effects CHF million (IFRS basis) +5% 493 +2 495 487 +3 490 472 -18 Net Restruc- Net FX Net Net Restruc- Net profit turing profit trans- profit profit turing profit costs excl. lation comparable costs excl. one-offs effect basis one-offs HY 2014 HY 2015 31 | Investo
Slide 32: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 7 040 Switzerland +7% +7% 6 599 2 170 France -10% +3% 2 421 639 Germany -18% -6% 783 1 191 International +15% +31% 1 038 11 010 Total Group1) +2% +7% 10 807 HY 2015 HY 2014 1) Total includes Other and intersegment el
Slide 33: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 2014 HY 2015 Change Total life GWP incl. PHD 6 599 7 040 +7% Single premiums 3 413 3 759 +10% Periodic premiums 3 186 3 281 +3% Group life 5 862 6 255 +7% Single premiums 3 121 3 432 +10% Periodic premiums 2 741 2 823 +3% Individual life 7
Slide 34: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2015 Direct Net Impair- Gains and losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 1 464 4 358 25 383 1 851 Equities 121 -1 13 -22 -9 110 Loa
Slide 35: Profit from operations
Profit from operations CHF million (IFRS basis), segment results Segments HY 20141) HY 2015 Change Switzerland 414 400 -3% France 121 133 +10% Germany 52 53 +1% International 19 21 +13% Asset Managers 75 101 +36% Other & eliminations 22 13 -43% Unallocated corporate costs -27 -30 +13% Profit from op
Slide 36: Adjusted profit from operations
Adjusted profit from operations CHF million (IFRS basis), segment results adjusted Segments HY 20141) HY 2015 Change Switzerland 414 400 -3% France 105 133 +27% Germany 46 53 +16% International 17 21 +26% Asset Managers 73 101 +40% Other & eliminations 24 15 -39% Unallocated corporate costs -27 -30
Slide 37: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 37 | Investors' presentation | Half-year results 2015
Slide 38: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as per 30.06.2015 10 216 -6 032 -185 0 3 086 -913 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds1) bonuses adjustment equity 1) Including ca
Slide 39: Return on equity
Return on equity CHF million (IFRS basis) FY 2014 HY 2015 HY 2015 RoE calculation (annualised) Net profit HY 2015 Shareholders’ equity 12 755 11 691 490 (shareholder part) Unrealised gains/losses on bonds Average adjusted -3 957 -3 086 8 702 allocated to shareholders’ equity shareholders’ equity Adj
Slide 40: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF million (IFRS basis) Local currency 82 968 Switzerland +4% +4% 79 527 International 14% 22 692 France -10% +4% 25 174 Germany 11% 15 896 58% Germany -12% +1% 16% 18 125 France 20 408 Switzerland International -6% +3% 21 805 141
Slide 41: 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 per 30.06.2015 0.9 Non-life 42.9 Investment contracts & PH deposits Europe 25.8 Total Group Individual Reserve for unearned 152.4 20.2 premiums (1.0 billion
Slide 42: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as per 30.06.2015 CHF EUR USD GBP Total reserves 80 135 28 406 144 11 Average technical 1.65% 2.40% 2.39% 2.88% interest rate Overall: 1.85% (01.01.2015: 1.93%) 42 | Investors' presentation | Half-year results 2015
Slide 43: Group solvency
Group solvency Based on IFRS equity +10% 269% +3% -9% 252%1) -17 ppts -19% -2% 31.12.2014 FX translation Result Business Change in Dividend 30.06.2015 effect growth revaluation reserves and other effects 1) Group solvency excluding unrealised gains/losses on bonds: 194% (196% per FY14) 43 | Investor
Slide 44: Group solvency
Group solvency CHF million (IFRS basis) 31.12.2014 30.06.2015 Available solvency margin IFRS equity (incl. non-controlling interests) 12 831 11 767 Eligible part of hybrid capital1) 2 612 2 435 Unattributed surplus 829 755 Goodwill and other intangible assets -1 475 -1 354 DAC non-life -44 -37 Divid
Slide 45: Total weighted duration gap
Total weighted duration gap1) In % 0.9 0.7 0.6 0.6 0.6 0.5 0.5 0.5 0.4 0.4 31.12.2010 30.06.2011 31.12.2011 30.06.2012 31.12.2012 30.06.2013 31.12.2013 30.06.2014 31.12.2014 30.06.2015 1) Explains the linear change in risk-bearing capital due to a parallel shift of the underlying interest rate curve
Slide 46: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 46 | Investors' presentation | Half-year results 2015
Slide 47: 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 HY 2014 HY 2015 Change Total beginning of period 155.1 183.0 +27.9 Net new assets Insurance mandates 1.6 1.9 +0.3 External customer business 2.2 4.2 +2.0 Market performan
Slide 48: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio for own risk (fair value basis) Breakdown by rating CHF million 144 644 BB BBB 4% AAA 19% 29% 20% A 28% AA Breakdown by classification Bonds 67.8% Governments & 47% Corporate 53% supranationals bonds1) 30.06.2015 1) Including senior secu
Slide 49: 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 A 144 644 7% 4% AAA 42% 47% AA Governments & 31.9% supranationals Breakdown by currency CAD GBP EUR 4% 6% 22% USD 16% CHF 30.06.2015 52% 49 | Inve
Slide 50: Government and supranational bond portfolio: Country split
Government and supranational bond portfolio: Country split Government and supranational bond portfolio (fair value basis), as per 30.06.2015, 31.9% of insurance portfolio for own risk (CHF 46.1 bn) % of total government and supranational bond portfolio In CHF million1) Switzerland 39% France 10% FY
Slide 51: 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 144 644 AAA 7% 1% 18% BBB 32% 10% AA 32% A Breakdown by currency Other 4% EUR USD 35% Corporate 32% 35.9% bonds1) 29% 30.06.2015 CHF 1) Including senior secured loa
Slide 52: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio1) (fair value basis), as per 30.06.2015, 35.9% of insurance portfolio for own risk (CHF 51.9 bn) Breakdown by rating Breakdown by industry BB BBB % of total 1% corporate bond portfolio 15% Banks 36% 43% AAA Other financials 5% Utiliti
Slide 53: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 144 644 Switzerland 42% Germany 53% Mortgages 4.9% Loans 6.6% 5% France Breakdown by type Other loans Policyholder loans 1% 8% 43% Mortgages Purchased 48% loans 30.06.2015 53 | Investors'
Slide 54: Real estate portfolio
Real estate portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 144 644 France 7% 8% Real estate 15.0% 85% Switzerland Breakdown by type Commercial Residential 38% 37% 25% 30.06.2015 Mixed-use 54 | Investors' presentation | Half-year results 2015
Slide 55: 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 Germany CHF million 9% 144 644 France Equities & 3.4% equity funds 0.8% 24% Alternative Investment 67% Switzerland Net equity exposure 2.9% Breakdown by investment t
Slide 56: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.14 31.12.14 30.06.15 01.01.-30.06.14 01.01.-30.06.15 EUR 1.2145 1.2026 1.0430 1.2214 1.0583 GBP 1.5172 1.5485 1.4706 1.4870 1.4441 USD 0.8871 0.9939 0.9352 0.8909 0.9478 Interest rates1) 30.06.14 31.12.14 30.06.15 CHF 0.658 0.319 0.129 E
Slide 57: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 57 | Investors' presentation | Half-year results 2015
Slide 58: Value of new business
Value of new business CHF million (MCEV) Switzerland France Germany International Total 185 139 145 94 30 32 6 5 10 13 PVNBP 4 644 5 296 1 917 1 669 384 347 907 1 043 7 852 8 355 APE 327 423 222 203 31 27 93 104 673 757 NBM1) (in % PVNBP) 3.0% 1.8% 1.6% 1.9% 1.6% 1.6% 1.1% 1.3% 2.4% 1.7% (in % APE)
Slide 59: Value of new business
Value of new business CHF million (MCEV), as per HY 2015 Switzerland France Germany International Total Value of new business 94 32 5 13 145 New business strain -39 -23 -2 -4 -68 VNB before new business strain 133 55 8 17 213 Annual premiums 239 114 22 1 376 Single premiums 1 839 895 50 1 026 3 810
Slide 60: Economic assumptions
Economic assumptions As per HY 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 -0.81% -0.77% -0.27% 0.41% 0.70% 0.95% -0.5% -0.5% -0.5% 0.7% 0.7% 0.7% Euro-zone 0.07% 0.12% 0.50% 1.15% 1.50% 1.69% 1
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 62 | Investors' presentation | Half-year results 2015
Slide 63: 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 Interim statement Q3 20