Swiss Life Holding Ag · SIX:SLHN

Swiss Life — H1 2013 Earnings Presentation

66 slides from Swiss Life's earnings presentation, Aug 14, 2013

  1. Slide 1: Half-year results 2013 Investors' presentation

    Half-year results 2013 Investors’ presentation Zurich, 14 August 2013

  2. Slide 2: Agenda

    Agenda  Overview Bruno Pfister Financial results and Thomas Buess Swiss Life 2015 Half-year results 2013: Investors' presentation 2

  3. Slide 3: Highlights HY 2013 results

    Highlights HY 2013 results HY 2013 vs. HY 2012  Adjusted profit from operations improved 16% to CHF 639 m  Net profit increased by 29% to CHF 472 m  Premium income growth of 6% in local currency to CHF 10.4 bn  Fee and commission income up by 5% to CHF 551 m Resilient direct investment yield of

  4. Slide 4: Key figures HY 2013 results

    Key figures HY 2013 results HY 2013 vs. HY 2012 Adjusted profit from operations CHF 639 m +16% Net profit CHF 472 m +29% New business margin (% PVNBP) 2.0% +1.0 ppts GWP incl. PHD (in local currency) CHF 10.4 bn +6% Fee and commission income CHF 551 m +5% Shareholders’ equity CHF 8.8 bn -14%1) Retur

  5. Slide 5: Agenda

    Agenda Overview Bruno Pfister  Financial results and Thomas Buess Swiss Life 2015 Half-year results 2013: Investors' presentation 5

  6. Slide 6: Income statement

    Income statement CHF million (IFRS basis) HY 2012 HY 2013 Gross written premiums, fees and deposits received 9 8371) 10 368 Commission income 368 393 Financial result for own risk 3 358 3 238 Net investment result insurance portfolio for own risk 3 237 2 994 Net insurance benefits and claims -7 641

  7. Slide 7: Profit from operations excluding major one-off effects

    Profit from operations excluding major one-off effects CHF million (IFRS basis) +16% 688 +11 639 -60 539 +11 550 +3 553 Profit Legal Profit FX Profit Profit Estimated Restruc- Profit from cases from effect from from IFRS 13 turing from operations AWD operations operations operations effect costs ope

  8. Slide 8: Business review Switzerland

    Business review Switzerland CHF million (IFRS basis, MCEV) HY 2012 HY 2013 Change GWP incl. PHD 5 6381) 5 917 +5%  GL: +8%; strong new business and lower lapses  IL: -16%; focus on profitability Fee and commission 82 80 -3%  New income sources largely income2) compensated lower policy fees  Reve

  9. Slide 9: Business review France

    Business review France EUR million (IFRS basis, MCEV) HY 2012 HY 2013 Change GWP incl. PHD 1 762 1 906 +8%  Both volumes and quality above personal insurance market (+7%)  Life: +16% (market +7%); very high UL share of 36% (market 17%)  Health & disability: +1% (market +5%) Fee and commission 91

  10. Slide 10: Business review Germany

    Business review Germany EUR million (IFRS basis, MCEV) HY 2012 HY 2013 Change GWP incl. PHD 668 697 +4%  Higher volumes in disability, care insurance and modern products Fee and commission 148 147 -1%  Higher fees from modern products income1) largely compensated lower revenues from owned IFAs Ope

  11. Slide 11: Business review International

    Business review International CHF million (IFRS basis, MCEV) HY 2012 HY 2013 Change GWP incl. PHD 1 211 1 295 +7%  Higher premiums in corporate business and stable HNWI volumes Fee and commission 113 115 +1%  Policy fees up mainly due to growth income1) of AuC of HNWI business  Revenues from owne

  12. Slide 12: Business review Asset Managers

    Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2012 HY 2013 Change Total income 150 172 +15%  Strong growth in all business areas – o/w SL Mandates 99 107 +9% – o/w AM Business 49 62 +27% – o/w other 2 2 n.m. Operating expense -73 -83 +13%  Investments in growth i

  13. Slide 13: Expense development

    Expense development CHF million (IFRS basis) HY 2012 HY 2013 Change Total operating expense 1 328 1 288 -3% Commissions and DAC amortisation -646 -600 Operating expense (before FX) 683 688 +1% Restructuring costs and one-offs -21 -24 Scope changes -5 - FX effect 7 - Operating expense adjusted 663 66

  14. Slide 14: Investment result

    Investment result CHF million (IFRS basis), insurance portfolio for own risk Yields not annualised HY 2012 HY 2013 Direct investment income 2 183 2 158 Direct investment income in % 1.8% 1.7% Expense -113 -128 Net capital gains/losses on investments and impairments1) 1 168 964 Net investment result

  15. Slide 15: Investment portfolio

    Investment portfolio CHF million (fair value basis), insurance portfolio for own risk Equities & equity funds 128 234 126 727 Alternative investments 1.7% 1.6% Real estate 0.6% 13.0% 14.0% 0.6% Mortgages 4.5% 4.7% Loans 8.0% 8.3% Government & 29.7% 29.5% supranational bonds 70.4% 70.0% Corporate bon

  16. Slide 16: Insurance reserves and borrowings

    Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2012 30.06.2013 Change currency Insurance reserves 137 736 140 375 +2% +1% Insurance liabilities 97 474 100 703 Investment contracts 11 553 12 230 Unit-linked contracts 20 570 21 430 Policyholder participation liabilities 8 139 6

  17. Slide 17: Shareholders' equity and group solvency

    Shareholders’ equity and group solvency CHF million (IFRS basis) Shareholders’ equity 10 122 +472 8 754 -14% +43 +4 -1 743 -144 Group solvency  At 205% from 239% as per FY 2012  188% excl. unrealised gains/losses on bonds (FY 2012: 186%) 31.12.2012 Change in Change in Distribution Change in Profit

  18. Slide 18: Value of new business

    Value of new business CHF million (MCEV) Switzerland France Germany International Total 141 89 59 32 20 25 12 8 9 5 PVNBP 2 771 3 719 1 755 1 792 479 525 1 096 1 097 6 102 7 133 New business margin 0.7% 2.4% 1.5% 1.8% 1.0% 2.3% 0.7% 0.8% 1.0% 2.0% (% PVNBP) HY 2012 HY 2013 Half-year results 2013: In

  19. Slide 19: 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: on profitable and >1.5% 2 Offering flexible products  New business shift: ~85% of and expand NBP from risk, modern and third-party off

  20. Slide 20: Customer centricity to increase customer loyalty and corporate profitability

    1. Customer promise Customer centricity to increase customer loyalty and corporate profitability Customer centricity framework implemented with clear focus points to cover all perspectives of customer A C D centricity External Internal perspective Direct Employee’s perspective A Know your customer C

  21. Slide 21: Higher new business margin due to favourable business mix and capital markets

    2. Offering Higher new business margin due to favourable business mix and capital markets New business margin development (VNB as % of PVNBP) +0.4% 2.0% Economic variances  Higher interest rates and lower interest rate +0.2% +0.0% volatilities with positive impact 1.5% 1.4% Expense variances  Expe

  22. Slide 22: New business mix close to 2015 target

    2. Offering New business mix close to 2015 target New business production (NBP) Risk, health and P&C  DE: Improved competitive position in disability insurance  FR: Lower sales of individual health in anticipation of 27% 25% 29% health reform 30% ~30% Modern  CH: De-emphasising of low profitable

  23. Slide 23: Asset Managers and unit-linked business driving fee and commission income growth

    3. Distribution Asset Managers and unit-linked business driving fee and commission income growth Fee and commission income1), CHF million +5%  New mandates and strong performance of Swiss Life Asset 551 Swiss Life Asset Managers business, higher real estate related income and 524 Managers average a

  24. Slide 24: About 40% of overall targeted cost savings implemented

    4. Efficiency About 40% of overall targeted cost savings implemented CHF million (project view), vs. cost base FY 2011 Operating cost savings1)  About 30% of planned 2015 operating cost savings 90-110 implemented by HY13  CH: Lower rental and maintenance costs, optimisation of marketing activities

  25. Slide 25: 75% of targeted operating cost savings implemented or in implementation

    4. Efficiency 75% of targeted operating cost savings implemented or in implementation Status of implementation of operating cost savings as per HY 2013 (project view) ~30% ~45% ~25% CHF 90-110 m Switzerland France Germany International Asset Managers Targeted cost Targeted cost savings Targeted cost

  26. Slide 26: Cost discipline and business growth led to further improved efficiency ratios

    4. Efficiency Cost discipline and business growth led to further improved efficiency ratios In local currency (adjusted IFRS basis) Adjusted operating expense in % of average technical reserves (excl. deferred PHP) HY 2012 and HY 2013 not annualised; owned IFAs expense excluded FY 2011 FY 2012 FY 20

  27. Slide 27: Continued strong returns in a low interest rate environment

    5. Financial strength Continued strong returns in a low interest rate environment Direct and net investment yield not annualised (IFRS basis) Direct and net investment yield vs. Swiss and German government bond yield 5 4.5 4 3.5 3 2.7% 2.4% 2.5 2.1% 2.1% 1.9% 1.9% 1.8% 2 1.7% 1.9% 1.5 1.8% 1.8% 1 1.

  28. Slide 28: Average technical interest rate further decreased

    5. Financial strength Average technical interest rate further decreased Statutory basis  Reserve strengthening 4 bps 3.00%  Change in business mix 2 bps 2.90% 2.66% Total 6 bps 2.60% 2.55% 2.35% 2.12% 2.06% 01.01.07 01.01.08 01.01.09 01.01.10 01.01.11 01.01.12 01.01.13 30.06.13 Half-year results 2

  29. Slide 29: Well-balanced capital structure and debt maturity profile

    5. Financial strength Well-balanced capital structure and debt maturity profile IFRS basis, as per 30.06.2013 Capital structure1) 4% 0-5% 26% 24% Senior 22% 21% 25% Hybrid 74% 72% 70-75% Equity 2) Half-year 2013 highlights  Successful issuance of FY 2012 HY 2013 Target dual-tranche senior bonds at

  30. Slide 30: Wrap-up: Well on track with Swiss Life 2015

     Wrap-up Wrap-up: Well on track with Swiss Life 2015 Strategic thrust Target Status  New business margin: >1.5% 2 Offering  New business shift: ~85% of NBP from risk, modern and modern-traditional products Customer  Fee and commission income: Profit by source: 3 Distribution Increase by 20-25% p

  31. Slide 31: Supplementary information

    Half-year results 2013 Investors’ presentation Supplementary information

  32. Slide 32: Supplementary information: Profit and loss

    Supplementary information  Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2013: Investors' presentation 32

  33. Slide 33: Changes in 2012 Financial Statements

    Changes in 2012 Financial Statements Prior year figures include following restatement and reclassification effects: IAS 19 Employee Benefits (revised)  Net profit from CHF 361 m as at HY 2012 reported to CHF 365 m restated  Shareholders’ equity from CHF 10 253 m as at FY 2012 reported to CHF 10 12

  34. Slide 34: Net profit excluding major one-off effects

    Net profit excluding major one-off effects CHF million (IFRS basis) +16% 472 +9 433 365 +8 373 +1 375 -48 Net Legal Net FX Net Net Estimated Restruc- Net profit cases profit effect profit profit IFRS 13 turing profit AWD excl. comparable effect costs excl. one-offs basis one-offs HY 2012 HY 2013 Hal

  35. Slide 35: Premium growth

    Premium growth CHF million (IFRS basis), GWP & PHD Local currency 1) 5 917 Switzerland +5% +5% 5 638 2 344 +10% France +8% 2 123 857 Germany +6% +4% 805 1 295 International +7% +5% 1 211 1) 2) 10 368 Total +7% +6% 9 735 HY 2013 HY 2012 1) Premiums in HY12 adjusted for the impact of CHF -103 m due to

  36. Slide 36: Switzerland: Premium development

    Switzerland: Premium development CHF million (IFRS basis) HY 20121) HY 2013 Change Total life GWP incl. PHD 5 638 5 917 +5% Single premiums 2 603 2 841 +9% Periodic premiums 3 035 3 076 +1% Group life 4 847 5 255 +8% Single premiums 2 271 2 630 +16% Periodic premiums 2 576 2 625 +2% Individual life

  37. Slide 37: Details of net investment result

    Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2013 Direct Net Impair- Gains & losses through income investment investment ments statement income result On On Net underlying derivatives Bonds 1 565 408 48 456 2 020 Equities 27 93 -33 60 87 Loans 157 5

  38. Slide 38: IFRS 13 Fair Value Measurement

    IFRS 13 Fair Value Measurement  IFRS 13 explains how to measure fair value for financial reporting. It does not require fair value measurement in addition to those already required or permitted by other IFRSs  IFRS 13 is effective from 1 January 2013. Any changes from adjustments to valuation tech

  39. Slide 39: Profit from operations

    Profit from operations CHF million (IFRS basis), segment results Segments HY 2012 HY 2013 Change Switzerland 355 472 +33% France 82 93 +14% Germany 41 50 +20% International -2 8 n.m. Asset Managers 61 71 +16% Other & eliminations 27 22 -20% Unallocated corporate costs -25 -28 +10% Profit from operat

  40. Slide 40: Adjusted profit from operations

    Adjusted profit from operations CHF million (IFRS basis), segment results adjusted1) Segments HY 2012 HY 2013 Change Switzerland 355 412 +16% France 83 93 +12% Germany 54 54 +0% International -2 8 n.m. Asset Managers 61 71 +16% Other & eliminations 27 29 +7% Unallocated corporate costs -25 -28 +10%

  41. Slide 41: Supplementary information: Balance sheet

    Supplementary information Profit and loss  Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2013: Investors' presentation 41

  42. Slide 42: Allocation of unrealised gains/losses on bonds

    Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as per 30.06.2013 3 202 -1 946 -64 -285 907 0 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds 1) bonuses adjustment equity 1) Including cash

  43. Slide 43: Return on equity calculation

    Return on equity calculation CHF million (IFRS basis) FY 2012 HY 2013 HY 2013 RoE calculation Shareholders’ equity 10 122 8 754 Net profit HY 2013 472 Average adjusted - Unrealised gains/losses on bonds 7 651 2 667 907 shareholders’ equity allocated to shareholders’ equity Return on equity 12.7%1) A

  44. Slide 44: Insurance reserves

    Insurance reserves CHF million (IFRS basis) – comparable basis Local currency 77 800 Switzerland +1% +1% 77 212 International 24 087 +3% +1% France 14% 23 324 Germany 13% 55% 18 845 +3% +1% Germany 17% 18 341 France Switzerland 19 724 +4% +3% International 18 927 1) 140 375 +2% +1% Total 137 736 30.

  45. Slide 45: 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 30.06.2013 Non-life (1 billion) 40.1 Investment contracts & PH deposits Europe 26.6 Total Group 140.4 Individual Traditional 19.8 business Reserve for u

  46. Slide 46: Average technical interest rate

    Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as per 30.06.2013 CHF EUR USD GBP Total reserves 72 094 26 659 124 9 Average technical 1.81% 2.63% 2.81% 3.36% interest rate Overall: 2.06% (01.01.2013: 2.12%) Half-year results 2013: Investors' presentation 46

  47. Slide 47: Group solvency

    Group solvency Based on IFRS equity 1) 239% +10% -5% -1% -36% 205% 2) -34 ppts -2% 31.12.2012 FX effect Result Business Change in Proposed 30.06.2013 growth revaluation dividend reserves and other effects 1) 242% before IAS 19 restatement 2) Group solvency excluding unrealised gains/losses on bonds:

  48. Slide 48: Group solvency

    Group solvency CHF million (IFRS basis) 31.12.2012 30.06.2013 Available solvency margin IFRS equity (incl. minority interests) 10 155 8 789 Eligible part of hybrid capital1) 2 471 2 559 Unattributed surplus 703 643 Goodwill and other intangible assets -1 290 -1 298 DAC non-life -53 -49 Dividends and

  49. Slide 49: Total weighted duration gap

    Total weighted duration gap1) in % 0.9 0.6 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 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

  50. Slide 50: Supplementary information: Investments

    Supplementary information Profit and loss Balance sheet  Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2013: Investors' presentation 50

  51. Slide 51: Swiss Life Asset Managers: Change analysis of assets under management

    Swiss Life Asset Managers: Change analysis of assets under management CHF billion (fair value basis) Assets under Management HY 2012 HY 2013 Change Total beginning of period 134.1 148.3 +14.2 Net new assets Swiss Life Mandates 0.0 0.4 +0.4 Asset Managers Business 1.6 2.3 +0.7 Market performance 5.9

  52. Slide 52: Bond portfolio: Ratings and classification

    Bond portfolio: Ratings and classification Insurance portfolio for own risk (fair value basis) Breakdown by rating BB CHF million BBB 2% AAA 126 727 21% 31% 24% A 22% AA Breakdown by classification Bonds 70.0% Governments & 42% supranationals 58% Corporate 30.06.2013 Half-year results 2013: Investor

  53. Slide 53: 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 BBB CHF million A 8% 126 727 8% AAA 48% 36% AA Governments & 29.5% supranationals Breakdown by currency CAD Other GBP 7% EUR USD 2% 8% 3% 29% 30.06.2013 51% CHF H

  54. Slide 54: 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 30.06.2013, 29.5% of insurance portfolio for own risk (CHF 37.4 bn) % of total government and supranational bond portfolio Switzerland 36% In CHF million1) France 11%

  55. Slide 55: Corporate bond portfolio: Ratings and currency

    Corporate bond portfolio: Ratings and currency Insurance portfolio for own risk (fair value basis) Breakdown by rating BB AAA 4% CHF million 17% 126 727 BBB 31% 12% AA 36% A Breakdown by currency Others 4% Corporate 40.5% USD bonds 29% EUR 41% 30.06.2013 CHF 26% Half-year results 2013: Investors' pr

  56. Slide 56: Corporate bond portfolio: Industry split

    Corporate bond portfolio: Industry split Corporate bond portfolio (fair value basis), as per 30.06.2013, 40.5% of insurance portfolio for own risk (CHF 51.3 bn) Breakdown banks by rating Breakdown by industry BBB 12% % of total corporate bond portfolio 43% AAA Banks 37% 34% A Other financials 5% Uti

  57. Slide 57: Loan and mortgage portfolio

    Loan and mortgage portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 126 727 Switzerland 39% 60% Mortgages Germany 4.7% Loans 8.3% 1% France Breakdown by type Policyholder Other loans loans 2% 7% Mortgages 36% Purchased loans 30.06.2013 55% Half-year resul

  58. Slide 58: Real estate portfolio

    Real estate portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country Germany France 6% CHF million 11% 126 727 Real estate 14.0% 83% Switzerland Breakdown by type Centres Others 8% 2% Residential Mixed 24% 41% 30.06.2013 25% Commercial Half-year results 2013: Investors' pre

  59. Slide 59: 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 Other Germany 1% CHF million 15% Switzerland 126 727 35% Equities & x% 1.6% France equity funds 0.6% Alternative 49% investment Net equity exposure 1.5% Breakdown by

  60. Slide 60: Forex and interest rates

    Forex and interest rates Foreign currency exchange rates 30.06.12 31.12.12 30.06.13 01.01.-30.06.12 01.01.-30.06.13 EUR 1.2011 1.2070 1.2304 1.2053 1.2298 GBP 1.4888 1.4855 1.4366 1.4650 1.4461 USD 0.9494 0.9146 0.9461 0.9290 0.9365 Interest rates1) 30.06.12 31.12.12 30.06.13 CHF 0.665 0.526 1.027 E

  61. Slide 61: Supplementary information: Market consistent embedded value (MCEV)

    Supplementary information Profit and loss Balance sheet Investments  Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2013: Investors' presentation 61

  62. Slide 62: Value of new business

    Value of new business CHF million (MCEV), as per HY 2013 Switzer- Interna- France Germany Total land tional Value of new business 89 32 12 9 141 New business strain -16 -28 -1 -1 -46 VNB before new business strain 105 60 13 9 187 Annual premiums 170 121 41 6 338 Single premiums 1 096 872 132 1 053 3

  63. Slide 63: Economic assumptions

    Economic assumptions As per HY 2013 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 0.08% 0.20% 0.78% 1.51% 1.82% 1.99% 0.0% -0.3% 0.1% 1.0% 1.0% 1.5% Euro-zone 0.43% 0.60% 1.22% 2.01% 2.38% 2.51% 1.2% 0

  64. Slide 64: 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

  65. Slide 65: Supplementary information: Contact details and financial calendar

    Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV)  Contact details and financial calendar Half-year results 2013: Investors' presentation 65

  66. Slide 66: 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 12 November

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