Swiss Life Holding Ag · SIX:SLHN
Swiss Life — HY 2017 Earnings Presentation
66 slides from Swiss Life's earnings presentation, Aug 16, 2017
Slide 1: Half-year results 2017 Investors' presentation
Half-year results 2017 Investors’ presentation 16.08.2017
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 2 | Investors' presentation | Half-year results 2017
Slide 3: Swiss Life delivers strong HY 2017 results
Swiss Life delivers strong HY 2017 results +5% +16% 524 Net profit 222 500 192 Net profit, RoE 11.1% 10.5% Fee result RoE (CHF m) (CHF m, %) HY 2016 HY 2017 HY 2016 HY 2017 +2% +56% 177 515 524 Operating Operating expense VNB, 113 VNB expense, 2.6% insurance 0.28% 0.27% NBM NBM efficiency segments 1
Slide 4: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess strategy update 4 | Investors' presentation | Half-year results 2017
Slide 5: Key figures HY 2017 results
Key figures HY 2017 results Net profit increased by 5% to CHF 524 m Adjusted profit from operations improved by 5% to CHF 763 m Fee and commission income grew by 6% in local currency to CHF 681 m Fee result increased by 16% to CHF 222 m (HY 16: CHF 192 m) Premiums decreased by 1% in local
Slide 6: Selected P&L figures
Selected P&L figures CHF million (IFRS basis) HY 2016 HY 2017 Gross written premiums, fees and deposits received 10 138 9 982 Fee and commission income 656 681 Net investment result insurance portfolio for own risk 2 315 2 050 Net insurance benefits and claims -9 093 -7 958 Policyholder participatio
Slide 7: Profit from operations
Profit from operations CHF million (IFRS basis, adjusted) +5% 760 +3 763 729 +1 730 725 -5 Profit Restruc- Profit FX Profit Profit Restruc- Profit from turing from translation from from turing from operations costs operations effect operations operations costs operations excl. comparable excl. one-o
Slide 8: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, MCEV basis) HY 2016 HY 2017 Change GWP incl. PHD 6 597 5 932 -10% • GL: -12% (market -6%); lower single premiums and stable periodic premiums; increased share of semi- autonomous solutions • IL: +6% (market 0%); driven by higher UL products Fee an
Slide 9: Business review France
Business review France EUR million (IFRS basis, MCEV basis) HY 2016 HY 2017 Change GWP incl. PHD 2 014 2 218 +10% • Life: +17% (market -5%); UL share of 51% (market 28%) • Health & protection: +1% (market +5%); individual protection +7% (market +5%) Fee and commission 106 130 +22% • Higher banking a
Slide 10: Business review Germany
Business review Germany EUR million (IFRS basis, MCEV basis) HY 2016 HY 2017 Change GWP incl. PHD 576 577 0% • Higher contribution from modern-traditional and disability products offset by lower traditional premiums (market 0%) Fee and commission 166 169 +2% • Positive contribution from owned IFAs d
Slide 11: Business review International
Business review International EUR million (IFRS basis, MCEV basis) HY 2016 HY 2017 Change GWP incl. PHD 651 977 +50% • Significantly higher single premiums with private clients; higher single and periodic premiums with corporate clients Fee and commission 98 104 +6% • Higher policy fees from busines
Slide 12: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2016 HY 2017 Change Fee and commission 279 295 +6% • PAM: Increased real estate assets and income services PAM 135 142 +5% • TPAM: Strong AuM and higher transaction fees TPAM1) 144 153 +7% Operating expense -149 -161 +9
Slide 13: Expense development
Expense development CHF million (IFRS basis) HY 2016 HY 2017 Change Total operating expense 1 261 1 328 +5% Commissions and DAC amortisation -573 -614 Operating expense (before FX) 688 714 +4% Restructuring costs and one-offs -6 -6 Scope changes -8 FX translation effect -9 Operating expense adjusted
Slide 14: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2016 HY 2017 Direct investment income 2 235 2 186 Direct investment income in % 1.5% 1.5% Expense -158 -171 Net capital gains/losses on investments and impairments1) 238 35 Net investment result 2 315 2 050 Net investmen
Slide 15: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) Equities & equity funds 153 289 155 145 Alternative investments 5.0% 5.8% Real estate 1.0% 1.1% 16.4% 17.2% Mortgages 5.3% 5.3% Loans 5.8% 5.1% Government & supranational bonds 31.4% 30.9% 64.3% 63.6% Corporate b
Slide 16: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF billion (IFRS basis) +2% +9.1 147.9 +1.1 149.0 +1.0 +0.7 152.1 -7.7 31.12.2016 FX translation 31.12.2016 Premiums/ Withdrawals/ Interest Market 30.06.2017 effect excl. FX deposits benefits accrued movements received incurred and
Slide 17: Shareholders' equity
Shareholders’ equity CHF million (IFRS basis) +521 13 884 +2% 13 657 +2 -37 +97 -356 31.12.2016 Change in Change in Distribution Conversion of Profit 30.06.2017 unrealised foreign from capital convertible attributable gains/losses currency contribution debt, change in to share- net translation reser
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: Higher fee and commission income…
Quality of earnings Higher fee and commission income… and earnings growth Fee and commission income1), CHF million (IFRS basis) +4% +6% LC Local 681 656 currency • Strong AuM and higher transaction fees in Swiss Life Asset 295 +6% +6% TPAM (+7%); increased real estate assets Managers 279 and service
Slide 20: … led to improved fee result
Quality of earnings … led to improved fee result and earnings growth Fee result1), CHF million (IFRS basis) +16% 222 thereof 192 thereof Asset 125 Asset Managers Managers 115 Insurance Insurance 97 77 segments segments HY 2016 HY 2017 1) HY 2016 FX adjusted 20 | Investors' presentation | Half-year r
Slide 21: Continued strong yields in the low interest rate environment
Quality of earnings Continued strong yields in the low interest and earnings growth rate 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% 1.6% 1.5% 1.9% 1.8% 1.5 1.7% 1.5% 1.5% 1.4% 1.0 0.5 0.0 -0.5 -1.0 30.06.2
Slide 22: Average technical interest rate further decreased
Quality of earnings Average technical interest rate and earnings growth further decreased Statutory basis • FX translation effect +1 bps 2.60% • Reserve strengthening -2 bps 2.55% • Business mix -2 bps 2.35% Total -3 bps 2.12% 2.04% 1.93% 1.64% 01.01.2010 – 30.06.2017: 1.41% 1.38% • FX translation e
Slide 23: Continued margin management
Quality of earnings Continued margin management and earnings growth New business margin (NBM) development (VNB in % PVNBP) Economic variances • Minor impact due to capital market developments +0.5% 2.6% 2.1% 0.0% -0.1% Volume, business mix and pricing variances Continued margin management efforts pa
Slide 24: More than 2/3 of cost savings implemented
Operational More than 2/3 of cost savings implemented efficiency Non-variable cost savings1), gross CHF million (project view), vs. cost base FY 2014 ~ 100 • CH: Optimisation of business processes • FR: Renegotiation of supplier contracts, internalisation of resources, efficiency gains 5 69 13 • DE:
Slide 25: Efficiency ratios
Operational Efficiency ratios efficiency Adjusted operating expense in % of average technical reserves, excl. deferred PHP (adjusted IFRS basis) Excluding expense from owned IFAs Change vs. FY 2015 FY 2016 HY 20162) HY 20172) HY 2016 Switzerland 0.44% 0.43% 0.20% 0.20% 0 bps France 1.34% 1.27% 0.64%
Slide 26: Healthy solvency ratios
Capital, cash and Healthy solvency ratios dividend Swiss Life Group: Economic solvency Sensitivities of internal SST model (as of 01.01.2017) (as of 01.01.2017) Real estate -10% -14 ppts SST internal model 161% approved by FINMA with conditions Credit spreads1) +100 bps -7 ppts Interest rates2) -50
Slide 27: Well-balanced capital structure
Capital, cash and Well-balanced capital structure dividend Capital structure1) (IFRS basis) 3 837 Senior 0-5% 6% 424 Senior bonds Carrying value (CHF m) Hybrid 25% 21% 379 Convertible bonds Shareholders’ 73% 3 035 Hybrid debt 70-75% equity2) Reference level HY 2017 HY 2017 Maturities (senior) and ne
Slide 28: Increased cash remittance to Holding
Capital, cash and Increased cash remittance to Holding dividend Cash remittance to Holding, CHF million +6% 591 557 • Annual dividends from subsidiaries fully paid to the Holding company in the first six months of 2017 • Achieved almost 4/5 of targeted Swiss Life 2018 cash remittance of > CHF 1.5 bn
Slide 29: Swiss Life 2018 well on track
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 Operational • Cost savi
Slide 30: Supplementary information
Half-year results 2017 Investors’ presentation Supplementary information
Slide 31: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 31 | Investors' presentation | Half-year results 2017
Slide 32: Net profit
Net profit CHF million (IFRS basis, adjusted) +6% 524 +2 526 500 +1 501 497 -4 Net Restruc- Net FX translation Net Net Restruc- Net profit turing profit effect profit profit turing profit costs excl. comparable costs excl. one-offs basis one-offs HY 2016 HY 2017 32 | Investors' presentation | Half-y
Slide 33: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 5 932 Switzerland -10% -10% 6 597 2 389 France +8% +10% 2 208 621 Germany -2% 0% 632 1 052 International +47% +50% 714 9 982 Total1) -2% -1% 10 138 HY 2017 HY 2016 1) Total includes Other and intersegment elimination
Slide 34: Fee and commission income development
Fee and commission income development CHF million (IFRS basis) Local currency 115 Switzerland -2% -2% 117 140 France1) +20% +22% 117 182 Germany 0% +2% 182 112 International +4% +9% 108 Asset 295 Managers 279 +6% +6% 681 Total1)2) +4% +6% 656 HY 2017 HY 2016 1) Incl. banking and Pôle Agami 2) Total
Slide 35: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 2016 HY 2017 Change Total life GWP incl. PHD 6 597 5 932 -10% Single premiums 3 313 2 636 -20% Periodic premiums 3 284 3 296 0% Group life 5 947 5 240 -12% Single premiums 3 153 2 437 -23% Periodic premiums 2 794 2 803 0% Individual life 6
Slide 36: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2017 Direct Net Impair- Gains and losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 1 374 -4 169 -109 59 1 429 Equities 170 -1 231 -431 -200 -
Slide 37: Profit from operations
Profit from operations CHF million (IFRS basis), segment results (reported vs. adjusted) HY 2016 HY 2017 Change Segments reported adjusted1) reported adjusted1) reported adjusted Switzerland 420 420 425 425 +1% +1% France 137 135 145 145 +5% +8% Germany 63 62 70 71 +13% +14% International 25 24 25 2
Slide 38: New business mix
New business mix New business production (NBP) 25% 27% 24% 25% 28% 33% 34% 33% 39% 35% 37% 30% Risk, health and P&C 12% 18% 21% 26% Modern 28% 29% Modern-traditional 24% 20% 21% 16% Traditional 9% 6% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 HY 2017 Shift excl. traditional 85% 88% 90% 92% 95% 96% CH g
Slide 39: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 39 | Investors' presentation | Half-year results 2017
Slide 40: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as of 30.06.2017 11 136 -6 419 -217 0 3 498 -1 002 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds1) bonuses adjustment equity 1) Including c
Slide 41: Return on equity
Return on equity CHF million (IFRS basis) HY 2017 RoE calculation FY 2016 HY 2017 (annualised) Net profit HY 2017 Shareholders’ equity 13 657 13 884 521 (shareholder part) Unrealised gains/losses on bonds Average adjusted -3 697 -3 498 10 173 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 88 387 Switzerland +2% +2% 86 720 International 13% 27 038 France +6% +4% Germany 25 557 11% 16 850 58% Germany +3% +1% 18% 16 395 France 19 836 Switzerland International +3% +2% 19 215 152 07
Slide 43: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2016 30.06.2017 currency Insurance reserves 159 899 163 895 +2% +2% Policyholder participation liabilities 12 043 11 819 -3% Insurance reserves w/o PHP liabilities 147 855 152 077 +3% +2% Insurance liabilities 110 935 114 024 +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 30.06.2017 0.9 Non-life 47.0 Investment contracts & PH deposits Europe 28.3 Total Group Individual 163.9 20.1 Traditional business Annuitised & other Gua
Slide 45: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as of 30.06.2017 CHF EUR USD GBP Total reserves 84 960 30 243 165 12 Average technical interest rate 1.05% 2.20% 2.23% 2.52% Overall: 1.38% (01.01.2017: 1.41%) 45 | Investors' presentation | Half-year results 2017
Slide 46: Total weighted duration gap
Total weighted duration gap 0.9 0.9 0.7 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 30.06.2017 46 | Investors' presentation | Half-year results 2017
Slide 47: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 47 | Investors' presentation | Half-year results 2017
Slide 48: 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 2016 HY 2017 Change (bn) Total beginning of period 185.3 204.2 +18.9 Net new assets PAM 0.7 -1.2 TPAM 4.9 3.3 Market performance 11.6 2.1 FX translation effects -0.3 1
Slide 49: Assets under management and administration
Assets under management and administration CHF billion, as of 30.06.2017 237.6 209.8 27.8 Total real estate under 74.3 management and administration 46.5 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 54.3 bn as of 30.06.2017 TPAM NNA: CHF 3.3 bn as of 30.06.2017 (fair value basis) (fair value basis) Breakdown by asset class Breakdown by asset class Infrastructure Equity 7% 27% Real estate 2% Real estate Bonds Balanced mandates 19% 35% Balanced mandates 61% 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 155 145 4% BBB 1% AAA 21% 32% 16% A 26% AA Breakdown by classification Bonds 63.6% Corporate bonds1) 49% 51% Governments & supranationals 30.06.2017 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 BBB BB 155 145 A 6% 5% 1% 45% AAA 43% AA Governments & Breakdown by currency 30.9% supranationals GBP CAD USD 5% 9% 1% EUR 37% 48% 30.06.2017 CHF 52 | Invest
Slide 53: Government & supranational bonds: Country split
Government & supranational bonds: PAM Country split Government and supranational bond portfolio (fair value basis), as of 30.06.2017, 30.9% of insurance portfolio for own risk (CHF 47.9 bn) % of total government and supranational bond portfolio Switzerland 35% France 13% Netherlands 7% Germany 5% Be
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 155 145 AAA 7% 18% 3% 8% AA BBB 37% 27% A Breakdown by currency GBP Other 3% 1% EUR 33% USD 37% Corporate 32.7% bonds1) 26% 30.06.2017 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 30.06.2017, 32.7% of insurance portfolio for own risk (CHF 50.7 bn) Breakdown by rating Breakdown by industry % of total BBB corporate bond portfolio 23% Banks 35% Other financials 6% 45% 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 155 145 47% Switzerland Germany 52% Mortgages 5.3% Loans 5.1% 1% France Breakdown by type Policyholder loans Other loans 1% 1% Purchased loans 47% 51% Mortgages 30.06.2017 56 | Invest
Slide 57: Real estate portfolio
Real estate portfolio PAM Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million Germany 155 145 France 9% 11% Real estate 17.2% 80% Switzerland Breakdown by type Commercial Residential 35% 37% 28% 30.06.2017 Mixed-use 57 | Investors' presentation | Half-year results 20
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 Luxembourg 155 145 3% France Equity & 5.8% 1% 18% equity funds 1.1% Alternative Net equity exposure 2.2% investments 78% Switzerland Breakdown by inve
Slide 59: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.16 31.12.16 30.06.17 01.01. – 30.06.16 01.01. – 30.06.17 EUR 1.0822 1.0728 1.0946 1.0962 1.0770 GBP 1.2967 1.2557 1.2475 1.4075 1.2522 USD 0.9773 1.0172 0.9591 0.9818 0.9944 Interest rates (10-year government bond) 30.06.16 31.12.16 30.0
Slide 60: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 60 | Investors' presentation | Half-year results 2017
Slide 61: Value of new business per segment
Value of new business per segment CHF million (MCEV basis) Switzerland France Germany International Total 177 113 91 65 53 31 20 13 10 7 PVNBP 4 514 3 206 2 152 2181 509 619 613 921 7 788 6 928 APE 322 215 253 259 31 40 63 92 668 606 NBM in % PVNBP 1.4% 2.9% 1.4% 2.4% 2.0% 3.3% 1.2% 1.4% 1.5% 2.6% i
Slide 62: Value of new business
Value of new business CHF million, as per HY 2017 (MCEV basis) Switzerland France Germany International Total Value of new business 91 53 20 13 177 New business strain -35 -32 -0 -4 -70 VNB before new business strain 126 84 21 16 248 Annual premiums 150 152 37 3 342 Single premiums 645 1 068 27 896
Slide 63: 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 64: Supplementary information
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar 64 | Investors' presentation | Half-year results 2017
Slide 65: 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 66: The future starts here.
é SwissLife The future starts here.