Swiss Life Holding AG · SIX:SLHN
Swiss Life — H1 2014 Earnings Presentation
64 slides from Swiss Life's earnings presentation, Aug 13, 2014
Slide 1: Half-year results 2014 Investors' presentation
Half-year results 2014 Investors’ presentation Zurich, 13 August 2014
Slide 2: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess Swiss Life 2015 Half-year results 2014: Investors' presentation 2
Slide 3: Highlights HY 2014 results
Highlights HY 2014 results HY 2014 vs. HY 2013 Adjusted profit from operations improved by 7% to CHF 680 m Net profit increased by 3% to CHF 487 m Premiums grew 5% in local currency to CHF 10.8 bn Fee and commission income up by 7% to CHF 587 m Asset Managers’ external customer business wi
Slide 4: Key figures HY 2014 results
Key figures HY 2014 results HY 2014 vs. HY 2013 Adjusted profit from operations CHF 680 m +7% Net profit CHF 487 m +3% GWP incl. PHD (in local currency) CHF 10.8 bn +5% Fee and commission income CHF 587 m +7% New business margin (% PVNBP) 2.4% +0.4 ppts Shareholders’ equity CHF 10.9 bn +22%1) Return
Slide 5: Acquisition of CORPUS SIREO: Transaction overview and strategic rationale
Acquisition of CORPUS SIREO: Transaction overview and strategic rationale CORPUS SIREO is the leading independent German real estate asset management service provider offering real estate asset management for commercial, retail Acquisition supports and residential portfolios our strategy real
Slide 6: Agenda
Agenda Overview Patrick Frost Financial results and Thomas Buess Swiss Life 2015 Half-year results 2014: Investors' presentation 6
Slide 7: Income statement
Income statement CHF million (IFRS basis) HY 2013 HY 2014 Gross written premiums, fees and deposits received 10 368 10 807 Commission income 393 435 Financial result for own risk 3 238 2 616 Net investment result insurance portfolio for own risk 2 994 2 473 Net insurance benefits and claims -8 284 -
Slide 8: Profit from operations excluding major one-off effects
Profit from operations excluding major one-off effects CHF million (IFRS basis) +7% 688 677 +4 680 +11 639 638 -60 -1 Profit IFRS 13 Restruc- Profit FX Profit Profit Restruc- Profit from effect turing from effect from from turing from operations in CH costs operations operations operations costs ope
Slide 9: Business review Switzerland
Business review Switzerland CHF million (IFRS basis, MCEV) HY 2013 HY 2014 Change GWP incl. PHD 5 917 6 599 +12% GL: +12% (market +1%); strong new business and low lapses IL: +11% (market +6%); strong new business Fee and commission 80 93 +16% Higher revenues from owned IFA and income1) new in
Slide 10: Business review France
Business review France EUR million (IFRS basis, MCEV) HY 2013 HY 2014 Change GWP incl. PHD 1 906 1 982 +4% Quality and overall volume above personal insurance market (+3%) Life: +8% (market +3%); very high UL share of 41% (market 16%) Health & disability: -1% (market +3%) Fee and commission 97
Slide 11: Business review Germany
Business review Germany EUR million (IFRS basis, MCEV) HY 2013 HY 2014 Change GWP incl. PHD 697 641 -8% Significantly lower volumes of traditional single premium products in IL as a result of re-pricings and product focus Overall market is stable Fee and commission 147 149 +1% Higher revenues
Slide 12: Business review International
Business review International CHF million (IFRS basis, MCEV) HY 2013 HY 2014 Change GWP incl. PHD 1 295 1 038 -20% Mainly due to lower volumes in HNWI business Fee and commission 115 117 +2% Slight increase of revenues at owned income1) IFAs and policy fees from HNWI business Operating expense -
Slide 13: Business review Asset Managers
Business review Asset Managers CHF million (IFRS basis, AuM fair value basis) HY 2013 HY 2014 Change Total income 172 187 +9% Strong fee growth in all business areas – Insurance mandates 107 113 +5% due to higher asset base – External customers 62 72 +17% – Other 2 1 -39% Operating expense -83 -90
Slide 14: Expense development
Expense development CHF million (IFRS basis) HY 2013 HY 2014 Change Total operating expense 1 288 1 327 +3% Commissions and DAC amortisation -600 -644 Operating expense (before FX) 688 683 -1% Restructuring costs and one-offs -24 -9 Scope changes +3 FX effect -2 Operating expense adjusted 665 674 +1
Slide 15: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2013 HY 2014 Direct investment income 2 158 2 220 Direct investment income in % 1.7% 1.7% Expense -128 -137 Net capital gains/losses on investments and impairments1) 964 391 Net investment result 2 994 2 473 Net investme
Slide 16: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio for own risk1) Equities & equity funds 129 649 138 119 Alternative investments 1.9% 2.1% Real estate 0.6% 14.9% 14.8% 0.6% Mortgages 4.7% 4.5% Loans 7.4% 7.3% Government & 28.8% 29.3% supranational bonds 68.7% 68.9% Corporate b
Slide 17: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2013 30.06.2014 currency Insurance reserves 142 479 150 117 +5% +6% Policyholder participation liabilities 5 481 8 926 Insurance reserves w/o PH liabilities 136 998 141 191 +3% +3% Insurance liabilities 101 432 104 701 Investment
Slide 18: Shareholders' equity and group solvency
Shareholders’ equity and group solvency CHF million (IFRS basis) Shareholders’ equity +484 10 877 +22% +1 653 -23 -176 -6 8 945 Group solvency 243% (FY 2013: 210%) 198% excl. unrealised gains/losses on bonds (FY 2013: 196%) 31.12.2013 Change in Change in Distribution Change in Profit 30.06.2014
Slide 19: Value of new business
Value of new business CHF million (MCEV) Switzerland France Germany International Total 185 139 141 89 32 30 12 6 9 10 PVNBP 3 719 4 644 1 792 1 917 525 384 1 097 907 7 133 7 852 NBM1) (in % PVNBP) 2.4 3.0 1.8 1.6 2.3 1.6 0.8 1.1 2.0 2.4 (in % APE) 31.7 42.6 15.2 13.4 22.1 19.8 7.7 10.7 21.6 27.5 HY
Slide 20: 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
Slide 21: Step-by-step approach to establish a customer-centric culture
Step-by-step approach to establish a customer-centric culture Segmentation of customer database The market shows first positive signals on implemented to steer distribution according Swiss Life’s progress on Customer Centricity, e.g.: to customer value types Customer liaison and support model elabor
Slide 22: Continued pricing discipline and margin management
2. Offering Continued pricing discipline and margin management New business margin development (VNB as % of PVNBP) +0.2% 2.4% 2.2% +0.0% 2.0% -0.1% Economic variances Lower interest rates with negative impact Expense variances 1.5% Positive administration cost experience Pricing, volume, busines
Slide 23: New business mix further progressing towards 2015 target
2. Offering New business mix further progressing towards 2015 target New business production (NBP) Risk, health and P&C 30% 29% 27% 25% ~30% FR: Lower sales of individual health in anticipation of ANI; significant progress on group health DE: Lower production in line with market 35% 35% 35% ~35%
Slide 24: Fee and commission income growth supported by all business areas
3. Distribution Fee and commission income growth supported by all business areas Fee and commission income1), CHF million +7% 587 551 Higher AuM driven by strong net new assets in external 185 Swiss Life Asset +10% customers business and strong performance in insurance 169 Managers mandates Owned
Slide 25: About 85% of targeted cost savings implemented
4. Efficiency About 85% of targeted cost savings implemented CHF million (project view), vs. cost base FY 2011 Operating cost savings1) 90-110 92 Operating cost savings already within target range 7 CH: Staff reduction, mainly in IT, facility and infrastructure 21 optimisations FR: Reduction in
Slide 26: Further improved efficiency ratios
4. Efficiency Further improved efficiency ratios Adjusted IFRS basis Adjusted operating expense in % of average technical reserves (excl. deferred PHP) Owned IFAs expense excluded FY 2011 FY 2012 FY 2013 FY 2015P HY 2013 HY 2014 Not Not annualised annualised Switzerland 0.56% 0.54% 0.50% 0.24% 0.23%
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) In % 5 4.5 4 3.5 3 2.7% 2.5 2.4% 2.1% 2.1% 1.9% 2 1.9% 1.9% 1.8% 1.7% 1.9% 1.7% 1.5 1.8% 1.8% 1 1.0% 0.5 0 30.06.2008 30.06.2009 30.06.2010 30.06.2011 30.06.2
Slide 28: Average technical interest rate further decreased
5. Financial strength Average technical interest rate further decreased Statutory basis Reserve strengthening -2 bps 3.00% Business mix -3 bps 2.90% 2.66% 2.60% Total -5 bps 2.55% 2.35% 2.12% 2.04% 1.99% 01.01.2007 01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013 01.01.2014 30.0
Slide 29: Well on track with Swiss Life 2015
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% promise
Slide 30: Supplementary information
Half-year results 2014 Investors’ presentation Supplementary information
Slide 31: 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 2014: Investors' presentation 31
Slide 32: Net profit excluding major one-off effects
Net profit excluding major one-off effects CHF million (IFRS basis) +13% 472 487 +3 490 +9 433 433 -48 -1 Net IFRS 13 Restruc- Net FX Net Net Restruc- Net profit effect turing profit effect profit profit turing profit in CH costs excl. comparable costs excl. one-offs basis one-offs HY 2013 HY 2014 H
Slide 33: Premium development
Premium development CHF million (IFRS basis); GWP, fees and deposits Local currency 6 599 Switzerland +12% +12% 5 917 2 421 France +3% +4% 2 344 783 Germany -9% -8% 857 1 038 International -20% -19% 1 295 10 807 Total Group 1) +4% +5% 10 368 HY 2014 HY 2013 1) Total includes Other and intersegment e
Slide 34: Switzerland: Premium development
Switzerland: Premium development CHF million (IFRS basis) HY 2013 HY 2014 Change Total life GWP incl. PHD 5 917 6 599 +12% Single premiums 2 841 3 413 +20% Periodic premiums 3 076 3 186 +4% Group life 5 255 5 862 +12% Single premiums 2 630 3 121 +19% Periodic premiums 2 625 2 741 +4% Individual life
Slide 35: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2014 Direct Net Impair- Gains & losses through investment investment ments income statement income result On On Net underlying derivatives Bonds 1 570 54 26 80 1 650 Equities 48 43 -12 31 79 Loans 145 79 7
Slide 36: Profit from operations
Profit from operations CHF million (IFRS basis), segment results Segments HY 2013 HY 2014 Change Switzerland 472 407 -14% France 93 118 +26% Germany 50 50 +1% International 8 18 +125% Asset Managers 71 74 +4% Other & eliminations 22 36 +68% Unallocated corporate costs -28 -27 -3% Profit from operati
Slide 37: Adjusted profit from operations
Adjusted profit from operations CHF million (IFRS basis), segment results adjusted1) Segments HY 2013 HY 2014 Change Switzerland 412 407 -1% France 93 118 +27% Germany 53 51 -5% International 8 18 +125% Asset Managers 71 74 +4% Other & eliminations 29 40 +38% Unallocated corporate costs -28 -27 -3%
Slide 38: 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 2014: Investors' presentation 38
Slide 39: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis), as per 30.06.2014 8 032 -4 773 -174 -728 2 357 0 Unrealised Deferred Shadow Deferred Non-controlling Allocated to gains/losses policyholder DAC taxes interests shareholders’ on bonds 1) bonuses adjustment equity 1) Including ca
Slide 40: Return on equity
Return on equity CHF million (IFRS basis) FY 2013 HY 2014 HY 2014 RoE calculation (annualised) Shareholders’ equity 8 945 10 877 Net profit HY 2014 484 (shareholder part) - Unrealised gains/losses on bonds Average adjusted -732 -2 357 8 367 allocated to shareholders’ equity shareholders’ equity Adju
Slide 41: Insurance reserves excluding policyholder participation liabilities
Insurance reserves excluding policyholder participation liabilities CHF million (IFRS basis) Local currency 78 052 Switzerland +4% +4% 74 877 International 24 389 France +3% +4% 15% 23 726 Germany 13% 55% 18 091 Germany +1% +1% 17% 17 994 France Switzerland 20 749 International +1% +2% 20 480 1) 141
Slide 42: Capital structure and debt maturity profile
Capital structure and debt maturity profile IFRS basis, as per 30.06.2014 Capital structure1) 7% 7% 0-5% 22% 21% Senior 23% 22% 25% Hybrid 70% 71% 70-75% Equity 2) FY 2013 HY 2014 Target Maturities (senior) and next optional call dates (hybrid) Nominal value, CHF million 717 225 416 500 500 471 300
Slide 43: 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 30.06.2014 Non-life (1 billion) 43.4 Investment contracts & PH deposits Europe Total Group 28.5 150.1 Traditional business Individual 105.7 19.6 CH Rese
Slide 44: Average technical interest rate
Average technical interest rate CHF / EUR / USD / GBP million (statutory basis), as per 30.06.2014 CHF EUR USD GBP Total reserves 75 318 27 438 134 9 Average technical 1.79% 2.45% 2.59% 3.15% interest rate Overall: 1.99% (01.01.2014: 2.04%) Half-year results 2014: Investors' presentation 44
Slide 45: Group solvency
Group solvency Based on IFRS equity 243%1) +33 ppts -2% +32% 210% +0% +9% -6% 31.12.2013 FX effect Result Business Change in Proposed 30.06.2014 growth revaluation dividend reserves and other effects 1) Group solvency excluding unrealised gains/losses on bonds: 198% (196% per FY13) Half-year results
Slide 46: Group solvency
Group solvency CHF million (IFRS basis) 31.12.2013 30.06.2014 Available solvency margin IFRS equity (incl. non-controlling interests) 9 018 10 952 Eligible part of hybrid capital1) 2 587 2 624 Unattributed surplus 816 792 Goodwill and other intangible assets -1 319 -1 306 DAC non-life -48 -44 Divide
Slide 47: Total weighted duration gap
Total weighted duration gap1) In % 0.9 0.7 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 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
Slide 48: Supplementary information: Investments
Supplementary information Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2014: Investors' presentation 48
Slide 49: 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 2013 HY 2014 Change Total beginning of period 148.3 155.1 +6.8 Net new assets Insurance mandates 0.4 1.6 +1.2 External customer business 2.3 2.2 -0.1 Market performanc
Slide 50: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio for own risk (fair value basis) Breakdown by rating BB 3% CHF million BBB AAA 138 119 22% 28% 23% 24% A AA Breakdown by classification Bonds 68.9% Governments & 43% supranationals Corporate 57% 30.06.2014 Half-year results 2014: Investor
Slide 51: 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% 8% 138 119 AAA 43% 41% AA Governments & 29.3% supranationals Breakdown by currency CAD Other GBP 1% EUR USD 3% 10% 6% 27% 30.06.2014 53% CHF
Slide 52: 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 30.06.2014, 29.3% of insurance portfolio for own risk (CHF 40.5 bn) % of total government and supranational bond portfolio Switzerland 38% In CHF million1) France 11%
Slide 53: 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 CHF million 4% 17% 138 119 BBB 32% 12% AA 35% A Breakdown by currency Others 4% Corporate 39.6% USD bonds EUR 29% 39% 30.06.2014 CHF 28% Half-year results 2014: Investors' pr
Slide 54: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio (fair value basis), as per 30.06.2014, 39.6% of insurance portfolio for own risk (CHF 54.7 bn) Breakdown banks by rating BB BBB Breakdown by industry 1% 13% % of total corporate bond portfolio AAA 40% Banks 37% 34% Other financials 5%
Slide 55: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country CHF million 138 119 Switzerland 38% Mortgages 61% 4.5% Germany Loans 7.3% 1% France Breakdown by type Policyholder loans Other loans 2% 4% Mortgages 38% Purchased loans 30.06.2014 56% Half-year resul
Slide 56: Real estate portfolio
Real estate portfolio Insurance portfolio for own risk (fair value basis) Breakdown by country Germany France 6% CHF million 11% 138 119 Real estate 14.8% 83% Switzerland Breakdown by type Commercial Residential 34% 37% 30.06.2014 29% Mixed-use Half-year results 2014: Investors' presentation 56
Slide 57: 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 17% 138 119 Equities & x% 2.1% 48% Switzerland equity funds 0.6% France 35% Alternative investment Net equity exposure 1.8% Breakdown by investme
Slide 58: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.13 31.12.13 30.06.14 01.01.-30.06.13 01.01.-30.06.14 EUR 1.2304 1.2253 1.2145 1.2298 1.2214 GBP 1.4366 1.4721 1.5172 1.4461 1.4870 USD 0.9461 0.8886 0.8871 0.9365 0.8909 Interest rates1) 30.06.13 31.12.13 30.06.14 CHF 1.027 1.073 0.658 E
Slide 59: 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 2014: Investors' presentation 59
Slide 60: Value of new business
Value of new business CHF million (MCEV), as per HY 2014 Switzer- Interna- France Germany Total land tional Value of new business 139 30 6 10 185 New business strain -28 -22 -1 -4 -54 VNB before new business strain 167 51 7 14 239 Annual premiums 165 127 22 5 319 Single premiums 1 621 953 87 877 3 5
Slide 61: Economic assumptions
Economic assumptions As per HY 2014 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 0.06% 0.07% 0.31% 1.02% 1.43% 1.73% 0.3% -0.2% -0.2% 0.9% 1.3% 1.2% Euro-zone 0.29% 0.31% 0.65% 1.44% 1.89% 2.18% 0.9%
Slide 62: 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 63: 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 2014: Investors' presentation 63
Slide 64: 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 [email protected] Rolf Winter Phone +41 (43) 284 49 19 Senior Investor Relations Manager E-mail [email protected] Financial calendar Interim statement Q3 12 November