Swiss Life Holding AG · SIX:SLHN
Swiss Life — H1 2011 Earnings Presentation
65 slides from Swiss Life's earnings presentation, Aug 17, 2011
Slide 1: Half-year results 2011 Investors' presentation
Half-year results 2011 Investors’ presentation Zurich, 17 August 2011
Slide 2: Agenda
Agenda Æ Overview Bruno Pfister Financial results and Thomas Buess MILESTONE update Wrap-up Bruno Pfister Half-year results 2011: Investors' presentation 2
Slide 3: Highlights: Key performance metrics further improved
Highlights: Key performance metrics further improved HY 2011 vs HY 2010 9 Net profit increased by 50% from CHF 269 m to CHF 403 m 9 Operating profit increased 9% from CHF 415 m to CHF 452 m 9 Premiums declined 13% in local currency but were of higher quality 9 Strong net investment yield at 1.9% 9 M
Slide 4: Key figures
Key figures HY 2011 vs HY 2010 Net profit CHF 403 m +50% Profit from operations CHF 452 m +9% New business margin (% PVNBP) 1.6% +0.7 ppts GWP incl. PHD CHF 10.1 bn -13%1) Shareholders’ equity CHF 7.5 bn +1%2) Return on equity (pro forma3)) 8.7% +1.4 ppts Group solvency 177% +5 ppts2) 1) Local curre
Slide 5: Agenda
Agenda Overview Bruno Pfister Æ Financial results and Thomas Buess MILESTONE update Wrap-up Bruno Pfister Half-year results 2011: Investors' presentation 5
Slide 6: Income statement
Income statement CHF million (IFRS basis) HY 2010 HY 2011 Gross written premiums, fees and deposits received 12 241 10 104 Commission income 467 405 Financial result for own risk 2 155 2 185 Net investment result insurance portfolio for own risk 2 311 2 083 Net insurance benefits and claims -7 627 -
Slide 7: Change analysis of net profit
Change analysis of net profit In CHF million (IFRS basis) 403 +26% +89 327 269 +67 -13 260 -9 Net profit FX Net profit Operational Net profit Impairment One-off Net profit HY 2010 impact HY 2010 improvements HY 2011 MLP tax HY 2011 adjusted excl. effect 1) incl. one-offs one-offs 1) Due to disposal
Slide 8: Business review Insurance Switzerland
Business review Insurance Switzerland CHF million (IFRS basis, MCEV) HY 2010 HY 2011 Change GWP incl. PHD 5 285 5 856 +11% Stronger growth than market; GL +12% and IL +3% Operating expense -199 -178 -11% Impact of cost saving initiatives adjusted1) Segment result 282 291 +3% Driven by cost sav
Slide 9: Business review Insurance France
Business review Insurance France EUR million (IFRS basis, MCEV) HY 2010 HY 2011 Change GWP incl. PHD1) 1 942 1 828 -6% Driven by life -15% (market -11%) Health & disability: +8% (market +3%) Life: Stable periodic premiums, growth in UL (22% vs market 0%) Operating expense -135 -139 +3% Expen
Slide 10: Business review Insurance Germany
Business review Insurance Germany EUR million (IFRS basis, MCEV) HY 2010 HY 2011 Change GWP incl. PHD 736 686 -7% Better than market (-8%) Single premiums: Deliberate reduction in capitalisation product Periodic premiums +3% (market +1%) Operating expense -54 -53 -2% Impact of cost savings i
Slide 11: Business review Insurance International
Business review Insurance International1) CHF million (IFRS basis, MCEV) HY 2010 HY 2011 Change GWP incl. PHD2) 3 047 1 157 -62% Lower volumes in HNWI segment Negative FX effects Operating expense -42 -40 -5% Expense management adjusted2,3) Segment result2) -3 0 n.a. Lower cost base Stable
Slide 12: Business review Investment Management
Business review Investment Management CHF million (IFRS basis) HY 2010 HY 2011 Change Total income 129 139 +8% Higher AuM with particularly strong growth in real estate related income Operating expense -70 -68 -3% Lower project costs and strict cost adjusted1) management Segment result 46 57 +24
Slide 13: Business review AWD
Business review AWD AWD, stand-alone, EUR million (IFRS basis) HY 2010 HY 2011 Change Revenues 262.9 265.5 +1% Increase in advisors’ productivity Germany 166.5 170.1 Higher recurring commissions Austria & CEE 36.4 34.8 United Kingdom 23.2 25.4 Switzerland 36.8 35.2 EBIT 20.4 21.8 +7% Mainly du
Slide 14: Expense development
Expense development CHF million (IFRS basis) HY 2010 HY 2011 Change Total operating expense 1 574 1 412 -10% / -162 Commissions and DAC amortisation -823 -725 adjusted1) Operating expense (before FX) 754 687 -9% / -67 Restructuring costs and one-offs -4 -5 Currency effect -51 Operating expense adjus
Slide 15: Investment result
Investment result CHF million (IFRS basis), insurance portfolio for own risk Yields not annualised HY 20101) HY 2011 Direct investment income 2 120 2 055 Direct investment income in % 1.9% 1.8% Expense -108 -115 Net capital gains/losses on investments and impairments 299 143 Net investment result 2
Slide 16: Investment portfolio
Investment portfolio CHF million (fair value basis), insurance portfolio1) for own risk 112 224 113 978 Equities & equity funds 3.8% 3.1% Alternative investments 1.0% 0.7% Real estate 12.6% 13.2% Mortgages 4.7% 4.6% 9.0% 8.0% Loans Governments & 32.6% 32.4% supranationals Corporates 66.6% 33.7% 36.7
Slide 17: 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 HY 2011, 32.4% of insurance portfolio (CHF 36.9 bn) % of total government and supranational bond portfolio Switzerland 25% In CHF million1) France 14% Germany 12% FY10
Slide 18: Insurance reserves and borrowings
Insurance reserves and borrowings CHF million (IFRS basis) Local 31.12.2010 30.06.2011 Change currency Insurance reserves 122 279 125 247 +2% +3% Insurance liabilities 90 305 93 283 Investment contracts 11 279 11 233 Financial liabilities FVPL 17 259 17 275 Policyholder participation liabilities 3 4
Slide 19: Development of shareholders' equity
Development of shareholders’ equity CHF million (IFRS basis) 7 496 +1% 7 404 -243 +403 -64 -4 31.12.2010 Change in Change in Change in Profit 30.06.2011 unrealised foreign treasury shares attributable to gains/losses currency & share premium shareholders net translation Half-year results 2011: Inves
Slide 20: Group solvency
Group solvency Based on IFRS equity +8% -9% -3% 177%1) +5 ppts +9% 172%1) 0% 31.12.2010 FX effect Result Hybrid Change in Accrued 30.06.2011 issued revaluation dividend reserves and HY 2011 other effects 1) Group solvency excluding unrealised gains/losses on bonds: 166% (FY10) and 175% (HY11) Half-y
Slide 21: Value of new business
Value of new business CHF million Switzerland1) France Germany International2) Total 104 71 45 28 31 20 12 15 12 11 PVNBP 1 916 2 264 2 443 2 313 838 762 2 667 1 025 7 863 6 364 New business 0.6 1.2 0.6 1.9 1.4 2.6 1.2 1.1 0.9 1.6 margin (% PVNBP) HY 2010 HY 2011 1) HY 2011 including assumed reinsur
Slide 22: Update on MILESTONE programme
Update on MILESTONE programme Workstream Objectives Enhance Margin management focus: “We are growing – customer value & VNB and NBM but not at 1 Drive shift to modern products & the expense new business promote risk products of value” profitability Optimise distribution “We are increasing Incr
Slide 23: Capital market movement supports margin
1. New business profitability Capital market movement supports margin New business margin (VNB as % of PVNBP) 1.6% Economic variances +0.3% 0.0% 1.4% -0.1% Generally improved capital market conditions: - Higher interest rates 0.9% - Lower interest rate volatilities Volume, product mix, and pricing
Slide 24: Increasing share of modern and risk products despite lower PPLI production
1. New business profitability Increasing share of modern and risk products despite lower PPLI production New business product mix (based on NBP) 28% 2012 target achieved in HY 2011 31% 30% < 30% Traditional 46% CH: Strong sales of ‘SL Champion’ products. Tranche of ‘SL Premium Select’ sold FR: S
Slide 25: Sales through AWD distribution channel increased by 36%
2. Distribution Sales through AWD distribution channel increased by 36%1) Swiss Life in Germany – AWD channel NBP2) in EUR million 212 Reasons for development in first half of 2011 193 160 Increased competition in disability products partially offset by successful sales of Champion products 193 17
Slide 26: 95% of targeted cost savings implemented
3. Operational excellence 95% of targeted cost savings implemented Status of targeted cost savings implemented as per HY 2011 – project view ~95% ~3% ~2% CHF 350-400 m Switzerland 41% AWD Corporate Centre 29% France & Germany 12% Others 12% 6% Targeted cost Targeted cost savings Targeted cost Cost s
Slide 27: Ongoing balance sheet measures and in-force business optimisation are effective
4. Balance sheet & in-force business Ongoing balance sheet measures and in-force business optimisation are effective Levers to manage Selected initiatives per country Achievements HY 2011 in-force business Group Capital management Hybrid capital of CHF 400 m raised Release risk Reinsurance str
Slide 28: Well-balanced capital structure and maturity profile
4. Balance sheet & in-force business Well-balanced capital structure and maturity profile As per 30.06.2011 Capital structure 0-5% Senior 22% 25% 25% Hybrid 78% Strong capital structure, 75% 70-75% Equity well-balanced leverage HY 2011 highlight: FY 2010 HY 2011 1) Target CHF 400 m hybrid issued
Slide 29: Change analysis of profit from operations
4. 5.Balance Disciplined sheet execution & in-force business Change analysis of profit from operations Segment results adjusted1); CHF million (IFRS basis) HY 2010 HY 2011 Change Driven by operating adjusted adjusted improvements Insurance businesses 380 404 +24 ~80% Switzerland 282 291 France 41 74
Slide 30: MILESTONE: Swiss Life's response to the low interest rate environment
4. 5.Balance Disciplined sheet execution & in-force business MILESTONE: Swiss Life’s response to the low interest rate environment Comprehensive set of measures implemented over the course of last 18 months: Measures Solid and proven ALM: Duration gap kept below Asset side 1 year and significantly
Slide 31: Agenda
Agenda Overview Bruno Pfister Financial results and Thomas Buess MILESTONE update Æ Wrap-up Bruno Pfister Half-year results 2011: Investors' presentation 31
Slide 32: MILESTONE: Managing for value at Swiss Life
MILESTONE: Managing for value at Swiss Life Workstream Objectives Status Enhance New business margin > 2.2% customer value & > 70% of NBP from modern and 1 new business risk products profitability 20–25% share of Swiss Life Increase products in relevant product 2 distribution Drive categories
Slide 33: Supplementary information
Half-year results 2011 Investors’ presentation Supplementary information
Slide 34: Supplementary information
Supplementary information Æ Profit and loss Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2011: Investors' presentation 34
Slide 35: Premium growth
Premium growth GWP & PHD; CHF million (IFRS basis) Local currency 5 856 Switzerland +11% +11% 5 285 2 324 France 1) -17% -6% 2 790 872 Germany -18% -7% 1 059 1 157 International 2) -62% -59% 3 047 3) 10 104 Total -17% -13% 12 197 HY 2011 HY 2010 1) CMU of EUR 28 m in HY 2010 excluded 2) Includes Pri
Slide 36: Switzerland: Life insurance premiums
Switzerland: Life insurance premiums CHF million (IFRS basis) HY 2010 HY 2011 Change Total life GWP incl. PHD 5 285 5 856 +11% Single premiums 2 060 2 587 +26% Periodic premiums 3 225 3 269 +1% Group life 4 589 5 142 +12% Single premiums 1 836 2 335 +27% Periodic premiums 2 753 2 807 +2% Individual
Slide 37: Details of net investment result
Details of net investment result CHF million (IFRS basis), insurance portfolio for own risk HY 2011 Direct Net Impair- Gains & losses through investment investment ments income statement income result on on Net underlyings derivatives Bonds 1 429 -45 99 -75 24 1 408 Equities 42 -26 115 -13 102 118 L
Slide 38: Operating result
Operating result Segment results; CHF million (IFRS basis) HY 2010 HY 2011 Insurance 390 404 of which - Switzerland 282 291 - France 47 74 - Germany 64 39 - International -3 0 Investment Management 46 57 AWD 15 16 Other & eliminations -14 -1 Unallocated corporate costs -22 -24 Profit from operations
Slide 39: Reconciliation AWD segment result to AWD EBIT
Reconciliation AWD segment result to AWD EBIT CHF million (IFRS basis) +1 28 +11 16 AWD segment Amortisation Financial result AWD EBIT result HY 2011 customer AWD HY 2011 HY 2011 2) relationship asset 1) 1) Annual amortisation: EUR 18 m 2) AWD EBIT HY 2011: EUR 21.8 m Half-year results 2011: Investo
Slide 40: Supplementary information: Balance sheet
Supplementary information Profit and loss Æ Balance sheet Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2011: Investors' presentation 40
Slide 41: Insurance reserves by country
Insurance reserves by country CHF million (IFRS basis) – comparable basis Local currency 1) 70 855 Switzerland +5% +5% 67 599 International 12% 21 026 France 0% +2% 20 965 Germany 14% 17 146 Germany -1% +1% 17 334 France 17% Switzerland 57% 2) 16 277 International 0% +1% 16 346 3) 125 247 Total +2%
Slide 42: Swiss Life Group reserves subject to BVG minimum interest rates
Swiss Life Group reserves subject to BVG minimum interest rates Breakdown of insurance reserves (incl. unit-linked) as per 30.06.2011; CHF billion (IFRS basis) Non-life (1 billion) 34 Investment contracts & PH deposits Europe 23 Continuing operations 125 Traditional Individual business 19.8 90 Reser
Slide 43: Average technical interest rate of 2.52%
Average technical interest rate of 2.52% CHF / EUR / USD / GBP million (statutory basis) CHF EUR USD GBP Total reserves 66 558 24 747 107 8 Average technical 2.40% 2.79% 3.38% 3.53% interest rate Overall: 2.52% (01.01.2011: 2.55%) Half-year results 2011: Investors' presentation 43
Slide 44: Development of average technical interest rate
Development of average technical interest rate Development Development of business -8 bps of business -3 bps Change guaranteed Change guaranteed rate Development of CH group life -16 bps rate of CH group life1) -3 bps of business -3 bps 3.14% Development 3.03% 3.00% of business -4 bps
Slide 45: Group solvency
Group solvency CHF million (IFRS basis) 31.12.2010 30.06.2011 Available solvency margin IFRS equity (incl. minority interests) 7 437 7 530 Eligible part of hybrid capital1) 2 016 2 365 Unattributed surplus 722 724 Goodwill and other intangible assets -1 948 -1 919 DAC non-life -60 -73 Dividends and
Slide 46: Statutory solvency
Statutory solvency CHF million (statutory basis) as per 30.06.2011 Available solvency margin Statutory solvency Parent company statutory equity 2 011 7 201 Intangibles -19 203% Eligible part of hybrid capital1) 1 770 Fund for future appropriation 162 3 540 Additional Zillmerisation 246 Unrealised ca
Slide 47: Total weighted duration gap
Total weighted duration gap1) in % 0.9 0.9 0.7 0.6 0.6 0.5 31.12.2008 30.06.2009 31.12.2009 30.06.2010 31.12.2010 30.06.2011 1) Explains the 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 Half-y
Slide 48: Supplementary information: Investments
Supplementary information Profit and loss Balance sheet Æ Investments Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2011: Investors' presentation 48
Slide 49: Change analysis of assets under management
Business review Investment Management: Change analysis of assets under management CHF billion (fair value basis) Proprietary assets Third party assets AuM as of 109.7 12.3 1) 01.01.11 Net new +2.0 +2.6 money Market -0.1 +0.5 movements FX -0.8 -0.2 AuM as of 110.8 15.2 30.06.11 1) Restated according
Slide 50: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio (fair value basis) Breakdown by rating Below BBB BBB 4% 14% CHF million 113 978 AAA A 49% 20% AA 13% 69.2% Breakdown by classification Bonds Corporate Government and 53% supranationals 47% 30.06.2011 Half-year results 2011: Investors' pr
Slide 51: Government and supranational bond portfolio: Ratings and currency
Government and supranational bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating BBB Below BBB A 4% 1% 4% CHF million AA 113 978 10% AAA 81% Breakdown by currency CAD Other GBP 5% 1% 7% Government USD and supra- 32.4% 7% nationals EUR 39% CHF 30.06.2011 41
Slide 52: Corporate bond portfolio: Ratings and currency
Corporate bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating Below BBB 7% AAA CHF million BBB 20% 113 978 24% AA 15% A 34% Corporate 36.7% xx% Breakdown by currency bonds Others 2% USD 25% EUR 30.06.2011 50% CHF 23% Half-year results 2011: Investors' pres
Slide 53: Corporate bond portfolio: Industry split
Corporate bond portfolio: Industry split Corporate bond portfolio (fair value basis), as per HY 2011, 36.7% of insurance portfolio (CHF 41.8 bn) Breakdown by industry Financials: Breakdown by rating % of total BBB Below BBB corporate bond portfolio 1% 7% Financials 42% AAA 44% Utilities 10% Industri
Slide 54: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio (fair value basis) Breakdown by country CHF million Switzerland 113 978 35% Germany 64% France 1% Mortgages 4.6% Loans 8.0% 12.6% Breakdown by type Policyholder loans Other loans 2% 3% Mortgages 37% Purchased loans 30.06.2011 58% Half-year results 2011
Slide 55: Real estate portfolio
Real estate portfolio Insurance portfolio (fair value basis) Breakdown by country Germany 6% France 10% CHF million 113 978 Real Switzerland 13.2% 84% estate Breakdown by type Others 2% Centres 8% Mixed 23% Residential 40% 30.06.2011 Commercial 27% Half-year results 2011: Investors' presentation 55
Slide 56: Equity portfolio: Gross exposure
Equity portfolio: Gross exposure Insurance portfolio (fair value basis) Breakdown by country CHF million Germany Equities & 113 978 16% equity funds 3.1% Switzerland 51% France 33% 30.06.2011 Half-year results 2011: Investors' presentation 56
Slide 57: Alternative investment portfolio
Alternative investment portfolio Insurance portfolio (fair value basis) Hedge funds: CHF 422 million (FY 2010: CHF 668 million) Single funds CHF million 9% 113 978 Alternative investments 0.7% Fund of funds 91% Private equity: CHF 372 million (FY 2010: CHF 368 million) Single funds Fund of funds 34%
Slide 58: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 30.06.10 31.12.10 30.06.11 01.01.-30.06.10 01.01.-30.06.11 EUR 1.3210 1.2483 1.2217 1.4383 1.2713 GBP 1.6126 1.4560 1.3528 1.6524 1.4634 USD 1.0778 0.9339 0.8420 1.0829 0.9051 Interest rates1) 30.06.10 31.12.10 30.06.11 CHF 1.482 1.716 1.732 E
Slide 59: Supplementary information: MCEV
Supplementary information Profit and loss Balance sheet Investments Æ Market consistent embedded value (MCEV) Contact details and financial calendar Half-year results 2011: Investors' presentation 59
Slide 60: Value of New Business
Value of New Business CHF million (MCEV) Inter- Switzerland 1) France Germany Total national Value of new business 28 45 20 11 104 New business strain -25 -38 -5 -6 -73 VNB before new business strain 53 82 25 16 177 Annual premiums 110 190 60 3 363 Single premiums 756 839 151 1 005 2 751 Present val
Slide 61: Economic assumptions
Economic assumptions 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 0.22% 0.52% 1.35% 2.12% 2.39% 2.43% 0.7% 0.6% 1.2% 1.7% 1.8% 1.6% Euro zone 2.01% 2.17% 2.84% 3.43% 3.78% 3.85% 1.7% 1.5% 2.1% 2.6% 2.
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) Æ Contact details and financial calendar Half-year results 2011: 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 15 November
Slide 65: The future starts here.
The future starts here. Half-year results 2011: Investors' presentation 65