The Swiss Life Group once again increased its earnings power in 2016: net profit grew by 5% to CHF 926 million. Adjusted profit from operations rose by 5% year-on-year, to CHF 1.4 billion during the year under review. The main driver of the increase in earnings power is the successful expansion of the fee and commission business, referred to as fee business.
The Swiss Life Group increased its net profit from CHF 878 million to CHF 926 million (+5%). Profit from operations amounted to CHF 1393 million (+5%). The savings result of CHF 804 mil- lion was almost as high as in 2015 (CHF 805 million) and the risk result was CHF 388 million (2015: CHF 398 million). The fee result was again very pleasing: it increased by 14% to CHF 396 mil- lion (2015: CHF 346 million).
In 2016, Swiss Life earned direct investment income of CHF 4.3 billion (2015: CHF 4.3 billion). The net investment result was CHF 4.8 billion (2015: CHF 5.2 billion), which equates to a net investment yield of 3.3% (2015: 3.7%). The investment yield allowed Swiss Life to again strengthen the insurance reserves by about CHF 1 billion, and thus shore up the sustainability of its business model.
Swiss Life Switzerland increased its operating profit by 7% to CHF 812 million. The fee result contributed CHF 12 million (2015: CHF –4 million) and the risk result accounted for CHF 253 million (2015: CHF 267 million). The savings result was CHF 534 million (+2%); and the cost result also made a positive contribution (plus CHF 16 million). In France, Swiss Life posted a 2% increase, to EUR 224 million. The savings and risk results were both positive at EUR 175 mil- lion (+8%) and EUR 90 million (+9%), respectively. The fee result came to EUR 39 million (–9%). Swiss Life in Germany posted a contribution of EUR 115 million to the result (–5%), driven by a savings result of EUR 63 million (–26%), a fee result of EUR 57 million (+52%) and a risk result of EUR 28 million (+6%). Swiss Life International achieved a segment result of EUR 41 million (+6%). The main driver was the fee result at EUR 31 million (+6%), while the risk result added EUR 6 million (–2%) and the savings result EUR 9 million (+12%). Swiss Life Asset Managers contributed CHF 243 million to the Group result, which equates to an 8% increase: +19% in third-party asset management and +4% in proprietary asset management.
Swiss Life posted a 9% fall in premiums in local currency to CHF 17.4 billion in 2016 (–8% in Swiss francs). The decline is mainly due to the consistent focus on profitability and capital efficiency. The Group grew its fee income in local currency by 3% to CHF 1.4 billion (+5% in Swiss francs).
In the home market of Switzerland, premium volume decreased by 6% to CHF 9.9 billion. This was due in particular to maintaining the discerning underwriting policy in group life business, with premium income totalling CHF 8.4 billion (–6%). Swiss Life continued its full-range provider strategy in its group life business: the share of new business with semi-autonomous solutions more than doubled to 26% (2015: 11%). In individual life business, Swiss Life achieved a premium volume of CHF 1.5 billion (–7%).
In France, Swiss Life saw a 3% fall in premiums to EUR 4.1 billion. Premium quality in life insurance business was again high with a significant proportion (42%) of unit-linked solutions (2015: 45%) – which was twice the market level. The focus on profitable business and planned reduction in single-premium business in Germany resulted in a 10% drop in premiums to EUR 1.2 billion. The growth in risk and modern products partially offset this decline. Swiss Life International experienced a 31% fall in premium income to EUR 1.6 billion, as market conditions remained difficult.
As of 31 December 2016, Swiss Life Asset Managers had a total of CHF 204 billion under management (+10%). In its third-party customer business, Swiss Life Asset Managers posted net new assets of CHF 8.5 billion. The company thus had CHF 49.6 billion in assets under management from third parties at the end of 2016, which includes CHF 1.3 billion from the purchase of Mayfair Capital in the last quarter of 2016.
Assets under management in real estate came to CHF 43.5 billion. Swiss Life also administers CHF 28.8 billion in real estate for third parties. With a total of CHF 72.3 billion under management and administration, the company is one of Europe’s leading real estate managers.
In addition to its fee and risk results, Swiss Life is also making good progress towards all its goals under “Swiss Life 2018”. The efficiency ratio for insurance business improved Group-wide by three basis points to 0.58%. Operating costs in insurance fell by 1% and the insurance reserves increased by 3%. In spite of interest rates falling further, the new business margin improved to 2.1%, relative to 1.7% in the prior year, due to disciplined margin management and an improved, more capital-efficient composition of new business. The value of new business rose from CHF 268 million in 2015 to CHF 296 million (+10%). Swiss Life generated an adjusted return on equity of 9.6% in 2016 (2015: 9.7%), and thus once again attained the upper end of its target range of 8 to 10%. The cash remittance to Swiss Life Holding increased to CHF 598 million (2015: CHF 411 million). Shareholders’ equity amounted to CHF 13.7 billion (+12%). Swiss Life estimates its SST ratio at about 160% as of 1 January 2017 (based on the internal model approved with conditions).
For events of particular significance occurring after the end of the financial year, see Note 34, “Events after the Reporting Period”, in the consolidated financial statements.
|Amounts in CHF million||2016||2015||+/-|
|GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED||17 366||18 853||–8%|
|Net earned premiums||13 228||13 771||–4%|
|Fee and commission income||1 351||1 292||5%|
|Financial result||5 062||5 281||–4%|
|TOTAL INCOME||19 707||20 555||–4%|
|Net insurance benefits and claims||–14 064||–15 516||–9%|
|Policyholder participation||–1 325||–899||47%|
|Operating expense||–2 765||–2 649||4%|
|TOTAL EXPENSE||–18 314||–19 226||–5%|
|PROFIT FROM OPERATIONS||1 393||1 329||5%|
|Equity||13 739||12 258||12%|
|Insurance reserves||159 899||154 953||3%|
|Assets under management||222 916||202 268||10%|
|Assets under control||243 255||223 411||9%|
|Return on equity (in %) 1||9.6||9.7||–0.1 Ppkt.|
|Number of employees (full-time equivalents)||7 801||7 595||3%|
|1 equity excl. unrealised gains/losses on bonds|
|Amounts in CHF million||2016||2016||2015||2015|
|Equity securities and equity funds||7 609||5.0%||5 744||3.9%|
|Alternative investments||1 609||1.0%||1 331||0.9%|
|Real estate||25 155||16.4%||23 164||15.8%|
|Mortgages||8 107||5.3%||7 634||5.2%|
|Loans||8 967||5.8%||9 638||6.6%|
|Bonds||98 499||64.3%||97 125||66.3%|
|Cash and cash equivalents and other||3 343||2.2%||1 779||1.2%|
|TOTAL||153 289||100.0%||146 413||100.0%|
|Net equity exposure|
|Duration of bonds||2.1%||1.9%|
|Duration bei Obligationen||11.3 years||11.0 years|