Swiss Life is positioning itself in Germany as a leading provider of pensions and financial solutions under one roof by managing all production and distribution organisations from a single source. The segment reporting comprises local insurance activities and the financial advisory companies operating in Germany under Swiss Life Select, tecis, Horbach and Proventus.
During the year under review, Swiss Life Germany, in spite of a challenging market environment shaped by persistently low interest rates, improved its segment result improved by 22% at CHF 153 million (previous year: CHF 125 million). The increase stems from an improved savings and cost result. The savings result contains positive one-off effects to finance the statutory additional interest rate reserve. This increase is supported by the positive development of financial consulting.
Swiss Life Germany achieved premium volume of CHF 1.3 billion in 2017, which was slightly higher than the previous year (+2%). The core product areas of Swiss Life Germany are employee insurance, occupational pensions, long-term care insurance and modern guarantee concepts. The focus on profitable new business was maintained and led to lower single-premium contributions in individual insurance. New business premiums rose year-on-year in local currency by 17%. The slight increase in premium volume is also due to positive currency effects. Insurance benefits declined significantly compared to the previous year due to lower lump-sum settlements. This is due in particular to the increased expiration of tax-privileged contracts with 12-year maturities in 2016.
Fee income fell by 6% in 2017 to CHF 400 million. The main driver of this development was the expansion of the distribution base and greater productivity by commercial agents. At the end of 2017 the proprietary financial advisory companies in Germany had 3538 trained and registered financial advisors under contract (+8% over the previous year).
Administrative costs adjusted for one-offs remained at the previous year’s level in local currency in spite of the pronounced growth in new business and resulting workforce expansion.
The challenging market conditions look set to persist in 2018. Swiss Life nonetheless expects positive new business development in its insurance business. New products and extensions accounted for a lot of this development in 2017, (e.g. Swiss Life long-term care and asset protection and fund-linked pension withdrawal in the Maximo product family), which will establish themselves further in the market. In financial consulting, Swiss Life expects the number of advisors to increase again, which should have a positive impact on business development.
Key figures for Germany
|Amounts in CHF million||2017||2016||+/-|
|GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED||1 313||1 290||2%|
|Net earned premiums||1 125||1 128||–0%|
|Fee and commission income||400||379||6%|
|Other income||8||3 1||n/a|
|TOTAL INCOME||2 329||2 403 1||–3%|
|Net insurance benefits and claims||–1 095||–1 278||–14%|
|Operating expense||–575||–621 1||–7%|
|TOTAL EXPENSE||–2 177||–2 278 1||–4%|
|Assets under control||23 032||20 860||10%|
|Insurance reserves||20 413||18 284||12%|
|Number of employees (full-time equivalents)||1 488||1 369||9%|