A table showing the shareholder structure is provided in the section “Information on Share Performance and Historical Comparison” on page 77 in the Business Review.
Zurich, Washington DC and Geneva, she served as Secretary General at SIG Holding AG from 1992 to 1995. She then became a Member of the Executive Board of WICOR HOLDING AG (“WEIDMANN Group”), Rapperswil in 1995, where she was Head of Corporate Development and, from 1998, Head of the Business Area Electrical Technology Asia/Pacific. She has held the positions of Chief Executive Officer and Delegate of the Board of Directors of WICOR HOLDING AG since 2001.
BOARD — The Organisational Regulations of Swiss Life Holding provide for the comprehensive delegation of the executive management responsibilities of the company to the Group CEO and the Corporate Executive Board, with the exception of those duties reserved for other bodies in accordance with the law, the Articles of Association or the Organisational Regulations themselves.
Other appointments: – German Insurance Association (GDV), Berlin, Member of the Main Committee Life Insurance – DEPFA Holding Verwaltungsgesellschaft mbH, Düsseldorf, Member of the Supervisory Board
As a mid- to long-term compensation component linked to the performance of the Swiss Life Holding share price, an equity compensation plan has been in place since 2004 for members of the Corporate Executive Board and other key performers within the Swiss Life Group, who are determined by the Corporate Executive Board with the approval of the Nomination and Compensation Committee. Based on this plan, participants are granted future subscription rights to Swiss Life Holding shares. These subscription rights entitle the participants to receive Swiss Life Holding shares free of charge after a period of three years has elapsed and provided that the prerequisites under the plan are satisfied at that point.
At Corporate Executive Board level, variable compensation depends 60% directly on the company’s success. As mentioned above, the following key figures are included in the Key Performance Indicators (KPIs) used to assess company success: The annual profit, costs, business volume, investment return, return on equity and solvency, as well as the profitability of in-force and new business, margin performance and the share of non-traditional products in new business.
Demographic 5% proportionate increase in mortality rates (death cover) –17 –0% –3 –2%
1 not available 2.7 RECONCILIATION OF IFRS NET ASSET VALUE TO GROUP MCEV
FRANCE — The MCEV of France slightly increased despite the adverse capital market environment. Free surplus increased from the profit of the year despite a considerable new business strain and dividend payment.
In order to be consistent with the CFO Forum Principles, no diversification between hedgeable and non-hedgeable risks has been taken into account. Furthermore no diversification effects between market units have been accounted for.
Changes in ownership interest in subsidiaries – – – – – 0 0 0 0
In December 2011, the International Accounting Standards Board issued amendments to IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures. The amendments clarify the requirements for offsetting financial instruments. The new disclosure requirements are intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrangements on a company’s financial position. The amendments are effective for annual periods beginning on or after 1 January 2014 and 2013, respectively. The Swiss Life Group is currently analysing the impact of these new requirements.
Insurance liabilities are established by using appropriate estimates and assumptions on mortality, morbidity, exercise of policyholder options and investment returns. With regard to mortality for example these estimates are typically based on standard industry tables. Management makes allowance for expected improvements due to continued advances in medical science and social conditions.
Goodwill is tested for impairment annually (in autumn), or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The recoverable amounts of the business relating to the goodwill have been determined based on value-in-use calculations. These calculations require the use of estimates which are set out in note 18.
Net gains/losses on financial instruments at fair value through profit or loss –615 –81 –75 –34 – 1 –16 –820 – –820
Net insurance benefits and claims –8 964 –1 847 –1 776 –19 – – –1 –12 607 –7 –12 614
Additions to non-current assets 1 232 144 126 4 14 3 4 1 527 – 1 527
Other expenses –94 –274 –35 –36 –46 –100 –17 –602 11 –591 of which inter-segment –137 –5 –50 –42 –17 –1 –7 –259 259 of which inter-segment –94 –6 –54 –48 165 40 25 28 –28
Financial assets held to maturity 3 716 1 304 26 – – – – 5 046 – 5 046
Entities with functional currency CHF – 13 820 13 919 3 872 100 2 838
At 31 December 2011, if morbidity had been 5% higher, the embedded value would have been CHF 87 million lower (2010: CHF 78 million lower).
Derivatives embedded in insurance contracts – – 0 0 6 6 of which derivatives designated and accounted for as hedging instruments
Currency options – – – – – – – – – –
Revaluation in respect of transfers to investment property 16 – – – 16
Additions from business combinations 29 9 – 2 – – – 11 –
BALANCE AS AT END OF PERIOD 1 727 1 745 311 316 236 230 2 274 2 291
Investment contracts with discretionary participation with deposit accounting 9 605 9 694
On 12 December 2011, Swiss Life AG repaid on the first call date a EUR 100 million subordinated step-up loan issued in 2001 and due in 2021.
In March 1999, Swiss Life AG privately placed a subordinated perpetual step-up loan comprising three simultaneous advances of EUR 443 million (at a rate of interest of Euribor plus a margin of 1.05%, increasing by 100 basis points as from April 2009), CHF 290 million (at a rate of interest of Libor plus a margin of 1.05%, increasing by 100 basis points as from April 2009) and EUR 215 million (at a rate of interest of 5.3655%, as from October 2009 the rate of interest is the aggregate of Euribor plus a margin of 2.05%). In 2009, Swiss Life AG renounced the right to call the loan on its first call date. Swiss Life AG can next call the EUR 443 million floating rate loan and the CHF 290 million floating rate loan on 6 April 2014 and the EUR 215 million loan on 6 October 2014 or at five-year intervals thereafter, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority.
Swiss Life AG CHF 290 CHF 290 +2.050% 1999 2014 290 290
Claims under life insurance contracts represent the liability for unpaid portions of claims incurred. It includes an estimate of the liability for claims incurred but not reported (IBNR). The measurement at reporting date is a best estimate of ultimate future claim payments.
The expense recognised for share-based payment amounted to CHF 7 million in 2011 (2010: CHF 5 million).
Increase/reduction in taxes resulting from lower taxed income –169 –277 non-deductible expenses 112 104 other income taxes (incl. withholding taxes) 20 15 change in unrecognised tax losses 28 40 adjustments for current tax of prior periods –96 17 changes in tax rates –41 0 intercompany effects –26 –21 other –4 –1
Balance as at Recognised Recognised Acquisitions translation Balance as at 1 January in income in equity and disposals differences end of period
As approved by the shareholders at the General Meeting of Swiss Life Holding (SLH) on 5 May 2011, a reduction in the par value of CHF 4.50 per registered SLH share was effected in 2011 (2010: CHF 2.40 per registered share). The payout took place on 28 July 2011 and led to a reduction in the share capital of SLH of CHF 144 million (2010: CHF 77 million ).
Financial assets at fair value through profit or loss 1 – – – 1 –
Swiss Life International Holding AG, Zürich Other 100.0% 100.0% CHF 1 000
Index (TSR Outperformance). A subscription right arises if the performance on expiry of the three-year term is above the first quartile in comparison with the companies in question. Depending on the fulfilment of the two performance criteria within the three-year period, the number of PSUs can increase by up to a factor of 1.5 (2009 plan) or 2.0 (2010 plan) or drop to zero. The number of PSUs entitling the participant to receive shares after the three-year term is determined in accordance with the following: One half of the PSUs allocated is multiplied by the factor resulting from the TSR Swiss Life Holding target being met, and the other half by the factor resulting from the TSR Outperformance target being met. The factor is 1 or 100% if a performance of 30% (2009 plan) or 35% (2010 plan) is achieved for the first performance criterion, the TSR Swiss Life Holding. Interim values are determined by linear interpolation. In the case of the second performance criterion, TSR Outperformance, the factor is 1 or 100% if the TSR Swiss Life Holding is equal to the median of the benchmark index (Dow Jones STOXX 600 Insurance Index). Here, too, interim values are determined by linear interpolation. The results (TSR Swiss Life Holding factor multiplied by one half of the PSUs and the TSR Outperformance factor multiplied by the other half) are added together. The sum is the number of PSUs, which translates into an entitlement to an equal number of Swiss Life Holding shares. Performance requirements for the 2010 equity compensation plan were increased over the 2009 plan to the extent that 35% performance (previously 30%) is required in the TSR Swiss Life Holding for factor 1 and at least 50% performance (previously 40%) for the maximum factor. The maximum factor was in turn increased from 1.5 or 150% to 2 or 200%.
Bonus for 2011 Other compensation in cash and Salary paid in 20122 compensation3 in cash Number Amount shares (amount)
COMPENSATION TO THE CORPORATE EXECUTIVE BOARD IN 2010 — The compensation table below shows the bonus in cash for the 2010 financial year which was determined by the Board of Directors at the beginning of 2011. It is disclosed on an accrual basis as compensation for 2010.
Amounts in CHF Compensation in cash Compensation in shares for 2010
Balance carried forward to new account 1 650 317 3 793 683
“A city like Zurich needs to be ready for all eventualities. Only then can the inhabitants have the freedom to make their own daily decisions. We need to make sure we always have enough road grit to ensure mobility and safe traffic conditions even when it is snowing. That’s why we start preparing for winter in the summer – it gives us our best chance to ensure continuity even if some things remain beyond our influence.”
Swiss Life wants to develop in Switzerland from a pure life insurer into an all-round financial protection provider and accordingly embarked on a programme in 2011, that will be implemented from 2012. The programme is built on closer and more regular client interaction and the development of our service activities. Swiss Life also wants to enhance its efficiency and make further improvements to increase its distribution capacity and profitability.
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 4 379 5 307 –17.5%
Swiss Life in Germany is expecting premium income development in 2012 to be in line with the market. Products with modern guarantee concepts, in particular the Swiss Life Champion product family, as well as the
INTEGRITY AND COMPLIANCE — Legally and ethically correct business conduct is paramount — A Code of Conduct has been in force at Swiss Life since 2006. This contains specific rules of conduct, which show employees what they must observe in relation to legal and supervisory requirements and internal instructions. Adherence to these rules is a prerequisite for legally and ethically correct business conduct.
Swiss Life employs several compliance officers, both at Group level and in the operational units. Through advice, training and monitoring, they create the basis for timely recognition and avoidance of regulatory and reputationdamaging risks. Examples are the special due diligence requirements and preventive measures to combat money laundering and the financing of terrorism. The compliance officers also ensure protection of client data and business secrets. Reputation and trust are an insurance company’s assets. The compliance units ensure that these assets are preserved through data protection and legally compliant conduct at all times. Swiss Life is an active member of the Swiss Business Data Protection Association.
Swiss Life in France has had its own foundation, the Fondation Swiss Life, since 2009. In 2011 it provided funding for concerts and art exhibitions for people in nursing homes, sick children and patients with dementia, who would not normally be able to access culture. The Fondation Swiss Life also supported various charitable projects run by Swiss Life employees for disabled children and children with leukaemia.
The foundation runs study weeks for young people from a range of age groups, where they get to experience and discover for themselves the world of research. The budding scientists also have the opportunity to submit their research to the annual national competition. Every year, the competition and study weeks bring forth new discoveries and success stories.
Since 2011, Swiss Life employees in Switzerland have been able to present, discuss, assess and develop their ideas, and their colleagues’ ideas, on a central platform – the “Ideenbooster” (idea booster). The proposals – a broad range of product innovations and process improvements – are analysed and assessed by experts and an “idea committee ”. Since the launch of the idea booster in the summer of 2011, over 200 ideas have been submitted, 28 of which won awards from the idea committee. One idea was already tested in the year under review and is set to be implemented in the first quarter of 2012.
Dodge & Cox, USA, reported in the publication of 6 March 2008 that it held through the Dodge & Cox International Stock Fund 1 645 000 registered shares, corresponding at the time to a 4.71% share of the voting rights of Swiss Life Holding.
Board of Directors and the Audit Committee – Casino de Montreux SA, Chairman of the Board of
AL Franziska Tschudi graduated in law at the University of Berne and passed her bar exam there in 1984. She studied law at Georgetown University, Washington DC, earning an LL.M. in 1986, and passed the bar exam for the US states of New York and Connecticut in 1987. Franziska Tschudi completed postgraduate studies at the University of St. Gallen (1991 to 1993), receiving an Executive MBA. After initially working as an Assistant for Media Law at the Institute for Constitutional and Administrative Law at the University of Berne, and practising business and media law in Zurich, Washington DC and Geneva, she served as Secretary General at SIG Holding AG from 1992 to 1995. She then became a Member of the Executive Board of WICOR HOLDING AG (“WEIDMANN Group”), Rapperswil in 1995, where she was Head of Corporate Development and, from 1998, Head of the Business Area Electrical Technology Asia/Pacific. She has held the positions of Chief Executive Officer and Delegate of the Board of Directors of WICOR HOLDING AG since 2001.
Board – Member of the Board of Directors of the Financial