Foreword by the Group CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Report of the Statutory Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
In a challenging environment, Swiss Life maintained adjusted profit from operations at a high level of CHF 1.57 billion in 2020 thanks to the great engagement of employees and advisors. Net profit in 2020 fell by 13% from the previous year to CHF 1.05 billion. The fee result increased compared with the previous year by 11% to CHF 601 million. Swiss Life Asset Managers and the owned advisory organisations in Germany contributed the most to this result. Swiss Life continued to expand its fee business, generating fee income of CHF 1.96 billion. Premiums came to CHF 20 billion. In its insurance business Swiss Life generated direct investment income of CHF 4.0 billion in 2020, which corresponds to a direct investment yield of 2.4%. The net investment yield was 2.2%. Swiss Life Asset Managers posted net new assets of CHF 7.5 billion in TPAM business in 2020. Third-party assets under management came to CHF 91.6 billion at the end of 2020, an increase of 10%.
In this difficult environment, the Swiss Life Group’s employees continued to do very good work in 2020. Thanks to a modern digital working environment, our teams were able to carry out their tasks as normal for our customers, despite the lockdown. Nevertheless, mainly one-off effects led to our net profit being 13% lower than in the previous year at CHF 1051 million. Our fee result was pleasing again: thanks to our advisory and investment expertise, we improved the result by 11% to CHF 601 million. At the same time, we increased the assets entrusted to us by thirdparty clients by 10% to CHF 91.6 billion. At 2.6% the new business margin, a very important value for us, was also markedly higher than the previous year (previous year: 1.9%). And with our ambition to remit cash to the holding company, we are 4% above the previous year at CHF 784 million for 2020 and thus ahead of our plans. Overall, we are proud of our business model’s resilience. It shows that we are on the right track with our strategy, which is geared to the long term.
We are privileged to be operating in a growth industry: in view of ailing public finances and longer life expectancy, private pension provision is becoming increasingly important. Pension gaps are increasing worldwide. Government debt, which continues to grow due to the coronavirus crisis, is reducing the financial leeway for social welfare institutions. The ongoing debate in Switzerland is a good example of the urgency with which pension institutions are having to adapt to present-day reality. With our claim to enable people to lead a self-determined life, we are working in an area that is highly relevant to society. Individualised pension provision enables our customers to meet their need for financial confidence and self-determination in old age and in the event of misfortunes.
These developments, together with our successes of recent years, form a strong foundation for Swiss Life’s further development. 2021 is the final year of our Group-wide “Swiss Life 2021” programme. We are doing a lot to achieve or exceed our goals. And at the same time, we are working on our plans for the next three years. We will present them to you and the public at the end of November this year. Continuity remains our business compass: profitability, increased fee results, strong solvency, effective customer access points and convincing products and services for our customers are the milestones we continue to follow. We are also forging ahead unrelentingly with the further development of our digital competence and in the area of sustainability. Here we expect demands from our customers and the legislator, to which we want to continue to respond proactively.
Thanks to our successes, the Board of Directors is able to propose to the Annual General Meeting a dividend increase from CHF 20.00 to CHF 21.00 per share for the 2020 financial year. Thank you for supporting our further development. We also wish you continued strong optimism and creativity in coping with the pandemic.
Swiss Life operates in an environment heavily influenced by regulatory and political trends as well as by socio-economic changes, such as increasing life expectancy. Results of market research performed by Swiss Life show that people find pensions a stressful topic. And most of them are aware that their financial security is largely up to them. In view of these developments, Swiss Life sees growth opportunities and differentiation potential in the market for pension solutions as well as in advice.
Swiss Life wants to address changing customer behaviour and consistently implement any findings to actively and profitably exploit market opportunities. Customers are ever better informed; they are able to compare services immediately and demand new products and services. Swiss Life wants to best combine the strengths of its broad distribution networks and advisors with the opportunities of digital change. Swiss Life derives its “phygital approach” from this targeted combination of personal advice and digital support, which is described in more detail in the “Digitalisation” section. Investing early in new technological tools and in the digital workplace has enabled Swiss Life to be there for its customers at all times, even during the restrictions imposed by the Covid-19 pandemic.
Strong network of owned IFAs especially in the Germany and International segments
Swiss Life regularly reports in detail on the current status of its strategic implementation, including during its annual and half-year reporting. The documents are available at www.swisslife.com under “Investors and Shareholders”.
Improve the efficiency ratio in the life business to below 40 basis points by the end of 2021
In its owned IFAs, achieve a distribution operating expense ratio below 25 percent by the end of 2021
Cost/income ratio in third-party asset management of approx. 75% by the end of 2021
Increase in cash remittance to the holding company to a cumulative value between CHF 2 and 2.25 billion (2019–2021)
Increase in dividend payout ratio for the shareholders to 50-60% of profit
Increase in the risk result, to between CHF 400 and 450 million by the end of 2021
Increase in cumulative value of new business (2019–2021) to over CHF 1.2 billion
Swiss Life has a strong umbrella brand. As a rule, all products and services are offered under the umbrella brand.
Independent brands with potential for a positive image transfer are at the third level. The umbrella brand or sub-brand serves as an additional textual identifier at this level.
Swiss Life will disclose its new strategic focuses and associated financial objectives after “Swiss Life 2021” at an Investor Day on 25 November 2021.
The brands are assigned to various levels in a clear brand hierarchy. The strategic management of the entire brand portfolio is an element of corporate communication. The brand hierarchy is reviewed continuously, and adjustments are made as needed.
While the umbrella and sub-brands are managed centrally, brand management for the level 3 brands Endorsement and 4 Individual brands is performed directly in the relevant divisions. The individual brand Fincentrum, which was launched in the Czech Republic and Slovakia in 2019, was renamed the Swiss Life Select sub-brand in Slovakia in 2020. In the Czech Republic, the financial advisor based in Prague will continue to operate under the Fincentrum brand.
With the online brand platform introduced in 2019, brand management is increasingly taking place in the digital arena and is thus accessible to a large internal and external group of people in a user-friendly format.
In the home market of Switzerland, Swiss Life focuses on sports and cultural sponsorship in addition to classical advertising. Swiss Life has been the main sponsor of ZSC Lions ice hockey club for several years, one of the biggest ice hockey clubs in Europe with a well-respected youth development programme. Since 2019, Swiss Life has also lent its name to the “Swiss Life Arena,” an ice hockey stadium under construction in Zurich, where the ZSC Lions will play their home games from 2022. In the cultural arena, film is the cornerstone of its commitment: Swiss Life is sponsor of the Solothurn and Locarno Film Festival.
The success of the Swiss Life brand is constantly measured on the local front by independent institutes, which review brand awareness and perception. Swiss Life also regularly assesses the anchoring of its purpose externally among the general public, among customers following interaction with Swiss Life, and also internally among its employees. The findings are continuously used to develop and adjust marketing measures.
Thanks to the great engagement shown by employees and advisors, Swiss Life maintained its adjusted profit from operations at a high level of CHF 1.57 billion in 2020 in a very challenging environment. Net profit in 2020 fell by 13% from the previous year to CHF 1.05 billion.
In insurance business, Swiss Life generated direct investment income of CHF 4.0 billion (previous year: CHF 4.4 billion). The direct investment yield was 2.4% (previous year: 2.8%). The net investment yield was 2.2% (previous year: 2.9%).
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 20 020 23 008 –13%
1 equity excl. unrealised gains/losses on financial instruments 2 incl. share buy-back (2020: CHF 29 million / 2019: CHF 913 million)
In the year under review, premiums in Swiss Life Switzerland sank, as expected, to CHF 11.0 billion in total (–18%). The high premiums in the previous year were shaped by a competitor’s withdrawal from the full insurance business. Of the total premium volume, 87% came from group life business.
According to the Swiss Insurance Association (SIA) premiums in the Swiss life insurance market were 18% higher than the previous year at CHF 24.5 billion. In group life business, premiums for the market as a whole were 22% down compared to the previous year, while premiums for individual life business were 3% below the previous year. Swiss Life’s market share of group and individual life business remained stable.
With its broad and attractive pension offering for private customers, Swiss Life was able to significantly increase new business with periodically financed savings plans in the year under review compared with 2019. The new premium-based savings solution Swiss Life Immo Elements, which was launched in autumn 2020 and enables customers to save with attractive real estate investments, also contributed to this. The share of capital-saving solutions increased again in line with the company’s strategy. There was also a positive trend in the assets under management of the pure investment solutions, where customers benefit from the proven investment expertise of Swiss Life Asset Managers.
2021 is the final year of the “Swiss Life 2021” strategic programme, the core of which is the digitally supported advisory process to improve the customer experience and advisory effectiveness, leading to more business with existing and new customers.
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 11 045 13 453 –18%
The French insurance market shrank by 12% in local currency in 2020 due to the ongoing low interest rate environment and to increasing regulation as a result of the pension reform. Savings and retirement business was down 20%, while health, death and disability insurance and property and casualty business grew by 2%. Swiss Life in France increased its premium volume by 6% to CHF 6.3 billion, while maintaining its focus on the quality and profitability of new business. Premiums in savings and retirement provisions rose by 14% in local currency. The share of premiums from unit-linked contracts was 57%, and thus about twice as high as the market average – thanks to the private insurer strategy. The contribution of unit-linked contracts to new business increased further to 69%. At the end of 2020, these contracts accounted for 45% of reserves in the life business. In health, death and disability insurance, premium volume increased by 2% as a result of strong sales momentum in death and disability. With its distribution of savings products, Swiss Life Banque Privée also made a positive contribution to business with high net worth individuals in 2020. Fee income rose from CHF 326 million to CHF 338 million in the year under review. This was due to the strong inflows, especially savings and pension business. In local currency this equates to an 8% increase.
In 2021, Swiss Life in France will continue to focus on existing customer segments, in particular by expanding its pension, health, death and disability offerings. Based on multichannel distribution, the company will drive the further development of its “phygital” model, which best combines the personal, physical customer relationship with digitalisation and services.
Swiss Life Germany posted premiums of CHF 1.4 billion in 2020. This corresponds to an increase of 5% in local currency over the previous year and is thus well above the market performance in Germany (market growth: -0.4%). The core product areas of Swiss Life Germany are employee insurance, occupational pensions, long-term care insurance and modern guarantee concepts. The unit-linked life insurance Investo was successfully expanded during the year under review. In 2020, overall new business volume increased by 15% in local currency compared to the previous year.
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 1 390 1 375 1%
In the year under review, the International segment achieved a result of CHF 78 million, a currencyrelated decrease of 4% (previous year: CHF 81 million). Fee business continues to account for the largest share by far.
Swiss Life Global Solutions will focus more on innovative approaches and digital channels in 2021 to further develop profitable new business. In financial consulting, the company focuses on increasing the number of advisors and their productivity. Accelerated and systematic digitalisation will form the basis for continuing to offer suitable, high-quality financial services and advice anytime and anywhere in the future. Through its digitalisation, Swiss Life International is targeting further growth in fee and risk business.
Assets under management for third-party clients – breakdown by asset class
Responsible and sustainable corporate governance is of central importance to the Swiss Life Group.
Swiss Life structures its corporate governance openly and transparently in the interests of its shareholders, policyholders and employees, taking account of leading national and international corporate governance standards.
The corporate governance of Swiss Life Holding Ltd (Swiss Life Holding) is based on the relevant provisions issued by the SIX Swiss Exchange and the Swiss Financial Market Supervisory Authority FINMA and is modelled in particular on the Swiss Code of Best Practice for Corporate Governance issued by the Swiss Business Federation “economiesuisse”, as well as the Organization for Economic Cooperation and Development’s (OECD) principles on corporate governance.
This report describes the essential features of corporate governance within the Swiss Life Group. The structure below largely follows the Annex to the Directive on Information Relating to Corporate Governance issued by the SIX Swiss Exchange, which came into force on 20 March 2018. The compensation report on pages 56 to 73 takes into consideration the regulations on transparency stipulated in the Compensation Ordinance and FINMA circular 2010/1 on minimum standards for remuneration schemes of financial institutions.
The companies falling within the Group’s scope of consolidation are presented in the Consolidated Financial Statements (note 35) on pages 312 to 318. Information on the listing on the SIX Swiss Exchange and market capitalisation can be found in the section “Share Performance and Historical Comparison” on pages 344 and 345. The organisational structure of the Group shows the key business markets and areas. The resulting operational responsibilities are reflected in the allocation of responsibilities among the Corporate Executive Board. With regard to in surance operations, one person with responsibility for the market and results is assigned to each specific area.
The operational management structure as at 31 December 2020 is shown on page 50.
The purchase or sale of shares or of acquisition/disposal considerations regarding shares in companies that are domiciled in Switzerland and have their shares listed in Switzerland, must be reported to the company in question and the SIX Swiss Exchange if the shareholdings exceed, fall below or reach certain thresholds. The relevant thresholds are 3, 5, 10, 15, 20, 25, 33⅓, 50 and 66⅔% of the voting rights. The details are set out in the Financial Market Infrastructure Act (FMIA) and in the implementation provisions of the Financial Market Infrastructure OrdinanceFINMA (FMIO-FINMA) and Financial Market Infrastructure Ordinance (FMIO).
The disclosures of shareholdings that exceed the disclosure threshold on the balance sheet date of 31 December 2020 are shown below. In accordance with the disclosure requirements, the percentage figures given relate to the share capital and number of outstanding shares pursuant to the Articles of Association applicable at the time of the relevant disclosure.
UBS Fund Management (Switzerland) AG, P.O. Box, 4002 Basel, Switzerland, reported in a publication of 19 November 2014 that it held 990 414 shares of Swiss Life Holding, equivalent to a 3.09% share of the voting rights.
A table showing the shareholder structure is provided in the section “Share Performance and Historical Comparison” on page 345.
In 2018 there were no changes to the share capital. The distribution of CHF 13.50 per share approved by the Annual General Meeting on 24 April 2018 was made from the capital contribution reserves.
In the year under review, on 28 April 2020 the Annual General Meeting of Swiss Life Holding approved a reduction in share capital by means of a reduction in par value of CHF 5.00 per registered share and the cancellation of 1 580 215 registered shares acquired under the 2018/2019 share buyback programme. The share capital thus fell from CHF 171 332 490.60, divided into 33 594 606 fully paid-up registered shares with a par value of CHF 5.10 each, to CHF 3 201 439.10 fully paid-up registered shares with a par value of CHF 0.10 each. The conditional capital decreased from 19 675 534.80, divided into 3 857 948 registered shares with a par value of CHF 5.10 each, to CHF 385 794.80 divided into 3 857 948 registered shares with a par value of CHF 0.10 each.
Shares 32 014 391 fully paid-up Swiss Life Holding registered shares with a par value of CHF 0.10 each were outstanding on the balance sheet date. Subject to the ten per cent limit on voting rights set out in the Articles of Association (cf. the section on “Shareholders’ participation rights” on page 74), each share grants the right to one vote at the Annual General Meeting.
Swiss Life Holding shares are not subject to any limitations on transferability. According to the Articles of Association, resolutions for the introduction, amendment or repeal of limitations on transferability must be put before the Annual General Meeting and must be approved by two thirds of the voting shares represented and by an absolute majority of the share par value represented.
As at 31 December 2020 Swiss Life Holding and its Group companies had not granted any options on rights to participate in Swiss Life Holding.
The Board of Directors is responsible for all matters that are not reserved for the consideration of the Annual General Meeting (formally the supreme decision-making body of a public limited company) under the terms of the law (Art. 698 of the Swiss Code of Obligations CO) or by the company’s Articles of Association. In line with its non-transferable duties prescribed by law, the Board of Directors is responsible, in particular, for the ultimate direction of the Group, as well as the supervision of the Corporate Executive Board.
The Board of Directors consists of no fewer than five and no more than 14 members in accordance with the Articles of Association. The Chairman, other members of the Board of Directors and members of the Compensation Committee of the Board of Directors are elected by the Annual General Meeting on an individual basis for a one-year period. The term of one year is deemed to signify the period from one Annual General Meeting up to and including the next. Members whose terms of office are expiring are eligible to stand for immediate re-election.
1 Change since AGM of 23 April 2014 due to the Minder Initiative: in accordance with Articles 3, 4 and 29 of the Ordinance against Excessive Compensation in Listed Stock Companies (VegüV), the General Meeting of Shareholders shall elect the members and the Chairman of the Board of Directors individually every year for a term of office of one year each. Furthermore, in accordance with Articles 7 and 29 of the VegüV, the members of the Compensation Committee are also to be elected individually for a term of office of one year each.
Frank Schnewlin will step down from the Board of Directors, of which he has been a member for twelve years, at the next Annual General Meeting of Swiss Life Holding on 23 April 2021 due to reaching the statutory age limit.
Other appointments: – Cembra Money Bank AG, Member of the Board of Directors and Member of the
Chairman of the Board of Directors – Renaissance KMU Schweizerische Anlagestiftung, Member of the Board of Trustees – Emaform AG, Member of the Board of Directors – Mobilejobs AG, Chairman of the Board of Directors – Bomatec Holding AG, Member of the Board of Directors – F&P Robotics AG, Member of the Board of Directors – CT Cinetrade AG as well as Teleclub AG and Kitag AG, Member of the Board of Directors
Frank W. Keuper will be put forward for re-election as Member of the Board of Directors at the Annual General Meeting of Swiss Life Holding on 23 April 2021.
Stefan Loacker will be put forward for re-election as Member of the Board of Directors at the Annual General Meeting of Swiss Life Holding on 23 April 2021.
Other appointments: – Vontobel Holding AG and Bank Vontobel Ltd, Member of the Board of Directors and
Chairman of the Audit Committee – Swiss Olympic Association, Vice Chairman of the disciplinary chamber in charge of doping cases
Other appointments: – Siegfried Holding Ltd, Vice Chairman of the Board of Directors – Repower AG, Member of the Board of Directors – Engadiner Kraftwerke AG, Chairman of the Board of Directors – Elettricità Industriale SA, Chairman of the Board of Directors – Calanda Holding AG, Chairman of the Board of Directors – Fontavis AG, Member of the Board of Directors – Dogger Ltd, Member of the Board of Directors – The Association of the Swiss Natural Gas Industry (Verband der Schweizerischen
Other appointments: – Biomed AG, Member of the Board of Directors – economiesuisse, Member of the Executive Board – Energie Zürichsee Linth AG, Member of the Board of Directors (since March 2020) – Swissmem, Member of the Executive Board – Commercial Court St. Gallen, part-time commercial judge
Klaus Tschütscher — Born 1967, Liechtenstein national Member of the Board of Directors bild Klaus Tschütscher studied law at the University of St. Gallen and obtained a doctorate (Dr. iur.) in 1996. In 2004 he also completed a postgraduate LL.M. degree in International Business Law at the University of Zurich, specialising in banking, capital market and insurance law. He started his career in 1993 as a research assistant at the University of St. Gallen. Two years later he became Head of Legal
Services and Deputy Director of Liechtenstein Tax Administration. In this function he was notably a Member of the Liechtenstein OECD delegation and Governor of the European Bank for Reconstruction and Development (EBRD) in London for four years. Klaus Tschütscher went on to start his political career as a Member of government of the Principality of Liechtenstein. Initially he was Deputy Prime Minister from 2005 to 2009, responsible in particular for Justice and Economic Affairs. From 2009 to 2013 Klaus Tschütscher was Prime Minister and Finance Minister of Liechtenstein. He has received various awards and international distinctions. Klaus Tschütscher serves as Vice President and delegate at UNICEF Switzerland and Liechtenstein. Since his withdrawal from politics, Klaus Tschütscher has been a member of the Board of Directors of Swiss Life Holding Ltd. Since January 2014 he has been Owner and Chairman of the Board of Directors of Tschütscher Networks & Expertise AG and supports various start-ups.
Klaus Tschütscher will be put forward for re-election as Member of the Board of Directors and as Member of the Compensation Committee at the Annual General Meeting of Swiss Life Holding on 23 April 2021.
Frank Schnewlin (born 1951) will step down from the Board of Directors at the next Annual General Meeting on 23 April 2021, due to reaching the statutory age limit. The other members of the Board of Directors will be put forward for re-election.
The Board of Directors met eleven times during the year under review. The meetings lasted around two-and-a-half hours on average. All members of the Board of Directors attended all the meetings. The Group CEO and the other members of the Corporate Executive Board were present at all the meetings apart from one, when a member of the Corporate Executive Board was unable to attend. The Board of Directors conducted parts of the meetings among themselves.
The Chairman’s Committee held seven meetings during the year under review. Each session lasted for just under two hours on average. The meetings were attended by all members. The Group CEO and Group CFO attended all the meetings.
The Compensation Committee generally consists of three members, who are elected by the Annual General Meeting. All members of the Compensation Committee are independent members of the Board of Directors. A Board of Directors member is regarded as being independent if he has not exercised any operational management role within the Swiss Life Group for at least three years and has no or only a minor business relationship with the Group.
At the Annual General Meeting on 23 April 2021 the following will be proposed as members of the Compensation Committee: Franziska Tschudi, Klaus Tschütscher and Martin Schmid. It is planned that Klaus Tschütscher will take over as Chairman of the Compensation Committee following the 2021 Annual General Meeting.
Eleven meetings of the Investment and Risk Committee were held in the year under review. Each session lasted for around one-and-a-half hours on average. All members attended all the meetings. The Chairman of the Board of Directors was also present at all the meetings with one exception. The Group CEO and Group CIO attended ten meetings of the Investment and Risk Committee and the Group CFO attended all eleven meetings. The Group CRO also attended all the meetings.
It is planned that the Investment and Risk Committee will be constituted as follows once voting has been completed at the Annual General Meeting of 23 April 2021: Ueli Dietiker as Chairman, Thomas Buess, Damir Filipovic, Frank W. Keuper and Stefan Loacker as Members.
Generally, the Group CFO and the Head of Corporate Internal Audit attend the Audit Committee meetings or parts of the meetings in an advisory capacity. The Group CEO may attend the meetings of the Audit Committee (without voting rights). Representatives from the external audit services are also regularly invited (cf. also “Supervisory and control instruments vis-à-vis the auditors”, page 77). In addition, further members of the Corporate Executive Board or in-house specialists may also be invited to attend. The Audit Committee meets at least four times a year. The frequency of meetings depends on the financial budgeting and reporting process.
In the year under review, the Audit Committee convened six times, with a meeting lasting about two hours on average. There was full attendance at all meetings. The Chairman of the Board of Directors, with one exception, attended all the meetings of the Audit Committee. The Group CEO attended five and the Group CFO attended all the meetings. The Head of Corporate Internal Audit, as well as representatives of the external auditors, attended all meetings.
It is planned that the Audit Committee will be constituted as follows once voting has been completed at the Annual General Meeting of 23 April 2021: Stefan Loacker as Chairman, Adrienne Corboud Fumagalli, Henry Peter, Martin Schmid and Klaus Tschütscher as Members.
In accordance with the audit plan approved by the Audit Committee, Corporate Internal Audit draws up topic-related audit reports, which are distributed to the Chairman of the Board of Directors, the Members of the Audit Committee and the competent management staff and persons in charge of the audited area. In addition, Corporate Internal Audit prepares a written quarterly report for the attention of the Audit Committee at least four times a year. Qualitative risk management is generally discussed by the Audit Committee at least twice a year.
The organisation and division of tasks within the Corporate Executive Board generally reflects the key business areas and functions. The members of the Corporate Executive Board have a direct management role with functional management responsibility for cross-divisional competencies. The members of the Corporate Executive Board are responsible for setting objectives, financial planning, HR management and achievement of objectives within their area. They issue directives for their area within the context of legal and regulatory requirements, the relevant regulations and the directives valid for the Group as a whole.
Patrick Frost — Born 1968, Swiss national Group Chief Executive Officer (Group CEO)
bild Patrick Frost studied at the ETH in Zurich and the universities of Cologne, Basel and Zurich, obtaining degrees in natural science (dipl. Natural Science (dipl. Natw. ETH), economics (Dr. rer. pol.) and law (lic. iur.)). He began his career in the mid-nineties as an analyst and subsequently as a Portfolio Manager in asset management for Winterthur Group. After two years in the US as a Corporate
Markus Leibundgut — Born 1969, Swiss national Chief Executive Officer Switzerland (CEO Switzerland)
Markus Leibundgut was appointed Chief Executive Officer Switzerland (CEO Switzerland) in April 2017. He continues as a Member of the Corporate Executive Board of the Swiss Life Group.
bild Charles Relecom graduated from the University of Namur (Belgium ) with a degree in mathematics and went on to gain a master’s degree in Actuarial Science at the University of Louvain (Belgium). He began his career in 1978 as Chief Actuary and Chief Technology Officer at Swiss Life in Belgium. In 1984 he moved to the head office in Zurich, where he played a significant role in setting up the International Division. From 1988 to 1994 he worked for ELVIA Life as Director of Sales in the key accounts business. In 1994 he moved to «La Suisse« and, in 1998, was appointed CEO of the non-life business and Chief Actuary. In 2000 he became the CEO of «La Suisse», a position he held until 2005 when the company was integrated into the Swiss Life Group. Following the integration, Charles Relecom returned to Swiss Life in Belgium, initially as the CEO of Zelia S.A. and, from February 2006, as CEO for the entire Belgian business.
Other appointments: – French Insurance Association (FFSA), Member of the Board of Directors – Group Mutuel Holding AG, Member of the Board of Directors
Since July 2017, Jörg Arnold has been Chief Executive Officer Germany (CEO Germany) and Member of the Corporate Executive Board of the Swiss Life Group.
Since September 2014, Stefan Mächler has been Group Chief Investment Officer (Group CIO) and Member of the Corporate Executive Board of the Swiss Life Group.
Nils Frowein — Born 1964, German national Chief Executive Officer International (CEO International)
Charles Relecom (67), CEO France, will hand over his executive function in the Corporate Executive Board to Tanguy Polet on 1 March 2021.
Pursuant to the Articles of Association, the General Meeting of Shareholders is responsible for approving the maximum total amount of fixed compensation for the Board of Directors until the next General Meeting. The General Meeting of Shareholders also votes on a prospective basis on the maximum amount of the fixed compensation and the long-term variable compen sation component (equity compensation plan) for the Corporate Executive Board for the next financial year. By contrast, the short-term variable compensation component for the Corporate Executive Board is submitted for approval to the General Meeting of Shareholders on a retrospective basis for the previous financial year, in full cognisance of the respective business figures.
Since 2009, Swiss Life has given shareholders the opportunity to hold a separate advisory vote at the General Meeting on the compensation report for the relevant financial year. The outcome of the vote is of material importance for the Board of Directors in their assessment and structuring of compensation.
At the General Meeting of Shareholders of 28 April 2020, the following compensation was approved for the Board of Directors and Corporate Executive Board: – For the Board of Directors: The maximum total amount of fixed compensation until the next Annual General Meeting in 2021 in the amount of CHF 3 200 000 in total.
– For the Corporate Executive Board: The short-term variable compensation component for the 2019 financial year in the amount of CHF 4 290 000 in total (bonus and deferred compensation in cash), determined by the Board of Directors at the beginning of 2020 in view of the 2019 annual results, and the maximum total amount of the fixed compensation and the long-term variable compensation component (equity compensation plan) for the 2021 financial year in the amount of CHF 13 800 000 in total.
In the same way, the General Meeting on 23 April 2021 will be asked to approve the exclusively fixed compensation to be paid to the Board of Directors until the 2022 Annual General Meeting, the short-term variable compensation component for the Corporate Executive Board for the 2020 financial year and the maximum total amount of fixed compensation (basic salary incl. ancillary benefits and occupational provisions) and of the long-term variable compensation component (equity compensation plan) for the 2022 financial year.
The proposed budget/maximum amount for the fixed and long-term variable compensation for the Corporate Executive Board for the 2022 financial year represents an upper limit, which would only be exhausted in the case of exceptional business performance. The Board of Directors will determine the fixed compensation and the long-term variable compensation component for the Corporate Executive Board at the beginning of 2022 and will detail the key underlying factors in the respective compensation report, on which the shareholders can in turn hold an advisory vote.
Additional information on compensation and benefit expenditure for the management and employees of the Swiss Life Group can be found in the Consolidated Financial Statements (notes 23 and 29 on pages 270 to 280 and 294 to 295). The information according to Art. 663c of the Swiss Code of Obligations regarding the shareholdings of members of the Board of Directors and the Corporate Executive Board is shown in the Notes to the Swiss Life Holding Financial Statements on pages 335 to 337.
Qualitative goals relate in particular to project, risk management or compliance goals and to leadership, sustainability and ESG (environmental, social, corporate governance) requirements. This also includes optimising diversity within the Swiss Life Group, particularly with regard to reducing sustainability risks in general.
Pursuant to the Organisational Regulations, the Board of Directors as a whole is responsible for determining the level and make-up of compensation for its members, whereas the Compen sation Committee is responsible for putting forward appropriate proposals (for the internal organisation of the Board of Directors see “Internal organisational structure”, pages 45 to 48). The Board of Directors as a whole also establishes the guidelines for the company’s compensation policy. In doing so, it takes into consideration the compensation policies of other companies in the financial services industry, drawing its findings from publicly available information and studies by independent external experts. Comparable companies in the insurance sector in Switzerland used for the purposes of providing relevant information for the current compensation policy included Allianz, AXA, Baloise Insurance, Swiss Re, Zurich Insurance Group and Helvetia.
The Board of Directors as a whole sets the level and distribution of the variable compensation pool for all employees on the basis of its compensation policy guidelines at the proposal of the Compensation Committee. When determining the level of the allocation, it takes into consideration the annual result, as well as medium-term planning and the degree of target achievement.
Since 2011 participants in the equity compensation plan have been allocated Restricted Share Units (RSUs) on 1 April (2011–2013 equity compensation plans) or on 1 March (equity compensation plans from 2014). The RSUs grant the holder future subscription rights, entitling them to receive Swiss Life Holding shares free of charge after a three-year period has elapsed. The attribution of shares after the expiry of the three-year deferral period is effected on a 1:1 basis (1 RSU = 1 share): the plan is therefore very simple, transparent throughout the whole term and directly linked to the performance of the Swiss Life share price. The value of RSUs during the three-year term develops linearly with the Swiss Life Holding share price and thus symmetrically corresponds with shareholder interests. In all, 58 members of Swiss Life Group senior management participated in the 2017 equity compensation plan, in which a total of 43 768 RSUs were allocated: 12 177 in total to the Corporate Executive Board, of which 3017 to Patrick Frost, in his capacity as Group CEO. A total of 57 members of Swiss Life Group senior management participated in the 2018 equity compensation plan. A total of 42 950 RSUs were allocated: 11 454 in total to the members of the Corporate Executive Board, of which 2828 RSUs to Patrick Frost as Group CEO. 65 persons participated in the 2019 equity compensation plan and a total of 40 840 RSUs were allocated: 10 237 in total to the Corporate Executive Board, of which 2496 to Group CEO Patrick Frost. Altogether 62 persons participated in the 2020 equity compensation plan, in which a total of 51 553 RSUs were allocated: 10 993 in total to the Corporate Executive Board, of which 2519 to Group CEO Patrick Frost. Under the 2021 equity compensation plan, a total of 37 436 RSUs were allocated to 54 members of Swiss Life Group senior management; members of the Corporate Executive Board received a total of 10 637 RSUs, of which 2409 were allocated to Group CEO Patrick Frost.
The 2019, 2020 and 2021 equity compensation plans are based on the new Group-wide programme “Swiss Life 2021”, which was announced at the Swiss Life Group’s Investor Day on 29 November 2018 (see www.swisslife.com/investorday2018). For the purpose of supporting the achievement of the respective corporate goals, the performance criteria have been determined by the Board of Directors as follows: IFRS profit (50% weighting), the risk and fee result (25% weighting), Cash to Swiss Life Holding (25% weighting).
In accordance with the Group-wide programme “Swiss Life 2021” (financial years 2019–2021) the following target values were communicated in relation to these performance criteria: IFRS profit/equity ratio of 8–10%, risk result of CHF 400–450 million in 2021, fee result of CHF 600–650 million in 2021 and cash remittance to Swiss Life Holding of CHF 2.00–2.25 billion cumulatively in 2019–2021. On this basis the Board of Directors determined the specific performance targets applicable to the 2019, 2020 and 2021 equity compensation programmes pursuant to the 2019–2021 MTP (2019 equity compensation programme) and the 2020–2022 MTP (2020 equity compensation programme) or MTP 2021–2023 (2021 equity compensation programme). These MTP target values cannot be disclosed for reasons of business secrecy. The respective specific target values have been set on a basis consistent with the “Swiss Life 2021” Group-wide programme, taking account of the current business development, with comparatively at least equally high requirements for target achievement.
2 This includes the compensation of CHF 16 000 for the membership of the Board of Directors of Fontavis AG, a 100% subsidiary of Swiss Life Investment Management Holding AG. 3 The allocation of shares was effected on 18.06.2020 and 17.12.2020 at the stock exchange closing price of CHF 355.40 and CHF 409.00 respectively. Taking into account the blocking period of three years, the economic value, which is equal to the tax value, is CHF 298.4009 and CHF 343.4046 respectively. 4 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
4 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
For the 2020 financial year, the General Meeting of Shareholders of 30 April 2019, as mentioned at the start of the present Compensation Report, had approved a maximum total amount of the fixed compensation and the long-term variable compensation component (equity compensation plan) for the Corporate Executive Board of CHF 13 800 000, based on the Articles of Association applicable on 1 January 2015. In line with this, the Board of Directors accordingly set a fixed compen sation at the beginning of 2020 (basic salary incl. ancillary costs and occupational provisions ) of CHF 8 335 528 in total for the members of the Corporate Executive Board. It also granted future subscription rights worth CHF 4 146 999, as long-term variable compensation under the 2019 RSU plan, to the members of the Corporate Executive Board, on 1 March 2020, for the extraordinarily good performance in 2019, when Swiss Life again increased its operational effectiveness and achieved profitable growth. The subscription rights allocated under the 2020 RSU plan entitle the holder to receive Swiss Life Holding shares following a three-year vesting period, provided the requirements are satisfied at that point. The approved budget for the 2020 financial year was applied to the sum of CHF 12 482 527, in view of the excellent business development.
In addition to Group CEO Patrick Frost, six persons were members of the Corporate Executive Board during the 2020 reporting period, as reported in the compensation table below.
The long-term variable compensation component in the form of the equity compensation plan (RSU plan 2021) is also reported in the compensation table for the 2020 financial year, which serves as the basis for the amount of the allocation and the corresponding number of allocated RSUs (accrual method).
The variable compensation for the members of the Corporate Executive Board reflects the excellent business development. The variable compensation components in the year under review amounted to around 138% of the fixed basic salary of the Group CEO and around 116% of the fixed basic salaries of the other Corporate Executive Board members. The variable compensation relative to the fixed basic salary is thus well below the statutory maximum of 181%.
The stated amounts do not include social security contributions (AHV/IV/ALV/FAK) payable by the employer under the law. The respective expenditure is shown in footnote 6 of the 2020 compensation table.
Following the 2020 compensation table, the details of the compensation for 2019 are stated in a separate table for comparison.
No compensation was paid to closely linked parties in the year under review.
1 audited 2 “Closely linked parties” are natural persons and legal entities (in the sense of Art. 678 of the Swiss Code of Obligations and Art. 16 of the Compensation Ordinance) that have close personal, economic, legal or de facto ties with members of governing bodies. This typically includes spouses, minor children, companies controlled by members of governing bodies, and natural or legal persons serving as members of governing bodies in a fiduciary capacity.
As at the balance sheet date of 31 December 2020, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of registered Swiss Life Holding shares and future subscription rights to Swiss Life Holding shares in the form of Restricted Share Units (RSU): Board of Directors
SLH shares 1 Total number of RSUs allocated in the years 2018, 2019 and 2020 in connection with the relevant equity compensation plan. The RSUs represent future subscription rights that entitle the individuals concerned to receive SLH shares after a period of three years, provided that the relevant conditions are met at that point. In addition to the reported shareholding, Thomas Buess held a total of 2861 RSUs as at the balance sheet date of 31 December 2020, which were allocated to him in 2018 and 2019 in the context of his former function as Group CFO and Member of the Corporate Executive Board of Swiss Life.
Shareholdings as well as future subscription rights to Swiss Life Holding shares as at 31 December 2019 are shown in the Notes to the Swiss Life Holding Financial Statements on page 337.
In the form of an overview, the following additional information is provided on the Swiss Life Group compensation systems for the 2020 financial year: In CHF (unless otherwise indicated)
Board of Directors, Executive Board and persons whose activities have a significant influence on the risk profile of the company
Board of Directors’ responsibility The Board of Directors is responsible for the preparation and overall fair presentation of the compensation report in accordance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance ). The Board of Directors is also responsible for designing the compensation system and defining individual compensation packages.
The rules set out in the Articles of Association for convening an Annual General Meeting and drawing up the agenda comply with the stipulations of the law. Shareholders who represent at least 0.25% of the share capital can submit a written request within a time limit published in advance by Swiss Life Holding for the inclusion on the agenda of an item for discussion, together with the relevant motions. The written application must be accompanied by a blocking certificate issued by a bank to confirm that the shares are deposited with it until after the Annual General Meeting.
Based on a corresponding authorisation in the Articles of Association, the presiding officer at Swiss Life Holding’s Annual General Meeting generally requests that votes be taken electronically. Swiss Life Holding uses a certified electronic voting system which permits balloting with remotecontrolled handsets and records the exact number of voting shares represented.
No contractual provisions exist in favour of the Board of Directors or the Corporate Executive Board with regard to changes in control of the company.
PwC confirms that it meets the legal requirements concerning professional qualification and independence.
Duration of the mandate and term of office of the lead auditor
The Articles of Association stipulate that the external auditor is to be elected by the Annual General Meeting for one financial year at a time. When Swiss Life Holding was established in 2002, PwC was named statutory auditor and Group auditor. Since then PwC has been elected without fail. PwC has also acted as statutory auditor for Swiss Life Ltd since 1994. Swiss Life Holding last invited tenders for its statutory auditor and Group auditor mandate for the 2008 financial year. On completion of the evaluation process, the Board of Directors, in accordance with the proposal of the Audit Committee, again nominated PwC as its statutory auditor and Group auditor at the Annual General Meeting.
PwC invoiced additional fees of approximately CHF 0.3 million in 2020 (prior year CHF 0.9 million ), for services in the areas of risk management, taxes, fiscal and legal consulting and other advisory services. All services were performed in compliance with the relevant independency regulations set out in the Swiss Code of Obligations, the Audit Supervision Act and FINMA circular 2013/3, “Auditing”.
A key pillar of Swiss Life’s responsible and sustainable business is its integrated, value-oriented risk management involving both quantitative and qualitative elements. The goal is to protect customers’ funds and ensure the best possible investment of risk capital, while complying with regulatory requirements and taking account of the persistently challenging capital market environment.
Risk management is a key component of Swiss Life’s management process. The responsible committees of the Corporate Executive Board and the Board of Directors continually monitor and manage risks, and their decisions are then incorporated into the annual planning process. On the one hand they conduct qualitative assessments of strategic risks, as well as evaluating operational risks, the internal control system (ICS) and measures aimed at continually improving information and system security. On the other hand, they also cover quantitative elements, such as risk tolerance of the Swiss Life Group, risk budgeting for the insurance units and Asset Liability Management’s investment strategy. The Board of Directors employs a limits framework based on solvency ratios and economic capitalisation to determine Swiss Life’s risk appetite. Limits for the financial risks taken by the individual business units are based on local regulatory provisions and risk appetite at Group level, and are used to determine their investment objectives.
Emerging risks are a key element of strategic risk: they are regularly analysed and assessed in various risk categories. Examples of such risk categories include demographic and social transformation as well as political or regulatory changes. Any risks in connection with the environment, human rights and governance are also included in the comprehensive risk profile and assessed in the emerging risk process.
Swiss Life – Annual Report 2020 tionally recognised standard “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
As part of its Group-wide sustainability programme, Swiss Life is also integrating sustainability and climate aspects into its existing risk management frameworks for the management of the business. Aside from uncertainty about new regulatory requirements, Swiss Life does not currently deem the physical and transitory risks of the transition to a climate-compatible society to
Swiss Life – Annual Report 2020 be strategic risks for the business model. In addition to its annual business and sustainability report, Swiss Life publishes a climate report based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The climate report, which describes how climate risks are being addressed, is available online at www.swisslife.com/reports.
Solvency model The standard Swiss Solvency Test (SST) model, with company-specific adjustments, is used to determine regulatory solvency. SST sets out the capital requirements valid for insurance companies and groups in Switzerland. The SST capital requirements are based on the understanding that insurers will meet their obligations towards policyholders even under difficult conditions. In addition to this solvency model, Swiss Life calculates economic solvency based on an internal model for capital and solvency as the standard model is too simplified to be used for business management. Monitoring of solvency in accordance with the solvency model and the internal model for capital and solvency is performed continuously. Calibration is based on the full SST calculations at the beginning of the calendar year.
Economic assessment Swiss Life uses an integrated approach to risk and capital management. The economic capital of a life insurance company for its shareholders comprises its economic net worth and the present value of future profits. The economic capital is determined bottom-up for each large business unit and takes into account market, credit and insurance risks. These risks are calculated on the basis of loss distributions using a specified risk measure. The overall capital requirement is obtained by taking into consideration respective diversification effects.
Foreword by the Group CEO .............................................................................................................................85 Sustainability at Swiss Life ................................................................................................................................86
Sustainability in Society ..................................................................................................................................112 Economic Responsibility ............................................................................................................................113 Political Commitment .................................................................................................................................114 Corporate Citizenship .................................................................................................................................116
Sustainability as an Employer ........................................................................................................................118 Leadership and Employee Communication .........................................................................................119 Employee Retention ..................................................................................................................................... 123 Training and Development ....................................................................................................................... 125 Talent Development ......................................................................................................................................127 Collaboration and Diversity ......................................................................................................................129 Health and Safety ..........................................................................................................................................132 Social Partnership .........................................................................................................................................135
With our advice, services and products, we enable people to lead a self-determined life. We assume risks for our customers, invest capital over the long term and provide them with comprehensive advice. Our customer relationships often last for several decades – so we think and act in the long term. That’s why we see sustainability as an integral part of our business.
– We are continually making our real estate portfolio more sustainable through new projects and targeted measures for existing properties.
– Good governance, diligence and responsible conduct form the basis for successful business operations and for long-term and sustainable customer and business relationships.
– As a pension provider, Swiss Life assumes social and economic responsibility and is in active dialogue with associations, authorities and politicians.
– With its own foundations, Swiss Life supports projects and institutions in the fields of culture, science, education and the environment and research that promote self-determination and confidence.
– In its own operations, Swiss Life has set itself goals for the reduction of CO2 and fossil fuels, among other things. They apply to the entire Swiss Life Group.
Corporate governance Combating corruption and fair competition Corporate citizenship Human rights Sustainable procurement
Risk management Profitability and growth Products, services and advice People centricity Responsible investing Responsible real estate management Data protection and information security Digitalisation
(GRI 102-47) To enhance readability, the dimension “Impact on sustainable development” is not directly integrated into the materiality matrix.
Swiss Life’s materiality matrix shows which topics are relevant for Swiss Life and its stakeholders. The materiality analysis forms the basis for the annual sustainability reporting.
Swiss Life has reported on the basis of the Global Reporting Initiative’s standards since 2016. In 2015 it produced the first version of its materiality matrix in a multi-step materiality process involving internal and external stakeholders. Since then, the matrix has been continuously refined. In 2019, Swiss Life performed an extensive re-evaluation of the key topics to reflect the various stakeholders’ changing expectations, developments in its business environment and the latest standards (see Annual Report 2019, pages 8–85; GRI 102-46).
Profitability and growth Swiss Life’s business model is aligned to long-term, profitable growth within the framework of the corporate strategy, focusing on profit growth and quality, efficiency, and financial strength.
Responsible investing Swiss Life’s investment strategy has a long-term and sustainable focus. The company’s investment policy is oriented towards long-term and stable returns. In addition to its legal obligations, Swiss Life observes ethical principles and environmental, social and governance (ESG) topics.
Economic responsibility As a corporation, Swiss Life takes social and economic responsibility by enabling its customers to lead a self-determined life. As a long-term investor, Swiss Life contributes to the stability of the financial centre. Swiss Life also meets its social and economic responsibility in its role as an employer and taxpayer.
Environmental and climate protection Swiss Life places a high value on operational ecology and climate protection. As a real estate owner and in its business operations, Swiss Life places importance on efficient use of resources, renewable energy and measures to reduce CO2 emissions.
1 This topic is discussed in the Annual Report in the section “Strategy & Brand” from page 8. 2 This topic is discussed in the Annual Report in the section “Corporate Governance” from page 28.
Corporate citizenship Swiss Life fosters contacts with representatives of its political and business world and liaises with trade and umbrella associations. In addition, Swiss Life is committed to projects and institutions in the areas of culture, science, education, the environment and research.
Human rights Swiss Life prioritises high social standards in its own operations and expects similar standards from its business partners and suppliers. As a co-signatory of the “UN Global Compact” Swiss Life pledges, notably, to respect human rights.
Sustainable procurement Swiss Life requires its procurement to comply fully with the law. When selecting suppliers and partners, Swiss Life bases its decisions on ethical, social and ecological principles and works with local suppliers whenever possible.
The economic performance and sustainable profitability of Swiss Life are fundamental to the long-term success and sustainability of its corporate management. Thanks to consistent implementation of its strategy, Swiss Life has successfully completed its last three Group-wide programmes since 2009.
Swiss Life’s business model is aligned to the long term. It is committed to keeping the promises made to its customers over the decades. That is why sustainable, long-term investing plays a central role in the life insurance business. Swiss Life has geared its investment strategy to ensuring that the interest margin remains positive for more than three decades, even if interest rates stay low. In addition, Swiss Life has continuously developed its business in recent years. With its successful enhancement of asset management for third parties, growth in advisory channels, modern products and targeted acquisitions, Swiss Life has significantly increased the contribution made by so-called fee business in recent years, and thus reduced its dependency on the investment result. In addition to the focus on profitability, capital efficiency remains a relevant control parameter in new insurance business.
What Swiss Life does is relevant for people: it enables its customers to lead a self-determined life, thus ensuring security and confidence. People are central to everything Swiss Life does. The services that Swiss Life provides are geared to people’s needs and address them as individuals.
Swiss Life continuously assesses customer satisfaction at the key contact points. Directly following interaction, customers are asked at selected contact points about their experience, satisfaction and willingness to recommend Swiss Life. Anyone who gives a negative response is contacted within 48 hours. This allows Swiss Life to ensure it has understood the reasons for a negative review and can offer the customer a solution. Customer satisfaction is surveyed in close collaboration with an independent market research institute.
The Swiss Life NPS has in almost all cases improved significantly at the key contact points – Consulting and Service Center – over the past four years, thanks to regular customer feedback analysis and the improvements derived from it.
The NPS at the Consulting contact point improved for the most part in 2020. This was partly due to the flexibility of advisors and clients and their ability to swiftly adapt to the situation resulting from the Covid-19 pandemic in 2020. Thanks to the fully digitalised advisory platform combined with competent, personal advice, the customer experience improved further, even in this exceptional year.
At the Service Center contact point, the NPS increased significantly, especially in Germany. Process optimisations and the introduction of independent quality assurance by employees produced this clear improvement. Customer feedback is regularly analysed and used to enhance processes. In France, where the NPS is still negative, a project to optimise customer experience over the telephone was initiated in 2020.
In 2020, priority was given to digital support for customer relationships and data management. Among other things, online portals are now available for customers in several divisions. They thus have the opportunity, for example, to manage contact data themselves or to gain faster access to important financial information. In addition, key documents can also be signed digitally, which shortens the processing time.
In addition to a customer-focused consulting approach, Swiss Life pays great attention to extensive and understandable documentation. In addition to product documents on various insurance and provisions topics on the local websites or customer portals, supporting video sequences are available along with publications for download.
Swiss Life makes sure that it can deliver its value proposition through mandatory Group-wide regulations that are implemented through corresponding local directives: – The specific structure of products and services is based on Group-wide standards and stringent compliance with local regulatory requirements and local laws. The ability of the local Compliance teams to make adjustments, even to existing products and services, is guaranteed. Groupwide standards for the development of products and services are also adapted to framework conditions as required.
In the reporting year, Swiss Life further developed its Group-wide approach for the integration of sustainability criteria in the insurance area. Swiss Life’s underwriting process ensures on an ongoing basis that the insured portfolio complies with the company’s fundamental standards and values. Risk underwriting is in keeping with the regulatory requirements and with Swiss Life’s commitment to holistic and value-oriented risk management. At the same time, Swiss Life consistently takes ESG (environmental, social and good governance) factors into account.
Life insurance and risk products make a significant contribution to a self-determined life for insured persons. Moreover, these products play a significant role in occupational pensions in many developed markets. Prior to signing a contract, Swiss Life evaluates ESG factors as part of the risk assessment in addition to the medical and financial aspects. Recognising its social responsibility, Swiss Life seeks to provide insurance cover for all legitimate companies and individuals. It is thus selective in the way it decides on any rejections or exclusions on the grounds of sustainability. Swiss Life insures people and does not wish to exclude them from any relevant insurance cover because their employer falls short in terms of sustainability. If Swiss Life identifies any ESG-related deficiencies during its risk assessment, it seeks to sensitise its customers to the topic through dialogue along with information. If indications of a lack of respect for human rights are identified during the risk assessment, this may lead to the insurance application being rejected following clarification with the applicant.
As a pensions and financial services company, Swiss Life puts people at the centre of its business. The same applies to digitalisation. The roughly 15 800 advisors who conduct Swiss Life’s dialogue with customers have access at all times to digital solutions that support them in the advisory process. Personal contact remains a decisive factor in this regard. This purposeful combination of personal advice and digital support is at the root of Swiss Life’s “phygital approach”.
In addition to its personal advice, Swiss Life offers its customers access to, among other things, online portals, where they can view their documents anytime and anywhere, make appointments, request offers and make changes quickly and unbureaucratically. Online tools are also provided so that customers can simulate scenarios on their own. They can decide how they want to interact with Swiss Life and choose their own mode of access. Swiss Life applies industry standards and uses digital solutions to avoid discontinuities in the use of media and guarantee high quality.
It also makes increasing use of digital platforms within the company. Group-wide collaboration software makes it possible to hold internal and external meetings in virtual rooms and to jointly edit or share files. Thanks to early investments in the digital workplace and mobile working, Swiss Life was able to continue operating across organisational and divisional lines during the Covid-19 pandemic. This enabled Swiss Life to safeguard business processes at all times and to remain available for its customers and partners.
Swiss Life is an asset manager for its proprietary insurance companies and for third-party clients, such as pension funds, other insurers and private investors. The long-term protection of customer funds and the optimal allocation of risk capital are the main objectives. Invested assets must be secure, profitable and liquid in their entirety. Due to the long-term nature of its liabilities, Swiss Life invests predominantly in fixed-income securities such as government and corporate bonds as well as in real estate, equities and infrastructure. Its investment decisions have always been informed by a long-term assessment of risks and returns.
As a major investor, Swiss Life is committed to ensuring that direct investments in its portfolio are in line with Swiss Life’s fundamental standards and values. As a signatory to the UN Global Compact, Swiss Life is committed among other things to the fundamental principles for respecting human rights and protecting the environment.
In the investment process for securities – for example, shares and corporate and government bonds – Swiss Life uses, among other things, analyses by an independent international ESG research and valuation service provider. ESG information on over 14 000 share and bond issuers worldwide helps Swiss Life to swiftly identify and anticipate the risks relating to environmental and social issues as well as governance aspects. This ensures early recognition of risks arising from ESG problems such as infringements of labour law, shortcomings in corporate governance and indications of corruption or environmental risks relating to climate change. Swiss Life sets ESG thresholds based on external ratings to steer clear of issuers with a poor ESG performance. Specifically, issuers that have a low ESG rating or are involved in serious ESG controversies are avoided. In its credit analyses for fixed-income investment issuers, Swiss Life takes into account climate indicators such as carbon footprints in addition to ESG ratings and controversy assessments. On this basis, detailed credit reports are formulated and analysed by the risk committees. Unlike fixed-income investments, for which Swiss Life pursues an active investment approach, a passive approach is taken for equity investments. As a result, there is limited flexibility to exclude investments from the investment universe. In most of the equity investment strategies, however, ESG ratings or controversies are used as a factor to optimise the portfolio. In addition, a great deal of importance is attached to the exercise of shareholder voting rights in equity investments. The exposure to portfolio companies will also be gradually expanded over the next few years.
Swiss Life also represents its interests by exercising voting rights and actively fosters responsible investing through “active ownership”. In this way, it strives to increase the company’s long-term value. ESG factors are used to make a balanced assessment of the purpose of motions and the overall benefits for the respective company’s shareholders. In the past financial year, for instance, Swiss Life voted for corporate transparency in social and environmental aspects and for better governance. When exercising voting rights, Swiss Life uses analyses and services provided by the external proxy advisory firm Institutional Shareholder Services (ISS) and other sources. In 2020, Swiss Life voted 5750 times at 310 annual general meetings. In 0.3% of cases it deviated from the recommendations made by ISS and in 9% of cases it voted against the Board of Directors.
To ensure that sustainability criteria can be integrated systematically into the value creation process in real estate investment, Swiss Life has developed its own Responsible Property Investment Framework. Applying to all real estate management activities, this optimises the environmental and social aspects of the real estate portfolio.
The infrastructure funds managed by Swiss Life Asset Managers and the Fontavis subsidiary hold several infrastructure properties in the field of renewable energies as direct investments. Swiss Life Asset Managers and Fontavis have some CHF 1.1 billion invested in wind farms, hydro, solar and biomass power plants, primarily in the USA and Europe. In total, around 2.4 GWh of renewable energy is produced in these plants, which corresponds to the energy supply for around 310 000 Swiss households. Thus Swiss Life’s infrastructure investments contribute to achieving the goals of the Paris Agreement.
In the year under review, Swiss Life Asset Managers published its first cross-asset-class Responsible Investment Report. The report can be downloaded under the following link: www.swisslife-am.com/rireport.
Due diligence in the selection of business partners including the incorporation of ethical considerations and environmental factors in the selection process
Swiss Life sets great store by compliance with all applicable legal provisions and regulatory stipulations. Correct and honest employee behaviour is an indispensable prerequisite for this.
Swiss Life has local internal reporting offices that promptly investigate any suspected violations of the Code of Conduct. In this context, anonymous reports are also accepted.
Compliance monitors and assesses the legal and regulatory environment, taking account of local legislation. The aim is to comply with legal and regulatory requirements and to prevent all forms of corruption and bribery. Swiss Life also considers it very important to observe and comply with sanctions and embargoes, as well as the provisions relating to the prevention of money laundering.
The compliance framework is subject to periodic review and is reworked and adapted to new prerequisites as necessary. The duties, responsibilities and competencies of Compliance are set out and documented within the governance framework of Swiss Life.
Swiss Life incurred no significant monetary penalties or fines during the year under review, nor did the company make any settlements in connection with corruption charges or anticompetitive conduct.
Data are secured and protected with the appropriate organisational and technical protection measures and are a part of risk management. More information on risk management can be found in the Annual Report in the “Risk Management” section from page 79.
✔ We expect our suppliers to honor the same social, human rights and environmental standards as we do
Moreover, Swiss Life is one of Europe’s leading real estate investors and has the biggest private real estate portfolio in Switzerland. In this context, Swiss Life mainly uses external services for architecture and expert planning services plus general construction services.
If any of the agreed standards are violated, Swiss Life demands that corrective measures be implemented. In the event of serious or repeated violations, the cooperation will be terminated. The right to carry out possible audits of suppliers and service providers is contractually agreed. This may include requesting confirmation of ISO certification, checking the validity of such certification and analysing the underlying reports.
When concluding contracts with suppliers and service providers in the core markets of Switzerland, France and Germany, Swiss Life expects them to guarantee the following standards as a rule: – Compliance with applicable environmental and climate protection standards – Compliance with legal regulations on working hours and ensuring working conditions that do not endanger employee health or security.
– Fulfilment of legal regulations relating to salaries, compensating of overtime and payouts. – Ensuring that their employees can work in an environment free of discrimination on the basis of race, gender, religion, origin, disability, age, sexual orientation, handicap or other attributes. – Respect for employees’ rights of association and collective bargaining. – Renunciation of child and forced labour – Compliance with the Universal Declaration of Human Rights (UDHR)
Swiss Life aims to enhance the monitoring of the environmental, social and ethical risks of its strategic suppliers through appropriate monitoring platforms in all its core markets. At the start of 2020, moreover, Swiss Life launched a Group-wide initiative for the continuous development of sustainable procurement principles. As part of this initiative, Swiss Life has harmonised the procurement of office IT equipment across the Group and exclusively procures sustainabilitysealed devices under global contracts. Swiss Life switched to certified paper for its new procurement of brochures for customer advisors.
As a provider of life and pensions and financial solutions, Swiss Life assumes social and economic responsibility. In addition, Swiss Life supports projects and institutions in the fields of culture, science, education and research that promote self-determination and confidence.
Swiss Life makes a major contribution to the national economy, both as a provider of products and services and as an employer, taxpayer and investor. Swiss Life enables people to lead a self- determined life, and thus makes a positive contribution to society.
– Insurance companies use statistical tools to transform hazards and uncertainties into risks that can be assessed and managed. Over the past centuries they have thus fundamentally shaped society’s view of risk: instead of being viewed as a potential loss, risks are now seen rather as an opportunity to break new ground.
Swiss Life’s business makes an important contribution to society. The consequences of demographic change are widely underestimated and entail new challenges. As people live ever longer and state pension systems reach their limits, every single individual is having to take on greater personal responsibility for their own future provisions and financial situation. At the same time, self-determination is a basic human need, and informs the company’s purpose: Swiss Life enables people to lead a self-determined life.
A Political Communication Steering Committee defines the strategic focus. Its members are the Group CEO and the Group CFO, the CEOs of the divisions headquartered in Switzerland, the General Counsel, the Chief Risk Officer, the head of Group Communications and Strategic Marketing, and the Head of Group Human Resources. The steering committee meets four times a year and defines its political communication priorities. The Swiss Life Group’s Public Affairs team is responsible for implementing the measures at operational level.
Swiss Life France is a member of the French Insurance Federation (Fédération française de l’assurance, FFA), France’s largest trade association in the insurance sector. The company is represented through a number of employees who actively participate in the committees for different insurance-related themes.
With its Public Affairs unit, Swiss Life Germany adopts positions on the most relevant regulatory issues. These are then projected to decision-makers in politics and society as well as through the committees of key industry associations. Swiss Life Germany is a member of the German Insurance Association (GDV) and of various associations representing intermediaries. Swiss Life Germany also maintains regular exchanges with the AfW Bundesverband Finanzdienstleistung e.V. (German federal association of financial service providers) and the Verband unabhängiger Finanzdienstleistungs-Unternehmen in Europa e.V. (VOTUM).
Swiss Life is committed to Switzerland’s militia system (part-time public service). This promotes better understanding between the worlds of politics, society and business and enables valuable knowledge transfer. Swiss Life therefore supports employees who take on a political or public office. Full-time employees can use up to 20% of their working hours for such work. In addition, Swiss Life organises regular events in Switzerland for employees who hold public or political mandates. During the reporting period, Swiss Life organised the fifth “Transfer” event in conjunction with Avenir Suisse, Swiss Re, Zurich Insurance Group, Helvetia, Baloise Group and Axa. At this event, over 95 mandate holders from different companies discussed current political issues.
Swiss Life supports projects and institutions in the fields of culture, science, education and research, and operates seven of its own foundations. The focus is on encouraging commitment, self-determination and confidence.
– In 2005, Swiss Life founded the “Perspectives” Foundation, which supports charitable initiatives in the fields of health, science, education, culture and sport and spends CHF 1.3 to 1.5 million every year on social charity projects in Switzerland. In 2020, support totalling around CHF 1.3 million was provided for 126 projects. All funds are made available in their entirety by the founder, Swiss Life.
– A second foundation Swiss Life runs in its home market of Switzerland is the “Anniversary Foundation for Public Health and Medical Research”, founded in 1957 on the occasion of the company’s centenary. This foundation supports medical research projects and specific charitable organisations for people with physical and mental disabilities. Swiss Life has made annual donations of around CHF 400 000 to this foundation in recent years.
– In addition to these commitments to foundations, Swiss Life promotes Swiss film-making and helps artists go their own creative way. Due to the global pandemic, 2020 was a challenging year full of uncertainty for cultural production. Swiss Life stood by its commitments even during this challenging period and provided all the support that had been pledged. For example, Swiss Life supported both the Solothurn and Locarno film festivals in 2020. Moreover, Swiss Life has supported classical music in Switzerland for years through its financial commitment to TonhalleOrchester Zurich, the Zurich Opera House, the Lucerne Festival and the Davos Festival.
– Since its inception in 2008, the “Fondation Swiss Life” has been supporting long-term projects with its partners in the fields of health, art and social engagement. The initiatives sponsored include the “Curie” institute, the “Association France Alzheimer”, the “Prix Swiss Life à 4 mains” art prize and the “Aider à Aider” social project. Due to the Covid-19 pandemic, the “Fondation Swiss Life” made an additional budget available to support local solidarity initiatives. In addition, a partnership was established with the “Entourage” association for a project called “Les Bonnes Ondes”. The solidarity teams, which included Swiss Life employees, provide telephone support for people who have been suffering from loneliness during the crisis. Fondation Swiss Life donated a total of EUR 291 000 to all the various initiatives during 2020.
– In 2019, the “Swiss Life Stiftung für Chancenreichtum und Zukunft” initiated a multi-year strategic cooperative project with “KinderHelden”, a mentoring initiative that offers improved educational opportunities to primary school children with a difficult background and helps them integrate into society. The “KinderHelden” location in Hanover was opened that same year, followed by a further location in Munich in 2020. Employees and financial advisors from the distribution operations now serve as mentors on a voluntary basis, and are even more important to children during the coronavirus period than in “normal” times.
– Corpus Sireo, a German company belonging to Swiss Life Asset Managers, supports the charitable “Cornelius Stiftung für Kinder suchtkranker Eltern”, a foundation for children of parents suffering from addictions. This foundation focuses on the advancement of children from underprivileged homes afflicted by addiction, and thus offers them better perspectives for the future. Its average yearly donation volume is EUR 100 000.
– Swiss Life Select in Austria runs a foundation called “Zuversicht für Kinder” (Giving children confidence). During the reporting year, it supported 26 local and international aid projects as well as medical aid in specific cases. Donations of about EUR 70 000 were collected, mainly from Swiss Life Select financial advisors. With their help and the support of customers and private individuals, numerous children were given a new perspective in life. In addition, for the past four years Swiss Life Select in Austria has been the main sponsor of the “Junge Philharmonie Wien” (Vienna young people’s philharmonic orchestra).
The success of Swiss Life is based on the skills and engagement of its staff. Swiss Life promotes the continuous development of its employees and offers them a working environment where they can act with personal responsibility.
As a basis for successful leadership and communication, Swiss Life has established behavioural principles applicable throughout the Group. These serve as a formal framework for strengthening an open feedback culture. The focus is on encouraging employees to take personal responsibility. By delegating competencies and responsibility to employees, managers do not simply encourage their innovative capability and ability to act independently, they also express respect and appreciation, which leads to greater engagement from everyone. Through their leadership and communication, managers establish credibility and trust in their daily work, provide guidance and perspective, and put shared goals into practice.
Swiss Life’s behavioural principles: – I think consistently from the customer’s point of view. – I collaborate effectively in the best interests of the company. – I act in an efficient and goal-oriented way. – I work in a committed and agile manner. – I build trust by listening and communicating openly. – I pursue continual self-development.
Management by Objective) with all employees (100%) – Discussions regarding career development and measures – Decisions on salaries and promotions – Strategy and value-oriented behaviour – as set out in the Group-wide behavioural principles for employees and management – Assessment and management of employee risks
Swiss Life performs a Group-wide employee survey on engagement every two years in cooperation with an independent research institute¹ to monitor employee satisfaction. The participation rate in the last survey (2019) was 89% (+2 percentage points compared with the 2017 survey). The engagement score for the Swiss Life Group shows the great extent to which employees are prepared to go the extra mile for Swiss Life: the figure of 73% is above average; it is six percentage points higher than the score for the peer group comprising the “global financial industry” and only one percentage point below the external benchmark comprising “the most successful companies worldwide”. The results help Swiss Life to develop together with its employees and, as an attractive employer, keep up to date with the times: – The Switzerland division derived sector-specific measures from the results, which are presented to the management on a half-yearly basis. These include specific measures in connection with the behavioural principles and with personnel and leadership development.
– In the context of the “Swiss Life 2021” strategy and the survey results, Swiss Life France has deepened the topic of “development” and coordinated it with other HR activities: Initiatives include an integrated process for ascertaining individual development needs, a learning platform with innovative content (games, videos, podcasts etc.), soft skills training for managers, training courses in insurance and regulation, and 19 professionalisation courses with modules on the subjects of “knowledge/tools/customer relationships” adapted to the various professions. Employees are kept continuously informed via various communication channels, such as HR information days, workshops, the intranet and a newsletter.
Furthermore, Swiss Life Select in Austria is implementing targeted measures to establish the topic of sustainability throughout the organisation.
– The Asset Managers division focused, among other things, on implementing the following projects: Launch of a modern digital workplace and a uniform HR system. In addition, a harmonised talent management system with a uniform performance management process and a uniform job architecture with a modern ranking system and a variable compensation concept with long-term incentives will be rolled out by 2022. All initiatives are accompanied by a comprehensive transformation and change programme.
Swiss Life provides an extensive range of offers and opportunities for its employees to help them shape their working lives themselves through all phases of their career. With its Group-wide “Actively shaping your career” programme, Swiss Life aims to ensure the strengthening of employees’ individual resources. This takes into account and balances different operational requirements and personal needs in various phases of their working and private life.
– Swiss Life France provides seniors with part-time employment at the end of their careers, plus health insurance, retirement provisions, opportunities to work from home and medical support.
– At Swiss Life Germany, employees can choose from an anniversary payment, special leave, conversion of money into holiday and a special bonus for recruiting new employees. Swiss Life Germany also entered into cooperation agreements with health insurers that guarantee employees better conditions on conclusion of contracts.
– Swiss Life France offers paid maternity/paternity leave over and above the legally required minimum, and also provides childcare facilities.
– At Swiss Life Germany, depending on the location, there is either a company-owned childcare centre or a third-party-owned childcare centre, or else parents are supported by an external partner in their search for childcare opportunities. In order to relieve the burden on parents, there is paid work exemption in special cases, for example when children (up to 12 years of age) are sick. There is also an agreement on working from home.
Leadership training and skills development include courses both for employees who already hold a management position and for those who are new to such roles: – Leadership programmes and a broad leadership development offering are available to both aspiring and experienced managers. At the same time, the Switzerland division is involved in the “Leaders in Exchange” programme offered by the Association of School Directors of the Canton of Zurich (VSLZH) in cooperation with economiesuisse (the umbrella association of Swiss business). The aim is to enable school and business leaders to exchange information on management issues.
– In France, Swiss Life offers various management training courses in cooperation with “Grande Ecole de Commerce KEDGE Business School”, leading to a recognised certificate.
– Swiss Life Asset Managers has launched a programme to harmonise the learning and development offering with the aim of rolling out uniform guidelines for leadership and training standards by 2022. Furthermore, the “AM Leaders” programme enables managers at all levels to reflect on their own leadership conduct through supervision in four half-day modules and then to apply what they have learned in practice. The Livit Real Estate Management area has developed a leadership programme that aims to identify approaches, models and methods. The focus is on practical relevance, transfer into everyday work and exchanges with other managers.
Thanks to partnerships with educational institutions such as universities, employees are offered a range of attractive training programmes: – In cooperation with the Kalaidos University of Applied Sciences Switzerland, Swiss Life Switzerland has developed an internal course for employees leading to a Certificate of Advanced Studies. In cooperation with Fernfachhochschule Schweiz, the “Practice-oriented Bachelor’s degree in Computer Science” offers an innovative study model for Matura students who want to enter the world of work directly without having to forego a university degree. The foundation year is completed in cooperation with the “Bbc Vocational Training Centre”.
– As part of initial training or during the course of study, Swiss Life in Munich collaborates with the relevant vocational schools, the Berufsbildungswerk der Deutschen Versicherungswirtschaft (BWV Munich) and the University of Applied Management (HAM).
The Swiss Life Group offers junior staff a wide range of vocational training courses, apprenticeships, internships, graduate and trainee programmes and combined university degrees: – In cooperation with the VBV (Insurance Industry Vocational Training Association) and the Kaderschule Zürich management school, Swiss Life in Switzerland offers school-leavers a traineeship that combines post-Matura economics training with the VBV entry-level insurance programme.
Swiss Life also collaborates with the VBV on commercial apprenticeships in the private insurance sector. Some 95% of trainees, interns and graduates on graduate training programmes are offered employment on completion of their training.
– Swiss Life France has established partnerships with educational institutions in the fields of insurance, actuarial services, finance and engineering. The budding professionals receive support in the development of their abilities, for example through a network of managers and tutors.
– At Swiss Life Germany, talented youngsters are offered a choice of training courses. In addition, there is a partnership with Hannover Center of Finance e.V., an initiative of Leibniz University in Hanover and various companies. There are also cooperations with the University of Applied Management and for the internships with the vocational training centres of Bavarian industry (bfz).
Swiss Life offers comprehensive succession planning and development programmes at various levels to give targeted support to young talent. Thus employees with a good performance track record and strong potential are nominated for a talent programme. These initiatives and programmes support efforts to open up career paths within the company – whether in people leadership, project management or specialist functions. This paves the way for key positions to be filled with qualified young managers from within the company.
The Key Persons Programme (KPP) is intended for Swiss Life Group management, specialists and project managers who are already in a key function or show potential for such a function. The aim of the Group-wide programme is to prepare people who show the desire and ability to help shape the company’s future in their own areas for a key position so they can live up to their role as decision maker. The programme also plays a role in employee and succession planning. Within a 12-month period, the participants acquire a detailed insight into the most important business areas within the Swiss Life Group, give and receive new impulses and apply what they have learnt to their daily work. The KPP’s focus themes are: – People leadership and communication – Finance – Innovation – Corporate Strategy – Future trends and organisational development
As a result of the Covid-19 pandemic, a substantial part of the programme’s resources were invested in organisational development: participants in the two current classes, KPP 2019 and 2020, have spent seven months developing ideas on how Swiss Life can emerge stronger from the Covid-19 pandemic. Several groups looked at the impact of the pandemic on Swiss Life’s business from three angles: from the customer’s perspective, from the employee’s perspective and from the perspective of external parties such as competitors or other industries. Experts supported the KPP teams with models and instruments from futurology and design thinking. 31 trends and 24 scenarios emerged from the analysis, seven of which were selected in consultation with the Corporate Executive Board. The KPP teams will now work out concrete measures for the next steps in consultation with the respective sponsor from the Corporate Executive Board. These will then be discussed in the Corporate Executive Board and implemented in the divisions.
Alumni of the Key Persons Programme meet the participants every year at the “Shaping the Future Day”. This conference looks in further detail at strategically relevant issues in the context of implementing the current corporate programme; this involves discussing them with the Group Executive Board and other key people.
1 Positions with leadership responsibility 2 Members of the Group, division and business area management 3 Department and team heads
Mutual respect is the precondition for a work environment based on trust, in which employees are comfortable. Promoting diversity within the company is an important factor for corporate success. It enhances Swiss Life’s ability to adapt to changing market conditions and helps it compete for qualified professionals.
– Swiss Life offers flexible working models for all career phases up to and beyond normal retirement age. These enable employees to continue working until the age of 70. More than 30% of employees over the age of 58 make use of these flexible working models. Through offers like these, Swiss Life ensures that specialist knowledge is passed on to the next generation. Swiss Life Switzerland also participates in a special project for young women which gives girls the opportunity to see female role models before and during their career choice. In addition, the participants learn to deal openly with their own development. Swiss Life is also involved in the expert group on the “MOZART” (“models for the future labour market 45+”) project. This forms part of the national “AGE-NT” innovation network which is financed by the State Secretariat for Education, Research and Innovation (SERI).
– Swiss Life France has launched a three-year plan for employees with disabilities that comprises job offers, workplace adaptation and the like, and has entered into a partnership with the national association “LADAPT” (L’association pour l’insertion professionnelle et sociale des personnes handicapées). In addition, attention is paid to engaging people of different nationalities when recruiting. Experienced employees receive support in planning their retirement: they are given 80% part-time employment for one year so that they can continue to receive 100% of the basic contribution payable by the employer.
– Employees of Swiss Life in Germany benefit from flexible working time models. At the same time, a working group is responsible for defining further development opportunities for employees aged 50 and over.
– Swiss Life International offers early retirement schemes at its Luxembourg location to enable working hours and workload to be gradually reduced over the last three working years. In addition, managers have been receiving targeted training on the subject of “diversity and inclusion” for the past two years.
Swiss Life uses targeted guidelines, regulations and processes to ensure that no bullying or discrimination on the basis of gender, ethnicity, language, religion, confession, national origin, age, sexual orientation, physical or mental handicap, marital status, political views, company rank, working model or level of employment, education or other (visible or invisible) personal characteristics is tolerated. Moreover, Swiss Life has established management processes and informal and confidential channels (e.g. an ombuds office managed by a third party) for reporting cases of discrimination or for submitting and handling complaints.
In accordance with valid national and international law and the conventions of the International Labour Organisation (ILO), the Swiss Life Group adopts fair and non-discriminatory employment procedures with the aim of ensuring equal opportunity. Recruitment and promotion are based exclusively on ability, skills and potential, in line with the requirements of the position in question. Fair and equal compensation for all employees is ensured by the Group Compensation Policy, which is applicable throughout the Group. In all its national companies and for some years now, Swiss Life has been using processes and instruments to close the genderspecific pay gap: – in Switzerland, for example, Logib software from the Federal Office for Gender Equality is used to review equal treatment. Regular and systematic consideration of equal pay issues ensures that there is no gender discrimination in the pay structure. The next review is planned for 2021 as part of the revision of the Federal Act on Gender Equality.
– With regard to gender equality, Swiss Life France has continued its action plan to ensure equality of remuneration, launched in 2019, and earmarked corresponding resources for this purpose. The occupational equality index, as defined in the “Avenir professionnel” law, shows a result of 88 out of 100 points for 2019/2020. Analysis of the results makes it possible to define new measures, such as salary increases following maternity leave and the representation of women in senior management positions.
– Swiss Life in Germany has launched an initiative to promote female employees and female managers.
To ensure employees’ safety and health, the divisions employ staff at their locations who are specialised in these areas. Moreover, managers are responsible for helping employees to comply with occupational safety measures and for protecting their health. Together, experts and managers review the impact of the measures taken on an ongoing basis and initiate improvements where necessary.
– At Swiss Life France, a committee for the management of health, safety and working conditions meets quarterly in the presence of an employee representative (employee participation). Accidents at work are analysed and subject to a risk assessment and, if necessary, result in the adaptation of safety measures. An annual review and a risk prevention programme are established and are the subject of reports submitted to the elected staff representative. Health services and local representatives support employees in matters relating to health and working conditions. In addition, three specially trained mediators are responsible for preventing harassment and victimisation.
– At the Luxembourg location of the International division, a staff delegate oversees health and safety aspects in accordance with the legal requirements and in cooperation with the designated employee representative.
All divisions have a wide range of preventive measures for employees to help them stay healthy: – Employees in Switzerland benefit from flu vaccinations, help with giving up smoking and nonsmoker protection measures.
All employees of the Swiss Life Group have access at all times to online training options consisting of text content, short videos, checklists and learning programmes on the topic of “Health and wellbeing ” which they can use anytime and anywhere they like.
Thus employee health and prevention programmes are a central focus of the Swiss Life Group’s corporate activities. The emphasis is on preventive care. In cooperation with their social partners, all divisions offer facilities for exercise and sport, massage and therapy plus relaxation rooms and a full range of advice, including in the areas of nutrition and social counselling. Safety at the workplace (with regard to equipment, work tools and instruction) is continuously monitored and adapted to changing requirements.
In the context of the Covid-19 pandemic, comprehensive measures to protect employees have been launched at all locations. Some of these are listed below.
– In France, an information meeting has been held with representatives of the social partners responsible for health and safety. To supplement the services provided by the medical service as part of the “Health Check Management Service Covid-19” action plan, psychological care and stress management facilities have been made available. In addition, regular reports are submitted to the responsible internal units and the authorities (DUER/RPS Covid).
The members, chairwoman and vice-chairwoman of the staff committee elected at the most recent election assumed their duties for the 2020-2023 term of office as of 1 January 2020.
– The agreement concerning simplified recording of working hours, which entered into force on 1 April 2016, was formally confirmed at the annual review and will be continued.
Number of works council members, dispensation for committee work and area of responsibility
– 22 regular members of the Economic and Social Committee, each with 30 hours per month, including a secretary with 25 hours per month and an assistant secretary with 15 hours per month
– A treasurer with 15 hours per month and an assistant treasurer with five hours per month – 14 trade union delegates, each with 24 hours per month – Four central delegates, each with 26 hours per month – Three mediators responsible for dealing with harassment/victimisation
No new agreement has been concluded since 2019. Swiss Life Asset Managers France is about to conclude two new agreements by the end of the year: – On annual wage negotiations – On new savings plans (long-term, “plan d’épargne pour la retraite collectif PERCO”)
The Works Council performs its duties in accordance with the local Works Constitution Act. To meet local requirements, various constructive works agreements have been concluded with management.
– The Works Council Sales Force is responsible for intermediary distribution at the branch office and comprises three people, none of whom has dispensation.
Collective bargaining agreements 47% of employees are covered by a collective bargaining agreement.
The members of the Works Council representing CORPUS SIREO Real Estate GmbH and Swiss Life Invest GmbH established a Group Works Council (KBR) on 29 October 2019. It consists of four members of the Works Council (one part-time, three full-time); the chairwoman, who has a part-time role, is exempted from regular work. In connection with the establishment of Swiss Life Investment Management Deutschland Holding GmbH, the objective of the KBR is to define cross-company topics.
– Calculation of variable compensation (bonus) for 2019 – Basic salary adjustment process for non-management, non-pay-scale employees as at 1 April 2019 – Supplement to Annex 1 to the IT Framework Agreement
The Works Council of Swiss Life Asset Management GmbH and Swiss Life Invest GmbH consists of three members, all of whom work full-time (38 hours/week). All members work without dispensation. The Works Agreements apply to around 81% of all employees of these companies.
– Regulation concerning working hours at Corpus Sireo – Arrangements concerning working time regulations from old contracts prior to 1 July 2017 – Mobile working – Agreement on supplementary framework conditions for employment relationships at Corpus Sireo – Voluntary social security benefits – Spendit Card – Project time recording – Deployment and use of the “Competence Booster” training platform at Corpus Sireo – A company framework agreement on IT
Number of Works Council members, dispensation for committee work and area of responsibility
The committee currently consists of five members (one part-time, four full-time). Of these, the part-time employee enjoys full work dispensation for Works Council activities and two of the other members are each entitled to 50% dispensation.
Following the elections of March 2019, the newly elected staff committee took up its duties in April 2020.
– The new staff committee is continuing to concentrate on its key role of facilitating the flow of information between staff and management in order to avoid potential conflicts.
Number of Works Council members broken down by full-time and part-time The number of employee representatives and the time required for their work are directly proportional to the number of employees. In the Global Solutions area in Luxembourg, employee representation consists of five ordinary representatives and five deputies. The employee representatives are entitled to devote 16 hours a week to exercising their mandate.
The Swiss Life Products (Luxembourg) S.A. team has reached the threshold of 15 employees and thus elected its own employee representation in 2019.
The staff committee of Swiss Life Asset Managers Luxembourg was newly elected in March 2019. Quarterly meetings are held with the Executive Board. No formal agreements were reached between the staff committee and the Executive Board in 2020.
Swiss Life supports the Paris Agreement and aims to make an active contribution to climate protection through its own measures. In operational ecology, it pursues the aim of continuously reducing its carbon footprint per full-time equivalent and strives for climate neutrality.
In its business, Swiss Life contributes directly to society. With its advice, services and products, it enables people to lead a self-determined life. As a comprehensive life, pensions and financial solutions provider founded over 160 years ago and as a major institutional investor, Swiss Life is aware of its responsibility and the need to think long term. It aims to carry out its activities in a way that helps to shape the future without compromising the ability of future generations to meet their own needs.
Swiss Life recognises that climate change, if left unmitigated, will have negative effects on society and the global economy. Swiss Life is committed to playing an active role in contributing to the transition towards a low-carbon economy and to the goals of the Paris Agreement. Further, Swiss Life expects increased transparency requests from stakeholders (e.g. customers, regulators, investors and employees) regarding products and services and increasing demand for sustainable products. Furthermore, Swiss Life’s investments in securities, real estate and infrastructure might be affected by the physical impacts of climate change and the transition to a low-carbon economy. Swiss Life has integrated sustainability and climate aspects into its existing risk management frameworks for the management of its business and assesses present and future climaterelated risks and opportunities on a regular basis.
 Swiss Life now publishes a yearly report based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which can be downloaded at swisslife.com/reports. Full details regarding the climate strategy can be found in the Swiss Life climate report.
Swiss Life wants to reduce its greenhouse gas emissions by 10% by 2021.
Electricity Swiss Life wants to increase the share of electricity it uses in its buildings from renewable energy sources with a target of reaching 100% by 2021.
1 The reference base for this goal per FTE is 2016 and it covers Scope 1, 2 and 3 emissions.
District heating/cooling (in MWh) 5 444 5 187 1 556 1 503
BUSINESS TRAVEL (IN KM/FTE) 2 729 6 634 7 804 7 686
TOTAL GREENHOUSE GAS EMISSIONS (IN KG/FTE) 1 386 2 536 2 771 2 775
1 Further companies were included in the data collection process in 2020. The key figures for financial years 2019 and 2020 refer to VfU 2018 while those for the other years refer to VfU 2013.
– Swiss Life’s head office in Zurich is virtually carbon-neutral. Since the early 1990s, the building has been cooled and heated with water from Lake Zurich. Rainwater is used for sanitary installations at the Zurich business premises. 30% of the energy used for heating Swiss Life’s Binz Center property is biogas sourced from Switzerland.
– With its operational ecology programme, Swiss Life wants to make an active contribution to climate protection. This is why it set up the Swiss Climate Foundation in 2008 in cooperation with other Swiss companies. The foundation supports SMEs in becoming more energy efficient and reducing their CO2 emissions.
Since 2011, the Swiss Life Group has taken part in the CDP (Carbon Disclosure Project) survey. The CDP is an independent charitable organisation which holds the world’s most comprehensive collection of corporate information on climate change. In 2020, Swiss Life improved its rating to B. In the previous year it had been given a B– rating.
Germany – In Germany, the two main Swiss Life branch offices – in Garching near Munich and in Hanover – have repeatedly been awarded the ECOPROFIT seal for their outstanding commitment to corporate environmental protection. The seal rewards efforts to reduce CO2 emissions and save resources. At both locations, Swiss Life obtains its electricity from renewable sources.
Swiss Life International – The offices in Liechtenstein, Luxembourg, the UK, Austria, the Czech Republic, Singapore and
The social and economic consequences of increased life expectancy are insufficiently accounted for in almost all areas of life. Swiss Life is committed to raising society’s awareness of this topic and actively addressing the attendant challenges. Swiss Life supports its customers in making all the necessary preparations early so that they can lead a self-determined life. Swiss Life supports its employees, for example, by offering them flexible working models and a wide range of health and prevention services.
See also “Strategy & Brand” (pages 8–14) and “Sustainability as an Employer”, subsection “Health and Safety” (pages 132–134).
Guaranteeing inclusive, high-quality education respectful of equality and advocating lifelong learning for all
In this report, Swiss Life focuses on those sustainable development goals where the company is currently having the biggest impact through its business activities, investments and social commitment. Swiss Life is thus restricting itself to nine of the 17 SDGs. Compared to the previous year, three additional sustainability goals are listed.
Swiss Life specifically uses some of its investments to support climatefriendly technologies, projects and initiatives. By doing so it also makes a direct contribution to the global climate targets. In this context, Swiss Life has set itself the goal of investing CHF 2 billion in green bonds by 2023.
Develop resilient infrastructure, promote broad-based and sustainable industrialisation and support innovation
See also “Corporate Citizenship” (pages 116–117) and “Responsible Investing” (pages 101–105).
See also “Responsible Real Estate Management” (page 104), “Sustainable Procurement” (pages 109–111) and “Sustainability in the Environment” (pages 139 –143).
In 2018 Swiss Life signed the principles of the UN Global Compact. We acknowledge the ten principles, because we want to accept our responsibility as a company in the key areas of human rights, labour, the environment and anti-corruption and publicly affirm these global values. The focal areas of the UN Global Compact are reflected in both our Code of Conduct and our materiality matrix. The way in which we contribute to meeting these principles within our area of responsibility is shown in our annual progress report.
Human rights Principles 1 and 2: – Businesses should support and respect the protection of internationally proclaimed human rights and – make sure they are not complicit in human rights abuses.
 “Sustainability at Swiss Life” (pages 86–87)  “Responsible Investing” (pages 101–105)  “Compliance at Swiss Life” (pages 106–108)  “Sustainable Procurement” (pages 109–111)
– Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining – the elimination of all forms of forced and compulsory labour; – the effective abolition of child labour; and – the elimination of discrimination in respect of employment and occupation.
 “Responsible Investing” (pages 101–105)  “Responsible Real Estate Management” (page 104)  “Sustainable Procurement” (pages 109–111)  “Sustainability in the Environment” (pages 139–143)
 “Compliance at Swiss Life” (pages 106–108)  “Sustainable Procurement” (pages 109–111)
Reporting in accordance with the standards of the Global Reporting Initiative (GRI)
The annual reporting on sustainability aims to create transparency and strengthen communication with the stakeholder groups. Swiss Life’s stakeholder groups include all stakeholders who are directly or indirectly affected by the company’s operations or who have a significant influence on Swiss Life’s business activities. These include employees, customers, investors and representatives of the media, politics and associations. Swiss Life is in regular dialogue with all relevant stakeholder groups. Thus Swiss Life is aware of their requirements and expectations and is able to react to challenges or changes (GRI 102-40, 102-42, 102-43, 102-44). Further information on our dialogue with stakeholder groups is available on the Swiss Life website at www.swisslife.com/ stakeholdercommunication.
In addition to its involvement in local industry associations, Swiss Life is active at its local locations in the following organisations: – Swiss Sustainable Finance (SSF): sustainablefinance.ch – Swiss Climate Foundation: klimastiftung.ch – Energy Model Zurich: energiemodell-zuerich.ch – Observatoire de l’immobilier durable (Green Building Observatory): o-immobilierdurable.fr – Plan Bâtiment Durable (Sustainable Building Plan): planbatimentdurable.fr – Netzwerk der Klima-Allianz der Stadt Hannover (Network of the Climate Alliance of the
GRI 102-51 Date of most recent report Sustainability Report 2019, published in March 2020
GRI Standards and SASB Disclosures Disclosures TOPIC-SPECIFIC STANDARDS AND DISCLOSURES Reference/Information Omission
GRI 201-2 Financial implications and other risks and opportunities p. 80, 101–102, 104 due to climate change
GRI 203-2 Significant indirect economic impacts p. 80 SELF-DETERMINED LIFE IN TIMES OF DEMOGRAPHIC CHANGE / PRODUCTS, SERVICES AND ADVICE
GRI 103: 2016 Management approach p. 97–99 103-1/103-2/103-3 FN-IN-000.A Number of current policies by segment Not relevant FN-IN-410b.1 Net premiums written for energy efficiency and Not relevant low-carbon technologies FN-IN-410b.2 Description of products or product characteristics, Swiss Life has been offering premium promotion of health, safety and/or environment-friendly rates in Switzerland for several years, behaviour distinguishing between smokers and non-smokers. Thus the risk premium in death benefit insurance for a non- smoker is lower than for a smoker. Although mostly actuarially based, Swiss Life thus creates an incentive to lead a lifestyle that is conducive to longer life expectancy. RESPONSIBLE INVESTMENT
GRI 103: 2016 Management approach p. 101 103-1/103-2/103-3 FN-IN-410a.1 Total number of investments by industry and asset class p. 101 FN-IN-410a.2 Description of the approach to incorporating ESG factors into p. 102-105 investment management processes and strategies RESPONSIBLE REAL ESTATE MANAGEMENT
GRI 103: 2016 Management approach p. 79–82 103-1/103-2/103-3 FN-IN-450a.1 Probable maximum loss (PML) of insured products Not relevant as a result of weather-related natural disasters FN-IN-450a.2 Financial losses from insurance payments for modelled Not relevant and non-modelled natural disasters by type of event and geographic region FN-IN-450a.3 Description of the approach to incorporating environmental risks p. 80, 98 into insurance business processes for individual contracts and the management of company-wide risks FN-IN-550a.1 Exposure with respect to derivative instruments, by category p. 242–246 FN-IN-550a.2 Total fair value of securities transactions in relation p. 242–246 to collateral assets FN-IN-550a.3 Description of the approach to managing capital- and liquidity- p. 207 related risks in relation to systemic non-insurance activities
GRI 103: 2016 Management approach p. 94 103-1/103-2/103-3 Net promoter score (NPS) p. 95 FN-IN-270a.3 Customer retention rate Swiss Life is currently not publishing any complaints figures. Information on customer satisfaction can be found on pages 94-95. FN-IN-270a.4 Product information for customers p. 97–98
GRI 403-4 Worker participation, consultation and communication p. 132–135 on occupational health and safety
GRI 403-5 Worker training on occupational health and safety p. 133
GRI 404-3 Percentage of employees receiving regular performance p. 120 and career development reviews
GRI 412-3 Significant investment agreements and contracts that include S. 101–111 human rights clauses or that underwent human rights screening
GRI 417-1 Requirements for product and service information and labeling p. 97-99
GRI 418-1 Substantiated complaints concerning breaches of customer p. 108 privacy and losses of customer data
GRI 419-1 Non-compliance with laws and regulations in the social p. 107 and economic area
Total greenhouse gas emissions 1 386 2 536 2 771 2 775 AR, p. 141 (in kg CO2-equivalents/FTE)
Electricity consumption (in KWh/FTE) 2 306 3 491 3 631 3 843 AR, p. 141
Targets to reduce energy consumption yes yes yes yes AR, p. 140
Total waste (in kg/FTE) 64 120 114 138 AR, p. 141
Share of paper with FSC label 87% 68% 66% 63% AR, p. 141
Energy efficiency policy yes yes yes yes AR, S. 104, 140–143
Waste reduction policy yes yes yes yes AR, S. 104, 140–143
Health and safety policy yes yes yes yes AR, p. 132–134
Workforce absences employees, total 3.3% 3.7% 3.2% 3.1% AR, p. 134
Workforce absences per segment yes yes yes yes AR, p. 134
Company monitors employee satisfaction on a yes yes yes yes AR, p. 121
Formal talent pipeline development strategy yes yes yes yes AR, p. 127 (forecasts hiring needs, actively develops new pools
Job-specific development training programs yes yes yes yes AR, p. 125–126
UN Global Compact Signatory yes yes yes no AR, p. 101, 147–148, 151
Human rights policy yes yes yes yes AR, p. 91, 101–104, 106–111, 147–148, 151
Guidelines for environmental assessment of suppliers yes yes yes yes AR, p. 91, 109–111
Total Group-wide foundation expenditures 3.2 3.0 2.6 2.5 1 AR, p. 116–117 (in CHF million)
Proportion of women at senior and executive 9% n/a n/a n/a AR, p. 129
Proportion of women at middle and lower 34% n/a n/a n/a AR, p. 129
Gender equality policy and diversity activities yes yes yes yes AR, p. 130–131
1 A detailed survey now includes the expenditures of a total of seven foundations. As a result, the 2017 figure had to be corrected upwards. 2 Positions with leadership responsibility 3 Members of the Group, division and business area management 4 Department and team heads
ESG integration in asset management yes yes yes no AR, p. 101–105
Scope of ESG integration strategy 90% 90% n/a n/a AR, p. 101–105, swisslife-am.com/rireport, p. 8 (% of assets under management)
Proportion of votes against the management 9% 9% n/a n/a AR, p. 103 recommendation at the Annual General Meetings
Participation in impact investments (in CHF million) 25 7 n/a n/a AR, p. 101–104
Principles for Sustainable Insurance yes no no no AR, p. 151
Granting of data subjects’ rights (right to information, yes yes yes yes Applicable law and internal guidelines correction, blocking, forwarding of personal data)
Average term of office (years) 9 8 7 7 AR, p. 36
Deviation from one share one vote yes yes yes yes AR, p. 32, 74
Company has a risk management framework yes yes yes yes AR, p. 79–82
Climate change listed as a business risk factor yes yes yes yes AR, p. 80, 101–104, 139
Risk management covers systemic risks yes yes yes yes AR, p. 79–82
Board oversight of risk management yes yes yes yes AR, p. 207
Swiss Life – Annual Report 2020 5.4 Financial risk management objectives and policies .............................................................211 5.5 Insurance risk management objectives and policies ............................................................227 5.6 Strategic risk management ...........................................................................................................232 5.7 Operational risk management and internal control system .............................................232 5.8 Risk concentrations .........................................................................................................................233 5.9 Applied instruments for risk minimisation ............................................................................233 5.10 Sensitivity analysis ...........................................................................................................................233 6 Earnings per Share .......................................................................................................................... 235 7 Premiums, Policy Fees and Deposits Received ..........................................................................236 8 Details of Certain Items in the Consolidated Statement of Income ............................. 238 9 Derivatives and Hedge Accounting ............................................................................................242 10 Financial Assets at Fair Value through Profit or Loss ..........................................................247 11 Financial Assets Available for Sale .............................................................................................247 12 Loans and Receivables ................................................................................................................... 248 13 Financial Assets Pledged as Collateral ..................................................................................... 250 14 Investment Property ........................................................................................................................251 15 Investments in Associates ..............................................................................................................252 16 Property and Equipment .............................................................................................................. 254 17 Intangible Assets including Intangible Insurance Assets ...................................................256 18 Other Assets and Liabilities ..........................................................................................................261 19 Investment and Unit-Linked Contracts ....................................................................................262 21 Other Financial Liabilities ........................................................................................................... 267 23 Employee Benefits .............................................................................................................................270 24 Income Taxes......................................................................................................................................281 28 Acquisitions and Disposals of Subsidiaries .............................................................................292 29 Related Party Transactions ...........................................................................................................294 30 Fair Value Measurements ..............................................................................................................296 31 Offsetting Financial Assets and Liabilities ............................................................................. 308 32 Guarantees and Commitments .................................................................................................. 309 34 Events after the Reporting Period ...............................................................................................311 35 Scope of Consolidation ..................................................................................................................312
Share of profit or loss of associates 5, 15 9 6
Benefits and claims under investment contracts with discretionary participation –846 –898
Intangible assets including intangible insurance assets 17 3 058 3 074
Dividends paid to equity holders of Swiss Life Holding –477 –464
Cash and cash equivalents as at 1 January 8 247 8 410
TOTAL CASH AND CASH EQUIVALENTS AS AT END OF PERIOD 7 865 8 247
Cash and cash equivalents for the account and risk of the Swiss Life Group’s customers 2 667 2 944
Equity-settled share-based payments – 15 – – – 15 – – 15
Purchases of treasury shares – – –14 – – –14 – – –14
Disposals of subsidiaries – – – – – – – –1 –1
Interest on hybrid equity 26 – – – – –9 –9 – – –9
Consolidated statement of changes in equity for the year ended 31 December 2019
Distribution out of capital contribution reserve 26 – –83 – – – –83 – – –83
Cancellation of treasury shares –3 –249 252 – – – – – –
In February 2020, the Group announced a CHF 400 million share buyback programme that commenced on 2 March 2020 and was intended to be completed in May 2021. The programme was temporarily suspended from 25 March 2020 onwards. By 24 March 2020, 79 324 shares had been purchased for CHF 29 million under this programme at an average price of CHF 363.13. On 4 November 2020, the Group communicated its intention to resume the programme from 4 January 2021.
On 15 March 2021, the Board of Directors approved the annual financial statements and the financial report and authorised them for issue. The financial report, therefore, only reflects events up to that date.
In September 2016, the IASB amended IFRS 4 (applying IFRS 9 financial instruments with IFRS 4 insurance contracts) by introducing an optional temporary exemption from applying IFRS 9 for companies whose activities are predominantly connected with insurance. The use of this deferral approach to IFRS 9 has been aligned with the amended effective date of IFRS 17, so that qualifying insurance entities would only be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.
The Swiss Life Group determined its eligibility by comparing the carrying amount of its liabilities arising from contracts within the scope of IFRS 4 and liabilities relating to the insurance business such as investment contracts at FVPL (unit-linked), hybrid debt, post-employment liabilities, insurance payables and policyholder deposits with the total carrying amount of its liabilities. The insurance-related liabilities represent 93 per cent of the total carrying amount of its liabilities based on 31 December 2015.
Effective from 1 January 2020, the Swiss Life Group implemented the amendments to the definition of a business in IFRS 3 Business Combinations, issued by the IASB in October 2018. The amendments include the following changes: a business exists if inputs and substantive processes together have the ‘ability to contribute to the creation of outputs’ rather than the ‘ability to create outputs’; the assessment of whether market participants are capable of replacing any missing elements has been removed; the definitions of ‘substantive processes’ and ‘outputs’ have been narrowed; an optional fair value concentration test has been introduced to identify transactions that are not a business combination, that is, if substantially all of the gross assets’
In response to the IBOR reform, the International Accounting Standards Board amended the IFRS Standards IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures in September 2019. The amendments modify some specific hedge accounting requirements to provide relief from the potential effects of the uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties, if applicable. The amendments were implemented on 1 January 2020. Since the effectiveness of the Swiss Life Group’s hedging relationships is not impaired by the IBOR reform, the amendments have no material impact on the financial statements.
The Group’s consolidated financial statements include the assets, liabilities, income and expenses of Swiss Life Holding and its subsidiaries. A subsidiary is an entity over which Swiss Life Holding has control. Control is achieved if Swiss Life Holding has the power over the subsidiary, is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to use its power to affect its returns. Subsidiaries are consolidated from the date on which effective control is obtained. All intercompany balances, transactions and unrealised gains on such transactions have been eliminated. Unrealised losses have been eliminated unless the transaction provides evidence of an impairment of the asset transferred. A listing of the Group’s significant subsidiaries is set out in note 35. The financial effect of acquisitions and disposals of subsidiaries is shown in note 28. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions.
Foreign currency translation On consolidation, assets and liabilities of Group entities denominated in foreign currencies are translated into Swiss francs at year-end exchange rates. Income and expense items are translated into Swiss francs at the annual average exchange rate. Goodwill reported before 1 January 2005 is translated at historical exchange rates. Goodwill for which the acquisition date is on or after 1 January 2005 is carried in the foreign operation’s functional currency and is translated into Swiss francs at year-end exchange rates. The resulting translation differences are recorded in other comprehensive income as cumulative translation adjustments. On disposal of foreign entities (loss of control), such translation differences are recognised in profit or loss as part of the gain or loss related to the sale.
Debt securities reclassified from financial assets available for sale to loans and receivables due to the disappearance of an active market are not reclassified back to available for sale if the market becomes active again.
Swiss Life – Annual Report 2020 significant decrease in market value related to credit risk arises, namely after a downgrade of a debtor’s rating below single B– after initial recognition (i.e. CCC or lower according to Standard and Poor’s or equivalent) or when payments of principal and/or interest are overdue by more than 90 days. If there is objective evidence that an impairment loss on loans and receivables has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in profit or loss. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
The bonuses which are allocated to the policyholders in the participating insurance business (insurance and investment contracts) in Switzerland, France, Germany, Luxembourg and Liechten stein follow the definition of DPF as set out in IFRS 4 Insurance Contracts.
Amounts collected as premiums from investment-type contracts such as universal life and unit-linked contracts are reported as deposits. Only those parts of the premiums used to cover the insured risks and associated costs are treated as premium income. These include fees for the
Unit-linked contracts are insurance or investment contracts where the insurance benefits are linked to the unit values of investment funds. Certain unit-linked contracts contain guaranteed minimum insurance benefits. The deposit components of unit-linked liabilities are measured at fair value through profit and loss and are included in investment and unit-linked contracts (“unbundling of deposit components”). The components of the unit-linked liabilities that cover insurance risk, if any, are carried under insurance liabilities.
Purchase options, penalties, and changes to the lease term are considered in the measurement of the lease liability if reasonably certain. As an exemption, variable payments, payments for shortterm leases with an initial lease term of less than twelve months and low-value leases with an initial value of less than CHF 5000 are expensed as they occur.
Deferred acquisition costs for investment-type contracts such as universal life contracts are amor tised over the life of the contract based on the present value of the estimated gross profits or gross margins expected to be realised. The estimated gross profits are made up of margins available from mortality charges and contract-administration costs, investment earnings spreads, surrender charges and other expected assessments and credits.
Deferred origination costs (DOC) Incremental costs of obtaining investment management services for investment contracts without DPF are recognised as an intangible asset if they are expected to be recovered. The asset represents the contractual right to benefit from providing investment management services and is amortised on a straight-line basis consistent with the transfer to the customer of the investment management services. The asset is reviewed for impairment regularly. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are recognised as an expense when incurred.
Financial liabilities arising from third-party interest in consolidated investment funds are irrevocably designated as at fair value through profit or loss, as the related assets are managed and their performance is evaluated on a fair value basis.
In response to the IBOR reform, the International Accounting Standards Board amended the IFRS Standards IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases in August 2020. The amendments introduce a practical expedient if a change to a financial contract results directly from the IBOR reform and occurs on an “economically equivalent” basis. In these cases, changes will be accounted for by updating the effective interest rate. A similar practical expedient applies under IFRS 16 Leases for lessees when accounting for lease modifications which are a result of the IBOR reform. The amendments also modify some specific hedge accounting requirements. For example, hedging relationships will not have to be discontinued because of changes to hedge documentation required solely by the IBOR reform. The amendments will be effective on 1 January 2021.
In July 2014 the International Accounting Standards Board completed IFRS 9 Financial Instruments. The new standard replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 covers classification and measurement of financial instruments, impairment of financial assets and hedge accounting. Classification determines how financial assets and financial liabilities are accounted for in financial statements and how they are measured on an ongoing basis. Financial assets are classified on the basis of the business model within which they are held and their contractual cash flow characteristics. An expected-loss impairment model is introduced. Under the new model, it is no longer necessary for a credit event to have occurred before an impairment loss is recognised. The new model for hedge accounting aligns accounting treatment more closely with risk management activities. IFRS 9 was effective for annual periods beginning on or after 1 January 2018. However, as set out above, the Swiss Life Group will defer the application of IFRS 9 until 1 January 2023 and therefore continues to apply IAS 39 Financial Instruments: Recognition and Measurement, as its activities were predominantly connected with insurance on 31 December 2015.
Swiss Life – Annual Report 2020 3 Critical Accounting Estimates and Judgements in Applying Accounting Policies
As a Group policy, available-for-sale debt securities and loans and receivables are assessed for impairment when a significant decrease in market value related to credit risk arises, namely after a downgrade of a debtor’s rating below single B– after initial recognition (i.e. CCC or lower according to Standard and Poor’s or equivalent) or when payments of principal and /or interest are overdue by more than 90 days.
The carrying amounts of available-for-sale debt securities and loans and receivables are set out in notes 11, 12 and 13.
For insurance contracts and investment contracts with discretionary participation features with fixed and guaranteed terms, the definition of estimates occurs in two stages. At inception of the contract, es timates of future deaths, surrender, exercise of policyholder options, investment returns and admini strative expenses are made and form the assumptions used for calculating the liabilities during the life of the contract. A margin for risk and uncertainty (adverse deviation) is added to these assumptions. These assumptions are “locked-in” for the duration of the contract. Subsequently, new estimates are made at each reporting date in order to determine whether the values of the liabilities so established
Expenses and inflation In Switzerland, expenses are taken into account in the pricing of the contracts using internal statistics. Such calculated amounts are allocated to the different lines of business. Inflation is reflected in these calculations.
Premiums earned on insurance contracts 9 854 3 625 1 090 75 – – 14 644 –22 14 621
Premiums ceded to reinsurers –9 –122 –43 –17 – – –191 22 –169
Policy fees earned on insurance contracts 5 4 18 0 – – 27 – 27
Net gains/losses on financial assets –708 –95 58 –9 –7 –35 –796 – –796
Net gains/losses on financial instruments at fair value through profit or loss –42 81 121 1 6 25 191 – 191
Net gains/losses on investment property 668 63 99 – 16 – 847 – 847
Benefits and claims under insurance contracts –10 762 –2 919 –1 179 –36 – – –14 896 4 –14 891
Benefits and claims recovered from reinsurers 7 78 23 6 – – 113 –4 109
Net insurance benefits and claims –11 602 –2 841 –1 157 –30 – – –15 629 0 –15 629
Depreciation and amortisation expense –121 –206 –77 –17 –30 0 –450 – –450
Premiums ceded to reinsurers –8 –132 –43 –14 – – –197 18 –179
Share of profit or loss of associates 4 2 0 – 0 – 6 – 6
Benefits and claims under insurance contracts –13 316 –2 487 –1 219 –21 – – –17 044 7 –17 037
Net insurance benefits and claims –14 211 –2 410 –1 199 –18 – – –17 838 0 –17 838
Impairment of property and equipment and intangible assets – – 0 – –3 – –3 – –3
Assets held for sale 1 – – – – – 1 – 1
Financial assets at fair value through profit or loss 8 022 17 128 4 295 17 890 0 – 47 336 – 47 336
Intangible assets including intangible insurance assets 687 366 1 300 340 365 – 3 058 – 3 058
1 Including IFRS 16 right-of-use assets 2 Including IFRS 16 lease liabilities
The Group’s core business is life insurance and pensions. A life insurance and pensions contract re presents a long-term promise to the policyholder. To fulfil its future payment obligations to the policyholders, the insurance entities of the Group must be financially sound over an extended period of time. The ability to remain financially sound and strong depends on a number of risk factors. The Group’s risk map can be broadly divided into financial, insurance, strategic and operational risks. All of these risk categories may affect the financial stability of the Group.
Swiss Life – Annual Report 2020 5.1 Risk budgeting and limit setting
Swiss Life – Annual Report 2020 5.3 Contracts for the account and risk of the Swiss Life Group’s customers
TOTAL LIABILITIES LINKED TO ASSETS FOR THE ACCOUNT AND RISK OF THE SWISS LIFE GROUP’S CUSTOMERS 39 407 38 318
Net gains/losses on financial assets 8 –795 1 680 –1 –2 –796 1 678
Net gains/losses on investment property 847 776 0 – 847 776
Interest rate risk relating to financial in stru ments and insurance contracts The Group’s primary interest rate exposure is to contracts with guaranteed benefits and the risk that the interest rates of the financial assets purchased with the consideration received from the policyholders are insufficient to fund the guaranteed benefits and expected discretionary participation payable to them.
TOTAL INTEREST-SENSITIVE INSURANCE LIABILITIES 79 354 25 294 75 104 724
Debt securities available for sale 89 425 87 766 – – 89 425 87 766
Debt securities pledged as collateral 4 064 2 438 – – 4 064 2 438
Debt securities classified as loans 873 1 127 – – 873 1 127
TOTAL EXPOSURE TO CREDIT RISK 130 753 125 663 10 351 9 877 141 104 135 540
Credit risk mitigation – collateral held and other credit enhancements as at 31 December 2020
To mitigate specific credit risk, the Group may purchase credit risk protection in the form of credit default swaps and credit default swap indices. As at 31 December 2020, there were no such derivative contracts on the balance sheet that provided any notional principal protection (2019: CHF 821 million).
TOTAL OTHER LOANS AND RECEIVABLES 2 728 2 278 975 5 035 3 872 –31 14 858
Foreign Impairment currency Balance as at losses/ Write-offs translation Balance as at 1 January reversals and disposals differences end of period
The criteria used for the assessment of financial assets for impairment are described in note 2.8.
Currency risk The Swiss Life Group operates internationally and its exposures to currency risk primarily arise with respect to the euro, US dollar, British pound and Canadian dollar. Most of the investments and liabilities are denominated in Swiss francs, euros and US dollars, the values of which are subject to exchange rate fluctuations. The Group operates with various functional currencies (predominantly Swiss francs and euros). Its financial position and earnings could be significantly affected by a weakening of said foreign currencies against the Swiss franc.
The following table shows the Group’s sensitivity of monetary items to foreign currency exchange rate fluctuations in profit or loss before policyholder participation.
More than Up to 1 month 1–3 months 3–12 months 1–5 years 5–10 years 10 years Total
Derivatives designated as cash flow hedges – – 140 1 156 – – 1 296 10
Financial assets at fair value through profit or loss 4 854 3 670 5 688 4 772 36 794 35 250 47 336 43 692
Financial assets available for sale 10 068 8 270 98 373 100 116 – – 108 441 108 386
Financial assets pledged as collateral 20 13 4 045 2 425 – – 4 064 2 438
The Swiss occupational pensions (BVG) business of the group life insurance business in Switzerland is a significant part of the Group’s overall life insurance business. The BVG business provides an example of a minimum return guarantee. The guarantee takes the form of the right to convert an assured sum into a life annuity at a guaranteed conversion rate: the prevalent annuity conversion rate for the mandatory part of the BVG business is set at 6.8% for men (retirement age 65) and 6.8% for women (retirement age 64).
Disability and morbidity Disability risk reflects the financial consequences of groups of individuals getting disabled more often and/or recovering less quickly than expected. With regard to morbidity, the most significant risk factors are epidemics, widespread changes in lifestyle, such as eating, smoking and exercise habits, mental stress and economic effects.
Underwriting strategy Underwriting is the process of selecting and classifying insurable risks. The underwriting strategy attempts to ensure that the risks underwritten are profitable and well diversified in terms of type of risk and level of insured benefits. Life insurance underwriting is performed to ensure that the premiums and the general conditions of the insurance policies are adequate for the risks to be insured. The first step in the underwriting process is to determine which individual risks can be accepted. The second step is to place the accepted risks into groups of similar levels of risk. Both processes must be conducted objectively and consistently. The Group sets limits for the acceptance of insurance coverage arising from new and renewal business. Medical selection is part of the Group’s underwriting procedures, whereby premiums are charged to reflect the health condition and family medical history of the applicants. The limits relate to sums at risk, maximum insured losses or present value of premiums at the contract or insured person level. Depending on the type of business and the limit exceeded, the new or renewed contract must be approved by the corresponding risk committee or senior management. Contracts exceeding the set limits are tested individually for profitability according to predefined procedures and compliance assessments are performed before approval. Certain contracts which include specific risks relating to derivatives or insurance risk factors for which no reliable data is available must be submitted for approval irrespective of the amount of coverage offered. Insurance coverage exceeding set limits is subject to regular internal reporting requirements. Additionally, the underwriting practices must be in line with local laws.
CURRENT ESTIMATE OF CUMULATIVE CLAIMS 271 255 258 271 266 255 269 325 369 295 2 832
Approximately 1.1% in terms of earned insurance premiums was ceded as at 31 December 2020 (2019: 1.0%).
At 31 December 2020, if interest rates had been 50 basis points higher, profit or loss would have been CHF 26 million lower (2019: CHF 20 million lower) and other comprehensive income would have been CHF 1651 million lower (2019: CHF 1540 million lower). If interest rates had been 50 basis points lower, profit or loss would have been CHF 13 million higher (2019: CHF 13 million higher) and other comprehensive income would have been CHF 1965 million higher (2019: CHF 1740 million higher). These impacts are net after policyholder participation and tax. The sensitivity includes financial assets as well as insurance liabilities. “Investment funds – debt” and investment funds with substantial investment in debt instruments are included in the analysis. This sensitivity measures the impact of a parallel shift of the bond interest rates at the closing date.
At 31 December 2020, if mortality rates for life assurance had been higher by 5%, profit or loss would have been CHF 1 million lower (2019: CHF 1 million lower). This sensitivity measures the impact of an increase in the mortality rates in life assurance, e.g. endowments and term life insurance products where the net amount at risk is positive. If mortality rates for the annuity business had been lower by 5%, profit or loss would have been CHF 4 million lower (2019: CHF 5 million lower). This sensitivity concerns annuities in payment and future annuities. Whether policies are affected already during the savings accumulation period might depend on technical implementation issues, e.g. whether the accumulation and annuity phases are driven by the same mortality table. These impacts are net after policyholder participation and tax.
At 31 December 2020, if morbidity rates had been higher by 5%, profit or loss would have been CHF 29 million lower (2019: CHF 27 million lower). If morbidity rates had been lower by 5%, profit or loss would have been CHF 29 million higher (2019: CHF 27 million higher). These impacts are net after policyholder participation and tax.
BASIC EARNINGS PER SHARE FOR THE NET RESULT ATTRIBUTABLE TO EQUITY HOLDERS OF SWISS LIFE HOLDING (IN CHF) 32.87 36.59
Net result attributable to equity holders of Swiss Life Holding 1 046 1 199
RESULT USED TO DETERMINE DILUTED EARNINGS PER SHARE 1 046 1 199
Swiss Life – Annual Report 2020 7 Premiums, Policy Fees and Deposits Received
Interest income on financial assets available for sale 2 160 2 356
Financial assets designated as at fair value through profit or loss 1 85 599
TOTAL NET GAINS/LOSSES ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS 5 191 –1 620
Derivatives designated as fair value hedges 9 106 18 12 8 294 12 354
Derivatives designated as cash flow hedges 651 420 10 16 2 832 3 489
To manage the risks associated with derivative activity, the Group establishes and monitors exposure and risk limits. Exposure to price risk on both derivatives and their underlyings is managed in accordance with risk limits set by risk committees for buying or selling instruments or closing out positions. The risks arise from open positions in interest rates, currencies and equity instruments, all of which are exposed to general and specific market movements.
Derivatives designated as fair value hedges as at 31 December 2020
Interest rate swaps to hedge bond portfolios 3 6 1 454 4 –8 8 –4
TOTAL DERIVATIVES DESIGNATED AS FAIR VALUE HEDGES 9 18 8 294 803 –312 312 –803
Derivatives designated as fair value hedges as at 31 December 2019
The Swiss Life Group used interest rate swaps to hedge available-for-sale fixed-rate bonds and bonds classified as loans in Swiss francs, euro, British pounds and US dollars against changes in the fair value attributable to interest rate risk. The nominal amount of these bonds as at 31 December 2020 was CHF 1.3 billion (2019: CHF 3.3 billion).
In 2020, hybrid debt denominated in euro was used to protect non-monetary investments (hedge funds, equity securities and investment funds) against adverse movements in euro exchange rates.
Amounts recognised in OCI are reclassified into profit or loss as investment income over the life of the hedged financial assets and as gains/losses on financial assets when a hedged financial asset is derecognised. In 2020, a gain of CHF 404 million was reclassified from other comprehensive income to profit or loss (2019: CHF 49 million), of which CHF 46 million were included in investment income (2019: CHF 48 million), and CHF 358 million in net gains /losses on financial assets (2019: CHF 1 million).
Effective portion Ineffective recognised portion in other recognised comprehen- in Assets Liabilities sive income profit or loss
TOTAL DERIVATIVES DESIGNATED AS NET INVESTMENT HEDGES 85 – 4 461 107 –
Foreign currency debt designated as net investment hedges of foreign operations
In 2020, investments in real estate funds of EUR 182 million were hedged (2019: EUR 188 million).
Swiss Life – Annual Report 2020 10 Financial Assets at Fair Value through Profit or Loss
Financial assets for the account and risk of the Swiss Life Group’s customers 5 36 794 35 250
BALANCE AS AT END OF PERIOD 29 16 8 12 37 28
Details with regard to the financial assets reclassified are as follows.
Fair value as at end of period 1 041 1 296
BALANCE AS AT END OF PERIOD 38 120 34 866 of which pledged as security for mortgage loans 1 464 1 054
The undiscounted lease payments to be received under operating leases were as follows.
Agrippa Quartier GmbH & Co. Geschlossene InvKG, Heusenstamm 36.6% 49 – n/a n/a n/a
Share of net assets (carrying amount) 47 47 n/a n/a n/a n/a n/a n/a n/a n/a
TOTAL PROPERTY AND EQUIPMENT AS AT END OF PERIOD 326 19 16 24 385 of which buildings in the course of construction 4
No borrowing costs were capitalised in property and equipment in 2020 and 2019.
BALANCE AS AT END OF PERIOD 136 3 5 3 147
Effect of shadow accounting 0 0 –37 –61 – – –37 –62
BALANCE AS AT END OF PERIOD 6 7 1 363 1 360 89 54 1 459 1 421
Present value of future profits (PVP) The present value of future profits relates to portfolios of insurance contracts and investment contracts with discretionary participation acquired in a business combination or transfer of portfolios. It relates to contracts acquired in Germany and is amortised in proportion to gross profits or margins over the effective life of the acquired insurance and investment contracts.
Deferred acquisition costs (DAC) Certain acquisition costs relating to new and renewed insurance contracts and investment contracts with discretionary participation are deferred.
Deferred origination costs (DOC) These costs are recoverable and are directly attributable to securing the right to investment management services within investment contract policies. They relate to contracts in Switzerland, Luxembourg and Singapore.
TOTAL OTHER INTANGIBLE ASSETS AS AT END OF PERIOD 1 461 105 41 46 1 653
Goodwill Goodwill represents the excess of the fair value of the consideration transferred and the amount of any non-controlling interest recognised, if applicable, over the fair value of the assets and liabilities recognised at the date of acquisition. Goodwill includes amounts relating to both the Swiss Life Group’s interest and the non-controlling interest in the business acquired in the case where non-controlling interest is measured at fair value. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on associates is included in the carrying amount of the investment.
In December 2020, the divestment of Financière du Capitole resulted in a derecognition of goodwill of CHF 7 million.
The acquisition of Fontavis AG, Baar, in October 2019 resulted in the recognition of goodwill of CHF 25 million. The goodwill has been allocated to the “Asset Managers” segment. The goodwill resulting from the acquisition of in total eight property entities in Geneva and Vaud was nil. A goodwill of CHF 5 million was recognised in the segment “International” in connection with the acquisition of Ferguson Oliver Limited in Angus, United Kingdom.
Goodwill relating to Lloyd Continental has been allocated to the “France” segment. Goodwill relating to CapitalLeben has been allocated to the “International” segment. Goodwill relating to Corpus Sireo and Beos has been allocated to the “Asset Managers” segment. Of the goodwill relating to other acquisitions, CHF 10 million (31.12.2019: CHF 18 million) have been allocated to the “France” segment, CHF 50 million (31.12.2019: CHF 51 million) to the “Asset Managers” segment and CHF 71 million (31.12.2019: CHF 67 million) to the “International” segment as at 31 December 2020.
The discount rates used for the value-in-use calculations are based on weighted average cost of capital (WACC) derived from the Capital Asset Pricing Model. Peer group comparisons and the beta of the Swiss Life Group are used for determining the beta used in the calculation. Capital structure reflected in the WACC calculation is in line with the actual and target capital structure of the Swiss Life Group.
Net carrying amount of goodwill 152 152 437 438 70 72 660 663
Customer relationships The acquisition of Fontavis AG, Baar, in September 2019 led to the recognition of customer relationships of CHF 15 million.
Brands and other As at 31 December 2020, “Brands and other” comprises the brands Corpus Sireo, Mayfair, Beos, Fincentrum and Fontavis and a performance fee related to the acquisition of Fontavis, which is recognised as other intangible assets with a fair value of CHF 12 million at acquisition date. Following a reorganization of the use of the Corpus Sireo brand, an impairment loss of CHF 9 million was recognised in the second half of 2020. The brands of Beos, Fincentrum and Fontavis are amortised over their useful lives.
Swiss Life – Annual Report 2020 19 Investment and Unit-Linked Contracts
Investment contracts without DPF at fair value through profit or loss 30 614 599 – – 614 599
TOTAL INVESTMENT AND UNIT-LINKED CONTRACTS 42 024 42 303 119 114 41 905 42 188 of which for the account and risk of the Swiss Life Group’s customers
BALANCE AS AT END OF PERIOD 2 900 2 902 1 049 1 049 220 152 4 169 4 104
In November 2012, Swiss Life Insurance Finance Ltd. offered to existing lenders under the subordinated perpetual step-up loan placed in 1999 by Swiss Life Ltd, to purchase their loan holdings against a consideration consisting of both a cash component and a credit component. Altogether, EUR 265 million and CHF 290 million were purchased from lenders. The cash component amounted to a total of CHF 139 million. The credit component consists of a tranche of a subordinated dated step-up loan newly issued by Swiss Life Ltd. The subordinated dated step-up loan placed in connection with the offer amounts to CHF 471 million, is guaranteed by Swiss Life Holding, has a tenor of thirty years and is first repayable on 30 November 2022 at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest rate is six-month Libor plus a margin of 4.20% p.a. until 30 November 2022. If the loan is not redeemed on 30 November 2022, the margin increases by 1%.
Swiss Life AG EUR 600 EUR 600 4.500% 2016 2027 645 646
Swiss Life AG EUR 443 EUR 193 +2.050% 1999 2024 208 209
Swiss Life Holding AG CHF 150 0.350% 2019 2029 150 150
Swiss Life Holding AG CHF 200 3m CHF Libor 1 2019 2021 200 201 1 floored at 0.00% and capped at 0.05%
Third-party interests in consolidated investment funds 30 4 063 3 589
Claims under non-life insurance contracts 918 896 184 173 734 722
Claims under life insurance contracts 6 569 6 366 107 101 6 462 6 265 of which for the account and risk of the Swiss Life Group’s customers 8 399 7 109 1 – 8 398 7 109
Deposits released for payments on death, surrender and other terminations during the year –261 –233
Insurance liabilities linked to assets for the account and risk of the Swiss Life Group’s customers 8 399 7 109
As a result of the effects of the continuing low interest rate environment, reduced investment return expectations on the plan assets and increasing life expectancy, the board of trustees of the Swiss pension plan took measures to support the long-term financial stability. As of 2021, the pension plan will operate with lower conversion rates. To partly mitigate the effects of such a plan change, individual pension assets will be increased for all employees who joined before 2019. The amount depends on years of service. In addition, employees born in 1962 or older will be granted a minimum guarantee of their pension (not smaller than the amount they would receive with an assumed retirement at the end of 2020). The respective contributions will be funded by specific reserves already built up by the foundation responsible for the pension plan, as well as an additional contribution from the plan assets of a patronal foundation of Swiss Life Ltd. Additionally, the pension plan will increase savings contributions as of 1 January 2021. The total effect of this plan amendment has been recognized as a negative past service cost, i.e. a reduction of the defined benefit obligation, in December 2020.
Germany Pension plans in Germany are governed by the Law on Occupational Retirement (BetrAVG). The BetrAVG is part of the general labour legislation, which means that the BetrAVG establishes no rules on funding benefit obligations. It only describes the various possible ways of funding benefit obligations without further details on the practice of funding.
The objective of the investment process is to ensure that the return on the plan assets – together with the contributions – will be sufficient to fulfil the benefit promises. The investment strategy must be in line with the related BVG rules and regulations (e.g. requirements regarding diversification ). The foundations are responsible for defining the investment strategy taking into account the objectives, benefit obligations and risk capacity. The implementation of the investment policy is delegated to an investment committee.
For the plans that provide lump-sum benefits based on separate asset portfolios, the most significant but low risk is from capital markets fluctuations. The asset portfolios are broadly diversified with corporate bonds, German government bonds, covered bonds and exchangetraded funds.
Insurance contracts not eligible as plan assets under IFRS 1 261 1 346
To assess the funding situation of the defined benefit plans in total, plan assets as well as insurance contracts not eligible as plan assets under IFRS must be set off against the present value of the defined benefit obligation. The total deficit taking into consideration insurance contracts not eligible as plan assets under IFRS amounted to a deficit of CHF 474 million as at 31 December 2020 (2019: deficit of CHF 566 million).
BALANCE AS AT END OF PERIOD –4 041 –3 989 of which amounts owing to
Average life expectation at ordinary retirement age (women) 25.5-25.8 25.6 25.5-31.4 25.7–31.4
Average life expectation at ordinary retirement age (men) 22.7-23.2 22.6–23.1 22.9-31.6 22.0–28.0
At 31 December 2020, if the future expected salary growth had increased (decreased) by 50 basis points, the defined benefit obligation would have increased by CHF 22 million (decrease CHF 22 million). At 31 December 2019, if the future expected salary growth had increased (decreased) by 50 basis points, the defined benefit obligation would have increased by CHF 24 million (decrease CHF 23 million).
Duration of the defined benefit obligation (weighted average no. of years) 15.5 16.2
The contributions expected to be paid for the year ending 31 December 2021 are CHF 78 million. These contributions include amounts payable under insurance contracts issued to defined benefit plans covering own employees.
Certain subsidiaries sponsor various defined contribution plans. Participation in the various plans is based either on completion of a specific period of continuous service or on the date of hire. The plans stipulate contributions by both employers and employees. The expenses under these plans amounted to CHF 4 million in 2020 (2019: CHF 2 million).
The 2019 and 2020 equity compensation plans are based on the new Group-wide programme “Swiss Life 2021”, which was announced on 29 November 2018. The 2016, 2017 and 2018 equity compensation plans are based on the Group-wide programme “Swiss Life 2018”. For the purpose of supporting the achievement of the respective corporate goals, performance criteria have been determined by the Board of Directors analogously to the previous year’s objectives: IFRS profit (50% weighting), the risk and fee result (25% weighting) and cash to Swiss Life Holding for further strengthening of the financial substance and payout capacity (25% weighting).
In 2020, the number of RSUs granted under this programme amounted to 42 553. The fair value at the mea surement date amounted to CHF 377.24. The date of grant was 1 March 2020.
The expense recognised for share-based payment amounted to CHF 16 million in 2020 (2019: CHF 14 million).
The expected weighted-average tax rate for the Group in 2020 was 20.4% (2019: 19.0%). This rate was derived by obtaining a weighted average of the expected income tax rates in the various jurisdictions in which the Group operates. The change of the weighted-average tax rate is due to the geographical allocation of the profits and the different tax rates in these jurisdictions. The actual income tax expense differs from the expected amount as follows.
The enactment of the federal law on tax reform and AHV (Swiss old-age and survivors’ insurance) financing as of 1 January 2019, combined with cantonal tax law revisions led to a revaluation of the deferred income tax assets and liabilities in Switzerland. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same tax authority.
Deferred income tax liabilities have not been recognised on the aggregate amount of temporary differences with consolidated investments in subsidiaries to the extent the Group considers such undistributed earnings as being indefinitely reinvested. The amount of such temporary differences was approximately CHF 12.5 billion as at 31 December 2020 (2019: CHF 11.7 billion). If such amounts from entities controlled by the Group are ever distributed, no material tax liabilities would be incurred due to participation exemption rules, unrecognised tax loss carryforwards and applicable double taxation treaties.
Deferred income tax assets are recognised for tax-loss carryforwards only to the extent that realisation of the related tax benefit is probable. Swiss tax assets are calculated in accordance with cantonal and municipal tax legislation. The uncertainty of the utilisation of tax losses is taken into account in establishing the valuation allowance. For the following tax-loss carryforwards, which will expire as follows, no deferred income tax asset has been recognised.
Reclassifications and other disposals – – 3 – –13 –16 –10 –16
“Other” comprises various liabilities of uncertain timing or amount (e.g. indemnification provision relating to property development and management), including a provision of CHF 70 million in relation to the expected resolution with the US Department of Justice (DOJ) inquiry concerning prior business with US clients. The discussions with the DOJ are not concluded and, as a result, the final number could be somewhat higher. Although the precise timing cannot be predicted, the current expectation of Swiss Life is that this matter will be resolved in the near term.
As at 31 December 2020, the share capital of Swiss Life Holding consisted of 32 014 391 fully-paid shares with a par value of CHF 0.10 each, following a repayment of par value of CHF 5.00 per registered share in 2020 (2019: 33 594 606 fully-paid shares with a par value of CHF 5.10 each). In exercising voting rights, no shareholder can collect more than 10% of the total share capital directly or indirectly in respect of own shares or shares they represent. Conditional share capital was CHF 385 794.80 as at 31 December 2020 (2019: CHF 19 675 534.80).
In 2019, a distribution to shareholders out of the capital contribution reserve of CHF 83 million (CHF 2.50 per registered share) was made.
In November 2018, the Group announced a CHF 1 billion share buyback programme, which commenced in December 2018 and ended in December 2019. Under this programme, 2 208 715 Swiss Life Holding shares were repurchased at an average price of CHF 452.75. Repurchased shares were cancelled in July 2019 (628 500 shares) and July 2020 (1 580 215 shares).
– Gains and losses from fair value changes of financial assets available for sale. – Effective portion of gains and losses on hedging instruments in qualifying cash flow hedges. – Unrealised losses on financial assets reclassified from available for sale to loans and receivables in 2008 due to disappearance of an active market.
Net other comprehensive income before non-controlling interests –28 545 –68 8 456 –3 0 –3 453
Reclassification to profit or loss – gross –12 –2 240 –49 6 –2 295 – – – –2 295
On 22 March 2018, Swiss Life Ltd issued subordinated perpetual callable bonds in the amount of CHF 425 million. The bonds are guaranteed by Swiss Life Holding, have no fixed maturity date and are first callable on 25 September 2024 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed at 2.00% p.a. until 25 September 2024. Interest payments become mandatory depending on other transactions, which are themselves at the discretion of the Swiss Life Group, such as dividend payments. There is no accrual of interest to be recorded for the annual financial statements. If the bonds are not redeemed on 25 September 2024, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then-prevailing five-year CHF swap rate and the initial margin of 1.842% p.a. The bonds are classified as equity instruments, the interest net of tax of CHF 7 million (2019: CHF 7 million) is accounted for as a deduction from equity.
Profit or loss allocated to non-controlling interests 3 3 2 3
NET CHANGE IN CASH AND CASH EQUIVALENTS –418 1 197 1 –4
Continuous monitoring of solvency under the SST is conducted on an ongoing basis and calibration is updated based on the full SST calculations as at the beginning of each calendar year.
Swiss Life reports to the Swiss Financial Market Supervisory Authority FINMA. The reporting covers risk management and solvency, liquidity, legal structure, management organisation and intra-group transactions. The reporting is submitted on an ad-hoc, quarterly, half-yearly or yearly basis depending on the topic and is reviewed on a yearly basis by the statutory auditor according to the legal requirements. As at 31 December 2020 and 2019, Swiss Life was compliant with the legal requirements.
In October 2019, the Swiss Life Group acquired Gneiss Properties SA, Sandstone Properties SA and Granite Properties SA and a group of five property entities in Geneva. The acquired entities hold and operate a large property portfolio in the Swiss cantons of Geneva and Vaud.
The details regarding key management compensation in accordance with Article 663bbis of the Swiss Code of Obligations or the Ordinance against Excessive Compensation in Listed Stock Companies (Compensation Ordinance, VegüV), respectively, are set out in the Compensation Report, which forms part of the Corporate Governance section of the Annual Report 2020 of the Swiss Life Group. The information according to Article 663c of the Swiss Code of Obligations is shown in the Notes to the Swiss Life Holding Financial Statements.
Assets for the account and risk of the Swiss Life Group’s customers 31 787 29 920 1 145 1 055 3 862 4 275 36 794 35 250
Investment contracts without discretionary participation – – 614 599 – – 614 599
Third-party interests in consolidated investment funds – – 1 002 1 007 3 062 2 582 4 063 3 589
Equity securities: Equity securities categorised as level 2 of the fair value hierarchy comprise unlisted equities for which the prices are not available in the exchange market. The instruments are valuated by counterparties or third-party independent agencies based on market consistent valuation parameters.
Alternative investments: Alternative investments classified as level 2 assets comprise hedge funds of funds and leveraged loan funds based on third-party quotes substantiated by observable market data, such as recent transactions or valuation techniques that reflect the market participant’s assumptions. The level 2 classification is chosen because those funds maintain an irregular basis of price and are valuated with some time lag.
Over-the-counter derivatives: Level 2 fair values of over-the-counter derivatives on currencies, interest rates and equities are based on theoretical valuations with observable market data from well-known data providers as inputs. The fair value measurement is based on acknowledged, well-established models.
– Forward starting bonds are valued on a cost-of-carry basis using the discounted cash flow method. Main inputs to calculate the current forward rate are the spot price of the underlying bond and the discount factors to coupon payment dates /maturity date.
Level 3: Valuation techniques and inputs The exposure of level 3 financial instruments primarily consists of alternative investments (private equity, hedge funds) and real estate funds.
Alternative investments: The fair values of private equity and infrastructure investments are based on generally accepted valuation techniques. Valuation techniques use a maximum of market inputs and include the use of comparable recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants. Because of the inherent valuation uncertainty, those estimated fair values may differ significantly from the values that would be used if a ready market for the financial assets existed, and those differences could be material. The fair values are determined by the general partner in the partnership and reviewed by management. In determining the fair value of fund investments, the partnership considers the funds as transparent holding vehicles. The fair values of the underlying investments are determined using the general partner valuation. These fair value measurements are generally categorised as level 3 within the fair value hierarchy.
Investments in associates: The valuation methods of investments in associates categorised as level 3 of the fair value hierarchy are identical to the methods outlined for level 3 real estate funds.
Deferred application of IFRS 9 Financial assets that on a specific date give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding meet the SPPI criterion. The fair value of such assets and those that do not meet the SPPI criterion as well as the change in fair value are disclosed in the following table.
Debt instruments for the account and risk of the Swiss Life Group’s customers –139 773 7 683 6 934
Reconciliation of fair value measurements categorised within level 3 The following tables show a reconciliation from the opening balances to the closing balances for fair value measurements categorised within level 3 of the fair value hierarchy.
At fair At fair value value through through profit Available profit Available or loss for sale or loss 1 for sale
Total gains/losses recognised in profit or loss – – –5 –29 –9 –71 847 733
Foreign currency translation differences – 0 –7 –68 –29 –104 –309 –517
During 2020, debt securities of CHF 60 million (2019: CHF 32 million) were transferred from level 1 into level 2 due to reduced frequency of price quotations, and debt securities of CHF 60 million (2019: CHF 344 million) were transferred from level 2 into level 1 due to new liquid price sources. Further, debt securities of CHF 61 million (2019: nil) were transferred from level 3 into level 2 as valuation as at 31 December 2020 was based on observable market data. Assets for the account and risk of the Swiss Life Group’s customers of CHF 66 million (2019: nil) were transferred from level 3 into level 1, and CHF 75 million (2019: nil) from level 2 into level 1 due to available quoted prices. During the comparative period only, real estate funds of CHF 161 million were listed at the SIX Swiss Exchange and therefore transferred from level 2 into level 1, and changes in the pricing frequency (daily/weekly) resulted in the following transfers of investment funds: CHF 10 million from level 1 into level 2, and CHF 6 million from level 2 into level 1.
Foreign currency translation differences – – 0 0 –3 –43 –3 –43
BALANCE AS AT END OF PERIOD – – 126 136 3 062 2 582 3 188 2 719
Total gains/losses recognised in profit or loss –14 31 –100 17 847 776
at the end of the period –21 –21 –91 17 844 748
at the end of the period – – –40 –74 – –
Swiss Life – Annual Report 2020 30.2 Fair value of financial instruments carried at amortised cost
The following table shows the carrying amounts and fair values of those financial assets and liabilities not measured at fair value in the Group’s balance sheet.
Investment contracts without discretionary participation 1 0 1 0 1 1 Carrying amount approximates fair value. 2 Excluding third-party interests in consolidated investment funds
Gross amounts of recognised financial liabilities set off – – – – 0 0 0 0
NET AMOUNTS PRESENTED IN THE BALANCE SHEET 3 008 2 090 – – 3 9 3 011 2 099
Gross amounts of recognised financial liabilities before offsetting 1 387 1 311 4 114 2 495 0 0 5 501 3 806
NET AMOUNTS PRESENTED IN THE BALANCE SHEET 1 387 1 311 4 114 2 495 – – 5 501 3 806
They represent unfunded commitments to make investments in direct private equity, private equity funds, infrastructure and hedge funds. Such commitments do not involve credit or market risk, as the Group purchases investments at market value at the time the commitments are invoked.
They mainly relate to projects for the purchase or construction of investment property in Switzerland and Germany.
The following table provides details of financial assets which have been sold or otherwise transferred, but which do not qualify for derecognition because substantially all risks and rewards of ownership are retained. Repurchase agreements and securities lending transactions are discussed in notes 2.7 and 13. Other securities pledged include debt securities pledged as collateral under reinsurance contracts issued and debt securities pledged as collateral under prime broker contracts to cover margins due in respect of derivative transactions.
Securities pledged under repurchase agreements1 4 064 2 438 4 064 2 438
There were no events after the reporting period that would require disclosure.
Adroit Private Equity AG, Zürich CH 100.0% 100.0% Private equity CHF 5 000 000 aXenta AG, Baden CH 100.0% 100.0% Information technology CHF 150 000
Livit FM Services AG, Zürich AM 100.0% 100.0% Services CHF 100 000
Swiss Life Lab AG, Zürich CH 100.0% 100.0% Services CHF 100 000
Swiss Life Select International Holding AG, Zürich IN until 17.06.2019 – –
CrossQuantum, Levallois-Perret (formerly Nanterre) FR 100.0% 100.0% Services EUR 500 000
OWELLO, Levallois-Perret FR from 27.01.2020 99.8% 100.0% Services EUR 1 000 000
PARIS PRIME OFFICE, Paris CH from 07.05.2019 41.6% 55.4% Real estate EUR 426 165 000
BEOS AG, Berlin AM 100.0% 100.0% Asset management & Real estate EUR 500 000
BEREM Property Management GmbH, Berlin AM 100.0% 100.0% Asset management & Real estate EUR 25 300
formerly ACB Projekt GmbH), Köln AM 100.0% 100.0% Asset management & Real estate EUR 25 000
CORPUS SIREO Immobilien Beteiligungs GmbH, Köln CH 100.0% 100.0% Asset management & Real estate EUR 25 000
Köln AM 100.0% 100.0% Asset management & Real estate EUR 30 000
GmbH & Co. KG, Köln AM from 23.11.2020 100.0% 100.0% Asset management & Real estate EUR 100 000
CORPUS SIREO Projektentwicklung Wohnen GmbH, Köln AM 100.0% 100.0% Asset management & Real estate EUR 4 000 000
Maicor Projektentwicklung Winterhafen GmbH, Mainz AM 74.2% 74.2% Asset management & Real estate EUR 25 600
SL AM PE Logistik GmbH, Köln AM from 17.04.2020 100.0% 100.0% Holding EUR 25 000
Hamburg DE from 30.06.2019 51.0% 51.0% Services EUR 25 600 1 Segment (CH = Switzerland, AM = Asset Managers, IN = International, FR = France, DE = Germany)
EVER S. München S.C.S., Munsbach DE from 15.02.2019 100.0% 100.0% Asset management & Real estate EUR 1 000
Luxembourg CH from 02.04.2019 100.0% 100.0% Investment funds CHF 26 665 286
Opportunities S.C.A., SICAV-SIF, Luxembourg AM 82.6% 82.6% Asset management EUR 921 683 870
Swiss Life Loan Fund (LUX) SA, SICAV-SIF, Luxembourg DE 100.0% 100.0% Investment funds USD 40 000
Swiss Life Participations Luxembourg S.A., Luxembourg IN until 12.08.2020 – –
SwissLife LuxCo S.à r.l., Luxembourg FR 100.0% 100.0% Holding EUR 12 000 1 Segment (CH = Switzerland, AM = Asset Managers, IN = International, FR = France, DE = Germany)
Chase de Vere IFA Group Plc, London IN 100.0% 100.0% Finance GBP 34 000 000
Chase de Vere IFA Services Limited, Manchester IN until 25.02.2020 – –
Chase de Vere Loans Limited, Manchester IN until 25.02.2020 – –
MAYFAIR CAPITAL PARTNERS LIMITED, London AM 100.0% 100.0% Asset management GBP 1
MCIM CORPORATE TRUSTEES LIMITED, London AM 100.0% 100.0% Asset management GBP 1
Nestor Financial Group Limited, London IN from 01.10.2020 100.0% 100.0% Broker GBP 1 000
Forest 1, Bruxelles FR from 11.12.2020 100.0% 100.0% Real estate EUR 61 500
Swiss Life BelCo, Etterbeek FR 100.0% 100.0% Real estate EUR 3 889 340
Swiss Life Insurance Finance Ltd., Grand Cayman Other 100.0% 100.0% Finance EUR 5 000 1 Segment (CH = Switzerland, AM = Asset Managers, IN = International, FR = France, DE = Germany)
Fincentrum & Swiss Life Select a.s., Praha IN 100.0% 100.0% Services CZK 700 700 000
Fincentrum Reality s.r.o., Praha IN 100.0% 100.0% Services CZK 200 000
Swiss Life Select Ceska Republika s.r.o., Brno IN until 01.09.2019 – –
(formerly Fincentrum a.s.), Bratislava IN 100.0% 100.0% Services EUR 33 200
PricewaterhouseCoopers AG, Birchstrasse 160, Postfach, CH-8050 Zürich, Switzerland Telefon: +41 58 792 44 00, Telefax: +41 58 792 44 10, www.pwc.ch
In our opinion, the consolidated financial statements (pages 164-318) give a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.
We concluded full scope audit work at 10 reporting units in 5 countries. Our audit scope addressed over 88% of the Group's total assets and 99% of the Group's total net earned premiums. In addition, specified procedures were performed on further five reporting units.
How we determined it 5% of profit before tax and policyholder participation
As set out in note 22 – Insurance Liabilities – total net future life policyholder benefits of the Swiss Life Group amount to CHF 109’412 million. We consider the future life policyholder benefits in Switzerland, which make up 77% of the future life policyholder benefits on the Group's balance sheet as a key audit matter.
Swiss Life Holding Ltd | Report of the statutory auditor to the General Meeting persistency, expenses and investment return, plus a margin for adverse deviations.
The recoverable amounts have been determined on a valuein -use basis and use cash flow projections based on financial budgets approved by management and the board of directors.
The calculations are based on present values that use a single set of estimated cash flows and a single discount rate per cash generating unit. The cash flow projections cover a three or five-year period, and consider a terminal value after such period, based on long-term growth assumptions in the various geographical markets, which is material to the overall value-in-use. In addition, a significant driver of the value-in-use is the discount rate, which is based on the weighted average cost of capital.
We have obtained the cash flow projections based on financial budgets for the individual cash generating units approved by management and the board of directors. We challenged management as to the feasibility of reaching the cash flows.
As set out in note 14 Investment Property - property held for investment amount to CHF 38’120 million for the Swiss Life Group.
In addition, we assessed the average discount rate resulting from valuing the investment property portfolio and compared it to market data.
In its 2019 financial statements, Swiss Life announced an additional share buyback programme totalling CHF 400 million. At the end of March 2020, Swiss Life, like all other major listed banks and insurance companies in Switzerland, temporarily suspended its share buyback programme having repurchased 79 324 shares worth CHF 29 million. 1 580 215 treasury shares, which had been repurchased under the share buyback programme completed in 2019, were cancelled in the year under review. The number of outstanding shares as at the end of 2020 amounted to 32 014 391, of which 0.68% are held by Swiss Life Holding.
New loans totalling CHF 93 million were awarded to Group units to finance real estate projects or smaller acquisitions. Including repayments of expired loans and payments under lines of credit granted, the outstanding amount decreased slightly to CHF 1589 million (previous year: CHF 1637 million).
Interest income declined to CHF 30 million (previous year: CHF 37 million) and earnings from investments in bonds and fund units to CHF 22 million (previous year: CHF 33 million). Both loans granted internally and external investments in foreign currencies are almost fully hedged with currency futures. The cost of hedging during the reporting period was CHF 7 million (2019: CHF 24 million). The investment book value remained almost unchanged during the year under review at CHF 3221 million.
The 2020 Financial Statements were prepared in accordance with the provisions of Swiss accounting law (Title 32 of the Swiss Code of Obligations). Swiss Life Holding’s Financial Statements are presented in millions of Swiss francs (CHF), which is the presentation currency. Figures may not add up exactly due to rounding.
Provisions The provision of CHF 70 million was formed in relation to the expected resolution with the US Department of Justice (DOJ) inquiry concerning prior business with US clients. The discussions with the DOJ are not concluded and, as a result, the final number could be somewhat higher.
Major shareholders BlackRock Inc., 55 East 52nd Street, New York 10055, USA, reported in a publication of 6 May 2017 that it held through various companies a total of 5.28% of the voting rights for Swiss Life Holding.
Issue of two senior bonds in 2013 Two senior bonds for a total amount of CHF 425 million were issued on 21 June 2013, split into a tranche of CHF 225 million with a tenor of six years which was repaid on 21 June 2019 (coupon of 1.125%) and a tranche of CHF 200 million with a tenor of ten years until 2023 (coupon of 1.875%).
Treasury shares In the year under review, the companies in the Swiss Life Group purchased 45 000 Swiss Life Holding shares at an average price of CHF 319.05. As at 31 December 2020, the Swiss Life Group held 139 808 treasury shares which are not part of the share buyback programme.
As in the previous year, the number of full-time positions is not above 50 employees on average over the year.
Disclosure of compensation to the Board of Directors and the Corporate Executive Board in accordance with Art. 663bbis of the Swiss Code of Obligations (CO) and Art. 14–16 of the Federal Ordinance against Excessive Compensation in Listed Stock Companies, and disclosure of the shareholdings of members of the Board of Directors and the Corporate Executive Board in accordance with Art. 663c of the CO
1 Total number of RSUs allocated in the years 2018, 2019 and 2020 in connection with the relevant equity compensation plan. The RSUs represent future subscription rights that entitle the individuals concerned to receive SLH shares after a period of three years, provided that the relevant conditions are met at that point. In addition to the reported shareholding, Thomas Buess held a total of 2861 RSUs as at the balance sheet date of 31 December 2020, which were allocated to him in 2018 and 2019 in the context of his former function as Group CFO and Member of the Corporate Executive Board of Swiss Life.
Share ownership/participation rights as at 31 December 2019 As at 31 December 2019, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of registered Swiss Life Holding shares and future subscription rights to Swiss Life Holding shares in the form of Restricted Share Units (RSUs).
In accordance with the Swiss Code of Obligations, participations are valued with deductions for write-downs as necessary.
Swiss Life Holding Ltd | Report of the statutory auditor to the General Meeting equity value of each participation determined for the IFRS closings. As long as the IFRS equity value exceeds the book value of the participation, the conclusion is drawn that the valuation of the participation is sufficient.
Performance of Swiss Life (in %) –15 +28 +10 +20 +6
Performance of Dow Jones STOXX 600 Insurance Index (in %) –14 +24 –10 +7 –6
Dividend paid / par value repayment per share 05.05./24.07. 20.00 16.50 13.50 11.00 8.50
Dividend yield on year-end price (in %) 30.12. 4.85 3.40 3.57 3.19 2.95
Gross written premiums, policy fees and deposits received 20 020 23 008 19 218 18 565 17 366
Net insurance benefits and claims –15 629 –17 838 –13 961 –13 189 –14 064
Number of employees (full-time equivalents) 9 823 9 330 8 624 7 979 7 801 2 equity excl. unrealised gains/losses on financial instruments 3 incl. share buy-back (2020: CHF 29 million / 2019: CHF 913 million / 2018: CHF 87 million)
Annual Report 2020 The Annual Report is published in German and English and contains information on corporate governance, risk management, sustainability and the annual accounts.